Under the rules rejected by U.S. District Judge Paul A. Crotty, companies that own fuel-saving cabs would have been allowed to charge drivers slightly higher rental rates; companies with gas-hungry vehicles would see their rates decrease over a two-year period.

In October, Crotty rejected for the same reason other rules the city had devised to try to force the fleet of yellow cabs to go green by 2012. Those rules would have required new cabs to be fuel efficient.

The judge praised the city's intent but said efforts to encourage the purchase of hybrid vehicles must be careful not to interfere with Congress' exclusive jurisdiction over laws related to mileage or emission standards.

"The court's purpose is not to interfere with government officials taking actions in the public interest," he wrote. "Increasing the number of hybrid taxicabs is an appropriate and important governmental priority."

The judge noted there were no legal challenges to decisions by the city to issue new taxi medallions only to hybrid vehicles or to allow hybrid cabs to stay in service longer.

Michael A. Cardozo, head of the city's law department, said the city was disappointed.

"We do not believe that Congress intended to prohibit local governments from implementing incentive programs ... that encourage the purchase of environmentally friendly taxis. We are exploring our legal options," he said in a statement.