VW Credit Leasing, Ltd. v. The City of New York

Background

The court resolved cross-motions for summary judgment in two related cases: No. 22-CV-2310, brought by VW Credit, Inc., and No. 23-CV-856, brought by VW Credit Leasing, Ltd. Both cases challenged New York City’s “Scofflaw” or “Boot-and-Tow” program, which uses booting, towing, storage, and auction procedures to enforce unpaid parking and traffic-ticket judgments. The parties agreed that the legal and factual issues were not materially different from those addressed in the court’s March 11, 2025 decision in a prior related proceeding, and that liability should be decided the same way.

The claims were brought under 42 U.S.C. § 1983, a federal law that allows claims for constitutional violations by state actors. The plaintiffs asserted claims under the Fourth, Fifth, and Fourteenth Amendments, as well as claims under the New York Constitution. They also asserted conversion claims against the towing companies. In No. 22-CV-2310, Five J’s Automotive Ltd. asserted an indemnification crossclaim against the City. Breen Brothers Towing Inc. did not assert an indemnification claim in No. 23-CV-856.

Court’s reasoning

The court adopted the reasoning of its earlier decision because the parties agreed that the cases presented the same material issues. That reasoning held that the City and the participating towing company acted under color of state law in carrying out the program. The court also held that the program deprived lienholders of a protected property interest without giving them any hearing before the vehicle was finally disposed of. Notice and an opportunity to challenge the seizure, detention, and fees before a neutral decisionmaker were constitutionally required.

The court’s earlier reasoning rejected the Fifth Amendment takings claims because the temporary impoundment did not amount to a compensable taking under the circumstances. It also rejected the Fourth Amendment claims because the seizure and impoundment of vehicles to enforce valid parking and traffic-ticket judgments were reasonable. The court had not resolved the appropriate remedies for the due-process violation in the earlier decision, and the May 22 order likewise directed further proceedings concerning remedies and the hearing process.

Rulings

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

In No. 23-CV-856, summary judgment was granted to VW Credit Leasing, Ltd. as to liability on its Fourteenth Amendment claim and was otherwise denied. Summary judgment was granted to the City on the Fourth and Fifth Amendment claims and was otherwise denied. Summary judgment was granted to Breen Brothers Towing Inc. on the Fourth and Fifth Amendment claims and was otherwise denied.

The order did not grant summary judgment on the New York Constitution claims. It also did not finally resolve compensatory damages or the details of the hearing process required by the Fourteenth Amendment. In the related case, the court dismissed Five J’s’ indemnification claim without prejudice because the claim had not yet accrued. Judge Vernon S. Broderick directed the parties to proceed with further submissions concerning remedies and the required review process.