Atlanta Metro Leasing, Inc. v. City of Atlanta
Plaintiffs, several taxicab companies brought an action against the city for breach of their franchise agreement and breach of contract allegedly arising out of city's issuance of taxicab permits and taxicab certificates of public necessity and convenience (“CPNCs”). Plaintiffs alleged that the city's failure to enforce the existing taxicab ordinance against personal transportation network companies (“TNCs”) (such as Uber) caused damages to CPNC and permit holders. The trial court granted the city's motion to dismiss and the Plaintiffs appealed.
On appeal the Court held that the city enjoyed broad sovereign immunity from legal action unless they have waived their immunity from suit. The city was acting in furtherance to its governmental functions when it decided not to require TNCs to abide by taxicab regulations.
The Court held that the Plaintiff taxicab companies were not “urban transportation companies” that could enter into franchise agreements with the city. Likewise, the Court was not convinced that the taxicab companies were “public utilities and public services” that could enter into franchise agreements with city.
Specifically the court stated that the statute allowing municipal corporations to require taxicab companies to obtain CPNCs and to pay regulatory fees did not manifest a clear and unequivocal expression of legislative intent that municipalities bind themselves to or contract with taxicab companies by issuing CPNCs, thus, the CPNC did not constitute a franchise agreement that could be enforced against city in breach of contract action. The Court opined that because the statute used permissive “may” language and stated that CPNCs were required to promote public safety and convenience this did not to confer specific property interests on CPNC owners or create franchise agreements with municipalities, so CPNCs could be modified, amended, or repealed unilaterally by state or city at any time.