     09-2817-cv
     Francarl Realty Corp. v. Town of E. Hampton


                                          UNITED STATES COURT OF APPEALS
                                              FOR THE SECOND CIRCUIT

                                                   SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO SUMMARY ORDERS
     FILED AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY THIS COURT’S LOCAL RULE 32.1 AND
     FEDERAL RULE OF APPELLATE PROCEDURE 32.1. IN A BRIEF OR OTHER PAPER IN WHICH A LITIGANT
     CITES A SUMMARY ORDER, IN EACH PARAGRAPH IN WHICH A CITATION APPEARS, AT LEAST ONE
     CITATION MUST EITHER BE TO THE FEDERAL APPENDIX OR BE ACCOMPANIED BY THE NOTATION:
     “(SUMMARY ORDER).” A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY
     NOT REPRESENTED BY COUNSEL.


 1           At a stated term of the United States Court of Appeals for the Second Circuit, held at the
 2   Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
 3   on the 3rd day of May, two thousand ten.

 4   Present:            ROGER J. MINER,
 5                       JOSÉ A. CABRANES,
 6                       RICHARD C. WESLEY,

 7                     Circuit Judges.
 8   ___________________________________________________
 9   FRANCARL REALTY CORPORATION, VIKING STAR, INC.,
10   VIKING STARSHIP INC., VIKING QUEST, INC., VIKING GOOD
11   TIMES, INC., PAUL G. FORSBERG SR., HANK LACKNER,
12   GEORGE SHIMINSKI, WILLIAM J. MODICA, STRETTLE F.
13   WHITING, WILLIAM GRIMM,

14                                 Plaintiffs-Appellants,

15                       -v.-                                                     No.    09-2817-cv
16
17   THE TOWN OF EAST HAMPTON,

18                     Defendant-Appellee.
19   ___________________________________________________

20   For Appellants:                                 RICHARD C. CAHN and Daniel K. Cahn, Cahn & Cahn,
21                                                   LLP, Huntington, New York, for plaintiffs-appellants.

22   For Appellee:                                   STEVEN BARSHOV , Sive, Paget & Riesel, P.C., New York,

                                                               1
 1                                 New York, for defendant-appellee.
 2   ______________________________________________________________________________

 3          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

 4   DECREED that the judgment of the District Court is AFFIRMED in part and VACATED in part.

 5   The case is REMANDED for further proceedings consistent with this summary order.

 6          Plaintiffs-appellants Francarl Realty Corp., Paul Forsberg, Viking Starship, Inc., Viking

 7   Quest, Inc., Viking Good Times, Inc., Viking Star, Inc., Hank Lackner, and George Shiminski

 8   (collectively, the “plaintiffs”) appeal from a judgment entered on June 12, 2009, in the United

 9   States District Court for the Eastern District of New York (Feuerstein, J.). The plaintiffs

10   principally sought declaratory and injunctive relief from laws regulating ferry service in the

11   Town of East Hampton (the “Town”), defendant-appellee in this action. On remand,1 and

12   following a bench trial, the District Court dismissed the plaintiffs’ complaint upon concluding

13   that the Town’s ferry regulations did not violate the Commerce Clause of the United States

14   Constitution under the balancing test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 142

15   (1970). Specifically, the District Court found that (1) the Town’s regulation banning “fast” and

16   “vehicle” ferries (the “Fast Ferry Ban” and “Vehicle Ferry Ban,” respectively) did not place any

17   incidental burden on interstate commerce; (2) the Fast and Vehicle Ferry Bans were responsive to

18   the local problem of traffic congestion; and (3) a stipulation of settlement entered in a separate

19   action did not exempt the plaintiffs from the Fast and Vehicle Ferry Bans. We assume the



            1
               We previously remanded the plaintiffs’ case for a determination on whether the Town’s
     regulation banning “fast” and “vehicle” ferries violated the Commerce Clause of the United
     States Constitution under the balancing test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137,
     142 (1970). See Francarl Realty Corp. v. Town of E. Hampton, 239 F. App’x 695, 695 (2d Cir.
     2007).

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 1   parties’ familiarity with the remaining factual and procedural history of the case.

 2          We review the district court’s factual findings for clear error and its legal determinations

 3   de novo. See Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 168 (2d Cir. 2001).

 4          On the record before us, we conclude that the District Court erred in its determination that

 5   the Fast and Vehicle Ferry Bans effected no incidental burden on interstate commerce. The Bans

 6   shift the burden of traffic from local drivers onto interstate travelers because local drivers benefit

 7   from reduced traffic volume on the local roads while interstate travelers are denied the most

 8   direct route to the Town. To the extent the court rejected the plaintiffs’ evidence that the Bans

 9   reduced interstate travel to the Town, such a finding was clearly inconsistent with the court’s

10   later determination that the Bans were effective in mitigating traffic congestion by reducing

11   interstate travel to the Town.

12          We think that further support is required for the District Court’s determination that the

13   Fast Ferry Ban “fulfills its putative purpose of preventing further degradation of levels of service

14   on Town roads.” Francarl Realty Corp. v. Town of E. Hampton, 628 F. Supp. 2d 329, 353

15   (E.D.N.Y. 2009). Although the District Court reasonably relied on the evidence that “faster

16   travel time would . . . increase demand for the [plaintiffs’ ferry] service,” this evidence alone is

17   inadequate to establish the link between the Fast Ferry Ban and the putative benefit of mitigating

18   traffic congestion for two reasons: (1) there is substantial evidence in the record that the

19   plaintiffs’ transportation of 1,342 passengers per day — a number stipulated to by the Town in

20   another context as the plaintiffs’ ferry passenger capacity — would not cause an additional traffic

21   burden on the Town; and (2) it is undisputed that the plaintiffs intend to transport no more than

22   1,342 passengers a day even if they were permitted to institute a fast-ferry service. Thus, the Fast


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 1   Ferry Ban, which applies to the plaintiffs — the only ferry service in the Town — may be of no

 2   benefit in mitigating traffic congestion. We therefore remand this case to the District Court to

 3   determine (1) whether, taking into account the stipulated limited passenger capacity, the Fast

 4   Ferry Ban serves to avoid additional traffic congestion; (2) whether, in view of the limitation on

 5   passengers already imposed on the plaintiffs, there are any other putative local benefits to be

 6   derived from the Fast Ferry Ban; and (3) whether, if there be any putative local benefits

 7   attributable to the Fast Ferry Ban, the incidental burden on interstate commerce clearly exceeds

 8   those benefits under the Pike balancing test. The District Court may take additional evidence or

 9   proceed in any way that it sees fit to resolve these questions. Following the District Court’s

10   determinations, this case should be restored to this panel pursuant to the procedure outlined in

11   United States v. Jacobson, 15 F.3d 19, 22 (2d Cir. 1994).

12          Finally, we agree with the District Court’s determination that “vehicle” ferries would

13   cause additional traffic congestion and, therefore, that the incidental burden on interstate

14   commerce does not clearly exceed the putative local benefits of the Vehicle Ferry Ban.

15          The judgment of the District Court is AFFIRMED in part and VACATED in part, and the

16   case is REMANDED for further proceedings consistent with this summary order.


17                                                 FOR THE COURT:
18                                                 Catherine O’ Hagan Wolfe, Clerk


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