Packard v. Banton

Background

A New York law requires people who carry passengers for hire in motor vehicles on the public streets of the State’s largest cities to file either a personal bond with sureties, a corporate surety bond, or an insurance policy for $2,500 to cover judgments for death or injury. The plaintiff, who owned several taxis, sued to stop enforcement, saying insurance premiums and other costs would cut his weekly net earnings dramatically and effectively confiscate his property. A three‑judge federal court dismissed the suit, and the matter reached the Court on appeal.

Reasoning

The Court considered whether the law violated the Fourteenth Amendment’s protections for equal treatment and fair process. It held that treating large cities differently is not arbitrary because heavy traffic and street use there create different risks. Excluding streetcars and vehicles regulated by the Public Service Commission was reasonable because those vehicles are already regulated. The Court also noted that drivers are not limited to costly insurance — they may use personal bonds or corporate sureties — and that evidence showed cheaper insurance and many operators using bonds. Because the statute is a permissible condition on a business carried on with government permission and is not shown to be confiscatory, the law stands.

Real world impact

The decision upholds the State’s ability to require financial security from for‑hire drivers in large cities. Drivers must obtain bonds, corporate sureties, or insurance or face misdemeanor prosecution. The ruling affirms that states may impose special rules on commercial use of busy city streets to protect the public.