Yellow Cab Co. of Reno may have to file for bankruptcy if it’s ordered to pay excessive attorney fees after a federal judge found it violated the Americans with Disabilities Act by denying service to a disabled woman with a motorized scooter, the company’s lawyer told The Associated Press.
The disabled woman’s lawyer says Yellow Cab’s owner may be making the claim fraudulently to try to save money while shielding his assets in a series of other taxi companies he operates, including Reno Sparks Cab Co.
Melodie Doud and her husband, ex-Yellow Cab driver James Doud, claimed a significant victory when U.S. Magistrate William Cobb ruled March 3 there’s no dispute a cabbie refused to transport them with a collapsible scooter from Reno-Tahoe International Airport in 2013.
“Yellow Cab employed a discriminatory policy or practice that denied the Douds full and equal enjoyment of Yellow Cab’s service” by requiring those with scooters to ride in special wheelchair-accessible vans even though their disassembled scooter fits in a standard taxi trunk, Cobb wrote.
Still to be determined is whether James Doud – who drove for Yellow Cab for 14 years – was fired illegally in retaliation for complaining about the incidents. Yellow Cab, which registered as a Nevada corporation in 1959, is appealing that part of the legal battle to the Ninth Circuit Court of Appeals based on claims its drivers are independent contractors, not company workers.
No damages have been awarded.
Both lawyers met with the Cobb in a closed hearing Thursday after Doud’s lawyer accused Yellow Cab of acting in bad faith.
The company offered $75,000 for legal fees at a settlement conference March 7, but three days later cut that offer to $50,000, “maintaining it will file bankruptcy,” Reno lawyer Terri Keyser-Cooper wrote in an emergency filing Wednesday. Keyser-Cooper added: “This may be a fraud upon the court.”
Yellow Cab lawyer Michelle Bumgarner said the threat of bankruptcy is real in the face of “exorbitant legal fees.”
“Unless this matter settles for substantially less than what counsel is seeking, Yellow Cab does not want to, but is being forced to consider filing bankruptcy for reorganization to lower and/or pay such legal fees,” she said Friday in an email to AP.
Keyser-Cooper, who filed the lawsuit in December 2013 and argues Yellow Cab owes $130,213, said it would’ve been cheaper if Yellow Cab hadn’t “mounted a Stalingrad, take-no-prisoners defense.”
“This is the case of a company who fought on and on and continues to fight and then resists paying the legal fees that will soon be ordered,” she said Friday.
Yellow Cab owner Roy Street also owns Executive Limousine and Capitol Cab, with extensive holdings at Lake Tahoe, Carson City, Fallon and Fernley, Keyser-Cooper wrote Wednesday. He’s “a very wealthy man … seeking in bad faith to hide behind the corporate veil while running all of his taxi companies and taking in profits.”
If Yellow Cab continues to balk, she said she intends to name Street an individual defendant and seek financial records to pierce the veil.
Although the taxis operate with different names and logos, Street has “commingled all their operations to the extent they operate as one” out of the same facility, Keyser-Cooper said.
Cobb ruled a partial payment was warranted now, given the Douds have prevailed on at least one claim. U.S. District Judge Miranda Du agreed when she issued a temporary injunction in August prohibiting Yellow Cab from refusing to transport Doud “on the basis of her disability.”
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