ACTIVE 202632959v.

4
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
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Index No. 451476/2014
IAS Part 5
Justice Kathryn E. Freed
THE PEOPLE OF THE STATE OF NEW YORK,
by ERIC T. SCHNEIDERMAN, Attorney General of the
State of New York; BENJAMIN M. LAWSKY,
Superintendent of Financial Services of the
State of New York,
Plaintiffs,
- against -
LYFT, INC.,
Defendant.
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DEFENDANTS MEMORANDUM OF LAW
IN OPPOSITION TO PLAINTIFFS MOTION FOR
TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
SIDLEY AUSTIN LLP
787 Seventh Avenue
New York, New York 10019
Tel: (212) 839-5300
Fax: (212) 839-5599
SCLAR ADLER LLP
19 West 34th Street, 1018
New York, NY 10001
Tel: (646) 494-3240
Fax: (212) 537-0359
Attorneys for Defendant Lyft, Inc.
FILED: NEW YORK COUNTY CLERK 07/14/2014
INDEX NO. 451476/2014
NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 07/14/2014
i
TABLE OF CONTENTS
PRELIMINARY STATEMENT .....................................................................................................1
FACTUAL BACKGROUND..........................................................................................................5
ARGUMENT...................................................................................................................................9
I. PLAINTIFFS HAVE NOT MET THEIR BURDEN OF SHOWING A LIKELIHOOD
OF SUCCESS ON THE MERITS.....................................................................................10
A. Plaintiffs Have Not Met Their Burden of Showing a Likelihood of Success with
Respect to Sections 2102, 2117, and 2122 of the Insurance Law or 11 N.Y.C.R.R.
153(8).....................................................................................................................10
1. Lyft Is Not Violating Section 2102 of the Insurance Law.........................10
2. Lyft Is Not Violating Insurance Law Section 2117...................................13
3. Lyft Is Not Violating Insurance Law Section 2122...................................14
4. Lyft Is Not Violating 11 N.Y.C.R.R. 153.8............................................15
B. Plaintiffs Have Not Met Their Burden of Showning a Likelihood of Success on
their Claims for Violations of Vehicle and Traffic Law (VTL) 370.1 and
501.2(v), Chapter 437 of the City of Buffalo Code, Chapter 108 of the Rochester
Municipal Code or Article 19 of the New York City Administrative Code..........15
C. Plaintiffs Have Not Met Their Burden of Showning a Likelihood of Success on
the Merits of Their Claims Concerning Alleged Deceptive Business Practices
under GBL 349 and 350....................................................................................20
D. Plaintiffs Business and Corporation Law (BCL) 1301 Claim is Moot ..........20
II. PLAINTIFFS HAVE NOT MET THEIR BURDEN OF SHOWING IRREPARABLE
HARM................................................................................................................................21
A. Plaintiffs Perceived Harm Is Speculative and Contingent....................................23
B. Plaintiff Cannot Show Any Harm That Is Imminent Or Immediate......................24
III. A BALANCING OF THE EQUITIES FAVORS LYFT, NOT PLAINTIFFS.................25
CONCLUSION..............................................................................................................................27
1
Defendant Lyft, Inc. (Lyft) respectfully submits this memorandum of law in opposition
to Plaintiffs motion for temporary restraining order and preliminary injunction.
PRELIMINARY STATEMENT
Plaintiffs, the Attorney General for the State of New York (the AG) and the
Superintendent of Financial Services (the Superintendent) have employed a strategy
involving misrepresentations to the public and noncompliance with statutory requirements
1

designed to destroy Lyfts business without due process. In fact, rather than permitting the Court
to resolve the motions pending before it, Plaintiffs took to the press on Friday, July 11,
announcing that the Court had granted the State a temporary restraining order and accusing
Lyft of flout[ing] dozens of different laws.
2
Plaintiffs allegations and misrepresentations are
unfounded. Additionally, as set forth fully below, Plaintiffs have failed to meet their burden of
showing any entitlement to the temporary restraining order and preliminary injunction they seek.
It is well-settled that [p]reliminary injunctive relief is a drastic remedy and will only be
granted if the movant establishes a clear right to it under the law and the undisputed facts found
in the moving papers. Koultukis v. Phillips, 285 A.D.3d 433, 435, 728 N.Y.S.2d 440, 442 (1st
Dept 2001) (emphasis added). Here, Plaintiffs have failed to meet their burden of showing
undisputed facts and law supporting a likelihood of success on the merits of their claims,
1
Executive Law 63(12), the statute under which the AG brings the majority of its causes of action, requires five
days notice prior to seeking an order enjoining business activity or any illegal acts pursuant to the statute. The AG
did not comply with this statutory requirement prior to commencing this action.
2
Plaintiffs issued a press release on Friday, July 11, 2014, which erroneously stated: As a result of [the AGs and
the Superintendents motion for a temporary restraining order], the court has granted the State a temporary
restraining order preventing Lyft from launching this evening in New York City. (Second Affidavit of David
Estrada, dated July 14, 2014 (2d Estrada Aff.), Ex. B.) Plaintiffs later made further misrepresentations that they
had obtained an injunction and Plaintiffs misrepresentations are false and without justification. See
http://www.businessinsider.com/lyft-delays-nyc-launch-2014-7. As the Court is aware, the Court granted Lyfts
application to adjourn the hearing on Plaintiffs motion for a temporary restraining order based upon Lyfts
agreement to preserve the status quo. In their joint press release, Plaintiffs also accused Lyft of violating dozens of
different laws . . . putting the safety of New Yorkers at risk and putting law-abiding competitors at a substantial
disadvantage. 2d Estrada Aff. Ex. A. Neither the Complaint nor the motion for a temporary restraining order
alleged dozens of violations of New York law.
2
irreparable injury absent an injunction, and a balancing of the equities in their favor. Indeed,
there are disputed issues of fact and law that cannot be resolved on the partial record before the
Court, which requires denial of Plaintiffs motion.
First, Plaintiffs have not demonstrated undisputed facts showing that they have a
likelihood of prevailing on the merits of their underlying claims. Plaintiffs have not shown that
Lyft is violating regulations concerning for hire vehicle statutes or any provisions of New
York Insurance Law. Lyft is neither a for hire car service company nor does it sell insurance
in the State of New York. Rather, Lyft is a real-time, mobile-based, peer-to-peer ridesharing
platform, which now operates in more than 60 cities throughout the United States, including
Buffalo and Rochester and allows users seeking rides to contact rideshare drivers in the vicinity
through use of Lyfts application platform on their mobile phone or tablet (commonly referred to
as a smartphone app). Although the technology behind Lyfts peer-to-peer ride sharing
platform is new, it is based on a ridesharing concept which is not new and has long been
endorsed by the State of New York as a safe alternative transportation mechanism.
Residents of the State of New York are benefiting from Lyfts innovative platform and
enhanced peer-to-peer ridesharing. Indeed, after nearly three months of operating in the State of
New York, during which Lyft has repeatedly engaged with State and municipal authorities in an
effort to answer their inquiries and address any legitimate concerns they may have, Plaintiffs
have come forward with no evidence of any harm or injury to any individual or the public.
Moreover, based upon Plaintiffs own evidence, Lyft is clearly a donation-based rideshare
program, not a for hire taxicab service. Indeed, as Plaintiffs witness affidavits from interns at
the Office of the Attorney General (OAG) demonstrate, an individual can use Lyfts
3
smartphone app to arrange a rideshare and pay nothing or make any donation he or she desires to
contribute regardless of any suggested donation:
The suggested donation for my ride was $46. . . . At the time of executing this
affidavit, I have not paid the suggested donation or any portion thereof.
3
* * *
The suggested donation for my ride was $63 . . . . I paid instead $50 . . . .
4
While Plaintiffs seek to impose on Lyft, and its users, laws, rules and regulations that the
legislature enacted to govern for hire car services, Plaintiffs disregard the differences between
the Lyft platform and a traditional livery service. Moreover, Plaintiffs also fail to demonstrate
that Lyft is violating any for hire laws. For example, the Director of Technology Programs of
the New York City Taxi and Limousine Commission (TLC), states only that it appears that
the service Lyft is providing is most like for hire vehicle service.
5
Brian F. Curran, the Deputy
Corporation Counsel of the City of Rochester, similarly concludes only that [a] person who
operated a taxi cab within the City by carrying passengers for hire without being licensed as a
taxicab and meeting the requirements of the Code may be in violation of [certain] sections of the
Code . . .
6
These are not even close to the required undisputed facts and clear violations of law
that would support the issuance of a temporary restraining order.
Plaintiffs have also failed to meet their burden of showing Lyfts conduct violates the
Insurance Law. Contrary to Plaintiffs allegations, Lyft does not act as an insurance producer,
agent or broker because it does not sell, negotiate, or solicit insurance in New York. Nor has
Lyft taken any action to aid any unauthorized insurer in effecting any insurance in New York.
3
Affirmation of Robert Vanwey, dated July 9, 2014, 9, which is attached to the Affirmation of Melvin L.
Goldberg In Support of Application for a TRO, dated July 11, 2014 (Goldberg Aff.) as Exhibit 11.
4
Affirmation of Evan Biddlecom, dated July 8, 2014, 13, attached to Goldberg Aff. as Exhibit 12.
5
See Affidavit of Joanne Rausen 13, attached to Goldberg Aff. as Exhibit 5.
6
See Affidavit of Brian Curran, 10, attached to Goldberg Aff. as Exhibit 9.
4
Lyfts users receive potential insurance benefits only through Lyfts pre-existing nationwide
policy. Lyft has never sought to promote or advertise for any insurer, and Lyft only shares
details about its insurance in order to provide necessary information to its users and regulatory
authorities. Furthermore, Lyft has never required any of its users to purchase insurance from a
specific insurer. Thus, Lyfts conduct does not violate any provisions of the Insurance Law and
Plaintiffs have not met their burden of showing a likelihood of success on the merits of their
underlying claims.
Second, Plaintiffs have not shown immediate and irreparable harm. Plaintiffs
allegations of perceived harm to the public are purely speculative and are based on sheer
conjecture. Even the limited evidence presented to the Court by Plaintiffs makes clear that Lyft
has been operating in the State of New York since April 2014, without any identifiable
irreparable harm. During that period, over 31,000 rides have been connected using Lyfts smart
phone app in Rochester and Buffalo. If there were truly any imminent threat of irreparable harm,
Plaintiffs would not have waited months to commence this action.
Finally, the balance of equities is not in Plaintiffs favor. There is no doubt that
Plaintiffswho have been aware of Lyfts operations in the State of New York for monthscan
remedy any potential violation of the laws, rules and regulations it argues are applicable to Lyft
through traditional enforcement mechanisms. Moreover, there are no facts, much less
undisputed facts, supporting a finding that Lyfts operation in New York creates a risk to public
safety greater than the risk of taxicabs, livery drivers, and other rideshare programs, which New
York state agencies encourage, but for which they disclaim any and all liability. By contrast, the
imposition of a restraining order or preliminary injunction will be manifestly unfair to Lyft
because it will irreparably harm Lyfts reputation, good will and valuable commercial
5
relationships in the New York market prior to a determination of the merits of Plaintiffs claims
on a full record. Indeed, Plaintiffs have already damaged Lyfts business reputation in the
context of this motion as a result of Plaintiffs smear campaign in the press. Plaintiffs
inequitable conduct underscores the inappropriateness of the equitable relief they seek before this
Court.
FACTUAL BACKGROUND
Unlike a traditional livery or taxi service, Lyft is not a for hire car service company.
Lyft users that own vehicles are not employees or contractors of Lyft, and are instead users of the
smartphone app, who provide their own cars and drive in their spare time. Affidavit of David
Estrada, dated July 10, 2014 filed in the Supreme Court of New York Case No. 451477/2014
[Dkt. 12] (1st Estrada Aff.) 6. In fact, the statistics currently available for the Rochester and
Buffalo markets show the average hours that users who are vehicle owners drive per week are
only 14.8 and 15.6, respectively, 2d Estrada Aff. 4, numbers very dissimilar to hours logged by
a traditional livery or taxi driver. Lyft does not dispatch these drivers. Rather, the smartphone
app automatically connects a user with a vehicle and rideshare user, at which point, the driver
and rider have the option to either accept or decline a rideshare with each other, which is not the
case with traditional livery services. 1st Estrada Aff. 5. In addition, Lyft users that own
vehicles are not transporting riders for a fixed and agreed upon compensation like in traditional
livery situations, rather, the rideshare user determines exactly how much of a donation they will
give (not before the ride, but afterwards, up until 24 hours after arriving at their destination). 2d
Estrada Aff. 5-6.
The donation system in Rochester and Buffalo works as follows:
a. At the end of a ride, Lyfts smartphone app notifies the passenger of the
suggested donation for the driver after the passenger is dropped off at the
requested destination.
6
b. At anytime within 24 hours after the ride is completed, the passenger has
the option of donating nothing at all, the suggested donation amount, more
than the suggested donation amount, or less than the suggested donation
amount.
c. A user of Lyfts rideshare program that refuses to make a donation for
ridesharing does not have their membership terminated.
d. If a passenger selects a donation amount, that donation is processed on the
credit or debit card that is stored for that passenger. Unlike taxis or
limousine services, Lyft users with vehicles that use the Lyft mobile
application are not allowed to accept cash.
2d Estrada Aff. 5-8.
The fact that Lyft is a true donation-based system is highlighted by the AGs office itself,
which had no less than three interns download and test Lyft. See Goldberg Aff. Exs. 11-14. For
example, Robert Vanwey, an intern at the New York State Office of the AG, who submitted an
affidavit stating he personally used Lyft in Buffalo, New York, stated: The suggested donation
for my ride was $46. At the time of executing this affidavit, I have not paid the suggested
donation or any portion thereof. Goldberg Aff. Ex. 11 9 (Affirmation of Robert Vanwey,
dated July 9, 2014). Another intern, Evan Biddlecom, affirmed that after personally using Lyft
in Buffalo, New York, [t]he suggested donation for my ride was $63 I paid instead $50
Lyft provided me with a receipt by email. Id. Ex. 12 at 13 (Affirmation of Evan Biddlecom,
dated July 8, 2014).
Lyft screens vehicle owners who use the Lyft smartphone app and requires them to meet
strict selection criteria. 1st Estrada Aff. 10. Lyft also requires that vehicles used in connection
with the Lyft rideshare program meet stringent safety requirements. Affirmation of Alan M.
Sclar, dated July 11, 2014, filed in the Supreme Court of New York Case No. 451477/2014 [Dkt.
11] (Sclar Aff.) Ex. F.
7
Although the technology behind Lyfts peer-to-peer ridesharing platform is new, it is
based on a ridesharing concept which is not new and has long been endorsed by the State of New
York as a safe alternative transportation mechanism for the residents of the State of New York.
Sclar Aff. Ex. H (providing overview of New York rideshare programs and links to local and
regional rideshare sites). Indeed, there are many rideshare programs already in effect throughout
New York State, each of which is not subject to, nor have Plaintiffs suggested that they should
be subject to, the laws, rules or regulations that Plaintiffs now seek to impose on Lyft and its
users. Id. For example, the New York Department of Transportation (NYDOT) sponsors
511NY,
7
which has a rideshare program (511NYRideshare) that specifically allows
commuters to connect with each other using web-based portals to arrange ridesharing. In
addition, the 511NY website provides links to other ridesharing serves including Hitchsters
(ride-matching to and from the airport), NJ DOT Carpool, Ride Amigos, VPSI Commuter and
NY Rideshare (formerly Commuterlink).
8
There is no suggestion that these existing rideshare
programs, or the drivers of the cars used to facilitate ridesharing in the State of New York, are
subject to any of the laws, rules or regulations that Plaintiffs have raised in their motion.
While Lyft is a holder of nationwide insurance policies that benefit Lyfts New York
users, Lyft negotiated and purchased its policies outside of New York in an effort to provide a
high level of safety to its users. 2d Estrada Aff. 9. The policies automatically provide uniform
coverage in all of the cities across the country where Lyft operates, and this coverage requires no
payment from Lyft users to insurers. Id. 11. Rather, Lyft pays the premiums of its policies.
Id. 12. Lyft does not require any of its users to purchase particular insurance in order to use its
service. Id. 13. Neither Lyft nor its insurer has ever attempted to sell its insurance policies to
7
Available at: http://511ny.org/commuters.aspx.
8
Available at: https://www.dot.ny.gov/511NY?mode=Carpool%20and%20Vanpool&type=Carpool%20Services.
8
Lyfts New York users. Id. 14. Furthermore, Lyft has never engaged in any negotiations with
its New York users with respect to its nationwide insurance policies or urged any Lyft users to
apply for particular insurance. Id. 15.
Consistent with its goal to expand its peer-to-peer ridesharing platform throughout the
country, Lyft first began operating in the State of New York on April 24, 2014 in the cities of
Buffalo and Rochester. Id. 2. Since the launch, there have been approximately 16,000
rideshares in Rochester and more than 15,000 rideshares in Buffalo, for a total of over 31,000
rideshares in just two and a half months. Id. 3. The New York State Department of Financial
Services (DFS) has been aware of Lyfts New York operations since at least May 7, 2014.
Affirmation of Joy Feigenbaum, dated July 10, 2014, in Support of Application for TRO, Ex. N
(DFS Letter, dated May 7, 2014). Lyft has since been in constant contact with DFS. Compl.
63-75. In full cooperation, Lyft has voluntarily met with DFS and the OAG on multiple
occasions, and following these meetings, has freely provided information about its operations in
response to the their inquiries. Id. 63-66; July 11, 2014 Hearing Transcript 10:17-11:20, 13:2-
22. As part of its collaboration with Plaintiffs, Lyft has made substantial efforts to respond to
any concerns raised by Plaintiffs including by amending its insurance policy to provide primary
coverage as of July 10, 2014. 2d Estrada Aff. 16. Lyft has also voluntarily provided
information to the OAG and the Superintendent in an attempt to resolve concerns they have
raised. Id. 17.
9
ARGUMENT
Preliminary injunctive relief is a drastic remedy and will only be granted if the movant
establishes a clear right to it under the law and the undisputed facts found in the moving papers.
Koultukis v. Phillips, 285 A.D.2d 433, 435, 728 N.Y.S.2d 440, 442 (1st Dept 2001). Indeed,
because it is a drastic remedy it should be used sparingly. Fischer v. Deitsch, 168 A.D.2d
599, 601, 563 N.Y.S.2d 836, 838 (2d Dept 1990). In order to obtain a preliminary injunction,
the moving party must demonstrate (1) likelihood of success on the merits; (2) irreparable injury
absent the injunction; and (3) a balancing of the equities in its favor. Matter of 35 N.Y. City
Police Officers v. City of New York, 34 A.D.3d 392, 394, 826 N.Y.S.2d 22, 24 (1st Dept 2006);
Nobu Next Door, LLC v. Fine Arts Housing, Inc., 4 N.Y.3d 839, 840, 800 N.Y.S.2d 48, 49
(2005) (same).
A party may not rely upon mere ipse dixit assertions or inadmissible statements in briefs
or through counsel, but must bring forward actual evidence to support its assertions on each
element. See CPLR 6312(a). If the plaintiff fails to meet its burden to establish each and every
element, the request for injunctive relief must be denied. See, e.g., Doe v. Axelrod, 73 N.Y.2d
748, 750-51, 536 N.Y.S.2d 44, 45 (1988) (denying request for a preliminary injunction where the
likelihood of success on the merits prong was not met); see also Little India Stores, Inc. v. Singh,
101 A.D.2d 727, 728, 475 N.Y.S.2d 38, 40 (1st Dept 1984) (In the absence of a clear right to
the relief demanded, injunctive relief should not be granted until the issues have been fully
explored and the entire matter resolved after plenary trial.); Gulf & W. Corp. v. New York Times
Co., 81 A.D.2d 772, 773, 439 N.Y.S.2d 13, 14-15 (1st Dept 1981) (A plaintiffs right to the
drastic remedy of a preliminary injunction must be certain as to the law and the facts and the
burden of establishing such an undisputed right rests upon the plaintiff) (emphasis added). As
explained below, Plaintiffs have failed to carry their burden on any of the required factors.
10
Accordingly, the motion for a temporary restraining order and preliminary injunctive relief must
be denied.
I. PLAINTIFFS HAVE NOT MET THEIR BURDEN OF SHOWING A
LIKELIHOOD OF SUCCESS ON THE MERITS
Plaintiffs must make a clear showing that they are likely to succeed on the merits before
injunctive relief can be granted. See Qwakazi, Ltd. v. 107 W. 86th St. Owners Corp., 123 A.D.2d
253, 254, 506 N.Y.S.2d 162, 163 (1st Dept 1986) (vacating grant of preliminary injunction
because plaintiff could not demonstrate likelihood of success on the merits); Cooper v. Bd of
White Sands Condo., 89 A.D.3d 669, 669, 931 N.Y.S.2d 696, 697 (2d Dept 2011) (upholding
denial of preliminary injunction because plaintiffs did not establish clear right to requested
relief). A showing of a likelihood of success on the merits requires the presentation of evidence.
Speculation, broad allegations of wrongdoing, and conclusory statements are not sufficient. See,
e.g., State v. Fine, 72 N.Y.2d 967, 969, 534 N.Y.S.2d 357, 358 (1988) (overturning Appellate
Division when injunction granted rested on conclusory assertions that defendants had
committed repeated fraudulent practices . . . .); U.S. Re Companies, Inc. v. Scheerer, 41 A.D.3d
152, 154-55, 838 N.Y.S.2d 37, 39-40 (1st Dept 2007) (overturning grant of injunction where
plaintiff produced no factual support before the motion court to substantiate [its] contention).
Here, Plaintiffs have not met their evidentiary burden with respect to any of their claims.
A. Plaintiffs Have Not Met Their Burden of Showing a Likelihood of Success with
Respect to Sections 2102, 2117, and 2122 of the Insurance Law or 11 N.Y.C.R.R.
153(8)
1. Lyft Is Not Violating Section 2102 of the Insurance Law
Plaintiffs erroneously maintain that Lyfts pre-existing insurance policy, which covers
Lyft users (drivers and passengers) nationwide, makes Lyft an insurance producer and
constitutes the solicitation, negotiation, and sale of an insurance policy in New York in violation
11
of Insurance Law Section 2102. Their position is contrary to the express language of the statute.
Insurance Law Section 2102 provides:
No person, firm, association or corporation shall act as an insurance producer,
insurance adjuster or life settlement broker in this state without having authority
to do so by virtue of a license issued and in force pursuant to the provisions of this
chapter.
N.Y. Ins. Law 2102(a)(1)(A) (emphasis added).
Lyft is not in violation of this provision because Lyft is not an insurance producer.
Insurance Law Section 2101(k) defines insurance producer as an insurance agent, insurance
broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed
under the laws of this state to sell, solicit or negotiate insurance . . . . By statute, the defining
quality of an insurance producer under the Insurance Law is engagement in the (1) sale, (2)
solicitation, and (3) negotiation of insurance in New York.
9
N.Y. Ins. Law 2102(a)(1)(A),
2101(k).
Here, Lyft does not sell, solicit, or negotiate insurance in New York because Lyft users
do not purchase and are not asked to purchase any insurance policy. Rather, the insurance at
issue was previously negotiated and purchased by Lyft outside of New York for nationwide
coverage. 2d Estrada Aff. 9-10. The extension of coverage to Lyft users in New York of a
9
Section 2101 of the Insurance Law defines negotiate, sell, and solicit as follows:
(m) In this article, negotiate or negotiation means the act of conferring directly with or offering advice
directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the
substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either
sells insurance or obtains insurance from licensed insurers . . .for purchasers.
(n) In this article, sell or sale means to exchange a contract of insurance by any means, for money or its
equivalent, on behalf of a licensed insurer . . .
(o) In this article, solicit or solicitation means attempting to sell insurance or asking or urging a person
to apply for a particular kind of insurance from a particular licensed insurer . . .
12
nationwide policy lawfully negotiated and obtained outside of New York is not the negotiation,
sale, or solicitation of insurance within New York.
10
Lyft is also not an insurance producer because Lyft does not engage in any negotiations
of any kind in New York with its users concerning its nationwide insurance policy. Rather, by
deciding to participate in Lyfts rideshare program, users become beneficiaries of a pre-existing
insurance contract belonging to Lyft, the actual purchaser. 2d Estrada Aff. 11. Moreover,
because each user automatically receives the same coverage, there is no interaction in New York
that could constitute negotiation within the meaning of the Insurance Law.
Similarly, Lyft does not sell insurance in New York. The policies are never sold to the
drivers. Instead, users within the class covered under the original terms of Lyfts policy become
beneficiaries of the pre-existing policy. Lyft does not act as an insurer and does not hold itself
out as the entity responsible for losses under its nationwide policy. Nor, as further described
below, does Lyft act on behalf of an insurer to sell the insurance to vehicle owners.
Finally, Lyft does not solicit insurance by attempting to sell insurance to its drivers or
urging them to apply for particular insurance. Indeed, Plaintiffs assert in Paragraph 49 of the
Complaint that Lyft does not share copies of the policies with Lyft drivers. Moreover, the
insurance at issue pre-dated Lyfts operations in New York, it was purchased by Lyft itself, and
users do not receive coverage in exchange for making a payment to an insurer.
10
The Insurance Law recognizes the concept that policies covering New York risks may be lawfully placed in other
states, by an insurer not licensed in New York, without such placement constituting doing an insurance business in
violation of the Insurance Law. See, e.g., N.Y. Ins. Law 1101(b)(2) permitting limited in-state activity by mail by
unlicensed insurers and providing: Notwithstanding the foregoing, the following acts or transactions, if effected by
mail from outside this state by an unauthorized foreign or alien insurer duly licensed to transact the business of
insurance in and by the laws of its domicile, shall not constitute doing an insurance business in this state . . . (E)
transactions with respect to policies of insurance on risks located or resident within or without this state . . . which
policies are principally negotiated, issued and delivered without this state in a jurisdiction in which the insurer is
authorized to do an insurance business (emphasis added). This principle is equally applicable in the instant case
where there is no sale, solicitation, or negotiation activity taking place in New York.
13
2. Lyft Is Not Violating Insurance Law Section 2117
Plaintiffs incorrectly argue that Lyfts extension of coverage under its long-held
insurance policy, unilaterally purchased outside of New York, to its nationwide users in over 60
cities constitutes aiding an unlicensed insurer in effecting insurance in New York in violation of
Section 2117. This position contradicts the plain language of the statute as well as case law
construing the term effecting insurance in the context of the Insurance Law. Section 2117(a)
of the Insurance Law provides:
(a) No person, firm, association or corporation shall in this state act as agent for
any insurer or health maintenance organization which is not licensed or
authorized to do an insurance or health maintenance organization business in this
state, in the doing of any insurance or health maintenance organization business in
this state or in soliciting, negotiating or effectuating any insurance, health
maintenance organization or annuity contract or shall in this state act as insurance
broker in soliciting, negotiating or in any way effectuating any insurance, health
maintenance organization or annuity contract of, or in placing risks with, any such
insurer or health maintenance organization, or shall in this state in any way or
manner aid any such insurer or health maintenance organization in effecting any
insurance, health maintenance organization or annuity contract.
N.Y. Ins. Law 2117(a) (emphasis added).
Lyft is indisputably not an agent for its insurer. The only insurance policy at issue here
was purchased solely by Lyft in order provide an additional layer of safety to the Lyft users
throughout the Unites States who choose to participate in its ridesharing program. Moreover,
Lyft has not aided an unauthorized insurer in effectuating insurance in New York. Indeed, the
lack of any insurance agreement between Lyft and its users means Lyft cannot be found to have
violated Section 2117s prohibition against aiding an unlicensed insurer in effecting insurance.
In People on Complaint of Wood v. Intl Broad. Corp., 143 Misc. 122, 124-25, 255 N.Y.S. 349,
352-53 (Magis. Ct. 1931), the court, in interpreting Section 50
11
of the Insurance Law, a
11
Section 50 stated that no person or corporation shall act as agent for a foreign insurance company or insurers or
insurer in the transaction of any business of insurance within this state or negotiate for or place a risk for any such
14
predecessor to Section 2117, held that the term effecting meant bringing to an issue or to full
success. Here, no insurance contract has ever been issued or completed with any of Lyfts
users, nor has Lyft or its insurer ever made any attempt to do so. Thus, Lyfts conduct does not
violate Section 2117 of the Insurance Law.
3. Lyft Is Not Violating Insurance Law Section 2122
Plaintiffs also mistakenly argue that, by posting certain terms of its insurance policy on
its website, Lyft is violating Section 2122s prohibition on calling attention to an unauthorized
insurer. That interpretation is contrary to the intent of the rule. Section 2122(a)(2) provides that:
No insurance agent, insurance broker or other person, shall, by any advertisement
or public announcement in this state, call attention to any unauthorized insurer or
insurers.
Finding Lyfts conduct to constitute a violation would frustrate the intent of this
provision. The Office of General Counsel of the New York Department of Insurance (now the
Insurance Division of the New York Department of Financial Services) has explained that the
purpose of Section 2122(a)(2) is to prohibit the solicitation of business in New York by
unauthorized insurers. Dept of Ins. OGC Opinion No. 03-01-23 (January 7, 2003) available at
http://www.dfs.ny.gov/insurance/ogco2003/rg030123.htm. In determining whether material
constitutes an advertisement within the meaning of this provision, the OGC has clearly stated
that the analysis focuses on whether the materials are designed to be used or are actually used,
to induce the public to purchase, increase, modify, reinstate, or retain a policy. Id.
Here, there is no basis for finding that the limited information provided by Lyft
concerning its insurance policy solicits insurance business or calls attention to an unauthorized
insurer to induce the public to purchase or retain an insurance policy. Rather, Lyft provides
corporation or insurer or in any way or manner aid such corporation or insurer in effecting insurance or otherwise in
this state unless such corporation or insurer shall have fully complied with the provisions of this chapter. See
Wood, 143 Misc. at 124-25, 255 N.Y.S. at 352.
15
limited information concerning its insurance policy without any materials that are designed to
induce the public to purchase, increase, modify, reinstate, or retain a policy of insurance.
4. Lyft Is Not Violating 11 N.Y.C.R.R. 153.8
Plaintiffs also wrongly allege that Lyfts conduct violates 11 N.Y.C.R.R. 153.8.
Section 153.8 is not applicable to Lyfts conduct. That regulation prevents an insurer from
requiring group members to purchase insurance or imposing penalties for failure to do so by
providing:
No insurer shall provide coverage in regard to a group or quasi-group program
that: (a) requires the purchase of insurance as a condition of group membership
or quasi-group participation . . .
There is no basis for finding that this provision applies extraterritorially to Lyfts
purchase of an insurance policy outside of the State of New York. Moreover, even if this
transaction had taken place in New York, there would still be no violation of Section 153.8
because users are not required to purchase insurance as a condition to using Lyfts ridesharing
application. Rather, the benefits of Lyfts pre-existing, nationwide insurance policy are provided
to Lyfts users without any required purchase of insurance or payment of any kind. Furthermore,
use of the Lyft smartphone app is not contingent on the purchase of insurance because users do
not opt-in or opt-out of these policies for the same reason that there is no purchase: the policy has
already been purchased by Lyft and the benefits are the mere continuation of its existing terms.
B. Plaintiffs Have Not Met Their Burden of Showing a Likelihood of Success on
their Claims for Violations of Vehicle and Traffic Law (VTL) 370.1 and
501.2(v), Chapter 437 of the City of Buffalo Code, Chapter 108 of the
Rochester Municipal Code or Article 19 of the New York City
Administrative Code
Plaintiffs incorrectly allege that Lyft is violating various laws and municipal codes,
including VTL 370.1 and 501.2(v), Chapter 437 of the City of Buffalo Code, Chapter 108 of
the Rochester Municipal Code and Article 19 of the New York City Administrative Code. Each
16
of these codes and/or laws is only applicable to for hire drivers and vehicles. Lyft is not
violating these laws because Lyft is not a for hire taxicab or livery service.
The term for hire is not defined in the statutes, but requires that an offer of
transportation be made to the public at large. See 1938 N.Y. Op. Atty Gen 291 (concluding that
the transportation of blind home teachers by guides in cars owned by the latter, in exchange for
compensation, was not for hire because the guides did not offer services to public at large).
Section 165.15(3) of the New York Penal Law concerning Theft of Services makes it a
misdemeanor when any person [w]ith intent to obtain . . . taxi or other public transportation
service without payment of the lawful charge therefor, or to avoid payment of the lawful charge
for such transportation service which has been rendered to him, obtains or attempts to obtain
such service or avoids or attempts to avoid payment therefor by force, intimidation, stealth,
deception or mechanical tampering, or by unjustifiable failure or refusal to pay. In their motion
papers, Plaintiffs have not come forward with any example of a for hire taxicab or livery
service that is not subject to the provisions of Section 165.15(3) of the New York Penal Law,
which contemplates an agreement for the payment of a lawful charge in exchange for
transportation service.
In contrast to a for hire taxicab or livery service, Lyft is a peer-to-peer, ridesharing
smartphone app that allows users who require transportation services to connect with persons
with vehicles in their vicinity, who are willing to provide transportation without charge and on a
purely voluntary donation basis. Passengers using the Lyft smartphone app are not required to
pay any charge in exchange for the transportation service provided, distinguishing Lyft from all
for hire services in New York. With Lyft, the amount of any donation for ridesharing is left
entirely up to the passenger and passengers are free to refuse to make any contribution without
17
penalty. Indeed, Plaintiffs own evidence demonstrates that there is no required charge. As one
intern at the OAGs office affirmed after using the Lyft smartphone app: The suggested
donation for my ride was $46. At the time of executing this affidavit, I have not paid the
suggested donation or any portion thereof. Goldberg Aff. Ex. 11 9 (Affirmation of Robert
Vanwey, dated July 9, 2014) (emphasis added). In stark contrast to refusing to pay a taxicab or
livery service for transportation, there is absolutely no charge associated with Lyft that would
subject any person to liability under Section 165.15(3) of the New York Penal Code for non-
payment for rideshare transportation.
Plaintiffs disregard these fundamental differences between the Lyft platform and a
traditional taxicab or livery service, and instead repeatedly refer to Lyft as for hire in a
conclusory fashion, based solely on Plaintiffs own preliminary analysis of Lyfts business
model. Plaintiffs provide no support in fact, case law, legislative history, or statutory definitions
for their conclusion concerning the term for hire. Plaintiffs unsupported conclusions
concerning the meaning of the term for hire are insufficient to support a finding of a likelihood
of success on the merits. See U.S. Re Companies, Inc. v. Scheerer, 41 A.D.3d 152, 154-55, 838
N.Y.S.2d 37, 39-40 (1st Dept 2007). Indeed, as the court stated in City of New York v. 330 Cont.
LLC, when there exists an as-yet unresolved vagueness and ambiguity of the language of the
[statute] that the City seeks to enforce, it cannot be said that the City has demonstrated a clear
right to the drastic remedy of a preliminary injunction. 60 A.d.3d 226, 873 N.Y.S.2d 9, 15 (1st
Dept 2009).
In 330 Cont. LLC, the court reversed the granting of a preliminary injunction, in part,
because the words used by the statute, including transient and permanent, were not defined
in either of the statutes at issue, and therefore, were vague and ambiguous. See id., 60 A.D.3d at
18
232-33, 873 N.Y.S.2d at 14. The Court noted that the City did not direct [its] attention to any
authority that would provide guidance in interpreting the statutory language and thereby
determining whether the City would be likely to prevail on the merits of their claim that
Defendant was in violation of certain zoning laws. See id., 60 A.D.3d at 233-34, 873 N.Y.S.2d
at 15. Here, as in 330 Cont. LLC, there is no definition of for hire in any of the statutes cited
by the Plaintiffs, and Plaintiffs have provided no authority for the proposition that Lyfts
platform is subject to the regulations of a for hire taxi or livery business.
Far from legal support for their legal conclusions with respect to the meaning of for
hire, Plaintiffs submission of affidavits from Joanne Rausen (Director of Technology Programs
of the TLC) and Brian F. Curran, the Deputy Corporation Counsel of the City of Rochester and
an individual responsible for giving advice to City officials about the interpretation of the
provisions of the [Rochester] Citys Municipal Code, Affidavit of Brian Curran, 2, attached to
Goldberg Aff. at Exhibit 9, demonstrate that Plaintiffs have not shown a likelihood of success on
the merits. For example, Ms. Rausen states only that [b]ased on the materials prepared by Lyft
that [she has] reviewed, it appears that the service Lyft is providing is most like for hire vehicle
service . . . . Affidavit of Joanne Rausen 13, attached to Goldberg Aff. at Exhibit 5 (emphasis
added). Similarly, Mr. Curran states that [a] person who operated a taxi cab within the city by
carrying passengers for hire without being licensed as a taxicab and meeting the requirements of
the [Rochester Municipal] Code may be in violation of [certain] sections of the Code . . . .
Affidavit of Brian Curran, 10, attached to Goldberg Aff. at Exhibit 9 (emphasis added). The
equivocal nature of this evidence is not the type of clear violations of law for demonstrating a
sufficient likelihood of success on the merits to obtain an injunction shutting down an ongoing
business. See Gulf & W. Corp., 81 A.D.2d at 773, 439 N.Y.S.2d at 15 ([P]laintiff's rights must
19
be certain as to the law and the facts and the burden of establishing such an undisputed right rests
upon the plaintiff); Town of Southeast v. Gonnella, 26 A.D.2d 550, 550, 270 N.Y.S.2d 863, 863
(2d Dep't 1966) (preliminary injunction enjoining violation of zoning regulation held improper,
given the existence of questions of law and fact, not fully developed in the record, which must
be decided upon trial before the rights of the parties can be settled).
In addition to the lack of sufficient legal support for their position, Plaintiffs likewise fail
to provide undisputed facts demonstrating a likelihood of success of proving that Lyft is a for
hire service. Each of their factual affidavits concerning Lyfts services demonstrate
unequivocally that Lyft is a donation-only ridesharing service that does not require any payment.
In fact, two of the interns at the OAG that used the Lyft smartphone app paid nothing for their
rideshare and the third intern paid 20% less than the suggested donation. See Goldberg Aff. Exs.
11-14. These facts submitted by Plaintiffs, at a minimum, demonstrate a factual issue as to
whether Lyft could be considered a for hire service subject to the statutes cited by Plaintiffs.
Thus, Plaintiffs have failed to show the required likelihood of success on the merits with respect
to violations of for hire laws. See Faberge Intl Inc. v. Di Pino, 109 A.D.2d 235, 240, 491
N.Y.S.2d 345, 349 (1st Dept 1985) (holding that a preliminary injunction is a drastic remedy
and that [i]f key facts are in dispute, the relief will be denied); Somers Assocs., Inc. v. Corvino,
156 A.D.2d 218, 219-20, 548 N.Y.S.2d 480, 480-81 (1st Dept 1989) (The existence of a sharp
factual conflict . . . obviates any conclusion that [movant] has shown a likelihood of ultimate
success on the merits and is fatal to the motion.) (citations omitted).
Finally, as discussed above, although the technology behind Lyfts peer-to-peer ride
sharing platform is new, it is based on a ridesharing concept that has long been endorsed by the
State of New York as a safe alternative transportation mechanism. There is no suggestion that
20
existing rideshare programs, or the drivers of the cars used to facilitate ridesharing in New York,
are subject to any of the for hire laws, rules or regulations that Plaintiffs seek to impose on
Lyft. The reason for this is the fact that the Legislature did not intend for any of those laws, rules
or regulations to apply to a peer-to-peer rideshare platform. The fact that additional rideshare
services and options are now available to more people because of Lyfts innovation and
technology does not change this fact. As such, since regulation of this peer-to-peer ridesharing
industry is not covered by existing transportation laws or regulations, absent legislative action,
Plaintiffs cannot bootstrap existing laws onto Lyft that do not cover Lyfts rideshare program.
C. Plaintiffs Have Not Met Their Burden of Showing a Likelihood of Success on
the Merits of Their Claims Concerning Alleged Deceptive Business Practices
under GBL 349 and 350
As a result of Plaintiffs failure to show a likelihood of success on the merits of their
claims under for hire laws and the Insurance law, Plaintiffs have likewise not shown a
likelihood of success on the merits of their alleged deceptive business practices claims under
Sections 349 and 350 of the General Business Law. Additionally, Plaintiffs have not
demonstrated, as required, that Lyfts alleged statements are false or materially misleading. See
Koch v. Acker, Merrall & Condit Co., 18 N.Y.3d 940, 941, 944 N.Y.S.2d 452, 452 (2012)
(holding that conduct must be materially misleading for claims under GBL 349-350).
Moreover, if any party is guilty of deceptive practices it is Plaintiffs, who have made multiple
misrepresentations to the public in an effort to shutdown Lyfts business operations without due
process.
D. Plaintiffs Business and Corporation Law (BCL) 1301 Claim is Moot
The Attorney General brings a claim under BCL 1301 and 1303, arguing that because
Lyft had not registered as a foreign corporation with the New York Department of State
(Department of State), it should be restrained from doing any business in the state. Upon
21
discovery of this ministerial oversight, Lyft registered with the Department of State on July 11,
2014, the same day that this action was commenced. 2d Estrada Aff. Ex. A.
This claim highlights the importance of the AGs compliance with the five-day notice
period set forth in Section 63(12) of the Executive Law, which provides: [T]he attorney general
may apply . . . to the supreme court of the State of New York, on notice of five days, for an order
enjoining the continuance of such business activity With notice from the OAG that it had
concerns related to registration with the Department of State, Lyft could easily resolve this issue,
which it has. Moreover, because BCL 1303 does not provide for any monetary remedies and
only allows actions to restrain a foreign corporation from doing business without authorization in
the State of New York, the Attorney Generals claim is now completely moot.
II. PLAINTIFFS HAVE NOT MET THEIR BURDEN OF SHOWING
IRREPARABLE HARM
It is settled law that irreparable harm is a threshold requirement for preliminary injunctive
relief and, absent a showing that plaintiff will imminently suffer such harm, a preliminary
injunction cannot be granted. See Haulage Enters. Corp. v. Hempstead Res. Recovery Corp., 74
A.D.2d 863, 864, 426 N.Y.S.2d 52, 54 (2d Dept 1980) (reversing the granting of preliminary
injunction concerning termination of service where plaintiff failed to establish irreparable injury,
without addressing likelihood of success on the merits or a balancing of the equities); Chicago
Research & Trading v. N.Y. Futures Exch., Inc., 84 A.D.2d 413, 416, 446 N.Y.S.2d 280, 282 (1st
Dept 1982) (Injunctive relief will be afforded only in those extraordinary situations where the
plaintiff has no adequate remedy at law and such relief is necessary to avert irreparable injury.).
Additionally, Section 309 of the Financial Services Law, under which Plaintiffs seeks to enjoin
Lyft, expressly requires a showing that the alleged violation of the Insurance Law will cause
irreparable injury to the interests of the people of this state . . . . N.Y. Fin. Serv. 309(b).
22
In statutory enforcement actions, the Attorney General must show irreparable harm in
order to obtain a preliminary injunction. See Fine, 72 N.Y.2d at 968-69, 534 N.Y.S.2d at 358
(holding, in action for a preliminary injunction sought by the Attorney General, that a
preliminary injunction under the Martin Act, as under CPLR article 63, should be granted only
upon a showing of a likelihood of success on the merits, irreparable injury if the relief is not
granted, and a balancing of the equities); see also People v. Trans World Airlines, 171 A.D.2d
76, 81, 575 N.Y.S.2d 1, 4 (1st Dept 1991) (per curiam) (affirming denial of preliminary
injunction sought by the Attorney General under Executive Law 63(12) and General Business
Law 350 and noting that [i]t is well settled that [a preliminary] injunction may issue only
where the party seeking it demonstrates that it is likely to succeed on the merits, that it will suffer
irreparable injury in the absence of the preliminary injunction and that the balance of the equities
is in its favor) (citing Aetna Ins. Co. v. Capasso, 75 N.Y.2d 860, 862, 552 N.Y.S.2d 918, 918
(1990)).
The cases cited by Plaintiffs do not support their argument that no showing of irreparable
harm is required in this action. First, the courts decision in People v. P.U. Travel Inc., 2003
N.Y. Misc. LEXIS 2010, at *7-8 (Sup. Ct. N.Y. Cnty. June 19, 2003), did not involve the
standard for a preliminary injunction. While the court referenced a 5th Circuit U.S. Commodity
Futures Trading Commission (CFTC) case for the proposition that irreparable injury should
not apply to CFTC cases, the court did not in any way decide whether or not irreparable harm
was a required element for preliminary injunctive relief. Additionally, in People v. Apple Health
& Sports Clubs, Ltd., 174 A.D.2d 438, 438-39, 571 N.Y.S.2d 23, 24 (1st Dept 1991), the court
held that since the Legislature authorizes injunctive relief for fraudulent and illegal conduct
such as that which occurred here, proof of irreparable harm is unnecessary. Id. (emphasis
23
added). However, for this proposition, the court cited a prior decision involving a zoning
ordinance that specifically waived the requirement of proof of injury to the public. Id. (citing
Village of Pelham Manor v. Crea, 112 A.D. 2d 415, 415, 492 N.Y.S.2d 74, 75 (1985)).
Moreover, Trans World Airlines, 171 A.D.2d at 81, 575 N.Y.S.2d at 4, which was decided after
Apple Health, detailed the standard for the Attorney General to obtain preliminary injunctive
relief for claims under Executive Law 63(12) and General Business Law 350 and listed
irreparable harm as a required element for obtaining injunctive relief.
Here, Plaintiffs have not shown irreparable harm for two separate reasons: (a) the alleged
harm is purely speculative and not at all certain to occur, and (b) the harm alleged is not
imminent.
A. Plaintiffs Perceived Harm Is Speculative and Contingent
Plaintiffs have not made any showing that the perceived harm to the public is an actual
harm. With more than 30,000 rideshares completed in New York state, Plaintiffs merely allege
without any factual support that failure to comply with certain for hire statutes is putting the
entire public at risk, and that the alleged non-compliance with the certain insurance and
financial services law creates possible risk, cost and uncertainty. Pls Br at 13. In contrast to
these bald allegations, Plaintiffs sent out three interns from the AGs office to investigate Lyfts
rideshare program and not a single one of them has provided any factual support for a finding
that Lyfts smartphone app creates an unsafe environment or presents any threat to public safety.
See Goldberg Aff. Exs. 11-14. In light of rideshare programs throughout New York State that
contain virtually no protections, juxtaposed with Lyfts driver screening, vehicle inspections, and
24
safety practices, Plaintiffs have not shown any threat of irreparable harm that cannot be remedied
by normal enforcement of any applicable state laws.
12
The law is clear that the type of speculative allegations set forth by Plaintiffs are
insufficient as a matter of law. See, e.g., Golden v. Steam Heat, Inc., 216 A.D.2d 440, 442, 628
N.Y.S.2d 375, 377 (2d Dept 1995) (reversing grant of injunctive relief for failure to show
irreparable harm and holding that irreparable harm must be shown by the moving party to be
imminent, not remote or speculative) (emphasis added); Chicago Research & Trading, 84
A.D.2d at 417, 446 N.Y.S.2d at 282 (denying injunctive relief where the controversy depends
entirely upon a future event); Faberge Intl Inc. v. Di Pino, 109 A.D.2d at 240, 491 N.Y.S.2d at
349 (preliminary injunction is inappropriate where the potential harm is based on speculation
and conjecture); Grumet v. Cuomo, 162 Misc.2d 913, 930, 617 N.Y.S.2d 620,631 (Sup. Ct.
Albany Cnty. 1994) (the threat of harm must be immediate, specific, non-speculative, and non-
conclusory) (citing N.Y. State Inspection, Sec. & Law Enforcement Emps. v. Cuomo, 64 N.Y.2d
233, 485 N.Y.S.2d 719 (1984)).
B. Plaintiff Cannot Show Any Harm That Is Imminent Or Immediate
Plaintiffs have been well aware since at least early May that Lyft has been operating in
the State of New York. It is disingenuous for Plaintiffs to declare irreparable harm will result if
Lyfts operations continue until a full record can be developed for a trial in this matter, when
they have been sitting by for months. If Plaintiffs were truly as concerned about possible
imminent harm to the public as they feign in their papers and in the press, they would have
sought injunctive relief the moment they learned that Lyft started its operations in New York.
The present motion does not arise from a genuine concern over imminent harm. Instead, it is an
12
With respect to Lyfts insurance, none of the alleged inadequacies create any harm, much less irreparable harm.
25
attempt by Plaintiffs to shutdown Lyfts business prior to a trial on the merits unless Lyft
capitulates to their demands. Under these circumstances, preliminary injunctive relief is wholly
improper.
III. A BALANCING OF THE EQUITIES FAVORS LYFT, NOT PLAINTIFFS
The balancing of the equities test requires the movant to show that the harm it would
suffer absent the injunction is greater than the harm to be imposed on the opponent by the
injunction. See, e.g., Scotto v. Mei, 219 A.D.2d 181, 184-85, 642 N.Y.S.2d 863, 863 (1st Dept
1996) (reversing grant of preliminary injunction where defendant established irreparable injury
because of the preliminary injunction and plaintiff failed to establish that he would suffer
irreparable harm absent the injunction); Edgeworth Food Corp. v. Stephenson, 53 A.D.2d 588,
588, 385 N.Y.S.2d 64, 64 (1st Dept 1976) (finding balance of equities did not tip in plaintiffs
favor, and the drastic remedy of preliminary injunction was not warranted given that defendant
stood to lose opportunity to sell business on more favorable terms if enjoined).
Plaintiffs have not established that the equities balance in their favor, because the harm to
Lyfts business reputation, good will, and operations is irreparable whereas the threat of injury
complained of by Plaintiffs is speculative and could be remedied through any applicable
statutory penalties. Willis of N.Y., Inc. v. DeFelice, 299 A.D.2d 240, 242, 750 N.Y.S.2d 39, 39
(1st Dept 2002) (finding potential loss of business was sufficient to support determination of
irreparable harm); Hoppmann v. Sargent Stein, Inc., 141 A.D.2d 332, 334, 529 N.Y.S.2d 87, 87
(1st Dept 1988) (holding the balance of the equities did not favor plaintiff when [t]he
threatened damage to plaintiff is speculative and easily compensable while the hardship to
defendants, the inability to commence construction of a large-scale project, would be far more
harmful.).
26
If Lyfts business operations are shut down, no award of monetary damages will remedy
the harm to Lyfts reputation, good will and valuable commercial relationships in New York
(and nationwide). A restraining order or injunction would permanently discourage use of Lyft,
causing further irreparable harm. In contrast, any technical violation of any provision of the
Insurance Law, for hire statutes, or other laws cited by Plaintiffs can be fully remedied through
normal enforcement of any applicable laws.
Finally, Plaintiffs have already begun irreparably harming Lyft by making
misrepresentations to the public that this Court granted the State a temporary restraining order
and injunction. As if such statements were not harm enough, Plaintiffs also accused Lyft of
flout[ing] dozens of different laws. Amazingly, Plaintiffs have not alleged violations of
dozens of laws in this proceeding despite their kitchen sink approach to unsubstantiated
allegations. Further disruption and interference with Lyfts legitimate and legal business
operations prior to a trial on the merits is unjustified and not supported by a balance of the
equities in this case.
27
CONCLUSION
For the reasons stated herein, Defendant Lyft respectfully requests that the Court deny
Plaintiffs motion for a temporary restraining order and preliminary injunction.
Dated: New York, New York
July 14, 2014 Respectfully submitted,
SIDLEY AUSTIN LLP
/s/ Martin B. Jackson
Martin B. Jackson
([email protected])
Andrew R. Holland
([email protected])
Marissa Alter-Nelson
([email protected])
787 Seventh Avenue
New York, NY 10019
Tel: (212) 839-5300
Fax: (212) 839-5599
-and-
SCLAR ADLER LLP
Alan M. Sclar, Esq.
([email protected])
19 West 34
th
Street, 1018
New York, NY 10001
Tel: (646) 494-3240
Fax: (212) 537-0359
Attorneys for Defendant Lyft, Inc.