Federal Court Puts the Brakes on Gouging for Parking Tickets

For many years, the City of Yonkers deployed a strategy designed to make lease/lienholders pay for the costs of its attempt to collect unpaid parking tickets. Yonkers would boot a vehicle and then call in a private towing company to haul away and hold the vehicle hostage. Yonkers would then send the lease/lienholder a letter stating that the vehicle would be “sold” within 10 days unless the lease/lienholder satisfied all of Yonkers demands, including:

  • Payment of all tickets assessed against the seized vehicle
  • Payment of all tickets assessed against any other vehicle in which the lease/lienholder company held in interest ( a practice called “cross-vehicle ticketing”)
  • Payment to the tow yard of daily increasing ransom charges, euphemistically called “storage“ fees.

In many cases, Yonkers ended up giving the vehicle to the tow yard who applied for title in its own name thereby making a huge windfall at the expense of the lease/lienholder company and the customer who was powerless to stop this scheme.

Yonkers succeeded with this strategy because it had passed its own city law that appeared to give Yonkers total authority with no procedures that a lease/lienholder could use to protest or dispute Yonkers actions. In short, Yonkers made itself the sheriff, judge and jury and executioner with no accountability to the lease/lienholder.

On May 18, 2020, everything changed when Federal Judge Seibel ordered, in the case of Toyota Lease v City of Yonkers, that Yonkers must rewrite its city law to ensure that any attempt by Yonkers to place conditions on release of a vehicle is reviewed by an neutral officer who is independent from Yonkers. Consequently, Yonkers can no longer unilaterally demand that a lease/lienholder pay any monetary sums as a condition for a release of a seized vehicle. Instead, Yonkers has two options: release the vehicle to the lease/lienholder when asked or obtain a ruling that Yonkers’ charges are legitimate and appropriately assessed to the lease/lienholder.

This is an important victory for the automotive finance industry, but lease/lienholders should be on guard to make sure that Yonkers actually follows through and stops its abusive practices. After having had a free hand for so many years, it is likely that Yonkers may resist making the changes ordered by the court. Going forward, if Yonkers refuses to release a vehicle unless money is paid, please let us know immediately so that prompt action can be taken to bring Yonkers’ noncompliance to the attention of the Federal Court. The same is true for demands made by any of Yonkers’ stable of tow agents which are: Don-Glow Towing, APOW Towing, Transit Towing, A&J towing and County Towing.

The bottom line is that the day when a city can make a lease/lienholder pay for the cost of the city’s parking ticket enforcement program is over. The federal courts have recognized that lease/lienholders have rights that cannot be trampled upon by aggressive parking ticket bureaus simply because the city is looking for an easy and cheap way to solve its parking problem. Hostage and ransom schemes do not fit within modern standards for enforcement of parking tickets against the rights of lease/lienholders. “Cross-vehicle ticketing” is a particularly abusive tactic that should be stamped out once and for all. If anyone experiences a parking ticket hostage and ransom scheme or “cross-vehicle ticketing” in another city or town, I would like to hear about it and will be glad to take it on.

If you have questions, please feel free to email me at rudy@meolalaw.com.

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