Hertz Corp. v. City of New York

• Decision Date: 10 June 1992
• Docket Number: Docket No. 92-7369
• Parties: 1992-1 Trade Cases P 69,860 The HERTZ CORPORATION, Plaintiff-Appellant, v. The CITY OF NEW YORK, O. Peter Sherwood, in his official capacity as Corporation Counsel of the City of New York, and Mark Green, in his official capacity as Commissioner of Consumer Affairs of the City of New York, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

Page 54

967 F.2d 54

1992-1 Trade Cases P 69,860

The HERTZ CORPORATION, Plaintiff-Appellant, v. The CITY OF NEW YORK, O. Peter Sherwood, in his official

capacity as Corporation Counsel of the City of New York, and

Mark Green, in his official capacity as Commissioner of

Consumer Affairs of the City of New York, Defendants-Appellees.

Docket No. 92-7369.

United States Court of Appeals, Second Circuit.

June 10, 1992.

Present: FEINBERG, PRATT, McLAUGHLIN, Circuit Judge.

This cause came on to be heard on the transcript of record from the United States District Court for the Southern District of New York, and was argued by counsel.

On consideration of the briefs, appendix, record and the oral argument in this appeal, it is hereby ORDERED that the Clerk of the Court transmit to the Clerk of the New York Court of Appeals a Certificate in the form attached, together with a complete set of the briefs, appendix, and record filed by the parties with this Court.

----------UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Docket No. 92-7369

Filed June 10, 1992

----------

THE HERTZ CORPORATION, Plaintiff-Appellant,

--against--

THE CITY OF NEW YORK, O. PETER SHERWOOD, in his official capacity as Corporation Counsel of the City of New York, and MARK GREEN, in his official capacity as Commissioner of Consumer Affairs of the City of New York, Defendants-Appellees.

Certificate to the New York Court of Appeals (pursuant to McKinney's Revised 1991 New York Rules of Court § 500.17(b)--certification of unsettled question of law)

The Hertz Corporation ("Hertz") is a Delaware corporation authorized to do business in the State of New York, engaged in the business of renting vehicles to customers in New York and throughout the country. On January 2, 1992, Hertz announced that it would increase the daily rental rates it charges in the New York area by $56.00 for residents of the Bronx, by $34.00 for residents of Brooklyn, by $3.00 for residents of Manhattan and by $15.00 for residents of Queens. In response, the New York City Council enacted New York City Local Law 21 of 1992 (the "Hertz law") which amends Chapter Four of Title 20 of the Administrative Code of the City of New York to provide that "[n]o rental vehicle company shall refuse to rent a motor vehicle to any person otherwise qualified based on that person's residence, nor impose fees or charges based on that person's residence." New York City Local Law 21 § 1 (1992). The Hertz law thus prohibits car rental companies from calculating rental rates based on the renter's residence.

On March 27, 1992, Hertz commenced the present action in the United States District Court for the Southern District of New York, seeking a declaratory judgment and injunctive relief invalidating and precluding the enforcement of the Hertz law on the grounds that it violated the preemption doctrine of the New York state constitution, as well as provisions of the federal constitution and the Sherman antitrust act. In its state law argument, Hertz contends that New York State law regulating the rental car industry preempts the city's local law. See generally, Albany Area Builders Ass'n v. Guilderland, 74 N.Y.2d 372, 377-79, 546 N.E.2d 920, 922, 547 N.Y.S.2d 627, 629 (1989) (court found preemption based on the comprehensive and detailed nature of the state legislation and on the declaration of state policy); Robin v. Incorporated Village of Hempstead, 30 N.Y.2d 347, 350, 285 N.E.2d 285, 286, 334 N.Y.S.2d 129, 131 (1972) (same); Ba Mar, Inc. v. County of Rockland, 164 A.D.2d 605, 612-14, 566 N.Y.S.2d 298, 303-04 (2nd Dep't 1991) (same).

Specifically, Hertz argues that various provisions of the New York General Business Law, especially sections 396-z, 391-g, 391-i and 398-b, establish a "comprehensive and detailed regulatory scheme" regarding the rental car industry and evince the state legislature's intent to pre-empt further regulation in the field by the City of New York. See Albany Area Builders Ass'n, 74 N.Y.2d at 372, 546 N.E.2d at 920, 547 N.Y.S.2d at 627 (1989).

The city, in response, cites state law that it claims supports the compatibility of Local Law 21 and state legislation. See New York State Club Ass'n v. New York, 69 N.Y.2d 211, 505 N.E.2d 915, 513 N.Y.S.2d 349 (1987). The city asserts that it acted in accord with the New York State Constitution which places only two limitations on the grant of the city's authority: "(1) the local government (here, the City of New York) may not exercise its police power by adopting a local law inconsistent with constitutional or general law; and (2) the City may not exercise its police power when the legislature has restricted such an exercise by preempting the area of regulation." New York State Club Ass'n, 69 N.Y.2d at 217, 505 N.E.2d 915, 513 N.Y.S.2d 349 (citations omitted); see also N.Y. Const., art. IX, § 2 (McKinney 1987); N.Y. Mun. Home Rule Law, § 10(1)(ii) (McKinney 1969). The city further contends that the state's acts in the car rental area do not "evinc[e] a State purpose to exclude the possibility of varying local legislation." Monroe-Livingston Sanitary Landfill, Inc. v. Caledonia, 51 N.Y.2d 679, 683, 417 N.E.2d 78, 435 N.Y.S.2d 966 (1980)....