MEDIA

May 14, 2010

New Trial Granted In §1983 Action, Bankruptcy Court Stay Of State Case

Published in: New York Law Journal | volume 243

This column reports on several significant, representative decisions handed down recently in the U.S. District Court for the Eastern District of New York. Judge Frederic Block rejected retaliation and hostile work environment claims by two nursing professors at Medgar Evers College. Judge Arthur D. Spatt granted plaintiff’s Rule 59 motion for a new trial in a §1983 action against Suffolk County. Judge Joanna Seybert affirmed a bankruptcy court order enjoining a contempt action against nondebtor third parties. And Judge Nicholas G. Garaufis held that the U.S. Citizenship and Immigration Services may not bar an otherwise proper status adjustment application solely because the applicant neglected to sign the check she had submitted for the filing fee.

Retaliation Claims

In Isenalumhe v. McDuffie, 06-CV-1076 (EDNY, March 17, 2010), Judge Block granted summary judgment to a professor and administrator from the City University of New York (CUNY) charged with retaliating against two professors for speech assertedly protected by the First Amendment.

Plaintiffs Anthony Isenalumhe and Jean Gumbs, tenured nursing professors at CUNY’s Medgar Evers College (MEC), sought compensatory, punitive and injunctive relief under 42 USC §1983, based on the actions of defendant Georgia McDuffie as chair of the MEC Nursing Department. Edison O. Jackson, president of MEC, was sued for allegedly acquiescing in those actions.

In response to the complaint’s ‘blunderbuss approach’ and the ‘moving target’ presented by plaintiffs’ added allegations in their affidavits opposing summary judgment, the court ‘took great pains to establish a binding, exhaustive list of plaintiffs’ claims’ at oral argument. Slip op. 3.

Plaintiffs had opposed the hiring of Ms. McDuffie and ‘took issue with her administration shortly after her arrival.’ Slip op. 2-3. Among other things, plaintiffs alleged that, after Mr. Isenalumhe formally accused Ms. McDuffie of falsifying the results of certain Nursing Department elections, his ‘preferred courses’ that he ‘had taught for years’ were reassigned to ‘other faculty members with less seniority,’ and Mr. Isenalumhe was limited to teaching ‘only clinical sections.’ Mr. Isenalumhe’s clinics were allegedly understaffed, leading to student complaints and a ‘peer review’ that, he claimed, was both procedurally defective and ‘unheard of for tenured professors.’ Slip op. 4-5.

Ms. Gumbs was assigned to a non-teaching, administrative position after accusing Ms. McDuffie of falsely representing that a departmental committee had approved proposed curriculum changes. While Ms. Gumbs was returned to teaching after grieving that decision, both she and Mr. Isenalumhe had continuing confrontations with Ms. McDuffie on a variety of matters, such as Ms. McDuffie’s alleged bypassing of committee recommendations to hire less-qualified candidates and violations of the processes established for entering student grades and evaluating professors. Both plaintiffs alleged that various administrative decisions of Ms. McDuffie, including deprivation of office access and interference with telephone and e-mail service, were in retaliation for their opposition to her policies and practices.

Relying on Garcetti v. Ceballos, 547 U.S. 410 (2006), and the district and circuit court opinions in Weintraub v. Board of Educ., 489 F.Supp.2d 209 (EDNY 2007), 593 F.3d 196 (2d Cir. 2010), Judge Block granted summary judgment to defendants after dividing plaintiffs’ allegations into ‘pre-lawsuit speech and post-lawsuit speech (including the filing of the lawsuit itself).’ Slip op. 19.

The pre-lawsuit speech either: (a) comprised unprotected ’employee speech’ rather than protected ‘citizen speech,’ because it related to plaintiffs’ duties as committee members, or (b) did not involve matters of public concern, because it related principally to plaintiffs’ work assignments or working conditions. Slip op. 19-22. The only retaliatory action alleged with respect to the post-lawsuit speech-Mr. Isenalumhe’s claim that Ms. McDuffie was promoted in retaliation for the lawsuit being filed-was an ‘isolated action . . . insufficient to establish a retaliatory hostile work environment.’ Slip op. 24.

Rule 59 — New Trial

In Ramos v. County of Suffolk, 07 CV 1250 (EDNY, April 26, 2010), a §1983 action, Judge Spatt granted plaintiff’s motion for a new trial pursuant to Fed. R. Civ. P. 59, where the weight of the evidence supported the motion and, more importantly, defense counsel’s improper, inflammatory comments likely affected the jury’s verdict.

Plaintiff alleged that one Gary Feinberg, a physician’s assistant now deceased, had sexually assaulted her while she was an inmate at the Suffolk County jail. Asserting derivative liability against the county and its sheriff, she claimed that a policy or practice led to the assault. At trial, the jury found that the assault never occurred.

Judge Spatt denied plaintiff’s Rule 50(b) motion for judgment in her favor. Plaintiff did not move for judgment as a matter of law before submission of the case to the jury. This did not bar her later motion for the same relief, but it did require plaintiff to show ‘manifest injustice’ in order to prevail here. Plaintiff could not meet this high standard. Slip op. 8-10.

Plaintiff fared better in her Rule 59 motion for a new trial. There was substantial extrinsic evidence, essentially uncontradicted, supporting plaintiff’s testimony about the assault. The weight of this evidence helped to tip the scales with respect to her argument that defense counsel’s improper remarks unduly prejudiced the jury.

The first instance of improper conduct was a violation of Judge Spatt’s pretrial ruling that evidence of plaintiff’s drug use would be admissible only as to her claim for emotional damages, and not as to her credibility about the assault itself. Despite that clear ruling, during his summation defense counsel slipped in a reference to plaintiff’s drug use while apparently alluding to her silence about the assault until the following day:

Why didn’t [plaintiff] make an outcry [about the alleged abuse]? . . . Because she said Gary Feinberg said to her, be a good girl. I’ll get you some medication. I’ll make it easier for you. And you know what, ladies and gentlemen? She’s an admitted drug addict and that could be why she didn’t say a word.

These comments, in the court’s view, connected plaintiff’s history of drug use to the core issue, whether the assault took place.

Counsel also characterized plaintiff as a ‘person who files false statements with the police,’ and added that ‘not long ago’ she ‘filed a false report about being robbed.’ As Judge Spatt observed, this direct attack on plaintiff’s credibility had no basis in the record.

Though plaintiff did not timely object to these statements, a new trial was still warranted because they raised ‘the inflammatory issues of plaintiff’s drug abuse and criminal history,’ reflecting ‘an audacious disregard’ for the prior rulings and the record. Slip op. 11-16.

Bankruptcy Appeal

In The Robert Plan Corp. v. Liberty Mutual Ins. Co., 09 CV 1930 (EDNY, March 23, 2010), Judge Seybert affirmed a Bankruptcy Court order staying a contempt action, pending in Supreme Court, Kings County, against the officers of The Robert Plan Corporation.

In August 2007, appellant Liberty Mutual obtained a judgment in the amount of $236,989.36 against Robert Plan of which $173,313 is still owed. Liberty Mutual then served restraining notices on Robert Plan and a wholly owned subsidiary (the ‘debtors’), prohibiting them from transferring their property, and a deposition subpoena on Robert Plan, which did not respond. Robert Plan thereafter paid out $322,597.51 of its assets, primarily for employee-related expenses.

In August 2008, the debtors filed Chapter 11 petitions in the Bankruptcy Court for the Eastern District of New York. This led the New York Supreme Court to stay contempt proceedings that Liberty Mutual had commenced against the debtors in Queens County, whereupon Liberty Mutual commenced the contempt action in Kings County against two of Robert Plan’s officers for violating the restraining notices. Debtors sought to stay the contempt action against the officers.

Bankruptcy Judge Robert E. Grossman held hearings and requested briefing on issues related to the officers’ right to indemnification from Roberts Plan as a result of the contempt action. Judge Grossman granted debtors’ motion to extend the automatic stay to the officers, finding complete identity of Robert Plan and the officers, because debtors agreed that the officers were entitled to indemnification for any judgment against them.

Liberty Mutual appealed, contending that Judge Grossman lacked subject matter jurisdiction to enjoin the contempt proceeding. Judge Seybert held that 28 USC §1334 provided the bankruptcy court with ‘comprehensive jurisdiction’ to enjoin the action against third parties.

Next, Judge Seybert found that the extension of the automatic stay to the non-debtor officers was justified. The U.S. Court of Appeals for the Second Circuit standard, which requires an immediate adverse economic consequence to the debtors’ estates to justify the extension of the automatic stay to actions against non-debtors, was satisfied by the requirement under Delaware law that Robert Plan indemnify the officers for their attorney’s fees, creating an immediate claim against the estates. Moreover, Robert Plan’s bylaws require it to indemnify the officers if they acted in good faith, and its board had preemptively decided that the officers had acted in good faith and notified Judge Grossman that it would indemnify the officers from any judgment.

The only way that a contempt judgment would not impose adverse economic consequences on the debtors’ estates would be if the officers lost the contempt action and Liberty Mutual proved that the board acted in bad faith when they found the officers acted in good faith. According to Judge Seybert, this was a ‘totally speculative scenario’ and allowing Liberty Mutual to go down this road would further drain the estates. Slip op. 9.

Judge Seybert additionally determined that the officers had an ‘absolute right’ to indemnification under the bylaws, because of the board’s determination that they had acted in good faith. Slip op. 10-11.

Compelling CIS to Act

In Lee v. Holder, 08 CV 664 (EDNY, March 9, 2010), Judge Garaufis granted summary judgment to plaintiff on her claim under the Administrative Procedure Act (APA) seeking to compel the U.S. Citizenship and Immigration Services (CIS) to process her application for an adjustment of her immigration status.

Under the Immigration and Nationality Act, a non-immigrant may become a lawful permanent resident through a procedure known as ‘adjustment of status.’ The alien’s status may be adjusted by the Attorney General, if ‘(1) the alien makes an application for such adjustment, (2) the alien is eligible to receive an immigrant visa and is admissible to the United States for permanent residence, and (3) an immigrant visa is immediately available to him at the time his application is filed.’ 8 USC §1255.

A non-immigrant skilled worker may initiate the process by submitting an I-140 employerbased visa petition. If the I-140 is approved, the petitioner becomes eligible for an immigrant visa and is assigned a ‘priority date’ that places her in a queue for receipt of the visa. Once an immigrant visa becomes available, the applicant must submit Form I-485, signed and accompanied by the correct filing fee. If the I-485 is accepted and the visa was available at the time the I-485 was filed, the application will be adjudicated by the Attorney General.

Plaintiff Sun Hee Lee, a native and citizen of South Korea, had the status of an E-2 nonimmigrant treaty investor. In April 2007, her employer submitted an I-140 petition on her behalf and CIS approved the petition that same month and assigned a priority date of July 6, 2006. In June 2007, the government announced that all priority dates were eligible for issuance of an employment-based visa such as Ms. Lee’s, and that all application forms filed during July were eligible for a status adjustment. On July 2, however, the government changed course and announced that it would not accept any applications received after July 2. On July 17, CIS reversed course again and announced that applications could be filed between July 17 and Aug. 17 for current priority dates.

On July 18, Ms. Lee’s attorney submitted her application, which was shipped to Texas for processing. Two months later, on Oct. 16, 2007, CIS rejected her application, because she had not signed the check she submitted to pay the filing fee and had thus not submitted the ‘proper filing fee.’ Ms. Lee resubmitted her application twice but now her priority date was not eligible and the application was rejected.

Ms. Lee claimed that her failure to sign her check was a ‘typographical error’ and that CIS improperly rejected her application and failed to carry out the functions delegated to them.

As Judge Garaufis held, CIS’s determination of whether the application was properly filed was nondiscretionary: if the required filing fee was attached, CIS was required to perform the ministerial act of granting the application.

The Ninth Circuit has held that an unsigned check was not per se an invalid method of payment, without deciding whether an unsigned check was a proper or wrong filing fee. Blanco v. Holder, 572 F.3d 780 (9th Cir. 2009). Extending that reasoning, Judge Garaufis concluded that an unsigned check was not a wrong filing fee and CIS had acted contrary to authority. Judge Garaufis pointed to regulations applicable to returned checks that give the remitter of the check 14 days to submit proper payment or have the application rejected as improperly filed. The court concluded: ‘It would be inconsistent and irrational to grant a grace period to applicants whose checks are actually dishonored, while flatly rejecting applicants whose check only seem likely to be dishonored.’ Thus, an unsigned check for the correct filing fee was not a wrong filing fee.

Searching the record, Judge Garaufis granted summary judgment for the non-moving plaintiff and determined that CIS’s rejection of Ms. Lee’s application was wrong as a matter of law. The court gave the government the opportunity to determine the method or procedure by which it would comply with the court’s order that CIS place plaintiff in the same position she would have been in without CIS’s unlawful action.

Harvey M. Stone and Richard H. Dolan are partners at Schlam Stone & Dolan. Bennette D. Kramer, a partner of the firm, assisted in the preparation of the article.

[This article is reprinted with permission from the May, 2010, issue of the New York Law Journal. Copyright © 2010 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.]