Honda Finance Sues Newark City Over Vehicle Seizure and Auction Without Notice

A subsidiary of Honda Auto Finance — Honda Lease Trust — has filed a lawsuit in the U.S. District Court for the District of New Jersey, accusing the City of Newark and its contractor Dente Brothers Towing Company of unlawfully seizing, storing, and auctioning a 2025 Acura Integra registered in Honda's name — without due process — thereby severely infringing Honda's legally protected security interest as the secured creditor.

According to the complaint filed on June 18, the incident occurred in May 2025. Newark police, citing a 'motor vehicle violation,' authorized Dente Brothers to tow a 2025 Integra leased by an Acura dealer and financed by Honda Finance. Because the vehicle title was registered directly in Honda's name, the company held full legal ownership and perfected security interest under applicable law.

The complaint stresses that Honda had no involvement in the vehicle's day-to-day use and was unaware of the police seizure. Moreover, officers conducted the seizure without presenting a search warrant or any judicial authorization. Honda only learned of the tow and impoundment the following month — via official correspondence — at which point Dente Brothers refused to return the vehicle unless Honda first paid $1,461 in towing and storage fees.

After Honda declined to pay, Newark City proceeded to publicly auction the vehicle, with all proceeds split between the city and Dente Brothers — without remitting any compensation to Honda. The complaint notes that the entire process lacked both pre-deprivation hearings and post-deprivation remedies, and Honda never received formal notice of the auction or an opportunity to contest it.

The plaintiff alleges that Newark City has long employed an 'outdated and unconstitutional' practice: delegating full control — and de facto disposition authority and revenue rights — over seized vehicles to the winning towing contractor. This arrangement allows the city to avoid public expenditures on vehicle custody and transportation, while shifting legal risk and financial loss onto financial institutions and other innocent secured creditors.

The complaint cites several precedents supporting its claims: In September 2024, the U.S. Court of Appeals for the Third Circuit ruled that a similar towing policy in Butler Township, New Jersey, violated the Due Process Clause of the Fourteenth Amendment; in March 2025, the U.S. District Court for the Southern District of New York likewise found New York City's towing procedures unconstitutional for depriving secured creditors of procedural due process — the case was brought by Mercedes-Benz Financial Services.

In the suit, Honda Lease Trust seeks compensatory and punitive damages, plus a permanent injunction declaring Newark City's current vehicle seizure and auction policy unconstitutional. Notably, the lessee is not named as a party in this action.