Robinson v. N.Y.C. Transit Auth.

NATHANIEL ROBINSON, et al., Plaintiffs, v. NEW YORK CITY TRANSIT AUTHORITY, et al., Defendants.

No. 19-CV-1404 (AT) (BCM)

United States District Court, S.D. New York

January 24, 2022

MEMORANDUM AND ORDER REGARDING RECONSIDERATION

BARBARA MOSES, UNITED STATES MAGISTRATE JUDGE.

By motion dated October 15, 2021 (Dkt. No. 158), plaintiffs seek partial reconsideration, pursuant to Local Civil Rule 6.3 and Fed.R.Civ.P. 59(e), of the Court's Opinion and Order dated September 30, 2021 (Op.) (Dkt. No. 157), insofar as the Court granted summary judgment to defendants on plaintiffs' claim that defendants' procedures for providing pre-deprivation notice prior to seizing state tax refunds to collect unpaid transit fines are constitutionally inadequate. Plaintiffs argue that the Court erred in two respects: (1) by overlooking or misconstruing Supreme Court and Second Circuit precedent that - in plaintiffs' view - requires a government agency to conduct additional research if it knows that some of the mailing addresses it relies on to provide pre-deprivation notice are incorrect; and (2) by characterizing the additional measures proposed by plaintiffs as "labor intensive" without an adequate evidentiary record. Plaintiffs no longer argue (as they did in their original motion papers) that they should be granted summary judgment on the issue of pre-deprivation notice rather, they now contend that this issue should be resolved at trial. For the reasons that follow, the Court will reconsider its Opinion and Order, but upon reconsideration will adhere to its prior ruling.

Background

Plaintiffs Nathaniel Robinson and David Evans, suing on behalf of themselves and a certified class, allege that the New York City Transit Authority (NYCTA) and its personnel violated their right to procedural due process, guaranteed by the Fourteenth Amendment to the United States Constitution by obtaining and enforcing default judgments against them for violations of NYCTA's rules of conduct, and satisfying those judgments against plaintiffs' state tax refunds, without adequate notice or opportunity to be heard. On November 11, 2020, after discovery, the parties cross-moved for summary judgment. One of the issues presented to the Court on that motion was whether NYCTA's Transit Adjudication Bureau (TAB) "seizes money from respondents' tax refunds without constitutionally sufficient pre-deprivation notice reasonably calculated to reach those respondents." Op. at 13.

Plaintiffs did not quarrel with the content or timing of the notices that NYCTA provides to individuals accused of violating the transit rules. See Op. at 13 n.12.^[1] Rather, they argued that TAB's notices are not "reasonably calculated, under all the circumstances," to apprise respondents of the risk to their tax refunds, as required by Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950), because "a material portion of notices sent as part of the NOV enforcement process are returned as undeliverable," and TAB "makes no effort to remedy bad addresses, thereby resulting in notices that TAB knows will likely not reach the intended recipient." Pl. Mem. in Opp. to Def. Summary Judg. Mtn. (Dkt. No. 148) at 15.^[2]

Defendants, for their part, acknowledged that some of TAB's mailed notices did not reach the named respondents - and that TAB takes no affirmative steps to update "bad addresses" in its database, known as TABIS - but argued that the notice provided is nonetheless constitutionally sufficient, particularly given that: (i) the original NOV is personally delivered to each respondent; (ii) it would be a "clear undue burden for TAB to try to track down the new addresses of hundreds of thousands of individuals to collect small sums from each"; (iii) if it did undertake that research, it "would have no way of ensuring that the new address it obtained from public records would be a more accurate address than the address provided by the respondent at the time he or she received the NOV"; and (iv) when a tax refund is seized, a post-seizure notice is mailed (by the DTF, not TAB) to the address given by the respondent on his or her tax return, after which the respondent has a meaningful opportunity to vacate the judgment and contest the underlying NOV. See Def. Mem. in Supp. of Summary Judg. Mtn. (Dkt. No. 133) at 14-15, 21-26.^[3] Both plaintiffs and defendants sought summary judgment in their favor on this issue, and all parties agreed that the record (although "fairly skimpy" concerning "how many addresses in the TABIS system are actually incorrect, and what it would take to correct them," Op. at 16) was sufficient for the Court to determine whether the pre-deprivation notice provided by defendants was or was not constitutionally sufficient under Mullane and the balancing test prescribed by the Supreme Court in Mathews v. Eldridge, 424 U.S. 319, 335 (1976). Op. at 17-18; see also Tr. of April 13, 2021 Argument (Tr.) (Dkt. No. 155) at 11 (plaintiff's counsel, agreeing that despite the lack of "hard numbers" for the incorrect addresses, "this [is] something [the Court] can decide on summary judgment[] either way").

Applying the three-factor Mathews balancing test, the Court found that while the loss of an anticipated New York State tax refund can be a significant deprivation of property, the relatively modest "private interests" at stake here, Mathews, 424 U.S. at 334, do not demand the same level of procedural protection as the prospect of losing a home or a livelihood. Op. at 19. The Court further noted that the notice that defendants provided (or attempted to provide) was both substantively adequate and utilized a delivery method - first class mail - repeatedly endorsed by the federal courts as consistent with the requirements of the Due Process Clause, including in Jones v. Flowers, 547 U.S. 220, 234-35 (2006), and Luessenhop v. Clinton Cnty., New York, 466 F.3d 259, 270 (2d Cir. 2006), both of which involved tax foreclosures on plaintiffs' homes. The Court therefore concluded that "the first Mathews factor does not strongly favor plaintiffs." Op. at 20.

Turning to the second Mathews factor - "the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards," Mathews, 424 U.S. at 335 (emphasis added) - the Court found that although the known bad addresses in TABIS "present a clear risk of 'erroneous deprivation, '" that risk was not faced by all or even most members of the class, ^[4] because only 4.6% of the NOVs referred to SWOP are successfully collected against the respondents' tax returns. Op. at 20 & n.15. Moreover, the Court noted, the "probable value" of the "additional or substitute procedural safeguards" proposed, namely, that TAB look for respondents' current addresses in the DMV database or run "person searches" in LexisNexis," see Pl. Mem. in Supp. of Summary Judg. Mtn. (Dkt. No. 129) at 12, was "questionable at best." Op. at 20.^[5]

On the other side of the ledger, the Court found that the third Mathews factor - the "Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail," Mathews, 424 U.S. at 335 -is "weighty" in this action. Op. at 20. NYCTA struggles to collect the fines it issues, and even with the help of SWOP is only able to collect "approximately half" of those assessed. Id. Moreover:

[T]the "additional reasonable steps" that plaintiffs claim NYCTA should have taken before turning plaintiffs' unpaid, post-judgment NOVs over to SWOP (updating or correcting their mailing addresses via the DMV database or by conducting research using LexisNexis) are precisely the steps that - because of their labor-intensive nature - the government is not required to undertake even when it knows that a property owner did not receive the certified letter sent to him prior to the more significant deprivation of a tax foreclosure sale. Jones, 547 U.S. at 236; Luessenhop, 466 F.3d at 271.

Op. at 21 (emphasis in the original). The Court concluded that, "on the specific facts of this case, the notice that defendants provided to NOV respondents before seizing their tax refunds . . . is constitutionally adequate." Op. at 21. It is this conclusion that plaintiffs now challenge.

Legal Standards

Reconsideration is an "extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources." Parrish v. Sollecito, 253 F.Supp.2d 713, 715 (S.D.N.Y. 2003) (quoting In re Health Mgmt. Sys Inc. Secs. Litig., 113 F.Supp. 613, 614 (S.D.N.Y. 2000)). Here, reconsideration is sought pursuant to Rule 59(e), which requires that motions to alter or amend a judgment be filed within 28 days after entry of the judgment and Local Civil Rule 6.3, which requires that motions for reconsideration or re-argument of a court order be served within 14 days after the determination of the original motion. The substantive standards are the same under both rules, see NEM Re Receivables, LLC v. Fortress Re, Inc., 187 F.Supp.3d 390, 394 n.2 (S.D.N.Y. 2016); Glendora v. Pinkerton Sec. & Detective Servs., 1999 WL 46633, at *1 (S.D.N.Y. Feb. 1, 1999) (collecting cases), and are intended to be "strict." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). "[R]econsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked" and that "might reasonably be expected to alter the conclusion reached by the court." Id. It is the movant's burden both to identify the "controlling decisions or material facts that were before [the court] on the original motion" but were overlooked, and to...