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May 23, 1997

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 AEC 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 at a 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 Amended Complaint arguing that the plaintiff has failed to allege a claim upon which relief may be granted.

 I. Background

 The following facts are taken from the Amended Complaint. ABC is a New York corporation, located in Manhattan, that sells home furnishings. Evan Cole ("Cole") is ABC's President. The Town of East Hampton is a municipality located in Suffolk County. The Town's Board is the Town's legislative 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. The non-municipal defendants are sued in their individual and official capacities.

 In the spring of 1996, ABC met with representatives of an entity referred to as Podell House, a residential program offering family mediation services and safe temporary shelter for runaway and homeless youths on the East End of Long Island. The purpose of the meeting was to discuss furnishing Podell House with ABC merchandise and a cash gift. Ultimately, it was agreed that Children's House, Inc., Podell House's parent entity would make arrangements for ABC


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.

 Am. Compl. P 16. The arrangements were made with the aid of LBS Productions ("LBS") 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 worth a 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. The defendants did not reply to this correspondence. 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.

 According to the Amended Complaint, the application was then presented to the Town Board. At this time, the defendants were aware that the proposed location for the Event, Dune Alpin Farm, "was located in a residentially zoned part of town." At a Town Board meeting held on May 17, 1996 Councilperson Knobel presented Resolution # 560, which was seconded by Councilperson Bernard, and provides as follows:


WHEREAS, an application has been received from Children's House, Inc. to hold a benefit sale at Dune Alpin Farm for the "Podell House", a not for profit home for runaway children, on July 12, 1996 through July 14, 1996; and


WHEREAS, the benefit will begin on Friday, July 12th with a cocktail party and an opening sale between the hours of 6:00 p.m. and 10:00 p.m. with the benefit sale to take place also on Saturday, July 13th between the hours of 10:00 a.m. and 8:00 p.m. and Sunday, July 14th between the hours of 8:00 a.m. and 4:00 p.m.;


* * *


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. ABC alleges that there were no conditions placed on the Event such as the cost of the goods sold or the profit to be made, or related advertising. 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;


12. Labor costs and fees for LBS Productions were incurred; and


13. Fees were paid to LBS for services rendered.

 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 subsequent unidentified point in time, 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 publicly 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. Neither Knobel nor any of the other defendants responded 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. Thus, to permit the sale to go forward would be in violation of the Town zoning ordinance.

 According to the Amended Complaint, neither ABC nor Children's House, Inc. was given notice of the proposal of Resolution # 680 or an opportunity to respond. Further, the Town Board refused to have any discussion prior to the vote despite the requests of ABC's counsel. Supervisor Lester specifically advised plaintiff's attorney and Cole that the "public input session" would follow the reading and voting on all Town Board resolutions for that day.

 ABC further pleads, upon information and belief, that on July 3, 1996, Town Attorney Richard Whelan provided the Town Board with a legal opinion that the plaintiff's sale was, in essence a commercial activity as opposed to a charitable event. Whelan based this conclusion on the fact that the Event was being advertised as a "$ 10 million" sale, only $ 25,000 of which was earmarked for the Podell House. As a result, the Town Attorney concluded that the sale would violate the Town's Zoning regulations which the Board has no authority to waive or vary.

 As a result of the passage of Resolution # 680, the plaintiff was forced to cancel the Event and place advertising in local and regional newspapers explaining the cancellation to the public. In its original complaint, ABC alleged six causes of action for violations of its constitutional rights to: (1) free speech under the First Amendment; (2) free expression under Article I, section 8 of the New York State Constitution; (3) due process under the Fifth Amendment; (4) proper enforcement of Chapter 39 of the Town Code; (5) free assembly under the First Amendment; and (6) equal protection under the Fourteenth Amendment. By Memorandum of Decision and Order the Court dismissed the original complaint in its entirety granting leave to replead only the equal protection claim. See ABC Home Furnishings, Inc. v. Town of East Hampton, 947 F. Supp. 635 (E.D.N.Y. 1996).

 An Amended Complaint was filed on January 9, 1997 in which ABC claims that the defendants have violated its equal protection rights by "(1) selectively treating ABC compared with other[ entities] similarly situated, and (2) that such selective treatment was based upon impermissible considerations such as the intent to inhibit or punish the exercise of constitutional rights." In support of its claim, ABC alleges that in the past, the Town has granted public gathering permits at the Dune Alpin Farm location to "Auctions by Kensington, Inc." in June 1992 for an automobile sale and "Hampton Classic, Inc." during successive summers prior to 1977 to hold a horse show and sell related merchandise. In addition, the Town has allegedly granted public gathering permits for exhibits and sales at other residentially zoned sites as follows: Applicant Location Date 1. Montauk Point Lions Field Aug. 31, 1996 & Lions Club Montauk Sept. 1, 1996 2. Montauk Chamber Kirk Parking Lot Sept. 7, 1996 & of Commerce Montauk Sept. 8, 1996 3. Springs Improvement Ashwagh Hall May 25, 1996 Society Springs 4. Montauk Historical Second House Museum July 13, 1996 & Society Montauk July 14, 1996 5. Montauk Historical Second House Museum Aug. 10, 1996 & Society Montauk Aug. 11, 1996 6. Linda Koren Amagansett School Dec. 7, 1996 7. Montauk Point Lions Field Sept. 2, 1995 & Lions Club Montauk Sept. 3, 1995 8. Springs Improvement Ashwagh Hall May 27, 1995 & Society Springs May 28, 1995 9. Montauk Historical Second House Museum July 15, 1995 & Society Montauk July 16, 1995 10. Montauk Historical Second House Museum Aug. 12, 1995 & Society Montauk Aug. 13, 1995 11. Montauk Historical Second House Museum Sept. 9, 1995 & Society Montauk


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