Delux Public Charter, LLC v. County of Westchester, New York

Background

Delux Public Charter, LLC doing business as JSX Air, JetSuiteX, Inc., XO Global, LLC, and Blade Urban Air Mobility, Inc. sued the County of Westchester, New York. The plaintiffs are federally authorized direct or indirect air carriers that provide flight services at Westchester County Airport. Their flights use fixed-base operator spaces at the airport rather than the main passenger terminal. The plaintiffs alleged federal preemption and deprivation of equal protection, and sought money damages, declaratory relief, and an injunction.

The County’s Terminal Use Procedures, codified in Westchester County Municipal Code Section 712.462, require certain air carriers to operate from the main terminal under a Terminal Use Agreement. The agreement imposes additional requirements, including a lottery for allocating flights and limits on schedules, ramp use, and passenger capacity. In October and November 2021, the County began demanding that the plaintiffs use the terminal and enter into such an agreement. On January 21, 2022, the County adopted Airport Operational Policy No. 1, which likewise required the plaintiffs to use the terminal, enter a Terminal Use Agreement, and use the airport’s Transportation Security Administration checkpoints instead of the screening procedures at the fixed-base operator spaces.

The County filed a related action in New York state court seeking a declaration that Section 712.462 and Policy No. 1 applied to the plaintiffs. The plaintiffs then filed this federal action seeking the opposite declaration, among other relief. The federal court later entered a stipulation and order stating that the County and its agents would not enforce the policy or Section 712.462 against the plaintiffs, or encourage the fixed-base operator spaces to do so, without a valid court order.

Preliminary injunction

A preliminary injunction is an extraordinary temporary remedy. Generally, the moving party must show likely irreparable harm, a likelihood of success on the merits or sufficiently serious merits questions combined with a favorable balance of hardships, and that an injunction would serve the public interest.

The court denied the plaintiffs’ motion. It held that the court-approved stipulation had mooted the requested preliminary relief because the plaintiffs had already received the protection the injunction would have provided. The County had also represented that it would not interfere with the plaintiffs’ flights or operations without a valid court order.

The court rejected the plaintiffs’ alternative argument that their business partners, investors, or customers might avoid future flights unless the court found that the plaintiffs were likely to succeed on their claims. The court found that argument remote and speculative because the plaintiffs supplied no factual basis showing that those people would stop investing in routes or aircraft or stop booking flights. The court therefore denied the preliminary injunction without deciding whether the plaintiffs were likely to succeed on the underlying preemption or equal-protection claims, stating that it would not issue an advisory opinion about the ultimate merits.

Request for abstention

The County asked the federal court to abstain—that is, to refrain from deciding the federal case in favor of the related state-court action—under the Colorado River and Wilton doctrines. The court explained that abstention is generally disfavored and that federal courts ordinarily must exercise jurisdiction over properly presented disputes.

Under Colorado River, a federal court may stay or dismiss a case in exceptional circumstances when a parallel state proceeding is pending. The court found that the actions were not fully parallel because the state case included Contour, which was not a party to the federal case; the federal plaintiffs sought damages while the state case sought only declaratory relief; and the federal case included an equal-protection claim that was not at issue in the state case.

The court further held that the Colorado River factors did not establish exceptional circumstances even if the actions were considered parallel. No court had jurisdiction over real property, and neither forum was more convenient. Abstention would not avoid piecemeal litigation because the federal case included damages and equal-protection claims that the state action did not address. Although the state case was filed first, both cases were filed on the same day and were proceeding in generally the same posture. Federal law supplied the rule of decision for the preemption and equal-protection claims, which weighed against abstention. The court recognized that New York procedures were adequate to protect the plaintiffs’ federal rights, which favored abstention, but concluded that this factor did not outweigh the others and the strong presumption favoring federal jurisdiction.

The court also found Wilton abstention unwarranted. That doctrine gives courts greater discretion in certain declaratory-judgment cases, but this action sought damages and injunctive relief in addition to declaratory relief and involved federal-law issues. The court therefore declined to abstain under either doctrine.

Disposition

Judge Philip M. Halpern denied the plaintiffs’ motion for a preliminary injunction and denied the County’s request to abstain in favor of the state-court action. The court directed the County to answer the complaint within twenty days and stated that it would later schedule an initial conference.