Knox and Hansberry v. Salinas

• Decision Date: 01 August 1998
• Docket Number: Docket No. 98-9469
• Citation: 193 F.3d 123
• Parties: (2nd Cir. 1999) ERNEST KNOX and GWENDOLYN HANSBERRY, Plaintiffs-Appellees. v. JOSE O. SALINAS, Commissioner of Motor Vehicles, Defendant-Appellant, CITY OF NEW HAVEN, Defendant
• Court: U.S. Court of Appeals — Second Circuit

Page 123

193 F.3d 123 (2nd Cir. 1999)

ERNEST KNOX and GWENDOLYN HANSBERRY, Plaintiffs-Appellees. v. JOSE O. SALINAS, Commissioner of Motor Vehicles, Defendant-Appellant, CITY OF NEW HAVEN, Defendant.

Docket No. 98-9469

August Term, 1998

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: July 12, 1999

Decided: September 21, 1999

Appeal from a permanent injunction entered by the United States District Court for the District of Connecticut (Peter C. Dorsey, Judge), prescribing detailed procedures for notifying owners when their motor vehicles are towed and when a towing company intends to sell an unclaimed vehicle to recover towing and storage costs. The District Court concluded that recently promulgated regulations of Connecticut's Commissioner of Motor Vehicles "d[id] not go far enough to meet the due process concerns raised by plaintiffs."

Injunction vacated and cause remanded to the District Court for further proceedings consistent with this opinion, including an articulation of findings.

Joanne S. Faulkner, New Haven, CT, for Plaintiffs-Appellees.

Cornelius F. Tuohy, Assistant Attorney General of Connecticut (Richard Blumenthal, Attorney General, Priscilla J. Green, Assistant Attorney General, of counsel), for Defendant-Appellant.

Before: WINTER, Chief Judge, WALKER, and CABRANES, Circuit Judges.

Per Curiam:

This appeal presents for review a permanent injunction entered by the United States District Court for the District of Connecticut (Peter C. Dorsey, Judge) against Connecticut's Commissioner of Motor Vehicles, defendant-appellant Jose O. Salinas (the "Commissioner"). Stating that recently adopted regulations "d[id] not go far enough to meet the due process concerns raised by plaintiffs," the District Court entered an injunction that prescribes detailed procedures for notifying owners when their motor vehicles are towed as well as when a towing company intends to sell an unclaimed vehicle to recover towing and storage costs. We hold that the District Court's findings are insufficient to permit appropriate appellate review. Accordingly, we vacate the injunction and remand for an articulation of findings consistent with this opinion.

I.

Plaintiffs Ernest Knox ("Knox") and Gwendolyn Hansberry ("Hansberry") are Connecticut residents who claim that, without notice to them, their motor vehicles were towed from the streets of the City of New Haven and ultimately sold by private towing companies in order to recover towing and storage costs. In 1993, Knox and Hansberry filed separate complaints against the private towers, the Commissioner, and the City of New Haven (the "City"), asserting claims, pursuant to 42 U.S.C. §1983, for deprivation of property without due process of law. Knox moved for certification, pursuant to Fed. R. Civ. P. 23(b)(2), of a plaintiff class composed of "all New Haven residents who, on and after February 8, 1990, had their vehicles towed by [the private operator that towed Knox's car] at the direction of the New Haven Police Department, and who were thereafter deprived of title to their vehicles in conjunction with the Department of Motor Vehicles, without prior notice or opportunity to be heard." Absent opposition, the District Court granted the motion pursuant to Local Rule 9(a)(1).¹

Plaintiffs' complaints alleged that the towing practice in New Haven was as follows. Plaintiffs claimed that, first, the New Haven Police Department would direct private towing companies to tow and then store vehicles that were illegally parked or had otherwise come under police suspicion. According to plaintiffs, neither the City nor the towing companies would notify vehicle owners that their cars had been towed, or afford these owners any opportunity to be heard on the legality of the tow itself. Plaintiffs alleged that most vehicles not claimed after fifteen days would be valued by the tower at less than $500 and then sold, again without notice, for unpaid towing and storage charges. According to plaintiffs, the towers would rely on Conn. Gen. Stat. § 14-150, which applied only to vehicles that are towed because they are abandoned, unregistered or a "menace to traffic."² To effect a transfer of title, the towers allegedly would complete a form affidavit certifying that the vehicle was abandoned, that the vehicle was worth less than $500, and that the owner of the vehicle was unknown. Plaintiffs further alleged that, based only on this affidavit, the State Department of Motor Vehicles ("DMV") would "rubber-stamp" the sale by issuing a new certificate of title to the purchaser. According to plaintiffs, the DMV allowed private companies to sell some 25,000 vehicles ³ per year in roughly this fashion.

The District Court never determined whether these allegations were true. Instead it simply entered default judgments against the private towing companies, and then denied plaintiffs' motions for summary judgment against the City and the Commissioner. In a March 31, 1995 ruling on Knox's motion for summary judgment, the Court noted that an individual cannot be deprived of his automobile without due process of law, and conducted the three-factor "balancing test" set forth in Mathews v. Eldridge, 424 U.S. 319 (1976).⁴ It concluded that individuals have an important interest in ownership of an automobile, that "lack of notice multiplies the risk of erroneous deprivation," and that the burden of mailing a notice to the owner, who can easily be located through the DMV, is relatively minimal. Accordingly, the Court stated: "[D]ue process is found to require reasonable notice and the opportunity for post-[towing] grievance procedure before any towed car may be sold to recoup towing and storage costs." The Court denied summary judgment, however, because it concluded that there was a genuine issue as to whether applicable city ordinances satisfied these due process requirements, and as to whether the private tower had actually provided Knox with notice.

On April 4, 1996, the Court consolidated the Knox and Hansberry cases, and on January 30, 1997, plaintiffs moved for a permanent injunction against both the City and the Commissioner. After holding a conference with the parties, the District Court denied plaintiffs' motion, without prejudice, to allow time for the Commissioner to consider amendment of the DMV regulations to moot the requested relief. On June 5, 1997, plaintiffs, dissatisfied with the Commissioner's proposed amendments, renewed their motion for a permanent injunction. The Court, on September 12, 1997, heard lengthy oral argument at which it considered, point by point, plaintiffs' specific objections to the proposed regulations. Plaintiffs had presented these objections to the Court in a letter which, in the Court's view, reflected all of plaintiffs' "problems" with the proposed regulations. Transcript of 9/12/97 Hearing at 40, 56. In the course of oral argument, the parties appeared to reach agreement, with the Court's approval, on each of these issues, and the motion for an injunction was again denied without prejudice.

The current regulations went into effect on December 8, 1997. They provide that, when a motor vehicle is towed by order of a police officer or traffic authority (as opposed to, for example, an owner of private property on which the vehicle is illegally parked), the owner and all lienholders of record must be notified by the towing company within 48 hours of the tow. Conn. Agencies Regs. §14-307-2. Upon a towing company's request, DMV must "immediately" provide registration and title information necessary to complete the notice form. Id. § 14-307-2(b). The notice must state (1) that the vehicle was towed, (2) the location of storage, (3) that the vehicle may be sold by the tower or storage facility after 45 days or, if the market value is $500 or less, after 15 days, and (4) that the owner has a right to contest the validity of the tow by requesting a hearing.⁵ See id. (incorporating notice requirements of Conn. Gen. Stat. § 14-150(e)). Market value is defined as "the average trade-in value, appearing in the current month's issue of the N.A.D.A. Official Used Car Guide, Eastern Edition." Id. §14-307-1(4).

The new regulations require that, upon receiving an application for a hearing, the hearing officer must promptly schedule a hearing, at which the vehicle owner and the authority responsible for the decision to tow may present any relevant evidence to show that the tow was or was not conducted in accordance with the statute. See id. §14-150-3; see also Conn. Gen. Stat. § 14-150(e) (providing for appointment of a hearing officer). The hearing officer must, with reasonable dispatch, provide both parties with a written decision, including a statement of reasons. See Conn. Agencies Regs. §14-150-4.

Unless the owner notifies the tower or storage facility that a hearing application is pending, the vehicle may be sold after 45 days or, if the market value is $500 or less, after 15 days. See id. § 14-307-5(a) (incorporating requirements of Conn. Gen. Stat. §14-150(g)). The tower or storage facility intending to sell the vehicle must notify the owner at least five days before the date of sale. See id. On a DMV form completed and signed under penalty of false statement, the putative seller must provide the DMV with notice of intent to sell, including evidence of notice to the owner and, if the market value of the vehicle exceeds $500, a statement of value. See id. §§14-307-5, -8. "The commissioner may require that proof of such stated value be provided, except that if no market value exists, a reasonable estimate of current market value may be provided together with a statement of the facts on which such estimate is based." Id. §14-307-8. Finally, notice of the pending sale must be provided by the seller to all lienholders of record. See id. §14-307-6.

If the market value does not exceed $500, the vehicle may be sold "for storage and towing charges owed thereon."...