Category: Local Legislation
The 1984 film, Footloose, imagines the small, midwestern town of Bomont, where dancing and rock’n roll music have been banned, only to be redeemed in the end by a teenager’s impassioned plea. Footloose’s plot may seem farfetched but a law with similar intent has gripped New York City since 1926 when the city passed the Cabaret Act. Under the Cabaret Act, any place open to the public that sells food or drinks, alcoholic or not, including “pubs, taverns, and discos,” are required to obtain a license if they want to allow dancing in the establishment. One of the pre-requisites for a cabaret license states that “cabarets” must have video surveillance and security on the premises at all times. However, after 90 years of forcing most of its bars and nightclubs to effectively operate like the clandestine prom from the end of Footloose, New York City Council member Rafael Espinal and Mayor Bill de Blasio have finally brought dancing back to New York City.
The cost of obtaining a cabaret license was inexpensive, ranging from $150 to $1,250 (with minor additional costs), but the process required to get a license and to meet the accompanying surveillance requirements were particularly onerous. To obtain a cabaret license, an establishment had to submit extensive and intrusive records about both the business and building where the establishment is located, as well as receive approvals from the Fire Department, a licensed electrician, and the local Community Board. Due to these overwhelming requirements, and a lack of consistent enforcement, there were only 104 licensed “cabarets” in the entirety of New York City as of 2017. Most establishments where dancing occurs are unlicensed and can potentially be subject to severe penalties.
The Cabaret Act, as originally passed, was a blatantly racist law, targeting African American jazz clubs in Harlem. When passing the law, the Board of Alderman used coded racist language in their rationale, referring to the individuals going to the dance halls as “wild people.” At the same time, the Aldermen exempted large hotels in upper class, primarily Caucasian areas, from the licensing requirement. Until 1967, the law also required musicians who played in establishments with liquor licenses to obtain “cabaret licences” as an individual. As the process of obtaining a musician license required a criminal background check and could be revoked for almost any reason, many prominent jazz musicians were unable to perform in New York City clubs, including Charlie Parker, Billie Holiday, and Thelonious Monk.
While New York City officials have occasionally made concerted attempts to crack down on unlicensed “cabarets,” wider scale closure movements occurred in the aftermath of nightclub fires in 1976, 1988, and 1990. For long periods of the Cabaret Act’s history, there was almost no enforcement at all, particularly in the 1970s and 1980s. However, beginning with Mayor Rudolph Giuliani’s election in 1994, New York City began to strictly enforce the cabaret law as part of Mayor Guiliani’s quality-of-life initiatives. Through his Multi-Agency Response to Community Hotspots, or MARCH, Mayor Guiliani directed several municipal agencies to scrutinize establishments for violations, with the purpose of curtailing the city’s nightlife. Some people believe that Mayor Guiliani’s strict enforcement of the cabaret law contained a racial element similar to the law’s original intent.
Mayor Michael Bloomberg’s administration continued Mayor Guiliani’s crackdown on New York City’s nightlife, employing the cabaret law as well as noise ordinances and a ban on smoking in public places, to severely limit the proliferation of nightclubs. Towards the end of his tenure in office, Mayor Bloomberg considered repealing the cabaret law but ultimately failed to do so. Following his election, Mayor de Blasio relaxed enforcement of the cabaret law and, and after over 90 years, repeal finally became a reality.
In 2017, City Council member Rafael Espinal introduced several bills to reform New York City’s nightlife, including repealing the Cabaret Act. On September 19, 2017, Mayor de Blasio signed bill number 1688-2017 – which amends the New York City charter, in relation to establishing an office of nightlife and a nightlife advisory board – into law. The law establishes a Nightlife Advisory Board and an Office of Nightlife to examine the issues affecting the city’s nightlife and to make recommendations to the Mayor for improvements. The bill passed almost unanimously, with only City Council member, Rosie Mendez, voting in the negative.
The Cabaret repeal, bill number 1652-2017 subchapter 13, however, retains similar security and surveillance requirements to those under the Cabaret Act, including having video surveillance cameras and security guards in all nightlife establishments with dancing. The bill defines a nightlife establishment as one that is “(i) open to the public after 12:00 a.m. at least one day each week; (ii) is required to have a license to sell liquor at retail pursuant to the alcohol beverage control law; and (iii) satisfies at least two of the following factors: 1. At least 2500 square feet of such establishment is open to the public; 2. Has an occupancy load of at least 150 persons as described on the certificate of occupancy; or 3. Imposes a fee for admission at least once a week.”
On November 27, 2017, Mayor de Blasio signed Int. 1652-2017, officially repealing the Cabaret Act. de Blasio stated, “This law just didn’t make sense. Nightlife is part of the New York melting pot that brings people together. We want to be a city where people can work hard, and enjoy their city’s nightlife without arcane bans on dancing.”
In March 2018, Mayor de Blasio appointed the City’s first “Night Mayor,” Ariel Palitz. Mayor Palitz will be paid $130,000-a-year to lead the newly created Office of Nightlife that has a $300,000 annual budget. Palitz is the former owner of now-closed East Village nightclub Sutra, which was once labeled the city’s loudest watering hole.
It appears that New York City is finally free of its connection to the fictional town of Bomont.
In October 2017, California became the first state to pass a law to deter the use of puppy mills by potential puppy buyers. Under the new law, pet stores must work with animal shelters and other rescue operations to obtain dogs, cats and rabbits, and are prohibited from using breeders. However, private and individual customers can still use puppy mills, and nothing in the act adds direct regulations on domestic animal breeders in the state.
Over the past several years, there has been a nationwide conversation among pet lovers about the ethics of puppy mills. At the center of the debate is the competition for owners between adoption/rescue groups, and breeders. According to the American Pet Products Association (APPA), 34% of currently owned dogs were raised by a breeder, as opposed to 23% coming from an animal shelter or other humane rescue group. Origination data is not entirely clear however, as the American Humane Association (AHA) and the American Veterinarian Medical Association (AVMA) put breeder-acquired ownership figures at less than 20%. Shelter-based ownership figures vary even more, with the AVMA putting the adoption population at 84.7% and the AHA estimating a 22% adoption population. Available figures for breeder-acquired cats are below 5%. While it is difficult to claim that adoption and rescue agencies are at a disadvantage for owners strictly because of breeder competition, the sheer number of pets in shelters (5-8 million dogs and cats) and getting euthanized every year (3-4 million dogs and cats), makes many wonder why people use breeders at all. Proponents of laws like California's believe that people who buy breeder-bred animals could have instead adopted an animal from a shelter.
Another facet of the “puppy mill” debate is the living conditions in breeder facilites. Claims of animal cruelty plague the reputation of breeder businesses. Though breeder operations are governed by Federal USDA regulations and inspections, irresponsible breeders can evade these oversights and sell animals that have been bred improperly, leading to pets with physical and psychological ailments. Many times, these irresponsible breeders will focus on quantity, instead of quality of the animals (hence the term “mills”) possibly leading to poor health, abandonment, or even death of the animals. Since these disreputable breeders often sell to pet stores, instead of directly to screened buyers, laws like the one California just passed will likely serve as a significant deterrent for negligent breeders. However, some detractors of the bill say many cities statewide (including LA, San Diego, and San Francisco) already ban “mass breeding” and other unhealthy practices, so this new law is more likely to constrain the breeders who do not engage in these poor practices, yet sell to pet stores, than the irresponsible breeders.
Aside from animal welfare, steering potential pet owners and pet shops to animal shelters should benefit the state’s taxpayers. Publically run animal shelters cost the state approximately $300 million a year. If this law has its intended effects and decreases overcrowding in animal shelters, the state can accordingly decrease spending on housing, feeding, and servicing shelter animals. While California may pinch some pennies with decreased animal shelter populations, the breeding community may suffer economically under this bill. California has roughly 800 active breeders selling animals in the state. Even if only a small percentage are fully reliant on pet stores for income, that is still dozens of California’s workers being effectively forced out of a job under this law. However, some of this job loss may be offset by impacted breeders selling to out-of-state pet stores who do not have similar laws.
Though California’s new law was a key win for anti-puppy mill and animal welfare advocates, there are still some detractors. For example, this law may present challenges to those seeking specific breeds for their pet. Consumers may no longer easily get breed specific animals in pet stores, and specific breeds may become more costly. This might be particularly cumbersome for someone looking for a service animal of a particular breed best suited to help manage a condition. The American Kennel Club released a statement saying the law “not only interferes with individual freedoms, it also increases the likelihood that a person will obtain a pet that is not a good match for their lifestyle and the likelihood that that animal will end up in a shelter.” Further, this legislation may have the unintended consequence of increasing animal deaths and abandonment at puppy mills, because the mills no longer have access to their main customers. If the mills have not sold off all their animals by the 2019 effective date of this law, the animals may have nowhere to go. Breeders whose business is hurt as a consequence of this law may spend even less money on the care of the animals, or be forced to surrender the animals to a shelter. But given the delayed effective date of the law and the continued legality of breeder use by individual parties, the foreseeable issues will likely be negligible in light of the positive changes.
Since California passed this law, a Massachusetts lawmaker has also proposed a similar bill that would deter the practice of commercial breeding. Though California is the first state to pass this kind of prohibition, cities all over the country have been passing similar ordinances, so it is likely that states will follow suit if California’s law works as intended.
As I stepped off the plane and into the jet bridge, I already had my Uber app opened on my smartphone, and only a few short minutes after requesting a ride, the driver was calling me to tell say that he was outside baggage claim. This kind of convenience and ease that e-hailing companies like Uber and Lyft provide is what we have grown accustomed to as consumers.
E-hailing companies, or transportation network companies (TNCs), have made finding a ride very convenient for city dwellers and travelers alike. Whether it is one of the main players like Uber or Lyft, or one of the newer startups like Juno, Fasten, or Gett, TNCs have become an integral part of how we travel and for some of us, our everyday lives.
As convenient as TNCs are, legislatures across the country have made it clear that these companies will not be free from regulation. Rather, city and state legislatures have proposed legislation that will both allow TNC, but also protect riders.
In early February 2017, New Jersey Governor Chris Christie signed a new law making the Garden State the most recent of the 36 states to regulate TNCs. This new law, the Transportation Network Company Safety and Regulatory Act, which is similar to Massachusetts’s 2016 law, requires that TNC companies cover up to $1.5 million dollars in liability insurance and that drivers get background checks. However, TNC drivers are still not subject to the same fingerprinting background checks as taxi drivers. Additionally under the law, the public still does not have access to the safety records of drivers, a concession made by lawmakers in its negotiations with Uber. Municipalities are also prohibited from taxing TNC companies, promoting a more uniform single statewide regulation.
The New Jersey legislation did not come without a fight, however, with Uber demanding limits to regulations. In fact, Uber, throughout its many negotiations with city and state legislatures around the country, has consistently threatened to withdraw all of its business in the city or state at issue if the legislature does not adopt its preferred regulations. This is especially true when it comes to the fingerprinting requirement, which Uber particularly opposes. According to Uber, requiring drivers to get fingerprinted would make it harder to recruit drivers. Uber also claims that the requirement would be unfair to minority applicants, as fingerprint background checks only indicate arrests, not convictions, and false arrests are more frequent in minority neighborhoods.
Prior to the enactment of New Jersey’s statewide law, Uber had been in contentious negotiations with many New Jersey cities including Newark, the State’s largest city by population. In the end, Newark and Uber were able to come to an agreement, and Newark passed a now pre-empted ordinance where Uber would pay Newark $10 million in fees, and drivers would be required to get background checks by a nationally accredited third-party, but there would be no fingerprinting requirement.
Austin, Texas, however, had a different experience. Austin’s city council passed an ordinance requiring driver background checks with fingerprinting. Rivals Uber and Lyft joined forces and campaigned for Proposition 1, which would repeal the ordinance. The two companies spent $8 million dollars on advertising, or $200 per vote to get their message across. Yet, the campaign failed to sway voters, and Proposition 1 lost 44% to 56%. The day after the election, Uber and Lyft made good on their threat to withdraw their services from the area, leaving drivers and riders unable to use either app in the Austin area. Uber did the same to other Texas cities Midland, Corpus Christi, and Galveston, leaving because it did not agree with the local ordinances that had been passed.
Ending service so abruptly had a negative impact on riders who had become accustomed to this mode of transportation and drivers who relied on both companies for a source of income. Austin eventually set up a hotline and job fair for these suddenly out-of-work Uber and Lyft drivers. Luckily for Austin, riders and drivers were not left out in the lurch for too long, as entrepreneurs and new e-hailing companies quickly filled the void left by the two giants. Uber and Lyft left on May 9th and by the summer, there were ten companies who were set up and ready to compete. More than that, these new companies were able to get roughly 9,000 drivers to sign up and all of the companies met the August 1 deadline to have at least half of their drivers fingerprinted. All of the companies had to be in full compliance with the ordinance by February 1, 2017.
Ironically, these hard-fought battles between Uber and Lyft and America’s largest cities might all be for naught. Despite Austin’s city council’s win in keeping their city ordinance on the books, the state legislature passed, and on May 29th Governor Greg Abbott signed, a statute that pre-empted Austin’s ordinance. Since a local government only has the authority granted to it by the state, when state and local laws conflict, the local law will typically be pre-empted. Abbott stated, "In Texas we don't believe in heavy-handed, top-down, one-sided regulatory environm
ents that erect barriers for businesses, in Austin, Texas, we're going to override burdensome, wrongheaded regulatory barriers that disrupt the free-enterprise system upon which Texas has been based and upon which has elevated Texas to be the No. 1 state in the entire country for doing business." Texas joined other states, which have increasingly preempted local ordinances. The most recent and notable example is North Carolina’s HB2 law, which pre-empted Charlotte’s anti-discrimination ordinance.
Pre-emption in regards to TNC legislation may not be so terrible, however. There is a great benefit to both the state and companies to have one standard rather than multiple municipal ordinances. With a service such as ridesharing, it is not uncommon for someone to be picked up in one town and dropped off in another. Because of this reality, it may be preferable for the states to take the lead.
New Jersey's law shows the trend is certainly moving in the direction of state legislation, not municipal. However, now the question is will state legislatures remain strong in their positions or will they give in to what Uber and Lyft demand? As we have seen in Austin, there will always be a new company who is willing to comply with the new regulations if Uber and Lyft will not. Therefore, perhaps states should pass the ideal legislation that they feel best protects its citizens and let the market sort itself out. Uber and Lyft have a lot of negotiating power because they are the biggest players, but as we have seen, they do not have an impenetrable monopoly. As the city of Austin found out, the TNC market will not crash if Uber and Lyft leave. There are plenty of worthy “Davids” who would jump at the chance to fill the void of Goliaths Uber and Lyft, even if in the face of stricter regulation.
Merissa Pico is from Fort Lee, New Jersey and graduated summa cum laude from Boston University’s College of Communication in 2015 with a B.S. in Mass Communication Studies. She is expected to earn her J.D. from Boston University School of Law in 2018. Merissa will be working at Ropes & Gray in New York City in the summer of 2017 and is looking forward to continuing to explore her interests in entertainment and communications law.
Few issues in recent years have bedeviled lawmakers at the state and local level as much as the question of how to react to the online “sharing” economy, where people with a car they don’t use much or a typically empty spare bedroom decide to monetize their asset. When voters in Austin, Texas decided to require Uber and Lyft drivers to submit to mandatory fingerprint background checks, those two companies simply closed down their operations in the city. The overall picture for ridesharing and homesharing laws is, to be blunt, a mess. For the time being, flying under the radar would seem the safest course for the industry, since most jurisdictions still don’t regulate them at all.
These crosscurrents make the homesharing site Airbnb’s decision to approach the city of Washington, DC and offer to collect and remit taxes all the more curious. Even more interesting is that the District hasn’t bothered as yet to amend its laws regarding transient accommodations, meaning the entire industry continues to operate in a legal grey area in the city. Is this actually the company striving to be a good corporate citizen, as they claim? Is this a savvy move on the company’s part to insulate itself within regulatory opening? Or is it nothing more than regularized bribe for the city not to focus regulatory scrutiny on the company’s operations?
As much as one might think Airbnb’s decision to pay taxes was a tax issue, the tax laws turn out to be something of a red herring. The District of Columbia’s official code imposes a 4.45% excise tax on all temporary lodging, defining that term as “any hotel, inn, tourist camp, tourist cabin, or any other place in which rooms, lodgings, or accommodations are regularly furnished to transients.” Plainly if Airbnb fits anywhere in this statute, it falls under the “any other place” catchall.
Although Airbnb itself directs potential hosts to the taxing provisions, the more interesting questions here arise on the regulatory side, or, more precisely, the zoning side. Washington’s official code delegates detailed zoning regulations to a special Zoning Commission, charged with regulating a plethora of facets of the cityscape. The Zoning Commission in turn prescribes regulations for the permissible use land in the city. Use of a property as a Hotel, Inn or Motel, Bed and Breakfast, Boarding House, or Rooming House each triggers separate requirements. For example, a Hotel license requires just three rooms, but no parking spaces, while an Inn or Motel license requires 30 rooms with the availability of a parking space for each. Boarding House licenses and Rooming House licenses require the holder to offer at least five rooms in addition to meals, while a Bed and Breakfast license, while not having a minimum number of available rooms, apply to “guesthouses, housekeeping cabins and cottages, tourist homes and youth hostels.” Ultimately, none of these licenses seem appropriate for an Airbnb host since all of them require the applicant to register as either corporation or some other form of business and comply with a variety of city sanitary and fire codes.
Instead, potential hosts need a Home Occupation Permit, which allows the holder to conduct limited business or professional activities from a residentially zoned structure. Residential use regulations set out in detail what a Home Occupation Permit holder may and may not do on the premises. Even a cursory reading of these regulations reveals how their drafters intended them to apply: to (very) small-businesses or self-employed persons who operated their income producing activities from a small portion of their home or apartment.
One rule (11-203.4(b)) provides that only 25% of the premises may be used for the owner occupation; how is an Airbnb host supposed to enforce that? Draw lines on the floor or his or her apartment indicating the 25% of floor space a guest can use? Another subset of rules (11-203.6) limits the number and nature of retail sales on the property, while yet another (11-203.5) proscribes most types of outdoor signage. Section 11-203.8 of the regulations seems to offer some relief to potential hosts by providing that the owner may operate a Bed and Breakfast facility (and very kindly providing a dispensation from the floor area limitations mentioned earlier). Unfortunately, this exception does not apply to residences in a “multiple dwelling” (i.e. apartment buildings) and, more importantly, requires the owner to obtain a Bed and Breakfast license.
As things stand there appear to be three legal categories would-be hosts fall into. First, hosts who live in the place they’re renting and have fewer than two guests at a time must get a Home Occupation Permit and a Bed and Breakfast license. Second, hosts who live in the place they’re renting and have three or more guests at a time need special approval from the Zoning Commission and a Rooming or Boarding House license. Third, hosts who don’t live in the place they’re renting need a use variance from the city. The chart below lays out these categories. Hosts also need to remember that city laws don’t do anything to address separate apartment or condominium building rules.
Even the Washington, DC Department of Consumer and Regulatory Affairs (DCRA) admits this legal structure needs updating to reflect current practice. “The process was developed before the advent of services like Airbnb, so some updating to account for emerging business models may be warranted,” a DCRA spokesman conceded.
Given this regulatory patchwork, it seems clear that shoehorning the digital marketplace in transient accommodations into existing law is, at best, a half-hearted solution. Many hosts undoubtedly violate this legal framework, either deliberately or from sheer ignorance. With Airbnb paying taxes to the city, however, it seems unlikely that DC will crack down on violators. Condo boards and building management may be the only people properly incentivized to enforce the current law. And as our history repeatedly teaches us, any legal regime which turns large groups of citizens into scofflaws invites people to treat the rest of the laws with that much less respect.
The deaths of Michael Brown in Ferguson, Missouri and Freddie Grey in Baltimore has placed a spotlight on the problems of police brutality and misconduct. Responding to those deaths and other examples of police abuses, large scale protests, some of which have turned violent, and the Black Lives Matter movement have become prominent parts of a national discourse. Now the shootings of Philandro Castile in Minnesota and Alton Sterling in Louisiana, as well as the shootings of police officers in Dallas and Baton Rouge have made addressing the issue of police misconduct all the more urgent. An innovative idea being proposed to Minneapolis voters may be part of the solution.
In addition to the individual loss of life and suffering caused by police misconduct, there has been a larger societal cost. In 2015, after several years of decline, the murder rate rose 17% in the largest 56 cities in the country. Professor Richard Rosenfeld, writing for the National Institute of Justice, recently argued that community distrust of the police has made it impossible for police officers to do their jobs. Citizens often view the police less as partners in the community and more as invading armies, especially in minority majority inner cities. People in such communities have no faith in the police protecting them, and thus are much less likely to provide the assistance needed to close cases.
Several different policy approaches have been suggested to help improve these poor police / community relations including: bias training, increased data collection and body cameras. Each of these have been tested in different jurisdictions.
After the November 2015 police shooting of Jamar Clark, however, activists in Minnesota proposed a different approach; a ballot question that would require all police officers to purchase professional liability insurance, similar to the malpractice insurance carried by doctors. The base rate would be paid by the city, but the individual officers would be responsible for any additional rate raises due to personal or claims history. The hope is that this would price out police officers with multiple offenses, using market forces to remove uncontrollable police officers with multiple offences and encourage other officers to mitigate their behavior. Supporters of the law have pointed to cases like Officer Tyrone Barze Jr., who has been the subject of seven separate lawsuits and has cost the city over $300,000 dollars in settlements. Under a system of liability insurance, officers like Barze would be priced out of a job.
The proposal also hopes to shift some of the financial burden of civil rights settlements away from the taxpayers. In 1961 the Supreme Court ruled in Monroe v. Pape that police officers can be individually liable for civil rights violations. However primarily through pressure from police unions, individual liability for police officers vanished. Civil service unions are required to defend all of their members, even those who demonstrate bad conduct. In addition municipalities have incentives to quickly settle lawsuits rather then risk large jury settlement. Those two forces have combined to create a system where brutal and corrupt police officers are protected from disciplinary action and can continue to serve even after a pattern of malfeasance is established. From 2006 to 2011 the 44 largest jurisdictions paid out approximately $735 million in civil rights claims, police officers personally paid less the .02% of that money. Current Minnesota state law requires municipalities to cover payouts in cases where the harm was purely accidental and the police officer was acting within their duties. For cases where the officer was negligent or criminal the current ballot amendment would shift much of cost of settlements onto insurance companies.
Police groups and crime researchers have expressed several objections to the Minneapolis proposal, calling it “simplistic.” They argue that liability insurance would warp incentives for police officers. Officers may be unwilling to take the aggressive actions that are required for their jobs. The system would encourage officers to sit in their patrol cars, which would slow response time and hinder preventative policing. In addition the amendment brings up issues of due process. Insurance companies operate by manipulating and limiting risk. With mandated liability insurance, officers could have their rates increase even if they are found not legally responsible. In addition insurance companies would have a strong incentive to quickly settle cases and force higher rates on the officers accused. Insurance companies are profit-making institutions, and there is legitimate concern about offloading judicial decisions on companies whose prime goal is making money. Whether police officers keep their jobs could be made not by courts or oversight boards, but by actuary tables.
Despite these real drawbacks, the Minneapolis ballot initiative is an interesting test case. Federalism allows states and municipalities to experiment with out of the box solutions. The problems of police brutality and the related lack of community involvement and trust have created a dangerous situation in many of America’s cities. The impact of requiring liability insurance is still unknown, but this problem is so serious that unique approaches are worth trying. On July 13, 2016, the Minneapolis City Council approved putting the measure on the ballot. Hopefully, this will be a test case to help alleviate one of the most serious problems our cities face.
By: Phil Schneider <email@example.com>