Friday, April 25, 2014
C.A. Limits Cities’ Authority to Regulate Tow Trucks, Drivers
By KENNETH OFGANG, Staff Writer
State law limits cities’ authority to regulate tow truck companies to those companies headquartered within city limits, and does not allow regulation of tow truck drivers unless principally employed within the city, the First District Court of Appeal has ruled.
Div. Four ruled Wednesday that a provision excepting regulation of tow trucks and their drivers from the general preemption of local traffic legislation does not mean that a tow truck company can be regulated by every city in which it does business, or that a driver can be required to obtain a permit from every city in which he works.
The court overturned San Francisco Superior Court Judge Harold Kahn’s ruling that the City and County of San Francisco is entitled to a judgment on the pleadings in a lawsuit challenging the city’s requirements that every company and driver towing cars in the city obtain a permit. Companies may be denied permits, or have permits revoked, if their owners have been found guilty of certain offenses, and drivers convicted of those offenses—generally burglary and other property crimes—may be denied permits or have their permits revoked as well.
The California Tow Truck Association, representing over 1,000 companies, filed suit, challenging the ordinance on state and federal grounds. After the city removed the suit to federal court, a district judge threw out the bulk of the challenges but sent the case back to state court to resolve the state-law preemption issues.
Trial Court Ruling
Kahn ruled that the city had the right to regulate companies “that conduct substantial or consequential business” in San Francisco, but not to those “that perform minimal or transitory” work there. The association rejected that formulation and appealed.
Justice Maria Rivera, writing for the Court of Appeal, said the city had exceeded its authority.
“There is no doubt the Legislature intended vigorous local regulation of tow truck service. Subdivision (g)(2) of [Business and Professions Code] section 21100 provides: ‘The Legislature finds that the safety and welfare of the general public is promoted by permitting local authorities to regulate tow truck service companies and operators by requiring licensure, insurance, and proper training in the safe operation of towing equipment, thereby ensuring against towing mistakes that may lead to violent confrontation, stranding motorists in dangerous situations, impeding the expedited vehicle recovery, and wasting state and local law enforcement’s limited resources.’ We agree with the Association, however, that the Legislature, through the use of the phrase ‘principal place of business or employment,’ in section 21100, subdivision (g)(1), intended that the regulation come from a single local jurisdiction.”
‘Not a Meaningful Standard’
Had the Legislature intended to allow cities to regulate companies that do business in the city while being headquartered elsewhere, it could have said so, she wrote. The “substantial business” test favored by San Francisco and the trial judge, she said, “does not provide a meaningful standard.”
She acknowledged the city’s fear that fly-by-night operators could set up offices in neighboring cities with little or no regulation in order to avoid San Francisco’s rules. But even if that were to occur, the justice noted, they would still have to comply with state laws.
Rivera went on to say that the city does have the power to pass the cost of regulation on to the companies or drivers in the form of permit fees, and that such fees are not preempted by the state Motor Carrier Safety Improvement Act of 1996.
The case is California Tow Truck Association v. City and County of San Francisco, 14 S.O.S. 1985.
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