Nationwide Recovery, Incorporated v. Detroit, City of

Filing 229

OPINION AND ORDER denying 218 , 214 , and 222 - striking 221 - granting 211 Signed by District Judge Linda V. Parker. (AFla)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
NATIONWIDE RECOVERY, INC.,
JERRY PARKER, HUSSEIN M. HUSSEIN,
LOUAY M. HUSSEIN, ANNIE HUSSEIN,
JULIA HUSSEIN, and CAROL HENDON,
Plaintiffs,

Case No. 17-cv-12378
Honorable Linda V. Parker

v.
CITY OF DETROIT,
Defendant.
_________________________________/

OPINION AND ORDER
This lawsuit, brought pursuant to 42 U.S.C. § 1983, arises from the
termination of a towing permit issued by Defendant City of Detroit (“City”) to
Plaintiff Nationwide Recovery, Inc. (“Nationwide). As the termination was made
without a pre-deprivation hearing, the City violated Nationwide’s Fourteenth
Amendment procedural due process rights. (See ECF No. 119.) Since the Court
reached that conclusion in an opinion and order entered August 21, 2018, the
parties have been litigating the issue of damages. On May 4, 2023, this Court
granted the parties leave to file additional dispositive motions on that issue, with a
filing deadline of June 1, 2023.
The matter is now before the Court on the following motions:

• The City’s motion for summary judgment pursuant to Federal Rule of
Civil Procedure 56 (ECF No. 211), to which Nationwide responded (ECF
No. 216) and the City replied (ECF No. 225);
• Non-Party Kenneth Christian’s motion to quash subpoena and for a
protective order (ECF No. 214), to which the City responded (ECF No.
215)) and Christian replied (ECF No. 219);
• Nationwide’s motion to strike a paragraph from the declaration of
Commander Michael Parish1 (ECF No. 218), which was submitted in
support of the City’s summary judgment motion (ECF No. 211-2), to
which the City responded (ECF No. 223) and Nationwide replied (ECF
No. 226);
• Nationwide’s motion for leave to file a motion for partial summary
judgment (ECF No. 222), to which the City responded (ECF No. 227)
and Nationwide replied (ECF No. 228).
I.

Motion to Strike (ECF No. 218)
The Court begins with Nationwide’s motion to strike paragraph 12 of

Commander Parish’s declaration, as that informs what facts will be considered in
deciding the City’s summary judgment motion. See Brainard v. Am. Skandia Life
Assur. Corp., 432 F.3d 655, 667 (6th Cir. 2005) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 250 n.5 (1986)) (“Generally, a district court should dispose of
motions that affect the record on summary judgment before ruling on the parties’
summary judgment motions.”).
In paragraph 12 of his declaration, Commander Parish states:
1

Parish was a Lieutenant when Nationwide’s towing permit was suspended.
2

Nationwide’s conduct was both fraudulent and a blatant violation of
the BOPC [Board of Police Commissioners] rules which
incorporated the City Council fee schedule. It merited immediate
termination. It is my belief Nationwide’s permit would have been
terminated prior to July 19, 2017, had it not misrepresented its
activities by publicly posting a conforming fee schedule that
alleged it was charging proper rates.
(ECF No. 211-2 at PageID. 6590-91.) Nationwide asks the Court to strike this
entire paragraph. As to the first sentence, Nationwide maintains that it lacks
specificity and, in any event, would not be based on Commander Parish’s personal
knowledge. Nationwide argues that the second sentence should be stricken
because: (1) a declarant’s “belief’ cannot be used on a summary judgment motion;
and (2) Commander Parish lacks personal knowledge of whether the City would
have terminated Nationwide’s permit as the ultimate decision of whether to
terminate a towing permit belongs to the BOPC.
Rule 56 provides that “[a]n affidavit or declaration used to support or oppose
a motion must be made on personal knowledge, set out facts that would be
admissible in evidence, and show that the affiant or declarant is competent to
testify on the matters stated.” Fed. R. Civ. P. 56(c)(4). Commander Parish sets out
admissible facts in his declaration and, contrary to Nationwide’s assertion, what
misconduct he is referring to in the first sentence of paragraph 12 is clear when the
declaration is read as a whole. It obviously is not the simple posting of the City’s
3

mandated fee schedule. Rather, it was the charging of “unlawful and fraudulent
fees” which exceeded those permitted under the Towing Rules and listed on the
posting, including an administrative fee exceeding the $75 owed to the City, with
Nationwide pocketing the excess. (See ECF No. 211-2 at PageID. 6590- ¶¶ 9-11.)
There can be no dispute that Commander Parish had personal knowledge of these
charges from the audit of Nationwide.
Commander Parish uses the word “belief” when conveying that
Nationwide’s permit would have been terminated based on this misconduct.
However, this Court must look beyond the words used to assess whether
Commander Parish’s statement “is based on personal testimony and
competence[.]” Ondo v. City of Cleveland, 795 F.3d 597, 604 (6th Cir. 2015)
(indicating that it is not the use of “magic words” but whether the “court can
conclude from the context of the declaration whether [the personal knowledge and
competence] requirements are satisfied”). The fact that the BOPC had the final
authority to terminate a towing permit does not mean that Commander Parish is
unable to indicate, based on his personal experience and knowledge, what that
decision would have been. And the City demonstrates that Commander Parish
possesses this personal experience and knowledge. (See generally ECF No. 2232.)
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For this reason, the present case is distinguishable from Nagel v. United
Foods, 63 F.4th 730, 735 (8th Cir. 2023), which Nationwide cites. There, the issue
was whether the plaintiff-union member could attest to how 119 other members
(many if not all of whom presumably were strangers to him) would have voted on
a collective bargaining agreement if the union had not concealed key information.
Commander Parish, in comparison, has years of experience supervising the City’s
towing operations and engaging with the BOPC, including becoming familiar with
its decisions. (See generally ECF No. 223-2.)
For these reasons, the Court is denying Nationwide’s motion to strike
paragraph 12 of Commander Parish’s declaration.
II.

Motion to Quash (ECF No. 214)
Kenneth “Turbo” Christian was a Nationwide employee in July 2017,

towing abandoned and stolen vehicles, including pursuant to Nationwide’s permit
with the City. Christian’s involvement in the recovery of a stolen Jeep Cherokee in
mid-July 2017, added to the City’s already existing suspicions that Nationwide’s
rate of recovering vehicles—which far exceeded that of other City towers—
resulted from its collusion with car thieves. This led to Commander Parish’s
recommendation to then City Police Chief, James E. Craig, that Nationwide’s
towing permit be immediately suspended.
5

Christian was interviewed by the Detroit Police Department (“DPD”) on
March 2, 2018, at the suggestion of Louay Hussein, who operates Nationwide, in
an effort to get Nationwide’s towing permit reinstated. (See ECF No. 214-4.)
Christian was accompanied by the same attorneys representing Nationwide here.
(See id. at PageID. 6799.) Before the interview, the City had obtained phone
records from one of the car thieves with whom Christian had been communicating,
which demonstrated that Christian was being untruthful during the interview.
When confronted with that evidence, the lawyers accompanying Christian
terminated the interview.
In December 2018, Christian also was deposed in the public nuisance action
the City filed against Nationwide in state court on June 1, 2018. (See ECF No.
214-5.) However, he regularly invoked his Fifth Amendment rights and refused to
answer questions during the deposition (see generally id.) and, again later, during
the trial in that action (see ECF No. 215-5).
In the present action, after granting Nationwide’s motion for partial
summary judgment with respect to liability, the Court set a June 30, 2023 deadline
for discovery with respect to damages. The City then served Christian with a
deposition subpoena on June 6, 2023, for a June 14 deposition.

6

Christian’s counsel twice requested a brief adjournment of the deposition,
which the City agreed to. On June 27, which was two days before the deposition
was at last scheduled to occur, the City learned that Christian had hired new
counsel. Christian’s newly-hired counsel asked the City to again delay the
deposition, but the City rejected the request. Neither Christian nor his counsel
appeared at the deposition on June 29. The following day, Christian filed the
pending motion to quash the subpoena and for a protective order pursuant to
Federal Rules of Civil Procedure 26(c) and 45(d)(3).
Christian argues that he will suffer “undue burden” if his deposition is
allowed in this litigation. He maintains that “[e]very single question [the City]
would ask [him] has already been asked and answered” and “[t]here is no new
information to discover by allowing [the City] to take [his] deposition for a second
time.” (ECF No. 214-1 at PageID. 6788-89.) According to Christian, “[t]his case
has not evolved since [he] provided his [previous] interview and deposition.” (Id.)
The City responds that Christian’s motion is untimely, and he fails to
demonstrate “undue burden.” The City argues that Christian’s deposition is
needed to address important facts relevant to its defense based on Nationwide’s
collusion with car thieves. According to the City, its prior attempts to discover
those facts were “stonewalled at every turn.” The City maintains that it needs to
7

depose Christian to determine if he will continue to assert his Fifth Amendment
rights. If Christian plans to invoke his Fifth Amendment rights, the City wants to
know which questions he refuses to answer, which may lead to an argument that
his rights (at least with respect to some questions) are waived. To the extent
Christian is no longer invoking the Fifth Amendment, or is found unable to invoke,
his rights under that amendment, the City argues that it is entitled to his answers
before trial.
Under Rule 45 of the Federal Rules of Civil Procedure, parties may
command a nonparty to, inter alia, attend and testify at a specified time and place.
Fed. R. Civ. P. 45(a)(1)(A)(iii). The rule requires a court to quash or modify a
subpoena that “(i) fails to allow a reasonable time to comply; (ii) requires a person
to comply beyond the geographical limits specified in Rule 45(c); (iii) requires
disclosure of privileged or other protected matter, if no exception or waiver
applies; or (iv) subjects a person to undue burden.” Fed. R. Civ. 45(d)(3)(A).
Similarly, Federal Rule of Civil Procedure 26 allows a party or any person from
whom discovery is sought to seek a protective order to avoid, inter alia, “undue
burden[.]” Fed. R. Civ. P. 26(c)(2).
Rule 45(d)(3)(A) requires the “timely” filing of a motion to quash a
subpoena, see Fed. R. Civ. P. 45(d)(3)(A), and “[i]t is well settled that, to be
8

timely, a motion to quash a subpoena must be made prior to the return date of the
subpoena,” FTC v. Trudeau, No. 5:12MC35, 2012 WL 5463829, at *3 (N.D. Ohio
Nov. 8, 2012) (quoting Estate of Ungar v. Palestinian Auth., 451 F. Supp. 2d 607,
610 (S.D.N.Y. 2006)). While Rule 26(c) does not expressly state that a motion for
protective order must be “timely” filed or filed within some other time frame,
courts have found a waiver of discovery objections not raised before the deadline
for responding. See, e.g., Drutis v. Rand McNally & Co., 236 F.R.D. 325, 336-37
(E.D. Ky. 2006); United States v. Thody, No. 1:19-cv-3392020 13553263, at *1
(W.D. Mich. Sept. 30, 2020) (citing cases).
Christian’s motion is not timely. Nevertheless, courts have considered
untimely objections to a subpoena “in unusual circumstances and for good cause
shown.” Schnatter v. 247 Grp., LLC, 343 F.R.D. 325, 330 (W.D. Ky. 2022)
(quoting Maysey v. Henkel Corp., No. 1:17-cv-00108, 2018 WL 314859, at *2
(W.D. Ky. Jan. 5, 2018) (quoting Trudeau, 2012 WL 5463829, at *3)). The Court
finds it unnecessary to decide whether such circumstances are present here because
Christian fails to demonstrate that he will suffer an “undue burden” by being
deposed here.
While Christian was interviewed by the DPD and deposed in the state-court
litigation, his attorneys prematurely terminated the interview, and he invoked his
9

Fifth Amendment rights in response to many questions during the deposition. The
City is entitled to explore questions that were not answered before and that have
developed since. The state-court litigation and the present matter are not identical,
and it is likely that the City has developed and discovered new evidence which was
not available when it previously questioned Christian. The Court need not accept
Christian’s assertion that the City has all the relevant information it needs to
defend against Nationwide’s claimed damages.
The Court rejects any assertion that the deposition will be a waste of time
because Christian will invoke his Fifth Amendment rights. It is generally
inappropriate to invoke the Fifth Amendment in response to every question. See In
re Morganroth, 718 F.2d 161, 167 (6th Cir. 1983) (“A blanket assertion of the
privilege by a witness is not sufficient to meet the reasonable cause requirement
and the privilege cannot be claimed in advance of the questions.”). Until the City
asks its questions, there is no way to know whether and for which questions
Christian will now invoke his Fifth Amendment rights. Only then can this Court
assess whether Christian’s invocation of the privilege is appropriate under the
circumstances.
For these reasons, the Court is denying Christian’s motion to quash and for a
protective order.
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III.

Motion to for Leave to File Second Motion for Summary Judgment
(ECF No. 222)
As indicated, the deadline for the parties to file additional dispositive

motions concerning damages was June 1, 2023.2 Almost two months later, on July
31, Nationwide filed a second dispositive motion (ECF No. 221) followed by a
motion for leave to file that motion (ECF No. 222). Nationwide contends that it
could not have filed the motion until it deposed the City’s designee on June 19. If
the Court declines to consider the motion as one for summary judgment,
Nationwide asks that it be construed as a motion in limine to preclude the City
from introducing evidence acquired after its towing permit was terminated on July
19, 2017.
A district court may modify a scheduling order for “good cause.” Fed. R.
Civ. P. 16(b)(4); see also Andretti v. Borla Performance Indus., Inc., 426 F.3d 824,
830 (6th Cir. 2005) (analyzing a motion for leave to file a dispositive motion after
the deadline in a scheduling order as a motion to modify the scheduling order
under Rule 16(b)(4), as opposed to a motion for late filing under Rule 6(b)). “The
As also indicated, the deadline for conducting additional discovery was June 30,
2023. The Court cannot recall now why the discovery deadline followed the
dispositive motion deadline. These dates were set, however, during a status
conference with the parties’ counsel. Likely, the parties expressed a need for
discovery unrelated to the anticipated dispositive motions and proposed this order.
In any event, there never was an objection to these dates.
2

11

primary measure of Rule 16’s ‘good cause’ standard is the moving party’s
diligence in attempting to meet the case management order’s requirements.” Inge
v. Rock Fin. Corp., 281 F.3d 613, 625 (6th Cir. 2002) (internal quotation marks
omitted). The court also should consider any possible prejudice to the nonmovant. Id.
While Nationwide claims it could not have filed its delayed dispositive
motion until the June 19 deposition of Commander Parish, this is not supported by
the motion, itself. The proposed motion refers to only three pieces of information
shared during the deposition: (1) that Nationwide was not afforded a hearing
because the City’s law department deemed the permits invalid; (2) the City began
providing towing companies with due process hearings before the BOPC after this
Court’s August 2018 decision; and (3) that the BOPC extended the permit
expiration dates for towers an additional six months. (See ECF No. 221 at PageID.
7605-06.) However, this information has no bearing on the legal arguments in the
motion—that the after-acquired evidence doctrine is inapplicable here to enable the
City to reduce its damages. Additionally, Nationwide already was aware of the
information. (See id. at PageID. 7604-06 (citing ECF No. 243 at PageID. 503-04
and ECF No. 119 at PageID. 4092).)

12

Moreover, over a year ago, on March 14, 2023, this Court issued a decision
holding that Nationwide’s compensatory damages could be limited by evidence
showing fee-related fraud while Nationwide was acting as a DPD tower, if this
misconduct also justified the City’s decision to terminate Nationwide’s towing
permit, even if the evidence of the fraud was only discovered afterward. (ECF No.
204 at PageID. 6540-41.) The Court relied on McKennon v. Nashville Banner
Publishing Co., 513 U.S. 352, 361-62 (1995). Nationwide did not seek
reconsideration in response. Its proposed motion—whether viewed as one for
partial summary judgment or as one to limit evidence at trial—essentially is a
severely untimely request for reconsideration of that decision.
For these reasons, Nationwide lacks “good cause” for its delayed motion
attacking the applicability of McKennon and the after-acquired doctrine in this
case. Moreover, Nationwide has made the same arguments in response to the
City’s now-pending summary judgment motion. (See ECF No. 216 at PageID.
7024-27.) The Court is denying Nationwide’s motion for leave to file its untimely
second summary judgment motion and is striking the motion.

13

IV.

City’s Summary Judgment Motion (ECF No. 211)
A.

Applicable Standard

Summary judgment pursuant to Rule 56 is appropriate “if the movant shows
that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). The central inquiry is
“whether the evidence presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must prevail as a matter of law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
The movant has the initial burden of showing “the absence of a genuine
issue of material fact.” Id. at 323. Once the movant meets this burden, “[t]he party
opposing the motion must show that ‘there is a genuine issue for trial’ by pointing
to evidence on which ‘a reasonable jury could return a verdict’ for that party.”
Smith v. City of Toledo, 13 F.4th 508, 514 (6th Cir. 2021) (quoting Liberty Lobby,
477 U.S. at 248). The non-movant’s evidence generally must be accepted as true
and “all justifiable inferences” must be drawn in the non-movant’s favor. Liberty
Lobby, 477 U.S. at 255.

14

B.

Factual and Procedural Background

The Court presumes familiarity with the facts set forth in its earlier decisions
in this case. (See ECF Nos. 119, 179.) It discusses only those additional facts
relevant to the issues raised in the City’s motion.
On July 19, 2017, the City suspended Nationwide from its towing rotation.
(See ECF No. 148-2 at PageID. 4777.) The suspension followed at least a year of
suspicion that Nationwide’s recovery of stolen vehicles “at an alarming rate” was
due to its collusion with car thieves. (See ECF No. 148-5 at PageID. 4871-72.)
Commander Parish concluded that Nationwide’s recovery of a white 2017 Jeep
Cherokee on July 15, 2017, 14 minutes after it had been stolen, and with its tires
already stripped, provided “sufficient evidence that [it] ha[d] been involved or at
least complicit in the theft of vehicles.” (Id. at PageID. 4875.) He, therefore,
recommended further investigation into Nationwide’s activities and its immediate
suspension from DPD’s list of authorized towing companies. (Id.) After the
Assistant Chief of Police and Police Chief concurred in the recommendation, an
“Administrative Message” was issued, suspending Nationwide from the towing
rotation. (ECF No. 148-2 at PageID. 4777.)
As discussed further below, the City subsequently acquired more
information concerning Nationwide’s—or at least one of its employee’s—
15

collusion with car thieves. The City also learned that Nationwide had been
charging unauthorized towing fees.
1.

Excessive Fees

The Detroit City Council set the fees authorized towing companies were
permitted to charge, and excess fees and costs were expressly proscribed. (ECF
No. 211-2 at PageID. 6587, ¶ 3.) The allowed fees included a flat rate towing fee
of $125 for vehicles under 10,000 pounds, a $75 administrative fee to be remitted
to the City, and a $15 per day storage fee. (Id.)
Prior to July 2017, Commander Parish, who oversaw DPD towing, received
complaints that Nationwide was charging excessive fees. (Id. at PageID. 6587-88,
¶ 5.) At the time, Commander Parish was uncertain whether the complaints related
to tows Nationwide performed for DPD or the Wayne County Sheriff, as it was
authorized to tow for both. (Id.) On July 26, 2017, however, Commander Parish
received a memo from a DPD officer describing two complaints regarding
excessive fees charged by Nationwide in connection with tows pursuant to its DPD
permit. (Id. at PageID. 6588-89, ¶ 5.)
The first complaint related to an individual visiting the City from out of
town, whose vehicle had been stolen on February 23, 2017, and recovered by
Nationwide. (Id.) Nationwide presented the owner with a $700 bill when he or
16

she went to retrieve the vehicle. However, Nationwide told the owner the bill
would be waived if the vehicle was sent to a specific collision shop for repair—a
shop owned by Nationwide’s owner, Sam Hussein. (Id.) The owner elected to
take the vehicle to a Ford dealership, but Nationwide initially refused to release the
vehicle. (Id.) It did so after the owner paid the $700 bill. (Id.)
The second incident involved a vehicle stolen on June 19, 2017. (Id.)
Nationwide initially told the owner the tow charges would be $750, which the
owner said she could not pay. (Id.) When the owner later returned, she was told
the charges had increased to $1,000. (Id.) When the owner said she could not
afford the charges, Nationwide ultimately allowed her to retrieve the vehicle for
$650. (Id.)
By the time Commander Parish received this information—which confirmed
his prior suspicions that Nationwide was charging excessive fees—the City had
already terminated Nationwide’s towing permit. (Id. at PageID. 6589, ¶ 8.)
Commander Parish subsequently conducted a formal audit of Nationwide’s towing
invoices in February 2018. 3 The audit verified that, while it held the DPD permit,

Commander Parish instituted regular audits of DPD towers when he began
overseeing towing in late December 2016. (ECF No. 211-2 at PageID. 6587, ¶ 4.)
He recalled at least one previous audit of Nationwide. (Id.) According to
Commander Parish, the February 2018 audit of Nationwide would have happened
3

17

Nationwide routinely charged unlawful and fraudulent tow fees, often three or
more times the charges allowed. (Id. at PageID. 6589-90, ¶ 9; see also ECF No.
211-2 at PageID. 6604-32.) This included $225 for the tow, when a flat rate of
$125 was permitted. (ECF No. 211-2 at PageID. 6589-90, ¶ 9.) It also included an
administrative fee $100 more than the $75 owed to the City, which Nationwide
retained. (Id. at PageID. 6590, ¶ 10.) Nationwide also routinely charged $20 per
day for storage, as opposed to the $15 allowed. (Id. ¶ 11.)
The charges reflected on the audit are not limited to those Nationwide
performed under the DPD permit. (See ECF No. 217-18 at PageID. 7534-35, ¶¶ 813.) According to Nationwide, of the 806 vehicles included in the audit, 206 were
towed under the authority of other law enforcement agencies. (Id. at PageID.
7535, ¶ 13.) Those tows were not subject to the City’s Towing Rules or towing
rates. (Id. at PageID. 7534, ¶ 10.) Nevertheless, for some of those tows, the audit
contains an “N” to indicate that Nationwide was not in compliance with those
rules. (Id. at ¶ 8.) Nationwide maintains that after subtracting those vehicles,
along with vehicles with no charges or charges for additional tows or services a
customer “may have requested” (e.g. window wrap), 145 vehicles show

sooner in light of the concerns regarding its practices, but other issues and limited
City resources got in the way. (Id. at PageID. 6588, ¶ 8.)
18

overcharges. (ECF No. 216 at PageID. 7016; see also ECF No. 217-18 at PageID.
7535, ¶ 13.) The 145 vehicles were towed during DPD’s stolen recovery pilot
program. (Id.) Nationwide contends that it was allowed to charge for additional
services at that time. (Id.)
In the state-court litigation, however, the trial judge found that Nationwide
was charging more than the City ordinance authorized, even during the pilot
program. (ECF No. 211-5 at PageID. 6689-90.) The court also concluded that
Nationwide routinely charged impermissible towing and storage fees “on almost
every case.” (Id. at PageID. 6710.)
Other DPD towers charged fees for additional services, such as “loader,”
“gate,” and “tow out” fees—at least until Commander Parish issued a letter on
December 30, 2019, warning DPD-authorized towing companies that they were
strictly prohibited from assessing such fees. (ECF No. 217-5 at PageID. 7307.)
For example, Commander Parish was aware of a few instances where L.L.J.B.S
Towing & Recovery charged fees for services not authorized under the Towing
Rules (see ECF No. 217-12; ECF No. 217-3 at PageID. 7100), although the
company’s owner informed Commander Parish that these were clerical errors
caused by the tows being miscategorized in its system (ECF No. 217-3 at PageID.
7100-91). Commander Parish testified that he also was told of unauthorized fees
19

being charged by Elite Towing, H&B Land, New Executive Towing, and Michigan
Auto Recovery Service (“MARS”). (Id. at PageID. 7100-104.) Additionally, the
City learned that New Executive was keeping two sets of books and records, and
was told that H&B Land was doing the same. (Id. at PageID. 7104.)
An audit of New Executive reflected it was charging proper fees; however,
the company was removed from the DPD towing rotation when it subsequently
came to light that it had two sets of books and its representatives admitted
wrongdoing. (ECF No. 225-2 at PageID. 7736. ¶¶ 55-56.) Audits of Elite Towing
and H&B were shelved for various reasons, including COVID. (ECF No. 225-2 at
PageID. 7737, ¶ 57.) However, Commander Parish did ask DPD tow personnel to
investigate both companies in response to information that they were overcharging
and was not advised of any issues. (Id.) Commander Parish was told that H&B
had two sets of books and records only a week before his deposition in this
litigation on June 19, 2023. (Id. ¶ 59; ECF No. 217-3 at PageID. 7104.) During
the deposition, Commander Parish indicated that he was confirming the accuracy
of this information and H&B would be terminated as a DPD tower immediately if
the allegations were confirmed. (ECF No. 225-2 at PageID. 7737, ¶ 59.)
An audit of MARS, which was shared with Commander Parish on May 11,
2020, revealed several instances of charging “presumptively improper” fees:
20

“loader” fees, a “2nd tow” fee, and a “labor charge”. (ECF No. 217-6; ECF No.
217-7; ECF No. 217-3 at PageID. 7170-80.) Most of the charges preceded
Commander Parish’s December 30, 2019 warning letter. (See ECF No. 217-6.)
These fees may be proper with the vehicle owner’s consent. (ECF No. 225-2 at
PageID. 7772, ¶¶ 8, 10.)
Detroit’s Office of Inspector General (“OIG”) reviewed MARS’ fee
charging practices and initially found “a pattern of MAR[S] charging additional
fees without any justification.” (ECF No. 217-10 at PageID. 7474.) The OIG
ultimately concluded, however, “that all non-authorized fees were for private tow
services distinct from DPD tows,” and, when most of the fees were charged, it was
“unclear if [the City’s Towing Rules] prohibited non-authorized fees from
appearing on DPD invoices, rather than prohibiting non-authorized fees from being
assessed in relation to DPD tows.” (Id. at PageID. 7476.)
MARS was instructed that, going forward, it is a violation to combine
approved DPD tow fees and fees associated with private tows on the same invoice.
(ECF No. 217-10 at PageID. 7474.) The OIG found that MARS instituted a new
invoicing procedure to address this issue. (Id.) The OIG recommended that DPD
implement a clear written policy for all towers, requiring secondary tow activity to
be invoiced separately. (Id. at PageID. 7476-77.)
21

Following the OIG’s investigation, Commander Parish recommended to the
BOPC that MARS towing permit be terminated based on the unauthorized charges,
as well as the following additional violations: (1) towing vehicles without
authorization from DPD’s dispatch center; 4 (2) subcontracting with non-authorized
towers to perform DPD tows; 5 and (3) providing false, misleading, or contradictory
information to him or the Office of Inspector General to conceal its improper
conduct. 6 (ECF No. 217-9.) The BOPC elected, instead, to issue a 30-day
suspension. (ECF No. 217-3 at PageID. 7218.)

MARS and another tower, V & F, were obtaining tows directly from a DPD
officer, in circumvention of the dispatch center. (ECF No. 225-2 at PageID. 7727,
¶ 25.) It was determined that MARS obtained far fewer tows in this manner than V
& F. (Id. ¶ 26.) V & F’s towing permit was suspended. (See id. at PageID. 7734,
¶ 45.) Its permit subsequently was terminated when the City learned that a V & F
employee stole a laptop from a vehicle towed to its lot. (Id. ¶ 46.) In the state
court litigation, the court found that Nationwide operated outside the DPD towing
rotation, by directly summoning a Wayne County Sheriff Deputy, at a rate far
exceeding that of V & F, and that this conduct constituted a public nuisance. (See
ECF Nos. ; ECF No. 225-2 at PageID. 7729-30, ¶¶ 33-35.)
4

Commander Parish indicates that this was not the primary complaint against
MARS because the City’s rules on subcontracting were not clear at the time, and
the conduct did not cause public harm. (ECF No. 225-2 at PageID. 7721, ¶ 2.)
5

The OIG also investigated these other violations, and its findings and conclusions
are contained in its report. (See ECF No. 217-10.)
6

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2.

Collusion with Car Thieves

As far as Commander Parish is aware, neither MARS nor any other
authorized DPD tower, except Nationwide, engaged in collusion with car thieves.
(ECF No. 225-2 at PageID. 7731, ¶ 36.) The state court found that at least one
Nationwide employee, Christian, “was receiving tips from a known car thief,
[Maurice Leggette] Cochran.” (Id. at PageID. 6696). In its decision affirming the
trial court’s decision, the Michigan Court of Appeals wrote: “[T]he parties do not
contest the trial court’s finding that at least one of Nationwide’s drivers, Kenneth
‘Turbo’ Christian, ‘clearly’ paid individuals he knew to be car thieves for tips
regarding where stolen vehicles could be located.” City of Detroit v. Nationwide
Recovery, Inc., No. 348814, 2021 WL 1051247, at *9 (Mich. Ct. App. Mar. 18,
2021).
This finding was based in part on Nationwide’s recovery of a Jeep Cherokee
on July 28, 2017, while DPD was conducting surveillance during the investigation
of a car thief gang. (ECF No. 211-5 at PageID. 6699.) Christian arrived to tow the
vehicle five minutes after gang members stole it. (Id.)
Cochran, one of the members, was arrested in October 2017, at which time
two cell phones were recovered from him. (Id. at PageID. 6695.) On one cell
phone, there was a text to someone identified as “T,” at a number associated with
23

Christian. (Id.) In one text message, Christian instructed Cochran: “Come back
and get your money, Dillhole[.]” (Id.) Christian’s phone records showed more
than 400 interactions with Cochran from August through December 2017. (ECF
No. 211-5 at PageID. 6698.)
During his DPD interview in March 2018, Christian acknowledged receiving
a tip from car thieves in connection with his recovery of the Jeep Cherokee on July
28, 2017. (ECF No. 176-2 at PageID. 5655-56.) He also indicated that he had
been receiving tips from car thieves since early July 2017, and that the tip that led
to the recovery on July 28, was the third he had received. (Id. at PageID. 5658,
5666-67.) Forensic information obtained from Cochran’s phone reflected that the
first communication between Cochran and Christian was on July 27, 2017.
However, documents obtained during the state-court litigation revealed that
Christian had recovered 36 vehicles in the first 16 days of July. (ECF No. 211-2.)
By the end of the month, he had recovered a total of 55 stolen vehicles, roughly 13
per week. (Id.)
According to Commander Parish, Christian’s collusion with car thieves and
Nationwide’s charging of excessive fees merited immediate termination of
Nationwide’s towing permit. (ECF No. 211-1 at PageID. 6590-92, ¶¶ 12, 16; ECF
No. 217-3 at PageID. 7200-04.) Christian’s conduct of communicating with car
24

thieves to locate stolen vehicles, Commander Parish provided, violates Michigan’s
criminal statute for receiving or concealing stolen property. (See ECF No. 217-3 at
PageID. 7200 (referring to Mich. Comp. Laws § 750.535(1); see also ECF No.
225-2 at PageID. 7731, ¶ 38.) He further provides that, had Nationwide’s permit
not already been revoked when confirmed evidence of its excessive fees and
collusion were uncovered, its permit would have been immediately terminated
based on this misconduct. (ECF No. 211-1 at PageID. 6590-92, ¶¶ 12, 16.)
Under the City’s Towing Rules, “[t]he City reserves the right to terminate
any towing permit with a towing company in the event of a breach of the towing
permit or any provision of the towing permit or of [the Towing Rules]” and “may
immediately terminate any towing permit with a towing company for fraud or
criminal conduct by the tow company or its employees[.]” (ECF No. 186-2 at
PageID. 5997-98.) While a permit holder has the right to a hearing “before the
[BOPC] or [its] designee prior to the effective date of any such termination” (id.),
as “towing monitor” under the City’s Towing Rules from December 2016 until
June 2021, Commander Parish had the authority to recommend that a towing
company be suspended or terminated (See ECF No. 186-2 at PageID. 5996-97;
ECF No. 217-3 at PageID. 7052, 7112.)

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3.

Nationwide’s Disqualification as a City Vendor

In early 2018, the City began a proposal process to replace its tow permits
with contracts. (ECF No. 225-2 at PageID. 7737, ¶ 62.) Nationwide applied for a
contract. (Id. at PageID. 7738, ¶ 63.) Due to its concerns regarding Nationwide,
DPD referred the issue of whether Nationwide should be considered for a City
contract to the OIG. (Id.)
On April 13, 2018, the OIG sent a letter to the City’s Mayor, Michael
Duggan, preliminarily recommending that Nationwide not be considered for a
towing contract. (ECF No. 225-7 at PageID. 7879.) The recommendation was
based on DPD’s ongoing criminal investigation of Nationwide’s practices, which
had already uncovered instances of at least one principal of Nationwide towing a
stolen vehicle after receiving a tip from an alleged car thief. (Id. at PageID. 787980) Nationwide was afforded a hearing to present evidence and testimony to refute
the allegations. (See ECF No. 225-8 at PageID 7882.) The OIG nevertheless
continued to have concerns about Nationwide’s qualification as a DPD vendor.
(Id.) It, therefore, informed Mayor Duggan in a second letter that its
“recommendation stands” that Nationwide’s bids for towing contracts not be
considered. (Id.)

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On September 6, 2018, the OIG sent another letter to Mayor Duggan to
clarify its previous two letters. (ECF No. 225-9 at PageID. 7885.) Specifically,
the OIG explained that when it found Nationwide unqualified to bid for the towing
contracts, Nationwide’s towing permit already had been suspended. (Id.) Had
Nationwide’s permit not been suspended already, the OIG indicated it would have
recommended immediate suspension for reasons which included the reason it
recommended the suspension of several other towing companies. (Id.)
C.

Applicable Law & Analysis

The City argues that Nationwide’s recovery for the violation of its
procedural due process rights should be limited to nominal damages because
Nationwide was colluding with car thieves and charging grossly excessive and
unlawful fees well before its towing permit was terminated.
As this Court previously discussed, there are two inquiries when assessing
whether compensatory damages should be awarded for a procedural due process
violation. “The first inquiry concerns causation; whether the action taken without
due process is justified or, in other words, whether the same action would have
been taken even if due process had been afforded.” Franklin v. Aycock, 795 F.2d
1253, 1263 (6th Cir. 1986) (citing Carey v. Piphus, 435 U.S. 247, 263-64 (1978)).
“The second inquiry is whether there was proof of actual injury, . . . caused by the
27

denial of due process, to support an award of compensatory damages[.]” Id.
Where a defendant can prove that the same action would have been taken even if
the plaintiff had been afforded due process, the plaintiff is entitled to recover only
nominal damages. Id. At 1264 (citing Carey, 435 U.S. at 260); see also id. At
1263 (“[O]nce it is determined that a claimant’s due process rights were violated,
‘the burden of proof shifts to the defendant[] to demonstrate that the procedural
violation did not cause the plaintiff’s injury.”).
At least two years ago, the parties told this Court, that, when addressing the
first inquiry, “[e]vidence that proves that Nationwide or its employees took tips
from or paid car thieves on or prior to July 19, 2017 is admissible and relevant,
even if that evidence was unknown to the City at the time of the July 19, 2017
permit revocation decision.” (See ECF No. 179 at PageID. 5903-04 (citations
omitted).) “As such,” the parties agreed, “evidence available on or prior to July
19, 2017, even if unknown to the City at that time, is admissible and relevant to
decide whether the City would have made the same decision had it afforded
Nationwide a hearing.” (Id. At PageID. 5904.) The Court found this to be a
correct assessment of the law. (See id.)
The Court then found insufficient evidence as of the date Nationwide’s
permit was terminated to find that Nationwide or one of its employees was paying
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car thieves for tips to locate stolen vehicles. (See id. At PageID. 5905-08.) While
there was no disputed fact that at least one Nationwide employee, Christian, was
“in contact” with car thieves before Nationwide’s permit was terminated, the
evidence was inconclusive that Christian was receiving tips and paying car thieves
before the recovery of the Jeep Cherokee on July 28. (Id. At PageID. 5905-06.)
The Court reconsiders whether proof of payment is necessary because, as
Commander Parish describes, a towing company aids in the concealment of a
vehicle’s theft and the destruction of potential evidence of other crimes simply by
receiving tips from car thieves regarding the location of stolen vehicles and towing
those vehicles without going through the proper DPD channels. (See ECF No.
217-3 at PageID. 7201-03.) The state court found this conduct to be a public
nuisance. (See generally ECF No. 211-5.) The state court found that Nationwide
had been working outside the DPD rotation system well before July 2017. (Id.)
By at least the beginning of July 2017, Christian was interacting with car
thieves. In the first 16 days of the month, he recovered 36 stolen vehicles. Based
on Commander Parish’s experience with towing, this rate of recovery was
impossible without the assistance from car thieves. (ECF No. 211-2 at PageID.
6595, ¶ 28.) While Christian claimed that he did not pay the car thieves for their
tips, the record indicates otherwise. In fact, the state trial and appellate courts
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already have concluded that Christian “ ‘clearly’ paid individuals he knew to be car
thieves for tips regarding where stolen vehicles could be located.” See Nationwide
Recovery, 2021 WL 1051247, at *9. The City may not have evidence of tips or
payments prior to July 19 as undeniably incriminating as the text from Christian to
Cochran on October 12, 2017, where Christian told Cochran to come get his
money. But there is no genuine issue of material fact that Christian, while working
as a Nationwide tower, colluded with car thieves before July 19.
Moreover, the evidence is conclusive that Christian was paying for tips from
car thieves as of July 28—just over a week after Nationwide’s towing permit was
terminated. There are two reasons why the Court now believes it can consider this
evidence when deciding whether Nationwide’s recovery should be limited to
nominal damages. First, “[p]rocedural due process rules are meant to protect
persons not from the deprivation, but from the mistaken or unjustified deprivation
of life, liberty, or property.” Carey, 435 U.S. at 259 (emphasis added).
“[P]rocedural due process rules are shaped by the risk of error inherent in the truthfinding process[.]” Id. (quoting Matthews v. Eldridge, 424 U.S. 319, 344 (1976)).
Where the decision was correct or justified, the Supreme Court has reasoned, the
fact that a due process violation may have occurred should not produce a windfall.
Id. at 260. Second, had a hearing been conducted “as soon as practicable”—which
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the record reflects would have been months after July 17 (ECF No. 225-2 at
PageID. 7741, ¶ 79)—any existing relevant evidence, such as the July 28 incident,
would have been presented to and considered by the BOPC.7
Based on his experience in towing and with the BOPC, Commander Parish
indicates that the collusion between a Nationwide employee and car thieves
merited immediate termination. Supporting this result, the OIG also concluded,
preliminarily and after affording Nationwide a hearing, that Nationwide was not
qualified to serve as a City vendor based on this misconduct. Nationwide fails to
show that this type of misconduct would not have warranted a towing company’s
immediate termination.
Moreover, Nationwide has been afforded a trial before the state court and a
hearing before the OIG with respect to its misconduct. The state court found that a
Nationwide employee was “clearly” colluding with car thieves—paying tips for
locations of stolen vehicles which incentivized car thieves to steal vehicles and
dump them in the City. (ECF No. 211-5 at PageID. 6696.) The state court also
Even if the July 28 incident cannot be factored into the assessment of whether
Nationwide’s permit would have been terminated if a hearing had been afforded
(which, to be clear, the Court does not believe to be the case), it is relevant to
whether Nationwide’s damages should be cut off once that incident happened. At
most, therefore, Nationwide would be entitled to damages equivalent to what it
would have earned during the 11 days between when its permit was terminated and
when a Nationwide tower was caught in the act of colluding with car thieves.
7

31

found that Nationwide routinely charged impermissible towing and storage fees
“on almost every case.” (Id. at PageID. 6710.)
Even if this latter finding does not warrant a nominal damages award—as it
provides a different reason for terminating Nationwide’s permit than the one on
which the decision was based—it should limit Nationwide’s recovery as the
misconduct was occurring before the permit was terminated, even if the City had
not uncovered the proof. See McKennon, 513 U.S. at 360-61. (“Once an employer
learns about employee wrongdoing that would lead to a legitimate discharge, we
cannot require the employer to ignore the information, even if it is acquired during
the course of discovery in a suit against the employer and even if the information
might have gone undiscovered absent the suit. The beginning point in the trial
court’s formulation of a remedy should be calculation of backpay from the date of
the unlawful discharge to the date the new information was discovered.”); see also
Carey, 435 U.S. at 260 (indicating that wrongdoers should not recover a windfall
simply due to the lack of procedural due process). There were suspicions that
Nationwide was charging excessive fees well before July 19, 2017, when its permit
was terminated. The undisputed evidence reflects that two memos received by
Commander Parish less than a week after Nationwide’s termination confirmed
those suspicions. (See ECF No. 211-1 at PageID. 6589, ¶ 8.) Nationwide fails to
32

present evidence to refute Commander Parish’s assertion that this behavior also
warranted the immediate termination of Nationwide’s DPD permit.
Nationwide’s misconduct is not comparable to MARS. First, there is no
suggestion in the record that MARS or one of its employees was paying for tips
from car thieves to secure a rate of recovery beyond most DPD towers. In fact,
there is no indication that any other DPD tower was colluding with car thieves.
Second, MARS was found to have charged for extra services for which there was
some lack of clarity as to whether they could be charged or, if charged, included on
the same invoice as the services allowed under DPD Towing Rules. Nationwide,
in comparison, was inflating the allowable fees, charging vehicle owners
substantially more than the amount permitted under the Towing Rules.8 This
included an $175 administrative fee, when the City only allowed and was
reimbursed $75.
For these reasons, the Court concludes that the City is entitled to summary
judgment with respect to whether Nationwide is limited to nominal damages.

The City’s reply brief reflects that this finding holds true despite Nationwide’s
challenges to the 2018 audit. (See ECF No. 225 at PageID. 7709.)
8

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VII. Conclusion
For the reasons stated above, the Court is denying Nationwide’s motion to
strike (ECF No. 218) paragraph 12 of Commander Parish’s declaration attached to
the City’s motion for summary judgment. It also is denying the motion to quash
the subpoena for, or for a protective order related to, Christian’s deposition (ECF
No. 214), although the need for the deposition is presumably rendered moot by the
decision on the City’s summary judgment motion. Finding a lack of good cause
for Nationwide’s late-filed second summary judgment motion, and that the
arguments in the motion are set forth elsewhere, the Court denies Nationwide’s
motion for leave to file the motion (ECF No. 222) and strikes the already-filed
motion (ECF No. 221). The Court concludes that the City is entitled to summary
judgment with respect to Nationwide’s entitlement to only nominal damages.
(ECF No. 211.)
SO ORDERED.

s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE

Dated: March 26, 2024

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