DOWNTOWN — A Los Angeles County judge has issued an injunction against City Hall’s recently adopted taxi cab franchise system in response to a lawsuit alleging civil rights violations filed by five Armenian-American-owned cab companies that failed to win franchises.
A hearing in Downtown Los Angeles is set for Jan. 7 to determine whether the injunction will stay in effect as the litigation proceeds. City Hall had planned to begin enforcing the new franchise system in January.
In a complaint filed on Tuesday, the cab companies, represented by the Los Angeles firm Geragos & Geragos, accused Santa Monica officials of intentionally discriminating against Armenian-Americans and acting “arbitrarily, capriciously and erroneously” during the creation of the new system for regulating taxi cab operators.
The taxi cab overhaul, given final approval by the City Council this month, was set to replace the open entry system with a franchise-based system where five selected companies would be given the right to operate between 58 and 63 cabs each within Santa Monica’s city limits.
Previously, at least 44 cab companies had been in business in the city, with no limit on the number of cabs each one could operate. City officials were concerned about the effect the open system had on traffic and the environment, as well as taxi drivers’ wages. City officials said too much competition created a system in which drivers were not able to earn a living wage.
Five Armenian-American-owned companies were among the 13 franchise applicants, but none were selected.
“Under the guise of [the taxi cab overhaul] the defendant has cast out all Armenian-American taxicab owners and operators from the city,” the complaint stated.
At City Hall, officials defended the process they followed in recommending which companies should receive the franchises.
Don Patterson, the official who oversaw the work of the selection committee, said each application was evaluated on its merits.
Mayor Richard Bloom on Wednesday said he was “supremely confident that there’s been no discrimination in our process.”
“On the merits of the case, I believe the city is going to prevail,” he said.
Tamar Arminak, an attorney with Geragos & Geragos, said City Hall had skewed its evaluation process to ensure that no companies owned by Armenian-Americans were selected, a violation of the U.S. Constitution’s 14th Amendment, which guarantees equal protection and due process under the law.
“Nothing they did was above board,” Arminak said of the City Hall selection committee, which included city staff and a representative from the city of L.A. “They did everything behind closed doors and they only released the full criteria of evaluation after they had reviewed the applications and after they had announced their recommendations of the five companies that were going to get licenses.”
Even based on the announced criteria, which included things like financial viability, operators’ character and quality and efficiency of fleet, the Armenian-American-owned companies should have scored as well or better than the companies that were picked, Arminak said.
“The Armenian companies are more qualified, if not identical, to the current franchisees selected by the city,” she said.
About 300 Armenian-American people would lose their jobs under the city’s taxi cab overhaul, according to the complaint.
Kate Vernez, assistant to the city manager, said lawyers would file papers stating City Hall’s position on the injunction by Jan. 3.
“The city did not discriminate in any way and so we’re very comfortable with our legal position in this regard,” she said.