07-1237-cv
Spinelli v. City of New York
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 August Term 2008
5 (Argued: January 22, 2009 Decided: August 7, 2009)
6 Docket No. 07-1237-cv
7
8 ----------------------------------------------------x
9
10 ANGELA SPINELLI and OLINVILLE ARMS, INC.,
11
12 Plaintiffs-Appellants,
13
14 -- v. --
15
16 CITY OF NEW YORK and PASQUALE CARABELLA, New York
17 City Police Sergeant,
18
19 Defendants-Appellees.
20
21 -----------------------------------------------------x
22
23 B e f o r e : WALKER and CALABRESI, Circuit Judges.*
24 Appeal by Plaintiffs from a judgment entered in the United
25 States District Court for the Southern District of New York
26 (Richard C. Casey, Judge), granting Defendants’ motion for
27 summary judgment and dismissing Plaintiffs’ due process, Fourth
28 Amendment, and tortious interference with business relations
29 claims. On appeal, we AFFIRM the district court’s dismissal of
30 Plaintiffs’ Fourth Amendment claim. The district court’s
31 dismissal of the due process claim is REVERSED, and the case is
*
1 The Honorable Sonia Sotomayor, originally a member of the
2 panel, was elevated to the Supreme Court on August 6, 2009. The
3 two remaining members of the panel, who are in agreement, have
4 determined the matter. See 28 U.S.C. § 46(d); Local Rule
5 0.14(2); United States v. Desimone, 140 F.3d 457 (2d Cir. 1998).
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1 REMANDED for the district court to enter summary judgment in
2 favor of Plaintiffs and to calculate damages on that claim. The
3 dismissal of the tortious interference claim is VACATED and
4 REMANDED for further consideration.
5 SANFORD F. YOUNG, Law Offices
6 of Sanford F. Young, (Laura
7 Colatrella, on the brief), New
8 York, N.Y., and David Zelman,
9 Law Offices of David A.
10 Zelman, Brooklyn, N.Y., for
11 Plaintiffs-Appellants.
12
13 ANN E. SCHERZER, Assistant
14 Corporation Counsel, (Kristin
15 M. Helmers, Mark Muschenheim,
16 Of Counsel), for Michael A.
17 Cardozo, Corporation Counsel
18 of the City of New York, New
19 York, N.Y., for Defendants-
20 Appellees.
21 JOHN M. WALKER, JR., Circuit Judge:
22 Plaintiffs-Appellants Angela Spinelli and Olinville Arms,
23 Inc. (collectively “Spinelli”) appeal from a judgment of the
24 district court (Richard C. Casey, Judge), granting summary
25 judgment to Defendants-Appellees City of New York and New York
26 City Police Sergeant Pasquale Carabella (collectively “the City”)
27 dismissing Plaintiffs’ Fourth Amendment, due process, and
28 tortious interference with business relations claims that were
29 based on the City’s confiscation of Spinelli’s firearms inventory
30 and suspension of her dealer’s license. On appeal, Spinelli
31 argues that the existence of material issues of fact on the
32 Fourth Amendment and due process claims preclude summary
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1 judgment, and that the district court should have exercised
2 supplemental jurisdiction over her state-law tortious
3 interference claim.
4 We conclude that the district court properly dismissed
5 Spinelli’s Fourth Amendment claim because the City’s warrantless
6 search of Olinville Arms was objectively reasonable and performed
7 pursuant to established regulations. However, the City violated
8 due process by denying Spinelli constitutionally sufficient
9 notice and the opportunity for a post-deprivation hearing.
10 Therefore, we reverse the grant of summary judgment in favor of
11 the City on the due process claim, and remand to the district
12 court to enter summary judgment in favor of Spinelli and
13 determine damages on that claim. We also remand for further
14 consideration of Plaintiffs’ tortious interference claim.
15 BACKGROUND
16 Olinville Arms, Inc. (“Olinville”) is a gun shop, shooting
17 range, and travel agency located in Bronx County, New York, owned
18 and operated by Angela Spinelli. Olinville’s license was issued
19 by the New York City Police Department (“NYPD”) License Division
20 (the “License Division” or the “Division”). The license is
21 conditioned upon compliance with regulations under Title 38 of
22 the Rules of the City of New York (“Rules”) that require gun
23 dealers to adhere to certain security restrictions and provide
24 that the licensee’s “premises and firearms[] shall be subject to
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1 inspection at all times by members of the Police Department.”
2 See 38 RCNY § 4-06(a)(3). If a gun dealer fails to comply with
3 the Rules, the Division may suspend or revoke the dealer’s
4 license “for good cause by the issuance of a Notice of
5 Determination Letter to the licensee, which shall state in brief
6 the grounds for the suspension or revocation and notify the
7 licensee of the opportunity for a hearing.” 38 RCNY § 4-04(l).
8 In the wake of the September 11, 2001 terrorist attacks, the
9 47th Precinct of the NYPD was tasked with providing “enhanced
10 security to sensitive locations within its boundaries,” known as
11 “Omega posts” or “Omega watches.” The Omega post program
12 extended through October 2001, and Olinville was an Omega post.
13 On October 8, 2001, Captain Charles McSherry, an officer
14 from the 47th Precinct, entered Olinville under the Omega post
15 program without a warrant or Spinelli’s permission and searched
16 the premises. The search revealed the security at Olinville to
17 be “grossly inadequate.” Security issues included an unwatched
18 counter area, a large hole in Olinville’s backyard fence, and two
19 unlocked safes.
20 On October 9, 2001, the License Division advised Spinelli by
21 letter that, “as a result of failure to provide adequate security
22 for [Olinville],” her dealer’s license was suspended. The letter
23 directed Spinelli to surrender all firearms “pending the
24 conclusion of the [License Division’s] investigation,” which
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1 would determine whether Olinville’s license would be “continued,
2 suspended, or revoked.” The letter told Spinelli that Sergeant
3 Michael Kaplon was assigned to her case and provided Kaplon’s
4 contact number, but did not notify Spinelli of the opportunity
5 for a hearing, as required by the Rules. See 38 RCNY § 1-04(f).
6 Officers from the 47th Precinct seized approximately 300 weapons
7 from Olinville, many of which, according to Spinelli, had already
8 been sold to customers who later demanded a refund.
9 Spinelli hired attorney John Chambers, who had experience in
10 gun licensing matters, to help retrieve her license and firearms.
11 According to Chief Inspector Benjamin Petrofsky of the License
12 Division, “[a dealer’s] license [is] . . . normally suspended for
13 the duration of the investigation. That’s the norm.” Instead of
14 requesting a formal hearing, which Chambers believed could take
15 months to years to decide, Chambers contacted members of the
16 License Division on an informal basis “through negotiations and
17 conversations” that included letters to the Division requesting
18 the immediate return of Spinelli’s property.1 Chambers also “was
19 imminently prepared to file a lawsuit against the Police
1
1 In one letter to the Division, Chambers alleges that
2 Sergeant Pasquale Carabella, a police officer in the 47th
3 Precinct and an individual defendant named in the underlying
4 action, “plan[ned] to go into business” selling firearms in the
5 Bronx, and therefore, directed the suspension of Olinville’s
6 permit “to put his competition out of business.” This
7 allegation, based on Chambers’ “good and reliable authority,” is
8 not supported by any other evidence in the record.
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1 Department” to retrieve Spinelli’s property.
2 After retaining Chambers, Spinelli received a second letter
3 from the License Division, dated October 19, 2001, that suspended
4 Olinville’s shooting range license pending investigation of the
5 October 8 incident report. Chambers promptly met with the
6 License Division, and argued that “there were no sufficient stay
7 or security issues that [he] saw, vis-à-vis [the] gun range.”
8 One day later, the shooting range license was reinstated.
9 On November 7, 2001, Sergeant Kaplon re-inspected Olinville,
10 but found that “there was nothing done to repair the deficiencies
11 with the lack of security within the store.” According to
12 Kaplon, Olinville exhibited “total disregard for the rules and
13 regulations of maintaining a Gun Dealer License.” On the same
14 day, Chambers sent a letter to the License Division, informing
15 the Division of planned security improvements at Olinville.
16 These improvements were tailored to remedy McSherry’s specific
17 complaints, and they included assurances by Spinelli that she
18 would “restore the fences in the backyard area,” install video
19 surveillance in the store, renovate Olinville’s counter area, and
20 build a “large concrete room where her gun safes are housed.”
21 On November 16, 2001, Chief Inspector Petrofsky recommended
22 the reinstatement of Olinville’s license. Petrofsky concluded
23 that, “[c]onsidering Olinville has been in business for over 30
24 years,” it was in the “best interests of fairness” to return
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1 Spinelli’s property immediately and allow her thirty days to make
2 the required security improvements. On November 20, 2001,
3 License Division Deputy Inspector Thomas Galati concurred in
4 recommending the return of Olinville’s license and firearms. On
5 December 5, 2001, the Division sent Spinelli a letter advising
6 her of the license reinstatement, thereby permitting her to
7 reopen her gun shop. According to Spinelli, “Defendants’ actions
8 resulted in Plaintiffs’ loss of approximately two months of sales
9 and profits” that included the “unexplained” time lag between the
10 recommendation of license reinstatement on November 20 and the
11 official notice of reinstatement on December 5.
12 On November 8, 2002, Spinelli filed the instant suit against
13 the City pursuant to 42 U.S.C. § 1983. Spinelli alleged that
14 “Defendants’ confiscation of Plaintiffs’ licenses and weapons was
15 illegal and violated Plaintiffs’” due process and Fourth
16 Amendment rights. Specifically, Spinelli alleged that Defendants
17 had violated due process by seizing Olinville’s weapons and
18 suspending its license without providing the “required notice or
19 hearing,” and the Fourth Amendment by performing a search of
20 Olinville’s premises “without probable cause or justification.”
21 Spinelli also claimed that “[b]y reason of their acts and
22 omissions, Defendants . . . intentionally interfered with
23 Plaintiffs’ business relationships” in violation of New York
24 state law.
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1 After both parties moved for summary judgment, the district
2 court granted the City’s motion. First, the district court
3 concluded that the City’s search of Olinville’s premises, seizure
4 of the firearms, and suspension of Olinville’s license were
5 reasonable due to “the apparent security lapses at Olinville,”
6 and therefore did not violate the Fourth Amendment, which
7 prohibits only “unreasonable . . . seizures.”
8 With respect to Spinelli’s due process claim, the district
9 court, citing Sanitation & Recycling Industries v. City of New
10 York, 107 F.3d 985, 995 (2d Cir. 1997), concluded that Spinelli
11 did not have a protectable property interest in her gun dealer
12 license. The district court further determined that, in any
13 event, Spinelli had “received all the process that was due”
14 through notice and “an opportunity to be heard,” despite, as the
15 court noted, the absence of a formal hearing and the failure of
16 the City’s letters to explain what rules and regulations
17 Olinville had violated. Although the district court found that
18 Spinelli had a protected property interest in the seized
19 firearms, it concluded that, under the balancing test articulated
20 in Mathews v. Eldridge, 424 U.S. 319, 335 (1976), there was no
21 due process violation in light of the “opportunity to be heard”
22 and exigent circumstances. Finally, having dismissed Spinelli’s
23 constitutional claims, the district court declined to exercise
24 supplemental jurisdiction over Spinelli’s tortious interference
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1 state law claim.2
2 Spinelli appealed to this court.
3 DISCUSSION
4 I. Legal Standards
5 On appeal, we review the district court’s grant of summary
6 judgment de novo. Golden Pac. Bancorp v. FDIC, 375 F.3d 196, 200
7 (2d Cir. 2004). The district court may grant summary judgment
8 only “if the pleadings, the discovery and disclosure materials on
9 file, and any affidavits show that there is no genuine issue as
10 to any material fact and that the movant is entitled to a
11 judgment as a matter of law.” Fed. R. Civ. P. 56(c). A fact is
12 material if it “might affect the outcome of the suit under the
13 governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
14 248 (1986).
15 This standard requires that courts “resolve all ambiguities,
16 and credit all factual inferences that could rationally be drawn,
17 in favor of the party opposing summary judgment.” Brown v.
18 Henderson, 257 F.3d 246, 251 (2d Cir. 2001) (internal quotation
19 marks and citation omitted). Once the moving party demonstrates
20 that there are no genuine issues of material fact, the nonmoving
21 party “must come forth with evidence sufficient to allow a
22 reasonable jury to find in [its] favor.” Id. at 252 (internal
2
1 The district court also rejected Spinelli’s substantive due
2 process claim to the extent that it was alleged in the complaint,
3 a conclusion that Spinelli does not challenge on appeal.
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1 citation omitted). Thus, a nonmoving party can defeat a summary
2 judgment motion only “by coming forward with evidence that would
3 be sufficient, if all reasonable inferences were drawn in [its]
4 favor, to establish the existence of [an] element at trial.”
5 Grain Traders, Inc. v. Citibank, N.A., 160 F.3d 97, 100 (2d Cir.
6 1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
7 (1986) and Fed. R. Civ. P. 56(c)).
8 II. The Fourth Amendment Claim
9 First, Spinelli claims that the October 8 warrantless search
10 of Olinville’s premises by Captain McSherry violated the Fourth
11 Amendment.3 The Fourth Amendment prohibits “unreasonable
12 searches and seizures.” U.S. Const. amend IV. “Our prior cases
13 have established that the Fourth Amendment’s prohibition against
14 unreasonable searches applies to administrative inspections of
15 private commercial property.” United States v. Gordon, 655 F.2d
16 478, 483 (2d Cir. 1981) (internal quotation marks omitted).
17 However, in the case of a “closely regulated industry,” such as
18 gun dealerships, “the traditional Fourth Amendment standard of
19 reasonableness for a government search” lessens as “the privacy
20 interests of the owner are weakened and the government interests
21 in regulating particular businesses are concomitantly heightened
3
1 Spinelli does not argue that the seizure of her firearms or
2 suspension of her dealer’s license also violated the Fourth
3 Amendment. Accordingly, any such argument is waived on appeal.
4 See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998).
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1 . . . .” Palmieri v. Lynch, 392 F.3d 73, 80 (2d Cir. 2004)
2 (quoting New York v. Burger, 482 U.S. 691, 702 (1987)). Thus,
3 “warrantless inspection[s] of commercial premises may well be
4 reasonable within the meaning of the Fourth Amendment.” Id. The
5 baseline test for all Fourth Amendment claims “is one of
6 ‘objective reasonableness.’” Bryant v. City of New York, 404
7 F.3d 128, 136 (2d Cir. 2005) (quoting Graham v. Connor, 490 U.S.
8 386, 399 (1989)).
9 Here, Spinelli alleges that the October 8 search of
10 Olinville’s premises was “objective[ly] [un]reasonable[],” and
11 thus violated the Fourth Amendment. Spinelli says that the
12 search was unreasonable because Officer McSherry only conducted
13 it in order to “find an excuse to shut down [Olinville] so as to
14 reduce the Precinct’s staffing burdens imposed by the month-long,
15 citywide ‘Omega Watch’ program,” and because Officer Carabella,
16 who planned to open his own gun shop, wanted to eliminate the
17 competition. Even if we were to assume such a malicious
18 motivation (for which there is no record support), it would be of
19 no moment. The relevant inquiry is “whether the officers’
20 actions are ‘objectively reasonable’ in light of the facts and
21 circumstances confronting them, without regard to their
22 underlying intent or motivation.” Graham, 490 U.S. at 397; see
23 Bryant, 404 F.3d at 136 (extending Graham, an excessive force
24 case, to pretrial detentions following warrantless arrests);
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1 Kerman v. City of New York, 261 F.3d 229, 235 (2d Cir. 2001)
2 (same, as to warrantless searches). “[T]he subjective
3 motivations of the individual officers . . . ha[ve] no bearing on
4 whether a particular seizure is ‘unreasonable’ under the Fourth
5 Amendment.” Graham, 490 U.S. at 397. “An officer’s evil
6 intentions will not make a Fourth Amendment violation out of . .
7 . objectively reasonable” conduct, “nor will an officer’s good
8 intentions make . . . objectively unreasonable . . . [conduct]
9 constitutional.” Id.; see also Scott v. United States, 436 U.S.
10 128, 138 n.12 (1978) (collecting cases). Spinelli’s claim that
11 one or more officers had an ulterior motive for the search is
12 irrelevant to the issue of whether the search itself violated the
13 Fourth Amendment.
14 Spinelli also argues that because the search was warrantless
15 and not conducted pursuant to established regulations, it was
16 necessarily unreasonable. Spinelli claims that the only
17 applicable regulation that permits the police to search a gun
18 store’s premises in New York City is 38 RCNY § 1-06(i), which
19 creates a “cooperative inspection program” whereby gun store
20 owners can set up a time for a voluntary police inspection.
21 Spinelli, however, overlooks a separate provision of the
22 applicable regulations, 38 RCNY § 4-06(a)(3), that provides that
23 the gun dealer’s “premises and firearms[] shall be subject to
24 inspection at all times by members of the Police Department.”
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1 (Emphasis added). Spinelli’s allegations that “the Regulations
2 make no provision for warrantless searches,” and that McSherry
3 “ignored the available procedure,” are belied by § 4-06(a)(3).
4 Nor does the warrantless search authority created by § 4-
5 06(a)(3) violate the Fourth Amendment. The Supreme Court has
6 held that “warrantless administrative searches” are justified
7 where “the burden of obtaining a warrant [would be] likely to
8 frustrate the governmental purpose behind the search.” Camara v.
9 Mun. Ct. of San Fran., 387 U.S. 523, 533 (1967). Under certain
10 circumstances, like those presented here, an effective inspection
11 of a gun dealer’s premises requires that searches be unannounced
12 in order to discover potential security infractions. See United
13 States v. Biswell, 406 U.S. 311, 316 (1972); see also id. (“When
14 a dealer chooses to engage in this pervasively regulated business
15 and to accept a federal license, he does so with the knowledge
16 that his business records, firearms, and ammunition will be
17 subject to effective inspection.”); United States v. Streifel,
18 665 F.2d 414, 419 n.8 (2d Cir. 1981) (concluding that gun dealers
19 have a greatly reduced expectation of privacy because they know
20 that they are subject to a “full arsenal of governmental
21 regulation”) (quoting Marshall v. Barlow’s Inc., 436 U.S. 307,
22 313 (1978)). We hold that the warrantless search of Spinelli’s
23 store, conducted pursuant to established regulatory authority,
24 was objectively reasonable and did not violate the Fourth
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1 Amendment.
2 III. The Due Process Claim
3 Spinelli also alleges that, contrary to the district court’s
4 conclusion, the City’s conduct did not provide her with the
5 “process that was due.” Spinelli argues that the City’s letters,
6 advising her that Olinville’s license had been suspended for
7 “failure to provide adequate security,” did not adequately
8 apprise her of the grounds for the suspension, and that simply
9 providing her with the contact information for the investigating
10 officer was insufficient to afford her a meaningful opportunity
11 to be heard.
12 A. Did Spinelli Have A Protected Property Interest In Her
13 Gun Dealer License?
14 To succeed on a claim of procedural due process deprivation
15 under the Fourteenth Amendment -- that is, a lack of adequate
16 notice and a meaningful opportunity to be heard -- a plaintiff
17 must first establish that state action deprived him of a
18 protected property interest. Sanitation, 107 F.3d at 995.
19 Property interests that are protected by the Due Process Clause
20 of the Fourteenth Amendment are not created by that amendment;
21 they are defined by “existing rules or understandings that stem
22 from an independent source such as state law.” Bd. of Regents v.
23 Roth, 408 U.S. 564, 577 (1972). When alleging a property
24 interest in a public benefit, the plaintiff must show “a
25 legitimate claim of entitlement” to such interest that is
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1 grounded in established law. Id.
2 The district court believed that, because the City had
3 “broad discretion” over whether to grant or deny Olinville’s gun
4 dealership license, Spinelli had no protected property interest
5 in the license, and thus her due process claim could not succeed.
6 We do not agree. While a person does not have a protected
7 interest in a “possible future [business] license,” Sanitation,
8 107 F.3d at 995, the situation changes once the license is
9 obtained, see Dwyer v. Regan, 777 F.2d 825, 830-31 (2d Cir.
10 1985). While a “possible future license” involves a purely
11 speculative property interest, once the government has granted a
12 business license to an individual, the government cannot
13 “depriv[e] [the individual of] such an interest . . . without
14 appropriate procedural safeguards.” Arnett v. Kennedy, 416 U.S.
15 134, 167 (1974) (Powell, J., concurring in part). See Bell v.
16 Burson, 402 U.S. 535, 539 (1971) (“Once licenses are issued, . .
17 . their continued possession may become essential in the pursuit
18 of a livelihood.”).
19 Although there may be no protected property interest where
20 the licensor has broad discretion to revoke the license, see Bach
21 v. Pataki, 408 F.3d 75, 80-81 (2d Cir. 2005), here, such
22 discretion was carefully constrained. The relevant regulations
23 provided that, under specific circumstances, the City could
24 revoke or suspend Spinelli’s gun dealer license, 38 RCNY § 4-
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1 04(l), but the City did not have unfettered discretion to do so.
2 Unlike the gun carrier permits in the cases cited by the district
3 court, see Bach, 408 F.3d 75; Potts v. City of Phila., 224 F.
4 Supp. 2d 919 (E.D. Pa. 2002), over which the government had
5 “considerable discretion” to suspend or revoke a license, Bach,
6 408 F.3d at 79, the City’s discretion in this case was cabined by
7 the regulations’ “good cause” requirement, see 38 RCNY § 4-04(l).
8 See, e.g., Dwyer, 777 F.2d at 827 (plaintiff’s employment could
9 only be terminated for “incompeten[ce]” or “misconduct”). Where
10 a license can be “suspended only upon a satisfactory showing” of
11 misconduct, the licensee has “a property interest in his license
12 sufficient to invoke the protection of the Due Process Clause.”
13 Barry v. Barchi, 443 U.S. 55, 64 (1979); see Richardson v. Town
14 of Eastover, 922 F.2d 1152, 1157 (4th Cir. 1991) (“[A] state-
15 issued license for the continued pursuit of the licensee’s
16 livelihood, renewable periodically on the payment of a fee and
17 revocable only for cause, creates a property interest in the
18 licensee.”). Thus, the district court erred in holding that
19 Spinelli did not have a property interest in her gun dealer
20 license that could be protected by the Due Process Clause.
21 B. Was Spinelli Denied Due Process?
22 The district court also concluded that Spinelli received
23 “all the process that was due” when the City deprived her of her
24 gun dealer license and firearms. The touchstone of due process,
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1 of course, is “the requirement that ‘a person in jeopardy of
2 serious loss (be given) notice of the case against him and
3 opportunity to meet it.’” Mathews, 424 U.S. at 348-49 (quoting
4 Joint Anti-Fascist Comm. v. McGrath, 341 U.S. 123, 171-72 (1951)
5 (Frankfurter, J., concurring)); see also Goldberg v. Kelly, 397
6 U.S. 254, 267 (1970) (requiring an “opportunity to be heard . . .
7 at a meaningful time and in a meaningful manner”) (internal
8 quotation marks and citations omitted). However, “due process is
9 flexible and calls for such procedural protections as the
10 particular situation demands.” Morrissey v. Brewer, 408 U.S.
11 471, 481 (1972). “The ‘timing and nature of the required hearing
12 will depend on appropriate accommodation of the competing
13 interests involved.’” Krimstock v. Kelly, 306 F.3d 40, 51-52 (2d
14 Cir. 2002) (quoting Logan v. Zimmerman Brush Co., 455 U.S. 422,
15 434 (1982)). In determining how much process is due, a court
16 must weigh (1) the private interest affected, (2) the risk of
17 erroneous deprivation through the procedures used and the value
18 of other safeguards, and (3) the government’s interest. Mathews,
19 424 U.S. at 335.
20 Applying the Mathews test to this case, the district court
21 found that although Spinelli had “some private interest in the
22 vouchered guns taken by” the City, the City gave Spinelli an
23 adequate notice and opportunity to be heard by negotiating with
24 her counsel over the deprivation, which resulted in the
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1 reinstatement of her license and return of her firearms. The
2 district court also found that there were “‘exigent’
3 circumstances” justifying the City’s conduct, which argued
4 “strong[ly]” in favor of the public interest. Thus, the district
5 court concluded that the Mathews factors weighed in favor of the
6 City, and dismissed Spinelli’s due process claim.
7 On appeal, Spinelli challenges the district court’s Mathews
8 analysis, arguing that (1) she had a strong interest in retaining
9 her license and firearms, (2) there was a high risk of erroneous
10 deprivation because the City provided her with neither a
11 meaningful opportunity for a hearing nor adequate notice of the
12 grounds for her suspension, and (3) the City’s claim of an
13 “urgent need” to seize the firearms and suspend her license was
14 insufficient to justify denying her a pre-deprivation hearing,
15 much less a post-deprivation one.
16 1. Pre-Deprivation Due Process
17
18 We disagree with Spinelli’s contention that she was entitled
19 to pre-deprivation due process. “[A]lthough notice and a pre[-]
20 deprivation hearing are generally required, in certain
21 circumstances, the lack of such pre[-]deprivation process will
22 not offend the constitutional guarantee of due process, provided
23 there is sufficient post[-]deprivation process.” Catanzaro v.
24 Weiden, 188 F.3d 56, 61 (2d Cir. 1999). “[N]ecessity of quick
25 action by the State or the impracticality of providing any
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1 meaningful pre[-]deprivation process, when coupled with the
2 availability of some meaningful means by which to assess the
3 propriety of the State’s action at some time after the initial
4 taking, can satisfy the requirements of procedural due process.”
5 Id. (internal quotation marks and citation omitted).
6 Here, “exigent” circumstances necessitating “very prompt
7 action” on the part of the City were sufficient to justify the
8 City’s failure to provide Spinelli with pre-deprivation notice or
9 a hearing. United States v. All Assets of Statewide Auto Parts,
10 Inc., 971 F.2d 896, 903 (2d Cir. 1992) (citing Fuentes, 407 U.S.
11 at 91-92). The City and the public have a strong interest in
12 ensuring the security of gun shops, which was heightened further
13 in the days immediately following the September 11th terrorist
14 attacks, when the dimensions of the terrorist threat were
15 unknown. Additionally, the search and the suspension were taken
16 pursuant to the City’s regulatory authority; the search was
17 conducted pursuant to 38 RCNY § 4-06(a)(3), and the suspension
18 was authorized by 38 RCNY § 1-04(f). See All Assets, 971 F.2d at
19 903.
20 The record demonstrates that the City had sufficient cause
21 to take “prompt action” to address the security infractions at
22 Olinville observed by Officer McSherry. Spinelli, while
23 downplaying these infractions, has never disputed them, and
24 indeed, took strong measures to remedy them. Were we to conclude
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1 that prompt action was not required, we would tie the hands of
2 police faced with obvious security lapses at gun stores until a
3 hearing could be held, and thereby “substantially undermine the
4 state interest in public safety.” Mackey v. Montrym, 443 U.S. 1,
5 18 (1979). Under the circumstances presented to the police on
6 October 8, the City was not required to provide Spinelli with
7 pre-deprivation due process before suspending her license and
8 seizing her firearms. However, our inquiry does not end there.
9 2. Post-Deprivation Due Process
10
11 Spinelli’s primary argument on appeal is that the City never
12 provided her with the opportunity for a meaningful post-
13 deprivation notice and hearing despite her entitlement to one
14 under the City’s own regulations. Spinelli further alleges, and
15 the City essentially concedes, that in practice the City does not
16 provide licensees with notice or an opportunity for a formal
17 hearing until after the police investigation is completed, which
18 the City acknowledges can take “months or years.” Again, we turn
19 to the Mathews factors, now in the post-deprivation context.
20 a. The First Mathews Factor
21 First, the private interest implicated in this case is
22 strong. Spinelli’s “private interest is the interest in
23 operating a business and, stated more broadly, pursuing a
24 particular livelihood.” See Tanasse v. City of St. George, No.
25 97-4144, 1999 WL 74020, at *3 (10th Cir. Feb. 17, 1999) (citing
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1 Dixon v. Love, 431 U.S. 105, 113 (1977)). The Supreme Court has
2 “repeatedly recognized the severity of depriving someone of his
3 or her livelihood.” FDIC v. Mallen, 486 U.S. 230, 243 (1988).
4 Moreover, “[b]ecause of the nature of this interest, a licensee
5 erroneously deprived of a license cannot be made whole” simply by
6 reinstating the license. Tanasse, 1999 WL 74020, at *3. “In
7 fact, the interim period between erroneous deprivation and
8 reinstatement can be financially devastating to the licensee.”
9 Id. The district court’s conclusion that “the extent of
10 [Spinelli’s] interest [in her deprived property] is not entirely
11 clear to the Court,” led it to erroneously discount Spinelli’s
12 interest in both her gun dealer license and her seized firearms.
13 Without firearms to sell, Spinelli could not do business as a gun
14 dealer at all, whether or not she had a dealer license. The
15 first Mathews factor favors Spinelli.
16 b. The Second Mathews Factor
17 Next, we consider “the risk of an erroneous deprivation”
18 under “the procedures used” by the City, along with “the probable
19 value, if any, of additional or substitute procedural
20 safeguards.” Mathews, 424 U.S. at 335. Spinelli argues that the
21 post-deprivation procedures used by the City did not adequately
22 afford her due process because they failed to provide either
23 adequate notice or a meaningful opportunity to be heard in a
24 sufficiently timely manner. We agree.
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1 i. Notice
2 “Notice, to comply with due process requirements, . . . must
3 set forth the alleged misconduct with particularity.” In re
4 Gault, 387 U.S. 1, 33 (1967) (internal quotation marks omitted).
5 The particularity with which alleged misconduct must be described
6 varies with the facts and circumstances of the individual case;
7 however, due process notice contemplates specifications of acts
8 or patterns of conduct, not general, conclusory charges
9 unsupported by specific factual allegations. The degree of
10 required specificity also increases with the significance of the
11 interests at stake. Here, these interests, implicating “the
12 practice of one’s chosen profession,” Galvin v. N.Y. Racing
13 Ass’n, 70 F. Supp. 2d 163, 176 (E.D.N.Y. 1998), are
14 “substantial,” Barry, 443 U.S. at 64.
15 The notice actually provided in this case was
16 constitutionally inadequate. The regulations specified that a
17 license suspension will result in “the issuance of a Notice of
18 Determination Letter to the licensee, which shall state in brief
19 the grounds for the suspension or revocation and notify the
20 licensee of the opportunity for a hearing.” 38 RCNY § 1-04(f).
21 Had this regulation been complied with, the notice might have
22 been sufficient, depending on the specificity of the grounds
23 provided and the promptness of the hearing. The cursory letters
24 sent to Spinelli, however, only informed her of the license
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1 suspension and the status of the investigation. Beyond the
2 conclusory statement that security at Olinville was inadequate,
3 there was no specificity as to the actual infractions. Spinelli
4 was left to guess at the security breaches to which the letters
5 referred. The “notice” given to Spinelli plainly failed to
6 “reasonably . . . convey the required information” that would
7 permit her to “present [her] objections” to the City. Mullane v.
8 Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).
9 The City relies on the fact that Chambers, Spinelli’s able
10 counsel, through successful investigation, was able to determine
11 the factual nature of the charges. But adequate notice consists
12 of more than not obstructing a lawyer’s investigation. The fact
13 that Spinelli’s counsel eventually learned of the specific nature
14 of the charges after meeting on various occasions with the City
15 does not obviate the City’s failure to provide adequate notice of
16 those charges. The City has advanced no legitimate reason for
17 not immediately providing Spinelli with the information she
18 needed to prepare meaningful objections or a meaningful defense.4
19 Notifying Spinelli of the specific security breaches at Olinville
20 would have entailed little or no administrative inconvenience to
21 the City; indeed, simply attaching Officer McSherry’s report to
4
1 Spinelli’s claim of purposeful inadequacy of notice based on
2 the malicious intent of certain members of the 47th Precinct to
3 close Olinville for their benefit, as previously noted, is
4 without support in the record.
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1 the letters would have sufficed. The “notice” provided in this
2 case was scarcely more than a “gesture” on the City’s part, see
3 Luessenhop v. Clinton County, N.Y., 466 F.3d 259, 269 (2d Cir.
4 2006), and was not constitutionally adequate.
5 ii. Opportunity To Be Heard
6 Despite the inadequate notice, Spinelli, with counsel’s
7 assistance, was able to reinstate her gun dealer license 58 days
8 after its suspension. The City argues that, because Spinelli was
9 able to have her license suspension lifted and to retrieve her
10 property in less than two months, her due process rights were not
11 violated. This is a non-sequitur. Spinelli’s eventual success
12 did not result from the City’s affording her due process, but
13 despite its absence.
14 The City contends that because Spinelli voluntarily opted
15 not to pursue a formal hearing through the administrative
16 process, and instead chose to have her attorney negotiate with
17 the City, she cannot challenge the City’s process, which she
18 never utilized. We do not think that Spinelli’s being forced
19 into self-help by the inadequacy of process can bar her from
20 pressing this claim. The unstated premise of the City’s argument
21 is that Spinelli could have received a prompt hearing if she had
22 wanted one. In fact, the contrary is true. The administrative
23 hearing process was not available to Spinelli during the City’s
24 pending investigation into McSherry’s report. Both Sergeant
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1 Kaplon, the officer in charge of the investigation, and Margaret
2 Shields, a hearing officer in the License Division, testified
3 that Spinelli would not have been entitled to a hearing until the
4 completion of the investigation into McSherry’s report, which
5 Shields conceded could take “months to . . . years” to decide.
6 Furthermore, although due process may tolerate some period
7 of delay between a deprivation of property and a hearing, there
8 is no justification for indeterminately delaying a hearing for a
9 person in Spinelli’s circumstances while the investigation runs
10 its course. In Mallen, the Supreme Court held that,
11 [i]n determining how long a delay is justified in
12 affording a post-suspension hearing and decision, it is
13 appropriate to examine the importance of the private
14 interest and the harm to this interest occasioned by
15 delay; the justification offered by the Government for
16 delay and its relation to the underlying governmental
17 interest; and the likelihood that the interim decision
18 may have been mistaken.
19
20 486 U.S. at 242; see id. (noting that “the significance of such a
21 delay [on due process] cannot be evaluated in a vacuum”).
22 Here, the City’s blanket policy of only providing a hearing
23 after the investigation is completed cannot be squared with due
24 process. As we have noted, in this case the private interest was
25 strong, and the City’s delay in providing Spinelli with a prompt
26 hearing while her business was closed threatened significant
27 financial loss over an extended period. The City’s concession
28 that an investigation can take “months to years to decide,”
29 negates any claim that Spinelli’s investigation could be
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1 completed in a reasonable amount of time. As a blanket
2 proposition, where livelihoods may be at stake and the timing is
3 subject to the competences of varying investigators, the holding
4 of a hearing possibly years after a license suspension cannot
5 amount to a “justif[iable] . . . delay.” Id. See Cain v.
6 McQueen, 580 F.2d 1001, 1006 (9th Cir. 1978) (plaintiff’s due
7 process rights violated where school district delayed formal
8 hearing for two years); Brown v. Bathke, 566 F.2d 588, 593 (8th
9 Cir. 1977) (same).
10 Nor does such a delay serve any important “underlying
11 governmental interest.” Mallen, 486 U.S. at 242. In fact, we
12 believe the contrary to be true: Permitting a licensee both to
13 promptly join issue with the grounds for the investigation and to
14 present her views advances the City’s understanding of the
15 situation while facilitating prompt remediation, all in the
16 public interest. The usefulness of a prompt hearing is
17 exemplified by the instant case -- had Spinelli not been able to
18 afford an attorney, the City would have incurred significant
19 costs by investigating the Olinville security lapses, only to
20 determine months or years later that Spinelli could have remedied
21 the situation with a few basic improvements to Olinville. In the
22 meantime, the delay would have wiped out Spinelli’s livelihood.
23 We have no doubt that the delay conceded by the City would
24 have violated Spinelli’s due process rights. But what about the
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1 actual delay in this case that was limited to fifty-eight days
2 due to Spinelli’s self-help? Notwithstanding that ultimately it
3 did not take years for the City to restore Spinelli’s license and
4 return her firearms, we conclude that the delay Spinelli actually
5 experienced still exceeded the bounds of due process.
6 “[E]ven a brief and provisional deprivation of property
7 pending judgment is of constitutional importance.” Krimstock,
8 306 F.3d at 51-52; see Fuentes, 407 U.S. at 84-85 (“[I]t is now
9 well settled that a temporary, non[-]final deprivation of
10 property is nonetheless a ‘deprivation’ in the terms of the
11 Fourteenth Amendment.”); see also United States v. Monsanto, 924
12 F.2d 1186, 1192 (2d Cir. 1991) (en banc) (noting that a
13 “temporary and non[-]final” removal of a defendant’s assets,
14 pursuant to a federal criminal forfeiture statute and pending
15 resolution of the criminal case, “is, nonetheless, a deprivation
16 of property subject to the constraints of due process”)
17 (quotation marks omitted). Thus, once the City took possession
18 of Spinelli’s property pending investigation, it was incumbent
19 upon the City to provide a prompt hearing. The fact that
20 Spinelli was able to retain an attorney familiar with the
21 licensing system does not cure the City’s failure to provide
22 constitutionally adequate process by which Spinelli could be
23 heard.
24 In sum, nothing about the process employed by the City in
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1 this case provided any “safeguards [against] an unacceptable risk
2 of arbitrary and erroneous deprivations” of personal liberties.
3 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748, 793 (2005)
4 (Stevens, J., dissenting) (internal quotation marks and
5 alterations omitted). The fact that through Spinelli’s efforts
6 the period of her deprivation was reduced to fifty-eight days
7 neither cures the constitutional infirmity, nor erases the “risk”
8 of erroneous deprivation inherent in the City’s policy. Thus,
9 the second Mathews factor also favors Spinelli.
10 c. The Third Mathews Factor
11 The third Mathews factor examines “the Government’s
12 interest, including the function involved and the fiscal and
13 administrative burdens that the additional or substitute
14 procedural requirement would entail.” Mathews, 424 U.S. at 335.
15 The district court concluded that the third Mathews factor
16 weighed in the City’s favor because, in the post-September 11th
17 environment, the City had to act quickly in response to the
18 perceived security lapses. According to the district court, “the
19 seizure of the guns was necessary to secure an important public
20 interest, [and] there was a need for prompt action [by the
21 NYPD].”
22 The district court, however, applied the third Mathews
23 factor by weighing the City’s interest only with respect to pre-
24 deprivation due process, not post-deprivation due process. In
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1 the latter context, the existence of “exigent circumstances”
2 warranting a deprivation before holding a hearing is irrelevant.
3 The relevant inquiry is whether the City had a legitimate
4 interest in not providing Spinelli with meaningful post-
5 deprivation due process.
6 Our decision in Krimstock v. Kelly is instructive. The
7 Krimstock plaintiffs challenged a City statute that permitted the
8 City to hold motor vehicles that were seized as a result of DWI
9 offenses, but had not yet been subject to an actual forfeiture
10 proceeding (i.e., “post-seizure, pre-judgment” vehicles). 306
11 F.3d at 48. In assessing the third Mathews factor, the City
12 argued that drivers should not be permitted to challenge the
13 validity of the City’s retention of their vehicles prior to final
14 judgment, because (1) the drivers could sell the vehicles prior
15 to the forfeiture proceedings, id. at 64-65, and (2) the
16 possibility existed that the drivers might commit another DWI,
17 creating an “executive urgency,” id. at 66. We concluded that
18 there were other means of ensuring that the vehicles would not be
19 sold prior to forfeiture, id. at 65, and that the “urgency” that
20 permitted the City to seize the vehicles without a pre-
21 deprivation hearing did not extend to the post-deprivation
22 context, because by that time the drivers would have regained
23 their sobriety, thereby eliminating the “executive urgency,” id.
24 at 66. We held that, “promptly after their vehicles are seized .
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1 . . as alleged instrumentalities of crime, plaintiffs must be
2 given an opportunity to test the probable validity of the City’s
3 deprivation of the vehicles.” Id. at 70.
4 Here, the City’s asserted reasons for denying Spinelli a
5 prompt post-deprivation hearing are similar to those it advanced
6 in Krimstock, namely, that the urgent security situation in post-
7 September 11th New York City required the suspension of
8 Spinelli’s license and seizure of her firearms without providing
9 due process. But this logic only explains the absence of a pre-
10 deprivation hearing; it does not explain why Spinelli should not
11 be allowed to promptly challenge the City’s actions after the
12 suspension and seizure. The City’s policy is to deny a dealer
13 such as Spinelli her livelihood for an indeterminate period,
14 possibly years, even if the circumstances that led to the City’s
15 action have been remedied or never existed at all. Not only is
16 there no benefit to the City from such a hearing delay pending
17 investigation, but the unnecessary deprivation of the citizen’s
18 livelihood actually incrementally threatens to harm the City,
19 which is deprived of sales taxes, while increasing the likelihood
20 of the administrative and fiscal burdens of an unnecessary
21 investigation. Thus, the third Mathews factor favors Spinelli.
22 C. Summary Judgment Should Be Entered In Favor Of Spinelli
23 On Her Due Process Claim.
24 Although Spinelli’s license has been reinstated and her
25 firearms returned, her due process claim nevertheless remains a
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1 live controversy. Because she never received the process that
2 she was due, “[D]efendants must still answer for any damages they
3 may have caused with their [suspension of] [her] license without
4 due process.” Ginorio v. Contreras, 409 F. Supp. 2d 101, 108
5 (D.P.R. 2006). The district court must permit Spinelli to prove
6 her damages, by computing the loss from the time the City should
7 have provided a prompt post-deprivation hearing until December 5,
8 2001, when the suspension was lifted and the firearms were
9 returned.5
10 IV. The Tortious Interference Claim
11 The district court dismissed Spinelli’s state-law tortious
12 interference claim for lack of supplemental jurisdiction.
13 Reversal of Spinelli’s due process claim also reinstates the
14 district court’s supplemental jurisdiction over her state law
15 claim. See 28 U.S.C. § 1367; Zheng v. Liberty Apparel Co., 355
16 F.3d 61, 79 (2d Cir. 2003). If the aforementioned damages issue
17 is resolved promptly, the district court should then consider
18 whether to retain or dismiss without prejudice Spinelli’s
19 tortious interference claim.
20 CONCLUSION
21 For the foregoing reasons, the district court’s judgment is
5
1 The question of when a prompt post-deprivation hearing
2 should have been held, and hence the time during which damages
3 would accrue, we leave up to the district court to determine
4 after briefing and in light of the particular circumstances of
5 this case and opinion.
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1 AFFIRMED with respect to the appellants’ Fourth Amendment claim.
2 The district court’s judgment is REVERSED with respect to the
3 appellants’ due process claim, and the case is REMANDED to the
4 district court to enter summary judgment in favor of the
5 appellants on their due process claim and for the calculation of
6 damages to be awarded to the appellants on that claim. The
7 district court’s judgment dismissing the appellants’ tortious
8 interference claim is also VACATED, and the cause is REMANDED to
9 the district court for further proceedings consistent with this
10 opinion.
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