Opinion
March 18, 1999
Institute for Justice, Washington, D.C. (William H. Mellor, Clint Bolick, Nicole S. Garnett and Deborah Simpson of counsel), and Shapiro Lane, L.L.P., Mamaroneck (J. Mark Lane of counsel), for plaintiffs.
Michael D. Hess, Corporaton Counsel (Dana Beberman of counsel), for City of New York and others, Richard M. Weinberg (Gail R. Zweig of counsel), for council of City of New York, defendant. Eliot Spitzer, Attorney-General, for State of New York and others, defendants.
This is an action seeking to nullify local legislation giving the City of New York authority for the granting of franchises for the operation of commuter van services in the City of New York. For a brief history of the development of commuter van services in New York City and the legislation granting the City of New York authority over the operation see the decision in Giuliani v. Council of the City of New York, (Sup.Ct. N.Y. Cty., Index No. 404215/97) decided this day.
Plaintiffs are operators of existing commuter services who have been denied their requests to expand operations or are seeking to obtain authorizations for a new commuter van service and the organization representing the interests of commuter van operators.
In this action, which raises several federal and state constitutional claims, the plaintiffs seek summary judgment on the third and fourth causes of action. The City Council cross-moves for partial summary judgment dismissing the first, second, third and fourth causes of action. The other City defendants also cross-move for partial summary judgment against the first through fourth causes of action
The first cause of action alleges a denial of due process against all defendants in that the state and local legislation prohibits community vans from operating on bus routes and prohibits the picking up of customers except by pre-arrangement. The second cause of action alleges a violation of constitutional rights by allowing the applications for commuter van services to be denied without an explanation or a record for review or merely not responding to the application within 180 days, all of which, once again alleges plaintiff, amount to a deprivation of the plaintiffs right to earn a living. The third cause of action directed against the City defendants seeks to nullify Local Law 115 (1993). It claims that this legislation which does not provide for the permanent authorizations accorded by the State to existing commuter van services (the "grandfather authorizations") is therefore invalid as inconsistent with State law and deprives the owners of these operating services of their constitutional right to liberty by depriving them of the right to earn a living. In addition, they argue that the State enabling legislation transferring regulatory authority from a mayoral designated agency is violated by Local Law 115 which gives the final authority of approval to the City Council, a local legislative body rather than a city agency. The plaintiffs also claim that the local law does not guarantee that the approval process will be completed within 180 days as is required by the enabling Act (NY Transit L. § 80[5][a][1]). The fourth cause of action against the City defendants is directed against Local Law 83 (1997) imposing a moratorium on the granting of new applications. That law has expired and has not been renewed. Therefore, this branch of the motion is denied as moot.
The part of the third cause of action directed against the provision requiring that any decision by the Taxi and Limousine Commission involving approval of an application to establish or extend a franchise is subject to approval by the City Council has been nullified by the decision in Giuliani v. The Council of the City of New York, supra. The City defendants in this action had a full and fair opportunity to litigate this issue. They are estopped from relitigating it in this action. DeWitt v. Hall, 19 N.Y.2d 141, 278 N.Y.S.2d 596 (1967). The remaining issues boil down to (1) whether the grandfather authorization in the local law should be struck down because it is inconsistent with the permanent status that was granted under the state law and deprives the defendants of their constitutional right to earn a living; and (2) whether the local law by allowing a failure to make a decision of a request by a franchise within 180 days is a denial of an application is inconsistent with the State law requirement of a decision within 180 days; and (3) whether the entire local law must fall because its invalid provisions cannot be severed from the rest of the statute.
Although this issue was not raised in the plaintiffs notice of motion, nor in their complaint, it was argued extensively in all of the parties memoranda. Therefore, the Court will address the issue.
A local law is clothed with the presumption of constitutionality. An attack on such a law carries a heavy burden. 41 Kew Gardens Road Associates v. Tyberski, 70 N.Y.2d 325, 520 N.Y.S.2d 544 (1987). To overcome this heavy burden, movant must establish beyond a reasonable doubt that there is no rational relationship between the legislation and the public interest, even in the absence of relevant legislative findings. Town of North Hempstead v. Exxon Corp., 53 N.Y.2d 747, 439 N.Y.S.2d 342 (1981).
The exceedingly strong presumption of constitutionality applies not only to enactments of the legislature but to ordinances of municipalities as well. While this presumption is rebuttable, unconstitutionality must be demonstrated beyond a reasonable doubt and only as a last resort should courts strike down legislation on the ground of unconstitutionality. The ordinance may not be arbitrary. It must be reasonably related to some manifest evil which however need only be reasonably apprehended. It is also presumed that the legislative body investigated and found the existence of a situation showing or indicating the need for or desirability of the ordinance, and, if any stated facts known to be assumed, justifies the disputed measure this Court's power of inquiry ends.
Lighthouse Shores, Inc. v. Town of Islip, 41 N.Y.2d 7, 11-12, 390 N.Y.S.2d 827 (1976). This Court cannot make its determination as to the validity of the routes that vans are allowed to operate in or whether the vans can pick customers up at random or must pick up and deposit them at prearranged destinations, even though the Court may think it unwise or believe there is a better way to achieve the City's goals. The City of New York has been granted as part of its police powers the authority to regulate the public streets. VTL § 1640 (a) (5); Bakery Salvage Corp. v. City of Lackawanna, 24 N.Y.2d 643, [1969]. In its newly granted power allowing the City to regulate van services under Local Law no. 115, the City has exercised its police power to regulate traffic in the public streets to prohibit commuter vans from traveling on certain routes and to prohibit them from picking up and depositing passengers except at their homes and at non bus route stops. This court is not in a position to determine either the wisdom or the alternatives. While I may believe there is a better way to accomplish its ends I cannot determine beyond a reasonable doubt that there is no rational relationship between theis law and the City's police power to regulate traffic in the general public interest.
Nor can I say that the City's failure to continue the permanent status that the franchises had under State control violates State law. The grandfather clause in the enabling statute merely requires those commuter van franchises given permanent licenses by the State to continue to operate through the transition period. It clearly evinces the States intention for the City to chart its own licensing policy undisturbed by the prior licensing policy of the State. "Notwithstanding any other provision of law. Such local law or ordinance shall "(iii) make provisions for the continuation of operating authority for van services and other common carriers of passengers previously approved by the department which are in compliance with such operating authority through the conversion of such operating authority to operating authority issued by the city agency designated by the local law or ordinance adopted pursuant to this subdivision" (Transportation Law § 80[a][1]). It is obvious that this legislation permits the City of New York to limit the previous permanent licenses to operate that were granted by the State. This was the understanding of the State legislators most directly involved in the enactment of the legislation.
The criteria would not have to conform to the criteria in Transportation law section 153 [temporary licenses] and 1514 [permanent licenses] currently applicable to the grant by SDOT [State Department of Transportation] (bracketed material supplied).
Senator Goodman, Assemblyman Lafayette, Memorandum In Support; accord, Memorandum of Legislative of the City of New York
The plaintiffs also allege that the City's removal of permanent status to the grandfather franchises constitutes an unconstitutional taking of property and a denial of their liberty right to earn a living. The fault with this argument is that the plaintiffs' licenses to operate their franchises do not constitute a property right protected by the State and Federal constitutions; nor do their businesses fall under the liberty clauses of those constitutions. People v. Cook, 34 N.Y.2d 100, 356 N.Y.S.2d 259 (1974).
The right to do business has never been considered a fundamental right. On the contrary, in a number of cases, the Supreme Court has held that the government may regulate or even prohibit an occupation or business without running afoul of the due process clause, provided that the law bears a reasonable relation to a legitimate purpose (citations to Supreme Court decisions omitted).
Telegraph Savings and Loan Association v. Federal Savings and Loan Insurance Corp., 564 F. Supp. 880 (D.C. Ill. 1982). The power to condition or restrict private businesses or to prohibit their operation has specifically been recognized by our courts, especially with respect to public utilities. CNG Transmission Corp. v. Public Service Commission of the State of New York, 185 A.D.2d 671, 585 N.Y.S.2d 916 (1992). It cannot seriously be argued that mass transportation such as buses and vans are not public utilities which have been described as "[a] business or service which is engaged in regularly supplying the public with some commodity as electricity, gas, water, transportation or telephone or telegraph services." Black's Law Dictionary, p. 1232 (6th ed. 1990). This court recognizes the rational relationship between the grant of local control over these franchises and the City's exercise of its police power to regulate traffic on the public streets and the intention of the Enabling statute Local Law 115 is to give the City local control over these franchises so as to locally develop a program for the granting of licenses and the regulation of these programs. The City's approach to the grandfathered franchises clearly does this. Whether it does it in the best possible way or whether this judge would do it another way is not a basis for consideration. That choice is the City's and not the Court's.
The plaintiffs claim that because of the invalidity of the provisions requiring City Council approval of the Taxi and Limousine grants of franchises and the lack of permanency given to the granfathered franchises, the entire local law should be struck down because of the interrelationship of these provisions with the rest of the ordinance. They claim that the local law was meant to exist with all of these provisions or not to exist at all and that the City Council's intention was not to have the statute exist without the permanency to the grandfathered franchises and final City Council clauses. The grandfathered franchises permanency is no longer an issue since its constitutionality has been upheld in this decision. The correct analysis is to take a practical approach in determining whether the main focus of the statute is still viable in the absence of the call back provision and whether the City Council intended the statute to still be enforced without its being able to call back a determination of the Taxi and Limousine Commission. Association of Surrogates and Supreme Court Reporters v. State, 79 N.Y.2d 39, 580 N.Y.S.2d 153 (1992).
The question is in every case whether the legislature, if partial invalidity had been foreseen, would have wished the statute to be enforced with the invalid part excinded, or rejected altogether. The answer must be reached pragmatically, by the exercise of good sense and sound judgment, by considering how the statutory rule will function if the knife is laid to the branch instead of at the roots.
People v. Knapp 230 N.Y. 48, 60, 129 N.E. 202 (1920) [Cardozo, J.]. Where the severed portions of a statute are incidental to the main purpose of the statute, that portion may be removed with the rest of the statute remaining intact. Id. Some statutes cannot be enforced because it is clear that there could not be any intention to enforce them if a part were excised. The Mayor of the City of New York v. The Council of the City of New York, 235 A.D.2d 230, 651 N.Y.S.2d 531 (1st Dept. 1997) (where legislation concerning lag payments of statutes could not be enforced against 90% of employees because of collective bargaining agreement, Court held that the legislature did not intend to enforce it against the remaining 10% of non-union employees). Assoc. of Surrogates and Supreme Court Reporters, supra. Such is not the case here. The City Council has vigorously opposed invalidation of the statute even if the challenged portions of Local Law 115 were declared unconstitutional. The Court also notes that any analysis of the law indicates that the City Council's reservation of the final word on franchise approvals is incidental to the main purpose of Local Law 115, which is to turn control of the approval and regulation of commuter van franchises to local City authorities. This purpose is achieved with the removal of the City Council's power of approval of commuter van franchises.
Finally, the Court is troubled by the section in Local Law 115 that provides that the passage of 180 days without a hearing results in a denial of the license and that no provision of that law requires that reasons be given for the denial. It is fundamental to procedural due process that a licensee be given notice of adverse action by the licensing authority, and an opportunity to be heard. It must also be given reasons for an adverse decision. Re Claim of Kokoni, 110 A.D.2d 1023, 488 N.Y.S.2d 121 (3rd Dept. 1985); WNEK Vending Amusements Co. v. City of Buffalo, 107 Misc.2d 353, 434 N.Y.S.2d 608 (Sup.Ct. Cty. of Erie [1990]). While the hearing and notice may not necessarily take place before the adverse action, it must be offered very shortly thereafter. Dixon v. Lowe, 431 U.S. 105, 97 S.Ct. 1723 (1977). What process is due necessarily depends on the nature of the right under consideration, the exigency of the situation and alternate means available to the claimant of satisfying its needs. Matthews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893 (1976);Drolet v. N.Y.S. State Wagering and Racing Board, 115 Misc.2d 7, 453 N.Y.S.2d 61 (1982); cf. Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011 (1970) The termination of a license should require greater protection than a first time application for a license or a request for a modification of a license in determining what process is due.
The model of a full evidentiary hearing is not required in every circumstance. So long as the plaintiffs are given a full and fair opportunity to present their case, confrontation and cross examination may not be necessary. A full and fair opportunity to present its case is usually all that is necessary.Taddonio v. Heckler, 609 F. Supp. 689, 694 (E.D.P. 1985). These requirements are not only necessary for administrative law purposes. The State has set up a procedure under Article 78 of the CPLR for a limited challenge to administrative determinations. Such a proceeding cannot be carried on without the procedural safeguards that have been set forth
To sum up, Local Law 115 (1993) is valid and enforceable but only in accordance with this decision, and Local law 83 (1997) is void as moot. This matter is remanded to the City defendants in order that the Taxi and Limousine Commission may adjudicate the plaintiffs individual claims consistent with the procedural standards set forth supra.