A recent ruling from the United States Court of Appeals for the Seventh Circuit has upheld the dismissal of a lawsuit filed by Tire Town Auto LLC against Wood County, Wisconsin. The court decided that Tire Town did not have a protected property interest in being on the county's towing rotation list. This decision affects Tire Town and potentially other towing businesses in similar situations.

The case, Tire Town Auto LLC v. Wood County, was filed under docket number 25-1883. Tire Town, which operates towing services in Wood County, claimed that its removal from the towing rotation list violated its procedural due process rights. The court's ruling clarifies the standards for what constitutes a property interest in such cases, impacting how towing companies may operate in the future.

Background

Tire Town Auto LLC is a towing service based in Marshfield, Wisconsin, which is located in Wood County. For several years, Tire Town was included on a list of towing businesses that Wood County used to dispatch services for removing disabled vehicles from public roads. Being on this list is financially beneficial for towing companies, as they can charge vehicle owners for towing services.

Wood County operates a dispatch center that coordinates emergency services, including towing. The county has a Minimum Standards policy that outlines the requirements for businesses to be included on the towing rotation list. This policy states that it is not a contract between the county and the towing businesses. In September 2021, Wood County received complaints about Tire Town's employees not wearing reflective vests and later removed the company from the towing list, citing overcharging vehicle owners.

After being removed from the list, Tire Town filed a lawsuit in 2024 under 42 U.S.C. § 1983, alleging that Wood County violated its due process rights under the Fourteenth Amendment. The district court dismissed Tire Town's case, stating that the company did not adequately demonstrate that it had a protected property interest in being on the towing rotation list.

The Ruling

The Seventh Circuit Court reviewed the case and agreed with the district court's dismissal of Tire Town's complaint. The court stated, "Tire Town has not plausibly alleged or identified an 'independent source,' written or otherwise, that would support a property interest." The judges on the panel included Circuit Judges Hamilton, St. Eve, and Pryor.

The court emphasized that for a plaintiff to claim a property interest, they must demonstrate a legitimate claim of entitlement, which Tire Town failed to do. The Minimum Standards policy, which Tire Town cited as a basis for its claim, expressly disavowed any contractual relationship between the county and the towing businesses. The court noted that the county had broad discretion to remove businesses from the towing rotation list, stating, "the Dispatch Center may withdraw the offer to any and all participants and/or applicants at any time for any appropriate reason." This lack of a guaranteed property interest led to the court's affirmation of the district court's judgment.

Impact

The ruling has significant implications for Tire Town and other towing companies in Wood County and potentially beyond. It clarifies that being included on a government-operated towing rotation list does not automatically confer a protected property interest. This decision may deter other towing companies from pursuing similar legal claims if they are removed from such lists.

Additionally, the ruling sets a precedent regarding the interpretation of property interests in the context of government contracts and services. It highlights the importance of clear contractual agreements and the limitations of policies that do not establish a binding relationship between government entities and private businesses.

What's Next

Details were not available in the court filing regarding whether Tire Town plans to appeal the decision. There is no indication of related cases pending that could impact this ruling.