Petition for Writ of Certiorari — Dykstra v. Automobile Club Club of New York (No. 07-1593)

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woo, 071593 WN 19 2008

OFFICE OF THE CLERK

IN THE Witiam K. Suter, Clerk

Supreme Court of the United States

GRETCHEN DYKSTRA, AS COMMISSIONER OF THE

DEPARTMENT OF CONSUMER AFFAIRS OF THE

CITY OF NEW YORK and THE CITY OF NEW YORK,

Petitioners,

AUTOMOBILE CLUB OF NEW YORK,

Respondent.

ON PETITION FOR A Writ OF CERTIORARI TO THE

UNITED STATES Court OF APPEALS

“ FOR THE SECOND CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

Of Counsel: MICHAEL A. CARDOZO

Corporation Counsel

of the City of New York

100 Church Street

New York, NY 10007

“Counsel of Record (212) 788-1080 or 1067

LEONARD J. KOERNER,*

LarRrRY A. SONNENSHEIN

Morpecal NEWMAN

Counsel for Petitioners

210004 cy

COUNSEL PRESS

800) 274-3321 * (800) 359-6859

QUESTION PRESENTED

Where this Court has held that in order to avoid

preemption under 49 U.S.C. § 14501(c)(1), a state or

municipal towing provision must be “genuinely

responsive to safety concerns,” and where this language

has heretofore been unanimously construed by the

Circuits to require a showing that the legislative intent

in enacting the provision under review was a genuine

response to safety concerns, rather than a pretextual

device for enacting economically related legislation, did

the Second Circuit err and create a split with the other

Circuits by requiring an additional evidentiary showing

that the provision under review is actually effective in

protecting safety, a standard which imposes an

unacceptable burden on states and municipalities

seeking to enact safety-related towing provisions?

TABLE OF CONTENTS

Page

QUESTION PRESENTED .................. i

pe @ te Oh ii

MOE MEE INDICES .. 2. cece sccess iii

TABLE OF CITED AUTHORITIES ......... iv

EE issn ecvcesesveecves l

od ig eek cece essese ss 2

STATEMENT OF THE CASE ..........<.... 2 |

TE IM og oe vc caccecsecsesvcs 2

B. Statement of Relevant Facts ........... 3

C. Federal Jurisdiction of District Court ... 11

am. Geeeerice Courts Opinion ............... 11

E. The Opinion of the United States Court

of Appeals for the Second Circuit ....... 12

REASONS FOR GRANTING THE PETITION .. 17

ER ee ee 30

lil

TABLE OF APPENDICES

Page

Appendix A — Opinion Of The United States

Court Of Appeals For The Second Circuit

Decwed March 24, DOUG... 5 ccc vedeccces la

Appendix B — Opinion And Order Of The United

States District Court For The Southern

District Of New York Dated March 24, 2006

TABLE OF CITED AUTHORITIES

Page

CASES

Ace Auto Body v. City of New York,

yi Gy ear Bee.) re 10

City of Columbus v. Ours Garage and

Wrecker Service,

GR eer ee errr ee passim

Cole v. City of Dallas,

$14 F.3d 730 (6th Cir. 200Z) .............. passim

Fife Enterprises v. Washington State Patrol,

113 Wn. App. 1011 (Wash. App. 2002) ....... 13

Galactic Towing, Inc. v. City of Miami Beach,

341 F.3d 1249 (11th Cir. 2003) .......... 19, 23, 24

Hunt v. Washington State Apple

Advertising Comm’n,

gk SS: . kB re re ree 28

Kessler Inst. for Rehab. v. Mayor and Council

of Borough of Essex Fells,

876 F. Supp. 641 (D. NJ 1995) ...°.......... 29

Loyal Tire & Auto Center, Inc. v.

Town of Woodbury,

445 F.3d 136 ( 2nd Cir. 2006) ........ 12, 13, 19, 20

Cited Authorities

Page

Sierra Club v. Morton, -

I I 8 Sasa ow epie ek wee 29

Tillison v. City of San Diego,

406 F.3d 1126 (9th Cir. 2005) ........... 13, 19, 25

Tillison v. Gregoire,

425 F'3d 1098 (9" Cir 2005) ............ 13, 19, 26

Tow Operators Working to Protect Their

Right to Operate on the Streets of Kansas

City v. City of Kansas City, Missouri,

338 F.3d 873 (8th Cir. 2003) ............ 13, 19, 24

U.S. v. Carolene Products,

ee EE obo o.0ox sven adoesvens 28

VRC LLC v. City of Dallas,

460 F.3d 607 (5th Cir. 2006) ............ 19, 22, 23

FEDERAL STATUTES

Pe Sra, UE ncn sa x cba oud Akeeees 2

Se Ada, PE 6 hndnedeciaesueekeeeee ce 1]

og eee Ber passim

GP US. § TRG RTC RRMA) 6 oo os on swcvntcss 10, 12, 18

Cited Authorities

Page

NEW YORK CITY ORDINANCES

Administrative Code § 20-495(d) ............ passim

OPINIONS BELOW

The judgment of the Court of Appeals for the Second

Circuit from which petitioners seek certiorari was

decided March 24, 2008. In its opinion, the Second

Circuit declared invalid the definition of “towing”

contained in New York City Administrative Code § 20-

495(d), and that enforcement of New York City tow

licensing requirements against tow trucks passing

through New York City or towing vehicles into New York

City is preempted by 49 U.S.C. § 14501(c)(1). The

opinion is reported at 520 F.3d 210 (2™ Cir. 2006), 2006

U.S. App. 6078, and appears in the Appendix at page

la.

On March 24, 2006, the United States District Court

for the Southern District of New York (Owen, U.S.D.J.)

found for respondent. That opinion and order (one

paper) is reported at 423 F Supp 2"! 279 (SDNY 2006)

and 2006 U.S. Dist. LEXIS 13583. It appears in the

Appendix at page 17a.

On November 3, 2006, the same Court awarded to

respondent the amount of $651,856 in attorneys’ fees,

plus $6,293 in expenses. That opinion and order is

reported at 2006 U.S. Dist. LEXIS 81414.

JURISDICTION

The Second Circuit issued its decree on March 24,

2008 (1a).! This Court has jurisdiction to review this

judgment under 28 U.S.C. § 1254.

STATEMENT OF THE CASE

A. Nature of Case

Respondent’s complaint, dated April 5, 2904, sought

a judgment declaring Title 20, Chapter 2, Subchapter

31 of the New York City Administrative Code

(Administrative Code”) “unlawful and invalid,” and

permanently enjoining the City from enforcing that

statutory scheme (A28-37). The complaint was appended

to an order to show cause seeking a temporary

restraining order and a preliminary injunction (A26).

Respondent sought a permanent injunction barring

enforcement of its tow licensing scheme on the following

grounds (A34-36):

1) the City’s licensing scheme is not a valid exercise

of the City’s “safety and regulatory authority” and is

thus preempted by § 14501(c) of the FAA Authorization

Act of 1994 and the ICC Termination Act of 1995

(“Tithe VI");

' Parenthesized numbers followed by the lower case letter

“a” refer to the pages of the Appendix of this Petition for a Writ

of Certiorari. Parenthesized numbers preceded by the capital

letter “A” refer to pages of the Joint Appendix filed in the Second

Circuit.

2) “(t]he force and effect of the Licensing Scheme

... is to regulate interstate commerce in violation of...

the United States Constitution”;

3) the Licensing Scheme “restricts the ability of

plaintiff to provide services to members within the State

of New York” and “is not necessary for the proper

regulation of plaintiff’s activities,” thus violating N.Y.

General Municipal Law, which bars the City from

discriminating against non-residents.”

B. Statement of Relevant Facts

The provisions of law challenged in plaintiff’s

complaint are codified in New York City Administrative

Code §§ 20-495 through 20-528. These provisions

include § 20-495(d), which states: “Towing shall mean

the driving or other operation of a tow truck, or the

offering to transport a vehicle by means of a tow truck.”

In the decision from which we petition for certiorari,

the Second Circuit found the foregoing provision to be

preempted by 28 U.S.C. § 14501(c)(1).

The challenged provisions were added by New York

City Local Law 28 of 1987, which transferred

administrative authority over vehicle towers from the

New York City Police Department to the City’s

Department of Consumer Affairs and set forth a

° The District Court did not rule on any ground relating to

the N.Y General Municipal Law (“GML’). Nor did respondent

assert any such ground in its appellee’s papers submitted in

the appeal below, and the Second Circuit had no oceasion to

consider the claim. Accordingly, the alleged violation of GML

does not constitute a basis for affirming the decision: below.

comprehensive new regulatory scheme regarding the

towing of vehicles in New York City.

The clear and explicit intent of the New York City

Council in promulgating Local Law 28 was to promote

public safety. A statement of legislative intent issued by

the City Council stated as follows (A2155):

The council finds that the licensing and

regulation of the towing industry continues

to serve the purpose of protecting the public

from over-reaching by certain members of the

towing industry and from reckless conduct of

certain such members which can threaten life

and property.

The council finds that it has been a

persistent and widespread practice of tow

truck operators to monitor police radio

transmissions to learn of accidents and then

race to accident sites with the intent of

securing the towing and repair work. In so

doing, speed limits and other traffic

regulations are often violated, often posing a

substantial threat to life and property... .

The council finds further that that in order

to discourage tow operators from racing to

an accident scene, it 1s necessary to prohibit

such operators from soliciting at the accident

scene and from maintaining in the course of

their business radios capable of receiving

police signals or messages. |Emphasis

added. |

The hazards of “chasing,” 7.e., towers’ practice of

racing to an accident site to solicit business, were

further described in a report submitted to the City

Council in support of the legislation by the Mayor's

legislative representative to the City Council, dated

February 25, 1987, which stated (A2014):

A primary objective of this legislation is

to eliminate the practice endemic to the tow

industry, of monitoring police radio

transmissions in order to learn of accidents

and then race to the scene to secure towing

and repair work — a practice commonly known

as “chasing.”...

The hazards and dangers of chasing are

many. That chasing imperils both pedestrian

and vehicular safety is clear: tow trucks racing

to accident sites often exceed lawful speed

limits and ignore traffic laws, behavior that

all too often results in tragic injury to

pedestrians and other motorists. There have

even been innocent bystanders killed by

reckless tow trucks chasing jobs. By the same

token, the conditions that encourage chasing

—namely, the currently lawful ability to monitor

police radio transmissions and solicit work on-

scene — also deprive consumers of adequate

protections. Accident victims are often injured

and under great stress; they are not well-

equipped to evaluate in a critical way the

quality of service offered by whichever tow

company has happened to arrive at the scene

first. The current system leaves room for

unscrupulous tow operators and owners to

take advantage of a captive, often stranded

audience.

The law was amended in 1993 (A2161) and 1994

(A2193) to enhance enforcement mechanisms and to

better address the dangers of tow trucks chasing to

accident scenes. The rules are designed to protect

vulnerable stranded drivers from coercive or predatory

conduct by tow drivers and operators. The law explicitly

exempts from the licensing requirements certain

enumerated towing services that are not offered to the

general public, e.g., tows performed by governmental

agencies, public utilities, vehicle dismantlers, bus and

car service companies, and vehicle rental companies.

Tow truck operators and the drivers employed by them

must obtain licenses from the New York City Department

of Consumer Affairs (“DCA”) after meeting

requirements addressed to safety and financial

responsibility. Using fingerprints, DCA investigates the

criminal histories of applicants, a majority of whom do

have criminal records, and receives contemporaneous

arrest reports for all applicants and licensees. Applicants

to operate tow businesses must furnish proof of

adequate liability insurance for b: th personal injury or

death and property damage. Licensees must notify DCA

as to the cancellation or modification of any required

liability insurance policy. In order to ensure that

operators are able to pay any consumer restitution

awards or fines related to their towing services, they

must furnish to DCA a $5,000 bond or make a $200 cash

contribution to the Tow Truck Industry Trust Fund.

DCA verifies that all applicants to be tow truck drivers

have New York State tow driver’s licenses in good

standing. DCA receives contemporaneous notification

from New York State’s Department of Motor Vehicles if

a licensee’s driving license is suspended or revoked at

any time during the license period. Every tow truck must

be in compliance with New York State registration and

inspection requirements for their class of commercial

vehicles. As a consumer protection measure, tow trucks

are required to display certain identifying information,

as well as their DCA medallion and the DCA complaint

phone number, on the trucks themselves. The regulatory

scheme further requires compliance with certain

reporting and recordkeeping requirements designed to

ensure licensee accountability.

In the course of considering the 1993 amendments,

the New York City Council Committee on Consumer

Affairs, after holding a hearing, found inter alia, in a

report on Local Law 10 (A2164):

2. Consumers are not routinely provided

with timely, accurate or necessary information

regarding their rights when they attempt to

retrieve their vehicle, and are subject to being

“held up” for outrageous overcharges in order

to obtain their vehicle.

The 1994 amendments included what was to become

Administrative Code § 20-493(d), 7.e., the provision that

defined “towing” as the driving of a tow truck unless

that truck is otherwise exempt from the City’s licensing

scheme. That the express purpose of this amendment

was to prevent “chasing” was made clear by the report

by the New York City Council Committee on Consumer

Affairs in support of Local Law 112, issued on December

21, 1993, following a hearing. The report stated in

relevant part (A2189):

Since its enactment in 1987, DARP [an

accident management program] has been

unable to eliminate the problem of “chasing”

that continues to plague the streets of the city

of New York. According to the Mayor’s

Memorandum in Support of this legislation,

this problem involved the reckless and

pervasive practice of many tow truck

operators who learn of accidents by illegally

monitoring police radio frequencies, and then

race to accident scenes in disregard of speed

limits and other traffic regulations in order

to secure towing and repair work. Although

under current law soliciting a tow or repair

job at an accident scene is prohibited, if a

tower can convince the person in charge of a

vehicle to tell the police that he or she called

the tower to the scene, these prohibitions can

be circumvented. ...

The principal changes which Proposed

Int. No. 602-A will make to existing law are as

follows: ... (8) the definition of towing will be

broadened to encompass any use of a tow

truck not covered by a specific exception. ...

Similarly, a letter to the City Council by Frank T.

New, the Mayor’s Director of City Legislative Affairs,

recommending “the earliest possible favorable

consideration” of the amendment legislation, cited

“chasing” as the main hazard the amendments were

designed to address. The memorandum stated (A2197):

Section 20-495 is amended to more clearly

define what towing activity is and what

vehicles will be considered tow trucks. The

result is to clarify what types of business and

vehicles require licensing pursuant to Section

20-496...

The main goal of this bill is to end accident

causing high speed “chasing” to accident

scenes by tow truck drivers. In 1987, the

Council enacted Local Law 28. The law

created the Directed Accident Response

Program (DARP). Those towers in the

program rotate within a particular zone. Non-

DARP towers have circumvented the system

by the use of police radio frequencies and by

soliciting tow jobs at the scenes of accidents.

Because the non-DARP participants learn

about the accidents as they happen, they are

often the first ones at the accident scene. In

order to be the first at the accident scene, it

is most likely that the non-DARP tower has

violated speed limits and various traffic

regulations, thus posing a substantial threat

to life and property. Meanwhile, the DARP

tower is awaiting proper dispatch by the Police

Department’s DARP operator before it can

attend to the accident scene. Unless there are

injuries at the accident scene, a police car may

not be able to show up at the accident scene

for some time. By the time the police and/or

the DARP tower appears, the non-DARP

tower has illegally solicited the tow job and

convinced the motorist to state that the tower

was actually called by that motorist. This bill

will end the dangerous practice of chasing,

which leads to accidents.

Thus, the enactment of Administrative Code § 20-

495(d) -— “Towing shall mean the driving or other

operation of a tow truck, or the offering to transport a

vehicle by means of a tow truck” — was expressly directed

at chasing as part of an overall scheme designed for the

protection of life and property. It is one safety provision

within a larger frame work designed to promote the

safety of the towing consumer in many respects.

In 1999, a group of towers challenged the regulatory

scheme as preempted by Title VI. Title VI generally

prohibits state or municipal *egulation of the “price,

route, or service of any motor carrier ... with

respect to the transportation of property.” 49 U.S.C.

§ 14501(c)(1). However, one of the enumerated

exceptions to this prohibition allows the local regulation

of motor carrier transportation with respect to public

safety and to insurance and financial responsibility

requirements. 49 U.S.C. § 14501(c)(2)(A). Upon review

of the entire regulatory scheme, both the District Court

for the Southern District of New York and the Court of

Appeals for the Second Circuit reviewed and upheld the

City’s tow regulations as not preempted by Title VI.

Ace Auto Body v. City of New York, 1997 US Dist. LEXIS

16679 (SDNY 1997), aff’d, 171 F.3d 765, 775-76 (2d Cir.),

cert. denied, 528 U.S. 868 (1999).

C. Federal Jurisdiction of District Court

The District Court had jurisdiction of the original

action herein pursuant to 28 U.S.C. § 1331.

D. District Court’s Opinion

Following a bench trial, the United States District

Court for the Southern District of New York (Owen,

U.S.D.J), by opinion and order (one paper) dated March

24, 2006, found in favor of the respondent (17a). In so

doing, the District Court declared void Administrative

Code § 20-495(d), which defines “towing” to include “the

driving or other operation of a tow truck... .””

The District Court held, inter alia, that the

provision prohibiting “legitimate tow trucks from

elsewhere from entering New York City to pick up a

tow or deliver a tow or drive through New York City” is

precluded by 49 U S.C. § 14501(c)(1),* which generally

preempts state and local regulation of intrastate and

interstate towing. Although 49 U.S.C. § 14501(c)(2)(A)

preserves from preemption “the safety regulatory

authority of a state with respect to motor vehicles,” as

well as “the authority of a State to regulate motor

carriers with regard to minimum amounts of financial

3 The District Court also indicated that it might find certain

other provisions of Title 20, Chapter 2, Subchapter 31 of the

Administrative Code to be uniawful (SA14). Nonetheless, the

District Court made no subsequent ruling on any other aspect

of the City’s towing «heme.

* In an apparent error, the reported opinion gives the

statute cited as 49 U.S.C. § 14501(a)(1).

responsibility relating to insurance requirements,” the

District Court found that in the absence of any statistical

study showing concretely that the towing ordinances

have had “any impact on the safety of consumers,” the

City had failed to overcome federal preemption (25a).

E. The Opinion of the United States Court of

Appeals for the Second Circuit

By opinion and order (one paper) dated March 24,

2008, the U.S. Court of Appeals for the Second Circuit

affirmed the decision of the District Court, finding that

the City’s definition of “towing” in Administrative Code

§ 20-495(d) is preempted by 49 U.S.C. § 14501(c)(1). The

Court held that “[e]nforcing the Scheme against tow

trucks passing through New York City or towing

vehicles into New York City does not respond to safety

concerns and does not fall within the safety exception

of 49 U.S.C. § 14501(¢)(1)” (15a).

In reaching this outcome, the Second Circuit relied

on its own prior decision in Loyal Tire & Auto Center,

Inc. v. Town of Woodbury, 445 F.3d 136 ( 24 Cir. 2006),

the opinion in which the Second Circuit first construed

this Court’s holding in City of Columbus v. Ours Garage

and Wrecker Service, 536 U.S. 424 (2002). The Ours

Garage opinion stated that to avoid preemption under

the public safety exception of 49 U.S.C. § 14501(c)(2)(A),

a State or municipal law must be “genuinely responsive

to safety concerns.” 536 U.S. at 442. Like other courts,

both federal and state, that have ruled under Ours

Garage,’ the Second Circuit held in Loyal Tire that a

showing of genuine responsiveness requires a

demonstration of appropriate “legislative intent and

purpose”. 445 F.3d at 145. Unlike the other circuit courts

that have considered this issue, however, the Second

Circuit understood the phrase “genuinely responsive”

to require a showing that the legislation in question is

actually effective in protecting safety. Jd. at 146

(“In addition to considering the expression of legislative

intent in the statute itself and the legislative history,

we must assess the three specific ways in which

Woodbury argues that its ‘one-mile’ radius rule is

genuinely responsive to safety concerns”).

Following the guidelines set forth in Loyal Tire, the

Second Circuit, in the instant case, first considered the

legislative intent underlying the promulgation of

Administrative Law § 20-495(d). The court readily

acknowledged the safety objectives that prompted the

enactment of the City’s overall regulatory scheme

governing towing, particularly the intention to eliminate

“chasing.” The Second Circuit stated (10a):

The record indicates that the Scheme was

enacted to prevent chasing. The Office of the

Mayor noted that the “primary objective” of

® See Tillison v. Gregoire, 424 F3d 1093 9" Cir. 2005);

Tillison v. City of San Diego, 406 F3d 1126 (9% Cir. 2005);

Galactic Towing, Inc. v. City of Miami Beach, 341 F3d 1249

(11 Cir. 2003); Tow Operators Working to Protect Their Right

to Operate on the Streets of Kansas City v. City of Kansas City,

Missouri, 338 F3d 873 (8 Cir. 2003); Cole v. City of Dallas, 314

F3d 730 (5 Cir. 2002), Fife Enterprises v. Washington State

Patrol, 113 Wn. App. 1011 (Wash. App. 2002).

Local Law 87-28 “is to eliminate the practice,

endemic to the tow industry, of monitoring

police radio transmissions in order to learn of

accidents and then race to the scene to secure

towing and repair work — a practice known as

‘chasing.’” ... Chasing “imperils both

pedestrian and vehicular safety” and “too

often results in tragic injury to pedestrians

and other motorists.” Jd. The City Council’s

declaration of legislative intent concurred,

noting that the “reckless conduct” inherent

in chasing “can threaten life and property.”

Moreover, the law authorized DCA to refuse

to renew, suspend or revoke a towing license

where the driver operated a truck in a

“grossly negligent manner,” made a material

false statement on an application, engaged in

fraud, failed to pay a fine, was convicted of a

crime having a “direct relationship to the

ability to perform licensed activities,” or

engaged in conduct that would “endanger the

public.” Jd.

With regard to the enactment of Administrative

Code § 20-495(d), however, the Second Circuit

acknowledges the express objective of the provision only

to the extent of quoting the statement of Frank T. New,

the Mayor’s Director of City Legislative Affairs, that

the purpose of the provision was to “fill{] existing

loopholes that undermined the DARP program” (A2199).

Curiously, the Second Circuit avoided noting that

purpose of the proposed 1994 amendments, which

included the provision that became § 20-495(d), was

stated in the same report, under the heading

“REASONS FOR SUPPORT,” as follows: “The main

goal of this bill is to end accident causing high speed

‘chasing’ to accident scenes by tow truck drivers”

(A2199).

The Second Circuit proceeded to state (1la-12a):

Aithough the record is replete with

evidence that the City sought to curb a public

safety risk by carefully regulating tow trucks

engaged in chasing, the legislative history

does nothing to explain whether the City

Council intended to subject all tow trucks

passing through the City to its Scheme or why

such broad regulation was necessary. The City

may have been motivated by a desire to reduce

chasing within New York City in broadening

the definition of “towing,” but it did not

explain why increased enforcement was

insufficient.

The Second Circuit’s uncertainty as to “whether the

City Council intended to subject all tow trucks passing

through the City to its Scheme” is puzzling. There is no

ambiguity in the language of 20-495(d) providing that

“{t]owing shall mean the driving or other operation of a

tow truck, or the offering to transport a vehicle by means

of a tow truck.” The Second Circuit opinion nowhere

suggests what this language could possibly mean other

than that all tow trucks being driven within City limits

are subject to the City’s regulatory scheme, including

the licensing requirements applicable to all towers.

As to the Second Circuit’s observation that the

City Council failed to demonstrate why § 20-495(d) was

necessary for preventing chasing, that concern goes not

to whether the City Council was “genuinely responsive”

to the dangers posed by chasing, but rather whether

the form that such responsiveness took was effective in

achieving its purpose. In this respect, the Second

Circuit, as already noted, adopted a far more expansive

approach to the holding of Ours Garage than had

previously been adopted by any other circuit court,

placing unprecedented obstacles in the path of any

municipality that wishes to enact safety legislation

related to towing. The Second Circuit deemed as

dispositive its perception that “the City has not

presented any evidence to support [the contention that

its towing regulations have improved public safety],

relying exclusively on the Scheme’s legislative history

to demonstrate that the City Council and the Mayor

were motivated by a desire to make New York City safer.

As noted by the district court, the City has never

assessed the effectiveness of the Scheme in fighting

chasing. Multiple amendments so soon after it

enactment suggest that it was not strongly effective

...” (18a).

Based on these considerations, the Second Circuit

affirmed the judgment of the District Court, invalidating

the City’s definition of towing under Administrative

Code § 20-495(d), and prohibiting regulatory

enforcement against tow trucks passing through the City

or towing vehicles into the City, as preempted by

49 U.S.C. § 14501(c)(1).

REASONS FOR GRANTING THE PETITION

The Second Circuit’s decision holds that in the

absence of an evidentiary demonstration of

effectiveness, Administrative Code § 20-495(d), as well

as any enforcement conducted pursuant to that

provision against tow trucks passing through the City

or towing vehicles into the City, cannot be deemed

“genuinely responsive” to the hazards of chasing or to

other safety concerns. None of the other Circuits that

have considered whether particular state or municipal

towing regulation were preempted by 49 U.S.C.

§ 14501(c)(1) have required as prerequisite for escaping

preemption a showing of the contested law’s actual

efficacy in protecting safety. The other Circuits have

instead looked to whether the record evidence indicated

any non-safety-related motive, particularly any economic

motive, for the contested law. In the decision below, the

Second Circuit cited no record evidence that the safety-

directed objective of § 20-495, and of the enforcement

practices deemed to be preempted, was actually a

pretext for legislation designed for the City’s economic

benefit, or for any purpose other than the protection of

public safety.

As a result, the Second Circuit’s decision stands in

stark conflict with the unanimous approach of the other

Circuits. Moreover, as will be shown, the decision, if

universally applied, would place in jeopardy virtually all

safety-related regulation governing towing.

The decision of this Court in which the Second

Circuit purports to find authority for its preemption

finding is City of Columbus v. Ours Garage, 536 U.S.

424 (2002). In Ours Garage, this Court opined that

“Congress’ clear purpose in [49 U.S.C.] § 14501(c)(2)(A)

is to ensure [] its preemption of States’ economic

authority over motor carriers of property, § 14501(c)(1),

‘not restrict’ the preexisting and traditional state power

over safety.” Jd. at 439. Expanding on the importance

of preserving the right of states and municipalities to

regulate the safety aspects of towing, as distinct from

the preempted authority to regulate the economic

aspects of the towing industry, this Court stated further,

id. at 440:

[Congress’s] declarations of deregulatory

purpose, however, do not justify interpreting

through a deregulatory prism “aspects of the

State regulatory process” that Congress

determined should not be preempted.

[Emphasis in original.]

A congressional decision to enact both a

general policy that furthers a particular goal

and a specific exception that might tend

against that goal does not necessarily call for

the narrowest possible construction of the

exception. [Emphasis added.} Such a

construction is surely resistible here, for

§ 14501(c)(1)’s preemption rule and

14501(c)(2)(A)’s safety exception to it do not

necessarily conflict. The problem to which the

congressional conferees attended was “state

economic regulation”; the exemption in

question is for state safety regulation. .. .

{Emphasis in original].

Consistent with this analysis, this Court concluded

that “{ljocal regulation of prices, routes, or services of

tow trucks that is not genuinely responsive to safety

concerns garners no exemption from § 14501(c)(1)’s

preemption rule.” /d. at 441.

Guided by the precepts stated in Ours Garage,

circuit courts other than the Second Circuit have

unanimously affirmed the validity of every towing law

for which they reviewed a preemption challenge.

See VRC LLC v. City of Dallas, 460 F.3d 607 (5" Cir.

2006); Tillison v. Gregoire, 424 F.3d 1093 (9 Cir. 2005);

Tillison v. City of San Diego, 406 F.3d 1126 (9" Cir. 2005):

Galactic Towing, Inc. v. City of Miami Beach, 341 F.3d

1249 (11 Cir. 2003); Tow Operators Working to Protect

Their Right to Operate on the Streets of Kansas City v.

City of Kansas City, Missouri, 338 F.3d 873 (8" Cir.

2003); Cole v. City of Dallas, 314 F.3d 730 (5" Cir. 2002).

The Second Circuit broke this pattern when, in Loyal

Tire & Auto Center, Inc. v. Town of Woodbury, 445 F.3d

136 (2™' Cir. 2006), it became the only circuit court to

interpret Ours Garage as requiring not only a

consideration of the “the expression of legislative intent

in the statute itself and the legislative history,” 445 F.3d

at 146, but an assessment of whether the challenged

provision is “genuinely safety-related” [emphasis

added]. /d. at 147. The same criteria dictated the Second

Circuit’s determination in the instant case.

The transformation of the relevant test from that

stated in Ours Garage, i.e., whether the challenged

provision is “genuinely responsive to safety concerns,”

to whether the provision is “genuinely safety-related”

is subtle but significant. The “genuinely responsive”

standard gees to whether the law at issue resulted from

the legislature’s good faith intention to address a public

safety concern rather than simply to engage in economic

control. The “genuinely safety-related” standard, at

least as applied by the Second Circuit, entails an

assessment of the law’s efficacy as a safety measure.

Looking to its precedent in Loyal Tire, the Second

Circuit applied that test in the instant case. Crucial to

the Second Circuit’s decision in this case was its

emphasis on the lack of evidence related to effectiveness:

“As noted by the district court, the City has never

assessed the effectiveness of the Scheme in fighting

chasing” [emphasis added] (18a).

It is unlikely that any of the laws considered by the

other circuit courts would have withstood preemption

had those courts applied the criteria of the Second

Circuit. The first decision by a circuit court applying

the preemption criteria stated in Ours Garage was the

Fifth Circuit’s opinion in Cole v. City of Dallas, 314 F3d

730 (5" Cir. 2002). The Fifth Circuit upheld as exempt

from preemption a body of regulation related to the

criminal histories of tow truck operators in Dallas. These

regulations were enacted pursuant to an ordinance

stating that, id. at 735:

The city council believes that the proposed

safety-related regulations for non-consensual

tows would promote the public safety of both

visitors and residents of the city of Dallas by

contributing to a decrease in the potential for

confrontation and violence between vehicle

owners and the persons who tow their

vehicles: a decrease in bodily injury and

property damage caused by faulty tow truck

vehicles and equipment or by incompetent,

negligent and criminal actions of tow truck

operators and drivers.

This statement is indistinguishable in significance

from language in the report of the New York City

Council’s Committee on Consumer Affairs

recommending adoption of the 1994 amendments

including the provision that became Administrative Law

§ 20-495(d). As the rationale for its support, the

Committee noted that the City’s Directed Accident

Response Program (“DARP”) had thus far “been unable

to eliminate the problem of ‘chasing’ that continues to

plague the streets of the City of New York” (A2189).

The safety purpose underlying the amendments is

further made manifest by Memorandum in Support

submitted to the City Council by the Mayor’s Director

of Legislative Affairs, Frank T. New. That memorandum

asserts that “[t]he legislation fills existing loopholes

which have served to undermine the DARP program”

(A2199). It further states categorically: “The main goal

of this bill is to end accident causing high speed ‘chasing’

to accident scenes by tow truck drivers. .. . This bill will

end the dangerous practice of chasing, which leads to

accidents.”

Based on documentation comparable to that deemed

insufficient in the instant case, the Fifth Circuit stated

in Cole: “That the criminal history regulation has, at its

core, concern for safety is manifest.” 314 F.3d at 735.

The court noted, moreover, that the plaintiff tower “has

raised no argument pointing to some hidden pretextual

economic goal behind the provision.” Jd. The same is

true in the instant case. By contrast to the Second

Circuit, however, the Fifth Circuit conducted no inquiry

into the efficacy of the regulatory scheme under

consideration. As a result, the Cole decision is based on

a record that would have been deemed by the Second

Circuit insufficient to avoid preemption.

Similarly, in a subsequent case, the Fifth Circuit

again found a Dallas towing ordinance to be exempt from

preemption. VRC LLC v. City of Dallas, 460 F.3d 607

(5“ Cir. 2006). “The challenged ordinance .. . require[d]

that signs warning of the threat of towing be posted on

private property when, and for twenty-four hours

before, a vehicle is towed without the vehicle owner’s

consent.” Jd. at 608-09. Based on “evidence show|ing!

that the Dallas City Council considered the possibility

of violent confrontation between unwarned vehicle

owners and tow truck drivers a safety issue and found

that a requirement that signs be placed and maintained

would help remedy the problem,” the Fifth Circuit

inferred a legislative intent genuinely responsive to

safety concerns. 7d. at 615. While the Fifth Circuit

decision took note that “a city administrator testified

from his experience that there was a real problem with

confrontation between citizens and tow truck drivers,

and that the signs had been helpful,” such testimony is

not, in itself, anything more than conclusory. /d.

It provides no more evidence of actual effectiveness in

protecting public safety than was present in the instant

case.

In addition, the Fifth Circuit speculated that

“the signs could prevent drivers from parking where

they were at risk of being towed, help to defuse the

anger of some who were actually towed, and as the city

administrator testified and the ordinance preamble

noted, reduce the drain on police resources caused by

false stolen car reports.” Jd. Such considerations have

no more evidentiary basis than the common-sense

conclusion to be drawn in the instant case that

prohibiting the unlicensed driving of a tow truck within

New York City will serve as a deterrent against towers

who would come into the City intending to engage in

chasing. None of the evidence considered by the Fifth

Circuit in VRC LLC is the basis for a concrete

assessment of efficacy in protecting safety. That the

Second Circuit declined to exempt the City from

preemption based on evidence no more speculative than

that before the Fifth Circuit reflects a split between the

two Circuits.

In Galactic Towing, Inc. v. City of Miami Beach,

341 F.3d 1249 (11 Cir.2003), the Eleventh Circuit

reviewed a preemption challenge to a municipal

ordinance imposing various permit requirements on

towing businesses. In determining that the ordinance

escapes preemption, the Eleventh Circuit focused

primarily on legislative intent as reflected in the text of

the ordinance itself, as follows: “The city commission finds

and determines that that the unauthorized parking of

vehicles that cannot be removed constitutes a public

nuisance and public emergency effecting [sic] the

property, public safety and welfare of the citizens and

residents of the city.” Jd. at 1253. The Fifth Circuit found

this entirely conclusory language to be satisfactory proof

that the intent of the Miami legislative body was to

adcress safety concerns. This language is no more

informative as to the actual effectiveness of the

ordinance in maintaining safety than is the statement

by the New York City Council’s Committee on Consumer

Affairs indicating that the revised definition of towing,

among other provisions, was intended to address the

dangers of chasing.

Moreover, the Eleventh Circuit noted that “the City

offered affidavits from two City officials . . . containing

relevant information on how the challenged sections of

the City’s towing ordinance affect safety concerns”

(emphasis in original). Jd. The Fifth Circuit’s italicized

use of the phrase “safety concerns” rather than merely

“safety,” reflects a focus on the legislative body’s

intention, 7.e., its “concerns,” rather than on whether

safety is effectively achieved, which is outside the scope

of the court’s inquiry. Administrative Code § 20-495(d),

which has the effect of limiting the operation and driving

of a tow truck within New York City to individuals who

have undergone the screening for suitability that is part

of the licensing process, likewise has an obvious

connection with the City Council’s “concerns” that

chasing be controlled. But unlike the Eleventh Circuit,

the Second Department insisted on a showing of

“effectiveness.” The divergent outcomes in Galactic

Towing and the instant case again reflects a split in the

Circuits.

The Second Circuit likewise splits with the Fight

Circuit’s decision in Tow Operators Working to Frotect

Their Right to Operate on the Streets of Kansas City v.

City of Kansas City, Missouri, 338 F.3d 873 (8 Cir.

2003). In that case, the challenged ordinance rendered

it “unlawful for the owner or operator to . . . stop or

proceed to the scene of an accident unless called to the

scene, requested to stop, or flagged down by the owner

or operator of a vehicle involved in an accident or

requested to perform the service by a law enforcement

officer. .. .” Jd. Noting the invocation in Ours Garage of

the presumption against federal preemption of state

police powers, 5386 U.S. at 482-33, the Eighth Circuit

accepted the municipality’s “facially plausible[],

assertion of a genuine safety purpose.” The

responsiveness to safety concerns found by the Eighth

Circuit was no more “facially plausible” than New York

City’s contention in the instant case that limiting the

driving of tow trucks within city limits to operators whose

criminal history has been reviewed and who can be

subject to having their towing license removed by DCA

deters towers from engaging in chasing.

Like the Fifth Circuit, the Ninth Circuit has twice

upheld challenged towing provisions as being exempt

from preemption. The California state statute under

review in Tillison v. City of San Francisco, 406 F.3d

1126 (9 Cir. 2005), “provides that when a towing

company tows a vehicle from private property without

the vehicle owner’s permission, the company must obtain

written authorization from either the property owner

or the property owner’s agent,” and further “requires

that the property owner or agent be present for the

tow.” Jd. at 1127. The Ninth Circuit found that intent

responsive to safety concerns, as opposed to economic

concerns, could be gleaned from conclusory legislative

language simply stating that the procedures mandated

by the law would “further the safety of the public.”

Id. at 1129-30. Although the court looked favorably on

speculation by the District Court as to how the provision

was “safety-related,” nothing considered by the District

Court consisted of concrete evidence of the law’s

effectiveness. Jd. at 730-31. What primarily guided the

Ninth Circuit was the principle that “the focus of the

safety exception to preemption must be on the legislative

intent and whether the legislature was acting out of

safety concerns.” Jd. at 1129. Critically, in contrast to

the Second Circuit, the Ninth Circuit was in no way

deterred by the absence of any concrete evidence that

the law was actually effective in protecting safety.

Shortly after the prior decision, the Ninth Circuit

upheld, as responsive to safety concerns, another towing

law challenged by the same plaintiff. Tillison v. Gregoire,

424 F.3d 1093 (9" Cir. 2005). The challenged law prohibits

towers from towing vehicles illegally parked on private

property unless the tower has a written authorization

signed either by the property owner or by the public

official requesting the tow. Jd. at 1096-97. As in its earlier

review of a challenge to a towing law, the Ninth Circuit

focused on whether the state legislature had public

safety in mind when enacting the provision, not whether

the provision was actually effective. Based on the same

legislative language ruled dispositive in the prior

Tillison case, the Ninth Circuit again upheld the

challenged towing provision as exempt from

preemption.

The standard for exemption from preemption that

is now the rule in the Second Circuit — as distinct from

the standard applied by the Fifth, Eighth, Ninth, and

Eleventh Circuits — will, if carried to its logical conclusion,

render unenforceable virtually any safety-related towing

ordinance that comes up for review. Once a municipality

is required to demonstrate the actual effectiveness of a

law in order to evade preemption, there is nothing to

prevent a preemption challenge after a provision has

been enacted but before the municipality has had the

opportunity to accumulate a record of enforcement

sufficient to show safety-related results.

Moreover, by the Second Circuit’s criteria, any

legislative effort to enhance the effectiveness of a safety-

related statutory scheme by amending it is deemed

proof that the amendment itself is ineffective. Referring

to the regulatory towing scheme enacted in 1987, the

Second Circuit states: “Multiple amendments [including

§ 20-495(d)] so soon after its enactment suggest that it

was not strongly effective” (13a). Whereas an attempt

to correct deficiencies in a safety ordinance would seem,

by definition, to be “genuinely responsive” to safety

concerns, the Second Circuit paradoxically finds in that

very attempt a basis for preemption. By employing a

“genuinely safety-related” standard in this fashion, the

Second Circuit has improperly stretched its analytical

framework beyond the relevant issue of whether the

conception of the law is constitutionally sound to an

evidentiary consideration of whether the law has fulfilled

its legislative intention.

We understand this Court to have chosen its words

purposefully when, in Ours Garage, it defined the

relevant standard as whether a towing provision is

“genuinely responsive to safety concerns.” It does not

appear to have been an accident that this Court did not

instead use the words “genuinely effective in addressing

safety concerns.” Through its careful choice of words,

this Court crafted an opinion consistent with its well-

entrenched holding that “where the legislative judgment

is drawn into question, [the inquiry] must be restricted

to the issue whether any state of facts either known or

which could reasonably be assumed affords support for

{the legislation].” U.S. v. Carolene Products, 304 U.S.

144, 154 (1938). By failing to give due deference to this

fundamental principle, the Second Circuit has distorted

the meaning of Ours Garage and imposed a dangerously

onerous and unworkable burden upon municipalities

seeking to exempt from preemption safety-related

towing provisions.

Finally, we recognize that the Second Circuit did not

reach the issue of whether the City’s towing scheme

violates the Constitution’s Commerce Clause.

Respondent lacks standing to raise that issue and it is

not properly part of this case. Since both respondent

and its affiliated towers reside and perform tows within

New York State, in which state New York City is also

located, plaintiff does not have standing to raise a broad

interstate commerce challenge on behalf of residents of

other states who might wish to challenge the City’s tow

regulations as obstructing interstate commerce.

Pursuant to the Supreme Court’s three-pronged

analysis for determining whether an entity has standing

to assert claims in a representational capacity, plaintiff’s

representational standing is circumscribed to

encompass the claims of towers who affiliate with plaintiff

in order to perform consumer tows in the greater New

York metropolitan area, including New York City, Long

Island, Westchester, and the lower Hudson Valley. Hunt

v. Washington State Apple Advertising Comm’n, 432

U.S. 333, 343 (1977).

Hypothetical or ideological concerns for towers who

are not within plaintiff’s network do not constitute a

basis for standing. Kessler Inst. for Rehab. v. Mayor

and Council of Borough of Essex Fells, 876 F Supp 641,

653 (D. NJ 1995), citing Sierra Club v. Morton, 405 U.S.

727, 735 (1972). This Court cannot rule against the City’s

tow regulations on the basis of hypotheticals advanced

by plaintiff regarding the supposed plight of towers who

are, by definition, not plaintiff’s affiliates and therefore

not before the Court. The towers actually represented

by plaintiff before this Court are towers who actively,

intentionally, and foreseeably seek towing work through

plaintiff in its territory, the greater metropolitan area,

which lies entirely within New York State and includes

New York City. By their own description of the services

they provide, they do not perform tows that begin in

other states and end in New York City.

Accordingly, in reviewing this petition for certiorari,

this Court should not deem respondent’s Commerce

Clause claim as a legitimate alternate ground for finding

in respondent’s favor.

CONCLUSION

For the reasons set forth, the City respectfully asks

this Court to grant its petition for a writ of certiorari.

Respectfully submitted,

Of Counsel: MICHAEL A. CARDOZO

Corporation Counsel

LEONARD J. KOERNER,* :

Larry A. SONNENSHEIN oe pec ew York

0 Church Street

M N

bigsineraclseniancial New York, NY 10007

* Counsel of Record (212) 728-1030 or 1067

APPENDIX

APPENDIX A — OPINION OF THE UNITED

STATES COURT OF APPEALS FOR THE SECOND

CIRCUIT DECIDED MARCH 24, 2008

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term, 2007

(Argued: March 6, 2008 Decided: March 24, 2008)

Docket Nos. 06-1872-cv (L), 06-5243-ev (con)

AUTOMOBILE CLUB OF NEw YORK, INC.,

Plaintiff-Appellee,

snail hie

GRETCHEN DykSsTRA, as commissioner of the

Department of Consumer Affairs of the City of

New York and City or NEw York,

Defendants-Appellants.

Before:

McLAUGHLIN AND WESLEY, Circuit Judges,

and Cocan, District Judge.”

* The Honorable Brian M. Cogan, United States District

Court for the Eastern District of New York, sitting by

designation.

Appendix A

PER CuRIAM:

Appellants Dykstra and the City of New York

(collectively, the “City”), appeal from orders of the

United States District Court for the Southern District

of New York (Owen, J.) permanently enjoining the City

from enforcing its tow truck licensing Scheme, codified

at Title 20, Chapter 2, Subchapter 31 of the

Administrative Code of the City of New York (the

“Scheme”), against tow operators from outside of New

York City, declaring invalid § 20-495(d) of the

Administrative Code, and awarding Appellee $651,856

in attorneys’ fees and $6,293.98 in expenses. We affirm,

holding that the enforcement of the City’s licensing

Scheme against out-of-City tow truck operators is

preempted by 49 U.S.C. § 14501(c)(1) and that the

district court was within its discretion in its award of

attorneys’ fees and expenses. Because we find that the

City’s extraterritorial application of the Scheme is

preempted we need not reach the constitutional issues

raised by the parties.

BACKGROUND

Appellee Automobile Club of New York (“AAA”) is a

not-for-profit corporation which provides roadside

assistance and towing in the New York metropolitan

area’ through a network of affiliated contractors. Auto.

1. AAA’s territory encompasses the five boroughs of New

York City, Long Island and the seven counties of the lower

Hudson Valley.

Appendix A

Club of N.Y., Inc. v. Dykstra (“Auto. Club I”), 326

F:Supp.2d 568, 569 (S.D.N.Y.2004). It brought this action

challenging the City’s Scheme as applied to tow trucks

from outside New York City.

1. The Scheme

Originally enacted in 1987 and amended in 1993 and

1994, the Scheme comprehensively regulates the City’s

towing industry. The Scheme was enacted in large part

to prevent tow truck drivers from monitoring police

radios and “chasing” each other to reach the scene of a

car accident first. See Memorandum in Support from

the Office of the Mayor, Martha K. Hirst, Legislative

Representative to the City Council (Feb. 25, 1987);

Memorandum from Jeremy Travis, Special Counsel and

Assistant Director, Office of the Mayor, Office of

Operations (Dec. 8, 1986).

The Scheme makes it unlawful to “engage in towing

without having first obtained a license” and authorizes

the seizure of any tow truck being operated without a

license. N.Y.C. Admin. Code §§ 20-496, 20-522.1. The

Scheme defines “towing” to include not only the towing

of a vehicle, but any “driving or other operation of a tow

truck, or the offering to transport a vehicle by means of

a tow truck.” Jd. § 20-495(d). Thus, as a whole, the

Scheme requires that all tow trucks within the City limits

must be licensed by the City or risk seizure. This is true

regardless of whether the truck has a vehicle in tow and

regardless of whether the truck is actively soliciting

business in the City or simply passing through, such as

towing a car from New Jersey to Long Island.

Appendix A

To obtain a license, a towing business must pay fees

of $600 per truck and $20 per driver, as well as an

additional fee for a fingerprint report and criminal

record check. Jd. § 20-497; Rules of the City of N.Y.

§ 2-364. Further, applicants must furnish proof of

adequate liability insurance and either a $5,000 bond or

a $200 cash contribution to the Tow Truck Industry

Trust Fund. N.Y.C. Admin. Code § 20-499; Rules of the

City of N.Y. § 2-375. Each tow truck is obligated to

comply with New York state registration and inspection

requirements. To reduce some of the economic incentives

to “chase,” the Scheme also established the Directed

Accident Response Program (“DARP”), which requires

that all vehicles disabled within the City be removed by

licensed towers assigned on a rotating basis and bans

the solicitation of disabled vehicles by unassigned

towers. See N.Y.C. Admin. Code § 20-518.

2. Enforcement of the Scheme

Although the text of the Scheme authorized. the

seizure of all unlicensed tow trucks anywhere within

New York City, an informal reciprocity agreement

between the City and surrounding municipalities and

counties minimized enforcement of the Scheme against

non-City tow operators from 1987 until 2004. This

agreement is evidenced by several writings. First, an

April 4, 1990 memorandum authored by then-Assistant

Commissioner of the Department of Consumer Affairs

(“DCA”) Peter Lempin served to:

[Rleinforce the towing reciprocity agreement

the Department has with both the Tow

Appendix A

Advisory Board and the _ different

representative associations, regarding who

requires a towing license.

The intent of the agreement was not to

penalize those companies, who for the most

part, just pass through the city or occasionally

tow vehicles from the city to bordering

counties or states.

Auto. Club I, 326 F.Supp.2d at 569-70.

On January 13, 1993, Lempin, now DCA’s First

Assistant Commissioner, wrote to the Supervisor of

Licensing for the Town of Hempstead that:

Since 1987, when the Department of

Consumer Affairs assumed the licensing and

regulatory authority over towing businesses,

we have honored an informal licensing

reciprocity policy with surrounding counties.

This policy allows towing firms from Nassau,

Suffolk and Westchester counties to pass

through New York City without having to

obtain a City license.

Id. at £70. The following year, Lempin, by then DCA

Deputy Commissioner, wrote a nearly identical letter to

the Deputy Mayor for Operations of the City of Yonkers.

Id.

Appendix A

By 2000, the informal reciprocity agreement had

become documented in the Patrol Guide issued by the

New York Police Department titled “Seizure of

Unlicensed Tow Trucks.” According to the NYPD, “tow

trucks from outside New York City that are passing

through or merely picking up or dropping off a vehicle

within New York City are not subject to this [seizure]

procedure.” Jd. The same or similar language was also

included in the Patrol Guide dated November 30, 2001

and a May 19, 2004 NYPD Operations Order. /d.

Regardless of the scope of the reciprocity,

enforcement increased dramatically in 2004, when only

25% of tow operators met their license renewal

deadlines. Consequently, as of January 1, 2004, DCA

began conducting sweeps and seized approximately 60

tow trucks, 19% of which velonged to towers outside of

the City. In 2003. AAA performed approximately 14,000

interstate tows, while in 2004, towing clubs in the New

York area performed approximately 6,000 tows to, from,

or across the City limits. Auto. Club of N.Y. Inc. vu.

Dykstra (“Auto. Club II”), 423 F.Supp.2d 279, 281

(S.D.N.Y.2006). To avoid seizure of these trucks, AAA

created a “handoff” system whereby vehicles were towed

to the City limits and then swapped onto licensed tow

trucks. See Auto. Club I, 326 F.Supp.2d at 572.

According to AAA, these measures were necessary

because its members did not have a sufficient number

of licensed trucks to perform all tows into, out of, or

through New York City.

Appendix A

AAA filed this action on April 5, 2004, seeking a

judgment enjoining the City from enforcing the Scheme.

In July 2004, the district court ordered the continuation

of the reciprocity policy, and preliminarily enjoined the

City from enforcing the Scheme against non-City tow

trucks authorized by their own municipalities and in

accordance with New York state law. /d. at 573. Following

a full trial, the district court invalidated portions of the

Scheme and specifically declared its definition of

“towing” void. Auto. Club IJ, 423 FSupv.2d at 287-88.

The court found three independent bases for this

decision. First, under 49 U.S.C. § 14501(c)(1), the

Scheme was preempted as “a law, regulation, or other

provision... related to a price, route, or service of any

motor carrier” not saved by the provision’s safety

exception to preemption. See 49 U.S.C. § 14501(c); Auto.

Club IT, 423 F.Supp.2d at 285. Second, the Scheme

unduly burdened interstate commerce in violation of the

dormant Commerce Clause by “essentially imposing...

a high toll on towers.” Jd. at 282. Because it requires a

license simply to drive a tow truck within the City limits,

the Scheme would force, for example, “a New Jersey

tower, wanting to tow from Newark to... Long Island

...to go north of Yonkers on the west (opposite) side of

the Hudson River to the Tappan Zee Bridge, work

across Westchester to Bridgeport, Connecticut to the

Long Island Sound Ferry and then on Long Island go

back west to Mineola.” /d. (emphasis and footnote

omitted). Third, the broad definition of towing

authorized se‘zures of trucks without the probable

cause required by the Fourth and Fourteenth

Amendments. /d. at 286. Lastly, in a separate decision,

Appendix A

the district court awarded AAA $651,856 in attorneys’

fees plus $6,293.98 in expenses. Auto. Club of N.Y., Inc.

v. Dykstra, No. 04 Civ. 02576, 2006 WL 3208585, at *2,

2006 U.S. Dist. LEXIS 81414, at *7 (S.D.N.Y. Nov. 6,

2006).

DISCUSSION

In 1994, Congress passed the Federal Aviation

Administration Authorization Act of 1994 (the “FAAA

Act”), which became codified as part of the Interstate

Commerce Act. In relevant part, the FAAA Act amended

the Interstate Commerce Act to preempt state

regulation of certain aspects of motor carriers, including

tow trucks. Specifically, the Act preempts the laws of a

“State [or] political subdivision of a State... related to

a price, route, or service of any motor carrier... with

respect to the transportation of property.” 49 U.S.C.

§ 14501(c)(1). As an exception to this general preemption

rule, Congress provided that the Act “shall not restrict

the safety regulatory authority of a State with respect

to motor vehicles.” Jd. § 14501(¢)(2)(A).

2. The City argues that the Scheme is outside the scope of

the FAAA Act altogether. However, in doing so, it cites to Ace

Auto Body, a case applying the safety exception. See Ace Auto

Body & Towing, Ltd. v. City of N.Y, 171 F.8d 765, 771 (2d

Cir.1999). We think that the Scheme is plainly within the scope

of the FAAA Act, as the mere fact that any tow truck entering

New York City would be subject to seizure if unlicensed

clearly relates to “route,” if not “price” and “service” as well.

See 49 U.S.C. § 14501(c)(1).

Appendix A

We have previously upheld portions of the Scheme

in the face of an FAAA Act challenge, holding that the

safety exception applies to provisions “reasonably

related” to safety. See Ace Auto Body & Towing, Lid. v.

City of N. Y.,, 171 F.3d 765, 777 (2d Cir.1999). After our

decision in Ace Auto Body, the Supreme Court ruled

that the safety exception to preemption only applies to

local regulations “genuinely responsive to safety

concerns.” City of Columbus v. Ours Garage & Wrecker

Serv., Inc., 586 U.S. 424, 442, 122 S.Ct. 2226, 153 L.Ed.2d

430 (2002). Applying the Ours Garage standard, this

Court limited the ongoing significance of Ace Auto Body.*

See Loyal Tire & Auto Center, Inc. v. Town of Woodbury,

445 F'3d 136, 145 (2d Cir.2006). “Following Ours Garage,

we no longer consider simply whether a regulation is

reasonably related to safety but must determine

whether, in light of the legislative body’s purpose and

intent, the regulation is ‘genuinely responsive’ to safety

concerns.” Jd. Making that determination requires two

steps. First, a court “must consider any specific

expressions of legislative intent in the statute itself as

well as the legislative history.” Jd. Then, it must assess

those “purported safety justifications ...in light of the

existing record evidence.” /d. The Scheme fails both

steps.

3. The court also called into question the continued validity

of Ace Auto Body’s holding regarding the Scheme, stating that

“Nothing in Ace Auto Body controls the resolution of this case

... Land] whether or not [Woodbury’s towing] law is reasonably

related to safety, it is not genuinely response to safety concerns.”

Loyal Tire & Auto Center, Inc. v. Town of Woodbury, 445 F.3d

136, 148 n. 6 (2d Cir.2006).

10a

Appendix A

1. Legislative Intent

The record indicates that the Scheme was enacted

in large part to prevent chasing. The Office of the Mayor

noted that the “primary objective” of Local Law 87-28

“is to eliminate the practice, endemic to the tow industry,

of monitoring police radio transmissions in order to learn

of accidents and then to race to the scene to secure

towing and repair work-a practice commonly known as

‘chasing.’ ” Hirst Memorandum, supra. Chasing

“imperils both pedestrian and vehicular safety” and “too

often results in tragic injury to pedestrians and other

motorists.” Id. The City Council’s declaration of

legislative intent concurred, noting that the “reckless

conduct” inherent in chasing “can threaten life and

property.” Moreover, the law authorized DCA to refuse

to renew, suspend or revoke a towing license where the

driver operated a truck in a “grossly negligent manner,”

made a material false statement on an application,

engaged in fraud, failed to pay a fine, was convicted of a

crime having a “direct relationship to the ability to

perform the licensed activities,” or engaged in conduct

that would “endanger the public.” /d. The legislative

history reveals that the law was also motivated by

economic factors, such as encouraging industry

efficiency and eliminating the predatory prices charged

by chasing towers. [d.

In 1993, the City stiffened enforcement of the

Scheme by authorizing the seizure of unlicensed tow

trucks. In passing Local Law 93-10, the City Council did

not discuss safety concerns, noting instead that

lla

Appendix A

strengthening enforcement would solve a “jurisdictional

problem” posed by the number of towers failing to renew

their licenses in addition to providing consumers with

“timely, accurate . . . information regarding their rights.”

Report of the Committee on Consumer Affairs In Favor

of Approving and Adopting, As Amended, a Local Law

to Amend the Administrative Code of the City of New

York In Relation to Increasing the Standards and

Penalties for Participation in the Directed Accident

Response Program and the Rotation Tow Program, New

York City Local Law Bill Jacket, 1993 Local Law 10 (Dec.

17, 1992). Mayor David Dinkins stated that the bill is

“designed to protect consumers by enhancing effective

regulations of the tow industry.” Remarks by Mayor

David N. Dinkins, Public Hearing on Local Laws,

New York City Local Law Bill Jacket, 1993 Local Law

10 (Jan. 22, 1993).

In 1994, the Scheme was amended again to broaden

the definition of towing in N.Y.C. Admin. Code § 20-

495(d) “to more clearly define what towing activity is

and what vehicles will be considered tow trucks.”

Memorandum in Support from Frank T. New, Office of

the Mayor, Director, City Legislative Affairs (Nov. 26,

1993). “Towing” was expanded to include all tow trucks

without vehicles in tow as part of an effort to “fill{ ]

existing loopholes which . . . undermine[d] the DARP

program.” /d.

Although the record is replete with evidence that

the City sought to curb a public safety risk by carefully

regulating tow trucks engaged in chasing, the legislative

12a

Appendix A

history does nothing to explain whether the City Council

intended to subject all tow trucks passing through the

City to its Scheme or why such broad regulation was

necessary.‘ The City may have been motivated by a desire

to reduce chasing within New York City in broadening

its definition of “towing,” but it did not explain why

increased enforcement was insufficient. Instead of

enforcing existing law, the City chose to impose its

Scheme on all tow trucks that happened to be within its

limits, regardless of whether they were chasing. The

legislative history is silent on how those trucks not

engaged in chasing, or those merely driving through

New York City threaten public safety and how the

expanded definition of “towing” is genuinely responsive

to those concerns.

2. Assessment of Legislative Intent

The second step of the Loyal Tire framework

requires an assessment of the safety justifications in

light of the record evidence. Loyal Tire, 445 F.3d at 145.

The City argues that the regulations have helped reduce

chasing, which has correspondingly improved public

4, In fact, one of the DARP provisions seems to suggest

that non-City towers might be outside the scope of the Scheme.

The DARP rule states that the tower assigned to retrieve the

disabled vehicle may not release the vehicle to another tower

unless that tower is licensed by the City or “based outside of

New York City and thereby is not required to be licensed

pursuant to such provisions of the New York City

Administrative Code.” Rules of the City of N.Y. § 2-371.

13a

Appendix A

safety.” However, the City has not presented any

evidence to support this argument, relying exclusively

on the Scheme’s legislative history to demonstrate that

the City Council and Mayor were motivated by a desire

to make New York City safer. As noted by the district

court, the City has never assessed the effectiveness of

the Scheme in fighting chasing. Multiple amendments

so soon after its enactment suggest that it was not

strongly effective. In fact, the legislative history for the

amendment expressly states that “[s]ince its enactment

in 1987, DARP has been unable to eliminate the problem

of ‘chasing’ that continues to plague the streets of the

city of New York.” Report of the Legal and

Governmental Affairs Division, New York City Council

Committee on Consumer Affairs (Dec. 10, 1993).

Even assuming that the Scheme has been effective

in reducing chasing for accidents within New York City,

the City has not articulated a reason as to why the

5. The City also points to the Scheme’s licensing and

inspection requirements. Even though they are largely

duplicative of New York State’s inspection requirements, the

City argues that the visible City license informs consumers what

they are to be charged and to whom they may complain.

Although this might serve an important consumer protection

purpose, it is not genuinely responsive to safety concerns.

Similarly, the City argues that the Scheme’s criminal

background checks of drivers are responsive to safety concerns.

However, the legislative history is silent on the origins of the

background checks, and at trial, the City suggested that the

background checks were consumer protection measures because

they sought to prevent towers from charging inflated prices.

14a

Appendix A

Scheme must be enforced against all tow trucks

anywhere within the City in order to reduce chasing, or

how that broad enforcement is genuinely responsive to

safety concerns. When a City resident’s car breaks down

in New Jersey, or Westchester, or Connecticut, the few

trucks (if any) starting the “chase” from within the City

would presumably already be licensed. Those starting

and ending the chase outside of the City would not drive

on City roads or highways or threaten City pedestrians.

The tow truck returning the car to the City resident’s

repair shop within the City would not seriously

jeopardize safety within New York City either. Although

enforcement of the Scheme under these circumstances

might serve to protect the City resident from high

prices, that is not a safety concern. At that point, it

becomes precisely the general industry regulation that

Congress intended to preempt in enacting 49 U.S.C.

§ 14501(c).

No court has upheld a licensing scheme as restrictive

as New York City’s. One regulation upheld was a

rotation requirement and accompanying solicitation ban

not unlike the City’s DARP program. See Tow Operators

Working to Protect Their Right to Operate v. City of

Kansas City, 338 F.3d 873, 876 (8th Cir.2003). On the

other hand, an ordinance that, like the one at issue here,

required a city license in order for a tow truck to operate

on city streets has been invalidated because it did “not

ensure that the towing and storage of motor vehicles

will be performed safely.” See Northway Towing, Inc. v.

City of Pasadena, Tex., 94 F.Supp.2d 801, 803

(S.D.Tex.2000), abrogated on other grounds by Stucky

15a

Appendix A

v. City of San Antonio, 260 F.3d 424 (5th Cir.2001),

abrogated by City of Columbus v. Ours Garage &

Wrecker Serv., Inc., 586 U.S. 424, 122 S.Ct. 2226, 153

L.Ed.2d 430 (2002). The same is true of New York City’s

Scheme.

Enforcing the Scheme against tow trucks passing

through New York City or towing vehicles into New York

City does not respond to safety concerns and does not

fall within the safety exception of 49 U.S.C.

§ 14501(c)(2)(A). Accordingly such enforcement, and the

City’s definition of “towing” in N.Y.C. Admin. Code

§ 20-495(d), are preempted by 49 U.S.C. § 14501(c)(1).

We also hold that the district court’s award of

attorneys’ fees and expenses was not an abuse of

discretion. See In re Holocaust Victim Assets Litig.,

424 F'3d 150, 157 (2d Cir.2005). The City’s argument that

fees should be allocated on a claim-by-claim basis has

been rejected by the Supreme Court, see Hensley v.

Eckerhart, 461 U.S. 424, 435, 103 S.Ct. 1933, 76 L.Ed.2d

40 (1983), and the cases cited by the City are inapposite.

Finally, although a preemption claim under 49 U.S.C.

§ 14501(c) does not give rise to a federal right

enforceable under § 1983, see Loyal Tire, 445 F.3d at

150, AAA’s dormant Commerce Clause claim supports

the district court’s award of fees, see Maher v. Gagne,

448 U.S. 122, 132, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980)

(section 1988 fees may be awarded where “the plaintiff

prevails on a wholly statutory, non-civil-rights claim

pendent to a substantial constitutional claim”).

l6a

Appendix A

CONCLUSION

For the foregoing reasons, the judgment of the

district court is AFFIRMED.

17a

APPENDIX B — OPINION AND ORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF NEW YORK

DATED MARCH 24, 2006

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

No. 04 Civ. 02576 (RO)

AUTOMOBILE CLUB OF NEW YORK, INC.

Plaintiff,

- against -

GRETCHEN DYKSTRA, as Commissioner of the

Department of Consumer Affairs of the City of

New York and the CITY OF NEW YORK,

Defendants.

OPINION & ORDER

OWEN, District Judge:

Following a hearing, this Court, in July 2004,

granted a preliminary injunction maintaining a 19-year

status quo. The opinion is reported at Automobile Club

of New York, Inc. v. Gretchen Dykstra, 326 F.Supp.2d

568 (S.D.N.Y.2004),! familiarity with which is assumed

1. The record of that proceeding is before me now by

stipulation of the parties. References to the transcripts are

“1/” for the preliminary injunction hearing, and “2/” for the

trial on the merits.

18a

Appendix B

as it provides the extensive background herein, and

following the denial of a stay in the Court of Appeals

(see Appendix A, unreported, annexed), the merits of

plaintiff Automobile Club of New York, Inc.’s action

against the City of New York and its Department of

Consumer Affairs (DCA), is now before me. I held a

bench trial over three days in December 2004, where it

was solidly established that towing has become

enormously “nationalized.” In the year 2003, plaintiff

Automobile Club performed 14,000 interstate tows on

behalf of its members, and other clubs in the New York

area performed approximately 6,000 interstate tows in

2004 that involved New York City. Thus, the number of

tows to adjoining states and within New York State

which cross the border between the five boroughs of

New York City and surrounding New York counties north

and out to Long Island east is major,” as are requests of

plaintiff Club by its members, merely requiring a

crossing in and out of New York City, not to tow, but to

give a jump start because of a dead battery or to change

a flat tire, as to which entrances and exits had not been

a problem until the DCA started seizures shortly before

this suit began.

While over the years since 1987 there had been a

few rare lapses by the DCA in honoring the informal

reciprocal agreement which is extensively documented

in my prior opinion, see 326 FSupp.2d at 569-72, the

2. These include such tows as cars transported from Long

Island or Westchester or Connecticut to Florida in the winter

and back in the summers, and car “dealer swaps” from one state

to another through New York City.

19a

Appendix B

likely reason in my view that this problem had not

explosively surfaced years earlier with a plethora of DCA

seizures was the existence of that simple basic workable

and honored oral agreement earlier well-evidenced in

the correspondence over the years between senior

officials of the DCA and those surrounding communities

as well as stated the New York City police department’s

frequently published “Patrol Guide”.*® Thus, while a

certain 1980’s situation in New York City called

“chasing” triggered Ace Auto Body & Towing Ltd. v.

City of New York, 171 F.3d 765 (2d Cir.1999), and DARP

and later ROTOW, see infra, and clearly called for strict

control of New York City towers in its limited area, the

inter-county and interstate commerce side effects

created by aspects of that control were accommodated

by the reciprocal agreement.

For starters, the federal Commerce Clause, Art. I,

§ 8, cl. 3 of the Constitution,‘ is unquestionably applicable

to this situation, reserving to Congress the power to

legislate in matters relating to interstate commerce. The

“dormant” Commerce Clause as the law terms it is the

“other-side-of-the-coin” limitation on the power of the

states to enact laws imposing substantial burdens on

interstate commerce. See South-Central Timber

Development Inc. v. Wunnicke, 467 U.S. 82, 87, 104 S.Ct.

3. This came to an end in early 2004, culminating in 21

seizures by the DCA on March 31, 2004, followed by the Court’s

TRO on April 5, 2004.

4. “The Congress shall have Power. . . To regulate

commerce . .. among the several states. .. .”

20a

Appendix B

2237, 81 L.Ed.2d 71 (1984). Also reauired where, as here,

New York City’s rules and ordinances impact interstate

and intrastate commerce the same way—all non-New

York City licensed tow trucks are treated the same; that

is, they can be seized if they enter the City, whether

from other states or other New York State counties—

before the City’s restraints can survive they must be

shown to apply evenhandedly to effectuate a legitimate

local public interest and that their effects on interstate

commerce are only incidental. Pike v. Bruce Church,

Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174

(1970). Phrasing in the reverse under Pike, New York

City’s Rules and legislation can not be sustained if “the

burden imposed upon such commerce is clearly excessive

in relation to the putative local benefits.” Jd.

For many years under the reciprocity agreement

between the DCA and outside counties, and as

straightforwardly stated in the police “patrol guide,”

there was little burden. Outsiders from upstate or Long

Island or New Jersey or Connecticut—or wherever—

essentially did no more than drive into the City on some

major streets, drop a car off at a customer’s city repair

shop and go back out, or vice-versa, come in to some

New York City garage holding some outsider’s

inoperable car and take it out to the customer’s

Westchester repair shop, or pass through from New

Jersey to Long Island or Westchester on New York City

major routes. Absent this permissiveness however, a

New Jersey tower, wanting to tow from Newark to

Mineola on Long Island, would have to go north of

Yonkers on the west (opposite) side of the Hudson River

2la

Appendix B

to the Tappan Zee Bridge, work across Westchester to

Bridgeport, Connecticut to the Long Island Sound

Ferry® and then on Long Island go back west to Mineola,

perhaps more than doubling the distance at substantial

time and expense.

Thus, in addition, New York City’s licensing scheme,

if allowed full flow, would create a major burden to the

flow of interstate commerce by essentially imposing

either a high toll on towers if they were to pay to be

licensed to use its roads and highways’ or a duplication

5. The Bridgeport, Connecticut Ferry is not regarded by

towers as a practical alternative for towers based on Long Island

to avoid the City’s roads going from the Island to Westchester

or New Jersey—or vice versa.

6. Any outside truck could of course be licensed, after

perhaps a week or two’s delay, and the fee is $600 per tow truck

for two year license, and twenty dollars per driver. In addition,

each company owner and driver must pay seventy-five ($75.00)

dollars for a fingerprint report from the New York State Division

of Criminal Justice Services. Other requirements include the

placement of certain identifying information on the exterior of

the truck and a review of any driver’s record and criminal

history (see infra). The towing equipment of each truck must

be inspected at a City facility which requires a company to take

the truck out of service for a period of time—thereby losing

revenue. (The truck itself is inspected by the State of New York

for road and worthiness).

The City’s high fees are seen by neighboring jurisdictions

as a toll, and while it does not figure in this opinion, there is

some evidence that other surrounding counties might,

depending on the outcorne here, endeavor to enact and enforce

a similar toll/exclusion or seizure structure making the area a

shamble.

22a

Appendix B

of towers, and expensive “handing-off” procedure

between said two towers at New York City’s county

lines, which plaintiff did for several weeks before the

Court’s TRO—and which the City itself considered to

be “inefficient.” Otherwise, every tow truck legitimately

licensed elsewhere which comes upon the City’s roads

or highways—whether towing, or picking up or dropping

off a tow, or changing a tire, or simply driving a truck

without a tow, perhaps to a City repair shop or perhaps

passing through the City from Long Island to

Westchester—is vulnerable to immediate seizure,

see DCA’s Deputy Commissioner’s testimony, 326

F.Supp.2d at 571-72, and, if unable to afford a bond to

release the truck, faces the loss of use of the truck for

upwards of a week, awaiting an administrative hearing

plus a possible substantial fine, and even forfeiture of

the truck if the owner can not muster the fine.

But it is hardly too early here to note that, in line

with the underlying principle of said reciprocity

“agreement” and the police “Patrol Guide”,’ the Rules

of the City of New York in force for years allows

outsiders’ entry and exit on New York City roads

without threat of seizure in circumstances covered

there. This is specifically stated in City Rule § 2-371

promulgated in 1994 and still in effect concerning the

removal by the owner of a damaged vehicle towed to a

City garage under the Ace-motivated Directed Accident

_—

7. Notwithstanding the City has contended to the Court at

numerous times that the “Patro! Guide” did not state the law,

see, e.g., Tr. 1/179-83.

23a

Appendix B

Response Program (DARP).® It takes a little spelling

out, but under that program, as background, a DARP

participant tow truck is empowered to remove a vehicle

involved in New York City accident which cannot be

safely driven under its own power to that DARP

participant’s garage in New York City. The Rule then

specifically provides that DARP “[p]articipants must be

open [virtually daily for] redemption of vehicles towed

in the DARP Program,” upon presentation of sufficient

proof of ownership and payment of charges, and said

disabled vehicle shall then be “immediately released”.

The Rule finally expressly provides:

“No participant shall release a vehicle to

another towing company unless that towing

company is licensed or otherwise exempt from

the licensing provisions of subchapter 31 of

chapter 2 of title 20 of the New York City

Administrative Code, or that towing company

is based outside of New York City and thereby

is not required to be licensed pursuant to

such provisions of the New York City

Administrative Code.” (emphasis supplied).

Since the place of “redemption” and “release” is the

DARP participant’s garage within the City of New York,

obviously the language of the Rule above means that a

towing company truck based outside New York City is

entitled to lawfully enter the City, drive to the New York

8. Showing this language was no accident, it is repeated

verbatim in a later section entitled The Rotation Tow Program

(ROTOW) § 3-371.

24a

Appendix B

City DARP garage and, on completion of the formalities,

is authorized to tow the car across New York City streets

to an adjacent county. Not to be repetitious, but this is

exactly what the police department “Patrol Guide” has

stated year after year—allowing licensed tow trucks

from outside the City to come in and pick up a vehicle

and take it out being exempt from seizure. See supra.

I note that when the above DARP Rule and its obvious

contradiction of the City’s position was called to the

Court’s attention in an Amicus Brief after the

preliminary injunction hearing, the City, without basis,

contended at p. 2 of its Responding Memorandum, that

this Rule and specifically § 2-371(w) requires a “DARP-

participating tower” to tow such vehicle “to locations

outside of New York City” before any turnover may be

made to a non-City tow truck. Neither that section

(quoted above) nor any part of the Rule says any such

thing either as to DARP or ROTOW. Indeed, they state

the contrary.

Next, the major DCA endeavor to justify and

thereby utilize its legislation to exclude all others or

seize them upon trespass is based on its assertion that

its criminal background investigation of applicants to

drive tow trucks in New York City serves a major safety

function in that “it protects consumers of being the

victims of a crime at the hands of tow truck drivers.”

See City Post Trial Mem. at 10.° Thus, the DCA requires

9. At Tr. 1/36, the City’s counsel asserted the criminal

background investigation as “.. . strictly a consumer protection

issue about putting your car in the custody of someone you don’t

(Cont'd)

25a

Appendix B

all driver applicants for driving in New York City to

submit fingerprints which are then sent to the New York

State Division of Criminal Justice Services, which

reports back on whether or not the applicant has a

criminal record and what that record is. According to

the DCA’s testimony, 70 percent of those who apply have

some criminal record. This is reviewed by the DCA’s legal

office pursuant to a protocol focusing mainly on the

seriousness of the criminal history, its age(s), and

whether the applicant lied to the DCA in the application.

But the bottom line is that having done its review of the

70 percent that have a criminal record background,

6/7ths of that 70 percent are given licenses. Phrased

differently, only 10 percent of all applicants are rejected

for criminal background reasons although 70 percent

have such and 60 percent are driving.

It would have been of assistance here to have made

some study or report showing the efficacy of these

criminal record reviews, but puzzlingly it appears that

the DCA has never, at any time over the years since

1994, prepared any study or report of any kind as to

whether or not this criminal inquiry has had any impact

on the safety of consumers from tow truck drivers (or

anybody else for that matter) nor has DCA ever

communicated with any other jurisdiction (such as

Huntington, which does the same thing, or neighboring

(Cont'd)

know.” Even defining this as a “safety” issue, it does not rise,

certainly on this record, to justify the enormous burden on

commerce, interstate or intrastate.

26a

Appendix B

Yonkers) to see how they or New York is doing.’ The

testimony of DCA witness Alba Pico, a non-lawyer who

has supervised this criminal conduct inquiry for the DCA

since its beginning, gave the following forthright

testimony, Tr. 2/237:

THE COURT:

THE WITNESS:

THE COURT:

THE WITNESS:

THE COURT:

THE WITNESS:

THE COURT:

Have you, in the course of the

years, spoken with—does

Huntington do a criminal

record stuff? I think they do,

don’t they?

I don’t know. I would not be

aware.

Have you ever asked them?

No.

Do you know whether Yonkers

has ever considered doing

this? Did you ever talk to

anybody out there—

No.

—as to what their experience

is?

10. Perhaps this is because there is no evidence in this

record of any plague of criminal conduct in any jurisdiction

anywhere by tow truck drivers.

27a

Appendix B

THE WITNESS: No.

THE COURT: You see, what I am trying to

get at is, do you have any

statistical backup here that

because of your setup, you got

less rapes and harassments

and this and that per driver

than any other major city in

New York, Albany, Buffalo,

Yonkers, you name it. Do you

have anything that tells you

that?

THE WITNESS: No.!!

11. Ms. Pico was asked on the trial by the City’s lawyer—

as to a number of these criminal records. Tr. 2/199:

Q. I ask you to turn to the 11" rap sheet, license

number ending 922. What do your records show

about this person’s application?

A. The records show that the license was—that

the license was granted but this is after further

review. And this file, actually, I even had it on my

desk. We had to ask the person for letters of

reference. This person submitted a lot of letters

from the reference and commendations, and at the

end the license ended up being approved. (emphasis

supplied).

(Cont’d)

28a

Appendix B

Given the totality of the foregoing, I am utterly

unable to conclude that the fact that the City, however

well motivated, checks criminal records, considers

arrests as part of the record, and of every seven drivers

with a criminal record refuses a license to one, has, over

the years since 1994, had any measurable impact on the

safety to any car owner or anyone else in New York City

as compared with anywhere else in the state,'* certainly

not sufficient to justify prohibiting an out-of-city tower

(Cont’d)

Q. Why was he going to be denied?

A. Based on the protocol and the review, the

arrests were recent and related to the type of license

that this person was seeking.

Q. How were they related?

A. Driving while intoxicated, possession of

narcotics, possession of weapons, assault, possession

of stolen property, credit cards, attempted burglary

and possession of gambling records.

Q. So based on your protocol, this person is

being given the opportunity to show rehabilitation

documents and now....

A. Yes.

[The Court, given the above, queries what crosses

DCA’s “unsafe” line. }

12. I am told that insurance companies are becoming more

active everywhere in doing their own checking to the probable

benefit of this industry.

29a

Appendix B

licensed by the State or any other state from entering

the City to deliver or pick up a car or merely driving or

towing through.’* There must be a stronger showing

than that of impact on safety to justify such marked

interference with interstate and intrastate commerce

affecting price, route or service under the Commerce

Clause preemption 49 U.S.C. § 14501(a)(1). There is no

reason why New York City (as does Huntington) may

not continue, if it chooses, to utilize criminal records in

making licensing decisions as to drivers applying to New

York City-licensed towing companies. But where the City

sees this as giving it collateral rights that “threaten[ ]

to clog the avenues of commerce,” because it “is not

genuinely responsive to safety concerns .. .” it is

preempted. City of Columbus v. Ours Garage and

Wrecker Service, Inc., 536 U.S. 424, 442, 122 S.Ct. 2226,

153 L.Ed.2d 430 (2002). Accordingly, the City of New

York may not utilize this as a basis to prohibit legitimate

tow trucks from elsewhere from entering New York City

to pick up a tow or deliver a tow or drive through New

York City (with or without a tow) between Long Island

or New Jersey or Connecticut or Upstate New York, or

seize such a truck if it so endeavors. Nor, as is dealt

with iramediately hereafter, can there be any exclusion

or restriction by “definition” as to a tow truck without a

tow at any time. See infra. Whatever else, it is just

another truck.

13. The hand-off at the City line between towers—not only

conceded by the City to be an inefficient procedure—but as the

Court sees it, puts an owner, man or woman, at risk at lonely

hours of the night at the City line, and it is undisputed that any

raising or lowering of a car in tow can from time to time cause it

damage—so why double the risk?

30a

Appendix B

Turning to this latter issue, the City asserts as

integral to its position the revised definition of “towing”

that DCA has obtained and presently stands in the New

York City Administrative Code, supra: ““Towing” shall

mean ... the driving of a tow truck.” On the basis of

this, the DCA contends it can seize a truck without a

tow, without probable cause as required by the U.S.

Constitution’s 4" and 14" Amendments, just on the DCA

enforcement officer’s “unproven”’* conclusion

14. See DCA’s Deputy Commissioner’s and Enforcement

Director’s testimony, both quoted at 326 FSupp.2d at 571-72,

the former stating that the law relieved “enforcement officers

from having to try to prove that this industry wasn’t lying every

time you stopped them;” and the latter how enforcement

officers therefore did not have to follow any truck without a

tow for perhaps up to 2 1/2 hours to get “proof”

This is in the same area as C.A.U.T.I.O.N., Lid. v. City of

New York, 898 F.Supp. 1065 (S.D.N.Y.1995). There, the Court

stated as to plaintiffs’ allegations of a “policy and practice” by

the City of the “arbitrary towing of vehicles.” Jd. at 1073:

Unreasonable seizures by State actors are a subject

of the Fourth Amendment, which is made applicable

to the States by the Fourteenth Amendment

+ * *

The complaint alleges that the practice [of arbitrary

towing] complained of exists at the instance, or at

least with the knowing acquiescence, of high City

officials

(Cont'd)

3la

Appendix B

questioning a driver on the road that he was “lying” to

him, see 326 F-'Supp.2d at 571." In this connection, I note

that the New York State definition of commercial towing

in the Vehicle and Traffic Law § 107-b is: “The moving

or removing of disabled, illegally parked, or abandoned

motor vehicles or motor vehicles involved in accidents,

by another motor vehicle, for which there is direct or

indirect compensation.” (emphasis supplied). And of

course, the common dictionary definition of towing is:

“To drag or pull[ |] a car... by means of a device”."®

While under Vehicle Traffic Law § 1642 Subsection

15, New York City has been given the power to

(Cont'd)

Hence, the contention that the City tows vehicles

for alleged parking violations when in fact there is

no basis for such charges states a claim upon which

relief may be granted. (emphasis supplied).

The policy and practice here, see above, is essentially

acknowledged by DCA’s “major City officials.” It is confirmed

by a ranking City police officer as a desirable policy and practice.

Tr. 1/465.

15. I note also the inappropriateness of this given another

section of the New York City Administrative Code, § 20-522.1.b.:

“Any police officer or authorized officer or employee of the

department, upon service upon the owner or operator of a tow

truck of a notice of violation . .. may seize a tow truck which

such police officer or authorized officer or employee has

reasonable cause to believe is being used in connection with

such a violation.” (emphasis supplied).

16. The Random House College Dictionary, 1980.

32a

Appendix B

supersede state law in certain areas of “towing and

pushing of vehicles” its power is specifically limited to

enumerated areas such as insurance, licensing and

regulating persons in the business, charges for and

storage of disabled vehicles. New York City is not given

the power to redefine “towing” as it has. Absent such

authority, it has been held in the New York case Sureway

Towing, Inc. v. Martinez, 8 A.D.3d 490, 779 N.Y.S.2d

109 (App.Div.2d 2004):

Local governments may only exercise

those powers expressly granted to them by

the State Constitution or the Legislature (see

Sand Hill Assoc. v. Legislature of County of

Suffolk, 225 A.D.2d 681, 640 N.Y.S.2d 128; New

York State Pub. Empls. Fedn., AFL-CIO v.

City of Albany, 72 N.Y.2d 96, 527 N.E.2d 258,

531 N.Y.S.2d 770 (1988)). Further, Vehicle and

Traffic Law § 1600 provides that the provisions

of this chapter shall be applicable and uniform

throughout this state and in all political

subdivisions and municipalities therein|[,] and

no local authority shall enact or enforce any

local law, ordinance, order, rule or regulation

in conflict with the provisions of this chapter

unless expressly authority herein.

The Sureway opinion continues that if what the “local

authority” purports to do “. .. is not one of the

enumerated subjects that may be superseded by local

law (see Vehicle and Traffic Law § 1642), ... the State

law found in Vehicle and Traffic law [§ 107-b] remains

~ applicable here.”

33a

Appendix B

Consequently, as Sureway observed, New York

State law defining towing (§ 107-b, supra) was not and

could not be superseded by “local law” and therefore

that local definition is void, and “[a] truck is just a truck,”

immune from seizure when Constitutional requirements

are not met.

Accordingly, given all the foregoing, this Court

concludes that seizure by a City agency of any outsider

tow truck in New York City is prohibited where the only

ground the agency reasonably has and can assert for

the seizure is that the tow truck is not licensed by the

City of New York. All tow trucks lawfully operating, with

or without a tow, from anywhere outside New York City,

whether based within the State or elsewhere, are to be

permitted the same access to and use of New York City’s

roads as those towers licensed by New York City. Plaintiff

Automobile Club is awarded compensatory damages

against the City of New York in the amount of $17,500,

together with prejudgment interest from March 31,

2004, based on the total costs of double-tows (the so-

ealled “handing-off” procedure discussed supra),

out-of-territory service fees and overtime services

necessary for plaintiff to continue to provide quality

roadside assistance and towing services to its members

during the period in which the City’s seizures were

taking place. See Tr. 2/14-20, 114-16; see DiSorbo v. Hoy,

343 I.3d 172, 182 (2d Cir.2003); Goldberg v. Town of

Rocky Hill, 973 F.2d 70, 72-75 (2d Cir.1992); and Monell

v. Dep’t of Social Services of City of New York, 436 U.S.

658, 694, 98 S.Ct. 2018, 56 L.Ed.2d €11 (1978). While

there was objection by DCA to any basis for damages at

34a

Appendix B

all, there was no objection to the items of cost asserted

as damages and their claimed bases, or to the manner

by which the dameves were calculated. A municipality

can be held liable .or compensatory damages “when

execution of [its] policy or custom, whether made by its

lawmakers or by those whose edicts cr acts may fairly

be said te represent official policy, inflicts the injury that

the government as an entity is responsible under

§ 1983,” when the official policy is “the moving force of

the constitutional violation.” Monell, 486 U.S. at 694,

98 S.Ct. 2018.

Attorneys’ fees are hereby awarded to the plaintiff

under 42 U.S.C. § 1988(b), which is to serve and submit

a sworn statement detailing same within ten days.

Should defendants take issue with any aspect thereof,

they are to notify the Court within ten days thereafter,

and a hearing will then be scheduled to resolve any such

issues.

Plaintiff seeks to have Title 20, Chapter 2,

Subchapter 31 of the New York City Administrative

Code declared unlawful and invalid; and to permanently

enjoin the City and DCA from enforcing it. Some of the

provisions contained therein appear to be required and

appropriate under Ace. A hearing is hereby set for

Thursday, April 13, 2006 at 10 o’clock in the morning, in

Courtroom 1106 of the United States Courthouse,

40 Foley Square, to determine which sections survive

and which do not.

35a

Appendix B

New York City Administrative Code, Title 20,

Chapter 2, Subchapter 31, § 20-495(d), defining

“towing,” is, however, separately declared void.

The foregoing constitutes the Court’s findings of fact

and conclusions of law, and is so ordered.

Dated: New York, NY

March 24, 2006

s/ R. Owen

United States District Judge

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