California Tow Truck Ass'n v. City & County of San Francisco

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CALIFORNIA TOW TRUCK No. 13-15614
ASSOCIATION,
Plaintiff-Appellant, D.C. No.
3:10-cv-03184-
v. CRB
CITY AND COUNTY OF SAN
FRANCISCO, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, Senior District Judge, Presiding
Argued and Submitted
February 11, 2015—San Francisco California
Filed August 13, 2015
Before: Michael Daly Hawkins, Richard A. Paez,
and Marsha S. Berzon, Circuit Judges.
Opinion by Judge Berzon
2 CTTA V. CITY & CTY. OF SAN FRANCISCO
SUMMARY*
Federal Aviation Administration Authorization Act /
Preemption
The panel affirmed in part and reversed in part the district
court’s summary judgment, which followed this court’s
earlier decision vacating the district court’s partial summary
judgment and remanding, in an action challenging San
Francisco ordinances that comprehensively regulate the
towing industry within the city and provide a number of
conditions and requirements concerning towing permits.
Tow car firms are “motor carriers” under the Federal
Aviation Administration Authorization Act, and the San
Francisco ordinances, known as the “Permit Scheme,”
generally relate to a price, route, or service of a motor carrier.
The panel held, therefore, that Permit Scheme provisions
were preempted by the FAAAA unless they fell within the
FAAAA’s savings clauses, which included a “safety
exception.”
Agreeing with the Second Circuit, the panel held that the
safety exception covered regulations related both to the safety
of the tow trucks themselves and to the safety of the people
whose vehicles are towed. The panel held that Permit
Scheme’s permit requirements fell within the safety
exception, as did multiple other Permit Scheme provisions,
including permit application requirements, permit fee and
penalty provisions, and recordkeeping and brochure
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
CTTA V. CITY & CTY. OF SAN FRANCISCO 3
requirements. The panel also held that possession and display
requirements were not subject to preemption. Finally, the
panel held that the Permit Scheme’s complaint system
requirement fell within the safety exception, but its business
plan requirement did not and therefore was preempted. The
panel remanded the case to the district court for further
proceedings.
COUNSEL
Patrick J. Whalen, The Law Offices of Brooks Ellison,
Sacramento, California, for Plaintiff-Appellant.
Wayne Snodgrass (argued), Deputy City Attorney; Dennis J.
Herrera, City Attorney; Vince Chhabria, Deputy City
Attorney, San Francisco, California, for Defendant-Appellee.
OPINION
BERZON, Circuit Judge:
The City and County of San Francisco requires tow truck
drivers and towing firms to obtain permits to operate and
conduct business within San Francisco. The City enacted two
ordinances, Articles 30 and 30.1 of the San Francisco Police
Code (the “Permit Scheme”), which comprehensively
regulate the towing industry within the city and provide a
number of conditions and requirements concerning the
towing permits.
The California Tow Truck Association (“CTTA”)
challenged the Permit Scheme, contending that it is
4 CTTA V. CITY & CTY. OF SAN FRANCISCO
preempted by the Federal Aviation Administration
Authorization Act of 1994, 49 U.S.C. § 14501 (“FAAAA” or
the “Act”). After the district court initially granted partial
summary judgment, the parties appealed to this court. See
Cal. Tow Truck Ass’n v. City & Cnty. of S.F., 693 F.3d 847(9th Cir. 2012) (“CTTA I”). We held that the district court
did not analyze the Permit Scheme as required by our
precedent, and so vacated the judgment and remanded for the
required provision-by-provision analysis. See id. at 866.
Following remand, the district court upheld nearly all of
the Permit Scheme, holding some provisions outside the
ambit of the Act’s express preemption clause, 49 U.S.C.
§ 14501(c)(1), and others covered by the Act’s savings
clauses, id. § 14501(c)(2)(A)–(C). In particular, the district
court determined that many of the provisions fell within the
FAAAA’s “safety exception,” id. § 14501(c)(2)(A), because
they are “genuinely responsive to safety concerns.” City of
Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S.
424, 442 (2002). The district court thus granted the City’s
cross-motion for summary judgment, from which CTTA
appeals. With the exception of the challenge to the Permit
Scheme’s business plan requirement, we affirm.
I.
A.
Pursuant to its authority under California law, see Cal.
Veh. Code § 21100(g)(1), the City enacted the Permit
Scheme. Article 30 of the Permit Scheme regulates “tow car
drivers,” S.F. Police Code § 3000 et. seq., and Article 30.1
CTTA V. CITY & CTY. OF SAN FRANCISCO 5
regulates “tow car firms,” id. § 3050 et seq.1 “Together,
Articles 30 and 30.1 set forth a comprehensive regulatory
regime requiring tow truck drivers and towing firms to obtain
permits to operate and conduct business in San Francisco.”
CTTA I, 693 F.3d at 851.
Article 30 provides that “[n]o person shall drive or
operate a tow car within the City . . . without first obtaining
a permit from the Chief of Police . . . .” S.F. Police Code
§ 3000. To obtain a permit, tow car drivers must submit
identifying information, and disclose any criminal arrest
history. See id. § 3002. Along with the application,
applicants must submit fingerprints, passport-size
photographs, a letter from an employer, and a filing fee. Id.
§ 3003. After receiving an application for a permit, “[t]he
Chief of Police shall . . . make an investigation without
unnecessary delay . . . and grant such application,” unless the
applicant was convicted of violating, or acted in violation of,
certain enumerated criminal statutes, or falsified information
on the application. Id. § 3004.
The tow car driver must keep the permit, which contains
the names and residences of the driver and employer and
1
The Permit Scheme adopts the California Vehicle Code’s definition of
tow car: “[A] motor vehicle which has been altered or designed and
equipped for, and primarily used in the business of, transporting vehicles
by means of a crane, hoist, tow bar, tow line, or dolly or is otherwise
primarily used to render assistance to other vehicles.” Cal. Veh. Code
§ 615(a); see S.F. Police Code § 3001.
A “tow car firm” is defined as “[a]ny person, firm, partnership,
association, corporation, or any other group . . . engaged in the business
of transporting, removing, or storage of motor vehicles, including the
owner/operator of any tow car as herein defined.” Id. § 3051.
6 CTTA V. CITY & CTY. OF SAN FRANCISCO
other identifying information, in “his immediate possession
at all times while driving or operating a tow car and shall
exhibit such permit on demand of any peace officer.” Id.
§§ 3006, 3007. The permits last for one year, are renewable
upon payment of the annual license fee, id. § 3008, and can
be revoked after a hearing if the Chief of Police “finds that
grounds exist which would have constituted just cause for
refusal to issue such permit,” id. § 3011. Driving or operating
a tow car within the City without a permit, or not maintaining
possession of a permit while driving or operating a tow car,
is a misdemeanor. Id. § 3012.
The Permit Scheme’s requirements for tow car firms are
similar to those for tow car drivers. As with tow car drivers,
“[n]o person shall engage in or conduct business as a tow car
firm within the City . . . without first obtaining a permit from
the Chief of Police . . . .” Id. § 3050. Applicants for such
permits must provide not only identifying information about
themselves and their business, id. § 3052(1)–(2), but also
additional information, including: details of “every tow car
that will be operated by the tow car firm,” id. § 3052(3); “[a]
description of the applicant’s business plan, and proposed
services to be provided, including . . . a system for handling
complaints that is acceptable to the Chief of Police,” id.
§ 3052(4); the name and permit number of all tow car
operators employed by the firm, id. § 3052(5); evidence of a
minimum level of insurance, id. § 3052(6); and a “record of
all crimes of which the applicant has been convicted,
plead[ed] guilty, or plead[ed] no contest,” id. § 3052(7). Like
tow car driver applicants, tow car firm applicants must submit
fingerprints, photographs, and a filing fee. Id. § 3053.
A tow car firm permit shall be granted unless the Police
Department finds that the applicant, among other things, does
CTTA V. CITY & CTY. OF SAN FRANCISCO 7
not possess a minimum level of insurance, does not possess
requisite tow car equipment, or has been convicted of certain
crimes. Id. § 3054. Every firm issued a permit must display
the permit “in a conspicuous place within the tow car firm
business address, so that the [permit] may be readily seen by
persons entering the premises.” Id. § 3055. The Police
Department may suspend or revoke a tow car firm permit for
any of the grounds listed in § 3054, as well as for additional
reasons, including failing to maintain required levels of
insurance and employing a tow car operator who lacks a valid
operating permit. Id. § 3056.
Like the individual tow car driver permits, a tow car firm
permit lasts for a year and is renewable upon payment of an
annual license fee. Id. § 3062. Article 30.1, however,
contains some additional requirements for tow car firm
permit-holders. For example, tow car firms are required
regularly to submit proof of insurance and evidence of
registration, and must notify the Police Department of the
number of tow vehicles or changes in tow car drivers’
employment status. Id. § 3058. Additionally, “[t]ow car firm
vehicles may be inspected for code and safety violations by
any peace officer.” Id. § 3059. Tow car firms are also
required to maintain records of each vehicle towed for three
years and to make such records available for inspection by
any peace officer. Id. § 3060. Conducting business without
a tow car firm permit or failing to display the permit at the
tow car firm business is a misdemeanor. Id. § 3064.
The San Francisco Board of Supervisors amended Article
30.1 in 2009 to include a brochure requirement. See id.
§ 3055.2(c). When a vehicle has been towed, tow car firms
must “provide information to towed-vehicle owners by
displaying and making available a brochure ‘in a conspicuous
8 CTTA V. CITY & CTY. OF SAN FRANCISCO
place in the location where a vehicle owner must come to
reclaim their towed vehicle.’” CTTA I, 693 F.3d at 854
(quoting S.F. Police Code § 3055.2(c)). The brochure,
developed by the City’s police department, consists of “a
concise summary of California law, including the maximum
rate that can be legally charged for a private property tow and
the rights and responsibilities of all parties who participate in
towing from private property . . . .” S.F. Police Code
§ 3055.2(b). Non-compliance with this requirement triggers
an administrative penalty of $500. Id. § 3055.2(f).
When it promulgated the brochure requirement in 2009,
the Board of Supervisors made a number of legislative
findings, including:
(i) that there are frequent incidents of illegal
towing from private property in San
Francisco; and
(ii) that there is a significant risk to the safety
of residents and visitors when illegal towing
from private property occurs at night; and
(iii) that there is a risk to public health and
safety when the vehicles of senior citizens and
persons with disabilities are illegally towed
from private property; and
(iv) that illegal towing from private property
affects vulnerable populations when people of
limited economic means are required to pay
hundreds of dollars to recover their vehicle, or
are subjected to deficiency claims by
collection agencies if they could not afford to
CTTA V. CITY & CTY. OF SAN FRANCISCO 9
pick up their vehicle even though the vehicle
was illegally towed; and . . .
(ix) that consistent adherence to legal towing
practices will substantially increase the
quality of life for residents and the experience
of visitors to San Francisco.
S.F. Police Code § 3055.2(a). Both Articles 30 and 30.1
include severability clauses, providing that if any part is “held
to be unconstitutional or invalid,” such a decision “shall not
affect the validity or effectiveness of the remaining portions.”
Id. §§ 3013, 3065.
B.
In July 2010, CTTA, a nonprofit organization
representing more than 1,000 towing companies doing
business in California, filed a complaint against the City in
San Francisco Superior Court. According to CTTA, its
members had been “harassed and subject to citations, fines,
and in some cases the impound of their tow truck . . . for
failing to obtain a permit.” Moreover, it alleged, “[t]he
ability of CTTA members to conduct their business is
adversely affected by the San Francisco ordinance, because
it subjects them to great uncertainty as to whether they are
able to conduct business in, around, and through the City.”
Several owners and operators of tow car firms also declared
that the Permit Scheme has impacted their routes and
services, and caused them to incur significant costs.
In its action, CTTA sought, among other things, a
declaration that the Permit Scheme is preempted by federal
law and an injunction prohibiting the City from enforcing its
10 CTTA V. CITY & CTY. OF SAN FRANCISCO
provisions. After the City removed the case to federal court,
the parties filed cross-motions for summary judgment. As
relevant here, CTTA argued that the Permit Scheme is
preempted by the FAAAA’s express preemption clause,
which provides: “[A] State . . . 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
. . . with respect to the transportation of property.” 49 U.S.C.
§ 14501(c)(1).
Conceding that the Permit Scheme “relate[s] to” the
“price” and “service” of a towing company, and hence of a
“motor carrier,” the City argued that the Permit Scheme is not
preempted because it falls within the Act’s savings clauses —
in particular, the Act’s “safety exception.” The safety
exception provides that the Act’s express preemption clause
“shall not restrict the safety regulatory authority of a State
with respect to motor vehicles.” 49 U.S.C. § 14501(c)(2)(A).
The City emphasized that the regulations were motivated by
safety concerns, pointing in particular to a declaration by
Sergeant William Coggan, the Commanding Officer of the
San Francisco Police Department’s Permit Section. Coggan
explained that “corruption and criminal activity pervade the
[towing] industry,” leading to “[i]mproper conduct” such as
“towing vehicles illegally; overcharging people whose
vehicles are towed; outright stealing towed vehicles;
operating tow trucks in an unsafe manner on the road;
stealing merchandise from towed vehicles; and causing
damages to towed vehicles.” Further, Coggan stated that he
was “aware of instances in which tow operators or their
employees have physically or sexually assaulted persons
whose cars had been towed.” “[T]he towing business,”
Coggan declared, “by its nature, presents certain dangers to
the public,” as “when a person discovers that her car has been
CTTA V. CITY & CTY. OF SAN FRANCISCO 11
towed, she is sometimes left stranded in a dangerous
location.”
The district court initially held that the Permit Scheme
was preempted to the extent it applied to companies and
drivers that engage solely in “consensual” tows, as well as to
those merely “passing through” San Francisco. CTTA I,
693 F.3d at 856–57.2 But it also held that the Permit Scheme
was not preempted as applied to companies and drivers that
engage in “nonconsensual tows” in the City. Id. The district
court entered judgment for the City on CTTA’s other federal
claims, and remanded CTTA’s state claims to state court.3
Both parties appealed on the FAAAA preemption
question. We concluded that the district court erred in
analyzing the Permit Scheme “without specifically addressing
its individual provisions,” rather than “on a provision-
by-provision basis.” CTTA I, 693 F.3d at 850, 860. The
district court, we noted, need not “analyze every sentence of
2
Consensual towing involves “an agreement between the car owner and
the tow truck driver,” while “[n]on-consensual towing involves towing,
often from private lots, improperly or ‘illegally’ parked cars.” CTTA I,
693 F.3d at 857. “In non-consensual tows the car owner typically does not
know that his car has been towed until he comes to retrieve it and it is not
there.” Id.
3
After the San Francisco Superior Court granted judgment for the City
on its state preemption claims, CTTA appealed. The Court of Appeal
reversed, noting that, under California law, a local authority may “only
license and regulate tow truck services and drivers having their ‘principal
place of business or employment’ within the jurisdiction of the local
authority.” Cal. Tow Truck Ass’n v. City & Cnty. of S.F., 225 Cal. App.
4th 846, 858 (2014). It thus held the City’s regulation of towing services
and drivers whose “principal place of business or employment is located
in another jurisdiction” preempted by state law. Id.12 CTTA V. CITY & CTY. OF SAN FRANCISCO
the Permit Scheme, line by line.” Id. at 863. But “where a
multi-faceted law or regulation is challenged as a whole,” we
explained, “it is still necessary to analyze each of its essential
or major component parts.” Id. at 860. Although the district
court applied the correct test in determining whether the
Permit Scheme was preempted, id. at 861–62, it did not
“analyze the major provisions identified . . . and address
whether the Permit System can survive, after severing
provisions, if any, that are pre-empted,” id. at 863. We thus
vacated and remanded to the district court to conduct the
FAAAA preemption analysis “in the first instance.” Id.4
After remand, the parties again filed cross-motions for
summary judgment. The district court then granted summary
judgment to the City as to all but one of the challenged
provisions of the Permit Scheme, holding that a majority of
the Permit Scheme’s provisions were exempted from
preemption by the Act’s safety, insurance, and price
exceptions.5 In so holding, it rejected CTTA’s “narrow”
definition of “motor vehicle safety,” noting that “the Ninth
Circuit has endorsed a concept of motor vehicle safety that
encompasses but surely goes well beyond the safe
4
CTTA I also held that, as the “undisputed evidence” established that the
City does not require tow truck drivers and tow firms to obtain a permit
just to pass through, CTTA could not show “a realistic danger of
enforcement,” and thus lacked standing. 693 F.3d at 865–66. As a result,
the district court lacked jurisdiction to enjoin the City from enforcing the
Permit Scheme against “tow trucks merely passing through San
Francisco.” Id.
5
The district court concluded that section 3056(2), which authorizes the
Chief of Police to revoke the permit of any tow firm that imposes charges
“in excess of the maximum rate established by the [City] for its contracted
tow car firms,” was preempted. The City does not appeal this holding.
CTTA V. CITY & CTY. OF SAN FRANCISCO 13
performance of towing services.” The district court also
determined that several challenged provisions — the permit
display requirement (sections 3007 and 3055) and the
business plan requirement (section 3052(4)) — were not
subject to the FAAAA’s express preemption clause at all.
CTTA appeals from that judgment.
II.
A.
“The principal purpose of the FAAAA was ‘to prevent
States from undermining federal deregulation of interstate
trucking’ through a ‘patchwork’ of state regulations.” Dilts
v. Penske Logistics, LLC, 769 F.3d 637, 644 (9th Cir. 2014)
(quoting Am. Trucking Ass’ns v. City of L.A., 660 F.3d 384,
395–96 (9th Cir. 2011), rev’d in part, 133 S.Ct. 2096 (2013)).
Toward that end, the FAAAA contains an express preemption
clause, which provides:
Except as provided in [the savings clauses in]
paragraphs (2) and (3), a State [or] political
subdivision of a State . . . 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
....
49 U.S.C. § 14501(c)(1). The parties agree that tow car firms
are “motor carriers” under the statute, and that the Permit
Scheme generally “relate[s] to a price, route, or service” of a
motor carrier. See CTTA I, 693 F.3d at 857. Accordingly, at
least some of the Permit Scheme’s provisions are preempted
14 CTTA V. CITY & CTY. OF SAN FRANCISCO
unless they fall within the FAAAA’s savings clauses, 49
U.S.C. § 14501(c)(2)–(3).
Three of those clauses are at issue here. See CTTA I,
693 F.3d at 857–58. The “safety exception” provides that the
FAAAA “shall not restrict the safety regulatory authority of
a State with respect to motor vehicles.” 49 U.S.C.
§ 14501(c)(2)(A). The “insurance exception” saves from
preemption state laws “relating to insurance requirements and
self-insurance authorization.” Id. Finally, the “price
exception” permits “a State or a political subdivision of a
State to enact or enforce a law . . . relating to the price of
for-hire motor vehicle transportation by a tow truck, if such
transportation is performed without the prior consent or
authorization of the owner or operator of the motor vehicle”
— i.e., is a nonconsensual tow. Id. § 14501(c)(2)(C). As the
district court observed, “[t]he motor vehicle safety exception
is the main, though not exclusive, focus of the parties’
dispute.”
Importantly, “[p]reemption analysis ‘start[s] 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.’” Ours Garage,
536 U.S. at 438 (second alteration in original) (quoting
Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)).
Furthermore, the Act “does not pre-empt state laws that affect
rates, routes, or services in too tenuous, remote, or peripheral
a manner.” Rowe v. N.H. Motor Transp. Ass’n, 552 U.S. 364,
375 (2008) (internal quotation marks omitted).
CTTA V. CITY & CTY. OF SAN FRANCISCO 15
B.
Ours Garage held that the FAAAA’s safety exception can
apply to ordinances enacted by municipalities, even though
§ 14501(c)(2)(A) refers only to “the safety regulatory
authority of a State.” 536 U.S. at 428. That is so, Ours
Garage explained, because “Congress’ clear purpose in
§ 14501(c)(2)(A) is to ensure that its preemption of States’
economic authority over motor carriers of property . . . ‘not
restrict’ the preexisting and traditional state police power
over safety[,] . . . includ[ing] the choice to delegate the
State’s ‘safety regulatory authority’ to localities.” Id. at 439.
“At the same time, however, Ours Garage also warned that
states and municipalities could not hide economic regulation
under the guise of safety regulation.” CTTA I, 693 F.3d at
858 (internal citation and quotation marks omitted).
Ours Garage went on to direct a basic framework for
applying the FAAAA’s safety exception: A state law is saved
from preemption only if it is “genuinely responsive to safety
concerns.” 536 U.S. at 442. We have given that approach
shape by fashioning “a two-part inquiry”:
The first step examines any “expressions of
legislative intent,” including (1) the particular
language of the statute or regulation being
challenged, and any explicit statutory or
regulatory findings in the provision; and
(2) available legislative or regulatory
history. . . . Once a safety motivation is
identified, the second step looks to “the
existing record evidence” to determine
whether there is a “logical” or “genuine”
connection between the regulation and the
16 CTTA V. CITY & CTY. OF SAN FRANCISCO
safety justification, or, instead, whether the
purported safety justification is a pretext for
undue economic regulation. The more
attenuated or speculative the connection, the
more likely it will be that a court will find the
purported safety motives “illusory or
pretextual” and that the safety justification
will not withstand scrutiny.
CTTA I, 693 F.3d at 860.
CTTA I also articulated some more specific guidelines
concerning the FAAAA’s safety exception “applicable to the
district court’s preemption analysis on remand.” Id. at 863.
First, while the initial step of the safety-exception test
“addresses whatever traditional sources of legislative intent
are available,” it “also allows for the situation where history
is lacking — especially at a local level where committee
reports or municipal statements might not be published.” Id.
at 864. “[M]erely because a safety rationale is not
documented does not necessarily mean the safety exception
cannot apply,” CTTA I explained, as “[s]ometimes a safety
justification is so obvious that it need not be stated — intent
can be obvious from the subject of the regulation itself, as
well as from the surrounding circumstances.” Id. (citing
Tillison v. Gregoire, 424 F.3d 1093, 1102–03 (9th Cir.
2005)).
Next, CTTA I described how to assess legislative intent
when regulators had “mixed motives” — for example, where
a regulation was motivated by safety concerns and economic
concerns. We observed that “‘[t]he presence of such mixed
motives . . . does not preclude the application of the safety
exception, provided that the State’s safety motives are not
CTTA V. CITY & CTY. OF SAN FRANCISCO 17
pre-textual.’” Id. at 860 (alteration in original) (quoting Am.
Trucking, 660 F.3d at 405). Determining whether an asserted
safety motive is not pretextual “is equivalent to asking
whether a law is ‘genuinely responsive’ to safety concerns”
— in other words, whether the challenged provision has a
“logical connection” to motor vehicle safety. CTTA I,
693 F.3d at 860.
Finally, we reiterated in CTTA I that proper analysis of an
FAAAA preemption challenge to a comprehensive regulation
must be conducted on a “provision-by-provision basis.” Id.
“‘Were it otherwise, a single valid excepted provision would
allow a vast amount of nonexcepted provisions to stand.’” Id.
(quoting Am. Trucking Ass’ns, Inc. v. City of L.A., 559 F.3d
1046, 1055 (9th Cir. 2009)). “Similarly, the mere fact that
one part of the regulatory scheme is preempted does not mean
that other parts of the scheme are preempted, or that the
scheme as a whole is preempted.” Id.III.
Before applying the above principles to San Francisco’s
Permit Scheme, we consider a threshold dispute between the
parties over the proper scope of the FAAAA’s safety
exception.
CTTA argues that an appropriately circumscribed
understanding of the Act’s safety exception covers only
regulations related to the “motor vehicle safety” of the tow
trucks themselves — for example, “the manner in which tow
trucks operate, the way they are driven on the roadways, and
the manner in which they transport motor vehicles” — and
not the safety of the people whose vehicles are towed.
Conversely, the City contends that CTTA “assumes an
18 CTTA V. CITY & CTY. OF SAN FRANCISCO
artificially narrow definition of the term ‘safety,’” and that,
properly understood, the safety exception covers
“regulation[s] seek[ing] to prevent or mitigate the danger a
person experiences when her motor vehicle is being or has
been towed by another motor vehicle.” The City is correct.
The very language of the safety exception demonstrates
that CTTA’s understanding of the FAAAA’s safety concept
is unduly narrow. Section 14501(c)(2) provides that the
FAAAA “shall not restrict the safety regulatory authority of
a State with respect to motor vehicles.” 49 U.S.C.
§ 14501(c)(2)(A) (emphases added). The safety exception
nowhere mentions “motor vehicle safety,” the talismanic
phrase to which CTTA repeatedly refers.6 Rather, it
expressly states that the FAAAA shall not restrict the State’s
general “safety regulatory authority,” not just its regulatory
authority regarding the safe operation of the regulated motor
vehicles.
Nor does the language of the exception limit the “motor
vehicles” covered by the exemption to the regulated vehicles
covered by the FAAAA as a whole. Indeed, the FAAAA
specifically defines “motor vehicle” for purposes of this part
of the statute as:
a vehicle, machine, tractor, trailer, or
semitrailer propelled or drawn by mechanical
power and used on a highway in
transportation, or a combination determined
6
We acknowledge that courts have occasionally referred to “motor
vehicle safety” when applying the safety exception. See, e.g., Rowe,
552 U.S. at 374; CTTA I, 693 F.3d at 860, 862. But, as noted, the relevant
statutory language contains no such phrase.
CTTA V. CITY & CTY. OF SAN FRANCISCO 19
by the Secretary, but does not include a
vehicle, locomotive, or car operated only on a
rail, or a trolley bus operated by electric
power from a fixed overhead wire, and
providing local passenger transportation
similar to street-railway service.
49 U.S.C. § 13102(16). “[T]he ‘cardinal canon’ of statutory
construction” is that “Congress ‘says in a statute what it
means and means in a statute what it says there.’” Planned
Parenthood Ariz. Inc. v. Betlach, 727 F.3d 960, 968 (9th Cir.
2013) (quoting Conn. Nat’l Bank v. Germain, 503 U.S. 249,
253–54 (1992)). Congress chose to fashion the FAAAA’s
safety exception to encompass the State’s safety regulatory
authority with respect to the broader category of “motor
vehicles,” generally, instead of the more limited set of
vehicles denoted by the term “[m]otor carriers of property.”
49 U.S.C. § 14501(c). Accordingly, as tow trucks are
engaged in towing other motor vehicles, the exception in
terms extends to “safety regulatory authority” concerning the
vehicles towed.
Furthermore, “[t]he phrase ‘with respect to’ is generally
understood to be synonymous with the phrase[] ‘relating to.’”
In re Plant Insulation Co., 734 F.3d 900, 910 (9th Cir. 2013).
And, although the “the breadth of the words ‘related to’ does
not mean the sky is the limit,” the Supreme Court has
reiterated that the “ordinary meaning of . . . [the] words
[‘related to’] is a broad one,” meaning “having a connection
with or reference to.” Dan’s City Used Cars, Inc. v. Pelkey,
133 S. Ct. 1769, 1778 (2013) (second alteration in original)
(internal quotation marks omitted); see also Nw., Inc. v.
Ginsberg, 134 S. Ct. 1422, 1428, 1430–31 (2014).
Consequently, the FAAAA’s safety exception exempts from
20 CTTA V. CITY & CTY. OF SAN FRANCISCO
preemption safety regulations that “hav[e] a connection with”
motor vehicles, not only those that directly govern the
physical operation of the tow trucks themselves. See Dan’s
City, 133 S. Ct. at 1778.
Consistent with the statutory language, Ace Auto Body &
Towing, Ltd. v. City of N.Y., 171 F.3d 765, 774 (2d Cir.
1999), holding modified on other grounds by Loyal Tire &
Auto Ctr., Inc. v. Town of Woodbury, 445 F.3d 136 (2d Cir.
2006), specifically rejected the argument that the safety
exception “extends only to safety regulation of the
mechanical components of motor vehicles.” Noting that
“[n]either the text nor the legislative history of
§ 14501(c)(2)(A) supports such a narrow reading,” Ace Auto
Body concluded that even if the phrase “safety regulatory
authority . . . with respect to motor vehicles” were
ambiguous, it must be read “to encompass the authority to
enact safety regulations with respect to motor vehicle
accidents and break-downs.” Id.
More generally, and contrary to CTTA’s arguments,
“[c]ase law . . . has on the whole given a broad construction
to the safety regulation exception.” VRC LLC v. City of
Dallas, 460 F.3d 607, 612 (5th Cir. 2006). Ours Garage
specifically rejected “the narrowest possible construction of
the [safety] exception,” 536 U.S. at 440, noting that
Congress’s clear purpose in enacting § 14501(c)(2)(A) was
“to ensure that its preemption of States’ economic authority
over motor carriers of property . . . ‘not restrict’ the
preexisting and traditional state police power over safety,” id.
at 439.
We have likewise held that towing regulations directed at
safety in a fairly broad sense are exempt from preemption
CTTA V. CITY & CTY. OF SAN FRANCISCO 21
under the FAAAA’s safety exception. Tillison v. City of San
Diego, 406 F.3d 1126, 1127 (9th Cir. 2005), for example,
held that a state law requiring towing companies to obtain
written authorization before removing a vehicle from private
property, fell within the FAAAA’s safety exception. In so
holding, Tillison emphasized the California Legislature’s
statement that it enacted the statute
“to further the safety of the general public by
ensuring that a private property owner or
lessee has provided his or her authorization
for the removal of a vehicle from his or her
property, thereby promoting the safety of
those persons involved in ordering the
removal of the vehicle as well as those
persons removing, towing, and storing the
vehicle.”
Id. at 1129–30 (emphasis added) (quoting Cal. Veh. Code
§ 22658(m)(2)). Tillison v. Gregoire similarly held a state
law restricting patrol and nonconsensual towing exempted by
the FAAAA’s safety exception, listing a number of possible
“safety purposes” animating the law, including “prevent[ing]
involuntary tows and towing mistakes, reduc[ing]
confrontations, and expedit[ing] vehicle recovery.” 424 F.3d
at 1100–01, 1104. Some of these purposes — for example,
reducing confrontations — are related to the safety of
individuals affected by the towing process, but not directly to
the safe operation of the tow trucks when in use as a vehicle.
Finally, in addition to the Second Circuit in Ace Auto
Body, our other sister circuits have interpreted the scope of
the FAAAA’s safety concept consonantly with our cases.
Cole v. City of Dallas, 314 F.3d 730 (5th Cir. 2002) (per
22 CTTA V. CITY & CTY. OF SAN FRANCISCO
curiam), for instance, held a Dallas regulation prohibiting the
issuance of a tow driving permit to persons who had been
convicted of certain drug crimes to be “a motor vehicle safety
regulation under 49 U.S.C. § 14501(c)(2)(A).” Id. at 731. “It
is difficult to imagine,” the court explained, “a regulation
with a more direct protective nexus or peripheral economic
burden.” Id. at 735. Cole emphasized that Ours Garage
“anchored” its interpretation of the FAAAA’s safety
exception “to Congress’s desire to leave for the states and
local governments those responsibilities regarding motor
carriers that do not relate to the slender congressional goal of
addressing economic authority over such carriers.” Id. at 733.
Accordingly, Cole “decline[d] to elasticize Congress’s
economic goal by narrowly interpreting ‘safety regulatory
authority of a State with respect to motor vehicles.’” Id. at
734; see also VRC LLC, 460 F.3d at 615 (holding that an
ordinance requiring explanatory signs concerning towing fell
within the FAAAA’s safety exception as possible “violent
confrontation between unwarned vehicle owners and tow
truck drivers” could be remedied by a sign requirement);
Galactic Towing, Inc. v. City of Miami Beach, 341 F.3d 1249,
1251–52 (11th Cir. 2003) (concluding that a nonconsensual
towing ordinance requiring permits and written authorization
to tow fell within the FAAAA’s safety exception).
In sum, the FAAAA’s safety exception does not, as
CTTA contends, limit the set of valid safety rationales in this
context to those concerned only with the safe physical
operation of the tow trucks themselves. Rather, regulations
that are “genuinely responsive” to the safety of other vehicles
and individuals involved in the towing process may also be
exempted from preemption. Keeping this proper
understanding of the FAAAA’s safety concept in mind, we
CTTA V. CITY & CTY. OF SAN FRANCISCO 23
turn to CTTA’s specific challenges to San Francisco’s Permit
Scheme.
IV.
We first analyze CTTA’s challenge to the Permit
Scheme’s general permit requirements. We then address the
remaining provisions enabling the operation of the Permit
Scheme, such as the requirements concerning applications,
fees, permit possession and display, and penalties.
A.
The Permit Scheme’s requirements that tow car operators
and tow car firms hold a City-issued permit while operating
in San Francisco, S.F. Police Code §§ 3000, 3050, clearly fall
within the FAAAA’s preemption clause, as they are “related
to a . . . service of [a] motor carrier,” 49 U.S.C.
§ 14501(c)(1). But the permit requirements, we hold, fall
within the Act’s safety exception.
In applying the safety exception, we first “consider
available legislative or regulatory intent” to evaluate
“whether safety relating to motor vehicles was truly a
concern,” using “whatever traditional sources of legislative
intent are available.” CTTA I, 693 F.3d at 860, 864. Neither
party has cited legislative history dating from the initial
enactment of these ordinances, which may not exist. When
amending Article 30.1 in 2009, however, the Board of
Supervisors made explicit findings, some of which are
directly concerned with safety.
Specifically, the Board found “that there is a significant
risk to the safety of residents and visitors when illegal towing
24 CTTA V. CITY & CTY. OF SAN FRANCISCO
from private property occurs at night,” and “that there is a
risk to public health and safety when the vehicles of senior
citizens and persons with disabilities are illegally towed from
private property.” S.F. Police Code § 3055.2(a)(ii), (iii).
CTTA maintains that only these safety-related findings are
relevant to evaluating the Permit Scheme. But that argument
assumes that the only safety concerns relevant to the
preemption analysis are those expressly stated in section
3055.2(a). That is not so. As CTTA I emphasized, a safety
justification “can be obvious from the subject of the
regulation itself, as well as from the surrounding
circumstances.” 693 F.3d at 864.
Here, as in Gregoire, it is “reasonable to conclude” from
the Permit Scheme’s subject matter that the legislature “had
public safety in mind when it passed [the law].” 424 F.3d at
1103. Indeed, the California state law allowing
municipalities like San Francisco to regulate towing services
demonstrates clear safety concerns. See Cal. Veh. Code
§ 21100(g)(2).7 Furthermore, the Coggan Declaration —
although not direct evidence of the Board’s intent, as it was
produced after the Permit Scheme was enacted — can be
considered to establish the “surrounding circumstances” in
which the ordinances were passed. CTTA I, 693 F.3d at 864.
That is, the Declaration is evidence of the broad range of
safety problems arising in the towing industry, such as the
7
The California Legislature, in enacting section 21100(g)(2), found:
[T]hat the safety and welfare of the general public is
promoted by permitting local authorities to regulate tow
truck service companies and operators by requiring
licensure, . . . thereby ensuring against towing mistakes
that may lead to violent confrontation, [and] stranding
motorists in dangerous situations . . . . Id.
CTTA V. CITY & CTY. OF SAN FRANCISCO 25
“operati[on] [of] tow trucks in an unsafe manner on the road,”
“stealing merchandise from towed vehicles,” and instances of
physical or sexual assault by tow operators or their
employees.
Viewing the various indices of regulatory intent in
combination, we find that “safety relating to motor vehicles
was truly a concern” that motivated the Board of Supervisors
to enact the challenged permit requirements.8 CTTA I,
693 F.3d at 860. These safety concerns include the limited
set articulated when enacting the 2009 amendment to Article
30.1 — the risk posed by illegal towing from private property
at night or involving a vehicle belonging to senior citizens
and persons with disabilities — but are not limited to those
concerns. Rather, we may infer from the other indices that
broader safety concerns, including safe operation of the
trucks, physical or sexual assault, the possibility of violent
confrontations, and the stranding of motorists in dangerous
situations, also underlay the enactment of the challenged
permit requirements.
The second prong of the safety exception analysis
requires us to “assess the nexus between the provision at issue
and the safety concern.” CTTA I, 693 F.3d at 860. That
nexus is more than sufficient.
8
To be sure, CTTA’s observation that the Permit Scheme is animated,
in part, by consumer protection concerns is accurate. See S.F. Police Code
§ 3055.2(a)(iv)–(viii). That the Board had reasons other than safety for
enacting the regulation, however, does not compel the conclusion that the
Board’s safety-related findings are “pretextual.” CTTA I instructed that
“mixed motives” do not affect the safety-exception analysis so long as the
challenged regulations have a “logical connection” to the “safety
justification.” 693 F.3d at 860.
26 CTTA V. CITY & CTY. OF SAN FRANCISCO
That the permit requirements have a significant and
logical relationship to safety is evident. As the district court
stated, “the presence of a permit requirement implies the
threat of permit revocation,” which makes the requirement “a
tool for policing misconduct in the towing industry.”
Furthermore, the permit requirement enables the City
proactively to “weed out” and monitor tow car drivers and
firms on an ongoing basis.
CTTA maintains that a more appropriate safety response
by the City would be “to increase the criminal penalties for
[illegal towing],” instead of creating a scheme that “places
enormous regulatory and economic burdens on legitimate
towing firms.” But the FAAAA’s safety exception does not
save from preemption only the least intrusive methods of
promoting safety. Moreover, as Sergeant Coggan reasonably
observed, it may well be that “the threat of permit nonrenewal
or revocation by administrative action is more effective than
the threat of criminal or civil prosecution, given the relative
certainty and timeliness of the administrative process.”
CTTA offers no reason to doubt this assessment.
Taking another tack, CTTA complains that the City has
produced “no evidence” that the Permit Scheme has in fact
increased safety or reduced the incidence of illegal towing,
contending that the record evidence is “entirely bereft of any
statistical data” or other “empirical data.” But a regulation
falls within the FAAAA’s safety exception if it is “genuinely
responsive to safety concerns,” a test we have described as
requiring “a logical connection to motor vehicle safety.”
CTTA I, 693 F.3d at 860 (emphasis added) (internal quotation
marks omitted). That is, the safety exception is concerned
with legislative intent, not legislative effectiveness.
CTTA V. CITY & CTY. OF SAN FRANCISCO 27
As a third line of attack, CTTA contends that the permit
requirements are not facially concerned with safety. In
CTTA’s view, permissible safety regulations include
regulations such as “requiring tow truck drivers to pass a
driving test, or to demonstrate competence in towing motor
vehicles,” not permit requirements. This argument rests on
CTTA’s incorrect understanding of the FAAAA’s safety
concept, see Part III, supra. As we have explained, the safety
exception is not limited to regulations that narrowly address
“on-the-road” safety for tow trucks; rather, it extends to
regulations that protect safety in connection with motor
vehicles towed and the individuals who interact with tow
truck operators and firms. See, e.g., Tillison, 406 F.3d at
1127; Gregoire, 424 F.3d at 1100–01; VRC LLC, 460 F.3d at
609, 615; Galactic Towing, 341 F.3d at 1251–52; Cole,
314 F.3d at 731. CTTA cannot plausibly claim that revoking
the permit of those tow car drivers and firms who commit
misconduct related to their services, strand motorists in
dangerous locations, or operate dangerously is not logically
connected to improving the safety of individuals involved in
the towing process.
Finally, CTTA invokes Automobile Club of New York,
Inc. v. Dykstra, 520 F.3d 210 (2nd Cir. 2008). Dykstra
involved a challenge to New York City’s comprehensive
regulation of the towing industry “as applied to tow trucks
from outside New York City.” Id. at 212. Holding that
“[e]nforcing the Scheme against tow trucks passing through
New York City or towing vehicles into New York City does
not respond to safety concerns and does not fall within the
safety exception,” id. at 217, Dykstra, presumably because it
focused on those questions, did not discuss — or even cite —
earlier decisions like Cole, VRC, or Galactic Towing, all of
which held that the FAAAA’s safety exception covers towing
28 CTTA V. CITY & CTY. OF SAN FRANCISCO
permit regulations affecting in-jurisdiction operators.
Notably, Dykstra observed that tow trucks from New York
City “would presumably already be licensed” under the city’s
permit regulation, without questioning the validity of that
regulation. Id. at 217. Dykstra was thus primarily concerned
with the application of New York City’s permit regulation to
vehicles coming from outside the City.9 The case does not
support CTTA’s position in this case.
In sum, the permit requirements of sections 3000 and
3050 are “genuinely responsive” to the set of real safety
concerns that underlay enactment of the Permit Scheme.
Accordingly, these requirements fall within the Act’s safety
exception, and so are exempted from preemption.
B.
The district court concluded that the majority of the
remaining provisions fell within the FAAAA’s safety
exception, while others were not covered by the FAAAA’s
preemption clause in the first place. CTTA’s arguments
concerning these provisions for the most part suffer from the
same infirmities that undermine its arguments concerning the
general permit requirements. As the district court properly
conducted a thorough “provision-by-provision” analysis, we
address most of the provisions only in brief. We separately
address thereafter section 3052’s complaint-handling system
and business plan requirements, see S.F. Police Code
§ 3052(4).
9
The question of extraterritorial application is irrelevant in this case, as
the California Court of Appeal held that the Permit Scheme applies only
to those towing firms whose “principal place of business or employment”
is San Francisco. See n.3., supra.
CTTA V. CITY & CTY. OF SAN FRANCISCO 29
1. Permit Application Requirements, Sections 3002 and
3052
The district court concluded that the Permit Scheme’s
application and information-collection requirements fall
within the FAAAA’s safety exception.10 We agree.
Requiring tow car operators and tow car firm applicants
to submit identification information as part of their
applications is “logical[ly] connect[ed],” CTTA I, 693 F.3d at
860, to the safety of individuals potentially threatened by
such drivers or firms. Those requirements allow the police
more easily to identify drivers and firms that commit
wrongdoing or misconduct.
One of the primary ways by which the Permit Scheme
genuinely responds to safety concerns is by providing police
the capability proactively to monitor the towing industry, a
capability that is predicated on the police having basic
information about tow car drivers. CTTA in fact concedes
that such identifying information “may be helpful to the
police in identifying tow truck drivers,” but argues that such
identification “does nothing to improve towing safety” and
ensure that drivers “will operate their vehicle safely.” But, as
we have explained, the Act’s safety concept is not limited to
the safe physical operation of the tow trucks. Instead, it
includes protection of customers, who may be in vulnerable
situations, from dangerous or irresponsible tow truck
10
The district court also concluded that the application requirements are
subject to the FAAAA’s express preemption clause; the City does not
contest that conclusion. We thus assume without deciding that the
requirements would be preempted if they did not fall within the safety
exception.
30 CTTA V. CITY & CTY. OF SAN FRANCISCO
operators. Accurate identification of the tow car operator and
car firm operators helps to provide such protection.
CTTA contends in particular that the requirements that
applicants provide criminal history information as part of
their application, see S.F. Police Code §§ 3002(5), 3052(7),
are preempted by the FAAAA. That these requirements
“genuinely respon[d]” to safety concerns is quite apparent.
Indeed, “[i]t is difficult to imagine a regulation with a more
direct protective nexus or peripheral economic burden.”
Cole, 314 F.3d at 735.11
Finally, CTTA argues that, in any event, requiring driver
permit applicants to list all criminal offenses for which they
have been arrested is not responsive to safety concerns,
because an arrest is “not competent evidence of any
wrongdoing.” That observation is quite valid, and curbing
the misuse of arrest records is a legitimate concern.12 As the
11
For the same reason, the Permit Scheme’s provisions allowing for
permit denial or revocation due to criminal activity, S.F. Police Code
§§ 3004, 3011, 3054(3) & 3056(1), fall within the Act’s safety exception.
12
See Gary Fields & John R. Emshwiller, As Arrest Records Rise,
Americans Find Consequences Can Last a Lifetime, Wall St. J. (Aug. 8,
2014) (observing that “nearly one out of every three American adults”
have arrest records, and that “[m]any people who have never faced
charges, or have had charges dropped, find that a lingering arrest record
can ruin their chance to secure employment, loans and housing”).
In recent guidance concerning the use of criminal records in the
employment context, the Equal Employment Opportunity Commission
explained: “The fact of an arrest does not establish that criminal conduct
has occurred. Arrests are not proof of criminal conduct. Many arrests do
not result in criminal charges, or the charges are dismissed.” EEOC
Enforcement Guidance No. 915.002, Consideration of Arrest and
CTTA V. CITY & CTY. OF SAN FRANCISCO 31
City points out, however, “the Police Code does not allow a
permit denial based solely on arrest”; any such denials would
be extremely troublesome and could be separately
challenged.13 Simply collecting information on arrests is
nonetheless pertinent to assuring accurate identification of
drivers, as arrest records contain identifying information,
including fingerprints and usage of aliases.
In sum, the Permit Scheme’s application requirements,
including the criminal history disclosure requirements, fall
within the scope of § 14501(c)(2)(A), and are therefore not
preempted.
Conviction Records in Employment Decisions Under Title VII of the Civil
Rights Act of 1964 (2012), available at http://www.eeoc.gov/laws/
guidance/arrest_conviction.cfm. The EEOC further observed that many
states “have enacted laws to limit employer inquiries concerning all or
some arrest records.” Id. n.101. In California, for example, employers —
“whether a public agency or private individual or corporation” — are
generally prohibited from “ask[ing] an applicant for employment to
disclose . . . information concerning an arrest or detention that did not
result in conviction.” Cal. Lab. Code § 432.7(a).
13
The Permit Scheme does allow denial or revocation of a permit where
the driver has “acted in violation” of the listed criminal statutes, even if
not convicted. S.F. Police Code § 3004(b). CTTA provides no
substantive argument challenging this particular ground for denial, either
on the merits or with regard to any procedures that might be required
before denying a permit on that ground. See United States v. Kama,
394 F.3d 1236, 1238 (9th Cir. 2005) (“Generally, an issue is waived when
the appellant does not specifically and distinctly argue the issue in his or
her opening brief.”).
32 CTTA V. CITY & CTY. OF SAN FRANCISCO
2. Permit Fees, Section 3003 and 3053; Penalties, Sections
3012 and 3064
The district court correctly concluded that the permit fee
and penalty provisions fall within the safety exception.
The filing and license fees reimburse the City for the costs
of processing the application. The permit fees thus directly
support the Permit Scheme’s other requirements. As the
district court explained, “that the permit fee requirements
regulate somewhat more indirectly is not by itself fatal, for,
like the essential permit requirements themselves, they
remain ‘logically’ and ‘genuinely’ connected to obvious
[safety] concerns.”14 “[I]t would make no sense to conclude
that certain provisions of the [Permit Scheme] are not
preempted because they are genuinely responsive to safety
concerns, but that the state is forbidden from taking measures
to make those provisions effective.” Prof’l Towing &
Recovery Operators of Ill. v. Box, 965 F. Supp. 2d 981, 1003
(N.D. Ill. 2013).
The penalty provisions for driving or operating a tow
truck in the City without requiring the requisite permit are
likewise integral to the functioning of the Scheme’s permit
14
CTTA argues that this analysis is contrary to CTTA I’s instruction to
examine a preemption challenge to a comprehensive law on a “provision-
by-provision basis.” 693 F.3d at 860. Yet CTTA’s argument overstates
the meaning of CTTA I’s instruction. A provision-by-provision analysis
ensures that “the mere fact that one part of a regulation or group of
regulations might come within an exception to preemption does not mean
that all other parts of that regulation or group are also excepted.” Id.
(internal quotations omitted). But CTTA I could not possibly require
courts to ignore the particular function of a provision in the context of the
comprehensive scheme, as doing so would result in absurd outcomes.
CTTA V. CITY & CTY. OF SAN FRANCISCO 33
requirement. Absent some penalty for noncompliance, the
permit requirement would be a dead letter. CTTA’s only
argument is a reiteration of its basic theme: “While the threat
of misdemeanor convictions may serve as a deterrent to
encourage drivers to comply with the ordinance, there has
been no showing that complying with the ordinance enhances
the safety of the motoring public.” Repeating the same
refrain does not improve it.
We thus hold that the fee and penalty provisions fall
under the safety exception and are not preempted.
3. Possession and Display Requirements, Section 3007 and
3055
The district court concluded that the permit possession
and display requirements “are not subject to FAAAA
preemption” in the first place, as displaying a permit does not
constitute a “service” under § 14501(c)(1). CTTA argues to
the contrary — that directing “drivers to affirmatively
perform an act,” such as display a permit to a police officer,
is inherently a “service.”
We cannot agree with CTTA. A requirement designed to
demonstrate compliance with a legal obligation is not
ordinarily termed a “service.” One who hands over his
driver’s license to a police officer when stopped for a traffic
violation, for example, is not providing a “service” to the
officer. Moreover, the only state laws “whose effect is
forbidden under [the FAAAA] are those with a significant
impact on carrier rates, routes, or services.” Rowe, 552 U.S.
at 375 (internal quotation marks and emphasis omitted).
CTTA has not shown that the permit possession and display
requirements affect its members in any significant manner
34 CTTA V. CITY & CTY. OF SAN FRANCISCO
distinct from the requirement of obtaining the permit in the
first place.
Consequently, sections 3007 and 3055 are not preempted
by the FAAAA.15
4. Complaint System and Business Plan Requirements,
Section 3052(4)
To obtain a tow car firm permit, applicants must include
in their application “[a] description of the applicant’s
business plan, . . . and a system for handling complaints that
is acceptable to the Chief of Police.” S.F. Police Code
§ 3052(4). The district court concluded that both
requirements fell within the FAAAA’s safety exception.16
15
Dan’s City recently held that for FAAAA preemption to apply, “it is
not sufficient that a state law relates to the ‘price, route, or service’ of a
motor carrier in any capacity; [it] must also concern a motor carrier’s
‘transportation of property.’” 133 S. Ct. at 1778–79 (emphasis added).
Dan’s City further explained that the “with respect to transportation of
property” phrase “massively limits the scope of preemption ordered by the
FAAAA.” Id. at 1778 (internal quotation marks omitted); see also Mass.
Delivery Ass’n v. Coakley, 769 F.3d 11, 23 (1st Cir. 2014) (“[T]he
FAAAA is carefully tailored to preempt only those statutes that affect a
motor carrier’s transportation of property.”). The permit possession and
display requirements may escape preemption for this additional reason, as
they do not appear related to services “with respect to transportation of
property.” Cf. Dan’s City, 133 S. Ct. at 1779 (defining “transportation”
as “services related to th[e] movement” of property, “including arranging
for, receipt, delivery, elevation, transfer in transit, refrigeration, icing,
ventilation, storage, handling, packing, unpacking, and interchange of
passengers and property” (quoting 49 U.S.C. § 13102(23)(B)).
16
The City’s counsel agreed at oral argument that the section 3052(4)
requirements are covered by the FAAAA’s express preemption clause.
We so assume for the purposes of this opinion.
CTTA V. CITY & CTY. OF SAN FRANCISCO 35
While we agree that the complaint system requirement
genuinely responds to safety concerns, we conclude that the
business plan requirement falls outside of the safety
exception and is therefore preempted.
(a) Requiring tow car firms to have acceptable systems
for handling customer complaints is logically connected to
improving safety.
First, as the district court found, “having such a complaint
system in place could reduce the incidence of heated
confrontations” between tow car firm employees and
individuals whose vehicles were towed. It is reasonable to
conclude that individuals who are upset or angered by the
towing process are less likely personally to confront tow car
firm operators or employees when they are aware that there
is an official mechanism for handling their complaints. And
reducing such confrontations, we have held, is a permissible
safety-related concern under the FAAAA. See Gregoire,
424 F.3d at 1103–04.
Second, having an effective complaint system can alert
the tow car firm itself to alleged unsafe conduct by its drivers
or employees. Most fundamentally, the complaint system is
simply an alternative mode of enforcement of the valid safety
regulations. That is, although the complaint system may not
in itself be a direct safety regulation, it — like the Permit
Scheme’s fee and penalty provisions — helps to effectuate
the Scheme’s direct safety-related regulations. Accordingly,
this requirement falls within the FAAAA’s safety exception.
(b) The remainder of section 3052(4)’s business plan
requirement, however, does not fit the safety rubric, even as
broadly understood. The district court held that the Board’s
36 CTTA V. CITY & CTY. OF SAN FRANCISCO
purpose in enacting this provision was “to ascertain whether
a permitted towing firm would be able to make ends meet
without resorting to illegal means.” The City also points to
the Coggan Declaration, which states that the business plan
allows the City to “assess whether the [applicant] companies
have a plan to transport and store vehicles in a safe manner.”
These asserted roles for the business plan requirement are
belied by the fact that no enforcement provisions are linked
to the requirement. The failure to include a business plan in
the application is not a ground for denying or revoking a tow
car permit. See S.F. Police Code §§ 3054, 3056. Any
connection between the business plan requirement and the
ascertainment of safe practices or capacities is ephemeral.
Moreover, the City’s evidence suggests that the business
plan requirement is intended to further consumer protection,
not safety. For example, Coggan stated that, “[b]y requiring
that companies submit business plans and proposed services
to be provided, the Department can better determine whether
the amount charged by a tow company is commensurate with
the services it regularly provides.” In sum, unlike the other
challenged provision, the business plan requirement is just
not genuinely responsive to safety concerns, and so is
preempted.
We therefore must consider whether the business plan
provision (except for the complaint requirement) is severable
from the remainder of the Permit Scheme. CTTA I explained
that the Scheme’s severance provisions, see S.F. Police Code
§§ 3013, 3065, allow us “to sever a particular provision if it
would not affect the Permit [Scheme] as a whole.” 693 F.3d
at 863. “Severability of a local ordinance is a question of
state law . . . .” City of Lakewood v. Plain Dealer Publ’g Co.,
CTTA V. CITY & CTY. OF SAN FRANCISCO 37
486 U.S. 750, 772 (1988). In California, the presence of a
severability clause “establishes a presumption in favor of
severance.” Cal. Redevelopment Ass’n. v. Matosantos,
53 Cal. 4th 231, 270 (2011). Additionally, “[t]he invalid
provision must be grammatically, functionally, and
volitionally separable.” Id. at 271.
Grammatical separability — “whether the invalid parts
can be removed as a whole without affecting the wording or
coherence of what remains,” id. (internal quotation marks
omitted) — is certainly satisfied. Section 3052(4) is a
freestanding provision, and so unconnected grammatically to
the rest of the enactment. And after severance, the revised
section reads: “A description of . . . a system for handling
complaints that is acceptable to the Chief of Police,” a
perfectly coherent requirement.
The latter two severability criteria are also met. The
business plan requirement is a minor — even tangential —
provision of the Permit Scheme. It is neither a requirement
for obtaining a permit nor a means of facilitating, supporting,
or enforcing the permit requirement. Its invalidation
therefore in no way affects the “measure’s operation and
purpose,” making it functionally severable, nor is it of
“critical importance to the measure’s enactment,” making it
volitionally separable. Hotel Emps. & Rest. Emps. Int’l
Union v. Davis, 21 Cal. 4th 585, 613 (1999).
We hold that the business plan requirement is preempted
by the FAAAA, but that the requirement is severable from the
valid complaint requirement contained in section 3052(4),
and from the Permit Scheme more generally.
38 CTTA V. CITY & CTY. OF SAN FRANCISCO
5. Miscellaneous Provisions
The district court properly concluded that the Permit
Scheme’s recordkeeping requirement, S.F. Police Code
§ 3060, is saved from preemption by the FAAAA’s safety
exception. Like the permit application requirements, the
recordkeeping requirement allows the police more easily to
identify drivers and firms that have committed wrongdoing or
misconduct. Without accurate records, it may be difficult for
law enforcement to investigate alleged dangerous activities,
thus reducing the Permit Scheme’s potential for deterring
unsafe conduct.
Likewise, the district court correctly determined that
section 3055.2, which requires tow firm operators to display
brochures containing a concise summary of California towing
law “in a conspicuous place in the location where a vehicle
owner must come to reclaim their towed vehicle,” S.F. Police
Code § 3055.2(c), falls within the FAAAA’s safety
exception. The Board of Supervisors made its safety-related
findings when adding the brochure requirement in 2009. See
id. § 3055.2(a)(ii)–(iii). This timing indicates a connection
between the requirement and the Permit Scheme’s safety
concerns. Nor is there any indication that the Board’s
findings were pretextual. As the district court explained, the
requirement is “obviously aimed at discouraging improper
towing . . . and prevent[ing] illegal tows [] evinces a genuine
motor vehicle safety concern.” Like a requirement that tow
car firms post explanatory signs, upheld by the Fifth Circuit
in VRC LLC, 460 F.3d at 615, the brochures required by the
Permit Scheme promote safety by providing consumers with
information that could reduce confrontation. Furthermore,
the brochure requirement, like the fees and penalties
provisions, enable the effectiveness and enforcement of the
CTTA V. CITY & CTY. OF SAN FRANCISCO 39
other safety-related provisions by ensuring that customers are
aware of their rights, and so able to register complaints when
they are violated. Cf. Prof’l Towing, 965 F. Supp. 2d at
1003.17
In sum, the Permit Scheme’s recordkeeping and brochure
requirements fall within the FAAAA’s safety exception, and
are therefore saved from preemption.
V.
We reverse the district court’s grant of summary
judgment to the City as to section 3054(2)’s business plan
requirement, and remand to the district court for further
proceedings consistent with this opinion. We otherwise
affirm the district court’s judgment.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.
CTTA will bear the costs of appeal.
17
Of course, for the brochure requirement to survive preemption, the
concise summary of state laws included in the brochure must not refer to
any laws that themselves are preempted.