Class Action Lawsuit Claims New York City Unconstitutionally Closed More Than 200 Purportedly Illegal Cannabis Shops

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action lawsuit claims the City of New York and several city officials have unconstitutionally shut down more than 200 businesses accused of selling cannabis without a license.

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.

Citing alleged violations of the Fourteenth Amendment’s due process clause, the 17-page lawsuit argues that the city’s one-year closures are the result of unilateral decisions made by the New York City Sheriff’s Office with no prior judicial review or administrative oversight.

The case says that the recent crackdown is part of NYC’s enforcement of the SMOKEOUT Act, a state law enacted in April of this year that gives local municipalities the power to close illegal smoke shops.

The complaint was filed on June 12 on behalf of 27 NYC businesses which were allegedly all subject to NYPD searches in May 2024 and subsequently issued summonses for allegedly engaging in unlicensed cannabis sales, in violation of the New York City Administrative Code.

The businesses claim they were then issued sealing orders after the city Sheriff’s Office unilaterally determined that they posed “an imminent threat to the public’s health, safety, or welfare” in further violation of city law, the suit relays. According to the case, the sealing orders authorized the Sheriff’s Office to immediately cease the plaintiffs’ operations, using a padlock to keep their doors shut.

The only recourse available to these businesses was to request a hearing with the New York City Office of Administrative Trials and Hearings (OATH) within five days of receiving a summons and sealing order, the complaint explains. The filing notes that all 27 businesses underwent OATH hearings conducted without testimonies from law enforcement who were present during the inspections. The hearings were instead conducted based on documents and photos taken by the NYPD during the raid that supported the summons and sealing orders, the filing claims.

“Therefore, Respondent businesses are never given an opportunity to confront the witnesses, by way of cross-examination, who are asserting the allegations to establish a violation of New York City Administrative Code,” the case asserts.

Although OATH hearing officers are tasked with deciding whether the court mandates were properly issued and whether the respondent business truly poses an imminent threat to the public’s health, safety or welfare, these determinations are merely recommendations to the Sheriff’s Office, the lawsuit claims. Rather, it is entirely up to the agency to decide whether a business should open or remain closed for one full year, the case says.

“The [Fourteenth Amendment] Due Process Clause does not permit a business’s continued closure for one full year, with just a limited administrative review before OATH, where the Sheriff ultimately makes a unilateral decision, needing only to consider but not follow OATH’s hearing officer’s recommendation, and during the entire process, the business is never permitted to seek judicial intervention to prevent, stop, or reverse the Sheriff’s closure of the business,” the filing argues.

Per the complaint, the 27 plaintiff businesses represent “just a small fraction” of the total number of NYC businesses that have been shuttered by the Sheriff’s Office under the city’s Administrative Code.

The lawsuit looks to represent any entities whose businesses have been sealed by the New York City Sheriff’s Office in reliance upon sections 7-551 and 7-552 of the New York City Administrative Code.

Are you owed unclaimed settlement money? Check out our class action rebates page full of open class action settlements.