8 Erie St. JC LLC v. City of Jersey City, Civil Action No. 19-cv-9351

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
Writing for the CourtJohn Michael Vazquez, U.S.D.J.
Parties8 ERIE ST. JC LLC, Plaintiff, v. CITY OF JERSEY CITY, et al., Defendants.
Docket NumberCivil Action No. 19-cv-9351
Decision Date19 February 2021

8 ERIE ST. JC LLC, Plaintiff,
CITY OF JERSEY CITY, et al., Defendants.

Civil Action No. 19-cv-9351


February 19, 2021

Not for Publication


John Michael Vazquez, U.S.D.J.

In this matter, Plaintiff 8 Erie St. JC LLC ("8 Erie") alleges that two city ordinances violated its constitutional rights, state law, and private contractual rights. Presently pending before the Court are motions to dismiss the Amended Complaint filed by the following Defendants: (1) the City of Jersey City and the Jersey City Council (the "Council" and together, the "City"), D.E. 64; (2) the Jersey City Planning Board ("JCPB"), D.E. 65; and (3) the Jersey City Redevelopment Agency ("JCRA"), D.E. 66. Plaintiff filed a brief in opposition, D.E. 69, to which Defendants replied, D.E. 72, 73, 74.1 The Court reviewed the parties' submissions and decided the motions without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons set forth below, Defendants' motions are GRANTED in part and DENIED in part.

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The Court set forth the factual background of this matter in its prior Motion to Dismiss Opinion (the "prior Opinion"), D.E. 56, which the Court incorporates by reference here. Accordingly, the Court writes primarily for the parties, who are already familiar with this matter.

In 2012, the JCRA awarded 8 Erie with the winning proposal for a redevelopment plan of a property in Jersey City, and 8 Erie subsequently entered into an agreement (the "Redevelopment Agreement") with the JCRA on July 20, 2012. Am. Compl. ¶ 21. Through the Redevelopment Agreement, Plaintiff purchased the property at issue and agreed to convert an existing building into residential units on the second and third floors with commercial space on the ground floor and basement. Id. ¶¶ 23-24. Other than local zoning ordinances, the Redevelopment Agreement did not contain any restrictions on potential tenants of the building. Id. ¶¶ 18, 20.

While Plaintiff was redeveloping the building, the City passed two ordinances that limited the type of commercial businesses that could lease space in certain areas (the "Challenged Ordinances"). Plaintiff alleges Jersey City's Mayor, Steven M. Fulop, "acting as an agent for the City," forced the Challenged Ordinances through the Council to bolster political support for his gubernatorial campaign. Id. ¶¶ 32, 34. Plaintiff also pleads that the JCPB made its recommendations as to the Challenged Ordinances "solely at the insistence of the Mayor" and did not conduct any meaningful review before recommending the Ordinances to the Council. Id. ¶ 37. Ordinance 15.052 created a definition for "formula business," which, generally is a commercial business with at least two standardized characteristics and that has ten or more locations within

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300 miles of Jersey City. Id. ¶¶ 43, 45. Ordinance 15.053 amended certain redevelopment plans, including the plan for 8 Erie Street, by limiting formula business establishments "to a maximum of 30% of ground floor leasable commercial area." Id. ¶ 52. The Challenged Ordinances were repealed on April 17, 2019, after Plaintiff filed its initial Complaint. Id. ¶ 78.

Plaintiff alleges that while the Challenged Ordinances were in effect, they were selectively applied to Plaintiff's detriment. Specifically, Plaintiff contends that it lost a prospective tenant because the tenant was a formula business that was prohibited from leasing Plaintiff's property under the Challenged Ordinances. Id. ¶¶ 72-75. The Challenged Ordinances also decreased the value of Plaintiff's property. Id. ¶ 77. In 2017, however, the City permitted a Krispy Kreme to open in a redevelopment area that was subject to the Challenged Ordinances. Plaintiff alleges that the Krispy Kreme was a formula business. Id. ¶¶ 65-70.

Plaintiff sued on April 5, 2019, asserting claims under 42 U.S.C. § 1983, alleging violations of the Commerce Clause and the Equal Protection Clause of the Fourteenth Amendment. Plaintiff also asserted state law and contract-based claims. D.E. 1. Plaintiff initially sought injunctive and declaratory relief declaring that the Challenged Ordinances were unconstitutional, in addition to monetary relief from the lost tenant and decreased property value. Id. As noted, after Plaintiff filed its Complaint, however, the Challenged Ordinances were repealed. Although Plaintiff no longer seeks injunctive or declaratory relief, it still requests monetary damages. D.E. 21.

Defendants subsequently filed motions to dismiss, which the Court granted in part and denied in part. The Court dismissed the two Section 1983 claims of Plaintiff's Complaint for failure to state a claim and did not consider Plaintiff's remaining state law claims because it lacked supplemental jurisdiction. The Court also granted Plaintiff leave to file an amended pleading to

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cure the identified deficiencies. D.E. 56, 57. Plaintiff filed its Amended Complaint on June 22, 2020. D.E. 60. Defendants then filed the instant motions to dismiss. D.E. 64, 65, 66.


A. Legal Standard

The City first argues that the Amended Complaint should be dismissed as moot, which is addressed through Federal Rule of Civil Procedure 12(b)(1). See Goodmann v. People's Bank, 209 F. App'x 111, 113 (3d Cir. 2006).

In deciding a Rule 12(b)(1) motion, a court must first determine whether the party presents a facial or factual attack because the distinction determines how the pleading is reviewed. A facial attack "contests the sufficiency of the complaint because of a defect on its face," whereas a factual attack "asserts that the factual underpinnings of the basis for jurisdiction fails to comport with the jurisdictional prerequisites." Elbeco Inc. v. Nat'l Ret. Fund, 128 F. Supp. 3d 849, 854 (E.D. Pa. 2015) (citing Moore v. Angie's List, Inc., 118 F. Supp. 3d 802, 806 (E.D. Pa. 2015)). The City raises a facial attack here. Thus, "the Court must consider the allegations of the complaint as true," much like a Rule 12(b)(6) motion to dismiss. Bd. of Trs. of Trucking Emps of N. Jersey Welfare Fund, Inc. v. Caliber Auto Transfer, Inc., No. 09-6447, 2010 WL 2521091, at *8 (D.N.J. June 11, 2010) (quoting Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006)).

Rule 12(b)(1) permits a court to dismiss a matter for lack of subject-matter jurisdiction, and a court lacks subject matter jurisdiction when a case becomes moot. Id. "The doctrine of mootness requires that 'an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed.'" Brown v. Phila. Hous. Auth., 350 F.3d 338, 343 (3d Cir. 2003) (quoting N.J. Tpk. Auth. v. Jersey Cent. Power, 772 F.2d 31 (3d Cir. 1985)). "If a claim no longer

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presents a live case or controversy, the claim is moot and the federal court lacks jurisdiction to hear it." Nextel W. Corp. v. Unity Township, 282 F.3d 257, 261 (3d Cir. 2002).

B. Analysis

The City contends that the Amended Complaint should be dismissed as moot because the Challenged Ordinances were repealed on May 8, 2019. See, e.g., City Br. at 7-9, 18-19. The City and the JCPB already made this argument in their first motions to dismiss, and the City makes a virtually identical argument here. In the prior Opinion, this Court determined that although Plaintiff's injunctive claims were moot because the Challenged Ordinances were repealed, Plaintiff presented a live controversy for its other claims. Opinion at 5. Namely, Plaintiff alleged that it lost a prospective commercial tenant because of the Challenged Ordinances and that the Ordinances significantly reduced the value of its property. Id. In the Amended Complaint, Plaintiff still alleges that it lost a tenant and that the property value decreased because of the Ordinances.3 Am. Compl. ¶¶ 71-77. Accordingly, for the same reasons as discussed in the prior Opinion, Plaintiff's claims for monetary relief are not moot. The City's motion is denied on these grounds.

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The Court turns to Defendants' Rule 12(b)(6) arguments. The City seeks to dismiss the Amended Complaint in its entirety, and the JCPB and the JCRA seek to dismiss Counts II (asserted against all Defendants) and VI (asserted against the City and the JCRA).

A. Legal Standard

Rule 12(b)(6) permits a court to dismiss a complaint that fails "to state a claim upon which relief can be granted[.]" For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Further, a plaintiff must "allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims." Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements of the elements of a claim are legal conclusions, and therefore, are not entitled to a presumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). The Court, however, "must accept all of the complaint's well-pleaded facts as true." Fowler, 578 F.3d at 210.

B. Analysis

1. Section 1983 Claims

In Counts One and Two, Plaintiff asserts claims pursuant to 42 U.S.C. § 1983 alleging that the Challenged Ordinances violated the Commerce Clause (Count I, and only as to the City) and Equal Protection Clause (Count II, and as to all Defendants). As discussed in the prior Opinion,

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to state a Section 1983 claim, a plaintiff must...

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