The opinion of the court was delivered by: Honorable Richard J. Arcara Chief Judge United States District Court
Currently before the Court is a motion by the defendants, the City of Jamestown, New York and Scott L. Bensink, for summary judgment pursuant to Federal Rule of Civil Procedure 56 dismissing plaintiffs Kathleen L. Ludwig, Ludwig Auction & Realty Co., Inc., and Larry J. Schnelzer from this action for lack of standing.*fn1 Oral argument was held on February 6, 2009. For the reasons indicated below, the motion is denied as to plaintiff Ludwig Auction & Realty Co., Inc. and granted as to plaintiffs Kathleen L. Ludwig and Larry J. Schnelzer.
This action concerns the decision of the Jamestown Board of Public Utilities ("BPU") on January 11, 2005 to terminate electrical service to two properties, located at 15 and 19 Cross Street in Falconer, New York. Plaintiff Charles Ludwig leased space at 15 Cross Street and owned 19 Cross Street. Plaintiff Ludwig Auction & Realty Co., Inc. is a business that was located at 15 Cross Street during the times relevant to this action. Charles Ludwig operated the business, while plaintiff Kathleen Ludwig was the owner, sole shareholder, and president. The business operated as an unincorporated entity until February 1993, and has operated as a corporation since. Plaintiff Larry Schnelzer ("Schnelzer") subleased space at 15 Cross Street for a woodworking shop and storage area. From a time prior to February 1993 until approximately January 25, 2005, the name on the BPU account for 15 Cross Street was "Ludwig Auction Realty." The name on the BPU account for 19 Cross Street was Charles L. Ludwig during the times relevant to this action.
BPU disconnected service to both 15 and 19 Cross Street on January 11, 2005 because of past balances due on the account for each property. At that time, Schnelzer did not have his own BPU account; he was receiving electricity for his subleased space through an alleged improper connection to the Ludwigs' service box. After January 11, 2005, Schnelzer contacted BPU about taking over the account for 15 Cross Street, but was informed that he could not do so without also assuming responsibility for the past balance due, at least some of which related to service that Mr. Ludwig had received for another property not involved in this action. Schnelzer did not want to assume responsibility for the past balance due. According to Schnelzer, BPU told him that the only way in which he could take over the 15 Cross Street account without paying the past balance due was if he installed his own meter and electric service box in his subleased space and rewired the space to receive electricity only from the new meter and service box.
Out of an apparent concern for the time that a rewiring of his entire space would take, Schnelzer proceeded with an installation of a new meter and service box, but rewired only about half of his subleased space before taking over the 15 Cross Street account. Schnelzer supplied power to the rest of his subleased space by connecting his new wiring to the old service box on the property, the one that the Ludwigs had used prior to their disconnection and that still featured the alleged improper connection.
BPU began service to Schnelzer through the new service box and wiring on or around January 25, 2005. On or around February 1, 2005, BPU informed Schnelzer that, because the alleged improper connection still existed, the Ludwigs now were receiving electricity when they should not. A site inspection occurred on February 10, 2005. BPU threatened to terminate service at 15 Cross Street by February 11, 2005 unless Schnelzer removed the improper connection and cut power to the old service box that the Ludwigs had used. Schnelzer responded by removing the alleged improper connection and incurring the cost necessary to install new wiring in the other half of his subleased space-the half that he had not rewired initially. Importantly, Schnelzer never experienced an interruption in service after becoming a BPU customer on or around January 25, 2005.
"Summary judgment is appropriate when there is no genuine issue as to a material fact, and the moving party is entitled to judgment as a matter of law. All inferences are drawn in favor of the non-moving party." Hermès Int'l v. Lederer de Paris Fifth Ave., Inc., 219 F.3d 104, 107 (2d Cir. 2000) (citations omitted). "If the movant satisfies the burden of establishing that there is no genuine issue of material fact, then the burden shifts to the non-movant to proffer evidence demonstrating that a trial is required because a disputed issue of material fact exists." Weg v. Macchiarola, 995 F.2d 15, 18 (2d Cir. 1993).
Here, defendants have moved for summary judgment against three of the four plaintiffs, contending that plaintiffs Kathleen L. Ludwig, Ludwig Auction & Realty Co., Inc., and Larry J. Schnelzer never were customers of BPU and therefore lack standing to bring a due process claim. "The Article III limitations are familiar: The plaintiff must show that the conduct of which he complains has caused him to suffer an 'injury in fact' that a favorable judgment will redress." Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 12 (2004) (citation omitted). In the specific context of plaintiffs' Fourteenth Amendment claims, defendants are asserting through their motion that plaintiffs cannot point to "actions of government that work a deprivation of interests enjoying the stature of 'property' within the meaning of the Due Process Clause." Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 9 (1978).
If defendants meet their summary judgment burden and make an initial showing that plaintiffs Kathleen L. Ludwig, Ludwig Auction & Realty Co., Inc., and Larry J. Schnelzer were not BPU customers during the times relevant to this action, then those plaintiffs will bear the burden of identifying triable issues of fact concerning property interests personal to them that were implicated by the January 11, 2005 disconnection of service by BPU. "Property interests are not created by the Constitution, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law . . . ." Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 538 (1985) (internal quotation marks and citation omitted). "When determining whether a plaintiff has a claim of entitlement, [courts] focus on the applicable statute, contract or regulation that purports to establish the benefit." Martz v. Inc. Village of Valley Stream, 22 F.3d 26, 30 (2d Cir. 1994) (citation omitted).
Standing of Ludwig Auction & Realty Co., Inc.
Defendants claim that Ludwig Auction & Realty Co., Inc. lacks standing because it never was a BPU customer in its incorporated form. Defendants state that the customer account for 15 Cross Street was in the name of "Ludwig Auction & Realty" since prior to February 1993, but that this entity was an "assumed name filed by Mr. Ludwig for the auction business he owned and operated." Defendants state that Mr. and Ms. Ludwig incorporated the business in February 1993 as "Ludwig Auction & Realty Co., Inc.," but that they never informed BPU of this change. According to defendants, had the Ludwigs informed BPU of the incorporation and posted a deposit for a non-residential account, the account would have been changed. Defendants explained at oral argument that the change in corporate status is significant because the past balance due on the 15 Cross Street account was carried over from service that Charles Ludwig received ...