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JAMAICA ASH & RUBBISH REMOVAL CO. v. FERGUSON

February 29, 2000

JAMAICA ASH & RUBBISH REMOVAL CO., INC., JET SANITATION SERVICE CORP., AND EMEDIO FAZZINI, PLAINTIFFS,
V.
EDWARD T. FERGUSON, INDIVIDUALLY AND AS CHAIRMAN AND EXECUTIVE DIRECTOR OF THE NEW YORK CITY TRADE WASTE COMMISSION; EDWARD J. KORIANSKY, INDIVIDUALLY AND AS A MEMBER OF THE NEW YORK CITY TRADE WASTE COMMISSION; DEBORAH WEEKS, INDIVIDUALLY AND AS A MEMBER OF THE NEW YORK CITY TRADE WASTE COMMISSION; JULES POLONETSKY, INDIVIDUALLY AND AS A MEMBER OF THE NEW YORK CITY TRADE WASTE COMMISSION; JOHN DOHERTY, INDIVIDUALLY AND AS A MEMBER OF THE NEW YORK CITY TRADE WASTE COMMISSION; THE CITY OF NEW YORK TRADE WASTE COMMISSION; THE CITY OF NEW YORK; NSH NETWORK, INC. D/B/A RESOURCE MANAGEMENT COUNCIL SERVICE; AND RESOURCE MANAGEMENT COUNCIL, INC., DEFENDANTS.



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

  MEMORANDUM & ORDER

Plaintiffs Jamaica Ash & Rubbish Removal Co., Inc., Jet Sanitation Services Corp., and Emedio Fazzini ("Fazzini" or "Plaintiffs"), bring this § 1983 action against defendants the New York City Trade Waste Commission ("TWC"); the Chairman, Executive Director, and other members of the TWC; and the City of New York ("TWC" or "City Defendants"). Plaintiffs allege that the TWC has violated the Constitution by issuing a waste carting license to defendant Resource Management Council Service ("Resource"),*fn1 a license that was conditioned on Resource's cessation of its business association with the Plaintiffs. Plaintiffs claim that, through the promulgation of this condition in its license to Resource, the City Defendants have violated the Contracts Clause; the Bill of Attainder Clause; the Due Process Clause; and the Commerce Clause.

On October 13, 1998, Plaintiffs moved by Order to Show Cause for a Temporary Restraining Order and for a preliminary injunction in order to prevent the TWC from enforcing or acting upon the restriction set. forth in paragraph eight of the Licensing Order that TWC issued to Resource. Following oral argument on October 14, 1998, the parties stipulated to the entry of a TRO pending a determination on the application for a preliminary injunction. This stipulation also was made so that the City Defendants could prepare a cross-motion for summary judgment, in order that both motions could be heard and decided simultaneously. The motions were fully submitted to the Court on March 31, 1999. Oral argument was held on September 10, 1999.

The City Defendants assert that they should be granted summary judgment on all of Plaintiffs' claims because the Contracts Clause and Bill of Attainder Clause are not applicable to the TWC as an administrative agency. Defendants also argue that Plaintiffs' Due Process Clause claim should fail because Local Law 42 is not vague as applied to Plaintiffs, and because Plaintiffs do not have a recognized liberty interest to protect. Finally, Defendants claim they are entitled to summary judgment because there is no merit to Plaintiffs' Commerce Clause claim.

This Memorandum and Order constitutes the Court's findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a). For the reasons set forth below, the Plaintiffs' application for a preliminary injunction is denied and the City Defendants' cross-motion for summary judgment is granted.

BACKGROUND

The TWC was established by Local Law 42 of 1996, codified as Title 16-A of the New York City Administrative Code ("Admin.Code"), as an attempt to release the hold that the Mafia has had on the metropolitan New York City carting industry for over forty years.*fn2 Defendants' Memorandum of Law in Support of Cross-Motion for Summary Judgment, ("Def.Mem."), at 2. Under this law, trade waste businesses are required to obtain a license from the TWC in order to participate in the New York City trade waste removal business. Id., at 3; Admin.Code § 16-505. The TWC will grant a license only after it conducts a thorough background investigation of the applicant to make sure that all who receive licenses are of "good character, honesty and integrity." Id.; Admin.Code § 16-509(a). One of the factors that the TWC looks for in its investigation is whether the applicant has any "association with any member or associate of an organized crime group as identified by a federal, state or city law enforcement or investigative agency."*fn3 Admin.Code § 15-509(a)(vi).

Pursuant to Local Law 42, the TWC is authorized to promulgate rules and regulations necessary to effectuate the law. Admin.Code § 16-504 (i). As part of these regulations, the TWC's rules provide that after an applicant has been granted a license, the licensee's principals and employees "shall not associate with a person whom such person knows or should know is a member or associate of an organized crime group." N.Y.C.R.R. § 1-09. The regulation further provides that "a person who has been identified by a federal, state, or local law enforcement agency as a member or associate of an organized crime group shall be presumed to be a member or associate of an organized crime group". Id.

On March 27, 1997, defendant Resource applied to the TWC for a license to operate a trade waste collection, removal or disposal business in New York City. City Defendants' Local Civil Rule 56.1 Statement ("Def. 56.1 Stmt."), ¶ 1. Pursuant to the power granted by Local Law 42, the TWC conducted a background investigation of Resource, and determined that Resource had recent business dealings with defendant's, Jamaica Ash and Jet Sanitation. Id., ¶ 3. Plaintiff Fazzini is the president of both Jamaica Ash and Jet Sanitation. Id., ¶ 4.

As part of the TWC's investigation, nine Resource employees were deposed. Declaration of Edward T. Ferguson ("Ferguson Decl."), ¶ 12. As part of these interviews, the employees were provided, before the depositions, with a disclosure questionnaire. Id., ¶ 10. The deponents also were provided with checklists of hundreds of names of individuals and entities connected to the waste removal industry and/or to organized crime. Id. The deponents were asked to mark on the checklists the names they knew, the persons and entities with whom they had prior contact, and those individuals whom they considered to be associated with organized crime. Id. The checklists and questionnaires were then used to focus the inquiries at the depositions and to streamline the investigation. Id., ¶¶ 10, 12.

Following its investigation into Resource, the TWC issued a Licensing Order which permitted Resource to operate a trade waste collection, removal or disposal business in New York City, subject to certain conditions. Def. 56.1 Stmt., ¶ 5. The Licensing Order was signed by defendant Ferguson as Chair of the Trade Waste Commission on July 13, 1998. Id. The Licensing Order was counter-signed by a representative of defendant Resource on July 20, 1998. Id.

One of the conditions of the Licensing Order, found in paragraph eight, was that Resource not knowingly employ or otherwise retain the services of, or do business with, Plaintiffs Jamaica Ash, Jet Sanitation, or Emedio Fazzini. Id., see also Exhibit A., at 4-5. Paragraph eight also prohibits Resource from doing any business with any person or entity that the TWC has determined lacks good character, honesty or integrity. Id. In addition to the prohibition against doing business with Plaintiffs, Resource also was prohibited from conducting business with approximately fifty other' named persons and entities. Id. The Licensing Order does not set forth the reasons for the conditions contained in paragraph eight. Id.; Plaintiffs' Local Civil Rule 56.1 Statement ("Pl. 56.1 Stmt."), ¶ 8. Although disputed by the Plaintiffs, the City Defendants maintain that they have not disclosed the basis for the conditions in paragraph eight to any representative of Resource. Def. 56.1 Stmt., ¶ 9; but see Pl. 56.1 Stmt., ¶ 9.

In defense of this lawsuit, the City Defendants claim that Plaintiffs' names were placed among the Licensing Order's paragraph eight prohibitions because Fazzini "is well known to law enforcement as having close ties to organized crime." Def. 56.1 Stmt., ¶ 4; Ferguson Decl., ¶ 14. Particularly, the City Defendants submit the affidavit of Anthony Farneti, a detective investigator assigned to the New York City Police Department's Organized Crime Investigation Division. Detective Farneti has participated in various investigations involving organized crime's connections to the garbage hauling business in New York City. Affidavit of Anthony Farneti ("Farneti Aff."), ¶¶ 1-3. Detective Farneti states that he has reviewed reliable and credible information available to the New York Police Department, and states that the NYPD has concluded that plaintiff Fazzini "has knowingly associated with, and is an organized crime associate of, Salvatore Avellino, a soldier in the Lucchese Organized Crime Family." Id., ¶ 6.

Detective Farneti further swears that he has been informed by the Federal Bureau of Investigation that it considers Fazzini to be a Lucchese Associate. Id. However, the City Defendants have not provided an affidavit from the FBI. For his part, Fazzini denies that he is now, or has ever been, a member or an associate of organized crime. Pl. 56.1 Stmt., ¶ 14; Affidavit of Emedio Fazzini ("Fazzini Aff."), ¶ 2. Plaintiffs also assert that the TWC has no evidence that Plaintiffs have knowingly associated with any member or associate of organized crime for at least the past five years. Pl. 56.1 Stmt., ¶ 17.

In support of their claim that Fazzini and his businesses are associated with organized crime, the City Defendants point out that Fazzini and Jamaica Ash had been indicted in 1984 for activities related to mob corruption of the Long Island carting industry. Ferguson Decl., ¶ 17. The 1984 indictment against Fazzini was dismissed because he inadvertently had been immunized by appearing before a Nassau County grand jury. Id. Fazzini and Jamaica paid $236,000 to settle related State civil bidrigging charges. Id. Moreover, in 1989, Fazzini and Jamaica Ash were charged by the United States with RICO and related criminal violations in a civil racketeering complaint. Id. To resolve this civil racketeering complaint, Fazzini and Jamaica Ash agreed to injunctive relief, including imposition of a federal monitor over their carting industry activities.*fn4 Id. None of this information is contained in the Licensing Order.

The TWC claims that, in accordance with its usual practice, it has treated Resource's Licensing Order as confidential, and has not disclosed its contents to anyone other than representatives of Resource. Def. 56.1 Stmt., ¶ 7. Plaintiffs dispute this contention. Pl. 56.1 Stmt., ¶ 7.

Plaintiffs have never done any business in New York City. Fazzini Aff., ¶ 5. No part of the plaintiffs' service to defendant Resource takes place in New York City. Affidavit of Patricia DiMatteo ("DiMatteo Aff."), ¶ 3. Moreover, Plaintiffs have never made an application to the TWC to carry on a waste collection, removal or disposal operation in New York City. Affidavit of Stephen P. Scaring, October 12, 1998, ¶ 1; see also Complaint, ¶ 34. However, a portion of the waste generated by Plaintiffs' customers is ultimately disposed of outside of New York State. DiMatteo Aff., ¶ 3.

LEGAL STANDARDS

I. STANDARD FOR ISSUANCE OF A PRELIMINARY INJUNCTION

The issuance of a preliminary injunction in the Second Circuit is dependent upon the movant's demonstration of (1) irreparable harm and (2) either a likelihood of success on the merits, or a sufficiently serious question as to the merits of the case to make them a fair ground for litigation and a balance of hardships tipping decidedly in its favor. Tom Doherty Assoc., Inc. v. Saban Entertainment Inc., 60 F.3d 27, 33 (2d Cir. 1995). Such relief is extraordinary and should not be granted indiscriminately. Patton v. Dole, 806 F.2d 24, 28 (2d Cir. 1986). "Irreparable harm" means injury that is actual and imminent. Tom Doherty Assoc., 60 F.3d at 37. If a monetary award will provide adequate compensation for the injury suffered, a preliminary injunction should not issue. Id. at 37-38.

II. STANDARD FOR SUMMARY

"Summary judgment is appropriate where there are no genuine disputes concerning any material facts, and where the moving party is entitled to judgment as a matter of law." In re Blackwood Assoc., L.P., 153 F.3d 61, 67 (2d Cir. 1998) (citing Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505. 91 L.Ed.2d 202 (1986)). In deciding a summary judgment motion, the district court must resolve all ambiguities and draw all reasonable inferences in the light most favorable to the opposing party. Castle Rock Entertainment, Inc. v. Carol Publ'g Group, Inc., 150 F.3d 132, 137 (2d Cir. 1998) (citing Garza v. Marine Transp. Lines, Inc., 861 F.2d 23, 26 (2d Cir. 1988)). If there is evidence in the record as to any material fact front which an inference could be drawn in favor of the nonmovant, summary judgment is unavailable. See Holt v. KMI-Continental, Inc., 95 F.3d 123, 128 (2d Cir. 1996). The trial court's responsibility is "carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution." B.F. Goodrich v. Betkoskie, 99 F.3d 505, 522 (2d Cir. 1996) (quoting Gallo v. Prudential Residential Servs., L.P., 22 F.3d 1219, 1224 (2d Cir. 1994)).

When there is nothing more than a "metaphysical doubt as to the material facts," summary judgment is proper. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, there must exist "specific facts showing that there is a genuine issue for trial" in order to deny summary judgment as to a particular claim. Celotex, 477 U.S. at 322, 106 S.Ct. 2548. It is against this backdrop that the Court considers the instant motion.

DISCUSSION

I. IRREPARABLE HARM

Irreparable harm is the kind of harm for which monetary damages will not provide adequate compensation. See Tom Doherty Assoc., 60 F.3d at 33. In addition, the moving party must show that the harm is imminent, not remote or speculative. Reuters ...


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