According to BloombergBusinessweek report, the Appellate Division ruled that the Taxi of Tomorrow program is a “legally appropriate response to the agency’s statutory obligation to produce a 21st-century taxicab consistent with the broad interests and perspectives that the agency is charged with protecting.” Judge David B. Saxe wrote the majority opinion. That there was a dissent by Judge Acosta makes an appeal to the New York Court of Appeals more likely.
Nissan won a contract with the city in May 2011 that allowed it to be the sole maker of NYC taxis, a deal valued at $1 billion over 10 years.
Taxi fleet operators sued the city in December 2012 on the ground that the TLC had the authority to issue standards, but not to designate a particular vehicle. A judge halted the program five months later. The city subsequently revised its rules to allow for more hybrid vehicles, something the TLC had previously advocated. The Nissan vehicle is not a hybrid, yet the TLC made it mandatory.
But in today’s ruling, the court wrote: “Where an agency has been endowed with broad power to regulate in the public interest, we have not hesitated to uphold reasonable acts on its part designed to further the regulatory scheme. Here … far-reaching control has been delegated to a commission charged with implementing a pervasive regulatory program. This far-reaching control granted to the TLC by the New York City Charter gave the agency full authority for its actions.
Judge Acosta said in dissent th
at the commission exceeded its authority, “regardless of whether the Taxi of Tomorrow project is rational and consistent” with its objectives, because it mandated the exclusive use of a specific make, model and manufacturer.
The T o T was a darling of the Bloomberg administration. The new mayor, Bill De Blasio, has decidedly different views about the taxi industry so it remains to be seen whether the city and the TLC will seek to revive the program.
As has been widely noted by now, the TLC’s “Taxi of Tomorrow” regulation has been invalidated by a New York State Supreme Court justice with the improbable name of Shlomo Hagler. Article on the ruling are here, here, and here.
The case is called Greater New York Taxi Ass’n, et al. v. New York City Taxi and Limousine Commission Limousine Commission, et al., 101083/2013 (October 8, 2013). The ruling invalidated the “Taxi of Tomorrow” program on the grounds that the regulation exceeded the TLC’s statutory authority and that in enacting the regulation the TLC violated the separation of powers doctrine.
The Taxi of Tomorrow regulation would have mandated that medallions owners purchase a specific make and model of automobile (the Nissan NV200) that had been designated by the TLC as the Official Taxicab Vehicle. It was enacted after substantial public discussion, an online poll as to the public’s preference and formal notice and comment in September 2012. After an earlier ruling invalidated part of the rule on the ground that it did not permit the use of hybrid taxis, the rule was amended. Now the the entire program has been thrown out.
The court analyzed whether the TLC had been delegated authority to enact such a rule by its enabling statute, the City Charter. In its review, the court found that “the purpose of the TLC was clearly defined” and that the Charter “enumerated authority to set ‘standards of service, standards of insurance and minimum coverage; standards for driver safety and design; standards for noise and air pollution control; and to set standards and criteria for the licensing of vehicles, drivers and chauffeurs, owners and operators engaged in such services.’” The court then concluded that the power to compel medallion owners to purchase a specific automobile does not exist in the City Charter.
The court further found that the TLC rule unlawfully impinged on the authority of the City Council to mandate the type of cars that could be used as taxis (if there was to be such a mandate at all). The TLC was not exercising a “typical administrative ‘interstitial’ rule-making function” such as its historical role of setting technical standards for taxicabs. Instead, it wrote on a clean slate, “creating its own comprehensive set of rules without benefit of legislative guidance.”
This is just the latest effort by Mayor Bloomberg and his (theoretically independent taxi commissioners) to dictate the type of vehicle that taxi owners might purchase. First, the mayor tried to force the industry to buy hybrid vehicles, not in so many words by through a minimum gas-mileage regulation. That ruling was held invalid on the grounds that only the Congress could dictate gas mileage. Then Bloomberg pushed through the Taxi of Tomorrow, which ironically would have prevented the use of hybrids.
The city has said it will immediately appeal. But for now, we are back to the traditional regime, where, in Justice Hagler’s words the New York City taxi fleet “comprised various makes and models of
vehicles made by different automobile manufacturers. These makes and models were then modified or ‘hacked-up’ for use as taxis.” The TLC set the specific standards for cars that could be employed as taxis and the medallion owners were given the freedom to purchase any make or model of vehicle from any manufacturer who met those standards.
Only recently has the TLC decided it was smart enough to design cars. But it seems it was too smart by half. Nissan, meanwhile, says it will still roll out the NV200
, and that it’s a great car. Maybe so, but without its state-mandated monopoly, it will be a tougher sell.