November 12, 2014

New York Law Journal / Written by: Harvey M. Stone, Peter R. Schlam

In the U.S. District Court for the Eastern District of New York. Judge Arthur D. Spatt held that an application for appellate attorney's fees in a Title VII case did not have to be made within 14 days of final judgment, but could be made within a "reasonable" period. Judge Jack B. Weinstein denied defendant's motion to invalidate part of a proffer agreement which would allow the government to use, for rebuttal purposes at a criminal trial, defendant's statements at a proffer session. In addition, Judge I. Leo Glasser, expressing a measure of regret, declined to expunge the records of a misdemeanor conviction, which posed a bar to defendant's employment. And Magistrate Judge Cheryl L. Pollak denied pretrial release to the acting boss of the Gambino family, even though he was not charged with direct participation in a crime of violence.

Appellate Attorney's Fees

In Cush-Crawford v. Adchem Corp., 98 CV 676 (EDNY, Dec. 12, 2002), Judge Spatt addressed an issue of first impression in the Second Circuit regarding time limits on an application for appellate attorney's fees

In January 1998, plaintiff filed a complaint alleging claims of sexual harassment-hostile work environment; quid pro quo sexual harassment; and retaliation in violation of Title VII. In February 2000, a jury found in plaintiff's favor on her sexual harassment-hostile work environment claim, awarding her zero dollars in actual damages and $100,000 in punitive damages. The jury found in defendant's favor on the other claims. After denying motions by both plaintiff and defendant for a new trial, the court awarded plaintiff $54,052 in attorney's fees.

Defendant appealed the judgment, and plaintiff cross-appealed insofar as she had been awarded no actual damages. The Second Circuit affirmed the judgment in its entirety in November 2001. Plaintiff moved for appellate attorney's fees under Title VII in the district court in June 2002.

Judge Spatt rejected defendant's argument that plaintiff was required to apply for appellate attorney's fees within 14 days of entry of final judgment under Federal Rule 54. Rather, Judge Spatt concluded, in a Title VII action a prevailing part must seek appellate attorney's fees within a reasonable time after the circuit's entry of final judgment.

Judge Spatt based that decision on several factors: (1) Title VII provides no limitations period; and (2) neither the Federal Rules of Appellate Procedure nor the Second Circuit Rules set a limitations period. Moreover, no court within the U.S. Court of Appeals for the Second Circuit has ever addressed the issue. Judge Spatt found persuasive Environmental Defense Fund, Inc. v. Environmental Protection Agency, 672 F2d 42 (D.C. Cir. 1982), which concerned a similar statute without a limitations period relating to an application for appellate attorney's fees. In Judge Spatt's view plaintiff here had moved for appellate attorney's fees within a reasonable period after entry of the Second Circuit's final judgment.

Plaintiff's lack of success on her cross-appeal did not preclude appellate attorney's fees. As Judge Spatt noted, plaintiff prevailed on appeal because the Second Circuit affirmed the $100,000 punitive damage award. In addition, her cross-appeal for a new trial seeking actual damages was moot, because Title VII caps damages at $100,000 in cases involving employers with more than 100 and less than 201 employees, and her $100,000 punitive damage award was affirmed.

Finally, the court applied the lodestar method to calculate the attorney's fees. Judge Spatt determined that counsel's rate of $350 per hour was excessive and that $250 was reasonable. Additionally, the court reduced the lodestar amount by 10 percent because plaintiff had been unsuccessful on her cross-appeal.

Proffer Agreement

In United States v. Maynard, 02 CR 017 (EDNY, Nov. 25, 2002), Judge Weinstein denied defendant's motion to suppress, at an upcoming trial, statements made at a proffer session.

Defendant allegedly engaged in a broad-based scheme, and one incident, to defraud insurance companies by engaging in staged auto accidents. After his indictment, he moved to invalidate part of a proffer agreement that he had signed before a meeting with the government where he made inculpatory admissions. The relevant paragraph of the agreement allows the government to use any statement made by the defendant during the meeting

as substantive evidence to rebut any evidence offered or elicited, or factual assertions made, by or on behalf of [the defendant] at any stage of a criminal prosecution (including ... detention hearing, trial or sentencing).

Defendant argued that enforcement of this paragraph would effectively preclude him from cross-examining government witnesses, including co-conspirators, and making arguments to test the proof against him. Defendant relied on United States v. Duffy, 133 FSupp2d 213 (EDNY, 2001) [reported in this New York Law Journal column on April 13, 2001], where Judge Nina Gershon struck down the same portion of a proffer agreement.

Though a recent reported decision, United States v. Gomez, 210 FSupp2d 465 (SDNY, 2002) (Chin, J.), has expressed disagreement with Duffy, Judge Weinstein saw "much to commend the Duffy opinion." The defendant in Duffy admitted in the proffer session that he was part of a charged conspiracy and gave specific information about his role. Judge Gershon found that the possible unleashing of this evidence at trial precluded an "affirmative theory of factual innocence," leaving counsel with no recourse but arguments of reasonable doubt. This dramatic narrowing of defendant's options was found to constitute an impermissible waiver of Sixth Amendment rights.

Defendant here, unlike in Duffy, did not fully admit to the broader conspiracy charged in the indictment. Rather, he admitted to the events relating to a single allegedly staged accident. "Unlike Duffy, then," Judge Weinstein stated, "defendant is not in a completely untenable position because his protestations of innocence will not open the door to damaging statements relating to the most serious charges against him.'

As Judge Weinstein also noted, "[d]efense counsel may argue that the government has not proved its case even as to elements of the crime admitted by defendant in the proffer session." And counsel may attack the credibility of the government's witnesses and argue reasonable doubt. While the proffer agreement places counsel in a highly precarious position, "defendant has voluntarily made the bed he has to lie in."

Expunging Criminal Record

In United States v. Hasan, 98 CR 786 (EDNY, Dec. 4, 2002), Judge Glasser denied defendant's motion to expunge the record of his misdemeanor conviction.

In 1998, defendant pleaded guilty to making fraudulent statements in filing an application for registration of an alien. He was sentenced on this misdemeanor to two years' probation conditioned on 100 hours of community service. Defendant later sought to have his criminal record expunged because it was preventing him from finding employment.

As Judge Glasser noted, the inherent equitable power of a district court to order expungement should be exercised with great caution, and the defendant's interests must be balanced against the public need to have an accurate criminal identification system.

The stringent standard for expungement, the court found, was not met here:

[Defendant] does not challenge the validity of his arrest, his guilty plea or his conviction. [He] does not contend that the government based its arrest upon an unconstitutional statute, or that the government has misused the records in any way, or even that he is innocent of the underlying offense. ...

Though there was no basis to expunge the records, the court found it "socially self-defeating and morally wanting" to continue to regard defendant's "debt to society" as never to be absolved. Judge Glasser thus expressed the hope "that prospective employers will not look askance upon [defendant], who has atoned for his misstep.'

Pretrial Release

In United States v. Gotti, 02 CR 606 (EDNY, June 10, 2002), Magistrate Judge Pollak, finding that defendant posed a danger to the community, ordered him detained pending trial. Judge Frederic Block denied defendant's subsequent motion to revoke Magistrate Judge Pollak's order. 219 FSupp2d 296, aff'd, 312 F3d 535 (2d Cir. 2002).

Defendant Peter Gotti (a brother of John Gotti) and 16 other alleged members and associates of the Gambino organized crime family were charged in a 68-count indictment with labor racketeering, extortion, money laundering and other offenses relating to labor unions and businesses operating at piers in Brooklyn and Staten Island. At a detention hearing under the Bail Reform Act, the government presented evidence about the Gambino family and Peter Gotti's role in it and proffered information about the strength of the prosecution's case.

The defense argued that Mr. Gotti was not charged with direct participation in "a crime of violence" and thus could not be detained on grounds of dangerousness. Magistrate Judge Pollak, however, found clear and convincing evidence that Mr. Gotti was acting boss of the Gambino family and that no combination of bail conditions, including house arrest, would prevent him from continuing in that role, which posed a danger to the community. As Magistrate Judge Pollak stated:

Since there does not appear to be a dispute that the Acting Boss of an organized crime family has substantial power and the authority to supervise the criminal activities of the family, including acts of violence, the threat of Gotti's continued liberty stems from his ability to continue to direct, plan, order and supervise criminal activity even if he himself may not be personally involved. (Slip op. 12)

In United States v. Cantarella, 02 CR 0307 (EDNY, Nov. 26, 2002), Judge Nicholas G. Garaufis, employing a similar analysis, affirmed a decision by Magistrate Judge Steven M. Gold denying pretrial release.

Peter R. Schlam and Harvey M. Stone 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 January 10, 2003, issue of the New York Law Journal. Copyright © 2007 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.]