Post-Deprivation State Remedies Defeat § 1983 Due Process Claims for Unauthorized Property Seizures; Sherman Act Pleading Requires Market-Wide Competitive Harm

Introduction

In Ams. Choice Veterans Constr. Inc. v. City of New York (2d Cir. Apr. 20, 2026) (summary order), the Second Circuit affirmed dismissal of federal claims brought by Americas Choice Veterans Construction Inc. and two individuals (collectively, “Plaintiffs”) against a mixed set of defendants including former consultants, a federal credit union, a New York City marshal, and the City of New York (collectively, “Defendants”).

The dispute arose from a New York City Small Claims Court case in which Plaintiffs allegedly did not receive notice because an address used in the filings was false. Two default judgments were entered; Plaintiffs’ accounts at the credit union were frozen and funds were levied. After learning of the action, Plaintiffs obtained vacatur of the judgments; their accounts were unfrozen and money was returned “with interest.” Plaintiffs then sued in federal court asserting (i) procedural due process violations under 42 U.S.C. § 1983 and (ii) a conspiracy to restrain trade under § 1 of the Sherman Act, 15 U.S.C. § 1. The key issues on appeal were whether post-deprivation state remedies barred the due process theory, whether the antitrust allegations plausibly alleged harm to competition in the market as a whole, and whether the district court properly declined supplemental jurisdiction over state-law claims after dismissing federal claims.

Summary of the Opinion

  • Due process: The court held that Plaintiffs failed to plausibly allege a constitutional violation because meaningful post-deprivation remedies existed and were successfully used (vacatur, return of funds with interest). Under governing precedent, an unauthorized intentional deprivation by a state employee does not violate procedural due process if the state provides a meaningful post-deprivation remedy.
  • Sherman Act: The court held Plaintiffs failed to plead an actual adverse effect on competition “as a whole” in the relevant market. At most, Plaintiffs alleged harm to their own ability to bid on government contracts—harm to a competitor, not harm to competition.
  • Supplemental jurisdiction: With federal claims dismissed at an early stage, the district court acted within its discretion in declining supplemental jurisdiction under 28 U.S.C. § 1367.

Analysis

Precedents Cited

Pleading and Rule 12(b)(6)

  • Palmer v. Amazon.com, Inc., 51 F.4th 491 (2d Cir. 2022): Provided the standard of de novo review and the direction to accept well-pleaded allegations as true while drawing reasonable inferences for the plaintiff at the motion-to-dismiss stage.
  • Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009): Supplied the “plausibility” framework—Plaintiffs had to allege facts permitting a reasonable inference of liability, not merely speculative or conclusory claims.

Procedural Due Process and Post-Deprivation Remedies

  • Hellenic Am. Neighborhood Action Comm. v. City of New York, 101 F.3d 877 (2d Cir. 1996): The controlling Second Circuit statement of the rule that the Due Process Clause “is not violated” by an intentional deprivation by a state employee so long as the state provides a meaningful post-deprivation remedy.
  • Hudson v. Palmer, 468 U.S. 517 (1984): The foundational Supreme Court authority. The panel leaned on Hudson’s logic that for unauthorized intentional deprivations, the constitutional inquiry focuses on whether the state later provides (or refuses to provide) a suitable remedy; if it does, due process is satisfied.
  • Chunn v. Amtrak, 916 F.3d 204 (2d Cir. 2019), quoting Hodel v. Virginia Surface Min. & Reclamation Ass'n, Inc., 452 U.S. 264 (1981): Reinforced the principle that for property deprivations, due process is generally satisfied if there is, at some stage, an opportunity for a hearing and judicial determination.

Sherman Act: Harm to Competition vs. Harm to a Competitor

  • 1-800 Contacts, Inc. v. Fed. Trade Comm'n, 1 F.4th 102 (2d Cir. 2021): Provided the basic elements of a § 1 claim (agreement plus unreasonable restraint) and the requirement—central here—that the plaintiff show actual adverse effect on “competition as a whole” in the relevant market.
  • Broadcast Music, Inc. v. CBS, 441 U.S. 1 (1979): Plaintiffs invoked the “always or almost always” language associated with per se treatment. The panel rejected Plaintiffs’ reliance because even a practice that harms a firm does not automatically establish market-wide harm.
  • MacDermid Printing Sols. LLC v. Cortron Corp., 833 F.3d 172 (2d Cir. 2016), quoting Clorox Co. v. Sterling Winthrop, Inc., 117 F.3d 50 (2d Cir. 1997): Supplied the dispositive distinction: antitrust law protects “competition, not competitors,” and therefore requires harm beyond the plaintiff’s own business—ultimately, harm to consumers/market output/competitive conditions.

Supplemental Jurisdiction After Dismissal of Federal Claims

  • Haran v. Orange Bus. Servs., Inc., 160 F.4th 51 (2d Cir. 2025): Supplied the abuse-of-discretion standard for reviewing the decision to decline supplemental jurisdiction.
  • Russo v. Patchogue-Medford Sch. Dist., 129 F.4th 182 (2d Cir. 2025), and Kolari v. N.Y.-Presbyterian Hosp., 455 F.3d 118 (2d Cir. 2006): Reinforced the “usual rule” that when all federal claims are dismissed—particularly early—district courts may, and often should, dismiss remaining state claims without prejudice under 28 U.S.C. § 1367.

Legal Reasoning

1) Why the Due Process Claim Failed

Plaintiffs framed the deprivation as deliberate: the former consultants allegedly used a false address to obtain default judgments, and the marshal and credit union allegedly participated in execution of the levy. Even taking those allegations as true, the panel treated the deprivation as the kind of “unauthorized” action addressed by Hudson v. Palmer and Hellenic Am. Neighborhood Action Comm. v. City of New York: where pre-deprivation process is not realistically guaranteed against such misconduct, the constitutional question turns on the availability and meaningfulness of post-deprivation remedies.

The court emphasized two pleaded facts that foreclosed plausibility of a due process violation: Plaintiffs successfully moved in state court to vacate the default judgments; their accounts were unfrozen; and their money was returned with interest. Plaintiffs did not allege that the state courts refused to provide a remedy or that the remedy was illusory—only that a § 1983 action might be more favorable. Under Hellenic, that is legally insufficient because due process does not require the same relief as § 1983; it requires a meaningful opportunity to be heard at some point and an adequate remedial mechanism.

2) Why the Sherman Act Claim Failed

Plaintiffs’ antitrust theory was that freezing/levying funds temporarily reduced their ability to compete (including bidding on government contracts), thereby “unreasonably restrain[ing] trade.” The panel applied 1-800 Contacts, Inc. v. Fed. Trade Comm'n to require allegations of an adverse effect on competition in the relevant market “as a whole.” The complaint, as characterized by the court, alleged only an interruption to Plaintiffs’ operations—i.e., harm to one firm. Under MacDermid Printing Sols. LLC v. Cortron Corp. and Clorox Co. v. Sterling Winthrop, Inc., that does not state an antitrust injury because antitrust law targets market-wide competitive harm, not individual business setbacks.

Plaintiffs’ attempt to re-label the conduct as a per se violation based on Broadcast Music, Inc. v. CBS did not salvage the claim, in part because the panel treated the deficiency as the absence of plausible market-wide competitive effects rather than a mere choice of analytical framework.

3) Why Declining Supplemental Jurisdiction Was Proper

After dismissing all federal claims at the pleadings stage, the district court declined jurisdiction over remaining state-law claims. The panel treated that decision as squarely within the mainstream practice endorsed by Russo v. Patchogue-Medford Sch. Dist. and Kolari v. N.Y.-Presbyterian Hosp., and found no special circumstances warranting retention of state claims.

Impact

  • Procedural due process strategy: Litigants challenging wrongful levies, freezes, or default judgments in New York will face a high hurdle in federal court when state-court mechanisms (e.g., vacatur of defaults, return of funds) provide meaningful relief. The decision underscores that alleging intentional misconduct does not itself create a federal due process claim if the state provides adequate post-deprivation correction.
  • Antitrust pleading discipline: The order reiterates that business disruptions—even if wrongful—do not become Sherman Act violations without plausible allegations of market-wide harm (reduced output, higher prices, diminished quality/innovation, foreclosure affecting competitive structure, etc.). “We were temporarily less able to compete” is not enough.
  • Forum consequences: The opinion also illustrates the common sequencing outcome: when federal anchors fail early, state-law claims are likely to return to state court under § 1367, increasing the importance of pleading federal claims with doctrinal precision from the outset.

Note: Because this is a Second Circuit “SUMMARY ORDER,” it “DO[ES] NOT HAVE PRECEDENTIAL EFFECT,” though it may be cited as permitted by rule and can be persuasive in similar fact patterns.

Complex Concepts Simplified

  • Procedural due process (property): The Constitution generally requires fair procedures before the government deprives someone of property. But for random/unauthorized misconduct by officials, courts often accept that the state cannot always provide meaningful pre-deprivation process; instead, due process is satisfied if the state offers a real, usable way to fix the problem after it happens.
  • “Meaningful post-deprivation remedy”: A practical legal mechanism—such as moving to vacate a default judgment and obtaining return of seized funds—that provides an opportunity for judicial review and remediation.
  • Antitrust injury / harm to competition vs. competitors: Antitrust law is concerned with the competitive process in a market (prices, output, quality, consumer choice). Harm to one company—even severe harm—does not by itself show that competition in the market was harmed.
  • Per se vs. rule of reason: Some restraints are treated as so predictably harmful that they are illegal “per se.” But even then, a plaintiff must still connect the alleged conduct to the kind of competitive harm the Sherman Act addresses; merely re-labeling a dispute as “per se” does not replace the need for plausible market impact where required.
  • Supplemental jurisdiction: Federal courts may hear state claims tied to federal claims. If the federal claims are dismissed early, federal courts commonly dismiss state claims too, leaving them for state courts.

Conclusion

Ams. Choice Veterans Constr. Inc. v. City of New York reaffirms two core constraints on federal civil litigation: (1) a procedural due process claim under § 1983 is generally foreclosed where the state provides and actually delivers a meaningful post-deprivation remedy for an unauthorized seizure of property; and (2) a Sherman Act § 1 claim requires plausible allegations of harm to competition in the market as a whole, not merely harm to the plaintiff’s business. With those federal theories dismissed, the court also endorsed the routine practice of declining supplemental jurisdiction over remaining state-law claims under § 1367.