New York City Council Seeks to Crack Down on Process Servers Who Lie

Yesterday's New York Times published an article on the topic of Sewer Service. http://www.nytimes.com/2010/02/27/nyregion/27sewer.html


For those that have been following this developing story, you know this is the second effort in recent months by the NYC Council to regulate process servers in NYC. The first effort was unsuccessful primarily because the last session of the council ran out of time to pass the Bill.

This time around in a new session the sponsor has come back with an even stronger effort to further regulate private process servers who operate in the city and who forward process into the city even though they might reside outside the city or even outside the state. The Bill if passed in its current for would require process serving agencies to maintain a $100,000.00 bond and process servers to maintain a $10,000.00 bond.

The Bill also requires process servers to have a GPS device or other so called real-time tracking so that the process server can prove that they were where they claimed to have been at the time of the attempt or service event.

Essentially this means that the process server’s affidavit is no longer good enough! It means that there is no presumption that what the process server is attesting to is factual.

I am told that in order to get a Bond in the amount of $100,000.00, the process serving agency must be credit worthy in at least that amount. I suspect that will eliminate many agencies from being able to comply should this Bill pass.

This bill is a severe over reaction to a problem that came to light when ONE rogue agency was found to have committed sewer service. This bill is an attack on all in the profession and it must be fought and defeated.

The New York Professional Process Servers Association needs your support fighting this measure.

Please consider donating to the effort to fight this measure. You can do so by going to http://www.nysppsa.org/Legislative%20Fund%20form.pdf

The bill can be found here .

Single attempt at notice did not satisfy the Maryland Rules of Civil Procedure.

Case: Rafael Flanagan v. Department of Human Resources, CA No. 64, Sept. Term 2009. Reported. Opinion by Harrell, J. Filed. Feb. 9, 2010.

Issue: Did leaving a show-cause order under the door of defendant’s last known address provide sufficient notice of his court date?

What The Court Held: Maryland’s highest court ruled that the Maryland Department of Human Resources made a mistake when it had a process server slide under the door of the defendants “last known address” an order that he appear in a Baltimore court to explain why he was in arrears in his child support. That single effort to contact the defendant in 1995 was insufficient to notify him of his court date, thus nullifying his admission that he owed back child support.

The opinion means that notice delivered to the defendants last known address happened in this case is sufficient only with a judge’s permission and only after good-faith efforts to notify the defendant have been unsuccessful or if he or she is trying to evade service.

NY Sewer Service. What's next... Ankle Bracelets?

For those of you following the New York Attorney General case against William Singler and American Legal Process and the fall-out that has followed might not be surprised to learn that the New York City council is again attempting to pass a law that would further regulate process servers and process serving agencies.

The first such attempt by the NYC council was defeated by the New York Association of Professional Process Servers and NAPPS.

This time around NYC council is coming back with even harsher requirements. NYC council is seeking to track the movements of process servers by some sort of GPS device that would apparently to insure that process servers were where they claimed to have been as reflected on their affidavit of service.

They are also seeking impose stricter licensing requirements including $100,000.00 bonds for each process serving agency and $10,000.00 bond for each process server. It gets better, they also want to impose penalties and create a civil action against process servers who violate any of the provisions of the new law.

I fully understand that the NYC council is seeking to protect the rights of the citizens of New York. That is part of their job after all. I understand that what happened in NY was a serious problem that needed to be addressed. I am not surprised that the governing bodies in NY are seeking to further regulate process servers. I would only hope that the regulation does not go too far. In my opinion this proposed bill does just that. It is a severe over-reaction to what appears to be an isolated instance of one process serving agency allegedly engaged in criminal wrong-doing.  That one agency is not representative of the practices of an entire profession.

The New York Process Servers Association can use your help in defeating this proposed law click here to donate.

The following is the proposal that is going to be heard next week by the NYC council.

Int. ______

By Council Member Garodnick

A Local Law

To amend the administrative code of the city of New York, in relation to process servers.


Be it enacted by the Council as follows:

Section 1. Section 20-403 of the administrative code of the city of New York is amended to read as follows:

a. Process server license. It shall be unlawful for any person to do business as, be employed as or perform the services of a process server without a license therefor.


b. Process serving agency license. It shall be unlawful for any process serving agency to assign or distribute process to individual process servers for actual service in the city of New York without a license therefore.


§2. Section 20-404 of the administrative code of the city of New York is amended to read as follows:


a. A process server is a person engaged in the business of serving or one who purports to serve or one who serves personally or by substituted service upon any person, corporation, governmental or political subdivision or agency, a summons, subpoena, notice, citation or other process, directing an appearance or response to a legal action, legal proceeding or administrative proceedings.


b. A process serving agency is any person, firm, partnership, association or corporation, other than an attorney or law firm located in this state or deputized city marshal, who maintains an office, bureau or agency, the purpose of which is to assign or distribute process to individual process servers for actual service in the city of New York.


[b.] c. For the purposes of this subchapter the service of five or more process in any one year shall be deemed to constitute doing business as a process server.

§3. Section 20-406 of the administrative code of the city of New York is amended by adding a new subdivision c to read as follows:


c. Each such applicant for a process server license or renewal thereof shall be required to pass an examination satisfactorily. Such examination shall be under the supervision of the commissioner and shall test the knowledge of the applicant concerning proper service of process within the city of New York and familiarity with relevant laws and rules.


§4. Subchapter 23 of chapter 2 of title 20 of the administrative code of the city of New York is amended by adding new sections, 20-406.1, 20-406.2, 20-406.3 and 20-406.4 to read as follows:


20-406.1 Bond required. a. As a condition of the issuance of a process server license, each applicant for such license or a renewal thereof shall furnish to the commissioner a surety bond executed by the applicant in the sum of ten thousand dollars, payable to the city of New York, and a surety approved by the commissioner. Such bond shall be conditioned upon the applicant's compliance with the provisions of this subchapter and any rules promulgated thereunder, and upon the further condition that the applicant will pay (i) to the city any fine, penalty or other obligation the city imposes relating to a violation of this subchapter and any rules promulgated thereunder, and (ii) to a plaintiff any final judgment recovered in an action arising out of the violation of any of the provisions of this subchapter within thirty days of its imposition. The commissioner may by rule authorize an individual applicant, in lieu of furnishing a bond, to satisfy the requirements of this section by depositing cash in an amount equal to the amount of the surety bond required by this section.


b. A process server licensed under this subchapter who engages in the business of serving process exclusively as an employee of a process serving agency licensed under this subchapter shall not be required to furnish a surety bond pursuant to subdivision (a) of this section.


c. As a condition of the issuance of a process serving agency license, each applicant for such license or a renewal thereof shall furnish to the commissioner a surety bond in the sum of one hundred thousand dollars executed by the applicant payable to the city of New York, and a surety approved by the commissioner. Such bond shall be conditioned upon the applicant's compliance with the provisions of this subchapter and any rules promulgated thereunder, and upon the further condition that the applicant will pay (i) to the city any fine, penalty or other obligation the city imposes relating to a violation of this subchapter and any rules promulgated thereunder, and (ii) to a plaintiff any final judgment recovered in an action arising out of the violation of any of the provisions of this subchapter within thirty days of its imposition. The commissioner may by rule authorize an applicant, in lieu of furnishing a bond, to satisfy the requirements of this section by depositing cash in an amount equal to the amount of the surety bond required by this section.


§20-406.2 Responsibilities of process serving agencies. Every process serving agency licensed under this subchapter shall:


a. Comply with all applicable state and federal laws;


b. be legally responsible for any failure to act in accordance with the laws and rules governing service of process by each process server to whom it has distributed, assigned or delivered process for service;


c. Provide to each process server employed by such agency a written statement indicating the rights of such employee and the obligations of the process serving agency under city, state and federal law. Such statement of rights and obligations shall include, but not be limited to, a general description of employee rights and employer obligations pursuant to laws regarding minimum wage, overtime and hours of work, record keeping, social security payments, unemployment insurance coverage, disability insurance coverage and workers' compensation;


d. Keep on file in its principal place of business for a period of three (3) years a statement for each employee, signed by such employee, indicating that the employee read and understood the statement of rights and obligations such employee received pursuant to subdivision (c) of this section.


§20-406.3 Records, Audits. a. Every process server and process serving agency licensed under this subchapter shall retain records in compliance with section 89-cc of the New York state general business law for no less than seven (7) years of each process served. Such records shall be retained in electronic form. Tampering with any such electronic records shall be prohibited.


b. A process server licensed under this subchapter who engages in the business of serving process exclusively as an employee of a process serving agency licensed under this subchapter shall not be subject to the provisions of subdivision (a) of this section, but shall be required to comply with all other applicable laws.


c. The commissioner may conduct audits of the information required to be kept pursuant to subdivision (a) of this section in order to monitor compliance with this subchapter.


§20-406.4 Educational materials. The commissioner shall develop educational materials to be provided to all process servers and process serving agencies licensed under this subchapter. Such materials shall at a minimum identify the laws and regulations pertaining to service of process in the city of New York.


§ 5. Section 20-408 is REPEALED and a new section 20-408 is added to read as follows:


§20-408 A process server licensed pursuant to this subchapter shall carry and operate at all times during the commission of his or her licensed activities an electronic device that uses a global positioning system, wi-fi device or other such technology as the Commissioner by rule shall prescribe to electronically establish and record the time, date, and location of service. All records created by such electronic device shall be maintained in an electronic database by the process server, or if such process server is acting exclusively as an employee of a process service agency, by the process service agency, for seven (7) years from the date such record is created.


§6. Section 20-409 of the administrative code of the city of New York is amended by adding a new subdivision c to read as follows:


c. Upon application for renewal of a license issued pursuant to this subchapter, applicants subject to subdivision (a) of section 20-406.3 of this subchapter shall certify in writing compliance with the record keeping provisions of such section.


§7. Subchapter 23 of chapter 2 of title 20 of the administrative code of the city of New York is amended by adding new sections 20-409.1 and 20-409.2 to read as follows:


§20-409.1 Violations and penalties. Any person who, after notice and hearing shall be found guilty of violating any provision of this subchapter, shall be punished in accordance with the provisions of chapter one of this title and shall be subject to a penalty of not less than seven hundred dollars nor more than one thousand dollars for each violation.


§20-409.2 Civil Cause of Action. Any person injured by the failure of a process server to act in accordance with the laws and rules governing service of process in New York state, including this subchapter and regulations promulgated thereunder, shall have a cause of action against such process server and process serving agency, which distributed or assigned process for service, in any court of competent jurisdiction for any or all of the following relief:


a. compensatory and punitive damages, provided that punitive damages shall only be awarded in the case of willful failure to serve process;


b. injunctive and declaratory relief;


c. attorneys’ fees and costs; and

d. such other relief as a court may deem appropriate.

§20-409.3 Reporting. Twenty-four months after the local law that added this section becomes effective, the commissioner shall submit a report to the speaker of the council regarding the effectiveness of these provisions on effectuating proper service and improving oversight over the process service industry. Such report shall include, among other things, the results of audits the commissioner has completed of process servers and process serving agencies, including information regarding their compliance with the provisions of this subchapt\er.

8. This local law shall take effect one hundred eighty days after enactment provided, however that the commissioner of consumer affairs shall take all actions necessary for its implementation, including the promulgation of rules, prior to such effective date.