Court Weighs Revival of Taxi Medallion Suit

Appeals judges heard arguments on reviving a class-action RICO lawsuit by drivers who say New York City overcharged them for medallions.

Updated on Nov. 6, 2026 in Financial Crime

Court Weighs Revival of Taxi Medallion Suit

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Second Circuit judges heard arguments on Nov. 6 over whether to revive a class-action racketeering suit against New York City brought by taxi drivers. The judges did not immediately rule.

Why it matters

The drivers allege the city knew medallion values would collapse once ride-sharing apps were allowed to operate without medallions, leaving buyers with heavy losses. The outcome could determine whether the city faces claims seeking more than $2.5 billion in treble damages.

The Second Circuit has heard oral arguments on reviving the 2021 class action filed in the Eastern District of New York, and no ruling has been issued. The drivers allege a 13-year scheme by the New York City Taxi & Limousine Commission to defraud medallion purchasers, a claim the city has not had resolved in court.

The players

New York City Taxi & Limousine Commission

The city agency that regulates New York City's taxi industry and issues taxi medallions, and which the drivers allege ran a 13-year scheme to defraud medallion purchasers.

Michael Bloomberg

The former New York City mayor during whose administration the drivers allege the city overcharged them more than $850 million for medallions.

The details

The drivers claim the city sold medallions for years while knowing ride-sharing services like Uber and Lyft would make them worthless, and that buyers were assured medallion investments were as good as gold. New York City first issued taxi medallions in 1937, and the suit seeks to recover what the drivers say they lost.

1937: New York City first issued taxi medallions.
2014: Medallions allegedly reached as high as $1 million apiece.
2021: Drivers filed the class-action suit in the Eastern District of New York.
Nov. 6, 2026: Second Circuit judges heard oral arguments on reviving the case.

Legal Context

The case invokes the federal RICO statute, which allows treble damages, and it centers on the disruption ride-sharing apps brought to New York's taxi market. Whether the Second Circuit revives it will shape how courts treat claims that a regulator misled buyers about the value of a licensed asset.

Taxi medallion holders and drivers in New York City may be affected by the outcome, since a revived suit could change the financial exposure of the city and the value of remaining medallions. Residents who rely on yellow cab service should note that the case concerns past sales and does not directly change current fares or service.

The takeaway

Medallion owners who bought at peak prices should understand that the pending case concerns past sales and does not guarantee recovery. Anyone holding or considering a medallion investment should weigh the effect of ride-sharing competition on its long-term value.