New Orleans taxi cab drivers lose in Federal appeals court

December 20 2012 | Latest News

"City is allowed to enforce all ordinances."

December 18, 2012

By Bruce Eggler, | The Times-Picayune

A federal appeals court has upheld, at least preliminarily, the validity of all the laws the New Orleans City Council passed early this year setting out new rules for the city's taxicab industry. A three-judge panel of the U.S. 5th Circuit Court of Appeals said Tuesday that the city can enforce all of the new rules.


taxis-taxicabs-cbd.jpg Taxicabs gather outside a hotel in the CBD awaiting fares in March 2012. Eliot Kamenitz, Times-Picayune archive

A federal district judge in August had lifted a restraining order that for three weeks had blocked city officials from implementing several new regulations for the city's 1,600 taxicabs, such as setting maximum ages for vehicles used as cabs and requiring installation of credit card machines, GPS devices and security cameras.

Judge Eldon Fallon's ruling said the city could enforce all the rules requiring taxi upgrades, which it has proceeded to do.

However, Fallon ruled against the city on two measures that many cab owners considered crucial. He issued an injunction blocking the city from enforcing ordinances declaring cab owners' permits, known as certificates of public necessity and convenience, or CPNCs, to be privileges and not rights, and making their transfer discretionary.

The appeals court panel Tuesday reversed that part of Fallon's decision, instead upholding the city's position that CPNC holders do not have a property right in the permits.

The two ordinances reinstated by the 5th Circuit mean the city can revoke the permits and block their transfer or sale to other owners, and that drivers probably won't be able to use the permits as security in seeking loans. Many drivers have paid $50,000 or more for a CPNC, which some have referred to as their equivalent of a 401(k) retirement account because they expected to be able to sell it for a similar or greater amount when they retire.

The three-judge panel noted that it was not making a final ruling on the merits of all the cab owners' challenges, only on whether they were entitled to an injunction blocking the city from enforcing the new rules. It said they had failed to show they were entitled to such an injunction either on the upgrade ordinances or on the legal status of CPNCs.

The court's ruling, written by Judge Carolyn Dineen King, suggested that the panel was sympathetic to cab owners' argument that city has not shown a "rational basis" for the new rules on the maximum age of cabs. However, it said that if the owners ultimately can persuade a court that that rule -- or the other laws requiring installation of expensive new equipment -- is not justified, the owners could sue the city to recover the money they would have been erroneously required to spend.