Even as a “seasoned” (NYU Law ‘69) commercial litigator, I am often surprised by the finite  issues that are subject both to a trial court disposition and, also, to  a subsequent appellate adjudication. A recent decision by the Appellate Division, involving parking violations, falls into that category of (to me) unusually demarcated legal proceedings.  Matter of Nestle Waters North America, Inc. v. City of New York, 2014 NY Slip Op 05609 (1st Dept. July 31, 2014).

Nestle Waters was a “hybrid class action for Article 78 relief, declaratory judgment, injunctive relief and remission of fines unlawfully imposed seeking to, inter alia, annul the determination of respondent Appeals Board of Parking Violations Bureau of the City of New York (The Board).”

Nestle Waters “challenge[d] the New York City Parking Violation Bureau’s policy of deeming “IRP” an accurate description of out-of-state “APPORTIONED” license plates for purposes of adjudicating parking summonses.  “[The Court found] that such policy violate[d] Vehicle and Traffic Law (VTL) § 238(2), which requires an accurate description of the five mandatory elements on a parking ticket.

IRP is “a privately-administered registration reciprocity agreement, under which the highway use tax paid by the truck owner is apportioned among the states and provinces in which the trucks are used.  Trucks registered under the IRP are issued license plates labeled ‘APPORTIONED’”.

Supreme Court denied the petition. The First Department reversed on the authority of the decisions of the Court of Appeals in Matter of Ryder Truck Rental, Inc. v. Parking Violations Bureau, 62 N.Y. 2d 667, 476 N.Y.S. 2d 285 (1984) and Matter of Wheels, Inc. v. Parking Violations Bureau, 80 N.Y. 2d 1014, 592 N.Y.S. 2d 659 (1992).

In Ryder Truck, the Court of Appeals summarized the prior proceedings:

Appellant instituted this proceeding under CPLR article 78 to challenge the determination of the Parking Violations Bureau Appeals Board of the Transportation Administration of the City of New York which upheld the validity of six notices of violation (summonses) issued to appellant for parking violations. The notices were served pursuant to the provisions of subdivision 2 of section 238 of the Vehicle and Traffic Law which provides: “2. A notice of violation shall be served personally upon the operator of a motor vehicle who is present at the time of service, and his name, together with the plate designation and the plate type as shown by the registration plates of said vehicle and the expiration date; the make or model, and body type of said vehicle, shall be inserted therein. The notice of violation shall be served upon the owner of the motor vehicle if the operator is not present, by affixing such notice to said vehicle in a conspicuous place. Whenever such notice is so affixed, in lieu of inserting the name of the person charged with the violation in the space provided for the identification of said person, the words ‘owner of the vehicle bearing license’ may be inserted to be followed by the plate designation and plate type as shown by the registration plates of said vehicle together with the expiration date; the make or model, and body type of said vehicle. Service of the notice of violation, or a duplicate thereof by affixation as herein provided shall have the same force and effect and shall be subject to the same penalties for disregard thereof as though the same was personally served with the name of the person charged with the violation inserted therein.” In each instance the notice of violation was served pursuant to the prescriptions of the statute applicable when the owner of the vehicle is not present, but in each the expiration date of the registration was omitted. The Appeals Board, in determining that this omission did not invalidate the notices or require their dismissal, concluded that the statutory provision for insertion of the expiration date is directory rather than mandatory.

The decision of Supreme Court:

In Supreme Court respondent Bureau sought to sustain the notices, not on the ground on which the Appeals Board relied, but rather on the alternative theory that the presence of lines drawn through the space for insertion of the expiration date indicated that such dates were not available at the time the notices were served. Supreme Court rejected this theory for lack of proof in the record to sustain it and accordingly annulled the Appeals Board determination.

The determination of the Appellate Division:

On appeal the Appellate Division upheld the determination of the Appeals Board on the ground relied on by the Appeals Board, namely that the statutory prescription as to expiration date is directory only.

The Court of Appeals reversed and reinstated Supreme Court’s order annulling the determination of the Appeals Board and dismissed the six notices of violation, concluding that:

The provisions explicitly prescribed by the Legislature in the statute are mandatory…To hold otherwise would be by extension similarly to characterize each of the other items enumerated in the statute, for we perceive no warrant or justification in the articulation of the statute for differentiation between the expiration date and the plate designation, the plate type, the make or model, or the body type of the vehicle. To hold all these elements directory only would evidently be to eviscerate the legislative enactment. It is for the Legislature rather than the judiciary, should the former be disposed to do so, to distinguish between these elements by designating some directory and others mandatory.

In Wheels, the Court of Appeals reiterated and summarily expanded Ryder Truck:

In Matter of Ryder Truck we declared that five identification elements, including plate type type, on a parking ticket were mandatory, and the omission of one element required dismissal…We now amplify that decision and hold that a misdescription of any of the five mandatory identification elements also mandates dismissal.

The Nestle Waters factual issues were adjudicated against the construct of Ryder Truck and Wheels.

Companies like Nestle, with fleets of trucks operating across state lines, typically obtain “apportioned” license plates from their state of registration. These plates are labeled “APPORTIONED” because they are issued under the International Registration Plan (IRP)…

On May 24, 2012, Nestle appeared at a hearing before the New York City Department of Finance Commercial Adjudications Unit to contest the 38 summonses, arguing that they should be dismissed because the “plate type was described incorrectly.” Nestle submitted the following evidence to the hearing examiner in support: (1) the registration cards of the trucks to which the summonses were issued; (2) a letter from an “IRP Supervisor” of the New Jersey Motor Vehicle Commission stating that “APPORTIONED” is the correct plate type issued in the State of New Jersey [and t]here is no plate type IRP”; (3) a letter from the New Jersey Motor Vehicle Commission stating that it “only issues plates with the designation APPORTIONED’ displayed at the bottom for use on vehicles registered under the International Registration Plan [and it] does not issue plates with the designation IRP displayed on them”; (4) a sample New Jersey “APPORTIONED” license plate; and (5) an excerpt from the New York City Department of Finance Commercial Adjudications Unit’s “Administrative Law Judge Manual” (The Manual) pertaining to “Conflicts in Plate Type Descriptions.” The administrative law judge rejected Nestle’s argument, adjudicated Nestle guilty on each of the summonses and imposed fines in the total amount of $3,835.00.

On June 26, 2012, a hearing was held before the Appeals Board. In its appeal submission, Nestle claimed that the basis for the appeal was the rejection of its defense of “wrong plate type” and the failure of the administrative law judge to consider the evidence submitted. It further argued that the administrative law judge failed to abide by the Manual’s requirement that “[i]n assessing the accuracy of plate type for a foreign registered vehicle, the ALJ’s basic concern is whether the summons writer accurately transcribed to the summons what appeared on the plate.” The administrative law judge panel held that, “[u]pon review of the entire record before us, we find no error of fact or law. The Judge’s decision is upheld.”

The First Department summarized the pleadings and prior proceedings:

In October, 2012, Nestle filed this proceeding seeking a judgment granting it the following relief: (1) vacating and annulling the final determination made by respondents in June 2012, on the ground that such determination was arbitrary, capricious and contrary to law; (2) directing respondents to remit all fines paid by Nestle in connection with the 38 disputed summonses; (3) “[d]eclaring the [respondents’] policy of deeming IRP’ an accurate description of APPORTIONED’ license plates issued outside New York State is violative of Section 238 of the Vehicle and Traffic Law.”

The petition alleged that respondents had “adopted a policy of regarding IRP’ as an accurate description of out-of-state APPORTIONED’ license plates, because trucks with APPORTIONED’ plates are registered under the International Registration Plan.” However, it further contended that “IRP” is “not an accurate description of the actual, physical plate because states, other than New York, do not issue IRP’ plates or registrations” but instead issue “APPORTIONED” plates and registrations.

Petitioner alleged that a “large number of summonses describing the plate type as IRP’ have been issued to out-of-state trucks with APPORTIONED’ plates and registrations, because the automatic coding machines issued to New York City parking enforcement personnel contain a shortcut key for IRP’…whereas APP’ must be keyed in manually.”

The issue before the Court:

Pursuant to CPLR § 7803(3), the relevant inquiry in this case is “whether a determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion.” As a general rule, an action is deemed to be arbitrary if it is taken without a sound basis in reason and generally without regard to the facts…“An agency’s interpretation of a statute it is charged with implementing is entitled to deference if not irrational or unreasonable…”

Petitioner’s arguments:

In this case, as indicated, petitioner argues that the determination of the Appeals Board was based upon an error of law in deeming an “IRP” an accurate description of out-of-state “APPORTIONED” license plates and registrations, for purposes of adjudicating parking summonses. The New York City Parking Violations Bureau issued the disputed 38 summonses pursuant to VTL § 238(2)[.]

The requirements of the Vehicle and Traffic Law:

Thus, VTL § 238(2) provides the requirements for initiating a prosecution for parking violations. The statute sets forth five mandatory identification elements which may not be omitted from a parking summons if it is to survive a jurisdictional challenge and avoid dismissal [citing Wheels and Ryder]. The mandatory five elements are 1) plate designation 2) plate type 3) expiration date of registration; 4) make or model of vehicle and 5) body type of vehicle.

The applicability of Ryder Truck and Wheels:

The Court of Appeals has required strict compliance with the requirements of VTL § 238(2). For example, in Ryder Truck Rental, the Court of Appeals reversed the Appellate Division and reinstated the Supreme Court’s decision annulling a PVB Appeals Board decision which upheld notices of violation that failed to include the expiration date for the vehicle’s registration, as required by the statute. The Court said: “The provisions explicitly prescribed by the Legislature in the statute are mandatory…To hold all these elements directory only would evidently be to eviscerate the legislative enactment”.

Further, in Matter of Wheels, the Court of Appeals amplified its decision in Ryder Truck by holding that the five mandatory identification elements, which may not be omitted from a parking summons if it is to avoid dismissal, may also not be misdescribed…Thus, a misdescription of any of the five mandatory identification elements also constitutes a jurisdictional defect mandating dismissal.

And the grounds for reversal:

Similarly, this Court is bound by the plain language of VTL 238(2). We must conclude that the New York City Parking Violations Bureau’s policy of deeming “IRP” an accurate description of out-of-state “APPORTIONED” license plates for purposes of adjudicating parking violations violates the statute. As indicated, VTL § 238(2) requires that a notice of parking violation shall include the “plate type as shown by the registration plates of said” vehicle” (emphasis added). It is undisputed that each ticket here described the “vehicle type” as “IRP,” while the corresponding license plate described the vehicle type as “APPORTIONED.” The choice of the words in the statute “as shown” by the vehicle plate is evidence that the legislature intended strict compliance with the statute, and “new language cannot be imported into a statute to give it a meaning not otherwise found therein.”

We are cognizant that the terms “IRP” and “APPORTIONED” are used interchangeably by the New York City Parking Violations Bureau as a convenience. For instance, the automatic coding machines issued to New York City parking enforcement personnel contain the short cut key of “IRP,” whereas “APP” or “APPORTIONED’” must be keyed in manually. Nevertheless, the statute simply does not allow for such administrative expedience, and neither this Court nor an administrative agency is permitted to effectively amend a statute to permit such shortcut. That is a task for the Legislature, if it sees fit.

In short, the petition should have been granted because the final determination made by respondent to adjudicate petitioners guilty on each of the summonses was contrary to well established law. Dismissal of the traffic summonses was warranted since they failed to comply with the mandatory requirements of VTL § 238(2) [citing Wheels and Ryder].

Lesson learned:  In the event you receive a summons for a parking (or other motor vehicle related) violation, carefully scrutinize the ticket for any omission or transcriptional error, however minute.  Not every ticket is a sacrosanct – and any error is subject to scrutiny.