03 Civ 5837; 06 Civ 5991
Background: These actions challenged a section of the New York Civil Practice Law and Rules concerning the restraint of bank accounts by creditors’ attorneys. Plaintiffs alleged that this law, as applied to accounts containing only electronically deposited exempt money such as Social Security or SSI benefits, violated the Due Process Clause and the Supremacy Clause of the U.S. Constitution. Defendants were the Chief Judge and the Chief Administrative Judge of the State of New York, banks, and creditors’ attorneys.
NYLAG was co-counsel with South Brooklyn Legal Services in Mayers, which was not a class action. Defendants moved to dismiss Mayers, which was filed first; their motions were denied. Defendants then moved for certification of an interlocutory appeal; their motions were again denied. Mayers proceeded to discovery. NYLAG filed Sims, as a class action, without co-counsel, on the same issue, to avoid risks of mootness. The parties stipulated to class certification in Sims, which was approved by the Court.
Shortly before Plaintiffs were to file a motion for summary judgment, Governor Patterson signed into law the Exempt Income Protection Act, which protects from restraint the first $2500 in an account into which exempt money was directly deposited less than 45 days prior to the attempted restraint. Because the new law prevents the most serious aspects of the harm complained of in the case, we voluntarily withdrew this case. The pendency of these two cases was a significant factor in obtaining the passage of the Exempt Income Protection Act.
- November 19, 2003 – Mayers v. New York Community Bankcorp Complaint
- August 31, 2005 – Mayers MTD Opinion
- November 8, 2006 – Sims v. Bank of America Complaint
- November 9, 2006 – Press Release: SSI Recipients’ Bank Accounts Illegally Frozen; NYLAG Files Federal Class Action to Stop Unconstitutional Debt Collection Practices
- September 29, 2008 – New York City Department of Consumer Affairs Statement: Statement on Passage of the Exempt Income Protection Act
- November 25, 2008 – Mayers Stipulation of Voluntary Dismissal
- November 26, 2008 – Sims Stipulation of Voluntary Dismissal