DeMartino et al v. New York State Department of Labor et al
Filing
86
ORDER. For the reasons provided in the annexed opinion, plaintiffs' motion 58 for a preliminary injunction and for recusal is denied. Defendants' motions to dismiss 68 76 are granted. Because plaintiffs have already had one opportunit y to amend their complaint, and because any amendment would be futile, the court will not grant leave to amend. The Clerk of Court is respectfully directed to enter judgment in favor of defendants and close this case. Ordered by Judge Kiyo A. Matsumoto on 3/1/2016. (Jacobson, Jonathan)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------x
FRANK DEMARTINO and
TADCO CONSTRUCTION CORP.
Plaintiffs,
MEMORANDUM & ORDER
13-CV-5273 (KAM) (MDG)
-againstNEW YORK STATE DEPARTMENT OF LABOR;
DORMITORY AUTHORITY OF THE STATE OF
YORK;
PETER M. RIVERA, Commissioner of the
York State Department of Labor, in
official and individual capacities;
JOHN PADULA, in his official
individual capacities;
JOHN W. SCOTT, in his official
individual capacities;
DENNIS MONAHAN, in his official
individual capacities; and
JOHN DOES #1-10, in their official
individual capacities,
NEW
New
his
and
and
and
and
Defendants.
-----------------------------------x
KIYO A. MATSUMOTO, United States District Judge:
The New York Labor Law authorizes the Commissioner of
the New York Department of Labor (“DOL”) to order the withholding
of payments due a contractor on a public works project if that
contractor
fails
to
pay
a
prevailing
wage
to
its
workers.
Plaintiffs — TADCO Construction Corp. (“TADCO”), a New York public
works contractor, and Frank DeMartino (“DeMartino”), that entity’s
owner — filed an amended complaint alleging principally that the
DOL
improperly
issued
multiple
withholdings
in
violation
of
plaintiffs’ due process rights, thereby depriving them of payment
1
to which they were contractually entitled. Defendants have moved
to dismiss the amended complaint. The plaintiffs have moved for
this court’s recusal and for injunctive relief. For the reasons
set forth herein, the plaintiffs’ motions are denied and the
defendants’ motions to dismiss are granted.
BACKGROUND
I.
New York’s Prevailing Wage Law
Before addressing the factual background of the instant
case, the court will detail the statutory framework of New York’s
prevailing wage law. See N.Y. Lab. Law § 220 et seq. (“§ 220” or
the “prevailing wage law”). The prevailing wage law implements
Article I, § 17 of the New York Constitution, which provides that
no “laborer, worker or mechanic, in the employ of a contractor or
sub-contractor engaged in the performance of any public work,
shall . . . be paid less than the rate of wages prevailing in the
same trade or occupation in the locality.”
Under § 220, the wages to be paid in New York on a public
project “shall be not less than the prevailing rate of wages.”
§ 220(3)(a). The statute also requires that wage supplements —
e.g., benefits — be aligned with prevailing local practices. See
§ 220(3)(b). The “prevailing rates of wages” in New York state are
generally determined by the commissioner of the DOL, based on
collective bargaining agreements, though the Comptroller of the
City of New York City sets the prevailing wage rates in New York
2
City. See RI, Inc. v. Gardner, 523 F. App’x 40, 41 & n.2 (2d Cir.
2013) (citing § 220(5)(a)); see also § 220(5)(e). When an employer
fails to pay the prevailing wage, the DOL has the authority —
either sua sponte or upon a worker’s complaint — to direct the
contracting agency to withhold payment on the public contract
pending DOL’s investigation and administrative proceedings. See
§ 220(7)–(8); see also § 220-b(2)(c).
There are three types of withholdings relevant to this
litigation. The first, referred to as “underpayment withholding,”
requires the DOL — when wages or supplements “appear to be due” —
to immediately notify the public contracting agency to withhold
funds due on a project sufficient “to satisfy said wages and
supplements, including interest and penalty.” § 220-b(2)(a)(1).
The DOL may then investigate and conduct an administrative hearing.
See
§ 220-b(2)(c);
see
also
§ 220(7)–(8).
If
underpayment
is
determined to have occurred, the DOL may order payment by the
contractor
of
the
underpaid
wages
and
supplements,
including
interest and a civil penalty that cannot exceed 25% of the “total
amount found to be due.” § 220(8). The contractor can seek review
of that decision in an Article 78 proceeding in New York state
court. Id. Pending the final determination, the withheld funds are
to be held in trust “for the sole and exclusive benefit of the
workers . . .
and
for
payment
of
any
civil
penalty.”
§ 220-
b(2)(b), (c); Titan Indem. Co. v. Triborough Bridge & Tunnel Auth.,
3
Inc., No. 94-CV-5447, 1996 WL 556988, at *5 (S.D.N.Y. Oct. 10,
1996).
The second type of withholding is referred to as “crosswithholding.” In the event that there are insufficient funds still
due to the contractor to satisfy the wages, supplements, interest
and
penalty
due
on
a
particular
public
project,
the
DOL
is
authorized to direct a contracting agency to withhold payment due
on a separate public project to cover the difference. See § 220b(2)(a)(1).
The third type of withholding is referred to as “records
withholding.” A public works contractor is required at all times
to keep original payrolls “setting forth the names and addresses
and showing for each worker, laborer, or mechanic the hours and
days worked, the occupations worked, the hourly wage rates paid
and the supplements paid or provided.” § 220(3-a)(a)(iii). The DOL
is empowered to request such payroll records directly from the
contractor, which must be turned over within ten days. See § 220(3a)(c). If the contractor fails to provide the requested information
within ten days, the DOL “shall, within fifteen days, order the
[contracting agency] to immediately withhold” up to 25% of the
amount
due
the
contractor
under
the
contract,
not
to
exceed
$100,000. See id. If the contractor supplies the requested records,
however, the DOL must immediately release the funds. See id. While
the statutory regime contemplates an administrative hearing to
4
address both an underpayment withholding and a cross-withholding,
there is no statutory entitlement to a hearing for a records
withholding. Compare § 220(7)-(8), with § 220(3-a)(a)(iii)-(iv),
(c).
II.
Factual Background
The following facts are drawn primarily from the Amended
Complaint (ECF No. 29, Amended Complaint (“Am. Compl.”)) and, for
purposes of this motion, are presumed to be true unless they are
conclusory or merely state the elements of a claim. 1 Prior to the
commencement of the instant dispute, TADCO and its principal owner
1
In evaluating a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6)
— which is the primary dismissal authority employed by both defendants
in this case — “a district court may consider the facts alleged in the
complaint, documents attached to the complaint as exhibits, and documents
incorporated by reference in the complaint.” DiFolco v. MSNBC Cable
L.L.C., 622 F.3d 104, 111 (2d Cir. 2010); see also 5B Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed.). “Even
where a document is not incorporated by reference, the court may
nevertheless consider it where the complaint relies heavily upon its
terms and effect, which renders the document integral to the complaint.”
Mangiafico v. Blumenthal, 471 F.3d 391, 398 (2d Cir. 2006) (internal
quotation marks and citation omitted). Even if a document is integral,
however, it must “be clear on the record that no dispute exists regarding
the authenticity or accuracy of the document.” Faulkner v. Beer, 463
F.3d 130, 134 (2d Cir. 2006). The court may also consider “matters of
which judicial notice may be taken.” Allen v. WestPoint-Pepperell, Inc.,
945 F.2d 40, 44 (2d Cir. 1991).
Consideration of matters beyond those just enumerated would
require that the court convert the motion to dismiss into one for summary
judgment under Fed. R. Civ. P. 56. See Fed. R. Civ. P. 12(d); see also
Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir. 1991). Although
the ample material outside the pleadings submitted by both parties in
this case might suggest the propriety of converting the defense motions
here to ones for summary judgment, the court declines to do so. In
reaching the conclusion that plaintiffs have failed to state a viable
claim in this action, the court disregards all evidence that falls
outside the above enumerated categories.
5
DeMartino (hereinafter, “plaintiffs”) were awarded several state
and municipal public works contracts. See TADCO Const. Corp. v.
Dormitory Auth. of State of New York, 700 F. Supp. 2d 253, 257
(E.D.N.Y. 2010). This action arises out of two of those contracts,
entered into between plaintiffs and the Dormitory Authority of the
State
of
New
York
(“DASNY”),
“a
public
benefit
corporation
responsible for the financing and construction of facilities for
State agencies and other entities for which the Legislature has
given authorization.” New York State Chapter, Inc. v. New York
State Thruway Auth., 666 N.E.2d 185, 192 (N.Y. 1996); see also
N.Y.
Pub.
Auth.
Law
§
1675
et
seq.
(DASNY’s
implementing
legislation).
The first of the projects giving rise to this action
involved general construction work at the Queens Hospital Center
in Queens, New York (the “Queens Hospital Project”). (See Am.
Compl. at ¶ 12.) Plaintiffs and DASNY entered into a contract for
the Queens Hospital Project in September 2005. (Id.) Plaintiffs
allege that they completed all work on the project. (Id. at ¶ 13.)
The second relevant project took place at or around the same time
as the Queens Hospital Project, and involved the construction of
a
residence
building
for
the
Staten
Island
Developmental
Disabilities Services Office (the “Staten Island Project”). (Id.
at
¶¶
14–15.)
construction
The
problems
Staten
and
Island
delays
6
Project
from
the
“was
beset
outset”
and
with
the
relationship between TADCO and DASNY on the project was “marked by
rancorous disputes over ongoing payment/funding issues and project
management and other issues and became deeply acrimonious and
adversarial.” (Id. at ¶ 15.)
Disputes over payment on these two projects, as well as
two others not relevant in this litigation, led TADCO to bring
four suits in early January 2007 in New York state court seeking
payment for its work. (Id. at ¶¶ 13-14 & n.1.) In mid-January 2007,
after the four suits were filed, DASNY “unilaterally terminated
TADCO” from the Staten Island Project over TADCO’s objections.
(Id.
at
¶ 16.)
In
late
January
2007,
after
TADCO
had
been
terminated from the Staten Island Project, plaintiffs allege that
DASNY
employee
investigator
John
Dennis
Padula
Monahan
(“Monahan”)
(“Padula”)
and
contacted
DOL
“vindictively
and
maliciously instructed him to open an investigation against TADCO
for alleged prevailing wage law violations” on the Queens Hospital
Project. (Id. at ¶ 17.) Plaintiffs allege that this investigation
was entirely baseless and that it was undertaken “in retaliation
for and as a tactical response to the lawsuits that TADCO had filed
and to intimidate, harass and punish TADCO and its principal Mr.
DeMartino.” (Id. at ¶¶ 18-23.)
According to the Amended Complaint, DOL investigator
Padula was effectively “on loan” to DASNY. (Id. at ¶ 19.) DASNY
paid his salary and benefits, and he worked exclusively for DASNY
7
pursuant to a “memorandum of understanding” between DASNY and DOL.
(Id.; see also ECF No. 58, Declaration of Bryan Ha (“Ha Decl.”),
Ex. E.) Plaintiffs allege that DASNY, through Monahan and others,
“controlled
through
him
this
supposedly
effectively,
independent
and
DOL
unlawfully,
investigator
exercised
and
the
investigatory and prosecutorial powers of the DOL.” (Am. Compl. at
¶ 19.)
During the DOL investigation, the DOL issued a notice of
records withholding in February 2007 for $62,000 in connection
with the Queens Hospital Project. (Id. at ¶ 25; see also Ha. Decl.,
Ex. G.) Plaintiffs allege that Padula obtained TADCO’s payroll
records from DASNY and, “after conducting his investigation, found
no evidence of any prevailing wage law violations” on the Queens
Hospital Project. (Am. Compl. at ¶ 26.) No hearing was ever held
to address the February 2007 records withholding. 2 (Id. at ¶ 27.)
2
In January 2008, plaintiffs commenced an action pursuant to 42 U.S.C.
§ 1983 in the Eastern District of New York against DASNY over a variety
of issues related to the Staten Island Project. See TADCO Const., 700
F. Supp. 2d at 256-57, 259. In that action, TADCO asserted a due process
violation under § 1983 arising from “purportedly defamatory comments
made by DASNY during its termination of the contract with TADCO and from
DASNY’s failure to pay TADCO promptly for work performed.” Id. at 257.
TADCO also asserted multiple state law breach of contract claims against
DASNY. Id. DeMartino, in the same action, separately brought federal and
state claims of false arrest, malicious prosecution, and abuse of
process, claiming that DASNY employees “improperly had him arrested for
trespassing at the job site on two separate occasions.” Id. In March
2010, the district court dismissed the federal § 1983 claims except those
arising from DeMartino’s arrest. Id. at 277. Those claims were ultimately
dismissed in September 2014, and the court declined to exercise
supplemental jurisdiction over the remaining state law claims. See TADCO
Const. Corp. v. Dormitory Auth. of New York, No. 08-CV-0073, 2014 WL
4662139, at *7 (E.D.N.Y. Sept. 18, 2014).
8
In
February
2010,
DOL
issued
a
second
withholding
notice, this time to address purported wage underpayments on the
Staten Island Project. (Id. at ¶ 35.) The second withholding was
for approximately $253,000. (Ha Decl., Ex. M.)
Plaintiffs allege
that, after issuing the February 2010 withholding notice, Padula
“did virtually nothing in connection with the investigation on
this project.” (Am. Compl. at ¶ 35.)
In June 2012, with the DOL proceedings against TADCO
still open, the state court hearing TADCO’s suit on the Queens
Hospital Project contract issued a decision granting TADCO partial
summary judgment. (See Am. Compl., Ex. A.) The state court rejected
DASNY’s
assertion
that
the
February
2007
records
withholding
ordered by DOL precluded DASNY from recovering on the contract
balance,
and
therefore
ordered
DASNY
to
pay
the
$21,332.35
remaining balance as well as certain payments approved by DASNY
for work beyond that contemplated by the initial agreement. (Id.)
With
statutory
interest,
the
state
court
judgment
totaled
plaintiffs
pursuant
to
$57,378.32. (Ha. Decl., Ex. J.)
Before
DASNY
had
paid
the
judgment in the Queens Hospital Project suit, plaintiffs allege
that
Monahan
and
other
DASNY
employees
conspired
with
DOL
investigator Padula to issue another withholding notice. (Am.
Compl. at ¶¶ 32-33.) This third notice, issued in May 2013, was a
cross-withholding for $80,000 in payment on the Queens Hospital
9
Project due to purported prevailing wage violations on the Staten
Island Project. (Id.; see also Ha Decl., Ex. L.) Simultaneously,
however,
DOL
withholding
released
on
the
the
Queens
$62,000
Hospital
February
Project
2007
and
records
closed
that
investigation. (Ha Decl., Ex. I; Am. Compl. at ¶ 27.)
Plaintiffs
allege
that
a
hearing
on
the
DOL
investigation into prevailing wage violations on the Staten Island
Project was only scheduled after TADCO sent a letter to DOL in
August
2013
complaining
that
“DOL’s
practice
of
issuing
withholding notices to deprive TADCO of payment for its work for
prolonged periods without any notice or opportunity to be heard
violated its due process rights.” (Id. at ¶ 36.) No hearing was
conducted on the remaining Staten Island Project prevailing wage
withholding or cross-withholding notices until April 2014. (Am.
Compl. at ¶¶ 27, 35–37.) That hearing, which was adjourned to
September 2014, was focused on the prevailing wage proceeding
regarding the Staten Island Project. (Id. at ¶ 37.) Plaintiffs
allege that this hearing is a “mere sham” because of “DASNY’s
active and direct involvement in the DOL proceedings against TADCO
and Mr. DeMartino.” (Id. at ¶ 38.)
III. The Instant Action
Plaintiffs commenced this action in September 2013. (ECF
No. 1, Complaint.) Plaintiffs assert five distinct causes of action
against:
(1)
DASNY;
(2)
the
DOL;
10
(3)
Peter
Rivera,
the
DOL
commissioner
at
the
time
this
action
was
filed;
(4)
DOL
investigator Padula; (5) John W. Scott, a DOL hearing officer; (6)
DASNY employee Monahan; and (7) John Does ##1-10 (collectively,
“defendants”). The complaint was amended on August 11, 2014.
The claims in the amended complaint are as follows: (1)
a substantive due process claim under 42 U.S.C. § 1983 (“§ 1983”)
arising from the actions of the defendants on the Queens Hospital
Project; (2) a procedural due process claim under § 1983 arising
chiefly from the delay in conducting a hearing on the Staten Island
Project underpayment withholding and the failure to hold a hearing
on
the
Queens
Hospital
Project
records
withholding;
(3)
a
conspiracy claim under § 1983 arising from the defendants’ alleged
collaboration
in
launching
baseless
prevailing
wage
investigations; (4) an abuse of process claim under § 1983 arising
from defendants’ alleged abuse of the administrative process; and
(5) a due process claim under Article I, § 6 of the New York State
Constitution. 3
Plaintiffs’
five
3
theories
of
liability
do
not
Plaintiffs brought a sixth claim styled “Respondeat Superior.” (Am.
Compl. at ¶¶ 93-97.) The Respondeat Superior claim is dismissed because
it is not a stand-alone cause of action but only a theory that establishes
the liability of a principal or an employer “for the employee’s or
agent’s wrongful acts committed within the scope of the employment or
agency.” Black’s Law Dictionary (10th ed. 2014); Alexander v. Westbury
Union Free Sch. Dist., 829 F. Supp. 2d 89, 112 (E.D.N.Y. 2011)
(“Respondeat superior is not an independent cause of action, but a theory
that must attach to an underlying claim.”); see also Harsco Corp. v.
Segui, 91 F.3d 337, 349 (2d Cir. 1996) (“[T]here being no surviving
underlying theory of liability, the respondeat superior claims were also
properly dismissed.”).
11
meaningfully distinguish between the defendants. Plaintiffs have
sought both equitable relief and damages on each claim. (See Am.
Compl. at ¶¶ 56, 72, 80, 89, 92.)
Plaintiffs
filed
a
motion
seeking
a
preliminary
injunction as well as this court’s recusal, and briefed the issues.
(See ECF No. 58, Plaintiffs’ Memorandum in Support of Motion for
Preliminary Injunction and Recusal (“Pl. Inj. Br.”).) The DASNY
and DOL defendants separately opposed the motion. (See ECF No. 61,
DASNY Opposition to Plaintiff’s Motion for Preliminary Injunction
(“DASNY Inj. Opp’n”); ECF No. 65, DOL Opposition to Plaintiff’s
Motion for Preliminary Injunction (“DOL Inj. Opp’n”).) Plaintiffs
replied in a single brief. (See ECF No. 59, Plaintiffs’ Reply in
Support of Motion for Preliminary Injunction and Recusal (“Pl.
Inj. Reply”).)
Both defendants have separately moved to dismiss this
action primarily under Rule 12(b)(6), and filed memoranda of law
in support of their motions to dismiss. (See ECF No. 70, DASNY
Memorandum of Law in Support of Motion to Dismiss (“DASNY Mem.”);
ECF No. 79, DOL Memorandum of Law in Support of Motion to Dismiss
(“DOL Mem.”).) Plaintiffs opposed both of the motions (see ECF No.
74, Plaintiffs’ Opposition to DASNY Motion to Dismiss (“Pl. Opp’n
to DASNY”); ECF No. 84, Plaintiffs’ Opposition to DOL Motion to
Dismiss (“Pl. Opp’n to DOL”)), and the DOL and DASNY defendants
replied. (See ECF No. 71, DASNY Reply to Plaintiffs’ Opposition
12
(“DASNY Reply”); ECF No. 80, DOL Reply to Plaintiffs’ Opposition
(“DOL Reply”).) Declarations and exhibits were also filed by the
parties. The court will refer to these documents when necessary
and permissible throughout this opinion.
MOTION TO DISMISS LEGAL STANDARD
On a motion to dismiss, the court must accept as true
the factual allegations in the operative complaint and draw all
reasonable inferences in the plaintiffs’ favor. See Krys v. Pigott,
749 F.3d 117, 128 (2d Cir. 2014). The court, however, need not
apply
this
principle
to
“legal
conclusions”
or
“[t]hreadbare
recitals of the elements of a cause of action, supported by mere
conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(“A pleading that offers labels and conclusions or a formulaic
recitation of the elements of a cause of action will not do.”
(internal quotation marks and citation omitted)). The complaint
must instead “contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Id.
at 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). 4
4
Plaintiffs’ motion papers appear to rely on the long inapplicable “no
set of facts” standard (see Pl. Opp’n to DOL at 11 (“A party moving for
dismissal under Rule 12(b)(6) has a substantial burden to show that it
is clear that no relief could be granted under any set of facts that
could be proved consistent with the allegations” (citation omitted));
Pl. Opp’n to DASNY at 14 (same)), which was explicitly rejected by the
Supreme Court in Twombly. See 550 U.S. at 562 (“[T]here is no need to
pile up further citations to show that Conley’s “no set of facts”
language has been questioned, criticized, and explained away long
13
DISCUSSION
The court will consider the claims in the following
manner. The court first addresses the recusal motion brought by
plaintiffs. Second, the court will address the Younger abstention
issue raised by the defendants. Third, the court will address the
Eleventh Amendment immunity issue raised by the DOL. Fourth, the
court will address whether plaintiffs have a protected property
interest sufficient to merit due process protection. Fifth, the
court will address plaintiffs’ procedural due process contentions.
Sixth, the court will address plaintiffs’ substantive due process
allegations. Seventh, the court will address plaintiffs’ abuse of
process
claim.
Eighth,
the
court
will
address
plaintiffs’
conspiracy claim. Finally, the court will address plaintiffs’ due
process claim under the New York State Constitution. 5
I.
Recusal is Unwarranted
Plaintiffs first move to recuse the court on the basis
of 1) partiality and 2) personal bias or prejudice. 6 (Pl. Inj. Br.
enough.” (abrogating Conley v. Gibson, 355 U.S. 41 (1957)); see also
Wolff v. Town of Mount Pleasant, No. 06-CV-3864, 2009 WL 1468620, at *1
(S.D.N.Y. May 26, 2009) (rejecting a magistrate judge’s report and
recommendation that had employed the more plaintiff-friendly no-set-offacts standard because the standard, after Twombly and Iqbal, had “earned
its retirement” (internal quotation marks and citation omitted)).
5 Because the Amended Complaint is dismissed on other grounds, the court
does not reach the process issue raised by the DOL, the Monell issue
raised by DASNY, or the qualified immunity issues raised by both
defendants.
6
It is unclear if plaintiff’s recusal request pertains only to
plaintiffs’ motion for a preliminary injunction, or extends beyond that
motion to the entire case (including, of course, defendants’ respective
14
at 26-28; Pl. Inj. Reply at 16.) Defendants contend that there is
no valid ground for recusal. (DASNY Inj. Opp’n at 25-27; DOL Inj.
Opp’n at 14-15.) Title 28 U.S.C. § 455(a) provides that a federal
judge “shall disqualify himself in any proceeding in which his
impartiality might reasonably be questioned.” That section is
followed by § 455(b)(1), which states - as relevant here - that a
judge “shall also disqualify himself” when he or she “has a
personal bias or prejudice concerning a party.”
A.
Recusal Is Not Warranted Under § 455(a)
Under § 455(a), “recusal is not limited to cases of
actual bias; rather, the statute requires that a judge recuse
himself whenever an objective, informed observer could reasonably
question the judge’s impartiality, regardless of whether he is
actually partial or biased.” United States v. Bayless, 201 F.3d
116, 126 (2d Cir. 2000); see also ISC Holding AG v. Nobel Biocare
Fin. AG, 688 F.3d 98, 107–08 (2d Cir. 2012) (“The question, as we
have put it, is whether ‘an objective, disinterested observer fully
informed of the underlying facts, [would] entertain significant
doubt that justice would be done absent recusal.’” (quoting United
States v. Carlton, 534 F.3d 97, 100 (2d Cir. 2008))).
The textbook example of this extreme prejudice is a
statement made by a judge presiding over a case involving German-
motions to dismiss). The court will assume that plaintiffs seek the
court’s recusal from the entire case.
15
Americans accused of espionage in World War I. In that case, the
judge stated: “One must have a very judicial mind, indeed, not to
be prejudiced against the German-Americans in this country. Their
hearts are reeking with disloyalty.” Berger v. United States, 255
U.S. 22, 28 (1921); see also Ligon v. City of New York, 736 F.3d
118, 124-27 & n.17 (2d Cir. 2013) (ordering recusal of judge after
appellate court found that judge encouraged plaintiffs to bring a
separate action, outlined the basis for that potential action,
provided her view of its merit, stated how she would rule on a
document request in that action, told plaintiffs she would take
the action as related to the already-ongoing litigation, and
provided multiple interviews with local and national media outlets
during which she “describe[d] herself as a jurist who is skeptical
of law enforcement”), vacated in part on other grounds, 743 F.3d
362 (2d Cir. 2014).
Significantly, opinions formed by a judge on the basis
of events occurring during the litigation, “do not constitute a
basis for a bias or partiality motion unless they display a deepseated favoritism or antagonism that would make fair judgment
impossible. Thus, judicial remarks during the course of a trial
that are critical or disapproving of, or even hostile to, counsel,
the parties, or their cases, ordinarily do not support a bias or
partiality challenge.” Liteky v. United States, 510 U.S. 540, 555
(1994). Examples of judicial behavior that would fail to establish
16
bias
or
partiality
are
“expressions
of
impatience,
dissatisfaction, annoyance, and even anger, that are within the
bounds of what imperfect men and women, even after having been
confirmed as federal judges, sometimes display.” Id. at 555-56.
Plaintiffs allege that, during a pre-motion conference
to discuss the injunction motion, the court “repeatedly pre-judged
the motion,” “expressed extreme hostility to the motion,” and cut
short attempts by counsel to provide the factual and legal bases
for the motion. (Ha Decl., at ¶¶ 3-4; Pl. Inj. Br. at 26-28; Pl.
Inj. Reply at 16.) Plaintiffs also claim that, during the same
conference,
the
plaintiffs
and
court
repeatedly
plaintiffs’
threatened
counsel,
to
sanction
“including
both
ordering
[plaintiffs] to pay the other side’s attorney’s fees, if they chose
to proceed with the motion and the Court ultimately denie[d] the
motion.” (Ha. Decl. at ¶ 4.) Plaintiffs’ counsel’s own perceptions
of “extreme hostility” and repeated threats of sanction that
chilled plaintiffs’ litigation decisions are unsupported by the
record.
After
considering
plaintiff’s
proposed
bases
for
injunctive relief as reflected in counsel’s request for a premotion conference (ECF No. 42) and his statements during the
conference on October 8, 2014, the court expressed its view that
the proposed motion appeared unlikely to succeed and more likely
to prompt an opposing party to request sanctions. Plaintiffs’
17
decision to proceed was not chilled as is evident by their decision
to pursue the motion.
Even taken as true, these judicial statements do not
rise near the level of the statements at issue in Ligon, the only
case discussed by plaintiffs on this issue, or Berger. This court
did not discuss the case with the media, provide a litigation
strategy roadmap to a party, or level ad hominem attacks at the
parties or counsel. Compare Ligon, 736 F.3d at 124-27 & n.17;
Berger, 255 U.S. at 28. Plaintiffs’ description of the court’s
“hostility” is based on their counsel’s perception of “expressions
of impatience, dissatisfaction, annoyance, and even anger” that
the Liteky Court determined would not support a motion for recusal.
See 510 U.S. at 555-56. Further, a judge’s statement that sanctions
could be awarded is not grounds for recusal. See Bell v. Johnson,
404 F.3d 997, 1006 (6th Cir. 2005) (finding insufficient to justify
recusal a judge’s statement that he was “inclined to award attorney
fees” exceeding those normally authorized under the relevant fees
statute because this statement merely provided “the parties with
additional information that might affect their decisions as to
whether it would be appropriate to settle the case”); Hoeft v.
Menos, 347 F. App’x 225, 228 (7th Cir. 2009) (concluding that the
“threat of sanctions” does not merit recusal).
B.
Recusal is Not Warranted Under § 455(b)(1)
18
Plaintiffs do not neatly divide their argument about
bias
and
prejudice
under
§ 455(a)
from
their
argument
about
partiality under § 455(b)(1). In any case, they fare no better
under § 455(b)(1), 7 which as relevant here requires recusal when
the judge has “personal bias or prejudice concerning a party.”
There is a certain degree of inevitable analytical overlap between
§ 455(a) and § 455(b)(1), as the Supreme Court has observed. See
Liteky, 510 U.S. at 552 (“As we have described, § 455(a) expands
the protection of § 455(b), but duplicates some of its protection
as well . . . .”); see also United States v. Jones, 294 F. App’x
624, 627 (2d Cir. 2008) (analyzing recusal motion brought pursuant
to § 455(a) and § 455(b)(1) under the same general rubric).
Just as under § 455(a), the bar is high for recusal under
§ 455(b)(1). Indeed, the bar is higher under § 455(b)(1). While
even the appearance of partiality would trigger § 455(a), a showing
of actual bias is required by § 455(b)(1). See United States v.
Osinowo, 100 F.3d 942 (2d Cir. 1996) (“Under § 455(b)(1), recusal
is mandated only where the district court harbors actual prejudice
or bias against a defendant.” (citation omitted)); United States
v. El-Gabrowny, 844 F. Supp. 955, 959 (S.D.N.Y. 1994) (“[Under
7
A sister statute to § 455(b)(1), located at 28 U.S.C. § 144, also
requires recusal when a judge “has a personal bias or prejudice either
against him or in favor of any adverse party.” However, the standard is
effectively the same under both statutes. See 13D Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 3542 (3d ed.) (“The
substantive standard for disqualification based upon actual bias or
prejudice is identical under § 144 and § 455(b)(1).”).
19
§§ 455(b)(1) and 144], what is required is a showing of bias in
fact; [§§ 455(b)(1) and 144] do not deal simply with appearances,
as
does
§ 455(a).”
(citation
omitted)).
A
brief
example
illustrates the difficulty of showing the requisite degree of
actual bias. The Second Circuit recently held that recusal was not
necessary despite a district judge’s statement during a criminal
proceeding in advance of sentencing that the defendant “is a
violent person who doesn’t deserve to be a free person.” See Jones,
294 F. App’x at 627.
This court concludes, for substantially the same reasons
discussed
above
in
the
court’s
§ 455(a)
analysis,
that
the
statements attributed to the court by plaintiffs do not merit
recusal under § 455(b)(1). Plaintiff’s allegation that the court
prejudged a motion and threatened sanctions - without more specific
facts about the nature of the purported bias or prejudice - does
not in any way suggest “personal” bias or prejudice. Further, none
of the statements attributed to the court indicate any greater
bias than the statements about the “violent” nature of a criminal
defendant made by the district judge before sentencing in Jones,
where recusal was held unwarranted. See 294 F. App’x at 627. Since
plaintiffs cannot show even the appearance of partiality, it would
defy logic to find that they could show actual bias or prejudice
on the part of the court.
20
II.
Younger Abstention
Defendants argue that this court should abstain from
exercising jurisdiction over the claims for injunctive relief
under Younger v. Harris, 401 U.S. 37, 41 (1971), which held that
federal courts should generally decline to enjoin state criminal
prosecutions. (See DASNY Mem. at 10-12; DASNY Reply at 9; DOL Inj.
Opp’n at 7-10; DASNY Inj. Opp’n at 7-9.) Younger now applies to
state administrative proceedings, including DOL proceedings under
§ 220. See Doe v. State of Conn., Dep’t of Health Servs., 75 F.3d
81, 85 (2d Cir. 1996), as amended on denial of reh’g (Jan. 30,
1996); Diamond “D” Constr. Corp. v. McGowan, 282 F.3d 191, 199202 (2d Cir. 2002) [“Diamond D”] (reversing injunction where
Younger
required
court
to
abstain
from
enjoining
§ 220
proceeding). Plaintiffs argue, both in their motion for injunctive
relief and in opposition to defendants’ motions to dismiss, that
Younger is inapplicable.
Younger abstention is required when three elements are
met: 1) there is an ongoing state proceeding; 2) an important state
interest is implicated; and 3) the plaintiff has a state court
avenue open for review of constitutional claims. See Grieve v.
Tamerin, 269 F.3d 149, 152 (2d Cir. 2001) (listing requirements
under Younger); Philip Morris, Inc. v. Blumenthal, 123 F.3d 103,
105
(2d
Cir.
1997)
(same).
However,
a
federal
court
may
“nevertheless intervene in a state proceeding upon a showing of
21
‘bad faith, harassment or any other unusual circumstance that would
call for equitable relief.’” Diamond D, 282 F.3d at 198 (quoting
Younger, 401 U.S. at 54). A party seeking to circumvent Younger
abstention bears the burden of establishing the applicability of
one of these exceptions. See Middlesex Cnty. Ethics Comm. v. Garden
State Bar Ass’n, 457 U.S. 423, 435 (1982); Kirschner v. Klemons,
225 F.3d 227, 235–36 (2d Cir. 2000). Plaintiffs in this case do
not argue that the three elements triggering Younger abstention
are unmet here. Instead, they argue only that the bad faith
exception to Younger applies. (See Pl. Inj. Br. at 16-18.)
The
bad
faith
exception
emphasizes
the
“subjective
motivation of the state authority in bringing the proceeding.” See
Diamond D, 282 F.3d at 199. “A state proceeding that is legitimate
in its purposes, but unconstitutional in its execution — even when
the violations of constitutional rights are egregious — will not
warrant the application of the bad faith exception.” Id. at 199.
Essentially, “the party bringing the state action must have no
reasonable expectation of obtaining a favorable outcome.” Cullen
v. Fliegner, 18 F.3d 96, 103 (2d Cir. 1994). In Cullen, the Second
Circuit identified circumstances in which the bad faith exception
might apply. Id. at 103-04. There, a teacher was disciplined in a
state
administrative
proceeding
after
distributing
pamphlets
opposing the re-election of certain school board members. See id.
at
99-101.
The
Second
Circuit
22
affirmed
the
district
court’s
injunction
against
the
school
district,
concluding
that
the
district court’s findings of a “past history of personal conflict”
between
the
teacher
and
the
school
district
as
well
as
the
“strictly ad hominem” manner in which the district had pursued the
teacher, imposed a chilling effect on his First Amendment rights.
See id. at 104. The Second Circuit held that the bad faith
exception to Younger abstention was applicable. Id.
The
Second
Circuit
reversed
an
injunction
by
the
district court and distinguished Cullen in the later Diamond D
decision, finding that the bad faith exception to the application
of Younger abstention did not apply. See 282 F.3d at 201. Like
this case, Diamond D involved a § 220 DOL proceeding in which the
DOL had ordered a withholding. Id. at 196. In Diamond D, the
district court had enjoined a DOL investigation under § 220 after
finding that the DOL had delayed the progress of an investigation
and withheld funds on the basis of an arbitrary investigation. See
282 F.3d at 193. The district court found that “the DOL [had]
evidenced an intent to harass and coerce [the contractor] into
paying the underpayment withholdings, regardless of whether the
withholdings
quotation
[had]
marks
acknowledged
the
withholdings
—
any
and
basis
in
citation
district
totaling
fact.”
omitted).
court’s
Id.
The
finding
approximately
at
$1.4
200
Second
that
(internal
Circuit
substantial
million
—
were
calculated by a DOL investigator based on exceptionally faulty
23
assumptions, at least one of which was employed by an investigator
“fully knowing that it was wrong.” Id. at 194-96. Further, the
withholding
placed
the
contractor
in
an
“untenable
financial
position” and created a “cash crisis” preventing the contractor
from obtaining new work because its insurer would not bond future
projects until the withholdings were resolved. See id. at 196.
Nonetheless, the Second Circuit vacated the injunction,
finding that the bad faith exception to the application of Younger
abstention did not apply. See id. at 198-202. The Second Circuit
concluded that these facts could not establish that the DOL’s
proceedings “were brought with an intent to harass or any other
illegitimate motive.” Id. at 200.
Instead, the court held that
the DOL’s investigation appeared to be “motivated principally by
a straightforward application of the laws of New York.” Id. at 201
(internal quotation marks and citation omitted); see also Astoria
Gen. Contracting Corp. v. Office of Comptroller of City of New
York, No. 15-CV-1782, 2016 WL 369237, at *9 (S.D.N.Y. Jan. 27,
2016)
(refusing
applying
Younger
to
find
bad
abstention
faith
to
deny
exception
request
applicable,
to
enjoin
and
§ 220
proceeding over plaintiffs’ objections that the comptroller and
contracting agency conspired to violate their due process rights,
targeted them due to an earlier failed prevailing wage enforcement
investigation, and manufactured employee wage complaints).
24
In this case, the ongoing DOL administrative proceeding
is exclusively focused on underpayments for the Staten Island
Project. (Am. Compl. at ¶ 37.) The inquiry, for this court, is
whether that administrative proceeding — as opposed to the Queens
Hospital Project investigation, which is now closed and never led
to a hearing (id. at ¶¶ 29, 49) — was initiated in bad faith with
a
retaliatory
motive.
There
are
very
few
detailed
factual
allegations in the Amended Complaint about the initiation of the
Staten
Island
Project
investigation.
Plaintiffs
argue,
in
a
conclusory fashion, that the February 2010 withholding notice on
the Staten Island Project “was issued based on purported findings
of wage underpayments made unilaterally by Mr. Padula.” (Id. at
¶ 35.) Plaintiffs also allege that Monahan and others at DASNY
“communicated
regularly
with
Mr.
Padula
regarding
the
investigation on the Staten Island project” and that Monahan and
Padula maliciously contacted an assistant district attorney to
bring criminal charges against plaintiffs for alleged labor law
violations. (Id. at ¶ 33.)
These allegations closely resemble those at issue in
Diamond D. In Diamond D, as here, the DOL’s withholding was alleged
to be baseless. See 282 F.3d at 200. In Diamond D, as in this case,
the plaintiffs alleged that the DOL sought to pressure them into
paying baseless withholdings. See id. In many ways, the facts in
Diamond D favored the plaintiff-contractor more than the facts
25
here. For example, there are no allegations here, unlike in Diamond
D, that the plaintiffs were on the verge of financial insolvency
due to the withholdings. See id. at 196. Further, the assumptions
relied upon by the DOL investigator in Diamond D — who directed
withholdings of $1.4 million, an amount far greater than the amount
withheld here — were patently and facially erroneous. See id. at
194-96
(describing
the
assumptions
as
“inscrutable”).
To
the
extent that plaintiffs argue that their allegations of subjective
malice in
the
DOL’s
initiation
of
the
Staten
Island
Project
investigation serve to distinguish Diamond D, the court concludes
that these allegations are too conclusory and barebones to serve
as the factual predicate for a plausible finding of bad faith.
Therefore, Younger abstention is appropriate to the extent that
plaintiffs seek injunctive relief. Plaintiffs have not shown that
the DOL has “no reasonable expectation of obtaining a favorable
outcome.” Cullen, 18 F.3d at 103.
Principles of abstention are inappropriate, however,
“where the litigant seeks money damages for an alleged violation
of § 1983.” Rivers v. McLeod, 252 F.3d 99, 102 (2d Cir. 2001)
(vacating dismissal of a claim for money damages where district
court had abstained, inter alia, under Younger). In this case,
each of plaintiffs’ causes of action seeks both equitable relief
and damages. (See Am. Compl. at ¶¶ 56, 72, 80, 89, 92.) Because
plaintiffs have sought injunctive relief, which is denied, and
26
monetary damages, the court will proceed to analyze the validity
of their damages claims.
III. Eleventh Amendment Immunity
The state defendants contend that the Eleventh Amendment
bars damages claims against the DOL and the other state defendants
in their official capacities.
The Eleventh Amendment provides:
The judicial power of the United
construed to extend to any suit
commenced or prosecuted against one
by citizens of another state, or by
of any foreign state.
States shall not be
in law or equity,
of the United States
citizens or subjects
U.S. Const. amend. XI. The amendment was interpreted long ago,
despite its language, to extend to suits against a state by its
own citizens. See Hans v. Louisiana, 134 U.S. 1, 10 (1890). The
amendment “provides a state, as well as its agencies and its
officials acting in their official capacities, with protection
from suits in federal court for damages for past wrongs.” Tekkno
Labs., Inc. v. Perales, 933 F.2d 1093, 1097 (2d Cir. 1991); see
also Edelman v. Jordan, 415 U.S. 651, 664 (1974) (“[T]he rule has
evolved
that
a
suit
by
private
parties
seeking
to
impose
a
liability which must be paid from public funds in the state
treasury
is
barred
by
the
Eleventh
Amendment.”
(citation
omitted)).
In this case, plaintiffs do not contend that the DOL or
the other state defendants (in their official capacities) can be
27
liable for damages. Instead, they first argue that the Eleventh
Amendment
does
not
bar
injunctive
relief
against
the
state
defendants. (Pl. Opp’n to DOL at 2-3.) This point, however, is
undisputed by the state defendants. (DOL Reply at 1 (acknowledging
that “the Amendment does not bar injunctive relief”).) Plaintiffs
also argue that the Eleventh Amendment does not bar them from
recouping funds frozen due to the DOL withholding notices, since
those funds are held by DASNY (which is not an arm of the state,
see TADCO Const., 700 F. Supp. 2d at 262 n.2 (collecting cases)).
(Pl. Opp’n to DOL at 3.) The state defendants do not dispute this
point. (DOL Reply at 1-2.)
Plaintiffs
are
essentially
talking
past
the
state
defendants on the Eleventh Amendment issue. Plaintiffs concede
that neither the DOL nor the other state defendants (in their
official capacities) can be held liable for damages for past acts.
Accordingly, the court concludes that sovereign immunity under the
Eleventh Amendment precludes plaintiffs from recovering damages
against the DOL or the other state defendants in their official
capacities.
IV.
Federal Claims
The court next considers plaintiffs’ four federal claims
under § 1983 against the individual state defendants in their
individual capacities as well as the DASNY defendants alleging:
(1) a procedural due process violation; (2) a substantive due
28
process violation; (3) an abuse of process violation; and (4) a
conspiracy. The procedural and substantive due process claims
require that the court first evaluate whether plaintiffs have
alleged a deprivation of a protected property interest sufficient
to support their due process claims. Next, the court will consider
the substance of plaintiffs’ federal claims. 8
A.
Property Interest
The Fourteenth Amendment provides that a State shall not
“deprive any person of life, liberty, or property, without due
process of law.” Section 1983, in turn, provides a federal cause
of action for “the deprivation of any rights, privileges, or
immunities
contend
secured
that
by
the
plaintiffs
Constitution
fail
to
8
allege
and
a
laws.”
Defendants
property
interest
Plaintiffs’ amended complaint repeatedly alleges violations of the
Fifth Amendment and the Fourteenth Amendment. (Am. Compl. at ¶¶ 42, 57,
73, 81.) However, plaintiffs only name state government bodies and
officials in their complaint. No federal government officials appear to
be implicated in this action. Because the Fifth Amendment’s Due Process
Clause constrains only the actions of the federal government, any claims
under that clause must be dismissed. See Dusenbery v. United States, 534
U.S. 161, 167 (2002) (“The Due Process Clause of the Fifth Amendment
prohibits the United States, as the Due Process Clause of the Fourteenth
Amendment prohibits the States, from depriving any person of property
without ‘due process of law.’”); Ambrose v. City of New York, 623 F.
Supp. 2d 454, 466 (S.D.N.Y. 2009) (“Because Plaintiff’s lawsuit does not
allege any deprivation of his rights by the federal government, any due
process claim he has against the City is properly brought under the Due
Process Clause of the Fourteenth Amendment, not under that of the Fifth
Amendment.”); Mitchell v. Home, 377 F. Supp. 2d 361, 372-73 (S.D.N.Y.
2005) (“The Fifth Amendment’s Due Process Clause protects citizens
against only federal government actors, not State officials. Any due
process
rights
plaintiff
enjoys
as
against
state
government
officials . . . arise solely from the Fourteenth Amendment due process
clause.” (citations omitted)).
29
sufficient to state a due process claim. (DOL Mem. at 21-22; DASNY
Mem. at 13-15; DASNY Reply at 2-3.)
“Governmental action may be challenged as a violation of
due process only when it may be shown that it deprives a litigant
of a property or a liberty interest.” Gen. Elec. Co. v. New York
State Dep’t of Labor, 936 F.2d 1448, 1453 (2d Cir. 1991); see also
Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 569 (1972)
(“The requirements of procedural due process apply only to the
deprivation of interests encompassed by the Fourteenth Amendment’s
protection of liberty and property.”); Narumanchi v. Bd. of Trs.
of Conn. State Univ., 850 F.2d 70, 72 (2d Cir. 1988) (“The
threshold issue is always whether the plaintiff has a property or
liberty
interest
protected
by
the
Constitution.”).
Because
plaintiffs have argued only a violation of a property interest and
not a liberty interest (see Pl. Opp’n to DOL at 17-18; Pl. Opp’n
to DASNY at 19-20), 9 the court’s analysis focuses exclusively on
the nature of the purported property interest.
The court must address plaintiffs’ argument that they
need not possess a protected property or liberty interest to pursue
a substantive due process claim. (See Pl. Opp’n to DOL at 17
9
Plaintiffs did, however, unsuccessfully assert a liberty interest in
earlier, related litigation. See TADCO Const., 700 F. Supp. 2d at 267
(“TADCO has failed to adequately allege the stigma required to establish
a stigma-plus liberty interest deserving of due process protection.”).
As noted, they appropriately have not renewed their assertion of a claim
for deprivation of a liberty interest here.
30
(“[P]laintiffs’ claim may be construed as a generalized claim for
violation of substantive due process which is not dependent on the
existence of any property interest.” (internal quotation marks and
citation omitted)); Pl. Opp’n to DASNY at 17 (same).) Plaintiffs
inexplicably rely on language in Kaluczky v. City of White Plains,
which clarified that where a § 1983 plaintiff alleges a “cause of
action protected by an explicit textual source of the Constitution,
that Amendment, not the more generalized notion of substantive due
process, must be the guide for analyzing that claim.” 57 F.3d 202,
211 (2d Cir. 1995) (internal quotation marks and citation omitted).
Thus, Kaluczky stands for the uncontroversial proposition that a
plaintiff cannot rely on Fifth or Fourteenth Amendment substantive
due process protection when her claim, in actuality, derives from
a different specific constitutional provision or amendment. See
Albright
v.
Oliver,
510
U.S.
266,
273-75
(1994)
(rejecting
petitioner’s attempt to recharacterize a claim to be free from
prosecution without probable cause under the Fourth Amendment as
a substantive due process claim).
Kaluczky in no way suggests that a plaintiff need not
allege
a
protected
substantive
due
property
process
or
claim.
liberty
Courts
interest
have
to
pursue
consistently
a
held
otherwise. See, e.g., Knox v. Town of Southeast, 599 F. App’x 411,
413 (2d Cir. 2015) (“To establish a substantive due process claim,
a plaintiff must demonstrate a deprivation of a protected property
31
interest . . . .”); Goodspeed Airport v. E. Haddam Land Trust,
Inc., 166 F. App’x 506, 508 (2d Cir. 2006) (“To prevail on a
procedural or substantive due process claim, the plaintiff must
first identify a liberty or property interest protected by the
Constitution of which the state deprived him or her.” (citation
omitted)). 10
The court turns next to the nature of the purported
property interest at stake here. In order to maintain a protected
property interest in a benefit, “a person clearly must have more
than an abstract need or desire for it. He must have more than a
unilateral expectation of it. He must, instead, have a legitimate
10
There is one further threshold issue. Defendants argue that issue
preclusion prevents plaintiffs from “relitigating whether TADCO has a
constitutionally protected property interest in payment” on the Staten
Island Project. (DASNY Mem. at 14 & n.2; see also DOL Mem. at 22.) In
plaintiffs’ earlier federal action, Judge Trager concluded that “TADCO’s
‘property interest’ is in reality a breach of contract claim against
DASNY for failure to pay it money owed under the contract, which should
be adjudicated as such under relevant New York law.” TADCO Const., 700
F. Supp. 2d at 264. Issue preclusion — or collateral estoppel — requires,
however, that “the issues in both proceedings be the same.” Levy v.
Kosher Overseers Ass’n of Am., Inc., 104 F.3d 38, 43 (2d Cir. 1997)
(internal quotation marks and citation omitted). In the earlier action,
the issue was whether TADCO had a “property interest in its right to
timely payment, which it claims DASNY violated by its delay in processing
TADCO’s charge orders and by its failure to pay for work performed by
TADCO.” 700 F. Supp. 2d at 262. The issues in this case are somewhat
more complicated. First, a state court judgment has issued since Judge
Trager’s decision that may have nudged plaintiffs’ entitlement — at least
with respect to the Queens Hospital Project funds at issue in the
judgment — over the protected property interest threshold. (See Ha Decl.,
Ex. J.) Second, and perhaps more fundamentally, the failure to pay
plaintiffs in this case is related not to a dispute about contractual
performance, as in the prior proceeding, see TADCO Const., 700 F. Supp.
2d at 259, 262-64, but instead to DOL withholdings based on purported
prevailing wage violations. The issues in this action are therefore
sufficiently distinct to prevent the application of issue preclusion.
32
claim of entitlement to it.” Roth, 408 U.S. at 577. Property
interests derive not from the Constitution, but from “existing
rules or understandings that stem from an independent source such
as state law-rules or understandings that secure certain benefits
and that support claims of entitlement to those benefits.” Gen.
Elec. Co., 936 F.2d at 1453 (internal quotation marks and citation
omitted).
Although
created
an
by
the
“underlying
independent
source
substantive
such
as
state
interest
law,
is
federal
constitutional law determines whether that interest rises to the
level of a legitimate claim of entitlement protected by the Due
Process Clause.” Town of Castle Rock, Colo. v. Gonzales, 545 U.S.
748,
757
(2005)
(internal
quotation
marks,
alterations,
and
citation omitted).
Plaintiffs contend that they have a right to timely
payment for work performed under a contract with a state agency.
(Pl. Opp’n to DOL at 18-19 (citing Gen. Elec., 936 F.2d at 1453);
Pl. Opp’n to DASNY at 19–20 (same).) DASNY argues that plaintiffs
“must show that their rights to the funds in question are superior
to [those] of the affected employees on whose behalf DOL is
conducting its Labor Law investigation.” (DASNY Mem. at 15.) DOL’s
argument is substantially similar. DOL maintains that plaintiffs
have no protected property interest unless and until the DOL
“finally determines [that] the contractor has paid the required
wage.” (DOL Mem. at 21.)
33
This
dispute
plays
out
against
the
backdrop
of
a
considerable quantity of caselaw favoring a finding that the
plaintiffs have at least some type of protected property interest.
In General Electric Co., for example, the New York DOL ordered the
Long Island Railroad to withhold funds that would otherwise have
been due to General Electric (a private contractor) for its work
servicing and repairing electric transformers. See 936 F.2d at
1451. The DOL ordered the withholding after concluding that General
Electric had underpaid its workers. Id. General Electric brought
an action arguing that its due process rights were violated because
the prevailing wage law (N.Y. Lab. Law § 220) unconstitutionally
delegated authority to unions to set prevailing wage rates. Id. at
1451-52. In evaluating whether General Electric could sustain its
due process claim, the court explained:
[i]t is well established that a contractor has a right
to timely payment for work it performs under a contract
with a state agency, and that such right is a property
interest protected by the due process clause. Here GE’s
property interest is implicit in § 220 itself, which
both creates an entitlement to payment of the full
contract price, except if a contractor fails to pay the
determined prevailing rates, § 220(8), and provides for
a hearing to determine if cause exists to deprive a
contractor of the full contract price. Thus, state law
supports GE’s claim of entitlement.
Id. at 1453 (citations omitted).
Similarly, in Signet Construction Corp. v. Borg, 775
F.2d 486, 487-88 (2d Cir. 1985), a New York City Board of Education
contractor failed to perform certain work in accordance with
34
various contracts it had been awarded. The board determined that
the contractor was in default, and withheld payments that the
contractor believed were due for work performed. See id. at 488–
89. The contractor then brought a § 1983 action claiming that the
board, “by wrongfully withholding money due [to the contractor]
for work performed, deprived it of the cash flow needed to complete
performance of its contracts” with the board and drove it out of
business. Id. at 488. Although the Signet court concluded that the
contractor had not been denied due process, the court determined
that the contractor maintained a protected property interest in
payment on the contract. See id. at 489 (“It is not disputed by
the parties that a contractor’s right to timely payment for work
done under its contract with a state agency constitutes a property
interest, deprivation of which by the Board without procedural due
process would violate its Fourteenth Amendment rights.” (citations
omitted)).
However,
the
Second
Circuit
later
characterized
the
above-quoted statement from Signet as dicta, and held that “a
public contractor has no property interest, grounded in New York
law, to prompt payment pending an investigation when the result of
that very investigation will determine whether the City tenders
payment or declares the contract void, at least where the delay
does not exceed the reasonable delay contemplated by New York law.”
S & D Maint. Co. v. Goldin, 844 F.2d 962, 969 (2d Cir. 1988); see
35
also Christ Gatzonis Elec. Contractor, Inc. v. New York City Sch.
Const. Auth., 23 F.3d 636, 641 (2d Cir. 1994) (same).
A subsequent panel sought to square these apparently
irreconcilable decisions. See Terminate Control Corp. v. Horowitz,
28 F.3d 1335, 1351 (2d Cir. 1994). The Terminate Control court
drew a distinction between a right to immediate payment pending an
administrative
determination
that
would
resolve
a
contractual
entitlement issue and a right “in ultimately being paid for work
properly performed” under a state contract. Id. at 1351-52. A
contractor lacks the former right, but does possess the latter
one.
Id.
The
Terminate
Control
court
—
addressing
a
private
contractor-plaintiff’s claim of a property right in contractual
payment pending an administrative determination about whether the
contractor had defaulted — assumed the contractor’s right in
ultimately being paid for work properly performed and went on to
analyze
whether
the
plaintiff’s
due
process
rights
had
been
violated. Id. at 1351-52 & n.9. The court concluded that there had
been no due process violation. Id. at 1352. The distinction drawn
in Terminate Control provides some guidance in the instant case.
Plaintiffs’
allegations
about
the
nature
of
their
protected property interest are unclear. In their briefing, they
refer to the June 2012 state court judgment as the source of their
property right. (Pl. Opp’n to DOL at 18 (“There can be no question
that plaintiffs have a protected property interest in collecting
36
on this judgment.”); Pl. Opp’n to DASNY at 19 (same).) If this
were the sole source of their substantive property right, due
process protection would extend no further than the approximately
$57,000 set aside by DASNY as a result of that judgment. (See Ha
Decl., Ex. H.) Plaintiffs’ complaint, however, proposes a broader
property interest. With respect to their procedural due process
claim,
plaintiffs
allege
that
they
have
a
“constitutionally-
protected property interest” both in “receiving timely payment on
the
TADCO
judgment”
as
well
as
in
“receiving
timely
payment
for . . . work on the Queens Hospital project, the Staten Island
project, and other DASNY projects.” (Am. Compl. at ¶¶ 58-59.)
Plaintiffs do not identify a specific property interest in their
substantive due process cause of action. (See Am. Compl. at ¶¶ 42–
56.) However, the court will assume for purposes of this decision
that the nature of the purported interest is the same for each of
the due process claims. 11
Although
the
Second
Circuit’s
decisions
have
been
somewhat unclear about the nature of a contractor’s protected
property interest in payment, this court follows the reasoning of
the Terminate Control court and finds that plaintiffs likely do
maintain some protected property interest in “ultimately being
11
See DOL Mem. at 21 n.27 (“[T]he constitutional claims alleged depend
on the existence of a protected interest, which here can only be the
interest in payment.”)
37
paid for work properly performed” under its contract with DASNY,
but not a right to prompt payment or an advance hearing. See 28
F.3d at 1352 (finding a protected interest in payment for work
performed and analyzing whether due process was satisfied by
available
state-law
essentially
the
same
remedies).
position
Plaintiffs
as
the
here
contractors
stand
in
in
General
Electric, where the Second Circuit — relying on Signet, 775 F.2d
at 489 — held that a contractor has a protected property interest
in “timely payment for work it performs under a contract with a
state agency.” 936 F.2d at 1453. Both the contractor-plaintiff in
General Electric and the plaintiffs here claimed that the DOL
improperly
withheld
money
for
purported
violations
of
the
prevailing wage law. Id. at 1451. In General Electric, as in the
instant case, the validity of that withholding was in question.
See id. at 1456-59 (permitting General Electric to pursue its claim
that the DOL had unconstitutionally delegated authority to set the
prevailing wage rates). The court cannot find that plaintiffs lack
any protected property interest without running afoul of General
Electric.
Both defendants cite cases on the issue of whether
plaintiffs maintain a protected property interest that either
assume such an interest or recognize one directly. In Lujan v. G
& G Fire Sprinklers Inc., for example, the Supreme Court — in
dismissing a due process claim of a public contractor whose payment
38
was withheld pursuant to a state prevailing wage law similar to
the state law at issue in this case — assumed without deciding
that the contractor maintained “a property interest . . . in its
claim for payment under its contracts.” 532 U.S. 189, 195 (2001)
(citation omitted). Similarly, in Leed Indus. Inc. v. New York
State Dep’t of Labor, the New York DOL conceded that a roofing
company — which had performed work for several school districts,
and had money withheld by the DOL due to purported prevailing wage
violations — had a property interest in “ultimately getting paid
for work properly performed.” No. 09-CV-9456, 2010 WL 882992, at
*1, *3 (S.D.N.Y. Mar. 8, 2010).
Having concluded that the plaintiffs likely maintain
some
protected
property
interest,
the
court
turns
next
to
plaintiffs’ procedural and then substantive due process claims.
B.
Procedural Due Process Under § 1983
The gravamen of plaintiffs’ procedural due process claim
is that the post-termination hearing to address withholdings from
the Staten Island Project was not timely. The opportunity to be
heard is a fundamental component of due process, see Armstrong v.
Manzo, 380 U.S. 545, 552 (1965), and that opportunity must “be
granted at a meaningful time.” Id.; see also Cleveland Bd. Of Educ.
V. Loudermill, 470 U.S. 532, 547 (1985) (same); Barry v. Barchi,
443 U.S. 55, 66 (1979) (same). “At some point, a delay in the post-
39
termination
hearing
would
become
a
constitutional
violation.”
Loudermill, 470 U.S. at 547.
The Supreme Court has drawn no firm line delineating
when a hearing is so belated that it violates an individual’s due
process rights. For example, the Loudermill Court found no due
process violation arising from a school security guard-plaintiff’s
nine-month wait for a post-termination administrative decision
upholding
his
dismissal
for
dishonesty
in
filling
out
a
job
application. See 470 U.S. at 535-37, 546-47. The court noted that
the
delay
“stemmed
in
part
from
the
thoroughness
of
the
procedures.” Id. at 547. In Barry, by contrast, a horse trainer’s
license was suspended for 15 days pursuant to regulations dictating
suspension where a postrace test of a race horse revealed the
presence of drugs. See 443 U.S. 57-61. The statute at issue
specified no time for a post-termination hearing. Id. at 61, 66.
The court determined that trainers “subject to relatively brief
suspensions would have no opportunity to put the State to its proof
until they have suffered the full penalty imposed. . . . Once
suspension has been imposed, the trainer’s interest in a speedy
resolution of the controversy becomes paramount.” Id. at 66. The
absence of a prompt post-suspension hearing, the court held,
violated the trainer’s due process rights. Id.
At the outset, the court must determine the precise
period that plaintiffs waited for a hearing. Plaintiffs repeatedly
40
allege that they suffered a seven-year delay before a hearing was
conducted on the Staten Island Project withholdings. (Pl. Opp’n to
DOL at 20; Pl. Opp’n to DASNY at 21; Am. Compl. at ¶¶ 37, 39, 66–
68.) Plaintiffs appear to base the seven-year figure on the DOL’s
issuance of a records withholding notice in February 2007 for work
associated with the Queens Hospital Project. Plaintiffs complain
that
they
were
never
accorded
a
hearing
for
that
records
withholding. (E.g., Pl. Opp’n to DOL at 21 (“[T]he procedural due
process claim encompasses not only the delay in conducting the
hearing in connection with the Staten Island project but also the
failure to conduct a hearing in connection with the Queens Hospital
Project.”); Am. Compl. at ¶ 66 (complaining that delay in hearing
for the records withholding violated due process).)
Although no hearing was apparently ever conducted on the
DOL records withholding, which was not released until May 2013
(Am. Compl. at ¶¶ 27, 29; Ha Decl., Ex. I), the statutory scheme
does not contemplate a hearing for a records withholding. Compare
§ 220(7)-(8)
(providing
a
hearing
to
determine
“whether
the
contractor or a subcontractor has paid the prevailing rate of wages
and
prevailing
practices
for
supplements”),
with
§
220(3-
a)(a)(iii)-(iv), (c) (providing payroll record-keeping obligations
and requiring withholding, with no mention of a hearing, where
contractor fails to respond to a records request). This is likely
because state contractors are obligated at all times to keep
41
payroll records and turn them over whenever they are requested by
a fiscal officer. See § 220(3-a)(a)(iii), (c). Plaintiffs do not,
anywhere in their Amended Complaint or motion papers, indicate
that they turned over the requested records. Had they done so, the
DOL would have been required to release the withholding. See
§ 220(3-a)(c) (“Said amount withheld shall be immediately released
upon receipt by the department of jurisdiction of a notice from
the fiscal officer indicating that the request for records had
been satisfied.” (emphasis added)). The court, therefore, cannot
find — for purposes of evaluating the timeliness of the hearing —
that the clock started ticking when the DOL issued the records
withholding notices in February 2007.
Instead, any entitlement to a hearing for the Staten
Island Project prevailing wage withholdings — which are at the
core of the procedural due process claim asserted by plaintiffs
(see Am. Compl. at ¶¶ 67-68), and are the basis for all remaining
withheld funds at issue in this litigation 12 — could not have arisen
before
February
2010,
when
the
DOL
issued
its
first
wage
underpayment withholding for the Staten Island Project. 13 Thus, for
12
The cross-withholding on the Queens Hospital Project is dependent on
the validity of the underpayment withholding on the Staten Island
Project. (See Ha Decl., Ex. L (describing May 2013 withholding as a
“cross-withholding” to address underpayment on the Staten Island
Project); § 200-b(2)(a)(1) (providing statutory basis for crosswithholding).)
13 Plaintiffs appear alternatively to propose that their entitlement to
a hearing arose when the DOL’s prevailing wage investigation began,
allegedly in the vicinity of January 2007. (Am. Compl. at ¶ 22.) The
42
purposes of evaluating the timeliness of the hearing, the court
concludes that any entitlement to a hearing on the Staten Island
Project withholdings arose in February 2010. The hearing on the
Staten Island Project withholdings was commenced in April 2014 and
was
adjourned
to
September
2014.
(Am.
Compl.
at
¶ 37.)
The
question, then, is whether an approximately four-year delay in a
hearing for a prevailing wage withholding violates due process.
Plaintiffs’
arguments
about
delay
in
this
case
run
headlong into at least three significant barriers, as discussed
below. First, there is a total absence of caselaw finding a due
process
violation
withholding
for
hearing.
the
delay
Despite
a
of
a
fairly
§ 220
prevailing
extensive
wage
universe
of
caselaw addressing § 220, plaintiffs have not cited, and the court
has not uncovered, any precedent — either in the New York state
courts or the New York federal courts — finding a due process
violation based on a delay of a § 220 hearing. Multiple cases,
instead, have held or strongly implied that similar delays do not
run afoul of due process. Second, the Supreme Court has held that
a multi-year delay in adjudicating a prevailing wage withholding
is not constitutionally problematic. Finally, the Second Circuit
has consistently held that the availability of state remedies —
problem with this theory is that it would indicate that even a
preliminary prevailing wage inquiry or investigation triggers a hearing
right, before a decision is made with respect to whether a violation
occurred or a withholding notice is issued. Such a result would be
unworkable, unreasonable, and illogical.
43
from mandamus relief to an Article 78 proceeding — satisfies due
process in the context of a public contract dispute. The court
will address these obstacles to plaintiffs’ procedural due process
claim in turn.
1.
No Precedent Finding Due Process Violation From
Delay in § 220 Proceeding
First, as noted above, plaintiffs do not cite to any
case finding a due process violation rooted in the delay of a
hearing to address a prevailing wage withholding under § 220. New
York courts have instead found that such delays in the context of
§ 220 hearings are not inherently problematic. See Giant Supply
Corp. v. City of New York, 670 N.Y.S.2d 29 (N.Y. App. Div. 1998)
(finding that delay of over five years in conducting § 220(8)
hearing did not prejudice a contractor in light of the employees’
countervailing interest); M. Passucci Gen. Const. Co. v. Hudacs,
633 N.Y.S.2d 903, 904-05 (N.Y. App. Div. 1995) (“We reject the
contention of petitioner that the three-year delay in conducting
the [§ 220(8)] hearing deprived it of due process.”); see also
Pascazi v. Gardner, 966 N.Y.S.2d 528, 531 (N.Y. App. Div. 2013)
(refusing
to
find
delay
in
conducting
§ 220(8)
hearing
unreasonable where contractor-petitioner failed to produce certain
payroll records and commenced ancillary proceedings); D & D Mason
Contractors, Inc. v. Smith, 917 N.Y.S.2d 283, 285 (N.Y. App. Div.
2011) (holding, in the context of § 220(8) hearing, that “[l]apse
44
of time in rendering an administrative determination, standing
alone, does not constitute prejudice as a matter of law”).
While the absence of any authority finding a due process
violation for a § 220 delay does not dispose of this claim, it
does expose the novelty of plaintiffs’ argument. Plaintiffs here
have pointed to no unique, substantial prejudice that suffices to
distinguish the aforementioned authority. In their briefing, in
fact, plaintiffs have entirely failed to grapple with this adverse
caselaw.
Plaintiffs point to provisions in the New York labor law
indicating that labor investigations should be conducted within
six months and that hearings are to be “expeditiously conducted.”
(Am. Compl. at ¶ 39 (citing § 220(7), (8).) Section 220(7) of the
labor code states that the DOL:
shall make either an order, determination or any other
disposition, including but not limited to an agreed upon
settlement and/or stipulation, within six months from
the date of filing of [a] verified complaint, and where
a compliance investigation is made without the filing of
a verified complaint, within six months from the date a
compliance investigation is initiated by [the DOL].
Section 220(8) contains a complementary, albeit more malleable,
provision requiring prevailing wage withholding hearings to be
conducted “expeditiously.”
As
plaintiffs
must
surely
realize,
since
it
was
discussed in the New York state court decision accompanying the
June 2012 judgment quoted in their complaint (see Am. Compl. at
45
¶ 28; see also id., Ex. A; Ha. Decl., Ex. H), the specific time
limit in § 220(7) is “directory,” not “mandatory.” Giant Supply,
670 N.Y.S.2d at 29; Matter of Moveway Transfer & Storage, Inc. v
Thompson, 2008 N.Y. Misc. LEXIS 10764, at *22-23 (N.Y. Sup. Ct.
Dec. 19, 2008) (“[T]he limitations period in Labor Law § 220(7) is
directory
rather
than
mandatory.
Therefore,
the
Comptroller’s
failure to complete the investigation within six months would not
have been fatal to the investigation.” (citation omitted)). Even
if the time limits were mandatory, not every state law violation
translates into a due process claim. See Screws v. United States,
325
U.S.
91,
109
(1945)
(“Violation
of
local
law
does
not
necessarily mean that federal rights have been invaded. . . . It
is only state action of a particular character that is prohibited
by the Fourteenth Amendment . . . .” (internal quotation marks and
citation omitted)); Pollnow v. Glennon, 757 F.2d 496, 501 (2d Cir.
1985) (“Clearly, a violation of state law is not cognizable under
§ 1983.” (citation omitted)). Although the time limits in § 220
are not irrelevant to the due process calculus, they do not set up
federal due process boundaries.
2.
Lujan v. G & G Fire Sprinklers Inc.
The second barrier to plaintiffs’ relief is the Supreme
Court’s decision in Lujan v. G & G Fire Sprinklers Inc., which
refused relief to plaintiffs on largely similar facts. See
532
U.S. at 191, 197. Lujan, which involved a California prevailing
46
wage statutory scheme strikingly similar to New York’s, 14 see id.
at 191-92, is in many ways determinative of plaintiffs’ delay
claim. California’s prevailing wage law at the time, unlike § 220
in this case, provided no hearing either before or after a payment
withholding.
Id.
at
191.
Instead,
a
contractor’s
“exclusive
remedy” was a suit “on the contract for alleged breach thereof in
not making . . . payment.” Id. at 192. In Lujan, the California
Division
compliance
of
Labor
with
the
Standards
law,
Enforcement,
determined
that
which
a
supervised
public
works
subcontractor had failed to pay the prevailing wage on three public
works projects. Id. at 191, 193. The subcontractor’s payments on
the
project
were
thereafter
withheld,
after
which
the
subcontractor sued a group of public bodies and officials. Id. at
191-93. The subcontractor claimed that the complete absence of any
hearing, either before or after the withholding, violated due
process. Id. at 193.
The Supreme Court unanimously disagreed. Id. at 191,
199. Assuming that the subcontractor had a property interest “in
its claim for payment under its contracts,” the Court concluded
14
As of 2010, at least 31 states and the District of Columbia maintain
prevailing wage laws, though they vary greatly in their protections. See
George C. Leef, Prevailing Wage Laws: Public Interest or Special Interest
Legislation, 30 Cato Journal 1, 139-40 (2010); see also Wage and Hour
Division, Department of Labor, Dollar Threshold Amount for Contract
Coverage Under State Prevailing Wage Laws (2016), available at
http://www.dol.gov/whd/state/dollar.htm (indicating that 32 states have
prevailing wage laws). The federal government also has a prevailing wage
statute: the Davis-Bacon Act. See 40 U.S.C. § 3141 et seq.
47
that whatever property right the subcontractor had could “be fully
protected by an ordinary breach-of-contract suit” like the one
offered as the exclusive remedy by the California prevailing wage
law. Id. at 195-96. Significantly, the Court was unpersuaded by
the subcontractor’s argument that the awarding body under the
contract might retain “the wages and penalties pending the outcome
of the suit, which may last several years.” Id. at 197 (emphasis
added) (internal quotation marks and citation omitted). A “lawsuit
of that duration,” the Court held,
while undoubtedly something of a hardship, cannot be
said to deprive [the subcontractor] of its claim for
payment under the contract. Lawsuits are not known for
expeditiously resolving claims, and the standard
practice in breach-of-contract suits is to award
damages, if appropriate, only at the conclusion of the
case.
Id.
Essentially,
the
Lujan
Court
found
no
due
process
violation where a breach-of-contract suit against the contracting
agency that might “last several years” constituted the sole remedy
available to a contractor complaining of an invalid prevailing
wage withholding. See id. at 197-99. An administrative hearing for
a prevailing wage withholding, the Court determined, is not even
a constitutional requirement. A breach-of-contract suit serving as
the only avenue to relief was sufficient to satisfy due process.
In this case, plaintiffs do not dispute the availability
of a breach-of-contract suit: it was through such a suit, one of
48
four similar ones filed in state court, that they obtained a
favorable New York state court judgment in June 2012. (Am. Compl.,
Ex. A.) Under Lujan, the availability of a contract-based suit
precludes a due process claim grounded in a purportedly delayed
hearing. Finding a procedural due process violation for the Staten
Island Project hearing — which is already underway (Am. Compl. at
¶ 37) — would require the court to depart from Lujan.
Plaintiffs’ attempt to distinguish Lujan is unavailing.
Plaintiffs reason that California’s prevailing wage law “did not
provide for any post-deprivation hearing and thus, unlike here,
there was no issue with any excessive delay in conducting a postdeprivation hearing.” (Pl. Opp’n to DOL at 22.) In other words,
plaintiffs claim that delaying a hearing inflicts a greater due
process violation than offering no hearing at all. Such an argument
must be rejected. 15
15
Lujan also forecloses plaintiffs’ argument that the withholding
constituted a “quasi-criminal” penalty justifying a speedy resolution
of the DOL proceedings against them. (Pl. Opp’n to DOL at 20-21; Pl.
Opp’n to DASNY at 20-21; Am. Compl. at ¶ 40.) Lujan dealt with a
withholding no more punitive than the one at issue here. See Lujan, 532
U.S. at 191 (“At the time relevant here, if workers were not paid the
prevailing wage, the contractor was required to pay each worker the
difference between the prevailing wage and the wages paid, in addition
to forfeiting a penalty to the State.” (emphasis added)); id. at 193
(noting that the disputed California labor body withholding constituted
both “wages and penalties forfeited due to [the subcontractor’s]
violations”). The Lujan court found no due process violation where
California law did not even permit a hearing to address withholdings,
some of which constituted penalties similar to the ones at issue in this
case. This court cannot, therefore, conclude that the plaintiffs in the
instant case are not only entitled to such a hearing on the basis of the
punitive nature of the withholding, but entitled to a prompt one. By the
same token, Lujan forecloses plaintiffs’ argument that they were entitled
49
3.
Availability of State Remedies
Finally, the Second Circuit has consistently looked to
the full range of remedies available under state law to evaluate
whether a plaintiff was denied due process because of a delay. See
Orange Lake Assocs., Inc. v. Kirkpatrick, 21 F.3d 1214, 1221, 1224
(2d Cir. 1994) (stating that zoning board’s delay did not violate
due process because, inter alia, Article 78 procedure constituted
adequate process); see also C.C.S.com USA, Inc. v. Gerhauser, 518
F. App’x 1, 3-4 (2d Cir. 2013) (finding that plaintiff who “never
inquired into the status of its application or pursued an Article
78 hearing to compel” a decision from a local entity could not
demonstrate denial of due process based on delay); Alfaro Motors,
Inc. v. Ward, 814 F.2d 883, 888 (2d Cir. 1987) (holding that
“adequate state procedures” such as a New York State Article 78
proceeding,
were
“sufficient
to
protect
[plaintiffs’]
claimed
property interest”).
In Diamond D, 282 F.3d at 194-97, the Second Circuit
evaluated the claim of a New York road construction contractor who
had sued the DOL and government officials, alleging due process
violations arising from a prevailing wage withholding claimed to
be retaliatory and improper. Although the court’s ruling reversed
to a hearing for the February 2007 records withholding. Where there is
no hearing right for a direct prevailing wage withholding, there is no
basis to find that a withholding based on a record-keeping requirement
designed to ensure compliance with the prevailing wage law would
establish a hearing entitlement.
50
a district court’s injunction on Younger abstention grounds, the
court discussed the contractor’s arguments about a delayed DOL
hearing in detail:
It is significant that to the extent that the DOL was
dragging its feet, [the contractor] was free to file a
mandamus proceeding in the Appellate Division to compel
the DOL to provide expeditious post-deprivation review
as required by the prevailing wage law. Indeed, the
district court specifically noted that, ‘[j]udicial
review was available because [the contractor] could have
gone to the State courts at any time during the pendency
of the DOL investigation and sought a writ of
mandamus . . . .’ Again, where such state remedies are
available, a federal court should assume that state
procedures will afford an adequate remedy, in the
absence of unambiguous authority to the contrary.
Id. at 202 (internal quotation marks and citations omitted).
In this case, plaintiffs do not dispute the availability
of mandamus proceedings to compel a DOL investigation. Nor do they
allege that they brought such a petition. Plaintiffs respond that
the court should not “countenance the defendants’ attempt to shift
this burden to plaintiffs and blame plaintiffs for their own
failures. It should not be a viable defense to a constitutional
due process claim that the person whose rights were violated did
not proactively and at his own expense file an a priori lawsuit to
ask a court to tell the state agency that violated his rights to
not do so.” (Pl. Opp’n to DASNY at 23.) Although the court is
sympathetic
to
plaintiffs’
argument,
the
Second
Circuit,
as
discussed above, has consistently determined that the availability
of mandamus relief and Article 78 proceedings counsel against the
51
finding of a due process violation. See Rivera-Powell v. New York
City Bd. Of Elections, 470 F.3d 458, 467 n.9 (2d. Cir. 2006)
(“Where a state law remedy gives a party a meaningful opportunity
to challenge the state’s action, he is not deprived of due process
simply because he failed to avail himself of the opportunity.”
(internal quotation marks, citation, and alteration omitted)); New
York State Nat. Org. for Women v. Pataki, 261 F.3d 156, 168-69 (2d
Cir. 2001) (noting “the availability of Article 78 procedures,
which can be invoked before actual prejudice arises”); Gerhauser,
518 F. App’x at 3-4. Further, the Second Circuit has effectively
said as much in the very context at issue here: a delayed § 220
hearing concerning a prevailing wage withholding. See Diamond D,
282 F.3d at 202 (noting that a public contractor complaining of
delayed § 220 hearing was “free to file a mandamus proceeding” to
compel the hearing).
The DOL administrative process was commenced and remains
ongoing. (Am. Compl. at ¶ 37; see also ECF No. 85.) When it is
concluded, plaintiffs will be free to challenge the decision in an
Article 78 proceeding. See § 220(8) (“[A]ny party aggrieved [by
the final administrative order] may commence a proceeding for the
review thereof pursuant to article seventy-eight of the civil
practice
law . . . .”);
§ 220-b(2)(e);
Astoria
Gen.,
2016
WL
369237, at *8 (“Pursuant to §§ 220 and 220–b, an Article 78
52
proceeding constitutes an aggrieved party’s method of reviewing [a
DOL] order . . . .”).
In
violation
light
based
of
on
the
the
precedent
delay
of
a
finding
§ 220
no
due
process
in
similar
hearing
circumstances; the Lujan Court’s affirmance of a prevailing wage
law that permitted no administrative hearing upon a withholding;
and the availability of state remedies, the court concludes that
plaintiffs’ right to procedural due process with respect to the
timing of the Staten Island Project hearing has been satisfied in
this case.
4.
Bias
Although the delayed Staten Island Project withholding
hearing is at the center of plaintiffs’ procedural due process
claim, the Amended Complaint appears to allege a claim of bias on
the
part
of
procedural
the
due
administrative
process.
See
decisionmaker
Martin
H.
Redish
that
&
sounds
in
Lawrence
C.
Marshall, Adjudicatory Independence and the Values of Procedural
Due Process, 95 Yale L.J. 455, 477 (1986) (“[T]he use of an
‘independent’ adjudicator is a sine qua non of procedural due
process.”).
First,
the
Amended
Complaint
alleges
in
conclusory
language that, because of the “illicit arrangement” between DASNY
and DOL,
53
the hearing being conducted by DOL against TADCO and Mr.
DeMartino is a mere sham. This illicit arrangement and
DASNY’s active tampering necessarily tainted the
entirety of the proceedings. From the inception of the
investigation to the hearing, from the investigator Mr.
Padula to the hearing officer Mr. Scott, the entire DOL
process is biased against and predisposed to find TADCO
and Mr. DeMartino guilty of the charges against them.
(Am. Compl. at ¶ 78; see also id. at ¶ 38 (containing practically
analogous allegations).) Plaintiffs do not directly argue in their
briefing that the hearing officer was biased, and similarly do not
cite to any facts or legal authority to support this claim.
Aside
from
the
statement
above,
the
only
other
substantive mention of Scott in the Amended Complaint identifies
him as the hearing officer handling the adjudication of the Staten
Island Project withholdings. (Am. Compl. at ¶ 37.) Plaintiffs
allege no other facts implicating Scott in the purported conspiracy
between DASNY and DOL. There is no allegation of a pecuniary
interest in the outcome or a personal animosity toward plaintiffs
that would deprive Scott of the presumption of impartiality. See
Withrow v. Larkin, 421 U.S. 35, 47 (1975) (“The contention that
the
combination
necessarily
of
creates
investigative
an
and
adjudicative
unconstitutional
risk
of
functions
bias
in
administrative adjudication has a much more difficult burden of
persuasion to carry. It must overcome a presumption of honesty and
integrity in those serving as adjudicators . . . .”). Conclusory
allegations
of
bias
like
those
54
at
issue
in
the
above-quoted
allegations cannot survive a motion to dismiss. See Iqbal, 556
U.S. at 678 (“A pleading that offers labels and conclusions or a
formulaic recitation of the elements of a cause of action will not
do.” (internal quotation marks and citation omitted)). 16 For the
foregoing
reasons,
defendants’
motions
to
dismiss
plaintiffs’
procedural due process claims are granted.
C.
Substantive Due Process Under § 1983
Plaintiffs next claim a violation of their substantive
due process rights. The Due Process Clause of the Fourteenth
Amendment has not been limited to ensuring adequate procedures,
but has instead been read to “cover a substantive sphere as well,
barring certain government actions regardless of the fairness of
the procedures used to implement them.” Cnty. of Sacramento v.
Lewis, 523 U.S. 833, 840 (1998) (internal quotation marks and
citations omitted); Harrah Indep. Sch. Dist. v. Martin, 440 U.S.
194, 197 (1979) (“[T]he Due Process Clause of the Fourteenth
Amendment not only accords procedural safeguards to protected
interests, but likewise protects substantive aspects of liberty
16
Further, allegations of bias or impropriety in state administrative
proceedings are “properly brought in an Article 78 proceeding and not
in federal court.” Leary v. Civil Serv. Emps. Ass’n, No. 11-CV-716, 2012
WL 1622611, at *8 (S.D.N.Y. May 9, 2012), aff’d sub nom. Leary v. Civil
Serv. Empls. Ass’n Region 3, 516 F. App’x 42 (2d Cir. 2013); see also
Verri v. Nanna, 20 F.Supp.2d 616, 623 (S.D.N.Y. 1998) (holding that due
process claim premised on bias failed because “plaintiff could have
assured that he had not been pre-judged nor terminated for inappropriate
reasons” by seeking “timely, independent review” of administrative
decision in Article 78 proceeding).
55
against
impermissible
governmental
restrictions.”
(citation
omitted)). 17
The standard for a substantive due process violation is
difficult to meet: executive action only violates substantive due
process rights when it “can properly be characterized as arbitrary,
or conscience shocking, in a constitutional sense.” Lewis, 523
U.S. at 847 (internal quotation marks and citation omitted); see
also Pena v. DePrisco, 432 F.3d 98, 112 (2d Cir. 2005) (noting
that the Fourteenth Amendment is not a “font of tort law” and that
substantive due process “does not provide a comprehensive scheme
for determining the propriety of official conduct or render all
official
misconduct
actionable”
(internal
quotation
marks
and
citation omitted)); Collins v. City of Harker Heights, 503 U.S.
115,
125
(1992)
(explaining
that
the
Court
“has
always
been
reluctant to expand the concept of substantive due process because
guideposts for responsible decisionmaking in this unchartered area
are scarce and open-ended”). “In order to shock the conscience and
trigger a violation of substantive due process, official conduct
must be outrageous and egregious under the circumstances; it must
be truly brutal and offensive to human dignity.” Lombardi v.
17
Although the Second Circuit has held that a constitutional claim based
on a public contract right would “normally permit inquiry concerning
only procedural regularity in connection with nonperformance, rather
than the merits of the claim of contract breach,” the court explained
that “rare cases might be imagined where denial of a contract right, if
deemed to be Fourteenth Amendment property, would violate substantive
due process.” S & D Maintenance, 844 F.2d at 966 & n.4 (emphasis added).
56
Whitman, 485 F.3d 73, 81 (2d Cir. 2007) (internal quotation marks
and citation omitted). The difficulty of stating a claim for a
substantive due process standard is illustrated by Lewis, which
held that the parents of a motorcycle passenger killed in a highspeed
chase
by
an
allegedly
deliberately
indifferent
police
officer could not state a § 1983 claim under the doctrine. See 523
U.S. at 840, 855.
Courts
have,
on
multiple
occasions,
dismissed
substantive due process claims grounded on purportedly abusive
§ 220 investigations. In CNP Mechanical Inc. v. Alund, for example,
a plumbing contractor-plaintiff alleged that the DOL colluded with
unions to drive up the prevailing wage and devise “false claims
that [the contractor] had improperly failed to pay its employees”;
instigated “either fraudulent or baseless” claims against the
contractor;
and
intended
to
cause
the
contractor
“to
be
disqualified from obtaining new public work contracts.” No. 04CV-6593, 2007 WL 3565587, at *1-2 (W.D.N.Y. Nov. 15, 2007). The
court dismissed the contractor’s substantive due process claim.
Id. at *5. Similarly, in Astoria General Contracting, a plaintiffcontractor for the New York City Department of Education alleged
that a prevailing wage investigation was the product of collusion
between the contracting agency and the city comptroller’s office.
See
2016
WL
369237,
at
*6.
The
contractor
alleged
that
the
contracting agency helped to manufacture employee wage complaints
57
in exchange for cash, and that the agency did so in part because
of the dismissal of an earlier prevailing wage complaint. See id.
at *3. The court expressed severe skepticism about the viability
of a substantive due process claim stemming from these allegations,
concluding that it was “far from clear” that allegations aimed at
the investigation itself would shock the conscience and that the
other allegations were insufficiently egregious to merit relief.
See id. at *11.
Finally, in Leed Industries, a contractor claimed that
a wage withholding on a public works project was issued by the DOL
without the contractor ever having received a specific complaint.
See 2010 WL 882992, at *1. Further, the contractor alleged that
the DOL threatened to expand the scope of its investigation if the
contractor continued to object to the withholding. See id. A DOL
investigator
suggested
that
signing
a
collective
bargaining
agreement might “resolve the situation” and, when the contractor
refused to do so, “began spreading false, slanderous and injurious
statements about” the contractor to its clients. Id. The court
concluded that these were conclusory assertions that could not
support a substantive due process claim. Id. at *3-4.
Plaintiffs’ substantive due process claim is based on
the allegedly baseless records withholding on the Queens Hospital
Project and the cross-withholding on the Queens Hospital Project
to address purported underpayments on the Staten Island Project.
58
(Am. Compl. at ¶¶ 42-56.) According to plaintiffs’ complaint,
DASNY and DOL collaborated on the investigation and neither had a
basis to believe TADCO had violated prevailing wage laws. (Id. at
¶¶ 44, 46-48.) Plaintiffs contend that the investigation “served
no legitimate governmental purpose,” but instead was designed to
retaliate for “lawsuits that TADCO had filed against DASNY, and to
intimidate, harass and punish TADCO and Mr. DeMartino.” (Id. at
¶¶ 50-51.)
Plaintiffs support these allegations in large part by
focusing on the timing of the investigation, which began at about
the same time as the relationship between DASNY and plaintiffs
deteriorated, and after plaintiffs initiated their state court
suits. (See, e.g., Am. Compl. at ¶ 17.) They contend that the
frivolity of the investigations is underscored by how many years
had passed between the purported prevailing wage law violations
and the withholdings. (E.g., id. at ¶¶ 34-37.) Plaintiffs also
claim
that
DASNY
employee
Monahan
surveilled
DeMartino
and
threatened him. (Id. at ¶ 23.)
Ultimately, plaintiffs cannot meet the high standard
required to state a plausible claim for a substantive due process
violation. First, as to the initial records withholding on the
Queens Hospital Project in February 2007, and as noted in the
court’s procedural due process analysis, see supra Discussion,
Part IV.B, plaintiffs had a statutory obligation at all times to
59
keep adequate payroll records and provide the records to the DOL.
§ 220(3-a)(a)(iii), (c). Moreover, the prevailing wage law states
that the DOL must release a records withholding if a contractor
provides adequate records. See § 220(3-a)(c). Plaintiffs never
contend in their complaint that they provided payroll records. 18
Even if the investigation leading to that records withholding was
baseless, plaintiffs could have avoided any withholding if they
simply turned over the records. Their apparent failure to do so
indicates, instead, that the records withholding may have been
justified. See Twombly, 550 U.S. at 557 (discussing the “need at
the
pleading
stage
for
allegations
plausibly
suggesting
(not
merely consistent with)” liability).
Further, plaintiffs contend that the DOL’s February 2007
Staten Island Project withholding was issued in retaliation for
the January 2007 lawsuit. This theory is implausible in part
because the DOL — which issued the February 2007 withholding — was
not a party to any of the January 2007 lawsuits. (Am. Compl. at
18
Plaintiffs appear to contend that the DOL obtained the records from
DASNY. (See Am. Compl. at ¶ 26.) However, a public contracting agency’s
record-keeping obligations are distinct from a public contractor’s.
Compare § 220(3-a)(a)(iv) (contracting agency’s requirements), with
§ 220(3-a)(c) (contractor’s requirements). The statutory provision
addressing records withholding provides that the contractor must respond
to the records request directly. See § 220(3-a)(c) (“The fiscal officer
may require any person or corporation performing such public work to
file with the fiscal officer within ten days of receipt of said request,
payroll records, sworn to as to their validity and accuracy . . . .”).
Even if DASNY provided plaintiffs’ payroll records to the DOL, that would
be insufficient under § 220(3-a)(c) to require release of the records
withholding.
60
¶¶ 13-14 & n.1; id., Ex. A.) The Amended Complaint in this action
does not clarify why the DOL, which is the only party in this case
with the authority to issue a prevailing wage withholding, would
retaliate against TADCO and DeMartino for a suit that did not even
name the DOL as a party. Plaintiffs contend that DASNY effectively
exercised
control
over
the
DOL
because
Padula
—
the
DOL
investigator embedded with DASNY — was being paid out of DASNY’s
pocket pursuant to a contractual arrangement between DOL and DASNY.
(Ha Decl., Ex. E; see also Am. Compl. at ¶ 19.). None of the
notices of withholding incorporated by reference in the Amended
Complaint, however, were signed by Padula. (See Ha Decl., Exs. G,
L-M.) Even if DASNY controlled Padula, there are no allegations —
let alone plausible ones — that DASNY effectively controlled the
three
independent
investigators
who
signed
the
February
2007
withholding as well as the other two withholdings. (Id.)
The other challenged withholding on the substantive due
process issue is the May 2013 cross-withholding that affected the
Queens Hospital Project contract earnings. First, as the court
just explained, there is arguably a break in the causal chain
alleged by plaintiffs based on the signatures of independent and
unimplicated
DOL
investigators.
There
is,
however,
a
more
fundamental problem with plaintiffs’ challenge to the May 2013
cross-withholding.
The
legitimacy
of
the
May
2013
cross-
withholding (which affected Queens Hospital Project funds) is a
61
function of the legitimacy of the February 2010 direct underpayment
withholding
on
the
Staten
Island
Project
because
the
cross-
withholding was issued to cover alleged prevailing wage violations
on the Staten Island Project. With the substantive – as opposed to
procedural
–
legitimacy
of
the
February
2010
underpayment
withholding standing unchallenged, the court cannot find that the
May 2013 cross-withholding violated plaintiffs’ substantive due
process rights.
Additionally, none of the allegations in this case rise
near the level of the substantive due process complaints raised
and either seriously questioned or directly rejected by the courts
in CNP Mechanical, Astoria General, and Leed Industries. See CNP
Mechanical,
2007
WL
instigated
“fraudulent
contractor);
Astoria
(allegations
that
3565587,
or
Gen.,
at
*1-2
baseless”
2016
contracting
WL
agency
(allegations
claims
369237,
with
at
that
DOL
against
the
*3,
*11
*6,
retaliatory
motive
colluded with contractor to manufacture wage complaints); Leed
Indus., 2010 WL 882992, at *1 (allegations that, inter alia, DOL
threatened to expand baseless investigation’s scope if contractor
continued to object to withholding).
Plaintiffs’ allegations concerning the initiation of
retaliatory and baseless investigations parallel those raised in
the above-cited cases. They do not “shock the conscience” by
displaying official conduct “truly brutal and offensive to human
62
dignity.” Lombardi, 485 F.3d at 81 (internal quotation marks and
citation omitted). Far from it. These allegations do not achieve
the
level
of
plausibility
necessary
to
overcome
a
motion
to
dismiss. The plaintiffs’ conclusory allegations cannot plausibly
state a due process violation, especially where plaintiffs have
failed to adequately allege that the DOL and DASNY were acting
contrary to
New York’s prevailing wage law, see § 220, and the
more fundamental New York constitutional requirement to pay the
prevailing wage. See N.Y. Const. art. I, § 17; Leed Indus., 2010
WL 882992, at *2 (“Not only are [the contractor’s] allegations
wholly conclusory, but none of DOL’s alleged conduct suggests bad
faith, since [the DOL] is simply exercising its statutory authority
to investigate a contractor’s alleged failure to pay the prevailing
wage.” (citations omitted)); see also Iqbal, 556 U.S. at 678 (“A
pleading
that
offers
labels
and
conclusions
or
a
formulaic
recitation of the elements of a cause of action will not do.”
(internal quotation marks and citation omitted)); Twombly, 550
U.S. at 555 (“Factual allegations must be enough to raise a right
to relief above the speculative level . . . .”).
Plaintiffs do not analogize this case directly to any
similar set of facts where a court granted relief on a substantive
due process theory. They cite almost exclusively to broad language
from Lewis, 523 U.S. at 846-47. (See Pl. Opp’n to DOL at 12; Pl.
Opp’n to DASNY at 14.) Lewis, as discussed above, rejected the
63
substantive due process claim (on a motion to dismiss) of the
family of a motorcycle passenger who was killed in a high-speed
chase by a purportedly recklessly indifferent police officer, who
“skidded into [the passenger] at 40 miles an hour, propelling him
some 70 feet down the road and inflicting massive injuries.” 523
U.S. at 837. Lewis defines the strict limits of modern substantive
due process doctrine: official conduct objectively more shocking,
egregious, and outrageous than the conduct implicated in this case
—
official
conduct
that
resulted
in
a
death
—
was
found
insufficient to state a claim. The allegations of intentionality
underlying the claim in this case do not serve meaningfully to
distinguish
Lewis,
and
plaintiffs
do
not
argue
otherwise.
Defendants’ motions to dismiss plaintiffs’ substantive due process
claim is granted.
D.
Abuse of Process Under § 1983
Plaintiffs next allege a malicious abuse of process
claim against all defendants. “In order to state a claim for abuse
of process under New York common law, a plaintiff must allege (1)
use of a regularly issued legal process, either civil or criminal
(2) with the intent to do harm without excuse or justification and
(3) the use of process in a ‘perverted manner’ to obtain a
collateral objective.” Korova Milk Bar of White Plains, Inc. v.
PRE
Properties,
LLC,
No.
11-CV-3327,
2013
WL
417406,
at
*15
(S.D.N.Y. Feb. 4, 2013); see also Cook v. Sheldon, 41 F.3d 73, 80
64
(2d Cir. 1994) (same); Curiano v. Suozzi, 469 N.E.2d 1324 (N.Y.
1984) (same). 19
Plaintiff’s complaint characterizes the abuse of process
claim as arising under § 1983, not under state law. (Am. Compl. at
¶¶ 81-89; see id. at ¶ 81 (characterizing fourth cause of action
as an “Abuse Of Process Under The Fifth And Fourteenth Amendments
And 42 U.S.C. § 1983”).) Although a cause of action might exist
for abuse of civil process under New York state law, see Curiano,
469 N.E.2d at 1326 (providing that the challenged “regularly issued
process” may be “either civil or criminal”), plaintiffs face an
insurmountable obstacle under its § 1983 analogue because of the
civil — as opposed to criminal — nature of the alleged abuse of
process. 20 See Cook, 41 F.3d at 79 (“[S]tate law torts committed
by
state
officials
do
not
always
rise
to
[the]
level
of
constitutional violation.” (citation omitted)).
19
State law provides the elements of an abuse of process claim under
§ 1983. See generally Wilson v. Garcia, 471 U.S. 261, 277 (1985)
(recognizing that state law is authoritative source of elements of § 1983
action), superseded on other grounds by 28 U.S.C. § 1658; Del Col v.
Rice, No. 11-CV-5138, 2012 WL 6589839, at *9 n.12 (E.D.N.Y. Dec. 18,
2012) (“The federal courts look to state law to define the elements of
abuse of process . . . .”).
20 Although § 220, the prevailing wage law at issue, does provide for
criminal penalties in certain contexts, see, e.g., § 220(3)(d)(i)(1)–
(4) (providing for gradations of criminal liability, including felony
liability, for certain willful failures to pay prevailing wage), there
is no indication in the Amended Complaint that criminal penalties were
at issue in this case. Further, plaintiffs’ briefing on this issue —
which consists of approximately two pages, and most of which simply
quotes directly from the Amended Complaint (see Pl. Opp’n to DASNY at
27-28; Pl. Opp’n to DOL at 24) — nowhere proposes that the purported
abuse of process in this case involved any criminal proceedings.
65
The
Second
Circuit
has
permitted
§ 1983
claims
predicated on malicious prosecution or abuse of process in the
criminal context, but it has foreclosed § 1983 claims grounded on
an abuse of civil process. See Spear v. Town of W. Hartford, 954
F.2d 63, 68 (2d Cir. 1992) (“[Plaintiff] was subject only to civil,
not criminal, liability. Therefore, any abuse would have been
malicious abuse of process rather than malicious prosecution.
While section 1983 liability may be predicated on a claim for
malicious prosecution, it may not be predicated on a claim for
malicious
abuse
of
process.”
(citations
omitted));
Green
v.
Mattingly, 585 F.3d 97, 104 (2d Cir. 2009) (“[S]section 1983
liability . . . may not be predicated on a claim of malicious abuse
of . . .
civil
process . . . .”
(internal
quotation
marks
and
citation omitted)); cf. Cook, 41 F.3d at 80 (“The distinction
between civil and criminal abuse of process is critical for section
1983 purposes.”). Accordingly, plaintiffs’ claim under § 1983 for
an abuse of civil process must be dismissed.
E.
Conspiracy Under § 1983
Defendants
also
move
to
dismiss
plaintiffs’
§ 1983
conspiracy claim. (Am. Compl. at ¶ 73-80; DOL Mem. at 21-26; DASNY
Mem. at 23-25.) To state a § 1983 conspiracy claim, a plaintiff
must allege: “(1) an agreement between two or more state actors or
between a state actor and a private entity; (2) to act in concert
to inflict an unconstitutional injury; and (3) an overt act done
66
in
furtherance
of
that
goal
causing
damages.”
Pangburn
v.
Culbertson, 200 F.3d 65, 72 (2d Cir. 1999); see also Chen v. City
of New York, 622 F. App’x 66, 67 (2d Cir. 2015) (citing Ciambriello
v. Cnty. of Nassau, 292 F.3d 307, 324–25 (2d Cir. 2002)) (providing
elements).
Although a plaintiff may assert a civil conspiracy claim
under § 1983 for the deprivation of a constitutional right, he
must first show a violation of the underlying constitutional right.
See Singer v. Fulton Cnty. Sheriff, 63 F.3d 110, 119 (2d Cir.
1995). Stated otherwise, “a civil conspiracy claim ‘does not set
forth an independent cause of action’ but rather is ‘sustainable
only after an underlying . . . claim has been established.’” Clark
v. City of Oswego, No. 03-CV-202, 2007 WL 925724, at *7 (N.D.N.Y.
Mar.
26,
2007)
(alteration
omitted)
(quoting
McCarthy
v.
Kleindienst, 741 F.2d 1406, 1413 n. 7 (D.C. Cir. 1984)); see also
Droz v. McCadden, 580 F.3d 106, 109 (2d Cir. 2009), as amended
(Oct. 7, 2009) (“Because neither of the underlying section 1983
causes of action can be established, the claim for conspiracy also
fails.”); Smith v. Gomez, 550 F.3d 613, 617 (7th Cir. 2008) (“We
note at the outset that conspiracy is not an independent basis of
liability in § 1983 actions.”); DeStefano v. Duncanson, No. 08CV-3419, 2011 WL 651452, at *4 (S.D.N.Y. Feb. 10, 2011) (“Having
dismissed
Plaintiff’s
§
1983
substantive
claim,
his
related
conspiracy claim must also be dismissed. A Section 1983 conspiracy
67
claim against private individuals will stand ‘only insofar as the
plaintiff can prove the sine qua non of a § 1983 action: the
violation of a federal right.’” (quoting Singer, 63 F.3d at 119)).
As discussed throughout this opinion, plaintiffs have
failed adequately to plead the violation of any underlying federal
constitutional right. See supra Discussion, Part IV; see also infra
Discussion, Part V (dismissing claim for damages under New York
State Constitution). Without a viable underlying constitutional
violation, plaintiff’s conspiracy claim must be dismissed. See
Droz, 580 F.3d at 109; Singer, 63 F.3d at 119-20; see also Gomez,
550 F.3d at 617 (“[C]onspiracy is not an independent basis of
liability in § 1983 actions.”).
V.
New York Constitutional Claim
Plaintiffs also allege a due process violation under
Article I, § 6 of the New York State Constitution, which provides,
as relevant here: “No person shall be deprived of life, liberty or
property without due process of law.”
This language, of course, tracks the language in both
the Fifth and Fourteenth Amendments to the U.S. Constitution. The
due process guarantees of the New York Constitution have been
interpreted by New York courts generally to be coextensive with
federal due process protections. See Oneida Indian Nation of New
York v. Madison Cnty., 665 F.3d 408, 427 n.13 (2d Cir. 2011) (“With
some exceptions, New York courts have interpreted the due-process
68
guarantees of the New York Constitution and the United States
Constitution to be coextensive — or assumed that they are.”);
Spring v. Allegany-Limestone Cent. Sch. Dist., No. 14-CV-476, 2015
WL 5793600, at *9 (W.D.N.Y. Sept. 30, 2015) (“In the absence of a
clear ruling that a different standard is to be applied, New York
courts generally interpret the due-process guarantees of the New
York
Constitution
coextensive.”
and
the
(citations
United
omitted));
States
Constitution
Hernandez
v.
Robles,
as
855
N.E.2d 1, 14 (N.Y. 2006) (Graffeo, J., concurring) (“Although our
Court has interpreted the New York Due Process Clause more broadly
than its federal counterpart on a few occasions, all of those cases
involved the rights of criminal defendants, prisoners or pretrial
detainees,
or
other
confined
individuals.”),
abrogated
by
Obergefell v. Hodges, 135 S. Ct. 2584 (2015).
Plaintiffs do not provide any reason why the court should
apply
a
different
due
process
analysis
under
the
New
York
Constitution. Nowhere in their briefing do they submit that due
process protections under the New York Constitution, as relevant
here, exceed the protections available under the Due Process Clause
of the Fourteenth Amendment. Instead, they appear to concede that
the protections are the same. (See Pl. Opp’n to DOL at 23 n. 7.)
Accordingly, because plaintiffs could not state a claim for a due
process violation under the federal constitution, their claims
under the New York Constitution cannot succeed.
69
CONCLUSION
The
court
concludes
that
plaintiffs’
claims
cannot
survive defendants’ motions to dismiss. The court finds that
plaintiffs’ motion for recusal is meritless and it is denied. The
court also concludes that Younger abstention precludes the court
from
issuing
injunctive
relief
on
the
Amended
Complaint.
In
addition, the court finds that plaintiffs’ federal procedural due
process, substantive due process, abuse of process, and conspiracy
claims
seeking
damages
fail.
Finally,
the
court
finds
that
plaintiffs’ due process claim under the New York State Constitution
must be dismissed.
For the foregoing reasons, the Amended Complaint is
dismissed in its entirety. Because plaintiffs have already had one
opportunity to amend their complaint, and because any amendment
would be futile, the court will not grant leave to amend. See
Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 50 (2d Cir.
1991) (“[W]here a defect in the complaint cannot be cured by
amendment, it would be futile to grant leave to amend.”). The Clerk
of Court is respectfully directed to enter judgment in favor of
defendants and close this case.
SO ORDERED.
Dated:
March 1, 2016
Brooklyn, New York
_____________/s/_____________
Kiyo A. Matsumoto
United States District Judge
70
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