Town of Newburgh v. Newburgh EOM LLC

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TOWN OF NEWBURGH, NEW YORK, Plaintiff, v. NEWBURGH EOM LLC, NEWBURGH EOM LLC d/b/a CROSSROADS HOTEL, and CROSS ROADS HOTEL, Defendants.

No. 23-CV-4212 (CS)

United States District Court, S.D. New York

April 8, 2024

Appearances:

Jeffrey D. Sherwin

Nicholas J. Berwick

MacVean, Lewis, Sherwin & McDermott, P.C.

Middletown, New York

Counsel for Plaintiff

Todd E. Soloway

Todd B. Marcus

Jacob B. Orgel

Pryor Cashman LLP

New York, New York

Counsel for Defendants

OPINION & ORDER

CATHY SEIBEL, U.S.D.J.

Before the Court is the motion of Defendant Newburgh EOM LLC, also sued herein as the Cross Roads Hotel (the “Hotel” or “Defendant”), to stay the Court's order of remand dated January 23, 2024, (ECF No. 36 (the “Remand Order”)), pending the outcome of the Hotel's appeal of that Order to the Second Circuit. (ECF No. 38.) For the reasons stated below, the motion is DENIED.

I. BACKGROUND

Plaintiff Town of Newburgh (the “Town” or “Plaintiff”) sued the Hotel in New York State Supreme Court, Orange County, on May 12, 2023, asserting violations of the Town Building Construction Code and Town Municipal Code arising out of a plan to use the Hotel to house asylum seekers for four months. (See ECF No. 4-1.) The Hotel timely filed a notice of removal on May 21, 2023, asserting federal question jurisdiction pursuant to the “arising under” doctrine of 28 U.S.C. § 1331 that is incorporated into 28 U.S.C. § 1441. (See ECF No. 4 ¶¶ 521.) On June 12, 2023, the Hotel filed an Amended Notice of Removal, (ECF No. 20 (the “ANOR”)), asserting that removal was also proper as a civil rights case under 28 U.S.C. § 1443(1), (see id. ¶¶ 12-31). On June 23, 2023, the Town moved to remand the action to state court. (ECF No. 29.) On January 23, 2024, I granted the motion. (Remand Order.) The Hotel filed a Notice of Appeal on February 5, 2024, (ECF No. 37), and filed the instant motion seeking a stay of the Remand Order pending appeal on February 27, 2024, (ECF No. 38), the same day that it filed its appellate brief with the Second Circuit, (see ECF No. 39 at 1 n.1). On March 1, 2024, I set a briefing schedule, (see ECF No. 45), and the instant motion is now fully briefed. At the Hotel's behest, the Second Circuit has ordered an expedited briefing schedule, (see 2d Cir. Case No. 24-328, ECF No. 40.1), and the appeal will be fully briefed by May 13, 2024, (see id.; ECF No. 50 (“Hotel's Reply”) at 1 n.2).

II. LEGAL STANDARD

A stay pending appeal is “not a matter of right, even if irreparable injury might otherwise result,” but rather is “a discretionary determination dependent on the specifics of the matter before the court.” Leroy v. Hume, 563 F.Supp.3d 22, 25 (E.D.N.Y. 2021) (citing Nken v. Holder, 556 U.S. 418, 433-34 (2009)).^[1] “The party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion,” and the court considers four factors to determine if that burden has been met: “(1) whether the stay applicant has made a strong showing that [it] is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.” Nken, 556 U.S. at 433-34; see U.S. S.E.C. v. Daspin, 557 Fed.Appx. 46, 47-48 (2d Cir. 2014) (summary order); Leroy, 563 F.Supp.3d at 25-26; Strougo v. Barclays PLC, 194 F.Supp.3d 230, 233 (S.D.N.Y. 2016); Sutherland v. Ernst & Young LLP, 856 F.Supp.2d 638, 640 (S.D.N.Y. 2012). “The degree to which a factor must be present varies with the strength of the others;” put another way, “more of one factor excuses less of the other.” Daspin, 557 Fed.Appx. at 48; see Strougo, 194 F.Supp.3d at 233 (“Courts have treated these factors like a sliding scale”). But the first two factors - the movant's likelihood of success on the merits and whether the movant will suffer irreparable injury absent a stay - are the “most critical” factors. Nken, 556 U.S. at 434; see Daspin, 557 Fed.Appx. at 48; Strougo, 194 F.Supp.3d at 233. The burden on the moving party to show that a stay is justified under the circumstances is a heavy one. See Usherson v. Bandshell Artist Mgmt., No. 19-CV-6368, 2020 WL 4228754, at *1 (S.D.N.Y. July 22, 2020); Vista Food Exch., Inc. v. Lawson Foods, LLC, No. 17-CV-7454, 2019 WL 6498068, at *1 (S.D.N.Y. Dec. 3, 2019).

III. DISCUSSION

The Hotel appealed the Remand Order under 28 U.S.C. § 1447(d), (see ECF No. 39 at 1), which permits a party to appeal when the case was originally removed as a civil rights case under 28 U.S.C. § 1443(1), see 28 U.S.C. § 1447(d), and it requests a stay pending that appeal pursuant to Federal Rule of Appellate Procedure Rule 8(a), (see ECF No. 40 (“Hotel's Mem.”) at 5-7).^[2]Applying the above standards, I find that the Hotel has not carried its heavy burden to show that such a stay is warranted.

A, The Hotel Has Not Made a Strong Showing of Success on the Merits

To satisfy the first factor, “the appellant must demonstrate a substantial showing of likelihood of success, not merely the possibility of success, because the appellant must convince the reviewing court that the lower court . . . has likely committed reversible error.” Blossom S., LLC v. Sebelius, No. 13-CV-6452L, 2014 WL 204201, at *3 (W.D.N.Y. Jan. 17, 2014); see U.S. S.E.C. v. Citigroup Glob. Mkts. Inc., 673 F.3d 158, 163 (2d Cir. 2012) (“We first turn to whether [the movant] ha[s] a strong likelihood of success on the merits in [its] effort to overturn the court's ruling.”); Vista Food Exch., 2019 WL 6498068, at *1 (factor did not support granting stay where movant did not “ma[ke] a strong showing that it is likely to prevail on the merits on appeal”); Nat. Res. Def. Council, Inc. v. U.S. Food & Drug Admin., 884 F.Supp.2d 108, 122 (S.D.N.Y. 2012) (“[O]ft-repeated standard indicates that an applicant must ‘make a strong showing that [it] is likely to succeed on the merits.'”) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)); see also Strougo, 194 F.Supp.3d at 233 (“demonstrating likelihood of success on the merits requires more than a mere possibility of relief”).

The Hotel raises several arguments regarding its likelihood of success on the merits. First, it argues that the Court erred by failing to accept as true facts alleged in the ANOR that the Hotel contends satisfy the standard for removal under 28 U.S.C. § 1443(1). (See Hotel's Mem. at 5-7.) For example, the Hotel in its brief contends that the ANOR alleged that the Town “act[ed] in furtherance of the Executive Order issued by Orange County (the ‘EO')” by commencing “litigation to punish [the Hotel] for providing accommodations to Asylum Refugees,” (id. at 6-7), “conducted a sham investigation of the Hotel . . . and used the results of that investigation as a pretext to claim a violation of local building and zoning codes,” (id. at 7), “commenced the State Action to punish [the Hotel] and Asylum Refugees for exercising their respective rights under Title II [of the 1964 Civil Rights Act (‘Title II'), 42 U.S.C. § 2000a et seq.],” (id.), and “obtained a [temporary restraining order (‘TRO')]” that, among other things, “prohibit[s] [the Hotel] from operating in a manner which [the Town] baselessly termed a violation of the Hotel's certificate of occupancy, but which includes providing accommodations to Asylum Refugees,” (id.). But these allegations do not appear in the ANOR, which says nothing about an investigation or punishment and does not characterize as baseless the Town's finding of a violation of the Hotel's certificate of occupancy.

This leaves the allegations that the Hotel correctly alleges appear in the ANOR: “that, through the State Action, [the Town] is enforcing the object and purpose of the EO by pretextually and selectively prosecuting facially neutral zoning laws to enforce racially discriminatory policies in violation of federal laws”^[3] and that the “continued proceedings in the courts of New York State shall constitute a continued denial of [the Hotel's] civil rights conferred by Title II.” (Id.).

These allegations are conclusory, without supporting facts, and, as the Court originally determined, are insufficient to support removal under Section 1443(1). (See Remand Order at 10-15 (citing authority for proposition that reliance on mere conclusory allegations did not support removal under Section 1443(1)).) An appellant seeking a stay must “do more than simply reiterate arguments with which the court has already disagreed.” New York Life Ins. Co. v Singh, No. 14-CV-5726, 2017 WL 10187669, at *2 (E.D.N.Y. July 13, 2017). The Hotel does “little more than recite in conclusory fashion numerous points on which the Court has ruled against [it], apparently in the belief that quantity can substitute for quality. Mere conclusions, however, whether applied to one issue or many, do not constitute any kind of showing, let alone the requisite ‘strong showing.'” Motorola Credit Corp. v. Uzan, 275 F.Supp.2d 519, 520 (S.D.N.Y. 2003). Considering the ANOR as filed, rather than as exaggerated in the Hotel's brief, the Hotel's argument is that conclusory allegations of pretext and selective enforcement must be accepted as true. But that does not suggest any likelihood that it will succeed on the merits of its appeal, let alone a strong showing, in light of the case law to the effect that conclusory allegations of discriminatory motive do not suffice. See Moeller v. Rodriguez, No. 96-2237, 1997 WL 268588, at *1 (10th Cir. May 21, 1997) (“The second requirement [of Section 1443(1) removal] must be satisfied by specific allegations of fact.”) (citing 14A Wright et al., Federal Practice & Procedure § 3728, at 469 (2d ed. 1985)); ...