A judge denied the city of Little Rock's request Thursday to dismiss a lawsuit that alleges the city enables a taxicab monopoly.
Amy Beckman Fields, the attorney representing Little Rock, argued to Circuit Judge Alice Gray that the suit should be dismissed because Ken Leininger didn't exhaust all of the administrative remedies available before filing action in court.
Leininger owns the three-vehicle Ken's Cab company. The city Board of Directors in October denied permits for those vehicles to operate in Little Rock. He had first submitted his application for permits in April of 2015.
The Institute for Justice, a Virginia-based public-interest law firm, sued on behalf of Leininger in March of this year.
Since 2001, Little Rock has sold all of its available taxi permits to a single company -- Greater Little Rock Transportation Service LLC, which operates Yellow Cab.
Ken's Cab operates in North Little Rock and surrounding areas, but cannot legally operate in Little Rock without obtaining city-issued permits.
City staff members denied Leininger's permit request in 2015, and he appealed to the city board, which also denied the request.
Permits are granted on a yearly basis, and he didn't reapply for 2016 permits. He said city staff members told him not to.
Fields argued that he would have to apply for 2016 permits, go through the city appeals process, and then appeal any city denial to circuit court before bringing action against the city in court.
"The law is very well settled, your honor, that a plaintiff must resolve their administrative remedies," Fields argued to the judge Thursday.
But Gray pointed out that Leininger has no pending appeal before the city, so "there's nothing to exhaust."
Justin Pearson, the Institute for Justice attorney representing Ken's Cab, said Leininger's case does not have to meet the requirement to exhaust any administrative remedies because he is challenging the language of a city ordinance.
The city's transportation code requires officials to consider the effect of traffic congestion in allowing more taxis on the street by determining "whether the requirements of public convenience and necessity can be met and complied with only by the issuance of additional permits" and "the resulting effect upon the business of existing permit holders and upon existing agencies of mass transportation in the city" before issuing new permits.
Pearson has called the provision the "monopoly rule" and says it facilitates Yellow Cab's monopoly in Little Rock.
"We are saying that the plain language of the monopoly rule ... is in itself unconstitutional. Because we are challenging a written ordinance itself, exhaustion does not apply as a matter of law," Pearson told the judge.
But even if it did, he said, there is a "futility" exception under which the lawsuit could proceed if a judge determined that it was futile for Leininger to reapply for a permit.
At the end of Thursday's 30-minute hearing on the city's motion to dismiss the lawsuit, Gray denied the request without further comment.
Leininger wants the judge to strike down the ordinance provision in question, award him a symbolic $1 in damages and order the city to pay the cost of filing the lawsuit.
"Ken Leininger just wants to compete," Pearson said in a news release later Thursday. "If Ken is allowed to do so, he will create jobs and provide customers with another transportation option. This is good for Little Rock, but the City government has decided that the opinion of Yellow Cab's owner is the only one that matters.
"Thanks to Judge Gray's correct ruling today, we will be able to move forward toward vindicating Ken's constitutional rights," he said in the release. "Next, the City government will need to explain why it thinks it is acceptable to have an ordinance that violates three different sections of the Arkansas Constitution."
Metro on 06/24/2016