McDermott v. New York Metro LLC

• Decision Date: 16 September 2009
• Docket Number: No. 08 Civ. 7524(PKC).,08 Civ. 7524(PKC).
• Citation: 664 F.Supp.2d 294
• Parties: John McDERMOTT and Space Hunters, Inc., Plaintiffs, v. NEW YORK METRO LLC, Daily News L.P., Times News Weekly, Courier-Life, Inc., Avalon Equity Partners LLC, Newsday LLC, Am News Corp., EI Diario, LLC, Village Voice Media, Inc., and NYP Holdings, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

664 F.Supp.2d 294

John McDERMOTT and Space Hunters, Inc., Plaintiffs, v. NEW YORK METRO LLC, Daily News L.P., Times News Weekly, Courier-Life, Inc., Avalon Equity Partners LLC, Newsday LLC, Am News Corp., EI Diario, LLC, Village Voice Media, Inc., and NYP Holdings, Inc., Defendants.

No. 08 Civ. 7524(PKC).

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

September 16, 2009.

Laura Alto, Schulz & Associates, P.C., Melville, NY, for Plaintiff.

Robert Alden Bertsche, Prince, Lobel, Glovsky & Tye LLP, Boston, MA, Daniel Patrick Murphy, Daily News, L.P., Slade R. Metcalf, Katherine Mary Bolger, Theresa M. House, Hogan & Hartson L.L.P., James Eric Rosenfeld, Davis Wright Tremaine LLP, John James Lynch, Pryor Cashman LLP, Bertrand B. Pogrebin, Lisa Michelle Brauner, Littler Mendelson, P.C. New York, NY, for Defendants.

MEMORANDUM AND ORDER

P. KEVIN CASTEL, District Judge:

John McDermott ("McDermott") and Space Hunters, Inc. ("Space Hunters") bring this action seeking declaratory relief, injunctive relief, compensatory damages, punitive damages and attorneys' fees under the Fair Housing Act ("FHA"), Title VIII, of the Civil Rights Act of 1968, as amended, 42 U.S.C. § 3601 et seq. Plaintiffs allege that defendants violated section 804(c) of the FHA, 42 U.S.C. § 3604(c), by publishing advertisements "that indicated preferences, limitations and discrimination based on race, color, religion, sex, handicap, familial status or national origin." (Second Amended Complaint ("Compl."), at ¶ 81.)

Defendants Metro New York, Inc. (incorrectly sued as "New York Metro LLC"), Daily News, L.P. (sued as "Daily News L.P."), Courier-Life, Inc., Newsday LLC, Am News Corp., El Diario, LLC, Village Voice, LLC (incorrectly sued as "Village Voice Media, Inc."), and NYP Holdings move to dismiss the Second Amended Complaint (the "complaint"), pursuant to Rule 12(b)(6), Fed.R.Civ.P., for failure to state a claim upon which relief may be granted. Defendants argue that plaintiffs lack standing to bring their claim under Article III of the Constitution and that, with respect to certain defendants, plaintiffs' claims are time-barred, barred by administrative preclusion, and precluded by the Communications and Decency Act, 47 U.S.C. § 230. For the reasons explained below, defendants' motion is granted and the action is dismissed for lack of jurisdiction.¹

I. Background

The following facts, taken from the complaint and plaintiffs' supporting submissions, are accepted as true for purposes of the Court's jurisdictional review.

Plaintiff John McDermott is a "fair housing tester and the sole shareholder and officer of [Space Hunters]." (Compl. ¶ 4.) Space Hunters is a New York corporation "engaged in the business of room rental information vending." (Id. ¶ 5.)²

Space Hunters "sells lists, or catalogs, of rooms for rent in the boroughs of Queens, the Bronx, and Brooklyn." (Opp. at 3.) "The service performed by [Space Hunters] is the production of a catalog of available rooms pursuant to a customer's description of his/her desired location." (Id.) To create these catalogs, plaintiffs identify potential listings from a variety of sources and contact the property owners for "permission to market their rental." (Id.) "The greatest sources of information for incorporation into [Space Hunter]'s catalogs are the classified sections of metropolitan newspapers." (Id.)

Each of the defendants in this case owns and publishes a newspaper "which offered, and continues to offer, a classified real estate section." (Compl. ¶¶ 6-15.) All ten defendants maintain places of business in the greater New York City metropolitan area. (Id.)

The complaint alleges that each defendant's newspaper published "facially discriminatory advertisements," or accepted such advertisements for publication, on certain dates between April 2005 and August 2008. (Id. ¶¶ 18, 24, 31, 37, 40, 43, 49, 52-54, 57, 63, 69, 75.) The complaint further alleges that, beginning in 2005, plaintiffs filed administrative complaints with the Department of Housing and Urban Development ("HUD") against all defendants, except the New York Post, for publishing the allegedly discriminatory advertisements. (Id. ¶¶ 20, 26, 33, 39, 45, 51, 59, 65, 71; McDermott Decl. ¶ 4.) HUD referred the complaints to the New York State Division of Human Rights ("SDHR") and the SDHR issued a determination of probable cause in each case. (Compl. ¶¶ 20, 26, 33, 39, 45, 51, 59, 65, 71.) McDermott later "requested dismissals of the administrative proceedings for administrative convenience," and he asserts that "[t]hose requests were made expressly for the purpose of bringing a[f]ederal court action." (McDermott Decl. ¶ 5.)

Plaintiffs assert a single claim for relief against all ten defendants under 42 U.S.C. § 3604(c), which prohibits the publication of discriminatory advertisements for the sale or rental of a dwelling. (Compl. ¶¶ 80-82.)³ With minor variations in wording, plaintiffs allege identical injuries with respect to each defendant: they allege that, "at all relevant times, [Space Hunters] was a business competitor in the metropolitan room rental market and, as such, was economically injured by [defendants'] acceptance of facially discriminatory advertisements," and they further allege that "[p]laintiffs have suffered, and continue to suffer, great and irreparable loss, damage and injury as a proximate result of the acts and conduct of [defendants], as set forth herein." (Compl. ¶¶ 22-23, 29-30, 35-36, 42, 47-48, 56, 61-62, 67-68, 73-74, 78-79.)⁴

II. Discussion

The Court begins its analysis of defendants' motion with their standing argument, because if standing is lacking, then the court is without jurisdiction to consider other arguments for dismissal. Article III standing "is the threshold question in every federal case, determining the power of the court to entertain the suit." Ross v. Bank of Am., N.A. (USA), 524 F.3d 217, 222 (2d Cir.2008) (quotation and citation omitted); see also Filetech S.A. v. France Telecom S.A., 157 F.3d 922, 929 (2d Cir.1998) (explaining that federal district courts are "duty-bound ... to address the issue of subject matter jurisdiction at the outset"); Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 101, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (stating that there is no doctrine of "hypothetical jurisdiction"); Merritt v. Shuttle, Inc., 187 F.3d 263, 269 (2d Cir.1999) ("The existence of subject matter jurisdiction goes to the very power of the district court to issue ... rulings ....").

A. Governing Law

1. Rule 12(b)(1)

"A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000). On a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), the court "must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff ... but jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it." Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir.2008), petition for cert. filed, ___ S.Ct. ___, 2009 WL 789199 (U.S. June 1, 2009) (No. 08-1191) (quotations and citations omitted).

In deciding a Rule 12(b)(1) motion, the Court is free to consider materials outside the pleadings. Id.; see also State Employees Bargaining Agent Coal. v. Rowland, 494 F.3d 71, 77 n. 4 (2d Cir.2007) ("[t]he distinction [between a Rule 12(b)(6) motion and a Rule 12(b)(1) motion] is significant: while we must accept all factual allegations in a complaint as true when adjudicating a motion to dismiss under Fed.R.Civ.P. 12(b)(6), ... we have held that, in adjudicating a motion to dismiss for lack of subject-matter jurisdiction, a district court may resolve disputed factual issues by reference to evidence outside the pleadings, including affidavits") (citation omitted). Indeed, "once the [d]efendants' motion to dismiss for lack of jurisdiction under Fed.R.Civ.P. 12(b)(1) put[s] the [p]laintiffs' Article III standing in issue, the [d]istrict [c]ourt has leeway as to the procedure it wishes to follow." Alliance for Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 87-88 (2d Cir.2006) (footnotes omitted) (citing Gibbs v. Buck, 307 U.S. 66, 71-72, 59 S.Ct. 725, 83 L.Ed. 1111 (1939)) ("As there is no statutory direction for procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court.").

2. The standing doctrine

"Article III, § 2, of the Constitution restricts the federal `judicial Power' to the resolution of `Cases' and `Controversies.' That case-or-controversy requirement is satisfied only where a plaintiff has standing." Sprint Commc'ns Co., L.P. v. APCC Servs., Inc., ___ U.S. ___, 128 S.Ct. 2531, 2535, 171 L.Ed.2d 424 (2008). To have standing under Article III, a plaintiff must adequately establish:

(1) an injury in fact (i.e., a "concrete and particularized" invasion of a "legally protected interest");

(2) causation (i.e., a "fairly ... trace[able]" connection between the alleged injury in fact and the alleged conduct of the defendant); and

(3) redressability (i.e., it is "likely" and not "merely speculative" that the plaintiffs injury will be remedied by the relief plaintiff seeks in bringing suit).

Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)) (quotation omitted). "While all three of these elements are constitutionally mandated, the injury-in-fact element is often determinative." See Toll Bros., Inc. v. Twp. of Readington, 555 F.3d 131, 138 (3rd Cir.2009). "Under it, the plaintiff must suffer a palpable and distinct harm." Id. (citing Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)). The injury must be "concrete and particularized," as well as "actual or imminent," and must not be "conjectu...