3. Equal Protection Claim
Evac next asserts that by operating New York State Police
helicopters, which are not subject to FAA regulation or federal
taxation, to conduct inter-facility transfers free of charge when
Evac is available for these services, Defendants violate Evac's
Fourteenth Amendment Equal Protection rights. In response,
Defendants argue that this claim should be dismissed because the
use of State helicopters for medical transport satisfies the
rational basis test.
The Equal Protection Clause provides, in pertinent part, that
"no State shall . . . deny to any person within its jurisdiction
the equal protection of the laws." Equal protection challenges
are limited to parties or entities that are similarly situated.
Evac does not claim that it is being treated differently than
similarly situated businesses, instead, Evac asserts that it is
being treated differently from the State. Assuming, without
deciding, that the parties are similarly situated such that an
equal protection claim is proper, the Court will consider whether
Defendants' actions pass constitutional muster.
Because Evac's equal protection challenge is not based on
infringement upon a fundamental right or suspect classification,
but rather challenges a health and welfare action, it falls under
the rational basis sphere of review. See Heller v. Doe,
509 U.S. 312, 319, 113 S.Ct. 2637, 125 L.Ed.2d 257 (1993). Thus,
Defendants' actions "must be upheld against [an] equal protection
challenge if there is any reasonably conceivable state of facts
that could provide a rational basis for" the challenged action.
Id., at 320, 113 S.Ct. 2637, (citations omitted). Defendants'
cited interest in promoting medical air transport for citizens of
New York clearly satisfies the minimal requirements of rational
basis review. See id.; see also General Motors Corp. v. Tracy,
519 U.S. 278, 117 S.Ct. 811, 136 L.Ed.2d 761 (1997). Accepting
all of Evac's factual allegations as true and drawing all
reasonable inferences from those allegations in the light most
favorable to Evac, see Desiderio v. Nat'l Assoc. of Sec.
Dealers, Inc., 191 F.3d 198, 202 (2d Cir. 1999), petition for
cert. filed, No. 95-1285 (Jan. 31, 2000), the Court finds that
Defendants' actions satisfy the rational basis test. Thus, Evac
cannot maintain an equal protection claim and Defendants' motion
to dismiss this claim is granted.
4. Due Process and Takings Claims
Evac next challenges Defendants' nonprofit medical transport
service based on the Takings and Due Process Clauses of the
Constitution. Defendants first assert that these claims must be
dismissed because Evac has not and cannot establish a protectible
(a) Protectible Property Interest
In order to establish a substantive due process, procedural due
process, or takings claim under the Fourteenth Amendment, a
plaintiff must first demonstrate that the state interfered with a
constitutionally cognizable property interest. See Kentucky
Dep't of Corrections v. Thompson, 490 U.S. 454, 460, 109 S.Ct.
1904, 104 L.Ed.2d 506 (1989) (procedural due process); Story v.
Green, 978 F.2d 60, 62 (2d Cir. 1992) (takings); RRI Realty
Corp. v. Inc. Village of Southampton, 870 F.2d 911, 918 (2d
Cir.), cert. denied, 493 U.S. 893, 110 S.Ct. 240, 107 L.Ed.2d
191 (1989). The Supreme Court has found that "to have a property
interest in a benefit, a person clearly must have more than an
abstract need or desire for it. . . . He must, instead, have a
legitimate claim of entitlement to it." Board of Regents of
State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33
L.Ed.2d 548 (1972). The Supreme Court has further held that
"[w]hile a business's assets are property, and any state taking
of those assets is a `deprivation,' business in the sense of the
activity of doing business or of making a profit is not property
at all. . . .," College Sav. Bank v. Florida Prepaid
Postsecondary Educ. Expense Bd., 527 U.S. 666, 119
S.Ct. 2219, 2222, 144 L.Ed.2d 605 (1999), and the Second Circuit
has found that the loss of a future business opportunity is not a
protectible property interest. See Asbestec Const. Servs. Inc.
v. U.S.E.P.A., 849 F.2d 765, 770 (2d Cir. 1988). Similarly,
other courts have found that potential business interests are not
protectible. See, e.g., Sanitation & Recycling Ind., Inc. v.
City of New York, 928 F. Supp. 407, 420-21 (S.D.N.Y. 1996),
aff'd, 107 F.3d 985 (2d Cir. 1997) (the right to continue
business on the same terms as in the past is not a protectible
property right); Hunter v. SEC, 879 F. Supp. 494, 497 (E.D.Pa.
1995) (lost profits from potential business opportunities are not
protectible property interests).
Evac has not demonstrated a protectible property interest. In
fact, in its Complaint, Evac does not specifically assert any
property interest implicated by Defendants' actions. Evac does
not have a protectible property interest in potential customers
who are now transported by the State, see Hunter, 879 F. Supp.
at 497, the proceeds from these customers, see id., future
business opportunities, see College Savings Bank, 119 S.Ct. at
2222, or in continuing to do business as it did prior to the
State's provision of free medical transport services. See
Sanitation & Recycling Ind., 928 F. Supp. at 420-21. Accepting
all Plaintiff's allegations as true and drawing all favorable
inferences from these allegations, in the absence of a
protectible property interest, the Court cannot conclude that
Evac's due process and takings claims are cognizable. See, e.g.,
Zahra v. Town of Southold, 48 F.3d 674, 680-82 (2d Cir. 1995).
Accordingly, the Court grants Defendants' motion to dismiss these
Assuming, arguendo, that Evac has a protectible property
interest that Defendants interfered with, Evac's claims still
(b) Takings Claim
The Supreme Court has not developed a rigid test to determine
whether a governmental action is a Taking within the meaning of
the Fourteenth Amendment; instead, the determination depends on a
factual inquiry into the circumstances of each individual case.
See Connolly, 475 U.S. at 225, 106 S.Ct. 1018. The Supreme
Court has identified three factors with "particular significance"
in this inquiry: "(1) `the economic impact of the regulation on
the claimant'; (2) `the extent to which the regulation has
interfered with distinct investment-backed expectations;' and (3)
`the character of the governmental action.'" Id. (quoting Penn
Central Transp. Co. v. New York City, 438 U.S. 104, 124, 98
S.Ct. 2646, 57 L.Ed.2d 631 (1978)). An examination of these
factors indicates that because the State did not physically
invade, permanently appropriate, or nullify all economically
viable uses of Evac's property, the State's provision of free
medical transport services does not amount to a compensable
taking. See id.; see also Lucas v. South Carolina Coastal
Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992)
(discussing definition of "total taking").
(c) Procedural Due Process
As discussed above, Evac's due process claim*fn2 must fail
because it has not alleged a protectible property interest.
Alternatively, Evac's procedural due process claim must fail
because Evac could have sought meaningful review of the State's
actions within the state court system. Where, as here, an alleged
deprivation of property is attributable to unauthorized conduct
of state officials rather than established state procedure, there
is no denial of "due process," and therefore, no constitutional
violation on which to base a
Section 1983 claim if an adequate post-deprivation hearing is
available. See Daniels v. Williams, 474 U.S. 327, 328, 106
S.Ct. 662, 88 L.Ed.2d 662 (1986); Kraebel v. NYC Dept. of Hous.
and Preservation & Dev., 959 F.2d 395, 404 (2d Cir.), cert.
denied, 506 U.S. 917, 113 S.Ct. 326, 121 L.Ed.2d 245 (1992). In
this case, Evac could have challenged the State's actions in
state court. This satisfies procedural due process.
(d) Substantive Due Process
Evac's substantive due process claim*fn3 fails because Evac
cannot prove any set of facts that would render the State's use
of helicopters for medical transport "arbitrary." "An arbitrary
action", in the constitutional sense, means more than just an
"incorrect or ill-advised" action; it must be
"conscience-shocking" or "oppressive in a constitutional sense."
Lowrance v. Achtyl, 20 F.3d 529, 537 (2d Cir. 1994); see also
County of Sacramento v. Lewis, 523 U.S. 833, 844, 118 S.Ct.
1708, 1716, 140 L.Ed.2d 1043, (1998) ("[O]nly the most egregious
official conduct can be said to be arbitrary in the
constitutional sense.") (internal quotation and citation
omitted). The State's decision to provide free medical transport
services to patients was not arbitrary or outrageous, in fact,
the State's action falls squarely within its police power. See,
e.g., Medtronic, Inc. v. Lohr, 518 U.S. 470, 475, 116 S.Ct.
2240, 135 L.Ed.2d 700 (1996) ("Throughout our history the several
States have exercised their police powers to protect the health
and safety of their citizens."); Medical Soc. of the State of
New York v. Cuomo, 976 F.2d 812, 816 (2d Cir. 1992) ("The
regulation of public health and the cost of medical care are
virtual paradigms of matters traditionally within the police
powers of the state.") (citing Hillsborough County v. Automated
Med. Lab, Inc., 471 U.S. 707, 719, 105 S.Ct. 2371, 85 L.Ed.2d
714 (1985)). Accordingly, Evac's substantive due process claim
C. Antitrust Claims
Evac's fifth cause of action alleges that Defendants have
violated Section 1 of the Sherman Act, 15 U.S.C. § 1, et. seq.
and the Clayton Act, 15 U.S.C. § 15, et seq. "in that they have
made concerted agreements to transport patients to Burlington,
[Vermont], Fletcher Allen Hospital by using tax payer paid free
services of the New York State Police. They have also used and
coerced patients of Northern New York to use Valet Air out of
Burlington, Vermont when fixed wing transport is an option
without ever mentioning the plaintiff." Complaint, ¶ 49.
Defendants argue that this claim must be dismissed because Evac
has not defined a relevant market or alleged specific antitrust
injury, as required by the Sherman and Clayton Acts and, thus,
Evac does not have standing to bring this claim. See Defs. Mem.
of Law at p. 11.
"A private plaintiff seeking damages under the antitrust laws
must establish standing to sue." Florida Seed Co., Inc. v.
Monsanto Co., 105 F.3d 1372, 1374 (11th Cir.), cert. denied,
522 U.S. 913, 118 S.Ct. 296, 139 L.Ed.2d 228 (1997). To establish
standing, a plaintiff must allege an "antitrust injury, which is
to say injury of the type the antitrust laws were intended to
prevent and that flows from that which makes defendants' acts
unlawful." Sage Realty Corp. v. ISS Cleaning Servs. Group,
Inc., 936 F. Supp. 130 (S.D.N.Y. 1996) (quoting Brunswick Corp.
v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50
L.Ed.2d 701 (1977)); see also Balaklaw v. Lovell, 14 F.3d 793,
797 (2d Cir. 1994); Re-Alco Indus., Inc. v. Nat'l Ctr. for
Health Educ., Inc., 812 F. Supp. 387, 391 (S.D.N.Y. 1993) (an
antitrust complaint must adequately define the relevant
product market, allege antitrust injury, and allege conduct in
violation of the antitrust laws). Accordingly, a plaintiff
bringing an antitrust claim must demonstrate as a threshold
matter "that the challenged action has had an actual adverse
effect on competition as a whole in the relevant market; to prove
it has been harmed as an individual competitor will not suffice."
Capital Imaging Assoc., P.C. v. Mohawk Valley Med. Assoc.,
Inc., 996 F.2d 537, 543 (2d Cir.), cert. denied, 510 U.S. 947,
114 S.Ct. 388, 126 L.Ed.2d 337 (1993); see also George Haug Co.
v. Rolls Royce Motor Cars, Inc., 148 F.3d 136, 139 (2d Cir.
1998). This requirement underlines the policy that antitrust laws
are designed to protect competition, rather than competitors.
See Brunswick Corp., 429 U.S. at 489, 97 S.Ct. 690. Therefore,
to survive a motion to dismiss, a plaintiff must plead specific
facts demonstrating that the defendants' conduct "injured the
competitive structure of the market" rather than the plaintiff
alone. Naso v. Park, 850 F. Supp. 264, 271 (S.D.N.Y. 1994).
Evac has clearly alleged injury to its own business interests.
The Complaint is flawed, however, insofar as it fails to define a
relevant product or geographic market in which the alleged injury
occurred and fails to allege "antitrust injury," or, detrimental
effect on market-wide competition.
First, Evac's Complaint is flawed because it does not
sufficiently allege injury to market-wide competition. The
relevant portions of the Complaint allege that Evac has been
taken "out of the loop" in medical transport services, see
Complaint ¶ 18, that Defendants have told prospective patients
that if they fly Fletcher Allen Hospital with North Country Life
Flight the service is free whereas if they choose a different
carrier "it will cost [them] money," id. at ¶ 31, and that Evac
has been injured by Defendants provision of free air transport
services. Evac also alleges harm to the public, insofar as the
free State service may be slower than Evac's. See id. at ¶ 34.
However, Evac does not allege that Defendants' actions injured
market-wide competition as opposed to Evac's individual business.
Without even a basic allegation of market injury, the Court
cannot infer this injury. See Electronics Comm. Corp. v. Toshiba
Am. Consumer Prods., Inc., 129 F.3d 240, 245 (2d Cir. 1997)
("Without any allegation as to how market-wide competition will
be affected, the complaint fails to allege a claim on which
relief may be granted."); see also, S.O. Textiles Co., Inc. v. A
& E Prods. Group, 18 F. Supp.2d 232, 243 (E.D.N.Y. 1998).
The Complaint is further flawed because it does not allege a
relevant product market. See Global Discount Travel Serv., LLC
v. Trans World Airlines, Inc., 960 F. Supp. 701, 704 (S.D.N Y
1997) (citations omitted). When determining the relevant product
market, the plaintiff must include all reasonably interchangeable
or substitutable products. See United States v. E.I. du Pont de
Nemours & Co., 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264
(1956). "A properly defined market includes potential suppliers
who can readily offer consumers a suitable alternative to the
defendants' services," United States v. Long Island Jewish Med.
Ctr., 983 F. Supp. 121 (E.D.N.Y. 1997) (quoting F.T.C. v.
Butterworth Health Corp., 946 F. Supp. 1285, 1290 (W.D.Mich.
1996), aff'd, 121 F.3d 708 (6th Cir. 1997)), because "the test
for a relevant market is not commodities reasonably
interchangeable by a particular plaintiff, but `commodities
reasonably interchangeable by consumers for the same purpose.'"
Pepsico Inc. v. The Coca-Cola Co., 1998 WL 547088, at *10
(S.D.N.Y. Aug.27, 1998) (citing Queen City Pizza, Inc. v.
Domino's Pizza, Inc., 124 F.3d 430 (3d Cir. 1997), cert.
denied, 523 U.S. 1059, 118 S.Ct. 1385, 140 L.Ed.2d 645 (1998)).
Evac does not define the relevant product market or offer any
factual information about reasonably interchangeable services.
The allegations in the Complaint give rise to any number of
market definitions. The relevant product market, for example,
could be "emergency air transport services," "hospital air
transport services" (encompassing emergency and inter-facility
transfers), "emergency medical transport services" (encompassing
land, sea, and air transport), or "medical transport services"
(encompassing land, sea, and air transport for emergency services
and routine transfers). Because Evac fails to define a relevant
product market, it lacks standing to bring the instant claim.
See Hack v. President and Fellows of Yale College, 16 F. Supp.2d 183,
196 (D.Conn. 1998) ("[W]here the relevant market proposed by
plaintiff is not even alleged to encompass all interchangeable
substitute products, the market is legally (rather than
factually) insufficient, and a motion to dismiss is
appropriate.") (internal quotation omitted).
Finally, Evac's Complaint fails to allege a relevant geographic
market. It is well-settled that an antitrust complaint must
allege a relevant market in which the anti-competitive effects of
the challenged activity can be assessed. See Jefferson Parish
Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 104 S.Ct. 1551, 80
L.Ed.2d 2 (1984). Although Evac's Complaint specifies a number of
counties in Northern New York and Vermont it does not define a
specific geographic market or explain how the Court should draw
geographic boundaries. Without this definition, Evac cannot bring
the instant claim.
Because Evac failed to define a relevant product and geographic
market and failed to plead the necessary "antitrust injury," it
does not have standing to bring a claim under the Sherman or
Clayton Acts and, thus, these claims are dismissed against all of
the Defendants.*fn4 See Sage Realty, 936 F. Supp. 130 (quoting
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489,
97 S.Ct. 690, 50 L.Ed.2d 701 (1977)); see also Balaklaw, 14
F.3d at 797; Re-Alco Indus., Inc., 812 F. Supp. at 391.
D. Donnelly Act
Defendants next move to dismiss Evac's claim under the Donnelly
Act. Defendants do not address this claim on its merits; instead,
Defendants request that if the Court dismisses the federal
claims, which it has, the Court decline supplemental jurisdiction
over this state law claim. At this juncture, however, federal
claims remain. Subject matter jurisdiction is an inquiry based on
the case in its entirety rather than the status of individual
defendants and, thus, the Court cannot properly decline
supplemental jurisdiction at this time.*fn5 Accordingly,
Defendants' motion to dismiss this claim is denied.
III. Plaintiff's Cross-Motion to Amend
Evac cross-moves to amend its Complaint pursuant to FED. R.
CIV. P. 15(a) to add causes of action under Section 1983
asserting violations of the Supremacy and Commerce Clauses.
Defendants oppose this motion, asserting that Evac cannot
maintain claims under either clause and, thus, the Court should
deny leave to amend.
Rule 15(a) provides that leave to amend "shall be freely given
when justice so requires." Leave is not, however, automatic, and
may be denied for good cause "such as undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure to
cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of the allowance of the
amendment, futility of amendment, etc." Foman v. Davis,
371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). "An
amendment is considered futile if the amended pleading fails to
state a claim or would be subject to a successful motion to
dismiss on some other basis." Lamb v. Henderson, 1999 WL
596271, at *2 (S.D.N.Y. Aug. 9, 1999) (citing S.S. Silberblatt,
Inc. v. East Harlem Pilot Block, 608 F.2d 28, 42 (2d Cir.
1979)). A court, therefore, is justified in denying an amendment
that could not withstand a motion to dismiss. Id. (internal
citations omitted); see also Ruffolo v. Oppenheimer & Co.,
987 F.2d 129, 131 (2d Cir. 1993) (where granting leave to amend is
unlikely to be productive it is not an abuse of discretion to
deny leave to amend).
A. Local Rule Compliance
Evac's cross-motion to amend does not comply with the Local
Rules of the Northern District of New York. Local Rule 7.1(a)(4)
requires that a party attach an unsigned copy of the proposed
amended pleading to a motion brought under FED. R. CIV. P. 15.
N.D.N.Y.L.R. 7.1(a)(4). This pleading must be a complete
pleading, which, if accepted, will supersede the prior pleading
in all respects. See id. Evac did not submit a copy of a
proposed Amended Complaint. In the interest of judicial economy,
the Court will consider the merits of Evac's motion despite this
B. Supremacy Clause
Evac first moves to add a Section 1983 claim alleging that
Defendants' actions violated its rights under the Supremacy
Clause. Defendants assert that Evac cannot state a Supremacy
Clause claim because there is "no state law/regulation/rule to
target with a preemption challenge." Reply Mem. of Law at 4.
Even if Evac had alleged a rule or regulation, however, this
claim could not stand because Supremacy Clause claims are not
cognizable under Section 1983. See Golden State Transit v. City
of Los Angeles, 493 U.S. 103, 108, 110 S.Ct. 444, 107 L.Ed.2d
420 (1989) ("Respondent argues that the Supremacy Clause, of its
own force, does not create rights enforceable under § 1983. We
agree."); Associated Gen. Contractors, San Diego Chapter, Inc.,
Apprenticeship Training and Trust Fund v. Smith, 74 F.3d 926,
931 (9th Cir. 1996); Gustafson v. City of Lake Angelus,
76 F.3d 778, 791 (6th Cir. 1996); Blue Sky Ent., Inc. v. Town of
Gardiner, 711 F. Supp. 678, 696 (N.D.N.Y. 1989) (Munson, J)
(citing cases). Thus, Evac's proposed amendment is futile because
it could not withstand a motion to dismiss.*fn6 Accordingly,
Evac's motion to amend on this ground is denied.
C. Commerce Clause
Evac next seeks to amend its Complaint to add a cause of action
under Section 1983 asserting that the Defendants' actions
violated its rights under the Commerce Clause. Defendants again
oppose the motion asserting that Evac does not have a cognizable
Commerce Clause claim and that Dennis v. Higgins, 498 U.S. 439,
111 S.Ct. 865, 112 L.Ed.2d 969 (1991), the case cited by Evac,
bears no relation to the case at bar.
In Dennis, the Supreme Court ruled that a plaintiff could
assert a claim under the Commerce Clause via Section 1983. The
Commerce Clause grants Congress the power to "regulate Commerce .
. . among the several states." Courts have interpreted the
Commerce Clause broadly to limit the power of the states to
discriminate or unduly burden interstate trade. See id. at 446,
111 S.Ct. 865.
Evac, however, does not allege that a state law or regulation
impermissibly burdens interstate commerce. Rather,
Evac alleges that because Defendants are not subject to taxation
or FAA regulation, their participation in the market burdens
interstate commerce. The Supreme Court, however, has "recognized
that the Commerce Clause does not restrict the State's action as
a free market participant." Wyoming v. Oklahoma, 502 U.S. 437,
459, 112 S.Ct. 789, 117 L.Ed.2d 1 (1992) (citing Reeves, Inc. v.
Stake, 447 U.S. 429, 436-437, 100 S.Ct. 2271, 65 L.Ed.2d 244
(1980) and Hughes v. Alexandria Scrap Corp., 426 U.S. 794,
806-810, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976)). In Reeves, the
Supreme Court explained that Alexandria Scrap
did not involve "the kind of action with which the
Commerce Clause is concerned." Unlike prior cases
voiding state laws inhibiting interstate trade,
"Maryland has not sought to prohibit the flow of
hulks, or to regulate the conditions under which it
may occur. Instead, it has entered into the market
itself to bid up their price," "as a purchaser, in
effect, of a potential article of interstate
commerce," and has restricted "its trade to its own
citizens or businesses within the State."
447 U.S. at 435, 100 S.Ct. 2271 (internal citations omitted)
The actions Evac complains of fall squarely within this doctrine
and, thus, Evac cannot maintain a Commerce Clause claim. Because
Evac's Commerce Clause claim is not cognizable, it would be
futile for this Court to grant Evac leave to amend its Complaint.
Accordingly, Evac's motion for leave to amend pursuant to FED. R.
CIV. P. 15(a) is denied.
Defendants McMahon and Pataki's motion to dismiss is GRANTED in
part and DENIED in part. Defendants' motion to dismiss Evac's due
process, takings, and FAA claims is GRANTED. Defendants' motion
to dismiss Evac's claim under the Donnelly Act is DENIED. The
Court lacks subject matter jurisdiction over Evac's claims under
the Sherman and Clayton Acts and, thus, these claims are
DISMISSED against both the moving and non-moving Defendants.
Plaintiff Evac's cross-motion to amend is DENIED in its entirety.
IT IS SO ORDERED