ROBIN L. ROSENBERG, UNITED STATES DISTRICT JUDGE.
Now before the Court are cross-motions for summary judgment: Defendant's Motion for Summary Judgment, DE 350, and Plaintiffs' Motion for Partial Summary Judgment, DE 333. Plaintiffs have filed a Response in Opposition to Defendant's Motion for Summary Judgment, DE 359, to which Defendant has filed a Reply, DE 369. Defendant has, likewise, filed a Response in Opposition to Plaintiffs' Motion for Partial Summary Judgment, DE 361, to which Plaintiffs have filed a Reply, DE 372. Having considered these filings and the argument heard on December 6, 2016, the Court grants Defendant's Motion for Summary Judgment and denies Plaintiffs' Motion for Partial Summary Judgment.
This suit was filed against Defendant Palm Beach County over its decision to enter into a Temporary Operating Agreement ("TOA") with Raiser, LLC ("Raiser), which is a subsidiary of Uber Technologies, Inc. ("Uber"). DE 1. The TOA was a temporary agreement allowing Raiser to operate in Palm Beach County without complying with the ordinance governing vehicle-for-hire services ("old VFH Ordinance"). Id. Plaintiffs, three vehicle-for-hire ("VFH") companies operating in the County, challenged the TOA under the Equal Protection Clause of the United States Constitution, arguing that the requirements imposed under the TOA were less onerous than those imposed under the old VFH Ordinance. Id. The case is now before the Court on the parties' cross-motions for summary judgment.
"[T]he [C]ourt shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In making this determination, the Court "must view all evidence and make all reasonable inferences in favor of the party opposing summary judgment." Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995) (internal citation omitted). The substance of the relevant law dictates whether a fact is material. Id. And a genuine issue of material fact exists only if a reasonable jury could, in view of the evidence, return a verdict in favor of the nonmoving party. Id. "The principles governing summary judgment do not change when the parties file cross-motions . . . " T-Mobile S. LLC v. City of Jacksonville, Fla., 564 F.Supp.2d 1337, 1340 (M.D. Fla. 2008). When presented with cross-motions, "the [C]ourt must determine whether either of the parties deserves judgment as a matter of law on the undisputed facts." Id.
Defendant makes the threshold argument that Plaintiffs have failed to state
Defendants urge the Court to apply Engquist's reasoning outside of the public employment context and to hold that because Plaintiffs' claim "is premised entirely on the County's discretionary decision on how to enforce its laws," the class of one theory is unavailable. DE 350 at 14. The Court declines to do so. The Court has located only one published decision in which the Eleventh Circuit has applied Engquist's reasoning outside of the public employment context: Douglas Asphalt Co. v. Qore, Inc., 541 F.3d 1269 (11th Cir. 2008).
There is no similarly obvious connection between Engquist and the facts of the instant case. Indeed, as the Supreme Court recognized in Engquist, there is a "crucial difference, with respect to constitutional analysis, between the government exercising the power to regulate or license, as lawmaker, and the government acting as proprietor, to manage its internal operations." Engquist, 553 U.S. at 598, 128 S.Ct. 2146 (citations, quotations and brackets omitted). Here, Defendant — a government entity — was making a decision as to
The Equal Protection Clause provides: "No State shall . . . deny to any person within its jurisdiction the equal protection of the laws." U.S. Const. Amend. XIV, § 1. A class of one equal protection claim does not allege discrimination against a protected class or on the basis that a fundamental right was infringed. See Leib v. Hillsborough Cnty Public Transp. Comm'n, 558 F.3d 1301, 1306 (11th Cir. 2009). To prevail on a class of one equal protection claim, Plaintiffs must show that they were treated differently from other similarly situated individuals absent a rational basis for the differential treatment. Grider v. City of Auburn, Ala., 618 F.3d 1240, 1263-1264 (11th Cir. 2010). Defendant argues that it is entitled to summary judgment both because the parties are not similarly situated and because there was a rational basis for the TOA's enactment. Plaintiffs' cross-motion argues, conversely, that the parties are similarly situated and that there was no rational basis for the TOA's enactment. The Court's holding that Defendant is entitled to summary judgment is grounded solely on the conclusion that Defendant has presented a rational basis for the TOA. The Court need not address whether the parties are similarly situated.
"When legislation classifies persons in such a way that they receive different treatment under the law, the degree of scrutiny the court applies depends on the basis for the classification." Gary v. City of Warner Robins, Ga., 311 F.3d 1334, 1337 (11th Cir. 2002).
The rational-basis standard requires only that the challenged classification be rationally related to some legitimate government purpose. Haves v. City of Miami, 52 F.3d 918, 922 (11th Cir. 1995). The inquiry has two steps. Id. First, the Court must identify a legitimate government purpose that the enacting body could have been pursuing. Id. Second, the Court must question the existence of a rational basis for the belief that the challenged enactment would further that legitimate government purpose. Id. The challenged enactment will fail rational basis review only if the Court cannot identify a
The Court agrees that crafting a framework to capture new technology is a legitimate government purpose. The TOA serves that purpose by accounting for Raiser's digital platform — a feature with which, Defendant argues, the old VFH Ordinance conflicted. The old VFH Ordinance included a "prearrangement requirement" mandating that non-taxi rides be gotten through "a written, e-mail, fax or telephone reservation made at least thirty (30) minutes in advance . . . " DE 351-3, Ex. 1 at 3. Defendant contends that the prearrangement requirement conflicted with Raiser's business model for two reasons. DE 350 at 20. First, because the exclusive use of a digital platform to request a ride is not captured by the phrase "written, e-mail, or telephone reservation." DE 351-3 ¶ 25. And, second, because Raiser's aim — namely, providing rides within "five, ten, or fifteen minutes of when the ride was requested" by matching passengers with the nearest Raiser driver exclusively through its digital platform — would be thwarted were Raiser required to abide the thirty minute advance requirement. Id.
At oral argument, Plaintiffs asserted that the purported conflict between Raiser's digital platform and the old VFH Ordinance was illusory. The old VFH Ordinance provides: "The thirty minute advance requirement does not apply to companies with authorized vehicle for hire contracts with Palm Beach International Airport and other businesses that provide vehicle for hire services by contract." DE 351-3, Ex. 1 at 3. Plaintiffs argue that this language exempted Raiser from the prearrangement requirement because Raiser has written contracts with its customers. Plaintiffs also argue that the use of a digital platform on a cellular telephone was encompassed within the meaning of "telephone reservation."
However, Defendant could, acting rationally, have construed the exemption as inapposite. Specifically, Defendant could have read the exemption from the prearrangement requirement as applying only to companies with authorized vehicle for hire contracts with the Palm Beach International Airport or with businesses similar to the Airport. And Defendant could, acting rationally, have construed the term "telephone reservation" as encompassing telephone calls, but not a digital platform accessed through a smart phone.
Indeed, the content of the TOA and the new VFH ordinance reflect that Defendant adopted both positions. The TOA reads as a stop-gap measure meant to allow Raiser to continue operating while Defendant "review[ed] its VFH regulations as they pertain specifically to TNCs." DE 351-1 at 2. Moreover, unlike the old VFH ordinance, the TOA did not contain any prearrangement requirement. See id. And the definition of "prearranged" under the new VFH Ordinance includes "any reservation made in advance by the person requesting service from any telephone, internet-enabled platform, program, or software, including a smartphone or tablet application or website." DE 181-1 at 90. Moreover, there is
Plaintiffs' primary counterargument is that, because it does not justify the County's decision to exclude other requirements from the TOA (e.g. insurance, background checks, vehicle inspections, etc.), the existence of a rational basis for the prearrangement requirement is insufficient to justify granting summary judgment for Defendant. However, the next rational basis — facilitating competition — accounts for the remaining differences between the old VFH Ordinance and the TOA.
Defendant cites facilitating competition as an additional rational basis for the TOA. The Court agrees that facilitating competition is a legitimate government purpose. See Ill. Transp. Trade Ass'n v. City of Chicago, 839 F.3d 594, 599 (7th Cir. 2016) ("Chicago, . . . , has chosen the side of deregulation, and thus of competition, over preserving the traditional taxicab monopolies. That is a legally permissible choice."). The question, therefore, is whether there was a rational basis for the belief that enacting the TOA would further that legitimate government purpose. Plaintiffs respond that there was not because "[t]he TOA [did] not unlock a previously closed market . . . Instead, it grant[ed] preference to a company that is perfectly capable of operating under current regulation, but is just unwilling to do so." DE 333 at 13. But, to borrow from Judge Posner, Plaintiffs' premise "that every new entrant into a market should be forced to comply with every regulation applicable to incumbents in the market with whom the new entrant will be competing" is incorrect. Ill. Transp., 839 F.3d at 597. The issue is not the existence of different regulatory schemes; rather, it is whether the differences between the regulatory schemes applied to Raiser and Plaintiffs — the TOA and the old VFH Ordinance, respectively — are defensible or arbitrary.
The Court agrees with Defendant that the differences between the two regulatory schemes are defensible. As the discussion below illustrates, the differences between the TOA and the old VFH ordinance are keyed to differences between Raiser and Plaintiffs. The connection between the provisions of the TOA and unique aspects of Raiser's business evidences a connection between Defendant's proffered rational basis — facilitating competition — and the TOA. By accommodating unique aspects of Raiser's business, the TOA promoted competition. In support of its conclusion the Court will now address, in turn, each of the differences between the TOA and the old VFH ordinance for which, Plaintiffs argue, no rational basis exists, showing that each is keyed to a distinction between Plaintiffs' businesses and Raiser's business. See DE 137 at 10-17, ¶¶ (a)-(aa) (outlining the differences).
Plaintiffs object that the TOA, unlike the old VFH ordinance, does not require that Raiser drivers speak and understand English or submit to examinations designed to test their knowledge of English and Palm Beach County geography. DE 137 at 16, ¶¶ (z)-(aa) (citing Palm Beach County Code §§ 19-227(n) and 19-227(o)). But Raiser, unlike Plaintiffs' businesses, operates exclusively through a digital platform. DE 351-1 at 6, ¶ II(K). The digital platform eliminates the need for a demonstrated knowledge of Palm Beach County geography. The origin and destination are pre-programmed into the digital platform, which provides real-time GPS navigation. The digital platform also eliminates the need for discussion. It not only handles navigation, but provides a price estimate
Next, Plaintiffs object that Raiser drivers, unlike Plaintiffs, are not required to wear a collared shirt, long pants or a knee length skirt, and closed shoes. DE 137 at 16, ¶ (y) (citing Palm Beach County Code § 19-227(k)). But, as noted above, Raiser operates exclusively through a digital platform. DE 351-1 at 6, ¶ II(K). That digital platform allows each passenger to rate his or her driver immediately after each ride. DE 351-2 at 3, ¶ 10. It is neither arbitrary nor irrational to conclude that this ratings system would, by enabling the efficient communication of any concerns, render a uniform requirement unnecessary by encouraging professional dress.
Plaintiffs also complain that the TOA does not restrict Raiser drivers from driving for more than twelve hours during any one twenty-four hour period as supported by a vehicle trip manifest. DE 137 at 15, ¶ (x). According to Defendant, the fact that most Raiser drivers work part-time
The old VFH ordinance required Plaintiffs to maintain a commercial business office or residential home office in Palm Beach County. DE 137 at 11, ¶ (g) (citing Palm Beach County Code § 19-218(h)). Plaintiffs object that this same requirement ought to have been imposed on Raiser. The definitions of commercial business office and residential business office, however, illustrate that these locations were intended to serve as dispatch centers. A commercial business office must, among other requirements, have central dispatch
Plaintiffs object that Raiser drivers are not required to obtain VFH driver IDs before operating in Palm Beach County. DE 137 at 10, ¶ (a) (citing Palm Beach County Code § 19-214(a)); DE 137 at 11, ¶ (f) (citing Palm Beach County Code § 19-218(f)). Contained within the ambit of that protestation are more focused complaints about aspects of the VFH driver ID application process to which Raiser drivers are not subjected. See DE 137 at 14, ¶ (q)-(u). For example, applicants for VFH driver IDs are required to submit to photographing. DE 137 at 14, ¶ (t) (citing Palm Beach County Code § 19-227 (a)(17)). And, upon issuance, each VFH driver ID must be placed on "conspicuous display" for public inspection. Id. at 15, ¶ (u) (citing Palm Beach County Code § 19-227(b)). These requirements would be duplicative in light of Raiser's digital platform. As memorialized in the TOA's "Driver/Vehicle Identification Requirement" section, Raiser's digital platform displays for the passenger the "name and photograph" of the Raiser driver with whom he or she has matched, among other information. DE 351-1 at 35, ¶ II(F). In short: A photograph must be submitted for display through the digital platform.
Relatedly, the background and driving checks to which Raiser drivers are subjected are, according to Plaintiffs, less stringent than those built into the process of obtaining a VFH driver ID. The Court will begin with the background check requirements. The old VFH ordinance required each VFH driver to "provide the original request form for his/her Florida Department of Law enforcement criminal history/records report to the Division" along with payment. Palm Beach County Code § 19-227(a)(6). The Division would then "notify each applicant to be fingerprinted that his or her fingerprints will be sent to the State Department of Law Enforcement for a state criminal history record check and to the Federal Bureau of Investigation for a national criminal history record check." Id. The TOA does not provide for a mandatory fingerprint background check run through the Division.
When the issue was raised, Raiser presented evidence that its primarily part time drivers would be unwilling to submit to level II background checks. DE 351-15 at 116: 6-23. A reduction in Raiser's pool of drivers would hinder its ability to compete by increasing wait times and decreasing safety and convenience. Id. From this evidence, one can extrapolate that tailoring the background check requirements in the TOA was a rational step toward the legitimate government purpose of facilitating competition. And there are still meaningful safeguards. The TOA provides: "Raiser shall conduct a local, state and federal criminal background check and obtain and review the criminal history for each potential Raiser partner." DE 351-1 at 4, ¶ II(B). It further instructs that a given individual "shall not be permitted to be a Raiser partner if he or she has committed any of a series of enumerated crimes identical to those screened for under the old VFH ordinance. Id. Raiser coupled its showing that the existing background check requirements would deter drivers with evidence about the safety and effectiveness of its background checks.
The TOA requires that Raiser check the driving histories of its drivers. DE 137 at 4, ¶¶ II(B)-(C). And Raiser does so. But Plaintiffs argue that the driving history check imposed on Raiser drivers is less burdensome. The Code requires each VFH driver to demonstrate eligibility to drive within the county by showing that he or she possesses a valid Florida driver's license. DE 137 at 13, ¶ (p) (citing Palm Beach County Code § 19-227(a)(2)). Each VFH drivers must also show that he or she has possessed a valid driver's license issued by any U.S. state for at least three years, or, if he or she has not, that he or she sign an affidavit attesting that there are no impediments to his or her operating a vehicle within the county. Id. Raiser drivers, on the other hand, are required to have a Florida valid driver's license or to be "otherwise authorized to operate a motor vehicle pursuant to Section 322.031, Florida Statutes." DE 351-1 at 4-5, ¶ II(D). The Code also requires that VFH drivers submit an original form of his or her lifetime state department of highway safety and motor vehicles driving record report secured no more than thirty days before the application's submission. Id. at 14, ¶ (q) (citing Palm Beach County Code § 19-227(a)(3)). Upon initial application, any driver that has resided in Florida for less than five consecutive years must submit a driving history from each previous state where he or she resided going back five years. Id. These specific requirements are not imposed on Raiser. The possibility that Raiser's primarily part time workforce would have been deterred were it required to satisfy these more stringent requirements provides a rational basis for the belief that omitting these requirements would further the legitimate government purpose of facilitating competition.
Plaintiffs also object to several of the insurance requirements under the TOA. First, the TOA reduced the amount of insurance Raiser drivers are required to carry when they are logged into the digital platform, but are neither en route to pick up a passenger nor transporting a passenger.
Relatedly, the old VFH ordinance required each applicant for a VFH driver ID to submit a notarized affidavit signed by each VFH company for which he or she drives, stating that he or she is eligible to be insured. DE 137 at 15, ¶ (v) (citing Palm Beach County Code § 19-227(c)). A separate section required an affidavit attesting that each driver was eligible to be insured by the VFH company's commercial automobile liability insurer and was, in fact, insured. DE 137 at 12, ¶ (h)(citing Palm Beach County Code § 19-218(i)). It was neither arbitrary nor irrational to conclude that the affidavits are duplicative of the requirement that Raiser "shall provide blanket coverage for non-owned vehicles active on the Raiser platform." DE 351-1 at 4, ¶ II(A)(5).
Finally, Plaintiffs object to the vehicle inspection requirements imposed under the TOA. Under the old VFH ordinance, bi-annual inspections are required if a vehicle is over seven years old or has more than 500,000 miles. DE 137 at 12, ¶ (i) (citing Palm Beach County Code § 19-220(a)).
Plaintiffs are required to obtain a vehicle decal under the old VFH ordinance. The TOA does not impose that requirement. Plaintiffs object to this distinction. DE 137 at 11, ¶ (d)(citing Palm Beach County Code § 19-215(a); id. at 12, ¶ (j) (citing Palm Beach County Code § 19-221(a)-(k)). However, the difference goes directly to Raiser's unique business model. Raiser passengers watch their vehicle track toward them once a match is made on a screen that also displays the vehicle's make, model, and license plate number. This eliminates doubt about whether a given vehicle is the one sent to retrieve a certain passenger. And the vehicle's registration with the digital platform eliminates doubt as to whether it is a Raiser partner vehicle operating in accord with the TOA. No visible decal is needed to make that showing.
Additionally, while the old VFH ordinance required Plaintiffs to obtain a business permit, the TOA does not. Plaintiffs object to this distinction in several portions of the Amended Complaint. See DE 137 at 10, ¶ (a)(citing Palm Beach County Code § 19-214(a)); id. at 11, ¶ (f) (citing Palm Beach County Code § 19-218(b)); id. at 11, ¶ (g) (citing Palm Beach County Code § 19-218(h)). Defendant argues that compliance with the TOA is the functional equivalent of obtaining a business permit. Reviewing the components of a business permit application reveals that only those requirements inapplicable in light of Uber's business model are not otherwise addressed by the TOA. The existence of
The analysis above demonstrates that the distinctions between the TOA and the old VFH ordinance were keyed to distinctions between Plaintiffs' businesses and Raiser's business. That correlation provides a rational basis for the belief that enacting the TOA would further the legitimate government purpose of facilitating competition. The existence of that rational basis dissolves Plaintiffs' equal protection claim.
Defendant previously moved for the Court to reconsider its earlier denial of Defendant's Motion to Dismiss. DE 291. The Motion for Reconsideration was grounded, in part, in the Seventh Circuit's decision in Illinois Transportation Trade Association v. City of Chicago, 134 F.Supp.3d 1108, 1110 (N.D. Ill. 2015). Defendant argued that "[b]ecause the Uber business model and technology in Illinois Transportation is virtually identical to the Uber business model and technology in the instant case, a point which Plaintiffs did not and could not dispute," the Court needed to find that "Plaintiffs in the instant case are not, as a matter of law, similarly situated in all relevant respects to Raiser for purposes of establishing an equal protection claim." DE 295 at 4. The Court rejected the position that Plaintiffs and Raiser were not similarly situated as a matter of law and, accordingly, issued the Order Denying Defendant's Motion to Reconsider on November 2, 2016. DE 346. Defendant also argued that the Court should find, in light of the analysis in Illinois Transportation, that a rational basis existed for the TOA. The Court declined to credit that argument, holding that the existence of a rational basis remained a "factual issue which would `be better addressed in a motion for summary judgment . . . '" DE 346 at 6 (quoting DE 136 at 5 n. 2).
However, since the Court issued its Order Denying Defendant's Motion to Reconsider, the legal landscape has evolved. Other federal district courts have cited to Illinois Transportation for the conclusion that the differences between Uber and companies like Plaintiffs provide a rational basis for treating the two differently — a rational basis sufficient to dissolve an equal protection claim. These district courts have dismissed similar cases at the motion to dismiss or judgment on the pleadings stages. See Desoto Cab Co. v. Michael Picker, et al., Case No. 15-cv-04375, 228 F.Supp.3d 950, 959-60, 2017 WL 118810 (N.D. Cal. Jan. 12, 2017) (assuming arguendo at judgment on the pleadings stage that the parties were similarly situated and concluding that a rational basis for differential treatment existed); Boston Taxi Owners Ass'n Inc. v. Governor Charles Baker, et al., Case No. 16-cv-11922, at 13, 2017 WL 354010 (N.D. Mass. Jan. 24, 2017) (assuming arguendo at the motion to dismiss stage that the parties were similarly situated and concluding that a rational basis for differential treatment existed). The Court notes that these cases had not been yet been decided when the Court addressed Defendant's Motion to Reconsider. Rather, the cases noted above were decided only after the motions at the summary judgment stage had been fully
Because Defendant has demonstrated the existence of a rational basis for the TOA, its Motion for Summary Judgment is GRANTED. Plaintiffs' Motion for Partial Summary Judgment is DENIED. The Clerk of Court is directed to CLOSE THIS CASE. All pending motions are DENIED AS MOOT, all hearings CANCELLED, and all deadlines TERMINATED.