Summary
denying plaintiff's motion to amend complaint to add procedural due process claim on futility grounds, explaining that in the context of an allegedly involuntary resignation, an Article 78 proceeding is an adequate post-deprivation remedy
Summary of this case from Cronin v. LawrenceOpinion
98-CV-6277.
November 19, 2001.
MEMORANDUM ORDER
On February 2, 2001, the Court issued a Memorandum and Order in this action, granting in part and denying in part plaintiff Milton Silverman's motion for leave to file a Second Amended Complaint. See Silverman v. City of N.Y., No. 98-CV-6277, 2001 WL 218943 (E.D.N.Y. Feb. 2, 2001). In that Memorandum and Order, the Court, inter alia, denied Silverman's request for leave to assert: (i) claims that he was deprived of liberty and property interests without due process of law; (ii) conspiracy claims under 42 U.S.C. § 1983 and 1985; and (iii) a defamation claim against the City of New York. See id. at *11.
Silverman has now moved for leave to file yet another amended complaint, and once again seeks to assert the claims described above. Defendants oppose Silverman's motion with respect to all claims except the 42 U.S.C. § 1983 conspiracy claim. For the reasons set forth below, Silverman's motion is granted only insofar as it is unopposed,i.e., only with respect to his 42 U.S.C. § 1983 claim. With respect to all other claims, Silverman's motion is denied.
BACKGROUND
The facts and procedural history of this case are set forth in the Court's prior Memorandum and Order, and will not be repeated in detail herein. The gist of Silverman's complaint is that he suffered discrimination on the basis of religion, race and age while employed as a Real Estate Manager for In Rem Properties by the New York City Department of Housing Preservation and Development ("HPD"). Silverman also claims that he is the innocent victim of a plot concocted by his former supervisors and co-workers at HPD to get him fired by falsely accusing him of sexual harassment.
Silverman filed the original Complaint in this action on October 15, 1998. On December 24, 1998, before serving the summons and complaint on defendants, Silverman filed an Amended Complaint for the purpose of adding Phoebe Arnold as a defendant. On March 31, 1999, defendants filed a motion to dismiss the Amended Complaint. In response, Silverman moved for leave to file a Second Amended Complaint; that motion was the subject of the Court's previous Memorandum and Order.
Although the Court denied Silverman's previous motion with respect to his due process, conspiracy and defamation claims, Silverman once again seeks permission to assert such claims in an amended complaint. Silverman avers that the deficiencies in his prior-pled due process and conspiracy claims have been remedied, and that his defamation claim is based on "newly-acquired evidence." (Plaintiff's Memorandum of Law in Support of his Second Motion for Leave to File a Second Amended Complaint ("Pl. Mem.") at 2.)
Defendants oppose Silverman's motion, and argue that amendment would be futile with regard to all of these claims, except the Section 1983 conspiracy claim. Defendants assert that Silverman's due process claims must fail, because (i) the persons Silverman claims deprived him of his liberty and property interests without due process of law do not have policymaking authority for the City of New York, and (ii) an Article 78 proceeding was available to Silverman, and such a proceeding was all the due process to which Silverman was entitled. (See Defendants' Memorandum of Law in Opposition to Plaintiff's Motion to File a Revised Proposed Second Amended Complaint ("Def. Mem.") at 4-11.) Defendants further argue that the Section 1985(3) conspiracy claim is barred by the intra-corporate conspiracy doctrine, and that the defamation claim fails because Silverman failed to comply with New York General Municipal Law § 50-e(2) prior to filing the claim. (See id. at 12-16.)
DISCUSSION
I. The governing legal principles
Leave to amend a complaint "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). "[I]f the plaintiff has at least colorable grounds for relief, justice does so require unless the plaintiff is guilty of undue delay or bad faith or unless permission to amend would unduly prejudice the opposing party." S.S. Silberblatt, Inc. v. B. Harlem Pilot Block-Bldg. 1 Hous. Dev. Fund Co., 608 F.2d 28, 42 (2d Cir. 1979); accord Foman v. Davis, 371 U.S. 178, 182 (1962); Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 760 F.2d 1347, 1366 (2d Cir. 1985). "A trial court does not abuse its discretion in denying leave to amend a complaint which even as amended would fail to state a cause of action." S.S. Silberblatt, 608 F.2d at 42 (citing Freeman v. Marine Midland Bank-N.Y., 494 F.2d 1334, 1338 (2d Cir. 1974)). Futility of the proposed amendment is thus a sound reason to deny leave to amend.John Hancock Mut. Life Ins. Co. v. Amerford Int'l Corp., 22 F.3d 458, 462 (2d Cir. 1994); Ruffolo v. Oppenheimer Co., 987 F.2d 129, 131 (2d Cir. 1993). If the proposed claims would be subject to dismissal under Rule 12 (b)(6), a court should refuse to grant leave to amend. See Nettis v. Levitt, 241 F.3d 186, 194 n. 4 (2d Cir. 2001). Accordingly, the proposed claims "should be construed in the light most favorable to the party moving to amend, and leave to amend should be denied if it appears that the movant can prove no set of facts in support of the proposed claims that would entitle him to relief" Bank of N.Y. v. Sasson, 786 F. Supp. 349, 352 (S.D.N.Y. 1992) (citations omitted).
In general, prejudice is the most important factor for the Court to consider. See 6 Wright, Miller Kane, Federal Practice Procedure: Civil 2d § 1487 at 614-15 (West 1990) ("if the court is persuaded that no prejudice will accrue, the amendment should be allowed"); Howze v. Jones Laughlin Steel Corp., 750 F.2d 1208, 1212 (3d Cir. 1984) ("the touchstone is whether the non-moving party will be prejudiced if the amendment is allowed"); cf. Ansam Assocs., Inc. v. Cola Petroleum, Ltd., 760 F.2d 442, 446 (2d Cir. 1985) ("`the trial court [is] required to take into account any prejudice' that might result to the party opposing the amendment") (quoting Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330-31 (1971)). Where a defendant has not argued that it will be prejudiced by an amendment, leave should be granted. See Howze, 750 F.2d at 1212. Here, defendants have not argued that they will be prejudiced by Silverman's proposed Section 1983 claim — in fact, defendants have not opposed the motion for leave to add this claim at all. Accordingly, Silverman's motion for leave to amend is granted with respect to his Section 1983 claim.
II. Futility of the claims in the proposed Second Amended Complaint
A. Silverman's due process claims
In the proposed Second Amended Complaint, Silverman alleges that defendants deprived him of a constitutionally protected liberty and property interest without due process of law by (i) "disseminating the false notion that [Silverman] is a sexual deviant" and (ii) "forcing [Silverman] to waive his right to a pre-termination hearing." (Proposed Second Am. Compl. ¶ 94.) As noted above, Silverman sought leave to assert these claims in his prior motion for leave to file an amended complaint. See Silverman, 2001 WL 218943, at *4. The Court rejected Silverman's motion for leave, on the ground that the alleged deprivations were the result of "random, unauthorized acts by state employees." See id. Therefore, the Court found that Silverman could have availed himself of a post-deprivation remedy in the form of an Article 78 proceeding, and, accordingly, Silverman could not show a due process violation. Id.
In his latest motion for leave to file an amended complaint, however, Silverman alleges that the purported deprivations were caused by "municipal policymakers" — including the Commissioner of HPD, the Inspector General of HPD, the Director and Deputy Director of HPD's Disciplinary Unit, and HPD's Deputy General Counsel. (See Pl. Mem. at 7.) As a result, Silverman claims that he was denied due process not by the "random and unauthorized acts" of low-level employees, but rather by "individuals who had `final authority over the decisionmaking process.'" (Pl. Mem. at 2.) Silverman therefore claims that he was entitled to a predeprivation hearing. (See id. (citing Dwyer v. Regan, 777 F.2d 825, 832 (2d Cir. 1985)).)
The problem with Silverman's new allegations, however, is that they fail to address a problem the Court previously noted with respect to these claims: the fact that Silverman was not terminated from his position, but rather resigned. See Silverman, 2001 WL 218943, at *5. In such a situation, "it is hard to visualize what sort of prior hearing the Constitution would require the employer to conduct," because "the only possible dispute is whether the resignation was voluntary or involuntary, and this cannot be determined in advance." Giglio v. Dunn, 732 F.2d 1133, 1134-35 (2d Cir. 1984). Accordingly, such a hearing "would make little sense." Stenson v. Kerlikowske, 205 F.3d 1324 (Table), 2000 WL 254048, at **1 (2d Cir. Mar. 3, 2000); see also Silverman, 2001 WL 218943, at *5 ("Having never terminated plaintiff, it makes no sense that defendants would have been required to provide him with a pre-dismissal hearing."). Instead, Silverman should have availed himself of the post-deprivation remedy available to him: the commencement of an Article 78 proceeding.
Silverman cannot be heard to complain that his failure to commence an Article 78 proceeding resulted in a deprivation of due process.Giglio, 732 F.2d at 1135 (where Article 78 gave the employee "a meaningful opportunity to challenge the voluntariness of his resignation, he was not deprived of due process simply because he failed to avail himself of that opportunity").
Silverman argues that, because the persons who allegedly coerced him to resign are "municipal policymakers," an Article 78 proceeding is not an adequate post-deprivation remedy. (See Plaintiff's Reply Memorandum of Law in Support of his Second Motion for Leave to file a Second Amended Complaint ("Reply Mem.") at 2.) Nothing in Giglio, however, suggests that the holding in that case should apply with any less force where an employee resigns due to a municipal policy, as opposed to a "random, unauthorized act" of a low-level employee. In fact, in Stenson, the Second Circuit squarely rejected the distinction Silverman asks the Court to draw. There, the court stated:
Stenson argues that an Article 78 proceeding only suffices when the underlying deprivation was random, unauthorized, or unforeseeable, and that the Buffalo Police Department was required to provide an administrative hearing here since the deprivation was predictable and authorized pursuant to the official Drug Testing Policy. However, since Stenson alleges that he was coerced into resigning, the underlying deprivation was sufficiently unforeseeable that the availability of an Article 78 proceeding provided Stenson with "a meaningful opportunity to challenge the voluntariness of his resignation" sufficient to ensure due process. Giglio, 732 F.2d at 1135. "Had an Article 78 hearing been held, the court, with all the facts before it, could have determined whether appellant's resignation was coerced . . . ." Id. Thus, no post-deprivation hearing was required here because of the availability of an Article 78 proceeding.2001 WL 254048, at **1.
For these reasons, Silverman's proposed amendment is futile. Silverman has failed to demonstrate that the state procedural remedies available to him were inadequate, because he could have commenced an Article 78 proceeding to redress the purported discriminatory acts. Accordingly, leave to amend the complaint to assert these claims must be denied.
B. Silverman's Section 1985(3) conspiracy claim
The proposed Second Amended Complaint next alleges that defendants engaged in "a conspiracy designed to deprive plaintiff of his constitutional and federal rights," that they "were motivated by class-based animus," and that they "had an independent personal stake in achieving the objectives of the City of New York and HPD." (Proposed Second Am. Compl. ¶ 91.) This is the exact same claim the Court previously denied Silverman leave to assert. See Silverman, 2001 WL 218943, at *6. Silverman, however, avers that he has bolstered this claim by adding allegations in the proposed Second Amended Complaint allegedly demonstrating that defendants "had a tacit understanding . . . to discriminate against him and deny him equal protection. . . ." (Pl. Mem. at 6.) In response, defendants contend that, even if Silverman has alleged facts supporting an inference that defendants had an agreement to discriminate against him, the claim nevertheless is barred by the intra-corporate conspiracy doctrine. (See Def. Mem. at 12-14.)
Defendants are correct. The intra-corporate conspiracy doctrine, also known as the intra-enterprise conspiracy doctrine, is drawn from Section 1 of the Sherman Act, which prohibits contracts, combinations and conspiracies in restraint of trade. "The evil to which that statute is directed is concerted decisions of two or more business entities to take action `that, in a competitive world, each would take separately.' In consequence, the statutory requirement of a plurality of actors is not satisfied by . . . employees of a single entity acting within the scope of their employment." Johnson v. Nyack Hosp., 954 F. Supp. 717, 722 (S.D.N.Y. 1997) (internal citation omitted). Although the doctrine had its genesis in cases involving corporations, numerous courts have applied the doctrine to public entities. See, e.g., Zombro v. Balt. City Police Dep't, 868 F.2d 1364, 1371 (4th Cir. 1989); Huntemann v. City of Yonkers, No. 95 Civ. 1276, 1997 WL 527880, at *14 (S.D.N.Y. Aug. 25, 1997); Allen v. City of Chicago, 828 F. Supp. 543, 564 (N.D. Ill. 1993);Wintz v. Port Auth. of N.Y. N.J., 551 F. Supp. 1323, 1325 (S.D.N.Y. 1982); see also Rini v. Zwirn, 886 F. Supp. 543, 564 (E.D.N.Y. 1995) (collecting cases). Here, each of the defendants who allegedly conspired to deprive Silverman of his "constitutional and federal rights" was an HPD employee, and each purportedly acted within the scope of his or her employment in "discriminating" against Silverman. (See Proposed Second Am. Compl. ¶¶ 10-18, 85, 101.) The intra-corporate conspiracy doctrine therefore is applicable.
Silverman argues that the "personal interest" exception to the intra-corporate conspiracy doctrine saves his Section 1985(3) claim. (See Reply Mem. at 11.) The "personal interest" exception applies when "individuals within a single entity . . . are pursuing interests wholly separate and apart from the entity." Bond v. Bd. of Educ. of City of N.Y., No. 97 CV 1337, 1999 WL 151702, at *2 (E.D.N.Y. Mar. 17, 1999). Silverman attempts to invoke this exception by directing the Court's attention to paragraph 91 of the proposed Second Amended Complaint, which alleges that "defendants . . . had an independent personal stake in achieving the objectives of the City of New York and HPD." (See Reply Mem. at 11.)
The problem with this argument, however, is that the facts alleged in the proposed Second Amended Complaint do not support Silverman's conclusory allegation. The only allegations in the proposed Second Amended Complaint which Silverman points to in order to support his assertion that defendants acted in their own personal interests concern Silverman's prior loans to Lawrence and Arnold. According to Silverman, because "defendants Arnold and Lawrence owed plaintiff money at the time of his discharge, and [because] Lawrence has yet to satisfy a small claims court judgment in this regard[,] . . . the proposed Second Amended Complaint supports an inference that at least two of the defendants were motivated in part by greed." (Reply Mem. at 11 (citing proposed Second Amended Complaint ¶¶ 28-31).) This argument is flawed, for numerous reasons.
First, it utterly fails to support an inference that any defendant other than Arnold or Lawrence had a personal interest which motivated the alleged discrimination. Furthermore, the Second Amended Complaint nowhere alleges that Arnold actually owed Silverman any money when he was "constructively discharged" — rather, Arnold is alleged merely to have borrowed money from Silverman in the past. (See Proposed Second Am. Compl. ¶ 30.) And, with respect to Lawrence, it simply makes no sense to say that Lawrence's purported bad acts were somehow "motivated by greed" simply because Lawrence allegedly owed money to Silverman. In fact, by conspiring to discriminate against Silverman such that Silverman lost his job, it would appear more likely that Silverman would attempt to collect the money Lawrence owed him. In addition, there are no allegations in the complaint tying Lawrence's "bad acts" to his alleged debt to Silverman — if Lawrence was motivated by greed, as Silverman alleges, one would expect Silverman to allege that Lawrence did more than "act within the scope of [his] employment when [he] discriminated against plaintiff" (Proposed Second Am. Compl. ¶ 85;see also id. ¶ 101.) As the Bond court noted, "plaintiff alleges only the classic circumstance for application of the intra[-]corporate conspiracy doctrine, namely, that defendants acted within the scope of their employment." 1999 WL 151702, at *2.
For these reasons, Silverman's proposed Section 1985(3) claim would be subject to dismissal. Accordingly, leave to amend his complaint to assert that claim must be denied.
C. Silverman's defamation claim
Silverman also seeks leave to add a defamation claim against the City of New York, based on a statement allegedly made by "HPD employees" that Silverman "had paid female HPD employees money to touch his penis." (Proposed Second Am. Compl. ¶ 99.) Silverman did not file a Notice of Claim with the City regarding this statement until December 5, 2000, more than two years after he commenced this action. The delay in asserting this claim is inexcusable, and therefore leave to assert this claim will not be permitted.
Silverman apparently takes issue with other statements like this one, but does not specify the contents of those statements, or who made them, in the proposed Second Amended Complaint. (See Proposed Second Am. Compl. ¶ 101.)
Silverman argues that he was unable to file a notice of claim earlier, because the allegedly defamatory statement is contained in a document which Silverman did not receive until November 3, 2000, when the City produced the document in response to requests for production propounded by Silverman. (See Reply Mem. at 12-13; Def. Mem. at 16.) But it is unclear why Silverman did not serve document requests on the City until September of 2000. Silverman has offered no explanation for his delay in serving document requests, and, indeed, he could have served them long before September 2000. Silverman further argues that the City was obliged to produce the document without awaiting a request for production from Silverman, pursuant to Fed.R.Civ.P. 26(b). (See Reply Mem. at 13.) The City's failure to comply with this rule, argues Silverman, should not inure to its benefit. Yet the City was under no obligation to produce the document under Rule 26; rather, it merely had to describe all documents in its possession, "by category and location," that it intended to use to support its claims or defenses. See Fed.R.Civ.P. 26(a)(1)(B). Silverman, however, could have — and, indeed, should have — requested this document long ago. Silverman's "undue delay" in seeking production of this document, and in raising the defamation claim he now seeks leave to assert, will not be countenanced, as it will alter the scope and nature of the claims in the complaint at this late stage, when discovery is complete. Accordingly, leave to amend the complaint to include a defamation claim against the City of New York is denied.
Silverman appears to argue he failed to request documents from the City earlier because his daughter, Susan Silverman, represented him in this action until September 2000, and Ms. Silverman allegedly only "has a part-time criminal law practice." (See Pl. Mem. at 1-2; Reply Mem. at 12-13.) Silverman, however, cannot take advantage of his daughter's arguable naivete of the Federal Rules of Civil Procedure; Silverman chose to engage his daughter to represent him, and he alone is responsible for the consequences of that choice.
Silverman probably meant to invoke Rule 26(a), which concerns mandatory initial disclosures, and not Rule 26(b), which concerns limitations on the scope of discovery.
CONCLUSION
For the foregoing reasons, Silverman's motion for leave to amend is granted with respect to his Section 1983 claim, and is denied with respect to his (i) due process claims, (ii) Section 1985(3) conspiracy claim, and (iii) defamation claim against the City of New York.
SO ORDERED.