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December 14, 1996

TOWN OF EAST HAMPTON, EAST HAMPTON TOWN BOARD, CATHERINE LESTER, individually and in her official capacities as Town Supervisor, THOMAS KNOBEL, individually and in his capacity Councilperson, PETER HAMMERLE, individually and in his capacity Councilperson, NANCY McCAFFREY, individually and in her capacity as Councilperson, and LEONARD BERNARD, individually and in his capacity as Councilperson, Defendants.

The opinion of the court was delivered by: SPATT


 SPATT, District Judge:

 This lawsuit arises from the allegations of the plaintiff, A.B.C. Home Furnishings, Inc., d/b/a ABC Carpet & Home (the "plaintiff" or "ABC") that the defendants, the Town of East Hampton (the "Town"), the East Hampton Town Board (the "Town Board"), the Town Supervisor, Catherine Lester ("Lester"), and the Town Councilpersons, Thomas Knobel ("Knobel"), Peter Hammerle ("Hammerle"), Nancy McCaffrey ("McCaffrey") and Leonard Bernard ("Bernard," collectively the "defendants"), unlawfully revoked a permit necessary to have a sale in a certain location within the Town of East Hampton, in violation of ABC's constitutional rights. The defendants move pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the Complaint arguing that the plaintiff has failed to allege a claim upon which relief may be granted. ABC opposes the motion, contending that it has adequately set forth its claims and arguing in the alternative, that in the event that the motion to dismiss is granted, that ABC should be given leave to amend its Complaint.

 I. Background

 The following facts are taken from the Complaint. ABC is a New York corporation, located in Manhattan, that sells home furnishings. The Town of East Hampton is a municipality located in Suffolk County. The Town's Board is the Town's governing body. Catherine Lester is the Town Supervisor and Thomas Knobel, Peter Hammerle, Nancy McCaffrey, and Leonard Bernard are Councilpersons who sit on the Town Board.

to hold a cocktail party and conduct a three day sale of merchandise at Dune Alpin Field in the Town of East Hampton (the "Event"), and that in exchange ABC would donate a portion of the proceeds of the three day sale to Podell House in an amount guaranteed at $ 20,000. As part of the agreement, ABC would also donate certain furnishings, with a value of $ 5,000 to Podell House.

 The arrangements were made with the aid of LBS Productions which is managed by Linda B. Shapiro. With Shapiro's assistance, Councilperson Knobel was contacted and the Event was scheduled for July 12-14, 1996.

 On April 25, 1996, Estelle A. Fox, ABC's Project Director, wrote a letter to Councilperson Knobel reiterating the company's plans to make financial contributions in the total amount of $ 25,000, and advising that the advertising budget would be "significant." On May 6, 1996, Shapiro, sent Knobel a template for advertising purposes. On May 8, 1996, Shapiro completed the application for a Town permit for the Event. The application stated the purpose of the event as follows: "To raise funds for Podell House, Friday p.m. - July 12 - cocktail party sale - Sat. - Sun. sale."

 The Town's printed application form stated:

In consideration for the issuance of the permit sought herein, without charge or fee paid to the Town of East Hampton, the applicant hereby consents and agrees that the Supervisor of the Town of East Hampton, upon the report and recommendation of the Chief of Police of the Town and/or the Acting Chief of Police of the Town, without notice or hearing, may revoke such permit granted to this applicant.

 After presentation of the application to the members of the Town Board, a meeting was held on May 17, 1996 at which Councilperson Knobel presented Resolution # 560, which was seconded by Councilperson Bernard, and provides as follows:

RESOLVED, pending receipt of the approved tent permit from the EH Town Fire Marshal's Office the application of Children's House, Inc. is hereby approved; and be further
RESOLVED, the Town Clerk is hereby directed to forward a copy of this resolution to Linda Shapiro, LBS Productions, PO box 1048, East Hampton, N.Y. 11937; Ken Scott, Superintendent, Recreation & Parks; David DiSunno, Chief Fire Marshal; Tom Scott, Chief of Police and Glen Stonemetz, EH Village Chief of Police.

 Resolution # 560 was unanimously passed. According to ABC, in reliance of the ratification of Resolution # 560, the following preparation was undertaken for the Event:

1. A tent was rented and plans to transport it from Rhode Island were made and contracted for;
2. Lodging for ABC employees to work at the event was contracted for, primarily by arranging for approximately 60 hotel rooms;
3. Advertising was disseminated to attract New Yorkers and citizens from other states to the Event;
4. Goods were bought in interstate commerce for sale at the Event;
5. Telecommunications arrangements were made for the site including computer hook-ups for credit card transactions;
6. Trash pick-up and sanitation services were contracted for;
7. Portable toilets and security personnel were contracted for;
8. Valet parking was obtained;
9. Electrical hook-ups worth approximately $ 20,000 were contracted for;
10. Outdoor furniture was rented;
11. Transportation of merchandise was planned; and

 On June 21, 1996, the Town Board passed Resolution # 656 rescheduling the time of the Event on July 12, 1996 from 6:00 p.m. - 10:00 p.m. to 1:00 p.m. - 8:00 p.m. and affirming Resolution # 560 in all other respects. On July 3, 1996, a tent permit was issued by the Town's Chief Fire Marshal and advertising was placed in Local newspapers, the New York Times, New York Magazine and Quest Magazine.

 At some point, local merchants began to object to the permits issued for the event. ABC pleads, upon information and belief, that East Hampton Business Alliance President, Sherry Wolfe, wrote a letter to Supervisor Lester opposing "a tent sale under the thin veil of charity" and demanding revocation of the permits. Further, Mariana Van, on behalf of the East Hampton Chamber of Commerce, advised the Town Board that the Chamber was "tired of working to promote local businesses while the town let in outsiders to reap the benefits." As a result of these complaints Councilperson Knobel began to express his concern that the sale was not being run as a charity event.

 In response to these concerns, on June 28, 1996 Evan Cole, ABC's president, wrote a letter to Councilperson Knobel expressing a desire to address any concerns that the Town might have with respect to the Event so that any problems could be resolved amicably. Knobel did not respond to the letter. Also on June 28, 1996, LBS productions issued a press release stating that a portion of the proceeds of the sale were going to Podell House.

 On July 5, 1996, the Town Board passed Resolution # 680 which revoked the permit for the Event on the ground that the Event was being run as a commercial enterprise rather than a charity event and that the land where the sale was to be held was zoned for residential rather than commercial use. Accordingly, ...

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