To be Argued by:
MITCHELL BERNS
(Time Requested: 30 Minutes)
APL-2014-00275
New York County Clerk’s Index No. 101083/13
Court of Appeals
of the
State of New York
GREATER NEW YORK TAXI ASSOCIATION
and EVGENY “GENE” FREIDMAN,
Petitioners-Appellants,
– against –
THE NEW YORK CITY TAXI AND LIMOUSINE COMMISSION, a charter-
mandated agency, and DAVID YASSKY, in his official capacity as the Chairman
of the New York City Taxi and Limousine Commission,
Respondents-Respondents,
– and –
NISSAN TAXI MARKETING, N.A., LLC
and NISSAN NORTH AMERICA, INC.,
Respondents-in-Intervention-Respondents.
REPLY BRIEF FOR PETITIONERS-APPELLANTS
Of Counsel:
MITCHELL BERNS
BARRY J. MULLER
DANA KATZ
FOX ROTHSCHILD LLP
100 Park Avenue, 15th Floor
New York, New York 10017
Tel.: (212) 878-7900
Fax: (212) 692-0940
Attorneys for Petitioners-Appellants
Date Completed: March 20, 2015
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT OF REPLY ........................................................... 1
ARGUMENT ............................................................................................................. 3
THE TLC EXCEEDED ITS AUTHORITY AND VIOLATED
THE SEPARATION OF POWERS DOCTRINE BY
ADOPTING THE REVISED TAXI OF TOMORROW
RULES .................................................................................................. 3
CONCLUSION .......................................................................................................... 9
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TABLE OF AUTHORITIES
Page(s)
Cases
Matter of New York State Coalition of Hispanic Chambers of
Commerce v. The NYC Dep’t of Health & Mental Hygiene,
23 N.Y.3d 681, 16 N.E.3d 538 (2014) ..................................................... 2, 3, 5, 8
Other Authorities
35 RCNY § 67-05.1C ................................................................................................ 5
N.Y.C. Charter, § 2300 .......................................................................................... 6, 7
N.Y.C. Charter, § 2303 [b][2] .................................................................................... 7
N.Y.C. Charter, § 2303 [b][6] ................................................................................ 1, 7
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PRELIMINARY STATEMENT OF REPLY
This case is not, and has never been, about the authority of the Taxi
and Limousine Commission (the “TLC”) of the City of New York (the
“City”) to set appropriate taxi standards to ensure public safety. Neither is
it, nor has it ever been, about the merits of the Nissan NV200 or the quality
of its various features.
Rather, this is a case about a relatively straightforward issue of law:
whether a City agency may select a brand, make, model, and price and grant
a monopoly to a single manufacturer for all City taxis. Appellants
respectfully submit that in doing just this, the TLC far exceeded its limited
authority to establish “standards of safety, and design, comfort, convenience,
noise and air pollution control and efficiency . . . .” N.Y.C. Charter, § 2303
[b][6]. Indeed, as the appellate dissent aptly concluded:
to the extent TLC did not simply set
standards in these regards, but specifically
mandated the purchase of a designated
vehicle, the revised rules went beyond the
TLC regulation of “standards of design”
permitted under the Charter, and the rule
making constitutes an exercise of power
that is neither expressly conferred on TLC
by any provision in the Charter nor
required by necessary implication.
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(R. 2508) (citations omitted).1
Instead of continuing in its permissible role as a regulator of standards
for the taxi industry, the TLC admits it has become a player in the taxi
industry by choosing to “partner” with Nissan Taxi Marketing (“Nissan”)
and declare the NV200 to be the “Taxi of Tomorrow.” See City Br. at 9-10.
This is far outside of the bounds of the TLC’s authority.
To put the TLC’s action here in perspective, this Court recently struck
down a City Board of Health regulation intended to restrict the portion sizes
of sugary beverages purchased in the City. Matter of New York State
Coalition of Hispanic Chambers of Commerce v. The NYC Dep’t of Health
& Mental Hygiene, 23 N.Y.3d 681, 16 N.E.3d 538 (2014). If the Board of
Health had taken a page from the TLC’s book, it would not have stopped at
merely “capping” the portion size of certain drinks; rather, it would have
become a “partner” of a manufacturer such as Coca Cola and required that,
for example, only Coca Cola Zero (not other Coca Cola products, and not
identical products by other manufacturers) be sold within the City’s limits,
even if other manufacturers could duplicate the precise features of Coca
1 Numbers in parentheses preceded by “R.” refer to pages in the Record
on Appeal.
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Cola Zero that the City found so desirable. This Court unequivocally struck
down the portion cap regulation, and would surely have done the same if the
Board of Health had promulgated a regulation mandating a precise brand
and beverage as the only official City soda. See Coalition, 23 N.Y.3d at
690.
The same result is warranted here. The TLC’s attempt to mandate the
purchase of an official City taxi should be struck down, and that the Court
should require that the TLC’s actions remain within the confines of the
authority delegated to it.
ARGUMENT
THE TLC EXCEEDED ITS AUTHORITY
AND VIOLATED THE SEPARATION OF
POWERS DOCTRINE BY ADOPTING THE
REVISED TAXI OF TOMORROW RULES
The material facts are not in dispute, and the Court is presented with a
clear issue of law – whether the Taxi of Tomorrow program is a permissible
exercise of the authority by the TLC. Yet that is not the focus of the briefs
filed on behalf of the City and Nissan.
To the contrary, the City and Nissan go to great lengths to detail the
process employed prior to the promulgation of the Taxi of Tomorrow rules,
and to praise the various amenities of the Nissan NV200. To be sure, many
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may be attracted to the notion of a taxi with “sliding doors,” “yellow
contrasting stitching highlighting the edge of the seats,” a “sky roof for
passenger enjoyment,” and “charging ports.” See City Br. at 12-20; Nissan
Br. at 12-13. What the City and Nissan do not, and indeed cannot, explain,
is why these features are treated as unique to the Nissan NV200 and not
simply established as what will be required of all taxis, regardless of the
manufacturer. As the City notes, for years, the TLC has established these
precise types of standards to ensure the safe and comfortable operation of
City taxis. See City Br. at 6-9. To take the drastic step of not imposing
standards, but rather commanding a brand, make, model and price for all
non-hybrid City taxis is without precedent and impermissible.
The extended discussion of the Nissan NV200’s qualities is
understandable – it is a way to distract the Court from the pure legal issue
before it: that the TLC has overstepped its bounds. Indeed, the TLC candidly
acknowledges that it has strayed beyond its traditional regulatory role in this
case, and chosen, instead, to become a player in the taxi industry and a
partner of Nissan. See City Br. at 9-10 (noting that the TLC took the
unprecedented step to enter into a fuller partnership with an automobile
manufacturer).
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In its newfound role, the TLC took the extraordinary and improper
step of substituting its judgment for that of the City Council to the effect that
one -- and only one -- brand of taxi can be purchased by the City’s entire taxi
industry at a pre-determined price. Such a decision is reserved for the City’s
elected representatives. Coalition, supra, 23 N.Y.3d at 693.
The opposition briefs’ main defense to the TLC’s creation of such a
monopoly is an argument that because non-Nissan hybrids can be purchased,
a monopoly does not exist. To be sure, the TLC did issue an industry notice
(notably, just before Appellants’ brief was filed in this Court) stating that
Nissan had agreed that non-Nissan hybrids could be purchased by medallion
holders. However, the TLC’s own rules, which the TLC claims will be in
effect in just a few weeks, make clear that a non-Nissan hybrid may only be
purchased “until such time … that an Official Taxicab Vehicle meets the
requirements of § 19-533 of the Administrative Code[.]” 35 RCNY § 67-
05.1C. This gamesmanship to allegedly, and privately, modify the VSA on
the fly during the pendency of this appeal in order to attempt to bolster
Respondents’ arguments before this Court is troubling at best. It seems that
these sub rosa discussions and modifications can simply occur at any time
between Nissan and the TLC, a chilling fact that casts a shadow of doubt
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over Respondents’ current arguments given the contradictory regulations on
the books.
Further, the monopoly for non-hybrids is absolute, undisputed, and
improper. The City argues that for years, various standards made it such that
the dominant vehicle was the Crown Victoria, and that “there is little
practical difference between mandating a single vehicle . . . and setting
requirements so specific that only one vehicle can meet them.” See City Br.
at 29-30. While previous standards may have had the effect of making the
Crown Victoria the dominant vehicle in the market, the dissenter below cut
to the heart of the matter:
it remained possible for other vehicles to
be designed to meet the required specified
standards (as was the case), whereas the
revised rules entirely preclude that
possibility.
(R. 2506).
Indeed, he hit the nail on the head by noting that, by “mandating the
exclusive use of a specific make, model and manufacturer, TLC took a step
beyond even the broad powers provided for it in the Charter.” (R. 2506).
Section 2300 (emphasis added) of the City Charter, which establishes
the TLC, provides that the agency's "purposes . . . shall be:"
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to adopt and establish an overall public
transportation policy governing taxi, coach,
limousine, wheelchair accessible van
services and commuter van services as it
relates to the overall public transportation
network of the city; to establish certain
rates, standards of service, standards of
insurance and minimum coverage;
standards for driver safety, standards for
equipment safety and design; standards for
noise and air pollution control; and to set
standards and criteria for the licensing of
vehicles, drivers and chauffeurs, owners
and operators engaged in such services; all
as more particularly set forth herein.
Likewise, Section 2303(b)(2) authorizes the TLC to regulate standards and
conditions of service, while section 2303(b)(6) specifically permits the TLC
to establish "[r]equirements of standards of safety, and design, comfort,
convenience, noise and pollution control and efficiency in the operation of
vehicles and auxiliary equipment."
The City’s examples of past regulatory action only prove the point:
all of them involved the establishment of a “measure” of quality that could
be met by more than one available vehicle at a price ostensibly arrived at
through negotiations between dealer and medallion owner. The City failed
to cite a single example in which the TLC mandated the use of a specific
product to the exclusion of all others. There is no precedent and no authority
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for the TLC’s departure from its standard-setting role to select the Nissan
NV200 as “necessary to carry out the powers and duties delegated to it by or
pursuant to federal, state or local law,” Coalition, supra, 23 N.Y.3d at 693,
as it is obvious that many manufacturers would be capable of producing a
vehicle with attributes identical to those of the Nissan NV200.
The effect of the Appellate Division majority’s decision is to
transform the TLC from a regulatory agency into a player in the taxi
industry, a partner of Nissan with absolute, unbridled control over the sole
make and model of every taxi in the City, and to leave the regulated class of
medallion owners with no ability to contract with vehicle manufacturers to
make a vehicle with the identical features as the Nissan NV200 or to work
with other manufacturers to meet the standards for a safe taxi.
In sum, the TLC has not been given the authority to adopt the Revised
Taxi of Tomorrow Rules, and the rules should be struck down.
CONCLUSION
For the reasons herein as well as for the reasons in Appellants' brief in
the main, Appellants submit that the decision of the Appellate Division
should be reversed and the Revised Taxi of Tomorrow Rules should be
invalidated as an improper exercise by the TLC.
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Respectfully submitted,
FOX \RoTHrSCHILD LLP
Mitchell Berns, Esq.
Barry J. }v1uller, Esq.
Dana Katz, Esq.
100 Park A venue, 15th Floor
New York, New York 10017
(212) 878-7900
Attorneys for Appellants
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