Town of Newburgh, New York v. Newburgh EOM LLC

Background

The Town of Newburgh sued Newburgh EOM LLC, also sued as Newburgh EOM LLC doing business as Cross Roads Hotel, and Cross Roads Hotel in New York State Supreme Court. The Town alleged violations of its Building Construction Code and Municipal Code arising from a plan to use the Hotel to house asylum seekers for four months.

The Hotel removed the case to federal court, asserting federal-question jurisdiction and later asserting that removal was proper under 28 U.S.C. § 1443(1), which permits removal of certain state-court cases involving federal civil-rights claims. The Town moved to return the case to state court. On January 23, 2024, Judge Seibel granted that motion. The Hotel appealed the remand order to the U.S. Court of Appeals for the Second Circuit and asked the district court to stay, or pause, the remand order while the appeal proceeded.

Legal Standard

A stay pending appeal is discretionary rather than automatic. The party requesting one must show, among other things, a strong likelihood of success on appeal and a risk of certain and imminent harm that money could not adequately remedy. Courts also consider potential harm to other parties and the public interest, but the first two factors are the most important.

Discussion

Judge Seibel held that the Hotel had not shown a strong likelihood of success on appeal. The Hotel argued that the court should have accepted allegations in its amended notice of removal describing the Town’s enforcement of local laws as pretextual and selectively enforced. The court found that the allegations about the Town’s discriminatory motive were conclusory and lacked supporting facts. The court also said that the Hotel’s briefing exaggerated or mischaracterized what its amended notice actually alleged.

The court acknowledged that it had used language commonly associated with motions to dismiss when describing the Town’s complaint, and said it should instead have stated that it was summarizing the complaint. But Judge Seibel concluded that this wording did not affect the decision because the court had substantively evaluated the Hotel’s amended notice of removal and found its allegations insufficiently plausible.

The Hotel also argued that its federal public-accommodations rights under Title II of the Civil Rights Act could not be asserted in state court because federal courts had exclusive jurisdiction. Judge Seibel noted that the Hotel had not raised that argument in the district court and therefore was unlikely to have it considered for the first time on appeal. In any event, the court concluded that Supreme Court decisions concerning concurrent state and federal jurisdiction made the Hotel’s position unlikely to succeed. The court also rejected the Hotel’s argument that the novelty or complexity of the appeal supported a stay.

Judge Seibel separately found that the Hotel had not shown irreparable harm. The Hotel’s claim that the state case itself violated its civil rights depended on the same unsupported merits arguments. Its concern that the state case might moot the appeal or produce conflicting decisions depended on a chain of uncertain future events, including a dispositive state-court ruling and a favorable Second Circuit decision. The court therefore found those risks too remote and speculative.

Ruling

The court held that the Hotel had not met its heavy burden on the two most important stay factors. Because the Hotel had not shown a strong likelihood of success or irreparable harm, the court did not address the remaining stay factors. The Hotel’s motion for a stay pending appeal was DENIED, and the Clerk of Court was directed to terminate the motion.