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Professional Towing & Recovery Operators of Illinois v. Box

December 11, 2008

PROFESSIONAL TOWING & RECOVERY OPERATORS OF ILLINOIS, ET AL., PLAINTIFFS,
v.
CHARLES E. BOX, IN HIS OFFICIAL CAPACITY AS CHAIRMAN OF THE ILLINOIS COMMERCE COMMISSION & TRANSPORTATION DIVISION, DEFENDANT.



The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge

MEMORANDUM OPINION

Before the Court is Plaintiffs' motion for preliminary injunction [18]. For the reasons stated below, the motion is granted in part and denied in part.

I. Background

In this lawsuit, Plaintiffs Professional Towing & Recovery Operators of Illinois, Wes's Service, Inc., and North Shore Towing, Inc. ("Plaintiffs") seek preliminary injunctive relief against enforcement of several provisions of the Illinois Commercial Safety Towing Law ("the State Towing Law"), codified in the Illinois Vehicle Code at 625 ILCS 5/18d-101, et seq. Plaintiffs contend that the challenged provisions are preempted by federal law. They have sued Charles Box, in his official capacity as Chairman of the Illinois Commerce Commission and Transportation Division ("ICC"). Notwithstanding the State of Illinois' Eleventh Amendment immunity from suit in federal court, Chairman Box is a proper defendant in this action under Ex Parte Young, 209 U.S. 123, 156 (1908), which permits federal courts to enjoin state officers "who threaten or are about to commence proceedings, either of a civil or criminal nature, to enforce against parties affected an unconstitutional act, violating the Federal Constitution." A claim that state law conflicts with, and therefore is preempted by, federal law may be maintained under Ex parte Young so long as Plaintiff only seeks prospective declaratory or injunctive relief, and not money damages against the State. See Marozsan v. United States, 852 F.2d 1469, 1494-95 (7th Cir. 1988).

A. The State Law at Issue

Although the State Towing Law was passed by the General Assembly and signed into law by Governor Blagojevich in 2007, it did not go into effect until July 1, 2008. On August 28, 2008, the ICC adopted final rules implementing the Act. Those rules were published at 92 Ill. Admin. Code 1715.5, et seq., and took effect on September 15, 2008. The State Towing Law applies in counties with a population of more than one million people and in counties with fewer than one million people that have adopted the Commercial Relocation of Trespassing Vehicles Law (625 ILCS 5/18a; 625 ILCS 5/18d-180). At the present time, only 5 of the 102 counties in Illinois are affected: Cook, Will, Kane, DuPage, and Winnebago Counties.

The State Towing Law regulates "commercial vehicle safety relocators," which the law defines as persons or entities "engaged in the business of removing damaged or disabled vehicles from public or private property by means of towing or otherwise, and thereafter relocating and storing such vehicles." 625 ILCS 5/18d-105. Thus, the law applies to all businesses that tow and store damaged or disabled vehicles. The State Towing Law includes the following statement of "[p]ublic interest and public welfare":

The General Assembly finds and declares that commercial vehicle towing service in the State of Illinois fundamentally affects the public interest and public welfare. It is the intent of the General Assembly, in this amendatory Act of the 95th General Assembly, to promote the public interest and the public welfare by requiring similar basic consumer protections and fraud prevention measures that are required of other marketplace participants, including the disclosure of material terms and conditions of the service to consumers before consumers accept the terms and conditions. The General Assembly also intends that the provisions in this amendatory Act of the 95th General Assembly promote safety for all persons and vehicles that travel or otherwise use the public highways of this State. The General Assembly finds that it is in the public interest that persons whose vehicles are towed from the public highways know important basic information, such as where they can retrieve their vehicles and the cost to retrieve their vehicles, so that they can avoid vehicle deterioration and arrange for a prompt repair of the vehicles. 625 ILCS 5/18d-110 (emphasis added). As that statement makes clear, the General Assembly's objectives in enacting the State Towing Law included "consumer protection," "fraud prevention," and "promot[ing] safety." Id.

While it is unclear whether the brief transcript of the House debate attached to Plaintiffs' reply brief constitutes the entirety of the legislative history of the State Towing Law, all of the legislative history currently before the Court at least marginally reinforces some of the objectives referenced in the text of the statute -- although it focuses primarily on what appear to be consumer protection concerns.*fn1 As Representative McCarthy stated during the House of Representatives' consideration of the bill, it was intended "to address the problem in some of the counties up in the northeast part of the state where some towers were taking advantage of a lot of the local residents." Representative McCarthy acknowledged that a prior version of the bill "would have been bothered by a federal preemption about setting rates for towers" and that the bill that ultimately was passed and enacted into law was "a complete disclosure" bill to "protect[]" citizens from "abuse[] by some of these towers who don't do it the right way." He later reiterated that "the way the Senate passed" an earlier iteration of the bill "would go against a federal preemption," and that the bill presented for consideration in the House contained "protections" for "our consumers."*fn2

In Plaintiffs' second amended complaint, they challenge the following specific provisions of the State Towing Law as preempted by federal law:

* Section 18d-115, requiring towing companies engaged in consensual towing*fn3 to obtain a safety relocator's registration certificate from the ICC, for which the companies must pay an annual fee of $450 and an additional fee of $150 per towing vehicle;

* Section 18d-120, requiring towing companies to obtain specific authorization prior to towing a damaged or disabled vehicle, to provide specific and detailed written disclosures to vehicle owners or operators, and to maintain copies of completed disclosures for a minimum of five years;

* Section 18d-125, requiring towing companies to issue itemized final invoices to vehicle owners or operators on demand and to retain copies of such invoices for a period of five years;

* Section 18d-130, requiring towing companies to post signs at their storage facilities advising customers of their rights;

* Section 18d-135, requiring towing companies to maintain copies of all disclosures and invoices for five years and to make such records available for inspection by the ICC and imposing penalties or fines for violations;

* Section 18d-145, requiring copies of the safety regulator's registration certificate to be carried in each tow truck;

* Section 18d-150, prohibiting towing companies from including in their contracts with owners or operators of damaged or disabled vehicles clauses that waive or limit the towing companies' liability;

* Section 18d-155, imposing penalties and fines for failure to comply with the Towing Safety Law; and

* Section 18d-165, requiring that charges accrued by vehicle owners or operators for consensual tows to be payable by cash or major credit card.

B. The Federal Law at Issue

According to Plaintiffs, the nine challenged provisions of the State Towing Law conflict with, and thus are preempted by, Section 14501(c) of the Interstate Commerce Act, as amended by the Federal Aviation Administration Authorization Act and the I.C.C. Termination Act of 1995. 49 U.S.C. § 14501(c). Section 14501(c) states, in pertinent part:

(1) General rule. -- Except as provided in paragraphs (2) and (3), a State * * * may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier * * * with respect to the transportation of property.*fn4

(2) Matters not covered. -- Paragraph (1) --

(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a state to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization; * * *

49 U.S.C. § 14501(c) (emphasis added). Section 14501(c) thus expressly contains both a "general rule" of preemption and an exception for certain "[m]atters not covered" by that general rule.*fn5

C. The Procedural History of This Case

Plaintiffs filed this lawsuit on July 18, 2008. They contend (i) that the challenged provisions of the State Towing Law have a direct and substantial effect on the "prices, routes, and services" of towing-motor carriers engaged in consensual towing operations in violation of federal law, and (ii) that those provisions are not saved from federal preemption under the exception for state safety regulations. After the filing of the lawsuit, Defendants temporarily deferred enforcement of the new law. Subsequently, the ICC adopted its implementing regulations and commenced enforcement. Plaintiffs then brought their motion for a preliminary injunction [18]. While the briefing on that motion was in progress and following negotiations between the parties, Defendant filed the following stipulation [25]:

In the event the Court deems any portion of the Safety Towing Law, 625 ILCS 18d/101 et seq., to be preempted by federal law, the Defendant, Charles E. Box, Chairman of the Illinois Commerce Commission & Transportation Division, agrees that any fines or penalties levied for violations of those preempted sections will be refunded.

While Plaintiffs thus expect to recover any "fines or penalties" levied for violations of portions of the State Towing Law that may be found to be preempted in the final analysis, Plaintiffs have acknowledged that they "are not seeking money damages" from Defendant (or, by extension, from the State) in this case. Pls. Reply Br. at 12. As a result of that clarification, and of Plaintiffs' decision to bring this action against Chairman Box in his official capacity, there appears to be no Eleventh Amendment bar to any of Plaintiffs' requested relief, nor has Defendant suggested any such bar.

Before turning to the legal analysis, the Court notes the limited record on which the motion for preliminary injunction has been presented for decision. In support of their motion, Plaintiffs have provided affidavits of two individuals who are involved in the towing business. Both affiants, William Howard and Brian Booker, relate information concerning the enforcement by the ICC of certain provisions of the State Towing Law. Mr. Booker also avers that complying with the State Towing Law will require towing operators to spend additional time on the sides of busy roadways and will cause operators to interact more with members of the public while performing the additional services required under the Law. At the September 18 hearing on the presentation of the motion, counsel for Defendant indicated that Defendant might wish to put in evidence -- either in the form of affidavits or live witnesses -- in opposition to Plaintiffs' motion and in support of Defendant's contention that the new law advances safety concerns. However, at the next status on October 8, counsel for Defendant advised the Court that Defendant would not be presenting affidavits or other evidence in connection with the briefing on the motion for preliminary injunction, but anticipated submitting evidence, including affidavits, at the summary judgment stage.

As a consequence of the limited record, the Court's rulings necessarily are more tentative than they might be on a more robust record. For example, a more developed record may shed light on the extent to which provisions of the State Towing Law impact the "prices, routes, and services" of towing companies -- and whether any such impact is significant or merely incidental or remote. In a similar vein, further factual inquiry may illuminate the extent to which the various provisions of the state law are genuinely responsive to legitimate safety concerns. It also bears mentioning that, as Plaintiffs have recognized (Pls. Reply Br. at 12 n.4), the stipulation pursuant to which Defendants have agreed to refund any fines or penalties imposed under any provision that is found to be preempted has significantly altered the irreparable harm calculus that the Court must undertake in deciding whether to grant the preliminary injunctive relief that Plaintiffs have requested. Compare Pls. Opening Br. at 12 with Pls. Reply Br. at 12 & n.4.

To be sure, the abbreviated record and the corresponding risk that the Court's opinion may rest on a less than complete understanding of the issues in the case are by no means unusual or unique to this case. As the Eleventh Circuit recently explained, "[w]hile there may be clear cut cases where preemption questions can be resolved on the pleadings, * * * it is far more common to resolve issues like the ones here at summary judgment with the benefit of a complete understanding of the impact of the regulations." Taylor v. Alabama, 275 Fed. Appx. 836, 842, 2008 WL 1868083, at *5 (11th Cir. Apr. 29, 2008).

II. Analysis

A. Preliminary Injunction Standard

Like all forms of injunctive relief, a preliminary injunction is "an extraordinary remedy that should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Mazurek v. Armstrong, 520 U.S. 968, 972 (1997). In the Seventh Circuit, a court must consider the following factors in deciding whether to grant a preliminary injunction: (i) the prospect of some likelihood of success on the merits of the claim; (ii) the presence of irreparable harm to the moving party, (iii) the absence of an adequate remedy at law; (iv) the balance of the harms between the parties, and (v) the public interest. See, e.g., Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380, 386-88 (7th Cir. 1984). The first two factors must be considered at the threshold, for when the moving party has no chance of success on the merits or cannot make any showing of irreparable harm, a motion for preliminary injunction ordinarily will be denied on that ground alone. See Praefke Auto Elec. & Battery Co. v. Tecumseh Prods. Co., 255 F.3d 460, 463 (7th Cir. 2001); Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11-12 (7th Cir. 1992). Under the "sliding scale" approach employed in this circuit, "the more likely plaintiff will succeed on the merits, the less the balance of irreparable harms need favor ...


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