Case 1:21-cv-00767-BMC Document 43 Filed 08/10/21 Page 1 of 11 PageID #: 2225
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` Plaintiff,
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
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`AMAZON.COM, INC.,
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`- against -
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`ATTORNEY GENERAL LETITIA JAMES, in
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`her official capacity as the Attorney General of
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`the State of New York,
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` Defendant.
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`MEMORANDUM
`DECISION AND ORDER
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`21-cv-767 (BMC)
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`COGAN, District Judge.
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`Plaintiff Amazon.com commenced this action for declaratory and injunctive relief. It
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`contends that the New York Attorney General’s attempts to subject Amazon to state oversight of
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`certain activities are preempted by federal law. The Attorney General moved to dismiss the
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`action for lack of subject matter jurisdiction and for failure to state a claim; Amazon moved for
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`summary judgment. For the reasons explained below, the Attorney General’s motion to dismiss
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`is granted. In light of the Court’s decision to grant the Attorney General’s motion, there is no
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`need to resolve Amazon’s motion.
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`BACKGROUND1
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`Amazon is an online retailer that operates a fulfillment center in Staten Island, New York.
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`In 2020, Amazon terminated the employment of two associates at its Staten Island fulfilment
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`center for violating Amazon’s COVID-19-related health and safety rules and directives.
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`1 Unless otherwise noted, the below facts are taken from plaintiff’s amended complaint and are assumed to be true
`for purposes of this motion. See Kolbasyuk v. Capital Mgmt. Servs., LP, 918 F.3d 236, 239 (2d Cir. 2019).
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`Purportedly in response to Amazon’s actions, the Attorney General launched an investigation of
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`Amazon’s COVID-19 response.
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`Sometime after the commencement of its investigation, the Attorney General threatened
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`to sue Amazon if it did not immediately agree to a list of demands. In response to the Attorney
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`General’s threat, Amazon commenced this action to seek a declaration that the Attorney General
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`lacks the authority to regulate (i) workplace safety responses to COVID-19 and (ii) claims of
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`retaliation against workers who protest working conditions. Amazon contends that it is entitled
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`to such a declaration because these two areas are preempted by federal law (namely, the
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`Occupational Safety and Health Act and the National Labor Relations Act). Amazon also seeks
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`an injunction against the Attorney General to prevent her from purporting to exercise regulatory
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`authority over the same two areas, again on the grounds of federal preemption.
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`Four days after Amazon commenced this action, the Attorney General filed suit against
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`Amazon in state court. See Complaint, People of the State of New York v. Amazon.com, Inc.,
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`Index No. 450362/2021, ECF No. 1 (N.Y. Sup. Ct. N.Y. Cty.). Amazon removed that case to the
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`United States District Court for the Southern District of New York, but it was subsequently
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`remanded back to state court. See People of the State New York v. Amazon.com, Inc., No. 21-
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`cv-1417, 2021 WL 3140051 (S.D.N.Y. July 26, 2021).2 The case is currently pending in state
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`court.
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`2 The Court may and does take judicial notice of this separate litigation between the parties only “to establish the
`fact of such litigation and related filings.” Int’l Star Class Yacht Racing Ass’n v. Tommy Hilfiger U.S.A., Inc., 146
`F.3d 66, 70 (2d Cir. 1998) (quoting Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc., 969 F.2d 1384, 1388 (2d
`Cir. 1992)).
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`2
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`DISCUSSION
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`The Attorney General has moved to dismiss for lack of subject matter jurisdiction (Fed.
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`R. Civ. P. 12(b)(1)) and for failure to state a claim (Fed. R. Civ. P. 12(b)(6)). Amazon moves for
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`summary judgment (Fed. R. Civ. P. 56). Because the Attorney General has raised a lack of
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`subject matter jurisdiction, the Court begins its analysis there. Steel Co. v. Citizens for a Better
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`Env’t, 523 U.S. 83, 94-95 (1998) (describing the “requirement that jurisdiction be established” as
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`a “threshold matter”).
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`I.
`Subject Matter Jurisdiction
`“A district court properly dismisses an action under Fed. R. Civ. P. 12(b)(1) for lack of
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`subject matter jurisdiction if the court ‘lacks the statutory or constitutional power to adjudicate
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`it.’” Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.a.r.l., 790 F.3d 411, 416-17
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`(2d Cir. 2015) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). “When
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`deciding whether to grant a 12(b)(1) motion to dismiss, the court ‘accepts as true all the factual
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`allegations in the complaint and must draw all reasonable inferences in favor of the plaintiff.’”
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`Cayuga Indian Nation of New York v. Vill. of Union Springs, 293 F. Supp. 2d 183, 187
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`(N.D.N.Y. 2003) (quoting Lunney v. United States, 319 F.3d 550, 554 (2d Cir. 2003)). The
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`burden for establishing the existence of subject matter jurisdiction lies with the plaintiff asserting
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`it, who must do so by a preponderance of the evidence. Makarova, 201 F.3d at 113.
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`“Under the well-pleaded complaint rule, federal subject matter jurisdiction typically
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`exists only when the plaintiff’s well-pleaded complaint raises issues of federal law.” Montefiore
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`Med. Ctr. v. Teamsters Loc. 272, 642 F.3d 321, 327 (2d Cir. 2011) (internal quotations omitted).
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`Generally, “a complaint seeking a declaratory judgment is to be tested, for purposes of the well-
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`pleaded complaint rule, as if the party whose adverse action the declaratory judgment plaintiff
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`apprehends had initiated a lawsuit against the declaratory judgment plaintiff.” Fleet Bank, Nat’l
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`3
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`Ass’n v. Burke, 160 F.3d 883, 886 (2d Cir 1998). In the instant case, the declaratory judgment
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`plaintiff – Amazon – seeks a declaration that the Attorney General’s actions are improper
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`because they are preempted by federal law and fall within the jurisdiction of federal agencies.
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`Reversing the positions of the parties (as is the case in the pending state action) would result in
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`Amazon’s federal preemption argument being raised as a defense to the Attorney General’s state
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`law claims. Such a case is not one in which federal subject matter jurisdiction exists.
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`Montefiore Med. Ctr., 642 F.3d at 327 (the well-pleaded complaint rule is not satisfied “when
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`federal preemption might be invoked as a defense to liability”).3
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`However, in cases where the plaintiff seeks an injunction in addition to a declaratory
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`judgment, federal subject matter jurisdiction may be found as long as the case does not require
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`the interpretation of state law. Fleet Bank, 160 F.3d at 888-89 (citing Shaw v. Delta Air Lines,
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`Inc., 463 U.S. 85, 96 n.14 (1983)). As the Second Circuit explained,
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`the Supreme Court has consistently recognized federal jurisdiction over
`declaratory- and injunctive-relief actions to prohibit the enforcement of state or
`municipal orders alleged to violate federal law . . . . A party is not required to
`pursue “arguably illegal activity . . . or expose itself to criminal liability before
`bringing suit to challenge” a statute alleged to violate federal law.
`Friends of the E. Hampton Airport, Inc. v. Town of E. Hampton, 841 F.3d 133, 144-45 (2d Cir.
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`2016) (quoting Knife Rights, Inc. v. Vance, 802 F.3d 377, 385 (2d Cir. 2015)) (holding that
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`plaintiffs who were threatened with escalating fines and other sanctions under the local laws
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`3 There is an exception to this rule involving complete preemption, but “[t]he Supreme Court has only found three
`statutes to have the requisite extraordinary preemptive force to support complete preemption.” Sullivan v. Am.
`Airlines, Inc., 424 F.3d 267, 272 (2d Cir. 2005) (listing the three statutes: § 301 of the Labor–Management Relations
`Act (LMRA), 29 U.S.C. § 185; § 502(a) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §
`1132(a); and §§ 85 and 86 of the National Bank Act, 12 U.S.C. §§ 85-86). The dispute between Amazon and the
`Attorney General does not involve any of these three statutes, so the complete preemption exception is not triggered
`in this case.
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`4
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`could invoke federal jurisdiction to enjoin enforcement on the ground that the laws were enacted
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`in violation of a federal statute’s procedural prerequisites).
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`Here, the Amended Complaint seeks a declaration regarding federal – not state – law.
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`Specifically, the Amended Complaint “seeks a declaration that, as applied to the facts of this
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`case, the state laws that the [Attorney General] seeks to enforce are preempted by federal law
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`[namely, the Occupational Safety and Health Act and the National Labor Relations Act] and an
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`injunction against the [Attorney General]’s ongoing misuse of those laws against Amazon.” This
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`requires an interpretation of federal law and whether it preempts state law; it does not require
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`interpreting the meaning or scope of state law.
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`In briefing, the Attorney General focuses on paragraphs in the Amended Complaint that
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`discuss her abilities under state law, but those paragraphs are immaterial as to the subject matter
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`jurisdiction issue – they could be removed from the Amended Complaint without altering the
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`relief sought or the relevant analysis for determining the existence of subject matter jurisdiction.
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`In other words, although Amazon includes contentions about the Attorney General exceeding her
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`authority under state law, its requested relief does not require interpreting state law to determine
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`whether or not she actually is. Rather, the only question Amazon puts before the Court through
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`its requested relief is whether state law (regardless of whether the Attorney General is acting in
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`conformity with it or not) is preempted by federal law.
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`If, on the other hand, Amazon also sought an injunction on the ground that the Attorney
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`General is acting outside the scope of her legal authority under state law (by, for example and as
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`alleged, failing to first secure a finding from the state Labor Commissioner that a dangerous
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`condition exists at Amazon’s Staten Island facility), then Amazon would be raising a question of
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`state law that would need to be resolved. For the reasons set forth in Fleet Bank, finding
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`jurisdiction in such a case would not be appropriate. See Fleet Bank, 160 F.3d at 891-92.
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`Because Amazon does not seek such relief, though, jurisdiction obtains under Shaw.
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`II.
`Abstention
`The Attorney General argues next that even if the Court finds it has jurisdiction over the
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`case, Younger abstention requires dismissal.
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`Generally, “federal courts are obliged to decide cases within the scope of federal
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`jurisdiction.” Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 72 (2013). But there are exceptions
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`to this rule, such as where a case would contravene the “longstanding public policy against
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`federal court interference with state court proceedings,” which is based on principles of
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`federalism and comity. Younger v. Harris, 401 U.S. 37, 43-44 (1971). This exception, which
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`has taken the form of the Younger abstention doctrine, applies in three “exceptional” categories:
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`“ongoing state criminal prosecution,” “certain civil enforcement proceedings,” and “civil
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`proceedings involving certain orders uniquely in furtherance of the state courts’ ability to
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`perform their judicial functions.” Disability Rights of New York v. New York, 916 F.3d 129,
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`133 (2d Cir. 2019) (quoting Sprint, 571 U.S. at 78).
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`In this case, it is the second category of cases – “certain civil enforcement proceedings” –
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`that is applicable. “[A] civil enforcement action may warrant abstention when that action is
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`‘akin to a criminal prosecution’ in ‘important respects.’” Helms Realty Corp. v. City of New
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`York, 820 F. App’x 79, 80 (2d Cir. 2020) (quoting Sprint, 571 U.S. at 79).
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`Specifically, abstention may be warranted when the civil enforcement action is
`“initiated to sanction the federal plaintiff . . . for some wrongful act;” when it
`features a “state actor” who “initiates the action;” when “[i]nvestigations are . . .
`involved;” and when the result of such investigations is frequently the “filing of a
`formal complaint or charges.”
`Id. at 80-81 (quoting Sprint, 571 U.S. at 79).
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`Here, there is a pending state action that was commenced by a state actor following an
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`investigation. The purpose of the state action is also plainly to sanction Amazon. Thus, the
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`Sprint test is satisfied.
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`Prior to the Supreme Court’s decision in Sprint, courts evaluated whether to invoke
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`Younger abstention by applying a three-part test that was set forth in Middlesex County Ethics
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`Comm. v. Garden State Bar Association, 457 U.S. 423 (1982). The three criteria in the
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`Middlesex test are: (i) there is a pending state proceeding, (ii) that implicates an important state
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`interest, and (iii) the state proceeding affords the federal plaintiff an adequate opportunity for
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`judicial review of the plaintiff’s federal constitutional claims. In Sprint, though, the Court made
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`it clear that these three factors are not dispositive in deciding whether to apply Younger
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`abstention; rather, they are “additional factors appropriately considered by the federal court
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`before invoking Younger.” Sprint, 571 U.S. at 81-82 (holding that “Younger extends to the three
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`‘exceptional circumstances’ . . . but no further”). Although neither the Supreme Court nor the
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`Second Circuit has resolved how much weight the Middlesex factors should be given after
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`Sprint, see Falco v. Justs. of the Matrimonial Parts of Sup. Ct. of Suffolk Cty., 805 F.3d 425, 427
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`(2d Cir. 2015), both Amazon and the Attorney General focus on these factors in their briefs,
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`rather than on the Sprint test.
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`Even on these additional factors, however, abstention is still appropriate. First, it is
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`undisputed that there is an ongoing state proceeding. Second, with respect to whether an
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`“important state interest” exists, Amazon contends that it does not because New York “has no
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`legally cognizable interest” in resolving issues “that are governed exclusively by federal law and
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`are within the jurisdiction of federal regulators.” But the test for whether an important state
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`interest exists does not turn on whether a specific state activity may be preempted by federal law.
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`Rather,
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`[a] state interest is important . . . where exercise of the federal judicial power
`would disregard the comity between the States and the National Government.
`Resolution of that question turns on whether the state action concerns the central
`sovereign functions of state government. Significantly, however, the Court of
`Appeals has cautioned that a court must not look narrowly to [the State’s] interest
`in the outcome of the particular case, but rather look to the importance of the
`generic proceedings to the State. Further, in order to ascertain the generic
`proceeding involved in the action brought by the state, a court cannot focus solely
`or chiefly upon the style of the state’s pleading, such as the particular causes of
`action pleaded or statutes invoked. Instead, it must consider the underlying nature
`of the state proceeding on which the federal lawsuit would impinge.
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`In re Standard & Poor’s Rating Agency Litig., 23 F. Supp. 3d 378, 409-10 (S.D.N.Y. 2014)
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`(internal quotation and citations omitted).4
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`Here, the Attorney General’s state action seeks to enforce state labor laws and health and
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`safety regulations, and to sanction an employer for allegedly illegal conduct that occurred within
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`the state. In other words, the general nature of the Attorney General’s state case is the
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`enforcement of the state’s laws, particularly those aimed at protecting the health and safety of its
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`citizens. Such an action goes to a fundamental interest of the state as a sovereign. See Cuomo v.
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`Dreamland Amusements, Inc., Nos. 08-cv-7100, 08-cv-6321, 2008 WL 4369270, *10 (S.D.N.Y.
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`Sept. 22, 2008) (holding that Younger abstention was appropriate in an action seeking an
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`injunction against state investigation of immigration law violations on the ground of preemption;
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`explaining that a “state’s interest in enforcing its own laws and investigating their violation
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`cannot seriously be disputed. Moreover, the State of New York has an important interest in
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`4 Amazon suggests that the Court apply the “facially conclusive” or “readily apparent” exception to the Younger
`abstention doctrine. This exception, which exists in other Circuits but has never been adopted by the Second
`Circuit, permits a court to exercise jurisdiction over a case that otherwise calls for abstention where preemption of
`the state law issues is “readily apparent.” See HSBC Bank USA, N.A. v. N.Y. City Comm’n on Human Rts., 673 F.
`Supp. 2d 210, 215 (S.D.N.Y. 2009). Given the importance of comity and the longstanding public policy against
`federal court interference with state court proceedings that underlies Younger, this Court declines to adopt a new
`exception to the doctrine absent a clear holding from the Supreme Court or the Second Circuit.
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`assuring safe, sanitary, and non-discriminatory working conditions for workers in the State.”);
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`Chertock v. Cuomo, No. 07-cv-0077, 2007 WL 9710990, *2 (E.D.N.Y. Nov. 19, 2007) (holding
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`Younger abstention was appropriate in an action seeking to enjoin enforcement of a judgment by
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`the state; finding state interest requirement satisfied because “[s]tates have a palpable and
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`significant interest in investigating and securing recovery for illegal conduct. States also have a
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`substantial interest in investigating and prosecuting violations of their state laws.”).
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`Third, the state forum provides an adequate opportunity for review of Amazon’s federal
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`claims: indeed, Amazon has already asserted its preemption arguments in its motion to dismiss
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`the state proceeding. Amazon contends that the New York state court “is unlikely to afford
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`Amazon the declaratory and injunctive relief it seeks” because “[i]f the state court dismisses the
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`[Attorney General]’s complaint based on Amazon’s federal constitutional arguments, judgment
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`will be entered without any opportunity for Amazon to secure the necessary declaratory and
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`injunctive relief against the [Attorney General]’s ongoing refusal to abide by federal law.” The
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`problem with this argument is that Amazon fails to explain why it cannot seek the injunctive
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`relief it says is necessary through a counterclaim in the existing state court proceeding.
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`Therefore, even considering the non-dispositive Middlesex factors, abstention is still appropriate.
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`There are two exceptions to the Younger abstention doctrine that may lead a court to
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`exercise jurisdiction over a case even if the Sprint test is met. The first exception is for a case
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`involving “extraordinary circumstances” that “render the state court incapable of fairly and fully
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`adjudicating the federal issues before it.” Jordan v. Bailey, 570 F. App’x 42, 44 (2d Cir. 2014).
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`“[S]uch circumstances must be ‘extraordinary’ in the sense of creating an extraordinarily
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`pressing need for immediate federal equitable relief.” Id. (quoting Diamond “D” Const. Corp. v.
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`McGowan, 282 F.3d 191, 201 (2d Cir. 2002)). The facts of the instant case do not present the
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`extraordinary circumstances required for this exception, and Amazon does not contend
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`otherwise.
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`The second exception, and the one that Amazon argues should apply, is where the state
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`actor that commenced the state action did so in bad faith. However, this exception is very
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`narrow. A “federal plaintiff seeking to establish that the bad faith exception to Younger applies
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`must show that ‘the party bringing the state action [has] no reasonable expectation of obtaining a
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`favorable outcome.’” Jackson Hewitt Tax Serv. Inc. v. Kirkland, 455 F. App’x 16, 18 (2d Cir.
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`2012) (quoting Cullen v. Fliegner, 18 F.3d 96, 103 (2d Cir. 1994)). “[A] state proceeding that is
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`legitimate in its purposes, but unconstitutional in its execution – even when the violations of
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`constitutional rights are egregious – will not warrant the application of the bad faith exception.”
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`Schorr v. DoPico, 686 F. App’x 34, 37 (2d Cir. 2017) (quoting Diamond “D” Constr. Corp., 282
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`F.3d at 199). “[I]t is only when the state proceeding is brought with no legitimate purpose that
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`th[e] state interest in correcting its own mistakes dissipates, and along with it, the compelling
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`need for federal deference.” Diamond “D” Constr. Corp., 282 F.3d at 200.
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`Here, Amazon argues that the Attorney General is acting in bad faith, but does not
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`convincingly explain why she has no “reasonable expectation of obtaining a favorable outcome.”
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`Amazon’s contention that federal law preempts the Attorney General’s ability to bring New
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`York Labor Law claims is not as clear-cut as Amazon says it is: neither the Occupational Safety
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`and Health Act nor the National Labor Relations Act are among the short list of federal statutes
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`recognized as having complete preemption over state law. See Sullivan, 424 F.3d at 272; see
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`also Amazon.com, Inc., 2021 WL 3140051, at *6 (explaining that “[t]he Occupational Safety and
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`Health Act (OSHA), on which Amazon here relies, has not joined the ranks of the LMRA,
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`ERISA, and the National Bank Act for [purposes of complete preemption] . . . OSHA does not
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`preempt claims under New York Labor Law § 200 even defensively”). Moreover, Amazon does
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`not explain why the Attorney General’s action – even if brought in bad faith – entirely lacks a
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`legitimate purpose. As noted above, the state has a legitimate interest in ensuring that employers
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`are complying with state labor laws, are enforcing important health safety measures, and are
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`sanctioned for illegal conduct that occurs within the state.5 Thus, the bad faith exception to the
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`Younger abstention doctrine is not appropriate in this case.
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`CONCLUSION
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`In light of the above analysis, although the Court does have subject matter jurisdiction, it
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`will abstain from exercising that jurisdiction under Younger. The Court therefore grants the
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`Attorney General’s motion to dismiss [Dkt. No. 31]. There is no need to resolve Amazon’s
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`motion for summary judgment [Dkt No. 33] in light of the Court’s abstention.
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`SO ORDERED.
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`Dated: Brooklyn, New York
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`August 10, 2021
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`Digitally signed by
`Brian M. Cogan
`______________________________________
` U.S.D.J.
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`5 That the Court finds that New York has a compelling state interest in these matters for purposes of the Younger
`analysis, and that the Occupational Safety and Health Act and the National Labor Relations Act do not completely
`preempt state law, should not be taken as an evaluation of the merits of the Attorney General’s actions under state
`law, or of what relief Amazon is or could be entitled to. In accordance with Younger and its progeny, it is
`appropriate to permit the state court to answer those questions – including whether the Attorney General is acting
`beyond the scope of her authority – in the first instance.
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