Challenge to the Seizing Without Due Process By New York City of State Tax Refunds for Transit Violations

As part of its High Impact Litigation Project, the Barbara McDowell Foundation, in conjunction with the law firm Drinker Biddle, the National Center for Law and Economic Justice, and New Economy Project, filed a federal class action lawsuit charging the NYC Transit Authority, an arm of the Metropolitan Transportation Authority, with systemic due process violations. The civil rights action challenges the Transit Authority for seizing people’s state tax refunds to collect on alleged default judgments for NYCTA violations, some going back 20 years or more, without legally-required notice or opportunity to review documentation that would support the Transit Authority’s actions.

In February 2019, Plaintiffs filed a federal class action lawsuit in the Southern District of New York on behalf of low-income New Yorkers whose state tax refunds were seized to collect on alleged default judgements for NYCTA violations, some going back 20 years or more, without adequate notice or opportunity to challenge the violations. A federal judge certified the class action in October 2020. 

The lawsuit challenged NYCTA’s pattern, practice, and policy of denying Plaintiffs’ rights under the Due Process Clause of the Constitution by: 

• Entering default judgments against them without adequate notice of the transit violation, the default penalties, or the judgment itself 

• Denying them meaningful opportunity to contest the transit violation, the default penalties, default judgment, or collection activities 

• Refusing access to documents necessary to challenge any default judgment;  

• Refusing to waive fees for reviewing documents in TAB’s possession that are necessary to contest the default judgments entered against them, despite Plaintiffs’ indigence. 

The National Center for Law and Economic Justice, New Economy Project, the law firm of Faegre Drinker Biddle & Reath, LLC, and Jerry Hartman, with support from the Barbara McDowell Foundation, have reached a preliminary settlement in the case.

Under the settlement, which remains subject to court approval, NYCTA will do the following: 

• Post information prominently at the Inquiry Desk window and online on how to request a Notice of Violation and other related information.

• Charge no more than $1 per copy of a Notice of Violation for at least five years following the settlement.

• Add a URL to the Notice of Violation so that people who receive an NOV can learn how to respond and the possible consequences of default. 

• Revise and update its guidance to hearing officers on what constitutes a good cause for vacating a default judgement. 

• Publish a complete list of its “good cause” standards for vacating default judgements. 

• Provide a Notice of Violation Status Letter, Payment Status Letter free of charge upon a respondents’ request for information. 

• If NYCTA is unable to locate a Notice of Violation for a default judgement within 60 days of a respondents request for a copy of the notice, NYCTA will cease enforcement, vacate the default judgement, and dismiss the Notice of Violation. 

Under prior procedures, people with alleged transit violations often could not obtain a copy of the violation, nor did the agency disclose the criteria for vacating a default judgment, leaving people unable to challenge judgments against them because they lacked the basic information necessary to do so. The settlement will significantly enhance fairness and due process at the agency by making this information available for free or at very low cost.