United States Court of Appeals
                                                             Fifth Circuit
                                                          F I L E D
                 REVISED AUGUST 10, 2006
                                                           August 9, 2006
             UNITED STATES COURT OF APPEALS
                  For the Fifth Circuit               Charles R. Fulbruge III
                                                              Clerk


                      No.    05-10116




                         VRC LLC,

                                           Plaintiff-Appellant

                            VERSUS


CITY OF DALLAS; DON BEARDEN; MARCUS CURRIE; DOES 1-30,


                                                      Defendants


                     CITY OF DALLAS,

                                            Defendant-Appellee



     Appeal from the United States District Court
          For the Northern District of Texas
                   (3:03-CV-2450-B)



Before KING, BARKSDALE, and DENNIS, Circuit Judges.

DENNIS, Circuit Judge:

    The   plaintiff-appellant,       VRC   LLC,   provides      non-

                              1
consent towing services from private property in Dallas,

Texas.    VRC sued the City of Dallas for declaratory

relief and a permanent injunction preventing enforcement

of a city ordinance regulating such activities.                 The

challenged    ordinance,   Dallas    City   Code   Chapter   48A,

section 48A-36, requires that signs warning of the threat

of towing be posted on private property when, and for

twenty-four hours before, a vehicle is towed without the

vehicle owner’s consent.1 The ordinance contains specific

requirements regarding the content and placement of the

signs.2      The   ordinance   is   penal   in   nature   and   is

punishable by a fine of $200-$500 subject to doubling or

trebling for subsequent offenses. DALLAS, TEX. CITY CODE Ch.

    1
          REQUIREMENTS FOR POSTING SIGNS

    (a) A person commits an offense if he removes or
        causes the removal of a vehicle from private
        property without signs being posted and
        maintained on the private property in
        accordance with this section at the time of
        towing and for at least 24 hours prior to
        the removal of the vehicle.

DALLAS, TEX. CITY CODE Ch. 48A § 48A-36.
    2
       The regulation includes requirements about the
placement, size, color, language, and lettering of the
sign.
                                2
48A § 48A-50.      The City stipulated that the ordinance was

enforced against VRC.

     VRC argues that § 48A-36 is preempted by federal law,

the Interstate Commerce Commission Termination Act of

1995, specifically 49 U.S.C. § 14501(c).                  VRC further

argues that the ordinance is not exempted from preemption

by subsection (c)(2)(A) of that statute.              The statute’s

relevant general preemption rule, 49 U.S.C. § 14501(c),

says:

     (c) Motor carriers of property.--

     (1) General rule.– Except as provided in
     paragraphs (2) and (3), a State, political
     subdivision of a State, or political authority
     of 2 or more States may not enact or enforce a
     law, regulation, or other provision having the
     force and effect of law related to a price,
     route, or service of any motor carrier (other
     than a carrier affiliated with a direct air
     carrier covered by section 41713(b)(4)) or any
     motor private carrier, broker, or freight
     forwarder with respect to the transportation of
     property.

     The parties agreed in the trial court that the city

ordinance is preempted by this general rule, as applied

without      the   safety     regulation      exception     found   in

subsection (c)(2)(A).        On appeal, however, the City seeks

to   raise    an   issue    about   whether    the   city   ordinance
                                    3
relates to a “service of any motor carrier,” such that

the general preemption rule applies.            Of course, the

parties continue to dispute whether the safety regulation

exception in subsection (c)(2)(A) applies to exempt the

ordinance from preemption under the general rule.

     The   safety    regulation     exception   in   subsection

(c)(2)(A) says:

     (2) Matters not covered.– Paragraph (1) . . .

     (A) shall not restrict the safety regulatory
     authority of a State with respect to motor
     vehicles, the authority of a State to impose
     highway route controls or limitations based on
     the size or weight of the motor vehicle, or the
     authority of a State to regulate carriers with
     regard   to   minimum  amounts   of   financial
     responsibility     relating    to     insurance
     requirements and self-insurance authorization.

49 U.S.C. § 14501(c).    The City argues that the ordinance

is   a   safety   regulation   because   it   prevents   violent

confrontations between the owners of cars being towed

from private property and tow truck drivers and because

it cuts down on the number of false reports of stolen

cars, which waste police resources that could be better

spent protecting public safety.          VRC argues that the

regulation is merely an economic regulation dressed up as


                                4
a   safety   regulation   to   avoid   federal   preemption   by

section 14501.

     The preamble to the city ordinance recites a safety

purpose.     Specifically, it provides:

     WHEREAS, the city council finds that the
     proposed    regulations    governing     persons
     performing nonconsensual tows from private
     property, which regulations include, but are not
     limited to, licensing, signage, reporting,
     inspection, vehicle equipment, insurance, and
     rate requirements, are all safety-related or
     otherwise fall within the 49 U.S.C. § 14501(c)
     exception; and

     WHEREAS, the city council believes that the
     proposed safety-related regulations for non-
     consensual tows would promote the public safety
     of both visitors and residents of the city of
     Dallas by contributing to a decrease in the
     potential for confrontation and violence between
     vehicle owners and the persons who tow their
     vehicles; a decrease in bodily injury and
     property damage caused by faulty tow truck
     vehicles and equipment or by incompetent,
     negligent, and criminal actions of tow truck
     operators and drivers; a decrease in the number
     of false auto theft reports processed by the
     police department, thereby allowing the police
     to devote more time to responding to more
     critical public safety situations; and a
     decrease in auto theft incidences and an
     increase in the recovery of stolen autos by
     allowing the police to more quickly and
     efficiently determine when a car has been
     stolen, rather than towed, and take appropriate
     action; . . . .

DALLAS, TEX. ORDINANCE 24175 (Jan. 20, 2000) (preamble).
                                5
       At a trial on the merits, Mr. Don Bearden, the

Interim      Administrator       of       Transportation        Regulation,

testified      about       his   experiences             as     the    City’s

administrator of the ordinance.                 He testified that he

“ha[d] seen some of the aftermath” of confrontations

between vehicle owners and tow truck drivers.                         He also

testified that on one occasion while visiting one of the

towing companies he overheard the drivers talking about

bullet holes in their trucks from where the trucks had

been shot and saw the bullet holes.                     He also testified

that    he   was   aware    of   other       similar      concerns      about

altercations between tow truck drivers and the public and

that    sometimes    his    offices        received      complaints       from

vehicle owners as a tow was ongoing, i.e., while the tow

truck was present and preparing to tow the person’s car.

Mr. Bearden could not, however, produce any documentary

evidence,      reports,     or   studies      of    the       phenomenon    of

vehicle owner/tow truck driver altercations. Counsel for

VRC    asked   Mr.   Bearden     a    series       of    questions      about

whether, given the premise that car owners are likely to

become    irate    about    their     vehicles          being    towed,    the


                                      6
presence of the signs can help defuse the situation.         In

essence, Mr. Bearden, who helped draft the ordinance,

testified that he believed the signs did help reduce the

likelihood of violent altercations.         He testified in

response to a question from VRC’s attorney:

    Citizens have called in and they can be very
    irate and didn’t know why their car was towed or
    anything.   They are basically ready to go out
    and do physical bodily damage to somebody. We
    can point out that the signs are supposed to be
    posted, it would tell them who has got the car.
    And once we got through the process of telling
    them what to look for, where to find the
    information on where the car is, they have
    calmed down quite a bit.

Mr. Bearden also testified that the signs helped tow

truck drivers defuse situations by concretely justifying

the towing company’s actions as being under contract with

the property owner.     Further, Mr. Bearden testified that

in his opinion the signs helped inform the public that

their cars had been towed, not stolen, thereby reducing

the number of false stolen car reports, and thus the

police   department’s    workload   in   responding   to   such

reports.

    Larry White, the manager of VRC, testified that his

company, which has contracts with over 6,000 properties
                              7
in Dallas, incurs an average cost of $11,500 per month

for placing and maintaining the signs as required by

Section 48A-36.          This makes the monthly average cost

about $1.92 per property.         The company would likely incur

at least some of these costs regardless of the statute

because, as Mr. White also testified, it would be in

VRC’s    best     interests    to        post    signs       warning     that

unauthorized      vehicles    would       be    towed,   and       informing

hapless vehicle owners where to retrieve their cars.

       The   district     court     found       that     §    48A-36      was

sufficiently safety-related and filed findings of fact

and conclusions of law in favor of the City of Dallas.

VRC timely appealed.

                         Standard of Review

       Generally, the denial of a permanent injunction is

reviewed for abuse of discretion.                  North Alamo Water

Supply Corp. v. City of San Juan, Tex., 

, 916

(5th    Cir.    1996);   Thomas     v.    Texas    Dept.      of    Criminal

Justice, 

, 396 (5th Cir. 2000).                             In an

express preemption case, however, the court reviews a

district       court’s   preemption       determinations           de   novo.

                                    8
White Buffalo Ventures, LLC v. Univ. of Texas at Austin,

, 370 (5th Cir. 2005); Baker v. Farmers Elec.

Coop.,     Inc.,    

,     278   (5th   Cir.    1994)

(“Preemption is a question of law reviewed de novo.”).

Therefore, the ultimate issue in this case is reviewed de

novo.

                             Discussion

    The party seeking a permanent injunction must meet a

four-part test.          It must establish (1) success on the

merits; (2) that a failure to grant the injunction will

result   in   irreparable        injury;   (3)   that   said   injury

outweighs any damage that the injunction will cause the

opposing party; and (4) that the injunction will not

disserve    the    public   interest.       Dresser-Rand,      Co.   v.

Virtual Automation, Inc., 

, 847-48 (5th Cir.

2004) (citing Amoco Prod. Co. v. Village of Gambell, 

, 546 n.12 (1987)).              In an express preemption

case, however, “the finding with respect to likelihood of

success carries with it a determination that the other

three requirements have been satisfied.”                Trans World

Airlines, Inc. v. Mattox, 

, 783 (5th Cir.

                                   9
1990); see also Greyhound Lines, Inc. v. City of New

Orleans, 

, 341 (E.D. La. 1998).

    An analysis of any claim that federal law preempts

state law starts with the “presumption that Congress does

not intend to supplant state law.”          New York State Conf.

of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,

, 654 (1995).        Whether federal law expressly

preempts a state law is at bottom a question of statutory

intent.     Morales v. Trans World Airlines, 

,

383 (1992).

    The first issue to be addressed is whether the City

of Dallas may argue for the first time on appeal that the

general rule found in 49 U.S.C. § 14501(c) does not apply

to the ordinance at issue because it does not relate to

VRC’s towing services.       The City concedes in its brief

that “the focus in the trial court was on whether Section

48A-36 falls under the safety exception in Paragraph

(2)(a).”     It argues, however, that notwithstanding this

“focus,”    VRC   must   still    first     meet   its   burden   of

persuasion that the sign ordinance is “related to” VRC’s

services.      The   City   points    out   that   the   burden   of

                                 10
persuasion      in   preemption   cases   lies   with   the   party

seeking to nullify the state statute.        AT&T Corp. v. Pub.

Util. Comm’n, 

, 645 (5th Cir. 2004).               VRC

replies that arguments made for the first time on appeal,

and therefore not raised in the district court, are

waived.    See Charter School of Pine Grove, Inc. v. St.

Helena Parish Sch. Bd., 

, 447 (5th Cir. 2005)

(“Ordinarily, arguments not raised in the district court

cannot be asserted for the first time on appeal.”); Kona

Tech. Corp. v. S. Pac. Transp. Co., 

, 604

(5th Cir. 2000).       Nothing in the amended pretrial order

indicated that this issue was in dispute in the trial

court,    and    the   district    court’s   findings    of   fact

specifically state that “[t]he parties have not disputed

that tow trucks are motor carriers or the Dallas City

Code Chapter 48A Section 36 relates to the services

provided by motor carriers.        Therefore, the Ordinance is

preempted by 49 U.S.C. § 14501 unless it falls within the

safety-related exception.”         Given the City’s failure to

bring this issue up before the trial court, we find that

the City has waived this argument.

                                  11
    The second, and major, issue is whether the safety

exception in 49 U.S.C. § 14501(c)(2)(A) applies to exempt

the ordinance from federal preemption.         The City begins

its argument around a fairly recent Supreme Court case,

Ours Garage, which held that States can delegate their

safety     regulatory   authority    with   respect    to     motor

vehicles to their cities or other political subdivisions.

City of Columbus v. Ours Garage & Wrecker Serv., 

, 428 (2002).     In Ours Garage, the Court considered a

different aspect of 49 U.S.C. § 14501(c), but began by

stating that “[p]reemption analysis ‘starts with the

assumption that the historic police powers of the States

were not to be superseded by the Federal Act unless that

was the clear and manifest purpose of Congress.”             

(quoting Medtronic, Inc. v. Lohr, 

, 485

(1996)).    The Court went on to opine on the congressional

purpose for the safety exception, saying, “Congress’

clear purpose in § 14501(c)(2)(A) is to ensure that its

preemption    of   States’   economic   authority     over    motor

carriers of property, § 14501(c)(1), ‘not restrict’ the

preexisting    and   traditional    state   police    power    over

                               12
safety.”      

     The Court also warned that states

and municipalities could not hide economic regulation

under the guise of safety regulation.                   The Court said,

“Local regulation of prices, routes, or services of tow

trucks      that    is   not    genuinely     responsive       to    safety

concerns      garners     no    exemption     from      §   14501(c)(1)’s

preemption rule.” 

             After determining that the

state could validly delegate its regulatory authority,

the Supreme Court remanded for determination of whether

the ordinances at issue in Ours Garage fell within the

safety exception.            

Court expressly

declined to define the parameters of the exception.                    Cole

v. City of Dallas, 

, 732 (5th Cir. 2002)

(citing Ours 

).

      Case law both predating and applying the principles

discussed in Ours Garage has on the whole given a broad

construction to the safety regulation exception.                       Even

the       appellant,     VRC,      implicitly      concedes     this    by

essentially        arguing     for   a    change   in   the   law.      Its


      3
      The Court supported this opinion with legislative
history not cited here.
                                     13
‘Summary of the Argument’ states that “[m]ore recently,

courts have allowed regulations to escape preemption

because the regulations included a recitation that their

purpose is safety.”          VRC argues for an essentially new,

‘workable’ standard wherein the court inquires closely

into the legitimacy of the municipality’s safety concern

and       ensures    that   it   is   not   a   guise    for   economic

regulation.         Such a standard would include a requirement

that there be a close nexus between the safety concern

and the regulation.4

      Following Ours Garage, this court, in Cole, upheld a

city ordinance prohibiting persons convicted of a felony

under       the     Texas   Controlled      Substances    Act,   or   a

comparable law, within the preceding five years from

      4
      VRC’s example case is a district court case which
was overturned on appeal, but some conclusions of which
ultimately were vindicated. See Harris County Wrecker
Owners for Equal Opportunity v. City of Houston, 943 F.
Supp. 711 (S.D. Tex. 1996). VRC admires this opinion
for the depth with which the district court reviewed
the issues. Unfortunately for VRC, that case has been
abrogated. See Stucky v. City of San Antonio, 

(5th Cir. 2001), vacated, 

(2002)
(remanding for further consideration in light of Ours
Garage.) And, as VRC acknowledges, most of the courts
that have addressed the safety exception since then
have done so in a relatively “cursory” manner.
                                      14
obtaining a wrecker driver’s 

.

The Cole court described Congress’ purpose when enacting

49 U.S.C. § 14501(c) as the “slender congressional goal

of addressing economic authority over such carriers” and

“decline[d] to elasticize Congress’s economic goal by

narrowly interpreting safety regulatory authority of a

State with respect to motor vehicles.”                

(internal     quotation     marks       omitted).          The   court

specifically considered the preamble to the ordinance and

did not note that the city had entered any studies or

expert testimony about the dangers of drug users or

felons with wrecker’s licences into evidence.               The court

merely    stated   that   “[i]t    is    difficult    to   imagine    a

regulation    with   a    more    direct    protective      nexus    or

peripheral economic burden.”            

    The Eleventh Circuit has also recently confronted a

nonconsensual towing ordinance, in Miami Beach, which

required towing permits, business applications, written

authorization for towing, and storage within the city

limits.     Galactic Towing, Inc. v. City of Miami Beach,

, 1252 (11th Cir. 2003).                  The Eleventh

                                  15
Circuit also specifically considered the evidence of

legislative intent present in the city’s ordinance and

the testimony of city officials about how the relevant

parts of the ordinance related to the city’s safety

concerns.       The court upheld the ordinance.

       Several    other      courts    have      also   upheld    similar

ordinances against preemption challenges, finding that

the state’s or municipality’s requirements fell within

the safety regulation exception.              See Tillison v. City of

San Diego, 

, 1127 (9th Cir. 2005) (upholding

requirements      of    written   authorization         from     the   real

property     owner      or     lessee      and     presence      of    that

owner/lessee or a representative at the time of the tow);

Tow Operators Working to Protect Their Right to Operate

v. City of Kansas City, 

, 876 (8th Cir. 2003)

(upholding a rotation requirement and a solicitation

ban); Hott v. City of San Jose, 

, 999-

1000    (N.D.    Cal.     2000)   (upholding        a   requirement      of

liability insurance, a criminal background check, display

of certain information, reporting, and record keeping);

Capitol City Towing & Recovery, Inc. v. Louisiana, 873

                                      

, 711-13 (La. Ct. App. 2004) (upholding a

solicitation ban, drivers‘ uniform requirement, storage

facility requirements, and an oil-absorbent materials

requirement).

      In a persuasive opinion, a California appellate court

has also upheld laws establishing licensing, reporting,

record     keeping,   credit       card     acceptance,   and    other

requirements.      California ex rel. Renne v. Servantes, 

, 880-81 (Cal. Ct. App. 2001), cert.

denied, 

(2002).              The Servantes court cited

several previous cases in declaring that the unexpected

loss of the use of a vehicle directly affected the safety

of its operators.      

(citing Berry v. Hannigan,

, 215 (Cal. Ct. App. 1992), and Crane

Towing, Inc. v. Gorton, 

(Wash. 1977)).                  The

court reasoned that the operator of a towed vehicle could

be left stranded and that legislation which assisted

members of the public in avoiding the loss of their

vehicles and reclaiming such vehicles once towed “fairly

and   clearly     promotes   the    safety     and   welfare    of   the

public.”    

ruling most favorable to VRC’s position was

recently issued by the Second Circuit in light of the

Ours Garage decision.             Loyal Tire & Auto Center, Inc. v.

Town of Woodbury, 

(2d Cir. 2006).                   It is,

however, readily distinguishable.               Loyal Tire refines the

Second Circuit’s previous standard in safety exception

cases, which was established in Ace Auto Body & Towing,

Ltd. v. City of New York, 

(2d Cir. 1999).

Ace held that the regulations must be “reasonably related

to the safety aspects of towing disabled vehicles and

that       the    economic      burdens    thereby   imposed   are    only

incidental.”         

    The Loyal Tire court modified

that rule in light of Ours Garage, and the facts before

it,        to    require   in    addition     that   a   regulation     be



       5
      The regulations challenged in Ace, which dealt
with the practice of “wreck chasing,” ranged from
licensing and record keeping to the maintenance of
storage and repair facilities, but the Second Circuit
did not engage in a detailed analysis. In fact, the
court said that “[m]ost of these requirements are so
directly related to safety or financial responsibility
and impose so peripheral and incidental an economic
burden that no detailed analysis is necessary to
conclude that they fall within the § 14501(c)(2)(A)
exemptions.” 

                                      18
“genuinely responsive” to safety concerns.           Loyal 

.        The opinion holds that in making a

determination about whether a regulation is “genuinely

responsive” to safety concerns, the court must “consider

any specific expressions of legislative intent in the

statute itself as well as the legislative history, and

. . . must assess any purported safety justifications

asserted by the state or municipality in light of the

existing record evidence.”       

Tire, there was

significant    record    evidence      and   legislative   history

indicating that the challenged ordinance had been passed

by the Town of Woodbury in order to discriminate against

out of town towing companies, particularly Loyal Tire.

146-47.6        There is no evidence of such a

discriminatory motive in the case at bar.           Moreover, all

of   the   safety   concerns   purportedly     addressed   by   the

     6
      Prior to passage of the ordinance, Loyal Tire had
been involved in a dispute with a town board member’s
family, and the police chief, over services rendered.

In addition, the minutes of town meeting
discussions about passage of the ordinance were
“replete” with complaints about the service provided by
Loyal Tire and other out of town companies, but
contained no discussion of safety concerns. 

                                19
statute challenged in Loyal Tire were documented only

after litigation commenced.          See 

148.        The

ordinance itself contained only a general statement that

towing regulations as a whole are in the interest of

public safety.        

     In contrast, the Dallas

ordinance challenged here contains a contemporaneous and

detailed declaration that the ordinance is responsive to

safety concerns.        DALLAS, TEX. ORDINANCE 24175 (Jan. 20,

2000) (preamble).

       VRC also cites two cases with slightly narrower

interpretations of the safety regulation exception, but

both were decided before Ours Garage and Cole.                   See

Northway Towing, Inc. v. City of Pasadena, 

, 803 (S.D. Tex 2000), abrogated by Stuckey v. City of

San Antonio, 

, 443 (5th Cir. 2001); Whitten

v. Vehicle Removal Corp., 

, 306 (Tex. App.-

Dallas 2001, pet. denied).           In fact, in light of Ours

Garage, the Texas Court of Appeals in Dallas appears to

have withdrawn from its position in Whitten.           See A.J.’s

Wrecker Serv. of Dallas, Inc. v. Salazar,              

,    450   (Tex.   App.–Dallas    2005)   (“In   light   of   the

                                20
Supreme Court's holding in Ours Garage, we conclude this

Court’s narrow reading of the safety exception in Whitten

is not controlling.”).

    On this issue, the weight of the case law supports

the City’s broader interpretation of the safety exception

in the context of 49 U.S.C. § 14501(c).          In addition, the

general rule that federal preemption is to be found only

where congressional intent is clear, particularly where

the traditional police power is at issue, also falls on

the City’s side.7      Beyond these basic legal rules, the

evidence shows that the Dallas City Council considered

the possibility of violent confrontation between unwarned

vehicle owners and tow truck drivers a safety issue and

found   that   a   requirement    that   signs    be   placed   and

maintained would help remedy the problem.              Further, a

city administrator testified from his experience that


    7
      We recognize the wisdom, however, of the
admonition in New Hampshire Motor Transport Ass’n v.
Rowe, 

, 76 (1st Cir. 2006), a Federal
Aviation Administration Authorization Act of 1994 case,
that an exclusion from preemption for all police-power
enactments “would surely ‘swallow the rule of
preemption,’ as most state laws are enacted pursuant to
this authority.”
                                 21
there   was   a   real   problem    with   confrontation   between

citizens and tow truck drivers and that the signs had

been helpful.     Logically, the signs could prevent drivers

from parking where they were at risk of being towed, help

to defuse the anger of some who actually were towed, and

as the city administrator testified and the ordinance

preamble noted, reduce the drain on police resources

caused by false stolen car reports.           Also, while it was

not a focus of the City’s argument, the California court

that decided Servantes had a point about the danger to

stranded motorists.      The nexus between this ordinance and

public safety seems far less attenuated than many of the

ordinances upheld in the cases cited above, particularly

cases   involving    record   keeping,     reporting,   liability

insurance, written authorization, and the presence of

property owners. Further, the economic burden on VRC is

apparently fairly minimal; testimony showed an average

compliance cost of $1.92 per property.          And, as the City

points out, VRC could require that the property owners it

contracts with maintain the signs.          $1.92 per property is

certainly less burdensome than regulations upheld in

                                   22
cases discussed above, for example, maintaining storage

facilities in Miami Beach.

    We   recognize    that       VRC   may   have    a     point   that

municipalities       are     accomplishing          some      economic

regulation, or more precisely consumer protection, while

making findings about safety in the preambles of their

ordinances.   We note, however, that safety and consumer

protection are not mutually exclusive categories.                  And,

more importantly, we reiterate that in this case the

City’s safety concerns are real enough that the court is

convinced   that   they    are    both   reasonably      related    and

genuinely responsive to safety concerns. Accordingly, we

need not inquire further.8

    We conclude that the City ordinance is not preempted

by federal law and, therefore, VRC has not met the

requirements for a permanent injunction.            The judgment of

the district court is AFFIRMED.




    8
      VRC did not make any showing about what illicit
economic regulation was hidden in this safety-related
regulation. This court recognized a similar failing in

.
                                  23