Greater N.Y. Taxi Ass'n v. N.Y.C. Taxi & Limousine Comm'n

• Decision Date: 25 June 2015
• Docket Number: No. 120,120
• Citation: 25 N.Y.3d 600,36 N.E.3d 632,15 N.Y.S.3d 725,2015 N.Y. Slip Op. 05514
• Parties: GREATER NEW YORK TAXI ASSOCIATION et al., Appellants, v. NEW YORK CITY TAXI AND LIMOUSINE COMMISSION, a Charter–Mandated Agency, et al., Respondents, and Nissan Taxi Marketing, N.A., LLC, et al., Intervenors–Respondents.
• Court: New York Court of Appeals Court of Appeals

25 N.Y.3d 600

36 N.E.3d 632

15 N.Y.S.3d 725

2015 N.Y. Slip Op. 05514

GREATER NEW YORK TAXI ASSOCIATION et al., Appellants

v.NEW YORK CITY TAXI AND LIMOUSINE COMMISSION, a Charter–Mandated Agency, et al., Respondents, and Nissan Taxi Marketing, N.A., LLC, et al., Intervenors–Respondents.

No. 120

Court of Appeals of New York.

June 25, 2015.

Fox Rothschild LLP, New York City (Mitchell Berns, Barry J. Muller and Dana Katz of counsel), for appellants.

Zachary W. Carter, Corporation Counsel, New York City (Elizabeth I. Freedman, Richard Dearing, Francis F. Caputo and Nicholas R. Ciappetta of counsel), for respondents.

Jenner & Block, LLP, Chicago, Illinois (Peter J. Brennan of counsel), and Jenner & Block, LLP, New York City (Justin O. Spiegel of counsel), for intervenors-respondents.

Kostelanetz & Fink, LLP, New York City (Claude M. Millman and Caroline Rule of counsel), for Design Trust for Public Space and others, amici curiae.

OPINION OF THE COURT

STEIN, J.

The New York City Taxi and Limousine Commission (TLC) engaged in a lengthy process to create the “Taxi of Tomorrow,” culminating in rules that established a particular make and model of vehicle as the City's official taxicab. We now hold that the TLC did not exceed its authority or violate the separation of powers doctrine by enacting those rules.

I.

Anyone reminiscing about New York City public transportation from the 1960s through at least the 1980s will probably evoke an image of Checker cabs driving residents and visitors through the busy City streets. Checker Motor Corporation made the iconic American taxicab that was valued by owners for its durability, and was appreciated by passengers for its large rear seat and trunk space. That era came to an end when the last Checker cab was produced in 1982, and they were all taken out of service as New York City taxis by the late 1990s. Just as the Checker cab was the iconic taxi of yesteryear, the TLC sought to discover or create an iconic Taxi of Tomorrow (ToT). That process has led to the case that is now before us.

The TLC, which regulates taxis and other cars for hire in New York City, was created in 1971 (see N.Y. City Charter § 2300). In order to qualify as a taxi in New York City, a vehicle must carry passengers for compensation and be equipped with a taxi meter; it must also be painted yellow and display a current TLC medallion, which indicate that the vehicle is duly licensed to pick up passengers via street hails anywhere in the City (see Administrative Code of City of N.Y. §§ 19–502[l]; 19–504[a][1]; 19–514[a]; 34 R.C.N.Y. 4–01[b]; L. 2012, ch. 9, § 11; see also Greater N.Y. Taxi Assn. v. State of New York, 21 N.Y.3d 289, 298, 970 N.Y.S.2d 907, 993 N.E.2d 393 [2013] ; Tax Law § 1280 [d] ).¹ A medallion is required to operate a yellow cab, with the number of available medallions

set by the state legislature and the New York City Council (see General Municipal Law § 181 ; NY City Charter § 2303[b][4]; see also L. 2011, ch. 602, § 2). Most medallions are unrestricted, although some are limited to wheelchair accessible vehicles or alternative fuel vehicles; an unrestricted medallion may be used for those types of vehicles as well. With Checker—which is no longer in business—standing out as a notable exception, car manufacturers typically did not and do not design and produce vehicles with the intention that they be used as taxis. Instead, medallion owners would buy a passenger car meeting certain specifications and then “hack-up” that vehicle by adding a partition, roof light and other required equipment that is strictly regulated by the TLC (see 35 R.C.N.Y. 67–05.1A). The use of passenger vehicles is less than ideal because taxis are subjected to long hours and rough driving conditions, as compared with average passenger vehicles. Additionally, the use of hacked-up passenger vehicles may pose safety risks. For example, crash testing is completed on a vehicle model before it is hacked up, and the partition that is added after crash testing may interfere with the inflation of side-curtain airbags during an actual collision.

Historically, the TLC set standards for all yellow cabs based on specifications (or specs) of a make and model of vehicle that was popular for use as a taxi. In the early 2000s, after passengers complained about insufficient legroom in vehicle models approved as taxis, Ford began making the stretch Crown Victoria, and the TLC—apparently after consulting with Ford—increased the required minimum legroom specs for all taxis to reflect the legroom in that model. The TLC acknowledged that, for years, the Crown Victoria was “the only commercially available vehicle model that has complied” with the taxi vehicle specs (35 R.C.N.Y. 67–05, Note 1 [Statement of Basis and Purpose in City Record May 5, 2011] ). That model became the most popular taxi vehicle, at one point comprising approximately 90% of the City's fleet.

The TLC commenced the ToT program in 2007, partly spurred by Ford's announcement that it planned to discontinue the Crown Victoria. The process began with committees and public hearings, engaging all taxi industry stakeholders (drivers, medallion owners and passengers), with the idea of designing a vehicle that would be manufactured primarily for use as a taxi, rather than retrofitting passenger vehicles for that purpose. As the process continued, the TLC initiated a request

for proposals in late 2009, seeking a manufacturer of original equipment to provide an innovative vehicle developed as a taxi, based on guidelines that included certain important qualities. The successful bidder would be awarded a 10–year exclusive contract for sales of this vehicle as the City's official taxi. The TLC narrowed the seven bidders down to three models, sought public and industry opinion and, finally, in mid–2011, selected the Nissan NV200 as the ToT. Rather than incorporating the specs from that model into the rules, as the TLC had historically done, the ToT rules specify the required make and model. Thus, with limited exceptions, the rules require each taxi owner to purchase an NV200 to replace an existing vehicle when it is retired (see 35 R.C.N.Y. 51–03, 67–05.1B).

The Department of Citywide Administrative Services then entered into a Vehicle Supply Agreement (VSA) with Nissan. The VSA included the 10–year exclusive supply contract, provided the specs for the vehicle and set a maximum manufacturer's suggested retail price, but no minimum. Nissan was also required under the VSA to furnish a wheelchair accessible version, that would be up-fitted before delivery to any purchaser making that request, and to create a hybrid version in the future.² If a vehicle superior to the NV200 becomes available after five years, the TLC may provide notice to Nissan and terminate the VSA, unless Nissan modifies the NV200 or designs a new vehicle to match or exceed the specs of the superior vehicle. The VSA is not directly challenged here.³

After a challenge to the original ToT rules (see Committee for Taxi Safety, Inc. v. City of New York, 40 Misc.3d 930, 971 N.Y.S.2d 793 [Sup.Ct., N.Y. County 2013] ), the TLC enacted revised ToT rules that

were essentially the same, but contained an exemption for hybrid vehicles. Additionally, the revised rules provided new specs for hybrids, in order to bring the hybrid options more in line with the NV200. The hybrid rules are not challenged here; rather, the current challenge is limited to the TLC's selection of one vehicle model as the exclusive gas-powered taxi eligible for use by taxi medallion owners.

Petitioners, an association of medallion owners and an individual owner of a fleet, commenced this combined CPLR article 78 proceeding and declaratory judgment action, seeking to invalidate the ToT rules and obtain a related declaration. The petition alleged, among other things, that the TLC lacked authority to enact the ToT rules and violated the separation of powers doctrine in doing so. Supreme Court granted a motion to allow Nissan Taxi Marketing, N.A., LLC and Nissan North America, Inc. (collectively, Nissan) to intervene. On the merits, the court held that the TLC exceeded its authority under the City Charter and violated the separation of powers doctrine by intruding in the City Council's domain, and declared that the ToT rules were invalid (see 42 Misc.3d 324, 972 N.Y.S.2d 513 [Sup.Ct., N.Y. County 2013] ).

The Appellate Division, with one Justice dissenting, reversed Supreme Court's order and judgment and declared that the rules are valid (121 A.D.3d 21, 988 N.Y.S.2d 5 [1st Dept.2014] ). The same panel granted petitioners leave to appeal, and certified a question as to whether its order was properly made (2014 N.Y. Slip Op. 87340[U] [1st Dept.2014] ).⁴

II.

Petitioners allege that the regulations challenged here are beyond the TLC's authority because they mandate a single gas-powered model as the City's official taxi vehicle, rather than setting specifications that could potentially be met by other makes and models (see 35 R.C.N.Y. 67–05.1B). Petitioners acknowledge that the TLC has the authority to enact rules with stringent specs that can only be met by one model at the time the rules are enacted. In addition, petitioners do not dispute that the TLC has the authority to approve the use of a single vehicle model as part of a pilot project for limited periods

of time (see N.Y. City Charter § 2303 [b] [9]; see also Matter of Black Car Assistance Corp. v. City of New York, 110 A.D.3d 618, 618–619, 973 N.Y.S.2d 627 [1st Dept.2013] [holding that the 12–month pilot E–Hail Program complies with N.Y. City Charter § 2303(b)(9) ] ). It is also undisputed that the City Council, itself, could enact a law limiting taxis to one model, or could specifically grant the TLC the authority to do so.⁵ Thus, the limited issue presented here is whether the TLC had the authority to require the use of a particular vehicle make and model as a taxi, as opposed to requiring taxi vehicles to meet...