A state appeals court has tossed out a jury verdict and damages of $837,000 in an anti-competition case pursued by a Westchester County taxi company that claimed other companies disparaged it over the dispatch radio for years.
An Appellate Division, Second Department, panel also dismissed the relevant claims lodged against the four taxi company defendants and related individual defendants. It found that plaintiff Coqui Taxi Corp. failed to establish a prima facie case for antitrust restraint on trade, unlawful deceptive trade practices and injurious falsehood.
The justices’ ruling zeroed in on incomplete evidence presented during a weeks-long 2014 trial that featured allegations of collusion among the defendant companies. The panel said the plaintiffs’ evidence lacked any showing of causation and was “wholly speculative” when it came to damages.
“Assuming, without deciding, that the plaintiffs’ trial evidence demonstrated the existence of an arrangement or ‘reciprocal relationship’ between the defendant taxi companies, the plaintiffs failed to establish, prima facie, that the economic impact of that arrangement was to restrain trade in the relevant market of taxi drivers in the village who owned their own medallion taxi cabs,” the unanimous panel wrote while quoting Shaw v. Club Managers Association of America, 84 AD3d 928 (Second Dept. 2011).
The panel pointed out in regard to damages, “The plaintiffs did not present any experts to instruct the jury on the ‘equilibrium theory’ or any other economic theory espoused by their counsel.” It then added, “The plaintiffs also failed to present any expert testimony on the calculation of any financial damages. [Plaintiff] Gonzalez herself could only guess at Coqui’s alleged losses.”
The lawsuit, Gonzalez v. Village Taxi, 29485/09, revolved around competition between five taxi dispatch companies in the Village of Port Chester, in Westchester County. According to the panel, there were 75 taxicab licenses, or medallions, available in the village in 2009, and the people and cars associated with them had to be affiliated with a dispatch company.
At the time, there were four dispatch licenses allowed by the village’s statutory code. But in February 2009 the village issued a fifth license to plaintiff Dolores Gonzalez, the panel wrote.
Gonzalez used the license to open Coqui Taxi Corp. Her company’s income was expected to come from her and her boyfriend working as taxi drivers for Coqui—they each owned medallion taxis—and from daily and weekly service fees that other village medallion drivers would pay for Coqui’s dispatch services.
But once Coqui opened, only two medallion drivers used it as a dispatcher. And they did so for only three weeks, the panel wrote.
Gonzalez claimed that drivers village-wide were scared off from using Coqui because the other four companies had colluded against it. The companies made disparaging remarks about her company to drivers over the dispatch radio, she said, and they threatened drivers, telling them that if they used Coqui, they’d be banned from using their dispatch companies.
Gonzalez, her boyfriend and Coqui ultimately sued, bringing claims that included violation of state General Business Law § 340 (the Donnelly Antitrust Act) based on conspiracy among the defendant companies causing a restraint on trade; violation of General Business Law § 349 for deceptive trade practices; and injurious falsehood.
At trial, the plaintiffs presented 10 witnesses, including the defendant company owners.
One witness was Michael Martinez, a former dispatcher, who variously worked for all four defendant companies and who testified that the defendant owners told him to say “unpleasant things” about Coqui over the radio from 2009 until 2012 or 2013, the panel wrote, including “casting aspersions on Gonzalez’s character and describing Coqui as an illegal company.”
Still, Martinez did not expressly describe an agreement between the defendant owners, the panel noted.
Martinez also testified that he was instructed to warn medallion drivers that if they affiliated with Coqui they could not come back to work with the defendant companies.
The panel further pointed to testimony of certain taxi drivers—including one who said that “drivers were afraid because of things being said over the radio”—but the justices said, “significantly, no driver of his or her own medallion taxi cab testified that he or she actually heard the threats broadcast over the radio or that the threats caused him or her to choose another taxi company instead of Coqui for dispatch service.”
The jury awarded $787,000 in compensatory damages and $50,000 in punitive damages. In analyzing the defendants’ appeal of the jury’s finding of violations of General Business Law §§ 340 and 349 and an injurious falsehood, the panel largely focused on undercutting the notion that General Business Law § 340, protecting against antitrust restraint of trade, was violated.
The justices noted that the plaintiffs’ trial evidence demonstrated a relevant market for alleged restraint of trade, and established that disparaging comments were made about Gonzalez and Coqui, including warnings that if drivers used Coqui’s services they couldn’t work with the defendant companies.
“However, there was no testimony that a medallion taxi driver actually heard the threats, or that the threats, rather than other factors, caused him or her to choose another taxi company over Coqui for dispatch service,” the panel, consisting of Justices Ruth Balkin, Cheryl Chambers, Joseph Maltese and Colleen Duffy, wrote.
In addition, “the plaintiffs’ evidence demonstrated that several factors determined which taxi company a driver will utilize for dispatch service,” the panel said, including “how much the driver was earning, whether the driver had trust in the company, and whether he or she liked the dispatcher.”
“Further, the two drivers who did use Coqui’s dispatch service left a mere three weeks later because they could not make enough money at Coqui, not because of any threats or disparaging remarks heard over the radio,” the panel wrote in the Nov. 8 decision, and “one of the drivers … also believed that Gonzalez was withholding service calls from her.”
The panel also deemed plaintiffs’ damages evidence “wholly speculative.” It noted that Gonzalez “testified that she did not know how much she would make in Coqui’s first year and that, if the defendants did not make disparaging remarks about her, Coqui’s income would have been ‘either the same or much more, depending.’”
In addressing General Business Law § 349, which authorizes an action to enjoin unlawful deceptive acts or practices in the conduct of a business, the panel noted that “the plaintiffs’ evidence … failed to demonstrate that the appellants’ alleged deceptive acts were consumer-oriented in that there was an impact on the riding public as consumers of taxi service.”
The justices noted, regarding injurious falsehood, that the “plaintiffs did not establish any special damages with sufficient specificity.” They said that “general allegations of lost sales from unidentified lost customers” are not enough, quoting DiSanto v. Forsyth, 258 AD2d 497, 498.
Richard Paul Stone, an attorney based in Manhattan, was counsel to defendants Village Taxi Corp., P.C. Taxi Corp., Luso American Taxi Inc., Pedro Montoya, Yodna Vivanco-Small and Zoila Ivarra.
In a phone interview Monday, he said that “since [the plaintiffs] didn’t show that any driver changed their decision [on which dispatch service to use], they couldn’t show that anything the defendants said caused any damage.”
He added that “the key thing I was grateful for, is that the court really put in a lot of work and were very thorough in their digestion of the record.”
“This was a long record, there were a lot of factual details,” he said. He also noted that “the court was very specific in noting the distinction between the elements of the three claims, so that it was clear the same evidence did not necessarily show causation for all three.”
Stone also said total damages in the lawsuit had topped $1 million, once interest was added.
Ralph Schoene of Collins, Fitzpatrick & Schoene in White Plains represented the plaintiffs. Benjamin Felcher Leavitt of Leavitt Legal PLLC in White Plains represented defendant Anean Goyburu Corp. Neither could be reached for comment.