Phillips v. Delaney

Background

Charles Phillips and Alfred J. Vent, proceeding without lawyers, sued Kerry A. Delaney, the New York State Office for People with Developmental Disabilities, Stanley Silverstein, the Institutes of Applied Human Dynamics, Mary T. St. Marks, Thomas Roach, and the City of White Plains. Jay Weinberger had previously withdrawn from the case.

The plaintiffs opposed the proposed establishment of a group home for individuals with developmental disabilities in the Prospect Park neighborhood. The White Plains Common Council initially objected, citing public-safety concerns involving vehicle traffic and emergency access. After a hearing under New York Mental Hygiene Law § 41.34, the Office for People with Developmental Disabilities commissioner overruled the city’s objection. The plaintiffs later alleged that Silverstein had falsely testified about why the Institutes of Applied Human Dynamics had to leave its prior location.

The amended complaint asserted state-law claims sounding in public and private nuisance, fraud, conspiracy to commit fraud, negligence, Medicaid fraud, and perjury or subornation of perjury. The plaintiffs had withdrawn their constitutional claims. The case had been removed from New York state court, and the court concluded that removal jurisdiction could continue even after the federal claims were withdrawn.

Motions and legal standards

The State Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a claim. The IAHD Defendants moved under Rules 12(b)(1), 12(b)(6), 8, and 10. Rule 12(b)(1) concerns the court’s subject-matter jurisdiction. The City Defendants moved under Rule 12(b)(6) and sought sanctions under Rule 11.

Because the plaintiffs were representing themselves, the court read their pleadings liberally, but explained that this did not permit the court to rewrite the complaint or supply missing factual allegations.

State Defendants

The court construed the complaint as attempting to assert fraud claims based on the alleged subornation of Silverstein’s testimony. It held that the plaintiffs had not alleged that the State Defendants made a material misstatement or omission to them, or that they relied on any such statement. The court also held that the plaintiffs had not identified a private right of action for Medicaid fraud, perjury, or subornation of perjury. Because New York does not recognize conspiracy to commit a tort as an independent claim, the conspiracy-to-commit-fraud claims also failed.

The court therefore dismissed the amended complaint against the State Defendants in its entirety.

IAHD Defendants

The court held that the plaintiffs lacked Article III standing to pursue their nuisance claims. Standing requires a plaintiff to allege a concrete, particularized, actual or imminent injury that is traceable to the defendant and likely to be redressed by a favorable decision. The court found that the alleged traffic and safety harms were based on speculation about how the proposed group home would operate, including assumptions drawn from conditions at another facility and incidents reported elsewhere. It also held that increased traffic on public streets would affect residents and visitors generally rather than establish a personal and particularized injury to these plaintiffs.

Because the nuisance claims were dismissed for lack of subject-matter jurisdiction rather than on the merits, the court stated that the dismissal was without prejudice.

The alleged false testimony by Silverstein did not support a fraud claim because the plaintiffs did not plausibly allege that the statement was intended to induce their reliance or that they justifiably relied on it. The statement was made to the commissioner at a proceeding in which the plaintiffs were not parties. The court also rejected the claims based on perjury, subornation of perjury, conspiracy to commit fraud, and Medicaid fraud for the reasons stated elsewhere in the opinion.

The amended complaint was therefore dismissed against the IAHD Defendants in its entirety.

City Defendants

The negligence claims against the City Defendants concerned the city’s decision not to seek judicial review of the commissioner’s decision through a New York Civil Practice Law and Rules Article 78 proceeding. The court held that the plaintiffs had not plausibly alleged a special duty owed by the City Defendants to them. In particular, the plaintiffs did not allege that Mayor Roach promised to bring an Article 78 proceeding or that they relied on an affirmative undertaking by the City Defendants.

The court further held that the decision not to pursue judicial review was discretionary. Under the applicable New York law, discretionary governmental acts generally do not support negligence liability. The negligence claims were therefore dismissed. The fraud claim failed because the plaintiffs did not identify a misrepresentation or omission by the City Defendants on which they reasonably relied. The conspiracy, perjury, subornation-of-perjury, and Medicaid-fraud theories also failed for the reasons previously stated.

Sanctions

The City Defendants sought sanctions under Rule 11, arguing that the plaintiffs’ amended complaint repeated legally and factually unsupported claims and caused unnecessary litigation. The court found the plaintiffs’ conduct concerning and noted that it had previously warned them about deficiencies in related proceedings. But, giving substantial weight to their status as self-represented litigants and because the earlier proceeding had not resulted in a written dismissal of these state-law claims, the court declined to impose sanctions at that time. It cautioned that sanctions might become appropriate if the plaintiffs continued trying to revive claims the court had repeatedly found inadequate.

The IAHD Defendants’ separate application for leave to file a sanctions motion was denied without prejudice.

Leave to amend and disposition

The court declined to grant leave to amend because the plaintiffs had already had numerous opportunities to present their claims and further amendment appeared futile.

The conclusion states that the defendants’ motions to dismiss the amended complaint were granted, and that the City Defendants’ motion for sanctions was denied without prejudice. It specifies that the public and private nuisance claims were dismissed without prejudice for lack of subject-matter jurisdiction, while all other claims were dismissed with prejudice. The clerk was directed to terminate the motions and close the case.