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Major Tours, Inc., et al v. Michael Colorel

June 29, 2011

MAJOR TOURS, INC., ET AL.,
PLAINTIFFS,
v.
MICHAEL COLOREL, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Jerome B. Simandle

OPINION

SIMANDLE, District Judge:

Table of Contents

I. Introduction............................................3

II. Background..............................................5

III. Standard of Review......................................9

IV. Statute of Limitations.................................10

A. Relation back.....................................11

B. Continuing violation doctrine.....................12

C. Discovery rule....................................18

D. Consequences of these findings....................20

V. Equal Protection Claims Against State Defendants........22

A. Evidence of knowledge of owners' race.............25

B. Evidence of differential treatment based on race..27

C. False violations and forced impound...............34

D. Scope of potential liability......................38 2

VI. Detention of Bus 203...................................41

A. Conversion........................................44

B. § 1981............................................48

C. Conspiracy........................................51

VII. NJCRA Claims..........................................55

A. Due process.......................................55

B. Criminal prohibitions.............................57

C. Equal Protection..................................58

VIII. Cross-claims of Garage Defendants.....................59

A. Cross-claim I.....................................59

B. Cross-claim II....................................62

IX. Experts................................................64

A. McCombs...........................................64

B. Levinson..........................................68

C. Tinari............................................70

X. Motion to Seal.........................................74

XI. Conclusion.............................................75

I. INTRODUCTION

This case involves allegations of racial discrimination in New Jersey's system of commercial bus safety inspections of tour buses in Atlantic City, New Jersey, as well as allegations regarding the improper impounding of a particular bus. Plaintiffs are six African American owned bus companies and their owners who have operated such tour buses during the years 2000 through 2007. They claim there is racial disparity in the selection of buses for inspection, decisions to issue citations for bus safety violations, and decisions to impound buses ordered to be taken out of service when they fail inspection at the Atlantic City site. This Court previously dismissed some of Plaintiffs' claims, and consequently the action is now proceeding against two state officials involved in the inspection system, Vincent Schulze and Michael Calorel ("State Defendants"), and a repair shop and its owner who Plaintiffs allege are involved in the discrimination, Jimmy's Lakeside Garage and James Restuccio ("Garage Defendants") and who Plaintiffs allege impounded one of Plaintiffs' buses for two years. A more complete description of this lengthy and contentious litigation appears in Major Tours, Inc. v. Colorel, 720 F. Supp. 2d 587 (D.N.J. 2010).*fn1

The matter is before the Court on several motions. The State Defendants move for summary judgment as to Plaintiffs' claims against them [Docket Item 365], and move for summary judgment as to the Garage Defendants' cross-claims. [Docket Item 357.] The Garage Defendants move for summary judgment as to Plaintiffs' claims against them, [Docket Item 358], and cross-move for summary judgment as to their cross-claims against the State Defendants. [Docket Item 386.] Additionally, there are also three motions to strike expert reports: Plaintiffs' motion to preclude the testimony of the State Defendants' racial profiling expert, [Docket Item 354], and the Garage Defendants' and State Defendants' motions to strike the testimony of Plaintiffs' damages experts. [Docket Item 355 & 356.] Finally, Plaintiffs move to seal certain evidence attached to their opposition to the State Defendants' motion for summary judgment [Docket Item 394].

II. BACKGROUND

As set forth in this Court's Opinion of June 22, 2010, this case principally involves the enforcement of New Jersey's Bus Safety Compliance Act, N.J. Stat. Ann. § 48:4-2.1, legislation that created a system of inspections to promote vehicle safety. Major Tours, Inc. v. Colorel, 720 F. Supp. 2d 587, 593 (D.N.J. 2010). Under the Act, officers of New Jersey's Commercial Bus Inspection Unit (CBIU) can direct any bus operated in New Jersey to immediately drive to a designated facility for inspection.

N.J. Admin Code § 16:53A-6.1. Buses discovered to have a mechanical condition that would likely cause an accident or a breakdown, a so-called "out-of-service violation," may be required to unload passengers, to be taken out of service, and not permitted to operate in New Jersey until the conditions have been repaired. The statute specifically describes the nature and permissible duration of the impound:

The vehicle may be held or impounded until appropriate repairs are made on-site or until towed by the owner or operator to an appropriate repair facility, maintenance garage or otherwise, so that repairs of all bus safety out-of-service violations can be made. The vehicle shall not be operated in this State until the defects are remediated and such remedial action is either certified or approved by the department.

N.J. Stat. Ann. § 48:4-2.1(h). Additionally, the bus company is subject to civil penalties for each violation. N.J. Stat. Ann. § 48:4-2.1(f).

The Bus Safety Compliance Act does not provide for how buses are to be selected for inspection. According to the State, its policy is that the buses are to be chosen for inspection based on sequential selection (e.g., every third bus), visible or otherwise obvious defects (e.g., bald tires), or past inspection data contained in a database of bus safety information. (See, e.g., State Defs.' Docket Item 369 Ex. 11 ("RSIVL dated 8/20/04").)*fn2

Plaintiffs are six African American owned and operated bus companies and their individual owners: Charles Major and Major Tours, Inc., Victoria Daniels and M & M Tours, James Wright and JW Auto, Inc., Glen Ragin, Sr. doing business as Jamm Tours, Robert Allen, and Carl Revels doing business as CMT Express. They offer bus tours between Pennsylvania and Atlantic City, New Jersey. Plaintiffs allege that the State Defendants ignored the race-neutral inspection processes and improperly targeted their buses, and that Defendants selectively enforced the safety laws against them out of racial animus toward the owners of the bus companies. The discriminatory conduct allegedly includes more frequent inspections, heightened scrutiny, and unwarranted violations and impound orders, as alleged in the Fourth Amended Complaint.

Plaintiffs also allege that the State Defendants discriminated against them by requiring towing to a repair shop instead of allowing on-site repair. The inspectors allegedly required the buses to be towed to Jimmy's Lakeside Garage, which allegedly charged them above the prevailing market rates and subjected them to verbal abuse. Charles Major and Major Tours, Inc. also complain of a particular incident in which a bus owned by Major Tours and operated by M & M Tours, Bus 203, was improperly detained at Jimmy's for two years.

The initial complaint was filed by Charles Major and Major Tours, Inc., as well as Victoria Daniels and M & M Tours on June 15, 2005. After the first complaint was filed, the parties conducted nearly four contentious years of discovery. During this period, the initial Plaintiffs amended the complaint several times adding additional Plaintiffs, among other changes.

In its June 22, 2010 Opinion, this Court dismissed on sovereign immunity grounds Plaintiffs' claims against state entities, claims for damages against Schulze and Calorel in their official capacities, and state law claims for injunctive relief. Major Tours, 720 F. Supp. 2d at 603. The Court found the factual allegations contained in the Third Amended Complaint to be insufficient to state several of the claims, including claims as to the supervisory officials previously named, claims based on federal procedural and substantive due process deprivations, claims under the dormant commerce clause and for violation of the right to interstate travel, and the conversion claim as against the State Defendants. Id. at 605-610.

The Fourth Amended Complaint, filed to align the pleadings with the June 2010 Opinion, includes six counts. [Docket Item 330.] Count I is a claim pursuant to 42 U.S.C. § 1983 arguing that the State Defendants' racially discriminatory conduct violated Plaintiffs' equal protection rights. Count II is a claim pursuant to 42 U.S.C. § 1981 arguing that the Garage Defendants interfered with Major Tours and M & M Tours's rights to freedom of contract by illegally impounding Bus 203 for almost two years for racially discriminatory reasons. Count III is a conspiracy claim against the State and Garage Defendants pursuant to 42 U.S.C. § 1985(3) based on the § 1983 claim. Count IV is a claim pursuant to the New Jersey Civil Rights Act (NJCRA), N.J. Stat. Ann. § 10:6-2(c),(e) arguing that all of the Defendants deprived Plaintiffs of their due process rights and equal protection rights under the N.J. Constitution, and violated certain criminal prohibitions against police racial profiling (N.J. Stat. Ann. § 2C:30-5(d)) and official misconduct (N.J. Stat. Ann. § 2C:30-6(a), 7(a)). Claim V is a claim for conversion under the common law of New Jersey against the Garage Defendants based on the alleged unlawful seizure of Bus 203. Finally, Count VI is a claim of civil conspiracy against all Defendants declaring that "Defendants agreed among themselves and with others to commit all the foregoing acts."

III. STANDARD OF REVIEW

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" only if it might affect the outcome of the suit under the applicable rule of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment will not be denied based on mere allegations or denials in the pleadings; instead, some evidence must be produced to support a material fact. Fed. R. Civ. P. 56(c)(1)(A); United States v. Premises Known as 717 S. Woodward Street, Allentown, Pa., 2 F.3d 529, 533 (3d Cir. 1993). However, the court will view any evidence in favor of the nonmoving party and extend any reasonable favorable inferences to be drawn from that evidence to that party. Hunt v. Cromartie, 526 U.S. 541, 552 (1999).

Where the nonmoving party bears the burden of persuasion at trial, the moving party may be entitled to summary judgment merely by showing that there is an absence of evidence to support an essential element of the nonmoving party's case. Fed. R. Civ. P. 56(c)(1)(B); Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

IV. STATUTE OF LIMITATIONS

Plaintiffs Charles Major and Victoria Daniels (and their respective companies) filed the original Complaint on June 15, 2005. The remaining Plaintiffs - James Wright, Glen Ragin, Sr., Robert Allen, and Carl Revels (and their respective companies) - were added by amendment, with the motion to amend having been filed on April 17, 2006. With the exception of Ms. Daniels, whose company (M & M Tours) did not exist before 2003, Plaintiffs complain of discriminatory incidents ranging from 2000 through 2007.

The parties agree that New Jersey's two-year statute of limitations on personal injury actions, N.J. Stat. Ann. § 2A:14-2, applies to all of Plaintiffs' damages claims based on racial profiling. Generally speaking, a plaintiff must file a claim within the prescribed limitations period for each injury-causing act from which they seek redress. Wells v. Rockefeller, 728 F.2d 209, 217 (3d Cir. 1984). Plaintiffs maintain that the April 17, 2006 addition of several Plaintiffs relates back to the June 15, 2005 Complaint, and that the incidents from January 1, 2000 through June 15, 2003 are actionable under the continuing violation doctrine and the discovery rule.

A. Relation back

Rule 15(c) of the Federal Rules of Civil Procedure does not directly contemplate the addition of plaintiffs to an existing action, but courts have applied the basic principles of that rule to the addition of plaintiffs. Nelson v. County of Allegheny, 60 F.3d 1010, 1014 n.7 (3d Cir. 1995) (noting that the Committee Note to the 1966 Amendment states that the attitude taken in revised Rule 15(c) toward change of defendants extends by analogy to amendments changing plaintiffs). The Rule provides that an amendment to add defendants can relate back to the date of the original complaint if any new claims or defenses "arose out of the conduct, transaction, or occurrence set out - or attempted to be set out - in the original pleading," and if within the service period the defendant(s) "(i) received such notice of the action that it will not be prejudiced in defending on the merits; and

(ii) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity." Rule 15(c)(1)(C), Fed. R. Civ. P.

Here, even if Defendants received enough notice to avoid prejudice by Plaintiffs alleging a widespread practice, Plaintiffs' argument fails because they have not demonstrated "a mistake concerning the identity of the proper party." Id. at 1014 (quoting Rule 15(c), Fed. R. Civ. P.). Although the caption of the initial complaint filed in this case included the phrase "and all others similarly situated," this case was not otherwise pleaded or prosecuted as a class action, and nothing in the complaint suggested the identities of these later-added Plaintiffs or gave notice that they would be bringing these claims. When new plaintiffs were unaware of their rights, then they can assert equitable tolling, as Plaintiffs do in this case as discussed below. But otherwise, unless a plaintiff can meet the conditions of Rule 15(c), defendants are entitled to their reliance on the fact ...


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