Naples v. Stefanelli
2013 U.S. Dist. LEXIS 133651
E.D.N.Y2013Background
- James and Jimmy Naples owned Island Biofuel and JNS Industries, collecting and reselling waste vegetable oil; ESI (owned by Joseph and David Parisi) was a competing renderer.
- Plaintiffs allege ESI solicited Plaintiffs’ customers, removed Plaintiffs’ locked containers, and (after obtaining a key) siphoned oil and took containers and locks, causing business losses.
- On Sept. 7, 2011 Jimmy was stopped, arrested, and his truck searched by Suffolk County officers (including Officer Stefanelli); bolt cutters were seized and later Jimmy was criminally charged for allegedly cutting an ESI lock.
- Plaintiffs allege Stefanelli colluded with ESI (including being paid by ESI, appearing at ESI facility, and directing police/DEC action), leading to searches, tickets, prosecution, and regulatory closure of Plaintiffs’ garage; Plaintiffs later exited the business.
- Plaintiffs sued under 42 U.S.C. § 1983, RICO, New York statutory and common law (Donnelly Act, NYGBL § 349, torts including IIED, conversion, tortious interference, libel/slander), naming County, State/DEC, ESI and individuals.
- Court disposition on motions: County motion GRANTED IN PART/DENIED IN PART; State defendants dismissed on Eleventh Amendment grounds; ESI motion GRANTED IN PART/DENIED IN PART. Several claims dismissed with prejudice, others without and limited leave to amend granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Municipal liability (Monell) for County failures to train/supervise Stefanelli | County’s supervisory failures and ignored complaints caused constitutional deprivations | Monell requires pleading an official policy/custom or deliberate indifference with causal link | §1983 Monell claims against County dismissed without prejudice for failure to plead municipal policy/custom or causal link; leave to replead granted |
| Eleventh Amendment sovereign immunity (State & DEC) | Plaintiffs sought §1983, RICO, and state-law relief against State/DEC | States and state agencies are immune from suit in federal court absent waiver or abrogation | All claims against State defendants dismissed with prejudice under Eleventh Amendment |
| RICO: predicate acts and pattern (against County and ESI) | ESI committed theft, extortion, money laundering over time amounting to a RICO enterprise and pattern | Municipalities cannot form required criminal intent; alleged predicate acts and continuity insufficient | RICO claims against County dismissed with prejudice (municipalities cannot be RICO defendants); RICO against ESI dismissed without prejudice for failure to plead a pattern/continuity |
| §1983 liability of private defendants (ESI) via conspiracy with state actor | ESI conspired with Officer Stefanelli (paid him) to effect arrests, searches, and prosecutions, making ESI a state actor | Supplying information or summoning police alone is insufficient to make private party a state actor | Allegations of payment and active collaboration were sufficient at pleading stage; §1983 conspiracy and false arrest and illegal-search claims against ESI survive dismissal motion (malicious prosecution dismissed without prejudice because prosecutions remain pending) |
| State-law claims (Donnelly Act, NYGBL §349, conversion, IIED, fraud, extortion, theft) | Various tort and statutory claims for business interference, deceptive practices, conversion, IIED, fraud, extortion | Defendants argued failure to plead required elements, notice-of-claim defects as to County, and some claims are legally improper or inadequately pled | Court dismissed Donnelly Act claim without prejudice (no antitrust injury pled); NYGBL §349 claim dismissed with prejudice (not consumer-oriented); conversion, IIED, tortious interference, libel/slander survive; fraud and extortion and theft dismissed with prejudice; state claims against County dismissed for failure to plead notice of claim |
Key Cases Cited
- Monell v. N.Y.C. Dep’t of Soc. Servs., 436 U.S. 658 (1978) (municipal liability under §1983 requires policy/custom or deliberate indifference causing constitutional violation)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible on its face)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (conclusory allegations are insufficient; two-pronged plausibility standard)
- H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 (1989) (RICO pattern requires continuity — closed- or open-ended)
- Will v. Michigan Dep’t of State Police, 491 U.S. 58 (1989) (states and state officials sued in official capacity are not "persons" under §1983)
- Town of Castle Rock v. Gonzales, 545 U.S. 748 (2005) (no constitutional right to state investigation/enforcement)
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) (definition and scope of racketeering activity under RICO)
- Board of County Comm'rs v. Brown, 520 U.S. 397 (1997) (municipal liability requires that municipality be the moving force behind deprivation)