NYC Medallion Owners File $2.5 Billion Class Action Suit Against City
The suit alleges the City “artificially” inflated yellow cab medallion prices it sold at auction by lying about their value. Case could be final chapter in medallion saga
“There was a large-scale fraudulent scheme to artificially inflate medallion values and drive up the prices…It’d be one thing if the medallion prices rose through natural market conditions. But between 2004 and 2014 they skyrocketed as a result of fraudulent manipulation by the TLC and the city of New York.” - Jon Norinsberg, lawyer who represents medallion owners in a new class action suit
A new class action lawsuit brought by two medallion owners (more are expected to join) allege the City, City politicians, the TLC, past TLC representatives and others, conspired to inflate the value of the yellow cab medallion to help raise money for the City. While the recent announcement of a $65 million medallion relief seemed to indicate some progress, it appears to be too little, too late for most medallion owners stuck with crippling medallion debt and a devalued medallion. Therefore, a class action suit may finally conclude the yellow cab medallion saga, which directly correlates to the rise of Uber and Lyft in NYC.
The class action lists several prominent defendants and cites specific instances the medallion owners believe prove their case. For example, the suit alleges city officials were warned in 2011 that the medallion market would collapse by TLC staffer Gary Roth, who wrote a memo made public in 2019 warning that “if the price of medallions dropped significantly, it could force recent medallion buyers underwater.” The suit also alleges that former TLC officials met in September 2012 to “hatch a plan” to allow Uber and Lyft to put an unlimited number of cars on city streets in what “would prove to be the coup de grace (i.e. final blow) for the New York yellow taxi industry”! This case should undoubtedly garner a lot of media attention, especially if it is not easily dismissed and advances to trial.
The lawyer representing the yellow cab medallion owners says federal racketeering law means the medallion owners are owed three times the $855 million in revenue the city earned through medallion sales from 2004 to 2014, which is how they arrive at ~$2.5 billion figure.
Link to full article.
Auto Marketplace NYC Newsletter is written by Dawood Mian, Founder & CEO of Auto Marketplace NYC. He covers the NYC for-hire transportation industry and related news. Search Auto Marketplace NYC for cars, parts, tires, technicians, body shops, reviews & more. Find great deals at TLCMKT.COM (new site AutoMarketplace.io to be launched soon, sign-up to the newsletter if you are interested to learn more ahead of launch)