Jonathan Bilyk Apr. 29, 2016, 5:40pm

A Chicago federal judge has again refused to toss a lawsuit brought against the city of Chicago by an association of regulated taxi and livery drivers, saying the taxi operators have a legitimate legal beef to settle with the city over the different ways the city regulates traditional taxis and ride-sharing services like Uber and Lyft.

However, the judge also has declined yet again to issue an injunction barring the city from continuing to enforce the ordinance at the heart of the taxi association’s lawsuit, saying he would not act as a “super-legislator” directing City Hall to give taxi drivers the same privileges the taxi groups say are enjoyed by the ride-sharing services, at their expense.

“Plaintiffs are essentially asking the court to dictate the city’s transportation policy,” said U.S. District Judge Sharon Johnson Coleman. “This is evident from their motion in which they acknowledge that the City Council and the mayor will be put in the position of revising the statute or violating this court’s order. The court declines to grant such an extraordinary remedy.”

On April 25, Coleman again waded through legal filings made by both sides in the continuing proceedings over the litigation brought against the city by the Illinois Transportation Trade Association and associated Chicago taxi and livery operators.

The lawsuit was first brought in 2014 by the taxi association to challenge a city ordinance to regulate the ride-sharing services, legally known as “transportation network providers.” The cab operators said the ordinance should be illegal because it unfairly holds the TNPs to a lesser regulatory standard than their competitors in the traditional taxi business.

The taxi groups noted, for instance, that the city requires taxi operators to purchase and maintain taxi license medallions, while also limited the number of medallions available, making the medallions worth potentially hundreds of thousands of dollars.

They also noted taxi drivers must pay the city $1,200 annually, while taxi affiliations must pay $500 each year, plus $15 for each affiliated medallion.

The city also regulates how much taxi drivers can charge in fares, while drivers must undergo background checks and other screenings, and their vehicles must undergo city inspections.

By contrast, TNPs need only pay the city $10,000 annually, no matter how many vehicles it operates on city streets; are required to carry less insurance; and are not subject to city driver screenings or vehicle inspections, among other differences.

The drivers asserted the regulatory differences amount to an unconstitutional taking of their property by the city and an equal protection violation.

While brushing aside the drivers’ takings claims, Coleman had last fall ruled the taxi drivers should be allowed to press forward with their claims the differing regulations create an unconstitutional unfair playing field.

In the months since, the taxi operators amended their complaint to include an assertion the city has also improperly favored the TNPs by allowing them to pick up fares at the less-congested upper level of Chicago’s O’Hare International Airport, while restricting taxis – even those taxis that also have pre-arranged pickups via smartphone app, just as the ride-sharing services – to the airport’s busier lower level.

The city again moved to dismiss the taxi groups’ complaint, but Coleman again rejected that bid, saying the city’s arguments amount to a mere rehash of arguments the judge had already rejected in earlier attempts to dismiss and reconsider. She said the cab drivers’ complaint continued to state a claim for disparate treatment under the U.S. Constitution’s Equal Protection clause.

“The city asserts that its purpose of managing airport traffic and minimizing disruption to customer expectations about where to find taxis and liveries,” the judge wrote. “There is no rational reason to distinguish between types of for-hire car with a pre-arranged pickup made through a smartphone app. In both instances, any vehicle creates more congestion in the area of the airport to which the vehicle is sent.”

The judge, however, also declined to bar the city from continuing to regulate the taxis and TNPs under its ordinances, declining again to issue a preliminary injunction.

He said the true solution to the dispute would come through “the legislative process.”

“Regardless of this court’s ruling on the merits of plaintiffs’ claim should it reach that stage, plaintiffs will have to address their concerns to the City Council because it is clear that monetary relief will not resolve the ultimate problem for plaintiffs,” the judge said. “It is the City Council that has the authority to remedy the situation at hand, and not this court.”

The judge scheduled a hearing for May 6, directing the taxi operators to “be prepared to address what remedy they are in fact seeking that this court would have the authority to impose.”

The taxi drivers and the Illinois Transportation Trade Association is represented in the action by attorneys with the firm of Miller Shakman & Beem, of Chicago.

The city is represented by its in-house lawyers in the City of Chicago Department of Law.

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Organizations in this Story

Miller Shakman and Beem LLP
Suite 3600, 180 North La Salle Street
Chicago, IL 60601

City of Chicago
121 N LaSalle St
Chicago, IL 60602

Uber Technologies, Inc.
1455 Market St
San Francisco, CA 94103


San Francisco, CA

Yellow Cab Affiliation
3351 West Addison Street
Chicago, IL 60618

Flash Cab
5200 Otto Avenue
Chicago, IL 60656

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