New York City Taxi and Limousine Commission (TLC) Did Not Have the Authority to Promulgate “Health Care Rules” and Mandate Deductions from Taxi Fares to Pay for Healthcare Services and Disability Coverage for “Medallion” Taxi Cab Drivers

The First Department determined the New York City Taxi and Limousine Commission (TLC) exceeded its authority and acted arbitrarily and capriciously when it promulgated “Health Care Rules” and determined six cents per taxi-fare could be deducted for the purpose of providing healthcare services and disability coverage for “medallion” taxi cab drivers.

TLC’s “expansive mandate to develop and improve taxi and limousine service” notwithstanding …, we find that TLC exceeded its authority in promulgating the Health Care Rules … .

First, the record demonstrates that, in its attempt to establish a cost-effective structure for promoting driver health, TLC, motivated by broad “economic and social concerns,” was making policy, and therefore was “operating outside of its proper sphere of authority” … . Second, TLC manufactured a “comprehensive set of rules without benefit of legislative guidance” … . TLC has certain delineated powers to ensure that drivers are capable of driving safely (see New York City Charter § 2300; Administrative Code of City of NY §§ 19-505[b][3], [d], [h], [l]; 19-512.1[a]). However, nothing in the Charter or the enabling Code provisions contemplates the establishment and outsourcing of a miniature health insurance navigation and disability insurance department. Third, no expertise in the field of health care services or disability insurance was involved in the development of the rule (indeed, this is not TLC’s area of expertise), a fact highlighted by the lack of technical discussion at the hearings on the proposed rule amendments … . Matter of Ahmed v City of New York, 2015 NY Slip Op 04733, 1st Dept, 6-4-15