Brookhaven Town Conservative Committee v. Walsh et al
Filing
21
ORDER granting 16 Motion to Dismiss for Failure to State a Claim; terminating 16 Motion to Dismiss for Lack of Jurisdiction. For the reasons set forth herein, the Court grants defendants' motion to dismiss the federal claim. Given the di smissal of plaintiff's federal claim, the Court declines to exercise supplemental jurisdiction over plaintiff's state law claim for breach of contract and, thus, dismisses this claim without prejudice. Any amended complaint must be filed within 30 days of this Memorandum and Order. Ordered by Judge Joseph F. Bianco on 3/23/2016. (Dolecki, Lauren)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 14-CV-6097 (JFB)(ARL)
_____________________
BROOKHAVEN TOWN CONSERVATIVE COMMITTEE,
Plaintiff,
VERSUS
EDWARD M. WALSH, JR. AND SUFFOLK COUNTY CONSERVATIVE COMMITTEE OF
NEW YORK STATE,
Defendants.
_______________________
MEMORANDUM AND ORDER
March 23, 2015
_______________________
JOSEPH F. BIANCO, District Judge:
Plaintiff Brookhaven Town Conservative
Committee (“plaintiff” or “BTCC”) brings
this action alleging that defendants Edward
M. Walsh, Jr. (“Walsh”) and the Suffolk
County Conservative Committee of New
York State (“SCCP”) (1) violated 18 U.S.C.
§ 1962(c) by threatening plaintiff that its
Wilson-Pakula authority would be revoked if
it refused to abide by Walsh’s directives and
ultimately, revoking plaintiff’s WilsonPakula authority; and (2) committed a state
law breach of contract by breaching the rules
and regulations of the Suffolk County
Conservative Committee by denying plaintiff
its Wilson-Pakula authority. For the reasons
set forth herein, the Court grants defendants’
motion to dismiss. In sum, because the
decision to grant or withhold Wilson-Pakula
authority to a town committee is vested in the
County Executive Committee, plaintiff does
not have a “right” to Wilson-Pakula authority
and, thus, cannot claim a RICO injury based
upon the denial of that authority. The Court
dismisses plaintiff’s federal claim with
prejudice and declines to exercise jurisdiction
over plaintiff’s state law claims. However, in
an abundance of caution, the Court will allow
plaintiff to amend its complaint to attempt to
allege a RICO injury based upon an alleged
diversion of funds.
I.
A.
BACKGROUND
Factual Background
The Court takes the following facts from
the Amended Complaint. (Am. Compl.) The
Court assumes these facts to be true for
purposes of deciding this motion and
construes them in the light most favorable to
plaintiff, the non-moving party.
Plaintiff is the governing body of the
Town
of
Brookhaven
Conservative
Committee. (Am. Compl. ¶ 1.) Plaintiff was
organized to conduct “a local political
committee for purposes of promoting,
screening, and nominating local candidates
with conservative values within the Town of
Brookhaven” and to raise money to support
such candidates. (Id. at ¶ 11.)
cease from demanding screenings of all
candidates for public office, he will and
would terminate the BTCC’s Wilson-Pakula
authority and, correspondingly, disable the
BTCC’s ability to raise funds for its political
purposes.” (Id. at ¶ 16.)
Defendant Walsh has been the Chairman
of the SCCP since 2006. (Id. ¶¶ 2, 22.) SCCP
is the governing body of the Suffolk County
Committee of the Conservative Party of New
York State. (Id. at ¶ 3.) SCCP “endorses
campaigns for and seeks the election of
political leaders” in state and national
elections. (Id. at ¶ 20.) After Walsh was
elected as Chairman of the SCCP, he caused
the political committees of the Suffolk
County Conservative Chairman’s Club
(“SCCCC”) and the Suffolk County
Conservative Chairman’s Committee H.K.
(“SCCCHK”) to be formed; both are
controlled by Walsh. (Id. at ¶¶ 23-24.) Article
5 of SCCP’s rules, regulations, and bylaws
provides that the County Executive
Committee members are empowered to
authorize, designate, and nominate a
candidate for public office and act as the
representative and agent on behalf of the
SCCP. (Id. at ¶ 15.)
Specifically, plaintiff alleges that, on or
about February 9, 2010, Frank Profeta, CoChairman of BTCC’s Executive Committee,
told Walsh that plaintiff wished to “screen the
County Legislative Candidates whose
jurisdiction was solely in Brookhaven
Town.” (Id. at ¶ 47.) Plaintiff alleges that
Walsh expressly threatened Profeta that, if he
made such a request again, Walsh could
“pull” plaintiff’s Wilson-Pakula authority,
and in response, plaintiff did not screen any
County Legislative Candidates. (Id.) Plaintiff
further alleges that, between February 9,
2010, and September 2014, Profeta attempted
to schedule local Town Conservative Party
fundraisers on BTCC’s behalf, but upon
learning of the fundraisers, Walsh demanded
that the fundraisers be cleared with him and
directed that certain fundraisers not be held
so that they did not compete with SCCP’s
fundraisers; plaintiff complied with these
demands. (Id. at ¶ 48.) In the spring of 2014,
Profeta objected to Walsh’s selection of his
friend (Senft) to run for a vacant New York
State Senatorial seat in the 3rd Senatorial
District, which is comprised largely of
Brookhaven. (Id. at ¶ 49.) Plaintiff alleges
that, in response, Walsh told him that
“despite there being no screening by the
Executive Committee of the SCCP or its
members, Senft was the candidate and
everyone better get in line.” (Id.) The SCCP
did not screen other candidates or challenge
the endorsement. (Id.) Around September
2014, Profeta again met with Walsh and
complained that there were no screenings for
all offices of the New York State Senate and
Assembly. (Am. Compl. at ¶ 50.) Plaintiff
alleges that, in response, Walsh told him that
“other members of the Suffolk County
Wilson-Pakula authorization is an
authorization given by a political party to a
candidate for public office in New York that
allows a candidate not registered with that
party to run as its candidate in a given
election. (Id. at ¶ 13.) The Wilson-Pakula Act
of 1947 is codified in New York State
Election Law § 6-120, which forbids
candidates from receiving the nomination of
a political party unless they receive
permission to enter the primary from party
officials representing a majority of the vote in
the jurisdiction. (Id.) Plaintiff alleges that
Walsh has “explicitly and implicitly
threatened that, unless the BTCC abided by
his arbitrary decisions as to which candidates
would appear on the ballot as Conservative
Committee Candidates, cease from raising
funds except with his explicit permission and
2
Executive Committee were upset with the
Brookhaven Town Executive Committee”
and that plaintiff could have a problem with
its Wilson-Pakula authorization. (Id.) In
response, plaintiff did not screen any
candidates. (Id.)
SCCP, which has Wilson-Pakula authority,
rather than plaintiff, which lacks WilsonPakula authority. (Id. at ¶ 17.)
During a Suffolk County Conservative
Party Executive Committee meeting around
2009, Walsh placed a resolution on the record
that granted him a $65,000 annual stipend;
the resolution passed by a unanimous vote.
(Id. at ¶ 25.) At least twice a year since
becoming Chairman, Walsh has sent
fundraising announcements to members of all
town committees and other registered
conservatives. (Id. at ¶¶ 27, 66-70.) Walsh
uses the SCCP’s official seal and party
mailing list to advertise and fundraise. (Id. at
¶ 28.) Plaintiff alleges that invitations for
these fundraisers state that checks should be
made out to the Suffolk County Conservative
Chairman’s Club, which is a committee that
was never authorized by the SCCP’s
Executive Committee members or by any
bylaw, rule, or regulation of the SCCP. (Id. at
¶¶ 66-70.) Plaintiff alleges that the money
received through these fundraisers are
deposited into the bank accounts of either the
SCCCHK or SCCCC, which are under
Walsh’s control, and the SCCP stipend is
paid through these contributions. (Id. at ¶¶
34-35.) Plaintiff’s members have contributed
funds to these fundraisers. (Id. at ¶ 32.)
Plaintiff alleges that Walsh receives other
funds personally or otherwise for his benefit
through SCCCHK and SCCCC that were
never authorized by the Executive
Committee, such as $1,117.00 per month for
his car, gas reimbursement, insurance
reimbursement, and miscellaneous office
expenses. (Id. at ¶¶ 36-37, 71.) Plaintiff
alleges that, during 2013 and 2014, the
majority of SCCCHK and SCCCC’s
expenditures were for Walsh’s personal
benefit; specifically, SCCCHK’s July 2014
disclosure to the New York State Board of
Elections showed that of the $44,950.13 in
total expenditures, $41,711.87 was used for
Walsh’s personal benefit. (Id. at ¶ 72.)
Plaintiff further alleges that, on or about
August 25, 2014, Walsh listened to a private,
invitation-only
telephone
conference
between members of BTCC’s Executive
Committee in order to gather information,
which he “used to undermine and weaken the
BTCC and its members through coercion and
intimidation and to unlawfully strip the
BTCC of its lawful right to select, screen, and
fund raise for its candidates.” (Id. at ¶ 60.)
On or about September 16, 2014, a reorganizational meeting was held for the
SCCP at which Walsh was re-elected as
Chairman. (Id. at ¶ 51.) Walsh then noticed a
meeting to determine which towns in Suffolk
County would be granted Wilson-Pakula
authority. (Id.) Plaintiff alleges that, prior to
the meeting, Walsh spoke to most members
of the Executive Committee, except those
from Brookhaven Town, and directed them to
vote to deny plaintiff its Wilson-Pakula
authority. (Id.) Plaintiff further alleges that,
on or about September 10, 2014, Walsh sent
proxies pre-printed with his name on them so
that he could use the votes to deny plaintiff’s
Wilson-Pakula authority. (Id. at ¶ 59.)
On or about October 8, 2014, the SCCP
Executive Committee denied plaintiff its
Wilson-Pakula authority. (Id. at ¶ 52.)
Except for Brookhaven, all other organized
town committees were granted WilsonPakula authority. (Id. at ¶ 89.) Plaintiff
alleges that the loss of its Wilson-Pakula
authority will both hinder its ability to raise
funds and benefit defendants because anyone
wishing to donate to the Conservative Party
in order to benefit candidates in Brookhaven
Township will be compelled to donate to
3
B.
a complaint contains “well-pleaded factual
allegations, a court should assume their
veracity and then determine whether they
plausibly give rise to an entitlement to relief.”
Id. A claim has “facial plausibility when the
plaintiff pleads factual content that allows the
court to draw the reasonable inference that
the defendant is liable for the misconduct
alleged. The plausibility standard is not akin
to a ‘probability requirement,’ but it asks for
more than a sheer possibility that a defendant
has acted unlawfully.” Id. at 678 (quoting and
citing Twombly, 550 U.S. at 556-57 (internal
citation omitted)).
Procedural Background
Plaintiff filed its Complaint on October
17, 2014 and its Amended Complaint on
November 24, 2014. Defendants moved to
dismiss on March 13, 2015. Plaintiff opposed
on April 27, 2015. Defendants replied on
May 11, 2015. The Court held oral argument
on July 30, 2015. The Court has fully
considered the parties’ submissions.
II.
STANDARD OF REVIEW
In reviewing a motion to dismiss pursuant
to Federal Rule of Civil Procedure 12(b)(6),
the Court must accept the factual allegations
set forth in the complaint as true and draw all
reasonable inferences in favor of the plaintiff.
See Cleveland v. Caplaw Enters., 448 F.3d
518, 521 (2d Cir. 2006); Nechis v. Oxford
Health Plans, Inc., 421 F.3d 96, 100 (2d Cir.
2005). “In order to survive a motion to
dismiss under Rule 12(b)(6), a complaint
must allege a plausible set of facts sufficient
‘to raise a right to relief above the speculative
level.’” Operating Local 649 Annuity Trust
Fund v. Smith Barney Fund Mgmt. LLC, 595
F.3d 86, 91 (2d Cir. 2010) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555
(2007)). This standard does not require
“heightened fact pleading of specifics, but
only enough facts to state a claim to relief that
is plausible on its face.” Twombly, 550 U.S.
at 570.
The Court notes that in adjudicating a
Rule 12(b)(6) motion, it is entitled to
consider: “(1) facts alleged in the complaint
and documents attached to it or incorporated
in it by reference, (2) documents ‘integral’ to
the complaint and relied upon in it, even if
not attached or incorporated by reference, (3)
documents or information contained in
defendant’s motion papers if plaintiff has
knowledge or possession of the material and
relied on it in framing the complaint, (4)
public disclosure documents required by law
to be, and that have been, filed with the
Securities and Exchange Commission, and
(5) facts of which judicial notice may
properly be taken under Rule 201 of the
Federal Rules of Evidence.” In re Merrill
Lynch & Co., 273 F. Supp. 2d 351, 356-57
(S.D.N.Y. 2003) (internal citations omitted),
aff’d in part and reversed in part on other
grounds sub nom. Lentell v. Merrill Lynch &
Co., 396 F.3d 161 (2d Cir. 2005), cert.
denied, 546 U.S. 935 (2005); see also Cortec
Indus., Inc. v. Sum Holding L.P., 949 F.2d 42,
48 (2d Cir. 1991) (“[T]he district court . . .
could have viewed [the documents] on the
motion to dismiss because there was
undisputed notice to plaintiffs of their
The Supreme Court clarified the
appropriate pleading standard in Ashcroft v.
Iqbal, setting forth a two-pronged approach
for courts deciding a motion to dismiss. 556
U.S. 662 (2009). The Supreme Court
instructed district courts to first “identify[ ]
pleadings that, because they are no more than
conclusions, are not entitled to the
assumption of truth.” Id. at 679 (explaining
that though “legal conclusions can provide
the framework of a complaint, they must be
supported by factual allegations”). Second, if
4
contents and they were integral to plaintiffs’
claim.”).
III.
Mortg. Capital, Inc. v. Kontogiannis, 726 F.
Supp. 2d 225, 236 (E.D.N.Y. 2010) (citing 18
U.S.C. § 1964(c)). Specifically, RICO
provides a private cause of action for “[a]ny
person injured in his business or property by
reason of a violation of section 1962 of this
chapter.” 18 U.S.C. § 1964(c).
DISCUSSION
Defendants move to dismiss, arguing that
(1) the Amended Complaint raises only nonjusticiable political questions; (2) plaintiff
lacks standing; (3) plaintiff fails to state a
claim for a civil RICO violation; and (4)
plaintiff fails to state a claim for breach of
contract. For the reasons set forth below, the
Court concludes, that plaintiff fails to state a
claim for a civil RICO violation and, thus,
dismisses plaintiff’s amended complaint.
However, in an abundance of caution, the
court will give plaintiff an opportunity to
replead.
A.
“To establish a civil RICO claim [under
18 U.S.C. § 1964(c)], a plaintiff must allege
‘(1) conduct, (2) of an enterprise, (3) through
a pattern (4) of racketeering activity,’ as well
as ‘injury to business or property as a result
of the RICO violation.’” Lundy v. Catholic
Health Sys. of Long Island Inc., 711 F.3d 106,
119 (2d Cir. 2013) (quoting Anatian v. Coutts
Bank Ltd., 193 F.3d 85, 88 (2d Cir. 1999)).
“The pattern of racketeering activity must
consist of two or more predicate acts of
racketeering.” Id. (citing 18 U.S.C. §
1961(5)). Racketeering activity is defined as
“any act which is indictable” under specified
provisions of Title 18, including mail fraud,
wire fraud, extortion, and bank fraud. 18
U.S.C. § 1961(1)(B).
RICO
Defendants argue that plaintiff’s
Amended Complaint fails to allege any of the
necessary elements of a RICO claim. As a
threshold matter, defendants argue that
plaintiff’s RICO claim fails because plaintiff
has not alleged a cognizable injury. For the
reasons explained in detail below, the Court
agrees that plaintiff fails to allege a
cognizable injury under RICO and, thus,
concludes that its RICO claim must be
dismissed.
“Standing” under RICO, for purposes of
a motion to dismiss, is not a jurisdictional
concept, but instead is analyzed as a merits
issue under Federal Rule of Civil Procedure
12(b)(6). See Lerner v. Fleet Bank, N.A., 318
F.3d 113, 116-17, 129-30 (2d Cir. 2003)
(“We hold that lack of RICO standing does
not divest the district court of jurisdiction
over the action, because RICO standing,
unlike other standing doctrines, is
sufficiently intertwined with the merits of the
RICO claim that such a rule would turn the
underlying
merits
questions
into
jurisdictional issues. . . . In sum, despite
describing
the
proximate
causation
requirement as ‘RICO standing,’ such
standing is not jurisdictional in nature under
Fed. R. Civ. P. 12(b)(1), but is rather an
element of the merits addressed under a Fed.
R. Civ. P. 12(b)(6) motion for failure to state
1. Legal Standard
Under RICO, it is “unlawful for any
person employed by or associated with any
enterprise engaged in, or the activities of
which affect, interstate or foreign commerce,
to conduct or participate, directly or
indirectly, in the conduct of such enterprise’s
affairs through a pattern of racketeering
activity or collection of unlawful debt.” 18
U.S.C. § 1962(c). “When § 1962 is violated,
in addition to criminal penalties, the RICO
statutes also authorize civil lawsuits, which,
if successful, can entitle a plaintiff to treble
damages, costs, and attorney’s fees.” DLJ
5
a claim.”). The Second Circuit has described
RICO standing as “a more rigorous matter
than standing under Article III.” Denney v.
Deutsche Bank AG, 443 F.3d 253, 266 (2d
Cir. 2006).
Although civil RICO presents many
hurdles for a plaintiff to overcome, the
Supreme Court has also “made clear that it
would not interpret civil RICO narrowly.”
Attorney Gen. of Canada v. R.J. Reynolds
Tobacco Holdings, Inc., 268 F.3d 103, 139
n.6 (2d Cir. 2001) (citing Sedima, S.P.R.L. v.
Imrex Co., 473 U.S. 479 (1985)). In Sedima,
the Supreme Court rejected an interpretation
of civil RICO that would have confined its
application to “mobsters and organized
criminals.” 473 U.S. at 499. Instead, the
Court held: “The fact that RICO has been
applied in situations not expressly anticipated
by Congress does not demonstrate ambiguity.
It demonstrates breadth.” Id. (internal citation
and quotation marks omitted); see also Anza
v. Ideal Steel Supply Corp., 547 U.S. 451, 479
(2006) (Breyer, J., concurring in part and
dissenting in part) (“RICO essentially seeks
to prevent organized criminals from taking
over or operating legitimate businesses. Its
language, however, extends its scope well
beyond those central purposes.”). Thus, a
court should not dismiss a civil RICO claim
if the complaint adequately alleges all
elements of such a claim, even if the alleged
conduct is not a quintessential RICO activity.
Courts have described civil RICO as “‘an
unusually potent weapon—the litigation
equivalent of a thermonuclear device.’”
Katzman v. Victoria’s Secret Catalogue, 167
F.R.D. 649, 655 (S.D.N.Y. 1996) (quoting
Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44
(1st Cir. 1991)), aff’d, 113 F.3d 1229 (2d Cir.
1997). “Because the ‘mere assertion of a
RICO claim . . . has an almost inevitable
stigmatizing effect on those named as
defendants, . . . courts should strive to flush
out frivolous RICO allegations at an early
stage of the litigation.’” Id. (quoting
Figueroa Ruiz v. Alegria, 896 F.2d 645, 650
(1st Cir. 1990)); see also DLJ Mortg. Capital,
726 F. Supp. 2d at 236. Indeed, although civil
RICO may be a “potent weapon,” plaintiffs
wielding RICO almost always miss the mark.
See Gross v. Waywell, 628 F. Supp. 2d 475,
479-83 (S.D.N.Y. 2009) (conducting survey
of 145 civil RICO cases filed in the Southern
District of New York from 2004 through
2007, and finding that all thirty-six cases
resolved on the merits resulted in judgments
against the plaintiffs, mostly at the motion to
dismiss stage). Accordingly, courts have
expressed skepticism toward civil RICO
claims. See, e.g., DLJ Mortg. Capital, 726 F.
Supp. 2d at 236 (“[P]laintiffs have often been
overzealous in pursuing RICO claims,
flooding federal courts by dressing up run-ofthe-mill fraud claims as RICO violations.”).
2. Application
Here, plaintiff has attempted to allege
RICO violations with racketeering, mail
fraud, and wire fraud as the alleged predicate
acts underlying these violations. (See Am.
Compl. ¶ 41.) As a result of defendants’
alleged RICO violations, plaintiff claims to
have suffered injury through the loss of its
Wilson-Pakula authorization.1 For the
Pakula authorization. (See, e.g., Pl.’s Opp. at 10
(“Plaintiff’s allegation herein is that they have suffered
the loss of the Wilson Pakula and that has injured them
both in their business and with that of a Town
Committee and property by virtue of affecting their
ability to fund raise.”).) Accordingly, the Court
considers any such injuries as a part of the injury
alleged in the loss of the Wilson-Pakula authorization.
1
Plaintiff makes reference to sustaining an injury
through “the elimination of its ability to successfully
raise funds for candidates or for purposes of the
Brookhaven Town Conservative Committee” and “its
restrictive ability to hold fundraisers.” (Pl.’s Opp. at
8.) However, the Amended Complaint and plaintiff’s
opposition make clear that such “injuries” were tied to
threats regarding the potential loss of its Wilson-
6
Conservative Committee’s Rules and
Regulations provide that “[t]he County
Executive Committee is empowered to
authorize the designation, nomination, or
substitution of a person as a candidate for any
Public Office to be voted for solely within
Suffolk County who is not enrolled as a
member of the Conservative Party, EXCEPT
as may be provided for within this Article
regarding the Town elections for Public
Office.” (Ex. B to Hill Decl. at Art. V § 1
(emphasis added)). The Rules elaborate that
the “County Executive Committee shall hold
an Official Organization Meeting within
thirty (30) days of the County Committee
Organizational Meeting for the purpose of
voting on conferring authority to Town
Committees and/or Town Executive
Committees defined in these Rules and
Regulations empowering said towns to
authorize the designation, nomination, or
substitution of a person as a candidate for any
Town public office.” (Id. at Art. V § 3.) The
Rules further provide that “[a]t any time, the
County Executive Committee may, by
majority vote, revoke said Wilson Pakula
authority from any Town Committee” and
that the County Executive Committee “shall
retain full authority to authorize . . .
candidates for Public Office who are not
enrolled members of the Conservative Party
for . . . any town-wide elected positions in
townships where local authorization
authority has [ ] not been conferred pursuant
to this section.” (Id.) Accordingly, the
Suffolk County Conservative Committee’s
Rules and Regulations clearly provide that
the discretion to grant Wilson-Pakula
authority to individual town committees rests
with the County Executive Committee.
Because the Committee’s Rules and
Regulations “do not conflict with Election
Law § 6-120(3), they must be respected by
reasons that follow, the Court concludes that
this alleged injury fails to provide plaintiff
with statutory standing under RICO.
A plaintiff has standing to bring a RICO
claim only if he has been injured in his
business or property by the conduct
constituting the RICO violation and only
when his actual loss is clear and definite. See
Denney, 443 F.3d at 266; see also Sky Med.
Supply Inc. v. SCS Support Claims Servs.,
Inc., 17 F. Supp. 3d 207, 231 (E.D.N.Y.
2014) (same); Westchester Cty. Indep. Party
v. Astorino, No. 13-CV-7737 (KMK), 2015
WL 5883718, at *17 (S.D.N.Y. Oct. 8, 2015)
(collecting cases).
Here, plaintiff lacks standing to bring a
RICO claim because it has alleged no injury
to its business or property. Although plaintiff
claims it was injured through the loss of its
Wilson-Pakula authority, such a claim
ignores the simple fact that plaintiff had no
right to the Wilson-Pakula authority in the
first place. Cf. Cty. of Hudson v. Janiszewski,
520 F. Supp. 2d 631, 653 (D.N.J. 2007), as
amended (Nov. 5, 2007), aff’d, 351 F. App’x
662 (3d Cir. 2009) (finding plaintiff failed to
allege RICO injury based on county’s
discretionary decision not to renew public
contract with him).
Under New York Election Law,
certificates of authorization are required in
order that individuals who are not party
members may appear on the party’s ballot.
N.Y. Elec. Law § 6-120; see also Master v.
Pohanka, 10 N.Y.3d 620, 624-25 (N.Y.
2008); Francisco v. Borden, 545 N.Y.S.2d
401, 402 (N.Y. App. Div. 1989). These
certificates of authorization must be issued
by “members of the party committee
representing the political subdivision of the
office for which a designation or nomination
is to be made, unless the rules of the party
provide for another committee.” N.Y. Elec.
Law § 6-120(3). The Suffolk County
7
the courts and given effect.” Pohanka, 10
N.Y.3d at 625-26.
exceptional circumstances,’ where federal
claims can be disposed of pursuant to Rule
12(b)(6) or summary judgment grounds,
courts should ‘abstain from exercising
pendent jurisdiction.’” Birch v. Pioneer
Credit Recovery, Inc., No. 06-CV-6497T,
2007 WL 1703914, at *5 (W.D.N.Y. June 8,
2007) (quoting Walker v. Time Life Films,
Inc., 784 F.2d 44, 53 (2d Cir. 1986)).
Thus, because the decision whether to
grant or withhold Wilson-Pakula authority to
a town committee is a discretionary
determination permissibly vested in the
County Executive Committee, plaintiff does
not have a “right” to Wilson-Pakula
authority. See Miller v. Meisser, 22 N.Y.2d
318, 320 (N.Y. 1968) (holding that county
committee “unquestionably retained unto
itself the power to designate candidates”
within the district when it chose not to
delegate its authority to a “lesser committee”
within the district). As such, plaintiff has
failed to adequately allege that it suffered an
injury when it was denied Wilson-Pakula
authorization and, thus, lacks standing to
bring a RICO claim.2 Therefore, plaintiff’s
claim under 18 U.S.C. § 1964(c) is dismissed.
B.
Therefore, in the instant case, the Court,
in its discretion, “‘decline[s] to exercise
supplemental jurisdiction’” over plaintiff’s
state law claim because “it ‘has dismissed all
claims over which it has original
jurisdiction.’” Kolari v. N.Y.-Presbyterian
Hosp., 455 F.3d 118, 122 (2d Cir. 2006)
(quoting 28 U.S.C. § 1367(c)(3)); see also
Cave v. E. Meadow Union Free Sch. Dist.,
514 F.3d 240, 250 (2d Cir. 2008) (“We have
already found that the district court lacks
subject matter jurisdiction over appellants’
federal claims. It would thus be clearly
inappropriate for the district court to retain
jurisdiction over the state law claims when
there is no basis for supplemental
jurisdiction.”); Karmel v. Claiborne, Inc.,
No. 99-CV-3608 (WK), 2002 WL 1561126,
at *4 (S.D.N.Y. July 15, 2002) (“Where a
court is reluctant to exercise supplemental
jurisdiction because of one of the reasons put
forth by § 1367(c), or when the interests of
judicial economy, convenience, comity and
fairness to litigants are not violated by
refusing to entertain matters of state law, it
should decline supplemental jurisdiction and
Breach of Contract
Plaintiff also alleges breach of contract
under New York law, claiming that
defendants breached the rules and regulations
of the Suffolk County Conservative
Committee when it denied plaintiff WilsonPakula
authority.
However,
having
determined that plaintiff’s federal claim does
not survive defendants’ motion to dismiss,
the Court concludes that retaining
jurisdiction over any state law claim is
unwarranted. 28 U.S.C. § 1367(c)(3); United
Mine Workers of Am. v. Gibbs, 383 U.S. 715,
726 (1966). “In the interest of comity, the
Second Circuit instructs that ‘absent
2
To the extent that plaintiff claims that it suffered
injury based on a loss of diverted funds, the only
reference in the Amended Complaint to such an
allegation is that “plaintiff, BTCC, reasonably
believed and was fraudulently induced to believe by
the defendant Walsh, that the funds donated by the
BTCC, would be used for purposes of promoting
conservative candidates in the Town of Brookhaven
and throughout Suffolk County when they were used
instead for his personal gain.” (Am. Compl. ¶ 33.)
Such an allegation is unclear and conclusory. Further,
at oral argument, when the Court asked plaintiff’s
counsel if there were any allegations in the Amended
Complaint that plaintiff wrote a check on a certain
date, from which funds were diverted, plaintiff’s
counsel admitted that the Amended Complaint did not
include such specific allegations. If plaintiff is
claiming injury based on a loss of diverted funds,
plaintiff must file a second amended complaint that
more fully sets forth such a theory of RICO injury.
8
allow the plaintiff to decide whether or not to
pursue the matter in state court.”).
diversion of its funds. As the Court has
discussed, given that it may be possible to
allege a RICO injury based upon an alleged
diversion of plaintiff’s funds, the Court will
provide plaintiff with an opportunity, if it
wishes, to replead a non-conclusory RICO
claim under that theory. Although it is
entirely unclear that plaintiff could plausibly
allege all of the elements of a civil RICO
claim under this theory, the Court, in an
abundance of caution, will give plaintiff the
opportunity to attempt to do so, if it wishes.
Accordingly, pursuant to 28 U.S.C.
§ 1367(c)(3), the Court declines to retain
jurisdiction over the remaining state law
claim against defendants given the absence of
any federal claim against them that survive
the motion to dismiss, and dismisses
plaintiff’s state law claim without prejudice.
IV.
LEAVE TO AMEND
Having concluded that plaintiff has failed
to state a plausible federal claim, the Court
has considered whether it should be afforded
an opportunity to amend its complaint for a
second time. Rule 15(a)(2) of the Federal
Rules of Civil Procedure provides that a party
shall be given leave to amend “when justice
so requires.” “Leave to amend should be
freely granted, but the district court has the
discretion to deny leave if there is a good
reason for it, such as futility, bad faith, undue
delay, or undue prejudice to the opposing
party.” Jin v. Metro. Life Ins. Co., 310 F.3d
84, 101 (2d Cir. 2002); see Local 802, Assoc.
Musicians of Greater N.Y. v. Parker
Meridien Hotel, 145 F.3d 85, 89 (2d Cir.
1998) (finding that leave to amend may be
denied based upon the “futility of
amendment”). As to futility, “leave to amend
will be denied as futile only if the proposed
new claim cannot withstand a 12(b)(6)
motion to dismiss for failure to state a claim,
i.e., if it appears beyond doubt that the
plaintiff can plead no set of facts that would
entitle [it] to relief.” Milanese v. Rust-Oleum
Corp., 244 F.3d 104, 110 (2d Cir. 2001)
(citing Ricciuti v. N.Y.C. Transit Auth., 941
F.2d 119, 123 (2d Cir. 1991)).
V.
CONCLUSION
For the foregoing reasons, the Court
grants defendants’ motion to dismiss the
federal claim. Given the dismissal of
plaintiff’s federal claim, the Court declines to
exercise supplemental jurisdiction over
plaintiff’s state law claim for breach of
contract and, thus, dismisses this claim
without prejudice. Any amended complaint
must be filed within 30 days of this
Memorandum and Order.
SO ORDERED.
______________________
JOSEPH F. BIANCO
United States District Judge
Dated:
March 23, 2015
Central Islip, NY
***
Plaintiff is represented by Thomas G.
Teresky, 191 New York Avenue,
Huntington, New York 11743. Defendants
are represented by Vincent J. Messina, Jr.,
and Timothy F. Hill of Sinnreich, Kosakoff
& Messina LLP, 267 Carleton Avenue, Suite
301, Central Islip, New York 11722.
Although the amended complaint lacks
sufficient allegations to articulate a plausible
civil RICO claim, plaintiff may be able to
cure these defects with additional factual
allegations with respect to the alleged
9
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