United States District Court, E.D. Wisconsin
Joe Sanfelippo Cabs Inc, GCC Inc, Roy WMS Inc, Frenchy Cab Co
Inc, 2 Sweets LLC, Plaintiffs: Dean P Laing, LEAD ATTORNEY,
O'Neil Cannon Hollman DeJong & Laing SC, Milwaukee, WI;
Michelle L Jacobs, LEAD ATTORNEY, Steven M Biskupic, Biskupic
& Jacobs SC, Mequon, WI.
City of Milwaukee, Defendant: Adam B Stephens, Milwaukee City
Attorney's Office, Milwaukee, WI.
Jatinder Cheema, Saad Malik, Intervenor Defendants: Lawrence
G Salzman, LEAD ATTORNEY, Institute For Justice, Arlington,
VA; Anthony B Sanders, Meagan A Forbes, Institute For
Justice, Minneapolis, MN; Michael D Dean, Michael D Dean LLC,
ADELMAN, District Judge.
taxicab companies and owners of City of Milwaukee taxicab
permits, challenge the constitutionality of a 2014 City
ordinance that removed the cap on the number of permits that
the City could issue. Several taxicab drivers have intervened
on the side of the City. The City and the intervenors now
move to dismiss plaintiffs' complaint.
City of Milwaukee has regulated the taxicab industry for
decades. In 1992, it enacted an ordinance barring the
issuance of new permits but allowing transfer of previously
issued permits. M.C.O. § 100-50-3-a (1992). That
ordinance created a downward-floating cap; the cap could not
increase because the City did not issue new permits, but it
decreased when a permittee chose not to renew or when a
permit was revoked. The ordinance thus created a market for
permits, and since then the value of a permit has risen
steadily. Plaintiffs collectively own 162 permits, only 6 of
which they obtained directly from the City. Plaintiffs
purchased the others, paying as much as $150,000 for a
2011, several individuals including the present intervenors
successfully challenged the cap under the state constitution
in state court. In response, the City increased the cap by
100 permits. Approximately 1,700 drivers applied for the 100
new permits. In addition, rideshare companies like Uber and
Lyft, which connect passengers with drivers through a
smartphone app, had begun to operate outside the permit
system. Faced with the state court decision, the great demand
for permits, and the activity of the rideshare companies, the
City enacted the 2014 ordinance which both removed the cap
and established regulations governing the rideshare
companies. The removal of the cap allegedly destroyed the
value of the permits in the commercial market.
then commenced the present action. They originally argued
that the new ordinance violated substantive due process and
equal protection but subsequently amended their complaint and
now allege that the ordinance violates the Takings Clause of
the Fifth Amendment. They also bring supplemental state law
the same standard to defendant's motion for judgment on
the pleadings under Fed.R.Civ.P. 12(c) and to
intervenors' motion to dismiss under Rule 12(b)(6).
Adams v. City of Indianapolis, 742 F.3d 720');">742 F.3d 720, 727-28
(7th Cir. 2014). To survive defendants' motions,
plaintiffs must " state a claim to relief that is
plausible on its face." Bell A. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). I accept the complaint's factual allegations
as true, but allegations in the form of legal conclusions are
insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678,
129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
Takings Clause Claim
Fifth Amendment provides that " private property [shall
not] be taken for public use, without just
compensation." To allege a Takings Clause claim,
plaintiffs must plead that (1) they have a property interest
protected by the Fifth Amendment, (2) the 2014 ordinance
effected a taking of that interest, (3) the taking was for
public use, and (4) the state did not provide just
compensation. See Ruckelshaus v.
Monsanto Co., 467 U.S. 986, 1000-01, 104 S.Ct. 2862, 81
L.Ed.2d 815 (1984).
ask whether plaintiffs possess a protected property interest.
Property interests " are created and their dimensions
are defined by existing rules or understandings; " in
other words, plaintiffs must plead " rules or
understandings that secure certain benefits and that support
claims of entitlement to those benefits." Bd. of
Regents of State Colls. v. Roth, 408 U.S. 564, 577, 92
S.Ct. 2701, 33 L.Ed.2d 548 (1972). A protected interest can
arise from state law or a mutually explicit understanding.
Dennis Melancon, Inc. v. City of New Orleans, 703
F.3d 262, 274 (5th Cir. 2012). Plaintiffs must show more than
an abstract need or desire or a unilateral expectation;
rather, they must have a legitimate claim of entitlement.
Roth, 408 U.S. at 577. Those with a legitimate ...