SCANNED ON 612812005 3 F SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PART "ff7 - MADISON SQUARE GARDEN, I I vs NEW Y ON METROPOLITAN SEQ 5 DISM ACTIONm\lCONVENIENT FORUM NDEX NO. I hnotlon DATE 4 s lmotion SEO. NO. 0-q I MOTION CAL. NO, -... The following papera, numbered 1 to were read on this motion to/for Notice of Motlord Order to Show Cause - Affidavits - Exhiblts... Answering Affidavits - Exhibits Repiylng Affldavlts Cross-Motion: 17 Yes 0 No Upon the foregoing papers, it is ordered that this rnotlon Dated: Check one: I3 FINAL DISPOSITION $ NON-FINAL DISPOSITION Check if appropriate: 0 DONOTPdST 0 REFERENCEf, - --#
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 49 f-----lll-_----------------------- X In the Matter of MADISON SQUARE GARDEN, L. P., Pet it ioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules -against- Index No. 104644/05 NEW YORK METROPOLITAN TRANSPORTATION AUTHORITY, and JETS DEVELOPMENT, LLC, Respondents. MADISON SQUARE GARDEN, L. P., Plaintiff,,...-,.I,.,.... :,v._... : II!:'- -against- THE CITY OF NEW YORK, Defendant. -_- --------------------------- HERMAN CAHN, J.: X R 'Q @ *c The City of New York (the City) moves to dismiss complaint for tortious interference with prospective business relations on the grounds that the claim for judicial relief is nonjusticiable, and the complaint fails to state a cause of action, CPLR 3211 (a) (2) and (7). The City also seeks a protective order striking the Notice to Produce Documents, pursuant to CPLR 3103 (a), or granting a stay of the Document Request, pursuant to CPLR 3214 and Rule 12 of the Rules of the
Justices of the Commercial Division, or, alternatively, granting a protective order or stay limiting the Document Request, pursuant to CPLR 3103 (a) and 3214 (b), on the ground that the request is unduly burdensome and overbroad. This action arises out of the well-publicized proposal for the New York Jets football team to build a stadium on the site of the John D. Caemmerer West Side Yards (West Rail Yards), located between 30th Street and 33rd Street, west of llth Avenue. Plaintiff Madison Square Garden (MSG) submitted a competing proposal for the site, and in the complaint herein blames allegedly wrongful acts of the City for the failure of that proposal to be approved. The City argues that the complaint fails to state a cause of action for tortious interference with MSG's prospective business relationship with the Metropolitan Transit Authority (MTA). Specifically, the City maintains that the complaint does not allege that MSG would have received the development rights "but for" the City's conduct; it does not allege any acts that constitute "wrongful acts" so as to support its claim; and it does not allege facts to support the conclusion that the City's actions were motivated solely by malice. In order to state a claim for tortious interference with prospective business relationship, a plaintiff must allege that the "third party would have entered into or extended a 2
contractual relationship with plaintiff but for the intentional and wrongful acts of the defendant." WFB Telecommunications, Inc. v NYNEX Corp., 188 AD2d 257, 258 (lgt Dept 1992). In other words, in order to prevail on this motion, the City must demonstrate that MSG failed to allege that "but for" the City's actions, the MTA would have entered into a contractual relationship with MSG, or facts to support the conclusion that the City's actions were wrongful or motivated solely by malice. MSG argues that there need not be absolute certainty, only some certainty that its proposal would have been accepted "but for" the City's interference. This, it claims, can be shown by the fact that only two qualifying bids were submitted in response to the MTA Request For Proposals (RFP), those of MSG, and of Jets Development, LLC (the Jets). MSG contends that if the MTA had not granted the development rights to the Jets, it would have obtained the rights, because it was the only other qualifying bid. There are two major flaws in MSG's argument. The first is that the RFP stated unequivocally that the MTA was not obligated to accept any of the proposals. If MSG's proposal was not in keeping with what the MTA envisioned for the site, the MTA could have refused to accept MSG's bid. Thus, MSG has not demonstrated with any degree of certainty that it would have obtained the development rights to the West Rail Yards. 3
Additionally, MSG has offered no factual allegations to support a conclusion that, in the absence of the City's allegedly wrongful conduct, the MTA would have refused to give the development rights to the Jets. In order to reach that conclusion, MSG must demonstrate that its proposal was the most beneficial to the public, and that, therefore, the MTA would have granted it the development rights. This requires a finding that the determination of the MTA was improper. However, in the prior motions in this matter, this court concluded that the MTA had a reasonable basis upon which to grant the development rights to the Jets. That determination was affirmed by the Appellate Division, and is law of the case. Consequently, MSG has failed to adequately allege that "but for" the City's allegedly wrongful or malicious acts, the MTA would have entered into a contract with MSG. Even had MSG adequately alleged the "but for" element, its cause of action could not stand. While MSG contends that the City engaged in wrongful acts, including public misrepresentations and the exercise of extreme economic pressures, those contentions do not pass scrutiny. While there were, undoubtedly, City officials who spoke about their opposition to MSG's proposal, those statements do not rise to the level of wrongful acts so as to be actionable. In addition, many of them were made at times when they could not 4
have affected the MTA's decision, and, therefore, cannot be held to have caused the MTA to decline to enter into a contractual relationship with MSG. "'Wrongful means' include physical violence, fraud os misrepresentation, civil suits and criminal prosecutions, and some degiees of economic pressure; they do not include persuasion alone although it is knowingly directed at interference with the contract." Guard-Life Corp. v 5'. Parker Hardware Mfg. Corp., 50 NY2d 183, 191 (1980). The statements must be of such a degree as to warrant a finding of culpability. Under [NBT Bancorp Inc. v Fleet/Norstar Fin. Group, Inc., 87 NY2d 614, 624-625 (1996)], where a suit is based on interference with a nonbinding relationship, the plaintiff must show that defendant's conduct was not "lawful" but "more culpable." The implication is that, as a general rule, the defendant's conduct must amount to a crime or an independent tort. Conduct that is not criminal or tortious will generally be "lawful" and thus insufficiently "culpable" to create liability for interference with prospective contracts or other nonbinding economic relations. Carve1 Corp. v Noonan, 3 NY3d 182, 190 (2004). The statements that MSG contends falls into this group are not of the nature intended to be categorized as "wrongful." The statements of the public officials were, for the most part, clearly the opinions of those officials. As such, they cannot be classified as "fraud or misrepresentation." Further, many of those statements are much more in the nature of attempting to persuade rather than uttering misrepresentations. 5
The fact that emotions surrounding the plans to build a stadium were (and are still) running high must be considered in determining whether the statements were, in fact, misrepresentations or were part of the ubiquitous political hype that these types of proposals engender. Even granting that the pleading must be liberally construed in a manner favorable to the plaintiff, there must be an arguable basis for concluding that the statements made were misrepresentations rather than expressions of opinions, that they were made to people that would be influenced thereby not to contract with plaintiff, and that they were made at a time that such statements could have a negative effect on the prospective business relation. See NBT Bancorp Inc. v Fleet/Norstar Fin. Group, Inc., 87 NY2d 614, 624-625 (1996). Here, any statements made after the Jets were awarded the development rights could not have affected the decision. Any statements made before the RFP was issued were similarly ineffectual. The few statements remaining, from what appears in the complaint, were expressions of opinion and did not reach the level of "wrongful." Id. MSG's allegations that the City exerted extreme economic pressure are also insufficient. While the complaint alleges that contractors and potential developers were afraid to submit proposals, or to participate in MSG's proposal, MSG does not allege that the City did anything to cause this fear. Without 6
basing the supposed fear on an action of the City, that fear cannot stand as the basis of wrongful actions by the City. MSG's complaint of extreme economic pressure, based upon the City stating that it would not likely approve rezoning of the West Rail Yards for any party other than the Jets, is also insufficient. The statement of the deputy mayor, that it is "highly unlikely" that the City would rezone the property for any other buyer, was clearly a statement of opinion. The Deputy Mayor does not control the zoning, and the MTA certainly was aware of that. The MTA was also aware that the City wanted to have a stadium on the site. Neither of these realities was changed by the Deputy Mayor's statement. Further, the proposals were made on a "where is/as is" basis. The risk of rezoning was on the entity making the proposal. MSG has not explained how the Deputy Mayor's statement affected MSG's bid. Nor has MSG adequately alleged that the City's actions were malicious. Where a plaintiff has failed to allege facts to support an inference that the defendant's acts were criminal or independently tortious, the only basis on which it can recover for tortious interference with a prospective business relation is if it alleges that the sole motivation for the defendant's conduct was to inflict harm on the plaintiff. Carve1 Corp. v Noonan, 3 NY3d at 190; NBT Bancorp Inc. v Fleet/Norstar Fin. Group, Inc., 215 AD2d 990, supra. While MSG contends that the 7
tenor and personal nature of the City's supposed attacks against MSG demonstrate that a campaign to smear MSG ultimately became the sole motivating factor in the City's behavior, the facts alleged in the complaint do not bear out that contention. Rather, as the complaint acknowledges, the City wanted the development rights to go to the Jets because the City wanted to see a new stadium, together with the economic advantage that it thought would potentially come to the City, including the opportunity of hosting the 2012 Olympic games and the 2010 Super Bowl. That motivation contradicts the allegation that the motive was to injure MSG, and consequently, malicious. The City maintains that MSG's claim for relief, seeking permanent injunctive relief, is nonjusticiable. The City argues that the harm sought to be enjoined is contingent upon events which may not come to pass, and the claim to an injunction is wholly speculative and abstract. Thus, even if there were a claim stated, the relief sought would be unavailable. MSG maintains that the tortious interference alleged arises from completed acts of the City that prevented MSG from engaging in business relations with the MTA and third-party developers who did not work with MSG because of City threats. MSG seeks to prevent the City from continuing to interfere in MSG's prospective business relations with the MTA in the future. At oral argument, MSG argued that, even if the Article 78 petition 8
challenging the MTA determination were not successful, as indeed it was not, this matter is justiciable because there are "other development aspects that [MSG is] involved in." Transcript, at 16. Justiciability is a concept that includes the concepts of political questions, ripeness, and advisory opinions. New York State Inspection, Sec. and Law Enforcement Employees, Dist. Council 82, AFSCME, AFL-CIO v Cuorno, 64 NY2d 233, 238 (1984). Here, the question raised is whether there is a controversy that is ripe for injunctive relief. While MSG contends that, even though the MTA's determination was upheld, there are ongoing concerns regarding the City's actions, it has not alleged specifically what actions by the City it seeks to enjoin that relate to a dispute currently sub judice. MSG's complaint addresses only MSG's attempt to develop the West Rail Yards. This court found that the MTA did not act improperly in awarding the development rights to the Jets. Since that determination was made, there is no basis on which to enjoin the City from engaging in alleged interference with MSG's proposal to develop the site. MSG does not have any basis, at this time, to go forward with its proposal. Thus, any injunction would be based on a fiction. If, in the future, the MTA issues another RFP, or decides to reject the Jets' proposal, and MSG is concerned about possible detrimental City action ensuing, it can seek appropriate judicial 9
intervention at that time. At this time, these is nothing before the court that requires any action, because the MSG proposal is not currently under review, nor is it being considered by the MTA. Consequently, even if the complaint stated a cause of action against the City, injunctive relief would not be warranted. In view of this court's determination that the complaint must be dismissed, the discovery issues raised in this motion are moot. Accordingly, it is hereby ORDERED that so much of the motion of the City of New York as seeks to dismiss the complaint against it is granted, and the third cause of action of the complaint is severed and dismissed; and it is further ORDERED that so much of the motion as seeks a protective order is denied as moot. Dated: June 24, 2005 ENTER: 10