05-4935-cv New Phone v. City of New York 1 2 UNITED STATES COURT OF APPEALS 3 4 FOR THE SECOND CIRCUIT 5 6 ____________________________________ 7 8 August Term, 2006 9 10 (Argued: November 14, 2006 Decided: May 17, 2007 ) 11 12 Docket Nos. 05-4935-cv(L) 13 05-5490-cv(CON) & 05-5502-cv(CON) 14 ____________________________________ 15 16 17 THE NEW PHONE CO., INC., and BEST PAYPHONES, INC. 18 19 Plaintiffs-Appellants, 20 21 22 – v. – 23 24 25 CITY OF NEW YORK, NEW YORK CITY DEPARTMENT OF INFORMATION 26 TECHNOLOGY AND TELECOMMUNICATIONS, and GINO MENCHINI, in his Official 27 Capacity 28 29 Defendants-Appellees. 30 31 ____________________________________ 32 33 Before: JACOBS, Chief Judge, SACK, Circuit Judge, and OBERDORFER, District Judge.* 34 35 ____________________________________ 36 37 Plaintiffs-Appellants appeal from an order sua sponte dismissing a complaint and a filing 38 injunction entered by the United States District Court for the Eastern District of New York
* The Honorable Louis F. Oberdorfer, United States District Judge for the District of Columbia, sitting by designation.
1 1 (Gleeson, J.). 2 3 VACATED and REMANDED in part. Appeal DISMISSED in part and DENIED as 4 moot in part. 5 6 7 CHARLES H. RYANS, New York, NY, for Appellants. 8 9 KAREN M. GRIFFIN, Corporation Counsel of the City of New 10 York (Michael A. Cardozo, Francis F. Caputo, Michael S. Adler, 11 and Jerald Horowitz, of counsel), for Appellees.
12 PER CURIAM:
13 This opinion addresses three consolidated appeals. In 05-4935-cv(L), the plaintiffs-
14 appellants The New Phone Co., Inc. and Best Payphones, Inc. (collectively, "New/Best") jointly
15 appeal from an August 5, 2005 order (Gleeson, J.) (“August 5 Order”) sua sponte dismissing
16 complaint number 05-cv-1702. In 05-5490-cv(C) and 05-5502-cv(C), New Phone and Best
17 Payphone each appeal from an August 26, 2005 order (Gleeson, J.) (“August 26 Order”) denying
18 their requests to file new complaints under the terms of a filing injunction issued by the district
19 court in the August 5 Order.
20 I. Background
21 Established telephone companies such as Verizon provide the vast bulk of payphone
22 services in New York City. New/Best have for several years operated what may fairly be
23 described as fringe payphone services. For example, they place payphones on the outside of
24 buildings and connect them to the lines maintained by the established telephone service
25 companies. In 1996, New York City created a new regulatory scheme governing these fringe
26 payphone businesses which, among other things, required them to obtain a franchise agreement
27 from the City. New/Best objected to the new scheme and reacted by filing suit against the City.
2 1 Since that time, the City has denied their repeated requests for franchise agreements and has
2 taken various allegedly discriminatory and retaliatory actions against them. Over the years,
3 New/Best generally responded to new City regulations by moving to amend their pending
4 complaints. Concerned they would run afoul of a local four-month statue of limitations, they
5 also often simultaneously filed new complaints. By the end of 2004, New/Best had seven
6 complaints against the City pending in the Eastern District of New York. In addition, New/Best
7 and the City have filed a number of procedural motions as they vigorously litigated.
8 In December 2004, the City adopted new regulations further affecting New/Best’s
9 businesses: (1) a six percent fee increase for new pay phones, and (2) a bar on future advertising
10 on payphone enclosures in Manhattan below 96th Street. In response, New/Best again adopted
11 the motion to amend/new complaint strategy. In April 2005, they moved to amend their seven
12 then-pending complaints, including one in which motions to dismiss were fully briefed.
13 Simultaneously, they jointly filed complaint 05-cv-1702, generally reiterating the allegations of
14 the earlier complaints as amended.
15 Concerned about the proliferation of cases and matters, the trial court, after briefing and
16 argument by counsel, enjoined New/Best from filing additional complaints without leave of
17 court. In addition, the court, sua sponte, and without briefing or argument, dismissed complaint
18 05-cv-1702. Three weeks later, New/Best sought leave to file yet another complaint; the district
19 court denied their request.
20 II. Analysis
21 A. The Dismissal of 05-cv-1702
22 As part of its general power to administer its docket, a district court may stay or dismiss a
3 1 suit that is duplicative of another federal court suit. See Colorado River Water Conservation
2 Dist. v. United States, 424 U.S. 800, 817 (1976). The dismissal of a complaint based on the
3 exercise of this power is reviewed for abuse of discretion. See Curtis v. Citibank, N.A., 226 F.3d
4 133, 138 (2d Cir. 2000).
5 Without the benefit of briefing on the subject, the trial court found with minimal
6 discussion that “the complaint appears to be largely duplicative of earlier complaints.” August 5
7 Order at 8 (emphasis added). In a footnote, the district court recognized that it did “not conduct
8 an exhaustive comparison of the seven complaints.” August 5 Order at 7 n.6. While the district
9 court was not required to conduct an exhaustive comparison before dismissing 05-cv-1702, it
10 should have undertaken a more thorough review to determine if these claims were based on a
11 “common nucleus of operative facts.” See, e.g., Waldman v. Village of Kiryas Joel, 207 F.3d
12 105, 113 (2d Cir. 2000). Complaint 05-cv-1702 challenges new City regulations that New/Best
13 could not have challenged before. When new allegations are not obviously barred by claim
14 preclusion, plaintiffs are entitled to process, even if a motion for leave to amend has been denied.
15 Curtis, 226 F.3d at 136, 140. Furthermore, while the district court stated that it would take
16 New/Best's requests to amend their complaints into consideration, this is not adequate to ensure
17 that the statute of limitations will be tolled and their claims will be preserved. Under these
18 circumstances, we cannot affirm the district court’s sua sponte dismissal.1
19 There are other mechanisms the district court can employ to achieve judicial efficiency
1 It appears that the district court intended the dismissal to be without prejudice; it suggested that plaintiffs may seek leave to file a new complaint after the pending motions are decided. August 5 Order at 8. Nevertheless, the dismissal without process or otherwise preserving the claims was error.
4 1 and still preserve New/Best’s rights. The district court need not conduct a line by line
2 comparison of 05-cv-1702 to excise the duplicative claims; it can order the plaintiffs to do so or
3 face sanction. It can also order further briefing on the issue of whether the new claims are indeed
4 based on the same “nucleus of operative facts.” Waldman, 207 F.3d at 113. The court also has
5 the authority to defer analysis on the merits of these claims until the pending motions to dismiss
6 are resolved. For example, it could simply stay the 05-cv-1702 action, or it could dismiss it
7 without prejudice so long as it also ordered the statue of limitations tolled.
8 Accordingly, we VACATE the portion of the August 5 Order dismissing 05-cv-1702 and
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05-4935-cv New Phone v. City of New York 1 2 UNITED STATES COURT OF APPEALS 3 4 FOR THE SECOND CIRCUIT 5 6 ____________________________________ 7 8 August Term, 2006 9 10 (Argued: November 14, 2006 Decided: May 17, 2007 ) 11 12 Docket Nos. 05-4935-cv(L) 13 05-5490-cv(CON) & 05-5502-cv(CON) 14 ____________________________________ 15 16 17 THE NEW PHONE CO., INC., and BEST PAYPHONES, INC. 18 19 Plaintiffs-Appellants, 20 21 22 – v. – 23 24 25 CITY OF NEW YORK, NEW YORK CITY DEPARTMENT OF INFORMATION 26 TECHNOLOGY AND TELECOMMUNICATIONS, and GINO MENCHINI, in his Official 27 Capacity 28 29 Defendants-Appellees. 30 31 ____________________________________ 32 33 Before: JACOBS, Chief Judge, SACK, Circuit Judge, and OBERDORFER, District Judge.* 34 35 ____________________________________ 36 37 Plaintiffs-Appellants appeal from an order sua sponte dismissing a complaint and a filing 38 injunction entered by the United States District Court for the Eastern District of New York
* The Honorable Louis F. Oberdorfer, United States District Judge for the District of Columbia, sitting by designation.
1 1 (Gleeson, J.). 2 3 VACATED and REMANDED in part. Appeal DISMISSED in part and DENIED as 4 moot in part. 5 6 7 CHARLES H. RYANS, New York, NY, for Appellants. 8 9 KAREN M. GRIFFIN, Corporation Counsel of the City of New 10 York (Michael A. Cardozo, Francis F. Caputo, Michael S. Adler, 11 and Jerald Horowitz, of counsel), for Appellees.
12 PER CURIAM:
13 This opinion addresses three consolidated appeals. In 05-4935-cv(L), the plaintiffs-
14 appellants The New Phone Co., Inc. and Best Payphones, Inc. (collectively, "New/Best") jointly
15 appeal from an August 5, 2005 order (Gleeson, J.) (“August 5 Order”) sua sponte dismissing
16 complaint number 05-cv-1702. In 05-5490-cv(C) and 05-5502-cv(C), New Phone and Best
17 Payphone each appeal from an August 26, 2005 order (Gleeson, J.) (“August 26 Order”) denying
18 their requests to file new complaints under the terms of a filing injunction issued by the district
19 court in the August 5 Order.
20 I. Background
21 Established telephone companies such as Verizon provide the vast bulk of payphone
22 services in New York City. New/Best have for several years operated what may fairly be
23 described as fringe payphone services. For example, they place payphones on the outside of
24 buildings and connect them to the lines maintained by the established telephone service
25 companies. In 1996, New York City created a new regulatory scheme governing these fringe
26 payphone businesses which, among other things, required them to obtain a franchise agreement
27 from the City. New/Best objected to the new scheme and reacted by filing suit against the City.
2 1 Since that time, the City has denied their repeated requests for franchise agreements and has
2 taken various allegedly discriminatory and retaliatory actions against them. Over the years,
3 New/Best generally responded to new City regulations by moving to amend their pending
4 complaints. Concerned they would run afoul of a local four-month statue of limitations, they
5 also often simultaneously filed new complaints. By the end of 2004, New/Best had seven
6 complaints against the City pending in the Eastern District of New York. In addition, New/Best
7 and the City have filed a number of procedural motions as they vigorously litigated.
8 In December 2004, the City adopted new regulations further affecting New/Best’s
9 businesses: (1) a six percent fee increase for new pay phones, and (2) a bar on future advertising
10 on payphone enclosures in Manhattan below 96th Street. In response, New/Best again adopted
11 the motion to amend/new complaint strategy. In April 2005, they moved to amend their seven
12 then-pending complaints, including one in which motions to dismiss were fully briefed.
13 Simultaneously, they jointly filed complaint 05-cv-1702, generally reiterating the allegations of
14 the earlier complaints as amended.
15 Concerned about the proliferation of cases and matters, the trial court, after briefing and
16 argument by counsel, enjoined New/Best from filing additional complaints without leave of
17 court. In addition, the court, sua sponte, and without briefing or argument, dismissed complaint
18 05-cv-1702. Three weeks later, New/Best sought leave to file yet another complaint; the district
19 court denied their request.
20 II. Analysis
21 A. The Dismissal of 05-cv-1702
22 As part of its general power to administer its docket, a district court may stay or dismiss a
3 1 suit that is duplicative of another federal court suit. See Colorado River Water Conservation
2 Dist. v. United States, 424 U.S. 800, 817 (1976). The dismissal of a complaint based on the
3 exercise of this power is reviewed for abuse of discretion. See Curtis v. Citibank, N.A., 226 F.3d
4 133, 138 (2d Cir. 2000).
5 Without the benefit of briefing on the subject, the trial court found with minimal
6 discussion that “the complaint appears to be largely duplicative of earlier complaints.” August 5
7 Order at 8 (emphasis added). In a footnote, the district court recognized that it did “not conduct
8 an exhaustive comparison of the seven complaints.” August 5 Order at 7 n.6. While the district
9 court was not required to conduct an exhaustive comparison before dismissing 05-cv-1702, it
10 should have undertaken a more thorough review to determine if these claims were based on a
11 “common nucleus of operative facts.” See, e.g., Waldman v. Village of Kiryas Joel, 207 F.3d
12 105, 113 (2d Cir. 2000). Complaint 05-cv-1702 challenges new City regulations that New/Best
13 could not have challenged before. When new allegations are not obviously barred by claim
14 preclusion, plaintiffs are entitled to process, even if a motion for leave to amend has been denied.
15 Curtis, 226 F.3d at 136, 140. Furthermore, while the district court stated that it would take
16 New/Best's requests to amend their complaints into consideration, this is not adequate to ensure
17 that the statute of limitations will be tolled and their claims will be preserved. Under these
18 circumstances, we cannot affirm the district court’s sua sponte dismissal.1
19 There are other mechanisms the district court can employ to achieve judicial efficiency
1 It appears that the district court intended the dismissal to be without prejudice; it suggested that plaintiffs may seek leave to file a new complaint after the pending motions are decided. August 5 Order at 8. Nevertheless, the dismissal without process or otherwise preserving the claims was error.
4 1 and still preserve New/Best’s rights. The district court need not conduct a line by line
2 comparison of 05-cv-1702 to excise the duplicative claims; it can order the plaintiffs to do so or
3 face sanction. It can also order further briefing on the issue of whether the new claims are indeed
4 based on the same “nucleus of operative facts.” Waldman, 207 F.3d at 113. The court also has
5 the authority to defer analysis on the merits of these claims until the pending motions to dismiss
6 are resolved. For example, it could simply stay the 05-cv-1702 action, or it could dismiss it
7 without prejudice so long as it also ordered the statue of limitations tolled.
8 Accordingly, we VACATE the portion of the August 5 Order dismissing 05-cv-1702 and
9 REMAND to the district court for further proceedings consistent with this order.
10 B. The Filing Injunction
11 None of the notices of appeal mention the entry of the filing injunction; our jurisdiction is
12 limited by the wording of the notice. Kowsh v. Bd. of Elections, 99 F.3d 78, 80 (2d Cir. 1996).
13 Rule 3(c) provides that “the notice of appeal must . . . designate the judgment, order or part
14 thereof being appealed.” Fed. R. App. P. 3(c)(1)(B). We have an independent obligation to
15 ensure the notice of appeal complies with Rule 3(c). Dynegy Midstream Servs. v. Trammochem,
16 451 F.3d 89, 92 (2d Cir. 2006). While we may construe the rules liberally, we do not have the
17 authority to waive the jurisdictional requirements of this rule. Torres v. Oakland Scavenger Co.,
18 487 U.S. 312, 317 (1988).2
19 We recognize that some of our opinions have suggested in dicta that we have jurisdiction
2 In Eberhart v. United States, 546 U.S. 12 (2005) (per curiam) and Kontrick v. Ryan, 540 U.S. 443 (2004), the Supreme Court has cast some doubt about the rationale underlying Torres. Because the Supreme Court has not expressly overruled Torres, however, we are bound by it. See Agostini v. Felton, 521 U.S. 203, 237 (1997).
5 1 to review a district court’s decision if the appellee fully responds to the appellant’s arguments –
2 and thereby suffers no prejudice – even where the intent to appeal from the decision is not clear
3 on the face of, and cannot be inferred from the language of, the notice of appeal. See, e.g.,
4 Ametex Fabrics, Inc. v. Just In Materials, Inc., 140 F.3d 101, 106 (2d Cir. 1998). But such a rule
5 would be inconsistent with other decisions of this Court which, even though we did not there
6 comment explicitly on the issue, dismissed appeals on grounds of insufficient notice
7 notwithstanding the appellees’ complete response to the appellants’ arguments. See Shrader v.
8 CSX Transp., Inc., 70 F.3d 255, 256 (2d Cir. 1995) (holding that we do not have jurisdiction to
9 review a district court’s decision because the intent to appeal could not be inferred from the
10 notice); Brief for Appellees at 23-27, Shrader, No. 95-7037 (2d Cir. Mar. 30, 1995) (responding
11 to the appellant’s arguments); see also Kowsh, 99 F.3d at 80; Brief for Appellees at 11-12,
12 Kowsh, No. 96-9314 (2d Cir. Oct. 25, 1996) (responding to the appellant’s arguments).
13 Moreover, our assertion of jurisdiction over an appeal based on the appellee’s response
14 on the merits to the appellant’s arguments suggests that an appellee may waive the jurisdictional
15 defects in the notice of appeal. That is not so. See Torres, 487 U.S. at 317 (noting that the
16 requirements of Rules 3 and 4 may not be waived because they are jurisdictional in nature). In
17 the case at bar, the City’s brief responds to New/Best's arguments as to the August 5 filing
18 injunction. Our jurisdiction, however, depends on whether the intent to appeal from that decision
19 is clear on the face of, or can be inferred from, the notices of appeal. Because none of the notices
20 of appeal mention the August 5 filing injunction and the intent to appeal from it cannot be
21 inferred from the notices, we must dismiss the appeal for lack of jurisdiction insofar as the
22 appellants seek review of that filing injunction.
6 1 C. The August 26 Order
2 The August 26 Order merely denies New/Best’s requests to file a new complaint.
3 New/Best's description of their proposed complaint raises the same claims asserted as “new” in
4 05-cv-1702. Vacatur of the August 5 Order ensures that those claims will be adequately
5 reviewed or preserved. Accordingly, the appeals of the August 26 Order are DENIED as moot.