Opinion
No. 02 Civ. 6199 (GBD)
January 17, 2003
MEMORANDUM OPINION AND ORDER
Plaintiff Bronx Legal Services ("BLS") brought suit against defendants alleging violations of the Legal Services Corporation Act, federal and state anti-trust violations, retaliation in violation of the First Amendment, violations of the New York Judiciary Law, and state tort claims. Defendant Legal Services Corporation ("LSC") filed a motion to dismiss and defendant Legal Services for New York City ("LSNY") filed a motion for judgment on the pleadings. For the reasons stated below, defendants' motions are granted.
This Court will treat LSNY's motion for judgment on the pleadings as a motion to dismiss as the same standard applies to both motions. See Burnette v. Carothers, 192 F.3d 52, 56 (2d Cir. 1999).
Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss a Complaint where the Complaint "fail[s] . . . to state a claim upon which relief can be granted[.]" FED. R. Civ. P. 12(b)(6). In reviewing a motion to dismiss, this Court accepts the allegations in the Complaint as true and draws all reasonable inferences in favor of the non-moving party. See Patel v. Searles, 305 F.3d 130, 134-35 (2d Cir. 2002). Here, a motion to dismiss will only be granted if the plaintiff can prove no set of facts in support of its claim that would entitle it to relief. See Citibank, N.A. v. K-H Corp., 968 F.2d 1489, 1494 (2d Cir. 1992). A court may look at the Complaint and any documents attached to, or incorporated by reference in, the Complaint. See Dangler v. New York City off Track Betting Corp., 193 F.3d 130, 138 (2d Cir. 1999).
The Legal Services Act Claim
Plaintiff argues that the concerted actions of LSC and LSNY to "force" BLS to reorganize itself as a wholly-owned subsidiary of LSNY or else lose federal LSC funding violates the Legal Services Corporation Act ("LSC Act"). Plaintiff argues that the statute and regulations require that LSC award funds based on competitive bidding among legal service providers, and that the reorganization plan violates that mandate.
LSC is a non-profit corporation established in 1974 by the LSC Act for the purpose of "providing financial support for legal assistance in noncriminal proceedings or matters to persons financially unable to afford legal assistance." 42 U.S.C. § 2996b(a). LSC itself does not directly provide any legal services to clients. It provides grant money and contracts with various other legal services organizations. Those organizations either provide legal services, or in turn subcontract out to another organization. LSNY currently is the only legal services organization in New York City that receives grant money directly from LSC. LSNY, in turn, sub-contracts out to seven county-wide legal services organizations to provide legal services to indigent clients. Plaintiff is one of LSNY's sub-grantee organizations that directly service clients. The regulations adopted by LSC require that legal services organizations seeking to obtain LSC funds go through a competitive bidding process, whereby qualified applicants submit applications to LSC for grants and contracts. See 45 C.F.R. § 1634.1.
The six other sub-grantee organizations are: Brooklyn Legal Services Corporation A, Brooklyn Legal Services Corporation B, Bedford-Stuyvesant Legal Services, Harlem Legal Services, MFY Legal Services, and Queens Legal Services. LSNY seeks to reorganize all seven of its sub-grantee organizations into wholly-owned subsidiaries.
In support of its argument that the reorganization plan violates the competitive bidding mandate, plaintiff argues that since 1998 the number of LSC-funded legal services organizations has decreased nationwide from 262 to 207. Plaintiff contends that that decrease is a direct result of LSC's nationwide initiative to reorganize and consolidate legal services organizations.
However, even if this is true, this does not lead to the conclusion that the competitive bidding mandate has been violated. The regulations only indicate that a "competitive system" will be used to award grants and contracts to applicants. See 45 C.F.R. § 1634.1. Neither the LSC Act nor the regulations mandate a specific number of grants that must be awarded each year, and plaintiff does not contend that they do. Nor does plaintiff allege that LSC has refused to take applications, or is utilizing some other means to prevent county-wide legal services organizations, like BLS, from independently applying directly and competing for LSC funds. In fact, if plaintiff chooses to reject LSNY's reorganization plan, and LSNY does not renew its funding contract with BLS, plaintiff has alleged nothing in its Complaint that would lead to the conclusion that it could not apply directly on its own for LSC funding. Plaintiff simply has not alleged any facts sufficient to state a claim that defendants' actions have violated the competitive bidding requirement.
Plaintiff further argues that LSC's actions are arbitrary and capricious, and not authorized by the "Powers, duties, and limitations" section or by the "Grants and contracts" section of the Act. The "Powers, duties, and limitations" section authorizes LSC to "provide financial assistance to qualified programs furnishing legal assistance to eligible clients, and to make grants to and contracts with" a variety of legal service providers. 42 U.S.C. § 2996e(1)(A). Pursuant to the "Grants and contracts" section, LSC is required to "insure that grants and contracts are made so as to provide the most economical and effective delivery of legal assistance to persons in both urban and rural areas[.]" 42 U.S.C. § 2996f(a)(3).
Plaintiff made this argument for the first time at oral argument. Nonetheless, this Court will address it.
By the plain language of the "Powers, duties, and limitations" section, LSC is not required to give out money to every applicant, rather only those that are "qualified." Further, the "Grants and contracts" section mandates that LSC only give out money in a manner that is economical and that effectively delivers legal assistance. Therefore, the Act necessarily empowers LSC to make a determination, in light of the goals and mandates of the Act, as to what criteria constitutes a successful application, and turn down those applicants that do not meet that criteria. LSC has determined that if LSNY, a grantee legal services organization, wants to continue to receive LSC funds, it must better structure itself so as to more efficiently and effectively meet the needs of the indigent in New York City. In response, LSNY made the determination that city-wide consolidation of sub-grantee legal services organizations, like plaintiff, was the best method of achieving this goal. Although plaintiff may not agree with defendants' determination, it is not arbitrary or capricious. Plaintiff simply has not alleged any facts that, even if taken as true, would lead to the conclusion that defendants' actions violated the LSC Act. Therefore, defendants' motions to dismiss the LSC Act claim are granted.
The Anti-Trust Claims
Plaintiff argues that defendants' actions violate three anti-trust provisions. First, plaintiff argues that defendants actions constitute an unlawful conspiracy in restraint of trade, in violation of § 1 of the Sherman Act. Second, plaintiff argues that defendants violated § 2 of the Sherman Act by conspiring to monopolize the relevant market. Lastly, plaintiff argues that defendants conduct violates the Donnelly Act, New York's antitrust law.
With the exception of the effect on interstate commerce, the Donnelly Act was patterned after the Sherman Act. Therefore, the Donnelly Act is generally interpreted consistently with the Sherman Act. See Empire Volkswagen Inc. v. World-Wide Volkswagen Corp., 814 F.2d 90, 98 n. 4 (2d Cir. 1987); Kramer v. Pollock-Krasner Found., 890 F. Supp. 250, 254 (S.D.N.Y. 1995).
Section 1 of the Sherman Act makes unlawful "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States[.]" 15 U.S.C. § 1 (2002) (emphasis added). Section 2 of the Sherman Act provides that "any person who shall monopolize, or attempt to monopolize, or combine or conspire . . . to monopolize any part of the trade or commerce among the several States . . . shall be deemed guilty of a felony[.]" 15 U.S.C. § 2 (2002) (emphasis added). In both sections of the statute, therefore, the unlawful activity must affect "trade or commerce."
Although the Sherman Act does not define what activity constitutes "trade or commerce," the Supreme Court has noted that the legislative history of the Act reveals that Congress identified restraints and barriers in business competition as the problem the statute was intended to address. See Apex Hosiery Co. v. Leader, 310 U.S. 469, 493 n. 15 (1940) ("`Business competition' was the problem considered and . . . the act was designed to prevent restraints of trade which had a significant effect on such competition.") The Act was intended to prevent "restraints to free competition in business and commercial transactions" because those restraints tend "to restrict production, raise prices or otherwise control the market to the detriment of purchasers or consumers of goods and services." Hamilton Chapter of Alpha Delta Phi v. Hamilton College, 128 F.3d 59, 63 (2d Cir. 1997), quoting Apex Hosiery, 310 U.S. at 493. "Trade or commerce," as used in the Act, therefore, necessarily relates to the business of the exchange of goods in the marketplace. See e.g., Dedication and Everlasting Love to Animals v. Humane Soc'y of the United States. Inc., 50 F.3d 710, 712 (9th Cir. 1995) (hereinafter "D.E.L.T.A.") (noting that the Supreme Court has spoken of the term "commerce" in the Act as relating to the purchase, sale, or exchange of commodities.) Consequently, the "trade" or commerce element of the Act does not apply to all transactions, but rather to those transactions that can be characterized as "business" or "commercial." See e.g., United States v. Brown Univ., 5 F.3d 658, 665 (3d Cir. 1993) (analyzing a § I claim and finding that "[i]t is axiomatic that section one of the Sherman Act regulates only transactions that are commercial in nature.")
Non-profit organizations are not per se entitled to exemption from the Sherman Act. However, when these organizations "perform acts that are the antithesis of commercial activity, they are immune from antitrust regulation." Id. "The legislative history of the Sherman Act reveals that it was not intended to reach noncommercial activities that are intended to promote social causes." Hamilton College, 128 F.3d at 63; see also D.E.L.T.A., 50 F.3d at 713.
A court will examine the nature of the conduct of the non-profit organization and the totality of the circumstances in determining if a transaction is business or commercial, and thus subject to Sherman Act liability. See Brown Univ., 5 F.3d at 666. The exchange of money for services is the hallmark of a commercial transaction. See id. Consequently, in Brown Univ., the Third Circuit found that when a non-profit university offers a student financial aid, the university has engaged in commercial activity, as the student by accepting the financial aid package, must make a complementary payment to the university of the remaining balance of the tuition not covered by financial aid. See id.
In this case, even taking plaintiff's allegations as true, which this Court must on a motion to dismiss, plaintiff still does not allege any facts that could support its anti-trust claims. Defendants' actions, as alleged, are purely non-commercial. There is no exchange of money for services here, or anything else akin to a business or commercial transaction. Although LSC provides federal funds to LSNY, LSC does not receive anything in return from LSNY. Likewise, when LSNY passes those funds down to BLS, LSNY does not receive anything in return from plaintiff for this money. Rather, BLS uses the money to provide free legal services to the indigent population in the Bronx. Rather than a business or commercial exchange, this situation is more akin to a series of charitable gifts from one party to another.
Further, plaintiff has not alleged, and could not possibly allege, that anything about the relationship between the parties or the reorganization plan will cause any of the harms the Sherman Act was intended to prevent, such as restriction of the product (here, legal services), a raise in prices, or other controls on the market that are to the detriment of the consumer (here, the indigent Bronx population). There has been no allegation that, if BLS becomes a wholly-owned subsidiary of LSNY, it will adversely affect the availability of attorneys or that the legal services will no longer remain free to the indigent. In short, LSNY's plan to reorganize the provision of free legal services to the indigent in New York City is not "trade or commerce" within the meaning of the Sherman Act as the plan fits squarely within the type of social causes that are exempt from regulation by the Act. Therefore, defendants' motions to dismiss plaintiff's § I and § 2 Sherman Act claims, as well as plaintiff's Donnelly Act claim are granted.
First Amendment Retaliation Claim
Plaintiff argues that LSNY, as the result of pressure from LSC, instituted its reorganization plan to retaliate against BLS for filing a previous lawsuit against defendants in May 2000. In that lawsuit, brought by both BLS and Queens Legal Services, the plaintiffs there sought injunctive relief preventing defendants from requiring them to disclose the full names of their clients and the nature of the representation on the grounds that such disclosure would violate their ethical and professional responsibilities. Plaintiffs in that suit further sought to enjoin defendants from terminating their LSC funds as the result of their refusal to provide such information.
In an order dated August 8, 2002, this Court granted defendants' motions for summary judgment in that case and dismissed that Complaint in its entirety. See Bronx Legal Servs. v. Legal Servs. Corp., No. 00 CIV. 3423, 2002 WL 1835597 (S.D.N.Y. Aug. 8, 2002).
A plaintiff asserting a First Amendment retaliation claim must put forth non-conclusory allegations: "(1) that the speech or conduct at issue was protected, (2) that the defendant took adverse action against the plaintiff, and (3) that there was a causal connection between the protected speech and the adverse action." Garcia v. S.U.N.Y. Health Sciences Cntr., 280 F.3d 98, 106-07 (2d Cir. 2001); Diesel v. Town of Lewisboro, 232 F.3d 92, 107 (2d Cir. 2000).
With respect to LSC, plaintiff has failed to allege a set of facts sufficient to meet the third element of the test for retaliation, namely a causal connection between plaintiff's filing of the May 2000 lawsuit and LSNY's adoption of the reorganization plan. The Complaint states that as early as 1998, LSC had embarked on a program to coordinate and integrate the provision of legal services on a unified statewide basis throughout the country. In fact, in the summer of 1998, the Complaint alleges that LSC had met with LSNY to discuss LSC's initiative to consolidate legal services in New York City. The Complaint further states that between 1998 and 2001, the number of legal services organizations nationwide receiving LSC funds dropped from 262 to 207. Thus, it is clear from the Complaint that LSC began the consolidation initiative long before BLS had filed the May 2000 lawsuit. It is just as clear that the consolidation initiative is nationwide, rather than an effort to target BLS or Queens Legal Services for bringing the May 2000 lawsuit.
Further, the September 5, 2000 letter from LSC to LSNY that plaintiff relies upon does not add support to plaintiff's argument. That letter, written by an LSC representative, neither mandates nor directs LSNY to consolidate on a city-wide basis. Rather, the letter proposes to LSNY at least four possible options so as to improve the quality of legal services to New York City indigent clients. The proposed options LSC gave to LSNY were: 1) create separate LSC-funded grantee programs; 2) transform LSNY into one city-wide program with offices as opposed to grantee agencies; 3) "make a compelling case" to continue with LSNY's current structure; or 4) develop "something else" to achieve the desired goal. LSC Br., Exh. B. The letter concludes by stating that LSNY must submit a proposal to LSC as to how it plans to restructure itself by March 1, 2001, and that if LSC is not satisfied with that proposal, LSC may choose to find some other mechanism to disperse grant funds in New York City. Id. It is clear that the possible city-wide consolidation discussed in the LSC letter was never in mandatory terms, and that LSC left it to the discretion of LSNY as to how to implement internal changes. Thus, even drawing all reasonable inferences in favor of plaintiff, there is no set of facts alleged in the Complaint which could support plaintiff's claim that LSC "coerced" LSNY into adopting its reorganization plan in order to retaliate against BLS for filing the May 2000 lawsuit.
With respect to LSNY, plaintiff has also failed to allege sufficient facts to establish a causal connection between the May 2000 lawsuit and the alleged retaliatory conduct. As noted above, plaintiff's Complaint alleges that LSC and LSNY began discussing reorganization and consolidation as early as 1998, a full two years before BLS filed the May 2000 lawsuit.
Furthermore, the history of the May 2000 lawsuit is inconsistent with plaintiff's contention that LSNY retaliated against BLS for filing that suit. In early January 2000, as part of an internal audit, LSC's Office of the Inspector General ("OIG") randomly selected thirty grantee organizations and asked them to provide certain information regarding the cases they handled, including client names. LSNY was one of the thirty randomly selected grantee organizations. Since LSNY has no clients, this information would have to come from its seven sub-grantee organizations. LSNY opposed this request as did another grantee organization that had been selected, the Legal Aid Bureau located in Baltimore, Maryland. BLS and Queens Legal Services, as two of LSNY's sub-grantee organizations, also opposed this request. On March 22, 2000, the OIG issued two administrative subpoenas requiring LSNY and the Baltimore Legal Aid Bureau to produce the information. On April 25, 2000, the OIG filed a petition in United States District Court for the District of Columbia for summary enforcement of those subpoenas.
Neither BLS nor Queens Legal Services were served with subpoenas, nor named as respondents in the enforcement proceeding in D.C. District Court.
BLS and Queens Legal Services feared that if LSC terminated LSNY's funding over this issue, they in turn would lose their funding. They then filed the May 2000 suit in this Court against both LSNY and LSC. As noted earlier, BLS and Queens Legal Services requested injunctive relief in that suit preventing defendants from requiring them from disclosing the full names of their clients and the nature of the representation. They also sought an injunction preventing defendants from terminating their LSC funds as a result of their refusal to provide such information. See Bronx Legal Serv. v. Legal Serv. Corp., No. 00 CIV. 3423, 2002 WL 1835597, (S.D.N.Y. Aug. 8, 2002). One month after BLS filed the May 2000 suit, the D.C. District Court ruled on the OIG's petition, finding in favor of the OIG. See United States v. Legal Serv. for New York City, 100 F. Supp.2d 42 (D.D.C. 2000). LSNY appealed to the D.C. Circuit. The district court's decision was affirmed on appeal on May 25, 2001. See United States v. Legal Serv. for New York City, 249 F.3d 1077 (D.C. Cir. 2001).
The Legal Aid Bureau was not a party to the appeal.
The history of the May 2000 lawsuit reveals that, at least until the D.C. Circuit's adverse ruling against LSNY in May 2001, LSNY had taken the same position as BLS on the issues relating to BLS's May 2000 lawsuit. Therefore, when LSNY received the September 5, 2000 letter, and when the LSNY Board of Directors voted in favor of city-wide consolidation in March 2001, LSNY still favored plaintiffs position with respect to the issues BLS raised in the May 2000 lawsuit. In fact, LSNY did not give up its fight against the OIG with regard to the issue of disclosure until the D.C. Circuit ruled against LSNY, a full year after BLS had filed the May 2000 lawsuit. Therefore, the history of the May 2000 lawsuit belies plaintiffs contention that LSNY enacted the reorganization plan so as to retaliate against BLS for filing the May 2000 lawsuit.
See Thompson Aff. ¶ 73, Pl.'s Mot. for a Prelim. Inj.
Plaintiff further contends that the timing of LSNY's announcement in November 2001 of the reorganization plan to consolidate on a city-wide basis is evidence of retaliation against BLS for filing the May 2000 lawsuit. Although this announcement came after the D.C. Circuit's adverse ruling, the LSNY Board of Directors had voted eight months earlier in March 2001 to adopt the consolidation plan. That vote occurred while LSNY was still in active litigation against the OIG. and thus, while LSNY was still litigating in favor of plaintiffs position with regard to the issues raised in plaintiffs May 2000 lawsuit. The timing of the November 2001 announcement, therefore, fails to support plaintiff's argument. Plaintiff simply has not alleged any set of facts in the Complaint which could reasonably lead to a causal connection between plaintiffs filing of the May 2000 lawsuit and LSNY's decision to institute the reorganization plan. Therefore, defendants' motions to dismiss the First Amendment retaliation claim are granted.
The New York Judiciary Act Claim
Plaintiff argues that if it acquiesces to LSNY's reorganization plan, the plan will cause BLS to engage in the unauthorized practice of law, in violation of§ 495(1) of the New York Judiciary Act. The New York Judiciary Act prohibits any corporation from "practic[ing] or appear[ing] as an attorney-at-law for any person in any court in this state or before any judicial body[.]" N.Y. JUDIC[ARY ACT § 495(1) (McKinney 2002). However, § 495(7) of the Act provides an exemption for "organizations which have as their primary purpose the furnishing of legal services to indigent persons." Id. § 495(7). Plaintiff concedes that it, as well as LSNY, currently fall under the Act's exemption. Plaintiff claims, however, that if it is forced to become a wholly-owned subsidiary of LSNY, both BLS and LSNY would lose their exemption status.
Plaintiff's argument fails to state a claim for two reasons. First, § 476-a of the Act states that only the Attorney General or a bar association formed in accordance with New York law are authorized to bring a civil action for unlawful practice of law. See Id. at § 476-a; Lawrence v. Houston, 567 N.Y.S.2d 962, 964 (N.Y.App.Div. 1991). Plaintiff, therefore, does not have standing to bring this cause of action. Second, even if plaintiff did have standing, plaintiff's contention that both BLS and LSNY would lose their exemption status because plaintiff would now be subject to the "corporate control" of LSNY is insufficient to state a claim. Even if BLS becomes a wholly-owned subsidiary of LSNY, the primary purpose of both organizations will remain the same, namely to furnish legal services to indigent persons. Thus the exemption under § 495(7) will still apply. Plaintiff has not alleged any set of facts that would cause BLS or LSNY to fall outside of § 495(7) exemption. Therefore, defendants' motions to dismiss the New York Judiciary Act claim are granted.
The Breach of Fiduciary Duty Claim
Plaintiff contends that LSNY owes BLS a fiduciary duty, and that LSNY and LSC conspired to breach that fiduciary duty. Plaintiff contends that the fiduciary relationship arose because BLS and LSNY are parties to a joint venture.
Parties to a joint venture owe one another a fiduciary duty. See Gover v. Escudo Constr. Corp., 733 N.Y.S.2d 894 (N.Y.App.Div. 2001). In determining if a joint venture exists, a court will consider "the intent of the parties (express or implied), whether there was joint control and management of the company, whether there was a sharing of the profits as well as a sharing of the losses and whether there was a combination of property, skill or knowledge." Mendelson v. Feinman, 531 N.Y.S.2d 326, 328 (N.Y.App.Div. 1988). If the contract does not expressly impose fiduciary duties, plaintiff bears the burden of alleging extraordinary circumstances that create a fiduciary relationship. See Calvin Klein Trademark Trust v. Wachner, 123 F. Supp.2d 731, 733-34 (S.D.N.Y. 2000).
The Complaint fails to allege any facts that would establish a joint venture between BLS and LSNY. The governing 2001 contract between BLS and LSNY explicitly disavows any partnership relationship, stating that "nothing herein shall constitute a partnership between the OLSC and LSNY or any relationship of principal and agent between the OLSC and LSNY." LSNY Br., Exh. B at § 14.9. The contract also provides LSNY with the "authority in its discretion either independently or in consultation with representatives of the OLSC" to institute "program modification and reorganization on a city-wide basis or otherwise[.]" Id. at § 11.1. The contract further states that the contract "constitutes the entire agreement of the parties relating to the subject matter hereof." Id. at § 14.12. The terms of the contract do not create a fiduciary relationship, and plaintiff has not alleged any extraordinary circumstances to overcome the language in the contract. Therefore, defendants' motions to dismiss the breach of fiduciary duty claim are granted as LSNY had no fiduciary relationship with BLS in the first instance.
"OLSC" stands for Operating Legal Services Corporation. This is the term given to the seven legal services organizations in New York City (including BLS) that sub-contracted with LSNY to receive LSC funds.
Plaintiff's breach of fiduciary duty claim against LSC is based upon its allegation that LSC "conspired" with LSNY to breach LSNY's fiduciary duties to plaintiff. However, conspiracy to commit a tort is not in itself a cause of action under New York law. See Alexander Alexander v. Fritzen, 503 N.E.2d 102 (N.Y. 1986). Therefore, the claim against LSC for conspiracy to breach the fiduciary relationship must also fail for this separate and independent reason. For the same reasons, plaintiff's "conspiracy" claim against LSC for tortious interference with business relations must also fail.
The Tortious Interference with Business Relations Claim
Plaintiff argues that LSNY's reorganization plan constitutes tortious interference with plaintiff's business relations, and that LSC conspired with LSNY to implement this plan. Plaintiff contends that by adopting this plan, LSNY intends to appropriate for itself all of plaintiff's funding opportunities and contracts, as well as hire away all of BLS's employees.To prove tortious interference with business relations, a plaintiff must show, inter alia, the existence of a business relationship between the plaintiff and a third party. See Boule v. Hutton, 138 F. Supp.2d 491, 510 (S.D.N.Y. 2001). Plaintiff must allege that the defendant interfered with a specific contract, rather than generally with the plaintiff's business opportunities. See Kramer v. Pollock-Krasner Found., 890 F. Supp. 250, 258 (S.D.N.Y. 1995); see e.g., Lesesne v. Lesesne, 740 N.Y.S.2d 352, 354 (N.Y.App.Div. 2002) (affirming dismissal of tortious interference claim because plaintiff failed to allege breach of a specific contract between the plaintiff and a third party).
In this case, plaintiff has failed to allege that LSNY interfered with a specific contract it had with a third party. Rather, the Complaint only generally alleges that LSNY intends to appropriate for itself all of plaintiff's current funding opportunities and contracts, and hire away all of plaintiff's employees. Such generalized allegations are insufficient as a matter of law to sustain a tortious interference of business relations claim. Therefore, defendants' motions to dismiss the tortious interference with business relations claim are granted.
Conclusion
Defendants' motions to dismiss the Complaint and for judgment on the pleadings are granted in their entirety for the reasons stated above.
Plaintiff's request for leave to amend the Complaint in the event any of its claims are found deficient is denied. Plaintiff has also filed a motion for Preliminary Injunction enjoining LSNY from withholding grant funding from BLS after January 1, 2003. That motion is based solely upon plaintiff's claims for breach of fiduciary duty and tortious interference with business relations. As today's decision disposes of all claims in favor of defendants, plaintiff's motion for a Preliminary Injunction is also denied.