Street Vendor v. City of Ny

• Decision Date: 21 December 2005
• Docket Number: 402339/05
• Citation: 2005 NY Slip Op 25542,10 Misc.3d 978,811 N.Y.S.2d 555
• Parties: STREET VENDOR PROJECT, on Behalf of Its Members OUSMANE MOUSSA and Another, Petitioner, v. CITY OF NEW YORK et al., Respondents.
• Court: New York Supreme Court

10 Misc.3d 978

811 N.Y.S.2d 555

2005 NY Slip Op 25542

STREET VENDOR PROJECT, on Behalf of Its Members OUSMANE MOUSSA and Another, Petitioner, v. CITY OF NEW YORK et al., Respondents.

402339/05

Supreme Court, New York County.

December 21, 2005.

Freshfields Bruckhaus Deringer LLP, New York City (Alexander A. Yanos and Stephanie E. Webster of counsel), and Urban Justice Center, New York City (Sean Basinski of counsel), for petitioner.

Michael A. Cardozo, Corporation Counsel (Gabriel Taussig, Mark Muschenheim and Michelle Golberg-Cahn of counsel), for City of New York, respondent.

OPINION OF THE COURT

MICHAEL D. STALLMAN, J.

This CPLR article 78 proceeding challenges the City's adoption of a new schedule of fines applicable to licensed and unlicensed street vendors. By separate motion, petitioner seeks a preliminary injunction against the schedule's implementation. Petitioner claims that the subject fines are arbitrary and capricious, contrary to law and an abuse of discretion, inter alia, as constitutionally excessive and defectively promulgated.

Background

On April 21, 2005, the New York City Environmental Control Board (ECB) adopted the subject schedule of fines and caused it to be published in the City Record on June 20, 2005. (15 RCNY 31-107.)

The schedule increased the penalties imposed on street vendors for violations of the New York City Health Code and other Administrative Code of the City of New York violations. Among other increases, the schedule increased the maximum penalty from $250 to $1,000. Petitioners contend that the schedule is arbitrary and capricious; that it imposes excessive fines, in violation of the Eighth Amendment of the United States Constitution and article I, § 5 of the New York State Constitution; and that it was adopted in violation of the City Administrative Procedure Act (CAPA) (NY City Charter § 1041 et seq.).

Petitioner Street Vendor Project alleges that it is a membership-based project of the Urban Justice Center, comprised of more than 300 New York City street vendors (apparently licensed and unlicensed) who sell food and merchandise on the city streets. Petitioner Moussa, a member of the Project, alleges that he supports himself and his family exclusively through street vending of watches, and claims a total 2004 income of approximately $11,000. Petitioner Alali alleges that he is a member of the Project and that he supports himself and his family solely through street vending of hot dogs and soda, and claims a total 2004 income of approximately $10,000. Respondent Lloyd is the Commissioner of the Department of Environmental Protection, and the chairperson of ECB. ECB, created pursuant to chapter 57 of the New York City Charter, is responsible for enforcing all laws and rules pertaining to "the regulation of street peddling." (NY City Charter § 1404 [c] [1] [e].)

On July 17, 2003, ECB gave notice that it was increasing the penalties for violations of the City's laws regulating street vendors. For approximately 20 years, the penalty for the first violation in any 24-month period had been $25; the penalty for the second violation, $50; for the third violation, $100; and for the fourth or subsequent violation, $250.¹ Under the July 17, 2003 proposed revised schedule, the penalties for the first and second violations within a 24-month period were to be doubled; the penalty for a third violation was increased to $250; and the penalty for a fourth, or subsequent violation, was raised to $1,000. In 2004, three street vendors, including petitioner Moussa (with his given and family names reversed), challenged the increases in an article 78 proceeding. (Ousmane v. City of New York, Sup Ct, NY County, Index No. 402648/04.) They contended that the increases were arbitrary and capricious, and that the City's failure to provide notice of its intent to implement the increases had violated the City Administrative Procedure Act. By order dated September 28, 2004, as amended on October 4, 2004, Justice Edmead granted petitioners a preliminary injunction, enjoining the City from enforcing the July 2003 increases, and from refusing to renew vending licenses for failure to pay such increased fines. By a further, clarifying order dated October 26, 2004, Justice Edmead held that the challenged increases constituted an improper rule change. (Ousmane v. City of New York, Sup Ct, NY County, Index No. 402648/04.) Justice Edmead held, inter alia, that the increased fine schedule constituted a rule, that CAPA applied to it as a rule change, and that the proposed change was null and void in the absence of the notice, hearing and publication required by CAPA.

On October 15, 2004, ECB published in the City Record notice of its intent to adopt a penalty schedule that, as applicable to street vendors, was identical to that which had been at issue before Justice Edmead. At a public hearing, held on November 18, 2004, street vendors testified that a $1,000 fine would deprive many of them of their livelihoods, because vendors generally earn less than $11,000 a year, and are required to pay such fines as they have accumulated, before renewing their yearly licenses. Shortly thereafter, ECB voted to postpone consideration of the revised penalty schedule for street vendors. On March 17, 2005, however, ECB published notice of its intent to implement a second, revised schedule, i.e., the subject schedule. The schedule provides for penalties of $50 for the first violation within a 24-month period; $100 for the second; $250 for the third; $500 for the fourth; $750 for the fifth; and $1,000 for the sixth and subsequent violations. Thus, in comparison to the first revised schedule as proposed on October 15, 2004, the schedule decreases the penalties for a fourth and fifth violation by $500 and $250, respectively. In comparison to the schedule of fines that had been in use for the preceding 20 years, however, the schedule doubles the fines for the first and second violations, and increases the penalties for the third violation from $100 to $250, for the fourth violation from $250 to $500, for the fifth from $250 to $750, and for the sixth and subsequent violations from $250 to $1,000.

At the subsequent public hearing, held on April 18, 2005, numerous vendors testified that, because they receive multiple citations, the deferral of the $1,000 penalty from the fourth violation, as ECB had previously proposed, to the sixth would make no effective difference; and that adoption of the schedule would deprive them of their livelihoods. The Project testified that, on average, its members had received seven tickets in 2004, and that, on average, the Project's members had earned $8,400, with which to pay taxes, pay fines, and support their families. Under the schedule, the penalties for seven violations would amount to $3,650. The penalties for 14 violations within a 24-month period would amount to $10,650. Although petitioners assert that vendors may receive more than one ticket at a time, or on a single date, the City represents that, for implementation of the escalating fine schedule for repeat offenses, all violations by a vendor cited on a given date are treated as one.

On April 21, 2005, ECB voted to approve the schedule, and on June 20, 2005, it published a notice in the City Record that the schedule would become effective on July 21, 2005.

I

Using the same four words, the United States and New York constitutions declare "nor [shall] excessive fines [be] imposed." (US Const 8th Amend; NY Const, art I, § 5.) Neither constitution further explains the concept. The Excessive Fines Clause is not limited to criminal prosecutions, but is applicable to civil proceedings where punishment is imposed. (United States v. Bajakajian, 524 US 321, 337 [1998] [civil forfeiture]; Austin v. United States, 509 US 602 [1993] [civil forfeiture].)

It appears that no court has explicitly held that the Excessive Fines Clause applies to fines imposed by an administrative agency. Several courts have assumed that the clause applies to regulatory penalties, and then held that the challenged fines were not constitutionally excessive. (See e.g. Qwest Corp. v. Minnesota Pub. Utils. Commn., 427 F3d 1061 [8th Cir 2005]; Grid Radio v. Federal Communications Commn., 278 F3d 1314 [DC Cir 2002].)

The Excessive Fines Clause was intended to protect individuals from abusive, unreasonably oppressive penalties imposed by government as punishment. (See United States v. Emerson, 107 F3d 77, 80 [1st Cir 1997].) A fine is considered constitutionally excessive if (1) it constitutes payment to the government for an offense, and (2) the amount of the payment is "grossly disproportionate" to the gravity of the offense. (United States v. Mackby, 243 F3d 1159, 1166 [9th Cir 2001], citing United States v. Bajakajian, 524 US 321, 327-328 [1998].)

The Eighth Amendment has been held inapplicable to fines and sanctions "intended to secure compliance" (Kirsh v. City of New York, 1995 WL 383236, *8, 1995 US Dist LEXIS 8896, *24 [SD NY, June 27, 1995]) and situations where the offending individual has the power to mitigate the accrual of fines or penalties. (See Kraebel v. Michetti, 1994 WL 455468, *11, 1994 US Dist LEXIS 11796, *32 [SD NY, Aug. 22, 1994], affd 57 F3d 1063 [1995] [unpublished decision], citing Matter of Seril v. New York State Div. of Hous. & Community Renewal, 205 AD2d 347, 347 [1st Dept 1994] [rejecting Eighth Amendment challenge to agency's refusal to lift finding of tenant harassment where owner had option to take actions leading to termination of finding].)

As an initial matter, the City asserts that petitioners' Eighth Amendment claim is premature or unripe, because petitioners do not allege imposition of excessive penalties under the schedule. Ordinarily, Eighth Amendment challenges arise in an asapplied context, thus requiring, as a predicate for judicial review, "the imposition, or immediately impending imposition, of a challenged...