NYC settles with TLC cabdrivers for $140M in back pay in long-running lawsuit
Law 360
NYC To Pay $140M To End Taxi Drivers' Unfair Suspension Suit
By Linda Chiem
Law360 (March 17, 2025, 9:05 PM EDT) -- New York City has agreed to pay $140 million to settle a nearly two-decade-old federal class action alleging its practice of summarily suspending licenses for taxi drivers who've been arrested but not yet convicted deprives them of due process by denying them meaningful opportunities to challenge their suspensions.
The proposed $140 million settlement would cover claims from approximately 19,500 taxi and for-hire drivers who launched a constitutional challenge to the New York City Taxi and Limousine Commission's procedures for disputing the drivers' suspensions.
Attorneys for taxi drivers led by named plaintiff Jonathan Nnebe and the New York Taxi Workers Alliance filed a motion in Manhattan federal court Friday seeking preliminary approval of the settlement. The settlement class is defined as "all TLC-licensed drivers whose licenses were suspended by the TLC based on the driver having been arrested on a criminal charge any time between June 28, 2003, until February 18, 2020."
The drivers kicked off their suit in 2006, alleging the TLC systematically deprived drivers of their right to earn a living by treating the bare fact of an arrest as conclusive proof of danger, and ignoring any evidence that allowing them to continue to drive their cabs didn't pose any safety threats while their criminal cases were pending.
Taxi drivers whose licenses were automatically suspended after they were arrested for felonies or misdemeanors involving violence, driving or sexual misconduct are entitled to a post-suspension hearing under TLC rules. But those hearings were effectively meaningless, the drivers argued, given that no taxi driver had their license restored or was ever reinstated after such hearings.
The Second Circuit in 2019 largely agreed with the drivers, concluding that they had a protected property interest in their licenses and should've been given more meaningful opportunities to challenge their suspensions.
Shannon Liss-Riordan of Boston-based Lichten & Liss-Riordan PC, an attorney for the taxi drivers, said in a statement Monday that "we are very pleased to have reached this historic settlement with the city of New York in this long-running case."
"We believe it to be the largest settlement ever with the city of New York for a due process claim," she said. "We are also very glad the city has reformed its practices that were the subject of this case, so that hard-working drivers have a fair shot at getting back to work quickly when their licenses are summarily suspended based on an arrest. This was a long-awaited and very just result."
Daniel Ackman of the Law Office of Daniel L. Ackman, who also represented drivers, said in a Monday statement, "To suspend hardworking cabbies based on an arrest — not a conviction, just an arrest and to follow it up with a sham hearing was always odd and outrageous. It was also unconstitutional as the Second Circuit held six years ago. Some compensation for drivers abused by this regime is long overdue."
NYTWA's executive director Bhairavi Desai said in a Monday statement that the litigation and settlement "not only will result in meaningful compensation for thousands of drivers whose constitutional rights were violated, but has also effected important change at the TLC." The New York City Law Department said in a Monday statement that "this settlement is in the best interest of the city and a fair resolution for over 19,000 class members, bringing an end to litigation that has lasted for nearly two decades."
"In 2020, TLC amended its processes, which have been upheld as constitutional and demonstrate the agency's commitment to protecting the rights and fair treatment of taxi drivers," it added.
The settlement must still be approved by the court.
Representatives for the TLC could not be immediately reached for comment Monday.
The taxi drivers and the NYTWA are represented by Shannon Liss-Riordan and Bradley Manewith of Lichten & Liss-Riordan PC, Daniel L. Ackman of the Law Office of Daniel L. Ackman, and David T. Goldberg of Donahue Goldberg & Herzog LLP.
The TLC and other defendants are represented by Amy J. Weinblatt and Marcy J. Simone of the New York City Law Department.
The case is Nnebe et al. v. Daus et al., case number 1:06-cv-04991, in the U.S. District Court for the Southern District of New York.
--Editing by Adam LoBelia.
Correction: A previous version of this story included a statement from the Law Department that misstated the year the TLC amended its processes.
Clarifications: The story has been updated to clarify the scope of the settlement and the claims at issue in the dispute.
