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NEW YORK STATE REST. ASSOC v. NEW YORK CITY DEPT OF HEALTH

January 12, 2004.

THE NEW YORK STATE RESTAURANT ASSOCIATION, et al., Plaintiffs, -against- NEW YORK CITY DEPARTMENT OF HEALTH AND MENTAL HYGIENE, et al., Defendants


The opinion of the court was delivered by: ROBERT LEVY, Magistrate Judge

MEMORANDUM AND ORDER

Defendants move to dismiss plaintiffs' amended complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a cause of action. This motion is before me on consent of the parties, pursuant to 28 U.S.C. § 636. For the reasons stated below, defendants' motion is granted. Page 2

BACKGROUND AND FACTS

  Plaintiff New York State Restaurant Association ("NYSRA") is a "statewide not-for-profit organization of restaurant owners and operators representing more than 7000 food service operations, many of them in New York City." (Amended Complaint, dated Sept. 3, 2003 ("Amended Conipl."), ¶ 4.) The remaining plaintiffs are forty-four New York City restaurants, all of which are licensed by defendant New York City Department of Health and Mental Hygiene ("DOHMH") and most of which are members of NYSRA. (Id. ¶ 5.) Plaintiffs seek a declaratory judgment and injunction with respect to certain rules and procedures that DOHMH adopted in 2003 concerning restaurant inspections in New York City. (Id. ¶ 1.) Defendants are DOHMH, its Commissioner, and three of its policy-level employees responsible for restaurant inspections, including the Director of DOHMH's Bureau of Food Safety and Community Sanitation (the "Bureau"). (Id. ¶ 6.) The Amended Complaint pleads a violation of Fourteenth Amendment substantive due process and a supplemental cause of action under N.Y. C.P.L.R. 7803(3), which alleges that DOHMH failed to comply with the City Administrative Procedure Act ("CAPA"). (Id. ¶¶ 72-76.) The Amended Complaint challenges certain changes in DOHMH's restaurant inspection guidelines and procedures and specific amendments to the New York City Health Code. Specifically, plaintiffs challenge the following:
1. New Evaluation and Inspection Procedures
  In 2003, the Bureau published and publicly disseminated a booklet entitled "Important Information for Food Service Establishments" (the "Booklet"). The Booklet explains that, as of March 24, 2003, "the standards for how an inspection will be evaluated are changing," and it describes a new scoring system for violations. (See Declaration of Deborah Rand, Esq., Page 3 dated Oct. 9, 2003 ("Rand Decl"), Ex. A at 5.) In other words, the Booklet provides new guidelines for inspectors in enforcing the provisions of the New York City Health Code. (Transcript of Oral Argument, dated Dec. 5, 2003 ("Tr."), at 11.)

  Plaintiffs complain that these changes in inspection guidelines and violation scoring, which they call the "New Inspection Rules," were not adopted by the Board of Health as amendments to the New York City Health Code or by DOHMH as departmental regulations under CAP A. (Pl.'s Mem. at 2.) According to plaintiffs, these changes "were adopted in large part to produce revenue for the City" (id.) and altered the process of restaurant inspection and violation enforcement in three respects.

  First, the new guidelines call for the "ungrouping" of violations. Previously, multiple instances of a specific problem were grouped and cited as one violation. For example, plaintiffs claim that if an inspector observed peeling paint in four different locations within a basement storage area, the inspector would have listed the peeling paint as one facility maintenance violation. Now, "[a] point value [is] assessed for each violation," such that the peeling paint must be listed as four separate violations. (Rand Decl., Ex. A at 2) (emphasis in original).

  Second, the Booklet announced a system of "condition levels" to determine how many points are to be assessed for specific violations. Condition levels range from I to V, with Condition I being the lowest level and Condition V being the highest, (Id. at 4.) As an example, one instance of insufficient food heating is a Condition I violation and carries seven points. A second instance makes it a Condition II violation that carries eight points. A third instance makes it a Condition III violation that carries nine points, and a fourth instance is a Condition IV Page 4 violation carrying ten points. (Id.) Thus, if four different food items are insufficiently heated, that is a Condition IV violation. (Id. at 4-5.) If an inspector assesses twenty-eight or more points in violations, then the restaurant fails the inspection. (Id. at 4.) Previously, a restaurant failed an inspection if it had four "critical" violations or five "general" violations. (Declaration of Robert Hermann, Esq., dated Nov. 6, 2003 ("Hermann Decl."), Ex. A at 132.)

  Finally, the Booklet elevated at least eighteen types of violations from "general" to "critical," meaning that those violations now carry more points and larger fines. Examples are eating or drinking in a dishwashing area and placing a food thermometer on a table, both of which now carry eight points. (Amended Compl. ¶¶ 28-30.) Because of this change, some restaurants may now fail an inspection and be fined, where before they would have passed the inspection and not received a fine.

  2. The Transfer Rule under New York City Health Code § 81. 05(c)

  24 RCNY Health Code § 81.05(c), as amended on February 13, 2003, states in pertinent part:
[N]o person shall operate a [restaurant] without a permit therefore issued by the Department. An application for a permit shall be submitted to the Department. A request for a pre-permitting inspection shall be submitted to the Department subsequent to the filing of such application, but not less than 21 days before starting operation of such [restaurant]. (emphasis added.)
This 21-day Transfer Rule, which was adopted pursuant to CAP A, applies to new owners and operators to whom no permit has yet been issued, and not to holders of existing DOHMH permits. According to plaintiffs, this new rule requires a restaurant to close for at least three weeks when ownership changes hands, until a new inspection and permit can be obtained. Page 5 Plaintiffs argue that the rule lacks proper justification and that it "substantially, adversely affect[s] how much money every restaurant in New York City takes in, and how readily and at what price it may be sold or assigned to new owners." (Pl.'s Mem. at 9-10; see also Amended Compl. ¶¶ 70-71.)

  3. Higher Penalties Imposed by Administrative Tribunal for Health Code Violations

  DOHMH operates an Administrative Tribunal, made up primarily of private lawyers hired on a per-diem basis, which determines violations and assesses penalties in connection with restaurant inspections. (Amended Compl. ¶ 50.) According to plaintiffs, the tribunal's members are monitored by the Bureau's staff, "are beholden to the Bureau for their employment," and as a result are "biased in its favor and lacking in independence." (Id. ¶¶ 51-53, 55.) Plaintiffs also maintain that the Bureau has provided members of the Administrative Tribunal with a detailed written schedule of proposed fines "which has not been formally adopted by the Department or publicly disseminated by it." (Pl.'s Mem. at 8.) They further claim that the proposed fines "are much heavier than the ones formerly imposed." (Id.)

  4. Public Access to Information Concerning Health Code Violations

  When a restaurant receives a violation, the information is posted on the Bureau's website (htrp://www.nyc.gov/html/doh/html/rii/index.html), which is accessible by any member of the public. According to plaintiffs, this is true even if the violation was already cured (for example, by removing a food thermometer from a table in the inspector's presence), and the information remains on the website until a re-inspection takes place, "which may take months." (Pl.'s Mem. at 9.) Plaintiffs claim that, since restaurants are now being assessed more violations and are failing more inspections under the new guidelines, they are being subjected to increased Page 6 "derogatory publicity" on the website. ...


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