Gym Door Repairs, Inc. v. Young Equip. Sales, Inc.

• Citation: 206 F.Supp.3d 869
• Decision Date: 09 September 2016
• Docket Number: 15-cv-4244 (JGK)
• Parties: GYM DOOR REPAIRS, INC. et al., Plaintiffs, v. YOUNG EQUIPMENT SALES, INC. et al., Defendants.
• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

206 F.Supp.3d 869

GYM DOOR REPAIRS, INC. et al., Plaintiffs,
v.
YOUNG EQUIPMENT SALES, INC. et al., Defendants.

15-cv-4244 (JGK)

United States District Court, S.D. New York.

September 9, 2016
September 12, 2016
As Amended September 16, 2016

206 F.Supp.3d 885

Eric Su, Fordharrison LLP, New York, NY, Katherine Jane Daniels, Katherine Daniels LLC, North Salem, NY, for Plaintiffs.

Patrick McCormick, Joseph Kenneth Poe, Campolo, Middleton & Associates, LLP, Ronkonkoma, NY, Eryn Yee Kwai Truong, Campolo, Middleton & Associates, LLP, Bohemia, NY, Philip Furgang, Furgang & Adwar, L.L.P.(Nyack), New York, NY, Herbert M. Guston, Gustavo J. Garcia-Montes, P.A., Miami, FL, Yetta G. Kurland, The Kurland Group, New York, NY, Dimitrios Kourouklis, Law Office of Dimitrios Kourouklis, Esq., Ph.D, New York, NY, Effimia Soter, Law Offices of Effie Soter, Brooklyn, NY, Jonathan Adam Siegel, New York State Office of the Attorney General, New York, NY, Jason Joseph Snyder, Meredith Rosen Cavallaro, Paduano & Weintraub LLP, New York, NY, Adam I. Kleinberg, Kevin Levine, Sokoloff Stern LLP, Carle Place, NY, Laura A. Endrizzi, Congdon Flaherty O'Callaghan Reid Donlon Travis & Fishl, Uniondale, NY, Scott Brian Glotzer, Gerald E. Singleton, NYC Law Department, Office of the Corporation Counsel, New York, NY, Jenna Lynn Krueger, Susan Smollens, New York City Law Department, New York, NY, for Defendants.

AMENDED OPINION AND ORDER

John G. Koeltl, United States District Judge

The plaintiffs Gym Door Repairs, Inc. ("GDRI") and Safepath Systems LLC ("SPS") (collectively, the "plaintiffs") bring this suit against nineteen defendants to obtain permanent injunctive relief, damages, and attorneys' fees and costs for the defendants' alleged infringement of the plaintiffs' patent, copyrights, and trademarks, and—under New York State law—for unfair competition, tortious interference with business relationships, and civil conspiracy. The plaintiffs assert that the defendants have illegally inspected, maintained or repaired safety systems for electrically operated folding partitions, called the "Safe Path System," that the plaintiffs sold to New York State schools.

The defendants are Young Equipment Sales, Inc., YES Service and Repairs Corporation, Richard Young, Brian Burke, Dennis Schwandtner (collectively, "YES" or the "Young defendants"); Guardian Gym Equipment, Qapala Enterprises, Inc., James Petriello (collectively, the "Guardian defendants"); Tri-State Folding Partitions, Inc., Peter Mucciolo (collectively, the "Tri-State defendants"); Educational Data Services, Inc. ("EDS"); Total Gym Repairs, Inc. ("Total Gym"); Carl Thurnau ("Thurnau"), who is sued both individually and as the Director of the New York State Department of Education Office of Facilities Planning; the New York State School Facilities Association ("SFA"); the School Facilities Management Institute ("SFMI"); Eastern Suffolk Board of Cooperative Educational Services, or BOCES ("ESBOCES"); Nassau BOCES; Bellmore Public Schools ("Bellmore"); and the New York City Department of Education ("NYCDOE") (collectively, "the defendants"). The defendants filed nine motions to dismiss the Second Amended Verified Complaint (the "SAC").¹

206 F.Supp.3d 886

For the reasons that follow, these motions are granted in part and denied in part .

I.

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff's favor. McCarthy v. Dun & Bradstreet Corp. , 482 F.3d 184, 191 (2d Cir.2007). The Court's function on a motion to dismiss is "not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden , 754 F.2d 1059, 1067 (2d Cir.1985). The Court should not dismiss the complaint if the plaintiff has stated "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

While the Court should construe the factual allegations in the light most favorable to the plaintiff, "the tenet that a court must accept as true all of the allegations contained in the complaint is inapplicable to legal conclusions." Id. ; see also Springer v. U.S. Bank Nat'l Ass'n , No. 15–cv–1107(JGK), 2015 WL 9462083, at *1 (S.D.N.Y. Dec. 23, 2015). When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff's possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. Chambers v. Time Warner, Inc. , 282 F.3d 147, 153 (2d Cir.2002) ; see Springer , 2015 WL 9462083, at *1 ; see also Mercator Corp. v. Windhorst , 159 F.Supp.3d 463, 466 (S.D.N.Y.2016).²

II.

The following facts alleged in the SAC are accepted as true for purposes of the defendants' motion to dismiss.

In 2001, the New York State legislature passed, and the governor signed into law, N.Y. Educ. Law § 409–f, which requires all public and private schools in New York State to install and maintain safety devices on all electrically operated partition doors to stop the forward and stacking motion of the doors when a body or other object is present. N.Y. Educ. Law § 409–f and the regulations that the New York Commissioner of Education promulgated in response to it require school districts to post conspicuous notices in the immediate vicinity of the equipment regarding its proper use and supervision and establish procedures concerning the training of employees who regularly use the equipment. See New York State Education Department Commissioner's Regulation § 155.25. Pursuant

206 F.Supp.3d 887

to the law and the regulation, districts must inform their employees of the penalties for disabling the safety devices on the doors and maintain records indicating that training has been done and that the safety devices have been maintained in accordance with the manufacturer's instructions. The plaintiffs allege that this legislation was adopted in 1991 after the tragic death of two New York school children. SAC ¶¶ 25-29

The plaintiffs are the manufacturer of the Safe Path System, a safety device used on electrically operated doors in New York State. The plaintiffs' device was patented until the patent expired on October 17, 2011. SAC ¶¶ 34-36 (citing Patent No. 5,244,030 (the "'030 Patent") for "Electrically Operated Folding Operable Walls"). According to the SAC, between 2003 and 2012, the Safe Path System was the only device approved for use in New York City public schools. SAC ¶ 32. According to the SAC, Safe Path Systems are currently installed in more than 4,700 schools throughout the State. SAC ¶ 45.

Although they had been urging compliance with N.Y. Educ. Law § 409–f and Regulation § 155.25 since 2003, the plaintiffs began in earnest in 2009 to voice their concerns that some schools in New York State were still out of compliance because they had electrically operated partitions without safety systems. SAC ¶ 48. The plaintiffs assert that they knew in 2009 that the Safe Path Systems that had been installed were not being properly inspected and maintained by the schools that had them. Id.

The plaintiffs allegedly raised their concerns with the New York State Department of Education ("NYSED"). SAC ¶ 52. In February, 2009, when circumstances had not improved, the plaintiffs took their complaints to the offices of New York's Governor and Attorney General, to the office of the Mayor of New York City, and to the Senate and Assembly sponsors of N.Y. Educ. Law 409–f. SAC ¶ 50. The plaintiffs' concerns were referred to Carl Thurnau, the Director of the Office of Facilities Planning for the NYSED. SAC ¶ 51.

The plaintiffs allege that Thurnau was very angry and said: "Compliance with the law is a financial decision on my part .... I am putting you out of business. You are done. You are a rat. I told you to stop poking your nose where it does not belong." SAC ¶ 52.

The plaintiffs allege that Thurnau then conspired with Joseph Van De Loo, the Executive Director of the SFMI, a nonprofit organization founded by Thurnau and Van De Loo, to disseminate information and educate school officials about facilities matters, and with others to use the meetings and newsletters of that organization to harm the plaintiffs' business. SAC ¶ 53. The plaintiffs allege that many other state and local officials joined Thurnau and Van De Loo in conspiring to harm the plaintiffs. SAC ¶ 53.

The plaintiffs allege that, in August 2009, Thurnau changed the official NYSED interpretation of N.Y. Educ. Law § 409–f and Regulation 155.25, allowing "any competent person" to work on Safe Path Systems instead of solely the manufacturer's authorized and trained...