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Evanston Cab Co. v. City of Chicago

December 18, 1963

EVANSTON CAB CO., SKOKIE RED TOP CAB CO., AND LINCOLNWOOD RED TOP CAB CO., ILLINOIS CORPORATIONS
v.
CITY OF CHICAGO, A MUNICIPAL CORPORATION, FLASH CAB CO., PUBLIC TAXI SERVICE, INC., ABERNATHY TAXI ASSOCIATION, INC., SOUTH SIDE CAB CO., AND COMMERCIAL CAB CO., ILLINOIS CORPORATIONS; YELLOW CAB CO., CHECKER TAXI CO., INC., AND HIGHLAND CAB COMPANY, INC., FOREIGN CORPORATIONS LICENSED TO DO BUSINESS IN ILLINOIS; BERTEL W. DAIGRE; AMERICAN UNITED CAB ASSOCIATION, AN INCORPORATED ASSOCIATION; JACK TAYLOR, INDIVIDUALLY AND AS PRESIDENT OF THE DEFENDANT AMERICAN UNITED CAB ASSOCIATION; PETE BARBERO, INDIVIDUALLY AND AS SECRETARY OF THE DEFENDANT AMERICAN UNITED CAB ASSOCIATION; JOHN C. MELANIPHY, JAMES Y. CARTER, RAY SIMON, AND THOMAS J. COONEY.



Author: Schnackenberg

Before HASTINGS, Chief Judge, SCHNACKENBERG and SWYGERT, Circuit Judges.

SCHNACKENBERG, Circuit Judge: Evanston Cab Co., Skokie Red Top Cab Co. and Lincolnwood Red Top Cab Co., Illinois corporations, plaintiffs, brought an action against the City of Chicago, a municipal corporation, defendant, and the other defendants above-named, in the district court, under the Clayton Act, 15 U.S. C.A. §§ 15, 26, and the Sherman Act. 15 U.S.C.A. §§ 1, 2.

On motion of defendants, the action was dismissed at plaintiffs' costs. This appeal followed.*fn1

The relevant facts as shown by the pleadings we set out in condensed form.

Chicago-O'Hare International Airport is an airport owned by the defendant City of Chicago and is the primary scheduled airline airport for the Chicago Metropolitan area consisting of the counties of Cook, Lake, DuPage, McHenry, Kane and Will, in the state of Illinois, and the counties of Lake and Porter in the state of Indiana. O'Hare is twenty-three miles from downtown Chicago and until March 28, 1956 was not within the incorporated area of the City of Chicago. On that date it was annexed to the city. Physically it is completely separated from the rest of the corporate area of the city except for a connecting strip of Higgins Road and East River Road. All but a very small portion of passengers arriving at O'Hare in scheduled airline planes originate their flights outside the State of Illinois.

Plaintiffs are respectively engaged in the operation of taxicabs in the municipalities of Evanston, Skokie and Lincolnwood, in suburban Cook County.

The complaint alleges that 6,700,000 persons live in the Chicago metropolitan area and that all persons completing flights at O'Hare engage some form of further transportation to take them to their ultimate destination in the Chicago Metropolitan Area. To provide this further transportation the Chicago Helicopter airways has scheduled flights between O'Hare, Midway Airport, downtown Chicago, Gary, Indiana and Winnetka, Illinois. All other public transportation in interstate commerce of persons completing flights at O'Hare to their final destinations in the Chicago Metropolitan Area is by taxicab.*fn2

The complaint charges that defendant taxicab concerns and other defendants conspired among themselves and with others to eliminate and restrict competition in the providing of taxicab service at O'Hare, by ratifying a prior prohibition of the plaintiffs from providing taxicab service to persons traveling in interstate commerce completing their flights at O'Hare, and by agreeing to prohibit all persons from providing such service in the regular taxi line except the cab company defendants and other taxicabs licensed by the City of Chicago, and further agreed to permit the plaintiffs to render taxi service at O'Hare only when specifically contracted for by letter, telegram or telephone prior to rendering such service, thus placing the plaintiffs at a distinct competitive disadvantage.

The complaint further charges that the city council of defendant city enacted an ordinance effectuating said agreements and that it and certain other ordinances, copies of which are attached to the complaint, which limit plaintiffs in providing taxi service at O'Hare, are therefore unreasonable, discriminatory and deprive plaintiffs of their property without due process of law, contrary to the fourteenth amendment to the constitution of the United States.

The complaint further charges that the conspiracy and ordinance "actually restrain, burden and monopolize interstate commerce."

Plaintiffs seek recovery of damages for losses sustained by reason of the facts charged, relying on §§ 4 and 16 of the Clayton Act, 15 U.S.C.A. §§ 15, 26, and §§ 1 and 2 of the Sherman Act. 15 U.S.C.A. §§ 1, 2.

1. The United States Supreme Court has made clear that local operations of taxicabs, such as those involved in this case, do not constitute a part of interstate commerce within the meaning of the Sherman Act. United States v. Yellow Cab, 332 U.S. 218, 230 (1947), which we relied upon in Parmelee Transportation Company v. Keeshin, 292 F.2d 794 (1961), cert. den. 368 U.S. 944.

In Yellow Cab, at 230, the court said:

"Finally, it is said that the appellees have conspired to control the principal taxicab operating companies in Chicago and to exclude others from engaging in the transportation of interstate travelers to and from Chicago railroad stations. To that end, they have conspired to induce the City of Chicago to limit the number of licensed taxicabs to 3,000, to hold 2,595 (or 86%) of these licenses themselves, to obtain for Yellow and Checker any licenses above 3,000 which the city might later issue, and to prevent new operators from entering the cab business in Chicago by having Yellow and Checker annually renew licenses for cabs which they do not operate and have no intention of operating."

Then, answering the contention that the passengers in the taxicabs there involved were being transported in ...


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