622 F. App'x 16
2d Cir.2015Background
- Plaintiff Alexander A. Benzemann sued Houslanger & Associates, PLLC and Todd E. Houslanger (the “Houslanger Defendants”) and Citibank, N.A., raising claims under Section 1983, the Due Process Clause, the FDCPA, and state law arising from restraining notices sent to Citibank.
- Benzemann alleged the Houslanger Defendants’ sending of restraining notices violated his Fourth, Fifth, and Fourteenth Amendment rights and constituted state action.
- Citibank moved to compel arbitration under an arbitration agreement; the district court compelled arbitration and dismissed Benzemann’s claims against Citibank.
- Benzemann did not challenge the arbitration ruling on appeal but argued the district court should have stayed (not dismissed) his claims pending arbitration.
- The district court dismissed the Section 1983 and due process claims against the Houslanger Defendants; this appeal addresses those dismissals and the dismissal/compel-arbitration ruling as to Citibank.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sending restraining notices by private attorneys is state action giving rise to §1983 and Due Process claims | Benzemann: Houslanger Defendants misused New York procedures and thus their conduct is attributable to the State | Houslanger: Private conduct in issuing restraining notices is not state action | Held: Not state action — plaintiff failed both state-action prongs; private misuse of a statute not attributable to state; restraining notices are not an exclusively public function. |
| Whether the district court should have stayed proceedings after compelling arbitration of claims against Citibank | Benzemann: After compelling arbitration, the court should have stayed proceedings rather than dismissing the claims | Citibank: Arbitration agreement delegated arbitrability; district court compelled arbitration and dismissed | Held: Compel-arbitration ruling affirmed; court did not err in dismissing because plaintiff did not seek a stay before judgment and once he filed his notice of appeal district court lacked jurisdiction to modify the judgment. |
Key Cases Cited
- Grogan v. Blooming Grove Volunteer Ambulance Corps, 768 F.3d 259 (2d Cir. 2014) (state-action test for §1983 claims)
- Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922 (U.S. 1982) (private misuse of state statute not attributable to state)
- Dahlberg v. Becker, 748 F.2d 85 (2d Cir. 1984) (private party’s misuse of New York Judiciary Law not state action)
- Sybalski v. Indep. Grp. Home Living Program, Inc., 546 F.3d 255 (2d Cir. 2008) (tests for attributing private conduct to the State)
- Sykes v. Bank of America, 723 F.3d 399 (2d Cir. 2013) (banks comply with restraining notices similarly whether from state or private actor)
- PaineWebber Inc. v. Bybyk, 81 F.3d 1193 (2d Cir. 1996) (parties may delegate arbitrability to arbitrator)
- Katz v. Cellco P’ship, 794 F.3d 341 (2d Cir. 2015) (stay of proceedings appropriate after referral to arbitration when requested)
- United States v. Rodgers, 101 F.3d 247 (2d Cir. 1996) (filing a notice of appeal divests district court of jurisdiction over aspects involved in the appeal)
- Griggs v. Provident Consumer Discount Co., 459 U.S. 56 (U.S. 1982) (filing a notice of appeal transfers jurisdiction to the court of appeals)