Becky’s Broncos v. Town of Nantucket: Endorsing Medallion Caps Under Dormant Commerce Clause, Antitrust and Due Process Review

Introduction

Becky’s Broncos, LLC—operated by James Broad and Rebecca McCrensky—launched an unlicensed car‐rental venture on Nantucket in 2023. Nantucket’s local ordinance, in force since 1997, limits the total number of rental‐car “medallions” to approved incumbents and imposes an annual fee. Becky’s began renting vehicles without license or medallions and was ordered to shut down. The company sought a preliminary injunction in the District of Massachusetts; the court denied relief. On appeal, Becky’s challenged the ordinance under the dormant Commerce Clause, federal and state antitrust laws, and both procedural and substantive due process. The First Circuit, speaking through Judge Kayatta, affirmed the denial, holding that Becky’s had not demonstrated a likelihood of success on the merits.

Summary of the Judgment

The panel applied the familiar four-factor test for preliminary injunctions: (1) likelihood of success on the merits; (2) irreparable harm; (3) balance of equities; (4) public interest. Since “likelihood of success” is the dominant factor, the court rested its decision there. The First Circuit concluded:

• No dormant Commerce Clause violation: The medallion cap does not discriminate against out-of-state interests in effect or intent.
• No viable antitrust claim: Becky’s offered no coherent Sherman Act theory, and state‐action immunity would shield the ordinance in any event.
• No procedural due process violation: The ordinance grants licenses only to 1996 applicants and reserves medallion reallocation to the town’s discretion—Becky’s has no “property interest” under these terms.
• No substantive due process violation: The ordinance bears a rational basis in traffic safety, congestion management, open-space protection, and community aesthetics.

Accordingly, Becky’s failed to show a likelihood of success, and its request for preliminary relief was properly denied.

Analysis

1. Dormant Commerce Clause

The dormant Commerce Clause prohibits state or local laws that discriminate against or unduly burden interstate commerce. Courts examine both discriminatory intent and discriminatory effect, with effect bearing primary weight.

Key precedents cited:

• New Energy Co. v. Limbach, 486 U.S. 269 (1988): Defines “economic protectionism” as benefiting in‐state interests at the expense of out‐of‐state competitors.
• American Trucking Ass’ns v. R.I. Tpk. & Bridge Auth., 123 F.4th 27 (1st Cir. 2024): Confirms focus on discriminatory effect in facially neutral laws.
• Dep’t of Revenue of Ky. v. Davis, 553 U.S. 328 (2008): Demonstrates that a law chills interstate activity when it creates a commercial advantage for local private actors.

The panel found no clear error in the district court’s factual determination of “no compelling evidence” that the ordinance disadvantages out-of-state entities. Hertz, an out‐of‐state company, holds nearly half of the 700 medallions; no non-resident challenger besides Becky’s sought additional medallions. The island’s allowance of peer-to-peer Turo rentals—unlicensed but not tied to medallion caps—further undermined any inference of protectionism directed against out-of-state firms.

2. Federal and State Antitrust Claims

Becky’s invoked §§ 1 and 2 of the Sherman Act and parallel Massachusetts law, alleging an “unreasonable restraint of trade.” The district court relied on the Parker v. Brown (317 U.S. 341 (1943)) doctrine of state-action immunity: municipalities acting under a clearly articulated and affirmatively expressed state policy are exempt from antitrust scrutiny.

On appeal, the First Circuit noted that Becky’s never identified a coherent Sherman Act theory. Section 1 liability requires concerted action, and Section 2 demands proof of monopoly or intent to monopolize—none of which Becky’s developed. The panel thus affirmed on the alternate ground that Becky’s had failed to show a likelihood of success on its antitrust claims.

3. Procedural Due Process

Becky’s argued that the ordinance creates a right to a license upon payment of fees, thus establishing a protectable “property interest.” The panel disagreed: the licensing scheme conditions approval on 1988 applicants only, while the medallion regime applies exclusively to those with 1996 stickers. Nantucket retains discretion to reissue or retire unapportioned medallions, and no statutory or regulatory promise entitles new entrants to medallions. Without a medallion, a license alone is legally worthless for rental operations; Becky’s has no procedural‐due‐process claim.

4. Substantive Due Process

Because Becky’s did not invoke a fundamental right, the ordinance is subject to rational‐basis review: it will stand if “any reasonably conceivable state of facts” justify the regulation. Beach Commc’ns, Inc. v. FCC, 508 U.S. 307 (1993).

Nantucket offered evidence that unbridled growth in rental‐car fleets would exacerbate traffic congestion, parking shortages, safety risks, and threaten open spaces and community character. The medallion cap directly limits rental vehicles, rationally advancing those objectives. Even the selective enforcement against peer-to-peer platforms like Turo had a conceivable rational justification in enforcement capacity and legal uncertainty. The ordinance easily survives rational‐basis review.

Complex Concepts Simplified

• Dormant Commerce Clause: Implied restriction on state/local laws that discriminate against out-of-state commerce or unduly burden interstate trade.
• State‐Action Immunity (Parker): A state‐sanctioned regulatory scheme adopted under clear legislative authority is exempt from federal antitrust laws.
• Property Interest in Licensing: Only those benefits to which a person has a legitimate claim of entitlement (not mere hope or expectation) qualify for due‐process protection.
• Rational‐Basis Review: The lowest level of judicial scrutiny; a law survives if it is rationally related to any conceivable legitimate government purpose.

Impact and Significance

Becky’s Broncos solidifies several principles:

1. Local governments may employ medallion systems to control the size of vehicle fleets without violating the Commerce Clause, so long as the system is neutral toward in- and out-of-state interests.
2. Municipal licensing and caps, when clearly grounded in a state‐authorized scheme, gain the protection of state‐action immunity against antitrust challenges.
3. Entrepreneurs cannot claim a legitimate property interest in licenses or medallions absent a statutory or regulatory promise; discretionary schemes afford no due‐process entitlement to new applicants.
4. Traffic management and community aesthetics are valid rational bases for regulating vehicle fleets, even in the face of technological alternatives such as peer-to-peer rental platforms.

Future litigants challenging similar caps or licensing regimes will find in Becky’s Broncos strong support for municipal authority to manage local markets and congestion.

Conclusion

The First Circuit’s decision in Becky’s Broncos, LLC v. Town of Nantucket confirms that a carefully tailored medallion‐based licensing cap can co-exist with constitutional and federal‐statutory constraints. It reaffirms that:

• Neutral, incumbent‐protective regulations are not per se discriminatory under the dormant Commerce Clause;
• State‐authorized municipal schemes enjoy antitrust immunity under Parker;
• Discretionary licensing systems confer no procedural‐due‐process property rights to new entrants;
• And rational‐basis review readily upholds local measures aimed at traffic, safety, and environmental objectives.

In the broader legal landscape, Becky’s Broncos stands as a leading authority on the limits of commercial‐regulation challenges and underscores the deference afforded to local efforts at congestion and community‐character management.