NEW YORK --The Taxicab Service Association, comprised of credit union lenders that finance yellow taxi medallions, filed suit Friday in state court seeking to overturn the “HAIL Act” — the city law that embodies Mayor Bloomberg’s 2011 plan to create a new class of up to 18,000 taxis authorized to pick up street hails in Brooklyn, Queens, the Bronx, Staten Island and much of Manhattan, in direct competition with the City’s iconic yellow cabs, and that authorizes the mayor to approve 2,000 new yellow cab medallions.
The credit union group alleges that the HAIL Act violates long-standing State constitutional principles that prohibit the State and the Mayor from interfering in the New York City Council’s regulation of the local taxi industry; that, if implemented, the new law will devalue yellow taxi medallions.
The suit, filed in New York State Supreme Court, New York County, alleges the Mayor’s Taxi and Limousine Commission has illegally begun to implement the Act without a proper review of the potentially disastrous environmental impact of 18,000 street hail livery vehicles on the City’s air and noise quality, traffic congestion, and neighborhood character.
The livery street hail law is illegitimate and irresponsible,” said Richard Kay, president of Lomto (League of Mutual Taxi Owners) FCU and head of the lender’s group. “We and other industry representatives tried mightily to work with the mayor’s representatives and the TLC to craft an acceptable piece of legislation. The taxi industry was built on the backs of our member not-for-profit credit unions and other lenders, and by the sweat of hard-working, largely minority medallion owners and drivers. Now what are we left with?”
The suit alleges that the City has pocketed hundreds of millions of dollars through yellow cab medallion auctions by making representations of yellow cab street hail exclusivity, and that medallion lenders’ and owners’ investments are now at risk of massive devaluation as a direct and foreseeable result of the Mayor’s borough street hail program.
In its suit, the credit union group alleges that the HAIL Act violates the New York Constitution’s “Home Rule Law,” which limits State intervention in New York City’s property, affairs and government; and the “Takings Clauses” of the U.S. and New York Constitutions, which prohibit the State from financing public policy by depriving medallion owners and lenders of their private property, as well as various state and city laws which require formal review of the potential environmental impact of 18,000 street-hail vehicles.
