The opinion of the court was delivered by: WERKER
Plaintiffs Brooks and Jones are residents of Westchester County whose property was stored by defendant Flagg Brothers, Inc. following their evictions by the Mount Vernon Marshal in 1973.
On their own behalf and that of a proposed class of "persons whose property is stored in a warehouse located in the State of New York and whose property has been encumbered by a lien pursuant to New York Uniform Commercial Code § 209 and subject to sale pursuant to New York Uniform Commercial Code § 210 because of warehouse fees allegedly due,"
they challenge the constitutionality of those two statutes pursuant to 42 U.S.C. § 1983.
They allege deprivation of due process guaranteed by the Fourteenth Amendment of the United States Constitution, and seek declaratory and injunctive relief as well as money damages. Their proposed class of defendants includes "all . . . warehousemen doing business in the State of New York and who impose liens and subject goods to sale pursuant to New York Uniform Commercial Code §§ 209, 210 without affording the owner of the goods a prior opportunity to be heard."
Section 7-209 grants a warehouseman a lien on goods stored, and/or transported, for fees allegedly owed by the customer.
Section 7-210 gives a warehouseman the authority to enforce such a lien by public or private sale upon proper notification to the customer and adherence to commercially reasonable sale procedures.
Plaintiffs have moved for class action certification of both a plaintiff and a defendant class, and for summary judgment on the question of the statutes' constitutionality. Defendants have cross-moved to dismiss for failure to state a cause of action and for lack of subject matter jurisdiction on the ground that the challenged conduct does not constitute state action within the meaning of the Fourteenth Amendment, and was not performed "under color of" state law within the meaning of § 1983.
Upon careful consideration of the facts in this case and the following analysis of relevant Second Circuit and Supreme Court decisions, the court finds that defendants are indeed correct. Plaintiffs' action is consequently dismissed for lack of jurisdiction.
Plaintiffs have advanced four arguments in support of their assertion that state action is present in the challenged activity. Their first argument is that the Second Circuit's decision in Hernandez v. European Auto Collision, Inc., 487 F.2d 378 (2d Cir. 1973) compels a finding of state action in this case. State action, however, was never discussed in that opinion. In Hernandez plaintiff challenged the garageman's lien provisions of the New York Lien Law which allow a garageman to detain an automobile until alleged storage and repair charges are paid, and to foreclose his lien by selling the auto upon proper notification to the bailor.
The district court judge dismissed the complaint, noting:
"Even assuming that the defendants are acting under color of state law, the court cannot find that the plaintiffs' constitutional right to due process of law has been deprived by the operation of the challenged provisions of the lien law. Consequently, . . ., the court need not go further and formally pass upon the second requirement -- the presence of state action."
346 F. Supp. 313, 317 (E.D.N.Y. 1972).
On appeal the Second Circuit upheld the dismissal as to the detention provisions of the New York Lien Law because it found that having voluntarily delivered his car to the defendant garageman, and having never requested its return or tendered reasonable storage charges, the plaintiff had no standing to challenge the lien. 487 F.2d at 380. As to the sale provisions of the statute, however, the court noted that if, upon remand, the district judge were to find plaintiff's version of the facts as alleged,
"then we would conclude that plaintiff has, under the doctrines enunciated in Fuentes v. Shevin, 407 U.S. 67 [92 S. Ct. 1983, 32 L. Ed. 2d 556] (1972), Bell v. Burson, 402 U.S. 535 [91 S. Ct. 1586, 29 L. Ed. 2d 90] (1971), and Sniadach v. Family Finance Corp., 395 U.S. 337, [89 S. Ct. 1820, 23 L. Ed. 2d 349], a tenable contention that Section 204 of the New York Lien Law as applied here was repugnant to the due process clause of the Fourteenth Amendment . . .."
Id. at 382-83. Neither the court's opinion nor the concurring opinion
in Hernandez mentioned or discussed the issue of state action.
Plaintiffs argue that a "finding" of state action is implicit in both Hernandez opinions. However, because District Judge Costantino had merely assumed the presence of state action in order to consider and dismiss the Hernandez constitutional claim on its merits, the state action issue was not properly before the Court of Appeals; the sole issue on appeal was whether, assuming state action, plaintiff had stated a claim. Furthermore, even if a finding of state action were implicit in the Second Circuit's decision, this court would not be bound by such a sub silentio ruling. United States v. L. A. Tucker Truck Lines, 344 U.S. 33, 38, 73 S. Ct. 67, 97 L. Ed. 54 (1952). This court therefore concludes that the Second Circuit's decision in Hernandez is not dispositive of the state action issue in this case.
Plaintiffs, in their remaining argument, would have the court find state action because:
-- the warehouseman who enforces his own lien pursuant to § 7-210 is performing what has traditionally been a public function;
-- the state imposes extensive regulation on the warehousing industry, including regulation of the ...