Municipal – Rental car agencies – Nantucket

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Where a plaintiff has challenged a municipal ordinance restricting the licensing of rental car agencies on Nantucket Island, the complaint should be dismissed because it does not plausibly allege that the ordinance imposes an unconstitutional burden on interstate commerce and does not plausibly allege concerted action under the Sherman Act.

“This case arises from a 1988 municipal ordinance restricting the licensing of rental car agencies on Nantucket Island. Becky’s Broncos, LLC (‘Plaintiff’ or ‘Becky’s’) brings this suit alleging violations of the dormant Commerce Clause, Section 1 of the Sherman Act, and Massachusetts Antitrust Act against the Town of Nantucket and Nantucket Town Select Board (together, the ‘Town’ or ‘Defendants’). …

“… In 1988, the Town adopted a licensing-and-fee ordinance for car rental agencies, codified as Nantucket Bylaw Chapter 58 (‘Chapter 58’). …

“Here, Defendants move to dismiss Becky’s Amended Complaint, arguing that both the dormant Commerce Clause claim and the federal and state antitrust claims fail under Rule 12(b)(6). …

“First, Becky’s contends that Chapter 58 is per se invalid because it has both a discriminatory purpose and effect. … To prevail on this theory, Becky’s must show that the law systematically benefits in-state over out-of-state actors. … Becky’s fails to make such a showing. …

“Having found no discriminatory purpose or intent, the Court also declines to apply Pike [v. Bruce Church, Inc., 397 U.S. 137 (1970)] balancing to weigh Chapter 58’s burdens and benefits. …

“Here, Becky’s asserts that Chapter 58’s Medallion cap leads to higher rental prices, hoarding by incumbent agencies, limited market choice, and delays for prospective renters. … According to Becky’s, if no rental cars are available on a given date, visitors’ only practical alternative is to pay approximately $640 to ferry a vehicle to the island. … Even accepting these allegations as true, however, Becky’s has not plausibly demonstrated that such burdens are ‘clearly excessive’ in relation to the ordinance’s local benefits. While scarcity and higher rental costs may result from the combined effect of the regulatory cap and Hertz’s alleged hoarding of Medallions, these effects appear marginal as alleged. First, the ordinance does not eliminate a mode of transportation altogether; it merely shifts reliance from certain suppliers to others. Visitors can still ferry a car to the island, rent from an incumbent agency or Turo, or rely on public transit or other modes of transportation. … Moreover, Becky’s alleges that only 650 of 500,000 annual visitors — approximately 0.1 percent — ferry a rental car to the island and thus might be impacted by the ordinance. …

“On the other hand, Chapter 58 advances several legitimate local interests, including managing traffic and congestion, parking, and the preservation of public and recreational space on a small island. … These objectives lie at the heartland of local government authority and courts routinely recognize them as valid local concerns. …

“Balancing these factors, even drawing all reasonable inferences in Becky’s favor, the Amended Complaint does not plausibly allege that Chapter 58 imposes an unconstitutional burden on interstate commerce. …

“Becky’s second and third claims allege violations of federal and state antitrust law, contending that Chapter 58 ‘creates a Town-sanctioned oligopoly.’ …

“Even without state-action immunity, Becky’s has not adequately pleaded a claim under Section 1 of the Sherman Act. …

“Here, Becky’s highlights several facts, but none plausibly support an inference of concerted action, tacit or explicit, between the Town and incumbent rental agencies in enacting or maintaining Chapter 58. …

“In sum, none of Becky’s allegations plausibly suggest an agreement between the Town and incumbent agencies. There is no allegation of when or how such an agreement formed, the circumstances surrounding it, or the Town’s motive to collude. … Because Becky’s fails to plausibly allege concerted action, the Court need not address whether any purported conduct constitutes an unreasonable restraint on trade. Accordingly, Becky’s fails to state a claim under Section 1 of the Sherman Act, and its Massachusetts Antitrust Act claim likewise fails.”

Becky’s Broncos, LLC (v. Town of Nantucket, et al. (Lawyers Weekly No. 02-180-26) (19 pages) (Kelley, J.) (Civil Action No. 1:24-CV-11308-AK) (March 27, 2026).

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