Best Payphones, Inc. v. Dobrin

Full title: BEST PAYPHONES, INC., Plaintiff, v. ALLAN DOBRIN, former Department of…

Court: UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Date published: Sep 27, 2019

410 F. Supp. 3d 457 (E.D.N.Y. 2019)

Opinion

01-CV-3934 (LDH) (ST) 01-CV-8506 (LDH) (ST) 03-CV-0192 (LDH) (ST)

2019-09-27

BEST PAYPHONES, INC., Plaintiff, v. Allan DOBRIN, former Department of Information Technology and Telecommunications (DoITT) Commissioner, Bruce Regal, former DoITT Acting Deputy Commissioner, Stanley Shor, DoITT Assistant Commissioner, Agostino Cangemi, DoITT Deputy Commissioner, Debra Samuelson, DoITT Deputy General Counsel, and the City of New York, Defendants.

LaSHANN DeARCY HALL, United States District Judge

MEMORANDUM AND ORDER

:

Plaintiff Best Payphones, Inc. filed these three consolidated actions against the City of New York (the "City"), Allan Dobrin, Bruce Regal, Stanley Short, Agostino Cangemi, and Debra Samuelson alleging First Amendment retaliation and unconstitutional conditions, violations of the Equal Protection Clause, and a conspiracy in violation of 42 U.S.C. § 1983, arising from the City's regulation of pay phones.¹ Plaintiff commenced the first of these actions by complaint filed June 7, 2001 (ECF No. 1, No. 01-CV-3934), and the operative third amended complaint was filed on August 20, 2010 (ECF No. 261, No. 03-CV-192.) ("TAC"). On July 29, 2015, Judge Gleeson referred the parties' anticipated cross-motions for summary judgment to Magistrate Judge Scanlon for a report and recommendation. On March 10, 2016, these cases were reassigned to this Court and, on April 7, 2016, the Court referred the anticipated summary-judgment motions to Magistrate Judge Tiscione for a report and recommendation.

1 A pay phone is "a usually coin-operated telephone." Merriam-Webster's Dictionary, https://www.merriam-webster.com/dictionary/pay% 20phone; "Pay phones. They require an arcane thing called ‘change’ in order to place a call." See Tanvi Misra, Why Some Places have Plenty of Pay Phones, Citylab, https://www.citylab.com/life/2014/11/why-some-places-still-have-plenty-of-pay-phones/382454/.

On September 13, 2018, Magistrate Judge Tiscione issued a report and recommendation ("R & R"), wherein he recommended that the Court grant summary judgment in favor of Defendants and against Plaintiff with three exceptions. (R & R, ECF No. 534.) First , he recommended that Plaintiff's First Amendment retaliation claim arising from Defendants' purported removal of Plaintiff's pay phones, issuance of fines against Plaintiff, and refusal to accept Plaintiff's franchise agreement be permitted to proceed to trial. (Id. at 1.) Second , he recommended that Plaintiff's unlawful-condition claim be permitted to proceed to trial. (Id. ) Third , Magistrate Judge Tiscione recommended denying Defendants' request for summary judgment with respect to Plaintiff's Monell claim, except as to Plaintiff's First Amendment retaliation claim against the City. (Id. at 2.)

Both parties filed lengthy objections.² Indeed, even a non-party filed an objection.³ Plaintiff objected that: (1) it was entitled to summary judgment on its unconstitutional-condition claim; (2) Magistrate Judge Tiscione improperly applied a public concern balancing test to its First Amendment claims; (3) even assuming the public concern balancing test applied, Plaintiff had adduced evidence that its conduct involved matters of public concern; (4) Magistrate Judge Tiscione erred in recommending dismissal of its Equal Protection claim; (5) Magistrate Judge Tiscione erred in recommending dismissal of its Monell claim; and (6) Magistrate Judge Tiscione erred by finding that certain of Defendants actions did not constitute retaliatory animus. (Best Payphones, Inc.'s Obj. R & R Issued by Mag. Judge Tiscione, Docket No. 534 Filed Sept. 13, 2018, ECF No. 540.) Defendants objected that: (1) Plaintiff's unconstitutional-condition claim was no longer a part of the case; (2) res judicata should have applied based on Plaintiff's July 2000 Article 78 proceeding; (3) Plaintiff failed to present sufficient evidence of retaliatory motive to support its First Amendment retaliation claim; (4) Plaintiff's First Amendment retaliation claims failed to satisfy the public-concern balancing test; and (5) Plaintiff failed to adduce sufficient evidence to support any claim for compensatory damages. (Municipal Defs.' Mem. Supp. R. 72 Obj. ("Defs.' Obj.") at 2-8, ECF No. 542.)

2 Not content with filing a twenty-seven-page objection and a thirty-page response to Defendants' objections, Plaintiff also, without leave, filed a patently untimely reply. (See ECF No. 548.) Plaintiff's basis for its untimely reply is that Plaintiff's counsel was on trial. Not only was Plaintiff not permitted to file a reply as of right, the Court finds its explanation for its belated reply unpersuasive. Therefore, the Court did not consider Plaintiff's reply brief. Holtz v. Rockefeller & Co. , 258 F.3d 62, 73 (2d Cir. 2001) ("A district court has broad discretion to determine whether to overlook a party's failure to comply with local court rules.").

3 By letter dated February 8, 2019, non-party Richard Marotte filed a letter seeking to interpose his own objections to the R & R. Given Marotte's pro se status, his letter will be construed as a request for leave to file an amicus curiae brief. His request, however, is denied. Concerned Area Residents for Environ. v. Southview Farm , 834 F. Supp. 1410, 1413 (W.D.N.Y. 1993) ("District Courts have broad discretion in deciding whether to accept amicus briefs."). And the circumstances under which an amicus brief is considered "desirable" are limited:

An amicus brief should normally be allowed when a party is not represented competently or is not represented at all, when the amicus has an interest in some other case that may be affected by the decision in the present case ... or when the amicus has unique information or perspective that can help the court beyond the help that lawyers for the parties are able to provide. Otherwise, leave to file an amicus brief should be denied.

Citizens Against Casino Gambling in Erie County v. Kempthorne , 471 F. Supp. 2d 295 (W.D.N.Y. 2007) (quoting Ryan v. Commodity Futures Trading Com'n , 125 F.3d 1062, 1063 (7th Cir. 1997) (Posner, J.)). The parties in this matter are represented ably by counsel. Moreover, Mr. Marotte does not appear to be in possession of any unique information or perspective that would assist the Court. Instead, Mr. Marotte claims that the Court's decision could impact his own challenge to the City's regulatory scheme for public pay telephones ("PPT"). Further, while Mr. Marotte claims that his case will be affected by the Court's decision, his claims challenging the City's 2013 public bidding process for franchises to install communications hotspots on public sidewalks, which appear to have been dismissed, do not appear to be similar to the First Amendment claims raised here. See Order, Marotte v. City of New York , No. 16-CV-8953, 2019 WL 1033798, ECF No. 135 (S.D.N.Y. March 5, 2019).

The Court reviews any portion of the R & R that has been objected to de novo. See Fed. R. Civ. P. 72(b)(3) ; 28 U.S.C. § 636(b)(1)(C). As to the balance, "the district court need only satisfy itself that there is no clear error on the face of the record." Estate of Ellington ex rel. Ellington v. Harbrew Imps. Ltd. , 812 F. Supp. 2d 186, 189 (E.D.N.Y. 2011) (quoting Urena v. New York , 160 F. Supp. 2d 606, 609-10 (S.D.N.Y. 2001) (internal quotation marks and citations omitted)).

BACKGROUND ⁴

4 The following facts are drawn from the undisputed facts identified by Magistrate Judge Tiscione. Neither party specifically objected to the R & R's statement of facts, with limited exceptions which will be addressed as necessary. The Court has reviewed the basis for the R & R's statement of facts and, finding no clear error, adopts those facts for purposes of this memorandum and order.

I. The Legislative and Regulatory Backdrop

In September 1995, the New York City Council enacted Local Law 68, establishing new regulations for pay phones. (R & R at 5.) Local Law 68 required entities wishing to install and operate pay phones to obtain franchises and permits. (Id. ) Because many pay phone owners had previously operated without such franchises and permits, Local Law 68 provided for an interim registry program to grandfather-in existing pay phone operators. (Id. at 5-6.) To register pursuant to the interim program, a pay phone owner was required to submit a list of its pay phones to the Department of Information Technology and Telecommunications ("DoITT") and to pay a fee. (Id. at 6.) The owner could continue operating those pay phones until he or she obtained the necessary franchise and permits, so long as the DoITT Commissioner did not object. (Id. ) A grandfathered-in right to operate could be terminated where: (1) the owner failed to respond to the DoITT Commissioner's solicitation; (2) the DoITT Commissioner determined not to award a franchise to the owner; or (3) the Franchise Concession Review Committee (the "FCRC") decided not to approve a proposed franchise agreement for the owner. (Id. ) Complicating the City's regulation of pay phones, in 1996, Congress enacted the Telecommunications Act (the "TCA"), which provided that state and local governments could not prohibit an entity from providing a telecommunications service with the exception that they could "require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis." See 47 U.S.C. §§ 253(a), (c).

II. Plaintiff's Application for a Franchise Agreement

Plaintiff owned unauthorized pay phones at the time that Local Law 68 was enacted. (R & R at 6-7.) Pursuant to Local Law 68, Plaintiff paid the requisite fees and submitted its registration forms, identifying 839 active pay phones. (Id. at 7.) On June 19, 1998, DoITT provided Plaintiff with a draft franchise agreement. (Id. ) On July 2, 1999, DoITT mailed a final draft of the franchise agreement to Plaintiff, noting that it was prepared to recommend that FCRC approve the final draft. (Id. ) DoITT also enclosed an acceptance letter which required a countersignature. (Id. ) Plaintiff's owner, Michael Chaite, signed the agreement on July 12, 1999, but included the following disclaimer: "I ... am prepared to sign the final agreement prepared by DoITT provided that all the provisions of said final agreement conform to all City, State and Federal laws. All rights reserved." (Id. ; Letter from Plaintiff to DoITT, ECF No. 485-3 at 105.)

On August 11, 1999, the FCRC approved the final format of the franchise agreement (the "FA") and approved DoITT to enter into such agreements with a number of companies, including Plaintiff. (R & R at 7.) The FA required operators of curb-line pay phones to pay ten percent of gross revenues, with operators of building-line pay phones to pay a flat fee, both subject to adjustment. (Id. ) Plaintiff received a final form of the FA and closing documents on August 13, 1999. (Id. at 8.) Plaintiff was required to execute the FA and submit the required closing documents by October 15, 1999.⁵ (Id. ) During the fall of 1999, Plaintiff and representatives of DoITT exchanged a number of letters, discussing the deadline applicable to the FA and Plaintiff's interest in selling his pay phones to a different operator. (Id. at 8-9.) By early 2000, Plaintiff had not executed the FA. (Id. at 9.) On January 13, 2000, DoITT informed Plaintiff that because it had not executed the FA or submitted the necessary closing documents, Plaintiff's request for a franchise would not be approved. (Id. at 10-11.) DoITT further stated that Plaintiff had until March 13, 2000, to: (1) enter into an agreement to sell its pay phones to a franchised pay phone owner; (2) remove its pay phones; or (3) enter into the FA and submit the required documentation. (Id. at 11.) DoITT warned Plaintiff that if it failed to comply with one of these alternatives, Plaintiff's pay phones would be subject to removal. (Id. )

5 This deadline was later extended to November 15, 1999. (R & R at 8.)

Following continued discussions between Plaintiff and the City, on March 13, 2000, an attorney for Plaintiff contacted the City to raise several of Plaintiff's objections to the FA and DoITT's process. (Id. at 12.) The parties met on March 20, 2000. (Id. at 12.) During the meeting, Plaintiff argued that the City was not charging fees in a competitively neutral manner and that the franchise fees were not "fair and reasonable" as required by the TCA. (See id. at 13-15.) In a letter provided to the City during the meeting, Plaintiff notified the City that Plaintiff had identified an interested buyer for its business and requested that DoITT provide documentation and information to permit an orderly sale. (Id. at 15.)

The City never responded to Plaintiff's requests from the March 20, 2000 meeting. (Id. at 16.) Instead, between May 8 and 10, 2000, the City removed twenty-three of Plaintiff's pay phones and issued notices of violations charging $23,000 in fines. (Id. ) A representative of the City indicated that the City had taken this action to provoke Plaintiff to comply with Local Law 68. (Id. )

On May 10, 2000, Plaintiff delivered to the City certain closing documents and an executed FA. (Id. ) Plaintiff had annotated the agreement to state that its execution was "under duress caused by the City's actions in removing its payphones ... and ... under protest of the City's authority ... which [Plaintiff] believes to be in violation of certain State and Federal laws." (Id. ) Plaintiff further stated that its execution of the agreement was not intended to constitute a waiver of any rights to challenge the agreement. (Id. ) On May 11, 2000, the City informed Plaintiff that it would not receive a franchise so long as Mr. Chaite was Plaintiff's owner. (Id. ) That same day, the City sent Plaintiff an agreement requiring Plaintiff to acknowledge that it had failed to timely submit the required documents and therefore was not entitled to franchise approval. (Id. at 16-17.) The agreement also proposed a means for Plaintiff to sell its pay phones, provided that Plaintiff consent to the removal of five pay phones a week until the sale was completed. (Id. at 17.) DoITT maintains that this counteroffer was made because Plaintiff failed to submit the FA by March 13, 2000, unilaterally altered the language of the agreement, and failed to submit the required closing documents. (Id. ) Plaintiff, on the other hand, maintains that it provided all required documentation. (Id. ) Plaintiff did not agree to the terms of the counteroffer, but requested that the City not remove any more of its pay phones until Plaintiff was able to sell its business. (Id. ) Plaintiff threatened legal action if DoITT continued to remove Plaintiff's pay phones. (Id. )

In June 2000, Plaintiff contacted DoITT to challenge DoITT's removal of Plaintiff's pay phones without notice. (Id. at 17-18.) In response, on June 19, 2000, DoITT Commissioner Dobrin informed Plaintiff that its pay phones were operating in violation of the law. (Id. at 18.) On August 4, 2000, Commissioner Dobrin sent Plaintiff a final notice that it was in violation of Local Law 68. (Id. ) On August 8, 2000, DoITT again contacted Plaintiff, informing it that while its pay phones were subject to removal, DoITT would consider limiting the removal of Plaintiff's pay phones, if Plaintiff provided evidence that it was completing a sale of its business. (Id. ) In response, Plaintiff provided a letter of intent by New York City Telecommunications, Inc. to acquire Plaintiff's assets. (Id. at 19.)

During the summer and fall of 2000, the parties participated in hearings before the Environmental Control Board (the "ECB") in connection with the $23,000 in fines that the City sought to collect from Plaintiff. (Id. ) Ultimately, an ECB administrative law judge determined that DoITT lacked the authority to fine Plaintiff, because only the FCRC, and not DoITT, had the authority to approve or disapprove a franchise. (Id. )

III. Litigation between the City and Plaintiff

On April 5, 2000, New Phone, a wholly-owned affiliate of Plaintiff, filed a suit against the City and certain payphone competitors (the "New Phone Litigation"). See Compl., New Phone Company, Inc. v. Indep. Payphone Ass'n of New York , 00-cv-2007 (E.D.N.Y. Apr. 5, 2000). New Phone alleged that, in violation of the TCA, DoITT had favored its competitors by providing advance notice that it would waive a $59 application fee. This action was dismissed, with the dismissal affirmed by the Second Circuit on December 7, 2009. See New Phone Company, Inc. v. City of New York , 355 F. App'x 501, 502-03 (2d Cir. 2009) (summary order).

On July 11, 2000, Plaintiff initiated an Article 78 proceeding against the City to direct DoITT to either: (1) grant Plaintiff a franchise; (2) permit Plaintiff to sell its assets and capital stock; or (3) if needed, permit Plaintiff to reapply for a franchise. (R & R at 20.) The Article 78 proceeding was ultimately dismissed on grounds of statute of limitations and untimely service. See Best Payphones, Inc. v. Dep't of Info. Tech. & Telecomm. , 5 N.Y.3d 30, 33-34, 799 N.Y.S.2d 182, 832 N.E.2d 38 (2005). This decision was affirmed by the New York Appellate Division and Court of Appeals. See Best Payphones, Inc. v. Dep't of Info. Tech. & Telecomm. , ––– A.D.3d ––––, 767 N.Y.S.2d 649, 650 (2003), aff'd 5 N.Y.3d 30, 799 N.Y.S.2d 182, 832 N.E.2d 38 (2005).

In the months that followed, the parties continued discussing a means of resolving their dispute. (R & R at 21-22.) DoITT repeatedly stated that it would only consider recommending an FA for Plaintiff or a purchaser of Plaintiff's business, if Plaintiff terminated all of its litigation against the City and executed the FA without any conditions. (Id. at 21.) Because Plaintiff would not agree to such terms, DoITT refused to approve any FA or sale. (Id. ) For example, in February 2001, DoITT indicated to U.S. Telco, a potential purchaser of Plaintiff's assets, that it would not approve a transfer because Plaintiff had not responded to DoITT's settlement proposal. (Id. at 22.) In August 2001, Plaintiff informed Universal Telecommunications ("Universal") that Universal's proposed purchase of Plaintiff's assets would not be approved because Universal had failed to pay required franchise fees. (Id. )

On August 9, 2001, DoITT demanded that Plaintiff either remove its pay phones or provide DoITT with written evidence that its pay phones were permitted or did not require permits. (Id. ) Plaintiff did not comply with the August 9, 2001 notice, and on August 23, 2001, DoITT removed another thirty-one of Plaintiff's pay phones, based on thirty-seven notices of violation. (Id. ) DoITT sought to enforce the notices of violation before the ECB. (Id. at 23.) An ECB administrative law judge once again found that DoITT lacked the authority to rescind the FCRC's approval of Plaintiff's franchise application, but that Plaintiff was precluded from asserting this defense because it had not included it in an Article 78 proceeding. (Id. ) Therefore, the administrative law judge sustained the notices of violation. (Id. )

On March 3, 2003, DoITT informed Plaintiff that it would permit Plaintiff to sell its pay phones to BAS Communications, Inc. ("BAS"), which Plaintiff ultimately did. (Id. )

DISCUSSION

I. Plaintiff's Unconstitutional Condition Claim

A. The TAC States an Unconstitutional Condition Claim

Under Federal Rule of Civil Procedure 8(a)(2), to state a claim, a plaintiff need only set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." As the Supreme Court explained in Skinner v. Switzer , "a complaint need not pin plaintiff's claim for relief to a precise legal theory. Rule 8(a)(2) of the Federal Rules of Civil Procedure generally requires only a plausible short and plain statement of the plaintiff's claim, not an exposition of his legal argument." 562 U.S. 521, 530, 131 S.Ct. 1289, 179 L.Ed.2d 233 (2011).

In this case, the complaint states that the FA "requir[es] any applicant for a payphone franchise to waive its rights to challenge DoITT's actions and City regulations both at the time of being approved for a franchise and prospectively without knowing what rights the City might choose to violate in the future." (TAC ¶ 102.) The complaint continues that the FA "provides in ¶ 2.3(b) that the person signing the agreement has the authority to bind the franchisee and that its attorney certifies that the FA when executed is a binding agreement against the franchisee. This amounts to a waiver of the inalienable right to challenge a mandatory franchise agreement." (Id. ¶ 104.) The complaint proceeds to allege that Plaintiff's claims arise under the First Amendment, referring back to these factual allegations, without expressly distinguishing between its retaliation and unconstitutional-condition claims. Plaintiff's "complaint easily satisfies the requirements of Rule 8(a) because it gives [Defendants] fair notice of the basis for [Plaintiff's] claims." Swierkiewicz v. Sorema N. A. , 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002).

Nonetheless, Defendants argue that Plaintiff's unconstitutional-condition claim was removed from the case by Plaintiff's amendment of the Second Amended and Supplemental Complaint (the "Second Amended Complaint"). (Defs.' Obj. at 2-8.) In support, Defendants point the Court to a comparison between the Second and Third Amended Complaints. (Defs.' Obj. at 3-5.) Paragraph 102 was amended as follows:⁶

6 The stricken through portion of the text indicates text that appeared in the Second Amended Complaint, but did not appear in the TAC.

102. The FA is further illegal and invalid in its [sic] numerous provisions requiring payment of unreasonable fees and fines imposed by 67 RCNY for violations of legal and illegal regulations, for imposing penalties without adequate concern for rights of procedural due process and equal protection of the laws, for allowing DoITT to take actions, including imposing penalties and promulgating regulations, in an anti-competitive and discriminatory manner and even in retaliation for the exercise of an entity's constitutional rights of free speech and redress of grievances, and for requiring any applicant for a PPT franchise to waive its rights to challenge DoITT's actions and City regulations both at the time of being approved for a franchise and prospectively without knowing what rights the City might choose to violate in the future.

(Id. at 3 n.1.) And Paragraph 104 was similarly amended:

104. The FA is illegal and invalid, inter alia , in that it provides in ¶2.3(b) that the person signing the agreement has the authority to bind the franchisee and that its attorney certifies that the FA when executed is a binding agreement against the franchisee. This amounts to a waiver of the inalienable right to challenge a mandatory franchise agreement and finds its fullest expression in 14.3.2 of the FA and the ancillary documents in the "closing package," whose purpose is to force the franchisee to execute just such a waiver of rights which the Second Circuit has determined cannot be required

of a franchisee and would be void even if it were executed.

(Id. ) Defendants argue that the clear import of these changes is that Plaintiff had withdrawn any First Amendment unconstitutional-condition claim. (Id. at 3-4.) Nonsense. If Plaintiff had intended to withdraw its First Amendment unconstitutional-condition claim, it would have additionally excised the portions of these paragraphs explicitly stating that the FA "require[ed] any applicant for a PPT franchise to waive its rights to challenge DoITT's actions and City regulations both at the time of being approved for a franchise and prospectively without knowing what rights the City might choose to violate in the future" and "amounts to a waiver of the inalienable right to challenge a mandatory franchise agreement ... which the Second Circuit has determined cannot be required of a franchisee and would be void even if it were executed." (TAC, ¶¶ 102, 104.) Admittedly, it is not patently clear why Plaintiff excised some words and not others from its complaint. What is clear, however, is that it did not excise the allegations supporting an unconstitutional condition claim.

Defendants further argue that subsequent events confirmed their understanding that no unconstitutional condition claim was stated. (Defs.' Obj. at 5-8.) These arguments are even less persuasive. First , Defendants cite an August 16, 2010 order from then-Magistrate Judge Carter in which he directed Plaintiff to make additional changes to ten completely different paragraphs in the complaint. (Id. at 5 n.2.) The fact that then-Magistrate Judge Carter instructed Plaintiff to change ten other paragraphs does not somehow indicate that the paragraphs cited above no longer state an unconstitutional-condition claim. Second , Defendants argue that Plaintiff's attempt to seek summary judgment in 2013 with respect to this very unconstitutional-condition claim somehow indicates that Plaintiff's complaint no longer states such a claim. (Id. at 5-6.) Defendants maintain that following Plaintiff's letter request to proceed with a motion for summary judgment regarding this claim, Defendants made the same argument they make now—that Plaintiff did not plead an unconstitutional-condition claim. (Id. ) Rather than moving to briefing on the issue, Plaintiff proposed further amending its complaint. (ECF No. 348.) Notably, Plaintiff's proposed amendments did not have anything to do with a First Amendment unconstitutional-condition claim. (Id. ) Instead, Plaintiff proposed amending to restate its claim that the FA violated the TCA. (Id. ) Defendants argue that by proposing to amend to add the TCA claim, "[P]laintiff in effect conceded that defendants were correct in asserting that the claim is not in the case." (Id. at 5-6.) But the fact that Plaintiff sought to add a TCA claim does not somehow indicate that Plaintiff no longer intended to prosecute a completely different claim. The simpler and more plausible explanation is that Plaintiff believed the complaint stated an unconstitutional-condition claim and therefore felt no need to further amend its complaint.⁷ B. The Merits of Plaintiff's Unconstitutional Condition Claim

7 Defendants also claim that Plaintiff's reference in the complaint to TCG New York, Inc. v. City of White Plains , in which the Second Circuit found a statutory violation of the TCA, but not a First Amendment or unconstitutional-condition violation, indicates that Plaintiff did not state an unconstitutional-condition claim. (Defs.' Obj. at 6.) But the fact that Plaintiff asserts that the FA violates the TCA does not preclude the FA from also violating the First Amendment. Further, Plaintiff appears to rely on the Second Circuit's finding in support of its assertion that Defendants could have no legitimate basis for requiring Plaintiff to enter into an unlawful agreement. (See Best Payphones, Inc.'s Response Municipal Defs.' R. 72 Obj. ("Pl.'s Resp.") at 8-10, ECF No. 545.)

While the Court finds that Plaintiff's unconstitutional condition claim remains in the case, the Court agrees with Magistrate Judge Tiscione's assessment that the parties failed to properly brief their arguments on the merits of the claim. Courts have applied different levels of scrutiny to such claims depending on the nature of the alleged unconstitutional condition. Compare Regan v. Taxation With Representation of Washington , 461 U.S. 540, 550, 103 S.Ct. 1997, 76 L.Ed.2d 129 (1983) (applying rational basis review to an unconstitutional condition challenge), with F.C.C. v. League of Women Voters of California , 468 U.S. 364, 395, 104 S.Ct. 3106, 82 L.Ed.2d 278 (1984) (striking down a federal funding restriction based on a First Amendment challenge because the government's "substantial interest" in the restriction could be "fully satisfied by less restrictive means that are readily available"). And neither Plaintiff nor Defendants even address the appropriate level of scrutiny to apply to the scheme at issue. As another court noted in this context, "determining the constitutionality of government subsidization of expression is one of the most frustrating tasks of the First Amendment." Legal Aid Society of Hawaii v. Legal Servs. Corp. , 961 F. Supp. 1402, 1412 (D. Haw. 1997) (quoting Martin H. Redish and Daryl Kessler, Government Subsidies and Free Expression , 80 Minn L. Rev. 543, 544 (1996) ). The issue is a complex one, worthy of thorough briefing.

The Court also notes that Defendants may have believed, in good faith, that the unconstitutional-condition claim was not part of this case. Indeed, Plaintiff's briefing of the matter, which muddled together the concepts of substantive due process, retaliation, and unconstitutional conditions certainly did not illuminate the issue. While the Court would not normally provide parties an additional bite at the apple, the Court agrees with Magistrate Judge Tiscione that the matter is worthy of proper briefing. Therefore, within thirty days of this memorandum and order, Plaintiff is directed to file a ten-page submission setting forth the appropriate standard for its unconstitutional-condition claim and the undisputed facts in support of that claim, citing only to specific paragraphs of undisputed facts within the parties' 56.1 statements. Defendants are directed to file a ten-page opposition, if any, thirty days following Plaintiff's submission, also citing only to specific paragraphs of undisputed facts within the parties' 56.1 statements. No reply brief shall be permitted. The failure to abide by the Court's instructions with respect to specific citations to 56.1 statements may result in the imposition of sanctions.

II. Res Judicata

To demonstrate that a claim is barred under the doctrine of res judicata, "a party must show that (1) the previous action involved an adjudication on the merits; (2) the previous action involved the parties or those in privity with them; and (3) the claims asserted in the subsequent action were, or could have been, raised in the prior action." Pike v. Freeman , 266 F.3d 78, 91 (2d Cir. 2001) (quoting Monahan v. New York City Dep't of Corr. , 214 F.3d 275, 284–85 (2d Cir. 2000) ). Magistrate Judge Tiscione found that Plaintiff's claims were not barred by res judicata because at the time Plaintiff initiated its Article 78 proceeding, it was not necessarily the case that Plaintiff could obtain the same damages as it could in a § 1983 suit, and therefore it could not have raised the same claims. (R & R at 29.) Specifically, in an Article 78 proceeding, a petitioner may only obtain damages that are "incidental to the primary relief," whereas there is no similar limitation on a § 1983 plaintiff. (Id. at 29-32.) Defendants argue that while this may have once been true, New York courts now permit "hybrid" Article 78 proceedings, which may be converted into broader actions. (Defs.' Obj. at 13-15.) Therefore, according to Defendants, because Plaintiff could have brought a hybrid action, but chose not to, its claims are barred.

Magistrate Judge Tiscione thoughtfully considered and rejected Defendants' argument. Specifically, he found that while hybrid proceedings have become more common, in July 2000, when Plaintiff initiated an Article 78 proceeding, they were not. (R & R at 32-33.) Indeed, Magistrate Judge Tiscione noted that such hybrid proceedings are not even available as of right, with New York courts frequently severing or dismissing claims for damages. (Id. ) Therefore, he concluded, it would be unjust to preclude Plaintiff from raising his claims in federal court on that basis.

In an effort to convince this Court that Magistrate Judge Tiscione's determination was in error, Defendants cite to a number of cases in which courts have permitted hybrid Article 78 proceedings or found such hybrid proceedings to have res judicata effect. (Defs.' Obj. at 13-14.) These cases are not helpful to Defendants. As an initial matter, most of these cases involved Article 78 proceedings occurring far more recently than Plaintiff's July 2000 proceeding. See O'Dette v. Fisher , No. 12-cv-2680, 2014 WL 6632470, at *6 (E.D.N.Y. Nov. 21, 2014) (Article 78 proceeding in 2013); Green Materials of Westchester v. Town of Cortlandt , No. 15-cv-3257, 2015 WL 9302838, at *2 (S.D.N.Y. Dec. 21, 2015) (Article 78 proceeding in 2012); Matter of Leadingage N.Y., Inc. v. Shah , 2014 N.Y. Slip Op. 32236(U), 2014 WL 4207061 (N.Y. Sup. August 13, 2014) (Article 78 proceeding in 2013); Loehr v. Admin. Bd. of Courts of State , 130 A.D.3d 89, 13 N.Y.S.3d 260, 261 (2015), rev'd sub nom. Loehr v. Admin. Bd. of Courts of State of New York , 29 N.Y.3d 374, 57 N.Y.S.3d 450, 79 N.E.3d 1113 (2017) (Article 78 proceeding after December 2013); Bernstein v. Feiner , 13 A.D.3d 519, 787 N.Y.S.2d 357, 359 (2004) (Article 78 proceeding after May 2003). Further, the only cases Defendants cite that actually apply res judicata, did so where the plaintiff had, in fact, brought a hybrid Article 78 proceeding. See, e.g., Green Materials of Westchester v. Town of Cortlandt , No. 15-cv-3257, 2015 WL 9302838, at *7 (S.D.N.Y. Dec. 21, 2015) (applying res judicata where the plaintiff brought a hybrid proceeding and even sought to amend their Article 78 claim to add the specific claims at issue in the federal action); Sheffield v. Sheriff of Rockland Cty. Sheriff Dep't , 393 F. App'x 808, 812 (2d Cir. 2010) (finding res judicata applied where a plaintiff "clearly presented" her federal claims in a hybrid Article 78 proceeding "and the state court adjudicated those claims").⁸ Tellingly, Defendants cite no case similar to this one, where a plaintiff did not bring a hybrid action and may not have been able to in the first instance. Under these circumstances, the Court, like Magistrate Judge Tiscione, sees no reason to depart from binding Second Circuit precedent which holds that an Article 78 proceeding does not bar a subsequent civil-rights claim for damages where a plaintiff may have been barred from seeking such damages in the Article 78 proceeding. See Davidson v. Capuano , 792 F.2d 275, 282 (2d Cir. 1986).⁹

8 Defendants also cite a New York Appellate Division case in which the Appellate Division found that the plaintiff there could not relitigate issues previously decided in a hybrid Article 78 proceeding. See Yellow Cab of Newburgh, Inc. v. Westchester Cty. , 72 A.D.3d 835, 898 N.Y.S.2d 659, 661 (2010). Such a case has little bearing on this one where Plaintiff indisputably did not raise his § 1983 claims in an Article 78 proceeding.

9 Defendants argue that Davidson is outdated and rests upon premises that no longer comport with New York practice, in that it did not recognize the potential for hybrid cases. Perhaps so, but if the binding precedent of Davidson is to be revisited, only the Second Circuit, and not this Court, has the authority to do so.

III. First Amendment Retaliation Claims

Plaintiff asserts that Defendants retaliated against Plaintiff for exercising its First Amendment rights. Specifically, Plaintiff claims that its challenges to Defendant's FA constituted protected speech and that Defendants retaliated by, among other things, removing Plaintiff's pay phones, refusing to permit Plaintiff to sell its assets, and fining Plaintiff. Magistrate Judge Tiscione recommended granting Defendants' summary judgment with respect to some, but not all, of Plaintiff's First Amendment retaliation claims. (R & R at 39-40.) Specifically, Magistrate Judge Tiscione found that: (1) First Amendment retaliation claims made by franchise applicants like Plaintiff are subject to a heightened standard, in that a plaintiff must demonstrate that any protected activity related to a matter of public concern; (2) while Plaintiff's threats to litigate the FA's validity constituted the requisite protected activity relating to a matter of public concern, Plaintiff's Article 78 proceeding and its subsidiary's lawsuit against the City did not; and (3) some, but not all, of the retaliatory conduct alleged by Plaintiff survived summary judgment. (Id. at 40-45, 47-56.)

Plaintiff argues that Magistrate Judge Tiscione erred by applying the heightened public concern standard, and contends that even if that standard did apply, Magistrate Judge Tiscione erred by finding that the Article 78 proceeding and subsidiary litigation did not involve matters of public concern. (Pl.'s Obj. at 6-9.) Plaintiff further contends that it adduced sufficient evidence that additional conduct by Defendants was motivated by animus. (Id. at 21-25.) Defendants argue that Magistrate Judge Tiscione erred by finding Plaintiff's litigation threats met the public concern test and that Plaintiff had adduced sufficient evidence of any retaliatory motive whatsoever. (Defs.' Obj. at 15-19.)

A. The Public Concern Test

Our courts have long recognized that "while the government enjoys significantly greater latitude when it acts in its capacity as employer than when it acts as sovereign, the First Amendment nonetheless prohibits it from punishing its employees in retaliation for the content of their protected speech." Locurto v. Safir , 264 F.3d 154, 166 (2d Cir. 2001). Therefore, where a government employee challenges his or her government employer's actions as First Amendment retaliation, "a plaintiff must establish that what he said or did constituted speech on a matter of public concern." Id. Further, a court resolving such a claim must balance the government employer's interests against the potential First Amendment concerns using a heightened standard as established in Pickering . Id. Magistrate Judge Tiscione found that the Pickering test should apply here because under some circumstances, Defendants' "interest in establishing fees, rules, and procedures for monetizing public space [could] outweigh a business' right to petition with grievances." (R & R at 43-44.) In other words, in this context, Defendant had "dual interests as a commercial counterparty and as a sovereign." (Id. at 44.) The Court finds Magistrate Judge Tiscione's use of the Pickering standard was error.

In finding that Magistrate Judge Tiscione's finding was in error, the Court relied on the Second Circuit's opinion in Wandering Dago, Inc. v. Destito, 879 F.3d 20 (2d Cir. 2018). In Wandering Dago , the Second Circuit found that the Pickering standard did not apply to a government agency's refusal to license a food truck. Id. at 38. There, a government agency established a licensing program for food vendors to provide food to state employees and other visitors to a government-owned plaza. Id. at 26-28. To participate, a vendor was required to pay a fee to the government, and maintain certain insurance and other requirements. Id. In return, the government would provide assigned vending locations and access to electricity and water. Id. The government did not directly pay the vendors as independent contractors; instead the vendors were able to profit from selling directly to both state employees and members of the public. Id. A food truck vendor named "Wandering Dago" applied for a license. Id. at 28. The government rejected Wandering Dago's application because it viewed the term "dago" as well as the names of several of Wandering Dago's menu items, to be offensive and derogatory. Id. The vendor challenged this determination as a violation of the First Amendment. Id. at 29. The government argued that its rejection of Wandering Dago's application was akin to "conditions placed on a prospective government contractor's speech" and therefore subject to the Pickering test. Id. at 38. The Second Circuit rejected this argument.¹⁰ Id.

10 Magistrate Judge Tiscione applied the Pickering test based on his assessment that courts broadly apply the Pickering test to any commercial relationship between the government and an entity. (R & R at 44 ("The relationship may go by many names—licensee, franchisee, permit holder, lessor, etc. Regardless, just like the employee-employer relationship, in these situations the government has dual interests as a commercial counterparty and as a sovereign.")). In doing so, he did not distinguish Wandering Dago , instead relying on non-binding and out-of-circuit precedent. For example, in Howard v. City of New York , the court found that a tennis instructor permitted to teach lessons on public courts failed to demonstrate that his statements related to a matter of public concern as required by Pickering . No. 12-cv-933, 2014 WL 84357, at *3 (S.D.N.Y. Jan. 6, 2014). Notably, on appeal, the Second Circuit expressly avoided the question of whether the Pickering test applied, determining that the Plaintiff failed to establish causation regardless of the standard. None of these cases, all of which predate Wandering Dago , provide the Court with any rationale to depart from binding Second Circuit precedent.

As the Second Circuit explained, a license applicant under these circumstances was not similarly situated to "a prospective government contractor." Id. This was so because in the cases involving government contractors, "the government agreed to pay public moneys to private individuals for services to be rendered, and therefore had a stronger interest in restricting those individuals' speech than in restricting the speech of the public at large." Id. While "the vendors stand to generate revenue for themselves as a result of the arrangement" and the government "indirectly benefits from the goods and services the food vendors provide as part of this exchange ... that is where the resemblance to government contracting ends." Id. The government only provided "access to a forum ... and modest nonmonetary assistance that facilitates the use of that forum." Id. Further, "it is those employees and other private citizens, not [the government], that actually pay the food vendors for their goods and services and directly benefit from them." Id. Indeed, the Second Circuit highlighted the fact that "[t]he only monetary exchange between the food vendors and [the government] is a fee paid by the vendors to [the government]." Id. (emphasis in original). Therefore, the Second Circuit determined that the food venders could not be viewed "as government contractors, but rather as private entities that pay to access public benefits and, in using those benefits to their economic advantage, secondarily satisfy a government purpose." Id.

The licensing scheme at issue here is largely indistinguishable. Under the terms of the FA, operators of curb-line pay phones were required to pay the City ten percent of gross revenues, while operators of building-line pay phones were to pay a flat fee. (R & R at 7.) In exchange for these fees, payphone operators were provided access to a forum through which private citizens, and not the government, could pay to utilize pay phones. (Id. at 5.) Under these circumstances, the government simply does not have the same interest in limiting a payphone operators' speech as that of a government contractor.

Defendants, apparently conceding that a fair reading of Wandering Dago undermines their argument that the Pickering test applies, argue that, in deciding Wandering Dago , the Second Circuit got it wrong.¹¹ (Defs.' Obj. at 6-7.) Specifically, Defendants claim that the Second Circuit was not made aware of binding precedent that would have altered its determination. (Id. ) What chutzpah. It should go without saying that, this Court is bound by the Second Circuit's decisions and cannot simply choose to ignore them. More importantly, the authority to which Defendants refer the Court, does not even support Defendants' argument.¹² In O'Hare Truck Serv., Inc. v. City of Northlake , the Supreme Court found that government officials could not terminate government contractors for refusing to support a political party or its candidates, unless political affiliation was a reasonably appropriate job requirement. 518 U.S. 712, 714, 116 S.Ct. 2353, 135 L.Ed.2d 874 (1996). Contrary to Defendants' assertions, the Supreme Court did not apply the Pickering test, instead expressly remanding the question of whether to apply the Pickering test to the lower court. Id. at 726. O'Hare is therefore inapposite.

11 Defendants also assert that Wandering Dago is factually distinguishable but curiously fail to cite any reasons why Wandering Dago is distinguishable beyond the vague assertion that there "plaintiff engaged in speech in a public forum provided by government." (Defs.' Obj. at 7.)

12 Defendants implicitly suggest that, in Wandering Dago , the Second Circuit ignored twenty-two-year-old precedent from the Supreme Court.

B. Plaintiff's Retaliation Claims

Because the Court finds that the heightened standard of Pickering does not apply here, Plaintiff was required to demonstrate only: "(1) that the speech or conduct at issue was protected, (2) that the defendant took adverse action against the plaintiff, and (3) that there was a causal connection between the protected speech and the adverse action." Scott v. Coughlin , 344 F.3d 282, 287 (2d Cir. 2003).

1. Plaintiff engaged in protected activities.

Plaintiff proffered four purportedly protected activities as the basis for its retaliation claims: (1) its refusal to accept the FA as written; (2) its acceptance of the FA with a written reservation of rights to later challenge the FA; (3) its Article 78 petition; and (4) the New Phone Litigation. (Pls' Opp. at 7, 11-12.) Magistrate Judge Tiscione found that while the first two of these constituted protected activity, the latter two failed to qualify as conduct related to a matter of public concern. (R & R at 47-53.) Because the Court finds that the heightened public concern standard does not apply here, this finding was in error.

Our courts have long recognized that "the right of access to courts for redress of wrongs is an aspect of the First Amendment right to petition the government." Sure-Tan, Inc. v. N.L.R.B. , 467 U.S. 883, 896–97, 104 S.Ct. 2803, 81 L.Ed.2d 732 (1984). The First Amendment protects the right to initiate traditional litigation, like the New Phone Litigation, but also Article 78 proceedings. Gagliardi v. Vill. of Pawling , 18 F.3d 188, 195 (2d Cir. 1994). For this reason, and because Plaintiff need not meet the heightened public concern standard, all four proffered activities constitute protected petitioning.

2. Plaintiff has offered admissible evidence of adverse actions.

Plaintiff alleged nine adverse actions by Defendants: (1) removing Plaintiff's pay phones in May 2000; (2) refusing to accept Plaintiff's executed FA; (3) refusing to allow Plaintiff to purchase franchise rights from Telco; (4) refusing to allow Plaintiff to sell its assets to Universal; (5) proposing a resolution to retroactively disapprove Plaintiff; (6) refusing to approve the proposed sale of Plaintiff's assets to NYC Public in August 2000; (7) discriminatorily enforcing various rules that resulted in approximately $100,000 in fines; (8) issuing permits to the buyer of Plaintiff's pay phones for pay phones which Defendants would not issue permits to Plaintiff; (9) refusing to ultimately issue an FA to Plaintiff; and (10) removing Plaintiff's pay phones in August 2001. Magistrate Judge Tiscione found that Plaintiff had adduced sufficient evidence as to six of these actions, but not to the other four. Specifically, Magistrate Judge Tiscione found that Plaintiff had failed to adduce evidence as to: (6) the proposed sale of Plaintiff's assets to NYC Public; (7) the $100,000 fines assessed against Plaintiff, (8) the issuance of permits to the purchaser of Plaintiff's pay phones; and (9) the refusal to ultimately issue an FA to Plaintiff. Plaintiff challenges only one of these findings: the failure to adduce evidence of $100,000 in fines.

Plaintiff apparently concedes that it did not put before Magistrate Judge Tiscione evidence of the fines. (Pl.'s Obj. at 25.) Instead, Plaintiff invites this court to review the City's official website and search for itself for the evidence Plaintiff failed to adduce. (Id. ) The Court declines Plaintiff's invitation.

The Second Circuit has found that "[c]onsiderations of efficiency and fairness militate in favor of a full evidentiary submission for the Magistrate Judge's consideration." Hynes v. Squillace , 143 F.3d 653, 656 (2d Cir. 1998). As such, the Second Circuit has routinely "upheld the exercise of the district court's discretion in refusing to allow supplementation of the record upon the district court's de novo review." Id. This is particularly the case where, as here, a party offers no justification for its failure to offer evidence to a magistrate judge. See Pan Am. World Airways, Inc. v. Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of Am. , 894 F.2d 36, 40 n.3 (2d Cir. 1990) (finding that a party "had no right to present further testimony when it offered no justification for not offering the testimony at the hearing before the magistrate"). Plaintiff clearly had the ability, and, given the lengthy course of this litigation, the time, to provide evidence necessary to support this claim. The Court will not countenance Plaintiff's failure to properly do so. Therefore, the Court adopts Magistrate Judge Tiscione's recommendation as to the viable adverse actions upon which Plaintiff may base its retaliation claims.

3. Plaintiff has established a sufficient causal connection for certain retaliatory conduct.

Magistrate Judge Tiscione found that Plaintiff had adduced sufficient evidence of a causal connection between only two of the purportedly retaliatory acts which occurred in May 2000: (1) the removal of Plaintiff's pay phones and issuance of fines in May 2000 and (2) the refusal to accept the signed FA. (R & R at 54–65.) Magistrate Judge Tiscione found, however, that Plaintiff had failed to adduce sufficient evidence with respect to Defendants' (1) refusal to permit Plaintiff to purchase franchise rights from U.S. Telco, (2) refusal to permit Plaintiff to sell its assets to Universal, (3) preparation of the FCRC Resolution, and (4) removal of Plaintiff's pay phones in August 2011. (Id. ) Unsurprisingly, Plaintiff argues that all of its purported bases for retaliatory conduct were causally connected to its protected petitioning (Pl.'s Obj. at 22–25), while Defendants contend that they were not. (Defs.' Obj, at 16–19.) The Court addresses each purported basis in turn.

a. Removal of Plaintiff's Pay Phones in May 2000

Magistrate Judge Tiscione found that a reasonable jury could find that the removal of Plaintiff's pay phones on May 8 was substantially motivated by Plaintiff's threats to litigate against Defendants on March 13, March 21, and April 14. (R & R at 56.) Magistrate Judge Tiscione's recommendation was based on two factors: (1) the close temporal proximity between Plaintiff's letters and the pay phones' removal (between four and eight weeks); and (2) the fact that no other payphone operator who failed to meet Defendants' deadline for registration had its pay phones removed. (R & R at 56–59.) Defendants argue that reliance on the temporal proximity between Plaintiff's threats and the pay phones' removal alone is insufficient to establish a causal connection and that the comparators identified by Magistrate Judge Tiscione were not similarly situated. (Defs.' Obj. at 16.) Defendants' objections are misplaced.

As an initial matter, the Second Circuit has found that temporal proximity alone can suffice at the summary-judgment stage to establish a prima facie claim for First Amendment retaliation. See Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Ed. , 444 F.3d 158, 168 (2d Cir. 2006) ("A plaintiff may establish causation indirectly by showing his speech was closely followed in time by the adverse employment decision."). And the Second Circuit has found that similar or even longer periods of time to that here can establish the necessary causal connection at the summary-judgment stage. See, e.g., Nagle v. Marron , 663 F.3d 100, 111 (2d Cir. 2011) (six weeks); Cioffi , 444 F.3d at 168 (2d Cir. 2006) (several months and several weeks); Gorman-Bakos v. Cornell Co-op Extension of Schenectady Cty. , 252 F.3d 545, 555 (2d Cir. 2001) (four or five months). Therefore, Magistrate Judge Tiscione did not err in finding that Plaintiff had established a prima facie case of retaliation.

Because Plaintiff established a prima facie case of retaliation, Defendants were required to demonstrate "by a preponderance of the evidence that [they] would have taken the same adverse employment action even in the absence of the protected conduct." Nagle v. Marron , 663 F.3d 100, 111–12 (2d Cir. 2011) (internal citation and quotations omitted). That is, Defendants "are entitled to summary judgment if they can show that a reasonable jury would have to find by a preponderance of the evidence that" Defendants would have removed Plaintiff's pay phones regardless of Plaintiff's threatened litigation. See id. Even after such a showing is made, Plaintiff can defeat Defendants' motion by demonstrating that the proffered justification is pretextual. Zehner v. Jordan-Elbridge Bd. of Educ. , 666 F. App'x 29, 33 (2d Cir. 2016) (finding that a jury should determine whether the defendant's justifications for its actions were merely pretext for retaliation in response to plaintiff's protected conduct.); Smith v. Cty. of Suffolk , 776 F.3d 114, 125 (2d Cir. 2015) (precluding summary judgment where the record permitted only inferences that defendant would have taken the same adverse actions against the plaintiff absent plaintiff's protected conduct.).

Defendants attempted to satisfy their burden by producing letters and deposition testimony indicating that the removal of Plaintiff's pay phones was due to Plaintiff's failure to execute the FA by March 13 and that the removal of the pay phones was intended to "provoke some action to comply with the law by Plaintiff." (R & R at 57.) On the other hand, Plaintiff adduced evidence that these stated motivations were pretextual. Specifically, Plaintiff adduced evidence that Defendants did not remove the pay phones of any other payphone operator who had also failed to meet the deadline. (R & R at 58–59.) Indeed, one payphone operator, NYTAS, whose application was ultimately denied on the basis of multiple criminal convictions, including stealing pay phones from a competitor, was given multiple extensions beyond the initial March 13 deadline. (R & R at 25.)

Defendants argue that Magistrate Judge Tiscione erred in finding that the proffered comparators, including NYTAS, were sufficiently similar to Plaintiff. (Defs.' Obj. at 16–18.) As an initial matter, the standards Defendants cite for the similarity of comparators are imported from the equal protection context and are not necessarily relevant to a First Amendment retaliation claim. See Progressive Credit Union v. City of New York , 889 F.3d 40, 49 (2d Cir. 2018) ("To succeed on [an equal protection] claim, plaintiffs must show an extremely high degree of similarity between themselves and the persons to whom they compare themselves."). Moreover, the purported distinction asserted by Defendants—that the comparators "were fully agreeable to signing and accepting the franchise agreement but simply had not done so yet for a variety of a practical reasons"—is simply insufficient at this stage to grant Defendants summary judgment. (Defs.' Obj. at 16–18.)

Given the evidence adduced by both parties, the court cannot conclude, as Defendants urge that a reasonable juror would necessarily find, that Plaintiff's pay phones would have been removed without regard to Plaintiff's litigation threats. As the Second Circuit has held in affirming the denial of summary judgment for a First Amendment retaliation claim, "the evidence of record before us permits only inferences. Those inferences may be drawn in either party's favor, and we require more than inferences." Smith v. Cty. of Suffolk , 776 F.3d 114, 125 (2d Cir. 2015). Plaintiff's claim arising from the May 2000 removal of its pay phones therefore survives summary judgment.¹³ i. Defendant's Refusal to Accept Plaintiff's executed FA

13 Defendants further object that its actions with respect to NYTAS were reasonable given ongoing litigation related to a different payphone operator. (Defs.' Obj. at 17–19.) While these fact-bound arguments may ultimately persuade a jury that Defendant's decisions with respect to Plaintiff were not pretextual, it is not appropriate for the Court to resolve such disputes at this stage.

Magistrate Judge Tiscione also found that Plaintiff had presented a triable issue of fact with respect to a retaliation claim based on Defendants' refusal to accept Plaintiff's signed FA in May 2000. (R & R at 60–63.) Plaintiff adduced evidence that it delivered the signed FA with a reservation of its rights to litigate the FA's validity on May 10, 2000. (Id. at 60.) The following day, DoITT rejected the FA by faxing Plaintiff an agreement requiring that it sell its phones to another company, acknowledge that it had lost its rights to a franchise by failing to meet the deadline, and acquiesce to the removal of its pay phones until a sale was completed. (Id. ) Defendants argued that it would have rejected the FA regardless of Plaintiff's reservation of rights because: (1) Plaintiff submitted the FA after the March 13, 2000 deadline, (2) the FA did not contain the required closing documents, and (3) the FA's reservation of rights constituted a counter-offer instead of an acceptance. (Id. ) Here again, Magistrate Judge Tiscione determined that a reasonable jury could find that these purported motivations were pretext. First , Magistrate Judge Tiscione noted evidence in the record that Defendants accepted at least three other executed FAs after the May 10 deadline. (Id. at 60–61.) Further, Defendant Regal, an attorney from the corporation counsel's office who represented DoITT, conceded during his deposition that Defendants were willing to accept Plaintiff's application after the March 10 deadline. (Id. ) Second , the parties dispute whether the FA package was incomplete, Plaintiff never received notice that its package was incomplete, and other applicants who had filed incomplete packages were ultimately still approved. (Id. at 61.) Third , Magistrate Judge Tiscione found that Defendants willingness to continue discussions with Plaintiff even after Plaintiff's reservation of rights, undermined Defendants' claim that it was this unwillingness that led Defendants to reject the FA. (Id. at 62.)

Defendants do not dispute that Plaintiff adduced sufficient evidence of pretext with respect to Defendants' first two proffered motivations. (Defs.' Obj. at 18-19.) Instead, Defendants argue that Magistrate Judge Scanlon previously found that Plaintiff's alteration of the FA did not constitute acceptance of the FA, but a counteroffer, and Defendants' refusal to accept Plaintiff's counteroffer therefore cannot be considered retaliatory. (Id. ). Defendants' argument simply does not follow. Defendants are correct that Magistrate Judge Scanlon, in recommending that Plaintiff's application for leave to amend the complaint be denied, found that Plaintiff did not validly execute the FA because "Plaintiff's unilateral changes to that agreement's terms do not constitute an acceptance of the City's offer." Best Payphones, Inc. v. City of New York , 2015 WL 13707104, *18, 2015 U.S. Dist. LEXIS 174901, *58 (E.D.N.Y. Feb. 17, 2015). But whether Plaintiff's executed FA is termed an accepted offer or a counter-offer, Defendants refusal to accept the FA still may constitute an adverse action that was motivated by retaliatory intent. An adverse action, in the context of a First Amendment retaliation claim, is "conduct that would deter a similarly situated individual of ordinary firmness from exercising his or her constitutional rights." Zelnik v. Fashion Inst. of Tech. , 464 F.3d 217, 225 (2d Cir. 2006). Plaintiff alleges, and has adduced evidence demonstrating, that Defendants refused to enter into the FA based on Plaintiff's protected threats to litigate the validity of the FA. The refusal of a government agency to enter into a potentially lucrative agreement with a private business could certainly deter similarly situated businesses from exercising their right to petition. Therefore, Defendants cannot defeat this claim at summary judgment.

ii. Defendant's Refusal to Allow Plaintiff to Purchase U.S. Telco's Franchise Rights

Magistrate Judge Tiscione determined that no reasonable jury could find that Defendants' refusal to permit Plaintiff to purchase franchise rights from U.S. Telco was retaliatory animus because such a claim was based not on protected activity related to a matter of public concern, but to private concerns. (R & R at 63–64.) Specifically, in a letter dated December 5, 2000, Regal indicated that DoITT would not approve Plaintiff's purchase of an existing franchise unless it terminated, with prejudice, its Article 78 proceeding and the New Phone Litigation. (See Letter from Regal to Sobel, Dkt. No. 485-4 at 182 (Dec. 5, 2000)). Then, in a February 2, 2001 letter to U.S. Telco, Regal indicated that any transfer of U.S. Telco's franchise to Plaintiff would require FCRC approval, and implied that DoITT would not recommend approval to the FCRC unless Plaintiff complied with the demands in the December 5, 2000 letter. (See Letter from Regal to U.S. Telco, Inc., Dkt. No. 485-4 at 190 (Feb. 2, 2001)).

Because Magistrate Judge Tiscione applied the Pickering test to Plaintiff's claims, he erred in finding that neither the Article 78 proceeding nor the New Phone Litigation could constitute protected conduct. Properly construed, Regal's express statement that Defendants would not permit Plaintiff to purchase U.S. Telco's franchise rights unless it ceased to engage in protected conduct constitutes prima facie evidence of a First Amendment retaliation claim. Defendants have proffered evidence, however, of a non-retaliatory motive. Specifically, Defendants claim that while their letters indicated an initial settlement position, Defendants did not actively refuse to approve of a deal between Plaintiff and U.S. Telco, and instead the proposed transaction simply never occurred. (Def.'s Mem. Supp. Mot. Summ. J. ("Defs.' Mem.") at 26.) Neither party has adduced sufficient evidence for the Court to determine as a matter of law whether Defendants' actions caused the proposed deal between Plaintiff and U.S. Telco to fail. Therefore, drawing inferences in favor of Plaintiff as the non-moving party with respect to these claims, a reasonable jury could find that Defendants' proffered motivations were pretextual. See Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Turtur , 892 F.2d 199, 205 (2d Cir. 1989) ("Questions of intent, we note, are usually inappropriate for disposition on summary judgment.").

iii. Defendant's Refusal to Allow Plaintiff to Sell its Assets to Universal

Magistrate Judge Tiscione found that no reasonable jury could conclude that Defendants refused to allow Plaintiff to sell its assets to Universal, because "Plaintiff does not cite to any evidence in the record to support this contention." (R & R at 64.) Contrary to Magistrate Judge Tiscione's finding, however, Plaintiff did adduce evidence that Defendants refused to allow Plaintiff to sell its assets to Universal. In an April 1, 2015 declaration, Plaintiff's owner, Mr. Chaite, stated that during an October 23, 2011 meeting, Cangemi and Regal informed Plaintiff and Universal that Plaintiff would need to dismiss all litigation against the City or else Defendants would not approve of the proposed agreement between Plaintiff and Universal. (Decl. Michael Chaite Opp'n Defs.' Mot. Summ. J., ("Chaite Decl.") ¶ 63, ECF No. 486-2.) Moreover, Mr. Chaite claims that Cangemi and Regal stated that this condition would apply to any proposed purchaser of Plaintiff's pay phones. (Id. ¶ 64.) In other words, Plaintiff has adduced admissible evidence demonstrating that Defendants expressly stated that they would not approve of a transaction with Universal unless Plaintiff ceased from engaging in protected activity. This constitutes a prima facie case of First Amendment retaliation. At the same time, however, Defendants have proffered evidence indicating that the City's determination not to approve of a transaction between Plaintiff and Universal was based on the fact that Universal had failed to pay its own franchise fees, as well as Defendants' concerns with Universal's financial state. (See Def. ECF No. 485-4, 235–36.) Once again, where both parties have proffered evidence in support of their claims, the Court cannot find as a matter of law that Plaintiff could not prove retaliatory intent. See Patrick v. LeFevre , 745 F.2d 153, 159 (2d Cir. 1984) ("[W]here subjective issues regarding a litigant's state of mind, motive, sincerity or conscience are squarely implicated, summary judgment would appear to be inappropriate and a trial indispensable."). Therefore, summary judgment is inappropriate with respect to this claim.

iv. The Preparation of the FCRC Resolution

Following an ECB determination that DoITT lacked the authority to determine that Plaintiff had lost the FCRC's approval for a franchise, on December 18, 2011, DoITT prepared a resolution for the FCRC to deny Plaintiff a franchise. (R & R at 19.) The memorandum enclosing the proposed resolution indicated that Defendants sought the resolution because "Plaintiff refused to accept the franchise agreement terms approved by the FCRC and failed to execute and deliver the agreement by the deadline set." (ECF No. 492-6, *2-3.) Magistrate Judge Tiscione found that Plaintiff failed to adduce any evidence that the proposed resolution was motivated by retaliatory animus. (R & R at 64.) Instead, Magistrate Judge Tiscione found that Defendants had demonstrated a valid motivation for the resolution: the ECB's determination that DoITT lacked unilateral authority to rescind the FCRC's franchise approval for Plaintiff. (Id. ) Magistrate Judge Tiscione erred, however, by ignoring the repeated and sustained course of events reflected in the record.

At the time Defendants prepared the resolution at issue, Plaintiff's Article 78 proceeding was still on appeal and the New Phone Litigation was still pending.¹⁴ Moreover, Plaintiff has adduced evidence that while other applicants had failed to execute the FA by the deadline, no resolution was sought for any other applicant. (See Samuelson Decl., ¶¶ 71-72, Exhibits UU and VV.) A reasonable jury could find that Defendants only prepared the FCRC resolution given Plaintiff's insistence on continuing to engage in protected litigation activity. Defendants, in opposition, point out a non-retaliatory motivation for preparing the FCRC resolution: that the ECB had ruled that DoITT lacked the authority to determine that Plaintiff should be denied a franchise. (Defs.' Resp. at 19.) Further, Defendants argue that such a resolution was not necessary for any other entity because no other entity had challenged DoITT's authority to deny franchise approval. (Id. ) In short, the parties have presented disputed facts from which a reasonable jury could find for either party. Therefore, summary judgment on this claim must be denied.

14 Magistrate Judge Tiscione's finding may have been influenced by his conclusion that the Article 78 proceeding and New Phone Litigation did not constitute protected activity.

v. The Removal of Plaintiff's Pay Phones in August 2001

On August 9, 2001, after the dismissal of Plaintiff's Article 78 petition, but while the New Phone Litigation was still pending, DoITT sent a letter to Plaintiff demanding that Plaintiff remove its remaining pay phones from City property or provide DoITT with written evidence that its pay phones were permitted or did not require permits. (R & R at 22.) Following Plaintiff's failure to comply, DoITT removed 31 additional pay phones and issued another 37 NOVs. (Id. ) Magistrate Judge Tiscione found that, because this conduct occurred more than fifteen months after the last instance of Plaintiff's protected conduct (i.e. its reservation of rights in the FA), no reasonable jury could find that the removal of pay phones and issuance of NOVs were motivated by retaliatory animus. This finding, however, was based on the erroneous determination that the Article 78 proceeding and New Phone Litigation were not protected conduct. Because both litigations were protected conduct, this subsequent removal took place temporally proximate to this conduct: less than one month after the dismissal of Plaintiff's Article 78 proceeding and while the New Phone Litigation was still pending. A reasonable juror could readily find that DoITT's additional removal of pay phones and issuance of NOVs was continued retaliation for Plaintiff's protected litigation. While Defendants contend that DoITT's removal of Plaintiff's pay phones was simply DoITT's enforcement of its own laws, as with the FCRC Resolution claim, this claim presents issues of disputed facts and must be left to a jury.

IV. Plaintiff's Equal-Protection Claims

Magistrate Judge Tiscione found that Plaintiff's equal-protection claims failed whether brought under either a selective-enforcement or class-of-one theory. (R & R at 66–69.) First , Magistrate Judge Tiscione found that any claim of differential treatment based on Plaintiff's exercise of a First Amendment right would be duplicative of Plaintiff's First Amendment retaliation claims, and therefore improper. (Id. at 67–68.) Second , Magistrate Judge Tiscione found that, to the extent Plaintiff based such a claim on personal animus against its owner, such a claim was barred by the Supreme Court's decision in Engquist v. Oregon Dep't of Agric. , 553 U.S. 591, 128 S.Ct. 2146, 170 L.Ed.2d 975 (2008). (Id. at 67–68.) While the Court agrees with Magistrate Judge Tiscione's recommendation that Plaintiff's claim is barred, it does so for a different reason: Plaintiff never asserted any equal-protection claim based on personal animus against its owner.

Plaintiff's complaint does not clearly assert the basis for its equal-protection claim. (See TAC ¶¶ 230–38.) Plaintiff's opposition to Defendant's motion for summary judgment, however, makes abundantly clear that its equal-protection claim is based on its protected First Amendment activity and not personal animus against its owner. Plaintiff asserts: "The Defendants took adverse action against Plaintiff (a) because it had spoken out against the City's PPT regulatory scheme, (b) because it commenced litigation against the City, and (c) because it had reserved its rights in the FA which it submitted." (Pl.'s Mem. Law Opp'n Defs.' Mot. Summ. J. ("Opp'n") 19, ECF No. 486.) Indeed, according to Plaintiff: "The only difference between Plaintiff and the 80 other PPT providers approved for a franchise was that Plaintiff refused to sign away its First Amendment rights." (Id. at 20.) (emphasis added). In other words, Plaintiff has simply repackaged its First Amendment retaliation claims into an equal-protection claim.

Courts in the Second Circuit have dismissed equal-protection claims that merely restate First Amendment retaliation claims. See, e.g., Whitehead v. City of New York , 953 F. Supp. 2d 367, 377 (E.D.N.Y. 2012) (dismissing equal protection claim based upon First Amendment retaliation as duplicative of a First Amendment retaliation claim); Frisenda v. Inc. Vill. of Malverne , 775 F. Supp. 2d 486, 518 (E.D.N.Y. 2011) (granting summary judgment as to "equal protection claim based upon retaliation for First Amendment activity" because "such a claim is completely duplicative of [a] First Amendment retaliation claim"). The reasoning is simple: courts should not unnecessarily stretch sections of the Constitution to reach wrongs already covered by other sections. See Graham v. Connor , 490 U.S. 386, 395, 109 S.Ct. 1865, 104 L.Ed.2d 443 (1989) (rejecting due process challenge to false arrest "[b]ecause the Fourth Amendment provides an explicit textual source of constitutional protection against this sort of physically intrusive governmental conduct"). Here, the First Amendment provides Plaintiff with an explicit textual source for his alleged constitutional wrongs. Therefore, the Court dismisses Plaintiff's equal-protection claims as duplicative.¹⁵

15 Notably, Plaintiff did not object to Magistrate Judge Tiscione's recommendation that any equal-protection claim arising from its First Amendment retaliation claims should be dismissed as duplicative and therefore has waived it rights to appeal at least portions of that recommendation.

V. Monell Claims

Magistrate Judge Tiscione found that Plaintiff had failed to adduce sufficient evidence to support a Monell claim with respect to Plaintiff's First Amendment retaliation claim, but had adduced sufficient evidence with respect to Plaintiff's unconstitutional-condition claims. (R & R at 74-78.) Plaintiff raises several objections to Magistrate Judge Tiscione's findings. First , Plaintiff contends that any City action to enforce the purportedly unconstitutional condition within the FA necessarily triggers Monell liability. (Pl.'s Obj. at 14–15.) Second , Plaintiff argues that it should be permitted to argue that the FA's waiver was so important to the City's regulatory scheme that it would not have been left to underlings to enforce. (Id. at 15–16.) Third , Plaintiff claims that it adduced evidence that policymakers directed the acts of retaliation against Plaintiff. (Id. at 16.) Fourth , Plaintiff contends that policymakers ratified the retaliation after the fact. (Id. ) Fifth , Plaintiff contends that it has adduced evidence that policymakers delegated authority to those who ultimately took retaliatory action against Plaintiff. (Id. )

Plaintiff's first two objections muddle the distinction between its First Amendment retaliation claim and its unconstitutional-condition claim. To the extent that the City maintained a formal policy of including in the FA an unconstitutional condition, and Plaintiff was harmed by such a policy, Plaintiff can demonstrate Monell liability. See Amnesty Am. v. Town of W. Hartford , 361 F.3d 113, 125 (2d Cir. 2004) ("Monell established that alleging that a municipal policy or ordinance is itself unconstitutional is always sufficient to establish the necessary causal connection between the municipality and the constitutional deprivation, because an employee's act of enforcing an unconstitutional municipal policy may be considered the act of the municipality itself."). Indeed, Magistrate Judge Tiscione expressly found that Defendants were not entitled to summary judgment with respect to Plaintiff's unconstitutional-condition claim against the City. (R & R at 77–78.) But, to the extent that Plaintiff seeks to impose Monell liability against the City for discrete acts of First Amendment retaliation, Plaintiff was required to prove that the City itself was responsible for those discrete acts. As Magistrate Judge Tiscione correctly found, however, Plaintiff failed to adduce evidence that a final policymaker, here Commissioner Dobrin, directed or approved these retaliatory acts. (R & R at 75–76.) Absent such evidence, to permit the imposition of Monell liability by inference or implication, would amount to imposing respondeat superior liability against the City. See Amnesty Am. , 361 F.3d at 125 ("[C]onstitutional torts committed by city employees without official sanction or authority do not typically implicate the municipality in the deprivation of constitutional rights, and therefore the employer-employee relationship is in itself insufficient to establish the necessary causation.").

Plaintiff's claim that it adduced sufficient evidence of Commissioner Dobrin's direct involvement is similarly lacking. Plaintiff cites to the deposition of Defendant Regal as evidence that Commissioner Dobrin and Deputy Commissioner Reiss made the decision to deny Plaintiff's request for an extension to complete the FA. But Regal did not testify with such specificity. Plaintiff's counsel asked: "With respect to Plaintiff Payphones and the positions that, for example, you took in various letters you sent to Plaintiff, who did you take direction from with respect to those decisions." (ECF No. 525-1 at 11.) Regal responded: "As I said, these were group decisions which were made in discussions including myself, Deputy Commissioner Elaine Reiss, who was also general counsel, we would sometimes brief Commissioner Allan Dobrin, Larry Allison who was Assistant Commissioner for pay phones was involved in these decisions ... some issues, were relatively minor and could be decided at a lower level, some were larger issues and needed to be decided at a higher level." (Id. ) This statement fails to identify what specific decisions were made by these purported policymakers with respect to Plaintiff or even whether the decision to deny Plaintiff's request for an extension was a "relatively minor issue" that "could be decided at a lower level," or a "larger issue[ ], that "needed to be decided at a higher level." Therefore, this testimony cannot support Monell liability. Plaintiff also claims that Regal's testimony evidenced the fact that a policymaker made the decision not to accept Plaintiff's FA in May 2000. (Id. at 28–29.) Within the cited deposition portion, however, Regal states at least three times that he has no recollection of who made that ultimate decision. (Id. )

Plaintiff's claim that Dobrin ratified the retaliatory actions against Plaintiff rests almost entirely on dramatic readings of letters sent from Dobrin to Plaintiff. Specifically, Plaintiff claims that an August 4, 2000 letter from Dobrin in which he informs Plaintiff of the decision to remove its pay phones by stating "[t]his office has ... concluded that ... removal of the applicable public pay telephones is an appropriate remedy" proves that Dobrin directed a retaliatory act. (ECF No. 462-4 at 172.) While this letter is evidence that Dobrin approved an act, it is not evidence that Dobrin approved a retaliatory act. "Where ... liability is premised on the policymaker's approval of a subordinate's unlawful act, it must be shown that the policymaker ratified the subordinate's decision and the basis for it." Davis v. City of New York , 75 F. App'x 827, 829 (2d Cir. 2003). Therefore, and contrary to Plaintiff's arguments, Plaintiff was required and has failed to adduce evidence that Dobrin ratified the basis for any retaliatory action. Plaintiff attempts to generate the necessary evidence of retaliation with the use of italics, highlighting the fact that Dobrin "wrote directly to Plaintiff's president[,]" with language such as "inexplicable refusal over many months to comply" and "a continuing contempt for the City's statutory and regulatory scheme." (Letter from Dobrin to Plaintiff, Dkt. No. 462-4 at 138 (emphasis added)). Even drawing every inference in Plaintiff's favor, this language at most evidences a distaste of Plaintiff by Dobrin, not Dobrin's intent to engage in acts of retaliation based on Plaintiff's First Amendment rights.

Plaintiff also suggests that a June 19, 2000 letter in which Dobrin states that "the failure, and indeed the affirmative refusal, by Plaintiff to execute, in anything even remotely related to a timely fashion, the franchise agreement approved by the [FCRC]" suggests that Dobrin participated in an act of retaliation because "Dobrin certainly was aware" of Plaintiff's May 2000 reservation of rights. (ECF No. 462-4 at 135.) This would only be true if Plaintiff had actually adduced evidence that Dobrin was aware of Plaintiff's May 2000 reservation of rights. Absent such evidence, the June 2000 letter only reflects that Dobrin believed that Plaintiff had refused to execute the FA, not that Dobrin was aware of the reason that Plaintiff had so refused.

Finally, Plaintiff's argument that Dobrin delegated final policymaking authority to Regal also fails. (Pl.'s Obj. at 19.) Plaintiff's theory rests on only two pieces of evidence: (1) the June 19, 2000 letter in which Dobrin stated that the City Law Department was acting "on behalf of" DoITT, and (2) an affidavit submitted by the City in connection with Plaintiff's Article 78 proceeding, in which a City attorney stated that "Mr. Regal was representing DoITT with regard to the franchise matter and was speaking on behalf of DoITT." (Id. ) This is simply not enough. The statement that the City Law Department was acting on behalf of a specific City agency in no way suggests that Dobrin had specifically delegated policymaking authority to Regal. Nor does Defendant Regal's representation of DoITT with regard to Plaintiff's franchise application suggest any differently. Indeed, such an argument would similarly hold that any attorney for any agency possessed final policymaking authority. Ultimately, Plaintiff's argument is that by permitting Regal to manage Plaintiff's franchise application, Dobrin delegated policymaking authority. "Simply going along with discretionary decisions made by one's subordinates, however, is not a delegation to them of the authority to make policy." City of St. Louis v. Praprotnik , 485 U.S. 112, 130, 108 S.Ct. 915, 99 L.Ed.2d 107 (1988). Therefore, Plaintiff has failed to adduce sufficient evidence of Monell liability with respect to its First Amendment retaliation claims.

VI. Plaintiff's Compensatory Damages Claims

Defendants object that Magistrate Judge Tiscione erred in failing to grant Defendants' request for summary judgment with respect to compensatory damages. (Pl.'s Obj. at 20-21.) Specifically, Defendants argue that Plaintiff has failed to adduce sufficient evidence to support its claimed compensatory damages. (Id. ) In its Rule 26(a)(1) Amended Disclosure, Plaintiff claimed losses of $2,802,500 calculated as its anticipated valuation compared to the ultimate price of its asset sale to BAS, $1,000,000 in losses from phones that would have been moved to the curb, $50,000 in unearned media bonuses for curb phones, $34,000 in losses related to the removal of its equipment, and $50,000 in franchise rights that it could have sold. (ECF No. 274-4.) Defendants claim that these valuations lack corroboration because they are only supported by the declaration of Plaintiff's CEO, and are "wildly over-estimated." (Def.'s Mem. Supp. Mot. Summ. J. ("Defs.' Mem.") at 36–37, ECF No. 485-7.) In other words, Defendants concede that Plaintiff has produced some evidence of damages, but Defendants disagree with the inferences Plaintiff would like a jury to draw from that evidence. Under such circumstances, summary judgment cannot be granted. See Holt v. KMI-Cont'l, Inc. , 95 F.3d 123, 129 (2d Cir. 1996) ("If there is any evidence in the record from which a reasonable inference could be drawn in favor of the non-moving party on a material issue of fact, summary judgment is improper.").

CONCLUSION

The Court has reviewed the remainder of the R & R for clear error and, finding none, adopts Magistrate Judge Tiscione's September 13, 2018 R & R with the modifications noted in this opinion. For the foregoing reasons, Plaintiff's motion for summary judgment is DENIED and Defendants' motion for summary judgment is GRANTED in part and DENIED in part. Plaintiff's equal-protection claim, and Monell claim are dismissed with prejudice. Following the parties' briefing of Plaintiff's unconstitutional-condition claim and the Court's disposition of that claim, the parties will proceed to trial on Plaintiff's First Amendment retaliation claims, and Plaintiff's Section 1983 conspiracy claim.

SO ORDERED.

REPORT & RECOMMENDATION

TISCIONE, United States Magistrate Judge:

TABLE OF CONTENTS

BACKGROUND...489

I. Procedural History...489

II. Factual Background...491

A. The City Council Passes Local Law 68 of 1995 and Congress Passes the Telecommunications Act of 1996...491

B. Best Enrolls with the Interim Registry and Applies for a Franchise Agreement...492

C. Best Raises Complaints with DoITT's Permitting Process and Requests an Extension of Time to Sell its Business...493

D. DoITT Gives Best a Final Deadline of March 13, 2000...494

E. Best Lays out its Disagreements with the FA after the Expiration of the March 13, 2000 Deadline...495

F. Best Signs the FA under Duress after the City Removes Payphones without Notice...498

G. Best Disputes the Validity of the May 2000 Removal...499

H. Best Initiates Litigation against the City...501

I. Best and the City Engage in Unfruitful Settlement Discussions...502

J. DoITT Again Removes Best's Payphones in August 2001...502

K. Best Completes a Sale of its Assets in June 2003...503

SCOPE OF THE ACTION AT SUMMARY JUDGMENT...503

I. Best's Pre-Litigation Claims Remain in the Case...504

A. The Law of the Case does not Bar Best's Pre-Litigation Claims...504

B. Res Judicata does not Bar Best's Pre-Litigation Claims...506

II. Best has a Section 1983 Conspiracy Claim...510

III. The Unconstitutional Condition Claim is in the Case ...510

IV. Other Miscellaneous Claims from Plaintiff's Motion for Summary Judgment...512

LEGAL STANDARD ON SUMMARY JUDGMENT...512

DISCUSSION OF DEFENDANTS' MOTION...513

I. Summary Judgment should be Entered against Some of the First Amendment Retaliation Claim...514

A. The Public Concern Test Applies to Best...515

B. Best had a Preexisting Commercial Relationship with the City entitling it to First Amendment Protections...518

C. A Reasonable Jury could Find in Favor of Best...519

D. Defendants have not Briefed whether the Pickering Balancing Test Justifies the Retaliatory Acts...532

II. Summary Judgment should be Entered Against the Equal Protection Claim...533

A. Defendants should Receive Summary Judgment against any Equal Protection Claims Predicated upon the Exercise of a First Amendment Right...534

B. Defendants should also Receive Summary Judgment against any Equal Protection Claims Predicated upon Personal Animus...534

III. Summary Judgment should be Entered against the Conspiracy Claim...535

IV. Best could Obtain some Damages at Trial...536

V. Most of the Defendant Specific Grounds for Summary Judgment should be Denied...537

A. Defendants cannot Rely on Qualified Immunity...537

B. Defendants have Inadequately Briefed the Question of Individual Liability...537

C. Municipal Liability...538

DISCUSSION OF PLAINTIFF'S MOTION...541

I. Best's Motion for Summary Judgment on its First Amendment Unconstitutional Condition Claim should be Denied...541

CONCLUSION...544

OBJECTIONS TO THIS REPORT AND RECOMMENDATION...544

Plaintiff Best Payphones, Inc. ("Best") filed these three actions against the City of New York, various municipal defendants, and individual public officials (collectively, the "Defendants") in 2001 and 2003. At the time, Best was an owner and operator of public pay telephones ("PPTs") on public rights-of-way ("PROW") in New York City. All three actions revolve around the City's efforts to require private companies to enter into franchise agreements before operating PPTs on New York City's PROW. Best's central allegation in these cases is that in doing so, Defendants singled out Best for adverse treatment, thereby violating Best's constitutional rights.

After years of litigation, the parties have now filed cross-motions for summary judgment. The Honorable LaShann DeArcy Hall has referred the motions for a report and recommendation. This Court recommends denying Best's motion in its entirety, and recommends granting Defendants' motion in part and denying it in part.

Specifically, this Court first recommends finding that the following claims remain in the case at summary judgment: (1) First Amendment retaliation; (2) violations of the Equal Protection clause; (3) Section 1983 conspiracy; and (4) First Amendment unconstitutional conditions. This Court recommends finding that no other claims remain in the case.

Second, Defendants argue that Best's remaining claims either fail as a matter of law or that no material disputes of fact remain. This Court recommends granting summary judgment on this ground against all of Best's claims with two exceptions: (1) Best's allegations that Defendants retaliated against Best for threatening to exercise its right to petition in March, April, and May 2000 by removing Best's payphones from the PROW, issuing fines against Best, and refusing to accept Best's franchise agreement; and (2) Best's claim that the franchise agreement imposed an unconstitutional condition on the right to petition the courts with grievances. Summary judgment should be entered against all other claims.

Third, Defendants argue that the individual defendants are entitled to qualified immunity, that there is insufficient evidence of the individual defendants' personal involvement, and that Best has failed to support its Monell claim. This Court recommends denying this ground for summary judgment in its entirety, with one exception: there is insufficient evidence to support Best's First Amendment retaliation claim against the City. Thus, summary judgment in favor of the City should be entered on that claim.

BACKGROUND

I. Procedural History.

This case began on June 7, 2001, when Plaintiff commenced the first of these actions against the City of New York and the Department of Information Technology and Telecommunications ("DoITT").¹ Plaintiff then filed another two actions against the City of New York and DoITT on December 20, 2001 and January 13, 2003.² On August 16, 2004, Best filed an amended complaint in 03-CV-192 that expanded the number of defendants and claims in the litigation.³ All of these actions pertain, generally speaking, to the same set of facts relating to the City's efforts to regulate private companies' operation of PPTs on New York City's PROW.

1 See Dkt. No. 1, 01-CV-3934.

2 See Dkt. No. 1, 01-CV-8506; Dkt. No. 1, 03-CV-192. The Court notes that these are only three of many other complaints that Best has filed in the Eastern and Southern Districts of New York. The procedural posture of the case was discussed in detail in the Honorable Vera M. Scanlon's Report and Recommendation on Plaintiff's Motion for Leave to File a Fourth Amended Complaint. See Dkt. No. 417 at 3, 03-CV-192 at 3 ("Scanlon R & R").

3 See Dkt. No. 21.

By Order of the Honorable (then Magistrate Judge) Kiyo A. Matsumoto, the cases were consolidated on March 30, 2006.⁴ Judge Matsumoto designated 03-CV-192 as the lead case and directed that the amended complaint in that action serve as the governing complaint for the purposes of the consolidated action.⁵ Plaintiff sought leave of Court to file a second amended complaint, which was later supplemented to constitute the Second Amended and Supplemental Complaint ("the SASC").⁶ In lieu of filing an Answer, Defendants filed a Motion to Dismiss.⁷ On June 30, 2008, Judge Matsumoto recommended that a number of claims be dismissed, but recommended denying the motion to dismiss as to Best's Section 1983 claims asserting violations of Best's First and Fourteenth Amendment rights.⁸ The Honorable John Gleeson adopted Judge Matsumoto's report and recommendation (the Matsumoto R & R) in full.⁹

4 See Dkt. No. 79 at 3.

5 See id. Plaintiff's motion to consolidate also dealt with 04-CV-3541. That action was dismissed and is of no import to the instant decision. Unless otherwise noted, all citations to docket numbers herein will refer to docket numbers associated with 03-CV-192 (LDH) (ST).

6 See Dkt. Nos. 92, 103-1, 116.

7 See Dkt. No. 150.

8 Judge Matsumoto recommended that the First and Fourteenth Amendment claims be dismissed against individual Defendants Menchini, Cosgrave, and Bloomberg. See R & R at 53 n.20, 59 n.22 (June 30, 2008) (Dkt. No. 192) ("Matsumoto R & R").

9 See Dkt. No. 202 (Order adopting R & R); Dkt. No. 203 (Amended Order adopting R & R).

In response to the directive of Magistrate Judge Andrew Carter, Plaintiff filed its Third Amended Complaint (the "TAC") on August 20, 2010.¹⁰ The parties had stipulated to the majority of what could remain in the TAC given Judge Matsumoto's recommendations, and Judge Carter ordered that the ten remaining paragraphs pertained to dismissed claims.¹¹ Defendants filed their Answer to the TAC on October 13, 2010.¹²

10 See Dkt. No. 258 (Order directing Plaintiff to file the Third Amended Complaint); Dkt. No. 261 (Third Amended Complaint).

11 See Dkt. No. 258.

12 See Dkt. No. 265.

On November 21, 2013, Best moved for a pre-motion conference to amend the TAC to revive certain claims that were previously dismissed.¹³ After substantial briefing, Magistrate Judge Scanlon recommended that the Court deny Plaintiff's motion to file a fourth amended complaint.¹⁴ Judge Gleeson adopted this recommendation in full.¹⁵ Accordingly, the Third Amended Complaint remains the operative complaint in the consolidated action.

13 See Dkt. No. 348.

14 See generally Scanlon R & R.

15 See Sept. 18, 2015 Docket Order.

On July 29, 2015, Judge Gleeson referred the parties' prospective summary judgment motions to Judge Scanlon for a report and recommendation.¹⁶ On March 10, 2016, the case was reassigned to the Honorable LaShann DeArcy Hall and on April 7, 2016, the case was reassigned to me. On July 7, 2016, Defendants moved for summary judgment.¹⁷ Best also moved for summary judgment.¹⁸

16 See Minute Entry (July 29, 2015); see also Dkt. Nos. 458 (Defendants' pre-motion conference letter) and 459 (Plaintiff's pre-motion conference letter).

17 See Dkt. No. 485.

18 See Dkt. No. 488.

After the summary judgment motions were fully briefed, Best moved to compel the deposition of a previously unavailable witness, Mr. Bruce Regal.¹⁹ I granted the motion to reopen discovery for the limited purpose of deposing Mr. Regal, and terminated the motions for summary judgment.²⁰ Now that Mr. Regal has been deposed, the parties have renewed their cross-motions.²¹ II. Factual Background.

19 See Dkt. Nos. 505-7.

20 See Dkt. No. 508.

21 See Dkt. Nos. 525-532.

Unless otherwise noted, the following facts are undisputed and are supported by admissible evidence.²²

22 Defendants attempt to knock out all of Best's factual disputes in support of its motion on the basis of purported inadequacies in Best's Rule 56 statements of undisputed fact (the "SUMF"). See Defs.' Opp. at 2-3 (Dkt. No. 488-4). This Court is unpersuaded by this argument. It is ‘well-established’ that ‘even inadmissible evidence may properly be considered on summary judgment if it may reasonably be reduced to admissible form at trial," Perpall v. Pavetek Corp. , 2017 WL 1155764, at *9, 2017 U.S. Dist. LEXIS 44567, at *28 (E.D.N.Y. Mar. 27, 2017) (quoting Parks v. Blanchette , 144 F. Supp. 3d 282, 293 (D. Conn. 2015) ). It is true that this Court has discretion to ignore factual allegations not properly submitted under Local Rule 56. See Suares v. Cityscape Tours, Inc. , 603 F. App'x 16, 17 (2d Cir. 2015). But this dispute over the SUMFs is ludicrous on both sides given that neither party even cites to the SUMFs in their briefing, thereby defeating the entire point of the exercise. See, e.g. , Defs.' Memo ISO at 14 (Dkt. No. 485-7) (citing to Samuelson Decl. and not the SUMF). This Court, therefore, has been forced to assess the evidence directly anyway and will exercise its discretion to ignore defects in the SUMFs.

A. The City Council Passes Local Law 68 of 1995 and Congress Passes the Telecommunications Act of 1996.

The road to this case began in September 1995 when the New York City Council enacted Local Law 68, which detailed a new set of regulations governing payphones on the PROW.²³ Prior to Local Law 68, only Verizon's predecessor—Bell Atlantic—had the authority to operate payphones on the PROW, the vast majority of which were placed at or near the sidewalk curb.²⁴ Nevertheless, many other companies had installed payphones without a valid license on the sidewalk adjacent to buildings.²⁵

23 See Local Law 68 of 1995, Dkt. No. 485-3 at 2-13.

24 See Samuelson Decl. ¶ 7 (Dkt. No. 485-2); see also Memo from Reiss to the FCRC, Dkt. No. 486-4 at 85 (July 21, 1999).

25 See Samuelson Decl. ¶ 7.

Local Law 68 rescinded and replaced the old regulatory scheme. It required that no "public pay telephone shall be installed, operated or maintained on, over or under any street or other inalienable property of the city without a permit," and that a company must obtain a franchise in order to obtain a permit.²⁶ In acknowledgment of the fact that many unauthorized phones on the PROW had been in operation for years prior to the enactment of Local Law 68, the law also provided for an interim registry program in order to grandfather in existing payphone operators.²⁷ The interim registry program required the owners of the unauthorized PPTs to submit a list of those unauthorized PPTs to DoITT and to pay the interim occupancy fees.²⁸ If the DoITT Commissioner did not object to the continued operation of such phones, then the unauthorized PPTs could remain in operation until the owner obtained the necessary franchise and permits.²⁹

26 NYC Administrative Code §§ 23-402, 23-403 (a)(1).

27 Local Law 68 §§ 6(a),(b).

28 Id.

29 Id.

The registry rights of those owners of unauthorized PPTs were not unconditional or indefinite. Three different events could trigger the termination of interim registry rights: (1) the failure of the owner to respond to a solicitation issued by the Commissioner of DoITT for an award of franchise agreements; (2) a determination by the Commissioner not to propose an award of a franchise to the owner; or (3) determination by the Franchise Concession Review Committee (the "FCRC") not to approve a proposed franchise agreement for such an owner.³⁰

30 See L.L. 68 §§ 6(a).

One wrinkle in this transition was that after the City enacted Local Law 68, Congress enacted the Telecommunications Act of 1996 (the "TCA").³¹ This law provides that state and local governments may not prohibit any entity from providing a telecommunications service with the exception that they may "require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis."³²

31 See Telecomm. Act of 1996, 1996 Enacted S. 652, 104 Enacted S. 652, 110 Stat. 56, 57.

32 See 47 U.S.C. § 253(a), (c).

B. Best Enrolls with the Interim Registry and Applies for a Franchise Agreement.

Best, which is owned by Mr. Chaite, was an owner of unauthorized PPTs at the time that Local Law 68 was enacted.³³ Pursuant to the new law, Best paid the requisite fees and submitted its registry forms in a timely fashion, identifying 839 active PPTs.³⁴

33 See Chaite Decl. ¶ 1 (Dkt. No. 486-2).

34 See id. ¶ 7.

On June 19, 1998, DoITT provided a draft franchise agreement to Best and requested comments.³⁵ Over a year later on July 2, 1999, DoITT mailed a final draft of the franchise agreement that DoITT was prepared to recommend to the FCRC for its approval, as well as an acceptance letter, to Best and other companies requesting registration.³⁶ The acceptance letter required a countersignature.³⁷ Best complied, but it also added a disclaimer that it was prepared to sign the final agreement "provided that all the provisions of said final agreement conform to all City, State and Federal Laws. All rights reserved."³⁸

35 See Letter from DoITT to Best, Dkt. No. 485-3 at 100 (June 19, 1998).

36 See Letter from DoITT to Best, Dkt. No. 485-3 at 102-3 (July 2, 1999).

37 See id.

38 See Letter from Best to DoITT, Dkt. No. 485-3 at 105 (July 12, 1999).

On August 11, 1999, the FCRC approved the final terms of the FA and approved DoITT and the City to enter into such an agreement with a number of companies, including Best, conditioned upon the companies' "execution and delivery ... of the [Franchise Agreement]."³⁹ Under the terms of the agreement, operators of curb-line phones were to pay the City 10% of gross revenues, and operators of building-line payphones were to pay the City a flat fee that escalated by a set amount every year subject to regular readjustments to maintain the same percentage of gross revenues paid to the City.⁴⁰ Furthermore, only operators of curb-line payphones were allowed to place advertising on their phones.⁴¹ C. Best Raises Complaints with DoITT's Permitting Process and Requests an Extension of Time to Sell its Business.

39 See FCRC Resolution, Dkt. No. 485-3 at 198 (Aug. 11, 1999).

40 See Franchise Agreement, Dkt. No. 485-4 at 50-52.

41 See Franchise Agreement, Dkt. No. 485-4 at 33.

Two days later, Best received the FCRC-approved franchise agreement (the "FA") and closing documents, which were required to be executed and submitted by October 15, 1999,⁴² although that "due date was later extended to November 15, 1999."⁴³

42 The required closing documents included: (1) an insurance certificate, (2) corporate charter documents, (3) a good standing certificate from the state of incorporation, (4) certified documentation of authorization to sign the FA, (5) an opinion from the company's counsel affirming that the FA was validly executed and binding, (6) a letter confirming that DoITT had an up-to-date and accurate list of the company's PPTs, (7) a list with the locations all PPTs operated by the company, (8) a description of the company and its corporate structure, (9) a designation of an agent to receive communications from DoITT, and (10) a mailing address. See Memo to Best, Dkt. No. 485-3 at 204 (Aug. 13, 1999).

43 Samuelson Decl. ¶ 24.

Following the FCRC's approval of the FA, Mr. Chaite and representatives of DoITT corresponded throughout the fall of 1999 regarding the finalization of his FA application.⁴⁴ Initially, Mr. Chaite corresponded with Elaine Reiss—who was general counsel and a deputy commissioner at DoITT—but later Bruce Regal from the corporation counsel's office took over corresponding with Mr. Chaite at Ms. Reiss' request.⁴⁵

44 See Letter from Chaite to Reiss, Dkt. No. 485-3 at 223 (Sep. 19, 1999); Letter from Reiss to Chaite, Dkt. No. 485-3 at 225 (Nov. 3, 1999); Letter from Reiss to Chaite, Dkt. No. 485-3 at 226 (Nov. 9, 1999); Letter from Reiss to Chaite, Dkt. No. 485-3 at 227 (Nov. 9, 1999); Letter from Chaite to Reiss, Dkt. No. 485-3 at 230 (Nov. 14, 1999); Letter from Regal to Chaite, Dkt. No. 485-3 at 233 (Nov. 19, 1999); Letter from Chaite to Regal, Dkt. No. 485-3 at 246 (Nov. 24, 1999).

45 See Letter from Reiss to Chaite, Dkt. No. 485-3 at 227 (Nov. 9, 1999) (indicating that her title was both deputy commissioner and general counsel); Letter from Regal to Chaite, Dkt. No. 485-3 at 233-34 (Nov. 19, 1999) (first letter from Regal to Chaite); see also Regal Dep., Dkt. No. 525-1 at 12 (Q Who was it who asked you to get involved specifically with Best back in the 1999 time frame? ... A To the best of my recollection that was Elaine Reiss.").

The fall 2000 correspondence touched upon two main subjects. The first topic of discussion was an extension of the deadline to complete the FA application. As the deadline approached, Mr. Chaite explained to DoITT that he had not completed the FA application because his hope was to sell his payphones.⁴⁶ Mr. Chaite asked for an extension so that he could complete the sale and avoid the need to complete the FA process.⁴⁷ Furthermore, he questioned DoITT's authority to set any deadline, pointing out that although Local Law 68 provided for a deadline for PPT operators who had not been approved for a franchise by the FCRC, there was no deadline to complete the FA application process after FCRC approval.⁴⁸ In response, DoITT granted Mr. Chaite the same extension to November 30 that it also offered to several other companies, but DoITT reiterated that Best's FA application and its payphones would be at risk if it missed that deadline.⁴⁹ Mr. Regal also explained that the deadline was not contained in Local Law 68 but was instead a practical deadline imposed by DoITT.⁵⁰ In response, Mr. Chaite asked for another extension to complete a sale.⁵¹

46 See Letter from Chaite to Reiss, Dkt. No. 485-3 at 223 (Sep. 19, 1999); Letter from Chaite to Regal, Dkt. No. 485-3 at 246 (Nov. 24, 1999).

47 See Letter from Chaite to Reiss, Dkt. No. 485-3 at 223 (Sep. 19, 1999); Letter from Chaite to Regal, Dkt. No. 485-3 at 246 (Nov. 24, 1999).

48 See Letter from Chaite to Regal, Dkt. No. 485-3 at 246 (Nov. 24, 1999); see also L.L. 68 §§ 6(a) (providing that interim registry rights would expire thirty days after either the failure to respond to an RFP, the DoITT commissioner had determined not to recommend the approval of a franchise to the FCRC, or after the FCRC had declined to approve a franchise agreement with the applicant).

49 See Letter from Reiss to Chaite, Dkt. No. 485-3 at 227 (Nov. 9, 1999); Letter from Regal to Chaite, Dkt. No. 485-3 at 233 (Nov. 19, 1999); see also Letter to Americall Payphone LLC, Dkt. No. 485-3 at 236 (Nov. 19, 1999).

50 Letter from Regal to Chaite, Dkt. No. 485-3 at 233 (Nov. 19, 1999).

51 See Letter from Chaite to Regal, Dkt. No. 485-3 at 246 (Nov. 24, 1999).

The second topic of conversation was Mr. Chaite's displeasure with what he believed was DoITT's favoritism of an industry group that he was not a member of, the Independent Payphone Association of New York ("IPANY").⁵² Mr. Chaite claimed that IPANY consisted of competitors who were hostile to him, and that DoITT's holding meetings with IPANY that were not publicly disclosed disadvantaged him.⁵³ Mr. Chaite also complained that the requirement to obtain a franchise constituted a barrier to exit and entry of the telecommunications business, and that he had some issues with the content of the franchise agreement.⁵⁴ In response, Mr. Regal stated to Mr. Chaite that the franchising process had been open and did not constitute a barrier to entry or exit, and that Mr. Chaite should feel free to correspond with DoITT directly and not through IPANY.⁵⁵

52 See Letter from Chaite to Reiss, Dkt. No. 485-3 at 230-31 (Nov. 14, 1999).

53 See Letter from Chaite to Reiss, Dkt. No. 485-3 at 230 (Nov. 14, 1999) ("Mr. Novick threatened to ‘bury’ me if I messed with his business again.... Mr. Novick ... [also said] that both of my companies must join IPANY otherwise both companies would be barred [from participating in the association security bond]. This is clearly in violation of the franchise agreement which states that in order for an association to receive special treatment for the security bond it must be open to all franchisees... It is extremely unreasonable for you to tell me to contact my competitors to get permission to attend a meeting that a small group of them arranges with the agency that regulates my two businesses. This is especially true in light of the president of IPANY's threat."); see also id. at 231 ("[Y]ou and Mr. Allison both stated at the October 26, 1999 meeting that the deadline would be extended I believe to January 1, 2000 not November 15, 1999 that you now state in your letters. This is information which I would not have had had I not attended, uninvited, this meeting with the ‘consultative group.’ "); Letter from Reiss to Chaite, Dkt. No. 385-3 at 227 (Nov. 9, 2000) (letter instructing Mr. Chaite that the "meeting held on October 26, 1999 and that you attended was in response to a request from IPANY.... DoITT is willing to meet with an informal ‘consultative group’ of PPT franchisees. DoITT will not determine the makeup of the representative group. Since DoITT is not involved in deciding who is included in the group you will be well advised to contact IPANY and find out who is involved in creating the group.").

54 See Letter from Chaite to Regal, Dkt. No. 485-3 at 246 (Nov. 24, 1999).

55 Letter from Regal to Chaite, Dkt. No. 485-3 at 233 (Nov. 19, 1999).

D. DoITT Gives Best a Final Deadline of March 13, 2000.

By January 2000, DoITT still had not received the executed Franchise Agreement, nor had Best submitted additional evidence that it was in the process of a sale.⁵⁶ Consequently, DoITT sent Best a letter on January 13, 2000, indicating that because Best had not executed the Franchise Agreement and submitted the necessary closing documents, "Best has failed to meet an essential condition of FCRC approval, and the FCRC can therefore be deemed to have determined not to approve a franchise for Best."⁵⁷ In this same letter, DoITT put Best on notice that it had "sixty days following this notice to either (1) enter into an agreement to sell its public pay telephones to an entity that has been awarded a public pay telephone franchise by the City ... or (2) remove its public pay telephones from the City's property."⁵⁸ DoITT also offered a third option: Best could enter into the FA so long as it submitted executed copies of the FA and the rest of the required closing documents within sixty days, or March 13, 2000.⁵⁹ The letter expressly warned that if Best failed to adhere to one of the options within sixty days, "then any and all of Best's phones located on City property shall be subject to removal by the City, pursuant to Section 6-26(c) of Title 67 of the Rules, and Best shall be considered for all purposes a non-holder of a City franchise."⁶⁰ DoITT sent similar letters to ten other PPT companies who failed to return an executed FA with the required closing documents by January 13, 2000.⁶¹

56 See Letter from Regal to Chaite, Dkt. No. 485-3 at 248 (Jan. 13, 2000).

57 Letter from Regal to Chaite, Dkt. No. 485-3 at 248 (Jan. 13, 2000).

58 Id.

59 Id. at 248-9.

60 Id. at 249.

61 See, e.g. , Letter to Boomer Corporations, Inc., Dkt. No. 485-3 at 253 (Jan. 13, 2000).

On February 18, 2000, DoITT again reminded Best of the upcoming deadline and its consequences.⁶² Nevertheless, on March 8, 2000, Mr. Chaite indicated that he still had concerns with the FA and stated that he would not sign the FA in its current form.⁶³ Mr. Chaite also requested an extension beyond the March 13, 2000 deadline to finalize the sale of Best's stock and requested that if such an extension was unacceptable, that a meeting be arranged to discuss his concerns.⁶⁴ DoITT replied to the request for extension on March 10, 2000, denying his requested extension and indicating that if Best did not comply with the one of the options by the March 13 deadline then its payphones would be subject to removal.⁶⁵

62 See Letter to Best, Dkt. No. 485-3 at 277 (Feb. 18, 2000).

63 See Letter from Chaite to Regal, Dkt. No. 485-3 at 279 (Mar. 8, 2000)

64 Id.

65 See Letter to Chaite, Dkt. No. 485-3 at 281 (Mar. 10, 2000).

E. Best Lays out its Disagreements with the FA after the Expiration of the March 13, 2000 Deadline.

On the day of the March 13 deadline, an attorney for Best—Charles Ryans—took over corresponding with the City, raising several of Best's concerns with the FA.⁶⁶

66 See Letter from Ryans to Regal, Dkt. No. 485-3 at 284-85 (Mar. 13, 2000).

First, Mr. Ryans disputed DoITT's claim that Best had fallen out of compliance with the law on March 13, noting that nothing in Local Law 68 required Best to sign the FA within 60 days of January 13 and that none of the three statutory bases for the revocation of Best's interim permits applied.⁶⁷ Second, Mr. Ryans also conveyed that Mr. Chaite had "several legitimate concerns about various provisions of the franchise agreements ... including requirements that, in effect, foist onerous restrictions upon payphone providers, including restrictions on the sale of registered phones, which are clearly in violation of Section 253 of the Telecommunications Act of 1996."⁶⁸ To address these concerns, Mr. Ryans requested a meeting with DoITT so as "to avoid the need for costly litigation concerning this matter."⁶⁹

67 See Letter from Ryans to Regal, Dkt. No. 485-3 at 284 (Mar. 13, 2000) ("In your letter to Mr. Chaite of January 13, 2000 you stated that Best had sixty days to either (l) sell its payphones to another entity that has been awarded a franchise, or (2) remove its payphones from City property. You mention as your authority Section 6-23 of Title 67 of the Rules of the City of New York. However, Section 6-23 of Title 67 makes no mention of such a requirement.... Additionally, Section 6-22 of Title 67 calls for discontinuance of operation of an entity's payphones on City property ... if (a) the entity declines to respond to Request for Proposals, or (b) the Commissioner determines not to recommend the award of a franchise, or (c) the Franchise and Concession Review Committee determines not to approve a franchise to the entity and sixty days have elapsed following notification of such determination.")

68 Letter from Ryans to Regal, Dkt. No. 485-3 at 285 (Mar. 13, 2000).

69 Letter from Ryans to Regal, Dkt. No. 485-3 at 285 (Mar. 13, 2000).

The parties did eventually meet on March 20, 2000 with Mr. Chaite, Ms. Reiss, Mr. Regal, Assistant DoITT Commissioner Larry Allison, and one of DoITT's attorney's—Richard Berkley—all in attendance.⁷⁰ Mr. Chaite raised several issues during this meeting, but it was ultimately unproductive. At one point, for example, Mr. Chaite stated his belief that DoITT had given advance notice to two of his competitors that DoITT would waive the application fee for new payphone permits, and that this allowed his competitors to obtain a sizeable portion of the new payphone locations.⁷¹ When Mr. Chaite raised that specific observation, Mr. Allison left the meeting and said that Mr. Chaite was "pissing [him] off."⁷²

70 Chaite Decl. ¶ 13 (Dkt. No. 486-2); Samuelson Decl. ¶¶ 39-40.

71 Chaite Decl. ¶¶ 14-5 (Dkt. No. 486-2).

72 Id. ¶ 15.

After this meeting, DoITT and Best exchanged letters—an opening letter from Mr. Ryans on March 21, a reply from Mr. Regal on April 4, and a final response from Mr. Ryans on April 14—to flesh out their respective positions regarding Best's compliance with Local Law 68 and whether the City's regulatory scheme was legal and enforceable.⁷³

73 See Letter from Ryans to Regal, Dkt. No. 485-3 at 287 (Mar. 21, 2000); Letter from Regal to Ryans, Dkt. No. 485-3 at 290 (Apr. 4, 2000); Letter from Ryans to Regal, Dkt. No. 485-3 at 294 (Apr. 14, 2000).

Regarding the former, Mr. Ryans maintained that so long as Best had responded to requests for proposals, been recommended for a franchise by DoITT, and had a franchise approved by the FCRC, then Best remained in compliance with the law regardless of the FA's execution.⁷⁴ Furthermore, Mr. Ryans argued that even if Best were out of compliance, its payphones would not be subject to removal until Best received notification from the FCRC.⁷⁵ He also argued that Best's payphones could be subject to removal no earlier than June 15 because Best had paid its quarterly registration fee, which the city had accepted.⁷⁶ In response, Mr. Regal took the position that the FCRC had in effect decided not to grant Best a franchise because the approval was expressly conditioned on the execution of the FA.⁷⁷ Mr. Regal also argued that the law simply required notice of the FCRC's determination, not that the notice be sent from the FCRC itself, and that Mr. Chaite had received this notice from DoITT on January 13, 2000.⁷⁸

74 See Letter from Ryans to Regal, Dkt. No. 485-3 at 288 (Mar. 21, 2000) ("I would also like to point out that Best is not in any violation of Local Law 68 in refusing to sign the franchise document. Paragraph six of Local Law 68 states that as long as the owner of a public pay telephone has responded to the Request for Proposals, has been recommended by the Commissioner and has been approved by the Franchise and Concession Review Committee, then such company is not required to remove or sell said public pay telephone.").

75 See id.

76 See Letter from Ryans to Regal, Dkt. No. 485-3 at 296 (Apr. 14, 2000) ("As for the legality of Best occupying City property, Best hand delivered its quarterly registry fee to the City on March 13, 2000. Therefore, even if your positions are correct ... the fees paid by my client for its payphones to occupy the City's property will not expire until June 15, 2000.").

77 See Letter from Regal to Ryans, Dkt. No. 485-3 at 291 (Apr. 4, 2000) ("You claim that Best is not in violation of Local Law 68. But ... the FCRC approved franchises for Best and New only on the express condition that these companies execute the franchise agreement as approved by the FCRC.... Best and New thus fall in the category described in clause (iii) of subsection (a) of Section 6 of Local Law 68 of 1995").

78 See id. ("Your claim that notice of the FCRC's determination must come from the FCRC is incorrect. Local Law 68 requires only that there be notice to a company of the FCRC's determination (which Mr. Chaite [sic] received in my letter of January 13, 2000) not that such notice be sent by the FCRC.").

Regarding the legality of the regulatory scheme, Mr. Ryans raised several specific arguments, including: (1) that the City was not charging fees in a competitively neutral manner, as required by the TCA, because it had waived the $59.00 permit fee for some companies;⁷⁹ (2) that the franchise fees charged by the City were not "fair and reasonable" as required by the TCA because the fees were not based on the City's costs but rather on the revenue of franchisees;⁸⁰ (3) that the fee scheme was not competitively neutral because the escalating flat-fee for building-line phones would require Best to pay at least 20% of its revenues while the operators of curb-line phones—who were, effectively, just Bell Atlantic—were charged a flat 10% fee.⁸¹ In response, Mr. Regal pointed to a recently decided case— TCG Detroit v. City of Dearborn , 206 F.3d 618 (6th Cir. 2000) —for the proposition that the TCA did not define "fair and reasonable" compensation as limited to costs,⁸² a characterization that Mr. Ryans disputed in his final letter.⁸³

79 See Letter from Ryans to Regal, Dkt. No. 485-3 at 294 (Apr. 14, 2000) ("Furthermore, pursuant to Section 253(c) of the Telecom Act of 1996, management of the public rights-of-way by the City and fees pertaining to use of public rights-of-way must be competitively neutral. By charging non-Bell Atlantic companies a $59.00 permit fee per phone and waiving the permit fee for Bell Atlantic's phones, the City is clearly not acting in a ‘competitively neutral’ and ‘nondiscriminatory’ manner as required by Section 253(c) of the Telecom Act of 1996.").

80 See id. at 294-95 (Apr. 14, 2000) ("As for the Franchise Fees, even if the Federal Courts in this district would find that ‘fair and reasonable’ did not mean fees should be cost based, the court would assuredly find the City's compensation scheme to be unfair and unreasonable.").

81 See Letter from Ryans to Regal, Dkt. No. 485-3 at 295-96 (Apr. 14, 2000) ("As to the issue of the imposition by the City of a flat fee for building line phones while curb line phones pay a percentage of revenue generated .... [not] only is such a policy discriminatory in violation of Section 253(c) of the Telecom Act of 1996, it is also not competitively neutral, making the policy a further violation of the Act. Additionally, as time goes by, as fees rise and revenue falls, the amount that building-line pay telephones pay will be far in excess of the 10% Bell Atlantic pays with the disparity increasing year after year ... With all things considered ... the City's compensation is at least 20% of revenues and will increase annually as revenues of IPPs continue to fall.").

82 See Letter from Regal to Ryans, Dkt. No. 485-3 at 291 (Apr. 4, 2000) ("The concept that municipalities may require franchise compensation that represents, in effect, a rental reflecting the value of the franchise granted, not limited to costs, has been a well-grounded concept in law from at least the United States Supreme Court's decision in St. Louis. v. Western Union Telegraph Company ... and continuing as recently as just a few weeks ago in the Sixth Circuit Court of Appeals decision in TCG Detroit v. City of Dearborn ... which specifically found that the 1996 Telecommunications Act does not limit local franchise compensation to ‘costs.’ ").

83 Letter from Ryans to Regal, Dkt. No. 485-3 at 296 (Apr. 14, 2000).

In the letters, Mr. Ryans advised that Best would "have to take appropriate action to protect its equitable and property interests if the City" did not either (1) grant an extension of time to sell his company or, (2) "modify the franchise framework to conform to City, State and Federal law so that the current owner of Best could sign a legal document."⁸⁴ In the final letter, Mr. Ryans also notified the city that Mr. Chaite had "an interested buyer for its payphone business" and requested that DoITT "forward to me the necessary documents ... and information that the buyer needs from the City in order to facilitate an orderly transfer."⁸⁵

84 Letter from Ryans to Regal, Dkt. No. 485-3 at 288 (Mar. 21, 2000).

85 Letter from Ryans to Regal, Dkt. No. 485-3 at 296 (Apr. 14, 2000).

F. Best Signs the FA under Duress after the City Removes Payphones without Notice.

Best never received a response from the City—no information to pass along to the potential buyer, and no further correspondence regarding the FA's compliance with the TCA.⁸⁶ Instead, the City removed twenty-three of Best's payphones and issued notices of violation ("NOVs") charging $23,000 in fines relating to Best's operation of these PPTs between May 8 and May 10, 2000.⁸⁷ Mr. Regal has said that DoITT did this in order to "provoke some action to comply with the law by Best."⁸⁸

86 See Letter from Ryans to Regal, Dkt. No. 486-4 at 122 (May 9, 2000) ("My client has been awaiting a response to my April 14 letter and did not anticipate that the City would begin to remove its payphones prior to a response from you to the request in that letter for documents and information needed by the prospective buyer from the City.").

87 See Chaite Decl. ¶ 17 (Dkt. No. 486-2); see also Notice of Violation, Dkt. No. 486-4 at 126.

88 Regal Dep. at 61:2-4 (Dkt. No. 530-1).

On May 10, 2000, Best delivered to the City certain closing documents and an executed FA, which Best annotated to state that its execution was "under duress caused by the City's actions in removing its payphones from City property, and [ ] under protest of the City's authority to implement portions of the agreement which Best believes to be in violation of certain State and Federal laws," and "reserv[ing] its rights to challenge the Franchise Agreement," and stating that "the Franchise Agreement signed by Best shall not be construed as a waiver of any such rights."⁸⁹

89 Signed Franchise Agreement, Dkt. No. 485-4 at 129 (May 10, 2000); see also Legal Op. Letter, Dkt. No. 491-10 at 2-3 (May 10, 2000).

The next day, Mr. Ryans and Mr. Regal spoke on the phone.⁹⁰ During the call, Mr. Regal said that Best would not receive a franchise so long as Mr. Chaite was the owner.⁹¹ Consistent with that statement, Mr. Regal sent Best that same day a proposed agreement that required Best to acknowledge that it failed to timely submit the FA and had lost the FCRC's approval of a franchise.⁹² The proposed agreement also outlined an avenue for Best to sell its PPTs provided that Best consent to DoITT removing up to five PPTs a week until the sale was completed.⁹³ DoITT purports to have refused to accept the FA and made this counteroffer because the FA: (1) was not submitted by the March 13, 2000 deadline; (2) it contained unilateral alterations to the language of the agreement; and (3) because it failed to contain all required closing documents.⁹⁴ Mr. Chaite, however, maintains that he submitted all required documentation.⁹⁵

90 Chaite Decl. ¶ 21

91 Chaite Decl. ¶ 21 ("Later that day, in a telephone conversation that I overheard, Mr. Regal told Mr. Ryans that Best could not have a franchise as long as I was the owner."). This statement is not hearsay because Mr. Chaite personally overheard it and because it was a statement of a party-opponent. See Fed. R. Evid. 801(d)(2). It is, therefore, admissible evidence.

92 See Fax to Best, Dkt. No. 486-4 at 132 (May 11, 2000).

93 See id. at 129.

94 Samuelson Decl. ¶ 49. Defendants have at times reiterated some or all of these reasons. See, e.g. , Tr., In re Best Payphones, Inc. , 01-b-15472 (Bankr. S.D.N.Y. Jan. 16, 2002) (Dkt. No. 486-7 at 2-5) (corporation counsel stating that DoITT did not accept Best's Franchise Agreement because "it was [submitted] with a reservation of rights, which was not acceptable").

95 Chaite Decl. ¶ 19.

Best did not agree to the terms of Mr. Regal's counter-proposal. Instead, in a series of letters in May, Best's attorney indicated that Best was in communication with a prospective buyer about the possible sale of Best's business.⁹⁶ In order to help close the deal, Best requested that the City not remove any more of its payphones until Best was able to sell its assets.⁹⁷ Best indicated that if DoITT did not abstain from removing Best's phones then Best would seek legal relief.⁹⁸

96 Samuelson Decl. ¶ 50; Chaite Decl. ¶ 36; see also Letter from Ryans to Regal, Dkt. No. 485-4 at 132 (May 15, 2000); Letter from Ryans to Regal, Dkt. No. 486-4 at 142 (May 18, 2000); Letter from Ryans to Regal, Dkt. No. 485-4 at 133 (May 30, 2000).

97 See Letter to Regal, Dkt. No. 486-4 at 142 (May 18, 2000).

98 See id.

G. Best Disputes the Validity of the May 2000 Removal.

In early June, Mr. Chaite wrote directly to DoITT Commissioner, Allan Dobrin, and Mr. Ryans wrote to Mr. Regal to contest the validity of the removal of Best's phones without notice.⁹⁹ In these letters, they both noted that Local Law 68 required the Commissioner to give a PPT operator notice of an alleged violation and an opportunity to contest that notice before removing payphones from the PROW.¹⁰⁰ In response, Commissioner Dobrin wrote Best on June 19, 2000 to issue formal notice that its phones were operating in violation of the law.¹⁰¹ And although Mr. Ryans did write back to contest the removability of Best's phones,¹⁰² Commissioner Dobrin sent Best a final notice on August 4, 2000 that he had determined that Best was in violation of Admin. Code § 23-402.¹⁰³ On August 8, 2000, Mr. Regal also responded to some of Mr. Ryans' letters to reiterate that because Best was unlawfully operating its PPTs on the PROW, Best's PPTs were subject to removal at any time.¹⁰⁴ Mr. Regal indicated, however, that DoITT would consider entering into an agreement with Best in which DoITT would limit any removal of Best's phones provided that Best present DoITT with evidence that "concrete, provable and binding steps are being taken by Best to complete a transaction which would place Best's phones under the ownership of an existing franchisee."¹⁰⁵ In reply, DoITT received a copy of an executed letter of intent by New York City Telecommunications, Inc. to acquire Best's assets on or about August 10, 2000.¹⁰⁶

99 Letter from Chaite to Dobrin, Dkt. No. 486-4 at 144 (June 2, 2000); Letter from Ryans to Regal, Dkt. No. 485-6 at 17 (June 5, 2000).

100 See Letter from Chaite to Dobrin, Dkt. No. 486-4 at 144 (June 2, 2000); Letter from Ryans to Regal, Dkt. No. 485-6 at 17 (June 5, 2000); see also NYC Administrative Code § 23-408(i)(1) ("If the commissioner has reasonable cause to believe that an owner ... has violated the provisions of this chapter ... the commissioner may (i) notify the owner of the condition identified by the commissioner as a violation and specify the action that must be taken to correct the condition in such manner and within such period of time as shall be set forth in such notice, and (ii) shall afford the owner an opportunity to contest the commissioner's notice in a manner to be set forth in rules of the commissioner. Upon final determination by the commissioner and failure of such owner to correct the condition in the manner and within the period of time specified by the commissioner, the commissioner shall be authorized, at his or her discretion ... to remove or cause the removal of any public pay telephone.").

101 Letter from Dobrin to Chaite, Dkt. No. 485-4 at 135-36 (June 19, 2000) ("You are hereby notified that the undersigned has reasonable cause to believe that Best Payphones Inc.... has violated the provisions of Chapter 4 of Title 23.... Best shall have an opportunity to contest the finding and intention to remove described in the first paragraph of this letter by responding to this letter within five (5) business days."); Letter from Dobrin to Chaite, Dkt. No. 485-4 at 138 (June 19, 2000).

102 See Letter from Ryans to Dobrin, Dkt. No. 485-4 at 141 (June 29, 2000).

103 Letter from Dobrin to Best, Dkt. No. 485-4 at 172 (Aug. 4, 2000).

104 Letter from Regal to Ryans, Dkt. No. 486-4 at 149 (Aug. 8, 2000).

105 Letter from Regal to Ryans, Dkt. No. 486-4 at 149-51 (Aug. 8, 2000).

106 Samuelson Decl. ¶ 56; see also Letter from New York City Telecomm., Inc. to Best, Dkt. No. 485-4 at 174 (Aug. 10, 2000).

Throughout the summer and fall of 2000 the parties continued to participate in hearings before the Environmental Control Board ("ECB") in connection with the $23,000 in fines that the City sought to collect from Best in connection with the NOVs it issued in May.¹⁰⁷ The ECB administrative law judge Bernard A. Twomey ultimately found that the NOVs should be dismissed because DoITT lacked the authority to determine that Best had lost the FCRC's approval for a franchise.¹⁰⁸

107 Samuelson Decl. ¶ 45.

108 See ECB Decision, Dkt. No. 486-10 at 27-8 (Nov. 7, 2001).

In response to this decision, DoITT attempted to have the FCRC rescind Best's approval.¹⁰⁹ Best's pending bankruptcy mooted the issue, however; the bankruptcy judge vacated the ECB's decision because it violated a previously ordered stay, and the judge also issued a temporary restraining order to prevent the FCRC from voting on the proposed resolution.¹¹⁰ H. Best Initiates Litigation against the City.

109 See Memo to FCRC, Dkt. No. 492-6.

110 See In re Best Payphones , 2002 WL 1358650, at *5, 2002 Bankr. LEXIS 1939, at *18 (Bankr. S.D.N.Y. June 24, 2002).

During this process, Best and an affiliate wholly owned by Mr. Chaite—the New Phone Co., Inc. ("New Phone")—initiated litigation on several fronts against the City.

1. Best's Affiliate files a Suit Against the City.

On April 5, 2000 New Phone filed a lawsuit against the City, IPANY, and some other PPT competitors.¹¹¹ New Phone alleged that DoITT had favored IPANY members by giving them advance notice that it would waive the $59.00 application fee for PPT permits and that this violated the TCA.¹¹² New Phone served the City with this suit on November 29, 2000.¹¹³ Ultimately, the complaint in this action was dismissed, and the Second Circuit affirmed the dismissal on December 7, 2009.¹¹⁴

111 See Compl., New Phone Company, Inc. v. Indep. Payphone Ass'n of New York , 00-cv-2007 (E.D.N.Y. Apr. 5, 2000) (Dkt. No. 486-4 at 90-116).

112 See id. ¶¶ 9-12, 113-6.

113 Chaite Decl. ¶ 52 (Dkt. No 486-2).

114 New Phone Co. v. N.Y.C. , 355 F. App'x 501, 502-03 (2d Cir. 2009).

2. Best Challenges DoITT's Decisions in an Article 78 Proceeding.

Best initiated an Article 78 proceeding on July 11, 2000 in Supreme Court, Kings County (the "Article 78 Proceeding") seeking an order: (1) directing that DoITT grant Best a franchise based on the documents submitted to DoITT on May 10, 2000; (2) directing DoITT to allow Best to sell its assets or capital stock; and (3) if necessary, directing DoITT to allow Best to reapply for a franchise.¹¹⁵ Best served the City with the notice of this Petition on September 29, 2000.¹¹⁶

115 See Pet. at 20, Best Payphones, Inc. v. Dep't of Info. Tech. and Telecomm. (N.Y. Supt. Ct. July 11, 2000) (Dkt. No. 485-4 at 148-167).

116 Chaite Decl. ¶ 51 (Dkt. No. 486-2).

The Article 78 Proceeding was ultimately dismissed on statute of limitations and untimely service grounds.¹¹⁷ The court determined that Mr. Regal's January 13, 2000 letter had given Best notice of DoITT's decision, and that the four month statute of limitations had begun to run on that date.¹¹⁸ This decision was affirmed by the Appellate Division, Second Department and the New York Court of Appeals, both of which affirmed on the statute of limitations grounds and did not reach the merits of Best's case.¹¹⁹

117 See Best Payphones, Inc. v. Dep't of Info. Tech. and Telecomm. , 5 N.Y.3d 30, 33-4, 799 N.Y.S.2d 182, 832 N.E.2d 38 (N.Y. 2005).

118 See id.

119 See 767 N.Y.S.2d at 650 (N.Y. App. Div. 2003), aff'd , 5 N.Y.3d 30, 799 N.Y.S.2d 182, 832 N.E.2d 38 (2005).

3. Best files for Bankruptcy.

On October 23, 2001, Best filed for Chapter 11 Bankruptcy in the Southern District of New York.¹²⁰ During the pendency of the bankruptcy proceeding, the City maintained that "since Best failed to timely respond to the letter dated January 13, 2000, and therefore failed to meet the condition for the grant of a payphone franchise by the [FCRC], that Best no longer ha[d] interim registry rights relating to any of its payphones."¹²¹ I. Best and the City Engage in Unfruitful Settlement Discussions.

120 Samuelson Decl. ¶ 69.

121 Samuelson Decl. ¶ 74; see also Letter, In re Best Payphones, Inc. , 01-b-15472 (Bankr. S.D.N.Y. Jan. 28, 2003) (Dkt. No. 485-4 at 263).

During the pendency of this litigation, Best repeatedly sought DoITT's permission to either purchase a franchise, transfer its franchise rights, or to sell its phones to another company.

DoITT's initial position, set out in a December 5, 2000 letter from Mr. Regal, was that the City would accept and execute a franchise agreement if, among other things, Mr. Chaite's companies terminated all pending claims or lawsuits against DoITT and the City, released the City from any claims to date, and provided an unconditional and clean corporate authorization for the FA.¹²² DoITT also indicated that it would consider recommending Best's purchase of an existing franchise to the FCRC in exchange for the same conditions.¹²³

122 Letter from Regal to Sobel, Dkt. No. 485-4 at 182-3 (Dec. 5, 2000).

123 Id.

Best never accepted this offer to settle the litigation,¹²⁴ and DoITT accordingly refused to approve Best's attempts to save its business. First, on December 22, 2000, U.S. Telco requested DoITT's permission to transfer its franchise rights to Mr. Chaite.¹²⁵ DoITT responded by letter on February 2, 2001, indicating that U.S. Telco's proposed transfer would require FCRC approval, and further implied that it would not approve such a transfer because Best had not responded to DoITT's settlement proposal.¹²⁶

124 See Aff. of Debra Samuelson, Dkt. No. 485-4 at 195-6 (Apr. 11, 2001).

125 See Letter from U.S. Telco, Inc. to Dobrin, Dkt. No. 485-4 at 185 (Dec. 22, 2000).

126 See Letter from Regal to U.S. Telco, Inc., Dkt. No. 485-4 at 190 (Feb. 2, 2001).

Later, on August 17, 2001, Best sought DoITT's approval of an agreement between Best and Universal Telecommunications, Inc. ("Universal"), which would permit the sale of Best's assets to Universal.¹²⁷ DoITT responded that in order for any relationship with Best to be approved, Universal's compliance with the terms of its own FA would have to be resolved, as Universal had failed to pay the required franchise fees for approximately nine months.¹²⁸

127 Samuelson Decl. ¶ 68; Letter from Best to DoITT, Dkt. No. 485-4 at 234 (Aug. 17, 2001).

128 Samuelson Decl. ¶ 68; Letter from DoITT to Universal, Dkt. No. 485-4 at 236 (Aug. 30, 2001).

J. DoITT Again Removes Best's Payphones in August 2001.

The Supreme Court of New York dismissed Best's Article 78 petition on July 27, 2001.¹²⁹ Shortly afterwards, on August 9, 2001, DoITT sent a letter demanding that Best take one of two options within five business days: either remove the PPTs from the City's property, or provide DoITT with written evidence that its PPTs were permitted or did not require permits.¹³⁰ Best failed to comply with the City's August 9, 2001 notice.¹³¹ Accordingly, on August 23, 2001, DoITT removed thirty-one of Best's PPTs and issued another 37 NOVs.¹³² Later, once the bankruptcy court abstained from hearing the issue, DoITT pursued the 37 August 2001 NOVs as well as the original 23 May 2000 NOVs before the ECB.¹³³ The ECB judge agreed with the earlier judge's finding that DoITT did indeed lack the authority to rescind the FCRC's approval of Best's franchise application.¹³⁴ However, the judge also found that the Article 78 petition precluded Best from asserting that claim and so the judge found that Best could no longer challenge DoITT's decision to rescind Best's franchise.¹³⁵ The judge accordingly sustained most of the NOVs.¹³⁶

129 See Best Payphones , 767 N.Y.S.2d at 649.

130 Letter from Greaney to Chaite, Dkt. No. 485-4 at 198 (Aug. 9, 2001).

131 Samuelson Decl. ¶ 67.

132 See Memo. from Greaney to Cangemi, Dkt. No. 485-4 at 229 (Aug. 23, 2001); ECB Decision and Order, Dkt. No. 492-15 at 3 (Oct. 25, 2005).

133 ECB Decision and Order at 2 (Oct. 25, 2005) (Dkt. No. 492-15).

134 Id. at 5.

135 Id. at 5-6.

136 The judge found that DoITT had failed to prove that nine of the payphones were on city property unlawfully, and so he dismissed those NOVs. Id. at 8-9.

K. Best Completes a Sale of its Assets in June 2003.

Ultimately, Best was able to sell its assets to BAS Communications, Inc. ("BAS"). Even though Best had not settled its pending litigation with the City, DoITT informed BAS on March 3, 2003 that if BAS purchased Best's phones then it would be willing to give BAS a grace period to obtain permits as if they had been on BAS's own interim registry.¹³⁷

137 See Letter from DoITT to BAS, Dkt. No. 492-10 at 2-3 (Mar. 3, 2003).

Best then entered into an asset purchase agreement with BAS on April 22, 2003.¹³⁸ Later, on May 29, 2003 DoITT executed the agreement that it had discussed previously with BAS, thereby giving BAS a six-month transition period.¹³⁹ On June 10, 2003, the deal between BAS and Best was executed.¹⁴⁰

138 See Asset Purchase Agreement, Dkt. No. 492-11 at 2 (Apr. 22, 2003).

139 See Letter from DoITT to BAS, Dkt. No. 485-4 at 274 (May 29, 2003).

140 See Email from Sandys to Shor, Dkt. No. 485-4 at 279 (June 10, 2003).

SCOPE OF THE ACTION AT SUMMARY JUDGMENT

At the outset, there is a discrepancy between the parties' view of Best's remaining claims. Best believes that it has claims for an unconstitutional condition, First Amendment retaliation, violation of the Equal Protection clause, and various due process and takings claims. The TAC, furthermore, appears to also contain a Section 1983 conspiracy claim.

Defendants argue that Best does not have an unconstitutional condition claim. Furthermore, they believe that all of Best's claims arising from events that occurred before Best filed its Article 78 petition (the "pre-litigation claims") are no longer in the case.

For the reasons discussed below, this Court recommends finding that the following claims remain in the case: (1) violations of the Equal Protection clause; (2) First Amendment retaliation; (3) Section 1983 conspiracy; and (4) unconstitutional condition. This Court further recommends finding that Best's pre-litigation claims for damages remain in the case, and that all other legal theories have either been dismissed or abandoned at summary judgment.¹⁴¹ I. Best's Pre-Litigation Claims Remain in the Case.

141 See Taylor v. City of New York , 269 F. Supp. 2d 68, 75 (E.D.N.Y. 2003) ("Federal courts have the discretion to deem a claim abandoned ‘when a party moves for summary judgment on one ground and the party opposing summary judgment fails to address the argument in any way.’ ").

Back in 2007, Defendants moved to dismiss all twelve claims for relief in Best's Second Amended and Supplemental Complaint.¹⁴² For myriad reasons, Judge Matsumoto dismissed everything except "Claim 1 (First Amendment) and Claim 3 (Equal Protection), insofar as Best seeks damages based on those claims."¹⁴³

142 See Notice of Mot. (Dkt. No. 150); see also Second Amended and Supplemental Complaint (Dkt. No. 116).

143 Matsumoto R & R at 111.

Defendants now argue that the R & R not only dismissed the portions of those claims seeking non-monetary relief, but that it also dismissed all pre-litigation claims due to the preclusive effect of the Article 78 petition.¹⁴⁴ In the alternative, Defendants also renew their claim preclusion argument on the merits.¹⁴⁵ For the reasons discussed below, neither argument is persuasive.

144 For some reason, Defendants only argue that Judge Matsumoto dismissed the First Amendment pre-litigation claims. See Defs.' Opp. at 8 (Dkt. No. 488-4). Their logic, however, extends to the Equal Protection claims, and Judge Matsumoto's R & R addresses the preclusion of both claims together as "retaliation" claims. See, e.g. , Matsumoto R & R at 44, 46 (Dkt. No. 192). This Court will address this argument as if Defendants had argued it to its fullest extent.

145 See Defs.' Opp. at 9-14 (Dkt. No. 488-4).

A. The Law of the Case does not Bar Best's Pre-Litigation Claims.

Defendants argue that the Matsumoto R & R dismissed the pre-litigation claims and that this dismissal is the law of the case.¹⁴⁶ Under the law of the case doctrine, once a district court has made an interlocutory decision " ‘that decision should generally be adhered to by that court in subsequent stages in the same case’ ... unless ‘cogent’ and ‘compelling’ reasons militate otherwise."¹⁴⁷ Thus, if Judge Matsumoto had dismissed all pre-litigation claims, then that decision would presumptively stand. Judge Matsumoto, however, made no such ruling, and so the law of the case does not bar the pre-litigation claims.

146 See id. at 8.

147 United States v. Quintieri , 306 F.3d 1217, 1225 (2d Cir. 2002) (citations omitted).

This first clue here is that nothing in the R & R states that any pre-litigation claims should be dismissed. Instead, the holding is quite explicit and straightforward: the First Amendment and Equal Protection claims survived except in so far as they sought relief other than damages.¹⁴⁸

148 See Matsumoto R & R at 111 (Dkt. No. 192).

Acknowledging this fact, Defendants argue that the R & R impliedly dismissed the pre-litigation claims.¹⁴⁹ Admittedly, Judge Matsumoto did say in the body of the R & R that "the claims that were raised or could have been raised in Best's prior article 78 proceeding are barred by res judicata."¹⁵⁰ But nothing in the R & R addresses whether the pre-litigation claims fall under that umbrella. Indeed, the R & R rather explicitly only addresses the preclusive effect of the Article 78 petition on post-litigation claims.¹⁵¹ Thus, it simply "makes no sense for the ‘law of the case’ doctrine to apply where, as here, there is no prior ruling on an issue."¹⁵²

149 See Defs.' Opp. at 8 (Dkt. No. 488-4).

150 Matsumoto R & R at 38 (Dkt. No. 192) (emphasis omitted).

151 See id. at 44 (rejecting res judicata argument with respect to some of claims 1 through 6 because the "retaliation claims are not barred by Best's article 78 petition because the event that gave rise to plaintiff's retaliation claims is the article 78 proceeding itself").

152 Arco Capital Corp. v. Deutsche Bank AG , 986 F. Supp. 2d 296, 307 (S.D.N.Y. 2013) (citing Zdanok v. Glidden Co., Durkee Famous Foods Div. , 327 F.2d 944, 953 (2d Cir. 1964) ).

Even if Judge Matsumoto's R & R had impliedly limited the claims to post-litigation events, that implied decision would be irrelevant to the scope of claims remaining in the TAC. Judge Matsumoto's R & R pertains to the sufficiency of claims in the Second Amended Complaint.¹⁵³ Since then, Best has filed a Third Amended Complaint that clearly alleges incidents of retaliation from before the Article 78 petition was filed or served.¹⁵⁴ Thus, to the extent that Judge Matsumoto's R & R did dismiss the pre-litigation claims, the TAC effectively reinstated them.¹⁵⁵

153 See Matsumoto R & R at 1-2 (Dkt. No. 192).

154 See, e.g. , TAC ¶ 181 ("Despite the fact that Best continued to satisfy all of the requirements under the LL 68 and 67 RCNY, on May 8, 9, and 10, 2000, DoITT arbitrarily and without any legal or procedural justification removed twenty-three of Best's PPTs and simultaneously issued twenty-three Notices of Violation purportedly pursuant to NYCAC § 23-402, for operating a PPT without a permit.").

155 See Pate Co. v. RPS Corp. , 685 F.2d 1019, 1026 (7th Cir. 1982) ("The district court, however, subsequently ... permitted the filing of a second amended complaint containing the four dismissed claims, thus in effect reinstating the claims."); see also Jean-Laurent v. Wilkerson , 461 F. App'x 18, 23 (2d Cir. 2012) (affirming district court's refusal to allow plaintiff to proceed to trial with claims that had survived summary judgment but that were also absent from the subsequent amended complaint); Dluhos v. Floating & Abandoned Vessel , 162 F.3d 63, 68 (2d Cir. 1998) ("[I]t is well established that an amended complaint ordinarily supersedes the original, and renders it of no legal effect.").

Furthermore, even if the R & R had dismissed the pre-litigation claims, and even if the TAC's reinstatement of those claims was an oversight, this Court would still reject Defendants' law of the case argument because they have already waived this objection. After Judge Matsumoto issued the R & R, the parties were ordered to meet and confer in order to "reach agreement as to which claims still remain in the complaint and which shall be stricken."¹⁵⁶ The parties reached an agreement regarding most of the paragraphs, and the Court then decided whether the few paragraphs in dispute had been dismissed by the R & R.¹⁵⁷ Only then did Plaintiff file the Third Amended Complaint reflecting the parties' agreement and the Court's order. Notably, Defendants did not object to the pre-litigation paragraphs in the TAC.¹⁵⁸

156 Minute Order (Nov. 26, 2008).

157 See Order at 3 (Dkt. No. 258) ("The Court previously ordered the parties to meet and confer as to which claims/paragraphs from the SAC remain valid after the dismissal. After one and half years of disputes, the parties have reported that they have reached an impasse as to only ten paragraphs: 3, 5, 9, 72, 153, 161, 162, 167, 169, and paragraph (j) of the wherefore clause, from Plaintiff's ‘pre-answer stipulation’.... I have reviewed the City's objections and I find its objections valid. Plaintiff is ordered to revise its ‘pre-answer stipulation’ accordingly and file the amended complaint reflecting those changes.").

158 The parties ultimately agreed to everything except for ten paragraphs, all of which the court ordered to be left out of the TAC. See Order at 3 (Dkt. No. 258).

Thus, the time for Defendants to raise this argument was eight years ago before discovery had closed. Everything remaining in the TAC was agreed to by Defendants as appropriate in light of the R & R, and so they have waived their law of the case objection.

B. Res Judicata does not Bar Best's Pre-Litigation Claims.

In the alternative, Defendants renew the claim preclusion argument as to the pre-litigation claims.¹⁵⁹ Under New York law,¹⁶⁰ claim preclusion, traditionally known as res judicata , applies when: (1) the previous action involved an adjudication on the merits; (2) the previous action involved the same parties or others in privity; and (3) the claims asserted in the subsequent action were, or could have been, raised in the prior action.¹⁶¹ There is no dispute that the first two elements apply here.¹⁶² The only remaining question is whether the claims here could have been raised in the Article 78 petition, and that answer hinges on whether or not the initial forum had the power to award the full measure of relief sought here.¹⁶³

159 Defs.' Opp. at 11 (Dkt. No. 488-4).

160 New York law governs the preclusive effect of final judgments issued by its courts. See Kremer v. Chemical Constr. Corp. , 456 U.S. 461, 466, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982) (citing 28 U.S.C. § 1738 ).

161 Pike v. Freeman , 266 F.3d 78, 91 (2d Cir. 2001) (citation omitted).

162 See also Matsumoto R & R at 37-39 (Dkt. No. 192) (finding that the dismissal on statute of limitations grounds was an adjudication on the merits and that the parties were sufficiently identical for res judicata to apply).

163 As a general rule, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred." Parker v. Blauvelt Volunteer Fire Co. , 93 N.Y.2d 343, 347, 690 N.Y.S.2d 478, 712 N.E.2d 647 (N.Y. 1999) (citation omitted). Best's claims here undisputedly fall under that definition. However, the "bar against later claims based upon the same cause of action is ... subject to certain limitations, one of which is that it will not be applied if the initial forum did not have the power to award the full measure of relief sought in the later litigation." Davidson v. Capuano , 792 F.2d 275, 278 (2d Cir. 1986) (citation omitted). The issue here is whether Best falls within the "full measure of relief" exception.

Best argues the answer is clearly no. A petitioner in an Article 78 proceeding may only obtain damages that are "incidental to the primary relief,"¹⁶⁴ whereas a plaintiff in a Section 1983 action faces no such limitation.¹⁶⁵ For that reason, both the Second Circuit and the New York Court of Appeals have held that claim preclusion "generally does not operate to bar a § 1983 suit following the resolution of an Article 78 proceeding, since the full measure of relief available in the former action is not available in the latter."¹⁶⁶ Defendants, however, believe recent developments call the validity of that precedent into question.¹⁶⁷ In some cases, plaintiffs have brought "hybrid" Article 78 proceedings and damages actions, and courts have routinely found that these hybrid proceedings bar subsequent actions for damages under Section 1983.¹⁶⁸ Defendants argue that the earlier Second Circuit and New York Court of Appeals precedent no longer apply because Best could have brought its claims as a hybrid proceeding.¹⁶⁹

164 N.Y. C.P.L.R. § 7806.

165 See, e.g. , BaRoss v. Greenlawn Volunteer Fire Dep't, Inc. , 2017 WL 2124424, at *4–5, 2017 U.S. Dist. LEXIS 74502, at *11 (E.D.N.Y. May 15, 2017) (stating that punitive damages are available for a prevailing plaintiff) (quoting Lee v. Edwards , 101 F.3d 805, 808 (2d Cir. 1996) ).

166 Goonewardena v. N.Y. State Workers' Comp. Bd. , 2016 WL 7439414, at *9, 2016 U.S. Dist. LEXIS 16552, at *24 (S.D.N.Y. Feb. 9, 2016) (citation omitted); see also Davidson , 792 F.2d at 282 (citation omitted) (finding that prior Article 78 petition did not bar Section 1983 claims because "the damages Finkelstein seeks in this civil rights case cannot be characterized as incidental to the primary relief sought in his second Article 78 proceeding"); Parker , 93 N.Y.2d at 348-9, 690 N.Y.S.2d 478, 712 N.E.2d 647 ("In plaintiff's prior article 78 proceeding, Supreme Court correctly dismissed his section 1983 civil rights damage claims as not incidental to the primary relief of reinstatement he sought. Therefore, the termination of the prior article 78 proceeding on the merits was not res judicata as to the section 1983 damage claims.").

167 Although Defendants have not raised this argument here, it was the original basis for their arguments in support of their motion to dismiss. See Memo. ISO Mot. Dismiss at 18-19 (Dkt. No. 152).

168 See, e.g. , Ponterio v. Kaye , 2007 WL 141053, at *7, 2007 U.S. Dist. LEXIS 4105, at *24 (S.D.N.Y. Jan. 22, 2007), aff'd , 328 F. App'x 671 (2d Cir. 2009) ; see also Sheffield v. Sheriff of the Rockland Cty. Sheriff Dep't , 393 F. App'x 808 (2d Cir. 2010) (finding that prior Article 78 petition precluded plaintiff's claims because "it is evident that Sheffield brought a ‘hybrid’ action encompassing an Article 75 petition, an Article 78 petition, and a plenary action for damages alleging violations of Title VII and defamation, and that the state court adjudicated it as such"); Monclova v. City of N.Y. , 2017 WL 5495804, at *16, 2017 U.S. Dist. LEXIS 218039, at *55 (E.D.N.Y. Mar. 31, 2017) (finding that prior Article 78 petition precluded claims because "plaintiff initiated his petition as a hybrid action seeking monetary damages for violations of Title VII claims"); Green Materials of Westchester v. Town of Cortlandt , 2015 WL 9302838, at *7 (S.D.N.Y. Dec. 21, 2015) (applying res judicata to preclude § 1983 action where plaintiff initially brought a "hybrid" Article 78 action seeking both Article 78 relief and declaratory judgment).

169 See Defs.' Mem. to Dismiss at 19-20 (Dkt. No. 152) ("Accordingly, without any difficulty whatsoever, Best was free to assert in its state court lawsuit all damages claims related to the series of transactions implicated therein.").

This Court agrees with Defendants that the growing prevalence of hybrid proceedings casts some doubt on the precedent's reasoning. This Court, however, disagrees with Defendants' argument because they have overstated the availability of hybrid proceedings. Thus, there is no reason to overrule clear and binding precedent.

1. The Nature of Article 78 Petitions and Hybrid Proceedings.

First, some context is necessary to understand the contours of this dispute. Unlike federal courts, which apply trans-substantive rules to "one form of action—the civil action,"¹⁷⁰ New York divides civil cases into two mutually exclusive buckets: actions and special proceedings.¹⁷¹ The general practice provisions of the CPLR govern actions.¹⁷² A special proceeding, by contrast, has different rules of procedure provided either by CPLR Article 4—the default set of procedures for special proceedings—or the specific authorizing statute.¹⁷³ These different rules are designed to provide "a fast and cheap way to implement a right."¹⁷⁴

170 Fed. R. Civ. P. 2.

171 N.Y. C.P.L.R. § 103(b) ("All civil judicial proceedings shall be prosecuted in the form of an action, except where prosecution in the form of a special proceeding is authorized.").

172 See Weinstein, New York Civil Practice, ¶ 103.05[3] (2018).

173 See Weinstein, New York Civil Practice, ¶ 103.05[3] (2018).

174 Davidson v. Capuano , 792 F.2d 275 (2d Cir. 1986) (citations and internal quotation marks omitted). For example, the CPLR generally provides that discovery may be obtained through notice, but Article 4 requires a court order, thereby providing a judicial check on delay. Compare N.Y. C.P.L.R. § 3102 with N.Y. C.P.L.R. § 408.

An Article 78 petition is one such special proceeding used to challenge administrative actions and decisions with unique rules of procedure.¹⁷⁵ Substantively, it "closely resembles review under the federal Administrative Procedure Act."¹⁷⁶ Similar to an APA claim, money damages under an Article 78 petition are limited to the equitable redress of the administrative action.¹⁷⁷ Hence the requirement that any damages be incidental to the primary relief.¹⁷⁸

175 David D. Siegel, New York Practice § 557 (5th ed. 2017) (quotation marks omitted) ("While the Article 78 proceeding has occasional uses against other than administrative agencies—it's available even against judges in certain instances—the administrative agency is its primary target").

176 Adler v. Educ. Dep't of N.Y. , 760 F.2d 454, 458 (2d Cir. 1985). The questions presented in an Article 78 petition, for example, are limited to whether the government failed to perform a legal duty, whether it acted in excess of its jurisdiction, whether it reached a determination through procedural improprieties, or whether it made a determination unsupported by substantial evidence. N.Y. C.P.L.R. § 7803. A fifth question—relating to the review of the final determination pursuant to a provision of New York State Education law—may also be brought in an Article 78 proceedings, see id. , but that is not relevant in this case.

177 Hubbard v. Administrator, EPA , 982 F.2d 531, 531-32 (D.C. Cir. 1992) (en banc) (suit for money damages not within limited waiver of sovereign immunity in APA).

178 N.Y. C.P.L.R. § 7806.

Hybrid proceedings exist in a murkier corner of New York procedure. They are a judicial creation that is not explicitly codified in any of the civil rules of practice.¹⁷⁹ Because "the CPLR has no rules governing the hybrid Article 78 proceeding-action, its existence creates a host of other procedural issues that unfortunately must be addressed in an ad hoc manner."¹⁸⁰ Nevertheless, the propriety of hybrid proceedings does not appear to have been seriously challenged,¹⁸¹ and they are an increasingly accepted and common phenomenon.¹⁸² This is the source of the dispute between Best and Defendants. On the one hand, the CPLR clearly limit the issues and relief available in an Article 78 proceeding, and the Second Circuit and New York Court of Appeals have accordingly found that an Article 78 proceeding does not preclude later plenary claims for damages.¹⁸³ On the other hand, New York's appellate courts have affirmed that hybrid proceedings are appropriate,¹⁸⁴ and the existence of "the ‘hybrid’ Article 78 proceeding and plenary action effectively relegates ... the Article 78 proceeding to a cause of action among other causes of action."¹⁸⁵ In that light, it is a pure legal fiction that Best could not have obtained damages in its state court proceeding.

179 See Matter of Powell v. City of N.Y. , 16 Misc.3d 1113A, 847 N.Y.S.2d 898, 898 (N.Y. Sup. Ct. 2007) ("The ‘hybrid’ Article 78 proceeding and plenary action is an apparent creation of the Appellate Division, Second Department.") (citing Heimbach v. Mills , 54 A.D.2d 982, 389 N.Y.S.2d 24 (N.Y. App. Div. 1976) ); see also 33 Seminary LLC v. City of Binghamton , 869 F. Supp. 2d 282, 303 (N.D.N.Y. 2012) ("The ‘hybrid’ Article 78 proceeding and plenary action, established by the Appellate Division, Second Department, is created when the Court converts an Article 78 proceeding to a cause of action that can raise a plethora of other issues."). Indeed, the rules appear to prohibit such a proceeding by requiring that "all civil judicial proceedings shall be prosecuted in the form of an action, except where prosecution in the form of a special proceeding is authorized." N.Y. C.P.L.R. § 103(b).

180 Matter of Powell , 847 N.Y.S.2d at 898.

181 See id. ("No one has questioned the propriety of this procedure, and we do not pass on it.") (quoting Glenwood TV, Inc. v Ratner , 103 A.D.2d 322, 480 N.Y.S.2d 98 (1984) ).

182 A cursory search, for example, reveals over a dozen recent opinions in hybrid Article 78 proceedings. See Garcia v. N.Y.C. Dep't of Health & Mental Hygiene , 31 N.Y.3d 601, 603, 81 N.Y.S.3d 827, 106 N.E.3d 1187 (2018) ; Matter of Cornwall Commons, LLC v. Town of Cornwall , 163 A.D.3d 810, 810-11, 82 N.Y.S.3d 428 (N.Y. App. Div. 2018) ; Matter of Civil Serv. Emps. Ass'n, Inc., Local 1000, AFSCME, AFL-CIO v. Olympic Reg'l Dev. Auth. , 163 A.D.3d 1110, 1111, 81 N.Y.S.3d 275 (N.Y. App. Div. 2018) ; Matter of Weikel v. Town of W. Turin , 162 A.D.3d 1706, 1707, 80 N.Y.S.3d 765 (N.Y. App. Div. 2018) ; Matter of Hargraves v. City of Rye Zoning Bd. of Appeals , 162 A.D.3d 1022, 1022, 81 N.Y.S.3d 72 (N.Y. App. Div. 2018) ; Matter of 54 Marion Ave., LLC v. City of Saratoga Springs , 162 A.D.3d 1341, 1341, 80 N.Y.S.3d 487 (N.Y. App. Div. 2018) ; Matter of Stewart v. Roberts , 163 A.D.3d 89, 91, 79 N.Y.S.3d 371 (N.Y. App. Div. 2018) ; Matter of Kurbatsky v. Int'l Conference of Funeral Serv. Examining Bds. , 162 A.D.3d 1379, 1379, 80 N.Y.S.3d 474 (N.Y. App. Div. 2018) ; Matter of Jablonski v. Carter , 162 A.D3d 1364, 75 N.Y.S.3d 438, 438-39 (2018) ; Matter of BT Holdings, LLC v. Vill. of Chester , 162 A.D.3d 881, 75 N.Y.S.3d 256, 257 (2018) ; Parker v. Town of Alexandria , 163 A.D.3d 55, 78 N.Y.S.3d 533, 534 (2018) ; Matter of Buffalo Teachers Fed'n, Inc. v. Elia , 162 A.D.3d 1169, 1170, 79 N.Y.S.3d 309 (N.Y. App. Div. 2018).

183 Davidson , 792 F.2d at 282 (2d Cir. 1986) (citation omitted) (finding that prior Article 78 petition did not bar section 1983 claims because "the damages Finkelstein seeks in this civil rights case cannot be characterized as incidental to the primary relief sought in his second Article 78 proceeding"); Parker , 93 N.Y.2d at 348-9, 690 N.Y.S.2d 478, 712 N.E.2d 647 (N.Y. 1999) ("In plaintiff's prior article 78 proceeding, Supreme Court correctly dismissed his section 1983 civil rights damage claims as not incidental to the primary relief of reinstatement he sought. Therefore, the termination of the prior article 78 proceeding on the merits was not res judicata as to the section 1983 damage claims.").

184 See Matter of Newton v. Town of Middletown , 31 A.D.3d 1004, 820 N.Y.S.2d 154, 156 n.2 (2006) ("We reject the Steiglehners' assertion that petitioners were required to obtain separate index numbers for their CPLR article 78 claims and their plenary causes of action. The hybrid proceeding is appropriate given that the same subject matter--the road--underlies all of petitioners' contentions.").

185 Matter of Powell , 847 N.Y.S.2d at 898.

2. Precedent still Governs Despite the Rise of Hybrid Proceedings.

To the extent that hybrid proceedings are available as a matter of right, Defendants appear to have a point. The previous holdings presumed that hybrid proceedings are rare.¹⁸⁶ If that presumption is incorrect, then the holdings rest on infirm reasoning.

186 See Davidson , 792 F.2d 275 ("[W]e are unwilling on facts such as those before us today to base a ‘could have been litigated’ preclusion decision on a discretionary power that has rarely, if ever, been exercised by a New York court"). Although the Davidson opinion did not address hybrid proceedings by that name, it did address whether N.Y. C.P.L.R. § 103(c) made damages available to an Article 78 petitioner. See id. That section provides that a court may not dismiss a claim simply because it was brought in the wrong form, and some courts appear to believe that it is the procedural basis for the hybrid proceeding. See, e.g. , Matter of Pilarz v. Helfer , 148 A.D.3d 1714, 50 N.Y.S.3d 680, 681 (2017) ("We note at the outset that a CPLR article 78 proceeding is not the proper vehicle for that part of petitioner's challenge to the facial unconstitutionality of the Code, and we thus convert the article 78 proceeding to a hybrid article 78 proceeding/declaratory judgment action.") (citing N.Y. C.P.L.R. § 103(c) ).

This Court is not convinced that the precedent is wrong. While hybrid proceedings may be increasingly common, it appears that they are not available to plaintiffs as a matter of right. Several courts have severed the Article 78 claims and the plenary claims for damages rather than adjudicate the claims in a hybrid proceeding.¹⁸⁷ Others have outright dismissed the Article 78 claims when brought in a hybrid fashion.¹⁸⁸ Thus, even though prior holdings were incorrect to assume that these hybrid proceedings were rare, it is still true that they appear to be available only at the discretion of the court. It is, therefore, still true that it would be improper to "require an Article 78 petitioner, on penalty of later preclusion, to knowingly assert a claim that is improper" in the hope that a court will, in its discretion, save the improperly brought claims.¹⁸⁹

187 See, e.g. , Parker , 93 N.Y.2d at 347, 690 N.Y.S.2d 478, 712 N.E.2d 647 ("Plaintiff commenced the instant plenary action under 42 USC § 1983 in order to litigate the civil rights claims for damages that were severed from the prior [Article 78] proceeding."); Matter of Powell , 847 N.Y.S.2d at 898 ("[T]he first cause of action of the petition-complaint is severed, and the Article 78 petition is denied and the proceeding is severed and dismissed.").

188 See, e.g. , Matter of Brannon v. Goodman , 2010 N.Y. Slip Op. 30657(U), ¶ 6, 2010 WL 1259937 (N.Y. Sup. Ct. Mar. 24, 2010) ("[T]his court will not direct Goodman to accept Brannon's hybrid pleadings for filing.... [T]he Article 78 proceeding is dismissed."); see also Matter of Krol v. Zoning Bd. of Appeals of the Vill. of Mamaroneck , 30 Misc.3d 1221A, 924 N.Y.S.2d 310, 310 (N.Y. Sup. Ct. 2011) (denying motion "to convert certain portions of his Petition to a plenary action for declaratory relief and to amend the Petition"). This approach appears to be in conflict with the clear, mandatory directive of N.Y. C.P.L.R. § 103(c). See N.Y. Adv. Comm. Prac. & Proc., Third Prelim. Rep., Legis. Doc. No. 17, at 47 (1959) ("[Subdivision (c) ] is designed to eliminate the last remnants of dismissal for improper form of proceeding that continue to exist under present law."); Cromwell Towers Redevelopment Co. v. City of Yonkers , 41 N.Y.2d 1, 390 N.Y.S.2d 822, 825, 359 N.E.2d 333 (1976) ("Under CPLR 103 (subd. (c) ), the courts are empowered and indeed directed to convert a civil judicial proceeding not brought in the proper form into one which would be in proper form, rather than to grant a dismissal, making whatever order is necessary for its proper prosecution.") (citation omitted).

189 Davidson , 792 F.2d 275.

This Court, therefore, declines to go against settled precedent and finds that the prior Article 78 petition does not preclude the Section 1983 claims for damages.¹⁹⁰

190 Accord Davidson , 792 F.2d 275 ; Parker , 93 N.Y.2d at 347, 690 N.Y.S.2d 478, 712 N.E.2d 647.

II. Best has a Section 1983 Conspiracy Claim.

Within each of Best's enumerated claims under the First and Fourteenth Amendment are claims that Defendants conspired "to deprive Best of its constitutional rights secured by 42 U.S.C. § 1983 and by the First and Fourteenth Amendment to the United States Constitution."¹⁹¹ A conspiracy to inflict an unconstitutional injury does indeed constitute a separate legal claim,¹⁹² and these allegations, although not separately enumerated, are clearly stated in the TAC. This Court, therefore, will consider the claim here at summary judgment.

191 TAC ¶ 217; see also TAC ¶ 235.

192 See, e.g. , Anilao v. Spota , 774 F. Supp. 2d 457, 512-13 (E.D.N.Y. 2011).

III. The Unconstitutional Condition Claim is in the Case.

Best believes that it has a claim for an unconstitutional condition, specifically that the FA imposed an unconstitutional condition because it contained a clause requiring franchisees to waive their ability to litigate the FA's validity in court. Defendants object that the claim is not pled in the TAC and, therefore, not in the case. This Court agrees with Best.

The doctrine of unconstitutional conditions is a well-established principle meant to vindicate "the Constitution's enumerated rights by preventing the government from coercing people into giving them up."¹⁹³ It applies even when "a person has no ‘right’ to a valuable governmental benefit and even though the government may deny him the benefit for any number of reasons."¹⁹⁴ Best believes that the FA's alleged waiver, by restricting the exercise of the right to petition, violates this well-established principle.

193 Koontz v. St. Johns River Water Mgmt. Dist. , 570 U.S. 595, 604, 133 S.Ct. 2586, 186 L.Ed.2d 697 (2013).

194 Perry v. Sindermann , 408 U.S. 593, 597, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972).

At the outset, this Court notes that it is entirely unclear how a claim alleging a First Amendment unconstitutional condition differs from First Amendment retaliation. Indeed, many opinions suggest that they are one and the same.¹⁹⁵ Nevertheless, several courts have discussed a First Amendment unconstitutional condition claim as if it is a distinct cause of action.¹⁹⁶

195 See, e.g. , Bd. of Cty. Comm'rs v. Umbehr , 518 U.S. 668, 670, 674-75, 116 S.Ct. 2342, 135 L.Ed.2d 843 (1996) (both describing plaintiff's claim as one based in "retaliation for their exercise of the freedom of speech" and also as one based in "our modern ‘unconstitutional conditions’ " doctrine); Richardson v. Sugg , 325 F. Supp. 2d 919, 941-42 (E.D. Ark. 2004) (same).

196 See, e.g. , Autor v. Pritzker , 740 F.3d 176, 183 (D.C. Cir. 2014) ("To sum up, then, Appellants have pled a viable First Amendment unconstitutional conditions claim."); Welch v. Paicos , 66 F. Supp. 2d 138, 170-81 (D. Mass. 1999) (denying summary judgment on retaliation claim but granting summary judgment on a separate unconstitutional condition claim).

Assuming arguendo that it is a separate claim, it is sufficiently well pled in the TAC under the Federal Rules' "extremely permissive" pleading standard.¹⁹⁷ In the TAC, the first claim is not styled as a First Amendment retaliation claim; rather, it is simply titled as a claim under the First Amendment.¹⁹⁸ And in support of that claim, it incorporates all prior paragraphs, including those stating that the FA has "numerous provisions requiring ... any applicant for a PPT franchise to waive its rights to challenge [the] DoITT's actions and City regulations," and that the "FA ... amounts to a waiver of the inalienable right to challenge a mandatory franchise agreement."¹⁹⁹ Thus, although the TAC does not expressly use the term "unconstitutional conditions," the incorporation of these paragraphs supports an unconstitutional condition claim under the First Amendment.

197 See Skinner v. Switzer , 562 U.S. 521, 530, 131 S.Ct. 1289, 179 L.Ed.2d 233 (2011) ("[A] complaint need not pin plaintiff's claim for relief to a precise legal theory. Rule 8(a)(2) of the Federal Rules of Civil Procedure generally requires only a plausible ‘short and plain’ statement of the plaintiff's claim, not an exposition of his legal argument.") (citation omitted).

198 See TAC at 37.

199 TAC ¶¶ 102, 104. Notably, these paragraphs also appeared in the Second Amended Supplemental Complaint, meaning that Defendants must have agreed that these paragraphs related to claims remaining in the case. Compare TAC ¶¶ 102, 104 with SASC ¶¶ 102, 104; see also Order at 3 (Dkt. No. 258) (noting that the parties had met and conferred and agreed to all paragraphs in the TAC except for some disputes relating to paragraphs "3, 5, 9, 72, 153, 161, 162, 167, 169, and paragraphs (j) of the wherefore clause").

Furthermore, even if the unconstitutional claim were absent from the TAC, this Court would recommend amending the complaint at summary judgment. Rule 15(b) of the Federal Rules allows amendment of pleadings to conform to the evidence so long as amendment would promote adjudication of the merits and would not prejudice the opposing party.²⁰⁰ Obviously, allowing a potentially meritorious claim to proceed would promote adjudication of the merits here. And Defendants cannot claim that the prosecution of the unconstitutional conditions claim would prejudice them, because they have been aware of the claim since at least November 7, 2013, years before the close of discovery.²⁰¹

200 See Fed. R. Civ. P. 15(b)(1) ; see also DiMare Homestead, Inc. v. Alphas Co. of N.Y. , 547 F. App'x 68, 70 (2d Cir. 2013) (citation omitted) ("Under Fed. R. Civ. P. 15(b), a district court may consider claims outside those raised in the pleadings so long as doing so does not cause prejudice."); Hernandez v. Goord , 2014 WL 4058662, at *3, 2014 U.S. Dist. LEXIS 113720, at *7 (S.D.N.Y. Aug. 14, 2014) (quoting N.Y. State Elec. & Gas Corp. v. Sec'y of Labor , 88 F.3d 98, 105 (2d Cir. 1996) ) ("Rule 15(b) requires no motion or formal amendment of the pleadings."); M.V.B. Collision, Inc. v. Allstate Ins. Co. , 728 F. Supp. 2d 205, 213 n.8 (E.D.N.Y. 2010) (deeming the complaint amended under Rule 15(b) to conform with the evidence presented on the summary judgment motion).

201 See Pre-Mot. Conference Letter, Dkt. No. 340 at 1 (Nov. 7, 2013), in which Plaintiff clearly articulated the unconstitutional conditions claim and, in fact, sought permission to move for judgment as a matter of law on that basis.

Thus, given that it would further justice by considering the merits of the claim, and given that Defendants can claim no prejudice, this Court recommends finding that the unconstitutional condition claim is adequately pled in the TAC or, in the alternative, that the TAC should be substantively amended to include that claim under Fed. R. Civ. P. 15(b).

IV. Other Miscellaneous Claims from Plaintiff's Motion for Summary Judgment.

Best also appears to raise substantive due process and takings claims.²⁰² Unlike the unconstitutional condition claim, these claims are completely absent from Plaintiff's TAC, and so Best's reliance on these claims can only be read as an implicit motion to amend.

202 See Pl.'s Br. in Supp. at 6-15.

Granting such a motion would be wholly improper. There is no indication that Defendants were ever made aware of the pendency of these claims. Given that Best has had numerous opportunities to amend, and that doing so now would prejudice Defendants with surprise claims, this Court recommends denying Best's implicit motion to amend the TAC at summary judgment.²⁰³

203 See McCarthy v. Dun & Bradstreet Corp. , 482 F.3d 184, 200 (2d Cir. 2007) ("A district court has discretion to deny leave [to amend] for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party."); cf. Design Partners, Inc. v. Five Star Elec. Corp. , 2016 WL 1258474, at *18, 2016 U.S. Dist. LEXIS 41913, at *57-58 (E.D.N.Y. Mar. 29, 2016) (granting motion to amend at summary judgment because the prejudice to the defendant would "be minimal").

LEGAL STANDARD ON SUMMARY JUDGMENT

Summary judgment is proper when "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."²⁰⁴ The moving party bears the burden of "demonstrat[ing] the absence of a genuine issue of material fact."²⁰⁵ When determining whether a genuine issue of fact exists on summary judgment, " ‘the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.’ "²⁰⁶ The "same standard applies where, as here, the Court is considering cross-motions for summary judgment."²⁰⁷ When "faced with cross-motions for summary judgment, a district court is not required to grant judgment as a matter of law for one side or the other.... ‘Rather, the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.’ "²⁰⁸

204 Fed. R. Civ. P. 56(a).

205 Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

206 Reeves v. Sanderson Plumbing Prods. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (citations omitted); see also Dickerson v. Napolitano , 604 F.3d 732, 740 (2d Cir. 2010) (similar).

207 Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001).

208 Heublein, Inc. v. United States , 996 F.2d 1455, 1461 (2d Cir. 1993) (citations omitted).

The "moving party bears the initial burden of establishing that there are no genuine issues of material fact[;] once such a showing is made, the non-movant must ‘set forth specific facts showing that there is a genuine issue for trial.’ "²⁰⁹ A "fact is ‘material’ for these purposes if it ‘might affect the outcome of the suit under the governing law,’ " and an "issue of fact is ‘genuine’ if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ "²¹⁰

209 Weinstock v. Columbia Univ. , 224 F.3d 33, 41 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ).

210 Lovejoy-Wilson v. NOCO Motor Fuel, Inc. , 263 F.3d 208, 212 (2d Cir. 2001) (quoting Anderson , 477 U.S. at 248, 106 S.Ct. 2505 ).

Nonetheless, a "party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment," because mere "conclusory allegations or denials ... cannot by themselves create a genuine issue of material fact where none would otherwise exist."²¹¹ Moreover, the "mere existence of a scintilla of evidence in support of the [non-movant's] case will be insufficient [to defeat summary judgment]; there must be evidence on which the jury could reasonably find for the [non-movant]."²¹² If a party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial," then the Court must enter summary judgment.²¹³

211 Hicks v. Baines , 593 F.3d 159, 166 (2d Cir. 2010) (internal quotation marks and citation omitted).

212 Anderson , 477 U.S. at 252, 106 S.Ct. 2505.

213 See Celotex , 477 U.S. at 322, 106 S.Ct. 2548.

DISCUSSION OF DEFENDANTS' MOTION

Defendants move to dismiss Plaintiff's First Amendment retaliation claim, equal protection claim, and conspiracy claim. In the alternative, Defendants also move to dismiss all Monell claims against the City as well as the claims against the individual defendants. Defendants have not moved to dismiss the unconstitutional condition claim. For the reasons discussed below, this Court recommends granting much, but not all, of Defendants' motion.

First, Defendants argue that Best's claims either fail as a matter of law or are unsupported by admissible evidence. This Court agrees with some exceptions. Best has stated a prima facie case that from March through May 2000 it engaged in protected activity by threatening to litigate the validity of the FA under the TCA, and that that Defendants subsequently removed Best's payphones, issued fines, and refused to accept the FA as retaliation for that protected activity. Because there is a dispute of material fact over Defendants' substantial motivations, summary judgment on this claim should be denied. Furthermore, Defendants have not moved for summary judgment against Best's unconstitutional condition claim, and so that claim also should proceed. Other than those two exceptions, summary judgment should be entered against the entirety of Best's claims.

Second, Defendants also offer some defendant specific grounds for summary judgment, specifically arguing that qualified immunity protects the individual defendants and that Best has failed to support a Monell claim against the City. This Court recommends denying these grounds for summary judgment, with one exception: Best has failed to support a Monell claim for First Amendment retaliation against the City. Thus, summary judgment should be entered in the City's favor on that claim.

I. Summary Judgment should be Entered against Some of the First Amendment Retaliation Claim.

Defendants seek summary judgment on Plaintiff's First Amendment retaliation claim.²¹⁴ The resolution of that motion requires this Court to decide several issues of fact and law.

214 See Defendants' Memorandum of Law in Support of Their Motion for Summary Judgment at 11-24 ("Defs.' Br. in Supp.") (Dkt. No. 485-7).

First, both sides disagree over the appropriate legal standard. Defendants claim that Best was subject to the heightened standard for employees that the Supreme Court first established in Pickering and later expanded upon with the Umbehr and Connick decisions.²¹⁵ Under that standard, employees and others in a similar relationship may assert a claim for First Amendment retaliation only if the protected activity related to a matter of public concern. This Court finds that this heightened standard applies to Best's claims here.

215 See Pickering v. Bd. of Educ. , 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968) ; Connick v. Myers , 461 U.S. 138, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983) ; Board of Comm'rs, Wabaunsee Cty. v. Umbehr , 518 U.S. 668, 116 S.Ct. 2342, 135 L.Ed.2d 843 (1996).

Second, Defendants argue that Best had no First Amendment rights arising out of its application for a franchise because Best had no existing relationship with the City. This Court finds that Best had a pre-existing relationship with the City and, therefore, disagrees.

Third, Defendants argue that Best did not engage in any petitioning pertaining to a matter of public concern, and in the alternative that no reasonable jury could conclude that Defendants were motivated by a retaliatory animus. This Court disagrees. Best petitioned over a matter of public concern when it threatened to litigate the FA's validity under the TCA and when it submitted the FA with a waiver. Furthermore, there is a dispute of material fact over whether Defendants removed Best's payphones, issued fines, and refused to accept the FA in May 2000 out of a desire to retaliate against Best.

Fourth, and finally, Defendants have failed to brief the question of whether the government's interest in not contracting with a reluctant party outweighed Best's interest in petitioning the government. They cannot, therefore, receive summary judgment on that ground.

Thus, for the reasons discussed below, this Court recommends granting summary judgment on all of Best's First Amendment retaliation claims except for Best's claim that Defendants removed payphones, issued fines, and refused to accept Best's FA in retaliation for Best's threats to litigate the validity of the FA under the Telecommunications Act of 1996.

A. The Public Concern Test Applies to Best.

At the outset, the parties disagree over the standard that applies to Best's retaliation claim. Ordinarily, to establish a prima facie claim for First Amendment retaliation, a plaintiff must simply show "(1) that the speech or conduct at issue was protected, (2) that the defendant took adverse action against the plaintiff, and (3) that there was a causal connection between the protected [conduct] and the adverse action."²¹⁶ When the plaintiff is an employee or independent contractor with the government, however, then the "plaintiff must establish that what [she] said or did constituted speech on a matter of public concern."²¹⁷ Furthermore, even if the conduct was a matter of public concern, a defendant may avoid liability by showing that "the relevant government entity had an adequate justification" for the adverse action that outweighs the infringed upon right.²¹⁸

216 Scott v. Coughlin , 344 F.3d 282, 287 (2d Cir. 2003) (citations omitted).

217 Locurto v. Safir , 264 F.3d 154, 166 (2d Cir. 2001) (citation omitted).

218 Garcetti v. Ceballos , 547 U.S. 410, 418, 126 S.Ct. 1951, 164 L.Ed.2d 689 (2006) (citation omitted); see also Umbehr , 518 U.S. at 677-78, 116 S.Ct. 2342 (holding that independent contractors are protected from retaliation for protected speech "and that the Pickering balancing test, adjusted to weigh the government's interests as contractor rather than as employer, determines the extent of their protection.").

It is not surprising then that Defendants argue Best is subject to this public concern test, also known as the Pickering balancing test. In response, Best argues: (1) that the public concern test does not apply to the right to petition; and (2) even if it did, the test does not apply to franchisees.²¹⁹

219 The Court asked the parties to further brief whether or not Best constituted an independent contractor such that the public concern test should apply. See Order (Feb. 24, 2017). Both parties accordingly submitted additional briefing. See Dkt. Nos. 501, 502, 504.

For the reasons discussed below, this Court agrees with Defendants. The public concern applies to the right to petition, and the test does apply to operators of PPTs on the PROW.

1. The Public Concern Test Applies to the Petition Clause.

Best claims that the public concern test does not apply to the First Amendment's Petition Clause.²²⁰ Admittedly, the Second Circuit at one point did reach that holding,²²¹ and Judge Matsumoto accordingly refused to apply the public concern test at the motion to dismiss stage.²²² Since then, however, the Supreme Court has applied the Pickering test to the petition clause,²²³ and the Second Circuit has followed suit.²²⁴ Thus, Best's argument on this front lacks any merit.²²⁵

220 Pl.'s Opp. at 9-10 (Dkt. No. 486).

221 See Friedl v. City of New York , 210 F.3d 79, 87 (2d Cir. 2000) (citations omitted) ("[W]e reject the contention, accepted by the district court, that where the plaintiff alleges retaliation for protected speech in the form of a petition to the government, he must ‘establish that the speech contained in his petition to the government was a matter of public concern.’ ").

222 See Matsumoto R & R at 53 (Dkt. No. 192).

223 See Borough of Duryea v. Guarnieri , 564 U.S. 379, 398, 131 S.Ct. 2488, 180 L.Ed.2d 408 (2011) ("As under the Speech Clause, whether an employees' petition relates to a matter of public concern will depend on ‘the content, form, and context of [the petition], as revealed by the whole record.’ ") (citation omitted).

224 See Singer v. Ferro , 711 F.3d 334, 342 (2d Cir. 2013) ("Whether their claim is based on the filing of the complaint itself (and thus brought under the First Amendment's Petition Clause) or is instead based on speech contained within this proceeding (and thus cognizable under the Free Speech Clause) it is subject to the same public concern test we have been discussing.") (citation omitted).

225 In so far as Best argues that the refusal to apply the public concern test is now "law of the case," contrary precedent from the Supreme Court qualifies as a compelling reason to reverse the earlier interlocutory decision. See Quintieri , 306 F.3d at 1225 (citations omitted).

2. The Public Concern Test Applies to Recipients of Franchises to Operate PPTs on the PROW.

In their briefing, Best and Defendants vigorously dispute whether franchisees were independent contractors subject to the public concern test. This focus misses the mark. Clearly, Best was not an independent contractor, as Defendants argue; the City did not pay PPT operators for a service. Nevertheless, courts have also found that franchisees like Best are subject to the public concern test, and this Court is inclined to agree.

The confusion here stems from a myopic focus on the Pickering test's origin. Courts invented it in the employment context because by employing a private citizen, the government gains retaliatory options above those that it holds over the general public.²²⁶ For that reason, the Supreme Court found that a public employee should "be able to speak out freely on such [public] questions without fear of retaliatory dismissal,"²²⁷ but that this right should also be balanced with "the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees."²²⁸ The Court later extended this protection to independent contractors because there is no "difference of constitutional magnitude ... between independent contractors and employees in this context."²²⁹

226 See Pickering , 391 U.S. at 574, 88 S.Ct. 1731 ("[T]he threat of dismissal from public employment is nonetheless a potent means of inhibiting speech.").

227 Id. at 572, 88 S.Ct. 1731.

228 Id. at 568, 88 S.Ct. 1731.

229 Umbehr , 518 U.S. at 684, 116 S.Ct. 2342 (citation omitted).

The parties correctly grasp this much. But they miss that "courts have not strictly cabined its application" to employment-like relationships.²³⁰ Instead, courts have also applied the test to any other similar relationship between the government and a private citizen where "free speech rights must be balanced against the need to effectively manage a governmental entity."²³¹ Thus, the applicability of Pickering does not hinge on the dictionary definition of an independent contractor, as Best suggests,²³² or the language used in the franchise agreement, as Defendants suggest.²³³ Instead, the question is whether the rationale of Pickering also applies to franchisees.²³⁴ From that angle, it is clear that the public concern test also applies here. Just as a public employer can retaliate against an at-will employee for exercising First Amendment rights, so too can the City abuse its discretion and deny PPT operators the ability to conduct their business.²³⁵ Thus, some balancing test in instances of retaliation must be done because just as "the government's interest in running an effective workplace can in some circumstances outweigh employee speech rights,"²³⁶ so too may the government's interest in establishing fees, rules, and procedures for monetizing public space outweigh a business' right to petition with grievances.

230 Blackburn v. City of Marshall , 42 F.3d 925, 932-35 (5th Cir. 1995).

231 Jenkins v. Rock Hill Local Sch. Dist. , 513 F.3d 580, 586 (6th Cir. 2008) (citations omitted).

232 See Pl.'s Supp. Brief at 1 (Dkt. No. 501).

233 See Defs.' Supp. Brief at 1-2 (Dkt. No. 503).

234 See Tenn. Secondary Sch. Ath. Ass'n v. Brentwood Acad. , 551 U.S. 291, 299-300, 127 S.Ct. 2489, 168 L.Ed.2d 166 (2007) (extending Pickering test to an academic, public athletic association because "just as the government's interest in running an effective workplace can in some circumstances outweigh employee speech rights ... so too can an athletic league's interest in enforcing its rules sometimes warrant curtailing the speech of its voluntary participants") (citations omitted); Perez v. Hoblock , 368 F.3d 166, 172 (2d Cir. 2004) (recognizing that the application of the Pickering test to state licensees depends on the "question of whether a state-licensee-in this case, a horse owner licensed by New York State-is properly analogized to a public employee for First Amendment purposes") (citation omitted); C.T. v. Valley Stream Union Free Sch. Dist. , 201 F. Supp. 3d 307, 315-16 (E.D.N.Y. 2016) (Bianco, J.) (declining to apply Pickering test to parents with children in public school because as previous "cases recognize, the need to balance between the government employee's right to speak and his employer's need to efficiently deliver services, which drove the development of the public concern requirement ... simply does not exist in these circumstances.") (citations omitted).

235 Indeed, one court has already found that the regulatory scheme as written invests DoITT's commissioner with so much unfettered discretion to grant permits that the law violates the TCA. See Coastal Communs. Serv. v. City of N.Y. , 658 F. Supp. 2d 425, 460-61 (E.D.N.Y. 2009) (Vitaliano, J.) ("[P]laintiffs' motion for partial summary judgment is granted, to the extent that plaintiffs are entitled to a declaration that the City of New York violated the TCA ... through the exercise of the unfettered discretion of the Commissioner ... to approve or deny PPT permits.").

236 Brentwood Acad. , 551 U.S. at 300, 127 S.Ct. 2489 (citations omitted) (extending Pickering test to an academic, public athletic league).

Recognizing this, many courts have already applied the Pickering test to similar relationships. After all, it is rather common for commercial enterprises to lease use of public rights of way in exchange for paying fees and obeying rules. The relationship may go by many names—licensee, franchisee, permit holder, lessor, etc. Regardless, just like the employee-employer relationship, in these situations the government has dual interests as a commercial counterparty and as a sovereign. For that reason, courts have already applied the test to tennis instructors permitted to teach lessons on public courts,²³⁷ to vendors licensed to operate inside government buildings,²³⁸ to grocery baggers licensed to work and collect tips on military bases,²³⁹ and to airline employees licensed to access restricted areas of public airports.²⁴⁰ None of those plaintiffs were independent contractors, and yet the public concern test still applied.

237 See Howard v. City of N.Y. , 2013 WL 6925088, at *11, 2013 U.S. Dist. LEXIS 182602, at *33-36 (S.D.N.Y. July 3, 2013) ("As an individual engaged in a contractual relationship with the City, Mr. Howard's First Amendment retaliation claim is analyzed under the standards applicable to public employees.") (citations omitted).

238 See Copsey v. Swearingen , 36 F.3d 1336, 1345-46 (5th Cir. 1994) ; Autry v. Johnson , 2005 WL 1830358, at *3 n.4, 2005 U.S. Dist. LEXIS 15616, at *9 n.4 (W.D. Ky. July 29, 2005) ; but see Wandering Dago, Inc. v. Destito , 879 F.3d 20, 38 (2d Cir. 2018) (finding that a food truck operator applying to use public plaza was not an independent contractor subject to the Pickering balancing test because its application "would represent a considerable and, we think, unwarranted expansion of Umbehr ").

239 Havekost v. United States Dep't of Navy , 925 F.2d 316, 318 (9th Cir. 1991).

240 Hickey-McAllister v. British Airways , 978 F. Supp. 133, 137 (E.D.N.Y. 1997).

This Court sees no reason to disagree with those decisions. Admittedly, Best has identified a contrary decision where the district court found that the Pickering test did not apply to a car rental company operating at a public airport.²⁴¹ That opinion, however, predates later direction from the Supreme Court that the Pickering test is not strictly limited to employees and independent contractors.²⁴² Nothing from this non-precedential decision overcomes the persuasive weight of those discussed above.

241 In that decision the court instead applied "the decisions of the Supreme Court dealing with the right of a governmental unit, the Port Authority in this case, as a proprietor, to manage its own property and its internal operations." Capital Leasing v. Columbus Mun. Airport Auth. , 13 F. Supp. 2d 640, 660-61 (S.D. Ohio 1998) (citing Perry Educ. Ass'n v. Perry Local Educators' Ass'n. , 460 U.S. 37, 103 S.Ct. 948, 74 L.Ed.2d 794 (1983) ).

242 See Brentwood Acad. , 551 U.S. at 300, 127 S.Ct. 2489 ("[J]ust as the government's interest in running an effective workplace can in some circumstances outweigh employee speech rights ... so too can an athletic league's interest in enforcing its rules sometimes warrant curtailing the speech of its voluntary participants.").

B. Best had a Preexisting Commercial Relationship with the City entitling it to First Amendment Protections.

In a footnote, Defendants imply that because the public concern test applies to franchisees, and because Best was a mere applicant for a franchise, Best had no First Amendment right against retaliation arising out of its application for a franchise.²⁴³

243 Defs.' Supp. Memo at 1 n.1 (Dkt. No. 503) ("The treatment in this letter assumes arguendo that the relationship between Best and the City during that period can be categorized as a pre-existing commercial relationship sufficient to allow plaintiff to assert a First Amendment retaliation claim.... If these assumptions are not valid, then Best has no right to bring its First Amendment retaliation claim.").

That argument rests on a complicated question of law. Umbehr explicitly did not address the issue, and there is now some split in authority over whether applicants for commercial relationships may bring First Amendment retaliation claims arising from the application process.²⁴⁴ Admittedly, the "one district court in this Circuit that has reached the question has extended Umbehr to applicants for government contracts,"²⁴⁵ but the Second Circuit has thus far expressly abstained from resolving the issue.²⁴⁶

244 African Trade & Info. Ctr., Inc. v. Abromaitis , 294 F.3d 355, 361 (2d Cir. 2002) (noting that the Umbehr decision " ‘concerns the termination of a pre-existing commercial relationship with the government, [and does] not address the possibility of suits by bidders or applicants for new government contracts who cannot rely on such a relationship’ ") (quoting Umbehr , 518 U.S. at 685, 116 S.Ct. 2342 ); Prisma Zona Exploratoria de P.R., Inc. v. Calderon , 310 F.3d 1, 7 (1st Cir. 2002) (citations omitted) ("The next area of contest appears to revolve around those who wish for the first time to bid for government contracts. On this issue, the Supreme Court has not yet spoken definitively, and the circuits appear to be divided."); compare McClintock v. Eichelberger , 169 F.3d 812, 817 (3d Cir. 1999) (declining to extend First Amendment protections to an independent contractor lacking a preexisting commercial relationship) with Lucas v. Monroe County , 203 F.3d 964, 972 (6th Cir. 2000) (truck operator who had never been called was protected from removal from the call list).

245 Savoy of Newburgh, Inc. v. City of Newburgh , 657 F. Supp. 2d 437, 444 (S.D.N.Y. 2009) (citing A.F.C. Enters., Inc. v. N.Y. City School Constr. Auth. , 2001 WL 1335010, at *14-15 (E.D.N.Y. Sept. 6, 2001) ).

246 See Abromaitis , 294 F.3d at 359-61 (2d Cir. 2002) (citation omitted).

It is unnecessary to wade into the split in authority, however, because Best had a preexisting commercial relationship sufficient to provide it with protection from First Amendment retaliation. The Second Circuit has made it clear that Umbehr and its progeny are not limited "to situations where there was a continuing contract."²⁴⁷ Rather, in the absence of a formal contractual relationship, "courts consider whether there exists ‘a longstanding relationship’ of a character similar to those described in Umbehr and its companion case, O'Hare Truck Serv., Inc. v. City of Northlake ."²⁴⁸ Taking that view, courts have applied Umbehr to businesses that had longstanding but informal commercial relationships such as tow truck operators placed on an informal referral list.²⁴⁹ Best had been enrolled in the interim registry program since March 15, 1996, and therefore falls under this definition.²⁵⁰

247 Hous. Works, Inc. v. Giuliani , 56 F. App'x 530, 533 (2d Cir. 2003).

248 Gym Door Repairs, Inc. v. N.Y.C. Dep't of Educ. , 2014 WL 5569970, at *4, 2014 U.S. Dist. LEXIS 155357, at *8 (S.D.N.Y. Nov. 3, 2014) (citing O'Hare Truck Serv., Inc. v. City of Northlake , 518 U.S. 712, 116 S.Ct. 2353, 135 L.Ed.2d 874 (1996) ).

249 See White Plains Towing Corp. v. Patterson , 991 F.2d 1049, 1053, 1059 (2d Cir.1993) ; see also Heusser v. Hale, 777 F. Supp. 2d 366, 376 (D. Conn. 2011) ; Ortiz v. Town of Stratford , 2008 WL 4630527, at *9–10, 2008 U.S. Dist. LEXIS 83507, at *27-29 (D. Conn. Oct. 10, 2008).

250 See Chaite Decl. ¶ 7 (Dkt. No. 486-2).

Thus, even if this Court found that a pre-existing relationship was a necessity for Best to assert a claim for First Amendment retaliation, this Court would still find that Best had such a relationship.

C. A Reasonable Jury could Find in Favor of Best.

Thus, to state its prima facie case for First Amendment retaliation, Best must show: (1) that it engaged in protected activity relating to a matter of public concern; (2) that it suffered an adverse action; and (3) that the adverse action was substantially motivated by Best's protected conduct.

For the reasons discussed below, this Court finds that Best has made out a prima facie case that it engaged in protected activity, that it suffered adverse actions, and that the adverse actions were substantially motivated by the protected conduct.

1. Best Engaged in Protected Activity as a Matter of Law.

Although it is a fact-intensive inquiry, whether or not Best engaged in activity that was both protected and related to a matter of public concern is a question of law for the court to decide.²⁵¹

251 Wrobel v. Cty. of Erie , 692 F.3d 22, 28 (2d Cir. 2012) ("Whether association or speech is on a matter of public concern is a fact-intensive inquiry; nevertheless it is a question of law for the court to decide.") (citation omitted).

Here, Best points to four protected activities: its initial refusal to accept the FA as written; its later acceptance of the FA as written with the reservation of its right to challenge the FA; the Article 78 petition; and the New Phone complaint.²⁵² In so far as Best engaged in any other acts of petitioning the government, Best has abandoned those claims arising from that conduct.²⁵³

252 See Plf.'s Opp. at 7, 11-12 (Dkt. No. 486).

253 Best and New Phone initiated numerous other court actions. The TAC and briefing in opposition, however, only rely on the conduct discussed here. Thus, any claims not addressed here have been abandoned at summary judgment. See Taylor v. City of New York , 269 F. Supp. 2d 68, 75 (E.D.N.Y. 2003).

This Court agrees with Best in part. Both the letters challenging the FA's validity in March and April 2000 and the submission of the FA with a reservation of rights pertained to a matter of public concern. But the Article 78 petition and the New Phone Complaint did not relate to matters of public concern. Thus, this Court recommends granting summary judgment on all of Best's retaliation claims predicated on any protected conduct other than: (1) threats to litigate the FA's validity made in March and April 2000; and (2) the submission of the signed FA with a reservation of rights.

a. Best Threatened Litigation over a Matter of Public Concern in March and April 2000.

In arguing that Best did not engage in any protected conduct, Defendants focus exclusively on the litigation initiated by Best.²⁵⁴ The petition clause, however, does not solely protect the right to bring a lawsuit; it also protects the right to threaten to bring a lawsuit, which Best undisputedly did.²⁵⁵

254 See Defs.' Memo at 14 (Dkt. No. 485-7); Defs.' Reply at 14-15 (Dkt. No. 487).

255 See Entler v. Gregoire , 872 F.3d 1031, 1040-43 (9th Cir. 2017) (finding that defendants could not avail themselves of qualified immunity because a prisoner's right to threaten litigation over grievances was clearly established); Jackson v. City of Columbus , 194 F.3d 737, 756-57 (6th Cir. 1999) ("If ... his threat of litigation served to expose matters of public concern, such as the alleged discriminatory practices of the City, such speech would constitute public speech and merit constitutional protection."); Belk v. Minocqua , 858 F.2d 1258, 1262 (7th Cir. 1988) ("The Town could not, however, terminate her employment because of her exercise or threatened exercise of a constitutionally protected right.") (citing Perry , 408 U.S. at 597, 92 S.Ct. 2694 ); Sprau v. Coughlin , 997 F. Supp. 390, 393 (W.D.N.Y. 1998) ("I find that plaintiff's conduct in threatening to file a complaint was protected by the First Amendment's guarantee of the right to petition the government for redress of grievance.") (citing Graham v. Henderson , 89 F.3d 75, 80 (2d Cir. 1996) ).

Best informed Defendants of its intent to litigate the validity of the FA in a series of three letters in March and April 2000. Although DoITT had given Best a deadline of March 13, 2000 to execute the FA, Mr. Chaite strongly believed that the FA violated various laws, including the TCA.²⁵⁶ Thus, instead of signing the FA, Mr. Chaite lawyered-up.²⁵⁷ On the due date, Mr. Ryans wrote on Mr. Chaite's behalf to state that the FA violated the TCA and that Best would appreciate a meeting in order "to avoid the need for costly litigation concerning this matter."²⁵⁸ Then, after that meeting was unproductive, Mr. Ryans reiterated in two follow-up letters—one sent on March 21, the other sent on April 14—that Best would "take appropriate action to protect its equitable and property interests" if necessary,²⁵⁹ and that a federal court would "assuredly find that the fees imposed on independent payphone providers (but not on Bell Atlantic) ... to be discriminatory and not competitively neutral" under the TCA.²⁶⁰ Those explicit statements issued by Best's lawyer to DoITT's counsel undisputedly fall within the ambit of the petition clause.²⁶¹

256 Mr. Chaite did not make this explicit in his letters, but his correspondence with DoITT is littered with oblique references to this belief. See Letter from Best to DoITT, Dkt. No. 485-3 at 105 (July 12, 1999) (indicating that Best would sign the FA provided that it conformed "to all City, State and Federal Laws"); Letter from Chaite to Reiss, Dkt. No. 485-3 at 231 (Nov. 14, 1999) (stating that "DoITT's present policy is a barrier to entry and a barrier to exit regardless of the number of companies approved by the FCRC"); see also 47 U.S.C. § 253(a) ("No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.").

257 See Letter from Ryans to Regal, Dkt. No. 485-3 at 284 (Mar. 13, 2000).

258 Id. at 285.

259 Letter from Ryans to Regal, Dkt. No. 485-3 at 288 (Mar. 21, 2000).

260 Letter from Ryans to Regal, Dkt. No. 485-3 at 295 (Apr. 14, 2000).

261 See Carter v. Dolce , 647 F. Supp. 2d 826, 834 (E.D. Mich. 2009) ("[W]hen it comes to ... the right to petition the government for redress, there is little difference between retaliating against a person for filing a grievance, and retaliating for threatening to file one.").

The statements also pertain to a matter of public concern, although that is a closer question. An issue is one of "public concern" that can be "fairly considered as relating to any matter of political, social, or other concern to the community."²⁶² To determine whether something falls within that definition, courts take "into account the content, form, and context of a given statement as revealed by the whole record."²⁶³ That is a somewhat vague standard,²⁶⁴ but courts do use some concrete factors such as the plaintiff's motive,²⁶⁵ whether the subject of the petition affected others beside the plaintiff,²⁶⁶ and whether the relief sought would benefit others.²⁶⁷

262 Connick , 461 U.S. at 146, 103 S.Ct. 1684.

263 Ruotolo v. N.Y.C. , 514 F.3d 184, 189 (2d Cir. 2008) (citation omitted).

264 See William A. Herbert, The Chill of A Wintry Light? Borough of Duryea v. Guarnieri and the Right to Petition in Public Employment , 43 U. Tol. L. Rev. 583, 631 (2012) ("[T]he vagueness of the test is guaranteed to result in inconsistencies in decisional results under the Petition Clause, as it has under the Speech Clause.").

265 See Golodner v. Berliner , 770 F.3d 196, 203 (2d Cir. 2014) ("In examining whether speech is on a matter of public concern, we consider the motive of the speaker.") (citation omitted).

266 See Rockland Vending Corp. v. Creen , 2009 WL 2407658, at *12, 2009 U.S. Dist. LEXIS 68323, at *41 (S.D.N.Y. Aug. 4, 2009) ("There is no evidence in the record that Rockland ever alleged that DOCS was pursuing an unfair policy or regularly engaged in illegal practices that affected anyone other than Rockland.").

267 See Gibson v. Kilpatrick , 838 F.3d 476, 485 (5th Cir. 2016) ("The suit asks only for personal relief. Gibson did not request ‘any type of damages implicating the public.’ He chose not to seek an injunction to prevent the mayor from engaging in such future behavior."); Ross v. N.Y.C. Dep't of Educ. , 935 F. Supp. 2d 508, 523 (E.D.N.Y. 2013) ("[T]he only relief Plaintiff seeks is relevant to him.").

Given that framework, Best's threats to enforce the TCA's pro-competitive provisions pertained to a matter of public concern. The City's allegedly anti-competitive franchise agreement affected other PPT operators and users of payphones on the PROW.²⁶⁸ What is more, Best's dispute with the City was not a parochial problem for New Yorkers; plaintiffs around the country were litigating the allegedly anticompetitive nature of similar franchise schemes around that time.²⁶⁹ Thus, if Best had as promised obtained a court decision finding "that the fees imposed on independent payphone providers ... to be discriminatory and not competitively neutral,"²⁷⁰ that holding would have affected users of PPTs in New York and had precedential value in cases around the country. That is a paradigmatic "matter of political, social, or other concern to the community."²⁷¹

268 Indeed, the very purpose of competition policy is to benefit consumers. See Kirtsaeng v. John Wiley & Sons, Inc. , 568 U.S. 519, 539, 133 S.Ct. 1351, 185 L.Ed.2d 392 (2013) (citation omitted).

269 See, e.g. , TCG N.Y., Inc. v. City of White Plains , 305 F.3d 67, 79 (2d Cir. 2002) ("White Plains ... has not required Verizon to enter into a franchise agreement.... The City argues, and the district court agreed, that the differential treatment is ‘competitively neutral and nondiscriminatory,’ .... We disagree."); BellSouth Telecomms., Inc. v. Town of Palm Beach , 252 F.3d 1169, 1191 (11th Cir. 2001) ("BellSouth brought these lawsuits against the Cities, alleging that their ordinances violated §§ 253(a) and (c)."); TCG Detroit v. City of Dearborn , 206 F.3d 618, 624 (6th Cir. 2000) ("The question then is whether the fee assessed by the City is ‘fair and reasonable compensation,’ within the meaning of the Act."); Peco Energy Co. v. Twp. of Haverford , 1999 WL 1240941, at *6, 1999 U.S. Dist. LEXIS 19409, at *18 (E.D. Pa. Dec. 20, 1999) ("Haverford argues that the Ordinance is concerned only with regulating the public rights-of-way and therefore falls completely within the safe harbor of § 253(c).... [W]e find that it is not entitled to safe harbor protection.").

270 Letter from Ryans to Regal, Dkt. No. 485-3 at 295 (Apr. 14, 2000).

271 Connick , 461 U.S. at 146, 103 S.Ct. 1684 ; see also Lewis v. Cowen, 165 F.3d 154, 164 (2d Cir. 1999) (mismanagement of public funds a matter of public concern); Bernheim v. Litt , 79 F.3d 318, 325 (2d Cir. 1996) (statements by school teacher regarding quality of education in school district held to be matter of public concern); Blum v. Schlegel, 18 F.3d 1005, 1012 (2d Cir. 1994) (criticism of national drug policy a matter of public concern); Cecchini v. Schenck , 2016 WL 777901, at *11–12, 2016 U.S. Dist. LEXIS 25230, at *35-36 (D. Conn. Feb. 29, 2016) (citation omitted) (police misconduct a matter of public concern); Wise v. New York City Police Department , 928 F. Supp. 355, 372 (S.D.N.Y. 1996) (sexual harassment a matter of public concern).

Admittedly, Best's principal motive in making this threat was clearly to benefit itself and not to vindicate the public interest as a private attorney general. Indeed, Best did not specify what relief, exactly, it planned to seek. But ambiguity and selfish motives are not dispositive.²⁷² Rather, this Court must decide whether the public aspects of the threat predominate over the private aspects.²⁷³ Here, the public aspects predominate despite Best's selfish intent and muddled plans. When faced with similar threats pertaining to public matters but also arising out of private disputes, Courts have found that the threatened petition pertained to a matter of public concern.²⁷⁴ Given the importance of competition policy to the general public, this Court is inclined to agree.²⁷⁵ Thus, Best engaged in protected activity when Mr. Ryans wrote to Mr. Regal in March and April 2000 to convey Best's willingness to litigate the FA's validity under the TCA.

272 See Sousa v. Roque , 578 F.3d 164, 175 (2d Cir. 2009) (citation omitted) ("To the extent that our precedents have been less than clear, we reaffirm today our holding in Reuland [v. Hynes, 460 F.3d 409 (2d Cir. 2006) ] : a speaker's motive is not dispositive in determining whether his or her speech addresses a matter of public concern."); Belk , 858 F.2d at 1260 n.3 (finding that threat to file a grievance against a town board related to a matter of public concern even though it was "unclear to whom Belk would have directed such a grievance").

273 See Gibson , 838 F.3d at 485.

274 See Belk , 858 F.2d at 1259-61 (finding that former town secretary's threat to file a grievance against the town board for paying more compensation to a public official than authorized by statute was a matter of public concern even though the immediate motivation of the threat was a desire to be reinstated to the position of town secretary).

275 See Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56, 57 (1996) (preamble stating that the purpose of the act is to "promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies"); Covad Communs. Co. v. BellSouth Corp. , 314 F.3d 1282, 1284 (11th Cir. 2002) (Tjoflat, J., dissenting) ("Congress passed monumental legislation, the Telecommunications Act of 1996 .... The legislation aimed to spark competition in the provision of local telephony.") (citations omitted).

b. Best Threatened Litigation when it Submitted the Signed FA with a Reservation of Rights in May 2000.

On May 10, 2000, after DoITT began removing Best's payphones, Best relented and submitted the signed FA along with other closing materials.²⁷⁶ Added to the FA's signature page, however, was an addendum that Best believed that the FA was "in violation of certain State and Federal laws," and that Best was reserving "its rights to challenge the Franchise Agreement."²⁷⁷

276 See Signed Franchise Agreement, Dkt. No. 485-4 at 129 (May 10, 2000); Legal Op. Letter, Dkt. No. 491-10 at 2-3 (May 10, 2000).

277 Signed Franchise Agreement, Dkt. No. 485-4 at 129 (May 10, 2000).

Taking "into account the content, form, and context of" that statement,²⁷⁸ it is clearly a threat to litigate the FA's validity under the TCA. Best had in the three letters from March to May 2000 indicated that it believed the FA violated the TCA and that, unless changes were made, Best was willing to assert that claim in court.²⁷⁹ By submitting the FA with this reservation, Best was unmistakably reiterating that intention, thereby indicating that it agreed to the FA's terms and also that it planned to challenge the FA in court. Just like the three letters discussed above, that act was protected conduct under the petition clause.

278 Ruotolo , 514 F.3d at 189.

279 See Letter from Ryans to Regal, Dkt. No. 485-3 at 285 (Mar. 13, 2000); Letter from Ryans to Regal, Dkt. No. 485-3 at 288 (Mar. 21, 2000); Letter from Ryans to Regal, Dkt. No. 485-3 at 295 (Apr. 14, 2000).

c. Best's Article 78 Petition did Not Pertain to a Matter of Public Concern.

Best's Article 78 Petition, by contrast, falls squarely outside the realm of public concern. The bulk of the petition complains of DoITT's arbitrary and capricious treatment of Best, not other PPT operators.²⁸⁰ Admittedly, some of the petition does allege that DoITT's regulatory scheme was anti-competitive and violated the TCA, but those allegations were ancillary examples of DoITT's history of arbitrary and capricious decisions;²⁸¹ in the end the petition asked for only three remedies, all of which were personal to Best: (1) an order requiring the City to grant a payphone franchise to Best; (2) an order to allow Best to sell its assets to any entity that could pass the City's background check; and (3) in the alternative, an order requiring the City to allow Best to reapply for a franchise and barring the City from removing Best's payphones pending that application.²⁸² The petition, therefore, is essentially indistinguishable from an action brought by a government employee seeking reversal of adverse workplace decisions, a type of dispute that courts have routinely found to lie outside the realm of public concern.²⁸³ This Court agrees with those other decisions and finds that the Article 78 Petition was not related to a matter of public concern and therefore does not qualify as protected activity under the First Amendment.

280 See Article 78 Pet. ¶¶ 20-22 (Dkt. No. 485-4 at 145) (alleging DoITT had wrongfully denied Best of its right to sell its business); id. ¶¶ 23-24 (alleging DoITT had wrongfully removed Best's payphones); id. ¶¶ 25-38 (alleging DoITT had wrongfully denied Best's franchise application).

281 See id. ¶¶ 39-70.

282 See Article 78 Pet. at 1-2, 20 (Dkt. No. 485-4 at 145).

283 See Ruotolo , 514 F.3d at 190 (finding that lawsuit did not relate to a matter of public concern because the "section of the Complaint titled ‘Consequences of the Retaliation’ enumerates adverse career, financial and emotional effects that Ruotolo suffered personally. The relief sought is also almost entirely personal to Ruotolo, including compensatory damages and an injunction relating to Ruotolo's employment records."); Quattrone v. Erie 2 Chautauqua-Cattaraugus Bd. of Coop. Educ. Servs. , 2011 WL 4899991, at *13, 2011 U.S. Dist. LEXIS 118250, at *40-41 (W.D.N.Y. Oct. 11, 2011) ("[T]he court finds no evidence to suggest that the matters addressed by plaintiff in her administrative and Article 78 proceedings ... touched upon matters other than her personal tenure rights as a BOCES employee.") (internal citations and alterations omitted); Connolly v. City of Rutland , 2011 WL 3739064, at *17, 2011 U.S. Dist. LEXIS 94978, at *47 (D. Vt. Aug. 24, 2011) (finding that lawsuit was not a matter of public concern because the "content of the suit, as a whole, pertains to Connolly's termination, the procedures employed by the City to terminate her, and the City's alleged retaliation against her, individually"); Storman v. Klein , 2009 WL 1035964, at *21, 2009 U.S. Dist. LEXIS 34628, at *93-97 (S.D.N.Y. Apr. 20, 2009) (finding that Article 78 petition was not a matter of public concern because it "related entirely to Storman's unsatisfactory rating ... and loss of per session work, and primarily sought to vacate the unsatisfactory rating and to direct defendants to consider Storman for all extra assignments."); Herbil Holding Co. v. Brook , 84 F. Supp. 2d 369, 373 (E.D.N.Y. 2000) ("Clearly, in the Article 78 proceeding, Douglas was seeking to remedy grievances relating to his individual employment situation, not to draw attention to issues of interest to the community.").

d. The New Phone Complaint did Not Pertain to a Matter of Public Concern.

Likewise, New Phone's TCA complaint against the City did not pertain to a matter of public concern. The bulk of the complaint relates to alleged RICO violations of other IPPs.²⁸⁴ Some of the complaint does implicate anti-competitive practices of the City, such as the advance notice of rule changes to some IPPs that that allowed them to capture market share.²⁸⁵ But none of the relief sought in the complaint would have benefited the public; New Phone only sought damages for itself.²⁸⁶ It asked for no injunction to prevent the City from continuing these practices, and no damages on behalf of other IPPs or consumers.²⁸⁷ The private nature of the bulk of the allegations, combined with the entirely personal nature of the remedies sought, outweigh the public's concern in alleged crony capitalism here.²⁸⁸

284 See New Phone Compl. ¶¶ 6-33 (Dkt. No. 486-4 at 90).

285 See id. ¶¶ 33-40.

286 See, e.g. , id. ¶ 116 ("By reason of the violation of ... [the TCA] by the City of New York, defendant New Phone has been injured in its business in the amount of $20,000,000.00.").

287 See id. ¶¶ 41-116.

288 Accord Gibson , 838 F.3d at 485 ("The content of Gibson's suit may be described as a mix of both personal and private concerns. Yet, considering that the suit sought personal relief and that the facts related internal employment grievances, personal concerns predominate.").

2. Best has Offered Admissible Evidence of Adverse Actions.

In support of the second element of its claim, Best alleges the following instances of retaliation:

(a) by first threatening to remove and then removing Best's PPTs unlawfully

in May, 2000 and August, 2001;

(b) by continuing to refuse to accept Best's executed Franchise Agreement;

(c) by refusing to approve the proposed sale of Best's assets to NYC Public in August, 2000;

(d) by refusing to allow Best to purchase franchise rights from Telco;

(e) by refusing to allow Best to sell its assets to Universal;

(f) by proposing the resolution to retroactively disapprove Best;

(g) by discriminatorily enforcing various rules that resulted in approximately $100,000 in fines;

(h) by subsequently issuing permits to the buyer of Best's PPTs for PPTs that [the] DoITT represented it would not issue permits to Best for; and

(i) by refusing to issue a franchise agreement after the former authorizing resolution expired and a new one was passed by the Council.²⁸⁹

289 TAC ¶ 214(a)-(i).

Although this Court finds that Best has offered admissible evidence that some of these actions occurred and support a claim for retaliation, there are several exceptions.

First, there is no admissible evidence that Defendants issued approximately $100,000 in fines. The only evidence before the Court regarding fines are the 50 NOVs issued in 2000 and 2001,²⁹⁰ and those NOVs are simply a part of the retaliatory removal of phones. Thus, to the extent that Best alleges there were fines other than the NOVs issued as retaliation for protected conduct, Best has failed to make out a prima facie case.

290 See ECB Decision and Order at 2 (Oct. 25, 2005) (Dkt. No. 492-15); see also Notice of Violation (May 8, 2000) (Dkt. No. 491-8) (fining Best $900).

Second, no reasonable jury could find that DoITT refused to approve the sale of assets to NYC Public because there is simply no evidence that DoITT did so.²⁹¹

291 NYC Public was the d/b/a/ name of NYC Telecommunications, Inc. See Notice of Hearing, Dkt. No. 491-17. The only evidence offered is Mr. Chaite's hearsay statement that the owner of NYC Public was scared off by litigation with the City. See Chaite Dep., Dkt. No. 485-6 at 10 ("Q. Do you recall what happened with this deal? A. I think that Mr. Jones decided he didn't want to be embroiled with litigation with the City – with an entity litigating with the City. He thought it would be bad for business"). That hearsay is inadmissible to prove Mr. Jones' motivation.

Third, there is no evidence that DoITT told BAS that it would not issue permits for Best's phones, thereby decreasing the sale price. To the contrary, the evidence shows that on March 3, 2003, DoITT reiterated its position to BAS that Best had lost its interim registry rights, but that DoITT would nevertheless be willing to treat the phones as if they had been on BAS's interim registry.²⁹² Best then entered into an asset purchase agreement with BAS on April 22, 2003.²⁹³ Thus, the evidence shows that DoITT did not drive down the purchase price; instead, it shows that DoITT facilitated the purchase by informing BAS that, if it purchased Best's phones, then BAS would be able to obtain permits and enjoy a compliance grace period.

292 See Letter from DoITT to BAS at 1-2 (Mar. 3, 2003) (Dkt. No. 492-10).

293 See Asset Purchase Agreement at 1 (Apr. 22, 2003) (Dkt. No. 492-11 at 2).

Fourth, there is no evidence regarding the alleged refusal to issue a new franchise agreement after the original authorizing resolution expired. Indeed, there is no evidence in the record that this even happened. It cannot, therefore, form the basis of a prima facie case.

This Court, therefore, recommends granting summary judgment for any first amendment retaliation claim based on: (1) issuing fines other than the 50 NOVs issued in 2000 and 2001; (2) refusing to approve sale to NYC Public; (3) informing BAS that DoITT would not grant permits; and (4) refusing to issue a new franchise agreement after the original authorizing resolution expired.

3. There is a Dispute of Material Fact over Defendants' Motivations.

Finally, Best has offered evidence that two of the adverse actions were substantially motivated by retaliatory animus: (1) the removal of its payphones and issuance of fines in May 2000; and (2) the refusal to accept the signed FA in May 2000. Best has failed to offer sufficient evidence regarding the motivation behind the other retaliatory acts. This Court therefore recommends granting summary judgment on all claims of retaliation based on retaliatory acts other than those two.

a. There is a dispute of material fact over Defendants' motivation behind removing Best's payphones in May 2000.

A reasonable jury could find that the removal of Best's payphones in May 2000 was substantially motivated by its threat of litigation. Best sent the letters containing the threats of litigation on March 13, March 21, and April 14.²⁹⁴ DoITT began removing Best's payphones on May 8, less than four weeks after that final letter.²⁹⁵ That close temporal proximity would be sufficient for a reasonable jury to draw the inference that DoITT was substantially motivated by Best's letters.²⁹⁶

294 See Letter from Ryans to Regal, Dkt. No. 485-3 at 285 (Mar. 13, 2000); Letter from Ryans to Regal, Dkt. No. 485-3 at 288 (Mar. 21, 2000); Letter from Ryans to Regal, Dkt. No. 485-3 at 295 (Apr. 14, 2000).

295 See Chaite Decl. ¶ 17 (Dkt. No. 486-2).

296 See Nagle v. Marron , 663 F.3d 100, 111 (2d Cir. 2011) (holding that a delay of six weeks between an employer learning of plaintiff's speech and taking an adverse employment action supported an inference of causation); Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Educ. , 444 F.3d 158, 168 (2d Cir. 2006) ("[T]he lapse of only several months after the letter and several weeks after the press conference between the protected speech and the adverse employment action is sufficient to support an allegation of a causal connection strong enough to survive summary judgment.").

Defendants argue, however, that they are entitled to summary judgment because they have evidence that they would have removed Best's payphones in May 2000 regardless of the letters. Specifically, they claim they would have removed the phones because Best failed to sign the FA and Best was, therefore, operating its phones on the PROW without authorization.²⁹⁷ As proof, Defendants point to letters notifying Best that if it did not complete the FA process by March 13 then its PPTs would be subject to removal.²⁹⁸ Furthermore, Mr. Regal himself has testified that DoITT's goal when it removed the payphones was to "provoke some action to comply with the law by Best."²⁹⁹

297 See Defs.' Memo. at 22 n.7 (Dkt. No. 485-7) ("[T]he removal of Best's phones in May 2000 ... occurred after Best refused to enter into the FA and was given substantial notice of the potential consequences of continuing to operate its phones on the PROW absent authorization.").

298 See Letter from Berkley to Chaite, Dkt. No. 485-3 at 277 (Feb. 18, 2000) ("Best and New's closing packages must be completed by March 13, 2000, or your PPTs would be subject to removal by the City at your expense."); Letter from Regal to Chaite, Dkt. No. 485-3 at 281 (Mar. 10, 2000) ("Failure by Best and New to submit such materials within sixty days of January 13 ... will render Best's and New's public pay telephones on the City's property subject to removal.").

299 Regal Dep. at 61:2-4 (Dkt. No. 530-1) ("We removed a few to start with and hoped that that would provoke some action to comply with the law by Best.").

To be sure, uncontroverted evidence that a defendant would have engaged in the adverse action regardless of the protected activity can defeat circumstantial evidence of motivation.³⁰⁰ Here, though, Defendants' evidence of an innocuous motive is not uncontroverted; rather, Best has evidence that Defendants' proffered motivation is a pretext. That contrary evidence is sufficient to spark a dispute of material fact here.

300 Essentially, a defendant's direct and uncontroverted evidence of innocuous motive is evidence of a superseding cause. See Howard v. City of New York , 602 Fed. Appx. 545, 548 (2d Cir. 2015) ("[T]he government can avoid liability if it can show that it would have taken the same adverse action in the absence of the protected speech.") (citations omitted); Kohutka v. Town of Hempstead , 994 F. Supp. 2d 305, 321 (E.D.N.Y. 2014) ("[E]ven if a plaintiff has established a prima facie case of First Amendment retaliation, a public employer may ultimately avoid liability if it can demonstrate that it would have taken the same adverse action even absent the protected speech.") (citations omitted).

Best's theory of the case here is straightforward. Although Best was arguably no longer in compliance with the law,³⁰¹ none of the other PPT operators who failed to meet the deadline had their payphones removed in 2000.³⁰² That lenience suggests that DoITT's true motive was not righteous enforcement of the law.

301 Best's lack of compliance is not beyond cavil; indeed, two ECB judges found that Best was still in compliance with the law in May 2000. See ECB Decision, Dkt. No. 486-10 at 28 (Nov. 7, 2001); ECB Decision and Order at 5 (Oct. 25, 2005) (Dkt. No. 492-15).

302 See Regal Dep. 58:14-20 (Dkt. No. 525-1) ("Q Did the city remove from the public rights-of-way any of the payphones owned by any of those other companies in 2000? A No, for the reasons that I gave you earlier.").

One comparator in particular supports this theory. DoITT ultimately denied NYTAS's application for a franchise because its owner had multiple criminal convictions, including one for stealing PPTs from competitors.³⁰³ DoITT accordingly gave NYTAS sixty days from May 30, 2000 to remove or sell its payphones.³⁰⁴ Nevertheless, NYTAS was able to continue to operate phones on the PROW until February 8, 2010, when DoITT gave the company another sixty days to remove or sell its payphones.³⁰⁵ Best did not benefit from similar generosity. Best did not receive a new deadline, even though Best told DoITT on April 4 that it needed documents to complete a sale to an interested buyer.³⁰⁶ Instead of responding to that request, DoITT began removing Best's payphones without prior notice a mere eight weeks after the deadline had passed.³⁰⁷

303 See Memo from Picker to Berkley, Dkt. No. 485-6 at 30 (Apr. 10, 2000) ("I suggest that Hirakis' conviction on theft-related charges stemming from allegations that he stole pay telephones from his competitors be carefully considered by DoITT in assessing his fitness to be a franchisee."); Memo from Reiss to Hirakis, Dkt. No. 485-6 at 32 (May 30, 2000) (notifying NYTAS that it had failed the VENDEX process).

304 Memo from DoITT to NYTAS, Dkt. No. 485-6 at 32 (May 30, 2000) ("NYTAS has sixty (60) days following this notice to either (1) enter into an agreement to sell its public pay telephones ... or (2) remove its public pay telephones ... from the City's property.").

305 See Letter from DoITT to NYTAS, Dkt. No. 486-8 at 140 (Feb. 8, 2010) ("If NYTAS fails within sixty (60) days to (1) enter into an agreement to sell its public pay telephones ... or (2) remove all its public pay telephones from City property, then any and all of NYTAS' PPTs located on City property shall be subject to removal."); see also Defs.' Memo. at 28 (Dkt. No. 485-7) ("NYTAS was allowed to continue to operate its phones on the PROW beyond this timetable because of the pending litigation with Global, the resolution of which would have precedential value.... Once the Global litigation concluded [in 2009], DoITT reset the 60-day period for NYTAS.") (internal citations and quotation marks omitted).

306 See Letter from Ryans to Regal, Dkt. No. 485-3 at 296 (Apr. 14, 2000).

307 See Chaite Decl. ¶ 17 (Dkt. No. 486-2); see also Notice of Violation, Dkt. No. 486-4 at 126.

This disparate treatment—nine years for a literal criminal operator of PPTs and eight weeks for Best—would allow a reasonable jury to infer that DoITT's purported zeal to enforce the law is a pretext. Certainly, Defendants have a story for why they treated NYTAS differently; they explain that they allowed NYTAS to continue to operate for nine years because pending litigation with Global had precedential value.³⁰⁸ The Global litigation, however, began three years after NYTAS's deadline expired,³⁰⁹ suggesting that even this explanation is itself a pretext.

308 See Defs.' Memo. at 28 (Dkt. No. 485-7).

309 See Compl., Global Network Comm. v. N.Y.C. , 03-cv-7934, 2003 WL 26111292 (S.D.N.Y. Oct. 7, 2003) (Dkt. No. 1). This may be considered here because docket sheets such as this are public records of which courts can take judicial notice. Mangiafico v. Blumenthal , 471 F.3d 391, 398 (2d Cir. 2006) (citation omitted).

Generally, courts "are reluctant to decide issues of intent on a motion for summary judgment."³¹⁰ This case is no different. The temporal proximity of the removal is suggestive of pernicious motive.³¹¹ And although the City has an innocent explanation, a jury here could "disbelieve the ... explanation ... because the explanation is weakened by inconsistencies or logical flaws."³¹² That is a classic dispute of material fact over motive that is inappropriate for resolution via summary judgment.³¹³

310 Schoolcraft v. City of N.Y. , 103 F. Supp. 3d 465, 512 (S.D.N.Y. 2015) (quoting Vumbaca v. Terminal One Grp. Ass'n L.P. , 859 F. Supp. 2d 343, 380 (E.D.N.Y. 2012) ).

311 See Nagle , 663 F.3d at 111 ; Cioffi , 444 F.3d at 168.

312 Williams v. Regus Mgmt. Grp., LLC , 836 F. Supp. 2d 159, 174 (S.D.N.Y. 2011).

313 Accord Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Turtur , 892 F.2d 199, 205 (2d Cir. 1989) ("Questions of intent, we note, are usually inappropriate for disposition on summary judgment.").

b. There is a dispute of material fact over Defendants' motivation behind refusing to accept Best's signed FA in May 2000.

Likewise, a reasonable jury could conclude that Defendants' motivation behind refusing to accept Best's signed FA in May 2000 was retaliatory animus. The circumstantial evidence to support that inference is straightforward; Best delivered the signed FA with the reservation of rights to litigate on May 10, 2000.³¹⁴ The following day, DoITT implicitly rejected the FA by faxing an agreement to Best requiring Best to sell its phones to another company, to acknowledge that it had lost its rights to a franchise by failing to meet the deadline, and to acquiesce to the removal of its payphones until a sale was completed.³¹⁵ That is a prima facie case for substantial motivation.³¹⁶

314 See Signed Franchise Agreement, Dkt. No. 485-4 at 129 (May 10, 2000).

315 See Fax from Regal to Best, Dkt. No. 486-4 at 129 (May 11, 2000).

316 Accord Varela v. Demmon , 2009 WL 1741576, at *4, 2009 U.S. Dist. LEXIS 56448, at *11 (S.D.N.Y. June 19, 2009) adopted by 2009 WL 2146753, 2009 U.S. Dist. LEXIS 62631 (S.D.N.Y. July 17, 2009) ("Here, there is easily enough evidence for a reasonable jury to conclude that the misbehavior report was retaliatory inasmuch as the disciplinary action took place the next day.") (citation omitted).

Again, Defendants offer reasons why they would have rejected the FA regardless of the reservation of a right to sue. They claim that they rejected the FA because (1) the FA was not submitted by the March 13, 2000 deadline; (2) the FA package did not contain all required closing documents; and (3) the FA's reservation of rights was a unilateral alterations to the language of the agreement approved by the FCRC and was, therefore, a counter-offer instead of an acceptance.³¹⁷ A reasonable jury could conclude, however, that each of these proffered explanations are pretext.

317 Samuelson Decl. ¶ 49; see also Defs.' Memo. at 22 n.7 (Dkt. No. 485-7).

Regarding the first basis, there is ample evidence that it is a pretext. Mr. Regal has admitted that DoITT took a meeting with Best on March 20—seven days after the deadline—because it was willing to accept Best's application late.³¹⁸ The fact that DoITT accepted at least three other executed FAs after May 10 further corroborates that lateness of Best's executed FA was not, by itself, a bar to acceptance.³¹⁹ Thus, regardless of Defendants' belief that Best had in fact missed a valid deadline, the evidence shows that Defendants also believed they could ignore their own deadlines. This begs the question: why did DoITT use its discretion to forgive the tardiness of some PPT operators, but not Best? When asked that question, a reasonable jury could answer that the reason was Best's unmistakable intention to litigate the FA's validity under the TCA.

318 See Regal Dep. 54:12-17 (Dkt. No. 530-1) ("Q When the city went into the meeting with Best on March 20th it was still willing to accept a franchise agreement from Best if Best would just sign it? ... A That's my best recollection, yes.").

319 See, e.g. , Franchise Agreement between City of New York and U.S. Telco, Inc., Dkt. No. 486-4 at 136 (May 15, 2000) (showing that U.S. Telco, Inc. signed its FA on May 15, 2000); Franchise Agreement between City of New York and U.S. Telco, LLC., Dkt. No. 486-4 at 140 (May 15, 2000) (showing that U.S. Telco, LLC. signed its FA on May 15, 2000); Franchise Agreement between City of New York and N.C. Telecomm, Inc., Dkt. No. 486-4 at 120 (Oct. 23, 2000) (showing that the City accepted the FA on October 23, 2000); see also List of Public Pay Telephone Companies, Dkt. No. 486-7 at 40, 44 (Nov. 13, 2002) (indicating that U.S. Telco, Inc., U.S. Telco, LLC, and N.Y. Telecomm, Inc. all ultimately received a franchise).

Regarding the second basis, the evidence again supports the inference that the alleged incompleteness of Best's FA package is a pretext. First of all, there is a dispute of material fact over whether Best's package was, in fact, incomplete.³²⁰ Second of all, Best never received an indication that the package was incomplete, suggesting that this is a post-litigation rationalization that was of no concern to Defendants at the time.³²¹ Third of all, DoITT ultimately granted a franchise to applicants who had not completed their complete FA package as late as October 25, 2000, proving that incompleteness was not a true bar to acceptance.³²² Instead, something else must have been the true motivation for DoITT's disparate treatment of those PPT operators and Best. This proffered reason is, therefore, insufficient for Defendants to obtain summary judgment.³²³

320 Compare Samuelson Decl. ¶ 49 with Chaite Decl. ¶ 19 (Dkt. No. 486-2).

321 Chaite Decl. ¶ 19 (Dkt. No. 486-2); see also Regal Dep., Dkt. No. 525-1 at 72.

322 See Letter from DoITT to Russo Communications, Inc., Dkt. No. 486-5 at 23 (Oct. 25, 2000) (requesting additional documents necessary to complete franchise application); Letter from DoITT to U.S. Telco, Inc., Dkt. No. 486-5 at 25 (Oct. 25, 2000) (same); see also List of Public Pay Telephone Companies, Dkt. No. 486-7 at 42, 44 (Nov. 13, 2002) (indicating that Russo Communications, Inc. and U.S. Telco, Inc. ultimately received a franchise).

323 See Byrnie v. Town of Cromwell , 243 F.3d 93, 102-7 (2d Cir. 2001) (finding that summary judgment for defendant was improper where the defendant's stated reasons for its actions lacked credibility due to inconsistencies); Williams , 836 F. Supp. 2d at 174 ("The factfinder may disbelieve the defendant's explanation either because the facts underlying the explanation are false or because the explanation is weakened by inconsistencies or logical flaws.").

Finally, regarding the third basis, a reasonable jury could conclude that the unilateral alteration was not by itself a bar to acceptance. As Defendants' themselves point out, Best had throughout the application process asserted its reservation of rights.³²⁴ Nevertheless, "Best's repeated ‘reservation of rights’ certainly did not dissuade DoITT from recommending approval of a franchise award to Best ... and thus, it is reasonable to conclude that a mere reservation of rights in Best's FA submission ... would not have disturbed DoITT."³²⁵ This Court agrees. Indeed, the fact that DoITT allowed Best's application to go forward up until May 2000, when Best's TCA concerns became clear, strongly corroborates Best's theory that the threat of litigation was DoITT's true motivation.³²⁶

324 See Defs.' Opp. at 25-26 (Dkt. No. 488-4).

325 Id. at 26.

326 Mr. Regal himself has testified that Best's concerns were not completely clear until after the March 20 meeting. See Regal Dep., 42:9-20 (Dkt. No. 525-1) ("Q Prior to that meeting did you have any understanding of what Best's objections were to the franchise framework, the franchise agreement? A I don't remember exactly. I do remember that there were some vague concerns that had been expressed.... Q At the meeting were Mr. Chaite's concerns expressed in a manner which was not so vague? A That's what I remember.").

In the alternative, Defendants insist that the sticking point was not the reservation of rights but was instead Best's statement that it was signing "under protest of the City's authority to implement portions of the agreement which Best believes to be in violation of certain state and federal laws."³²⁷ This, of course, is precisely Best's argument. The duress statement is an indication of a desire to challenge the FA. And if Defendants did not want to accept an FA on that ground, then by definition Defendants were motivated by the threat of litigation.³²⁸ All of this is, though, a roundabout way of getting to the central point: Defendants have offered inconsistent and shifting non-retaliatory reasons for rejecting the FA. Meanwhile, Best has offered evidence that is consistent with retaliatory animus. A fact-finder is needed to weigh the overall credibility of this evidence and decide what was the true motivating reason.

327 Defs.' Opp. at 26 (Dkt. No. 488-4).

328 Defendants also imply a slightly different argument in their briefing: that Best's signed FA could not legally constitute a valid acceptance of the terms approved by the FCRC. It is true that, if a party accepts the terms of a contract but materially alters the terms of acceptance, then the acceptance is in fact a counteroffer and not valid. See Ladau v. The Hillier Grp., Inc. , 2004 WL 691520, at *3, 2004 U.S. Dist. LEXIS 5339, at *8 (S.D.N.Y. Mar. 30, 2004) (citations omitted).
The problem with this argument is that the only alleged change between the FA given to Best and what Best submitted were supplemental statements indicating that Best intended to litigate. If those additions constituted a counter-offer, then that means Best's intent to litigate was a material change that motivated Defendants to reject the signed FA. However, if the threat to litigate was not a material term in the FA, then it would not be a counter offer because "immaterial deviations from the original offer, do not constitute counter-offers but, rather, operate to bind the parties to an enforceable contract." Id. (citation omitted). Thus, either the signed FA was not a counter offer and was acceptable, or Best's stated intention to litigate was a deal-breaker for Defendants. Either way, this argument gets Defendants nowhere.

c. No reasonable jury could conclude that Defendants refused to allow Best to purchase franchise rights from U.S. Telco. because of retaliatory animus.

No reasonable jury could conclude that the substantial motivation behind Defendants' refusal to allow Best to purchase franchise rights from U.S. Telco. was retaliatory animus.

Admittedly, Bruce Regal straightforwardly stated in a letter that Defendants would not allow Best to purchase U.S. Telco's franchise rights until the pending litigation against the City was settled.³²⁹ The referenced litigation, however, consisted of the two actions described above that do not relate to a matter of public concern: the New Phones TCA action and the Article 78 petition.³³⁰ Mr. Regal's stated motivation, therefore, was retaliation for non-protected activity, and cannot form the basis of a prima facie case.³³¹

329 See Letter from Regal to U.S. Telco, Inc., Dkt. No. 485-4 at 190 (Feb. 2, 2001) ("I previously wrote a letter, dated December 5, 2000, to Mr. Chaite's attorney .... That letter set forth certain conditions to a DoITT recommendation to the FCRC that a transfer of an existing franchise to Mr. Chaite be approved. I have not received a response to that letter.").

330 See Letter from Letter from Regal to Sobel, Dkt. No. 485-4 at 182 (Dec. 5, 2000) (stating that DoITT would be prepared to grant Best a franchise or allow Best to purchase an existing franchise provided, among other things, that Best and New Phone "terminate with prejudice claims and actions against DoITT and the City, including Best's Article 78 proceeding ... [and] New's recent action against the City as part of an action against IPANY.").

331 In so far as Best argues, for the first time, that the refusal to allow the purchase was motivated by Defendants' fear of possible litigation over the FA's validity, there is simply no evidence to support that argument. By February 2001, litigation had commenced, and none of it pertained to protected activity. No reasonable jury could conclude that the substantial motivation was Best's letters as opposed to the actually pending litigation against the City.

d. No reasonable jury could conclude that Defendants refused to allow Best to sell its assets to Universal because of retaliatory animus.

Best argues that the City refused to permit Best to sell its PPTs to Universal out of retaliatory animus. However, Best does not cite to any evidence in the record to support this contention. Defendants, by contrast, have offered an innocuous reason for this action: Universal failed to pay its own franchise fees.³³² Accordingly, the City's disapproval of a sale of Best's assets to Universal in 2001 does not support a finding of First Amendment retaliation. e. No reasonable jury could conclude that Defendants prepared the FCRC Resolution because of retaliatory animus.

332 See Letter from DoITT to Universal Telecommunications, Inc., Dkt. No. 485-4 at 235 (Oct. 12, 2001).

Best argues that DoITT's proposed resolution to retroactively disapprove a franchise agreement for Best in December 2001 is evidence of Defendants' retaliatory motive.³³³ But Best has not proffered any evidence to suggest that DoITT's conduct was motivated by animus. Rather, the evidence demonstrates a valid motivation: the ECB's November 7, 2001 decision finding that the FCRC had to expressly rescind its approval of Best's franchise in order for Best to fall out of compliance with the law.³³⁴ Best has offered no evidence that this was a pretext, and so no reasonable jury could draw the tenuous conclusion that this decision was linked to protected conduct that had occurred back in March, April, and May of 2000.

333 See TAC ¶ 203.

334 See Samuelson Decl. ¶¶ 70-71.

Consequently, DoITT's proposed resolution to retroactively disapprove a franchise agreement for Best does not support the conclusion that Defendants retaliated against Best for its exercise of its First Amendment rights.

f. No reasonable jury could conclude that Defendants removed payphones in August 2001 because of retaliatory animus.

Finally, Best alleges that Defendants removed payphones in August 2001 and issued fines in order to retaliate against Best for its protected conduct.³³⁵ This adverse action, however, happened almost fifteen months after the last instance of Best's protected conduct, and also after Best had commenced non-protected litigation against the City. No reasonable jury could, therefore, conclude that the August 2001 removal was substantially motivated by retaliatory animus.³³⁶

335 See Pl.'s Opp. at 15-16 (Dkt. No. 486).

336 See King v. Bratton , 2004 WL 3090605, at *10 (E.D.N.Y. Aug. 25, 2004) (holding that an eleven-month lag between plaintiff's comments and alleged retaliation fails to suggest the necessary causal link); Ashok v. Barnhart , 289 F. Supp. 2d 305, 314 (E.D.N.Y. 2003) ("[T]he interval between a protected activity and an adverse action that results in a finding of retaliation is generally no more than several months."); but see Bernhardt v. Interbank of New York , 2009 WL 255992, at *6 (E.D.N.Y. Feb. 3, 2009) (finding that while an eleven-month passage of time "would suggest strongly the absence of a causal link, such an inference [was] not ... compelled by the available evidence such that the Court could resolve the claim as a matter of law").

D. Defendants have not Briefed whether the Pickering Balancing Test Justifies the Retaliatory Acts.

Although Best has made out a prima facie case, the retaliatory actions must be "balanced against the government's interest in promoting the efficiency of public services."³³⁷ That balance of interests here is a close question. On the one hand, Defendants certainly had a legitimate interest in not entering into a contractual agreement with a business partner who had no intention of abiding by the contract's terms.³³⁸ On the other hand, the parties with appropriate standing to challenge the full scope of the FA's validity under the TCA were those who had entered into the agreement.³³⁹ Best's right to challenge it in court was, therefore, substantial from the public's perspective.

337 Lake James Cmty. Volunteer Fire Dep't v. Burke Cty. , 149 F.3d 277, 282 (4th Cir. 1998).

338 Accord id. (finding that a waiver of the right to challenge a contractual agreement to provide fire services outweighed plaintiff's right to petition because the plaintiff "had abandoned its fire protection duties twice before, leaving the citizens in the Lake James Fire District without fire protection and requiring the County to react on an emergency basis").

339 Glob. Network Communs., Inc. v. N.Y.C. , 562 F.3d 145, 152 (2d Cir. 2009) ("[T]he district court correctly refused to adjudicate Global's claims that several provisions of the City's regulatory scheme, including advertising restrictions, violate the TCA. The provisions noted by Global affect only entities operating under a license, and Global, which had no license to operate, was not affected by them. It therefore lacked standing to challenge them.").

Thus, this Court recommends against granting summary judgment on this ground because Defendants have not briefed this issue and because it is not a trivial matter of law to decide sua sponte .³⁴⁰

340 Accord Hart v. Rick's Cabaret Int'l, Inc. , 967 F. Supp. 2d 901, 936 (S.D.N.Y. 2013) ("Neither party, however, has identified, let alone addressed, this legal issue here. For the time being, therefore, the Court declines to grant summary judgment to either party as to this claim, and denies both sides' motions as to this claim.").

II. Summary Judgment should be Entered Against the Equal Protection Claim.

Defendants also seek summary judgment on Best's Equal Protection claim.³⁴¹ Where "as here, a plaintiff does not claim to be a member of a constitutionally protected class, [it] may bring an Equal Protection claim pursuant to one of two theories: (1) selective enforcement, or (2) ‘class of one.’ "³⁴²

341 See Defs.' Memo. at 24-29 (Dkt. No. 485-7).

342 Vaher v. Town of Orangetown, 916 F. Supp. 2d 404, 433 (S.D.N.Y. 2013) ; see also Hogan v. Cty. of Lewis, New York , 929 F. Supp. 2d 130, 149 n.16 (N.D.N.Y. 2013) ("[T]he Second Circuit has not resolved the question of whether there truly is a distinction between selective enforcement and class of one equal protection theories, [so] courts in this circuit have repeatedly treated them as distinct theories with distinct elements of proof and have accordingly evaluated them as separate claims.") (quoting Bonenfant v. Kewer , 2007 WL 2492030, at *8 (D. Conn. Aug. 30, 2007) ).

A "class of one" claim is brought "where the plaintiff did not allege membership in a class or group" but was "intentionally treated differently from others similarly situated and ... there is no rational basis for the difference in treatment."³⁴³ To succeed under a "class of one" theory, Plaintiff must establish that "(i) no rational person could regard the circumstances of the plaintiff to differ from those of a comparator to a degree that would justify the differential treatment on the basis of a legitimate government policy; and (ii) the similarity in circumstances and difference in treatment are sufficient to exclude the possibility that the defendants acted on the basis of a mistake."³⁴⁴

343 Vill. of Willowbrook v. Olech , 528 U.S. 562, 564, 120 S.Ct. 1073, 145 L.Ed.2d 1060 (2000) (citations omitted).

344 Clubside, Inc. v. Valentin , 468 F.3d 144, 159 (2d Cir. 2006) (citation omitted).

To succeed on a selective enforcement theory, Plaintiff must demonstrate that "(1) the [plaintiff], compared with others similarly situated, was selectively treated; and (2) that such selective treatment was based on impermissible considerations such as race, religion, intent to inhibit or punish the exercise of constitutional rights, or malicious or bad faith intent to injure a person."³⁴⁵ For the reasons discussed below, that motion for summary judgment should be granted on Best's Equal Protection claims, regardless of the specific theory that Best is pursuing here.

345 LaTrieste Rest. & Cabaret v. Vill. of Port Chester , 40 F.3d 587, 590 (2d Cir. 1994) (citation omitted).

A. Defendants should Receive Summary Judgment against any Equal Protection Claims Predicated upon the Exercise of a First Amendment Right.

At the outset, this Court notes that it is possible to bring a class of one or selective enforcement claim based on the theory that the reason for the unequal treatment was the exercise of a First Amendment right. In this case, however, such a claim would merely reframe the First Amendment retaliation claim, which would be duplicative and improper.³⁴⁶ This Court, therefore, recommends granting summary judgment on all of Best's Equal Protection claims predicated upon its exercise of its First Amendment rights.

346 See Frisenda v. Inc. Vill. of Malverne , 775 F. Supp. 2d 486, 518 (E.D.N.Y. 2011) ("[T]o the extent that plaintiff also may be attempting to assert an equal protection claim based upon retaliation for First Amendment activity ... such a claim is completely duplicative of the First Amendment retaliation claim and, therefore, should not go forward.").

B. Defendants should also Receive Summary Judgment against any Equal Protection Claims Predicated upon Personal Animus.

Another valid basis for a class of one or selective enforcement claim is personal animus.³⁴⁷ Best does have ample evidence that personal animus against its owner, Mr. Chaite, may have been the true motivation for Defendants' actions.³⁴⁸ Best's Equal Protection claims based on personal animus, however, must fail as personal animus is a legitimate basis for Defendants to have treated Best differently from other PPT operators.

347 See Millar v. Ojima , 354 F. Supp. 2d 220, 227-28 (E.D.N.Y. 2005).

348 See, e.g. , Chaite Decl. ¶ 21 (Dkt. No. 486-2) ("Later that day, in a telephone conversation that I overheard, Mr. Regal told Mr. Ryans that Best could not have a franchise as long as I was the owner."). This statement is not hearsay because Mr. Chaite personally overheard it and because it was a statement of a party-opponent. See Fed. R. Evid. 801(d)(2). It is, therefore, admissible evidence.

This rule comes from the Supreme Court's decision in Engquist , which held that public employees cannot bring class of one claims related to their employment because the "recognition of a class-of-one theory of equal protection in the public employment context—that is, a claim that the State treated an employee differently from others for a bad reason, or for no reason at all—is simply contrary to the concept of at-will employment."³⁴⁹ Since that decision, courts have extended the Engquist -rule to contractual relationships similar to employment, including that of commercial enterprises licensed to operate on the PROW.³⁵⁰ This Court agrees with those decisions. The City's relationship with contractual counterparties requires it to make subjective, individualized determinations and so there is simply no "arm's-length regulation or other set of standards ... against which the propriety of the ... decisions can be ‘readily assessed.’ "³⁵¹ Best's class of one claim arising out of personal animus is, therefore, barred.

349 Engquist v. Or. Dep't of Agric. , 553 U.S. 591, 606, 128 S.Ct. 2146, 170 L.Ed.2d 975 (2008). Given that this rationale is essentially identical to the rationale behind applying the public concern test in the First Amendment context, it is possible that the Engquist decision has created a per se rule that any party subject to the public concern test in the First Amendment context also may not bring a class of one claim.

350 See JAV Auto. Ctr., Inc. v. Behrens , 2008 WL 9392107, at *5–7, 2008 U.S. Dist. LEXIS 110682, at *17-22 (S.D.N.Y. Oct. 7, 2008), aff'd by 360 F. App'x 176, 177 (2d Cir. 2009) (citations, alterations, and quotation marks omitted) (finding that a tow truck operator who had a license to operate on a thruway could not bring a class-of-one claim arising out of government's decision to terminate that license).

351 Behrens , 2008 WL 9392107, at *6, 2008 U.S. Dist. LEXIS 110682, at *21 (quoting Engquist , 128 S. Ct. at 2153 ).

The Engquist -rule should also bar Best's selective enforcement claim based on personal animus, although this is a closer question. The Engquist decision only addressed class of one claims, and the Second Circuit has thus far declined to address whether the decision also applies to selective enforcement claims.³⁵² Nevertheless, there has been "a movement by the Second Circuit toward holding that Engquist bars ‘selective enforcement’ claims in the public employment context."³⁵³ Because the rationale of Engquist applies equally to selective enforcement claims, this Court agrees and recommends granting summary judgment against Best's selective enforcement claims based on personal animus.

352 See Emmerling v. Town of Richmond , 434 F. App'x 10, 12 (2d Cir. 2011) ("This Circuit has not yet decided whether selective enforcement claims are still viable in the public employment context."); see also Kamholtz v. Yates Cty. , 350 F. App'x 589, 591 (2d Cir. 2009) (declining to decide whether Engquist barred the selective enforcement claim of a public employee).

353 Heusser v. Hale , 777 F. Supp. 2d 366, 387 (D. Conn. 2011).

III. Summary Judgment should be Entered against the Conspiracy Claim.

In order to establish a § 1983 conspiracy claim, a plaintiff must show "(1) an agreement between two or more state actors or between a state actor and private entity; (2) to act in concert to inflict an unconstitutional injury; and (3) an overt act done in furtherance of that goal causing damages."³⁵⁴

354 Pangburn v. Culbertson , 200 F.3d 65, 72 (2d Cir. 1999) (citations omitted).

Even if Best had made a prima facie case of these elements, however, its claim would still fail due to the intracorporate conspiracy doctrine. Under that rule, "officers, agents and employees of a single corporate entity are legally incapable of conspiring together."³⁵⁵ This doctrine applies to New York City, a municipal corporation, and its constituent parts.³⁵⁶ Given that all of the Defendants were officers, agents, or employees of the City at the relevant time, this doctrine bars Best's conspiracy claim.

355 Nassau County Employee "L" v. County of Nassau , 345 F.Supp.2d 293, 304-05 (E.D.N.Y. 2004) (citation omitted).

356 See Vega v. Artus , 610 F. Supp. 2d 185, 205-06 (N.D.N.Y. 2009) (dismissing conspiracy claims pursuant to the intracorporate conspiracy doctrine where all of the defendants were DOCCS employees, and all were acting within the scope of their employment); Little v. City of New York , 487 F. Supp. 2d 426, 441-42 (S.D.N.Y. 2007) (dismissing § 1983 conspiracy claim against two police officers who worked for the City of New York pursuant to the intracorporate conspiracy doctrine).

Admittedly, there is one exception to the intracorporate conspiracy doctrine that applies when the defendants were acting for personal interests other than the interests of the corporate entity.³⁵⁷ But Best cannot rely on that exception here. As discussed above regarding the Equal Protection claim, a reasonable jury could find that Defendants were motivated by two retaliatory motives: a desire to stop Best from asserting its right to sue DoITT for violating the TCA, and a desire to retaliate against Mr. Chaite due to personal animus. Neither motive, however, fits within this exception. Legally, "personal bias does not constitute personal interest and is not sufficient to defeat the intracorporate conspiracy doctrine."³⁵⁸ And as to the former motive, Best has offered no evidence that Defendants' motive to retaliate against Best for threatening to sue was a motivation that stood apart from the interests of DoITT. Without some evidence that they had a personal stake—such as a worry that it would affect their careers—the putative retaliatory motive was in line with DoITT's interests and, therefore, does not fall within the exception to the intracorporate conspiracy doctrine.³⁵⁹

357 The Second Circuit has not yet validated the "intracorporate conspiracy doctrine" in the context of a Section 1983 action. Toliver v. Fischer , 2015 WL 403133, at *22, 2014 U.S. Dist. LEXIS 181684, at *31 (N.D.N.Y. Nov. 17, 2014) (citation omitted). However, numerous district courts have applied the doctrine to dismiss conspiracy charges brought under Section 1983, and there is no apparent reason to believe the Second Circuit would not validate the doctrine in this context. Id.

358 Bond v. Bd. of Educ. of City of New York , 1999 WL 151702, at *2 (E.D.N.Y. Mar. 17, 1999) ("[P]ersonal bias does not constitute personal interest and is not sufficient to defeat the intracorporate conspiracy doctrine.") (citing Johnson v. Nyack Hospital , 954 F.Supp. 717, 723 (S.D.N.Y.1997) ).

359 This is so even though the alleged motive, when drawing inferences in Best's favor, was itself unconstitutional. Compare Povoski v. Lacy , 2016 WL 908899, at *7, 2016 U.S. Dist. LEXIS 15722, at *20-21 (N.D.N.Y. Feb. 8, 2016) ("Liberally construed, plaintiff claims that the defendants involved in the alleged conspiracy were acting in their own personal interests because plaintiff was questioning the death of an inmate, and the possible misuse of funds meant for inmates' benefit.") with Graham v. Peters , 2013 WL 5924727, at *1, 5 (W.D.N.Y. Oct. 31, 2013) (dismissing, under intracorporate conspiracy doctrine claim that defendants conspired to retaliate against plaintiff for exercising his First Amendment rights) and with Rahman v. Fischer , 2012 WL 4492010, at *1, 13 (N.D.N.Y. September 28, 2012) (same).

Accordingly, I recommend granting Defendants' motion for summary judgment on Best's § 1983 conspiracy claim.

IV. Best could Obtain some Damages at Trial.

Finally, Defendants also argue that they are entitled to summary judgment on all claims because Best has failed to support its claims for damages with admissible evidence.³⁶⁰ This argument lacks any merit. The cases cited by Defendants are cases in which it was established that the plaintiff could prove no set of damages.³⁶¹ Here, however, nominal damages are not only recoverable for violations of substantive constitutional rights, they are in fact mandatory .³⁶² It is, therefore, bizarre to argue that judgment should be entered against all claims because some theories of compensatory damages lack adequate support.

360 See Defs.' Memo. at 35-36 (Dkt. No. 485-7). In so far as Defendants are instead requesting summary judgment on specific theories of damages, they have inadequately briefed this issue and this Court declines to sift through each possible measure of damages and assess whether it has adequate evidentiary support. Accord Murphy v. State Dep't of Corr. , 2015 U.S. Dist. LEXIS 124969, at *7 (D. Vt. Aug. 21, 2015), aff'd by 2015 U.S. Dist. LEXIS 125350 (D. Vt. Sep. 16, 2015) (citation omitted).

361 See, e.g. , Felixson v. Bombardier Transp. (Holdings) USA, Inc. , 2015 WL 5037300, at *6–7, 2015 U.S. Dist. LEXIS 112276, at *15-16 (E.D.N.Y. Aug. 24, 2015) (summary judgment granted because plaintiff had failed to provide an expert report legally necessary to establish causation).

362 Matusick v. Erie Cty. Water Auth. , 757 F.3d 31, 64 (2d Cir. 2014) (reversing damages award because "it is plain error to instruct the jury merely that, having found a violation, it ‘may’ award nominal damages") (citation omitted).

V. Most of the Defendant Specific Grounds for Summary Judgment should be Denied.

In the alternative to the claim-specific grounds for summary judgment, Defendants also assert three bases for granting summary judgment with respect to specific defendants: (1) they argue that qualified immunity protects the individual defendants; (2) they argue that there is insufficient evidence that the individual defendants were personally involved; (3) they argue that Best has failed to offer sufficient evidence to support its Monell claims against the City.

For the reasons discussed below, this Court recommends: (1) against granting summary judgment against the individual defendants; and (2) in favor of granting summary judgment against the First Amendment retaliation claim against the City, but not the unconstitutional condition claim against the City.

A. Defendants cannot Rely on Qualified Immunity.

In their motion, Defendants argue that their actions were protected by qualified immunity. The "doctrine of qualified immunity shields government officials from suits for damages arising from the performance of their discretionary functions when, applying an objective standard, ‘their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.’ "³⁶³

363 Webster v. City of New York , 333 F. Supp. 2d 184, 203 (S.D.N.Y. 2004) (citation omitted).

Regardless of whether or not the rights at issue here were clearly established, Defendants cannot prevail with their qualified immunity defense because there is a material dispute of fact over their motives. Although "the qualified immunity inquiry is generally an objective one, a defendant's subjective intent is indeed relevant in motive-based constitutional torts" such as First Amendment retaliation.³⁶⁴ Otherwise, defendants in such cases would always be immunized from liability " ‘so long as they could point to objective evidence showing that a reasonable official could have acted on legitimate grounds.’ "³⁶⁵

364 Johnson v. Ganim , 342 F.3d 105, 117 (2d Cir. 2003) (citation omitted).

365 Id.

As discussed above, Best's First Amendment Retaliation claim should survive summary judgment because there is a dispute of fact over whether Defendants were substantially motivated by retaliatory animus. Thus, this Court must recommend against granting Defendant's motion for summary judgment based on qualified immunity.³⁶⁶

366 Accord Frisenda v. Inc. Vill. of Malverne , 775 F. Supp. 2d 486, 522-23 (E.D.N.Y. 2011) (denying summary judgment based on qualified immunity because there was a dispute of material fact over whether defendant was substantially motivated by plaintiff's First Amendment protected activity).

B. Defendants have Inadequately Briefed the Question of Individual Liability.

Individual liability under § 1983 requires proof of an individual defendant's personal involvement in the commission of the constitutional violations.³⁶⁷ Given the scant evidence against some of the individual Defendants presented here, Defendants may have had a winning argument that there is insufficient evidence of their involvement in this case. But Defendants did not move for summary judgment on this ground.³⁶⁸ Instead, they only raised it—briefly—in their response.³⁶⁹

367 Grullon v. City of New Haven , 720 F.3d 133, 138 (2d Cir. 2013) (citations omitted).

368 See generally Defs.' Memo. (Dkt. No. 485-7).

369 See Defs.' Resp. at 24 (Dkt. No. 487).

An argument "made for the first time in a reply brief need not be considered by a court,"³⁷⁰ and this Court recommends declining to do so here. There is no apparent justification for Defendants to have waited to assert this argument in their response.³⁷¹ Furthermore, Defendants thinly briefed the issue, only making a blanket statement that Best lacked evidence of the individual culpability of all five individual Defendants.³⁷² Plainly, that overbroad statement is not true.³⁷³ Thus, this Court declines to consider an inadequately briefed and improperly raised ground for summary judgment.

370 Playboy Enters., Inc. v. Dumas , 960 F. Supp. 710, 720 n. 7 (S.D.N.Y. 1997) (citations omitted).

371 For example, one valid reason to raise new grounds for summary judgment in a response is if the opposition papers raise new issues. See Bayway Ref. Co. v. Oxygenated Mktg. & Trading A.G. , 215 F.3d 219, 226-27 (2d Cir. 2000). That was not the case here.

372 See Defs.' Resp. at 24 (Dkt. No. 487).

373 See, e.g. , Fax from Regal to Best, Dkt. No. 486-4 at 129 (May 11, 2000).

C. Municipal Liability.

Defendants argue that Best lacks sufficient evidence to support its Monell claim. In general, a plaintiff may make a prima facie Monell claim in one of three ways: by showing (1) that an officially promulgated and endorsed municipal policy facially violates constitutional rights; (2) that actions taken by officials with final policymaking authority caused a constitutional violation; or (3) that policymaking, or lack thereof, exhibited deliberate indifference to constitutional injuries.³⁷⁴ For the reasons discussed below, this Court agrees that Best has failed to make out a prima facie case for municipal liability for First Amendment retaliation. Best has, however, offered sufficient evidence to support municipal liability under its unconstitutional condition claim.

374 See Beatty v. Davidson , 713 F. Supp. 2d 167, 178 (W.D.N.Y. 2010) (citations omitted). Although Courts in the Second Circuit have at times distinguished the Monell theories of widespread practices engendering constructive notice and policymakers' deliberately indifferent failure to change policy, both theories essentially fall under the catch-all of deliberate indifference. See Ferrara v. Maturo , 2017 WL 4273291, at *7–8, 2017 U.S. Dist. LEXIS 156991, at *21-2 (D. Conn. Sep. 25, 2017). Under both, "the relevant inquiry is whether municipal policymakers had either actual or constructive knowledge of subordinates' unconstitutional practices and nonetheless permitted them to continue." Hardy v. Town of Greenwich , 2008 WL 5117370, at *4, 2008 U.S. Dist. LEXIS 98333, *10 (D. Conn. Dec. 3, 2008) (citation omitted); see also Amnesty Am. v. Town of West Hartford , 361 F.3d 113, 126 (2d Cir. 2004) (Sotomayor, J.) (describing constructive acquiescence as synonymous with deliberate indifference); Henderson v. Town of Greenwich , 2006 WL 3791385, at *6–7, 2006 U.S. Dist. LEXIS 92724, at *19-20 (D. Conn. Dec. 22, 2006) (analyzing constructive acquiescence and deliberate indifference as one theory).

1. Municipal Liability for First Amendment Retaliation.

Best does not allege a custom or practice of First Amendment retaliation, nor does it allege that the retaliation was committed pursuant to an official policy. Instead, Best claims that officials with final policymaking authority at DoITT committed the retaliation. To prove municipal liability on that ground, Best must: (1) identify an official vested by law with the relevant final policymaking authority,³⁷⁵ and (2) show that this official directly caused the injury, that the official delegated policymaking to the person who caused the injury, or that the official later ratified the decision.³⁷⁶ The vesting of final policymaking authority is a question of law to be decided by the Court.³⁷⁷

375 See Roe v. City of Waterbury , 542 F.3d 31, 37 (2d Cir. 2008) ("Where a plaintiff seeks to hold a municipality liable for a single decision by a municipal policymaker the plaintiff must show that the official had final policymaking power.... Moreover, the challenged actions must be within that official's area of policymaking authority.") (citations, alterations, and quotation marks omitted).

376 See Stalter v. Cty. of Orange , 2016 WL 8711397, at *10, 2016 U.S. Dist. LEXIS 104237, at *35 (S.D.N.Y. Aug. 5, 2016) ("Authority to make municipal policy may be granted either directly by legislative enactment or may be delegated by an official who possesses such authority.") (citing Pembaur v. City of Cincinnati , 475 U.S. 469, 483, 106 S.Ct. 1292, 89 L.Ed.2d 452 (1986) ); Gonzalez v. Cty. of Suffolk , 2011 U.S. Dist. LEXIS 48380, at *21 (E.D.N.Y. Mar. 14, 2011) (citing Amnesty America , 361 F.3d at 126 ) ("Furthermore, a policy making official may be responsible for a subordinate's conduct if he or she is aware of the unconstitutional behavior but chooses to ignore it, thereby ratifying the conduct.").

377 See Roe , 542 F.3d at 37 (citation omitted).

Here, it is undisputed that Commissioner Dobrin was the final policymaker with the authority both to order removal of Best's payphones and to refuse to accept Best's signed FA.³⁷⁸ There is insufficient evidence, however, that Commissioner Dobrin actually made these decisions. Commissioner Dobrin essentially remembers nothing about DoITT's interactions with Best or any other franchise applicants.³⁷⁹ No one else remembers if he made either decision.³⁸⁰ And there are no emails, memos, or other documents indicating that he made either decision. Thus, without any evidence that he was the one to make these decisions, he cannot be the basis for municipal liability.³⁸¹

378 See L.L. 68 § 6(a); see also NYC Administrative Code § 23-408(i).

379 See Dobrin Dep. Dkt. No. 485-6 at 45 ("Q. During the time when you were commissioner of DoITT, did you come across a company called Best Payphones? A. Not that I can recall."); id. ("Q. During the time you were commissioner at DoITT, were you ever involved in decisions concerning proposed franchisees for public paid telephones who hadn't submitted the proper paperwork? A. Not that I can specifically recall.").

380 See Dobrin Dep., Dkt. No. 485-6 at 50 ("Q. Were you involved in any discussions with anybody as to that position being taken by Mr. Regal ... [to reject Best's signed FA via Fax on May 11, 2000] A. I don't recall any specific conversations about that."); Regal Dep., Dkt. No. 525-1 at 13 ("Q Do you know who at DoITT made the decision not to accept Best's franchise agreement which it submitted? I don't remember exactly who made the ultimate decision on that."); id. at 70 ("Q With respect to Best who made the decision [to remove Best's phones]? A I don't remember.").

381 Accord Watson v. Grady , 2015 WL 2168189, at *13–14, 2015 U.S. Dist. LEXIS 60719, at *41-45 (S.D.N.Y. May 7, 2015).

There is, furthermore, no evidence that he delegated authority to make these decisions. Certainly, given Mr. Dobrin's complete lack of memory, it appears that the authority to order payphone removal or to reject Best's FA may have been delegated to one of the deputy commissioners, such as Elaine Reiss, who could have exercised the commissioner's legal authority.³⁸² There is, however, insufficient evidence that Mr. Dobrin did delegate this authority to a deputy commissioner. At most, the evidence points to Bruce Regal as the principal decisionmaker,³⁸³ but the evidence also undisputedly shows that Mr. Regal was not a final policymaker until at least August 2000.³⁸⁴ There is, therefore, insufficient evidence of a delegation theory.

382 See NYC Charter § 1101 ("Any head of a department ... may appoint ... so many deputies as may be provided for by law ... and ... shall assign to them their duties and may by instrument in writing filed in the department designate any deputy to possess any of the powers and exercise such of the duties of the head of the department."); NYC Charter § 1071 (empowering the DoITT Commissioner to "appoint four deputies").

383 Here, the evidence is sparse, but it does show that Mr. Regal was personally involved with Best's franchise application. See, e.g. , Regal Dep., Dkt. No. 525-1 at 12 (Q Who was it who asked you to get involved specifically with Best back in the 1999 time frame? ... A To the best of my recollection that was Elaine Reiss."); see also Fax from Regal to Best, Dkt. No. 486-4 at 129 (May 11, 2000).

384 Mr. Regal does appear to have had policymaking authority after August 2000 when he became an acting deputy commissioner. See Regal Dep., Dkt. No. 528-1 at 5-6 ("Q Mr. Regal, could you describe generally your duties and responsibilities when you were acting deputy commissioner at DoITT? A I was responsible essentially for the franchising and telecommunications policy."). Before that, however, he appears to not have had that authority. See Regal Dep., Dkt. No. 525-1 at 4 ("Q When you wrote letters to Best ... did you have the authority to formulate those positions or did you have to obtain approval for the various positions from other people? A I certainly was not in a position to be the ultimate decision maker.").

Finally, there is insufficient evidence to show that Commissioner Dobrin ratified the conduct afterwards. Certainly, there is evidence that he did literally ratify some of those decisions in the sense that he was aware of them and agreed with the conclusion later.³⁸⁵ But to make a case under a ratification theory, the plaintiff must show that the policymaker agreed with the principal actor's basis for the retaliatory act.³⁸⁶ And here, there is simply no evidence that Commissioner Dobrin agreed to deny Best's signed FA because of its threats to sue.³⁸⁷ Without some evidence of Commissioner Dobrin agreeing with the retaliatory basis, the ratification theory must fail as a matter of law.³⁸⁸

385 Letter from Dobrin to Best, Dkt. No. 485-4 at 138 (June 19, 2000); Letter from Dobrin to Best, Dkt. No. 485-4 at 172 (Aug. 4, 2000); see also Dobrin Dep., Dkt. No. 485-6 at 51 ("Q. If you signed the document, you would have read it before you signed it? A. Yes.")

386 See Price v. N.Y.C. , 2018 U.S. Dist. LEXIS 105815, at *52-53 (S.D.N.Y. June 25, 2018).

387 The only affirmative evidence of his involvement comes from the letters, which do not even address the acceptance or rejection of Best's signed FA. See Letter from Dobrin to Best, Dkt. No. 485-4 at 138 (June 19, 2000); Letter from Dobrin to Best, Dkt. No. 485-4 at 172 (Aug. 4, 2000).

388 Accord Price , 2018 U.S. Dist. LEXIS 105815, at *52-53.

Thus, summary judgment should be entered against Best's claim of First Amendment retaliation against the City of New York.

2. The City should not receive Summary Judgment against the First Amendment Unconstitutional Condition Claim.

There is, however, sufficient evidence to show that a final policymaker was responsible for the allegedly unconstitutional condition. The FA was approved by the FCRC, which was also, legally, the final decisionmaker over the franchise agreement.³⁸⁹ Thus, summary judgment should not be granted with respect to Best's First Amendment Unconstitutional Condition claim against the City of New York. DISCUSSION OF PLAINTIFF'S MOTION

389 See NYC Charter § 373 ("The ... affirmative vote of at least five members shall be required to approve a franchise agreement.").

Best's theory of the claims it advances at summary judgment is muddled. In so far as it is moving for summary judgment on its First Amendment retaliation, Equal Protection, or Section 1983 conspiracy claims, that motion should be denied for the same reasons discussed above; disputes of material fact remain in the First Amendment retaliation claim, and Defendants are entitled to summary judgment on the Equal Protection and Section 1983 conspiracy claim.³⁹⁰ As for the First Amendment unconstitutional condition claim, this Court recommends against granting summary judgment in Best's favor because it has inadequately briefed its motion.

390 Furthermore, in so far as Best is asking for summary judgment under the takings clause or under substantive due process, those claims are absent from the TAC, and Best's implicit request to amend the TAC to add those claims should be denied for the reasons discussed above.

I. Best's Motion for Summary Judgment on its First Amendment Unconstitutional Condition Claim should be Denied.

Best seeks summary judgment on its unconstitutional condition claim.³⁹¹ It argues that SDNY and the Second Circuit already held in 2000 and 2002, respectively, that substantively identical language in White Plains' franchise agreement constituted a waiver of the right to challenge the FA's validity in court.³⁹² In response, Defendants argue that the FA does not contain any waiver, and that the language at issue in those cases is absent from the FA.³⁹³ Defendants are wrong. The FA clearly does contain the same language that other courts have found to constitute a waiver as a matter of law. Nevertheless, Best still has not adequately shown that it is entitled to summary judgment on this claim.

391 Pl.'s Memo at 6 (Dkt. No. 488-1).

392 See TCG New York, Inc. v. City of White Plains, N.Y. , 125 F. Supp. 2d 81, 94 (S.D.N.Y. 2000), aff'd in part, rev'd in part by 305 F.3d 67 (2d Cir. 2002).

393 Defs.' Opp. at 20 (Dkt. No. 488-4).

The dispute here stems from the fact that section 3.1(4) of the White Plains franchise agreement and section 14.3.2 of the FA—the relevant waiver sections—are both lengthy, multi-clause sections.³⁹⁴ Their unifying import appears to be a warranty from the company that the contract is a valid, binding, and enforceable agreement.³⁹⁵ In the case of White Plains, the trial court found that some of section 3.1(4) sought "to require [the franchisee] to waive its legal right ... to challenge the terms or conditions of the franchise agreement."³⁹⁶ It also found, however, that other "portions of the provision relating to the legal authorization of TCG to enter into the agreement and assume the obligations thereunder are standard contractual representation and warranty provisions" did not constitute a waiver.³⁹⁷ The Second Circuit explicitly upheld that portion of the decision.³⁹⁸ Thus, in so far as the FA contains identical language, that language constitutes a waiver of the right to challenge the FA's validity as a matter of law.³⁹⁹ Unfortunately, neither the trial nor appellate court specified which portions of section 3.1(4) were standard warranties and which were a waiver.⁴⁰⁰

394 See White Plains FA, Dkt. No. 491 at 3-4; NYC FA, Dkt. No. 485-4 at 75-76.

395 Compare White Plains FA, Dkt. No. 491 at 3-4 with NYC FA, Dkt. No. 485-4 at 75-76.

396 TCG New York, Inc. , 125 F. Supp. 2d at 94.

397 Id.

398 See TCG New York, Inc. , 305 F.3d at 81-82 ("The district court also correctly invalidated sections 3.1(4) and 13.6 of the August Proposal, both of which purport to waive TCG's right to challenge illegal provisions of the franchise in court.").

399 The FA is governed by New York law. See NYC FA, Dkt. No. 485-4 at 77 ("This Agreement ... shall be governed ... in accordance with the laws of the State of New York."). Under New York law, "the construction of an unambiguous contract is a matter of law." New Paradigm Software Corp. v. New Era of Networks, Inc. , 2002 WL 31749396, at *5, 2002 U.S. Dist. LEXIS 23753, at *15 (S.D.N.Y. Dec. 9, 2002) (citation omitted). Thus, unless Defendants can demonstrate some other basis for distinguishing those decisions, the Second Circuit's holding is binding here. See 1765 First Assocs. LLC v. Cont'l Cas. Co. , 817 F. Supp. 2d 374, 377 (S.D.N.Y. 2011) ("[T]he central issue involved was strictly a matter of law, the interpretation of a provision of a contract in light of ... [factors such as the] applicable case law construing the identical terms.").

400 See TCG New York, Inc. , 125 F. Supp. 2d at 94 ; TCG New York, Inc. , 305 F.3d at 81-82.

Thus, the parties disagree over what, exactly, was the basis for the prior holdings. Fortunately, the answer is solvable. Section 3.1(4) has only three clauses, one of which clearly is not a waiver.⁴⁰¹ The other two, however, arguably constitute a waiver, and both are present in a substantively identical form in DoITT's FA:

401 See White Plains FA, Dkt. No. 491 at 3 ("THE COMPANY represents and warrants that it is not prohibited from entering into this Agreement and discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement.")

The COMPANY represents and warrants . . . This agreement and all other agreements . . . that this Agreement is the legal, valid and constitute. . . the valid and binding obligations binding obligation of THE COMPANY of the company, and are enforceable . . . in enforceable in accordance with its terms, accordance with their respective terms.⁴⁰³ except as it may be rendered unenforceable by reason of bankruptcy or other similar laws affecting creditors' rights and the applicability of provisional or equitable remedies.⁴⁰² The COMPANY represents and warrants . . . Neither the execution and delivery of this that the consummation of the transactions Agreement by the Company nor the contemplated hereby, and the fulfillment of performance of its obligations contemplated and compliance with the provisions of this hereby will . . . conflict with . . . any statute, Agreement will not conflict with, or constitute regulation, agreement, judgment, decree, court a breach of or a default under, any of the terms, or administrative order or process or any conditions, or provisions of any law, any order commitment to which the Company is a party of any court or other agency of government or by which it. . . is subject or bound.⁴⁰⁵ having jurisdiction, or any contractual limitation, or outstanding indenture, deed of trust, mortgage, loan agreement, other evidence of COMPANY or any Affiliated party is a party or by which it or any of its property is bound, or result in a breach of or a default under any of the foregoing.⁴⁰⁴

[Editor's Note : The preceding image contains the references for footnotes^{402 , 403 , 404 , 405} ]

402 See White Plains FA, Dkt. No. 491 at 3-4.

403 See NYC FA, Dkt. No. 485-4 at 75.

404 See White Plains, Dkt. No. 491 at 3-4.

405 See NYC FA, Dkt. No. 485-4 at 75.

This Court can see no meaningful difference between these clauses in either agreement and concludes that Best is correct: the FA contains a waiver provision. Nevertheless, this Court must recommend denying its motion because the parties have inadequately briefed this issue.

Best may have shown that the FA imposes a condition on the right to petition, but it has failed to show that this entitles it to judgment as a matter of law. This is because even "under the unconstitutional conditions doctrine, the condition that a person give up his constitutional rights is balanced against the government's interest in promoting the efficiency of public services."⁴⁰⁶ Thus, even under some unambiguous "no-challenge" contractual clauses like the one contained in the FA, courts have found that the government's interest outweighed the contractor's right to petition.⁴⁰⁷

406 Lake James Cmty. Volunteer Fire Dep't v. Burke Cty. , 149 F.3d 277, 282 (4th Cir. 1998).

407 Burke Cty. , 149 F.3d at 282 (finding that contractual "no-challenge" agreement with a fire department was a condition on First Amendment rights but also that the government's interest in uninterrupted service outweigh that right).

Admittedly, Best has addressed the issue—which is identical to the Pickering test discussed above in the retaliation context—and Defendants have failed to respond. Nevertheless, this Court is unpersuaded by Best's papers. Best simply asserts that Defendants "cannot possibly cite to a countervailing interest that justifies the waiver provision."⁴⁰⁸ But that simply is not the case. There are numerous obvious interests, the most notable of which is the government's legitimate interest not to do business with a party who plans from the outset to contravene the contractual terms. Some balancing of these interests is necessary, and Best has failed to adequately argue that the balance weighs in its favor.

408 Plf.'s Memo. at 14 (Dkt. No. 488-1).

This Court, therefore, deems this issue inadequately briefed and declines to recommend summary judgment.⁴⁰⁹ Indeed, this Court would reach this conclusion even if the parties had adequately briefed the Pickering test because Best has not explained what, exactly, it needs to prove—legally or factually—to prevail on this claim. This leaves far too much ambiguity for this Court to recommend judgment in Best's favor.⁴¹⁰ Thus, this court recommends denying Best's motion for summary judgment on its unconstitutional conditions claim.

409 Accord Murphy , 2015 U.S. Dist. LEXIS 124969, at *7 ("To the extent that Defendants seek summary judgment ... the Court should reject that argument as inadequately briefed.") (citation omitted).

410 For example, it is unclear whether any factual questions are an element of the claim. See, e.g. , Autor v. Pritzker , 740 F.3d 176, 184 (D.C. Cir. 2014) (reversing grant of 12(b)(6) dismissal and remanding so that the trial court could develop a "factual record and undertake the Pickering analysis in the first instance"). Indeed, at least one court has found that the plaintiff must have been aware of the condition. See Welch v. Paicos , 66 F. Supp. 2d 138, 180-81 (D. Mass. 1999). Furthermore, the parties have focused extensively on whether or not the City's intention was to impose a waiver in the FA, but it is entirely unclear if the defendant's intent to impose the condition on the plaintiff is an element of this claim. Without any clarification on these questions, it is inappropriate to grant summary judgment at this time

CONCLUSION

For the foregoing reasons, this Court makes the following recommendations. First, Best's motion for summary judgment should be denied in its entirety.

Second, this Court recommends finding that the following claims remain in the case at summary judgment: (1) violations of the Equal Protection clause; (2) First Amendment retaliation; (3) Section 1983 conspiracy; and (4) First Amendment unconstitutional condition. This Court recommends finding that no other claims remain in the case.

Third, summary judgment should be entered against all of Best's claims except for: (1) Best's allegations that Defendants retaliated against Best for threatening to exercise its right to petition in March, April, and May 2000 by removing Best's payphones from the PROW, issuing fines against Best, and refusing to accept Best's franchise agreement; and (2) Best's claim that the City's franchise agreement imposed an unconstitutional condition on the right to petition the courts with grievances.

Fourth, and finally, summary judgment should not be entered in favor of any of the individual defendants. Furthermore, the unconstitutional conditions claim against the City should survive, but summary judgment should be entered against the First Amendment retaliation claim against the City.

OBJECTIONS TO THIS REPORT AND RECOMMENDATION

Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b)(2) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report and Recommendation to file written objections. Failure to file timely objections shall constitute a waiver of those objections both in the District Court and on later appeal to the United States Court of Appeals. See Marcella v. Capital Dist. Physicians' Health Plan, Inc. , 293 F.3d 42, 46 (2d Cir. 2002) ; Small v. Sec'y of Health & Human Servs. , 892 F.2d 15, 16 (2d Cir. 1989) ; see also Thomas v. Arn , 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985).

SO ORDERED.