AMTAX Holdings 227, LLC v. CohnReznick LLP

Filing 50

MEMORANDUM AND ORDER granting 33 Motion to Dismiss; terminating 35 Motion to Intervene; terminating 35 Motion to Dismiss. For the reasons stated above, defendant's motion to dismiss for lack of subject matter jurisdiction is granted wi thout prejudice. See Katz v. Donna Karan Co., 872 F.3d 114, 121 (2dCir. 2017) ("[W]hen a case is dismissed for lack of federal subject matter jurisdiction, Article III deprives federal courts of the power to dismiss the case with prejudice.& quot;) (internal quotation marks and citation omitted). Having concluded that the Court lacks subject matter jurisdiction in this case, we do not reach defendants motion to dismiss for failure to state a claim or the Nonprofit's motion to intervene. The Clerk of the Court is respectfully directed to terminate the motions pending at ECF Nos. 33 and 35 and dismiss the action. SO ORDERED. (Signed by Judge Naomi Reice Buchwald on 6/4/24) (yv)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------X
AMTAX HOLDINGS 227, LLC,
Plaintiff,

MEMORANDUM AND ORDER

- against –

23 Civ. 1124 (NRB)

COHNREZNICK LLP,
Defendant.
------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
Plaintiff AMTAX Holdings 227, LLC (“AMTAX,” the “Limited
Partner,” or “plaintiff”) filed this lawsuit on February 9, 2023
asserting

claims

of

breach

of

fiduciary

duty,

professional

negligence, unjust enrichment, and fraud against CohnReznick LLP
(“CohnReznick” or “defendant”).

Presently before the Court is

defendant’s motion to dismiss the complaint pursuant to Federal
Rules of Civil Procedure 12(b)(1) and 12(b)(6).
pending

before

the

Court

is

nonparty

ECF No. 33.

Tenants’

Also

Development

Corporation’s (the “Nonprofit” or “TDC”) motion to intervene and
dismiss pursuant to Federal Rules of Civil Procedure 24, 12(b)(1),
and 12(b)(6).

ECF No. 35.

For the following reasons, defendant’s

motion is granted and the complaint is dismissed for lack of
subject matter jurisdiction.

Consequently, the Court does not

need to reach the motion to intervene.

BACKGROUND 1
Plaintiff’s claims stem from its investment in a limited
partnership that owned a low-income housing property located in
Boston, Massachusetts (the “Property”).

The limited partnership

owned the Property pursuant to the Low-Income Housing Tax Credit
(“LIHTC”)
benefits.

program

in

order

to

take

advantage

of

certain

tax

Before addressing the specific facts of this case, it

is helpful at the outset to provide some background regarding the
LIHTC program.
A.

The LIHTC Program
Congress created the LIHTC program pursuant to the Tax Reform

Act of 1986 as an incentive to private investors to finance the
development of affordable housing through the distribution of tax
credits.

See generally Mark P. Keightley, CONG. RSCH. SERV.,

RS22389, An Introduction to the Low-Income Housing Tax Credit
(2023).

Through the LIHTC program, the Internal Revenue Service

(“IRS”) allocates federal tax credits annually to state housing
agencies, which then award the tax credits to eligible developers
The facts considered and recited here are drawn from plaintiff’s complaint
and any attachments thereto, and are accepted as true for purposes of the
instant motion. See Doe v. City of New York, No. 19 Civ. 9338 (AT), 2021 WL
964818, at *1 (S.D.N.Y. Mar. 15, 2021). The Court also refers to documents
attached to defendant’s motion to dismiss and to plaintiff’s opposition. See
Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (stating that a
district court resolving a motion to dismiss for lack of subject matter
jurisdiction under Rule 12(b)(1) “may refer to evidence outside the pleadings”).
1

-2-

to offset the costs of construction in exchange for reserving a
portion of the units for affordable housing.

See id. at 3-4;

SunAmerica Hous. Fund 1050 v. Pathway of Pontiac, Inc., 33 F.4th
872, 874 (6th Cir. 2022).
In order to obtain financing for LIHTIC-qualifying housing
developments,

developers

--

many

of

which

are

nonprofit

organizations -- frequently allocate the tax credits attributable
to the development to outside private investors.
2, at 5-6.

Keightley, supra

Typically, the developers and investors structure the

sale through a limited partnership, with the nonprofit developers
serving as the general partner, owning a small percentage of the
property while managing the development on a day-to-day basis, and
the investor serving as the limited partner, owning the vast
majority of the development but playing an otherwise passive role.
Id.
To qualify for the tax credits, owners of eligible projects
must report on their compliance with the LIHTC leasing requirements
annually
period.”

for

fifteen

Compl. ¶ 26.

years,

which

is

called

the

“compliance

As long as a project adheres to certain

rent affordability restrictions for the compliance period, the
private investor may claim tax credits annually over a ten-year
period.

Keightley, supra 2, at 1.

-3-

Once the compliance period has

ended, the annual tax credits are no longer available.
26 U.S.C. § 42(j)(1).

See id.;

At this point, investor limited partners

typically exit the limited partnership because “the benefits are
both gone and safeguarded, because the IRS will no longer seek
recapture of prior tax benefits, even if the properties fall out
of compliance with LIHTC income limits or other requirements.”
U.S. Dep’t of Hous. and Urb. Dev., What Happens to Low-Income
Housing Tax Credit Properties at Year 15 and Beyond? 29 (Aug.
2012),
https://www.huduser.gov/portal//publications/pdf/what_happens_li
htc_v2.pdf (“HUD Report”).
As

a

result,

once

the

compliance

period

ends,

there

is

generally a risk that LIHTC developments transition away from
operating as affordable housing.
§ 42(i)(7)

(“Section

42(i)(7)”)

For this reason, 26 U.S.C.
was

enacted

to

encourage

the

continued availability of affordable housing by providing a safe
harbor that protects investor limited partners from suffering
negative tax consequences when they sell the developments to
qualifying nonprofits at a below-market price. 2

26 U.S.C. §§

Section 42(i)(7)(A) provides that “[n]o Federal income tax benefit shall fail
to be allowable to the taxpayer with respect to any qualified low-income
building merely by reason of a right of 1st refusal held by . . . a qualified
nonprofit organization (as defined in subsection (h)(5)(C)) . . . to purchase
the property after the close of the compliance period for a price which is not
2

-4-

42(i)(7), (h)(5).

Generally, the IRS treats below-market purchase

options as conditional transfers of ownership to the optionholder, see Rev. Rul. 55-540, 1955-2 C.B. 39, § 4.01(e), which
precludes owners whose interests are subject to such a right from
claiming any tax benefits associated with the asset.

However,

under

rule

Section

42(i)(7)’s

safe

harbor,

inapplicable to qualifying sales.

this

general

is

Specifically, Section 42(i)(7)

allows the limited partner to grant qualifying nonprofits, among
others, a right of first refusal that can be exercised at the end
of the compliance period.

In order to qualify for the safe harbor,

the price at which the nonprofit can exercise its right of first
refusal must satisfy the minimum purchase price set forth under
Section 47(i)(7)(B). 3

less than the minimum purchase price determined under subparagraph (B).”
U.S.C. § 42(i)(7).

26

The minimum purchase price allowable to qualify for the Section 42(i)(7) safe
harbor is:
3

[A]n amount equal to the sum of—
(i)

the principal amount of outstanding indebtedness secured by the
building (other than indebtedness incurred within the 5-year period
ending on the date of the sale to the tenants), and

(ii)

all Federal, State, and local taxes attributable to such sale.

Except in the case of Federal income taxes, there shall not be taken into
account under clause (ii) any additional tax attributable to the
application of clause (ii).
26 U.S.C. § 42(i)(7)(B).

-5-

If the parties choose to take advantage of this optional safe
harbor,

the

parties

must

negotiate

the

specific

terms

and

conditions of that right of first refusal -- which can vary widely
-- in a contract.

See Compl. ¶ 37; HUD Report at 30-32 (explaining

how and why the terms and conditions of a limited partner’s exit
process may vary depending on the context).

Typically, the right

of first refusal is granted via the initial partnership agreement.
HUD Report at 31 n. 20.

Once the right has been triggered in

accordance with the contract, the party holding the right of first
refusal can elect to purchase the LIHTC development for the agreed
upon purchase price.

However, in order to qualify for the safe

harbor, that price cannot be less than the minimum purchase price
required by Section 47(i)(7)(B)).
B.

Id.

The Tenants’ Development II Partnership
In

the

early

2000s, 4

a

limited

partnership,

Tenants’

Development II, L.P. (the “Partnership”), was formed to redevelop
and own a 185-unit affordable housing development in Boston,
Massachusetts pursuant to the LIHTC program.

Compl. ¶¶ 9, 20.

Tenants’ Development II Corporation (the “General Partner”), an

Plaintiff alleges that the partnership was formed in 2003, however, related
litigation indicates that the partnership was formed in 2002.
See AMTAX
Holdings 227, LLC v. Tenants’ Dev. II Corp., 15 F.4th 551, 553 (1st Cir. 2021);
Tenants’ Dev. Corp. v. AMTAX Holdings 227, LLC, CA No. 2084 Civ. 01260-BLS1, at
4 (Mass. Super. Ct.).
4

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affiliate of TDC, the Nonprofit, serves as the general partner of
the Partnership and owns 0.009% of the Partnership’s interests.
Id. ¶¶ 14, 15.

In exchange for a $12 million capital contribution,

AMTAX received a 99.99% ownership stake in the Partnership and the
right to tax credits generated by the Property. 5

Id. ¶ 22.

According to the motion papers, Alden Torch Financial LLC (“Alden
Torch”), an investment management company, acquired AMTAX in 2011
and has managed AMTAX’s interest in the Partnership since that
time.

ECF No. 33-10 (“Mot.”) at 4-5; ECF No. 36 at 6; Compl. ¶

11.

Meanwhile,

defendant

CohnReznick

has

served

as

the

Partnership’s auditor and tax preparer for “approximately twenty
years.”

Id. ¶ 1.

The Partnership and the Nonprofit had entered into a right of
refusal and purchase option agreement on June 20, 2003.
ECF

No.

33-3

Partnership
property

(“ROR

granted

“in

the

Agreement”).
the

event

Nonprofit
[the

Under
the

this

right

Partnership]

Id. ¶ 20;

agreement,
to

purchase

proposes

to

the
the

sell,

transfer, assign, or ground lease all or substantially all [the
Partnership’s] interest” for:

5 The remaining 0.001% of the Partnership is owned by non-party Tax Credit
Holdings III, LLC (together with AMTAX, the “Limited Partners”), a special
limited partner that is managed by Alden Torch Financial LLC, the same
investment management company that owns AMTAX. Compl. ¶ 11, 13; Mot. at 4-5.

-7-

lesser of:
(x) the price stated in the Disposition Notice, or
(y) the sum of the principal amount of outstanding
indebtedness secured by the Property (other than
indebtedness incurred within the 5-year period
ending on the date of any sale to the Sponsor) and
all federal, state and local taxes attributable to
such sale.
Id. §§ 2(a), (b)(ii).
On

February

28,

2017,

and

again

on

April

3,

2018,

the

Nonprofit sent letters to AMTAX offering to purchase its interest
in the Property ahead of the end of the compliance period on
December 31, 2018 pursuant to Section 7.4(J) of the parties’
limited partnership agreement.

ECF Nos. 1-1, 1-2, 36-4.

Each of

these letters included a calculation performed by CohnReznick
indicating the Nonprofit’s proposed purchase price of $7,737,812
and $4,172,194, respectively.

ECF Nos. 1-1, 1-2.

According to

the letters, these prices represented the “the anticipated tax
liability incurred in the event of a sale of the Project, plus the
amount

of

any

tax

liability

attributable

to

the

Exit

Tax

Distribution 6.”

Id.

However, the parties failed to negotiate an

“Exit Tax Distribution” is defined in the parties’ limited partnership
agreement as a “priority distribution . . . in an amount equal to its tax
liability incurred by the sale, plus the amount of any tax liability
6

-8-

early exit of the Limited Partners after disputing the existence
and scope of the Nonprofit’s right of first refusal.
2

(Tenants’

Dev.

2084CV01260-BLS1

Corp.
(Mass.

v.

AMTAX

Super.

Ct.

Holdings
2020)

227,
(the

ECF No. 33LLC,

CA

No.

“Massachusetts

Action”), Doc No. 62 (the “Massachusetts Decision”)) at 6-8; see
also Compl. ¶¶ 69-71.
On January 17, 2020, the Partnership engaged CohnReznick to
calculate the price at which the Nonprofit could exercise its right
of first refusal.

Compl. ¶ 81.

On February 10, 2020, the

Partnership and the General Partner informed the Nonprofit of its
intention to sell the Property to a third party, triggering the
Nonprofit’s right of first refusal.
“Disposition Notice”).

Compl. ¶ 94; ECF 33-5 (the

Attached to the Disposition Notice was a

calculation performed by CohnReznick of the right of first refusal
price, totaling $17,108,380 (the “Purchase Price”), which included
zero “taxes attributable to the sale” of the Property, i.e. exit
taxes.

Id.; Compl. ¶ 3.

The next day, the Nonprofit notified the

Partnership that it planned to purchase the property for the amount
stated in the Disposition Notice.

Compl. ¶ 96.

attributable to the Exit Tax Distribution taking into account any charitable
donation in connection with such sale,” to be paid “in the event of a sale to
a qualified non-profit entity pursuant to the LURA or tax credit reservation.”
ECF No. 36-4 § 6.1(B).

-9-

AMTAX objected to the sale, claiming that its consent was
required in order to exercise the right of first refusal. 7
98; Mot. at 6.

As explained below, litigation ensued.

Id. ¶

Today, the

sale of the Property to the Nonprofit has not been completed.
C.

The Federal Court Litigation
On May 12, 2020, the Nonprofit and the General Partner filed

an action against AMTAX in the District of Massachusetts, asserting
diversity

jurisdiction

and

seeking,

among

other

things,

a

declaratory judgment that the right of first refusal had been
validly

triggered

CohnReznick.

and

exercised

at

the

price

calculated

by

Tenants’ Dev. Corp. v. AMTAX Holdings 227, LLC, No.

20 Civ. 10902 (LTS) (D. Mass. May 12, 2020), ECF No. 1 ¶¶ 112-13,
151.

Shortly thereafter, AMTAX disclosed in a motion to dismiss

that one member of its owner, Alden Torch, was a Massachusetts
citizen, as were the Nonprofit and the General Partner, thereby
destroying diversity jurisdiction.

Id., ECF No. 13.

Also on May 12, 2020, AMTAX filed a complaint, also in the
District of Massachusetts, against the Nonprofit and the General
Partner, seeking a declaration that the ROR Agreement did not
According to the Massachusetts Decision, in an attempt to prevent the Nonprofit
from exercising its right of first refusal, AMTAX recorded a “Notice of Consent
Rights” at the Suffolk Registry of Deeds, which stated that any transfers of
title require AMTAX’s consent. Massachusetts Decision at 7. As a result of
this notice, MassHousing “halted its final approval of the sale” to the
Nonprofit. Id. at 8.

7

-10-

comply with Section 42(i)(7), that the Nonprofit’s exercise of the
right was invalid, and that the ROR agreement was therefore void.
AMTAX Holdings 227, LLC v. Tenants’ Dev. Corp., No. 20 Civ. 10911
(D. Mass. May 12, 2020), ECF No. 1 (the “Federal Massachusetts
Action”).

In the alternative, AMTAX sought a declaration that the

purchase price had been calculated incorrectly and that it was
entitled to an exit tax distribution.

AMTAX also brought various

state-law claims, including claims for fraud, breach of contract,
and breach of fiduciary duties.

It argued that the district court

had subject matter jurisdiction because the allegations concerned
the meaning of the term “right of 1st refusal” in Section 42 and
required the court to resolve whether the ROR Agreement violated
Section 42.
On December 23, 2020, the district court dismissed both of
these actions for lack of subject matter jurisdiction.

Tenants’

Dev. Corp. v. AMTAX Holdings 227, LLC, No. 20 Civ. 10902 (LTS),
No. 20 Civ. 10911 (LTS), 2020 WL 7646934, at *1 (D. Mass. Dec. 23,
2020), aff’d on other grounds sub nom. AMTAX Holdings 227, LLC v.
Tenants’ Dev. II Corp., 15 F.4th 551 (1st Cir. 2021).

The United

States Court of Appeals for the First Circuit affirmed the district
court’s decision, concluding that “[r]efined to bare essence, this
[was] a dispute over a contract, the [ROR] Agreement,” not an

-11-

important

federal

question

Section 42(i)(7).

concerning

the

interpretation

of

AMTAX Holdings 227, LLC, 15 F.4th at 557.

First, the court held that Section 42 was not necessarily raised,
as nothing in the statute suggests that noncompliance would void
an

existing

right

of

first

refusal

agreement;

instead,

noncompliance would merely result in the unavailability of the
safe harbor.

Id.

Specifically, the First Circuit found that:

Section 42(i)(7) provides only that “no Federal income
tax credit shall fail to be allowable” when a qualifying
right of first refusal is in effect. Nothing in the
statute either suggests or implies that it voids
noncompliant right of first refusal agreements. The
notion
that section
42(i)(7) independently
voids
noncompliant agreements rather than simply making a
party
or
a
project
ineligible for
certain tax
benefits borders on the specious and seems too thin a
reed to support federal jurisdiction.
Id.
Second, the First Circuit found that AMTAX’s claims were not
substantial

enough

to

support

federal

question

jurisdiction.

While observing that the “common thread that runs through” statelaw

claims

that

implicate

substantial

federal

issues

is

the

presence of “some appreciable measure of risk to the federal
sovereign,” the court found that this case “involve[d] no such
jeopardy.”

Id. at 558.

AMTAX’s complaint did “not challenge –

nor even implicate – concrete federal activity (such as an attempt

-12-

by the IRS to recapture the Partnership’s tax credits).”

Id.

Moreover, the court noted that it was “questionable whether the
outcome of the litigation [would] have ramifications for other
cases,” as “right of first refusal agreements are sui generis,”
for which “[t]here is no standardized language . . ., nor is there
any indication that developers and investors customarily use a
one-size-fits-all prototype,” nor is there a basis to conclude
“that a large number of LIHTC transactions would be affected by
the federal-law issue here.”
Finally,

the

First

Id.

Circuit

observed

that

“the

federal

government already ‘delegates’ LIHTC-related compliance matters
‘to state agencies as a matter of course,’ . . . and it is not
clear how a state court could destabilize the program by ruling on
the meaning of section 42(i)(7).”

Id.

Based on these findings,

the First Circuit concluded that there was no basis for subject
matter jurisdiction, as “the theory advanced by [AMTAX] . . . does
not suggest broad significance to the federal government or other
parties and, thus, lacks substantiality.”
D.

Id.

The Massachusetts State Court Litigation
After the Nonprofit and General Partner discovered that Alden

Torch’s citizenship
District

of

destroyed

Massachusetts

diversity

case,

-13-

they

jurisdiction

brought

a

in

their

substantially

similar suit in Massachusetts state court on July 17, 2020.
Massachusetts

Action.

They

sought,

among

other

See

things,

a

declaration that the Nonprofit could validly exercise its right of
first refusal without AMTAX’s consent and that the Purchase Price
was properly calculated.

Id.

In turn, AMTAX asserted several

counterclaims, including that the General Partner breached -- and
the Nonprofit aided and abetted the breach of -- its fiduciary
duties by, among other things, claiming that the Purchase Price
does not include an exit tax distribution to AMTAX.

Massachusetts

Action, Doc. No. 17, ¶¶ 150(h), 153-159.
On June 30, 2023, after both parties cross-moved for summary
judgment,

the

Massachusetts

Superior

Court

issued

an

opinion

finding in relevant part that (1) Nonprofit and General Partner
were entitled to a declaration that the sale of the property to
the Nonprofit did not require AMTAX’s consent; (2) AMTAX was
entitled to summary judgment on the remainder of the Nonprofit and
General Partner’s claims, concluding that the Partnership had
inappropriately

calculated

the

purchase

price;

and

(3)

the

Nonprofit and General Partner were entitled to summary judgment on
all counterclaims brought by AMTAX except its claim seeking a
declaration

that

appropriately.

the

Purchase

Price

had

been

Massachusetts Decision at 20-24.

-14-

calculated

As to whether

exit taxes should have been included in the Purchase Price, the
Massachusetts Superior Court found no clear answer after analyzing
the language of the ROR Agreement, the statutory language, IRS
regulations and guidance, and caselaw.

Instead, the court relied

on the HUD Report to conclude that exit taxes should have been
included, as the Massachusetts Supreme Judicial Court had done in
similar cases.

Id. at 16-17.

However, the court found that the

improper calculation of the Purchase Price could not support
AMTAX’S

breach

of

fiduciary

duty

counterclaims

because

the

Partnership’s interpretation of the language in the ROR Agreement
and Section 42 “reflected a colorable interpretation of language
in the ROR Agreement and Section 42.”

Id. at 23.

Specifically,

the court reasoned:
As noted above, there is no case law or regulatory
guidance interpreting the phrase “taxes attributable to
such sale”, and the meaning of that phrase is not, at
first blush, entirely clear. A legitimate dispute such
as this, without more, does not amount to breach of the
duty of loyalty and good faith. Second, it is unclear
what harm [AMTAX] suffered given that they successfully
prevented the sale . . .
Id.
The

Nonprofit

and

General

Partner

applied

for

direct

appellate review of the court’s decision granting summary judgment
on all but one of their claims, which the Massachusetts Supreme
-15-

Judicial Court granted on February 20, 2024.

The appeal is now

pending.
E.

This Litigation
Finally, turning to the instant case, AMTAX alleges that

CohnReznick

entered

into

a

“secret

agreement”

with

the

Partnership’s general partner, TD II, to calculate a purchase price
that excluded exit taxes and thereby failed to comply with Section
42(i)(7).

Compl. ¶ 6.

Specifically, AMTAX asserts four causes of

action against CohnReznick: (1) breach of fiduciary duty; (2)
professional negligence; (3) fraud; and (4) unjust enrichment.
Id. ¶¶ 112-145.
On May 23, 2023, this Court exercised its sua sponte authority
to stay the case pending the outcome of the summary judgment
motions in the Massachusetts Action.

ECF Nos. 20, 24.

After the

Nonprofit and General Partner filed an interlocutory appeal in the
Massachusetts state court litigation, the Court lifted its stay in
a July 27, 2023 conference and permitted the parties to bring their
proposed motions while the appeal was pending.

ECF No. 28.

On

August 11, 2023, the Court set a schedule for the parties to brief
the motion to dismiss.

ECF No. 30.

On September 1, 2023, CohnReznick filed its motion to dismiss,
ECF No. 33, and accompanying memorandum of law, ECF No. 33-10,

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along with supporting declarations and exhibits, ECF Nos. 33-1 –
33-9.
motion

On September 14, 2023, the Nonprofit, a non-party, filed a
to

intervene

and

dismiss,

ECF

No.

35,

along

with

a

memorandum of law, ECF No. 36, and supporting exhibits, ECF Nos.
36-1 – 36-6.

On October 6, 2023, AMTAX filed its memorandum of

law in opposition to defendant’s motion, ECF No. 42 (“Opp.”), and
on October 20, 2023, its memorandum of law in opposition to the
Nonprofit’s motion, ECF No. 43.

On October 30, 2023, CohnReznick

filed its reply brief, ECF No. 44 (“Reply”), and on November 13,
2023, the Nonprofit filed its reply brief, ECF No. 45.

On November

17, 2023, AMTAX sought leave to file a sur-reply memorandum of law
in opposition to both CohnReznick’s and the Nonprofit’s motions to
dismiss, which the Court granted on November 20, 2023.

See ECF

No. 46-1 (“Sur-Reply”); see also ECF Nos. 46-48.
LEGAL STANDARD
CohnReznick and proposed intervenor move to dismiss this
action under Rule 12(b)(1) for lack of subject matter jurisdiction
and Rule 12(b)(6) for failure to state a claim.

See Fed. R. Civ.

P. 12(b)(1), (6). “When presented with motions to dismiss pursuant
to both Rules 12(b)(1) and 12(b)(6), the Court must first analyze
the Rule 12(b)(1) motion to determine whether the Court has the
subject matter jurisdiction necessary to consider the merits of

-17-

the action.”

Khodeir v. Sayyed, No. 15 Civ. 8763 (DAB), 2016 WL

5817003, at *3 (S.D.N.Y. Sept. 28, 2016) (internal quotation marks
and citation omitted); see Town of West Hartford v. Operation
Rescue, 915 F.2d 92, 99 (2d Cir. 1990) (“The question of subject
matter jurisdiction must be confronted at the threshold of the
case.”).
“In resolving a motion to dismiss under Rule 12(b)(1), the
district court must take all uncontroverted facts in the complaint
(or petition) as true, and draw all reasonable inferences in favor
of the party asserting jurisdiction.”

Tandon v. Captain’s Cove

Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014)
(citation omitted). Additionally, the court may “refer to evidence
outside the pleadings.”

Makarova v. United States, 201 F.3d 110,

113 (2d Cir. 2000); see also APWU v. Potter, 343 F.3d 619, 627 (2d
Cir. 2003)

(“[W]here jurisdictional facts are placed in dispute,

the court has the power and obligation to decide issues of fact by
reference

to

evidence

outside

the

pleadings,

such

as

affidavits.”); Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011
(2d Cir. 1986) (“when, as here, subject matter jurisdiction is
challenged

under

Rule

12(b)(1),

evidentiary

presented by affidavit or otherwise”).

matter

may

be

The burden of proof is

placed on the plaintiff, who “must prove the existence of subject

-18-

matter jurisdiction by a preponderance of the evidence.”

Moser v.

Pollin, 294 F.3d 335, 339 (2d Cir. 2002).
A.

Federal Question Jurisdiction and the Grable Doctrine
As “courts of limited jurisdiction,” federal courts possess

“only that power authorized by Constitution and statute.” Kokkonen
v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
Congress has granted federal courts jurisdiction over actions
“arising under the Constitution, laws, or treaties of the United
States.”

28 U.S.C. § 1331.

jurisdiction

require

“[D]eterminations about federal

sensitive

judgments

about

congressional

intent, judicial power, and the federal system.”

Merrell Dow

Pharms. Inc. v. Thompson, 478 U.S. 804, 810 (1986).

Moreover, the

Supreme Court has “forcefully reiterated” the “need for prudence
and restraint in the jurisdictional inquiry[.]”

Id.

Typically, plaintiffs invoke federal-question jurisdiction by
pleading causes of action created by federal law.
Minton, 568 U.S. 251, 257 (2013).

See Gunn v.

However, even when a plaintiff

pleads only state-law causes of action, federal jurisdiction may
still exist in “a special and small category of cases,” Empire
Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 699 (2006),
namely, those that “implicate significant federal issues,” Grable
& Sons Metal Products, Inc. v. Darue Eng’g & Mfg., 545 U.S. 308,

-19-

312 (2005) (“Grable”); see also NASDAQ OMX Grp., Inc. v. UBS Sec.,
LLC, 770 F.3d 1010, 1019 (2d Cir. 2014) (“[T]he Supreme Court has
been

sparing

criterion.”).

in

recognizing

state

law

claims

fitting

this

It is well-settled that “the mere presence of a

federal issue in a state cause of action does not automatically
confer federal-question jurisdiction.”

Merrell Dow Pharms., 478

U.S. at 813; see also Grable, 545 U.S. at 314 (the presence of a
federal issue does not operate “as a password opening federal
courts to any state action embracing a point of federal law.”).
The Supreme Court has established a four-part test used to
determine whether federal question jurisdiction exists.
545 U.S. at 314; Gunn, 568 U.S. at 258.

Grable,

“[F]ederal jurisdiction

over a state law claim will lie if a federal issue is: (1)
necessarily raised, (2) actually disputed, (3) substantial, and
(4) capable of resolution in federal court without disrupting the
federal-state balance approved by Congress.”
258.

Gunn, 568 U.S. at

This is not a balancing test -- jurisdiction is only proper

“[w]here all four of these requirements are met.”

Id.

The

presence of these four factors indicates a “‘serious federal
interest in claiming the advantages thought to be inherent in a
federal

forum,’

which

can

be

vindicated

-20-

without

disrupting

Congress’s intended division of labor between state and federal
courts.”
B.

Id. (quoting Grable, 545 U.S. at 313-314).

Application
In the instant case, AMTAX alleges that the Court has subject

matter jurisdiction pursuant to 28 U.S.C. § 1331 “because the
action raises necessary, disputed, and substantial issues relating
to

Section

42(i)(7)

of

the

[Internal

Revenue

Code]

and

its

interplay with other provisions of the [Internal Revenue Code] and
corresponding federal regulations that extend well beyond Section
42.”

Compl. ¶ 16.

AMTAX attempts to distinguish this case from

the Federal Massachusetts Action by arguing that the case in front
of the First Circuit “dealt primarily with the interpretation of
the partnership agreement,” Opp. at 8, while the instant case
requires the Court to interpret Section 42(i)(7), see Opp. at 2,
7-8; Sur-Reply at 2.

AMTAX contends that the First Circuit

declined to reach the question of whether such claims would support
federal question jurisdiction.

Sur-Reply at 2; AMTAX Holdings

227, LLC, 15 F.4th at 558-59 (observing that AMTAX’s complaint
“suggest[ed] that interpretation of section 42(i)(7) might be
necessitated by claims for breach of provisions of the Agreement
requiring TD II not to endanger tax benefits and to comply with

-21-

section 42(i)(7),” but, because AMTAX never fleshed out that
theory, it was not properly before the court).
CohnReznick maintains that none of the four Grable factors
has

been

met

and

that

the

Court

thus

lacks

jurisdiction over AMTAX’s state law claims.

subject

matter

It also argues that

the Federal Massachusetts Action is instructive in that the First
Circuit already found that disputes relating to the ROR Agreement
do

not

support

federal

question

jurisdiction.

According

to

CohnReznick, the First Circuit’s reasoning applies equally here
because

defendant

“performed

the

[right

of

first

refusal]

calculation in accordance with its review of the [ROR Agreement].”
Reply at 3 (emphasis in original).
This Court recognizes that the allegations and parties differ
slightly in the instant case from those at issue in the Federal
Massachusetts Action.
Action,

AMTAX

has

However, as in the Federal Massachusetts

not

sustained

its

burden

of

proving

by

a

preponderance of the evidence that its claims depend on federal
tax law rather than the parties’ interpretation of a sui generis
contract.

Thus, the First Circuit’s opinion is highly instructive

to this Court’s analysis.

The Court will now consider each Grable

prong in turn.

-22-

1. The Federal Issue is Not Necessarily Raised
The first prong of the Grable test considers whether a state
law claim necessarily raises a question of federal law.
requirement

is

met

where

“the

plaintiff’s

right

to

This
relief

necessarily depends on resolution of a . . . question of federal
law.”

Empire Healthchoice Assurance, 547 U.S. at 690 (internal

quotation marks omitted); see also New York ex rel. Jacobson v.
Wells Fargo Nat’l Bank, N.A., 824 F.3d 308, 315–16 (2d Cir. 2016)
(“Jacobson”)
questions

(“A

where

state-law
the

claim

claim
is

‘necessarily’

affirmatively

raises

federal

‘premised’

on

a

violation of federal law” (citing Grable, 545 U.S. at 314)).
Federal jurisdiction only lies if “a right or immunity created by
the Constitution or laws of the United States . . . [is] an element,
and

an

essential

one,

of

the

plaintiff’s

cause

of

action.”

Tantaros v. Fox News Network, LLC, 12 F.4th 135, 141 (2d Cir.
2021).

The inquiry “must be unaided by anything alleged in

anticipation or avoidance of defenses which it is thought the
defendant may interpose . . . even if the defense is anticipated
in the plaintiff’s complaint, and even if both parties admit that
the defense is the only question truly at issue in the case.”
at 141-42 (internal quotation marks and citation omitted).

Id.
“[A]

mere speculative possibility that a federal question may arise at

-23-

some point in the proceeding” is insufficient to establish federal
jurisdiction.

Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S.

480, 493 (1983).
Here, AMTAX argues that a federal issue is necessarily raised
because its claims require the interpretation of Section 42(i)(7)
and other related Internal Revenue Code (the “Code”) provisions.
Compl. ¶ 16.

Specifically, plaintiff alleges that (1) its breach

of fiduciary duty claim depends on defendant’s calculation of the
purchase price in a manner that “was inconsistent with federal tax
law,” id. ¶ 118; (2) its professional negligence claim relates to
the same calculation that “threaten[ed] the tax benefits AMTAX
received over the life of the Partnership” by excluding exit taxes,
Opp. at 9, Compl. ¶ 126; (3) it “reasonably relied on” defendant’s
misrepresentation that it would provide independent advice to
protect its tax status, Compl. ¶ 139; and (4) defendant was
unjustly enriched by calculating the purchase price incorrectly in
order to “ingratiate itself to the low-income housing nonprofit
community,” id. ¶ 143; see also Opp. at 8-9.

According to

plaintiff, “[e]ngrained in each of these allegations is the issue
of

whether

consistent

CohnReznick’s
with

federal

interpretation of the Code.

tax

advice

tax

law,”

Opp. at 9.

-24-

and

calculations

which

requires

were
the

CohnReznick, on the other

hand, maintains that plaintiff has not necessarily raised a federal
issue because “a finding . . . that [CohnReznick] owed no duty to
AMTAX would result in the dismissal of AMTAX’s claims without
analysis of the Code.”

Reply at 4; see also Mot. at 12-13.

This Court agrees with CohnReznick, though based on slightly
different

reasoning.

Despite

AMTAX’s

repeated

attempts

to

characterize the purchase price as having been calculated pursuant
to Section 42(i)(7), see, e.g. Compl. ¶¶ 41, 88, 118, 127, 128,
143, 145, it is clear from the documents attached to AMTAX’s
complaint that the price was, in fact, calculated based on the
language contained in the ROR Agreement, see ECF No. 1-3 at 2-3
(an email chain between CohnReznick and TDC personnel discussing
the calculation of the purchase price, in which TDC’s counsel
circulated the language of the ROR Agreement’s purchase price
provision while making no reference to Section 42(i)(7)); see also
ROR Agreement at 1-2.

Thus, AMTAX’s argument that its claims rest

on the interpretation of Section 42(i)(7), rather than the ROR
Agreement, is too tenuous to support federal jurisdiction.

See

Arbaugh v. Y&H Corp., 546 U.S. 500, 513 n.10 (2006) (“A claim
invoking federal-question jurisdiction . . . may be dismissed for
want of subject-matter jurisdiction if it is not colorable, i.e.,

-25-

if it is ‘immaterial and made solely for the purpose of obtaining
jurisdiction’”).
Moreover,

plaintiff’s

Jacobson is unavailing.

attempt

Opp. at 9.

to

compare

this

case

to

Jacobson arose from a qui tam

action in which defendant allegedly filed false tax returns in
order to claim federal income tax exemptions for pooled residential
mortgage trusts.

824 F. 3d at 317.

Liability there was predicated

explicitly on the interpretation of certain definitions within the
Code and federal regulations, including “real estate mortgage
investment

conduit,”

“qualified

mortgages,”

and

“defective

obligation.” Id. at 312, 317. Here, by contrast, plaintiff simply
does not assert -- nor could it given the e-mail chain attached to
its complaint, ECF No. 1-3 -- that CohnReznick calculated the price
based on the Section 42(i)(7) of the Code rather than the ROR
Agreement.

Nor does plaintiff implicate the proper interpretation

of Section 42(i)(7) by alleging a breach of contract claim that
the ROR Agreement obligated the parties to comply with the statute
or to avoid endangering plaintiff’s tax benefits.

See AMTAX

Holdings 227, LLC, 15 F.4th at 558-59. Rejecting AMTAX’s assertion
that its case “necessarily raises a federal issue,” the First
Circuit noted that “Section 42(i)(7) provides only that ‘no Federal
income tax credit shall fail to be allowable’ when a qualifying

-26-

right of first refusal is in effect.

Nothing in the statute either

suggests or implies that it voids noncompliant right of first
refusal agreements.”
“necessarily

raise”

Id. at 557.
the

Therefore, this case does not

federal

question

of

the

correct

interpretation of Section 42(i)(7).
2. The Federal Issue is Actually Disputed
Although it is not necessary for the Court to consider the
remaining

Grable

completeness.

factors,

it

will

do

so

See Gunn, 568 U.S. at 258.

for

the

sake

of

A federal issue is

“actually disputed” where the question is “the central point of
dispute” between the parties.

Id. at 259.

Here, AMTAX argues

that the federal issue is actually disputed because its “theory of
liability involves a construction of Section 42(i)(7) and an
interpretation of the Code that CohnReznick disputes,” Opp. at 10,
while CohnReznick maintains that the central issue in dispute is
whether defendant owed any duty to plaintiff “given the lack of
privity between the parties,” Mot. at 13.
The Court does not doubt that the parties dispute the meaning
of Section 42(i)(7) and whether CohnReznick acted in accordance
with the statute.

Regardless, the other three Grable requirements

have not been satisfied.

-27-

3. The Federal Issue is Not Substantial
The third factor, that the federal issue be “substantial,”
requires the Court to determine whether the purported federal issue
is “importan[t] . . . to the federal system as a whole.”
568 U.S. at 260.

Gunn,

“[I]t is not enough that the federal issue be

significant to the particular parties in the immediate suit.”

Id.

Thus, “courts have typically found a substantial federal issue
only in those exceptional cases that go beyond the application of
some federal legal standard to private litigants’ state law claims,
and instead implicate broad consequences to the federal system or
the nation as a whole.”

Pritika v. Moore, 91 F. Supp. 3d 553, 558

(S.D.N.Y. 2015); see also Gunn, 568 U.S. at 263-64 (noting that
the “resolution of a patent issue in the context of a state legal
malpractice action can be vitally important to the particular
parties in that case,” but that more is needed to “demonstrat[e]
that the question is significant to the federal system as a
whole”).

An issue is likely to be substantial if it “present[s]

a nearly pure issue of law . . . that could be settled once and
for all and thereafter would govern numerous . . . other cases.”
Empire Healthchoice Assurance, 547 U.S. at 700. By contrast, cases
that

are

sufficient

“fact-bound
to

and

establish

situation-specific

federal

-28-

arising

.

under

.

.

are

not

jurisdiction.”

Gunn, 568 U.S. at 263 (internal quotation marks and citation
omitted). “[S]ubstantiality must be determined based on a careful,
case-by-case judgment.”

NASDAQ OMX Group, 770 F.3d at 1028.

According to AMTAX, the alleged federal interest here -whether CohnReznick correctly calculated the purchase price in
accordance

with

Section

42(i)(7)

--

is

“plainly

substantial”

because it “involves federal tax law” and “implicates not only the
collection of tax revenue by the Treasury, but also the proper
functioning of a federal program that is based, in significant
part, on tax incentives.”

Opp. at 10-11.

CohnReznick, on the

other hand, maintains that AMTAX’s claims do not implicate federal
activity, as the IRS is not a party to this action, Mot. at 1314, and plaintiff is not challenging “the Partnership’s right to
collect

tax

credits

for

which

AMTAX

has

already

enjoyed

the

benefit,” Reply at 5.
AMTAX’s argument is unpersuasive, as its state-law claims
ultimately rest on the interpretation of the ROR Agreement’s
purchase price provision, not federal tax law.
As

the

First

Circuit

pointed

agreements are sui generis.”

out,

“right

See supra 25-27.
of

first

refusal

AMTAX Holdings 227, LLC, 15 F. 4th

at 558. This point is bolstered by at least one of the publications
cited in AMTAX’s complaint, which explains the many ways in which

-29-

participants in the LIHTC program may structure their right of
first refusal agreements with regard to both pricing and terms.
Compl. ¶ 37; see HUD Report at 29-31.
“fact-bound

and

Thus, this case is too

situation-specific,”

Empire

Healthchoice

Assurance, 547 U.S. at 700–701, to “suggest broad significance to
the federal government or other parties,” AMTAX Holdings 227, LLC,
15 F.4th at 558.
AMTAX attempts to avoid this outcome by relying on Grable and
Jacobson for the general proposition that “claims requiring the
interpretation of the federal tax code raise a substantial federal
question.”

Opp. at 8; see also id. at 10 (citing Grable, 545 U.S.

at 315, and Jacobson, 824 F.3d at 318).

However, unlike in Grable,

plaintiff’s claims do not “center[] on the action of a federal
agency (IRS) and its compatibility with a federal statute,” but
rather

on

triggered

a
by

straightforward
a

dispute

contract

between

interpretation

private

litigants.

question
Empire

Healthchoice Assurance, 547 U.S. at 700.
And, in Jacobson, the Second Circuit found that the federal
question was substantial because the issue “govern[ed] what is now
a trillion-dollar national [mortgage-backed securities] market”
and because the plaintiff’s claims “raise[d] a threshold question
of law relating to mortgage-backed securities generally.”

-30-

824

F.3d at 318.

Conversely, AMTAX has failed to “furnish[] any basis

for concluding that a large number of LIHTC transactions would be
affected by the federal-law issue here,” i.e., whether a right of
first refusal negotiated between parties involved in the LIHTC
program must include exit taxes when calculating the purchase
price.

AMTAX Holdings 227, LLC, 15 F.4th at 558.

In fact, the

HUD Report relied on by AMTAX observed that “exit taxes are not a
major issue in establishing Year 15 sales prices,” with “[o]nly
one syndicator . . . nam[ing] recovery of exit tax liability as a
goal they seek to achieve for the LP investors.”
at

31

(emphases

added).

Thus,

even

if

See HUD Report

AMTAX’s

claims

did

necessitate an interpretation of Section 42(i)(7), this Court is
not convinced that this case would “implicate broad consequences
to the federal system or the nation as a whole,” which are required
to establish federal question jurisdiction.

Pritika, 91 F. Supp.

3d at 558; see also Mikulski v. Centerior Energy Corp., 501 F.3d
555, 570 (6th Cir. 2007) (citing Grable, 545 U.S. at 319, for the
proposition that “[w]hile the federal government may have an
interest in the uniform application of regulations that relate to
the collection of taxes, it has only a limited interest in private
tort or contract litigation over the private duties involved in
that collection. . . . The government is free to interpret and

-31-

apply the tax code as it sees fit, without the slightest regard
for this lawsuit.”).
Finally, plaintiff relies on Riseboro Cmty. Partnership v.
SunAmerica Housing Fund No. 682, 401 F. Supp. 3d 367 (E.D.N.Y.
2020) to argue that the “proper meaning of Section 42(i)(7) is a
substantial and disputed issue of federal tax law that should be
decided in federal court.”

Opp. at 2, 11.

also readily distinguishable.

However, Riseboro is

There, the plaintiff alleged that,

in order to determine whether the term “right of 1st refusal” in
Section 42(i)(7) differed from its meaning under New York common
law, the applicable agreement “‘[could not] be interpreted purely
under New York common law, but must be interpreted to be consistent
with the statutory scheme of Section 42’”.

Riseboro, 401 F. Supp.

3d at 373 (quoting Riseboro’s complaint) (emphasis added). Because
that assessment “would not be based on the specific language of
the [parties’ right of first refusal agreement] but rather on its
interpretation of Congress’ intent in drafting,” the court found
that this “purely legal question” was “substantial and [would] be
applicable to many other LIHTC agreements nationwide.”
(emphasis added).

Id. at 374

By contrast, AMTAX has failed to demonstrate

that its claims depend on the interpretation of the Tax Code rather
than

the

specific

language

-32-

of

the

ROR

Agreement

-- in fact, its own supporting documents suggest otherwise.

ECF

No. 1-3 at 2-3.

Accordingly, the Court agrees with the First

Circuit

is

that

litigation

“it

will

have

questionable
ramifications

whether
for

the

outcome

other

cases.”

of

the

AMTAX

Holdings 227, LLC, 15 F.4th at 558.
4. The Exercise of Federal Jurisdiction Would Disrupt
Congress’ Carefully Drawn Scheme
Finally, the Court turns to the fourth requirement under
Grable: whether the exercise of federal jurisdiction would disrupt
the federal-state balance. “[E]ven when the state action discloses
a contested and substantial federal question . . . the federal
issue will ultimately qualify for a federal forum only if federal
jurisdiction is consistent with congressional judgment about the
sound division of labor between state and federal courts governing
the

application

of

§

1331.”

Grable,

545

U.S.

at

313-14.

“[D]eterminations about federal jurisdiction require sensitive
judgments about congressional intent, judicial power, and the
federal system.”

Merrell Dow Pharm. Inc. v. Thompson, 478 U.S.

804, 810 (1986).

In determining whether a federal issue can be

resolved in federal court without disrupting the federal-state
judicial balance, courts should consider (1) whether Congress has
expressed any preference for state versus federal jurisdiction
over the type of claim at issue; (2) any impact on the volume of
-33-

federal court litigation if jurisdiction is accepted; (3) the
possibility
traditionally

of

causing

state

a

cases

significant
into

federal

litigants’ interest in a federal forum.

shift

of

cases;

what

and

were

(4)

the

See Jacobson, 824 F.3d at

316.
AMTAX claims that a finding of federal jurisdiction here would
not “trigger a voluminous amount of cases or transform state court
litigation” because “it is the rare such action that hinges on the
proper interpretation of an admittedly unique [right of first
refusal agreement] under federal tax law.”

Opp. at 11 (quoting

Riseboro, 401 F. Supp. 3d at 376 (internal citation and quotation
marks omitted)).

According to plaintiff, CohnReznick’s arguments

to

are

the

contrary

improperly

premised

on

cases

concerning

accountant errors where the interpretation of federal tax law was
not in dispute, while failing to provide any persuasive support
for its position that state-law claims relating to accountant error
can support federal jurisdiction.
In

response,

CohnReznick

Id.
maintains

that

it

is

well-

established that state law malpractice claims cannot satisfy this
Grable element, as it would open the floodgates to the filing of
malpractice claims in federal court.

Mot. at 15 (“Every plaintiff

who has a malpractice claim against an accountant that involves

-34-

the tax Code (which accountants rely on with regularity) and every
plaintiff

who

has

a

malpractice

claim

against

a

lawyer

that

requires interpretation of any federal statute could file such
claims in federal court.”).
While

“state

court

This Court agrees.
is

not

the

traditional

forum

for

interpretation of the federal tax laws,” Jacobson, 824 F.3d at
318, the states “have ‘a special responsibility for maintaining
standards among members of the licensed professions,’” Gunn, 568
U.S. at 264; see also Nat’l Inst. of Fam. & Life Advocs. v. Becerra,
585 U.S. 755, 769 (2018) (citing NAACP v. Button, 371 U.S. 415,
438 (1963)) (“Longstanding torts for professional malpractice . .
. ‘fall within the traditional purview of state regulation of
professional conduct.’”); Klein v. Aicher, 19 Civ. 9172 (RA), 2020
WL 4194823, at *5-6 (S.D.N.Y. Jul. 21, 2020) (dismissing for lack
of

subject

matter

jurisdiction

because,

among

other

reasons,

plaintiff’s state law claims that required some consideration of
a federal statute nonetheless raised “difficult issues” concerning
legal malpractice and requirements of privity under New York law).
Allowing federal jurisdiction over countless state-law tort claims
concerning accountants’ interpretation of the Code would clearly
disrupt the appropriate balance of federal and state judicial
responsibilities, as it is hardly “the rare . . . case [involving

-35-

accountant error] that raises a contested matter of federal [tax]
law.”

Jacobson, 824 F.3d at 316 (citing Grable, 545 U.S. at 315);

see also Gunn, 568 U.S. at 263-64 (federal question jurisdiction
not triggered for malpractice claims relating to patent litigation
because

the

resolution

of

a

“hypothetical

patent

issue”

insufficiently implicated a federal interest, particularly given
state courts’ role as the traditional forum for malpractice cases).
Moreover, as the First Circuit noted, Congress has delegated
the oversight of compliance with LIHTC program requirements to
state agencies, suggesting that states are entirely capable of
interpreting the provisions of the Code relating to the LIHTC
program.

AMTAX Holdings 227, LLC, 15 F.4th at 558.

Given this

delegation, we agree that it is unclear “how a state court could
destabilize
42(i)(7).”

the

program

by

ruling

on

the

meaning

of

section

Id.
CONCLUSION

For the reasons stated above, defendant’s motion to dismiss
for

lack

prejudice.

of

subject

matter

jurisdiction

is

granted

without

See Katz v. Donna Karan Co., 872 F.3d 114, 121 (2d

Cir. 2017) (“[W]hen a case is dismissed for lack of federal subject
matter jurisdiction, Article III deprives federal courts of the
power to dismiss the case with prejudice.”) (internal quotation

-36-

marks and citation omitted). Having concluded that the Court lacks
subject

matter

jurisdiction

in

this

case,

we

do

not

reach

defendant’s motion to dismiss for failure to state a claim or the
Nonprofit’s motion to intervene.

The Clerk of the Court is

respectfully directed to terminate the motions pending at ECF Nos.
33 and 35 and dismiss the action.

SO ORDERED.

Dated:

June 4, 2024
New York, New York
____________________________
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

-37-