New York City Committee for Taxi Safety v. New York City Taxi, Limousine Com'n

• Decision Date: 02 July 1998
• Citation: 677 N.Y.S.2d 449,177 Misc.2d 855
• Parties: , 1998 N.Y. Slip Op. 98,441 NEW YORK CITY COMMITTEE FOR TAXI SAFETY, Petitioner, v. NEW YORK CITY TAXI AND LIMOUSINE COMMISSION et al., Respondents. (And Two Related Proceedings.)
• Court: New York Supreme Court

Page 449

677 N.Y.S.2d 449

177 Misc.2d 855, 1998 N.Y. Slip Op. 98,441

NEW YORK CITY COMMITTEE FOR TAXI SAFETY, Petitioner, v. NEW YORK CITY TAXI AND LIMOUSINE COMMISSION et al Respondents. (And Two Related Proceedings.)

Supreme Court, New York County.

July 2, 1998.

Herrick & Feinstein, for petitioner.

Michael D. Hess, Corporation Counsel, for New York City Taxi & Limousine Commission, respondent.

Rosenman & Colin, New York City, for Metropolitan Taxicab Board of Trade, Inc., respondent.

FRANKLIN R. WEISSBERG, Justice.

The petitioners in these three CPLR article 78 proceedings seek a judgment declaring 16 regulations adopted by the respondent New York City Taxi and Limousine Commission ("TLC" or "Commission") null and void and enjoining the respondents from implementing and enforcing these regulations.

The three proceedings are consolidated herein for decision. As a preliminary matter, since petitioners in all three proceedings seek declaratory and injunctive relief, the lawsuits should have been brought as declaratory judgment actions rather than article 78 proceedings. Accordingly, the proceedings are hereby converted into declaratory judgment actions pursuant to CPLR 103(c). See Matter of Gordon v. Village of Monticello, 207 A.D.2d 55, 57 n. 2, 620 N.Y.S.2d 573 (3rd Dept.1994), rev'd on other grounds, 87 N.Y.2d 124, 637 N.Y.S.2d 961, 661 N.E.2d 691 (1995).

The Promulgation of the Challenged Regulations

The TLC is composed of nine members, one of whom is designated to act as chairperson and chief executive officer. The TLC has been delegated the authority for regulating and supervising "the business and industry of transportation of persons by licensed vehicles for hire in the city," City Charter § 2303(a). This authority specifically includes (1) the regulation and supervision of standards and conditions of service, (2) the issuance, renewal, suspension and revocation of licenses to operate or drive taxicabs and certain other vehicles for hire within the City of New York, (3) the establishment of safety standards and (4) the imposition of insurance and financial requirements for the owners and drivers of licensed vehicles for hire. See City Charter § 2303(b). Under section 2303(b)(11) of the City Charter, the Commission is empowered to promulgate rules and regulations which carry out these purposes. See also Admin. Code of the City of New York § 19-503.

Taxicabs are defined under the Administrative Code as TLC-licensed vehicles designed to carry a maximum of five passengers and permitted to accept hails from passengers on the street. See Admin. Code of the City of New York § 19-502(1). Pursuant to its rulemaking authority, the TLC has promulgated regulations setting forth the licensing requirements and other standards and criteria for the ownership of licensed taxicabs. See Rules of the City of New York ("RCNY"), tit. 35, ch. 1 (entitled "Taxicab Owners Rules"). The TLC has also promulgated regulations setting forth the licensing requirements and other standards and criteria for persons licensed to drive a taxicab within the City of New York. See RCNY, tit. 35, ch. 2 (entitled "Taxicab Drivers Rules").

In January, 1998, the TLC drafted a proposal for amending the Taxicab Owners Rules so as to require that taxicabs employ an auxiliary air conditioning system that would cool the rear compartment directly rather than, as the regulations had previously required (35 RCNY § 3-03[3][5][iv] ), merely convey cooled air from the front compartment to the rear. Under the City Administrative Procedure Act ("CAPA"), an agency which seeks to promulgate rules and regulations must provide the public with an opportunity to submit written comments on the rules and must conduct a public hearing at which interested persons are afforded the opportunity to comment orally on the rules. See City Charter § 1043(d). In addition, the agency must publish the proposed rules, together with a statement of their basis and purpose, in the City Record at least 30 days prior to the public hearing. See City Charter § 1043(b).

On January 16, 1998, the TLC published a copy of the proposed new air conditioning rule in the City Record along with a statement of the basis and purpose of the rule. The notice advised the public that written comments on the proposed rule could be submitted to the Commission for consideration until February 18, 1998 and that a public hearing would be held on February 19, 1998 at the TLC offices located on Rector Street. On February 18, 1998, the hearing was held as scheduled and numerous persons, including various representatives of the taxicab industry, were afforded an opportunity to testify about the proposed air conditioning rule. As a result of the hearing, an advisory committee was established to explore a number of questions which had been raised about the proposed rule. The advisory committee reported back to the TLC staff later that Spring.

In the meantime, in April, 1998, the TLC drafted seventeen other proposals for amending various provisions of the Taxicab Owners Rules and the Taxicab Drivers Rules. These proposed regulations imposed financial disclosure requirements on taxi owners, established a "persistent Violator Program" under which a point system was devised for certain rule violations which could lead to suspension or revocation of a taxicab driver's license, increased the requisite insurance coverage for each taxicab and required that taxicab owners respond to all TLC calls within 24 hours. The proposals also included the requirement that applicants for a taxicab driver's license be tested for drugs and controlled substances, and complete a defensive driving program authorized by the Commission. On April 27, 1988, the TLC published its seventeen proposed amendments in the City Record and advised that a public hearing in connection with the proposed rule change would be held on May 28, 1998 at the TLC offices located on Rector Street and that written comments could be submitted to the Commission up to and including May 27, 1998. Thereafter, the location of the hearing was changed to the World Trade Center and notice of this change was published in the City Record on May 22, 1998. The location was again changed and notice thereof was published in the May 26, 1998 issue of the City Record.

The public hearing on the seventeen proposed amendments was held, as scheduled, on May 28, 1998. The hearing began at approximately 9:30 a.m. and the first order of business was a Commission vote on the proposed air conditioning regulation. The measure was passed. The hearing then moved on to a discussion about the seventeen proposed amendments. At the conclusion of the hearing that day, the Commission voted on fifteen of the seventeen proposals. All of these fifteen proposed amendments were approved, some with modifications. The two proposals which were not voted on, the requirement that taxicab owners obtain a $100,000 surety bond and the TLC's use of the New York State Department of Motor Vehicles point system to penalize taxicab drivers, were tabled for possible later consideration.

The Omnibus Challenge to the Regulations

In the proceeding brought by the New York City Committee for Taxi Safety, the petitioner raises two procedural challenges to the entire body of the 15 new regulations and, in addition, offers a number of substantive reasons why each of the regulations should be invalidated.

The petitioner's first procedural challenge is based on the provision in CAPA which requires that notice of the time and place of a public hearing on proposed agency rules be published 30 days prior thereto. See City Charter § 1043(b). The petitioner suggests that this provision is inflexible and that if the agency changes the location of a hearing after notice has been published, it must re-schedule the hearing for a date at least 30 days after re-publication of the notice with the new address. There is nothing in CAPA which supports such rigidity. Indeed, under the statute, the agency need not even hold a public hearing so long as it publishes in the notice of proposed rulemaking in the City Record a statement that a public hearing would serve no public purpose. See City Charter § 1043(d). Moreover, the TLC afforded the public and the taxicab industry adequate notice and opportunity to comment on the proposed regulations. There is no evidence in the record that anyone, much less a substantial number of persons, failed to make their views known because of inadequate notice of the change of place where the hearing was held.

On the contrary, the record indisputably establishes that the taxicab industry received a fair hearing and had a significant impact upon the Commission's decision-making process. Two of the regulations with which the taxi industry was most concerned and about which they most vociferously complained, the surety bond requirement and the use of the state point system to penalize taxicab drivers, were tabled. Other proposed regulations were modified. The fact that the industry was only partially successful in its challenge to the Commission's proposed rules does not mean that its voice was not heard in a meaningful way.

In petitioner's second procedural challenge to the amended regulations, it argues that the regulations must be invalidated because they were promulgated without a fact-finding hearing having been held. This argument is without merit. An administrative regulation which is legislative in character will be upheld as valid if it has a rational basis and is neither unreasonable nor arbitrary and capricious. See Matter of Levine v. Whalen, 39 N.Y.2d 510, 518, 384 N.Y.S.2d 721, 349 N.E.2d 820 (1976). InConsolation Nursing Home, Inc. v. Commissioner of New York State Dep't of Health, 85 N.Y.2d 326, 332, 624 N.Y.S.2d 563, 648 N.E.2d 1326 (1995), the Court of Appeals stated that "Although documented studies often provide support for an agency's rule making, such studies are...