Yep Lawsuit: New York City Bus Permit Law is Unconstitutional

Passengers wait to board a bus run by Yep Tours on Pike Street, 2015.
yep tours july 2015
Yep Tours loads passengers on Pike Street, July 2015.

As we first reported this past Wednesday, a Chinatown/Lower East Side bus operator called Yep Tours is taking the City of New York to court. In a federal lawsuit filed Feb. 14, the Massachusetts-based firm alleges that the city administration is violating its constitutional rights.  Today we have more details from the suit, which could have major implications for New York’s intercity bus law.

According to the complaint, filed in U.S. District Court in the Southern District of New York, Yep Tours is seeking $1 million in damages from the city. Defendants named in the suit are the Department of Transportation, the Department of Finance and NYC Sheriff Joseph Fucito.

Yep’s lawyers cite the equal protection and due process clauses of the 14th Amendment and the interstate commerce clause of the U.S. Constitution.

They describe the company as, “a minority owned business that brings over a million people into the city each year” and that, “has a tremendous impact on the New York City economy.” Since 2013, when Yep was incorporated, the suit notes, its owners have, “applied numerous (more than 40) times for numerous bus stops and has been denied each time with nothing more than an arbitrary reason of ‘inconvenience.’”

Photo via NYC Sheriff Twitter feed. January 2017.
Photo via NYC Sheriff Twitter feed. January 2017.

As previously reported, the city sheriff confiscated several Yep buses, citing the company’s failure to pay thousands of dollars in fines for operating without a permit. As described in the complaint, two buses were seized “on or about Jan. 17.” On Jan. 31, the city obtained  a judgment against Yep for $127,000 and made plans to sell the buses at auction Feb. 16.  “As of the date of this complaint,” the lawyers wrote, “(the) plaintiff YEP Tour(s) cannot operate in New York City as there are tow orders issued by defendants against all of their buses.”

In 2012, the governor signed legislation authorizing the city to set up a permit system which required intercity operators to load and unload passengers only from approved locations. The law was championed by State Sen. Daniel Squadron and former Assemblyman Sheldon Silver, after years of complaints from residents about the unregulated Chinatown bus industry.

Yep is now arguing that the local legislation, or at least the way it has been implemented, conflicts with the company’s rights under federal law: 

The Commerce Clause of the United States Constitution prohibits states from enacting legislation that protects its own citizens from competition from citizens of other states, that regulates conduct wholly outside of the state’s borders, or that places an undue burden on interstate commerce… The New York City ‘Bus Stop’ Permit System for the Intercity Bus Industry as implemented by defendants… violates the Commerce Clause because they are protectionist measures intended to benefit New York based transportation companies at the expense of YEP TOURS.

The lawsuit alleges that the city has discriminated against Yep because it, “operates from a minority neighborhood and more than 80% of (its) clientele are minorities.” As evidence, the company says the city has awarded more than 40 permits to Hampton Jitney and to “7 Bus,” describing these operators as, “companies that only transport passengers to-and-from New York City to the Hamptons.” Yep alleges that DOT is, “unfairly selective as to which companies are receiving bus stop permits.”

The lawyers are asking the court to, “declare the New York City ‘Bus Stop’ Permit System… invalid.” 

The city’s law department did not respond to a request for comment about the Yep lawsuit. As we reported last week, DOT has granted Yep a six-month permit on the west side of Pike Street, apparently as a result of the federal lawsuit. It was a reversal of a February decision to reject the application.

In a resolution approved this past November, Community Board 3 urged the city to deny the Yep permit. The resolution cited more than two years by the company of operating “contrary to New York City regulations.” It noted that Yep had failed to pay many thousands of dollars in fines and stated that, “its actions have demonstrated that they view enforcement actions by the NYPD… as a ‘cost of doing business,’ and that the company has a complete disregard for the concerns of the Police Department and its adverse impact on the community in which it operates.”

According to the most recent city listings, there are 17 approved bus stop permits on the Lower East Side and in Chinatown. Local elected officials have always acknowledged the importance of the intercity bus industry to the economy of Chinatown. Squadron and the community board, however, have pressed for aggressive enforcement from the NYPD because, “bus companies (were) thumbing their noses at the rules established by the DOT.”

This coming Wednesday night at 6:45 p.m., CB3’s transportation committee will discuss how it deals with applicants for bus stops that have an “accumulation of violations.”