LLC AURORA TOURISM SERVICES LLC ICONIC TOURS v. LLC NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION DONALD LILOIA (2026)

The following e-filed documents, listed by NYSCEF document number (Motion 002) 53, 54, 55, 56, 57, 58, 59, 79, 80 were read on this motion to/for DISMISSAL..

The following e-filed documents, listed by NYSCEF document number (Motion 003) 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 81were read on this motion to/for DISMISS.

Upon the foregoing documents, in Motion Sequence Number 002, defendant New York City Economic Development Corporation ("NYCEDC") moves for an order dismissing the plaintiffs' complaint with prejudice, and in Motion Sequence Number 003, defendants BILLYBEY Marina Services LLC ("BILLYBEY") and Donald J. Liloia ("LILOIA") move for an order dismissing the plaintiffs' complaint without prejudice, pursuant to CPLR 3211(a)(1), (a)(5), and (a)(7). Motion Sequences Numbers 002 and 003 are consolidated for this decision and are decided as follows.

Plaintiffs New York Princess Cruises 2 LLC ("PRINCESS CRUISES") and Aurora Tourism Services LLC d/b/a Iconic Tours ("ICONIC") seek damages and equitable relief for (1) ultra vires against defendants NYCEDC and BILLYBEY; (2) First Amendment—42 USC 1983 against all defendants; (3) Procedural Due Process—42 USC 1983 against defendants NYCEDC, the CITY OF NEW YORK ("the CITY"), and LILOIA; (4) Equal Protection—42 USC 1983 against defendants NYCEDC, the CITY, and LILOIA; (5) CPLR Article 78 against defendants NYCEDC, the CITY, and BILLYBEY; (6) implied covenant of good faith and fair dealing against defendant BILLYBEY; (7) tortious interference with business relations against defendants BILLYBEY and LILOIA; (8) breach of fiduciary duty against defendant BILLYBEY; and (9) Donnelly Act—Gen. Bus. L. 340 against defendants BILLYBEY and LILOIA.

BACKGROUND

Defendants NYCEDC and BILLYBEY respectively administrate and operate DockNYC, the CITY's public berthing program, which licenses vessels to use CITY-owned piers. Plaintiff PRINCESS CRUISES was granted a revocable 2025 DockNYC permit for boat tours that embark from Pier 36. Section 2(d) of the permits states that licensees shall not use third-party street ticket sellers on public sidewalks for transactions, a prohibition that applies to all permit holders. After learning plaintiff PRINCESS CRUISES was using plaintiff ICONIC for street ticket sales, defendants NYCEDC and BILLBEY notified plaintiff PRINCESS CRUISES about its violation and assigned fines, offering opportunities to cure the defects.

Plaintiff PRINCESS CRUISES continued acting in violation of its permit agreement. Therefore, defendant BILLYBEY revoked plaintiff PRINCESS CRUISES' at-will permit.

For clarity, NYCEDC establishes the policy terms of the DockNYC program, including Section 2(d), while BILLYBEY executes enforcement at the operational level by assessing fines and monitoring compliance. The decision's analysis of selective enforcement relies on BILLYBEY's documented enforcement actions as part of this delegated operational role.

In Motion Sequence Number 002, defendant NYCEDC argues that (1) the ultra vires doctrine and Article 78 causes of action for arbitrary and capricious conduct (Counts I and IV) are time-barred, cite no contrary authority, and fail on the merits; (2) the complaint fails to state 42 USC 1983 causes of action for Equal Protection, First Amendment, and Procedural Due Process violations; and (3) the complaint fails to state the essential elements of a Donnelly Act cause of action.

In opposition, plaintiffs contend that (A) defendant NYCEDC exceeded its statutory authority by enforcing Section 2(d) and that the ultra vires causes of action are proper; (B) the evidence does not "utterly refute" plaintiffs' allegations and is not documentary evidence; (C) defendant NYCEDC acts under the color of state law and is subject to 1983 liability for First Amendment and Procedural Due Process violations; and (D) the complaint states a viable Donnelly Act cause of action.

Under Motion Sequence Number 003, defendants BILLYBEY and LILOIA assert that (1) the permit bars plaintiffs' causes of action; (2) the ultra vires cause of action is time-barred and improperly asserted against defendant BILLYBEY; (3) the complaint fails to state Section 1983 causes of action for First Amendment, Procedural Due Process, and Equal Protection violations; (4) the Article 78 cause of action for arbitrary and capricious conduct is time-barred and fails as a matter of law; (5) the implied covenant of good faith and fair dealing cause of action fails because defendant ICONIC lacks standing and documentary evidence contradicts the allegations; (6) the tortious interference with business relations cause of action fails as a matter of law; (7) the breach of fiduciary duty cause of action fails as a matter of law; (8) the complaint fails to state a Donnelly Act cause of action; and (9) defendant LILOIA is an improper party to this action.

In response, plaintiffs argue that (A) the 2025 permit's "no-suit" and "terminable-at-will" clauses cannot bar constitutional, administrative, or equitable review; (B) the defendants acted under the color of state law and are liable under 42 USC 1983; (C) the implied covenant of good faith and fair dealing creates a cause of action; (D) the defendants owed and breached fiduciary duties to plaintiffs; (E) the defendants conducted tortious interference with business relations, violating New York State law; (F) the defendants engaged in anticompetitive conduct that the Donnelly Act prohibits; and (G) the defendants' remaining defenses are meritless.

DISCUSSION

Pursuant to CPLR 3211 (a)(1), (a)(5), and (a)(7) Motion to Dismiss Cause of Action, a party may move for judgment dismissing one or more causes of action asserted against him on the ground that (1) a defense is founded upon documentary evidence, (5) the cause of action may not be maintained because of arbitration and award, collateral estoppel, discharge in bankruptcy, infancy or other disability of the moving party, payment, release, res judicata, statute of limitations, or statute of frauds, or (7) the pleading fails to state a cause of action.

ULTRA VIRES DOCTRINE - MOTION TO DISMISS

To state a cause of action under the Ultra Vires doctrine, plaintiffs must allege that a government action has surpassed the agency's scope of legal authority.

Here, the defendants' motions to dismiss are granted over plaintiffs' opposition. The complaint alleges that defendant NYCEDC exceeded its statutory authority by regulating commercial activity on public sidewalks. Such impermissible policymaking would make permit Section 2(d) ultra vires. While NYCEDC is the entity responsible for establishing and promulgating the DockNYC permit conditions, including Section 2(d), the record reflects that BILLYBEY, as DockNYC's operator, is responsible for day to day enforcement of these conditions and assesses fines for violations. Accordingly, enforcement actions taken by BILLYBEY are appropriately considered in evaluating plaintiffs' allegations of selective or discriminatory enforcement.

Because the complaint alleges arbitrary and capricious conduct, plaintiffs should have brought the ultra vires action as an Article 78 proceeding. Reclaim the Records v NY City Dept. of Health & Mental Hygiene, No. 153996/2019, 2020 NY Slip OP 34184 (U), at *26, 2020 NY Misc LEXIS 10732, at *26 (Sup Ct NY Cnty Dec. 16, 2020). However, plaintiff PRINCESS CRUISES and plaintiff ICONIC filed this action over four months after the permits were issued. The four-month statute of limitations has run out, so plaintiffs' first and fourth causes of action are time-barred.

Plaintiffs have also improperly asserted the ultra vires cause of action against defendant BILLYBEY. While BILLYBEY conducts day to day operational enforcement of NYCEDC established permit conditions, including issuing fines for Section 2(d) violations, the authority to promulgate and define the scope of Section 2(d) rests solely with NYCEDC. Thus, BILLYBEY cannot be liable for allegedly exceeding statutory authority that it does not possess.

Because the claim is untimely under CPLR 217(1), the Court need not reach the merits. Nonetheless, the Court notes that any ultra vires challenge could proceed only against NYCEDC, which promulgates Section 2(d); BILLYBEY is not the policymaking authority.

1983: FIRST AMENDMENT - MOTION TO DISMISS

To state a cause of action for a 1983 First Amendment violation, plaintiffs must allege that (1) they engaged in constitutionally protected speech and (2) an impermissible restriction was placed on that speech.

Here, the defendants' motions to dismiss plaintiffs' 1983 First Amendment cause of action are granted over plaintiffs' opposition. The complaint alleges that Section 2(d) constitutes a content-based restriction on commercial speech by barring solicitation through third-party street ticket sellers and selectively enforcing this provision against plaintiffs. However, Section 2(d) regulates the commercial conduct of ticket transactions rather than speech itself. Furthermore, the prohibition only restricts third-party street ticket sellers, not all third-party ticket sellers. The First Amendment is not implicated. See Real Est. Bd. Of NY, Inc. v City of NY No. 24-CV-9678 (RA), 2025 US Dist LEXIS 110088, at *19 (SDNY June 10, 2025).

Thus, the defendants' motions to dismiss plaintiffs' 1983 First Amendment cause of action are granted with prejudice over plaintiffs' opposition because the plaintiffs have not engaged in constitutionally protected speech and the Section 2(d) restrictions are permissible.

1983: PROCEDURAL DUE PROCESS - MOTION TO DISMISS

To state a cause of action for a 1983 Procedural Due Process violation, plaintiffs must allege that (1) a property or liberty interest exists that was deprived and (2) the deprivation of that interest lacked due process. Radwan v. Manuel, 55 F4th 101, 123 (2d Cir. 2022).

Here, defendants' motions to dismiss are granted over plaintiffs' opposition. Plaintiffs claim property interests in the 2025 DockNYC permit, in plaintiff ICONIC's NYC DOT permits, and in the goodwill and going-concern value of plaintiffs' enterprise. The complaint alleges defendant BILLYBEY deprived plaintiffs of notice and an opportunity to be heard, violating the Fourteenth Amendment, by terminating the 2025 permit. However, contracts terminable at will do not create constitutionally protected property interests. City of NY v Shellbank Rest. Corp., 169 AD3d 581, 582 (1st Dept 2019). Plaintiff PRINCESS CRUISES thus lacks a property interest in the permit. Moreover, the permit is "terminable at will for any reason or no reason at any time." (NYSCEF Doc. No. 16) at 2. The permit clearly expresses that permittees cannot transact with third-party street ticket sellers. Because the permit was terminable at will, plaintiffs were not legally entitled to notice or an opportunity to be heard. Any warnings provided by BILLYBEY were voluntary and do not create a protected entitlement. Thus, the defendants' motions to dismiss plaintiffs' cause of action for violation of 42 USC 1983 Procedural Due Process rights are granted with prejudice over plaintiffs' opposition because the plaintiffs lack a constitutionally protected property interest.

1983: EQUAL PROTECTION - MOTION TO DISMISS

To state a cause of action for a 1983 Equal Protection violation because of "selective enforcement," plaintiffs must allege that (1) the plaintiffs were selectively treated in comparison to similarly situated counterparts and (2) that selective treatment was based on impermissible considerations, such as immutable or protected characteristics, an intent of limiting or punishing the exercise of constitutional rights, or a malicious or bad-faith intent to injure. See Karakash v Del Valle, 194 AD3d 54, 66 (1st Dept 2021); Komatsu v City of NY, No. 23-CV-5406 (LTS), 2024 US Dist LEXIS 71351, at *26 (SDNY 2024).

Here, the defendants' motions to dismiss plaintiffs' 1983 Equal Protection cause of action are granted over the plaintiffs' opposition. Despite listing Equal Protection in the prayer for relief as the Fourth Cause of Action, plaintiffs do not directly discuss the Equal Protection cause of action in the complaint. Instead, the Fourth Cause of Action section discusses arbitrary and capricious agency action. The prayer for relief inexplicably lists CPLR Article 78 as the Fifth Cause of Action. It is unclear whether the plaintiffs purposely omitted information or made a mistake.

As the complaint's Fourth Cause of Action does not plead an Equal Protection claim, the Court treats plaintiffs' Equal Protection arguments, raised only in the memorandum of law, as an attempted but inadequately pled cause of action. The Court addresses these arguments in the alternative to clarify that, even if properly pleaded, the allegations would still fail to state a claim.

Although plaintiffs list "Equal Protection" as their Fourth Cause of Action in the prayer for relief, the section of the complaint labeled as the Fourth Cause of Action instead addresses arbitrary and capricious conduct. As a result, the complaint does not clearly set forth a standalone Equal Protection claim. Nevertheless, even assuming plaintiffs intended to assert such a claim, the allegations remain insufficient for the reasons explained below.

In Memorandum of Law in Opposition to Motion to Dismiss (NYSCEF DOC NO 79), plaintiffs contend that similarly situated competitors engaged in identical commercial activity, yet defendant NYCEDC only enforced Section 2(d) against plaintiffs. The plaintiffs contend this is a plausible allegation of disparate treatment and discriminatory intent, sufficient for an Equal Protection cause of action. However, plaintiffs insufficiently allege that Top View, Circle Line, and Big City are similarly situated competitors, relying on bare, conclusory, and speculative statements, inadequate for surviving a motion to dismiss. See Feldman v Nassau Life Ins. Co., 224 AD3d 801, 804 (2d Dept, 2024). The tour companies mentioned did not receive DockNYC use permits from defendant BILLYBEY. (Liloia Aff. ¶ 26). If the competitors are similarly situated, the complaint still fails to allege the termination was because of impermissible considerations. Inconsistent enforcement alone, if it occurred, does not reveal discriminatory intent.

Thus, the defendants' motions to dismiss plaintiffs' 1983 Equal Protection violation are granted with prejudice over plaintiffs' opposition because the presence of similarly situated competitors is questionable, plaintiffs have not established discriminatory intent, and the complaint does not allege plaintiffs' contentions in the numbered cause of action.

CPLR ARTICLE 78 - MOTION TO DISMISS

To state a cause of action for arbitrary and capricious conduct under CPLR Article 78, plaintiffs must allege that a final administrative determination lacked a rational basis, such as an agency not following its own rules or not basing a decision in fact. Reclaim the Records v NY City Dept. of Health & Mental Hygiene, No. 153996/2019, 2020 WL 7405643, at *9 (Sup Ct

NY Cnty Dec. 16, 2020). The court cannot review the facts de novo or substitute its judgment for the agency's own.

Here, the defendants' motions to dismiss plaintiffs' Article 78 cause of action for arbitrary and capricious conduct are granted over plaintiffs' opposition. The complaint alleges that defendants' determinations were arbitrary and capricious because the defendants misinterpreted Section 2(d), ignored DOT permits authorizing the prohibited conduct, imposed an unjustified penalty, selectively enforced restrictions, and the determinations deviated from the agencies' own procedures. Article 78 proceedings must be commenced within four months after the administrative determination to be reviewed becomes final and binding upon the petitioner (CPLR 217[1]). The determination plaintiffs challenge is the February 19, 2025 imposition of fines and the subsequent revocation of the permit—not the earlier permit issuance date. Plaintiffs commenced this action on August 8, 2025, more than four months after those determinations became final and binding. The Article 78 claim is therefore untimely.

Thus, defendants' CPLR 3211 (a)(5) motions to dismiss plaintiffs' Article 78 arbitrary and capricious conduct cause of action are granted with prejudice over plaintiffs' opposition because the action is time-barred.

IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING - MOTION TO DISMISS

To state a cause of action for breach of the implied covenant of good faith and fair dealing, plaintiffs must allege that (1) a contract existed between the parties at issue and (2) a party acted in a manner that effectively deprived the other party of the contract's benefits. See Parlux Fragrances, LLC v S. Carter Enters., LLC, 204 AD3d 72, 91 (1st Dept 2022).

Here, defendant BILLYBEY and defendant LILOIA's motion to dismiss (Motion Sequence Number 003) is granted over plaintiffs' opposition. The complaint alleges that the 2025 permit creates contractual rights subject to an implied covenant of good faith and fair dealing. Moreover, the complaint alleges that defendant BILLYBEY selectively enforced the agreement against plaintiffs, frustrating plaintiffs' reasonable contractual expectations.

First, because plaintiff ICONIC has no contract with defendant BILLYBEY, it lacks standing for this cause of action. (NYSCEF No. 61 at 16).

Factual allegations are entitled to a presumption of truth and reasonable inference, yet documentary evidence that contradicts the alleged facts eliminates any entitlement and is grounds for dismissal under CPLR 3211 (a). Defendant BILLYBEY has fined two other Pier 36 permit holders for Section 2(d) violations. (Liloia Aff. Exhs. K-L). This plainly contradicts the allegations of selective enforcement. Furthermore, Section 2(d) is in plain language, plaintiff PRINCESS CRUISES has a duty to read, and defendant BILLYBEY notified plaintiff about its violations. Enforcing Section 2(d) against plaintiff PRINCESS CRUISES could not have frustrated any reasonable contractual expectations.

Thus, defendants BILLYBEY and LILOIA's motion to dismiss plaintiffs' cause of action for breach of the implied covenant of good faith and fair dealing is granted with prejudice over plaintiffs' opposition.

TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS - MOTION TO DISMISS

To state a cause of action for tortious interference with business relations, plaintiffs must allege that a defendant interfered through wrongful means or solely out of malice to harm a plaintiff's business relationship with a third party. See Carvel Corp. v. Noonan, 3 NY3d 182, 190 (2004). Wrongful means are "physical violence, fraud or misrepresentation, civil suits and criminal prosecution, and some degrees of economic pressure." Guard-Life Corp. v S. Parker Hardware Mfg. Corp., 50 NY2d 183, 191 (1980).

Here, defendants BILLYBEY and LILOIA's motion to dismiss is granted over plaintiffs' opposition. The complaint alleges that plaintiffs had business relationships the defendants intentionally interfered with, were maliciously motivated to harm plaintiffs, and unlawfully acted, constituting wrongful means. Accepting the factual allegations as true and giving the plaintiffs every favorable inference, the complaint still makes bare and conclusory statements without specific facts detailing the misconduct. In fact, defendant BILLYBEY was incentivized to maintain the permit and gave the plaintiff numerous chances to remedy its violations before termination. (See Liloia Aff. Exh. A). This does not resemble malice-driven behavior. Furthermore, the complaint insufficiently alleges that the defendants used "wrongful means" constituting an independent tort or crime. Defendants only enforced a valid provision of which plaintiffs had notice and consented. Plaintiffs' cause of action fails as a matter of law.

Thus, defendants' CPLR 3211 (a)(7) motion to dismiss plaintiffs' tortious interference with business relations cause of action is granted with prejudice over plaintiffs' opposition.

BREACH OF FIDUCIARY DUTY - MOTION TO DISMISS

To state a cause of action for breach of fiduciary duty, plaintiffs must allege that (1) a fiduciary relationship exists between the parties, (2) defendants breached the fiduciary duty through their misconduct, and (3) plaintiffs suffered damages as a result. EBC I, Inc. v Goldman Sachs & Co., 5 NY3d 11, 19-20 (2005). A fiduciary relationship requires a "higher level of trust," with a party obligated to act for or give advice for the other's benefit. Id.

Here, defendants BILLYBEY and LILOIA's motion to dismiss is granted over plaintiffs' opposition. The complaint alleges that because defendant BILLYBEY operated CITY-owned DockNYC facilities, defendant BILLYBEY owed a fiduciary duty to plaintiffs, which defendant BILLYBEY breached through its selective enforcement. First, plaintiff ICONIC is not a permittee and lacks standing in this cause of action. Moreover, the complaint insufficiently states that plaintiff PRINCESS CRUISES and defendant BILLYBEY operated with a "higher level of trust" or in a capacity beyond a permit-permittee relationship. Allegations of fiduciary duty are bare and conclusory. The complaint also fails to allege the defendants' misconduct, since it is well-established that defendant BILLYBEY enforced Section 2(d) against other permittees and gave the plaintiff opportunities to cure its violations. Construing every inference in the plaintiffs' favor, the factual allegations are insufficient. The cause of action fails as a matter of law.

Thus, defendants BILLYBEY and LILOIA's motion to dismiss plaintiff's breach of fiduciary duty cause of action is granted with prejudice over plaintiffs' opposition.

DONNELLY ACT (GEN BUS L 340) - MOTION TO DISMISS

To state a cause of action for a Donnelly Act violation, plaintiffs must allege (1) the relevant market, (2) the purported conspiracy's nature and effects, (3) how the economic impact does or could restrict trade in the market, and (4) a conspiracy or reciprocal relationship between the legal or economic entities. Neri's Land Improvement, LLC v J. J. Cassone Bakery, Inc., 65 AD3d 1312, 1315 (2d Dept 2009).

Here, the defendants' motions to dismiss are granted over plaintiffs' opposition. The complaint alleges that Section 2(d)'s ban on third-party street ticket sellers is a horizontal agreement and concerted refusal to deal that unreasonably restrains trade. This allegedly forecloses the distribution channel for sightseeing cruise tickets and disproportionally injures plaintiffs. However, the complaint fails to identify a relevant market and the alleged restraint on trade's nature and effects. Because the piers are publicly owned and defendant BILLYBEY manages them for defendant NYCEDC, their control is presumptively legal and does not violate state antitrust laws. See Continental Guest Servs. Corp. v International Bus Servs., Inc., 92 AD3d 570, 573-574 (1st Dept 2012). The termination may have harmed plaintiffs' businesses, yet this alone is not anticompetitive market impact. See Benjamin of Forest Hills Realty Inc. v Austin Sheppard Realty, Inc., 34 AD3d 91, 97-98 (2d Dept 2006). Furthermore, the complaint fails to plausibly allege a conspiracy between the parties. Defendants BILLYBEY and NYCEDC are not in competition with each other or with the plaintiffs. Based on the evidence, no reasonable jury could conclude that concerted action of horizontal agreement has occurred.

Plaintiffs characterize the restriction in Section 2(d) as a horizontal restraint among competitors. The record demonstrates the opposite: NYCEDC, a public development corporation, contracts with BILLYBEY as a vertically related operator. Vertical relationships cannot constitute horizontal conspiracies as a matter of law. This structural fact alone defeats plaintiffs' Donnelly Act theory.

Thus, defendants' motions to dismiss plaintiffs' cause of action under the Donnelly Act are granted with prejudice over plaintiffs' opposition because the complaint fails to state essential elements of a Donnelly Act cause of action.

Therefore, the defendants' motions to dismiss all plaintiffs' causes of action are granted with prejudice over plaintiffs' opposition, and plaintiffs' complaint is dismissed in its entirety based upon documentary evidence, time-barred claims, and failure to state causes of action. Accordingly, it is

ORDERED that defendants' motions to dismiss are granted in their entirety, and the complaint is dismissed with prejudice as against all three defendants; and it is further

ORDERED that the Clerk is directed to enter judgment in favor of all three defendants dismissing this action, together with costs and disbursements as taxed by the Clerk upon submission of an appropriate bill of costs; and it is further

ORDERED that counsel for defendants shall serve a copy of this Decision and Order with notice of entry upon plaintiffs, the County Clerk, and the Clerk of the General Clerk's Office within twenty days of entry.

This constitutes the Decision and Order of the Court.

DATE 9/2/2026

JAMES G. CLYNES, J.S.C.

James G. Clynes, J.