Nestle Waters N. Am., Inc. v. City of N.Y., 15-cv-05189 (ALC)

• Decision Date: 25 May 2016
• Docket Number: 15-cv-05189 (ALC)
• Parties: NESTLE WATERS NORTH AMERICA, INC., Plaintiff, v. THE CITY OF NEW YORK and DEPARTMENT OF FINANCE OF THE CITY OF NEW YORK, Defendants.
• Court: U.S. District Court — Southern District of New York

NESTLE WATERS NORTH AMERICA, INC., Plaintiff, v. THE CITY OF NEW YORKand DEPARTMENT OF FINANCE OF THE CITY OF NEW YORK, Defendants.

15-cv-05189 (ALC)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

May 25, 2016

OPINION AND ORDER

ANDREW L. CARTER, JR., United States District Judge:

Plaintiff Nestle Waters North America, Inc. ("Nestle") brings suit against the City of New York ("City") and the Department of Finance of the City of New York, seeking to recover more than $4 million it paid in fines on more than 40,000 parking summonses. Plaintiff alleges that Defendants maintained an unlawful and deliberate policy of issuing and enforcing jurisdictionally defective parking summonses. Plaintiff brings claims, pursuant to 42 U.S.C. §§ 1983 and 1988, that this policy violated Plaintiff's constitutional rights to procedural and substantive due process. Plaintiff also brings a state law claim of unjust enrichment. Defendants move to dismiss all claims, and Plaintiff cross-moves for summary judgment. For the reasons stated herein, Defendants' motion is GRANTED and Plaintiff's motion is DENIED.

BACKGROUND

I. Factual Background

The following is drawn from Plaintiff's Complaint, as well as documents of which the Court may take judicial notice.¹

Plaintiff is a corporation that owns commercial trucks and operates them across state lines. (Compl., ECF No. 4, ¶ 12.) It participates in the International Registration Plan ("IRP"), a registration reciprocity agreement among states, the District of Columbia, and provinces of Canada. (Compl. ¶ 12.) Under the terms of the IRP, states issue special commercial license plates to trucks registered under the IRP. (Compl. ¶ 14.) The plates issued by New York bear the term "APPORTIONED" ("Apportioned Plates"), and the plates issued by every other state bear the term "IRP" ("IRP Plates"). (Compl. ¶¶ 14-15.)

Plaintiff operates commercial trucks in New York City. (Compl. ¶ 2.) Within the City, the Department of Finance of the City of New York, commonly called the Parking Violations Bureau ("PVB"), administers and adjudicates parking violations. (Compl. ¶¶ 1, 11.) Under New York Vehicle and Traffic Law ("VTL") § 238(2), any notice of violation or summonses issued for a parking violation must include "plate type as shown by registration plates of said vehicle," as well as four other elements. (Compl. ¶¶ 18-19 (quoting VTL § 238(2)). "[VTL] § 238(2) requires strict compliance with respect to the five (5) elements identified therein as necessary for the issuance of a proper summons for a parking violation." (Compl. ¶ 18.) However, PVB "maintained a policy of issuing summonses for parking violations to out-of-state trucks wherein the description 'IRP' was regarded as an accurate physical description of an 'APPORTIONED' license plate." (Compl. ¶ 16.)

On March 24, 2012, Plaintiff appeared at a hearing before the PVB's Commercial Adjudications Unit to contest the issuance of 38 parking summonses to its trucks, on the ground that the description "IRP" was not an accurate physical description of the Apportioned Plates that the trucks bore. (Compl. ¶ 17.) At this hearing, an administrative law judge ("ALJ") upheld theissuance of the summonses, adjudicated Plaintiff guilty on all summonses, and imposed fines in the total amount of $3,835.00. (Compl. ¶ 20.) On June 26, 2012, Plaintiff appeared at a hearing before the Appeals Board ("Board") of the PVB to appeal that adjudication on the ground that the ALJ had failed to consider the evidence submitted and failed to apply the law, contravening the Vehicle and Traffic Law. (Compl. ¶ 21.) The Board found no error of law or fact and upheld the judgment of the Commercial Adjudication Unit ALJ. (Compl. ¶ 22.)

In October 2012, Plaintiff initiated an Article 78 proceeding in the Supreme Court, New York County, seeking annulment of the final determination of the Board, remission of all fines paid in connection with the 38 summonses challenged, and a declaratory judgment deeming Defendants' policy violative of VTL § 238(2). (Compl. ¶ 23). Plaintiff also sought preliminary and permanent injunctive relief, enjoining Defendants from adjudicating or affirming an adjudication of guilt as to any parking summons on which an Apportioned Plate is described as an IRP Plate, requiring Defendants to dismiss all such summonses before them for adjudication, and vacating and annulling any and all determinations previously made on the basis that "IRP" and "Apportioned" are interchangeable. (Notice of Art. 78 Pet., Exh. B, Stitelman Decl. ("Notice of Pet."), ECF No. 18-2, ¶¶ 4-7.) Finally, Plaintiff sought to certify a class of individuals or entities with such plates, who had received such summonses. (Art. 78 Pet., Exh. B, Stitelman Decl. ("Art. 78 Pet."), ECF No. 18-2, ¶¶ 9-17.)

On March 8, 2013, the Supreme Court, New York County, denied Plaintiff's Article 78 Petition. (Compl. ¶¶ 24.) The Court found:

Pursuant to VTL § 238(2), the parking violation must contain . . . the plate type as shown by the registration plates of the subject vehicle. "If any information which is required to be inserted on a notice of violation is misdescribed the violation shall be dismissed upon application of the person charged with the violation." (VTL §[2-a][b]). . . .

Here, a rational basis exists for the [Appeals Board's] determination affirming [the ALJ's] finding of guilt for the 38 subject parking violation. Respondent annexes the ALJ Manual, which states in relevant part, "'APP' and 'IRP' on the face of the summons is sufficient to establish a prima facie case because these acronyms are used interchangeably." . . . Since the record established that the plate type on the 38 subject parking violations was accurately described as "IRP" and since Petitioner did not present any other defense or evidence to refute the prima facie evidence within the parking violations, the Appeals Board's final determination denying Petitioner's appeal was rational and reasonable.

Nestle Waters N. Am., Inc. v. City of New York, No. 104096-2012, 2013 WL 861330 (N.Y. Sup. Ct. Feb. 28, 2013) (alterations omitted). The Court denied the petition, and denied all other requested relief. Id. It nowhere mentioned the request for class certification. Id.

Plaintiff appealed this decision to the Appellate Division, First Department. (Compl. ¶ 24.) It again challenged the 38 specific summonses at issue, and moved for class certification. (Pl.'s Appeal, Exh. E, Stitelman Decl. ("Pl.'s Appeal"), ECF No. 18-5.) On July 31, 2014, the First Department issued an order reversing the Supreme Court's dismissal of the Article 78 Proceeding, annulling the final determination of the Board, vacating and dismissing the challenged summonses, and declaring that Defendants' "policy of deeming 'IRP' an accurate description of 'Apportioned' license plates issued outside of New York State is violative of § 238 of the Vehicle and Traffic Law." The First Department explained:

The Court of Appeals has required strict compliance with the requirements of VTL § 238(2) . . . holding that the five mandatory identification elements, which may not be omitted from a parking summons if it is to avoid dismissal, may also not be misdescribed. Thus, a misdescription of any of the five mandatory identification elements also constitutes a jurisdictional defect mandating dismissal.

Similarly, this Court is bound by the plain language of VTL § 238(2). We must conclude that the New York City Parking Violations Bureau's policy of deeming "IRP" an accurate description of out-of-state "APPORTIONED" license plates for purposes of adjudicating parking violations violates the statute. . . .

In short, the petition should have been granted because the final determination made by respondent to adjudicate petitioners guilty on each of the summonses was contrary towell established law. Dismissal of the traffic summonses was warranted since they failed to comply with the mandatory requirements of VTL § 238(2).

Nestle Waters N. Am., Inc. v. City of New York, 990 N.Y.S.2d 512, 516 (2014) (internal citations omitted). This decision, too, was silent as to class certification.

On November 10, 2014, Plaintiff served a Notice of Claim upon Defendants, demanding reimbursement of fines paid for 41,800 jurisdictionally defective summonses issued to its trucks, from 2010 until the filing of the Notice. (Compl. ¶ 26.) Plaintiff demanded reimbursement in the amount of $4,101,835,000. (Compl. ¶ 27.) On March 24, 2015, Defendants denied Plaintiff's claim. (Compl. ¶ 28.) This action followed.

II. Procedural Background

Plaintiff initiated this suit on July 2, 2016, bringing claims pursuant to 42 U.S.C. §§ 1983 and 1988 that Defendants violated its Fourteenth Amendment rights to procedural due process and substantive due process. Plaintiff also brings a state law claim of unjust enrichment. Defendants moved to dismiss the action on January 20, 2016. (ECF No. 17.) Plaintiff moved for summary judgment on February 16, 2016. (ECF No. 21.) Each side opposes the other's motion. (ECF Nos. 20, 25.) The Court will begin by considering the motion to dismiss.

LEGAL STANDARD

To survive a motion to dismiss pursuant to Rule 12(b)(6), "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 Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible "when the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). The plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. The court must acceptall factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. See Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d...