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
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