The New York City Taxi & Limousine Commission chose the Nissan NV200 as the 'Taxi of Tomorrow.'
The New York City Taxi & Limousine Commission chose the Nissan NV200 as the ‘Taxi of Tomorrow.’ (Wiki/Choppers)

New York City’s Taxi and Limousine Commission has the authority to require drivers buy new, specialty cars from Nissan Motor Co. for its “Taxi of Tomorrow” project, a divided state appeals panel has ruled, reversing a lower court judge who found the mandate illegal last year.

The Appellate Division, First Department, ruled 3-1 on Tuesday that the TLC rules requiring drivers to purchase the Nissan NV200—a car designed to meet TLC’s safety and passenger comfort specifications—was within the agency’s authority.

The finding overturned a ruling by Manhattan Supreme Court Justice Shlomo Hagler (See Profile).

Justice David Saxe (See Profile) wrote for the majority in Greater New York Tax Association v. New York City Taxi & Limousine Commission, 101083/13, joined by Justices Angela Mazzarelli (See Profile) and Karla Moskowitz (See Profile). Justice Rolando Acosta (See Profile) dissented.

The Taxi of Tomorrow program began in 2007, when the TLC began considering replacing the dominant cars in the taxi fleet—the Ford Stretch Crown Victoria and the Ford Escape SUV hybrid—both of which were going to be discontinued. The commission found that instead of setting standards that drivers could meet by modifying an existing car, it would work with a manufacturer to develop a car specifically for that purpose.

In 2009, the TLC put out a request for proposals from car manufacturers that sought a design with a high standard of safety, low environmental impact, improved amenities for both passengers and drivers and better access for people with disabilities.

In 2010, the TLC revealed three finalists, including the design from Nissan, and invited public comment. It settled on the NV200 in May 2011 and entered into a 10-year supply agreement with the company. The car features sliding doors, passenger-operated climate control, more space, adjustable seats, floor lights and other features. The contract requires Nissan to modify the car to make it fully wheelchair-accessible upon request.

The TLC then passed new rules requiring drivers whose taxis must be replaced because of age or condition to buy the new cars. It subsequently changed the rules to allow drivers to buy an approved hybrid instead, as required by a 2005 city law, but the NV200 remained the only non-hybrid option.

In December 2012, a group of taxi fleet owners sued the TLC to block the rules, arguing that the commission had overstepped its authority by requiring them to buy a single car.

Last October, Hagler ruled in their favor, finding that while the City Charter permits the TLC to set standards for taxis, it does not give it the authority to mandate the purchase of one particular car (NYLJ, Oct. 9, 2013).

Saxe, in Tuesday’s opinion, wrote that Hagler had interpreted the TLC’s authority under the charter too narrowly.

“Although the charter’s directions included establishing standards and specifications, the agency was not limited to establishing standards and specifications,” he wrote. “The language of the charter provision reflects an expansive mandate to develop and improve taxi and limousine service, expressly including a direction ‘to adopt and establish an overall public transportation policy governing taxi service.’”

Saxe said the TLC had carried out its mission in choosing the Nissan taxi through an “exacting process,” with “input from all conceivable interests and concerns, to ensure a final decision that would best satisfy taxi passengers, owners, and drivers, as well as the general public.”

“By proceeding as it did, the TLC actually benefited all concerned,” Saxe wrote. “The agency was able to wield negotiating power unavailable to individual medallion owners, to arrange for the creation of a taxi possessing all the qualities it sought, along with price caps and other protections.”

Saxe also noted that the TLC’s previous rules were so specific that only one existing non-hybrid car, the Ford Stretch Crown Victoria, could meet them. If the TLC had the authority to pass those regulations, he said, it must have the authority to require one particular car.

He rejected the fleet owners’ argument that the new rules violated the separation of powers by claiming authority reserved for the City Council. The council, Saxe said, properly delegated “comprehensive responsibility for policy relating to all aspects of the city’s for-hire transportation services” to the TLC.

Acosta, in his dissent, said that the TLC had “exceeded its statutory authority in a manner that infringed on the City Council’s legislative domain.” He said that although the old rules effectively ensured the Stretch Crown Victoria’s dominance, “it remained possible for other vehicles to be designed to meet the required specified standards (as was the case), whereas the revised rules entirely preclude that possibility.”

The new rules, Acosta wrote, “reflect a determination by TLC that the traditional exercise of its power to set detailed vehicle design specifications in service of the stated policy goals is not enough, and that transportation policy would benefit from a rule providing for a single manufacturer to create a single iconic taxi vehicle for use in New York City.”

The TLC is represented by Elizabeth Freedman, Nicholas Ciappetta and Leonard Koerner of the Corporation Counsel’s office, which referred comment to the TLC.

“We are still reviewing the ruling and its implications, especially in view of the potential for further appeal,” TLC chairwoman Meera Joshi said. “Certainly, we are gratified by this latest decision upholding the TLC’s regulatory authority.”

Nissan, an intervenor in the case, is represented by Peter Brennan, a partner at Jenner & Block, and Harold Greenberg, an associate there.

The taxi owners are represented by Steven Mintz, a partner at Mintz & Gold, by Lisabeth Harrison, a senior counsel at the firm, and by Richard Topaz, an associate.

The attorneys could not be reached for comment.