Khen v. US Coachways, Inc.

Background

The plaintiffs alleged that Coachways agreed to provide five buses for them and approximately eighty buses for a larger group traveling from locations in New York, Westchester, Connecticut, and elsewhere to Washington, D.C., on November 14, 2023. They planned to attend the March for Israel Rally. The plaintiffs alleged that approximately 25% of the contracted-for buses were canceled or did not arrive, including their buses, and that Coachways attributed the cancellations to a “driver issue.” They alleged that drivers refused to transport them because they were Jewish or Israeli and coordinated their actions.

The amended complaint asserted claims under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 1983, the Federal Transit Law, the New York State Human Rights Law, the New York City Human Rights Law, breach of contract, and negligence. The plaintiffs also sued unidentified drivers and unidentified corporations and sought class certification. Coachways moved for judgment on the pleadings, which uses the same standard as a motion to dismiss for failure to state a claim.

Rulings on the Claims Against Coachways

The court dismissed the Title VI claim. It held that the plaintiffs did not allege facts supporting a plausible inference that Coachways intentionally discriminated against them. In particular, the complaint did not allege that Coachways knew the plaintiffs were Jewish or Israeli. The court also held that the complaint did not adequately allege that Coachways had actual knowledge of discriminatory conduct by its drivers and deliberately failed to respond.

The court dismissed the Section 1983 claim because Coachways is a private entity and the complaint did not plausibly allege that it acted under color of state law. The allegations did not show government coercion, joint action with the government, or performance of a function traditionally reserved exclusively to the government. Receiving public funding, by itself, did not establish state action.

The court dismissed the New York State Human Rights Law and New York City Human Rights Law claims against Coachways because the complaint did not adequately allege that Coachways knew the plaintiffs’ religion or national origin or treated them less favorably because of those characteristics. The court dismissed the negligent hiring and supervision claim because the plaintiffs did not allege facts showing that Coachways knew or should have known that the drivers had a tendency to engage in the type of discriminatory conduct alleged. The court held that the complaint did sufficiently allege an employer-employee relationship for purposes of pleading a possible duty, but the lack of allegations about Coachways’ knowledge was fatal to the claim.

The court did not dismiss the breach of contract claim against Coachways. Applying New York law, it held that the plaintiffs adequately alleged a contract, their performance, Coachways’ breach, and damages. The complaint identified the transportation arrangement, the five buses, the $18,950 payment, the failure to provide the transportation, and the alleged failure to refund the payment. The court declined to rely on materials submitted by Coachways that allegedly showed a refund because those materials were outside the pleadings and were not properly considered on this motion.

Rulings on the Unidentified Defendants

The court dismissed the Title VI, Section 1983, New York State Human Rights Law, and New York City Human Rights Law claims against the unidentified corporations. The complaint did not adequately allege discriminatory intent or state action by those corporations, and its allegations against them were even more limited than those against Coachways.

The court dismissed the Title VI claims against the unidentified drivers because Title VI does not impose individual liability. It also dismissed the Section 1983 claims against them because the complaint did not allege that the private drivers acted under color of state law.

The court allowed the New York State Human Rights Law and New York City Human Rights Law claims against the unidentified drivers to continue. Unlike Title VI, those state and city laws can impose individual liability on employees of public accommodations. The court held that the allegation that the drivers refused to transport the plaintiffs because they were Jewish or Israeli and coordinated their efforts adequately pleaded purposeful discrimination at that stage.

Other Dispositions and Case Status

The plaintiffs consented to dismissal of the Federal Transit Law claim and the Connecticut public-accommodations claim. The opinion states that those claims were dismissed with prejudice against all defendants. The court’s discussion identifies these as Counts III and VI.

The court therefore stated that Coachways’ motion for judgment on the pleadings was “GRANTED IN PART and DENIED IN PART.” The stay of discovery was lifted, and the parties were directed to submit a revised case-management plan. The case was to proceed against Coachways on the breach of contract theory and against the unidentified drivers under the New York State and New York City Human Rights Laws.

The opinion contains apparent numbering inconsistencies in its conclusion. It says that the plaintiffs consented to dismissal of Count II and Count VI, although the earlier discussion identifies the consented-to claims as Counts III and VI. It also says that Counts I, II, III, VI, and VII were dismissed in their entirety, which conflicts with the same conclusion’s statement that the motion was denied as to Count VII against Coachways and with the body of the opinion, which expressly denies dismissal of the breach of contract claim. This summary follows the claim-by-claim analysis and the conclusion’s specific statement that the contract claim against Coachways survives.