Opinion ID: 2490
Heading Depth: 3
Heading Rank: 2

Heading: Was Spinelli Denied Due Process?

Text: The district court also concluded that Spinelli received all the process that was due when the City deprived her of her gun dealer license and firearms. The touchstone of due process, of course, is the requirement that `a person in jeopardy of serious loss (be given) notice of the case against him and opportunity to meet it.' Mathews, 424 U.S. at 348-49, 96 S.Ct. 893 (quoting Joint Anti-Fascist Comm. v. McGrath, 341 U.S. 123, 171-72, 71 S.Ct. 624, 95 L.Ed. 817 (1951) (Frankfurter, J., concurring)); see also Goldberg v. Kelly, 397 U.S. 254, 267, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) (requiring an opportunity to be heard ... at a meaningful time and in a meaningful manner) (internal quotation marks and citations omitted). However, due process is flexible and calls for such procedural protections as the particular situation demands. Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). The `timing and nature of the required hearing will depend on appropriate accommodation of the competing interests involved.' Krimstock v. Kelly, 306 F.3d 40, 51-52 (2d Cir.2002) (quoting Logan v. Zimmerman Brush Co., 455 U.S. 422, 434, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982)). In determining how much process is due, a court must weigh (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. Mathews, 424 U.S. at 335, 96 S.Ct. 893. Applying the Mathews test to this case, the district court found that although Spinelli had some private interest in the vouchered guns taken by the City, the City gave Spinelli an adequate notice and opportunity to be heard by negotiating with her counsel over the deprivation, which resulted in the reinstatement of her license and return of her firearms. The district court also found that there were `exigent' circumstances justifying the City's conduct, which argued strong[ly] in favor of the public interest. Thus, the district court concluded that the Mathews factors weighed in favor of the City, and dismissed Spinelli's due process claim. On appeal, Spinelli challenges the district court's Mathews analysis, arguing that (1) she had a strong interest in retaining her license and firearms, (2) there was a high risk of erroneous deprivation because the City provided her with neither a meaningful opportunity for a hearing nor adequate notice of the grounds for her suspension, and (3) the City's claim of an urgent need to seize the firearms and suspend her license was insufficient to justify denying her a pre-deprivation hearing, much less a post-deprivation one.
We disagree with Spinelli's contention that she was entitled to pre-deprivation due process. [A]lthough notice and a pre[-] deprivation hearing are generally required, in certain circumstances, the lack of such pre[-]deprivation process will not offend the constitutional guarantee of due process, provided there is sufficient post[-]deprivation process. Catanzaro v. Weiden, 188 F.3d 56, 61 (2d Cir.1999). [N]ecessity of quick action by the State or the impracticality of providing any meaningful pre[-]deprivation process, when coupled with the availability of some meaningful means by which to assess the propriety of the State's action at some time after the initial taking, can satisfy the requirements of procedural due process. Id. (internal quotation marks and citation omitted). Here, exigent circumstances necessitating very prompt action on the part of the City were sufficient to justify the City's failure to provide Spinelli with pre-deprivation notice or a hearing. United States v. All Assets of Statewide Auto Parts, Inc., 971 F.2d 896, 903 (2d Cir.1992) (citing Fuentes, 407 U.S. at 91-92, 92 S.Ct. 1983). The City and the public have a strong interest in ensuring the security of gun shops, which was heightened further in the days immediately following the September 11th terrorist attacks, when the dimensions of the terrorist threat were unknown. Additionally, the search and the suspension were taken pursuant to the City's regulatory authority; the search was conducted pursuant to 38 RCNY § 4-06(a)(3), and the suspension was authorized by 38 RCNY § 1-04(f). See All Assets, 971 F.2d at 903. The record demonstrates that the City had sufficient cause to take prompt action to address the security infractions at Olinville observed by Officer McSherry. Spinelli, while downplaying these infractions, has never disputed them, and indeed, took strong measures to remedy them. Were we to conclude that prompt action was not required, we would tie the hands of police faced with obvious security lapses at gun stores until a hearing could be held, and thereby substantially undermine the state interest in public safety. Mackey v. Montrym, 443 U.S. 1, 18, 99 S.Ct. 2612, 61 L.Ed.2d 321 (1979). Under the circumstances presented to the police on October 8, the City was not required to provide Spinelli with pre-deprivation due process before suspending her license and seizing her firearms. However, our inquiry does not end there.
Spinelli's primary argument on appeal is that the City never provided her with the opportunity for a meaningful post-deprivation notice and hearing despite her entitlement to one under the City's own regulations. Spinelli further alleges, and the City essentially concedes, that in practice the City does not provide licensees with notice or an opportunity for a formal hearing until after the police investigation is completed, which the City acknowledges can take months or years. Again, we turn to the Mathews factors, now in the post-deprivation context.
First, the private interest implicated in this case is strong. Spinelli's private interest is the interest in operating a business and, stated more broadly, pursuing a particular livelihood. See Tanasse v. City of St. George, 172 F.3d 63 (10th Cir.1999) (citing Dixon v. Love, 431 U.S. 105, 113, 97 S.Ct. 1723, 52 L.Ed.2d 172 (1977)). The Supreme Court has repeatedly recognized the severity of depriving someone of his or her livelihood. FDIC v. Mallen, 486 U.S. 230, 243, 108 S.Ct. 1780, 100 L.Ed.2d 265 (1988). Moreover, [b]ecause of the nature of this interest, a licensee erroneously deprived of a license cannot be made whole simply by reinstating the license. Tanasse, 172 F.3d 63. In fact, the interim period between erroneous deprivation and reinstatement can be financially devastating to the licensee. Id. The district court's conclusion that the extent of [Spinelli's] interest [in her deprived property] is not entirely clear to the Court, led it to erroneously discount Spinelli's interest in both her gun dealer license and her seized firearms. Without firearms to sell, Spinelli could not do business as a gun dealer at all, whether or not she had a dealer license. The first Mathews factor favors Spinelli.
Next, we consider the risk of an erroneous deprivation under the procedures used by the City, along with the probable value, if any, of additional or substitute procedural safeguards. Mathews, 424 U.S. at 335, 96 S.Ct. 893. Spinelli argues that the post-deprivation procedures used by the City did not adequately afford her due process because they failed to provide either adequate notice or a meaningful opportunity to be heard in a sufficiently timely manner. We agree.
Notice, to comply with due process requirements, ... must set forth the alleged misconduct with particularity. In re Gault, 387 U.S. 1, 33, 87 S.Ct. 1428, 18 L.Ed.2d 527 (1967) (internal quotation marks omitted). The particularity with which alleged misconduct must be described varies with the facts and circumstances of the individual case; however, due process notice contemplates specifications of acts or patterns of conduct, not general, conclusory charges unsupported by specific factual allegations. The degree of required specificity also increases with the significance of the interests at stake. Here, these interests, implicating the practice of one's chosen profession, Galvin v. N.Y. Racing Ass'n, 70 F.Supp.2d 163, 176 (E.D.N.Y.1998), are substantial, Barry, 443 U.S. at 64, 99 S.Ct. 2642. The notice actually provided in this case was constitutionally inadequate. The regulations specified that a license suspension will result in the issuance of a Notice of Determination Letter to the licensee, which shall state in brief the grounds for the suspension or revocation and notify the licensee of the opportunity for a hearing. 38 RCNY § 1-04(f). Had this regulation been complied with, the notice might have been sufficient, depending on the specificity of the grounds provided and the promptness of the hearing. The cursory letters sent to Spinelli, however, only informed her of the license suspension and the status of the investigation. Beyond the conclusory statement that security at Olinville was inadequate, there was no specificity as to the actual infractions. Spinelli was left to guess at the security breaches to which the letters referred. The notice given to Spinelli plainly failed to reasonably ... convey the required information that would permit her to present [her] objections to the City. Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950). The City relies on the fact that Chambers, Spinelli's able counsel, through successful investigation, was able to determine the factual nature of the charges. But adequate notice consists of more than not obstructing a lawyer's investigation. The fact that Spinelli's counsel eventually learned of the specific nature of the charges after meeting on various occasions with the City does not obviate the City's failure to provide adequate notice of those charges. The City has advanced no legitimate reason for not immediately providing Spinelli with the information she needed to prepare meaningful objections or a meaningful defense. [4] Notifying Spinelli of the specific security breaches at Olinville would have entailed little or no administrative inconvenience to the City; indeed, simply attaching Officer McSherry's report to the letters would have sufficed. The notice provided in this case was scarcely more than a gesture on the City's part, see Luessenhop v. Clinton County, N.Y., 466 F.3d 259, 269 (2d Cir.2006), and was not constitutionally adequate.
Despite the inadequate notice, Spinelli, with counsel's assistance, was able to reinstate her gun dealer license 58 days after its suspension. The City argues that, because Spinelli was able to have her license suspension lifted and to retrieve her property in less than two months, her due process rights were not violated. This is a non-sequitur. Spinelli's eventual success did not result from the City's affording her due process, but despite its absence. The City contends that because Spinelli voluntarily opted not to pursue a formal hearing through the administrative process, and instead chose to have her attorney negotiate with the City, she cannot challenge the City's process, which she never utilized. We do not think that Spinelli's being forced into self-help by the inadequacy of process can bar her from pressing this claim. The unstated premise of the City's argument is that Spinelli could have received a prompt hearing if she had wanted one. In fact, the contrary is true. The administrative hearing process was not available to Spinelli during the City's pending investigation into McSherry's report. Both Sergeant Kaplon, the officer in charge of the investigation, and Margaret Shields, a hearing officer in the License Division, testified that Spinelli would not have been entitled to a hearing until the completion of the investigation into McSherry's report, which Shields conceded could take months to... years to decide. Furthermore, although due process may tolerate some period of delay between a deprivation of property and a hearing, there is no justification for indeterminately delaying a hearing for a person in Spinelli's circumstances while the investigation runs its course. In Mallen, the Supreme Court held that, [i]n determining how long a delay is justified in affording a post-suspension hearing and decision, it is appropriate to examine the importance of the private interest and the harm to this interest occasioned by delay; the justification offered by the Government for delay and its relation to the underlying governmental interest; and the likelihood that the interim decision may have been mistaken. 486 U.S. at 242, 108 S.Ct. 1780; see id. (noting that the significance of such a delay [on due process] cannot be evaluated in a vacuum). Here, the City's blanket policy of only providing a hearing after the investigation is completed cannot be squared with due process. As we have noted, in this case the private interest was strong, and the City's delay in providing Spinelli with a prompt hearing while her business was closed threatened significant financial loss over an extended period. The City's concession that an investigation can take months to years to decide, negates any claim that Spinelli's investigation could be completed in a reasonable amount of time. As a blanket proposition, where livelihoods may be at stake and the timing is subject to the competences of varying investigators, the holding of a hearing possibly years after a license suspension cannot amount to a justif[iable] ... delay. Id. See Cain v. McQueen, 580 F.2d 1001, 1006 (9th Cir.1978) (plaintiff's due process rights violated where school district delayed formal hearing for two years); Brown v. Bathke, 566 F.2d 588, 593 (8th Cir.1977) (same). Nor does such a delay serve any important underlying governmental interest. Mallen, 486 U.S. at 242, 108 S.Ct. 1780. In fact, we believe the contrary to be true: Permitting a licensee both to promptly join issue with the grounds for the investigation and to present her views advances the City's understanding of the situation while facilitating prompt remediation, all in the public interest. The usefulness of a prompt hearing is exemplified by the instant casehad Spinelli not been able to afford an attorney, the City would have incurred significant costs by investigating the Olinville security lapses, only to determine months or years later that Spinelli could have remedied the situation with a few basic improvements to Olinville. In the meantime, the delay would have wiped out Spinelli's livelihood. We have no doubt that the delay conceded by the City would have violated Spinelli's due process rights. But what about the actual delay in this case that was limited to fifty-eight days due to Spinelli's self-help? Notwithstanding that ultimately it did not take years for the City to restore Spinelli's license and return her firearms, we conclude that the delay Spinelli actually experienced still exceeded the bounds of due process. [E]ven a brief and provisional deprivation of property pending judgment is of constitutional importance. Krimstock, 306 F.3d at 51-52; see Fuentes, 407 U.S. at 84-85, 92 S.Ct. 1983 ([I]t is now well settled that a temporary, non[-]final deprivation of property is nonetheless a `deprivation' in the terms of the Fourteenth Amendment.); see also United States v. Monsanto, 924 F.2d 1186, 1192 (2d Cir. 1991) (en banc) (noting that a temporary and non[-]final removal of a defendant's assets, pursuant to a federal criminal forfeiture statute and pending resolution of the criminal case, is, nonetheless, a deprivation of property subject to the constraints of due process) (quotation marks omitted). Thus, once the City took possession of Spinelli's property pending investigation, it was incumbent upon the City to provide a prompt hearing. The fact that Spinelli was able to retain an attorney familiar with the licensing system does not cure the City's failure to provide constitutionally adequate process by which Spinelli could be heard. In sum, nothing about the process employed by the City in this case provided any safeguards [against] an unacceptable risk of arbitrary and erroneous deprivations of personal liberties. Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748, 793, 125 S.Ct. 2796, 162 L.Ed.2d 658 (2005) (Stevens, J., dissenting) (internal quotation marks and alterations omitted). The fact that through Spinelli's efforts the period of her deprivation was reduced to fifty-eight days neither cures the constitutional infirmity, nor erases the risk of erroneous deprivation inherent in the City's policy. Thus, the second Mathews factor also favors Spinelli.
The third Mathews factor examines the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Mathews, 424 U.S. at 335, 96 S.Ct. 893. The district court concluded that the third Mathews factor weighed in the City's favor because, in the post-September 11th environment, the City had to act quickly in response to the perceived security lapses. According to the district court, the seizure of the guns was necessary to secure an important public interest, [and] there was a need for prompt action [by the NYPD]. The district court, however, applied the third Mathews factor by weighing the City's interest only with respect to pre-deprivation due process, not post-deprivation due process. In the latter context, the existence of exigent circumstances warranting a deprivation before holding a hearing is irrelevant. The relevant inquiry is whether the City had a legitimate interest in not providing Spinelli with meaningful post-deprivation due process. Our decision in Krimstock v. Kelly is instructive. The Krimstock plaintiffs challenged a City statute that permitted the City to hold motor vehicles that were seized as a result of DWI offenses, but had not yet been subject to an actual forfeiture proceeding (i.e., post-seizure, pre-judgment vehicles). 306 F.3d at 48. In assessing the third Mathews factor, the City argued that drivers should not be permitted to challenge the validity of the City's retention of their vehicles prior to final judgment, because (1) the drivers could sell the vehicles prior to the forfeiture proceedings, id. at 64-65, and (2) the possibility existed that the drivers might commit another DWI, creating an executive urgency, id. at 66. We concluded that there were other means of ensuring that the vehicles would not be sold prior to forfeiture, id. at 65, and that the urgency that permitted the City to seize the vehicles without a pre-deprivation hearing did not extend to the post-deprivation context, because by that time the drivers would have regained their sobriety, thereby eliminating the executive urgency, id. at 66. We held that, promptly after their vehicles are seized ... as alleged instrumentalities of crime, plaintiffs must be given an opportunity to test the probable validity of the City's deprivation of the vehicles. Id. at 70. Here, the City's asserted reasons for denying Spinelli a prompt post-deprivation hearing are similar to those it advanced in Krimstock, namely, that the urgent security situation in post-September 11th New York City required the suspension of Spinelli's license and seizure of her firearms without providing due process. But this logic only explains the absence of a pre-deprivation hearing; it does not explain why Spinelli should not be allowed to promptly challenge the City's actions after the suspension and seizure. The City's policy is to deny a dealer such as Spinelli her livelihood for an indeterminate period, possibly years, even if the circumstances that led to the City's action have been remedied or never existed at all. Not only is there no benefit to the City from such a hearing delay pending investigation, but the unnecessary deprivation of the citizen's livelihood actually incrementally threatens to harm the City, which is deprived of sales taxes, while increasing the likelihood of the administrative and fiscal burdens of an unnecessary investigation. Thus, the third Mathews factor favors Spinelli.