United States District Court, S.D. New York
OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge
Artec Construction and Development Corp. sues Defendants New
York City Department of Housing Preservation and Development
(“HPD”) and New York City Department of
Investigation (“DOI”), pursuant to 42 U.S.C.
§ 1983, for Defendants' alleged violations of the
Equal Protection Clause of the Fourteenth Amendment.
Defendants move to dismiss the Amended Complaint (the
“FAC”) under Federal Rule of Civil Procedure
12(b)(6), arguing that Plaintiff has failed plausibly to
plead a constitutional violation or municipal liability for
any such violation. For the reasons set forth in this
Opinion, Defendants' motion to dismiss is denied without
prejudice to refile in light of Plaintiff's proposed
amendment to the FAC.
a New Jersey corporation, is a general contractor that builds
affordable housing in New York City. (FAC ¶ 1).
Plaintiff accomplishes this through contracts that are
negotiated with private developers but administered by HPD,
an administrative agency of the City of New York (the
“City”). (Id. at ¶¶ 1, 4).
DOI, another City administrative agency, is tasked in this
context with investigating potential violations of certain
wage laws (the “Prevailing Wage Laws”) applicable
to general- and sub-contractors on HPD-administered
construction projects (“HPD-related projects”).
(Id. at ¶¶ 1, 5).
was the general contractor on four HPD-related projects (the
“Projects”). (FAC ¶ 8). In or about May
2011, Plaintiff claims, a prominent trade union
“commenced an aggressive public information campaign
against [Plaintiff] alleging that [Plaintiff] and its
subcontractors failed to pay the area standard wages to their
employees and violated the Prevailing Wage Laws.”
(Id. at ¶ 10). The campaign communicated its
message “to government officials, power players and
others involved in the New York City affordable housing
industry.” (Id. at ¶ 11). It also
targeted HPD, accusing the agency through various mediums of
“failing to … withhold contract payments as
required by the law, failing to closely monitor [Plaintiff]
and its subcontractors to [e]nsure compliance with the
Prevailing Wage Laws, and essentially falling down on the
job.” (Id. at ¶ 12). For example, the
union took out a newspaper advertisement that labeled
Plaintiff a “bad” contractor and bore headlines
such as “HPD is Building a Web of Bad
Contractors” and “HPD: Why Are You Perpetuating
These Irresponsible Contractors?” (Id. at
alleges that as a result of being implicated in
Plaintiff's bad conduct, HPD “had an axe to grind
with [Plaintiff].” (FAC ¶ 15). “Almost
immediately after the [union] began its campaign, Doug Apple,
the then-Deputy Commissioner of HPD, without asking any
questions or providing any information, notified …
[Plaintiff's] owner, that [Plaintiff] could not take on
any further HPD-related projects.” (Id.).
Defendants also began investigating Plaintiff and its
subcontractors on the Projects for Prevailing Wage Law
violations. (Id. at ¶ 16).
about March 2013, DOI presented Plaintiff with
Defendants' findings that Plaintiff and its
subcontractors had committed substantial violations of the
Prevailing Wage Laws and that Plaintiff, as the general
contractor for the Projects, was liable for millions of
dollars' worth of back wages (the “DOI Wage
Figure”). (FAC ¶ 18). DOI never presented
Plaintiff with specific allegations or evidence, and never
commenced an administrative proceeding against Plaintiff.
(Id. at ¶¶ 19-20). Instead,
“Defendants simply withheld substantial sums of money
due to [Plaintiff] in connection with its work on the
Projects, placed [Plaintiff] on Enhanced Review status, and
refused to allow [Plaintiff] to work on any further
HPD-related projects.” (Id. at ¶ 21).
2011 and 2015, Plaintiff reached out to Defendants in order
to obtain substantiation for the DOI Wage Figure and to
explore ways that Plaintiff could resume working on
HPD-related projects, but Defendants rebuffed Plaintiff's
efforts. (FAC ¶¶ 22-23). HPD indicated that DOI
approval was necessary before Plaintiff could work on future
HPD-related projects. (Id. at ¶ 24). DOI, in
turn, told Plaintiff that if it “ever wanted to perform
work on City-related construction projects again, ”
Plaintiff had to agree to:
(i) pay the [DOI Wage Figures] in full with no questions
(ii) subject [Plaintiff's owner] to a “Queen for a
Day” proffer session with DOI and the New York City
District Attorney's Office and answer any and all
questions posed by DOI regarding [Plaintiff's] business
operations and knowledge of any alleged wrongdoing in the
industry whether related or unrelated to [Plaintiff], and
(iii) commit to an ongoing and indeterminate relationship of
cooperation with DOI to assist DOI with any of its present
and/or future investigations in the construction industry,
including, but not limited to, the requirement that
[Plaintiff's owner] become a DOI informant, wear a wire
at DOI's command, attend meetings with DOI whenever DOI
so demanded, and otherwise agree to be at DOI's beck and
(Id. at ¶ 25). Having refused to accede to all
of these “bullying and extortionist” conditions,
Plaintiff “is to this day barred from performing work
on City-related construction projects.” (Id.
at ¶¶ 25-26).
filed this action in the Supreme Court of New York, New York
County, on November 9, 2015, and Defendants removed it to
this Court on December 4, 2015. (Dkt. #1). Following a
January 15, 2016 pre-motion conference, Plaintiff filed the
FAC. (Dkt. #14, 16). On April 5 and 6, 2016, Defendants filed
a motion to dismiss the FAC, a supporting brief, and various
attachments. (Dkt. #22, 24). On May 6, 2016, Plaintiff filed
an opposition brief and various attachments ...