To be Argued by:
RICHARD D. EMERY
(Time Requested: 30 Minutes)
New York County Clerk’s Index No. 102472/12
Court of Appeals
of the
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,
– 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 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.
BRIEF FOR PLAINTIFFS-RESPONDENTS
EMERY CELLI BRINCKERHOFF & ABADY LLP
Attorneys for Plaintiffs-Respondents
75 Rockefeller Center, 20th Floor
New York, New York 10019
Tel.: (212) 763-5000
Fax: (212) 763-5001
Date Completed: March 1, 2013
CORPORATE DISCLOSURE STATEMENT
Plaintiffs-Respondents 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 have no parents,
subsidiaries, or affiliates.
ii
TABLE OF CONTENTS
PAGE NO(s).
TABLE OF AUTHORITIES ................................................................................ v-ix
PRELIMINARY STATEMENT ............................................................................... 1
COUNTER QUESTIONS PRESENTED .................................................................. 8
COUNTER STATEMENT OF THE CASE .............................................................. 9
I. TAXICAB AND LIVERY INDUSTRY REGULATION
BEFORE 2012 ....................................................................................... 9
A. New York City’s Regulation of its Taxicabs
and Liveries ................................................................................. 9
B. The Role of the State ................................................................. 12
C. Recent Medallion Issuances: The City Council
Increased the Number of Medallions; the State Sought
a Home Rule Message Each Time ............................................ 13
D. The City Taxicab Industry Today ............................................. 15
II. LEGISLATIVE BACKGROUND OF THE
HAIL ACT .......................................................................................... 18
III. PROCEDURAL HISTORY ................................................................ 23
HISTORY OF HOME RULE .................................................................................. 24
I. THE PEOPLE’S ABIDING DESIRE FOR MEANINGFUL
HOME RULE ...................................................................................... 24
A. Plain Language and The New York Constitution ..................... 24
B. Home Rule Article Today ......................................................... 27
C. Home Rule Article Amendments From Inception
to Date ....................................................................................... 29
iii
1. 1894 ................................................................................ 29
2. 1924 ................................................................................ 31
3. 1938 ................................................................................ 32
4. 1963 ................................................................................ 33
ARGUMENT ........................................................................................................... 34
I. THE HAIL ACT IS AN UNCONSTITUTIONAL
INFRINGEMENT ON NEW YORK CITY’S POWER
OF HOME RULE ................................................................................ 34
A. Standard of Review ................................................................... 35
B. The Power Transfer Provision Interferes with
City Governance with No Stated State Concern ....................... 38
1. Defendants’ attempts to defend the Power
Transfer Provision .......................................................... 44
C. The Fact that the State has Historically Recognized
that Taxicabs Should be Regulated at the City Level
Resolves the Home Rule Analysis ............................................ 50
1. History is central to a Home Rule analysis .................... 52
2. The State’s history of regulating mass transit
is irrelevant ..................................................................... 57
3. Policy justifications support the import of
history ............................................................................. 59
D. Requiring the City to Issue $54 Million in Grants
is an Additional Infringement on the City Council’s
Powers ....................................................................................... 61
E. The Hail Act Infringes on Powers Granted in the
Statute of Local Governments, in Violation of the
Double Enactment Clause ......................................................... 63
II. EXCLUSIVE PRIVILEGES ............................................................... 66
iv
A. The Constitutional and Statutory Framework ........................... 68
B. The Privilege Does Not Apply “Generally Throughout
the State” ................................................................................... 69
C. Defendants’ Rationales for the Exclusive Privilege
Do Not Constitute Defenses to Their
Unconstitutionality .................................................................... 71
CONCLUSION ........................................................................................................ 73
v
TABLE OF AUTHORITIES
PAGE NO(s).
STATE CASES
19th St. Assoc’s v. State,
79 N.Y.2d 434 (1992) ................................................................... 7, 68, 69, 70
Adler v. Deegan,
251 N.Y.467 (1929) ............................................................................... passim
Admiral Realty v. City of New York,
206 N.Y. 110 (1912) ...................................................................................... 59
Baldwin v. City of Buffalo,
6 N.Y.2d 168 (1959) ......................................................................... 35, 36, 55
Boreali v. Axelrod,
71 N.Y.2d 1 (1987) .................................................................................. 48-49
Bugeja v. City of New York,
24 A.D.2d 151 (2d Dep’t 1965),
aff’d, 17 N.Y.2d 606 (1966) .......................................................................... 48
City of New York v. Patrolmen’s Benev. Ass’n of City of New York, Inc.,
89 N.Y.2d 380 (1996) (“PBA I”) .......................................................... passim
City of New York v. State,
168 Misc.2d 750 (Sup. Ct. 1995) ............................................................. 46-47
City of New York v. State,
94 N.Y.2d 577 (2000) .............................................................................. 56-57
City of New York v. Vill. of Lawrence,
250 N.Y. 429 (1929) .............................................................................. passim
City of Rochester v. Gutberlett,
211 N.Y. 309 (1914) ...................................................................................... 72
Consumers Union v. State,
5 N.Y.3d 327 (2005) ......................................................................... 69, 70, 71
vi
Corning v. Donohue,
37 A.D.2d 213 (3d Dep’t 1971),
aff’d, N.Y.2d 209 (1971) ............................................................................... 72
Floyd v. N.Y. State Urban Dev. Corp.,
33 N.Y.2d 1 (1973) ................................................................................. 65, 66
Fox v. Mohawk & Hudson River Humane Soc.,
165 N.Y. 517 (1901) ...................................................................................... 70
Hotel Dorset Co. v. Trust for Cultural Res. of City of New York,
46 N.Y.2d 358 (1978),
reversing, 63 A.D.2d 157 (1st Dep’t 1978) ...................................... 42, 43, 44
In re Application of Union Ferry Co. of Brooklyn,
98 N.Y. 139 (1885) ........................................................................................ 70
In re Henneberger,
155 NY 420 (1898) ........................................................................................ 69
In re Mayor of City of New York,
246 N.Y. 72 (1927) ........................................................................................ 61
In re New York Elev. Ry. Co.,
70 N.Y. 327 (1877) ........................................................................................ 24
Matter of Elm St.,
246 N.Y. 72 (1927) ........................................................................... 31, 32, 36
Matter of New York El. R. Co.,
70 N.Y. 327 (1877) ........................................................................................ 70
McAneny v. Bd. of Estimate of City of New York,
232 N.Y. 377 (1922) ............................................................................... 30, 59
Newell v. People,
7 N.Y. 9 (1852). ................................................................................ 24, 25, 26
Osborn v. Cohen,
272 N.Y. 55 (1936) ................................................................................ passim
vii
Patrolmen’s Benevolent Ass’n of City of New York Inc. v. City of New York,
97 N.Y.2d 378 (2001) (“PBA II”) ................................................................. 34
People v. Cuneen,
94 Misc. 509 (Gen. Sess. 1916) ....................................................................... 9
People v. Griswold,
213 N.Y. 92 (1914) ........................................................................................ 72
People v. Purdy,
4 Hill 384 (Ct. for Corr. of Errors 1842) ....................................................... 25
People v. Rathbone,
145 N.Y. 434 (1895) ................................................................................ 24-25
Rudack v. Valentine,
163 Misc. 326 (Sup. Ct. 1937) ....................................................................... 10
Silverman v. Benmor Coats, Inc.,
61 N.Y.2d 299 (1984) .................................................................................... 49
Straniere v. Silver,
218 A.D.2d 80 (3d Dep’t 1996)
aff’d, 89 N.Y.2d 825 ...................................................................................... 15
Suffolk Cnty. Builders Ass’n, Inc. v. Suffolk Cnty.,
46 N.Y.2d 613 (1979) ............................................................................. 14, 40
Sun Printing & Publishing Ass’n v. Mayor,
152 N.Y. 257 (1897) ...................................................................................... 30
Torsoe Bros. Constr. Corp. v. Bd. of Trustees of Monroe,
49 A.D.2d 461(2d Dep’t 1975) ............................................................... 14, 40
U.S. Steel Corp. v. Gerosa,
7 N.Y.2d 454 (1960) ............................................................................... 14, 40
United Taxicab Bd. of Trade v. City of New York,
150 Misc. 636 (Sup. Ct. 1933) ......................................................................... 9
viii
Wambat Realty Corp. v. State,
41 N.Y.2d 490 (1977) ............................................................................. 53, 63
STATE AND LOCAL CONSTITUTIONAL PROVISIONS, STATUTES, &
RULES
Chapter 9 of the N.Y. Laws of 2012 (the “Hail Act”) ..................................... passim
N.Y. Const. art. IX, § 1 ............................................................................................ 27
N.Y. Const. art. IX, § 2 .................................................................................... passim
N.Y. Const. art. IX, § 3 ..................................................................................... 34, 36
N.Y. Const. art. XVI, § 1 ............................................................................ 14, 40, 57
N.Y. Const. of 1894, art. XII, § 2 ............................................................................ 29
N.Y. Const. of 1924, art. XII, § 2 ............................................................................ 31
N.Y. Const. of 1938, art. IX, § 11 ............................................................... 32, 33, 71
N.Y. Const. of 1963, art. IX, § 1 .............................................................................. 33
N.Y. Const. of 1963, art. IX, § 2 ................................................................. 33, 34, 65
N.Y. Exec. Law § 71 .................................................................................................. 2
N.Y. Gen. Mun. Law § 181 ............................................................................. passim
N.Y. Stat. Loc. Gov’t. § 10 ............................................................................... 64, 66
N.Y. Transp. Law § 15-b ......................................................................................... 58
N.Y. Veh. & Traf. Law § 370 .................................................................................. 58
N.Y.C. Admin. Code § 19-504 ................................................................... 11, 16, 58
N.Y.C. Admin. Code § 19-506 ................................................................................ 64
N.Y.C. Admin. Code § 19-507 ......................................................................... 11, 64
ix
N.Y.C. Admin. Code § 19-512 ................................................................................ 64
N.Y.C. Admin. Code § 19-516 ......................................................................... 11, 64
N.Y.C. Admin. Code § 19-532 ................................................................................ 13
N.Y.C. Admin. Code § 20-248 ................................................................................ 58
N.Y.C. Admin. Code § 25-29 .................................................................................. 64
N.Y.C. Charter § 2303 .......................................................................... 11, 39, 49, 64
OTHER AUTHORITIES
1983 N.Y. Op. Att’y Gen. (Inf.) 1008, 1983 WL 167364 ...................... 6, 12, 56, 61
Brennan Center for Justice, “Meaningful Ethics Reforms for the ‘New’ Albany”
(2011) ............................................................................................................. 19
City of New York, The Mayor’s Mgmt. Report: Preliminary Fiscal 2012, 125
(February 2012) ............................................................................................. 15
David Seifman, $1M Mike Gift to State GOP, N.Y. Post
(Sept. 26, 2012) .............................................................................................. 20
Jacob Gershman, Bloomberg Gives GOP Record Gift, Wall St. J.
(Sept. 25, 2012) .............................................................................................. 20
Matthew Daus, N.Y. Taxi & Limousine Comm’n, Testimony on the Proposed
Executive Budget for Fiscal Year 2004 (May 22, 2003) ............................... 14
New York State Bar Association Task Force on Government Ethics (2011) ......... 20
Opinion of Corporation Counsel Crotty, May 9, 1994,
1994 WL 925886 ........................................................................................... 36
1
PRELIMINARY STATEMENT
This appeal is not about taxicabs and the provision of service to the
outer boroughs of New York City. It is not about the medallion franchise and the
exclusive right to hail a cab. It is only tangentially about the history of
transportation services in New York City and New York State’s interest in
transportation in the five boroughs. What it is about, for the purpose of this
Court’s review, is the constitutional protection for the right of municipalities to
allocate powers and jurisdiction within their government structures—among and
between the municipal executive and legislative bodies.
Absent an adequate justification for State legislative interference in
this delicate, local, and highly evolved allocation of power and responsibility,
Home Rule provisions of the New York State Constitution protect local
governments from State legislative interference.
In this case, the State Legislature, without providing any justification,
fundamentally altered the long-established relationship between the Mayor and the
New York City Council as defined by the City Charter. Chapter 9 of the Laws of
2012 (the “Hail Act”) transferred the power to issue taxi medallions from the
Council to the Mayor. In what was plainly a power grab by the Mayor, executed
by the Legislature at his behest, and born of the Mayor’s frustration with the City
Council’s non-cooperation on an issue high on the Mayor’s agenda, Section 8 of
2
the Hail Act directly contravenes the State Constitution’s Home Rule provisions,
which prohibit special laws that interfere with City governance absent a Home
Rule message issued by the New York City Council. See N.Y. Const. art. IX, §
2(b)(2) (“the legislature . . . 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 [with a certificate of necessity from the Governor and a Home Rule
message by the New York City Council]”).
Defendants,1 in effect, ask this Court to do away with a fundamental
aspect of the New York State Constitution’s Home Rule protections. These
protections have been enshrined in our Constitution since 1894 and reaffirmed and
progressively strengthened by the People of New York in three successive
Constitutional Amendments. The origins and history of Home Rule, as set forth
below, establish this point clearly. Yet the right to Home Rule has never been
more imperilled than in this case.
Defendants ask this Court to rule that, notwithstanding the Home Rule
protections of the Constitution, a municipality cannot separate its powers as it sees
fit. Defendants argue that the State Legislature can overrule the City of New
1 The term “Defendants” is used herein to refer collectively to the City Defendants, the
Intervenor-Defendants, and the Attorney General, a non-party who appeared pursuant to
Executive Law § 71.
3
York’s Charter without any stated purpose for this interference and without any
request to do so from the local government. If Home Rule means anything, at a
bare minimum it preserves the City’s right to have its Charter allocate specified
powers to the Mayor and others to the City Council.
Here, the specified power at issue is the power to regulate entry into
the taxicab industry by issuing new taxicab medallions. New York City’s Charter
grants that power to the City Council. The Hail Act, without explanation, transfers
that power to the Mayor. Under Section 8 of the Hail Act, the Mayor “alone” can
decide whether and when to issue up to 2,000 new medallions (hereinafter the
“Power Transfer Provision”). This provision and the authority it enshrines is at the
heart of the Hail Act. It will generate up to $2 billion for the City budget.
As New York City’s Public Advocate stated in his amicus curiae
submission to the Supreme Court: if the Hail Act is upheld, “state legislators may
consider altering the rights and duties of the city’s governing branches in other
areas as well. . . . Instead of political compromises between coequal branches of
government, decisions for New York City may be made by the local governing
4
entity which is most successful at convincing the state [legislature] that a check on
power provided by another branch impedes a worthy cause.” M356.2
And it is of particular concern that the Hail Act’s unexplained
reallocation of powers resulted, as the Supreme Court found, from Mayor
Bloomberg’s lobbying of the Albany Legislature. When Mayor Bloomberg first
proposed his plan in early 2011, his administration recognized that City Council
approval was required. Yet when the City Council refused to pass the Mayor’s
legislation as written, and instead sought revisions consistent with the Council’s
policy views, the Mayor repaired to Albany where he could gain adoption to his
satisfaction.
This Court has repeatedly reaffirmed that the core of Home Rule
protection is the limitation on the State’s power to intervene in “the internal affairs
of a city or the functions of its officers.” City of New York v. Vill. of Lawrence,
250 N.Y. 429, 443 (1929). A municipality’s separation of powers between its
legislature and its executive is precisely the municipality’s “internal affairs” and
“function of its officers,” constituting the “property, affairs or government of [a]
2 Where possible, record citations are to the record on appeal in Metropolitan Taxicab Board of
Trade, et. al. v. Bloomberg, et. al., and are preceded with an “M” to so designate, consistent with
Defendants’ nomenclature. To the extent certain documents are only available in the record on
appeal in Taxicab Service Association, et. al. v. The State of New York, et al., such record
citations are preceded with a “T” to so designate.
5
local government” that are protected by the Home Rule provisions. N.Y. Const.
art. IX, § 2(b)(2).
The State Legislature provided no rationale for the Power Transfer
Provision. In a Home Rule analysis, this is constitutionally dispositive: State
legislative infringement on a city’s governmental allocation of powers can only be
countenanced, if at all, by a “substantial State concern” “in the record,” and neither
counsel, nor the court, can “hypothesize the motivations” for legislation in a Home
Rule challenge. City of New York v. Patrolmen’s Benev. Ass’n of City of New
York, Inc., 89 N.Y.2d 380, 390-92 (1996) (“PBA I”) (emphasis added).
Notably, it would not have made any difference in serving the
legislative purposes articulated for the Hail Act if the Power Transfer Provision
had been omitted from this statute. If the power to issue taxi medallions had
remained with the Council, the Legislature’s stated purposes—outer-borough hail
service and improved disability access—would have been equally served. This
observation reveals the degree and nature of the Home Rule violation that, without
any basis (other than mayoral pique), ravages local allocation of power.
Because the violation of the State Constitution is so clear in this case,
the Court need go no further in striking the Hail Act: the Legislature chose to insert
6
a “poison pill” into the Hail Act by declaring that if any portion of the Act is
unconstitutional, the entire Act fails. Act § 3 (sec. 6).
But the Hail Act is unconstitutional for multiple additional reasons.
First, since 1937 New York City has regulated its own taxicabs, and the State has
repeatedly reinforced that regulation of City taxicabs falls within the City’s
purview. By general law (Gen. Mun. Law § 181), the State provided that all
municipalities may regulate taxicabs in their respective jurisdictions, and the
Attorney General opined that Gen. Mun. Law § 181 is “a home rule measure to
give municipalities power they properly should have.” 1983 N.Y. Op. Att’y Gen.
(Inf.) 1008, 1983 WL 167364.
Recognizing the historical division between powers that appropriately
reside with the municipality, versus those that reside with the State, the State has
always sought Home Rule messages from the City before regulating New York
City’s taxicabs. It is ironic and unprecedented that counsel for the City’s
government here claims that the State has the power to override New York City’s
approval of new taxi medallions. Taxicabs are a core Home Rule matter. Given
this history, the State is constitutionally barred from passing a special law
concerning the City’s taxicabs without a Home Rule message.
7
Second, as described above, the Hail Act nullifies that portion of the
City Charter that grants power to the City Council to issue medallions—giving it to
the Mayor—and, further, amends specific provisions of the New York City
Administrative Code. Yet Article IX, Section 2(b)(1) of the New York State
Constitution (termed the “Double Enactment Clause”) requires that abridgment of
powers granted to local governments must be enacted in two consecutive sessions
of the Legislature. Because the Hail Act was enacted only once, it is
unconstitutional.
Third, the Hail Act provides the exclusive right to current members of
the livery industry to purchase Hail licenses and base permits, without any
legislative explanation for this windfall. Exacerbating the exclusive nature of this
option is the fact that current purchasers of Hail licenses can initially buy them for
the bargain-basement annual price of $500 and resell them at any price. Current
members of the taxicab industry and everyone else, regardless of years of
experience, are precluded from purchasing these licenses. This “has all the indicia
of special interests legislation,” 19th St. Assoc’s v. State, 79 N.Y.2d 434, 444
(1992), in violation of the State Constitution’s Exclusive Privileges provision
(Article III, Section 17).
8
Defendants’ arguments to uphold the Hail Act focus on the intricacies
of taxicab and livery regulation and attempt to convince this Court of the wisdom
of the Hail Act’s statutory scheme. This Court need not wade into these murky
waters that are quintessentially a local concern. The only policy considerations
this Court can and should consider are the articulated legislative findings found in
the Hail Act itself, as well as the underpinnings of the Constitution’s Home Rule
Provisions.
COUNTER QUESTIONS PRESENTED
1. Does a State law that is passed without a Home Rule message violate the
Constitution’s Home Rule provisions where the law transfers power vested
by a municipality in its legislature to that municipality’s mayor with no
legislative justification whatsoever? Yes.
2. Does a State law that is passed without a Home Rule message, on a topic
historically and traditionally regulated by New York City, where the State
had repeatedly reaffirmed the City’s power to regulate, including by seeking
multiple Home Rule messages to support prior State legislation on the topic,
violate the Constitution’s Home Rule provisions? Yes.
9
3. Does a State law that was not enacted by two consecutive sessions of the
Legislature violate the Double Enactment Clause where the State law
nullifies a portion of the City’s Charter and amends the City’s statutes? Yes.
4. Does a State law violate the Constitution’s Exclusive Privileges clause
where the law, without explanation, gives only current members of an
industry the exclusive right to purchase a license at a low fixed price and
then resell at inflated values? Yes.
COUNTER STATEMENT OF THE CASE
I. TAXICAB AND LIVERY INDUSTRY REGULATION BEFORE 2012
A. New York City’s Regulation of its Taxicabs and Liveries
Regulation of the privately-owned and operated taxicab industry in
New York City has always been at the local level. The City began issuing taxicab
medallions in the 1930s, when open entry to the taxicab industry and the Great
Depression combined to produce an oversupply of taxicab drivers.3 T295. Due to
3 The City’s regulation of taxicabs began in the late 19th century. See L. 1897, ch. 378, § 49
(Greater New York charter, adopted by the State in 1897, provided that the City had the
exclusive power “to provide for the licensing and otherwise regulate the business of . . .
hackmen”); People v. Cuneen, 94 Misc. 509, 524 (Gen. Sess. 1916) (1913 City “Public Hack
Ordinance” provided for the licensing of “public hacks” by “bureau of licenses”); United
Taxicab Bd. of Trade v. City of New York, 150 Misc. 636, 638 (Sup. Ct. 1933) (power over hack
licenses transferred to City police department in 1925, then transferred in 1931 to City “board of
taxicab control,” which regulated licenses and set a “schedule of rates of fare”).
10
hyper-competition these drivers were unable to earn a living wage, and City streets
were often crowded with drivers cruising desperately for paying passengers.4 A
“cardinal purpose of the City’s limitation on medallions is to reduce competition to
manageable levels.” M1221. After determining that these problems could be
solved by restricting entry into the taxicab market, in 1937 the City Board of
Aldermen passed the Haas Act, which provided that no new taxicab licenses would
be issued, effectively limiting the number of available licenses to 13,595—the
number in operation when the Hail Act was passed. A number of licenses were
subsequently surrendered over time and not replaced. T296.
The for-hire vehicle industry (referred to herein as the “livery
industry”),5 beginning with neighborhood car services, developed in the 1950s and
1960s to supplement the medallion taxicabs. M1143-44. The distinctive feature of
liveries is that they operate only by “prearrangement”—the passenger contacts a
base and requests a pickup from a livery vehicle. While taxicab hail service is well
suited to areas with high street-traffic, it is not as well suited to less densely
populated areas such as much of the outer boroughs. See M1152 (“[I]t would not
make economic sense for [taxicabs] to provide 24 hour street hail service on every
4 See Rudack v. Valentine, 163 Misc. 326, 327-29 (Sup. Ct. 1937) (describing state of the
industry in the 1930s).
5 The for-hire industry includes neighborhood car services, black cars, and limousines.
11
residential street in New York City”). For that reason, residents outside central
Manhattan “know[] the number of [their] local livery car service by heart.” M278.
In 1971, the City Council enacted local laws establishing that
medallion taxicabs exclusively possess the right to accept street hails from
passengers. See N.Y.C. Admin. Code §§ 19-504(a)(1), 19-507(a)(4), 19-516(a).
The Taxi & Limousine Commission (“TLC”) was created that same year; the
agency’s sole purpose is licensing and regulating taxicabs and other for-hire
vehicles in the City. As the Supreme Court found, the City “pervasively regulates
its taxi industry”; in fact, it concluded, New York City has “at least 75 years of
pre-emptive legislation” in this area. M1223; M1229.
While the TLC is responsible for regulating existing taxicabs and
liveries, the City Council has retained the all-important power to regulate entry into
the taxicab industry. Only the City Council is authorized under the City Charter to
increase the number of medallion taxicabs in the City. Neither the Mayor nor the
TLC can issue additional taxicab medallions without the passage of a local law by
the City Council: “Additional taxicab licenses [medallions] may be issued from
time to time only upon the enactment of a local law providing therefor.” N.Y.C.
Charter § 2303(b)(4).
12
B. The Role of the State
The State Legislature has long recognized that New York City is
empowered to regulate taxicabs and other for-hire vehicles and that the State
cannot interfere with that power without City approval. In 1956, the State
Legislature first passed Gen. Mun. Law § 181, which now provides that
municipalities may regulate the “registration and licensing of taxicabs,” “may limit
the number of taxicabs to be licensed,” and may regulate “passenger pick-up and
discharges by taxicabs, limousines and livery vehicles.” N.Y. Gen. Mun. Law
§ 181.6 While the law has been amended various times over the years, such
amendments have not altered the essential recognition that municipalities have the
power to regulate taxicabs and liveries.
The New York Attorney General has opined that Gen. Mun. Law
§ 181 is “a home rule measure to give municipalities power they properly should
have.” 1983 N.Y. Op. Att’y Gen. (Inf.) 1008, 1983 WL 167364. The Legislature
saw the provision as “a means to enable local governments to deal with the
problem of an over supply of taxicabs that would both handicap drivers in their
ability to make an adequate living and complicate control of vehicular traffic on
6 Notably, while Defendants point to a 1936 State committee that investigated the New York
City taxicab industry, AG Br. at 15-16, the State took no action as a result. Instead, in 1956, the
Legislature acted by general law in passing N.Y. Gen. Mun. Law § 181.
13
streets already overburdened with too many cars.” Id. The Attorney General
makes no mention of his office’s own opinion in his brief before this Court.
While the Defendants’ briefs include in their factual recitation every
time the State Legislature so much as mentioned New York City’s taxicabs, it is
undisputed that the Hail Act is the first law the State Legislature has ever passed
regulating New York City taxicabs without a Home Rule message.
C. Recent Medallion Issuances: The City Council Increased the
Number of Medallions; the State Sought a Home Rule Message
Each Time
Perhaps remembering the disastrous outcomes of Depression-era open
entry into the taxicab market, the City Council has only occasionally increased the
number of medallions. The first such issuance occurred in 1996, when the City
added 400 new medallions; a second issuance occurred after City Council action in
2003, when the City added approximately 900 new medallions, 9% of which were
for accessible taxicabs; and a third issuance occurred in 2006, when the City added
150 medallions for accessible taxicabs. M164-65 ¶¶ 14-16; M207-21; see also
N.Y.C. Admin. Code § 19-532(b).
On each of these three occasions, the Legislature has cooperated with
the City Council, increasing the number of taxicab medallions in New York City,
but only after seeking a Home Rule message from the City Council and in
14
conjunction with City Council authorization of new medallions.7 The technical
reason the City Council sought State legislative authorization was to ensure that
the Council had the authority to sell the medallions at auction for a market price
substantially above the cost of licensure, without being faced with claims that the
sales were void as unconstitutional taxes.8 Had the City been willing to issue the
medallions for a fee that approximates the cost of license administration and
regulation, no State involvement or approval would have been necessary.
The State’s repeated requests for Home Rule messages from the City
before passing laws that increased the number of taxicab medallions are an implicit
recognition that the State could not act in the absence of such messages. M164-65
7 See M207-M218; Matthew Daus, N.Y. Taxi & Limousine Commission, Testimony on the
Proposed Executive Budget for Fiscal Year 2004 (May 22, 2003),
http://www.nyc.gov/html/tlc/downloads/pdf/testimony052203.pdf (“As you know, the State
budget bill that was recently adopted by the Senate and the Assembly contained enabling
legislation authorizing the City of New York to issue up to 900 additional taxicab
medallions. . . . This bill was supported by the City Council, which issued a home rule
message.”).
8 While cities like New York City have broad authority to enact fees that are quid pro quo
payments for services they provide (see N.Y. Mun. Home Rule Law § 10(1)(ii)(a)(9-a) (enabling
cities to collect “rentals, charges, rates or fees”)), charges that exceed actual administrative costs,
such as the six-figure auction price for taxicab medallions, are considered taxes, which
constitutionally only the State Legislature may impose. N.Y. Const. art. XVI, § 1; Torsoe Bros.
Constr. Corp. v. Bd. of Trustees of Monroe, 49 A.D.2d 461, 465 (2d Dep’t 1975); see also
Suffolk Cnty. Builders Ass’n, Inc. v. Suffolk Cnty., 46 N.Y.2d 613 (1979) (municipal licensing
fees without “reasonable correspondence” to administrative costs constitute improper assumption
of state power to tax); U.S. Steel Corp. v. Gerosa, 7 N.Y.2d 454, 459 (1960) (state may delegate
limited taxing power to localities).
15
¶¶ 14-16; M207-21.9 In their briefing before this Court, Defendants attempt to
bury these previous Home Rule messages; the City does not even mention the
previous messages until page 58 of its brief. See Municipal Appellants’ Brief
(“City Br.”) at 58; see also State Appellants’ Brief (“AG Br.”) at n. 13 & 30
(referencing previous Home Rule messages in footnotes only).
D. The City Taxicab Industry Today
Under the careful and deliberate auspices of City regulation, not only
has the yellow cab industry become culturally iconic, it has been an unparalleled
financial success. Today, the industry is a critical component of mass
transportation in New York City and a vital aspect of the private business
economy. The City’s 13,237 taxicabs—more than 5,000 of which are individually
owned and operated—provide approximately 240 million rides per year and
generate more than $1.8 billion in fares annually.10 And nearly 50,000 individuals
are licensed by the TLC to drive taxicabs.11
9 See generally Straniere v. Silver, 218 A.D.2d 80, 82 (3d Dep’t 1996) (describing legislative
process of determining whether Home Rule message from the City was required), aff’d, 89
N.Y.2d 825.
10 City of New York, The Mayor’s Mgmt. Report: Preliminary Fiscal 2012, 125 (February
2012), http://www.nyc.gov/html/ops/downloads/pdf/mmr/0212_mmr.pdf; T271.
11 See N.Y. Taxi & Limousine Commission, Current Licensed Medallion Taxicab Drivers,
http://www.nyc.gov/html/tlc/downloads/excel/current_medallion_drivers.xls.
16
In large part because the City Council has ensured that only holders of
medallions have the exclusive right to accept hails from passengers in the street,
and because entry into the street hail industry has been tightly restricted,
medallions have been valuable investments, recently selling for between $700,000
and $1,000,000.12 Many taxicab medallion owners are individual owner-drivers
and small business owners who have their life savings and retirement plans tied up
in the medallion industry. See N.Y.C. Admin. Code § 19-504(i) (42% of
medallion owners must be individual owner-drivers).
While the Attorney General’s factual recitation claims that
“deficiencies and disparities” in New York City taxicab service reflect a
“regulatory failure at the local level,” AG Br. at 4-5, this is simply not true. It is
also legally irrelevant. The Attorney General’s assertions inappropriately rely on a
bevy of factual material never raised before Supreme Court and, worse yet, find no
support in the legislative record. Moreover, it is a strange assertion to be levied at
the TLC, which, prior to this administration, has been a model for local regulatory
agencies that balance the complex social and economic interests at play in the for-
hire transportation business.
12 See N.Y. Taxi & Limousine Commission, June 2011 Medallion Transfers,
http://www.nyc.gov/html/tlc/downloads/pdf/june_2011_medallion_transfers.pdf
17
And while Defendants claim that more medallions have long been
needed to meet passenger demand, demand has fluctuated over the years and
previous evaluations have concluded that no additional taxicabs were appropriate.
T296, T298. Available evidence also indicates that increased demand has resulted
in increased productivity: taxicab drivers have consistently transported passengers
for more of their shift and remained empty for less time. T296. And when
demand outstripped supply, the City Council responded appropriately, by raising
the number of medallions on three separate occasions, adding over 1,000 new
medallions in the last decade alone and explicitly recognizing the need to increase
taxicab availability for the disabled. M164-65 ¶¶ 14-16; M207-21.
Similarly, while Defendants criticize the City Council for not solving
the problem of illegal street hails in the outer boroughs, the fact is that this issue
spent little time percolating in City government before Mayor Bloomberg resorted
to Albany. The single TLC study that Defendants cite that claims that illegal street
hails were widespread, was done in November 2010, just two months before
Mayor Bloomberg rolled out his plan. M24, M115. Thus, it is at least disputed, if
not totally erroneous, for the Attorney General to claim that there was a
demonstrated failure by the City Council to act. AG Br. at 18. In any event, the
Legislature did not make any finding to that effect.
18
II. LEGISLATIVE BACKGROUND OF THE HAIL ACT
In early 2011, Mayor Bloomberg announced that he would seek
changes in the existing taxicab and livery regulatory system. M168-71. Under his
proposal, for the first time in New York City history, non-medallion for-hire
vehicle drivers, many of whom have operated illegally for decades picking up
street hails that are exclusively the right of taxicabs, would be permitted to accept
street hails in most locations throughout New York City. TLC Commissioner
Yassky, a former City Council member, assured that “there will be a full legislative
process” on this proposal as it “requires City Council” approval. Id. He further
recognized that, as to some of the details of the proposal (e.g., whether the new
Hail vehicles should “be allowed to pick up at the airport”), the TLC had certain
positions but Yassky “expect[ed] that the City Council may seek to change some of
these positions.” Accordingly, he stated that, “Council approval is likely to take
months.” Id.
In the months following this announcement, industry groups worked
with the TLC, the Mayor’s office, and the Chair of the City Council’s
Transportation Committee to craft a viable and fair proposal to increase service in
the outer boroughs. M269. For example, the industry proposed “revisions to the
Administrative Code to increase penalties for service refusals by taxicab drivers,
pilot programs to increase the use of livery stands, outer-borough minimum service
19
requirements for taxicabs, and expanding lawful, licensed services.” M269-70.
Throughout this debate, there were assertions by various interested parties, not
backed by much more than anecdotal evidence, that service to the outer boroughs
and northern Manhattan was inadequate, though those areas were served with
prearranged service by liveries, taxicab stands, and taxicabs.
Nevertheless, at the first signs of opposition to some of the Mayor’s
proposals, while negotiations and debates were ongoing, Mayor Bloomberg
quickly became uninterested in considering any of the compromise plans offered
by industry groups. See id. He was equally uninterested in reaching a compromise
with the City Council when it became clear in the months that followed that the
City Council would not embrace his own proposal whole hog. Rather, although
the Council was ready, willing, and able to address the Mayor’s concerns, the
Mayor ignored its efforts at compromise. M173-75.
Defendants charge the City Council with being a lackey of the taxicab
industry while casting Albany’s approval of the Mayor’s plan as resulting from a
thoughtful policy analysis. This distinction between the State Legislature and the
City Council has it exactly backwards.13 (It is perhaps notable that Mayor
13 See, e.g., Brennan Center for Justice, “Meaningful Ethics Reforms for the ‘New’ Albany”
(2011), at 1, available at
http://www.brennancenter.org/sites/default/files/legacy/Democracy/Meaningful_Ethics_Reform_
20
Bloomberg is the top contributor to the New York State Senate Republicans in the
last decade, having donated over $3 million.14) Moreover, such claims belittle the
significant principled opposition to the Mayor’s plan, including: (1) that increasing
medallions and Hail liveries will increase traffic congestion, with potential
environmental effects and negative effects on demand for public transportation; (2)
the limited demand for street hail service in the outer boroughs (far less than would
warrant 18,000 new licenses); and (3) the detrimental effects on local car services
and the public who rely on pre-arranged service. See M278 (Council Member
Fidler: the Mayor’s proposal is a “solution in search of a problem.”); M1154 ¶ 12.
City Council members may also have been rightly concerned about destabilizing
New_Albany_Final.pdf (“Since [the 2007 reform law], the number of scandals in the legislature
has only increased, and the influence of special interest money seems to have gained even greater
currency, corrupting government officials and cheating the people of the State.”); New York
State Bar Association Task Force on Government Ethics (2011), at 9, available at
http://www.nysba.org/AM/Template.cfm?Section=Home&Template=/CM/ContentDisplay.cfm
&ContentID=46069 (“New York has suffered the ignominy of ethics scandals that have toppled
statewide elected officials, high-level appointed officials and elected representatives in both
houses of the state Legislature. The breadth of these scandals and the regularity with which they
seem to occur has resulted in a dramatic loss of public confidence in government. This perceived
lack of transparency and accountability is exacerbated by a lack of disclosure, loose ethics rules
of limited applicability and a disjointed enforcement regime.”).
14 M650; Jacob Gershman, Bloomberg Gives GOP Record Gift, Wall St. J., Sept. 25, 2012,
http://online.wsj.com/article/SB10000872396390444180004578018910577401972.html
(reporting that “Bloomberg has given New York state Senate Republicans a $1 million
contribution, believed to be the largest single donation ever given to the legislative conference”
and the “mayor had already donated more than $2 million to the Senate GOP conference since
2006, not including contributions to individual lawmakers”); David Seifman, $1M Mike gift to
state GOP, N.Y. Post, Sept. 26, 2012,
http://www.nypost.com/p/news/local/mike_gift_to_state_gop_j52gYEUbpB1ckN6WAkEjKN?ut
m_medium=rss&utm_content=Local (“The mayor has been the Senate GOP’s largest benefactor
since taking office in 2002.”).
21
medallion prices given the large number of people who rely (directly and
indirectly) on a strong taxicab industry, and given that the City has reaped
substantial income by auctioning medallions with the promise that the medallion
offered the exclusive right to accept street hails. Indeed, the Governor stated that
the “optimum goal is to design a plan” that, inter alia, “respects the medallion
franchise.” M183.
Recognizing that the City Council would not provide carte blanche
approval, Mayor Bloomberg and his staff then initiated a lobbying effort to
convince the State Legislature in Albany to pass the Hail Act without City Council
approval. M173-75. Legislation was introduced in the closing days of the State
legislative session in June 2011, and a bill was passed at the eleventh-hour of that
session by the State Senate and Assembly without a single hearing or public
debate, and without a Home Rule message from New York City (“2011 Act”).
When challenged on the lack of City Council approval in contrast to the three
Home Rule messages for prior medallion increases, Mayor Bloomberg dismissed
the Home Rule objections as merely “tradition.” M173-75.
The resulting bill was so flawed that the legislators did not
immediately present it to the Governor. Ultimately, the Governor signed the bill
with the promise that it would be rewritten by a Chapter Amendment. M180-81.
22
The Chapter Amendments were passed and then signed by the Governor on
February 17, 2012 and became Chapter 9 of the Laws of 2012 (“the Hail Act”).
M80-96. Like the 2011 Act, the 2012 Act was passed without a Home Rule
message from the City Council.15
As Defendants extensively detail the terms of the Hail Act, we will
not restate them herein. We draw the Court’s attention, however, to the Power
Transfer Provision, Section 8, which provides: “The city of New York may, acting
by the mayor alone, administratively authorize the TLC . . . to issue up to two
thousand [accessible] taxicab licenses in addition to those already issued.” We
also note that Section 3 (sec. 6) contains a “poison pill”: If “any part” of the Hail
Act “shall be adjudged by any court of competent jurisdiction to be invalid, the
remainder of this act shall be invalidated and shall be deemed to have not taken
effect.” Act § 3 (sec. 6).
Also of note is the limited nature of the Legislature’s findings.
Section 1 of the Hail Act “declares” that taxicab access is a “matter of substantial
state concern,” and the “majority of residents and non-residents of the city of New
York do not currently have sufficient access to legal, licensed taxicabs available
for street hails in the city of New York.” The findings further state that “it is a
15 The full text of the Hail Act is at M80-96 and is cited herein as “Act § [cited section].”
23
matter of public health, safety and welfare to ensure adequate and reliable
transportation accessible to individuals with disabilities in the city of New York,”
and the supply of accessible taxicabs and liveries is insufficient to meet the needs
of the disabled. Act § 1. Crucially, there is no mention of “regulatory failure at
the local level,” cf. AG Br. at 4-5, no rationale at all given for the Power Transfer
Provision, and no purpose stated for the exclusive grants of licenses to the current
livery industry.
III. PROCEDURAL HISTORY
Plaintiffs brought claims against only municipal defendants (Mayor
Bloomberg, the City of New York, the TLC, and its Commissioner) and sought a
preliminary injunction. The Attorney General appeared pursuant to Executive Law
§ 71. See M574. Livery groups intervened for both plaintiffs and defendants.
Public Advocate Bill de Blasio appeared as amicus curiae explaining that the Hail
Act unconstitutionally infringed on the City’s right to govern its internal affairs by
transferring power from the City Council to the Mayor. M346. Manhattan
Borough President Scott Stringer subsequently appeared as amicus curiae in
support of Defendants’ position. M1119.
Defendants sought summary judgment arguing that no facts were in
dispute; Plaintiffs cross-moved for partial summary judgment on their Exclusive
24
Privileges claim only.16 The Supreme Court’s order granted summary judgment to
Plaintiffs, holding that the Hail Act violated (1) the Constitution’s protection for
Home Rule, including the Double Enactment Clause, and (2) the Constitution’s
Exclusive Privileges clause.
HISTORY OF HOME RULE
I. THE PEOPLE’S ABIDING DESIRE FOR MEANINGFUL HOME
RULE
A. Plain Language And The New York Constitution
The New York Constitution “is the voice of the people speaking in
their sovereign capacity.” In re New York Elev. Ry. Co., 70 N.Y. 327, 342 (1877).
It is the “most solemn and deliberate of all human writings,” ordaining “the
fundamental law of states.” Newell v. People, 7 N.Y. 9, 97 (1852).
Having been “adopted by the people, the intent” of the New York
Constitution “is to be ascertained, not from speculating upon the subject, but from
16 Notably, Plaintiffs did not seek summary judgment on their Home Rule claims because
Plaintiffs sought expedited discovery on such claims. M829-30 ¶¶ 3-4. Specifically, Plaintiffs
“learned that there was likely a request made to the City Council or those acting on behalf of the
City Council, seeking City Council approval (presumably in the form of a Home Rule message)
for the law that eventually became the Hail Act. Plaintiffs learned that the City Council refused
or rejected the request, in whole or in part, specifically because of the provision in the Hail Act
that granted the Mayor exclusive control and power over the issuance of new taxicab medallions,
a power that is provided only to the City Council under the City Charter.” Id. Plaintiffs’ request
for discovery on such matters was denied.
25
the words in which the will of the People has been expressed. To hold otherwise
would be dangerous to our political institutions.” People v. Rathbone, 145 N.Y.
434, 438 (1895).
Indeed, in People v. Purdy, 4 Hill 384 (Ct. for Corr. of Errors 1842)
(en banc), Senator Paige, concurring in the judgment, explained why he voted to
strictly construe the plain meaning of the provision of the New York Constitution
that required a vote of two-thirds of the members of the Legislature to every bill
“‘creating, continuing, altering or renewing any body politic or corporate,’” as
applying to a municipal corporation:
For one, I cannot consent to “palter in a double sense” with any
part of the constitution . . . Through no agency of mine shall it
be made to “keep the word of promise to the ear, and break it to
the hope.” I trust that, in reference to the present case, this court
will not hesitate to array itself in favor of the old and revered
doctrine of strict construction – the only sound and safe
doctrine for the governance of either judges or legislators. If
courts are allowed to depart from it, and venture upon the
perilous experiment of substituting, for the clear language of
the instrument, their own notions of what it ought to have been
or what its framers intended, there will be an end of written
constitutions, and of all attempts to fix limits to legislative and
judicial power.
While the plain language of any text is always the interpretive starting
(and ending) point wherever possible, “the rule rises to a very high degree of
significance” when interpreting the New York Constitution. Newell, 7 N.Y. at 97.
26
“It must be very plain, nay, absolutely certain that the people did not intend what
the language they have employed, in its natural signification, imports, before a
court will feel itself at liberty to depart from the plain reading of a constitutional
provision.” Id.
Accordingly, as this Court has long recognized, the New York
Constitution is unique, and its interpretation is not analogous to interpreting a
statute (or even the federal Constitution). Unlike a statute, every word in the New
York Constitution has been considered and enacted by vote of the People. Indeed,
the New York Constitution, in toto, has been adopted or re-adopted five times (in
1777, 1821, 1846, 1894 and 1938) and amended in part by vote of the People on
numerous other occasions throughout its 235-year history. It is imperative to
account for this in interpreting its meaning.
First and foremost, this means that the primary interpretive task is to
discern what the People of New York most naturally understood any given
provision or term to mean at the time they affirmatively adopted it, or depending
on the circumstances and historical context, re-adopted it. This, in turn, means that
27
the plain and common meaning of the text is far and away the most authoritative,
indeed arguably the only, method of divining that meaning.17
B. Home Rule Article Today
In the Home Rule provision of the New York State Constitution, the
People declare that “[e]ffective local self-government and intergovernmental
cooperation are purposes of the people of the state” and enumerate the specific
“rights, powers, privileges and immunities” of local governments. N.Y. Const. art.
IX, § 1.
As pertinent here, the Constitution provides that the Legislature has
the “power to act in relation to the property, affairs, or government of [New York
City] only by general law, or by special law only . . . on request of two-thirds of the
total membership of [the New York City Council] or on request of [the Mayor]
concurred in by the majority of such membership.” N.Y. Const. art. IX, § 2(b)(2)
(emphasis added).
The Home Rule Article also provides that in “addition to powers
granted in the statute of local governments or any other law . . . every local
17 Interpreting a statute is materially different. A statute is created indirectly by the People’s
representatives, rather than directly by the People. As a result, the interpretive task of the courts
is to discern the intent of the drafters, not the intent of the People themselves. Thus, while plain
text is still the primary method of statutory interpretation, many courts turn to the drafting or
legislative history to interpret provisions that are ambiguous.
28
government shall have the power to adopt and amend local laws not inconsistent
with the provisions of this constitution or any general law . . . whether or not they
relate to the property, affairs or government of such local government” concerning
the “powers [and] duties . . . of its officers and employees.” N.Y. Const. art. IX, §
2(c).
Finally, the Home Rule Article further restricts the Legislature’s
ability to act within the sphere of local governance and organization by providing
that the power granted in the “statute of local governments . . . may be repealed,
diminished, impaired or suspended only by enactment of a statute by the legislature
with the approval of the governor . . . in one calendar year and the re-enactment
and approval . . . in the following calendar year.” N.Y. Const. art. IX, § 2(b)(1)
(the “Double Enactment Clause”).
While a plain reading of the Home Rule Article makes it clear that the
Legislature does not have the power to enact a special law concerning New York
City (as it did here) without approval by the City Council—and indeed, must re-
enact any special law impairing the power granted by the statute of local
governments—an analysis of the history of Home Rule provisions in the New
York Constitution reveals that the People of New York have persistently
29
strengthened the Constitution to provide local governments with greater and more
meaningful autonomy.
C. Home Rule Article Amendments From Inception to Date
The robust and ever growing appetite of the People of this State for
meaningful Home Rule is apparent from even a cursory look at the history of this
important component of the New York Constitution.
1. 1894
When first enacted by the People in 1894, the Home Rule provision of
the New York Constitution required the Legislature, after passage of a special city
law—defined as laws concerning “a single city, or to less than all the cities of a
class”—to transmit the bill to “the mayor of such city” and thereafter that “mayor
shall return such bill . . . stating whether the city has or has not accepted the same.”
N.Y. Const. of 1894, art. XII, § 2. And, if the bill was not accepted by a city
(whether it was a de facto rejection by failing to act “within fifteen days” of
receipt, or an express rejection by a city within the fifteen day window), the
Legislature was then required to pass the bill a second time before it could be
transmitted to the governor for enactment.
30
By its terms, the first Home Rule provision did not require acceptance
by the local government (via the mayor), but instead mandated only notice and an
opportunity to communicate whether the bill was accepted or not, which then
determined whether the Legislature was required to pass the bill a second time.
Nothing in the Constitution prevented a simple majority of the Legislature from
enacting a special city law even if it was not accepted by the city it concerned.
Even this modest initial Home Rule provision was honored only in the
breach, however, because the definition of special city law was interpreted to
exclude any laws that purported to apply to all cities of a particular type even
when, as frequently occurred, the Legislature passed a bill that applied only to
cities with a population of more than one million, and even though New York City
was the only city of that size in the entire state. See Sun Printing & Publishing
Ass’n v. Mayor, 152 N.Y. 257 (1897); McAneny v. Board of Estimate of City of
New York, 232 N.Y. 377 (1922).
The frustration of the People with a state of affairs that allowed the
Legislature to bypass entirely a mere procedural provision allowing for local input,
but not control, over special laws, led to the 1924 Amendments to the Home Rule
Provision.
31
2. 1924
The 1924 Home Rule Amendment, adopted “with much ado,” was the
product of “years of agitation.” Matter of Elm St., 246 N.Y. 72, 76 (1927). The
amended Home Rule provision pointedly addressed the two weaknesses in the first
provision. First, the Home Rule Amendment provided unequivocally that the
“Legislature shall not pass any law relating to the property, affairs, or government
of cities, which shall be special or local either in its terms or in its effect . . . except
on message from the governor declaring and that an emergency exists and the
concurrent action of two-thirds of the members of each house of the Legislature.”
N.Y. Const. of 1924, art. XII, § 2 (emphasis supplied).
Accordingly, as of January 1, 1924, the People: (1) abolished forever
the fiction that a law was not local so long as it was disguised to appear general,
e.g., laws affecting only cities with a population of more than one million (or by
21st Century standards, more than seven million); and (2) prohibited the enactment
of any special or local laws without a gubernatorial declaration of emergency and
passage by two-thirds of both houses of the Legislature.
Consistent with the strong plain language adopted by the People in the
1924 Home Rule Amendment, this Court struck down a state statute that, while
32
technically general in its terms, was obviously designed to apply only to a specific
transaction concerning New York City. Chief Judge Cardozo explained:
The Home Rule Amendment established a new test. We are no longer
confined to the inquiry whether an act is general or local “in its terms.” We
must go farther and inquire whether it is general or local “in its effect.”
Home Rule for cities, adopted by the people with much ado and after many
years of agitation, will be . . . a form of words and little else, if the courts
applying the new tests shall ignore the new spirit that dictated their adoption.
The municipality is to be protected in its autonomy against the inroads of
evasion.
Matter of Elm St., 246 N.Y. at 75, 76 (1927).
3. 1938
After the Constitutional Convention of 1938, the Home Rule
Provision was moved to Article IX, and amended to provide even greater
autonomy to cities. Through the Constitution of 1938, the People dictated greater
municipal autonomy and power by (1) maintaining the requirement that only a
super-majority of both houses of the Legislature could enact a special law
concerning a city, and (2) combining it with a second requirement that, for the first
time, provided absolute power over the enactment of special laws to each city’s
local legislative body. N.Y. Const. of 1938, art. IX, § 11.
The 1938 Constitution provided that no special law concerning a city
could be enacted without both (1) a two-thirds vote in both houses of the State
33
Legislature (as it had since 1924), and (2) a request for the legislation either (i)
from the mayor of a city and a majority of the local legislative body, or (ii) from
two-thirds of the local legislative body acting without the mayor. N.Y. Const. of
1938, art. IX, § 11.
Accordingly, as of 1938, the State Legislature was prohibited from
enacting special laws relating to New York City without the express local approval
of the City’s local legislative body, either by majority, along with the Mayor’s
approval, or by super-majority without.
4. 1963
The Home Rule Article was strengthened in favor of local autonomy
once more in 1963 when the People adopted what, in pertinent part, is the Home
Rule Article in effect today. This amendment: (A) added the Double Enactment
Clause, see N.Y. Const. of 1963, art. IX, § 2(b)(1); (B) added the Bill of Rights for
Local Governments, see N.Y. Const. of 1963, art. IX, § 1; (C) reinstated the
gubernatorial declaration of emergency requirement and retained the passage by
two-thirds of both houses of the Legislature requirement for the enactment of
special laws concerning local governments without a Home Rule message, which
applies to all local governments other than New York City, see N.Y. Const. of
1963, art. IX, § 2(b)(2)(b); and (D) reaffirmed the City Council’s absolute power to
34
pass Home Rule messages in support of special laws concerning New York City,
see N.Y. Const. of 1963, art. IX, § 2(b)(2)(a).
This remains the state of our Constitution today. The State
Legislature is prohibited from enacting special laws relating to New York City
without the express local approval of the City Council. Taken at its plain word,
Home Rule is sacrosanct. In any Home Rule analysis—especially where local
government authority is at issue—the words and history leading to the 1963
Constitution must be the starting point.
ARGUMENT
I. THE HAIL ACT IS AN UNCONSTITUTIONAL INFRINGEMENT
ON NEW YORK CITY’S POWER OF HOME RULE
The Hail Act is a special law (that is, it applies only to New York
City, see N.Y. Const. art. IX, § 3(d)(4)), which was passed without a Home Rule
message and without being enacted twice. The Hail Act therefore contravenes the
plain language of the Home Rule provisions, Article IX, § 2(b)(1) and (2).
Defendants nonetheless ask this Court to overturn the Supreme Court’s decision,
based on a claim that the law “serves a substantial State concern.” See, e.g., City
Br. at 28 (quoting Patrolmen’s Benevolent Ass’n of City of New York Inc. v. City of
New York, 97 N.Y.2d 378, 386 (2001) (“PBA II”)).
35
Despite conceding, as they must, that rational basis review does not
apply to a Home Rule challenge, Defendants attempt to import rational basis
standards into this case. This they cannot do. The Hail Act is unconstitutional
because its provisions do not “bear a reasonable relationship to [a] legitimate,
accompanying substantial State concern,” PBA I, 89 N.Y.2d at 389 (emphasis
added), in at least three ways:
No State interest is articulated for the Power Transfer Provision in the Hail
Act and the State has no substantial interest in the City’s separation of
powers between the Mayor, as its executive, and the City Council, as its
legislative branch.
The long history of the City regulating its taxicabs obviates any claim that
there is a substantial State concern at issue, particularly because the State has
repeatedly affirmed the City’s Home Rule right to regulate its taxicabs.
The City’s “power of the purse” is one of the most essential local powers,
and there is no State purpose in infringing that power.
A. Standard of Review
As this Court has explained, 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).18 While the “lines of demarcation” between State and local may not be
18 While the City’s Corporation Counsel takes the position in this action that no Home Rule
message is necessary for the Hail Act, it previously advised to the contrary, recognizing that
local matters should be handled locally: In the course of concluding that a Home Rule message
was required to enable the borough of Staten Island to secede from New York City, Corporation
Counsel stated the following: “You [Mayor Guiliani] have asked that the City work with the five
36
“precise,” “they must exist else ‘[h]ome rule for cities, adopted by the people with
much ado and after many years of agitation, will be . . . a form of words and little
else, if the courts in applying the new tests shall ignore the new spirit that dictated
their adoption.’” Id. (quoting Matter of Elm St., 246 N. Y. at 76).
It is important to recognize that the Home Rule provisions place no
restriction on the State’s power to act by general law, applicable statewide19; there
would be no Home Rule quarrel with State legislation to improve taxicab
availability to underserved areas or populations if such legislation were not specific
to New York City. But where the State isolates one municipality for specialized
treatment, home rule “protect[s]” municipal “‘autonomy against the inroads of
[State] evasion.’” Id.
By the plain text of the Home Rule provision, a special law
concerning a municipality’s “property, affairs, or government” requires a Home
Borough Presidents to develop a proposal for changes in delivery of City services to the
boroughs that would enhance their participation and representation in the governance of the City.
Certainly, if it happens that State legislation is required to effect any of those purposes, such
legislation would require a home rule message from the City.” Opinion of Corporation Counsel
Crotty, May 9, 1994, 1994 WL 925886, at *10 (emphasis added).
19 The State Constitution defines a “special law” as “[a] law which in terms and in effect applies
to one or more, but not all, counties, counties other than those wholly included within a city,
cities, towns or villages.” N.Y. Const. art. IX, § 3(d)(4). In contrast, a “general law” is one that
“in terms and in effect applies alike to all counties, all counties other than those wholly included
within a city, all cities, all towns or all villages.” N.Y. Const. art. IX, § 3(d)(1). Here there is no
dispute that the Hail Act is a special law. M74 ¶ 29.
37
Rule message. As explained by Judge Cardozo in Adler v. Deegan: the “State,
acting by local laws and without an emergency message, must keep its hands off”
regulations of all matters “of local interest or concern.” 251 N.Y. 467, 485 (1929)
(Cardozo, J. concurring). Adler, however, also created an exception to this
requirement: The State may regulate “local” matters if and only if “a State concern
is involved or affected, and this in some substantial measure.” Id.
In determining whether a “substantial” State concern is involved, this
Court must engage in a searching inquiry, grounded in the text of the Home Rule
provisions, and guided by the history of Home Rule, as detailed supra. In PBA I,
this Court squarely faced the question of the standard to apply and rejected
Defendants’ claim that rational basis review should apply to analyze a Home Rule
challenge. This Court held that “a more substantive nexus should be required if
home rule is to remain a vital principle of fundamental law.” 89 N.Y. 2d at 390.
That searching inquiry, PBA I explained, has two components: First,
this Court cannot “hypothesize the motivations” for the legislation: “the
substantial State concern which will be permitted to trump constitutional home rule
requirements regarding a particular enactment cannot be derived, as the
[defendant] suggests, purely from speculative assertions on possible State-wide
implications of the subject matter. . . .” Id. at 390-91. The inquiry must instead
38
have a “foundation in the record,” far different from deferential rational basis
review. Id. at 392 (quoting Osborn, 272 N.Y. at 59). Second, “the enactment must
bear a reasonable relationship to the legitimate, accompanying substantial State
concern.” Id. at 391. In other words, the intrusion into the City’s rights must have
“a compensating offset in the advancement of a concern or interest of the State”
that is articulated by the Legislature. Id. (alterations and citations omitted).
B. The Power Transfer Provision Interferes with City Governance
with No Stated State Concern
Section 8 of the Hail Act strips the City Council of its Charter-
mandated exclusive authority to issue taxi medallions. The Law transfers that
exclusive authority to the Mayor “alone.” Act § 8. “Alone” the Mayor is
permitted to determine whether, when, and on what terms to issue or not issue up
to 2,000 new medallions, worth up to $2 billion. The Power Transfer Provision
violates Home Rule because, as the Supreme Court found, this “redrawn political
map” does not further any substantial State concern. M1228. Nothing in the Hail
Act’s statement of purpose or legislative history so much as mentions a
justification for the reallocation of power.
And there is none. Under well-settled law from this Court, such
silence renders the provision constitutionally infirm, without further inquiry. We
note, however, that little conjecture is required to connect the dots between the
39
Mayor’s lobbying effort to circumvent the City Council and the enactment of a
State law that accomplished that exact purpose.
Significantly, the Power Transfer Provision violates Home Rule even
if this Court were to conclude (which it should not, for the reasons set forth in
Section I.C. below) that the remainder of the Hail Act qualified for the judicially-
created, substantial State interest exception to Home Rule. The New York City
Charter, the City’s local constitution, provides that only the City Council, by
passage of a local law, can issue additional medallions: “Additional taxicab
licenses [medallions] may be issued from time to time only upon the enactment of
a local law providing therefor.” N.Y.C. Charter § 2303(b)(4). Section 2303 of the
New York City Charter delineates the wide-ranging powers of the TLC, an
executive agency whose members are appointed by the Mayor, yet expressly
prohibits the Mayor and his agency from increasing the number of medallions.
While the TLC is responsible for regulating existing taxicabs, the City Council has
retained the all-important power to regulate entry to the industry.20
20 The Intervenor-Defendants claim that the “City Council never had the unilateral power to
authorize the TLC to issue taxi medallions without approval by the State Legislature.” Int’r-Def
Br. at 34. This claim is simply wrong. While the State Legislature must approve the sale of
market-priced medallions because only the State may constitutionally impose taxes, the City
Council can authorize any number of medallions, for a reasonable fee, that it deems appropriate.
See supra note 8 (citing N.Y. Const. art. XVI, § 1; Torsoe Bros. Constr. Corp. v. Bd. of Trustees
of Monroe, 49 A.D.2d 461, 465 (2d Dep’t 1975); Suffolk Cnty. Builders Ass’n, Inc. v. Suffolk
40
As Public Advocate Bill de Blasio (first in line of succession to the
Mayor) explained in his amicus brief below, the City Charter was drafted by a
Charter Revision Commission, consisting of scholars and other experts, which held
extensive meetings and hearings to craft a constitution for New York City. M352.
After meticulous planning by the Charter Revision Commission, the City Charter
that was drafted, and approved through a public referendum, “carefully
delineat[ed] the powers and duties of the city’s two branches of government.”
M352-53. A large City Council, consisting of 51 members, was envisioned
expressly to “provide enhanced electoral opportunities for the City’s minority
groups,” which would counterbalance the policy desires of the Mayor. M402.
This approach was successful; the City Council has a racially diversified
membership.21
The Hail Act’s Power Transfer Provision unconstitutionally alters the
City Charter’s delicate balance: Under the Hail Act, the Mayor, acting alone, is
empowered to determine how many new medallions to issue (up to 2,000) and
when to issue such medallions. The “question,” as the Supreme Court noted, “is
Cnty., 46 N.Y.2d 613 (1979) and U.S. Steel Corp. v. Gerosa, 7 N.Y.2d 454, 459 (1960) (state
may delegate limited taxing power to localities)).
21 See, e.g., BLA Caucus, available at http://council.nyc.gov/html/about/bla.shtml (“The City
Council’s Black, Latino and Asian Caucus consists of 27 of the 51 members of the City
Council.”).
41
which component of City government has the power to act” to issue medallions—
the City Charter provides that the City’s legislature has the power, yet the Hail Act,
without explanation, transfers that power to the City’s executive branch, the
Mayor. M1233-34. As the Supreme Court found, this “runs roughshod over what
had heretofore been the Council’s prerogative.” M1235.
This Court has repeatedly made clear that questions of a
municipality’s allocation and separations of power are at the core of the
Constitution’s Home Rule protection. See N.Y. Const. art. IX, § 2(c) (“[E]very
local government shall have power to adopt and amend local laws . . . relating to . .
. [t]he powers [and] duties . . . of its officers” as well laws “relating to its property,
affairs or government”). This Court has held that, at its heart, the phrase “relating
to its property, affairs or government” in Article IX is a limitation on the State’s
power to pass legislation that “deal[s] directly with the internal affairs of a city or
the functions of its officers.” Lawrence, 250 N.Y. at 443 (1929). The Attorney
General conceded this point below. M597.
In Hotel Dorset Co. v. Trust for Cultural Resources of City of New
York, 46 N.Y.2d 358, 380 (1978) (Breitel, J., dissenting), Chief Judge Breitel
castigated a provision, similar to the Power Transfer Provision, that “interfere[d]
with the distribution of powers in the city’s local government.” Chief Judge
42
Breitel, in an analysis with which the majority did not disagree,22 explained that a
State law that included a provision that the law would not take effect unless
approved by the New York City Board of Estimate, “rather than the city’s
legislative body, the city council,” violated “the home rule article of the State
Constitution.” Id. at 375, 380. This provision constituted a State “usurpation of
the local government’s prerogative to designate the local governmental body that
should approve legislation that substantially affects the city’s future revenue.” Id.
at 380. Instead, once the State decided that “city approval is necessary,” he
explained,
approval itself is strictly a matter of the “property, affairs
or government” of the city. The city’s elected legislative
body is the city council, and it should have been for the
council to decide how the bill should be approved. The
Legislature’s callous substitution of the Board of
Estimate for the city council violates both the spirit and
the letter of the home rule article. It is, in short, a gross
interference with the distribution of powers in the city’s
local government.
Id.; see also Hotel Dorset Co v. Trust for Cultural Resources of City of New York.,
63 A.D.2d, 157, 169 (1st Dep't 1978) (“Only the City Council is vested with the
22 While Chief Judge Breitel’s decision was in dissent, the majority did not disagree with this
analysis; the majority had not reached the question of the State’s interest because it held that the
law at issue was a “general law,” not a “special law,” because it was not “applicable only to a
single enterprise.” 46 N.Y.2d at 368. As there is no dispute that the Hail Act is a special law
directed solely to New York City, Chief Judge Breitel’s well-reasoned criticism of the State’s
“gross interference with the distribution of powers in the city’s local government,” id. at 380, is
applicable here.
43
legislative power of the City (NY City Charter, ch. 2 § 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).23
Similarly, in Judge Cardozo’s concurring opinion in Adler, 251 N.Y.
at 488, which formed the basis for what has become the “substantial state concern”
exception to the Home Rule provisions, he noted that the provision at issue in
Adler only passed constitutional muster because it was not “a change of municipal
government. The same city officers who have been charged with the enforcement
of the law regulating the construction and use of tenements are charged with it to-
day.” In contrast, under the Hail Act the “city officers” here, the City Council,
“who [had] been charged with” issuing medallions, are no longer “charged with it
to-day,” id.—instead, the Mayor “acting . . . alone” is.
23 Just as in Hotel Dorset, where Chief Judge Breitel and the Appellate Division criticized the
State’s attempt to “circumvent the rightful authority lodged in the City Council,” by the City
Charter, here, once the State Legislature decided that “city approval is necessary” for the number
and timing of medallions issued, the “approval itself is strictly a matter of the ‘property, affairs
or government’ of the city.” 63 A.D.2d at 169. For this reason, the Attorney General’s claim
(without citation) that the City Charter is inapplicable to the issuance of medallions authorized
by the Hail Act is wrong. See AG Br. at 68. The Hail Act authorizes the “City of New York” to
issue new medallions. Act § 8; see also M98 (Senate Introducer’s memorandum in support:
“authorizing New York city” to issue up to 2,000 medallions). Because the Hail Act grants
power to New York City to issue up to 2,000 medallions, without mandating the issuance of even
a single medallion, the City Charter is then determinative of how and which governmental bodies
within the City should exercise such power. Hotel Dorset, 63 A.D.2d at 169 (Breitel, J.,
dissenting).
44
The case law is thus clear: the essence of Home Rule protection is a
municipality’s right to determine “the functions of its officers,” Lawrence, 250
N.Y. at 443, and the State is constitutionally barred from “substitut[ing another
body] for the city council,” Hotel Dorset, 46 N.Y.2d at 380, “circumvent[ing] the
rightful authority lodged in the City Council,” Hotel Dorset, 63 A.D.2d at 169, or
“chang[ing] municipal government,” Adler, 251 N.Y. at 488. Local governance—
protected by the “property, affairs or government” language of the Home Rule
Article—means nothing if not the power to determine the precise functions and
powers that will be wielded by coordinate branches of local government.
1. Defendants’ attempts to defend the Power Transfer
Provision
Defendants advance three main arguments to attempt to save the
Power Transfer Provision. First, Defendants claim that this Court should pay little
attention to the “individual provisions” of a statute, so long as the Legislature
provides a State concern for the statute as a whole. AG Br. at 68. Second,
Defendants attempt to minimize the import of the question of “who decides,”
presenting the Power Transfer Provision as merely part and parcel of the law’s
“implementation.” Id. at 68-69. Third (contradicting their second argument),
Defendants claim that there is a substantial State interest in circumventing the City
Council. Id. at 70.
45
Taking these arguments in order: It may be true that, as an abstract
matter, every single provision of a State statute, e.g., the effective date of the law
or the precise number of Hail licenses to authorize, need not be connected to a
substantial State interest. But this gets Defendants nowhere because the Power
Transfer Provision is not an ancillary or throwaway provision. It invades the very
heart of Home Rule—the City’s authority to order and allocate local power among
branches of local government in its Charter, as detailed above. In other words, the
very first question a Court must ask is: Does the provision at issue interfere with
the “property, affairs or government,” of a municipality? If it does not, there is no
need to analyze the State’s interest, as Home Rule is simply inapplicable. But
here, as detailed above, the Power Transfer Provision fundamentally interferes
with the division of responsibility between the municipality’s elected branches.
Even if such an invasion could be justified in some hypothetical
scenario, this case is not it. The best way to illustrate the problem is to examine
whether the stated legislative purposes of the Hail Act—namely increasing street
hail service for the outer boroughs and for those with disabilities—would be
materially affected if the Power Transfer Provision were removed entirely and
medallion issuance remained a Council prerogative. Plainly, they would not. Had
the Hail Act been silent on the source of issuance of the new medallions, the City
Council, pursuant to the City Charter, would have been charged with determining
46
the number and timing of the medallion issuance. Thus the Power Transfer
Provision is the very definition of an unnecessary provision. It gratuitously
interferes with fundamental local governmental powers—“property, affairs or
government”—without any stated justification or even any relationship to the
purposes of the Hail Act itself.
Even a single statutory provision that violated the City’s Home Rule
powers has been struck down when there was a conceded State concern supporting
other portions of the statute. In City of New York v. State, 168 Misc.2d 750 (Sup.
Ct. 1995), the court declared a single provision (§ 206) within a State omnibus
budget bill (Ch. 83 L. 1995) unconstitutional because it was a special law enacted
without a Home Rule message from New York City. The provision at issue denied
the New York City Criminal Court jurisdiction over violations of the City
Administrative Code, except violations classified as misdemeanors. The stated
legislative purpose was reducing costs. But the clause had the practical effect of
taking away from the City Council authority to enact provisions by local law for
which penalties of less than a misdemeanor could be imposed. Id. at 753. And the
State’s expected monetary savings were held insufficient to justify the clause,
which—much like the Hail Act—had the effect of “strip[ping] the City Council of
its authority pursuant to Municipal Home Rule Law § 10(4)(b), General City Law
§ 20(22), New York City Charter § 28(b) and article IX, § 2(c)(2) of the NY
47
Constitution.” Id. In declaring the power stripping provision of that bill
unconstitutional, the court recognized that the rest of the budget bill was supported
by a substantial State interest. But the court focused on the discrete provision at
issue and held that it was unconstitutional because “the State’s interest in the
amendment to section 31 cannot be characterized as substantial.” Id. at 757.
Defendants next claim that the Legislature may “vest executive
authority in the mayor” without violating Home Rule. AG Br. at 69. This ignores
the heightened standard applicable to Home Rule challenges. As detailed supra
Section I.A. (Standard of Review), the Court must consider the Legislature’s stated
rationale to determine whether the “interference” with the City’s rights has “a
compensating offset in the advancement of a concern or interest of the State.” PBA
I, 89 N.Y.2d at 391 (alterations and citations omitted). Here, there is an
“interference” with the City’s “government,” and the “functions of its officers,”
Lawrence, 250 N.Y. at 443; yet, there is no “compensating offset” in advancing a
State concern—no State concern is advanced at all. The City Council could
exercise its discretion, or even be mandated by the State, and achieve the State’s
articulated purposes. Instead, the Mayor needlessly replaces the Council in the
Hail Act’s legislative scheme.
48
Moreover, none of the cited cases (AG Br. at 69) approve the transfer
of power to the Mayor. In Bugeja v. City of New York, 24 A.D.2d 151, 152-53 (2d
Dep’t 1965), aff’d, 17 N.Y.2d 606 (1966), the Second Department upheld a State
law permitting New York City to issue bonds to pay the City’s mandatory pension
liabilities, holding that there was a State concern in avoiding “the collapse of the
city’s civil service system.” While the State law tasked the Mayor with issuing
such bonds, there was no claim, let alone a finding, that the City Charter provided
that only the City Council could issue bonds such as is the case here.24 Similarly,
while the City argues that the Mayor is the City’s CEO and its “appropriate
delegate” for administrative authority, it expressly admits that such authority is
only “except as otherwise provided by law,” City Br. at 53. Section 2303 of the
City Charter, which grants the City Council the exclusive authority to issue taxi
medallions, is exactly such a provision—“as otherwise provided by law.”
24 Boreali v. Axelrod, 71 N.Y.2d 1, 10 (1987), cited by the Attorney General (AG Br. at 69), is
also inapposite, as it did not concern a Home Rule challenge. Boreali considered the State
Legislature’s power to delegate its regulatory powers to state administrative agencies and found
that such powers were broad. For this reason, in reproaching Plaintiffs for failing to object to the
Hail Act’s grant of implementation authority to the TLC (AG Br. at 69), the Attorney General
fundamentally misunderstands the argument: Of course local agencies can implement a state
statute. That is not the Home Rule concern; the concern is where the State re-allocates authority
from the local legislature to the executive (be it the mayor or an executive agency). The powers
granted by the Hail Act to the TLC do not go beyond the authority previously granted to the TLC
by the City Charter.
49
Finally, the Attorney General makes the new claim before this Court
that the Hail Act strips the authority to issue the medallions from the City Council
because of the “City Council’s demonstrated reluctance to address the problems in
the taxi industry.” AG Br. at 70. This claim has no support in the record; indeed it
was never even argued to the Supreme Court and is thus waived. See, e.g.,
Silverman v. Benmor Coats, Inc., 61 N.Y.2d 299, 311 (1984) (“Having failed to
make the present argument below, [Appellant] has waived his right to advance that
argument before us.”).
More fundamentally, this is a breathtaking concession. The Attorney
General admits that the Hail Act purposefully sought to circumvent the City
Council and place the authority to issue medallions in Mayor Bloomberg’s hands.
In other words, this was not standard implementation language. Cf. AG Br. at 69-
70 (arguing that use of “mayor alone” is standard verbiage). This assertion seems
to confirm that the Power Transfer Provision was a response to the Mayor’s
lobbying in Albany.
But even more significantly, the claim does not in any way constitute
a defense to a Home Rule constitutional violation. Neither the Hail Act nor its
legislative history contain any finding that the City Council “refus[ed] to act [thus]
compel[ling] state intervention.” See AG Br. at 70. If there were such a finding by
50
the Legislature, this might be a different case. But unfounded speculation of this
sort by the Attorney General is unworthy of his office and has no place in the
instant constitutional analysis.25 See PBA I, 89 N.Y.2d at 390-91 (refusing to
“hypothesize the motivations” for legislation in a Home Rule challenge).
The Power Transfer Provision violates Home Rule. For this reason
alone, the Hail Act should be declared unconstitutional. This Court need go no
further in resolving this appeal.
C. The Fact That the State Has Historically Recognized That
Taxicabs Should be Regulated at the City Level Resolves the
Home Rule Analysis
The entire Hail Act, not only the Power Transfer Provision, violates
the constitutional Home Rule protections because the power to regulate taxicabs
has been the exclusive province of the City since the very first taxicab law was
enacted in New York City in 1937. No State law has ever legislated in this area
without a Home Rule message. And where the State did act, for the limited
purpose of approving City proposals to raise tax revenues through taxicab
medallion sales, it only did so with an express Home Rule message from the New
25 Nor is this unsupported claim accurate. As detailed supra in Section II of the Statement of the
Case, the proposal to create outer-borough street hails was first proposed by Mayor Bloomberg
in 2011. The City Council then began reviewing the legislation. Numerous counter proposals
were considered. The City Council’s reluctance to pass the exact bill presented by the Mayor is
part and parcel of the normal democratic process. But the Mayor was unwilling to merely have a
seat at the table; he wanted control over the process.
51
York City Council. Here, Mayor Bloomberg’s administration admitted a Home
Rule message was necessary to pass the Hail Act. M168-71. It was only when
Mayor Bloomberg realized that he would not garner City Council approval for his
bill that Home Rule objections were dismissed as merely “tradition.” M173-75.
Yet tradition and history, as this Court has repeatedly ruled, is the fulcrum of
Home Rule analysis.
Defendants’ response is three-fold and inconsistent: First, they
contend that the City’s long-standing, unbroken control over all aspects of taxicab
law and regulation is irrelevant. Second, they point to the State’s purported
regulation in what they claim are “closely related areas,” of transportation, i.e., not
regulation of New York City taxicabs. Third, from a policy perspective, they
claim considerations of history are unwise.
As detailed herein, (1) this Court’s jurisprudence has made clear that
the history of regulation in a given area is not just relevant but controls the Home
Rule analysis; (2) the City has always regulated its own taxicabs, and more
dispositive still, the State has repeatedly affirmed the City’s Home Rule right to
regulate its taxicabs; and (3) policy justifications command respect for history.
52
1. History is central to a Home Rule analysis
This Court has repeatedly held that the history of regulation in a given
area controls the Home Rule analysis. It is through reference to custom and history
that courts have drawn the constitutional line between matters appropriate for
municipal control and those matters where the State can govern. The fundamental,
consistent theme one can glean from the jurisprudence of Home Rule (discussed
below) is that when the Legislature passes a special law, that law, virtually by
definition, concerns the “property, affairs or government” of a municipality.
Starting from that premise, the Home Rule analysis proceeds to determine whether,
notwithstanding the local nature of such a law, there is a “substantial State
concern” that creates a judge-made exception to Home Rule. To decide whether
such a substantial State concern exception exists, the history of regulation of
government activity in the area of the subject matter of the legislation is
determinative. This is the current framework, based on a century of this Court’s
cases, for analyzing the applicability of the Home Rule provisions of the
Constitution.
As Justice Cardozo explained in his seminal concurrence in Adler,
251 N.Y. at 489, the “line of division between city and State concerns” is one that
must be carefully analyzed, and in considering “the affairs that a city is organized
to regulate,” courts make “reference to history or to tradition or to the existing
53
forms of the charters.” This division, the majority explained, is based on what
“custom and practice have made between those things which are considered State
affairs, and those which are purely the affairs of cities.” Id. at 478 (rejecting Home
Rule challenge to Multiple Dwelling Law because of State’s historic involvement
in addressing slum conditions in New York City); see also Wambat Realty Corp. v.
State, 41 N.Y.2d 490, 495 (1977) (“All but conclusive of this aspect of the issue
[whether the challenged law involved a substantial State concern] is the
constitutional and legislative history stretching over 80 years to preserve the
Adirondack area.”).
In Osborn v. Cohen, 272 N.Y. 55 (1936), this Court invalidated a
State law on Home Rule grounds notwithstanding the State’s interest in health and
public safety because “[h]istorically and as matter of common knowledge, fire
departments have been recognized agencies of municipal governments, and their
organization, operation and administrative control have been deemed matters of
local concern.” Id. at 59 (explaining that “[h]istorically and traditionally the State
has functioned in certain fields of government, the municipalities in certain other
fields”).
In both Adler and Osborn, the State legislation was defended against a
Home Rule challenge by asserting a substantial concern over the health, safety and
54
welfare of citizens, just as is asserted in support of the Hail Act. See Act § 1. But
while the Adler statute survived a Home Rule challenge, in Osborn the statute was
nullified. See Osborn, 272 N.Y. at 58-59 (“the working hours of firemen will, by
the act, be reduced to a point less wearing . . . ; their health will thus be improved
and their efficiency increased; thereby the safety and welfare of the city and its
large population, resident and transient, will be materially subserved”); Adler, 251
N.Y. at 484 (Cardozo J., concurring) (the “Multiple Dwelling Act is” a “measure to
eradicate the slum,” seeking “to bring about conditions whereby healthy children
shall be born, and healthy men and women reared”).
The reason the Court struck down the statute in Osborn, but not in
Adler, is history. In Adler, there was a long history of State involvement in
legislation aimed at eradicating New York City’s slums. By contrast, in Osborn,
“[h]istorically and as matter of common knowledge, fire departments have been
recognized agencies of municipal governments, and their organization, operation
and administrative control have been deemed matters of local concern.” Osborn,
272 N.Y. at 60.
Defendants claim that the Court’s historical references in Osborn
were irrelevant and that the law was only struck down because there was no
foundation in the record for the statute’s purported rationale. AG Br. at 55-56.
55
But the language in Osborn is to the contrary; the Court mentioned the lack of
record support for the ostensible public health purpose of the law but stated that
such paucity is “not the essential or fundamental factor”—history is. Osborn, 272
N.Y. at 59.
Here, of course, like in Osborn, the “organization, operation and
administrative control” of private taxi service “have been deemed matters of local
concern,” since as far back as the Haas Act in 1937. Id. The Hail Act is the first
special law the State Legislature has ever passed regulating New York City
taxicabs without a Home Rule message. See Baldwin, 6 N.Y.2d at 173 (holding
that it “lends great weight” to the claim that a statute violates Home Rule where
“local legislation is the usual method” for regulating a subject).
By contrast, the State’s previous forays into taxicab regulation
reinforce that such regulation is appropriately handled at the local level, making
this case stronger than Osborn. The State did not merely take a wait-and-see
attitude over the decades; it took active steps to reinforce that municipalities should
regulate taxicabs. First, in 1956 the State enacted Gen. Mun. Law § 181, a general
law that explicitly delegates to municipalities throughout the State the power to
regulate taxicabs in their jurisdictions. Then, in 1983, the Attorney General opined
that Gen. Mun. Law § 181 was “viewed as a home rule measure to give
56
municipalities power they properly should have.” 1983 N.Y. Op. Att’y Gen. (Inf.)
1008, 1983 WL 167364. Notably, the Attorney General conspicuously omits
citation to its own Opinion in its briefing before this Court.
Second, the State has always received Home Rule messages from the
City before regulating New York City’s taxicabs. On three separate occasions
when the State increased the number of taxicab medallions, it did so only with
New York City’s approval. M164-65 ¶¶ 14-16; M207-21. The State has not
merely acquiesced to City regulation of private taxicabs; it has affirmatively
recognized that the City had the constitutional Home Rule power to regulate.
Not surprisingly, Defendants give short shrift to these three previous
Home Rule messages. They cite City of New York v. State, 94 N.Y.2d 577 (2000),
for the proposition that previous Home Rule messages are not dispositive; but that
case is not on point. In City v. State, this Court rejected a Home Rule challenge to
a State law that nullified New York City’s pre-existing income tax on commuters
who worked in New York City, but lived in counties outside of the City or in other
states. The fundamental reason this Court rejected the Home Rule challenge was
the New York State Constitution itself. It declares that the State Legislature’s
power to tax “shall never be surrendered, suspended or contracted away.” N.Y.
Const. art. XVI, § 1. Thus, as a matter of State Constitutional law, a history of
57
permitting a locality to tax cannot “surrender[]” the state’s power to tax. Id. Put
another way, the “line of division between city and State concerns” Adler, 251
N.Y. at 489, is murky in the middle and clearer at the outposts. While a history of
Home Rule messages are not, alone, dispositive in cases where the subject matter
falls clearly on the State side of the line, the prior Home Rule messages are
probative in determining whether the subject is one which “[h]istorically and
traditionally” has “been deemed [a] matter[] of local concern.” See Osborn, 272
N.Y. at 59-60. Under circumstances where taxation is the issue, City v. State’s
unsurprising result does not alter Plaintiffs’ analysis.
2. The State’s history of regulating mass transit is irrelevant
Defendants’ reliance on the long history of State legislative
involvement in public mass transit is as ironic as it is misplaced. It is ironic
because it accepts that the history of State versus local regulation is dispositive in a
Home Rule claim. But it is also misplaced, because there is no history of State
regulation of New York City’s taxicabs or liveries, but instead a long, unbroken
history of local control and regulation.26 The State’s historic involvement in public
26 Defendants attempt to dispute what should be an uncontroversial contention by claiming that
the State Legislature has “acted in closely related areas.” AG Br. at 58; City Br. at 34, 40. But
the few statutes they cite for this proposition stand for no such claim. First, both N.Y. Veh. &
Traf. Law § 370, which imposes insurance requirements, and § 498, which governs cross-
jurisdictional for-hire travel, are general laws that apply throughout the State. This is equally
true of Exec. Law § 290, an anti-discrimination provision. The State’s history of enacting
general laws, for which there is no Home Rule limitation, is irrelevant to the question of the
58
mass transportation is irrelevant. And, by Defendants’ apparent reasoning, the
unbroken history of local regulation of taxis requires a determination that the Hail
Act violates Home Rule.
Put another way, trains are not taxis, taxis are not commuter vans, and
commuter vans are not bicycles.27 It matters not at all that all have wheels and all
transport people from one place to another. What matters is which governmental
entity has historically exerted control over which mode of transport. For railcars,
the answer is the State. Indeed, the State has controlled mass public transit in New
York City since at least 1891, before the Home Rule provisions of the State
Constitution were even adopted by the People. And the City has controlled and
regulated taxicabs in the City from the very inception of taxicab regulations in
1937 pursuant to the Haas Act. Transportation in general in the City has been
traditionally a matter of either State or local concern depending on the vagaries of
politics and history.
State’s ability to act through special laws. Similarly, while Defendants cite N.Y. Transp. Law §
15-b, the paratransit program is a public transportation program, and is thus no different than the
State regulation of railways. Tax Law § 1281, which provides for a 50 cent per ride tax to
support the MTA, is similarly irrelevant because of the State’s expansive powers to tax. See
supra Section C.1.
27 When the commuter van industry was created in the 1980s, it was subject to State legislation,
pursuant to N.Y. Transp. § 80(4), and the City only began regulating commuter vans in 1993, see
N.Y.C. Admin. Code § 19-504.2. In contrast, pedicabs were never regulated by the State and
were first regulated by the City in 2007. See N.Y.C. Admin Code § 20-248, et seq.
59
In making their arguments that all forms of transportation in New
York City are a matter of substantial State concern, Defendants chiefly rely on two
cases: McAneny v. Board of Estimate of City of New York, 232 N.Y. 377 (1922)
and Admiral Realty v. City of New York, 206 N.Y. 110 (1912). Neither case had
anything to do with taxis; both involve the Rapid Transit Act of 1891 (or
amendments thereto), which concerned public transportation via railway within
New York City and its environs.
Moreover, neither Admiral Realty nor McAneny involved the question
of whether public transportation in the City was a matter sufficient to trigger the
substantial State concern exception to the Home Rule provisions of the State
Constitution. The substantial State concern exception to Home Rule did not exist
in 1912 or 1922. Indeed, the first mention of such an exception appears in Justice
Cardozo’s concurring opinion in Adler, 251 N.Y. at 484.
3. Policy justifications support the import of history
The Attorney General warns of a State Legislature incapacitated
because municipalities have taken all of its power away. Even if this were the
Court’s concern, it would remain a “make weight” argument.
If the State is concerned, for example, about accessibility of taxicabs,
it is free to pass general laws on that score. The Constitution’s Home Rule
60
protections do not limit the State’s power to legislate by general law. This reflects
a preference by the People of the State of New York, in passing our Constitution,
that the default is that the State sets general laws; municipalities then implement
those general laws as appropriate for them. As the Supreme Court aptly noted:
“Wouldn’t it just be easier to mandate that a certain percentage of all taxicabs in
all cities (not just New York) be wheelchair-accessible, and let each locality go
about deciding how to achieve that worthy goal?” M1234 (emphasis in original).
The Attorney General claims that the State was preserving its right of
“waiting to see” how New York City’s regulation of its taxicabs would fare. AG
Br. at 60. That argument would have some traction if raised in the years after the
Haas Act’s passage in 1937, instead of after 75 years of City legislation.
Moreover, the State has not been a passive party over this period; it has actively
reinforced that regulating taxicabs was part of the City’s Home Rule powers: First,
it acted by general law—enacting Gen. Mun. Law § 181, which permits
municipalities to regulate taxicabs. And that general law reflects municipalities’
inherent Home Rule powers, see 1983 N.Y. Op. Att’y Gen. (Inf.) 1008, 1983 WL
167364. Second, the State has repeatedly, on three separate occasions in the last
two decades, sought Home Rule messages from New York City before approving
the market sales of additional medallions. M164-65 ¶¶ 14-16; M207-21.
61
Before Mayor Bloomberg’s attempt to circumvent the City Council,
the State had repeatedly made clear that the City has the power to regulate City
taxicabs. There is thus no evidence—much less evidence in the record—of Home
Rule incapacitating the Legislature.
D. Requiring the City to Issue $54 Million in Grants is an Additional
Infringement on the City Council’s Powers
Section 9 of the Hail Act requires New York City to appropriate as
much as $54 million from City tax dollars to fund mandatory grants of up to
$15,000 for accessible vehicles. The State has provided no funding for this grant
program; it will be extracted directly from the City budget.
These required grants impinge on what Judge Cardozo explained was
the “[m]ost important,” local power, “the control of the locality over payments
from the local purse.” Adler, 251 N.Y. at 489 (Cardozo, J., concurring); see also
In re Mayor of City of New York, 246 N.Y. 72, 74-75 (1927) (requiring City to pay
lapsed judgment for damages violated Home Rule). This power is enshrined in
Article IX, which protects the City’s right to the “transaction of its business” and
the “incurring of its obligations.” N.Y. Const. art. IX, §§ 2(c)(3) and 2(c)(4).28 The
28 Pursuant to that power, the City Charter, Chapter 10, details an in-depth budgetary process.
That process requires the Mayor to submit a proposed budget listing each proposed
appropriation; the City Council is then charged with acting upon the budget. The State law
purports to invalidate that budgetary process with regard to grants for accessible vehicles.
62
Hail Act infringes upon the City Council’s right to determine the appropriate
expenditure—if any—for grants for accessible Hail vehicles.
The Attorney General disputes the Supreme Court’s determination
that the grant requirement is tantamount to “[b]reaking open the city’s piggy
bank,” M1235, because (1) it has a State purpose—increasing wheelchair
accessibility, and (2) the moneys are only in the City’s coffers due to the Hail Act.
The first claim ignores the clear language of this Court’s holding in
PBA I, 89 N.Y.2d at 390-91, which bars reliance on hypothetical justifications
without record support. Nowhere does the Hail Act explain why the City—instead
of the State—should pay for these grants, particularly given the centrality in Home
Rule jurisprudence of a municipality’s “control . . . . over payments from the local
purse.” Adler, 251 N.Y. at 489 (Cardozo, J., concurring).
The claim that the total amount of the grants, $54,000,000, equals the
total amount in license fees is also erroneous. First, in the Hail Act itself the
licensing fees and the grant requirements are wholly decoupled. Act § 9(b). The
Hail Act, by its terms, mandates payments from the City fisc and nowhere states
that it does so based on the new licensing fees. Moreover, the City did not need
the State to authorize such fees, see supra note 8; the City had the authority to
authorize Hail licenses at a reasonable licensing fee without requiring State
63
approval. Finally, the City must provide the grants before the Hail licenses are all
issued and take on the full risk that the 18,000 Hail licenses are not all issued. Act
§ 9(b). If, for example, the City cannot meet the Hail Act’s requirement that
twenty percent of the initial issuance is for accessible vehicles, the City may be
forced to provide grants substantially in excess of the licensing fees. 29
E. The Hail Act Infringes on Powers Granted in the Statute of Local
Governments, in Violation of the Double Enactment Clause
The Hail Act also violates Article IX, § 2(b)(1), of the New York
Constitution, which provides: “A power granted in [a statute of local
governments] 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 year.” Id. The provision, known as the “Double
Enactment Clause,” is designed to “afford localities protection from hasty and ill-
considered legislative judgments.” Wambat Realty Corp., 41 N.Y.2d at 491-92.
29 The Hail Act mandates that twenty percent of the Hail licenses must be accessible and the City
cannot issue further licenses unless that percentage is met (or unless the State approves a
modification). Act § 5(b). If the City cannot meet the twenty percent threshold the City may
provide grants substantially in excess of the licensing fees. If, for example, the City is only able
to sell 19% of the first 6000 Hail licenses as accessible (i.e. 1,140 licenses), it will need to offer
over $17 million in grants (1,140 * $15,000) but will only earn $9 million in licensing fees
(6,000 * $1,500).
64
The New York Statute of Local Governments implements the Double
Enactment Clause by expressly granting to local governments, including New
York City, the power of “local legislation” and the “power to adopt, amend and
repeal ordinances, resolutions and rules and regulations in exercise of its functions,
powers and duties.” N.Y. Stat. Local Gov’t § 10(1).
Yet the Hail Act repeals, diminishes, impairs and suspends that grant
of power to New York City because (1) it nullifies Section 2303 of the City
Charter—which commands that only the City Council shall have the power to
issue medallions and shifts that power to the Mayor “acting . . . alone,” Act § 8;
and (2) it expressly amends provisions of the New York City Administrative Code
that provide that only taxicabs have the exclusive right to accept street hails, see id.
§§ 25-29 (amending N.Y. Admin. Code §§ 19-506, 19-507, 19-512.1, and 19-516
and allowing Hail vehicles to accept street hails).
The Hail Act thus impinges upon the power granted to New York City
under Section 10 of the N.Y. Stat. Local Gov’t. As explained by this Court in
Floyd v. N.Y. State Urban Development Corp., 33 N.Y.2d 1 (1973), this is
precisely the evil that the Double Enactment Clause was designed to curtail: “The
two-legislative-session approval provision . . . reasonably applies only where a
special act, disruptive of the powers of a particular municipality, is involved.” Id.
65
at 6 (rejecting Double Enactment Clause challenge to Urban Development
Corporation Act because it was a “general law . . . applicable to all municipalities,”
and thus could not “be construed as a law designed to be disruptive of the property
or affairs of a local government”).
Defendants argue that because the Hail Act serves a substantial State
concern it is constitutional even though it was not enacted twice. As stated above,
the Hail Act lists no State purpose whatsoever for the Power Transfer Provision.
And the long history of the State’s deference to the City’s regulation of its own
taxicabs (including three previous Home Rule messages) belies any claim that
there is a substantial State concern that justifies amending the City’s
Administrative Code governing which types of vehicles can accept street hails.
The Attorney General (but not the City) further claims that the Hail
Act represents no infringement on the City’s powers, because it merely “overrides
a particular local law” without limiting the “power to enact local laws.” AG Br. at
77.30 Notably, the Attorney General does not cite any case law in support of this
30 The AG also claims, in a footnote, that “local laws” are distinct from “ordinances,” and only
the former is protected by the Statute of Local Government. AG Br. at 76 n. 34. Yet the
Constitution itself, as well the Statute of Local Government, explicitly protects municipalities’
rights of “local legislation.” N.Y. Stat. Loc. Gov’t. § 10; N.Y. Const. art. IX, § 2(b)(1) (“the
legislature . . . [s]hall enact . . . a statute of local governments granting to local governments
powers, including, but not limited to those of local legislation and administration” (emphasis
added)).
66
argument. What meaning is there to granting a municipality’s power to enact
laws—let alone Charter provisions—if the State can simply overturn such laws in a
single legislative session? The City Council, pursuant to the Hail Act, is without
power to decide when and whether to issue these 2,000 medallions. Moreover, the
City is forever deprived of the right to decide—as it had in its Administrative
Code—that only medallion taxicabs can pick up passengers by street hail. The
question is whether the Hail Act “disrupt[s]” the “powers of a . . . municipality.”
Floyd, 33 N.Y.2d at 6. Here, where the Hail Act overturns one provision of the
City’s Charter and three separate provisions of the City’s Administrative Code, the
Hail Act “disrupt[s]” the City’s powers.
The Hail Act is unconstitutional because it fundamentally alters the
City’s governmental structure and authority as set forth in the Statute of Local
Governments, yet was only passed in one legislative session.
II. EXCLUSIVE PRIVILEGES
The Hail Act also violates Article III, Section 17 of the State
Constitution (the “Exclusive Privileges” Clause) because it unconstitutionally
grants exclusive privileges to the current livery industry to the detriment of all
others.
67
Under the Hail Act, no member of the taxicab industry (regardless of
years of experience) or the public can obtain a Hail license or base permit; only
members of the current livery industry are eligible purchasers. In marked contrast
to the new medallions, which will be auctioned off at market rates, these new Hail
licenses will be sold at a fixed, artificially low price: initially $500 annually.31
Remarkably, the current livery industry can then resell their licenses at any price
the market will bear and keep the difference.
Defendant Yassky has admitted the Hail Act intended to grant a
privilege to the livery industry at the expense of the taxicab industry, which did not
support the Mayor’s proposal. M26-27 ¶¶ 14-18. And the City admits as much in
its briefing before this Court, claiming—without any record support—that the
Legislature wanted to “reduc[e] opportunities for the yellow taxi industry to
undermine the program.” City Br. at 70. If anything, this bolsters Plaintiffs’ point:
Allowing experienced members of the taxicab industry to participate in the Hail
program would not “undermine” the plan, but would instead enlarge the pool of
potential Hail license applicants. But instead the Hail Act limits licensees to the
current livery industry. This transfer of wealth to the current livery industry “has
31 The City unfairly chastises the Supreme Court, claiming its opinion misstates the fee for Hail
licenses. City Br. at 70. The Supreme Court made no mistake: The fee to purchase a three-year
license in the first issuance is $1,500, or $500 a year, as the Supreme Court clearly stated.
68
all the indicia of special interests legislation,” 19th St. Assoc’s v. State, 79 N.Y.2d
at 444, in violation of the Exclusive Privileges Clause.
A. The Constitutional and Statutory Framework
The Exclusive Privileges clause bars the Legislature from passing “a
private or local bill . . . Granting to any private corporation, association or
individual any exclusive privilege, immunity, or franchise whatsoever.” Section
5(b) of the Hail Act does just that: “Within the first three years of the first issuance,
Hail licenses may be issued only to owners of for-hire vehicles or for-hire drivers
who have been licensed by the TLC for at least one year.” While the Hail Act sets
the initial price for the license at $1,500 for three years, licenses are freely
transferable to new entrants to the livery industry, with no requirement of “one
year” of previous licensure. Act §§ 5(d), 7. There is an “automatic” “right to
renewal” for owners in good standing. Id. § 5(d). Thus, current liveries that
purchase Hail licenses are granted a perpetual right to accept street hails.
Under the Hail Act, each Hail licensee is required to affiliate with a
Hail base. Id. § 3 (sec. 4). Only existing for-hire vehicle base stations that have
operated for at least three years can obtain one of only 450 hail base permits; the
base permits are automatically renewable. Id.
69
There are two components to an Exclusive Privileges analysis: First,
the bill must be “directed at a single entity” meaning that it must “‘operate[]only
upon a limited area, or upon persons within a specified locality and not generally
throughout the state.’” Consumers Union v. State, 5 N.Y.3d 327, 361 (2005)
(quoting In re Henneberger, 155 NY 420, 425-26 (1898)). Second, the law must
“confer a privilege upon the single entity to the exclusion of all others.” Id.
B. The Privilege Does Not Apply “Generally Throughout the State”
To violate the Exclusive Privileges provision, the statute must not
“operate . . . generally throughout the state,” but must instead be directed at a
single class of entities. Consumers Union, 5 N.Y.3d at 361. The Hail Act, by its
very terms, only applies to New York City and does not operate “throughout the
state.” Id.
Defendants nonetheless claim that the Exclusive Privileges clause is
inapplicable because more than a “single” individual or corporation is being
privileged. AG Br. at 80. But in 19th Street Associates, 172 A.D.2d 380, 381 (1st
Dep’t 1991), the Appellate Division held that a law benefiting all the tenants at an
apartment building at 205 Third Avenue violated Section 17, though there were
70
many tenants in the building.32 Similarly, Fox v. Mohawk & Hudson River
Humane Society, 165 N.Y. 517, 526-27 (1901), held unconstitutional a law
benefitting numerous dog humane societies. Though there was more than one
humane society that was granted the privilege, the Exclusive Privileges clause was
violated because those societies—all told—held an exclusive privilege. Like in
Fox, here current members of the livery industry, in toto, are granted an exclusive
privilege unavailable to those outside the industry.
It is of no moment that there are thousands of current livery drivers or
owners who will be unconstitutionally granted privileges by the Hail Act—though
it is worth noting that a far smaller number, just a few hundred, can purchase a
Hail base permit. The question, as stated in Matter of New York El. R. Co., 70
N.Y. 327, 346 (1877), cited by Defendants, is whether the “act in form offers the
same opportunities to all the citizens of the State.” Here, only the current livery
industry, and no other “citizens of the state,” can purchase a Hail license or base
permit.
32 Because 19th Street Associates squarely applies, Defendants claim it was wrongly decided.
AG Br. at 83; City Br. at 68 n.18. Though this Court’s affirmance in 19th Street Associates did
not directly address the Exclusive Privileges question, this Court castigated the Legislature, not
the Appellate Division: “this statute has all the indicia of special interests legislation.” 79
N.Y.2d 434, 444 (1992). And 19th Street Associates is wholly consistent with this Court’s
decisions in Consumers Union, 5 N.Y.3d at 361 and Fox, 165 N.Y. at 526-27, as explained
above. See also In re Application of Union Ferry Co. of Brooklyn, 98 N.Y. 139, 150 (1885)
(Section 17 prohibits grant of exclusive right to “corporations or individuals.” (emphasis added)).
71
C. Defendants’ Rationales for the Exclusive Privilege Do Not
Constitute Defenses to Their Unconstitutionality
This is a far cry from Consumers Union, relied upon by Defendants,
where the Court held that the privilege was not exclusive because the right granted
to Empire—the right to convert to a for-profit—is not “disturbed or invaded if the
State should give to another corporation the same rights.” 5 N.Y.3d at 361
(internal quotation marks omitted). There is no limit in New York State law as to
the number of insurance carriers than can be organized as for-profit entities; each
could be granted the right to convert. But here there are a limited number of Hail
licenses and permits; by permitting only the current livery industry to purchase
such licenses and permits, and pocket all appreciation from resale, others are
barred from exercising that privilege.
Defendants’ claim that Hail licenses will be worth less than
medallions is a red herring and irrelevant. The question is whether Hail licenses
will appreciate substantially above $500, and, there is no doubt they will. This is
the exclusive privilege granted—the exclusive right to reap a profit from this
monopoly. There is no requirement that a licensee drive a Hail vehicle; these
licenses will soon be a market to themselves, held purely as an investment and
72
transferred after they appreciate in value. Only livery licensees can clip these
coupons.33
33 Defendants claim that there is a police powers exception to the Exclusive Privileges clause.
But neither of the two cases cited, see AG Br. at 87 n. 38; City Br. at 72, involved granting
exclusive rights to a privileged group without any legislative finding. See People v. Griswold,
213 N.Y. 92, 100, 106 N.E. 929 (1914) (statute requiring dentists statewide to meet professional
qualifications is both “not a private or local bill” and “impos[es] a duty, rather than as conferring
a privilege, upon the dental society”); City of Rochester v. Gutberlett, 211 N.Y. 309, 105 N.E.
548 (1914) (municipal statute regulating garbage removal not deemed to grant an exclusive
privilege). The City alone also contends there is a substantial State concern exception to the
Exclusive Privileges clause, yet they cite no case from this Court that so holds. City Br. at 67.
The one case cited is inapposite as it concerns regulation of schools, a matter expressly
designated a state responsibility in the Constitution. See Corning v. Donohue, 37 A.D.2d 213,
217 (3d Dep’t 1971) (citing N.Y. Const. art. XI, § 1), aff’d, 29 N.Y.2d 209 (1971). Even if there
were such an exception, it could not apply, as the Legislature never stated any rationale for this
privilege. See PBA I, 89 N.Y. 2d at 389-90.
CONCLUSION
For the foregoing reasons, Plaintiffs-Respondents respectfully request
that this Court affirm the ruling and Judgments of the Supreme Court and find that
the Hail Act is unconstitutional.
Dated: March 1, 2013
New York, New York
73
EMERY CELLI BRINCKERHOFF
&ABADYLLP
By:
Richard D. Emery
Matthew D. Brinckerhoff
Elizabeth S. Saylor
Debra L. Greenberger
75 Rockefeller Plaza, 20th Floor
New York, New York 10019
(212) 763-5000
Attorneys for Plaintiffs-Respondents