NEW ORLEANS — A federal appeals court has ruled against the United Motorcoach Association in upholding the authority of Austin, Texas, to regulate interstate motor carriers by requiring permits.
The U.S. Court of Appeals for the Fifth Circuit ruled that the ordinance does not contradict apparent federal interstate commerce preemptions because of a stated “nexus to safety.”
“The city’s safety concerns are real enough that the court is convinced that they are both reasonably related and genuinely responsive to safety concerns,” stated the ruling from a three-judge panel of the court.
UMA, which contends federal law prohibits Austin from regulating interstate charter bus operators, has since asked the appeals court to reconsider its ruling.
The ruling, issued last month, was the latest response to a federal suit filed by UMA in 2013 after Austin adopted an ordinance that imposed fees and numerous prerequisites for operating motorcoaches in the city.
In addition to a number of detailed operating regulations, the ordinance would require motorcoach operators to pay a $375 annual vehicle fee to operate in Austin or face impoundment of their vehicles. Violations also would result in citations charging operators with Class C misdemeanors punishable by fines of up to $500.
“The offending ordinance expresses authority preempted by federal law, plain and simple.”
After Austin adopted its initial version of the ordinance, UMA asked the Texas Attorney General’s Office to intercede but it refused, so the association challenged the city’s authority by filing suit in the U.S. District Court for the Western District of Texas.
“The offending ordinance expresses authority preempted by federal law, plain and simple,” Ken Presley, UMA’s vice president of industry relations and COO, said at the time. “Congress is very explicit in preempting states and their political subdivisions from granting or requiring authority to operate. Imagine just for a moment if every city in the nation enforced a similar ordinance. The charter bus industry would essentially grind to a halt.”
The city responded that its ordinance would be necessary for the enforcement of safety regulations and therefore would be permitted under exceptions to federal preemptions of state regulations regarding operating authority.
“The City Council has determined that for City regulators to protect the public from potentially unsafe charter buses and drivers, there must be a permit system in place that gives regulators sufficient information and ability to enforce the Charter Bus Regulations,” it argued.
In response, UMA argued that state and local authorities already have thorough recourse to police commercial vehicles and drivers without permitting. In addition, the regulations would interfere in interstate commerce, the association argued.
UMA won a split decision in the original trial held in the U.S. District Court for the Western District of Texas. On Jan. 13, 2016, U.S. District Judge Sam Sparks ruled that Austin could require operators to apply for and purchase permits to operate point-to-point service in Austin. He also ruled, in favor of UMA, that the city cannot require or enforce the posting of decals or visible permits.
“The findings recount several previous incidents in Texas involving charter bus vehicles which resulted in passenger deaths,” Sparks wrote. “The Court finds safety relating to motor vehicles was truly a concern motivating the City’s passage of the regulations.
“The Regulations’ permitting requirements have an obvious, logical relationship to the City’s safety concerns. The permit requirement gives the City the ability to hold charter bus operators who do not comply with the substantive safety provisions . . . accountable. The permit requirements imply the threat of permit revocation, making them tools for policing misconduct.”
Sparks also required UMA and Austin to sit down and try to resolve some of their differences. Austin ultimately altered the ordinance, which had applied to every charter bus traveling on the city’s streets, to include the following exemptions:
- Charter buses traveling from anywhere outside of the city of Austin will not be required to obtain a permit, even if their group is staying and traveling in and around Austin.
- Charter bus trips that originate in Austin with a destination outside the city limits will not be required to obtain a permit.
- Charter buses simply traveling through the city limits will not be required to obtain a permit.
UMA also was successful in convincing the court to prohibit the city from imposing violations on buses carrying more than five newspapers, that aren’t painted alike, and that don’t wait a minimum of 30 minutes after being called before picking up passengers.
The only time a permit is required is when a charter takes place from a point within the city limits to another point within the city limits — which UMA will continue to oppose.
UMA appealed Judge Sparks’ decision last August, arguing the ruling “would allow (encourage even) the nation’s more than 10,000 municipalities to require permits on interstate or intercity operations.”
“Every jurisdiction is duty-bound to impose safety rules on motor vehicles per its traditional police power. UMA and the City agree on that.”
The appeal was filed by attorney Dan R. Mastromarco on behalf of UMA.
“Every jurisdiction is duty-bound to impose safety rules on motor vehicles per its traditional police power. UMA and the City agree on that,” the appeal said. “What the city cannot do is (1) impose local operating authority against the express preemption in (federal law) or (2) impose a permitting regime neither motivated by safety nor logically connected to achieving safety.”
Austin’s position “runs contrary to virtually every interpretive canon . . . Following the City’s interpretation to its logical conclusion, nothing whatsoever is left of the (federal) preemption against local operating authority.”
The appeal argued that the district court accepted Austin’s conflation of “motor vehicles” and “carriers.” While Congress accepted local enforcement of motor vehicle operation laws, it meant to prohibit local regulation of carrier operating authority.
Tow-truck case
In its defense, Austin cited as precedent a 2002 U.S. Supreme Court case involving local regulation of tow trucks, City of Columbus v. Ours Garage & Wrecker Service. The district court accepted the city’s argument.
However, UMA argued in its appeal, “Ours Garage dealt with permits on a largely municipal industry; not the effect of a vast and new paradigm shift on a quintessential instrumentality of a national transportation network. The prospect of a national transportation network road-blocked by disparate permit regimes was what motivated Congress to expressly prohibit such regimes in the first place. The City can point to no precedent requiring its draconian interpretation . . . unless they constitute purely economic protectionism.”
Federal regulations and local traffic laws already address the safety of the motorcoach industry, UMA argued.
“The City’s legislative findings (are) devoid of any explanation as to exactly why permits have a logical connection to safety objectives. . . . basic traffic law (which must be enforced by the police) regulations are already in existence in Texas or duplicate the Federal Motor Carrier Safety Regulations (which Austin cannot enforce because it has no licensed inspectors).
“Operators already jeopardize their license if they violate traffic laws,” UMA’s appeal stated. “The City’s Permit scheme violates (federal preemption law) even if it advances safety goals, but the permit requirements do not advance safety and the City was not motivated by safety in enacting the regime.”
States, not cities
A dissenting opinion in the Supreme Court’s Ours Garage decision raised the additional contention that any permissible preemptions of federal motor carrier laws are reserved for the states — not local governments.
“I believe the test and structure of (the law) show plainly that ‘the safety regulatory authority of a State’ does not encompass the authority of a political subdivision,” wrote Supreme Court Justice Antonin Scalia. Justice Sandra Day O’Connor joined the dissent. “The text and structure of the statute leave no doubt that . . . ‘state’ does not include ‘subdivision of a state’.”
The introduction to the recent appeals court ruling, signed by Judges W. Eugene Davis, James L. Dennis and Leslie H. Southwick, states that “This appeal raises the issue of whether federal law preempts a city’s exercise of regulatory authority over intrastate operation of charter buses.”
The judges rejected UMA’s claim that federal law preempts the permitting regulations adopted by Austin.
The “state’s safety regulatory authority must include the type of permitting regulations we have previously held to be covered by that phrase,” the judge’s wrote. “We also disagree with UMA’s argument that charter-bus permitting is not a ‘pre-existing and traditional state police power’ because cities only recently began regulating charter buses through permitting schemes.”
“The Secretary retains authority to invalidate non-safety-laws or safety-related laws when they improperly burden interstate commerce.”
The judges also disposed of UMA’s argument that Congress intended to prevent Austin and other cities from interfering with interstate commerce and transportation.
“Tow-truck and charter-bus industries may differ in geographic scope,” they allowed, but “The specific exemption for preemption does not comfortably bear UMA’s narrow reading.”
The court said it should be up to the U.S. Secretary of Transportation to deal with “balkanization or permit regimes” if they occur.
“The Secretary retains authority to invalidate non-safety-laws or safety-related laws when they improperly burden interstate commerce.”
The court also rejected the UMA contention that the permitting regime did not sufficiently address safety needs to fulfill the requirements for preemption of federal law.
“In light of the ordinance’s expressed purpose and effect, we concluded the safety purpose was ‘manifest’ . . . The ordinance contains numerous safety-purpose statements.
“After recounting a history of charter-bus accidents in Texas, the ordinance notes its effectiveness in preventing such deadly accidents. It makes clear that ‘the purpose of the regulations is not to generate revenue but . . . to protect the public health, safety and welfare.’”
The district court, the appeals judges continued, held that the ordinance gave “the City the ability to hold charter bus operators who do not comply with the substantive safety provisions accountable . . . It also noted that the permitting requirements ‘imply the threat of permit revocation,’ making them ‘tools for policing misconduct.’
“UMA may have a point that the City is accomplishing economic goals, such as consumer protection, via some of the permitting regulations. We have recognized, though, that safety and consumer protection are not mutually exclusive categories,” the appellate decision concluded.“The permitting regulations are not preempted by federal law.”
UMA believes the appeals court erred in its conclusions, Presley said.
“The court seems to become entangled in the safety aspect and simply throws in the permits,” he said. “We acknowledge the city’s safety regulatory authority. We simply do not believe they aren’t prohibited from requiring operating authority.”
