Second Circuit Court of Appeals Upholds Dismissal of Claims Arising From Denied Application to Subdivide Property

This post was authored by Matthew Loeser, Esq.

This appeal arose following the district court’s granting the motion to dismiss in favor of defendants the Village of Sackets Harbor, its board, planning board, planning board chairperson, and counsel, as well as its counsel’s law firm, Conboy, McKay, Bachman & Kendall, LLP. The dismissed complaint alleged constitutional violations arising from the Village’s denial of plaintiffs’, Liberty Sackets Harbor LLC and its members River North LLC and Philip Simao, application to subdivide it property. The court held that the plaintiffs lacked of subject matter jurisdiction and failed to state a claim upon which relief may be granted.

Although plaintiffs conceded that the Village had not rendered a final decision on their subdivision application, they claimed they did not need to seek a final determination because doing so would be futile. The court found that plaintiffs failed to allege facts demonstrating that the defendants had “dug in their heels and made clear that all such applications will be denied.” Here, the complaint did not allege that plaintiffs had applied for a variance from the new zoning regulation or that the Village lacked discretion to grant a variance. Moreover, the complaint alleged that the zoning dispute was resolved in January 2015 with plaintiffs agreeing to reduce the number of subdivisions in their application. Accordingly, the court held that plaintiffs’ federal constitutional claims were unripe.

The court next found that plaintiff Simao lacked standing to pursue his First Amendment retaliation claim because, absent a direct individual injury, a company’s member lacks standing to sue for an injury to the company. Here, because Simao’s emotional distress and legal expenses indirectly stemmed from the alleged harm to Liberty Sackets, the owner of the land at issue, and since he did not allege an injury independent of Liberty’s injuries, Simao did not have standing to assert his retaliation claim.

Lastly, the court held that the district court properly dismissed plaintiffs’ claims against CMBK on the ground that the complaint failed to plausibly allege that CMBK was a state actor. Plaintiffs conceded that the complaint failed to allege that CMBK was a state actor, an acknowledged that the question “cannot be determined upon the Pleadings.” Despite this, plaintiffs argued that discovery was required to determine the extent of CMBK’s collaboration with the Village. The court found that plaintiffs’ conclusory allegation that a private entity acted in concert with a state actor did not suffice to state a 42 U.S.C. § 1983 claim against the private entity. Accordingly, the court affirmed the judgment of the district court.

Liberty Sackets Harbor LLC, River North, LLC, Philip J. Simao v. Village of Sackets Harbor 2019 WL 2245923 (NY 5/24/2019)