Hertz Corp. v. City of New York, 80 N.Y.2d 565 (1992)
New York State legislation addressing car rental practices does not set forth a sufficiently comprehensive scheme of regulations to preempt further legislation in the field by the municipalities of the state.
Summary
The Hertz Corporation challenged a New York City law prohibiting car rental companies from discriminating based on a renter’s residence. Hertz argued that existing state laws preempted the city’s law. The New York Court of Appeals held that the state legislation regulating car rental practices was not comprehensive enough to preempt local laws. The Court reasoned that while the state had enacted some regulations regarding car rentals, these regulations did not demonstrate a clear intent to occupy the entire field or specifically address the issue of residence-based pricing. The City law was thus valid.
Facts
Hertz announced a plan to increase rental rates in New York City based on the renter’s borough of residence, citing higher liability losses in certain boroughs. The New York City Council responded by enacting the “Hertz Law,” which prohibited rental car companies from refusing to rent or imposing fees based on a person’s residence.
Procedural History
Hertz sued the City in federal court, seeking an injunction against the enforcement of the Hertz Law. The District Court dismissed Hertz’s complaint but barred the City from enforcing the law pending appeal. The Second Circuit Court of Appeals certified the question of preemption to the New York Court of Appeals. The New York Court of Appeals accepted the certified question.
Issue(s)
Whether New York State legislation addressing car rental practices sets forth a sufficiently comprehensive scheme of regulations to preempt further legislation in the field by the municipalities of the state.
Holding
No, because the existing state regulations concerning car rental practices do not establish a comprehensive and detailed regulatory scheme that evinces an intent to preempt municipal laws dealing with rental vehicle company practices.
Court’s Reasoning
The Court of Appeals stated that a local law can be invalidated if it is inconsistent with state law, either through an express conflict or because the state has clearly intended to preempt the entire field. Citing Jancyn Mfg. Corp. v County of Suffolk, 71 NY2d 91, 96-97, the court reiterated that preemption occurs “where the State has clearly evinced a desire to preempt an entire field thereby precluding any further local regulation”.
The Court found no express conflict between the state and local laws. The state statutes (General Business Law §§ 396-z, 391-g, 391-i, and 398-b) address specific abuses in the rental vehicle industry, such as discrimination based on age, credit card ownership, race, color, ethnic origin, or sex, and the imposition of certain additional fees. However, none of these statutes specifically addresses residence-based pricing. The court observed, “None of these statutes addresses the question of whether the rental vehicle companies can refuse to rent cars to an individual or impose fees or charges based on that individual’s residence.”
The Court emphasized that the state scheme was not broad or detailed enough to conclude that all local law in the area was preempted. The existing laws “merely proscribe discriminatory practices against renters or the imposition of additional rental fees.” The State regulations regarding motor vehicles in general (Vehicle and Traffic Law), while applicable to rental cars, also did not show an intent to occupy the entire field of rental car company practices. As the court noted: “These statutes also do not address the question of whether rental vehicle companies can charge rental fees based on area of residency within the State and do not establish that the Legislature ‘enacted a comprehensive and detailed regulatory scheme in the field’.” (citing Albany Area Bldrs. Assn, v Town of Guilderland, 74 NY2d 372, 377).
The court concluded that the state legislation applies generally to vehicles registered in the state and occasionally refers to rental car companies, but it does not regulate the amounts that these companies can charge to residents of different areas. Thus, it could not be said that the legislature intended to regulate the entire field of rental vehicle company practices and preempt local legislation on that subject.