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Wilmington Impound

Challenging Wilmington’s tow-and-impound racket, which pays private tow companies by letting them keep and scrap cars.

Wilmington, Delaware, issues a lot of parking tickets and then allows private companies to tow any car with more than $200 in outstanding fines. Rather than pay money to those companies for their services, the city contractually empowers the towing companies to keep and scrap cars. The tow companies get to keep the full value of the cars: If a car is worth more than the amount of ticket debt, the tow companies keep the excess value, and, in fact, the proceeds from scrapping the vehicle aren’t even used to pay off the tickets. In the end, Wilmington doesn’t pay for its impound program, the private tow companies make money by scrapping people’s property, and car owners lose their vehicles without compensation.

That’s exactly what happened to Ameera Shaheed. Wilmington ticketed her legally parked car six times in nine days. Then, while her appeal was pending, the city towed Ameera’s car and demanded payment in full. When Ameera—a disabled grandmother of three—couldn’t afford to pay $320 in tickets within thirty days, the tow company scrapped her car. The car was worth over $4,000, far more than the tickets at issue, but Ameera was never paid back a dime. Worse, the city didn’t even use the proceeds from the vehicle to pay off Ameera’s debt and, in fact, is still trying to collect on those same six tickets. With added penalties, Ameera now owes $580 in addition to having lost her car. And if Ameera could afford to purchase another car, the city and its tow companies could just tow, impound, and scrap that car too.

As Earl Dickerson learned, even paying the city’s ransom is not enough to protect you or your car. The city towed Earl’s vehicle because he didn’t move his car from its parking spot in time. He paid the ticket, but when he went to reclaim his car from the impound, the towing company refused to release it unless Earl paid an additional $910. Earl absolutely did not owe that money, and he couldn’t afford to pay it even if he did. There was no way for Earl to contest the tow company’s bill for $910, and there was no way for Earl to recover his car without paying that money. Because he didn’t pay up, the towing company scrapped Earl’s car and kept the full value for itself.

Wilmington’s entire system is fundamentally unconstitutional for being woefully deficient of due process and repeatedly demanding grossly disproportionate fines. But thankfully, Ameera and Earl are fighting back. Together, they’ve joined with the Institute for Justice to demand that Wilmington and its tow companies stop unconstitutionally taking people’s cars once and for all.

Wilmington Impound

Date Filed

September 22, 2021

Original Court

United States District Court for the District of Delaware

Current Court

United States District Court for the District of Delaware

Case Status

Open

Attorneys

Media Contact

  • Conor Beck
    Communications Project Manager
    cbeck@ij.org

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Case Team

Timeline and Case Documents

Wilmington Funds its Unconstitutional Impound Scheme By Taking People’s Cars
Rather than pay to run a towing-and-impound system, Wilmington outsources its municipal program to private towing companies First State Towing and City Towing Services and “pays” those companies by contractually empowering them to keep and scrap other people’s cars.

Here’s how the scheme works: First, Wilmington passed an ordinance that allows it to tow any car whose owner has $200 or more in outstanding parking tickets. Then, once the city has your car, the only way to get it back is to pay every penny the city demands for parking tickets, fines, fees, and penalties. You cannot contest the validity or amount of the debt without paying the full ransom, and if you cannot afford to pay the tickets within thirty days, the towing company scraps your car and keeps the full value for itself. The city does not credit the value of your car towards the underlying parking tickets, and it certainly does not compensate you for taking your property. Then, because Wilmington claims that you still must pay those same parking tickets, it can tow, impound, and scrap your next car, too.

Wilmington offers few protections for vehicle owners caught in this system. The city allows tow companies to take cars off the street without any kind of warrant and without any kind of pre-tow hearing—even when there’s absolutely no emergency that would make a hearing difficult. And once a vehicle is towed, the only way to demand a hearing is to pay the City’s ransom up-front.

By structuring its contract so that the towing companies can make money only by keeping cars, Wilmington created an obvious incentive problem. And unsurprisingly, the towing companies found ways to keep a lot of cars. In fact, in 2020 one company kept 987 out of the 2,551 cars that it towed—more than 38 percent. That’s a lot of people who lost their property, as well as their means of transportation, so that Wilmington could operate its impound program “for free.”

Our Plaintiffs: Ameera Shaheed and Earl Dickerson
Ameera Shaheed is a longtime resident of Wilmington and a grandmother of three. She is disabled and survives on Social Security Disability Insurance Benefits. She suffers from chronic pain and needs a car to get around, but Wilmington took her car away over a handful of parking tickets—even though she was legally parked.

In September 2019, Wilmington ticketed Ameera’s legally parked car five days in a row, and then again the following week. Those tickets totaled $320. Knowing that she was legally parked, Ameera appealed her tickets, but the city towed her car and demanded payment in full anyway. On Ameera’s limited income, she simply could not afford to pay the city’s ransom. So Wilmington and the towing company scrapped her car and kept the entire value for themselves.

Ameera’s car was worth approximately $4,250, and Wilmington kept it over $320 in parking tickets. Even after taking her car, the city is still coming after Ameera and trying to collect on those same parking tickets. With additional fees and penalties, it now claims she owes $580, with no compensation for the surplus value of her lost car.

Like Ameera, Earl Dickerson had his car scrapped by Wilmington and its towing contractor. Earl is a 73-year-old grandfather who is retired after a career as a graphic designer. The pandemic hit him hard financially, and Earl couldn’t afford to drive very frequently. So he left his car legally parked on his street. The city didn’t like that and left a ticket on his car demanding that he move it within seven days. Unfortunately, as Earl was dealing with a death in the family, he missed the deadline. A week later, the city towed his car and issued him a $60 ticket.

Earl accepted the ticket, paid Wilmington in full, and then went to retrieve his car from the impound lot. But, when he got there, the towing company demanded an additional $910, saying that otherwise it would not release Earl’s car. Earl absolutely did not owe any additional fees, let alone more than $900, and he couldn’t afford to pay it even if he did. There was nothing Earl could do: the towing company held his car hostage and wouldn’t release it without payment. When Earl didn’t pay the ransom, the towing company scrapped his car and kept the full value for itself.

The Legal Claims
Unsurprisingly, Wilmington’s tow-impound-and-scrap scheme violates the Constitution is many ways.

First, the government and its private contractors cannot just keep someone’s property without compensating them. That violates the Takings Clause of the Fifth Amendment.

Wilmington’s program violates the Takings Clause in two ways. First, when the government takes a person’s property to satisfy an alleged unpaid debt, the government must apply the value of that property towards the supposed debt. In other words, Wilmington cannot just take people’s stuff over a few parking tickets and still try to collect on the same tickets later. Second, if the government takes property that is worth more than their alleged debt, the surplus value must be returned to the owner. For example, Wilmington kept Ameera’s $4,250 car over $320 in outstanding parking tickets; at the very least, the city still had to return the surplus $3,930 back to Ameera after it satisfied her outstanding debt. Keeping the whole thing is an unconstitutional windfall.

Second, towing someone’s car just because they have unpaid tickets violates the Fourth Amendment’s prohibition on unreasonable searches and seizures. Absent some kind of emergency, the government generally needs to get a warrant from a judge before it can seize property. That requirement ensures that a judge has a chance to make sure there’s an actual valid basis for the seizure; the government cannot just grab people’s property whenever it wants to, even if it claims those people owe money. Ameera’s car was legally and safely parked, and Wilmington just towed it because the city thought Ameera owed it a few hundred dollars. That’s not how the Fourth Amendment works.

Third, Wilmington’s tow-and-impound scheme fails to meet the Fourteenth Amendment’s guarantee of Due Process. The Supreme Court has held that, before the government can authorize a private party to seize property to collect on a debt, the government has to afford the property owner a pre-seizure hearing. And yet Wilmington tows cars for unpaid tickets without providing any kind of hearing at all. Instead, Wilmington literally just seizes any car that it finds publicly parked when it claims the owner owes it a few hundred dollars. That’s not due process, that’s more like a carjacking.

Likewise, the city also fails to provide for any kind of a hearing after towing someone’s car. Owners have two choices after their car is impounded: pay up or lose the car forever. There are zero protections for those, like Ameera, who cannot afford to pay the fines. And vehicle owners are not even given a hearing where they can challenge anything—the fees, the underlying tickets, the tow—unless and until they pay up. That means that the towing companies can demand all sorts of additional fees from owners, like they did with Earl, and there’s nothing an owner can do to challenge it.

In short, Wilmington’s system not only lacks due process, it lacks all process.

Finally, keeping someone’s car over a few hundred dollars in unpaid parking tickets is an Excessive Fine under the Eighth Amendment. IJ recently won a case before the United States Supreme Court, Timbs v. Indiana, that established that the Excessive Fines clause applies to the states and limits their ability to extract “excessive punitive economic sanctions.” But that’s exactly what Wilmington’s system does. Parking tickets are minor violations meant to cost people tens of dollars, not their entire car. Here though, Wilmington extracts just such an excessive fine because it’s how the city funds its entire unconstitutional tow-and-impound scheme.

The Defendants

In addition to suing the City of Wilmington, Delaware, IJ is also directly taking on Wilmington’s two private towing contractors: First State Towing, LLC and City Towing Services, LLC.

The Constitution doesn’t just apply to the government; it also protects the public against private companies that “act under color of state law.” When the government outsources its duties—or power—to private companies, those companies are also bound by the Constitution. In other words, the government cannot just take people’s cars and keep them, and it cannot empower private companies to do so either.

Wilmington outsourced its municipal impound program to First State Towing and City Towing, and empowered these companies to take, keep, and scrap cars. Therefore, these deputized private companies have to respect the Constitution and cannot violate it for their own benefit. But since they violated Ameera, Earl, and countless other people’s constitutional rights, IJ is going to hold them accountable right along with Wilmington.

The Legal Team
IJ Attorney Will Aronin and IJ Senior Attorney Rob Johnson are representing Ameera and Earl. They are joined by John Shaw of Shaw Keller, LLP. as Delaware counsel.

The Institute for Justice
The Institute for Justice is the nation’s leading public interest law firm dedicated to defending liberty against governmental overreach. For more than thirty years, IJ has been litigating to protect private property, and constitutional, rights for all Americans. Recently, IJ won a victory before the Supreme Court, helping establish that the loss of one’s car can be an excessive fine. IJ leads the nation in taking on unconstitutional tow-and-impound schemes across the country and already brought a class action lawsuit against Chicago over its abusive system.

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