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March 19, 1990

YVONNE FLOYD-MAYERS, et al., Plaintiffs,
AMERICAN CAB CO., et al., Defendants

The opinion of the court was delivered by: RICHEY


 Plaintiffs are suing American Cab Company ("American"), alleging that drivers in taxicabs bearing American's colors and markings refused to provide service to plaintiffs on account of their race in violation of, inter alia, 42 U.S.C. § 1981. American has filed a motion for summary judgment. The Court will deny the summary judgment motion because: (1) one of American's arguments to negate vicarious liability is estopped as a matter of law while the other involves disputed issues of material fact; and (2) administrative exhaustion is not a prerequisite to this § 1981 claim.

 I. Factual Background

 This action arose out of a number of incidents allegedly involving taxicabs bearing American's colors and markings. *fn1" Plaintiffs claim that in one incident an American taxicab passed by a black prospective passenger to pick up a white passenger instead. In three other incidents American taxicabs allegedly refused to pick up black prospective passengers because their destinations were predominantly black neighborhoods in Washington, D.C. In each of these incidents plaintiffs allege that they were refused taxicab service due to their race by drivers in American taxicabs who operated, and at times leased, the vehicles with American's authorization.

 Moving for summary judgment, American claims that it was merely a "lessor" of the vehicles and of its distinctive colors and markings. American asserts that because it neither employs the taxicab drivers nor exercises control over their work activities, it cannot be held vicariously liable for the drivers' actions. However, American does insure the taxicabs it leases and accepts complaints from governmental agencies concerning its taxicab drivers' work activities.

 II. Analysis

 Fed.R.Civ.P. 56(c) requires that the Court grant a motion for summary judgment if the pleadings and supporting affidavits and other submissions "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." It is well-established that the Court must believe the non-movant's evidence and draw all justifiable inferences in its favor. Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). However, "the mere existence of a scintilla of evidence in support of the [non-movant's] position will be insufficient [to avoid summary judgment]; there must be evidence on which the jury could reasonably find for the [non-movant]." Id. at 252.

 A. American's Vicarious Liability

 The issue of whether American may be held vicariously liable under § 1981 in this case implicates the doctrine of respondeat superior. General Bldg. Contractors Ass'n v. Pennsylvania, 458 U.S. 375, 392-95, 102 S. Ct. 3141, 73 L. Ed. 2d 835 (1982); id. at 403-404 (O'Connor, J., concurring). The theory of respondeat superior allows a plaintiff to hold a master/employer liable for the wrongful acts of his or her servant/employee. See generally W. Prosser & W. Keeton, The Law of Torts §§ 69-70, at 499-501 (5th Ed. 1984). Thus, the master-servant or employer-employee relationship is a form of agency in which the employer hires the employee to act on his or her behalf, subject to the employer's control and consent to act. General Bldg. Contractors Ass'n, 458 U.S. at 392. For an employer to be held vicariously liable for the intentional tort of an employee, the tort must occur within the scope of employment and be actuated, at least in part, by a purpose to further the employer's business and not be unexpected in view of the employee's duties. Weinberg v. Johnson, 518 A.2d 985, 990 (D.C. 1986).

 In light of the foregoing, whether American should be held liable under respondeat superior for the taxicab drivers' alleged intentional racial discrimination depends on the answers to two questions. First, is American, by virtue of its relationship with its drivers, estopped to deny liability for their alleged tortious acts? Second, if American is estopped to deny liability based on the absence of an employer-employee type of relationship, can it nevertheless defeat vicarious liability by arguing that the taxicab drivers' actions were beyond the scope of their "employment"?

 Under District of Columbia law governing taxicab companies, the absence of a traditional "employer-employee relationship" does not allow American to avoid vicarious liability for its drivers' actions. American is correct that in most instances proof that an employer-employee relationship existed is a prerequisite to invoking the doctrine of respondeat superior. However, in Rhone v. Try Me Cab Co., 65 F.2d 834 (D.C.Cir. 1933), the United States Court of Appeals for this Circuit created an exception to this rule. Under Rhone and its progeny, the law in the District of Columbia is that a taxicab company is estopped as a matter of law to deny vicarious liability when one of its drivers injures a passenger and the taxicab, regardless of who owns it, bears the company's colors and markings. Id. at 835-36; Tarman v. Southard, 205 F.2d 705, 706 (D.C.Cir. 1953). Thus, proof of a traditional employer-employee relationship is unnecessary, because the "relationship" prong of the respondeat superior doctrine is satisfied as a matter of law in this case (at least for the purposes of this summary judgment motion) by the application of Rhone's estoppel rule.

 Instead of denying that Rhone applies to this case, American contends that it merely creates a rebuttable presumption that vehicles bearing a taxicab company's colors and markings are in fact owned or controlled by that company. As support for this proposition American cites the post-Rhone case of Harlem Taxicab Ass'n v. Nemesh, 191 F.2d 459, 461-62 (D.C.Cir. 1951). However, the Nemesh court applied a rebuttable presumption of actual ownership instead of Rhone's estoppel rule because the plaintiff in Nemesh was not a passenger in the taxicab. Id. at 462 (Proctor, J., concurring). By contrast, when the plaintiff is a taxicab passenger, a contractual relationship exists and the Rhone estoppel rule controls. See Tarman v. Southard, 205 F.2d 705, 706 (D.C. Cir. 1953) (taxicab company estopped to deny liability to passenger assaulted by driver regardless of who actually owned taxicab). Cases not applying Rhone's estoppel rule are distinguishable as involving non-passengers, see Montague v. Goolsby, 237 F.2d 776, 777 (D.C.Cir. 1956) (applying Nemesh court's rebuttable presumption analysis in suit brought against taxicab company by non-passenger); Jeter v. Shash, No. 85-3538, slip op. at 2 (D.D.C. June 11, 1986) (taxicab company not estopped to deny liability to non-passenger where company lacked ownership or control over taxicab), or unauthorized drivers, see Simon v. City Cab Co., 78 F.2d 506, 507-09 (D.C. Cir.) (taxicab company held not liable as a matter of law for injuries to non-passenger where driver was stranger to company), cert. denied, 296 U.S. 640, 56 S. Ct. 173, 80 L. Ed. 455 (1935). *fn2"

 Accordingly, on the facts of this case, the Court must apply Rhone's estoppel rule against American if the plaintiffs -- who were prospective passengers -- were "passengers" under District of Columbia law. In Gebremariam v. District of Columbia Hackers' License Appeal Board, 533 A.2d 909 (D.C. 1987) the court upheld the suspension of a taxicab driver's license because he refused "to transport a passenger," namely an individual waiting for taxicab service at National Airport. Id. at 910 (emphasis added); cf. Polanski v. Trans World Airlines, 523 F.2d 332, 335 (3d Cir. 1975) (holding that airlines are "required to treat all potential passengers and users equally"). The District of Columbia's Municipal Regulations also address this ...

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