Mordukhaev v. Daus

10-4810-cv
Mordukhaev v. Daus
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE
32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Daniel Patrick Moynihan Courthouse, 500 Pearl Street, in the City of New York, on the 17th day
of January, two thousand twelve.
Present:
PETER W. HALL,
DENNY CHIN,
Circuit Judges.
ALVIN K. HELLERSTEIN,*
District Judge.
____________________________________________________
Benjamin Mordukhaev, Individually and on behalf
of others similarly situated, et al.,
Plaintiffs-Appellants,
v. No. 10-4810-cv
Matthew Daus, Raymond Scanlon, Carmena
Schwecke, The New York City Taxi and Limousine
Commission, The City of New York,
Defendants-Appellees.
____________________________________________________
*
The Honorable Alvin K. Hellerstein, District Judge for the United States District Court
for the Southern District of New York, sitting by designation.
FOR APPELLANTS: DANIEL L. ACKMAN, Law Office of Daniel L. Ackman, New York,
New York.
FOR APPELLEES: SUSAN PAULSON, Assistant Corporation Counsel (Francis F.
Caputo, Mark Muschenheim, Of Counsel), for Michael A.
Cardozo, Corporation Counsel of the City of New York, New
York, New York.
____________________________________________________
Appeal from a judgment of the United States District Court for the Southern District of
New York (Stein, J.). ON CONSIDERATION WHEREOF, it is hereby ORDERED,
ADJUDGED, and DECREED that the judgment of the district court is AFFIRMED.
Plaintiffs-Appellants were holders of taxicab licenses whose licenses were revoked for
misconduct, and whose applications for new licenses were denied by the New York City Taxi
and Limousine Commission (“TLC”).1 Plaintiffs brought a putative 42 U.S.C. § 1983 class
action against the City of New York, the TLC, and various TLC officers (“Defendants”),
alleging violations of their due process rights arising from the denial of their taxicab license
applications. Plaintiff Mordukhaev also alleged, individually, that Defendants violated his
procedural due process rights in revoking his taxicab license. Defendants moved to dismiss
under Rule 12(b)(6) of the Federal Rules of Civil Procedure, and in September 2010, the district
court (Stein, J.) granted that motion, holding, inter alia, that Plaintiffs could not demonstrate a
legitimate claim of entitlement to a future taxicab license, and that Mordukhaev was afforded
adequate process incident to the revocation of his original license. Having dismissed all of
Plaintiffs’ federal claims, the court declined to exercise supplemental jurisdiction over Plaintiffs’
1
After Plaintiffs-Appellants filed their complaint and amended complaints in 2009,
Plaintiffs-Appellants Robert Dyce, Jorge Avila, and Mohammad Butt applied again for new
taxicab licenses and the TLC granted their applications.
2
remaining state and city law claims. Plaintiffs timely appealed.2 We assume the parties’
familiarity with the underlying facts, the procedural history of the case, and the issues on appeal,
and discuss these only where necessary to our decision.
“We review de novo a district court’s dismissal for failure to state a claim, see Fed. R.
Civ. P. 12(b)(6), assuming all well-pleaded, nonconclusory factual allegations in the complaint
to be true.” Harrington v. Cnty. of Suffolk, 607 F.3d 31, 33 (2d Cir. 2010).
I. Plaintiffs’ Property Interest in a Future License
For Plaintiffs to prevail on their due process claims—whether procedural or
substantive—arising from the denial of their applications for taxicab licenses, they must first
demonstrate that they have a valid property interest in receiving a license. See Harlen Assocs. v.
Inc. Vill. of Mineola, 273 F.3d 494, 503 (2d Cir. 2001) (holding that proof of a substantive due
process violation requires (1) a valid property interest and (2) evidence that defendants infringed
on that interest in an arbitrary or irrational manner); Local 342, Long Island Pub. Serv. Emps. v.
Town Bd. of the Town of Huntington, 31 F.3d 1191, 1194 (2d Cir. 1994) (holding that proof of a
procedural due process violation requires (1) a valid property interest, (2) defendants’ denial of
that interest, and (3) evidence that the denial was effected without due process); see also
Narumanchi v. Bd. of Trs. of Conn. State Univ., 850 F.2d 70, 72 (2d Cir. 1988) (“The threshold
issue is always whether the plaintiff has a property or liberty interest protected by the
Constitution.”).
2
Based on its grant of Defendants’ motion to dismiss, the court denied Plaintiffs’ then-
pending motions for summary judgment as moot. Following the entry of judgment, the court
also denied Plaintiffs’ motion for reconsideration. On appeal, Plaintiffs do not challenge any of
these decisions, which we, therefore, decline to consider. See LoSacco v. City of Middletown, 71
F.3d 88, 92-93 (2d Cir. 1995) (issues not argued on appeal are deemed abandoned).
3
“‘To have a property interest in a benefit, a person clearly must have more than an
abstract need or desire’ and ‘more than a unilateral expectation of it. He must, instead, have a
legitimate claim of entitlement to it.’” Town of Castle Rock v. Gonzales, 545 U.S. 748, 756
(2005) (quoting Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (2005)); cf. Zahra v.
Town of Southold, 48 F.3d 674, 680 (2d Cir. 1995) (“This inquiry stems from the view that a
property interest can sometimes exist in what is sought—in addition to the property interest that
exists in what is owned—provided there is a ‘legitimate claim of entitlement’ to the benefit in
question.”). “Such entitlements are not created by the Constitution but, ‘[r]ather, they are
created and their dimensions are defined by existing rules or understandings that stem from an
independent source such as state law.’” Harrington, 607 F.3d at 34 (quoting Town of Castle
Rock, 545 U.S. at 756). Nevertheless, “[a]lthough the substantive interest derives from . . . state
law, federal constitutional law determines whether that interest rises to the level of a legitimate
claim of entitlement protected by the Due Process Clause.” Id. (internal quotation marks and
emphasis omitted).
“A ‘legitimate claim of entitlement’ exists where, under applicable state law, ‘absent the
alleged denial of due process, there is either a certainty or a very strong likelihood that the
application would have been granted.’” Clubside, Inc. v. Valentin, 468 F.3d 144, 153 (2d Cir.
2006) (quoting Walz v. Town of Smithtown, 46 F.3d 162, 168 (2d Cir. 1995)); accord Yale Auto
Parts, Inc. v. Johnson, 758 F.2d 54, 59 (2d Cir. 1985). As a general rule, therefore, the existence
of an “entitlement turns on whether the issuing authority lacks discretion to deny [the benefit],
i.e., is required to issue it upon ascertainment that certain objectively ascertainable criteria have
been met.” Natale v. Town of Ridgefield, 170 F.3d 258, 263 (2d Cir. 1999); see Town of Castle
Rock, 545 U.S. at 756 (“[A] benefit is not a protected entitlement if government officials may
4
grant or deny it in their discretion.”); RRI Realty Corp. v. Inc. Vill. of Southampton, 870 F.2d
911, 918 (2d Cir. 1989) (“Even if in a particular case, objective observers would estimate that
the probability of issuance was extremely high, the opportunity of the local agency to deny
issuance suffices to defeat the existence of a federally protected property interest.”). “[T]his
standard appropriately balances the need for local autonomy, with recognition of constitutional
protection at the very outer margins of municipal behavior. . . . It also recognizes that the Due
Process Clause does not function as a general overseer of arbitrariness in state and local . . .
decisions; in our federal system, this is the province of the state courts.” Zahra, 48 F.3d at 680.
Here, Plaintiffs maintain that they have a legitimate claim of entitlement to a future
taxicab license because the TLC lacks discretion to deny a license given the purportedly
objective requirements for eligibility. We disagree. Review of the relevant statutory and
regulatory framework confirms that the TLC retains significant discretion to deny a license
based on subjective criteria. Foremost among these is the requirement that applicants for a
license demonstrate “good moral character.” N.Y.C. Admin Code § 19-505(b)(5). The TLC
also has discretion to determine whether an applicant’s “physical condition” or “knowledge of
the city” is “unsatisfactory,” id., § 19-505(d), and other provisions provide that the TLC “may”
renew a license or suspend or revoke a license, id. § 19-505(i), and that it “may” direct
applicants to appear for fitness hearings, after which the TLC Chairperson “may accept, reject,
or modify [the Administrative Law Judge’s] Recommendation,” 35 Rules of the City of New
York § 8-15. Nothing in § 19-505(b) provides an objective standard for the TLC to evaluate an
applicant’s character, and a review of the TLC’s decisions denying Plaintiffs’ license
applications indicates that the TLC’s assessment of this requirement is highly subjective. In the
cases before us, Plaintiffs’ applications were denied for, inter alia, lack of candor or honesty,
5
poor driving record, insufficient evidence of rehabilitation, and insufficient evidence that the
applicant could be trusted to follow TLC rules and regulations—all aspects of an applicant’s
fitness and moral character. In prior cases, we have held that the existence of similarly
subjective criteria by which to determine a plaintiff’s eligibility for a benefit demonstrated that
the municipal body retained sufficient discretion to negate plaintiff’s legitimate claim of
entitlement. Compare Harlen Assocs., 273 F.3d at 504-05 (rejecting plaintiff’s due process
claim because the municipal body retained discretion to deny a building permit based on its
determination of countervailing community interests); Sanitation & Recycling Indus., Inc. v. City
of New York, 107 F.3d 985, 995 (2d Cir. 1997) (holding that the municipal body’s “discretion to
decide whether or not to grant a waiver . . . precludes any legitimate claim of entitlement”), with
Kapps v. Wing, 404 F.3d 105, 114-18 (2d Cir. 2005) (holding that plaintiffs had a legitimate
claim of entitlement to the benefits sought given the “mandatory statutory and regulatory
framework” and the absence of “discretionary factors” to determine benefit eligibility); Charry
v. Hall, 709 F.2d 139, 140-42, 144 (2d Cir. 1983) (holding that plaintiff had a legitimate claim of
entitlement because he had satisfied all of the objective statutory requirements). We see no
reason to reach a different conclusion here.
Accordingly, because the TLC has discretion to grant or deny a taxicab license
application, there is neither a certainty nor a very strong likelihood that any given application
will be granted. See Clubside, 468 F.3d at 153. Plaintiffs cannot, therefore, demonstrate a
legitimate claim of entitlement to a license, and their due process claims arising from the denial
of their license applications necessarily fail as a matter of law. See Narumanchi, 850 F.2d at 72.
6
II. Mordukhaev’s Challenge to His License Revocation
Mordukhaev challenges the district court’s dismissal of his procedural due process claim
based on the revocation of his taxicab license in January 2007. He contends that he was denied
adequate pre-deprivation process because the notice of hearing he received did not sufficiently
describe his offending conduct and because he was not permitted to cross-examine the
complaining witness, who did not appear at the pre-deprivation hearing. We conclude that the
revocation of Mordukhaev’s license comported with due process.
Unlike Plaintiffs’ expectation in receiving a future license, it is undisputed that
Mordukhaev has a valid property interest in his existing license and is thus entitled to procedural
due process incident to the revocation of that license. See Nnebe v. Daus, 644 F.3d 147, 158 (2d
Cir. 2011) (“[A] taxi driver has a protected property interest in his license.” (internal quotation
marks omitted)). In the present circumstances, “procedural due process is satisfied if the
government provides notice and a limited opportunity to be heard prior to [the deprivation of the
protected interest], so long as a full adversarial hearing is provided afterwards.” Locurto v. Safir,
264 F.3d 154, 171 (2d Cir. 2001). The pre-deprivation hearing “need not be elaborate,”
however, nor must it “definitively resolve the propriety of the [deprivation].” Cleveland Bd. of
Educ. v. Loudermill, 470 U.S. 532, 545 (1985); see id. at 544-46 (holding that a pre-deprivation
hearing serves as “an initial check against mistaken decisions—essentially, a determination of
whether there are reasonable grounds to believe that the charges against the [plaintiff] are true
and support the proposed action”).
Here, the pre-deprivation hearing satisfied these basic requirements. It afforded
Mordukhaev notice of the charges against him, an explanation of the evidence supporting those
charges, and an opportunity for him to present his version of the events. See id. at 546
7
(identifying these elements as fundamental to pre-deprivation process). And in any event,
Mordukhaev was afforded sufficient post-deprivation process. After the Administrative Law
Judge (“ALJ”) revoked Mordukhaev’s license, Mordukhaev filed a counseled appeal of that
decision to the TLC’s Chief ALJ, raising the very same issues he now advances in this appeal.
That appeal was denied, but significantly, Mordukhaev did not pursue his challenge further via
an Article 78 proceeding. In similar circumstances, we have held that the availability of an
Article 78 proceeding to challenge any alleged deficiencies in an administrative adjudication is
sufficient to satisfy due process. See Locurto, 264 F.3d at 173-75 (holding that an Article 78
proceeding constitutes “wholly adequate post-deprivation” process); accord Rivera-Powell v.
N.Y.C. Bd. of Elections, 470 F.3d 458, 467 (2d Cir. 2006); see also id. at 468 n.12 (“[A]
procedural due process violation cannot have occurred when the governmental actor provides
apparently adequate procedural remedies and the plaintiff has not availed himself of those
remedies.” (internal quotation marks omitted)). Therefore, while Mordukhaev did not avail
himself of an Article 78 proceeding, the existence of that proceeding confirms that state law
afforded him adequate process to defeat his constitutional claim.
Because we affirm the district court’s dismissal of Plaintiffs’ federal claims, we also
affirm the district court’s decision declining to exercise supplemental jurisdiction over Plaintiffs
state and city law claims. See Purgess v. Sharrock, 33 F.3d 134, 138 (2d Cir. 1994).
8
We have considered all of Plaintiffs’ remaining arguments and find them to be without
merit.2 The judgment of the district court is therefore AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
2
Although we conclude that Plaintiffs cannot, as a matter of law, prevail on the merits
of their federal claims, as to their assertion that the district court erred by dismissing the TLC as
a party, we reiterate that “[i]t is well settled in this Court that, as a general matter, agencies of
New York City are not suable entities in § 1983 actions.” Nnebe, 644 F.3d at 158 n.6 (citing
Jenkins v. City of New York, 478 F.3d 76, 93 n.19 (2d Cir. 2007)). Nevertheless, this rule is
often “of no practical consequence . . . [because] the TLC must abide by any relief ordered
against the City of which it is a non-severable part.” Id.
9