KC Taxi Cab Drivers, etc. v. City of Kansas City, Missouri , 742 F.3d 807 ( 2013 )


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  •                  United States Court of Appeals
    For the Eighth Circuit
    ___________________________
    No. 13-1343
    ___________________________
    Kansas City Taxi Cab Drivers Association, LLC; Gammachu Mixicha; Taddessee Erbetto
    lllllllllllllllllllll Plaintiffs - Appellants
    v.
    City of Kansas City, Missouri
    lllllllllllllllllllll Defendant - Appellee
    ____________
    Appeal from United States District Court
    for the Western District of Missouri - Kansas City
    ____________
    Submitted: November 19, 2013
    Filed: December 19, 2013
    ____________
    Before BENTON, BEAM, and SHEPHERD, Circuit Judges.
    ____________
    BENTON, Circuit Judge.
    Ordinance section 76-73 regulates the number of taxicab permits in Kansas
    City, Missouri. Gammachu Mixicha, Taddessee Erbetto, and Kansas City Taxi Cab
    Drivers Association, LLC (“Cab Drivers”) sued the city to overturn the ordinance.
    The district court1 granted summary judgment to the City, finding the ordinance
    constitutional under both the Equal Protection and Due Process clauses. Having
    jurisdiction under 28 U.S.C. § 1291, this court affirms.
    A permit is required for a taxicab to pick up passengers in Kansas City,
    Missouri. City of Kansas City, Mo., Code of Ordinances Sec. 76-70. In 2005, with
    554 outstanding permits, the City enacted section 76-73. It decreases the number of
    permits by attrition. Existing permits may be renewed. Additional permits are not
    issued until the number of permits drops below 500. (The number of permits has
    apparently dropped by seven to 547 between 2005 and the present.) The ordinance
    also establishes a minimum permit requirement for new applicants, who must apply
    for a bundle of at least ten permits. The Cab Drivers argue that these provisions
    entirely exclude entrants from the taxicab market. When the number of permits
    reaches 499, existing permit holders may apply for an additional permit. New
    applicants must wait until the number of permits reaches 490, because they must
    apply for ten permits at a time. The Cab Drivers contend that this disparate treatment
    of new applicants versus existing firms is not rationally related to a legitimate
    government interest. Vacco v. Quill, 
    521 U.S. 793
    , 799 (1997); Lovell v. City of
    Griffin, Ga., 
    303 U.S. 444
    , 450 (1938) (“It is also well settled that municipal
    ordinances adopted under state authority constitute state action . . . .”).
    This court reviews de novo a grant of summary judgment. Wenzel v.
    Missouri-Am. Water Co., 
    404 F.3d 1038
    , 1039 (8th Cir. 2005). “A rational basis that
    survives equal protection scrutiny also satisfies substantive due process analysis.”
    Executive Air Taxi Corp. v. City of Bismark, N.D., 
    518 F.3d 562
    , 569 (8th Cir.
    2008). In areas of economic policy,
    1
    The Honorable Gary A. Fenner, United States District Judge for the Western
    District of Missouri.
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    a statutory classification that neither proceeds along suspect lines nor
    infringes fundamental constitutional rights must be upheld against equal
    protection challenge if there is any reasonably conceivable state of facts
    that could provide a rational basis for the classification. Where there are
    plausible reasons . . . our inquiry is at an end. This standard of review
    is a paradigm of judicial restraint.
    FCC v. Beach Commc’ns, Inc., 
    508 U.S. 307
    , 313-14 (1993) (internal citations and
    quotations omitted). “In short, the judiciary may not sit as a superlegislature to judge
    the wisdom or desirability of legislative policy determinations made in areas that
    neither affect fundamental rights nor proceed along suspect lines . . . .” City of New
    Orleans v. Dukes, 
    427 U.S. 297
    , 303 (1976).
    The City’s stated purpose for the ordinance was insufficient demand for
    taxicabs. The Cab Drivers argue that the renewal provision and minimum-permit
    requirement do not rationally relate to this purpose. However, this court is not bound
    to consider only the stated purpose of a legislature. United States R.R. Ret. Bd. v.
    Fritz, 
    449 U.S. 166
    , 179 (1980); Barket, Levy & Fine, Inc. v. St. Louis Thermal
    Energy Corp., 
    21 F.3d 237
    , 240 (8th Cir. 1994). The district court identified other
    purposes: creating incentives to invest in infrastructure and increasing quality in the
    taxicab industry. The renewal provision and minimum-permit requirement are
    rationally related to these purposes. Existing firms may invest knowing the number
    of permits they will hold in the future. Low-quality single-cab firms are avoided. See
    Greater Houston Small Taxicab Co. Owners Ass’n v. City of Houston, Tex., 
    660 F.3d 235
    , 240 (5th Cir. 2011) (“[T]he larger the taxi company, the more likely it is to
    offer a broader range of services that better serve consumer needs.”).
    While these provisions favor existing firms, they are constitutionally
    permissible. See Minnesota v. Clover Leaf Creamery Co., 
    449 U.S. 456
    , 468 (1981)
    (“The fact that the legislature in effect ‘grandfathered’ paperboard containers, at least
    temporarily, does not make the Act’s ban on plastic nonreturnables arbitrary or
    irrational.”); 
    Dukes, 427 U.S. at 305
    (“It is suggested that the ‘grandfather provision,’
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    allowing the continued operation of some vendors was a totally arbitrary and
    irrational method of achieving the city’s purpose. . . . [T]he city could rationally
    choose initially to eliminate vendors of more recent vintage.”); Red River Serv. Corp.
    v. City of Minot, N.D., 
    146 F.3d 583
    , 591 (8th Cir. 1998) (“The preference created
    for existing customers does no more than recognize and protect their reliance
    interest.”); National Collegiate Athletic Ass’n v. Governor of N.J., 
    730 F.3d 208
    ,
    239-40 (3d Cir. 2013):
    While Appellants contend that Dukes and Clover Leaf Creamery support
    their position because they upheld temporary grandfathering clauses,
    there was no indication in either case that the clauses upheld were
    indeed temporary, that the legislatures were obligated to rescind them
    in the future, or even that the supposedly temporal quality of the laws
    was the basis of the Court’s holdings, other than a statement in passing
    in Dukes that the legislature had chosen to “initially” target only a
    particular class of products.
    While rational basis review is not toothless, Mathews v. Lucas, 
    427 U.S. 495
    ,
    510 (1976), the authority cited by the Cab Drivers is not persuasive. Some cases are
    non-economic in nature. E.g., Romer v. Evans, 
    517 U.S. 620
    , 635 (1996)
    (classification based on sexual orientation); City of Cleburne, Tex. v. Cleburne
    Living Ctr., 
    473 U.S. 432
    , 449-50 (1985) (classification of the mentally
    handicapped); Reed v. Reed, 
    404 U.S. 71
    , 76-77 (1971) (classification based on sex).
    Others involve classifications based on residency or cutoff dates. E.g., Williams v.
    Vermont, 
    472 U.S. 14
    , 27 (1985) (residency classification for motor vehicle use tax);
    Hooper v. Bernalillo Cnty. Assessor, 
    472 U.S. 612
    , 623 (1985) (residency
    requirements for veteran tax exemption); Delaware River Basin Comm’n v. Bucks
    Cnty. Water & Sewer Auth., 
    641 F.2d 1087
    , 1090 (3d Cir. 1981) (classification based
    on date of interstate compact), limited by National Collegiate Athletic 
    Ass’n, 730 F.3d at 240
    n.18 (“Nor does our decision in Delaware River Basin Commission . . .
    support the notion that permanent grandfathering clauses are invalid . . . .”).
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    The Cab Drivers cite Craigmiles v. Giles, 
    312 F.3d 220
    (6th Cir. 2002). The
    court there struck down a statute requiring certification as a funeral director in order
    to sell caskets. This “naked attempt to raise a fortress protecting the monopoly rents
    that funeral directors extract from consumers” failed to satisfy even the “slight review
    required by rational basis review.” 
    Id. at 229.
    However, in the context of taxicab
    regulation, the Fifth Circuit stated:
    Moreover, even if the City is motivated in part by economic
    protectionism, there is no real dispute that promoting full-service taxi
    operations is a legitimate government purpose under the rational basis
    test. Craigmiles and other cases confirm that naked economic
    preferences are impermissible to the extent that they harm consumers.
    The record here provides no reason to believe that consumers will suffer
    harm under the Ordinance.
    Greater Houston Small Taxicab 
    Co., 660 F.3d at 240
    . See also St. Joseph Abbey
    v. Castille, 
    712 F.3d 215
    , 222-23 (5th Cir. 2013) (affirming Greater Houston Small
    Taxicab Co. as to taxicabs, while following Craigmiles as to casket sales); Powers
    v. Harris, 
    379 F.3d 1208
    , 1223 (10th Cir. 2004) (refusing to apply Craigmiles to “a
    nearly identical” regulation of casket sales).
    “[I]n the local economic sphere, it is only the invidious discrimination, the
    wholly arbitrary act, which cannot stand consistently with the Fourteenth
    Amendment.” 
    Dukes, 427 U.S. at 303-04
    . Section 76-73 is neither wholly arbitrary
    nor invidious. It is rationally related to a number of legitimate government purposes.
    The Cab Drivers bear the burden of negating “‘every conceivable basis which might
    support’ the classification at issue.” 
    Barket, 21 F.3d at 240
    (quoting 
    FCC, 508 U.S. at 315
    ). They have not met this burden.
    *******
    The judgment of the district court is affirmed.
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