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Jonathan Nnebe, Alexander Karmansky, Individually and On Behalf of All v. Matthew Daus

March 25, 2011


Appeal from a judgment of the United States District Court for the Southern District of New York (Sullivan, J.), granting the defendants' motion for summary judgment and denying the plaintiffs' motion for class certification as moot. We conclude that the district court properly granted summary judgment to defendants with respect to the plaintiffs' claim that the City of New York must provide a pre-deprivation hearing before it may suspend the licenses of taxi drivers who have been arrested. However, we conclude that the factual record is inadequate to permit summary judgment with respect to the plaintiffs' claim that the post-deprivation hearing currently afforded to drivers is insufficient to provide due process.

The opinion of the court was delivered by: Hall, Circuit Judge:

Argued: September 21, 2010; Amended: March 30, 2011; Amended April 7, 2011; Amended: May 31, 2011

Docket No. 09-4305-cv

BEFORE: McLAUGHLIN and HALL, Circuit Judges, and RESTANI, Judge.*fn1

We also disagree with the district court's determination that the New York Taxi Workers Alliance lacks standing.


The named plaintiffs in this putative class action, brought pursuant to 42 U.S.C. § 1983, are the New York Taxi Workers Alliance ("NYTWA" or "Alliance") and four New York City taxi drivers whose licenses to drive yellow cabs were automatically suspended when they were arrested on criminal charges. It is the policy of the City of New York ("City") and its Taxi and Limousine Commission ("TLC" or "Commission"), defendants-appellees here, immediately to suspend a taxi driver's license without a hearing if the charged offense is a felony or one of an enumerated list of misdemeanors, and to do so regardless of whether the offense occurred while the driver was on duty, in his cab, or somewhere else entirely. Once suspended, a driver is entitled to a post-deprivation hearing, but in practice taxi licenses are never reinstated unless and until the driver secures favorable termination of the charges against him.

The plaintiffs argue that drivers are entitled to hearings before their licenses are suspended, and, in the alternative, that the post-suspension hearings currently afforded are inadequate to comport with due process. We agree with the district court that no pre-suspension hearing is required, and affirm its judgment to the extent that it granted summary judgment to the defendants on that claim. However, we are unable to determine whether the post-deprivation hearing affords due process because we find that the record on summary judgment does not support the district court's finding (and the City's claim) that the hearing enables a driver to make a showing that "the charges, even if true, 'do not demonstrate that the licensee's continued licensure would pose a threat to public health or safety.'" Nnebe v. Daus, 665 F.Supp.2d 311, 318 (S.D.N.Y. 2009) (decision below) (quoting Decl. of Joseph M. Eckstein at ¶ 6). Accordingly, we vacate and remand for further proceedings, including more detailed fact- finding regarding the scope and process of the post-suspension hearings. We also reverse the district court's ruling that the NYTWA lacks standing.


I. The TLC's summary suspension process

The TLC is established by the New York City Charter to regulate taxicabs in New York City. Among the powers granted to the TLC by the Charter is the power to issue, revoke and suspend drivers' taxi licenses. Charter Ch. 65, § 2303(b)(5). The New York City Administrative Code authorizes the TLC to promulgate rules and regulations to enforce this power. See N.Y.C. Admin. Code § 19-503. The Code provides that the TLC may for good cause shown relating to a direct and substantial threat to the public health or safety and prior to giving notice and an opportunity for a hearing, suspend a taxicab or for-hire vehicle license issued pursuant to this chapter and, after notice and an opportunity for a hearing, suspend or revoke such license.N.Y.C. Admin. Code § 19-512.1(a).

TLC Rule 8-16 implements one such summary suspension procedure. The version of the rule in effect until December 2006, under which the named plaintiffs in this case were charged, provided that "[i]f the Chairperson finds that emergency action is required to insure public health or safety, he/she may order the summary suspension of a license or licensee, pending revocation proceedings." In December 2006 -- after the hearings that gave rise to the named plaintiffs' claims -- section (c) was added to TLC Rule 8-16, stating that "the Chairperson may summarily suspend a license . . . based upon an arrest on criminal charges that the Chairperson determines is relevant to the licensee's qualifications for continued licensure," and providing that, at the post- deprivation hearing, "the issue shall be whether the charges underlying the licensee's arrest, if true, demonstrate that the licensee's continued licensure during the pendency of the criminal charges would pose a threat to the health or safety of the public." TLC Rule 8-16(c).

Once a driver's taxi license is summarily suspended under Rule 8-16, the TLC must notify the driver of the suspension within five calendar days, and the licensee may request a hearing before the TLC or an administrative law judge ("ALJ") within 10 days of receipt of the notice of suspension. See N.Y.C. Admin. Code § 19-512.1(a); TLC Rule 8-16(c). The TLC must provide this post-deprivation hearing to the driver within 10 calendar days of receiving the request. See TLC Rule 8-16(c). The ALJ must issue a written recommendation that the Chairperson may accept, modify or reject, and the Chairperson's decision represents "the final determination with respect to the summary suspension." TLC Rule 8-16(e). The defendants acknowledge that the policy expressly stated in TLC Rule 8-16(c) essentially describes the process that was followed under the old version of the rule, and the plaintiffs raise the same objections to both the old and the current rule.

The New York State Division of Criminal Justice Services ("DCJS") keeps on file the fingerprints of all licensed taxi drivers. If a driver is arrested, the DCJS notifies the TLC of the driver's identifying information, the date and location of the arrest, the arrest charges, and the section of the penal code under which the licensee was arrested. The DCJS does not, however, provide the TLC with any of the factual bases or allegations underlying the arrest. The TLC maintains a list of offenses, including all felonies and numerous misdemeanors, for which it will summarily suspend a driver upon arrest. The current list of offenses (as amended on November 2, 2006), as well as the pre-November 2006 list, are appended to this opinion for the convenience of the reader. See Appendix at 1 (Current List), 2-3 (Pre-November 2006 List). The pre-November 2006 list included some misdemeanors, such as third-degree assault, which may have involved violence, but many others, such as false advertising, giving unlawful gratuities, and unlawful assembly, which did not. The TLC states that offenses are added to the list if, presuming the truth of the charges, "continued licensure during the pendency of the criminal charges would pose a risk to public health or safety." When the TLC receives an arrest notification from DCJS, a TLC lawyer decides whether to suspend the driver based solely on whether the offense is included on the aforementioned list. The lawyer does not consider the underlying factual allegations, nor the licensee's driving record or prior criminal record. At the post-deprivation hearing, the ALJ considers the same materials considered by the TLC lawyer. According to an affidavit supplied by Joseph M. Eckstein, the Deputy Commissioner for Adjudications for the TLC, "the likelihood of a licensee's innocence or guilt as to the subject charges is not at issue," and "[t]he hearing provides a licensee with the opportunity to, inter alia, deny that s/he was arrested; deny that s/he was charged with the particular offense(s) in the notice of summary suspension; or to argue or establish that the pending charge(s), even if true, does not demonstrate that the licensee's continued licensure would pose a threat to public health or safety." Eckstein Decl. ¶ 6. It is undisputed that the ALJs nearly always recommend continuing the suspensions during the pendency of criminal proceedings and that the Chairperson usually accepts the ALJ's recommendation. In deposition testimony, TLC Chairman Matthew Daus was unable to recall how or when the informal, pre-2006 policy of summarily suspending drivers upon arrest was first adopted. The policy did appear in a manual given to ALJs, but the deputy chief ALJ, at his deposition, was unable to state when this section of the manual had been written, or by whom. TLC lawyer Marc Hardekopf, who represented the TLC at the suspension hearings in these cases, testified at his deposition that the percentage of suspended drivers who are ultimately convicted is "very low," and in no event more than one quarter.

The plaintiffs also adduced evidence that, as explained infra, they argue show that ALJs lack adequate decisional independence. On three occasions within a short span of time in February and March 2006, ALJ Eric Gottlieb recommended that three drivers' licenses be reinstated because, in each case, he found an "overwhelming likelihood" that the drivers' cases would end in a "non-criminal disposition." ALJ Gottlieb's action prompted the following response in an e-mail from the deputy chief ALJ a few weeks later:Eric,[Name redacted] was arrested and issued a DAT*fn2 for leaving the scene of an accident that involved his taxi. Your [r]ecommendation that the suspension be lifted because he was issued a "DAT" and/or because you speculate that he will receive a "non- criminal disposition" was improper. Re-read the ALJ manual regarding summary suspension proceedings and the standard we are required to use. In the future if you believe a summary suspension should be lifted please call me and discuss the matter with me before mailing it out. Please call me at [number redacted]. I want to discuss this matter with you.

Thanks Tom (emphasis in original) ALJ Gottlieb wrote the following e-mail in response: Tom, Just wanted to apologize once again for the mishap regarding the Summary Suspension cases. I value greatly the trust you have shown me in the past and I want to assure you that this will not happen again. I accept full responsibility for not handling this properly. If there is anything I can do to mitigate the fallout for you, please let me know.

Thanks, Eric ALJ Gottlieb testified at his deposition that he was worried that his improper recommendations would lead to his duties being modified or his transfer from Manhattan back to the TLC's Long Island City office, which he called ...

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