Has the NY Housing Crisis Turned into a Due Process Crisis?

• May 13, 2019
• by Gail Kagan
• Legislation
• Associations
• Articles

Editor's note: This article was written by Gail Kagan as a follow-up to the article she wrote regarding New York Bill 1258. The opinions expressed here belong to Gail Kagan.

On May 7th, speaker of the City Council Corey Johnson pushed a vote on a series of 17 bills to address the housing crisis in New York City, including proposal Int 1258A which is very likely to adversely impact the process serving industry.

This vote was propelled by an eye-opening series of articles in the New York Times regarding the re-gentrification and unfair displacement of tenants in the city. The New York City Council was pushed to action. Johnson tasked the housing committee, chaired by Robert Cornegy, Jr., with drafting up proposals addressing the problem. In the package was Int 1258A, a bill dealing with process server audits.

As legislative chair for the New York State Professional Process Server Association (NYSPPSA), I have worked on this bill with Councilman Cornegy’s staff since the first hearings were held in December of last year.

In the version originally proposed, Int 1258A required the commissioner of the department of consumer affairs to annually audit the records of at least 20% of licensed process servers who have served process for a housing court procedure. It also required that litigants be informed when a process server or process serving agency has failed its audit.

At the hearing, I testified that:

• NYC already has the strictest regulations of process service in the nation.
• The Department of Consumer Affairs (DCA) can and does audit process servers’ records at their discretion when deemed necessary.
• The current city rules require that servers report the findings of every traverse hearing which takes place when a consumer complains about improper service to the DCA.
• From 2012 to 2016, the audits conducted by the DCA have produced violations in record keeping which revolve around the hand-written log book. This logbook is an exact duplication of the digital record in a much less efficient and more mutable method. This handwritten record is required for every service or attempt of service in a bound and paginated book with no erasures, abbreviations, or dittos allowed. It also consists of over 32 fields requiring handwritten text and numbers. These records are required to be completed at the time of service while the server is in the street. This makes it almost impossible for a server to produce 100% perfect records every time. The fines for any record-keeping errors are onerous and has been the cause of attrition of process servers, reducing our numbers by over 70% since the rules went into effect.
• Digital records include the description of the attempt or service and GPS tagging which is uploaded to a 3rd party provider. They are designed to be tamper-proof and are a much more secure and transparent way to keep records. They are also easier to review and are more in step with current technology. Certified copies of these records are available on request and process servers would not be subject to audits of the digital records.
• Any unwarranted audit will surely cause a drop in the already low number of process servers in New York.

If you read the New York Times article that generated this reaction from the city, you will notice that the same landlords are cited time and again. It is also apparent that any sewer service cited was discovered by the already existing rules and those servers are no longer licensed to serve. So, while the system works on servers, it’s not effective in stopping unscrupulous landlords.

Based on our experiences in the street along with research of the city rules of service, proposing simple changes to the city codes and rules could make a big difference. I believe the following measures will work to reassert fairness into a housing court action if implemented:

• Start by giving the landlord consequences if he or she is serving unregulated process.
• Educate consumers by serving an additional notice with the service documents explaining that the papers served signal the start of an eviction proceeding and offer them information on where to get help.
• Make sure that the tenant receives the service papers by ensuring that documents in housing cases when served by conspicuous service (308.4) are never slipped under the door where they can be ignored, stepped on, sent out with the trash, or eaten by the family dog.

The proposals and comments I made coincided with what the committee heard from the Department of Consumer Affairs. The DCA agreed that audits would more than likely find recordkeeping errors that would not aid in revealing improper service. The cost to the city to do these audits would be extensive and do nothing to further the City Council’s goals.

The cost to the city to do these audits would be extensive and do nothing to further the City Council’s goals.

The DCA also made their own amendments to the proposed bill, suggesting that audits would be triggered if a server was accused of improper service by a consumer or lost multiple traverse hearings, setting a pattern of improper service.

In March, Speaker Johnson’s central staff proposed a new version of Int 1258A. Ignoring the DCA and NYSPPSA’s advice and the concern about audits, the bill now proposed that every licensed server turn in all the affidavits they served each month. This would triplicate the documentation; a server would have to provide and generate an avalanche of thousands of paper documents that the DCA was expected to review. NYSPPSA reacted strongly to the new proposal, pointing out how ridiculous it was. This section of 1258A was eventually withdrawn.

On the last day of April 2019, the final versions of the bill package, including Int 1258A, were revealed. Speaker Corey Johnson decided that this legislation must be voted on and 1258 was going to be included. No more discussion would be had.

On Friday, while I was attending the National Association of Professional Process Servers (NAPPS) Annual Convention in Orlando, two of NYC’s legislative staff called me saying they understood our concerns and realized the detrimental consequences of this bill on the process serving industry. They explained that the bill would be coming to a vote soon and encouraged me to organize our opposition. Our NAPPS and NYSPPSA members responded, as did many of the independent contractors, making hundreds of phone calls and emails. Our appeals were ultimately ignored.

The vote was scheduled to go forward on 17 of the proposals including Int 1258A. On the morning of May 7th, several colleagues and I were in the room to watch the vote and implore the Housing Committee not to pass 1258A. I spoke to as many council members as would stop to listen, but I was told by almost everyone that I was too late even though this was the first time they were hearing from us. I confronted Mr. Cornegy as he walked into the room with one of his staff, who I had worked with for months. I stood there, all 5’2” of me, looking up at this towering 6’8” man and asked him what was he doing?

He responded puzzled; hadn’t his staff addressed our concerns regarding the duplicitous records? He looked at his staffer, who just shook his head, silently agreeing with me. The councilman said, “talk with me after the vote” and walked into the meeting room.

The Housing Committee was stretched out before us on a long dais with Mr. Cornegy in the center. In front of them on the desk were my latest flyer and a letter citing our position on the bill. I made clear the likely consequences of losing more servers. Our process server contingent took the front two rows and we were no more than ten feet from the committee. We were holding signs asking that they vote NO on Intro 1258A. I looked each one of those council members in the eye. Not everyone had the backbone to look back at me and the ones that did dropped eye contact quickly. They knew this was wrong.

Mr. Cornegy introduced the package of bills citing the press and mentioning the New York Times piece which highlighted the unfair practices of New York landlords. He explained that they were voting on all 17 proposals as one. He called for the vote. It was unanimous on all but proposal 1258A. One brave councilmember abstained to vote and stood against his colleagues.

As the council stood up to leave, I confronted them, declaring that they had just done process servers in NYC a great disservice. I queried, “who do you expect to protect your due process rights now that you have dismissed the process serving industry?”

Now, the already beleaguered process servers of NYC are the scapegoat of an ill-thought-out rule created by a knee jerk reaction to pressure from a problem we did not create. Meanwhile, the city’s politicians and Speaker Corey Johnson specifically gain glory for reacting to but not actually fixing the situation.

But this is not over. The bill still must be implemented and we haven’t had our last word.

After the meeting, Mr. Cornegy spoke with us. He stated that he would make a new bill addressing the issues we brought up and specifically that the landlords should have consequences for serving unregulated process. He addressed the issues we will now face.

He seemed to understand that our industry, which should be thriving, is failing as fewer process servers are willing to work in the city. He says he wants to encourage business owners and the small independent contractors. He promises to look at the reasons process servers are not able to flourish because of overburdensome and archaic rules. Have we made a friend in the city? Time will tell.