Immigrant business coalition takes Mamdani to court over city-run grocery stores

A first-of-its-kind legal challenge seeking to block New York City Democrat Mayor Zohran Mamdani’s city-run grocery-store initiative has been filed by a coalition representing hundreds of immigrant-owned bodegas and grocers.

The Multicultural Business Coalition filed two separate lawsuits Monday in New York State Supreme Court seeking to derail Mamdani’s plan for five city-run grocery stores, which the group argues would place small, minority-owned markets at an unfair competitive disadvantage.

‘Many minority members of the MBC cannot compete with the municipal grocery stores, and therefore, will be put out of business.’

The legal action comes after weeks of attempts to resolve the dispute outside court and follows the city’s announcement that the city-run grocery stores would sell items — including fresh produce, meat, seafood, and “20 other essential items like cheese, milk, and bread” — at 30% below market rates.

The first lawsuit, a class-action civil rights complaint, alleges the program violates New York Civil Rights Laws and the Equal Protection Clause of the New York State Constitution. The MBC contends the city has “unduly discriminated against” minority-owned grocers by subsidizing grocery stores that can offer discounts private businesses cannot match, thereby denying them equal protection.

The second lawsuit seeks to block the stores from operating unless the city conducts what the coalition says are necessary studies and analyses of their economic impact. The MBC claims there is “no existing evidence” that officials undertook “any studies and/or any serious analysis” of how the competition would affect existing businesses.

RELATED: Immigrant business owners revolt against Mamdani’s ‘Soviet’-style grocery plan

In the filing, the coalition asserts that “many minority members of the MBC cannot compete with the municipal grocery stores, and therefore, will be put out of business.”

“The respondents’ running of five municipal grocery stores is arbitrary and capricious, in bad faith, and exceeds the scope of municipal authority,” the MBC added.

Mark Jaffe, the group’s general counsel and president of the Greater New York Chamber of Commerce, argued the city is setting small grocers up to fail by forcing them to compete against the city-run stores.

“You cannot expect hardworking small business owners to compete with a supermarket that isn’t going to pay rent, won’t have to pay an electric bill, and won’t have to buy their products at full price,” Jaffe told CNN. “They cannot possibly compete because no one will be subsidizing them.”

When asked about the lawsuits during an unrelated press conference in Queens on Monday, Mamdani said he was “confident both in the legality of this, that it will stand up in court, and in the importance of delivering it.”

“We are talking about a reflection of a cost-of-living crisis that has seen grocery prices increase by about 30% over the last few years, and we’re also talking about delivering five city-run grocery stores in a city of 8.5 million people that has more than a thousand grocery stores,” the mayor responded.

Mamdani also pointed to Essex Street Market and Moore Street Market, two existing public markets directly administered by the New York City Economic Development Corporation, arguing that the model has not had a negative impact on surrounding businesses. They have been in operation since the 1940s, along with La Marqueta starting earlier, and were established under Mayor Fiorello La Guardia.

RELATED: Socialist Mamdani says city-run grocery stores will undercut supermarkets by 30%

Adam Gray/Bloomberg/Getty Images

Founded earlier this year, the MBC represents roughly 65 business organizations, with strong representation in the New York-New Jersey region, spanning Hispanic, Asian, Caribbean, African, Middle Eastern, Jewish, and South Asian communities.

To address concerns that the initiative could undercut privately owned stores in neighboring areas, Mamdani said the city-run grocery stores would not sell cigarettes, alcohol, lottery tickets, or hot food — items that typically generate some of the highest profit margins for bodegas and convenience stores.

“My grandfather opened up one of the first bodegas in the late 1960s when East Harlem was burning and the A&Ps and Waldbaums were leaving,” said MBC Chairman Frank Garcia.

“He established the first Latino Grocery Association to protect the rights of immigrant store owners. I am proud to be following up in his tradition because what Mayor Mamdani is doing is disgracing his memory.”

As currently filed, the MBC itself is the only named plaintiff in the lawsuits, though the coalition has said it plans to add individual grocery store owners as plaintiffs later this week.

The first of the five publicly owned grocery stores is anticipated to open in the Hunts Point neighborhood of the Bronx by the end of 2027, with the remaining four storefronts slated to be operational by the end of Mamdani’s four-year term, including one in East Harlem.

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