Opinion
Civil Action 2:22-cv-00392
10-11-2022
MIKE'S AUTO REPAIR & SALES, INC., Plaintiff, v. GERMAN TOWNSHIP, a municipal corporation, Defendant.
Christy Criswell Wiegand District Judge
REPORT AND RECOMMENDATION
Re: ECF No. 4
MAUREEN P. KELLY UNITED STATES MAGISTRATE JUDGE
I. RECOMMENDATION
Plaintiff Mike's Auto Repair & Sales, Inc. (“Mike's Auto”) brings this action against Defendant German Township (the “Township”) arising out of allegations that the Township violated the Equal Protection Clause of the Fourteenth Amendment by scheduling Mike's Auto to provide towing services for substantially less time than a similarly situated towing company. ECF No. 1. Presently before the Court is a Motion to Dismiss filed by the Township. ECF No. 4. For the reasons below, it is respectfully recommended that the Motion to Dismiss be denied.
II. REPORT
A. FACTUAL AND PROCEDURAL BACKGROUND
1. Factual Allegations
Mike's Auto is a business that provides towing services. ECF No. 1 ¶ 7. Mike's Auto owns property and conducts business in the Township, and it pays taxes to the Township. Id. ¶ 8.
In March 2020, the Township enacted an Ordinance regarding the towing and storage of damaged, abandoned, immobilized, disabled or illegally parked motor vehicles. ECF No. 4-1.
Regarding towing rotation, it provides:
Towing Rotation: Police Commissioner shall maintain the list of licensed township towing companies, listed alphabetically, to be requested by authorized employees on a rotating basis. The rotation period shall be determined by the Police Commissioner and adhered to by the Township & Police in making towing requests. When the towing company off the list is called for a towing request and an owner or employee of the company fails to personally answer the phone, the next towing company on the rotation will be requested. A current list shall be maintained at all times by the police. This rotation may be waived when, in the opinion of the Police or Code Official, the immediate removal of a vehicle or vehicles is critical to the public safety and is at the discretion of the Office on scene.Id. at 5.
The Township includes this document as an exhibit to its Motion to Dismiss and asserts that, although it is titled a “Resolution,” it was enacted as an ordinance. ECF No. 5 at 2 n. 1; ECF No. 4-1. In resolving a motion to dismiss, the Court may consider allegations in the Complaint, exhibits attached to the complaint, matters of public record and undisputedly authentic documents that a defendant attaches as an exhibit to the motion to dismiss if the plaintiffs claims are based on the documents. Pension Ben. Guar. Corp., v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). A city ordinance is a public record. Diaz v. City of Passaic, No. 16-9282,2019 WL 6130773, at *4 (D.N.J. Nov. 19, 2019). Moreover, Mike's Auto does not object to the Township's citation to this ordinance and likewise relies on it to oppose the Motion to Dismiss. ECF No. 7 at 9. As a result, the Court finds that this document is properly considered here.
In 2021, the Township, through its supervisors, requested towing services from the following businesses on a weekly rotation: (1) Mike's Auto; (2) Mary Beth's Towing; and (3) Arnold's Towing. ECF No. 1 ¶ 9. The Township supervisors then created, approved, and distributed a calendar with the dates it would request towing services from each of these businesses in 2022. M¶ 10.
Under this schedule, the Township is scheduled to request towing services from Arnold's Towing a disproportionately higher number of weeks in 2022 compared to the number of weeks that it is scheduled to request towing services from Mike's Auto. Id. ¶ 12. For example, there are multiple months in which the Township is scheduled to request services from Arnold's Towing for two consecutive weeks, but it is only scheduled to request services from Mike's Auto for one week. Id. ¶ 13. In August 2022, the Township was scheduled to request towing services from Arnold's Towing for three weeks, while Mike's Auto does not appear on the schedule at all. Id.
Mike's Auto's owner, Michael Duritsky, reported these inconsistencies to the Township's supervisors. Id. ¶ 16. Township supervisor Louis Otto responded that the Township can “do whatever [it] wants to do.” Id.
2. Legal claim
Based on these allegations, Mike's Auto claims that the Township violated the Equal Protection Clause of the Fourteenth Amendment under a “class of one” theory. Id. ¶¶ 20-23. Mike's Auto asserts that the Township treated it differently than a similarly situated business, Arnold's Towing, and that there was no rational basis for this difference in treatment. Id. ¶ 21.
3. Motion to Dismiss
The Township filed the instant Motion to Dismiss and Brief in Support on May 24, 2022. ECF Nos. 4 and 5. Mike's Auto filed a Brief in Opposition on June 15, 2022. ECF No. 7. The Township filed a Reply. ECF No. 10. The Motion to Dismiss is now ripe for consideration.
B. STANDARD OF REVIEW
In assessing the sufficiency of a complaint pursuant to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must accept as true all material allegations in the complaint and all reasonable factual inferences must be viewed in the light most favorable to the plaintiff. Odd v. Malone, 538 F.3d 202, 205 (3d Cir. 2008). The Court, however, need not accept bald assertions or inferences drawn by the plaintiff if they are unsupported by the facts set forth in the complaint. See Cal. Pub. Employees' Retirement Sys, v. The Chubb Corp., 394 F.3d 126,143 (3d Cir. 2004) (citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997)). Nor must the Court accept legal conclusions set forth as factual allegations. Bell Atlantic Corp, v. Twombly, 550 U.S. 544, 555 (2007). Rather, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Indeed, the United States Supreme Court has held that a complaint is properly dismissed under Fed.R.Civ.P. 12(b)(6) where it does not allege “enough facts to state a claim to relief that is plausible on its face,” id. at 570, or where the factual content does not allow the court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (finding that, under Twombly, “labels, conclusions, and a formulaic recitation of the elements of a cause of action” do not suffice but, rather, the complaint “must allege facts suggestive of [the proscribed] conduct” and that are sufficient “to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s] of his claim”).
C. DISCUSSION
Mike's Auto brings its sole claim under the Equal Protection Clause of the Fourteenth Amendment. The Equal Protection Clause directs that no state shall “deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const, amend. XIV § 1. To state an equal protection claim under a “class of one” theory, Mike's Auto must allege that “(1) the defendant treated [it] differently from others similarly situated, (2) the defendant did so intentionally, and (3) there was no rational basis for the difference in treatment.” Hill v. Borough of Kutztown, 455 F.3d 225, 239 (3d Cir. 2006).
In support of the Motion to Dismiss, the Township argues that Mike's Auto fails to state a claim for relief because: (1) Mike's Auto and Arnold's Towing are not “similarly situated”; (2) there was a rational basis for treating these two entities differently; and (3) a class-of-one claim does not apply to government contractors. The Court addresses each of the arguments below.
1. Similarly situated
First, the Township contends that Mike's Auto and Arnold's Towing are not similarly situated because Arnold's Towing is solely located in, and thus solely pays taxes to, the Township. ECF No. 5 at 5-7. By contrast, it argues, Mike's Auto maintains business locations both inside and outside of the Township (specifically, in Uniontown and Masontown, Pennsylvania). Id. As a result, the Township argues that Mike's Auto cannot show the “extremely high degree” of similarity required for a class-of-one claim. ECF No. 10 at 2 (citing Flanders v. Dzugan, 156 F.Supp.3d 648, 681 (W.D. Pa. 2016)).
In response, Mike's Auto argues that it is not required to be identically situated to Arnold's Towing to state a plausible claim. ECF No. 7 at 5-6. Instead, it argues, the law only requires it to be similarly situated in relevant respects. Id. Mike's Auto contends that it is like Arnold's Towing in relevant respects because both are towing companies that operate within the Township, pay taxes to the township, and are included on the Township's tow list. Id. at 6-7.
An “essential element” of an equal protection claim is that the relevant entities are “similarly situated.” Startzell v. City of Phila., 533 F.3d 183, 203 (3d Cir. 2008) (quoting Hill v. City of Scranton, 411 F.3d 118, 125 (3d Cir. 2005)). “[S]imilarly situated does not mean identically situated.” Harvard v. Cesnalis, 973 F.3d 190, 20u5 (3d Cir. 2008) (quoting Nprdlinger v. Hahn, 505 U.S. 1,10 (1992)) (internal quotations omitted). Under the Equal Protection Clause, entities are similarly situated “when they are alike ‘in all relevant aspects.'” Startzell, 533 F.3d at 203 (quoting Nordlinger, 505 U.S. at 10); see also Municipal Revenue Servs., Inc, v. McBlain, 347 Fed.Appx. 817, 825 (3d Cir. 2009). “Determining whether an individual is ‘similarly situated' to another individual is a case-by-case fact intensive inquiry.” McLaughlin v. Forty Fort Borough, 64 F.Supp.3d 631, 648 (M.D. Pa. 2014) (citing Suber v. Guinta, 902 F.Supp.2d 591, 607 (E.D.' Pa. 2012)).
Upon review, Mike's Auto plausibly pleads that it is alike in relevant aspects to Arnold's Towing. Based on the Complaint, Mike's Auto and Arnold's Towing are both towing companies that are included on the Township's approved tow list. At this preliminary stage, the Court should find that Mike's Auto pleads sufficient facts to establish that it is similarly situated to Arnold's Towing. Accordingly, the Motion to Dismiss should be denied on this basis.
2. Rational basis
The Township also argues that Mike's Auto's claim fails because there is “a reasonably conceivable state of facts that could provide a rational basis” for the difference in towing schedules. ECF No. 5 at 6. (quoting Mary Beth's Towing LLC v. Borough of Brownsville, No. 2:16-cv-00452, 2018 WL 1784556, at *8 (W.D. Pa. Apr. 13, 2018)). In particular, it argues that the Township could have concluded that the towing company with a local address (Arnold's Towing) should be given preference, given the importance of clearing roads as soon as possible after an accident. Id. at 7; ECF No. 10 at 2.
In response, Mike's Auto argues that the Township's proffered reason is not a rational basis for the different treatment because: (1) it arbitrarily penalizes Mike's Auto for attempting to earn a living outside of the Township; and (2) Mike's Auto, like Arnold's Towing, is a company with a “local address.” ECF No. 7 at 7-8.
To prevail on its class-of-one equal protection claim, Mike's Auto must show that that it was treated differently from a similarly situated entity without any rational basis. As the United States Court of Appeals for the Third Circuit has summarized:
Rational basis review is a very deferential standard. It is met “if there is any reasonably conceivable state of facts that could provide a rational basis” for the
differing treatment. United States v. Walker, 473 F.3d 71, 77 (3d Cir. 2007) (quoting Heller v. Doe, 509 U.S. 312, 320, 113 S.Ct. 2637, 125 L.Ed.2d 257 (1993)). We have held that “the principles of equal protection are satisfied ‘so long as there is a plausible policy reason for the classification, the legislative facts on which the classification is apparently based rationally may have been considered to be true by the governmental decisionmaker, and the relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational.'” Id. (quoting Fitzgerald v. Racing Ass'n of Cent. Iowa, 539 U.S. 103, 107, 123 S.Ct. 2156, 156 L.Ed.2d 97 (2003)). The Supreme Court has emphasized that “rational-basis review in equal protection analysis ‘is not a license for courts to judge the wisdom, fairness, or logic of legislative choices.'” Heller, 509 U.S. at 319, 113 S.Ct. 2637 (quoting FCC v. Beach Commc'ns, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 124 L.Ed.2d211 (1993)).Newark Cab Ass'n v. City of Newark, 901 F.3d 146, 156 (3d Cir. 2018)
Upon review, the pleadings at this stage do not reveal a rational basis for why Mike's Auto was treated differently from Arnold's Towing. Although the Township argues that it rationally could prefer a towing company with a “local address” to clear the roads more quickly, Mike's Auto pleads that it is located in the Township and, thus, has a “local address.” Based on the allegations, Mike's Auto could conceivably show that the Township's proffered reason is arbitrary or irrational, such that it was treated differently without any rational basis. Therefore, the Motion to Dismiss should also be denied on this basis.
3. Government Contractor
Finally, the Township argues that the Motion to Dismiss should be granted because the class-of-one theory of equal protection does not apply to claims brought by government contractors. ECF No. 5 at 7. In support, the Township relies on Engquist v. Oregon Department of Agriculture, 553 U.S. 591 (2008), in which the United States Supreme Court held that the class-of-one theory of equal protection has “no application in the public employment context.” Id. at 607.
In Enquist, the Supreme Court considered whether a former state employee could bring an equal protection claim under a class-of-one theory based on allegations that she was terminated for “arbitrary, vindictive, and malicious reasons.” Id. at 595. In weighing this issue, the Supreme Court began by recognizing the “long held . .. view that there is a crucial difference, with respect to constitutional analysis, between the government exercising ‘the power to regulate or license, as lawmaker,' and the government acting ‘as proprietor, to manage [its] internal operation.'” Id. at 598 (quoting Cafeteria & Rest. Workers v. McElroy, 367 U.S. 886, 896 (1961)). When the government acts as an employer, it has “far broader powers” than when it acts as a sovereign, and thus it has “significantly greater leeway in its dealings with citizen employees than it does when it brings its sovereign power to bear on citizens at large.” Id. at 599 (citing Waters v. Churchill, 511 U.S. 661, 671 (1994)).
The Court further explained that there are some forms of state action that “by their nature involve discretionary decisionmaking based on a vast array of subjective, individualized assessments.” Id. at 603. In those situations, “the rule that people should be ‘treated alike, under like circumstances and conditions' is not violated when one person is treated differently from others, because treating like individuals differently is an accepted consequence of the discretion granted.” Id. Thus, “allowing a challenge based on arbitrary singling out of a particular person would undermine the very discretion that such state officials are entrusted to exercise.” Id.
The Supreme Court found that this principle applies to employment decision-making, which is “often subjective and individualized, resting on a wide array of factors that are difficult to articulate and quantify.” Id. at 604. To treat employees differently, then, is not to violate the equal protection clause; rather, it is simply a function of the “broad discretion that typically characterizes the employer-employee relationship.” Id. at 605. As a practical matter, the Supreme Court also noted that “government offices could not function if every employment decision became a constitutional matter.” Id. Thus, the Supreme Court found that class-of-one claims do not apply in the public employment context.
While Mike's Auto is not a government employee, the Township argues that it cannot bring an equal protection claim under a class-of-one theory because the Township's referral of towing companies to private vehicle owners is a discretionary function. ECF No. 5 at 7. The Township also refers the Court to cases from various other circuits in which courts have extended the holding in Engquist to claims brought by government contractors. Id. at 7-12.
In response, Mike's Auto asserts that none of the cases that the Township cites apply here. ECF No. 7 at 8. Mike's Auto argues that the Township does not, in fact, have the discretion to determine its tow rotation under its policy. Id. at 9 (citing ECF No. 44-1). Mike's Auto contends that its claim does not arise out of any discretionary function; rather, it claims that it has been allotted less time on the tow rotation due to an arbitrary classification. Id.
Upon review, at this preliminary stage, the holding in Engquist does not clearly preclude Mike's Auto's claim on its face because it is not a government employee. At this preliminary stage, it is unclear whether scheduling on the Township's towing rotation list is arguably the kind of inherently discretionary decision that has been shielded from class-of-one equal-protection challenges. The parties should be permitted to develop the factual record on this issue. Accordingly, the Motion to Dismiss also should be denied on this basis.
D. CONCLUSION
For the reasons discussed, it is respectfully recommended that the Court deny the Motion to Dismiss, ECF No. 4.
In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), and Local Rule 72.D.2, the parties are permitted to file written objections in accordance with the schedule established in the docket entry reflecting the filing of this Report and Recommendation. Objections are to be submitted to the Clerk of Court, United States District Court, 700 Grant Street, Room 3110, Pittsburgh, PA 15219. Failure to timely file objections will waive the right to appeal. Brightwell v. Lehman, 637 F.3d 187,193 n. 7 (3d Cir. 2011). Any party opposing objections may file their response to the objections within fourteen (14) days thereafter in accordance with Local Civil Rule 72.D.2.