Independent Taxicab v. Columbus Green Cabs , 84 Ohio App. 3d 361 ( 1992 )

Appellant, Independent Taxicab Association of Columbus, Inc. ("ITAC"), has appealed from a judgment of the Franklin County Court of Common Pleas, which granted the motions for summary judgment of appellees, Columbus Green Cabs ("Green Cabs") and the city of Columbus,¹ and dismissed appellant's complaint for declaratory judgment. Appellant had sought a finding that a contract between the city and Green Cabs was null and void and had sought temporary and permanent injunctions to prevent the city of Columbus from entering into any contract for taxicab services at Port Columbus International Airport. Appellant sets forth the following assignments of error:

"First Assignment of Error

"The trial court erred to the prejudice of the appellant by granting summary judgment herein, because genuine issues of material fact did exist which precluded summary judgment.

"Second Assignment of Error

"The trial court erred to the prejudice of the appellant, as a matter of law, by holding that the existence of a factual dispute is `irrelevant' to the issue of `due process.'"

Appellant's assignments of error are related and will be addressed together.

The system for providing taxicab service at the airport is relatively simple. A cab driver looking for passengers at the airport waits in an area near the north end of the terminal. As cabs are needed, the taxicab starter sounds a buzzer in the waiting area and several cabs drive to the "ready line," a traffic lane set aside for cabs, on the arriving flights level. At the arriving flights level, taxicab drivers deposit a $2 surcharge into a coin machine and pull out a ticket, a gate rises, giving access to the arriving flight level, and the cab pulls forward to pick up the passenger. $1 of the $2 surcharge is charged to the passenger and recovered by the driver.

At sometime prior to the mid-1980s, Yellow Cab Company apparently had a contract to provide exclusive taxi service at the airport. When the city commenced issuing additional taxicab licenses and issued licenses to independent taxi drivers or independent taxi companies, Yellow Cab ceased to do much business at the airport. In the mid-1980s, in an effort to bring some order to the taxicab operation, the city, for a time, entered into a contract with a temporary employment agency and eventually hired its own taxicab starters supervised by Tony Iacoboni, parking facilities manager for the airport. Under Iacoboni's supervision and direction, rules and regulations for taxis were promulgated and an inspection system was devised whereby cabs serving the airport had to display a decal showing the vehicle had passed city inspection. An effort was also made to improve the personal appearance of some of the drivers.

Sometime in the later 1980's, but prior to the time Larry Hedrick was hired as airport manager in July 1987, the city determined to contract for private management of the taxicab service. Hedrick concurred with the decision to privately contract for taxicab starter services for the reasons that such a contract would be a source of revenue for the airport, would reduce costs to the airport and would improve the quality of cab service.

The city advertised for proposals and received several, including submissions by Green Cabs and ITAC. Among the items requested in the request for proposals was a bid for a ratio between the contractors' cabs and other cabs. Such a ratio was to represent the relationship between the total number of cabs called by the starter and the number of those cabs which would belong to the contractor. Green Cabs supplied such a ratio, ITAC did not. Although the proposals from Green Cabs and ITAC were similar, with ITAC offering a larger guarantee to the city, the city determined to accept the proposal from Green Cabs. Iacoboni testified in his deposition that Green Cabs was selected because it had more years of experience in the taxicab business and it had a computer program to monitor vehicle maintenance. In contrast, Iacoboni stated that, at the time the proposal was received, ITAC was a relatively new organization and appeared to have some internal organizational and management problems and that, because of its structure, ITAC had no assets.

In April 1990, Columbus City Council passed Ordinance No. 996-90 to authorize the director of Public Utilities and Aviation to enter into a contract with Columbus Green Cabs to provide for management and coordination of taxicab services at the airport. The ordinance provides:

"WHEREAS, the City has a substantial need to reduce the costs incident to the provision of taxicab service from the Airport and to provide for the efficient management and coordination of such service; and

"WHEREAS, it is in the interest of such sound public policy considerations and to the economic benefit of the City to contract for the exclusive private management and coordination of taxicab service from the Airport[.] * * *

"* * *

"Section 1. That it is hereby deemed to be in the best interest of the City and the traveling public for the purpose of promoting the effective management and coordination of taxicab service from Port Columbus International Airport, and for the economic necessity of the defraying or substantially eliminating the costs incurred by the City therefor, to contract for the exclusive management and coordination of taxicab service from the Airport."

The contract is not part of the record² but, apparently, the parties do not dispute its general terms and conditions. Green Cabs provides taxicab starter service and is granted a ratio of one out of every four cabs, that is, out of every four cabs called by the taxicab starter, one must be a cab of Green Cabs or of a Green-Cabs-affiliated company. Green Cabs collects the two dollar surcharge paid by all cabs entering the airport "ready line" and guarantees payment to the city of $90,000 per year or five cents per enplaned passenger, whichever is greater. Any taxicab company may drop off passengers at the airport or a passenger may call in advance to request a specific cab or request a specific cab from the starter; however, any cab wishing to otherwise pick up passengers at the airport must subcontract with Green Cabs and display a decal apparently indicating some relationship with Green Cabs. The terms and conditions of the subcontract are not part of the record.

Sometime after the contract was signed, ITAC filed suit for preliminary and permanent injunctions, seeking to have the contract declared null and void and to prohibit the city from entering into any similar contract. The trial court overruled the motion for a temporary restraining order and granted appellees' motion for summary judgment.

On appeal, appellant contends the ordinance and contract authorized by the ordinance are a police regulation and that genuine issues of fact exist as to whether the contract bears any reasonable relationship to the health, safety and welfare of the community. Appellant further argues that the contract involved expenditures of public funds and the city was required to advertise for bids in accordance with the provisions of Columbus City Code Chapter 329. Last, appellant contends the ratio in the contract deprived appellant of a property right without due process of law.

In support of their motions for summary judgment, appellees filed the depositions of Tony Iacoboni and Larry Hedrick, as well as a copy of the letter sent to request submission of a proposal. In response, ITAC attached a copy of a complaint and settlement agreement in an antitrust case which prohibited Green Cabs, among others, from entering into an exclusive taxicab service contract at the airport and affidavits of several independent taxicab drivers stating that there were no problems with taxi service at the airport prior to the contract and that the contract has caused them to suffer economic loss.³

Summary judgment is proper if there is no genuine issue of fact and the moving party is entitled to judgment as a matter of law. It is a procedural device designed to terminate litigation at an early stage where a resolution of factual disputes is unnecessary. The burden of showing that no genuine issue exists as to any material fact falls upon the moving party in requesting summary judgment. However, a motion for summary judgment forces the nonmoving party to produce evidence on any issue for which that party bears the burden of production at trial. Wing v.Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108,570 N.E.2d 1095.

Appellant contends that an issue of fact existed as to whether a problem with taxi service existed at the airport and whether there was a need or basis for the contract with Green Cabs. Hedrick and Iacoboni both testified in their depositions that the city had received general complaints about taxi service, primarily about the independent taxi drivers and their cabs. The complaints concerned issues such as the appearance of the drivers and the manner in which they conducted business, as well as the mechanical condition of the cabs. Iacoboni further testified that, while there were problems, many were corrected when the city took over the starter service. The affidavits submitted by appellant in opposition to the motions for summary judgment state there were no problems. Appellant further argues that the contract was merely a subterfuge to give Green Cabs the major portion of the taxicab business at the airport.

Section 4, Article XVIII, Ohio Constitution provides:

"Any municipality may acquire, construct, own, lease and operate within or without its corporate limits, any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants, and may contract with others for any such product or service. The acquisition of any such public utility may be by condemnation or otherwise, and a municipality may acquire thereby the use of, or full title to, the property and franchise of any company or person supplying to the municipality or its inhabitants the service or product of any such utility. [Adopted September 3, 1912.]"

Section 7, Article XVIII, Ohio Constitution provides:

"Any municipality may frame and adopt or amend a charter for its government and may, subject to the provisions of section 3 of this article, exercise thereunder all powers of local self-government. [Adopted September 3, 1912.]"

An airport is a public utility, Toledo v. Jenkins (1944),143 Ohio St. 141, 28 O.O. 72, 54 N.E.2d 656, and the city's direct constitutional grant of authority to operate a public utility, such as an airport, carries with it the necessary authority to make all contracts required to accomplish that goal. State exrel. Sweeney v. Michell (1933), 46 Ohio App. 59, 15 Ohio Law Abs. 25, 187 N.E. 739, affirmed (1934), 128 Ohio St. 266,191 N.E. 98. The contract in question is not a police regulation. A police regulation is enacted for the preservation of the health, safety and morals of the community as a whole, Cleveland Tel. Co.v. Cleveland (1918), 98 Ohio St. 358, 121 N.E. 701, and is an ordinance establishing a standard to which the community is expected to adhere. Rather, the contract in this matter is an exercise of the city's right to license or permit Green Cabs to conduct a business on airport property in much the same manner as the city enters into agreements with restaurants, newsstands, car rental agencies or other services generally associated with a modern airport. In the absence of the city's acquiescence, no one has a right to conduct business at the airport. If there is a right to conduct business and the city seeks to regulate that right, the regulation is a police regulation. If there is no such right to conduct a business but the city grants such a right, it is a license or franchise.

Whether or not an issue of fact existed as to problems with the independent taxicab drivers, the city, pursuant to its authority granted by Sections 4 and 7, Article XVIII, Ohio Constitution, had the authority to enter into a contract with Green Cabs for taxicab starter service. The contract was proper even if the city admitted there was no problem with the existing taxi service at the airport.

In his deposition, Hedrick also testified that, in addition to there being some complaints about the independent taxicabs, the economics of the cab business were the primary reason for the contract. Columbus City Council specifically found that the city benefitted economically from contracting for management services, both in saving costs on personnel and equipment, and in generating revenue. The wisdom of such legislation is for council to determine and appellant presented no evidence which would raise an issue of fact whether the economic considerations supporting the contract were clearly erroneous.

Columbus City Code Chapter 329 provides:

"329.01 Purpose.

"The purpose of this chapter is to establish a purchasing and procurement system of quality and integrity that will maximize the purchasing value of public funds and provide fair and equitable treatment to all persons involved in public purchasing. [Ord. 1426-88.]

"329.02 Application.

"This chapter applies to any purchase of materials, supplies, equipment, construction, service and/or professional service by a City agency and the sale of any City property, whether real or personal. It shall apply to every expenditure of public funds by a City agency for purchasing irrespective of the source of the funds. * * *"

Professional services are defined in Columbus City Code329.04(k) as:

"* * * A service which usually requires advanced training and/or a significant degree of expertise to perform, and which often require official certification or authorization by the State as a condition precedent to the rendering of such service. By way of example and without limiting the generality thereof, professional services include the personal services rendered by architects, attorneys at law, certified public accountants, financial consultants, city and regional planners, management consultants, and professional engineers."

Clearly, management of the taxicab operation at the airport is not a professional service. Further, pursuant to such terms of the contract as are discussed in the briefs and not disputed by the parties, the city is not purchasing services from Green Cabs and was not required to comply with the competitive bidding procedures set forth in Columbus City Code Chapter 329. While efficiently managed taxi service is a convenience and benefit to the travelling public, no direct service is provided to the city itself. The city could operate the airport without taxicab starter services and without taxicabs. Green Cabs was granted a license or a permission by the city of Columbus to do business at the airport, for which it pays the city $90,000 a year or five cents per enplaned passenger, whichever is greater. In return, Green Cabs gets twenty-five percent of the cab business at the airport and the remaining cab companies get the balance or seventy-five percent of the business at the airport. The contract between the city and Green Cabs, to the extent it is set forth in the briefs, is no different than licenses or franchises granted to restaurants, newsstands, car rental agencies or other businesses associated with an airport facility. Hence, because the city was not purchasing services but granting a license or a franchise to do business, it was not required to comply with Columbus City Code Chapter 329.

Appellant also contends that the contract in question deprived appellant of a property right without due process of law; that is, prior to the contract with Green Cabs, appellant had essentially all of the airport business because Green Cabs chose, for whatever reason, not to serve the airport. Pursuant to the contract with the city, one of every four cabs called by the taxicab starter must be affiliated with Green Cabs. Hedrick testified in his deposition that a ratio was deemed necessary to avoid the possibility that whoever received the taxicab management contract would attempt to exclude all other cab companies, as well as to provide additional revenue to the company which received the contract as an incentive to submit a proposal. Contrary to what appellant argues, there is no evidence the ratio was designed solely for the benefit of Green Cabs but, rather, the use of a ratio would benefit whichever cab company was awarded the contract. As noted above, ITAC submitted a request for a proposal with the opportunity to suggest a ratio but failed to do so. The fact that Green Cabs did not provide many services to the airport prior to the inception of this contract is irrelevant, as there was nothing to prevent Green Cabs from doing so, nor was there any right guaranteeing independent taxicab drivers a certain amount of the airport business.

For the foregoing reasons, appellant's assignments of error are overruled, and the judgment of the trial court is affirmed.

Judgment affirmed.

DESHLER, J., concurs.

TYACK, J., concurs in part and dissents in part.

¹ The Columbus Airport Authority was later named as a defendant.

² While a copy of the contract is attached to appellees' brief, it was not filed with the trial court and is not part of the record. App.R. 9(A).

³ Although appellant, in its brief, relies on statements made in the deposition of Kenneth Kaufman, president of Green Cabs, the deposition was not filed with the trial court and is not part of the record. App.R. 9(A).