## Facts

- New York City, through the Taxi and Limousine Commission (TLC), sought to increase use of hybrid taxicabs and improve fuel efficiency.
- After prior TLC rules directly requiring minimum miles-per-gallon levels were held federally preempted, the City adopted lease-rate regulations for yellow taxis.
- The challenged rules set maximum lease caps by vehicle category, allowing higher lease rates for high-MPG hybrid vehicles and lower rates for less fuel-efficient vehicles.
- Plaintiffs (taxicab industry associations and fleet operators/medallion owners) alleged the lease-rate rules were a disguised attempt to regulate fuel economy and emissions.
- Plaintiffs sought declaratory and injunctive relief and moved for a preliminary injunction to stop enforcement of the lease-rate rules.

## Issues

1. Whether the TLC lease-rate rules were expressly preempted by the Energy Policy and Conservation Act (EPCA) as laws “related to” federal fuel-economy standards.
2. Whether the rules were preempted by the Clean Air Act (CAA) as state or local measures effectively regulating emissions from new motor vehicles.
3. Whether plaintiffs satisfied the requirements for a preliminary injunction, including irreparable harm and likelihood of success (or serious questions plus a balance of hardships favoring plaintiffs).

## Decision

- The court granted a preliminary injunction enjoining enforcement of the challenged lease-rate rules.
- The court found plaintiffs showed a likelihood of success, or at least serious questions, on federal preemption under EPCA and the CAA.
- The court found irreparable harm from imminent, non-readily recoverable economic impacts and operational changes compelled by the rules.
- The court concluded the balance of hardships favored plaintiffs and that federal supremacy and regulatory uniformity supported injunctive relief at this stage.

## Legal Principles

- EPCA expressly preempts state and local laws “related to” federal fuel-economy standards; “related to” is construed broadly to include measures with a sufficient connection to fuel economy even if they do not set numeric MPG requirements.
- A locality may not accomplish indirectly—through economic incentives and penalties embedded in a regulatory scheme—what it is barred from doing directly by federal preemption.
- The CAA preempts state and local standards relating to control of emissions from new motor vehicles (subject to limited, federally authorized exceptions); measures that function as de facto emissions standards may be preempted.
- For a preliminary injunction, a plaintiff may obtain relief by showing irreparable harm and either likelihood of success on the merits or sufficiently serious questions going to the merits with hardships tipping decidedly in the plaintiff’s favor.

## Conclusion

The court preliminarily enjoined New York City’s taxi lease-rate rules because their design and effect were to steer fleet composition toward high-fuel-economy, lower-emissions vehicles, making them likely preempted by EPCA and also raising substantial CAA preemption concerns, and because immediate regulatory harms warranted interim relief.


Metropolitan Taxicab Bd. of Trade v. City of New York, 633 F. Supp. 2d 83 (S.D.N.Y. 2009)