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