FTC Files Amicus Brief in Appeals Court Case Involving for-Hire Drivers in Seattle

Proper scope of state action doctrine implicated by Chamber of Commerce v.City of Seattle

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The Federal Trade Commission has filed an amicus brief jointly with the Department of Justice in the case of Chamber of Commerce v. City of Seattle, which is pending before the U.S. Court of Appeals for the Ninth Circuit.

The case concerns an ordinance enacted by the city of Seattle that permits independent for-hire drivers to collectively negotiate their contracts with taxicab associations, and transportation network companies such as Uber and Lyft. The Chamber of Commerce sued the city in federal district court, alleging that the ordinance violates the Sherman Act by authorizing price fixing. The district court dismissed the Sherman Act claim on the basis of the state action doctrine, and the Chamber of Commerce appealed.

The amicus brief urges the court to reject the state action doctrine in this case, because the general Washington State statutes delegating authority to municipalities to regulate for-hire transportation services do not clearly express a legislative intention to displace competition in the markets at issue in the case. “Competition is the lynchpin of the U.S. economy. Although states can displace competition with regulation, they must clearly articulate their intent to do so,” explained Acting Chairman Maureen K. Ohlhausen. “Because Seattle’s action exceeded its authority from the state, the state action defense should be rejected” she said.   

The FTC vote approving the amicus brief filing was 2-0. It was filed before the U.S. Court of Appeals for the Ninth Circuit on Nov. 3, 2017. (FTC File No P082105; the staff contact is Michelle Arington, Office of the General Counsel, 202-326-3157.)

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