Antitrust Law Daily Wrap Up, ANTITRUST NEWS: St. Louis taxicab commission claims state action immunity in Uber antitrust suit, (Oct 20, 2015)

By Linda O’Brien, J.D., LL.M.

The St. Louis taxicab commission is immune from liability for claims filed under the Sherman Act—that the agency conspired to stifle competition in the transportation market—as a government entity authorized to regulate the vehicle for hire service and taxicab industry under state law, the commission contended in a motion to dismiss filed in the federal district court in St. Louis, Missouri (Wallen v. St. Louis Metropolitan Taxicab Commission, October 16, 2015).

Uber Technologies, through affiliate Uber USA, LLC, is an international transportation network company (TNC) that developed a software application that allows users to request rides from independent, third party drivers who provide transportation services. The St. Louis Metropolitan Taxicab Commission (MTC) is authorized to license and regulate vehicle for hire services in the St. Louis County area.

In September 2015, after the MTC enacted regulations that required TNCs to comply with new and existing rules imposed on taxicab and limo vehicle operators, Uber and a group of prospective Uber drivers and riders filed suit against the Commission, certain commissioners, and several taxicab and livery companies seeking injunctive relief and damages. Specifically, the plaintiffs claimed that the defendants conspired to enact rules that limit the entry of Uber and other ride sharing request service providers into the transportation market.

According to a memorandum in support of the motion, the Missouri state legislature established the MTC for the purpose of licensing and regulating persons engaged in the vehicle for hire service and taxicab business. The MTC is expressly authorized to enact a “taxicab code” that contains administrative procedures and safeguards. The U.S. Supreme Court recognized the “state action doctrine” in Parker v. Brown, 317 U.S. 341 (1943) which provides that the federal antitrust laws do not prevent States from imposing market restraints as an act of government.

The plaintiffs failed to state a claim to overcome the defendants’ right to immunity, according to the memorandum. The plaintiffs allegedly offered no evidence that MTC was not effectuating state policy contained in the enacted legislation or acted outside the scope of its state granted authority. Moreover, the members of the MTC that are active in the taxicab industry are not a decision-making majority and any alleged conspiracy by MTC commissioners is irrelevant to the state action immunity analysis, the motion contends.

The case is No. 4:15-cv-01432-HEA.

Attorneys: Neil J. Bruntrager and Charles H. Billings (Bruntrager & Billings, P.C.) for St. Louis Metropolitan Taxicab Commission.

Companies: Uber USA, LLC; Airport Best Taxi Service, L..L.C.; Gateway Tax Management Company; St. Louis County and Yellow Cab Company; Best Transportation, Inc.; Best Black Car, LLC; Best Sedan Services, LLC

News: Antitrust MissouriNews