Pascazi v. Peter M. Rivera in His Official Capacity Y. State Comm'r of Labor

MICHAEL S. PASCAZI, Plaintiff, v. PETER M. RIVERA in his official capacityas NEW YORK STATE COMMISSIONER OF LABOR, Defendant.

13-CV-9029 (NSR)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

February 26, 2015

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

Attorney Michael S. Pascazi ("Pascazi") brings this lawsuit pro se to enjoin enforcement of two administrative orders against him. Defendant Peter M, Rivera, New York State Commissioner of Labor (the "Commissioner") moves to dismiss on the grounds of res judicata and failure to state a claim upon which relief may be granted. For the following reasons, the Commissioner's motion to dismiss is GRANTED.

BACKGROUND¹

Pascazi brings this action to enjoin the enforcement of two administrative orders (the "Determinations") finding that his company, Fiber Optek Interconnect Corp. ("Fiber Optek"), willfully violated New York's Prevailing Wage Law, N.Y. Labor Law Art. 8, §§ 220-224 (the"PWL"). (Def.'s Mem. at 1, ECF No. 19.)

Pazcazi was the president and 50% owner of Fiber Optek at all relevant times prior to its dissolution.² Fiber Optek performed cable installation work on both private projects and public work projects. In 1999 and 2001, one or more Fiber Optek employees complained to the Bureau of Public Work (the "Bureau") of the New York Department of Labor (the "NYDOL") about their wages for public work projects, prompting the Bureau to commence an investigation into whether Fiber Optek had violated the PWL with respect to eight projects. (Kupferberg Decl. Ex. A app. at 12-13, ECF No. 18-1 [hereinafter Determination 1]; Kupferberg Decl. Ex. B app. at 3-4, ECF No. 18-2 [hereinafter Determination 2].)

At the conclusion of the investigation, two hearings were conducted. (Determination 1 app. at 1-3; Determination 2 app. at 1-4.) The first hearing focused on one project and took place on seven hearing days between September 17, 2003 and December 15, 2003. (Pl.'s Opp. at 4, ECF No. 22.) The second hearing focused on all eight projects and took place on 16 hearing days between August 7, 2006 and March 10, 2010. (Id.) Pascazi personally appeared at the hearings, presented evidence, and submitted post-hearing written argument. (Determination 1 app. at 3; Determination 2 app. at 2.)

Prior to the conclusion of the hearings, Pascazi filed two actions in the Southern District of New York to enjoin the NYDOL proceedings, see Fiber Optek Interconnect Corp. v. N.Y.S.Comm'r of Labor, No. 03-cv-7374 (S.D.N.Y. filed Sept. 19, 2003); Pascazi v. Angello, No. 04-cv-8896 (S.D.N.Y. filed Nov. 10, 2004), one of which he appealed to the Second Circuit, see Pascazi v. Angello, No. 06-5108-cv (2d Cir. filed Nov. 3, 2006), and a lawsuit in New York Supreme Court for a judgment in the nature of prohibition, see Fiber Optek Interconnect Corp. v. N.Y.S. Comm'r of Labor, Index No. 5942/2003 (N.Y. Sup. Ct. filed Dec. 3, 2004). Also during the pendency of the proceedings, Pascazi caused Fiber Optek to go into bankruptcy, see In re Fiber Optek Interconnect Corp., No. 05-30045-cgm (Bankr. S.D.N.Y. filed Feb. 16, 2005), and moved the bankruptcy court to hold the NYDOL in contempt for continuing with the administrative hearings purportedly in violation of the automatic bankruptcy stay, see In re Fiber Optek Interconnect Corp., Nos. 09-cv-8827, 09-cv-9123, ECF No. 13 (S.D.N.Y. Sept. 28, 2010). All of Pascazi's attempts to delay or enjoin the administrative hearings failed.

The Determinations found that Fiber Optek had paid workers less than the applicable prevailing wages on seven of the eight³ projects in violation of the PWL. (Determination 1 app. at 23-25; Determination 2 app. at 14.) Accordingly, the Determinations found Fiber Optek liable for the total amount of unpaid wages on certain projects, plus statutory interest at 16% from the date of each underpayment. (Determination 1 app. at 23-25; Determination 2 app. at 14.) The Determinations also found that Fiber Optek's violation was "willful" because the Bureau advised Pascazi personally of the proper employee classifications and applicable wage rates, but Pascazi disregarded the advice. (Determination 1 app. at 11.) It was further established that Fiber Optek's certified payroll records falsely reported a rate that was different than the rate actually paid to individuals. (Id. app. at 19.) The Determinations found that Pascazi managed the offices and books of Fiber Optek, made hiring and firing decisions, set workers' pay rates, and wasresponsible for verifying the accuracy of time cards. (Id. app. at 10; Determination 2 app. at 6-7.)

At the conclusion of the administrative proceedings, Pascazi initiated a proceeding under Article 78 of the New York Civil Practice Law and Rules ("CPLR") to review the Determinations (the "Article 78 proceeding"). See Pascazi v. Gardner, 966 N.Y.S.2d 528 (App. Div.), appeal dismissed, 996 N.E.2d 907 (N.Y. 2013). Pascazi raised a wide range of arguments at the Article 78 proceeding including that:

• the federal Telecommunications Act preempts the PWL;

• Pascazi was denied a constitutional right because the FCC was the only tribunal that could hear his preemption argument based upon the Telecommunications Act;

• the federal Labor Management Relations Act (the "LMRA") preempts the PWL;

• the PWL violates the Dormant Commerce Clause;

• Pascazi did not receive due process because the hearing officer purportedly applied a "substantial evidence" standard;

• Pascazi did not receive due process because the hearing officer was substituted;

• there was insufficient evidence to support the Determinations;

• the proceedings were untimely;

• the interest award was arbitrary and capricious because the Determinations failed to set forth precise calculations;

• certain projects were nonpublic projects to which the PWL does not apply.

(See Kupferberg Decl. Ex. C, ECF No. 18-3.)

The Appellate Division rejected Pascazi's arguments and confirmed the Determinations, see Pascazi, 966 N.Y.S.2d at 532, Pascazi appealed, and the New York Court of Appeals summarily dismissed the appeal on the ground that no substantial constitutional question was directly involved, see Pascazi, 996 N.E.2d at 907.

The Commissioner has not yet sought to enforce the Determinations against Pascazi. Such enforcement is governed by N.Y. Labor Law § 220-b(2)(g), which provides:

When a final determination has been made in favor of a complainant and the contractor or subcontractor found violating this article has failed to make paymentas required . . . the fiscal officer[⁴] may file a copy of the order of the fiscal officer containing the amount found to be due with the county clerk of the county of residence or place of business of any of the following:

. . .

(ii) . . . any of the five largest shareholders of the contractor or subcontractor, as determined by the fiscal officer; or

(iii) any officer of the contractor or subcontractor who knowingly participated in the violation of this article.

N.Y. Labor Law § 220-b(2)(g). Such a filing has the "full force and effect of a judgment duly docketed in the office of such clerk" and can be enforced pursuant to the CPLR provisions for enforcing money judgments. Id.

Pascazi seeks to enjoin prospectively enforcement of the Determinations against him. His First Amended Complaint asserts numerous purported bases for his requested relief, styled as four "counts." (See Am. Compl. ¶¶ 94-115.) Count 1 sounds in statutory construction. It argues that § 220-b(2)(g) should be construed such that it excludes from enforcement past shareholders who no longer hold shares of the contractor. (Id. ¶¶ 94-97.) Count 2 argues that enforcement of the Determinations against Pascazi would violate the Due Process Clauses of the U.S. and N.Y.S. Constitutions because of the lack of pre-deprivation process, vagueness, and overbreadth. (Id. ¶¶ 98-104.) Count 3 argues that enforcement would impose upon Pascazi a sanction in violation of the Excessive Fines Clauses of the U.S. and N.Y.S. Constitutions. (Id. ¶¶ 105-12.) Count 4 asserts a cause of action under 42 U.S.C. § 1983 for the aforementioned purported constitutional violations. (Id. ¶¶ 113-15.) Finally, Pascazi's opposition papers assert the additional claims not raised in the First Amended Complaint that the purported use of a "substantial evidence" standard during the administrative hearings denied him due process (Pl.'s Opp. at 24-25) and that the PWL is preempted by the Employee Retirement Income Security Act ("ERISA") (id. at 11-15).

STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must provide grounds upon which their claim rests through "factual allegations sufficient 'to raise a right to relief above the speculative level.'" ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, the complaint must allege "enough facts to state a claim to relief that is plausible on its face." Starr v. Sony BMG Music Entm't, 592 F.3d 314, 321 (2d Cir. 2010) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In applying this standard, a court should accept as true all well-pled factual allegations, but should not credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." Id. A court should give "no effect to legal conclusions couched as factual allegations." Port Dock & Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117, 121 (2d Cir. 2007) (citing Twomblv, 550 U.S. at 555).

DISCUSSION

All of Pascazi's claims must be dismissed because they are barred by res judicata, and, in the alternative, because they are wholly lacking in merit.

I. Res Judicata⁵

Under the full faith and credit doctrine, federal courts must accord final...