New York County Supreme Court Index Nos.
102472/2012 (MTBOT v. Bloomberg)
102553/2012 (TSA v. State)
102783/2012 (GNYTA v. State)
To be argued by:
SCOTT SHORR
(20 Minutes)
NEW YORK STATE
COURT OF APPEALS
METROPOLITAN TAXICAB BOARD OF TRADE, OSSMAN
ALI, AYALLO HACKING CORP., BONANZA CAB CORP.,
BATH CAB CORP., RONDEB CAB CORP., and NEW YORK
CITY COUNCIL MEMBER LEWIS A. FIDLER,
Plaintiffs-Respondents,
-and-
THE LIVERY ROUNDTABLE, INC., BIG EAST MULTI
GROUP CORP., d/b/a/ PREMIER CAR SERVICE, N.J.M., INC.
d/b/a MID ISLAND CAR SERVICE OF STATEN ISLAND,
Intervenor-Plaintiffs-Respondents,
-against-
-------------------------------------------------------------------------------
(Caption Continued Below)
MUNICIPAL APPELLANTS’ BRIEF
LEONARD J. KOERNER,
FRANCIS F. CAPUTO,
SCOTT SHORR,
of Counsel.
January 16, 2013
MICHAEL A. CARDOZO,
Corporation Counsel of the City
of New York,
Attorney for Municipal Respondents-Appellants
100 Church Street,
New York, New York 10007.
(212) 788-1089 or -1055
sshorr@law.nyc.gov
REPRODUCED ON RECYCLED PAPER
(Caption Continued from Preceding Page)
------------------------------------------------------------------------------
MICHAEL R. BLOOMBERG, in his official capacity as Mayor
of the City of New York; CITY OF NEW YORK; THE NEW
YORK CITY TAXI AND LIMOUSINE COMMISSION
(“TLC”); DAVID S. YASSKY, in his official capacity as
Commissioner, Chair and Chief Executive Officer of the TLC,
Defendants-Appellants,
-and-
LIVERY BASE OWNERS INC. and THE EXCELLENT CAR
SERVICE INC.,
Intervenor-Defendants-Appellants.
------------------------------------------------------------------------------
TAXICAB SERVICE ASSOCIATION; LOMTO FEDERAL
CREDIT UNION; MELROSE CREDIT UNION; MONTAUK
CREDIT UNION; and PROGRESSIVE CREDIT UNION,
Plaintiffs-Appellants,
-against-
THE STATE OF NEW YORK; THE NEW YORK STATE
ASSEMBLY; THE NEW YORK STATE SENATE; ANDREW
M. CUOMO, in his official capacity as Governor of New York;
THE CITY OF NEW YORK; MICHAEL R. BLOOMBERG, in
his official capacity as Mayor of the City of New York; the
NEW YORK CITY TAXI AND LIMOUSINE COMMISSION,
a charter-mandated agency; DAVID YASSKY, in his official
capacity as Chairman and Commissioner of the New York City
Taxi and Limousine Commission,
Defendants-Appellants,
------------------------------------------------------------------------------
(Caption Continued Below)
(Caption Continued from Preceding Page)
------------------------------------------------------------------------------
-and-
LIVERY BASE OWNERS INC. and THE EXCELLENT CAR
SERVICE INC.,
Intervenor-Defendants-Appellants.
------------------------------------------------------------------------------
GREATER NEW YORK TAXI ASSOCIATION and EVGENY
FREIDMAN,
Plaintiffs-Respondents,
-against-
THE STATE OF NEW YORK, THE NEW YORK STATE
ASSEMBLY, THE NEW YORK STATE SENATE; ANDREW
M. CUOMO, in his official capacity as Governor of New York,
THE CITY OF NEW YORK; MICHAEL R. BLOOMBERG, in
his official capacity as Mayor of the City of New York; the
NEW YORK CITY TAXI AND LIMOUSINE COMMISSION,
a charter-mandated agency, and DAVID YASSKY, in his
official capacity as Chairman and Commissioner of the New
York City Taxi and Limousine Commission,
Defendants-Appellants,
-and-
LIVERY BASE OWNERS INC. and THE EXCELLENT CAR
SERVICE INC.,
Intervenor-Defendants-Appellants.
TABLE OF CONTENTS
TABLE OF AUTHORITIES .................................................................................iv
PRELIMINARY STATEMENT ............................................................................1
QUESTIONS PRESENTED ...................................................................................5
STATEMENT OF FACTS ......................................................................................6
A. New York City Taxi Regulation, 1897-1971 .................................................6
B. Medallion Acquisition Rules ........................................................................10
C. Medallion Values, 1937-2012.......................................................................10
D. The Street Hail Livery Law (the “Act”) .......................................................12
1. Legislative findings ..................................................................................14
2. The HAIL License Program .....................................................................16
3. The Accessible Taxicab Program.............................................................20
4. The Disabled Accessibility Plan...............................................................21
5. Revenues anticipated from implementation of the Act ............................21
6. The Act’s interpretive provisions .............................................................22
7. The Act’s expected benefits .....................................................................22
8. The TLC’s planned implementation of the Act........................................23
E. Procedural History.........................................................................................23
DECISION BELOW..............................................................................................24
RELEVANT CONSTITUTIONAL
PROVISIONS AND STATUTES .........................................................................24
POINT I: BECAUSE THE ACT FURTHERS,
AND BEARS A DIRECT AND REASONABLE
RELATIONSHIP TO, THE STATE’S
SUBSTANTIAL CONCERN WITH NEW YORK
CITY’S FOR-HIRE TRANSPORTATION
SYSTEM, THE ACT DID NOT REQUIRE A
HOME RULE MESSAGE ....................................................................................27
(A) In Denying the Existence of the State’s Substantial
Interest in New York City’s For-Hire Transportation
System, Supreme Court Overlooked this Court’s
Precedents and Several State Statutes ............................................................30
(1) The State has a substantial interest in New York
City’s for-hire transportation system......................................................30
(2) Supreme Court wrongly rejected the State’s
substantial interest in New York City’s for-hire
transportation system ...............................................................................35
(B) Supreme Court Erroneously Rejected the
Legislature’s Stated Purpose for Enacting the Act: to
Advance the State’s Substantial Interest in New York
City’s For-Hire Transportation System .........................................................45
(C) Contrary to Supreme Court’s Finding, the Act Bears
a Direct and Reasonable Relationship to the State’s
Substantial Interest in New York City’s For-Hire
Transportation System .....................................................................................49
(1) Key provisions of the Act bear a direct and
reasonable relationship to the State’s substantial
concern with New York City’s for-hire
transportation system.................................................................................50
(2) Supreme Court erroneously concluded that the Act
does not bear a direct and reasonable relationship to
the State’s substantial interest in New York City’s
for-hire transportation system ..................................................................54
(a) The Legislature was Free to Advance its
Objectives by Delegating Medallion-
Authorization Power to the Mayor ....................................................56
ii
iii
(b) The Act does not Impermissibly Intrude upon the
City’s Fiscal Powers...........................................................................59
(c) Regardless of its Complexity, the Act Bears a
Direct and Reasonable Relationship to a
Substantial State Interest....................................................................61
POINT II: BECAUSE THE ACT INVOLVES A
SUBSTANTIAL STATE INTEREST, THE
STATE CONSTITUTION DID NOT REQUIRE
DOUBLE ENACTMENT......................................................................................63
POINT III: THE ACT DOES NOT GRANT FOR-
HIRE VEHICLE DRIVERS, OWNERS OR BASE
STATIONS UNCONSTITUTIONAL
EXCLUSIVE PRIVILEGES.................................................................................66
CONCLUSION.......................................................................................................73
TABLE OF AUTHORITIES
CASES
19th Street Assoc. v. State, NYLJ, July 20, 1990, at 29,
col. 3, aff’d, 172 A.D.2d 380 (1st Dept. 1991), aff’d,
79 N.Y.2d 434 (1992) ..........................................................................................68
Adler v. Deegan, 251 N.Y. 467 (1929) ............................................................ passim
American Consumer Ind. v. City of New York, 28 A.D. 2d
38 (1st Dept. 1967).........................................................................................68, 70
American Transit Ins. Co. v. Sartor, 3 N.Y.3d 71 (2004) .......................................32
Board of Educ. v. City of New York, 41 N.Y.2d 535
(1977) .............................................................................................................41, 60
Bugeja v. City of New York, 24 A.D.2d 151 (2d Dept.
1965), aff’d without opin., 17 N.Y.2d 606 (1966) ...................................29, 31, 37
Casado v. Markus, 16 N.Y.3d 329 (2011)...............................................................58
Chazon, LLC v. Maugenest, 19 N.Y.3d 410 (2012) ................................................33
City of New York v. Patrolmen’s Benevolent Ass’n, 89
N.Y.2d 380 (1996) ....................................................................................... passim
City of New York v. Rice, 198 N.Y. 124 (1910).......................................................30
City of New York v. State of New York, Index No.
44141/88 (Sup. Ct. N.Y. Co. 1989), aff’d without
opin., 171 A.D.2d 629 (1st Dept. 1991)...............................................................65
City of New York v. State, 94 N.Y.2d 577 (2000)............................................ passim
City of New York v. Wilson & Co., 278 N.Y.86 (1938)...........................................49
Cohen v. Cuomo, 19 N.Y.3d 196 (2012) .......................................................9, 31, 45
Consumers Union, Inc. v. State, 5 N.Y.3d 327 (2005) ................................66, 67, 69
Corning v. Donohue, 37 A.D.2d 213 (3d Dept.), aff’d, 29
N.Y.2d 209 (1971) ...............................................................................................67
Finegan v. Cohen, 275 N.Y. 432 (1937) ...................................................................9
Floyd v. New York State Urban Dev. Corp., 33 N.Y.2d 1
(1973) ...................................................................................................................65
Fox v. Mohawk & H. R. Humane Soc., 165 N.Y. 517
(1901) ...................................................................................................................68
Hotel Dorset Co. v. Trust for Cultural Resources, 46
N.Y.2d 358 (1978) ....................................................................................... passim
Islip v. Cuomo, 64 N.Y.2d 50 (1984)...........................................................36, 41, 44
Kelley v. McGee, 57 N.Y.2d 522 (1982) ......................................................... passim
Kelly-Sullivan, Inc. v. Moss, 174 Misc. 1098 (Sup. Ct.,
N.Y. Cty.), aff’d without opin., 260 A.D. 921 (1st
Dept. 1940)...........................................................................................................42
Matter of New York Elevated Rail Co., 70 N.Y. 327
(1877) ...................................................................................................................67
McAneny v. Board of Estimate, 232 N.Y. 377 (1922).............................................32
New York State Pub. Employees Fed’n v. Albany, 72
N.Y.2d 96 (1988) .................................................................................................30
New York v. Lawrence, 250 N.Y. 429 (1929)........................................44, 46, 47, 57
Noel v. New York City Taxi & Limousine Comm’n, 687
F.3d 63 (2d Cir. 2012)..........................................................................................14
Osborn v. Cohen, 272 N.Y. 55 (1936).........................................................31, 35, 46
Packard v. Banton, 264 U.S. 140 (1924).................................................................32
Patrolmen’s Benevolent Ass’n v. City of New York, 97
N.Y.2d 378 (2001) ....................................................................................... passim
People v. Grant, 306 N.Y. 258 (1954).....................................................................30
v
People v. Griswold, 213 N.Y. 92 (1914) .................................................................72
People v. Kerr, 27 N.Y. 188 (1863)...................................................................31, 39
Radich v. Council of Lackawanna, 61 N.Y.2d 652 (1983)......................................37
Robertson v. Zimmermann, 268 N.Y. 52 (1935) .....................................................44
Rochester v. Gutberlett, 211 N.Y. 309 (1914).............................................67, 70, 72
Rudack v. Valentine, 163 Misc. 326 (Sup. Ct., Special
Term, N.Y. Cty.), aff’d without opin., 274 N. Y. 615
(1937) .....................................................................................................6, 8, 33, 48
Salzman v. Impellitteri, 203 Misc. 486 (Sup. Ct., Special
Term, N.Y. Cty.), aff’d without opin., 281 A.D. 1023
(1st Dept.), aff’d as modified, 305 N.Y. 414 (1953)................................32, 53, 58
Sheehy v. Big Flats Community Day, Inc., 73 N.Y.2d 629
(1989) ...................................................................................................................56
Taylor v. Sise, 33 N.Y.2d 357 (1974) ......................................................................56
Trustees of Exempt Firemen’s Benevolent Fund v.
Roome, 93 N.Y. 313 (1883) .................................................................................72
United Taxicab Bd. of Trade v. City of New York, 150
Misc. 636 (Sup. Ct., N.Y. Cty., 1933) ...................................................................7
Wambat Realty Corp. v. State, 41 N.Y.2d 490 (1977) .................................... passim
Yellow Taxicab Co. v. Gaynor, 82 Misc. 94 (N.Y. Sup.
Ct., Sp. Term, N.Y. Cty.), aff’d on opin. below, 159
A.D. 893 (1st Dept. 1913)................................................................................6, 31
CONSTITUTIONAL PROVISIONS
N.Y. Const. Art. III § 17 .................................................................................. passim
N.Y. Const. Art. IX § 2(b)(1).................................................................... 1, 3, 25, 63
N.Y. Const. Art. IX § 2(b)(2)........................................................................... passim
vi
N.Y. Const. Art. IX § 2(c) ................................................................................ 57, 60
N.Y. Const. Art. IX § 3(a)(3)............................................................................ 28, 63
N.Y. Const. Art. IX § 3(d) .......................................................................................27
N.Y. Const. Art. XVI § 1 ............................................................................ 11, 58, 59
STATUTES AND SESSION LAWS
N.Y. Finance Law § 72(1) .......................................................................................61
N.Y. Gen. Mun. Law § 181(1)...................................................................... 9, 39, 58
N.Y. Insurance Law § 7005(a).................................................................................53
N.Y. Public Authorities Law § 1266-c(2)(e) ...........................................................53
N.Y. Stat. Loc. Gov. § 10(1)....................................................................................63
N.Y. Stat. Loc. Gov. § 11(4)....................................................................................63
N.Y. Tax Law § 1281...............................................................................................18
N.Y. Tax Law § 1288...............................................................................................19
N.Y. Transp. Law § 10.............................................................................................31
N.Y. Transp. Law § 15-b ...................................................................... 34, 35, 40, 48
N.Y. Vehicle and Traffic Law § 370(a)............................................................ 32, 40
N.Y. Vehicle and Traffic Law § 498(2)(a) ....................................................... 34, 40
L 1897, ch 378 .................................................................................................... 6, 39
L 1910, ch 262 .................................................................................................... 6, 39
L 1934, ch 867 ...........................................................................................................9
L 1935, ch 292 ...........................................................................................................9
L 1936, ch 886 .........................................................................................................46
vii
L 1937, ch 929 .................................................................................................... 9, 33
L 1984, ch 498 .........................................................................................................34
L 1992, ch 853-54 ....................................................................................................40
L 1993, ch 487 .........................................................................................................40
L 1995, ch 359 .........................................................................................................11
L 2003, ch 63 ...........................................................................................................11
L 2006, ch 535 .........................................................................................................11
L 2006, ch 549 .........................................................................................................34
L 2007, ch 384 .................................................................................................. 40, 53
L 2011, ch 602 ...........................................................................................................1
L 2012, ch 9 ...............................................................................................................1
NEW YORK CITY CHARTER, CODE, AND RULES
New York City Charter § 3 ......................................................................................53
New York City Charter § 8 ......................................................................................53
New York City Charter § 109..................................................................................61
New York City Charter § 225..................................................................................61
New York City Charter § 254..................................................................................61
New York City Charter § 1120................................................................................53
New York City Charter § 2303(b)(4).................................................................. 9, 58
N.Y.C. Admin. Code § 19-502 ..................................................................................8
N.Y.C. Admin. Code § 19-504 ................................................................................10
N.Y.C. Admin. Code § 19-506 ................................................................................19
viii
ix
N.Y.C. Admin. Code § 19-511 ................................................................................18
N.Y.C. Admin. Code § 19-531 ................................................................................11
N.Y.C. Admin. Code § 19-532 ................................................................................11
35 RCNY § 51-03 ....................................................................................................10
35 RCNY § 54-17 ....................................................................................................13
35 RCNY § 58-03 ......................................................................................................8
35 RCNY § 58-04 ............................................................................................. 10, 32
35 RCNY §§ 58-43 et seq.. ......................................................................................10
35 RCNY § 59B-04.1...............................................................................................18
35 RCNY § 82-22 ....................................................................................................17
35 RCNY § 82-26 ....................................................................................................17
35 RCNY § 82-30 ....................................................................................................17
35 RCNY § 82-31 ....................................................................................................17
35 RCNY § 82-38 ....................................................................................................17
35 RCNY § 82-41 ....................................................................................................17
35 RCNY § 82-42 ....................................................................................................17
35 RCNY § 83-31 ....................................................................................................17
35 RCNY § 83-33 ....................................................................................................17
PRELIMINARY STATEMENT
In these three home rule and “exclusive privileges” cases, defendants-
appellants New York City Mayor Michael R. Bloomberg, the City of New York,
the New York City Taxi and Limousine Commission (the “TLC”), and TLC
Commissioner David S. Yassky (collectively, the “City”) appeal from three
Judgments of Supreme Court, New York County (Engoron, J.), one entered
September 7, 2012, and two entered September 12, 2012 (the “Judgments”) (G2-9;
M5-11; T5-12).1 In its earlier Decision and Order (one paper) entered August 21,
2012 (the “Decision”) (G361-93; M1210-42; T2137-69), Supreme Court declared
that the Street Hail Livery Law, L 2011, ch 602, as amended by L 2012, ch 9 (the
“Act”), violates three provisions of the New York State Constitution: the Home
Rule Clause, Article IX, section 2(b)(2); the Double Enactment Clause, Article IX,
section 2(b)(1); and the Exclusive Privileges Clause, Article III, section 17. By
letters dated December 14, 2012, this Court agreed to hear direct appeals from
Supreme Court’s Judgments.
For decades, New York City yellow (or “medallion”) taxis have enjoyed the
exclusive authorization to provide street-hail transportation service throughout the
1 Unless otherwise indicated, numbers inside parentheses preceded by the letter “G,” “M,” or “T”
refer, respectively, to pages in the Record on Appeal for Greater New York Taxi Association v.
State of New York, Metropolitan Taxicab Board of Trade v. Bloomberg, or Taxicab Service
Association v. State of New York.
five boroughs. Given the intense demand for medallion taxi service, and the
capped number of medallions in circulation, medallion values have soared to
between $800,000 and $1.1 million each. The lucrative medallion industry has,
however, left two groups of street-hail customers glaringly underserved:
(1) residents and visitors who need access to street-hail transportation outside
Manhattan’s central business district; and (2) disabled residents and visitors who
need access to wheelchair-accessible street-hail transportation in Manhattan’s
central business district and throughout the five boroughs.
To address these deficiencies in New York City’s for-hire transportation
system, and to improve the availability of yellow taxis generally, the State
Legislature enacted the Act. While preserving medallion taxis’ exclusive street-
hail power in Manhattan’s central business district and exclusive power to solicit
for-hire vehicle passengers at the two Queens airports (the areas where yellow
taxis pick up 95 percent of their customers), the Act allows up to 18,000
appropriately-licensed for-hire vehicles (e.g., livery cars) to accept street hails
everywhere else in New York City. Under the Act, twenty percent of the street-
hail livery cars must be wheelchair-accessible. Further improving the City’s for-
hire transportation system for disabled and non-disabled riders, the Act authorizes
the City to issue 2,000 new medallions for wheelchair-accessible yellow taxis. The
sale of new medallions is expected to generate $1 billion in City revenues.
2
Intent upon defending even the rarely-exercised exclusive power to accept
street hails outside central Manhattan, several members of the yellow taxi industry
sued, along with one member of the New York City Council.2 All three groups of
plaintiffs claimed that despite the Legislature’s express articulation of the State’s
substantial interest in New York City’s for-hire transportation system, the Act
constitutes the kind of “special law” that, under Article IX, section 2(b)(2) of the
New York State Constitution, required a “home rule” message from City Council.
For similar reasons, the MTBOT plaintiffs further alleged that the Act required
“double enactment,” under Article IX section 2(b)(1) of the Constitution. In
addition, both the MTBOT and GNYTA plaintiffs alleged that the Act violated
Article III section 17 of the Constitution by conferring “exclusive” license-
acquisition “privileges” upon approximately 60,000 participants in New York
City’s livery car industry. While correctly rejecting many of the plaintiffs’ other
arguments, Supreme Court erroneously held that the Act violates all three
constitutional provisions.
2 Plaintiffs-respondents in Metropolitan Taxicab Board of Trade v. Bloomberg are a trade
association of taxicab medallion owners, five medallion owners, and New York City Council
Member Lewis A. Fidler (collectively, the “MTBOT plaintiffs”). Plaintiffs-respondents in
Taxicab Service Association v. State of New York are an association of credit union lenders and
four credit unions that loan money for the purchase of medallions, with the purchased medallions
serving as collateral for the loans (collectively, the “TSA plaintiffs”). Plaintiffs-respondents in
Greater New York Taxi Association v. State of New York are an association representing the
purported “owners of approximately 1500 taxicab medallions operating in New York City” and
an individual member of the association (collectively, the “GNYTA plaintiffs”).
3
Under this Court’s precedents, the Act did not require a home rule message,
because (1) the Legislature enacted the Act in furtherance of a substantial State
interest; and (2) the Act bears a direct and reasonable relationship to that State
interest. Both case law and previous Legislative enactments demonstrate the
State’s substantial interest in New York City’s for-hire transportation system,
including the provision of adequate for-hire transportation to disabled and non-
disabled people who live in and visit New York City’s five boroughs. To the
extent the City has regulated for-hire transportation in the past, it has done so
pursuant to delegations of power from the State, none of which diminished the
State’s authority to advance its substantial interests by enacting its own legislation
regarding the City’s for-hire transportation system. Also because the Act involves
a matter of State concern, the Act did not require compliance with the
Constitution’s double-enactment procedures.
Finally, the Act is consistent with the Constitution’s Exclusive Privileges
Clause, because the Act does not constitute a “private or local bill,” is not directed
at a single entity, and does not grant exclusive privileges. Even assuming the Act
could be construed as a private or local bill conferring exclusive privileges upon a
single entity, the Act would remain constitutional, because it represents an exercise
of the Legislature’s police powers to improve the availability of for-hire
transportation for millions of disabled and non-disabled New York City travelers.
4
Accordingly, this Court should vacate Supreme Court’s three Judgments and
remand these cases to Supreme Court for the entry of appropriate orders declaring
the Act constitutional.
QUESTIONS PRESENTED
1. Because the New York State Legislature enacted the Act in furtherance
of the State’s substantial interest in New York City’s for-hire transportation
system, and because the statute bears a direct and reasonable relationship to that
substantial State interest, did Supreme Court err in concluding that under the New
York State Constitution, the Act required a home rule message from the New York
City Council?
2. Similarly, because the Act involves the State’s interest in New York
City’s for-hire transportation system, did Supreme Court erroneously conclude that
the statute’s alleged intrusions upon local powers required compliance with the
State Constitution’s double enactment clause?
3. Is the Act consistent with the constitutional prohibition on private or local
bills granting exclusive privileges to any private corporation, association or
individual, where (a) unlike “private or local bills,” the Act addresses a matter of
substantial State concern and, in relevant part, applies to a 60,000-member class of
for-hire vehicle drivers and owners; (b) any privileges the Act confers upon
thousands of current and future members of New York City’s livery industry are
5
not “exclusive;” and (c) the Act represents an exercise of police powers designed
to improve the availability of for-hire transportation for millions of disabled and
non-disabled New York City travelers?
STATEMENT OF FACTS
A. New York City Taxi Regulation, 1897-1971.
“[T]he business of a public hackman is affected with a public interest and
falls within the principle . . . that businesses of certain kinds sustain such a peculiar
relation to the public interests that there is superinduced upon them the right of
public regulation.” Yellow Taxicab Co. v. Gaynor, 82 Misc. 94, 106 (N.Y. Sup.
Ct., Sp. Term, N.Y. Cty.), aff’d on opin. below, 159 A.D. 893 (1st Dept. 1913).
For over a century, the State has played an integral role in the regulation of the
“public hack” industry.
When the State enacted New York City’s first Greater New York Charter in
1897, the Legislature authorized the City’s legislative body to license and regulate
the business of “hackmen.” See L 1897, ch 378, § 49. Subsequent revisions of the
Greater New York Charter continued this delegation of regulatory authority. See,
e.g., Rudack v. Valentine, 163 Misc. 326, 327 (Sup. Ct., Special Term, N.Y. Cty.)
(quoting Greater New York Charter section 51), aff’d without opin., 274 N. Y. 615
(1937); L 1910, ch 262, § 51. Under the City’s “Public Hack Ordinance” of 1913,
6
the Mayor’s Bureau of Licenses controlled the licensing of “public hacks,” i.e.,
“vehicle[s] plying for hire and . . . solicit[ing] public patronage” upon City streets.
In 1925, the City’s Board of Aldermen transferred regulatory authority over
“hack licenses” to the New York City Police Department (the “NYPD”). See
Greater New York Charter § 368; Local Law No. 9 [1925] of City of NY; United
Taxicab Bd. of Trade v. City of New York, 150 Misc. 636, 638 (Sup. Ct., N.Y. Cty.,
1933). From 1931 to 1933, a City “Board of Taxicab Control” exercised
regulatory authority over taxicabs. See Local Law No. 31 [1931] of City of NY;
Local Law No. 4 [1933] of City of NY (repealing Local Law 31 of 1931); United
Taxicab, 150 Misc. at 638.
Acting by a joint resolution adopted in 1935, the State Assembly and Senate
created a Joint Legislative Committee on Taxicab Operation and Fares to
investigate taxi service throughout the State. Rep. of Joint Leg. Comm. on Taxicab
Operation and Fares, Legis. Doc. No. 83, at 3 (1936). The joint resolution declared
that “[s]afe, adequate, and efficient taxicab operation at just and reasonable rates is
an indispensible transportation service auxiliary to rapid transit and other
transportation systems in large cities in this State.” Id. Further describing the taxi
industry as “closely affected with a public interest,” the joint resolution
characterized existing State and local laws as inadequate to prevent and correct taxi
industry deficiencies. Id. The Joint Committee subsequently proposed legislation
7
authorizing State regulation of taxicab operations in large cities, and capping the
number of taxicab licenses at the existing level, to be increased only if necessary
“for public convenience and necessity.” Id. at 49-57. The Legislature never
enacted the Joint Committee’s proposed bill, perhaps because of the City’s
progress in revising its own taxi ordinance. See Rudack, 163 Misc. at 329.
In 1937, the Board of Aldermen created a comprehensive regulatory scheme
for the New York City taxi industry. New York City Code of Ordinances, chap.
27-a (1937) (the “Haas Act”). Finding “that the taxicab industry in the city of New
York is vested with a public interest because it is a vital and integral part of the
transportation facilities of the city of New York,” the Board of Aldermen
(1) capped the number of “medallion” taxicab licenses at the number of taxicabs
operating in 1937; (2) preserved the then-existing ratio of fleet-owned (or
“corporate”) taxicabs to individually-owned (or “independent”) taxicabs;3 and
(3) created a “Hack Bureau” within the NYPD to supervise and license taxicab
drivers, as well as to determine whether “the public convenience, welfare and
necessity require the operation of additional taxicabs.” Later in 1937, the State
3 TLC-issued medallions are numbered plates “affixed to the outside of a Taxicab as physical
evidence that the Taxicab has been licensed to operate as a Medallion Taxicab.” 35 Rules of the
City of New York (“RCNY”) § 51-03; see also 35 RCNY § 58-03(v) (same). Every TLC-
licensed taxicab must display its medallion. New York City Administrative Code (the “Code”)
§ 19-502(h). Pursuant to Code section 19-504(i), corporations hold 58 percent of taxicab
medallions and individuals hold 42 percent, the ratio prevailing when section 19-504 was
enacted (see M34[¶39 n.8]; T142[¶39 n.8]).
8
Legislature codified the provisions of the Haas Act as section 436-2.0 of the Code.
See L 1937, ch 929.
Through a charter revision process that culminated in a 1936 City
referendum, the State Legislature effectively revised New York City’s Charter.
See L 1934, ch 867, amd. L 1935, ch 292; Finegan v. Cohen, 275 N.Y. 432, 436
(1937). Effective in 1938, see Finegan, 275 N.Y. at 436, the revised Charter
(1) dissolved the Board of Aldermen; (2) vested most municipal legislative powers
in a newly-created City Council; (3) granted (in section 436) the Police
Commissioner regulatory authority over taxicabs; and (4) acknowledged (in
section 42[c]) City Council’s authority to enact local laws regarding licensing.
In 1956, the State delegated to local legislatures the power to adopt
ordinances regulating “[t]he registration and licensing of taxicabs and [to] limit the
number of taxicabs to be licensed.” N.Y. Gen. Mun. Law § 181(1). Fifteen years
later, in 1971, City Council enacted a local law amending the New York City
Charter to transfer the NYPD’s regulatory authority over the taxicab industry to the
newly-created TLC, where it has remained. See Local Law No. 12 [1971]; Charter
§§ 2300 et seq. In doing so, City Council provided that “[a]dditional taxicab
licenses may be issued from time to time only upon the enactment of a local law
providing therefor.” Charter § 2303(b)(4).
9
B. Medallion Acquisition Rules.
The TLC defines a “Taxicab License” as “the authority granted by the
[TLC] for a[ license] Applicant to own and operate a designated vehicle as a
Taxicab within the [TLC’s] jurisdiction, as evidenced by the Medallion affixed to
the hood of the vehicle.” 35 RCNY § 51-03. Individual and business entity
applicants for taxicab licenses must meet several criteria. 35 RCNY § 58-04(c)(1),
(d). In compliance with relevant TLC rules, private parties may buy and sell the
taxicab licenses represented by medallions. See 35 RCNY §§ 58-43, et seq.
C. Medallion Values, 1937-2012.
New York City’s medallion taxicabs have long held the exclusive
authorization to respond to street hails in all five boroughs (M23[¶3]; T131[¶3];
Code § 19-504(a)(1)). The artificial cap on the number of New York City taxicab
medallions has steadily increased the economic value of that exclusive
governmental authorization (see M33[¶37]; M117; T141[¶37]; T153).
In 1947, the average transfer price of individual and corporate medallions
was $2,500 (T314). By 1962, when there were 11,787 medallions in circulation,
the average transfer prices were $22,000 for an individual medallion and $23,400
for a corporation medallion (T303; T314). While the number of medallions in
circulation remained stable for the next three decades, average transfer prices in
10
1995 had increased to $155,633 for individual medallions and $214,221 for
corporate medallions (T314).
Under Article XVI section 1 of the New York State Constitution, which took
effect in 1939, the City cannot issue and sell taxicab licenses at market value – or
at any price above their administrative cost – without the approval of the State
Legislature. By statute enacted in 1995, the Legislature permitted the City, acting
by local law, to authorize the TLC to issue and sell 400 new taxicab licenses.
L 1995, ch 359. Pursuant to Code section 19-531, the TLC issued and auctioned
400 medallions in 1996 and 1997, for an average price of $212,500 (T301; T303).
Pursuant to additional State laws (L 2003, ch 63 and L 2006, ch 535) and Code
sections 19-532(a) and (c), the TLC issued and auctioned 592 medallions in 2004
(including 27 for accessible taxis); 308 medallions in 2006 (including 54 for
accessible taxis); 63 accessible medallions in 2007; and 87 accessible medallions
in 2008. See Local Law No. 18 [2006] of City of NY; www.nyc.gov/html/
tlc/downloads/pdf/press_release_11_01_07.pdf; www.nyc.gov/html/tlc/downloads/
pdf/press_release_medallion_auction.pdf. Despite the issuance of 1,450 new
medallions between 1996 and 2008, average transfer prices in 2009 had risen to
approximately $600,000 for individual medallions and $775,000 for corporate
medallions (M117; T153). In 2011 – the year before the enactment of the State
law at issue here – transfer prices ranged between $634,000 and $639,000 for
11
individual medallions, and between $950,000 and $1 million for corporate
medallions (M33-34[¶¶38-39]; T141-42[¶¶38-39]).
On February 17, 2012, when Governor Cuomo signed the Act into law, the
average sale price for an individual medallion was approximately $703,000 and the
average sale price for a corporate medallion was approximately $1 million (M33-
34[¶¶38-39]; T141-42[¶¶38-39]). In December 2012, average transfer prices were
$808,000 for individual medallions and $1.1 million for corporate medallions.4
D. The Street Hail Livery Law (the “Act”).
Yellow cabs make approximately 95 percent of their pick-ups in three
locations: Manhattan south of East 96th Street and West 110th Street (the
“Manhattan Central Business District”), where 17 percent of City residents live;
John F. Kennedy International Airport (“JFK”); and LaGuardia Airport
(“LaGuardia”) (M23-34[¶4]; T131-32[¶4]).5 Given the resulting shortage of
yellow taxi street-hail service in the Bronx, Brooklyn, Northern Manhattan,
Queens, and Staten Island, residents of and visitors to those communities have
“turned to the underground market of FHVs [i.e., for-hire vehicles, many of which
are “livery” vehicles] illegally responding to street hails” for approximately
4 See ww.nyc.gov/html/tlc/downloads/pdf/avg_med_price_2012_december.pdf.
5 For reasons explained below (at page 16), the Act describes these three areas as the “HAIL
Exclusionary Zone.” Chapter 9 § 4(c).
12
100,000 street-hail trips per day (M24-25[¶¶5-10]; T132-33[¶¶5-10]).6
Unequipped and unregulated for street-hail service, livery cars lack established fare
structures, metered prices, GPS locators (useful for recovering lost property), and
standard procedures for addressing passenger complaints (M28[¶20]; M170;
T136[20]).
Both yellow taxis and for-hire vehicles transport passengers to destinations
outside the five boroughs, including Nassau and Westchester counties,
Connecticut, and New Jersey (M1067-68[¶¶16-19]; M1069[¶26]; M1083[¶8];
M1087[¶5]; M1091[¶6]; M1146[¶16]; M1151[¶6]; M1202[¶6]; M1231-32; T1450-
51[¶¶16-19]; T453[¶26]; T1466[¶8]; T1470[¶5]; T1464[¶6]; T2158-59; 35 RCNY
§ 54-17(g) [prescribing yellow taxi fares for out-of-city trips, e.g., to Newark
Airport]; www.nyc.gov/html/tlc/html/faq/faq_pass.shtml#17 [describing yellow
taxi fares for out-of-city trips, e.g., to Connecticut and New Jersey]).
Wheelchair-dependent people living in and visiting New York City are also
underserved by yellow taxis. While approximately 60,000 New Yorkers (or .73%
of the New York City population) use wheelchairs, only approximately 230 yellow
taxis are wheelchair-accessible, even though holders of standard medallions are
6 The TSA plaintiffs allege that “150,000 riders per day resort to illegal street hails” (34[¶84]).
13
free to modify their taxicabs to render them wheelchair-accessible. See Noel v.
New York City Taxi & Limousine Comm’n, 687 F.3d 63, 66 & n.3 (2d Cir. 2012).
On December 21, 2011, Governor Cuomo signed into law Chapter 602 of
the Laws of 2011, the pre-amended version of the Act at issue here. The New
York Legislature enacted the Act, as amended, in February 2012. The New York
State Senate Introducer’s Memorandum in Support of Chapter 9 of the Laws of
2012 (the “Introducer’s Memorandum”) identified the “three persistent mobility
problems” prompting the Act: the lack of accessible vehicles for disabled people;
“nearly non-existent taxi availability” in the outer boroughs; and the insufficient
supply of taxis in the Manhattan Central Business District.
1. Legislative findings.
Chapter 9, section 1 of the Act contains detailed Legislative findings. First,
the Legislature found and declared that “the public health, safety and welfare of the
residents of the state of New York traveling to, from and within the City of New
York is a matter of substantial state concern, including access to safe and reliable
mass transportation such as taxicabs.” Chapter 9 § 1. “The majority of residents
and non-residents of the city of New York,” the Legislature explained, “do not
currently have sufficient access to legal, licensed taxicabs available for street hails
in the city of New York.” Id.
14
“Additionally,” the Legislature found and declared, “it is a matter of public
health, safety and welfare to ensure adequate and reliable transportation accessible
to individuals with disabilities in the city of New York.” Chapter 9 § 1. The
Legislature noted that less than two percent of the City’s “approximately thirteen
thousand yellow taxicabs is accessible to individuals with disabilities, and an even
smaller percentage of the city’s approximately twenty-three thousand livery
vehicles is accessible.” Id. This supply of accessible vehicles, the Legislature
found, “is insufficient to provide adequate and reliable transportation for the
residents of and the commuters and visitors to New York city who have disabilities
and therefore inhibits their basic daily activities.” Id. “This lack of accessible
vehicles,” the Legislature added, “prevents individuals with disabilities from being
able to rely on the street hail system to get to a destination quickly, particularly in
an emergency, or to travel to a location not near a subway or bus stop.” Id.
The Legislature concluded its findings by reiterating that “[i]mproving
access to mass transportation, including taxicabs, for the residents of and the
commuters and visitors to New York city furthers these matters of substantial state
concern.” Chapter 9 § 1.
To remedy the identified transportation deficiencies, the Legislature
authorized the creation of three new, and related, transportation initiatives: the
15
“HAIL License Program;” the “Accessible Taxicab Program;” and the “Disabled
Accessibility Plan.”
2. The HAIL License Program.
The HAIL License Program authorizes the TLC to issue, over a period of
three years or more, up to 18,000 Hail Accessible Inter-borough Licenses (“HAIL
licenses”). Chapter 9 § 5(a). Under the Act, HAIL-licensed vehicles may only
respond to street hails in northern Manhattan and the other four boroughs,
exclusive of JFK and LaGuardia (together, “the HAIL Zone”). Id. §§ 4(b-c), 25.
Twenty percent of HAIL-licensed vehicles must be wheelchair-accessible.
Chapter 9 § 5(b). “[F]or every block of one thousand HAIL licenses issued,” the
Act specifies, “the twenty percent requirement must be met prior to the issuance of
any additional HAIL licenses.” Id. To promote the introduction of accessible
vehicles into the HAIL fleet, the TLC must provide purchasers of accessible HAIL
licenses either (1) grants; or (2) “accessible vehicles on affordable and financially
feasible terms.” Id. § 9(a-b). Purchasers of accessible HAIL licenses may apply to
the TLC for grants of up to $15,000, “which shall be applied towards the costs of:
(i) purchasing an accessible vehicle for use as a HAIL vehicle; or (ii) retrofitting
a vehicle to be an accessible vehicle for use as a HAIL vehicle.” Id. § 9(b). “The
total amount of such grants shall not exceed fifty-four million dollars.” Id.
16
In accordance with rules promulgated by the TLC, HAIL licensees must
ensure their vehicles meet State and TLC safety standards, 35 RCNY §§ 82-30, 82-
31; utilize taximeters, id. § 82-38(a); charge metered fares, id. § 82-26(a); post
permanent plaques displaying the vehicle’s HAIL license number and information
for registering rider complaints, id. § 83-33(g); and install devices for the
electronic collection and transmission of trip data, including the “date, time and
location” of passenger pick-ups and drop-offs, id. §§ 82-22(a)(1), 82-41, 82-42,
83-31(c)(1-2, 5[iii]).7
During the first three years of the HAIL License Program, the TLC may
issue HAIL licenses only to drivers or owners of for-hire vehicles “who have been
licensed by the TLC for at least one year and are in good standing with the TLC.”
Chapter 9 § 5(b). Approximately 60,000 licensed for-hire vehicle drivers and
owners fall into this category (M420[¶26]; M421[¶29]; T138[¶26]; T139[¶29]).
Three months after the initial issuance of HAIL licenses, the TLC may issue any
remaining accessible-vehicle HAIL licenses (from an initial block of 1200)
“without regard to such restrictions in a manner to be determined by the TLC.”
Chapter 9 § 5(b). “HAIL licenses shall be issued for a fee . . . of one thousand five
7 Chapter 83 of the TLC’s rules is available at www.nyc.gov/html/tlc/downloads/pdf/2012
rulebook_ch83_prom.pdf.
17
hundred dollars in the first issuance, three thousand dollars in the second issuance
and four thousand five hundred dollars in the third issuance.” Id. § 5(d).8
With certain restrictions, HAIL licenses are transferable to owners of TLC-
licensed for-hire vehicles or for-hire drivers “in good standing with the TLC.”
Chapter 9 §§ 5(c), 7. An “individual or entity may only own one HAIL license,”
but up to five “HAIL licenses restricted to accessible vehicles.” Id. § 5(c).
Under the HAIL License Program, every HAIL-licensed vehicle must be
affiliated with one of up to 450 permitted HAIL “bases.” Chapter 9 § 3. The TLC
must limit the initial issuance of HAIL base permits to for-hire vehicle base
stations that (1) were established under Code section 19-511; (2) have been
operating for least three years; and (3) are in good standing with the TLC. Id.
After the initial and second issuance periods, the TLC will allow “any person or
Business Entity” to apply for a base permit. See 35 RCNY § 59B-04.1(d)(1),
available at www.nyc.gov/html/tlc/downloads/pdf/2012rulebook_ch59_prom.pdf.
HAIL base permits, which cost $3,000, are non-transferable. Chapter 9 § 3.
The Act further amends Tax Law section 1281 to impose upon HAIL bases
– just as section 1281 already imposes upon taxicab owners – a tax of fifty cents on
8 The sale of 18,000 HAIL licenses at an average price of $3,000 would generate fifty-four
million dollars in revenue. As noted above (at page 16), section 9(a-b) of the Act authorizes the
TLC to provide up to fifty-four million dollars in grants to encourage the purchase of accessible-
vehicle HAIL licenses.
18
all trips “originat[ing] in the city and terminat[ing] anywhere within the territorial
boundaries of the [Metropolitan Commuter Transportation District].” Chapter 9
§ 14. Tax Law section 1288(c) designates the Metropolitan Transportation
Authority (the “MTA”) as the recipient of these tax revenues.
By amending Code section 19-506, the Act authorizes both the TLC and the
New York City Police Department to seize HAIL-licensed vehicles that respond to
street hails within the HAIL Exclusionary Zone. Chapter 9 §§ 25-26. The
available penalties for HAIL-licensed drivers who respond to street hails within the
HAIL Exclusionary Zone include (1) a $500 fine for the first violation; (2) a $750
fine for the second violation within two years; and (3) revocation of the driver’s
for-hire vehicle driver’s license for the third violation within ten years. Id. § 25;
Code § 19-506(k)(i). The Act also amends section 1220-b of the New York
Vehicle and Traffic Law (“VTL”) to increase the fines (from a minimum of $500
and a maximum of $1,200 to a minimum of $750 and a maximum of $1,500) a
court may impose upon people found guilty of unlawfully soliciting ground
transportation services at airports, a class B misdemeanor. Chapter 9 § 24.
The Act further authorizes the New York State Police to “enforce any laws,
rules or regulations” regarding HAIL-licensed vehicles, and the Port Authority
Police Department to do the same regarding HAIL-licensed vehicles at Port
Authority facilities. Chapter 9 § 23. Under the Act, the “commission or tribunal
19
that adjudicates liability” for a violation of HAIL laws, rules or regulations “shall
pay the money owed and collected to the entity that issued the summons for the
violation.” Id.
Finally, the Act authorizes the TLC to implement both aspects of the HAIL
License Program – the issuance of HAIL licenses and the issuance of HAIL base
permits – without “engag[ing] in any review provided for by any provision of law
or mak[ing] or obtain[ing] any determination not expressly required by” the Act.
Chapter 9 §§ 3, 5(h). Before proceeding to the second and third issuances of HAIL
licenses, however, the TLC must prepare, and submit to City Council and the State
Department of Transportation for comments, a “HAIL market analysis” examining
“HAIL vehicle rider demand, shortages, and the need for adequate and affordable
transportation,” as well as several specified topics. Id. § 6.
3. The Accessible Taxicab Program.
Once the TLC has made HAIL licenses and base permits available, the
Accessible Taxicab Program authorizes the TLC (acting at the behest of the Mayor
alone) to issue, and sell at sealed-bid public auction, up to 2,000 taxicab licenses
for wheelchair-accessible taxicabs. Chapter 9 § 8. Along with other licensed
taxicabs, the new accessible taxicabs will enjoy “the exclusive right . . . to pick up
passengers via street hail” in the HAIL Exclusionary Zone. Id. § 11. All licensed
taxicabs will also retain authorization to pick up street hails in the HAIL Zone. Id.
20
4. The Disabled Accessibility Plan.
The TLC cannot issue more than four hundred new accessible taxicab
licenses until the State Department of Transportation approves the TLC’s
“Disabled Accessibility Plan.” Chapter 9 §§ 8, 10(d). After consulting with
disability rights advocates, the TLC must prepare a Disabled Accessibility Plan
that includes (1) plans for phasing accessible vehicles into “the taxicab, for-hire
vehicle and HAIL vehicle transport system;” (2) plans for making accessible for-
hire vehicles available “based on need within geographic areas of the city of New
York;” and (3) any recommended change in the percentage of HAIL licenses that
should be issued to accessible vehicles. Id. § 10(a-c). The TLC must request and
consider City Council’s comments before submitting its Disabled Accessibility
Plan to the State Department of Transportation. Id. § 10(c).
5. Revenues anticipated from implementation of the Act.
In its April 2012 Enacted Budget Financial Plan for Fiscal Year 2013, the
State anticipated that by the end of State Fiscal Year 2014, the 2,000 taxicab
licenses issued under the Accessible Taxicab Program would generate
approximately $6 million in additional revenue for the MTA. See New York State
Budget Report, http://publications.budget.ny.gov/budgetFP/2012-13Enacted
Budget.pdf, at 45. In addition, the City expects the issuance of 2,000 new
21
medallions to generate $1 billion for the City’s general fund (M267[¶20]; M506-
08; M803; T740-43; T1189; T2086 n.2).
6. The Act’s interpretive provisions.
The Act contains two interpretive provisions relevant here. First, the Act
“shall be construed as a whole, and all parts of it are to be read and construed
together.” Chapter 9, § 3. Second, if any court of competent jurisdiction
adjudicates any part of the Act invalid, “the remainder of th[e Act] shall be
invalidated and shall be deemed to have not taken effect.” Id.
7. The Act’s expected benefits.
By “greatly increas[ing] the availability of accessible taxicabs and for-hire
vehicles,” the Introducer’s Memorandum explains, the Act “would substantially
improve the ability of City residents and visitors, including persons with
disabilities, to get where they need to go quickly and easily, without having to own
a car, and would make living in and traveling to New York City more accessible,
affordable, and enjoyable.” Beyond those benefits, the Act should effectively
legalize the underground market for street-hail service in the HAIL Zone; enhance
rider safety; provide consistent metered – rather than individually-negotiated –
fares for HAIL Zone passengers; and increase the minimum number of wheelchair-
accessible taxicabs from 231 (or 1.7% of 13,237) to 2,231 (or 14% of 15,237)
(M28-29[¶¶20-23]; M32[¶31]; T136-37[¶¶20-23]; T140[¶31]).
22
8. The TLC’s planned implementation of the Act.
On April 19, 2012, TLC approved rules implementing the HAIL License
Program. The rules were scheduled to take effect on June 2, 2012. The TLC
intended to start issuing HAIL base permits and HAIL licenses on June 4, 2012
(M441[¶3]; T665[¶3]). With respect to the Accessible Taxicab Program, the TLC
intended to issue and auction 200 licenses for wheelchair-accessible taxicabs in
July 2012, 200 more in September 2012, and the remaining 1600 in 2013 and 2014
(M443[¶12]; T667[¶12]).
E. Procedural History.
The MTBOT plaintiffs commenced their action (against the City only) on
April 18, 2012, three months after the Legislature enacted the Act (M36-68).
Approximately ten days later, the TSA plaintiffs commenced their action against
(1) the City; and (2) the State of New York, the New York State Assembly, the
New York State Senate, and New York Governor Andrew Cuomo (collectively,
the “State”) (T15-44). Naming both the City and the State as defendants, the
GNYTA plaintiffs commenced their action on May 24, 2012 (G28-58).9
9 By Orders entered June 21, 2012, Supreme Court granted the motion of the Livery Base
Owners Inc. and the Excellent Car Service Inc. to intervene as defendants in all three actions.
Subsequently, by Order entered June 26, 2012, Supreme Court granted the motions of The
Livery Round Table, Big East Multi Group Corp., and NJM Inc. to intervene as plaintiffs in
MTBOT v. Bloomberg.
23
By Order dated June 1, 2012, and entered August 2, 2012, Supreme Court
issued a decision and order (one paper) temporarily enjoining the City from
“implementing any aspect of the [Act],” conditional upon plaintiffs collectively
posting a bond of $600,000 by June 7, 2012 (G231-34; M795-98; T1178-81).
DECISION BELOW
On cross-motions for summary judgment, Supreme Court rejected the Act as
inconsistent with the Constitution’s Home Rule, Double Enactment, and Exclusive
Privileges clauses (G361-93; M1210-42; T2137-69). As explained below,
Supreme Court based its rulings upon faulty rationale and misconstrued facts.
RELEVANT CONSTITUTIONAL
PROVISIONS AND STATUTES
New York Constitution Article III
§ 17. The legislature shall not pass a private or local bill
in any of the following cases
* * *
Granting to any private corporation, association or
individual any exclusive privilege, immunity or franchise
whatever.
* * *
New York Constitution Article IX
§ 2. Powers and duties of legislature; home rule powers of
local governments; statute of local governments
24
* * *
(b) Subject to the bill of rights of local governments and
other applicable provisions of this constitution, the
legislature:
(1) Shall enact, and may from time to time amend, a
statute of local governments granting to local
governments powers including but not limited to those of
local legislation and administration in addition to the
powers vested in them by this article. A power granted in
such statute may be repealed, diminished, impaired or
suspended only by enactment of a statute by the
legislature with the approval of the governor at its regular
session in one calendar year and the re-enactment and
approval of such statute in the following calendar year.
(2) Shall 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 only (a) 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 . . . .
* * *
§ 3. Existing laws to remain applicable; construction;
definitions
(a) Except as expressly provided, nothing in this article
shall restrict or impair any power of the legislature in
relation to:
* * *
(3) Matters other than the property, affairs or government
of a local government.
* * *
25
New York Statute of Local Governments
§ 10. Grants of powers to local governments
Except as otherwise specifically provided in this section,
each of the following powers, which shall include but not be
limited to those of local legislation and administration, is
hereby granted to each local government . . . :
1. The power to adopt, amend and repeal ordinances,
resolutions, and rules and regulations in the exercise of
its functions, powers and duties.
* * *
§ 11. Reservation of power by legislature
The legislature hereby excludes from the scope of the grants
of powers to local governments in this statute and reserves
to itself the right and power to enact any law described in
this section notwithstanding the fact that it repeals,
diminishes, impairs or suspends a power granted to one or
more local governments in this statute:
* * *
4. Any law relating to a matter other than the property,
affairs or government of a local government.
* * *
26
POINT I
BECAUSE THE ACT FURTHERS, AND
BEARS A DIRECT AND
REASONABLE RELATIONSHIP TO,
THE STATE’S SUBSTANTIAL
CONCERN WITH NEW YORK CITY’S
FOR-HIRE TRANSPORTATION
SYSTEM, THE ACT DID NOT
REQUIRE A HOME RULE MESSAGE.
Because the Legislature enacted the Act in furtherance of the State’s
substantial concern with New York City’s for-hire transportation system, and
because the Act bears a direct and reasonable relationship to that concern, the Act
did not require a home rule message from City Council under Article IX, section
2(b)(2) of the State Constitution (the “Home Rule Clause”). Supreme Court
reached its contrary determination erroneously (G373-87; M1222-36; T2149-63).
The State Constitution authorizes the Legislature, “[s]ubject to the bill of
rights of local governments” and other applicable constitutional provisions, “to act
in relation to the property, affairs or government of any local government . . . by
general law.” N.Y. Const. Art. IX § 2(b)(2). “[I]n terms and in effect,” general
laws apply “alike to . . . all cities . . . .” Id. § 3(d)(1).
By contrast, a “special law” applies, “in terms and in effect . . . to one or
more, but not all . . . cities.” N.Y. Const. Art. IX § 3(d)(4). In relevant part, the
Home Rule Clause authorizes the Legislature “to act in relation to the property,
27
affairs or government of any local government . . . by special law” only upon
“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 . . . .”
N.Y. Const. Art. IX § 2(b)(2). The local legislative requests contemplated by the
Home Rule Clause are called “home rule messages.”
Except as expressly provided, however, nothing in Article IX “restrict[s] or
impair[s]” the power of the State Legislature regarding “[m]atters other than the
property, affairs or government of a local government.” N.Y. Const. Art. IX
§ 3(a)(3).
Accordingly, this Court has held that a home rule message is not required for
a category of special State laws that relate to the “property, affairs or government”
of a local government. A home rule message is unnecessary if the special State
law was (1) “enacted in furtherance of” a “substantial State concern” and
(2) “bears a direct and reasonable relationship to” the substantial State concern.
Patrolmen’s Benevolent Ass’n v. City of New York, 97 N.Y.2d 378, 386, 388
(2001) (“PBA II”); see also Adler v. Deegan, 251 N.Y. 467, 491 (1929) (Cardozo,
Ch. J., concurring) (no home rule message required if special law affects the
“property, affairs or government of a local government” and involves “in a
substantial degree a matter of state concern”); Hotel Dorset Co. v. Trust for
Cultural Resources, 46 N.Y.2d 358, 373 (1978) (“If the subject matter of the
28
legislation is of sufficient importance to the State generally, the legislation cannot
be deemed a local law even though it deals directly with the affairs of a
municipality.”) (citing Adler, 14 N.Y.2d at 494).
Applying the “substantial state concern” test, this Court has upheld State
laws involving the City’s commuter tax on State residents who live outside the
City, City of New York v. State, 94 N.Y.2d 577, 591-92 (2000); the “orderly
resolution of collective bargaining disputes involving [New York City] police and
fire bargaining units . . . to enhance public safety and prevent the loss or
interruption of vital public services,” PBA II, 97 N.Y.2d at 387-88; “the public
health and safety of the people of the City of New York,” Kelley v. McGee, 57
N.Y.2d 522, 538 (1982) (citing Adler, 251 N.Y. 467); New York City’s payment of
its mandatory pension or retirement obligations, Bugeja v. City of New York, 24
A.D.2d 151 (2d Dept. 1965), aff’d without opin., 17 N.Y.2d 606 (1966); and “the
protection of the resources of the Adirondack Park region,” Wambat Realty Corp.
v. State, 41 N.Y.2d 490, 493-95 (1977).
Similarly here, the Act was enacted in furtherance of, and bears a direct and
reasonable relationship to, the State’s substantial concern with New York City’s
for-hire transportation system. Accordingly, the Act did not require a home rule
message from City Council.
29
(A)
In Denying the Existence of the State’s
Substantial Interest in New York City’s
For-Hire Transportation System,
Supreme Court Overlooked this Court’s
Precedents and Several State Statutes.
(1)
The State has a substantial interest in
New York City’s for-hire transportation
system.
The State’s substantial interests extend to the provision of adequate taxi and
for-hire vehicle services to disabled and non-disabled people who live in and visit
New York City’s five boroughs.
As an initial matter, the City “hold[s] the fee of streets for the benefit of the
public,” i.e., “the whole People of the state,” not only City residents. People v.
Grant, 306 N.Y. 258, 260 (1954); see also New York State Pub. Employees Fed’n
v. Albany, 72 N.Y.2d 96, 101 (1988) (same); City of New York v. Rice, 198 N.Y.
124, 128 (1910) (same). The public’s right to use New York streets is “absolute
and paramount.” Employees Fed’n, 72 N.Y.2d at 101 (internal citations omitted).
Notwithstanding constitutional and statutory delegations of power to
municipalities to regulate the highways within their boundaries, the Legislature
retains authority to enact laws promoting the public’s use of municipal streets.
Employees Fed’n, 72 N.Y.2d at 100-01. More specifically, even where the State
30
delegates authority to the City “in respect to the carriage of persons for hire” upon
City streets, the State may promote the use of those streets by “the people of the
whole State” through legislation designed to improve the provision of
transportation for hire in the City. People v. Kerr, 27 N.Y. 188, 213-14 (1863); see
also Employees Fed’n, 72 N.Y.2d at 101 (citing Kerr with approval); Yellow
Taxicab Co. v. Gaynor, 159 A.D. 893 (1st Dept. 1913) (Ingraham, P.J., concurring)
(recognizing City’s possession of delegated authority to regulate taxis).
Based upon “custom, tradition and practice,” moreover, this Court considers
“[t]ransportation . . . , like health and education,” a matter of State concern.
Osborn v. Cohen, 272 N.Y. 55, 59 (1936); see also Bugeja, 24 A.D.2d at 152
(identifying “transportation” as an area of “undoubted State concern”), aff’d
without opin., 17 N.Y.2d 606. The State Legislature concurs: “It is hereby
declared to be the policy of the state of New York that adequate, safe and efficient
transportation facilities and services at reasonable cost to the people are essential to
the economic growth of the state and the well-being of its people . . . .” N.Y.
Transp. Law § 10.
The State’s substantial interests extend to for-hire transportation services.
Since 1922, the State Legislature has required everyone “engaged in the business
of carrying or transporting passengers for hire in any motor vehicle . . . which shall
be operated over, upon or along any public street or highway of the state of New
31
York” to file a surety bond or proof of insurance with a State agency. New York
VTL § 370(a); see also 35 RCNY § 58-04(g) (medallion applicants “must have
liability insurance coverage by bond or policy as required by the State of New
York”); American Transit Ins. Co. v. Sartor, 3 N.Y.3d 71, 78 n.5 (2004)
(summarizing legislative history of insurance requirement); Packard v. Banton,
264 U.S. 140, 141 (1924) (rejecting constitutional challenge to original version of
insurance statute).
The State also has a substantial interest in New York City rapid transit,
which affects “not only the people of that city, but of the whole state.” McAneny v.
Board of Estimate, 232 N.Y. 377, 393 (1922); see also id. at 394 (State legislature
may fulfill its duty to provide for rapid transit “irrespective of the city authorities,
since it concern[s] the whole state just as much as the maintenance of highways or
the management of other public utilities”). Thirty years after McAneny, this Court
invoked the State’s interest in New York City transit to uphold State statutes
creating the New York City Transit Authority, which authorized the City to turn
over its transit system to the Authority, but were enacted without a home rule
message. See Salzman v. Impellitteri, 203 Misc. 486 (Sup. Ct., Special Term, N.Y.
Cty.), aff’d without opin., 281 A.D. 1023 (1st Dept.), aff’d as modified, 305 N.Y.
414 (1953).
32
The 1935 joint resolution of the State Assembly and Senate confirms that the
State’s interest in transportation extends to vehicles providing transportation for
hire in New York City. “Safe, adequate, and efficient taxicab operation at just and
reasonable rates,” the joint resolution declares, “is an indispensible transportation
service auxiliary to rapid transit and other transportation systems in large cities in
this State.” Rep. of Joint Leg. Comm. on Taxicab Operation and Fares, Legis.
Doc. No. 83, at 3 (1936). Put simply, “the taxicab industry in New York forms a
vital part of the city’s transportation system.” Rudack v. Valentine, 163 Misc. 326,
329 (Sup. Ct., Special Term, N.Y. Cty.), aff’d without opin., 274 N. Y. 615 (1937);
see also New York City Code of Ordinances Chapter 27-a(1) (1937) (“the taxicab
industry in the city of New York is vested with a public interest because it is a vital
and integral part of the transportation facilities of the City of New York”); L 1937,
ch 929 (enacting Code of Ordinances as New York City Administrative Code).10
Further confirming the point, the State Legislature found in 2006 that “for-
hire transportation services” constitute “a major source moving people in and
around the city of New York,” and provide “over one million passenger rides per
10 Just as the MTBOT plaintiffs admit that “the [yellow cab] industry is a critical component of
mass transportation in New York City” (M300), the intervenor-plaintiffs concede that “[l]ivery
service is a vital part” of the City’s “transportation network” (T1143[¶8]). As in Chazon, LLC v.
Maugenest, 19 N.Y.3d 410, 414 (2012), this Court may take judicial notice that MTA subways
and buses transport approximately seven million daily riders, while approximately 55,000 TLC-
licensed vehicles transport over 1.5 million daily passengers. See www.mta.info/nyct/facts/
ffintro.htm; www.nyc.gov/html/tlc/downloads/pdf/annual_report_2011.pdf, at 8.
33
day” in the City alone. L 2006, ch 549, § 1. Based in part upon that finding, the
Legislature amended section 498 of the Vehicle and Traffic Law, to allow for-hire
vehicles, if licensed by certain jurisdictions to provide pre-arranged transportation,
to transport passengers between licensing jurisdictions. See VTL § 498(2)(a).
Transportation for disabled people in New York City is also a matter of
substantial State concern. In 1984, the Legislature declared it State policy to
“provide opportunities for its transportation disabled to participate fully in the
economic, educational, recreational and cultural activities available to the rest of its
population.” L 1984, ch 498, § 1. The Legislature found “essential to this
endeavor the availability of and access to transportation facilities and services.”
Id. “This concern is particularly heightened in the city of New York,” the
Legislature noted, “where mobility for the general population is almost entirely
dependent on access to public transportation.” Id.
To further the articulated policy, the Legislature enacted Transportation Law
section 15-b, entitled “New York city accessible transportation system; New York
city transportation disabled committee.” Section 15-b created the New York City
transportation disabled committee; ordered specified New York City rapid transit
stations to be made accessible to the disabled; and called for the development and
34
implementation of a plan “for the provision of paratransit transportation in each
county wholly contained within the city of New York.”11
In promulgating the Act at issue here, the Legislature explicitly reiterated the
State’s substantial concern with the provision of adequate and reliable
transportation to State residents and visitors – in particular, disabled residents and
visitors – traveling “to, from and within” the City of New York. Chapter 9 § 1.
Thus, as recognized in common law, case law, and a series of legislative
enactments, the State has a substantial concern with the provision of adequate and
reliable taxi and for-hire vehicle service to disabled and non-disabled residents and
visitors throughout New York City’s five boroughs.
(2)
Supreme Court wrongly rejected the
State’s substantial interest in New York
City’s for-hire transportation system.
Without even mentioning this Court’s acknowledgment that transportation is
a matter of State concern, Osborn, 272 N.Y. at 59, Supreme Court erroneously
concluded that the State lacks a substantial interest in New York City’s for-hire
transportation system (G379-84; M1228-33; T2155-60).
11 Transportation Law section 15-b(1)(d) defines “[p]aratransit transportation” as “specialized
demand-responsive, shared-ride revenue services provided to transport[] disabled persons on a
regular and continuing basis.” The Legislature enacted section 15-b without receiving a home
rule message from City Council.
35
(a)
Supreme Court premised its conclusion upon an artificial dichotomy
between matters of substantial State concern and “New York City ‘stuff’” (G382-
84; M1231-33; T2158-60). Although the State and localities each have their own
spheres of exclusive interests, “[a] zone . . . exists where State and city concerns
overlap and intermingle.” Adler 251 N.Y. at 489 (Cardozo, C.J., concurring); see
also Islip v. Cuomo, 64 N.Y.2d 50, 54-55 (1984) (State and local functions are
“essentially indivisible by any scientific method of classification”). Quoting Chief
Judge Cardozo’s opinion in Adler, this Court has recognized that State interests
may be “directly and substantially involved” in certain subjects, “though
intermingled with these, and perhaps identical with them, are concerns proper to
the city.” City of New York v. Patrolmen’s Benevolent Ass’n, 89 N.Y.2d 380, 390
(1996) (“PBA I”) (quoting Adler, 251 N.Y. 489-90).
Ignoring the grey zone between State and City interests, Supreme Court
viewed New York City’s for-hire transportation system as falling outside four
categories of substantial State interests: (1) State powers “enshrined” in the State
Constitution, such as the State’s taxing power; (2) the State’s long-acknowledged
police power to protect public health and safety; (3) “statewide uniformity”; and
(4) “matters that cross jurisdictional borders,” such as “railway traffic” (G382-33;
M2131-32; T2158-59). Supreme Court’s proposed taxonomy fails to account for
36
the State’s substantial interest in subjects such as mayoral succession, Radich v.
Council of Lackawanna, 61 N.Y.2d 652, 653 (1983); the maintenance of cultural
institutions, Hotel Dorset Co. v. Trust for Cultural Resources, 46 N.Y.2d 358, 373
(1978); and New York City’s ability to pay its mandatory pension and retirement
obligations, so as “to maintain an efficient, modern civil service system,” Bugeja v.
City of New York, 24 A.D.2d 151, 152 (2d Dept. 1965), aff’d without opin., 17
N.Y.2d 606 (1966).12
At any rate, Supreme Court failed to explain why, if cross-jurisdictional
issues are matters of substantial State concern, the State lacks a substantial interest
in New York City’s for-hire transportation system. As noted above (at page 13),
New York City taxis and for-hire vehicles often transport passengers across the
five-borough border (e.g., to Westchester and Nassau counties), as well as the State
border (e.g., to Connecticut and Newark Airport). Supreme Court even described
“New York City taxicabs a[s] arguably engaged in interstate commerce” (G385;
M1234; T2161).
Further undermining its rationale, Supreme Court acknowledged the State’s
substantial interest in New York City rapid transit, but linked that interest to “the
State-level [railway] transportation infrastructure governed by the [Metropolitan
12 As Supreme Court’s taxonomy properly reflects, however, a constitutional basis is not
required for every substantial State interest. See Wambat, 41 N.Y.2d at 495.
37
Transportation Authority]” and owned by the State (G379; G383; M1228; M1232;
T2155; T2159). In fact, this Court recognized the State’s substantial interest in
New York City rapid transit decades before the State acquired control of that
system (see page 32 above). Perhaps because of its historical error, Supreme Court
never addressed why, if New York City rapid transit constitutes a matter of State
concern, the State lacks a substantial interest in New York City’s for-hire
transportation system, which plays a vital role in the City’s overall transportation
system by providing service to over 1.5 million daily passengers (see page 33 n.10
above).
This Court should therefore reject Supreme Court’s proposed taxonomy of
substantial State interests as under-inclusive, inaccurate, and inconsistent.
(b)
Next, Supreme Court reasoned that because New York City “regulated its
own taxicab industry” for approximately 75 years, supposedly without State
involvement, the State cannot have a substantial interest in New York City’s for-
hire transportation system (G379-80; G384; M1228-29; M1233; T2155-56;
T2160). Under this Court’s decision in PBA II, however, the relevant test is
whether the State has a substantial interest in the subject of State legislation, not
whether the State or localities have traditionally or historically regulated the
subject matter at issue. 97 N.Y.2d at 386.
38
Applying its test in PBA II, this Court, citing the State’s interest in fostering
the orderly resolution of collective bargaining disputes involving police and fire
unions, rejected a home rule challenge to a State law ending the State’s thirty-year
history of deferring to the City’s delegated authority to resolve those disputes. 97
N.Y.2d at 382-83, 387-88. Similarly, when this Court rejected a home rule
challenge to a State law effectively repealing the City’s tax on nonresident
commuters, this Court focused on the State’s interest in easing the tax burden on
commuters, not the thirty-year-long existence of the City’s commuter tax. City of
New York v. State, 94 N.Y.2d 577, 587, 592 (2000).
At any rate, Supreme Court overlooked two key historical facts. First, the
City has regulated its taxicab industry pursuant to revocable delegations of State
authority. See N.Y. Gen. Mun. Law § 181(1); 1938 City Charter, § 436; L 1910,
ch 262, § 51; L 1897, ch 378, § 49; People v. Kerr, 27 N.Y. 188, 213-14 (1863).
Since at least 1897, regulatory authority has rested with a municipal or mayoral
agency, pursuant to delegations of authority from the State directly, or from a City
legislative body exercising State-delegated authority (see pages 6-9 above). The
Legislature’s prior delegations of authority neither weakened the State’s interest in,
nor reduced the State’s sovereign authority to enact legislation regarding, the use
of New York City streets to transport passengers for hire. See Kerr, 27 N.Y. at
213-14; see also City of New York, 94 N.Y.2d 577 (State may, without home rule
39
message, pass special law rescinding municipal taxing authority granted thirty-
three years earlier). Supreme Court’s accusation – that the Legislature simply
“wrench[ed] from the hands of City government” the provision of taxi service in
New York City “and handed [it] over to the State” (G379; M1228; T2155) –
reflects both a misreading of history and a misconception of foundational legal
principles governing the relationship between the State and its localities.
Second, Supreme Court overlooked the Legislature’s history of enacting –
without home rule messages – laws in fields closely related to New York City’s
for-hire transportation system (see G379-80; G384; M1228-29; M1233; T2155-56;
T2160). Beyond expressing general concern with the provision of adequate
transportation services to disabled and non-disabled people within the State (see
pages 31, 34-35 above), the Legislature has passed laws regarding (1) for-hire
vehicle transportation, see VTL § 370(a); (2) New York City for-hire vehicle
transportation, see VTL § 498(2)(a); (3) New York City ground transportation, see,
e.g., L 2007, ch 384 (establishing a “a New York city traffic congestion mitigation
committee” to review plans for reducing New York City traffic congestion); L
1992, ch 853-54 (van transportation); L 1993, ch 487 (same); and
(4) transportation for disabled people in New York City, see L 1984, ch 498;
Transp. Law § 15-b.
40
Even absent a history of such laws, however, the State would be free to
enact legislation advancing substantial State concerns, regardless of whether the
State’s concern “directly touch[es] upon the most basic of local interests.” Islip, 64
N.Y.2d at 56-57; see also Kelley, 57 N.Y.2d at 538 (same, citing Wambat Realty
Corp. v. State, 41 N.Y.2d 490, 494 [1977]); Board of Educ. v. City of New York, 41
N.Y.2d 535, 542 (1977) (“legislation dealing with matters of State concern even
though of localized application and having a direct effect on the most basic of local
interests does not violate the constitutional home rule provisions”). Indeed, “the
State may override local or parochial interests when State concerns are involved.”
Wambat, 41 N.Y.2d at 498; see also Adler, 251 N.Y. at 490-91 (Cardozo, Ch. J.,
concurring) (where both the State and the City are concerned with a particular
subject matter, “the [C]ity is free to act until the State has intervened”). Applying
these principles to reject a home rule challenge in Board of Education, this Court
held that the State’s substantial interest in education – reflected in a statute
requiring the City to appropriate a certain percentage of its expense budget for
public elementary and secondary education – overrode the City’s interest in
determining its own budget appropriations. 41 N.Y.2d 535.
Finally, Supreme Court denied that the flow of business travelers and
tourists into, within, and out of New York City – often via taxi – affords the State a
substantial interest in New York City’s for-hire transportation system (G383;
41
M1232; T2159). Absent evidence that an inadequate taxi supply risked New York
City’s “exalted place in world commerce and tourism,” Supreme Court deemed
Albany’s “paternalism . . . ill-founded” (id.). Supreme Court’s view is inconsistent
with this Court’s recognition of the State’s substantial interest in attracting
commerce and tourism to New York City. See, e.g., City of New York, 94 N.Y.2d
at 590 (making New York City “more attractive for investment and growth” has
“obvious implications for the State”); Hotel Dorset, 46 N.Y.2d at 373 (even if
State legislation preserved only New York City’s Museum of Modern Art, “the
preservation of that one facility is of importance to the citizens of the State as well
as the city”); see also Kelly-Sullivan, Inc. v. Moss, 174 Misc. 1098, 1103 (Sup. Ct.,
N.Y. Cty.) (State law regulating ticket brokers would involve a matter of
substantial State concern even if “primarily designed to safeguard the interests of
the millions of inhabitants of the city of New York and of its hundreds of
thousands of visitors), aff’d without opin., 260 A.D. 921 (1st Dept. 1940).
Thus, contrary to Supreme Court’s rationale, the City’s history of taxicab
regulation does nothing to undermine the State’s substantial interest in New York
City’s for-hire transportation system.
(c)
Further erring, Supreme Court imposed upon the defendants the burden to
demonstrate a substantial State interest justifying one particular provision of the
42
Act: Chapter 9 section 8 (G378-79; G387; M1227-28; M1236; T2154-55; T2163).
In section 8, the Legislature authorized the TLC to issue and sell 2,000 new
accessible medallions, contingent upon the satisfaction of conditions including the
TLC’s receipt of the Mayor’s administrative authorization.
As noted above (at page 28-29 and 38), the relevant home rule question is
whether “the subject matter of the statute” – not every sentence and provision of
the statute – “is of sufficient importance to the State generally to render it a proper
subject of State legislation.” Kelley, 57 N.Y.2d at 538 (emphasis added); see also
PBA II, 97 N.Y.2d at 387-88 (to survive home rule challenge, State law must bear
reasonable relationship to substantial State interest) (citing, inter alia, Kelley, 57
N.Y.2d at 538); PBA I, 89 N.Y.2d at 391 (“for the State to enact a special law on
local affairs without complying with home rule requirements, its interest in the
subject matter must be substantial”). Undisputedly, the subject matter of the Act is
New York City’s for-hire transportation system. That subject is a matter of
substantial State concern (see pages 30-35 above).
Moreover, as further explained below (at pages 50-54), the Act’s delegation
of administrative authority to the Mayor is just one of the reasonable means the
Legislature chose to achieve its transportation objective: the improvement of New
York City’s for-hire transportation system. Supreme Court even conceded that the
Legislature delegated administrative authority to the Mayor only “incidentally”
43
(G381; M1230; T2157), as one element of a comprehensive plan for achieving the
Legislature’s objective. Even where the Legislature intrudes upon local powers as
a means of achieving proper State objectives, this Court’s home rule precedent
does not require a substantial State interest to justify each of the Legislature’s
chosen means. See, e.g., Islip, 64 N.Y.2d at 56-57 (“legislation on matters of State
concern even though of localized application and having a direct effect on the most
basic of local interests does not violate the constitutional home rule provisions”)
(internal quotation and citations omitted); Robertson v. Zimmermann, 268 N.Y. 52,
58-59 (1935) (rejecting home rule challenge to State law whose “prime purpose . . .
was not to deprive the city of any of its [home rule] powers or prerogatives . . . but
rather to” advance the State’s substantial interest in health); New York v. Lawrence,
250 N.Y. 429 (1929) (rejecting home rule challenge to State law involving matter
of public concern that incidentally encroached upon municipal property, affairs, or
government).
Indeed, parsing the Act sentence by sentence, requiring a “substantial State
interest” justification for the means the Legislature chose to achieve its legitimate
objectives, contravenes two applicable rules of statutory construction. First, the
Legislature explicitly instructed courts to construe the Act “as a whole,” with “all
parts of it . . . read and construed together.” Chapter 9, § 3. Second, Supreme
Court should have presumed the Act’s constitutionality, Hotel Dorset, 46 N.Y.2d
44
at 370, and utilized “every reasonable mode of reconciliation of the [Act] with the
Constitution,” Cohen v. Cuomo, 19 N.Y.3d 196, 201-02 (2012), rather than
erecting unique new hurdles for the defendants to surmount.
For all of these reasons, Supreme Court erroneously denied the existence of
a substantial State interest in New York City’s for-hire transportation system.
(B)
Supreme Court Erroneously Rejected the
Legislature’s Stated Purpose for Enacting
the Act: to Advance the State’s
Substantial Interest in New York City’s
For-Hire Transportation System.
To determine whether the Legislature enacted the Act in furtherance of “a
substantial State concern,” Supreme Court should have relied “upon the stated
purpose and legislative history of the [Act],” without attempting to review the
“wisdom” of the Legislature’s determination. PBA II, 97 N.Y.2d at 388 (internal
quotations and citations omitted); see also PBA I, 89 N.Y.2d at 392 (this Court has
“consistently relied upon the stated purpose and legislative history of the act in
question to find, or reject, a substantial State concern”); City of New York, 94
N.Y.2d at 591 (came, citing PBA I, 89 N.Y.2d at 391); see, e.g., Kelley, 57 N.Y.2d
at 539-40 (the “objectives behind the statute . . . demonstrate the strength of the
State’s interest”).
45
The Legislature explicitly declared the purpose of the Act: to advance the
State’s substantial interest in improving the availability of adequate and reliable
for-hire transportation to non-disabled and disabled residents and visitors who
travel “to, from and within” the City of New York. Chapter 9 § 1. This legislative
declaration both identifies a legitimate area of substantial State concern (see pages
30-35 above) and harmonizes with the Act’s substantive provisions (see pages 16-
21 above). Under similar circumstances, this Court has relied upon similar
legislative declarations in determining that a special State law was enacted in
furtherance of a substantial State interest. See, e.g., PBA II, 97 N.Y.2d at 387-88;
City of New York, 94 N.Y.2d at 590.
Supreme Court nevertheless deemed itself free to disregard the Legislature’s
declarations regarding the purpose of the Act (G377-79; G381; G383-84; M1226-
28; M1230; M1232-33; T2153-55; T2157; T2159-60). In doing so, Supreme Court
misplaced reliance upon this Court’s decisions in PBA I, 89 N.Y.2d at 391-92,
Osborn, 272 N.Y. at 59, and Lawrence, 250 N.Y. 429, 447. Unlike the Act, the
statutes challenged in PBA I and Osborn did not “expressly identify any State
concern motivating [their] enactment.” PBA I, 89 N.Y.2d at 392; L 1936, ch 886;
cf. PBA II, 97 N.Y.2d at 389 (rejecting home rule challenge to amended statute that
“expressly stat[ed] the substantial State concern sought to be addressed”). In the
cited portion of Lawrence, furthermore, this Court declined to defer to a legislative
46
declaration concerning the intent animating an earlier statute, not a legislative
declaration that a substantial state interest prompted the statute containing the
declaration. 250 N.Y. at 447.
Again erring, Supreme Court described earlier efforts to achieve the Act’s
goals and speculated about the “real” political considerations supposedly
motivating the Legislature to pass the Act (G367-69; G379-81; G384; M1216-18;
M1228-30; M1233; T2143-45; T2155-57; T2160). This Court explicitly rejected
such an approach to home rule analysis in City of New York, 94 N.Y.2d at 591
(“Speculation on the ‘political’ motivation of the Legislature as a judicial construct
for statutory analysis in an appropriate area of legislative activity would be a
slippery and dangerous slope.”); see also Lawrence, 250 N.Y. at 436 (“If the
Legislature had power to pass the act, the courts may not inquire into the reasons
which moved the Legislature to exercise its power.”).
In any event, Supreme Court’s reasons for rejecting the Legislature’s stated
purpose lack merit. First, Supreme Court speculated that the Legislature
manufactured its declarations late in the legislative process, “quite possibly with
the subject litigation in mind” (G381; M1230; T2157). Supreme Court’s
speculation is belied by several substantive provisions of the Act in which the
Legislature exercised State powers to promote the achievement of State objectives.
Examples include Chapter 9 sections 3, 5, and 8 (authorizing the TLC to sell HAIL
47
permits, HAIL licenses, and medallions above administrative costs); sections 3 and
5(h) (exempting HAIL program from State environmental review [see G392-93;
M1241-42; T2168-69], presumably to speed implementation of program); sections
8 and 10 (requiring the TLC, if it intends to issue more than 400 new taxicab
licenses, to obtain State Department of Transportation approval of the Disabled
Accessibility Plan); and section 12-22 (amending State tax laws to enhance
economic viability of the MTA and the HAIL License Program).
Supreme Court also mocked the Legislature’s reference to taxicabs as “mass
transportation” (G379; M1228; T2155), but failed to mention the vital role taxis
and for-hire vehicles play in the City’s transportation system, see Rudack, 163
Misc. at 329; the 1.5 million passengers who use the City’s for-hire transportation
system every day; or the MTBOT plaintiffs’ and intervenor- plaintiffs’ admissions
that for-hire vehicles constitute a critical component of the City’s transportation
system (see page 33 n.10 above). Supreme Court further characterized the Act as a
“seemingly sudden,” “Johnny-come-lately” expression of the State’s substantial
interest in the provision of adequate taxi and for-hire vehicle services to disabled
New York City travelers (G384; M1233; T2160), but ignored Transportation Law
section 15-b, the Legislature’s 1984 effort to make the City’s transportation system
more accessible to disabled travelers.
48
Contrary to Supreme Court’s final rationale for questioning the Act’s stated
purpose (G367; G380-81; M1216; M1229-30; T2143; T2156-57), neither City
Council’s previous issuance of two home rule messages concerning taxicab
licenses, nor a City official’s mistaken opinion that the Act would require a home
rule message, have any bearing on the Act’s constitutionality. See City of New
York, 94 N.Y.2d at 591 (“Although the Legislature may have asked for home rule
messages in the past, that is not determinative of . . . whether such messages were
constitutionally required.”) (citing Whalen v. Wagner, 4 N.Y.2d 575, 581 [1958]);
City of New York v. Wilson & Co., 278 N.Y.86, 99-100 (1938) (“the errors of law
of city employees and officers are not binding upon the city”).
This Court should therefore reject Supreme Court’s conclusion that the
Legislature enacted the Act for reasons other than the furtherance of a substantial
State concern.
(C)
Contrary to Supreme Court’s Finding,
the Act Bears a Direct and Reasonable
Relationship to the State’s Substantial
Interest in New York City’s For-Hire
Transportation System.
Because enacted in furtherance of the State’s substantial concern with New
York City’s for-hire transportation system, the Act satisfies the first prong of the
PBA II test. As we proceed to show, the Act also satisfies the second prong of the
49
PBA II test, because it “bears a direct and reasonable relationship” to the State’s
substantial concern. PBA II, 97 N.Y.2d at 386, 388. Supreme Court reached the
opposite conclusion erroneously.
(1)
Key provisions of the Act bear a direct
and reasonable relationship to the State’s
substantial concern with New York City’s
for-hire transportation system.
For several reasons, the Act bears a direct and reasonable relationship to the
State’s substantial concern with improving the availability of taxis and for-hire
vehicles to disabled and non-disabled New York City travelers.
First, to improve the availability of for-hire transportation service in the
historically underserved outer boroughs, the Act enables HAIL-licensed vehicles to
respond to street hails in the HAIL Zone (see Chapter 9 § 1). The Act contains
several mechanisms for promoting a successful launch of the HAIL program. For
example, rather than creating burdensome new licensure requirements, the Act
allows drivers or owners of for-hire vehicles “who have been licensed by the TLC
for at least one year and are in good standing with the TLC” to acquire HAIL
licenses during the first three years of the program. Chapter 9 § 5(b). Similarly,
the Act makes initially-issued HAIL base station permits available (for $3,000) to
50
for-hire vehicle base stations that have been operating for least three years and are
in good standing with the TLC. Chapter 9 § 3.
The Act also creates two incentives for qualified drivers and owners of for-
hire vehicles to purchase HAIL licenses as soon as they become available. First,
the Act sets the relatively low price of $1,500 for initially-issued HAIL licenses,
but increases the price to $3,000 for the second issuance and $4,500 for the third
issuance. Chapter 9 § 5(d). Second, the Act reduces the financial risk of
purchasing a HAIL license by allowing transfers of HAIL licenses to “owners of
for-hire vehicles licensed by the TLC” and “for-hire driver[s] in good standing
with the TLC,” even if transferees do not meet the statutory criteria for obtaining a
HAIL license directly from the TLC. Chapter 9 §§ 5(c), 7.
At the same time, the Act minimizes the risk that members of the yellow taxi
industry will derail the HAIL program by acquiring HAIL licenses and base station
permits, without using them to provide street hail service in the HAIL Zone. By
itself, neither the possession of a TLC taxi driver’s license, nor the ownership of a
yellow taxi medallion, qualifies an individual or corporation to purchase a HAIL
license or base station permit during the initial phase of the HAIL program.
Chapter 9 §§ 3, 5(b).
To advance the State’s interest in the provision of adequate, safe and reliable
for-hire transportation to disabled riders in the HAIL Zone, the Act (1) requires
51
twenty percent of HAIL vehicles to be wheelchair-accessible; (2) allows the TLC,
three months after the initial issuance of HAIL licenses, to issue any remaining
accessible HAIL licenses without regard to the initial issuance criteria; and
(3) requires the TLC to provide financial assistance (either monetary grants up to
$15,000 or affordably-financed vehicles) to purchasers of accessible HAIL
licenses. Chapter 9 §§ 5(b), 9(a-b). Further advancing the State’s interest in the
availability of for-hire transportation to disabled City residents and visitors, the Act
authorizes the issuance of 2,000 new licenses for wheelchair-accessible taxicabs
operating within the HAIL Exclusionary Zone and the HAIL Zone. Id. §§ 8, 11.
To achieve both its outer-borough and accessible yellow taxi objectives, the
Legislature prescribed a series of interlocking steps for the City to take. For
instance, before auctioning the first 400 medallions for accessible taxicabs, the
TLC must make the initial tranche of HAIL base station permits and licenses
available for issuance. Chapter 9 §§ 3, 5[b], 6, 8. Unless 200 HAIL licenses from
each block of one thousand are limited to accessible vehicles, the TLC cannot
proceed to issue the next block of one thousand HAIL licenses. Id. § 5(b). Before
auctioning 1600 additional accessible medallions, moreover, the TLC must obtain
the State Department of Transportation’s approval of the Disabled Accessibility
Plan. Id. §§ 8, 10[a-d]. Similarly, the TLC must prepare a HAIL market analysis
before proceeding to the second and third issuances of HAIL licenses. Id. § 6.
52
The Legislature expedited this implementation process by authorizing the
TLC to issue HAIL base permits and licenses (Chapter 9 §§ 4-5); exempting the
HAIL program from environmental review procedures (id. §§ 3, 5[h]); and making
the TLC’s issuance and sale of accessible medallions contingent upon Mayoral
authorization, rather than the enactment of a local law (id. § 8). As the City’s chief
executive officer, who under Charter sections 3 and 8 “exercise[s] all the powers
vested in the city” except as otherwise provided by law, the Mayor is an
appropriate delegate of such administrative authority. See Charter § 1120 (in
addition to performing duties and exercising powers under Charter, elected City
officers “shall . . . perform any duties and exercise any powers vested in such
officer . . . by any other provision of law”); see, e.g., L 2007, ch 384 (authorizing
Mayor to present detailed congestion pricing plan to New York City Traffic
Congestion Mitigation Commission); N.Y. Public Authorities Law § 1266-c(2)(e)
(authorizing MTA to accept certain title transfers “from the city of New York,
acting by its mayor alone”); N.Y. Insurance Law § 7005(a) (authorizing large-city
mayors to establish captive insurance company for specified purposes).13
13 Simply because the Act advances a substantial State concern by enabling – rather than
requiring – implementation of the Act’s transportation programs, the Act did not require a home
rule message. See Salzman v. Impellitteri, 203 Misc. 486, 505-09 (Sup. Ct., Special Term, N.Y.
Cty.) (rejecting home rule challenge to State law authorizing New York City Mayor and Board
of Estimate to convey City’s rapid transit facilities to New York City Transit Authority), aff’d
without opin., 281 A.D. 1023 (1st Dept.), aff’d as modified, 305 N.Y. 414 (1953).
53
The Act’s enforcement mechanisms – some of which only the Legislature
had authority to enact – further advance the State’s substantial interest in New
York City’s for-hire transportation system. For example, the Act authorizes (and
incentivizes) the State Police and the Port Authority Police Department to “enforce
any laws, rules or regulations” regarding HAIL-licensed vehicles. Chapter 9 § 23.
The Act also amends the Vehicle and Traffic Law to increase the fines a court may
impose upon people found guilty of unlawfully soliciting ground transportation
services at airports. Chapter 9 § 24.
Because the Act creates a detailed, integrated, and comprehensive scheme
for improving street-hail service to disabled and non-disabled New York City
residents and visitors, the Act bears a direct and reasonable relationship to the
State’s substantial interest in New York City’s for-hire transportation system.
(2)
Supreme Court erroneously concluded
that the Act does not bear a direct and
reasonable relationship to the State’s
substantial interest in New York City’s
for-hire transportation system.
Again erring, Supreme Court concluded that the Act fails the “reasonable
relationship” test because the Act’s “means” are somehow disproportionate to its
“ends” (G377; G384-86; M1226; M1233-35; T2153; T2160-62). Specifically,
Supreme Court found the Act too long and detailed, and its mayoral delegation and
54
fiscal provisions too intrusive upon local powers, to bear a reasonable relationship
to the State’s “molehill” of an interest in “regulating City taxicab service” (G369;
G377; G385; G387; M1218; M1226; M1234; M1236; T2145; T2153; T2161;
T2163). Supreme Court’s rationale misconstrues both the character and the
strength of the State interest at issue (see pages 30-35 above).
At any rate, this Court should reject Supreme Court’s “proportionality” gloss
on the “reasonable relationship” test. Supreme Court reasoned (G381; G385;
M1230; M1234; T2157; T2161) that requiring “proportionality” between
legislative means and ends would prevent – in Chief Judge Cardozo’s words –
substantial “intrusion[s] upon a concern or interest of the city without a
compensating offset in the advancement of a concern or interest of the State.”
Adler, 251 N.Y. at 486 (Cardozo, C.J., concurring). Supreme Court failed to
recognize, however, that this Court’s home rule test – requiring special State laws
to be “enacted in furtherance of” and “bear a direct and reasonable relationship to a
‘substantial State concern’” – already accommodates Chief Judge Cardozo’s point.
See PBA II, 97 N.Y. at 386, 388; PBA I, 89 N.Y.2d at 391. When announcing and
applying the test, this Court has never required “proportionality” between (1) the
degree to which a special State law intrudes upon local prerogatives; and (2) the
importance of the State interest the legislation is designed to advance. Cf. PBA II,
55
97 N.Y.2d at 388 (rejecting home rule challenge to State law that “rationally
serve[s]” fulfillment of legislative purpose).
Two additional flaws undermine Supreme Court’s “proportionality” test.
First, Supreme Court’s test contravenes the principle that the Legislature has “both
the right and the authority” to select the particular methods used to advance its
interests. Sheehy v. Big Flats Community Day, Inc., 73 N.Y.2d 629, 634 (1989).
Despite Supreme Court’s skepticism about the means the Legislature chose to
achieve its objectives here (G384-86; M1233-35; T2160-62), Supreme Court had
no power to “substitute its judgment for that of the Legislature in determining the
particular method to meet a given need.” Taylor v. Sise, 33 N.Y.2d 357, 365
(1974). Second, Supreme Court should have presumed the Act’s constitutionality,
instead of imposing a new and legally-unsupported burden for the defendants to
overcome in establishing the Act’s constitutionality (see pages 44-45 above).
(a)
The Legislature was Free to Advance its
Objectives by Delegating Medallion-
Authorization Power to the Mayor.
Applying its ill-conceived test, Supreme Court rejected the Legislature’s
decision, in Chapter 9 section 8 of the Act, to condition the TLC’s issuance and
sale of new accessible medallions upon the Mayor’s administrative authorization,
rather than upon City Council’s enactment of a local law (G385-86; M1234-35;
56
T2161-62). Supreme Court incorrectly condemned the Act’s delegation provision
as an unconstitutionally intrusive “transfer” of City Council’s medallion-
authorization power to the Mayor, “disproportionate” to the State’s interest in New
York City’s for-hire transportation system (G374; G377-81; G383-87; M1223;
M1226-30; M1232-36; T2150; T2153-57; T2159-63). Again, Supreme Court
should have refrained from second-guessing the Legislature’s rational decision to
achieve the Act’s objectives by delegating administrative authority to the Mayor.
Contrary to Supreme Court’s assertion (G384; M1233; T2160), the Act’s
delegation of administrative authority to the Mayor hardly “trammels” the City’s
home rule power, under Article IX section 2(c)(ii)(1) of the Constitution, to adopt
and amend local laws relating to the powers of its officers. As shown above (at
pages 30-35), the Act involves a matter of substantial State interest. “[T]he home
rule provisions of article IX do not operate to restrict the Legislature in acting upon
matters of State concern.” Kelley v. McGee, 57 N.Y.2d 522, 538 (1982); see also
Wambat Realty Corp. v. State, 41 N.Y.2d 490, 497 (1977) (neither Article IX nor
the Statute of Local Governments “was designed to disable the State from
responding to problems of significant State concern”); New York v. Lawrence, 250
N.Y. 429, 445 (1929) (municipal home rule powers do not restrict Legislature’s
power to enact laws related to matters of public concern, even if those laws
incidentally affect municipal property, government, or affairs).
57
Accordingly, the Legislature may advance a substantial State concern by
authorizing a municipal executive to administer a provision of State law (see page
53 above), regardless of whether the Legislature had previously delegated similar
functions to the local legislature. See generally Salzman, 203 Misc. at 505-09;
see, e.g., Casado v. Markus, 16 N.Y.3d 329, 335 (2011) (noting Legislature’s
revocation of certain regulatory authority granted to New York City Council).14
In any event, the Act does not “transfer” power from City Council to the
Mayor. In 1956, the State delegated to local legislatures the power to adopt
ordinances regulating “[t]he registration and licensing of taxicabs and [to] limit the
number of taxicabs to be licensed.” N.Y. Gen. Mun. Law § 181(1). Fifteen years
later, in 1971, City Council amended the Charter to provide that “[a]dditional
taxicab licenses may be issued from time to time only upon the enactment of a
local law providing therefor.” Charter § 2303(b)(4). Under Article XVI section 1
of the State Constitution, however, the State Legislature must approve any issuance
and sale of new taxicab licenses at a price above their administrative cost.15
14 Contrary to Supreme Court’s assertion (G384; M1233; T2160), the home rule issue in Salzman
indeed involved “which component of City government has the power to act within a particular
sphere.” In Salzman, Supreme Court upheld a State law designed to promote the State’s
substantial interest in New York City rapid transit by authorizing the Mayor and Board of
Estimate to convey the City’s rapid transit facilities to the New York City Transit Authority,
notwithstanding a constitutional provision authorizing cities to adopt local laws regarding
ownership and operation of transit facilities. 203 Misc. at 505-09.
15 The TSA plaintiffs concede as much (T2058).
58
Chapter 9 section 8 of the Act satisfies Article XVI section 1 by authorizing
the TLC – acting with Mayoral approval – to issue up to 2,000 new taxi licenses by
public sale. Absent State legislative approval, City Council cannot authorize the
TLC to issue new taxi licenses by public sale. Thus, the power the State delegated
to the Mayor in Chapter 9 section 8 – to provide administrative authorization for
the TLC’s issuance of new taxi licenses by public sale – is not one City Council
ever possessed.
This Court should therefore reject Supreme Court’s conclusion that Chapter
9 section 8 of the Act improperly intrudes upon local powers.
(b)
The Act does not Impermissibly Intrude
upon the City’s Fiscal Powers.
Again erring, Supreme Court deemed two of the Act’s fiscal provisions –
Chapter 9 sections 9 and 23 – overly intrusive upon local “power[s] of the purse”
(G386; M1235; T2162).
Once the TLC initiates the HAIL program, section 9 of the Act requires the
TLC to support the introduction of accessible vehicles into the HAIL fleet by
providing financial support (either monetary grants of up to $15,000 or affordably-
financed vehicles) to purchasers of accessible HAIL licenses. If the TLC creates a
grant program, the total amount of grants “shall not exceed” $54 million. Chapter
59
9 § 9(a-b). Supreme Court interpreted section 9 as intruding upon the City’s home
rule power to transact business and incur obligations, see N.Y. Const. Art. IX
§§ 2(c)(3-4), by “[b]reaking open the City’s piggy bank,” and “expos[ing] the City
to as much as $54,000,000 in grants” (G386; M1235; T2162).
Supreme Court failed to note that the TLC’s sale of 18,000 HAIL licenses at
an average price of $3,000 each would generate enough revenue to offset the
expenditure of fifty-four million dollars in HAIL grants. Chapter 9 § 5(a), (d). In
any event, Chapter 9 section 9 does not impose any minimum on the amount City
Council must appropriate for the provision of HAIL monetary grants or affordably-
financed vehicles. To the extent section 9 implicitly requires City Council to
appropriate a reasonable amount for HAIL support programs, the State may
impose such obligations as a means of achieving a substantial State interest. See,
e.g., City of New York v. State, 94 N.Y.2d 577, 587 n.1 (2000) (rejecting home rule
challenge to State law invalidating municipal commuter tax, from which New
York City had derived approximately $360 million in annual revenues for over
thirty years); Board of Education v. New York, 41 N.Y.2d 535, 537, 542-43 (1977)
(rejecting home rule challenge to State law requiring City to appropriate a certain
percentage of its expense budget for public elementary and secondary education).
Supreme Court also misinterpreted Chapter 9 section 23 of the Act, which
provides that the “commission or tribunal that adjudicates liability” for a violation
60
of HAIL laws, rules or regulations “shall pay the money owed and collected to the
entity that issued the summons for the violation.” Because nothing in the Act
prescribes how those “entities” may utilize the HAIL fines they receive, Supreme
Court viewed section 23 as allowing State and local law enforcement agencies to
fund themselves “off-budget,” without legislative oversight (G386; M1235;
T2162). Under Charter section 109, however, all TLC and NYPD revenues “not
required by law to be paid into any other fund or account shall be paid” into the
City’s general fund. Proposed expenditures of general fund revenues are subject to
City Council approval. See Charter §§ 225, 254.16
This Court should therefore reject Supreme Court’s conclusion that Chapter
9 sections 9 and 23 improperly intrude upon local powers.
(c)
Regardless of its Complexity, the Act Bears
a Direct and Reasonable Relationship to a
Substantial State Interest.
Finally, this Court should reject Supreme Court’s assertion that the Act is
too detailed and comprehensive to bear a reasonable relationship to the State’s
substantial interest in New York City’s for-hire transportation system (G377;
16 Similarly, State Finance Law section 72(1) provides that the State’s general fund “shall
account for all financial resources of the state except those required to be accounted for in other”
statutorily-prescribed funds.
61
G385; G387; M1226; M1234; M1236; T2153; T2161; T2163). As shown above
(at pages 49-54), the Act’s comprehensiveness makes it more likely – rather than
less likely – to satisfy the “reasonable relationship” test. Indeed, this Court
rejected a home rule challenge to the Adirondack Park Agency Act, Executive Law
Article 27, even though that statute includes a “comprehensive” program for
zoning, land use, planning, and development. Wambat, 41 N.Y.2d at 490, 492,
494-95; see also Hotel Dorset Co. v. Trust for Cultural Resources, 46 N.Y.2d 358,
364, 369 (1978) (rejecting home rule challenge to “complex” and “highly intricate”
State legislation). Despite quoting one of this Court’s references to the
comprehensiveness of the State statute upheld in Wambat (G380; M1229; T2156),
Supreme Court condemned the comprehensiveness of the Act at issue here.
* * *
Because the Legislature enacted the Act in furtherance of the State’s
substantial concern with New York City’s for-hire transportation system, and
because the Act bears a direct and reasonable relationship to that substantial State
concern, the Act does not offend the Home Rule Clause, even absent a home rule
message from City Council.
62
POINT II
BECAUSE THE ACT INVOLVES A
SUBSTANTIAL STATE INTEREST,
THE STATE CONSTITUTION DID
NOT REQUIRE DOUBLE
ENACTMENT.
Contrary to Supreme Court’s conclusion and the MTBOT plaintiffs’
arguments, the Act is also consistent with Article IX section 2(b)(1) of the
Constitution, the Double Enactment Clause. This clause requires the State to use a
double-enactment procedure in order to “repeal[], diminish[], impair[] or
suspend[]” powers granted to local governments pursuant to a “statute of local
governments.” N.Y. Const. Art. IX § 2(b)(1). Enacted in 1964, the Statute of
Local Governments grants to each local government in New York “[t]he power to
adopt, amend and repeal ordinances, resolutions, and rules and regulations in the
exercise of its functions, powers and duties.” N.Y. Stat. Loc. Gov. § 10(1).
Consistent with Article IX section 3(a)(3) of the Constitution, however, the
Legislature explicitly “exclude[d] from the scope of the grants of powers to local
governments . . . and reserve[d] to itself the right and power” to enact laws
“relating to a matter other than the property, affairs or government of a local
government,” even if those laws repeal, diminish, etc., powers granted to local
governments in section 10. N.Y. Stat. Loc. Gov. § 11(4).
63
Like the Home Rule Clause (see page 44 above), the Double Enactment
Clause does not constrain the State’s power to enact laws designed to advance
substantial State concerns, even if those laws happen to encroach upon local
legislative powers. As this Court stated in Wambat, 41 N.Y.2d at 491, “powers
granted under the Stat[ut]e of Local Governments may . . . be encroached upon or
even superseded by ordinary legislative enactment where matters of State concern
are involved.”
In Wambat, a private developer asserted a double-enactment challenge to a
State law creating “a comprehensive zoning and planning program for all of the
public and private lands” within the Adirondack Park region. 41 N.Y.2d at 490,
492. The developer argued that the State law required double enactment, because
it diminished zoning and planning powers the Statute of Local Governments had
granted to local governments. Id. at 493. Acknowledging that the State law
prevented affected localities “from freely exercising their zoning and planning
powers,” this Court rejected the developer’s argument, because the State law
“serve[s] a supervening State concern [with environmental conservation]
transcending local interests.” Id. at 494-95. This Court held that the Double
Enactment Clause and the Statute of Local Governments preserve, rather than
impede, the State’s power to “respond[] to problems of significant State concern”
64
through “ordinary legislative enactments,” even if the State law “override[s] local
or parochial interests.” Id. at 491-92, 497-98.
Thus, as Supreme Court acknowledged, if “a substantial State interest
supports the [Act], then the ‘double enactment’ clause is not at issue here” (G388;
M1237; T2164). See, e.g., Floyd v. New York State Urban Dev. Corp., 33 N.Y.2d
1, 6-7 (1973) (rejecting double-enactment challenge to State urban development
statute that encroaches upon local zoning powers, but addresses housing, a matter
of State-wide concern); City of New York v. State, Index No. 44141/88 (Sup. Ct.
N.Y. Co. 1989) (amendments to State Loft Law involve “matters of state-wide
importance and concern, transcendent of local or parochial interests or concern”),
aff’d without opin., 171 A.D.2d 629 (1st Dept. 1991).17
As shown above (in Point I), the Act serves the State’s substantial interest in
the availability of safe and reliable for-hire transportation for disabled and non-
disabled travelers who live in and visit New York City. Accordingly, even
assuming the Act impairs local powers, the Constitution did not require the use of
double-enactment procedures.
Based upon its erroneous determination that the Act does not implicate a
substantial State interest, Supreme Court held that the Act violates the Double
17 A copy of Supreme Court’s decision in City of New York v. State appears on pages M569-73
of the MTA Record and pages T849-53 of the TSA Record.
65
Enactment Clause (G387-88; M1236-37; T2163-64). Our research indicates that
Supreme Court was the first, in the nearly 50-year history of the Double Enactment
Clause, to strike down a State statute on double-enactment grounds. This Court
should reject Supreme Court’s unprecedented and erroneous holding.
POINT III
THE ACT DOES NOT GRANT FOR-
HIRE VEHICLE DRIVERS, OWNERS
OR BASE STATIONS
UNCONSTITUTIONAL EXCLUSIVE
PRIVILEGES.
Misapplying relevant precedent, Supreme Court accepted the MTBOT and
GNYTA plaintiffs’ argument that the Act violates Article III section 17 of the
Constitution, the Exclusive Privileges Clause (G388-39; M1237-38; T2164-65).
The Exclusive Privileges Clause bars the Legislature from passing “a private
or local bill . . . [g]ranting to any private corporation, association or individual any
exclusive privilege, immunity or franchise whatever.” N.Y. Const. Art. III, § 17.
Targeting monopolies, the Exclusive Privileges Clause prevents the Legislature
from granting the specified entities “privileges and franchises not possessed by
others” and “the right to exclude others from the exercise or enjoyment of like
privileges or franchises.” Consumers Union, Inc. v. State, 5 N.Y.3d 327, 361 &
n.27 (2005) (quoting Matter of Union Ferry Co., 98 N.Y. 139, 150 [1885]).
66
To violate the Exclusive Privileges Clause, a “private or local” bill must
(1) “be directed at a single entity;” and (2) “confer a privilege upon the single
entity to the exclusion of all others.” Consumers Union, 5 N.Y.3d at 360-61.
“Both elements – singleness and exclusivity – must be present. Otherwise, all
legislation directed at a single entity would be invalid.” Id. at 361. Even if these
criteria are met, however, the Exclusive Privileges Clause does not bar good-faith,
reasonable exercises of the police power reasonably designed to promote the public
good. See Rochester v. Gutberlett, 211 N.Y. 309, 315-20 (1914).
As an initial matter, the Act does not constitute a “private or local bill” for
purposes of Article III section 17. Because the Act’s HAIL licensing provisions
apply to a 60,000-member class of for-hire vehicle drivers and owners, the Act
does not constitute a “private bill.” See Matter of New York Elevated Rail Co., 70
N.Y. 327, 350 (1877) (“A law which relates to persons or things as a class is
general, but one which relates to particular persons or things of a class is special
and private.”). Because the Act involves a matter of substantial State concern (see
pages 30-35 above), the Act does not constitute a “local bill,” even though directed
at New York City’s for-hire transportation system. See Corning v. Donohue, 37
A.D.2d 213, 217-18 (3d Dept.) (because education constitutes a matter of State
interest, State law directed solely at Albany’s educational system does not
constitute a “local bill” under Article III section 17), aff’d, 29 N.Y.2d 209 (1971).
67
In any event, the Act is not “directed at a single entity,” i.e., a single private
corporation, association, or individual. The Act enables and encourages
approximately 60,000 for-hire vehicle drivers and owners, and hundreds of for-hire
vehicle base stations, to participate in the new HAIL program. Cf. Fox v. Mohawk
& H. R. Humane Soc., 165 N.Y. 517, 526-28 (1901) (striking down State law
granting only one animal-cruelty-prevention society per county the exclusive
privilege to harbor dogs without paying licensing fee); American Consumer Ind. v.
City of New York, 28 A.D. 2d 38 (1st Dept. 1967) (striking down Commissioner of
Markets’ grant of exclusive franchise to one company to sell and deliver ice to
occupants of Hunts Point Market).18
Moreover, the Act does not confer upon HAIL licensees an exclusive
privilege to accept street hails in the HAIL Zone. To the contrary, the Act
explicitly preserves the privilege of licensed taxicabs to respond to street hails in
the HAIL Zone. Chapter 9 § 11.
Nor does the Act confer upon a fixed class of livery industry members the
“exclusive privilege” of eligibility to obtain an initial HAIL license or permit.
18 In 1990, Supreme Court, New York County, mistakenly held that a State law violated the
Exclusive Privileges Clause by granting the tenants of twenty-one rent-stabilized apartments, in
one specific building, the right to remain in their apartments without purchasing them. 19th
Street Assoc. v. State, NYLJ, July 20, 1990, at 29, col. 3, aff’d, 172 A.D.2d 380 (1st Dept. 1991),
aff’d on other grounds, 79 N.Y.2d 434 (1992) (not addressing exclusive privileges issue). The
State law neither conferred privileges upon “a single entity,” nor excluded others from obtaining
similar privileges.
68
Because the Act conditions eligibility upon the length of potential applicants’
service in the industry (as well as applicants’ good standing with the TLC), see
Chapter 9 §§ 3, 5(b), the pool of qualified applicants fluctuates over time. See
Hotel Dorset Co. v. Trust for Cultural Resources, 46 N.Y.2d 358, 367-68 (1978)
(rejecting exclusive privilege challenge to State law providing benefits to Museum
of Modern Art and other cultural institutions that may later satisfy statutory
criteria). Moreover, like the State law upheld in Consumers Union, 5 N.Y.3d 327,
the Act neither authorizes qualified license- and permit- applicants to prevent
others from becoming qualified applicants, nor promises initially-qualified
applicants that subsequently-qualified applicants “will not be granted similar
rights” to obtain initial HAIL licenses and base permits. Thus, under Consumers
Union, 5 N.Y.3d at 361, the Act does not confer “exclusive” licensing privileges.
Furthermore, to the extent the Act limits the initial issuances of HAIL
licenses and base station permits to established for-hire vehicle drivers, owners,
and base stations, and provides financial assistance to purchasers of accessible
HAIL licenses (see pages 16-18 above), the Act falls well within the “police
powers” exception to the Exclusive Privileges Clause. As explained above (at
pages 49-54), the relevant provisions of the Act reasonably relate to the
Legislature’s goal – improving access to for-hire transportation for disabled and
non-disabled outer-borough riders – by encouraging experienced members of the
69
livery industry to participate in the HAIL program, while reducing opportunities
for the yellow taxi industry to undermine the program. This Court rejected an
Exclusive Privilege Clause challenge to an exercise of police power that imposed a
far more exclusive licensing restriction in order to advance the public good.
Gutberlett, 211 N.Y. 309 (upholding municipal ordinance designed to promote
public health by granting exclusive garbage-collection license to one refuse
company); cf. American Consumer, 28 A.D.2d 38 (striking down Commissioner of
Markets’ grant of exclusive franchise not “designed to promote public safety or
public health”).
Supreme Court nevertheless concluded that the Act grants “livery drivers”
an unconstitutional exclusive privilege to purchase HAIL licenses “at a bargain
basement price, . . . to the exclusion of everybody else” (G388-89; M1237-38;
T2164-65). After a qualified for-hire vehicle driver or owner acquired one of the
initial HAIL licenses for $500, Supreme Court asserted, the licensee could sell the
HAIL license to a for-hire vehicle license-holder “not vetted by the TLC” for
upwards of $850,000, “the minimum bid price for one of the 2,000 potential new
[accessible] medallions,” thereby “reap[ing] a huge profit” or “windfall[] at
taxpayer expense” (G388-39; M1237-38; T2164-65).
Contrary to Supreme Court’s assertions, (1) Chapter 9 section 5(d) of the
Act sets $1,500, rather than $500, as the minimum fee for HAIL licenses; and
70
(2) under Chapter 9 sections 5(c) and 7, HAIL licenses are only “transferable to
owners of for-hire vehicles licensed by the TLC or a for-hire driver in good
standing with the TLC.” Moreover, Supreme Court only speculated that the value
of a new HAIL license will rise well above its purchase price, rather than decline.
If HAIL licenses were likely to produce enough revenue to bid up the transfer price
to several hundred thousand dollars, yellow taxis would not have left the HAIL
Zone underserved for the past several decades. Besides, a for-hire vehicle driver or
owner who will become eligible to acquire a HAIL license from the TLC during
the second issuance (for $3,000), or the third issuance (for $4,500), see Chapter 9
§ 5(d), will have little incentive to buy a transferred license for more than $4,500.
Supreme Court further found that the Act confers the “exclusive privilege”
of “$15,000 wheelchair-accessibility grants” upon purchasers of HAIL accessible
licenses, a grant “unavailable to taxicab medallion owners seeking to purchase or
retrofit a wheelchair-accessible vehicle” (G388; M1237; T2164). Again, Supreme
Court misread the Act. Under Chapter 9 sections 9(a) and (b), even if the TLC
opts to provide grants to purchasers of accessible HAIL licenses, instead of other
financial assistance, $15,000 is the maximum grant, not the minimum. Supreme
Court also failed to explain why an individual or corporation willing to pay several
hundred thousand dollars for an accessible medallion would need the incentive of a
relatively small monetary grant to make a yellow taxi wheelchair-accessible. At
71
any rate, the Exclusive Privileges Clause “has no application to the case of an
appropriation of public money . . . to public uses or for a public purpose.” Trustees
of Exempt Firemen’s Benevolent Fund v. Roome, 93 N.Y. 313, 328-29 (1883).
While condemning the Act for mistaken and speculative reasons, Supreme
Court failed to acknowledge that even if the Act could be construed as conferring
exclusive privileges, the Act falls within the “police powers” exception to the
Exclusive Privileges Clause (G388-39; M1237-38; T2164-65). As explained
above (at pages 50-51), the Act’s licensing restrictions advance the Legislature’s
public safety and welfare goals. “In determining whether statutory requirements
[regarding who may follow pursuits involving the public health, safety and
welfare] are arbitrary, unreasonable or discriminatory,” courts must bear in mind
“that the choice of measures is for the legislature, who are presumed to have
investigated the subject, and to have acted with reason, not from caprice.” People
v. Griswold, 213 N.Y. 92, 96-97 (1914). Although the application of statutory
licensing criteria may appear to be somewhat unfair or arbitrary in particular
situations, “[t]he validity of a statute . . . is not to be determined from its effect in a
particular case, but upon its general purpose and its efficiency to effect that end.”
Gutberlett, 211 N.Y. at 316; see also Griswold, 213 N.Y. at 98 (“it is difficult, if
not impossible, to make a classification which will not in particular instances seem
unjust”). Accordingly, the risk that a HAIL licensee may transfer the license at a
72
73
small profit, or the supposed unfairness of allowing only purchasers of accessible
HAIL licenses to receive financial assistance for the provision of accessible
vehicles, is insufficient to remove the Act from the “police powers” exception.
This Court should therefore reject Supreme Court’s conclusion that the Act
violates the Exclusive Privileges Clause.
CONCLUSION
THE JUDGMENT APPEALED FROM
SHOULD BE REVERSED, THE ACT
DECLARED CONSTITUTIONAL, AND
THE COMPLAINTS DISMISSED,
WITH COSTS.
Respectfully submitted,
MICHAEL A. CARDOZO
Corporation Counsel of the City
of New York
Attorney for Municipal Defendants-
Appellants
By: _________________________
Scott Shorr
LEONARD J. KOERNER,
FRANCIS F. CAPUTO,
SCOTT SHORR,
of Counsel.