VW Credit, Inc. v. The City of New York

Background

These related cases concerned New York City's “Scofflaw” or “Boot-and-Tow” program, which enforces unpaid parking and traffic-camera tickets. Under the program, the City boots and tows vehicles associated with more than $350 in unpaid judgments and may auction unclaimed vehicles. Vehicle owners and lienholders may recover vehicles by satisfying conditions that include paying seizure, towing, and storage fees.

VW Credit, Inc. and VW Credit Leasing, Ltd. brought constitutional claims against the City and towing companies. In the first case, Five J's Automotive Ltd. also asserted a crossclaim against the City for indemnification. In the second case, Breen Brothers Towing Inc. did not assert an indemnification claim. The parties filed cross-motions for summary judgment, which asks whether the undisputed facts require judgment for one side as a matter of law.

The court stated that the legal issues and factual circumstances in these cases were not materially different from those addressed in its March 11, 2025 decision in a prior related proceeding. The parties agreed that the liability outcome should be the same. The court therefore attached that earlier decision and adopted the same liability results for these cases.

Fourteenth Amendment Due Process

The court granted summary judgment to both plaintiffs on liability under the Fourteenth Amendment. It concluded that a vehicle lienholder has a protected property interest in the vehicle's value and that the City and towing companies deprived the plaintiffs of that interest by conditioning release on payment of fees without providing a hearing before a neutral decisionmaker.

The court rejected the argument that notice, informal contact with City personnel, or a separate lawsuit was enough. Because the program provided no hearing to challenge the seizure, detention, fees, or auction before the final deprivation, the court held that the program violated due process. The court denied the City’s and towing companies’ motions for summary judgment on this claim.

Fourth and Fifth Amendment Claims

The court granted summary judgment to the City on the plaintiffs’ Fourth Amendment claims and granted summary judgment to Five J’s in the first case and Breen Bros. in the second case on those claims. The court also denied the plaintiffs’ motions on the Fourth Amendment claims. The order adopted the reasoning that seizure and impoundment under the ticket-enforcement program were reasonable and that the program did not create a separate Fourth Amendment claim based solely on continued retention after a lawful seizure.

The court granted summary judgment to the City on the plaintiffs’ Fifth Amendment takings claims and granted summary judgment to Five J’s and Breen Bros. on those claims. The plaintiffs’ motions on the takings claims were denied. The court concluded that the temporary impoundments did not constitute compensable takings under either a regulatory-taking or physical-taking theory.

Conversion and Indemnification

In the first case, the order otherwise denied Five J’s motion for summary judgment, which left the plaintiff’s conversion claim unresolved. The attached reasoning explains that a towing company’s lawful initial possession does not automatically defeat a conversion claim if it later refuses a demand to return the vehicle, and that the record did not establish as a matter of law that Five J’s had superior rights based on a towing lien.

The order granted the City summary judgment on Five J’s indemnification claim in the first case. The order did not grant summary judgment to the defendants on the plaintiffs’ remaining claims; those motions were otherwise denied.

Disposition

For No. 22-CV-2310, summary judgment was granted to VW Credit, Inc. as to liability on its Fourteenth Amendment claim and otherwise denied. Summary judgment was granted to the City on the Fourth and Fifth Amendment claims and Five J’s indemnification claim and otherwise denied. Summary judgment was granted to Five J’s on the Fourth and Fifth Amendment claims and otherwise denied.

For No. 23-CV-856, summary judgment was granted to VW Credit Leasing, Ltd. as to liability on its Fourteenth Amendment claim and otherwise denied. Summary judgment was granted to the City on the Fourth and Fifth Amendment claims and otherwise denied. Summary judgment was granted to Breen Bros. on the Fourth and Fifth Amendment claims and otherwise denied. Judge Vernon S. Broderick directed the Clerk of Court to docket the order in both cases and terminate the listed motions.