Monday, March 09, 2015

Violating taxi regulations isn't unfair competition in Pa.

Checker Cab Philadelphia, Inc. v. Uber Technologies, Inc., 2015 WL 966284, No. 14–7265 (E.D. Pa. Mar. 3, 2015)
Plaintiffs, taxi companies and their dispatch company, sought to enjoin Uber from operating an allegedly illegal taxi operation in Philadelphia; the court denied the motion. Plaintiffs are regulated by the Philadelphia Parking Authority, which provides them with a limited number of medallions allowing them to operate taxis.  Checker has an app, approved by the Authority, allowing people to order a ride at the touch of a button. Uber has a competing app, not approved by the Authority.  It uses drivers who supply their own vehicles and who don’t have medallions.
Here, plaintiffs sought an injunction based solely on its unfair competition claim under Pennsylvania common law: that it was unfair competition to run a taxi service in violation of various state and local taxi cab ordinances.  
The court found no likely success on the merits.  Uber’s alleged regulatory violations couldn’t support an unfair competition claim where enforcement of the relevant laws and regulations is left to regulators, and the laws provide no private cause of action.  The court cited Sandoz Pharmaceuticals Corp. v. Richardson–Vicks, Inc., 902 F.2d 222 (3d Cir.1990), finding exclusive FDA jurisdiction over alleged mislabeling of a product in violation of the FDCA.  (The court did not discuss the extent to which Pom Wonderful limited Sandoz. That might not be vital here, because California is unusual in making violation of other laws a violation of its UCL, and the court did not say that plaintiffs argued that violation of taxi laws resulted in some kind of false advertising.) In Dial A Car, Inc. v. Transportation, Inc., 82 F.3d 484 (D.C.Cir.1996), the D.C. Circuit Court of Appeals also held that private parties couldn’t invoke the Lanham Act to create a private cause of action for enforcement of local taxi regulations.  Similar results obtained in Yellow Group LLC v. Uber Technologies, Inc., 2014 WL 3396055 (N.D.Ill. July 10, 2014), Manzo v. Uber Technologies, Inc., 2014 WL 3495401 (N.D.Ill. July 14, 2014), and Greater Houston Transportation Co. v. Uber Technologies, Inc., Civ. A. No. 14–941 (S.D.Tex. Apr. 21, 2014).  The relevant issues were “best left to the state and local legislative bodies and regulatory authorities charged with implementing and enforcing the ordinances and regulations that Plaintiffs here seek to enforce by way of private litigation.”
Plaintiffs also failed to show irreparable harm.  Plaintiffs argued that a legal violation justified a presumption of irreparable harm, but that was only for state agencies seeking injunctive relief, and not for private parties bringing common-law unfair competition claims. It was also inconsistent with the Third Circuit’s holding in Ferring that Lanham Act violations don’t justify a presumption of irreparable harm.  Plaintiffs’ harm came solely from loss of business or fares, and such harms were compensable in money damages.  And plaintiffs’ argument that their losses were indeterminate also failed: an inability to precisely measure financial harm doesn’t make it irreparable or immeasurable.

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