OSI LLC v. City of New York
- Andrew Carter
- 1:22-cv-10921
- U.S. District Court · Southern District of New York
- 12
In OSI LLC v. City of New York, Judge Carter dismissed OSI’s due-process claims with prejudice, finding existing hearings and appeals provided enough process.
OSI LLC’s federal and New York State procedural due process claims against the City of New York and the New York City Department of Buildings were dismissed with prejudice; the case was closed.
What happened
OSI LLC v. City of New York concerned civil penalties imposed by New York City’s Department of Buildings after OSI allegedly failed to correct immediately hazardous building violations. OSI argued that the penalties were imposed without a separate hearing or appeal and violated procedural due process under the U.S. and New York State Constitutions.
The court ruled that OSI had meaningful opportunities to challenge the underlying violations through hearings before the Office of Administrative Trials and Hearings, appeals to the OATH Appeals Board, and judicial review under an Article 78 proceeding. It concluded that these procedures provided sufficient due process and that OSI had not plausibly stated a claim.
Judge Carter granted Defendants’ motion to dismiss the First Amended Complaint with prejudice, denied further amendment as futile, and directed the Clerk to close the case.
The detailed version
- OSI LLC v. City of New York · No. 1:22-cv-10921
- Andrew Carter
- Mar. 27, 2025
Background
OSI LLC sued the City of New York and the New York City Department of Buildings (DOB), alleging violations of procedural due process under the U.S. Constitution and the New York State Constitution. Defendants moved to dismiss the First Amended Complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.
The case concerned “HAZ Penalties” that DOB automatically issued when a respondent failed to certify correction of immediately hazardous building violations by the deadline. OSI alleged that these penalties were separate from the underlying summonses and were imposed without an additional hearing or appeal. In 2021, DOB issued two summonses to OSI concerning two violations at the subject property and later issued civil penalties totaling $6,000 for failing to certify correction. OSI did not pursue administrative or judicial appeals of those decisions.
Court’s Analysis
The court first rejected any renewed challenge to the notice provided by the underlying summonses. It noted that OSI was no longer disputing the sufficiency of that notice and that the court had previously determined that the summonses provided constitutionally sufficient notice.
The court then concluded that process had been provided. Although OSI argued that it was entitled to a separate hearing concerning the HAZ Penalties, the court found that the penalties were connected to the underlying summonses. OSI had opportunities to contest those summonses before the Office of Administrative Trials and Hearings, appeal to the OATH Appeals Board, and seek Article 78 judicial review. The court held that these opportunities were sufficient even though there was no separate post-issuance OATH hearing specifically for the HAZ Penalties.
The court also applied the three-factor balancing test from Mathews v. Eldridge. It found that the $6,000 penalty represented a substantial property interest, favoring OSI. But it found that the existing procedures created little risk of an erroneous deprivation because OSI had access to hearings, appeals, and judicial review. The court also found that the government’s interest in promptly addressing immediately hazardous building violations weighed slightly in favor of OSI, assuming an additional procedure would not create a significant burden. On balance, however, the court concluded that OSI had not plausibly pleaded a federal or state procedural due process violation.
Disposition
The court granted Defendants’ motion to dismiss the First Amended Complaint with prejudice. It denied further leave to amend because OSI had already amended once, had not requested another amendment or identified additional facts, and any further amendment would be futile. The Clerk was directed to terminate the motion at ECF No. 31 and close the case.
Date Note
The supplied case information lists March 27, 2025 as the filing date, while the opinion itself is dated March 20, 2025.
Read the full 12-page opinion on CourtListener, the free public archive maintained by the Free Law Project.