Lost Lake Holdings LLC v. Town of Forestburgh
7:22-cv-10656
| S.D.N.Y. | Dec 28, 2023Background
- Plaintiffs, Hasidic Orthodox Jewish developers, purchased the Lost Lake project in Forestburgh, NY, intending to build a large housing development.
- The property was originally approved for an "upscale recreational resort" by a previous owner (Double Diamond) after a thorough environmental review and rezoning process.
- Upon acquiring the project, plaintiffs alleged the Town acted to thwart development—revoking/denying permits, demanding further SEQRA review, and filing an injunction—allegedly motivated by discrimination.
- Plaintiffs sought a preliminary injunction to stop the Town from blocking development, requiring additional review, or prosecuting the state court action against them.
- The court weighed the request for an injunction and assessed whether plaintiffs faced irreparable harm and likelihood of success.
Issues
| Issue | Plaintiffs' Argument | Defendants' Argument | Held |
|---|---|---|---|
| Ripeness of claims | Claims are ripe because Town's actions are final and futile to pursue further remedies | Not ripe—must exhaust variances, appeals, or Article 78 review | Claims are ripe; court has jurisdiction |
| Irreparable harm (constitutional) | Violations of constitutional rights, including First Amendment and free exercise, are per se irreparable | Any harm is purely economic and compensable by damages | No irreparable harm as rights aren't directly infringed—injuries are economic |
| Irreparable harm (economic/statutory) | Delay and prevention of development cause irreparable harm; possible presumption under FHA/§1982 | Only economic injury, compensable by damages, and harms aren't irreparable | No irreparable harm because losses can be remedied with money damages |
| Standard for preliminary injunction | Lower standard due to constitutional/statutory violations | High standard—mandatory injunction altering status quo must meet clear likelihood of success | Injunction denied; high standard unmet without showing of irreparable harm |
Key Cases Cited
- Elrod v. Burns, 427 U.S. 347 (1976) (loss of First Amendment freedoms constitutes irreparable injury)
- Sussman v. Crawford, 488 F.3d 136 (2d Cir. 2007) (preliminary injunction is extraordinary remedy, must show irreparable harm)
- Savage v. Gorski, 850 F.2d 64 (2d Cir. 1998) (economic loss not irreparable unless money damages are inadequate)
- Borey v. Nat'l Union Fire Ins. Co. of Pittsburgh, 934 F.2d 30 (2d Cir. 1991) (economic harm generally does not constitute irreparable injury sufficient for injunction)
- Kamerling v. Massanari, 295 F.3d 206 (2d Cir. 2002) (irreparable harm must be actual and imminent)