A federal judge has curbed a lawsuit in which Mercedes Benz alleged Chicago violated its constitutional property rights by allowing individual city workers too much power to complicate the already opaque process by which lienholders must recover cars impounded over unpaid parking tickets, before the cars are "disposed of."
In an April 21 opinion, U.S. District Judge Georgia Alexakis granted the city’s motion to dismiss the complaint. Mercedes Benz Financial Services claimed Chicago violated Fifth and 14th Amendment due process rights while also bringing three state law claims.
According to court records, MBFS had a lien on a vehicle that accumulated more than two unpaid parking tickets. The city had the vehicle towed and impounded, and two weeks later mailed a notice of the impoundment including conditions for reclaiming the car and a notice that after 21 days of the notice the city could sell or otherwise dispose of the vehicle.
The company alleged it contacted the city “to ascertain the documents and other requirements for MBFS to obtain the release of the vehicle,” and also alleged municipal employees couldn’t “confirm the exact substance or content of any documents required to obtain the release of the vehicle and were unable to provide a statement as to the amounts owed for the release of the vehicle.”
MBFS said it eventually showed the city a sales agreement, title, documentation of the buyer’s default, and notarized statements of hold harmless terms and authorizing release of the vehicle to a company agent. The company said it was prepared to pay impound fees but a city employee rejected the documents as incomplete.
“Around one month later, MBFS received notice that, two weeks after MBFS’s failed reclamation attempt and more than two months after the city sent notice of the vehicle’s impoundment, the city disposed of the vehicle,” Alexakis wrote.
Although a municipality isn’t liable for legal injuries an employee inflicts, Alexakis noted, MBFS rooted its argument in claims the city’s policies caused the injuries by giving individual workers outsized discretion to issue denials while also failing to enact adequate guidelines when lienholders seek to reclaim impounded vehicles.
Alexakis said MBFS improperly tried introducing several additional liability theories in a response to the city’s dismissal motion and therefore didn’t address those aspects.
Regarding the allegations of insufficient municipal policy, Alexakis said the initial complaint quoted the impoundment notice which cites to city code “and spells out the materials that a lienholder is required to produce in order to retrieve a vehicle.” Although the company believes that policy to be inappropriate, Alexakis continued, it also doesn’t adequately allege any actionable legal gaps.
“MBFS does not allege pattern of prior similar constitutional violations,” Alexakis wrote. “In fact, MBFS alleges no other instances of the city wrongfully refusing to release a vehicle to a lienholder: Its complaint relies entirely on its own experience. … Nor does MBFS allege that the risk of constitutional violations stemming from the city’s failure to implement appropriate vehicle reclamation policies was so high that it was obvious.”
Alexakis said MBFS also failed to single out municipal policy or procedure language that, as written, violates the Constitution. A claim the city gives “representatives and agents in the Department of Finance unreasonable and arbitrary discretion in denying a lienholder’s attempts to reclaim impounded vehicles,” lacks supporting evidence such as specific citations to city policy, “let alone to any unconstitutional language within a policy,” Alexakis wrote.
With dismissal of the constitutional claims, Alexakis said, no federal claim survives. She declined to exercise jurisdiction over the state law claims and dismissed the complaint without prejudice. MBFS has until May 13 to file an amended complaint.
MBFS has been represented in the case by attorney Coleman J. Braun, of the firm of Adams and Reese LLP, of Nashville.