Joe Sanfelippo Cabs Inc. v. City of Milwaukee
46 F. Supp. 3d 888
E.D. Wis.2014Background
- Milwaukee capped taxicab permits for decades; 1992 ordinance allowed transferability but not new issuance, creating a secondary market.
- 2011 state court held cap violated Wisconsin Constitution due to lack of rational basis; 2013 injunction briefly halted cap.
- 2014 city amended to increase cap and then, in Sept 2014, eliminated cap entirely and regulated network companies (Uber/Lyft).
- Plaintiffs (162 permits owned, most acquired in secondary market) challenged the 2014 ordinance as unconstitutional—now seeking a preliminary injunction.
- The 2014 ordinance allowed traditional taxis to operate as network vehicles under fixed pre-arranged fares via electronic platforms; network vehicles exempt from some markings and complaint disclosures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Substantive due process challenge to removing the cap | Plaintiffs claim permit value constitutes protected property. | City has rational basis for removing cap given new regulation, demand, and legal orders. | Unlikely to show lack of rational basis; cap removal likely rational under Level of review. |
| Equal protection challenge to differential regulation of network vehicles | Different treatment of network vehicles vs traditional cabs is irrational. | Regulations rationally distinguish based on fare setting, appearance, and complaint information. | Rational basis supports differential treatment; no equal protection violation. |
| Irreparable harm and balance of harms for injunction | Removal harms permit values, revenue, and business viability. | Damages may remedy permit devaluation; public interest supports regulation of network services. | No injunction; harms do not favor plaintiffs given public interest and lack of likelihood of success. |
Key Cases Cited
- Ezell v. City of Chicago, 651 F.3d 684 (7th Cir. 2011) (threshold for preliminary-injunction showing; balancing harms)
- Goodpaster v. City of Indianapolis, 736 F.3d 1060 (7th Cir. 2013) (rational-basis review applies if no protected class or fundamental right)
- Minneapolis Taxi Owners Coal., Inc. v. City of Minneapolis, 572 F.3d 502 (8th Cir. 2009) (property interest in permit value not clearly protected but rational-basis review governs)
- Bd. of Regents v. Roth, 408 U.S. 564 (1972) (constitutional property interests require more than mere expectations)
- Contreras v. City of Chicago, 119 F.3d 1286 (7th Cir. 1997) (rational-basis review governs classifications that are not suspect or fundamental)
- Fed. Communications Comm'n v. Beach Communications, Inc., 508 U.S. 307 (1993) (any conceivable rational basis sustains classification)
- Scariano v. Justices of Supreme Court of State of Ind., 38 F.3d 920 (7th Cir. 1994) (illustrates less-than-perfect precision allowed under rational-basis review)
- Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S. 356 (1973) (illustrates deferential rational-basis standard)