Chahine v. The City of New York

Background

Hassan Chahine and Chahine Sportswear II Corp. sued the City of New York, the New York City Police Department, Officer David Perez, Officer Matthew Mauro, and Police Officer John Doe Nos. 1-5. The Second Amended Complaint alleged claims under 42 U.S.C. § 1983 for unlawful seizure of property, unlawful seizure of a person, failure to intervene, false arrest and false imprisonment, and malicious prosecution. It also asserted § 1983 municipal-liability claims and a New York state-law claim for tortious interference with prospective business relations against the City and NYPD.

According to the allegations, Perez and Mauro took clothing from Chahine Sportswear on March 27, 2018, after Gucci America, Inc. and its employee William Friberg reported that Chahine was selling counterfeit Gucci apparel. Friberg signed a supporting statement confirming that the clothing was counterfeit, and NYPD officers arrested Chahine. Chahine told the officers that the merchandise was labeled “Southpole,” not Gucci. He was later charged with third-degree trademark counterfeiting, but the criminal case was dismissed on speedy-trial grounds.

Chahine alleged that Gucci and Friberg had a pre-existing relationship with the defendants, that Friberg’s statement was false, and that the defendants conspired to harm his business. He discontinued the action with prejudice as to Gucci and Friberg. In opposing the motion to dismiss, Chahine did not defend his unlawful-seizure-of-a-person claim and did not contest that NYPD was not a suable entity. The court therefore deemed that claim abandoned as to all defendants and deemed all claims against NYPD abandoned.

Legal standard

The defendants moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. The court was required to accept well-pleaded factual allegations as true and draw reasonable inferences for Chahine, but it did not have to accept conclusory assertions or bare recitations of legal elements. The complaint needed enough factual content to make liability plausible, rather than merely possible.

False arrest and malicious prosecution

The court held that probable cause defeated both claims. Probable cause exists when reasonably trustworthy information would lead a reasonably cautious person to believe that an offense was committed by the person to be arrested. A report from a putative victim generally supplies probable cause unless circumstances cast doubt on the person’s reliability.

The court found probable cause because Friberg, a Gucci employee and putative victim, told NYPD that Chahine was selling counterfeit merchandise and signed a supporting statement confirming that the seized merchandise was counterfeit. The court stated that officers were not required to investigate Chahine’s explanation or assess unverified claims before making the arrest. Chahine’s allegations that Perez and Mauro knew the information was falsified and conspired with Gucci and Friberg were conclusory and did not cast doubt on probable cause. The court dismissed the false-arrest, false-imprisonment, and malicious-prosecution claims.

Unlawful seizure of property

The court also dismissed the property-seizure claim. The complaint alleged that approximately two coats, 11 pairs of pants, and 208 pairs of shorts had been seized, but it did not identify when the seizure occurred or who carried it out. Assuming the claim concerned Perez and Mauro’s taking of clothing before Chahine’s arrest, the court held that they had probable cause to seize the merchandise because Friberg had reported that Chahine was selling counterfeit clothing.

Failure to intervene

The court dismissed the failure-to-intervene claim because Chahine had not plausibly alleged that any officer violated his constitutional rights. An officer’s duty to intervene arises when the officer observes, or has reason to know of, an unjustified arrest or another constitutional violation.

Municipal liability

The court dismissed Chahine’s § 1983 claims against the City. Chahine based those claims on an alleged City policy or custom of prosecuting small businesses to benefit Gucci and on an alleged failure to train employees to detect counterfeit merchandise.

The court held that Chahine provided only labels, conclusions, and a formulaic statement of the legal elements. He did not provide factual support for the alleged policy, custom, or failure to train. He also did not allege the pattern of similar constitutional violations ordinarily required to support a failure-to-train theory based on deliberate indifference. The municipal-liability claims were therefore dismissed.

Tortious interference with prospective business relations

The court dismissed the state-law claim against the City for tortious interference with prospective business relations. Such a claim required allegations that Chahine had prospective business relations with a third party, that the City interfered with them through wrongful or improper means, that the relationship was injured, and that Chahine would have entered the economic relationship but for the City’s conduct.

The court found that the complaint did not allege facts supporting a wrongful purpose or improper means, identify a third party with whom Chahine had prospective business relations, or allege that Chahine would have entered an economic relationship absent the City’s conduct.

Disposition

Judge Denise Cote granted the defendants’ September 13, 2019 motion to dismiss. The order states that the Clerk of Court shall close the case.