The opinion of the court was delivered by: MORRIS E. LASKER
Barbara Perez sues to recover personal property seized by Drug Enforcement Administration ("DEA") agents from her apartment. The complaint states three causes of action: conversion, replevin and negligence under the Federal Tort Claims Act ("FTCA").
By an Order and Opinion dated December 20, 1993, Perez's claims for conversion and replevin were dismissed because Perez failed to file the required claim and cost bond, pursuant to 21 C.F.R. § 1316.75 (1993), to preserve her right to a judicial determination on the merits of the seizure and forfeiture. 838 F. Supp. 860 (S.D.N.Y. 1993). However, her allegation that the DEA failed to provide her the statutorily-required notice was held to state a claim under the FTCA. 28 U.S.C. § 2671 et seq. (1993). That determination was based on a ruling that the FTCA exemption for torts "arising out of the detention of goods," 28 U.S.C. § 2680(c), did not bar a claim of failure to provide notice. Because the key fact question on the FTCA claim -- whether Perez was given due notice -- remained in dispute, the Government's summary judgment motion was denied.
The Government moves for reargument asserting that (1) DEA's failure to provide notice is not actionable under the FTCA because there is no private party analog; (2) a claim for failure to provide notice is barred by 28 U.S.C. § 2680(c); and (3) Perez has not filed an administrative claim with the DEA raising the defective notice issue and must do so before commencing an FTCA action.
The FTCA provides that the "United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances." 28 U.S.C. § 2674. The Government argues that Perez's claim is not actionable because "there is no private party analog for negligently forfeiting items seized" (Gov't Mem. at 6).
Perez responds that the failure to provide notice made the DEA's forfeiture of her property unauthorized and constituted the tort of conversion under state law.
The Court of Appeals has held that "the FTCA imposes liability upon the government to the same extent and in the same manner, as a private individual under 'like,' not identical circumstances." Akutowicz v. United States, 859 F.2d 1122, 1125 (2d Cir. 1988). The Court noted that "acts or omissions alleged to be unconstitutional -- for example, violations of procedural due process -- would support liability under the Act only if they constituted independent torts under state law." Birnbaum v. United States, 588 F.2d 319, 329 (2d Cir. 1978). "It would be an unusual situation when such a concatenation of wrongs would occur." Id., citing Myers & Myers, Inc. v. United States Postal Service, 527 F.2d 1252 (2d Cir. 1975) (failure to give prior hearing before cancelling a postal contract, as required by either the Constitution or the Postal Service regulations, may constitute negligence per se for which recovery may be had under the FTCA). This case presents a situation where such a concatenation exists.
Under New York law, a lienholder who fails to give notice to a debtor before selling the debtor's property is liable for conversion. Ingram v. Machel and Jr. Auto Repair, 148 A.D.2d 324, 538 N.Y.S.2d 539 (1st Dept. 1989) (failure to comply with Lien Law § 201 requirement of 10-day notice constitutes conversion). Moreover, under New York law, an official "who levies on and sells property without complying with the requirements of the statute as to posting of notice in advance of sale . . . may be held liable for conversion." White v. Page, 275 A.D. 871, 88 N.Y.S.2d 373 (1949). The rule of these decisions is that failure to give statutory notice before disposing of seized property is a recognized tort under New York law. See also 23 N.Y. Jur.2d Conversion §§ 28 and 47.
Perez's allegation that the DEA failed to give her statutory notice before disposing of her property presents a "like," if not nearly identical, circumstance for which a private individual may be sued under New York law. Accordingly, Perez's claim is actionable under the FTCA.
The cases cited by the Government are not inconsistent with this conclusion. They involve particular instances of negligence that can have no private party analog. See Akutowicz v. United States, 859 F.2d 1122 (2d Cir. 1988) (wrongful deprivation of citizenship); Chen v. United States, 854 F.2d 622 (2d Cir. 1988) (failure to follow federal procurement regulations); Jayvee Brand, Inc. v. United States, 232 U.S. App. D.C. 150, 721 F.2d 385 (D.C. Cir. 1983) (failure to follow statutory procedures in promulgating regulations on children's sleepwear).
The Government also seeks to reargue the earlier finding that the exemption in § 2680(c)
does not cover ...