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Easton LLC, Doing Business In New York As Shillelagh Holdings LLC v. Inc. Village of Muttontown

April 27, 2012

EASTON LLC, DOING BUSINESS IN NEW YORK AS SHILLELAGH HOLDINGS LLC, PLAINTIFF,
v.
INC. VILLAGE OF MUTTONTOWN, DEFENDANT.



The opinion of the court was delivered by: E. Thomas Boyle United States Magistrate Judge

MEMORANDUM OPINION AND ORDER

Before the court are the following cross-motions: (1) the plaintiff's motion for a preliminary injunction, enjoining the defendant from enforcing a moratorium that it has enacted and requiring it to immediately consider plaintiff's application to subdivide its property; and (2) the defendant's motion to dismiss the plaintiff's Amended Complaint, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), on the grounds that this action is not ripe for adjudication. For the following reasons, defendant's motion to dismiss is granted and the plaintiff's motion for a preliminary injunction is denied as moot.

FACTS

Plaintiff, Easton LLC ("Easton"), is a family-held limited liability company that owns a 100-plus acre parcel of unsubdivided land (the "Property") in the defendant, the Incorporated Village of Muttontown's (the "Village"), three-acre residential zoning district. (Am. Compl. ¶ 17.) The family members who make up Easton no longer reside on the Property. (Id. ¶ 16.)

Easton seeks to develop the Property into a large lot residential community composed of minimum three-acre residential lots under the Village's existing zoning regulations. (Id. ¶ 10.) However, due to several moratoria put in place by the Village, Easton has been prevented from submitting its subdivision application to the Village for review and approval. (Id.)

According to the allegations in the Amended Complaint, in March 2010, it became publicly known that the 107-acre Woodcrest County Club ("Woodcrest") would be sold at a bankruptcy auction in May 2010. (Id. ¶ 29.) The Village sought to acquire Woodcrest at the bankruptcy auction. (Id. ¶ 30.) On or about March 10, 2010, at a public meeting of the Village's Board of Trustees (the "Trustees"), the Village Attorney publicly announced that the Village should immediately adopt an emergency hold on subdivision approvals so that it could review its "40 year old master plan." (Id. ¶ 31.) The Village Attorney cited the Woodcrest bankruptcy auction as the principal reason for the review of the master plan and the moratorium on subdivision approvals. (Id.) At this same meeting, the Village Trustees voted to authorize the Village Attorney to draft a local law that would impose the moratorium. (Id. ¶ 32.)

On or about April 13, 2010, at a subsequent meeting of the Village's Trustees, the Village Attorney urged that a public hearing on the proposed moratorium law be scheduled for April 29, 2010. (Id. ¶ 33.) The Woodcrest bankruptcy auction was scheduled to occur on May 6, 2010. (Id.) The Village publicly announced its intention to study its master plan at this time, which it claimed had not been reviewed or updated since 1969. (Id. ¶ 36.) Plaintiff alleges that this statement was in fact not true and that the Village had reviewed its master plan completely in 1989. (Id. ¶ 37 and Ex. E, annexed to original Complaint.) Plaintiff further alleges that the 1989 master plan and zoning regulations were themselves reviewed as recently as 2003 when the Village adopted Local Law 4 of 2003, previously imposing another subdivision moratorium for the purpose of reviewing the master plan. (Id. ¶ 38.)

According to the Amended Complaint, the adoption of a subdivision moratorium in 2010 and "the spectre of a review of a municipality's master plan and zoning have the obvious and predictable impact of significantly lowering the value of subdividable land, such as Woodcrest and [the Easton] [P]roperty." (Id. ¶ 40.) The devaluing occurs because potential purchasers are in doubt as to how such property might be zoned when the moratorium is lifted. (Id.) This uncertainty "equates to a diminution of the value of the property." (Id.)

On or about May 6, 2010, the bankruptcy auction of Woodcrest took place.*fn1 (Id. ¶ 43.) On or about May 12, 2010, the Village adopted Local Law 1 of 2010, imposing the subdivision moratorium announced in March 2010. (Id. ¶ 44.) The moratorium was divided into four phases as follows: an initial six-month period and three possible three-month extensions, for a total of fifteen months. (Id. ¶ 49.) The extensions could be imposed, if needed, by a resolution of the Village's Trustees. (Id.) Each of the three extensions were adopted by the Village without any explanation other than that more time was necessary. (Id.) According to plaintiff, the Village took no steps to address the concerns alleged for the adoption of the moratorium during its entire fifteen-month term. (Id. ¶¶ 50-53.)

On July 27, 2011, the Village adopted another local law - Local Law 2 of 2011 -imposing a second moratorium, identical to the first one adopted in May 2010 and including the same term of fifteen months. (Id. ¶ 55.) According to plaintiff, the Village scheduled the public hearing on the second proposed moratorium for a Wednesday morning at 11:30 a.m., when many people could not attend, as opposed to its customary practice of holding public hearings in the evenings at 7:30 p.m. (Id. ¶ 56.) The record from the public hearing demonstrates that not one resident attended the July 27, 2011 hearing. (Id.)

Easton commenced the within action on October 3, 2011 and amended its Complaint on December 18, 2011. The Amended Complaint is for a declaratory judgment to redress the alleged violations of Easton's Fifth and Fourteenth Amendment rights. Plaintiff alleges that the reasons given by the Village for the moratoria are "patently false, irrelevant and fraudulent" and that the Village has done nothing during the course of the two back-to-back moratoria to address the problems alleged by the Village as reasons for their imposition. (Id. ¶¶ 11-12.) The Amended Complaint alleges that the two moratoria, both on their face and as applied, violate Easton's due process and equal protection rights under the Fifth and Fourteenth Amendments because: (1) the only reason to impose the moratoria was to devalue private property so that the Village could acquire Woodcrest as a lower price at the bankruptcy auction; (2) the moratoria constitute a deprivation of property and liberty without due process of law; (3) the moratoria constitute a deprivation of equal protection, as well as unlawful discrimination, because they affect only a handful of the more than 1,000 landowners in the Village; (4) the moratoria constitute an invalid exercise of police power by the Village; and (5) the moratoria constitute a taking of property without just compensation. (Id. ¶ 62.)

Easton requests a preliminary and permanent injunction prohibiting the Village from enforcing its second moratorium and mandating that Easton be permitted to immediately submit for review its subdivision plan. (Id. ¶ 63.) Easton further seeks a declaratory judgment that Local Law 1 of 2010 and Local Law 2 of 2011 are invalid and constitute takings in violation of the Fifth Amendment and that just compensation be awarded to Easton from the effective date of Local Law 1 of 2010 to the date of the entry of judgment herein. (Id.) Finally, Easton seeks its attorney's fees and costs incurred in bringing this action.

DISCUSSION

I. Legal Standard

A district court should dismiss a case for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) when the court "lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000); see also Fed. R. Civ. P. 12(b)(1). When reviewing a motion to dismiss for lack of jurisdiction, the Court "must accept as true all material factual allegations in the complaint, but [it is] not to draw inferences from the complaint favorable to Plaintiff[]." Wood v. GMC, No. CV 08-5224, 2010 U.S. Dist. LEXIS 96157, at *9 (E.D.N.Y. Aug. 23, 2010) (quoting J.S. ex rel. N.S. v. Attica Cent. Schs., 386 F.3d 107, 110 (2d Cir. 2004)) (additional citation omitted) (alteration in original). The Court may also "consider evidence outside the pleadings, such as affidavits" when determining whether it has jurisdiction. Stoothoff v. Apfel, No. 98 Civ. 5724, 1999 U.S. Dist. LEXIS 10459, at *1 n.1 (S.D.N.Y. July 7, 1999) (citing cases). "The plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence." Wood, 2010 U.S. Dist. LEXIS 96157, at *9 (quoting Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005)).

Similarly, "[t]o survive a motion to dismiss [pursuant to Rule 12(b)(6)], a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "Facial plausibility" is achieved when the "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556). As a general rule, the court is required to accept as ...


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