Town of Newburgh, New York v. Newburgh EOM LLC

Background

The Town of Newburgh, New York sued Newburgh EOM LLC, Newburgh EOM LLC doing business as Crossroads Hotel, Crossroads Hotel, Ratan Newburgh, LLC, and Ratan Newburgh, LLC doing business as Ramada Inn in New York state court. The Town sought injunctive and declaratory relief based on its position that the defendants’ hotels could not be used for long-term housing because their certificates of occupancy and local codes authorized transient hotel or motel use, including stays limited to 30 days.

The dispute arose after New York City arranged for asylum seekers to receive temporary accommodations at hotels outside New York City. The Town alleged that the defendants’ use of their properties for long-term housing violated local building and zoning requirements. A state court issued a temporary restraining order concerning the hotels’ use and the number of asylum seekers who could stay there.

Crossroads previously removed the case to federal court, but the federal court remanded it to state court. After the Town filed an amended complaint adding Ramada as a defendant, Ramada removed the case again. Ramada relied on 28 U.S.C. § 1443(1), which permits removal of certain civil or criminal cases when a defendant cannot enforce specified federal equal-rights protections in state court. Crossroads consented to Ramada’s removal. The Town moved to remand.

Mootness

The court first examined whether it still had jurisdiction. The parties agreed that the asylum seekers had left the hotels, but argued that the case remained live because the Town sought a permanent injunction and because Ramada’s notice of removal asserted rights under Title II of the Civil Rights Act of 1964 and reserved the possibility of counterclaims.

The court held that the Town’s case was moot. The Town’s requested permanent injunction would have required the defendants to comply with the Town’s codes and stop providing noncompliant long-term housing. The court characterized that request as an impermissible general “obey the law” injunction and concluded that, even if such an injunction were entered, it would not change anything because the long-term occupants had already left.

The court also rejected the argument that the dispute was likely to recur. Although the defendants said New York City might again use the hotels to house asylum seekers, the court found that possibility speculative. The temporary restraining order allowed the 186 people then staying at the hotels to remain, but they left anyway without a court order requiring them to do so. The court concluded that the record did not show a reasonable expectation that the same dispute would recur between these parties.

The court further concluded that Ramada’s asserted Title II rights and possible claim for attorneys’ fees did not preserve a live controversy. Title II provides injunctive relief, not damages, and there was no longer conduct that could be enjoined. A potential claim for attorneys’ fees also could not create federal jurisdiction after the underlying dispute became moot. Because mootness eliminates subject-matter jurisdiction, the court concluded that remand was required under 28 U.S.C. § 1447(c).

Alternative ruling on removal under § 1443(1)

The court separately addressed the validity of removal under § 1443(1), even though it had already found the case moot. It concluded that Ramada was not barred by the law-of-the-case doctrine because Ramada had not been a party when Crossroads carried out the earlier removal and had not previously had an opportunity to remove the action.

The court nevertheless held that Ramada failed to satisfy the statute’s second requirement: showing that it was denied, or could not enforce, its Title II rights in New York state court. The court assumed, for purposes of analysis, that the Town’s actions might be racially motivated, but found that Ramada had not shown the kind of clear conflict between state law and federally protected conduct required for § 1443(1) removal.

According to the court, the Town’s lawsuit sought to enforce neutral local rules concerning hotel use, certificates of occupancy, and the length of guest stays. It did not seek to deny the asylum seekers equal access to hotel accommodations; rather, it sought to limit the defendants to the same lawful hotel use available to others. The court found no allegation that the Town’s codes were enacted with discriminatory intent and no basis for predicting that Ramada could not present its federal claims or defenses in state court. The court also rejected Ramada’s argument that Title II gives federal courts exclusive jurisdiction over such claims.

Disposition

Judge Cathy Seibel granted the Town’s motion to remand. The court remanded the case to New York Supreme Court, Orange County, directed the Clerk to terminate the pending motion, and closed the federal case. The remand was based first on mootness and, alternatively, on Ramada’s failure to meet the requirements for removal under 28 U.S.C. § 1443(1).