City’s Taxicab Cap Still Unconstitutional, But…

May. 30, 2013
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Milwaukee’s taxicab drivers were happy with Circuit Court Judge Jane Carroll’s decision today that prevents the city from enforcing its taxicab permit cap because it's unconstitutional.

But cabbies won’t be able to apply for new permits just yet.

She’s stayed her decision until the Court of Appeals takes up the case, if or when the city decides to appeal it.

That said, Carroll said she still couldn’t find a valid reason for the city’s very stringent 321-permit cap, which allows permit holders to sell a permit on the private market. A permit is now said to cost about $150,000, shutting out most interested buyers.

The combination of the cap and the transferability on the private market is unconstitutional, Carroll said. The combination of the two created a valuable asset while preventing new applicants from obtaining a new permit through the city.

The city’s reasoning for keeping the cap “misses the whole mark of the decision” she made in April, she said.

Carroll could have decided that the city immediately take applications for permits, but she decided to stay her decision until the Appeals Court acts on it.

Anthony Sanders, the attorney for the cab drivers, said that the city could develop a new permitting system that would be constitutionally sound.

The city has had plenty of opportunities to do so. The current system has been on the books for more than 20 years and Ald. Bob Bauman, seeing the writing on the wall as this case wound its way through the courts, earlier this year proposed lifting the cap gradually so that 100 new permits would be issued within 10 years. The secondary, private market for permit sellers would still be in place. And it's this secondary market combined with the cap that Judge Carroll had a difficult time upholding as unconstitutional.

The cab drivers’ attorney, Sanders, had argued earlier that Bauman’s proposal would still be unconstitutional because it would continue to grandfather in the old permits—the majority are held by the Sanfelippo family’s businesses—while still shutting out interested permit holders.

In the end, though, Bauman’s proposal went nowhere since the Common Council decided to punt and not alienate the Sanfelippos. The council voted to study its options, with a report due back in November.

This morning, Carroll said she wouldn’t wait for the Common Council to act, since that could take forever. The next step is with the Court of Appeals.

This case has had fascinating politics from the start.

You have the cab drivers, who are using a libertarian public interest law firm to strike down a permitting system that has created what amounts to a monopoly with cab drivers as "urban sharecroppers."

So you’d think that the Sanfelippo family, including conservative Republican state Rep. Joe Sanfelippo, would be arguing against this monopoly and for a free market system that helps small-business owners and entrepreneurs—or at least a system developed by the legislative branch of government, not the judicial branch. You know, those pesky activist judges.

And you’d think that the Common Council would jump at the chance to develop its own solution, instead of giving a judge the opportunity to develop city policy.

But the Sanfelippos and the Common Council worked to preserve the current permitting system, even though Mike Sanfelippo told me that getting rid of the permitting system wouldn’t harm his business at all.

Judge Carroll seemed fair but firm this morning in rejecting the city’s arguments. (Well, Assistant City Attorney Adam Stephens didn’t have much to work with, since his arguments were guided by the Common Council’s failure to act.)

Now it’s up to the Common Council to take advantage of the window of opportunity provided by Judge Carroll and break with the Sanfelippo family. The council is going to have to develop a permitting system that doesn’t lead to $150,000 private-market permit sales while enriching one politically powerful family. Or the Appeals Court will do it for them.


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