REPLY MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND IN OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Preliminary Statement

In their most recent memorandum, defendants’ contentions take on an Alice-In-Wonderland quality.  The TLC Chair claims sweeping powers from the City Charter and at the same time ignores what are, with respect to taxi regulation, the charter’s first words: “There shall be a New York city taxi and limousine commission.” (NYC Charter § 2300)   She claims additional authority from a general provision of the New York City Administrative Code, yet rejects the specific provision of the code that limits her authority as a mere suggestion—and an unwelcome one at that.  She charges taxi drivers with violating Rule 2-50B, but then says the penalty for that violation comes from another rule, TLC Rule 2-61.  She says drivers get a fair hearing before TLC judges, but then says that it hardly matters because she, acting as a quasi-appellate judge (adding to her roles as legislator and prosecutor) is free to reject their judgments in any event. 

In fact, the law invests power to revoke licenses in the Taxi and Limousine Commission, not in the Mayor or the TLC Chair.  The law also proscribes that authority.   The New York City Administrative Code states clearly and specifically the penalties for a service refusal, as do the TLC’s own regulations.  The TLC Chair may not employ vague directives regulations to avoid specific statutory language.   Nor can she avoid substantive statutes by citing recently adopted procedural rules.   Any TLC rules inconsistent with the Code are, per the Code, of no force and effect.

At one point, defendants accuse plaintiffs of “exalt[ing] law over substance.” (Def. Mem. p.11).  This is something plaintiffs would never conceive of doing.  What plaintiffs exalt is law over tyranny.

The Mayor and the TLC Chair Illegally
Bypassed the Taxi and Limousine Commission

The New York City Taxi and Limousine Commission has authority to regulate the taxi industry in accordance with law.  Defendants concede, as they must, that the Taxi and Limousine Commission never voted—indeed was never consulted— to enact Operation Refusal. (Def. Mem. p.10-11)  They then claim, “the Commissioner acted pursuant to authority granted to her by the Charter.”  This statement is doubly and dangerously false.

First, the TLC Chair (defendants refer to her as “the commissioner,” but she is, in fact one of seven commissioners) acted, if at all, in only a ministerial sense.  The Mayor, according to his own statement, “directed the New York City Police Department and the Taxi and Limousine Commission” to implement Operation Refusal.  (See Mayor Giuliani’s Radio Address of November 14, 1999, Ackman Decl. Exh. 4.)[1]  This fact is critical because nothing in the Charter or the New York City Administrative Code gives the Mayor any authority to direct taxi policy or to direct the TLC.   Yet without legal authority, the TLC has suspended, at the most recent count by defendants’ counsel, 254 taxicab drivers based on refusal allegations.  At least 58 have had their licenses revoked and defendants say they do not even know how many remain on suspension. (See Response to Plaintiffs’ first set of Interrogatories Nos. 3, 15; Ackman Supp. Decl. Exh. 5)[2]

The City of New York in adopting the Charter determined that there should be a commission and a chairperson of that commission.  The chairperson has supervisory authority over the “organization of its office… [and shall] assign and superintend … officers and employees.” (NYC Charter § 2301(c))  But it is the commission as a whole that sets “overall public transportation policy governing” taxis and other for-hire vehicles. (NYC Charter § 2300)  It is the commission as a whole that regulates “[t]he issuance, revocation [and] suspension of [taxicab driver] licenses.” (NYC Charter § 2303(b)(5))  Yet the commission was bypassed in enacting Operation Refusal.

The Charter itself rejects this result.  Not only does it say that the whole commission shall set revocation and suspension policy, it says in specific terms how the commission shall act.  The Charter, § 2301(e), declares, “A majority of the whole number of members of the commission then in office shall constitute a quorum for the transaction of business.”  It goes on: “The commission shall have power to act by a majority of its members.”

Here, the “commission” (or, more accurately, the Mayor and the Chair alone, purportedly on behalf of the commission) acted several times, but never “by a majority of its members.”  They announced Operation Refusal and a new policy of summary suspensions and taxicab confiscations.  They announced a new policy of revocations for a first refusal offense.  They instructed its judges how to adjudicate Operation Refusal cases.  But the commission authorized none of these actions.

The Chair excuses herself from the duty to seek a commission vote and offers two theories for her right to do so.  First, she cites her authority to “superintend” under § 2301(c) and pretends it trumps the rest of the Charter provisions, which she ignores.  Then she suggests she was acting in an emergency that required her to “take immediate action on behalf of the Commission.”[3]  (Def. Mem. p.11)

Both theories are wrong, the first because of the law, the second because of the facts.  The Charter lays out a deliberate scheme that details how commissioners are to be appointed, by whom, the length of their terms and the jurisdiction and duties of the commission.  If the chair’s role as day-to-day administrator can justify any action she deems necessary in her “broad discretion” then the entire scheme would be now and forever devastated.   Nothing in the language of the Charter suggests she has any of the discretion she now claims.  There would, if her theory were correct, be no need for rules on commission votes, because there would be no need for votes.  Indeed, McGrath-McKechnie’s and the Mayor’s actions have written the commission out of the law altogether.

There is, moreover, no “emergency” here.  The problem that Operation Refusal purports to respond to—race-based refusals-- is longstanding .[4]  Indeed, in 1992, more than seven years prior to the announcement of Operation Refusal, the then TLC chairman wrote a detailed memorandum discussing the problem, which was nothing new then. (See Ackman Supp. Decl. Exh. 7)  There is nothing in the record to suggest that the Chair could not have called a meeting of the commission in November (though the law, as will be discussed below, restricts the commission’s power in this area, also).  Even if a November meeting was impossible for some reason, the commission could have authorized the action at its next regularly scheduled monthly meeting.  But the commission never acted. It never authorized Operation Refusal or its illegal procedures and penalties.    

When the commission was, for the first time in June 2000, called upon to ratify taxi driver license revocations made in the name of Operation Refusal, the full commission not only failed to support the Chair—it actually rejected her policy—as had the independent OATH courts. (See Pl. Mem pp.8-10)  As Commissioner Elias Arout summarized what turned out to be unanimous opposition:

Now it clearly states in language—section 19-507(b) is clear and unambiguous.  There is a mandatory monetary penalty for 200 to $350 for the first offense, mandatory monetary penalty for 350 to $500, and a discretionary suspension up to 30 days  for the second offense, and a mandatory license revocation for three or more incidents as a refusal within 36 months.

Clearly, had the City Council wished to provide the license revocation for the first instance of refusal it would have done so. I don’t know if I’m right or wrong here, but I am totally confused.

(Ackman Supp. Decl. Exh. 1)

We submit that Commissioner Arout was correct in everything he said, except for one thing—he was not confused.  He read the law correctly in spite of the best efforts of the TLC lawyers to create confusion.

Now the New York City Law Department, rejecting the stated position of the Taxi and Limousine Commission, is pressing the same technique.  In doing so, it contorts the law like a yoga master.  In their brief, defendants state, “The notion that the Commission had intended that the Commissioner have authority to summarily suspend the licenses of taxicab drivers in the interest of the public is confirmed by the adoption of Rule 8-16(a).”  (Def. Mem. pp. 11-12, citing a procedural rule that did not go into effect until almost two months after Operation Refusal was announced.)  In fact, the commission indicated the opposite intent.

There is no need to infer intent from the adoption of TLC regulations, regulations that, as discussed below, cannot in any event override the statute.  We have the commissioners’ own words.  More important we have their actions—each time they were asked to revoke a driver’s license they voted not to do so because they knew the law does not permit it.   How does the Chair come to grips with the commission’s rejection of her dictate?  She ignores it.

But the fact that the commission never voted on Operation Refusal by itself makes its policies illegal.  The commission has the power to act by a majority of its members—five votes.  Without those votes, the TLC has no power to act.  See Town of Smithtown v. Howell, 31 N.Y. 2d 365, 339 N.Y.S. 2d 949 (1972).  Thus, the Mayor and the TLC’s actions in enforcing Operation Refusal are all illegal.

The TLC Chair Systematically Violated New York City Law

Plaintiffs maintain, along with the TLC commissioners, that Section 19-507 of the New York City Administrative Code governs this case.  Everything the TLC does, every action, every regulation, must comply with the statute passed by the City Council.   Defendants now argue (1) that  § 19-507 of the Code provides “minimum penalties” and that it is up to them to determine the maximum. (Def. Mem. pp.3-4); and (2) that they are proceeding under TLC Rule 2-61(a)(2), which, they assert, “operates independently” from TLC Rule 2-50B, which they charge alongside TLC Rule 2-61(a)(2) in every case. (Def. Mem. pp.17-18)  They contend also that they have authority from § 19-505(l), which, in their view, overrides § 19-507, and from a variety of the agency’s own regulations. (Def. Mem. pp.5-6)

Even a cursory examination of Code § 19-507 shows the first point to be false.  Its title is “Mandatory penalties.”  It states that upon a finding that a driver refused service to a passenger “without justifiable grounds” the “commission shall fine” the driver.  Then it lists minimum and maximum fines and penalties the commission may impose for the first, second and third offense (revocation only on the third).  There is not a single word in the statute that supports or suggests that these are minimum—as opposed to mandatory-- penalties.

Because TLC Rule 2-50(b) and its related penalty provision, TLC Rule 2-87 (headed “penalties mandated by local law”) mirrors the statute, to get the result she wants, the TLC Chair must find some other rule and charge drivers with violating that one.  They settled on Rule 2-61(a)(2).  Then they say something that is at the same time almost completely incoherent legally and patently false factually: “Plaintiffs argue that the penalties set forth in Section 19-507(b) cannot be superseded by the application of Rule 2-61(a)(2).  The defendants do not dispute this point.  On the contrary, the defendants interpret the provisions of Rule 2-61(a)(2) to operate independently.” (Def. Mem. p.18, citation omitted) 

First, the whole basis for defendants’ argument in this motion (and this entire action) is that Rule 2-61(a)(2) does supersede the statute passed by the City Council, though they are correct in their admission that it may not.  (They also argue, of course, that the statutory penalty scheme is a suggestion rather than a rule).  Second, if the two rules “operate independently,” how come the TLC charges them in tandem, not just in some cases, or most cases, but in every case?   This argument is another example of defendants using a word – independently—to mean just what they choose it to mean.

In Mr. Padberg’s case, in Mr. Ahmed’s case, in every case concerning the plaintiffs in Baig v. Giuliani, (00 Civ. 4117, filed as a related case), the TLC prosecutors charged a violation of both rules.[5]  The argument is also belied by the memorandum dated February 18, 2000, from the TLC’s chief judge, Lisa Rana, to All Administrative Law Judges: “Please be advised that, upon a finding of a refusal, the Commission’s policy requires that both the Rule 2-50B and the Rule 2-61A2 violations be sustained.” (Ackman Decl. Exh. 7) 

In her written deposition, ALJ Rana was asked a series of questions about the February 18 Memorandum.   While most of her answers were unresponsive or evasive, a few are telling.  While she claims “no one” told her to write the memorandum, she admits McGrath-McKechnie “articulated the policy” and then claims “insufficient knowledge” to state the justification for it.  She says she discussed the policy with Assistant Commissioner of Adjudications Joseph McKay, but allows only that she “informed him that I was issuing the memorandum.”   She also admits discussions with Matthew Daus, the TLC’s general counsel, but states nothing more about what was said.  She goes on to say she never sought a legal opinion as to the policy and that she has “insufficient knowledge” to say whether anyone else in the TLC sought an opinion.  She says at least one TLC ALJ objected to the policy, but that none violated it.   

Thus, the TLC’s judges, per Rana’s directive, ruled that if one rule was violated, so was the other.  We cite John Padberg’s case as one example of hundreds, where the TLC ALJ ruled: “With regard to the Rule 2-61A2 violation, it is the policy of the Commission that a finding of a service refusal is sufficient to establish that the respondent acted against the best interest of the public. Accordingly, I find and conclude that Respondent is guilty of violating Rule 2-61A2.”

In actual fact, the two rules were enforced and interpreted not “independently,” but in lockstep.  The TLC Chair’s opposite contention is dangerous and bizarre.  The reason she offers it, of course, is so she can use the penalty scheme of TLC Rule 2-61(a)(2), instead of the penalty that applies to TLC Rule 2-50(b), the rule that is actually being violated. 

In its decision on plaintiffs’ motion for a preliminary injunction, this Court did rule that the penalty schemes of the two TLC rules could coexist.  This ruling on a preliminary injunction motion is ordinarily tentative and is not, of course, law of the case and does not bind the Court on subsequent rulings. Goodheart Clothing Co., Inc. v. Laura Goodman Enterprises, Inc., 962 F.2d 268, 274 (2d Cir. 1992).  More important, even if the conclusion holds with respect to the rules,[6] it is clearly not true with respect to the statute.  There is no contradictory or parallel rule with which New York City Administrative Code § 19-507 must be read to coexist.   There is no statute that authorizes the TLC to revoke a taxi driver’s license for acts “against the best interest of the public.”

There is, however, a statute that restricts the TLC’s authority.  Section 19-503(b) states: “No rule or regulation promulgated subsequent to the effective date of this local law may be inconsistent with or supersede any provision of this local law….”  It provides also that any rule inconsistent with the Code “is of no legal force and effect.”  This provision states a general rule of administrative law and construction.   It applies whenever there is conflict between a rule and an underlying statute in both state and federal courts: rules passed by agencies must bow to statutes passed by legislators.  Chemical Mfrs. Ass’n v. Natural Resources Defense Council, 470 U.S. 116, 126 (1985); Matter of Trump-Equitable Fifth Ave. Co. v. Gliedman, 57 N.Y.2d 588, 593, 457 N.Y.S.2d 466, 469 (1982). 

The force of § 19-503(b) is unremarkable and applies nearly universally.  Nevertheless, defendants say it does not apply to them.  They strain instead to interpret the statute (while ignoring the general principle) as concerning only some provisions of the local law.  They cite without explanation the legislative history of the statute to suggest its application is limited.  The legislative history, however, says no such thing.  

Defendants ignore, meanwhile, contradictory legislative history-- a Historical Note to § 19-512.1, which states: “[T]he Council finds that certain of the rules promulgated in the past several months by the New York City Taxi and Limousine Commission, such as those that modify the disciplinary measures that may be imposed against taxicab and for-hire vehicle drivers … are onerous.”  More important, defendants never come to terms with § 19-503(b) itself, which refers to “any provision of this local law” and “any rule or regulation in effect on the effective date of this local law.” (emphasis added)  While the provision may have been enacted in response to a particular problem, its force is general and certainly applies here.

The TLC Chair, while rejecting the specific limits of § 19-507, invokes § 19-505(l) as the source of her authority to revoke licenses.  It is telling that the TLC Chair makes this argument only in this action.  It never proceeded under this rule in front of the OATH judges, who surely would have rejected the idea.  It never even charged drivers under this provision before TLC judges, who almost surely would have accepted it. 

Section 19-505(l) is a general statement under the heading “general provisions for the licensing of drivers.” The previous subsections concern the requirements that a taxicab driver have a license, the requirements for obtaining one, the need for a photo to be affixed, and the application fee.   The argument that § 19-505(l) permits revocations for a first refusal proves much too much.  First, the TLC Chair is essentially claming the right to revoke a taxicab driver’s license for the violation of any TLC rule. If this argument were at all valid, she could revoke if a driver drives a shift longer than 12 hours (See TLC Rule 2-23).  She could revoke if the driver failed to keep the interior of his cab clean—or if a brake light goes out. (See TLC Rule 2-26).  She could revoke if a driver violated any traffic rule—illegal turn, speeding, failure to signal-- even one time. (See TLC Rule 2-21, incorporating New York State and City traffic laws by reference) 

The law does not permit this absurd result.  There is one statute that specifically governs refusals, and sets penalties, § 19-507 of the NYC Administrative Code.  There is one regulation that does likewise, TLC Rule 2-50(b).  This result is dictated by the longstanding principle of statutory construction that where there is a general rule and a particular rule in the same statute, the particular rule governs.  People v. Lawrence, 64 N.Y. 2d 200, 204, 485 N.Y.S.2d 233, 236 (1984); People v. Mobil Oil Corp., 48 N.Y.2d 192, 200, 422 N.Y.S.2d 33, 38 (1979); see also United States v. LaPorte, 46 F.3d 152, 156 (2d Cir. 1994) ("Under long-standing principles of statutory construction, a general section of a statute must give way to a specific one"); Weiss v. Cigna Healthcare Inc., 972 F. Supp. 748, 754 (S.D.N.Y. 1997).  

At various times in their brief, defendants cite other TLC rules as authority for their actions.  They cite TLC Rule 8-14, a procedural regulation (“The Commission may institute proceedings…”) that authorizes the TLC to bring an action, but sanctions no penalty.  They cite TLC Rule 8-16, which provides for emergency suspensions, but not revocations.  But this is not a game for clever lawyers.  Men’s livelihoods, as this court has noted, are at stake.  If the TLC wants to revoke a taxi driver’s license, it needs a regulatory basis for that action and a statutory basis for that regulation—before the fact, not after.  In enforcing Operation Refusal, the TLC Chair had neither.  

As the TLC Chair would have it, there would be no need for the penalty scheme set forth by the New York City Code, or by the TLC’s own rules.  The rules have a schedule of fines and penalties relating to the various offenses, most of which are well short of revocation.   The chair may, in her view, override all of it at her discretion—as she has already overridden the clear mandate of  § 19-507 and TLC Rule 2-50(b).  But the statute she invokes is totally inadequate for her designs.

By Itself, TLC Rule 2-61(a)(2) Is Unconstitutionally Vague

At the end of the day, the TLC Chair bases Operation Refusal on TLC Rule 2-61(a)(2).  This rule does not speak to refusals.  It cannot override a statute with which it is inconsistent.  And standing alone, its text—“acts… against the best interest of the public”—has no meaning, certainly no enforceable meaning. 

Thus, as noted above, TLC prosecutors in Operation Refusal revocation cases always charge TLC Rule 2-61(a)(2) in conjunction with TLC Rule 2-50(b) violations.  By policy, the TLC prosecutors urge and TLC ALJs judges rule that finding a violation of the latter necessitate finding a violation of the former.  This pattern is a tacit admission that they could not seek revocation of a license based on TLC Rule 2-61 alone.  Applied alone, the provision they rely to impose revocation-- a single phrase read out of context-- is unconstitutionally vague. 

As defendants state in their memorandum, “Under due process jurisprudence, local laws and regulations must be of sufficient clarity to give individuals a reasonable opportunity to know what is prohibited thereby, so that they are ‘free to steer between lawful and unlawful conduct.’” (citing Grayned v. City of Rockford, 408 U.S. 104, 108-109 (1972)).  Defendants have two problems with “clarity.”  First, TLC Rule 2-50(b), and the statute on which it is based, clarifies adequately the conduct forbidden, but it also makes crystal clear the penalty for violation.  Second, TLC Rule 2-61(a)(2) has a harsher penalty, but the rule itself—at least the part of the rule defendants rely on— is too vague, outlawing “any willful act of omission or commission which is against the best interests of the public.”  It is indeed, hard to imagine any phrase—actions that are bad; things that seem wrong—that is less precise.

Thus, in New York Public Interest Research Group v. Village of Roslyn Estates, 498 F. Supp. 922, 926 (E.D.N.Y. 1979), the court held the same language to be unconstitutionally vague.  In that case, an ordinance authorized the mayor to issue a license for soliciting if the village board was “’satisfied that the purpose of the solicitation was in the best interest of the Village and the public.’”  The court ruled the provision void and unconstitutional because “the decision to grant a license rests not on the application of definitive standards but rather solely on the unbridled discretionary determination of the Village.”  See also Bright Lights Inc v. City of Newport, 830 F. Supp. 378, 388 (E.D. Ky 1993) (holding void a statute that barred entertainment “obnoxious to the morals and general welfare of the public.”).

The cases defendants cite are not to the contrary.  In Fernandez v. New York City Taxi and Limousine Commission, 193 A.D.2d 423, 597 N.Y.S.2d 337 (1^st Dep’t 1993), the court ruled in a case where the driver “harassed, made sexual comments to and grabbed the breast of a female passenger.”  This is criminal conduct of the type the statute was written to prevent.   New York Committee for Taxi Safety v. New York City Taxi and Limousine Commission, 177 Misc. 2d 855, 865, 677 N.Y.S. 2d 449 (Sup. Ct. N.Y. Co.), aff’d as modified, 256 A.D.2d 136 (1^st Dep’t 1993), was a facial challenge to a different regulation in which the trial court simply cited Fernandez and said the language was not vague on its face.

A regulation is void for vagueness if it is so indefinite that people cannot understand what it prohibits or if it does not include minimal guidelines to govern its enforcement. Kolender v. Lawson, 461 U.S. 352, 357-58 (1983).  TLC Rule 2-61(a)(2) should be read in context to speak to actions that are criminal in nature. (See n.6 above)  But the TLC Chair rejects that reading, offering no alternative apart from saying it means the same thing as TLC Rule 2-50(b).  The point is not that a driver would not know that a bias refusal is wrong.  The point is that he would have no reason to expect he violated TLC Rule 2-61(a)(2) as opposed to TLC Rule 2-50(b), which directly relates to the conduct in question.  If the two rules mean the same thing, they should have the same penalty.   If, on the other hand, it is read apart from TLC Rule 2-50(b), it is so vague that it violates due process.

The Procedures Afforded by the TLC are Unconstitutional and Unfair and, in Any Event, Cannot Be Ruled Lawful on Summary Judgment

Plaintiffs never moved for summary judgment as to the procedures followed pursuant to Operation Refusal.  This Court has already held in response to plaintiffs’ preliminary injunction motion that the procedures employed violate due process, and in their cross motion, defendants offer no reasons to revisit this finding.  They simply state the same test and conclude that they have now passed it.  But the procedures remain unconstitutional. 

Moreover, the TLC, according to testimony by TLC Chief Judge Rana, has ignored this Court’s opinion and has not changed its procedure at all.  In her written deposition, ALJ Rana was asked, “Has the TLC changed any policy or procedure in response to the [Court’s] order and memorandum … dated August 14, 2000?”  Her response: “I have not been advised of any policy changes. At this time.”[sic] (See Ackman Supp. Decl. Exh. 2) 

This Court has found that the TLC’s procedures are inadequate and unconstitutional on their face.  Taxi drivers are still given no notice or hearing before being denied their licenses.  Summary suspensions still deprive taxi drivers of the opportunity to earn a living.  The suspensions are still of an indefinite duration.  There is still a substantial risk of an erroneous deprivation.  There is still no constitutional emergency.  Defendants have cited no reason for the Court to upset these findings. 

Even if the Court were to reconsider, the procedures could not be judged adequate as a matter of law on summary judgment because many facts are still in dispute and others have yet to be discovered. See Fed. R. Civ. P. 56(c) and (f).  There are, on the other hand, many facts to suggest the procedures are even more unfair than the Court has found already.

At the heart of due process is the right to a fair hearing conducted by an impartial tribunal. “Not only is biased decisionmaking constitutionally unacceptable, but ‘our system of law has always endeavored to prevent even the probability of unfairness.’” Withrow v. Larkin, 421 U.S. 35, 47 (1975) (citations omitted).

As the court has stated, the fact that a single agency provides both the prosecutors and the judges is not itself a due process violation.  There is a “presumption of honesty and integrity in those serving as adjudicators; and it must convince that, under a realistic appraisal of psychological tendencies and human weakness, conferring investigative and adjudicative powers on the same individuals poses such a risk of bias or prejudgment that the practice must be forbidden.” Id.  Here, plaintiffs have not been afforded any meaningful discovery.  Yet there is evidence on the limited record that the TLC tribunals are biased, in fact, and are set up as to permit and encourage what the Withrow Court called a “probability of bias.” 

There is Evidence of Bias as to Every Aspect
of the TLC’s Administration of Operation Refusal

Indications of bias exist as to each and every part of the TLC system of justice, from arrest, to trial, to appeal.  First, as stated in footnote 4 above, when the TLC and the NYPD both conducted “stings” in pursuit of Operation Refusal.  Though they were enforcing the same rules on the same streets on the same day as the NYPD, the TLC inspectors were dramatically more likely than were police officers to find bias.  The inspectors conducted just 9 percent of the tests (161 out of 1761), but they found 55 percent of the violations and 67 percent of the bias refusals.  While conducting the sting, TLC inspectors also wrote 50 summonses for other offenses to cabbies they stopped.  NYPD officers wrote 11.

TLC Inspectors, not NYPD officers, accused the named plaintiffs in this action and, on information and belief, all of the plaintiffs in Baig.  Plaintiffs’ counsel believes that TLC prosecutors rely on inspectors rather than police officers in nearly all revocation cases.

It is also noteworthy that only half the taxi drivers who were suspended for service refusals requested summary suspension hearings, according to the TLC. (See Ackman Supp. Decl. Exh. 5)  This fact indicates that drivers are not informed of their rights.  It may also indicate that drivers asked for a hearing and were not afforded one. 

Once a refusal case—whether bias or destination—goes to trial on the merits, the outcome hinges on the testimony of the inspector against that of the driver.  By their nature, there will rarely be any other witnesses or other evidence.  Thus it is critically important that the inspectors testify truthfully.  But if they are more inclined to detect the crime, it is at least possible that they will be more likely to testify as to insure a conviction, denying all ambiguity in the situation.  Worse, for the drivers, Operation Refusal cases always involve two inspectors and just one driver.

Given the natural psychological tendencies of witnesses and the simple desire to win, it is crucial in a trial based purely on the credibility of witnesses that the judges be both impartial and discerning of even TLC inspector testimony.  But there are serious problems with the TLC ALJs, made worse in Operation Refusal cases.

TLC ALJs are hired by the agency without consulting the commissioners, ALJ Rana admits in answers to written questions.  They work on a per diem basis and must apply for hours each month. ALJ Rana and the assistant chief judge determine which judge is assigned which hours.  If there is any formula or regular process for assigning hours, ALJ Rana failed to say what it is.  (See Rana Dep. Answers 6, 8, 9, 10)   Thus, only do the judges lack tenure, they have no fixed term, and appear to not even have ordinary civil service protections. They can be fired—or simply not called back to duty—totally at will.  Thus, there is abundant pressure to decide cases as top agency officials, especially the Chair, would prefer they be decided. 

ALJ Rana even refuses to name the ALJs and she will not say which TLC ALJs have worked on Operation Refusal cases.  In response to these questions, she claims, “I do not possess independent recollection sufficient to answer this question.”  But a failure of memory is no excuse in answering written questions.  ALJ Rana must have a list she could have consulted without too much effort, but preferred not to.  She does admit, however, that she decides, without stated criteria, which ALJs adjudicate passenger refusal cases where revocation is a remedy, assisted by the Assistant Commissioner of Adjudications. (See Rana Dep. Answer 15)

In theory, the public or the press could provide some oversight of the process in the TLC tribunals.  But even assuming there was sufficient—or any—interest, the TLC until recently tried to prevent even that minimal form of oversight.  One of plaintiffs’ counsel sought admission to the TLC courts and was refused.  He filed an Article 78 Action in state Supreme Court.  Justice Parness found there was no written policy and no lawful basis for keeping the courts closed to the public.  (See Ackman Decl. Exh. 11)  But even after that, the TLC denied reporters admission to its courts. 

Only when New York City Public Advocate Mark Green showed up at the court, attracting a posse of reporters in his wake, did the TLC grant access.  But, the press reported, that access was limited to a select hearing or two—at which Rana was the judge, not revealing that she was in fact chief judge.  A TLC spokesman called access “a courtesy” to Advocate Green.  Thus, when the public asked in, it was shut out.  When the press was there, the TLC staged a show trial.  (Ackman Supp. Decl. Exh. 3)

The agency still has not learned to follow judicial directives.  This court’s decision on plaintiff’s motion for a preliminary injunction, while not a final judgment, might have spurred some change in the TLC’s procedures.  ALJ Rana reports it did not. (See Rana Dep. Answer 45)

Defendants claim that none of this matters.  The only thing ALJs do “is to ‘make final findings of fact,’” defendants say.  As long as the “TLC has done nothing to interfere with that process,” in their view, there can be no complaint. (Def. Mem. p.17)

The evidence suggests, however, that they have done a great deal to interfere even with the fact-finding process.  ALJ Rana’s memorandum instructs the TLC ALJs to find a violation of TLC Rule 2-61(a)(2), whenever they find a violation of TLC Rule 2-50(b).  This is to say, the TLC administration tells the judges they need not find any additional facts to sustain the separate charge.  Asked what findings of fact and conclusions of law are necessary to sustain a finding that TLC Rule 2-61(a)(2) was violated, ALJ Rana says: “An ALJ must find that a respondent committed an act against the best interest of the public based upon credible evidence.” 

There are other reasons to believe that TLC ALJ fact-finding may not be impartial in Operation Refusal cases.  The ALJs, like the inspectors, know that the higher-ups at the TLC have turned the agency upside down to enact Operation Refusal in response to a blizzard of publicity.  They may have read that Mayor Giuliani personally ordered the action, without even consulting the commissioners.  If the TLC ALJs had any structural protections that afford them a sense of judicial independence, the problem might not be so serious.  But without any kind of security, an ALJ might sense that a conviction is important to the agency and weigh facts and assess credibility accordingly.   Plaintiffs have been unable to discover how many cases have been tried under Operation Refusal or what percent have resulted in guilty verdicts.

As defendants point out, the ALJs make final findings of fact.  “In all other respects, however, a decision of the ALJ is simply a recommendation which may be adopted, modified or rejected by the TLC Chairperson.”  (Def. Mem. p. 17)  Even if the TLC ALJ does not recommend revocation, the chairperson might order revocation on her own, defendants say. (Id.)  Plaintiffs do not question that McGrath-McKechnie would do just that.

But the TLC Chair’s ability to ignore the judges is not, strictly speaking, a defense.  A judicial opinion—even when ignored—has weight.  This is why the Chair tried to have the OATH judges change their rulings, even though she was free to ignore, and in fact did ignore, their penalty recommendations also. (See Ackman Decl. Exhs. 7-8)  When TLC lawyers argued to the commission that licenses should be revoked, despite the ruling of OATH judges, the commissioners agreed with the judges and decided to ignore the Chair instead.  Moreover, the TLC Chair, acting as an appellate judge might in certain cases choose to accept the legal conclusions of an ALJ.  An arbitrary or unreasoned rejection of an ALJ ruling might itself be a violation of due process.  Thus, the Chair, despite her power, would certainly prefer an opinion that supports her view as opposed to one that rejects it.

Defendants have made no showing that their procedures are fair or constitutional, certainly not as a matter of law.  In fact, all the evidence, the evidence the Court has already noted and additional evidence as to the fairness of the TLC hearings on the merits, points in the other direction.   Plaintiffs have a right to discovery of evidence to dispute defendants’ claims that they have provided “’such procedural protections as the particular situation demands.’”  See Def. Mem. p.12, citing Morrissey v. Brewer, 408 U.S. 471, 481  (1972))  Even prior to discovery, defendants’ motion for summary judgment should be denied.

Conclusion

The New York City Taxi and Limousine Commission, like all city agencies, is governed by the City Charter and the Administrative Code.  The TLC Chair and the Mayor have ignored the Charter by acting without a vote of the commission.  They have violated the Code passed by the City Council.  They have sought to justify their actions by resort to their own rules, which, as a matter of law, cannot be inconsistent with the Charter or the Code.  They have instituted procedures that violate the United States Constitution.  They have denied plaintiffs of valuable licenses, the basis of their livelihoods, without legal authority in violation of 42 U.S.C. § 1983.    Thus, summary judgment is proper.

For the reasons stated, this Court should grant plaintiffs’ motion for summary judgment, deny defendants’ motion for summary judgment, and grant such other relief as the Court deems just and proper.

Dated: New York, New York
                  December 8, 2000

____________________________

Daniel L. Ackman (DA-0103)
201 West 89th St., 15th flr.
New York, New York 10024
(212) 496-2263

BLOCK & MAZARIN
By:__________________________

Brad E. Mazarin (BM-6457)
277 Broadway, suite 301
New York, NY 10007
(212) 227-9008

Attorneys for Plaintiffs

TO:

Jerald Horowitz, Esq.
NYC Corp. Counsel
100 Church Street, Rm 5-189
New York, NY  10007