SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

---------------------------------------------------------------------X
MOUSSA OUSMANE, ANTONIA DELGADO and
MOHAMMED ALI
Index No. ________
Individually, and on behalf of all others similarly situated
as class representatives

Plaintiffs, MEMORANDUM
OF LAW
-against-

CITY OF NEW YORK, CHRISTOPHER WARD,

Commissioner of the Department of Environmental
Protection and Chairperson of Environmental Control
Board, GRETCHEN DYKSTRA, Commissioner of the
Department of Consumer Affairs, and THOMAS R.
FRIEDEN, Commissioner of the Department of Health &
Mental Hygiene

Defendants.
---------------------------------------------------------------------X

PLAINTI FFS’MEMORANDUM OFLAW I N

SUPPORT OF THEIR MOTION FOR A PRELIMINARY INJUNCTION

Plaintiffs Moussa Ousmane, Antonia Delgado, and Mohammed Ali, on behalf of

themselves and all others similarly situated, by and through counsel, the Urban Justice Center,

he
rebymovepur
sua
ntt
oAr
ti
cl
e63o
ftheCi
vilPr
act
iceLa
wan
dRul
es(
“CPLR”
),f
ora

preliminary injunction against Defendants City of New York; Christopher Ward, Commissioner

of the Department of Environmental Protection and Chairperson of Environmental Control

Board; Gretchen Dykstra, Commissioner of the Department of Consumer Affairs; and Thomas

e
R. Frieden, Commissionroft
heDe
par
tme
ntofHe
alt
h& Me
nta
lHy
gie
ne(
col
lec
ti
vel
y,“
the

Ci
ty”
).
 INTRODUCTION

Plaintiffs are licensed, tax-paying entrepreneurs who sell food and merchandise in the

streets and public spaces of New York City. Carrying on a tradition that goes back nearly two

hundred years, they are primarily first generation immigrants who are using vending as a

stepladder to the American Dream. With few employment opportunities other than vending, they

stand on the sidewalk for long hours in all weather to support themselves and their families.

During the summer of 2003, Defendants dramatically increased the monetary penalties

required to be paid by Plaintiffs for violations of the New York City Administrative and Health

Codes. For even the most minor violations of the vending laws, fines were raised as much as

four-fold –from $250.00 to $1,000.00. The result has been devastating for Plaintiffs, who were

already in a precarious economic position: they are being forced to close their businesses, they

are being threatened with eviction from their apartments and the garages where they store their

pushcarts, and they are faced with the loss of their vending licenses.

TheNe
w Yor
kCi
tyAdmi
nis
tr
ati
vePr
oce
dur
eAc
t(“
CAPA”
)requires that any such

policy change be subject to certain public notification requirements, including publication in the

official City newspaper, the City Record, community notice, and a public hearing. Incredibly, the

City completely failed to abide by any of the requirements of CAPA when it implemented the

new vending fines: failed to publish a prior notice in the City Record; failed to announce the

r
ule
’spur
pos
e;failed to solicit written comments; failed to hold a public hearing; failed to notify

the City Council, the news media, and the Community Boards; and failed to again publish notice

in the City Record thirty days prior to the rule becoming effective. These actions by the City

were in clear violation of the requirements of the New York City Charter, and they have

2
threatened the Plaintiff class of more than twelve thousand struggling, small businesspeople with

irreparable harm.

As soon as they learned of the fine increase, Plaintiffs sought information about the new

policy and whether it was promulgated properly. After much delay, the City finally provided

evidence verifying where and when the fine increase was approved. Despite repeated requests,

however, the City has provided no evidence whatsoever that the fine increase complied with

sr
CAPA’ ul
ema
kingpr
ovi
si
ons
. While the City has continued to levy the illegal penalties against

vendors, Plaintiffs completed their own thorough search of the City Record and found no

indication that the CAPA requirements were met.

l
Accordingly, Plaintiffs bring this class action seeking a judgment decar
ingt
heCi
ty’
s

increased penalty schedule null and void; preliminarily and permanently enjoining its

enforcement; and awarding Plaintiffs compensatory damages for their injuries.

LEGAL AND FACTUAL BACKGROUND

The Vending Regulations

New York City laws and regulations contain numerous provisions regulating the sale of

food and merchandise in public space. See, e.g., NYC Admin. Code §17-307 (making it illegal

to act as a food vendor without first obtaining a license from the Department of Health); NYC

Admin. Code §20-465 (establishing restrictions on the placement of merchandise vending

pushcarts, vehicles, and tables); 6 RCNY §2-314 (listing streets which are restricted to vending

during various days and times); NYC Health Code §89.05 (requiring mobile food vendors to

keep written records of daily gross sales and expenses). Violations of these regulations are civil

infractions which are adjudicated before administrative law judges (“

ALJs”
) at the

Environmental Control Board (“

ECB”
). See NYC Charter § 1404(c).

3
 The majority of vending violations are subject to a graduated penalty system, known as

t
hemul
ti
pleof
fens
esc
hedu
le(
“MOS”
),whi
che
sta
bli
she
sra
nge
sfo
rea
chs
ubs
equ
enti
nfr
act
ion

during a two-year period. The first violation within each two-year period is punishable by a fine

of between $25.00 and $50.00; the second by a fine of between $50.00 and $100.00; the third by

a fine of between 100.00 and $250.00; and the fourth or subsequent violation of a fine between

$250.00 and $1,000.00. See NYC Admin. Code §§ 17-325, 20-472.

In addition, mobile food vendors are regulated under Articles 81 and 89 of the NYC

Health Code. Most Article 89 violations are subject to a nearly identical four-tiered MOS

schedule, while persons found guilty of violating Article 81 are subject to fines of between

$200.00 and $2,000.00 per infraction, irrespective of the number of prior violations. See NYC

Health Code §§ 89.23, 3.12.

Although the NYC Administrative and Health Codes establish ranges for each violation

penalty, ALJ
’sha
venodi
scr
eti
ont
ode
ter
min
efi
nesi
nind
ivi
dua
lca
ses
.Ra
the
r,t
heECB

establishes mandatory penalty levels that are set forth via detailed penalty schedules. See

Affidavit of Sean Basinski at ¶ ¶ 17, 20 and Appendix K (ECB memoranda dated January 20,

1992 and June 8, 1998).Pr

iort
othes
umme
rof20
03,t
heECB’
sma
nda
tor
ype
nal
tyl
eve
lsf
or

MOS violations were set at the minimum values of each legal range. Thus, for their fist violation

within each two-year period, vendors were required to pay $25.00; for the second, $50.00; for

the third, $100.00; and for the fourth and subsequent violations, $250.00. See Basinski Aff. at ¶

20 and Appendix C (ECB memorandum dated July 14, 2003).

During the summer of 2003, the ECB approved an increase in MOS penalties to their

maximum value in each permissible range, doubling and in some cases quadrupling the fines

paid by vendors. The penalty for a first violation within two years is now $50.00, for the second

4
violation, $100.00; for the third violation, $250.00; and for the fourth and subsequent violations,

$1,000.00. Non-MOS violations were also increased, from $100.00 to $200.00 for vendors who

are found guilty, and from $200.00 to $400.00 for vendors in default. These new penalty levels

(
col
le
cti
vel
y,t
he“
Inc
rea
sedPe
nal
tySc
hedul
e”)
,whi
chwe
rema
dee
ffe
cti
veonJ
uly17,20
03,

were communicated to ECB ALJs via a memo from the ECB Legal Di
rec
tort
o“Al
lALJ
s”.See

Basinski Aff. at ¶ 6.

The Plaintiffs

Plaintiffs are licensed street vendors who have received, or may receive, fines under the

Increased Penalty Schedule and are threatened with irreparable harm as a result. Plaintiffs

support themselves and their families solely from their vending activities. The fines they have

incurred under the Increased Penalty Schedule have threatened their businesses and their ability

to provide basic life necessities for themselves and their families. Burdened with the increased

fines, Plaintiff Moussa Ousmane risks having the electricity turned off in his apartment and

losing his vending license when it comes up for renewal next month. See Ousmane Aff. at ¶ 6.

Plaintiff Antonia Delgado is out of work because she can no longer afford to pay the storage fees

at the garage where she keeps her merchandise. See Delgado Aff. at ¶ 6. Plaintiff Mohammed

Ali also cannot pay the rent at the garage where he stores his pushcart and is threatened with

losing his business. See Ali Aff. at 7.

Mr
.Ous
mane
’s,Mr
s.De
lga
do’
s,a
ndMr
.Al
i’
ssi
tua
ti
onsa
ren
otun
ique
.Eve
ryd
ay,

members of Plaintiff class of more than twelve thousand New York City street vendors are faced

with fines under the Increased Penalty Schedule which are threatening their livelihoods. They

file this lawsuit to challenge a severe penalty increase that was promulgated without their

5
knowledge and in clear violation of the very law that was designed to give input to the people,

like them, who stand to be affected by the change.

Additional legal and factual background is contained in the Affidavits of Moussa

Ousamane, Mohammed Ali, Antonia Delgado, Sean Basinski, and Brien Van Wagner, and in the

argument portion of this memorandum.

ARGUMENT

Pl
ai
nti
ff
’smo
tio
nforapr
eli
min
aryi
njunc
ti
onu
nde
rCPLRAr
ti
cle63s
houl
dbeg
rant
ed.

It is well established that a preliminary injunction should be granted when the party seeking such

relief demonstrates 1) a likelihood of success on the merits of the claim; 2) the prospect of

irreparable harm if the relief is withheld; and 3) a balance of equities tipping in the moving

pa
rty
’sf
avor. See Doe v. Axelrod, 73 N.Y.2d 748, 536 N.Y.S.2d 44 (1988). All three elements

are present in this case.

I. Plaintiffs are likely to succeed on the merits because the Increased Penalty
Schedule was not promulgated in the manner prescribed by CAPA

The City Administrative Procedure Act requires that any city agency, before

promulgating rules and regulations, must provide the public an opportunity to comment

beforehand, both in writing and in person at a public hearing. See NYC Charter §1043. CAPA

provides, in relevant part:

a. Authority. Each agency is empowered to adopt rules necessary to carry out the
powers and duties delegated to it by or pursuant to federal, state or local law. No
agency shall adopt a rule except pursuant to this section.

b. Notice 1. Each agency shall publish the full text of the proposed rule in the
CityRe corda tleastthirtyda yspr i
ort oth edates etforapub l
iche a
ring…[ S]uc h
published notice shall include a draft statement of the basis and purpose of the
proposed rule, the statutory authority, including the particular sections and
subdivisions upon which the action is based.

6
 2.Co pi
esoft henot i
c es ha l
lbetransmi t
tedt ot he[ Cit
yCo unc i
l]…,t
hec
hai
rsof
all community boards, the news media and civic organizations.

3d. Opportunity for and consideration of agency and public comment. The
agency shall provide the public an opportunity to comment on the proposed rule
(i) through submission of written data, views, or arguments, and (ii) at a public
hearing unless it is determined by the agency in writing, which shall be published
in the notice of proposed rulemaking in the City Record, that such a public
hearing on the proposed rule would serve no public purpose. After consideration
of the relevant comments presented, the agency may adopt a final rule pursuant to
subdivision e of this section.

e. Effective date. 1. No rule shall be effective until (a) the rule is filed by the
agency with the corporation counsel for publication in this Compilation, (b) the
rule and statement of basis and purpose is transmitted to the council for its
information, and (c) the rule and a statement of basis and purpose have been
published in the City Record and thirty days have elapsed after such publication.

(emphasis added). These CAPA provisions have been described as “

ane
xampl
eofa

l
egi
sl
at
ivede
sir
etog
ivet
hec
it
iz
enr
yav
oic
eint
heo
per
ati
ono
fgove
rnme
nt.
”Association of

Messenger Services, Inc. v. New York, 136 Misc.2d 869, 519 N.Y.S.2d 506 (N.Y. Sup. Ct.

1987).

The broad language of CAPA, as well as the legislative history underlying its passage,

ma
kec
lea
rtha
ttheI
ncr
eas
edPe
nal
tySc
hedu
lewa
sa“
rul
e”t
hatwa
spr
omu
lga
tedbyaCi
ty

“
age
ncy
”.CAPA therefore applies, and the City acted illegally when it promulgated the

Increased Penalty Schedule without first explaining the basis for its decision and affording

interested parties an opportunity to comment.

Fi
rst
,the
rec
anbenoque
sti
ont
hatt
heDe
par
tme
ntso
fCo
nsume
rAf
fai
rs(
“DCA”
),

Envi
ron
ment
alPr
ote
cti
on(
“DEP”
),a
ndHe
alt
h& Me
nta
lHy
gie
ne(
“DHMH”
),a
re“
age
nci
es”

within the meaning of CAPA.1 Thede

fini
ti
onof“
age
ncy
”isi
nte
nde
dtobea
sbr
oada
sla
wful
ly

possible to ensure that the CAPA procedures set forth are applied as broadly as possible. See

7
Report of the New York City Charter Revision Commission, December 1986-November 1988

Vol
.2(
Apr
il1
989
)(“
theCh
art
erRe
por
t”)a
t85(
Bas
ins
kiAf
f.a
t¶21).

Se
cond
ly,t
heI
ncr
eas
edPe
nal
tySc
hedul
efa
ll
ssqua
rel
ywi
thi
nthede
fin
iti
ono
fa“
rul
e”

under both the plain text and the s

pir
ito
fCAPA.CAPAde
fine
sa“
rul
e”a
s:

the whole or part of any statement or communication of general applicability that

(i) implements or applies law or policy, or (ii) prescribes the procedural
requirements of an agency including an amendment, suspension, or repeal of any
such statement or communication.

a. ''Rule'' shall include, but not be limited to, any statement or communication
which prescribes (i) standards which, if violated, may result in a sanction or
penalty; (ii) a fee to be charged by or required to be paid to an agency; (iii)
standards for the issuance, suspension or revocation of a license or permit; (iv)
standards for any product, material, or service which must be met before
manufacture, distribution, sale or use; (v) standards for the procurement of goods
and services; (vi) standards for the disposition of public property or property
under agency control; or (vii) standards for the granting of loans or other benefits.

NYC Charter §1041(5) (emphasis added). The Increased Penalty Schedule is the type of

ume
communication that is specifically en rat
eda
sa“
rul
e”und
er§ 1041(5)(a)(i) of CAPA

because the increased vending fines p

res
cri
bedn
ew“
sta
nda
rds
,wh
ich
,ifvi
ola
ted,ma
yre
sul
tin

as
anc
ti
onorpe
nal
ty.
”Thepe
nal
ti
es,r
ang
ingf
rom $5
0.00t
o$1
,000.
00,a
rea
kint
oa“
fee to be

c
har
gedbyorr
equ
ire
dtobep
aidt
oana
genc
y,”by vendors who are found guilty of violating

vending ordinances. Under the clear text of CAPA, the Increased Penalty Schedule is therefore a

rule.2

1
TheEnv i
ronme nta lCon t
rolBoa rdi sal
soa na g encyasde f
inedbyCAPA be c aus
ei tisa“ boa rd,thema jori
tyof
whose members are appointed by, or appointed upon the recommendation of, one or more of such officers [provided
for in t
heCha rt
e r
].”NYC Charter §1041(2)(3).
2
The Increased Penalty Schedule, by contrast, which has had a dramatic impact on the lives of street
vendors, is decidedly not the type of communication that is specifically exempt from CAPA, such as 1) a statement
which relates only to internal management; 2) a statement of general policy, which has no legal effect but is merely
explanatory; or 3) a statement or communication concerning the allocation of agency resources or personnel. See
NYC Charter §1041(5)(b)(i-iii).

8
 Even if it was not specifically denoted as such, the Increased Penalty Schedule would be

a“
rul
e”b
eca
usei
tisas
tat
eme
nto
fge
ner
alpr
inc
ipl
etha
tisb
einga
ppl
ie
dbya
nag
enc
ywi
thout

regard to other facts and circumstances relevant to the regulatory scheme. See 1700 York Assocs.

v. Kaskel, 182 Misc.2d 586, 701 N.Y.S.2d 233 (N.Y. Civ. Ct. 1999). A rule need not regulate

the general public; if it applies across-the-board to the segment of the population within its ambit

without regard to individual circumstances or mitigating factors, it is a rule. See Schwartfigure v.

Hartnett, 83 N.Y.2d 296, 632 N.E.2d 434 (1994) (since recoupment policy was a rigid, numerical

policy applied across-the-board to all unemployment recipients, it was a rule under the State

Administrative Procedure Act (

“SAPA”
)); Cordero v. Corbisiero, 80 N.Y.2d 771, 587 N.Y.S.2d

266 (1992) (since suspension policy applied to every jockey who committed an infraction and

unsuccessfully appealed, it was a rule under SAPA). TheECB’

sown internal memoranda, along

with the testimony of experienced litigants before that tribunal, make clear that the Increased

Penalty Schedule is applied by ALJs without discretion against all vendors found guilty of

violating the vending regulations, without regard to individual circumstances or mitigating

factors. See Basinski Aff. at ¶ ¶ 6, 17, 20. I

tist
her
efo
rea“
rul
e”f
orCAPA purposes.

Thed
efi
nit
ionofa“
rul
e”i
stob
eco
nst
rue
dbr
oad
lyt
oaccommodate CAPA’
sba
sic

objectives: to inform and gather input from the public on the development and promulgation of

City rules that affect New Yorkers, and to provide accountability and openness. See Charter

Report at 86; Eric Lane, When is a Rule a Rule, 3 City Law 1, Jan/Feb 1997 (Basinski Aff. at ¶

22). Ana
gen
cyma
ynotc
irc
umve
ntCAPA’
srul
e-making requirements by giving a different

label to what is in purpose and effect a rule. See Edenwald Contracting Co. v. New York, 86

Misc. 2d 711, 384 N.Y.S.2d 338 (N.Y. Sup. Ct. 1974).

9
 In a 2001 case, Singh v. Taxi& Li
mous
ineCo
mm’
n, the First Department held that a

po
lic
ycha
nges
imi
lart
oth
eInc
rea
sedPe
nal
tySc
hedul
ewa
sa“
rul
e”f
orpu
rpos
esoft
heCAPA.

See 282 A.D.2d 368, 723 N.Y.S.2d 476 (

1stDe
p’t
).I
nSingh, a taxi driver challenged the

validity of a New Yor

kCi
tyTa
xi& Li
mou
sin
eCommi
ssi
on(
“TLC”
)re
gul
at
iont
hati
ncr
eas
ed

penalties against taxicab drivers by shortening the grace period for license renewals. After the

trial court dismissed the case, the First Department reversed, holding that, since the policy

c
hang
e“ma
ter
ial
lya
ffe
cte
dther
ight
sofa
lldr
ive
rse
qua
llya
ndwi
thou
texc
ept
ion,
”itwa
sa

“
rul
e”f
orCAPApu
rpos
es.TheTLC’
sfa
il
uret
oho
ldahe
ari
ng,a
sre
qui
redby CAPA, rendered

the new policy void. See 723 N.Y.S.2d at 477.

In Association of Messenger Services, the court struck down and enjoined the

implementation of a new traffic rule banning bicyclists from certain streets in midtown

Manhattan. See 136 Misc.2d. 869, 519 N.Y.S.2d 506. The NYC Department of Transportation

provided informal notice to the public prior to the policy change via a press release, but did not

c
ompl
ywi
tht
hef
orma
lma
nda
tesofCAPA.TheCi
tya
rgu
edt
hatbi
cyc
leb
anwa
sno
ta“
rul
e”

under CAPA, but the court disagreed. Since a decision had been made “
tor
egu
lat
econduct

a
ffe
cti
ngas
ign
ifi
cants
egme
ntoft
hep
opu
lat
ion
,”i
twa
sar
ulef
orpu
rpos
eso
fCAPA,a
ndt
he

rule making procedures could not be circumvented, the court held. 519 N.Y.S.2d at 510.

In fact, when city agencies other than the ECB have increased fines against vendors, they

have fully complied with CAPA rulemaking procedures. In 2002, the DHMH amended the

Health Code §3.12(b) to increase the minimum fine for unlicensed vending from $200.00 to

$1,000.00, among other changes. Before adopting the change, the DHMH published in the City

Record a notice of its intention to amend, and a notice of public hearing, which was held on

October 24, 2002. Three people testified at the hearing, including one person who submitted

10
written comments. After its next meeting, during which the Board of Health adopted the

increase, notice was published in the City Record, including a statement of purpose that the

c
hang
ewa
sadop
tedt
o“de
tervi
ola
tio
nsoft
heHe
alt
hCo
dewh
icha
dve
rse
lya
ffe
ctt
hep
ubl
ic

health, by increasing the cost of engaging in an activity or business subject to a Department

pe
rmi
t.
”See Basinski Aff. at ¶ 23.

Like the DHMH increase, and the policy changes in Singh and Messenger Services, the

Increased Penalty Schedule was a policy change that materially affected the rights of a

significant segment of the population equally and without exception. As the court in Messenger

Services indicated, it is not in harmony with the democratic process to permit an agency to

change governing rules overnight without notice to the community or the segment of population

affected. 519 N.Y.S.2d at 510; cf. New York Comm. for Taxi Safety v. Taxi & Limousine

Comm’
n,177 Misc.2d 855, 677 N.Y.S.2d 449 (N.Y. Sup. Ct. 1998) (CAPA claim denied

be
caus
e“t
heTLCa
ffo
rde
dthepub
licand the taxicab industry adequate notice and opportunity

t
ocomme
ntont
hepr
opo
sedr
egul
ati
ons
”);Berdecia v. Perales 188 A.D.2d 311, 590 N.Y.S.2d

48
4(1s
tDe
p’t199
2)(
Cit
y’sma
ssma
il
ingt
ofune
raldi
rec
tor
sth
roug
hou
tther
egion held to be

sufficient notice of a regulation placing limits on burial expenses).

Yet that is precisely what happened in this case. With no notice whatsoever to the

vending community –and no apparent justification for its actions -- the City dramatically

increased fines against a whole class of hard-working, low-wage workers. Had they had any

opportunity to speak out against such a severe attack on their livelihoods, the vendors would

have done so. See Delgado Aff. at ¶ 11; Ali Aff. at ¶ 9. But even the most informed vendors did

not know about the Increased Penalty Schedule until after it happened; because the City failed to

publish a notice of the proposed rule thirty days prior in the City Record; failed to announce the

11
purpose of the rule: failed to solicit written comments; failed to hold a public hearing; failed to

provide notice to the City Council, the news media, and the Community Boards; and failed to

again publish notice in the City Record thirty days prior to the rule becoming effective. Indeed,

t
heCi
ty’
sfa
il
uret
ofollow any of the CAPA procedures when it promulgated the Increased

Penalty Schedule completely subverted the democratic principles that are t

her
eas
onf
orCAPA’
s

existence.

Asama
tt
erofl
aw,t
heCi
ty’
sfa
ilu
ret
ocomp
lywi
thCAPA’
sduepr
oce
sss
afe
gua
rds

requires that the Increased Penalty Schedule be declared void and invalid. See Messenger

Services; Singh; Metropolitan Asso. of Employment Agents v. Gourdine, 108 A.D.2d 633, 485

N.
Y.S.
2d26
6(1s
tDe
p’t1985) (invalidating DCA regulations regarding employment agencies

“
sol
elyb
eca
uset
heCo
mmi
ssi
one
rfa
il
edt
opu
bli
sht
hepr
opos
edr
egul
at
ionsi
ntheCity Record

ont
wos
epa
rat
eoc
cas
ion
sasr
equi
red”byCAPA)
.

Where there is no evidence the agency promulgated a rule properly, the rule must be

invalidated. See 10 Apt. Assocs. v. New York State Div. of Hous. & Community Renewal, 240

A.D.2d 585, 658 N.Y.S.2d 674, (

2ndDe
p’t19
97)
.Int
hisc
ase
,whe
rePl
ai
nti
ff
’si
nve
stigation

ha
ssh
ownt
hatt
heCi
ty’
spr
omu
lga
tio
noft
heI
ncr
eas
edPe
nal
tySc
hed
uledi
dno
tcomply with

CAPA, and where the City has provided no evidence to the contrary, a preliminary injunction is

warranted.

II. Plaintiffs are likely to succeed on the merits because promulgation of the
Increased Penalty Schedule was arbitrary and capricious

f
Plaintif
sar
eal
sol
ike
lyt
osu
cce
edo
nth
eme
rit
sbe
caus
etheCi
ty’
sde
cis
iont
oad
optt
he

Increased Penalty Schedule without providing any explanation was arbitrary and capricious as a

matter of law.

12
 The test to establish whether a rule is arbitrary and capricious involves determining if the

action is justified by examining whether there is some foundation on the record. See 1 N. Y. Jur.,

Administrative Law,§184,p.609
.“An action is arbitrary when it is without a sound basis or

reason and is promulgated wi

tho
utr
ega
rdt
oth
efa
cts
.”Pell v. Board of Education, 34 N.Y.2d

222, 313 N.E.2d 321 (1974). Although discretion is generally given to the agency, an

administrative action is to be upheld only when there is evidence that constitutes a rational basis

to support it. See Brodsky v. Zagata, 222 A.D.2d 48, 646 N.Y.S.2d 188 (3d Dep't 1996).

In a case involving SAPA, Car Barn Flats Residents' Ass'n v. New York State Div. of

Hous. & Community Renewal, Plaintiffs sought review of an agency order allowing landlords to

convert their apartment buildings to individual electrical metering. 184 Misc.2d 826, 708

N.Y.S.2d 556 (N.Y. Sup. Ct. 2000). The housing agency failed to provide any explanation for

adopting the rule. Apart from the SAPA claim, the court also invalidated the policy change on

the grounds that it was without justification and therefore arbitrary and capricious as a matter of

law. 708 N.Y.S. 2d at 561. See also Richardson v. Commissioner of N.Y. City Dep't of Social

Servs., 88 N.Y.2d 35, 665 N.E.2d 1059 (1996) (invalidating a benefits policy as arbitrary and

capricious because there was no reasoned explanation for its implementation).

Here, as in Car Barn Flats and Richardson, the Increased Penalty Schedule must be struck

down as being arbitrary and capricious because the City has provided no justification, in the City

Record or elsewhere, for its sudden decision to increase vending fines. “

Abs
entj
ust
if
ica
tio
nfor

t
hec
hang
e,t
her
ulei
sinva
li
d.” Car Barn Flats at 561. A preliminary injunction is therefore

warranted.

III. Plaintiffs are likely to succeed on the merits because the Increased Penalty
Sche dul ewasani ll
egale xtensionoft heECB’ sauthority

13
 Plaintiffs are also likely to succeed on the merits because the ECB lacked the rulemaking

authority under the City Charter to adopt the Increased Penalty Schedule. The general rule

regarding the limits of administrative power is as follows:

An administrative agency . . . must strictly confine the exercise of

its delegated authority within the boundaries of the Legislature's
mandate. However much courts may defer to administrative
expertise, they may not countenance action which patently
contravenes the vires expressly laid down in the enabling statute;
they may not "sanction administrative lawlessness."

Kasper v. O'Connell, 38 Misc.2d 3, 237 N.Y.S.2d 722 (N.Y. Sup. Ct. 1963).

NYC Ch
art
er§
140
4(c
)es
tab
lis
hest
heECB’
ssc
opeofa
uth
ori
tybyp
rovi
dingt
hat“
the

environmental control board shall enforce the provisions of the charter and the administrative

code, and any rules and regulationsma

det
her
eund
er,wh
ich‘
rel
atet
o… t
her
egul
ati
ono
fst
ree
t

”(emphasis added). While the NYC Charter gives the ECB the authority to adopt and
peddling.’

amend regulations in other areas (i.e., air and water emissions) it only grants them the power to

enforce regulations governing vendors. New York law makes clear the distinction between

making and enforcing the law. See Bird v. Romano, 125 Misc. 2d 690, 480 N.Y.S.2d 295 (N.Y.

Sup. Ct. 1984).The authority to adopt and amend regulations governing merchandise and food

vendors is granted to the DCA,3 DHMH,4 and the Board of Health,5 respectively.

3
TheDCACommi s
s i
o ne rhast hep owe rto“ enfor cea l
ll awsr elat
ingtot hea dve rt
isinga ndof f
e ri
ngf orsalea ndt he
s al
eofa l
lc ommo dit
ies,g oods ,wa r
e sands ervi
ce s.”NYCCha rt
er§22 03(d).Th eDCAe s
tablishesr u
lesr eg ula t
ing
general (i.e., merchandise) vendors. See 6 RCNY §2-301 et seq. (inter alia, issuing licenses to vendors, establishing
restrictions on vendor vehicle locations, and requiring prices on vendor merchandise).
4
TheNYCCha rt
er§ 556 (c )
(9)a uthorizestheDHMHt o“ superviseandr egulate the food and drug supply of the city
a ndot he rb u s
inessesa nda ctiviti
esa ffecti
ngp ubl i
che alt
hi nt hec it
y .
” TheDHMH e st
ablishesr ulesrela tingt o
mobile food vendors. See 24 RCNY §6-01 et seq. (inter alia, issuing mobile food vendor equipment, establishing
guidelines for mobile food vendor equipment, and conducting inspections of mobile food units).
5
TheNYCCha rter§5 58( b)a uthori
z estheBoa rdofHe altht o“ alte
r,ame ndo rr epeala nypa rtoft hehe alt
hc ode”
including those parts relating to mobile food vendors. See NYC Health Code §89.01-89.39 (inter alia, establishing
penalties for health code violations regarding mobile food vending, establishing cleaning requirements for mobile
food vendors, and creating preparation requirements for mobile food vendors).

14
 In Edenwald Contracting Co., the Administrator of Transportation adopted a zoning

regulation limiting the operating hours for asphalt plants in order to reduce late night noise for

local residents. Since the City Charter only conferred the power to make recommendations, the

court held that the administrator did not have the requisite rulemaking authority, and that the rule

was therefore illegal. See 86 Misc. 2d at 720.

The documents the City has provided Plaintiffs, through FOIL requests, make it clear that

it was the ECB that adopted the Increased Penalty Schedule. See Basinski Aff. at ¶ 6. Like in

Edenwald, however, the City Charter did not empower the ECB with any such authority. When a

rule is challenged for not conforming to the legislative mandate, the court must simply compare

the enabling statute to the regulation invoked to decide whether the regulation was within the

e
agnc
y’sde
leg
ate
daut
hor
it
ySee Kasper, 237 N.Y.S.2d at 724. Here, where the Increased

Pe
nal
tySc
hedu
lec
ons
ti
tut
esa
nunl
awf
ule
xte
nsi
onoft
heECB’
saut
hor
it
y,the regulation must

be declared void and invalid.

IV. Plaintiffs will suffer irreparable harm in the absence of a preliminary

injunction

Plaintiffs are threatened with irreparable injury if they are not granted preliminary relief

be
caus
eDe
fenda
nts
’il
le
galp
romul
gat
ionoft
heI
ncr
eas
edPe
nal
tySc
hedul
eimpo
sesas
eve
re

financial hardship on them and threatens the continuation of their business. Some plaintiffs have

already been put out of work due to t

heCi
ty’
sillegal actions, and many more are threatened with

the loss of their vending businesses. Plaintiffs face eviction from their homes, disconnection of

their utilities, and the inability to provide the basic necessities for themselves and families.

Plaintiffs are primarily first generation immigrants, with limited English language skills,

who live on a subsistence level of income to support themselves and their families. It is well

e
sta
bli
she
dth
atal
osst
hatt
hre
ate
nsa
nin
divi
dua
l’sc
ont
inue
dsubs
ist
enc
eisc
lea
rlyi
rr
epa
rabl
e

15
because it cannot be adequately compensated by a monetary award sometime in the future. See

Fa
rme
rv.D’
Ago
sti
noSu
per
markets, Inc., 144 Misc. 2d 631, 544 N.Y.S.2d 943 (N.Y. Sup. Ct.

19
89)(
ina
bil
it
yofh
ome
les
spl
ai
nti
ff
stor
ede
ema
lumi
num c
ansa
tde
fenda
nts
’st
ore
sco
nst
it
ute
d

irreparable harm because of their precarious economic position); Padberg v. McGrath-

McKechnie, 108 F.Supp.2d 177 (

E.D.
N.Y.2000)(
hol
dingt
hatde
pri
vat
ionoft
axidr
ive
r’s

license constituted irreparable harm because it deprived him of his livelihood); Holt v.

Continental Group, 708 F.2d 87 (2nd Cir. 1993) (citing Sampson v. Murry, 415 U.S. 61 (1974))

r
(ir
epa
rabl
einj
ury ma
y bef
oun
d whe
rep
eop
lea
repr
eve
nte
dfr
om wo
rki
ng,wh
en“
trul
y

”
extraordinary circumstances are shown.)

Plaintiffs also risk irreparable harm because the financial burden imposed on them by the

Increased Penalty Schedule may force many of them to close their businesses. See, e.g., Frank

May Assocs. v. Boughton, 281 A.D.2d 673, 721 N.Y.S.2d 154 (

3dDe
p’t200
1)(
hol
dingt
hat

damage to business is irreparable); Gilman & Ciocia, Inc. v. Reid, 153 A.D.2d 878, 545

t19
N.Y.S.2d 387 (2nd Dep’ 89)
. Anyl
osst
hatt
hre
ate
nst
hec
ont
inu
ingv
iab
ili
tyofapa
rty
’s

business is considered irreparable. See Tom Doherty Assocs., Inc. v. Saban Entertainment, Inc.,

60 F.3d 27, 37 (2nd Cir. 1995). In addition to the financial difficulty which threatens vendors

with the closure of their businesses, the DCA requirement that all outstanding penalties be paid

before a vending license may be renewed threatens many vendors with the loss of their licenses,

without which they cannot operate their vending businesses. See NYC Admin. Code § 20-

456(b); Ousmane Aff. at ¶ 6.

Plaintiffs, who were already in a precarious economic position, have been threatened by

the Increased Penalty Schedule with the loss of their livelihoods and the closure of their vending

16
businesses. They will undeniably suffer irreparable harm in the absence of a preliminary

injunction.

V. The balance of equities favors the Plaintiffs

Plaintiffs are also entitled to a preliminary injunction because the balance of equities tips

decidedly in their favor. When balancing the equities, the court should consider whether the

injury to be sustained is more burdensome to the movant than the harm caused to the non-movant

through imposition of the injunction. See Nassau Roofing & Sheet Metal Co. v. Facilities Dev.

Corp., 70 A.D.2d 1021, 418 N.Y.S.2d 216 (3rd Dep't 1979). In this case, the injury to Plaintiffs -

- the loss of their only means of earning a livelihood, which would cause irreparable injury to

themselves and their families -- is clearly more burdensome to Plaintiffs than any harm the City

might suffer should the Increase Penalty Schedule be invalidated and the City required to return

the penalty levels to the status quo ante. While the increased penalties represent devastating

sums to Plaintiffs, even in the aggregate these amounts are inconsequential to the City. In

addition, while the hardships facing the Plaintiffs and their families are apparent, it would be

disingenuous for the City to claim hardship at being required to abide, after all, by the

rulemaking requirements of the NYC Charter, their very failure to do so which has created the

need for this litigation.

17
 CONCLUSION

For the reasons set forth herein, the Plaintiffs motion for a preliminary injunction should

be granted.

Dated: New York, New York

August 17, 2004

____________________
DOUGLAS LASDON
Urban Justice Center
Attorney for Plaintiffs
666 Broadway, 10th Floor
New York, NY 10012
(646) 602-5600 (phone)
(212) 533-4035 (fax)

18