G & C Transp. Inc. v. Mcgrane

• Decision Date: 24 June 2011
• Citation: 928 N.Y.S.2d 208,2011 N.Y. Slip Op. 21221,32 Misc.3d 872
• Court: New York Supreme Court
• Parties: G & C TRANSPORTATION, INC. and Newburgh Kabs, Inc., Petitioners-, Plaintiffs,v.Jean–Ann McGRANE, City Manager; Nicholas Valentine, Mayor; Geoffrey Chanin, Corporation Counsel; Regina M. Angelo; Mary Ann Leo–Dickinson, Marge Bell, Christine M. Bello, Council Persons; City Counsel of the City of Newburgh; City of Newburgh, Respondents, Defendants.

32 Misc.3d 872

928 N.Y.S.2d 208

2011 N.Y. Slip Op. 21221

G & C TRANSPORTATION, INC. and Newburgh Kabs, Inc., Petitioners-, Plaintiffs,

v.Jean–Ann McGRANE, City Manager; Nicholas Valentine, Mayor; Geoffrey Chanin, Corporation Counsel; Regina M. Angelo; Mary Ann Leo–Dickinson, Marge Bell, Christine M. Bello, Council Persons; City Counsel of the City of Newburgh; City of Newburgh, Respondents, Defendants.

Supreme Court, Orange County, New York.

June 24, 2011.

Bruce M. Stern, Esq., Stern Law Offices, Newburgh, Attorney for Petitioner–Plaintiff.Michael E. Catania, Esq., Tarshis, Catania, Liberth, Mahon & Milligram, PLLC, Newburgh, Attorneys for Respondents–Defendants.LAWRENCE H. ECKER, J.

Petitioners-plaintiffs G & C Transportation, Inc. and Newburgh Kabs, Inc. (hereinafter “petitioners”) are taxicab operators in the City of Newburgh who bring this hybrid proceeding pursuant to CPLR Article 78 to review a determination of the City Council of the City of Newburgh (hereinafter “respondents”) adopting City of Newburgh Ordinance No. 3–2008. Petitioners also seek a judgment pursuant to CPLR § 3001 declaring Ordinance No. 3–2008 of Chapter 272 of the City of Newburgh Code of Ordinances is unconstitutional on various grounds.

Background

On February 25, 2008, the City Council of the City of Newburgh adopted Ordinance No. 3–2008 (hereinafter “the Ordinance”) which amended Chapter 272 of the City of Newburgh Code of Ordinances in its entirety.¹ The Ordinance sets forth a scheme for municipal regulation of taxicab services and taxi drivers operating within the City of Newburgh.

Petitioners, which are providers of taxicab services in the City, commenced this action by notice of petition and amended petition returnable on July 16, 2008 seeking a preliminary injunction enjoining enforcement of the Ordinance, a judgment pursuant to CPLR Article 78 annulling the Ordinance, and a declaratory judgment that the Ordinance was unconstitutional on various grounds. They argue, “the Ordinance will end the legitimate taxicab business in the City of Newburgh, and create chaos as residents needing transportation for basic staples of life are left stranded.” Amended Pet. at pages 1–2. While conceding respondents have the right to regulate the registration and licensing of taxicabs within the City of Newburgh, petitioners allege the effect of the Ordinance will be to impose economically impracticable costs on taxicab operations which will cause the cessation of taxicab operation, force the taxicab operators underground, and force fare increases that will prevent the residents who rely on taxi cabs for the basic necessities of food, clothing, and medical treatment from having access to affordable transportation. They also allege the Ordinance imposes an unconstitutional taking of property by destroying trademarks and mandating the provision of services at below-cost rates. Amended Pet. at page 2.

On January 5, 2009, this court (Alessandro, J.) issued an Order sua sponte dismissing the declaratory judgment causes of action. It determined Chapter 272, as amended, and its enforcement, did not violate any of the petitioners' constitutional rights and was a reasonable exercise of legislative authority. On April 20, 2009, judgment was entered.

On April 13, 2010, the Appellate Division, Second Department reversed, on the law, and reinstated the declaratory judgment causes of action. 72 A.D.3d 819, 898 N.Y.S.2d 623. It held Supreme Court gave no notice to the parties that it was contemplating the summary dismissal of the causes of action in issue. Furthermore, the respondents had made no application for the relief. As a result, the declaratory actions were reinstated and are now before the court.²

Thereafter, on July 10, 2010, the respondents enacted Ordinance No. 11–2010 which amended Ordinance No 3–2008 in several respects. In a preamble added as § 272–1, the respondents clarified that the regulatory scheme was limited in scope to taxi service wholly within City boundaries.³

The preamble states:

“The City Council of the City of Newburgh finds that suitable public transportation is lacking within the City of Newburgh and that transportation by taxicab within the city limits is an important and viable form of transportation for its residents and visitors. The City Council recognizes that Section 151 of the New York State Transportation Law permits the municipal regulation of taxi service which is conducted wholly within municipal boundaries. Therefore, the City Council further finds that it is necessary to regulate and license a taxi service conducted wholly within the boundaries of the City of Newburgh for the purpose of maintaining order, enforcing laws, protecting property, and caring for the safety, health, comfort and general welfare of the inhabitants and visitors to the City of Newburgh. This ordinance does not seek to regulate in anyway, taxi service which is not conducted wholly within the City of Newburgh's municipal boundaries.”

Transportation Law, § 151, as referenced in the preamble, specifically exempt taxis and liveries with the seating capacity of fewer than 15 passengers from state regulation when the service is conducted wholly within a municipality authorized to adopt an ordinance relating to registration and licensing under General Municipal Law § 181. Taxicabs are also exempt from federal regulation because taxicabs are local in nature. 49 USC § 10526(a)(2). The language of Transportation Law § 151 specifically authorizes a municipality to regulate certain “transportation for compensation” including taxi or livery services, provided such service is conducted wholly within its boundaries. 1996 Ops. Atty. Gen. No. I 96–3; People v. Kadar, 14 Misc.3d 857, 859–860, 831 N.Y.S.2d 826 (Ithaca City Ct., 2006).

The enactment of Ordinance 11–2010 also repealed § 272–11(D), as contained in Ordinance No. 3–2008. § 272–11(D) effectively permitted the police to stop and visually inspect any taxicab pursuant to the City of Newburgh Police Taxi Inspection Safety Program. The repealed section had provided that the acceptance by an owner or operator of a taxi license issued by the City constituted the licensee's continuing consent for the police to stop and inspect the taxicab. As set forth, infra, the repeal of this challenged section to the Ordinance has rendered moot a number of petitioners' reinstated causes of action.

Petitioners move for summary judgment on their eleven (11) remaining and reinstated claims to strike down Ordinance No. 3–2008 as unconstitutional on various grounds. Respondents cross-move for summary judgment dismissing the complaint in its entirety.

That a legislative enactment will be presumed constitutional is an elementary but significant principle of law. The strength of this presumption, sometimes underestimated, has been repeatedly underscored by the courts of this State. Marcus Associates, Inc. v. Huntington, 45 N.Y.2d 501, 505, 410 N.Y.S.2d 546, 382 N.E.2d 1323 (1978); Wiggins v. Town of Somers, 4 N.Y.2d 215, 218, 173 N.Y.S.2d 579, 149 N.E.2d 869 (1958). As the Court of Appeals has stated, “The exceedingly strong presumption of constitutionality applies not only to enactments of the Legislature but to ordinances of municipalities as well. While this presumption is rebuttable, unconstitutionality must be demonstrated beyond a reasonable doubt and only as a last resort should courts strike down legislation on the ground of unconstitutionality.” Marcus Associates, Inc. v. Town of Huntington, supra at 505, 410 N.Y.S.2d 546, 382 N.E.2d 1323 ,quoting Lighthouse Shores, Inc. v. Town of Islip, 41 N.Y.2d 7, 390 N.Y.S.2d 827, 359 N.E.2d 337 (1976). In Lighthouse Shores, the Court stated, “The ordinance may not be arbitrary. It must be reasonably related to some manifest evil which, however, need only be reasonably apprehended. It is also presumed that the legislative body has investigated and found the existence of a situation showing or indicating the need for or desirability of the ordinance, and, if any state of facts known or to be assumed, justifies the disputed measure, this court's power of inquiry ends. Thus, as to reasonableness, petitioners in order to succeed have the burden of showing no reasonable basis at all' existed for the challenged portions of the ordinance.” Id. at 11–12, 390 N.Y.S.2d 827, 359 N.E.2d 337; see also, Metropolitan Taxicab Board of Trade v. N.Y.C. Taxi and Limousine Commission, 71 A.D.3d 508, 509, 897 N.Y.S.2d 65 (1st Dept., 2010) (a municipal administrative regulation should be upheld if the regulation has a rational basis and is not unreasonable, arbitrary, capricious, or contrary to the statute under which the regulation was promulgated).

There is also no question, as petitioners concede, that a City is authorized to regulate the taxicab industry within its borders. Municipalities may regulate and control traffic. There is a strong public interest in regulating taxicabs, which include preventing congestion on the streets, insuring traffic safety, providing its citizens with safe and reasonably priced service, preventing unsafe driving, and insuring that competent people are servicing its citizens. Vecchio v. Griffin, 143 A.D.2d 1003, 533 N.Y.S.2d 634 (2nd Dept., 1988); People v. Jabaar, 163 Misc.2d 1045,1048, 623 N.Y.S.2d 500 (Westbury Vill. Ct., 1994).

Against this backdrop and applying these well settled principles, the court will address petitioners' eleven (11) claims seriatim:

1. Fourth Cause of Action

Petitioners argue respondents have exceeded their legislative authority by enacting burdensome requirements on drivers to obtain taxicab licenses, mandating uniform colors for all vehicles, random police stops, and other requirements in excess of respondents' lawful powers to regulate.

Respondents counter that Gary Hunter, President of Petitioner, G & C Transportation, Inc. and petitioners' counsel, Bruce Stern, Esq., appeared at a City Council meeting on ...