Opinion
No. 2013–2121.
06-06-2014
WESTOVER CAR RENTAL, LLC d/b/a Dollar/Thrifty Car Rental and Westover Car Rental, LLC d/b/a Thrifty Airport Parking, Plaintiffs, v. NIAGARA FRONTIER TRANSPORTATION AUTHORITY, Defendant.
Shannon M. Heneghan, Esq., Paladino, Cavan, Quinlivan & Pierce, Attorneys for Plaintiffs. Heath J. Szymczak, Esq., Bradley A. Hoppe, Esq., Jaeckle Fleischmann & Mugel, LLP, Attorneys for Defendant.
Shannon M. Heneghan, Esq., Paladino, Cavan, Quinlivan & Pierce, Attorneys for Plaintiffs.
Heath J. Szymczak, Esq., Bradley A. Hoppe, Esq., Jaeckle Fleischmann & Mugel, LLP, Attorneys for Defendant.
Opinion
TIMOTHY J. WALKER, J.
Defendant, Niagara Frontier Transportation Authority (the NFTA), has moved to dismiss the complaint served by Plaintiffs, Westover Car Rental, LLC d/b/a Dollar/Thrifty Car Rental (Dollar/Thrifty), and Westover Car Rental, LLC d/b/a Thrifty Airport Parking (Thrifty Parking). The complaint seeks a declaratory judgment that certain regulations promulgated by the NFTA concerning access fees at the Buffalo Niagara International Airport (the Airport) are unconstitutional or otherwise unlawful. Plaintiffs have cross-moved for leave to serve an amended complaint, to allege service of a notice of claim on Defendant. After oral argument, the Court reserved decision. Upon due consideration of the parties' respective submissions, and after due deliberation, the Court grants the motion in part and denies it in part, and denies the cross-motion as moot.
Background
Plaintiffs operate a car rental business (Dollar/Thrifty) and a parking facility (Thrifty Parking) located across from the Airport, on Genesee Street. Defendant is a public benefit corporation organized under New York State law, which owns and operates the Airport. By statute, the Airport is required to be financially self-sustaining (Public Authorities Law § 1299–f [3 ] ). To that end, Defendant developed regulations governing commercial ground transportation conducted at the Airport; not only to serve the public, but also “to foster competition among providers of ground transportation services, and to develop revenues for support of the airport system” (21 NYCRR 1160.1 ) (the Regulations). The Regulations were adopted in 1994, and require all commercial ground transportation operators to obtain authorization from the NFTA and pay the NFTA's scheduled fees and charges in order to access customers at the Airport (21 NYCRR 1160.4 ). Operators either enter into concession agreements with the NFTA (see e.g. id. §§ 1160.6 [taxis], 1160.8 [scheduled shuttle service concessions], 1160 .15 [car rental concession] ), or pay tariffs established by the Regulations (the Tariffs)(id. § 1160.21).
“The authority may establish, levy and collect ... such fares, tolls, rentals, rates, charges and other fees as it may deem necessary, convenient or desirable for the use and operation of any transportation facility and related services operated by the authority. .... Such fares, tolls, rentals, rates, charges and other fees shall be established as may in the judgment of the authority be necessary to maintain the combined operations of the authority and its subsidiary corporations on a self-sustaining basis .” (Public Auth. Law § 1299–f [3 ] ). Revenue must cover the cost of bonding, maintenance and any capital improvements (id. ).
The NFTA operates its own shuttle service between Airport buildings and its long-term parking area, free of charge and does not assess any related expenses against its own budget (id. § 1160.14). The Tariffs have not been amended since 1994, and the Court has found no indication of any court challenge to them prior to this action.
Access to the Airport; Car Rental Services
According to the complaint, Plaintiffs' vehicles enter the Airport to pick up or drop off Dollar/Thrifty and Thrifty Parking customers.
Defendant designates certain loading and unloading areas that Plaintiffs' courtesy vehicles must use to pick up and drop off customers; those areas are, as Plaintiffs describe, located “in one of the farthest and most inconvenient pick-up-drop-off areas from the [Airport] terminal main entrance door,” which requires Plaintiffs' customers to cross trafficked areas not monitored by crossing guards and/or security personnel, and which are not completely weather protected (Complaint ¶ 10). In addition, the NFTA limits access to the Airport's Departures terminal to the hours between 9:00 a.m. and 9:00 p.m., such that, from 4:00 a.m. to 9:00 a .m., Plaintiffs' access is confined to the Arrivals terminal.
Heneghan Affid., Ex. B. Exceptions are made for handicapped customers.
Dollar/Thrifty pays access fees calculated as a percentage of gross revenue derived from customers picked up at the Airport (22 NYCRR 1600.21). The Regulations detail a rising percentage of four (4) percent for the first $500,000 of gross revenue, to ten (10) percent of gross revenue over $1.5 million. Gross revenue is defined to include the “aggregate amount of all rental transactions made for cash, credit or otherwise to [A]irport patrons, including ... insurance, additional driver and youthful driver charges, child restraint seats, ski and luggage racks, and cellular phones, less any applicable sales taxes” (id. ). Dollar/Thrifty asserts that it is the only entity that pays off-Airport access fees in order to pick up car rental customers, and submitted evidence that another entity, TransittowneUSA, advertises car rental services to Airport customers, and does not pay access fees to the NFTA (Heneghan Affid., Ex. D [“AVOID AIRPORT FEES! Rent your vehicle at TransittowneUSA”] ).
In addition, Plaintiffs assert that the NFTA solicits bids for car rental companies to operate at Airport (on-site) locations. Successful bidders enter into concession agreements with the NFTA, pursuant to which they acquire a non-exclusive right to rent out vehicles from the Airport, along with the “privilege of leasing counter/office/storage space ... as well as ready/return vehicle areas” (21 NYCRR § 1160.15 [a] ). Allegedly, these companies are not subject to the access fees imposed upon Dollar/Thrifty and, according to Plaintiffs, they gain a significant competitive advantage. In addition, their customers experience the convenience of foot access from the Airport terminal to the on-site rental location, and are not exposed to inclement weather.
Plaintiffs assert that the NFTA issued a request for proposal (RFP) for Airport (on-site) locations on or about August 9, 2012. At oral argument, Plaintiffs' counsel conceded that Dollar/Thrifty had not responded to that RFP.
Thrifty Parking
Thrifty Parking is located at 4301 Genesee Street, and pursuant to the Tariffs, pays a percentage of its gross monthly revenue to the NFTA for cash or credit parking fees collected from Airport patrons, less applicable sales tax (21 NYCRR 1160.21 ). The NFTA also offers short-term and long term parking at the Airport, and thus is Thrifty Parking's direct competitor. However, the NFTA pays no access fees, service charges or taxes in connection with shuttle services to its lots (21 NYCRR 1160.14 ). In fact, the NFTA advertises that its parking rates are lower than those of off-site parking facilities, naming Thrifty Parking as an example (Complaint ¶ 32; see Heneghan Affid., Ex. C). Finally, the NFTA's shuttle may pick up passengers at non-designated stops, anywhere at the Airport, at any time.
The complaint asserts six (6) causes of action: a due process challenge under the United States Constitution (42 USC § 1983 ); a claim for unfair business practices; a substantive due process claim under the New York State Constitution; an equal protection claim under the New York State Constitution; a vagueness challenge to the regulations (21 NYCRR part 1600 et seq.); and a claim for violation of the Commerce Clause under the United States Constitution.
Discussion
Standard On Motion to Dismiss
“It is axiomatic that plaintiff's complaint is to be afforded a liberal construction, that the facts alleged therein are accepted as true, and that plaintiff is to be afforded every possible favorable inference in order to determine whether the facts alleged in the complaint fit within any cognizable legal theory' (Leon v. Martinez, 84 N.Y.2d 83, 87–88 [1994] )” (Palladino v. CNY Centro, Inc., 70 AD3d 1450, 1451 [4th Dept 2010] ). “Modern pleading rules are designed to focus attention on whether the pleader has a cause of action rather than on whether he has properly stated one” (Rovello v. Orofino Realty Co., Inc., 40 N.Y.2d 633, 636 [1976] [cits. om.).
The First and Third Causes of Action.
Plaintiffs allege a due process challenge under the United States Constitution (42 USC § 1983 ) and under the New York State Constitution, respectively. Protections under the State due process clause mirror those under the federal amendment (People ex rel. Hinspeter v. Senkowski, 194 Misc.2d 302, 317 [Sup Ct Westchester County 2002], jt aff'd 12 AD3d 23 [2nd Dept 2004], lv dismissed 4 NY3d 753 [2005] ).
New York State Constitution, article 1, section 6 provides that “[n]o person shall be deprived of life, liberty or property without due process of law”.
In the land-use context, 42 USC § 1983 protects against municipal actions that violate a property owner's rights to due process, equal protection of the laws and just compensation for the taking of property under the Fifth and Fourteenth Amendments to the United States Constitution
(Bower Associates v. Town of Pleasant Valley, 2 NY3d 617, 626–627 [2004], citing Town of Orangetown v. Magee, 88 N.Y.2d 41, 49 [1996] [regulatory taking or revocation of permit] ).
Applying federal precedent, the New York Court of Appeals has developed a two-part test for stating a substantive due process cause of action: whether the governmental entity acting under color of State law has deprived the plaintiff of a “vested property interest”, and whether the challenged governmental action was “wholly without legal justification” (Bower Assoc. v. Town of Pleasant Valley, 2 NY3d at 627 ).
Here, Plaintiffs cannot establish a property interest of constitutional dimension, of which they have been deprived. Most of the cases cited in Bower relate to property owners clearly entitled to the issuance of a permit for a particular development (Bower, 2 NY3d at 628 ). In contrast, the Regulations specifically state that they grant no “property right or expectation to any person”; and, that the NFTA “reserves the right to limit or restrict access to any area of the airport ... for reasons including, but not limited to safety and security of the general public” (21 NYCRR 1160.20 ). Further:
[a]ny person who determines to invest time or financial resources in the provision of commercial ground transportation service at the [A]irport does so with full knowledge of the foregoing provisions, and shall have no right or standing to make any claim whatsoever against the NFTA by reason of any subsequent amendment to these rules ..., any amendment to a ... permit or any limitation or restriction of access to the [A]irport
(id. )
Thus, the Regulations make clear that, merely because Plaintiffs (or any other companies) are granted access to Airport property for a commercial venture does not give them the right to insist upon particular terms. Contrary to Plaintiffs' contentions, the right to conduct a business or make a profit has not been deemed a “property right” under the due process clause; and “business in the sense of the activity of doing business or the activity of making a profit is not property in the ordinary sense” for constitutional purposes (College Savings Bk. v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 675 [1999] [emphasis in original).
Turning to the second prong of this analysis, the Court of Appeals has determined that “only the most egregious official conduct can be said to be arbitrary in the constitutional sense” ' so as to meet this second element (4C N.Y. Prac., Comm. Lit In N.Y. State Courts § 105:75 [3rd ed], citing Bower Assocs., 2 NY3d 617, 628–629, citing City of Cuyahoga Falls, Ohio v. Buckeye Comm. Hope Fdn., 538 U.S. 188, 198 [2003] ; see also County of Sacramento v. Lewis, 523 U.S. 833, 846 [1998] ).
The United States Court of Appeals for the Second Circuit has ruled similarly:
Substantive due process is an outer limit on the legitimacy of governmental action. It does not forbid governmental actions that might fairly be deemed arbitrary or capricious and for that reason correctable in a state court lawsuit seeking review of administrative action. Substantive due process standards are violated only by conduct that is so outrageously arbitrary as to constitute a gross abuse of governmental authority
(Natale v. Town of Ridgefield, 170 F3d 258, 263 [2nd Cir1999] ).
Plaintiffs have failed to identify egregious or arbitrary governmental action affecting the property interests they assert. Therefore, the first and third causes of action are dismissed.
The Fourth Cause of Action.
The gravamen of Dollar/Thrifty's equal protection claim is that, in order for its car rental shuttles to access the Airport, it must “open its books” to the NFTA and pay a percentage of its gross receipts, while other off-site rental agencies pay no access fees. In addition, on-site rental companies, while purportedly paying similar fees, receive greater benefits and have more profit opportunities. Dollar/Thrifty alleges that this disparate treatment constitutes bad faith, is designed to thwart competition and injure Plaintiffs, and lacks any rationality.
Dollar/Thrifty's argument that the NFTA charges a fee on a fee (Complaint ¶¶ 18–19) is incorrect. Although it asserts that an access fee paid by a customer to Dollar/Thrifty is not a part of true revenue because Dollar/Thrifty is merely “an agent” collecting the fee on the NFTA's behalf, under the regulation tariffs are charged based upon records of past revenue,not estimates of future revenue—and thus if Dollar/Thrifty is charging an “access fee” to a customer, it is doing so without knowing what that fee will actually be. The fact that Dollar/Thrifty may raise its prices to compensate itself for fees it may pay the Airport in the future does not make those increases a fee imposed by the NFTA, but a matter of its own business practice.
Thrifty Parking claims that the NFTA treats it differently by charging an access fee based upon a percentage of revenue, while other courtesy shuttles, including hotel, motel, limousine services and non-commission taxi operators pay a much lower (flat) fee, which is not based upon gross receipts.
The NFTA asserts that Plaintiffs are not similarly situated to other commercial users and that there are numerous rational bases for the Tariffs and fee structure. For example, access fees and other charges contained in the Regulations ensure that the Airport is self-sustaining (see 21 NYCRR 1160.21 ). Plaintiffs are admittedly dependent upon the Airport for their operations (see Complaint ¶ 4). Therefore, the NFTA alleges that it is justified in charging higher fees to off-site businesses whose operations compete with the NFTA and undermine its ability to meet its statutory mandate (by impacting the profitability of its own parking operations and its contracts with on-site rental companies).
Plaintiffs' equal protection claims are based solely upon the New York Equal Protection Clause (N.Y. Const., art. I, § 11 ), which is “modeled after its federal counterpart” (Matter of Walton v. New York State Dept. of Correctional Servs., 13 NY3d 475, 492 [2009] [cits. om.]; Bower Assoc. v. Town of Pleasant Val., 2 NY3d 617, 630–631 [2004] ). Importantly, “the State constitutional equal protection clause ... is no broader in coverage than the Federal provision” (Under 21, Catholic Home Bur. for Dependent Children v. City of New York, 65 N.Y.2d 344, 360 n.6 [1985] ). Accordingly, the Court of Appeals relies upon federal precedent and applies the analyses from federal caselaw in reviewing equal protection claims brought under the State constitution (Hernandez v. Robles, 7 NY3d 338, 375 [2006] ).
The Equal Protection Clause, added to the New York Constitution in 1939, provides: “No person shall be denied the equal protection of the laws of this state or any subdivision thereof. No person shall, because of race, color, creed or religion, be subjected to any discrimination in his or her civil rights by any other person or by any firm, corporation, or institution, or by the state or any agency or subdivision of the state” (N.Y. Const., art. I, § 11 ); see Hernandez v. Robles, 7 NY3d 338, 374 [2006] ).
The Equal Protection Clause “is essentially a direction that all persons similarly situated should be treated alike” (Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 439 [1985] ), and the courts have developed three levels of review of legislative classifications.
“[W]hen a statute classifies by race, alienage, or national origin” ..., or when it burdens a fundamental right protected under the Due Process Clause, it is subjected to strict scrutiny meaning that it will be sustained only if it is narrowly tailored to serve a compelling state interest (see Golden v. Clark, 76 N.Y.2d 618, 623 [1990] ). Classifications based on gender or illegitimacy are reviewed under an intermediate level of scrutiny—meaning they will be sustained if “substantially related to the achievement of an important governmental objective” ( [People v ] Liberta, 64 N.Y.2d 152, 168 [1984] ; ... ). Neither the Supreme Court nor this Court has recognized any other classifications as triggering heightened scrutiny and, therefore, all other statutory distinctions have been sustained if rationally related to a legitimate government interest
(Hernandez v. Robles, 7 NY3d at 374 [cits. om., emphasis supplied] ).
Plaintiffs rely upon a theory of selective enforcement by a lawful state regulation (see e.g. Bower Assoc. v. Town of Pleasant Valley, 2 NY3d 617, 631 [2004], cited in Plaintiffs' Memorandum of Law at 4). A violation of equal protection by selective enforcement arises if:
The exception is Plaintiffs' challenge to the regulation as unconstitutionally vague, see infra.
(1) the person, compared with others similarly situated, was selectively treated; and (2) ... such selective treatment was based on impermissible considerations such as race, religion, intent to inhibit or punish the exercise of constitutional rights, or malicious or bad faith intent to injure a person.
(LaTrieste Restaurant & Cabaret Inc. v. Village of Port Chester, 40 F3d 587, 590 [2nd Cir1994], quoting LeClair v. Saunders, 627 F.2d 606, 609–10 [2nd Cir1980], cert. denied 450 U.S. 959 [1981] ; see also Matter of 303 West 42nd Street Corp. v. Klein, 46 N.Y.2d 686, 693–696 [1979] ).
Plaintiffs do not allege that they were selectively treated as members of a suspect class. Therefore, to assert such a claim they must allege either that the NFTA intended to inhibit or punish their exercise of constitutional rights, or that the NFTA “maliciously singled [them out] with the intent to injure” them (Crowley v. Courville 76 F3d 47, 53 [1996] ).
A similar theory, the “class of one” was elucidated in Village of Willowbrook v. Olech (528 U.S. 562 [2000] ), where the United States Supreme Court ruled that the number of people in the “class”-whether one or many—was immaterial for equal protection analysis (id. at 564 & n.* ). In a “class of one” claim, the plaintiff must demonstrate (1) that it was intentionally treated differently than others similarly situated, and (2) that there was no rational basis for the difference in treatment (Village of Willowbrook v. Olech, 528 U.S. 562, 564 [2000] ), and that the governmental actions were non-discretionary (Engquist v. Oregon Dept of Agr., 553 U.S. 591, 602–603 [2008] ; see also Vlahadamis v. Kiernan, 837 FSupp2d 131, 142–143 [EDNY 2011] [actions requiring discretion on a day-to-day basis cannot serve as the predicate for such an equal protection challenge] ). Because of the result reached today, the Court need not determine which theory is most applicable in this circumstance.
Plaintiffs allege that they profit less from Airport-based businesses than they envisioned. However, for this claim to survive dismissal, Plaintiffs must allege that they were maliciously singled out. Indeed, the greater the disparity in treatment of those similarly situated, the more likely that malice is the only basis for the selective enforcement (see Matter of 303 West 42nd Street Corp., 42 N.Y.2d at 695)
Dollar/Thrifty alleges that, whether it is disparately treated from on-site and other off-site car rental companies cannot be determined without the opportunity to conduct discovery (in part because the commission agreements between the NFTA and the on-site companies are not public records).
Thrifty Parking asserts that other courtesy vehicles access the Airport in precisely the way it does, yet pay only a smaller fee, which is not revenue-based. Again, there is no competent evidence before the Court on this point.
The Court notes that, in a number of the cases relied upon by the NFTA, the courts ruled on summary judgment or post-trial motions (see Exec. Air Taxi Corp. v. City of Bismarck, 2006 U.S. Dist. LEXIS 94860 [DND Aug. 30, 2006], aff'd 518 F3d 562, 565 [8th Cir2008] [summary judgment]; Alamo Rent–A Car Inc v. Sarasota–Manatee Airport Auth., 825 F.2d 367, 369 [11th Cir1987] [permanent injunction] ).
Plaintiffs have not had the opportunity to demonstrate the existence of similarly situated, but disparately treated entities, or whether other off-site entities (such as TransittowneUSA) are bound by the Tariffs. Therefore, the motion is denied as to the fourth cause of action, without prejudice to renew upon the completion of discovery.
The Second Cause of Action.
Initially, the NFTA contends that Plaintiffs' failure to allege compliance with the mandatory notice of claim provisions of Public Authorities Law § 1299–p (2) is fatal to the cause of action based upon unfair business practices. Subsection one of that statute requires that, in every action against the NFTA for damages for injuries to real or personal property, the complaint “shall contain an allegation that at least thirty days have elapsed since the demand, claim or claims upon which such action is founded were presented to a member of the authority ... and the authority has neglected or refused to make adjustment or payment thereof” (id. § 1299–p [1 ] ).
Plaintiffs cross-move for leave to serve an amended complaint, in order to allege that they served a notice of claim on the NFTA on or about March 28, 2014, and that neither adjustment nor payment has been made (see Heneghan Affid., Exs. E & F). Any such claim is continuing, such that the cross-motion would be granted. However, in light of the Court's determination on this cause of action, it is rendered moot.
On the merits, the NFTA asserts that Plaintiffs' allegation—that the access fees infringe upon their “commercial advantage”—lacks the essential elements of a viable cause of action. The Court agrees. Plaintiffs have failed to state the elements of any cognizable cause of action.
Unfair competition requires proof of a “bad faith misappropriation of a commercial advantage” belonging only to the plaintiffs (LoPresti v. Massachusetts Mut. Life Ins., 30 AD3d 474, 476 [2nd Dept 2006] ). No such allegations appear here. Nor do any other business-related torts apply. According to Plaintiffs, the NFTA advertises that its rates are lower than Plaintiffs' rates, and this constitutes the misappropriation of good will by an unfair tactic representing “the hallmark of bad faith”. However, General Business Law (GBL) § 349 claims require both deceptive practices—not alleged here—and proof of effect on consumers or the public—also absent here. GBL § 350 requires proof of false advertising, and Plaintiffs have failed to state how the NFTA's advertising is false.
Therefore, the second cause of action is dismissed.
The Fifth Cause of Action.
In the vagueness challenge, Plaintiffs assert that the fee structure pursuant to the Regulations lacks clarity (citing 21 NYCRR 1160.21 ). Plaintiffs allege further that they pay grossly disproportionate access fees to the NFTA, while other ground transportation companies are charged a smaller, flat fee or no access fee. Plaintiffs focus on the Regulations' failure to explain why Plaintiffs are treated differently from on-site rental car companies or from the NFTA's own on-site parking operations, or why (as they allege) other off-site entities pay lower or no fees. Plaintiffs allege that there are no geographic boundaries concerning who must, or must not pay either a simple access fee or a broader, percentage of gross receipts fee (see 21 NYCRR § 1160.21 ). Thus, Plaintiffs assert, the NFTA has “overbroad discretion to arbitrarily charge companies access fees or not charge an access fee at all,” confusing the ordinary person.
Regulatory enactments are presumed to be constitutional (164th Bronx Parking v. City, 20 Misc.3d 796, 802 [Sup Ct Bronx County 2008], citing People v. Stuart, 100 N.Y.2d 412, 422 [2003] ). A “statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law” (Connally v. General Constr. Co., 269 U.S. 385, 391 [1926] ). The New York Court of Appeals explained the two-part test used for addressing vagueness challenges:The first [criterion] essentially restates the classical notice doctrine: to ensure that no person is punished for conduct not reasonably understood to be prohibited, the court must determine whether the statute in question is “sufficiently definite ‘to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute” ’.
Second, the court must determine whether the enactment provides officials with clear standards for enforcement (People v. Stuart, 100 N.Y.2d at 420 [cits. om.] ) These standards have been applied in civil matters (see National Endowment for the Arts, v. Finley, 524 U.S. 569, 580 [1998] ; Matter of Saratoga Water Servs. v. Saratoga County Water Auth., 83 N.Y.2d 205, 213–214 [1994] ).
Here, Plaintiffs do not point to ambiguity in the language of the Regulations. Their only challenge is to the Regulations as applied. “As the term implies, an as-applied challenge calls on the court to consider whether a statute can be constitutionally applied to the defendant under the facts of the case” (People v. Stuart, 100 N.Y.2d at 421 ).
Reading Regulation section 1160.21, entitled “Ground Transportation Tariff”, the Court finds no unconstitutional application to Plaintiffs. The section lists three categories of commercial transport subject to the tariff: Buses, “Scheduled and Unscheduled”; Off-airport Parking Operator, Car Rental; and Limousine/Van, Hotel/Motel courtesy vehicles. It then sets forth the methods for calculating the related access fees. It is undisputed that Plaintiffs are off-site parking and car rental companies, such that there can be no confusion as to which of the Tariffs apply to them—or to any other off-site parking/car rental company.
Plaintiffs' challenge—typified by their equal protection claims—focuses on the basis or reasoning behind the differential treatment of these three categories of ground transportation providers in accessing the Airport. However, vagueness challenges are not based upon the motives for promulgation; rather, the crux of such challenges pertains to notice of what is required, and a clear path for application of the rules by governmental employees. The Regulations are clear on both counts.
Concerning Plaintiffs' claim that the Regulations do not specify the geographical boundary beyond which access fees will not apply, the NFTA asserts that the only boundary at issue is the boundary of the Airport itself: if an entity is located off-site and desires access to the Airport to pick up customers (whether such entity is located across the street or in another county), it must apply for a permit and be subject to the Tariffs. The Regulation's “Definitions Section” (section 1160.2) clearly differentiates between car rental entities located at the Airport, from those located “off-[A]irport”, subject respectively to the sections on commission contracts (section 1160.15 ) and the Tariffs (section 1160 .21). Further, any person who engages in commercial ground transportation service at the Airport “in a manner violative of any provision of these rules and regulations shall be deemed guilty of a violation” (21 NYCRR 1160.3 ; see also id. § 1160.4 ). The Court finds no vagueness concerning the geographic application of the Tariffs.
If a court denies an “as-applied” challenge to a statute or regulation, “the facial validity of the [regulation] is confirmed”, because in rejecting the as-applied challenge “the court will have necessarily concluded that there is at least one person—[Plaintiffs]—to whom the [Regulation] may be applied constitutionally” (People v. Stuart, 100 N.Y.2d at 422–423, citing Village of Hoffman Estates v. Flipside, 455 U.S. 489, 505 [1982] ). Therefore, the fifth cause of action is dismissed.
The Sixth Cause of Action.
Finally, Plaintiffs assert that the Regulations violate the Commerce Clause of the United States Constitution (art 1, § 8, cl. 3 ). From Congress' power to regulate interstate commerce, “flows the negative or dormant implication that the Commerce Clause prohibits state taxation or regulation that discriminates against or unduly burdens interstate commerce and thereby impedes free private trade in the national marketplace” ' (Automobile Club of New York, Inc. v. Port Authority of New York and New Jersey, 842 FSupp2d 672, 677 [SDNY 2012] [cits. om.] ).
In the Constitution, article 1, section 8, clause 3, Congress was given the power “to regulate Commerce with foreign Nations and among the several States”.
Initially, the NFTA contends that, because it is acting as a market participant with respect to the provision of car rental and parking facilities, the Regulations are immune from scrutiny under the Commere Clause (see e.g. Transport Limousine of Long Island Inc. v. The Port Auth. of N.Y. and N.J., 571 FSupp 576, 581 [EDNY 1983], citing Reeves, Inc. v. Stake, 447 U.S. 429 [1980] ). “Nothing in the purpose animating the Commerce Clause prohibits a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others” (White v. Massachusetts Council of Const. Employers, Inc ., 460 U.S. 204, 207 [1983], quoting Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 810 [1976] ).
The Supreme Court has recognized that there is no bright line in distinguishing between these two roles: state as regulatory body, versus state as market participant, when the state acts in other than a traditional state function. “As [the court] said in Reeves, in this kind of case there is a single inquiry: whether the challenged “program constituted direct state participation in the market” “ ‘ (White, 460 U.S. at 208, quoting Reeves, 447 U.S. at 436 n.7 [emphasis supplied] ). In the White case, Justice Blackmun, dissenting in part, suggested the following inquiry:
The legitimacy of a claim to the market participant exemption thus should turn primarily on whether a particular state action more closely resembles an attempt to impede trade among private parties, or an attempt, analogous to the accustomed right of merchants in the private sector, to govern the state's own economic conduct and to determine the parties with whom it will deal.
(White v. Massachusetts Council of Const. Employers, Inc., 460 U.S. at 218 [Blackmun, J. dissenting] ).
In Transport Limousine of Long Island, Inc. v. The Port Authority of New York and New Jersey (571 FSupp 576 [EDNY 1983] ), the District Court concluded that the Port Authority was “a participant in the market for ground transport services in that it makes certain facilities available at a fee” to transportation firms such as the plaintiff in that case, a limousine service that contracted with the Port Authority for counter space, telephone service at the airport and advertising (571 FSupp at 581 ); see also Salem Transp. Co. of N.J. Inc. v. Port Auth. of N.Y. and N.J., 611 FSupp 254, 258 [EDNY 1985] ).
The precise issue in that case, however, was the amount of the fees, not alleged discrimination with respect to whom the Authority would deal (id. ).
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Similarly, the United States Court of Appeals for the Eighth Circuit determined that a state commission operating an airport acted as a market participant when it rented space to, and entered into concession agreements with rental car companies such as a Dollar Rent A Car franchisee (see Four T's, Inc. v. Little Rock Mun. Airport Comm'n, 108 F3d 909, 912–913 [8th Cir1997] ).
This inquiry concerns a question of law, not fact (see e.g. State ex rel Grupp v. DHL Exp. (USA), Inc., 19 NY3d 278, 286–287 [2012] ). In line with the above-cited decisions, the Court determines that the NFTA, in entering into concession agreements with on-site rental car companies, and in operating its own parking facilities, in order to produce revenue to fund its operations, capital programs and bonding, is acting as a market participant.
Therefore, the sixth cause of action is dismissed.
It is, therefore,
ORDERED, that Defendant's motion is denied insofar as it seeks dismissal of the fourth cause of action, but is otherwise granted; and it is further
ORDERED, that the cross-motion is denied as moot.