OPINION & ORDER
DENISE COTE, District Judge.
The New York State Professional Process Servers Association ("NYSPPSA"), Howard D. Clarke, and Stephen Boyko, Inc. (collectively, "Plaintiffs") bring this putative class action against the City of New York ("City") and thirty-eight individual defendants associated with the enforcement of City process server rules, including elected officials, City employees, and administrative law judges ("City Defendants") (collectively "Defendants") in their official and individual capacities. Plaintiffs contend that the City administratively enforces process server laws and regulations without authority. On this basis Plaintiffs bring claims under 42 U.S.C. 1983 ("Section 1983"), and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. 1961, et seq. Plaintiffs also contend that certain provisions of the New York City Administrative Code ("Administrative Code") are unconstitutionally vague, and that penalties the City imposes on process servers violate the Excessive Fines Clause of the Eighth Amendment to the United States Constitution. Finally, Plaintiffs bring a claim under New York state law for defamation, and challenge several of the Defendants' actions on state law grounds.
Defendants have moved to dismiss the Plaintiffs' amended complaint ("Amended Complaint"). For the following reasons, the Defendants' motion to dismiss is granted as to the federal claims. The Court declines to exercise supplemental jurisdiction over the state claims.
The following facts are taken from the Amended Complaint, or are undisputed facts on which the parties rely in addressing this motion to dismiss. NYSPPSA is an association representing process serving agencies and individual process servers licensed under New York City law. Howard D. Clarke is an individual process server licensed by the City. Stephen J. Boyko, Inc. is a process serving agency licensed by the City. The City Defendants are elected officials and New York City Department of Consumer Affairs ("DCA") officials, including administrative law judges.
Under the Administrative Code, process servers must obtain a license issued by the City. As a condition of obtaining a license, process servers must pass a licensing test. Process servers are regulated by the DCA. A description of the DCA's system for administratively enforcing process server laws and regulations follows.
In enforcing the City's process server laws and regulations, DCA staff attorneys serve as prosecutors, and administrative law judges adjudicate alleged violations. These violations include record keeping deficiencies, reporting deficiencies, and the failure to comply with other relevant provisions of the Administrative Code governing process servers. DCA attorneys employ their investigatory powers in determining whether to instigate an administrative prosecution. These powers include the issuing of subpoenas and the random auditing of process server records. According to Plaintiffs, the DCA sometimes directs process servers not to disclose the existence of the subpoenas to anyone.
Since at least 2005, and through the present, some violations of the City's process server rules have been administratively adjudicated in the DCA Tribunal ("Tribunal"). In the Tribunal, hearings are held before administrative law judges, who render findings of fact and recommendations for any penalties, which are subject to ultimate approval by the Commissioner of DCA. Penalties that are imposed can include the suspension of licenses and the imposition of fines. Plaintiffs state that the DCA has imposed fines in excess of statutory maximums. Plaintiffs also state that DCA has imposed cumulative penalties for the same offense. Tribunal proceedings do not afford parties the same procedural protections employed in criminal courts. City and DCA officials sometimes communicate with DCA administrative law judges regarding DCA policies and directives. Process servers can appeal the Tribunal's and DCA's determinations to New York state court in a Rule 78 proceeding.
Before a matter gets to the Tribunal stage, DCA officials sometimes resolve charges through "Consent Orders" and "Assurance of Discontinuance" agreements between DCA and process servers. These agreements can provide for the imposition of fines and injunctive directives. The fines and penalties imposed on process servers who settle are generally lower than those imposed by the Tribunal. If a process server has signed a settlement agreement and is charged with a subsequent violation, DCA will assert a charge for violation of the settlement agreement in addition to the violation of the underlying law or regulation and seek fines and/or penalties for violation of the settlement in addition to those imposed for violation of the underlying law or regulation.
DCA has also on occasion denied process servers the renewal of their licenses based on investigations into alleged delinquencies on the ground that a process server has failed to demonstrate the integrity and honesty necessary to hold a license. Plaintiffs assert that DCA does not always provide process servers with hearings in connection with these renewal determinations.
Plaintiffs filed the original complaint in this action on February 26, 2014. On March 7, the Court denied an application from Plaintiffs for a temporary restraining order and preliminary injunction enjoining the administrative enforcement of the City's process server laws and regulations. Plaintiffs applied again for a preliminary injunction on March 21, which was denied on March 28. Plaintiffs filed their Amended Complaint on May 19, 2014. Defendants filed their motion to dismiss on June 6.
When deciding a motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P., a court must "accept all allegations in the complaint as true and draw all inferences in the non-moving party's favor."
As a threshold matter, Defendants contend that the claims against the City Defendants in their individual capacities are barred by the doctrine of absolute immunity. Absolute immunity gives "public officials entrusted with sensitive tasks a protected area of discretion within which to carry out their responsibilities."
Plaintiffs' claims against the City Defendants in their individual capacities are barred by the doctrine of absolute immunity. Those claims are predicated on prosecutorial and adjudicatory functions undertaken by Defendants in enforcing the laws governing City process servers.
Plaintiffs contend that the City Defendants are not entitled to absolute immunity because they "acted with a complete absence of jurisdiction." This contention rests on the Plaintiffs' argument that the enforcement of the Administrative Code provisions that apply to process servers may only occur in criminal court. Because this argument is groundless for the reasons explained below, the City Defendants are entitled to absolute immunity. Accordingly, the claims against Defendants in their individual capacities are dismissed.
Plaintiffs' Amended Complaint is primarily predicated on the contention that Administrative Code § 20-106(a) ("Section 106(a)") requires all enforcement of City process server laws and regulations to occur in criminal court. Based on this interpretation of Section 106(a), Plaintiffs contend that the DCA acts
Title 20 of the Administrative Code governs the oversight of City licensees regulated by DCA. New York City, N.Y., Code § 20
At least three provisions of the Administrative Code address the enforcement of the laws and regulations related to entities licensed under Title 20. Section 106(a) provides for criminal penalties for violations of any provision of Chapter Two or associated regulation
Administrative Code § 20-104(e) ("Section 104(e)") provides the DCA with authority to
Finally, Administrative Code § 20-106(d) ("Section 106(d)") authorizes the City's Corporation Counsel to bring a civil action to enjoin violations of Title 20. It provides that "[t]he corporation counsel is authorized to bring an injunction proceeding to restrain or enjoin any violation of this title."
The New York City Charter ("Charter") also contains mechanisms to enforce the legal provisions in Title 20. Charter § 2203(h)(1) ("Section 2203(h)(1)") vests DCA with the power to administratively impose penalties for the violation of laws or rules within its jurisdiction
New York City, N.Y., Charter § 2203(h)(1) (emphasis supplied).
Plaintiffs contend that Section 106(a) requires all process server violations to be adjudicated in criminal court because that Section provides for criminal penalties of "not less than twenty-five dollars nor more than five hundred dollars, or by imprisonment not exceeding fifteen days" "
Plaintiffs have misread the clause "except as otherwise specifically provided" in Section 106(a). That clause serves the limited purpose of referencing other criminal penalty provisions in Chapter Two which impose different criminal penalties for violations of rules governing the conduct of specific licensed entities. The clause does not foreclose administrative or civil enforcement of process server rules by DCA.
The Administrative Code "has the force and effect of statute" under New York law.
Section 106(a)'s authorization of criminal penalties does not require process server violations to be adjudicated in criminal court. Nothing in the text of Section 106(a) requires that construction. The plain meaning of the clause at issue — "[e]xcept as otherwise specifically provided in chapter two of this title" — is to allow the City Council to impose different criminal penalties for violations of rules pertaining to specific classes of Title 20 licensees. Taking advantage of this freedom to prescribe other penalties, Chapter Two contains a number of criminal penalties pertaining to classes of licensees which differ from the criminal penalties provided for in Section 106(a), that is, a maximum penalty of a $500 fine or 15 days imprisonment.
The structure of the statutory license enforcement scheme set forth in the Administrative Code and Charter reinforces this reading of Section 106(a). The Administrative Code and Charter provide for multiple avenues of enforcement of the provisions of Title 20. In addition to the criminal powers conferred by Section 106(a), the Administrative Code and Charter contain provisions expressly granting DCA administrative as well as civil authority to enforce rules governing entities licensed under Title 20. Plaintiffs' construction of Section 106(a) would nullify those provisions and would violate the fundamental cannon of statutory construction that a statute is to be construed to "give effect to all of [its] provisions."
The legislative history of Title 20 further supports this reading of Section 106(a). Title 20 contains a provision titled "Legislative Intent," which provides that "the Council finds" that "sanctions and penalties applied by the
In sum, the text, structure, and legislative history underlying Title 20 make clear that Section 106(a)'s provision of criminal penalties does not divest DCA of authority to administratively enforce the laws and regulations governing process servers in Title 20. Plaintiffs' claims will now be evaluated in this light.
To sustain a claim under Section 1983, a plaintiff must show that she was "deprived of rights, privileges, or immunities secured by the Constitution and laws [of the United States]" by a person acting under color of state law.
Plaintiffs' Section 1983 claims are predicated on four alleged constitutional violations. First, based on Plaintiffs' contention that DCA acts without authority in administratively enforcing process server laws and regulations, Plaintiffs contend that Defendants deprive Plaintiffs of the Fourteenth Amendment due process protections of a criminal trial. Plaintiffs also claim that the failure to provide process servers with hearings in connection with a refusal to renew a license violates process servers' procedural due process rights. They next allege that the requirement that process servers pass a test before receiving a license violates their rights under the Equal Protection Clause of the Fourteenth Amendment. Finally, Plaintiffs contend that certain Administrative Code provisions and City regulations pertaining to process servers are unconstitutionally vague and violate Plaintiffs' right to fair notice of what conduct is prohibited. These claims will be addressed in turn.
Based on their theory that DCA acts
Plaintiffs also allege that Defendants violated their procedural due process rights in denying "process server license renewals without affording a hearing." Specifically, Plaintiffs allege that Defendants denied a license renewal to former NYSPPSA member Robert Winckelmann ("Winckelmann") and "putative class members" on the ground that they "failed to demonstrate ... the integrity and honesty necessary to hold a process server license in the City of New York" without first affording a hearing. Defendants argue that Plaintiffs lack a constitutionally protected interest in the renewal of a process server license.
At least two provisions of the Administrative Code are addressed to the renewal of process server license applications. Neither provision provides that a license renewal may not be denied on another basis. Administrative Code § 20-409(a) ("Section 409(a)") provides
New York City, N.Y., Code § 20-409(a). And Administrative Code § 20-104(g) ("Section 104(g)") provides that DCA "may refuse to issue or renew any license . . . after due notice and opportunity to be heard" where a process server commits an act of identity theft.
"A Fourteenth Amendment due process claim entails a twopart inquiry to first determine whether plaintiff was deprived of a protected interest, and, if so, what process was his due."
Plaintiffs' procedural due process claim fails because they lack a protected interest in the renewal of a process server license due to DCA's discretion in determining whether to grant a renewal application. Neither the Administrative Code nor the Charter requires DCA to renew a process server license upon the "ascertainment of objectively ascertainable criteria."
While the Administrative Code specifies certain circumstances under which DCA may refuse to renew license applications, it does not render those circumstances exclusive. Nor have the Plaintiffs pointed to any other provision in the Administrative Code that renders those or any other circumstances exclusive. This conclusion is reinforced by the City Council's expression of intent that DCA's power over licensing be "equitable, flexible and efficient." New York City, N.Y., Code § 20-101. Moreover, New York state courts have broadly held that there "there is no property interest in the renewal of an expired [City] license and no constitutional due process right to a hearing."
Plaintiffs claim that their right to equal protection under the law guaranteed by the Fourteenth Amendment to the United States Constitution is violated because they are required to pass a test to obtain a process server license when other licensed entities are not required to take a test. Plaintiffs claim that there "is no rational basis" for a process server to be required to pass a test to obtain a license when persons in other occupations requiring a license do not have to pass a test.
"Although the Equal Protection Clause is essentially a direction that all persons similarly situated should be treated alike, it does not require that all persons be dealt with identically, but it does require that a distinction made have some relevance to the purposes for which the classification is made."
Plaintiffs' challenge to the process server license examination requirement implicates neither a fundamental right nor a suspect classification and therefore rational basis review applies.
Plaintiffs attack two Administrative Code provisions and five Rules of the City of New York, Title 6 ("Rules") as unconstitutionally vague, both facially and as applied.
Plaintiffs challenge Administrative Code § 20-406.2, which governs "Responsibilities of process serving agencies." In its challenged part, the provision reads
New York City, N.Y., Code § 20-406.2. Plaintiffs also challenge Administrative Code § 20-101, which is titled "Legislative Intent," and provides in challenged part that
Plaintiffs challenge Rule § 2-233, which sets forth record keeping requirements. Plaintiffs complain that the requirement in this provision of "legible records" is unconstitutionally vague because "what may be legible to some, may not be legible to others." Plaintiffs also complain that the provision does not specify in sufficient detail which abbreviations are permissible. Plaintiffs challenge Rule § 2-233(a), which permits the amendment of electronic records, on the ground that it does not specify a time frame for the amendment of the records and permits process servers to be sanctioned before they have a chance to cure any deficiencies. Plaintiffs challenge Rule § 2-233b(a), which requires process servers to carry "a device to establish electronically and record the time, date, and location of service or attempted service" as unconstitutionally vague because it requires the use of GPS or cell tower signals but does not make provision for when those signals are unavailable. Plaintiffs challenge Rule § 2-234a(a)(3), which requires a process server to demonstrate "integrity and honesty in his or her process serving activities" on the ground that those terms are vague. Finally, Plaintiffs attack Rule § 2-234a(b)(2)(v), which requires process serving agencies to report any process server "who does not comply with the law governing process servers" on the ground that the underlying laws are susceptible to differing interpretations.
"The Due Process Clause of the Fourteenth Amendment requires that every criminal statute (1) give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, and (2) provide explicit standards for those who apply the statute."
The Amended Complaint does not adequately allege that the challenged Administrative Code provisions and Rules are unconstitutionally vague. Plaintiffs' facial challenges easily fail under the high standard applicable to such challenges. Plaintiffs do not plead that the challenged provisions are "impermissibly vague in all of [their] applications."
Finally, Plaintiffs have not identified a constitutional right that is implicated by the enforcement of these provisions and Rules. Plaintiffs rely solely on their contention that enforcement of licensing Rules through administrative processes instead of criminal proceedings violates the Due Process Clause. As explained above, Plaintiffs have failed to state a claim based on this theory. As a result, Plaintiffs' vagueness claims fail.
Plaintiffs bring a claim under RICO. Plaintiffs allege a violation of 18 U.S.C. § 1962(c). To state a viable RICO claim pursuant to Section § 1962(c), a plaintiff must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.
Plaintiffs' allegations of mail fraud, wire fraud, and Hobbs Act extortion are predicated on the notion that the City acts
More fundamentally, Plaintiffs' RICO claim fails because a civil RICO claim cannot be brought against a government entity or officials acting in official capacities. This is because it is well settled that a government entity cannot form the requisite intent to be liable for any RICO predicate violation. Although the Second Circuit has not addressed this issue in any published opinion, other Circuit courts and district courts in the Second Circuit have uniformly held that a municipality is not capable of forming the requisite intent to support the underlying offense giving rise to a civil RICO action.
Plaintiffs claim that Defendants' enforcement of the City process server laws and regulations constitutes a violation of the Excessive Fines Clause of the Eighth Amendment to the United States Constitution. Plaintiffs' Amended Complaint does not clearly articulate the basis for the Eighth Amendment claim, but Plaintiffs appear to base it on their allegation that DCA "impose[s] multiple punishments for the same offense," and "impose[s] monetary fines and/or civil penalties against Plaintiffs in excess of the amounts permitted under the Administrative Code."
Plaintiffs have failed to plausibly plead that Defendants impose "grossly disproportionate" penalties on Plaintiffs. Plaintiffs' conclusory allegations of cumulative penalties and penalties in excess of statutory maximums are devoid of specific factual material in their support.
Plaintiffs also bring several state claims. They bring a claim for defamation under New York law, and assert several other challenges to Defendants' actions under state law. A federal district court's supplemental jurisdiction over state law claims is governed by 28 U.S.C. § 1367. Under that provision, a district court "may decline to exercise supplemental jurisdiction over a claim" if,
The federal claims having been dismissed, this Court declines to exercise supplemental jurisdiction over Plaintiffs' state law claims. This litigation is at an early stage, and principles of judicial economy do not counsel in favor of the exercise of jurisdiction. There is no reason why convenience favors resolution of the state law claims in federal court as opposed to New York state court. And issues of fairness and comity do not weigh in either direction.
Defendants' June 6, 2014 motion to dismiss all federal claims is granted. The Court declines to exercise supplemental jurisdiction on the state law claims. The Clerk of Court shall close the case.