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Morningside Supermarket Corp. v. New York State Department of Health

May 18, 2006

MORNINGSIDE SUPERMARKET CORP., D/B/A/ MET FOOD, PLAINTIFF,
v.
NEW YORK STATE DEPARTMENT OF HEALTH; PATRICIA HESS, DIRECTOR, DIVISION OF NUTRITION; WILLIAM F. RYAN COMMUNITY HEALTH CENTER, DEFENDANTS.



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

OPINION & ORDER

Plaintiff Morningside Supermarket Corporation ("Morningside") initiated this action with an application for a preliminary injunction requiring defendants to reauthorize its participation as a vendor in a federally funded food assistance program. Defendants opposed the preliminary injunction and cross-moved to dismiss the complaint. In an earlier Opinion and Order, issued March 17, 2006, plaintiff's motion for a preliminary injunction was denied. See Morningside Supermarket Corp. v. N.Y. State Dep't of Health, No. 05 Civ. 9950 (DLC), 2006 WL 680469 (S.D.N.Y. Mar. 17, 2006). This Opinion addresses defendants' motion to dismiss the complaint. That motion is granted in part.

Background

The following facts are taken from the complaint. Morningside is the owner of a retail food store located in a low-income neighborhood in Manhattan. In 1992, Morningside began participation as a vendor in the Special Supplemental Nutrition Program for Woman, Infants and Children (the "WIC program"). Its participation has been automatically renewed every year since.

The WIC program provides vouchers to eligible women who are pregnant or have young children that may be used at authorized food stores ("vendors") to purchase certain foodstuffs. See 7 C.F.R. § 246.2 (defining a "vendor" as "a business entity operating one or more stores authorized by the State agency to provide authorized supplemental foods to participants under a retail food delivery system"). Aid recipients typically make additional purchases of non-WIC products at the same stores at which they redeem their vouchers. Deauthorization from participation as a vendor threatens a significant portion of Morningside's business because customers who receive WIC benefits will choose to patronize other stores where they can make their WIC and non-WIC purchases together.

Defendant New York State Department of Health (the "DOH") is the state agency charged with administering the WIC program on behalf of the State of New York. Defendant Patricia Hess is the Director of the Division of Nutrition within the DOH. Hess manages and oversees the WIC program. The third defendant, the William F. Ryan Community Health Center (the "Ryan Center"), is a non-profit organization that administers the WIC program in parts of Manhattan on behalf of the DOH. See 7 C.F.R. § 246.3(f) (explaining under "delegation to local agency" that "[t]he local agency shall provide Program benefits to participants").

On January 10, 2005, Morningside applied for reauthorization as a WIC vendor. The Ryan Center informed Morningside by letter on February 22, 2005 that its request for reauthorization was denied because Morningside had been previously disqualified from the WIC program or had abused the WIC program or another government-sponsored program. Defendants subsequently communicated to Morningside that they refused to reauthorize its participation as a vendor because 172 Food Corporation, which has a shareholder and officer in common with Morningside, had been previously disqualified from the program, and that disqualification was imputed to Morningside. For its part, however, Morningside has not violated, and has never been alleged to have violated, any WIC rules or regulations.

Morningside filed this action shortly after its application was denied. The complaint seeks relief under four causes of action. The first claims a violation of Morningside's right to equal protection guaranteed by the Fourteenth Amendment and requests injunctive relief; the second seeks a declaration that defendants have violated federal regulations governing the WIC program as well as a corrective injunction; the third requests relief under Article 78 of the New York Civil Practice Law and Rules, N.Y. C.P.L.R. § 7801 et. seq.; and the fourth seeks specific performance of a contract between Morningside and the DOH and Hess (the "State defendants").

Discussion "[A] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations" set forth therein. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (citation omitted); see also Twombly v. Bell Atl. Corp., 425 F.3d 99, 106 (2d Cir. 2005) (explaining that dismissal is improper "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief" (citation omitted)). Under the pleading standard set forth in Rule 8(a) of the Federal Rules of Civil Procedure, complaints must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "[A] plaintiff is required only to give fair notice of what the claim is and the grounds upon which it rests." Leibowitz v. Cornell Univ., ___ F.3d ___, 2006 WL 1046212, at *3 (2d Cir. Apr. 21, 2006).

When considering a motion to dismiss, a trial court must "limit [its] consideration to facts stated in the complaint" or attached or incorporated documents, Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir. 2005), and "must accept as true all the factual allegations in the complaint and draw all reasonable inferences in [the] plaintiff['s] favor." In re Tamoxifen Citrate Antitrust Litig., 429 F.3d 370, 384 (2d Cir. 2005) (citation omitted). The court's duty "is not to weigh the evidence that might be presented at trial but merely to determine whether the complaint itself is legally sufficient." Chosun Int'l, Inc. v. Chrisha Creations, Ltd., 413 F.3d 324, 327 (2d Cir. 2005) (citation omitted).

A. Eleventh Amendment Immunity

State defendants raise a preliminary jurisdictional issue when they invoke the Eleventh Amendment as a bar to Morningside's claims.*fn1 Their immunity argument appears to be limited to the third and fourth causes of action, which are brought under state law; the federal causes of action are argued on the merits. A federal court is not bound, however, by the scope of arguments relating to sovereign immunity. Instead, a court may assure itself that the Eleventh Amendment does not deprive it of jurisdiction before addressing the merits of a suit against a state or state officer. See Atl. Healthcare Benefits Trust v. Googins, 2 F.3d 1, 4 (2d Cir. 1993) (holding that Eleventh Amendment immunity may be raised sua sponte because it affects subject matter jurisdiction).

A state's Eleventh Amendment protection from suit extends to its agencies and departments. Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 100 (1984). This is no less true for the DOH than for other state departments. See, e.g., Miner v. N.Y. State Dep't of Health, No. 02 Civ. 3180 (MBM), 2004 WL 1152491, at *3 (S.D.N.Y. May 24, 2004). Morningside's claim for an injunction against the DOH under the Fourteenth Amendment "must be dismissed because it does not follow the requirement, established in Ex Parte Young, that a plaintiff seeking prospective relief from the state must name as defendant a state official rather than the state or a state agency directly." Santiago v. N.Y. State Dep't of Corr. Servs., 945 F.2d 25, 32 (2d Cir. 1991). The second cause of action is similarly improper, as a state may not be sued under Section 1983. See Will v. Mich. Dep't of State Police, 491 U.S. 58, 71 (1989). And finally, the third and fourth causes of action are dismissed against DOH because "the Eleventh Amendment bars . . . consideration of purely State law claims" brought against states. Concourse Rehabilitation & Nursing Ctr., Inc. v. DeBuono, 179 F.3d 38, 44 (2d Cir. 1999); see also Westside Mothers v. Haveman, 289 F.3d 852, 861 (6th Cir. 2002) (noting that sovereign immunity protects a state from "suit[s] seeking to compel a state to specific performance of a contract") (fourth cause of action); Allen v. Cuomo, 100 F.3d 253, 260 (2d Cir. 1996) ("The scope of authority of a state agency is a question of state law and not within the jurisdiction of federal courts.") (third cause of action).

The Supreme Court established in Ex Parte Young, 209 U.S. 123 (1908), though, that the analysis differs when the defendant is not a state itself but a state officer sued in her official capacity. Id. at 155-56. Claims brought under federal law against these officials are barred by the Eleventh Amendment to the extent that the relief sought is retrospective. K & A Radiologic Tech. Servs., Inc. v. Comm'r of Dep't of Health, 189 F.3d 273, 278 (2d Cir. 1999). "The Eleventh Amendment, however, does not preclude suits against state officers in their official capacity for prospective injunctive relief to prevent a continuing violation of federal law." Henrietta D. v. Bloomberg, 331 F.3d 261, 287 (2d Cir. 2003); see also Ex Parte Young, 209 U.S. at 155-56. Section 1983 has been read similarly: "[S]tate officials cannot be sued in their official capacities for retrospective relief under Section 1983. Nonetheless, state officials can be subject to suit in their official capacities for injunctive or other prospective relief." Huminski v. Corsones, 396 F.3d 53, 70 (2d Cir. 2005) (citing Will, 491 U.S. at 71 & n.10). Morningside's first two causes of action, brought under the Constitution and Section 1983, seek only prospective injunctive relief. Because Hess is sued in this case in her official capacity, she is a proper defendant to these to claims.

The nature of the relief makes no difference, though, when state officials are sued under state law. See Bragg v. W. Va. Coal Ass'n, 248 F.3d 275, 293 (4th Cir. 2001) ("[S]overeign immunity . . . bars a court's grant of any type of relief, whether retrospective or prospective, based upon a State official's violation of State law."). Because there is "no greater intrusion on state sovereignty than when a federal court instructs state officials on how to conform their conduct to state law," Morningside's third cause of action seeking relief against Hess under New York state procedural law is dismissed. Allen, 100 F.3d at 260 (citation omitted). And because "the Eleventh Amendment provides absolute immunity in federal court to state officials for suits alleging breach of contract under state law," the fourth cause of action seeking a decree of specific performance against Hess is dismissed as well. Garcia v. Lemaster, 439 F.3d 1215, 1219 n.7 (10th Cir. 2006); see also In re Ayers, 123 U.S. 443 (1887) (holding a claim for specific performance of a contract by state officials barred by the state's sovereign immunity); In re Ellet, 254 F.3d 1135, 1145 (9th Cir. 2001) (reading Ayers "for the proposition that the functional equivalent of an action for specific performance against a State is . . . constitutionally impermissible"); Tamiami Partners, Ltd. ex rel. Tamiami Dev. Corp. v. Miccosukee Tribe of Indians of Fla., 177 F.3d 1212, 1226 (11th Cir. 1999) ...


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