Acevado v. Citibank, N.A.
| Decision Date | 20 March 2013 |
| Docket Number | 10 Civ. 8030 (PGG) |
| Parties | CELINDA ACEVADO and JACQUELINE LOPEZ, individually and on behalf of all others similarly situated, Plaintiffs, v. CITIBANK, N.A., Defendant. |
| Court | U.S. District Court — Southern District of New York |
In this putative class action, Plaintiffs Celinda Acevado and Jacqueline Lopez allege that Defendant Citibank, N.A., restrained their bank accounts and charged them fees in violation of New York's Exempt Income Protection Act (the "EIPA") and state common law. In a March 23, 2012 memorandum opinion and order, this Court granted Citibank's Rule 12(b)(6) motion to dismiss the second, third, fourth, fifth, and sixth causes of action in the Amended Complaint. Acevado v. Citibank, N.A., No. 10 Civ. 8030(PGG), 2012 WL 996902, at *10-15 (S.D.N.Y. Mar. 23, 2012) ("Acevado I"). The Court also granted Citibank's motion to dismiss the Amended Complaint's first cause of action to the extent that claim seeks money damages. Id. at *9, *15. Because Citibank's brief did not address whether there is a private right of action under the EIPA for account holders seeking injunctive relief against their bank for alleged EIPA violations, however, the Court denied without prejudice Citibank's motion as to Plaintiffs' first cause of action to the extent that claim seeks injunctive relief. Id. at *9.
Citibank has now moved for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c), seeking an order dismissing Plaintiffs' remaining claim for injunctive relief. (Dkt. No. 43) For the reasons stated below, Citibank's motion will be granted.
Plaintiffs each maintained an account at one of Citibank's New York City branches. Acevado I, 2012 WL 996902, at *1. Plaintiffs received notices from Citibank advising them that their accounts had been frozen due to a restraining notice and/or levy served on Citibank by non-party judgment creditors. Id. Citibank charged the Plaintiffs administrative fees in connection with placing the restraints on their accounts. Id. Plaintiffs allege that they were unable to access the funds in their accounts as a result of the restraint. Id.
Plaintiffs seek to bring this action on behalf of all Citibank account holders whose accounts were restrained and/or levied upon between January 1, 2009, and the present in violation of the EIPA. Id. As noted above, this Court dismissed all of Plaintiffs' claims except for the first cause of action - alleging violations of the EIPA - to the extent that cause of action seeks injunctive relief. Id. at *15. The Court concluded, inter alia, that the EIPA does not create a private cause of action for money damages. Id. at *5-9.
In deciding a Rule 12(c) motion, courts apply the same standard applicable to a motion to dismiss under Rule 12(b)(6). Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 922 (2d Cir. 2010). To survive such a motion, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). To meet this standard, a complaint's factual allegations must permit the Court, "draw[ing] on its judicial experience and common sense[,]" "to infer more than the mere possibility ofmisconduct." Id. at 679. "In considering a motion to dismiss[,] . . . the court is to accept as true all facts alleged in the complaint," Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d 229, 237 (2d Cir. 2007) (citing Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 87 (2d Cir. 2002)), and must "draw all reasonable inferences in favor of the plaintiff." Id. (citing Fernandez v. Chertoff, 471 F.3d 45, 51 (2d Cir. 2006)). However, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice [to establish entitlement to relief]." Iqbal, 556 U.S. at 678.
As described more fully in Acevado I, the EIPA amends Article 52 of the N.Y. CPLR, which governs the enforcement and collection of money judgments in New York courts. N.Y. CPLR § 5201 et seq. Pursuant to CPLR § 5222-a, a judgment creditor is required to serve the bank where a judgment debtor's account is held with a restraining notice, exemption notice, and exemption claim forms. CPLR § 5222-a(b)(1). CPLR § 5222-a further provides that "[w]ithin two business days after receipt of the restraining notice or execution, exemption notice and exemption claim forms, the banking institution shall serve upon the judgment debtor the copy of the restraining notice, the exemption notice and two exemption claim forms." CPLR § 5222-a(b)(3). However, "[t]he inadvertent failure by a depository institution to provide the notice required by this subdivision shall not give rise to liability on the part of the depository institution." Id.
CPLR § 5239. Furthermore, CPLR § 5240 allows the court, "on its own initiative or the motion of any interested person," to "make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure." The "special proceeding" takes place in a New York court that has competent jurisdiction and is familiar with the underlying judgment. CPLR § 5221.
CPLR § 5222-a provides that "[n]othing in this section shall in any way restrict the rights and remedies otherwise available to a judgment debtor, including but not limited to, rights to property exemptions under federal and state law." CPLR § 5222-a(h).
Citibank contends that in Acevado I, "this Court held that the EIPA does not confer upon Plaintiffs a private right of action against Citibank[,]" and "[t]hat determination disposes of any claim for injunctive relief," because "in the absence of a legally cognizable claim[,] injunctive relief is unavailable." (Def. Br. 6) Citibank misapprehends Acevado I. There, the Court held that "there is no express or implied private right of action under the EIPA permitting an account holder to sue his or her bank for money damages related to alleged EIPA violations." Acevado I, 2012 WL 996902, at *9 (emphasis added). The Court did not reach the question of whether the EIPA provides a private right of action against garnishee banks for injunctive relief, in part because Citibank had not briefed the issue. Id.
The parties have now addressed this issue in connection with Citibank's motion for judgment on the pleadings. Having considered the briefing and all the proceedings in this matter, this Court concludes that the EIPA does not confer a private right of action for injunctive relief against garnishee banks.
In contending that "the text of the [EIPA] . . . support[s] a finding that an action for injunctive relief to prevent ongoing EIPA violations exists" (Pltfs. Br. 6), Plaintiffs repeat arguments that other courts have rejected. See, e.g., Martinez v. Capital One, N.A., 863 F. Supp. 2d 256, 262 (S.D.N.Y. 2012) () Plaintiffs cannot point to any language in the EIPA that creates a private right of action to sue a garnishee bank for injunctive relief. Instead, Plaintiffs argue that such a ruling would not be inconsistent with remedies that exist under other provisions of the CPLR. (Pltfs. Br. 6-8) As discussed below, the fact that depositors may have remedies under other provisions of the CPLR does not support, but rather, undermines, Plaintiffs' argument that there is a private right of action under the EIPA to sue garnishee banks for injunctive relief. The Court concludes that the EIPA does not create an express private right of action to sue garnishee banks for injunctive relief. See id. at 263 ().
"[W]here a statute does not expressly establish a private right of action, as in this case, a court may look to the overall structure of the legislation to determine if a private right of action should nevertheless be implied." Id. Under New York law, "the essential factors [for a court] to . . . consider[] [in resolving this issue] are: (1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would beconsistent with the legislative scheme." Sheehy v. Big Flats Cmty. Day, Inc., 73 N.Y.2d 629, 633-34 (1989). Of these factors, the third is the most important. Brian Hoxie's Painting Co. v. Cato-Meridian Cent. Sch. Dist., 76 N.Y.2d 207, 212 (1990).
In arguing that the EIPA creates an implied private right of action for injunctive relief, Plaintiffs repeat negative implication and misplaced expressio unius est exclusio alterius arguments that this Court and other courts have repeatedly rejected. Plaintiffs contend that CPLR § 5522-a(b)(3), which immunizes banks from "liability" for inadvertent failures to provide the required notices under the EIPA, creates an implied private right of action to...
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