REVISED JANUARY 17, 2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 18, 2012
No. 12-30921
Lyle W. Cayce
Clerk
DENNIS MELANCON, INCORPORATED, individually and on behalf of and
as representative of all CPNC owners in the City of New Orleans; PATRICK
MURPHY, individually and on behalf of and as representative of all CPNC
owners in the City of New Orleans; ERIC HUSTED, individually and on
behalf of and as representative of all CPNC owners in the City of New
Orleans; WILLIAM KERNER, IV, The Succession of, individually and on
behalf of and as representative of all CPNC owners in the City of New
Orleans,
Plaintiffs-Appellees - Cross-Appellants
v.
CITY OF NEW ORLEANS,
Defendant-Appellant - Cross-Appellee
___________________________
MONROE COLEMAN; COLEMAN CAB COMPANY; PLACIDO CAB
SERVICE, INCORPORATED; VETERANS CAB COMPANY, L.L.C.; PATIO
CABS; U.S. CABS; NIRAN GUNASEKARA; WESNER DEROSIER;
ALLIANCE CAB SERVICE, L.L.C.,
Plaintiffs-Appellees - Cross-Appellants
v.
CITY OF NEW ORLEANS,
Defendant-Appellant - Cross-Appellee
No. 12-30921
___________________________
CEDRIC RICHARD; POSTENE LOUISJEUNE; HERMAN W. WOODS;
CALVIN LEVY; WILLIAM A. MARKS, INCORPORATED; VAHID HABIB;
BOSNA EXPRESS, L.L.C.; PANAMERICA, L.L.C.; MATTA’S
TRANSPORTATION COMPANY; RAMSIS TRANSPORTATION,
INCORPORATED; AIMAN GIBRIAL; PERLE DES ANTILLES, L.L.C.;
EASTERN CAB, INCORPORATED; ROYAL CAB, INCORPORATED;
JEANMARIE DESIR; MESSILIEN GEORGES; BRISSETTE,
INCORPORATED; TRAVIS K. BRISSETTE; LIBERTY BELL CAB, L.L.C.;
RIVERBEND CAB, L.L.C.; PELICAN CAB, L.L.C.; HALID HABIB;
HAMPTON TRANSPORTATION AND CAB SERVICE CPNC 997, L.L.C.,
Plaintiffs-Appellees - Cross-Appellants
v.
PURA BASCOS; MALACHI HULL; CITY OF NEW ORLEANS,
Defendants-Appellants - Cross-Appellees
Appeals from the United States District Court
for the Eastern District of Louisiana
Before STEWART, Chief Judge, and KING and OWEN, Circuit Judges.
KING, Circuit Judge:
This case involves three consolidated lawsuits filed by plaintiffs who
challenge the lawfulness of various ordinances enacted by the City of New
Orleans regulating that city’s taxicab industry. After the plaintiffs obtained
from a Louisiana state court a temporary restraining order prohibiting
enforcement of the ordinances, the City of New Orleans filed a motion for
declaratory relief in federal court, seeking to dissolve the restraining order. The
plaintiffs, in turn, moved for a preliminary injunction prohibiting enforcement
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No. 12-30921
of the ordinances. The district court granted in part and denied in part each
motion, and both parties now appeal. For the reasons set forth below, we
VACATE the district court’s order insofar as it granted a preliminary injunction;
we AFFIRM that order insofar as it denied a preliminary injunction; and we
REMAND the case for further proceedings consistent with this opinion.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 1956, the City of New Orleans (“the City”) passed various ordinances
creating the regulatory framework within which the City’s taxicab industry
currently operates. Since that time, the industry has been heavily regulated.
One important aspect of the City’s regulatory framework is the requirement
imposed by section 162-151 of the Municipal Code of Ordinances (the “Municipal
Code”) that a taxicab operator obtain from the City a certificate of public
necessity and convenience (“CPNC”) prior to operating a vehicle as a taxicab.
Orleans Parish, La., Code of Ordinances § 162-151 (2000). Until 2009, section
162-186 limited to a total of 1,600 the number of CPNCs the City could issue.
Orleans Parish, La., Code of Ordinances § 162-186 (2004). As a result of this
limited supply, and because the City permitted CPNC holders to transfer their
certificates for consideration, a secondary market developed for the exchange of
CPNCs. While all CPNC transfers required approval by the City, a related
ordinance provided that such approval would be granted upon the transferee’s
completion of various City-imposed requirements. Orleans Parish, La., Code of
Ordinances § 162-321 (1995).
In April 2012, the City enacted various ordinances amending and adding
to the regulatory framework governing the taxicab industry. Eight of those
provisions are presently at issue: (1) section 162-58 prohibits the issuance of
CPNCs for vehicles that previously have been used as taxicabs or law
enforcement vehicles, or that have been titled as “salvage,” “rebuilt,” “junk,”
“total loss,” or “reconditioned”; (2) section 162-59 provides that “CPNCs are
3
No. 12-30921
privileges and not rights”; (3) section 162-321 allegedly makes previously
mandatory transfers of CPNCs discretionary, and prohibits their transfer during
the pendency of a suspension or revocation proceeding; (4) section 162-609
requires all taxicabs to maintain trip sheets for a two-year period; (5) section
162-613 places an age limit of eleven model years on vehicles used as taxicabs
beginning August 1, 2012, and seven model years beginning January 1, 2014;1
(6) section 162-659 declares that all taxicabs must have credit/debit card
machines equipped with Passenger Information Monitors that permit wireless
communication to and from the taxicabs; (7) section 162-660 mandates that all
taxicabs be equipped with a security camera; and (8) section 162-661 requires
that taxicabs be fitted with global positioning systems (“GPS”).
Shortly after the City enacted these ordinances, three groups of
individuals and companies—all of whom either own or hold interests in CPNCs
(“Plaintiffs”)—filed separate lawsuits in state and federal court challenging the
ordinances.2 In particular, Plaintiffs asserted that sections 162-59 and 162-321,
the ordinances declaring CPNCs to be “privileges and not rights” and allegedly
making their transfer discretionary: (1) effected a regulatory taking under the
Fifth Amendment, and (2) impaired the obligation of contract, in violation of the
federal and Louisiana constitutions, as well as various Louisiana state laws.
Plaintiffs further asserted that sections 162-58, 162-609, 162-613, 162-659, 162-
660, and 162-661—all of which pertain to taxicab upgrade requirements (“the
Upgrade Ordinances”): (1) violated the Fourteenth Amendment’s Equal
Protection Clause, (2) constituted excessive governmental regulation that
1
This provision also mandates that, as of January 1, 2013, no new or replacement
taxicab vehicles can be operated as such if the vehicles are more than five model years old.
2
Plaintiffs named as defendants the City of New Orleans; Pura Bascos, in her official
capacity as Director of the Department of Safety and Permits; and Malachi Hull, in his official
capacity as Director of the Taxicab and For Hire Vehicle Bureau. For convenience, the
defendants also are referred to collectively as “the City.”
4
No. 12-30921
imposed an unreasonable financial burden, (3) effected a regulatory taking
under the Fifth Amendment, (4) violated the right to privacy, and (5) impaired
the obligation of contract, in violation of the federal and Louisiana constitutions,
as well as various Louisiana state laws.
On July 20, 2012, a Louisiana state court issued a temporary restraining
order (“TRO”) prohibiting the City from enforcing the challenged ordinances,
most of which were due to take effect on August 1, 2012. The underlying case
subsequently was removed to the United States District Court for the Eastern
District of Louisiana and consolidated with two related cases that also had been
removed to, or were originally filed in, that court. On July 27, 2012, the City
filed a motion for declaratory relief, seeking a declaration dissolving the TRO.
Plaintiffs, in turn, moved for a preliminary injunction prohibiting enforcement
of the ordinances.
After a two-day hearing, the district court granted in part and denied in
part the City’s motion for declaratory relief and Plaintiffs’ motion for a
preliminary injunction. Underlying the court’s ruling was its conclusion that
Plaintiffs had satisfied the requirements for obtaining a preliminary injunction
in connection with sections 162-59 and 162-321. Most significantly, the court
held that Plaintiffs had demonstrated a substantial likelihood of prevailing on
their allegation that sections 162-59 and 162-321 affected protectable property
rights—the CPNCs—upon which an unconstitutional regulatory taking had been
imposed. However, the court also concluded that Plaintiffs had not
demonstrated a substantial likelihood of prevailing on their allegation that
sections 162-59 and 162-321 constituted legislation impairing the obligation of
contract, nor had they satisfied the requirements for obtaining a preliminary
injunction in connection with their numerous allegations related to the Upgrade
Ordinances.
5
No. 12-30921
The City appeals, arguing that the district court erred in holding that
Plaintiffs demonstrated a substantial likelihood of prevailing on their allegation
that CPNCs are protectable property and that sections 162-59 and 162-321 effect
a regulatory taking. Plaintiffs also appeal, claiming the district court erred by:
(1) holding that they had not demonstrated a substantial likelihood of prevailing
on their claim that sections 162-59 and 162-321 constituted legislation impairing
the obligation of contract, and (2) denying their motion for a preliminary
injunction in connection with the Upgrade Ordinances. We expedited the
briefing and also heard oral argument on an expedited basis.
II. STANDARD OF REVIEW
We review a district court’s ultimate decision to grant or deny a
preliminary injunction for abuse of discretion.3 Janvey v. Alguire, 647 F.3d 585,
591-92, 595 (5th Cir. 2011). “As to each element of the district court’s
preliminary-injunction analysis,” however, “the district court’s findings of fact
‘are subject to a clearly-erroneous standard of review,’ while conclusions of law
‘are subject to broad review and will be reversed if incorrect.’” Id. at 592 (quoting
White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989)).
III. ANALYSIS
“Generally, a movant must satisfy each of four traditional criteria in order
to be entitled to a preliminary injunction: (1) irreparable injury[,] (2) substantial
likelihood of success on the merits, (3) a favorable balance of hardships, and (4)
no adverse effect on the public interest.” Black Fire Fighters Ass’n of Dall. v.
City of Dallas, 905 F.2d 63, 65 (5th Cir. 1990) (emphasis added). A preliminary
3
In its order, the district court indicated that its consideration of the City’s motion for
declaratory judgment, which sought to dissolve the TRO, “would be functionally the same as
a hearing on a motion for preliminary injunction.” We agree, and the parties do not dispute
this point. Accordingly, our opinion—though framed as a review of the district court’s
conclusions related to the preliminary injunction—also disposes of appeals related to the City’s
motion for declaratory relief.
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No. 12-30921
injunction is an extraordinary remedy that “should not be granted unless the
party seeking it has clearly carried the burden of persuasion on all four
requirements.” Planned Parenthood Ass’n of Hidalgo Cnty. Tex., Inc. v. Suehs,
692 F.3d 343, 348 (5th Cir. 2012) (quotation and citation omitted). Nonetheless,
“given the haste that is often necessary” in addressing a motion for a
preliminary injunction, “the findings of fact and conclusions of law made by a
court granting a preliminary injunction are not binding at trial on the merits.”
Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981).
A. The City’s Appeal
On appeal, the City argues that the district court erred in concluding that
Plaintiffs established a substantial likelihood of succeeding on the merits of their
claim that sections 162-59 and 162-321 effected a regulatory taking. In
particular, the City maintains, contrary to the lower court’s holding, that
Plaintiffs are unlikely to prevail on the merits of their suit because (1) Plaintiffs
hold no protectable property interest in their CPNCs, and (2) even if they do,
sections 162-59 and 162-321 do not effect a taking of that interest.
As explained below, on this record, we agree that Plaintiffs have not
demonstrated a substantial likelihood of prevailing on their argument that
sections 162-59 and 162-321 effected a taking of property interests they hold in
their CPNCs.
(1) The Ordinances at Issue
As noted, the ordinances at issue in connection with the City’s appeal are
sections 162-59 and 162-321. In its entirety, section 162-59—as originally
promulgated in April 2012—provides:
Driver’s permits and CPNCs are privileges and not rights. The
director of safety and permits or his designee has full discretion in
determining whether a driver’s permit or CPNC shall be issued.
Orleans Parish, La., Code of Ordinances § 162-59 (2012).
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No. 12-30921
Section 162-321, on the other hand, pertains to the transferability of
CPNCs. Prior to April 2012, section 162-321 provided:
Upon the sale or transfer of any taxicab or for hire vehicle . . .
consideration may be received by the vendor or transferor or other
person or paid thereto by the vendee or transferee for the transfer
of the permit governing such vehicle. The CPNC shall be
transferred provided that the following requirements are
met . . . .”
Orleans Parish, La., Code of Ordinances § 162-321 (1995) (emphasis added).
With the April 2012 amendment to section 162-321, the ordinance now states
that “[t]he CPNC may be transferred provided that the following requirements
are met.” Orleans Parish, La., Code of Ordinances § 162-321 (2012) (emphasis
added). Significantly, while most of the section’s subparts remain the same, the
amended ordinance also includes a new subsection, which provides:
Before any transfer may become effective, the transferor and the
transferee shall apply to the director who shall approve the transfer
upon the determination that the transferee meets the qualifications
of a CPNC holder under this chapter.
Orleans Parish, La., Code of Ordinances § 162-321(6) (2012) (emphasis added).
In brief, Plaintiffs argue that the 2012 versions of sections 162-59 and 162-
321 effect a regulatory taking of property interests they hold in their CPNCs.
In contrast, the City contends that no taking has occurred, because there was no
constitutionally protectable property interest at stake.
(2) Applicable Law
“The Takings Clause of the Fifth Amendment, made applicable to the
States through the Fourteenth Amendment, directs that ‘private property’ shall
not ‘be taken for public use, without just compensation.’” Urban Developers LLC
v. City of Jackson, 468 F.3d 281, 292 (5th Cir. 2006) (quoting U.S. Const. amend.
V) (internal citation omitted). Thus, to prevail on a takings claim, a plaintiff
first must demonstrate that he has a protectable property interest. Ruckelshaus
v. Monsanto Co., 467 U.S. 986, 1000 (1984). Because the Constitution protects
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No. 12-30921
rather than creates property interests, courts must “resort to ‘existing rules or
understandings that stem from an independent source such as state law’ to
define the range of interests that qualify for protection as ‘property’ under the
Fifth and Fourteenth Amendments.” Lucas v. S.C. Coastal Council, 505 U.S.
1003, 1030 (1992) (quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564,
577 (1972)).
Determining what the “existing rules” are involves identifying “the group
of rights inhering in the citizen’s relation to [a] physical thing, as the right to
possess, use and dispose of it.” United States v. Gen. Motors Corp., 323 U.S. 373,
377-78 (1945). As we previously have explained, under Louisiana law, the
essential features of the “bundle of rights” commonly characterized as “property”
are:
(1) usus-the right to use or possess, i.e., hold, occupy, and utilize the
property; (2) abusus-the right to abuse or alienate, i.e., transfer,
lease, and encumber the property, and (3) fructus-the right to the
fruits, i.e., to receive and enjoy the earnings, profits, rents, and
revenues produced by or derived from the property.
Rodrigue v. Rodrigue, 218 F.3d 432, 436-37 (5th Cir. 2000).
Nevertheless, while state law generally defines what constitutes a
property interest, “unwritten common law” or “policies and practices” also can
rise to the level of creating “property interests.” Perry v. Sindermann, 408 U.S.
593, 602-03 (1972) (internal quotation marks and citations omitted). In other
words, the Fifth Amendment protects expectations arising not just from
legislation or judicial precedent, but also those “spring[ing] from custom and
practice.” Skip Kirchdorfer, Inc. v. United States, 6 F.3d 1573, 1581 (Fed. Cir.
1993); see also Nixon v. United States, 978 F.2d 1269, 1276 (D.C. Cir. 1992)
(observing that “property interests . . . may be created or reinforced through
uniform custom and practice”); Davis v. City of Chicago, 841 F.2d 186, 188 (7th
Cir. 1988) (“An established custom or policy may be used as evidence that a
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No. 12-30921
mutually explicit understanding exists.”). “To have a property interest,”
however, “a person clearly must have more than an abstract need or desire for
it. He must have more than a unilateral expectation of it. He must, instead,
have a legitimate claim of entitlement to it.” Roth, 408 U.S. at 577. “A
constitutional entitlement cannot be created—as if by estoppel—merely because
a wholly and expressly discretionary state privilege has been granted generously
in the past.” Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458, 465 (1981)
(emphasis removed) (internal quotation marks and citation omitted).
(3) The “Existing Rules or Understandings” Related to CPNCs
In light of these principles, we must examine the “existing rules or
understandings” surrounding CPNCs to ascertain the nature of the interest held
(if any) in the certificates. As an initial matter, we note that the parties rely on
a mix of legislation, judicial precedent, and custom to advance their arguments
related to the character of the interest at stake. The City argues, for instance,
that the heavily regulated nature of the taxicab industry undermines Plaintiffs’
claim to any “entitlement” related to their CPNCs. Among other things, the City
notes that it has the statutory authority to suspend and revoke CPNCs, to
impose annual renewal requirements related thereto, and to designate routes
over which CPNC vehicles may operate. Orleans Parish, La., Code of
Ordinances §§ 162-52, 162-186, 162-248, 162-249. The City argues that these
regulations are evidence of its longstanding position that CPNCs are privileges
granted by the City, rather than constitutionally protected property rights.
Moreover, the City contends that its regulation of CPNCs took place
against the backdrop of the Louisiana Supreme Court’s decision in Hutton v. City
of Baton Rouge, 47 So. 2d 665 (La. 1950). In Hutton, a bus driver who had been
denied a CPNC to operate his business within Baton Rouge sought a writ of
mandamus to compel the certificate’s issuance. Id. at 666. The court explained
that in Baton Rouge, a bus driver needed both a CPNC and a city “franchise” to
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No. 12-30921
operate a bus within city limits. Id. at 667. Because the plaintiff did not have
a franchise, the court concluded that even if it compelled the city to issue a
CPNC, the plaintiff still would not have been entitled to operate his bus within
the city. Id. at 668. The court thus affirmed the lower court’s denial of the writ.
Id. at 670.
Before reaching this conclusion, however, the court discussed the nature
of the interest associated with a CPNC, explaining:
A certificate of public convenience and necessity is in the nature of
a personal privilege or license, which may be amended or revoked
by the power authorized to issue it, and the holder does not acquire
a property right. Such certificate is issued for the purpose of
promoting the public convenience and necessity, and not for the
purpose of conferring upon the holder any proprietary interest. The
number of such certificates to be granted over a particular route
may be limited by restricting the number of busses to the needs of
the public, so as to occasion as little inconvenience as possible to the
persons using the route and to insure to the holder of such
certificate certain immunities from competition so that he may offer
the public regular and continuous service. On the other hand, a
franchise to use the streets in its usual sense is the right to use or
occupy the streets for a stated period of time, for which a valuable
consideration is paid, and contemplates a contract between the
municipality and the individual to whom granted, and vests in the
holder thereof a limited property right to use the public streets.
Id. at 668-69. The City argues that Hutton’s statement that a CPNC “is in the
nature of a personal privilege or license” precludes the district court’s conclusion
that a holder can acquire a property interest in one.
Plaintiffs, in turn, emphasize that the regulatory framework at issue in
Hutton—an opinion, they highlight, interpreting Baton Rouge’s municipal code,
not Louisiana state law—differed considerably from that at issue here. Plaintiffs
underscore that unlike Baton Rouge, New Orleans does not have a dual
requirement that a taxicab operator obtain both a CPNC and a franchise. Thus,
they argue that, whereas Baton Rouge had a system separately providing for a
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No. 12-30921
CPNC (a thing “in the nature of a personal privilege”) as well as a franchise (a
thing vesting its holder with “a limited property right”), such is not the case in
New Orleans. Rather, Plaintiffs submit, New Orleans has a single CPNC that
conveys both the license and the property interests associated with “the right to
use or occupy the streets.” Id. at 669.
In any event, Plaintiffs also maintain that the City’s intervening treatment
of CPNCs has undermined any force Hutton may have had and has imbued the
certificates—largely by virtue of custom—with several features of “property.”
Until 2009, for example, the Municipal Code limited to a total of 1,600 the
number of CPNCs the City could issue. Although this limitation is no longer
statutorily in place, Plaintiffs adduced testimony as to the existence of a de facto
moratorium under which the City has decided to issue no more than 1,600
certificates. Plaintiffs suggest that the limited availability of CPNCs has
contributed to the development of the secondary market for their transfer,
thereby vesting them with value. Indeed, Plaintiffs introduced evidence of a
CPNC that sold for $67,000.
Relatedly, Plaintiffs contend that the City’s practice of approving a CPNC
transfer merely upon the transferee’s completion of certain requirements
likewise created a property interest in the certificates. In particular, Plaintiffs
assert that this custom created an environment in which CPNC holders have
conveyed their certificates upon their deaths and obtained loans using the
market value of their CPNCs as collateral. To support this contention, Plaintiffs
introduced evidence below as to the existence of a program whereby the Small
Business Administration has provided loans to CPNC holders that were secured
by the certificates themselves. Additionally, Plaintiffs introduced evidence that,
in at least one instance, a CPNC was awarded as “property” in a divorce action.
Plaintiffs argue that these circumstances fostered the creation of property
rights in CPNCs. Further, they maintain that as a result of these practices, a
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No. 12-30921
common understanding developed between CPNC holders and the City, such
that it was mutually recognized that the property interests at stake were
constitutionally protected. As evidence, Plaintiffs highlight that, historically,
when a CPNC was transferred from one person to another, the City issued a
certificate titled “Change of Ownership.” Moreover, in the City’s CPNC transfer
application, the current owner is instructed to list all persons with an “equitable
interest” in the CPNC, including any beneficiary that might have an interest
should the holder divorce or die. Finally, Plaintiffs introduced a 1991 opinion
issued by the New Orleans City Attorney stating that “the CPNC, which grants
the holder the right to operate a taxicab in the city, is a valuable right.”
(4) Analysis
At the outset of our analysis, we acknowledge the force with which the
parties have advanced their arguments and the thoughtful disposition of the
district court. Nevertheless, our review of the applicable law and the record
before us compels us to conclude that the district court abused its discretion in
holding that Plaintiffs demonstrated a substantial likelihood of succeeding on
their assertion that sections 162-59 and 162-321 effected a taking of property
interests Plaintiffs hold in their CPNCs. Here, the “existing rules or
understandings” that define the dimensions of the interest associated with a
CPNC evidence that the City historically has viewed and treated a CPNC as a
privilege rather than a form of constitutionally protected property. Although
City officials testified to this effect at the hearing below, our conclusion is most
emphatically supported by the heavily regulated environment within which the
New Orleans taxicab industry has operated.
As the Supreme Court has explained, “‘takings’ jurisprudence . . . has
traditionally been guided by the understandings of our citizens regarding the
content of, and the State’s power over, the ‘bundle of rights’ that they acquire.”
Lucas, 505 U.S. at 1027 (emphasis added). In considering the government’s
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authority over an interest, courts thus have held that a protected property
interest simply “cannot arise in an area voluntarily entered into . . . which, from
the start, is subject to pervasive Government control,” because the government’s
ability to regulate in the area means an individual “cannot be said to possess the
right to exclude.” Mitchell Arms, Inc. v. United States, 7 F.3d 212, 216 (Fed. Cir.
1993) (internal quotation marks, citations, and emphasis omitted); Minneapolis
Taxi Owners Coal., Inc. v. City of Minneapolis, 572 F.3d 502, 509 (8th Cir. 2009)
(citing Mitchell Arms with approval); see also Loretto v. Teleprompter Manhattan
CATV Corp., 458 U.S. 419, 435 (1982) (“The power to exclude has traditionally
been considered one of the most treasured strands in an owner’s bundle of
property rights.”).
We need not go that far, however, to conclude that Plaintiffs have not
demonstrated a substantial likelihood of establishing that sections 162-59 and
162-321 effected a regulatory taking. For even in the absence of the April 2012
versions of sections 162-59 and 162-321, the City’s authority to exercise control
over CPNCs extends to such a degree that their holders possess, if anything,
only a limited bundle of rights in connection therewith. For instance, the City
has the statutory power, among other things, to impose various prerequisites on
a CPNC applicant or transferee, and to suspend or revoke a CPNC.4 Orleans
Parish, La., Code of Ordinances §§ 162-181, 162-248, 162-249. The City also is
authorized to designate routes over which CPNC holders may operate their
vehicles, and to require that CPNCs be renewed annually. Orleans Parish, La.,
4
To obtain a CPNC, a first time applicant or transferee must, inter alia, provide proof
of citizenship or permanent residency, and successfully complete a detailed application, drug
test, and background check. See Orleans Parish, La., Code of Ordinances § 181 et seq.
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Code of Ordinances §§ 162-52, 162-186. Perhaps most importantly, the City has
the discretion to adjust the number of CPNCs it issues.5
As the Hutton court explained, these features all are hallmarks of a
privilege rather than a property right.6 47 So. 2d at 668-69. Hutton noted, for
instance, that a CPNC “is in the nature of a personal privilege or license”
because it “may be amended or revoked by the power authorized to issue it.” Id.
at 668. Similarly, the fact that the City may limit “[t]he number of such
certificates to be granted over a particular route” evidences that CPNCs are
“issued for the purpose of promoting the public convenience and necessity, and
not for the purpose of conferring upon the holder any proprietary interest.” Id.
To be sure, as Plaintiffs argue, the City traditionally has permitted CPNC
holders to transfer their certificates for consideration. By so doing, the City
tacitly has contributed to the development of a secondary market wherein
CPNCs historically have attained significant value. This does not, however,
change our understanding of the fact that CPNC holders merely possess a
“license to participate in the highly regulated taxicab market [that] is subject to
regulatory change.” Minneapolis Taxi Owners, 572 F.3d at 509 (emphasis
added). Indeed, section 162-59 expressly states that CPNCs are privileges.7
5
Section 162-186, which previously limited to a total of 1,600 the number of CPNCs the
City could issue, see Orleans Parish, La., Code of Ordinances § 162-186 (2004), was replaced
in toto in 2009 with provisions that eliminated the cap. Orleans Parish, La., Code of
Ordinances § 162-186 (2009).
6
As mentioned, Plaintiffs raise several objections to the City’s reliance on Hutton.
Their arguments related to the factual distinctions between the New Orleans and Baton Rouge
codes are well-taken. Moreover, to the extent the City argues that Hutton supports the
proposition that all CPNCs are personal privileges regardless of the attributes that might be
vested in them, we agree with Plaintiffs that the City overreads the case. Nevertheless,
Hutton’s articulation of the features of a CPNC, together with its discussion as to whether
those features equate to a privilege or a property right, is instructive.
7
While the holder of a privilege or license may be entitled to certain procedural due
process protections, Wells Fargo Armored Serv. Corp. v. Ga. Pub. Serv. Comm’n, 547 F.2d 938,
941 (5th Cir. 1977), here, Plaintiffs have challenged sections 162-59 and 162-321 under the
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No. 12-30921
Our conclusion is in accord with Minneapolis Taxi Owners. There, a group
of taxicab license holders challenged a Minneapolis ordinance removing that
city’s cap on the number of licenses it issued. Id. at 504. As here, licenses
granted by Minneapolis were transferrable and, because of the prior cap, a
secondary market had developed for their sale. Id. The plaintiffs therefore
argued that the ordinance removing the cap effected a regulatory taking, insofar
as it destroyed the market value of taxicab licenses. Id. at 507. The Eighth
Circuit rejected the plaintiffs’ argument, however, concluding that the heavily
regulated nature of the Minneapolis taxicab industry precluded the development
of a property right of the nature claimed by the plaintiffs. Id. at 508-09. In
particular, the court explained that Minneapolis always had held the authority
to alter the number of licenses it issued, and “[s]o long as the government retains
the discretion to determine the total number of licenses issued, the number of
market entrants is indeterminate.” Id. at 509 (alteration in original) (quoting
Members of Peanut Quota Holders Ass’n, Inc. v. United States, 421 F.3d 1323,
1334 (Fed. Cir. 2005)). Thus, the court held that because the city’s “highly
regulated taxicab market [was] subject to regulatory change,” any interest the
taxicab license holders possessed did “not extend to the market value of the
taxicab licenses derived through the closed nature of the City’s taxicab market.”
Id.
We similarly conclude that whatever interest Plaintiffs hold in their
CPNCs is the product of a regulatory scheme that also vests the City with broad
discretion to alter or extinguish that interest. Indeed, although Plaintiffs allege
that the April 2012 amendment to section 162-321 makes discretionary the
previously mandatory transfer approval process, we note that even under the
Takings Clause rather than the Due Process Clause. Moreover, we note that the Municipal
Code currently provides for notice and an opportunity to be heard for denials, suspensions, and
revocations of CPNCs. Orleans Parish, La., Code of Ordinances §§ 162-248, 162-249.
16
No. 12-30921
prior version of the ordinance, the City retained the right to impose various
preapproval requirements. See Orleans Parish, La., Code of Ordinances § 162-
321(3) (1995) (providing that “[t]he transferee shall submit an application for a
CPNC to the bureau and shall meet all requirements for same in this chapter”
(emphasis added)). In other words, even under the previous version of the
ordinance, a transferee’s ability to obtain a CPNC was bounded by the City’s
regulatory framework—a framework that was subject to further change. Thus,
while Plaintiffs interpret the pre-amended version of section 162-321 to require
approval of CPNC transfers, the ordinance simply appears to have channeled the
discretion of the City officials approving CPNC transfers. Moreover, as a factual
matter, there is some dispute as to whether the amended version of section 162-
321 even alters the landscape surrounding transfers to any significant degree,
since the amendment also added a new subsection providing that the City “shall
approve the transfer upon the determination that the transferee meets the
qualifications of a CPNC holder under this chapter.”8 Orleans Parish, La., Code
of Ordinances § 162-321(6) (2012) (emphasis added).
Simply put, we are of the view that sections 162-59 and 162-321 merely
codify pre-existing law, which defined CPNCs as privileges subject to extensive
regulation. Although it is true that a secondary market has developed based on
the transferability of CPNCs, as we have explained, any resulting interest
Plaintiffs hold in their CPNCs has emerged from a regulatory framework that
itself allows the City to limit or revoke that interest. Such an interest does not
fall within the ambit of a constitutionally protected property right, for it
amounts to no more than a unilateral expectation that the City’s regulation
would not disrupt the secondary market value of CPNCs. See Roth, 408 U.S. at
8
Of course, as Plaintiffs note, the new subsection also provides that “[n]o CPNC may
be transferred if suspension or revocation proceedings are pending with the bureau.” Orleans
Parish, La., Code of Ordinances § 162-321(6) (2012). There appears to be no question that this
is a new limitation on the transferability of CPNCs.
17
No. 12-30921
577 (holding that a unilateral expectation does not constitute a constitutionally
protected entitlement); Peanut Quota Holders, 421 F.3d at 1334-35 (explaining
that holders of certain interests in heavily regulated areas “have no legally
protected right against the government’s making changes in the underlying
program and no right to compensation for the loss in value resulting from the
changes”). Moreover, in light of this highly regulated environment, while
Plaintiffs have pointed to other evidence that purportedly suggests the
development of a custom by which the City treated CPNCs as property, the
current isolated nature of this evidence is insufficient to establish the type of
mutually explicit understanding necessary to create a protectable property right
under the Takings Clause. See Davis, 841 F.2d at 188-89.
Accordingly, on this record, we hold that the district court abused its
discretion in concluding that Plaintiffs demonstrated a substantial likelihood of
prevailing on their claim that sections 162-59 and 162-321 effected a regulatory
taking. We therefore vacate the district court’s order insofar as it granted
Plaintiffs’ motion for a preliminary injunction prohibiting enforcement of
sections 162-59 and 162-321.
B. Plaintiffs’ Appeal
As previously noted, Plaintiffs also allege that sections 162-59 and 162-321
constitute legislation impairing the obligation of contract. Plaintiffs therefore
sought, under that theory, a preliminary injunction prohibiting enforcement of
the ordinances. On appeal, Plaintiffs challenge the district court’s conclusion
that they did not demonstrate a substantial likelihood of prevailing on this
claim, and thus were not entitled to the preliminary injunction in connection
therewith. Plaintiffs also appeal the district court’s denial of their motion for a
preliminary injunction prohibiting enforcement of the Upgrade Ordinances.
These challenges will be addressed in turn, though we note at the outset that
“[t]he denial of a preliminary injunction will be upheld where the movant has
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No. 12-30921
failed sufficiently to establish any one of the [necessary] four criteria.” Black
Fire Fighters, 905 F.2d at 65.
(1) Plaintiffs’ Impairment of Contract Claim
In connection with their impairment of contract claim, Plaintiffs allege
that sections 162-59 and 162-321 breach “contracts” between themselves and the
government, and thus amount to an unconstitutional enactment of ex post facto
laws that interfere with those contracts. In essence, Plaintiffs contend that the
statutory scheme regulating the taxicab industry—as enacted by the City and
the State of Louisiana—constituted an offer to enter into the taxicab business,
subject only to certain clearly understood terms and conditions. Plaintiffs
further argue that by purchasing CPNCs, they accepted the offer and thereby
entered into binding contracts with the City and the State of Louisiana.
According to Plaintiffs, the regulations at issue breached those contracts, and
therefore constitute unconstitutional legislation impairing the obligation of
contract. For the reasons discussed below, we conclude that the district court
properly rejected this argument.
The statutory framework on which Plaintiffs rest their argument is
primarily found in Louisiana Revised Statutes sections 45:200.1 through
200.17—Louisiana’s Public Passenger Motor Vehicle Responsibility Law—and
section 33:4792. Section 45:200.1 declares “that the health, safety, morals and
welfare of the public make it imperative that effective, uniform, reasonable and
just supervision, regulation and control be exercised over the operation of” public
carrier vehicles. La. Rev. Stat. Ann. § 45:200.1. Section 45:200.3 mandates that
such vehicles cannot be operated until the owner receives a CPNC from the
applicable authority, and section 200.7 provides that the certificates “shall be
effective, and operation shall be permitted thereunder” so long as the holder
satisfies certain conditions. La. Rev. Stat. Ann. §§ 45:200.3, 200.7 (emphases
added). Finally, section 33:4792 declares that “[t]he economic viability and
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No. 12-30921
stability of” privately operated for-hire vehicles is “a matter of statewide
importance.” La. Rev. Stat. Ann. § 33:4792.
Plaintiffs assert that they obtained and invested in their CPNCs in
reliance on these provisions. More to the point, Plaintiffs submit that these
statutes created an offer with clear terms and conditions that guarantees them
the right to acquire and utilize their CPNCs, subject only to various conditions
with which they allegedly have complied. While acknowledging that the City
has the duty to protect the public and the taxicab industry by enacting
appropriate regulations, Plaintiffs contend that the City failed to do so in a
reasonable and just way, and commensurately neglected the important state
interest in the economic viability and stability of the industry. Ultimately,
Plaintiffs allege that in enacting sections 162-59 and 162-321, the City breached
the “contracts” created by this statutory framework and thereby violated Article
I, Section 10 of the United States Constitution, as well as Article I, Section 23
of the Louisiana Constitution—both of which prohibit the enactment of
legislation that impairs the obligation of contracts.
In advancing this argument, Plaintiffs rely on Russell v. Sebastian, 233
U.S. 195 (1914). There, the Supreme Court considered a provision of the
California Constitution of 1879, which granted “any individual, or any company
duly incorporated for such purpose . . . the privilege of using the public streets
and thoroughfares thereof, and of laying down pipes and conduits therein, and
connections therewith,” as necessary for supplying “illuminating light” or fresh
water. Id. at 198. In 1911, this provision had been amended to state that
“[p]ersons or corporations may establish and operate works for supplying the
inhabitants with such services upon such conditions and under such regulations
as the municipality may prescribe under its organic law.” Id. at 198-99.
Pursuant to this revision, the City of Los Angeles passed an ordinance requiring
utility providers to obtain a grant from the city prior to commencing the
20
No. 12-30921
excavation activities necessary for installing utility pipes and conduits. Id. at
199. The plaintiff challenged the ordinance and the constitutional amendment
under which it was promulgated, arguing that they impaired the obligation of
contracts formed prior to their enactment. Id. at 199-200.
In addressing the plaintiff’s claim, the Sebastian Court explained that the
California Supreme Court previously had construed the 1879 constitutional
provision as a “direct grant” limited only by the requirements of the provision
itself. Id. at 203-04. Likewise, the state supreme court previously had explained
that the privilege contained therein could “be accepted by any person, or by any
company.” Id. at 204. Accordingly, the Court stated that “[w]hen the voice of
the state declares that it is bound if its offer is accepted, and the question simply
is with respect to the scope of the obligation, we should be slow to conclude that
only a revocable license was intended.” Id. Hence, the Court held that “the
grant, resulting from an acceptance of the state’s offer, constituted a contract,
and vested in the accepting individual or corporation a property right, protected
by the Federal Constitution.” Id.
As noted, Plaintiffs read Sebastian to support their conclusion that the
referenced statutory scheme created by the City and the State of Louisiana
constituted a contractual offer to enter into the taxicab business. Nevertheless,
their reliance on Sebastian is misplaced. First, unlike in Sebastian, no court has
declared the statutory scheme at issue here to constitute an offer. More
fundamentally, in contrast to Sebastian, the statutes on which Plaintiffs rely do
not contain an absolute grant related to the taxicab industry that may be
construed as a contract. Indeed, nothing in the statutes cited by Plaintiffs
demonstrates an intent on the part of the City or the State of Louisiana to
extend to those in the taxicab industry an offer of a contractual nature. See
U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1, 17 n.14 (1977) (“In general, a
statute is itself treated as a contract [only] when the language and
21
No. 12-30921
circumstances evince a legislative intent to create private rights of a contractual
nature enforceable against the State.”).
Accordingly, we conclude that there is no basis for finding that a contract
exists between Plaintiffs and the City or the State of Louisiana. The district
court therefore did not abuse its discretion in holding that Plaintiffs failed to
demonstrate a substantial likelihood of establishing that sections 162-59 and
162-321 constitute legislation impairing the obligation of contract. Furthermore,
having so concluded, we may also dispose of Plaintiffs’ claim that the Upgrade
Ordinances impair contracts into which they have entered with the City and
State of Louisiana, as that claim necessarily depends, in the first instance, on
the presence of contracts. We therefore affirm the district court’s denial of a
preliminary injunction in connection with all aspects of Plaintiffs’ impairment
of contract claim.
(2) Plaintiffs’ Remaining Challenges to the Upgrade Ordinances
Plaintiffs also appeal, on other grounds, the district court’s conclusion that
they were not entitled to a preliminary injunction prohibiting enforcement of the
Upgrade Ordinances. Again, the ordinances included in this category: (1)
declare that certain vehicles may not be used as taxicabs, (2) require taxicabs to
maintain trip sheets for a two-year period, (3) place certain age limits on vehicles
used as taxicabs, (4) require taxicabs to have credit/debit card machines
equipped with Passenger Information Monitors that permit wireless
communication, (5) mandate that taxicabs be equipped with a security camera,
and (6) require taxicabs to be fitted with GPS devices.
(a) Background Discussion
The City asserts that the Upgrade Ordinances largely were enacted to
advance the City’s legitimate interest in ensuring the safety of its citizens and
visitors. The ordinance requiring credit/debit card machines, for instance,
purportedly was enacted based on the City’s perspective that taxicab drivers
22
No. 12-30921
would carry less cash if the machines were installed, and therefore would be less
likely targets of criminal activity. Likewise, the City introduced evidence that
the ordinance requiring security cameras was motivated by the City’s concern
for passenger and driver safety, as those involved in the taxicab industry often
work alone, at night, and in high-crime areas, and cameras have been shown to
have a deterrent effect on crime.
The City also argues that its interest in the safety of taxicab riders and
drivers precipitated the ordinance that places an age limit of eleven model years
on vehicles used as taxicabs.9 More particularly, the City’s position is that newer
vehicles advance public welfare because they are equipped with modern safety
features such as multiple air bags and online diagnostic systems. Further, the
City also argues that the ordinance advances safety insofar as the diagnostic
systems alert a driver as to when a vehicle needs to be serviced, thereby helping
to prevent unexpected breakdowns.
Other evidence suggested that the Upgrade Ordinances also were enacted
to promote hospitality and tourism in New Orleans. The GPS requirement, for
example, ostensibly was based on the City’s desire to provide passengers with
efficient navigation and a means to ensure that taxicab drivers charge
passengers a proper fare. The ordinance mandating retention of trip sheets was
designed to provide the City with information about the operations of the taxicab
industry, including the number of passengers transported on a daily basis. City
officials further testified that trip sheets also help to ensure that drivers are not
illegally operating taxicabs.
Notwithstanding these arguments, Plaintiffs maintain that the Upgrade
Ordinances effect a regulatory taking, violate the Equal Protection Clause, and
9
As previously noted, the age limit is lowered to seven model years beginning January
1, 2014.
23
No. 12-30921
constitute “excessive and unreasonable governmental regulation.”10 In
particular, Plaintiffs contend that the Upgrade Ordinances constitute a
regulatory taking because they require taxicab owners and drivers to expend
considerable resources to comply with the ordinances’ requirements. Most
forcefully, Plaintiffs advance several arguments to support their claim that the
ordinances violate the Equal Protection Clause. First, they allege that the
ordinances requiring taxicabs operators to maintain trip sheets and to equip
their vehicles with credit/debit card machines, security cameras, and GPS
devices are not rationally related to a legitimate governmental purpose. Second,
Plaintiffs submit that the ordinance setting a maximum vehicle age violates the
Equal Protection Clause because it does not apply to other for-hire vehicles, and
there is no rational basis for such disparate treatment. Finally, Plaintiffs allege
that the ordinance placing an eleven-year age limit on taxicabs is not rationally
related to a legitimate governmental purpose but is, instead, “totally arbitrary.”
In challenging the vehicle age ordinance, Plaintiffs suggest that mileage is a
better and more accurate indicator of age than model year. This is especially
true, Plaintiffs argue, in cities like New Orleans—with a seasonal customer
base—since taxicabs in such areas average significantly fewer miles per year
than taxicabs in other major metropolitan areas.
(b) Analysis
Despite the compelling nature of the parties’ arguments, we are mindful
of the current posture of the case. It is not our role, in other words, to decide the
merit of these arguments.11 Rather, we must affirm the district court’s denial
10
Although Plaintiffs also allege that the Upgrade Ordinances impair contracts created
by the regulatory framework surrounding the taxicab industry, we have, as explained, already
disposed of that claim.
11
We observe, however, that Plaintiffs have advanced a particularly forceful argument
that the City’s rational basis for section 162-613—the ordinance placing an eleven-year age
limit on vehicles used as taxicabs—is unclear.
24
No. 12-30921
of a preliminary injunction if Plaintiffs failed to satisfy any one of the required
criteria for obtaining such relief. Black Fire Fighters, 905 F.2d at 65. Here, the
district court concluded that Plaintiffs failed to establish that they would be
irreparably injured by the denial of an injunction.12 We agree.
Plaintiffs have alleged that, in the absence of a preliminary injunction, the
significant costs of complying with the Upgrade Ordinances will cause
irreparable injury. In particular, they assert that, to achieve full compliance
with the ordinances, taxicab owners will be required to expend between $25,000
and $40,000. Moreover, in light of the new vehicle age limits, Plaintiffs contend
that over 60% of the taxicab industry will be required to replace their vehicles
by January 1, 2013—a burden, they submit, that many members of the industry
will be unable to meet.
The City takes issue with Plaintiffs’ facts. Specifically, it contends that
the evidence indicates that the cost of complying with the ordinances actually is
only about $2,000.13 Further, the City suggests to us that approximately 75% of
the City’s taxicab industry already is in compliance with the vehicle age
requirements.
Regardless of the dispute surrounding these allegations, however,
Plaintiffs’ argument is legally insufficient to establish that they would be
irreparably injured in the absence of an injunction. “Federal courts have long
recognized that, when ‘the threatened harm is more than de minimis, it is not
so much the magnitude but the irreparability that counts for purposes of a
preliminary injunction.’” Enter. Int’l, Inc. v. Corporacion Estatal Petrolera
Ecuatoriana, 762 F.2d 464, 472 (5th Cir. 1985) (emphasis added) (quoting Canal
12
Although the district court concluded that Plaintiffs also failed to satisfy all other
requirements for injunctive relief in connection with the Upgrade Ordinances, we express no
view on the remainder of the court’s analysis.
13
We note, however, that as Plaintiffs maintain, it appears that the City’s estimate does
not include the costs associated with acquiring newer vehicles.
25
No. 12-30921
Auth. v. Callaway, 489 F.2d 567, 575 (5th Cir. 1974)). It is thus well-established
that an injury is irreparable only “if it cannot be undone through monetary
remedies.” Interox Am. v. PPG Indus., Inc., 736 F.2d 194, 202 (5th Cir. 1984);
see also Deerfield Med. Ctr. v. City of Deerfield Beach, 661 F.2d 328, 338 (5th Cir.
1981); Spiegel v. City of Houston, 636 F.2d 997, 1001 (5th Cir. 1981); Parks v.
Dunlop, 517 F.2d 785, 787 (5th Cir. 1975). “Mere injuries, however substantial,
in terms of money, time and energy necessarily expended in the absence of [an
injunction], are not enough. The possibility that adequate compensatory or other
corrective relief will be available at a later date, in the ordinary course of
litigation, [weighs] heavily against a claim of irreparable harm.” Morgan v.
Fletcher, 518 F.2d 236, 240 (5th Cir. 1975) (quoting Va. Petroleum Jobbers Ass’n
v. Fed. Power Comm’n, 259 F.2d 921, 925 (D.C. Cir. 1958)).
Here, the costs of complying with the Upgrade Ordinances, though
disputed at this juncture, can be ascertained with precision at a later hearing.
In other words, should Plaintiffs ultimately prevail on the merits of their suit,
they have recourse—in the form of subsequent civil suits against the City—to
recover the amounts they erroneously will have expended to comply with the
ordinances.14 Thus, because Plaintiffs’ only alleged harm can be obviated by
14
Contrary to the district court’s order, there is some question as to whether this would
be true of Plaintiffs’ impairment of contract claim. Compare Carter v. Greenhow, 114 U.S. 317,
322 (1885) (holding that “the only right secured” by the Contract Clause is the “right to have
a judicial determination declaring the nullity of the attempt to impair [the] obligation”), and
Crosby v. City of Gastonia, 635 F.3d 634, 640 (4th Cir. 2011) (“[R]ecourse to § 1983 for the
deprivation of rights secured by the Contracts Clause is limited to the discrete instances where
a state has denied a citizen the opportunity to seek adjudication through the courts as to
whether a constitutional impairment of a contract has occurred, or has foreclosed the
imposition of an adequate remedy for an established impairment. Section 1983 provides no
basis to complain of an alleged impairment in the first instance.”), with Dennis v. Higgins, 498
U.S. 439, 451 n.9 (1991) (explaining that the Supreme Court has given Carter “a narrow
reading” based on the nature of the Carter plaintiff’s pleading), and S. Cal. Gas Co. v. City of
Santa Ana, 336 F.3d 885, 887 (9th Cir. 2003) (holding that the deprivation of rights secured
by the Contract Clause may “give rise to a cause of action under section 1983” and that Carter
“is not to the contrary”). Nevertheless, we need not resolve the issue here, and we express no
view in connection with it. As we already have discussed, Plaintiffs failed to establish a
26
No. 12-30921
monetary relief, it does not constitute the “irreparable” injury necessary to
obtain the extraordinary relief of a preliminary injunction.15
Accordingly, we conclude that the district court did not abuse its discretion
in holding that Plaintiffs failed to demonstrate that they would be irreparably
injured by the denial of an injunction. We therefore affirm the district court’s
order insofar as it denied Plaintiffs’ request for a preliminary injunction
enjoining enforcement of the Upgrade Ordinances.
IV. CONCLUSION
In light of the foregoing, we VACATE the district court’s order insofar as
it granted a preliminary injunction; we AFFIRM that order insofar as it denied
a preliminary injunction; and we REMAND the case for further proceedings
consistent with this opinion. Plaintiffs shall bear the costs of this appeal. The
mandate shall issue forthwith.
substantial likelihood of succeeding on the merits of their impairment of contract claim, and
it is on that basis that we affirm the district court’s denial of a preliminary junction.
15
We observe, for the sake of comprehensiveness, that Plaintiffs alleged in the lower
court that requiring them to install GPS devices, credit/debit card machines, and security
cameras violated their right to privacy. While the district court properly explained that this
allegation could form the basis of a claim of “irreparable injury,” see Deerfield, 661 F.2d at 338,
the court concluded that Plaintiffs did not have a substantial likelihood of succeeding on their
right to privacy claim. We need not address that issue here, however, as Plaintiffs have
waived or abandoned that claim on appeal by failing to address it in their briefs. See Al-Ra’id
v. Ingle, 69 F.3d 28, 31 (5th Cir. 1995) (“An appellant’s brief must contain an argument on the
issues that are raised, in order that we, as a reviewing court, may know what action of the
district court is being complained of.”).
27