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No. 17-35640

In the United States Court of Appeals
for the Ninth Circuit

Chamber of Commerce of the United States of America, et al.,
Plaintiffs-Appellants,
v.
City of Seattle, et al.,
Defendants-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON

DEFENDANTS-APPELLEES’ PETITION FOR REHEARING OR
REHEARING EN BANC

PETER S. HOLMES
Seattle City Attorney
GREGORY C. NARVER
MICHAEL K. RYAN
SARA O’CONNOR-KRISS
JOSH JOHNSON
Assistant City Attorneys
Seattle City Attorney’s Office
701 Fifth Avenue, Suite 2050
Seattle, WA 98104
(206) 684-8200

STEPHEN P. BERZON
STACEY M. LEYTON
P. CASEY PITTS
Altshuler Berzon LLP
177 Post Street, Suite 300
San Francisco, CA 94108
(415) 421-7151

Attorneys for Defendants-Appellees City of Seattle et al.

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TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................................................. ii
REASONS FOR REHEARING ............................................................................. 1
BACKGROUND ................................................................................................... 4
ARGUMENT......................................................................................................... 6
I.

The Panel’s Interpretation of the “Active Supervision” Requirement
Conflicts with the Decisions of this Court and Multiple Other Circuits
and Will Hamstring Local and State Governments....................................... 6

II.

The Panel’s Interpretation of the “Clear Articulation” Requirement
Intrudes Upon State Sovereignty and Is Contrary to Supreme Court
Decisions ................................................................................................... 13

CONCLUSION ................................................................................................... 18
CERTIFICATE OF COMPLIANCE.................................................................... 20
CERTIFICATE OF SERVICE............................................................................. 21

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TABLE OF AUTHORITIES
Cases
Boone v. Redevelopment Agency,
841 F.2d 886 (9th Cir. 1988) ............................................................................16
California ex rel. Harris v. Safeway, Inc.,
651 F.3d 1118 (9th Cir. 2011) ..........................................................................10
California Liquor Dealers v. Midcal Aluminum,
445 U.S. 97 (1980) ...........................................................................................13
Cantor v. Detroit Edison Co.,
428 U.S. 579 (1976) .........................................................................................14
City of Columbia v. Omni Outdoor Advertising, Inc.,
499 U.S. 365 (1991) ................................................................................... 10, 16
City of Lafayette v. La. Power & Light Co.,
435 U.S. 389 (1978) ................................................................................... 13, 14
Cotter v. Lyft, Inc.,
60 F.Supp.3d 1067 (N.D. Cal. 2015) ................................................................18
Doe v. Uber Techs., Inc.,
184 F.Supp.3d 774 (N.D. Cal. 2016) ................................................................18
Elec. Inspectors, Inc. v. Village of East Hills,
320 F.3d 110 (2d Cir. 2003) ....................................................................... 1, 2, 9
FTC v. Phoebe Putney Health Sys., Inc.,
568 U.S. 216 (2013) ............................................................................... 3, 14, 15
FTC v. Ticor Title Ins. Co.,
504 U.S. 621 (1992) .....................................................................................7, 11
Gold Cross Ambulance & Transfer v. City of Kansas City,
705 F.2d 1005 (8th Cir. 1983) ................................................................ 1, 2, 8, 9
Golden State Transit Corp. v. City of Los Angeles,
726 F.2d 1430 (9th Cir. 1984) ........................................................................... 9
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Medic Air Corp. v. Air Ambulance Authority,
843 F.2d 1187 (9th Cir. 1988) ..........................................................................14
Mercy-Peninsula Ambulance, Inc. v. San Mateo County,
791 F.2d 755 (9th Cir. 1986) ............................................................................13
Mich. Paytel Joint Venture v. City of Detroit,
287 F.3d 527 (6th Cir. 2002) ............................................................................. 9
N.C. State Bd. of Dental Examiners v. FTC,
135 S.Ct. 1101 (2015) ...................................................................... 7, 10, 11, 15
New State Ice Co. v. Liebmann,
285 U.S. 262 (1932) .........................................................................................18
O’Connor v. Uber Technologies, Inc.,
82 F.Supp.3d 1133 (N.D. Cal. 2015) ................................................................17
Parker v. Brown,
317 U.S. 341 (1943) ..................................................................................passim
Preferred Communications, Inc. v. City of Los Angeles,
754 F.2d 1396 (9th Cir. 1985) ..........................................................................15
Rhone v. Try Me Cab Co.,
65 F.2d 834 (D.C. Cir. 1933) ...........................................................................17
Riverview Inv., Inc. v. Ottawa Community Imp. Corp.,
774 F.2d 162 (6th Cir. 1985) ............................................................................. 9
Southern Motor Carriers Rate Conf., Inc. v. United States,
471 U.S. 48 (1985) ............................................................................. 1, 3, 15, 17
Tom Hudson & Associates, Inc. v. City of Chula Vista,
746 F.2d 1370 (9th Cir. 1984) .................................................................... 1, 2, 8
Town of Hallie v. City of Eau Claire,
471 U.S. 34 (1985) .......................................................................................8, 11
Traweek v. City & County of San Francisco,
920 F.2d 589 (9th Cir. 1990) ........................................................................1, 16

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Tri-State Rubbish, Inc. v. Waste Mgmt., Inc.,
998 F.2d 1073 (1st Cir. 1993) ................................................................ 1, 2, 8, 9
Statutory Authorities
Seattle Mun. Code 6.310.110 ................................................................................. 4
Seattle Mun. Code 6.310.735 ..............................................................................5, 7
Wash. Rev. Code §46.72.001 ............................................................................3, 14
Wash. Rev. Code §46.72.160 ...................................................................... 3, 14, 17
Wash. Rev. Code §81.04.010 ................................................................................16
Wash. Rev. Code §81.72.200 ............................................................................3, 14
Wash. Rev. Code §81.72.210 ............................................................................3, 17
Rules
9th Cir. R. 35-1 ...................................................................................................... 1
Fed. R. App. P. 35.................................................................................................. 1
Additional Authorities
Merrick B. Garland, Antitrust and State Action: Economic Efficiency and the
Political Process, 96 Yale L.J. 486 (1987) ......................................................... 8

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REASONS FOR REHEARING
As the Supreme Court and this Court have long recognized, “the free market
principles espoused in the Sherman Antitrust Act” must sometimes cede to
“countervailing principles of federalism and respect for state sovereignty.” Traweek
v. City & County of San Francisco, 920 F.2d 589, 591 (9th Cir. 1990). The panel
opinion here decimates those principles by construing the requirements for stateaction antitrust immunity (“Parker immunity”) in a manner that precludes States
from exercising their sovereign powers through local governments best situated to
respond to changing local needs and circumstances, and threatens a wide range of
existing government programs and regulations. The opinion conflicts with decisions
of the Supreme Court, this Court, and at least three other Circuits. See Southern
Motor Carriers Rate Conf., Inc. v. United States, 471 U.S. 48, 64 (1985); Tom
Hudson & Associates, Inc. v. City of Chula Vista, 746 F.2d 1370 (9th Cir. 1984);
Tri-State Rubbish, Inc. v. Waste Mgmt., Inc., 998 F.2d 1073, 1079 (1st Cir. 1993);
Gold Cross Ambulance & Transfer v. City of Kansas City, 705 F.2d 1005, 1014-15
(8th Cir. 1983); Elec. Inspectors, Inc. v. Village of East Hills, 320 F.3d 110, 127 (2d
Cir. 2003). Rehearing is necessary to secure and maintain uniformity of this Court’s
decisions, and address an issue of exceptional importance. Fed. R. App. P. 35(a); 9th
Cir. R. 35-1.
In reversing the dismissal of a federal antitrust challenge to a Seattle
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Ordinance authorizing the collective organization of independent contractor drivers
in Seattle’s for-hire transportation and taxicab industries, the panel held that the
Ordinance satisfies neither of the two requirements for Parker immunity. It
concluded that the “active supervision” requirement was not met because Seattle,
not Washington state, officials are responsible for supervising the conduct of private
parties subject to the Ordinance. Op. at 34-37. Its conclusion that state officials must
supervise participants in local regulatory programs conflicts with Tom Hudson, 746
F.2d 1370 (9th Cir. 1984), and the decisions of every other Circuit Court to consider
the issue—authorities the panel ignored, see Tri-State Rubbish, 998 F.2d at 1079 (1st
Cir.); Gold Cross Ambulance, 705 F.2d at 1014-15 (8th Cir.); Elec. Inspectors, 320
F.3d at 127 (2d Cir.).
This unprecedented holding will impose substantial new burdens on state
governments and hamstring local governments without promoting any of the “active
supervision” requirement’s purposes. Indeed, because states frequently delegate
regulatory authority to local governments in areas like transportation, garbage
collection, and emergency services, and local governments often rely on private
parties to implement regulatory programs in those areas, the panel’s decision will
invalidate longstanding local government practices throughout the Circuit and
expose many public and private actors to antitrust claims.
The panel separately held that the Ordinance is not entitled to Parker
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immunity because it was not enacted pursuant to a clearly articulated and
affirmatively expressed Washington policy to displace competition with regulation.
Op. at 20-31. The panel concluded that this “clear articulation” requirement was not
met because the relevant Washington statutes fail to address the specific form of
regulation embodied in the Ordinance, Op. at 24, even though the Washington
Legislature explicitly granted Seattle authority to regulate for-hire transportation and
taxicab services “without liability under federal antitrust laws,” including by
adopting “[a]ny other requirements” to ensure “safe and reliable … transportation
service,” Wash. Rev. Code §§46.72.001, 46.72.160(6), 81.72.200, 81.72.210(6); the
City Council made extensive findings that the Ordinance will improve the safety and
reliability of transportation services in Seattle, Ordinance 2d Whereas Cl., §1; and
the District Court dismissed on the merits plaintiffs’ claim that the City Council
acted beyond its state law authority (a conclusion plaintiffs did not appeal).
The panel’s holding fails to heed the Supreme Court’s repeated reminders that
state legislatures need not “explicitly authorize specific anticompetitive effects
before state-action immunity [can] apply,” FTC v. Phoebe Putney Health Sys., Inc.,
568 U.S. 216, 229 (2013), and that Parker immunity permits state legislatures to
delegate regulatory authority to the entities best suited to respond to “problems
unforeseeable to, or outside the competence of, the legislature,” Southern Motor
Carriers, 471 U.S. at 64. By requiring state legislatures to specify every way a
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delegation of regulatory authority may be exercised and ignoring the City Council’s
findings, the panel’s holding prohibits states from giving local governments the
flexibility and discretion to exercise delegated powers in the manner most responsive
to changing local circumstances, and deprives states of their sovereign power to
structure their internal government, including by dividing power between different
levels of government.
BACKGROUND
This lawsuit challenges Seattle Ordinance 124968 “Relating to Taxicab,
Transportation Network Company, and For-Hire Vehicle Drivers.” The Seattle City
Council enacted the Ordinance “to ensure safe and reliable for-hire and taxicab
transportation service” within Seattle by establishing a process through which
taxicab, transportation network company, and for-hire vehicle drivers can
collectively negotiate their agreements “with the entities that hire, direct, arrange, or
manage their work.” Ordinance 2d Whereas Cl., §1.C.1 The Council made extensive
findings, based partly on experience in other transportation industries, that
establishing a framework for such negotiations would “enable more stable working

1

Transportation network companies (“TNCs”) are companies like Uber and Lyft
that that “offer[] prearranged transportation services for compensation using an
online-enabled TNC application or platform to connect passengers with drivers
using their personal vehicles.” Seattle Mun. Code (“SMC”) 6.310.110.
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conditions and better ensure that drivers can perform their services in a safe, reliable,
stable, cost-effective, and economically viable manner.” Id. §1.I.
The Ordinance establishes a process whereby a majority of a company’s
qualifying drivers may choose to designate an “exclusive driver representative” to
negotiate with the company regarding certain subjects, including “best practices
regarding vehicle equipment standards; safe driving practices; the manner in which
the driver coordinator will conduct criminal background checks of all prospective
drivers; the nature and amount of payments to be made by, or withheld from, the
driver coordinator to or by the drivers; minimum hours of work, conditions of work,
and applicable rules.” SMC 6.310.735.F, H.1. Before any jointly submitted proposal
can take effect, it must be affirmatively approved by a city official based upon a
determination that the proposal “promotes the provision of safe, reliable, and
economical for-hire transportation services and otherwise advance[s] the public
policy goals set forth in [the Ordinance].” SMC 6.310.735.H.2.
The Chamber of Commerce sued, asserting, inter alia, that the Sherman Act
preempts the Ordinance. ER 125-154. The District Court (Lasnik, J.) dismissed the
Chamber’s claims. ER 1-28. The Court held the Ordinance exempt from federal
antitrust challenge under the “state-action” immunity doctrine recognized in Parker
v. Brown, 317 U.S. 341 (1943), because Washington law “clearly delegate[s]
authority for regulating the for-hire transportation industry to local government units
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and authorize[s] them to use anticompetitive means in furtherance of the goals of
safety, reliability, and stability[,]” and a city official’s extensive involvement in
certifying driver representatives and approving jointly submitted proposals
constitutes “active supervision” sufficient to ensure that any agreement promotes the
City’s policy goals. ER 8-16.
The panel reversed the antitrust claims’ dismissal, concluding that neither
requirement for Parker immunity was satisfied.
ARGUMENT
I.

The Panel’s Interpretation of the “Active Supervision” Requirement
Conflicts with the Decisions of this Court and Multiple Other Circuits
and Will Hamstring Local and State Governments.
The panel held Parker immunity’s “active supervision” requirement was not

satisfied because “the State of Washington plays no role in supervising or enforcing
the terms of the … Ordinance.” Op. at 34. But the Supreme Court has never held
that state officials must supervise local government programs for Parker immunity
to apply; this Court has previously found municipal supervision sufficient; and all
the Circuits to consider the question (including the First, Eighth, and Second
Circuits) have held that active supervision of local programs by local officials
suffices. Because local governments frequently implement their state-delegated
regulatory authority through private parties with the understanding that local (not
state) officials may properly supervise the private parties’ conduct, the panel’s
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unjustified holding will invalidate many existing local programs and impose
substantial new burdens on state governments.
The active supervision requirement ensures that “the details of the rates or
prices have been established as a product of deliberate state intervention, not simply
by agreement among private parties.” FTC v. Ticor Title Ins. Co., 504 U.S. 621, 63435 (1992). This purpose is served if government officials “have and exercise power
to review particular anticompetitive acts of private parties and disapprove those that
fail to accord with state policy.” N.C. State Bd. of Dental Examiners v. FTC, 135
S.Ct. 1101, 1112 (2015) (quotation omitted). The Ordinance easily meets that
standard: Before any agreement may take effect, a city official must review every
proposed agreement (which is the product of arm’s-length negotiations between two
parties), affirmatively find the agreement furthers the City’s purposes, and issue a
written explanation. SMC 6.310.735.H.2, I.3, I.4.
The panel held municipal supervision inherently inadequate because the
Supreme Court has described active supervision as requiring supervision “by the
State.” Op. at 35. But the Supreme Court has never suggested that its references to
“the State” should be interpreted to exclude local governments. To the contrary, just
as the “state-action” immunity recognized in Parker can apply to local as well as
state governments, the Supreme Court’s references to supervision “by the State”
function as shorthand for the State and its subordinate bodies, including local
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governments. See, e.g., Town of Hallie v. City of Eau Claire, 471 U.S. 34, 40 (1985)
(“municipal” entities may be “entitled to the protection of the state action exemption
from the antitrust laws”) (emphasis added). The panel suggested its holding was
mandated by a 33-year-old footnote stating that “‘[w]here state or municipal
regulation by a private party is involved, … active state supervision must be
shown.’” Op. at 35 (quoting Town of Hallie, 471 U.S. at 46 n.10). But Town of Hallie
considered whether municipal actors must themselves be actively supervised by state
officials (and said no)—not whether private parties acting pursuant to municipal
regulation must be supervised by state rather than municipal officials. 471 U.S. at
46. As with numerous other cases referencing “state” action or “state” supervision,
Town of Hallie nowhere suggests it used “state” as a term of art excluding local
governments to which states have delegated their authority. See Merrick B. Garland,
Antitrust and State Action: Economic Efficiency and the Political Process, 96 Yale
L.J. 486, 495 n.57 (1987) (Hallie’s use of “state” “is best read in its generic sense as
contemplating either state or municipal supervision”).
This Circuit long ago found municipal supervision sufficient to satisfy the
active supervision requirement. Tom Hudson, 746 F.2d 1370 (9th Cir. 1984). Every
other Circuit to have considered the issue has reached the same conclusion. Tri-State
Rubbish, 998 F.2d at 1079 (1st Cir.); Gold Cross Ambulance, 705 F.2d at 1014-15

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(8th Cir.); Elec. Inspectors, 320 F.3d at 127 (2d Cir.).2 As these Circuits have
emphasized, because municipal officials (like state government officials) are
politically accountable, municipal supervision of private party conduct satisfies the
active supervision requirement’s purposes of ensuring that such conduct serves the
government’s regulatory goals and safeguarding against private party abuses. Gold
Cross Ambulance, 705 F.2d at 1014.
These Circuits have recognized it makes no sense to require state government
officials to oversee local programs enacted pursuant to a delegation of state authority
to local governments. Id. at 1014-15. “[I]t would be implausible to rule that a city
may regulate, say, taxi rates but only if a state agency also supervises the private taxi
operators.” Tri-State Rubbish, 998 F.2d at 1079 & n.6 (quotation omitted). This
Circuit made that point in Golden State Transit Corp. v. City of Los Angeles, 726
F.2d 1430 (9th Cir. 1984), explaining that active supervision doctrine should not be
applied in a manner “requir[ing] municipal ordinances to be enforced by the State
rather than the City itself,” because that would “erode local autonomy” while

2

The Sixth Circuit once suggested (without analysis) that municipal supervision
may not suffice, see Riverview Inv., Inc. v. Ottawa Community Imp. Corp., 774 F.2d
162, 163 (6th Cir. 1985) (order), but subsequently clarified that where (as here) a
municipal official has ultimate decision-making authority, the municipal
government is the “effective decision maker” and the active supervision requirement
is therefore inapplicable, effectively adopting the same rule as the First, Second, and
Eighth Circuits. See Mich. Paytel Joint Venture v. City of Detroit, 287 F.3d 527,
536-38 (6th Cir. 2002).
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requiring states to “invest [their] limited resources in supervisory functions that are
best left to municipalities,” id. at 1434 (quotation omitted). The leading, mostfrequently cited antitrust treatise endorses the same common-sense conclusion. P.
Areeda & H. Hovenkamp, 1A Antitrust Law ¶226d at 210-11 (4th ed. 2013); see
City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 373 (1991)
(endorsing Areeda & Hovenkamp’s understanding of Parker immunity); California
ex rel. Harris v. Safeway, Inc., 651 F.3d 1118 (9th Cir. 2011) (en banc) (citing
Areeda & Hovenkamp nine times).
The panel suggested its conclusion was justified because local governments
are not “sovereign entities.” Op. at 36. But the Supreme Court has never questioned
supervision by state administrative agencies, which also are not “sovereign” for
Parker immunity purposes. See Dental Examiners, 135 S.Ct. at 1111. The panel
failed to recognize that, like state agencies, local governments are entitled to Parker
immunity precisely because the State has chosen to delegate its sovereign power to
them. Omni, 499 U.S. at 379 (city ordinance entitled to Parker immunity because it
constituted “action[] of [the] state sovereign[] …. ipso facto exempt from the
operation of the antitrust laws”) (quotation and alteration omitted). Parker
immunity’s “clear articulation” requirement ensures that governmental actions are
taken pursuant to the legislature’s delegation of its sovereign power. The “active
supervision” requirement, by contrast, ensures that any exercise of that power serves
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the government’s ends, not merely those of the private parties, see, e.g., Ticor Title,
504 U.S. at 635 (active supervision ensures regulations not adopted “simply by
agreement among private parties”)—a concern applicable whether delegated
authority is exercised by state administrative agencies or local governments. 3
The panel’s unprecedented holding will have profoundly negative effects
throughout the Ninth Circuit. In industries from garbage collection and ambulance
services to taxicabs and paratransit, state governments frequently delegate to local
governments authority to regulate and restrict competition. These delegations make
sense because localities are better equipped to deal with such inherently local issues.
Local governments exercising that authority often rely upon private parties to
implement their regulatory choices—for example, by designating a particular
company to serve as garbage collector. Under the panel’s reasoning, supervision of
those parties by local government is not sufficient to avoid antitrust liability; if no
state official supervises that conduct, both the local government and the private
parties may be subject to a Sherman Act lawsuit. To avoid such risk, local
governments will be forced to provide such services themselves, depriving the
government and public of the cost and efficiency benefits of using the private sector.

3

The “narrow exception Hallie identified” was not that local governments may
invoke Parker despite their non-sovereign status, as the panel believed, Op. at 36,
but that active supervision is not required where private parties are not involved in
local regulatory efforts, Dental Examiners, 135 S.Ct. at 1112-13.
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Further, local governments will be required to exclude private parties from
any role in developing regulatory policies that could be characterized as restricting
competition. With respect to the industry here, for example, cities throughout the
Ninth Circuit have established standardized taxi fares. Under the panel’s reasoning,
cities that permit private parties (such as drivers, consumers, or regulated entities) to
participate in the process of establishing that fare structure face potential antitrust
lawsuits. Cities could avoid that risk only by adopting regulations unilaterally,
leading to policies less responsive to the needs and concerns of regulated parties and
the public.
The panel’s holding also imposes heavy burdens on state governments. State
legislatures that delegate regulatory authority to local governments so its exercise
can be tailored to local needs and conditions will be required to create and fund statelevel entities to supervise every local program enacted pursuant to that authority.
Because this state entity will be ill-equipped to determine whether private party
conduct serves the local governments’ regulatory goals, such “supervision” will
either be uninformed and pro forma or (should the state and local governments
expend the time and effort required to coordinate their review) no different in
substance from local government supervision.
There is no reason to impose such burdens and limits on state and local
governments. Rehearing should be granted to establish that where states have chosen
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to delegate regulatory authority to local governments, the obligation to supervise
private parties acting pursuant to that delegation, and to ensure that the conduct of
those parties serves the local governments’ purposes, may reside with local officials.
II.

The Panel’s Interpretation of the “Clear Articulation” Requirement
Intrudes Upon State Sovereignty and Is Contrary to Supreme Court
Decisions.
Rehearing is also warranted because the panel’s demand that the Washington

Legislature specify the precise form of regulation cities might choose to enact when
exercising delegated authority to regulate local for-hire transportation services is
contrary to Supreme Court and Ninth Circuit precedent. This holding construes
federal antitrust law in a manner that intrudes substantially upon states’ ability to
exercise sovereign power through subdivisions such as municipal governments or
state government agencies, contravening the decisions of the Supreme Court and this
Court.
For Parker immunity to apply, challenged conduct must be undertaken
“‘pursuant to state policy to displace competition with regulation.’” MercyPeninsula Ambulance, Inc. v. San Mateo County, 791 F.2d 755, 757 (9th Cir. 1986)
(quoting City of Lafayette v. La. Power & Light Co., 435 U.S. 389, 413 (1978)). That
policy must be “clearly articulated and affirmatively expressed.” California Liquor
Dealers v. Midcal Aluminum, 445 U.S. 97, 105 (1980). Here, the Washington
Legislature’s intent to delegate to Seattle the authority to restrict competition in the
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for-hire and taxicab transportation services markets could not be clearer: The
Legislature explicitly stated that cities may regulate those markets “without liability
under federal antitrust laws,” Wash. Rev. Code §§46.72.001, 81.72.200; that
delegation includes the authority to adopt “any” requirement designed “to ensure
safe and reliable for hire vehicle transportation service,” Wash. Rev. Code
§46.72.160(6); and the City Council enacted the Ordinance pursuant to this
delegation, making extensive findings that the Ordinance will promote the safety
and reliability of local transportation services, Ordinance 2d Whereas Cl., §1.
The Supreme Court and this Court have consistently rejected the panel’s
conclusion that state legislatures must enumerate each specific form of regulation
municipal governments might permissibly enact pursuant to delegated regulatory
authority. 4 The Supreme Court has expressly stated that a city need not “be able to
point to a specific, detailed legislative authorization” for its regulation. Lafayette,

4

In cases the panel believed controlling, the legislature had authorized certain
conduct but was silent regarding intent to authorize displacement of competition, or
had authorized anticompetitive conduct in one area but not necessarily in others. See,
e.g. Phoebe Putney, 568 U.S. at 227-28 (general corporate power to acquire property
did not authorize hospital to “act or regulate anticompetitively”); Cantor v. Detroit
Edison Co., 428 U.S. 579, 584-85 (1976) (pervasive regulation of electricity market
did not authorize anticompetitive conduct in “unregulated” light bulb market); Medic
Air Corp. v. Air Ambulance Authority, 843 F.2d 1187, 1189 (9th Cir. 1988)
(defendant granted exclusive right to dispatch air ambulances, but not exclusive right
to operate ambulances). In this case, however, the Washington Legislature explicitly
stated its intent to authorize Seattle to restrict competition in all aspects of the forhire transportation services market.
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435 U.S. at 415. “Narrowly drawn, explicit delegation is not required.” Preferred
Communications, Inc. v. City of Los Angeles, 754 F.2d 1396, 1413 (9th Cir. 1985);
see also Phoebe Putney, 568 U.S. at 229 (state legislatures need not “explicitly
authorize specific anticompetitive effects before state-action immunity [can]
apply”). The “clear articulation” requirement simply requires a showing that “the
State as sovereign clearly intends to displace competition in [the] particular field [at
issue] with a regulatory structure.” Southern Motor Carriers, 471 U.S. at 64. The
City’s regulatory authority may be “defined at so high a level of generality as to
leave open critical questions about how and to what extent the market should be
regulated.” Dental Examiners, 135 S.Ct. at 1112.
The panel concluded that the Ordinance does not satisfy the clear articulation
requirement because the relevant Washington statutes address “the provision of
privately operated for hire transportation services” rather than arrangements
“between for-hire drivers and driver coordinators.” Op. at 24 (quotation omitted).
This parsing of Washington law was wrong on multiple fronts.
Nothing in the statutory text suggests the Washington Legislature sought to
exclude such arrangements, which have a significant and direct effect on for-hire
transportation services, from its authorization of “any” municipal regulation that

15

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furthers the safety and reliability of those services.5 To the contrary, the District
Court held the Ordinance was a valid exercise of the City’s authority under the cited
Washington laws, and the Chamber did not appeal that holding. ER 24-26.
This Court has emphasized that, when applying the clear articulation standard,
federal courts’ role is not to resolve such questions of state law authority. See, e.g.,
Boone v. Redevelopment Agency, 841 F.2d 886, 891 (9th Cir. 1988) (clear
articulation requirement satisfied even if city acted without state law authority);
Traweek, 920 F.2d at 592-93 (city does not lose antitrust exemption by exercising
zoning authority maliciously). Instead, courts must apply a “concept of authority
broader than what is applied to determine … legality … under state law.” Omni, 499
U.S. at 372 (citing analogous standard for judicial immunity). Accordingly, even if
the City Council and District Court were wrong in concluding that the Ordinance
falls squarely within the City’s delegated authority to regulate all aspects of the local
for-hire transportation services industry (which they clearly were not, because the
Chamber did not appeal the District Court’s decision on that issue), that would not
result in the denial of Parker immunity.

5

The Legislature defined transportation to include “any service in connection with
the receiving, carriage, and delivery of persons transported and their baggage and all
facilities used[.]” Wash. Rev. Code §81.04.010(15) (emphasis added).
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The panel also suggested that because Uber and Lyft “did not exist when the
Washington statutes were enacted,” those statutes could not have granted Seattle
authority to respond to the “novel challenges and contexts for regulation” presented
by those companies’ technologies. Op. at 31. But the very purpose of Parker
immunity is to permit state legislatures to delegate power to entities such as local
governments or state agencies that are best situated to respond to “problems
unforeseeable to, or outside the competence of, the legislature.” Southern Motor
Carriers, 471 U.S. at 64 (emphasis added). In any event, this form of providing
transportation services is not so novel—individuals have used phones to hail rides
for over a century—and courts long ago rejected similar efforts to evade regulation.
See, e.g., Rhone v. Try Me Cab Co., 65 F.2d 834, 835 (D.C. Cir. 1933) (rejecting
taxi dispatch company’s argument that it could not be liable for passenger injuries
because it merely “furnish[ed] its members a telephone service”).6

6

As the District Court explained, companies like Uber and Lyft “organiz[e] and
facilitate[e] the provision of private cars for-hire in the Seattle market,” it is
“disingenuous to argue that they are beyond the reach of a statute that deems
‘privately operated for hire transportation services’ vital to the state’s transportation
system and authorizes regulation thereof,” and the companies’ “technology and
contractual relationships, which control a number of the very activities RCW
46.72.160 and RCW 81.72.210 expressly authorize municipalities to regulate, put
[them] squarely within the scope of local regulation under those statutes.” ER 12;
see also O’Connor v. Uber Technologies, Inc., 82 F.Supp.3d 1133, 1141 (N.D. Cal.
2015) (“Uber does not simply sell software; it sells rides. Uber is no more a
‘technology company’ than Yellow Cab is a ‘technology company’ because it uses
CB radios to dispatch taxi cabs …. If … the focus is on the substance of what the
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The panel’s construction of the “clear articulation” requirement decimates the
very federalism and separation-of-powers principles underlying Parker immunity.
Rather than respecting States’ sovereign power to choose when and how to delegate
authority to sub-entities such as municipal governments, it requires state legislatures
to dictate every way a delegated power might possibly be exercised. This rule forces
states to supplant carefully tailored local regulations with uniform statewide
mandates, and prevents states from using local governments as laboratories for the
very forms of regulatory experimentation our federal system is designed to promote.
New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).
There is no basis in Supreme Court or Ninth Circuit precedents for this intrusion
upon state sovereignty.
CONCLUSION
En banc or panel rehearing should be granted.
Respectfully submitted,
Dated: June 25, 2018

/s/ Michael K. Ryan
Michael K. Ryan
Gregory Colin Narver
Sara Kate O’Connor-Kriss
Josh Johnson
SEATTLE CITY ATTORNEY’S OFFICE

firm actually does …, it is clear that Uber is most certainly a transportation
company, albeit a technologically sophisticated one.”) (emphasis added); Doe v.
Uber Techs., Inc., 184 F.Supp.3d 774, 786 (N.D. Cal. 2016) (similar); Cotter v. Lyft,
Inc., 60 F.Supp.3d 1067, 1078 (N.D. Cal. 2015) (similar).
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Stephen P. Berzon
Stacey M. Leyton
P. Casey Pitts
ALTSHULER BERZON LLP
Attorneys for Defendants-Appellees City of
Seattle, Seattle Department of Finance and
Administrative Services, and Fred Podesta

19

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