The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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SANTANDER CONSUMER USA, INC.,
Plaintiff, MEMORANDUM & ORDER
22-CV-4428 (EK)(ARL)
-against-
INCORPORATED VILLAGE OF HEMPSTEAD,
et al.,
Defendants.
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ERIC KOMITEE, United States District Judge:
Plaintiff Santander Consumer USA, Inc., a consumer
finance company, brought this action under 42 U.S.C. § 1983.
Pursuant to a financing arrangement, Santander held a security
interest in a 2015 Hyundai Sonata. In June 2021, police in the
Village of Hempstead observed the Sonata parked without license
plates on a public street. In response, they caused a tow
company, AAAA Nassau, Inc., to impound the car. Neither
Santander nor the Sonata’s owner paid the fees required to
retrieve the vehicle. As a result, Hempstead declared the
Sonata “abandoned.” Later, the Village transferred title to the
Sonata to AAAA as compensation for the tow company’s services.
Santander claims that the impoundment and transfer
constituted (1) an unlawful seizure in violation of the
company’s Fourth Amendment rights, (2) a taking without just
compensation in violation of the Fifth Amendment, and (3) a
violation of its Fourteenth Amendment due process rights. These
allegations are not novel; Santander and other finance companies
have successfully brought the same or similar claims against
other municipalities and cities in the Second Circuit.
Hempstead and Santander have now cross-moved for
summary judgment.1 For the reasons outlined below, Santander’s
motion is granted as to its takings and due process claims,
while Hempstead’s motion is granted on Santander’s Fourth
Amendment claim.
Background
The following facts are drawn from the parties’ Local
Rule 56.1 statements and the exhibits appended to their summary
judgment papers. Unless otherwise noted, the facts discussed
are undisputed.
A. Santander’s Security Interest in the Sonata
In September 2017, an auto dealership sold the Sonata
to Bobby Hogan pursuant to an installment contract. Def’s.
Local Rule 56.1 Counterstatement of Facts ¶ 4 (“Def.’s Rule
56.1”), ECF No. 48-1. Neither Hogan nor the dealership is a
party here. The day of Hogan’s purchase, the dealership
assigned the installment contract to Santander Consumer USA,
1 The Court previously entered default judgment against AAAA. Order
Adopting Report and Recommendation 1, ECF No. 54.
Inc. (“Santander”). Id ¶ 5. The contract provided that “[u]pon
[Hogan’s] default,” Santander could “repossess” the car. Pl.’s
Ex. A, Installment Contract 2, ECF No. 47-4. As of May 2021,
Hogan was in default. Def.’s Rule 56.1 ¶ 9.
B. AAAA Impounds the Sonata
On June 2, 2021, the Community Police Division in the
Village of Hempstead (“Hempstead” or the “Village”) Police
Department received a complaint concerning a blue 2015 Hyundai
Sonata. Def.’s Ex. 14, Scott Hovanec Aff. ¶¶ 3, 5, ECF No. 48-
4. The complaint stated that the vehicle was “potentially
abandoned or illegally parked” at the intersection of Smith
Street and Sealey Avenue in Hempstead. Id. ¶ 3. According to
the patrol officer who responded to the complaint, the
intersection is a “mixed use residential and commercial area”
with a “history of complaints from the [nearby] residents”
concerning “abandoned” vehicles. Id. ¶ 4.
Upon arriving at the intersection, the officer
observed that the Sonata had no license plates. Id. ¶ 5. He
then conducted a Vehicle Identification Number (“VIN”) search,
which showed that the Sonata had an expired Florida
registration. Id. He also inquired at several nearby
automobile repair shops as to whether the vehicle belonged to
them or their customers; none of the shops claimed it. Id. ¶ 6.
Based on this information, the officer concluded that the Sonata
was indeed abandoned, and requested that the police department
dispatch a tow truck. Id. ¶ 7.
Hempstead contracts with private companies that pay an
annual fee to be included on the Village’s rotating list of tow
companies. Def.’s Rule 56.1 ¶ 14. The Village apparently does
not pay the tow companies for their services; instead, the
listed companies are permitted to collect tow fees from
motorists claiming impounded vehicles. Id.
AAAA Nassau, Inc. (“AAAA”) was next on the list, and
it towed the Sonata to a secure lot. Id. ¶ 13. The next day,
Hogan informed Santander of the impoundment. Pl.’s Local Rule
56.1 Counterstatement of Facts (“Pl.’s Rule 56.1”) ¶ 6, ECF No.
45-1; Def.’s Rule 56.1 ¶ 17. About a week later, Santander
hired a repossession company, America Recovery, to retrieve the
Sonata. Pl.’s Rule 56.1 ¶ 7. America Recovery reached out to
AAAA, requesting that it provide pictures of the vehicle, but
AAAA refused. Def.’s Rule 56.1 ¶ 17.
C. Hempstead Provides Santander Notice of the Impoundment
Chapters 127 and 131 of Hempstead’s Municipal Code
govern the impoundment of vehicles in Hempstead. Def.’s Rule
56.1 ¶ 14; Def.’s Ex. 4, Village of Hempstead, NY, Code pt.2 ch.
127, § 127-2, -4 (“Hempstead Code”), ECF No. 48-3; Def.’s Ex. 5,
Hempstead Code § 131-4, ECF No. 48-3. The parties do not
dispute that Hempstead complied with its Code here. Def.’s Rule
56.1 ¶¶ 13-14; Pl.’s Rule 56.1 ¶¶ 5, 8.
To retrieve an impounded vehicle, a claimant must pay
the tow company a tow fee of $175; “a daily storage charge” of
$25; and a “surcharge of $45” for “vehicles towed without
ignition and / or door key.” Hempstead Code § 127-22; Def.’s
Rule 56.1 ¶ 31. The claimant must also obtain an “impound
release form” from the Hempstead Police Department, which
authorizes the tow company to release the vehicle. Pl.’s Rule
56.1 ¶ 7; Def.’s Ex. 6, Hempstead Police Dep’t Manual § 502.10,
ECF No. 48-3.
The Code provides that “[a]ny motor vehicle impounded
and not claimed within 10 days shall be deemed an abandoned []
vehicle.” Hempstead Code § 131-4(C). Hempstead deems a vehicle
“abandoned” when it remains unclaimed for the stated period,
regardless of the reason for the impoundment. Id. At the ten-
day mark, the Code calls for Hempstead to “make an inquiry
concerning the last owner of such [abandoned] vehicles” through
a title search. Id. § 131-4(C)(1). The Village must then
inform the last owner that the vehicle has been “recovered as an
abandoned vehicle” and that, if it is not claimed, Hempstead
will “acquire ownership.” Id. § 131-4(C)(2); Def.’s Ex. 8,
Hempstead’s Ltr. to Santander dated June 25, 2021, ECF No. 48-3.
If the title search shows that a lien exists, the “notice shall
also be sent to the lienholder.” Hempstead Code § 131-4(C)(2).
In accordance with this provision, Hempstead mailed
Santander a letter on June 25, after it identified the company
as a lienholder. Def.’s Rule 56.1 ¶¶ 13-16. Santander received
that letter on July 2. Id. ¶ 15. The letter stated that the
Sonata had been “taken into custody as an abandoned vehicle.”
Hempstead’s Ltr. to Santander dated June 25, 2021. It also
provided that Hempstead would “acquire ownership” “unless the
vehicle is claimed by the owner or the lienholder.” Id. And it
informed Santander that “if the vehicle [went] unclaimed,” the
company’s “lien will be extinguished.” Id. Santander did not
pay the required fees. Def.’s Rule 56.1 ¶ 20.
Hempstead provides claimants two weeks from the date
it sends notice to retrieve an impounded vehicle. Def.’s Ex.
12, Dep. of Hempstead Police Officer Mark Kirichenko
(“Kirichenko Dep.”) 30:19-25, ECF No. 48-3; Hempstead Code §
131-4(C)(2). According to Officer Kirichenko — the supervising
officer of Hempstead’s traffic unit — if no claimant comes
forward within that period, Hempstead will sell the vehicle at
auction or “transfer[]” ownership to the responsible tow company
“in lieu of tow and storage charges.” Hempstead Code § 131-
4(C)(2); see Kirichenko Dep. 8, 29-31. When a vehicle is sold
at auction, the sale proceeds “shall be held . . . for the
benefit of the owner . . . for a period of one year,” “less any
expenses” due to the tow company. Hempstead Code
§ 131-4(C)(4)(b). But when Hempstead transfers ownership of a
vehicle to the tow company, it provides no compensation itself
to the owner or lienholder. Id.; Def.’s Rule 56.1 ¶ 23;
Kirichenko Dep. 30-31, 38.
Hempstead provides no opportunity — either before or
after it deems a vehicle subject to transfer or auction — for a
hearing at which a claimant can contest the lawfulness of an
impoundment or the terms of a vehicle’s release. Kirichenko
Dep. 45:1-3; Def.’s Rule 56.1 ¶¶ 29-30; Pl.’s Rule 56.1 ¶¶ 8,
12.
D. Hempstead Transfers Title to AAAA
On September 16, Hempstead issued a Salvage
Certificate of Title to AAAA. Pl.’s Rule 56.1 ¶ 12; Def’s Rule
56.1 ¶ 33; see Def.’s Ex. 9, Salvage Certificate of Title, ECF
No. 48-3. The Certificate classified the Sonata as a “salvage
vehicle.” Id.; Kirichenko Dep. 37-8. That same day, Hempstead
and AAAA executed a Bill of Sale pursuant to which AAAA obtained
title to the Sonata at no cost. Def.’s Ex. 10, Bill of Sale,
ECF No. 48-3; Kirichenko Dep. 38. Neither Santander nor Hogan
received any compensation following the transfer.
In October 2021, Santander hired a law firm to assist
in retrieving the Sonata. Pl.’s Rule 56.1 ¶ 13. In response to
the firm’s letter requesting information on how to retrieve the
vehicle, the Hempstead Police Department advised that the Sonata
had been transferred to AAAA. Id. ¶¶ 13-16; Kirichenko Dep. 36-
37. The record provides no indication of what happened to the
Sonata after AAAA took possession of it. Pl.’s Rule 56.1 ¶ 16.
Legal Standard
Summary judgment is appropriate when there is no
genuine dispute of material fact, such that the movant is
entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
A factual dispute is genuine if a “reasonable jury could return
a verdict for the nonmoving party.” Frost v. N.Y.C. Police
Dep't, 980 F.3d 231, 242 (2d Cir. 2020). And “[a] fact is
material if it might affect the outcome of the suit under
governing law.” Id.2
When resolving cross-motions for summary judgment,
“the court must evaluate each party’s motion on its own merits,
taking care in each instance to draw all reasonable inferences
against the party whose motion is under consideration.” Coutard
v. Mun. Credit Union, 848 F.3d 102, 114 (2d Cir. 2017). The
movant bears the burden of showing that there is no genuine
dispute of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). If the non-movant would bear the burden of
persuasion on a given issue at trial, the movant can satisfy its
2 Unless otherwise noted, when quoting judicial decisions this order
accepts all alterations and omits all citations, footnotes, and internal
quotation marks.
burden of production either by “submitting evidence that negates
an essential element of the non-moving party’s claim,” or
“demonstrating that the non-moving party’s evidence is
insufficient to establish an essential element of the non-moving
party’s claim.” Nick’s Garage, Inc. v. Progressive Cas. Ins.
Co., 875 F.3d 107, 114 (2d Cir. 2017).
If the movant carries its initial burden, “the
nonmoving party must come forward with admissible evidence
sufficient to raise a genuine issue of fact for trial in order
to avoid summary judgment.” Jaramillo v. Weyerhaeuser Co., 536
F.3d 140, 145 (2d Cir. 2008). If the nonmoving party fails to
do so, the Court should grant summary judgment. In performing
this analysis, the Court resolves all ambiguities and draws all
inferences in favor of the nonmoving party. E.g., Gallo v.
Prudential Residential Servs., Ltd. P’ship, 22 F.3d 1219, 1223
(2d Cir. 1994).
Discussion
A. Hempstead is Entitled to Summary Judgment on
Santander’s Fourth Amendment Claim
Santander alleges three constitutional violations
pursuant to Section 1983. Compl. ¶¶ 80-94, ECF No. 1; Rev.
Stat. § 1979, 42 U.S.C. § 1983. Section 1983 provides a cause
of action against any person who, acting under the color of law,
deprives another of a right secured by the federal Constitution.
Cornejo v. Bell, 592 F.3d 121, 127 (2d Cir. 2010).
1. Hempstead is Subject to Monell Liability
As a municipality, Hempstead can only be held liable
under Section 1983 if its “policy or custom” was the “moving
force of the constitutional violation.” Monell v. Dep’t of
Social Services of City of New York, 436 U.S. 658, 694 (1978).
Hempstead does not dispute that it acted in accordance with its
impoundment policy here. Instead, Hempstead argues that
Santander’s alleged harm resulted from Santander’s “refusal to
follow the proper policies,” not Hempstead’s “purported action.”
Def.’s Opp’n to Pl.’s Mot. for Summary J. (“Def.’s Opp’n”) 20,
ECF No. 48. District courts in this Circuit have rejected
materially identical arguments, concluding that Monell liability
attaches when a city admits that it impounded a vehicle pursuant
to an established tow policy. Santander Consumer USA, Inc. v.
City of Yonkers, No. 22-CV-8870, 2024 WL 4817649, at *5
(S.D.N.Y. Nov. 18, 2024); see Mercedes-Benz Fin. Servs. USA, LLC
v. City of New York, 770 F. Supp. 3d 643, 654 (S.D.N.Y. 2025).
The Court agrees with those decisions. For its part,
Hempstead does not meaningfully contest their reasoning;
instead, the Village is basically arguing that no constitutional
violation occurred, sidestepping the Monell issue entirely. At
summary judgment, Monell requires the Court to ask whether
plaintiff has adduced sufficient evidence of “a direct causal
link between a municipal policy or custom and the alleged
constitutional deprivation.” Anilao v. Spota, 27 F.4th 855, 874
(2d Cir. 2022). On the undisputed record, Hempstead acted
pursuant to Village policy when it directed AAAA to impound the
Sonata and then transferred the vehicle’s title to AAAA. Def.’s
Rule 56.1 ¶ 23. This compels the conclusion that if, as
alleged, Hempstead’s actions violated the constitution, the
Village’s policy was the cause of that violation. See, e.g.,
Mercedes-Benz Fin. Servs., 770 F. Supp. 3d at 654. As no jury
could find otherwise on the causation issue, Hempstead is
subject to Monell liability.
2. The Seizure was Reasonable Under the Fourth
Amendment
Santander argues that Hempstead violated the Fourth
Amendment when it seized the Sonata, “prevent[ed] recovery
except on Hempstead’s terms,” and then transferred ownership to
AAAA. Pl.’s Mem. in Supp. of Mot. for Summary J. 17 (“Pl.’s
Mem.”), ECF No. 47-1. Hempstead argues that the Fourth
Amendment claim fails because the initial seizure was
reasonable. Def.’s Opp’n 6-7.
The impoundment of a vehicle is a seizure that must
comport with the Fourth Amendment. United States v. Lyle, 919
F.3d 716, 731 (2d Cir. 2019); see Krimstock v. Kelly, 306 F.3d
40, 69 (2d Cir. 2002), abrogated on other grounds by Culley v.
Marshall, 601 U.S. 377 (2024). At the same time, “police have
the authority, despite the absence of a warrant, to seize and
remove from the streets automobiles in the interests of public
safety and as part of their community caretaking functions . . .
.” Lyle, 919 F.3d at 728. When, in such circumstances, the
“initial seizure” is “reasonable,” the “failure to return” the
seized property does not “state a separate Fourth Amendment
claim.” Shaul v. Cherry Valley-Springfield Cent. Sch. Dist.,
363 F.3d 177, 187 (2d Cir. 2004); see Yonkers, 2024 WL 4817649,
at *8 (no Fourth Amendment violation when the government
transfers lawfully seized property).
“[W]hether a decision to impound is reasonable under
the Fourth Amendment is based on all the facts and circumstances
of a given case.” Lyle, 919 F.3d at 731. Relevant
considerations include whether the vehicle is parked on public
or private property and whether it could become a public
“nuisance” if left unremoved. Id. An officer’s determination
that a vehicle “ha[s] an expired registration” weighs in favor
of finding an impoundment reasonable, as “no one could lawfully
drive [such a vehicle] away.” United States v. Leeper, -- F.4th
--, 2026 WL 2339544, at *15 (2d Cir. Aug. 13, 2026). And an
“officer’s adherence to [] standardized criteria may be helpful
in evaluating the reasonableness of an impoundment.” Lyle, 919
F.3d at 731; see Colorado v. Bertine, 479 U.S. 367, 375-76
(1987).
On the summary judgment record here, no reasonable
jury could find that Hempstead’s seizure of the Sonata was
unreasonable. The officer on the scene attests that he
responded to a complaint concerning a “potentially abandoned”
vehicle on a “public roadway” with a “known history of
complaints . . . regarding abandoned vehicles.” Hovanec Aff. ¶¶
3-4. Upon identifying the Sonata as the reported vehicle, he
determined it to have been abandoned based on several factors,
including that it lacked license plates and had an expired, out-
of-state registration. Id. ¶¶ 5-7; see Muir v. Vill. of
Freeport, No. 23-CV-3904, 2025 WL 4789609, at *6 (E.D.N.Y. Aug.
13, 2025). In reaching that determination, he followed
Hempstead’s “standardized criteria,” Lyle, 919 F.3d at 731,
including by asking nearby repair shops whether they claimed the
Sonata. Hovanec Aff. ¶¶ 5-7. Santander disputes none of these
facts. Pl.’s Rule 56.1 ¶ 3; Def.’s Rule 56.1 ¶ 12.
These facts establish that the impoundment served a
“community caretaking function[].” Lyle, 919 F.3d at 728.
Because the Sonata had an expired registration, no one could
lawfully drive it away. Leeper, 2026 WL 2339544, at *15. The
Sonata also risked becoming a “nuisance” if left unremoved: it
was parked without plates at a public intersection where
abandoned vehicles often accumulated. Lyle, 919 F.3d at 731;
see Santander Consumer USA, Inc. v. Port Auth. of New York & New
Jersey, No. 20-CV-1997, 2023 WL 12028907, at *6 (E.D.N.Y. Dec.
4, 2023). The seizure was thus reasonable as a matter of law.
Because the seizure was reasonable, Hempstead’s
retention and subsequent transfer of the Sonata to AAAA cannot
provide an independent basis for a Fourth Amendment violation.
Shaul, 363 F.3d at 187; see Yonkers, 2024 WL 4817649, at *12.
Hempstead is therefore entitled to summary judgment on the
Fourth Amendment claim.
B. Santander is Entitled to Summary Judgment on its Fifth
Amendment Takings Claim
1. Hempstead Effected an Unlawful Taking
Santander argues that Hempstead committed a taking
under the Fifth Amendment when it transferred the Sonata to AAAA
as payment for AAAA’s tow services. Pl.’s Mem. 7-10.
The Takings Clause provides that “private property
[shall not] be taken for public use, without just compensation.”
U.S. Const. amend. V. A “classic taking” occurs when “the
government directly appropriates private property for its own
use.” Tahoe–Sierra Preservation Council, Inc. v. Tahoe Regional
Planning Agency, 535 U.S. 302, 324 (2002). The clause applies
to both real and personal property; thus, the “Government has a
categorical duty to pay just compensation when it takes your
car, just as when it takes your home.” Horne v. Dep’t of
Agric., 576 U.S. 351, 358 (2015).
To establish a violation of the Takings Clause, a
plaintiff must demonstrate that: they had a property interest
protected by the Fifth Amendment; they were deprived of that
interest for public use; and they were not afforded just
compensation. Cedar Point Nursery v. Hassid, 594 U.S. 139, 147-
51 (2021); see Ganci v. N.Y.C. Transit. Auth., 420 F. Supp. 2d
190, 195 (S.D.N.Y. 2005), aff’d, 163 F. App’x 7 (2d Cir. 2005).
The undisputed facts compel the conclusion that
Hempstead committed an unlawful Fifth Amendment taking when it
transferred the Sonata to AAAA without compensating Santander.
We are not the first to reach this conclusion: Judge Karas
addressed a functionally identical transfer in Yonkers, and held
the same. Yonkers, 2024 WL 4817649, at *13.
Property Interest Protected by the Fifth Amendment. A
security interest is property protected by the Fifth Amendment.
Armstrong v. United States, 364 U.S. 40, 48 (1960); see Ford
Motor Credit Co. v. N.Y.C. Police Dep’t, 503 F.3d 186, 190 (2d
Cir. 2007) (“Ford Motor Credit II”). The parties do not dispute
that Santander held a perfected security interest in the Sonata
at the time of the alleged taking. Def.’s Rule 56.1 ¶ 7; Pl’s
Rule 56.1 ¶ 8. Santander thus has a property interest protected
by the Fifth Amendment.
Deprivation for Public Use. The “total destruction by
the Government of all value of [a] lien[] . . . has every
possible element of a Fifth Amendment ‘taking.’” Armstrong, 364
U.S. at 48. Plaintiffs in Armstrong held liens on shipping
materials, which they supplied to a shipbuilder operating under
a government contract. Id. at 41. When the shipbuilder
defaulted, the government took title to the materials, leaving
the lienholders with no property to proceed against. Id. at 41-
42, 46. That constituted a taking. “Before the liens were
destroyed, the lienholders admittedly had compensable property.
Immediately afterwards, they had none. This was not because
their property vanished into thin air. It was because the
Government for its own advantage destroyed the value of the
liens . . . .” Id. at 48.
The record here closely resembles the facts in
Armstrong. Several weeks after the Sonata’s impoundment,
Hempstead informed Santander that the Village would “acquire
ownership of the vehicle” if it went unclaimed. Def’s Rule 56.1
¶ 28. Months later, Hempstead carried through with its stated
plan. It “extinguished” Santander’s lien by issuing the Salvage
Certificate, which classified the Sonata as a “salvage vehicle”
and created a new title. Id. ¶ 22; Hempstead’s Ltr. to
Santander dated June 25, 2021 at 1; see N.Y. Vehicle & Traffic
Law § 1224(3)(c)(McKinney) (providing that “ownership” of an
unclaimed vehicle “vest[s] in [the] local authority”). On the
same date, the Village executed a Bill of Sale conveying the
Sonata to AAAA. Def’s Rule 56.1 ¶ 33. Before the conveyance,
Santander’s lien entitled it to possess the Sonata upon
specified conditions. Id. ¶ 9. Afterwards, that lien was
worthless: title had passed to AAAA free of Santander’s
entitlement. Id. ¶¶ 28, 33; Armstrong, 364 U.S. at 48; see
Yonkers, 2024 WL 4817649, at *12 (city’s transfer of impounded
vehicle to tow company effected taking). Santander has thus
established that Hempstead effected a taking on the undisputed
facts.
Next, a taking is for a public use if it is
“rationally related to a conceivable public purpose.” Hawaii
Housing Authority v. Midkiff, 467 U.S. 229, 241 (1984). The
government’s transfer of property to a private party satisfies
that standard so long as the transfer advances a public
objective — such as increasing tax revenue — even if a private
party incidentally benefits. See Kelo v. City of New London,
Conn., 545 U.S. 469, 485 (2005). In contrast, “a purely private
taking” is “void,” Midkiff, 467 U.S. at 245, such that the
government cannot satisfy its obligation simply by paying “just
compensation.” Kelo, 545 U.S. at 477.
The uncontested record establishes that the taking was
for a public purpose. Hempstead conveyed the Sonata to AAAA as
payment for impoundment services, pursuant to a contract
obligating AAAA to impound vehicles at the Village’s request.
Def.’s Rule 56.1 ¶ 14; Pl.’s Rule 56.1 ¶ 12. Hempstead has a
“conceivable public purpose” in complying with that contract, as
the arrangement ensures that illegally parked or abandoned
vehicles are cleared from its roadways. Kelo, 545 U.S. at 485;
see Yonkers, 2024 WL 4817649, at *12. And transferring
unclaimed vehicles to AAAA and other contractors is rationally
related to that purpose: it compensates the tow company even
when tow fees remain unpaid, without the use of additional
public expenditure. Def.’s Rule 56.1 ¶ 14; see Yonkers, 2024 WL
4817649, at *12. That AAAA received a private benefit from the
transfer does not defeat Hempstead’s overarching public purpose.
See Kelo, 545 U.S. at 485.
Hempstead Provided No Compensation. Finally, the
Takings Clause requires that a municipality provide “just
compensation” at the time of the taking. Knick v. Twp. of
Scott, Pennsylvania, 588 U.S. 180, 190 (2019). The parties do
not dispute that Hempstead has provided no compensation to
Santander. Pl.’s Rule 56.1 ¶ 16; Def.’s Rule 56.1 ¶¶ 28, 33.
On the uncontested record, therefore, Santander has established
the elements of its takings claim; no reasonable jury could
conclude otherwise.
2. Hempstead’s Defenses to the Takings Claim Are
Unavailing
Hempstead raises two main arguments in opposition:
that the Fifth Amendment does not apply at all because the
Village seized the Sonata under the police power rather than
eminent domain, and that Santander abandoned its interest by
failing to claim the vehicle.
The Police Power Exception. Hempstead contends that
the “Fifth Amendment is not implicated because the Vehicle was
seized pursuant to police powers, not eminent domain.” Def.’s
Opp’n 16. Hempstead relies on Bennis v. Michigan, 516 U.S. 442,
452 (1996), for this contention. In Bennis, a man was convicted
of soliciting prostitution; the conduct occurred in a vehicle he
co-owned with his spouse. Id. at 443. The state brought a
civil action seeking to declare the vehicle a public nuisance
due to its involvement in the crime. Id. at 443-44. The state
prevailed, and thus assumed ownership of the car. Id. The
spouse then brought a takings claim, but the Court rejected it,
holding that “the government may not be required to compensate
an owner for property which it has already lawfully acquired
under the exercise of governmental authority other than the
power of eminent domain.” Id. at 452.
Hempstead’s reliance on Bennis ignores the key role of
the word “lawfully” in the quoted language. The Bennis majority
emphasized that Michigan’s acquisition of the vehicle was
“lawful” because it occurred only after the state had
established, at a forfeiture proceeding, that it had been used
in criminal activity. Id. at 446, 452-53. After concluding
that the forfeiture proceeding in question comported with due
process, the Court wrote of the Takings claim: “if the
forfeiture proceeding here in question did not violate the
Fourteenth Amendment, the property in the automobile was
transferred by virtue of that proceeding from petitioner to the
State.” Id. at 452. Accordingly, no taking occurred.
The opposite is true here: as the following section
concludes, Hempstead did not comply with the Due Process Clause
when it acquired the Sonata without any similar adjudication.
See Section III.C.1, below. Instead, the Village issued a
salvage title and conveyed it to AAAA based only on the fact
that no party had claimed it. Def.’s Rule 56.1 ¶ 33.
Hempstead’s broader contention — that the police power
precludes Santander’s takings claim — would extend that
exception further than the Takings Clause permits. The courts
of appeals have divided over “whether the Takings Clause
requires compensation when the government damages private
property pursuant to its police power.” Baker v. City of
McKinney, 145 S. Ct. 11, 11 (2024) (Sotomayor, J., statement
respecting denial of certiorari). The exception originates in
the common law rule that “in times of imminent peril . . . the
sovereign could . . . destroy the property of a few.” United
States v. Caltex (Philippines), Inc., 344 U.S. 149, 154 (1952).
Consistent with that origin, most courts of appeals to address
the exception have confined it to “law enforcement’s reasonable
and necessary destruction of property to protect public safety.”
Pena v. City of Los Angeles, 158 F.4th 1033, 1038 (9th Cir.
2025) (collecting analogous holdings from the Fourth, Fifth, and
Sixth Circuits). Only one circuit has held categorically, in a
published opinion, that the Takings Clause “does not apply” when
the state exercises its police power. Johnson v. Manitowoc
County, 635 F.3d 331, 336 (7th Cir. 2011).
However, two circuits that have addressed the
exception’s duration have concluded that it does not shield the
state from liability for property it retains after the police
response — and any related investigation — have concluded. See
Jenkins v. United States, 71 F.4th 1367, 1373 (Fed. Cir. 2023);
Frein v. Pa. State Police, 47 F.4th 247, 253 (3d Cir. 2022). In
Jenkins, for example, the state transferred two vehicles it had
seized during a drug investigation to an impound lot after its
investigation ended. Jenkins, 71 F.4th at 1370-71. The court
held that while “the police power may insulate [the state] from
liability for an initial seizure, there is no police power
exception that insulates [it] from takings liability for the
period after seized property is no longer needed for criminal
proceedings.” Id. at 1373. The Third Circuit adopted a similar
rule in Frein. 47 F.4th at 253.
The Second Circuit has acknowledged the potential
“clash of the takings clause . . . with the police power,” West
v. Village of Morrisville, 728 F.2d 130, 131 (2d Cir. 1984), but
does not appear to have addressed how the power extends to the
state’s retention of property. It has, however, addressed a
similar question under the Due Process Clause. Krimstock, 306
F.3d at 50. In Krimstock, the court held that owners of seized
vehicles were entitled to a post-seizure hearing concerning the
City’s “continued retention” of them, even if the initial
seizure was lawful. Id. at 49. That reasoning suggests (as
common sense would dictate) that, here, too, the state’s initial
entitlement to confiscate property may provide no justification
for retaining it. See Jenkins, 71 F.4th at 1370-71.
The Second Circuit has also recognized that the
government’s confiscation of property and its retention are
distinct acts for purposes of when a takings claim accrues.
Sikorsky v. City of Newburgh, New York, 136 F.4th 56, 62 (2d
Cir. 2025). Applying Tyler v. Hennepin Cnty., Minnesota, 598
U.S. 631, 647 (2023), the court held that when a municipality
confiscates property to satisfy a tax debt, the “harm” accrues
not when it claims the property, but when it “ret[ains] . . .
the surplus equity.” Sikorsky, 136 F.4th at 62; see Tyler, 598
U.S. at 647.
Krimstock and Sikorsky indicate that a lawful
confiscation does not insulate the state from takings liability
for its continued retention and later transfer of property. See
Jenkins, 71 F.4th at 1373. In contrast, the categorical rule
that Hempstead proposes would eviscerate the Takings Clause:
whenever the state’s acquisition of property occurred pursuant
to the police power, no takings claim could follow, even if its
retention and transfer of that property were unconnected to the
police power. See id. Such a standard would defeat the
Clause’s guarantee of providing just compensation for property
the state takes. Frein, 47 F.4th at 253; see Horne, 576 U.S. at
358. The Court thus adopts the more limited rule set out in
Jenkins. See 71 F.4th at 1373.
On the summary judgment record here, Hempstead cannot
rely on the police power exception. Hempstead points to no
evidence that its continued retention of the Sonata and later
transfer to AAAA served an investigative or other police
function. The uncontested evidence compels the contrary
conclusion: the Village assumed ownership over the Sonata and
transferred it to AAAA to compensate AAAA for its services.
Def.’s Rule 56.1 ¶¶ 23, 33.
Because the exception reaches only the impoundment, it
cannot “insulate” the Village from liability for the taking
established here. See Jenkins, 71 F.4th at 1373. And as shown
below, Hempstead’s conveyance to AAAA was independently unlawful
because Hempstead did not afford the opportunity to be heard
that due process requires. See Section III.C.1, below.
Santander Did Not Abandon Its Property Interest.
Hempstead next argues that Santander abandoned its property
interest by failing to retrieve the Sonata in accordance with
Hempstead’s Code. Def.’s Opp’n 18; see generally Tyler, 598
U.S. at 646 (referring to the “long tradition of States taking
title to abandoned property”). Abandonment requires the
“surrender or relinquishment or disclaimer of all rights in the
property.” Tyler, 598 U.S. at 647 (emphasis added). So, a
plaintiff does not abandon property merely by refusing to pay
taxes or other charges accrued in connection with its property.
Tyler, 598 U.S. at 647.
In support of its abandonment argument, Hempstead
points out that Santander failed to claim the Sonata in
accordance with Hempstead’s protocols. Def.’s Rule 56.1 ¶¶ 12,
28. The Village also points to Officer Kirichenko’s deposition
testimony that it only transferred the Sonata to AAAA several
months after Santander received notice of the impoundment.
Kirichenko Dep. 37. Santander does not dispute these facts.
Pl.’s Rule 56.1 ¶ 9.
No reasonable jury could find that Santander abandoned
its interest on this record. First, Santander’s failure to pay
tow fees does not alone establish abandonment. In Tyler, the
Court held expressly that Hennepin County could not “frame th[e]
failure [to pay property taxes] as abandonment to avoid the
demands of the Takings Clause.” 598 U.S. at 647.3 Second, the
Village’s classification of the Sonata as “abandoned” cannot
dictate the status of Santander’s constitutional rights. See
Ford Motor Credit Co. v. N.Y.C. Police Dep’t, 394 F. Supp. 2d.
600, 614 (S.D.N.Y. 2005) (“Ford Motor Credit I”). Third, and
perhaps most important, the uncontested record reveals that
Santander did take action to recover the Sonata: retaining
America Recovery within days of the impoundment, and later
retaining an outside law firm. Pl.’s Rule 56.1 ¶¶ 7, 16. A
creditor that hires a repossession agent and an outside law firm
has not “relinquished” its interest — if anything, it has
asserted it. Tyler, 598 U.S. at 647; see Ford Motor Credit I
394 F. Supp. 2d at 614.
Santander is therefore entitled to summary judgment on
its takings claim.
3 The Court gave no indication in Tyler that the claimant’s ability to
pay should affect this principle.
3. Santander’s Compensatory Damages for its Takings
Claim
Given the taking, Santander is entitled to just
compensation. In this regard, Santander argues that it is
“entitled to the value of the [Sonata] at the time [it] was
seized on June 2, 2021.” Pl.’s Mem. 24.
a. Santander’s Damages are Limited to the
Vehicle’s Fair Market Value at the Time of
the Taking, Less the Tow Fees Due
Compensation for a taking “must generally consist of
the total value of the property when taken, plus interest from
that time.” Knick, 588 U.S. at 190; see Ford Motor Credit II,
503 F.3d at 191. “Fair market value is the default measure of
just compensation.” Pung v. Isabella Cnty., Michigan, 146 S.
Ct. 1964, 1970 (2026).
When the government has a valid claim against
property, it may confiscate that property and retain up to the
value of its claim. Tyler, 598 U.S. at 639. In Tyler, Hennepin
County sold plaintiff’s condominium to recover unpaid property
taxes. Id. The property sold for more than the unpaid taxes,
and the County kept the surplus. Id. at 635. The Court held
that the County “had the power to sell [plaintiff’s] home to
recover the unpaid property taxes,” but could not “use the
toehold of the tax debt to confiscate more property than was
due.” Id. at 639.
In the instant context, the government commits no
taking when it auctions an unclaimed, impounded vehicle and
remits the proceeds to the lienholder minus tow expenses. HVT,
Inc. v. Port Auth. of New York & New Jersey, 798 F. Supp. 3d
349, 379 (E.D.N.Y. 2025). And Hempstead had the authority to
exact fees in connection with the impoundment. A municipality
may charge reasonable fees pursuant to its police power.
Harrell v. City of New York, 138 F. Supp. 3d 479, 492 (S.D.N.Y.
2015); see Mercedes-Benz Fin. Servs., 770 F. Supp. 3d at 662.
As such, Santander’s compensatory damages are limited to the
Sonata’s value in excess of the tow and storage fees due at the
time the taking occurred. Tyler, 598 U.S. at 642; HVT, Inc. v.
Port Auth. of New York & New Jersey, No. 15-CV-5867, 2018 WL
3134414, at *15 (E.D.N.Y. Feb. 15, 2018) (reducing damages by
unpaid tow fees), report and recommendation adopted, 2018 WL
1409821 (E.D.N.Y. Mar. 21, 2018).
Santander claims — incorrectly — that it is entitled
to the vehicle’s value as of the date of the impoundment. As
discussed above, however, the impoundment was a lawful seizure.
See Section III.A.2, above. Instead, Santander’s award must be
measured from September 16, 2021: the day on which Hempstead
“extinguished” Santander’s lien, issued the salvage title, and
transferred ownership of the Sonata to AAAA. Def.’s Rule 56.1 ¶
33; Pl.’s Rule 56.1 ¶ 12; see Hempstead’s Ltr. to Santander
dated June 25, 2021.
b. The Court Refers the Calculation of Damages
for a Report and Recommendation
The Court respectfully refers the calculation of
compensatory damages to Magistrate Judge Lindsay for a Report
and Recommendation. Damages should be calculated as the
Sonata’s fair market value, plus interest, measured from
September 16, 2021, less the total impoundment fees due as of
that date. See Section III.B.3.a, above.
C. Santander is Entitled to Summary Judgment On Its Due
Process Claim
1. Hempstead Violated Santander’s Due Process Rights
Santander argues that Hempstead violated its
procedural due process rights by failing to provide a hearing
concerning the impoundment and release of the Sonata before
transferring it to AAAA. Pl.’s Mem. 12. Hempstead argues that
mailing Santander notice of the impoundment furnished all the
process that the company was due. Def.’s Opp.’n 11. Hempstead
also argues that Santander never “requested that the Village
arrange a hearing before a neutral decisionmaker.” Id. at 13.
However, the Village concedes that it offers no hearing to
claimants, even upon request. Kirichenko Dep. 45:1-3. Thus,
Santander’s only way to retrieve the vehicle under Hempstead’s
Code was by paying the tow fees. Def.’s Rule 56.1 ¶ 31; Pl.’s
Rule 56.1 ¶¶ 8-9.
A “procedural due process claim is composed of two
elements: (1) the existence of a property . . . interest that
was deprived and (2) deprivation of that interest without due
process.” Bryant v. New York State Educ. Dep’t, 692 F.3d 202,
218 (2d Cir. 2012). The second element requires an assessment
of “what process plaintiff[] [was] due before [it] could be
deprived of that interest.” Kapps v. Wing, 404 F.3d 105, 118
(2d Cir. 2005).
The Court does not write on a blank slate on either
element: it is well-established that lienholders are entitled to
an opportunity to be heard before the state permanently deprives
them of their interest. E.g., Ford Motor Credit II, 503 F.3d at
193-94. Applying the Ford Motor decision, district courts have
consistently concluded that impoundment policies like
Hempstead’s violate the due process clause. Mercedes-Benz Fins.
Services, 770 F. Supp. 3d at 656-58 (collecting cases).
As to the first element, Santander’s security interest
is property protected by the Due Process Clause. Ford Motor
Credit II, 503 F.3d at 191. “[E]ven the temporary or partial
impairments to property rights that . . . liens[] and similar
encumbrances entail” are deprivations for purposes of due
process. Connecticut v. Doehr, 501 U.S. 1, 12 (1991). And when
property is transferred to a third-party clear of a lien, the
lienholder is “permanently deprive[d]” of its interest. TD Auto
Fin. LLC v. Cnty. of Putnam, No. 21-CV-9080, 2023 WL 6295116, at
*9 (S.D.N.Y. Sept. 27, 2023).
Hempstead deprived Santander of that interest in two
ways: temporarily and then permanently. First, Hempstead
conditioned the release of the Sonata on the payment of tow and
storage fees. Def.’s Rule 56.1 ¶ 31. The fees functioned as a
mechanic’s lien: Santander was required to pay them to retrieve
the vehicle. Am. Honda Fin. Corp. v. Township of Aston, 546 F.
Supp. 3d 371, 379 (E.D. Pa. 2021) (citing Doehr, 501 U.S. at
12). Second, Hempstead extinguished Santander’s lien when it
declared the Sonata “salvage vehicle” and transferred ownership
to AAAA. Def.’s Rule 56.1 ¶ 33. Hempstead thus “permanently
deprive[d]” Santander of its property interest. TD Auto Fin.,
2023 WL 6295116, at *9. No reasonable jury could find otherwise
on this record.
The next question is “whether existing state
procedures are constitutionally adequate.” Kapps, 404 F.3d at
112. When the state impounds a car and conditions its return on
the payment of fees, claimants are entitled to a hearing
concerning the lawfulness of the impoundment and the fees
charged. TD Auto Fin., 2023 WL 6295116, at *9 (citing Mathews
v. Eldridge, 424 U.S. 319, 333 (1976)); see United States v.
James Daniel Good Real Prop., 510 U.S. 43, 48 (1993). A
municipality need not provide a hearing before it imposes fees,
but must do so before a “final deprivation of” the impounded
vehicle. TD Auto Fin., 2023 WL 6295116, at *9; see Honda Lease
Tr. v. Malanga’s Auto., 152 F.4th 477, 487 (3d Cir. 2025).
Lienholders have the same right to a hearing as owners.
Mercedes-Benz Fin. Servs., 770 F. Supp. 3d at 659.
Hempstead offered Santander no hearing at any point
following the Sonata’s impoundment. Def.’s Rule 56.1 ¶ 26;
Pl.’s Rule 56.1 ¶¶ 8-10. This record leaves no doubt,
therefore, that Hempstead violated Santander’s due process
rights. See Mercedes-Benz Fin. Servs., 770 F. Supp. 3d at 659.
Hempstead’s argument that its letter to Santander was
sufficient process is unavailing. That letter gave “no
opportunity to challenge” the impoundment or the conditions of
release. Honda Lease Tr., 152 F.4th at 487. It thus did not
provide the process to which Santander was entitled.
Nor was Santander required to request a hearing in
the first instance. A “party’s ability to take steps to
safeguard its interests does not relieve the State of its
constitutional obligation” to provide adequate process.
Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 799 (1983);
see Krimstock, 306 F.3d at 50 (claimants of impounded vehicles
must “be given a prompt” hearing) (emphasis added). In any
case, even if Santander had requested a hearing, Hempstead has
no procedure for providing one. Kirichenko Dep. 45:1-3.
To be sure, Santander could have sought to compel
Hempstead to release the vehicle in an Article 78 proceeding.
N.Y. C.P.L.R. § 7801. But such a proceeding “does not provide
[the] prompt and effective means . . . to challenge the
legitimacy of the City’s” impoundment that the Due Process
Clause requires. Krimstock, 306 F.3d at 60; see HVT, Inc., 2018
WL 3134414, at *13.
Accordingly, Santander is entitled to summary judgment
on its due process claim.
2. Hempstead Must Provide Claimants of Impounded
Vehicles with an Opportunity to Be Heard
District courts have “considerable latitude to frame a
decree with input from the parties” to address a due process
violation. Nnebe v. Daus, 644 F.3d 147, 160 (2d Cir. 2011). In
cases addressing impoundment policies similar to Hempstead’s,
courts have directed the parties to submit a joint proposal to
address the lack of a hearing opportunity. E.g., Mercedes-Benz
Fin. Servs., 770 F. Supp. 3d at 659 (collecting cases). That
approach is also justified here.
The parties are therefore directed to submit a joint
proposal that provides claimants of impounded vehicles an
opportunity to be heard “at a meaningful time and in a
meaningful manner.” Armstrong v. Manzo, 380 U.S. 545, 552
(1965). The proposal must permit a claimant to challenge
whether (1) the impoundment was lawful and complied with
Hempstead’s Code, (2) the fees assessed are authorized under the
Code, and (3) the vehicle is properly subject to auction or
transfer under the Code. See, e.g., Proposed Hearing
Procedures, HVT, Inc. v. Port Authority of New York, 15-CV-05867
(E.D.N.Y. Aug. 8, 2024), ECF No. 126-1. The hearing must be
available before Hempstead declares a vehicle subject to
transfer or auction. See TD Auto Fin., 2023 WL 6295116, at *9.
3. Santander Cannot Recover Compensatory Damages
Twice
Santander seeks the Sonata’s fair market value in
compensatory damages for both its due process and takings
claims. See Pl.’s Mem. 23-24. But a plaintiff cannot “recover
twice for the same injury.” Bender v. City of New York, 78 F.3d
787, 794 n.5 (2d Cir. 1996). Santander’s due process injury is
the same as its takings’ injury — loss of its security interest.
Because compensatory damages are awarded on the takings claim,
Santander may not recover again for its due process claim.
Santander also seeks nominal damages. “Because the
right to procedural due process is absolute . . . the denial of
due process should be actionable for nominal damages.” Carey v.
Piphus, 434 U.S. 247, 266 (1978); see Mercedes-Benz Fin. Servs.,
770 F. Supp. 3d at 666. Santander is thus awarded $1 in nominal
damages.
D. Hempstead is Entitled to Summary Judgment on
Santander’s State Constitutional Claims
Santander also argues that Hempstead violated rights
under the New York State Constitution analogous to those secured
by the federal constitution. Pl.’s Mem. 21; see N.Y. Const.,
art. 1 § 6 (due process); id. § 7 (takings); id. § 12 (search
and seizure). But a private right of action under the state
constitution exists only when “remedies are otherwise
unavailable.” Antal v. Town of Riverhead, 665 F. App’x 9, 13
(2d Cir. 2016); see Brown v. State of New York, 89 N.Y.2d 172,
192 (1996). Santander has remedies available under Section
1983. Consequently, no private right of action exists under the
state constitution, and Hempstead is entitled to summary
judgment on Santander’s state claims.
E. Santander is Entitled to Declaratory Relief
Santander seeks a judgment declaring Hempstead’s
impoundment practices unconstitutional. Pl.’s Mem. 24-25. A
federal court “may declare the rights and other legal relations
of any interested party.” 28 U.S.C. § 2201(a). In determining
whether to issue a declaratory judgment, the court must consider
“(1) whether the judgment will serve a useful purpose in
clarifying or settling the legal issues involved; and (2)
whether a judgment would finalize the controversy and offer
relief from uncertainty.” Duane Reade, Inc. v. St. Paul Fire &
Marine Ins. Co., 411 F.3d 384, 389 (2d Cir. 2005).
Both considerations weigh in favor of declaratory
relief. A declaration would clarify Hempstead’s obligations to
lienholders with interests in vehicles impounded in Hempstead.
It would also offer Santander relief from future disputes
concerning impounded vehicles in Hempstead. See, e.g.,
Mercedes-Benz Fin. Servs., 770 F. Supp. 3d at 667; Toyota Lease
Tr. v. Vill. of Freeport, No. 20-CV-2207, 2023 WL 4443992, at
*12 (E.D.N.Y. Jan. 24, 2023), report and recommendation adopted,
2023 WL 4449333 (E.D.N.Y. Mar. 30, 2023). The Court therefore
declares:
Fifth Amendment Taking. Hempstead effects an unlawful
taking when it transfers ownership of an impounded
vehicle to a towing contractor as payment for towing
or storage fees without remitting to known
lienholder(s) the vehicle’s value in excess of the
fees lawfully owed.
Due Process Violation. Hempstead deprives known
lienholder(s) of property without due process when it
deems an impounded vehicle “abandoned” — and then
transfers or auctions the vehicle — without first
affording that lienholder notice and an opportunity to
be heard on the lawfulness of the impoundment, the
charges assessed, and the vehicle’s release.
Conclusion
For the foregoing reasons, Santander’s motion for
summary judgment on its takings and due process claims under 42
U.S.C. § 1983 is granted. Santander is also awarded $1 in
nominal damages and a declaratory judgment, as set forth above.
Hempstead’s motion as to Santander’s Fourth Amendment claim and
its claims under the New York State Constitution is granted.
On or before November 16, 2026, the parties are
directed to submit a joint proposal articulating a hearing
procedure that complies with the requirements set out in this
Order. The Court respectfully refers the calculation of
compensatory damages to Magistrate Judge Lindsay for a Report
and Recommendation.
SO ORDERED.
/s/ Eric Komitee
ERIC KOMITEE
United State
s District Judge
D ated: September 15, 2026
Brooklyn, New York