Greater New York Taxi Ass'n v. New York City Taxi & Limousine Commission

40 Misc. 3d 1062
CourtNew York Supreme Court
DecidedJuly 11, 2013
StatusPublished
Cited by5 cases

This text of 40 Misc. 3d 1062 (Greater New York Taxi Ass'n v. New York City Taxi & Limousine Commission) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greater New York Taxi Ass'n v. New York City Taxi & Limousine Commission, 40 Misc. 3d 1062 (N.Y. Super. Ct. 2013).

Opinion

OPINION OF THE COURT

Alexander W. Hunter, Jr., J.

Petitioners’ application for an order pursuant to CPLR article 78, declaring certain amended rules of the New York City Taxi and Limousine Commission as arbitrary and capricious, is denied. Petitioners’ application for discovery and a trial is denied. Respondents’ cross motion seeking an order dismissing the petition pursuant to CPLR 3211 (a) (3) and (7) is granted and the proceeding is dismissed.

Petitioners Greater New York Taxi Association and its member Evgeny Freidman (collectively, petitioners) seek to declare that certain new regulations, dated July 12, 2012, adopted by respondent New York City Taxi and Limousine Commission (TLC) and its commissioner, respondent David Yassky (collectively, respondents), are arbitrary, capricious, and/or beyond the authority of TLC.

On October 23, 2012, petitioners submitted a request to TLC for records pursuant to the Freedom of Information Law (FOIL) concerning decisions (1) permitting yellow taxi medallion owners to retain 5% of each taxi fare paid by credit card; (2) raising the fleet lease caps for credit card processing fees to $10 per shift, instead of a 5% withholding on credit card transactions; (3) requiring yellow taxi medallion owners to withhold from drivers $0.06 per ride for health care and disability coverage; (4) granting no portion of the 17% fare increase to medallion owners; and (5) changing the exterior markings of yellow taxicabs. Additionally, petitioners sought records concerning executive sessions held in connection with raising the fleet lease caps, and records concerning passengers’ use of credit cards to pay taxi fares. On November 6, 2012, petitioners renewed their FOIL request, as petitioners had not received a response from respondent TLC. By letter dated January 31, 2013, TLC’s records ac[1065]*1065cess officer enclosed responsive documents to petitioners’ FOIL request, but acknowledged that the production was not complete and that more documents would be forthcoming. Petitioners filed a written appeal of the January 31, 2013 deficient production. On March 1, 2013, petitioners received two additional responsive documents, and notified TLC of their intent to file a written appeal of the deficient production.

Petitioners commenced the instant CPLR article 78 proceeding asserting four causes of action seeking an order declaring as arbitrary and capricious the: (1) credit card changes; (2) exterior changes; and (3) health fund deduction. Petitioners’ fourth cause of action seeks attorneys’ fees. Petitioners also seek discovery on the above causes of action. Petitioners aver that: (1) replacing the 5% credit card reimbursement with a $10 per shift reimbursement shifts the cost of credit card expenses from drivers to owners; (2) TLC exceeded its delegated powers in promulgating the rule authorizing the creation of a drivers’ health and disability fund; (3) the rule mandating the removal of the word “Taxi” from the exterior of taxicabs and replacing it with a large “T” is arbitrary and capricious and should be annulled; (4) TLC violated the Open Meetings Law entitling petitioners to recover attorneys’ fees; and (5) petitioners should be permitted to conduct discovery.

In opposition, respondents cross-move to stay or dismiss the first cause of action, and to dismiss the second through fourth causes of action, averring that: (1) petitioners have not suffered any injury from the implementation of the $10 per shift reimbursement; (2) petitioners do not have standing to challenge the $0.06 driver health fund deduction; (3) petitioners have not suffered any injury from recent changes to the exterior markings on taxicabs; (4) the petition failed to establish a violation of the Open Meetings Law; and (5) petitioners are not entitled to discovery.

Petitioners oppose respondents’ cross motion, averring that: (1) petitioners have standing to challenge the credit card reimbursement regulation, as petitioners have already suffered an actual injury; (2) petitioners have standing to assert the claim that TLC exceeded its delegated powers when it mandated the creation of a drivers’ health and disability plan; (3) TLC’s rule mandating changes in the exterior appearance of taxicabs is arbitrary and capricious; and (4) petitioners should be permitted to conduct discovery.

In reply, respondents aver that: (1) petitioners failed to submit opposition to respondents’ motion seeking dismissal of their [1066]*1066Open Meetings Law claim; (2) petitioners offered no rationale why the first cause of action, pertaining to the lease cap credit card increase, should not be severed and stayed; (3) recent credit card data continues to show that petitioners have suffered no injury-in-fact from the change to a $10 per shift flat credit card fee reimbursement; (4) petitioners have no standing to challenge the $0.06 driver health care deduction and have failed to show that the deduction is beyond the powers of TLC; (5) petitioners’ challenge to the new exterior markings on taxicabs must be dismissed as petitioners’ new economic injury allegations cannot be considered, and the exterior markings claim is barred by laches; and (6) petitioners have set forth no entitlement to discovery in this proceeding.

An administrative regulation will be upheld only if it has a rational basis and is not unreasonable, arbitrary or capricious. (Kuppersmith v Dowling, 93 NY2d 90 [1999].) “An action is arbitrary if it ‘is without sound basis in reason and is generally taken without regard to the facts.’ ” (Matter of Roberts v Gavin, 96 AD3d 669, 671 [1st Dept 2012], quoting Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 231 [1974].)

TLC is granted broad power to “adopt and establish an overall public transportation policy governing taxi . . . services.” (See NY City Charter § 2300.) Respondents are authorized to set fares, “consider[ing] all facts which in its judgment have a bearing on a proper determination, with due regard among other things to . . . the expenses of operation including the income of drivers.” (NY City Charter § 2304 [c].) Respondents’ rule that dictates how owners’ credit card processing expenses are reimbursed fits within the “regulatory and supervisory” authority of TLC as set forth in NY City Charter §§ 2300 and 2303 (b). Moreover, respondents’ rule is rationally supported by the rising costs of living and expenses, and the fact that taxi drivers earn less from a credit card trip than from a cash trip, whereby drivers often seek to discourage passengers from paying by credit card. (Mintz aff, exhibit 10 at 9-13, 29-30.) Accordingly, petitioners’ first cause of action is dismissed pursuant to CPLR 3211 (a) (7).

To challenge a governmental action in an article 78 proceeding, a party must first have standing to sue. (See New York State Assn. of Nurse Anesthetists v Novello, 2 NY3d 207, 211 [2004].) A plaintiff must show an “injury in fact,” and the [1067]*1067injury must fall within the zone of interests or concerns sought to be promoted or protected. (Id. at 211, citing Society of Plastics Indus. v County of Suffolk, 77 NY2d 761, 763 [1991].) Petitioners have failed to annex complete financial information showing that the $10 per shift credit card reimbursement is inadequate overall. However, respondents affirmed that medallion owners have actually benefitted from the change to a $10 per shift flat fee credit card reimbursement.

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Related

Greater New York Taxi Ass'n v. New York City Taxi & Limousine Commission
121 A.D.3d 21 (Appellate Division of the Supreme Court of New York, 2014)
Ahmed v. City of New York
44 Misc. 3d 228 (New York Supreme Court, 2014)

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Bluebook (online)
40 Misc. 3d 1062, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greater-new-york-taxi-assn-v-new-york-city-taxi-limousine-commission-nysupct-2013.