Naples et al v. Stefanelli et al
Filing
27
MEMORANDUM & ORDER granting 18 Motion to Dismiss for Lack of Jurisdiction; granting 18 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 19 Motion to Dismiss; granting in part and denying in part 13 Mo tion to Dismiss for Failure to State a Claim. For the following reasons, it is hereby ORDERED that: (1) The County Defendants' partial motion to dismiss is GRANTED IN PART and DENIED IN PART; ORDERED that: (2) The State Defendants' motion to dismiss is GRANTED in its entirety, and all claims against the State Defendants are DISMISSED WITH PREJUDICE; (3) The ESI Defendants' motion is GRANTED IN PART and DENIED IN PART; (4) Plaintiffs are granted leave to replead their Section 198 3 Monell claims against the County and Stefanelli in his official capacity and their malicious prosecution, RICO, and Donnelly Act claims against the ESI Defendants; (5) All discovery is STAYED for thirty days. The Clerk of the Court is directed to terminate the Suffolk County Police Department, the State of New York, the New York State Department of Environmental Conservation, and the New York State Department of Environmental Conservation Police Department as defendants in this action. So Ordered by Judge Joanna Seybert on 9/18/2013. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
JAMES V. NAPLES and JAMES C. NAPLES,
Plaintiffs,
-againstPHILIP STEFANELLI; JOSEPH PARISI;
DAVID PARISI; ENVIRONMENTAL
SERVICES, INC.; SUFFOLK COUNTY (NEW
YORK) POLICE DEPARTMENT; COUNTY OF
SUFFOLK (NEW YORK); NEW YORK STATE
DEPARTMENT OF ENVIRONMENTAL
CONSERVATION POLICE DEPARTMENT;
NEW YORK STATE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION; STATE OF
NEW YORK, and JOHN DOES 1-100,
MEMORANDUM & ORDER
12-CV-4460(JS)(ARL)
Defendants.
--------------------------------------X
APPEARANCES
For Plaintiffs:
Harry R. Thomasson, Jr., Esq.
Law Office of Harry Thomasson
3280 Sunrise Highway, Suite 112
Wantagh, NY 11793
For Defendants:
Stefanelli, Suffolk
County Police Dep’t,
Suffolk County
Joseph & David Parisi,
Envtl. Servs., Inc.
Arlene S. Zwilling, Esq.
Suffolk County Attorney’s Office
H. Lee Dennison Building, 5th Floor
100 Veterans Memorial Highway
Hauppauge, NY 11788
Glen B. Gruder, Esq.
Certilman Balin Adler & Hyman LLP
1393 Veterans Memorial Highway, Suite 301s
Hauppauge, NY 11788
Paul B. Sweeney, Esq.
Certilman Balin Adler & Hyman LLP
90 Merrick Avenue
East Meadow, NY 11554
State of New York,
N.Y. State Dep’t of
Envtl. Conservation
Police Dep’t, & N.Y.
State Dep’t of Envt.
Conservation
Gregory J. Nolan, Esq.
N.Y. State Office of the Attorney General
Environmental Protection Bureau
120 Broadway
New York, NY 10271
SEYBERT, District Judge:
Plaintiffs James V. Naples (“James”) and James C. Naples
(“Jimmy,” and together with James, “Plaintiffs”) commenced this
action on September 6, 2012 against Defendants Suffolk County (the
“County”), the County Police Department, and Philip Stefanelli
(collectively, the “County Defendants”), the State of New York,
the
New
York
State
Department
of
Environmental
Conservation
(“DEC”), and the DEC Police Department (collectively, the “State
Defendants”), Environmental Services, Inc. (“ESI”), Joseph Parisi,
and
David
Parisi
(together
with
ESI,
the
“ESI
Defendants”),
alleging violations of their constitutional rights pursuant to 42
U.S.C.
§
1983,
of
the
Racketeer
Influenced
and
Corrupt
Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., and of
various New York state statutory and common laws arising out of an
alleged
conspiracy
to
drive
Plaintiffs’
corporations
out
of
business.
Pending before the Court are the following motions: (1)
the County Defendants’ partial motion to dismiss the Amended
Complaint for failure to state a claim under Rule 12(b)(6) of the
Federal Rules of Civil Procedure (Docket Entry 13); (2) the State
2
Defendants’ motion to dismiss on the grounds of sovereign immunity
under to Rule 12(b)(1) of the Federal Rules of Civil Procedure and
for failure to state a claim under Rule 12(b)(6) (Docket Entry
18); and (3) the ESI Defendants’ motion to dismiss for failure to
state a claim under Rule 12(b)(6) (Docket Entry 19).
For the
following reasons, the County Defendants’ motion is GRANTED IN
PART and DENIED IN PART, the State Defendants’ motion is GRANTED,
and the ESI Defendants’ motion is GRANTED IN PART and DENIED IN
PART.
BACKGROUND1
James
and
Jimmy
Naples,
who
are
father
and
son
respectively, at all times relevant hereto, were the owners and
operators of Island Biofuel, LLC and JNS Industries, LLC (together,
the “Naples Corporations”).
(Am. Compl. ¶¶ 3, 4.)
Island Biofuel
is a domestic limited liability corporation that “servic[es] the
biofuel and biofeed industries by and through, inter alia, the
collection and re-sale of waste vegetable/kitchen oil.”
Compl. ¶ 3.)
(Am.
JNS Industries is a limited liability corporation
that provides rendering and trucking services to the biofuel and
biofeed industries in conjunction with Island Biofuel. (Am. Compl.
¶ 3.)
The Naples Corporations were formed by Plaintiffs in 2006,
The following facts are drawn from Plaintiffs’ Amended
Complaint and the documents attached thereto and referenced
therein and are presumed to be true for the purposes of this
Memorandum and Order.
1
3
and they operate out of a building in Center Moriches, New York
that contains offices, a storage facility, and a garage.
(Am.
Compl. ¶¶ 3, 16.)
Plaintiffs, through the Naples Corporations, would enter
into contracts with restaurants on Long Island to collect their
used vegetable and other kitchen oil.
contract
with
restaurant
a
with
new
customer,
containers
to
Plaintiffs’ scheduled pick-up.
Upon entering into a
Plaintiffs
would
provide
store
used
oil
its
the
pending
(See Am. Compl. ¶ 29.)
Each
container had a lock, and all of Plaintiffs’ locks used the same
key.
(See Am. Compl. ¶¶ 29, 32.)
Defendant
ESI
is
a
domestic
corporation,
owned
and
operated by Defendants Joseph and David Parisi, that is also
engaged in rendering to the biofuel industry on Long Island.
(Am.
Compl. ¶¶ 6-8, 17.)2
I.
ESI’s Alleged Theft of Plaintiffs’ Customers, Containers,
Oil, and Locks
According to the Amended Complaint, in or around 2010,
ESI began targeting Plaintiffs’ customers and inducing them to
breach their contracts with Plaintiffs and hire ESI instead.
Compl.
¶
18.)
If
ESI
was
successful
in
convincing
(Am.
one
of
Plaintiffs’ customers to sign a contract with ESI, ESI would remove
According to the Amended Complaint, although ESI was formed in
or around March 1983, it “only commenced rendering to the
biofuel industry during the 2000’s.” (Am. Compl. ¶ 17.)
2
4
Plaintiffs’ containers and locks from the premises and replace
them
with
ESI’s
containers
and
locks.
(Am.
Compl.
¶
20.)
Occasionally, ESI would inform Plaintiffs via letter that it was
in possession of their containers (Am. Compl. ¶ 20 & Ex. A), but
“they were always offered to Plaintiffs for pick up while empty,
drained by ESI of Plaintiffs’ contracted waste vegetable oil” (Am.
Compl. ¶ 21).
Plaintiffs were not permitted to retrieve their
containers from ESI unless they signed a release.
82.)
(Am. Compl. ¶
The Amended Complaint further alleges that, at some point in
2011, the ESI Defendants obtained a key to Plaintiffs’ locks and
“utilized the impermissibly obtained key to siphon the contents of
Plaintiffs’ containers.”
(Am. Compl. ¶ 32; see also id. ¶ 31
(stating that it “became commonplace by 2011” to “find open,
undamaged locks at the bottom of near-empty containers”).)
The Amended Complaint estimates that between 2010 and
May 2012, the ESI Defendants stole in excess of twenty thousand
gallons of oil worth approximately $50,000, containers valued at
$15,000, and $100,000 in lost profits from Plaintiffs’ customers.
(Am. Compl. ¶¶ 23, 27-28.)
Plaintiffs also assert that, even if
they retrieved their containers from ESI, the locks were always
gone. (Am. Compl. ¶ 30.) The Amended Complaint does not, however,
estimate the value of those locks.
5
II.
Jimmy’s Arrest and Prosecution
On or around September 7, 2011, Plaintiff Jimmy Naples
was pulled over by one or more Suffolk County police officers,
including Defendant Officer Stefanelli, while he was driving a
truck to collect waste cooking oil from Plaintiffs’ customers.
(Am. Compl. ¶ 33; see also ESI Defs. Mot. Ex. 6.)
It is unclear
from the Amended Complaint why Jimmy was pulled over, but he was
immediately arrested, handcuffed, and locked in the back of a
police car for nearly two hours while Suffolk County police
officers, including Officer Stefanelli, searched the truck.
Compl. ¶¶ 34, 38.)
(Am.
Jimmy was not read his Miranda rights, and the
police did not obtain his consent nor did they have a warrant to
search his vehicle.
(Am. Compl. ¶¶ 34, 38.)
While conducting
their search, the police found a pair of bolt cutters that they
seized.3
(Am. Compl. ¶ 39.)
Although Jimmy was handcuffed, he still had access to
his cell phone, and he used it to call his father, Plaintiff James
Naples, to the scene.
(Am. Compl. ¶¶ 41-42.)
Upon arrival, James
attempted to approach Jimmy in the police car, but stopped when he
was threatened with arrest by Officer Stefanelli if he did not
The Amended Complaint asserts that “[i]t is commonplace in the
biofuel industry for collectors of waste vegetable oil to carry
bolt cutters to open locks caked in vegetable oil that will not
otherwise open.” (Am. Compl. ¶ 40.)
3
6
return to his own car.
(Am. Compl. ¶¶ 43-44.)
James complied but
remained on the scene.
(Am. Compl. ¶¶ 44-45.)
The timeline of events on September 7, 2011 is somewhat
unclear;
however,
at
some
point,
Defendant David Parisi to the scene.
69.)
Officer
Stefanelli
called
(Am. Compl. ¶¶ 36-37, 45,
This was allegedly witnessed by both James and Jimmy.
(Am.
Compl. ¶ 45.)
After their search was complete, Officer Stefanelli
uncuffed Jimmy and asked him to drive his truck to the Knights of
Columbus up the street.
(Am. Compl. ¶ 46.)
Officer Stefanelli
informed Jimmy that he had called the Suffolk County Motor Carrier
Safety Division (the “County Safety Division”) and that officers
from that division would meet him at the Knights of Columbus to
perform a more thorough search. (Am. Compl. ¶ 46.) Jimmy complied
with Officer Stefanelli’s request and followed him up the street
to the Knights of Columbus parking lot.
(Am. Compl. ¶ 47.)
Eventually officers from both the County Safety Division and the
DEC arrived to inspect Jimmy’s truck; at some point, Defendant
Joseph Parisi also appeared at the site to take pictures.4
Compl. ¶¶ 50-52.)
(Am.
Plaintiffs believe that Officer Stefanelli also
called the DEC and Joseph Parisi to the scene.
(Am. Compl. ¶¶ 69,
74.)
It is unclear from the Amended Complaint whether David Parisi
was still present at this time.
4
7
Island Biofuel was ultimately charged with violating
Section 140.00 of New York Vehicle and Traffic Law for operating
a
commercial
vehicle
in
violation
of
the
state’s
safety
requirements (ESI Defs. Mot. Ex. 6)--specifically, for having a
broken windshield wiper blade and an expired “insurance health
card” (Am. Compl. ¶ 55).
Jimmy was also ordered to drive the truck
back to the Naples Corporations’ garage in Center Moriches and not
to drive the truck again until the wiper blade was fixed.
Compl. ¶ 55.)
(Am.
DEC Officers followed Jimmy back to the Naples
Corporations’ garage to make sure he complied.
(Am. Compl. ¶¶ 55-
56.)
Upon arriving at the Naples Corporations’ offices, a DEC
officer informed Jimmy that he was going to inspect the garage.
(Am. Compl. ¶ 57.)
He did not have Jimmy’s consent, he did not
have a warrant, and the garage was not otherwise visible to the
public.
(Am. Compl. ¶¶ 57, 59, 62.)
When Jimmy complained that
the DEC “had no right to conduct the inspection,” the DEC officer
replied that he was “just following orders.”
(Am. Compl. ¶ 60.)
After inspecting the garage, the DEC ordered that the garage be
closed, ticketed Jimmy and Biofuel for operating a waste facility
without a permit in violation of N.Y. COMP. CODES R & REGS. tit. 6,
§ 360-1.7(a)(1)(i), and ticketed Biofuel for violating the New
York Department of Transportation’s regulations governing the safe
operation of commercial motor vehicles, N.Y. COMP. CODES R & REGS.
8
tit. 17, § 820.0 et seq.
(Am. Compl. ¶¶ 61, 76; ESI Defs. Mot.
Ex. 6.)
The DEC made several follow-up visits to the garage and
storage
facility
and
ultimately
informed
Plaintiffs
that
“expensive plans, licenses, and fines totaling tens of thousands
of dollars were necessary for [the DEC] to even consider allowing
the storage facility to re-open.”
(Am. Compl. ¶¶ 77-78.)
“Days later,” on or around October 13, 2011, Jimmy
received
a
call
from
the
County
Police
Department’s
Seventh
Precinct (Defendant Stefanelli’s precinct), and an unknown officer
requested that he report to the precinct “regarding the truck
incident.”
Jimmy
(Am. Compl. ¶¶ 64-65; ESI Defs. Mot. Ex. 6.)
arrived,
he
was
re-arrested,
booked,
and
charged
When
with
Criminal Mischief in the Fourth Degree in violation of N.Y. PENAL
LAW § 145.00 for allegedly cutting a ten dollar lock with bolt
cutters.
(Am. Compl. ¶ 66; ESI Defs. Mot. Ex. 6.)
An unknown
officer told Jimmy that “a restaurant owner saw him do it” (Am.
Compl. ¶ 66); however, upon appearing in court to defend against
the charges, Jimmy was provided with a witness statement signed by
David Parisi--not a restaurant owner (Am. Compl. ¶ 67). It appears
as though the charges against Jimmy and the Naples Corporations
are still pending.
(See ESI Defs. Mot. Ex. 6.)
III. The Alleged Conspiracy
After
Jimmy’s
arrest,
Plaintiffs
went
headquarters to pick up some of their containers.
9
to
ESI’s
(Am. Compl.
¶ 79.)
Upon arriving, Plaintiffs “were stunned to see Defendant
Stefanelli working at the facility dressed fully in clothing
indicating that he was employed by and working for Defendant ESI.”
(Am. Compl. ¶ 80.)
Plaintiffs assert that Stefanelli was paid in
cash by the ESI Defendants to use his influence in the County
Police Department to threaten, harass, and intimidate Plaintiffs
and the Naples Corporations merely because they were a competitor
of ESI.
(Am. Compl. ¶¶ 98-100, 102 & Ex. C.)5
They were “furious
with the discovery of Defendant Stefanelli’s presence,” refused to
sign the release forms for their containers, and insisted that the
County Police Department be called. (Am. Compl. ¶ 83.) Stefanelli
made a call, and an officer arrived shortly thereafter.
(Am.
Compl.
told
¶
84.)
He
spoke
to
Stefanelli
first
and
then
Plaintiffs that he would not get involved; if Plaintiffs wanted
their container, they would have to sign the release as requested.
(Am. Compl. ¶ 84.)
This was not Plaintiffs’ only complaint to the County
Police
Department
regarding
the
ESI
Defendants’
actions;
the
County, however, never investigated the complaints or took any
action to stop the ESI Defendants’ alleged unlawful conduct.
(Am.
Apparently, on prior occasions, when Plaintiffs would contact
ESI regarding missing containers, their conversations with
Joseph Parisi would often deteriorate to arguments where Joseph
Parisi would state “you don’t know who I am” and “you don’t know
who protects me.” (Am. Compl. Ex. C.)
5
10
Compl. ¶¶ 85-86.)
In fact, on or around April 4, 2012, Plaintiffs
(through counsel) submitted a formal complaint to the County Police
Department’s Internal Affairs Division (“IAD”) describing ESI’s
actions
and
Defendant
Stefanelli’s
alleged
involvement
and
demanding that the charges against Jimmy and Island Biofuel be
dropped.
(Am. Compl. ¶ 91 & Ex. C.)
Plaintiffs’
counsel
to
schedule
an
IAD initially contacted
interview
however, no interview was ever conducted.
Apparently,
Defendant
Plaintiffs’ IAD complaint.
of
Plaintiffs;
(Am. Compl. ¶¶ 92-93.)
Stefanelli
found
(Am. Compl. ¶ 94.)
out
about
In response, he
circulated a letter to County police officers, which stated that
the County Police Department was to protect ESI and that, if anyone
saw the Naples Corporations collecting oil, they were to call
Defendant Stefanelli immediately.
The letter stated that he had
firsthand knowledge that they were cutting locks and stealing oil
and would provide a sworn affidavit for petit larceny. (Am. Compl.
¶ 96; Pls. Opp. Ex. B.)
ESI Defendants.
Plaintiffs deny stealing any oil from the
Plaintiffs interpreted Defendant Stefanelli’s
letter as a threat and retaliation for their IAD complaint.
(Am.
Compl. ¶¶ 103-04.)
Plaintiffs ultimately sold their assets and exited the
industry in or around May 2012.
(Am. Compl. ¶ 106.)
However,
before this was known publicly, Defendant Stefanelli approached
Plaintiffs while they were having breakfast one morning at a local
11
diner.
(Am. Compl. ¶ 108.)
He stated, in sum and substance, that
he was and had been employed by ESI to conduct surveillance of
ESI’s competitors, that there were other police officers involved,
and that “a lot of things went on” (which Plaintiffs interpret to
mean illegal activity).
(Am. Compl. ¶ 110.)
uniform and on duty at the time.
IV.
He was in full
(Am. Compl. ¶ 109.)
Procedural History
Plaintiffs commenced this action on September 6, 2012.
Before any of the defendants answered, Plaintiffs filed an Amended
Complaint
asserting
the
following
claims
for
relief:
(1)
violations of Plaintiffs’ constitutional rights pursuant to 42
U.S.C. § 1983;6 (2) violations of RICO; (3) violation of Section
340 of New York’s General Business Law (the “Donnelly Act”); (4)
violation of Section 349 of New York’s Business Law (New York’s
“Consumer Protection Act”); (5) intentional/negligent infliction
of emotional distress; (6) tortious interference with business
relations; (7) conversion and theft (against Stefanelli and the
ESI Defendants only); (8) fraud and extortion; (9) negligent
Plaintiffs actually assert separate causes of action for
violations of their constitutional rights and violations of
Section 1983. However, “Section 1983 itself creates no
substantive rights; it provides only a procedure for redress for
the deprivation of rights established elsewhere.” Thomas v.
Roach, 165 F.3d 137, 142 (2d Cir. 1999). Thus, to the extent
that Plaintiffs seek additional relief under Section 1983
unrelated to their alleged constitutional violations, those
claims are DISMISSED.
6
12
hiring, training, and supervision (against the Suffolk County
Police Department and the DEC Police Department only); and (10)
libel and slander (against all defendants but the DEC Police
Department).7
The County Defendants moved to dismiss on December 14,
2012, and the State and ESI Defendants filed separate motions to
dismiss
on
January
31,
2013.
(Docket
Entries
13,
Plaintiffs filed one opposition to all three motions.
Entry 24.)
18-19.)
(Docket
Only the State and ESI Defendants filed reply briefs.
(Docket Entries 25-26.)
These motions are presently before the
Court.
DISCUSSION
Before discussing the merits of the pending motions, the
Court must address three preliminary matters.
First, Plaintiffs
have stipulated to the dismissal of all claims against the County
Police Department and the DEC Police Department (see Thomasson
Decl. ¶ 2); accordingly, all claims against those defendants are
hereby DISMISSED WITH PREJUDICE.
Second, the Court finds that
James lacks standing to bring Section 1983 false arrest and
malicious prosecution claims arising out of Jimmy’s arrest and
prosecution, cf. Morgan v. City of N.Y., 166 F. Supp. 2d 817, 819
Plaintiffs also assert a separate cause of action for
attorneys’ fees. However, attorneys’ fees are a form of relief,
not a ground for relief.
7
13
(S.D.N.Y. 2001) (finding that a parent lacked standing to bring a
Section
1983
claim
based
on
an
alleged
deprivation
of
her
daughter’s rights because “only the person toward whom the state
action was directed, and not those incidentally affected may
maintain a § 1983 claim” (internal quotation marks and citation
omitted)), and those claims are hereby DISMISSED, see, e.g., Cohan
v. Movtady, 751 F. Supp. 2d 436, 440 (E.D.N.Y. 2010) (sua sponte
dismissing
claims
for
lack
of
standing).
Third,
Plaintiffs
repeatedly argue in their opposition brief that it would be
“premature to dismiss claims at this early juncture of the case
absent
discovery
possession.”
conduct
of
facts
(Pls. Opp. 6.)
discovery
in
order
peculiarly
in
the
Defendants’
However, “allowing the plaintiff to
to
piece
together
a
claim
would
undermine the purpose of Federal Rule of Civil Procedure 12(b)(6),
which is to ‘streamline[] litigation by dispensing with needless
discovery and factfinding’ where the plaintiff has failed to state
a claim under the law.”
KBL Corp. v. Arnouts, 646 F. Supp. 2d
335, 346 n.6 (S.D.N.Y. 2009) (alteration in original) (quoting
Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S. Ct. 1827, 104 L.
Ed. 2d 338 (1989)); see also Bridgewater v. Taylor, 745 F. Supp.
2d 355, 358 (S.D.N.Y. 2010) (“As a general proposition, a litigant
has to state a claim before he or she is entitled to discovery.”).
Thus, the Court finds this argument to be without merit.
14
In proceeding to the pending motions, the Court will
first discuss the applicable standards of review before turning to
the merits of the parties’ arguments.
I.
Applicable Standards of Review under the Federal Rules of
Civil Procedure
A.
Rule 12(b)(1)
“A case is properly dismissed for lack of subject matter
jurisdiction under Rule 12(b)(1) when the district court lacks the
statutory or constitutional power to adjudicate it.”
United States, 201 F.3d 110, 113 (2d Cir. 2000).
Makarova v.
In resolving a
motion to dismiss for lack of subject matter jurisdiction, the
Court may consider affidavits and other materials beyond the
pleadings to resolve jurisdictional questions.
See Morrison v.
Nat’l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff’d,
––– U.S. ––––, 130 S. Ct. 2869, 177 L. Ed. 2d 535 (2010).
The
Court must accept as true the factual allegations contained in the
complaint, but it will not draw argumentative inferences in favor
of the plaintiff because subject matter jurisdiction must be shown
affirmatively.
See id.; Atl. Mut. Ins. Co. v. Balfour Maclaine
Int’l Ltd., 968 F.2d 196, 198 (2d Cir. 1992).
The plaintiff bears
the
jurisdiction
burden
of
establishing
preponderance of the evidence.
subject
matter
Morrison, 547 F.3d at 170.
15
by
a
B.
Rule 12(b)(6)
Pursuant to Rule 8(a)(2) of the Federal Rules of Civil
Procedure, a pleading must contain “a short and plain statement of
the claim showing that the pleader is entitled to relief.”
the
now
well-established
Iqbal/Twombly
standard,
a
Under
complaint
satisfies Rule 8 only if contains enough allegations of fact to
state a claim for relief that is “plausible on its face.”
Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L.
Ed. 2d 929 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.
Ct. 1937, 173 L. Ed. 2d 868 (2009).
This “plausibility standard,” which governs motions to
dismiss
under
principles.”
Rule
12(b)(6),
is
governed
by
“[t]wo
working
Iqbal, 556 U.S. at 670, 678; accord Harris v. Mills,
572 F.3d 66, 71-72 (2d Cir. 2009).
First, although the Court must
accept all allegations as true, this “tenet” is “inapplicable to
legal conclusions;” thus, “[t]hreadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do
not suffice.”
Iqbal, 556 U.S. at 678; see also Twombly, 550 U.S.
at 555, 557 (a pleading that offers “labels and conclusion” or
“naked assertion[s]” devoid of “further factual enhancement” does
not
satisfy
Rule
8).
Second,
only
complaints
that
state
a
“plausible claim for relief” can survive a motion to dismiss.
Iqbal, 556 U.S. at 679.
Determining whether a complaint does so
is “a context-specific task that requires the reviewing court to
16
draw on its judicial experience and common sense.”
Id.; accord
Harris, 572 F.3d at 72.
In deciding a Rule 12(b)(6) motion to dismiss, the Court
is confined to “the allegations contained within the four corners
of [the] complaint.”
Pani v. Empire Blue Cross Blue Shield, 152
F.3d 67, 71 (2d Cir. 1998).
This has been interpreted broadly to
include any document attached to the Complaint, any statements or
documents incorporated in the Complaint by reference, any document
on which the Complaint heavily relies, and anything of which
judicial notice may be taken.
See Chambers v. Time Warner, Inc.,
282 F.3d 147, 152–153 (2d Cir. 2002); Kramer v. Time Warner Inc.,
937 F.2d 767, 773 (2d Cir. 1991).
Consideration of matters beyond
those just enumerated requires the conversion of a Rule 12(b)(6)
motion to dismiss into one for summary judgment under Rule 56, see
FED. R. CIV. P. 12(d); see also Kramer, 937 F.2d at 773; therefore,
the Court cannot and will not consider the declarations and other
documentary evidence attached to Plaintiffs’ opposition papers.
C.
Rule 9(b)
To state a claim sounding in fraud or mistake, Rule 9(b)
of the Federal Rules of Civil Procedure imposes a heightened
pleading standard: “[A] party must state with particularity the
circumstances constituting fraud or mistake.”
FED. R. CIV. P. 9(b).
The Second Circuit has read Rule 9(b) to require that a complaint
“(1) specify the statements that the plaintiff contends were
17
fraudulent, (2) identify the speaker, (3) state where and when the
statements were made, and (4) explain why the statements were
fraudulent,” in order to survive a motion to dismiss.
Rombach v.
Chang, 355 F.3d 164, 170 (2d Cir. 2004) (quoting Mills v. Polar
Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)) (internal
quotation
marks
omitted).
This
heightened
pleading
standard
applies to common law fraud claims as well as substantive RICO
claims sounding in fraud.
See First Capital Asset Mgmt., Inc. v.
Satinwood, Inc., 385 F.3d 159, 178-79 (2d Cir. 2004).
II.
The Pending Motions to Dismiss
A.
The County Defendants’ Motion
The County Defendants’ partial motion to dismiss only
seeks the dismissal of the following claims:
(1) the Section 1983
claims against the County, (2) the RICO claims against the County,
and
(3)
the
Stefanelli.8
state
law
claims
against
both
the
County
and
The Court will address the arguments in support of
dismissal of each claim separately.
1.
Section 1983 Claims Against the County
The County Defendants argue that the Section 1983 claims
against the County must be dismissed because Plaintiffs have failed
to plead a basis for municipal liability.
The Court agrees.
The Court notes that the County Defendants have not moved to
dismiss the Section 1983 and RICO claims as pled against
Stefanelli in his individual capacity.
8
18
A
municipality may not be held liable under Section 1983 for alleged
unconstitutional actions committed by its employees solely on the
basis of respondeat superior.
Monell v. N.Y.C. Dep’t of Soc.
Servs., 436 U.S. 658, 690-91, 98 S. Ct. 2018, 56 L. Ed. 2d 611
(1978).
Rather, “[t]o hold a municipality liable in such an
action, a plaintiff is required to plead and prove three elements:
(1) an official policy or custom that (2) causes the plaintiff to
be subjected to (3) a denial of a constitutional right.”
Zahra v.
Town of Southold, 48 F.3d 674, 685 (2d Cir. 1995) (internal
quotation marks and citation omitted); see also Roe v. City of
Waterbury, 542 F.3d 31, 37 (2d Cir. 2008) (“[A] plaintiff must
demonstrate that, through its deliberate conduct, the municipality
was the ‘moving force’ behind the alleged injury.” (quoting Bd. of
Cnty. Comm’rs v. Brown, 520 U.S. 397, 404, 117 S. Ct. 1382, 137 L.
Ed. 2d 626 (1997)).
To establish the existence of a municipal policy or
custom, a plaintiff must allege: (1) the existence of a formal
policy which is officially endorsed by the municipality; (2)
actions taken or decisions made by municipal officials with final
decision-making authority, which caused the alleged violation of
the plaintiff’s civil rights; (3) a practice so persistent and
widespread that it constitutes a custom of which constructive
knowledge and acquiescence can be implied on the part of the
policy-making officials; or (4) a failure by policymakers to
19
properly
train
or
supervise
their
subordinates,
amounting
to
“deliberate indifference” to the rights of those who come in
contact within the municipal employees.
Sulehria v. City of N.Y.,
670 F. Supp. 2d 288, 320 (S.D.N.Y. 2009); see also Davis v.
Lynbrook Police Dep’t, 224 F. Supp. 2d 463, 478 (E.D.N.Y. 2002).
Here, Plaintiffs seek to hold the County liable for
failing to properly train and/or supervise Defendant Stefanelli
and unnamed John Doe officers.
(Am. Compl. ¶¶ 222-23.)
However,
“[t]he mere fact that [Jimmy] was falsely arrested, without more,
does not show that the [County]’s training program is inadequate.
A training program is not inadequate merely because a few of its
graduates deviate from what they were taught.”
N.Y., 478 F.3d 76, 95 (2d Cir. 2007).
Jenkins v. City of
And, here, Plaintiffs have
failed to plead any “facts suggesting that the constitutional
deprivations they suffered were the consequence of training or
supervisory deficiencies.”
Marte v. N.Y.C. Police Dep't, No. 10-
CV-3706, 2010 WL 4176696, at *3 (S.D.N.Y. Oct. 12, 2010).
First, to the extent that Plaintiffs believe that the
County Police Department’s failure to investigate their complaints
about ESI is evidence of a failure to train and/or supervise that
resulted in a violation of their constitutional rights (see Am.
Compl. ¶ 103), their claim fails as a matter of law because
Plaintiffs (or any other crime victim, for that matter) do not
have
a
constitutionally
protected
20
right
to
a
government
investigation of alleged wrongdoing, see Harrington v. Cnty. of
Suffolk, 607 F.3d 31, 35 (2d Cir. 2010); cf. Town of Castle Rock
v. Gonzales, 545 U.S. 748, 767-68, 125 S. Ct. 2796, 162 L. Ed. 2d
658 (2005).
Second, to the extent that Plaintiffs believe that the
County Police Department’s failure to investigate Plaintiffs’
complaint to IAD regarding Defendant Stefanelli states a claim
under Monell for inadequate supervision, their claim also fails.
Although allegations that a municipality was aware of, but failed
to act on, civilian complaints against its police officers may be
sufficient to show a municipal policy or custom, cf. Fiacco v.
City of Rensselaer, 783 F.2d 319, 328 (2d Cir. 1986) (finding that
evidence that a city failed to adequately investigate five civilian
complaints of excessive force was sufficient to establish that the
city was indifferent to (and thus had a custom of condoning) the
use of excessive force), a municipality policy or custom is just
one element of a Monell claim.
A plaintiff asserting a claim for
municipal liability must also plead and prove that “there is a
direct causal link between a municipal policy or custom and the
alleged constitutional deprivation.”
City of Canton v. Harris,
489 U.S. 378, 385, 109 S. Ct. 1197, 103 L. Ed. 2d 412 (1989).
Here, Plaintiffs’ sole complaint regarding Defendant Stefanelli to
IAD
occurred
after
Jimmy’s
arrest
and
the
allegedly
unconstitutional search of the garage, and there are no allegations
21
suggesting that the County ignored any complaints prior to Jimmy’s
arrest.
Thus, Plaintiffs have failed to plead facts plausibly
suggesting that the County’s deliberate indifference caused the
alleged constitutional violations.
See, e.g., Ruffino v. City of
Hoover, 891 F. Supp. 2d 1247, 1276 (N.D. Ala. 2012) (rejecting a
plaintiff’s argument that a city’s failure to take any disciplinary
action against a police officer who allegedly used excessive force
against
him
indifference
“[c]learly,
established
to
no
the
a
use
causal
custom
of
link
or
excessive
exists
policy
of
force,
between
[the
deliberate
stating
that
plaintiff]’s
injuries resulting from [the officer’s use of excessive force]
during his arrest and . . . the [c]ity’s conduct after his
arrest”).
Finally, the Amended Complaint’s conclusory allegations
of inadequate training or supervision are insufficient to defeat
a motion to dismiss.
See Triano v. Town of Harrison, 895 F. Supp.
2d 526, 540 (S.D.N.Y. 2012) (collecting cases).
Accordingly, the Court finds that Plaintiffs have failed
to state a plausible claim for municipal liability under Section
1983 against the County.9
The County Defendants’ motion to dismiss
Plaintiffs appear to argue that, even if they failed to state a
claim, the claims against the County should not be dismissed
because the County is necessary to conduct discovery. (Pls.
Opp. 8.) However, the Federal Rules of Civil Procedure provide
for discovery from non-parties, see, e.g., FED. R. CIV. P. 45, and
the notion that a party should be required to defend against a
9
22
these claims is GRANTED, and the Section 1983 claims against the
County and Stefanelli in his official capacity10 are DISMISSED
WITHOUT PREJUDICE.
2.
RICO Claims Against the County
The County Defendants argue that the RICO claims against
the County must be dismissed because “claims to enforce RICO cannot
be pursued against government entities.”
The Court agrees.
(Cnty. Defs. Mot. 6.)
“‘[E]very court in [the Second] Circuit that
has considered the issue has held that a municipality cannot form
the requisite criminal intent to establish a predicate act, and
has therefore dismissed the claim against the municipality.’” Wood
v. Inc. Vill. of Patchogue, 311 F. Supp. 2d 344, 354 (E.D.N.Y.
2004)
(alterations
in
original)
(quoting
Frooks
v.
Town
of
Cortlandt, 997 F. Supp. 438, 457 (S.D.N.Y. 1998), aff’d, 182 F.3d
899 (2d Cir. 1999)); see also Nu-Life Constr. Corp. v. N.Y.C. Bd.
of Educ., 779 F. Supp. 248, 251-52 (E.D.N.Y. 1991) (collecting
cases).
Accordingly, the County Defendants’ motion to dismiss the
meritless action solely because it is in possession of relevant
evidence is absurd.
Official-capacity suits “‘generally represent only another way
of pleading an action against an entity of which an officer is
an agent,’” Kentucky v. Graham, 473 U.S. 159, 165-66, 105 S. Ct.
3099, 87 L. Ed. 2d 114 (1985) (quoting Monell, 436 U.S. at 690
n.55), and courts routinely dismiss official-capacity claims
where the plaintiff also sues the municipality, see, e.g., Volpe
v. Nassau Cnty., 915 F. Supp. 2d 284, 298 (E.D.N.Y. 2013);
Tsotesi v. Bd. of Educ., 258 F. Supp. 2d 336, 338 n.10 (S.D.N.Y.
2003).
10
23
RICO claims against the County is GRANTED, and those claims are
hereby DISMISSED WITH PREJUDICE.
Further, “because the [County]
cannot be held liable under RICO as a matter of law, neither may
the [County] employees in their official capacities.”
F. Supp. at 457.
Frooks, 997
Therefore, all RICO claims against Stefanelli in
his official capacity are also DISMISSED WITH PREJUDICE.
3.
State Law Claims Against All County Defendants
The County Defendants argue that Plaintiffs’ state law
claims against the County and Stefanelli must be dismissed because
the
Amended
Complaint
contains
served a notice of claim.
no
allegation
that
Plaintiffs
The Court agrees with respect to the
claims against the County only.
Section 52 of New York County Law provides that:
Any claim or notice of claim against a county
for damage, injury or death, or for invasion
of personal or property rights, of every name
and nature, and whether casual or continuing
trespass or nuisance and any other claim for
damages arising at law or in equity, alleged
to have been caused or sustained in whole or
in part by or because of any misfeasance,
omission of duty, negligence or wrongful act
on the part of the county, its officers,
agents, servants or employees, must be made
and served in compliance with section fifty-e
of the general municipal law.
N.Y. COUNTY LAW § 52(1).
Section 50-e of the General Municipal Law
requires a plaintiff to file a notice of claim prior to commencing
an action against a municipality and within ninety days of the
incident giving rise to the claim.
24
N.Y. GEN. MUN. LAW § 50-e(1)(a).
To survive a motion to dismiss, a plaintiff must affirmatively
plead that a notice of claim was filed.
See N.Y. GEN. MUN. LAW § 50-
i(1)(b); see also Horvath v. Daniel, 423 F. Supp. 2d 421, 423
(S.D.N.Y. 2006).
allegation
that
Here, as the Amended Complaint is void of any
a
notice
of
claim
was
filed
prior
to
the
commencement of this action, the state law claims against the
County11 must be DISMISSED.12
With respect to Plaintiffs’ state law claims against
Defendant Stefanelli, although Section 50-e’s notice of claim
requirement has been extended to Suffolk County police and peace
It is actually somewhat unclear whether the notice of claim
requirement applies to Plaintiffs’ claims under Sections 340 and
349 of New York’s General Business Law. Sections 50-e and 50-i
of the General Municipal Law apply only to claims sounding in
tort. While Section 52 of the County Law is on its face much
broader than the General Municipal Law and has been applied to
non-tort claims, see, e.g., Feldman v. Nassau Cnty., 349 F.
Supp. 2d 528, 539 (E.D.N.Y. 2004) (finding that Section 52
covered employment discrimination claims under New York’s Human
Rights Law), aff’d, 434 F.3d 177 (2d Cir. 2006), the Court was
not able to find any cases applying the notice of claim
requirement to claims under the Donnelly Act or New York’s
Consumer Protection Law. This was not addressed by either the
County Defendants or Plaintiffs in their briefs. Nonetheless,
as the Court finds that Plaintiffs have not stated a claim for
relief under the General Business Law, see infra pp. 43-47, the
Court need not definitely resolve this issue here.
11
Plaintiffs argue that they should be permitted to file a late
notice of claim or request an extension of time to do so. (Pls.
Opp. 7.) The federal courts, however, lack authority to permit
the late filing of a notice of appeal. See N.Y. MUN. LAW § 50e(7) (limiting applications for relief under Section 50-e to New
York State Supreme and County courts); see also Horvath, 423 F.
Supp. 2d at 424.
12
25
officers, see N.Y. GEN. MUN. LAW § 50-m(3), “service of a notice of
claim is not a condition precedent to the commencement of an action
against a county’s employees or agents unless the county is
required to indemnify the individual defendants,” Costabile v.
Cnty. of Westchester, 485 F. Supp. 2d 424, 432 (S.D.N.Y. 2007)
(citing N.Y. GEN. MUN. LAW § 50-e(1)(b)).
Whether Stefanelli was
acting within the scope of his employment with the County while
committing the alleged tortious acts was not briefed by the County
Defendants or Plaintiffs, and the Court will not address this issue
sua sponte. Accordingly, to the extent that the County Defendants’
motion seeks dismissal of the state law claims against Stefanelli,
the motion is DENIED.13
B.
The State Defendants’ Motion
The State Defendants move to dismiss the claims asserted
against them on that grounds that: (1) they are barred by the
Eleventh Amendment and, thus, the Court lacks subject matter
jurisdiction and (2) Plaintiffs have otherwise failed to state a
claim.
Because the Court finds that Plaintiffs’ claims against
the State Defendants are barred by the Eleventh Amendment, it will
not address the State Defendants’ other arguments.
The Court notes that this ruling does not preclude the County
Defendants from raising (and properly briefing) this issue in a
motion for summary judgment.
13
26
“The Eleventh Amendment to the Constitution bars suits
against a state in federal court unless that state has consented
to the litigation or Congress has permissibly enacted legislation
specifically
overriding
the
state’s
immunity.”
Russell
v.
Dunston, 896 F.2d 664, 667 (2d Cir. 1990) (citations omitted); see
also Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356, 363,
121 S. Ct. 955, 148 L. Ed. 2d 866 (2001).
to claims against State agencies.
This bar also applies
See P.R. Aqueduct & Sewer Auth.
v. Metcalf & Eddy, Inc., 506 U.S. 139, 144, 113 S. Ct. 684, 121 L.
Ed. 2d 605 (1993).
Thus, Plaintiffs’ claims against the State of
New York and the DEC are all barred by the Eleventh Amendment, see
Dube v. State Univ. of N.Y., 900 F.2d 587, 594 (2d Cir. 1990)
(sovereign immunity bars Section 1983 claims against the State);14
Gaines v. Tex. Tech Univ., 965 F. Supp. 886, 889 (N.D. Tex. 1997)
(collecting cases concluding that RICO does not abrogate states’
sovereign immunity);15 Finn-Verburg v. N.Y. State Dep’t of Labor,
122 F. Supp. 2d 329, 335 (N.D.N.Y. 2000) (stating that claims
against New York State arising under New York common law were
Even if sovereign immunity did not bar Plaintiffs’ Section
1983 claims against the State Defendants, these claims would
nonetheless fail as a matter of law because “neither a State nor
its officials acting in their official capacities are ‘persons’
under § 1983.” Will v. Mich. Dep’t of State Police, 491 U.S.
58, 71, 109 S. Ct. 2304, 105 L. Ed. 2d 45 (1989).
14
Plaintiffs’ RICO claims against the State Defendants are also
subject to dismissal for the same reason the RICO claims against
the County were dismissed. See supra Section II.A.2.
15
27
barred by sovereign immunity); Papay v. Haselhuhn, No. 07-CV-3858,
2010 WL 4140430, at *2, 10 (S.D.N.Y. Oct. 21, 2010) (dismissing
Donnelly Act claims against the New York State Department of Health
as barred by sovereign immunity).
Accordingly, the State Defendants’ motion to dismiss is
GRANTED
in
its
entirety,
and
all
claims
against
the
State
Defendants are hereby DISMISSED WITH PREJUDICE.16
C.
The ESI Defendants’ Motion
The ESI Defendants move to dismiss the Amended Complaint
in its entirety for failure to state a claim.
The Court will
address the ESI Defendants’ argument in support of dismissing each
claim separately.
1.
Section 1983 Claims
To prevail on a claim under Section 1983, a plaintiff
must establish that: (1) the defendant acted under color of state
law and (2) as a result of the defendant’s actions, the plaintiff
suffered a deprivation of his or her rights as secured by the
Constitution or the laws of the United States.
See Am. Mfr. Mut.
Ins. Co. v. Sullivan, 526 U.S. 40, 49-50, 119 S. Ct. 977, 143 L.
Plaintiffs state in their opposition brief that “the DEC
itself is incidental to the instant matter” and the “primary
issue” is against the DEC’s officers. (Pl. Opp. 5.) As there
are no DEC officers named as defendants in the Amended
Complaint, the Court reads this as a concession by Plaintiffs
that their claims against the State Defendants should be
dismissed.
16
28
Ed. 2d 130 (1999). Here, the ESI Defendants argue that the Section
1983 claims against them must be dismissed because: (1) they are
not state actors and, thus, not acting under color of state law
and (2) Plaintiffs have otherwise failed plead a constitutional
violation.
a.
State Actors
Only in limited circumstances will courts recognize that
a private individual may be subject to liability under Section
1983.
Plaintiffs here allege that the ESI Defendants acted under
color of state law by conspiring with Defendant Stefanelli.17
“To
state a claim against a private entity on a section 1983 conspiracy
theory, the complaint must allege facts demonstrating that the
private entity acted in concert with the state actor to commit an
unconstitutional act.”
quotation
marks
and
Ciambriello, 292 F.3d at 324 (internal
citation
omitted);
see
also
Pangburn
v.
Culbertson, 200 F.3d 65, 72 (2d Cir. 1999) (stating that a Section
1983 conspiracy requires (1) an agreement between state and private
There are actually two ways in which a private actor can act
“under color of state law” for the purposes of Section 1983:
(1) by “willful[ly] participa[ting] in joint activity with the
State or its agents,” Spear v. Town of W. Hartford, 954 F.2d 63,
68 (2d Cir. 1992) (internal quotation marks and citation
omitted), or (2) by conspiring with a state official to violate
the plaintiff’s constitutional rights, see Ciambriello v. Cnty.
of Nassau, 292 F.3d 307, 324-25 (2d Cir. 2002). Here, the
Amended Complaint very clearly states that Plaintiffs are
asserting a conspiracy theory of liability. (Am. Compl. ¶ 143.)
The Court will limit its discussion accordingly.
17
29
actors; “(2) to act in concert to inflict an unconstitutional
injury; and (3) an overt act done in furtherance of that goal
causing damages”).
The ESI Defendants argue that they did not conspire with
Stefanelli because “[t]he law is clear that furnishing information
or summoning police officers, even if that information is false
. . . or results in the officers taking affirmative action, is not
sufficient to constitute joint action with state actors for the
purposes of § 1983.”
(ESI Defs. Mot. 8.)
While this is a correct
statement of law, it is somewhat incomplete:
“A private party
supplying information or seeking police assistance does not become
a state actor . . . unless the police officers were improperly
influenced or controlled by the private party.”
Victoria’s
Secret
Stores,
L.L.C.,
851
F.
Supp.
Stewart v.
2d
442,
446
(E.D.N.Y. 2012) (omission in original) (emphasis added) (internal
quotation marks and citation omitted). Here, the Amended Complaint
contains allegations plausibly suggesting that the ESI Defendants
paid Defendant Stefanelli to pull Jimmy over and arrest and ticket
him.
Such allegations go beyond merely providing information to
the police, and the Court finds them sufficient to survive a motion
to dismiss.
See, e.g., Bacquie v. City of N.Y., No. 99-CV-10951,
2000 WL 1051904, at *2 (S.D.N.Y. July 31, 2000) (finding that a
complaint adequately pled that hotel employees conspired with
police to falsely arrest the plaintiffs for trespassing, stating
30
that “[t]he fact that the police officers consulted with the hotel
employees and then tried to get the plaintiffs to sign a hotel
form whereby they agreed never to enter the hotel again gives rise
to an inference that the officers and hotel security were acting
in concert”).
Accordingly, to the extent that the ESI Defendants move
to dismiss the Section 1983 claims for failure to plead state
action, their motion is DENIED.
b.
The
Failure to State a Claim
ESI
Defendants
read
the
Amended
Complaint
asserting three distinct claims under Section 1983:
as
malicious
prosecution, false arrest, and illegal search in violation of the
Fourth Amendment.18
The Amended Complaint also appears to assert a claim for
violation of Plaintiffs’ rights to due process. (See Am. Compl.
¶ 146.E (stating that Plaintiffs were deprived of “their
property, employment, businesses, happiness, liberty, and
livelihoods by and through [the County Police Departments’]
ignoring Plaintiffs’ direct and indirect complaints and pleas
for help against the Defendants, depriving Plaintiffs of due
process”).) However, Plaintiffs did not raise this claim in
opposition to the motions to dismiss; therefore, the Court deems
it abandoned. See Adams v. N.Y. State Educ. Dep’t, 752 F. Supp.
2d 420, 452 n.32 (S.D.N.Y. 2010) (collecting cases). Further,
as the Court stated above, Plaintiffs have no constitutionally
protected property interest in the police conducting a proper
investigation, see supra p. 20, so the claim is also without
merit.
18
31
i.
Malicious Prosecution
The ESI Defendants argue that the malicious prosecution
claims must be dismissed because the charges against Jimmy and the
Naples Corporations are still pending. The Court agrees. To state
a claim for malicious prosecution under Section 1983 in New York,
a plaintiff must allege:
(1) the commencement of a criminal
proceeding, (2) favorable termination of that proceeding, (3) lack
of probable cause, (4) the proceedings were instituted with actual
malice, and (5) a post-arraignment seizure.
704 F.3d 105, 111-12 (2d Cir. 2013).
Swartz v. Insogna,
Here, the Amended Complaint
is void of any allegations plausibly suggesting that the criminal
action(s) pending against Jimmy and the Naples Corporations were
terminated in their favor. Accordingly, the ESI Defendants’ motion
to dismiss these claims is GRANTED, and the malicious prosecution
claims against the ESI Defendants are DISMISSED WITHOUT PREJUDICE.
ii.
The
ESI
False Arrest
Defendants
argue
that
Jimmy’s
false
arrest
claims must be dismissed because the Amended Complaint fails to
adequately allege that the arrests lacked probable cause.
Court disagrees.
The
Although “[a] § 1983 claim of false arrest based
on the Fourth Amendment right to be free from unreasonable seizures
may not be maintained if there was probable cause for the arrest,”
Fulton v. Robinson, 289 F.3d 188, 195 (2d Cir. 2002), “[w]here, as
here, an arrest is made without a warrant, the existence of
32
probable cause is an affirmative defense that must be proved by
the defendant,” Mejia v. City of N.Y., 119 F. Supp. 2d 232, 25253 (E.D.N.Y. 2000) (citing Broughton v. State, 37 N.Y.2d 451, 458,
373 N.Y.S.2d 87, 95, 335 N.E.2d 310, 315 (1975)); see also Brandon
v. City of N.Y., 705 F. Supp. 2d 261, 269 (S.D.N.Y. 2010) (“The
defendant has the burden of raising and proving the affirmative
defense of probable cause.” (internal quotation marks and citation
omitted)).
Thus, as the ESI Defendants, not Plaintiffs, bear the
burden of pleading and proving a lack of probable cause, the ESI
Defendants’ motion to dismiss the false arrest claims for failing
to so plead must be DENIED.19
iii. Illegal Search
Finally,
the
ESI
Defendants
argue
that
Plaintiffs’
Fourth Amendment claim arising out of the search of the garage
must be dismissed because: (1) there was probable cause for the
Although courts are reluctant to consider affirmative defenses
on a pre-answer motion to dismiss, see Johnson ex rel. Johnson
v. Cnty. of Nassau, No. 09–CV–4746, 2010 WL 3852032, at *4
(E.D.N.Y. Sept. 27, 2010) (“At the motion to dismiss stage, the
Court generally does not consider affirmative defenses.”); Ortiz
v. City of N.Y., 755 F. Supp. 2d 399, 401 (E.D.N.Y. 2010) (“A
motion to dismiss is often not the appropriate stage to raise
affirmative defenses . . . .”), a defendant may raise an
affirmative defense in such a motion so long as the defense
appears on the face of the complaint, Pani, 152 F.3d at 71.
However, this was not briefed by the ESI Defendants. Rather, as
explained above, the ESI Defendants argue that Plaintiffs failed
to plead a lack of probable cause, not that the allegations in
the Amended Complaint conclusively establish the existence of
probable cause. The Court will not address whether probable
cause appears on the face of the Amended Complaint sua sponte.
19
33
search and (2) there is no allegation in the Amended Complaint
that they conspired with the police.
merit.
Neither argument is of any
First, even assuming that there was probable cause to
search the garage, the existence of probable cause, in and of
itself,
does
requirement.
not
excuse
the
Fourth
Amendment’s
warrant
Cf. United States v. Levy, 731 F.2d 997, 1000 (2d
Cir. 1984) (“A search is presumed to be unreasonable and in
violation of the Fourth Amendment unless a warrant is first
secured.”); Moore v. Vega, 371 F.3d 110, 115 (2d Cir. 2004)
(“Absent
certain
exceptions
to
the
warrant
warrantless search is per se unreasonable.”).20
requirement,
a
Second, the Court
has already found that Plaintiffs have sufficiently pled that the
ESI Defendants were acting in concert with Defendant Stefanelli,
who according to the Amended Complaint “arranged for the [DEC] to
inspect and close the garage” (Am. Compl. ¶ 74).
See supra pp.
29-30.
Although it seems likely that the administrative searches
exception to the warrant requirement applies here, see generally
Camara v. Mun. Ct. of City & Cnty. of S.F., 387 U.S. 523, 87 S.
Ct. 1727, 18 L. Ed. 2d 930 (1967), see also N.Y. COMP. CODES R &
REGS. tit. 17, § 820.0 et seq. (New York Department of
Transportation’s Motor Carrier Safety Regulations), this
exception (or any exception for that matter) was not raised or
briefed by the ESI Defendants, and the Court will not discuss
its applicability to the present facts sua sponte.
20
The Court would, however, entertain a pre-discovery, partial
motion for summary judgment on Plaintiffs’ illegal search claim
on this ground.
34
Accordingly, the ESI Defendants’ motion to dismiss this
Fourth Amendment claim is DENIED.
2.
RICO Claims
The Amended Complaint asserts a cause of action for
“violation of 18 U.S.C., Section 1961, et seq. (RICO),” (Am.
Compl., Second Cause of Action), but fails to specify under which
subsection of 18 U.S.C. § 1962 Plaintiffs are bringing their RICO
claims.
Nonetheless, to state any claim under RICO, a plaintiff
must allege: (1) a violation of 18 U.S.C. § 1962; (2) an injury to
business or property; and (3) causation of the injury by the
violation of § 1962.
Pinnacle Consultants, Ltd. v. Leucadia Nat’l
Corp., 101 F.3d 900, 904 (2d Cir. 1996).
To plead a violation of
18 U.S.C. § 1962,21 a complaint must assert seven elements:
“(1)
that the defendant (2) through the commission of two or more acts
(3) constituting a ‘pattern’ (4) of ‘racketeering activity’ (5)
directly or indirectly invests in, or maintains an interest in, or
participates in (6) an ‘enterprise’ (7) the activities of which
affect interstate or foreign commerce.”
Moss v. Morgan Stanley,
Subsection (a) prohibits the use of income derived from a
pattern of racketeering activity to acquire an interest in,
establish, or operate an enterprise engaged in or whose
activities affect interstate commerce. Subsection (b) prohibits
the acquisition of any interest in or control of such an
enterprise through a pattern of racketeering activity.
Subsection (c) prohibits the conduct or participation in the
conduct of such an enterprise’s affairs through a pattern of
racketeering activity. And subsection (d) prohibits conspiring
to do any of the above. 18 U.S.C. § 1962.
21
35
Inc., 719 F.2d 5, 17 (2d Cir. 1983) (quoting 18 U.S.C. § 1962(a)—
(c)).
“The failure of any one element is fatal to a RICO claim.”
Scheiner v. Wallace, 832 F. Supp. 687, 699 (S.D.N.Y. 1993).
The
ESI Defendants argue, inter alia, that Plaintiffs have failed to
adequately plead two or more acts constituting a pattern of
racketeering activity.22
The Court agrees.
The Court will first discuss the alleged predicate acts
before turning to whether such acts establish a pattern.
a.
Racketeering Activity
“Racketeering
activity”
is
defined
as
“any
act
‘chargeable’ under several generically described state criminal
laws,
any
criminal
act
‘indictable’
provisions,
under
including
mail
numerous
and
wire
specific
fraud,
federal
and
any
‘offense’ involving bankruptcy or securities fraud or drug-related
activities that is ‘punishable’ under federal law.”
Sedima,
S.P.R.L. v. Imrex Co., 473 U.S. 479, 481-82, 105 S. Ct. 3275, 87
L. Ed. 2d 346 (1985) (quoting 18 U.S.C. § 1961(1)).
The Amended
Complaint asserts that the following actions of the ESI Defendants
constitute racketeering activity:
stealing Plaintiffs’ vegetable
oil and vegetable oil containers (Am. Compl. ¶ 154.A); stealing
Plaintiffs’ customers through “extort[ion] and intimidate[ion]”
and thus driving them out of business (Am. Compl. ¶ 154.B); and
22
Plaintiffs do not address this argument in their opposition.
36
money laundering (Am. Compl. ¶ 156). (See also Am. Compl. ¶ 133
(listing theft, extortion, and money laundering.)23
i.
Stealing Plaintiffs’ Oil, Containers,
and Customers
Not all theft constitutes racketeering activity under
RICO; rather, as is relevant here, RICO is limited to robbery and
extortion as defined by New York’s Penal Law.
§
1961(1)(A)
constitute
(stating
racketeering
that
the
activity
only
are
state
See 18 U.S.C.
law
“murder,
crimes
that
kidnapping,
gambling, arson, robbery, bribery, extortion, dealing in obscene
matter, or dealing in a controlled substance or listed chemical”).
Robbery is defined by New York Penal Law as “forcible
stealing.”
N.Y. PENAL LAW § 160.00.
As the Amended Complaint is
void of any allegations of the use or threat of use of physical
force, id. (“A person forcibly steals property and commits robbery
when, in the course of committing a larceny, he uses or threatens
the immediate use of physical force upon another person . . . .”),
Plaintiffs have failed to sufficiently plead a predicate act of
robbery.
As Plaintiffs are represented by counsel, the Court is
limiting its discussion to the predicate acts that were
specifically listed in the Amended Complaint and will not engage
in a sua sponte fishing expedition to determine what other
predicate acts the Amended Complaint might allege if construed
liberally. Thus, although Defendants raise (and discredit) mail
fraud as a possible predicate act, the Court will not address it
here as it was not specifically pled in the Amended Complaint.
23
37
Extortion
is
defined
by
New
York
Penal
Law
as
“compel[ling] or induc[ing] another person to deliver . . .
property to himself or a third person by means of instilling in
him a fear that, if the property is not so delivered, that actor
or
another
statute].”24
will
[commit
one
of
Id. § 155.05(2)(e).
the
acts
enumerated
Such acts include:
in
the
accusing the
individual of a crime or causing criminal charges to be instituted
against him and “us[ing] or abus[ing] his position as a public
servant by performing some act within or related to his official
duties, or by failing or refusing to perform an official duty, in
such
manner
as
to
affect
§ 155.05(2)(e)(iv), (viii).
some
person
adversely.”
Id.
Here, there are no allegations in the
Amended Complaint that Plaintiffs willfully relinquished their oil
and containers to the ESI Defendants; rather, they appear to have
been taken without Plaintiffs’ consent.
There are, however,
allegations that plausibly suggest that Plaintiffs gave up certain
customers to ESI due to the ESI Defendants’ accusing Jimmy of
committing a crime and the alleged abuse of Defendant Stefanelli’s
public office (including both his targeting Plaintiffs at the
request of the ESI Defendants and his refusal to investigate
Plaintiffs’ complaints against the ESI Defendants).
The Court
There is no crime of “extortion” under the Penal Law; however,
Grand Larceny in the Fourth Degree includes obtaining property
by extortion. Id. § 155.30(6).
24
38
finds that these allegations sufficiently plead a predicate act of
racketeering activity.
Cf. People v. Spatarella, 34 N.Y.2d 157,
160-62, 356 N.Y.S.2d 566, 567-69, 313 N.E.2d 38, 39-40 (1974)
(finding that obtaining a business’s customers through threat of
physical injury constituted larceny by extortion).
ii.
Money Laundering
A violation of 18 U.S.C. § 1956 constitutes a predicate
act under RICO.
18 U.S.C. § 1961(1)(B).
Section 1956 prohibits
an individual from: (1) conducting or attempting to conduct a
financial
transaction,
(2)
with
knowledge
that
the
property
involved in the transaction represents the proceeds of some form
of unlawful activity, (3) with the transaction in fact involving
the proceeds of specified unlawful activity, and (4) with the
intent to promote the carrying on of specified unlawful activity.
18 U.S.C. § 1956(a)(1)(A)(i).
The ESI Defendants assert that the
Amended Complaint “makes no specific allegations as to how the ESI
Defendants violated the money laundering statutes” but instead
relies on wholly conclusory allegations.
The Court disagrees.
(ESI Defs. Mot. 14.)
Here, the Amended Complaint asserts that the
ESI Defendants used the proceeds that they derived from stealing
Plaintiffs’
oil,
containers,
and
customers
to
pay
Defendant
Stefanelli and other unnamed officers for their continued efforts
to extort more customers from Plaintiffs.
154.B.)
(Am. Compl. ¶¶ 131,
These allegations are clearly not conclusory; however,
39
whether they are sufficient to state a predicate act of money
laundering was not briefed by the ESI Defendants and will not be
addressed by the Court sua sponte.
Thus, to the extent that the ESI Defendants move to
dismiss Plaintiffs’ RICO claims for failure to plead racketeering
activity, their motion is DENIED.
b.
Pattern
To establish a “pattern of racketeering activity,” the
predicate acts of racketeering activity must “amount to or pose a
threat of continued criminal activity.”
Cofacrèdit, S.A. v.
Windsor Plumbing Supply Co., 187 F.3d 229, 242 (2d Cir. 1999)
(quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239, 109 S.
Ct. 2893, 106 L. Ed. 2d 195 (1989)).
This continuity requirement
“can be satisfied either by showing a ‘closed-ended’ pattern--a
series of related predicate acts extending over a substantial
period of time--or by demonstrating an ‘open-ended’ pattern of
racketeering activity that poses a threat of continuing criminal
conduct beyond the period during with the predicate acts were
performed.”
Spool v. World Child Int’l Adoption Agency, 520 F.3d
178, 183 (2d Cir. 2008).
i.
Closed-Ended Continuity
“To satisfy closed-ended continuity, the plaintiff must
prove a series of related predicates extending over a substantial
period of time.”
Cofacrèdit, 187 F.3d at 242 (internal quotation
40
marks and citation omitted); accord Spool, 520 F.3d at 184.
Although there are a variety of non-dispositive factors relevant
to
the
inquiry
of
whether
closed-ended
continuity
exists,
including “the length of time over which the alleged predicate
acts took place, the number and variety of acts, the number of
participants, the number of victims, and the presence of separate
schemes,” GICC Capital Corp. v. Tech. Fin. Grp., Inc., 67 F.3d
463, 467 (2d Cir. 1995), “closed-ended continuity is primarily a
temporal concept,” Cofacrèdit, 187 F.3d at 242.
“Predicate acts
extending over a few weeks or months . . . do not satisfy this
requirement,” H.J. Inc., 492 U.S. at 242, and the Second Circuit
has “never held a period of less than two years to constitute a
‘substantial period of time,’” Cofacrèdit, 187 F.3d at 242; see
also GICC, 67 F.3d at 467-68 (collecting cases).
Here, the predicate acts of extortion could have not
begun until on or around September 2011, when Jimmy was arrested
by Defendant Stefanelli, as there are no allegations in the Amended
Complaint that Plaintiffs were previously threatened with arrest
or that Plaintiffs knew that Defendant Stefanelli was abusing his
position as a public servant (see Am. Compl. ¶ 80 (stating that
Plaintiffs were “stunned” to learn that Defendant Stefanelli was
working for ESI after Jimmy’s arrest)).
Such extortion ended, at
the absolute latest, in or around May 2012, when Plaintiffs sold
41
their business. Thus, as these acts occurred within an eight month
period, Plaintiffs have failed to plead closed-ended continuity.25
ii.
Open-Ended Continuity
“To satisfy open-ended continuity, the plaintiff . . .
must show that there was a threat of continuing criminal activity
beyond the period during which the predicate acts were performed.”
Cofacrèdit,
187
F.3d
at
242.
Here,
however,
once
the
ESI
Defendants eliminated Plaintiffs’ businesses as competitors, “the
scheme essentially came to its conclusion.”
First Capital Asset
Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 181 (2d Cir. 2004).
There are no allegations in the Amended Complaint to suggest that
the scheme continued after the ESI Defendants successfully ran
Plaintiffs out of business.26
The Second Circuit has held that
such an “‘inherently terminable’ scheme does not imply a threat of
continued racketeering activity.”
(quoting GICC, 67 F.3d at 466).
Cofacrèdit, 187 F.3d at 244
Thus, the Court finds that the
Assuming, arguendo, that Plaintiffs adequately pled predicate
acts of money laundering, the money laundering began, at the
earliest, in 2010 when ESI began stealing Plaintiffs’ containers
and ended, at the latest, in 2012 when Plaintiffs sold their
business. As these acts also occurred within a two-year period,
they similarly fail to plead closed-ended continuity.
25
Plaintiffs attach to their opposition brief affidavits
suggesting that the ESI Defendants targeted other competitors.
The Court, however, cannot consider these affidavits in deciding
the pending motion, see supra pp. 16-17, and, thus, does not
decide here whether such facts, if true, are sufficient to plead
open-ended continuity.
26
42
alleged predicate acts do not “amount to or pose a threat of
continued criminal activity.”
H.J. Inc., 492 U.S. at 239.
As Plaintiffs have failed to adequately allege a pattern
of racketeering activity, they have failed to state a claim for
relief under RICO and those claims against the ESI Defendants are
hereby DISMISSED WITHOUT PREJUDICE.
3.
New York State Law Claims
The ESI also argue that Plaintiffs’ state law claims
must be dismissed for failure to state a claim.27
The Court will
address each of Plaintiffs’ state law claims separately.
a.
Donnelly Act
Section 340 of New York’s General Business Law provides,
in relevant part, as follows:
Every contract, agreement,
combination whereby
arrangement
or
A monopoly in the conduct of any
business, trade or commerce or in the
furnishing of any service in this state,
is or may be established or maintained,
or whereby
Competition or the free exercise of any
activity in the conduct of any business,
trade or commerce or in the furnishing of
any service in this state is or may be
restrained or whereby
They also asked the Court to decline to extend supplemental
jurisdiction over Plaintiffs’ state law claim in the event that
all of Plaintiffs’ federal claims were dismissed. Given that
many of Plaintiffs’ federal claims survive this motion, the ESI
Defendants’ supplemental jurisdiction argument is moot.
27
43
For the purpose of establishing or
maintaining
any
such
monopoly
or
unlawfully interfering with the free
exercise of any activity in the conduct
of any business, trade or commerce or in
the furnishing of any service in this
state any business, trade or commerce or
the furnishing of any service is or may
be restrained, is hereby declared to be
against public policy, illegal and void.
N.Y. GEN. BUS. LAW § 340(1).
To state a claim under the Donnelly Act, a plaintiff
must allege facts that: “(1) identify the relevant product market,
(2) describe the nature and effects of the purported conspiracy,
(3) allege how the economic impact of that conspiracy is to
restrain trade in the market in question, and (4) show a conspiracy
or reciprocal relationship between two or more entities.” Benjamin
of Forest Hills Realty, Inc. v. Austin Sheppard Realty, Inc., 34
A.D.3d 91, 94, 823 N.Y.S.2d 79, 81-82 (2d Dep’t 2006).
Further,
a plaintiff must plead that he suffered an antitrust injury by
“alleg[ing] that the challenged action had an actual adverse effect
on competition as a whole in the relevant market.”
Wolf Concept
S.A.R.L. v. Eber Bros. Wine & Liquor Corp., 736 F. Supp. 2d 661,
669
(W.D.N.Y.
2010)
(internal
quotation
marks
and
citation
omitted).
The ESI Defendants argue that Plaintiffs have failed to
plead that they suffered an antitrust injury.
The Court agrees.
The Amended Complaint alleges that the ESI Defendants’ actions
44
“push[ed] [Plaintiffs] from the biofuel and biofuel rendering
markets on and in Long Island, New York.”
(Am. Compl. ¶ 184.)
However, “[a]lleging injury as an individual competitor within the
market does not suffice to state a claim for an antitrust injury
as antitrust statutes were enacted to protect competition and not
individual competitors.”
Wolf Concept, 736 F. Supp. 2d at 669;
see also Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477,
488, 97 S. Ct. 690, 50 L. Ed. 2d 701 (1977).
What effect, if any,
the ESI Defendants’ had on Long Island’s biofuel market more
generally is unknown.
Accordingly, to the extent that the ESI Defendants’
motion seeks dismissal of Plaintiffs’ Donnelly Act claim, their
motion is GRANTED, and this claim is DISMISSED WITHOUT PREJUDICE.
b.
Consumer Protection Act
New York law prohibits “[d]eceptive acts or practices in
the conduct of any business, trade or commerce or in the furnishing
of any service in this state.”
N.Y. GEN. BUS. LAW § 349(a).
“To
state a cause of action under § 349, a plaintiff must allege (1)
a deceptive consumer-oriented act or practice which is misleading
in a material respect, and (2) injury resulting from such act.”
Exxonmobile Inter–Am., Inc. v. Advanced Info. Eng’g Servs., Inc.,
328 F. Supp. 2d 443, 447 (S.D.N.Y.2004).
While it is not entirely
clear, the Court reads the Amended Complaint as asserting that the
ESI Defendants’ arrangement with Defendant Stefanelli and other
45
unnamed officers to purposefully target and harass Plaintiffs and
their businesses constitutes a “deceptive consumer-oriented act.”28
The ESI Defendants assert that this fails to state a claim because,
inter alia, the Amended Complaint does not allege any “consumeroriented” conduct on the part of the ESI Defendants.
The Court
agrees.
A threshold issue in every § 349 case is whether the
defendants’ conduct was “consumer-oriented.”
See Oswego Laborers’
Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20,
25, 623 N.Y.S.2d 529, 532, 647 N.E.2d 741, 744 (1995).
“Consumer-
oriented conduct does not necessarily require repetition or a
pattern of deceptive behavior, but to state a claim of consumeroriented deception, a plaintiff must allege that the disputed acts
or
practices
have
a
broader
impact
Exxonmobile, 328 F. Supp. 2d at 447.
on
consumers
at
large.”
Plaintiffs have failed to do
that here.
The Court does not read the Amended Complaint as asserting
that the ESI Defendants engaged in deceptive practices in
convincing Plaintiffs’ customers to breach their contracts.
Although Plaintiffs would likely have standing to assert such a
claim, see M.V.B. Collision, Inc. v. Allstate Ins. Co., 728 F.
Supp. 2d 205, 217-18 (E.D.N.Y. 2010), it was not specifically
pled in the Amended Complaint, and the Court is under no
obligation to construe Plaintiffs’ pleading liberally, see
Dayton v. City of Middletown, 786 F. Supp. 2d 809, 811 n.1
(S.D.N.Y. 2011) (noting that pleadings submitted by lawyers are
not entitled to the less stringent standards and liberal
interpretations afforded to pleadings drafted by pro se
parties).
28
46
“In New York law, the term ‘consumer’ is consistently
associated with an individual or natural person who purchases
goods, services or property for ‘personal, family or household
purposes.’”
Cruz v. NYNEX Info. Res., 263 A.D.2d 285, 289, 703
N.Y.S.2d 103, 106 (1st Dep’t 2000); see also Genesco Entm't, a
Div. of Lymutt Indus., Inc. v. Koch, 593 F. Supp. 743, 751
(S.D.N.Y.
statute
1984)
involves
(“The
an
typical
violation
individual
consumer
contemplated
who
falls
by
victim
the
to
misrepresentations made by a seller of consumer goods . . . .”).
Thus, Plaintiffs and their companies--which are not engaged in
buying goods, services, or property for personal use--are not the
type of consumer that Section 349 was designed to protect.29
Accordingly,
the
ESI
Defendants’
motion
to
dismiss
Plaintiffs’ Consumer Protection Act claim is GRANTED, and the claim
is DISMISSED WITH PREJUDICE.
c.
Intentional Infliction of Emotional Distress
Under New York law, intentional infliction of emotional
distress “has four elements: (i) extreme and outrageous conduct;
(ii) intent to cause, or disregard of a substantial probability of
causing, severe emotional distress; (iii) a causal connection
between
the
distress.”
conduct
and
injury;
and
(iv)
severe
emotional
Howell v. N.Y. Post Co., 81 N.Y.2d 115, 121, 596
Plaintiffs argue otherwise, but they do not cite to any legal
authority to support their assertion.
29
47
N.Y.S.2d 350, 353, 612 N.E.2d 699, 702 (1993); see also Sawicka v.
Catena, 79 A.D.3d 848, 849, 912 N.Y.S.2d 666, 667 (2d Dep’t 2010).
The ESI Defendants argue that Plaintiffs have failed to plead
extreme and outrageous conduct.
The Court disagrees.
The Amended
Complaint asserts that the ESI Defendants falsely accused Jimmy of
cutting their lock in an attempt to steal their oil, which resulted
in his arrest and prosecution.
(Am. Compl. ¶ 67.)
This is
sufficient to state a claim for intentional infliction of emotional
distress.
See, e.g., Levine v. Gurney, 149 A.D.2d 473, 473, 539
N.Y.S.2d 967, 968 (2d Dep’t 1989) (finding that a false police
report could form the basis of an intentional infliction of
emotional
distress
claim).
Accordingly,
the
ESI
Defendants’
motion to dismiss this claim is DENIED.30
d.
Tortious Interference
To state a claim for tortious interference with business
relations in New York, a plaintiff must plead that: “(i) the
It is unclear whether Plaintiffs also intend to bring a claim
for negligent infliction of emotional distress, as they did not
mention it in their opposition brief. Nonetheless, such a claim
is meritless. To state a claim for negligent infliction of
emotional distress under New York law, Plaintiffs must assert
that they “suffer[ed] an emotional injury from defendant’s
breach of a duty which unreasonably endangered [their] own
physical safety” or that they were “threatened with physical
harm as a result of defendant’s negligence.” Mortise v. United
States, 102 F.3d 693, 696 (2d Cir. 1996). Here, there are no
allegations that the ESI Defendants owed a duty to Plaintiffs
nor are there allegations suggesting that Plaintiffs were ever
threatened with physical harm.
30
48
plaintiff had business relations with a third party; (ii) the
defendants interfered with those business relations; (iii) the
defendants acted for a wrongful purpose or used dishonest, unfair,
or improper means; and (iv) the defendants’ acts injured the
relationship.”
Scutti Enters., L.L.C. v. Park Place Entm’t Corp.,
322 F.3d 211, 215 (2d Cir. 2003) (internal quotation marks and
citation omitted).
The ESI Defendants argue that Plaintiffs have
failed to plead “any contracts that ESI Defendants allegedly
interfered [sic].”
The
Amended
(ESI Defs. Mot. 24.)
Complaint
states
that
the
The Court disagrees.
ESI
Defendants
“stole
customers that were duly contracted with Island Biofuel” (Am.
Compl. ¶ 18) and gives the following examples:
Tutto Il Giorno,
Fire House Deli, Huntington Social, Gio’s Pizzeria, Ming Ting,
Shang Hai Restaurant, and Nautilus Café (Am. Compl. Ex. A).
Accordingly,
the
ESI
Defendants’
motion
to
dismiss
Plaintiffs’ tortious interference claims is DENIED.
e.
Libel/Slander
Under New York law, to state a claim for libel or
slander, a plaintiff must plead: (1) an oral or written defamatory
statement of fact, (2) regarding the plaintiff, (3) published to
a third party by the defendant, (4) due to the fault of the
defendant, and (5) injury to the plaintiff.
Boyd v. Nationwide
Mut. Ins. Co., 208 F.3d 406, 409 (2d Cir. 2000); Celle v. Filipino
Reporter Enters., Inc., 209 F.3d 163, 176 (2d Cir. 2000). Further,
49
to survive a motion to dismiss, a plaintiff must allege “the time,
place and manner of the false statement and identify to whom the
false statement was made.”
67, 76 (S.D.N.Y. 2012).
Thompson v. Bosswick, 855 F. Supp. 2d
The ESI Defendants argue that the Amended
Complaint lacks the required specificity.
The Court disagrees.
The Amended Complaint asserts that on or around September 7, 2011,
Defendant David Parisi told the police that he saw Jimmy cut a
lock owned by ESI.
(Am. Compl. ¶ 67.)
Whether this is, in fact,
defamatory, and whether Plaintiffs have adequately pled the other
elements of a libel or slander claim were not raised by the ESI
Defendants, and the Court will not address these arguments sua
sponte.
Accordingly,
the
ESI
Defendants’
motion
to
dismiss
Plaintiffs’ libel/slander claims is DENIED.
f.
Fraud, Extortion, Theft, and Conversion
The ESI Defendants do not separately brief their grounds
for dismissing Plaintiffs’ fraud, extortion, theft, and conversion
claims, but rather merely state in a footnote that “[f]or the
reasons set forth above, Plaintiffs’ causes of action for Fraud,
Extortion, Theft and Conversion[] are inadequately alleged and
likewise must be dismissed.”
(ESI Defs. Mot. 24 n.12.)
Although
a court need not consider an argument that is presented only in a
footnote, cf. Paese v. Hartford Life & Accident Ins. Co., 449 F.3d
435, 446 n.3 (2d Cir. 2006), the ESI Defendants touched on these
50
causes of action when discussing whether the Amended Complaint
adequately alleged RICO predicate acts.
Thus, the Court will
consider their arguments.
With respect to Plaintiffs’ extortion claim, the ESI
Defendants’ argue--again in a footnote--that the Amended Complaint
“make[s] absolutely no allegations regarding what acts by the ESI
Defendants could possible [sic] constitute ‘extortion.’”
Defs. Mot. 15 n.7.)
(ESI
Plaintiffs do not refute this argument or
address their extortion claim at all in their opposition papers;
therefore, the Court deems this claim abandoned, see Adams, 752 F.
Supp. 2d at 452 n.32, and DISMISSES it on that basis.
Further,
such claim is patently frivolous as extortion is a criminal
offense, see N.Y. PENAL LAW § 155.05(2)(e), and may not be pled as
a separate cause of action in a civil case, see Crandall v.
Bernard, Overton & Russell, 133 A.D.2d 878, 876, 520 N.Y.S.2d 237,
238 (3d Dep’t 1987) (affirming the dismissal of a civil cause of
action for extortion, stating that “extortion . . . constitute[s]
[a] criminal offense[] specifically defined in the Penal Law and,
as such, w[as] improperly pleaded as a separate cause of action in
the instant civil case”).
Thus, Plaintiffs’ extortion claim is
DISMISSED WITH PREJUDICE.
With
Defendants
respect
argued
in
to
the
Plaintiffs’
RICO
portion
fraud
of
claim,
their
the
brief
ESI
that
Plaintiffs failed to adequately plead mail fraud relating to ESI’s
51
letters
to
Plaintiffs,
see
supra
p.
5,
because
the
Amended
Complaint does not specify which statements in those letters were
false or fraudulent in violation of Rule 9.
(ESI Defs. Mot. 15-
16.)
Plaintiffs again fail to refute this argument or mention
their
fraud
claim
at
all
in
their
opposition
papers,
and
theft
and
accordingly it is DISMISSED as abandoned.31
Finally,
with
respect
to
Plaintiffs’
conversion claims, the ESI Defendants argue--again in a footnote
--that the allegations in the Amended Complaint are conclusory and
insufficient to survive a motion to dismiss.
(ESI Defs. Mot. 17
n.10 (“Plaintiffs also make the unfounded, untrue and wholly
conclusory claim that the ESI Defendants have stolen their waste
vegetable oil and customers since 2010.
As for the alleged theft
of oil and containers, Plaintiffs do not make a single specific
allegation of theft, identifying what was stolen, from where, and
when.”).
As an initial matter, Plaintiffs’ theft claim fails for
the same reason as Plaintiffs’ extortion claim fails, and such
claim is accordingly DISMISSED WITH PREJUDICE. The Court, however,
To the extent that Plaintiffs base their fraud claim on David
Parisi’s allegedly false accusations to the police, their claim
is without merit. To state a claim for common law fraud under
New York law, a plaintiff must allege that he reasonably relied
on the defendant’s allegedly false representation. See Banque
Arabe et Internationale D'Investissement v. Md. Nat’l Bank, 57
F.3d 146, 153 (2d Cir. 1995). Here, the Amended Complaint does
not allege, nor is it plausible to suggest, that Plaintiffs
relied on David Parisi’s statement to the police.
31
52
disagrees
with
the
ESI
Defendants’
dismissing the conversion claim.
under
New
York
law,
a
argument
in
support
of
To state a claim for conversion
plaintiff
must
assert
that
“someone,
intentionally and without authority, assume[d] or exercise[d]
control
over
personal
property
belonging
to
someone
interfering with that person’s right of possession.”
else,
Colavito v.
N.Y. Organ Donor Network, Inc., 8 N.Y.3d 43, 49–50, 827 N.Y.S.2d
96, 100, 860 N.E.2d 713, 717 (2006). The Amended Complaint asserts
that
the
ESI
Defendants
have
taken
nearly
$15,000
worth
of
containers belonging to Plaintiffs and nearly $50,000 worth of oil
belonging to Plaintiffs.
(Am. Compl. ¶¶ 22-23, 27-28.)
The Court
finds that these allegations are sufficient to survive a motion to
dismiss and, accordingly, DENIES the ESI Defendants’ motion to
dismiss Plaintiffs’ conversion claim.
III. Leave to Amend
Although Plaintiffs have not requested leave to replead,
the Second Circuit has stated that “[w]hen a motion to dismiss is
granted,
the
complaint.”
usual
practice
is
to
grant
leave
to
amend
the
Hayden v. Cnty. of Nassau, 180 F.3d 42, 53 (2d Cir.
1999); see also FED. R. CIV. P. 15(a)(2) (“The court should freely
give leave [to amend] when justice so requires.”).
Leave to amend
should be granted unless there is evidence of undue delay, bad
faith, undue prejudice, or futility.
See Milanese v. Rust–Oleum
Corp.,
2001).
244
F.3d
104,
110
(2d
Cir.
53
For
the
reasons
articulated above, the Court finds that it would be futile to grant
Plaintiffs
leave
to
replead
their
claims
against
the
State
Defendants, their New York state law claims against the County,
and
their
New
York
State
Consumer
Protection
Act,
negligent
infliction of emotional distress, extortion, fraud, and theft
claims against the ESI Defendants, and those claims are hereby
DISMISSED WITH PREJUDICE.
The Court GRANTS Plaintiffs leave to
replead their Section 1983 claims against the County and Stefanelli
in his official capacity and their RICO and Donnelly Act claims
against the ESI Defendants.32
CONCLUSION
For the following reasons, it is hereby ORDERED that:
(1)
The County Defendants’ partial motion to dismiss is
GRANTED IN PART and DENIED IN PART.
Police
Department,
the
RICO
All claims against the County
claims
against
the
County
and
Stefanelli in his official capacity, and the state law claims
against the County are DISMISSED WITH PREJUDICE, and the Section
1983 claims against the County and Stefanelli in his official
Although the malicious prosecution claims against the ESI
Defendants were dismissed without prejudice, the Court is not
granting Plaintiffs leave to replead such claims at this time.
There is no indication in Plaintiffs’ opposition papers that,
since the ESI Defendants filed their motion, the prosecution(s)
was/were favorably terminated. Plaintiffs may seek leave to
amend to reassert malicious prosecution claims if and when that
occurs.
32
54
capacity are DISMISSED WITHOUT PREJUDICE with leave to replead as
outlined above.
(2)
It is further ORDERED that:
The State Defendants’ motion to dismiss is GRANTED
in its entirety, and all claims against the State Defendants are
DISMISSED WITH PREJUDICE;
(3)
The ESI Defendants’ motion is GRANTED IN PART and
DENIED IN PART.
claims
are
Protection
The malicious prosecution, RICO, and Donnelly Act
DISMISSED
Act,
WITHOUT
negligent
PREJUDICE,
infliction
of
and
the
emotional
Consumer
distress,
extortion, fraud, and theft claims are DISMISSED WITH PREJUDICE.
It is further ORDERED that:
(4)
Plaintiffs
are
granted
leave
to
replead
their
Section 1983 Monell claims against the County and Stefanelli in
his official capacity and their malicious prosecution, RICO, and
Donnelly Act claims against the ESI Defendants.
If Plaintiffs
wish to file a Second Amended Complaint repleading such claims,
they must do so within thirty (30) days of the date of this
Memorandum and Order.
If Plaintiffs fail to do so, the Amended
Complaint will be the operative pleading, and the parties will
proceed to discovery on the claims that survive this Memorandum
and Order--namely, all claims against Defendant Stefanelli in his
individual capacity, Jimmy’s false arrest claim against the ESI
Defendants,
and
both
Plaintiffs’
infliction
of
emotional
illegal
distress,
55
search,
tortious
intentional
interference,
libel/slander, and conversion claims against the ESI Defendants.
Finally, it is ORDERED that:
(5)
All discovery is STAYED for thirty days.
The Clerk of the Court is directed to terminate the
Suffolk County Police Department, the State of New York, the New
York State Department of Environmental Conservation, and the New
York
State
Department
of
Environmental
Conservation
Police
Department as defendants in this action.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:
September
18 , 2013
Central Islip, NY
56
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?