North Carolina Motorcoach v. Guilford Bd. of Educ.

• Decision Date: 27 April 2004
• Docket Number: No. 1:02 CV 227.,1:02 CV 227.
• Parties: NORTH CAROLINA MOTORCOACH ASSOCIATION, on behalf of its members, and McGill, Inc. d/b/a Carolina American Tours, Plaintiffs, v. GUILFORD COUNTY BOARD OF EDUCATION, Defendant.
• Court: U.S. District Court — Middle District of North Carolina

315 F.Supp.2d 784

NORTH CAROLINA MOTORCOACH ASSOCIATION, on behalf of its members, and McGill, Inc. d/b/a Carolina American Tours, Plaintiffs, v. GUILFORD COUNTY BOARD OF EDUCATION, Defendant.

No. 1:02 CV 227.

United States District Court, M.D. North Carolina.

April 27, 2004.

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Tamura D. Coffey, Paul J. Smith, Wilson & Iseman, L.L.P., Winston-Salem, NC, for Plaintiff.

Jill R. Wilson, Clinton R. Pinyan, Brooks Pierce McLendon Humphrey & Leonard, Greensboro, NC, for Defendant.

MEMORANDUM OPINION

BEATY, District Judge.

This action is before the Court on Defendant Guilford County Board of Education's ("Board") Motion to Dismiss and to Strike [Document # 5]. Plaintiffs North Carolina Motorcoach Association ("NCMA") and McGill, Inc. d/b/a Carolina American Tours ("Carolina American") (collectively "Plaintiffs") have alleged various claims under federal and state law. Plaintiffs' federal claims include allegations that Defendant has violated both the Supremacy Clause and the Commerce Clause of the United States Constitution. Plaintiffs' state-law claims include the following: (1) tortious interference with contract, (2) tortious interference with prospective economic advantage, and (3) illegal use of school activity buses in violation of North Carolina General Statutes sections 66-58(c)(9a) and 115C-247. Pursuant to their tortious-interference claims, Plaintiffs seek punitive damages against Defendant. With respect to their claim that Defendant is illegally using school activity buses, the Court notes that Plaintiffs abandoned this claim at the hearing this Court held on March 19, 2004 (hereinafter "Motion Hearing"). Therefore, Plaintiffs' claim alleging illegal use of school activity buses is dismissed with prejudice and will not be discussed further in this Opinion.¹

I. FACTUAL AND PROCEDURAL BACKGROUND

Viewing the allegations in the light most favorable to Plaintiffs, as this Court must do when ruling on a motion to dismiss, Plaintiffs make the following allegations. Plaintiff NCMA, a nonprofit, North Carolina corporation, is a trade association composed of North Carolina motor carriers as well as entities and persons (both in and out of North Carolina) with an interest in tourism. Plaintiff Carolina American, a member of NCMA, is a North Carolina corporation that operates motorcoaches for passenger transportation and other tourism-related activities in North Carolina. Defendant Board is established and operated pursuant to North Carolina General Statutes sections 115C-35 to 115C-50, and is vested with the general control and supervision of the public schools in Guilford County. NCMA has filed this action against Defendant in a representative capacity on behalf of its members who have been or will be harmed by the alleged wrongful conduct of Defendant. Carolina American has filed this action against Defendant in Carolina American's individual capacity.

In June 2000, the Department of Public Instruction, an administrative subdivision of the North Carolina State Board of Education, formed the School Charter Transportation Safety Committee ("Committee"). The Committee's purpose was to study and formulate guidelines and procedures to ensure safe transportation for North Carolina's public school students. The Committee included representatives from the North Carolina Department of Public Instruction, the North Carolina Division of Motor Vehicles, the Federal Motor Carrier Safety Administration, Plaintiff North Carolina Motorcoach Association, and one parent representative. (See Pls.' Br. Opp. Def.'s Mot. Dismiss Ex. A. [Doc. # 9] ("School Charter Transportation Safety Committee Recommended Guidelines & Procedures") (hereinafter "Guidelines") at 2.)²

In June 2001, the Committee issued its "Recommended Guidelines and Procedures" ("Guidelines") to all public schools in North Carolina regarding the hiring and chartering of motorcoaches to transport public school students. The Guidelines consist of a three-step approach for contracting with private motor carriers. The first step is for school systems (e.g., Guilford County Schools)³ to establish a list of approved motor carriers. To determine if a carrier should be placed on the approved list, the Guidelines recommend that the school system conduct detailed background checks of the motor carriers, including the performance of safety inspections, financial inspections, reference checking, and review of the driver qualification files. The second step is for the school chartering the motorcoach to enter into a contract with the motor carrier. The Guidelines provide a list of items that should be included in the contract. The third step under the Guidelines is for a school representative (typically the principal or his designee) to conduct a pretrip review of certain information regarding the motorcoach and its operator.

After the Guidelines were issued, Defendant reviewed the Guidelines and established its own minimum standards for motor carriers who wished to be placed on Defendant's approved list of motor carriers. Defendant incorporated these minimum standards in a "Request for Information" form ("RFI"), which states that "[i]n order to be placed on our list of qualified providers, carriers must submit the required documentation/information ...." (Def.'s Mot. Dismiss & Strike Ex. A. [Doc. # 5] (hereinafter "RFI") at 1.)⁴ According to Plaintiffs, Defendant's requirements as listed in the RFI substantially exceed the Guidelines, the Federal Motor Carrier Safety Regulations ("FMCSR"), and other applicable laws and regulations. Thus, Plaintiffs contend that the RFI is unlawful. In particular, Plaintiffs challenge the following requirements in the RFI: (1) $10,000,000 minimum liability insurance, which exceeds the minimum required by the FMCSR; (2) inspections of the carriers' motorcoaches by Defendant; and (3) review by Defendant of confidential information of the motor carriers' operators. Carolina American also asserts individual harm because it had existing contracts to serve as a motor carrier for designated trips with several public schools in Guilford County. Those schools included Kiser Middle School, Jamestown Middle School, Sternberger Elementary School, Monticello-Brown Summit Elementary School, Stokesdale Elementary School, and Allen Jay Elementary School. Carolina American and other NCMA members refused to comply with the RFI, contending it imposed illegal burdens on motor carriers. Therefore, Carolina American alleges that because it failed to comply with the RFI, Defendant caused Carolina American's contracts with the schools in Guilford County to be cancelled.

On February 25, 2002, Carolina American and NCMA filed their Complaint in the General Court of Justice, Superior Court Division, of Guilford County, North Carolina, asserting claims under both federal and state law. Both Carolina American and NCMA assert federal claims that Defendant's implementation of the RFI violates both the Commerce Clause and the Supremacy Clause of the United States Constitution. Plaintiffs' state-law claims include claims for tortious interference with contract and tortious interference with prospective economic advantage. On March 26, 2002, Defendant removed the action to this Court on the basis of federal-question and supplemental jurisdiction. On April 29, 2002, Defendant filed its Motion to Dismiss and to Strike pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(f). In its Motion pursuant to Rule 12(b)(1), Defendant contends that Plaintiff Carolina American lacks standing to bring its Commerce Clause claim, but Defendant concedes that Plaintiff Carolina American has standing to bring its Supremacy Clause claim and each of its state-law claims. Defendant further contends, however, that Plaintiff NCMA lacks standing to bring any of its claims. In its Motion pursuant to Rule 12(b)(6), Defendant contends that, even if the Court finds that Carolina American has standing to bring its Commerce Clause claim or that NCMA has standing to bring some or all of its claims, all of Plaintiffs' claims against Defendant fail as a matter of law. Finally, with respect to its Motion pursuant to Rule 12(f), Defendant asks this Court to strike Plaintiffs' claims for punitive damages. Because Defendant's Motion pursuant to Rule 12(b)(1) challenges this Court's subject matter jurisdiction over Plaintiffs' claims, the Court will first determine whether Carolina American has standing to pursue its Commerce Clause claim and whether NCMA has standing to pursue any of its claims.

II. MOTION TO DISMISS PURSUANT TO RULE 12(b)(1)

A. Standard of Review

Because Defendant challenges Plaintiffs' standing to even bring their claims in this Court, Defendant is challenging this Court's subject matter jurisdiction over Plaintiffs' claims. The Court notes that there are two ways in which to present a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). The defendant may contend either that the complaint fails to allege facts upon which subject matter jurisdiction can be based, or that the jurisdictional facts alleged in the complaint are untrue. Id. Because, in the instant case, Defendant raises the former argument (i.e., the allegations in the Complaint fail, as a matter of law, to support subject matter jurisdiction), Plaintiffs enjoy procedural safeguards similar to those they would enjoy when opposing a Rule 12(b)(6) motion. See id. As such, the Court will accept Plaintiffs' allegations as true, construing them most favorably to Plaintiffs, and will rely solely on the pleadings, disregarding affidavits or other materials, to determine whether Plaintiffs' Complaint contains sufficient allegations to support subject matter jurisdiction. See id.; Higgins v. United States, 894 F.Supp. 232, 234 (M.D.N.C.1995), aff'd per curiam, No. 95-2741, 1996 WL 160782 (...