Businesses For A Better New York et al v. Smith et al

Filing 33

DECISION AND ORDER granting 13 Motion to Dismiss; denying 21 Motion to Dismiss. Clerk of Court to close case. Signed by Hon. Richard J. Arcara on 9/16/2010. (JMB)

Businesses For A Better New York et al v. Smith et al

Doc. 33

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF NEW YORK

B U S IN E S S E S FOR A BETTER NEW YORK, et al. Plaintiffs, v. ORDER 09-CV-891A

M. PATRICIA SMITH, in her official capacity as Commissioner of Labor for the State of New York, e t al. D e fe n d a n ts .

C u rre n tly before the Court is a motion by defendants to dismiss the c o m p la in t as barred by the doctrine of res judicata, and a cross-motion by p la in tiffs to amend the complaint to add new claims. For the reasons stated, the m o tio n to dismiss is granted and the cross-motion to amend is denied.

BACKGROUND P la in tiffs , Businesses for a Better New York (BBNY) and Paragon R e s to ra tio n (Paragon), challenge the constitutionality of a New York statute, L a b o r Law § 240(1), alleging that the statute violates the Due Process Clause of th e United States Constitution. The Defendants in this action are M. Patricia S m ith , the Commissioner of Labor, James J. W ry n n , the Superintendent of In s u ra n c e , Robert E. Beloten, the Chairman of the W o rk e rs ' Compensation 1

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Board, and Andrew M. Cuomo, Attorney General of the State of New York, all of w h o m are named in their official capacities. Plaintiffs seek injunctive relief d ire c tin g the Defendants to immediately cease enforcement of § 240(1). D e fe n d a n ts moved to dismiss this action asserting that plaintiffs' due p ro c e s s claim is barred by the doctrine of res judicata because it could have been ra is e d in an earlier case between the same parties. Specifically, on October 6, 2 0 0 6 , plaintiffs BBNY and Paragon (along with several other business entities w h o are not parties to this suit) previously commenced an action in this Court c h a lle n g in g the constitutionality of § 240(1), along with a related statute, Labor L a w § 241(6), on grounds other than those raised here. See Businesses for a B e tte r New York v. Valone, et al., 06-CV-669 (W .D .N .Y ). There, plaintiffs a s s e rte d that §§ 240(1) and 241(6) (together, the "scaffold laws") violated their E q u a l Protection rights and the dormant Commerce Clause of the United States C o n s titu tio n . Plaintiffs further asserted that the scaffold laws violated the S u p re m a c y Clause because they purportedly were preempted by the federal O c c u p a tio n a l Safety and Health Act of 1970, 29 U.S.C. § 653(b)(4) (OSHA). M a g is tra te Judge Hugh B. Scott, to whom the matter had been referred, is s u e d a report and recommendation on May 31, 2007 recommending that the d e fe n d a n ts ' motion to dismiss all of the claims in that case be granted. Plaintiffs file d timely objections to the report and recommendation. In their objections, p la in tiffs asserted for the first time that the scaffold laws also violate the Due 2

Process Clause of the United States Constitution. The Court heard argument on th e objections and on September 28, 2007, this Court issued an order adopting th e report and recommendation and dismissing the plaintiffs' complaints. The C o u rt declined to address the due process argument because it was not raised in th e complaint or before the Magistrate Judge. P la in tiffs appealed that decision to the United States Court of Appeals for th e Second Circuit. On August 12, 2009, the Second Circuit issued a summary o rd e r affirming this Court's dismissal of plaintiffs' claims. The Second Circuit also d e c lin e d to address plaintiffs' due process claim because it was not raised in the c o m p la in t or in the proceedings below. Plaintiffs oppose the motion to dismiss and cross-move for leave to amend to assert additional claims that the scaffold laws violate their rights to a jury trial u n d e r the Seventh Amendment and the New York State Constitution. Defendants oppose the motion to amend asserting that those additional claims a re also barred by res judicata. The Court heard oral argument on both motions on August 31, 2010.

D IS C U S S IO N In considering a motion to dismiss for failure to state a claim upon which re lie f can be granted under Federal Rule of Civil Procedure 12(b)(6), this Court a c c e p ts the factual allegations in the complaint as true and draws all reasonable 3

inferences in the plaintiffs' favor. Harris v. Mills, 572 F.3d 66, 71-72 (2d Cir. 2 0 0 9 ). In accordance with the Supreme Court's decisions in Bell Atlantic Corp. v. T w o m b ly , 550 U.S. 544 (2007), and Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1 9 4 9 (2009). a "plausibility standard" is applied, guided by two working principles: "First, although "a court must accept as true all of the allegations contained in a c o m p la in t," that "tenet" "is inapplicable to legal conclusions," and "[t]hreadbare re c ita ls of the elements of a cause of action, supported by mere conclusory s ta te m e n ts , do not suffice." Iqbal, 129 S.Ct. at 1949. "Second, only a complaint th a t states a plausible claim for relief survives a motion to dismiss," and "[d ]e te rm in in g whether a complaint states a plausible claim for relief will ... be a c o n te xt-s p e c ific task that requires the reviewing court to draw on its judicial e xp e rie n c e and common sense." Id. at 1950. D e fe n d a n ts assert that plaintiffs' due process and right to jury trial claims a re barred by principles of res judicata. The doctrine of res judicata, otherwise k n o w n as claim preclusion, "holds that a final judgment on the merits of an action p re c lu d e s the parties or their privies from relitigating issues that were or could h a ve been raised in that action." Monahan v. N.Y. City Dep't of Corr., 214 F.3d 2 7 5 , 284 (2d Cir. 2000) (internal quotation marks omitted). "Claim preclusion b a rs a subsequent action­involving either the same plaintiffs or parties in privity w ith those plaintiffs­from asserting claims that were, or could have been, raised in a prior action that resulted in an adjudication on the merits." Bank of New York 4

v. First Millennium, Inc., 607 F.3d 905, 918 (2d Cir. 2010) (citing Allen v. McCurry, 4 4 9 U.S. 90, 94 (1980) (emphasis added). In contrast, issue preclusion, also known as collateral estoppel, bars a p la in tiff from relitigating an issue that has already been fully and fairly litigated in a prior proceeding. Purdy v. Zeldes, 337 F.3d 253, 258 (2d Cir. 2003). Issue p re c lu s io n apples when "(1) the identical issue was raised in a previous p ro c e e d in g ; (2) the issue was actually litigated and decided in the previous p ro c e e d in g ; (3) the party had a full and fair opportunity to litigate the issue; and (4 ) the resolution of the issue was necessary to support a valid and final judgment o n the merits." Ball v. A.O. Smith Corp., 451 F.3d 66, 69 (2d Cir. 2006) (internal q u o ta tio n marks omitted). C la im preclusion, and not issue preclusion, applies here. "W h e th e r or not th e first judgment will have preclusive effect depends in part on whether the same tra n s a c tio n or connected series of transactions is at issue, whether the same e vid e n c e is needed to support both claims, and whether the facts essential to the s e c o n d were present in the first." NLRB v. United Technologies Corp., 706 F.2d 1 2 5 4 , 1260 (2d Cir. 1983) (citations omitted). To establish claim preclusion, a p a rty must show that (1) the previous action involved an adjudication on the m e rits ; (2) the previous action involved the plaintiffs or those in privity with them; (3 ) the claims asserted in the subsequent action were, or could have been, raised in the prior action. Monahan, 214 F.3d at 285. 5

The first two elements are clearly met­the previous action was adjudicated o n the merits, and both actions involve the same parties. The third requirement o f claim preclusion is also met because, as defendants correctly note, plaintiffs' d u e process and right to jury trial claims could have been raised in connection w ith their first complaint. Plaintiffs have asserted no new facts that would have re n d e re d those claims unripe during the pendency of the first complaint. In other w o rd s , all of the facts alleged in the second complaint existed at the time of the p rio r action and therefore could have been brought in connection with the first c a s e . Cf, Storey v. Cello Holdings, LLC, 347 F.3d 370, 383 (2d Cir. 2003) ("C la im s arising subsequent to a prior action need not, and often perhaps could n o t, have been brought in that prior action; accordingly, they are not barred by res ju d ic a ta ."). Because all three elements of claim preclusion apply, plaintiffs are b a rre d from relitigating their due process and right to jury trial claims.

C O N C L U S IO N B e c a u s e plaintiffs' claims could have been raised in connection with the p rio r case, claim preclusion applies and the defendants' motion to dismiss must b e granted. Moreover, the motion to amend the complaint is denied as moot b e c a u s e the proposed amendment would also be subject to res judicata. The Clerk of the Court shall take all steps necessary to close the case.

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SO ORDERED.

s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA UNITED STATES DISTRICT JUDGE DATED: September 16, 2010

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