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Coastal Distribution, LLC v. Town of Babylon

January 31, 2006

COASTAL DISTRIBUTION, LLC AND THE NEW YORK AND ATLANTIC RAILWAY COMPANY, PLAINTIFFS,
v.
THE TOWN OF BABYLON, A MUNICIPAL CORPORATION, THE TOWN OF BABYLON BOARD OF ZONING APPEALS, PETER CASSERLY, AS COMMISSIONER OF PLANNING AND DEVELOPMENT OF THE TOWN OF BABYON, AND PINELAWN CEMETARY, DEFENDANTS.



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

MEMORANDUM AND ORDER

Before this Court is Magistrate Judge E. Thomas Boyle's Report and Recommendation regarding the request of Coastal Distribution, LLC ("Coastal") and the New York & Atlantic Railway ("NYA" and together with Coastal, the "Plaintiffs") for a preliminary injunction. The Magistrate recommended that this Court preliminarily enjoin the Town of Babylon ("Town") from enforcing its Stop Work Order and certain zoning regulations against the Plaintiffs. Pursuant to FED. R. CIV. P. 72(b), the Town and Pinelawn Cemetery ("Pinelawn" and together with the Town, the "Defendants") objected to parts of the Report and Recommendation, and Plaintiffs responded. Pursuant to 28 U.S.C. § 636(b)(1), this Court reviews de novo those portions of the Report and Recommendation to which Defendants object. Such de novo review does not entirely replace the Magistrate's efforts. For purposes of this review, familiarity with the facts of the case is presumed.

After carefully reviewing Defendants' objections, this Court adopts the Report and Recommendation and grants Plaintiffs' request for a preliminary injunction. First, Younger does not apply in this case nor will this Court give preclusive effect to the Babylon's Zoning Board of Appeals' ("ZBA") findings of fact. Second, after reviewing the harm to the public interest, this Court finds that Plaintiffs have met their burden on their request for a preliminary injunction.

DISCUSSION

I. The Younger Doctrine Does Not Mandate Abstention Nor Are The ZBA's Findings of Fact Entitled To Preclusive Effect

A. No State Proceeding Is Ongoing For Younger

The Younger doctrine of abstention does not require this Court to abstain from exercising jurisdiction over this action. The Younger doctrine restrains federal courts from exercising jurisdiction over federal constitutional claims where state proceedings are ongoing. See Younger v. Harris, 401 U.S. 37, 43-44, 27 L.Ed. 2d 669, 91 S.Ct. 746 (1971). This doctrine is rooted in notions of federalism and the state courts' adequate ability to vindicate federal constitutional rights. See Cullen v. Fliegner, 18 F.3d 96, 103 (2d. Cir. 1994) (citations omitted). Younger is invoked when state criminal, civil, or administrative proceedings are ongoing. See Ohio Civil Rights Comm'n v. Dayton Christian Schs., Inc., 477 U.S. 619, 627, 91 L.Ed. 2d 512, 106 S.Ct. 2718 (1986). The administrative proceedings, however, must be of a judicial nature. See Haw. Hous. Auth. v. Midkiff, 467 U.S. 229, 239, 81 L.Ed. 2d 186, 104 S.Ct. 2321 (1984).

Aside from an ongoing state proceeding, Younger requires two other conditions. The ongoing state proceeding must implicate an important state interest. Additionally, that state proceeding must give parties an adequate opportunity for judicial review of federal constitutional claims. See Diamond "D" Constr. Corp. v. McGowan, 282 F.3d 191, 198 (2d. Cir. 2002) (citations omitted).

In this case, New York law does not expressly state whether the ZBA hearings are judicial or administrative in nature. New York limits, however, ZBA's powers to review only administrative officials' decisions. N.Y. TOWN LAW § 267-b(1) (the ZBA will have the power to review those decisions made by an "administrative official charged with the enforcement of such ordinance or local law.") (emphasis added). Pinelawn claims that the ZBA acts in a judicial capacity, but Pinelawn cites to only one case that finds zoning appeals as merely "quasi-judicial." (Pinelawn's Objections to Report and Recommendation at 28.)

The nature of zoning appeals, however, is irrelevant because no zoning appeal is pending. The ZBA rendered a final decision regarding this case on February 10, 2005. See Coastal Distribution, LLC, Application No. 04-267 (Town of Babylon Zoning Board of Appeals, Feb. 10, 2005). At that point, Plaintiffs were free to initiate an Article 78 proceeding in state court, but no state law requires this. See N.Y. VILLAGE LAW § 7-712-c ("Any person . . . aggrieved by any decision of the board of appeals . . . may apply to the supreme court for review by a proceeding under article seventy-eight of the civil practice law and rules.") (emphasis added).

So as to the first Younger condition, no state court judicial proceeding was ongoing at the time this action commenced. At best, a quasi-judicial proceeding had terminated two months before Plaintiffs filed their complaint. In light of the fact that no state proceeding is ongoing, this Court will not address the other Younger conditions and may exercise jurisdiction over this action.

B. This Court Will Not Give Preclusive Effect To The ZBA's Findings Of Fact

Defendants also argue that the Magistrate was bound by the ZBA's findings of fact and conclusions of law. This Court disagrees and finds that the Magistrate properly made his findings of fact and conclusions of law. Furthermore, the ZBA's findings bind neither this Court nor that of the Magistrate.

The Supreme Court held that federal courts must give preclusive effect to agencies that act in a "judicial capacity." Univ. of Tenn. v. Elliott, 478 U.S. 788, 799, 106 S.Ct. 3220, 92 L.Ed. 2d 635 (1986). But as already established, the ZBA does not act in a judicial capacity. Moreover, in an Article 78 proceeding, a state court can conduct its own hearing, hear further evidence and testimony, and draw its own findings of fact and conclusions of law. These findings and conclusions become a part of the proceeding upon which a state court can make a decision regarding the ZBA's final determinations. See N.Y. TOWN LAW § 267-c(4) (discussing the power of the court in an Article 78 proceeding). A fortiori, a federal court can conduct its own hearing, hear further evidence and testimony, and draw its own findings of fact and conclusions of law while reviewing a case that has been before the ZBA.

II. The Plaintiffs Have Met Their Burden For This Court To Grant A Preliminary Injunction

For this Court to issue a preliminary injunction against "government action taken in the public interest pursuant to a statutory or regulatory scheme," the Plaintiffs must show "(i) irreparable harm absent the injunction and (ii) a likelihood of success on the merits." Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112, 114 (2d Cir. 2005) (citations omitted). Plaintiffs satisfy the irreparable harm requirement when they show that absent a preliminary injunction, Plaintiffs "will suffer 'an injury that is neither remote nor speculative, but actual and imminent,' and one that cannot be remedied 'if a court waits until the end of trial to resolve the harm.'" Id. Because irreparable harm is "the single most important prerequisite" before a preliminary injunction will issue, Plaintiffs must show first that the injury is "likely" before showing any other requirements. Id.

A. Absent Injunctive Relief, Plaintiffs Will Suffer Irreparable Harm

Irreparable harm does not exist when money damages can fully compensate a party for its injuries caused by the absence of a preliminary injunction. See Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 404 (2d Cir. 2004); 11A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2948.1 (2d ed. 1995). However, when courts cannot establish and measure the injury in terms of money, courts have found irreparable harm. See Register.com, Inc., 356 F.3d at 393. Loss of goodwill and injury to reputation are injuries that are difficult to measure in dollars, and thus, these types of injuries are irreparable harm. See Wright, Miller & Kane, supra § 2948.1. Furthermore, loss of business opportunities and relationships with clients who could "produce an indeterminate amount of business over years to come" are also hard to measure in dollars and are properly considered irreparable harm. See Register.com, Inc., 356 F.3d at 393.

Defendants argue that nothing in the record supports a finding of irreparable harm; specifically, the record arguably does not establish any loss of goodwill, reputation, or business opportunities. Plaintiffs refute this. Coastal lost potential clients because of this matter and without an injunction, the Farmingdale facility will likely shut down. Without the ability to provide long-term service, Coastal cannot ask shippers to abandon their relationships with truckers. Furthermore, Plaintiffs did not construct any new ...


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