New York State Professional Process Servers Association, Inc. et al v. City of New York et al
OPINION & ORDER re: 90 MOTION to Dismiss Amended Complaint filed by Eryn A. DeFontes, Michael T. Bloomberg, Sanford Cohen, David Scott Paul, Richard Zetler, Jr., Steven T. Kelly, Nancy Tumelty, Wanda Day, Shanet Viruet, Bill DeBla sio, Maurice Nwikpo-Oppong, Allison Rene Johnson, G. Pikulina, Philip Kimball, Judith Gould, Mitchell B. Nisonoff, Lori Barrett, James M. Plotkin, Alvin Liu, Jonathan E. Mintz, Nancy J. Schindler, Margarita Marsico, P. Kumar, Lee Fawkes, Dav id Cho, K. James, Shannon Bermingham, Fred R. Cantor, Alba Pico, Jordan Cohen, Megan Roberts, Wilfredo Lopez, City of New York, Bruce Dennis, Nicholas J. Minella, Marla Tepper, 93 MOTION to Dismiss Amended Complaint filed by S usan Kassapian, Michele Mirro. As set forth within, 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. SO ORDERED. (Signed by Judge Denise L. Cote on 8/18/2014) (ajs) Modified on 8/18/2014 (ajs).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------New York State Professional Process
Servers Association, Inc. on behalf of
itself and aggrieved members, and
Howard D. Clarke, and Stephen J.
Boyko, Inc. d/b/a Consolidated Claims
Service, Individually, and as
Representatives for all similarly
situated Process Server Individuals
and Process Serving Agencies as
defined by the New York City
Administrative Code, Title 20, Chapter
2, Section 20-404,
-vCity of New York and Michael T.
Bloomberg, Bill de Blasio, Jonathan E.
Mintz, Alba Pico, Marla Tepper, Esq.,
Sanford Cohen, Esq. Nancy J.
Schindler, Esq. Bruce Dennis, Esq.,
James M. Plotkin, Esq. Nicholas J.
Minella, Esq., Alvin Liu, Esq. Shannon
Bermingham, Jordan Cohen, Esq., Philip
Kimball, Esq. Lori Barrett, Esq. Megan
Roberts, Esq., Wanda Day, Esq., Fred
R. Cantor, Esq., Allison Rene Johnson,
Esq., Eunice Rivera, G. Pikulina, P.
Kumar, Michele Mirro, Esq., Mitchell
B. Nisonoff, Esq. Lee Fawkes, Esq.
Steven T. Kelly, Esq., Nancy Tumelty,
Esq., Susan Kassapian, Esq., Maurice
Nwikpo-Oppong, Esq., Eryn A. DeFontes,
Esq., Richard Zeitler, Jr., Esq.,
David Scott Paul, Esq., Shanet Viruet,
Esq., and Judith Gould, Esq., all
Individually and in their capacities
as officials and employees of the City
of New York,
14 Civ. 1266 (DLC)
OPINION & ORDER
For Plaintiffs New York State Professional Process Servers
Association, Howard D. Clarke, and Stephen Boyko, Inc.:
Tracy J. Harkins
48 Birch Hill Road
Mount Sinai, NY 11766
For Defendants New York City and Individual City Defendants:
Sherryl R. Neufeld
Mark W. Muschenheim
Jasmine M. Georges
Corporation Counsel of the City of New York
100 Church Street
New York, New York 10007
For Defendants Susan Kassapian and Michelle Miro:
Walter A. Kretz, Jr.
Scopetta Seiff Kretz & Abercrombie, LLP
444 Madison Avenue, 30th Floor
New York, NY 10022
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
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.
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.
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
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.
Defendants are elected officials and New York City Department of
Consumer Affairs (“DCA”) officials, including administrative law
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.
servers are regulated by the DCA.
A description of the DCA’s
system for administratively enforcing process server laws and
In enforcing the City’s process server laws and
regulations, DCA staff attorneys serve as prosecutors, and
administrative law judges adjudicate alleged violations.
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.
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.
state that the DCA has imposed fines in excess of statutory
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
City and DCA officials sometimes communicate
with DCA administrative law judges regarding DCA policies and
Process servers can appeal the Tribunal’s and DCA’s
determinations to New York state court in a Rule 78 proceeding.
See N.Y. C.P.L.R. 7801, et seq.
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
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
Plaintiffs assert that DCA does not always provide
process servers with hearings in connection with these renewal
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.
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 6.1
The motion was fully submitted on June 27.
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
LaFaro v. New York Cardiothoracic Grp., PLLC,
570 F.3d 471, 475 (2d Cir. 2009).
To survive a motion to
dismiss, “a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible
on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
complaint must do more, however, than offer “naked assertions
devoid of further factual enhancement.”
Id. (citation omitted).
I. Absolute Immunity
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.
gives “public officials entrusted with sensitive tasks a
protected area of discretion within which to carry out their
Mangiafico v. Blumenthal, 471 F.3d 391, 394
Defendants Susan Kassapian and Michele Mirro, both
administrative law judges, filed a separate motion to dismiss on
June 6, which joined the Defendants’ motion to dismiss in its
(2d Cir. 2006) (citation omitted).
adjudicatory functions” are entitled to absolute immunity from
damages liability for their judicial acts.
Butz v. Economou,
438 U.S. 478, 514 (1978); Spear v. Town of W. Hartford, 954 F.2d
63, 66 (2d Cir. 1992) (applying Butz to local executive
Absolute immunity thus applies “to administrative
New York Civil Liberties Union v. New York City
Transit Auth., 684 F.3d 286, 300 (2d Cir. 2012).
officials performing certain functions analogous to those of a
prosecutor” may claim absolute immunity with respect to such
Butz, 438 U.S. at 515.
Absolute immunity “is not
overcome by allegations of bad faith or malice.”
Waco, 502 U.S. 9, 11 (1991).
It may be overcome, however, if
the individual acts “in the complete absence of all
Id. at 12.
Plaintiffs’ claims against the City Defendants in their
individual capacities are barred by the doctrine of absolute
Those claims are predicated on prosecutorial and
adjudicatory functions undertaken by Defendants in enforcing the
laws governing City process servers.
See Butz, 438 U.S. at 514.
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
Because this argument is groundless for the
reasons explained below, the City Defendants are entitled to
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 ultra vires in administratively enforcing those rules.
Plaintiffs predicate their Section 1983 and RICO claims on this
A description of Section 106(a) and the statutory
framework regulating process servers in the City follows.
Title 20 of the Administrative Code governs the oversight
of City licensees regulated by DCA.
20 et seq. (“Title 20”).
New York City, N.Y., Code §
Chapter one of Title 20 (“Chapter
One”) of the Administrative Code is entitled “License
Enforcement,” and contains provisions for the enforcement of
regulations that apply to licensed entities generally.
§ 20-101, et seq.
Chapter two of Title 20 (“Chapter Two”)
contains provisions applicable to specific classes of licensed
There are thirty-two classes of licensees regulated
under Chapter Two, including, for example, owners of sidewalk
cafés, auctioneers, owners of laundries, locksmiths, and debt
See id. § 20-201, et seq.
Subchapter 23 of Chapter
Two governs the conduct of licensed process servers and provides
for penalties for violations of laws and regulations applicable
to process servers.
Id. 20-403 et seq.
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:
Except as otherwise specifically provided in chapter
two of this title, or in subdivision b of this
section, any person, whether or not he or she holds a
license issued under chapter two, who violates any
provision of chapter two or any regulation or rule
promulgated under it shall, upon conviction thereof,
be punished for each violation by a fine of not less
than twenty-five dollars nor more than five hundred
dollars, or by imprisonment not exceeding fifteen
days, or both; and any such person shall be subject
also to a civil penalty in the sum of one hundred
dollars for each violation, to be recovered in a civil
Id. § 20-106 (emphasis supplied).
Administrative Code § 20-104(e) (“Section 104(e)”) provides
the DCA with authority to administratively enforce violations of
provisions of Chapter Two:
e. (1) The commissioner shall be authorized, upon
due notice and hearing, to suspend, revoke or
cancel any license issued by him or her in
accordance with the provisions of chapter two and
to impose or institute fines or civil penalties
for the violation of (i) any of the provisions of
chapter two of this title and regulations and
rules promulgated under chapter two of this title
. . . .
(5) Any of the remedies provided for in this
section shall be in addition to any other
remedies provided under any other provision of
Id. § 20-104(e) (emphasis supplied).
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.”
Id. § 20-106(d).
The New York City Charter (“Charter”) also contains
mechanisms to enforce the legal provisions in Title 20.
§ 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:
(h)(1) Notwithstanding any inconsistent provision
of law, the department shall be authorized, upon
due notice and hearing, to impose civil penalties
for the violation of any laws or rules the
enforcement of which is within the jurisdiction
of the department pursuant to this charter, the
administrative code or any other general, special
or local law. . . . The remedies and penalties
provided for in this subdivision shall be in
addition to any other remedies or penalties
provided for the enforcement of such provisions
under any other law including, but not limited
to, civil or criminal actions or proceedings.
New York City, N.Y., Charter § 2203(h)(1) (emphasis
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” “[e]xcept as otherwise
specifically provided in chapter two of this title."
106 (emphasis supplied).
Id. § 20-
Plaintiffs argue that because there is
no specific authorization for the administrative adjudication of
process server violations in Chapter Two, the City’s
administrative enforcement of its process servers rules is
Plaintiffs have misread the clause “except as otherwise
Plaintiffs’ proposed construction of Section 106(a) is not
limited to process servers; it would apply as well to the DCA’s
authority to administratively adjudicate violations by other
entities licensed under Title 20.
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
The Administrative Code “has the force and effect of
statute” under New York law.
Guzman v. Haven Plaza Hous. Dev.
Fund Co., Inc., 69 N.Y.2d 559, 566 (1987).
When interpreting a
state statute, a court must “predict how the forum state's
highest court would decide the issues before us and, to the
extent there is any ambiguity in the state statutes under
consideration, to carefully predict how the highest court of the
state would resolve the uncertainty or ambiguity.”
L.P. v. Connecticut Siting Council, 222 F.3d 113, 115-16 (2d
Cir. 2000) (citation omitted).
“Our cardinal function in
interpreting a New York statute is to ascertain and give effect
to the intent of the legislature.”
Kuhne v. Cohen & Slamowitz,
LLP, 579 F.3d 189, 193 (2d Cir. 2009) (citation omitted).
the clearest indicator of legislative intent is the statutory
text, the starting point in any case of interpretation must
always be the language itself, giving effect to the plain
Id. (citation omitted).
New York’s “Rules of
Construction” statute provides that “[a] statute or legislative
act is to be construed as a whole, and all parts of an act are
to be read and construed together to determine the legislative
N.Y. Stat. § 97.
[E]ach section of a legislative act must be considered
and applied in connection with every other section of
the act, so that all will have their due, and conjoint
effect. To determine the intent of a statute, inquiry
must be made of the spirit and purpose of the
legislation, which requires examination of the
statutory context of the provision.
New York State Psychiatric Ass'n, Inc. v. New York State Dep't
of Health, 19 N.Y.3d 17, 24 (2012) (citation omitted).
Similarly, the Supreme Court has explained that statutes should
be construed “in a manner that gives effect to all of their
Mac's Shell Serv., Inc. v. Shell Oil Products Co.
LLC, 559 U.S. 175, 188 (2010) (quoting U.S. ex rel. Eisenstein
v. City of New York, New York, 556 U.S. 928, 932 (2009)).
Section 106(a)’s authorization of criminal penalties does
not require process server violations to be adjudicated in
Nothing in the text of Section 106(a) requires
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.
See, e.g., id. § 20-401(1)(a) (home
improvement contractors operating without a license subject to
six months’ imprisonment); id. § 20-275 (violations by licensed
dealers in second hand articles punishable by “imprisonment of
at least fifteen days”); id. § 20-472 (violations by general
vendors punishable by varying lengths of 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
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.”
Shell Serv., 559 U.S. at 176.
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 commissioner and by
the courts . . . must be sufficient to achieve these abovementioned purposes of licensing.”
20-101 (emphasis supplied).
New York City, N.Y., Code §
The “Legislative Intent” provision
further provides the Council’s sense that “the commissioner of
consumer affairs requires powers, remedies and sanctions which
are equitable, flexible and efficient.”
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.
III. Section 1983
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.
Burg v. Gosselin, 591
F.3d 95, 97 (2d Cir. 2010) (citation omitted).
“Section 1983 is
only a grant of a right of action; the substantive right giving
rise to the action must come from another source.”
Fulton Cnty. Sheriff, 63 F.3d 110, 119 (2d Cir. 1995).
Therefore, “the first step in any § 1983 claim is to identify
the specific constitutional right allegedly infringed.”
v. Wright, 459 F.3d 241, 252–53 (2d Cir. 2006) (citation
In addition, “[t]o prevail against a municipality on
a § 1983 claim, a plaintiff must demonstrate both an injury to a
constitutionally protected right and that the injury was caused
by a policy or custom of the municipality or by a municipal
official responsible for establishing final policy.”
v. Gallo, 546 F.3d 95, 103 (2d Cir. 2008) (citation omitted).
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.
A. Due Process
Based on their theory that DCA acts ultra vires in
administratively enforcing process server laws and regulations,
Plaintiffs contend that they have been deprived of the
protections of criminal court in violation of their Fourteenth
Amendment due process rights.
Because DCA does not act ultra
vires, this claim fails.
Plaintiffs also allege that Defendants violated their
procedural due process rights in denying “process server license
renewals without affording a hearing.”
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
Defendants argue that Plaintiffs lack a
constitutionally protected interest in the renewal of a process
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:
A license issued hereunder may be suspended or revoked
or its renewal denied by the commissioner at any time
for failure of the licensee to comply with any rule,
regulation or order promulgated by the commissioner.
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.”
Rosu v. City of New York, 742 F.3d 523, 526 (2d Cir. 2014)
(quoting Logan v. Zimmerman Brush Co., 455 U.S. 422, 428
Defendants argue in a footnote that NYSPPSA does not have
standing to bring this claim but do not suggest that the
individual named Plaintiff lacks standing to bring this claim on
behalf of putative class members.
The Court of Appeals has explained in the context of a
City license that “[w]hen alleging a property interest in a
public benefit, the plaintiff must show a legitimate claim of
entitlement to such interest that is grounded in established
Spinelli v. City of New York, 579 F.3d 160, 169 (2d Cir.
2009) (citation omitted) (gun dealer license).
This [legitimate claim of entitlement] inquiry stems
from the view that a property interest can sometimes
exist in what is sought -- in addition to the property
interest that exists in what is owned -- provided
there is a legitimate claim of entitlement to the
benefit in question. The analysis focuses on the
extent to which the deciding authority may exercise
discretion in arriving at a decision, rather than on
an estimate of the probability that the authority will
make a specific decision.
Zahra v. Town of Southold, 48 F.3d 674, 680 (2d Cir. 1995)
“Usually, entitlement turns on whether the
issuing authority lacks discretion to deny the permit, i.e., is
required to issue it upon ascertainment that certain objectively
ascertainable criteria have been met.”
Natale v. Town of
Ridgefield, 170 F.3d 258, 263 (2d Cir. 1999).
A party does not
have “a property right in a possible future license” when a City
agency “is vested with broad discretion to grant or deny a
Sanitation & Recycling Indus., Inc. v.
City of New York, 107 F.3d 985, 995 (2d Cir. 1997).
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.”
170 F.3d at 263.
While the Second Circuit does not appear to
have directly addressed the issue of a property interest in a
license renewal application, other Circuits have extended the
principles regarding agency discretion to the existence of a
property interest in a renewed license.
See, e.g., Thornton v.
City of St. Helens, 425 F.3d 1158, 1164-65 (9th Cir. 2005)
(“[A]n applicant does not have a property interest in the
renewal of a license if the reviewing body has discretion to
deny renewal or to impose licensing criteria of its own
creation.”); compare Movers Warehouse, Inc. v. City of Little
Canada, 71 F.3d 716, 720 (8th Cir. 1995) (applying Minnesota law
to a liquor license)
(“Where, as here, state law places no
substantive limitations on the discretion of the licensing
authority to deny renewal, such an expectation is not a
protected property interest.”) with Stauch v. City of Columbia
Heights, 212 F.3d 425, 430 (8th Cir. 2000) (finding property
interest in renewal of license to rental property when applicant
“need only meet three objective criteria to qualify” and city
has no discretion to deny renewal).
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
This conclusion is reinforced by the
City Council’s expression of intent that DCA’s power over
licensing be “equitable, flexible and efficient.”
Moreover, New York state courts have
City, N.Y., Code § 20-101.
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.”
Testwell, Inc. v. New York City
Dep't of Bldgs., 913 N.Y.S.2d 53, 58 (1st Dept. 2010) (concrete
testing laboratory license); see also M.S.B.A. Corp. v.
Markowitz, 806 N.Y.S.2d 77, 78 (2d Dept. 2005) (“[D]ue process
does not mandate . . . a hearing before the denial of a renewal
license.”) (mercantile license).
For these reasons, Plaintiffs
lack any “legitimate claim of entitlement” to a renewed license
which would create a cognizable property interest.
579 F.3d at 169.4
Moreover, process is available to Plaintiffs through the
vehicle of a CPRL Article 78 proceeding to challenge an adverse
B. Equal Protection
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.
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
“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
Kwong v. Bloomberg, 723 F.3d 160, 169 (2d Cir. 2013)
(quoting City of Cleburne, Tex. v. Cleburne Living Ctr., 473
U.S. 432, 429 (1985); Baxstrom v. Herold, 383 U.S. 107, 111
“[A] classification neither involving fundamental
rights nor proceeding along suspect lines cannot run afoul of
the Equal Protection Clause if there is a rational relationship
renewal determination. In fact, Winckelmann has commenced an
Article 78 proceeding in New York State Supreme Court, which is
between the disparity of treatment and some legitimate
Armour v. City of Indianapolis, Ind.,
132 S. Ct. 2073, 2080 (2012) (citation omitted).
regulation classification subject to rational basis review must
be upheld against equal protection challenge if there is any
reasonably conceivable state of facts that could provide a
rational basis for the classification.”
Town of Southold v.
Town of E. Hampton, 477 F.3d 38, 54 (2d Cir. 2007) (citation
A state “need not produce evidence to sustain the
rationality of a statutory classification.”
Connolly v. McCall,
254 F.3d 36, 42 (2d Cir. 2001) (quoting Heller v. Doe by Doe,
509 U.S. 312, 320 (1993)).
“Accordingly, it can be appropriate
to dismiss an equal protection challenge on the pleadings and
prior to discovery.”
Plaintiffs’ challenge to the process server license
examination requirement implicates neither a fundamental right
nor a suspect classification and therefore rational basis review
See Armour, 132 S. Ct. at 2080.
Defendants have set
forth a rational basis for the examination requirement.
contend that the City Council imposed an examination requirement
on process servers because of “pervasive problems” in the
service of process in New York City.
They point to a City
Council Report of March 2, 2010, which details “an increasing
prevalence of illegal ‘sewer service’ -- the deliberate failure
to deliver the notification of a court filing followed by a
false affidavit of successful delivery.”
NYC Council Comm. on
Consumer Affairs Comm. Rep. of the Governmental Affairs Div.
(March 2, 2010).
The City Council’s finding of pervasive
compliance problems in the service of process in New York City
constitutes a rational basis for imposing an examination
requirement to ensure that process servers adequately understand
the applicable laws, even where an examination is not required
in connection with other licensed professions.
sufficient to defeat the equal protection claim.5
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.6
claims fail as well.
Moreover, it is doubtful that process servers are “similarly
situated” to persons in other license classes -- such as
pawnbrokers or owners of electronic stores -- who perform very
different functions. The Second Circuit, however, has advised
that the “similarly situated” question is “generally” “a factual
issue that should be submitted to the jury” or decided at
summary judgment. Harlen Associates v. Inc. Vill. of Mineola,
273 F.3d 494, 499 n.2 (2d Cir. 2001). Accordingly, the question
does not bear on the outcome of this motion.
Plaintiffs also describe the provisions and Rules as
“overbroad.” Overbreadth and vagueness are two separate
Plaintiffs challenge Administrative Code § 20-406.2, which
governs “Responsibilities of process serving agencies.”
challenged part, the provision reads:
Every process serving agency licensed under this
a. Comply with all applicable state and federal laws;
b. Be legally responsible for any failure to act in
accordance with the laws and rules governing service
of process by each process server to whom it has
distributed, assigned or delivered process for
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:
The council finds that for the protection and relief
of the public from deceptive, unfair and
unconscionable practices, for the maintenance of
standards of integrity, honesty and fair dealing among
persons and organizations engaging in licensed
activities . . . licensing by the department of
consumer affairs is a necessary and proper mode of
regulation with respect to certain trades, businesses,
Id. § 20-101.
Plaintiffs contend that the “honesty and fair
dealing” language is used arbitrarily by DCA to deny license
concepts. See City of Chicago v. Morales, 527 U.S. 41, 52
(1999) (Stevens, J.). Courts have not “recognized an
‘overbreadth’ doctrine outside the limited context of the First
Amendment.” United States v. Salerno, 481 U.S. 739, 745 (1987).
Plaintiffs’ overbreath allegations are not predicated on the
First Amendment and do not state a claim.
Plaintiffs challenge Rule § 2-233, which sets forth record
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
Plaintiffs also complain that the provision does
not specify in sufficient detail which abbreviations are
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.
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.
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.7
“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.”
Dickerson v. Napolitano, 604 F.3d 732, 741
(2d Cir. 2010)(quoting Grayned v. City of Rockford, 408 U.S.
As Plaintiffs acknowledge in their
opposition brief, courts generally disfavor facial vagueness
challenges outside the context of the First Amendment.
“The first possible standard for evaluating facial
challenges outside of the First Amendment context is that such
challenges are permitted only when no set of circumstances
exists under which the law would be valid.”
Id. at 743
Under this test, the Plaintiffs must also
plead that the statute is “unconstitutionally vague as applied.”
Id. at 744.
A facial challenge may also be permissible when a
“constitutional right is implicated.”
The Amended Complaint does not adequately allege that the
challenged Administrative Code provisions and Rules are
Plaintiffs also cite to Rules §§ 2-235 and 2-236 in the Amended
Complaint, but do not propose a theory for why they are 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.”
And Plaintiffs have not pled plausible as-applied
challenges under Rule 8, Fed. R. Civ. P.
The Amended Complaint
does not articulate facts illustrating specific instances in
which individual process servers have been subjected to an
unconstitutionally vague provision of law as applied to them.
See United States v. Rybicki, 354 F.3d 124, 129 (2d Cir. 2003).
Finally, Plaintiffs have not identified a constitutional
right that is implicated by the enforcement of these provisions
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
Plaintiffs bring a claim under RICO.
violation of 18 U.S.C. § 1962(c).
Plaintiffs allege a
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
Id. at § 1962(c).
includes “any individual, partnership, corporation, association,
or other legal entity, and any union or group of individuals
associated in fact although not a legal entity.”
Id. at §
“Racketeering” is defined to include a variety of
The definition enumerates a number of federal
statutory offenses, including four alleged here: extortion under
the Hobbs Act, 18 U.S.C. § 1951, mail fraud under 18 U.S.C. §
1341, wire fraud under 18 U.S.C. § 1343, and witness tampering
under 18 U.S.C. § 1512.
Plaintiffs’ allegations of mail fraud, wire fraud, and
Hobbs Act extortion are predicated on the notion that the City
acts ultra vires in administratively enforcing the City’s
process server laws and regulations.
For the reasons described
above, that proposition fails.8
Plaintiffs’ allegation that the Defendants are guilty of
obstruction of justice under 18 U.S.C. §1512(b)(3) does not
depend on the proposition that Defendants acted ultra vires in
administratively enforcing process server laws and regulations.
Plaintiffs allege that the DCA orders process servers not to
publicly disclose the existence of subpoenas, and that in ex
parte communications City officials urge administrative law
judges to rule against process servers. Plaintiffs’ obstruction
of justice allegation fails as a RICO predicate violation
because, as explained below, a RICO claim cannot lie against a
municipality and its officers acting in their official
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.
e.g., Pedrina v. Chun, 97 F.3d 1296, 1300 (9th Cir. 1996)
(“government entities are incapable of forming the malicious
intent necessary to support a RICO action”) (citation omitted);
Liang v. City of New York, 2013 WL 5366394, at *12 (E.D.N.Y.
Sept. 24, 2013); Frooks v. Town of Cortlandt, 997 F. Supp. 438,
457 (S.D.N.Y. 1998) (collecting cases and finding that “every
court in this Circuit that has considered the issue has held
that a municipality cannot form the requisite criminal intent to
establish a predicate [RICO] act.”).
And because a civil RICO
claim cannot be brought against a municipality, it cannot be
brought against municipal officials acting in their official
See Hafer v. Melo, 502 U.S. 21, 25 (1991) (“Suits
against state officials in their official capacity . . . should
be treated as suits against the State.”).
Plaintiffs did not
respond to this argument in their opposition brief.
V. Eighth Amendment
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
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
The touchstone of the constitutional inquiry under the
Excessive Fines Clause is the principle of
proportionality: The amount of the forfeiture must
bear some relationship to the gravity of the offense
that it is designed to punish. The rule is that a
punitive forfeiture violates the Excessive Fines
Clause if it is grossly disproportional to the gravity
of a defendant's offense.
United States v. Castello, 611 F.3d 116, 120 (2d Cir. 2010)
(quoting United States v. Bajakajian, 524 U.S. 321, 334 (1998))
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.
See Iqbal, 556 U.S. at 681
(“allegations [which] are conclusory [are] not entitled to be
Plaintiffs fail to provide examples of
instances of the imposition of impermissibly cumulative
penalties, or of instances in which fines were levied in excess
of statutory maximums.
In light of the important public
function provided by process servers, and the potential harm to
litigants who are not served and found to be in default,
Plaintiffs’ bare allegations are inadequate to state a plausible
claim that the process server penalties are disproportionate to
the gravity of the offenses they are designed to punish, much
less “grossly” disproportionate.
In opposition to this motion,
Plaintiffs do not seek to preserve this claim.
reasons, Plaintiffs’ claim for an Eighth Amendment Excessive
Fines Clause violation is dismissed.
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.
federal district court's supplemental jurisdiction over state
law claims is governed by 28 U.S.C. § 1367.
provision, a district court “may decline to exercise
supplemental jurisdiction over a claim” if, inter alia, “the
district court has dismissed all claims over which it has
28 U.S.C. § 1367(c)(3).
whether to exercise jurisdiction over supplemental state law
claims, district courts should balance the values of judicial
economy, convenience, fairness, and comity -- the ‘Cohill
Klein & Co. Futures, Inc. v. Bd. of Trade of City of
New York, 464 F.3d 255, 262 (2d Cir. 2006) (citing Carnegie–
Mellon Univ. v. Cohill, 484 U.S. 343, 350,
well settled that where . . . the federal claims are eliminated
in the early stages of litigation, courts should generally
decline to exercise pendent jurisdiction over remaining state
Klein & Co. Futures, 464 F.3d at 262.
It is well to recall that in the usual case in which
all federal-law claims are eliminated before trial,
the balance of factors to be considered under the
pendant jurisdiction doctrine -- judicial economy,
convenience, fairness, and comity -- will point toward
declining to exercise jurisdiction over the remaining
Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med.
Centers Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d
705, 727 (2d Cir. 2013).
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.
New York, New York
August 18, 2014
United States District Judge
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