MEDIA

June 16, 2007

Tax Injunction Act Bars Suing N.Y. Tax Appeals Division

Published in: New York Law Journal | volume 237

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 Allyne R. Ross decided novel issues regarding the Trafficking Victims Protection Act. Judge Arthur D. Spatt denied a motion for a mandatory preliminary injunction requiring a school district to allow a deaf student to bring his service dog to school. And Judge Dora L. Irizarry granted class action certification to foreign seafarers asserting wage claims against U.S. registered vessels.

Trafficking Victims Protection Act

In United States v. Marcus, 05 CR 457 (EDNY, May 17, 2007), Judge Ross, denying defendant’s motions for a judgment of acquittal and a new trial, dealt with an array of arguments relating to defendant’s conviction on charges of sex trafficking, 18 U.S.C. § 1591, and forced labor, 18 U.S.C. § 1589.

Defendant was convicted after a jury trial. The charges arose out of his treatment of a woman named "Jodi"in a sexual relationship involving bondage, dominance/discipline, submission/sadism and masochism ("BDSM"). On defendant’s orders, Jodi worked on his BDSM website and engaged in conduct with defendant and others that was pictured on the website with textual entries and photographs. The evidence at trial is detailed in the court’s decision. Slip op. 2-11. In essence, Jodi gave a harrowing account of defendant’s controlling and grotesquely sadistic treatment of her, and sometimes other women, from 1998 to 2003. Jodi met defendant online while visiting a BDSM chatroom. Defendant called himself "master" and referred to women in relationships with him as "slaves." He also explained to Jodi that he did not allow submissives to use "safe words" to stop an event.

Jodi traveled from the Midwest to meet defendant in Maryland at the apartment of another submissive, "Joanna." At defendant’s behest, Jodi soon moved to Joanna’s apartment. When defendant visited the apartment from his home in Long Island, he would "punish" Jodi in various ways — such as whippings, incarceration in a large metal dog cage, humiliating and painful use of sex instruments, and physical restraints during intercourse.

After several months the punishment allegedly became more severe, including cigarette burns, body mutilation and extreme beatings. By October 1999 Jodi told defendant she wanted to leave. Defendant’s emotional, physical and sexual dominance of her created an atmosphere of terror paralyzing Jodi’s will. The abuse continued and intensified — and was photographed and described for the website. Hearing defendant’s threats to Joanna, Jodi feared that, if she tried to leave, he would send pictures to her family or harm one of her family members. In January 2000 defendant had Jodi move to "Rona’s" apartment in New York and start a new BDSM website called "Slavespace." Jodi worked on the website, against her will, for eight or nine hours a day to increase defendant’s revenue from the "member section" and advertising.

According to Jodi’s testimony, defendant continued to punish her in a series of non-consensual incidents photographed for the website. When Jodi told him how unhappy she was, he threatened to send the pictures to her family and the media. In March 2001, Jodi called defendant and said again that she wanted to leave. He responded that she had to endure one final punishment. As usual, the physical abuse led to sexual intercourse, and Jodi had to write diary entries for the website. Jodi claimed to feel "broken" and unable to leave the relationship. In August 2001, at Rona’s urging, defendant allowed Jodi to get her own apartment. Her contacts with defendant grew less frequent, but she still had some contact with him to maintain a semblance of control over his use of her pictures on the website. Defendant continued posting website entries relating to Jodi. Her contact with him ended in 2003.

Defendant’s Rule 29 motion raised three grounds for setting aside his conviction:

  1. The Trafficking Victims Protection Act of 2000 ("TVPA") — the legislation enacting both the Forced Labor Statute and the Sex Trafficking Statute — was not intended to apply to an "intimate, domestic relationship" or consensual BDSM activities;
  2. the term "commercial sex act" in the Sex Trafficking Statute does not apply to the receipt of money for photographic depictions of sex acts; and
  3. there was insufficient evidence to show a nexus between the force or coercion and (a) the "commercial sex act" element of the Sex Trafficking Statute, and (b) the "labor or services" element of the Forced Labor Statute.

Judge Ross discussed and rejected every facet of defendant’s energetic contentions, which complained of statutory ambiguity and cited legislative history and the "rule of lenity."

In relevant part, the statutes at issue provide:

18 U.S.C. § 1589(a) ("the Forced Labor Statute") Whoever knowingly obtains the labor or services of another person . . . by threats of serious harm to, or physical restraint against, that person or another person [shall be guilty of a crime.]

18 U.S.C. § 1591(1) ("the Sex Trafficking Statute") Whoever knowingly . . . in or affecting interstate or foreign commerce . . . recruits, entices, harbors, transports, provides, or obtains by any means a person . . . knowing that force, fraud, or coercion . . . will be used to cause the person to engage in a commercial sex act [shall be guilty of a crime.]

As Judge Ross held, the TVPA does apply to the alleged conduct. With respect to § 1589, the court saw no reason why the existence of a domestic partnership . . . should preclude criminal liability if one person knowingly uses "threats of serious harm to, or physical abuse against, that person or another person," to obtain labor or services.

The tasks imposed on Jodi, moreover, were "not household chores but rather labor or services that would, in fact, ordinarily have been compensated." Slip op. 22. Similarly, as to the Sex Trafficking Statute, "the requirement that the [commercial sex act] be a product of force, fraud or coercion precludes the potential broad sweep about which the defendant expresses concern." Slip op. 23. Nor did Judge Ross find ambiguity in the Forced Labor Statute as applied here. In its instructions to the jury, the court "construed the statute narrowly in order to explicitly exclude consensual BDSM conduct." As to the Sex Trafficking Statute, the court also gave a narrow instruction to avoid criminalizing consensual conduct.

Judge Ross declined as well to limit the reach of the Sex Trafficking Statute to prostitution and to exclude pornography. The statute defines a commercial sex act as "any sex act, on account of which anything of value is given or received by any person." 18 U.S.C. § 1591(c)(1). Slip op. 27. The court pointed to Congressional findings emphasizing a broad purpose to protect victims and prevent trafficking.

Defendant fared no better with his denial of a "link" between his abuse of Jodi and her labor and services. The jury instructions required a finding that defendant knowingly used force, fraud or coercion to cause Jodi to engage in a commercial sex act. The evidence supported the jury’s findings in that regard, even though the initial relationship was consensual. Slip op. 29-33.

The instructions on the Forced Labor Statute likewise eliminated any ambiguity on causation, and a reasonable jury could find that defendant obtained Jodi’s work on the website through a pattern of punishing her.

Contrary to defendant’s Rule 33 argument, the TVPA does not require a finding that the "dominant purpose" of the fraud or coercion was to obtain the commercial sex act or labor or services. Defendant, the court noted, "makes a valiant attempt to paint any commercial aspects as merely incidental to what was really an intimate relationship." Judge Ross, however, found the "commercial aspects to be sufficiently pervasive in the non-consensual portion of the relationship" to deny the new trial motion. Slip op. 40-41.

Accommodation — IDEA, ADA and Rehabilitation Act

In Cave v. East Meadow Union Free School District, 07 CV 0542 (EDNY, Feb. 28, 2007), Judge Spatt denied plaintiffs’ motion for a mandatory preliminary injunction directing defendants to allow a deaf high school student to bring his service dog into school.

John Cave, Jr., has been hearing impaired since infancy. Currently, he has cochlear implants which give him some usable hearing; without the implants he has "profound hearing loss." His parents, working with the Committee on Special Education for the East Meadow Union Free School District, developed an individual education plan ("IEP") in which accommodations are provided by the school. Under his IEP, John has "a full-time one-on-one sign language interpreter, an FM amplifier and transmitter to use in class, additional time for test-taking, the ability to take exams in a separate location with a resource-room teacher present, and closed-captioning if any videos are shown." Slip op. 52. When he sought to bring his service dog, Simba, into the school, the school declined. John and his parents sued the School District, several officials of the School District and numerous administrators and employees of Clarke High School, alleging violations of the Americans with Disabilities Act ("ADA"), Section 504 of the Rehabilitation Act and several New York State statutes. He sought a preliminary injunction directing defendants not to bar Simba from entering the school.

Following an evidentiary hearing, Judge Spatt denied plaintiffs’ preliminary injunction application. As Judge Spatt noted, a party seeking a mandatory injunction faces a special burden beyond showing irreparable harm and the balance of equities tipping in his favor. He must also show that extreme or very serious damage will result if the injunction is not granted. A mandatory injunction would not preserve the status quo here, but would require the School District to take the affirmative act of allowing John into the school with the dog.

Plaintiffs established irreparable harm because keeping the dog out of the school would retard his training with John.

Plaintiffs failed, however, to show a likelihood of success on the merits. As the court observed, plaintiffs had not pleaded a claim under the Individuals with Disabilities Education Act ("IDEA"), which is "designed to guide the relationship between federally funded public schools and their disabled students . . . . [and] requires . . . that every public school that receives federal funds develop personalized education curricula for each student with a disability" — to wit, an IEP. Slip op. 45. Plaintiffs contended that the IDEA applied only to education issues and that the issues here were broader than mere education issues. But in Judge Spatt’s view the IDEA did apply because the presence or absence of the dog in the school with John affected and interacted with his IEP. Plaintiffs had thus not met the exhaustion requirements of the IDEA. Slip op. 57.

To complete the record, Judge Spatt addressed the merits of plaintiffs’ ADA and Rehabilitation Act claims — which courts treat identically. The accommodations provided in John’s IEP were reasonable under the ADA and the Rehabilitation Act because he was not "denied the opportunity to participate in or benefit from defendants’ services, programs or activities," nor was he "otherwise discriminated against on the basis of his disability." Slip op. 60. Judge Spatt balanced the advantage to John — more time to train his dog — against the disadvantages to teachers, other students and John himself — dog allergies, exclusion of the dog from gym class, changes to John’s schedule and shorter class periods. In short, there was no violation of the ADA or Rehabilitation Act, and plaintiff did not prove a likelihood of success on the merits or establish a serious question going to the merits, much less show "extreme damage." Slip op. 63.

Finally, the New York statutes were inapplicable. Slip op. 64-73.

Class Certification of Maritime Claims

In Dziennik v. Sealift, Inc., 05 CV 4659 (EDNY, May 29, 2007), Judge Irizarry granted plaintiffs’ motion for class certification in a class action by seafarers on U.S. flag vessels seeking recovery of unpaid wages, overtime wages, and statutory penalties under employment contracts and federal maritime law.

The proposed class comprised 209 seafaring employees — 113 Polish citizens and 96 Filipino citizens — all of whom had worked or were working on vessels owned by defendants.

Under Rule 23(a), Judge Irizarry first found that the proposed class met the numerosity requirement. The commonality requirement was also satisfied since plaintiffs shared common factual and legal questions, such as whether defendants (1) breached employment contracts, (2) violated 46 U.S.C. § 11107, and (3) refused and neglected to pay the seafarers their full balance due. Next, because plaintiffs were all present or former seafaring employees aboard U.S. flag vessels under defendants’ control who were entitled to unpaid wages, overtime wages and penalties, they met the typicality requirement.

The court also found that plaintiffs adequately represented the class. Class counsel — experienced maritime lawyers — were qualified to conduct the litigation. Nor did the interests of the named plaintiffs conflict with the interests of other class members. Although two named plaintiffs had commenced other actions, counsel represented that they intended to consolidate those actions with this class action following class certification. Judge Irizarry discerned no current conflict, even though one named plaintiff had a secured claim.

Because the masters of the vessels had to show that delay in payment was justified, plaintiffs’ lack of information on that subject did not render them inadequate as class representatives. Slip op. 15. Similarly, the apparent confusion shown by one plaintiff at his deposition did not make him an inadequate representative given the complexity of the case.

Plaintiffs also met the Rule 23(b)(3) requirements for class certification. First, class issues predominated over individual issues, even though there were some individualized defense and damage issues. As Judge Irizarry noted, plaintiffs "each raise the same underlying, contested issues: that defendants deprived plaintiffs of wages and overtime wages duly earned in violation of their employment contracts and federal maritime law, specifically 46 U.S.C. §§ 10313 and 11107." Slip op. 20.

Second, Judge Irizarry concluded that a "class action is superior to other available methods for the fair and efficient adjudication of the controversy at issue herein." Slip op. 24. As foreign nationals residing in either Poland or the Philippines, the 209 plaintiffs had little likelihood of carrying the burden and cost of individual suits, even though the claimed damages are not negligible and two class members had initiated prior actions. Finally, because of the number of seafarers affected and their geographic diversity, the interests of justice would benefit by resolving the common disputes in one forum. Slip op. 22.

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 June 16, 2007, issue of the New York Law Journal. Copyright © 2007 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.]