Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion for :___________________________________________

PapersNumbered

Notice of Petition and Affidavits Annexed....................................1

Answering Affidavits and Cross Motion......................................2

Replying Affidavits......................................................................3

Exhibits......................................................................................4

_____________________________________________________________ ________________

Petitioners bring this petition seeking, among other things, to challenge the decision of respondent New York City Department of Consumer Affairs ("DCA") seizing petitioners' pedicab pending payment of a $4,000.00 fine for allowing a driver to operate a pedicab with a suspended license; a judgment that the penalty constitutes an excessive fine; a review of certain constitutional issues; and to stay the order of DCA pending this court's decision. For the reasons set forth more fully below, the petition is denied.

The relevant facts are as follows. Mahamadou Traore was licensed by the DCA as a pedicab driver on March 3, 2012. Thereafter, Mr. Traore leased a pedicab from petitioners Cycle Stone, Inc. ("Cycle Stone") and its owner, Irfan Karakus. On October 3, 2012, Mr. Traore was operating pedicab No. 1520 in Central Park without a valid license as his license was suspended in June 2012. As a result, the pedicab was seized and confiscated by officers of the Parks [*2]Department and petitioners, as owners of the pedicab, were issued Notice of Hearing, SV # 1081913 charging them with a violation of Admin. Code of the City of New York, Title 20, Chapter 2, Subchapter 9, Section 20-257(b).

On October 4, 2012, a hearing was held in front of DCA Administrative Law Judge Eryn DeFontes ("ALJ DeFontes"). At the hearing, Cycle Stone's counsel presented witnesses to testify on Cycle Stone's behalf and cross-examined Sergeant Asha Harris, the officer who issued the violation. At the hearing, Sergeant Harris testified that as part of the normal course of business, on October 3, 2012, she received an e-mail from the DCA, which included names of pedicab operators whose licensed have been revoked or expired. In accordance with the e-mail directive, Sergeant Harris informed all supervising officers within Central Park that Mr. Traore's license was suspended and that if he was observed operating the pedicab, she should be contacted. Sergeant Harris further testified that she was contacted by Sergeant D. Colon who informed her that he observed Mr. Traore operating pedicab # 1520 in Central Park and that she arrived on the scene ten minutes after receiving said call. Sergeant Harris then testified that she informed Mr. Traore that his pedicab driver's license had been suspended and she issued him a violation for operating a pedicab without a valid pedicab driver's license. Sergeant Harris also testified that in accordance with DCA rules, the pedicab was seized and transported to a storage location. Mr. Traore did not dispute that on that date, he was "looking for customers" but he testified that he did not know that his license was suspended. Upon questioning by ALJ DeFontes, Sergeant Harris testified that one could not determine from the face of the pedicab driver's license whether the DCA had suspended a pedicab driver's license and that further inquire would be necessary to confirm its status.

Also during the hearing, petitioners' counsel requested that the e-mail referred to by Sergeant Harris, informing her of Mr. Traore's suspended license be put into evidence. However, ALJ DeFontes ruled that Sergeant Harris did not have to produce the e-mail as she had testified that pursuant to her duties as an officer, she received said e-mail directive from DCA to stop Mr. Traore and ALJ DeFontes ruled that such evidence was credible and admissible at the hearing and that the e-mail was not necessary in order for him to render a decision. On October 4, 2012, ALJ DeFontes issued a Decision in which she found that the DCA established the charges in the Notice of Hearing by a preponderance of credible evidence, namely, the testimony of Sergeant Harris and that of Mr. Traore. Further, ALJ DeFontes found that "[t]he respondent as the owner of the subject pedicab, bears the responsibility of ensuring that its drivers are duly licensed" and ordered petitioners to pay a fine of $4,000.00 and the removal and storage costs for the seized pedicab. On October 5, 2012, Deputy Director of Adjudication, James M. Plotkin, approved the recommended Decision and Order.

On or about October 16, 2012, petitioner appealed the Decision and submitted an application for an Order staying the enforcement of the Order pending the appeal. In its appeal, Cycle Stone argued that (1) DCA failed to establish the charge in the Notice of Hearing by a preponderance of the evidence; (2) it was deprived of property without due process of law because the ALJ refused to consider Constitutional claims on the grounds that DCA's adjudication division does not have jurisdiction to hear constitutional defenses and because the ALJ dispensed with essential elements of a fair trial; (3) the issued violation was a product of an unconstitutional search and seizure because there is insufficient evidence in the record to support [*3]the DCA had "cause" to stop the pedicab driver and seize the vehicle; (4) the ALJ erred in his ruling that Cycle Stone did not set forth a valid defense to the violation and that Cycle Stone may rely on physical presentation of a facially valid pedicab driver's license; (5) the issued penalty exceeded the statutory maximum and was thus in violation of the Excessive Fines Clause of the Eighth Amendment to the United States Constitution; and (6) the ALJ incorrectly concluded that it had three previous violations.

By Appeal Determination dated October 24, 2012, Administrative Law Judge Bruce Dennis ("ALJ Dennis") denied petitioners' appeal and affirmed the October 5, 2012 Decision and Order. On October 26, 2012, ALJ Dennis issued a Superseding Appeal Determination in which he found that DCA had established the charge in the Notice of Hearing by a preponderance of the evidence based on Sergeant Harris' testimony that she was advised by Sergeant D. Colon that she observed Mr. Traore operating a pedicab when his license was suspended along with Mr. Traore's testimony that he was in Central Park with the pedicab "looking for customers." ALJ Dennis also found that petitioners failed to present a meritorious defense to the violation and that

The prohibition set forth in Administrative Code § 20-257(b) does not require that the pedicab business knowingly permit the operation of its pedicab by an unlicensed driver. The Judge correctly sustained the violation, finding that Administrative Code § 20-257 implicitly requires a pedicab business to ensure that each of its drivers are duly licensed.

In response to petitioners' argument that ALJ DeFontes erred by declining to order Sergeant Harris to produce the e-mail from the DCA notifying her that Mr. Traore's license was suspended, ALJ Dennis found that "as it was uncontested that Traore's license was not in full force and effect on the date of the seizure, and given Harris' testimony that she was advised of the license suspension prior to the seizure, the Judge correctly determined that the email was unnecessary and properly denied the request." Thus, ALJ Dennis found that petitioners' argument that their constitutional rights were violated because it "did not establish that there was probable cause to stop the pedicab" is not meritorious and that the assertion that ALJ DeFontes refused to consider constitutional defenses is not supported by the record as petitioners "did not raise any constitutional claims except to question the legitimacy of the stop." Finally, ALJ Dennis found that based upon petitioners' prior violations within a one year period and Admin. Code § 20-263(b), ALJ DeFontes was within her discretion to impose the $4,000.00 fine.

By Order to Show Cause signed on November 14, 2012 and Amended Verified Petition dated November 13, 2012, petitioners commenced the instant Article 78 proceeding seeking an Order (a) granting a temporary stay prohibiting respondent from implementing the order and determination pending the outcome of this proceeding; (b) reviewing petitioners' constitutional defense to the charges in the notice of hearing; (c) determining whether it violates due process for an agency's subject matter jurisdiction to preclude constitutional defenses where the agency has the power to suspend and revoke business licenses and impose substantial monetary penalties; (d) determining whether the administrative law judge exceeded jurisdictional limits by expanding the obligations of pedicab owners required under Section 20-257(b); and (e) determining whether the ALJ exceeded jurisdictional limits by imposing a monetary penalty greater than the statutory maximum set forth in 20-2(c). By Stipulation dated November 14, 2012, DCA agreed to stay the [*4]enforcement of the $4,000.00 fine issued pursuant to the October 5, 2012 Decision and Order pending a determination by this Court in this matter. In return, petitioners agreed to deposit $4,000.00 as an undertaking for the fine issued pursuant to the October 5, 2012 Decision and Order and to make the payments in accordance with the terms set forth in the Stipulation.

As an initial matter, that portion of the petition which seeks an Order granting a temporary stay prohibiting DCA from implementing the Decision and Order pending the outcome of this proceeding is denied as moot. Pursuant to the Stipulation between the parties dated November 14, 2012, DCA has already agreed to stay the enforcement of the Decision and Order pending the decision of this court and DCA has already released the pedicab to petitioners.

Further, this court finds that petitioners' due process rights were not violated as they were afforded notice and an opportunity to be heard at the hearing. The record demonstrates that DCA complied with all procedural requirements of due process. Petitioners were served with a Notice of Hearing which informed them of the charges set forth against them and directed them to appear at a hearing at DCA for an opportunity to answer and defend against the allegations set forth in the violation. At the hearing, petitioners were represented by counsel, presented two witnesses and were able to cross-examine Sergeant Harris, the officer who issued the Notice of Hearing. Petitioners' assertion that they were deprived of due process because they were not offered the opportunity to cross-examine Sergeant Colon is without merit as it is undisputed that Mr. Traore was driving the pedicab "looking for customers" in Central Park and that his license was suspended. Further, the hearing was conducted before a fair and impartial administrative law judge, who considered the evidence presented and made rulings on the admissibility of evidence and the credibility of witnesses.

Moreover, there is no evidence in the record that shows that petitioners raised any constitutional claims or other defenses that were not addressed by ALJ DeFontes. Petitioners have not offered any evidence that petitioner moved to dismiss the Notice of Hearing at the initial hearing on the grounds that the DCA's agents and employees violated petitioners' Constitutional rights when it seized the pedicab or that ALJ DeFontes refused to consider their arguments due to lack of jurisdiction over constitutional defenses. According to the record, petitioners first raised these constitutional arguments in their Administrative Appeal and the record shows that such arguments were in fact addressed on appeal. At the hearing, petitioner's counsel only requested that Sergeant Harris put into evidence the e-mail from DCA stating that Mr. Traore's license was suspended. However, in accordance with 6 RCNY § 35(b), ALJ DeFontes ruled that the e-mail was not necessary for her to render a decision and that Sergeant Harris' testimony was sufficient.

Additionally, DCA's determination to uphold the October 5, 2012 Decision and Order and deny petitioners' appeal was made on a rational basis. ALJ Dennis' determination that DCA proved by a preponderance of the evidence that petitioners were in violation of the charge set forth in the Notice of Hearing was rational as such determination was based on a review of the record, evaluation of the evidence and the application of relevant law. Administrative Code § 20-257b) states that

It shall be unlawful for a pedicab business to permit the operation of any pedicabs owned by it by a person who does not have a pedicab driver's license and a motor vehicle driver's license in full force and effect. [*5]

Pursuant to the record, it is undisputed that on October 3, 2012, when Sergeant Harris issued Mr. Traore the Notice of Hearing, Mr. Traore had been operating a pedicab in Central Park with a previously suspended pedicab license. Thus, it was not irrational for ALJ Dennis to confirm ALJ DeFontes' findings that the DCA had established a violation of said statute.

Further, petitioners' assertion that the DCA expanded the requirements of Admin. Code § 257(b) by requiring further investigation by the pedicab business and that it was sufficient that a "facially valid pedicab driver's license" was presented when the pedicab was leased is without merit. The statute provides that a pedicab business owner may not lease a pedicab to a driver who does not have a pedicab driver's license in full force and effect. As the testimony made clear that it is impossible to ascertain from the face of the license whether it has been suspended by the DCA, presentation of the license alone is insufficient under the statute. Thus, this court finds that it is not an expansive reading of the statute to require verification as to the status of a pedicab driver's license prior to leasing a pedicab as there would be no other way to ensure compliance with the statute.

Additionally, ALJ Dennis' determination that the DCA properly seized the pedicab was also made on a rational basis. Pursuant to Admin. Code § 20-263(d),

Any police or peace officer or authorized officer or employee of the department, upon service on the pedicab business or pedicab driver of a notice of violation...for the failure of a pedicab driver to be licensed pursuant to section 20-257, may seize such pedicab.

At the hearing, Sergeant Harris testified that she was notified by DCA of the suspension of Mr. Traore's license prior to seizing his pedicab. Further, it is undisputed that Mr. Traore did not have a valid pedicab driver's license on the date the Notice of Hearing was issued. Thus, DCA's determination that the pedicab was properly seized was rational. Petitioners' assertion that DCA violated their constitutional rights because it did not establish at the hearing that there was probable cause to stop the pedicab is without merit. Petitioner has not put forth any evidence that an officer must have "probable cause" to stop the pedicab. Moreover, even if there was such a requirement, Sergeant Harris testified that she directed the supervising officers within Central Park to stop Mr. Traore if he was operating a pedicab, based on the directive that Mr. Traore's pedicab driver's license was suspended. As Mr. Traore and petitioners do not dispute that Mr. Traore's pedicab driver's license was suspended at the time he was stopped, there was no violation of petitioners' constitutional rights.

Finally, ALJ Dennis' determination that the $4,000.00 fine imposed upon petitioner was not excessive was also made on a rational basis. "The question is not whether [the court] might have imposed another or different penalty, but whether the agency charged with disciplinary responsibility reasonably acted within the scope of its powers." Pell v. Board of Educ., 34 NY2d 222, 238 (1974). Moreover, a fine is excessive only if the fine constitutes punishment and is grossly disproportionate to the gravity of the offense. United States v Mackby, 243 F.3d 1159, 1167 (9th Cir. 2001); Street Vendor Project v City of New York, 10 Misc 3d 978, 982-83 (Sup. Ct. NY Cty 2005). Further, fines cannot be excessive "where the offending individual has the power to mitigate the accrual of fines or penalties." See Street Vendor Project, 10 Misc 3d at 982. The DCA calculated the penalty imposed on petitioners pursuant to Admin. Code § 20-263(b), which states that [*6]

Any person who violates any provision of this subchapter or any rules promulgated pursuant to this subchapter shall be subject to a civil penalty that shall not be...(3) less than one thousand nor more than four thousand dollars for the third violation committed, and each additional violation committed on the same day, within a one year period.

The administrative record shows that the Notice of Hearing and violation at issue in this case was the fourth notice of hearing and the seventh violation issued to petitioner within one year. As ALJ Dennis noted in his Determination, petitioners pled guilty or were found guilty of all six violations that arose from the three previous notices of hearing. Moreover, petitioners could have mitigated the instant fine by inquiring as to whether Mr. Traore's license was valid. Thus, it was rational for ALJ Dennis to find that the DCA was within its discretion to impose the $4,000.00 fine as it is within the range allowed pursuant to the statute.

Petitioners' assertion that they only had one previous violation issued in the past year because both Notices of Hearing LL 005302109 and LL 005291010 were issued on the same day and thus, constitute one violation for purposes of penalty calculation is without merit. Petitioner fails to set forth any justification for this assertion and the statute does not provide for this exception for calculation of penalties. Further, petitioners assert that because they have no record of Notice of Hearing LL 005302108 that such Notice of Hearing should not be counted for purposes of penalty calculation. However, respondent demonstrated at the hearing that petitioners were served with Notice of Hearing LL 005302108 on June 27, 2012 and that on August 8, 2012, petitioners pled guilty to the violation contained therein. Thus, the DCA correctly included the violation as part of the penalty calculation. Finally, petitioners' assertion that notice of hearing LL 005204779 should not have been included as part of the penalty calculation because the violation did not occur within the past twelve months is also without merit as it is clear the from ALJ Dennis' decision that this notice of hearing was not among the four Notices of Hearing or seven violations considered in the penalty calculation.

Accordingly, petitioners' Article 78 petition is denied in its entirety. This constitutes the decision, order and judgment of the court.

Dated: February 5, 2013Enter: ______________________________

J.S.C.