June 07, 2017
A U.S. District Court judge turned down the Philadelphia Parking Authority's motion Tuesday to dismiss a civil lawsuit filed against the authority by some 130 taxicab companies.
In his decision, Judge Michael Baylson also denied former PPA head Vincent Fenerty's request to be protected from liability in the case.
The medallion-holding cab operators allege that the PPA "micro-regulated" them while failing to regulate ride-sharing companies like Uber and Lyft.
Together, the group is seeking $500 million in damages, an attorney for the cab companies told the Philadelphia Business Journal.
"The damages caused by the PPA's inaction are staggering," Brett A. Berman of Fox Rothschild said. "This decision is a very bright light for taxi owners in Philadelphia who ... were subject to a regulator that did nothing to protect the taxi industry."
The rise of Uber, Lyft and other ride-sharing services, also referred to as transportation network companies, has devastated the taxi industry in recent years.
The cab companies that sued the PPA and Fenerty in 2016 claim the agency does not impose the same regulations on ride-sharing companies that cab drivers face. Because they are not subject to vehicle limitations, assessments, vehicle inspections or driver requirements, ride-sharing providers can offer their services at lower prices than a traditional cab driver can, the plaintiffs allege in the suit, obtained by PhillyVoice.
The suit also claims the PPA turned against its taxi industry when it secretly negotiated a deal to permit ride-sharing companies to operate legally in Philly and failing to level the regulatory playing field.
It also stated that the PPA imposed steep monetary assessments on the plaintiffs and mandated safety cameras to be installed in every taxi in the city.
"Neither was required of TNCs," the suit read.
Baylson denied Fenerty's assertion for qualified immunity defense, which usually shields a public official from liability in a civil case, unless that official violates statutory or constitutional rights. Baylson denied Fenerty’s request because “the right to equal protection of the laws is clearly established,” he wrote.
Fenerty resigned in September as executive director of the parking authority amid a sexual harassment scandal. According to media reports, he has since filed for more than $200,000 in unused vacation, sick day and comp time, along with collecting an annual pension of $158,628.
"The court's recent order in this action granted the Parking Authority's motion to dismiss the action, in part," Dennis Weldon, general counsel for the PPA, told the Business Journal in a statement. "While the bulk of the plaintiffs' complaint survived, discovery in this case has not yet concluded and a trial has not even begun. The notion that a party has prevailed as to some amount of money is not true and any variation of that notion is misleading. The Parking Authority anticipates that this matter will ultimately be concluded in its favor."
Although Berman gave a much different take, saying Tuesday was a big day for taxis, Baylson wrote in his decision that "the parties should not interpret this finding as any conclusion on the merits."
The decision stood because "the case has some facts, and a plausible theory, that may warrant relief in the nature of the damages," Baylson wrote.
After operating in the city illegally for years, the Pennsylvania legislature approved a temporary agreement last summer that legalized ride-sharing companies in Philly. As part of that agreement, which expired in the fall, Uber agreed to pay the PPA $350,000 for operating without regulation – once permanent legislation regulating ride-sharing services was reached.
In November, Gov. Tom Wolf signed a bill that formally legalized Uber and Lyft in Philadelphia, the last municipality in the state where they were made legal.
Under the bill, the PPA was set to create a set of regulations for ride-sharing networks in the city. Since taxi industry members reportedly slammed a presentation of drafted rules at a January hearing, no set regulations have been announced.