Posted by: Patricia Salkin | June 2, 2019

Fed. Dist. Court in NY Dismisses Claims of Coercion and Violation of Equal Protection Rights Arising from the Development of the Palisades Center

This post was authored by Matthew Loeser, Esq.

In 1996, EklecCo, NewCo LLC and EklecCo L.L.C, (collectively, “EklecCo”) formally applied to the Planning Board to amend the Final Site Approval to increase the size of the Palisades Center from 1.854 million square feet of gross leasable area (“GLA”) to 3.05 million square feet of GLA by adding floors rather than expanding the existing footprint of the building. Following this, the Town Board passed Resolution 909-1996, which required that Plaintiffs pay a $1.5 million purchase price for the Town Roads, and the withdrawal of the Palisades Center Expansion Application, among other terms. The Planning Board endorsed an amended final site plan for a 1.854-million-squarefoot mall, which included an amended “Note Z” that made the leasing of additional space above a cap subject to Planning Board approval following an environmental assessment and stated that an application for such approval “shall not be made until compliance with the applicable provisions of the Roads Resolution.” From 2014 through 2016, Plaintiffs repeatedly – and unsuccessfully – attempted to obtain a release of the Restrictive Covenant from the Town. The Town refused to release the Restrictive Covenant without “major concessions” from Plaintiffs, including millions of dollars of payments to the Town’s general fund and submission to a public referendum to approve a release.

Plaintiff EklecCo, brought this action pursuant to 42 U.S.C. § 1983 and New York state law against the Town of Clarkstown, the Clarkstown Town Board, the Clarkstown Planning Board, and the Supervisor of the Town of Clarkstown, George Hoehmann. Plaintiffs alleged that Defendants coerced them into surrendering certain constitutional rights in exchange for the discontinuance and conveyance of public roads that were necessary for the continued development of the Palisades Center shopping mall and discriminated against them in violation of the Fourteenth Amendment Equal Protection Clause.

Plaintiffs first argued that their First Amendment claimed are timely under the continuing violations doctrine and because Defendants violated their First Amendment rights in 2014 and 2016 by repeatedly refusing to grant Plaintiffs release from the restrictions. The court found that the harm Plaintiffs alleged in their First Amendment claims occurred as long as the Town enactments allegedly limited Plaintiffs’ exercise of their First Amendment rights. Due to the ongoing nature of the harm alleged, the court held that the statute of limitations for facial challenges to legislation based on the First Amendment would not accrue until the statute was repealed or otherwise invalidated. Accordingly, Plaintiffs’ First Amendment claims fell within the statute of limitations.

With regard to their Equal Protection claim, plaintiffs alleged that Defendants refused to release them from the restrictions on the property from 2014 through 2016. As the Second Circuit pointed out in Fahs, however, allegations that Plaintiffs were subjected to unfavorable treatment within the statutory period does not amount to an allegation that the action was taken in furtherance of a policy of discrimination. Here, there were no facts in the SAC that indicated that Defendants violated the Equal Protections Clause in the three years prior to the filing of this suit or that Defendants took a non-time-barred act in furtherance of a policy to discriminate against Plaintiffs. Accordingly, the Equal Protection Clause claims were dismissed as untimely.

As to the merits of the First Amendment claim, the SAC alleged that Defendants had restricted Plaintiffs from applying to the Planning Board for approval of an expansion and that this burdened their First Amendment rights. Plaintiffs failed to allege that Defendants prevented them from petitioning the government for redress, merely that they were prevented from applying directly to the Planning Board for a release of the Restrictive Covenant without a favorable permissive referendum or approaching the Town Board. Here, the record reflected that Plaintiffs repeatedly petitioned the Town Board to lift the conditions imposed by Note Z and the Restrictive Covenant and allow for further expansion. Additionally, Defendants entered into an agreement with Plaintiffs through which Plaintiffs agreed to release Defendants from liability for their actions up to and including the enactment of the Roads Resolution. This waiver did not prevent Plaintiffs from bringing the suit currently before the Court for alleged post-release violations of their constitutional rights. Thus, Plaintiffs were not denied access to the courts.

Plaintiffs next contended that the Roads Resolution, Restrictive Covenant, and Note Z imposed unconstitutional conditions in violation of their First Amendment rights. The court found that, Plaintiffs failed to state a facial unconstitutional conditions claim. Plaintiffs were, and remain, able to petition the government for an expansion and to bring constitutional claims before the court. Thus, any claims that the conditions amounted to exactions that violated the First Amendment likewise failed. Under the terms of the Roads Resolution, Furthermore, the court found that the $1.5 million plaintiffs were required to pay, in exchange for transfer of ownership of the Town Roads from the Town to Plaintiffs, was a contract between the parties for the sale of the Town Roads. This was permissible as the court held the government may charge private entities for the purchase of government property. While, plaintiffs also claimed that when they asked the Town for a release from the Restrictive Covenant and Note Z, the Town refused to grant a release unless Plaintiffs made “millions of dollars in payments” to the Town, among other concessions; however, Plaintiffs did not allege that they actually made these payments. Accordingly, defendants’ motion to dismiss was granted.

EklecCo NewCo LLC v. Town of Clarkstown, 2019 WL 2210798 (SDNY 5/21/2019)

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