# ONE JOURNAL SQUARE PARTNERS URBAN RENEWAL COMPANY LLC v. JERSEY CITY REDEVELOPMENT AGENCY

> District Court, D. New Jersey · August 7, 2019

URL: https://www.frixlaw.com/law-library/cases/10266631

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** August 7, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## How later opinions describe it (automated extraction)

- noting that some cases involving “zoning decisions, building permits, or other governmental permission required for some intended use of land owned by the plaintiffs . . . implicat[ed] the ‘fundamental’ property interest in the ownership of land”
- finding that the plaintiff had “ample procedural due process” when she had access to “full appellate review in state court” of the state actor’s conduct
- finding that a public housing contractor did not have a “protectible property interest in its contract with [the government agency] that is entitled to Fourteenth [] Amendment protection.”

## Opinion text

Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ONE JOURNAL SQUARE PARTNERS
URBAN RENEWAL COMPANY LLC, et al.,
Civil Action No. 18-11148
Plaintiffs,
V. OPINION
JERSEY CITY REDEVELOPMENT
AGENCY, et al.
Defendants.

John Michael Vazquez, U.S.D.J.
This matter concerns an immense redevelopment project in Jersey City. The financial
stakes are quite high. Plaintiffs accuse Defendants of breaching agreements related to the project.
The Court, however, does not have independent jurisdiction over Plaintiff's contract, quasi-
contract, and tort claims. To invoke the Court’s subject matter jurisdiction, Plaintiffs assert an
overarching theory of political retribution of a constitutional magnitude, But Plaintiffs’ factual
assertions in support of this theory fall well short of the requisite pleading standard. As a result,
the Court dismisses the matter. .
Plaintiffs are One Journal Square Partners Urban Renewal Company LLC, One Journal
Square Tower North Urban Renewal Company LLC, and One Journal Square Tower South Urban
Renewal Company LLC (collectively “JSP” or “Plaintiffs’). Defendants are Jersey City
Redevelopment Agency (“JCRA”), City of Jersey City (the “City”), and Steven Fulop (collectively
“Defendants”). Fulop is the City’s mayor.

Currently pending before the Court are three motions to dismiss Plaintiffs’ First Amended
Complaint (“FAC”) by Defendants, brought pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject
matter jurisdiction and Fed. R. Civ. P. 12(b)(6) for failure to state a claim. D.E. 29, 30,31. The
Court reviewed the parties’ submissions in support and in opposition’ and decided the motion
without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons
stated below, Defendants’ motions are granted.
I. INTRODUCTION,
At issue is a $900 million real estate development project (the “Project”) at One Journal
Square in Jersey City, New Jersey. FAC 1. Plaintiffs are affiliated entities that purchased the
property on February 14, 2014 from a prior developer. FAC {J 1, 3-5, 27. One of the principal
investors in Plaintiffs is Kushner Companies LLC. Jd. 91. Jared Kushner was the CEO of Kushner
Companies LLC until January 9, 2017, when he was named a senior advisor to President Trump,
a position Kushner still holds today. Jd. JJ 1, 28, 63.
On April 21, 2015, Plaintiffs and JCRA entered into an agreement (the “Redevelopment
Agreement”) whereby Plaintiffs would construct the Project, which includes two residential towers
(one 70-story tower and one 50-story tower, housing a maximum of 3,000 residential units

| JCRA’s moving brief will be referred to as “JCRA Br.,” D.E. 29-1; Fulop’s moving brief will be
‘Fulop Br.,” D.E. 30-1; the City’s moving brief will be “City Br.,” D.E. 31-1; Plaintiffs’ omnibus
opposition will be “Pl. Opp’n,” D.E. 36; JCRA’s reply will be “JCRA Reply,” D.E. 38; Fulop’s
reply will be “Fulop Reply,” D.E. 41; the City’s reply will be “City Reply,” D.E. 39.
? The facts are derived from Plaintiffs’ FAC, D.E. 26. When reviewing a motion to dismiss, the
Court accepts as true all well-pleaded facts in the complaint. Fowler v. UPMC Shadyside, 578
F.3d 203, 210 (3d Cir. 2009). Additionally, a district court may consider “exhibits attached to the
complaint and matters of public record” as well as “an undisputedly authentic document that a
defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the
document.” Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.
1993).

combined), seated atop an 1 1-story base building housing 160,000 square feet of commercial space
and a 1,500-space parking garage. FAC § 32; D.E. 26-1 (“RA”) at Schedule B-1. The
Redevelopment Agreement placed a series of obligations on both Plaintiffs and JCRA in
completing the Project. See RA §§ 2.01-16.12, Schedule C-1, Schedule C-2. Plaintiffs then began
work on the Project. FAC {ff 58-59.
Plaintiffs identify two critical events that reportedly engendered animosity with Defendant
Fulop. First, on May 6, 2017, during a presentation in China to potential investors in the Project,
Nicole Kushner Meyer (Jared Kushner’s sister) “made comments about the Project,” FAC § 71,
such as that the Project “means a lot to me and my family,” as reported by the New York Times,
Javier C. Hernandes, Cao Li, and Jesse Drucker, Jared Kushner’s Sister Highlights Family Ties in
Pitch te Chinese Investors, The New York Times (May 6, 2017). The following day, Fulop posted
a link to the New York Times article on Facebook and made the following comment:
I want to be clear with the residents on where the City stands here.
Last week, the Developer of this Project submitted an application to
Jersey City for tax subsidy and abatement of this property. The
administration made clear to the applicant that the City is not
supportive of their request and while the law requires a first reading
ordinance vote, if they submit an application I don’t see the council
voting in favor.
FAC § 72 (emphasis omitted); D.E. 26-3 at 2.
Second, on January 24, 2018, Bloomberg published an article quoting Charles Kushner
(Jared Kushner’s father), suggesting that the Project would break ground in 2018. FAC 4 90;
David Kocieniewski and Caleb Melby, Elder Kushner Met With N.J. Mayor, Sees 2018
Groundbreaking, Bloomberg (January. 24, 2018). The same day, Fulop responded by calling a
partner with Kushner Companies on the Project, and stating, “what the f*** is going on with this

article?” FAC 491. Fulop also allegedly told the partner that he would no longer support the
Project. Jd. On June 29, 2018, Fulop then tweeted a link to the Bloomberg article and stated:
I think our office/comment is 100% clear in the story. Our position
has NOT changed + we don’t see support for incentives or
abatements from the city for this project. .. . I suspect it’s DOA?
Id. ¥ 92; D.E. 26-3 at 3.
Two weeks before Charles Kushner’s comments to Bloomberg, Fulop met with
representatives of Plaintiffs on January 10, 2018. FAC 988. During the meeting, Fulop allegedly
made some comments concerning tax abatements on the project, including that it would be “blatant
discrimination” for Plaintiffs to be refused tax abatements because a prior developer had been
granted abatements, other similarly-situate developers received abatements, the Redevelopment
Agreement required Defendant JCRA to cooperate in obtaining abatements, and Fulop’s executive
order mandated abatements. /d. Yet, Fulop said that the problem was the involvement of the
“Kushner family” in the Project, adding that the problem would disappear if the Kushners were
replaced, Id.
On April 17, 2018, Defendant JCRA served on Plaintiffs a Notice of Default (the “Notice”).
FAC 4 98; D.E. 26-4 (“NOD”). The Notice claimed that Plaintiffs defaulted on their obligations
under the Redevelopment Agreement in three ways: {1} failure to timely commence construction;
(2) failure to timely submit evidence of firm commitments on financing; and (3) failure to timely
satisfy other agreed upon contingencies, such as securing government funding and approval. FAC
799; NOD at 1. Plaintiffs allege that the Notice asserts frivolous violations of the Redevelopment
Agreement, and that instead, JCRA’s true motivation for the Notice is political animus towards

The Court assumes “DOA” to mean “dead on arrival.”

Jared Kushner and President Trump. FAC § 1, 100. Plaintiffs set forth numerous factual
allegations demonstrating why the Notice is legally unsupportable. /d. 4] 101-118.
On June 27, 2018, Plaintiffs filed their Complaint. D.E. 1. In response to an article
reporting on the Complaint, Fulop tweeted the following on June 27, 2019:
Nonsense. Bottom line: the same way they illegally try to use the
presidency to make $ when it suits them is the same way here where
they try to use the president to pretend to be victims when it suits
them. Lawsuit = they will say/do anything to make $.
id. 119; D.E. 26-3 at 7. The following day, on June 28, 2018, Fulop stated the following in an
email to reporters:
It’s not like the Kushners have a great deal of credibility in anything
they say. Their entire lawsuit is hearsay nonsense. Bottom line — the
same way they illegally use the presidency to make money is the
same way here they try to use the presidency to be pretend victims.
They will do anything to manipulate a situation.
Id. § 120 (emphasis omitted).
Plaintiffs immediately sent a cease and desist letter to Fulop, demanding that he stop
making such statements. Jd. § 121. In response, Fulop tweeted the following on June 29, 2018:
I got another letter from the Kushner family today threatening to sue
me AGAIN. They demand an apology for saying the truth + they
even drafted a tweet for me to send out. It’s not going to happen. Ill
revise my tweet slightly when THEY apologize publicly (maybe) . .
.. not going to apologize for saying the truth. Whether it’s
inaccurately reporting ownership in properties, or misrepresenting $
partners, or outright saying in China that $ in Jersey City properties
means lots to the family, I think the public can judge 4 themseives[.]
Id (emphasis omitted); D.E. 26-3 at 8.
In addition to Fulop’s tweets, on September 5, 2018, Defendants moved to dismiss the
original Complaint. D.E. 19, 20,21. On September 26, 2018, Plaintiffs filed the FAC, asserting
the following eleven Counts: (1) breach of contract; (If) breach of cooperation covenant; (IID)

breach of covenant of good faith and fair dealing; (IV) promissory estoppel; (V) substantive due
process violation, brought pursuant to 42 U.S.C. § 1983; (VD equal protection violation, brought
pursuant to 42 U.S.C, § 1983; (VII) free speech violation, brought pursuant to 42 U.S.C. § 1983;
(VII) free association violation, brought pursuant to 42 U.S.C. §§ 1983 and 1988; (IX) procedural
due process violation, brought pursuant to 42 U.S.C. §§ 1983 and 1988; (X) tortious interference
with contract; and (XJ) tortious interference with prospective business advantage. FAC 127-
209. On October 24, 2018, Defendants filed their current motion. D.E. 29, 30, 31. Plaintiffs
opposed this motion, D.E. 36, and Defendants replied, D.E. 38, 39, 41.
I. STANDARD OF REVIEW
Rule 12(b)(1)
Rule 12(b)(1) “provides that a party may bring a motion to dismiss for lack of subject
matter jurisdiction.” Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007) (citing Fed. R.
Civ. P. 12(b)(1)). “A motion to dismiss for want of standing is also properly brought pursuant to
Rule 12(b)(1), because standing is a jurisdictional matter.” Jd. (citing St. Thomas—St. John Hotel
& Tourism Ass'n v, Gov't of the U.S, Virgin Islands, 218 F.3d 232, 240 (3d Cir. 2000) and Kauffman
v. Dreyfus Fund, Inc., 434 F.2d 727, 733 (3d Cir. 1970)). On a motion to dismiss for lack of
standing, “[p]ursuant to Rule 12(b)(1), the Court must accept as true all material allegations set
forth in the complaint, and must construe those facts in favor of the nonmoving party.” /d. (citing
Warth v. Seldin, 422 U.S. 490, 501 (1975) and Storino v. Borough of Point Pleasant Beach, 322
F.3d 293, 296 (3d Cir. 2003)). “[T]he plaintiff bears the burden of establishing the elements of
standing, and each element must be supported in the same way as any other matter on which the
plaintiff bears the burden of prooff.]” Jd. (quoting FOCUS v. Allegheny County Court of Common
Pleas, 75 F.3d 834, 838 (3d Cir. 1996) and Lujan v. Defenders of Wildlife, 504 U.S. 555, 561

(1992)) (internal quotations omitted). “However, ‘general factual allegations of injury resulting
from the defendant's conduct may suffice.’” /d. (quoting Lujan, 504 U.S. at 561).
Rule 12(b)(6)
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a defendant to move to
dismiss a count for “failure to state a claim upon which relief can be granted[.]” To withstand a
motion to dismiss under Rule 12(b)(6), a plaintiff must allege ‘enough facts to state a claim to
relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A
complaint is plausible on its face when there is enough factual content “that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). Although the plausibility standard “does not impose a probability
requirement, it does require a pleading to show more than a sheer possibility that a defendant has
acted unlawfully.” Connelly v. Lane Const. Corp., 809 F.3d 780, 786 (3d Cir. 2016) (internal
quotation marks and citations omitted). Asa result, a plaintiff must “allege sufficient facts to raise
a reasonable expectation that discovery will uncover proof of [his] claims.” /d. at 789.
In evaluating the sufficiency of a complaint, a district court must accept all factual
allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff.
Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). A court, however, is “not
compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions
disguised as factual allegations.” Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007). If,
after viewing the allegations in the complaint most favorable to the plaintiff, it appears that no
relief could be granted under any set of facts consistent with the allegations, a court may dismiss
the complaint for failure to state a claim. DeFazio v. Leading Edge Recovery Sols., 2010 WL
5146765, at *1 (D.N.J. Dec. 13, 2010).

HI. ANALYSIS
Plaintiffs invoked the Court’s subject matter jurisdiction under 28 U.S.C. § 1331, on the
basis of federal question, as alleged in Counts V-IX for violations of 42 U.S.C. § 1983. FAC 9
151-185. Defendants argue that Plaintiffs fail to plausibly plead these Section 1983 claims. JCRA
Br. at 10-18; City Br. at 9-24; Fulop Br. 10-16. The Court agrees. Without the Section 1983
claims, the Court lacks subject matter jurisdiction over the remaining contractual, quasi-
contractual, and tort counts.*
Section 1983, in relevant part, provides as follows:
Every person who, under color of any statute, ordinance, regulation,
custom, or usage, of any State or Territory or the District of
Columbia, subjects, or causes to be subjected, any citizen of the
United States or other person within the jurisdiction thereof to the
deprivation of any rights, privileges, or immunities secured by the
Constitution and laws, shall be Hable to the party injured in an action
at law, suit in equity, or other proper proceeding for redress[.]
42 U.S.C. § 1983. Section 1983 does not provide substantive rights; rather, Section 1983 provides
a vehicle for vindicating violations of other federal rights. Graham v. Connor, 490 U.S. 386, 393-
94 (1989). In order to state a claim under Section 1983, a plaintiff must demonstrate that “(1) a
person deprived him of a federal right; and (2) the person who deprived him of that right acted
under color of state or territorial law.” Burt v. CFG Health Sys., No. 15-2279, 2015 WL 1646849,
at *2 (D.N.J. Apr. 14, 2015) (quoting Groman v. Township of Manalapan, 47 F.3d 628, 633 Gd
Cir. 1995)).

* Defendants also attack certain of the contractual, quasi-contractual, and tort claims. The Court
does not reach these arguments in light of the Court’s findings as to the Section 1983 allegations.
8

First Amendment (Counts VII and VII})
Plaintiffs assert a violation of two First Amendment rights: freedom of association (Count
VIID and freedom of speech (Count VI). FAC 9 165-181. Both claims rely on the same theory:
Defendants retaliated against Plaintiffs for Jared Kushner’s political affiliation with the Trump
Administration. Jd. 169-70 (“The activities of Jared Kushner constitutes [sic] protected political
speech, including but not limited to his participation in public service for the Trump
Administration[] [and] Defendants’ issuant of the Notice of Default was an act of retaliation for
Plaintiffs’ exercise of their First Amendment rights.”), | 177 (“Defendants . . . deprived Plaintiffs
of their First Amendment Rights of free association by engaging in retaliatory action for the
exercise of these rights”). Defendants argue that Plaintiffs fail to plausibility plead a causal link
between the alleged retaliation, on the one hand, and Jared Kushner’s affiliation with the Trump
Administration, on the other. JCRA Br. at 17; City Br. at 15; Fulop Br. at 16. The Court agrees.
‘In order to plead a retaliation claim under the First Amendment, a plaintiff must allege
the following: (1) constitutionally protected conduct, (2) retaliatory action sufficient to deter a
person of ordinary firmness from exercising his constitutional rights, and (3) a causal link between
the constitutionally protected conduct and the retaliatory action.” Thomas v. Indep. Twp., 463 F.3d
285, 296 (3d Cir. 2006) (citing Mitchell v. Horn, 318 F.3d 523, 530 (3d Cir. 2003)). This third
element, “a causal link,” requires “but-for” causation. Mirabella v. Villard, 853 F.3d 641, 651 Gd
Cir. 2017) (citing Hartman v. Moore, 547 U.S. 250, 256 (2006)). “One method of proving a causal
link . . . is ‘unusually suggestive temporal proximity.’” Jd. at 652 (quoting Lauren W. v.
DeFlaminis, 480 F.3d 259, 267 (3d Cir. 2007)).
In Mirabella, the plaintiffs were displeased with their neighbors’ encroachment onto public
wetlands abutting their properties. Jd. at 646-47. As a result, the plaintiffs emailed their local

government, encouraging them to act while threatening litigation at the same time. Jd. at 646. One
of the defendants, a local official, responded the same day with a “no contact’? email, that is,
demanding that the plaintiffs “never contact [him], the Board of Supervisors[,] or the Township
employees directly” but to “direct all further communications to the Township attorney.” Jd. at
647 (emphasis omitted). The local official added that “[t]he dye is caste [sic].” Jd. The plaintiffs
then brought suit, alleging a First Amendment retaliation claim. /d. at 648.
The Mirabella court, in evaluating plaintiffs’ First Amendment retaliation claim, observed
that the plaintiffs alleged that “[o]n the very same day that the Mirabellas emailed the Township
to protest its treatment of the open space, and to threaten litigation, [the defendant local official]
responded with the ‘no contact’ email.” /d. at 652. The Mirabella court clarified that “[t]his
allegation of temporal proximity is itself sufficient.” /d. at 652 n. 6. However, “[i]n addition, [the
court] infer[red] that [the local official]’s ‘no contact’ email was a direct response to the threat of
litigation because . . . [the local official] meant that the Mirabellas cast the die by threatening
litigation against the Township.” Jd. Thus, the Circuit found that the plaintiffs established the
requisite “causal link.” Jd, at 652.
Here, Plaintiffs fail to sufficiently plead a causal link. To be sure, Plaintiffs plead a
sufficient temporal link between Fulop’s responses to Nicole Kushner Meyer and Charles
Kushner’s remarks, but these allegations do not get Plaintiffs into the Section 1983 arena. Instead,
Plaintiffs allege that Defendants retaliation {the Notice) was for ‘Jared Kushner[’s] .. .
participation in public service for the Trump Administration.” FAC § 169, see also id, § 177.

5 The Third Circuit recognized “no contact” to be a term of art, “used to refer to a rule of
professional conduct, prohibiting contact with a represented person, regarding the subject of the
representation, absent consent or legal authority.” /d. at 647 n. 2.
10

However, the timing of the Notice when compared with Jared Kushner’s affiliation with the Trump
Administration do not plausibly support this claim.
Plaintiff alleges that Jared Kushner’s political afftliation with the Trump Administration
dates back to at least the 2016 election cycle, when “Jared Kushner advised the Trump Campaign
and Administration with respect to various issues[.]” /d. 60. However, Defendants did not take
any retaliatory action against Plaintiffs at that time. President Trump then won the general election
on November 8, 2016. /d. 62. Again, Plaintiffs do not allege that Defendants took any retaliatory
action at that time. President Trump officially named Jared Kushner a senior advisor on January
9, 2017. Jd. | 63. But Plaintiffs do not claim that Defendants took any retaliatory action in
response. President Trump was then officially swom into office on January 20, 2017. Jd. {| 64.
Yet again, Plaintiffs do not allege that Plaintiffs retaliated. Defendants did not issue the Notice
until April 17, 2018, id {98 — over one year after President Trump officially named Jared Kushner
a senior advisor, and approximately two years (or longer) after Jared Kushner’s unofficial political
affiliation with the Trump Campaign began. The temporal proximity between January 2017 and
April 2018 is too remote to plausibly establish a causal link.
An additional deficiency in the FAC is the paucity of allegations as to President Trump and
Jared Kushner vis-a-vis Defendants, save for conclusory allegations. Plaintiffs sufficiently allege
two inflammatory instances leading up to the Notice, neither of which involved Jared Kushner or
the Trump Administration. First, on May 6, 2017, Nicole Kushner Meyer made comments about
the Project to potential investors in China, as reported by the New York Times. FAC § 71.
Defendant Fulop publicly responded the following day:
I want to be clear with the residents on where the City stands here.
Last week, the Developer of this Project submitted an application to
Jersey City for tax subsidy and abatement of this property. The
administration made clear to the applicant that the City is not

li

supportive of their request and while the law requires a first reading
ordinance vote, if they submit an application I don’t see the council
voting in favor.
FAC 4 72 (emphasis omitted); D.E. 26-3 at 2. The plausible and reasonable inference is that Fulop
was responding to Kushner Meyer’s comments.
Second, on January 24, 2018, Bloomberg published an article quoting Charles Kushner,
suggesting that the Project would break ground in 2018. FAC § 90. That same day, Fulop
responded by tweeting a link to the Bloomberg article and stating:
I think our office/comment is 100% clear in the story. Our position
has NOT changed + we don’t see support for incentives or
abatements from the city for this project. ... I suspect it’s DOA.
Id. 192; D.E. 26-3 at 3. Again, the plausible and reasonable inference is that Fulop was responding
to Charles Kushner’s comments.°
In addition, after the current lawsuit was first filed, Defendant Fulop publicly stated on
June 28, 2018, that “the Kushners . . . illegally use the presidency to make money” while also using
the presidency to portray themselves as victims. FAC ff] 119, 120. First, the statements were in
direct response to being sued and in response to Plaintiffs allegations of political retribution.
Second, the statement is a general comment that the Kushners use the presidency as both a sword
and a shield. The statement can be reasonably interpreted as expressing disapproval of anyone
using the presidency in such a manner — but the statement does not plausibly imply that Fulop’s
comments were predicated on a particular president or a particular political party holding office.

6 Another reasonable inference based on the allegations in the FAC is that Charles Kushner took a
calculated risk in making the public comments, presumably hoping to force Fulop’s hand. Charles
Kushner’s comments came soon after the January 10, 2018 meeting in which Fulop indicated that
he would prefer to have the Kushners replaced in the Project.
12

In response to Fulop’s June 28, 2018 tweet, Plaintiffs sent Fulop a cease and desist letter.
§,121. The following day, on June 29, 2018, Fulop posted a copy of the letter on Twitter and
tweeted that he received “another letter from the Kushner family today threatening to sue me
AGAIN.” Jd. Fulop added that the Kushners’ “outright [said] in China that $ in Jersey City
properties means lots to the family[.]” Jd. These allegations do not plausibly reflect retaliation
based on a President Trump and Jared Kushner connection. Instead, they plausibly indicate a
response to the cease and desist letter and a reference to Kushner Meyer’s comments in China.
Plaintiffs fail to plausibly plead their First Amendment retaliation claims. Counts VII and VIII are
dismissed.
Equal Protection (Count VI)
Plaintiffs next assert an equal protection violation, alleging that Defendants “‘treat[ed]
Plaintiffs differently from others similarly situated, both as to the application and procurement of
the tax abatements... and extension of timetables,” and that “Defendants have no rational basis
for treating Plaintiffs differently from others similarly situated.” FAC §€ 158, 160. Defendants
argue that JCRA had a rational basis for issuing the Notice — namely, that they issued the Notice
pursuant to terms agreed upon by the parties in the Redevelopment Agreement. JCRA Br. at 16
(“JCRA acted in accordance with its contractual rights in issuing the Notice of Defauit”); Fulop
Br. at 15; City Reply at 4-5.
The Fourteenth Amendment provides that “nor shall any State .. . deny to any person
within its jurisdiction the equal protection of the laws.” U.S. Const. amend. XIV. Traditionally,
a plaintiff must be a member of a protected class to assert a violation of this provision. Engquist
v. Oregon Dep't of Agr., 553 U.S. 591, 601 (2008). However, the Supreme Court has since
recognized a “class of one” theory, where a plaintiff can establish an equal protection violation by

13

showing that he has been “‘singled out” and “intentionally treated differently from others similarly
situated and that there is no rational basis for the difference in treatment.” Jd. (quoting Vill. of
Willowbrook v. Olech, 528 U.S. 562, 565 (2000)). Under this “class of one” theory, “a plaintiff
must allege that (1) the defendant treated him differently from others similarly situated, (2) the
defendant did so intentionally, and (3) there was no rational basis for the difference in treatment.”
Hill v. Borough of Kutztown, 455 F.3d 225, 239 (3d Cir. 2006).
Here, Plaintiffs assert a “class of one” theory. Pl. Opp’n at 48-49. Plaintiffs allege that
Defendants treated them differently than other developers by (1) not approving the Project’s tax
abatements, and (2) not extending the Project’s timetables. FAC □□□ 158. Plaintiffs insist that
Defendants’ motive was arbitrary because it was “solely political . . . [with] an intent of harming
anyone close to the president[.]” /d. { 160. Plaintiffs add that Fulop’s acted improperly by
“publicly and aggressively opposing the president and those closely associated with him, including
Jared Kushner.” □□□ § 161. However, as explained above, Plaintiffs fail to plausibly plead that
Defendants issued the Notice because of Jared Kushner’s affiliation (or the Kushner family’s
affiliation, generally) with the Trump Administration or President Trump. Plaintiffs fail to
plausibly plead an equal protection violation. Count VI is dismissed.
Due Process (Counts V and IX)
Plaintiffs next allege violations of substantive due process (Count V) and procedural due
process (Count IX). FAC 9§§ 151-56, 182-85. “The Due Process Clause of the Fourteenth
Amendment provides that no state shall ‘deprive any person of life, liberty, or property, without
due process of law.’” Nicholas v. Pennsylvania State Univ., 227 F.3d 133, 138 (3d Cir. 2000)
(quoting U.S. Const. amend. XIV). To state a substantive due process claim, a plaintiff must allege
that “(1) the particular interest at issue is protected by the substantive due process clause,” and (2)

14

“the government's deprivation of that protected interest shocks the conscience.” Chainey v. St,
523 F.3d 200, 219 (3d Cir. 2008) (citing United Artists Theatre Circuit, Inc. v. Twp. of Warrington,
PA, 316 F.3d 392, 400-02 (3d Cir. 2003)). This protected interest must be a “fundamental” interest
under the Constitution. Nicholas, 227 F.3d at 140.
Here, Plaintiffs allege that {1} they have a “protected constitutional interest in and to the
contractual rights set forth in the complex Redevelopment Agreement, and they underlying
property on which the Project is to be developed,” and that (2) Defendants’ deprivation of these
interests was “motivated by bias, bad faith and or/partisan political reasons and personal reasons
unrelated to a proper governmental purposes and shock the conscience.” FAC □ 152, 154.
Defendants respond that (1) Plaintiffs have not asserted a fundamental interest protected by the
Fourteenth Amendment, and that (2) Defendants’ conduct does not shock the conscience. City Br.
at 22-24; JCRA Br. at 12-14; Fulop Br. at 12-14. The Court agrees that Defendants’ conduct does
not shock the conscience, and therefore does not reach the issue of whether Plaintiffs assert a
fundamental right.
“What shocks the conscience is only the most egregious official conduct.” Eichenlaub v.
Twp. of Indiana, 385 F.3d 274, 285 (3d Cir. 2004) (quoting United Artists, 316 F.3d at 400)
{internal quotations omitted). The test is “not precise” and “varies depending on the factual
context.” Jd. (citing County of Sacramento v. Lewis, 523 U.S. 833, 847 (1998) and United Artists,
316 F.3d at 400). In the zoning and redevelopment context, the Third Circuit has indicated that
“corruption or self-dealing” or “some bias against an ethnic group” may shock the conscience. Jd.
at 286; see also Button v. Snelson, 679 F. App'x 150, 154 Gd Cir. 2017) (“Guided by Zichenlaud,
we see no evidence in this record from which a reasonable jury could find that racial invidiousness,
corruption, or self-dealing motivated [the defendant]’s enforcement activities.”). However,

15

common planning disputes do not meet the standard. Fichenlaub, 385 F.3d at 286; see also Button,
679 F. App'x at 154 (“[M]erely negligent or sometimes contentious performance of official duties

... does not shock the conscience.”). “The shocks the conscience standard .. . prevents this Court
from being cast in the role of a zoning board of appeals.” Button, 679 F. App'x at 154 (quoting
United Artists, 316 F.3d at 402).
In Eichenlaub, the plaintiffs alleged that “zoning officials applied subdivision requirements
to their property that were not applied to other parcels; that they pursued unannounced and
unnecessary inspection and enforcement actions; that they delayed certain permits and approvals;
that they improperly increased tax assessments; and that they maligned and muzzled the
[plaintiffs].” 385 F.3d at 286. The Third Circuit found that “[t]hese complaints are examples of
the kind of disagreement that is frequent in planning disputes” and do not rise to the level of
shocking the conscience. Jd.
Here, the same conclusion is warranted. Plaintiffs have not alleged racial discrimination,
corruption, or self-dealing. Even if Plaintiffs plausibility alleged their political retribution theory,
it is not clear that this would constitute conduct that shocks the conscience. Regardless, as
explained above, Plaintiffs have not plausibly alleged this theory, and instead have alleged a
property development dispute. Of course, the development at issue is enormous, but the cost ofa
project does not satisfy the shocks the conscience standard. Plaintiffs allege that Defendants
granted tax abatements to other similar projects but not to Plaintiffs, FAC J] 20-22, 97; delayed
certain government approvals, id. §§] 50-57; and publicly maligned individuals associated with

16

Plaintiffs, id. □ 119-122. These allegations are insufficient to meet the shocks the conscience
requirement. Plaintiffs’ substantive due process claim (Count V) is dismissed.’
Turning to procedural due process, a plaintiff must allege that “(1) he was deprived of an
individual interest that is encompassed within the Fourteenth Amendment's protection of ‘life,
liberty, or property,’ and (2) the procedures available to him did not provide ‘due process of law.’”
Hill v. Borough of Kutztown, 455 F.3d 225, 233-34 (3d Cir. 2006) (quoting A/vin v. Suzuki, 227
F.3d 107, 116 (3d Cir. 2000)). Here, Plaintiffs allege that (1) “[t]he Notice... deprive[d] Plaintiffs
of their property right in the Project,” (2) “without due process of law . . . [despite reasonable
efforts to obtain relief” by Plaintiffs. FAC ff] 183-84. Defendants argue that (1) Plaintiffs faii to
assert a property interest protected by the Fourteenth Amendment, and that (2) Plaintiffs have
sufficient procedures available to contest the Notice. JCRA Br. at 14; City Br. at 18-22; Fulop Br.
at 10-12. The Court agrees that Plaintiffs have sufficient procedures available to protect their
rights under the Redevelopment Agreement and state law, and therefore does not reach the issue
of whether Plaintiffs have asserted a protected interest under the Fourteenth Amendment.
One procedure available to Plaintiffs was to cure the breaches identified in the Notice, as
allowed by the Notice, NOD at 1 (demanding that Plaintiffs “cure the foregoing [breaches]”), and
by the Redevelopment Agreement, RA at 37 (“in the event of any default in or breach of this

7 Because the Court is dismissing the substantive due process claim on the determination that
Defendants’ conduct does not plausibly shock the conscience, the Court does not opine on whether
Plaintiffs have asserted a fundamental interest for purposes of substantive due process protection.
The Court, however, notes that Third Circuit precedent is not entirely clear on the issue. Compare
Indep. Enterprises Inc. v. Pittsburgh Water & Sewer Auth., 103 F.3d 1165, 1179 (3d Cir. 1997)
(noting that some cases involving “zoning decisions, building permits, or other governmental
permission required for some intended use of land owned by the plaintiffs . . . implicat[ed] the
‘fundamental’ property interest in the ownership of land”); with Linan-Faye Const. Co. v. Hous.
Auth. of City of Camden, 49 F.3d 915, 931-32 (d Cir. 1995) (finding that a public housing
contractor did not have a “protectible property interest in its contract with [the government agency]
that is entitled to Fourteenth [] Amendment protection.”).

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Agreement .. . [Plaintiffs] shall, within thirty (30) days of receiving written notice from the other,
proceed to commence to cure or remedy such default or breach.”). To the extent that Plaintiffs
could not cure these defects due to roadblocks set by Defendants, Plaintiffs could “institute .. .
proceedings [in state court] to compel specific performance by [Defendants],” as provided for in
the Redevelopment Agreement. RA at 37-38. Also, Plaintiffs can still pursue contractual and tort
remedies in state court. Because these alternative procedures are/were’ available, Plaintiffs have
not plausibly pled a procedural due process claim. See Coulter v. Butler Cty. Children & Youth
Servs., 512 F. App'x 145, 148 (3d Cir. 2013) (finding that the plaintiff had “ample procedural due
process” when she had access to “full appellate review in state court” of the state actor’s conduct).
Plaintiffs’ procedural due process claim (Count IX) is dismissed.’

® The FAC does not clearly indicate whether Defendants have in fact terminated the Project, or if
Plaintiffs still have any opportunity to cure the defaults listed in the Notice. Although Plaintiffs
state that the Notice “had the effect of” terminating the Redevelopment Agreement, FAC { 117,
the text of the Notice does not in itself terminate the Redevelopment Agreement, as it “demands
that [Plaintiffs] cure the foregoing [defaults]” but does not provide a timeframe for such, and
indicates that Defendants, “without further notice or demand . . . may enforce or avail [themselves]
of any or all rights or remedies provided in the Redevelopment Agreement including, without
limitation, all rights or remedies available at law or in equity.’ NOD at 1-2. Plaintiffs do not
allege that Defendants have taken further steps in asserting their rights under Redevelopment
Agreement since issuing the Notice.
9 Because the Court is dismissing the procedural due process claim for adequate available
procedures, the Court again does not analyze whether Plaintiffs have asserted a property interest
protected by the Fourteenth Amendment. However, the Court notes the following apt observation:
[I]f every breach of contract by someone acting under color of state
law constituted a deprivation of property for procedural due process
purposes, the federal courts would be called upon to pass judgment
on the procedural fairness of the processing of a myriad of
contractual claims against public entities[] . . . [and] such a
wholesale federalization of state public contract law seems far afield
from the great purposes of the due process clause.
Unger v. Nat'l Residents Matching Program, 928 F.2d 1392, 1398 (3d Cir. 1991) (quoting Reich
v. Beharry, 883 F.2d 239, 242 (3d Cir. 1989)). See also TM Park Ave. Assocs. v. Pataki, 214 F.3d

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The Court therefore dismisses all of Plaintiffs’ Section 1983 claims’® pursuant to Rule
12(b)(6) for failure to state a claim.'' As a result, the Court does not have subject matter
jurisdiction over this action and dismisses it accordingly.
IV. CONCLUSION
In sum, the Court grants Defendants’ motions to dismiss Plaintiffs’ Section 1983 claims in
the FAC (Counts V-IX) pursuant to Rule 12(b)(6) for failure to state a claim, D.E. 29, 30, 31.
These Counts are dismissed without prejudice. The Court does not have independent jurisdiction
over Plaintiffs’ remaining contract, quasi-contract, and tort claims (Counts L-IV, X-XI). Asa
result, the Court dismisses the matter. Plaintiffs may, within thirty (30) days, either (a) file an
arnended complaint curing the deficiencies noted herein; or (b) refile this action in the appropriate
state court. If Plaintiffs intend to refile this action in state court, Plaintiffs are to timely notify this
Court. An appropriate Order accompanies this Opinion.
Date: August 7, 2019

John Michael Vazqué?,/U)S.D.J.

344, 348 (2d Cir. 2000) (“‘Mere refusal to perform a contract by a state does not raise a
constitutional issue.’” (quoting E & E Hauling, Inc. v. Forest Pres. Dist. of Du Page Cty., HL, 613
F.2d 675, 678 (7th Cir. 1980))).
Because the Court has not found a plausibly asserted constitutional violation, it need not conduct
a Moneil liability analysis as to the City or a qualified immunity analysis as to Fulop.
'! Defendants also challenge Plaintiffs’ standing to bring the Section 1983 claims. JCRA Br. at 4-
9; City Br. at 7-9; Fulop Br. at 6-7. The Court does not reach the issue because it is dismissing on
other grounds. Nevertheless, the Courts notes (without deciding) that to the extent that Plaintiffs
can plausibly plead that they were unlawfully retaliated against based on Jared Kushner’s
constitutionally protected activities, Third Circuit precedent appears to indicate that Plaintiffs do
have standing. See Montone v. City of Jersey City, 709 F.3d 181, 196-99 (3d Cir. 2013).
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10266631. Public record. Not legal advice.