Dennis Melancon v. City of New Orleans, et

Case: 12-30921 Document: 00512087024 Page: 1 Date Filed: 12/18/2012

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

December 18, 2012

No. 12-30921 Lyle W. Cayce

Clerk

DENNIS MELANCON, INCORPORATED, individually and on behalf of and

as representative of all CPNC owners in the City of New Orleans; PATRICK

MURPHY, individually and on behalf of and as representative of all CPNC

owners in the City of New Orleans; ERIC HUSTED, individually and on

behalf of and as representative of all CPNC owners in the City of New

Orleans; WILLIAM KERNER, IV, The Succession of, individually and on

behalf of and as representative of all CPNC owners in the City of New

Orleans,

Plaintiffs-Appellees - Cross-Appellants

v.

CITY OF NEW ORLEANS,

Defendant-Appellant - Cross-Appellee

___________________________

MONROE COLEMAN; COLEMAN CAB COMPANY; PLACIDO CAB

SERVICE, INCORPORATED; VETERANS CAB COMPANY, L.L.C.; PATIO

CABS; U.S. CABS; NIRAN GUNASEKARA; WESNER DEROSIER;

ALLIANCE CAB SERVICE, L.L.C.,

Plaintiffs-Appellees - Cross-Appellants

v.

CITY OF NEW ORLEANS,

Defendant-Appellant - Cross-Appellee

___________________________

CEDRIC RICHARD; POSTENE LOUISJEUNE; HERMAN W. WOODS;

CALVIN LEVY; WILLIAM A. MARKS, INCORPORATED; VAHID HABIB;

BOSNA EXPRESS, L.L.C.; PANAMERICA, L.L.C.; MATTA’S

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No. 12-30921

TRANSPORTATION COMPANY; RAMSIS TRANSPORTATION,

INCORPORATED; AIMAN GIBRIAL; PERLE DES ANTILLES, L.L.C.;

EASTERN CAB, INCORPORATED; ROYAL CAB, INCORPORATED;

JEANMARIE DESIR; MESSILIEN GEORGES; BRISSETTE,

INCORPORATED; TRAVIS K. BRISSETTE; LIBERTY BELL CAB, L.L.C.;

RIVERBEND CAB, L.L.C.; PELICAN CAB, L.L.C.; HALID HABIB;

HAMPTON TRANSPORTATION AND CAB SERVICE CPNC 997, L.L.C.,

Plaintiffs-Appellees - Cross-Appellants

v.

PURA BASCOS; MALACHI HULL; CITY OF NEW ORLEANS,

Defendants-Appellants - Cross-Appellees

Appeals from the United States District Court

for the Eastern District of Louisiana

Before STEWART, Chief Judge, and KING and OWEN, Circuit Judges.

KING, Circuit Judge:

This case involves three consolidated lawsuits filed by plaintiffs who

challenge the lawfulness of various ordinances enacted by the City of New

Orleans regulating that city’s taxicab industry. After the plaintiffs obtained

from a Louisiana state court a temporary restraining order prohibiting

enforcement of the ordinances, the City of New Orleans filed a motion for

declaratory relief in federal court, seeking to dissolve the restraining order. The

plaintiffs, in turn, moved for a preliminary injunction prohibiting enforcement

of the ordinances. The district court granted in part and denied in part each

motion, and both parties now appeal. For the reasons set forth below, we

VACATE the district court’s order insofar as it granted a preliminary injunction;

we AFFIRM that order insofar as it denied a preliminary injunction; and we

REMAND the case for further proceedings consistent with this opinion.

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I. FACTUAL AND PROCEDURAL BACKGROUND

In 1956, the City of New Orleans (“the City”) passed various ordinances

creating the regulatory framework within which the City’s taxicab industry

currently operates. Since that time, the industry has been heavily regulated.

One important aspect of the City’s regulatory framework is the requirement

imposed by section 162-151 of the Municipal Code of Ordinances (the “Municipal

Code”) that a taxicab operator obtain from the City a certificate of public

necessity and convenience (“CPNC”) prior to operating a vehicle as a taxicab.

Orleans Parish, La., Code of Ordinances § 162-151 (2000). Until 2009, section

162-186 limited to a total of 1,600 the number of CPNCs the City could issue.

Orleans Parish, La., Code of Ordinances § 162-186 (2004). As a result of this

limited supply, and because the City permitted CPNC holders to transfer their

certificates for consideration, a secondary market developed for the exchange of

CPNCs. While all CPNC transfers required approval by the City, a related

ordinance provided that such approval would be granted upon the transferee’s

completion of various City-imposed requirements. Orleans Parish, La., Code of

Ordinances § 162-321 (1995).

In April 2012, the City enacted various ordinances amending and adding

to the regulatory framework governing the taxicab industry. Eight of those

provisions are presently at issue: (1) section 162-58 prohibits the issuance of

CPNCs for vehicles that previously have been used as taxicabs or law

enforcement vehicles, or that have been titled as “salvage,” “rebuilt,” “junk,”

“total loss,” or “reconditioned”; (2) section 162-59 provides that “CPNCs are

privileges and not rights”; (3) section 162-321 allegedly makes previously

mandatory transfers of CPNCs discretionary, and prohibits their transfer during

the pendency of a suspension or revocation proceeding; (4) section 162-609

requires all taxicabs to maintain trip sheets for a two-year period; (5) section

162-613 places an age limit of eleven model years on vehicles used as taxicabs

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beginning August 1, 2012, and seven model years beginning January 1, 2014;1

(6) section 162-659 declares that all taxicabs must have credit/debit card

machines equipped with Passenger Information Monitors that permit wireless

communication to and from the taxicabs; (7) section 162-660 mandates that all

taxicabs be equipped with a security camera; and (8) section 162-661 requires

that taxicabs be fitted with global positioning systems (“GPS”).

Shortly after the City enacted these ordinances, three groups of

individuals and companies—all of whom either own or hold interests in CPNCs

(“Plaintiffs”)—filed separate lawsuits in state and federal court challenging the

ordinances.2 In particular, Plaintiffs asserted that sections 162-59 and 162-321,

the ordinances declaring CPNCs to be “privileges and not rights” and allegedly

making their transfer discretionary: (1) effected a regulatory taking under the

Fifth Amendment, and (2) impaired the obligation of contract, in violation of the

federal and Louisiana constitutions, as well as various Louisiana state laws.

Plaintiffs further asserted that sections 162-58, 162-609, 162-613, 162-659, 162-

660, and 162-661—all of which pertain to taxicab upgrade requirements (“the

Upgrade Ordinances”): (1) violated the Fourteenth Amendment’s Equal

Protection Clause, (2) constituted excessive governmental regulation that

imposed an unreasonable financial burden, (3) effected a regulatory taking

under the Fifth Amendment, (4) violated the right to privacy, and (5) impaired

the obligation of contract, in violation of the federal and Louisiana constitutions,

as well as various Louisiana state laws.

1

This provision also mandates that, as of January 1, 2013, no new or replacement

taxicab vehicles can be operated as such if the vehicles are more than five model years old.

2

Plaintiffs named as defendants the City of New Orleans; Pura Bascos, in her official

capacity as Director of the Department of Safety and Permits; and Malachi Hull, in his official

capacity as Director of the Taxicab and For Hire Vehicle Bureau. For convenience, the

defendants also are referred to collectively as “the City.”

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On July 20, 2012, a Louisiana state court issued a temporary restraining

order (“TRO”) prohibiting the City from enforcing the challenged ordinances,

most of which were due to take effect on August 1, 2012. The underlying case

subsequently was removed to the United States District Court for the Eastern

District of Louisiana and consolidated with two related cases that also had been

removed to, or were originally filed in, that court. On July 27, 2012, the City

filed a motion for declaratory relief, seeking a declaration dissolving the TRO.

Plaintiffs, in turn, moved for a preliminary injunction prohibiting enforcement

of the ordinances.

After a two-day hearing, the district court granted in part and denied in

part the City’s motion for declaratory relief and Plaintiffs’ motion for a

preliminary injunction. Underlying the court’s ruling was its conclusion that

Plaintiffs had satisfied the requirements for obtaining a preliminary injunction

in connection with sections 162-59 and 162-321. Most significantly, the court

held that Plaintiffs had demonstrated a substantial likelihood of prevailing on

their allegation that sections 162-59 and 162-321 affected protectable property

rights—the CPNCs—upon which an unconstitutional regulatory taking had been

imposed. However, the court also concluded that Plaintiffs had not

demonstrated a substantial likelihood of prevailing on their allegation that

sections 162-59 and 162-321 constituted legislation impairing the obligation of

contract, nor had they satisfied the requirements for obtaining a preliminary

injunction in connection with their numerous allegations related to the Upgrade

Ordinances.

The City appeals, arguing that the district court erred in holding that

Plaintiffs demonstrated a substantial likelihood of prevailing on their allegation

that CPNCs are protectable property and that sections 162-59 and 162-321 effect

a regulatory taking. Plaintiffs also appeal, claiming the district court erred by:

(1) holding that they had not demonstrated a substantial likelihood of prevailing

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on their claim that sections 162-59 and 162-321 constituted legislation impairing

the obligation of contract, and (2) denying their motion for a preliminary

injunction in connection with the Upgrade Ordinances. We expedited the

briefing and also heard oral argument on an expedited basis.

II. STANDARD OF REVIEW

We review a district court’s ultimate decision to grant or deny a

preliminary injunction for abuse of discretion.3 Janvey v. Alguire, 647 F.3d 585,

591-92, 595 (5th Cir. 2011). “As to each element of the district court’s

preliminary-injunction analysis,” however, “the district court’s findings of fact

‘are subject to a clearly-erroneous standard of review,’ while conclusions of law

‘are subject to broad review and will be reversed if incorrect.’” Id. at 592 (quoting

White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989)).

III. ANALYSIS

“Generally, a movant must satisfy each of four traditional criteria in order

to be entitled to a preliminary injunction: (1) irreparable injury[,] (2) substantial

likelihood of success on the merits, (3) a favorable balance of hardships, and (4)

no adverse effect on the public interest.” Black Fire Fighters Assoc. of Dall. v.

City of Dallas, 905 F.2d 63, 65 (5th Cir. 1990) (emphasis added). A preliminary

injunction is an extraordinary remedy that “should not be granted unless the

party seeking it has clearly carried the burden of persuasion on all four

requirements.” Planned Parenthood Ass’n of Hidalgo Cnty. Tex., Inc. v. Suehs,

692 F.3d 343, 348 (5th Cir. 2012) (quotation and citation omitted). Nonetheless,

“given the haste that is often necessary” in addressing a motion for a

3

In its order, the district court indicated that its consideration of the City’s motion for

declaratory judgment, which sought to dissolve the TRO, “would be functionally the same as

a hearing on a motion for preliminary injunction.” We agree, and the parties do not dispute

this point. Accordingly, our opinion—though framed as a review of the district court’s

conclusions related to the preliminary injunction—also disposes of appeals related to the City’s

motion for declaratory relief.

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preliminary injunction, “the findings of fact and conclusions of law made by a

court granting a preliminary injunction are not binding at trial on the merits.”

Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981).

A. The City’s Appeal

On appeal, the City argues that the district court erred in concluding that

Plaintiffs established a substantial likelihood of succeeding on the merits of their

claim that sections 162-59 and 162-321 effected a regulatory taking. In

particular, the City maintains, contrary to the lower court’s holding, that

Plaintiffs are unlikely to prevail on the merits of their suit because (1) Plaintiffs

hold no protectable property interest in their CPNCs, and (2) even if they do,

sections 162-59 and 162-321 do not effect a taking of that interest.

As explained below, on this record, we agree that Plaintiffs have not

demonstrated a substantial likelihood of prevailing on their argument that

sections 162-59 and 162-321 effected a taking of property interests they hold in

their CPNCs.

(1) The Ordinances at Issue

As noted, the ordinances at issue in connection with the City’s appeal are

sections 162-59 and 162-321. In its entirety, section 162-59—as originally

promulgated in April 2012—provides:

Driver’s permits and CPNCs are privileges and not rights. The

director of safety and permits or his designee has full discretion in

determining whether a driver’s permit or CPNC shall be issued.

Orleans Parish, La., Code of Ordinances § 162-59 (2012).

Section 162-321, on the other hand, pertains to the transferability of

CPNCs. Prior to April 2012, section 162-321 provided:

Upon the sale or transfer of any taxicab or for hire vehicle . . .

consideration may be received by the vendor or transferor or other

person or paid thereto by the vendee or transferee for the transfer

of the permit governing such vehicle. The CPNC shall be

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transferred provided that the following requirements are

met . . . .”

Orleans Parish, La., Code of Ordinances § 162-321 (1995) (emphasis added).

With the April 2012 amendment to section 162-321, the ordinance now states

that “[t]he CPNC may be transferred provided that the following requirements

are met.” Orleans Parish, La., Code of Ordinances § 162-321 (2012) (emphasis

added). Significantly, while most of the section’s subparts remain the same, the

amended ordinance also includes a new subsection, which provides:

Before any transfer may become effective, the transferor and the

transferee shall apply to the director who shall approve the transfer

upon the determination that the transferee meets the qualifications

of a CPNC holder under this chapter.

Orleans Parish, La., Code of Ordinances § 162-321(6) (2012) (emphasis added).

In brief, Plaintiffs argue that the 2012 versions of sections 162-59 and 162-

321 effect a regulatory taking of property interests they hold in their CPNCs.

In contrast, the City contends that no taking has occurred, because there was no

constitutionally protectable property interest at stake.

(2) Applicable Law

“The Takings Clause of the Fifth Amendment, made applicable to the

States through the Fourteenth Amendment, directs that ‘private property’ shall

not ‘be taken for public use, without just compensation.’” Urban Developers LLC

v. City of Jackson, 468 F.3d 281, 292 (5th Cir. 2006) (quoting U.S. Const. amend.

V) (internal citation omitted). Thus, to prevail on a takings claim, a plaintiff

first must demonstrate that he has a protectable property interest. Ruckelshaus

v. Monsanto Co., 467 U.S. 986, 1000 (1984). Because the Constitution protects

rather than creates property interests, courts must “resort to ‘existing rules or

understandings that stem from an independent source such as state law’ to

define the range of interests that qualify for protection as ‘property’ under the

Fifth and Fourteenth Amendments.” Lucas v. S.C. Coastal Council, 505 U.S.

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1003, 1030 (1992) (quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564,

577 (1972)).

Determining what the “existing rules” are involves identifying “the group

of rights inhering in the citizen’s relation to [a] physical thing, as the right to

possess, use and dispose of it.” United States v. Gen. Motors Corp., 323 U.S. 373,

377-78 (1945). As we previously have explained, under Louisiana law, the

essential features of the “bundle of rights” commonly characterized as “property”

are:

(1) usus-the right to use or possess, i.e., hold, occupy, and utilize the

property; (2) abusus-the right to abuse or alienate, i.e., transfer,

lease, and encumber the property, and (3) fructus-the right to the

fruits, i.e., to receive and enjoy the earnings, profits, rents, and

revenues produced by or derived from the property.

Rodrigue v. Rodrigue, 218 F.3d 432, 436-37 (5th Cir. 2000).

Nevertheless, while state law generally defines what constitutes a

property interest, “unwritten common law” or “policies and practices” also can

rise to the level of creating “property interests.” Perry v. Sindermann, 408 U.S.

593, 602-03 (1972) (internal quotation marks and citations omitted). In other

words, the Fifth Amendment protects expectations arising not just from

legislation or judicial precedent, but also those “spring[ing] from custom and

practice.” Skip Kirchdorfer, Inc. v. United States, 6 F.3d 1573, 1581 (Fed. Cir.

1993); see also Nixon v. United States, 978 F.2d 1269, 1276 (D.C. Cir. 1992)

(observing that “property interests . . . may be created or reinforced through

uniform custom and practice”); Davis v. City of Chicago, 841 F.2d 186, 188 (7th

Cir. 1988) (“An established custom or policy may be used as evidence that a

mutually explicit understanding exists.”). “To have a property interest,”

however, “a person clearly must have more than an abstract need or desire for

it. He must have more than a unilateral expectation of it. He must, instead,

have a legitimate claim of entitlement to it.” Roth, 408 U.S. at 577. “A

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constitutional entitlement cannot be created—as if by estoppel—merely because

a wholly and expressly discretionary state privilege has been granted generously

in the past.” Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458, 465 (1981)

(emphasis removed) (internal quotation marks and citation omitted).

(3) The “Existing Rules or Understandings” Related to CPNCs

In light of these principles, we must examine the “existing rules or

understandings” surrounding CPNCs to ascertain the nature of the interest held

(if any) in the certificates. As an initial matter, we note that the parties rely on

a mix of legislation, judicial precedent, and custom to advance their arguments

related to the character of the interest at stake. The City argues, for instance,

that the heavily regulated nature of the taxicab industry undermines Plaintiffs’

claim to any “entitlement” related to their CPNCs. Among other things, the City

notes that it has the statutory authority to suspend and revoke CPNCs, to

impose annual renewal requirements related thereto, and to designate routes

over which CPNC vehicles may operate. Orleans Parish, La., Code of

Ordinances §§ 162-52, 162-186, 162-248, 162-249. The City argues that these

regulations are evidence of its longstanding position that CPNCs are privileges

granted by the City, rather than constitutionally protected property rights.

Moreover, the City contends that its regulation of CPNCs took place

against the backdrop of the Louisiana Supreme Court’s decision in Hutton v. City

of Baton Rouge, 47 So. 2d 665 (La. 1950). In Hutton, a bus driver who had been

denied a CPNC to operate his business within Baton Rouge sought a writ of

mandamus to compel the certificate’s issuance. Id. at 666. The court explained

that in Baton Rouge, a bus driver needed both a CPNC and a city “franchise” to

operate a bus within city limits. Id. at 667. Because the plaintiff did not have

a franchise, the court concluded that even if it compelled the city to issue a

CPNC, the plaintiff still would not have been entitled to operate his bus within

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the city. Id. at 668. The court thus affirmed the lower court’s denial of the writ.

Id. at 670.

Before reaching this conclusion, however, the court discussed the nature

of the interest associated with a CPNC, explaining:

A certificate of public convenience and necessity is in the nature of

a personal privilege or license, which may be amended or revoked

by the power authorized to issue it, and the holder does not acquire

a property right. Such certificate is issued for the purpose of

promoting the public convenience and necessity, and not for the

purpose of conferring upon the holder any proprietary interest. The

number of such certificates to be granted over a particular route

may be limited by restricting the number of busses to the needs of

the public, so as to occasion as little inconvenience as possible to the

persons using the route and to insure to the holder of such

certificate certain immunities from competition so that he may offer

the public regular and continuous service. On the other hand, a

franchise to use the streets in its usual sense is the right to use or

occupy the streets for a stated period of time, for which a valuable

consideration is paid, and contemplates a contract between the

municipality and the individual to whom granted, and vests in the

holder thereof a limited property right to use the public streets.

Id. at 668-69. The City argues that Hutton’s statement that a CPNC “is in the

nature of a personal privilege or license” precludes the district court’s conclusion

that a holder can acquire a property interest in one.

Plaintiffs, in turn, emphasize that the regulatory framework at issue in

Hutton—an opinion, they highlight, interpreting Baton Rouge’s municipal code,

not Louisiana state law—differed considerably from that at issue here. Plaintiffs

underscore that unlike Baton Rouge, New Orleans does not have a dual

requirement that a taxicab operator obtain both a CPNC and a franchise. Thus,

they argue that, whereas Baton Rouge had a system separately providing for a

CPNC (a thing “in the nature of a personal privilege”) as well as a franchise (a

thing vesting its holder with “a limited property right”), such is not the case in

New Orleans. Rather, Plaintiffs submit, New Orleans has a single CPNC that

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conveys both the license and the property interests associated with “the right to

use or occupy the streets.” Id. at 669.

In any event, Plaintiffs also maintain that the City’s intervening treatment

of CPNCs has undermined any force Hutton may have had and has imbued the

certificates—largely by virtue of custom—with several features of “property.”

Until 2009, for example, the Municipal Code limited to a total of 1,600 the

number of CPNCs the City could issue. Although this limitation is no longer

statutorily in place, Plaintiffs adduced testimony as to the existence of a de facto

moratorium under which the City has decided to issue no more than 1,600

certificates. Plaintiffs suggest that the limited availability of CPNCs has

contributed to the development of the secondary market for their transfer,

thereby vesting them with value. Indeed, Plaintiffs introduced evidence of a

CPNC that sold for $67,000.

Relatedly, Plaintiffs contend that the City’s practice of approving a CPNC

transfer merely upon the transferee’s completion of certain requirements

likewise created a property interest in the certificates. In particular, Plaintiffs

assert that this custom created an environment in which CPNC holders have

conveyed their certificates upon their deaths and obtained loans using the

market value of their CPNCs as collateral. To support this contention, Plaintiffs

introduced evidence below as to the existence of a program whereby the Small

Business Administration has provided loans to CPNC holders that were secured

by the certificates themselves. Additionally, Plaintiffs introduced evidence that,

in at least one instance, a CPNC was awarded as “property” in a divorce action.

Plaintiffs argue that these circumstances fostered the creation of property

rights in CPNCs. Further, they maintain that as a result of these practices, a

common understanding developed between CPNC holders and the City, such

that it was mutually recognized that the property interests at stake were

constitutionally protected. As evidence, Plaintiffs highlight that, historically,

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when a CPNC was transferred from one person to another, the City issued a

certificate titled “Change of Ownership.” Moreover, in the City’s CPNC transfer

application, the current owner is instructed to list all persons with an “equitable

interest” in the CPNC, including any beneficiary that might have an interest

should the holder divorce or die. Finally, Plaintiffs introduced a 1991 opinion

issued by the New Orleans City Attorney stating that “the CPNC, which grants

the holder the right to operate a taxicab in the city, is a valuable right.”

(4) Analysis

At the outset of our analysis, we acknowledge the force with which the

parties have advanced their arguments and the thoughtful disposition of the

district court. Nevertheless, our review of the applicable law and the record

before us compels us to conclude that the district court abused its discretion in

holding that Plaintiffs demonstrated a substantial likelihood of succeeding on

their assertion that sections 162-59 and 162-321 effected a taking of property

interests Plaintiffs hold in their CPNCs. Here, the “existing rules or

understandings” that define the dimensions of the interest associated with a

CPNC evidence that the City historically has viewed and treated a CPNC as a

privilege rather than a form of constitutionally protected property. Although

City officials testified to this effect at the hearing below, our conclusion is most

emphatically supported by the heavily regulated environment within which the

New Orleans taxicab industry has operated.

As the Supreme Court has explained, “‘takings’ jurisprudence . . . has

traditionally been guided by the understandings of our citizens regarding the

content of, and the State’s power over, the ‘bundle of rights’ that they acquire.”

Lucas, 505 U.S. at 1027 (emphasis added). In considering the government’s

authority over an interest, courts thus have held that a protected property

interest simply “cannot arise in an area voluntarily entered into . . . which, from

the start, is subject to pervasive Government control,” because the government’s

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ability to regulate in the area means an individual “cannot be said to possess the

right to exclude.” Mitchell Arms, Inc. v. United States, 7 F.3d 212, 216 (Fed. Cir.

1993) (internal quotation marks, citations, and emphasis omitted); Minneapolis

Taxi Owners Coal., Inc. v. City of Minneapolis, 572 F.3d 502, 509 (8th Cir. 2009)

(citing Mitchell Arms with approval); see also Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419, 435 (1982) (“The power to exclude has traditionally

been considered one of the most treasured strands in an owner’s bundle of

property rights.”).

We need not go that far, however, to conclude that Plaintiffs have not

demonstrated a substantial likelihood of establishing that sections 162-59 and

162-321 effected a regulatory taking. For even in the absence of the April 2012

versions of sections 162-59 and 162-321, the City’s authority to exercise control

over CPNCs extends to such a degree that their holders possess, if anything,

only a limited bundle of rights in connection therewith. For instance, the City

has the statutory power, among other things, to impose various prerequisites on

a CPNC applicant or transferee, and to suspend or revoke a CPNC.4 Orleans

Parish, La., Code of Ordinances §§ 162-181, 162-248, 162-249. The City also is

authorized to designate routes over which CPNC holders may operate their

vehicles, and to require that CPNCs be renewed annually. Orleans Parish, La.,

Code of Ordinances §§ 162-52, 162-186. Perhaps most importantly, the City has

the discretion to adjust the number of CPNCs it issues.5

4

To obtain a CPNC, a first time applicant or transferee must, inter alia, provide proof

of citizenship or permanent residency, and successfully complete a detailed application, drug

test, and background check. See Orleans Parish, La., Code of Ordinances § 181 et seq.

5

Section 162-186, which previously limited to a total of 1,600 the number of CPNCs the

City could issue, see Orleans Parish, La., Code of Ordinances § 162-186 (2004), was replaced

in toto in 2009 with provisions that eliminated the cap. Orleans Parish, La., Code of

Ordinances § 162-186 (2009).

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As the Hutton court explained, these features all are hallmarks of a

privilege rather than a property right.6 47 So. 2d at 668-69. Hutton noted, for

instance, that a CPNC “is in the nature of a personal privilege or license”

because it “may be amended or revoked by the power authorized to issue it.” Id.

at 668. Similarly, the fact that the City may limit “[t]he number of such

certificates to be granted over a particular route” evidences that CPNCs are

“issued for the purpose of promoting the public convenience and necessity, and

not for the purpose of conferring upon the holder any proprietary interest.” Id.

To be sure, as Plaintiffs argue, the City traditionally has permitted CPNC

holders to transfer their certificates for consideration. By so doing, the City

tacitly has contributed to the development of a secondary market wherein

CPNCs historically have attained significant value. This does not, however,

change our understanding of the fact that CPNC holders merely possess a

“license to participate in the highly regulated taxicab market [that] is subject to

regulatory change.” Minneapolis Taxi Owners, 572 F.3d at 509 (emphasis

added). Indeed, section 162-59 expressly states that CPNCs are privileges.7

Our conclusion is in accord with Minneapolis Taxi Owners. There, a group

of taxicab license holders challenged a Minneapolis ordinance removing that

city’s cap on the number of licenses it issued. Id. at 504. As here, licenses

6

As mentioned, Plaintiffs raise several objections to the City’s reliance on Hutton.

Their arguments related to the factual distinctions between the New Orleans and Baton Rouge

codes are well-taken. Moreover, to the extent the City argues that Hutton supports the

proposition that all CPNCs are personal privileges regardless of the attributes that might be

vested in them, we agree with Plaintiffs that the City overreads the case. Nevertheless,

Hutton’s articulation of the features of a CPNC, together with its discussion as to whether

those features equate to a privilege or a property right, is instructive.

7

While the holder of a privilege or license may be entitled to certain procedural due

process protections, Wells Fargo Armored Serv. Corp. v. Ga. Pub. Serv. Comm’n, 547 F.2d 938,

941 (5th Cir. 1977), here, Plaintiffs have challenged sections 162-59 and 162-321 under the

Takings Clause rather than the Due Process Clause. Moreover, we note that the Municipal

Code currently provides for notice and an opportunity to be heard for denials, suspensions, and

revocations of CPNCs. Orleans Parish, La., Code of Ordinances §§ 162-248, 162-249.

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granted by Minneapolis were transferrable and, because of the prior cap, a

secondary market had developed for their sale. Id. The plaintiffs therefore

argued that the ordinance removing the cap effected a regulatory taking, insofar

as it destroyed the market value of taxicab licenses. Id. at 507. The Eighth

Circuit rejected the plaintiffs’ argument, however, concluding that the heavily

regulated nature of the Minneapolis taxicab industry precluded the development

of a property right of the nature claimed by the plaintiffs. Id. at 508-09. In

particular, the court explained that Minneapolis always had held the authority

to alter the number of licenses it issued, and “[s]o long as the government retains

the discretion to determine the total number of licenses issued, the number of

market entrants is indeterminate.” Id. at 509 (alteration in original) (quoting

Members of Peanut Quota Holders Ass’n, Inc. v. United States, 421 F.3d 1323,

1334 (Fed. Cir. 2005)). Thus, the court held that because the city’s “highly

regulated taxicab market [was] subject to regulatory change,” any interest the

taxicab license holders possessed did “not extend to the market value of the

taxicab licenses derived through the closed nature of the City’s taxicab market.”

Id.

We similarly conclude that whatever interest Plaintiffs hold in their

CPNCs is the product of a regulatory scheme that also vests the City with broad

discretion to alter or extinguish that interest. Indeed, although Plaintiffs allege

that the April 2012 amendment to section 162-321 makes discretionary the

previously mandatory transfer approval process, we note that even under the

prior version of the ordinance, the City retained the right to impose various

preapproval requirements. See Orleans Parish, La., Code of Ordinances § 162-

321(3) (1995) (providing that “[t]he transferee shall submit an application for a

CPNC to the bureau and shall meet all requirements for same in this chapter”

(emphasis added)). In other words, even under the previous version of the

ordinance, a transferee’s ability to obtain a CPNC was bounded by the City’s

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regulatory framework—a framework that was subject to further change. Thus,

while Plaintiffs interpret the pre-amended version of section 162-321 to require

approval of CPNC transfers, the ordinance simply appears to have channeled the

discretion of the City officials approving CPNC transfers. Moreover, as a factual

matter, there is some dispute as to whether the amended version of section 162-

321 even alters the landscape surrounding transfers to any significant degree,

since the amendment also added a new subsection providing that the City “shall

approve the transfer upon the determination that the transferee meets the

qualifications of a CPNC holder under this chapter.”8 Orleans Parish, La., Code

of Ordinances § 162-321(6) (2012) (emphasis added).

Simply put, we are of the view that sections 162-59 and 162-321 merely

codify pre-existing law, which defined CPNCs as privileges subject to extensive

regulation. Although it is true that a secondary market has developed based on

the transferability of CPNCs, as we have explained, any resulting interest

Plaintiffs hold in their CPNCs has emerged from a regulatory framework that

itself allows the City to limit or revoke that interest. Such an interest does not

fall within the ambit of a constitutionally protected property right, for it

amounts to no more than a unilateral expectation that the City’s regulation

would not disrupt the secondary market value of CPNCs. See Roth, 408 U.S. at

577 (holding that a unilateral expectation does not constitute a constitutionally

protected entitlement); Peanut Quota Holders, 421 F.3d at 1334-35 (explaining

that holders of certain interests in heavily regulated areas “have no legally

protected right against the government’s making changes in the underlying

program and no right to compensation for the loss in value resulting from the

8

Of course, as Plaintiffs note, the new subsection also provides that “[n]o CPNC may

be transferred if suspension or revocation proceedings are pending with the bureau.” Orleans

Parish, La., Code of Ordinances § 162-321(6) (2012). There appears to be no question that this

is a new limitation on the transferability of CPNCs.

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changes”). Moreover, in light of this highly regulated environment, while

Plaintiffs have pointed to other evidence that purportedly suggests the

development of a custom by which the City treated CPNCs as property, the

current isolated nature of this evidence is insufficient to establish the type of

mutually explicit understanding necessary to create a protectable property right

under the Takings Clause. See Davis, 841 F.2d at 188-89.

Accordingly, on this record, we hold that the district court abused its

discretion in concluding that Plaintiffs demonstrated a substantial likelihood of

prevailing on their claim that sections 162-59 and 162-321 effected a regulatory

taking. We therefore vacate the district court’s order insofar as it granted

Plaintiffs’ motion for a preliminary injunction prohibiting enforcement of

sections 162-59 and 162-321.

B. Plaintiffs’ Appeal

As previously noted, Plaintiffs also allege that sections 162-59 and 162-321

constitute legislation impairing the obligation of contract. Plaintiffs therefore

sought, under that theory, a preliminary injunction prohibiting enforcement of

the ordinances. On appeal, Plaintiffs challenge the district court’s conclusion

that they did not demonstrate a substantial likelihood of prevailing on this

claim, and thus were not entitled to the preliminary injunction in connection

therewith. Plaintiffs also appeal the district court’s denial of their motion for a

preliminary injunction prohibiting enforcement of the Upgrade Ordinances.

These challenges will be addressed in turn, though we note at the outset that

“[t]he denial of a preliminary injunction will be upheld where the movant has

failed sufficiently to establish any one of the [necessary] four criteria.” Black

Fire Fighters, 905 F.2d at 65.

(1) Plaintiffs’ Impairment of Contract Claim

In connection with their impairment of contract claim, Plaintiffs allege

that sections 162-59 and 162-321 breach “contracts” between themselves and the

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government, and thus amount to an unconstitutional enactment of ex post facto

laws that interfere with those contracts. In essence, Plaintiffs contend that the

statutory scheme regulating the taxicab industry—as enacted by the City and

the State of Louisiana—constituted an offer to enter into the taxicab business,

subject only to certain clearly understood terms and conditions. Plaintiffs

further argue that by purchasing CPNCs, they accepted the offer and thereby

entered into binding contracts with the City and the State of Louisiana.

According to Plaintiffs, the regulations at issue breached those contracts, and

therefore constitute unconstitutional legislation impairing the obligation of

contract. For the reasons discussed below, we conclude that the district court

properly rejected this argument.

The statutory framework on which Plaintiffs rest their argument is

primarily found in Louisiana Revised Statutes sections 45:200.1 through

200.17—Louisiana’s Public Passenger Motor Vehicle Responsibility Law—and

section 33:4792. Section 45:200.1 declares “that the health, safety, morals and

welfare of the public make it imperative that effective, uniform, reasonable and

just supervision, regulation and control be exercised over the operation of” public

carrier vehicles. La. Rev. Stat. Ann. § 45:200.1. Section 45:200.3 mandates that

such vehicles cannot be operated until the owner receives a CPNC from the

applicable authority, and section 200.7 provides that the certificates “shall be

effective, and operation shall be permitted thereunder” so long as the holder

satisfies certain conditions. La. Rev. Stat. Ann. §§ 45:200.3, 200.7 (emphases

added). Finally, section 33:4792 declares that “[t]he economic viability and

stability of” privately operated for-hire vehicles is “a matter of statewide

importance.” La. Rev. Stat. Ann. § 33:4792.

Plaintiffs assert that they obtained and invested in their CPNCs in

reliance on these provisions. More to the point, Plaintiffs submit that these

statutes created an offer with clear terms and conditions that guarantees them

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the right to acquire and utilize their CPNCs, subject only to various conditions

with which they allegedly have complied. While acknowledging that the City

has the duty to protect the public and the taxicab industry by enacting

appropriate regulations, Plaintiffs contend that the City failed to do so in a

reasonable and just way, and commensurately neglected the important state

interest in the economic viability and stability of the industry. Ultimately,

Plaintiffs allege that in enacting sections 162-59 and 162-321, the City breached

the “contracts” created by this statutory framework and thereby violated Article

I, Section 10 of the United States Constitution, as well as Article I, Section 23

of the Louisiana Constitution—both of which prohibit the enactment of

legislation that impairs the obligation of contracts.

In advancing this argument, Plaintiffs rely on Russell v. Sebastian, 233

U.S. 195 (1914). There, the Supreme Court considered a provision of the

California Constitution of 1879, which granted “any individual, or any company

duly incorporated for such purpose . . . the privilege of using the public streets

and thoroughfares thereof, and of laying down pipes and conduits therein, and

connections therewith,” as necessary for supplying “illuminating light” or fresh

water. Id. at 198. In 1911, this provision had been amended to state that

“[p]ersons or corporations may establish and operate works for supplying the

inhabitants with such services upon such conditions and under such regulations

as the municipality may prescribe under its organic law.” Id. at 198-99.

Pursuant to this revision, the City of Los Angeles passed an ordinance requiring

utility providers to obtain a grant from the city prior to commencing the

excavation activities necessary for installing utility pipes and conduits. Id. at

199. The plaintiff challenged the ordinance and the constitutional amendment

under which it was promulgated, arguing that they impaired the obligation of

contracts formed prior to their enactment. Id. at 199-200.

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In addressing the plaintiff’s claim, the Sebastian Court explained that the

California Supreme Court previously had construed the 1879 constitutional

provision as a “direct grant” limited only by the requirements of the provision

itself. Id. at 203-04. Likewise, the state supreme court previously had explained

that the privilege contained therein could “be accepted by any person, or by any

company.” Id. at 204. Accordingly, the Court stated that “[w]hen the voice of

the state declares that it is bound if its offer is accepted, and the question simply

is with respect to the scope of the obligation, we should be slow to conclude that

only a revocable license was intended.” Id. Hence, the Court held that “the

grant, resulting from an acceptance of the state’s offer, constituted a contract,

and vested in the accepting individual or corporation a property right, protected

by the Federal Constitution.” Id.

As noted, Plaintiffs read Sebastian to support their conclusion that the

referenced statutory scheme created by the City and the State of Louisiana

constituted a contractual offer to enter into the taxicab business. Nevertheless,

their reliance on Sebastian is misplaced. First, unlike in Sebastian, no court has

declared the statutory scheme at issue here to constitute an offer. More

fundamentally, in contrast to Sebastian, the statutes on which Plaintiffs rely do

not contain an absolute grant related to the taxicab industry that may be

construed as a contract. Indeed, nothing in the statutes cited by Plaintiffs

demonstrates an intent on the part of the City or the State of Louisiana to

extend to those in the taxicab industry an offer of a contractual nature. See

U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1, 17 n.14 (1977) (“In general, a

statute is itself treated as a contract [only] when the language and

circumstances evince a legislative intent to create private rights of a contractual

nature enforceable against the State.”).

Accordingly, we conclude that there is no basis for finding that a contract

exists between Plaintiffs and the City or the State of Louisiana. The district

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court therefore did not abuse its discretion in holding that Plaintiffs failed to

demonstrate a substantial likelihood of establishing that sections 162-59 and

162-321 constitute legislation impairing the obligation of contract. Furthermore,

having so concluded, we may also dispose of Plaintiffs’ claim that the Upgrade

Ordinances impair contracts into which they have entered with the City and

State of Louisiana, as that claim necessarily depends, in the first instance, on

the presence of contracts. We therefore affirm the district court’s denial of a

preliminary injunction in connection with all aspects of Plaintiffs’ impairment

of contract claim.

(2) Plaintiffs’ Remaining Challenges to the Upgrade Ordinances

Plaintiffs also appeal, on other grounds, the district court’s conclusion that

they were not entitled to a preliminary injunction prohibiting enforcement of the

Upgrade Ordinances. Again, the ordinances included in this category: (1)

declare that certain vehicles may not be used as taxicabs, (2) require taxicabs to

maintain trip sheets for a two-year period, (3) place certain age limits on vehicles

used as taxicabs, (4) require taxicabs to have credit/debit card machines

equipped with Passenger Information Monitors that permit wireless

communication, (5) mandate that taxicabs be equipped with a security camera,

and (6) require taxicabs to be fitted with GPS devices.

(a) Background Discussion

The City asserts that the Upgrade Ordinances largely were enacted to

advance the City’s legitimate interest in ensuring the safety of its citizens and

visitors. The ordinance requiring credit/debit card machines, for instance,

purportedly was enacted based on the City’s perspective that taxicab drivers

would carry less cash if the machines were installed, and therefore would be less

likely targets of criminal activity. Likewise, the City introduced evidence that

the ordinance requiring security cameras was motivated by the City’s concern

for passenger and driver safety, as those involved in the taxicab industry often

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work alone, at night, and in high-crime areas, and cameras have been shown to

have a deterrent effect on crime.

The City also argues that its interest in the safety of taxicab riders and

drivers precipitated the ordinance that places an age limit of eleven model years

on vehicles used as taxicabs.9 More particularly, the City’s position is that newer

vehicles advance public welfare because they are equipped with modern safety

features such as multiple air bags and online diagnostic systems. Further, the

City also argues that the ordinance advances safety insofar as the diagnostic

systems alert a driver as to when a vehicle needs to be serviced, thereby helping

to prevent unexpected breakdowns.

Other evidence suggested that the Upgrade Ordinances also were enacted

to promote hospitality and tourism in New Orleans. The GPS requirement, for

example, ostensibly was based on the City’s desire to provide passengers with

efficient navigation and a means to ensure that taxicab drivers charge

passengers a proper fare. The ordinance mandating retention of trip sheets was

designed to provide the City with information about the operations of the taxicab

industry, including the number of passengers transported on a daily basis. City

officials further testified that trip sheets also help to ensure that drivers are not

illegally operating taxicabs.

Notwithstanding these arguments, Plaintiffs maintain that the Upgrade

Ordinances effect a regulatory taking, violate the Equal Protection Clause, and

constitute “excessive and unreasonable governmental regulation.”10 In

particular, Plaintiffs contend that the Upgrade Ordinances constitute a

9

As previously noted, the age limit is lowered to seven model years beginning January

1, 2014.

10

Although Plaintiffs also allege that the Upgrade Ordinances impair contracts created

by the regulatory framework surrounding the taxicab industry, we have, as explained, already

disposed of that claim.

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regulatory taking because they require taxicab owners and drivers to expend

considerable resources to comply with the ordinances’ requirements. Most

forcefully, Plaintiffs advance several arguments to support their claim that the

ordinances violate the Equal Protection Clause. First, they allege that the

ordinances requiring taxicabs operators to maintain trip sheets and to equip

their vehicles with credit/debit card machines, security cameras, and GPS

devices are not rationally related to a legitimate governmental purpose. Second,

Plaintiffs submit that the ordinance setting a maximum vehicle age violates the

Equal Protection Clause because it does not apply to other for-hire vehicles, and

there is no rational basis for such disparate treatment. Finally, Plaintiffs allege

that the ordinance placing an eleven-year age limit on taxicabs is not rationally

related to a legitimate governmental purpose but is, instead, “totally arbitrary.”

In challenging the vehicle age ordinance, Plaintiffs suggest that mileage is a

better and more accurate indicator of age than model year. This is especially

true, Plaintiffs argue, in cities like New Orleans—with a seasonal customer

base—since taxicabs in such areas average significantly fewer miles per year

than taxicabs in other major metropolitan areas.

(b) Analysis

Despite the compelling nature of the parties’ arguments, we are mindful

of the current posture of the case. It is not our role, in other words, to decide the

merit of these arguments.11 Rather, we must affirm the district court’s denial

of a preliminary injunction if Plaintiffs failed to satisfy any one of the required

criteria for obtaining such relief. Black Fire Fighters, 905 F.2d at 65. Here, the

11

We observe, however, that Plaintiffs have advanced a particularly forceful argument

that the City’s rational basis for section 162-613—the ordinance placing an eleven-year age

limit on vehicles used as taxicabs—is unclear.

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district court concluded that Plaintiffs failed to establish that they would be

irreparably injured by the denial of an injunction.12 We agree.

Plaintiffs have alleged that, in the absence of a preliminary injunction, the

significant costs of complying with the Upgrade Ordinances will cause

irreparable injury. In particular, they assert that, to achieve full compliance

with the ordinances, taxicab owners will be required to expend between $25,000

and $40,000. Moreover, in light of the new vehicle age limits, Plaintiffs contend

that over 60% of the taxicab industry will be required to replace their vehicles

by January 1, 2013—a burden, they submit, that many members of the industry

will be unable to meet.

The City takes issue with Plaintiffs’ facts. Specifically, it contends that

the evidence indicates that the cost of complying with the ordinances actually is

only about $2,000.13 Further, the City suggests to us that approximately 75% of

the City’s taxicab industry already is in compliance with the vehicle age

requirements.

Regardless of the dispute surrounding these allegations, however,

Plaintiffs’ argument is legally insufficient to establish that they would be

irreparably injured in the absence of an injunction. “Federal courts have long

recognized that, when ‘the threatened harm is more than de minimis, it is not

so much the magnitude but the irreparability that counts for purposes of a

preliminary injunction.’” Enter. Int’l, Inc. v. Corporacion Estatal Petrolera

Ecuatoriana, 762 F.2d 464, 472 (5th Cir. 1985) (emphasis added) (quoting Canal

Auth. v. Callaway, 489 F.2d 567, 575 (5th Cir. 1974)). It is thus well-established

12

Although the district court concluded that Plaintiffs also failed to satisfy all other

requirements for injunctive relief in connection with the Upgrade Ordinances, we express no

view on the remainder of the court’s analysis.

13

We note, however, that as Plaintiffs maintain, it appears that the City’s estimate

does not include the costs associated with acquiring newer vehicles.

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that an injury is irreparable only “if it cannot be undone through monetary

remedies.” Interox Am. v. PPG Indus., Inc., 736 F.2d 194, 202 (5th Cir. 1984);

see also Deerfield Med. Ctr. v. City of Deerfield Beach, 661 F.2d 328, 338 (5th Cir.

1981); Spiegel v. City of Houston, 636 F.2d 997, 1001 (5th Cir. 1981); Parks v.

Dunlop, 517 F.2d 785, 787 (5th Cir. 1975). “Mere injuries, however substantial,

in terms of money, time and energy necessarily expended in the absence of [an

injunction], are not enough. The possibility that adequate compensatory or other

corrective relief will be available at a later date, in the ordinary course of

litigation, [weighs] heavily against a claim of irreparable harm.” Morgan v.

Fletcher, 518 F.2d 236, 240 (5th Cir. 1975) (quoting Va. Petroleum Jobbers Ass’n

v. Fed. Power Comm’n, 259 F.2d 921, 925 (D.C. Cir. 1958)).

Here, the costs of complying with the Upgrade Ordinances, though

disputed at this juncture, can be ascertained with precision at a later hearing.

In other words, should Plaintiffs ultimately prevail on the merits of their suit,

they have recourse—in the form of subsequent civil suits against the City—to

recover the amounts they erroneously will have expended to comply with the

ordinances.14 Thus, because Plaintiffs only alleged harm can be obviated by

14

Contrary to the district court’s order, there is some question as to whether this would

be true of Plaintiffs’ impairment of contract claim. Compare Carter v. Greenhow, 114 U.S. 317,

322 (1885) (holding that “the only right secured” by the Contract Clause is the “right to have

a judicial determination declaring the nullity of the attempt to impair [the] obligation”), and

Crosby v. City of Gastonia, 635 F.3d 634, 640 (4th Cir. 2011) (“[R]ecourse to § 1983 for the

deprivation of rights secured by the Contracts Clause is limited to the discrete instances where

a state has denied a citizen the opportunity to seek adjudication through the courts as to

whether a constitutional impairment of a contract has occurred, or has foreclosed the

imposition of an adequate remedy for an established impairment. Section 1983 provides no

basis to complain of an alleged impairment in the first instance.”), with Dennis v. Higgins, 498

U.S. 439, 451 n.9 (1991) (explaining that the Supreme Court has given Carter “a narrow

reading” based on the nature of the Carter plaintiff’s pleading), and S. Cal. Gas Co. v. City of

Santa Ana, 336 F.3d 885, 887 (9th Cir. 2003) (holding that the deprivation of rights secured

by the Contract Clause may “give rise to a cause of action under section 1983” and that Carter

“is not to the contrary”). Nevertheless, we need not resolve the issue here, and we express no

view in connection with it. As we already have discussed, Plaintiffs failed to establish a

substantial likelihood of succeeding on the merits of their impairment of contract claim, and

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monetary relief, it does not constitute the “irreparable” injury necessary to

obtain the extraordinary relief of a preliminary injunction.15

Accordingly, we conclude that the district court did not abuse its discretion

in holding that Plaintiffs failed to demonstrate that they would be irreparably

injured by the denial of an injunction. We therefore affirm the district court’s

order insofar as it denied Plaintiffs’ request for a preliminary injunction

enjoining enforcement of the Upgrade Ordinances.

IV. CONCLUSION

In light of the foregoing, we VACATE the district court’s order insofar as

it granted a preliminary injunction; we AFFIRM that order insofar as it denied

a preliminary injunction; and we REMAND the case for further proceedings

consistent with this opinion. Plaintiffs shall bear the costs of this appeal. The

mandate shall issue forthwith.

it is on that basis that we affirm the district court’s denial of a preliminary junction.

15

We observe, for the sake of comprehensiveness, that Plaintiffs alleged in the lower

court that requiring them to install GPS devices, credit/debit card machines, and security

cameras violated their right to privacy. While the district court properly explained that this

allegation could form the basis of a claim of “irreparable injury,” see Deerfield, 661 F.2d at 338,

the court concluded that Plaintiffs did not have a substantial likelihood of succeeding on their

right to privacy claim. We need not address that issue here, however, as Plaintiffs have

waived or abandoned that claim on appeal by failing to address it in their briefs. See Al-Ra’id

v. Ingle, 69 F.3d 28, 31 (5th Cir. 1995) (“An appellant’s brief must contain an argument on the

issues that are raised, in order that we, as a reviewing court, may know what action of the

district court is being complained of.”).

27