This column reports on several significant, representative decisions handed down recently in the U.S. District Court for the Eastern District of New York covering areas that include the following: grand jury subpoenas, attorney’s fees, sexual harassment and maritime law and limitation of liability.
Grand Jury Subpoenas
In United States v. Bellomo, 02 CR 140 (EDNY, April 10, 2002), Judge I. Leo Glasser denied a motion by co-defendant Vincent Gigante to quash a grand jury subpoena, and to preclude other subpoenas, directing certain doctors to testify. The court disagreed with Mr. Gigante’s argument that the subpoenas had the sole purpose of gathering evidence on a pending indictment.
In 1997, Mr. Gigante was convicted, after a jury trial, on various racketeering charges. Before that trial there had been extensive hearings to assess Mr. Gigante’s assertion that he was mentally incompetent and too physically fragile to stand trial. Judge Glasser ultimately rejected those claims, and found that Mr. Gigante’s mental incompetence was feigned.
In February 2002, an indictment was filed charging Mr. Gigante and others with racketeering plus obstruction of justice by misleading doctors regarding his mental fitness. The government later served a post-indictment subpoena on a Dr. Gutheil. The defense moved to quash that subpoena and to preclude any other subpoenas directed to doctors who had previously testified on behalf of Mr. Gigante, on the ground that the real purpose of any such subpoenas was improper – to obtain evidence for use at trial.
In opposing the motion, the government asserted several legitimate purposes for the subpoenas. The government said, for example, that investigation was continuing as to whether others might have assisted Mr. Gigante’s spurious claims of incompetence, possibly warranting a superseding conspiracy count. The doctors in question were witnesses to relevant events.
On these facts Judge Glasser concluded that the served and contemplated subpoenas had a proper dominant purpose.
In Stavitzky v. Board of Elections in the City of New York, 01 CV 5639 (EDNY, April 30, 2000), Judge David G. Trager, applying a lodestar calculation, awarded $6,125 in attorney’s fees to plaintiffs as the prevailing party in a 1983 action. Plaintiffs had moved for $14,755 in fees.
In July 2001, plaintiff Stavitsky filed a petition to be a candidate in the Democratic primary for the New York City Council’s 47th District seat, in Kings County. To qualify for the ballot, the petition had to have 900 signatures of party members in the district. Another candidate, defendant Eyzenberg, filed a challenge with the Board of Elections, which invalidated some of the signatures, but not enough to disqualify Stavitsky.
Separately, Eyzenberg and co-defendant Brooks-Krasny commenced a proceeding in Kings County Supreme Court to invalidate the petition. The court found that the petition had only 897 valid signatures, and directed the board not to list Stavitsky on the ballot.
Parallel challenges in Bronx County were also made to candidate Tabia’s petition, resulting in a court order adverse to Tabia.
In August 2001, Stavitsky, Tabia and others associated with their campaigns filed this federal action asserting that their constitutional rights had been violated and seeking a preliminary injunction to direct the board to place their names on the ballots. Stavitsky’s motion was granted and Tapia’s was denied. The Second Circuit dismissed an appeal from the order granting relief to Stavitsky.
In calculating attorney’s fees, Judge Trager used the lodestar method, which multiplies the number of hours reasonably expended by the applicable hourly rate. Plaintiffs’ attorneys, who had represented both Stavitsky and Tapia, claimed 45.4 hours spent on the Stavitsky matter, and an hourly rate of $325, resulting in a request for $14,755. But as Judge Trager noted, 41.8 of the 45.4 hours spent by plaintiffs’ attorneys benefited both Stavitsky, who prevailed, and Tapia, who did not. The court therefore awarded only half of the 41.8 hours that benefited both candidates, for a total of 20.9 hours. The 3.6 hours devoted exclusively to Stavitsky received full credit.
As to the "reasonable rate," Judge Trager observed that recent fee awards in the Eastern District have ranged from $200 to $275 an hour for partners.
Despite the claim by plaintiffs’ attorneys that their experience entitled them to $325 an hour, Judge Trager found $250 per hour to be reasonable.
The next issue was which losing party had to pay the fees. Because the candidate who challenged Tapia did not lose, he was not responsible for any payments. The board, which upheld Stavitsky’s petition, was also not responsible for any fees. The board was named as a defendant only to effectuate any relief that might be granted.
This left only Eyznberg and Brook-Krasny, who were found jointly and severally liable. Without their attempts to keep Stavitsky off the ballot, she would not have had to retain her attorneys.
In Rovira v. New York Apparel Sales, 01 CV 2231 (EDNY, May 31, 2002), Judge Glasser denied defendants’ motion to dismiss a sexual harassment claim under Title VII and related state causes of action for negligent supervision, assault and constructive discharge. The court found that Title VII’s definition of "employer" as an organization employing at least 15 people was a substantive precondition to liability rather than a basis for subject-matter jurisdiction.
Plaintiff alleged that the company and its employees had sexually harassed her. According to her complaint, (1) the company was negligent in the selection, investigation, hiring, training, and supervision of its employees; (2) the company forced her resignation because of her unwillingness to be sexually harassed; and (3) defendant Steve Forman assaulted her. The complaint was devoid of any details concerning the alleged assault or sexual harassment.
Defendants moved to dismiss the complaint for lack of subject-matter jurisdiction, on the ground that Title VII requires an organization to employ at least 15 people in order to fall within the statutory definition of "employer" and NYAS was a sole proprietorship with only one employee. Thus, defendants argued, NYAS cannot be liable under Title VII for sexual harassment.
As Judge Glasser held, however, the 15-employee requirement of Title VII is not jurisdictional, but goes to the merits of a Title VII claim. See DaSilva v. Kinsho Int’l Corp., 229 F.3d 358, 365 (2d Cir. 2000). Therefore, a plaintiff’s failure to satisfy the requirement is not a ground for dismissal for lack of subject matter jurisdiction or failure to state a claim, but is a ground for defeating a claim on the merits. This interpretation of the 15- employee requirement means that the court is not divested of supplemental jurisdiction over related state-law claims.
Next, construing defendants’ motion as one for summary judgment, Judge Glasser denied the motion because "defendants have utterly failed to proffer any evidence from which the court can conclude that NYAS did not employ 15 or more people for 20 or more weeks in either 2000 or 1999." Slip op. 7 (emphasis in original). As Judge Glasser noted, defendants submitted neither any employment records covering that period of time, nor an affidavit from Forman. Their only evidence showed that for a period of some 12 weeks in 2000, NYAS employed only two people.
In James Miller Marine Services, Inc. v. V.I.P. Yacht Cruises, Inc., 01 CV 2938 (EDNY, April 30, 2002), Judge Glasser denied a defense motion for judgment on the pleadings on plaintiff’s claim, in this declaratory judgment action, that its liability was limited under the "Limitation of Liability Act," 46 USC 183. Defendant V.I.P. Yacht Cruises Inc. (VIP) argued that the barge where personal injuries had occurred was not a vessel and, thus, plaintiff Marine Services was not entitled to the limitation on liability.
Defendant Karen Walker attended a dinner cruise, hosted by the Visiting Nurses Association of Staten Island (VNA), aboard the M/V Royal Princess, a ship owned and operated by VIP. The VNA chartered the Royal Princess and arranged for the use of Marine Services’ pier facility, Pier 7-1/2, for embarkation and disembarkation. Pier 7-1/2 consists of three deck barges secured together end to end with a ramp to shore. Docking Barge No. 1, which formed part of the floating dock at Pier 7-1/2, was a 90-foot-by-30-foot flat-deck barge, made seaworthy by Marine Services. Plaintiff was allegedly injured after disembarking from the Royal Princes while traversing Docking Barge No. 1.
Marine Services sought a declaratory judgment that: (1) it is not liable for claims arising out of Ms. Walker’s accident, and (2) its liability should be limited to its interest in the barge. VIP argued that Docking Barge No. 1 is not a "vessel" within the meaning of maritime law and the Limitation of Liability Act. In opposing the motion, Marine Services argued that there are issues of fact as to (a) whether the barge is practically capable of navigation and (b) the purpose for which the barge was designed.
The only issue before the court was whether Docking Barge No. 1 was a vessel under the Limitation of Liability Act because, under 46 USC 183(a), only the owner of a "vessel" may seek to limit liability. The general statutory definition of vessel is broad and includes all types of watercraft or "other artificial contrivance … capable of being used, as a means of transportation on water." 1 USC 3. Floating on water, however, is not determinative of whether a "contrivance" is a "vessel." Instead, a contrivance must be "practically capable," which requires consideration of (a) the purpose for which the barge was constructed, and (b) the business in which it was engaged. Judge Glasser contrasted a floating, but permanently affixed drydock, which would not be a "vessel," with a mobile drydock that is moved from place to place, which would be a "vessel."
In Evansville & Bowling Green Packet Co. v. Chero Cola Bottling Co. 271 US 19, 22 (1926), the Supreme Court applied the following factors to determine if a wharfboat was a vessel:
(1) its use to carry freight from one place to another; (2) its use as a means of transportation; (3) the permanence of its location; and (4) the perils of navigation to which crafts used for transportation are exposed.
Given this range of factors, Judge Glasser had "far too few facts" to decide whether Docking Barge No. 1 was a "vessel." All that had been established was that the barge was seaworthy and fit for the service in which it was engaged at the time Ms. Walker sustained her alleged injuries. As Judge Glasser stated:
… there is no indication whether Docking Barge No. 1 was, at other times, used to carry persons or freight from one place to another; whether it was designed to be mobile; whether, and to what extent, it was permanently affixed to the land; and whether, and to what extent, it was ever placed in navigable waters for any purpose.
Slip op. 8.
Finally, although the business in which Docking Barge No. 1 was engaged at the time of the accident would suggest that it was not a vessel, "current business usage is only part of [the] Court’s inquiry." Slip op. 8. Thus, without more information, determination of the status of Docking Barge No. 1 was premature.
Peter R. Schlam and Harvey M. Stone are partners at Schlam Stone & Dolan.
[This article is reprinted with permission from the July 5, 2002, issue of the New York Law Journal. Copyright © 2007 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.]