Opinion
16-CV-8953 (GHW) (OTW)
02-07-2019
RICHARD T. MAROTTE, Plaintiff, v. THE CITY OF NEW YORK, et al., Defendants.
REPORT & RECOMMENDATION :
To the Honorable Gregory H. Woods, United States District Judge:
Pro se Plaintiff Richard T. Marotte brought this action, primarily alleging violations of the Telecommunications Act of 1996, 47 U.S.C. § 151 et seq., against Defendants the City of New York, the New York City Department of Information Technology and Telecommunications (DoITT), Telebeam Communications Corp., and CityBridge LLC. Plaintiff worked in the public pay telephone industry from 1986 until 2002, when he left the industry. In 2014, after a public bidding process, the City of New York entered into an agreement with CityBridge LLC, in which CityBridge LLC would build communications hotspots on the City's sidewalks as a replacement for the previously existing pay telephones. These hotspots would provide free wireless Internet and free domestic telephone calls, among other things. Plaintiff, who did not participate in the public bidding process, alleges that the bidding process, the agreement between the City and CityBridge LLC, as well as the City's regulatory scheme relating to telecommunications on the City's sidewalks, all violate the Telecommunications Act of 1996.
Before me for Report and Recommendation are Defendants' motions to dismiss Plaintiff's Amended Complaint in accordance with Fed. R. Civ. P. 12(b)(1), for lack of subject matter jurisdiction, and Fed. R. Civ. P. 12(b)(6), for failure to state a claim upon which relief can be granted (ECF 75, 78, 82) and Plaintiff's Letter Motion for Leave to Amend (ECF 116). For the reasons that follow, I recommend that Defendants' Motions to Dismiss be GRANTED and Plaintiff's Motion for Leave to Amend be DENIED.
I. Background
The following facts are drawn from the Amended Complaint and its exhibits and attachments. (ECF 69). "In assessing the legal sufficiency of [a complaint], [a court] must accept factual allegations in the complaint as true and draw all reasonable inferences in favor of the nonmoving party." Bldg. Indus. Elec. Contractors Ass'n v. City of New York, 678 F.3d 184, 187 (2d Cir. 2012) (citing DiFolco v. MSNBC Cable LLC, 622 F.3d 104, 111 (2d Cir. 2010)). The Court may "consider . . . the complaint and any documents attached thereto or incorporated by reference and 'documents upon which the complaint relies heavily.'" Id. (quoting In re Citigroup ERISA Litig., 662 F.3d 128, 135 (2d Cir. 2011) (internal quotations omitted).
Since 1959, the City of New York has undertaken several regulatory schemes to address public payphones. This lawsuit relates to the City's latest regulatory scheme, including the use of sidewalk telecommunications structures that provide both telephone service and free internet via Wi-Fi hotspots. These structures, known as LinkNYC, are currently operating in the City's five boroughs. In order to best understand Plaintiff's suit, which asserts claims under the Federal Telecommunications Act of 1996 ("TCA"), 47 U.S.C. § 151 et seq., a brief history of the City's payphone regulatory schemes, leading up to the LinkNYC program, is important context.
1. Local Law 78
Before 1985, New York Telephone, then an AT&T subsidiary, was the sole company authorized by the City to install and operate public payphones on the City's public rights-of-way—more commonly referred to as the City's sidewalks. (See Am. Compl. ¶ 19; id. ¶ 1). Local Law 78, which was enacted in 1959, made it illegal to install or maintain a public payphone on the sidewalk without a City license. (Id. ¶ 19). Thus, because only New York Telephone could obtain a City license, they were the only company legally permitted to install and operate public payphones on the sidewalks. (Id.) After 1985, a number of independent payphone providers sought to enter the payphone market and operate on the City's sidewalks, but they were barred entry by Local Law 78. (Id. ¶ 20).
2. Local Law 68
New York State law provides that the City is responsible for the operation and administration of the City's sidewalks, and under the New York City Charter, the sidewalks are part of the "inalienable property" of the City and cannot be sold or leased. See General City Law § 20(7) & (10); New York City Charter § 383.
The New York City Charter was revised in 1989 to require entities wishing to install and maintain payphones on City sidewalks to first obtain a franchise from the City. (Am. Compl. ¶ 19). The New York City Department of Information Technology and Telecommunications ("DoITT") is charged with the responsibility to administer and award City franchises for telecommunication services, including payphones. (See id. ¶ 13).
In September 1995, the City enacted Local Law 68, which went into effect in March 1996. (Id. ¶ 31). Local Law 68 repealed the licensing regime previously established under Local Law 78 and provided that entities wishing to install and maintain payphones on City sidewalks would need to obtain both a franchise from the City and a permit for each payphone. (Id.) In effect, an entity would first have to obtain a franchise, which would permit it to operate on the City's sidewalks and, once it obtained the City franchise, the entity would then apply for a permit for each individual payphone it wished to install. (Id.)
In 1999, under the Local Law 68 licensing regime, more than 100 payphone operators obtained franchises from the City, each issued for an 11-year term. The City retained the right, at its sole discretion, to extend the franchises from an 11-year term to a 15-year term. The City, in 2010, extended these franchises to 15-year terms, with new expirations dates of October 14, 2014. (See Defs.' Mem. of Law at 6, ECF 79).
Plaintiff's prior company, Kayson Communications, Limited, applied for and was granted a franchise in accordance with Local Law 68.
3. The 2014 PCS RFP
As the existing payphone franchises were set to expire on October 14, 2014, the City issued, on April 30, 2014, a "Request for Proposals for a Franchise to Install, Operate, and Maintain Public Communications Structures" (the "2014 PCS RFP") in the City. (See Am. Compl. ¶ 42; see also Friedman Decl. at 1, ECF 85). The 2014 PCS RFP invited "qualified" entities to submit a franchise proposal, with a requirement that, if chosen, the entities would provide Wi-Fi and phone services on a City-approved public connection point. (Am. Compl. ¶¶ 45-48). The 2014 PCS RFP would grant a franchise contract running to June 24, 2026, with an option to extend at the City's discretion. (Friedman Decl. at 3). According to the text of the 2014 PCS RFP, the franchise would have to install, operate, and maintain up to 10,000 public communications structures. (Id. at 4). The structures would have to offer free Wi-Fi but could charge a fee for phone services, except for emergency calls and calls to the City's 311 service. (Id.)
After a competitive bidding process, the City awarded a non-exclusive franchise to Defendant CityBridge LLC ("CityBridge"), a consortium of telecommunications companies. (See Am. Compl. ¶¶ 14, 56; Friedman Decl. ¶ 6 & Ex. 4). Under the terms of the franchise agreement, CityBridge built a network of LinkNYC hotspots across the City, each providing free wireless internet access, free telephone calls to telephone numbers in the United States, access to City services, free cellular phone charging, and digital displays for advertising and public service announcements. (See Friedman Decl. Ex. 4).
4. The Telecommunications Act of 1996 (TCA)
The TCA, passed in 1996, "fundamentally restructure[d] local telephone markets." AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371 (1999). Prior to the TCA, "local phone service was thought to be a natural monopoly" in which states "typically granted an exclusive franchise in each local service area to a local exchange carrier (LEC), which owned, among other things, the local loops (wires connecting telephones to switches), the switches (equipment directing calls to their destinations), and the transport trunks (wires carrying calls between switches) that constitute a local exchange network." Id.
The TCA was designed to "bring competition to local-exchange markets." Verizon Commc'ns Inc, v. FCC, 535 U.S. 467, 539 (2002). The local exchange carriers enjoyed "an almost insurmountable competitive advantage" because newcomers could compete only by "replicating the incumbent's entire existing network." Id. at 490. To level the playing field, the TCA imposes a number of duties on incumbent local exchange carriers "intended to facilitate market entry," including a requirement that incumbents share their network with would-be competitors. See AT&T Corp., 525 U.S. at 371. In addition, the TCA prevents state and local governments from "enforc[ing] laws that impede competition." Id. This objective is served by § 253(a), the provision Plaintiff invokes here. Titled "Removal of barriers to entry," § 253(a) provides that:
No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.
But the TCA also "provides for a number of 'safe harbor' exceptions for states and local governments to establish regulatory requirements." Global Network Commc'ns, Inc. v. City of New York, 562 F.3d 145, 151 (2d Cir. 2009) ("Global Network"). The safe harbor is set forth at § 253(c), which provides that:
Nothing in this section affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government.
47 U.S.C. § 253(c). A regulation that falls within this safe harbor is protected even if it has the effect of prohibiting telecommunications service in contravention of § 253(a). See Global Network, 562 F.3d at 150-51.
Although § 253 was designed to generate competition in local exchange markets, payphones also provide "telecommunications service" as that term is defined by the TCA and used in § 253. See 47 U.S.C. § 153(53). Regulations governing payphones are thus subject to both § 253(a) preclusion and the § 253(c) safe harbor. See Global Network, 562 F.3d at 150-51.
5. Facts Relating to Plaintiff
Plaintiff Richard T. Marotte is a New York resident who owned and operated All Global Tel-Com, Inc., a payphone company operating in New York and New Jersey, from 1986 to 1995. (Am. Compl. ¶ 8.) During this time, the company grew to own and operate over 1,000 public pay telephones ("PPTs"). (Id.) In 1995, All Global Tel-Com was sold to another telecommunications company, and Plaintiff was hired by that company to manage its PPTs. (Id.) One year later, Plaintiff founded another telecommunications company, Advantage Communications, Inc., which grew to own and operate over 500 PPTs. (Id.) In 1999, Plaintiff was a managing partner of Kayson Communications, Limited ("Kayson"). (Id.) Plaintiff helped Kayson file an application for a City PPT franchise, in accordance with Local Law 68, which was granted. (Id.) In 2002, Kayson was sold to Defendant Telebeam Telecommunications Corporation ("Telebeam"), which, prior to the installation of the LinkNYC hotspots, held a franchise to operate PPTs on the City's sidewalks. (Id.)
Plaintiff does not name this company in his Amended Complaint.
After Kayson was sold in 2002, Plaintiff stopped participating in the PPT market. (See id. ¶ 10.) But when the 2014 PCS RFP was announced, Plaintiff alleges that he "spent considerable time and resources" studying it to "determine whether it would have been possible to submit a competitive bid." (Id.) After study, Plaintiff determined that "such a submission would be futile," because he could not make the minimum guarantee of annual compensation to the City, as required under the 2014 PCS RFP. (Id. ¶¶ 2, 10.) The 2014 PCS RFP suggested that the proposed minimum guarantee of annual compensation to the City should be $20 million and that it could not be less than $17.5 million. (Friedman Decl. Ex. 3 at 22). Instead of submitting a proposal, Plaintiff alleges that he has taken other steps to re-enter the PPT market, including putting together a business plan, approaching prospective investors and partners, and securing a payphone location in a "distribution center in Queens." (Id.)
B. Plaintiff's Claims
Plaintiff's Amended Complaint brings eight claims against the various Defendants, most of which substantially overlap, and each of which will be specifically discussed below. But more generally, viewing Plaintiff's claims in the most favorable light, he alleges that the City and the DoITT violated the TCA because the 2014 PCS RFP, the franchise awarded to CityBridge, and the City's overall regulatory scheme all prevented him from receiving a franchise to provide PPT services on the City's sidewalks and, thus, make him unable to receive a permit for any PPT he wants to install. (Am Compl. ¶¶ 64-84). Plaintiff also claims that the corporate Defendants, CityBridge and Telebeam, also violated the TCA. First, he alleges that CityBridge violated the TCA because the City granted it an allegedly "exclusive" franchise to install and operate PPTs on the City's sidewalks. (Id. ¶¶ 85-100). Second, Plaintiff alleges that Telebeam violated the TCA because the City did not allow him to apply for permits for PPTs in locations on the City's sidewalks where Telebeam previously operated PPTs. (Id. ¶¶ 101-107).
"It is well settled in the Second Circuit that, as an agency of the City, DoITT may only sue and be sued in the name of the City of New York." The New Phone Co. Inc. v. DoITT, 3-CV-3978, 2006 WL 6908254, at *7 (E.D.N.Y. August 25, 2006) (Matsumoto, J.). Accordingly, I recommend that DoITT be dismissed from this action.
Plaintiff's formal allegations are that: (1) the City's award of the PPT franchise to Defendant CityBridge violates § 253 of the TCA because Plaintiff cannot provide PPT services on the City's sidewalks; (2) the City's bidding process under the 2014 PCS RFP violates the TCA because the City is impermissibly interfering in Plaintiff's ability to provide PPT services on the City's sidewalks; (3) parts of the City Charter and various authorizing resolutions passed by the City Council are preempted by the TCA; (4) the franchise agreement between the City and CityBridge is neither competitively neutral nor non-discriminatory, in violation of the TCA; (5) the franchise agreement creates a monopoly for PPT services on the sidewalks, prohibiting Plaintiff from providing those services on the sidewalks; (6) the franchise agreement and the 2014 PCS RFP deny Plaintiff the ability to compete on an equal footing with other PPT providers, in violation of § 276 of the TCA; (7) Defendants Telebeam Communications Corp. and the City conspired to deprive Plaintiff of the right to access a competitively neutral and non-discriminatory telecommunications market, in violation of § 253 of the TCA; and (8) the compensation provisions in the franchise agreement violate § 23-406 of the New York City Administrative Code, which limits the amount of a permit fee to the cost of administration, and, regardless of the fee, the City is barred from even inspecting PPTs for operability because the New York State Public Service Commission has the sole authority to do so. (Id. ¶¶ 64-123).
The crux of Plaintiff's alleged injury is that, because of the 2014 PCS RFP and the award of the franchise to CityBridge, he is unable to install PPTs on the City sidewalks. On this basis, Plaintiff seeks declaratory and injunctive relief annulling the CityBridge franchise and preventing the City from taking any further actions until new authorizing resolutions are adopted and new franchises "compliant" with the TCA are issued.
Plaintiff also alleges that Defendant Telebeam "conspired" with the City to maintain its franchise agreement after its franchise expired. (Am. Compl. ¶ 112-113). It is unclear from the Amended Complaint how Telebeam's franchise agreement caused any injury to Plaintiff.
Plaintiff does not identify how the allegedly compliant resolutions or franchises he seeks would differ from those already in place.
II. Discussion
A. Pro Se Complaints
As an initial matter, a "pro se complaint . . . [is] interpret [ed] . . . to raise the 'strongest [claims] that [it] suggest[s].'"Hill v. Curcione, 657 F.3d 116, 122 (2d Cir. 2011) (quoting Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (per curiam)); see Weixel v. Bd. of Educ. of New York, 287 F.3d 138, 145-46 (2d Cir. 2002) ("When considering motions to dismiss a pro se complaint such as this, 'courts must construe [the complaint] broadly . . . '" (quoting Cruz v. Gomez, 202 F.3d 593, 597 (2d Cir. 2000))). "However, although pro se filings are read liberally and must be interpreted 'to raise the strongest arguments that they suggest,' a pro se complaint must still 'plead sufficient facts to state a claim to relief that is plausible on its face.'" Wilder v. U.S. Dep't of Veterans Affairs, 175 F. Supp. 3d 82, 87 (S.D.N.Y. 2016) (internal citations omitted). Moreover, "the court need not accept as true 'conclusions of law or unwarranted deductions of fact,'" Whitfield v. O'Connell, 9-CV-1925 (WHP), 2010 WL 1010060, at *4 (S.D.N.Y. Mar. 18, 2010) (quoting First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 771 (2d Cir. 1994)), and "'[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice,'" even for purposes of a pro se complaint. Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009))).
B. The Rule 12(b)(1) Motion
Moving in accordance with Fed. R. Civ. P. 12(b)(1), Defendants argue that because Plaintiff has not alleged the requisite elements for standing, this Court lacks subject matter jurisdiction over his claims. (Defs.' Mem. of Law at 10). I agree.
1. Subject Matter Jurisdiction
Subject matter jurisdiction "refers to a tribunal's power to hear a case," Morrison v. Nat'l Austl. Bank Ltd., 561 U.S. 247, 254 (2010) (internal quotations and citations omitted), and "represents 'the extent to which a court can rule on the conduct of persons or the status of things.'" Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 639 (2009) (quoting Black's Law Dictionary 870 (8th ed. 2004)). The requirement of subject matter jurisdiction "can never be forfeited or waived," Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006) (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)), and may be raised "at any time." Cave v. E. Meadow Union Free Sch. Dist., 514 F.3d 240, 250 (2d Cir. 2008) (citing Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 740 (1976)); see also Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action."). "A court properly dismisses an action under Rule 12(b)(1) if the court 'lacks the statutory or constitutional power to adjudicate it.'" Scroggins v. Scroggins, 15-CV-9524, 2017 WL 1047356, at *3 (S.D.N.Y. Mar. 16, 2017) (Engelmayer, J.) (quoting Cortlandt St. Recovery Corp. v. Hallas Telecomms. S.A.R.L., 790 F.3d 411, 416-17 (2d Cir. 2015)).
2. Legal Standard
The standard used to decide a Rule 12(b)(1) motion depends upon the context in which it is made. If the motion is based upon the factual allegations contained in the complaint, the court must accept those allegations as true and draw all reasonable inferences in the plaintiff's favor. See, e.g., Rajamin v. Deutsche Bank Nat'l Tr. Co., 757 F.3d 79, 81 (2d Cir. 2014); Liranzo v. United States, 690 F.3d 78, 84 (2d Cir. 2012); Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998); Chen-Oster v. Goldman, Sachs & Co., 251 F. Supp. 3d 579, 585-86 (S.D.N.Y. Apr. 12, 2017). To survive such a motion, plaintiff need only "allege facts that affirmatively and plausibly suggest" that the court has subject matter jurisdiction over the claims in question. Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011).
However, "[w]here jurisdictional facts are placed in dispute, the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits." APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003) (quoting LeBlanc v. Cleveland, 198 F.3d 353, 356 (2d Cir.1999)); Chen-Oster, 251 F. Supp. 3d at 586. If an affidavit "'reveal[s] the existence of factual problems' in the assertion of jurisdiction," the plaintiff "will have to come forward with evidence of [his] own to controvert that presented by the defendant[s]." Carter v. Healthport Techs, Inc., 822 F.3d 47, 57 (2d Cir. 2016) (quoting Exchange Nat'l Bank of Chic. v. Touche Ross & Co., 544 F.2d 1126, 1131 (2d Cir. 1976)). Where factual issues have been placed into contention by defendants' evidence, "[t]he plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence." Liranzo v. Unied States, 690 F.3d 78, 84 (2d Cir. 2002) (quoting Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005)); see also Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) ("A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.").
3. Standing
Article III of the Constitution limits the scope of federal jurisdiction to "cases or controversies" brought by persons or entities with the demonstrated standing to sue. U.S. Const. art. III, § 2. "Over the years, our cases have established that the irreducible constitutional minimum of standing contains three elements." Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). "The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), as revised (May 24, 2016) (citing Lujan, 504 U.S. at 560-61, and Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000)). "The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements." Spokeo, 136 S. Ct. at 1547; see also Carter, 822 F.3d at 55.
a) Injury in Fact
Injury in fact is the "'[f]irst and foremost' of standing's three elements." Spokeo, 136 S. Ct. at 1547 (quoting Steel Co. v. Citizens for Better Env't, 523 U.S. 83, 103 (1998)); see also Summers v. Earth Island Inst., 555 U.S. 488, 497 (2009) ("[T]he requirement of injury in fact is a hard floor of Article III jurisdiction that cannot be removed by statute."). "To establish injury in fact, a plaintiff must show that he or she suffered 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural or hypothetical.'" Spokeo, 136 S. Ct. at 1548 (quoting Lujan, 504 U.S. at 560). A "concrete" injury "must be 'de facto'; that is, it must actually exist." Spokeo, 136 S. Ct. at 1548; see also Warth v. Seldin, 422 U.S. 490, 501 (1975) (to establish constitutional standing, each plaintiff must allege "a distinct and palpable injury to himself"). Thus, in Spokeo—brought under the Fair Credit Reporting Act after defendant's "people search engine" returned inaccurate information about plaintiff—the Court remanded for a determination of whether those inaccuracies actually injured plaintiff in a concrete way, meaning "'real,' and not 'abstract.'" Spokeo, 136 S. Ct. at 1548 (citing Webster's Third New International Dictionary 472 (1971) and Random House Dictionary of the English Language 305 (1967)). The statutory violation alone (presumed for purposes of the standing analysis) did not establish the necessary "concrete injury" to the plaintiff. Id. at 1549 ("Article III standing requires a concrete injury even in the context of a statutory violation"). See also Summers, 555 U.S. at 496 ("deprivation of a procedural right without some concrete interest that is affected by the deprivation . . . is insufficient to create Article III standing"); Schaffer v. Clinton, 240 F.3d 878, 884-85 (10th Cir. 2001) (Congressman suffered no "palpable" injury in fact as a result of congressional cost-of-living allowances alleged to violate the Twenty-Seventh Amendment, and thus lacked standing to sue, where the challenged COLAs increased his pay and where his allegations of reputational injury were both vague and implausible in light of his recent re-election to office).
In this case, Defendants argue that Plaintiff has suffered no injury in fact because: (1) Plaintiff's claimed injury is based only on "conjecture and speculation" that he might provide telecommunications services on City sidewalks at some point the future; (2) Plaintiff, as an individual, was never an "active telecommunications provider," rather, he alleges that he worked for telecommunications providers; (3) Plaintiff never bid for the 2014 PCS RFP that he is challenging; and (4) Plaintiff never submitted to the challenged framework. (Defs.' Mem. of Law at 13-14). Plaintiff argues that his standing derives from his "history in the payphone business," which, he alleges, makes him a "potential [telecommunications] competitor" with standing to challenge the 2014 PCS RFP, the validity of the franchise agreement, and the City's overall regulatory scheme relating to PPTs. (Pl.'s Mem of Law. at 5, ECF 106).
Although Plaintiff does allege that he has a long history working in the payphone business and further alleges that he has "secured" a payphone location on private property at a distribution center in Queens, (Am. Compl. ¶¶ 3, 10), he fails to meet his burden of demonstrating an injury in fact sufficient to give him standing. First, even while interpreting Plaintiff's Amended Complaint to raise the strongest claims it suggests, Plaintiff has not alleged any facts to establish that he has been injured in any concrete and particularized way by the 2014 PCS RFP and the subsequent franchise agreement. Despite choosing not to submit an application in response to the 2014 PCS RFP, Plaintiff avers that he "has every intention of re-entering the [f]ranchised [t]elecommunications market on the City's [sidewalks]," (id. ¶ 63), but this conclusory allegation of Plaintiff's future intent is unsupported by any other facts besides Plaintiff's allegation that he has secured one payphone location on private property. (Id. ¶ 10). The injury must be real, not abstract; it must actually exist. Spokeo, 136 S. Ct. at 1548. Here, Plaintiff has not shown any injury beyond an inability to, some day in the future, install PPTs on the City's sidewalks under the current regulatory scheme—an abstract, hypothetical injury that is not particularized to him. At best, Plaintiff's allegations concerning his prior experience in the telecommunications industry, coupled with the allegations that CityBridge and Telebeam operate PPTs on New York City sidewalks while he does not, could suggest that he is complaining of a competitive injury. But a possible competitive injury is not sufficient, without "set[ting] forth specific facts which show this injury." Warren v. Pataki, 01-CV-0004E, 2002 WL 450056, at *2 (W.D.N.Y. Jan. 9, 2002) (plaintiff owner of tobacco store that was "in competition with such stores on Indian reservations" lacked standing to challenge such stores' tax exempt status without specific allegations of actual economic injury, such as decline in sales after competing stores obtained more favorable tax exempt status).
Second, Plaintiff does not allege how the franchise agreement between the City and CityBridge actually injures him. Plaintiff's allegations that he intends to re-enter the telecommunications market are the type of "'some day' intentions—without any description of concrete plans, or indeed even any specification of when the some day will be" that "do not support a finding of the 'actual or imminent' injury" that is required to have standing. Lujan, 504 U.S. at 564.
Third, Plaintiff's failure to submit to the administrative policy and framework he challenges here—the City's process for awarding franchise to telecommunications providers—further illustrates his lack of standing. In the Second Circuit, a plaintiff must submit to the challenged framework or make a "substantial showing that the application for the benefit . . . would have been futile" to meet the threshold requirement for standing. Jackson-Bey v. Hanslmaier, 115 F.3d 1091, 1096 (2d Cir. 1997); see, e.g., Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 365-66 (1977) (non-white persons deterred from applying for employment where employer has clearly established "Whites Only" policy have standing); Sammon v. New Jersey Bd. of Med. Exam'rs, 66 F.3d 639, 643 (3d Cir. 1995) (midwives have standing to challenge state's 1800 hour training prerequisite for midwife certification without going through training exercise itself). By Plaintiff's own admission, he never submitted a proposal in response to the 2014 PCS RFP. (See Am. Compl. ¶ 2). Instead, he argues that because he could not individually guarantee the minimum compensation payment to the City, it would have been futile to submit a proposal. (Id.) But this does not rise to the level of a "substantial showing" of futility as required. Plaintiff could have, as the 2014 PCS RFP encouraged, formed a partnership or joint venture to submit a proposal and operate a franchise. (See Friedman Decl. Ex. 3 at 13). Instead, Plaintiff simply determined on his own that because he could not personally make the $20 million per year minimum compensation payment on his own, a response to the 2014 PCS RFP would be futile. This is in stark contrast to the usual futility arguments, such as in Sammon, where aspiring midwives were not required to go through 1800 hours of instruction in order to challenge a licensing scheme, as requiring those plaintiffs to seek a license without going through the mandatory training "would serve no purpose." Sammon, 66 F.3d at 643. Here, Plaintiff could have responded to the 2014 PCS RFP, even if he applied as an individual, even though he would have likely been rejected for failure to meet the minimum standards. By submitting a proposal, Plaintiff would have submitted himself to the to the administrative policy and framework he challenges, giving him a firmer standing argument.
By Plaintiff's definition, anyone who had considered whether to submit a bid pursuant to the 2014 PCS FRP—and decided not to—would have standing to sue.
In response to Defendants' arguments, Plaintiff relies on NextG Networks of NY, Inc. v. City of New York, 513 F.3d 49 (2d Cir. 2008) ("NextG") to support the proposition that he has standing to challenge the City's regulatory scheme. (Pl.'s Mem. of Law at 5). In NextG, plaintiff NextG Networks of NY, Inc., a wholesale provider of telecommunications services, challenged the City of New York's refusal to grant it a franchise to install wireless communications devices on City-owned utility and streetlight poles. NextG, 513 F.3d at 50. But the NextG decision is not applicable here, for two reasons. First, the NextG plaintiff applied for the benefit and was denied a franchise from the City, giving the plaintiff an actual injury which it sought to remedy. NextG, 513 F.3d at 50. Second, because the NextG plaintiff had an actual injury, the court did not need to address whether plaintiff had standing to bring its claims. See NextG, 513 F.3d at 50.
Because Plaintiff has not shown a concrete and particularized injury beyond speculative, abstract injuries, and because he did not submit to the challenged regulatory scheme, Plaintiff has not shown a "presently demonstrable injury in fact directly traceable to the [Defendants'] supposedly unlawful actions." Albuquerque Indian Rights v. Lujan, 930 F.2d 49, 54 (D.C. Cir. 1991).
b) Redressability
To satisfy the redressability prong of Article III standing, a plaintiff must demonstrate that he or she would "personally would benefit in a tangible way from the court's intervention." Warth, 422 U.S. at 508. "[I]t must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Lujan, 504 U.S. at 561. (internal quotations omitted). A plaintiff "need not demonstrate with certainty that her injury will be cured by a favorable decision, but she must at least make a showing that there is a 'substantial likelihood that the relief request will redress the injury claimed.'" E.M. v. N.Y.C. Dep't of Educ., 758 F.3d 442, 450 (2d Cir. 2014) (quoting Duke Power Co. v. Carolina Envtl. Study Grp., Inc., 438 U.S. 59, 75 n.20 (1978)).
Even if Plaintiff could establish an injury due to CityBridge's and Telebeam's operation of PPTs on City sidewalks, he has not established that such an injury would be redressed by a favorable decision. Except for the single payphone location on private property, Plaintiff has not alleged any other activity in the telecommunications industry since he left Kayson in 2002. (Am. Compl. ¶ 8). Thus, even if the City were to adopt a new regulatory scheme as Plaintiff seeks, Plaintiff would not receive any actual benefit, as the provisions of the regulatory scheme he challenges affect only entities operating under a franchise agreement, which he does not have, and for which he has never applied. See Global Network 562 F.3d at 152 ("The provisions noted by [plaintiff] affect only entities operating under a license, and [plaintiff], which had no license to operate, was not affected by them . . . [i]t therefore lacked standing to challenge them."). Further, Plaintiff has not alleged that he has an existing stock of payphones or the technical ability to install and operate payphones on the City's sidewalks. For these reasons, Plaintiff cannot meet the redressability prong of Article III standing.
C. The Rule 12(b)(6) Motion
1. Legal Standard
When presented with a motion to dismiss pursuant to Rule 12(b)(6), the court must accept as true all non-conclusory factual allegations in the plaintiff's complaint, together with the contents of any documents "integral" to the complaint and any matters of which the Court may take judicial notice, and draw all reasonable inferences in favor of the plaintiff. See Doe v. Columbia Univ., 831 F.3d 46, 48 (2d Cir. 2016); McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). However, "a pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 556 U.S. at 678 (internal citations omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007)). The courts must not "unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Iqbal, 556 U.S. at 678-79.
To survive a motion to dismiss made under Rule 12(b)(6), the complaint must contain "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). 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." Iqbal, 556 U.S. at 678. Thus, the non-conclusory factual allegations "must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. If the plaintiff has not "nudged his claims across the line from conceivable to plausible, [the] complaint must be dismissed." Id. at 570.
2. Plaintiff's Claims
Plaintiff's eight claims against the Defendants, when read liberally and interpreted to raise the strongest arguments they suggest, allege that the City violated the TCA because he is not able to receive a franchise or a permit from the City to install PPTs on the City sidewalks. He seems to allege that CityBridge and Telebeam also violated the TCA. His allegation is that CityBridge violated the TCA because they are permitted to install and operate PPTs on the sidewalk, and that Telebeam violated the TCA because it was allegedly permitted to maintain PPTs on the sidewalks once its franchise expired. Plaintiff's core claim against the two corporate Defendants is that because they are permitted to operate PPTs and he is not, they have somehow violated the TCA.
a) Plaintiff's Section 253 Claims
Plaintiff's first five claims are based on the preemptive effects of § 253(a) of the TCA. In these claims, Plaintiff claims that the City's grant of a franchise to CityBridge violates § 253(a), and he seeks declaratory and injunctive relief including, inter alia, a declaration that the franchise agreement is null and void, and that the Defendants be enjoined from taking any further action under the franchise agreement. (Am. Compl. ¶¶ 64-100). To show a violation of § 253(a) of the TCA, Plaintiff must allege that the 2014 PCS RFP, the franchise agreement, or the City's regulations "materially inhibit[] or limit[] the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment." TCG New York, Inc. v. City of White Plains, 305 F.3d 67, 76 (2d Cir. 2002). But, as discussed above, the TCA has a "safe harbor" provision for local government's management of its rights of way, § 253(c). The Second Circuit has directly addressed § 253(c), as applied to the challenged regulatory scheme at issue here, in New Phone Co. v. DoITT, 355 F. App'x 503 (2d Cir. 2009) and Global Network Communications, Inc. v. City of New York, 562 F.3d 145 (2d Cir. 2009).
As the Honorable Nina Gershon explained in Telebeam Telecommunications Corp. v. City of New York, 194 F. Supp. 3d 178, 188 (E.D.N.Y. July 11, 2016) ("Telebeam"), "[t]he principle to be drawn from the Second Circuit's decisions is thus plain enough: regulations governing telecommunications services on public rights of way are protected by § 253(c) so long as they do not also apply to private property, either directly or by impeding the development of broader networks that need to pass through the rights of way to compete." In Telebeam, the plaintiff brought the exact same § 253 claims against the City that Plaintiff brings here. The heart of the Telebeam complaint was that the City, by granting the franchise to CityBridge, prevented plaintiff Telebeam from continuing to provide telecommunications services on the City's sidewalks in violation of § 253 and, separately, that the City's enforcement of a provision in Telebeam's franchise agreement that required it to sell its payphones to a City designee—CityBridge—also violated § 253. Telebeam, 194 F. Supp. 3d at 179, 182. In Telebeam, the plaintiff was challenging the same 2014 PCS RFP, the same grant of the franchise to CityBridge, and the City's overall regulatory framework, just as Plaintiff challenges here. Id. at 182. Plaintiff apparently suggests that he is in the same position as Telebeam was before Judge Gershon: that the City's grant of a franchise to CityBridge prevents Plaintiff from providing PPT service on City sidewalks. Because the Telebeam plaintiff challenged the City's prohibition on its ability to provide PPT service on the City's sidewalks, as Plaintiff does here, the court determined that the City was protected by the § 253(c) safe harbor provision, and thus it could not violate § 253(a). Id. at 188. For the same reasons that Judge Gershon held in Telebeam, Plaintiff's § 253 claims fail as a matter of law: because the regulatory scheme Plaintiff challenges is insulated by the § 253(c) safe harbor provision. See Telebeam, 194 F. Supp. 3d at 190.
Besides additional allegations that are personal to Plaintiff, and the addition of two new claims, Plaintiff's Amended Complaint is virtually identical to the First Amended Complaint filed in Telebeam. (See Friedman Decl. ¶ 5 & Ex. 2).
Plaintiff's fourth and fifth claims, brought under § 253(a), are against all Defendants, including Telebeam and CityBridge. (Am. Compl. ¶¶ 85-100). These claims, seeking declaratory and injunctive relief, are not properly brought against the two corporate Defendants. Section 253(a) provides for preemption of the City's regulatory scheme, including the franchise agreement between the City and CityBridge, which is a product of the regulatory scheme. But § 253(a) does not grant Plaintiff a private right of action against CityBridge for entering into the agreement with the City, or against Telebeam for previously operating PPTs on the sidewalk, and these claims against the corporate Defendants should also be dismissed on that basis. See Telebeam, 194 F. Supp. 3d at 186.
b) Plaintiff's Section 276 Claim
Plaintiff's sixth claim is that the franchise agreement and the 2014 PCS RFP deny him the ability to compete on an equal footing with other PPT providers, in violation of § 276 of the TCA. To show a violation of § 276(c) of the TCA, Plaintiff must allege that the 2014 PCS RFP, the franchise agreement, or the City's regulations are inconsistent with a regulation issued by the FCC. 47 U.S.C. § 276(c). Specifically, Plaintiff claims that a September 20, 1996 Report and Order issued by the FCC, which prohibits states from enacting regulations which "have the effect of placing barriers and/or obstacles to competition in the payphone industry," preempts the City's regulatory scheme. (Am. Compl. ¶ 104); see Report and Order on Reconsideration in CC Docket No. 96-128, 11 F.C.C.R. 21233.
This claim is vague and conclusory. Plaintiff does not allege any facts showing that he was not given an "equal opportunity to compete" for the 2014 PCS RFP. 47 C.F.R. § 64.1330(a). As previously discussed, he never submitted a proposal in response to the 2014 PCS RFP, having determined that he likely would have been denied. (See Am. Compl. ¶ 2). Plaintiff's alleged inability to meet certain requirements of the 2014 PCS RFP, like the $20 million minimum compensation requirement, does not "reflect the type of 'regulatory barriers to entry and exit' contemplated by the FCC regulation." Global Network Comms., Inc. v. City of New York, 507 F. Supp. 2d 365, 374 (S.D.N.Y. Aug. 30, 2007) (Stanton, J.). The types of "regulatory barriers to entry and exit" that are contemplated by the FCC regulation include "government regulation of prices" for telephone services or the prohibition of payphone services on private property, neither of which are at issue in this case. See id.
For these reasons, Plaintiff's § 276 claim fails as a matter of law.
Plaintiff's § 276 claim is brought against all Defendants. (Am. Compl. ¶¶ 101-107). For the same reasons discussed above, see supra n.9, the preemptive effect of § 276 does not apply to CityBridge or Telebeam, and this claim against the corporate Defendants should also be dismissed on that basis.
c) Plaintiff's Conspiracy Claim
Plaintiff's seventh claim is that Defendant Telebeam "effectively conspired with the City Defendants to deprive Plaintiff of the right to access a competitively neutral and non-discriminatory telecommunications market, in violation of 47 U.S.C. §§ 253 and 276." (Am. Compl. ¶ 113). Reading the allegation to raise the strongest claims it suggests, it appears that Plaintiff is alleging civil conspiracy under New York law, based on an underlying fraud, invoking this Court's supplemental jurisdiction in accordance with 28 U.S.C. § 1367. (See id. ¶ 109 ("Telebeam benefited from favoritism by [the City] in myriad ways, including by being advised that permit applications would be accepted prior to § 6-32 becoming effective, and that, contrary to that Rule, the permit fee would not be required to accompany the application.")).
New York does not recognize an independent tort of conspiracy, see Kirch v. Liberty Media Corp., 449 F.3d 388, 401 (2d Cir. 2006), but does allow a claim for civil conspiracy to "connect the actions of separate defendants with an otherwise actionable tort." Alexander & Alexander of N.Y., Inc. v. Fritzen, 68 N.Y.2d 968, 969, 510 N.Y.S.2d 546, 503 N.E.2d 102 (1986). Thus, "a claim for civil conspiracy may stand only if it is connected to a separate underlying tort." Treppel v. Biovail Corp., No. 03 CIV. 3002 (PKL), 2005 WL 2086339, at *5 (S.D.N.Y. Aug. 30, 2005). Once that threshold showing has been made, the plaintiff must establish four additional elements: "(1) an agreement between two or more parties; (2) an overt act in furtherance of the agreement; (3) the parties' intentional participation in the furtherance of a plan or purpose; and (4) resulting damage or injury." Id.
Even interpreting Plaintiff's Amended Complaint to raise the strongest claims it suggests, it is difficult for the Court to determine what underlying tort Plaintiff alleges. This is because Plaintiff does not plead any specific facts to establish a conspiracy between the City and Telebeam beyond conclusory allegations that a conspiracy existed. (Am. Compl. ¶¶ 108-117). Plaintiff pleaded no acts taken by the City or Telebeam; he only pleads that Telebeam "took advantage" of the ongoing changes to the City's regulatory scheme, perhaps by it submitting a permit application earlier than permitted, or by failing to pay a permit application fee. (Id. ¶¶ 109-117).
The underlying tort Plaintiff alleges is most plausibly construed as fraud. To establish common law fraud under New York law, a plaintiff must show that "(1) the defendant made a material false representation, (2) the defendant intended to defraud the plaintiff thereby, (3) the plaintiff reasonably relied upon the representation, and (4) the plaintiff suffered damage as a result of such reliance." Banque Arabe et Internationale D'Investissement v. Md. Nat'l Bank, 57 F.3d 146, 153 (2d Cir. 1995). Under Federal Rule of Civil Procedure 9(b), a plaintiff asserting a claim sounding in fraud must plead the circumstances constituting fraud "with particularity," Fed. R. Civ. P. 9(b) The complaint must therefore "(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir. 2006) (citation omitted). Plaintiff fails to plausibly allege fraud, and his allegations fall well short of satisfying Rule 9(b)'s heightened pleading requirement. Plaintiff makes vague assertions regarding a conspiracy, but he has not pleaded any alleged acts taken by Defendants or statements made by Defendants, nor has Plaintiff pleaded how any of these acts prevented him from bidding for the 2014 PCS RFP or installing PPTs on the City's sidewalks. He has not, with the specificity required by Rule 9(b), identified an agreement between the City and Telebeam, pleaded intentional participation in the furtherance of a plan, and, again—has not shown any resulting damage or injury to him. In the alternative, the underlying tort Plaintiff may be alleging may be tortious interference with prospective economic advantage. To establish tortious interference with prospective economic advantage under New York Law, a plaintiff must establish that "(1) that [he] had a business relationship with a third party; (2) the defendant knew of that relationship and intentionally interfered with it; (3) the defendant acted solely out of malice, or used dishonest, unfair, or improper means; and (4) the defendant's interference caused injury to the relationship." Friedman v. Coldwater Creek, Inc., 321 F. App'x 58, 60 (2d Cir. 2009). But Plaintiff has not pleaded any facts to support any elements of this underlying tort: he does not plead that he had a business relationship with either the City or Telebeam, and thus does not plead any interference with his non-existent business relationship. Thus, a civil conspiracy claim based on tortious interference with prospective economic advantage would also fail as a matter of law.
As discussed at length previously, Plaintiff has identified no injury or damage resulting from any agreement between Telebeam and the City. Even if, for example, Telebeam was granted "special treatment" by being permitted to submit a permit application early or without a permit application fee, Plaintiff has not tied these allegations either to an underlying tort or to an injury. Because Plaintiff fails to plead any non-conclusory allegations regarding the alleged conspiracy, it fails as a matter of law. See Twombly, 550 U.S. at 570.
d) Plaintiff's Remaining Claims
Plaintiff's eighth claim contains two allegations: (1) that the compensation provisions of the CityBridge franchise agreement violate § 23-406 of the New York City Administrative Code, which limits the amount of a permit fee to the cost of administration and inspections, and (2) that the City is barred from inspecting public pay telephones for operability because the New York State Public Service Commission has the sole authority to take such action. (Am. Compl. ¶¶ 118-23). Although Plaintiff's allegations are unclear, interpreting them to raise the strongest arguments they suggest, it seems that Plaintiff argues that (1) the franchise fee paid by CityBridge to the City violates the limit on the cost of permit fees; and (2) the Administrative Code, which permits the City to charge a permit fee sufficient to compensate the City for the expense of inspections of PPTs, is preempted because allegedly only the New York State Public Service Commission can inspect a PPT. Both allegations, which invoke this Court's supplemental jurisdiction in accordance with 28 U.S.C. § 1367, are misplaced.
Section 23-406 of the New York City Administrative Code limits the amount of a PPT permit fee to the cost of administration and expense of inspections; that is, the City cannot charge more for a permit than the expense of issuing or renewing the permit or inspecting the PPT. Notwithstanding the fact that Plaintiff has no standing to assert a violation of the New York City Administrative Code, he has not alleged how the franchise agreement between the City and CityBridge violates the code.
Under the New York City Charter § 383, the City's streets are "inalienable" and may not be occupied by private property without the City's permission. Section 363(a)(3) of the New York City Charter permits the City to grant a "franchise" to use the City's streets as long as the franchise provides adequate compensation to the City. Thus, the City is permitted to collect a franchise fee separate from a permit fee. Further, the franchise agreement specifically delineates the difference between permit fees and other forms of compensation. (See Friedman Decl. Ex. 4 at 35 ("The Franchisee shall pay to the City a Franchise Fee . . . [i]f within any Contract Year Franchisee makes payment to DoITT to satisfy any permitting fee relating to the installation of a Structure, such payment will be credited as payment towards the Minimum Annual Guarantee.")).
Based on the plain language of the franchise agreement and the relevant local regulations, Plaintiff has not alleged how the agreement would violate § 23-406 of the New York City Administrative Code. Thus that allegation would fail as a matter of law, even if Plaintiff had standing to bring such a claim.
Section 94 of the New York Public Service Law provides that the New York Public Service Commission is responsible for "general supervision of all . . . telephone corporations and telegraph lines and telephone lines within its jurisdiction . . . and shall have power to and shall examine the same and keep informed as to their general condition, their capitalization, their franchises and the manner in which their lines and property are . . . operated or managed[.]" Id. at § 94(2). But "[t]here is no suggestion in the case law or the legislative history that the 'general' supervisory authority bestowed on the PSC was in any way meant to preempt or supersede the rights of local municipalities with respect to the use of their rights-of-way." TC Sys., Inc. v. Town of Colonie, 263 F. Supp. 2d 471, 492 (N.D.N.Y. 2003). Again, Plaintiff has no standing to assert a violation of the New York Public Service Law, but even if he did, he has not alleged how the franchise agreement or the City's regulatory scheme violates the law. Nothing in the New York Public Service Law prohibits or prevents the City from inspecting the PPTs operating on its own sidewalks. Plaintiff's assertion that the City is barred by law from ensuring the operability, safety, and reliability of the PPTs—on its own sidewalks—has no basis in the statutory language or controlling case law.
Because Plaintiff makes no non-conclusory allegations that the City is violating § 94 of the New York Public Service Law, his claim fails as a matter of law.
D. The Motion for Leave to Amend
Finally, Plaintiff requests leave to amend. (ECF 116). Defendants oppose and contend that the proposed amendments do not attempt to cure defects in the Amended Complaint, but rather "raise new claims in a futile effort to prolong the litigation." (ECF 117 at 1). After Defendants submitted their opposition, Plaintiff filed a 12-page reply, mostly re-arguing his previously-made standing arguments. (ECF 118). Defendants objected to Plaintiff's letter as improper under the Court's rules. (ECF 119). Plaintiff responded to Defendants' objection, asking the Court to consider some portion of his reply. (ECF 120). The Court has reviewed and considered all of the submissions related to Plaintiff's Motion for Leave to Amend.
An opportunity to amend is not required where the defects in the plaintiffs' claims are substantive rather than merely formal, such that any amendment would be futile. Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000); see also Pucci v. Brown, 423 F. App'x. 77, 78 (2d Cir.2011). Further, leave to amend may properly be denied for "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). Such is the case here.
First, granting Plaintiff leave to amend, a motion he made while Defendants' motions to dismiss were fully submitted, would only serve to avoid or delay a determination on the merits. Plaintiff first brought his claims in the United States District Court for the Eastern District of New York in Marotte v. City of New York, 15-CV-5911 (NG) (E.D.N.Y. filed Oct. 14, 2015). After the defendants in that action moved to dismiss Plaintiff's complaint, Plaintiff sought leave to amend his complaint. But the day Plaintiff's opposition to the motion to dismiss was due, Plaintiff chose to voluntarily dismiss the action in accordance with Fed. R. Civ. P. 41(a)(1)(A)(i). After Plaintiff filed this action, Defendants filed and served papers in support of a pre-answer motion to dismiss. (ECF 75, 78, 82, 85). After multiple adjournments of the deadline for Plaintiff to respond to the motion to dismiss, Plaintiff filed a letter seeking to dismiss this case without prejudice. (ECF 92). Defendants did not consent to the dismissal. (ECF 93). Based on the history of the action, the Honorable Sarah Netburn denied Plaintiff's application and stated that "fairness and judicial economy are not served by dismissing [P]laintiff's suit without prejudice." (ECF 94). Judge Netburn further noted that "[Plaintiff's] legal actions have consumed substantial time of the courts and defendants." (Id.)
Second, Plaintiff's proposed amended complaint asserts two new claims, both of which are futile and cumulative of claims Plaintiff previously asserted. Plaintiff's first new proposed claim relies on the FCC's June 11, 2018 Restoring Internet Freedom Order, which relates to "net neutrality" requirements. (ECF 116 at 1). The FCC's order does not relate in any way to the 2014 PCS RFP or the franchise agreement between the City and CityBridge. New requirements relating to net neutrality have no bearing on Plaintiff's ability to provide PPTs on the City's sidewalks. Plaintiff's second new proposed claim relates to recent amendments to the franchise agreement. (Id. at 2). For the same reasons Plaintiff lacks standing to challenge the franchise agreement, Plaintiff would lack standing to challenge the recent amendments to the agreement, because Plaintiff has not alleged any facts showing how he is injured by the recent amendments. Plaintiff has also not alleged any facts showing that the requested relief would redress the injuries he claims, which are the same injuries he claims in his Amended Complaint. Further, the recent amendments to the franchise agreement, which relate to deferred payments of some "potential revenue-sharing money" between the City and CityBridge and the easing of "build-out requirements in terms of scheduling and locations," (ECF 117 at 2), are within the scope of the 2014 PCS RFP and clearly relate to the City's right to manage its sidewalks, as protected by the § 253 (c) safe harbor provision. Thus, this proposed claim would also fail as a matter of law.
For these reasons, I recommend that Plaintiff's motion to amend be denied and that he not be permitted to file a second amended complaint.
III. Conclusion
The Court has considered all of the arguments raised by the parties. For the reasons discussed above, I respectfully recommend that Defendants' Motion to Dismiss be GRANTED and that the Amended Complaint be DISMISSED, without prejudice to refile in state court, in its entirety, for lack of subject matter jurisdiction. I respectfully recommend that Plaintiffs' Motion for Leave to Amend be DENIED. In the alternative, if Judge Woods disagrees and reaches the motion to dismiss in accordance with Fed. R. Civ. P. 12(b)(6), I respectfully recommend that the Amended Complaint be DISMISSED for failure to state a claim upon which relief can be granted.
See Hernandez v. Conriv Realty Assocs., 182 F.3d 121, 123-24 (2d Cir. 1999) ("Where a court lacks subject matter jurisdiction, it also lacks the power to dismiss with prejudice."); Carter, 822 F.3d at 54 (citing Hernandez, 182 F.3d at 123) ("Where a complaint is dismissed for lack of Article III standing, the dismissal must be without prejudice, rather than with prejudice."); HealthNow New York, Inc. v. New York, 739 F. Supp. 2d 286, 297-98 (W.D.N.Y. 2010), aff'd, 448 F. App'x 79 (2d Cir. 2011) (citing Hernandez, 182 F.3d at 123) (dismissing complaint on Eleventh Amendment grounds pursuant to Fed. R. Civ. P. 12(b)(1), without prejudice, because "[a]bsent subject-matter jurisdiction, this Court lacks the power to dismiss with prejudice.").
The Clerk of Court is respectfully directed to mail a copy of this Report and Recommendation to Plaintiff.
IV. Objections
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days (including weekends and holidays) from service of this Report to file written objections. See also Fed. R. Civ. P. 6 (allowing three (3) additional days for service by mail). A party may respond to any objections within fourteen (14) days after being served. Such objections, and any responses to objections, shall be addressed to the Honorable Gregory H. Woods, United States District Judge. Any requests for an extension of time for filing objections must be directed to Judge Woods.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. (See Thomas v. Arn, 474 U.S. 140, 155 (1985); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, 58 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983)).
Respectfully submitted,
s/ Ona T . Wang
Ona T. Wang
United States Magistrate Judge Dated: February 7, 2019
New York, New York