The city will pay more than $6 million to settle a lawsuit brought by about 500 cab drivers who claim they were punished unfairly amid allegations they avoided black customers and refused fares.

Former and current cab drivers are represented in the class action lawsuit brought in U.S. District Court in Brooklyn yesterday. The settlement, which has yet to be filed with the court, comes six years after the city’s Taxi and Limousine Commission expanded existing sting operations to identify drivers who were avoiding minority customers.

The legal complaint does not dispute that it is often difficult for black men to get a cab. It contends that the TLC courts stripped cab drivers of their constitutional rights.

“I would say there are some racial biases among cab drivers like there are among all people,” the attorney representing the drivers, Daniel Ackman, told The New York Sun. “But they never proved anybody had a racial bias. They never attempted to prove it.”

The cab drivers had their taxis impounded and their licenses pulled after they allegedly ignored black investigators posing as customers or refused to drive to specific destinations, the complaint accompanying the lawsuit states.

The power exercised by investigators who seized cabs and took licenses exceeded the penalties permitted by New York City law, the complaint states. And the courts of the Taxi and Limousine Commission were stacked against cab drivers, according to the complaint. The TLC legal department held sway over TLC-paid judges who ruled against cab drivers protesting their suspension, the complaint states.

Mr. Ackman estimates that only 15% of his clients were prosecuted in TLC courts after allegedly passing by a black investigator hailing a cab for a white investigator doing the same. The rest were prosecuted for other fare refusals.

The ongoing Taxi and Limousine Commission sting operation, called Operation Refusal, was expanded following a complaint by actor Danny Glover. Mr. Glover, who is black, filed a complaint in 1999 with the TLC, claiming he had difficulty in finding a ride in New York City. Mayor Giuliani, who is named as a defendant in the suit, lauded the operation, which promised at the time to cut down on the reputed racial biases of drivers.

A spokesman for the TLC, Allan Fromberg, declined to comment on the lawsuit except to convey a brief statement by current TLC Commissioner, Matthew Daus.

“The settlement addresses an enforcement policy that was in place for a limited time nearly seven years ago, and has no effect upon the TLC’s successful refusal enforcement efforts which currently have 97% driver compliance,” the statement said.

Neither Mr. Fromberg nor a spokeswoman for the New York City Law Department, Kate Ahlers, would discuss the terms or amount of the settlement.

Mr. Ackman said the agreement calls for about 100 drivers who had their licenses revoked to receive payments of $26,000. Those former drivers and another 400 would also receive $121.50 for each day their license was suspended before it was either revoked or returned. Mr. Ackman said the average suspension was 62 days.

The 26-year career of the lead plaintiff, John Padberg, ended quickly, over the course of three blocks in Queens. After noticing a woman hailing him from a full three blocks away, he passed a black man he hadn’t noticed but who was signaling for a fare, Mr. Padberg told The New York Sun. After the woman identified herself as an investigator, he was forced to return home without his cab or license. He is now a limousine driver.