Town Sued In Federal Court Over Rental Car Medallions
Jason Graziadei •
The town and Select Board have been sued in federal court by an island couple over Nantucket's rental car medallion system that was called discriminatory and protectionist in the lawsuit filed Thursday in the U.S. District Court of Massachusetts.
"This case is about an anticompetitive, protectionist, and discriminatory Nantucket bylaw amended nearly 30 years ago to protect five local White-male-owned businesses from outside competition -and still does - to the exclusion of James Broad, a first-generation Black American, and his wife, Rebecca McCrensky, and their business, Becky’s Broncos, LLC.," the lawsuit states.
Broad and McCrensky were referring to a section of the town code - Chapter 58 - which governs rental cars on Nantucket through a medallion system and caps the number of rentals at 700 for the entire island. The regulations require companies to obtain a medallion from the town for each rental car they are operating and establish a fine of $300 per day for any violations. Only six licensed car rental agencies on Nantucket control the 700 medallions, preventing others from entering the market and, some believe, driving up the price to rent a car on the island as high as $800 per day.
"These perpetual exclusive rights have gone unchallenged until today," Broad and McCrensky stated in their lawsuit.
Becky's Broncos was denied its request for medallions for its two rental vehicles in 2023, but "feeling this was wrong, Becky's Broncos operated anyways," the couple stated in their complaint.
The Nantucket rental car dispute became public last September when the Select Board first discussed a formal complaint regarding “illegal car rentals” from an attorney representing two of the island’s rental car businesses: Nantucket Rent-A-Car and Affordable Rentals. Attorney John Perten, who represents Nantucket Rent-A-Car and Affordable Rentals, submitted a list to the town of more than 150 individuals renting vehicles through Turo - the giant online car-sharing platform - along with the names of four small rental car companies, alleging they are all renting cars on Nantucket illegally without medallions.
Just days after the Select Board discussed the matter, the town began cracking down on the smaller rental car companies operating without medallions, including Becky's Broncos, with calls from the Nantucket Police Department ordering them to cease renting vehicles. On the advice of its attorneys, the town opted not to crack down on Turo operators.
"There are dozens if not more town employees who are renting out vehicles on Turo," the lawsuit states. "The Town is giving a pass to 200-odd Turo renters. Town employees included."
No new medallions have been issued by the town for decades, and the giant rental car company Hertz controls 310 medallions, but only operates 190 rental cars, leaving 120 medallions unused.
"Nantucket is trying to maintain the status quo of 30 years ago," the couple stated in the lawsuit. Broad and McCrensky requested the court to impose a temporary restraining order, a preliminary injunction, and a permanent injunction prohibiting the town from enforcing Chap. 58. They are also seeking compensatory and punitive damages.
The dispute over rental car practices and the medallions spilled over into last week's Annual Town Meeting, where both a town-sponsored warrant article and McCrensky's citizen petition seeking to address the situation were not approved by voters.
The Select Board's proposal under Article 64, a general bylaw amendment, sought to specifically include Turo car rentals under Nantucket's definition of a rental car agency, while also including a provision that could allow the town to claw back unused medallions. That warrant article was referred for further study.
McCrensky's citizen petition, a bylaw amendment titled "Equal Access To Rental Vehicle Medallions For New Local Small Businesses & Nantucket Residents" received a negative recommendation from the Finance Committee and was defeated.
During the debate on Article 64, Broad claimed that Finance Committee member Peter Schaeffer made a derogatory comment toward him on Town Meeting floor.
"When it came time for Ms. McCrensky to speak, Town Finance Committee member Peter Schaeffer stood within feet of Mr. Broad, a first generation Black American, stared at him, and repeated so that it would not be caught by the mic: 'Illegals, illegals, illegals'," according to the lawsuit. It should be noted that those alleged comments could not be heard or verified on the recording of the Town Meeting debate.
Schaeffer disputed that account of what happened at Town Meeting, stating that he was responding to a comment regarding the possibility of reducing the number of cars coming over on the Steamship Authority ferries, and that it would be "illegal" to do so. Schaeffer told the Current he was not referencing Broad, McCrensky, or their business.
Attorney Steve Cohen, who represented Nantucket's Turo operators, also chimed in on the situation and Hertz's practice of holding back more than one hundred rental car medallions.
"I'd like to tell a very short, kind of crazy story, which is that on Nantucket, in order to do car rentals, you need a medallion, and there are 700 medallions," Cohen said. "They were given out in 1996 and no one can get a new one since. So I don't know how old you were in 1996, but you missed the boat if you didn't get one then. Of those, 310 are owned by a national car company, which you all know what that is, and if you don't it doesn't matter. It's a national car company. And that national car company withholds between 90 and 200 of its licenses every year and it doesn't use them. And that is a way to drive up pricing. That's why it costs $800 per day to rent a car on Nantucket - because the company that has nearly 45 percent of the licenses only uses about one to two-thirds of those licenses and artificially inflates the prices. That is the most ridiculous thing I've ever heard. That we're favoring a national car company and there's no opportunity for Nantucketers and small businesses to enter the market, and there hasn't been since I was in college. That is not the way we should be doing things here."