The New York Bankers Association, Inc. v. The City of New York et al
Filing
48
OPINION AND ORDER re: 17 MOTION to Dismiss filed by The Council of the City of New York: Plaintiff has failed to demonstrate that it had standing to pursue its claims at the time the action was filed. Accordingly, this action is dismissed without prejudice. Defendant Council's motion to dismiss is GRANTED. The Clerk of Court is directed to terminate the remaining motions and to mark this case as closed. (Signed by Judge Katherine Polk Failla on 9/9/2014) (tn)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
NEW YORK BANKERS ASSOCIATION,
:
INC.,
:
:
Plaintiff,
:
:
v.
:
:
CITY OF NEW YORK, et al.,
:
:
Defendants. :
:
---------------------------------------------------- X
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
September 9, 2014
DATE FILED: ______________
13 Civ. 7212 (KPF)
OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge:
Plaintiff New York Bankers Association (“NYBA”) initiated this action on
October 11, 2013, seeking (i) a declaratory judgment that City Local Law 38 for
the Year 2012 (“LL 38”), entitled the “Responsible Banking Act,” was preempted
by federal and state law; and (ii) a permanent injunction prohibiting the
implementation of LL 38. Plaintiff now moves for summary judgment on its
claims. By contrast, Defendant Council of the City of New York (the “Council”)
moves to dismiss the Complaint on the grounds that Plaintiff does not have
standing to pursue its claims, that its claims are not ripe, and that LL 38 is not
preempted. For the reasons discussed in the remainder of this Opinion, the
Court grants the Council’s motion to dismiss the Complaint because Plaintiff
lacks standing to pursue the claims it raised in October 2013, and denies as
moot Plaintiff’s motion for summary judgment.
BACKGROUND
A.
Factual Background 1
Plaintiff NYBA is an association of approximately 140 commercial banks
and federal savings associations located in New York State. (Compl. ¶ 8).
NYBA’s members include national banks chartered pursuant to the National
Bank Act of 1864 (‘‘NBA”), ch. 106, 13 Stat. 99 (codified as amended in
scattered sections of Titles 12, 19, and 31 of the United States Code); federal
savings associations chartered pursuant to the Home Owners’ Loan Act of 1933
(“HOLA”), Pub. L. No. 73-43, 48 Stat. 128 (codified as amended at 12 U.S.C.
§§ 1461-1470); and commercial and thrift depository institutions chartered
pursuant to the New York Banking Law (“NYBL”). (Id.). Several NYBA
members serve as depositories for the funds of the City of New York (the “City”).
(Id. at ¶ 9).
1.
The City Deposit System
The New York City Banking Commission (the “Banking Commission”)
was created in 1873 under the City Charter. (Compl. Ex. 3; N.Y.C. Charter
§ 1524(1)). The members of the Banking Commission are the Mayor of the City
(the “Mayor”), the City Comptroller (the “Comptroller”), and the Commissioner
of the City Department of Finance (“DOF”). (Id.). Among other things, the
1
The facts alleged herein are drawn from the Complaint (“Compl.”) (Dkt. #1), and the
materials attached thereto. For convenience, the parties’ briefs in connection with the
motion to dismiss will be referred to as “Council Br.”; “Pl. Opp.”; and “Council Reply.”
The parties’ briefs in connection with the motion for summary judgment will be referred
to as “Pl. Br.”; “Council Opp.”; and “Pl. Reply.” Lastly, transcripts of proceedings
occurring before the Court will be referred to as “[Month] [Day] Tr.”
2
Banking Commission is responsible for designating which banks and savings
associations may hold the City’s funds. (Id.; see also N.Y.C. Charter § 1524(1)
(the Banking Commission “designate[s] the banks or trust companies in which
all moneys of the city shall be deposited, and may by like notice in writing [to
the Commissioner of the DOF] from time to time change the banks and trust
companies thus designated”)). Only institutions designated as deposit banks,
or New York City Designated Banks (“Designated Banks”), by the Banking
Commission may hold City funds. (Compl. Ex. 3).
To become a Designated Bank, an institution must submit an application
that includes audited financial statements, historical financial information, an
overview of the current managerial structure, its most recent federal
Community Reinvestment Act rating, 2 and other detailed information. (Compl.
Ex. 3). In addition, an institution must have a physical presence in the City.
(Id.). As of May 2013, there were 25 Designated Banks, 17 of which were NYBA
members. (Id.; Compl. Ex. 2).
2.
Local Law 38 and Its Enactment
Plaintiff seeks to have LL 38 declared preempted by federal and state
banking laws. While the legislative history of LL 38 is relevant to the issue of
2
The federal Community Reinvestment Act (“CRA”), Pub. L. 95-128, 91 Stat. 1147 (1977)
(codified as amended at 12 U.S.C. §§ 2901-2908), provides that “regulated financial
institutions have [a] continuing and affirmative obligation to help meet the credit needs
of the local communities in which they are chartered.” 12 U.S.C. § 2901(a)(3). To this
end, the CRA “provides that a federal regulatory agency must ‘assess the institution’s
record of meeting the credit needs of its entire community, including low- and
moderate-income neighborhoods ... and ... take such record into account in its
evaluation of an application for a deposit facility by such institution.’” Lee v. Bd. of
Governors of the Fed. Reserve Sys., 118 F.3d 905, 909 (2d Cir. 1997) (quoting 12 U.S.C.
§ 2903(a)(1) & (2)).
3
Plaintiff’s preemption claims, it is decidedly less relevant to the issue of
whether Plaintiff has standing to pursue those claims. Because the Court need
not, and does not, reach the issue of preemption, it need not discuss the
legislative history of LL 38. Accordingly, it will suffice here to state that LL 38
was passed by the Council on June 28, 2012, over the May 30, 2012 veto of
then-Mayor Michael R. Bloomberg. (Compl. Ex. 11, 12, 15).
LL 38 has several components. Principally, LL 38 establishes a
Community Investment Advisory Board (“CIAB”), comprised of eight members:
(i) the Mayor or his designee; (ii) the Comptroller or his designee; (iii) the
Council Speaker (the “Speaker”) or her designee; (iv) the Commissioner of the
Department of Housing Preservation and Development; (v) the Commissioner of
the DOF; (vi) a member of a community-based organization ‘‘whose principal
purpose is community and/or economic development, or consumer protection”
designated by the Speaker; (vii) a representative of an organization or
association that represents small business owners designated by the Speaker;
and (viii) a representative of the City banking industry designated by the
Mayor. (LL 38 sec. 1, subdiv. 2). The members of the CIAB were to have been
appointed within 60 days of the date LL 38 took effect, or by August 27, 2012.
(Id.) As of the filing of the Complaint, and as of August 19, 2014, the CIAB had
not been fully appointed and had not convened a meeting. (Aug. 19 Tr. 6-8). 3
3
At oral argument, the Court inquired of the parties whether, under LL 38 or some other
authority, the CIAB could meet and/or take action before all of the constituent
appointments had been filled. Counsel for the City was uncertain; counsel for the
Council expressed doubts that either could occur; and counsel for NYBA expressed
concern that the CIAB could take action with a majority of the members appointed.
(Aug. 19 Tr. 6-9, 10-12). Counsel for the three parties offered similar responses to the
4
The CIAB has three primary functions. First, it is tasked with completing
a needs assessment. Specifically, the CIAB must assess the “credit, financial
and banking services needs throughout the City with a particular emphasis on
low and moderate income individuals and communities” (the “Needs
Assessment”). (LL 38 sec. 1, subdiv. 1(a)). To achieve this goal, the CIAB must
(i) convene “at least one public hearing in each borough of the city”;
(ii) “accept[], review[], and consider[] public comments which describe the
nature and extent of such needs”; and (iii) consider certain data and
information pertaining to the City’s deposit banks. (Id.). The first Needs
Assessment was to have been published on the DOF’s website by no later than
March 1, 2014. (Id.). As of the filing of the Complaint, and as of August 19,
2014, no Needs Assessment had been published. (Aug. 19 Tr. 6-8, 24-25).
To complete the Needs Assessment, the CIAB is specifically tasked with
collecting information at the “census tract level” relating to each deposit bank’s
efforts to: (i) address the “key credit and financial services needs of small
businesses”; (ii) develop and offer financial services and products that are
“most needed by low and moderate income individuals and communities
throughout the city,” as well as provide physical branches; (iii) provide funding
for “affordable housing and economic development projects in low and
moderate income communities”; (iv) address “serious material and health and
Court’s inquiry as to whether the CIAB could act before a contract was awarded
pursuant to a July 21, 2014 Request for Proposals (the “July 2014 RFP”) to provide
drafting and analytical services to the CIAB. Such information remains of interest to
the Court on particular issues of standing and ripeness, but is ultimately not relevant
to the standing analysis undertaken in this Opinion.
5
safety deficiencies” in foreclosed and bank-owned properties; (v) “conduct
consumer outreach, settlement conferences, and similar actions relating to
mortgage assistance and foreclosure prevention,” and provide information at
the “community district level” to the CIAB regarding those efforts; (vi) “partner
in the community development efforts of the city”; (vii) “positively impact []the
city” through activities such as “philanthropic work and charitable giving”; and
(viii) plan for and articulate how the bank will respond to the “credit, financial
and banking services needs” identified in the Needs Assessment. (LL 38 sec. 1,
subdiv. 3). This information, “to the extent not deemed confidential or
proprietary,” was to have been published on the DOF’s website on or around
March 1, 2013, and no later than March 1, 2014. (Id.). As of the filing of the
Complaint, and as of August 19, 2014, no such information had been
requested, collected, or published. (Aug. 19 Tr. 2-6, 93).
Second, the CIAB must use the information it gathers to “establish
benchmarks, best practices, and recommendations for meeting the needs
identified” in the Needs Assessment. (LL 38 sec. 1, subdiv. 1(a)). As of the
filing of the Complaint, and as of August 19, 2014, no benchmarks had been
set forth. (Aug. 19 Tr. 2-6, 36).
Third, the CIAB must compile and publish a report of its findings (the
“CIAB Report”). The first such report was to have been published on the DOF
website and transmitted to the Banking Commission by March 1, 2015, and
each March 1 thereafter. (LL 38 sec. 1, subdiv. 1(b)). As of the filing of the
6
Complaint, and as of August 19, 2014, no such Report had been published.
(Aug. 19 Tr. 2-3, 93).
The CIAB Report must (i) evaluate how each deposit bank performed
“relative to the benchmarks and best practices” established by the CIAB;
(ii) identify “areas of improvement from past evaluations” as well as “areas
where improvement is necessary” by the deposit banks in relation to the CIAB’s
“benchmarks and best practices”; (iii) “specifically identif[y] any deposit bank’s
failure to provide information requested in writing by” the CIAB; (iv) summarize
any written comments submitted to the CIAB, and the role of those comments;
and (v) “summarize[], in tabular format, the data collected” from the deposit
banks, “to the extent not deemed confidential or proprietary by the bank,” at
the “community district, borough, and citywide levels of aggregation.” (LL 38
sec. 1, subdiv. 1(b)). Lastly, the Banking Commission “may” consider the CIAB
Report when evaluating whether to designate an institution as a deposit bank.
(Id.).
By letter dated May 30, 2012, Mayor Bloomberg vetoed LL 38. (Compl.
Ex. 11). Mayor Bloomberg described LL 38 as a “misguided” attempt to overlay
a third layer of regulation onto an already-existing regulatory landscape, and
expressed a concern that LL 38 went far beyond the purpose and purview of
the DOF. (Id.). The Mayor concluded that LL 38 was preempted by state and
federal law, and that the law was ultimately “duplicative and a waste of
taxpayer resources.” (Id.).
7
3.
The Stalled Efforts at Implementation of LL 38
On May 29, 2013, then-Speaker Christine Quinn wrote to Mayor
Bloomberg to ask him to complete his appointments to the CIAB. (Compl.
Ex. 14). Those appointments were to have been made by no later than August
27, 2012, but were not made. (See LL 38 Sec. 1, Subdiv. 2). Deputy Mayor
Robert Steel responded by noting that the Mayor believed LL 38 to serve no
proprietary purpose, and to in fact be “illegal” and preempted by state and
federal law. (Compl. Ex. 14). Accordingly, Mayor Bloomberg did “not intend to
make the appointment[s] provided for in Local Law 38.” (Compl. ¶ 30). Thus,
Plaintiff alleged in its Complaint that despite being passed in June 2012, as of
October 2013, “Local Law 38 has not yet been enforced because of the Mayor’s
opposition.” (Id.).
B.
The Instant Action
Plaintiff initiated the instant action on October 11, 2013. (Dkt. #1). In
support of its contention that an “actual and justiciable controversy” existed as
of October 2013, Plaintiff alleged that “[i]f Local Law 38 is upheld, NYBA
members will be forced to risk potential debarment or expend resources to
comply with the Law’s requirements. This Court’s judgment on the legal
validity of Local Law 38 will finalize the controversy and offer affected NYBA
banks relief from this uncertainty.” (See Compl. ¶¶ 58, 64, 73, 82). In support
of its motion for a permanent injunction, Plaintiff further alleged that its
members faced irreparable harm if LL 38 were enforced; specifically, NYBA
members would (i) “expend resources to comply with Local Law 38’s reporting
8
requirements”; (ii) may decide to “make certain types of loans and provide
services that conflict with what is required by governing federal and State law”;
(iii) “may lose the ability to be a depository for some of the City’s more than
$6 billion in deposits;” and (iv) “also suffer reputational harm.” (Id. at ¶ 85).
The parties promptly signaled their intention to move for summary
judgment or to dismiss the Complaint. (See Dkt. #10-12). The Court held a
pre-motion conference on November 15, 2013. Shortly before that conference,
on November 5, 2013, Bill de Blasio was elected Mayor.
At the November 15 conference, the City signaled its support for
Plaintiff’s motion, but noted that its position might change along with the
change in City administration. Specifically, counsel for the City stated that
“my directions at this point are in favor of the position that [Mayor Bloomberg]
took in his veto message that the law is preempted.” (Nov. 15 Tr. 24). When
asked if counsel would be “getting new directions in about seven weeks,” he
replied, “I’ll find out then. There will be a new mayor, there will be a new
corporation counsel, and I really don’t know until they are in place what
directions I’ll have at that time.” (Id.). Counsel stated that LL 38 was
“effectively stayed in the sense that the mayor is not implementing the law,”
but that counsel did not know what would happen after January 1, 2014, since
he didn’t “know what position the [new] mayor would take.” (Id. at 25).
A significant portion of the pre-motion conference was dedicated to the
issue of standing. Plaintiff again reiterated its argument that NYBA members
faced (i) the prospect of “having to spend money to try to comply with the law”;
9
(ii) the risk of reputational injury “when the City of New York will say that we
are not complying with their unique community lending standards”; as well as
(iii) possible debarment. (Nov. 15 Tr. 6, 9). As to the immediacy of those
harms, counsel acknowledged that “[o]bviously, Mayor Bloomberg is out of
office at the end of the year,” but opined that “[i]f a new mayor comes in, we
have every reason to believe that the new mayor will appoint members to the
CIAB,” and once that occurs, the CIAB will “go out and try to get this
information” from NYBA’s members. (Id. at 5-6). Counsel offered no evidence,
nor pointed to any factual allegations in the Complaint, in support of this
belief. Instead, counsel explained:
Really, what we are trying to do is bring our facial
challenge…. We believe we have standing, that we have
a threatened, realistic harm, it is not something
ephemeral. There is this board that is about to be
appointed. There is no question that Mayor Bloomberg
has not appointed the members, but certainly the city
council has been pressing to have the members
appointed. A new mayor is coming into office in six
weeks. When he [ap]points the board, the board will
presumably effectuate all of the requirements that are
in the statute, which include mandatory information
gathering, mandatory publication [of] the information,
and mandatory publication of judgments about banks
and their compliance with these city-mandated rules
which we think could conflict and will conflict with
federal and state rules. Your Honor, we think there is
no question we have standing.
(Id. at 11).
Pursuant to a briefing schedule endorsed by the Court at the November
15, 2013 conference, Plaintiff’s motion for summary judgment and the
Council’s motion to dismiss were each filed on December 16, 2013 (Dkt. #17,
10
19), and the City’s letter brief in support of Plaintiff’s motion for summary
judgment was filed on December 23, 2013 (Dkt. #27). Amici American Bankers
Association (in support of NYBA) and the Association for Neighborhood and
Housing Development, Legal Services-NYC, New Economy Project, and the
National Community Reinvestment Coalition (in support of the Council) filed
supporting briefs on January 8, 2014. (Dkt. #29, 30). Plaintiff and the Council
filed their opposition papers on January 27, 2014. (Dkt. #31, 34)
On February 5, 2014, counsel for the City wrote to request an extension
of time to file reply papers, in order to “allow time for the City to determine, in
consultation with the new Corporation Counsel Zachary W. Carter, whether its
position will change in this litigation,” since “Mr. Carter took office on February
1, 2014.” (Dkt. #36). The Court granted the parties until March 14, 2014, to
file their reply papers. (Dkt. #38). On February 28, 2014, counsel for the City
again wrote the Court to request an extension of time to file reply papers, in
order to allow the City “time to consider its position.” (Dkt. #39). The Court
granted that request. (Dkt. #40). By letter dated March 21, 2014, the City
notified the Court that the City had “reconsidered its position concerning the
validity of [LL 38] and now supports its validity.” (Dkt. #41). The letter further
noted that on December 23, 2013, the DOF had issued a
Request for Information [(“RFI”)] to identify potential
vendors with the capability to perform the information
gathering, needs assessment, and reporting services
that would be required to implement Local Law 38
should the law stand. A Request for Proposals would
be the next step in the process. DOF estimates that the
procurement process will likely take, at minimum, six
months from today before a contractor can be put in
11
place to begin performing the CIAB’s work. Therefore,
we hope that sufficient time exists for the Court to
render a decision before the CIAB begins taking actions
that NYBA has alleged will be harmful to its members.
We also anticipate that the Mayor will complete his
appointments to the CIAB.
(Id.).
Plaintiff and the Council filed their reply papers on April 4, 2014. (Dkt.
#42, 43). Plaintiff appended a copy of the December 23, 2013 RFI issued by
the DOF to its opposition papers. (See Suppl. Decl. of Matthew Schwartz,
Ex. 25). The RFI noted that information would be collected directly from the
City’s 25 deposit banks, and included a timeline with the following milestones:
(i) by March 2014, the Mayor would appoint the members of the CIAB; (ii) data
would be collected from April 2014 to October 2014; (iii) by November 1, 2014,
data would be posted to the DOF website, along with the first Needs
Assessment; (iv) between November 1-15, 2014, public comments would be
received by the CIAB; (v) a CIAB hearing would be held between December 115, 2014; (vi) by March 1, 2015, the CIAB would issue its first Report; and
(vii) on April 30, 2015, the Banking Commission would meet to evaluate
deposit bank applications. (Id.). The RFI requested any vendor responses to be
submitted by no later than January 28, 2014. (Id.).
The parties have introduced no evidence that any of these events have
taken place. To the contrary, the City’s March 21, 2014 letter indicates that a
number of them have not occurred as anticipated. (See Dkt. #41). 4 Indeed, the
4
Defendant Council argues that because the RFI was issued by Mayor Bloomberg,
approximately one week prior to the conclusion of his term, it is “meaningless” as to
12
Council admits that the implementation of LL 38 is “two years behind the
times” relative to the deadlines set forth in LL 38. (Aug. 19 Tr. 9).
By letter dated August 14, 2014, Plaintiff asked the Court to take judicial
notice of two documents recently published by the DOF: (i) the July 21 RFP,
which largely reiterated the deadlines for LL 38’s implementation set forth in
the December 23 RFI; and (ii) the City’s 2015 annual budget, which set aside
funds for the hiring of two staff members to oversee the expenditure “of
$350,000 for vendor services related to the production of analytical reports as
required under Local Law 38.” (Dkt. #45).
The Court held oral argument on August 19, 2014. In response to
questions regarding what had happened with respect to LL 38’s
implementation, the City and Council reported that the DOF expected to enter
into contract with a vendor in approximately November 2014; and to begin
interviewing applicants for the two new staff positions in September 2014.
(Aug. 19 Tr. 2-9). The CIAB had not convened, because while the Speaker had
completed her appointments to the CIAB, the Mayor had not completed his,
and the City did not know when those appointments would be completed. (Id.).
Accordingly, the Council reported its understanding that “LL 38 could not go
forward” unless and until: (i) the DOF hired its new staff members; (ii) a
contractor was selected pursuant to the RFP; and (iii) the Mayor made his
Mayor de Blasio. (Council Reply 11-12). The City’s March 21, 2014 letter, however,
seems to adopt the opposite position. (See Dkt. #41). At the August 19 oral argument,
counsel for the City clarified that the de Blasio administration could “rely, or not, on
whatever they learned from any submissions they received in response to the RFI”
issued by the Bloomberg administration. (Aug. 19 Tr. 3).
13
official appointments to the CIAB. (Id. at 10). Neither the City nor the Council
provided a specific date by which these putative conditions precedent would be
satisfied.
The Court asked Plaintiff to discuss its bases for standing as of October
2013. Plaintiff argued, for the first time at oral argument, that it had standing
by virtue of the fact that LL 38 “was enacted for no other purpose than, as the
four corners of it make clear, to regulate the activities of deposit banks, [and]
no one else.” (Aug. 19 Tr. 45). While Plaintiff conceded that LL 38 had yet to
be implemented, it contended nonetheless that the mere existence of LL 38
“creates harm and injury … because we don't know what the legal landscape
will be six months from now or eight months from now or nine months from
now.” (Id. at 14-15). When asked, then, whether Plaintiff had standing to
pursue this action when LL 38 was passed back in 2012, Plaintiff responded
that, “the injury was clearer as you got closer at the end of … 2013, when there
was clearly going to be a new mayor and the new mayor was going to enforce
this law in a way that the prior mayor had not.” (Id. at 45-46). However,
Plaintiff pointed to no factual allegations in the Complaint in support of this
assertion.
The Court asked whether Plaintiff’s members had incurred any costs in
preparation for the implementation of LL 38, either as of the filing of the
Complaint or as of August 19, 2014. Plaintiff replied by noting that its
members “spent millions of dollars” complying with the federal CRA, but
argued that there was a “cloud over their efforts” since “[i]f they want to change
14
their systems, do things differently, they don’t know what this board might or
might not do when it may come into effect.” (Aug. 19 Tr. 12). The Court asked
again whether Plaintiff’s members had incurred any costs. Plaintiff responded
by arguing that “the existence of the law has created uncertainty for the
banks.” (Id. at 40). When asked yet again whether its members had incurred
any costs, Plaintiff conceded that “[w]e have not put forward any affidavits in
the record saying bank A has incurred these compliance costs,” but explained
that “the whole purpose of doing the lawsuit when we brought the lawsuit was
to avoid having to incur the costs that we will obviously incur if this law is
allowed to go into effect.” (Id. at 49-50 (Plaintiff’s counsel explaining that it was
“cheaper to have us litigate than to incur the costs and then have to be back in
court”)).
DISCUSSION
The Council moves to dismiss Plaintiff’s Complaint on the basis that
Plaintiff did not have standing to pursue its claims when the action was filed in
October 2013. 5 The Council is correct.
5
Defendant Council moves to dismiss the Complaint on standing grounds pursuant to
Rule 12(b)(1) of the Federal Rules of Civil Procedure. (See Council Br. 1). Curiously,
Plaintiff’s summary judgment papers assert standing but do not move on that basis.
(See Pl. Br. 29-32). Accordingly, the Court will apply the standards and presumptions
applicable to a motion to dismiss, not a motion for summary judgment, and will thus
accept the allegations in the Complaint to be true, but will not any draw inferences
therefrom in Plaintiff’s favor. See Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129,
131 (2d Cir. 1998) (“[W]hen the question to be considered is one involving jurisdiction of
a federal court, jurisdiction must be shown affirmatively, and that showing is not made
by drawing from the pleadings inferences favorable to the party asserting it.” (internal
citation omitted)). The Court may refer to matters outside the pleadings, such as
affidavits, but may not rely on conclusory statements contained therein to establish
standing. See Robinson v. Malaysia, 269 F.3d 133, 140-41 & n.6 (2d Cir. 2001).
15
At oral argument, Plaintiff’s counsel distilled its standing, ripeness, and
preemption arguments to their respective essences. As to the first, counsel
argued that the text of LL 38 is obviously and solely directed to the City’s 25
designated banks, 17 of whom are members of Plaintiff. Because of this
patency, and because the authority accorded to the CIAB under LL 38 is, in
Plaintiff’s estimation, preempted by both federal and state law, Plaintiff had
standing in October 2013 to bring a pre-enforcement challenge. Unfortunately
for Plaintiff, legal and pleading deficiencies vitiate this argument. Recent
decisions from the Supreme Court and the Second Circuit make plain that, to
have standing, a plaintiff must, at the time of filing, demonstrate a “substantial
risk” of a cognizable harm or a harm that is “certainly impending.” In October
2013, Plaintiff could demonstrate neither. And while Plaintiff is correct that
courts do not require a plaintiff to suffer a cognizable harm before challenging
a statute, the “pre-enforcement review” cases on which it relies are readily
distinguishable from the instant case.
Relatedly, the law is clear that a plaintiff must present particularized
allegations of the claimed harm and its imminence. The allegations in
Plaintiff’s Complaint demonstrate precisely the opposite. What is clear from
the Complaint is that, in October 2013, the incumbent mayor steadfastly
opposed the implementation of LL 38. Moreover, the Complaint fails to allege
any injuries suffered or costs expended by Plaintiff as a result of LL 38, which
is unsurprising in light of the statute’s dead-letter status during the relevant
time period. As became clear at oral argument, all that Plaintiff had in October
16
2013 was a free-floating malaise that, one day in the future, a new mayoral
administration might implement LL 38; this cannot suffice to constitute
standing.
A.
Applicable Law
“Article III, § 2, of the Constitution limits the jurisdiction of federal
courts to ‘Cases’ and ‘Controversies,’ which restrict the authority of federal
courts to resolving the legal rights of litigants in actual controversies.” Genesis
Healthcare Corp. v. Symczyk, — U.S. —, 133 S. Ct. 1523, 1528 (2013) (citing
Valley Forge Christian Coll. v. Americans United for Separation of Church and
State, Inc., 454 U.S. 464, 471 (1982) (“The requirements of Art. III are not
satisfied merely because a party requests a court of the United States to
declare its legal rights, and has couched that request for forms of relief
historically associated with courts of law in terms that have a familiar ring to
those trained in the legal process.”)). “As an incident to the elaboration of this
bedrock requirement,” a plaintiff seeking to maintain an action in federal court
is “always required” to have standing. Valley Forge Christian Coll., 454 U.S. at
471; Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (“One of those
landmarks, setting apart the ‘Cases’ and ‘Controversies’ that are the justiciable
sort referred to in Article III — serving to identify those disputes which are
appropriately resolved through the judicial process — is the doctrine of
standing.” (internal citation and quotation marks omitted)). To that end, the
issue of standing is “the threshold question in every federal case, determining
the power of the court to entertain the suit.” Kiryas Joel Alliance v. Vill. of
17
Kiryas Joel, 495 F. App’x 183, 188 (2d Cir. 2012) (summary order) (internal
citation omitted).
As the Supreme Court established in Lujan, “the irreducible
constitutional minimum of standing contains three elements”:
First, the plaintiff must have suffered an injury in fact —
an invasion of a legally protected interest which is
(a) concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical. Second,
there must be a causal connection between the injury
and the conduct complained of — the injury has to be
fairly traceable to the challenged action of the
defendant, and not the result of the independent action
of some third party not before the court. Third, it must
be likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.
504 U.S. at 560-61 (internal citations and quotation marks omitted).
The standing doctrine functions to “ensure[], among other things, that
the scarce resources of the federal courts are devoted to those disputes in
which the parties have a concrete stake.” Friends of the Earth, Inc. v. Laidlaw
Env’t Servs. (TOC), Inc., 528 U.S. 167, 192 (2000); see also Genesis Healthcare
Corp., 133 S. Ct. at 1528 (“This requirement ensures that the Federal Judiciary
confines itself to its constitutionally limited role of adjudicating actual and
concrete disputes, the resolutions of which have direct consequences on the
parties involved.”). In accordance with this precept, a plaintiff must establish
standing for “each claim and form of relief sought.” Carver v. City of New York,
621 F.3d 221, 225 (2d Cir. 2010) (internal citation omitted). Of significance
here, standing ‘“must exist at the commencement of litigation.’” Davis v. Fed.
Election Comm’n, 554 U.S. 724, 732 (2008) (quoting Friends of the Earth, Inc.,
18
528 U.S. at 189). Lastly, an association, which has not suffered an injury to
itself, may still have standing solely as the representative of its members,
provided it alleges “that its members, or any one of them, are suffering
immediate or threatened injury as a result of the challenged action of the sort
that would make out a justiciable case had the members themselves brought
suit.” Warth v. Seldin, 422 U.S. 490, 511 (1975) (citing Sierra Club v. Morton,
405 U.S. 727, 734-41 (1972)).
B.
Analysis
The Court turns first to whether Plaintiff has established an injury-in-
fact. As an initial matter, since standing is adjudged from the time the
Complaint is filed, the Court is limited in its analysis to the events and injuries
alleged in the Complaint, and any extrinsic materials, such as affidavits,
submitted in support of those allegations. See Keene Corp. v. United States,
508 U.S. 200, 207 (1993) (noting that it is a “longstanding principle that the
jurisdiction of the Court depends upon the state of things at the time [] the
action [is] brought” (internal quotation marks and citation omitted)). However,
Plaintiff has submitted no affidavits or other evidence in connection with this
motion as to the issue of standing. Accordingly, the Court must evaluate the
allegations in the Complaint in order to determine whether Plaintiff has, in fact,
alleged injuries in fact sufficient to confer standing.
To that end, Plaintiff alleges four primary harms that will flow to its
members “if Local Law 38 is upheld”: NYBA members may (i) be forced to
expend resources to comply with LL 38’s reporting requirements; (ii) have to
19
decide, as a result of the “benchmarks and best practices” established by the
CIAB, to “make certain types of loans and provide services that conflict with
what is required by governing federal and State law”; (iii) suffer reputational
harm; or (iv) face potential disbarment. (See Compl. ¶¶ 58, 64, 73, 82, 85).
The parties dedicate a significant proportion of their briefing to the issue of
whether, for instance, LL 38 could ever give rise to concrete harms. (See
Council Br. 10-15; Pl. Opp. 7-12; Council Reply 6-8). Yet the Court need not
reach this issue, because Plaintiff failed to demonstrate in its Complaint that
those harms, whether concrete or not, were imminent. Thus, the Court
assumes for the purposes of this decision that each of the harms identified
qualifies as a “concrete” harm.
Plaintiff bears the burden of demonstrating that it faces harms that are
‘“certainly impending,’ or that there is a ‘substantial risk’ that the harm[s] will
occur.’” Susan B. Anthony List v. Driehaus, — U.S. —, 134 S. Ct. 2334, 2341
(2014) (quoting Clapper v. Amnesty Int’l, 538 U.S. —, 133 S. Ct. 1138, 1150 n.5
(2013)). 6 The Supreme Court has instructed that whichever standard is
applied, to the extent they are even distinct, “plaintiffs bear the burden of
pleading and proving concrete facts showing that the defendant’s actual action
has caused the substantial risk of harm. Plaintiffs cannot rely on speculation
6
In its briefing, Plaintiff attempts to distinguish the holdings of Clapper and Hedges v.
Obama, 724 F.3d 170, 200 (2d Cir. 2013), cert. denied, 134 S. Ct. 1936 (2014), with
respect to the injury-in-fact requirement on the basis that they relate to national
security issues. (See Pl. Opp. 15-16). Its argument is refuted, however, by the Court’s
recent holding in Susan B. Anthony List, which concerned Ohio election law — not
national security or terrorism — yet applied the same injury-in-fact standards set forth
in Clapper and incorporated into Hedges. See 133 S. Ct. at 2341.
20
about ‘the unfettered choices made by independent actors not before the
court.’” Clapper, 133 S. Ct. at 1150 n.5 (citing Lujan, 504 U.S. at 562). 7 And
while the Supreme Court has held that ‘“imminence’ is concededly a somewhat
elastic concept,” the Court has made clear that “it cannot be stretched beyond
its purpose, which is to ensure that the alleged injury is not too speculative for
Article III purposes — that the injury is ‘certainly impending.’” Lujan, 504 U.S.
at 564 n.2 (quoting Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)).
Plaintiff has failed to demonstrate that, at the time it filed the Complaint
in October 2013, there was a “substantial risk” that any of the harms it fears
would occur, much less that they were certainly impending. The only
allegation or evidence Plaintiff has submitted in support of the “imminence” of
any feared harms (as distinguished from statements made at oral argument) is
the simple fact that the Council wants LL 38 to be implemented and enforced.
(See Compl. ¶ 30). But as the Complaint itself makes clear, there is a key
condition precedent before LL 38 can even take effect: the appointment of the
7
Plaintiff argues that Clapper did not “disturb” the established body of law in preenforcement actions requiring a plaintiff to prove a mere “probability” of injury. (Pl.
Opp. 16-17). As discussed infra, Plaintiff has failed to demonstrate that the standards
applicable to pre-enforcement actions apply here. More importantly, Clapper clarified
that regardless of whether a court applies a “substantial risk,” “certainly impending,” or
“clearly impending” requirement for imminence, the plaintiff bears the burden of
“pleading and proving concrete facts” demonstrating that a defendant’s “actual action
has caused the substantial risk of harm,” and may not rely on “speculation” or an
“attenuated chain of inferences” to do so. Clapper, 133 S. Ct. at 1149-50 & n.5 (holding
that plaintiffs did not have standing to challenge a statute that authorized, but did not
mandate or direct, the collection of certain surveillance information; because plaintiffs
had no knowledge of the Government’s targeting practices, they could “only speculate
as to how the Attorney General and the Director of National Intelligence will exercise
their discretion in determining which communications to target,” and this “attenuated
chain” of events did not constitute “imminence”). For the reasons discussed
throughout, Plaintiff has failed to make this showing.
21
CIAB. After all, LL 38 authorizes the CIAB, and no one else, to request,
compile, and publish certain categories of information, and all of Plaintiff’s
feared harms flow directly from these actions. Plaintiff must concede that LL
38 had no effects in October 2013, due to the Mayor’s refusal to appoint
members of the CIAB. Since the Council has — to its great frustration — no
control over this process, the Council’s desire to see LL 38 implemented is
simply irrelevant to the issue of whether the law will be implemented or
enforced imminently.
The timing of this action alone — brought mere weeks before the election
of a new Mayor — indicates that Plaintiff believed the law would be
implemented soon. Now, 10 months after the Complaint’s filing, Plaintiff may
eventually be proven correct. The Complaint, however, leaves that belief
unstated and implicit; in effect, Plaintiff now asks the Court to read into the
Complaint the circumstances of October 2013 (i.e., the anticipated change in
administrations and the attendant possibility of enforcement of LL 38), without
any allegations or evidence to that effect. 8 Of course, the Complaint makes no
reference to the upcoming 2013 election or incoming mayoral administration,
8
Instead, it was at the pre-motion conference that Plaintiff’s counsel first made this
connection to the Court, noting that “[i]f a new mayor comes in, we have every reason to
believe that the new mayor will appoint members to the CIAB,” and once that occurs,
the CIAB will “go out and try to get this information” from NYBA members. (Nov. 15
Tr. 5-6; see also id. at 11 (“When [the new mayor ap]points the board, the board will
presumably effectuate all of the requirements that are in the statute, which include
mandatory information gathering, mandatory publication [of] the information, and
mandatory publication of judgments about banks and their compliance with these citymandated rules which we think could conflict and will conflict with federal and state
rules.”)). As discussed supra, however, Plaintiff has offered neither allegations nor
evidence (such as a supplemental affidavit) indicating that this was even a remote
possibility, let alone a substantial risk, in October 2013.
22
and fails to proffer any reason to believe that Plaintiff’s members would be
subject to LL 38 in the near future. In fact, the Complaint reveals quite the
opposite: LL 38 had been on the books for 16 months, yet none of the many
deadlines provided for in the law had been met, and the CIAB had not even
been appointed, much less convened. See Poe v. Ullman, 367 U.S. 497, 507
(1961) (holding that a law’s presence on the books does not without more
confer standing). Quite simply, Plaintiff’s allegations reveal — far from the
CIAB being on the verge of enforcing LL 38 — that implementation and
enforcement were unlikely in the near future, if at all.
To shore up its pleading failures, Plaintiff now points to the City’s
decision (more than three months into the new administration) to implement
LL 38, as well as the December 23, 2013 RFI and the July 21, 2014 RFP, as
evidence that it had standing to pursue its claims back in October 2013. (See
Pl. Opp. 15-16; Pl. Supp. Ltr. Dated Aug. 14, 2014 (Dkt. #45)). As the parties
acknowledged at oral argument (Aug. 19 Tr. 20, 34), it is inappropriate to rely
on events that post-date the filing of the Complaint to determine whether
standing existed ab initio. Lujan, 504 U.S. at 570 n.5 (“[S]tanding is to be
determined as of the commencement of suit.”); Keene Corp., 508 U.S. at 207
(noting the “longstanding principle that the jurisdiction of the Court depends
upon the state of things at the time of the action brought”). A contrary ruling
would permit a plaintiff to file a placeholder action, and hope that the
intervening events were sufficient to confer standing upon him. Unfortunately,
Plaintiff appears to have done just that here. Despite its protestation to the
23
contrary (Aug. 19 Tr. 46), LL 38’s existence vel non is clearly not what causes
Plaintiff concern; if it were, Plaintiff surely would have initiated this action back
in 2012. Instead, Plaintiff filed this action in October 2013, months before a
new mayoral administration would take office, to hedge against the odds that
that new administration would not share the same reservations towards LL 38
as its predecessor. (See Aug. 19 Tr. 46). While it may be tempting to use
subsequent events to validate what were nothing more than prognostications
back in October 2013, the fact remains that Article III standing cannot be
established through hindsight alone; instead, a plaintiff must have standing at
the time the complaint is filed. Davis, 554 U.S. at 734-35 (even if “the proof
required to establish standing increases as the suit proceeds, the standing
inquiry remains focused on whether the party invoking jurisdiction had the
requisite stake in the outcome when the suit was filed” (internal citations
omitted)).
Plaintiff has simply failed to introduce a factual basis to imagine that its
feared harms would occur, let alone occur “imminently.” Even taking every
reasonable inference in Plaintiff’s favor, the Complaint as pleaded reveals that
the harms Plaintiff fears would only occur if (i) a new mayor were elected;
(ii) that mayor wished to enforce LL 38; (iii) the mayor appointed the CIAB
members; (iv) the Comptroller and Speaker made their appointments to the
CIAB; (v) the CIAB were convened; and (vi) the CIAB requested information
from NYBA members. Plaintiff’s other alleged harms — that its members would
change their business practices as a result of the CIAB’s “benchmarks,” or face
24
reputational injury or disbarment — are thus even more remote. Plaintiff’s
allegations fail to make the leap from “mere speculation to a ‘credible threat.’”
Taylor v. Bernanke, No. 13 Civ. 1013 (ARR), 2013 WL 4811222, at *7 (E.D.N.Y.
Sept. 9, 2013) (quoting Bauer v. Veneman, 352 F.3d 625, 633 (2d Cir. 2003);
see also id. (“The risk alleged by plaintiffs requires the type of ‘highly
attenuated chain of possibilities’ contingent upon ‘guesswork’ as to the actions
of third parties that Clapper held could not bestow standing.” (quoting Clapper,
133 S. Ct. at 1150 n.5)); City of Los Angeles v. Lyons, 461 U.S. 95, 105, 111
(1983) (denying standing to an individual seeking to challenge a police
chokehold because it was only speculative that the plaintiff would be subjected
to that chokehold again in the future).
Moreover, Plaintiff has introduced no evidence demonstrating that any of
its members had incurred injuries or costs at the time the Complaint was filed,
and in fact, the record indicates that they had not. Contra Clapper, 133 S. Ct.
at 1151-52 (plaintiffs introduced evidence of present injuries sustained to
protect their communications); Pac. Capital Bank, N.A. v. Connecticut, 542 F.3d
341, 347 (2d Cir. 2008) (plaintiff introduced evidence that it had already
changed its business practices in an attempt to comply with the statute);
Vermont Right to Life Comm., Inc. v. Sorrell, 221 F.3d 376, 381 (2d Cir. 2000)
(plaintiffs introduced evidence that they had ceased non-compliant mailings in
an effort to not run afoul of the statute). Here, no NYBA member had expended
any costs in responding to a CIAB request because there had been no CIAB
request. (Aug. 19 Tr. 50). No NYBA member had changed its business
25
practices in line with the CIAB’s “benchmarks” because the CIAB had not even
yet been appointed, much less convened to publish “benchmarks.” Lastly, no
NYBA member had been threatened with reputational injury, or debarment, as
a result of any CIAB report because there was, in fact, no CIAB.
Plaintiff contends that because this action is a pre-enforcement statutory
challenge, and because LL 38 applies by its terms to Plaintiff’s members, it
need only demonstrate a “probability” of injury in order to establish standing. 9
Its argument misses the mark for several reasons. First, the term “preenforcement challenge” is a misnomer here, where for all intents and purposes,
LL 38 was not even in effect at the time the Complaint was filed, let alone
capable of being enforced in the near future. The Supreme Court’s recent
decision in Susan B. Anthony List is the latest in a long series of preenforcement challenges in which the plaintiff was required only to allege a
“credible basis” that the statute would be enforced against them; this
requirement is usually satisfied by showing that the statute applies to
plaintiffs. In Susan B. Anthony List, the Court found that plaintiffs had
standing to challenge an Ohio criminal statute, under which they had not yet
been prosecuted, but had been subject to administrative proceedings. The
Court held that pre-enforcement review of a statute was appropriate where
9
Plaintiff suggested repeatedly at oral argument that LL 38 was solely targeted at the
City’s 25 designated banks, 17 of which are NYBA members. (Aug. 19 Tr. 29 (Plaintiff
arguing that LL 38 was “passed for no other reason than to change the behavior of 25
banks”), 38, 45). LL 38 need not be read so narrowly. Indeed, it is the Council’s
position that LL 38 “is not about the deposit banks,” but instead targets “the banking
needs of the city.” (Id. at 59-60 (Council arguing that LL 38 is “a learning tool for the
city … to know what servicers are being funded with its money”)).
26
“circumstances [] render the threatened enforcement sufficiently imminent.”
Id. at 2342. The Court surveyed its prior decisions to ascertain “the
circumstances under which plaintiffs may bring a pre-enforcement challenge
consistent with Article III,” and noted that “we have held that a plaintiff
satisfies the injury-in-fact requirement where he alleges ‘an intention to engage
in a course of conduct arguably affected with a constitutional interest, but
proscribed by a statute, and there exists a credible threat of prosecution
thereunder.’” Id. (quoting Babbitt v. Farm Workers, 442 U.S. 289, 298
(1979)). 10
This requirement grows out of three primary presumptions in the preenforcement context. First, the presumption that a government will enforce
ordinary “criminal or civil punitive statutes.” Hedges, 724 F.3d at 200; see
also Vermont Right to Life Comm., 221 F.3d at 383 (noting that although
Vermont professed “no intention of suing VRLC for its activities,” “there is
nothing that prevents the State from changing its mind”; accordingly, “[i]n light
of this uncertainty, the State’s representation cannot remove VRLC’s
10
It is unclear whether the standard applied to pre-enforcement actions in Pacific Capital
and Vermont Right to Life Committee is applicable in light of the Supreme Court’s recent
rulings in Clapper and Susan B. Anthony List, to the extent they even differ. Compare
Susan B. Anthony List, 134 S. Ct. at 2342 (“a plaintiff satisfies the injury-in-fact
requirement where he alleges ‘an intention to engage in a course of conduct arguably
affected with a constitutional interest, but proscribed by a statute, and there exists a
credible threat of prosecution thereunder’” (internal citation omitted)), with Pacific
Capital, 542 F.3d at 350 (“If a plaintiff’s interpretation of a statute is ‘reasonable
enough’ and under that interpretation the plaintiff ‘may legitimately fear that it will face
enforcement of the statute,’ then the plaintiff has standing to challenge the statute.”
(quoting Vermont Right to Life Comm., 221 F.3d at 383)). Nonetheless, both Pacific
Capital and Vermont Right to Life Committee are factually inapposite and thus
inapplicable here for the reasons discussed in the text.
27
reasonable fear that it will be subjected to penalties for its planned expressive
activities. If we held otherwise, we would be placing VRLC’s asserted First
Amendment rights ‘at the sufferance of’ Vermont’s Attorney General” (internal
citation omitted)). Second, and as a result, the primary barrier to enforcement
would thus be if the statute in question did not apply to plaintiffs. For
instance, in Hedges, U.S.-citizen plaintiffs did not have standing to challenge a
statute which said “nothing at all about the authority of the government to
detain citizens.” Hedges, 724 F.3d at 193. Third, hand-in-hand with the first
two presumptions, is the Supreme Court’s directive that a plaintiff need not
expose himself to civil or criminal penalties prior to initiating suit; the reason
being that if a plaintiff is subject to a statute, and that statute will be enforced,
he need establish no more to demonstrate standing. See Babbitt, 442 U.S. at
298-301 (where appellees contended that in order “to avoid criminal
prosecution [they] must curtail their consumer appeals, and thus forgo full
exercise of [] their First Amendment Rights,” holding that “when fear of criminal
prosecution under an allegedly unconstitutional statute is not imaginary or
wholly speculative a plaintiff need not ‘first expose himself to actual arrest or
prosecution to be entitled to challenge [the] statute’” (internal citation omitted)).
But these presumptions are simply inapplicable here. First, unlike the
pre-enforcement cases cited throughout, the statute at issue here was only
nominally in effect at the time the Complaint was filed; in fact, it was
concededly impossible to enforce as of October 2013, and for the foreseeable
future. Contra Susan B. Anthony List, 134 S. Ct. at 2342-45 (plaintiffs had
28
already been subject to administrative proceedings under the statute; finding
that those prior proceedings were “good evidence” the statute’s criminal
penalties would also be enforced against plaintiffs). Second, LL 38 provides for
no civil or criminal penalties. (Compare Compl. ¶ 39 (“there is no specific
criminal or civil sanction for a deposit bank (or bank seeking to be designated a
City deposit bank) if it fails to provide information”), with Pac. Capital Bank,
N.A. v. Connecticut, No. 3:06-cv-28 (PCD), 2006 WL 2331075, at *4 (D. Conn.
Aug. 10, 2006) (plaintiff faced federal fines of up to $1,000,000 per day for noncompliance with state law), aff’d, 542 F.3d at 350-51; Vermont Right to Life
Comm., 221 F.3d at 380 (statute provided for fines of up to $10,000 per
violation of the statute)). In fact, LL 38 does not expressly proscribe or prohibit
any conduct. See Virginia v. American Booksellers Ass’n, 484 U.S. 383, 393
(1988) (concluding that plaintiff had standing to pursue First Amendment
facial challenge to state statute that criminalized the display, for commercial
purposes, of certain sexually explicit materials in a manner in which juveniles
may peruse or examine, on the basis that the “alleged danger of this statute is,
in large measure, one of self-censorship; a harm that can be realized even
without an actual prosecution”). For these reasons, the Court cannot simply
“presume” that LL 38 would be enforced when it was not even in effect at the
time the Complaint was filed. Instead, Plaintiff bore the burden of
demonstrating that there was a substantial risk that LL 38 would be enforced.
It has failed to discharge this burden.
29
Even if the standards applied to pre-enforcement actions were applicable
here, Plaintiff has failed to meet them: Plaintiff nowhere alleges either ‘“an
intention to engage in a course of conduct arguably affected with a
constitutional interest, but proscribed by a statute, [or] a credible threat of
prosecution thereunder.’” Susan B. Anthony List, 134 S. Ct. at 2342 (quoting
Babbitt, 442 U.S. at 298). The Complaint is silent as to whether, for instance,
NYBA’s members intend not to provide information requested by the CIAB, or
whether they have a credible belief that they will fall short of any “benchmarks”
established by the CIAB. What is more, Plaintiff fails to allege an intention to
engage in any conduct that is proscribed by LL 38. See Vosse v. City of New
York, No. 12 Civ. 8004 (JSR), 2013 WL 6197164, at *3 (S.D.N.Y. Nov. 8, 2013)
(“Plaintiff has presented no evidence that she is planning to violate Section 32655 in any way[.]”). 11
Lastly, even assuming the allegations in the Complaint established
standing, closely related principles of declaratory judgment law warrant
dismissal. Specifically, “[a] declaratory judgment, like other forms of equitable
relief, should be granted only as a matter of judicial discretion, exercised in the
public interest. It is always the duty of a court of equity to strike a proper
balance between the needs of the plaintiff and the consequences of giving the
desired relief.” Eccles v. Peoples Bank of Lakewood Vill., 333 U.S. 426, 431
11
Plaintiff contends that the reputational harm and threat of disbarment implicit in LL 38
constitute penalties (Pl. Opp. 31); yet the fact remains that, by its terms, LL 38 does not
actually prohibit or proscribe any conduct. The Court takes no position on whether the
threats of reputational injury or disbarment — whether explicit or implicit — could ever
constitute penalties.
30
(1948) (internal citations omitted); see also Abidor v. Napolitano, 990 F. Supp.
2d 260, 272 (E.D.N.Y. 2013) (“An action for declaratory judgment does not
provide an occasion for addressing a claim of alleged injury based on
speculation as to conduct which may or may not occur at some unspecified
future date.” (citing, inter alia, Lujan, 504 U.S. at 560)). Thus, “[e]specially
where governmental action is involved, courts should not intervene unless the
need for equitable relief is clear, not remote or speculative.” Abidor, 990 F.
Supp. 2d at 272 (internal citations omitted).
Plaintiff has failed to establish that, at the time of the Complaint’s filing
in October 2013, the injuries it identified were imminent, or were subject to a
substantial risk of occurrence. Instead, the Complaint as pleaded reveals only
that those harms would arise if a conjectural concatenation of events occurred
in sequence; this is the very definition of an “attenuated chain.” Clapper, 133
S. Ct. at 1150 n.5. Because Plaintiff’s injuries were simply far “too speculative
for Article III purposes,” Lujan, 504 U.S. at 565 n.2, its present request is a
“prototypical request for an advisory opinion.” Knife Rights, Inc. v. Vance,
No. 11 Civ. 3918 (KBF), 2013 WL 5434610, at *4 (S.D.N.Y. Sept. 25, 2013).
“The law of Article III standing, which is built on separation-of-powers
principles, serves to prevent the judicial process from being used to usurp the
powers of the political branches.” Susan B. Anthony List, 134 S. Ct. at 2341
(quoting Clapper, 133 S. Ct. at 1146).
31
Accordingly, the Complaint must be dismissed. 12 This dismissal,
however, is without prejudice. See Wells Fargo Bank, N.A. v. Ullah, No. 13 Civ.
0485 (JPO), 2014 WL 2117243, at *3 (S.D.N.Y. May 21, 2014) (“Dismissals for
lack of standing are dismissals without prejudice because standing may ebb
and flow. A party without standing may later acquire it.”); see generally
Jackson-Bey v. Hanslmaier, 115 F.3d 1091, 1098 (2d Cir. 1997) (affirming
dismissal without prejudice for lack of standing). Plaintiff brings serious
substantive claims, and while it did not have standing to pursue them in
October 2013, the Court takes no position on whether pleading modified in
accordance with this Opinion, in addition to the events of the intervening
year — or, alternatively, the occurrence of certain anticipated events, such as
the convening of the CIAB or the award of the contract to provide support
12
The City has not moved to dismiss the Complaint. Instead, it has filed a letter asserting
its “support” for the Council’s motion, but not so moving itself. (See Dkt. #41).
Nonetheless, having determined that Plaintiff lacks standing, pursuant to Rule 12(h)(3)
of the Federal Rules of Civil Procedure, the Court must sua sponte dismiss the
Complaint as to the City. See Bernstein v. Universal Pictures, Inc., 517 F.2d 976, 979
(2d Cir. 1975) (“There can be little doubt that a district court should be alert to
terminate an action under Rule 12(h)(3) when lack of subject matter jurisdiction
becomes apparent. Judicial resources are precious, particularly in view of the courts’
steadily burgeoning caseload, and they should not be dissipated in futile proceedings.
Indeed, the lack of jurisdiction is so fundamental a defect that the rule permits a judge
to recognize it sua sponte at any time.”); see also FW/PBS, Inc. v. City of Dallas, 493
U.S. 215, 231 (1990) (“The federal courts are under an independent obligation to
examine their own jurisdiction, and standing ‘is perhaps the most important of [the
jurisdictional] doctrines.’” (quoting Allen v. Wright, 468 U.S. 737, 750 (1984)); Mancuso
v. Consol. Edison Co. of N.Y., 130 F. Supp. 2d 584, 588 (S.D.N.Y. 2001) (“[T]he issue of
standing can be raised on motion of a party or even sua sponte at any time during the
litigation or appeal; it cannot be waived.” (citing, inter alia, United States v. Hays, 515
U.S. 737, 742 (1995)), aff’d, 25 F. App’x 12 (2d Cir. 2002) (summary order).
32
services to the CIAB — would be sufficient to establish standing. Defendant
Council’s motion to dismiss is granted. 13
CONCLUSION
Plaintiff has failed to demonstrate that it had standing to pursue its
claims at the time the action was filed. Accordingly, this action is dismissed
without prejudice. Defendant Council’s motion to dismiss is GRANTED. The
Clerk of Court is directed to terminate the remaining motions and to mark this
case as closed.
SO ORDERED.
Dated: September 9, 2014
New York, New York
__________________________________
KATHERINE POLK FAILLA
United States District Judge
13
The Court need not reach the Council’s argument with respect to ripeness, having
dismissed the Complaint on standing grounds.
33
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