ACTIVE 202632959v.4

SUPREME COURT OF THE STATE OF NEW YORKNEW YORK COUNTY--------------------------------------------------------------------X

Index No. 451476/2014

IAS Part 5Justice 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 theState of New York,

Plaintiffs,

- against -

LYFT, INC.,

Defendant.

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DEFENDANT’S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS’ MOTION FOR

TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

SIDLEY AUSTIN LLP787 Seventh AvenueNew York, New York 10019Tel: (212) 839-5300Fax: (212) 839-5599

SCLAR ADLER LLP19 West 34th Street, 1018New York, NY 10001Tel: (646) 494-3240Fax: (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

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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

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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 requirements1—

designed to destroy Lyft’s 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

Dep’t 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 AG’s and the Superintendent’s 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 Lyft’s application to adjourn the hearing on Plaintiffs motion for a temporary restraining order based upon Lyft’s 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.

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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 Lyft’s application platform on their mobile phone or tablet (commonly referred to

as a “smartphone app”). Although the technology behind Lyft’s 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 Lyft’s 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 Lyft’s

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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 Lyft’s 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.

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Lyft’s users receive potential insurance benefits only through Lyft’s 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, Lyft’s 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 Lyft’s 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

Plaintiffs—who have been aware of Lyft’s operations in the State of New York for months—can

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 Lyft’s 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 Lyft’s reputation, good will and valuable commercial

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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 Lyft’s 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, Lyft’s smartphone app notifies the passenger of the suggested donation for the driver after the passenger is dropped off at the requested destination.

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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 Lyft’s 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 AG’s 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.

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Although the technology behind Lyft’s 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 Lyft’s 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.

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Lyft’s 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 Lyft’s 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.

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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 Dep’t 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 Dep’t 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 Dep’t 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 Dep’t 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 Dep’t 1981) (A plaintiff’s 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.

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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 Dep’t 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 Dep’t 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 Dep’t 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 Lyft’s 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

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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 authorityto 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 . . .

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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 Lyft’s 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 Lyft’s 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 Lyft’s 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.

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2. Lyft Is Not Violating Insurance Law Section 2117

Plaintiffs incorrectly argue that Lyft’s 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 2117’s prohibition against aiding an unlicensed insurer in effecting insurance.

In People on Complaint of Wood v. Int’l Broad. Corp., 143 Misc. 122, 124-25, 255 N.Y.S. 349,

352-53 (Magis. Ct. 1931), the court, in interpreting Section 5011 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 Lyft’s

users, nor has Lyft or its insurer ever made any attempt to do so. Thus, Lyft’s 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 2122’s 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 Lyft’s 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.” Dep’t 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 Lyft’s conduct violates 11 N.Y.C.R.R. § 153.8.

Section 153.8 is not applicable to Lyft’s 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 Lyft’s

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 Lyft’s ridesharing

application. Rather, the benefits of Lyft’s pre-existing, nationwide insurance policy are provided

to Lyft’s 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

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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. Att’y 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 OAG’s 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 Lyft’s 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

Dep’t 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

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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 Lyft’s

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] City’s 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 Lyft’s 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 Int’l Inc. v. Di Pino, 109 A.D.2d 235, 240, 491

N.Y.S.2d 345, 349 (1st Dep’t 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 Dep’t 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 Lyft’s 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

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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 Lyft’s 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 Lyft’s 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 Lyft’s 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 Lyft’s 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

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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 AG’s 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 General’s 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 Dep’t 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

Dep’t 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).

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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 Dep’t 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 court’s 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 Dep’t 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

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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 AG’s office to investigate Lyft’s

rideshare program and not a single one of them has provided any factual support for a finding

that Lyft’s 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 Lyft’s 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 Dep’t 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 Int’l 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

Lyft’s 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 Lyft’s insurance, none of the alleged inadequacies create any harm, much less irreparable harm.

25

attempt by Plaintiffs to shutdown Lyft’s 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 Dep’t

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 Dep’t 1976) (finding balance of equities did not tip in plaintiff’s

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

Lyft’s 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 Dep’t 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 Dep’t 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.”).

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If Lyft’s business operations are shut down, no award of monetary damages will remedy

the harm to Lyft’s 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 Lyft’s 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.

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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. JacksonMartin B. Jackson(mjackson@sidley.com)Andrew R. Holland (aholland@sidley.com)Marissa Alter-Nelson(malternelson@sidley.com)787 Seventh AvenueNew York, NY 10019Tel: (212) 839-5300Fax: (212) 839-5599

-and-

SCLAR ADLER LLPAlan M. Sclar, Esq. (asclar@sclarlaw.com)19 West 34th Street, 1018New York, NY 10001Tel: (646) 494-3240Fax: (212) 537-0359

Attorneys for Defendant Lyft, Inc.