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C.A.U.T.I.O.N., LTD. v. CITY OF NEW YORK

September 14, 1995

C.A.U.T.I.O.N., LTD., etc., et al., Plaintiffs, against THE CITY OF NEW YORK, et al., Defendants.


The opinion of the court was delivered by: LEWIS A. KAPLAN

 LEWIS A. KAPLAN, District Judge.

 Parking summonses issued by officials of the City of New York (the "City") serve the primary purpose of enforcing parking regulations, thereby alleviating congestion in the traffic-clogged streets of the City. They also raise revenue. Plaintiffs, a group of small businesses that park their commercial vehicles on City streets, claim that the City and the other defendants have violated 42 U.S.C. § 1983 by focusing on the second goal at the expense of the fair administration of the first and thereby deprived them of their right to due process of law. Defendants now move under FED. R. Civ. P. 8 and 12(b)(6) to dismiss the Second Amended Complaint. Plaintiffs oppose the motion and cross-move, in the alternative, for leave to amend.

 Facts

 Parties and Procedural

 History

 This action was commenced by C.A.U.T.I.O.N., Ltd., also known as Contractors Against Unfair Taxation Instituted on New Yorkers ("CAUTION"), a non-profit corporation comprised of small to medium sized service businesses which use commercial vehicles in the City and allegedly have been subjected to undeserved summonses. The First Amended Complaint was dismissed with leave to replead certain of the allegations. Contractors United Against Unfair Taxation on New Yorkers v. City of New York, 1994 U.S. Dist. LEXIS 11799, 1994 WL 455553 (S.D.N.Y. Aug. 19, 1994)(Wood, J.). Plaintiffs on the Second Amended Complaint, the subject of this motion, are CAUTION and ten of its individual members. (Second Amended Complaint "Cpt" PP 6-16) Defendants are the City, the New York City Department of Transportation ("DOT"), the New York City Parking Violations Bureau ("PVB"), the New York City Department of Finance, the New York City Police Department, and seven present and former officials of these agencies. (Id. PP 17, 22) Plaintiffs allege that all of these agencies play important roles in the parking violations system. (Id. PP 18-21) The four former officials -- Lucius Riccio, Norman Steisel, Joseph Spencer and Philip Michael -- are sued in their individual capacities. The three present officials -- Transportation Commissioner Sanders, Finance Commissioner and PVB Director Shaw, and Police Commissioner Bratton -- appear to be sued in their official capacities.

 The New York City Parking Violations System

 Some years ago, the City responded to the overwhelming volume of alleged parking violations requiring disposition in the courts by creating an administrative agency, the PVB, to deal with parking summonses. See Rosenthal v. Hartnett, 36 N.Y.2d 269, 272-73, 367 N.Y.S.2d 247, 249, 326 N.E.2d 811 (1975); Voccola v. Shilling, 88 Misc. 2d 103, 106, 388 N.Y.S.2d 71, 74 (Sup. Ct. Kings Co. 1976), aff'd, 57 A.D.2d 931, 394 N.Y.S.2d 577 (2d Dept. 1977). The PVB is headed by a director who is appointed by the Commissioner of Finance. 4 N.Y.C. ADMIN. C. (hereinafter NYC AD.C.) §§ 19-200 - 19-201 (1989).

 One accused of a parking violation is served with a notice of violation, commonly called a summons or parking ticket. Id. § 19-204. The recipient may plead guilty and pay the prescribed fine, or plead not guilty, by mail. If a plea of not guilty is entered, the PVB notifies the defendant of a hearing date. Id. § 19-206.

 The director of the PVB appoints a number of hearing examiners, whose duties include presiding at hearings for the adjudication of charges of parking violations. Id. § 19-202. The relevant New York City enactment provides that the notice of violation is prima facie evidence of the facts stated therein *fn1" and that the hearing officers are not bound by the rules of evidence. NYC AD.C. §§ 19-204a., 19-206b.3. Subpoenas are available in the discretion of the hearing officer and, upon request of the respondent, upon "a showing of good cause and need therefor . . . " N.Y. VEH. & TRAFFIC L. § 240, subd. 2d. (McKinney 1986); accord, NYC AD.C. § 19-206a.4.; 11 RULES OF THE CITY OF NEW YORK (hereinafter NYC RULES) § 3-08(h)(1995). No charge may be established except upon proof by "substantial" credible evidence. N.Y. VEH. & TRAFFIC L. §§ 235, 240, subd. 2b.; NYC AD.C. § 19-206b.2.; NYC RULES § 3-08(e); Silverstein v. Appeals Board of the Parking Violations Bureau, 100 A.D.2d 778, 474 N.Y.S.2d 60, 61 (1st Dept.), leave to appeal denied, 62 N.Y.2d 606, 482 N.Y.S.2d 1023, 472 N.E.2d 327 (1984).

 A party convicted of a parking violation may appeal to an appeals bureau within the PVB, which consists of three or more hearing examiners. The service of a notice of appeal does not stay the enforcement of the judgment appealed from unless the appellant bonds or otherwise secures payment at or prior to the filing notice. NYC AD.C. § 19-208. Moreover, the PVB's rules provide that no appeal shall be permitted unless the fines and penalties assessed at the hearing have been paid or the respondent shall have posted security in the full amount of the final determination appealed from. NYC RULES § 3-12(b)(3). Orders of the appeal board may be reviewed in the New York State Supreme Court in proceedings under Article 78 of the Civil Practice Law and Rules. *fn2" NYC AD.C. § 19-209.

 The New York City traffic regulations provide for the towing and impoundment of illegally parked vehicles in addition to the issuance of parking tickets. NYC RULES § 4-08(9). Once the parked vehicle is hooked to the tow truck, but before it is moved, the rules provide that the owner may obtain its release upon executing an agreement to pay a $ 75 vehicle release penalty within thirty days, this is addition to fines and penalties for the underlying parking violation. Id. § 4-08(9)(ix)-(x). After the vehicle is removed to the pound, the owner must pay a removal fee of $ 150 plus a storage fee of $ 5 per day prior to the release of the vehicle, id. § 4-08(9)(vi)-(vii), again presumably in addition to penalties for the parking violation.

 The Second Amended Complaint

 Plaintiffs claim, broadly speaking, that their vehicles are ticketed and towed by DOT and Police Department personnel irrespective of any lawful basis for such action, that the system of adjudicating parking violations run by the PVB is stacked against them, and that they have no meaningful avenue of appeal. The complaint contains five counts:

 
. Count I asserts that defendants' policies and practices result in the routine issuance of summonses against plaintiffs' vehicles despite the lack of any parking infraction. For example, the complaint alleges that the applicable rules and regulations permit parking of commercial vehicles without time limit in spaces marked "no standing except trucks loading and unloading," but that the defendants' custom and practice is to ticket vehicles parked in such areas without inquiry as to whether the vehicles are properly so parked. (Id. P 36a)
 
. Count II alleges that defendants' policies and practices result in frequent seizure and towing of plaintiffs' vehicles despite the lack of any basis for such action. For example, City parking regulations exempt plaintiffs' vehicles from parking rules while responding to emergencies, but the City is alleged routinely to tow commercial vehicles thus engaged. (Id. P 40a)
 
. Count III turns its attention to the PVB's adjudicatory system. PVB hearing examiners allegedly (a) sustain summonses simply on the basis of their issuance, (b) ignore "overwhelming evidence . . . disproving" summonses, (c) refuse requests to subpoena the officers or agents who served the summonses in question, and (d) apply an arbitrary three hour time limit in defining the term "expeditious" as used in a rule permitting parking in designated areas for "expeditious service calls, pickups and deliveries." (Id. P 44-50)
 
. Count IV asserts that the appeal system in the PVB deprives plaintiffs of due process of law. The applicable rules provide thirty days within which to appeal from an adverse determination. The PVB, however, allegedly refuses to accept appeals absent proof of payment of the fine being contested. As canceled checks frequently are unavailable within thirty days of the determination, plaintiffs allege that they often are denied any opportunity to appeal. Moreover, they complain that even when they successfully appeal, the PVB refuses to refund the fine paid, applying it instead to outstanding summonses irrespective of whether those summonses have been sustained, dismissed or are merely pending. (Id. P 52-57)
 
. Finally, Count V complains that defendants, in violation of municipal law, fail to keep complete and accurate records of all charges and dispositions, which results, inter alia, in the seizure of vehicles for allegedly outstanding summonses that have been paid, the improper entry of default judgments, and other penalties. (Id. P 59)

 Plaintiffs claim that all of the foregoing is the product of defendants' explicit pressure on enforcement personnel and hearing examiners to generate revenue by misusing their power and of their alleged indifference in failing properly to train those charged with the day to day operation of the system.

 The complaint does not point to a single particular instance of alleged misconduct by any parking official. Rather, it is framed in general terms, and the only particular harm alleged is that nine out of the ten individual members of CAUTION named as plaintiffs allege that 75 percent ...


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