United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER GRANTING MOTIONS TO
C. YARBROUGH UNITED STA RB MAGISTRATE
central question presented in this case is whether two
transportation network companies were subject to and liable
under the Motor Carrier Act (MCA) for their operations in New
Mexico prior to the enactment of the Transportation Network
Company Services Act (TNCSA). Defendants have moved to
dismiss Plaintiff's complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6), arguing that the answer to this
question should be “no.” See Docs. 10
& 14. The Court agrees that the current complaint is
insufficient under Federal Rule of Civil Procedure 8 to state
a claim under the Motor Carrier Act and the New Mexico Unfair
Practices Act. However, because Plaintiff originally filed
the complaint in New Mexico state court, which has a more
lenient pleading standard, the Court will dismiss the
complaint without prejudice and grant Plaintiff leave to file
an amended complaint by April 8, 2019.
FACTUAL AND PROCEDURAL BACKGROUND
August 24, 2017, Plaintiff filed a single-count complaint in
state court against Defendants for damages arising
“under the New Mexico Motor Carrier Act and Unfair
Practices Act.” Doc. 1-1 (Compl.) at 1. Plaintiff is a
New Mexico corporation with its primary place of business in
Bernalillo County, New Mexico. Compl. ¶ 1. Plaintiff is an
authorized transportation service carrier under the Motor
Carrier Act and holds at least one Certificate issued by the
Public Regulation Commission (PRC) to provide services as a
motor carrier. Id. Defendants Uber Technologies,
Inc. and Hinter-NM, LLC (collectively, Uber) removed the case
to federal court on diversity jurisdiction grounds on October
5, 2017. Doc. 1. Defendant Lyft, Inc. (Lyft) filed a notice
of consent to removal on that same date. Doc. 4.
alleges that Defendants began providing “transportation
services to the public in Bernalillo County, New
Mexico” in or before April 2014. Compl. ¶ 15.
Defendants “provided a tool for requesting
vehicles-for-hire to users who download their free
‘smart phone application' (‘the App').
Users who open the App on their mobile phone are shown a map
of their location or designated pick-up point and the
available vehicles in that vicinity.” Compl. ¶ 12.
Plaintiff alleges that Defendants were “transportation
service carriers” that provided “transportation
services to the public for hire, ” and, in return,
Defendants received renumeration or compensation, either
directly or indirectly from the provision of transportation
services. Compl. ¶¶ 11, 13, 14.
alleges that, although Defendants were “motor
carriers” as defined in the Motor Carrier Act, they
did not obtain Certificates to operate under the Motor
Carrier Act. Compl. ¶¶ 16, 17. Accordingly, on May
23, 2014, the PRC issued an Order to Show Cause and Cease and
Desist Order against Defendants, directing them to cease
operations in New Mexico “unless and until they
obtained a Certificate under the Motor Carrier Act.”
Compl. ¶ 24.
a week later, on May 29, 2014, Uber applied to the PRC for a
Temporary Authority under the Motor Carrier Act to operate a
Specialized Passenger Service. Compl. ¶ 18. At the same
time, Uber filed a petition with the PRC “seeking
waivers from certain operating requirements under the Motor
Carrier Act which apply to taxi services.” Compl.
¶ 19. On June 23, 2014, Lyft filed a motion to intervene
in the Uber proceeding before the PRC. Compl. ¶ 20.
Plaintiff asserts that Defendants' PRC filings
“constitute admissions that [they] are operating a
transportation service in New Mexico subject to the
jurisdiction of the Motor Carrier Act.” Compl. ¶
25, 2014, the PRC denied Uber's application for Temporary
Authority to operate as a Specialized Passenger Service.
Compl. ¶ 22. According to Plaintiff, the PRC issued the
denial based in part on its finding that “the proposed
service does not meet minimum operating standards for
transportation service carriers under New Mexico law.”
Compl. ¶ 22. Despite this denial, Plaintiff alleges,
Defendants “knowingly and intentionally and unlawfully
continued to operate in New Mexico” in violation of the
Cease and Desist Order issued by the PRC. Compl. ¶ 23.
May 18, 2016, New Mexico enacted the TNCSA, which Plaintiff
acknowledges “provided a framework to legalize the
Defendants' actions”. Compl. ¶ 26. On August
15, 2016, the PRC enacted regulations pursuant to the TNCSA
“that allowed Defendants to apply for certificates to
operate legally in New Mexico.” Compl. ¶ 28. Lyft
did not apply for a certificate under the TNCSA and ceased
operations in New Mexico. Compl. ¶¶ 30-31. Uber
applied for and was granted certificates to operate under the
TNCSA. Compl. ¶ 29. Uber has thus continuously operated
in New Mexico since April 2014. Compl. ¶ 32.
alleges that from April 2014 until TNCSA certificates were
granted, “Defendants operated in violation of the Motor
Carrier Act.” Compl. ¶ 33. Plaintiff asserts that
it lost revenue due to Defendants' “unfair and
illegal activities” and that Defendants'
“unfair practices” ultimately led it to cease
operations. Compl. ¶¶ 34-35. Plaintiff claims to
have been damaged as a result of Defendants'
“unauthorized service” because Plaintiff incurred
reductions in revenues as potential passengers opted to use
Defendants' services instead of Plaintiff's. Compl.
¶¶ 39-40. Plaintiff further alleges that Defendants
have not collected gross receipts taxes from passengers in
violation of applicable law and that Defendants willfully
violated the PRC's cease and desist order. Compl.
¶¶ 45. The complaint brings a single cause of
action for “damages under the Motor Carrier Act and
Unfair Practices Act.” Compl. at 5-7.
APPLICABLE LEGAL STANDARDS
New Mexico law governs the substantive analysis of
Plaintiff's claims, the Court applies federal procedural
law in analyzing the legal sufficiency of Plaintiff's
complaint. See Brigance v. Vail Summit Resorts,
Inc., 883 F.3d 1243, 1249 (10th Cir. 2018); see
also Brokers' Choice of Am., Inc. v. NBC Universal,
Inc., 861 F.3d 1081, 1099 (10th Cir. 2017) (applying
federal law to procedural questions in a diversity case and
applying the substantive law of the forum state to analyze
the underlying claims). In this case, Defendants seek
dismissal of Plaintiff's claims pursuant to Federal Rule
of Civil Procedure 12(b)(6). See Doc. 10 at 4, Doc.
14 at 6.
withstand a Rule 12(b)(6) motion to dismiss, a complaint must
contain enough allegations of fact, taken as true, to state a
claim to relief that is plausible on its face.”
Khalik v. United Air Lines, 671 F.3d 1188, 1190
(10th Cir. 2012) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A court considering
a challenge under Rule 12(b)(6) may proceed according to a
“two-pronged approach.” Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009). First, a court
“can choose to begin by identifying pleadings that,
because they are no more than conclusions, are not entitled
to the assumption of truth.” Id. “While
legal conclusions can provide the framework of a complaint,
they must be supported by factual allegations.”
Id. Second, “[w]hen there are well-pleaded
factual allegations, a court should assume their veracity and
then determine whether they plausibly give rise to an
entitlement to relief.” Id. For purposes of
this second prong, the Court “accept[s] the well-pled
factual allegations in the complaint as true, resolve[s] all
reasonable inferences in the plaintiff's favor, and
ask[s] whether it is plausible that the plaintiff is entitled
to relief.” Diversey v. Schmidly, 738 F.3d
1196, 1199 (10th Cir. 2013) (internal citations and quotation
marks omitted). “A claim is facially plausible when the
allegations give rise to a reasonable inference that the
defendant is liable.” Mayfield v. Bethards,
826 F.3d 1252, 1255 (10th Cir. 2016).
the sufficiency of a complaint must rest on its contents
alone.” Gee v. Pacheco, 627 F.3d 1178, 1186
(10th Cir. 2010).
There are exceptions to this restriction on what the court
can consider, but they are quite limited: (1) documents that
the complaint incorporates by reference; (2) documents
referred to in the complaint if the documents are central to
the plaintiff's claim and the parties do not dispute the
documents' authenticity; and (3) matters of which a court
may take judicial notice.
Id. (citations and internal quotation marks
omitted). “If a district court intends to rely on other
evidence, it must convert the Rule 12(b)(6) motion to a
motion for summary judgment, giving proper notice to the
parties.” Id. (citing Fed.R.Civ.P. 12(d));
see also Brokers' Choice of Am., 861 F.3d at
1103 (“When a party presents matters outside of the
pleadings for consideration, as a general rule the court must
either exclude the material or treat the motion as one for
summary judgment.”) (internal quotation marks and
citations omitted). Under Federal Rule of Civil Procedure 12,
If, on a motion under Rule 12(b)(6) or 12(c), matters outside
the pleadings are presented to and not excluded by the court,
the motion must be treated as one for summary judgment under
Rule 56. All parties must be given a reasonable opportunity
to present all the material that is pertinent to the motion.
Fed. R. Civ. P. 12(d). A court has broad discretion under
Rule 12(d) to refuse to accept the extra-pleading materials
and resolve the motion solely on the basis of the pleading
itself. See Lowe v. Town of Fairland,
Okla., 143 F.3d 1378, 1381 (10th Cir. 1998). Reversible
error may occur if a court considers matters outside the
pleadings but fails to convert the motion to dismiss into a
motion for summary judgment. Id.
the parties have presented numerous documents for the
Court's consideration in ruling on Defendants'
respective 12(b)(6) motions to dismiss. Specifically,
Defendant Lyft has attached several exhibits in support of
its motion and reply brief. See Docs. 14-1 to 14-15.
Similarly, while Defendant Uber did not initially attach
documents to its initial motion, it did file two exhibits in
support of its reply brief. See Docs. 30-1 and 30-2.
And although no documents were attached as exhibits to
Plaintiff's complaint, Plaintiff has also included a
number of exhibits with its response brief. See Doc.
Court will not convert Defendants' motions to dismiss
into motions for summary judgment. To do otherwise would
require the Court to give notice to the parties and allow
each party an opportunity to present any additional
extra-pleading evidence - an inefficient process that would
be better left for a motion for summary judgment filed in the
normal course of the discovery process. The Court will
therefore consider only those exhibits that fit within the
limited exceptions set forth in Gee - i.e.,
exhibits that are properly the subject of judicial notice or
that are referred to in ...