Loyal Tire & Auto Center, Inc. v. Town of Woodbury

• Decision Date: 12 April 2006
• Docket Number: Docket No. 05-1471-CV(XAP).,Docket No. 05-1295-CV(L).
• Citation: 445 F.3d 136
• Parties: LOYAL TIRE & AUTO CENTER, INC., Plaintiff-Appellee-Cross-Appellant, v. TOWN OF WOODBURY, Defendant-Appellant-Cross-Appellee, Sheila Conroy and Robert Kwiatkowski, Defendants-Cross-Appellees, Lorraine McNeill, Geraldine Gianzero, Henry Dobson, and Holly Gubernick Borzacchiello, Defendants.
• Court: U.S. Court of Appeals — Second Circuit

445 F.3d 136

LOYAL TIRE & AUTO CENTER, INC., Plaintiff-Appellee-Cross-Appellant, v. TOWN OF WOODBURY, Defendant-Appellant-Cross-Appellee Sheila Conroy and Robert Kwiatkowski, Defendants-Cross-Appellees Lorraine McNeill, Geraldine Gianzero, Henry Dobson, and Holly Gubernick Borzacchiello, Defendants.

Docket No. 05-1295-CV(L).

Docket No. 05-1471-CV(XAP).

United States Court of Appeals, Second Circuit.

Argued: January 25, 2006.

Decided: April 12, 2006.

COPYRIGHT MATERIAL OMITTED

Michael P. McGovern, The McGovern Law Firm, Knoxville, TN (Michael J. Weiner and Richard H. Sarajian, of counsel, Montalbano, Condon & Frank, P.C., New City, NY), for Plaintiff-Appellee-Cross-Appellant.

William G. Kelly (Frank J. Ciano and Robert Varga, of counsel), Goldberg Segalla, LLP, White Plains, NY, for Defendant-Appellant-Cross-Appellee.

Before: WALKER, Chief Judge, LEVAL and SOTOMAYOR, Circuit Judges.

SOTOMAYOR, Circuit Judge.

Defendant-appellant-cross-appellee the Town of Woodbury ("Woodbury") appeals from a judgment of the United States District Court for the Southern District of New York (Brieant, J.), entered on February 8, 2005. Seeking damages, a declaratory judgment, and injunctive relief, plaintiff-appellee-cross-appellant Loyal Tire & Auto Center, Inc. ("Loyal Tire") challenged a provision of Woodbury's municipal towing law that requires all tow companies licensed by Woodbury to maintain a tow yard within one mile of the town police department. Loyal Tire argued that the law is preempted by 49 U.S.C. § 14501 and violates its rights to due process and equal protection and the dormant Commerce Clause. The district court granted summary judgment to Loyal Tire after concluding that federal law preempts the municipal towing law both because New York state had not delegated to towns its safety regulatory authority over intrastate carriers of property and because Woodbury's municipal towing law did not constitute an exercise of safety regulatory authority. We hold that (1) New York state delegated to towns its safety regulatory authority over local tow-truck operations, but Woodbury's municipal towing law is preempted by 49 U.S.C. § 14501 because it is not genuinely responsive to safety concerns; (2) the district court properly declined to award damages to Loyal Tire under 42 U.S.C. § 1983 on the § 14501 preemption claim because the statute is not enforceable via § 1983 but erred by awarding attorneys' fees to Loyal Tire under 42 U.S.C. § 1988(b) on that claim; (3) the district court properly dismissed Loyal Tire's due process and equal protection claims but erred by failing to reach Loyal Tire's claim for damages under the dormant Commerce Clause; and (4) the district court properly dismissed Loyal Tire's claim against defendants-cross-appellees Town Supervisor Sheila Conroy ("Conroy") and Police Chief Robert Kwiatkowski ("Kwiatkowski") for conspiring to violate its rights under the Constitution and laws of the United States. We affirm in part and reverse in part the judgment of the district court and remand the case for further proceedings consistent with this opinion.

BACKGROUND

Michael Hagopian, the former president of Loyal Service Center, Inc. ("Loyal Service") and current owner of Loyal Tire, first applied in 1987 for Loyal Service to be placed on the list of tow companies, known as the "rotating call list," that the Woodbury Police Department uses to contact tow companies when their services are needed.¹ Loyal Service commenced litigation in state court after Woodbury refused to consider its application, but withdrew the litigation when Woodbury adopted a law in 1988 that required, as a prerequisite for obtaining a license to be on the list, that tow companies maintain a tow yard within one-half of a mile of the town line. Loyal Service was thereafter granted a license and began participating in the rotational towing list.

In 1989, Hagopian moved his company to the Village of Harriman and began to operate under the name Loyal Tire. Loyal Tire is located within one-half of a mile of the Woodbury town line and was licensed to participate in the rotational tow list. Loyal Tire contends, however, that the police department enforced the 1988 law, and its subsequent iterations, in a discriminatory manner and that many of these acts of discriminatory enforcement occurred between June 2000 and June 2003, when Loyal Tire filed the complaint in this action. Loyal Tire complains principally of two purported acts of discriminatory enforcement. First, Loyal Tire alleges that Kwiatkowski refused to renew its towing permit in 1995 until it complied with regulations requiring a fence around its impoundment facility, while a local operator who maintained a tow yard within the town limits was permitted to continue operating between 1999 and 2001 notwithstanding its non-compliance with the same regulation. Second, the police department purportedly skipped Loyal Tire's turn on the rotating call list each time Loyal Tire had responded to an owner-initiated tow request or a call from the Village of Harriman's rotational towing list. Local operators, however, were not penalized even when they refused tow requests on certain occasions.

Loyal Tire attributes much of Woodbury's purported ill-will against it to an incident involving town board member Holly Gubernick Borzacchiello's father, who died in an automobile accident on November 2, 2000. After Loyal Tire towed the car from the scene of the accident, Kwiatkowski wrote a letter to the town board, dated November 29, 2000, in which he complained about several aspects of Loyal Tire's services towing the wrecked car. Kwiatkowski complained that Loyal Tire had overcharged for its services and that it had insisted that the family pay cash for its towing services. Kwiatkowski concluded his letter by referencing the municipal law requiring all tows requested by the police department to be performed by a company with a facility within one-half of a mile of the town line.

The town board convened less than one week later, on December 7, 2000, to discuss draft amendments, proposed in mid-November, to the municipal towing law. After one of the board members read Kwiatkowski's letter, the police chief expressed his discontent with the way Loyal Tire conducted business. Several board members also commented negatively on Loyal Tire and the November 2 incident.

Apparently no further public action was taken on the draft amendments to the towing law for a number of months. By letter dated July 3, 2001, Loyal Tire inquired about its status and complained that the police department had exhibited favoritism in its management of the rotating tow list. At a town board meeting on December 17, 2001, several board members stated that complaints had been made against Loyal Tire, but that no complaints had been made against other towers on the town's list. No definitive action was taken, however, with respect to the proposed amendments to the municipal towing law.

At a town board meeting on April 29, 2002, several board members expressed the view that towing permits should be limited to businesses located in Woodbury. After the town attorney expressed uncertainty about the legality of such a policy, Kwiatkowski indicated that business should be kept within the community, and a board member stated that most complaints about tow companies had been directed against towing businesses located in other communities. At a May 13, 2002 meeting, the town attorney informed the board that it could adopt a law requiring that a tow company licensed by the town maintain an impound facility within a given proximity to the town line, but that it could not limit the availability of licenses to those applicants with a tow yard in town. Notwithstanding this advice, the town attorney subsequently drafted legislation requiring, inter alia, that a tower must maintain a facility within a one-mile radius of the Woodbury police station in order to receive a license to be placed on the town's rotating tow list.

A public hearing was held on November 21, 2002, to entertain comments on the proposed amendments to the town towing law. Kwiatkowski commenced the proceeding by commenting that the amendments were in the interest of public safety. Loyal Tire challenged a number of the proposed law's provisions at the meeting, including the provision that would require licensees to maintain an impound facility within a one-mile radius of the police department.² A second public hearing was held on January 16, 2003, at which time the board adopted the proposed amendments, including the "one-mile radius" rule.

Loyal Tire commenced this action in New York Supreme Court, Orange County in June 2003. Loyal Tire's complaint alleged, inter alia, that Woodbury's towing law was preempted by 49 U.S.C. § 14501 and violated its rights to due process and equal protection and the dormant Commerce Clause. Loyal Tire sought damages under 42 U.S.C. § 1983, a declaratory judgment, and injunctive relief. Loyal Tire's complaint alleged also that the town board and Kwiatkowski had conspired to violate its rights under the Constitution and laws of the United States. Woodbury removed the case to federal court in July 2003.

While this litigation was pending, Kwiatkowski informed the town board of several safety-related justifications for the provision of the towing law requiring the maintenance of a tow yard within a one-mile radius of the police department. In a letter dated July 30, 2003, bearing the subject line "Loyal Tire & Auto vs. Town of Woodbury, Defense Issues," he identified two safety concerns: (1) vehicle owners who walk first to the police station to retrieve their cars could then walk in relative safety on sidewalks within the one-mile radius to a tow yard; and (2) using tow companies located outside of Woodbury would require the town to send police officers outside of the jurisdiction and dilute the police presence in Woodbury.

After Loyal...