MTS Lawsuit Summary


The San Diego Transportation Association, including Orange Cab, Yellow Cab, USA Cab and other various permit holders (petitioners) are seeking a writ of mandate and damages for inverse condemnation from the San Diego Metropolitan Transit system for amending Ordinance 11 without going through the proper process.

A writ of mandate is a request that the California Superior Court review and reverse a final decision or order of an administrative agency (in this case MTS).

Damages for inverse condemnation are damages used to compensate individuals when the government takes private property from individuals but fails to pay the compensation required by the Constitution (in this case the lowered value of an open-market permit).

The petitioners are seeking a writ of mandate to reverse the decision of MTS’ Board to amend Ordinance 11 based on certain stipulations contained within San Diego City Council policy 500-02 that requires taxicab permit cap determinations through the use of a specific formula adopted through Council Policy 500-2. However, effective March 14, 2015, City Council adopted a new version of Council Policy 500-2 that opened the permit process to City discretion without any requirement to use a Council Policy formula.

The petitioners’ second claim is that MTS violated the California Environmental Quality Act (CEQA) by failing and refusing: (a) to determine that adoption of the Amending Ordinance constituted an MTS “project” under CEQA. (b) to fulfill its mandatory CEQA responsibilities and duties prior to approval of this “project” and (c) to prepare an Environmental Impact Report (EIR) prior to amending Ordinance 11. CEQA is a statute that requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible. A public agency must comply with CEQA when it undertakes an activity defined by CEQA as a “project.” A project is an activity undertaken by a public agency or a private activity, which must receive some discretionary approval (meaning that the agency has the authority to deny the requested permit or approval) from a government agency, which may cause either a direct physical change in the environment or a reasonably foreseeable indirect change in the environment. However, exemptions exist for certain state agency actions that are deemed ministerial in nature or fall under other relevant exemption categories.

The permit holders also claim that MTS violated the California Administrative Procedures Act as well as MTS Policies and Procedures Number 34 for various regulatory actions that were arbitrary and lacking in evidentiary support. These claims are based on MTS failing to conduct the proper fact-finding before amending Ordinance 11. As the City of San Diego and MTS are under a contract that includes City-sponsored legal coverage in case of legal action, the City of San Diego is charged with representing MTS against charging petitioners. Lease drivers are impacted by this case if the petitioners can effectively persuade the Superior Court judge to offer injunctive relief (this would halt MTS’ taxicab permit rollout plan) in order to prevent further harm from occurring. An intervening party representing San Diego lease drivers could file a motion to dismiss for failure to state a claim if it can be shown that the petitioners do not have any realized claims for which relief can be properly granted.

On Tuesday April 14, 2015 an ex parte hearing was held to decide whether a temporary restraining order should be granted to temporarily halt the MTS new permit process during litigation. The judge declined to rule on the issue and postponed his decision to take place on April 28, 2015 when he will also decide whether to grant a preliminary injunction that would permanently halt the MTS new permit process. UTWSD has partnered with the Institute for Justice who have successfully done work regarding taxi permits in Minneapolis, Milwakee and other cities.  The judge will also decide on April 28, 2015 whether or not to allow the Institute for Justice to intervene to represent the interests of the taxicab lease drivers affected by this litigation.