Appendix — New York v. United States
Supreme Court brief1984
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IN THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
~and-
BEECHCRAFT EAST, INC. ,.
Intervenor-Plaintiff-Appellee,
~against-
THE STATE OF NEW YORK; and WILLIAM HENNESSEY,
as Commissioner of the Department of
Transportation of the State of New York,
Defendant-Appellants.
ATRCRAFT OWNERS AND PILOTS ASSOCIATION,
Plaintiff-Appellee,
-against-
of New York.
‘re 5 _"
WILLIAM HENNESSEY, as Commissioner of the Fs FR g 7
Department of Transportation of the State Z "/ aiNG
_—_-
ON APPEAL FROM ‘THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF NEW YORK
BRIEF FOR PLAINTIFPF-APPELLEE
UNITED STATES OF AMERICA
83-663
OF COUNSEL:
KENNETH N. WEINSTEIN
U.S. Department of
Transportation
LEONARD A. CERUZZI
RICHARD W. DANFORTH
ROBERT F. EISENGREIN
Federal Aviation
Administration
Me a ae : —
_ oe, ae, a .
ee eR
J. PAUL McGRATE
Assistant Attorney General
DAVID J. ANDERSON
EUGENE A. BEATTY
Attorneys, Department of Justice
Civil Division
Washington, D. C. 20536
lephone:, (202) 633-3395
4
*
2
5
R. JOHN SEIBERT P:
oe
TABLE OF CONTENTS
: Page
TABLE OF AUTHORITIES seeeeeeeeeeeeeeeeeeeeeeeeneeeeee iii
4 STATEMENT OF ISSUES PRESENTED ..........eecscceeees 1
8 INTRODUCTION imme Teeeak es thes hed cdekbée6e diawe 2
STATEMENT Cr FACTS eoeeeweeeeeeeeeeeeeeeeeeeeeeeeeeeee 6
A. Federal Funding Of The Airport............ 7
B. The Challenged Legislation ........cccceees 9
C. The United States’ Case ...cnccccgecccccce 12
Ds PREOORGEEROD DOSNT Keck ccane cbwicdsessdcbdes 14
. ARGUMENT eseeneeeeeeeeeeeeeeeeneeeeeeeeeeeeeneeeeeeeeeee 18
I. BEECHCRAFT HAS NO DAMAGES REMEDY
AGAINST NEW YORK IN FEDERAL COURT ........ 20
II. BEECHCRAFT HAS NO DAMAGES REMEDY
AGAINST NEW YORK IN STATE COURT ......e0. 23
A. New York Has Not Waived Its
Liability For Money Damages
For The Unconstitutional Act
of Its RS ES err eer eres 24
B. New York's Suggested Legal
Theories Are Inadequate .........c.e00: 27
1. No Contracts Prohibiting A Curfew
Are Alleged By Beechcraft To Have
Existed Or Been Breached ............ 28
2. New York Law Prohibits Recovery Of
° Lost Business Profits Resulting From
The State's Appropriation Of Real
PROMOECY « od cbc coccceeessctweedecssccese 31
TABLE OF CONTENTS
Page
(Cont. )
III. HAVING FOUND THAT BEECHCRAFT HAD
NO REMEDY AT LAW AGAINST NEW YORK,
THE LOWER COURT CORRECTLY FOUND
THAT BEECHCRAFT HAD SHOWN ‘
IRREPARABLE Dc eee beens bbbceeéebsece 38
A. The Absence Of A Legal Remedy For
~ Money Damages Constitutes
EEEGPSCERIS TOIEEG es cc cccccccccccscccecs 38
B. Assuming A Legal Remedy Exists
For Beechcraft, It Would Not
Be Adequate sense epeeeeeeeneeneeneeeeeeeeeee 44
Sp Comet SCpRsGnes . FOG sc wccaccsvecvccs 45
2. DERRROEEE Bee cobb bis tosh c6tcceeess 47
CONCLUSION octbasieaducdlbekes the cheek. 50
~ SA
TABLE OF AUTHORITIES
Cases Page
A_ Quaker Action Grofp v. Hickel, 421 F.2d 11ll
iwece Gale 96 A DS Re Se ee ee Pee See 45
Alabama Comm'n v. Southern R. Co., 341 U.S. 341
( se eeeneeneen#eee#enstee#enent#ent#eeesee#*ee#e#enee@e#e#ee#ee#e#eee#ee#ee#ee#ee#ee#e#e#e® 21,22
Allied Structural Steel Co. v. Spannus, Attorne
General of Minnesota, 436 U.S. 234 von Seer 22
Barrett v. State of New York, 220 N.Y. 423 (1917).... 26
Battle v. Municipal Housing Authority for the City
OF TOGReEe, SSmsthets GES (Bcc, Bets S974) coccesode $§
" Beacon Theatries v. Westover, 359 U.S. 500 (1959).... 38
Bernkrant v. State, 26 A.D. 2d 964, 274
if BR 2d 749 ese nereeeeneeeneeeeneenteeneeeneee#ee#eee#ee#e#e###e##«# 24
Bo v. State, 19 N.Y. 2d 368, 280 N.Y.S.
135, 227 N.E. 2d 37 (1967) e*enere@enre#enseeeeeeeeeeeee#e 5,19,34
Brister & Koester Lumber Corp. v. United States,
. F. Supp. See (Ce... She 950) e*enerieeneene#enee#ee#e#ee#e#e#e«# 30
’ British Airways Board v. Port Authority of
New York, 55 F.2 75 (2d Cc r. 977) eeeeeeeeeeeee 12,13,16
City of Burbank v. Lockheed Air Terminal, 411
U.S. 4 ( 3) e*enereeeentenseeeenrtee#enet#eeneee#eeneee#ee#e#ee#e##e#e#e#e* 12,16
Di Giovanni v. Camden Fire Insurance Ass'n,
296 ss ® 64 ( 935) e*eneeeneteeneeeeeeeneneeeneeeneeeeeeeeee passim
Drake v. State of New York, 97 Misc. 2d
5, 416 N.Y¥.S. 2g 734 (Ct. Cl. 1979),
aff'd, 75 App. Div. 2d 1016, 432 N.Y.S.
Oi SQR Ded BE) Ba wads Oe ss occoviceceess ces 36
Edelman v. Jordon, 415 U.S. 651 (1974) .......ee0e0. 43
FPonfa v. State, 88 Misc. 2d 343, 388 N.Y.S.
65 (ct. a 1976) e*eneneeeeeeeneneeneneeneneneeneneeeeeeee passim
- iii -
MR SP EM Meee Cee y, Me
eo. £¥ a2. Var. | ot CS ue Pere WS yee et ae a
Cases (Cont. ) . Page
Fred F. French Inv. Co., Inc. v. City of
New York, 39 N.Y. 2d 587, 385 N.Y.S. 2d 5,
350 N.E. 381, cert. denied, 429 U.S. 990 (1976).... 33
Gardiner Manufacturing v.\ United States, 479
Vea 39 (9th Cir. 973) eoeenereeeeneeeneeeeeneeeeeeeeee 30
Garfield Homes, Inc. v. State of New York, 44
M 3c. 738, 255 N.Y.S. 24 16 (4 e on We se eff *e-e 34
Georgia v. Chattanooga, 264 U.S. 472 (1924) ........ 32
Granger v. State, 14 A.D. 2d 645, 218 N.Y.S.
2 742 (3d Dept. 1961) *e wee eeeeeee *enrieeneeeeeeeee#e#*® 25
Great Atlantic & Pac. Tea Co. v. State, 25 A.D.
’ N.Y.S. 4 (3d Dept.), modified,
22 N.Y. 2d 75, 291 N.Y¥.S. 2d 299, 238 N.E. 2d
705 (1968) *eneteeeeeneeeeeneeneeeneneeeneeeeneeee#e =o oC a © €.o 34
Henry v. Greenville, 284 F.2d 631, 633
(4th 4 UF 1960) *erenee eeneeeeneneeneteeeeees# « ee eoeeee eeee#se 20, 45
Int'l Assn. of Firefighters. v. City of Sylacauga,
436 F. Supp. 482 (N.D. Ala. 1977) w.cccccccccccces 39
Jacobson & Co., Inc. v. Armstrong Cork Co.,
supra, 54 P.2 at 442 *e eweeeeneenrtneeneeeneeeneeeeeeeee#ee#e 46,47
Keefe v. Geanakos, 418 F.2d 359 (lst Cir. 1969)..... 45
Keystone Assoc. v. State of New York, 39
A.D. 2d 176, 333 N.Y¥.S. 2d 27 (3d Dept.
1972), aff'd on Sey below, 33 N.Y. 2d
848, 352 N.Y.S. 2 94 ( 3) *eeeeeeeeneeeeeeneneenee 33,35
Lemp v. Town Bd. of Islip, 90 Misc. 2d 360, 394
N.Y.S. (Sp. Coe 1977) e*enrnereieeeneeeeneeeeeeeee#e 32,33
Loretto v. Tele ter Manhattan CATV Corp.,
U.S.L.W. 4 7 ee @eeeeeneeeeee ee © 33
Lutheran Church of America v. City of New York,
35 N.Y. 2a 121, 359 N.Y.S. 2a 7, 316 N.E.
2d 305, 310 (1974) ese ewoeeeneneeneeneeeneeneeneneeeneeneeeneeeee 33
Merritt v. United States, 267 U.S. 338 (1925) ...... 30
Mesa Petro. Co. v. Aztec Oil & Gas Co., 406
F. Supp. 910 (N.D. Tex. ) ese eeeeneeeeneneneeeeeeee 40
Cases(Cont.) . Page
Nat'l Aviation v. City of Hayward, 418 F. Supp.
417 (N.D. Cal. 1976) e*eeeneeeeoeeeeeeeeeeeeneeeeeeeeee 30
, Newark v. Cook, 99 N.J. Eq. 527, 133 A. 875
(1926), aff'd without opin., 100 N.J. Eq.
SEA, 230 Bc Bie Mes PIM, co vcccawececccccccce 34
Newiadony v. State of New York, 276 App. Div.
5 ; 93 N.Y.S. 2d 24 (3d Dept. 1949) eee eeeeeeeeeeee 26
New York, W.S. & B.R. Co., 42 Sup. Ct. 633,
Hun. 3 ( th Dept. 1885) e*enerenereenet#e#esee#e#eee#ee#e#ee#e###e#e*# 34
Ohio Oil Co. v. Conway, 279 U.S. 813 (1929) ...... ss 20,39
Oneida Indian Nation of New York State v.
pose of Oneida, New York, te F.2d
6 ( Car « 9 ) e*eeeeeeeneteneeentneeeneteneeeeeeeeee#ee#s# 21
Penn Central Transp. Co. v. New York City,
438 U.S. 104 (1978) *eeeeeeneeneeeeee eeeeeeeeeeeee#ese#e#*# 33
Planned Parenthood v. Citizens for Com. Action,
558 F.2d 861 (9th Cir. 1977) ee eeenee«seonrtne ee e#ee#eee#e#*# “ee 45
Poindexter v. Greenhow, 114 U.S. 270 (1884) ........ 31-37
Sec v. Frank, 388 F.2d 486, n.6 (2d Cir. 1968)...... 46
Semmes Motor, Inc. v. Ford Motor Company,
429 F.2d 1197 (2d Cif. 1970) eoeeeeeeeeeeeeeeeeeeee? 20,47
Sonesta Hotels Corp. v. Wellington Assoc., 483
F.2d 247 (2d Cir. 1973) eeeeeneteneenrteeeneeeeeee e*eeneeee 40
Southworth v. State, 62 A.D. 2d 731, 405
N.Y.S. 2d 548, aff'd 47 N.Y. 2d 874, 419
N.¥.S 24 71, 392 N.E. 24 1254 (1979) ......eeeeees 25
4 Sperry Int'l Trade v. Gov't of Israel, 670 F.2d 8,
Cir. ee eeeneeeneeneeeeeeneeeneeneteeneeeeeeeeeeee#ee 40
, Strong v. State, 38 A.D. 241, 328 N.Y¥.S. 2d
(3d Dept. 1972) Sei ok ein oi, teed ae 34
aan
Cases (Cont. ) Page
Tayyari v. New Mexico State Union, 495 F. Supp.
BOD Ce We WER e BPOO! cbedicsanceccedscoccceccoccscoes 43
United States v. General Motors Corp., 323
U.s. 373 (1945) e*eeeoeeeveeeeeeeeneeeeeeeeeeeeeeeeeeeee 34
United States v. Petty Motor Co., 327 U.S.
( 46) SO eeeee@cge ese eeeeg ese eeseceeeeeeoeeoeeeeoegeee 8 ee © 34
United States v. State of New York, 552 F. Supp.
255 (N.D. N.Y. 1982) *eneseeeeeen#eeeneeeneeneeneneeee#see#e#e#e# 14
Warner Bros., Inc. v. Gay Toys, Inc., 658 F.2d
6 (2 Gale 4 ) *enerieneneeneteentrteenee#ensee#see#e#ee#e#e#e#e#e#ee#e##e#e#ee#e 47
ween ©. Berieniens, 620 0.8. 208 ccicccrtececeorce ¢uebs 42
Younger v. Harris, 401 U.S. 37 (1971) w.ccwncwcecees 22, 43
i IN THE
UNITED STATES COURT OF APPEALS
| FOR THE SECOND CIRCUIT
NO. 82-6343
‘ UNITED STATES OF AMERICA,
Plaintiff-Appellee,
~and-
BEECHCRAFT EAST,‘ INC.,
Intervenor-Plaintiff-Appellee,
~against-
THE STATE OF NEW YORK; and WILLIAM HENNESSEY,
as Commissioner of the Department of
Transportation of the State of New York,
De fendant~-Appellants.
AIRCRAFT OWNERS AND PILOTS ASSOCIATION,
Plaintiff-Appellee,
-against-
WILLIAM HENNESSEY, as Commissioner of the
Department of Transportation of the State :
of New York.
ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF NEW YORK
BRIEF FOR PLAINTIFF-APPELLEE
UNITED STATES OF AMERICA
= STATEMENT OF ISSUES PRESENTED
1. Whether an applicant for a preliminary injunction in
federal court who has no adequate remedy at law in federal court
must also show the absence of an adequate legal remedy in state
court as a prerequisite to obtaining preliminary injunctive relief?
ba
‘ iy
2 + ¢ 4
ee ee i A tw BS else Ne de I Ue i =
2. Whether the State of New York has consented to be sued in
its Court of Claims for the unconstitutional acts of its Legisla-
ture not involving the taking of: real property?
3. Whether the State of new York has consented to be sued in
its Court of Claims for lost busines revenues and customer good-
will occasioned by the State's taking of real property under its
power of eminent domain? ;
4. Whether a showing of injury due to unconstitutional state
conduct constitutes irreparable injury for purposes of preliminary
injunctive relief regardless of whether the injury can be quanti-
fied in monetary terms?
5. Whether the record evidence of monetary injury was suffi-
cient to justify a satisfactory showing of irreparable injury for
purposes of preliminary injunctive relief.
INTRODUCTION
This is an action by the United States and by private parties
against the State of New York for unconstitutionally assuming
ownership of a general aviation airport in Suffolk County, Long
Island known as Republic Airport, and for unconstitutionally
imposing a nighttime ban on the use of the airport by: all aircraft
regardless of the levels of noise they make. Facing the prospect
of severe business losses from the curfew, plaintiff Beachcraft
East, Inc., which sells and services planes at Republic, moved
below for entry of a preliminary injunction prohibiting Wew York
from imposing the nighttime curfew. The motion was supported by
the United States which had also prayed for a permanent injunction
SE
of the curfew in its complaint. The court below granted
‘ Beechcraft's motion for a preliminary injunction finding firat,
that New York's curfew was overbroad and arbitrary and thus a vio-
lation of the Supremacy Clause of the United States Constitution,
. and second, that Beechcraft would suffer irreparable business dam-
ages because the Eleventh Amendment to the Constitution precluded
suit in federal court against New York for monetary liability.
New York now asks this Court to vacate the lower court's
preliminary injunction exclusively on the.ground that Beechcraft
has not demonstrated irreparable injury from the curfew. New York
does not appeal the district court's finding that its curfew is
unconstitutional.
This action is based on New York's passage of a law in June,
1982, purporting to take over the ownership of Republic Airport
from the Metropolitan Transportation Authority (MTA) and to impose
a total ban on all aircraft operations at Republic Airport between
the hours of 1l p.m. and 7 a.m. daily. The airport curfew applies
to all aircraft regardless of the noise level they make during
landing or take-off.
The United States and Beechcraft East seek to have the
statute declared unconstitutional and the airport curfew enjoined
for violating three clauses of the federal Constitution: the
Supremacy Clause, the Commerce Clause, and the Contract
® :
Claw.” Beechcraft, which is a tenant at Republic Airport
*7 The third plaintiff in this suit, the Aircraft Owners and
Pilots Association (AOPA) does not allege that New York acted
unconstitutionally under the Contract Clause. AOPA does allege
that New York's = violates the Supremacy and Commerce f
Clauses.
leasing space from the MTA, does not claim that New York's actions
constitute a de facto appropriation of its leasehold interest \
without just compensation in violation of either the United States
or New York State Constitutions. Nor does Beechcraft contend in
its complaint that New York's challenged law breaches existing
contracts between the State and Beechcraft.» Beechcraft's com-
plaint is for injury to& its business directly resulting from the
state's passage of an seienékveianeans law.
In support of the present appeal, New York suggests three
grounds for reversal of the preliminary injunction with respect to
the issue of irreparable injury. First, New York argues that
Beechcraft can sue New York for lost business profits in its Court
of Claims on a breach of contract theory or on a de facto approp-
riation of real property theory. Second, New York contends that
assuming it cannot be sued for damages, Beechcraft, therefore,
stands to incur a monetary injury without a remedy which is, in
effect, no legally cognizable injury. Finally, New York concludes
that Beechcraft has not shown that its financial injury will lead
to bankruptcy which the State argues is a prerequisite for demon-
strating irreparable injury. None of these arguments can with-
stand close scrutiny.
In support of its argument that Beechcraft has an adequate
remedy in the New York Court of Claims, the State argues that
Beechcraft can sue for lost profits on a breach of contract
threory or on a de facto appropriation theory. Beechcraft's com-
plaint, however, is not based on either theory. Yet, even if it
were, Beechcraft could not prevail. Beechcraft does not allege,
and New York does not indicate, that any contract exists between
-~4-
-7 - ’
4 : ; er Sy x : vm : + ~ | .
a ea ear a hs ~» Lr? ey" * a es ear. bai! a Sa
itself and Beechcraft requiring that Republic Airport be kept open
twenty-four hours each day. Without such a contract there, of
course, can be no breach. New York's suggestion of an inferred
de facto taking claim is no stronger. It is well-established
under New York law that neither an owner nor a tenant of real
property appropriated by the State under its power of eminent
domain may recover for the loss of business profits or goodwill
occasioned by the taking. Bopp v. State, 19 N.Y. 2d 368, 280
N.Y.S. 2d 135, 227 N.E. 2d 37 (1967). Beechcraft contends that
these are its only losses since the challenged New York statute
will not deprive Beechcraft of any part of its leasehold interest
at Republic.
New York's alternate argument that the non-availability of a
monetary remedy against the State means no injury ab initio and
thus no injury capable of qualifying as irreparable injury simply
stands logic on its head. It is the fact that Beechcraft cannot
pursue a remedy for the loss of its business profits because of
New York's sovereign immunity that makes the company's fimjury
irreparable and the issuance of a preliminary injunction
appropriate. Z
Similarly, New York's fallback position that Beechcraft has
not shown enough potential injury to constitute irreparable injury
confuses both the amount of injury that must be shown when no
alternate remedy for that injury exists, and those cases decided
by this Court concerning the nature of irreparable injury where
the business enterprise applying for a preliminary injunction has
a remedy for damages against the defendant in the first instance.
Where no damages sénoty of any kind exists, equitable considera-
tions underlying the need for a preliminary injunction clearly
require a far lesser amount of monetary injury than when the winisiee
seeking the injunction has available an ultimate damages remedy.
Regardless of whether Beechcraft is considered to here a damages
remedy against New York, the severity of its potential business
losses from New York's blanket ban on nighttime aircraft opera-
tions is sufficiently significant to satisfy this Circuit's requi-
site for irreparable injury where the moving party has an alter-
nate remedy at law for damages.
New York has passed a law which the district court has found
to be unconstitutional, and the State does not challenge that
finding in this appeal. Beechcraft will undeniably suffer signi-
ficant financial losses from imposition of the State's curfew.
The two legal theories sugested by New York for possible recovery
of those losses are transparently inadequate because no facts
exist to support them (in the case of the breach of contract
theory) or because state law forbids them (in the case of the de
facto taking theory). A preliminary injunction banning the curfew
is accordingly compelled by fundamental considerations of equity.
The district court did not abuse its discretion in reaching this
result and its grant of a preliminary injunction should not be
disturbed.
STATEMENT OF FACTS
This is an action challenging New York's efforts to take over
the ownership of Republic Airport in Suffolk County, Long Island,
and to impose an 1l p.m. to 7 a.m. curfew on all flight operations
.
- 6 -=
into and out of the airport. Republic is located approximately 20
miles east of John F. Kennedy ("JFK") International Airport. It
is used by general aviation aircraft, such as small piston driven
private planes and larger twin engine aircraft, for both pleasure
and business purposes and for the non-scheduled charter flights of
cargo and passengers. The airport is known as a "reliever air-
port" which means that Republic relieves New York's major commer-
cial airports, JFK, La Guardia, and Newark, of general aviation
aircraft. It is one of only four airports in the metropolitan
New York City area whose primary function is to serve as a
reliever airport which is capable of accommodating all aircraft
types in all weather conditions around the clock (J.A.
204-05)~’. Because of Republic's proximity to JFK and
La Guardia and its all weather capability for all aircraft types,
the airport is a critical component of the Federal Aviation Admin-
istration's (FAA) National Airport System Plan.—
A. Federal Funding Of The Airport
On May 6, 1971, the United States conveyed a substantial
portion (94.7 acres) of the current airport property to the MTA.
(J.A. 144)
*7 ~“J.A." refers to the Joint Apendix.
—/ Nov. 5, 1982 deposition of Paul L. Galis, pp. 26-28, sub-
mitted as Ex. C to Dec. 6, 1982 affidavit of Barrie L. Goldstein
in opposition to motion of the United States for a protective
order, filed Dec. 8, 1982.
Roe
The MTA is a public benefit corporation created by special
act of the New York State Legislature. N.Y. Pyblic Authorities
Law §1260, et seg. It is a corporation given the power to enter
contracts, §1265(6), and to acquire and hold real property,
$1265(7). The MTA is independent of and is not governed by the
supervisory powers of the New York State Department of Transporta-
tion (SDOT), §1266(8). The MTA may be both sued, §1276(1), and be
held liable in tort for money damages, §1276.
Pursuant to the foregoing powers, thé MTA, in exchange for
the conveyance of Republic Airport property, expressly convenanted
in the deed of conveyance:
That all facilities of the Airport devel-
oped with Federal Aid and all those useable for
landing and taking off of aircraft will be avail-
able to the United States at all times, without
charge, for use by aircraft of any agency of the
United States in common with other aircraft...
Deed, 48, J.A.'148 (emphasis added). The MTA also promised in the
deed that “any subsequent transfer of property interests conveyed
hereby will be made subject to all of the convenants, conditions
and limitations contained in the instrument." Deed, qS5, J.A. 147.
During the past eleven years of MTA's ownership of Republic
Airport, the federal government has made nine grant awards to MTA
for acquiring and improving the facilities at Republic. These
awards totaled $6,820,782. (J.A. 206) The improvements have
included, inter alia, the installation of navigational equipment,
runway lighting, improvement of runway markings, and construction
of drainage and fencing.
r
Among the covenants included in the grant agreements are the
following:
(1) not to dispose of or encumber its title or
interest in Republic (Assurance No. 10, J.A. 153);
(2) not to enter into any transaction which
would deprive MTA of the ability to carry out
all of the grant covenants unless by such
transaction the obligation to perform the
convenants is assumed by an agency approved by
the FAA (Assurance No. 32, J.A. 155);
(3) keep Republic airport open to all types,
kinds, and classes of aeronautical use on fair
and reasonable terms (Assurance.No. 18, J.A. 154);
(4) operate and maintain in a safe and
serviceable condition, and whenever required,
all of the airport's facilities needed to
serve aeronautical uses, including the promise
‘to have in effect, at all times, arrangements
for operating the facilities (Assurance No. 22,
J.A. 154); and
(5) make available to the United States at all
times, all of the airport's facilities
developed with federal aid or used for the
- landing and -taking off of aircraft (Assurance
In addition to these general convenants, MTA expressly agreed
in the second of the nine grant agreements to operate the lighting
No. 26; J.A. 155).
systems funded by the grant "throughout each night of the year."
Project No. 8-36-0028-02. (J.A. 208).
B. The Challenged Legislation
On June 23, 1982, the New York State Legislature enacted a
statute (1) divesting MTA of its ownership of Republic Airport,
(2) vesting ownership and operational responsibilities over the
« §«
airport in the State's Department of Transportation, (3) imposing
a mandatory 11 p.m. to 7 a.m. curfew on the airport, except for
emergency use, and (4) wanes exclusively in a citizen's commis-
sion (known as the Republic Airport Commission) the power to
modify the curfew after notice and hearing. S.9450-A adding
Article 15 to the Transportation Law of the State of New York by
Chapter 370 of the Laws of 1982. A copy of the legislation
appears at pages 101-109 of the Joint Appendix and is referred to
herein as S. 9450-A. “
Contrary to the referenced deed and grant covenants, neither
the MTA nor the State of New York at any time obtained the FAA's
permission to transfer ownership of the airport from the MTA to
the State Department of Transportation. The curfew provisions of
the legislation went into effect September 20, 1982.
In an undated "Notice to Airport Users" from Carl L. Stacy,
Airport Manager, notice was given that
REPUBLIC AIRPORT will be closed to aircraft
operations between the hours of 11:00 p.m. and
7:00 a.m. commencing September 19 1982.
During those hours the arrival and departure
of aircraft is prohibited and no services will
be provided by the airport operator such as
runway lightin navigational aids, landing or
takeo! re-rescue services.
Ex. 13 submitted in support of Plaintiff's (United States)
Response To Motion of Beechcraft East, Inc. To Intervene And For A
Preliminary Injunction, filed September 28, 1982 (emphasis added).
e 16 =
New York's decision to turn off runway lighting and naviaga-
tional aids, in addition to declaring the airport closed during
curfew hours, presented, in the FAA's view, serious safety hazards
(1) to those using the airport for emergency nighttime landings,
(2) to those intending to land before ll p.m. but delayed by
adverse weather conditions, and (3) to those intending to use the
lighted airport as a navigational aid while going to or from
nearby La Guardia and JFK airports. The FAA expressed these
concerns to counsel for defendants in a meeting on September 15,
1982. ‘The following day, defendnts agreed not to turn off runway
lighting and navigational aids pending litigation of the issue in
this case!”
Notwithstanding defendnts' concession on the safety-related
issue of lighting and navigational aids, defendants declined to
rescind transfer of the airport or the imposition of the curfew.
As a result, the United States filed the instant action seeking
injunctive and declaratory relief (J.A. 19) on September 17, 1982.
By leave of court, the United States filed a first amended
complaint on November 19, 1982 (J.A. 433).
*/ Contrary to defendants’ statement of the case at pages 7-9 of
their brief, the FAA never agreed to forebear from seeking a pre-
liminary injunction on the matter of the curfew if New York left
on lighting and navigational aids during nighttime hours. The
only preliminary injunction the PAA agreed not to seek was one
pertaining to runway lights and navigation equipment. Because the
question of a promise, vel non, not to seek a preliminary injunc-
tion on the curfew is wholly irrelevant to any issue presented
below or in this appeal, the United States has not made of record
any evidence refuting the hearsay allegations of defendants'
affiant Clarence Cook (J.A. 81) on this point.
« 1%'«
C. The United States' Case
The United States contends that New York violated three pro-
visions of the Constitution when it passed S. 9450-A. First, the
United States alleges that the law violates the Contract Clause of
the Constitution, Art. I, Sec. 10, by impairing contract rights
and obligations between the United States and the MTA. As previ-
ously noted, controlling grant agreements between the federal
government and the MTA provided that the ownership of Republic
Airport could not be changed without FAA approval. The United
States alleges that New York never obtained approval from the FAA
to assume ownership of Republic. S. 9450-A which legislatively
mandates an unconsented transfer, therefor, impairs the federal
government's contract rights in violation of the contract Clause
of the Constitution. As a result, the United States contends that
the transfer provisions of S. 9450-A are void ab initio and that
New York is not the lawful owner of Republic Airport.
The United States additionally alleges that the nighttime
curfew violates not only the Contract Clause of the Constitution,
but also the Supremacy Clause, Art. VI, and the Commerce Clause,
Art., Sec. 8. Controlling Supreme Court precedent recognizes that
the power to control aircraft noise at airports has been preempted
by Congress to the exclusion of all persons and entities
(including municipalities) except airport owners. City of
Burbank v. Lockheed Air Terminal, 411 U.S. 624 (1973). The
government alleges that airport owners, however, may only take
limited action to abate aircraft noise. As this Court held in
British Airways Board v. Port Authority of New York, 558 F.2d 75,
84 (2d Cir. 1977), an airport owner is vested "only with the power
to promulgate reasonable, nonarbitrary and non-discriminatory
regulations that establish acceptable noise levels for the airport
and its immediate environs." The United States contends in this
case that since New York's efforts to become the proprietor of
Republic Airport were void ab initio in light of the Contract
Clause's prohibition on the impairment of contract rights, the
State cannot avail itself of the proprietor exception to noise
abatement plans recognized by the Supreme Court in City of
Burbank, supra. Accordingly, the curfew stands in violation of
the Supremacy Clause. It was the position of the government below
that this violation of the Supremacy Clause was compounded by the
fact that the legislation adopting the curfew was itself a product
of an exercise of New York's police power in violation of the
proscriptions established by the City of Burbank, supra.
The federal government additionally contends in this case
that even assuming New York is held to have imposed the curfew in
its capacity as a lawful airport proprietor, the curfew is over-
broad, unreasonable, and arbitrary and thus violative of the
Supremacy and Commerce Clauses for reasons recognized by this
Court in British Airways, supra.
Beechcraft also pleads each of the foregoing theories of con-
stitutional infirmity with respect to S. 9450-A. J.A. 20-21, 442,
6, and 7. Beechcraft does not plead any causes of action against
New York based on breach of contract or on the de facto appropria-
tion of its leasehold interest at Republic.
» 13 =
D. Proceedings Below
The United States filed its complaint on September 17, 1982.
On September 22, 1982, Beechcraft East filed an order to show
cause for leave to intervene and for a temporary restraining order
my and a preliminary injunction. On September 28, 1982, the United
States filed a brief supporting Beechcraft's motion for a prelimi-
nary injunction with respect to the issue of likelihood of success
on the merits. The United States did not take a position on the
- issue of irreparable harm because, at thestime, it lacked knowl-
edge of the nature of Beechcraft's claimed financial injury. Oral
argument was heard by the district court on October 1, 1982, and
on October 7, 1982, the lower court granted Beechcraft's motion to
intervene and its motion for a preliminary injunction. J.A. 199.
The court supplemented its order granting the preliminary injunc-
tion with’a Memorandum Decision and Order filed October 14, 1982.
United States v. State of New York, 552 F. Supp. 255 (N.D.N.Y.
19862), J.A. 203.
Beechcraft's complaint incorporated by reference all allega-
tions and counts of the complaint filed by the United States
J.A. 20, 42. In addition, Beechcraft included a Commerce Clause
count not made by the United States in its original complaint, and
a Supremacy Clause count that was slightly broader in scope than
° the federal government's original Supremacy Clause count.
J.A. 21, 496 and 7.
On October 22, 1982, the lower court also consolidated a
related action that had been filed against the State by AOPA.
AOPA, like Beechcraft, attacked the curfew legislation on
Supremacy and Commerce Clause grounds.
On November 19, 1982, the United States filed a first amended
complaint which expanded the scope of its Supremacy Clause count
and added a Commerce Clause count. J.A. 433. The amended
pleadings made the complaints of all three plaintiffs coextensive
with respect to Supremacy and Commerce Clause allegations.
Contract Clause counts were presented only by the United States
and Beechcraft. |
In its supporting memorandum, the district court found that
Beechcraft had satisfied this Circuit's requirements for prelimi-
nary injunctive relief by making a clear showing of (a) irrepar-
able harm and (b) either (1) likelihood of success on the merits
or (2) sufficiently serious question going to.the merits to make
them a fair ground for litigation and a balance of hardships
tipping decidedly toward the party requesting the preliminary
relief. 552 F. Supp. at 261, J.A. 211. On the issue of irrepar-
able harm, the lower court noted that Beechcraft had demonstrated
a business loss "that is certainly not remote or speculative, but
{is] actual and imminent." Id. at 262, J.A. 214. In reaching
this finding, the court relied on evidence submitted by Beechcraft
showing that as the result of the curfew, over twenty-five cus-
tomers had given notice of their intention to relocate to another
airport, with additional cancellations coming in daily. Id. at
261-62, J.A. 212. After finding the existence of business losses
due to New York's curfew, the lower court found that Beechcraft
had no adequate remedy at law against the State in light of the
Eleventh Amendment. Id. at 262, J.A. 214. The court noted on
this point:
-
j ;
| oo ~~ la —_— =,
For this loss there is no adequate remedy at
law, and, therefore, the fact that the loss
may be only a small percentage of Beechcraft's
nation-wide and international revenue is
irrelevent. There is no requirement in this
Circuit that a party wait until near-
extinction before moving for a preliminary
injunction. The law, like the Constitution,
is not a suicide pact.
Ibid,
~s
With respect to Beechcraft's likelihood of prevailing on the
merits of its constitutional claims, the lower court focused on
plaintiffs' claim that New York's curfew violated the Supremacy
Clause of the federal Constitution. The court noted that under
City of Burbank v. Lockheed Air Terminal, 411 U.S. 624 (1973), the
Supreme Court had found that Congress had preempted the area of
airport noise control for the FAA, with the exception that airport
proprietors were given "special, although undefined, leeway in
controlling the sources of aircraft noise directly." 552 F. Supp.
at 263, J.A. 217. The lower court then noted that this Court gave
definition to that "leeway" in British Airways Board v. Port
Authority of New York, 558 F.2d 75 (2d Cir. 1977), when it held
that in light of congressional efforts to preempt the area of air-
port noise control, an owner is vested “only with the power to
promulgate reasonable, non-arbitrary and non-discriminatory regu-
lations that establish acceptable noise levels for the airport and
its immediate environs." 552 F. Supp. at 264, J.A. 220, quoting
from British Airways, supra, 558 F.2d at 84.
o 16 <
On the basis of the record, the lower court found that
New York's curfew law, S. 9450-A, is "overbroad, unreasonable and
arbitrary." 552 F. Supp. at 265, J.A. 220. The court noted in
: .
support of its finding that:
>. ‘(t]he curfew extends to all aircraft, regardless
of the degree of accompanying emmitted noise. In
fact, Article 15 makes no reference to noise
levels measured in decibles as a factor in
particular plane prohibition during the 11:00
P.M. to 7:00 A.M. curfew.
** xn ak
Moreover, as the Sate admits, only 14 flights
occur during the forbidden hours -- a mere 2.6
percent of the total daily aircraft traffic. A
total proscription of flights during the curfew
period, it seems to this court, is unreasonable
in view of the sparsity of flights during the
curfew hours."
Ibid. (emphasis in the original).
Following the court's opinion, the State took discovery of
Beechcraft to determine the extent- of its contemplated financial
losses due to the curfew. Following this discovery, the State
moved to vacate the preliminary injunction. The State did not
base its motion on the court's finding that the curfew was uncon-
stitutional. Instead, the State limited its motion to the issue
of whether Beechcraft had truly demonstrated irreparable injury.
° At oral argument on the motion, the court reaffirmed its earlier
ruling that the State had not waived its sovereign immunity from
suit for lost business profits occasioned by the curfew. J.A.
430. The State now appeals from the denial of its motion to
vacate. Because the district court was correct in concluding that
- 179 -
New York had not waived its immunity from suit for money .damages
in the context of the facts presented by this case, the lower
court's preliminary injunction should not be set aside.
ARGUMENT
e SUMMARY
The major portion of New York's argument in support of
setting aside the injunction of its airport curfew is that
Beechcraft East has an adequate remedy at law for money damages
against the State in its Court of Claims. There are two errors
with this contention. First, the existence, vel non, of an
adequate legal remedy in state -court is irrelevant to the question
of whether an injunction should issue in federal court. What is
relevant is the question of whether the movant has an adequate
remedy at law in federal court. If he does not, then for purposes
of issuing an injunction, he has satisfactorily demonstrated the
inadequacy of a legal remedy irrespective of whether he has one in
state court. Di Giovanni v. Camden Fire Insurance Ass'n, 296 U.S.
64, 69 (1935). New York does not contend that Beechcraft has a
legal remedy against the State in federal court. As a result,
there was no error in the lower court concluding that Beechcraft
lacked an adequate remedy at law against the State.
Yet even if the district court were required to consider the
> adequacy of legal remedies in state court, New York has not waived
its sovereign immunity from the type of action presented by the
present case. All plaintiffs, including Beechcraft, sue the State
on account of injury caused by implementation of an unconstitu-
tional statute. It is a well-established principle of New York
a a ee ee 5, 5
State law that the State cannot be held monetarily liable for the
unconstitutional actions of its Legislature which do not involve
the taking of real property. Fonfa v. State, 88 Misc. 2d 343, 388
N.Y¥.S. 24 65 (Ct. Cl. 1976).
New York replies that Beechcraft's case is really one for
breach of contract and for the de facto taking of its leasehold
interest in Republic. There are several shortcomings with this
argument. First, Beechcraft never pleads either cause of action
in its complaint. Second, insofar as New York claims to be the
successor in interest to contracts between Beechcraft and the MTA
prohibiting curfews, Beechcraft and the United States claim that
New York's efforts to take over the airport and succeed as the
successor in interest to those contracts were voided ab initio by
operation of the Contract Clause of the Constitution. Third,
Beechcraft could not recover against New York on a de facto taking
theory because state law prohibits the recovery of lost business
revenues or customer goodwill (Beechcraft's only losses) as the
result of property taken by the State under its power of eminent
domain. Bopp v. State, 19 N.Y. 2d 368, 280 N.Y¥.S. 2d 135, 227
N.E. 2d 37 (1967).
In the alternative, the State argues that even if Beechcraft
was without a legal remedy, it was reversible error for the
district court to make a related finding of irreparable injury
solely on the basis of no adequate remedy at law. Contrary to the
State's position on this point, the lower court's action of “
merging the two tests for injunctive relief was proper when the
basis for finding no adequate remedy at law was the absolute
- 19 -
inability of Beechcraft to ever obtain money damages from the
State. Ohio Oil Co. v. Conway, 279 U.S. 813 (1929).
Yet even if the lower court were required to look elsewhere
for a finding of irreparable injury to support the issuance of a
preliminary injunction, two valid grounds existed. First, the
fact that SpePneree® Sar alleged and the lower court had found
that New York had acted unconstitutionally in enacting a curfew,
constituted a prima facie showing of irreparable injury. Henry v.
Greenville, 284 F.2d 631, 633 (4th Cir. 1960). Second,
Beechcraft's showing that absent an injunction it would suffer
significant business losses and go out of business at Republic,
was sufficient under the law of this Circuit to establish a
showing of irreparable injury. Semmes Motor, Inc. v. Ford Motor
Company, 429 F.2d 1197 (2d Cir. 1970).
At issue in this appeal is the existence of state conduct
that has been found to be unconstitutional, conduct which will
cause Beechcraft to lose substantial business revenues, and
conduct for which there is no legal remedy in either federal or
state court. Under these circumstances, it was undeniably proper
for the lower court to find that Beechcraft had made a satis-
factory showing of irreparable injury. No argument advanced by
the State justifies setting aside this ruling.
i. BEECHCRAFT HAS NO DAMAGES REMEDY
AGAINST NEW YORK IN FEDERAL COURT
The lower court found that Beechcraft would be irreparably
injured by New York's curfew because the company had no remedy at
law against the state in federal court in light of the Eleventh
o 28 «
Amendment. 552 F. Supp. at 262, J.A. 214. New York contends that
the district court erred in concluding Beechcraft lacked an
adequate remedy at law because the State's Court of Claims Act
permits Beechcraft to sue the state for money damages in its own
state court system. Implicit in the State's argument is the posi-
tion that a contention of an inadequate remedy at law oiieaail be
sustained if there is an adequate remedy in state court although
there is no adequate legal remedy in federal court. This position
is wrong as a matter of law.
It has long been held by the Supreme Court that the measure
of whether a legal remedy is adequate for purposes of determining
the appropriateness of an injunction is based on the existence of
a legal remedy in federal court alone. Alabama Comm'n v. Southern
R. Co., 341 U.S. 341, 359 (1951); DiGiovani v. Camden Fire
Insurance Assn., 296 U.S. 64, 69 (1935). Accord, Oneida Indian
Nation of New York State v. County of Oneida, New York, 464 F.2d
916, 922 (2d Cir. 1972). Commenting on the measurement of an
adequate remedy at law in the context of considering a request for
injunctive relief, the Supreme Court has noted;
It is true, as this Court has often pointed
out, that the inadequacy prerequisite to
relief in a federal court of equity is
measured by the character of remedy afforded
in federal rather than in state courts of law.
This follows from the nature of "equity
jurisdiction" of the federal courts.
ae ak ae
- 23 «
DiGiovanni v. Camden Pire Insurance Ass'n, supra, 296 U.S. at 69
(citations omitted) (emphasis added).
New York neither contends nor suggests that Beechcraft has an
adequate remedy at law equities the State for damages in federal
court. The State's only suggested legal remedy is in its own
Court of Claims. As noted above, such a forum for legal redress
is wholly irrelevant to the question of whether Beechcraft has an
adequate remedy at law for purposes of considering the appropri-
ateness of a preliminary injunction in federal aie," The
lower court's reliance on the existence, vel non, of an adequate
legal remedy in federal court was legally required as a matter of
federal law and should not be reversed.
«/ The existence of an adequate state court remedy may in
Timited curcumstances, not present here, be considered by a
federal court in deciding whether to grant an injunction where the
interest of a plaintiff is "relatively unimportant when compared
to some overwheming public interest." Alabama Comm'n v. Southern
R. Co., supra, 341 U.S. at 360. A leading example is the approp-
riateness of considering the state court remedies of a state
criminal defendant who seeks to enjoin a state criminal pro-
ceeding. Younger v. Harris, 401 U.S. 37 (1971). Despite the
arguable public interest in the State's curfew by homeowners
living close to Republic Airport, their interest is purely a local
one of restricted dimensions and in no realistic sense can be
characterized as “overwhelming” from a state-wide perspective.
See generall Allied Structural Steel Co. v. Spannus, Attorne
General of GT, sonra 438 U.S. 234, 248-249 (1598)
= 32 <
II. BEECHCRAFT HAS NO DAMAGES REMEDY
AGAINST NEW YORK IN STATE COURT
Notwithstanding the foregoing discussion of controlling
Supreme Court law holding that the existence of an adequate remedy
at law is based on the adequacy of a legal remedy in federal and
not state court, the legal result obtains that even in state court
Beechcraft has no adequate remedy at law against New York.
The nub of Beechcraft's case against the State is that it
will lose business revenues because of- New York's statutorily
imposed curfew at Republic Airport. New York, responés that if it
has acted improperly in establishing the curfew, Beechcraft can
recover its anticipated losses against the State under New York's
Court of Claims Act. New York is in error. The Court of Claims
Act only waives the State's liability for money damages with
respect to actions that can be brought against individuals or
companies, such as actions in tort or for breach of contract.
The case at bar is not a tort suit, not a breach of contract
action, nor a claim for the wrongful taking of property. In
short, the instant action is about damage caused by New York's
implementation of an unconstitutional law not involving the appro-
priation of real property. New York law is abundently clear that
the State has not waived its liability for money damages on
account of such sovereign conduct. As a result, Beechcraft has no
adequate remedy at law against the State.
“— ; on
A. Wew York Has Not Waived Its
Liability For Money Damages
For The Unconstitutional Act
Of Its Legislature.
The State pitches the major portion of its appeal on
New York's Court of Claims Act. Section 8 of the Act provides:
The State hereby waives its immunity from
liability and action and hereby assumes
liability and consents to* have the same
determined in accordance with the same rules
of law as applied to actions in the Supreme
Court agianst individuals or corporations —-
(Emphasis added. ) a
Section 9 of the Act further provides with respect to the
jurisdiction of the Court of Claims:
To hear and determine a claim of any person,
corporation or municipality against the state for
the appropriation of any real or personal property
of any interest therein, for the breach of contract,
express or implied, or for the torts of its officers
or employees while acting as such...
As reflected by the foregoing statutory language, the Court
of Claims Act waives New York's immunity from liability only with
respect to actions that can be brought against “individuals or
corporations." Act, § 8. The "waiver of immunity by the State
(Court of Claims Act, § 8) is inapplicable here where the activity
complained of is sovereign in character and cannot be likened to
functions which could be carried on by a private person or corpor-
ation." Bernkrant v. State, 26 A.D. 2d 964, 274 N.Y¥.S. 2d 749
(3d. Dept. 1966) [No waiver of immunity by State for damages
caused by State Rent Administrator who refused to approve a tenant
eviction]. Accord, Southworth v. State, 62 A.D. 2d 731, 405
« $6.0
:
N.Y¥.S. 24 548, aff'd 47 N.¥. 24 874, 419 N.¥.S. 24 71, 392 N.E. 2d
1254 (1979); Granger v. State, 14 7.D. 2d 645, 218 N.¥.S. 2d 742
(3d Dept. 1961).
In the case at bar, Beechcraft contends that it will suffer
substantial business losses leading to financial collapse from the
State's imposition of a blanket curfew at Republic Airport pur-
suant to legislation enacted by the State Legislature. Beechcraft
contends that the legislation, which mandates the curfew, uncon-
stitutionally violates the Supremacy, Commerce, and Contract
Clauses of the United States Seastitetion: See Beechcraft Com-
plaint, 4% 2, 6, and 7, J.A. 20-21. Beechcraft does not. plead a
breach of contract count against the State or a count based on the
de facto taking of its leasehold interest at Republic. The sole
and exclusive predicate for Beechcraft's alleged damages is that
it was injured as the result of an unconstitutional state law.
Individuals and corporations not being sovereigns cannct pass
laws (whether constitutional or not) and, thus, actions in damages
cannot be brought against them for the results of such legisla-
tion. For this reason, section 8 of New York's Court of Claims
Act does not waive the State's immunity from liability for the
consequences that flow from laws enacted by its legislature, even
if they are unconstitutional.
In a Court of Claims case squarely on point, the Court held
that New York had not waived immunity from liability for the
enactment of unconstitutional statutes. Fonfa v. State, 88 Misc.
2d 343, 388 N.Y.S. 2d 65 (Ct. Cl. 1976). In Fonfa, claimant sued
the State for illegal arrest and detention pursuant to an
- 336
allegedly unconstitutional state statute. Taking as true
Claimant's allegations that the statute in question was uncon-
stitutional, the Court of Claims noted:
On that basis, the legal question becomes: In
this court of limited jurisdiction, can the
state be held liable for its enactment of
statutes later declared unconstitutional? My
answer is: No.
Id at 67. Quoting from a State Court of Appeals decision in
Barrett v. State of New York, 220 N.Y. 423, 425 (1917), the Court
of Claims in Fonfa observed:
We know of no principle of law under which the
state becomes liable because of the adoption
of an unconstitutional statute.
Ibid.
The rationale for this result stems from the obvious fact,
noted above, that enactment of legislation is inherently a sover-
eign responsibility for which no private person or corportion
could be sued. As noted by the Appellate Division of the New York
Supreme Court in Newiadony v. State of New York, 276 App. Div. 59,
61; 93 N.Y.S. 2d 24, 26 (3d. Dept. 1949), quoted with approval by
the Court of Claims in Fonfa, id. at 68:
How far the argument of full analogy of State
to private acts may run will be illustrated if
the consequences of legislative policies be
considered. Often laws enacted for the public
welfare are destructive cé private activities.
If an individual or corporation acted thus
destructively there could be no doubt that
remedy would be readily found in the courthouse.
- 26 -
aN
But the inconveniences of legislative
dispositions of policy are not a proper
subject for claims against the government.
No government could function thus pedaee in
b ey I t were the legislative
intention to assume a liability on any such
revolutionary scope, it would demand
unmistakeable language.
Aside from the foregoing characterization of Beechcraft's
complaint as one not involving a conract or de facto taking count,
New York does not disagree with any of the cited legal principles
“including the holding of Fonfa, supra. Indeed, the State candidly
acknowledges that the "passage of legislation is an act only
performed by the sovereign.” State's Brief at 24. Thus, = only
issue presented by the State's argument on this point is whether
this case involves some type of additional, presumably non-
articulated, cause of action for which the State has consented to
be sued under its Court of Claims Act. If, in the final analysis,
this case is only about injury caused by an unconstitutional state
law not involving the taking of real property, all parties agree
that Beechcraft has no damages remedy against New York.
B. New York's Suggested Legal
Theories Are Inadequate.
Recognizing the correctness of Fonfa, supra, the State
attempts to remedy the previously discussed shortcoming in its
Court of Claims argument by arguing for the first time in this
case that Beechcraft affirmatively pleads causes of action which
@ 279 «
*
can be remedied under the Court of Claims Act.—” Two counts
are alleged. The first is a breach of contract cause of action,
and the second is one based on a de facto appropriation of a real
property interest. As discussed below, neither count is alleged,
and if either were, neither could succeed.
1. No Contracts Prohibiting A Curfew
Are Alleged By Beechcraft To Have
Existed Or Been Breached.
New York contends Beechcraft has plead a breach of contract
count against the State based on paragraphs 8-12 of Beechcraft's
Complaint and on paragraphs 24-28 and 33-37 of the United States'
Complaint which Beechcraft incorporates by reference. State's
Brief p. 21. An inspection of these paragraphs denies the State's
contentions.
Paragraphs 8-12 of Beechcraft's Complaint, J.A. 21-22, allege
that Beechcraft entered into a contract with the MTA for the pur-
pose of leasing land and facilities at Republic Airport owned by
the MTA. Beech Complaint, 48, J.A. 21. Beechcraft does not
allege in its Complaint, and New York has never contended, that
MTA agreed under the leasing agreement to keep Republic open 24
hours each day. Beechcraft does allege that it entered into
service contracts with customers using Republic's facilities to
es] In its motion to vacate the preliminary injunction, the State
raised for the first time the availablity of a remedy under its
Court of Claims Act. While it indicated the general types of
actions that could be brought against the State under the Act, it
did not indicate which of Beechcraft's counts qualified for review
under that Act. It is only in its brief on appeal that the State,
for — first time, advises plaintiffs how Beechcraft might
proceed.
- 26 -
provide "twenty-four hour service and flights on demand." Beech
Complaint ll, J.A. 22. Again, Beechcraft makes no allegation,
however, that the MTA or the State Department of Transportion was
a party to these agreements.
Beechcraft's allegations in its complaint do not affirma-
tively plead any contract with the MTA or the State requiring that
the airport be left open around the clock. And as noted, New York
does not contend itself that such agreements actually exist.
Examination of allegations made in the Complaint of the
United States, and adopted by Beechcraft, also fails to reveal any
cognizable breach of contract counts capable of advancement by
Beechcraft. Paragraphs 24-28 of the federal government's
Complaint, J.A. 14-15, are for violations of the Contract Clause
of the Constitution, Art. I, Sec. 10, and not for a breach of con-
tract. Specifically, the United States alleges that its contract
rights with MTA requiring FAA approval of Republic's transfer and
the 24 hour availability of the airport for the government's use
were impaired by New York's passage of S. 9450-A. This count is
clearly one for unconstitutional conduct by a sovereign state in
contravention of Article I, Section 10 of the Constitution. It is
not for a breach of contract.
Paragraphs 33 through 37 of the United States are breach of
» contract counts against the State. For two reasons they do not
state causes of action on which Beechcraft could prevail. First,
the contracts alleged are the nine grant agreements and one deed
of transfer between the United States and the MTA. Beechcraft was
- 29 -
)
ke
‘er
- |
not a party to these agreements. As a result, Beechcraft can only
claim third party beneficiary status from these covenants. But it
is well-established in the field of federal grant and contract
law that one who is not a recipient of federal monies may not
Claim third party beneficiary status for purposes of securing
damages if the grant or contract is not honored. Merritt v.
*
United States, 267 U.S. 338, 341 (1925). The State agrees
with this contention. Relying on Cort v. Ash, 422 U.S. 66 (1975),
and Nat'l Aviation v. City of Hayward, 418 F. Supp. 417, 429 (N.D.
Cal. 1976), New York argued below:
We submit that the federal statutes and the
grants upon which the PAA bases its claim do
not establish a private right of action [for
Beechcraft] since Beechcraft was not intended
to be a third-party beneficiary and [sic]
thereunder.
Defnd's Mem. of Law In Opposition To The Proposed Intervenor's
Motion For A Preliminary Injunction at 5 n.(*), filed Sept. 30,
1982. In light of these precedents, and for reasons articulated
by New York below, Beechcraft has no cause of action against the
State for alleged violations of grant obligations it would have
undertaken as MTA's lawful successor in interest.
Both Beechcraft and the United States allege, however, that
New York is not MTA's lawful successor in interest because the
Contract Clause voids ab initio the attempt of S. 9450-A to
*/ Accord, Gardiner Manufacturing v. United States, 479 F.2d 39
(9th Cir. 1973); Brister & Koester Lumber Corp. v. United States,
Cte Cc 7: .
90 F. Supp. 695 (
= 30
*
transfer ownership of Republic Airport. Thus, even assuming
Beechcraft could claim third party beneficiary status with respect
to contracts between the United States and the MTA, the State is
not a successor in interest to those agreements and no contract
exists with the State to be breached.
New York's allegations of contract counts by Beechcraft are
thus denied both by the facts of this case and by controlling law.
2. New York Law Prohibits Recovery Of
Lost Business Profits Resulting From
The State's Appropriation Of Real Property.
In the alternative to a suggested breach of contract claim,
New York contends that Beechcraft can recover against the State on
a de facto appropriation of real property theory. The State does
not contend that Beechcraft has even alleged such a cause of
action but only that it has been "implicitly stated" in paragraphs
13 through 15 of its Complaint. State's Brief at 21.
Beechcraft, however, has neither stated nor implied a cause
of action for the de facto taking of all or part of its leasehold
interest at Republic. Paragraphs 13 through 15 of its complaint
simply allege that it will suffer severe business losses if the
curfew is allowed to proceed unenjoined. J.A. 23. This is merely
a statement of injury and not of a legal theory for recovery.
*7 The Supreme Court has held that a state law which impairs a
contract right in violation of the Contract Clause is "not a law"
because the Constitution forbids it. Poindexter v. Greenhow, 114
U.S. 270, 288 (1884). New York, thus, does not stand in MTA's
shoes with respect to any contract agreements between MTA and the
federal government over the operation of Republic.
Ss
It is not surprising that Beechcraft has declined to plead a
de facto taking theory for an inspection of New York law reveals
that such a cause of action for lost business revenues is not
recognized.
F The State of New York may appropriate the property of its
citizens either by the power of eminent domain oe. a its police
power. While both have "much in common...there is nevertheless a
sharp distinction between them." 19 N.Y. Juris. Eminent Domain
§ 2, p. 191. The “state takes property by eminent domain because
it is useful to the public and under the police power because it
is harmful." Lemp v. Town Bd. of Islip, 90 Misc. 2d 360, 394
N.Y¥.8. 24 517, 521 (Sp. Ct. 1977).
The power of eminent domain is "inherent in the state, it is
an attribute of sovereignty resting upon political necessity, and
as essential to the effective existence of the state as the police
power and power of taxation." 19N.Y. Juris, supra, at §4,
p. 193. Accord, Georgia v. Chattanooga, 264 U.S. 472, 480 (1924).
The power of eminent domain “is not a property right or an
exercise by the state of an ultimate ownership of the soil,
but...is based on the sovereignty of the state." 26 Am. Jur. § 3
. pp. 641-42 (1966).
Owners whose property is acquired by New York under its power
» of eminent domain are entitled to just compensation by virtue of
Article 1, Section 7 of the State Constitution and by the 5th
Amendment to the federal Constitution as applied to the states
through the Fourteenth Amendment, Penn Central Transp. Co. v.
on SD iw
: ea
New York City, 438 U.S. 104, 123-28 (1978). In such cases, both
constitutions reqire payment of just compensation for the a, rop-
riated property and the question of sovereign immunity is of no
consequence to the state's liability. Keystone Assoc. v. State of
New York, 39 A.D. 2d 176, 333 N.Y¥.S. 2d 27, 28 (3d Dept. 1972),
aff'd on opinion below, 33 N.Y. 2d 848, 352 N.Y.S. 2d 194 (1973).
By comparison, where New York takes property under its police
power, such as where it legislates zoning or provides the
machinery to enjoin noxious use, there is no right to compensation
by the affected owner. Lutheran Church in America v. City of
New York, 35 N.Y. 2d 121, 129, 359 N.Y¥.S. 2d 7, 14, 316 N.E. 2d
305, 310 (1974); Lemp v. Town Board of Islip, supra, 394 N.Y.S. 2d
at 521. Accord, Pruneyard Shopping Center v. Robins, 447 U.S. 74,
.
81 (1980). “/
In the case at bar, it is of no consequence whether
New York's taking of Beechcraft's leasehold interest at Republic
(as suggested by the State itself) is a taking under New York's
police power or its power of eminent domain. If the de facto
taking is pursuant to the State's police powe:, then under the
cited authorities, no compensation is required. If, on the other
hand, the taking is under New York's power of eminent domain,
controlling state law discussed below prohibits Beechcraft from
recovering for lost business revenues and customer good will.
See generall ee F. French Inv. Co., Inc. v. City of
ew York, a i ee , a N.Y.S. , N.E. 381, cert.
enied, 429 U.S. 990 71996). But see, Loretto v. Telepr te
Manhattan CATV cad 50 U.S.L.W. 4988 (June 30, 1582) femratee)
ntrusion upon real property under state's police power consti-
tutes a compensable taking).
= 33 <-
In the absence of a specific statutory provision to the
contrary, New York law prohibits both an owner of appropriated
property, or a lessee holding a leesehold interest in the prop-
erty, from recovering against the State for the "loss of business
profits" or for the loss of customer "good will." 19 N.Y. Jur.
Eminent Domain §187 p. 424, §233 ». 478; Bopp v. State, 19 N.Y. 2d
368, 280 N.¥.S. 2d 135, 227 N.E. 2d 37 (1967); Re New York, W.S. &
&
B.R. Co., 42 Sup. Ct. 633, 35 Hun. 633 (5th Dept. 1885) .~
New York's law on this point is the prevailing view. 27 Am Jur 2d,
Eminent Domain §353, p. 198; United States v. General Motors
Corp., 323 U.S. 373 (1945); United States v. Petty Motor Co., 327
U.S. 372 (1946). The rationale for this result is that the loss
of business, profits, or good will is not land or real estate in
the constitutional sense and, thus, not subject to just compensa-
tion under considerations of eminent domain. See generally,
Newark v. Cook, 99 N.J. Eq. 527, 537, 133 A. 875, 879 (1926),
aff'd without opin., 100 N.J. Eq. 582, 135 A. 915, cert. denied,
McEuey v. Newark, 274 U.S. 757 (1927).
New York does nothing more in its brief than hypothesize that
Beechcraft may have an implied de facto appropriation theory for
the alleged loss of business revenues. Indeed, New York could not
*/ Accord, Strong v. State, 38 A.D. 241, 328 N.Y.S. 2d 913
(3d Dept. 1972); Garfield Homes, Inc. vy. State of New York, 44
Misc. 2d 738, 255 N.Y.S. 6, 24 (Ct. Cl.), aff'd sub nom.,
Great Atlantic & Pac. Tea Co. v. State, 25 A.D. 2d 905, 269 N.Y.S.
( ept.), m ed, 22 N.Y. 2d 75, 291 N.Y.S. 2d 299, 238
N.E. 2d 705 (1968). See generally, 53 Cornell L. Rev. 604, 627,
et seq. (1968).
= 34.<
suggest any actual taking of real property per se since the record
below does not reflect such an event. The State is thus defeated
by its own law which prohbits recovery for the loss of business
profits occasioned by a taking of property under the power of
eminent domain. '
The State places heavy reliance in its brief on Keystone
Assoc. v. State of New York, supra. Yet Keystone stands for no
more than the well-recognized rule that a state which takes prop-
erty under its power of eminent domain, whether by statute or by
administrative process, must pay just compensation to those having
an interest in the property. The United States takes no issue
with this fundamental constitutional principle.
It is the position of the United States, and of the court
below, that when New York injures a private party through the
passage of an unconstitutional law not appropriating real
property, the State has not waived its_immunity from monetary
liability. Such was the holding of the Court of Claims in
Fonfa v. State, supra. No dicta in Keystone or in any other
authority cited by the State gainsays this result.
The State attempts to discount the importance of Fonfa at
pages 24 and 25 of its brief by arguing that the district court
acted illogically in not following the “analytical framework used
by the Fonfa Court." New York argues that after recognizing that
"the passage of legislation is an act only performed by the sover-
eign,” the lower court failed to consider "whether the enactment
of the curfew was undertaken by the State in a sovereign capacity
or was rather the action of a proprietor which incidentally is
also a sovereign." State's brief at 24. The illogic, however,
lies not with the district court's reasoning, but with that of the
State. The State suggests only two possible causes of action that
Beechcraft could bring against it for money damages, i.e., breach
of contract and de facto appropriation. Yet neither has anything
to do with the State acting in a proprietary capacity. The power
to make contracts is not an aspect of property law, and the power
of a state to acquire property by virtue of its police power or
its power of eminent domain is exclusively sovereign in character
and not proprietary. 26 Am. Jur. 2d (1966) $3 pp. 641-42. Insofar
as New York contends that the imposition of a curfew can support a
breach of contract or a de facto taking claim, it is a
non sequitur to talk in terms of the State imposing a curfew in
its capacity as a proprietor.
The State's reliance on Drake v. State of New York, 97 Misc.
2d 1015, 416 N.Y.S. 2d 734 (Ct. Cl. 1979), aff'd, 75 App. Div. 2d
1016, 432 N.Y.S. 2d 676 (4th Dept. 1980), fails to clarify the
ambiguity of its argument on this point. At issue in Drake was
whether the State, as the owner of park teed: deed a duty of care
to protect users of the park from ambush by indians illegally
occupying the land. The suit was one for tortious conduct, not
for breach of contract or for de facto taking.
Indeed, even if the State could construct a cause of action
that Beechcraft might bring based upon the curfew being the
improper action of the State in its role as airport proprietor,
the case would fail. As noted earlier, both Beechcraft and the
- 36 -
United States contend that the Contact Clause of the Constitution
renders New York's efforts to take over ownership of Republic
Airport void ab initio. Poindexter v. Greenhow, 114 U.S. 270, 288
(1884). A cause of action pitched on the State's conduct as owner
of Republic, therefore, fails at the start. —
The conclusion reached by the lower court that Beechcraft's
lawsuit is exclusively one about business injury caused by an
unconstitutional state law is undeniably correct. Under the Court
of Claims analysis of its jurisdiction in Fonfa, supra, and cited
authorities, the lower court was correct in concluding that
Beechcraft has no remedy at law against the State for money
damages. The district court's finding of irreparable injury was
thus proper and should not be set aside.
*/ The court below did not reach Beechcraft's Contract Clause
argument preferring, instead, to limit its analysis to Supremacy
Clause issues. United States v. State of New York, supra, 552
F. Supp. at 262-63, J.A. 215. The district court did, however,
decide adversely to Beechcraft the issue of whether New York was
acting in its police power capacity or its proprietary capacity
when enacting the curfew into law. Beechcraft had urged that
New York was only acting under its police power role. The
district court concluded that New York acted simultaneously under
both capacities. 552 F. Supp. at 264, J.A. 218-19. The lower
court's ruling only goes to the power relied upon by the State to
pass the challenged legislation. It does not reach the question
of whether the end result of using that power was denied by virtue
of the Contract Clause.
Insofar as the State seeks to rely on the lower court's
ruling, New York must concede that its suggested de facto taking
cause of action lacks merit since such an action must be predi-
cated on the assumption that the State acted under its power of
eminent domain. The district court, however, found only that
New York acted under its police and propietary powers.
= 37 -
ap 4,
rT
Ifill. HAVING FOUND THAT BEECHCRAFT HAD
NO REMEDY AT LAW AGAINST NEW YORK,
' THE LOWER COURT CORRECTLY FOUND
THAT BEECHCRAFT HAD SHOWN
IRREPARABLE INJURY.
A. The Absence Of A Legal Remedy For Money
Damages Constitutes Irreparable Injury.
Assuming Beechcraft was indeed without a legal remedy for
damages against New York, the State argues in the alternative that
the lower court erred in concluding that Beechcraft had also
satisfied the irreparable injury prong of the test for preliminary
injunctive relief simply because it could it recover damages from
the State. The district court's action, however, of merging the
concept of an adequate remedy at law with that of irreparable
injury was proper under the circumstances of this case and is not
a ground for reversal.
New York correctly observes that long-standing Supreme Court
precedent on the granting of injunctive relief requires the exist-
ence of "irreparable harm and the inadequacy of legal remedies,"
Beacon Theatries v. Westover, 359 U.S. 500, 506-507 (1959). The
United States also does not take issue with New York's characteri-
zation of the lower court's ruling as one which implicitly found
both considerations satisfied once it concluded that the Eleventh
Amendment barred a monetary recovery by Beechcraft. The State
errs, however, when it contends that the lower court was wrong to
undertake this merger. State's brief at 28.
aS
Irreparable injury in the context of a preliminary injunction
is injury which will occur before the trial court can render judg-
ment on the grant of a permanent injunction and which cannot later
be remedied by an action at law. Thus in a suit against the State
of Louisiana to enjoin the imposition of an oil tax, the Supreme
Court found that plaintiff's inability to recoup payments pendente
lite of the disputed tax from the State, constituted grounds for a
preliminary injunction and, thus, a showing of irreparable injury.
Ohio Oil Co. v. Conway, 279 U.S. 813 (1929). Relying on Ohio Oil,
the United States District Court for the Northern District of
Alabama has noted in Int'l Assn. of Firefighters v. City of
Sylacauga, 436 F. Supp. 482, 492 (N.D. Ala. 1977):
It is well settled that a federal court
should not issue an injunction unless there is
both irreparable injury and lack of an
adequate remedy at law. If an injury cannot
remedied at law, because damages
the injur s genera e rreparable.
Thus, the requirements o rrepar e injur
and lack of adequate legal remedy merge.
(Citations omitted.) (Emphasis added.) The appropriateness of
merging the requisites of an adequate remedy at law with irrepar-
able injury has been favorably noted by former Judge Mulligan of
this Court in a law review article on preliminary injunctions in
=. 39 «=
*
the Second Cieoekt. 43 Brooklyn L-Rev. 831, 838 (1977). In
his treatment of the matter, he cited with approval the following
dicta of the United States District Court for the Northern
District of Texas in Mesa Petro. Co. v. Aztec Oil & Gas Co., 406
F. Supp. 910, 913 (N.D. Tex. 1976):
There is a great overlap among these
standards [for preliminary injunctive relief)
partly concealed by their seriatim listing.
And with irreparable injury the overlap may be
almost complete at least as to the ‘adequacy of
the remedy at law’... If, for example, money
damages can make the applicant whole, the
remedy at law is adequate and the injury is not
irreparable.
In the case at bar, Beechcraft cannot be made whole for its
anticipated damages because of the Eleventh Amendment. On the
precedent of the foregoing authorities, it was correct for the
district court to conclude that Beechcraft had satisfied the
requisite showing of irreparable injury in light of its inadequate
legal remedy.
*/ The theme of Judge Mulligan's article was that the requisite
of irreparable injury should be satisfied before injunctive relief
is granted notwithstanding the possible inference from Sonesta
Hotels Corp. v. Wellington Assoc., 483 F.2d 247 (2d Cir. 1973),
that the Second Circuit had abandoned the requirement. The
Circuit subsequently made clear that irreparable injury is, |
indeed, a mandatory requisite for injunctive relief. See, Sperry
Int'l Trade v. Gov't of Israel, 670 F.2d 8, ll (2d Cir.
982).
The State argues that under such a result, one dollar in
damages would satisfy the requirement of irreparable injury. The
. short answer to this contention is that one dollar would likely
not qualify as a real harm in the sense the word is used in
measuring the need for injunctive relief. And even if it were to
qualify, the normal balancing of equitable factors would propor-
tionately reduce the significance of the irreparable injury
standard in the overall equation of relief. As noted also by the
court in Mesa Petroleum, supra, and cited*with approval by former
Judge Mulligan,
the courts have added as a measure, the
"balancing' of equities.' This is probably no
more than another means of expressing an
ultimate conclusion that, all things
considered, the final determined relief is
proper.
406 F. Supp. at 913. As will be noted in the next section of this
argument, Beechcraft's injury as measured by New York is on the
order of $300,000, and as measured by Beechcraft, on the order of
many millions of dollars. The plaintiff's irreparable injury
under either standard is substantial.
New York also attacks the lower court's merger of the related
standards for equitable relief as turning “the Eleventh Amendment
on its head." State's brief at 31. The State argues that since
Beechcraft cannot sue the State for damages, it has no compensable
injury which it can label as irreparable harm for purposes of
securing injunctive relief. The argument falls of its own weight.
« Ate
The fact that Beechcraft cannot sue New York for damages
resulting from the Republic curfew is what makes Beechcraft's
injury irreparable. The fact that the Eleventh Amendment is the
causation of the inadequate legal remedy is irrelevant. Such was
precisely the point made by the Supreme Court in Ohio Oil Co. v.
Conway, supra, where the Court noted in the context of an analo-
gous Eleventh Amendment setting:
If the tax be paid during the pendency of the
suit, and the statute be adjudged invalid by
the final decree, the plaintiff will be remedi-
less. The laws of the State afford no remedy
whereby restitution of the money so paid may
be enforced, even where the payment is under
both protest and compulsion.*/
279 U.S. at 815. The Court concluded that the State's immunity
from suit gave rise to plaintiff's entitlement to a preliminary
injunction.
More recently, the Court has had occasion to observe in the
context of a civil rights action against a state and its officers
that a state's "immunity from damages does not ordinarily bar
equitable relief as well." Wood v. Strickland, 420 U.S. 308,
*/ The Court's emphasis on the absence of an adequate legal
remedy in state court as opposed to federal court appears mis-
placed in light of its later holding in DiGiovanni v. Camden Fire
Insurance Ass'n, 296 U.S. 64, 69 (1935). See discussion supra at
Pp. 21-22. Regardless of whether DiGrovanni would require
emphasis on the adequacy, vel non, of an adequate legal remedy in
federal court, the same result obtains that the State's immnity
from suit for the recoupment of money was not only not a defense
to a preliminary injunction, but instead was the reason to issue
one.
- 42 -
314 n. 6, reh. denied, 421 U.S. 921 (1975). Accord, Tayyari v.
New Mexico State Union, 495 F. Supp. 1365, 1370 (D.N. Mex. 1980).
New York's argument appears to confuse the appropriateness of
granting injunctive relief against states which seek to expend
funds from the State's treasury, In re Ayers, 123 U.S. 443 (1887),
with those that do not, Ex Parte Young, 209 U.S. 123 (1908). The
latter type of injunction is not barred by the Eleventh Amendment.
See generally, Edelman v. Jordan, 415 U.S. 651 (1974).
The preliminary injunction at issue in this appeal is prohib-
itory in nature; it restrains New York and its officers from
implementing a state law banning nighttime flights at an airport.
Insofar as the State has decided, regardless of the litigation, to
leave runway lighting, navigational equipment, and crash-fire-
rescue services in operation throughout the night,—
permitting planes to use the airport at night will not cause the
increased expenditure of state Seneatinn. The State does
not contend the contrary. As a result, enjoining the curfew will
neither offend the Eleventh Amendment, nor as the State contends,
*7 Dfnds* Mem of Law In Opposition To The Proposed Intervenor's
Motion For A Preliminary Injunction, p. 25 n.(*), filed Sept. 30,
1982.
**/ Even if modest expenditures incidental to the injunction
occurred, they would not render the relief fatal under the
Eleventh Amendment. Edelman v. Jordon, supra, 415 U.S. at
667.
- 43 -
require it to “surrender the very immunity guaranteed by the
-
Eleventh Amendment." State's brief at 32.
B. Assuming A Legal Remedy Exists For
Beechcraft, It Would Not Be Adequate
Even assuming Beechcraft could sue New York for business
revenues lost as a result of the State's curfew, the remedy would
not be adequate to compensate the plaintiff both because
New York's actions violate important constitutional rights and
because lost revenues and accompanying good will are too difficult
to measure.
*/ The State's reliance on DiGiovanni v. Camden Fire Insurance
Assoc., supra, is also of no assistance. At issue in the case was
whether, for purposes of exercising a federal court's equity
jurisdiction, a party seeking injunctive relief could demonstrate
the inadequacy of a legal remedy in federal court on the ground
that the court lacked subject matter jurisdiction over the legal
cause of action. The Supreme court said no, noting that the "want
of the jurisdictional amount in controversy which deprives a
federal court of its authority to act at law is not ground for .
invoking its equity jurisdiction." Id. at 69-70. This result has
no bearing on whether a state's immunity from monetary liability
defeats a claim for injunctive relief since, as noted supra, a
state's immunity is no defense to an injunction which does not
seek the expenditure of revenues from its fisc. As the Court
noted in Di Giovanni, “whether a suetor is entitled to equitable
relief in federal courts... is strictly not a question of
jurisdiction in the sense of the power of a federal court to act."
296 U.S. at 69.
The court below undeniably had the power to enjoin New York's
curfew, and Beechcraft's showing of no adequate legal remedy
coupled with the showing of likely success on the merits was the
justification for exercising that power.
@ 44
l. Constitutional Injury
As noted earlier, the entire substance of each plaintiff's
case against New York, including Beechcraft's, is that the State
has acted unconstitutionally in its efforts to take over Republic
Airport and impose a nighttime curfew. “When an alleged depriva-
tion of a constitutional right is involved, most courts hold that
no further showing of irreparable injury is necessary." Wright &
Miller, Federal Practice and Procedure, §2948, p. 440; Planned
Parenthood v. Citizens for Com. Action, 558 F.2d 861, 867 (8th
Cir. 1977); A Quaker Action Group v. Hickel, 421 F.2d 1lll, 1116
(D.C. Cir. 1969); Keefe v. Geanakos, 418 F.2d 359, 363 (lst Cir.
1969). And when a person clearly establishes by undisputed
evidence that he is being denied a constitutional right, a
"district court has no discretion to deny relief by preliminary
injunction." Henry v. Greenville, 284 F.2d 631, 633 (4th Cir.
1960). See generally, Battle v. Municipal Housing Authority for
the City of Yonkers, 53 F.R.D. 423 (S.D. N.Y. 1971); Lollis v.
New York State Dep't of Social Services, 322 F. Supp. 473, 483
(S.D. N.Y. 1970). While a bare allegation of unconstitutional
conduct alone does not demand a finding of irreparable injury,
certainly a finding of unconstitutional conduct does.
Such is the situation in the case at bar where the lower
court affirmatively found unconstitutional conduct by New York.
In considering Beechcraft's contention that the curfew constituted
unconstitutional conduct preempted by Congress for the FAA and
thus violative of the Supremacy Clause, the district court held:
o 2 <
Here, the Court finds that Article 15's curfew
is overbroad, unreasonable and arbitrary.
ak ae a*
...-the curfew provision of Article 15 is
overbroad and constitutionally impermissible
in view of federal pre-emption of reguiations
concerning noise arenas in flight.
552 F. Supp. at 265, J.A. 220-21.
This action stands at a point far advanced from the pleadings
stage where only accusations of unconstitutional conduct are
found. A full record based on adversarial affidavits, and con-
flicting federal and state statutory requirements was before the
court at the time ir reached its finding of unconstitutional
— =
conduct.~
a7 New York argues that to the extent the lower court agreed
with Beechcraft's claims of significant financial losses, the
State should have been granted an evidentiary hearing to dispute
the claims. State's brief at 41 n.(*). The State, however, never
requested a hearing on Beechcraft's motion for a preliminary
injunction. It was only in the context of its motion for recon-
sideration that New York asked for a hearing.
It is the law of this Circuit that if a party who resists a
preliminary injunction "is unwilling to have the issuance of a
temporary injunction decided on affidavits, he must make his
objection known; he may not gamble on the judge's accepting his
affidavits rather than his adversary's and then seek a reversal if
the result is disappointing." Sec v. Frank, 388 F.2d 486, 493 n.6
(24 Cir. 1968) (emphasis added); accord, Jacobson & Co., Inc. v.
Armstrong Cork Co., supra, 548 P.2d at 442. New York aia not
Object to the lower court's original resolution of Beechcraft's
motion for a preliminary injunction on affidavits. On the con-
trary, it placed strong reliance on the affidavit of its own wit-
ness, Clarence Cook, Director of the Aviation Bureau of the State
Department of Transportation. That New York gambled and lost is
not sufficient ground to retry the same fact contentions with live
testimony.
Additionally, the benefits of live testimony have been
adequately subserved by the State's deposition of Beechcraft's
Vice Pres t submitted by the State as an exhibit of record.
Such has been found by this Court to militate against the need for
an evidentiary hearing in the context of a preliminary injunction
contest. Armstrong Cork, ibid.
New York does not appeal this finding. The record remains unchal-
lenged that all plaintiffs, including Beechcraft, have been denied
important constitutional protections. On the basis of the cited
authorities, it would have been correct for the district court to
have found the existence of irreparable injury even if Beechcraft
had an ultimate legal remedy against New York for damages.
2. Financial Injury
It would also have been correct for the lower court to have
found irreparable injury solely on the basis of the magnitude of
Beechcraft's anticipated financial losses. :
Contrary to defendants' contention at page 36 of their brief,
a corporation which seeks preliminary injunctive relief in the
Second Circuit need not show the prospect of certain bankruptcy to
satisfy this Court's requisite of irreparable injury. It is
enough to show loss of significant business opportunities, Semmes
Motors, Inc. v. Ford Motor Company, 429 F.2d 1197 (2d Cir. 1970);
loss of customer good will, son & Col, Inc. v. Armstrong
Corp. Co., 548 F.2d 438 (2d Cir. 1977); or public confusion over a
product's owner, Warner Bros., Inc. v. Gay Toys, Inc., 658 F.2d 76
(2d Cir. 1981).
While the United States deteis to Beechcraft to discuss more
fully the specific nature of irreparable harm it will suffer from ;
New York's imposition of a blanket curfew at Republic, the govern-
ment does note that the undisputed record places Beechcraft's
projected losses from the curfew at an amount far in excess of the
$300,000 claimed by the State. State's Brief at 38.
The November 12, 1982 affidavit of Beechcraft!s Vice
President, Allen K. Pepin, J.A. 405, points out that the State
erroneously places excessive emphasis on revenues derived from
tenant customers for hanger and tie-down service. Pepin affd't
gq 3, J.A. 406. He states that the "imposition of a curfew at
Republic Airport would have a domino effect upon Beechcraft East,
Inc.'s business (of selling aircraft)," ibid, since potential
customers for the purchase of aircraft are those who are satisfied
tenants in residence at Republic. Pepin affdv't 44, J.A. 406. A
curfew will cost Beechcraft the loss of many of these tenants who
will move their planes to airports open at night, 552 F. Supp. at
261, J.A. 210-212. Mr. Pepin testifies that in light of the
serious downturn in the aircraft industry due to the recession (as
evidenced in part by the company's current operating deficit),
lost aircraft sales resulting from the curfew will require the
plaintiff "to discontinue its operation at Republic Airport.”
Pepin affdv't qq 8 & 9, J.A. 407-08. Py.
To lose customers, and ultimately a business, means far more
than dollars and cents. It means frustration, loss of self-
esteem, and doubt in the legitimacy of the free enterprise system.
Mr. Pepin's testimony serves as the best evidence of
this point:
Q. Now, the point of this paragraph, was to
demonstrate that if the curfew goes into
effect, your business is going to be severely
impacted in terms of the current amount of
money that you already expended, is that right?
o 46 «
A. Yes, that is correct.
Q. Por the fuel trucks that you purchased,
could you sell those trucks?
A. Well, everything could be sold. The
question is, I don't want to sell the fuel
trucks. want to t fuel in the customer's
airplanes, for = 3G I bought it. And, I will
never get my money out o Es
Dep. tr. at p. 39B (emphasis added). As this Cotrt has noted in
Semmes Motors, Inc. v. Ford Motor Co., supra, 429 F.2d at 1205:
But the right to continue a business in which
[plaintiff] had engaged for twenty years and
into which his son had recently entered is not
measurable entirely in monetary terms; [plain-
tiff] wants to sell automobiles, not to ie
on the income from a damages award.
(Emphasis added).
Beechcraft's showing of irreparable economic harm has not
been successfully countered by the State's discovery. Even
assuming the waiver of immunity by the State, such would not
constitute an adequate remedy at law for Beechcraft. Under these
circumstances, it would have been proper for the district court to
have found a showing of irreparable injury even if an ultimate
damages remedy had existed.
- 49 -
CONCLUSION
The preliminary injunction iesued by the lower court
enjoining unconstitutional state conduct was providently granted
and should not be set aside on this appeal.
| Respectfully submitted,
OF COUNSEL: J. PAUL McGRATH
Assistant Attorney General
KENNETH N. WEINSTEIN
Office of General Counsel DAVID J. ANDERSON
U.S. Department of R. JOHN SEIBERT
Transportation . EUGENE A. BEATTY
Washington, D. C. 20590
Attorneys, Department of Justice
LEONARD A. CERUZZI Civil Division
RICHARD W. DANFORTH 9th & Pennsylvania Avenue, N.W.
ROBERT F. EISENGREN Washington, D. C. 20530
Office of Chief Counsel Telephone: (202) 633-3395
Federal Aviation
Administration Attorneys for Plaintiff-Appellee
Washington, D. C. 20591 United States
= 80 «
IN THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
NO. 62-6343
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
-and-
BEECHCRAFT EAST, INC.,
Intervenor-Plaintiff-Appellee,
_ sagainst-
THE STATE OF NEW YORK; and WILLIAM HENNESSEY,
as Commissioner of the Department of
Transportation of the State of New York,
Defendant-Appellants.
AIRCRAFT OWNERS AND PILOTS ASSOCIATION,
Plaintiff-Appellee,
‘-against-
WILLIAM HENNESSEY, as Commissioner of the
Department of Transportation of the State
of New York.
ON APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF NEW YORK
CERTIFICATE OF SERVICE
I hereby certify that on this 4th day of March, 1983, copies
of the United States' Brief as Plaintiff-Appellee were served on
all parties of retord by mailing two copies thereof, postage
prepaid, to the following counsel of record:
*
Barrie L. Goldstein, Esq.
Assistant Attorney General
for the State of New York
Two World Trade Center
Room 49-100
New York, New York 10047
James J. von Oiste, Esq.
505 Main Street
Port Jefferson, New York 11777
John S. Yodice, Esq.
Suite 1235 West
7315 Wisconsin Ave., N.W.
Bethesda, Maryland 20814
Mark L. Heller, Esq.
50 Chapel Street.
Albany, New York 12207
Department of Transportation
Albany, New York 12232
Ross Pustere, Esq.
State Campus
Office of General Counsel
1220 Washington Avenue
R. JOAN} SEIBERT
me
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.