Ford Motor Credit Co. v. NYC Police Det, No. 06-4600 (2d Cir. 2007)

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06-4600-cv(L) Ford Motor Credit Co. v. NYC Police Dep t 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 2006 (Argued: February 12, 2007 Decided: September 24, 2007) Docket Nos. 06-4600-cv(L); 06-4861-cv(XAP) -----------------------------------------------------x FORD MOTOR CREDIT CO., Plaintiff-Appellee-Cross-Appellant, -- v. -NYC POLICE DEPARTMENT, PROPERTY CLERK, CITY OF NEW YORK, Defendants-Appellants-Cross-Appellees. -----------------------------------------------------x B e f o r e : 23 WALKER and HALL, Circuit Judges, and COTE, District Judge.* Appeal by the City of New York from a judgment of the United 24 States District Court for the Southern District of New York 25 (Sidney H. Stein, Judge) requiring, when Ford Motor Credit 26 Company possesses a valid security interest in a vehicle subject 27 to forfeiture pursuant to Title 38, Section 12-36 of the Rules of 28 the City of New York, that the City (1) permit Ford Motor Credit 29 to participate as a party in the forfeiture action and (2) 30 commence the forfeiture action within twenty-five days from the 1 2 3 * The Honorable Denise Cote, of the United States District Court for the Southern District of New York, sitting by designation. -1- 1 date that Ford Motor Credit makes a demand on the vehicle, 2 provided that a claimant would otherwise be entitled to make a 3 demand on the vehicle. 4 Cross-appeal by Ford Motor Credit from the district court s 5 judgment (1) permitting the City to deduct ten percent of the 6 gross proceeds of the sale of a vehicle deemed forfeited and (2) 7 permitting the City to require Ford Motor Credit to execute a 8 release and indemnification agreement in the City s favor before 9 the City releases the remaining ninety percent of the proceeds, 10 the latter issue having been resolved by agreement of the parties 11 reached after oral argument. 12 AFFIRMED. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 JANET L. ZALEON, Assistant Corporation Counsel (Michael A. Cardozo, Corporation Counsel of the City of New York, Kristen M. Helmers, Sheryl R. Neufeld, of counsel, on the brief), New York, NY, for Defendants-AppellantsCross-Appellees. DAVID L. TILLEM and KATHLEEN DALY, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, White Plains, NY, for Plaintiff-Appellee-CrossAppellant. JOHN M. WALKER, JR., Circuit Judge: The state has long had the power to forfeit property used -2- 1 for criminal purposes, but the power s pedigree does not excuse 2 the City of New York s continued use of antiquated rules to 3 govern its exercise. 4 seize tax-delinquent distilleries without a hearing because its 5 need for funds was urgent, Springer v. United States, 102 U.S. 6 586, 593-94 (1881), the City now seeks to preclude Ford Motor 7 Credit Company ( Ford Motor Credit ) from participating in 8 forfeiture proceedings because the City is in no hurry. 9 may not do. 10 Where the federal government once sought to This it We therefore affirm the district court s considered judgment in all respects. 11 BACKGROUND 12 Defendant-Appellant City of New York1 has authorized its 13 police department to seize any motor vehicle that is suspected 14 of having been used as a means of committing crime or employed in 15 aid or furtherance of crime, N.Y. City Admin. Code § 14-140(b), 16 as the first step toward obtaining title to the vehicle through 17 civil forfeiture, Krimstock v. Kelly (Krimstock I), 306 F.3d 40, 18 44 (2d Cir. 2002). 19 after affording notice of the seizure to various interested 20 parties, including in many cases the holder of a security 21 interest in the vehicle, the vehicle s owner or driver is given 22 an opportunity to test the probable validity of the City s 1 2 3 Shortly after the City seizes a vehicle, and 1 We use the term the City as shorthand for the various defendants to this action, including the New York City Police Department and the Property Clerk of the City of New York. -3- 1 deprivation of [the] vehicle[] pending adjudication of the 2 City s forfeiture case. 3 City also wishes to retain the vehicle as arrest evidence or 4 trial evidence pending conclusion of a criminal proceeding, 5 see 38 R.C.N.Y. § 12-31; Krimstock v. Kelly (Krimstock III),2 464 6 F.3d 246 (2d Cir. 2006), it may do so, see Krimstock III, 464 7 F.3d at 255; N.Y. City Admin. Code § 14-140(g); 38 R.C.N.Y. § 12- 8 36(a). 9 Krimstock I, 306 F.3d at 70. If the After what is now termed a Krimstock hearing, if the City 10 can justify the continued retention of a seized vehicle, either 11 because it is likely to prevail in the eventual forfeiture action 12 or because it wishes to retain the vehicle as evidence against 13 the owner or driver, it generally does not press further for 14 forfeiture until the district attorney s office notifies the City 15 that a criminal case against the vehicle s owner or driver will 16 not be brought or has been concluded.3 17 (providing a method for obtaining a district attorney s release); 18 cf. County of Nassau v. Canavan, 802 N.E.2d 616, 623 (N.Y. 2003) 19 (discussing a similar Nassau County ordinance and noting that 20 the [forfeiture] action may not be finally resolved for many 1 2 2 1 2 3 3 38 R.C.N.Y. § 12-35(d) Although captioned differently, Jones v. Kelly, 378 F.3d 198 (2d Cir. 2004), is the second episode in the Krimstock saga. Under 38 R.C.N.Y. § 12-34(a), a person may also request that the district attorney release his vehicle to the Property Clerk prior to the conclusion of the related criminal case. -4- 1 months or years, particularly because upon motion of . . . the 2 County, the action must be stayed during the pendency of the 3 underlying criminal case ). 4 demand a seized vehicle s return. 5 term claimant shall mean [only] the person from whose person 6 or possession [the vehicle] . . . was taken or obtained. 7 If no claimant demands the vehicle s return within 120 days of 8 the conclusion of the criminal case, [t]he [vehicle] may be 9 disposed of by the police property clerk at his leisure. At that point, a claimant may See 38 R.C.N.Y. § 12-31. The Id. Id. § 10 12-32(e)(ii); cf. id. § 12-35(c) (providing that a demand is only 11 timely if made within 120 days after the termination of criminal 12 proceedings ). 13 If, on the other hand, a claimant demands the vehicle s 14 return, the City must institute a forfeiture action within 15 twenty-five days. 16 owner and/or driver is a claimant, see id. § 12-31, any party, 17 including a lienholder, is not [a] lawful claimant if 18 associated with criminal conduct involving use of the vehicle and 19 thereby precluded from recovering the vehicle, see N.Y. City 20 Admin. Code § 14-140(e) (one who suffered [his vehicle] to be 21 used in committing a crime is not a lawful claimant); id. (one 1 2 3 4 5 Id. § 12-36(a).4 4 While only the vehicle s As we explained in Krimstock I, the statute here requires only that a forfeiture proceeding be initiated within 25 days after a claim is made. 306 F.3d at 54 n.14. Ford Motor Credit complains principally that the City is dilatory in prosecuting forfeiture cases once begun. -5- 1 who derives his or her claim in any manner from someone who is 2 not a lawful claimant is also not a lawful claimant); Krimstock 3 I, 306 F.3d at 56 & nn.16-17. 4 and any other interested persons notice of and an opportunity 5 to be heard in the forfeiture proceeding. 6 36(b). 7 return of a vehicle seized by the police.5 8 The City must afford all claimants See 38 R.C.N.Y. § 12- However, only a lawful claimant is entitled to the If the City can show by a preponderance of the evidence that 9 it is entitled to forfeit the vehicle, see id. - because it is 10 connected with criminal activity, thus precluding the existence 11 of a lawful claimant to the vehicle -- it may sell the vehicle 12 at auction. 13 vehicle, the City will remit ninety percent of the auction 14 proceeds to that party. 15 Police Dep t, 394 F. Supp. 2d 600, 604 (S.D.N.Y. 2005). 16 in order to obtain these funds, that person must submit an 17 Auction Proceeds Claim Form and execute a General Release with 1 2 3 4 5 6 7 8 9 10 11 5 If a third party has a security interest in the Ford Motor Credit Co. v. N.Y. City However, This byzantine statutory scheme is a relic of the days when a lawful claimant had to bring a civil action in replevin in order to obtain the return of seized property. Krimstock I, 306 F.3d at 56 n.16. We reiterate what we have said in the past: We see little reason to preserve such a complicated and outdated scheme. See, e.g., Jones v. Kelly, 378 F.3d at 200; Krimstock I, 306 F.3d at 56 n.16 (criticizing cumbersome construction ); Butler v. Castro, 896 F.2d 698, 703 (2d Cir. 1990) (criticizing failure to eliminate the obsolete provisions of the Code ); McClendon v. Rosetti, 460 F.2d 111 (2d Cir. 1972). -6- 1 Indemnification Agreement. 6 2 Id. The forfeiture process - from seizure to auction - takes 3 considerable time. See id. at 613 ( In [some] instances, the 4 Property Clerk held vehicles for extended periods of time without 5 instituting forfeiture proceedings or selling vehicles as 6 abandoned . . . . ); see also Prop. Clerk v. Duck Jae Lee, 702 7 N.Y.S.2d 792, 795 (Sup. Ct. 2000). 8 of a seized vehicle often decreases considerably. 9 I, 306 F.3d at 64 ( [L]oss is felt . . . [as] a vehicle . . . During that time, the value Cf. Krimstock 10 continues to depreciate in value as it stands idle in the police 11 lot. ). 12 Plaintiff-Appellee Ford Motor Credit levies a barrage of 13 challenges to the rules governing forfeiture proceedings. 14 Motor Credit principally complains (1) that the City has refused 15 to consider secured creditors as claimants (or their analogue) 16 - although they are in many cases not lawful claimants - thus 17 precluding them from triggering the City s duty to initiate a 18 forfeiture action within twenty-five days and (2) that the City 19 has refused to consider secured creditors as interested persons 20 entitled to notice of and an opportunity to be heard in 1 2 3 4 5 6 7 6 Ford The General Release with Indemnification Agreement used at the time the City took this appeal reads in pertinent part: [T]he releasors will hold harmless the releasee, the New York City Police Department . . . and indemnify same from any claim or claims that may be asserted against them and for any damage, expense or cost which the New York City Police Department may suffer in connection with [the] property. -7- 1 forfeiture proceedings. Citing Mathews v. Eldridge, 424 U.S. 319 2 (1976), Ford Motor Credit argues that by refusing to permit it to 3 expedite and participate in the forfeiture process, the City has 4 deprived it of property without due process in violation of the 5 Fourteenth Amendment. 6 District of New York (Sidney H. Stein, Judge) entered summary 7 judgment in Ford Motor Credit s favor on these claims.7 8 that (i) Ford Credit is entitled to notice and an opportunity to 9 be heard in any forfeiture action commenced by the City The District Court for the Southern It held 10 concerning a vehicle in which Ford Credit holds a valid security 11 interest; [and] (ii) the City must commence a forfeiture action 12 within a reasonable time upon a demand for a seized vehicle from 13 Ford Credit when Ford Credit holds a valid security interest in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 7 Ford Motor Credit also contends that the City s requirement that secured creditors sign the General Release with Indemnification Agreement shocks the conscience and violates the Fourteenth Amendment. We need not consider this argument, as the parties have agreed to amend the General Release with Indemnification Agreement. Finally, Ford Motor Credit argues that the City s retention of ten percent of the auction proceeds constitutes an excessive fine in violation of the Eighth Amendment (or, in the alternative, also shocks the conscience in violation of the Fourteenth Amendment). While there is cause for some concern over the poor correlation between the administrative costs the City likely incurs and the flat, tenpercent fee it charges secured creditors, we agree with the district court that the imposition of this fee does not violate the Eighth Amendment and that [t]he City s actions do not rise to the conscience-shocking level that would be necessary to support a claim of denial of substantive due process. See Ford Motor Credit, 394 F. Supp. 2d at 617 (internal quotation marks omitted). -8- 1 that vehicle. Ford Motor Credit, 394 F. Supp. 2d at 620. 2 City appealed, and we now affirm. ANALYSIS 3 4 The I. Application of the Due Process Clause 5 In adjudicating due process claims, we consider two 6 distinct issues: 1) whether plaintiffs possess a liberty or 7 property interest protected by the Due Process Clause; and, if 8 so, 2) whether existing state procedures are constitutionally 9 adequate. Kapps v. Wing, 404 F.3d 105, 112 (2d Cir. 2005). The 10 City relies on several state-court cases to argue that Ford Motor 11 Credit lacks a property interest in a seized vehicle distinct 12 from its interest in ninety percent of the proceeds from its 13 eventual, post-forfeiture sale (supplemented, to be sure, by any 14 deficiency judgment Ford Motor Credit may obtain against the 15 vehicle s owner). 16 567, 567 (N.Y. 1993) ( Ford ha[s] no present possessory right in 17 the vehicle, and its remedy . . . is to receive the proceeds from 18 the City s forfeiture sale and to seek any deficiency against the 19 debtor. ); Prop. Clerk v. Foley, 724 N.Y.S.2d 580 (App. Div. 20 2001) (same); Prop. Clerk v. Aquino, 800 N.Y.S.2d 355 (Sup. Ct. 21 2004).8 1 2 3 4 See, e.g., Prop. Clerk v. Molomo, 613 N.E.2d We disagree that Ford Motor Credit s only cognizable 8 [I]n the event of nonforfeiture, the City argues that Ford Motor Credit may sue [vehicles owners] for return of the vehicles or for such other relief as might be provided in their contracts with [those owners]. Foley, 724 N.Y.S.2d at 580-81. -9- 1 property interest is in a vehicle s sale proceeds. 2 reasons that follow, we conclude that Ford Motor Credit also has 3 a property interest in the present value of a seized vehicle. 4 For the three First, a security interest is indisputably a property 5 interest protected by the Fourteenth Amendment. See, e.g., 6 Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798 (1983); 7 United States v. 41741 Nat l Trails Way, 989 F.2d 1089, 1092 (9th 8 Cir. 1993); United States v. 1 St. A-1, 865 F.2d 427, 430 (1st 9 Cir. 1989). A secured creditor has two rights: the contractual 10 right to repayment of the debt owed and the property right to the 11 collateral that secures the debt in the event of non-payment. 12 See Armstrong v. United States, 364 U.S. 40, 46 (1960). 13 while Ford Motor Credit may (conceivably) protect its contractual 14 right to repayment by seeking ninety percent of the proceeds from 15 a vehicle s sale, the City s delays impair Ford Motor Credit s 16 property right, which is in the collateral itself -- the seized 17 vehicle. 18 Takings Clause claim lay where plaintiffs liens remained in 19 effect but were unenforceable against the collateral following 20 forfeiture); see also Matagorda County v. Law, 19 F.3d 215, 225 21 (5th Cir. 1994) ( Unmitigated delay, coupled with diminishment of 22 distinct investment-backed expectations, may, at some point, 23 infringe on the entire bundle of rights . . . . (emphasis 24 omitted)). Thus, Cf. Armstrong, 364 U.S. at 46 (holding that a valid Just as in Winston v. City of New York, where we held -10- 1 that teachers had a state-created property interest in the 2 present value of their pensions, so too, Ford Motor Credit has a 3 property interest in the present value of a seized vehicle. 4 Cf. 759 F.2d 242, 247-48 (2d Cir. 1985). 5 Moreover, at common law, when the government forfeits 6 property, the vesting of its title in the property relates back 7 to the moment when the property became forfeitable. 8 States v. 92 Buena Vista Ave., 507 U.S. 111, 126 (1993). 9 the Takings Clause of the Fifth Amendment, the fair market value 10 of property taken is normally ascertained as of the date of the 11 taking. Yancey v. United States, 915 F.2d 1534, 1543 (Fed. Cir. 12 1990). Thus, were this a Takings Clause case, Ford Motor Credit 13 might well be entitled to the value of its security interest as 14 of the time the City seized the vehicle. 15 this authority with the City s argument that Ford Motor Credit s 16 property interest for due process purposes is limited to the 17 value of the vehicle at the later time of forfeiture. 18 Cf. Shelden v. United States, 7 F.3d 1022, 1031 (Fed. Cir. 1993) 19 (holding that the government must compensate mortgage holders for 20 the depreciation in their security interest between the date the 21 collateral became forfeitable and the date the government 22 obtained a final judgment of forfeiture). 23 24 United Under It is hard to square Our conclusion accords with the Fourth Circuit s decision in In re Metmor Financial, Inc., 819 F.2d 446 (4th Cir. 1987). -11- In 1 that case, the court construed the Comprehensive Drug Abuse 2 Prevention and Control Act, 21 U.S.C. § 881 (1978), which 3 provides for forfeiture of certain drug-related property, to 4 require the government to pay interest on an interest-bearing 5 lien during the pendency of a forfeiture proceeding. 6 Circuit explained, 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 The Fourth [E]ven though forfeiture occurred prior to the actual seizure, the government can succeed to no greater interest in the property than that which belonged to the wrongdoer whose actions have justified the seizure. Ackley purchased the property encumbered by Metmor s secured note, with interest accruing. His equity was subject to an obligation to repay the borrowed principal and to pay interest on the unpaid balance until all of the principal was repaid. The government now attempts to transform that note into one that is unsecured and interest free. Such a result would deprive Metmor of its stake in the forfeited property and would constitute a taking without due process. Id. at 448-49 (emphasis added). The City argues that even if Ford Motor Credit has a 22 property interest in the present value of a seized vehicle, delay 23 does not deprive[] [it] of that interest, Sealed v. Sealed, 332 24 F.3d 51, 55 (2d Cir. 2003) (emphasis added); see also N.Y. State 25 Nat l Org. for Women v. Pataki, 261 F.3d 156, 165 (2d Cir. 2001). 26 Again, we disagree. 27 the claim holder s Fourteenth Amendment rights may be implicated, 28 at least if the claim holder is not in equal part responsible for 29 the delay. 30 required to ensure that . . . innocent owners are not deprived 31 for months or years of cars ultimately proved not to be subject When the state delays resolution of a claim, See Canavan, 802 N.E.2d at 624 ( [A] hearing [is] -12- 1 to forfeiture. ); cf. Connecticut v. Doehr, 501 U.S. 1, 11 (1991) 2 (holding that cloud[ing] title; impair[ing] the ability to sell 3 or otherwise alienate the property; [and] taint[ing] any credit 4 rating constitute deprivations); British Int l Ins. Co. v. 5 Seguros La Republica, S.A., 212 F.3d 138, 141 (2d Cir. 2000) (per 6 curiam) ( [E]ven . . . temporary or partial impairments to 7 property rights . . . are sufficient to merit due process 8 protection. (internal quotation marks and citation omitted)). 9 Here, not only is the present value of the claim diminished by 10 the indeterminacy of its eventual realization, but Ford Motor 11 Credit s property interest in the underlying asset suffers, as 12 the vehicle depreciates over time. 13 II. The Process Ford Motor Credit Is Due 14 15 A. The City must permit Ford Motor Credit to participate in forfeiture proceedings. 16 Pursuant to New York City regulations, the City must 17 provide the claimant and any other interested persons with an 18 adequate opportunity to be heard before it may forfeit a seized 19 vehicle. 20 court interpreted the term interested persons to include 21 secured creditors like Ford Motor Credit. 22 394 F. Supp. 2d at 610-11. 23 38 R.C.N.Y. § 12-36(b) (emphasis added). The district See Ford Motor Credit, We agree. Section 12-36 explicitly applies only to the driver of a 24 seized vehicle. Compare 38 R.C.N.Y. § 12-36, with 38 R.C.N.Y. § 25 12-31 (defining a claimant as the person from whose person or -13- 1 possession property . . . was taken ). However, the canon of 2 constitutional avoidance, see Edward J. DeBartolo Corp. v. Fla. 3 Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575 4 (1988); Courtesy Sandwich Shop, Inc. v. Port of N.Y. Auth., 190 5 N.E.2d 402, 405 (N.Y. 1963), requires that the term interested 6 persons be given a broad construction. 7 innocent owner must surely be an interested person. 8 Clerk v. Covell, 528 N.Y.S.2d 299, 301 (Sup. Ct. 1988); see also 9 Prop. Clerk v. Pagano, 573 N.Y.S.2d 658, 661 (App. Div. 1991); For instance, an 10 Krimstock I, 306 F.3d at 57 n.18. 11 interested person, 38 R.C.N.Y. § 12-36 might well be 12 See Prop. Were an innocent owner not an unconstitutional.9 13 The City argues that while we should construe the term 14 interested persons in § 12-36 broadly, it does not include Ford 15 Motor Credit within its ambit; the City contends that Ford Motor 16 Credit cannot be an interested person because it has [no] 17 information to contribute on the illegal use of [a seized] 18 vehicle. 19 premise -- that only those with something to contribute to the 20 forfeiture proceeding can be interested persons -- its argument 1 2 3 4 5 6 See Appellants Br. at 34. 9 Even accepting the City s Although the Supreme Court has held that a state need not permit an innocent owner defense, see Bennis v. Michigan, 516 U.S. 442 (1996), in Bennis, like every other forfeiture case considered by the Supreme Court, an innocent owner was at least entitled to notice [and] an opportunity to contest the [forfeiture], id. at 446. -14- 1 fails. Were Ford Motor Credit permitted to participate in 2 forfeiture proceedings, it could protect its interest in the 3 present value of a seized vehicle in several ways: it could 4 expedite the litigation by moving the court to dismiss the action 5 for failure to prosecute, see Duck Jae Lee, 702 N.Y.S.2d at 795; 6 cf. United States v. Eight Thousand Eight Hundred & Fifty Dollars 7 ($8,850) in U.S. Currency, 461 U.S. 555, 569 (1983) (noting that 8 a claimant can file an equitable action seeking an order 9 compelling the filing of [a] forfeiture action or return of the 10 seized property (citing Slocum v. Mayberry, 15 U.S. (2 Wheat.) 11 1, 10 (1817))), and also perhaps by seeking an order dismissing 12 the case on account of the vehicle owner s delinquency in meeting 13 deadlines, cf. N.Y. C.P.L.R. 3216; Andrea v. Arnone, Hedin, 14 Casker, Kennedy & Drake, Architects & Landscape Architects, P.C., 15 840 N.E.2d 565, 569 (N.Y. 2005) ( Litigation cannot be conducted 16 efficiently if deadlines are not taken seriously . . . . ).10 17 The City also argues that Ford Motor Credit need not be 18 counted an interested person because it could protect its 1 2 3 4 5 6 7 8 9 10 10 The City also relies on Foley for the proposition that Ford Motor Credit cannot be an interested party. 724 N.Y.S.2d 580. Not only does it read too much into Foley, cf. Molomo, 613 N.E.2d at 567 (noting that Ford Motor Credit received actual notice of the City s seizure of the vehicle and . . . [and has] fully participated in legal proceedings pertaining to the vehicle s disposition ); Ford Motor Credit, 394 F. Supp. 2d at 611 n.5 (noting that Foley did not discuss § 12-36), but it ignores that it is federal law that dictates the procedures required by the Fourteenth Amendment, see Krimstock I, 306 F.3d at 60. -15- 1 interest in the present value of a seized vehicle by obtaining 2 title to the vehicle. 3 to safeguard its interests does not relieve the State of its 4 constitutional obligation. 5 at 799. However, a party s ability to take steps Mennonite Bd. of Missions, 462 U.S. 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. 6 7 8 9 10 11 Unlike § 12-36, 38 R.C.N.Y. § 12-31 is clear on its face: 12 Ford Motor Credit is not a claimant and may not demand a 13 vehicle s return. 14 Fourteenth Amendment requires that Ford Motor Credit be treated 15 as a claimant for purposes of triggering the City s duty to 16 commence a forfeiture action within twenty-five days.11 17 answering this question, we have two analytical lenses at our 18 disposal. We must therefore consider whether the In 19 In $8,850, the Supreme Court applied the four-factor test 20 propounded first in Barker v. Wingo, 407 U.S. 514 (1972), to a 21 challenge on due process grounds to the length of time between 22 the seizure of property and the initiation of a forfeiture 23 proceeding. 24 Banco Cafetero Pan., 797 F.2d 1154, 1163 (2d Cir. 1986) (applying 1 2 3 4 See 461 U.S. at 565-70; see also United States v. 11 As we have explained, the City may retain a seized vehicle as arrest evidence or trial evidence. Of course, Ford Motor Credit may not seek the premature forfeiture of a vehicle that the City wishes to retain for such purposes. -16- 1 Barker test). 2 Eldridge test applied if property holders wished to challenge the 3 legitimacy of the City s retention and forfeiture of their 4 property. 5 Yet in Krimstock I, we held that the Mathews v. See 306 F.3d at 68. It is not clear whether we should apply Barker or Mathews to 6 this case. On the one hand, Ford Motor Credit seeks principally 7 to expedite the forfeiture process, see, e.g., Appellee s Br. at 8 29-31, and the district court appears to have relied on Barker, 9 394 F. Supp. 2d at 614. Moreover, the second Mathews factor -- 10 the fairness and reliability of the existing . . . procedures, 11 and the probable value, if any, of additional procedural 12 safeguards, 424 U.S. at 343 -- is hard to apply, since the 13 gravamen of Ford Motor Credit s complaint is not that the City 14 cannot forfeit seized vehicles, but rather that it must do so 15 more quickly. 16 prejudice to the defendant . . . [such that] the claimant [is 17 hampered] in presenting a defense on the merits, $8,850, 461 18 U.S. at 564, 569 -- is equally hard to apply in this case. 19 both the City and Ford Motor Credit seem to agree that 20 Mathews should govern. 21 at 16. 22 On the other hand, the fourth Barker factor -- And See Appellants Br. at 39; Appellee s Br. We need not decide the question, however, since § 12-31 is 23 unconstitutional under either application. 24 explained, the City has caused substantial delays, 394 F. Supp. -17- As the district court 1 2d at 614, in violation of Barker. 2 factors -- (1) the private interest affected; (2) the risk of 3 erroneous deprivation through the procedures used and the value 4 of other safeguards; and (3) the government s interest, 5 Krimstock I, 306 F.3d at 60 -- yields the same conclusion. 6 Consideration of the Mathews First, Ford Motor Credit s interest in the present value of 7 a seized vehicle, while not as great as the interest of the 8 vehicle s owner in possession of a seized vehicle - because 9 seized vehicles are not used by Ford Motor Credit as a mode of 10 transportation . . . [or] the means to earn a livelihood, id. at 11 61 - is still considerable. 12 affirmed the importance of the income stream derived from 13 ownership of property. 14 Real Prop., 510 U.S. 43, 54 (1993) (noting that Good was renting 15 his home to tenants, but explaining that even if the tangible 16 effect of the seizure was limited to taking the $900 a month he 17 was due in rent[,] . . . it would not render the loss 18 insignificant or unworthy of due process protection ); see also 19 Doehr, 501 U.S. at 12. 20 Ford Motor Credit s favor, to the extent it can be applied. 21 owner of a vehicle, if he has in fact used the vehicle in the 22 commission of a crime, has little incentive to demand that the 23 City begin forfeiture proceedings. 24 current procedures is thus substantial. Indeed, the Supreme Court has See United States v. James Daniel Good The second Mathews factor also weighs in -18- The The risk of delay under the Third and finally, the 1 government s interest in refusing to honor a demand that it 2 commence a forfeiture action (after the conclusion of criminal 3 proceedings) is small. 4 would wish to prosecute forfeiture cases rapidly, since it 5 obtains at least ten percent of the eventual sale proceeds. 6 Cf. James Daniel Good Real Prop., 510 U.S. at 55-56 (noting a 7 greater risk of erroneous deprivation where the government has a 8 pecuniary interest in retaining property). 9 the district court that the City has a constitutional obligation 10 to institute forfeiture proceedings within a reasonable time when 11 an interested party, such as a [secured creditor] like Ford 12 [Motor] Credit, seeks a disposition with respect to a vehicle in 13 which it holds a cognizable property interest. 14 at 615.12 15 to afford Ford Motor Credit the same rights in this respect as a 16 claimant, and no more.13 17 Indeed, one would think that the City We thus agree with 394 F. Supp. 2d We note only that we read the district court s opinion In sum, we agree with the district court that henceforth, 1 2 3 12 1 2 3 4 5 6 7 8 9 13 We observe in passing that we do not require the City to prosecute forfeiture cases inefficiently; it may still hold blocks of seized vehicles and seek their forfeiture at one time. Cf. Ford Motor Credit, 394 F. Supp. 2d at 615 ( [T]here is no constitutional requirement that the City recognize Ford Credit as a valid claimant for all purposes pursuant to 38 R.C.N.Y. section 12-35(a). Rather, the City has a constitutional obligation to institute forfeiture proceedings within a reasonable time when an interested party, such as a lienholder like Ford Credit, seeks a disposition with respect to a vehicle in which it holds a cognizable property interest. ). -19- 1 when Ford Motor Credit has a security interest in a seized 2 vehicle, the City must (1) permit Ford Motor Credit to 3 participate as a party in the forfeiture action and (2) commence 4 the forfeiture action within twenty-five days from the date that 5 Ford Motor Credit makes a demand on the vehicle, provided that a 6 claimant would otherwise be entitled to make a demand on the 7 vehicle. 8 CONCLUSION 9 For the foregoing reasons, the judgment of the district 10 court is AFFIRMED. 11 -20-

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