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 Jack B. Weinstein, who has just received hundreds of § 2254 habeas petitions, discussed the general need for more expedited processing to comply with statutory directives. Judge I. Leo Glasser found no basis to modify a consent decree against a defendant in the carting industry, despite alleged "changed circumstances" in the form of improved competition. And Judge David G. Trager declined to apply the doctrine of forum non conveniens with respect to claims by Italian exporters against a New York defendant.

Procedures: Habeas Corpus

Judge Weinstein issued memoranda to Marc Falkoff, special master, setting forth guidelines for the prompt disposition of habeas corpus petitions filed pursuant to 28 USC § 2254. In Re Habeas Corpus Cases, 03 MISC 66 (EDNY, May 1 & 12, 2003). The memoranda refer to 478 habeas corpus cases just reassigned to Judge Weinstein, who will decide the cases with assistance from the special master.

Petitioners are generally inmates collaterally attacking judgments of New York state courts. Respondents are district attorneys and other state prosecutors. Judge Weinstein's instructions to Mr. Falkoff emphasize the need for closer compliance with statutory time limits in responding to and processing habeas petitions–a huge task given the flood of these petitions in the federal courts.

28 USC § 2243 requires the custodian to respond to a habeas petition "within three days unless for good cause additional time, not exceeding twenty days, is allowed." The court must then set a hearing date "not more than five days after the return unless for good cause additional time is allowed." The clear import of these provisions is that habeas matters must be promptly resolved, in accord with the historical roots of the Great Writ. As Judge Weinstein also observed, the time limits in § 2243 are routinely exceeded, and the delays can be vast.

The court pointed to some "arguable" authority to "abjure the dictates of section 2243." For example, Rule 4 of the Rules Governing Section 2254 Cases, promulgated after § 2243, authorizes the district court to "order the respondent to file an answer ... within the period of time fixed by the court or to take such other action as the judge deems appropriate." The rules' drafters and the courts have assumed that the rules supercede § 2243 where there is a conflict.

But as Judge Weinstein explained, no conflict is apparent. Both Rule 4 and § 2243 can be read in concert, so that the maximum time allowable for a return is 20 days.

Judge Weinstein acknowledged that the need for speedy resolution has "surrendered to practicalities of court administration." The volume of habeas cases is enormous; the federal bench is chronically understaffed; and the district attorneys face budget and staffing crises. Obeying the statutory directives is thus not possible. This reality has created a tension between petitioners' rights to prompt disposition and the interests of law enforcement.

As Judge Weinstein suggested, "Congress could clarify the state of the law by revising section 2243 to acknowledge the need to allow district courts discretion in managing their section 2254 (and section 2255)" caseloads.

The court concluded by stressing again the need for swifter dispositions–a goal reflected even in Rule 4, which explicitly calls for judicial "promptness." Judge Weinstein's message to the special master: "Proceed with as much dispatch as practicable."

A likely consequence of these newly stated imperatives, of course, is a "surge of appeals" to the U.S. Court of Appeals for the Second Circuit.

Modifying Consent Decrees

In United States v. Private Sanitation Industry of Nassau County, Inc., 89 CV 1848 (EDNY, May 19, 2003), Judge Glasser, denying a motion to modify a 1996 consent decree, saw no changed circumstances that should allow defendant Nicholas Ferrante to play a more significant role in the carting industry than the consent decree prescribes.

In 1994, Mr. Ferrante was found liable for RICO violations and enjoined from participating in the Long Island carting industry. In 1996, he entered into a consent decree permitting him to resume a limited role in two carting companies. Specifically, Mr. Ferrante could visit the premises, review the books and records and discuss with employees the operation of the companies. The decree explicitly prohibited his participation in certain activities, such as communicating with customers or soliciting business.

In his motion to modify the decree pursuant to Rule 60(b), FRCivP, Mr. Ferrante sought to expand his role in the companies to include, for example, permission to speak with customers. To show changed circumstances, he pointed to the increased competition that would, in his view, prevent the kinds of problems that existed in 1994.

The compliance officer who monitored the companies for five years agreed that competition had improved, but reported that the potential for collusion and intimidation still existed.

As Judge Glasser stated, defendant's motion "goes to the very heart of the judgment against him." Moreover, when the parties signed the consent decree, "they did not intend it to operate only until a competitive market was restored. ..." Finally, the changes cited by defendant did not make his compliance more onerous; no "unforeseen obstacles" have appeared; and his exclusion from the industry does not impair any public interest.

Forum Non Conveniens

In Giaguaro S.p.A. v. Amiglio, 02 CV 0807 (EDNY, April 22, 2003), Judge Trager denied defendant's motion to dismiss the complaint on forum non conveniens and other grounds.

Plaintiffs Giaguaro and Conserviera, Italian exporters of Italian canned peeled tomatoes, brought three actions based upon their dealings with defendant, Francoise Amiglio, her husband, Joseph, his New York corporation, Amko International Trading Inc., an importer of Italian food, and Paesana Import-Export Inc. (Paesana), a Canadian importer company owned by Joseph Amiglio and others. In order to benefit from European Community subsidies applicable to exports to Canada, but not the United States, Joseph Amiglio set up Paesana to import into Canada Italian canned tomatoes purchased from plaintiff and then ship them to Amko in the United States. The Italian government terminated the subsidies for tomatoes shipped to Paesana, alleging that the customs certificates supplied by Joseph Amiglio were false, and requested a refund of all subsidies previously paid to plaintiffs.

In March 2000, Conserviera commenced a lawsuit in Italy against several defendants, including Paesana and Joseph Amiglio, seeking to recover only the amount of the subsidies improperly received by plaintiffs and compensation for damage to Conserviera's reputation. In May 2000, plaintiffs commenced a lawsuit in Montreal against Amko, Paesana, Francoise and Joseph Amiglio, their son-in-law Michael and others, alleging that Paesana had dishonored contracts to purchase canned peeled tomatoes. In the Canadian complaint, plaintiffs alleged that Francoise and Michael were personally liable for 16 invalid checks totaling US$1,428,572, because they were issued under the name of a nonexistent company. Plaintiffs also sought to recover the amount assessed by the Italian authorities.

All defendants in the Canadian action moved to dismiss the action on forum non conveniens and lis pendens grounds, and the Canadian Superior Court granted the motion. In June 2001, the Canadian Court of Appeal for the Province of Quebec, District of Montreal, found that Joseph Amiglio and Amko were subject to the jurisdiction of the Canadian courts, but that Francoise and Michael were not, because the allegations against them were based solely on nonvalid checks written in the United States.

Plaintiffs then sued Francoise in the U.S. District Court for the Eastern District of New York, for allegedly issuing 16 checks through a nonexistent corporation. According to the complaint, Francoise issued the checks to Paesana with instructions to endorse them to plaintiffs' favor, but then instructed plaintiffs not to negotiate the checks, representing that she would substitute a wire transfer. Plaintiffs claim that, in reliance on defendant's fraudulent promise, they never negotiated the checks, but received no wired funds. They also claim that defendant is personally liable for the purchase price of the tomatoes.

In denying the motion by Francoise to dismiss for forum non conveniens, Judge Trager noted that plaintiffs have no alternative forum, because the Canadian court had dismissed the action against her based upon the availability of a forum in the United States, and that a forum non conveniens motion cannot be granted absent an alternative forum. As Judge Trager found, defendant is a New York resident, who allegedly committed fraud and breach of contract in New York by issuing checks from a nonexistent company bearing a New York address and maintaining a New York bank account. Because plaintiffs have no alternative forum, their choice of a New York forum did not result from forum shopping.

The court also determined that the private and public interest factors supported a New York forum. Concerning the private interest factors, the issue was "the validity of a series of checks through an allegedly nonexistent company for payment of goods and alleged attendant misrepresentations" arising from documentary evidence in New York. Moreover, any testimony from witnesses outside of New York could be obtained from video deposition through letters rogatory.

As to the public interest factors, the New York community had an interest in considering a claim of fraud committed in New York. Although defendant suggested that Italian law applied, she argued that the complaint failed under New York commercial law. But application of foreign law would not be a sufficient ground upon which to dismiss an action under forum non conveniens. Slip op. 16.

In any event, Judge Trager concluded, even if Canada is an adequate alternative forum, defendant has not shown that "a trial in the United States would be so oppressive and vexatious to [her] as to be out of all proportion to plaintiffs' convenience." Slip op. 16-17 (citations omitted).

Peter R. Schlam and Harvey M. Stone are partners at Schlam Stone & Dolan.

[This article is reprinted with permission from the June 13, 2003, issue of the New York Law Journal. Copyright © 2007 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.]