About the speaker: Kevin V. DeSantis

101 West Broadway, Suite 1700, San Diego, California 92101(619) 233-4777 www.butzdunn.com

Case studyAn analysis of claims asserted by independent contractor drivers

against a city and cab companies arising out of an airport

transportation agreement Airport Ground Transportation Association conferenceOctober 9, 2012

Kevin V. DeSantis, [email protected]

(619) 233-4777www.butzdunn.com

Kevin V. DeSantis


About the speaker: Kevin V. DeSantis 24 years experience practicing law Regularly counsels ground transportation providers

throughout the United States on structuring relationships and drafting agreements with independent contractors

Regularly represents ground transportation providers in various jurisdictions in a wide range of litigation matters: Class action misclassification claims Individual classification and breach of contract claims Trademark and trade secret enforcement Unfair competition


Abdirzirak vs. City of PhoenixCase study A group of independent taxi drivers filed a

lawsuit against the City of Phoenix, arising out of the operation of Sky Harbor International Airport, and three cab companies

Drivers claim they are intended beneficiaries of Taxicab Service Agreements between the City and cab companies


Abdirzirak vs. City of PhoenixSummary of litigation and claims 20 drivers sued the City of Phoenix and the three

cab companies for breach of contract, bad faith, negligent misrepresentation, fraud, intentional misrepresentation and conspiracy to commit fraud

Drivers’ primary contention is that they are third party beneficiaries of the Taxicab Service Agreements

Drivers assert that the Agreements provide: all car washes to be paid by cab companies cannot charge credit card processing fees return trips must be provided

Drivers seek millions in damages.


Abdirzirak vs. City of Phoenix

What gave rise to the lawsuit? A number of factors contributed to drivers

being able to file and maintain a lawsuit against the City and cab companies

Those factors include…



Factor 1: Agreement between City and cab companies

Maximum Daily Lease Rate (Credit Cards and Car Washes): "[Cab company] hereby warrants and guarantees that . . . the maximum daily taxicab lease rate charged to a driver shall not exceed [$_____]. For purposes of this agreement, 'maximum taxicab lease rate' shall mean a single maximum lease charge, which includes the vehicle's insurance, maintenance, cleaning costs, and security costs or deposit(s). No other costs are considered or authorized as part of this change except the cost of fuel used during the period the taxicab is leased.“

Car Washes: "The exterior of each vehicle . . . shall be washed at least once each day . . . " Note: definition of "maximum taxicab lease rate" was amended in 2007 to include ". . . cleaning costs and/or resources for vehicles to be washed by the drivers on a weekly basis . . .“

Return Trips: "Operator allows return trips/fares to Airport as to enhance a livable wage for drivers."



Factor 1 (cont’d): Issues with agreement

Definition of maximum daily lease rate Credit card charges Return trips Car washes



Factor 2: Livable wage study

Summary Purpose Content Implications



Factor 3: Agreements between drivers and cab

companies No dispute over independent contractor status

Drivers admit IC status

Driver testimony on earnings Key terms of agreement

Credit card processing fees Car washes Return trips



Factor 4 RFP from, and proposal to, City

Clarity Caution


Abdirzirak vs. City of PhoenixThings we learned: Recommendations to reduce risk of similar

lawsuits City perspective Transportation provider perspective Joint perspective


General tips for transportation providers Well crafted lease agreements

Class action waiver Arbitration provision Limitation of liability Releases IC acknowledgements Video tapes

Knowledgeable management and staff Careful review of third party contracts

About the speaker: Kevin V. DeSantis

Documents

Transcript of About the speaker: Kevin V. DeSantis