Opinion
00 CIV. 4288 (VM)
August 28, 2001
DECISION AND ORDER
Plaintiff Miriam Burgos commenced an action on behalf of herself and all persons similarly situated (collectively "Burgos" or the "Complainants") in New York State Supreme Court, Bronx County, alleging that the New York City Marshals (collectively the "Marshals") continue to collect excessive and unauthorized fees from motor vehicle owners whose cars are towed pursuant to the "Scofflaw Towing Program." The Marshals subsequently removed the action to this Court, after which Burgos filed an amended complaint. The Marshals move to dismiss the action pursuant to Rules 9(b), 12(b)(6) (b)(7) and Rule 19 of the Federal Rules of Civil Procedure. For the
Although the filing of the present motion to dismiss pre-dated the filing of the amended complaint, the Court, with the understanding of the parties, treats the motion as one to dismiss the amended complaint. reasons set forth below, the Marshals' motion to dismiss is granted.
I. FACTS AND PROCEDURAL HISTORY
In August 1999, New York City Marshal Alfred E. Locascio (hereinafter "Locascio") seized Burgos's car for a judgment against her for unpaid parking tickets. Locascio towed her car to J S Recovery Corporation in the Bronx, NY. Her unpaid parking violations totaled $326.70, and Burgos asserts that Locascio charged her a set of "unauthorized fees" in addition to the outstanding parking tickets. In particular, as a condition for redeeming her vehicle, Locascio charged her a tow fee of $150.00, a Marshal's execution fee of $45.00 and a poundage fee of $26.08.
Based on these events, Burgos filed an action in state court, which the Marshals removed to this Court. Subsequently, Burgos filed an amended complaint, presently the subject of the Marshal's motion to dismiss.
The crux of the amended complaint is that the Marshals, without authority, overcharged Burgos and the Complainants. Burgos alleges that beginning on or about 1990, the Marshals began charging excessive, unauthorized fees consisting of: (1) a $45.00 administrative fee; (2) a $150.00 "tow fee"; (3) an "excess storage fee" of an unspecified sum; and (4) in certain cases, a $75.00 "paid in field" (hereinafter "PIF") charge of $75.00. (Am. Compl. ¶¶ 25-36). She contends that there is no statute or law that authorizes the Marshals to charge these fees and that these practices violate applicable statutes and laws. (See id. ¶ 37)
Burgos claims damages for unjust enrichment, "money had and received," fraud, coercion/restitution, violations of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, and violations of New York General Business Law §§ 349 and 350. All of her claims, however, are premised on the allegation that the Marshals' collection of fees is unauthorized. Burgos seeks in excess of $100,000,000.00 in compensatory and punitive damages and a permanent injunction restraining the Marshals from collecting these allegedly unauthorized fees.
The Marshals filed a motion to dismiss on three principal grounds: 1) failure to state a cause of action pursuant to Rule 12(b)(6); 2) failure to plead fraud with particularity pursuant to Rule 9(b); and 3) failure to join an indispensable party, the City of New York and The City of New York, Department of Finance, pursuant to Rule 12(b)(7) and 19.
The Marshals argue that there is no legal basis for Burgos's claims regarding "unauthorized fees." (See Defendants' Memorandum of Law in Support of Motion to Dismiss, dated Sept. 28, 2000 (hereinafter "Defendants' Memorandum"), at 6). The Marshals rely on exhibits attached to an accompanying affidavit of defense counsel, Kenneth D. Litwak, including the New York City Marshals Handbook of Regulations (the "Handbook") and the New York City Department of Finance. Standard Operating Procedures for the Marshal Vehicle Seizure Program ("SOP"). According to the Marshals, these documents establish that the collection of the alleged "unauthorized fees" was indeed permissible under an explicit statutory and administrative framework, and therefore, the complaint must be dismissed pursuant to Rule 12(b)(6). See Defendants' Memorandum at 7).
The Marshals also argue that the complaint should be dismissed in its entirety because it (1) fails to satisfy the particularity requirement of Rule 9(b) with regard to Burgos's fraud and RICO claims; (2) lacks objective facts to support Burgos's claims; and (3) provides only conclusory allegations and speculation, falling short of the requirements of Rule 9(b). (See id. at 8-9)
The Marshals further contend that Burgos has failed to properly plead any of the "prohibited activities" of RICO under 18 U.S.C. § 1962 (a), (b), (c), or (d). (See id. at 11). First, they argue that Burgos, by simply asserting boilerplate conclusory statements, has failed to properly plead the predicate acts of mail and wire fraud against any of the Marshals in the case. (See id. at 13). Second, the Marshals contend that the alleged predicate acts do not support a pattern of racketeering since the "unauthorized fees" are in fact lawful collections. (Id.) Third, the Marshals assert that Burgos has not properly pleaded the enterprise element of a RICO claim because she has failed to provide any objective evidence that any one alleged enterprise has an existence separate and apart from the alleged pattern of activity. (See id. at 14). Fourth, Burgos lacks standing to assert a violation of 18 U.S.C. § 1962 (a) because she has failed to allege that she and the other complainants have been injured from the use or investment of any racketeering income, as opposed to the alleged "racketeering activity" itself. Finally, with regard to sections 1962(b), (c), and (d), the Marshals contend that Burgos has simply incorporated boilerplate statutory language and has failed to provide the detail necessary to state such claims. (See id. at 15-16)
The Marshals argue that Burgos's remaining allegations, including unjust enrichment, money had and received, conversion, injunction, and deceptive business practices, fail to state a claim for which relief may be granted, and therefore must be dismissed. ( See id. at 16). Burgos's unjust enrichment claim is premised on her assertion that certain fees charged by the Marshals were unauthorized. The Marshals maintain that such fees are authorized and that there is no basis for the return of money to the claimants. (See id. at 17). The Marshals advance a similar argument with regard to Burgos's claim of monies had and received, namely, that no cause of action can be stated where a statute or regulation requires the collection of the money sought to be returned.Id.
The Marshals further argue that Burgos's claims under New York General Business Law §§ 349 and 350 fail because these provisions are not intended to cover public officers collecting judgements on behalf of the City. Rather, the Marshals assert that these statutes were intended to protect consumers from deceptive practices of businesses when providing services. (See id. at 20). Furthermore, the Marshals argue that these allegations also lack the specificity required for claims sounding in fraud. (See id. at 20-21)
Finally, the Marshals contend that this action must be dismissed under Rule 12(b)(7) for failure to join an indispensable party as provided by Rule 19. (See id. at 21). The Marshals assert that the City and its Department of Finance are indispensable parties to this action. They argue that in these parties' absence, the Marshals could incur multiple or otherwise inconsistent obligations if they are found liable and enjoined from collecting judgment fees. Furthermore, the Marshals contend that the interests of the City and the Department of Finance will be impaired or impeded if this matter proceeds without them. (See id. at 23)
II. THE SCOPE OF THE COURT'S INOUIRY UNDER RULE 12(b)(6)
The issue before the Court is whether the amended complaint states a set of facts under which the Marshals can be held liable to return fees collected pursuant to the Scofflaw Towing Program to Burgos and similarly situated Complainants. The dispositive inquiry is whether such fees are authorized by law. In order to address that issue, however, this Court must examine materials outside of the amended complaint itself, particularly statutes and other documents presented by the Marshals in affidavits and exhibits in support of their motion. This raises the question of whether the 12(b)(6) motion should be converted into a motion for summary judgment. The last sentence of Rule 12(b)(6) states:
If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
In Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000), the Second Circuit held that the district court erred in ruling on a 12(b) (6) motion when it considered affidavits and exhibits outside of the pleadings submitted by the defendants. The Court of Appeals noted that vacatur is required even where the district court's ruling simply "`mak[es] a connection not established by the complaint alone' or contains an `unexplained reference' that `raises the possibility that it improperly relied on matters outside the pleading in granting the defendant's Rule 12(b) motion.'" Id. at 84-85 (citations omitted)
Similarly, in Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99, 106 (2d Cir. 1999), the Second Circuit vacated the district court's ruling because the court "improperly reached beyond the pleadings to make adverse factual determinations in dismissing [plaintiff's] complaint under Fed.R.Civ.P. 12(b)(6)." The Circuit Court held that before the district court could credit defendants' factual assertion in their moving papers and rule on that basis, it was required to convert the 12(b)(6) motion into a motion for summary judgment. See id.
Although it is apparent that a court may not "reach beyond the pleadings" in deciding a Rule 12(b)(6) motion, this Court concludes that it is possible to decide the present motion to dismiss, and permissibly avoid the requirement of conversion to a motion for summary judgment, because the documents the Marshals introduce to support dismissing the amended complaint are matters in the public record of which the Court may take judicial notice and because these documents are integral to resolving the present dispute. See Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 75 (2d Cir. 1998), cert. denied 525 U.S. 1103 (1999)
The Second Circuit has held that under certain circumstances a district court may rely on extrinsic material of public record, including case law and statutes, in considering a defendant's Rule 12(b)(6) motion to dismiss, and thus, it was not required to convert the motion to one for summary judgment. See id. (citing Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221, 1222 (D.C. Cir. 1993); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991) (in ruling on motion to dismiss, district court may consider documents of which the plaintiff had notice and which were integral to framing the underlying claim, even though those documents were not incorporated into the complaint by reference, in which event, "the necessity of translating a Rule 12(b) (6) motion into one under Rule 5 is largely dissipated."); Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991) (district court may examine public disclosure documents on 12(b)(6) motion)). Since the extraneous materials relied on by the Marshals include statutes, court orders and municipal regulations this Court is permitted to consider these materials as public records in deciding the Marshal's Rule 12(b)(6) motion.
Furthermore, in Cortec Industries. Inc. v. Sum Holding L.P., 949 F.2d 42, 44 (2d Cir. 1991), cert. denied 503 U.S. 960 (1992), the Second Circuit specifically held that "when a plaintiff chooses not to attach to the complaint or incorporate by reference a prospectus upon which it solely relies and which is integral to the complaint, the defendant may produce the prospectus when attacking the complaint for its failure to state a claim, because the plaintiff should not so easily be allowed to escape the consequences of its own failure."
In this case, the documents the Marshals proffered are integral and necessary in considering Burgos's claims. Assuming Burgos had no prior knowledge of them in framing the original complaint, she was put on notice of the relevant documents once the Marshals filed their motion and thus must have had them when framing the Amended Complaint. It is doubtful that Burgos was unaware of the statutes and rules relating to the disputed activities of the Marshals when she filed her complaint, and her failure to refer to these documents in her complaint is most likely a result of the adverse effect on her case that they might have. However, as articulated in Cortec Industries, Burgos's neglect should not preclude the Court from considering such public records. Furthermore, once the Marshals filed their motion, Burgos responded to the Marshal's submissions with additional statutes for the Court's consideration. She did not contest the Marshal's attachments, or move the Court to convert the motion into one for summary judgment. Rather, Burgos confronted the documents directly without denying prior notice of them, thus opening the door for the Court to consider these materials further.
The documents at issue are matters in the public record, Burgos has notice of them and they are integral to her complaint. Accordingly, the Court treats the present motion as one pursuant to Rule 12(b)(6).
III. THE STATUTORY AND REGULATORY FRAMEWORK FOR THE IMPOSITION OF TOWING FEES
As Burgos recognizes, the "linchpin" of the amended complaint in this action is that the Marshals overcharged her and the Complainants in connection with the towing of motor vehicles pursuant to the Scofflaw Towing Program for the collection of unpaid parking tickets. (See Plaintiff's Memorandum of Law in Opposition to Defendants' Motion to Dismiss, dated Oct. 31, 2000 (hereinafter "Plaintiff's Memorandum"), at 2). Therefore, all of Burgos's state law claims as well as her federal RICO action survive only if her contention that the fees were unauthorized is sustained. Because the Court finds that the Marshals were authorized to collect all fees in dispute, Burgos's claims are dismissed.
Under Section 1609(2) of the New York City Civil Court Act (hereinafter "Civil Court Act"), the New York State Appellate Division for the First and Second Judicial Departments are vested with the power to supervise the activities of the Marshals. That statute provides that "the Appellate Division shall promulgate rules and regulations concerning performance of official duties of marshals." See Civil Court Act § 1609(2) (McKinney 1987). In November 1975 and February 1976, the Appellate Division for the First and Second Department issued Joint Administrative Orders 453 and 456 concerning the supervision of Marshals. Joint Administrative Order 453 § 4(b) provides in part:
Any handbook of regulations for city marshals which may be promulgated by the Department of Investigation shall become effective upon the approval of both Appellate Divisions. Any substantial policy changes therein shall require similar approval. However, copies of any other changes therein by directive or otherwise shall be forwarded to the Appellate Divisions and such changes shall remain in full force and effect unless and until nullified by joint order of both Appellate Divisions.
App. to Handbook (Joint Administrative Order 453). Therefore, the Appellate Division, through Joint Administrative Order 453, explicitly gives the City's Department of Investigation authorization to promulgate the Handbook. The latest revision of the Handbook was approved by the Appellate Division on August 25, 1997. See Foreword to Handbook.
Chapter 10 of the Handbook concerns the seizure of motor vehicles and practices which must be followed by the Marshals pursuant to such seizures. § 10-2 provides:
City Marshals who enforce judgments for the City of New York, Parking Violations Operations (PVO), must follow the Standard Operating Procedures (SOP) promulgated by the Department of Finance. Failure to Comply with the SOP, or this Handbook, as applicable, may result in suspension or removal from the PVO program and disciplinary action against the marshal by the Department of Investigation.
The SOP, dated May 1995, provides a breakdown of the fees to be collected by the Marshals. These include:
(a) Judgment and interest (if any);
(b) Marshal execution fee not to exceed $45.00;
(c) Tow fee not to exceed $150.00 (plus tax, if applicable)
(d) Marshal's poundage (CPLR 8012(b)); and
(e) Storage fee, if any.
SOP, Part VI at 8. These are precisely the charges that Burgos contends are unauthorized.
The $45.00 dollar fee, which Burgos characterizes as unauthorized, is also reflected in § 8011(b) of the New York Civil Practice Law and Rules (hereinafter "CPLR"), which pertains to property executions:
1. For receiving an execution against property, entering it in the appropriate books, and return when required, ten dollars, in advance.
2. For levying upon property by virtue of an execution, ten dollars.
3. For making an inventory of property levied upon by virtue of an execution, ten dollars.
4. Mileage for services covered in paragraphs two and three of this subdivision, in advance, provided however, that where the services covered in such paragraphs are performed at the same time, there shall be only one mileage fee.
CPLR § 8011(b)
The additional $15.00 mileage fee is provided for in CPLR § 8012, and in the official schedule of fees issued in October 1995 by the Department of Investigation. (See Official Schedule of Fees of the New York City Marshals, Defendant's Notice of Motion, dated Sept. 28, 2000, Ex. E).
The Marshals are also entitled to the poundage fee contested by Burgos. § 2-3 of the Handbook addresses the levying of poundage fees:
A marshal is entitled to poundage of five percent (5%) of the sum collected by virtue of an execution or an order of attachment. A marshal is entitled to poundage upon the total amount collected, including fees and expenses. Poundage shall be computed at five percent (5%) of the sum due and actually collected, including fees, expenses, and interest, except in cases where a settlement is made after the levy or where the execution order is vacated . . .
Handbook at 146 (emphasis in original).
Poundage Fees are also expressly provided for in the SOP and in CPLR § 8012(b)(2) which states:
Where a settlement is made after a levy by virtue of an execution, the sheriff is entitled to poundage upon the value of the property levied upon, not exceeding the sum at which the settlement is made. Where an execution is vacated or set aside, the sheriff is entitled to poundage upon the value of the property levied upon, not exceeding the amount specified in the execution, and the court may order the party liable therefor to pay the same to the sheriff.
Burgos also challenges the PIF fee of $75.00. However, Part VII of the SOP specifically provides for such fee in the event that a vehicle is not towed, but is redeemed in the street. Section A reads:
Street Redemption: Accept payment offered by the debtor prior to the vehicle being towed. Collect the following:
1. The full judgment and interest on that judgment amount.
2. Marshal's execution fee not to exceed $45.00.
3. A payment not to exceed $75.00 (aborted towing) expense plus sales tax, if applicable.
4. Marshal's poundage (CPLR 8012(b)).
Burgos replies that the tow fee of $150.00 is a maximum fee subject to other applicable laws as provided by SOP Part II (B):
Marshals must act pursuant to the CPLR, the N.Y.C. Civil Court Act, all applicable rules and regulations and the DOI's Marshal's Handbook. Tow, garage, and other personnel chosen by a Marshal to assist in this program must also comply with all applicable laws, Marshal's directives, licensing requirements, and with the Parking Violations procedures contained in this document.
SOP Part II (B) at 3 (emphasis added). (See also Plaintiff's Memorandum at 3). Burgos contends that the Marshals and their agents, the private tow companies, have not complied with applicable law promulgated under to § 20-509(a) of the Administrative Code of the City of New York (hereinafter "Administrative Code"), specifically Title 20 (Consumer Affairs), Chapter 2 (Licenses), Subchapter 31 (Towing Vehicles). Administrative Code § 20-509(a) states in part, "[e]xcept as otherwise provided, charges for the towing of vehicles shall not exceed fifty dollars for the first mile or fraction thereof and three dollars and fifty cents for each additional mile or fraction thereof . . . ." Burgos argues that $150.00 is clearly excessive in light of the permissible towing fee set forth in § 20-509, and therefore contrary to the specific laws of the City of New York. (See Plaintiff's Memorandum at 4)
The Marshals, relying on Administrative Code § 20-524 ("Applicability of Subchapter"), counter that the Marshals are exempt from § 20-509. (See Defendants' Memorandum of Law in Reply to Plaintiff's Opposition to Defendants' Motion to Dismiss, dated Nov. 20, 2000 (hereinafter "Defendants' Reply") at 1-2). The Court agrees with the Marshals' reading of § 20-524.
It is clear that Administrative Code, subchapter 31, with the exception of § 20-528 concerning police precinct notification, is not applicable to Marshals or City agencies. Section 20-524, subsections 2(c) and (e) state:
c. This subchapter shall not be applicable to a governmental agency or to any person who performs towing and storage services exclusively on the premises of any facility operated by the port authority of New York and New Jersey, or to an individual employed by either such entity when driving or otherwise operating a tow truck or assisting in any activity for which a license is required under this subchapter in the course of his or her employment.
e. Notwithstanding the provisions of subdivision c of this section, the provisions of section 20-528 of this subchapter shall be applicable to all city marshals and city agencies.
Administrative Code § 20-524. The Marshals operate as part of a governmental agency. See Civil Court Act § 1609(1). Therefore, as provided in subsection 2(c) and (e), the Marshals are not bound by the restrictions provided for private towing companies in § 20-509 as Burgos contends.
In light of the foregoing statutes, the Marshals are entitled to collect all the fees referred to as "unauthorized" in Burgos's pleadings, including the tow fee, administrative or execution fee, poundage fee, and the PIF fee. Since the "linchpin" of the complaint has no merit, Burgos's substantive claims against the Marshals also fail. Therefore, the complaint is dismissed with prejudice. See Cortec Industries, 949 F.2d at 48 ("where a plaintiff is unable to allege any fact sufficient to support its claim, a complaint should be dismissed with prejudice") (citations omitted).
IV. BURGOS'S CLAIMS
Having found that the Marshals' imposition of towing fees was authorized by a legitimate statutory and regulatory framework, Burgos's specific claims lack any legal basis. Therefore, her claims are dismissed.
A. UNJUST ENRICHMENT/MONEY HAD AND RECEIVED
Burgos contends that the Marshals are in possession of fees not due to them, and therefore, they are wrongfully and illegally retaining those fees. According to Burgos, the Marshals remain unjustly enriched at the expense of the Complainants. ( See Am. Compl. ¶¶ 54-56).
To recover on a theory of unjust enrichment a plaintiff must prove that the defendant was enriched, that such enrichment was at the plaintiff's expense, and that the circumstances were such that in equity and good conscience the defendant should return the money or property to the plaintiff. See Dolmetta v. Uintah National Corp., 712 F.2d 15, 19 (2d Cir. 1983) (citations omitted)
Although Burgos attempts to track the necessary elements of an unjust enrichment claim in her factual allegations, it is obvious that because the Marshals' actions were authorized, her claim lacks merit. The Marshals are not wrongfully and illegally in possession of the collected fees as stated in ¶ 55 of the Amended Complaint. Therefore, there is no basis for the return of these fees to Burgos and the Complainants. Furthermore, the "equity and good conscience" standards do not pertain to this case. If the Marshals were acting pursuant to the Scofflaw Towing Program and rules promulgated by the Department of Finance, there is no legal basis for remitting such funds, which were mandated to be collected, to Burgos and other claimants.
In her claim of money had and received, Burgos similarly alleges that the Marshals are wrongfully in possession of monies collected from her and other persons in connection with the towing of their vehicles and that Complainants are entitled to a judgment directing the Marshals to pay them the "unauthorized" fees. (See Am. Compl. ¶¶ 50-61).
The essential elements in a claim for money had and received under New York law are that (1) defendant received money belonging to the plaintiff; (2) defendant benefited from the receipt of money; and (3) under principles of equity and good conscience, defendant should not be permitted to keep the money. See Aaron Ferer Sons Ltd. v. Chase Manhattan Banks, 731 F.2d 112, 125 (2d Cir. 1984) (citations omitted) However, no cause of action can be stated where a statute or regulation requires or otherwise authorizes the collection of fees. See Nordlicht v. New York Telephone Company, 799 F.2d 859, 865 (2d Cir. 1986), cert. denied, 479 U.S. 1055 (1987), overruling on other grounds recognized by,Marcus v. ATT Corp., 138 F.3d 46 (2d Cir. 1998) (plaintiff could not make out a claim for money had and received against telephone company where company merely collected a charge according to established United States rates).
Burgos's allegations of money had and received are not only insubstantial, but fail for the same reasons as her unjust enrichment claims. The Marshals, like defendants in Nordlicht, were authorized by statute to collect the money sought to be returned by Burgos. Therefore, as the court recognized with respect to the plaintiff in Nordlicht, Burgos's claim for money had and received has no basis.
B. FRAUD
Burgos alleges that the Marshals committed and continue to commit fraud by representing through print and other media that they are entitled to the fees demanded. Burgos contends that such representations were made with the intent to deceive the Complainants and that the Complainants relied on those representations to their detriment by paying the unauthorized fees in order to redeem their vehicles. See Am. Compl. ¶¶ 64-68)
In response to the Marshal's motion, Burgos argues that the amended complaint pleads fraud with particularity pursuant to Fed.R.Civ.P. 9 (b). Burgos asserts that ¶¶ 38-40 and 63-71 adequately allege specific instances of fraud, including the manner and time the alleged misrepresentations were made. (See Plaintiff's Memorandum at 11). Burgos's contention is without merit.
To prevail on a fraud claim under New York law, a plaintiff must establish five elements by clear and convincing evidence: (1) the defendant made a material misrepresentation; (2) the defendant knew of its falsity; (3) the defendant possessed an intent to defraud; (4) the plaintiff reasonably relied on the misrepresentation; and (5) the plaintiff suffered damage as a result of the misrepresentation. See Kave v. Grossman, 202 F.3d 611, 614 (2d Cir. 2000) (citations omitted); see also Ippolito v. Lennon, 150 A.D.2d 300, 303, 542 N.Y.S.2d 3 (N.Y.App. Div. 198 9)
Fed.R.Civ.P. 9(b) provides that "in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Moreover, the Second Circuit has declared that "[clonclusory allegations that defendant's conduct was fraudulent or deceptive are not enough." See Decker v. Massey-Ferguson Ltd., 681 F.2d 111, 114 (2d Cir. 1982). Accordingly, a complaint containing allegations of fraud must (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statement were made, and (4) explain why the statements were fraudulent. See Acito v. Imcera Group. Inc., 47 F.3d 47, 51 (2d Cir. 1995).
It is clear that Burgos's allegations of fraud fall short of the standards set forth in Fed.R.Civ.P. 9(b) and relevant case law. While she alleges the elements of a fraud claim under New York law, there is a clear lack of specificity as to what constituted the fraudulent acts, or when and where such acts were performed. Furthermore, assuming Burgos is referring to the collection of fees as being fraudulent, that claim, as determined above, has no legal basis. Again, the Marshals' actions were authorized by statute and applicable regulations and were, therefore, not fraudulent.
C. NEW YORK GENERAL BUSINESS LAW §§ 349 AND 350
Burgos claims that the Defendants violated §§ 349 and 350 of the New York General Business Law ("General Business Law"). Specifically, Burgos alleges that the Marshals engaged in fraudulent and deceptive business practices and advertising to deceive the Complainants as consumers. (See Am. Coml. ¶ 99). She also requests a permanent injunction under § 349(h) restraining the Marshals from collecting the allegedly unauthorized towing fees.
The Marshals argue that General Business Law §§ 349 and 350 were not meant to cover transactions such as those in this case, and that the Complainants here are not consumers meant to be protected by this statute. In response, Burgos contends that she need only allege that the Marshals engaged in acts or practices that are deceptive or misleading in a material way, and that Complaints were injured by reason thereof. (See Plaintiff's Memorandum at 23). Burgos further contends that she is entitled to a permanent injunction pursuant to General Business Law § 349(h), and therefore this cause of action should not be dismissed. The Court disagrees.
General Business Law § 349 prohibits "deceptive acts or practices in the conduct of any business, trade, or commerce or in the furnishing of any service." The New York Court of Appeals has held that in order to state a prima facie case under General Business Law § 349, a plaintiff must charge conduct of the defendant that is directed at consumers. See Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 647 N.E.2d 741, 744, 85 N.Y.2d 20, 25 (N.Y. 1995)
In Genesco Entertainment v. Koch, 593 F. Supp. 743, 752 (S.D.N.Y. 1984), the court held that the rental of Shea Stadium was a "`single shot transaction'", not a typical consumer transaction and therefore not covered by General Business Law § 349. The court noted that "the typical violation contemplated by the statute involves an individual consumer who falls victim to misrepresentations made by a seller of consumer goods usually by way of false and misleading advertising. The consumer oriented nature of the statute is evidenced by the remedies it provides . . . . The New York cases where plaintiffs have recovered under section 349(h) further reflect its consumer orientation since they uniformly involve transactions where the amount in controversy is small."See id. at 751.
The complainants in this case do not fall within the purview of § 349. They were involved in transactions that are regulatory, not consumer-oriented, and therefore fail to meet the threshold requirement set forth in Oswego Laborers. Also, the court in Oswego Laborers was mindful of the risk that § 349 could trigger an unintended "tidal wave of litigation" against businesses. 647 N.E.2d at 745, 85 N.Y.2d at 26. To guard against that risk, Oswego Laborers adopted an objective definition of "deceptive acts and practices." Id. Once again, this Court fails to see how the Complainants can meet the objective standard for deception when all of the towing fees imposed are clearly delineated by public statutes and regulations. On this basis, therefore, Burgos's claim under General Business Law §§ 349 and 350 are dismissed, and her request for injunctive relief is denied.
D. RICO
Burgos further alleges that the Marshals have violated RICO §§ 1962(a), (b) and (c). (Am. Compl. ¶¶ 84-95). To state a claim under RICO, a plaintiff must allege: (1) a violation of the RICO statute, 18 U.S.C. § 1962; (2) an injury to business or property; and (3) causation of the injury by the violation of § 1962. See Pinnacle Consultants, Ltd. v. Leucadia National Corp., 101 F.3d 900, 903-04 (2d Cir. 1996). Section 1962 prohibits: (a) the use of income "derived . . . from a pattern of racketeering activity" to acquire an interest in, establish, or operate an enterprise engaged in or whose activities affect interstate commerce; (b) the acquisition of any interest in or control of such an enterprise "through a pattern of racketeering activity"; (c) the conduct or participation in the conduct of such an enterprise's affairs "through a pattern of racketeering activity"; and (d) conspiring to do any of the above. See 18 U.S.C. § 1962.
Without delving into the details of the parties' dispute over the Complainants' RICO claim or into the intricacies of RICO itself, the Court finds Burgos's RICO action unsupportable because it fails to establish a "pattern of racketeering activity." By definition, racketeering activity only contemplates acts "chargeable" under state criminal statutes, "indictable" under specific federal crimes, or drugrelated activities "punishable" under federal law. See Sedima S.P.R.L. v. Imrex Co. Inc., 473 U.S. 479, 481-82 (1985); 18 U.S.C. § 1961 (1)
Having established that the imposition of towing fees derives from legitimate statutory and regulatory sources, any actions by the Marshals thereunder cannot constitute "racketeering activity." The Marshals have done nothing that would implicate state or federal criminal statutes. They merely imposed the standard towing fees as authorized by law. Although some courts have sustained RICO claims against municipal employees, the conduct complained of far exceeded the bounds of statutory authorization and constituted criminal conduct. See Terminate Control Corp. v. Horowitz, 28 F.3d 1335, 1339 (2d Cir. 1994) (employees of Division of School Buildings of the Board of Education of the City of New York who engineered a kickback scheme could be held liable under RICO).
In the present case, every fee imposed by the Marshals was authorized by a legitimate regulatory framework. Under those circumstances, the Marshals actions cannot constitute "racketeering activity," and as municipal employees, they could not have formed the criminal intent necessary to establish a RICO violation. See id.
V. FAILURE TO JOIN INDISPENSABLE PARTIES
The Defendants also move to dismiss the amended complaint pursuant Rules 12(b)(7) and 19 for failure to join an indispensable party, the City of New York (the "City") and the City Department of Finance ("DOF").
The Marshals are correct to note that the City and the DOF are necessary parties, as they are municipal employees acting pursuant to the City's Scofflaw Towing Program. Nevertheless, the City and the DOF are not indispensable under the meaning of Rule 19, as the Court has personal and subject matter jurisdiction over the City and Burgos's claims as alleged. Under normal circumstances, the Court could simply order joinder, but given the Court's ruling on the Marshals' Rule 12(b)(6) motion, such an order would be superfluous because all of Burgos's claims fail to survive the motion to dismiss. Therefore, the Court need not reach the Marshals' motion to dismiss pursuant to Rule 12(b)(7).
VI. CONCLUSION AND ORDER
Because the towing fees collected by the Marshals are authorized by an explicit statutory and regulatory framework, the Court grants the Marshals' motion to dismiss the amended complaint pursuant to 12(b) (6). Moreover, the amended complaint is dismissed without leave to amend, as Burgos has already amended once as of right and another amendment would be futile. See In re American Express Co. Shareholder Litig., 39 F.3d 395, 402 (2d Cir. 1994), (citing Foman v. Davis, 371 U.S. 178, 182 (1962) (leave to amend may be denied if the amendment would be futile)); see also Anatian v. Coutts Bank Ltd., 193 F.3d 85, 89 (2d Cir. 1999) (district court did not err when it did not grant leave to amend because plaintiffs made no attempt to seek leave to amend, nor was there any showing as to how plaintiffs might amend their complaint to cure their pleading deficiencies, especially in light of the factual deficiencies), cert. denied, 528 U.S. 1188 (2000).
ORDER
For the foregoing reasons, it is hereby
ORDERED that defendants' motion to dismiss the amended complaint is granted with prejudice and without leave to replead; and it is hereby
ORDERED that Clerk of Court is directed to close this case
SO ORDERED.