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BREAKING: Judge Halts Mayor Bloomberg's Taxi Plan

Friday, June 01, 2012 - 07:26 PM

(photo by d-w via Flickr)

(New York, NY -- WNYC) A state supreme court judge has -- at least for now -- brought the city's 5-boro taxi plan to a screeching halt, based on the theory that allowing the state to approve the plan was "an unconstitutional power grab."  The judge acted on a law suit brought by the yellow cab industry.

The plan, set to get underway this month, would have brought street-hail taxi service to northern Manhattan and the outer boros.  The sale of the additional medallions -- essentially, licenses to operate street-hail vehicles -- was to bring over $1 billion to city coffers.  The city has been offering seminars for fleet owners on how to convert outer-boro livery cars to taxis, and even designated a color for the new street hails --"Apple Green."

Supreme Court Judge Arthur Engron, who was a cabbie himself while he was an undergrad at Columbia, wrote in his decision:  “The court has trouble seeing how the provision of taxi service is a matter that can be wrenched from the hands of city government where it has resided for some 75 years. And be handed over to the state.”  He added that the restraining order “seeks to preserve the status quo until a more complete examination of the plaintiffs claim can be made.”

But the city's reaction was swift and scathing.

Corporation Counsel Michael A. Cardozo, NYC's top lawyer, said, "We are deeply disappointed by today's decision.  We think the court was mistaken in its analysis and are exploring our appellate options.  We intend to so do expeditiously, so that we can proceed with this important new initiative.  The program is geared to providing improved transportation options to segments of the City which are now woefully underserved.  In addition, because we are enjoined from issuing additional medallions, we are prevented from proceeding with a program which will provide significant benefits to the disabled and garner the City approximately $1 billion in critically needed revenues."

The medallion industry has bitterly fought the Bloomberg plan, hiring consultants, organizing opposition rallies and threatening to litigate. The industry complained that allowing cars other than yellow taxis to pick up street hails would devalue the billion dollar medallion industry because for more than 80 years only they enjoyed that right.

One of the plaintiffs, the fleet group the Metropolitan Taxicab Board of Trade, is celebrating the Judge’s decision. Spokesman Michael Woloz said “By preventing the Taxi and Limousine Commission from issuing any outer borough street hail permits the court has prevented a trampling of the NY State constitution as well as an economic disaster from taxi owners and drivers who invested their life savings into what they regarded as the American dream—the taxi medallion. "

TLC Commissioner David Yassky called the last minute decision "unfortunate."

“We share the disappointment of the 80% of new Yorkers who live and work outside Manhattan and are waiting for safe, legal and reliable taxi service as well as the thousands of livery drivers who stand ready to provide that service," Yassky said.

The city was poised to start issuing the permits this month. The yellow medallion auction that’s scheduled for July and is estimated to bring in about 1 billion dollars to the city ‘s budget is now also on hold.

 

Here's the ruling:

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: PART 52
--------------------------------------------------------------------x
TAXICAB SERVICE ASSOCIATION, et al.,
Index Number: 102553/12
Plaintiffs,
Oral Argument Date: 5/31/12
- against -
Temporary Restraining Order
THE STATE OF NEW YORK, et al.,

Defendants.
----------------------------------------------------------------x
METROPOLITAN TAXICAB BOARD OF TRADE,
et al.,
Index Number 102472/12
Plaintiffs,
Oral Argument Date: 5/31/12
- against -
Temporary Restraining Order
MICHAEL R. BLOOMBERG, in his official capacity
as Mayor of the City of New York, et al.,

Defendants.
------------------------------------------------------------------x
GREATER NEW YORK TAXI ASSOCIATION
et. al.
Index Number 102783
Plaintiffs,
Oral Argument Date 5/31/12
- against -
Temporary Restraining Order
THE STATE OF NEW YORK, et al.,

Defendants.
------------------------------------------------------------------x

Arthur F. Engoron, Justice

Every New Yorker worth his or her salt knows the following basic facts about taxicabs: only “medallioned” cabs are allowed by law to pick up street hail passengers; the City limits the number of medallions (NYC Charter § 2303(b)(4)); and finding a medallioned cab outside of lower- and mid-Manhattan and the airports is usually quite difficult. Indeed, in the so-called “outer-boroughs” (which for the sake of this order includes Manhattan above East 96th Street and West 110th Street) persons needing taxi service must, practically speaking, either telephone a livery cab company, or hail a “gypsy” cab not authorized to make the pickup. For decades, the problem of the lack of legal, reliable taxi service in the outer boroughs has proven intractable.

Recently, the executive branch of defendant City of New York, i.e., the mayor’s office, asked the legislative branch, i.e., the City Council, to increase the number of medallions and to authorize licenses for outer-borough hails. When negotiations broke down, the executive branch asked the State Government for the same. The result is the legislation at issue in these three roughly parallel (and fascinating) cases: Chapter 602 of the Laws of 2011, and Chapter 9 of the Laws of 2012, collectively known as The Street Hail Livery Law. These enactments essentially, and greatly simplified, allow the mayor to issue 2,000 more medallions; allow the Taxi and Limousine Commission, a part of the executive branch, to issue 18,000 outer borough hail licenses, and mandates certain handicap accessibility quotas.

Plaintiffs in the Metropolitan Taxicab Board of Trade case are medallion owners and New York City Council Member Lewis A. Fidler. Plaintiffs in the Taxicab Service Association (“TSA”) case are credit unions and the like that finance the purchase of medallions. Plaintiffs in the Greater New York Taxi Association case are medallion owners and one individual. Defendants in both cases are, simply put, the State of New York, the legislative and executive bodies thereof, the City of New York, the Mayor thereof, the New York City Taxi and Limousine Commission, and the Commissioner thereof.

As plaintiffs would have it, the trek to Albany was an “end run” by the Mayor. Be that as it may, end runs are legal in football and in politics. The most basic question (among many others) presented here is whether the legislation violates the “Home Rule” provision of the State Constitution. See NY Const. Art. IX § 2(b)(2): the legislature . . . [s]hall have the power to act in relation to the property, affairs or government of any local government only by general law, or by special law [i.e., a law affecting only one locality] only . . . on request of two-thirds of the total membership of its legislative body or on request of its chief executive officer concurred in by a majority of such membership.” As this Court has determined, in the roughly 24 hours since oral argument ended yesterday, and on the business day just prior to the one on which significant aspects of the legislation are to go into effect, that plaintiffs are likely to succeed on their claim that the law does the State Constitution, and that plaintiffs have demonstrated “irreparable harm” and a “balancing of the equities” in their favor, this Court hereby issues this Temporary Restraining Order, enjoining defendants from implementing any aspect of the law (which contains a so-called “poison pill,” pursuant to which if any aspect of the law is held to be constitutionally infirm, the whole law falls).

Since The Great Depression the legislative branch of New York City has governed, and limited, the issuance of taxi medallions. Even when, twice in the last two decades, the City Council modestly increased the number of medallions, the Council issued a home rule message to this effect. Under the Home Rule provision of the State Constitution, the State Legislature may override the laws of a local municipality only in “matters other than the property, affairs or government of a local government.” The question here is basically whether the number of taxi medallions and the rules of outer-borough hails is primarily a matter of local or state concern. Obviously, anything that affects New York City affects the state in which it is situated, and just as obviously non-New York City residents can (and do, in droves) spend time in New York City. But, generally speaking, these facts cannot satisfy the Home Rule requirements or nothing would be left of the rule but the exceptions. The argument that the City is in the State, and so is a State concern, simply proves too much. This Court has trouble seeing how the provision of taxi service in New York City is a matter that can be wrenched from the hands of City government, where it has resided for some 75 years, and handed over to the State. Both governments are democracies, but only one is solely answerable on election day to the constituents of the five boroughs, those directly affected by the taxi service at issue here.

In a memorandum in opposition to plaintiff’s request for injunctive relief, defendant City quotes the New York State Senate Introducer’s Memorandum in Support of the legislation, in part, as follows:

The bill would allow the City to implement a taxi plan that will more effectively service all five boroughs of New York City and greatly increase the availability of accessible taxicabs and for-hire vehicles. The creation of this plan was prompted by three persistent mobility problems: the lack of accessible vehicles for people with disabilities; nearly non-existent taxi availability in underserved areas of the City (e.g., boroughs outside Manhattan); and insufficient taxi supply in Manhattan’s central business district.

There is nothing in here about Nassau or Westchester Counties, much less Buffalo or Rochester.

As the TSA plaintiffs put it (Memorandum of Law dated 5/17/12, at 7), “the Street Hail Livery Law infringes on Plaintiffs’ constitutionally guaranteed right to have their local government representatives decide issues relating to the local taxi industry, in which they are longtime and central participants.”

In addition to showing a likelihood of success on the merits, this Court finds that plaintiffs have demonstrated irreparable injury (see generally Ambrose v. Malcolm, 414 F Supp 485, 493 (S.D.N.Y.1976) (suggesting that deprivations of constitutional rights ipso facto demonstrate irreparable injury, or substitute therefor)), and a balancing of the equities in their favor (briefly keeping the status quo will not harm defendants).

Because of the afore-referenced severe time restrictions, today’s order does not address the numerous other complex objections (alleged unconstitutional takings and inadequate environmental review to name just two of many) plaintiffs have raised to the subject legislation. Today’s order also does not address the wisdom, or lack thereof, of defendants’ good-faith efforts to address age-old problems. Today’s order only seeks to preserve the status quo until a more complete examination can be made of plaintiffs’ claim (among others) that the legislation at issue represents an unconstitutional power grab, and of defendants’ response that the State government has properly regulated an area of state-wide concern.

Thus defendants are hereby temporarily restrained, pending further order of this Court, from implementing any aspect of the subject legislation, conditional on plaintiffs collectively posting a bond of $600,000 (the TSA plaintiffs claim to be a multi-billion dollar business) by Thursday, June 7, 2012. The Court will attempt to resolve with all deliberate speed plaintiffs’ request for a preliminary injunction, defendants’ request for summary judgment, and the ultimate merits of this litigation.

Dated: 6/1/12
Arthur F. Engoron, J.C.C.

Sincerely,

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