Aqua Harvesters, Inc. v. The New York State Department of Environmental Conservation

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

Aqua Harvesters, Inc., Bay Head, Inc., MEMORANDUM & ORDER

C. Seaman Seafood, Ltd., Doxsee Sea

Clam Co., Edgar Seafood Products, Inc., NOT FOR PUBLICATION

Fernandez & Family, Inc., Freeport Sea

Clam Co., Inc., Lady Kim, Inc., Lyons 17-cv-1198 (ERK)

Fisheries, Inc., Off Shore Diving Corp.,

Pek Claim Co., Inc., SMJ Products Corp.,

St. Peter Dock, Inc., Verbeke, Inc., Winter

Harbor Brands, Inc., American Pride

Seafood, LLC, Let Vessels, LLC, TMT

Vessels (NY), LLC, Atlantic Capes

Fisheries, Inc., Galilean Seafoods, LLC,

Oceanside Packers, Inc., and Seawatch

International, Ltd.,

Plaintiffs,

– against –

New York State Department of

Environmental Conservation and Basil

Seggos, individually and in his capacity as

Commissioner of the New York State

Department of Environmental

Conservation,

Defendants.

KORMAN, J.:

This case involves New York’s regulation of surfclam fishing. Plaintiffs are

companies that own permits to harvest surfclams; a company that owns vessels for

surfclam fishing that it seeks to lease; and companies that ship and process

surfclams. They filed suit to challenge three state regulations that plaintiffs claim

violate federal law. Those regulations limit the amount that any one ship can harvest

(the “Single Vessel Rule”); prohibit the use of most new vessels larger than 70 feet

(the “70-Foot Rule”); and bar non-resident ships from using a New York “resident”

permit to harvest surfclams (the “Residency Rule”).

Judge Azrack denied a preliminary injunction in a scholarly ninety-six-page

opinion, with which I assume familiarity. See Aqua Harvesters, Inc. v. N.Y. State

Dep’t of Env’t Conservation, 399 F. Supp. 3d 15 (E.D.N.Y. 2019). Judge Azrack first

held that plaintiffs’ challenges to all three rules under the Dormant Commerce Clause

failed, because Congress had expressly authorized state regulation of fishing that

“differentiate[s] between residents and nonresidents.” Id. at 40 (internal quotation

omitted). Next, she held that the Single Vessel and 70-Foot Rules were not

preempted by federal law and served legitimate state interests. Id. at 40–76. Judge

Azrack likewise rejected plaintiffs’ challenge to the 70-Foot Rule under the Equal

Protection Clause. Id. at 76–78. Finally, Judge Azrack declined to reach plaintiffs’

challenges to the Residency Rule because the vessels owned by non-New York

residents were barred by both the 70-Foot Rule and the Residency Rule. Id. at 78–

79. There was therefore no reason to assess the validity of the Residency Rule. Id.

After Judge Azrack issued her opinion, plaintiffs voluntarily dismissed their

challenges to the 70-Foot Rule. ECF No. 47. Defendants now move to dismiss

plaintiffs’ claims against the Residency and Single Vessel Rules. They argue that

plaintiffs lack standing to challenge the Residency Rule because all their vessels that

are prohibited by that rule are also prohibited by the 70-Foot Rule, the latter of which

plaintiffs no longer challenge. Defendants also argue that the challenges to the

Residency and Single Vessel Rules fail on the merits.

I. Plaintiffs’ Challenges to the Single Vessel Rule Fails on the Merits

Plaintiffs’ challenges to the Single Vessel Rule fail for the reasons stated in

Judge Azrack’s preliminary injunction order. See Aqua Harvesters, 399 F. Supp. 3d

at 40–65. I recognize, of course, that a plaintiff bears a “heavier burden” to obtain a

preliminary injunction than it does in order to state a claim upon which relief may

be granted. New Hope Fam. Servs. v. Poole, 966 F.3d 145, 165 (2d Cir. 2020).

Notably, a court reviewing a motion for preliminary injunction is not required to

accept the plaintiff’s “allegations as true or to draw all reasonable inferences in its

favor.” Id. By contrast, a complaint survives dismissal so long as it contains

“sufficient factual matter, accepted as true, to state a claim to relief that is plausible

on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation omitted).

That merely requires the plaintiff to plead “factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Id.

Judge Azrack’s analysis applies notwithstanding this difference in the

standard of review. Her order rested on a thorough discussion of the parties’ legal

arguments and did not turn on any factual disputes. Indeed, plaintiffs’ opposition to

the motion to dismiss merely reiterates the legal arguments that Judge Azrack

already rejected (and barely mentions her opinion rejecting them). “Under the ‘law

of the case’ doctrine, ‘courts are understandably reluctant to reopen a ruling once

made,’ especially ‘when one judge or court is asked to consider the ruling of a

different judge or court.’” Lillbask ex rel. Mauclaire v. State of Conn. Dep’t of Educ.,

397 F.3d 77, 94 (2d Cir. 2005) (quoting 18B Wright & Miller, Fed. Prac. & Proc.

Juris. § 4478 (2d ed. 2002)). The law of the case is not binding and is merely a

“matter of discretion.” Id. (internal quotation omitted). In any event, I agree with

Judge Azrack’s holdings on the merits. I therefore dismiss the challenges to the

Single Vessel Rule (Counts 1 and 4) with prejudice.1

1 Plaintiffs’ opposition to the motion to dismiss also argues that the Single

Vessel Rule violates the Privileges & Immunities Clause. ECF No. 49 at 22–

24. As Judge Azrack observed, however, “[p]laintiffs’ complaint does not

actually allege a Privileges and Immunities claim concerning the Single Vessel

Rule.” 399 F. Supp. 3d at 56 n.36. A party may not amend its complaint in

an opposition brief to a motion to dismiss. Wright v. Ernst & Young LLP, 152

F.3d 169, 178 (2d Cir. 1998); accord Palm Beach Mar. Museum, Inc. v.

Hapoalim Secs. USA, Inc., 810 F. App’x 17, 20 (2d Cir. 2020).

II. Plaintiffs Lack Standing to Challenge the Residency Rule

Plaintiffs lack standing to challenge the Residency Rule. See Davis v. FEC,

554 U.S. 724, 734 (2008) (“[A] plaintiff must demonstrate standing for each claim

he seeks to press and for each form of relief that is sought.”) (internal quotation

omitted). To establish standing, “[t]he plaintiff must have (1) suffered an injury in

fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3)

that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins,

136 S. Ct. 1540, 1547 (2016). “The plaintiff, as the party invoking federal

jurisdiction, bears the burden of establishing these elements.” Id. “Where, as here,

a case is at the pleading stage, the plaintiff must clearly allege facts demonstrating

each element.” Id. (internal quotation and alteration omitted).

Plaintiffs’ challenge to the Residency Rule fails for lack of redressability,

which requires a “non-speculative likelihood that the injury can be remedied by the

requested relief.” Coal. of Watershed Towns v. E.P.A., 552 F.3d 216, 218 (2d Cir.

2008) (internal quotation omitted). “Relief that does not remedy the injury suffered

cannot bootstrap a plaintiff into federal court; that is the very essence of the

redressability requirement.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,

107 (1998).

As Judge Azrack explained, the state “denied the harvesting companies’

attempts to use the five vessels” that violate the Residency Rule “on two separate

and independent grounds: (1) the Residency Rule bars these vessels because they are

from out of state; and (2) the 70-Foot Rule bars these vessels because they are all

over 70 feet long.” Aqua Harvesters, 399 F. Supp. 3d at 78–79. Thus, even if the

Residency Rule violates federal law, I can grant no meaningful relief because

plaintiffs have abandoned their challenge to the 70-Foot Rule that independently

bars the vessels covered by the Residency Rule. Any harm that the Residency Rule

causes plaintiffs would therefore not be remedied by a court order. See Lujan v. Defs.

of Wildlife, 504 U.S. 555, 568 (1992) (finding lack of redressability because

plaintiffs had not “attack[ed] the separate decisions . . . allegedly causing them

harm”); Coal. of Watershed Towns, 552 F.3d at 218 (holding that redressability was

not satisfied because there was “no basis” to believe that the requested relief would

place plaintiffs “in any different position than they are now”); 13A Wright & Miller,

Fed. Prac. & Proc. Juris. § 3531.6 n.107 (3d ed. 2008) (observing that plaintiffs lack

standing when there is an “independent cause” to the challenged injury that is not

before the court).

Plaintiffs’ counterarguments are unpersuasive. They claim that they are

harmed by the Residency Rule “irrespective of the five particular vessels” identified

by Judge Azrack. ECF No. 49 at 4. They identify two ships for which a New Jersey

company is the “beneficial and equitable owner” and that are under 70 feet and

subject to the Residency Rule—and thus for which an order enjoining the Residency

Rule might well provide meaningful relief. Id. Those ships—the F/V Lauren and

the F/V Silver Fox—are nowhere mentioned in the complaint or the affidavits

supporting plaintiffs’ request for a preliminary injunction. Plaintiffs have therefore

failed to “allege[] facts that affirmatively and plausibly suggest that [they have]

standing to sue.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016)

(internal quotation omitted). As before, plaintiffs may not amend their complaint in

their opposition to a motion to dismiss. Wright, 152 F.3d at 178.2

While plaintiffs have failed to establish standing to challenge the Residency

Rule, their memorandum of law suggests that they may be able to allege facts

satisfying the standing requirement (based on the ships owned by a non-New York

company that comply with the 70-Foot Rule). Although plaintiffs do not request

leave to amend, I will grant them an opportunity to amend given the “strong

preference for resolving disputes on the merits.” Loreley Fin. (Jersey) No. 3 Ltd. v.

Wells Fargo Secs., LLC, 797 F.3d 160, 190 (2d Cir. 2015) (internal quotation

omitted); but see Gallop v. Cheney, 642 F.3d 364, 369 (2d Cir. 2011) (“While leave

2 Plaintiffs also claim that the Residency Rule has forced them to transfer

beneficial and equitable ownership of the F/V Roberta Lee into a newly-

created New York entity. ECF No. 49 at 4. That allegation is likewise not in

the complaint, and it is not evident that it would suffice to establish standing

for the equitable relief that plaintiffs seek. See Deshawn E. v. Safir, 156 F.3d

340, 344 (2d Cir. 1998) (“A plaintiff seeking injunctive or declaratory relief

cannot rely on past injury to satisfy the injury requirement but must show a

likelihood that he or she will be injured in the future.”).

to amend under the Federal Rules of Civil Procedure is ‘freely granted,’ see Fed R.

Civ. P. 15(a), no court can be said to have erred in failing to grant a request that was

not made.”). In granting leave to amend, I am mindful of Judge Azrack’s observation

in dicta that “the validity of the Residency Rule appears, as a matter of preemption,

to be questionable” under a leading Supreme Court case. 399 F. Supp. 3d at 79. It

therefore seems appropriate to provide plaintiffs an opportunity to allege sufficient

facts to test the rule’s validity on the merits.

CONCLUSION

Plaintiffs’ challenges to the Single Vessel Rule are dismissed with prejudice.

Plaintiffs’ challenges to the Residency Rule are dismissed without prejudice for lack

of Article III standing. Plaintiffs may replead within thirty days, limited solely to

their challenges to the Residency Rule. If plaintiffs amend their complaint,

defendants may file a renewed motion to dismiss. If plaintiffs decline to amend,

judgment will be entered without further notice.

SO ORDERED.

Brooklyn, New York Edward R. Korman

June 9, 2021 United States District Judge