Diaz v. Paterson; Diamond v. Paterson, No. 05-2685 (2d Cir. 2008)

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05-2685-cv;06-3942-cv(L), 06-3992-cv(con) Diaz v. Paterson; Diamond v. Paterson 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2007 (Argued: April 1, 2008 Decided: October 17, 2008) Docket Nos. 05-2685-cv, 06-3942-cv(L), 06-3992-cv(con) - - - - - - - - - - - - - - - - - - - -X OSCAR DIAZ, Plaintiff-Appellant, - v.DAVID PATERSON,* individually and in his official capacity as Governor of the State of New York, ANDREW CUOMO, individually and in his official capacity as Attorney General of the State of New York, THOMAS P. DI NAPOLI, individually and in his official capacity as Comptroller of the State of New York, HECTOR DIAZ, individually and in his official capacity as Clerk of the County of the Bronx, and on behalf of a defendant class of New York County Clerks and CHURCHILL MORTGAGE INVESTMENT CORPORATION, Defendants-Appellees. * Pursuant to Federal Rule of Appellate Procedure 43(c)(2), Governor David Paterson is automatically substituted for former Governor Eliot Spitzer as the defendant in these cases. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 - - - - - - - - - - - - - - - - - - - X JEHED DIAMOND and JOSEPH BETESH, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, - v.DAVID PATERSON, individually and in his official capacity as Governor of the State of New York, ANDREW CUOMO, individually and in his official capacity as Attorney General of the State of New York, THOMAS P. DI NAPOLI, individually and in his official capacity as Comptroller of the State of New York, GLORIA D AMICO and SHARON A. O DELL, individually and in their official capacity as Clerk of the County of Queens and as Clerk of Delaware County respectively, and on behalf of a defendant class of New York County Clerks, CHRISTOPHER JONES and ABRAHAM BETESH, Defendants-Appellees. - - - - - - - - - - - - - - - - - - - X Before: JACOBS, Chief Judge, KEARSE and POOLER, Circuit Judges. Appeals from final judgments dismissing, as a matter of 37 law, putative class actions alleging that New York s lis 38 pendens law offends constitutional due process and equal 39 protection guarantees. Affirmed. 40 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 JANET BENSHOOF (Toby Golick, Cardozo Bet Tzedek Legal Services, on the brief), New York, New York, for PlaintiffsAppellants. BENJAMIN ROSENBERG, Chief Trial Counsel (Barbara D. Underwood, Solicitor General, Michael S. Belohlavek, Senior Counsel, on the brief), for Andrew M. Cuomo, Attorney General of the State of New York, New York, New York, for Defendants-Appellees. DENNIS JACOBS, Chief Judge: These putative class actions challenge the 18 constitutionality of the New York law, codified at N.Y. 19 Civil Practice Law & Rules 6501-6516 ( Article 65 ), that 20 allows a plaintiff who brings a lawsuit claiming interest in 21 real property to file a lis pendens with respect to the 22 property. 23 pendency ) alerts future buyers or interest holders of a 24 prior claim. 25 501 U.S. 1 (1991), that because the law does not give the 26 property owner prior notice or opportunity to be heard, it 27 violates the Fourteenth Amendment s Due Process Clause. 28 Plaintiffs also challenge the law under the Equal Protection 29 Clause. 30 The lis pendens (also called a notice of Plaintiffs argue, under Connecticut v. Doehr, These appeals are taken from final judgments, entered 3 1 on April 28, 2005 and February 14, 2007, in the United 2 States District Court for the Southern District of New York 3 (Stein, J.), dismissing the actions for failure to state a 4 claim. 5 certification. 6 as applied to plaintiffs does not offend the Constitution, 7 as construed by Doehr. Appeal is also taken from the denial of class We affirm because New York s lis pendens law 8 9 10 I Under the common law, the pendency of a lawsuit (a lis 11 pendens) claiming an interest in real property constituted 12 constructive notice of the claim to the world. 13 not good faith purchasers had actual notice, they took the 14 property subject to the outcome of the action if they 15 acquired the property while the suit was pending. 16 generally 13 Jack B. Weinstein, et al., New York Civil 17 Practice: CPLR ¶ 6501.01, at 65-4-4.1 (2008). 18 prevent[ed] a defendant from destroying the value of a 19 judgment in the plaintiff s favor by conveying the disputed 20 property during the suit, id. at 65-5, and assure[d] that 21 a court retained its ability to effect justice by preserving 22 its power over the property, 5303 Realty Corp. v. O & Y 4 Whether or See This 1 Equity Corp., 64 N.Y.2d 313, 319, 476 N.E.2d 276, 280 2 (1984), quoted in In re Sakow, 97 N.Y.2d 436, 440, 767 3 N.E.2d 666, 669 (2002). 4 immediately upon service of process; no separate notice or 5 filing was required. 6 property was required to search all of the court records to 7 determine whether the land to be purchased or encumbered was 8 the subject of pending litigation. 9 Civil Practice: CPLR ¶ 6501.01, at 65-5. 10 Common law lis pendens attached A potential purchaser of real 13 Weinstein, New York To mitigate the burden imposed by the common law, New 11 York, like most states, replaced it by statute. The New 12 York lis pendens statute was first enacted in 1823. 13 current version, codified in Article 65, provides that a 14 plaintiff in an action in which the judgment demanded would 15 affect the title to, or the possession, use or enjoyment of 16 real property, may file a notice of pendency with respect 17 to the real property that is the subject of the action. 18 N.Y. C.P.L.R. 6501. 19 effects constructive notice of the action: A person whose 20 conveyance or incumbrance is recorded after the filing of 21 the notice is bound by all proceedings taken in the action 22 after such filing to the same extent as a party. The See Filing of the notice of pendency 5 Id. 1 A notice of pendency must be filed in the office of 2 the clerk of any county where property affected is 3 situated. 4 sufficient claim affecting the real property must be filed 5 with the notice of pendency, unless the complaint was filed 6 previously. 7 notice is conditional on the service of a summons on the 8 defendant property owner within 30 days. 9 notice is valid for three years, and may be extended for an 10 additional three years upon a showing of good cause prior to 11 expiration of the initial term. 12 law, [t]he notice of pendency does not itself actually 13 restrain transfer of the property, as an incumbrance or a 14 lien: it merely provides notice that an action is pending 15 that may affect title to the property. 16 York Civil Practice: CPLR ¶ 6501.11, at 65-24. 17 Id. 6511(a). Id. A complaint that states a legally 6501, 6511(a). Effectiveness of the Id. 6512. Id. 6513. The As at common 13 Weinstein, New Cancellation of a notice of pendency is available under 18 two sections of the statute. Upon motion of any person 19 aggrieved, section 6514 provides for discretionary 20 cancellation if the plaintiff has not commenced or 21 prosecuted the action in good faith, and for mandatory 22 cancellation for specified failures to advance the 6 1 underlying action, pursuant to a stipulation, or upon final 2 disposition of the underlying lawsuit. 3 6514(a),(b),(d). 4 may direct the party who filed the notice to pay any costs 5 and expenses occasioned by the filing and cancellation, in 6 addition to any costs of the action. 7 6515 provides that in all actions (except those seeking 8 mortgage foreclosures, partition, or dower), a property 9 owner may move to substitute a bond for the notice of N.Y. C.P.L.R. An order cancelling a notice of pendency Id. 6514.1 10 pendency if adequate relief can be secured to the 11 plaintiff. Section 12 Id. 6515(1). New York s notice of pendency has been described as an 13 extraordinary privilege, Israelson v Bradley, 308 N.Y. 14 511, 516, 127 N.E.2d 313, 315 (1955), and a unique 15 provisional remedy, In re Sakow, 97 N.Y.2d at 441, 767 16 N.E.2d at 670, principally because it may be filed without 17 advance notice or prior judicial review, and does not depend 18 upon a showing that the plaintiff is likely to prevail on 19 the merits. See id. Accordingly, Article 65 is narrowly 1 A property owner who seeks damages for misuse of a notice of pendency may also bring an action for malicious prosecution or abuse of process. 13 Weinstein, New York Civil Practice: CPLR ¶ 6514.11, at 65-71. 7 1 interpreted by New York courts, both as to its procedural 2 requirements and as to its substantive application. 3 5303 Realty Corp., 64 N.Y.2d at 320-21, 476 N.E.2d at 281. 4 The many uses of the notice are set forth in the margin.2 5 Although a court must uphold a notice of pendency if the 6 underlying complaint sets forth a claim within the scope of 7 C.P.L.R. 6501, the court may evaluate the claim s legal 8 sufficiency and, if facially insufficient, the court should 9 cancel the notice. See See 13 Weinstein, New York Civil 10 Practice: CPLR ¶ 6501.05, at 65-11; Gallagher Removal Serv., 11 Inc. v. Duchnowski, 179 A.D.2d 622, 623, 578 N.Y.S.2d 584, 12 585 (App. Div. 1992) (cancelling notice of pendency based on 2 A notice of pendency is mandatory in an action to foreclose a mortgage or to quiet title. See 13 Weinstein, New York Civil Practice: CPLR ¶ 6501.06, at 65-13. Filing of a notice of pendency has been found proper in the following types of actions: partition, ejectment, dower, specific performance of a contract to convey an interest in real property, to impress a lien upon real property, to compel the reconveyance of an interest in specific real property, to rescind a referee s deed, to establish and enforce a mechanic s lien on real property, to establish the plaintiff s undivided interest in real property, to foreclose a vendee s or vendor s lien, to convert a purported deed into a mortgage, to set aside a fraudulent conveyance, to enjoin violation of a zoning ordinance, to enforce an easement, to void an agreement creating an easement, in a stockholder s derivative suit to compel the reconveyance of real property to the corporation, to impress a constructive trust on real property, and for an accounting. See id. ¶ 6501.06, at 65-13-17. 8 1 an expired option to purchase property). 2 II 3 4 Jehed Diamond, Oscar Diaz and Joseph Betesh each 5 brought an action challenging New York s notice of pendency 6 statute principally on due process grounds. 7 Betesh lawsuits were consolidated in the district court, and 8 their appeal from the dismissal of the consolidated action 9 was heard in tandem with the appeal from the dismissal of The Diamond and 10 the Diaz action. Unless otherwise indicated, the following 11 facts are taken from the three complaints and supporting 12 documents, which we assume to be true in reviewing a Federal 13 Rule of Civil Procedure 12(b)(6) dismissal. 14 Staten Island Univ. Hosp., 511 F.3d 126, 128 (2d Cir. 2007). Reddington v. 15 16 Diamond. Jehed Diamond and her husband together 17 purchased a home in Delaware County, New York. 18 title was in the husband s name, the couple intended to hold 19 the property jointly as marital property pursuant to New 20 York s domestic relations laws. 21 learned that her husband had secretly dissipated marital 22 assets to fuel a gambling addiction. 9 Although In May 2002, Diamond Diamond immediately 1 demanded that her husband yield title to the marital home, 2 which was the only asset remaining from the marriage. 3 May 17, 2002, her husband conveyed the deed to Diamond, who 4 was a bona fide purchaser for fair consideration. 5 On Diamond contracted with a buyer for the property in 6 July 2002. Around the same time, Diamond learned that her 7 husband had obtained a series of personal loans from several 8 individuals, including their neighbor Christopher Jones. 9 October 1, 2002, approximately six weeks before the On 10 scheduled closing, Jones filed a lawsuit and a notice of 11 pendency in Delaware County pursuant to N.Y. C.P.L.R. 6501, 12 alleging that over the prior year he had loaned $90,000 to 13 Diamond s husband in reliance on his verbal promise to repay 14 out of the proceeds from the eventual sale of the house, and 15 that the May 2002 transfer of the property to Diamond was a 16 fraudulent conveyance intended to evade repayment of the 17 loan (although Jones did not allege that Diamond knew of the 18 debt at the time). 19 note evidencing the debt. 20 Jones complaint attached a promissory Diamond filed an order to show cause in state court, 21 seeking to vacate the notice, and the state court set a 22 hearing for the day before the closing. 10 In order to induce 1 Jones to lift the notice of pendency in time to allow 2 Diamond to complete the sale of the property, Diamond agreed 3 to place $100,000 from the sale of the property in escrow 4 pending the outcome of Jones lawsuit. 5 notice of pendency was cancelled, and the sale closed on 6 schedule. 7 that the adverse effect of the notice was perpetuated in the 8 ensuing litigation between Diamond and Jones over the escrow 9 agreement. Accordingly, the Diamond s federal complaint alleges, however, As the record on appeal arguably reflects, 10 Diamond s constitutional and other defenses were rejected by 11 the state court; the escrow agreement weakened Diamond s 12 leverage in settlement negotiations; and she ended up paying 13 Jones most of the money in escrow. 14 In June 2003, Diamond filed a complaint (the first of 15 the three class action complaints at issue here), asserting 16 claims under 42 U.S.C. § 1983 on the ground that Article 65 17 permits the deprivation of property without due process, and 18 illegally discriminates against married persons who are 19 creditors of their spouses by depriving them of access to 20 lis pendens procedures available to non-spousal creditors. 21 The complaint also alleged violations of Diamond s New York 22 state constitutional rights to due process and equal 11 1 protection. The complaint named as defendants New York s 2 governor, attorney general and comptroller (individually and 3 in their official capacities), the Delaware County Clerk in 4 his official capacity, and Mr. Jones. 5 preliminary and permanent injunctive relief, declaratory 6 relief, actual and punitive damages, and costs and fees. Diamond sought 7 8 9 Diaz. In 2003, after Oscar Diaz fell behind in payments on his home mortgage, Churchill Mortgage Investment 10 Corporation foreclosed and filed a notice of pendency in 11 Bronx County. 12 various predatory lending defenses and state law claims of 13 deceptive practices. Diaz alleges in his complaint that he had 14 In December 2003, Diaz (represented by the same counsel 15 as Diamond), filed a federal putative class action complaint 16 that was referred as a related case to Judge Stein. 17 Diaz complaint alleged federal due process and equal 18 protection violations, seeking the same relief as Diamond 19 (but did not assert state law claims). 20 the same state defendants, the Bronx County Clerk, and 21 Churchill. 22 district court that a sale had been negotiated to pay off The The complaint named In March 2005, Diaz s counsel advised the 12 1 the mortgage, and that the state foreclosure action would be 2 dismissed and the notice of pendency cancelled. 3 continued to prosecute the federal action, on the theory 4 that the notice of pendency compelled him to sell his home 5 at a price below market. Diaz 6 7 Betesh. In 1996, Joseph Betesh exercised a power of 8 attorney granted by his mother to transfer to himself his 9 mother s two-family house in East Elmhurst, New York. His 10 mother died sometime later. 11 damaged by fire and rendered largely uninhabitable. 12 August 2004, Betesh signed a $60,000 loan commitment for a 13 home equity loan at a New York City-subsidized interest 14 rate. 15 and notice of pendency in Queens County alleging that the 16 1996 transfer had been improper because the power of 17 attorney was invalid. 18 could not receive the home equity loan because of the notice 19 of pendency. 20 In June 2004, the house was In On August 12, 2004, Betesh s brother filed a lawsuit Betesh was soon informed that he In October 2004, Betesh, acting pro se, filed an order 21 to show cause in state court to dismiss his brother s action 22 and to revoke the notice of pendency; but relief was denied 13 1 on procedural grounds. Betesh then retained a lawyer, who 2 moved to dismiss the state court action and vacate the 3 notice on state law grounds, including that the suit was 4 time-barred. 5 Betesh filed his federal putative class-action complaint, 6 alleging the same federal due process claim made in the 7 Diamond and Diaz complaints, but not alleging equal 8 protection or state law claims. 9 same state defendants, the Queens County Clerk, and Betesh s That motion was pending when, in May 2005, The complaint named the 10 brother. 11 plaintiffs. 12 rent because the notice of pendency interfered with the 13 repair of the house. 14 Betesh sought the same relief as the other He seeks damages on the theory that he lost After the federal complaint was filed, the state court 15 action against Betesh was dismissed, and the notice of 16 pendency was ultimately cancelled. 17 18 III 19 The first of the federal complaints was filed by 20 Diamond in June 2003, and was dismissed in September 2003 21 under the Rooker-Feldman doctrine, on the ground that 22 Diamond was seeking review of the state court judgments 14 1 concerning the same constitutional issues. See District of 2 Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983); 3 Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923). 4 Diamond s appeal was pending, the same counsel filed the 5 Diaz action, which elided the Rooker-Feldman objection 6 because Diaz had not litigated the constitutional issues in 7 state court. 8 as a related case. 9 that Diaz had arranged to sell his home and to remove the While The Diaz action was assigned to the same judge In March 2005, counsel advised the court 10 notice of pendency, developments that would render moot the 11 request for injunctive relief. 12 for injunction, counsel identified Betesh as a potentially 13 suitable plaintiff, and moved on his behalf to intervene in 14 the Diaz action.3 15 In order to preserve a claim Betesh s motion was never decided because in April 2005 3 As noted above, the lis pendens notices in all three underlying actions ultimately were cancelled, rendering moot plaintiffs claims in federal court for injunctive relief. However, these appeals are not moot insofar as plaintiffs seek damages. See Loyal Tire & Auto Ctr., Inc. v. Town of Woodbury, 445 F.3d 136, 150-51 (2d Cir. 2006). Because we uphold the constitutionality of the New York statute, we do not need to consider whether the moot claims for injunctive relief were nonetheless justiciable under the exception for harms that are capable of repetition, yet evading review. Weinstein v. Bradford, 423 U.S. 147, 149 (1975) (per curiam) (internal quotation marks omitted). 15 1 the district court dismissed the Diaz complaint under Rule 2 12(b)(6). 3 2005). 4 injunctive relief was mooted by the sale of the property, 5 id. at 269-70; (2) the claim for money damages against state 6 officials failed because there was no allegation of personal 7 involvement and because the Eleventh Amendment bars such 8 relief against government defendants, id. at 270-71; (3) 9 Diaz s claim for declaratory relief on equal protection See Diaz v. Pataki, 368 F. Supp. 2d 265 (S.D.N.Y. The court held that: (1) Diaz s claim for 10 grounds failed because Article 65 is not discriminatory on 11 its face and because there was no allegation of illegal 12 discrimination in connection with the application of the 13 statute in Diaz s case, id. at 272; (4) the facial challenge 14 to the statute failed because Diaz did not allege facts 15 showing there exists no set of circumstances under which the 16 statute would be valid, id. at 274-75; and (5) Diaz s as- 17 applied challenge failed under the three-part analysis set 18 forth in Connecticut v. Doehr, 501 U.S. 1, 11 (1991), id. at 19 276-78. 20 complaint. 21 22 Betesh thereafter filed his separate class-action In July 2005, Diamond s appeal was resolved by a remand after the Supreme Court decided Exxon Mobil Corp. v. Saudi 16 1 Basic Indus. Corp., 544 U.S. 280 (2005), which rendered the 2 Rooker-Feldman doctrine plainly inapplicable to Diamond s 3 case. 4 dismissal order without prejudice to reactivation after a 5 final decision in the Diamond and Betesh cases. 6 Diaz was allowed to withdraw his appeal of the In August 2006, the district court consolidated the 7 Diamond and Betesh cases, and denied a motion for class 8 certification on the ground that the proposed class 9 representatives did not have claims or defenses typical of 10 the claims or defenses of the class. 11 23(a)(3). 12 the Diamond/Betesh action under Rule 12(b)(6), for 13 essentially the same reasons as set forth in its Diaz 14 opinion. 15 485962 (S.D.N.Y. Feb. 14, 2007). 16 See Fed. R. Civ. P. In February 2007, the district court dismissed See Diamond v. Pataki, No. 03 Civ. 4642, 2007 WL The Diamond/Betesh appeal is now heard in tandem with 17 the reactivated Diaz appeal. Five issues are presented: 18 (1) whether New York s lis pendens statute violates due 19 process, on its face or as applied, by failing to provide 20 notice and an opportunity to be heard; (2) whether the 21 statute unconstitutionally discriminates against women in 22 violation of equal protection; (3) whether the statute 17 1 violates the fundamental right of access to the courts; 2 (4) whether state officials involved in the operation of the 3 lis pendens law are entitled to qualified immunity; and 4 (5) whether to certify a putative plaintiff class of 5 property owners subject to the law and a putative defendant 6 class of all county clerks. 7 questions, and hold that Article 65 does not offend either 8 federal due process or equal protection guarantees. 9 not consider whether Article 65 obstructs access to the We decide the first two We do 10 courts because this issue is raised for the first time on 11 appeal. 12 (2d Cir. 2006). 13 complaints, we do not reach the issues of qualified immunity 14 or class certification. See Bogle-Assegai v. Connecticut, 470 F.3d 498, 504 Because we affirm the dismissal of the 15 IV 16 17 The grant of a motion to dismiss is reviewed de novo. 18 See Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 19 (2d Cir. 2003). 20 21 22 A. Due Process Parties whose rights are to be affected are entitled 18 1 to notice and an opportunity to be heard . . . at a 2 meaningful time and in a meaningful manner. 3 Shevin, 407 U.S. 67, 80 (1972) (internal quotation marks 4 omitted). 5 affecting property interests traditionally has required a 6 two-part analysis: 7 deprivation of a significant property interest protected 8 by the Fifth Amendment, id. at 86; and (2) if so, what 9 process is due in the particular circumstances, Mathews v. Fuentes v. Evaluation of due process challenges to statutes (1) does the statute authorize the 10 Eldridge, 424 U.S. 319, 334 (1976). See also Ford Motor 11 Credit Co. v. NYC Police Dep t, 503 F.3d 186, 190 (2d Cir. 12 2007). 13 As to the first inquiry, defendants argue that the 14 filing of a notice of pendency does not trigger due process 15 scrutiny because it does not deprive plaintiffs of property: 16 a notice of pendency creates no property right in another 17 party and merely prevents the seller from withholding the 18 fact that there are adverse claims to the realty; it is the 19 underlying lawsuit that potentially affects the owner s 20 property interest. 21 forfeiture cases that, in dicta, deem lis pendens a less 22 restrictive alternative to the ex parte seizures of Defendants principally rely on criminal 19 1 property that violate due process. See, e.g., United States 2 v. James Daniel Good Real Prop., 510 U.S. 43, 62 (1993); 3 United States v. 4492 S. Livonia Rd., 889 F.2d 1258, 1265 4 (2d Cir. 1989) (same); cf. Kirby Forest Indus., Inc. v. 5 United States, 467 U.S. 1, 15 (1984) ( It is certainly 6 possible . . . that the initiation of condemnation 7 proceedings, publicized by the filing of a notice of lis 8 pendens, reduced the price that the land would have fetched, 9 but impairment of the market value of real property incident 10 to otherwise legitimate government action ordinarily does 11 not result in a taking. ). The cited cases (which in any event do not involve a 12 13 direct challenge to a lis pendens statute) must be read in 14 light of Doehr, which held that due process concerns may be 15 triggered by something less than a complete, physical, or 16 permanent deprivation of real property. 17 12. 18 property rights that attachments, liens, and similar 19 encumbrances entail are sufficient to merit due process 20 protection. 21 22 Doehr, 501 U.S. at [E]ven the temporary or partial impairments to Id. A notice of pendency is arguably such a similar encumbrance --though two circuit courts have ruled 20 1 otherwise.4 2 pendens effects a significant taking of property, Fuentes, 3 407 U.S. at 86, because we conclude, in deciding what 4 process would be due, that New York s lis pendens statute 5 provides all the process that is due in respect of the 6 claimed property interests at stake. 7 on the framework set forth in Doehr for analyzing due 8 process objections to prejudgment remedies. 9 10 In any event, we need not decide whether a lis In so holding, we rely Doehr, a challenge to Connecticut s prejudgment attachment statute, arose from an assault and battery tort 4 See United States v. Register, 182 F.3d 820, 837 (11th Cir. 1999) ( [A] filing of a lis pendens pursuant to state statute does not constitute a seizure and does not affect property interests to an extent significant enough to implicate the Due Process Clause of the Fifth Amendment. ); Aronson v. City of Akron, 116 F.3d 804, 811 (6th Cir. 1997) ( In addition to impairing the owner s ability to sell his interest in the property, a lis pendens [like the corrupt activity lien under consideration, which does not constitute a seizure of property in the ordinary sense of that term ] . . . may taint the owner s credit rating, may place an existing mortgage in technical default, may make it impossible to obtain a second mortgage, and may have other adverse consequences. But . . . this would not trigger the notice and hearing requirement. (emphasis added) (internal quotation marks omitted)) ; cf. United States v. Jarvis, 499 F.3d 1196, 1203 (10th Cir. 2007) ( The [lis pendens] notice is intended to preserve the property rights in existence at the time the litigation commences, but does not create new or additional property rights. ). A district court in this Circuit decided pre-Doehr that a lis pendens is not a taking for due process purposes. See United States v. Rivieccio, 661 F. Supp. 281, 297 (E.D.N.Y. 1987). 21 1 claim. The victim sued Doehr, the alleged assailant, and 2 filed a $75,000 notice of attachment on Doehr s home as 3 security for any judgment. 4 the time, Connecticut law authorized prejudgment attachment 5 of real estate without affording the owner notice or prior 6 hearing or bond, as long as the plaintiff in the underlying 7 suit, or some competent affiant, verified that there is 8 probable cause to sustain the plaintiff s claims. 9 (internal quotation marks omitted). See Doehr, 501 U.S. at 5. At Id. at 5 The attachment effected 10 a seizure of the property, impairing Doehr s ability to sell 11 or encumber it, although not preventing continued use and 12 enjoyment. 13 Doehr receive service of the complaint in the underlying 14 action, and the notice of attachment. 15 argued that the statute as applied to him violated due 16 process, and the Supreme Court agreed. Only after the sheriff attached the property did Id. at 7. Doehr Id. at 13-18. 17 To ascertain whether and what process was due, the 18 Doehr Court adapted the Mathews balancing test (employed in 19 cases of government deprivation of property), to govern 20 private disputes in which one party enlists the state to 21 assert prejudgment control over the other party s property. 22 Doehr, 501 U.S. at 10. The Doehr test examines three 22 1 factors: first, consideration of the private interest that will be affected by the prejudgment measure; second, an examination of the risk of erroneous deprivation through the procedures under attack and the probable value of additional or alternative safeguards; and third, . . . principal attention to the interest of the party seeking the prejudgment remedy, with, nonetheless, due regard for any ancillary interest the government may have in providing the procedure or forgoing the added burden of providing greater protections. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Id. at 11. Applying that test, the Court first found significant 18 impact on Doehr s private interest: 19 clouded title, and impaired ability to alienate the 20 property. 21 tainted credit rating, Id. Second, as to the risk of erroneous deprivation, the 22 probable cause standard for obtaining an attachment order 23 was deemed one-sided, self-serving, and conclusory. 24 at 14. 25 valid complaint, the statute allowed deprivation of the 26 defendant s property when the claim would fail to convince a 27 jury[ or] when it rested on factual allegations that were 28 sufficient to state a cause of action but which the 29 defendant would dispute. Id. Because probable cause required only a facially Id. at 13-14. 23 The likelihood of 1 error was heightened in the context of intentional tort 2 actions seeking indefinite damages, and insufficiently 3 mitigated by the availability of a post-attachment 4 adversarial hearing. 5 Id. at 14-15. Third, the Court concluded that the interests of the 6 tort plaintiff in the ex parte attachment of the house were 7 minimal because the assault and battery claim bore no 8 relation to the real property, and the plaintiff had no 9 existing interest in Doehr s real estate when he sought the 10 attachment. 11 exigent circumstance had been identified, such as a claim 12 that Doehr was about to take steps that would render his 13 property unavailable to satisfy a judgment, id.; that 14 Connecticut was one of only three states to authorize 15 attachment in situations that do not involve any 16 purportedly heightened threat to the plaintiff s interest, 17 id. at 18; and that accurate ex parte assessments of the 18 merits, which are feasible in commercial disputes, are hard 19 to make when the claim sounds in tort, id. at 17. 20 21 Id. at 16. The Court considered that no Because all three Doehr factors raised substantial due process concerns, the Court concluded that the statute was 24 1 2 unconstitutional as applied in that case.5 Chief Justice Rehnquist filed a concurrence to 3 emphasize that the Court s holding did not disturb settled 4 law upholding the constitutionality of prejudgment remedies 5 where the plaintiff had a pre-existing interest in the 6 property, such as a mechanic s lien or a lis pendens. 7 Doehr, 510 U.S. at 27-29 (Rehnquist, C.J., concurring) 8 (citing Spielman-Fond, Inc. v. Hanson s, Inc., 379 F. Supp. 9 997, 999 (D. Ariz. 1973), aff d by 417 U.S. 901 (1974), and See 10 Bartlett v. Williams, 464 U.S. 801 (1983) (dismissing 11 Williams v. Barlett, 189 Conn. 471, 457 A.2d 290 (1983), 12 for want of a substantial federal question )). 13 This Circuit has similarly interpreted the Doehr 14 majority to have rested its due process holding on the 15 application of Connecticut s statute to an intentional 16 tortfeasor, as opposed to a creditor with an existing 17 interest in the property. 18 122, 126-27 (2d Cir. 1993) (upholding the same Connecticut 19 statute as applied to contractor s claim for payment of an See Shaumyan v. O Neill, 987 F.2d 5 A four-member plurality also reached the nonprecedential conclusion that the absence of a bond requirement in the Connecticut statute violated due process. See Doehr, 501 U.S. at 18-23 (White, J., concurring). 25 1 outstanding sum certain for completed repairs to attached 2 property); cf. British Int l Ins. Co. v. Seguros La 3 Republica, S.A., 212 F.3d 138, 144 & n.3 (2d Cir. 2000) (per 4 curiam) (stating in dicta that a claim for a contractually- 5 defined sum appears to fall into the category of cases 6 cited in Doehr as lend[ing] themselves to accurate ex parte 7 assessments of the merits (quoting Doehr, 501 U.S. at 8 17)). 9 In applying Doehr to this case, we consider the 10 material distinctions between the Connecticut statute in 11 Doehr and New York statute at issue here, and remain mindful 12 that [d]ue process is inevitably a fact-intensive inquiry. 13 Krimstock v. Kelly, 306 F.3d 40, 51 (2d Cir. 2002). 14 1. The first Doehr consideration is the effect of the 15 statutory imposition on the property owner s private 16 interest. 17 established, traditional remedy, the effect of which is 18 simply to give notice to the world of the remedy being 19 sought in the lawsuit itself and which creates no 20 additional right in the property on the part of the 21 plaintiff. 22 concurring); see 13 Weinstein, New York Civil Practice: CPLR Lis pendens, unlike attachment is a well- Doehr, 501 U.S. at 29 (Rehnquist, C.J., 26 1 ¶ 6501.11, at 65-24 (describing New York notice of pendency 2 statute in similar terms). 3 property subject to a lis pendens continues to be able to 4 inhabit and use the property, receive rental income from it, 5 enjoy its privacy, and even alienate it. 6 Forest Indus., Inc., 467 U.S. at 15. 7 pendens is deemed one of the less restrictive means of 8 protecting a disputed property interest. 9 Good Real Prop., 510 U.S. at 62; 4492 S. Livonia Rd., 889 Accordingly, the owner of See, e.g., Kirby For this reason, lis See James Daniel 10 F.2d at 1265. The impact of New York s lis pendens statute 11 is further mitigated because it is available only in actions 12 in which the judgment demanded would affect the title to, 13 or the possession, use or enjoyment of, real property, N.Y. 14 C.P.L.R. 6501--a standard that is strictly construed. 15 5303 Realty Corp., 64 N.Y.2d at 321, 476 N.E.2d at 281. See 16 Nevertheless, plaintiffs allege that the marketability 17 of their property was compromised before they were afforded 18 an opportunity to contest the lis pendens. 19 loss and detriment is claimed: 20 after some delay and compromise; Betesh could not get a 21 construction loan; and Diamond, though she sold her property 22 on schedule, suffered detriments arising out of the 27 The following Diaz sold his home only 1 alternative security she had to provide. 2 behind these claims at this preliminary stage of 3 proceedings.6 4 factor supports plaintiffs position, although not so 5 decisively as in Doehr. 6 2. We decline to look We therefore conclude that the first Doehr The second Doehr factor assesses the risk that a 7 notice of pendency would be wrongfully filed under existing 8 procedures, and the probable value of additional statutory 9 safeguards. In Doehr, a substantial risk of error was 10 created by the nature of the underlying claim: an 11 intentional tort that had no connection to the property and 12 did not readily lend [itself] to accurate ex parte 13 assessment[] of the merits. 14 also Shaumyan, 987 F.2d at 126 (reading Doehr to disapprove 15 attachment procedure that did not protect the [property 16 owner] against the uncertainties that are associated with 17 intentional tort cases ). Doehr, 501 U.S. at 17. 6 See The validity of these claims is contestable: It is unclear why Diaz should have been able to delay notice to potential buyers that the property was subject to a mortgage lien and was in foreclosure, or why Betesh should have been able to delay disclosure of his brother s claim from the New York City-subsidized lender; and Diamond s only detriment was to pay part of the proceeds to discharge a debt she was found to owe. 28 1 By contrast, the risk of erroneous deprivation is 2 minimal under the New York lis pendens procedure, which is 3 available only to claimants asserting a defined interest in 4 the property. 5 creditors whose claims were pre-existing, readily 6 quantifiable, and largely susceptible to proof by 7 documentary evidence: 8 promissory note for a sum certain; Diaz s property was 9 subject to a mortgage; Betesh s property was subject to a The three lis pendens here were filed by Diamond s property was subject to a 10 claim for half-ownership by a brother who contested the 11 validity of the documents used to transfer the property to 12 Betesh. 13 (unlike tort claims) involved relatively uncomplicated 14 matters that lend themselves to documentary proof. 15 501 U.S. at 14 (quoting Mitchell v. W.T. Grant Co., 416 U.S. 16 600, 609 (1974) (upholding ex parte sequestration based on 17 vendor s lien that could be determined on the documentary 18 record)). 19 Defenses notwithstanding, the underlying claims Doehr, The risk of error was further reduced by Article 65 s 20 procedural safeguards. Plaintiffs contend that the statute 21 does not protect the property owner by notice and a 22 sufficient opportunity to challenge the lis pendens, or by 29 1 the posting of bond. As to notice, the statute requires 2 service of a summons within 30 days after filing a lis 3 pendens in order to preserve it, thus apprising the property 4 owner of a claim against the property. 5 6512. 6 for a hearing to challenge the lis pendens, and for 7 cancellation of the lis pendens upon a showing that the 8 plaintiff in the underlying lawsuit has not commenced or 9 prosecuted the action in good faith. See N.Y. C.P.L.R. As to opportunity to be heard, the statute provides Id. 6514(b); see, 10 e.g., Josefsson v. Keller, 141 A.D.2d 700, 701, 530 N.Y.S.2d 11 10, 11 (App. Div. 1988). 12 post-deprivation; but such procedural safeguards suffice 13 where the nature of the issues at stake minimizes the risk 14 of wrongful deprivation. 15 also Shaumyan, 987 F.2d at 127 (upholding procedural 16 safeguards similar to those in the statute that was upheld 17 in Mitchell ). 18 Notice and hearing are afforded Mitchell, 416 U.S. at 609-10; see The scope of a court s review when asked to cancel a 19 notice of pendency pursuant to C.P.L.R. 6514(b) appears to 20 have once been unclear. 21 York held that due process required consideration of the 22 merits of the underlying action. In 1983, one lower court in New 30 Hercules Chem. Co. v. VCI, 1 Inc., 118 Misc. 2d 814, 826, 462 N.Y.S.2d 129, 137 (Sup. Ct. 2 1983). 3 that the court s scope of review when considering whether 4 to cancel a notice of pendency pursuant to C.P.L.R. 6514(b) 5 is circumscribed, so that likelihood of success on the 6 merits is irrelevant . . . . 7 at 320, 476 N.E.2d at 280. 8 9 But the New York Court of Appeals subsequently held 5303 Realty Corp., 64 N.Y.2d Some other states have enacted lis pendens statutes that require more than a showing of good faith. For 10 example, Connecticut requires that the filer of the notice 11 establish that there is probable cause to sustain the 12 validity of his claim, Conn. Gen. Stat. 52-325b(a); New 13 Jersey requires the showing of a probability that final 14 judgment will be entered in favor of the plaintiff, 15 N.J.Stat. Ann. 2A-15-7(b); and Nevada requires that the 16 party who seeks a notice of pendency must show that he is 17 likely to prevail in the underlying suit. 18 Ann. 14.015. 7 19 Nev. Rev. Stat. The Supreme Court has noted the danger of allowing the 7 The plaintiffs advise that legislation is currently pending in the New York State Legislature which would expand the grounds on which to vacate a notice of pendency in some unspecified fashion. 31 1 issuance of an attachment without a sufficient examination 2 of the merits of the underlying suit: 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Doehr, 501 U.S. at 13-14 (emphasis added). 19 is dicta, however; and we cannot say that C.P.L.R. 6514(b) s 20 employment of a mere good-faith standard constitutes a 21 violation of due process. 22 does not afford the most meaningful process to a property 23 holder burdened by a notice of pendency filed in conjunction 24 with a patently meritless law suit. 25 Permitting a court to authorize attachment merely because the plaintiff believes the defendant is liable, or because the plaintiff can make out a facially valid complaint, would permit the deprivation of the defendant s property when the claim would fail to convince a jury, when it rested on factual allegations that were sufficient to state a cause of action but which the defendant would dispute, or in the case of a mere good-faith standard, even when the complaint failed to state a claim upon which relief could be granted. This statement At the same time, this standard We similarly reject plaintiffs assertion that the 26 statute s procedure for substituting a bond is defective. 27 See N.Y. C.P.L.R. 6515. 28 requires that the notice filer also post a bond in every 29 case. 30 reached the issue of the significance of a bond requirement, Plaintiffs argue that due process However, only a plurality of the Court in Doehr 32 1 see 501 U.S. at 18-23 (White, J., concurring), and this 2 Circuit has continued to adhere to our previously 3 established position that a security bond need not be posted 4 in connection with a prejudgment attachment in order to 5 satisfy the requirements of due process. 6 Co. v. Ferruzzi Trading USA Inc., 56 F.3d 394, 402 (2d Cir. 7 1995). 8 favor of upholding the constitutionality of Article 65. Result Shipping On the whole, the second Doehr factor weighs in 9 10 3. The last Doehr factor considers the interest of the 11 claimant and the state. Doehr, 501 U.S. at 11. The Doehr 12 Court discounted the interest of a claimant who had no pre- 13 existing stake in the attached property and no asserted 14 basis for fearing that the attached property might become 15 unavailable during the pendency of the underlying lawsuit. 16 Id. at 16. 17 available only to secure claims of existing interests in the 18 realty at issue. 19 that when the property owner and the creditor both have 20 current, real interests in the property, . . . [r]esolution 21 of the due process question must take account not only of 22 the interests of the [owner] of the property but those of By contrast, lis pendens in New York is See Mitchell, 416 U.S. at 604 (observing 33 1 the [creditor] as well ). 2 more weight here than in Doehr.8 3 The claimant s interest carries Likewise, New York has greater interest in the 4 prejudgment remedy than Connecticut had in Doehr. By 5 securing the unique property that is the subject matter of 6 the litigation, the New York lis pendens procedure protects 7 the court s power over the disposition of that property. 8 See 5303 Realty Corp., 64 N.Y.2d at 319, 476 N.E.2d at 280. 9 Without lis pendens, actions such as those brought against 10 plaintiffs here could be frustrated by transfer or 11 encumbrance of the property in favor of an innocent third 12 party who lacked notice. 13 determine the rights of the parties to real property could 14 be defeated by its transfer, pendente lite, to a purchaser 15 without notice, additional litigation would be spawned and 16 the public s confidence in the judicial process could be If the power of the courts to 8 Moreover, in two of the underlying actions, the notice of pendency was filed after the property owner attempted to transfer or encumber the property. Diamond had already entered a contract for sale of her property, and Betesh had applied for a home equity loan, when notices of pendency were filed to preserve the property. The prospect of imminent alienation of the property at stake in the underlying lawsuit would be an exigent circumstance permitting postponing any notice or hearing until after the attachment is effected. Doehr, 501 U.S. at 16. 34 1 undermined. 2 1316, 1329 (3d Cir. 1982). 3 the claimant and the state in the availability of the lis 4 pendens remedy are substantial, and weigh in favor of the 5 constitutionality of the statute. 6 Chrysler Corp. v. Fedders Corp., 670 F.2d Taken together, the interests of We conclude, as to all of the plaintiffs, that their 7 property interest as affected by the lis pendens carries 8 some weight, but it is outweighed by the remaining 9 considerations. In view of the procedural safeguards of 10 Article 65--in particular its narrow application to pre- 11 existing claims affecting the property, and its provisions 12 for post-deprivation notice and hearing--the statute 13 satisfies the Due Process Clause of the Fourteenth 14 Amendment. 15 Because plaintiffs have failed to plead facts 16 establishing that Article 65 is unconstitutional as applied 17 to them, they necessarily fail to state a facial challenge, 18 which requires them to establish that no set of 19 circumstances exists under which the [statute] would be 20 valid. 21 F.3d 105, 110 (2d Cir. 2003) (quoting United States v. 22 Salerno, 481 U.S. 739, 745 (1987)); see also Shaumyan, 987 Cranley v. Nat l Life Ins. Co. of Vermont, 318 35 1 F.2d at 126 (following Doehr in conducting only an as- 2 applied analysis of the statute). 3 district court s dismissal of the due process claims. Therefore, we affirm the 4 B. 5 6 Equal Protection Plaintiffs argue that New York s lis pendens law 7 violates the Equal Protection Clause of the Fourteenth 8 Amendment because it discriminates against married persons 9 who are creditors of their spouses by depriving them of the 10 protections, rights, and remedies granted non-spousal 11 creditors without any rational basis. 12 ¶ 68.) 13 alone, alleging that she, as a creditor of [her husband] 14 stands in a disadvantaged position vis a vis Jones because 15 Jones was able to place a lis pendens on the marital 16 residence whereas Diamond could not. (Diamond Compl. 17 ¶ 56.)9 18 19 (Diamond Compl. Plaintiffs assert this claim on behalf of Diamond Article 65 is facially neutral: it does not refer to marital status or distinguish in any way between spousal and 9 Diaz asserted an equal protection claim, but it was abandoned on appeal; we therefore do not review the district court s dismissal of that count. See LoSacco v. City of Middletown, 71 F.3d 88, 92-93 (2d Cir. 1995). 36 1 non-spousal creditors; it does not stop one spouse from 2 using the procedure against the other; and it does not 3 exclude marital property. 4 violates equal protection only if it has been applied in an 5 intentionally discriminatory manner or has an adverse 6 effect and . . . was motivated by discriminatory animus. 7 Brown v. City of Oneonta, 221 F.3d 329, 337 (2d Cir. 2000); 8 see also Harris v. McRae, 448 U.S. 297, 323 n.26 (1980) 9 ( [W]hen a facially neutral . . . statute is challenged on A facially neutral statute 10 equal protection grounds, it is incumbent upon the 11 challenger to prove that Congress selected or reaffirmed a 12 particular course of action at least in part because of, 13 not merely in spite of, its adverse effects upon an 14 identifiable group. (internal quotation marks omitted)). 15 Diamond s complaint does not allege intentional 16 discrimination in the application or effect of Article 65. 17 Accordingly, the district court held that she failed 18 adequately to plead an equal protection claim. 19 v. Pataki, No. 03 Civ. 4642, 2007 WL 485962, at *6 (S.D.N.Y. 20 Feb. 14, 2007). 21 22 See Diamond On appeal, Diamond argues that the statute has been interpreted by New York courts to bar a spouse-creditor 37 1 (such as Diamond) from placing a lis pendens on the marital 2 residence. 3 that a spouse is not entitled to file a lis pendens in order 4 to secure equitable distribution of property. 5 Fakiris v. Fakiris, 177 A.D.2d 540, 543, 575 N.Y.S.2d 924, 6 927 (App. Div. 1991); Gross v. Gross, 114 A.D.2d 1002, 1003, 7 495 N.Y.S.2d 441, 443 (App. Div. 1985). 8 9 Diamond cites New York matrimonial cases holding See, e.g., The cases cited by Diamond stand only for the proposition that under New York law, a claim for equitable 10 distribution does not seek a judgment that affects the 11 property in a manner contemplated by Article 65. 12 114 A.D.2d at 1003, 495 N.Y.S.2d at 443 ( The fact that 13 plaintiff may be entitled to an equitable distribution with 14 regard to the residence does not give rise to [the 15 extraordinary] privilege [of filing of a notice of 16 pendency]. ); Fakiris, 177 A.D.2d at 543, 575 N.Y.S.2d at 17 927 (citing Gross for same); see also Sehgal v. Seghal, 220 18 A.D.2d 201, 201, 631 N.Y.S.2d 360, 361 (App. Div. 1995) ( A 19 claim that real property is a marital asset subject to 20 distribution does not, by itself, establish grounds for a 21 lis pendens. ). 22 5303 Realty Corp., 64 N.Y.2d at 315, 476 N.E.2d at 278, and See Gross, The narrow application of Article 65, 38 1 not any discriminatory intent, is the reason lis pendens is 2 unavailable in connection with a claim for equitable 3 distribution. 4 Furthermore, it is well-settled under New York law that 5 spouses may avail themselves of Article 65 to file notices 6 of pendency against each other--in those cases that would 7 affect the title to, or the possession, use or enjoyment of, 8 real property, N.Y. C.P.L.R. 6501. 9 Caruso & Branda, P.C. v. Hirsch, 41 A.D.3d 407, 409, 837 See, e.g., Caruso, 10 N.Y.S.2d 734, 736 (App. Div. 2007) (noting availability of 11 lis pendens in divorce action where one spouse alleged 12 fraudulent conveyance and sought imposition of a 13 constructive trust against the other s property); Elghanayan 14 v. Elghanayan, 102 A.D.2d 803, 804, 477 N.Y.S.2d 163, 163-64 15 (App. Div. 1984) (same); Bennett v. Bennett, 62 A.D.2d 1154, 16 1154-55, 404 N.Y.S.2d 171, 172-73 (App. Div. 1978) (lis 17 pendens available in former wife s action to set aside ex- 18 husband s conveyance of his share in realty that they had 19 previously owned by the entirety); Ventura v. Ventura, 27 20 Misc. 2d 338, 339, 211 N.Y.S.2d 227, 228 (Sup. Ct. 1960) 21 (lis pendens available in spouse s action to impose 22 equitable lien). 39 1 Diamond never brought the type of action against her 2 husband that would have entitled her to file a notice of 3 pendency; Jones did. 4 remedies at their disposal was not the result of statutory 5 discrimination, but of the parties claims and litigation 6 choices. 7 Thus the disparity between the As Article 65 poses no bar--on its face or in its 8 operation--to spousal lis pendens in claims cognizable under 9 the statute, we affirm the district court s dismissal of the 10 equal protection claim. 11 Conclusion 12 13 14 For the foregoing reasons, the judgment of the district court is affirmed. 40

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