Heidel. v. Governor of New York State ( 2023 )

21-2860-cv
Heidel. v. Governor of New York State
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 31st day of January, two thousand twenty-three.
PRESENT: PIERRE N. LEVAL,
JOSÉ A. CABRANES,
WILLIAM J. NARDINI,
Circuit Judges.
ANDREW HEIDEL, R. ANDREW HEIDEL INC., DBA
The Way Station, FRANKLIN ORTEGA, PO
ITALIANISSIMO INC., JOHN MEROLLA, NYMS
PRODUCTIONS, INC., DBA Murdered by the Mob,
individually and on behalf of classes of all others
similarly situated,
Plaintiffs-Appellants, 21-2860-cv
v.
GOVERNOR OF NEW YORK STATE, in her official
capacity, THE STATE OF NEW YORK, ERIC ADAMS,
THE CITY OF NEW YORK, KATHY HOCHUL, MAYOR
OF NEW YORK CITY, in his official capacity,
Defendants-Appellees. *
*
The Clerk of Court is directed to amend the caption as set forth above.
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FOR PLAINTIFFS-APPELLANTS: JOHN G. BALESTRIERE, BALESTRIERE
FARIELLO, New York, NY.
FOR DEFENDANTS-APPELLEES: ELIZABETH A. BRODY (Barbara D.
Underwood, Ester Murdukhayeva, on the
brief), for Letitia James, Attorney General,
State of New York, New York, NY.
REBECCA L. VISGAITIS (Richard Dearing,
Claude S. Platton, on the brief),
for Sylvia O. Hinds-Radix, Corporation
Counsel of the City of New York, New
York City Law Department, New York,
NY.
Appeal from a judgment of the United States District Court for the Southern District of
New York (P. Kevin Castel, Judge).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the District Court be and hereby is
AFFIRMED.
Plaintiffs-Appellants—(1) Andrew Heidel and R. Andrew Heidel Inc. (d/b/a “The Way
Station”); (2) Franklin Ortega and PO Italianissimo Inc. (“Italianissmo Ristorante”); and (3) John
Merolla and NYMS Productions, Inc. (d/b/a “Murdered by the Mob”)—appeal from the October
2021 judgment of the District Court dismissing Plaintiffs’ complaint in its entirety against the
Governor of New York and the State (together, “State Defendants”) and the Mayor of the City of
New York and the City (together, “City Defendants”). Plaintiffs brought their putative class action
for money damages against State Defendants and City Defendants arguing that the Plaintiffs and the
putative class were harmed by the State and City’s 2020 COVID-19 executive orders. We assume
the parties’ familiarity with the underlying facts, the procedural history of the case, and the issues on
appeal.
In reviewing the District Court’s dismissal of the Takings claim against the State Defendants
for lack of subject matter jurisdiction, we review factual findings for clear error and legal conclusions
de novo. Beaulieu v. Vermont, 807 F.3d 478, 483 n.1 (2d Cir. 2015). The District Court’s dismissal of
claims against City Defendants pursuant to Fed. R. Civ. P. 12(b)(6) is reviewed de novo. ATSI
Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007).
For the reasons set forth below, we affirm the District Court’s judgment.
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I. Fifth Amendment Takings Claim Against State Defendants
The District Court correctly dismissed Plaintiffs’ claim against State Defendants—seeking
money damages arising from a categorical regulatory taking under the Fifth Amendment’s Takings
Clause—because Eleventh Amendment sovereign immunity barred the suit. 1
Plaintiffs concede on appeal that “sovereign immunity may generally require that Takings
claims against State Defendants must be brought in state court . . . .” Pls. Br. 13. Yet they rely on
Kurtz v. Verizon N.Y., Inc., 758 F.3d 506, 512 (2d Cir. 2014), for the proposition that where—as they
allege here—state procedures fail to provide “reasonable, certain and adequate provision for
obtaining compensation,” they may pursue their claim in federal court. Plaintiffs never assert that
they, as individual plaintiffs, would be unable to effectively pursue relief at the New York Court of
Claims, but instead argue that the New York procedures to adjudicate relief for the putative class are
inadequate because, inter alia, (1) the rules effectively “require pre-suit joinder of all class members,”
(2) “there is no way for Plaintiffs’ counsel to ascertain and contact the Class members,” (3) “the best
possible ethically-permitted mailed notice would lack the key opt-out nature of class actions under
both Rule 23 and CPLR Article 9,” and (4) “the Court of Claims requires claimants with business
claims such as Class members to identify and verify the ‘total sum claimed’ in damages with
specificity.” Pls. Br. 14–17. Although we recognize that these procedural steps may render class-
wide relief more challenging in the Court of Claims than under a Fed. R. Civ. P. 23 class action,
these procedural steps do not impede Plaintiffs’ ability to obtain individual relief through New York
procedures. Because we have previously held that “New York State has a reasonable, certain and
adequate provision for obtaining compensation,” Kurtz, 758 F.3d at 514 (quoting Country View Ests.
v. Town of Brookhaven, 452 F.Supp.2d 142, 157 (E.D.N.Y. 2006)), and Plaintiffs do not argue that state
procedures bar “reasonable, certain and adequate” individual recovery, we reject Plaintiffs’
arguments as precluded by our precedent.
II. Federal and State Constitutional Claims Against City Defendants
In his thorough and well-reasoned Opinion and Order, Judge Castel dismissed all claims
against the City, which arose under the Takings Clauses of the Fifth Amendment and the New York
Constitution, the Due Process Clause of the Fourteenth Amendment, and the Equal Protection
Clauses of the Fifth Amendment and the New York Constitution. Although the District Court, sua
sponte, raised the issue of standing with regard to Plaintiffs’ Equal Protection claims against the City,
SPA-25, the District Court dismissed the Equal Protection claims and all others on the basis of
Plaintiffs’ failure to state claims under Fed. R. Civ. P. 12(b)(6), id. 15–27.
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Because Plaintiffs’ Takings claim is barred by Eleventh Amendment sovereign immunity, we
need not address a matter the District Court assumed, without deciding: that “the ‘self-executing’
nature of the Takings clause could permit a plaintiff to bring a claim without relying on section
1983.” SPA-10.
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On appeal, City Defendants argue that “plaintiffs have failed to demonstrate that any city
policy caused their alleged injuries.” City Defs. Br. 12. Because causation is necessary for Article III
standing, and “constitutional standing implicates the subject matter jurisdiction of the Court, we may
raise the issue nostra sponte.” In re Clinton Nurseries, Inc., 53 F.4th 15, 22 (2d Cir. 2022).
Even assuming that the Complaint adequately pleads an injury, it fails to plead causation as
to City Defendants. “The ‘causal connection’ element of Article III standing, i.e., the requirement
that the plaintiff’s injury be ‘fairly . . . trace[able] to the challenged action of the defendant, and
not . . . th[e] result [of] the independent action of some third party not before the court,’ does not
create an onerous standard.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 55 (2d Cir. 2016) (quoting
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)) (alterations in original). Yet even under this
standard, we conclude that Plaintiffs fail to plead causation as to City Defendants. As noted by the
District Court, “[w]hile the Complaint makes detailed allegations about public health orders issued
by . . . the City, it includes no factual allegations about how those orders affected plaintiffs
individually, including any effect on revenue or business operations, or any attempt to stay in
business under modified pandemic conditions.” SPA-4. Thus, Plaintiffs never connect the dots
between any City policy and their alleged injuries necessary to show causation. Notably, Plaintiffs
fail to address City Defendants’ causation argument in their reply beyond mere recitation that the
City’s actions caused Plaintiffs’ business closures. See Pls. Reply 1. Because Plaintiffs’ Complaint
fails to adequately plead causation as to City Defendants that is necessary for Article III standing, we
affirm the District Court’s dismissal of claims against those defendants.
III. Conclusion
We have reviewed all of the arguments raised by Plaintiffs on appeal and find them to be
without merit. For the foregoing reasons, we AFFIRM the judgment of the District Court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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