WESTOVER CAR RENTAL , LLC v. NIAGARA FRONTIER TRANSPORTATION AUT ( 2015 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
1122
CA 15-00719
PRESENT: SCUDDER, P.J., SMITH, CARNI, LINDLEY, AND VALENTINO, JJ.
WESTOVER CAR RENTAL, LLC, DOING BUSINESS AS
DOLLAR/THRIFTY CAR RENTAL, AND WESTOVER CAR
RENTAL, LLC, DOING BUSINESS AS THRIFTY AIRPORT
PARKING, PLAINTIFFS-APPELLANTS-RESPONDENTS,
V MEMORANDUM AND ORDER
NIAGARA FRONTIER TRANSPORTATION AUTHORITY,
DEFENDANT-RESPONDENT-APPELLANT.
PALADINO CAVAN QUINLIVAN & PIERCE, BUFFALO (SHANNON M. HENEGHAN OF
COUNSEL), FOR PLAINTIFFS-APPELLANTS-RESPONDENTS.
JAECKLE FLEISCHMANN & MUGEL, LLP, BUFFALO (HEATH J. SZYMCZAK OF
COUNSEL), FOR DEFENDANT-RESPONDENT-APPELLANT.
Appeal and cross appeal from an order of the Supreme Court, Erie
County (Timothy J. Walker, A.J.), entered June 11, 2014. The order,
among other things, granted in part and denied in part the motion of
defendant to dismiss the complaint.
It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by granting defendant’s motion in its
entirety and dismissing the complaint and as modified the order is
affirmed without costs.
Memorandum: Defendant is a public benefit corporation that
operates the Buffalo Niagara International Airport. Plaintiffs own
and operate businesses located across the street from the airport that
provide airport parking, car rentals, and a shuttle service to and
from the airport. Pursuant to 21 NYCRR 1160.21, operators of car
rental businesses and off-airport parking lots such as plaintiffs are
charged a tariff or access fee for access to the airport property.
The access fee is calculated as a percentage of the gross revenue of
the car rental business or off-airport parking lot, with a minimum fee
of 4% of any gross revenue under $500,000, and a maximum fee of 10% of
any gross revenue over $1,500,000 (see 21 NYCRR 1160.21). Plaintiffs
commenced this action seeking, inter alia, an order determining that
defendant’s business practices are unlawful and that the imposition of
the access fees violates plaintiffs’ rights under the constitutions of
the United States and the State of New York. Plaintiffs appeal and
defendant cross-appeals from an order that granted in part defendant’s
CPLR 3211 (a) (7) motion by dismissing the complaint with the
exception of the fourth cause of action.
-2- 1122
CA 15-00719
On appeal, plaintiffs contend that Supreme Court erred in
granting defendant’s motion with respect to the first and third causes
of action because plaintiffs properly stated claims for violations of
their right to due process. We reject that contention. In order to
establish that they were denied substantive due process, plaintiffs
“must establish a cognizable property interest, meaning a vested
property interest” and “must show that the governmental action was
wholly without legal justification” (Bower Assoc. v Town of Pleasant
Val., 2 NY3d 617, 627). Here, plaintiffs’ allegations in the
complaint that the fees imposed for access to the airport
“unreasonably interfere[] with [plaintiffs’] vested property right to
make a profit” do not implicate a cognizable property interest
inasmuch as “the activity of doing business, or the activity of making
a profit is not property in the ordinary sense” (College Sav. Bank v
Florida Prepaid Postsecondary Educ. Expense Bd., 527 US 666, 675). We
further conclude that plaintiffs failed to allege facts establishing
that “there is absolutely no reasonable relationship to be perceived
between the regulation and a legitimate governmental purpose”
(Brightonian Nursing Home v Daines, 21 NY3d 570, 576; see Transport
Limousine of Long Is., Inc. v Port Auth. of N.Y. & N.J., 571 F Supp
576, 584; see generally Bower Assoc., 2 NY3d at 628-629).
We likewise reject plaintiffs’ contention that the court erred in
granting defendant’s motion with respect to the second cause of
action, for unfair business practices. A cause of action for unfair
business practices requires a showing of “the bad faith
misappropriation of a commercial advantage belonging to another by
infringement or dilution of a trademark or trade name or by
exploitation of proprietary information or trade secrets” (Eagle
Comtronics v Pico Prods., 256 AD2d 1202, 1203; see Macy’s Inc. v
Martha Stewart Living Omnimedia, Inc., 127 AD3d 48, 56). Here, the
allegations set forth in the complaint lack the requisite elements to
set forth such a cause of action inasmuch as “plaintiffs did not
allege that the defendant[] misappropriated their labors, skills,
expenditures, or good will or otherwise attempted to capitalize on
[plaintiffs’] name or reputation in the [car parking or rental]
business” (Abe’s Rooms, Inc. v Space Hunters, Inc., 38 AD3d 690, 693;
see Eagle Comtronics, 256 AD2d at 1203).
In addition, we reject plaintiffs’ contention that the court
erred in granting defendant’s motion with respect to the sixth cause
of action, which alleges that the access fees imposed upon plaintiffs
violated the Commerce Clause. Even assuming, arguendo, that defendant
acts as a market regulator and not a market participant and is
therefore subject to the restraints of the Commerce Clause (see
Airline Car Rental, Inc. v Shreveport Airport Auth., 667 F Supp 303,
305-306; see generally Reeves, Inc. v Stake, 447 US 429, 436-437), we
conclude that the access fees imposed upon plaintiffs pursuant to 21
NYCRR 1160.21 of no more than 10% of gross revenues “[are] a
reasonable levy and [do] not constitute an objectionable burden on
interstate commerce” (Toye Bros., Yellow Cab Co. v Irby, 437 F2d 806,
811; see Airline Car Rental, Inc., 667 F Supp at 313-314; Transport
Limousine, 571 F Supp at 583).
-3- 1122
CA 15-00719
We agree with defendant on its cross appeal, however, that the
court erred in denying its motion with respect to the fourth cause of
action, alleging an equal protection violation. We therefore modify
the order by granting defendant’s motion in its entirety and
dismissing the complaint. To state a cause of action for violation of
equal protection based upon a claim of selective enforcement of a
statute or regulation, the plaintiff must allege that “first, a person
(compared with others similarly situated) is selectively treated and
second, such treatment is based on impermissible considerations such
as race, religion, intent to inhibit or punish the exercise of
constitutional rights, or malicious or bad faith intent to injure a
person” (Bower Assoc., 2 NY3d at 631; see Masi Mgt. v Town of Ogden
[appeal No. 3], 273 AD2d 837, 838). Here, plaintiffs do not allege
that any purported selective treatment was based upon race, religion,
or an attempt to punish them for exercising a constitutional right
(see Bower Assoc., 2 NY3d at 631), nor have plaintiffs alleged “that
‘defendant[] maliciously singled out [plaintiffs] with the intent to
injure [them]’ ” (Masi Mgt., 273 AD2d at 838, quoting Crowley v
Courville, 76 F3d 47, 53). Contrary to plaintiffs’ contention,
allegations that plaintiffs were treated differently from a similarly
situated business are not sufficient to state a claim for an equal
protection violation inasmuch as “a demonstration of different
treatment from persons [or businesses] similarly situated, without
more, [will not] establish malice or bad faith” (Crowley, 76 F3d at
53).
Entered: November 20, 2015 Frances E. Cafarell
Clerk of the Court