Opinion ID: 2681
Heading Depth: 3
Heading Rank: 1

Heading: The City must permit Ford Motor Credit to participate in forfeiture proceedings.

Text: Pursuant to New York City regulations, the City must provide the claimant and any other interested persons with an adequate opportunity to be heard before it may forfeit a seized vehicle. 38 R.C.N.Y. § 12-36(b) (emphasis added). The district court interpreted the term interested persons to include secured creditors like Ford Motor Credit. See Ford Motor Credit, 394 F.Supp.2d at 610-11. We agree. Section 12-36 explicitly applies only to the driver of a seized vehicle. Compare 38 R.C.N.Y. § 12-36, with 38 R.C.N.Y. § 12-31 (defining a claimant as the person from whose person or possession property . . . was taken). However, the canon of constitutional avoidance, see Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988); Courtesy Sandwich Shop, Inc. v. Port of N.Y. Auth., 12 N.Y.2d 379, 240, N.Y.S.2d 1, 190 N.E.2d 402, 405 (1963), requires that the term interested persons be given a broad construction. For instance, an innocent owner must surely be an interested person. See Prop. Clerk v. Covell, 139 Misc.2d 707, 528 N.Y.S.2d 299, 301 (1988); see also Prop. Clerk v. Pagano, 170 A.D.2d 30, 573 N.Y.S.2d 658, 661 (App.Div.1991); Krimstock I, 306 F.3d at 57 n. 18. Were an innocent owner not an interested person, 38 R.C.N.Y. § 12-36 might well be unconstitutional. [9] The City argues that while we should construe the term interested persons in § 12-36 broadly, it does not include Ford Motor Credit within its ambit; the City contends that Ford Motor Credit cannot be an interested person because it has [no] information to contribute on the illegal use of [a seized] vehicle. See Appellants' Br. at 34. Even accepting the City's premisethat only those with something to contribute to the forfeiture proceeding can be interested personsits argument fails. Were Ford Motor Credit permitted to participate in forfeiture proceedings, it could protect its interest in the present value of a seized vehicle in several ways: it could expedite the litigation by moving the court to dismiss the action for failure to prosecute, see Duck Jae Lee, 702 N.Y.S.2d at 795; cf. United States v. Eight Thousand Eight Hundred & Fifty Dollars ($8,850) in U.S. Currency, 461 U.S. 555, 569, 103 S.Ct. 2005, 76 L.Ed.2d 143 (1983) (noting that a claimant can file an equitable action seeking an order compelling the filing of [a] forfeiture action or return of the seized property (citing Slocum v. Mayberry, 15 U.S. (2 Wheat.) 1, 10, 4 L.Ed. 169 (1817))), and also perhaps by seeking an order dismissing the case on account of the vehicle owner's delinquency in meeting deadlines, cf. N.Y.C.P.L.R. 3216; Andrea v. Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape Architects, P.C., 5 N.Y.3d 514, 806 N.Y.S.2d 453, 840 N.E.2d 565, 569 (2005) (Litigation cannot be conducted efficiently if deadlines are not taken seriously. . . . ). [10] The City also argues that Ford Motor Credit need not be counted an interested person because it could protect its interest in the present value of a seized vehicle by obtaining title to the vehicle. However, a party's ability to take steps to safeguard its interests does not relieve the State of its constitutional obligation. Mennonite Bd. of Missions, 462 U.S. at 799, 103 S.Ct. 2706. B. The City must commence forfeiture proceedings within twenty-five days from the date Ford Motor Credit makes a demand on a vehicle, provided that a claimant would otherwise be entitled to make a demand on the vehicle. Unlike § 12-36, 38 R.C.N.Y. § 12-31 is clear on its face: Ford Motor Credit is not a claimant and may not demand a vehicle's return. We must therefore consider whether the Fourteenth Amendment requires that Ford Motor Credit be treated as a claimant for purposes of triggering the City's duty to commence a forfeiture action within twenty-five days. [11] In answering this question, we have two analytical lenses at our disposal. In $8,850, the Supreme Court applied the four-factor test propounded first in Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), to a challenge on due process grounds to the length of time between the seizure of property and the initiation of a forfeiture proceeding. See 461 U.S. at 565-70, 103 S.Ct. 2005; see also United States v. Banco Cafetero Pan., 797 F.2d 1154, 1163 (2d Cir.1986) (applying Barker test). Yet in Krimstock I, we held that the Mathews v. Eldridge test applied if property holders wished to challenge the legitimacy of the City's retention and forfeiture of their property. See 306 F.3d at 68. It is not clear whether we should apply Barker or Mathews to this case. On the one hand, Ford Motor Credit seeks principally to expedite the forfeiture process, see, e.g., Appellee's Br. at 29-31, and the district court appears to have relied on Barker, 407 U.S. 514. Moreover, the second Mathews factorthe fairness and reliability of the existing . . . procedures, and the probable value, if any, of additional procedural safeguards, 424 U.S. at 343, 96 S.Ct. 893is hard to apply, since the gravamen of Ford Motor Credit's complaint is not that the City cannot forfeit seized vehicles, but rather that it must do so more quickly. On the other hand, the fourth Barker factorprejudice to the defendant . . . [such that] the claimant [is hampered] in presenting a defense on the merits, $8,850, 461 U.S. at 564, 569, 103 S.Ct. 2005is equally hard to apply in this case. And both the City and Ford Motor Credit seem to agree that Mathews should govern. See Appellants' Br. at 39; Appellee's Br. at 16. We need not decide the question, however, since § 12-31 is unconstitutional under either application. As the district court explained, the City has caused substantial delays, 394 F.Supp.2d at 614, in violation of Barker. Consideration of the Mathew factors(1) the private interest affected; (2) the risk of erroneous deprivation through the procedures used and the value of other safeguards; and (3) the government's interest, Krimstock I, 306 F.3d at 60yields the same conclusion. First, Ford Motor Credit's interest in the present value of a seized vehicle, while not as great as the interest of the vehicle's owner in possession of a seized vehicle because seized vehicles are not used by Ford Motor Credit as a mode of transportation . . . [or] the means to earn a livelihood, id. at 61is still considerable. Indeed, the Supreme Court has affirmed the importance of the income stream derived from ownership of property. See United States v. James Daniel Good Real Prop., 510 U.S. 43, 54, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993) (noting that Good was renting his home to tenants, but explaining that even if the tangible effect of the seizure was limited to taking the $900 a month he was due in rent[,] . . . it would not render the loss insignificant or unworthy of due process protection); see also Doehr, 501 U.S. at 12, 111 S.Ct. 2105. The second Mathews factor also weighs in Ford Motor Credit's favor, to the extent it can be applied. The owner of a vehicle, if he has in fact used the vehicle in the commission of a crime, has little incentive to demand that the City begin forfeiture proceedings. The risk of delay under the current procedures is thus substantial. Third and finally, the government's interest in refusing to honor a demand that it commence a forfeiture action (after the conclusion of criminal proceedings) is small. Indeed, one would think that the City would wish to prosecute forfeiture cases rapidly, since it obtains at least ten percent of the eventual sale proceeds. Cf. James Daniel Good Real Prop., 510 U.S. at 55-56, 114 S.Ct. 492 (noting a greater risk of erroneous deprivation where the government has a pecuniary interest in retaining property). We thus agree with the district court that the City has a constitutional obligation to institute forfeiture proceedings within a reasonable time when an interested party, such as a [secured creditor] like Ford [Motor] Credit, seeks a disposition with respect to a vehicle in which it holds a cognizable property interest. 394 F.Supp.2d at 615. [12] We note only that we read the district court's opinion to afford Ford Motor Credit the same rights in this respect as a claimant, and no more. [13] In sum, we agree with the district court that henceforth, when Ford Motor Credit has a security interest in a seized vehicle, the City must (1) permit Ford Motor Credit to participate as a party in the forfeiture action and (2) commence the forfeiture action within twenty-five days from the date that Ford Motor Credit makes a demand on the vehicle, provided that a claimant would otherwise be entitled to make a demand on the vehicle.