Opinion
Civil Case No. 5:99CV-291-R.
May 16, 2000.
MEMORANDUM OPINION
This case is before the Court on Plaintiff's Motion for Summary Judgment (Dok. #14) and Defendants' Motion for Summary Judgment (Dok. #15). This Court grants Defendants' motion.
BACKGROUND
The Christian County Fiscal Court, City of Hopkinsville, City of Crofton and City of Pembroke created the Hopkinsville/Christian County Emergency Operations Center ("EOC") as it now exists by an Interlocal Cooperation Act dated May 7, 1996. The county and cities formed the EOC to provide a centralized dispatch center for emergency services within Christian County.
An earlier EOC was allegedly created in 1978 for the same purposes.
As part of the services it provides, the EOC maintains a rotating list of wrecker companies to contact when wrecking services are needed. At one time, the cities and county maintained multiple lists. In 1996, a consolidated list was created. The EOC used this list until 1998. At this time, the EOC Executive Board decided to create a new list through a bidding process. The board allegedly created the new list because they had been receiving complaints about the cost and quality of services from some providers on the old list.
Defendants maintain by affidavit that Tabers was the source of numerous complaints and was twice suspended from the list for its behavior.
The EOC decided that only wrecking services that could provide services for both passenger automobiles and tractor trailers would be considered for the list. To attract bidders, the EOC contacted all existing wrecking services on its list and placed an advertisement in the local paper. The EOC received eight bids. It accepted two bids and declined the others for various reasons. The EOC rejected Tabers's bid based on Tabers's past performance. The two accepted companies received one year contracts with the option for four years of renewals. The contracts have been renewed for one year. The EOC did not advertise for new wrecking bids when it renewed the existing two.
The EOC list grants only a limited right to the wrecker services. The list is only used when the EOC has been contacted. Other wrecker services are free to operate their businesses in Christian county. When the EOC is not involved, individuals contact the wrecker of their choice. When the EOC is contacted, an individual may request a specific wrecker company rather than have the EOC utilize its list. The list is used when the individual expresses no preference. The EOC receives no monetary royalty from operating the list.
STANDARD
Summary Judgment is available under Fed.R.Civ.P. 56(c) if the moving party can establish that the "pleadings, depositions, answer to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Electrical Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
"[N]ot every issue of fact or conflicting inference presents a genuine issue of material fact." Street v. Bradford Co., 886 F.2d 1472, 1477 (6th Cir. 1989). The test is "whether the party bearing the burden of proof has presented a jury question as to each element in the case." Hartsel v. Keys, 87 F.3d 795, 799 (6th Cir. 1996). The plaintiff must present more than a mere scintilla of the evidence. To support his position, he must present evidence on which the trier of fact could find for the plaintiff. See id. (citing Anderson v. Liberty Lobby, 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
DISCUSSION
The right of a city to grant a franchise is found in sections 163 and 164 of the Kentucky Constitution, which read as follows:
Section 163 No street railway, gas, water, steam heating, telephone, or electric light company, within a city or town, shall be permitted or authorized to construct its tracks, lay its pipes or mains, or erect its poles, posts or other apparatus along, over, under or across the streets, alleys or public grounds of a city or town, without the consent of the proper legislative bodies or boards of such city or town being first obtained; but when charters have been heretofore granted conferring such rights, and work has in good faith been begun thereunder, the provisions of this section shall not apply.
Section 164 No county, city, town, taxing district or other municipality shall be authorized or permitted to grant any franchise or privilege, or make any contract in reference thereto, for a term exceeding twenty years. Before granting such franchise or privilege for a term of years, such municipality shall first, after due advertisement, receive bids therefor publicly, and award the same to the highest and best bidder; but it shall have the right to reject any or all bids. This section shall not apply to a trunk railway.
The parties here dispute whether the actions of the EOC constitute a franchise under the Kentucky Constitution. Kentucky caselaw is sparse in defining the exact parameters governing franchises. As such, the Court must piecemeal determine the appropriate standards that govern what is and is not a franchise.
Under the Kentucky Constitution the term "franchise" designates a right or privilege conferred by law. Under franchise law, this right is one that "cannot be exercised without the express permission of the sovereign power-that is, a privilege or immunity of a public nature which cannot be legally exercised without legislative grant." 36 Am Jur 2d Franchises § 1 (1999). What is an is not the subject of a franchise is of some debate. The proper subject of franchises depends largely on the ways in which the public welfare is affected by the subject in question. See id. at § 3. "Rights exercised by a citizen may, when the public interest requires, be withdrawn by the state, so as in effect to make them franchises." Id. Generally, the right to carry on any business of a public nature, such as the establishment, construction, and operation of a public utility and the collection of tools or charges for its use or service, or the use of highways for such purpose, is a franchise. See id. Although franchise rights are frequently associated with rights like laying pipes or electrical wires (items that are specifically contemplated by § 163), Kentucky cases make it clear that the Kentucky Constitution is not so limited. Kentucky courts have expanded franchises to encompass things like city cabs. See Adams v. Burke, 215 S.W.2d 531 (Ky. 1948); Ray v. City of Owensboro, 415 S.W.2d 77, 79 (Ky. 1967).
Embodied within the discussion of franchises is the concept of exclusivity. The government takes exclusive control of a right and through a franchise determines who may exercise it. Both § 163 and § 164 utilize the words "permitted," "authorized" and "consent" when describing a franchise. Other commentators use words and phrases like "withdrawn by the state," "granted," and "exercised." See 36 Am Jur 2d Franchises (1999). The Kentucky Supreme Court has also taken this position.
A franchise is generally defined as a right or privilege granted by a sovereign power, government or a governmental entity to a party to do some act which such party could not do without a grant from the government. . . . A franchise is a grant of a right to use public property or at least the property over which the granting authority has control. . . . One test for determining a franchise within the meaning of Section 164 of the Kentucky Constitution can be found in Willis v. Boyd, 224 Ky. 732, 7 S.W.2d 216 (1928), when the court said that a lease can grant a franchise because the lessee obtained a right or privilege not enjoyed by citizens in general.E.M. Bialey Distributing Co. v. Conagra, Inc., 676 S.W.2d 770, 771 (Ky. 1984) (emphasis added). As each of these examples illustrates, franchise law contemplates exclusivity.
In this case, the EOC has granted a limited right to respond to emergency situations reported to the EOC where the party has not specified a wrecker service. The Court uses the word limited because the EOC has not withdrawn the right to operate a wrecker service from general citizens and does not exercise total control over the wrecker industry. The EOC does not control who may have access to the streets for wrecker services as a franchise would allow it to do. See Adams v. Burke, 215 S.W.2d 531, 532 (Ky. 1948) ("the utilization of streets in the transportation of persons for hire is not an ordinary use to which all members of the public have a common right, but is an extraordinary use subject to regulation by the controlling public authority"). Tabers does not need a mandate from the city to operate its service. Indeed, Tabers may operate its wrecker service for any purpose other than responding to those situations in which the EOC has been contacted and the citizen involved has not specified a towing company.
Tabers cites several cases to support the proposition that the EOC has granted a franchise here. Each of those situations is distinguishable on the point of exclusivity. In each of the examples cited by Tabers, the authority has withdrawn a right from the public and controls who does or does not exercise that right. Franchises have been granted for city bus services, for city cab services, and cable providers. In each case, the grant has excluded those without the city grant from exercising the right in any way. That is not the case here. Tabers's action here fails because of this concept of exclusivity. The actions of the EOC do not fall under Kentucky franchise law. As such, this Court GRANTS Defendant's Motion for Summary Judgment.
ORDER
Upon Plaintiff's Motion for Summary Judgment (Dok. #14) and Defendants' Motion for Summary Judgment (Dok. #15) and this Court being sufficiently advised,
IT IS ORDERED that Defendant's Motion for Summary Judgment is GRANTED and Plaintiff's claim is DISMISSED with prejudice.
This is a final and appealable order. There is no just cause for delay.