International Ground v. Mayor and City

• Decision Date: 22 January 2007
• Docket Number: No. 05-1827.,05-1827.
• Citation: International Ground v. Mayor and City, 475 F.3d 214 (4th Cir. 2007)
• Parties: INTERNATIONAL GROUND TRANSPORTATION, Incorporated, t/a White's Taxi Service, Incorporated, t/a White's International Taxi, Plaintiff-Appellant, v. MAYOR AND CITY COUNCIL OF OCEAN CITY, MARYLAND, a Maryland Municipal Corporation; James N. Mathias, Jr.; Bernadette Dipino; James S. Hall, Member of Ocean City Police Commission; Joseph T. Hall, II, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

475 F.3d 214

INTERNATIONAL GROUND TRANSPORTATION, Incorporated, t/a White's Taxi Service, Incorporated, t/a White's International Taxi, Plaintiff-Appellant, v. MAYOR AND CITY COUNCIL OF OCEAN CITY, MARYLAND, a Maryland Municipal Corporation; James N. Mathias, Jr.; Bernadette Dipino; James S. Hall, Member of Ocean City Police Commission; Joseph T. Hall, II, Defendants-Appellees.

No. 05-1827.

United States Court of Appeals, Fourth Circuit.

Argued: October 27, 2006.

Decided: January 22, 2007.

ARGUED:

Francis Raymond Laws, Thomas & Libowitz, P.A., Baltimore, Maryland, for Appellant. Bruce Frederick Bright, Ayres, Jenkins, Gordy & Almand, P.A., Ocean City, Maryland, for Appellees.

ON BRIEF:

Patrick J. Madigan, Thomas & Libowitz, P.A., Baltimore, Maryland, for

Appellant. Guy R. Ayres, III, Ayres, Jenkins, Gordy & Almand, P.A., Ocean City, Maryland, for Appellees.

Before NIEMEYER, TRAXLER, and SHEDD, Circuit Judges.

Affirmed in part and reversed in part by published opinion. Judge SHEDD wrote the opinion, in which Judge TRAXLER concurred except as to Part II(A). Judge TRAXLER wrote an opinion concurring in part and concurring in the judgment. Judge NIEMEYER wrote an opinion concurring in the judgment in part and dissenting in part.

OPINION

SHEDD, Circuit Judge:

International Ground Transportation, Inc. ("IGT")¹ brought this action under 42 U.S.C. § 1983 against the Mayor and City Council of Ocean City, Maryland ("the City"), and against individual officials of Ocean City ("the individual defendants"), seeking recovery for damages to its taxicab business incurred as a result of alleged unconstitutional acts by the City and the individual defendants. A jury returned a verdict in favor of IGT against the City and awarded $250,000 in compensatory damages; however, the jury found the individual defendants not liable. The City then moved for judgment as a matter of law, arguing that a finding of no liability on the part of the individual defendants precluded a finding that the City was liable and that IGT failed to prove damages with sufficient particularity to support the jury's damages award. IGT also moved for judgment as a matter of law, contending that the evidence established that the individual defendants were liable as a matter of law. Without explanation, the district court granted the City's motion and denied IGT's motion, and IGT now appeals. For the reasons set forth below, we affirm in part and reverse in part.

I

IGT is a taxicab company that formerly operated in Ocean City.² After opening in May 2002, IGT saw a steady increase in business and revenue from advertisements in its vehicles, a voucher system with a local hospital, and a promotional program driving patrons from bars. By April 2003, IGT had grown from 14 to 60 taxicabs and was the largest taxicab company in Ocean City.

To operate in Ocean City, a taxicab must pass two inspections. First, the vehicle must be inspected by a station licensed by the Automotive Safety Enforcement Division of the Maryland State Police. After receiving an inspection certificate from the station, the taxicab must be inspected by the Ocean City Police Department ("OCPD"). After the vehicle passes both inspections, OCPD issues an inspection certification decal which must be displayed in the rear window of the taxicab. Inspection certification decals expire on April 30 of each year.

In April 2003, OCPD scheduled inspection for IGT's fleet of taxicabs, each of which had been inspected at state inspection stations at a prior time. Shortly before the date of the OCPD inspection, however, OCPD notified IGT that the OCPD inspection must occur within 90 days of the state inspection. Because many of its vehicles had undergone their state inspection more than 90 days before the scheduled OCPD inspection, IGT was forced to act quickly to have the taxicabs reinspected at state stations. Unable to locate a station that could handle the volume of inspections in the immediate area, IGT had many of its taxicabs inspected at Oliver's Automotive ("Oliver's"), an inspection station in Waldorf, Maryland. The taxicabs were then taken to OCPD, where they passed inspection and received inspection certification decals.

Shortly thereafter, OCPD instructed IGT to bring several of its vehicles to the OCPD station. Upon arrival, two Maryland state troopers inspected IGT's taxicabs, apparently as part of an investigation into Oliver's. After inspecting several of IGT's taxicabs, the state troopers issued three safety equipment repair orders. All of IGT's licensed vehicles remained in operation.

On May 21, 2003, IGT received a letter from OCPD bearing the signature of OCPD Chief Bernadette DiPino. This letter advised IGT that "every vehicle you are currently operating in Ocean City is suspended and is to be removed from service until such time as you have each vehicle reinspected by a certified inspection station." J.A. 799. OCPD issued the letter to IGT after receiving information from the state troopers who were investigating Oliver's. The state troopers informed OCPD that they doubted the sufficiency of the inspections at Oliver's and that any vehicles inspected there may be unsafe. The troopers further informed OCPD that, of the six IGT taxicabs they had inspected, five had "obvious defects" with respect to the suspension, exhaust system, emissions, mirrors, seatbelts, steering, brakes, wipers, and/or tires. J.A. 801. The troopers noted that

[a]ll of the defects, with the exception of the Tire [sic], appeared to have been on the cabs for quite some time, and would have certainly been present at the time they were State Inspected [at Oliver's]. Four of the vehicles with defects were State Inspected at Oliver's Automotive .... Based on the quantity of defects found on a random sampling of cabs inspected, there is a strong possibility that many more cabs would also have defects still existing. All of the defects found were obvious in nature and found without the use of inspection tools.

Id.

On June 5, 2003, DiPino issued a letter inviting IGT to the next regularly scheduled Police Commission meeting, set for June 11, 2003, "in an effort to resolve [its] licensing issue." J.A. 803. The owners of IGT, Brian and Teresa Hamilton, attended the meeting along with their counsel. The purpose of the meeting, however, was not to provide a forum in which IGT could challenge the suspension of its taxicab licenses through the presentation of argument and evidence. At the meeting, OCPD officer Hugh Bean reported on IGT's failure to pass some vehicle inspections and that IGT's taxicabs had been temporarily de-licensed pending reinspection.

IGT subsequently brought suit against the City and the individual defendants: DiPino, Mayor James N. Mathias, and Police Commission members James S. Hall and Joseph T. Hall. IGT alleged that the City and the individual defendants acted unilaterally to revoke their taxicab licenses without following the provisions of the United States Constitution and Maryland state law. Specifically, IGT alleged that the City and the individual defendants violated its rights to procedural and substantive due process, equal protection, the ability to engage in interstate commerce, and various Maryland state constitutional provisions. IGT sought actual and punitive damages, contending that its business was decimated by the revocation of its taxicab licenses, especially as the suspension of its taxicab fleet occurred shortly before the busy Memorial Day weekend. IGT alleged that its voucher revenue decreased from as much as $6,000 per month to $1,000 per month, that it lost advertising revenue of $250,000 per year, that its business went from a value of $4 million to become defunct, and that it was faced with over $2 million in total debt.

The City and the individual defendants denied many of the allegations made by IGT and asserted numerous defenses. The defendants' principal argument was that they had acted in an emergency situation to remove IGT's unsafe taxicabs from the streets of Ocean City. They maintained that the emergency nature of the threat presented by IGT's vehicles justified a delicensing of the taxicabs without a predeprivation hearing. They also asserted a defense of qualified immunity.

The case was tried to a jury. At the close of evidence, the defendants moved for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(a). The district court granted the motion as to IGT's claims for punitive damages on the state-law violations but denied the motion in all other respects. The court instructed the jury extensively on the constitutional issues involved in the case and specifically charged the jury that it could find the individual defendants not liable based on qualified immunity. The jury returned a verdict in favor of IGT against the City but returned a verdict in favor of the individual defendants. More specifically, the jury answered "No" when asked whether the individual defendants "deprived White's Taxi of procedural due process ... substantive due process ... equal protection ... [or] its ability to engage in interstate commerce." J.A. 826-27. The jury then answered "Yes" when asked whether the City "deprived White's Taxi of procedural due process [or] substantive due process." J.A. 827. Finally, the jury awarded IGT $250,000 in actual damages.

Following the verdict, both parties moved for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b). IGT maintained that the evidence presented at trial established as a matter of law that the individual defendants had deprived it of its rights to procedural and substantive due process and that they had not established a qualified immunity defense. The City opposed IGT's motion and argued instead that it was entitled to judgment as a matter of law. The City presented two grounds in support of its motion: (1) the jury's finding that the individual defendants were not liable precluded a finding of liability on...