19

- 161

- cv Weisshaus v. Port Authority UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
R ULINGS BY SUMMARY OR DER DO NOT HAVE PREC EDENTIAL EFFECT . C ITATION TO A SUMMARY ORDER FILED ON OR AFTER J ANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ' S L OCAL R ULE 32.1.1. W HEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COU RT , A PARTY MUST CITE EITHER THE F EDERAL A PPENDIX OR AN ELECTR ONIC DATABASE ( WITH THE NOTATION
" SUMMARY ORDER "). A PARTY CITING A SUMM ARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRES ENTED BY COUNSEL . At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marsh all United States Courthouse, 40 Foley Square, in the City of New York, on the 28 th day of May , two thousand twenty

. PRESENT: BARRINGTON D. PARKER , DENNY CHIN , SUSAN L. CARNEY , Circuit Judges

.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x YOEL WEISSHAUS , Plaintiff

- Appellant ,

- v - 19

- 161

- cv PORT AUTHORITY OF NE W YORK & NEW JERSEY, Defendant

- Appellee , NEW YORK STATE, NEW YORK STATE ASSEMBLY, NEW YORK S TATE SENATE, STATE OF NEW JERSEY, NEW JERSEY STATE LEGISLATOR, NE W JERSEY STATE GENERAL ASSEMBLY, NE W JERSEY STATE SENATE, JOHN DOES 1 THROUGH 20,- 2

- JANE DOES 1 THROUGH 20, Defendants.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x FOR PLAINTIFF

- APPELLANT : YOEL WEISSHAUS , pro se , New Milford, New Jersey.
FOR DEFENDANT

- APPELLEE : KATHLEEN G

. MILLER , The Port Authority of New York and New Jersey, New York, New York. Appeal from the United States District Court for the Southern District of
New York ( Eaton , J. ). 1 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED in part and VACATED in part, and the action is REMANDED for further proceedings
consistent with this order.
Plaintiff

- a ppellant Yoel Weisshaus, proceeding pro se , sued defendant

appellee Port Authority of New York and New Jersey ( the " P ort A uthority" ) , claiming, inter alia , that toll increases for the Port Authority' s river crossings violated his right to
travel. His complaint was sua sponte dismissed in 2011

. On appeal, w e affirmed the
dismissal of a ll claims , except we remand ed for the district court to consider whether
Weisshaus had adequately pleaded a do rmant Commerce Clause claim. See Weisshaus

1 Judge Richard K. Eaton, of the United States Court of International Trade, sitting by designation

.- 3

- v. Port Auth. of N.Y. & N.J. , 497 F. App ' x 102 , 104

- 05 (2d Cir. 2012). We noted that the district court could, in its discretion, stay the case pending resolution of a similar case brought against the Port Authority by AAA Northeast and other AAA entities (collectively, " AAA " ). Id . at 105. On remand, i n an amended compla int, Weisshaus asserted three claims
under the dormant Commerce Clause based on: (1) the setting of tolls to fund projects unconnected to the Port Authority's "interdependent transportation system" ("ITN"); (2) the discount given to E

- ZPass users as compared to those who pay tolls in cash; and ( 3 ) the setting of tolls to fund future projects. He also asserted other claims not based
on the dormant Commerce Clause. The P ort A uthority moved to dismiss the new complaint for failure to state a claim, or to stay the case pending decision in the AAA

case. The P ort A uthority provided exhibits from the AAA case in support. The district court stayed Weisshaus ' s case until summary judgment was granted for the P ort A uthority in the AAA case. D. Ct. Dkt. No . 56; s ee also AAA Ne. v. Port Auth. of N.Y. & N.J. ( " AAA " ) , 221 F. Supp. 3d 374 , 396 (S.D.N.Y. 2016). After the stay was lifted, Weisshaus moved to file a second amended complaint

. T he district court denied that
motion . It considered converting the P ort A uthority' s motion to dismiss to a motion for summary judgment, but did not do so; in the end, it granted the Port Authority's
motion to dismiss , rel ying in part on factual findings the court had made in AAA

.- 4

- This appe a l follow ed

. We assume the parties ' familiarity with the underlying facts, the procedural history, and the issues on appeal.
I. Standards of Review
We review de novo a district court ' s dismissal for failure to state a claim. Smith v. Hogan , 794 F.3d 249, 253 (2d Cir. 2015). While we ordinarily " review denial of leave to amend under an abuse of discretion standard, when the denial of leave to amend is based on a legal interpretation, such as a determination that amendment would be futile, a reviewing court conducts a de novo review. " Id. (internal quotation
marks and alterations omitted) (italics added)

. II. Non
- ITN Projects Claim In deciding a motion to dismiss for failure to state a claim, this Court (and the district court) should not consider matters outside the pleadings. See Nakahata v. N.Y.

- Presbyterian Healthcare Sys. , Inc. , 723 F.3d 192, 202 (2d Cir. 2013). Courts must li mit
their consideration to : (1) " the factual allegations in the

. . . complaint, which are accepted as true "; (2) " documents attached to the complaint as an exhibit or incorporated in it by reference "; (3) " matters of which judicial notice may be taken "; o r (4) " documents either in plaintiff ['s] possession or of which plaintiff [] had knowledge
and relied on in bringing suit. " Roth v. CitiMortgage Inc. , 756 F.3d 178, 180 (2d Cir. 2014) (internal quotation and alterations marks omitted).- 5

- As for judicial notice, Federal Rule of Evidence 201(b) provides that courts may take judicial notice only of facts outside the trial record that are " not subject to reasonable dispute. " Fed. R. Evid. 201(b). " Such facts must either be (1) generally
known with in the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. " Int ' l Star Class Yacht Racing Ass ' n v. Tommy Hilfiger U.S.A., Inc. , 146 F.3d 66, 70 (2d Cir. 1998) (internal quotation marks omitted). " A court may take judicial
notice of a document filed in another court not for the truth of the matters asserted in the other litigation, but rather to est ablish the fact of such litigation and related filings. " Id. (internal quotation marks omitted). " Facts adjudicated in a prior case do not meet either test of indisputability contained in Rule 201(b): they are not usually common knowledge, nor are they d erived from an unimpeachable source. " Id. ; see also Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc. , 969 F.2d 1384, 1388

- 89 (2d Cir. 1992) ( noting
that the district court overstepped the bounds of judicial note when it relied on

a finding of fact from a bankruptcy court order).

" [W]here matter outside the pleadings is offered and not excluded by the trial court, the motion to dismiss should be converted to a motion for summary judgment. " Nakahata , 723 F.3d at 202

- 03 ; see also Fed. R. Civ. P. 12(d) ( " If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under- 6

- Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion. " ). However, " reversal for lack of conversion is not required unless there is reason to believe that the extrinsic evidence actually affected the
district court ' s decision and thus was not at least implici tly excluded. " Amaker v. Weiner , 179 F.3d 48, 51 (2d Cir. 1999). We conclude that the district court erred in dismissing the non

- ITN projects claim. The P ort A uthority submitted with its motion evidence produced in AAA . The P ort A uthority relied on this evidence for the proposition that its ITN system was unprofitable. The district court did not convert the motion to one for summary judgment, but nonetheless cit ed to factual findings in the AAA decision

. In doing so,
the district court a pparently believed it could take judicial notice of the factfinding in AAA

. For instance, in examining whether revenues were diverted to non

- ITN projects, the court described the findings in AAA and then concluded: Faced by the full weight of these facts, Weisshaus has not shown that his allegations of fact could lead the court to reasonably find the Port Authority liable on facts that have already been determined to foreclose liability. Thus, plaintiff’s claim that portions of the 2011 Toll Increase are being diverted to projects not functionally related to the ITN fails to state a claim under the dormant Commerce Clause. Because the court previously decided that there were no toll revenues that could have been diverted to projects outside of the ITN, pl aintiff’s claim that the 2011 Toll Increase is being used to fund non

- ITN projects . . . necessarily fails to allege facts sufficient to satisfy the pleading standard. S. App'x at 29

.- 7

- The findings in AAA , however , were not subject to judicial notice , and Weisshaus disputed or attempted to distinguish a number of facts drawn from those
cases that were material to the decision to dismiss the non - ITN projects claim in this
case. Because that use of facts from AAA was error, the matter is remanded for th e district court to convert the motion to one for summary judgment, in whole or in part,
and to permit Weisshaus an opportunity to submit evidence in opposition to the motion. Of course, the district court is free, upon such conversion, to consider the

ev identiary materials submitted by the Port Authority. We express no opinion as to the
merits of Weisshaus ' s claim.
III. Points That Are Affirmed Despite the error discussed above, there are aspects of the district court ' s decision that we affirm.
A. Other Dormant Commerce Clause Claims Weisshaus argues that the Port Authority's cash toll surcharge violates the
dormant Commerce Clause because it " penalize[es] drivers for not having E

- ZPass

. " Appellant's Br. at 49. He contends that the district court erred when it considered the
benefits that E

- ZPass confer s on all drivers

-- that is, better traffic flow

-- because the court "stepped outside the four corners of the complaint []" to make such a finding. Appellant's Br. at 51. We disagree. Weisshaus at tached a Port Authority press release to his amended complaint, which explained the Port Authority's reason for discounting- 8

- the toll price for E

- ZPass users : to decrease traffic congestion. In nearly a decade of litigation, Weisshaus has never contended t hat this benefit was inauthentic, nor does he do so on appeal. Accordingly, the district court appropriately relied on the documents incorporated into Weisshaus's amended complaint , and it did not err when it dismissed
his cash toll surcharge claim

. Simi larly, we affirm the district court's dismissal of Weisshaus's future projects claim, also raised under the dormant Commerce Clause . There, he argues that the Port Authority cannot raise toll prices "to fundraise revenues for future facilities, years in a dvance" because it may never deliver a benefit to those paying the increased
rate. Appellant's Br. at 54. When determining whether a fee charged by a government entity violate s the Commerce Clause, we consider whether the fee "confer[s] an actual

or potential benefit " on those who pay

. See Bridgeport & Port Jefferson Steamboat Co. v. Bridgeport Port Auth. , 567 F.3d 79, 87 (2d Cir. 2009) (emphasis added). A fee is permissible if it supports a project with " at least a functional relationship to facili ties used by the fee payers ." Id. (internal quotation marks omitted). Here, the Port Authority plans to use the funds to "maintain and modernize the bridges and tunnels of the ITN," Appellee's Br. at 23, which satisfies the "functional relationship" requ irement ,
see Bridgeport , 567 F.3d at 87

. Accordingly, the district court did not err in dismissing Weisshaus's future projects claim.- 9

- B. Scope of Our Prior Mandate

" The scope of a mandate may extend beyond express holdings, and precludes relitigation both of matters expressly decided [and] . . . impliedly resolved by the appellate court. " In re Coudert Bros. LLP , 809 F.3d 94, 99 (2d Cir. 2015) (internal quotation mar ks and alterations omitted). " A mandate, therefore, may expressly dispose of certain issues raised on appeal, or if the disposition of an issue is necessarily implied by our decision, a mandate may also foreclose such an issue from being considered by the lower court. " Id. (internal quotation marks omitted). " The district court must follow both the specific dictates of the remand order as well as the broader spirit of the mandate. " Id. (internal quotation marks omitted). Here, our remand order directed the district court to " analyze the adequacy of Weisshaus ' s pleadings with respect to a dormant Commerce Clause claim by applying the standard the Supreme Court set out

. . . for analyzing the reasonableness of fees charged for use of state

- provided facili ties. " Weisshaus , 497 F. App’x at 105. We instructed the district court " to determine in the first instance whether
Weisshaus has adequately pleaded such a claim or should be granted leave to amend
the claim. " Id. at 104

- 05. We then affirmed the dismissal of Weisshaus ' s claims in all other respects. Id. at 106. To the extent that Weisshaus attempted on remand to raise
claims other than the dormant Commerce Clause, the district court was correct to dismiss them as beyond the scope of this Court ' s mandate.- 10

- C. Minimum Wage Claim In his original complaint, Weisshaus asserted that the post

- 2011 toll rate

" exceeds the minimum wage guideline of what a person under such income conditions
can afford . . . . Thus, these tolls are targeted to restrict minimum wage earners the right
to travel. " Our prior panel affirmed the dismissal of Weisshaus ' s right

- to

- travel claim, stating that " travelers do not have a constitutional right to the most convenient form of travel, and minor restrictions on travel simply do not amount to the denial of a fundamental right. " Weisshaus, 497 F. App’x at 10 4 (internal quotation marks omitted).
In his ame nded complaint, Weisshaus made essentially the same allegation that the toll was prohibitively expensive for a minimum wage earner, but
instead p resented it as the foundation of a dormant Commerce Clause claim. He
asserted that the toll rate ' s chilling ef fect on travel for prospective minimum wage earners discriminated against interstate commerce. An independent review of the record and relevant case law reveals that the district court properly held that this claim fares no better when pursued under the C ommerce Clause.
IV. Leave to Amend
The district court ' s denial of Weisshaus ' s motion to amend the complaint was based, at least in part, on the factfinding it drew from AAA , which Weisshaus disputed. See S. App'x at 34 ( " To the extent that plaintiff ' s Proposed Second Amended Complaint claims that the ITN was operating at a profit, and therefore, the need for the- 11

- 2011 Toll Increase was motivated by an ' ulterior motive of setting the tolls at its highest level, ' the court notes that it has previously ad dressed the issue in AAA

. . . . " ). The
district court should reconsider its denial of that motion for the reasons discussed
above.
We have considered all of Weisshaus ' s remaining arguments and find them to be without merit. Accordingly, we AFFIRM the j udgment of the district court in part, VACATE in part, and REMAND the action for further proceedings consistent
with this order.
FOR THE COURT: Catherine O = Hagan Wolfe, Clerk of Court