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finding no futility even after the defendant harassed and intimidated contractors on the premises, defamed the plaintiff, and interfered with BSA protocol
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No. 01 Civ. 6186 (LAP)
September 30, 2002
MEMORANDUM AND ORDER
Plaintiffs Craig M. Dix ("Dix"), Paul Galluccio ("Galluccio") and Club 585, Inc. ("Club 585") bring this second amended verified complaint ("Second Amended Verified Complaint") against defendants City of New York (the "City"), former Mayor Rudolph Giuliani ("Giuliani"), the Office of the Mayor, the Office of Midtown Enforcement ("Task Force"), New York City, the Board of Standards and Appeals ("BSA"), the New York City Department of Health ("Department of Health"), the New York City Department of Buildings ("Department of Buildings"), Fashion Center District Management Association Inc., the Fashion Center Business Improvement District a/k/a The Fashion Center Bid (collectively, "BID"), and John and Jane Doe 1-10 for violations of 42 U.S.C. § 1983 and 1985, the Fourteenth Amendment to the United States Constitution, New York City Code and Charter § 8-107(9)(a) (b), defamation per se, defamation, tortious interference with contract and breach of duty of good faith and fair dealings. Defendants City, Giuliani, the Office of the Mayor, Task Force, BSA, Department of Health and Department of Buildings (collectively, the "City Defendants") now move to dismiss the Second Amended Verified Complaint pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. Further, BID also moves to dismiss the Second Amended Verified Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the foregoing reasons, BID's and the City Defendant's motions to dismiss the Second Amended Verified Complaint are granted.
According to BID, plaintiffs erroneously name "Fashion Center District Management Association, Inc." and "The Fashion Center Business Improvement District" as separate defendants when, in actuality, they are a single entity. (Mem. Law Supp. Fashion Ctr. Dist. Mgmt. Ass'n Inc.'s Mot. Dismiss at 2 n. 1). In their opposition brief, plaintiffs do not appear to dispute this fact, and the Court will treat BID as a single entity for purposes of this motion.
BACKGROUND
Plaintiffs allege the following facts: on November 1, 1999, Dix and Galluccio, who are admittedly both homosexual males, incorporated Club 585 "for the purpose of operating a physical culture establishment servicing predominately, but not exclusively, the gay and lesbian community," and specifically, a "male clientele." (Second Am. Verified Compl. ¶¶ 1-2, 23-23a) The next day, plaintiffs entered into a lease with landlord Four O Realty, L.L.C. at 585 Eighth Avenue in New York City. (Id. ¶ 24).
On May 12, 2000, in an attempt to comply with Section 12-10 of the Zoning Resolution of the City of New York ("Section 12-10"), plaintiffs filed a Special Permit Application (the "Application," "Permit Application" or "Special Permit Application") with the BSA. (Id. ¶ 26). On July 27, 2000, Manhattan Community Board No. 4 ("Community Board") told the BSA that the Community Board did not oppose the Permit Application and that "the Application and plans look appropriate to an operation as described in their application as being equipped and arranged to provide instruction, services or activities which improve or affect a person's physical condition by physical exercise or by massage." (Id. ¶ 34; Ex. B).
Section 12-10 provides that a physical culture establishment is "equipped and arranged to provide instruction, services, or activities which improve or affect a person's physical condition by physical exercise or by massage." (Id.)
The Community Board held a hearing on the Permit Application, where plaintiffs disclosed their intentions to cater to a predominately male, gay and lesbian clientele. (Second Am. Verified Compl. ¶ 34a). On September 13, 2000, Inspector R. Sacklow ("Sacklow") of the BSA issued a "Stop Work" order, alleging that construction of the premises was not in conformity with the records of the BSA. (Id. ¶ 35). From the issuance of the "Stop Work" order through February 2002, plaintiffs and their associates "were denied access to the premises, said premises was padlocked and Plaintiffs were precluded from any use of the premises including but not limited to showing the premises to potential subleasors by City Defendants." (Id. ¶ 37a) Plaintiffs assert that, "[u]pon information and belief, all similarly situated Special Permit Applications engage in the same conduct and activity with the full knowledge, and without interference, of Mayor, Task Force, Health, Buildings and BSA." (Id. ¶ 36).
Plaintiffs allege that Sacklow "harassed and intimidated contractors at the premises and continued to harass and intimidate contractors by:
telephoning said individuals at home; inquiring into the immigration status of employees of the contractors; threatening to arrest those who would not cooperate; making threatening statements to the family members of contractors working at the premises; and threatening the contractors['] future ability to work within the jurisdiction of the City of New York if they continued to work on Club 585."
(Id. ¶ 38b). Sacklow also stated that the work permit issued by the Department of Buildings "was now invalidated by Task Force and that layout and design of Club 585 would not be dictated to Plaintiffs' by Task Force." (Id. ¶ 40).
Further, on September 21, 2000, Debra Filan ("Filan"), Chief of Operations for the Task Force, sent a letter to the BSA opposing the Permit Application. Filan's letter provided in pertinent part:
During a routine code inspection by the inspection task force of this office, the Construction Inspector issued a stop work order on September 14, 2000 at the above identified premises [Club 585] after determining that partitions, sauna, and shower rooms were being installed without approved plans or permits from the Department of Buildings. . . .
Documents submitted by the applicant to the Department of Buildings (attached for your information) indicate that the business address for Club 585, Inc., the applicant seeking a special permit at this premises, is 227 E. 56th Street, New York, New York. That premises operates as a physical culture establishment under the name East Side Sauna and has been the subject of numerous violations at 56th Street since 1977 including work without permits and plans, installation of steam room and sauna without plans and permits, operating contrary to certificate of occupancy and without public assembly permit, or without a special permit from BSA. In 1999, inspectors from the Department of Health made observations of unsafe sex at the club operating on the second and third floors at these premises. . . .
It is this agency's position that a special permit should not be issued to this applicant in view of what has already occurred, and the history of previous noncompliance with City requirements and Health Code violations at a related establishment.
(Id. ¶¶ 41-42; see Ex. E). Plaintiffs assert that Filan's statements are false. (Second Am. Verified Compl. ¶¶ 42-43).
Plaintiffs allege that the defendants, "with the explicit approval and supervision of defendant Mayor and Task Force, . . . began a false and malicious campaign of slander and libel with the intent and purpose of ensuring that the BSA deny Plaintiffs['] pending [Permit] Application." (Id. ¶ 46).
On September 22, 2000, Dr. Joyce F. Brown, in her capacity as a Director of BID, wrote to James Chin, the Chairman of the BSA ("Chin"):
As a Director of the Fashion Center Business Improvement District, I was distressed to learn about the proposed opening of a "physical culture establishment" at 585 Eighth Avenue in Manhattan. I am strenuously opposed to this usage at that site and urge you to not approve the special permit application in the above captioned matter.
The Fashion Center is a not-for-profit organization which has been working to revitalize Manhattan's garment district for the past seven years. One of the most problematic areas for us has been Eighth Avenue between Penn Station and the Port Authority Bus Terminal. In addition to having a needle exchange program, a methadone clinic, a parole board office and several adult entertainment establishments, the area is plagued by drug dealing and other criminal activities.
It is my understanding that the owners of this proposed establishment do not intend to operate a health club, but instead utilize the premises for a sex club. It is our understanding that this ownership has opened and operated sex clubs in the past. To introduce this type of usage into this neighborhood would be extremely detrimental to neighboring businesses and the area as a whole.
If you require additional information on this matter, please contact me. I would be anxious to testify against this permit application as I believe this establishment would introduce another illegal elenient into an already beleaguered neighborhood.
(Id. ¶ 49; Ex. G). Over the course of next month, at least ten other individuals from BID, and at least eleven additional individuals at the behest of BID, wrote very similar letters to Chin. (Second Am. Verified Compl. ¶¶ 50-59, 62-73).
On September 26, 2000, Barbara Randall, Executive Director of BID, testified before the BSA as follows:
It's our understanding through some very preliminary investigation that this is being opened as a sex club . . .
We are working with the Mayor's Office of Midtown Enforcement but I will tell you that my Board members just heard of the opening of this establishment or the proposed opening of this establishment this week and we have not had the opportunity really to research it in a meaningful and thorough manner so we're asking for a postponement on the ruling. . . .
The only other thing I wanted to mention is the Community Board #4 is also represented on our Board and did oppose the opening of this site.
(Id. ¶ 60; Exs. B H).
Plaintiffs allege that, from December 2000 through February 2001, the BSA "continued to condition approval of the Application on consistently changing criteria and imposed restrictions upon Plaintiffs that are not imposed on similarly situated applicants, resulting in disparate treatment of Plaintiffs." (Second Am. Verified Compl. ¶ 76).
Plaintiffs allege that "continuing with the Application before the BSA would have been futile as the direct and proximate result of the conduct of Defendants which tainted the process and rendered it moot." (Id. ¶ 78b). Therefore, on February 6, 2001, plaintiffs withdrew their Permit Application pending before the BSA. (Id. ¶ 79). Months later, City Defendants and BID continued to oppose the Permit Application. (Id. ¶ 80)
On July 9, 2001, plaintiffs filed an original verified complaint. That complaint asserted only state law claims of defamation and tortious interference against BID. In October 2001, plaintiffs filed an amended verified complaint. BID moved to dismiss the amended verified complaint. After the parties conducted several conferences with the Court, plaintiffs were granted permission to file a second amended complaint.
In January 2002, plaintiffs filed a Second Amended Verified Complaint. In that complaint, plaintiffs allege eight different causes of action. First, plaintiffs allege violation of their civil rights under 42 U.S.C. § 1983 based upon the "disparate treatment" of plaintiffs as compared to similarly situated applications based upon the individual plaintiffs' sex, gender, gender identity and sexual orientation. (Id. ¶ 92). Second, plaintiffs allege violation of the Fourteenth Amendment of the United States Constitution based upon plaintiffs' denial of "due process and equal protection of the law." (Id. ¶ 96). Third, plaintiffs allege violation of the New York City Code and Charter § 8-107(9)(a) (b), which prohibits discrimination by agencies and agents of the City against license applicants — or the beneficiaries of the applications — based upon those individuals' sex, gender, gender identity or sexual orientation. (Id. ¶ 100) Fourth and fifth, plaintiffs allege defamation and defamation per se. (Id. ¶¶ 102-113). Sixth, plaintiffs allege tortious interference with contract, based upon plaintiffs' contracts "with third parties as part of the business of Club 585." (Id. ¶ 115). Seventh, plaintiffs allege breach of duty of good faith and fair dealing against BSA, based upon BSA's duties "to evaluate fairly and impartially the merits of the Application," to "avoid and prevent political tampering with the application process" and to "evaluate the Application in the absence of discrimination." (Id. ¶¶ 121, 123-24). Eighth, plaintiffs allege violation of 42 U.S.C. § 1985, viz., that the City Defendants and BID "colluded and conspired to fatally flaw the special permit application of Plaintiffs." (Id. ¶ 128). Plaintiffs seek at least $16 million in damages.
On February 14, 2002, BID moved to dismiss the complaint pursuant to Rule 12(b)(6). BID asserts that plaintiffs' claims should be dismissed because they "infringe BID's fundamental rights to freedom of speech, petition and association." (Mem. Law Supp. Fashion Ctr. Dist. Mgmt. Ass'n Inc.'s Mot. Dismiss at 7). BID also asserts that the alleged violations of Sections 1983 and 1985 should be dismissed because: (1) the claims are not ripe; (2) BID's communications were not state actions; (3) sexual orientation is not a protected class; (4) the Noerr-Pennington doctrine immunizes BID; and (5) the claims are vague and conclusory. (Id. at 13-20). BID claims that the Fourteenth Amendment claim should be dismissed because "the claimed availability of relief pursuant to Section 1983 precludes a direct claim under the Constitution." (Id. at 21). BID argues that the cause of action brought under the New York City Administrative Code § 8-107(9)(a) (b) should be dismissed because BID is not a city agency or a city employee. (Id. at 21-22). Further, BID asserts that the defamation and defamation per se claims should be dismissed on the ground that BID enjoys a qualified privilege. (Id. at 22-25). BID argues that the tortious interference with contract claim should be dismissed because plaintiffs have failed to identify the contracts at issue. (Id. at 25-27). Finally, BID seeks costs and attorneys' fees for defending this action, including the cost of the motion. (Id. at 27-28).
On March 1, 2002, the City Defendants also moved to dismiss the complaint pursuant to Rule 12(b). The City Defendants argue that "plaintiffs have failed to allege concrete facts that they made at least one meaningful application to obtain a special permit from the BSA." (Mem. Law Submitted Supp. City Defs.' Mot. Dismiss Comp. at 7). Therefore, according to the City Defendants, plaintiffs' claim is not ripe, nor do plaintiffs satisfy the "futility exception" to their takings claims. (Id. at 4-6). Further, the City Defendants assert that plaintiffs have failed to allege any cognizable claim for their equal protection and due process claims. (Id. at 9-13). The City Defendants argue that plaintiffs' conspiracy claim also fails because the complaint does not allege that the City Defendants and BID conspired with each other. (Id. at 14). Finally, with respect to plaintiffs' state claims, the City Defendants assert that: (1) the claim for violation of New York City Administrative Code § 8-107(9) should be dismissed because it is identical to plaintiffs' equal protection claim; (2) the defamation claims fail because, inter alia, the City Defendants are entitled to absolute immunity; (3) the claim for tortious interference with contract fails because (a) plaintiffs fail to allege that the City Defendants had knowledge of the existence of the alleged contract, and (b) the plaintiffs, not the landlord, breached the lease here; and (4) the good faith and fair dealing claim fails because no such claim exists where there is no contractual relationship between the City Defendants and the plaintiffs. (Id. at 15-18).
DISCUSSION
I. Standard for Rule 12(b)(6)
When deciding a motion to dismiss under Rule 12(b)(6), I must accept as true all well-pleaded factual allegations of the complaint and draw all inferences in favor of the pleader. See City of Los Angeles v. Preferred Communications, Inc., 476 U.S. 488, 493 (1986); Miree v. DeKalb County, 433 U.S. 25, 27 n. 2 (1977) (referring to "well-pleaded allegations");Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993). In order to avoid dismissal, plaintiff must do more than plead mere "[c]onclusory allegations or legal conclusions masquerading as factual conclusions." Gebhardt v. Allspect, Inc., 96 F. Supp.2d 331, 333 (S.D.N.Y. 2000) (quoting 2 James Wm. Moore, Moore's Federal Practice ¶ 12.34[a] [b] (3d ed. 1997)). Dismissal is proper only when "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); accord Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994).
II. Motions to Dismiss the Federal Claims
A. Section 1983
Both BID and the City Defendants assert that plaintiffs' Section 1983 claim is not ripe for review because the BSA had not yet reached a final decision on the plaintiffs' Permit Application. (Mem. Law Supp. Fashion Ctr. Dist. Mgmt. Ass'n Inc.'s Mot. Dismiss at 14-15; Mem. Law Submitted Support City Defs.' Mot. Dismiss Compl. at 4-9). Plaintiffs counter that they did not need to await a final decision because it would have been futile to do so. (Pls.' Mem. Law Opp. Defs.' Mot. Dismiss at 3-5).
For claims to be justiciable under Article III, "courts have long recognized that the controversy, as an initial matter, must be ripe."Kittay v. Giuliani, 112 F. Supp.2d 342, (S.D.N.Y. 2000) (citing Marchi v. Bd. of Cooperative Educ. Servs., 173 F.3d 469, 478 (2d Cir. 1999);Thomas v. City of New York, 143 F.3d 31, 34 (2d Cir. 1998)).
The Supreme Court has established a two-pronged test to determine whether a claim is ripe for takings-type claims. Williamson County Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985). The first prong requires that the government entity charged with implenienting the regulations in question to have reached a "final decision." Id. at 194;see Honess 52 Corp. v. Town of Fishkill, 1 F. Supp.2d 294, 301 (S.D.N.Y. 1998) (finding that the court "cannot determine whether a plaintiff has been deprived of property, arbitrary or otherwise, until it has a final decision before it"). The second prong requires plaintiffs to have sought compensation through "reasonable, certain and adequate" State provisions for obtaining compensation. Williamson, 473 U.S. at 194. Although the ripeness test in Williamson involved only a takings claim, "the same ripeness test applies to due process and equal protection claims."Goldfine v. Kelly, 80 F. Supp.2d 153, 158 (S.D.N.Y. 2000); see also Reifler v. City of Poughkeepsie, 1997 U.S. App. LEXIS 17486 (2d Cir. 1997); Southview Assocs., Ltd. v. Bongartz, 980 F.2d 84, 96-98 (2d Cir. 1992); Kittay v. Giuliani, 112 F. Supp.2d 342, 349 n. 5 (S.D.N.Y. 2000),aff'd, 252 F.3d 645 (2d Cir. 2001).
The Court of Appeals has also recognized a "futility exception" to the "final decision" requirement. Southview Assocs., Ltd. v. Bongartz, 980 F.2d 84, 98 (2d Cir. 1992). The Court of Appeals has not yet determined "what the precise contours of the futility exception are." RKO Delaware, Inc. v. City of New York, slip op., 2001 U.S. Dist. LEXIS 17644 (E.D.N.Y. Aug. 28, 2001). However, as the RKO court observed,
[o]ther circuits have adopted a narrow interpretation of the exception. The First Circuit has stated that "a sort of inevitability is required; the prospect of refusal must be certain." Goldfine v. Kelly, 80 F. Supp.2d 153, 159 (S.D.N.Y. 2000) (quoting Gilbert v. City of Cambridge, 932 F.2d 51, 61 (1st Cir. 1991)). The Ninth Circuit has held that "mere allegations by a property owner that it has done everything possible to obtain acceptance of a development proposal will not suffice to prove futility." Id. (quoting Herrington v. County of Sonoma, 857 F.2d 567, 570 (9th Cir. 1988)). . . . Other factors considered by courts in applying the exception the defendant's hostility, delay and obstruction. See id. at 160. However, since in Williamson the claim was not found ripe despite an eight-year application process, "an excessive delay would have to be considerable." Id. at 161 (quoting Kinzli, 818 F.2d at 1454 n. 5).Id. at *10-11; see also Kittay, 112 F. Supp.2d at 349 ("While the Second Circuit has yet to define the exact contours of [the futility] exception, other Circuits have interpreted the futility exception far more narrowly than what plaintiff proposes."). A plaintiff can successfully invoke the futility exception where it filed at least one "meaningful application." RKO, 2001 U.S. Dist. LEXIS 17644, at *12;Kittay, 112 F. Supp.2d at 349-50.
Plaintiffs readily admit that, while they did submit a Permit Application with the BSA, they withdrew that pending application because "continuing with the Application before the BSA would have been futile as the direct and proximate result of the conduct of Defendants which tainted the process and rendered it moot." (Second Am. Verified Compl. ¶¶ 78a, 79). To support their argument for application of the futility exception, plaintiffs assert that they have alleged facts establishing a "bias" by the defendants. (Pls.' Mem. Law Opp. Defs.' Mot. Dismiss at 7).
Plaintiffs may not invoke the futility exception to the ripeness requirement. A recent decision in this district, Goldfine v. Kelly, 80 F. Supp.2d 153 (S.D.N.Y. 2000), is particularly instructive. There, plaintiff Eric Goldfine ("Goldfine") — the trustee and beneficiary of a trust that purchased certain real property in New York ("Lakepointe Woods") — had submitted in May 1995 a subdivision plan to the Town of Carmel Planning Board ("Planning Board") for purposes of developing a residential subdivision on a portion of that property. Id. at 155. In mid-1998, over three years after submitting that plan, Goldfine filed a complaint in the United States District Court for the Southern District of New York. Goldfine alleged "unconstitutional taking of his property, denial of equal protection, denial of due process, conspiracy to interfere with his civil rights, and supervisory liability pursuant to 42 U.S.C. § 1983." Id.
Goldfine alleged that he began testing the site to gather information to prepare a Draft Environmental Impact Statement ("DEIS") which had to be submitted to the Planning Board before preliminary subdivision approval could be obtained. Id. at 156. A DEP representative assigned to oversee the preliminary fieldwork, Penny Kelly ("Kelly"), "demonstrated an `utter lack of cooperation to work with plaintiff, his engineer and staff to move forward with the required tests.'" Id. "Plaintiff's allegations of Kelly's lack of cooperation include[d] that Kelly canceled site visits, spent minimal time on the Lakepointe Woods site, worked slowly, conducted unnecessary independent soil tests, and refused to reveal any of her findings to plaintiff or plaintiff's engineer." Id. Plaintiff further alleged that "[a]t an early Planning Board meeting, strong opposition to the Lakepointe Woods project was expressed by members of the China-Barrett Association (referred in the Complaint as the `Sedgewood Club'), a civic association for adjacent property owners."Id. "Plaintiff allege[d] that Kelly showed her allegiance to the Sedgewood Club by sitting with them at Planning Board meetings and speaking with them in the hallway." Id. Further, in June 1998, "a public hearing on plaintiff's completed DEIS was held by the Planning Board."Id. According to plaintiff, Kelly "recommended to the Planning Board that it require plaintiff to file a supplenient to the DEIS to adequately address stormwater issues" and "raised the issue of whether central water and sewer systems should be required at Lakepointe Woods." Id.
Defendants moved to dismiss the complaint on Rule 12(b)(1) and 12(b)(6) grounds. In applying Williamson, the court first observed that "there is no question that there has been no final decision because plaintiff has yet to apply to the DEP for the necessary approval for his subdivision."Id. at 159. Next, the court recognized the limited applicability of the futility exception to the "final decision" requirement in these types of cases. Id. The court observed that, even if it construed plaintiff to have made a meaningful application, "[t]he Second Circuit has refused to apply the futility exception to the final decision requirement where the plaintiff has submitted, and had denied, only one application for a land-use permit." Id.
The court also rejected plaintiffs' argument that defendants "were hostile to his development and conspired to prevent him from continuing the project." Id. at 160. While acknowledging that "plaintiff's allegations of hostility are supported by allegations that Kelly failed to show up for site visits and misinterpreted the Watershed Regulations in order to make development of Lakepointe Woods more difficult," those allegations were "insufficient to show that the `prospect of refusal is certain' and invoke the narrow futility exception." Id. at 161. Further, with respect to the three years that passed between Goldfine's submission of a subdivision plan and his determination that his application was futile, the court found that "[e]ven accepting plaintiff's facts as true for the purposes of this motion, a delay of three years is insufficient to create futility, especially when considered in comparison to the eight-year delay in Williamson, where the Supreme Court found the claim was not ripe." Id. The court concluded that, "[d]espite plaintiff's allegations of defendants' hostility and attempts to delay plaintiff's project, the futility exception is not applicable to this case." Id.
In the instant case, plaintiffs assert that defendants' "bias" is established by Sacklow's issuance of a "Stop Work" order, (Second Am. Verified Compl. ¶ 35), Sacklow's harassment and intimidation of contractors at the premises, (Id. ¶ 38b), defendants' "conspiring and orchestrating a coordinated campaign of defamation," (Pls.' Mem. Law Opp. Defs.' Mat. Dismiss at 7 (citing Second Am. Verified Compl. ¶¶ 41-43, 46, 49-83, Exs. C-J), and defendants' interference "with the well-established process and protocol of BSA," (id. (citing Second Am. Verified Compl. ¶¶ 41-43, 46, 49-83, Exs. C-J)). Plaintiffs further rely upon their alleged "disparate treatment" and upon the statements of BID and those directed by BID to the BSA regarding plaintiffs' application. (Id. at 12, 20). However, these facts are very similar to those that were rejected in Goldfine as inadequate to support the futility exception, viz., that defendants acted with hostility towards the plaintiffs and attempted to delay or discontinue plaintiffs' Permit Application through, inter alia, written letters and participation in hearings before the BSA. Further, and likely dispositive in its own right, while Williamson found that the claim was not ripe despite an eight-year application process, and the court in Goldfine found that the claim was not ripe despite a three-year application period, in the instant case plaintiffs' application process lasted a mere nine months before plaintiffs withdrew their Permit Application. Therefore, as inGoldfine, the futility exception is not applicable in this case, and plaintiffs' Section 1983 claim must be dismissed.
Because I have dismissed plaintiffs' Section 1983 claim on grounds that the claim is not yet ripe, I need not address defendants' arguments with respect to this claim that: (1) the plaintiffs have failed to overcome "rational basis" scrutiny; (2) Noerr-Pennington immunizes the defendants; and (3) BID is not a state actor for purposes of Section 1983.
B. Fourteenth Amendment
BID also asserts that plaintiffs' second cause of action, which alleges a violation of the Fourteenth Amendment, should be dismissed because, as the Court of Appeals has held, "[w]hen [Section] 1983 provides a remedy, an implied cause of action grounded on the Constitution is not available." Pauk v. Board of Trustees of City University of New York, 654 F.2d 856 (2d Cir. 1981); see also, e.g., Schanzer v. Rutgers University, 934 F. Supp. 669, 679 n. 14 (D.N.J. 1996). ("[P]laintiff may not bring a claim directly under the Fourteenth Amendment where a claim is asserted under section 1983." (citing, inter alia, Turpin v. Mallet, 591 F.3d 426 (2d Cir. 1979)).
Here, in addition to their Fourteenth Amendment claim, plaintiffs also claim a violation of Section 1983. (Second Am. Verified Compl. ¶¶ 91-97). Therefore, plaintiffs' Fourteenth Amendment claim must be dismissed.
C. Section 1985
Both the City Defendants and BID move to dismiss plaintiffs' claim pursuant to 42 U.S.C. § 1985, which alleges that "the City Defendants and Fashion BID colluded and conspired to fatally flaw the special permit application of Plaintiffs." (Second Am. Verified Compl. ¶ 128; see Mem. Law Supp. Fashion Ctr. Dist. Mgmt. Ass'n Inc.'s Mot. Dismiss at 20 ("[The v]ague and conclusory conspiracy allegations in [plaintiffs'] complaint are insufficient for a constitutional conspiracy claim."); Mem. Law Submitted Supp. City Defs.' Mot. Dismiss Compl. at 14 ("Plaintiffs' eighth claim fails because plaintiffs failed to allege any facts that the City defendants and the Fashion BID did conspire with one another.").
Section 1985 provides in pertinent part:
If two or more persons in any State . . . conspire . . . for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws . . . the party so injured or deprived may have an action for the recovery of damages occasioned by such injury or deprivation, against any one or more of the conspirators.42 U.S.C. § 1985 (3). Section 1985 creates no substantive rights of its own; it simply provides a remedy for conspiracies to violate a person's right to equal protection of the laws. See, e.g., Harden v. RR Donnelly, 2002 U.S. Dist. LEXIS 12124, at *3 (E.D.Pa. Apr. 1, 2002).
"To assert a claim under Section 1985(3), a plaintiff must allege that the defendants have, with racial or other class-based discriminatory animus, conspired to deprive the plaintiff of a constitutional or other federal right." O'Diah v. New York City, slip op. (Aug. 21, 2002). "Allegations of a conspiracy must be pled with particularity and will not withstand a motion to dismiss if they are conclusory and vague." Id.
Here, plaintiffs' claim of a conspiracy between the City Defendants and BID must be dismissed. The basis in the complaint of defendants' alleged "discriminatory animus" is that plaintiffs are homosexuals. (See, e.g., Sec. Am. Verified Compl. ¶ 85). However, "[s]exual orientation discrimination will not support a 42 U.S.C. § 1985 (3) claim." Byars v. Jamestown Teachers Ass'n, 195 F. Supp.2d 401, 417 (W.D.N.Y. 2002);see also, e.g., In re Bayside Prison Litig., 190 F. Supp.2d 755, 766 n. 7 (D.N.J. 2002) ("[N]either inmates nor homosexuals are recognized classes entitled to protection under § 1985(3)."); Trigg v. New York City Transit Auth., 2001 WL 868336, at *12 (E.D.N.Y. July 26, 2001) ("[S]exual orientation discrimination will not support a 42 U.S.C. § 1985 (3) claim."); Martin v. New York State Dep't of Correctional Servs., 115 F. Supp.2d 307, 316 (N.D.N.Y. 2000) ("Because homosexuality has not been afforded either suspect or quasi-suspect classification, . . . Plaintiff cannot show that he is entitled to protection under § 1985(3)."); Segreto v. Kirshner, 977 F. Supp. 553, 565 (D. Conn. 1997). ("[W]hite heterosexual males and homosexuals are not protected classes under Section 1985(3)."). Thus, plaintiffs' Section 1985 claim must be dismissed.
III. Motion to Dismiss the State Claims
A. Defamation and defamation per se
Both the City Defendants and BID assert that plaintiffs' claims for defamation and defamation per se should be dismissed.
As the Second Circuit has explained:
There are, generally speaking, four elenients necessary to establish a prima facie case of slander [under New York tort law] (1) an oral defamatory statement of fact, (2) regarding the plaintiff, (3) published to a third party by the defendant, and (4) injury to the plaintiff. The fourth elenient is presumed when the defamatory statement takes the form of slander per se.Weldy v. Piermont Airlines, Inc., 985 F.2d 57, 61-62 (2d Cir. 1993) (citations omitted). Defamation per se "consist[s] of statements (i) charging plaintiff with a serious crime; (ii) that tend to injure another in his or her trade, business or profession; (iii) that plaintiff has a loathsome disease; or (iv) imputing unchastity to a woman." Liberman v. Geistein, 80 N.Y.2d 429, 435 (1992). The second exception,
is "limited to defamation of a kind incompatible with the proper conduct of the business, trade, profession or office itself. The statement must be made with reference to a matter of significance and importance for that purpose, rather than a more general reflection upon the plaintiff's character or qualities Thus, charges against a clergyman of drunkenness and other moral misconduct affect his fitness for the performance of the duties of his profession, although the same charges against a business man or tradesman do not so affect him."Id. at 436 (citations omitted).
"A privileged communication is one which, but for the occasion on which it is uttered, would be defamatory and actionable." Park Knoll Assocs. v. Schmidt, 59 N.Y.2d 205, 209 (1983). "Because the perceived social benefit in encouraging free speech or the discharge of governmental responsibility sometimes outweighs the individual's underlying right to a good reputation, the individual's right may have to yield to a privilege granted the speaker barring recovery of damages for the defamatory statements." Id. "Absolute privilege is based upon the personal position or status of the speaker and is limited to the speaker's official participation in the processes of government." Id. (citing Toker v. Pollak, 44 N.Y.2d 211, 219 (1978)). The public interest requires that such statements be absolutely privileged so that those discharging a public function may speak freely in doing so, insulated from harassment and fear of financial hazard (citing Toker, 44 N.Y.2d at 219).
In New York, "statements made by Hearing Officers, parties, attorneys and witnesses in the course of a quasi-judicial proceeding are absolutely privileged, notwithstanding the motive with which they are made, so long as they are material and pertinent to the issues to be resolved in the proceeding." Vogel v. State, 721 N.Y.S.2d 901, 906 (Ct.Cl. 2000) (citing numerous cases). "A proceeding is quasi-judicial and subject to the privilege when, as in the case of the hearing at issue, it is adversarial, results in a determination that derives from the application of appropriate provisions of the law to facts, and is susceptible to judicial review." Id. Letters submitted in the process of quasi-judicial proceedings may be entitled to absolute immunity. Wiener v. Weintraub, 292 N.Y.S.2d 667, 668-69 (1968) (defendants' letter to the Grievance Committee is absolutely privileged). Whether the absolute privilege attached to alleged defamatory statements is a question of law. Bensky v. Warden of City Prison, 179 N.E.2d 257, 259 (N.Y. 1932).
BSA proceedings are administrative rather than quasi-judicial in nature. See, e.g., Kent Ave. Block Ass'n v. New York City Bd. of Standards Appeals, 721 N.Y.S.2d 498, 499 (App.Div. 1st Dep't 2001). ("[A] determination of a zoning board, such as that of respondent BSA in the present case, is an administrative rather than quasi-judicial proceeding."). Nonetheless, statements made before an administrative body may be treated as statements made before a quasi-judicial body for purposes of absolute immunity consideration. As the Supreme Court, New York County, recently held:
The City Defendants erroneously claim that the BSA is a quasi-judicial entity. (Mem. Law Submitted Supp. City Defs.' Mot. Dismiss Compl. at 15-16).
[T]his court finds that Defendants' letter to the SSA Office of Hearings and Appeals should be granted absolute immunity because, like the statements in Jafar, they were relevant and made as part of a proceeding before an administrative body authorized by the Secretary of Health and Human Services. The Court recognizes that the allegations made by the Defendants against the Plaintiff are very pointed, and if untrue, may be unfair and indeed otherwise defamatory. While sympathetic to the Plaintiff's distress regarding the specific allegations, the balance between encouraging a peaceful and full resolution of disputes, with attendant airing of all relevant claims and allegations, and allowing defamation lawsuits based upon claims ultimately proven to be false or inaccurate has been historically resolved in favor of granting privilege.Desalvatore v. Washburn, 2002 WL 1869453, at *4 (N.Y.Sup.Ct. Aug. 5, 2002); see also, e.g., Missick v. Big V Supermarkets, Inc., 495 N.Y.S.2d 994, 997 (App.Div.3d Dep't 1985) ("Statements made during or for judicial proceedings, if pertinent, are absolutely privileged and cannot be used later in an action alleging defamation. This rule also encompasses communications made in the course of quasi-judicial or administrative proceedings." (citations omitted)); Herlihy v. Metropolitan Museum of Art, 608 N.Y.S.2d 770, 773 (Sup.Ct. 1994) ("[S]tatements made in judicial, quasi-judicial, or administrative proceedings are cloaked with an absolute privilege, and cannot be the basis for a subsequent claim of defamation.").
Both BID and the City Defendants are entitled to absolute immunity because any statements they may have made to the BSA were part of an administrative proceeding, i.e., plaintiffs' Permit Application. Therefore, plaintiffs' defamation and defamation per se claims as against both BID and the City Defendants are dismissed.
B. Tortious Interference with Contract
BID argues that plaintiffs' second amended complaint fails to state a claim for tortious interference with contract. (Mem. Law Supp. Fashion Ctr. Dist. Mgmt. Ass'n Inc.'s Mot. Dismiss at 25-26). In response, plaintiffs assert, without further explanation, that their complaint "sufficiently states the necessary elenients for this claims [sic]." (Pls.' Mem. Law Opp. Defs.' Mot. Dismiss at 22).
To state a claim for tortious interference, plaintiffs must demonstrate a "valid contract between the plaintiff and a third party, defendant's knowledge of that contract, defendant's intentional procurement of the third-party's breach of the contract without justification, actual breach of the contract, and damages resulting therefrom." Israel v. Wood Dolson Co., 1 N.Y.2d 116, 120 (1956). This type of claim may be dismissed where the plaintiff has failed to allege "any particular contract was breached as a result of conduct by defendant." Bushnell Corp. v. ITT Corp., 973 F. Supp. 1276, 1288 (D. Kan. 1997). As the court in Bushnell held:
Here, plaintiff has alleged that it had "contractual relations" with its customers and vendors. It has not, however, alleged that any particular contract was breached as a result of conduct by defendant. The court concludes that this most basic elenient of breach must be alleged to state a claim for tortious interference with contract.
(Id.).
Notwithstanding plaintiffs' allegations that defendants tortiously interfered with "numerous contracts entered into by Plaintiffs," (Second Am. Verified Compl. ¶ 117), the only contract to which the complaint actually refers in any detail is a lease that plaintiffs entered into with landlord Four O Realty, L.L.C. for the premises on 585 8th Avenue, (id. ¶¶ 24-25). There is, however, no allegation that the third party in the lease contract, viz., Four O Realty, L.L.C., breached its contract with plaintiffs — a necessary elenient in a tortious interference with contract claim. In fact, plaintiffs only allege that their contracts with third parties have been "damaged." (Id. ¶ 118). There is not even an allegation that plaintiffs breached the contract, let alone that the third party did so. Therefore, plaintiffs' claim for tortious interference with contract as against both BID and the City Defendants is dismissed.
C. Breach of Good Faith and Fair Dealing
The City Defendants move to dismiss plaintiffs' claim of breach of good faith and fair dealing, which is directed only at defendant BSA. (Id. ¶¶ 120-26). Plaintiffs do not allege that the City Defendants and the plaintiffs have a contractual relationship. In the absence of a contractual relationship, there is no implied obligation of good faith and fair dealing. See, e.g., Cyber Media Group, Inc. v. Island Mortgage Network, Inc., 183 F. Supp.2d 559 (E.D.N.Y. 2002). ("New York common law supports the proposition that no covenant of good faith and fair dealing arises in the absence of a contract." (citation omitted)). Therefore, plaintiffs' claim of breach of good faith and fair dealing against BSA must be dismissed.
D. New York City Administrative Code § 8-107(9)
BID asserts that plaintiffs' claim for violation of New York City Administrative Code § 8-107(9) must be dismissed because it is not "an agency authorized to issue a license or permit," as required by that statute. (Mem. Law Supp. Fashion Ctr. Dist. Mgmt. Ass'n Inc.'s Mot. Dismiss at 21). Further, the City Defendants also move to dismiss this claim on the same grounds as certain of its previous arguments, viz., that plaintiffs' claims are not ripe and that plaintiffs fail to state a claim on equal protection, due process and conspiracy grounds. (Mem. Law Submitted Supp. City Defs.' Mot. Dismiss Compl. at 15). The City Defendants also rely on the fact that "no reported authority has interpreted subdivision 9 of Admin Code § 8-107." (Id.). In response, plaintiffs respond that: (1) the fact that there is no reported authority on this statute does not preclude recovery; and (2) if BID is deemed a state actor, it may be subject to Section 8-107.
Section 8-107(9) prohibits discrimination on the basis of actual or perceived sexual orientation — along with certain other qualities such as race, color, creed, gender and disability — in connection with the granting of licenses and permits. (See N.Y.C. Admin. Code 8-107(9); William H. Danne, Jr., 18 N.Y. Jur.2d Civil Rights § 11 (2002)). As BID correctly points out, it is not "an agency authorized to issue a license or permit," plaintiffs do not so allege. Even if BID were construed to be a state actor, that construction would not give BID the power to issue license or permits. Therefore, plaintiffs' section 8-107(9) claim as against BID must be dismissed.
With respect to the City Defendants, it does appear that there is "no reported authority" interpreting section 8-107(9). While that fact alone does not preclude plaintiffs' claim, I need not interpret that statute's applicability to the City Defendants. Federal courts have power to decide state law claims that "derive from a common nucleus of operative fact" with claims arising under federal law. United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). Pursuant to 28 U.S.C. § 1367 (c)(3), however, a district court may nonetheless decline to exercise suppleniental jurisdiction over a claim if "the district court has dismissed all claims over which it has original jurisdiction." Here, all of the claims over which this Court had original jurisdiction have been dismissed. Further, the remaining state law claims have also been dismissed. Accordingly, I decline to exercise suppleniental jurisdiction over plaintiffs' section 8-107(9) claim as against the City Defendants.
E. Attorneys' Fees
Finally, BID seeks attorneys' fees for defending this action, including the cost of its motion to dismiss. According to BID, plaintiffs "have no legal or factual basis for their claims against BID," which "mocked the judicial process." (Mem. Law Supp. Fashion Ctr. Dist. Mgmt. Ass'n Inc.'s Mot. Dismiss at 28). Given the fairly complex legal issues that arose here, I decline to award attorneys' fees to BID.
CONCLUSION
BID's and the City Defendant's motions to dismiss the Second Amended Verified Complaint are granted. The Clerk of the Court shall mark this action closed and all pending motions denied as moot.
SO ORDERED.