Posted by: Patricia Salkin | July 21, 2009

Rescinded Contract for Boat Mooring Rights Did Not Violate Due Process, Equal Protection or First Amendment

Plaintiffs submitted a bid to acquire the license to operate the mooring and tender service for the town of Huntington, New York.  The town retains exclusive control over moorings in its harbor.  Plaintiffs submitted the highest bid and so the town passed a resolution awarding the license to them.  The second place bidder had operated the tender service for the previous 13 years and had been the sole bidder during that time period.  This second place bidder was a member of the Town’s Harbors and Boating Advisory Council (HBAC).  Among this councils’ duties was providing recommendations to the Town with respect to regulation and placement of moorings.  Plaintiff alleges that this Harbors and Boating Advisory Council member used his connections with the Town Board to rescind the plaintiff’s contract.  Plaintiff further alleged that the Town Board took no action when the HBAC member placed moorings preemptively and without a permit.  Plaintiff alleged that these actions by the Town and the HBAC member violated plaintiffs’ due process, equal protection, and First Amendment rights.

On a motion to dismiss, the court first considered the procedural due process claim.  The court said that the Plaintiffs claim could not prevail because contractual disputes generally do not give rise to a property interest that is protected by due process.  Additionally, the court noted that where administrative bodies maintain significant discretion over an interest or benefit, there is a presumption against finding legal entitlement to that benefit.  The court concluded that because plaintiff had an expectation rather than an entitlement, that plaintiff’s remedy should lie in breach of contract.  The court next examined plaintiffs allegedly denied liberty interest to purse a lawful business or occupation free from “arbitrary, discriminatory, [and] unreasonable … government interference.”  The court pointed out that plaintiffs’ complaint was lacking an element of such a claim, that the town’s action seriously damaged its community standing or reputation. 

With respect to the Equal Protection claim, the court stated that the plaintiffs sought to establish a “class of one” claim and therefore had to demonstrate selective treatment with no rational basis.  Here the court held that since the town was acting as a proprietor and was acting under the authority of N.Y.S. Town Law § 93,  the town’s different treatment  is accepted as a consequence of the discretion granted.  The court also reviewed the plaintiffs’ substantive due process claim but found no fundamental right involved.  Instead the court recognized merely state contractual rights, which Second Circuit precedent has declared insufficient to invoke substantive due process protection. 

Finally, the court examined the plaintiffs’ First Amendment claim and concluded that the right to apply for a permit does not constitute a petition seeking the redress of grievances.  The court hinted that the actual application for such a permit might be, however the plaintiff never made such an application.  Finally the court addressed plaintiffs’ §1983 conspiracy claim but found neither an unconstitutional injury nor anything beyond “vague and conclusory” allegations.  Having dismissed all the federal claims, the court declined to exercise supplemental jurisdiction over the state claims and dismissed the complaint without prejudice. 

Seymour’s Boatyard, Inc. v. Town of Huntington, et al., 2009 WL 1516410 (E.D.N.Y. 7/20/2009).


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