NEW YORK—The city here is seeking to move the lawsuit brought against it by four credit unions out of Queens, arguing that New York County is this city’s mayor’s principal place of business and therefore the right venue for the case.
Last week a state Supreme Court justice in Queens ordered the administration of New York Mayor Bill de Blasio to appear in his court June 22 in response to the four CUs suing the city over “illegal” street hails from ride-sharing services.
Judge Denis Butler is asking the city’s administration to discuss why the court should not compel the city to immediately stop ride-share companies such as Uber and Lyft from picking up riders who hail them via smartphone.
The four CUs involved are $2.1-billion Melrose CU, the $174-million Montauk Credit Union, $718-million Progressive Credit Union and $278-million LOMTO FCU. They are questioning the motives behind the city’s motion.
“The administration should spend less time judge-shopping and trying to delay a hearing in this case and more time considering the damage that it is inflicting on the taxi industry,” their attorney Arthur Schwartz said in a statement, reported Crain’s New York Business.
A spokesman for the city’s Law Department told the publication: “As our legal papers will make clear, New York County, where there is already a similar case pending, is the appropriate venue for this matter.” The reference was to another case brought by some medallion owners earlier this spring. The plaintiffs in the more recent case do not want their action combined with the other one, Crain’s New York Business reported.
For the credit unions and their members, the emergence of new ride-sharing companies is a significant issue that threatens the value of the taxi medallions, which can cost upwards of hundreds of thousands of dollars each. Those loans also make up significant portions of some CUs’ portfolios.
“The city has left us no choice but to pursue legal action in the courts, and that is what we have done," Todd Higgins, an attorney for Melrose, stated in a previous report. The credit unions are suing the mayor, his Taxi and Limousine Commission, and state Attorney General Eric Schneiderman.
The credit unions are seeking a preliminary injunction to force the city to enforce a law that prevents anyone but medallion Yellow Cabs from picking up street-hails. Melrose claims Uber’s electronic hails are illegal. Uber and other ride sharing services such as Lyft, have had dramatic effects on taxi cab revenue in some markets.
The mayor’s office is in Manhattan, as is the main Taxi and Limousine Commission office, but the city cannot merely demonstrate that New York County would be the best venue. It must also show that Queens is not an appropriate venue, Crain’s New York Business noted.
“The city’s demand to change venue from Queens to Manhattan is a just frivolous attempt to run out the clock on the taxi industry,” Todd Higgins, another attorney for the lenders, told Crain’s New York Business, referring to fears that medallions will become worthless if Uber is not checked. “The law is clear—Queens is not only a proper venue, it is in fact the preferred venue since all of the material facts arose in Queens.”