The city of N.Y. v. Transp.azumah LLC.

Decision Date09 March 2011
Docket Number401763/10
Citation2011 NY Slip Op 50522
PartiesThe City of New York, Plaintiff, v. Transportazumah LLC, Defendant.
CourtNew York Supreme Court

2011 NY Slip Op 50522

The City of New York, Plaintiff,
v.
Transportazumah LLC, Defendant.

401763/10

Supreme Court Of The State Of New York
New York County

Decided on March 9, 2011


For plaintiff:
June R. Buch, ACC
Michael A. Cardozo

For defendant:
Lawrence F. Hughes, Esq.
Steve A. Diaz, Esq.
Pro Hac Vice

Barbara Jaffe, J.

By notice of motion dated August 18, 2010, defendant moves pursuant to CPLR 2221(d) and (e) for an order granting it leave to renew and reargue its opposition to plaintiff's motion for a preliminary injunction and, upon reargument, vacating and setting aside the preliminary injunction. Plaintiff opposes.

By notice of motion dated August 23, 2010, plaintiff moves pursuant to CPLR 3212 for an order granting it summary judgment, pursuant to CPLR 3211(a) dismissing defendant's counterclaims and pursuant to CPLR 3211(b) dismissing defendant's affirmative defenses, and granting it a declaratory judgment against defendant. Defendant opposes and, by notice of cross-motion dated September 16, 2010, moves pursuant to CPLR 3211 for an order dismissing plaintiff's complaint, and an order striking two affidavits as inconsistent and unreliable, granting it leave to renew its opposition to plaintiff's motion for a preliminary injunction, and pursuant to

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22 NYCRR 130-1 awarding it costs and sanctions against plaintiff and plaintiff's counsel. Plaintiff opposes the motion.

By order to show cause dated September 17, 2010, plaintiff moves pursuant to CPLR 2221(a) for an order staying, vacating or modifying a preliminary conference order and pursuant to CPLR 2201 for an order staying all discovery in this action pending a determination on plaintiff's motion for summary judgment. Defendant opposes.

I. BACKGROUND

A. Undisputed facts

Defendant organizes and transports bus passengers. One group of passengers, the Apple Core Transportation Club (ACT), is comprised of commuters who traveled specific bus routes that had been operated in New York City by the Metropolitan Transportation Authority until the routes were discontinued in June 2010. Thereafter, defendant contracted with Skyliner Travel & Tour Bus Corp. (Skyliner) to charter buses to transport ACT members to destinations in and between Manhattan and Queens. The service "was intended to constitute a replacement bus service" for ACT members, operating during weekday rush hours, between specific stops, and on a fixed schedule. Passengers paid defendant fees for the service. (Affidavit of Joel Anabilah-Azumah, dated July 13, 2010 [Anabilah-Azumah Affid.]).

Visitors to defendant's website may join ACT at no charge by downloading a club pass without having to purchase a ticket or provide any personal information; no account numbers are associated with the passengers or the passes, and the passes can be photocopied for use by anyone. (Affirmation of June R. Buch, ACC, dated Aug. 23, 2010 [Buch Aff.], Exh. B).

Pursuant to defendant's contract with Skyliner, Skyliner provides buses and drivers to defendant in exchange for a fixed fee per bus. (Id.). Defendant does not own, operate, maintain, or insure any of the buses it leases. (Id.). A sample contract between defendant and Skyliner reflects that on June 28, 2010, defendant ordered 13 buses from Skyliner, each with a 56-passenger seating capacity, all scheduled to pick up and drop off passengers for a period between two and half and four hours, and all operating sometime between 6:10 am and 11:15 am or 3:25 pm and 9:40 pm. (Id.). The June 28 itineraries reflect that the buses were to follow either the former City X29 or X90 routes. (Id.).

On its website, defendant designates its routes with the same letters and numbers used for the discontinued bus routes, i.e., X25, X26/X90, X29, X90, and QM22, and lists multiple pickup and discharge points along the routes with numerous daily runs. (Buch Aff., Exh. E).

Defendant is not authorized to operate by the New York State Department of Transportation (NYSDOT), nor has it applied for or received a New York City franchise to operate a bus line. (Affidavit of Anne Koenig, dated July 6, 2010 [Koenig Aff.]). Skyliner, however, has a special or chartered party authority from the NYSDOT pursuant to 17 NYCRR 700 and New York State Transportation Law § 152. (Affidavit of William B. Leonard, dated July 2, 2010).

On June 25, 2010, plaintiff sent defendant a letter demanding that it cease and desist from operating its bus service (Koenig Aff., Exh. E), and by letter dated July 8, 2010, plaintiff filed a complaint against Skyliner with NYSDOT, alleging that it was operating outside of its state charter authority. (Affirmation of Elaine J.S. Chen, ACC, dated Sept. 24, 2010, Exh. B). On or about August 24, 2010, NYSDOT dismissed and closed plaintiff's complaint against Skyliner,

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finding that defendant and Skyliner were operating a bus line rather than a charter service, and concluding that City and not NYSDOT has jurisdiction over them. (Id., Exh. E).

Sometime in 2010, plaintiff issued Requests for Proposals for two new bus franchises after the passage of an authorizing resolution. (Koenig Aff., Exhs. A, B). The proposals required applicants to submit information related to their qualifications, experience, background, and integrity, including information about the safety and reliability of their vehicles, and to fill out a Vendor Information System Questionnaire which requires information about the integrity and responsibility of the applicant and the applicant's principal. (Id., Exhs. C, D). During the past few years, plaintiff granted two new bus franchises pursuant to similar Requests for Proposals. (Id.).

B. Plaintiff's investigation

On June 28, 2010, Joseph Hock, a supervising inspector of the Highway Inspection Quality Assurance (HIQA) Unit of the City Department of Transportation (NYCDOT) received a copy of defendant's bus route schedule and stop list, and went to a City X90 bus stop on Water Street, where he observed a sign which read "TransportAzumah X90 Bus Stop." (Affidavit of Joseph Hock, dated Aug. 18, 2010, Exhs. A, B). At 4:50 pm, he boarded the bus, which had a capacity of approximately 60 people, and observed 15 to 20 passengers. At some point during the ride, a passenger collected $5.50 cash fare from each passenger; Hock was never asked whether he was a member of ACT nor was he asked to show a copy of an ACT bus pass. (Id.).

The next day, Hock went to a stop on the X25 route, where he observed defendant's sign, "TransportAzumah X25 Bus Stop," and someone offered him an ACT bus pass. (Id., Exhs. C, D). He also saw a bus operating on the X90 route; "Skyliner" was printed on its side. (Id., Exh. I).

On July 6, 2010, Hock visited defendant's website where he downloaded an ACT pass without joining ACT. (Id.).

II. PERTINENT PROCEDURAL BACKGROUND

On or about July 6, 2010, plaintiff commenced the instant action seeking a permanent injunction against defendant barring it from operating a public bus line or route within New York City in violation of section 6-202 of the Administrative Code of the City of New York, which provides that "[i]t shall be unlawful for any omnibus route or routes for public use . . . to be operated in or upon any street within the city until and unless a franchise or right therefor shall be obtained from the board of estimate in like manner as, and subject to the limitations and conditions relating to, franchises or rights provided and imposed by the charter and the code." (Buch Aff., Exh. A). Plaintiff alleges that since June 28, 2010, defendant has operated full-size coach buses along set routes and on a set schedule, picking up and dropping off passengers at designated stops, and obtaining cash fares on board. (Id.). Plaintiff contends that defendant's operation is unauthorized as it has no City franchise, nor is it an authorized charter bus service, and that it is a threat to public safety. (Id.). By order to show cause signed on July 6, 2010, another justice of this court granted plaintiff a temporary restraining order, and after a hearing on July 15, 2010, a preliminary injunction issued prohibiting defendant from operating any bus line or route for public use within the City without a franchise.

On or about July 28, 2010, defendant served its answer and counterclaims, alleging as

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affirmative defenses that the complaint fails to state a cause of action, that plaintiff failed to join NYSDOT and Skyliner as necessary parties, that plaintiff failed to exhaust administrative remedies, that NYSDOT has primary jurisdiction over plaintiff's claims, that the action is barred by plaintiff's commencement of multiple actions and/or by plaintiff's unclean hands, that plaintiff has engaged in selective enforcement in violation of defendant's rights, that Administrative Code § 6-202 is unconstitutional, and that compliance with it is impossible. (Buch Aff., Exh. B). As counterclaims, defendant argues that plaintiff interfered with its contract with Skyliner and unlawfully deprived it of its civil rights, and that plaintiff was not entitled to a preliminary injunction. (Id.).

III. MOTIONS FOR SUMMARY JUDGMENT AND TO DISMISS

A. Is defendant's bus service a bus line?

Plaintiff argues that the undisputed facts establish that defendant is operating a bus line for which a franchise is required, that defendant does not have a franchise, and that defendant and not Skyliner operates the bus line. (Plaintiff's Memo. of Law, dated Aug. 23, 2010 [Plaintiff's Aug. Memo.]). Defendant alleges that Skyliner is operating the bus service, and that, in any event, it is a charter bus service and not a bus line. Defendant characterizes itself as a transportation broker. (Defendant's Memo. Of Law, dated Sept. 16, 2010 [Defendant's Sept. Memo.]).

New York Transportation Law § 2(3) defines a bus line as a "common carrier of passengers by motor vehicle that is usually characterized by the use of vehicles having a seating...

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