Ginx Inc. v. Alliance
| Decision Date | 19 August 2010 |
| Docket Number | No. 09 Civ. 6977(CM).,09 Civ. 6977(CM). |
| Citation | 720 F.Supp.2d 342 |
| Parties | GINX, INC., d/b/a Lola, Gayle Patrick-Odeen, individually, Tom Odeen, individually, Plaintiffs, v. SOHO ALLIANCE, Daniel B. Boyle, individually, Lawrence Gedda, individually, Noreen Healey, individually, John S. Sweeney, individually, John Evans, individually, and Marie Evans, individually, Defendants. |
| Court | U.S. District Court — Southern District of New York |
OPINION TEXT STARTS HERE
COPYRIGHT MATERIAL OMITTED.
Ambrose Wotor Wotorson, Jr., Law Offices of Ambrose Wotorson, P.C., Brooklyn, NY, for Plaintiffs.
Joel Graber, New York State Office of the Attorney General, Raymond W. Belair, Marshall James Shepardson, Belair & Evans, LLP, New York, NY, for Defendants.
DECISION AND ORDER GRANTING THE MOTIONS OF DEFENDANTS NOREEN HEALEY, JOHN EVANS AND MARIE EVANS TO DISMISS THE AMENDED COMPLAINT; DISMISSING THE AMENDED COMPLAINT AS AGAINST THE UNSERVED DEFENDANTS; AND DENYING AS FUTILE PLAINTIFFS' MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT
Before the Court are motions to dismiss this action by Defendant Noreen Healey (Commissioner of the New York State Liquor Authority, sued in her individual capacity), and Defendants John and Marie Evans. The Plaintiffs-who have already served one amended complaint-respond to the motions with a further proposed amendment of their pleading.
Both motions to dismiss are meritorious and are granted. Because it would be futile to permit Plaintiffs to amend their complaint, their motion for leave to amend is denied with prejudice.
The Evanses' additional motion for the imposition of sanctions under New York State's Anti-SLAPP statute is denied.
The same claims that have been asserted against Commissioner Healey are also asserted against two former State Liquor Authority (the “SLA” or the “Authority”) Commissioners-Daniel Boyle and Lawrence Gedda. Neither defendant has been properly served, although the SLA, per the Court's direction, gave their last known personal addresses to Plaintiffs' counsel some time ago. As 120 days and more have passed since the issuance of the amended summonses-and more than 300 days since the issuance of the original summonses, which were never served on anyone-the Court sua sponte dismisses the complaint as against them. Since the dismissed claims would be no more meritorious against Commissioners Boyle and Gedda than they were against Commissioner Healey, dismissal is with prejudice.
Plaintiff Gayle Patrick-Odeen is an African-American woman. (Pls.' Am. Compl., Oct. 26, 2009, ¶ 4.) Plaintiff Tom Odeen, her husband, is a Caucasian male. ( Id. at ¶ 5.) Ginx, Inc. is a company that the couple owns and controls. ( Id. at ¶¶ 4-5.)
For nineteen years, Plaintiffs (through Ginx) operated a successful restaurant/club, known as Lola's, in the Chelsea area of Manhattan. ( Id. at ¶ 9(a).) According to the Amended Complaint, Lola's developed a “stellar reputation” as a restaurant that featured live music. ( Id. at ¶ 9(b).)
After losing their lease, Plaintiffs decided to move Lola's to a new location in Soho-specifically at 5-15 Watts Street ( id. at ¶ 9(c)), the site of the former “Club Chaos,” which was the subject of considerable neighborhood ire until it closed (Affirmation of Scott Weiner, SLA Staff Attorney, Ex. B at 5 ¶ 7 (ALJ Mem., dated Dec. 30, 2004)). The new location was within 500 feet of at least three other establishments with on-premises liquor licenses. (Weiner Aff. Ex. B at 4 ¶ 2.) In fact, the record reveals that this address was within 500 feet of as many as 35 other licensed establishments. ( Id.)
Because of the proximity of so many other licensed premises, Lola's could not obtain an on-premises liquor license without the approval of the State Liquor Authority. N.Y. Alco. Bev. Cont. Law (“ABCL”) § 64(7)(f) (2009). The statute creates a presumption against the issuance of the liquor license, and requires the SLA to consult with the community before making a determination that the on-premises license would be in the public interest. Id.
Lola's filed an application for an on-premises license. (Am. Compl. ¶ 9(e).) Section H of the application, entitled “Proposed Method of Operation,” indicated that the premises would operate as a restaurant/lounge, featuring only “Background Music.” (Weiner Aff. Ex. C, Sec. H (SLA Mem., dated Feb. 4, 2005).) In press accounts that Plaintiffs have attached to (and therefore incorporated into) their complaint, Plaintiffs admitted that their attorney filed an application that did not ask for permission to play live music at Lola's new location-which they characterize as lawyer error. (
An administrative law judge (the “ALJ”) affiliated with the SLA conducted a hearing (known as a 500-Foot Rule Hearing) on November 30, 2004. (Weiner Aff. Ex. B at 1.) At the hearing, substantial opposition to Lola's application was voiced, including opposition from an organization called the Soho Alliance. ( Id. at 3-4.) Other opponents included Community Board # 2 and the Soho Arts Council, neither of which is named as a defendant in these proceedings. ( Id.)
At the hearing, Lola's made oral concessions on at least some of the issues raised by the community. Plaintiffs agreed that Lola's would close at 1:00 a.m. rather than 4:00 a.m., and also agreed to soundproof the premises. ( Id. at 1.) Plaintiffs also presented 535 signatures from members of the Soho community who supported the application, as well as 45 letters of support. (Am. Compl. ¶ 9(k).)
After a full hearing, the ALJ Report of December 30, 2004 summarized the evidence in the record, but (contrary to Plaintiffs' representation in the Amended Complaint) made no discernable recommendation one way or the other on the application. (Weiner Aff. Ex. B; Am. Compl. ¶ 9(j).) The SLA's Licensing Board Memorandum of February 4, 2005 cited the ALJ Report but the “Licensing Board Recommendation” is listed as “deferred.” (Weiner Aff. Ex. C at 2.) I assume this means that the Deputy Commissioner, who wrote the SLA Memo, deferred to whatever decision the Commissioners might reach. To the extent that Plaintiffs' Amended Complaint asserts that “the ALJ concluded that Lola's application would be in the public interest,” the Court cannot consider this a “well-pleaded allegation” or accept it as true, since it contradicts the text of the ALJ's Report. (Am. Compl. ¶ 9(j) (emphasis in original)); see Ashcroft v. Iqbal --- U.S. ----, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009).
Despite the absence of any recommendation from the ALJ or Deputy Commissioner, the SLA determined that Plaintiffs' application was in the public interest “for the reasons stated in” the ALJ's report, and granted the license on March 2, 2005. (Weiner Aff. Ex. D at 1 (SLA Determ., dated Mar. 2, 2005).) As I have observed, the ALJ's report did no more than summarize the arguments of those in favor of the application and those opposed. The SLA failed to indicate which of those arguments it found persuasive or why those arguments trumped the legal presumption that there should be no more than three licensed premises in close proximity to one another. ( Id.)
It is clear enough, from the ALJ's Memorandum (Weiner Aff. Ex. B at 1 ¶ 1), as well as from the minutes of the SLA Meeting on March 2, 2005 (Weiner Aff. Ex. D at 4 ¶ 1), that the SLA Commissioners were aware that the applicants had stated at the administrative hearing that Lola's would feature live music. The ALJ's Memorandum specifically notes counsel's statement that Lola's would be a “restaurant/lounge featuring live music.” (Weiner Aff. Ex. B at 1.) The SLA's “listing”-which purportedly is where the commissioners explained their reasons for granting the application-includes this statement from the ALJ's report. (Weiner Aff. Ex. D at 4 ¶ 1.)
However, the license that issued to Plaintiffs does not permit live music; it provides only for “background music.” That is because the application that was filed by Plaintiffs, and approved by the SLA, requested a “background music” permit rather than a “live music” permit. The error is obvious, yet Plaintiffs did not seek to formally amend their “background music” application until December 2007-well after the “background music only” license issued. (Affirmation of Donald Martin, SLA Senior Attorney, Ex. A at 3 ().) So when the SLA issued its March 2, 2005 decision, which says that it approved the application “in light of all the pertinent facts and circumstances” (Weiner Aff. Ex. D at 6), the application it was approving was not an application for a premises with live music....
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