Street Hail - Summary Judgment Memo -FINAL-1

SUPREME COÛRT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

METROPOLITAN TAXICAB BOARD OF TRADE,OSSMAN ALI, AYALLO HACKING CORP.,BONANZA CAB CORP., BATH CAB CORP., andRONDEB CAB CORP.,

Plaintiffs,

-against-

MICHAEL R. BLOOMBERG, in his ofhcial capacity asMayor of the City of New York; CITY OF NEW YORK;THE NEV/ YORK CITY TAXI AND LIMOUSINECOMMISSION ("TLC"); DAVID S. YASSKY, in hisofficial capacity as Commissioner, Chair and ChiefExecutive Officer of the TLC,

Index No. 10247212012

Defendants

DEFENDANTS' MEMORANDUM OF LAW IN SUPPORT OF'THEIR MOTION FORSUMMARY JUDGMENT

MICHAEL A. CARDOZOCorporation Counsel of theCity ofNew YorkAttorney for Defendants100 Church StreetNew York, New York 10007(212) 788-0782

GABRIEL TAUSSIGROBIN BINDERAVE MARIA BRENNANCARzuE NOTEBOOM

Of Counsel.

MAY 7,2012

TABLE OF CONTENTS

PRELIMINARY STATEMENT

BACKGROLIND FACTSChapter 602 of the Laws of 2011 and Chapter 9 of the Laws of 2012

POINT I

Page

2

PLAINTIFFSCHALLENGELAV/, ANDDISMISSED ....,....

LACK STANDING TOTHE STREET HAIL LIVERYTHEIR CLAIMS MUST BE

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POINT II

POINT III

POINT IV

POINT V

THE STREET HAIL LIVERY LAV/ DOES NOTVIOLATE PLAINTIFFS' RIGHTS LINDERARTICLE IX, SECTION 2 OF THE NEW YORKSTATE CONSTITUTION

THE STREET HAIL LIVERY LAW DOES NOTVIOLATE PLAINTIFFS' RIGHTS UNDERARTICLE III, SECTION 17 OF THE NEV/ YORKSTATE CONSTITUTION........

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18

25

PLAINTIFFS' TAKINGS CLAIM ISSPECULTAIVE AND, IN ANY EVENT, FAILSAS A MATTER OF LAV/ .

THE ENACTMENT OF THE STREET HAILLIVERY LAV/ DOES NOT VIOLATE THESTATE ENVIRONMENTAL QUALITY REVIEWACT; TLC WAS NOT REQUIRED TOCONDUCT ENVIRONMENTAL REVIEV/PRIOR TO ISSI.ING THE HAIL LICENSES ORBASE PERMITS 30

CONCLUSION 34

Defendants, Michael R. Bloomberg, in his official capacity as Mayor of the City

of New York, the City of New York (the "City"), the New York City Taxi and Limousine

Commission ("TLC"), and David Yassky, in his official capacity as Commissioner, Chair and

Chief Executive Officer of TLC, by their attomey, Michael A. Cardozo, Corporation Counsel of

the City of New York, submit this memorandum of law in support of their motion for summary

judgment in this declaratory judgment action, rejecting as a matter of law plaintiffs' claims

challenging Chapter 602 of the Laws of 2011, as amended by Chapter 9 of Laws of New York

2012 (the "street Hail Livery Law"), For all the reasons set forth herein, as well in the

accompanying Affirmation of Ave Maria Brennan, dated }lay 7, 2012 ("Brennan Affirmation"

or "Brennan Aff,") and the Affidavit of David Yassky, sworn to on }y',ay 7,2012 ("Yassky

Affidavit" or "Yassky Aff."), the provisions of the Street Hail Livery Law do not violate

plaintifß' state constitutional or statutory rights.

PRELIMINARY STATEMENT

The Street Hail Livery Law was enacted to meet the needs of residents and non-

residents of the City who do not have access to safe and reliable mass transportation such as

legal, licensed taxicabs available for street hails, The Street Hail Livery Law allows the City to

issue Hail Accessible Inter-borough Licenses ("HAIL licenses") to for-hire vehicles and the

street hailing of these vehicles in Brooklyn, Queens, the Bronx and Staten Island ("the

Boroughs"), except for the airports, and in Manhattan north of V/est ll0th Street and north of

East 96th Street ("Northem Manhattan"). Twenty percent of the HAIL licenses will be set aside

for wheelchair accessible vehicles. The Street Hail Livery Law also allows the City to issue up

to 2,000 additional taxicab medallions which must be restricted to wheelchair accessible

vehicles.

In the instant action, plaintiffs assert that the Street Hail Livery Law violates the

Home Rule provision and the Exclusive Privileges and Takings clauses of the New York State

Constitution, as well as the State Environmental Quality Review Act ("SEQRA"). As detailed

herein and in the accompanying Brennan Affirmation and Yassky Affidavit, there are no

disputed material issues of fact and as a matter of law, summary judgment should be granted to

the defendants.

BACKGROUND FACTS

Chanter 602 ofthe Laws of 2011 oì¿ Cnuoter 9 of the Laws of 2012

On December 23, 201I, Governor Cuomo signed into law Chapter 602 of the

Laws of 201l, and on February 17 , 2012, signed into law Chapter 9 of the Laws of New York

2012, which repealed certain sections and amended other sections of the previous statute relating

to for-hire vehicles in the City of New York. Among other things, Chapter 9, as amended,

authorizes New York City to issue 18,000 HAIL licenses authorizing the pick up by licensees of

passengers by street hail in Northern Manhattan and the Boroughs (except for the airports).

Chapter 9 also provides that 6,000 of the HAIL licenses shall be issued within 12 months from

the date of issuance of the first license and that 20 percent of these licenses will be restricted to

accessible vehicles, Further, for every block of 1,000 HAIL licenses issued, the 20 percent

accessibility requirement must be met prior to the issuance of any additional HAIL licenses.

The New York State Senate Introducer's Memorandum in Support of Chapter 9 of

the Laws of 2012 set forth as the "Justification" the following:

The bill would allow the City to implement a taxi plan that willmore effectively service all five boroughs of New York City andgreatly increase the availability of accessible taxicabs and for-hirevehicles. The creation of this plan was prompted by threepersistent mobility problems: the lack of accessible vehicles forpeople with disabilities; nearly non-existent taxi availability inunderserved areas of the City (e.g., boroughs outside Manhattan);

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and, insufficient taxi supply in Manhattan's central businessdistrict.

Taken together, both the issuance of HAIL licenses forunderserved neighborhoods and of new, accessible medallions, asauthorized by this legislation, would substantially improve theability of City residents and visitors, including persons withdisabilities, to get where they need to go quickly and easily,without having to own a cat) and would make living in andtraveling to New York City more accessible, affordable, andenjoyable.

Copy of the New York State Senate Introducer's Memorandum in Support is attached to the

accompanying Brennan Affirmation as Exhibit D.l

In enacting Chapter 9, the State Legislature made the following findings

The legislature finds and declares that the public health, safety andwelfare of the residents of the state of New York traveling to, fromand within the city of New York is a malter of substantial stateconcern, including access to safe and reliable mass transportationsuch as taxicabs, The majority of residents and non-residents ofthe city of New York do not currently have sufficient access tolegal, licensed taxicabs available for street hails in the city of NewYork. Additionally, the legislature finds and declares that it is amatter of public health, safety and welfare to ensure adequate andreliable transportation accessible to individuals with disabilities inthe city of New York. Currently, approximately 1.8 percent of thecity's approximately thirteen thousand yellow taxicabs isaccessible to individuals with disabilities, and an even smallerpercentage of the city's approximately twenty-three thousandlivery vehicles is accessible, The supply of accessible vehicles isinsufficient to provide adequate and reliable transportation for theresidents of and the commuters and visitors to New York city whohave disabilities and therefore inhibits their basic daily activities.This lack of accessible vehicles also prevents individuals withdisabilities from being able to rely on the street hail system to getto a destination quickly, particularly in an emergency, or to travelto a location not near a subway or bus stop. Improving access tomass transportation, including taxicabs, for the residents of and the

I Refe.ences in this memorandum of law to Exhibits A through E are to exhibits attached to theBrennan Affirmation and references to Exhibits F through L arc to exhibits attached to theYassky Affidavit.

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commuters and visitors to New York city furthers these matters ofsubstantial state concern.

Chapter 9 $ I - "Legislative findings"

A "Hail Accessible Inter-borough license" or "HAIL license" is defined in

Chapter9$4(b)as

a license issued by the New York city taxi and limousinecommission that authorizes a designated vehicle to pick uppassengers by street hail outside of the HAIL exclusionary zone.Provided, however, that a HAIL vehicle shall be permitted toaccept passengers by prearranged call at airports and outside theHAIL exclusionary zone.

Chapter 9 $ 5 authorizes TLC "to issue hail accessible inter-borough licenses" and

states that "[n]o more than eighteen thousand HAIL licenses shall be issued." It further provides

at subsection (b) the following

Six thousand of such HAIL licenses shall be issued within twelvemonths from the date on which the first HAIL license is issued("first issuance").... Twenty percent of the HAIL licenses issuedin the first issuance will be restricted to accessible vehicles, and forevery block of one thousand HAIL licenses issued, the twentypercent requirement must be met prior to the issuance of anyadditional HAIL licenses. Twelve months after the firstissuance, the TLC may issue up to six thousand additional HAILlicenses (the "second issuance"). One year after the secondissuance, the TLC may issue up to six thousand additional HAILlicenses ("third issuance"),

Chapter 9 $ 5 (b) also sets forth who may be issued a HAIL license in the first

instance, as well who may be issued a HAIL license restricted to accessible vehicles if any of

those licenses remain three months after the first issuance:

Within the first three years of the first issuance, HAIL licensesmay be issued only to owners of for-hire vehicles or for-hiredrivers who have been licensed by the TLC for at least one yearand are in good standing with the TLC; provided that three monthsafter the first issuance any remaining HAIL licenses in the firstissuance restricted to accessible vehicles authorized for issuance

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may be issued without regard to such restrictions in a manner to bedetermined by the TLC,

The "HAIL exclusionary zone" is defined in Chapter 9 $ 4(c) as

airports in the city of New York in which a HAIL vehicle isprohibited from pick-up of passengers by street hail and that areaof the city of New York in Manhattan south of east ninety-sixthstreet and south of west one hundred tenth street in which a HAILvehicle is prohibited from pick-up of passengers by street hail orpre-arranged call and in such other areas as the TLC shall by ruleprohibit HAIL vehicles from accepting passengers by street hailconsistent with this act. Provided, however, that a HAIL vehicleshall be permitted to accept passengers by prearranged call atairports and outside the HAIL exclusionary zone.

A "for-hire vehicle" is defined in Chapter 9 $ 4(d) in relevant part as "a motor

vehicle carrying passengers for-hire in the city, with a seating capacity of twenty passengers or

less, not including the driver, other than a taxicab, coach, commuter van or an authorized bus

operating pursuant to applicable provisions of law." For-hire vehicles ("FHV") include liveries,

black cars, and limousines. Drivers of FHVs must obtain a TLC license. New York City

Administrative Code $ 19-505(a).

HAIL licenses are "transferable to owners of for-hire vehicles licensed by the

TLC or a for-hire driver in good standing with the TLC" (Chapter 9 $ 7), subject only to the

limitation that an "individual or entity may only own one HAIL license except that an individual

or entity may not own more than five HAIL licenses restricted to accessible vehicles." Chapter 9

$ s(c).

The ability of yellow taxicabs to pick up passengers hailing a taxicab from any

street in the City where it is legal to do so remains unaffected by Chapter 9, and is, in fact,

specifically reaffirmed at Section 11 as follows:

Notwithstanding any of the foregoing it shall remain the exclusiveright of existing and future taxicabs licensed by the TLC as ataxicab to pick up passengers via street hail in such areas of the

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city of New York wherein HAIL license holders are prohibitedfrom accepting such passengers. All vehicles licensed by the TLCas taxicabs shall be permitted to pick up passengers via street hailfrom any location within the city of New York unless the pick-upof passengers is prohibited by law. No driver of any for-hirevehicle shall accept a passenger within the city of New York bymeans other than pre-arrangement with a base unless said driver isoperating either a (i) taxicab licensed by the TLC with a medallionaffixed thereto, or (ii) a vehicle with a valid HAIL license and saidpassenger is hailing the vehicle from a location where street hailsof such vehicles are permitted.

Chapter 9 $ 8 authorizes the City to issue up to two thousand additional taxicab

licenses, also known as medallions2:

provided, however, that such taxicab licenses shall be restricted tovehicles designated for the pu{pose of transporting persons inwheelchairs or containing a physical device or alteration designedto permit access to and enable the transportation of persons inwheelchairs in accordance with the Americans with DisabilityAct.... The authorization provided in this section is conditionedupon the TLC making available for issuance the licenses andpermits authorized pursuant to section five of this act and section 4of chapter 602 of the laws of 2ü1 relating to livery permits in thecity of New York.

On April 19,2012, TLC approved rules implementing the HAIL license program

authorized by the Street Hail Livery Law, which will become effective on June 2,2012. The

rules outline the characteristics of and the services that the new HAIL vehicles will provide to

New York City residents and visitors. TLC intends to start issuing HAIL licenses sometime in

June 2012. Yassky Aff . n 29. TLC intends to auction off the first 200 of the newly authorized

medallions in July 2012. Id. 135.3

2 Taxicab licenses are also called "medallions" because each vehicle has been issued a metalplate, known as a medallion, displaying the license number of the vehicle. Administrative.Code$ 19-502(h). The number of medallion taxicabs is limited by law.

3 TLC is not authorized to issue more than 400 new medallions until a disabled accessibility planis approved by the New York State Department of Transportation. Chapter 9 $ 8.

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ARGUMENT

POINT IPLAINTIFFS LACK STANDING TOCHALLENGE THE STREET HAIL LIVERYLAW, AND THEIR CLAIMS MUST BEDISMISSED

Standing is a threshold issue that must be established by the party seeking judicial

revtew Qnniefr¡ nf the Þlqcfins Tnrlrr ñnrrnfrr of Q'rffnllz 77 N.Y.2d 76r,769 (1991).T V

"Whether a person seeking relief is a proper party to request an adjudication is an aspect of

justiciability which, when challenged, must be considered at the outset of any litigation." Id. To

establish standing a plaintiff must first demonstrate an injury in fact, distinct from the general

public, meaning that the plaintiff was (or would be) actually harmed by the challenged

administrative action. The injury must be more than conjectural or speculative. Transactive

Corp. v, New York State Dep't of Social Svcs.,92N.Y,2d 579,587 (1998); Society of Plastics

Indus., 77 N.Y.2d at772,774-75; Hunts Point Terminal Produce Coon. Ass'n v. New York Citv

Economic Dev, Com., 36 4.D.3d234,245 (lst Dep't 2006),Iv. denied, 8 N.Y.3d 827 (2007);

Greyhound Lines. Inc. v. Janette Sadik-Khan, No. 101581112 (Sup. Ct. N. Y. Co. Apr, 10,2012)

(Exhibit E).

Second, a plaintiff must also demonstrate that the claimed injury falls within the

zone of interests or concems to be protected by the statute under which the agency has acted,

Transactive Corp, 92 N.Y,2d at 587; Society of Plastics, TT N.Y.2d at 773; Hunts Point, 36

A.D.3d at 245. As the Court of Appeals noted, "a party must show that the in-fact injury of

which it complains (its aggrievement, or the adverse effect upon it) falls within the 'zone of

interest,' or concerns, sought to be promoted or protected by the statutory provision under which

the agency has acted." Society of Plastics, 77 N,Y.2d at773.

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Here, plaintiffs do not allege an injury-in-fact sufficient to confer standing.

Plaintiffs' alleged injury is that the issuance of HAIL licenses will potentially "devalue taxicab

medallions and upset investment-backed expectations" because taxicabs will have to "compete

for a limited number of fares. . . ." S-gg Complaint nn 97 , 104. It is well settled that an allegation

of competitive disadvantage in business is not a suffrcient injury to confer standing to challenge

governmental decisions of the type at issue here. See Sun-Brite Car Wash. Inc. v. Bd. of Zoning

and Appeals, 69 N.Y.2d 406, 409 (1987); Friedman v. Town Clerk of Town of Hempstead, 62

A.D.3d 699 (2dDep't 2}}9);Paolanseli v. Stevens,Ig A,D.2d763 (3dDep't lgæ)!

In Friedman, licensed taxicab companies challenged a municipality's

determination to issue licenses to several other taxicab companies. The Second Department

affirmed the trial court's decision dismissing the petition, holding that petitioners failed to

demonstrate that they suffered any damages separate and distinct from the community generally.

62 A.D.2d at 700. The Court addressed the specific competitive disadvantage claims asserted

here: "[t]he only potential injury suggested in the record is an increase in business competition

which, considered alone, is insufficient to confer standing." Id. See also Matter of Suburban

Carting Corp. v. Lafayette,20I A.D.2d 483, 484 (2d Dep't 1994) (holding that a city's issuance

of a temporary waste collection license to a recycling company did not have harmful effects on

petitioner waste collection company sufficient to confer standing: "Competitive injury, of itself,

will not confer standing."); Matter of Century Circuit Inc. v. Chave, 50 Misc. 2d 816 (Sup. Ct.

Nassau Co. 1966) (effect on a businesses' monetary return due to the location of a nearby

competitor does not make the petitioner an"aggrieved party" with standing to sue).

4 Plaintiffs also allege that they are ineligible to apply for HAIL licenses. This would arguablygive them standing only with respect to their exclusive privileges clause claim addressed in PointIII infra.

I

Plaintifß here raise claims of competitive disadvantage nearly identical to those

raised in Friedman, and therefore do not adequately allege an injury in fact, Indeed, plaintiffs'

alleged injuries here are even more attenuated than those found to be insufficient by the court in

Friedman. There, the issuance of new taxi licenses was alleged to result in an increase of direct

competition for the town's existing taxicabs, whereas here, the HAIL licensees are prohibited

from picking up fares in the areas of the City where medallion taxicabs do 95 percent of their

business. Yassky Aff. T 4. The Complaint is littered with allegations that TLC's issuance of

HAIL licenses will harm plaintifß' economic well-beingt, but these allegations are plainly

insufficient for standing purposes. See Friedman, 62 A.D.2d at 700-01 (petitioners lacked

standing since their allegations were limited to "potential economic harm caused by increased

business competition").

In addition, plaintiffs' alleged economic harms are too speculative to confer

standing. Plaintiffs allege that medallion holders will be harmed by the issuance of HAIL

licenses because they previously had exclusive rights to pick up street hails in all areas of the

City, including Northern Manhattan and the Boroughs, but after HAIL licenses are issued will

have to compete for those fares. Complaint 1[T 3, 7, 10,28,31,35,37,39, 48, 49,82-105'

However, as noted above, only 5 percent of all medallion taxicab pickups are in Northern

Manhattan and the Boroughs. Moreover, plaintiffs lose no rights to pick up street hails in these

5 See, e.g., Complaint flfl 7 ("[t]he law threatens the livelihood of [the] medallion owners ... whohave their life savings . . . tied up the medallion industry. . . . [M]any medallion owners relied onextensive financing to purchase their medallion"); 38 (reliance on exclusive rights to pick upstreet hails induced owners to make "significant business decisions"); 44 (HAIL licenses "willirreparably damage the livery and taxicab industries"); 96 (HAIL licenses "dilutfe] the value ofeach medallion"); 100 (a "medallion is a valuable asset, and ownership decisions require , , , amajor f,rnancial investment. . . . Prices are determined by market forces,"); 102 (HAIL licenseswill cause a "decline in driver income"). See also Complaint fi 6, 37, 94,95,97 -99,101, 103,r04.

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areas under the TLC's rules. Instead, they merely face competition in areas that the yellow

taxicab industry has chosen not to serve. Any speculative economic injury caused by

hypothetical future events, is not injury-in-fact sufficient to confer standing. See Matter of

Riverhead PGC. LLC v. Town of Riverhead, T3 A.D.3d 931 ,933-34 (2d Dep't), lv. denied, 15

N.Y.3d 709 (2010) (speculation that increased traffic will damage a competitor's customer base

is insufflrcient to demonstrate the injury-in-fact needed to confer standing).

Plaintiffs' claims of increased traffic congestion are similarly speculative, See

Complaint T'11 8, 57, To start, plaintiffs have not explained how increasing the number of

vehicles that can pick up street hails in northern Manhattan or the Boroughs would result in an

increase of traffrc that will particularly harm medallion owners. Aside from repeating the

number of HAIL licenses that the City is permitted to issue, plaintifß do not offer anything other

than speculation that these licenses will result in substantially more vehicle trips than occur now.

Indeed, plaintiffs acknowledge that many livery vehicles are illegally picking up street hails in

these areas already, see Complaint fl 84, and many future HAll-licensed vehicle customers

currently telephone a for-hire-vehicle because taxicabs are not present to be hailed in northern

Manhattan or the Boroughs. Id. at fl 31. Moreover, there is no requirement that HAIL licensees

obtain new vehicles. Rather they can continue to use vehicles which are already being used as

FHVs. Finally, and most importantly, even assuming that the vaguely purported traffic increases

are due to the issuance of HAIL licenses, plaintiffs have failed to establish that this alleged

increased traffic congestion is an injury "specihc to them and distinguishable from those suffered

by the public atlarge." Harris v. Town Bd. of Riverhead,T3 A.D.3d922,924 (2dDep't), lv.

denied, l5 N,Y.3d 709 (2010).

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To the extent plaintiffs are separately alleging a violation of the New York State

Environmental Quality Review Act ("SEQRA"), ECL $ 8-0101 et seq,, they also lack standing to

bring this claim.6 To establish standing for SEQRA claims a challenger "must demonstrate that

they stand to suffer an injury that is environmental and not solely economic in nature . . . ." See

Mobil Oil Corp. v. Syracuse Industrial Dev. Agency, 559 N,Y,S.2d 947 (1990); Nature's Trees.

Inc. v. County of Suffolk,293 A.D.2d 543,544 (2d Dep't 2002),Iv. denied, 98 N.Y,2d 608

(2002); Wall St. Garage Parking Corp, v. Lower Manhattan Dev. Corp.. 2004 N,Y. Misc. LEXIS

2580 (Sup. Ct. N.Y. Co. 2004) (". . . economic injury is not, by itself, within the zone of interest

which SEQRA seeks to protect . . .").

Here, as described above, plaintifß' interest and alleged injuries are squarely

focused on their o\iln economic advantage, not any potential environmental impacts. See, e.9.,

ComplaintTT 3,7, 10,28, 3I,35,37,39,48,49,82, 105-100. Plaintiffs'mere mention of traffrc

and air quality is an insufficient allegation of environmental harm to confer standing under

SEQRA. See O'Donnell v. Town of Schoharie, 291 A,D.2d 739, 740 (3d Dep't 2002) (bald

claims of "environmental impact" ate insufhcient to serve as a basis for standing); see also Soc'y

of Plastics Indus. v. County of Suffolk , 77 N .Y .2d 7 6l , 777 (1991) (couching economic interest

in entirely speculative environmental harms does not bring a plaintiff within SEQRA's zone of

interest); Valhalla Union Free Sch. Dist. v. Board of Lesislators, 183 A.D,2d 771 (2d Dep't

1992), appeal denied by, 80 N.Y.2d 758 (1992) ("...economic injury is not by itself within the

zone of interests which SEQRA seeks to protect.") Accordingly, plaintiffs have not alleged the

6 While not asserted as a separate cause of action from their Home Rule claim, plaintiffs'contentions about the lack of environmental review raise a SEQRA issue. See Complaint flfl 8("no appropriate SEQRA review has been conducted"); 57 ("Defendants have also failed toconduct an appropriate environmental assessment of the Outerborough Law"). To the extent thatthese allegations raise a claim under SEQRA, they are addressed in Point V below.

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environmental injury necessary to confer standing to bring claims under SEQRA. See Mobil Oil

Corn V Svracuse I rstriql l)e.r¡ Aoenc.v 559 N.Y.S.2d at950.

Further, plaintiffs do not have standing to assert their claim that the Street Hail

Livery Law violates New York State's Home Rule Provision as codified pursuant to Article IX,

Section 2 of the New York State Constitution, Complaint T'lJ 108-114. Only a municipal

government that seeks to act in a field preempted by state legislation may challenge such

legislation if it was passed without a home rule message. See Russell v. Board of Plumbins

Exam'rs, 74 F. Supp.2d349,350 n.1 (S.D.N.Y. 1999) (holding that plaintiff plumbing examiners

did not have standing to challenge New York State legislation passed without a home rule

message, as "[o]nly a local municipality which wishes to license plumbers can raise this

challenge to the Plumbing Licensing Law."), affld, 1 Fed. Appx. 38, 42 (2d Cir. 2001) (a

plumber's interest in conducting business was not within the "zone of interests protected by

fArticle IX, Section 2] the Municipal Home Rule provision"), Indeed, the zone of interest

protected by Article IX, Section 2 of lhe New York State Constitution includes the rights and

powers of political subdivisions of the state, rather than rights of the individual. See Black

Brook v. State, 41 N.Y.2d 486, 487 (N.Y. 1977) ("when an act of the State Legislature is alleged

to have encroached upon the powers of a locality in violation of the home rule article, the

standing doctrine may not impede the local government from asserting its political rights, rights

directly and specifically provided in article IX. The result is not . . . a significant erosion of the

general standing rule; all that is recognized is a discriminating exception available when article

IX is in issue."); see also Diederich v. Rockland County Police Chiefs' Assn,, 33 A.D,3d 653,

654 (2d Dep't 2006) (citizen plaintiffs could not challenge amunicipal action as aviolation of

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the Home Rule Provision because they have not shown "a special right or interest , . , that is

different from that of all taxpayers.")

POINT IITHE STREET HAIL LIVERY LA\il DOESNOT VIOLATE PLAINTIFFS' RIGHTSUNDER ARTICLE IX, SECTION 2 OF THENE\ü YORK STATECONSTITUTION

Turning to the merits, plaintiffs' f,rrst claim is that the enactment of the Street Hail

Livery Law violates the Home Rule provisions of the New York State Constitution. Complaint fl

112. As explained hereafter, plaintiffs' claim is baseless.

Article IX, Section 2 of the New York State Constitution is entitled "Powers and

duties of legislature; home rule powers of local govemments; statute of local governments" and

provides, in relevant part, as follows:

(b) Subject to the bill of rights of local governments and otherapplicable provisions of this constitution, the legislature:

(2) Shall have the power to act in relation to the property, affairs orgovernment of any local government only by general law, or byspecial law[7] only (a) on request of two-thirds of the totalmembership of its legislative body or on request of its chiefexecutive officer concurred in by a majority of suchmembership....

This request to the State Legislature from the locality or localities affected by the

special law is often called a "home rule message," Thus, under this section, a state law cannot be

enacted without a home rule message by the New York City Council if it (l) is a special law,

7 A "special law" is defined in Article IX Section (3XdX4) of the New York State Constitutionas a "law which in terms and in effect applies to one or more, but not all, counties, counties otherthan those wholly included within a city, cities, towns or villages."

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meaning it applies only to specified municipalities, and (2) relates to the City's "property, affairs

or government".

However, if state legislation involves "in a substantial degree a matter of state

concern", then no home rule message is required, notwithstanding that the law is special and

affects the municipality's "property, affairs or govemment of a local government." Adler v,

Deegan, 251 N.Y. 467, 491 (1929) (concurring opinion Cardozo, Ch. J,). Since Adler, there has

been a "recognized exception to the home rule message requirement", in instances "when a

special law serves a substantial State concern." lent Association of the

of New York Inc. v. City of New York. 97 N,Y.2d 378 , 386 (2001)

Numerous laws have been held to involve substantial State concerns and thus not

require a home rule message notwithstanding the fact that the law may only be applicable to one

particular municipality. See. e.g., Revere v. Sullivan,95 N.Y.2d 881, 883 (2000)(reaffirming

that General City Law $ 2-a governing mayoral succession in certain cities concerned a matter of

State-wide significance not implicating home rule); City of New York v. State of New York, 94

N.Y.2d 577, 592 (2000)(no home rule message required where law repealed the commuter tax

because it "accomplishes the clearly expressed legislative objective of easing the burden on those

State residents working in New York City but living outside the City limits"); Town of Islip v.

Cuomo, 64 N.Y.2d 50, 56-57 (198a)(holding that "protection of the drinking water for a

substantial portion of the State's population" is a State concern, and explaining this doctrine);

Kelley v. McGee, 57 N.Y.2d 522,538-39 (1982)(summaÅzing examples of this doctrine and

holding district attorney salaries to be a matter of State concern); Wambat Realty Corp. v. State

of New York, 41 N.Y.2d 490,493-95 (1977)(comprehensive zoning and planning legislation

enacted to ensure preservation and development of the resources of the Adirondack Park region

t4

is a matter of State concern); Matter of 241 East 22nd St. Corp. v. City Rent Agency, 33 N.Y,2d

134, l4l-42 (1973)(rejecting home rule challenge to a certain rent restriction prohibiting local

rent regulations that are more stringent on owners, in part because rent control is "primarily a

matter of State concern"); ,

30 Misc. 2d 455,457-58 (Sup. Ct. Erie Co. 2010)(amendments to a law that require that public

entities undertaking public work projects prepare separate bid specifications and award separate

contracts for certain projects if they cost over a threshold amount are related to a "substantial

State-wide concern which concern falls within the State Legislature's purview, and must be

accorded great deference" by the Court); Dalva v. Pataki, 2006 N.Y. Misc. LEXIS 9370, *21

(Sup. Ct. N,Y. Co. 2006)(State's substantial interest in the Seventh Regiment Armory project in

Manhattan is "manifest in its statement of legislative intent"),

The Street Hail Livery Law falls squarely within this exception, The law has

explicit legislative findings stating that it is intended both to improve access to safe and reliable

mass transportation for residents of New York State traveling to, from and within the City of

New York, and to improve access to taxicab and livery transportation for disabled passengers.

The legislative findings also explicitly state that these are matters of substantial state concern.

Street Hail Livery Law $ 1 "Legislative findings,"

It has long been established that transportation is considered a matter of state

concern, even when the legislation is focused upon a particular city, Osborn v. Cohen , 272 N.Y .

55, 59 (1936). In McAneny v. Board of Education, 232 N.Y.377,393 (1922), the Court of

Appeals upheld the New York Rapid Transit Act in the face of a state constitutional challenge,

noting that "rapid transit for the city of New York has, for many years, ... been generally

regarded as a state affair." More generally, the "public health and safety of the people of the

15

City of New York" has been cited as a subject of suffrcient "State-wide importance". Kef,ley_Ir..

McGee, 57 N.Y.2d 522,538 (1982).

Further evidence of the fact that transportation, and more importantly, for-hire

vehicle service is a substantial state concern is the reciprocity between for-hire vehicle licensing

jurisdictions as provided in the Vehicle and Traffic Law. Section 498 is entitled

"Interjurisdictional pre-arranged for-hire vehicle operation" and states, in relevant part, as

follows:

Reciprocity. A ple-arranged for-hire vehicle that is licensed toprovide pre-arranged transportation for cclmpensation by alioensing jurisdiction meeting the standards and requirements setforth in subdivisions three. four and six of this section shall beauthorized to pick up passengers in such jurisdiction for drop offwithin the same julisdiction, to pick up passengers in anotherlicensing jurisdiction for drop off within the licensing jurisdictionlicensing such pre-arranged lbr-hire vehicle, to drop off passengersin anothct licensing jutisdiction who were picked up within thelicensing juri sdiction licensing such pre-arranged for-hire vehicle,and to transit other licensing jurisdictions.

Similarly, the Court of Appeals has confirmed that the mobility of state residents

may also be a matter of state concern. In Uniformed Firefighters Association v. City of New

York, 50 N,Y.2d 85, 90 (1980), the court held that a statute overriding city residency

requirement for firefighters did not require a home rule message because the State had an interest

in "affording residential mobility to members of the civil service."

Moreover, there can be little doubt that improving access to publicly available

transportation for the disabled is a matter of state concern. Indeed, the State Legislature

explicitly found and declared

that it is a matter of public health, safety and welfare to ensureadequate and reliable transportation accessible to individuals withdisabilities in the city of New York. Currently, approximately 1.8percent of the city's approximately thirteen thousand yellowtaxicabs is accessible to individuals with disabilities, and an even

16

smaller percentage of the city's approximately twenty-threethousand livery vehicles is accessible. This supply of accessiblevehicles is insufficient to provide adequate and reliabletransportation for the residents of and the commuters and visitorsto New York city who have disabilities and therefore inhibits theirbasic daily activities, This lack of accessible vehicles also preventsindividuals with disabilities from being able to rely on the streethail system to get to a destination quickly, particularly in anemergency, or to travel to a location not near a subway or bus stop.Improving access to mass transportation, including taxicabs, forthe residents of and the commuters and visitors to New York cityfurthers these matters of substantial state concern,

Chapter 9 $ 1 - "Legislative findings"

As detailed in the Yassky Aff,rdavit , the Street Hail Livery Law is designed to

improve access to street hail service in areas of New York City that are not adequately served by

yellow taxicabs and cannot be legally served by existing livery vehicles who are licensed only to

pick up passengers by prearrangement and to provide additional wheelchair-accessible taxicab

and livery service. The Legislative Findings afflrrmatively state that the public health, safety and

welfare of the residents of the State of New York traveling to, from and within the City is a

matter of substantial State concern, including access to safe and reliable mass transportation such

as taxicabs, as is providing wheelchair accessible transportation to disabled persons, Further, the

Findings also affirmatively state that improving access to mass transportation, including

taxicabs, for the residents of and commuters and visitors to the City, as well as wheelchair

accessible taxicab and liveries, furthers these matters of substantial state concern. Indeed, a

portion of the HAIL fares goes to the Metropolitan Transportation Authority, a public benefit

corporation established under state law which oversees transportation services for 12 counties in

New York State. Chapter 9 of the Laws of 2012 ç 14; New York State Tax Law $ 1288(c).

l7

For all these reasons, the Street Hail Livery Law challenged by plaintiffs herein

"serves a substantial state purpose" and thus does not violate the home rule message

requirement. Accordingly, summary judgment should be granted on this claim.s

POINT IIITHE STREET HAIL LIVERY LA\il DOESNOT VIOLATE PLAINTIFFS' RIGHTSUNDER ARTICLE III, SECTION 17 OF' THENE\il YORK STATE CONSTITUTION

Plaintiffs' second claim is that the enactment of the Street Hail Livery Law also

violates the Exclusive Privileges Clause of the New York State Constitution which bars the

Legislature from passing"a private or local bill" on certain listed matters, including "[g]ranting

to any private corporation, association or individual any exclusive privilege, immunity or

franchise whatever." Article III, Section 17. Complaint fl 119. Plaintiffs' essential claim that the

Street Hail Livery Law confers a privilege on current holders of for-hire vehicle licenses and

base permits and thus violates this clause, must fail. Taken as a whole, Section 17 was intended

to prevent laws aimed at protecting the narrow corporate interests of monopolies. See Matter of

Hurowitz v. Board of Elections of the Cit), of New York 53 N.Y.2d 531, 533-34 (1981) ("It is a

basic tenet of both constitutional and statutory construction that the general intent of an article or

statute should govern the interpretation of any one part...,"). There is no legal authority to

suggest that Section 17 was intended to prohibit the legislature from establishing reasonable

8 Plaintiffs make much of the fact that the City Council had the authority to increase the numberof taxicab medallions, as well as to implement a street hail livery program. See, Complaint fl 69,citing New York City Charter $ 2303(bXa); Complaint I 77, citing New York State GeneralMunicipal Law $ 181. But in that regard, plaintiffs miss the point, Notwithstanding anyauthority a local legislative body may have, the State Legislature has the oveniding authority toadopt laws affecting municipalities. See e.g., Council of Cit)' of N.Y. v. Bloomberg, 6 N.Y.3d380,392-93 (2006). Those laws do not require a home rule message where, as here, they addressmatters of substantial state concern.

18

licensing criteria as part of a broad-based regulatory scheme in service of a legitimate state

purpose.

For well over a century, the Court of Appeals has recognized that the Exclusive

Privileges Clause "was evidently aimed at monopolies." Matter of Union Ferry Co. of Brooklyn,

98 N.Y. 139, 150 (1885). As the court explained in Matter of Union Ferry, the constitutional

provision has primarily been used to invalidate nineteenth century laws that sought to insulate

the private financial interests of individual companies. Id. atl5l-52 (noting thatan example of

such a law "provided that it should not be lawful to erect any bridge or establish any ferry within

three miles of the place where the bridge of the company should be erected, or to cross the river

within three miles of the bridge without paying toll" -- literally creating a state-imposed

monopoly). The court distinguished such laws from the law at issue, which granted legal title to a

new ferry slip to the lessees of an individual feny company to "increase the capacity not only of

that company, but of all future lessees of the ferry, to meet the wants of the public...." Id. at

149. The court aptly noted that "[i]t cannot be that the constitutional prohibition should be so

construed as to deprive the city of New York of the power of increasing its feny

accommodations by the means provided in this act." Id.

In Consumers Union of the United States v. New York, 5 N.Y.3d 327, 36I

(2005), the Court of Appeals recently reafhrmed Matter of Union Ferry's description of the

purpose and intent behind the Exclusive Privileges Clause, noting that "The 1938 Constitutional

Convention expressly endorsed Union Ferry's reasoning that the Exclusive Privileges Clause

was aimed at monopolies (see 7 Report of 1938 NY Constitutional Convention Comm, Problems

Relating to Legislative Organization and Powers, at 84)." Id at 361 , n.27 .

t9

Further, the Court of Appeals has set forth a two-pronged test for determining

whether a bill violates Section 17. First, the bill must be a "private or local bill" directed at a

single entity. Consumers Union, 5 N.Y.3d at 360-61.e Second, the bill must confer a privilege

upon the single entity to the exclusion of all others. Id. at 361-62. "Both elements-singleness

and exclusivity-must be present. Otherwise, all legislation directed at a single entity would be

invalid." Consumers Union, 5 N.Y,3d at361.

The Street Hail Livery Law is not a "private or local bill" directed at a "single

entity," Plaintiffs allege that by offering the sale of HAIL licenses to those currently licensed as

for-hire vehicle owners and drivers for the first three years (and in the case of accessible street

hail licenses for the first three months), the bill improperly privileges a discrete class of

individuals.

The statute provides that "[w]ithin the first three years of the hrst 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 and are in good standing with the TLC; provided that

three months after the first issuance any remaining HAIL licenses in the first issuance restricted

to accessible vehicles authorized for issuance may be issued without regard to such restrictions in

a manner to be determined by the TLC." Subdivision (b) of Section 5 of Chapter 9 of the Laws

of2012.

There is simply no legal authority to support the proposition that setting

reasonable criteria for a licensing scheme that limits eligibility to a class of tens of thousands of

potential applicants for the purposes of protecting public health, safety and welfare makes the

e 'We note that although the text of the constitutional provision suggests that "private or local"may be a separate concept from affecting a "single entity," the Court of Appeals, in its mostrecent articulation of the legal standard, appeared to conflate the "single entity" prong with the"private or local bill" requirement. See Consumers Union, 5 N.Y,3d at36L

20

statutea"privateorlocalbill"directedata"singleentity." Ifthatwerethecase,thenanystatute

that included grandfathering provisions, affording special privileges to a closed class of

individuals based on past performance, would implicate Section 17, As this example reveals,

plaintiffs' claim that a statutory attempt to limit eligibility for a privilege establishes a closed

class and therefore triggers the Exclusive Privileges Clause is specious, because it would extend

the scope of the constitutional provision far beyond its recognized purpose. While the language

of Section 17 does not support plaintiffs' position, the Court of Appeals has recently emphasized

in a case involving even more ambiguous language that "even when the plain meaning did not

produce absurd results but merely an uffeasonable one plainly at variance with the policy of the

legislation as a whole, this Court has followed that pu{pose, rather than the literal words," New

York State 2012 N.Y. LEXIS 587

(Ì.J.Y. Mar. 29,2012) (citing New York State Bankers Assn. v Albright, 38 N,Y.2d 430, 437

(re7s)

Moreover, in the few cases in which courts found prong one to have been

violated, the law at issue involved either a single corporation, Consumers Union, 5 N.Y.3d at360

(finding that law authorizing Blue Cross Blue Shield to convert from a not-for-profit to a for-

profit corporation and directing certain of Empire's assets be used for various public health and

charitable pu{poses was "private or local bill," because it applied "only to Empire," but finding

no violation of the Exclusive Privileges Clause because the second prong of "exclusivity" was

not met), or a single business, American Consumer Industries. Inc.. v, City of New York,281

N.Y.S,2d 467, 474 (lst Dep't 1967) (striking down a law that forced tenants of the Hunts Point

Market to deal exclusively with one supplier of ice because "[t]he franchise for an ice monopoly

cannot be held designed to promote public safety or public health"), or residents of a single

2T

building, lgth Street Associates v. State of New York,568 N.Y.5.2d771,773 (l't Dep't 1991)

(striking down a law providing eviction protection to the tenants of a single building), Research

has disclosed no case in which a law that limits eligibility to a class of tens of thousands of

potential applicants based on reasonable criteria for the purposes of protecting the public was

found to be a "private or local law" directed at a "single entity ." Cf. Matter of Corning v

Donohue, 29 N.Y.2d 209 (1971) (finding that legislation solely affecting Albany school district,

rather than other school districts within the state, was not "private or local" for the purposes of

Section 17 of Article III because to effectively administer the valid state interest of the state

educational system, "the Legislature must have some latitude in dealing with local conditions").

As to the second prong, by no measure does the Street Hail Livery Law confer a

privilege upon a single entity to the exclusion of all others. In the Court of Appeals' most recent

articulation of this standard, the court clarified that "exclusive" means that the privileges the

benef,rciary receives from the local or private law would be disturbed or invaded if the State

should give to another corporation the same rights, Consumers Union, 5 N.Y.3d at 361 (citing

Trustees of Exempt Firemen's Benevolent Fund of City of N.Y. v. Roome,93 N.Y. 313 (1883).

In other words, for the purposes of Section 17 , "the grant of power to a private corporation is not

'exclusive' simply because the same power is not possessed by other corporations, so long as

there is nothing to prevent the granting of such power to any other corporation." Matter of

Union Feny, 98 N.Y. at 150-51.

Plaintiffs are correct that for the first three years, HAIL licenses may only be

issued to for-hire vehicles owners or drivers who have been licensed by TLC for at least one year

and are in good standing with TLC. Such a restriction does not rise to the level of "exclusivity"

under Section 17, however, because the Legislature has afforded multiple opportunities for the

22

class to be opened. The statutory restriction will not be in place after the first three years, and in

the first issuance does not apply to HAIL licenses used with accessible vehicles after the first

three months. Moreover, a HAIL license is expressly transferrable to any owner or driver of a

for-hire vehicle licensed by TLC. The Legislature did not impose the same grandfathering

restrictions in the case of transfers, and nothing prevents the plaintiffs or any other qualified

person from applying for a for-hire vehicle owner or driver's license and then seeking a HAIL

license through the transfer process. Therefore, the law is not "exclusive" for purpose of Section

17 because expanding the privileges of a HAIL license to persons other than those originally

grandfathered would not disturb or invade the benefits to existing licensees. Rather, the law

specifically contemplates such an expansion of the class of potential licensees.

Similarly, with regard to HAIL base permits, it is only in the "initial issuance" in

which the permits are limited to existing for-hire vehicle base stations that have been in

operation for at least three years and are in good standing with TLC. See Chapter 9 of the Laws

of 2012, Section 3 (amending Section 4 of Chapter 602 of the Laws of 2011), which authorizes

the issuance of HAIL base permits. In fact, TLC's interpretation of this provision highlights the

fact that the "exclusivity" prong is not met as the amendments to the Rules regarding Street Hail

Livery Base Licenses specifically state that "fa]fter the Street Hail Livery Base Initial and

Second Issuance Period, any person or Business Entity can apply for a Street Hail Livery Base

License."l0 There is simply no demonstrable intent to permanently limit Street Hail Livery Base

1 book ch82

23

Licenses to a closed group. Moreover, there are important safety and operational reasons for

limiting the initial issuance of base permits to existing licensees who have been vetted and are in

good standing with TLC, e.g,, all street hail liveries (including accessible street hail liveries)

must be associated with a licensed street hail livery base and it would be impracticable and

unfeasible for TLC to process new base applications at the same time that it begins issuing

HAIL. This could potentially delay the process and impede the goal of getting accessible street

hail livery cars out for public use as soon as possible. Under these circumstances, by no stretch

of the imagination could the Street Hail Livery Law be found to confer a privilege to the

exclusion of all others,ll

In the rare cases where courts have found a violation of Article III, Section 17 in

recent decades, it was determined that the statute served no important public purpose. In 19th

Street Associates v. State of New York, 568 N.Y.5.2d77I,773 0't Dep't 1991), the court held

that a statute granting non-purchasing tenants in a single apartment building the exclusive right

to remain in their apartments without eviction violated Article III, Section 17. Affirming on

other grounds, the Court of Appeals found that the statute did not alleviate the housing crisis or

afford any meaningful protection to the public or to New York City tenants atlarge, or serve any

important government purpose, 79 N.Y.2d 434, 444 (1992). See also American Consumer

Industries. Inc. v. City of New York, 281 N.Y.S.2d 467,474 (lst Dep't 1967) (striking down a

law that forced tenants of the Hunts Point Market to deal exclusively with one supplier of ice

because "[t]he franchise for an ice monopoly cannot be held designed to promote public safety or

ll The allegation in the complaint supporting the Exclusive Privileges Claim that Base Grouplicensees are entitled to $54,000,000 in grants of up to $15,000 each is incorrect. In fact, theStreet Hail Livery Law provides that TLC must provide grants to those who receive FIAILlicenses that are restricted to accessible vehicles to offset the cost of those vehicles, and not toBase Group licensees. Street Hail Livery Law $ 9(a) and (b) "Promoting accessibility,"

24

public health" and noting lhat "it may be fairly stated if the granting of the exclusive privilege

was a proper exercise of the police power of the City of New York it is not subject to successful

attack,"). In contrast, the provision in the Street Hail Livery Law that authorizes the sale of

HAIL licenses to those currently licensed to own or operate for-hire vehicles or base stations will

allow TLC to expedite the issuance of licenses to a large class of individuals that have already

been vetted by the agency, and therefore is a key component of an integrated legislative scheme

in furtherance of the stated purpose of providing immediate access to "safe and reliable" mass

transportation. For this reason as well, application of the Exclusive Privileges Clause is

inappropriate here.

POINT IV

PLAINTIFFS' TAKINGS CLAIM ISSPECULATIVE AND, IN ANY EVENT, FAILSAS A MATTER OF LAW

Plaintiffs contend in their third cause of action that implementation of the Street

Hail Livery Law will "appropriate plaintiffs' private property without just compensation" in

violation of Sections 6 and 7 of the New York State Constitution. Complaint nI24,

Specifically, plaintiffs contend that the Street Hail Livery Law "threatens to devalue taxicab

medallions and upset investment-backed expectations" insofar as it authorizes licensed HAIL

vehicles to pick up passengers in certain areas and authorizes the public auction of 2,000

additional medallions. This facial challenge fails as a matter of law for two reasons. First, as

noted in Point I in connection with standing, plaintiffs' claims in this regard are speculative and

far-fetched. Second, even if the implementation of the Street Hail Livery Law brings about a

diminution in medallion values generally, such a diminution would be insufficient to support a

facial takings claim, which requires a showing that the law operates to render unprofitable the

medallion taxicab industry as a whole.

25

The taking of private property by the government for public use may occur when

the government physically occupies or acquires ownership of private property or when the

government enacts or enforces laws, regulations or rules that restrict some beneficial use or the

full exploitation of private property. See, e.s., Brown v. Legal Foundation of Washington, 538

U.S. 216 (2003); Palazzolo v. Rhode Island, 533 U.S. 606 (2001); Seawall Associates v..New

York, 74 N.Y.2d 92 (lg8Ð.12 Moreover, a taking "may more readily be found when the

interference with property can be characterized as a physical invasion by government, than when

[as here] interference arises from some public program adjusting the benefits and burdens of

economic life to promote the common good." Penn Central v. New York City, 438 U.S, 104,

124 (1978) (internal citation omitted). Indeed, "[o]ne who chooses to engage in a publicly

regulated business, such as the taxicab business, by so doing surrenders his right to unfettered

discretion as to how to conduct same." Alexandre v. TLC,2007 U.S. Dist, LEXIS 73642

(S.D.N.Y. 2007), quoting Schen v. City of New York, 55 Misc. 2d 176,177 (Sup. Ct. N.Y. Co.

1e67),

Courts do not employ a set formula for determining, in individual as-applied

challenges, whether economic injuries caused by public action must be compensated by

government entities. Factors that are relevant to that analysis include "the regulation's economic

effect on the [property] owner, the extent to which the regulation interferes with reasonable

investment-backed expectations, and the character of the government action." Palazzolo, 533

U.S. at 617. See also, Meriden Trust & Safe Deposit Co. v. FDIC , 62 F.3d 449, 454 (2d Cir.

1995); , 767 N.Y.S.2d

451,2003 N.Y. App. Div. LEXIS 12447,* 19-20 (2d,Dep't 2003). However, these "ad hoc,

'' We know of no difference between the standards applicable to takings claims under the federalconstitution and state constitutions. See, e.g., Seawall Associates, supra.

26

factual inqr"riries must be conducted with respect to specilìc property, and the particular estimates

of economic irnpact and ultimate valuation relevant in the uniqne circumstances." Keyqlpnq

Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 494-95 (1987), citing Kaiser Aetna v.

United States , 444 U.S. 164, 175 (1979) (internal quotation marks ornitted).

Because plaintiffs plesent a lacial challenge to the statute, plaintilfs present no

concrete controversy as to any particular rnedallion holder. Indeed, any as-applied takings claim

would not yet be ripe, there having been no qua:rtihable eoonomic irrjury suffered by any

nredallionholdertodate. S_ee.e.q..DeSt.Aubinv.Flacke,68N.Y.2d66,75(1986),'l'hus,the

investment-backed expectations of individuals and entities who purchased medallions are

irrelevant, 'l'he only issue properly before this Court is whethel the "mere enactment" of the

Street Hail Livery Law constitutes a legulatory takirrg, In that rcgard, plaintiffs bear the "heavy

burden of overcoming the presumption of constitutionality that attaches to the fchallenged

statute] and proving every element of ftheir regulatory taking] claim beyond a reasonable doubt."

De St. Aubin.68 N.Y.2d aÍ76.

To prevail on a fàcial challenge under the takings clarne, plaintifl's must establish

1) that the stattrte does not substantially aclvance a legitimate governmental interest, or 2) that it

denies the plaintiffs economically viable use o1' their property. Keystone, supra; Agins v.

.,1'i.þ"e1.ç,.n, 447 U.5.255,260 (1980). ln other words, to prevail on their facial takings claim,

plaintiflì tnust establish either that the Street Hail Livery Law d<les not serve a legitimate

govemmental interest ol that its implenrentation will so devalue taxicab medallions as to render

the taxicab industry unprof:itable as a whole. See. e.s., Keystone, supra $acial takings claim

rejected notwithstanding the adoption of the challenged regulation allegedly affecting plaintitÏs'

profÏtability where. as here, the property owners could continue to engage prcllìtably in the

27

business f-or which they had invested their capital). Speculation as to future losl profits does not

form the basis of a successful takings claim. Sanitation...._&..Recyc.l.ing Industry...l.nc. v. City..of

New York,928F. Supp. 407 (1996), afPd,l97 F.3d987 (1996).

As clescribed in both the legislative frndings and the accompanying Yassky

Affidavit, the Street Hail Livery Law serves the dual purpose o1'providing much-needed hail

service in Northert Manhattan and the Iloloughs and providing additional wheelchair-accessible

taxicab and livery service, Plaintifls do not suggest that this purpose is not legitimate. Plaintilfs

instead rely on the alleged diminution on taxicab riredallion value to support their takings claim,

Burt this olaim is both speculative and specioLls" as noted above. Once the HAIL program is

inrplemented, IIAIL licensees will be authorized to accept street hails only in northern

Manhattan and the Boroughs (other th:an at the airports). Street Hail Livery Law $ a(c). This

will have a minimal impact on the demand for rnedallion taxicabs. as 95 percent of rredallion

taxioab service is provided in the Manhattan Central Business District - that is, south of East

96th Street ancl West 110th Street ("Manhattan CIID") and at the airporls. Yassky Aff. 1l 4, As

HAIL vehicles will be operating in areas that are rarely serviced by medallion taxicabs, the

service provided by flAll vehicles will not have any discernable impact on the plofitability of

the medallion taxicab industry, Moreover, there is no sLrpport fbr plaintiflìs' conjeoture that

llAlL licensees will operate illegally in the Manhattan CBD and at the airports. See, Complairrt

fl 99. In any event, there is no basis to conclude that there will be more illegal taxicab aotivity in

the Manhattan CIID and at the airports than there has been in the past,

Nor can plaintìfls establish that the expansion ofÌ the existing taxicab fleet by

2,000 additional taxicabs (all wheelchair accessible) will devalue their rnedallions. 'l'here

c<lntinues to be a demand for medallion taxicab service in the Manhattan CBD and at the airports

28

that tàr exceeds the supply. Yassky AfIÌ T 32. Moreover, the 2,000 additional medallions will be

sold at public auction over a three-year period so as not to flood the marketplace and cause

medallion values to diminish, Id. u 35.

In any event, even if plaintiffs' speculation as to diminution in value proves true,

plaintiffs cannot show -- and indeed do not even contend -- that the Street Hail Livery Law will

put meclallion holders out of the taxicab business or render existing taxicab medallions worthless,

so as tcl support a 1äcial takings claim. Indeed, the evidence shows otherwise. In 2011, the

average private sale price for a corporate unrestricted taxicab medallion ranged between

$950,000 and $l million per medallion. Yassky Aff. T 38. Notwithstanding the December 2011

enactment of the Street Hail Livery Law authorizing the HAIL license program and 1,500

additional taxicab medallions,l3 there were22 corporate medallion transfers between January and

April2012 with an average sale price of $l million for each medallion. Id. In fact, on April 19,

2012, the price of a corporate medallion hit an all-time high of $1,050,000. Id.

The sales price for individually owned medallions has also increased since the

enactment of the Street Hail Livery Law, In 2011, there werc226 transfers of individually

owned medallions with a sales price that ranged between $634,000 and $699,000 per medallion,

Yassky Aff. I 39. Between January and April 2012, there were 49 transfers of individually

owned medallions with an average sale price of $702,918.36 for each medallion. Id.

That the sales price of both corporate and individually owned taxicab medallions

has continued to rise in the three months since the HAIL program was first authorized by state

t3 'l'he initial version of the Street Hail l.,ivery Law, which fir'st established the .l-lAIL licenseprogram, was passed by both houses of the State Legislature in September2011 and signed intolaw by Governor Cuomo in December 2011, The amendments adopted in February 2012, whichwere largely addressed to disability access, set lbrth requirements for wheelchair accessibleHAIL vehicles ancl increased the number of additiona.ltaxicab medallions to 2,000, Street l:lailLivery Law $ 8.

29

law lays plaintiffs' facial takings claim to rest, as it shows that the taxicab industry continues to

be, not merely economically viable, but extremely lucrative. Plaintiffs' unrealistic fear that their

taxicab businesses will not be quite as profitable once the HAIL license program is implemented

- even if true - does not support a facial takings claim. Indeed, it is ludicrous to suggest either

that the authorization of HAIL licenses operating in a wholly different marketplace, or the

increase in the number of medallion taxicabs to satisfy a palpable demand for additional taxicabs

in the Manhattan CBD and at the airports, will so devalue existing medallions as to render the

medallion taxicab industry unprofitable. Accordingly, plaintiffs' facial takings claim must be

rejected as a matter of law.

POINT V

THE ENACTMENT OF THE STREET HAILLIVERY LAW DOES NOT VIOLATE THESTATE ENVIRONMENTAL QUALITYREVIEW ACT; TLC \ilAS NOT REQUIREDTO CONDUCT ENVIRONMENTAL REVIEWPRIOR TO ISSUING THE HAIL LICENSESOR RASE PERMITS

The State Environmental Quality Review Act ("SEQRA"), ECL S 8-0101 et seq.,

and its City counterpart, the City Environmental Quality Review procedures ("CEQR"), RCNY

TiLle 62, Chapter 5, require State and local agencies to assess the potential significant adverse

environmental impacts of certain discretionary actions before undertaking, funding, or approving

such actions. 6 NYCRR $ 617,9. However, the Legislature may choose to exempt certain

actions from SEQRA review, as well as other reviews required by state statute. Here, the

Legislature plainly exempted the HAIL vehicle license and base permits from environmental

review by the express terms of the statute.

Section 5(h) of the Street Hail Livery Law, which authorizes TLC to issue the

new HAIL vehicle licenses, provides,

30

The city of New York, acting through the TLC, ishereby authorized and empowered to take suchactions as are necessary and desirable to implementthe provisions of this section and section nine ofthis act, subject only to the procedures andlimitations set forth in this act, and shall not berequired to engaee in any review provided for b)'anv orovision of law or make or obtain anydetermination not expresslv required b)¡ this act.

Chapter 9 of the Laws of 2012, Section 5(h) (emphasis added). The same provision is included

in Section 3 of the Street Hail Livery Law, which authorizes the issuance of HAIL base permits,

Chapter 9 of the Laws of 2012, Section 3 (amending Section 4 of Chapter 602 of the Laws of

2011). That is, this provision exempting TLC from "engag[ing] in any review provided for by

any provision of law or makfing] or obtainfing] any determination not expressly required by" the

legislation applies both to the section of the statute authorizing the issuance of up to 450 HAIL

base station permits and the section authorizing the issuance of up to 18,000 HAIL licenses.

Thus, under the plain meaning of the statute, the legislature has exempted these programs from

SEQRA review.

The Court of Appeals has "consistently emphasized that 'where the statutory

language is clear and unambiguous, the court should construe it so as to give effect to the plain

meaning of the words used."' Raritan Dev. Corp. v. Silva, 9l N,Y,2d 98, 106-07 (1997)

(quoting Patrolmen's Benevolent Assn. v. Cit)¡ of New York,4l N.Y.2d205,208 (1976)); see

also In re World Trade Ctr, Bombing Litig,, 17 N.Y.3d 428, 442-43 (2011); Amorosi v. S.

Colonie Indep. Cent. Sch. Dist., 9 N.Y.3d 367, 372 (2007); Matter of Auerbach v. Board of

Educ. of Citv School Dist. of New York, 86 N.Y.2d I98, 204, (1995); Doctors Council v. New

York City Emplo)¡ees'Retirement S)¡s., 71 N.Y.2d 669,674-75 (1988). Here, the Legislature

included a specific exemption from engaging in "any review provided for by any provision of

law" that, by its plain language, includes SEQRA within its scope. The statute provides that

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TLC need not partake in any review before issuing the new HAIL licenses or base permits, and

State Environmental Quality Review is just such a "review." Plaintiffs themselves concede that

the Legislature declared that no environmental review was required for the HAIL licenses. See

Complaint fl 57 ("The legislature never conducted an environmental assessment or review ...

Indeed, it declared that none was requir.d."); see also id. at fl 81 (noting that the statute

"dispenses with" environmental review requirements).

Indeed, besides SEQRA, there do not appear to be any other reviews required by

law that would apply to issuance of the new medallions. The sections of the New York City

Charter that empower TLC mandate no TlC-specific reviews. See New York City Charter $$

2300-04. Moreover, other commonly employed local reviews, such as the Uniform Land Use

Review Procedure (ULURP), fair share analysis, contract analysis by the City's Procurement

Policy Board, and Educational Impact Statements, are also not required to issue new taxi

medallions. Thus, by including the provision in the Street Hail Livery Law that declared

issuance of the new HAIL vehicle licenses and base permits to be exempt from "any review," the

Legislature could not have intended anything other than an exemption from SEQRA when it

used such language in the statute.

It is clearly within the Legislature's power to exempt specific actions from

environmental review, and courts have found that generalized statutory language authorizing

specihc actions along with the phrase "notwithstanding any other provision of law to the

contraty" provide a legislative exemption from review under SEQRA. In New York State

Lawncare Ass'n Inc. v. County of Albany, 292 A.D.2d 719 (3'd Dep't 2002), the court

considered a provision added to the Environmental Conservation Law in 2000, relating to

commercial and residential lawn application of pesticides. The enabling statute included a

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provision allowing counties to pass a local law, after a public hearing, to adopt the pesticide

notification provisions set forth in the statute in their entirety, "[n]otwithstanding any other

provision of law to the contrary." See ECL $ 33-1004. The Appellate Division, Third

Department found that this provision embodied "the clear intent of the Legislature ... to permit

counties to adopt a local law funder the statute] without complying with SEQRA." Lawncare

Ass'n Inc., 292 A.D.2d at 72r. Similarly, in Nature's Trees. Inc.. v. count)¡ of Nassau, 293

A.D.2d 544 (2d Dep't 2002), the Second Department considered the same ECL provision, and

also found that "[t]he State Legislature clearly and unambiguously set forth the requirements" for

counties' adoption of the pesticide law, and that because the statute "only requires a public

hearing and adoption of the law in its entirety, notwithstanding any other law to the contrary,"

the county did not have to comply with the requirements of SEQRA prior to adopting its local

law. 293 A.D.2d at 546. Thus, legislative enactments that use "generalized language to

authorize activities with the phrase 'notwithstanding any other provision of law to the contrary' .

. . [have] been construed as providing a legislative exemption from SEQRA review," See

Michael B. Gerrard et al., l-2 Environmental Impact Review in New York g 2.01(5)(d)(viii)

(2011) (emphasis added) (collecting cases).

Here, the exemption language included in the Street Hail Livery Law is even

more explicit than generalized language that courts have found to exempt other actions from

compliance with SEQRA, Whereas ECL $ 33-1004 simply provides that localities could act

"notwithstanding any other provision of law to the contrary," the Street Hail Livery Law

specihcally authorizes TLC to issue HAIL licenses and base permits without being "required to

engage in an), review provided for by any provision of law." Chapter 9 of the Laws of 2012,

Sections 3 and 5(h) (emphasis added). If, as the Appellate Division found in Lawncare Ass'n

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and Nature's Trees, the more generalized statutory phrasing exempts an action from the

requirements of SEQRA, then the construction used by the Legislature here, with its explicit

exemption from "any review," clearly also exempts this action from SEQRA review by its plain

meaning.

CONCLUSION

For the reasons set forth above, the City respectfully requests that this Court grant

the City's motion for summary judgment declaring that the Street Hail Livery Law is valid and

constitutional in all respects.

Dated: New York, New York}lIay 7,2072

MICHAEL A. CARDOZOCorporation Counsel of the City of New YorkAttorney for Defendants100 Church StreetNew York, New York 10007(212) 788-0782

ByAve Maria BrennanAssistant Corporation Counsel

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