ATOOL calls for industry-wide support in ‘last fight’ with city hall
by Mike Beggs
An estimated crowd of 120 industry members turned out at Montecassino Banquet Hall on October 10 to hear details of the All Taxi Owners and Operators Limited’s (ATOOL) proposed $1.7 billion class action suit against the City of Toronto.
Saying their economic situation is, “getting worse by the day”, ATOOL’s steering committee members urged the city’s 5,500 taxi plate holders to make a $500 contribution and get behind the cause.
“In two years, this business will be done,” warned Lucky 7 Taxi owner Lawrence Eisenberg, one of the suit’s plaintiffs. “This is a good turnout, but we need more. And if the people here don’t tell their friends, then we’re wasting our time.
“If you want your business to be saved, we need your financial support now.”
On July 13, he and co-plaintiffs Behrouz Khamseh and Sukhvir Thethi filed a Statement of Claim in the Ontario Superior Court, “on behalf of all persons who were holders of taxicab licenses pursuant to Chapter 545 of the Toronto Municipal Code on September 1, 2014, or who became holders of taxicab licenses between September 1, 2014, and July 15, 2016 (before the new Vehicle-For-Hire Bylaw licensing Private Transportation Companies took effect).
They’re seeking the $1.7 billion in damages to offset losses from the alleged “negligent manner” in which the City enforced Chapter 545 against drivers of unlicensed Uber X vehicles, and for adopting Chapter 546 in 2016, which, “disregarded the interests of taxi plate holders.”
“They’ve ruined the business. Let’s not kid ourselves,” Eisenberg alleges. “All that’s left is for us to take (legal) action for what they did.
“Their position has always been the same: ‘We can do whatever we want, and if you don’t like it take us to court.’”
One of ATOOL’s central arguments is that the City has reneged on its long-time promise taxi plates would represent the “taxi driver’s pension”. They claim that by allowing Uber X to “run wild” outside the bylaw for three years, and then granting PTC’s unlimited entry under the VFH Bylaw and seeing it flood the market with almost 70,000 Uber X cars, their plate and lease values have been reduced to a pittance.
“The City really went against us,” alleged veteran owner Henry Lorenz, who amassed three plates over several decades of driving.
“The City has to do something about this. They can’t just leave us dangling. What about if we want to leave something to the family?”
Lorenz noted he has a daughter with a disability, who relies on the rental income from his plates.
“She can’t work. What is she going to do?” he asked. “The City wants us to die off, and then there’s no problems.”
Owner Murray Weisblatt and his wife Sue also threw their support behind the action. In the business since 1970, Weisblatt drove for 46 years and built up two plates for his retirement.
After the meeting his wife told Taxi News, “I’m hopeful (the class action) will proceed. Whether it wins or not, I don’t know.
“We’ve lost so much money with the devaluation of the plate, a few hundred dollars isn’t going to make any difference. And until we get together, we’re history.”
She said after saving hard for their golden years, “What we’re getting from our plates now barely covers (Murray’s) medication.”
The group’s lawyer Michael Binetti, of Affleck Greene McMurtry LLP delivered an update on the status of the proposed class action. He explained it has, basically, been undertaken on behalf of all members who had a taxi license on September 1, 2014.
“That’s the day Uber X began its service. That’s when the real trouble started for your industry, with a loss of business and a loss of value in plates and leasing rates,” he alleged.
“The way we set up the claim is, the City was negligent in the way they sold out the business, under the bylaw. The bylaw said the Uber driver was illegal, and the City did nothing about it.”
He maintains this new regulatory setup, the Vehicle-For-Hire bylaw, was destined to fail from Day 1, with the licensed taxi industry placed at a big disadvantage going up against PTC’s.
“We are saying the City didn’t look out for your interests,” he related. “Basically, they had an obligation to consider the taxi industry’s efforts, put into the industry by you. They had a social obligation to look after you. We say they didn’t live up to it.”
Binetti noted that, in its Statement of Defence the City categorically denies the submission that it had, for decades, told owners the plate would represent their pension, or that it has an obligation to protect their financial interests.
“The City is saying, ‘We don’t owe you anything, and that the City of Toronto Act (2006) says we can do what we want,’” he added.
For the case to move ahead, ATOOL must now have its application for a class action certified by a Superior Court Justice.
“Is the claim tenable? That’s the next step,” Binetti explained. “We have to ask the court for permission to proceed with the claim.”
Involved “a lot” with the taxi industry over the years, Binetti advised that, “This is probably your best opportunity to have this issue decided.”
In a Question and Answer session, one owner observed that he and his peers, “can’t wait years and years for the City to play around with us” and wondered, “Is there any way we can get them to settle, or come to the table?”
Binetti responded that any case can be settled at any time, “but there’s always a level of inertia.
“Sometimes the best way to drive a settlement is to drive the litigation forward,” he said. “We are going to try and move them off their position that, ‘We did nothing wrong.”’
When asked if the owners have a good case, he answered, “It’s an excellent question. I can say, if the evidence goes our way it’s a good case.”
“It’s pretty hard to prove. There are always difficulties. Every time we fight the municipality it’s an uphill battle, because they make the laws.
“The City of Toronto has always said, ‘We did nothing wrong’. But we’re saying, ‘You may have the power, but the way you’re using it is not proper.’ Really, that’s where the rubber hits the road.”
Another 50-year-plus industry veteran wondered whether the Province of Quebec’s decision to compensate taxi owners for their losses could drive the Toronto class action forward.
“(Quebec) is a different system. I highly doubt it could drive a case action here,” Binetti said. “The thing I see with the City, over and over, they’re terrified to see the license treated as an asset. You have to say, ‘You created the whole market for these plates. You can’t pretend.’”
Binetti noted the City is using its in-house lawyers to handle this legal challenge.
He told the audience this legal action will require the participation, and financial support of all 5,500 plate owners, noting that as a case goes forward the financial risk (of a loss) goes up.
ATOOL steering committee members include Eisenberg, Khamseh, Thethi, owners Andy Reti and David Reti, City Taxi owner Avtar Sekhon, iTaxiworkers Association director Mohammed “Reza” Hosseinioun, and garage owner Javed Wali.
While ATOOL would have liked a larger turnout, after the meeting Andy Reti expressed guarded optimism about moving ahead with the action.
“Right now, we are going to wait for the certification. We’re going to go through with that, no matter what, because it’s a multi-step process,” he said. “We have the experience. We have the understanding. Whatever they throw at us it’s not a total surprise.
“I am feeling a definite change in attitude. People are beginning to realize the situation is serious, judging by the questions asked of the lawyer. Everybody seems to be aware that our future is in jeopardy.”
Hosseinioun agreed. “This fight must not be stopped, city hall, always they are saying we are divided. We want to change that and control this entire industry in our hands. Hopefully, the industry will rise up and work together.”
He alleged that Mayor John Tory himself managed to divide the councillors during the development of the 2016 VFH bylaw.
“He said the taxi plate was a tool to exploit the drivers,” he added. “So, in the case of Uber, he said, ‘You don’t need the plate (you can just drive).’ But he didn’t tell them the whole story. Now there are 67,000 cars. I don’t know how they’re making a living. It’s impossible for me.”
City Taxi assistant general manager Neil Shorey was among those who turned out to demonstrate support.
He dismissed the City’s ongoing Review of the VFH Bylaw, and the recent consultation with the various industry sectors, as a “dog and pony show”.
“They’re feeling around for the weak underbelly, to see if they can buy people off with a cheaper fee, here and there,” he alleged. “In a word, shambolic. They put (industry members) into round table meetings, to divide them up.”
At the meeting, owner Stephen Hozack admitted he is fearing the worst.
“I think we’re on the Titanic going down, and there’s no stopping us,” he told Taxi News. “We’ve fought the City so many times. I’m trying to be faithful, but I’ve come to these meetings a million times.
“I went to the owner’s consultation meeting in East York, and only 50 owners showed up.”
Eisenberg explains that to arrive at that $1.7 billion figure, ATOOL took the plate’s devaluation from a high of $350,000 to its present value of $30,000, creating a $320,000 loss, and multiplied it by the existing 5,500 plates. In addition, they are seeking damages for the loss of value in monthly lease rentals.
Mississauga plate owner Peter Pellier wonders, if the class action should prove successful , “wherever will the City find the $1.7 billion to pay the owners”?
“That’s their problem, not ours, ”Eisenberg responds. “The City is insured for negligence and malfeasance.”
Long-time owner/operator Gerry Manley suggests the City could float a bond to offset such costs.
He agrees that awards of such magnitude are rarely seen in Canadian courts, but suggests ATOOL could, “use any award you may receive to pressure the other side into doing other things to compensate for their lack of ability to pay.
“This is where our membership could very well force the City to enact a new bylaw, which in my opinion should be written by our membership, with (MLS Staff) assistance of course. Here, we can rectify all of the injustices we presently face.”
Eisenberg reiterated that the class action represents the sinking industry’s “last fight” for justice.
A week after the meeting, he noted, “There are a lot of people sending in donations. But we have to go after the other people who are sitting on the fence doing nothing – or you will get nothing.”
“Sure, we were hoping a lot more (owners would show up at the meeting),” Khamseh adds. “But I think once we get this class action certified things will be different.”