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Monday, February 22, 2016

Chicago's Taxi Regulations Not a "Taking"

The Seventh Circuit Court of Appeals issued an interesting ruling last week in response to a Chicago cab driver's lawsuit against the City of Chicago claiming that the City of Chicago's taxi fare regulations (1) were an unconstitutional "taking" of her property and (2) violated the minimum wage laws. The Court acknowledged the uniqueness of the cab drivers' claims, but ultimately ruled in the City's favor.  Callahan v. Chicago (7th Cir., Feb. 17, 2016)

The Court first determined that the cab drivers' takings claims should be dismissed because the cab driver did not own any asset that had been reduced by the City's regulation of taxi fares.  She didn't own her own cab or medallion, and instead leased these from others. In the Court's view, the only asset she has is her time, and she could choose to use that time driving a cab or doing some other job.  
Even if she had owned her own cab and medallion, the Court found that the City's fare structure had not, historically, impacted the price or value of medallions. In 2007, a taxi medallion sold for $64,000, but in 2013, new medallions sold for $360,000.  As a result, even owners of these assets could not show a negative impact on their assets from the City's fare structure.

The cab driver's second argument was that the City's taxi regulations effectively reduced her compensation below the minimum wage and the City was liable to pay the difference to her. The Court rejected her argument on the basis that the City was not her employer and could not, therefore, be held responsible for payment of minimum wages to taxi drivers. In short, the Court concluded that extensive regulation by a government does not make that government an employer of the regulated parties.

Post Authored by Julie Tappendorf


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