Metropolitan Taxicab Board of Trade Seeks To Apply Brakes to Mayor's Outer Borough Street Hail Livery Plan, Filing Lawsuit in New York State Supreme Court

NEW YORK, April 18, 2012 /PRNewswire/ -- The Metropolitan Taxicab Board of Trade ("MTBOT"), New York's largest association of yellow medallion taxi fleets, filed a lawsuit today in New York State Supreme Court, New York County. The group charges that the "outer borough street hail livery" plan originally proposed by Mayor Bloomberg in January 2011 and passed into law by the State Legislature in February 2012, violates the rights of yellow taxi medallion owners and taxi drivers who have paid for the legally protected "exclusive" right to pick up street hails in New York City for 75 years. Rules meant to implement the State legislation are expected to be voted on at a Taxi and Limousine Commission hearing on Thursday, April 19.

The Outer Borough Street Hail Livery law allows up to 18,000 livery drivers to obtain a HAIL permit that entitles them to cruise the streets and pick up street hails in the Bronx, Brooklyn, Queens, Staten Island and Manhattan above East 96th Street and West 110th Street. It also authorizes the sale of up to 2,000 new yellow taxi medallions.

"The street hail livery rules are unconstitutional, irresponsible and unconscionable," said Ron Sherman, President of the Metropolitan Taxicab Board of Trade. "How can the City of New York sell medallions to thousands of individual owner‐drivers and small businesses, promising them the exclusive right to pick up street hails, only to take that right away in one destructive piece of legislation? And how can the City do this without a single public hearing, without the authorization of the City Council, and without a single economic study on its effects on this industry comprised mostly of immigrants who have pursued the American dream by working hard, saving their earnings and playing by the rules?" Mr. Sherman continued, "We are bringing this suit on behalf of all the individuals, all the small businesses, all the men and women who are overwhelmed with anxiety, grief and worry over their future as a result of this devastating law, which will completely undermine their livelihood and lifetime investment." MTBOT has once again retained the law firm of Emery, Celli, Brinckerhoff & Abady, which has successfully argued the last three consecutive cases that MTBOT has brought against the City and its Taxi and Limousine Commission in federal and state courts on various other abuses.

Here are the facts:

• For 75 years, the yellow medallion has provided the legally protected "exclusive" right to pick up street hails in all five boroughs in New York City – and the City has reaped hundreds of millions of dollars in revenue from the sale of those medallions.
• Most medallion owners have large mortgages and are relying on their medallion for daily revenue to put food on the table, put their kids through college and fund their retirements. Most medallion owners do not have pensions or health insurance or 401ks – all they have is their medallion and the expectation that its core value – the exclusive right to pick up street hails – was protected by City and State law.
• Today, with uncertainty mounting, individual medallion prices have already plummeted $15,000 and there are already reports of a market with far more sellers than buyers for the first time in many years ‐ a sign of panic. If the medallion continues to be devalued, individual New Yorkers may soon go "underwater" on their mortgages and end up in default –not because of natural market conditions, but because of governmental manipulation.
• The recent State Law has authorized 18,000 new permits that will be sold for $1,500 – renewable every three years ‐ to livery drivers, many of whom, it is anticipated, are the same livery drivers who have been illegally poaching fares from yellow taxi drivers for years.
• These permits will now allow these livery drivers to legally pick up street hails in all five boroughs, the only restriction being Manhattan below the arbitrarily drawn lines of East 96th Street and West 110th Street. In this "yellow zone," the TLC says it will rely on enforcement to protect yellow taxis from having their fares poached.
• For many years, the TLC has not, in any serious way, enforced against the thousands of illegal street hails by liveries, black cars and "straight plates" (private vehicles unregulated by the TLC) that occur in Manhattan, at the airports and in the boroughs every day. It is a reasonable assumption that if the TLC could not enforce against illegal livery street hails today, there is little chance it will be able to adequately enforce against them now plus 18,000 newly permitted street hail liveries.
• The State Law also authorized the sale of an additional 2,000 yellow taxi medallions, an arbitrary number that the Mayor's Office of Management and Budget says will be sold in one fiscal year. That is nearly 7 times the amount of medallions that has ever been sold in one fiscal year.

Today's legal action is seeking a declaration from the Court that the Outer Borough Law is invalid as well as an injunction to prevent the City from enforcing this invalid State law. Here are the abuses that are highlighted in today's legal action:

• The Outer Borough Law was passed without a "Home Rule" message from the New York City Council in violation of the New York State Constitution. Every previous medallion sale that has been authorized by the State has been accompanied by a Home Rule message that indicates the approval of the local legislative body over a policy that only affects that locality – in this instance New York City. So, Assembly Members and State Senators from rural and suburban New York State counties had more say over livery cabs in Queens than the Queens members of the New York City Council.
• The Outer Borough Law violates the New York State Constitution's "exclusive privileges and immunities" clause that prohibits an individual, corporation or association from receiving "any exclusive privilege, immunity or franchise whatever." The livery permit is offered only to livery drivers and owners; there is also a for‐hire livery base permit that is only offered by livery bases. This is no small "exclusive privilege" as medallions that also offer street hail privileges have sold for more than $1 million while street hail livery permits are only $1,500 every 3 years.
• The Outer Borough Law is a government "taking." The TLC and the State Legislature is stripping the medallion of the very value that allowed the City to sell it in the first place. This law severely limits a medallion's potential for revenue, squeezing yellows into an artificially restrictive and arbitrarily drawn "exclusive zone" and lowering its overall value which medallion owners are relying on for estate and retirement planning, living expenses and livelihood.
• The Outer Borough Law and specifically the sale of 18,000 new street hail livery permits has not undergone the mandatory environmental review that is required of any significant plan of this nature, in this case, the addition of thousands of cruising liveries in already congested hubs throughout the City.
• There is no basis for flooding the streets with 2,000 new yellow taxicabs that must now compete for business with 13,237 existing yellow taxicabs, 18,000 liveries with street hail permits and the thousands of illegal liveries, black cars and straight plates.

MTBOT spent months attempting to negotiate with the Taxi and Limousine Commission, offering countless proposals that would improve street hail service in the boroughs outside of Manhattan and in some parts of Upper Manhattan while respecting the rights of yellow taxi drivers and owners as well as livery drivers.

Ultimately, the TLC rejected these plans and chose to broker an unconstitutional deal, in the dark, behind closed doors 150 miles away in Albany.

The Metropolitan Taxicab Board of Trade is a 59-year-old non-profit trade association that represents 33 fleets in 4 boroughs that are comprised of nearly 4,000 yellow medallion taxicabs –the largest taxi fleet association in New York City. MTBOT member fleets lease taxis to more than 16,000 drivers and directly employ hundreds of dispatchers, managers and other personnel.

SOURCE Metropolitan Taxicab Board of Trade