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New Phone Co., Inc. v. New York City Dep't of Information Technology and Telecommunications

October 5, 2007

THE NEW PHONE COMPANY, INC, PLAINTIFF,
v.
NEW YORK CITY DEPARTMENT OF INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS, THE CITY OF NEW YORK, TELEPLEX COIN COMMUNICATIONS, INC., TELEBEAM TELECOMMUNICATIONS CORP., COASTAL COMMUNICATIONS SERVICE, INC. AND NEW YORK CITY TELECOMMUNICATIONS COMPANY, INC., DEFENDANTS.
THE NEW PHONE COMPANY, INC, PLAINTIFF,
v.
NEW YORK CITY DEPARTMENT OF INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS, THE CITY OF NEW YORK, TELEPLEX COIN COMMUNICATIONS, INC., TELEBEAM TELECOMMUNICATIONS CORP., COASTAL COMMUNICATIONS SERVICE, INC. AND NEW YORK CITY TELECOMMUNICATIONS COMPANY, INC. DEFENDANTS.



The opinion of the court was delivered by: Matsumoto, United States Magistrate Judge

REPORT AND RECOMMENDATION

This Report and Recommendation addresses two related actions, 06-cv-3529 (JG) (KAM), The New Phone Company, Inc. ("New Phone") v. New York City Department of Information Technology and Telecommunications ("DoITT") and the City of New York (collectively, "the City defendants"), Teleplex Coin Communications, Inc. ("Teleplex"), Telebeam Telecommunications Corp. ("Telebeam"), Coastal Communication Service, Inc. ("Coastal") and New York City Telecommunications Company, Inc. ("NYCT"), and 07-cv-2474 (JG) (KAM), filed by New Phone and its affiliate, Best Payphones, Inc. ("Best Payphones"), against the same defendants.

On August 22, 2006, the Honorable John Gleeson, United States District Judge, pursuant to 28 U.S.C. § 636(b)(1)(B), referred to the undersigned for a Report and Recommendation the request of defendant City of New York that the court "determine the viability of the [06-cv-3529] action" in light of the filing injunction issued against plaintiffs New Phone and Best Payphones on August 5, 2005. (Docket no. 8, Letter filed by City of New York, dated 8/14/06.) By order dated August 29, 2006, Judge Gleeson also referred plaintiff's motions to dismiss 06-cv-3529 without prejudice pursuant to Rule 41(a)(1)(i) and (a)(2) of the Federal Rules of Civil Procedure. Defendants opposed plaintiff's motions and cross-moved for an order dismissing 06-cv-3529 with prejudice, and for the imposition of attorneys' fees and costs, pursuant to Federal Rule of Civil Procedure 41(d) and 28 U.S.C. § 1927.

For the following reasons, the court respectfully recommends that the 06-cv-3529 complaint be dismissed with prejudice as to all defendants due to plaintiff's repeated failures to comply with court orders, pursuant to Federal Rule of Civil Procedure 41(b). The court further respectfully recommends that the requests of Teleplex, Telebeam, Coastal and the City defendants for attorneys' fees and costs incurred in defending 03-cv-3555 (JG) (KAM) be granted, and that defendants' request for attorneys' fees and costs incurred in defending 06-cv-3529 be denied.

Furthermore, because plaintiff concedes and the court's own review confirms that the 07-cv-2474 complaint, recently transferred to this District from the Southern District of New York, is identical in all material respects to the 06-cv-3529 complaint, and because 07-cv-2474 was also filed in violation of this court's August 5, 2005 and July 6, 2006 orders, the court respectfully recommends that plaintiff be ordered to show cause no later than October 26, 2007, why 07-cv-2474 should not also be dismissed as to all defendants on res judicata grounds.

BACKGROUND

The nine New Phone and related Best Payphones actions filed in this District and the recently transferred tenth action arise from the same factual nexus, involve overlapping claims and parties, and have required significant expenditures of judicial resources to manage the dockets, and review and rule on the parties' multiple applications and motions. (See, e.g., docket sheets in 00-cv-2007, 03-cv-3555, 03-cv-3978, 06-3529 and 07-cv-2474 (the New Phone cases), 01-cv-3934, 01-cv-8506, 03-cv-192 and 04-cv-3451 (the Best Payphones cases) and 05-cv-1702 (the New Phone and Best Payphones case).) The procedural histories of 06-cv-3529, and the related prior action, 03-cv-3555, regarding the pending motions illustrates the burdens created by the multiple filings.

The court will address first New Phone's dismissal of 03-cv-3555 (JG) (KAM), an action based on the same nucleus of facts and filed against the same defendants, the court's August 5, 2005 filing injunction, New Phone's filing and attempted dismissal of 06-cv-3529 and finally, the filing of 07-cv-2474.

A. New Phone Co., Inc. v. New York City Department of Information Technology and Communications, et al., 03-cv-3555 (JG) (KAM)

On July 22, 2003, plaintiff filed a complaint, which was assigned docket number 03-cv-3555 (NGG), challenging the enactment and enforcement of New York City's regulatory scheme concerning public pay telephones on City-owned property, and alleging a conspiracy to discriminate against plaintiff, against the City defendants, Teleplex, Telebeam, Coastal and NYCT. (See doc. no. 1 in 03-cv-3555, Complaint, dated 7/22/03 ("03-cv-3555 Complaint").)*fn1

Plaintiff, described as an operator of public pay telephones ("PPTs"), alleged that defendants colluded to "prevent[] Plaintiff from operating its business in the most profitable PPT markets." (03-cv-3555 Complaint, ¶¶ 21, 25.) Plaintiff sought: (i) a temporary restraining order and preliminary injunction preventing defendants "from interfering in any manner with the plaintiff in the installation and operation of PPTs"; (ii) "a decree that . . . preferential rights that applications for new PPT locations submitted before April 7, 1996 may have are void, and that all applications submitted before April 7, 1996 shall be assigned later priorities"; (iii) damages "suffered by Plaintiff as a result of the unlawful acts of the Defendants"; and (iv) costs and attorneys' fees. (Id., ¶ 30(a)-(d).)

After extensive applications by the parties to the court (see, e.g. doc. nos. 6, 8, 9- 10, 12-13, 16-19, 26, 28-32, 38-39, 42-43, 54-56, 59, 64, 66, 69, 72-74, 76-80 and 83-86), scheduled and rescheduled status conferences (see orders dated 8/13/03, 12/19/03, 2/9/04, 9/1/04, 9/17/04, 1/19/05, 1/21/05, 1/27/05 and 2/23/05) and motion practice (see orders dated 2/20/04, 3/5/04 and 11/1/04), and through the oversight of two district judges and three magistrate judges (see orders dated 1/29/07 and 7/16/07), plaintiff eventually dismissed the 03-cv-3555 action without prejudice as to all defendants (see doc. nos. 81, 82, 86 and 87).

First, on February 28, 2005, plaintiff and defendant NYCT stipulated and agreed that "[p]laintiff hereby dismisses without prejudice [03-cv-3555] against Defendant," and that "[n]othing contained in this Stipulation shall be deemed to waive any of Plaintiff's rights, including those with respect to any other actions against the City and/or Defendant." (Doc. no. 81, ¶¶ 1 and 4, Stipulation between plaintiff and NYCT, filed 2/28/05.) The stipulation also provided, "Nothing contained in this Stipulation shall be deemed to waive any of Defendant's . . . possible defenses [other than untimely service], including those based on jurisdiction and/or statute of limitations; and Defendant reserves the right to assert such defenses." (Id., ¶ 3.)

Also on February 28, 2005, plaintiff and defendant Teleplex stipulated and agreed that "[p]laintiff hereby dismisses without prejudice [03-cv-3555] against Defendant," and that "[n]othing contained in this Stipulation shall be deemed to waive any of Plaintiff's rights." (Doc. no. 82, ¶¶ 1 and 4, Stipulation between plaintiff and Teleplex, filed 2/28/05.) The stipulation also provided, "Nothing contained in this Stipulation shall be deemed to waive any of Defendant's . . . possible defenses [other than untimely service], including those based on jurisdiction and/or statute of limitations; and Defendant reserves the right to assert such defenses." (Id., ¶ 3.)

On April 4, 2005, plaintiff and the City defendants stipulated and agreed that "[a]ll claims asserted in [03-cv-3555] against the City [d]efendants are hereby dismissed, without prejudice, and without costs, expenses, or fees." (Doc. no. 87, Stipulation between plaintiff and the City defendants, dated 4/4/05, ¶ 1.) The stipulation was "so ordered" on April 8, and entered on April 13, 2005. The stipulation also provided, "Nothing contained in this Stipulation shall be deemed to waive any of the City [d]efendants' defenses, including those based on jurisdiction or statute of limitations, and [d]efendants reserve the right to assert those defenses." (Id., ¶ 3.)

By letter dated April 8, 2005, plaintiff notified the court that "pursuant to Rule 41(a)(1) [plaintiff] hereby voluntarily dismisses The New Phone Co., Inc. v. The Department of Information Technology and Telecommunications, et al.[,] 03-Civ-3555 (JG) (KAM)," thereby dismissing the remaining claims against Telebeam and Coastal. (Doc. no. 86, Letter filed by plaintiff, dated 4/8/05.)

On May 2, 2005, Judge Gleeson "so ordered" by endorsement the plaintiff's April 8, 2005 notice of voluntary dismissal of 03-cv-3555. (See Endorsed Order dated 5/2/05 and entered on 5/10/05.) The case was terminated on May 10, 2005. (See Clerk of the Court's entry, dated 5/10/05.)

B. The August 5, 2005 Injunction

Both before and after filing the complaint in 03-cv-3555, plaintiff New Phone and its affiliate, Best Payphones, filed seven additional complaints in this District based on the same subject matter: the enactment and enforcement of the City's regulatory scheme concerning public pay telephones and the alleged conspiracy to discriminate against plaintiffs.*fn2 With eight overlapping and duplicative complaints pending in this District, the undersigned, by Report and Recommendation dated May 3, 2005, recommended, inter alia, that pending motions by New Phone and Best Payphones to amend those complaints be denied and that the plaintiffs be enjoined from filing additional complaints without leave of court. (Doc. no. 160 in 00-cv-2007, Report and Recommendation, dated 5/3/05.)*fn3

After considering submissions by the parties, Judge Gleeson adopted the May 3, 2005 Report and Recommendation by order dated August 5, 2005. (See doc. no. 176 in 00-cv-2007, Order dated 8/5/05.) As Judge Gleeson noted in the August 5, 2005 order,

Over the past five years, plaintiff has filed multiple lawsuits with overlapping claims and a shifting roster of defendants, including the City of New York, the DoITT, Verizon, and various individuals, including individual lawyers who have been involved in litigating plaintiff's claim on behalf of DoITT . . . . In addition to the seven complaints currently pending in the Eastern District of New York, related proceedings have been filed in New York State courts, in the United States Bankruptcy Court, and in the Southern District of New York. (Id. at 3-4.) Noting that "[i]t is well established that federal district courts possess the power to administer their dockets in a manner that conserves scant judicial resources and promotes the efficient and comprehensive disposition of cases," Curtis v. DiMaio, 46 F. Supp. 2d 206, 215 (E.D.N.Y. 1999), aff'd, 205 F.3d 1322 (2d Cir. 2000), Judge Gleeson reviewed de novo the parties' submissions, and adopted in part this court's Report and Recommendation, as follows

(1) denied plaintiffs' request for leave to amend the complaints; (2) dismissed plaintiff's then most recently filed complaint, 05-cv-1702 (JG) (KAM); and (3) enjoined plaintiff from filing, "without leave of court, any new action arising from or related to the enactment and enforcement of the City's regulatory system with respect to public pay telephones in New York City and defendants' alleged conspiracy to discriminate against plaintiff and other public pay telephone providers." (Order dated 8/5/05 at 8.)

On August 17, 2005, plaintiff requested that Judge Gleeson grant plaintiff leave to file a new complaint. (See doc. no. 177 in 00-cv-2007, Letter filed by plaintiff, dated 8/17/06.) On August 26, 2005, Judge Gleeson entered the following:

ORDER denying request to file a new complaint (or a conference for that purpose) set forth in a letter to the Court from Charles H. Ryans dated August 17, 2005. Any future request to file a complaint is respectfully referred to Magistrate Judge Matsumoto. This order applies to the following actions: 00-cv-2007; 03-cv-3978; 01-cv-8506; 01-cv-3934; 03-cv-0192; 04-cv-3541. (Order in 00-cv-2007, dated 8/16/05.)*fn4

C. New Phone Co., Inc. v. New York City Department of Information Technology and Communications, et al., 06-cv-3529 (JG) (KAM)

On June 29, 2006, New Phone requested that this court grant plaintiff leave to file a new complaint in order to avoid the running of the statute of limitations on July 19, 2006. (See doc. no. 187 in 00-cv-2007, Letter filed by plaintiff, dated 6/29/06.) The City defendants opposed plaintiff's request, arguing that because Judge Gleeson's August 5, 2005 order enjoined plaintiff from filing new complaints without leave of court and directed that plaintiff may only seek leave if the proposed new complaint were based on events that occurred after the filing of the earlier complaints, plaintiff's request should be denied because the proposed complaint was not based on new events. (See doc. no. 189 in 00-cv-2007, Letter filed by the City defendants, dated 6/30/06.)

On July 6, 2006, this court ordered that:

Should the City be unwilling to consent to [plaintiff's] proposed amended pleading, plaintiff may make an appropriate motion. Any such motion must be made sufficiently in advance of the expiration of the statute of limitations, taking into consideration the time needed for the filing of opposition and reply briefs, and providing the Court with a reasonable amount of time in which to render a decision. (Order in 00-cv-2007, dated 7/6/06.) Thus, the court granted leave to New Phone to either move to file a new complaint or to amend an existing complaint if the parties were unable to present a stipulation for the court's consideration.

In response to the court's July 6, 2006 order, plaintiff asserted, "[I]t is not possible, nor has it been possible for months and months, for a motion to amend to be briefed . . . , a Report and Recommendation issued, an Objection or Objections to the Report and Recommendation [to] be filed, opposition to the Objection(s) [to] be filed, and Judge Gleeson [to] issue a decision before July 19, 2006," the date that the statute of limitations would run. (Doc. no. 191 in 00-cv-2007, Letter filed by plaintiff, dated 7/13/06.) Plaintiff did not explain why it ...


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