Nassau & Suffolk Cnty. Taxi Owners Ass'n, Inc. v. State

336 F.Supp.3d 50

NASSAU & SUFFOLK COUNTY TAXI OWNERS ASSOCIATION, INC., Lindy's Fleet Service, Inc., Eola Management, Corp. d/b/a All Island Transportation of Mineola, David Bros., Inc. d/b/a David Enterprises, North Shore Transportation Services, Inc., LI Yellow Transportation, Inc., and Colonial Transportation of L.I., Inc., Plaintiffs,

v.STATE of New York, Andrew M. Cuomo, Individually and in his Official Capacity as Governor of the State of New York, and Theresa L. Egan, Individually and in her Official Capacity as Executive Deputy Commissioner of the New York State Department of Motor Vehicles, Defendants.

CV 17-3839 (AKT)

United States District Court, E.D. New York.

Signed September 28, 2018

Karen Svendsen, Long Tuminello, Bay Shore, NY, William John Keahon, Keahon, Fleischer & Ferrante, Jonathan Brian Manley, Law Office of Jonathan Manley, Hauppauge, NY, for Plaintiffs.

Susan M. Connolly, Robert Edward Morelli, N.Y.S. Office of the Attorney General, Hauppauge, NY, for Defendants.

MEMORANDUM AND ORDER

A. KATHLEEN TOMLINSON, Magistrate Judge:

I. PRELIMINARY STATEMENT

The Nassau and Suffolk County Taxi Owners Association, Inc. ("NSTOA"), along with its members, licensed taxicab companies Lindy's Fleet Service, Inc., EOLA Management, Corp., d/b/a All Island Transportation of Mineola, David Bros., Inc., d/b/a David Enterprises, North Shore Transportation Services, Inc., and Colonial Transportation of Long Island, Inc., (collectively, "Plaintiffs") bring this action against the State of New York, Governor Andrew Cuomo, and Commissioner of the New York State Department of Motor Vehicles Theresa Egan (collectively, "Defendants"). Plaintiffs challenge the constitutionality of recently enacted legislation authorizing the Department of Motor Vehicles ("DMV") to license and regulate transportation network companies ("TNC") such as Lyft and Uber. Plaintiffs allege that New York's legislative scheme "has created a two-tiered system that violates Plaintiffs' rights to Equal Protection without a rational basis for such distinction" by creating an "arbitrary distinction between TNCs and other for-hire vehicles." Plaintiff's Amended Complaint ("Am. Compl.") [DE 38] ¶ 5.

Presently before the Court¹ is Defendants' motion to dismiss Plaintiffs' Amended Complaint, pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(b)(7). See generally Defendants' Memorandum in Support of their Motion to Dismiss ("Defs.' Mem.") [DE 48-2]; Defendants' Reply Memorandum ("Defs.' Reply") [DE 48-1]. Plaintiffs oppose the motion on a variety of grounds. See generally Plaintiffs' Memorandum in Opposition ("Pls.' Opp'n.") [DE 46]. For the reasons set forth below, Defendants' motion to dismiss the Amended Complaint is GRANTED.

II. BACKGROUND

A. Factual Background

The Court takes the following facts from Plaintiffs' Amended Complaint and the documents attached to it, and accepts Plaintiffs' well-pleaded factual allegations as true for purposes of the instant motion. Aegis Ins. Servs., Inc. v. 7 World Trade Co., L.P. , 737 F.3d 166, 176 (2d Cir. 2013). However, the Court does not credit or consider conclusory assertions or formulaic recitations of the legal elements of a claim. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

The Court notes that Plaintiffs have attached as an exhibit to their Amended Complaint the text of the statutory provision at issue in this case, Article 44-B of the New York Vehicle and Traffic Law ("Article 44-B"). See generally Am. Compl, Ex. 1. Although not explicitly incorporated into the body of the Amended Complaint, the Court may properly consider the text of Article 44-B and the Session Laws enacting it -- neither of which is disputed -- as attachments to Plaintiffs' pleading and as matters of legislative record. Romero v. Bestcare Inc. , No. 15-CV-7397, 2017 WL 1180518, at *3 (E.D.N.Y. Mar. 29, 2017) ("On a motion to dismiss, the court may consider documents attached to the complaint, documents incorporated into the complaint by reference and facts of which the court may take judicial notice.") (citing Kalyanaram v. Am. Ass'n of Univ. Professors at N.Y. Inst. of Tech. Inc. , 742 F.3d 42, 44 n.1 (2d Cir. 2014) ); Oneida Indian Nation v. New York, 691 F.2d 1070, 1086 (2d Cir. 1982) (holding that on a Rule 12 motion, judicial notice of "law, legislative facts, or factual matters that are incontrovertible" is appropriate).

1. Article 44-B of the Vehicle and Traffic Law

On April 10, 2017, Governor Cuomo signed into law Assembly Bill 3009C/Senate Bill 2009C as Chapter 59 of the Laws of 2017, which implemented parts of the 2017-18 New York State budget. Am. Compl. ¶ 1. Part AAA of Chapter 59 created a new Article 44-B of the New York Vehicle and Traffic Law ("VTL") regulating TNC services, which include ride-sharing services provided by companies like Uber and Lyft. Id. ; see 2017 N.Y. Sess. Laws 94. In the words of the legislature, Article 44-B is intended "to ensure the safety, reliability, and cost-effectiveness of transportation network company (TNC) services within the state of New York and to preserve and enhance access to these important transportation options for residents and visitors to the state." N.Y. Sess. Laws 93-94. To accomplish this, Article 44-B creates a statewide TNC licensing scheme administered by the DMV. See N.Y. VEH. & TRAF. LAW § 1692(2)(a). The legislation also establishes requirements for TNCs relating to insurance, id. §§ 1692(2)(a), 1693, 1695, how fares are communicated and charged, id. §§ 1692(4)-(8), driver and vehicle eligibility, id. §§ 1696, 1699, and maintenance of records, id. §§ 1697, 1698, among other things.

Article 44-B defines a "TNC vehicle" as a vehicle

(a) used by a transportation network company driver to provide a TNC prearranged trip originating within the state of New York; and

(b) owned, leased or otherwise authorized for use by the transportation network company driver;

(c) such term shall not include:

(i) a taxicab, as defined in section one hundred forty-eight-a of this chapter and section 19-502 of the administrative code of the city of New York, or as otherwise defined in local law;

(ii) a livery vehicle, as defined in section one hundred twenty-one-e of this chapter, or as otherwise defined in local law;

(iii) a black car, limousine, or luxury limousine, as defined in section 19-502 of the administrative code of the city of New York, or as otherwise defined in local law;

(iv) a for-hire vehicle, as defined in section 19-502 of the administrative code of the city of New York, or as otherwise defined in local law;

(v) a bus, as defined in section one hundred four of this chapter;

(vi) any motor vehicle weighing more than six thousand five hundred pounds unloaded;

(vii) any motor vehicle having a seating capacity of more than seven passengers; and

(viii) any motor vehicle subject to section three hundred seventy of this chapter.

N.Y. VEH. & TRAF. LAW § 1691(1). Article 44-B defines a "transportation network company," or "TNC," as

a person, corporation, partnership, sole proprietorship, or other entity that is licensed pursuant to this article and is operating in New York state exclusively using a digital network to connect transportation network company passengers to transportation network company drivers who provide TNC prearranged trips.

Id. § 1691(3). The same section of Article 44-B in turn defines a "TNC prearranged trip" as follows:

(a) "TNC prearranged trip" or "trip" means the provision of transportation by a transportation network company driver to a passenger provided through the use of a TNC's digital network:

(i) beginning when a transportation network company driver accepts a passenger's request for a trip through a digital network controlled by a transportation network company;

(ii) continuing while the transportation network company driver transports the requesting passenger in a TNC vehicle; and

(iii) ending when the last requesting passenger departs from the TNC vehicle.

(b) The term "TNC prearranged trip" does not include transportation provided through any of the following:

(i) shared expense carpool or vanpool arrangements, including those as defined in section one hundred fifty-eight-b of this chapter; and

(ii) use of a taxicab, livery, luxury limousine, or other for-hire vehicle, as defined in this chapter, section 19-502 of the administrative code of the city of New York, or as otherwise defined in local law.

Id. § 1691(6).

2. Plaintiffs' Allegations

Plaintiffs contend that Article 44-B imposes a less onerous regulatory burden on TNCs than the regulatory burden labored under by Plaintiffs and others in the taxi industry, and that this disparity constitutes a violation of Plaintiffs' equal protection rights. See generally Am. Compl. ¶¶ 9-42. As the Amended Complaint avers,

Plaintiffs and other similarly situated local Nassau and Suffolk for-hire transportation companies will still be subject to the extensive costs and time consuming licensing procedures set forth in the plethora of regulations required in order to provide the exact same services to passengers. By imposing more onerous burdens on the taxi industry, as compared to TNCs, this Law is in violation of the Equal Protection Clause of the Constitution as both businesses engage in the same business model – for-hire transportation and as such the same are similarly situated.

Id. ¶ 9. As to the purported similarities between TNC services and the for-hire services provided by Plaintiffs, the Amended Complaint asserts that the "for-hire transportation services provided by Plaintiffs are pre-arranged, and regulated through the dispatching of [ ] vehicles. Riders request transportation services, are quoted a fee, and a vehicle is dispatched .... This is precisely the same manner services are offered by the TNCs, however, one ride is ordered by a voice call ... and the other by utilizing [an] App." Id. ¶ 12.

The majority of Plaintiffs' Amended Complaint is focused on highlighting the...