NNEBE v. DAUS No. 09-4305-cv.
JONATHAN NNEBE, ALEXANDER KARMANSKY, individually and on behalf of all others similarly situated, KHARIRUL AMIN, EDUARDO AVENAUT, NEW YORK TAXI WORKERS ALLIANCE, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. MATTHEW DAUS, JOSEPH ECKSTEIN, ELIZABETH BONINA, THE NEW YORK CITY TAXI AND LIMOUSINE COMMISSION, THE CITY OF NEW YORK, CHARLES FRASER, Defendants-Appellees.
United States Court of Appeals, Second Circuit.
Decided: March 25, 2011. Docket
DAVID T. GOLDBERG, Donahue & Goldberg, LLP, New York, New York ( Daniel L. Ackman, Law Office of Daniel Ackman, Esq., New York, New York, on the brief), for Plaintiffs-Appellants.
SUSAN CHOI-HAUSMAN, Senior Counsel ( Pamela Seider Dolgow, Mary M. O'Sullivan, on the brief), for Michael A. Cardozo, Corporation Counsel, New York, New York, for Defendants-Appellees.
Kenneth Kimerling, New York, New York ( Andrew H. Schapiro, Hannah Y.S. Chanoine, counsel of record, Mayer Brown LLP, New York, New York), for Asian American Legal Defense and Education Fund, Amicus Curiae in support of Plaintiffs-Appellants.
BEFORE: McLAUGHLIN and HALL, Circuit Judges, and RESTANI, Judge.
HALL, Circuit Judge.
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,
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
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 is three pages long and is appended to this opinion for the convenience of the reader. See Appendix. Some of the included misdemeanors, such as third-degree assault, may involve violence, while many others, such as false advertising, giving unlawful gratuities, and unlawful assembly, do 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:
(emphasis in original) ALJ Gottlieb wrote the following e-mail in response:
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 "a very depressing environment." Tr. of Gottlieb Dep. at 89.
II. District court proceedings
Plaintiffs Jonathan Nnebe, Alexander Karmansky, Eduardo Avenaut, Khairul Amin, and the NYTWA brought this putative class action against the City of New York, the TLC, Daus, and other TLC officials in June 2006. Each of the four named plaintiffs is a taxi driver whose license was suspended in 2005 or 2006 after an arrest. Nnebe was charged with third-degree assault with intent to cause physical injury, Karmansky with first-degree criminal contempt and second-degree criminal trespass, Avenaut with third-degree assault with intent to cause physical injury, and Amin with second-degree menacing with a weapon and third-degree assault with intent to cause physical injury. Each of the four was summarily suspended upon arrest, and each received a hearing in front of ALJ Frank Fioramonti, except for Avenaut, who did not request a post-deprivation hearing. For the three who requested hearings, the outcome was in each case the same — Fioramonti recommended the continued suspension of the driver's license pending resolution of criminal proceedings, and Daus accepted the recommendation. All four drivers eventually secured the reinstatement of their licenses when the relevant district attorneys' offices dropped the charges. The total period of suspension for each driver proved to be approximately three to four months.
In their putative class-action complaint, the plaintiffs alleged that: (1) the absence of a pre-deprivation hearing denied them procedural due process; (2) assuming no pre-deprivation hearing is required, the post-deprivation hearing provided is insufficient to provide due process because its scope extends no further than determining whether the driver was arrested for the crime charged; (3) the ALJs lack sufficient independence to provide unbiased adjudication; and (4) the TLC violated the City Charter by summarily suspending the lead plaintiffs before the current version of TLC Rule 8-16 was adopted. The plaintiffs moved for class certification, and both sides moved for summary judgment.
In September 2009, the district court issued an opinion and order (1) dismissing the NYTWA as a plaintiff for lack of standing; (2) dismissing the TLC as a defendant because it is not a suable entity; (3) granting the defendants' motion for summary judgment; (4) denying the plaintiffs' motion for summary judgment; (5) declining to exercise supplemental jurisdiction over the plaintiffs' state law claims; and (6) denying as moot the plaintiffs' motion for class certification. See Nnebe v. Daus,
Turning to the merits of the plaintiffs' procedural due process claims, the district court applied the familiar three-factor test of Mathews v. Eldridge,
The court turned next to the plaintiffs' contention that "even if the lack of a pre-deprivation hearing were constitutional, the post-deprivation hearing is not because its scope extends no further than determining whether the plaintiff was actually arrested." Id. at 326. "Necessarily implicit in this argument," the district court wrote,
The district court relied upon three out-of-circuit cases to make this point: Cooke v. Soc. Sec. Admin., 125 Fed. Appx. 274 (Fed. Cir. 2004) (unpublished disposition); James A. Merritt & Sons v. Marsh,
The district court also addressed this Court's holding in Krimstock v. Kelly,
Separately, the district court rejected the plaintiffs' contention that their procedural due process rights were violated because the ALJs were biased or insufficiently independent, noting that the plaintiffs could have brought an Article 78 proceeding in New York State Supreme Court, which would have provided an adequate post-deprivation remedy to the extent that bias was a potential cause of deprivation. Id. (citing Locurto v. Safir,
The plaintiffs timely appealed.
I. Standard of review
We review a district court's grant of summary judgment de novo, and we apply the same standard as the district court. See In re Bennett Funding Grp., Inc.,
II. Standing of the NYTWA
Before we turn to the merits, we review the district court's determination that NYTWA lacks standing to bring this suit. Standing is "the threshold question in every federal case, determining the power of the court to entertain the suit." Denney v. Deutsche Bank AG,
It is the law of this Circuit that an organization does not have standing to assert the rights of its members in a case brought under 42 U.S.C. § 1983, as we have "interpret[ed] the rights [§ 1983] secures to be personal to those purportedly injured." League of Women Voters of Nassau Cnty. v. Nassau Cnty. Bd. of Supervisors,
However, nothing prevents an organization from bringing a § 1983 suit on its own behalf so long as it can independently satisfy the requirements of Article III standing as enumerated in Lujan. See Irish Lesbian & Gay Org. v. Giuliani,
We disagree with the district court's analysis. The evidence supplied by NYTWA, while "scant," is not abstract. Nnebe, 665 F.Supp.2d at 321. The deposition testimony of NYTWA's executive director demonstrates that the Alliance has expended resources to assist its members who face summary suspension by providing initial counseling, explaining the suspension rules to drivers, and assisting the drivers in obtaining attorneys. NYTWA also makes an effort "to really explain the urgency [of the situation] to the criminal defense lawyer" so that the lawyer understands that the driver will be unable to work until the charges are resolved. Tr. of Desai Dep. at 11.
We have recognized that only a "perceptible impairment" of an organization's activities is necessary for there to be an "injury in fact." Ragin v. Harry Macklowe Real Estate Co.,
We recognize that some circuits have read Havens Realty differently than we read it in Ragin and have emphasized that "litigation expenses alone do not constitute damage sufficient to support standing." Fair Hous. Council of Suburban Phila. v. Montgomery Newspapers,
For example, in Fair Housing Council, the plaintiff organization claimed "that it suffered palpable injury when it was forced to divert resources to investigation." 141 F.3d at 78. But "[t]he `investigation' to which the [organization] refer[red] consisted of having its staff members review classified advertisements placed in [the defendant newspapers] on an ongoing basis for evidence of discrimination." Id. The Third Circuit found that the organization lacked standing to bring a Fair Housing Act against specific discriminatory ads because its alleged "investigation" "was not motivated by the advertisements in this suit or by a complaint about advertising" and because "[t]he record... does not establish that the [organization] altered its operations in any way as a result of the allegedly discriminatory advertisements or diverted any of its resources to a bona fide investigation." Id.
This case, by contrast, is not an instance of "manufactured" litigation. The Alliance, far from trolling for grounds to litigate, has allocated resources to assist drivers only when another party — the City — has initiated proceedings against one of its members. And if NYTWA's suit proves successful, it will have secured a permanent benefit for itself, avoiding the need for further lawsuits on the claims presented here — unlike the organization in Fair Housing Council, which presumably could have continued to seek out new, discriminatory ads and bring additional suits as the representative of its members. The Alliance brings this suit so that when it expends resources to assist drivers who face suspension, it can expend those resources on hearings that represent bona fide process. That is an interest specific to NYTWA, independent of the interest of individual drivers in their licenses. NYTWA has thus shown that it has suffered "an `injury in fact' that is `distinct and palpable'... [,] fairly traceable to the challenged action[,] and... likely redressable by a favorable decision." Denney, 443 F.3d at 263. Accordingly, NYTWA has standing to bring this action on its own behalf.
III. Procedural due process
The Fourteenth Amendment requires that "No state shall ... deprive any person of ... property, without due process of law." In a § 1983 suit brought to enforce procedural due process rights, a court must determine (1) whether a property interest is implicated, and, if it is, (2) what process is due before the plaintiff may be deprived of that interest. See Ciambriello v. Cnty. of Nassau,
a. Pre-suspension hearing
Due process does not, in all cases, require a hearing before the state interferes with a protected interest, so long as "some form of hearing is [provided] before an individual is finally deprived of [the] property interest." Brody v. Vill. of Port Chester,
Weighing the three factors of the Mathews test — the private interest, the risk of erroneous deprivation, and the government's interest, see supra n.4 — we agree with the district court that the City is not required to grant a driver a hearing before suspending his license because of an arrest. We understand that the private interest at stake here is enormous — most taxi drivers "rely on the job as their primary source of income" and "often earn the sole income for large families in a city where the cost of living significantly exceeds the national average." Amicus Br. at 4. The Supreme Court has repeatedly "recognized the severity of depriving someone of the means of his livelihood." Gilbert v. Homar,
With the first Mathews factor (private interest) strongly favoring the plaintiffs and the third factor (government interest) strongly favoring the City, we turn to the second factor — "the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards." 424 U.S. at 335. In the predeprivation context, this factor tips the scales decisively in the favor of the City, because the risk of erroneous deprivation is mitigated by the availability of a prompt post-deprivation hearing. Put another way, the "risk of an erroneous deprivation" at stake when deciding whether a pre-suspension or post-suspension hearing is required is only the risk that a driver will lose the income he could have earned between the date of arrest and the date of the post-suspension hearing. Although we understand that even that loss can be deeply problematic for a taxi driver, we conclude that in the immediate aftermath of an arrest, when the TLC has minimal information at its disposal and the very fact of an arrest is cause for concern, the government's interest in protecting the public is greater than the driver's interest in an immediate hearing. Accordingly, no pre-suspension hearing is required.
b. Post-suspension hearing
Normally, in a procedural due process case, it is the obligation of the court of appeals to set forth the minimum protections that must be afforded at a post-deprivation hearing, see, e.g., Krimstock, 306 F.3d at 69 ("Although we decline to dictate a specific form for the [post-deprivation] hearing, we hold that, at a minimum, the hearing must enable claimants to test the probable validity of continued deprivation of their vehicles, including the City's probable cause for the initial warrantless seizure."), and if the existing hearing is found deficient the district court then has considerable latitude to frame a decree with input from the parties and within the guidelines set by the court of appeals, see id. In this case, however, we cannot yet make these determinations because the evidence in the record is insufficient to establish that the post-suspension hearing the City describes to us is in fact the hearing that it offers. We therefore reserve judgment with respect to whether the summary suspension hearings satisfy the minimum requirements of due process. To the extent that the district court granted the defendants summary judgment on the plaintiffs' claim that the post-suspension hearing is inadequate, we conclude for the reasons that follow that its judgment must be vacated and the case remanded for the taking of further evidence.
The City, and, to a lesser extent, the plaintiffs, have tended to frame the question on appeal to be whether the TLC must afford drivers a "mini-trial" on the criminal charges against them, and at that hearing allow drivers an opportunity to show they are likely to secure favorable termination of their criminal cases. That is not what troubles us. We agree with the district court that the City cannot be required to hold a hearing that functions as a preview of the criminal case. More to the point, we think that district attorneys and other prosecuting authorities cannot be compelled to participate in a hearing that would test the merits of their case in a civil deprivation proceeding brought by a separate government entity and that is at most tangential to the criminal case. Decisions of other courts, including New York's highest court, strongly suggest that important state policy interests weigh against requiring such participation. See, e.g., People v. Chipp,
The City asserts that drivers may attempt to present evidence that
Appellees' Br. at 33 (emphasis added). That standard, if it actually is the standard, may be well within the range of adequate due process protections. The problem is that the italicized language appears to be an oft-quoted nullity that in no way resembles a part of the standard ALJs must apply. The record basis for calling it the standard is scant — testimony and affidavits from City witnesses repeatedly recite, in conclusory terms, that a driver may attempt to make the italicized showing. And while there is little evidence that an ALJ is allowed actually to apply this standard, there is considerable evidence supporting the appellants' view that they may not. A former general counsel for the TLC testified that he has never heard of an instance of an ALJ discontinuing a summary suspension or making a recommendation to that effect. Several attorneys whose practices include representing taxi drivers corroborate this, and one states that he now declines to represent drivers at summary suspension hearings because he feels it is improper to accept money for a proceeding where "the result is not in doubt." Spevack Aff. at ¶5. Conversely, the City has never pointed to any evidence showing how a driver could prevail at a suspension hearing after an arrest for one of the offenses listed on the summary suspension chart. We are not convinced, therefore, that the City binds itself to the standard it says is in place.
Lest there be any misunderstanding about what has been argued to us, we emphasize that it is not the City's position that arrest for one of the offenses listed on the TLC's summary suspension chart is per se evidence that "the licensee's continued licensure would pose a threat to public health or safety." We pressed the City about this question in particular at oral argument, asking whether the only showings a driver could attempt to make at the post-suspension hearing were: (1) that he was not charged with one of the crimes on the summary suspension list or (2) that he was not the person named in the arrest report. See Tr. of Oral Arg. at 14-15. The City replied that "they're entitled to bring in evidence ... from their criminal cases to show, well, even in these cases if the facts are true, I don't pose a risk to public safety." Id. In response to that answer, we asked how a driver could make such a showing if there is a presumption that a arrest for a given offense indicates a risk to public safety. Id. at 15. The City reiterated that a driver could bring in his criminal complaint and argue that "these are the facts that are alleged in the criminal complaint ... I wouldn't pose a risk to public safety." Id. The City's brief confirms its position that proof regarding the charged offense and proof regarding the regulatory standard are separate issues at the hearing.
The City, then, is not standing on an assumption that automatic continuance of a suspension — after a hearing at which only identity or offense can be disputed — is consistent with due process. The City's defense of the process it affords is premised on a contention that it provides drivers with a real opportunity to show that they do not pose a risk to public safety, arrests notwithstanding. The record on summary judgment, however, does not support the City's view of the facts. To the contrary, the record strongly suggests that, whether de facto or de jure, an ALJ is strictly prevented from considering anything other than the identity of the driver and the offense for which he was charged upon arrest.
Until we have a clearer picture of the scope of the summary suspension hearings, it is unnecessary and inappropriate for us to decide whether a hearing that does nothing more than confirm the driver's identity and the existence of a pending criminal proceeding against him would in fact be adequate process to allow the City to suspend a driver's taxi license until the criminal charges are resolved. We expressly refrain from deciding that question today. We find the question at least open to debate among jurists of reason, however, and we note that the district court, in stating that such a hearing was adequate, relied on decisions that were out-of-circuit and at least arguably in some tension with Krimstock. In two of the cases, Brown and Cooke, the individuals were employees of the public agencies that suspended them, and those employees were charged with misconduct directly related to their jobs of public trust. See Brown, 715 F.2d at 664 (Border Patrol agents suspended after indictment for conspiracy to defraud the United States and willfully violating the civil rights of suspected illegal aliens); Cooke, 125 Fed. Appx. at 275 (Claims Representative for Social Security Administration suspended after United States Attorney filed criminal complaint accusing him of violations of Computer Fraud and Abuse Act by accessing confidential citizen records at work). There are at least three crucial distinctions here. First, taxi drivers are not City employees — they are private earners who hold a public license. See Hecht v. Monaghan,
Balancing the Mathews factors in the post-deprivation context against the relative value of additional process, see 424 U.S. at 335, could lead to the conclusion that the plaintiffs' interests outweigh the burden on the City of providing additional procedural protections beyond mere confirmation of identity and charge. See, e.g., Krimstock, 306 F.3d at 67 ("Balancing the Mathews factors, we find that the Fourteenth Amendment guarantee that deprivations of property be accomplished only with due process of law requires that plaintiffs be afforded a prompt post-seizure, pre-judgment hearing before a neutral judicial or administrative officer to determine whether the City is likely to succeed on the merits of the forfeiture action...."). In determining that additional procedures would be too burdensome on the City, the district court appears to have assumed that the only alternative to a hearing on identity and charge would be a hearing at which the TLC would be required to prove that each driver engaged in the charged conduct. It is entirely possible that a meaningful hearing can be devised at minimal cost to the City that does not constitute a mini-trial on the criminal charges. Indeed, even a hearing at which the ALJ is permitted to examine the factual allegations underlying the arrest, without making a determination of likely guilt or innocence, would provide to drivers considerably more opportunity to be heard than the current system, as the ALJ might in some cases determine that the allegations, although arguably consistent with the criminal statute, do not provide any basis for finding the driver to be a threat to public safety. And since the latter sounds very much like the hearing that the City has told us it already offers, we think that the logical next step is for the district court to determine what really occurs at the hearing and what the City means by what it says.
On remand, it will be necessary for the district court to conduct additional fact-finding, in the manner it deems appropriate, to determine whether the post-suspension hearing the City affords does indeed provide an opportunity for a taxi driver to assert that, even if the criminal charges are true, continued licensure does not pose any safety concerns. The district court must then determine whether the hearing the City actually provides — whatever it may consist of — comports with due process.
IV. State-law claims
Because we are vacating the grant of summary judgment with respect to one of the plaintiffs' federal claims, we also vacate the district court's dismissal of their state-law claims. Once the district court has determined how it will treat the federal claim, it may then examine how it will treat the state claims. We express no view with respect to those claims or their disposition.
We affirm the judgment of the district court to the extent that it granted summary judgment in favor of the defendants with respect to the plaintiffs' claim that arrested drivers are entitled to pre-deprivation hearings. We otherwise vacate the judgment of the district court and remand for further proceedings not inconsistent with this opinion.
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