of the individual city employees is insufficient to amount to 'official policy'; plaintiff has the heavy burden of demonstrating the existence of an unconstitutional municipal policy authorized by persons with final policymaking authority under state law" ( Brasch v. Koch, 1988 WL 156812 [June 29, 1988], adopted by, 713 F. Supp. 709 [S.D.N.Y. 1989]).
The foregoing cases indicate that corruption by low level employees will not sustain a Section 1983 cause of action against a municipality. Assuming that "acquiescence" alone does sufficiently state a claim, in the present case there is no evidence that the Board acquiesced in any way or failed to act to rid the DSB of the kickback scheme. On the contrary, the record indicates that a prompt investigation was conducted with the cooperation of Inspector General Sofarelli, Joyce Brauer and Borg immediately after a complaint was received. These actions were apparently the full measure of possible amelioration by the upper level DSB employees. Thus, Nu-Life failed to raise a genuine issue of material fact in regard to any acquiescence by the Board or the DSB.
Nu-Life also contends that Board and other various high level official acted with "deliberate indifference" with regard to as the alleged extortion by the inspectors, so as to constitute a "policy" designed to encourage these practices. Under this theory, Nu-Life essentially raises the same contentions as it did regarding the existence of a "custom" of corruption among DSB employees.
The "deliberate indifference" standard asserted by Nu-Life has been usually applied by the Supreme Court with regard to the issue of whether a municipality has "failed to train" an employee so as to give rise to a constitutional violation. Further, it appears that the deliberate indifference standard has been most often utilized with respect to allegations of failure to train police as to the furnishing of medical care (see Harris, supra, 109 S. Ct. at p. 1204) or the application of excessive force (See, e.g., Fiacco, supra, 783 F.2d at pp. 331-32). The term "deliberate indifference" has also been used to define a violation of the Eighth Amendment (See Estelle v. Gamble, 429 U.S. 97, 104-06, 50 L. Ed. 2d 251, 97 S. Ct. 285 ).
In this case, the question is whether the Board was deliberately indifferent to the rights of independent contractors by failing to rectify or prevent the kickback scheme and its related effects. This standard requires more than a showing of "gross negligence" (See Nahmod, supra, at p. 467). The application of the standard of deliberate indifference to the facts in this present case appear to break new ground. Neither party cited any precedent utilizing this theory in the context of facts similar to this case, namely a low level extortion scheme. However, even assuming that the application of the "deliberate indifference" standard would be appropriate to this factual scenario, it is totally unsupported by any evidence.
A policy has been defined as a "deliberate" or "conscious" choice to follow a course of action made from several alternatives (See Pembaur, supra, 475 U.S. at pp. 483-84; Oklahoma City v. Tuttle, 471 U.S. 808, 823, 85 L. Ed. 2d 791, 105 S. Ct. 2427 ). In order to establish liability on the part of the Board, Nu-Life would have to show that the alleged extortion committed by the low level DSB employees was plainly obvious to the Board and DSB, so that the need for its intervention was equally obvious, and that the Board was "deliberately indifferent" to that need. In addition, the failure to intervene must have been a "cause" of Nu-Life's business injury.
Even if the Court assumes that the Board "knew" about the conduct of the inspectors, as stated above, there is no evidence of a failure on the part of the DSB to fully, fairly, and promptly respond to such information. When this situation was brought to the attention of the DSB and the Board, prompt, proper, and meaningful investigations were undertaken, the Board of Review was temporarily halted, and criminal prosecutions were supported.
In reviewing Nu-Life's allegations and the evidence submitted, this Court concludes that Nu-Life failed to meet its burden in response to the Board's motion for summary judgment. That burden could only be satisfied by offering evidence from which to reasonably infer that a genuine issue of material fact exists on the issue of a custom or policy of corruption, acquiescence or deliberate indifference. The Court finds that Nu-Life failed to demonstrate a "policy of inaction", is a matter of law (see Gentile v. County of Suffolk, 926 F.2d 142, 155-53 [2d Cir. 1991]), and accordingly, the Board's motion for summary judgment dismissing Nu-Life's civil rights claims against the Board, and its subsidiary, the DSB, must be granted.
The Individual Defendants
There are also claims made against the individual defendants named in the complaint. These claims must rise to a level that implicates the deprivation of a constitutional right. To determine whether the claims of deprivation of First Amendment, Due Process, and Equal Protection rights rise to a constitutional level, the court will examine each claim seriatim.
Nu-Life alleges violations of its First Amendment right to engage in constitutionally protected public speech by contending that the Board of Review proceeding was instituted in retaliation for the complaints Nu-Life lodged against the Board and DSB. While this claim is vaguely pleaded in the complaint, it is argued by Nu-Life on this motion that it is based upon the deprivation of Nu-Life's employment interest.
A line of cases deal with public speech in the realm of government employment holding that in determining whether there was a violation of First Amendment rights, it is the role of the courts to "balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees" ( Pickering v. Board of Education, 391 U.S. 563, 568, 20 L. Ed. 2d 811, 88 S. Ct. 1731 ; see also Ezekwo v. New York City Health & Hospitals Corp., 940 F.2d 775, 780 [2d Cir.] [quoting Pickering, supra, 391 U.S. at p. 568], cert. denied, 116 L. Ed. 2d 749, 112 S. Ct. 657 ).
In discussing the Pickering balancing approach, the Supreme Court stated that "whether an employee's speech addresses a matter of public concern must be determined by the content, form, and context of a given statement" ( Connick v. Myers, 461 U.S. 138, 103 S. Ct. 1684, 1691, 75 L. Ed. 2d 708 ).
In dealing with situations involving claims that an employee was discharged or disciplined because of the exercise of First Amendment rights, the Second Circuit stated that the employee "must establish two elements to prevail on the claim: (1) that the conduct at issue was protected speech; and (2) that the speech played a substantial part in the employer's adverse employment action; i.e., that the adverse action would not have occurred but for the employee's protected actions" ( Ezekwo, supra, 940 F.2d at pp. 780-81).
In the present situation, however, Nu-Life does not have the kind of employment relationship with the government as is presented in the cases dealing with the deprivation of First Amendment rights (See id.). Nu-Life alleges that the Board of Review proceeding was a result of its complaints of extortion. As a matter of law, the court finds that the institution of a Board of Review proceeding involving a government contractor, which is a form of due process does not constitute a violation of the contractor's First Amendment rights (Cf. Downtown Auto Parks, Inc. v. City of Milwaukee, 938 F.2d 705, 709-10 [7th Cir.] [court differentiated between discharging a government employee for partisan reasons and failing to award a public contract for partisan reasons), cert. denied, 112 S. Ct. 640, 116 L. Ed. 2d 657 ; Horn v. Kean, 796 F.2d 668, 673-74 [3d Cir. 1986] [declined to extend First Amendment protection to contractors who serve as New Jersey motor vehicle agents]).
Second, Nu-Life alleges that its Fourteenth Amendment Due Process rights were violated in that it was deprived of constitutionally protected property interests. "In seeking a default without affording the contractor a pre-default hearing, in refusing to make payments due to plaintiff, in withholding jobs on which plaintiff was the lowest bidder," Nu-Life contends it was deprived of its due process rights (Fourth Amended Complaint, at P 31). These allegations appear to both address the deprivation of procedural due process by not having a hearing, and the substantive due process by alleging the taking of the property interest (see Board of Regents v. Roth, 408 U.S. 564, 576, 33 L. Ed. 2d 548, 92 S. Ct. 2701 ).
In order to assert a claim under either substantive due process or procedural due process, Nu-Life must assert that there was a property interest. According to the Second Circuits interpretation of Roth "to state a claim under . . . the Due Process Clause . . . plaintiffs were required to allege facts showing that state action deprived them of a protected property interest" ( Story v. Green, 978 F.2d 60 [2d Cir. Oct. 19, 1992] [citing Roth, supra, 408 U.S. at pp. 576-79].
Governmental action alleged to have violated the Due Process clause may only be successfully challenged "when it may be shown that it deprives a litigant of a property or liberty interest" (See General Elec. v. New York State Dept. of Labor, 936 F.2d 1448, 1453 [2d Cir. 1991]). To claim a property interest in a benefit, a plaintiff must "show more than an abstract need or desire for it" or "a unilateral expectation of it" ( Roth, supra, 408 U.S. at p. 577; see also Story, supra, 978 F.2d 60 [need more than unilateral expectation]). The existence of such property interests depend on "state law-rules or understandings that secure certain benefits and support claims of entitlement" ( Roth, supra, 408 U.S. at p. 577) such as a state contract or statute (see S&D Maintenance Co., Inc. v. Goldin, 844 F.2d 962, 965 [2d Cir. 1988]).
In order to constitute a protected property interest under Roth, there must a certain "concreteness of entitlement" to the contract right ( Walentas v. Lipper, 862 F.2d 414, 419 [2d Cir. 1988], cert. denied, 490 U.S. 1021, 104 L. Ed. 2d 183, 109 S. Ct. 1747 ; see e.g., Perry v. Sinderman, supra [tenured status in public employment]; Mathews v. Eldridge, 424 U.S. 319, 47 L. Ed. 2d 18, 96 S. Ct. 893  [social security benefits]; Arnett v. Kennedy, 416 U.S. 134, 40 L. Ed. 2d 15, 94 S. Ct. 1633  [claim to permanent civil service employment]).
The Board maintains that the termination provision contained in the bid contracts at issue, which permit termination upon written notice to the contractor, deprives Nu-Life of any constitutionally cognizable property rights in existing contracts (See, e.g., P.S. 100 Contract, Article 74, Plt's Trial Ex. 14). The Court finds that based on these termination provisions there is no "concreteness of entitlement" to future contracts, according to the terms of the contracts, therefore termination of contracts by the Board does not deprive Nu-Life of constitutionally protected property interests (See Cleveland Bd. Of Education v. Loudermill, 470 U.S. 532, 538-39, 84 L. Ed. 2d 494, 105 S. Ct. 1487 ; see e.g. S & D Maintenance, supra, 884 F.2d at p. 965).
In addition, according to the Second Circuit, "if the deprivation is caused by random, unauthorized state conduct and an adequate post-deprivation hearing is available, there is no denial of 'due process', and therefore, no constitutional violation on which to base a § 1983 claim" ( Kraebel v. New York City Dep't of Housing Preservation & Development, 959 F.2d 395, 404 [2d Cir.], cert. denied, 113 S. Ct. 326, 121 L. Ed. 2d 245 ; see also Zinermon v. Burch, 494 U.S. 113, 110 S. Ct. 975, 984, 108 L. Ed. 2d 100 ). A plaintiff may assert a Section 1983 claim when the conduct constitutes established state procedure" (Id.).
After reviewing this legal standard, this Court determines, as a matter of law, that the extortion conduct by Trapanotto and Dobrowolski do not constitute "established state procedure" and therefore Nu-Life is not entitled to bring a Section 1983 claim for the alleged deprivation since adequate state remedies are available in an Article 78 proceeding.
Nu-Life claims that it has a right to timely payment for work already performed for a state agency. The Second Circuit has stated that such right is a property interest protected by the Due Process clause (See General Electric, supra, 936 F.2d at p. 1453). However, again, Nu-Life may not maintain an action for deprivation of property without due process when there is an adequate "post-deprivation" remedy in the Article 78 proceeding.
Further, Nu-Life alleges that in withholding future jobs on which plaintiff was the lowest bidder, Nu-Life was deprived of its due process rights. Since the Second Circuit has held that there is no property interest in the non-termination of an existing government contract (see S & D Maint. Co. v. Goldin, 844 F.2d 962, 966-68 [2d Cir. 1988]; see also John's Insulation v. Siska Const. Co., 774 F. Supp. 156, 161 n.6 [S.D.N.Y. 1991]), the Court finds, as a matter of law, that there is no property right owing to Nu-Life for such future bid contracts. The right to such contracts is remote, speculative, and also terminable at the will of the Board. Therefore as to the kind of government contract at issue in the present case, there is no property interest implicated, as a matter of law.
Finally, Nu-Life alleges that its rights under the Equal Protection Clause of the Fourteenth Amendment were violated in that the Board singled out Nu-Life with malicious intent for "enforcement of oppressive measures, under color of state law" (Complaint, at P 33).
When courts address a claim of deprivation of Equal Protection rights the situations generally fall into two distinct groups. The first group consists of situations where a statute is being challenged on constitutionality grounds. The general rule for this first group of cases is that "when a statute neither impinges on a fundamental right guaranteed by the constitution nor uses a classification based on a suspect criterion such as race, nationality, alienage, or gender, the law generally will not be found to violate the Equal Protection Clause unless it has no reasonable or rational basis" ( Story, supra, 978 F.2d 60). The present situation does not fall within the group of cases challenging the constitutionality of a statute.
The second group of cases deals with a facially lawful statute which is being applied by the state in a manner which would deprive a person of Equal Protection. When addressing a claim of selective application of a facially lawful state regulation, the Second Circuit has stated that there must be a finding that
"(1) the person, compared with others similarly situated, was selectively treated, and (2) the selective treatment was motivated by an intention to discriminate on the basis of impermissible considerations, such as race or religion, to punish or inhibit the exercise of constitutional rights, or by a malicious or bad faith intent to injure the person" ( FSK Drug Corp. v. Perales, 960 F.2d 6, 10 [2d Cir. 1992]).
The factual situation in this case does not come within the purview of the second group of cases.
Since the factual scenario of this case is not within the realm of matters which are protected by the Equal Protection Clause of the Fourteenth Amendment, the Court finds, as a matter of law, that Nu-Life failed to sustain its burden of showing that it has a recognizable claim arising under the Equal Protection Clause.
Nu-Life premised its section 1983 claims against the individual defendants upon the alleged deprivation of First Amendment, Due Process, and Equal Protection rights. The Court determines, as a matter of law, that none of these alleged claims rise to a constitutional level so that Nu-Life cannot pursue its civil rights claims against any of the individual defendants named in the Fourth Amended Complaint.
Based on the foregoing, the motion for summary judgment by the defendant Board, pursuant to Fed. R. Civ. P. 56, is granted in its entirety.
In addition, since the parties fully briefed the First Amendment, Due Process, and Equal Protection claims, the Court grants summary judgment, pursuant to Fed. R. Civ. P. 56, in favor of all individual defendants on these claims.
The Fourth Amended complaint is therefore dismissed in its entirety.
Dated: Uniondale, New York
November 14, 1992
ARTHUR D. SPATT
United States District Judge
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