In their Eastern District Roundup, Harvey M. Stone and Richard H. Dolan discuss several significant, representative decisions handed down recently: one decision finding a guilty plea agreement deficient because of an overly broad waiver of the right to a subsequent collateral attack; another denying defendant’s motion to dismiss a trademark action despite a clause in the contract between the parties designating Italy as the forum for any dispute “arising out of” the agreement; and the last dealing with discrimination, hostile work environment and retaliation claims on defendant’s motion for summary judgment.
Plea Agreements: Waiver of Rights
In United States v. Chua, 17 CR 00016 (E.D.N.Y., Nov. 20, 2018), Judge Weinstein held that, in a guilty plea agreement, the government may not compel defendant to waive all constitutional rights to collaterally attack a conviction or sentence. Rather, the waiver must specifically list exceptions required by law so that a defendant knows what rights are waived and what rights cannot be waived.
Defendant was a teller at a Chase Bank in Flushing who, having engaged in certain currency transactions at the request of a co-worker, pled guilty to causing a financial institution to fail to file reports, in violation of 31 U.S.C. §§5324(a)(1) and 5234(d)(2). As part of the plea agreement, he agreed not to challenge his conviction or sentence pursuant to 28 U.S.C. §2255 or any other provision so long as the sentence of imprisonment did not exceed 51 months. The waiver specified only one exception, a claim of ineffective assistance of counsel.
Section 2255—the equivalent of a collateral attack through habeas corpus—provides procedures for constitutionally challenging a federal sentence. The Antiterrorism and Effective Death Penalty Act of 1996 set forth procedural limitations to the availability of collateral attacks. As Weinstein observed: “Because the constitutional Great Writ has been seriously constricted by statute and case law, it is imperative that its effectiveness not be reduced further by improper waivers required by the government in plea agreements.”
Plea agreements commonly contain the sort of waiver used in this case. But any general waiver of collateral attack rights must specify the rights, in addition to challenges based on ineffective assistance of counsel, that cannot be waived:
- (1) “The right to collaterally attack a conviction or sentence when exculpatory evidence has been withheld is not waived. This right is retained as part of the ‘voluntary and knowing’ exception.” Slip op. 7.
- (2) A waiver cannot bar challenges based on a constitutionally impermissible factor, such as (a) a violation of the double jeopardy clause; (b) prosecutional vindictiveness; (c) use of naturalized status in imposing sentence; or (d) race.
- (3) A waiver cannot bar challenges when foreclosure of that right would result in a miscarriage of justice.
The waiver here was deficient for failing to carve out explicit exceptions for claims of this nature. Accordingly, Weinstein amended the text of the waiver to comply with these requirements. Slip op. 8-9.
Federal Trademark Claims: Italian Forum Selection Clause
In Palm Bay International v. The Winebow Group, 18 CV 1094 (E.D.N.Y., Nov. 1, 2018), Judge Azrack denied defendant’s motion to dismiss plaintiffs’ trademark action, where that motion was premised on a contract clause designating Italy as the exclusive forum for any litigation arising out of the contract.
Plaintiffs were exclusive U.S. wine importers for defendant Consorzio Cooperative Riunite D’Abruzzo (CCRD) under a contract that contained a forum selection clause providing: “For each controversy that should arise out of the present contract or its execution The Law Court of Milan will have exclusive jurisdiction.”
After CCRD terminated the contract with them, plaintiffs brought suit in the Eastern District seeking declaratory and injunctive relief to protect their asserted ownership rights in the trademarks of certain CCRD wines that they had been importing, and allegedly had developed the labels for, conceived, and financed, while the contract was in force. CCRD moved to dismiss, citing the Italian forum selection clause.
Azrack denied the motion. In Phillips v. Audio Active Ltd., 494 F.3d 378, 391 (2d Cir. 2007), the Second Circuit held that, for purposes of enforcing a forum selection clause, “claims only ‘arise out of’ an agreement when they originate from a right or duty under that agreement”, and not whenever they “’relate to’ or ‘arise in connection with’ the Contract.” Slip op. 5-6.
Because plaintiffs’ claims arose under federal trademark law, they were beyond the reach of the forum selection clause. CCRD’s argument that the contract at issue conferred it “with ownership rights to any trademarks involved in the parties’ course of dealing” failed for two reasons. First, the contract’s effect in that regard was “far from unambiguous”. And, in any event, the contract rights asserted would merely be a defense to the claims here, and “the fact that a contractual provision may be asserted as a defense to Plaintiffs’ claims is insufficient to bring those claims with the forum selection clause’s scope.” Slip op. 8 (citing Phillips, 494 F.3d at 391).
Discrimination and Retaliation
In Mauze v. CBS, 15 CV 4905 ( E.D.N.Y., Oct. 17, 2018), Judge Dearie granted defendant’s motion for summary judgment with respect to plaintiff’s discrimination and hostile work environment claims, while denying the motion as to her claims for retaliation.
Plaintiff worked for defendant as Manager of Sports Production Services. She claimed that defendant (1) failed to promote her because of race and sex discrimination, which the court recharacterized as a failure to upgrade; (2) failed to raise her pay; (3) created a hostile work environment; and (4) by firing her, retaliated against her because of her complaints, all in violation of Title VII, the New York State Human Rights Law, New York State Executive Law, the Administrative Code of the City of New York, the Equal Pay Act and the New York Equal Pay Act.
As to her claim that defendant improperly denied her a promotion to a Director-level role, plaintiff failed to establish a prima facie case. Plaintiff was a member of a protected class as an African-American woman. But she had not applied for any job which defendant was seeking to fill or even expressed interest in any position other than the one she had. The court concluded that plaintiff wanted the title of Director without taking on additional responsibilities.
As Dearie observed, while plaintiff claimed that defendant improperly denied her a promotion, what she really wanted was for defendant to upgrade her, i.e., change her title and status. She failed, however, to present sufficient evidence to rebut defendant’s reasons for denying an upgrade, and plaintiff did not show that the reasons were pretextual. Defendant denied plaintiff’s requests because (1) her position and responsibilities were properly classified; (2) none of her predecessors in the same role had been upgraded to Director; (3) her role consisted of non-supervisory functions; and (4) plaintiff had not taken on expanded managerial opportunities and did not manage any employees.
Similarly, plaintiff could not establish a prima facie case of pay discrimination, because she could not show that “she took on responsibilities greater than that of a Manager and was not compensated accordingly.” Slip op. 24. Nor could she show discriminatory termination. Though her termination was an adverse employment action, the court could not conclude that she was satisfactorily performing her job. Indeed, defendant had documented a series of unprofessional and disruptive behaviors that impeded her colleagues’ abilities to complete urgent tasks.
Plaintiff did establish a prima facie case that defendant had retaliated against her because of internal and EEOC complaints: (1) plaintiff engaged in protected activity; (2) the alleged retaliatory actions qualified as adverse action; and (3) there was a sufficient causal connection between the protected activity and her termination. Plaintiff was able to rebut defendant’s non-discriminatory reasons for her termination sufficiently by linking actions against her to her complaints.
As to “hostile work environment,” the incidents of which she complained were not sufficiently continuous to rise “to the level of pervasive hostility that is required to survive summary judgment.” Slip op. 36.
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.