UMA requests rehearing in Austin charter regulation case


NEW ORLEANS — The United Motorcoach Association has asked a federal appeals court to reconsider its ruling that granted Austin, Texas, the authority to regulate interstate motor carriers by requiring permits.

The U.S. Court of Appeals for the Fifth Circuit ruled in March that the Austin ordinance does not contradict apparent federal interstate commerce preemptions because of a “nexus to safety.”

UMA filed a petition for panel rehearing with the court on March 31, arguing the panel’s decision improperly overlooked three key points of the association’s case:

  • Federal law preempts states from regulating interstate motor carriers.
  • Texas law does not grant such authority to municipalities.
  • Austin failed to prove its ordinance is saved from federal preemption by addressing “genuine” safety concerns.

“Although these arguments were potentially determinative of outcome, the Court held in its March 17, 2017, opinion that UMA either forfeited or waived each claim, thereby declining to substantially adjudicate them,” the UMA petition for rehearing states.

“UMA argues each issue was properly before the court, argued by the opposition, and respectfully requests that in this long and storied controversy of great importance they be resolved.”

The three-judge appeals court panel’s ruling stemmed from a federal suit filed by UMA in 2013 to challenge Austin’s ordinance imposing fees and numerous prerequisites for operating motorcoaches in the city.

In addition to detailed operating and application regulations, the ordinance would require motorcoach operators to pay a $375 annual vehicle fee to operate in Austin or face impoundment of their motorcoaches.

Violations also could result in suspension of local operating authority and citations charging operators with Class C misdemeanors punishable by fines of up to $500.

The appellate decision was signed by Judges W. Eugene Davis, James L. Dennis and Leslie H. Southwick of the U.S. Fifth Circuit in New Orleans, which covers Texas, Louisiana and Mississippi.

UMA argued that state and local governments may enforce motor vehicle operating and safety regulations but are preempted from imposing their own layers of operating authority.

The city of Austin responded that its ordinance is necessary for its enforcement of safety regulations and therefore would be permitted under exceptions to federal preemptions of state regulations regarding operating authority.

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 local 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.”

In its Aug. 15, 2016, appeal of the district court decision, UMA again insisted that federal law does not allow municipalities to require permits for interstate carriers traveling within their jurisdictions.

“The ruling would allow (encourage even) the nation’s more than 10,000 municipalities to require permits on interstate or intercity operations,” the appeal stated. “Every jurisdiction is duty-bound to impose safety rules on motor vehicles per its traditional police power . . . What the city cannot do is . . . impose a permitting regime neither motivated by safety nor logically connected to achieving safety.”

The core of the appellate decision was that “UMA forfeited its argument against the City’s Charter Service Order (CSO) (by) the Court’s assumption that UMA did not raise the claim in its Complaint but rather only in its Response to the City’s Summary Judgment motion,” wrote UMA attorney Dan R. Mastromarco in the petition for rehearing.

He stated that the petition cited numerous instances in which the federal preemption law was argued in written and oral proceedings.

“Not only did UMA consistently claim Austin’s CSO requirement was preempted by 49 USC 14506, it repeatedly briefed the issue,” Mastromarco wrote.

The second section of the association’s petition is titled, “UMA Never Abandoned Its Argument that Texas Law Directly Denied Austin Authority to Issue Permits.”

“Although UMA ultimately cited to supplemental authority directly controverting Austin’s claim it had the right to regulate charter buses, this Court ruled UMA abandoned the argument,” the petition states.

While an initial brief did not cite the pertinent section of the Texas Transportation Code, “the omission was rectified” under a letter meeting federal court procedure rules “and through oral argument, and should not justify dismissal of what is a critical and dispositive argument, known to the opposition, raised many times in the court below, and squarely presented on appeal.

“UMA consistently raised the argument that Texas not only did not delegate authority to Austin to regulate charter buses but took that authority away.”

Citing Texas law and court decisions, UMA continues, “Texas has expressly limited Austin’s power to regulate passenger vehicles to limousines that carry no more than 15 passengers.”

The petition’s second section concludes, “Aware of UMA’s reliance upon (state law subsection) 502.003 for its critical state-law claim, this Court should rule upon the merits accordingly.”

Most importantly, UMA petitioned the appeals court to remand the case to the district court for meaningful consideration of reasons why Austin claims it must have power to deny operating authority to interstate carriers.

“UMA’s opening brief argued assiduously for remand, hoping to ensure the lower court fulfilled its obligation to analyze the regulatory scheme provision-by-provision to determine the ‘logical’ or ‘genuine’ connection of its requirement to a safety purpose.

“The real question is whether all that bears on the permit requirements—the granting, denial, suspension or revocation of them—have a logical connection to safety. The Permit requirements are inextricably linked with the underlying regulatory requirements because a Permittee must abide by them to obtain and maintain the Permit.”

According to legal precedent, UMA argues, “localities wishing to avail themselves of the safety savings clause bear the burden to show an otherwise preempted regulatory regime falls within it . . . Rather than making it incumbent on UMA to prove the lack of a safety regulatory nexus, the City’s obligation was to explain how, through its own enactments, it satisfied the safety regulatory authority.”

The argument continues, “The record does not reflect how the City met its burden. The City’s only witness, parking official Thomas, could not identify the safety purpose of the original requirements . . . Austin’s attorney admitted he had no idea how the City justified the safety-related aspects of its own ordinances.

“Through over 65 paragraphs of the (affidavit) of court-qualified industry expert (Ken) Presley, UMA identified each of the dozens of requirements imposed on charter buses by the regulatory scheme. UMA examined provision-by-provision its safety justification or lack thereof.”

Presley is UMA’s vice president of industry relations and chief operating officer.

Among the ordinance’s provisions is a requirement for operating heating and air conditioning; guidelines for handling property left behind by a passenger; and a mandate that the motorcoach “must be equipped with a spare tire, a jack and a lug nut wrench.”

Applications for an Austin “Charter Service Order” must include contact information for the person who booked the trip and at least one passenger; the date and time the reservation was made; locations of passenger pickups, intermittent stops and drop-offs; service rates and fares paid by each passenger; and certified copies of the carrier’s state business registration.

In addition, the application must include “The name, address, telephone number and driver’s license number of the applicant, and each officer, director, partner, and any other person who will participate in the business decisions” of the carrier.

UMA adds that in one of Austin’s briefs, “The City even admitted some of the provisions had no safety justification. There was little else UMA could do to satisfy the lower court in its analysis, and we ask the Court to remand for the requisite consideration . . . In the alternative, UMA asks this (appellate) Court to restore the case to the calendar for re-argument or re-submission.”

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