Follender, J.d.c., Temporarily Assigned.
In this proceeding in lieu of prerogative writs, plaintiff Taxi's, Inc., a New Jersey corporation, challenges the validity of Ordinance 1976-3, as amended, adopted by the governing body of defendant Borough of East Rutherford on March 4, 1976, the purpose of which is to license and regulate taxicabs operating on and along the streets of East Rutherford. The action was commenced by the filing of a verified complaint and order to show cause executed by the court on September 23, 1976. The order to show cause restrained trials on all summonses issued by East Rutherford for violation of the ordinance, pending determination of this case, although it did not prohibit the further issuance of summonses for alleged violations of the ordinance. As of the date of the trial on January 27, 1977, over 40 summonses and complaints had been issued to 25 different taxicab owners charging a violation of the ordinance for failure to obtain a taxicab owner's license, including seven citations issued to Taxi's.
The initial and primary question before this court is whether the requirement that a taxicab owner obtain a license for which a fee of $500 must be paid for the first taxicab and
$200 for each additional taxicab operated by any one owner in East Rutherford, as mandated by § 3B of the ordinance, is prohibitive, excessive and confiscatory. Although varying fact situations have brought this question to the attention of our courts previously, research fails to disclose a fact situation such as here, where the business activity sought to be licensed and regulated, transitory in character, is accorded the same governmental treatment without regard to whether the business situs is located within or without the municipal boundaries.
Overshadowing this controversy is the presence of the Sports Complex, a creature of the New Jersey Sports and Exhibition Authority (Authority), located in East Rutherford. The Complex presently consists of a football stadium, commonly known as Giants Stadium, having a seating capacity of 76,500 (during the 1976-77 season each Giant home game was a sell-out), and the Meadowlands Race Track, accommodating on the average some 12,000 to 20,000 persons each racing day. Large parking areas surrounding the facilities have been provided for the benefit of the throngs attending the various attractions. Access to the Complex may be had only by over-the-road motor vehicles, with traffic being fed into the area through the use of two main arteries, the New Jersey Turnpike and New Jersey State Highway 3.
East Rutherford's position is that the Complex has been located within its boundaries without its consent and, more importantly, that as a direct result of the Complex's location East Rutherford has suffered a substantial loss of tax ratables previously enjoyed. The borough further contends that although it derives no profit from the Complex activities, it has been forced to cope with ancillary problems created thereby, such as a substantial increase in all forms of motor vehicular traffic, crowd control and an increased crime rate. East Rutherford argues that it is entitled to make an appropriate charge for the extra-governmental costs thrust upon it by the unwelcomed Complex activities, the charge to attach to each of the specific business activities carried
on which require regulation. Finally, the borough maintains that the specific business activity conducted by taxicabs in the borough has increased by geometric proportions since the opening and continued operation of the Complex, and that its answer to the specific problem, the enactment of Ordinance 1976-3, as amended, entitled, "An Ordinance to License and Regulate Taxicabs and Taxicab Drivers in the Borough of East Rutherford", is reasonable, appropriate and necessary.
At trial Taxi's called its general manager, Harry Richart, as its sole witness. He testified that Taxi's is engaged in the business of ownership and operation of seven taxicabs for public hire, having its situs in the neighboring municipality of Hasbrouck Heights; that it serves a local area, solely intrastate, within a five-mile radius of Hasbrouck Heights which includes East Rutherford; Taxi's never has and does not now maintain any cabstands or other stations in East Rutherford or in any of the other municipalities which it serves, other than Hasbrouck Heights and Hackensack. Richart stated that Taxi's pays an annual taxicab ownership license fee of $5 for each taxicab to Hasbrouck Heights and a $50 annual owner's license fee for each of two taxicabs to Hackensack where it maintains a cabstand, and a license is not required in any of the other municipalities where it conducts its business. Taxi's fare structure is governed by that established by Hackensack -- $1 for the first mile and 20 cents for each additional fifth of a mile as measured by the meter -- there being no other rate schedule established by any of the other municipalities served by its taxicabs. The average received for each completed service amounted to $2.60 to $3.
Richart further testified that the usual practice followed by Taxi's while conducting business related to east Rutherford was to respond to telephone requests from a person or persons inside or outside of the municipality for transportation to a destination either inside or outside of the borough; that Taxi's averaged five or six calls a day, resulting in an
average of $15 a day gross business; that despite the passage of the ordinance on March 4, 1976 Taxi's continued to conduct its business in East Rutherford without incident until late September or early October 1976, when the Complex commenced its business operations.
After the opening of the Complex, although Taxi's business did not increase appreciably, it was frequently requested to respond to calls, a portion of which were received late at night, often from the police employed directly by the Authority, to accept passengers stranded at the race track, and Taxi's complied with those requests. At the same time Taxi's received a series of summonses alleging violation of Ordinance 1976-3 for failure to obtain a taxicab owner's license. Taxi's then made application for an owner's license, which was not issued because it refused to pay the license fee demanded, but it continued to provide service in East Rutherford until receipt of the seventh citation charging it with violation of the ordinance. Taxi's then ceased all business activity in East Rutherford pending the outcome of this litigation.
East Rutherford produced as witnesses Chief of Police Daniel Logatto, and Taxicab Inspector George Kallimanis. Logatto testified that he is familiar with the present taxicab activity in the borough and the impact of the same on the police department. He stated that the only increase in the workload on the police department has been in terms of record keeping and an occasional check on out-of-town cabs to ascertain whether they had in fact obtained the necessary owner's license. His testimony reveals that prior to the adoption of the ordinance the police department consisted of 26 regular employees, and at present the number is the same. Three special patrolmen are employed by the police department; however, they have been engaged pursuant to the Comprehensive Employment and Training Act (CETA) and their salaries are paid by the Federal Government under the federal aid program. Although these special patrolmen are authorized to perform all functions of regular members, their
duties are confined primarily to traffic, and they have been hired only on a year-to-year basis. Also, four civilian dispatchers were engaged before the opening of the Complex and are still regularly employed. Logatto further testified that the basic police duty in connection with the ordinance is to review each application received from the Taxicab Inspector, make a record check and fingerprint the applicant. To date only two taxicab owners have filed applications necessitating the required review and processing, and in connection therewith 3 1/2-4 hours have been spent in reviewing each application and completing the necessary police procedures, all of which work has been performed by a detective in the ordinary course of his employment. Chief Logatto further stated that the usual and necessary police protection at the Complex is provided by the New Jersey State Police and other security forces engaged by and under the control of the Authority, at its sole cost and expense.
Kallimanis testified that he is an accountant by trade, regularly employed on a full-time basis five days a week by American Totalizer Company located in Clifton, New Jersey, and that he possesses no special training in the field of inspection or repair of a motor vehicle. He described his duties as Taxicab Inspector to include the review of applications submitted for owner's and operator's licenses and to enforce the provisions of the ordinance. It is his function to supply the necessary forms to an applicant and to receive the same upon completion, which he then transmits to the police who in turn notify him of the results of their investigation. Kallimanis then inspects each vehicle in question for cleanliness and state of repair of the interior. He then forwards the application to the governing body, together with his recommendation for or against issuance of the license sought. Kallimanis testified that to date he has processed only two applications, each of which took approximately five hours to process, one application having been filed by the owner of a taxicab company located in Hasbrouck Heights having a
total of four taxicabs and the other by the owner of a taxicab company operating two taxicabs and having its principal place of business in East Rutherford. He stated that he spends approximately 20 hours a week in this employment, all of that time, other than that spent in reviewing applications as aforestated, in forcing the terms of the ordinance by making observations of taxicabs operating at taxicab stands provided at the Complex to ascertain whether there has been compliance with the ordinance, and thereafter attending municipal court sessions each Tuesday night in connection with summonses issued by him. Kallimanis testified that he had issued approximately 40 summonses to some 25 unrelated taxicab companies, all of which remained unheard at the time of trial. His testimony further revealed that upon the opening of the Complex approximately 50 taxicab companies had served the area, but that number has now been reduced to two. Additionally, he stated that although his remuneration set by the ordinance is $2,500, he has to date received only $1,250. Finally, he testified that plaintiff's application has never been accepted or rejected since, by reason of its refusal to pay the license fee demanded the application has not been processed to a conclusion.
The relevant sections of Ordinance 1976-3, as amended, reveal the legislative pattern intended thereby. Section 1A defines "taxicab" as any vehicle in the business of carrying passengers for hire, operating on any of the streets of East Rutherford and which accepts or discharges persons from points or places to points or places within and without East Rutherford. Section 2A declares that no person shall engage in the taxicab business or operate a taxicab upon the streets of East Rutherford without first having obtained a license for each taxicab. Section 3B establishes the annual fee for each taxicab owner's license or any renewal thereof at $500 for the first ...