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United Motorcoach Association, Inc. v. City of Austin

United States Court of Appeals, Fifth Circuit

March 17, 2017

CITY OF AUSTIN, Defendant-Appellee

         Appeal from the United States District Court for the Western District of Texas

          Before DAVIS, DENNIS, and SOUTHWICK, Circuit Judges.

          LESLIE H. SOUTHWICK, Circuit Judge.

         This appeal raises the issue of whether federal law preempts a city's exercise of regulatory authority over the intrastate operation of charter buses. A national association of charter-bus companies sought to enjoin regulations affecting their operations enacted by the City of Austin, Texas. The district court held that the regulations were not preempted. We AFFIRM.


         An Austin city ordinance regulates "charter bus service, " which it defines as "transportation provided for compensation at the request of a third party for the exclusive use of a vehicle with a capacity of at least sixteen persons . . . providing service originating, terminating and travelling solely within the city limits." Austin City Code § 13-2-1(1). Under the first set of relevant regulations, the "permitting regulations, " operators of charter-bus service must obtain a city permit, which requires them to submit an application including various pieces of information as to the association between the holder and its vehicles, the applicant's criminal history, current vehicle inspections and drivers' licenses, and proof of valid federal or state operating authority. Id. § 13-2-253.

         The permitting regulations also regulate charter-bus operations within Austin. Matters covered include how passengers may be dropped off in relation to the curb and what must be done if a bus breaks down. Id. §§ 13-2-270, 271. Failure to comply with the permitting regulations can lead to revocation or suspension of an operator's permit. Id. § 13-2-263. The ordinance also contains another set of regulations, the "decal regulations, " which require each operator to display at all times a decal of its permit and, when relevant, a "special event permit." Id. § 13-2-267, 285.

         In 2013, United Motorcoach Association ("UMA"), a national association of professional bus companies, filed this suit against the City seeking a permanent injunction against both the permitting and the decal regulations. It argued that the regulations are preempted by federal law. In March 2014, the district court denied a preliminary injunction on any part of the regulations except for two provisions that are not at issue in this appeal. After UMA amended its complaint in early 2015, cross-motions for summary judgment were filed in July. In January 2016, the district court granted UMA a permanent injunction as to the decal regulations but denied any further relief. UMA's appeal solely concerns the district court's ruling denying relief as to the permitting regulations. The City has not appealed.


         The arguments about preemption are based on a federal statute captioned "Federal authority over intrastate transportation." See 49 U.S.C. § 14501. It provides that States and their governmental subdivisions may not enforce rules affecting interstate or intrastate transportation by a motor carrier of passengers, with identified exceptions. Id. § 14501(a). There is much more to the statute, and we will presently analyze the relevant parts.

         In determining a federal statute's preemptive reach, congressional purpose is "the ultimate touchstone." Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) (quotation marks omitted). "Evidence of pre-emptive purpose is sought in the text and structure of the statute at issue, " and "in the first instance [we] focus on the plain wording of the clause, which necessarily contains the best evidence of Congress' pre-emptive intent." CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993). Nonetheless, "we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." City of Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 432 (2002) (quotation marks omitted). That means that when there is "more than one plausible reading [of the text, we] ordinarily accept the reading that disfavors pre-emption." Altria Grp., Inc. v. Good, 555 U.S. 70, 77 (2008) (quotation marks omitted).

         The preemption issue that remains in this suit arises from the district court's holding that a savings clause in the statute exempted the permitting regulations from preemption.[1] We thus address only whether the permitting regulations are preempted.

          The party seeking a permanent injunction must satisfy a four-part test: it must show (1) success on the merits; (2) the failure to grant the injunction will result in irreparable injury; (3) the injury outweighs any damage that the injunction will cause the opposing party; and (4) the injunction will not disserve the public interest. VRC LLC v. City of Dallas, 460 F.3d 607, 611 (5th Cir. 2006). We start with the district court's preemption rulings, which are legal issues we review de novo. Id.

         The key sections of the statute at issue provide:

(a) Motor Carriers of Passengers.
(1)Limitation on State law.-No State or political subdivision thereof shall enact or enforce any law, rule, regulation, standard, or other provision having the ...

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