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D. Russo Inc. et al v. Jeffrey Chiesa et al

May 16, 2013

D. RUSSO INC. ET AL.,
PLAINTIFFS,
v.
JEFFREY CHIESA ET AL., DEFENDANTS.



The opinion of the court was delivered by: Chesler, U.S.D.J.

OPINION

This matter comes before the Court on two motions to dismiss the Amended Complaint for failure to state a valid claim for relief, pursuant to Federal Rule of Civil Procedure 12(b)(6), one by Defendant Jeffrey Chiesa ("Chiesa"), Attorney General of the State of New Jersey, and one by Defendants Daniel Antonelli, Suzette Cavados, Manuel Figeuiredo, Joseph Florio, Kevin Kalendek, Ronald Manzella, Richard Milanda, Clifton People, Anthony Terrezza, the Township of Union Police Department, and the Township of Union (collectively, the "Township"). These motions have been opposed by Plaintiffs D. Russo Inc. t/a "H22," Kevin Hickey ("Hickey"), and Daniel Russo (collectively, "Plaintiffs"). For the reasons stated below, the motions will be granted in part and denied in part.

This case arises from a long-running dispute between Plaintiffs, an adult entertainment business known as "Hot 22" which operated in the Township of Union, New Jersey and its owners, and the Township, which has tried to close Hott 22 down, contending that its operation violates a New Jersey statute, N.J.S.A. § 2C:34-7. Prior litigation over this issue proceeded in New Jersey state court for years until it reached its conclusion in 2011. The Amended Complaint alleges that, on April 13, 2012, members of the Township of Union Police Department shut down Hott 22. Shortly thereafter, Plaintiffs filed the Complaint initiating this action, followed by an Amended Complaint.

The Amended Complaint asserts that it concerns events which occurred on or about April 13, 2012, when officers from the Township of Union Police Department closed down H22 (the "Closure") on the basis that it violated N.J.S.A. § 2C:34-7 (the "Act"). The Amended Complaint asserts ten counts: 1) the Act deprives Plaintiffs of their constitutionally-protected rights, in violation of 42 U.S.C. § 1983; 2) the Act should be applied using a "walking door-to-door standard," and this Court should determine that, under this standard, Hott 22 has not violated the Act; 3) the Closure was an unlawful search and seizure; 4) the Closure violated Plaintiffs' rights to due process of law; 5) the Closure was a taking in violation of the Fifth Amendment; 6) the Act, as applied, violates the equal protection clause; 7) a December 2011 Township ordinance change, regarding buffer zone requirements, was an unconstitutional ex post facto law; 8) the Act, as applied, is an unconstitutional ex post facto law; 9) the Act, as applied, violates Plaintiffs' rights to free speech; and 10) the Township's restaurant licensing "ordinance scheme" is void for vagueness.

STANDARD OF REVIEW

I. Motion To Dismiss Under Rule 12(b)(6)

In deciding a motion to dismiss pursuant to Rule 12(b)(6), courts must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). A Rule 12(b)(6) motion to dismiss should be granted only if the plaintiff is unable to articulate "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007). "The defendant bears the burden of showing that no claim has been presented." Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005).

"Federal Rule of Civil Procedure 8(a)(2) requires only 'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Twombly, 127 S. Ct. at 1964 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 127 S. Ct. at 1964-65 (internal citations omitted); see also FED. R. CIV. P. 8(a)(2). "Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 1965 (internal citations omitted).

Factual allegations must be well-pleaded to give rise to an entitlement to relief:

[A] court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009).

In reviewing a motion to dismiss, pursuant to Rule 12(b)(6), a court may consider the allegations of the complaint, as well as documents attached to or specifically referenced in the complaint, and matters of public record. Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 259 (3d Cir. 1998); see also 5B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure: Civil 3d § 1357 (3d ed. 2007). "Plaintiffs cannot prevent a court from looking at the texts of the documents on which its claim is based by failing to attach or explicitly cite them." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997).

The Supreme Court has characterized dismissal with prejudice as a "harsh remedy." New York v. Hill, 528 U.S. 110, 118 (2000). Dismissal of a count in a complaint with prejudice is appropriate if amendment would be inequitable or futile. Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004). "When a plaintiff does not seek leave to amend a deficient complaint after a defendant moves to dismiss it, the court must inform the plaintiff that he has leave to amend within a set period of time, unless amendment would be inequitable or futile." Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002).

DISCUSSION

Defendants move to dismiss the Amended Complaint on a number of grounds, including that this action is barred by res judicata and New Jersey's entire controversy doctrine. This Court finds that these arguments hit the mark, but only as to a subset of the claims in the Amended Complaint.

There were some unusual aspects to the briefing of these motions. Both moving briefs filed by Defendants argue that the Amended Complaint should be dismissed pursuant to New Jersey's entire controversy doctrine. Plaintiff's opposition brief did not address the entire controversy doctrine. Chiesa filed a reply brief, however, which treats Plaintiffs' opposition brief as if it did address the entire controversy doctrine. Plaintiffs then, on March 6, 2013, filed a letter contending that Defendants had raised the entire controversy doctrine for the first time in their reply, seeking leave to file a sur-reply so that they might address this new argument. This Court granted Plaintiffs leave to file a sur-reply, not because they were correct that Defendants raised the entire controversy doctrine for the first time on reply, but because this Court considered it ...


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