New York County Clerk’s Index No. 102472/12
Court of Appeals
STATE OF NEW YORK
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,
(Caption Continued on the Reverse)
>> >>
To Be Argued By:
Steven J. Shanker
Time Requested: 10 Minutes
BRIEF FOR INTERVENOR PLAINTIFFS-RESPONDENTS
THE SHANKER LAW FIRM, P.C.
Attorneys for Intervenor Plaintiffs-
Respondents The Livery Roundtable, Inc.
and Big East Multi Group Corp.,
d/b/a Premier Car Service
40 Fulton Street, 23rd Floor
New York, New York 10038
646-755-3338
DAVIS WRIGHT TREMAINE LLP
Attorneys for Intervenor Plaintiff-
Respondent N.J.M., Inc. d/b/a
Mid Island Car Service of Staten Island
1633 Broadway, 27th Floor
New York, New York 10019
212-489-8230
Date Completed:March 4, 2013
Of Counsel:
Steven J. Shanker
Of Counsel:
Robert Balin
against
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 is 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.
COURT OF APPEALS Index No. 102472/2012
STATE OF NEW YORK
CORPORATE DISCLOSURE STATEMENT
Intervenor-Plaintiffs/Respondents The Livery Roundtable, Inc., Big East
Multi Group Corp., d/b/a/ Premier Car Service and N.J.M., Inc., d/b/a/ Mid Island
Car Service have no parents, subsidiaries or affiliates.
i
TABLE OF CONTENTS
Page
CORPORATE DISCLOSURE STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A. The History of Exclusive Local Regulation of the Taxicab
and Livery Industries in New York City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
I. THE HAIL ACT IS AN UNCONSTITUTIONAL
INTRUSION INTO LOCAL GOVERNMENT
AFFAIRS IN VIOLATION OF HOME RULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A. Since the City Has a Long History of Exclusively
Regulating Taxicabs and Livery Cars, With Repeated
Recognition by the State of the City’s Exclusive
Role in this Area of Local Concern, the Hail Act
Violates Home Rule Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
B. The Hail Act’s Intrusion Into Local Home Rule
Regulation of Taxicabs and Livery Cars Does
Not Advance a Substantial State Concern . . . . . . . . . . . . . . . . . . . . . . . . 15
C. The Hail Act’s Power Shifting Provision Intrudes
Upon Municipal Governance Without Any Asserted
State Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ii
TABLE OF AUTHORITIES
Page
Cases
1983 N.Y. Op. Att’y Gen. (Inf.) 1008, 1983 WL 167364 . . . . . . . . . . . . . . . . . . . . . . . . . 8, 14
Adler v. Deegan, 251 N.Y. 467 (1929) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Baldwin v. City of Buffalo, 6 N.Y.2d 168 (1959) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 14
City of N.Y. v. Patrolmen's Benevolent Ass'n of City of N.Y.,
89 N.Y.2d 380 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Hotel Dorset Co. v. Trust for Cultural Resources of City of New York,
63 A.D.2d 157 (1st Dep't) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Matter of Mayor of City of New York, 246N.Y. 72, 76 (1927) . . . . . . . . . . . . . . . . . . . . . 15
City of New York v. Vill. Of Lawrence, 250 N.Y. 429 (1929) . . . . . . . . . . . . . . . . . . . . . . 18
Rudack v. Valentine, 163 Misc. 326(Sup. Ct. N.Y. Cty.), aff'd,
274 N.Y. 615 (1937) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Yellow Taxicab Co. v. Gaynor, 82 Misc. 94 (Sup. Ct. N.Y.Cty.), aff'd,
159 A.D.2d 893, 144 N.Y.S. 299 (1st Dep't 1913) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Statutes
Hail Act, §3, cl. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Hail Act, §§ 3-5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Hail Act, § 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
N.Y. Const. Art. IX, § 2(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
N.Y. Const. Art. IX, § 2(b)(1)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
N.Y. Const. Art. IX, § 2(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
iii
iv
N.Y.C. Admin. Code, § 19-502(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
NYC Admin. Code §§ 19-504(a)(1), 19-507(a)(4), 19-516(a). . . . . . . . . . . . . . . . . . . . . . . . 8
NYC Admin Code § 19-504(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
NYC Admin Code § 19-507(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
N.Y. Gen. Mun. Law § 181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 13
Regulations
35 RCNY § 59B-17(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
NYC Charter § 2300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
NYC Charter § 2303(b)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other Authorities
Schaller Consulting, The New York City For-Hire Vehicle Fact Book,
24 (February, 1993) (“For-Hire Book”),
http://www.schallerconsult.com/taxi/fhv_fb.htm#regulation. . . . . . . . . . . . . passim
PRELIMINARY STATEMENT
Intervenor-Plaintiff The Livery Round Table, Inc. (“LRT”) is a not-for-profit
umbrella organization that represents approximately 240 livery car bases and
14,000 livery car drivers from all five boroughs of New York City (the “City”).
(M1150)1 Our members make up approximately 60% of all livery car drivers in
the City. (Id.)2 LRT and the other Intervenor-Plaintiffs have intervened in this suit
because the Street Hail Livery Law (the “Act” or “Hail Act”) represents an
intrusion into New York City’s long-standing governance of the livery industry.
This intrusion threatens not only the livery business model but also the quality of
service we can provide our customers—the riding public.
For over 25 years—the entire period during which the livery industry has
been regulated—it has been the City, and not the State, that has regulated the livery
1Following the convention used by Defendants-Appellants, Intervenor-Plaintiffs use the letter
“M” to denote citations to the Record on Appeal in this case, Metropolitan Taxicab Board of
Trade v. Bloomberg.
2The LRT is also the City’s most geographically diverse livery industry representative. It is
made up of four livery associations and the two largest livery bases in the City. The LRT
consists of the NYC Fleet Livery Owners Association, Inc. (which primarily represents bases
and drivers from Staten Island), the NYC Independent Livery Owners Corp. (which primarily
represents bases and drivers from Brooklyn), United As One TLC Base Owners Association
(which primarily represents bases and drivers from Queens), The NYS Federation of Taxi
Drivers (which primarily represents Livery bases and Livery drivers from Brooklyn and the
Bronx), Carmel Car & Limousine Service, and Dial 7 Car & Limousine Service (primarily
servicing Manhattan). (M1150). The remaining Intervenor-Plaintiffs are livery companies Big
East Multi Group Corp. (d/b/a Premier Car Service) and N.J.M., Inc. (d/b/a Mid Island Car
Service of Staten Island). On June 21, 2012, the lower court granted Intervenor-Plaintiffs leave
to intervene in the Metropolitan Taxicab Board of Trade v. Bloomberg action. (M1141)
1
industry. Under the City’s current regulatory regime, livery cars pick up
passengers only by “pre-arrangement” (typically, a phone call) while taxicabs pick
up passengers by “street hail.”3
This current system has effectively served the riding public. There are
hundreds of car services, with thousands of cars, throughout every part of the five
boroughs. As explained by Bruce Schaller, a noted expert in the field, these
“neighborhood car services” take local residents on local trips “to a myriad of
everyday destinations such as doctor and hospital appointments, work, shopping
and the airports.”4 Residents outside central Manhattan rely on their local car
service for such trips, and “know[] the number of [their] local livery car service by
heart”—at least for those who do not have the number on speed dial. (M278) The
3 See NYC Admin Code § 19-504(a)(1) (“no motor vehicle other than a duly licensed [i.e.,
medallion] taxicab shall be permitted to accept hails from passengers in the street”); NYC Admin
Code § 19-507(a)(4) (“[n]o driver of a for-hire [i.e., livery] vehicle shall accept passengers
unless the passengers have engaged the use of the for-hire vehicle on the basis of telephone
arrangement or pre-arrangement”).
4 Schaller Consulting, The New York City For-Hire Vehicle Fact Book, 24 (February, 1993)
(“For-Hire Book”), http://www.schallerconsult.com/taxi/fhv_fb.htm#regulation. From 2007-
2012, Bruce Schaller was the Deputy Commissioner for Planning and Sustainability at the New
York City Department of Transportation (“DOT”) and he is now the DOT’s Deputy
Commissioner for Traffic and Planning. In addition to neighborhood car services, the term “for-
hire vehicles,” also includes “black cars” (a more expensive, premium service catering to
Manhattan business clientele) and limousines. All three segments of the for-hire vehicle market
will be referred to as the “livery” industry in this brief.
2
livery industry, Mr. Schaller concluded, “serve[s] an array of customers,
neighborhoods and needs that reflect the full diversity of New York.”5
In contrast, taxicab hail service is not as well suited to local trips in low-
density residential neighborhoods, such as large portions of the outer boroughs. As
New York City Council Member Fidler explained: “[I]n my 10 years as a City
Council member, I have never gotten a call asking me why a citizen can’t hail a
cab on the streets of Marine Park. That’s why I characterize the [Mayor’s] new
plan for ‘outer borough’ taxi service as a solution in search of a problem.” (M276-
78) (emphasis added).
The Hail Act—the “solution in search of a problem,” id.—alters the current
arrangement by creating a class of livery vehicles—numbering 18,000—authorized
to pick up street hails in Northern Manhattan and the outer boroughs.6 In so doing,
the Act overturns long-established New York City local laws and regulations
regarding the manner in which private for-hire transportation in the City is
provided. The State has never before interfered with the City’s regulation of its
liveries and taxicabs.
5 For-Hire Book, supra note 4, at 24.
6 See Hail Act, §§ 3-5 (authorizing TLC to issue up to 18,000 Hail Licenses to owners and
drivers of livery vehicles, with Hail licenses permitting livery drivers to accept street hails from
passengers anywhere in New York City except Manhattan below East 96th Street and West 110th
Street and John F. Kennedy and La Guardia Airports).
3
One might expect the livery industry to support what, on its face, appears to
be an expansion of rights to the livery industry; likely the liveries which intervened
in support of the Hail Act were motivated by such short-sighted views. Intervenor-
Plaintiffs recognize, however, that the Hail Act will ultimately threaten liveries’
pre-arrangement-only business model. The Hail Act imposes considerable
economic pressure on bases to offer livery drivers the option to pick up passengers
by pre-arrangement or street hail. Ultimately, though it is not their preference, due
to this economic pressure, most livery bases will convert to Hail bases and affiliate
with Hail-licensed drivers.
Passengers will be the ultimate victims of any switch from a pre-
arrangement-based livery model to a street-hail-based livery model, in two ways:
First, the cost of converting car services to Hail vehicles (e.g., repainting the car,
installing meters, partitions, and roof lights, and purchasing Hail licenses) will be
significant. Low-cost neighborhood car services will be forced to raise their rates
to cover these increased costs, making livery service cost-prohibitive for many
low-income customers. Second, passengers who rely on pre-arranged livery
service will find themselves stranded when a Hail driver can secure a more
lucrative street hail. Bases’ current leverage against such poor service—denying
the ill-performing driver access to the base’s pre-arranged trips—will have little
bite. Once the pre-arranged livery industry is decimated, it will be cold comfort to
4
passengers that Hail vehicles are roaming the streets: Hail vehicles will congregate
only in the highest-density areas and will be effectively unavailable to residents in
more residential neighborhoods. And street hails are less convenient for
passengers with physical disabilities as compared to pre-arranged services that pick
passengers up at a specified time and place.
The Legislature stated that the purpose of the Hail Act is to allow
passengers to “to get where they need to go quickly and easily, without having to
own a car.” (M99) Yet the livery industry, under the watchful regulatory eye of
New York City, already serves that purpose through hundreds of car services
throughout the five boroughs. Worse yet, without holding any public hearings or
commissioning any reports, the Legislature enacted a law that contravenes these
stated goals; rather than helping people “get where they need to go,” id., the Hail
Act will cause a denigration of service to outer borough communities. Thus even
if this Court credits the Defendants’ claim that the State has a substantial interest in
regulating liveries—a baseless claim given the long history of City regulation of
liveries—the Hail Act certainly does not “bear a reasonable relationship” to the
Legislature’s stated goals. See City of N.Y. v. Patrolmen’s Benevolent Ass’n of
City of N.Y., 89 N.Y.2d 380, 391 (1996) (“PBA I”).
The livery industry and the yellow cab industry are fierce competitors who
do not often see eye to eye. Yet, we fully concur with the various yellow cab
5
plaintiffs (and the trial court) in this case that the State Legislature’s enactment of
the Street Hail Livery Law (the “Act” or “Hail Act”) impermissibly violates the
Constitution’s Home Rule principles. Accordingly, the Supreme Court properly
invalidated the Hail Act on Home Rule grounds.
QUESTIONS PRESENTED
1. Does the long unbroken history of exclusive City regulation of taxicabs and
livery vehicles, together with the State’s repeated confirmation that the City
has the Home Rule power to regulate in this area, support a finding that the
Hail Act, in violation of Home Rule principles, infringes on matters that are
of local, not State-wide, concern?
Answered in the affirmative by Supreme Court.
2. In violation of Home Rule principles, do the provisions of the Hail Act fail
to bear a direct and reasonable relationship to a legitimate substantial State
interest?
Answered in the affirmative by Supreme Court.
3. Does the Hail Act violate the Constitution’s Home Rule provisions where,
without any asserted State interest or justification, the Act transfers to the
Mayor municipal power that the City Charter vests in the City Council?
Answered in the affirmative by the Supreme Court.
STATEMENT OF FACTS
The vast majority of the facts relating to these three related Home Rule cases
have been extensively set forth by many other parties and, accordingly, will not be
re-hashed by the Intervenor-Plaintiffs. Instead, in this brief, Intervenor-Plaintiffs
highlight facts and arguments that supplement the submissions made to this Court
6
by the other plaintiffs and that illustrate the history of exclusive local City control
of the livery industry.
A. The History of Exclusive Local Regulation of the Taxicab and Livery
Industries in New York City
As one court noted as far back as 1937, “[t]he use of the public streets for
hire has . . . always been treated as a privilege granted by the city.” Rudackv.
Valentine, 163 Misc. 326, 329 (Sup. Ct. N.Y. Cty.), aff’d, 274 N.Y. 615 (1937);
see also Yellow Taxicab Co. v. Gaynor, 82 Misc. 94, 108 (Sup. Ct. N.Y.Cty.)
(“The right of a municipality to establish public hack stands has been recognized
and acted upon by the city of New York, from early times, and is but an incident of
the right to license and regulate those who ply the trade of hackmen for hire”),
aff’d, 159 A.D.2d 893, 144 N.Y.S. 299 (1st Dep’t 1913).
In the 1950s-1960s, for-hire neighborhood car services began to operate in
the City’s lower-income neighborhoods in the outer boroughs and northern
Manhattan as a supplement to medallion taxicabs. (M1143-44) Thus was born the
“livery” (or “for-hire”) vehicle industry. For-hire vehicles “serve an array of
customers, neighborhoods and needs that reflect the full diversity of New York,”
with neighborhood car services taking local residents on local trips “to a myriad of
everyday destinations such as doctor and hospital appointments, work, shopping
and the airports.” (For-Hire Book, at 24)
7
Unlike taxis (which operate typically by street hails), livery service vehicles
operate by “pre-arrangement”—meaning that passengers telephone a livery base
which dispatches a livery vehicle. (M1143) Because taxicab street hail service is
not as well suited to low-density residential neighborhoods, such as the outer
boroughs, livery vehicles began to fill this niche. (M1152)
By the late 1960s, though still unregulated, neighborhood car services had
established themselves as the primary means of for-hire transportation in the City’s
outer boroughs and northern Manhattan. (M1143-44)7 In 1966, Mayor John V.
Lindsay’s Taxi Study Panel issued a report recommending that livery car services
be regulated, licensed and limited to providing pre-arranged service. (Id.)
Thereafter, in 1971, the City Council passed local laws that established the
exclusive right of medallion taxicabs to accept street hails from passengers. See
NYC Admin. Code §§ 19-504(a)(1), 19-507(a)(4), 19-516(a). At the same time, in
March 1971, the City Council passed Local Law 12 of 1971, which created the
7Starting in the mid-1960s, some taxi owners formed radio associations and began serving
customers by telephone prearrangement as well as by traditional street hail. Most radio cabs were
operated by taxi owner-drivers. Radio service was provided to passengers who simply
telephoned in a service request and paid the meter fare in cash. Radio work proved popular with
drivers because it provided a regular flow of business. The demand for pre-arranged service
grew as the city economy recovered from the deep local recession of the mid-1970s. As a result,
the number of radio cabs increased steadily, reaching over 25% of the taxi industry by 1982.
The growth in radio work created a problem for passengers trying to hail cabs from the curb.
Since the number of taxis was capped, Hailers grew increasingly frustrated at lines of cabs
passing by with their roof lights indicating “on radio call.” For-Hire Book at 26.
8
Taxi and Limousine Commission (“TLC”). The TLC became the licensing and
regulatory body for both medallion taxicabs and limousines. Local Law 12 was
ambiguous as to whether it applied strictly to limousines, or also included
neighborhood car services. Because of the way subsequent City Council bills were
worded, courts limited the TLC’s jurisdiction over non-medallion vehicles to
stretch limousines seating eight passengers. (Id. at 25.)
In 1981, Mayor Koch created an independent committee to conduct a
thorough review of taxi and livery regulations. (M1144) In February 1982, the
TLC allowed the 3,200 medallion taxi owners belonging to two-way radio dispatch
associations to transfer their radios to non-medallion vehicles. (Id.) The non-
medallion cars would accept radio calls, freeing medallion taxicabs to serve street
hails exclusively. (For-Hire Book at 25.)
In 1987, the New York City Council approved Local Law 76 of 1987,
granting the TLC jurisdiction over all non-medallion vehicles seating fewer than
nine passengers. This law introduced the term “for-hire vehicle,” which is defined
as “a motor vehicle carrying passengers for hire in the city, designed to seat fewer
than nine passengers, other than a taxicab, coach or wheelchair accessible van.”
N.Y.C. Admin. Code, § 19-502(g). This definition clearly applied to neighborhood
car services as well as limousines. The law expressly prohibited for-hire vehicles
9
from picking up street hails. When the law took effect on March 15, 1987, the
TLC began to license and regulate for-hire vehicles, including liveries.
Since the passage of Local Law 76 of 1987, the TLC has been the sole
governmental entity responsible for the development, improvement and regulation
of livery service in the City. See Chapter 65 of NYC Charter, Section 2300. Title
19, Chapter 5 of the Administrative Code of New York City defines for hire
vehicles, and sets licensing, service and other requirements for the livery industry.
City regulations also require for-hire bases to provide accessible livery
service to disabled customers. See, e.g., 35 RCNY § 59B-17(c) (requiring for-hire
vehicle bases either to provide an accessible vehicle upon demand or contract with
another base to provide equivalent service).
At no time prior to the Hail Act has the State ever sought to regulate the
issuance of livery licenses or the manner in which the livery industry provides
private transportation services in New York City. In short, as correctly found by
the lower court, the record conclusively establishes that the City exclusively and
“pervasively regulates” its taxicab and livery industries and that, indeed, the City
has decades “of pre-emptive regulation” in this area. (M1223, 1229)
Finally, not only has the regulation of taxicabs and for-hire vehicles been
vested historically and exclusively in City government, but the State has repeatedly
10
recognized the City’s pre-emptive role in this area of local concern. Thus, in 1956,
the State Legislature enacted Gen. Municipal Law § 181, the current version of
which expressly affirms the authority of municipalities to regulate the “registration
and licensing of taxicabs,” to “limit the number of taxicabs to be licensed” and to
regulate “passenger pick-up and discharges by taxicabs, limousines and livery
vehicles.” N.Y. Gen. Mun. Law § 181 (emphasis added). The New York Attorney
General has characterized this statutory provision as a “home rule measure to give
municipalities power they properly should have.” 1983 N.Y. Op. Att’y Gen. (Inf.)
1008, 1983 WL 167364.
It is undisputed that the Hail Act is the first and only law that the State has
ever enacted without a Home Rule message regulating taxis or livery vehicles in
New York City.
ARGUMENT
I. THE HAIL ACT IS AN UNCONSTITUTIONAL
INTRUSION INTO LOCAL GOVERNMENT AFFAIRS
IN VIOLATION OF HOME RULE
The “theory behind home rule is very simple: it is the thought that local
problems, in which the state has no concern, can best be handled locally.” Baldwin
v. City of Buffalo, 6 N.Y.2d 168, 172-73 (1959). Here, the City’s longstanding
history of exclusively regulating taxicabs and livery vehicles is a quintessential
11
Home Rule matter. Because the Hail Act intrudes upon (indeed, usurps) the City’s
authority in this area of local governance without following the stringent
requirements of the State Constitution, it is clearly unconstitutional.
It is undisputed that the Hail Act is a “special law” since it applies to only
one city: New York City. (M74 ¶ 29) So too, the Hail Act—by overriding the
New York City Charter and various local laws and regulations—unquestionably
concerns the City’s “property, affairs or government.” (City Br. at 27-28) Thus, in
enacting the Hail Act without securing a Home Rule message from New York
City, the State legislature failed to comply with the plain requirements of the State
Constitution’s Home Rule provision. N.Y. Const. art. IX, § 2(b)(2).
As they did below, defendants nonetheless argue that they should be able to
take advantage of the judicially-created “state concern” exception to the
Constitution’s Home Rule message requirement. (City Br. at 27-62) Yet, as this
Court has made clear, State legislation that does not comply with home rule
requirements will be upheld under this narrow judicial exception only where
“subjects of state concern are directly and substantially involved.” Adler v.
Deegan, 251 N.Y. 467, 490 (1929) (Cardozo, CJ, concurring). And, as correctly
found by the lower court, that is precisely what is lacking here.
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A. Since the City Has a Long History of Exclusively Regulating Taxicabs
and Livery Cars, With Repeated Recognition by the State of the City’s
Exclusive Role in this Area of Local Concern, the Hail Act Violates
Home Rule Principles
The lower court correctly found that the regulation of taxicabs and liveries
has been historically vested exclusively in City government, and that the City’s
pervasive legislation in this area of local concern over a period of 75 years “is
conclusive” on the Home Rule question. (M1229; see also M1236 (“as a matter of
history and common sense, New York City taxicab service is not a matter of
substantial State interest or concern”))
Here, since passage of the Haas Act in 1937, the undisputed record shows an
unbroken legislative history of over 75 years of exclusive municipal regulation and
control of taxicabs and a similarly-consistent 25-year history of exclusive
municipal regulation of livery cars. Moreover, this long tradition of local control is
hardly an accident or the result of a slumbering State legislature failing to exercise
overlapping jurisdiction. Quite the contrary, with passage of General Municipal
Law § 181 almost 50 years ago in 1956, the legislature expressly confirmed that
the organization, operation, regulation and administrative control of taxicabs and
(under later amendments) livery cars is an inherently local power vested in
municipalities. Section 181, to borrow the Attorney General’s words, is a “home
rule measure,” which recognizes that the regulatory power exercised by New York
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City and other municipalities over taxis and for-hire vehicles is “a power they
properly should have.” 1983 N.Y. Op. Att’y Gen. (Inf.) 1008, 1983 WL 167364.
And, confirming this Home Rule authority, the State legislature has never before
enacted legislation regulating the City’s taxis or for-hire vehicles and, just the
opposite, has on multiple occasions passed enabling legislation for new taxi
medallions only upon a Home Rule request by the City Council, as required by the
State Constitution.
In sum, history and practice establish that regulation of the City’s taxicab
and livery industries is a matter of local (not state) concern. As the trial court more
succinctly (and colorfully) put it: “The contents of the subject legislation are all
New York City ‘stuff’.” (M1232) Since the Hail Act improperly invades an area
of exclusive local control, it cannot survive Home Rule scrutiny.8
8 In their brief, Intervenor-Defendants also assert that, since livery cars and taxicabs may
occasionally venture beyond the boundaries of New York City to pick up or discharge
passengers, this somehow creates a “substantial State interest” justifying State intrusion into the
City’s Home Rule powers. Intervenor-Def. Br. at 27-32; see also M1232 (finding only 2% cross-
border traffic for livery vehicles, “probably much less for medallioned taxicabs”), M1146. Yet,
as found by the lower court, the record “does not reveal a particular ‘concern’” that the few
passengers who want to leave the City by way of a street hail are unable to do so, much less “that
any such concern is of a ‘substantial’ order of magnitude.” (M1232); see also PBA I, 89 N.Y.2d
at 389, 391, 392 (given the vital importance of Home Rule principles, defendants may not merely
“hypothesize” or proffer “speculative assertions”, but must show that the asserted state interest
has a “foundation in the record”). As the lower court cogently observed, “if every cross-border
transaction or out of town trip to the theater district created a substantial state interest, the
borders might as well be abolished, and the State can just run everything. Occasional trips across
the periphery of New York City cannot justify the State Legislature in driving a stake through the
heart of home rule.” M1232; see also Baldwin, 6 N.Y.2d at 173 (‘“[h]ome rule for cities,
adopted by the people with much ado and after many years of agitation, will be . . . a form of
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B. The Hail Act’s Intrusion Into Local Home Rule Regulation of Taxicabs
and Livery Cars Does Not Advance a Substantial State Concern
The Hail Act does not even advance the interests asserted by the State and,
indeed, is inimical to those interests. To pass Home Rule muster, the Hail Act
must “bear[] a reasonable relationship to [a] legitimate, accompanying substantial
State concern.” PBA I, 89 N.Y.2d at 391. This heightened standard of review
requires the Court to carefully analyze the Legislature’s stated rationale for
enacting the Hail Act to determine whether or not the Act’s “interference” with
Home Rule has “a compensating offset in the advancement of a concern or interest
of the State.” PBA I, 89 N.Y.2d at 391. It does not.
Even if the Court were to credit the State’s self-serving description of its
substantial statewide interest in the New York City ground transportation industry,
it is simply not the case that the essential provisions of the Hail Act reasonably
further the State’s recited interests. Under the current single use system, liveries
provide pre-arranged service to the public at times and in such places as our
service is desired. Yellow cabs do not significantly compete for this type of
business because it would not make economic sense for them to provide 24 hour
street hail service on every residential street in New York City. (M1152)
words and little else, if the courts in applying the new tests shall ignore the new spirit that
dictated their adoption’”) (quoting Matter of Mayor of City of New York, 246N.Y. 72, 76 (1927)).
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But the Hail Act, which creates dual-use street hail and pre-arrangement
“boro taxis,” would destabilize our current system and cause irreversible damage.
The Hail Act, in essence, creates a “Mega-Livery” class of vehicles that can accept
street hails and perform pre-arranged transportation. Rather than improving
service to residents of the outer boroughs and Northern Manhattan, the Hail Act
will cause a denigration of service to these communities. The “dual use” system
will give drivers an incentive to pick up street hails instead of showing up for pre-
arranged trips. Currently, drivers in cities with dual-use systems notoriously fail to
honor pre-arranged commitments when more lucrative street hails are available.
(M1153) Under the current single use system, livery bases are able to honor their
pre-arranged commitment to the riding public by using the leverage of denying the
ill-performing driver access to the base’s pre-arranged trips. The dual use
component of the Hail Act will eliminate the only leverage bases have over
drivers’ performance.
The majority of liveries do not want to apply for Hail base permits.
However, if the Hail Act goes into effect they will have no viable alternative.
Livery vehicles that do not accept street hails would not be competitive against the
newly created “Mega-liveries” that can accept both street hails and trips by pre-
arrangement. With no viable alternative, we expect the vast majority of livery
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vehicles either to convert to Hail vehicles, and the vast majority of bases, of
necessity, to secure the permits required to affiliate those drivers, or go out of
business. This will cause the praised pre-arranged business model to disappear
from upper Manhattan and the other boroughs. Id.
The Hail Act will fundamentally change the livery businesses, and it will
harm the pre-arranged service that it provides to the public. Converting to a Hail
vehicle, solely due to having no other viable alternative will not only fail to
reasonably further the State’s asserted interests, but is very costly. For example,
Hail vehicles require annual permits, and the conversion itself, which includes
painting the vehicle green, installing meters, partitions, and roof lights to name a
few, will be costly. Bases or Hail vehicle owners will also be required to provide
Hail vehicle drivers with full workers’ compensation coverage at a cost of $1,500-
$2,000 annually per vehicle. This is a substantial increase over the cost of
membership in the Independent Livery Drivers Benefit Fund, which provides
coverage to for-hire vehicle drivers that do not accept street hails for $260 per year.
These added costs will necessarily be passed on by bases to drivers, and ultimately
to passengers who call for pre-arranged service—at least by the livery bases that
are able to remain in business at all. As participation in the Hail system drives up
the cost of pre-arranged service, this service would likely become cost prohibitive
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and out of financial reach for many low-income residents of areas outside of
Central Manhattan. (M 1154)
Ultimately, members of the public in northern Manhattan and the outer
boroughs—those who rely every day on pre-arranged livery car service to get to
doctors, work and family—will be harmed by the Hail Act’s dismantlement of the
City’s carefully-calibrated single use system. Before the State may so meddle in
the economy of New York City, fundamental Home rule principles mandate that
the State demonstrate a “compensating offset in the advancement of a concern or
interest of the State.” PBA I, 89 N.Y.2d at 390. This defendants have failed to do.
C. The Hail Act’s Power Shifting Provision Intrudes Upon Municipal
Governance Without Any Asserted State Interest
Intervenor-Plaintiffs agree with the MTBOT plaintiffs (and the lower court)
that the Hail Act, by stripping the City Council of its exclusive legislative power
under the New York City Charter to issue new taxicab medallions (NYC Charter §
2303(b)(4)), and re-assigning that municipal legislative power to the Mayor (Hail
Act, § 8), surely furthers no legitimate state interest (let alone the mandated
“substantial” state interest). See, e.g., City of New York v. Vill. Of Lawrence, 250
N.Y. 429, 443 (1929) (State Constitution’s Home Rule provision is a limitation on
the State’s power to enact laws that “deal directly with the internal affairs of a city
or the functions of its officers”); Hotel Dorset Co. v. Trust for Cultural Resources
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of City of New York, 63 A.D.2d 157, 169 (1st Dep’t) (“Only the City Council is
vested with the legislative power of the City (New York City Charter, ch. 2 s 21)
and the Legislature may not, in the guise of seeking ratification of a purported
project . . . circumvent the rightful authority lodged in the City Council”), rev’d on
other grounds, 46 N.Y.2d 358 (1978).
Indeed, nowhere in the Act, or in any legislative history, does the State
Legislature proffer any possible state interest—none—in the Hail Act’s wholesale
intrusion into the delicate allocation of legislative and executive powers in New
York City; and the creative post-hoc rationalizations and “speculative assertions”
made by defendants in their appeal briefs only serve to highlight the lack of any
“foundation in the record.” PBA I, 89 N.Y.2d at 392; see also id. at 391 (“it would
be absolutely inconsistent with the sensitive balancing of State and local interests
that has been our tradition in home rule litigation to allow the State to justify
legislation inimical to the constitutional values of home rule based purely on
considerations having no apparent role in its enactment, no matter how plausibly
conceived as an afterthought”).
In short, as correctly held by the lower court, “the ‘Legislative findings [of
the Hail Act] do not address the power-shifting aspects of the subject legislation,
and the State could hardly have a substantial interest in that.” (M1228) Since the
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Hail Act’s power transfer provision so manifestly violates the Constitution’s Home
Rule guarantee, the entire Act must be stricken under the “poison pill” clause of
the Act.9 The lower court should be affirmed.10
CONCLUSION
The Hail Act was enacted without a Home Rule message from the City
Council, it legislates in an area historically committed to local regulation and it
fails to directly further a substantial state interest. It thus violates the State
Constitution’s Home Rule provision (Article IX, § 2(b)), which protects the rights
of local governments and their elected legislative bodies to handle local affairs.
Intervenor-Plaintiffs respectfully request that this Court affirm the lower court
decision and strike down the Act.
9 Hail Act, §3, cl. 6 (“If any part of this Act ... shall be adjudged by any court of competent
jurisdiction to be invalid, the remainder of this Act shall be invalidated…”).
10 Because the Hail Act impairs and diminishes the City Council’s enumerated power under the
New York City Charter to issue new taxicab medallions, but was not enacted in two successive
legislative sessions, Intervenor-Plaintiffs further join in the MTBOT plaintiffs’ argument that the
Hail Act also violates the Double Enactment Clause of the State Constitution. (Art. IX, §
2(b)(1)).
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