Melrose Credit Union v. City of N.Y.

• Decision Date: 02 May 2018
• Docket Number: Index No. 6443/15,2016–02214
• Citation: 161 A.D.3d 742,76 N.Y.S.3d 579
• Parties: In the MATTER OF MELROSE CREDIT UNION, et al., petitioners/plaintiffs, Progressive Credit Union, appellant, v. City of New York, et al., respondents.
• Court: New York Supreme Court — Appellate Division

161 A.D.3d 742

76 N.Y.S.3d 579

In the MATTER OF MELROSE CREDIT UNION, et al., petitioners/plaintiffs,Progressive Credit Union, appellant,

v.City of New York, et al., respondents.

2016–02214

Index No. 6443/15

Supreme Court, Appellate Division, Second Department, New York.

Argued—October 2, 2017

May 2, 2018

Crosby & Higgins LLP, New York, N.Y. (Todd A. Higgins of counsel), for appellant.

Zachary W. Carter, Corporation Counsel, New York, N.Y. (Scott Shorr and MacKenzie Fillow of counsel), for respondents City of New York, Bill de Blasio, in his official capacity as the Mayor of the City of New York, New York City Taxi and Limousine Commission, and Meera Joshi, in her official capacity as the Chair of the New York City Taxi and Limousine Commission.

Eric T. Schneiderman, Attorney General, New York, N.Y. (Andrew W. Amend and Andrew Rhys Davies of counsel), respondent pro se.

RUTH C. BALKIN, J.P., JOSEPH J. MALTESE, BETSY BARROS, FRANCESCA E. CONNOLLY, JJ.

DECISION & ORDER

In a hybrid proceeding pursuant to CPLR article 78 and action for declaratory relief, the petitioner/plaintiff Progressive Credit Union appeals from an order and judgment (one paper) of the Supreme Court, Queens County (Allan B. Weiss, J.), entered February 1, 2016. The order and judgment granted those branches of the cross motion of the respondents City of New York, Bill de Blasio, in his official capacity as the Mayor of the City of New York, the New York City Taxi and Limousine Commission, and Meera Joshi, in her official capacity as the Chair of the New York City Taxi and Limousine Commission, and the separate cross motion of the respondent Eric T. Schneiderman, in his official capacity as the Attorney General of the State of New York, which were pursuant to CPLR 3211(a)(7) and 7804(f) to dismiss the petition/complaint insofar as asserted against each of them, and denied the petition/complaint and dismissed the proceeding/action.

ORDERED that the order and judgment is affirmed, with costs.

This proceeding/action arises out of the rapid growth of for-hire vehicle services provided by companies such as Uber Technologies, Inc. (hereinafter Uber), which allow passengers to use a smartphone application to request on-demand ground transportation. In 1971, the New York City Council created the respondent/defendant New York City Taxi and Limousine Commission (hereinafter the TLC) for the stated purpose of "continuance, further development and improvement of taxi and limousine service in the city of New York" (N.Y. City Charter § 2300). The TLC is charged with "[t]he formulation, promulgation and effectuation of rules and regulations reasonably designed to carry out the purposes, terms and provisions of this chapter" (N.Y. City Charter § 2303[b][11] ), and is empowered to "adopt and establish an overall public transportation policy governing taxi, coach, [and] limousine ... services as it relates to the overall public transportation network of the city" (N.Y. City Charter § 2300). The TLC's "regulation and supervision shall extend to ... standards of safety, and design, comfort, [and] convenience" and "[t]he development and effectuation of a broad public policy of transportation ... including innovation and experimentation in relation to ... modes of service and manner of operation" (N.Y. City Charter § 2303[b][6], [9]; see N.Y. City Charter § 2303[b][11] ).

In New York City, there are three types of vehicles that are available to passengers for hire: (1) yellow medallion taxicabs; (2) Street Hail Liveries, which are green taxicabs; and (3) for-hire vehicles (hereinafter FHVs). FHVs include livery cars, luxury limousines, and "black cars," which are FHVs that are "dispatched from a central facility ..., where such central facility has certified to the satisfaction of the [TLC] that more than ninety percent of the central facility's for-hire business is on a payment basis other than direct cash payment by a passenger" (Administrative Code of the City of New York § 19–502[u] ). Pursuant to Administrative Code of the City of New York § 19–504(a)(1), "[n]o motor vehicle other than a duly licensed taxicab shall be permitted to accept hails from passengers in the street." State legislation known as the "HAIL Act" similarly provides that medallion taxicabs are "permitted to pick up passengers via street hail from any location within the city of New York." Medallion taxicabs also retain "the exclusive right ... to pick up passengers via street hail" in the "HAIL exclusionary zone," which is the New York City airports and the area of Manhattan south of East 96th Street and south of West 110th Street (L 2011, ch 602, as amended by L 2012, ch 9, §§ 4[c]; 11). Street Hail Liveries are permitted to pick up passengers by street hail anywhere in New York City except in the HAIL exclusionary zone. FHVs are prohibited from picking up passengers by street hail, and may only accept passengers "on the basis of telephone contract or prearrangement" (Administrative Code of City of N.Y. § 19–507[a][4]; see L 2011, ch 602, as amended by L 2012, ch 9, § 11).

On June 1, 2015, the petitioner/plaintiff Progressive Credit Union (hereinafter Progressive), among others, commenced this hybrid proceeding pursuant to CPLR article 78 and action against the City of New York, Bill de Blasio, in his capacity as the Mayor of the City of New York, the TLC, Meera Joshi, in her capacity as the Chair of the TLC (hereinafter collectively the City respondents), and Eric T. Schneiderman, in his capacity as the Attorney General of the State of New York (hereinafter the Attorney General, and together with the City respondents, the respondents). Progressive alleged that, in January 2015, the TLC adopted rules known as the "E–Hail Rules," which "allow passengers to summon taxicabs and Street Hail Liveries in New York City by E–Hail and to make E–Payments." In its notice of promulgation of the rules, the TLC stated that the E–Hail Rules were enacted based on data collected during a pilot program which "show that E–Hail [applications on cell phones] make[ ] it easier for passengers and drivers to connect without reducing the availability of the hallmark New York City hand-hail for other passengers." Thereafter, on or about April 24, 2015, the TLC published a set of proposed rules (hereinafter the FHV E–Dispatch Rules) which it stated were intended to "impose uniform standards on all current and future apps used by FHVs, whether they are offered by a base or by a licensed independent app company utilized by a base." Progressive sought, inter alia, relief in the nature of mandamus and prohibition, and to annul certain rules promulgated by the TLC that were purportedly inconsistent with taxicab medallion owners' exclusive right to pick up passengers via street hail (see Administrative Code of City of N.Y. § 19–504[a][1]; L 2011, ch 602, as amended by L 2012, ch 9, § 11).

Progressive challenges the E–Hail Rules and the FHV E–Dispatch Rules to the extent that they treat an electronic request for a ride from an FHV as a form of prearrangement, as opposed to a hail (see 35 RCNY 51–03). Progressive alleged in the petition/complaint that the use of a smartphone application to request a ride from an FHV was "simply a modern-day version of the traditional hail," and that "unless the TLC immediately compels companies like Uber to stop illegally accepting E–Hails, the value of the taxicab medallion will continue to drop, until it soon becomes worthless." Progressive argued that "[n]otwithstanding its clear, non-discretionary duties, the TLC has inexplicably shirked its responsibility to enforce the hail laws, including with respect to the hundreds of thousands of illegal E–Hails being solicited and accepted each week by Uber FHVs." With respect to the Attorney General, Progressive sought to "compel the Office of the Attorney General to investigate, bring appropriate action, and enforce or facilitate the enforcement of the New York State HAIL Act." Progressive also moved for a preliminary injunction.

The City respondents cross-moved pursuant to CPLR 3211(a)(3), (5), and (7) and 7804(f) to dismiss the petition/complaint insofar as asserted against them on the grounds that Progressive lacked standing to commence this proceeding/action, that the proceeding/action was time-barred, and that Progressive failed to demonstrate a clear legal right to the relief sought. The Attorney General separately cross-moved, inter alia, pursuant to CPLR 3211(a)(7) and, in effect, CPLR 7804(f) to dismiss the petition/complaint insofar as asserted against him on the ground that relief in the nature of mandamus was unwarranted. The Supreme Court granted those branches of the respondents' separate cross motions which were pursuant to CPLR 3211(a)(7) and 7804(f) to dismiss the petition/complaint insofar as asserted against each of them for failure to state a cause of action, and denied the petition/complaint and dismissed the proceeding/action. Progressive appeals.

We agree with the Supreme Court that the petition/complaint should be dismissed insofar as asserted against the City respondents, albeit for a different reason, namely, that Progressive failed to meet its burden of demonstrating that it has standing to commence this proceeding (see Matter of Association for a Better Long Is., Inc. v. New York State Dept. of Envtl. Conservation, 23 N.Y.3d 1, 9, 988 N.Y.S.2d 115, 11 N.E.3d 188 ; Matter of Eastview Props., Inc. v. Town of Chester Planning Bd., 138 A.D.3d 838, 838–839, 29 N.Y.S.3d 534 ; Matter of People v. Christensen, 77 A.D.3d 174, 185–186, 906 N.Y.S.2d 301 ). "Standing is a threshold determination that a person should be allowed access to the courts to adjudicate the merits of a particular dispute" ( Matter of CPD N.Y. Energy Corp. v. Town of Poughkeepsie Planning Bd., 139 A.D.3d 942, 943, 32 N.Y.S.3d 275 ; see Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 769, 570 N.Y.S.2d 778, 573 N.E.2d 1034 ; Matter of Eastview Props.,...