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Alphas v. City of New York Business Integrity Commission

United States District Court, S.D. New York

May 9, 2017

Alphas, Plaintiff
v.
The City of New York Business Integrity Commission et al., Defendants.

          MEMORANDUM OPINION

          ANDREW L. CARTER, JR., United States District Judge

         This is another action that arises out of a wholesale food distribution business formerly operated by the Alphas Company of New York, Inc. (the "Alphas Company" or "Company") at the Hunts Point Terminal Produce Market (the "Market"). Plaintiff Peter Alphas brings this action against the City of New York Business Integrity Commission ("BIC"), Hunts Point Department of Public Safety ("HPDPS"), and the City of New York for constitutional violations under 42 U.S.C. § 1983 and common law negligence. All Defendants have moved to dismiss under a variety of grounds including lack of Article III standing and failure to state a § 1983 claim. Plaintiff has also moved pursuant to Fed.R.Civ.P. 15(a) for leave to amend their complaint. On March 31, 2017, this Court denied Plaintiff s motion to amend the complaint and granted the Defendants' motions to dismiss. The Court does so because Plaintiff Alphas lacks standing to bring federal claims and the defect in standing cannot be fixed in subsequent pleadings. The Court now elaborates on these reasons.

         FACTUAL BACKGROUND

         The following facts are drawn from Plaintiffs Complaint, as well as documents of which the Court may take judicial notice.[1] The Complaint assumes familiarity with the complaint (the "RICO Complaint") filed by Alphas and the Company against the Hunts Point Terminal Produce Cooperative Association, Inc. ("Hunts Point Co-op"), who operates the Market, the union who provides employees to the Hunts Point Co-op members, and various attorneys employed by Hunts Point Co-op and the union (collectively, the "RICO Defendants"). The RICO Complaint alleges a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), conspiracy to violate RICO, and eight state law claims. See ECF No. 2, Ex. A; see also The Alphas Company of New York Inc. v. The Hunts Point Terminal Produce Cooperative, Inc, 1:14-cv-00145 (ALC) (S.D.N.Y).

         Peter Alphas is the sole shareholder of the Alphas Company of New York Inc., a domestic corporation that conducts wholesale food packing and distribution around New York City. Compl. ¶ 12. The Alphas Company is currently in bankruptcy and under the control of a trustee for the United States Bankruptcy Court. Id. ¶ 14. Prior to the bankruptcy, the Alphas Company operated out of a building within the Market that it leased from Hunts Point Co-op, a cooperative of produce merchants who operate the Market. Id. ¶ 12. Hunts Point Co-op commenced an eviction proceeding against the Alphas Company, and the Company was evicted pursuant to the proceeding. Id. ¶¶ 27-28. Alphas seeks damages against the Defendants in connection with the eviction.

         Alphas made numerous complaints to the BIC that Hunts Point Co-op was attempting to ruin his business and that the BIC needed to investigate the Hunts Point Co-op's actions and prevent the eviction. Id. ¶ 23. The BIC regulates commercial waste, public wholesale markets, and shipyard gambling industries in New York City. See N.Y.C. Charter Ch. 63, § 2101. The BIC can also grant, renew, or deny licenses to operate in wholesale markets. See N.Y.C. Admin. Code § 22-253(a). Moreover, the BIC can conduct criminal investigations into the businesses it regulates, including those operating in the Market. See N.Y.C. Charter Ch. 63, § 2101(b). As alleged in the complaint, BIC's inaction in regards to investigating Alphas' complaints about the RICO Defendants and preventing the eviction brought on by the Hunts Point Co-op violated Alphas' constitutional rights. Compl. ¶¶ 38-44.

         In addition, the HPDPS participated in the eviction of the Alphas Company. The HPDPS is a security service employed by the Market and is also commissioned by the New York State Peace Officers. Compl. ¶¶ 9-10. In connection with the eviction, HPDPS placed "security around the clock in front of [the Company]" (id¶ 23(a)), escorted the Company's employees out the leased units after the Company was evicted (id. ¶ 23(g), Q), cleared out inventory and equipment during the course of the eviction (id. ¶ 23(h)), and failed to investigate and prosecute the eviction as criminal conduct (id. ¶ 14). According to Alphas, HPDPS acted at the direction of the RICO Defendants in preventing the Alphas Company from operating at the Market. Id. ¶ 23

         As a result of BIC's and HPDPS's actions, the Alphas Company was driven into bankruptcy, ruining Alphas' "ownership interest financially." Id. ¶ 34(b), (c)). In addition, the Alphas Company lost "inventory, supplies and equipment" as well as profits and business opportunities. Id. ¶¶ 21(1), 31-37. Consequently, Alphas seeks money damages for these alleged injuries.

         STANDARD OF REVIEW

         Defendants move to dismiss under Rule 12(b)(6), but their Article III standing arguments belong under Rule 12(b)(1) as it implicates subject matter jurisdiction. The standard of review for 12(b)(1) motions is "substantively identical" to Rule 12(b)(6) motions, but the key difference is that the movant bears the burden of proof on a 12(b)(6) motion but the plaintiff invoking the court's jurisdiction bears the burden on a 12(b)(1) motion. See Lerner v. Fleet Bank, N.A. , 318 F.3d 113, 128 (2d Cir. 2003); Keepers, Inc. v. City of Milford, 807 F.3d 24, 38 (2d Cir. 2015) ("The party invoking federal jurisdiction bears the burden of establishing prudential and constitutional standing...").

         To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a claim must contain "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroftv. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim has facial plausibility "when the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. The plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. For the purposes of a motion to dismiss, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiffs favor. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). However, the court need not credit "mere conclusory statements" or "threadbare recitals of the elements of a cause of action." Iqbal, 556 U.S. at 678, 681 (citing Twombly, 550 U.S. at 555). The complaint must provide factual allegations sufficient "to give the defendant fair notice of what the claim is and the grounds upon which it rests." Port Dock & iStone Corp. v. Oldcastle Northeast, Inc., 507 F.3d 117, 121 (2d Cir. 2007) (citing Twombly, 550 U.S. at 555).

         To decide the motion, the court "may consider facts as asserted within the four corners of the complaint together with the documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference." Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 64 (2d Cir. 2010) (internal quotation marks omitted). The Court may also consider "matters of which judicial notice may be taken." Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993). "Judicial notice may encompass the status of other lawsuits in other courts and the substance of papers filed in those actions." Johnson v. Levy, 812 F.Supp.2d 167, 176 (E.D.N.Y. 2011); see also Kramer v. Time Warner Inc., 937 F.2d 767, 111 (2d Cir. 1991).

         DISCUSSION

         A. Suit ...


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