A Federal Court has determined that the City of New York’s licensing provisions for tow truck operators violates the interstate commerce clause of the United States Constitution. In the case of Automobile Club of New York, Inc. v. Dykstra, Judge Owen of the United States District Court for the Southern District of New York found that the City failed to provide any statistics or other proof that it actually achieved its goal of increased owner safety through its licensing requirements for operators from outside the City.
For almost two decades, New York City has enjoyed an informal reciprocal agreement with other States and surrounding counties within New York State which allowed a tow truck operator from outside the City to operate within the City. On March 31, 2004, this changed when New York City seized 21 tow trucks from other States or New York Counties. New York City seized these trucks on the sole ground that they were not properly licensed to operate within the City limits. The Federal Court found that these seizures impeded both interstate and intrastate commerce, and therefore were prohibited by the Commerce Clause of the Constitution.
Upon review of New York City’s licensing procedure, the Court invalidated the withholding of licenses based upon a required criminal background check of an out of City operator’s individual drivers. New York City justified the seizures by claiming that this criminal background check was necessary to provide increased safety for automobile owners but failed to provide statistical evidence supporting this rationale. Therefore, the Court ruled that New York City cannot preclude an otherwise qualified driver from another state or county from operating within the city.
The City also seized some trucks on the basis that they did not fit within the City’s definition of towing. New York City regulations drastically reduced the activities that constitute towing and the vehicles that can carry out such activities from those defined in New York State Vehicle and Traffic Law § 107-b. New York City defined towing as “the driving of a tow truck.” Utilizing this definition, the City seized vehicles that did not fit this description. Through Vehicle and Traffic Law § 1600, State law preempts any local legislation in the area. The Court found that the City of New York may vary from the New York State requirements for towing in limited areas, but does not have the power to redefine towing, which is already defined in the State Vehicle and Traffic Law. With this decision, the Court has limited municipal restrictions of commercial activity otherwise permitted by State law.