Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


January 3, 2000


The opinion of the court was delivered by: Spatt, District Judge.


This case involves allegations of fraud and bribery under the Civil RICO Act and Section 1983, brought by dissatisfied bidders on a garbage hauling contract against the Town of Babylon ("the Town") and the Town officers who awarded the contract. Presently before the Court are the Defendants' motions to dismiss the Amended Complaint under Rule 12(b)(6) and Plaintiffs' Verifacts Group, Inc. and Verifacts, Inc. (collectively "Verifacts") motions for this Court to reconsider its earlier dismissal of Verifacts' claims.


This is the second time this case has been before this Court, and the factual background of the dispute that has been extensively described in Resource N.E. of Long Island, Inc. v. Town of Babylon, 28 F. Supp.2d 786 (E.D.N.Y. 1998) is deemed incorporated in this decision. Briefly, the Plaintiffs allege that the competitive bidding held by the Town of Babylon to award a commercial garbage hauling contract was actually rigged, and that Plaintiff ReSource N.E. of Long Island, Inc. ("ReSource"), the alleged low bidder on the contract, was passed over in favor of a company that had secretly made several bribes to Town officials. ReSource's Amended Complaint alleges four causes of action: a claim under the Civil RICO Act, 18 U.S.C. § 1961, based on predicate acts of bribery and mail fraud; a claim that the Defendants participated in a RICO conspiracy; Section 1983 claims that the town deprived ReSource of property without due process of law and in violation of its right to equal protection; and a claim of common law fraud against the Defendants based on their false statements regarding the fairness of the bidding process.

The Defendant Town of Babylon moves to dismiss the complaint against it pursuant to Rules 8, 9, and 12(b)(6). It contends that the Amended Complaint is needlessly redundant and prolix in violation of Rule 8, despite this Court's prior dismissal of the complaint with leave to replead. The Town also contests ReSource's standing to sue as an unsuccessful bidder under Section 1983, denying that ReSource has a property interest resulting from its bid and arguing that ReSource fails to allege violations of the Equal Protection and Due Process clauses of the Constitution. The Town further states that those same arguments warrant dismissing ReSource's claim that the Town conspired to violate ReSource's civil rights under Section 1983. The Town's motion also seeks dismissal of the common law fraud claim on the grounds that it fails to describe the alleged fraudulent statements and the speaker of them with the particularity required by Rule 9(b). Finally, the Town challenges the claims under RICO and the request for punitive damages against the Town officials in their official capacities.

Defendant Richard Schaffer, Supervisor of the Town of Babylon, moves separately to dismiss the complaint against him under Rules 9(b) and 12(b)(6). Schaffer contends that ReSource's RICO and RICO conspiracy claims should be dismissed, since they fail to plead predicate acts of mail fraud with the specificity required by Rule 9(b), because the allegations of mail fraud rely on mailings to persons other than ReSource, and because the allegations of predicate acts of bribery are not adequately pled. Schaffer also seeks dismissal of the RICO claims on the basis that the Amended Complaint fails to allege a "pattern of racketeering activity," in that the alleged predicate acts are not related or continuous, and because the Amended Complaint does not sufficiently allege a RICO "enterprise." Finally, Schaffer claims that, to the extent a Section 1983 violation is alleged, he is protected by the doctrine of qualified immunity.

Defendants Kluesener and Jacob also move to dismiss the Amended Complaint against themselves, relying on the arguments put forward by the Town and Schaffer.


In ruling on a motion under Fed. R.Civ.P. 12(b), the court is to look only to the allegations of the complaint and any documents attached to or incorporated by reference in the complaint, Newman & Schwartz v. Asplundh Tree Expert Co., 102 F.3d 660, 662 (2d Cir. 1996); to assume all well-pleaded factual allegations to be true; and to view all reasonable inferences that can be drawn from such allegations and documents in the light most favorable to the plaintiff. Dangler v. New York City Off Track Betting Corp., 193 F.3d 130, 1999 WL 742403 (2d Cir. 1999). A complaint may not be dismissed under Rule 12(b)(6) unless it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996), citing Allen v. WestPoint- Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991). The issue to be considered by the Court is not whether a plaintiff will ultimately prevail, but merely whether the claimant is entitled to offer evidence to support the claims. Id.,citing Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995).

A. As to compliance with Rule 8

The Town first moves for dismissal of the Amended Complaint on the grounds that it violates Rule 8, which states that a pleading shall contain "a short and plant statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), and that directs that "each averment of a pleading shall be simple, concise, and direct." Fed.R.Civ.P. 8(e); Resource N.E. of Long Island, Inc. v. Town of Babylon, 28 F. Supp.2d 786, 794 (E.D.N.Y. 1998); Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir. 1988). Because the purpose of Rule 8 is to ensure that the courts and adverse parties can understand a claim and frame a response to it, id., dismissal of a complaint for noncompliance with Rule 8 is usually reserved for cases in which the complaint is "so confused, ambiguous, vague, or otherwise unintelligible that its true substance, if any, is well disguised." Simmons v. Abruzzo, 49 F.3d 83, 86-87 (2d Cir. 1995).

This Court previously dismissed the Plaintiff's original 97-page, 442-paragraph complaint, finding in "excessively long winded and redundant." Resource, 28 F. Supp.2d at 795. Resource's Amended Complaint weighs in at 49 pages and 215 paragraphs, although it incorporates by reference an additional 35 pages of questionably relevant indictments. Taken as a whole, the Amended Complaint is still needlessly prolix and somewhat redundant, but is not so opaque as to defy understanding or prevent the Defendants from answering. The causes of action are sufficiently delineated and describe the alleged unlawful acts and the Defendants responsible for them with enough particularity that those Defendants can formulate a response to them. Therefore, the Town's motion to dismiss the entire Amended Complaint on the basis of noncompliance with Rule 8 is denied.

B. As to Resource's Section 1983 claims

ReSource alleges in its Amended Complaint that the Town's failure to select it for the garbage hauling contract, even though it was the lowest bidder, constituted a deprivation of ReSource's constitutional rights to due process and equal protection.

(i) As to the claim for violation of due process

In order to state a claim under Section 1983 for violation of due process, a plaintiff must first show that a government entity deprived it of a right secured by the constitution or by law. Finley v. Giacobbe, 79 F.3d 1285, 1286 (2d Cir. 1996), citing Gomez v. Toledo, 446 U.S. 635, 640, 100 S.Ct. 1920, 64 L.Ed.2d 572 (1980). A plaintiff must have a property interest in a benefit that is "more than an abstract need or desire for [the benefit . . . The plaintiff] must, instead, have a legitimate claim of entitlement to it" under state or federal law in order to state a Section 1983 claim. Id.,citing Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972).

Here, ReSource's Section 1983 claim is based on an argument that, by being the lowest bidder on the hauling contract, it has obtained a property right to have the contract awarded to it. However, New York law is clear that the lowest bidder on a public works contract does not obtain a vested interest in a public works contract. Impact Shipping, Inc. v. City of N.Y., 1997 WL 297039 (S.D.N.Y. 1997) citing Conduit & Foundation Corp. v. Metropolitan Transp. Authority, 66 N.Y.2d 144, 495 N.Y.S.2d 340, 485 N.E.2d 1005 (1985). This is especially true where the contract is awarded pursuant to a state statute like the one here, N.Y.Gen.Mun.L. § 102-w, which, as ReSource acknowledges, does not simply require the contract to be automatically awarded to the lowest bidder, but vests discretion in the Town to exercise its discretion in selecting the most beneficial bid. When official action is discretionary, "one's interest in a favorable decision does not rise to the level of a property right entitled to procedural due process protection." Walentas v. Lipper, 862 F.2d 414, 419 (2d Cir. 1988), cert. denied, 490 U.S. 1021, 109 S.Ct. 1747, 104 L.Ed.2d 183 (1989) quoting RR Village Ass'n, Inc. v. Denver Sewer Corp., 826 F.2d 1197, 1202 (2d Cir. 1987); see also Transcontrol Corp. v. Metropolitan Tran. Auth., 1987 WL 12090 (S.D.N.Y. 1987) (holding that rules and regulations requiring Transportation Authority to award contract to lowest responsible bidder contemplated exercise of discretion and thus did not confer protected property interest on the low bidder).

While ReSource acknowledges that the Town had the statutorily granted discretion to subjectively evaluate the bids, it nevertheless argues that the Town abused that discretion, and that, absent such abuse, ReSource would certainly have been awarded the contract. Citing Sullivan v. Town of Salem, 805 F.2d 81 (2d Cir. 1986) (claim of entitlement exists where, absent the alleged denial of due process, there is a certainty that the benefit would have been granted to the plaintiff). Both premises of this argument are flawed. Although ReSource alleges that the Town acted arbitrarily in selecting BSSCI, the New York State Supreme Court in Matter of Resource, N.E. of Long Island, Index No. 95-01795 (Sup.Ct. Suffolk County 1996) found in an Article 78 proceeding that the Town's evaluation of the bids was not arbitrary or capricious and that the award of the contract to BSSCI was supported by facts in the record. ReSource's failure to appeal this decision prevents it from contending here that the Town's decision was arbitrary. While this Court previously held that the issues in the Article 78 case and the broad issues in the instant case were not sufficiently similar to apply collateral estoppel principles, see 28 F. Supp.2d at 792, ReSource's argument here that the Town's decision was arbitrary is precisely the issue that the state court ruled on, and ReSource is estopped from contending otherwise.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.