CITY OF PORTLAND HEARINGS OFFICE INTRODUCTION. The City of Portland Revenue Bureau (Bureau) has issued a penalty to

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1 Appeal of Broadway Cab, LLC RE: Violation of PCC.0.0 CITY OF PORTLAND HEARINGS OFFICE INTRODUCTION Case No. APPELLANT BROADWAY CAB S HEARING MEMORANDUM 1 1 The City of Portland Revenue Bureau (Bureau) has issued a penalty to Broadway Cab, LLC (Broadway) for an alleged violation of Portland City Code.0.0(A). Broadway disagrees with the Bureau and appeals the penalty assessment. This appeal is supported by the following memorandum with attachments, and it will be supplemented by counsel s arguments at the hearing. FACTS This matter arises from an incident that occurred on the evening of July, 1 on I- and I- in Portland. That night, Ahmed Egal (Egal), an independent contractor driving his own vehicle marked as a Broadway Cab pursuant to his Operating Agreement with Broadway Cab, picked up Shanako Devoll (Devoll), Kate Neal (Neal), and Eric Swensied (Swensied) outside Casa Diablo, a strip club and bar in northwest Portland. Broadway Cab had not received a request for a cab to Casa Diablo, and had not dispatched a cab for Neal, Devoll and Swensied. Instead, these three people flagged down Egal as he was dropping off a fare at Casa Diablo. The three customers requested that Egal drive them to a location in east Portland. Devoll sat directly behind Page 1 - APPELLANT BROADWAY CAB S HEARING MEMORANDUM Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0

2 1 1 Egal. Neal sat in the center of the back seat. Swensied sat behind the front passenger seat. Egal proceeded to drive the customers towards east Portland. He noticed the customers seemed very intoxicated. Eventually, Egal merged onto eastbound I-. Meanwhile, the customers seemed to be having a dispute about where Egal should take them. Egal also felt someone kicking the back of his seat. He pulled over into the shoulder of eastbound I- so that the group could decide on their destination. He requested they stop kicking his seat and put on their seatbelts. While he slowed to a stop in the shoulder, Devoll opened the passenger door to her left as if to get out of the cab. Neal quickly reached over and closed the door. Egal then came to a complete stop. The group decided Egal should continue driving east. Egal merged back into traffic and drove east on I-. He called as he drove and reported that the customers were not going to pay and wanted to get out on the freeway. Still on the phone with, Egal merged onto northbound I-. He pulled over into the shoulder and slowed to a stop. Devoll opened her door a second time. Egal exclaimed to the operator that the customers were attempting to exit on the freeway while he was still moving. All three customers then got out of the cab and stood on the shoulder of the freeway. See Exhibit A (recording of Egal s call). After exiting Egal s cab, Devoll used her cell phone to call Broadway s -hour dispatch service. She told the dispatch operator that she wanted to speak with a manager to report a complaint. According to Devoll, Egal discriminated against her and Neal for being gay, made derogatory remarks, and dropped them off on the side of the freeway. She did not ask the operator for another cab. She did not tell the operator that the group wanted to get to any particular destination or required assistance beyond reporting the complaint. Instead, she said she planned to sue Broadway. The dispatch operator told Devoll he would write up her complaint and that she could leave a Page - APPELLANT BROADWAY CAB S HEARING MEMORANDUM Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0

3 1 1 voic message for the Broadway lot superintendent. See Exhibit B (recording of Devoll s call to Broadway dispatch). After the operator transferred her, Devoll left a voic message for the lot superintendent. The superintendent responded the next morning. Another Broadway Cab driving north on I- arrived as the customers stood on the side of the freeway. The driver of the second cab, Petre Stanila (Stanila), was an independent contractor driving his own vehicle marked as a Broadway Cab pursuant to his Operating Agreement with Broadway Cab. The customers got in Stanila s cab. Egal approached and told Stanila that the customers had refused to pay Egal, and Stanila instructed the customers that he would not take them. The customers then exited Stanila s cab and eventually left the freeway on foot. In separate actions against Egal and Broadway, filed with the Oregon Bureau of Labor and Industries (BOLI), Devoll and Neal alleged that Egal kicked them out of his cab because they were gay. Egal denied he acted in a discriminatory manner and denies he kicked the customers out of his cab. He said they would not pay and decided to exit the cab when he called to report them. On February,, BOLI issued its findings in the actions filed by Devoll and Neal. See Exhibits C (BOLI Notices of Substantial Evidence Determination re: Shanako Devoll). 1 While BOLI found substantial evidence that Egal denied services on the basis of sexual orientation, it found no evidence that Broadway discriminated in any way against Neal or Devoll. Id. at -. In fact, BOLI found that Broadway never received a request through its dispatch to provide service to Devoll and Neal, and that Egal was solely responsible for offering service to them that night. Id. at. Finally, BOLI concluded that, in any event, Broadway was not responsible for Egal s conduct because 1 BOLI s findings in both actions are essentially identical. For ease of reference, only the Devoll findings are attached as Exhibit C. Page - APPELLANT BROADWAY CAB S HEARING MEMORANDUM Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0

4 1 1 Egal was an independent contractor rather than an employee of Broadway. Id. at (because Egal was an independent contractor and not an employee, it is not reasonable to conclude that [Broadway] was acting on behalf of [Egal] ). ARGUMENT 1. Broadway operates a -hour dispatch system capable of providing reasonably prompt service PCC.0.0(A) requires that taxi cab companies operate a -hour telephone dispatch system capable of providing reasonably prompt service in response to requests received by telephone. It is undisputed that Broadway operates a -hour dispatch system for customers to request cab rides. And that system did not fail to provide reasonably prompt service on this occasion. It is clear in the recording of her conversation with the dispatch operator that Devoll called to report a complaint about Egal, not to request a cab ride. See Exhibit B. Indeed, BOLI s confirmed this fact by finding that Broadway never received a request for taxi service through its dispatch by Devoll, Neal, or by anyone on their behalf, and that Egal was solely responsible for offering service to them that night. Exhibit C at. The dispatch operator who answered provided prompt assistance by taking down Devoll s complaint and telling her that she could leave a message for the supervisor. Exhibit B. The Bureau claims that Broadway s dispatch failed to provide prompt service to the customers to get them to their destination, and didn t get them to their destination at all. But Devoll, Neal and Swensied never requested a cab through dispatch at any time that night, they never asked the dispatcher for help in getting to any particular destination, and they never asked for another ride. It is unclear how Broadway s dispatch failed to get the customers to their destination when the customers did not Page - APPELLANT BROADWAY CAB S HEARING MEMORANDUM Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0

5 1 1 request a cab from dispatch that night or any other assistance besides placing the complaint. Therefore, because Broadway maintains a dispatch system that did not fail to provide reasonably prompt service on this occasion, Broadway did not violate PCC.0.0(A).. Enforcing.0.0 in this way is contrary to the purpose of the City s taxicab regulations The City passed taxicab regulations to provide for the safe, fair and efficient operation of taxi services, not to impose unnecessary restraint on the industry. PCC.0.0(A). The code s legislative history confirms that council members wanted to establish minimum requirements without placing undue regulatory and enforcement burdens on the taxi industry. In keeping with this clear legislative purpose, PCC.0.0(A) merely requires that taxi cab companies operate a -hour telephone dispatch system equipped to handle customer requests, which Broadway does. Nothing in the text of this code section or the legislative history supports an interpretation allowing ad hoc enforcement by the Bureau when customers complain of mistreatment by cab drivers. Other avenues exist for the Bureau and aggrieved customers to prosecute Portland cab drivers for alleged discriminatory conduct. All PCC.0.0(A) requires is a -hour call center that can handle customer requests. It does not require or proscribe certain driver conduct, and it does not authorize the Bureau to assess a penalty whenever an aggrieved customer places a complaint through a cab company s dispatch operator. For example, during the May, 0 council meeting adopting significant revisions to the code, Commissioner Randy Leonard recognized that the goal of the code was to find a delicate balance * * * to make sure that [the taxi industry] not only survives but thrives * * *. Minutes, Portland City Council Meeting, Ord. 1, May, 0. To reach this balance, Commissioner Leonard wanted to make sure that we don t regulate greatly the taxi cab industry * * *. Id. Mayor Adams emphasized that the regulations would help us refine and nurture that industry we want to grow and succeed. Id. Page - APPELLANT BROADWAY CAB S HEARING MEMORANDUM Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0

6 1 1 Allowing this code provision to serve as a basis for such ad hoc enforcement would be completely contrary to the clear purpose of the City s taxicab regulations.. Broadway is not subject to a penalty for the actions of independent contractors Finally, to the extent the Bureau seeks to impose this penalty on Broadway because of the alleged conduct of Egal, such an assessment would be improper because Broadway may not be held vicariously liable for Egal s conduct. It is well-settled that a party may not be held vicariously liable for the acts of an independent contractor. See Vaughn v. First Transit, Inc., Or 1,, Pd 1 (0) (holding that a principal is not liable for the acts of agents who are not employees). This is because the party that hired the independent contractor lacks the right to control the specific manner in which the independent contractor performs the work. Id. at 0 (principals are liable for the acts of agents only when the principal had the right to control the physical details of the conduct of the agent that gave rise to the tort claim ). Here, it is clear Egal operated his own taxi business as an independent contractor and was not an employee of Broadway. Egal operated his taxi cab under an agreement that expressly specified that he was not an employee but an independent contractor for Broadway. See Exhibit D (Egal Taxi Services Agreement at ). Egal provided his own vehicle and paid Broadway a weekly fee, in exchange for which Broadway provided a variety of administrative services to support Egal s business as a taxi cab operator. See Exhibit E (Egal Vehicle Agreement at 1-); see also Exhibit D at. Egal was paid by his own customers, not by Broadway. Id. at ( Business Owner is a self-employed business owner, who owns and operates his/her own business, and provides services to passengers, for which he/she is paid by the passengers. ) He was free to choose when, where, and how he operated his business. Id. Broadway paid no Page - APPELLANT BROADWAY CAB S HEARING MEMORANDUM Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0

7 1 taxes or worker s compensation insurance on Egal s behalf. Id. Nor could Broadway exercise any direct control over the specific details of Egal s operation of his taxi. Id. Accordingly, Broadway did not maintain control over the specific manner in which Egal performed his work such that Broadway could be held vicariously liable for Egal s conduct. Thus, to the extent the Bureau seeks to penalize Broadway for Egal s alleged conduct, that assessment would be improper. CONCLUSION For the reasons stated above, the Bureau s penalty assessment should be overturned. DATED this rd day of March,. COSGRAVE VERGEER KESTER LLP 1 /s/ Derek J. Ashton Derek J. Ashton, OSB Telephone: Fax: dashton@cosgravelaw.com For Broadway Cab, LLC Notably, in concluding that Broadway did not retain the right to control Egal sufficient to create an employer/employee relationship, BOLI found as follows: There is little evidence that [Broadway], retained a right to control the method or manner in which [Egal] provided taxi services to the general public. Both the Taxi Services Agreement and Vehicle Owner Agreement explicitly state that both parties thereto understand the relationship to be exclusively one of independent contractors. Thus [Broadway], was contractually obligated to refrain from directing or controlling the manner or method by which Respondent Egal operated his taxi cab. Exhibit C at (emphasis in original). Page - APPELLANT BROADWAY CAB S HEARING MEMORANDUM Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0

8 1 1 CERTIFICATE OF SERVICE I hereby certify that I served a true and correct copy of the foregoing APPELLANT BROADWAY CAB S HEARING MEMORANDUM on the date indicated below by: mail with postage prepaid, deposited in the US mail at Portland, Oregon, hand delivery, facsimile transmission, overnight delivery, . I further certify that said copy was placed in a sealed envelope delivered as indicated above and addressed to said attorney at the address listed below: Ken McGair City of Portland 1 SW Fourth Avenue, Room 0 Portland, OR Attorney for City of Portland DATED: March, /s/ Derek J. Ashton Derek J. Ashton Page 1 CERTIFICATE OF SERVICE Portland, Oregon Telephone: (0) -000 Facsimile: (0) -0