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Portland Discount Transportation Lawsuit Moves Forward


Portland, Ore.

Portland’s transportation entrepreneurs will get their day in court after the U.S. District Court for the District of Oregon ruled yesterday that their lawsuit against the city of Portland can go forward.

Yesterday’s ruling is part of a civil rights lawsuit filed by two independent limousine and sedan companies—Towncar.com and Fiesta Limousine—that were threatened with a combined $895,000 in fines and revocation of their operating permits simply for offering their customers discounts on Groupon.com. Their lawsuit argues that the city’s only objective is to protect the profits of Portland’s taxicab companies.

In 2009, the city passed a law requiring a $50 minimum fare for limousine and sedan rides to or from Portland International Airport. The law also imposes a city-wide minimum fare that requires limos and sedans to charge at least 35 percent more than whatever taxis choose to charge for the same route. The law also imposes a one-hour minimum wait time before customers can be picked up. None of these requirements apply to taxicabs.

The city asked the Court to throw out the case, but in yesterday’s ruling, Magistrate Judge John V. Acosta refused. “Courts have repeatedly recognized that protecting a discrete interest group from economic competition is not a legitimate governmental purpose,” Judge Acosta wrote. Tuesday’s decision also dismissed the plaintiffs’ equal protection claim because the Court found limos and sedans are not regulated in exactly the same way as taxicabs.

READ THE FULL DECISION

“Portland has outlawed innovations that help consumers, just to help taxicab companies make more money,” said Wesley Hottot, an attorney with the Institute for Justice who is representing the plaintiffs. “That’s not just wrong. It’s unconstitutional. And yesterday’s ruling is a big step toward vindicating our clients’ right to choose what they charge their customers.”

“Offering Groupon discounts should not be a crime,” said Mike Porter, who runs Towncar.com and is the lead plaintiff in the case. “We just want to be left alone to attract new customers with competitive pricing, online discounts and prompt service. Whose side is the city on, anyway?”

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