November 13, 2014

New York Law Journal / Written by: Harvey M. Stone, Richard H. Dolan

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 Joseph F. Bianco granted the government's motion to prosecute a juvenile defendant in district court as an adult. Judge Sterling Johnson Jr. declined to dismiss certain defamation claims against former Yankee pitcher Roger Clemens. Judge Eric N. Vitaliano granted partial summary judgment to plaintiff in a suit against an insurer for 'business interruption' losses. And Judge Bianco ruled on motions to dismiss §1983 and related claims resulting from plaintiff's incarceration in Nassau County on attempted rape charges and his subsequent exoneration.

Prosecuting Juvenile as Adult

In United States v. Juvenile Male #2, 10 CR 470 (EDNY, Jan. 26, 2011), Judge Bianco, applying the factors in the Juvenile Justice and Delinquency Prevention Act, 18 U.S.C. §5032, granted the government's motion to transfer murder charges against a juvenile to district court.

Defendant was charged with participating in a gang-related, execution-style murder of a woman and her 2-year-old son in the woods of Central Islip. He was 16 years, eight months old at the time of the crime and 17 years, six months at the time of the transfer hearing.

As Judge Bianco found, based on a detailed analysis of the record, the prosecution had shown by a preponderance of the evidence that a transfer would be 'in the interest of justice.' The governing statute, the court noted, 'recognizes that, under certain circumstances, the rehabilitative focus of the juvenile justice system must yield to the compelling need to protect the public from the dangerous threat to society posed by the alleged criminal activity of a juvenile, thus warranting transfer of that juvenile to adult status.'

Here, the statutory factors in favor of transfer were 'extremely strong.'

The charged offense-defendant's role in a heinous double homicide as part of the racketeering activities of the vicious MS-13 gang-'overwhelmingly' pointed to transfer. The seriousness of the crime was not, in itself, automatically dispositive, but a transfer was also clearly warranted by other factors.

Rehabilitation appeared quite unlikely, given defendant's age, 'the complete absence of any stable family or social support structure,' and his long-time affiliation with the MS-13 gang. In fact, he tattooed 'MS' on his chin in large letters after he was incarcerated on the instant charges and continued to fight with rival gang members.

Defendant's prior delinquency record also gave little comfort. The homicides charged here occurred only six weeks after his latest release. Similarly, past treatment efforts have been 'completely ineffective.' Such events strongly indicated the futility of trying to rehabilitate defendant as a juvenile should he be convicted. Even defendant's expert witness, a neuropsychologist, testified that the court's concerns in this regard were 'warranted.'

Judge Bianco found defendant's present 'psychological maturity and intellectual development' to be 'a neutral factor,' while the availability of programs to treat juvenile offenders actually weighed against transfer. These factors, however, were greatly outweighed by the considerable evidence showing dim prospects for rehabilitation as a juvenile.


In McNamee v. Clemens, 09 CV 1647 (EDNY, Feb. 4, 2011), Judge Johnson denied a motion to dismiss certain defamation claims brought against former Yankee pitcher Roger Clemens by his one-time personal trainer, Brian McNamee.

After being approached by federal prosecutors in 2007 and threatened with prosecution for his alleged role in delivering illegal performance-enhancing drugs to athletes, Mr. McNamee cooperated. He told prosecutors, a commission headed by former Senator George Mitchell investigating the use of steroids and other performanceenhancing drugs by Major League baseball players, and a committee of the U.S. House of Representatives, that he had injected Mr. Clemens with performance-enhancing drugs on various occasions in 1998, 2000 and 2001.

In 2008, Mr. Clemens sued Mr. McNamee in Texas for defamation. That action was dismissed for lack of personal jurisdiction and because Mr. McNamee's statements to the Mitchell Commission were entitled to immunity. Mr. McNamee then sued Mr. Clemens in New York for defamation, malicious prosecution and intentional infliction of emotional distress, based on allegations that, before and after the Texas lawsuit was commenced, Mr. Clemens and/or his agents had publicly called Mr. McNamee a liar and mentally unstable, and had accused Mr. McNamee of attempting to extort Mr. Clemens and of manufacturing evidence of Mr. Clemens' use of performance-enhancing drugs.

Mr. Clemens moved to dismiss for lack of personal jurisdiction and for failure to state a claim. Judge Johnson found jurisdiction over Mr. Clemens based principally on the fact that both Mr. Clemens and Mr. McNamee were employed by the Yankees in New York during much of the time relevant to Mr. McNamee's allegations. Slip op. 11-25. The court found Mr. McNamee's allegations that Mr. Clemens or his agents had called Mr. McNamee a liar, and had accused Mr. McNamee of manufacturing evidence, sufficient to state a claim for defamation. Slip op. 28-35. However, Mr. Clemens' statements concerning Mr. McNamee's 'extortion' and mental instability were non-actionable hyperbole. Slip op. 35-37.

Mr. McNamee's claims of intentional infliction of emotional distress were dismissed as duplicative and for failure to allege sufficiently 'extreme and outrageous conduct', while his claim for malicious prosecution was dismissed because Mr. Clemens' petition for certiorari to the U.S. Supreme Court rendered the Texas action non-final and, in any event, Mr. McNamee had failed to plead special damages. Slip op. 46-55.

Business Interruption

In Park Electrochemical Corp. v. Continental Casualty Company, 04 CV 4916 (EDNY, Feb. 16, 2011), Judge Vitaliano granted, in part, plaintiffs' motion for summary judgment, holding that defendant's 'territorial limits' argument was a question of law and should be rejected.

Plaintiff Park Electrochemical Corporation develops and manufactures printed circuit boards and other materials for the telecommunications, computing and aerospace industries. Co-plaintiff Neltec, a wholly owned subsidiary of Park based in Tempe, Ariz., manufactures and sells a product called N6000. It purchases a vital component of N6000 from Nelco Products, Pte., Ltd., another Park subsidiary. In November 2002, an explosion at Nelco's Singapore facility resulted in a temporary halt to Nelco's ability to supply the component to Neltec and Neltec's ability to manufacture N6000. Nelco received $7.4 million from its insurer for the damages resulting from the explosion.

In March 2003, Neltec notified Continental Casualty Company of a claim for over $2.6 million in lost income. Continental disclaimed coverage, arguing that Nelco's facility in Singapore was excluded by the 'Territorial Limits' of the policy and that subsidiaries of a policyholder were not 'direct suppliers' under the policy. In granting partial summary judgment to plaintiff, Judge Vitaliano found that the provision of the policy governing 'territorial limits' was unambiguous. Under New York law, once a provision is found 'unambiguous, it must be given its plain and ordinary meaning and the construing court may not create policy terms by implication.' Slip op. 5.

The policy language also clearly provided coverage for the 'interruption of business' losses at the Tempe facility caused by physical damage or destruction of property of a 'direct supplier.' Though the direct supplier is overseas, the policy says nothing about where the physical damage must occur, only that the interruption of business must result from 'necessary interruption of business conducted at Locations occupied by the Insured and covered in this policy. . . ' As Judge Vitaliano concluded:

There is no dispute that the business interruption loss occurred in Arizona, that the loss was caused by direct physical damage to Nelco's property, and that Nelco is one of Neltec's direct suppliers. The loss is within all four corners of this aspect of the policy provision. Slip op. 8.

In contrast, Judge Vitaliano denied summary judgment to plaintiff on Continental's 'direct suppliers' defense. The policy language here was vague and ambiguous, and the term 'direct suppliers' was not defined in the policy. It could be read to include any supplier, even subsidiaries, or to exclude subsidiaries. Judge Vitaliano also found the case law inconclusive in the context of this policy and facts supporting the positions of both sides. Accordingly, the court left to the jury 'the question of whether subsidiaries may be 'direct suppliers' under the policy.' Slip op. 12.

Section 1983 Claims

In Houston v. Nassau County, 08 CV 197 (EDNY, Feb. 2, 2011), Judge Bianco declined to dismiss pro se plaintiff's §1983 claims against Detective Robert Dunn, while granting motions to dismiss §1983 claims against Nassau County Police Department, Nassau County and District Attorney Kathleen Rice, and state claims against all defendants.

The complaint alleged that plaintiff was questioned by Detective Dunn of the Nassau County Police Department in September 2005 in connection with a suspected attempted rape. Plaintiff cooperated and was told he was free to go. In April 2006, Detective Dunn closed the case, citing lack of evidence. On June 29, 2006, Detective Dunn arrested plaintiff, who was charged with sexual abuse and attempted rape. Plaintiff was incarcerated in Nassau County for eight months prior to trial, and on March 30, 2007, was acquitted by a jury on all counts. Plaintiff claims false arrest and detainment by Ms. Rice and Detective Dunn and defamation against all defendants.

Judge Bianco dismissed all claims against the Nassau County Police Department on the ground that it is a non-sueable entity. Merely administrative arms of a municipality do not have separate identity and cannot sue or be sued. These claims are more properly raised against Nassau County. The court also dismissed all claims against Ms. Rice because she is entitled to absolute prosecutorial immunity for her decision regarding whether or not to initiate prosecution.

Judge Bianco dismissed the claims against Nassau County as well. Under §1983, a municipal entity may only be held liable for constitutional violations caused by a municipal policy or custom, and cannot be held liable on a respondeat superior theory. Here, plaintiff failed to identify any policy or custom of Nassau County that had any connection with the alleged violation of his constitutional rights.

The court did not dismiss the §1983 claim for false arrest/false imprisonment against Detective Dunn, because it was too early in the case to determine whether he had probable cause to arrest plaintiff. Probable cause for an arrest constitutes justification and a complete defense to a false arrest claim. Detective Dunn contended that he had probable cause to arrest plaintiff based on the report of criminal complaint filed by the victim, but none of the information provided by the victim to Detective Dunn was before the court. 'The Court must be able to determine from the pleadings what information defendant Dunn had available at the time of arrest and whether, in light of plaintiff's interview or any other information available, there were any circumstances to raise doubt as to the victim's veracity.' Slip op. 7. As Judge Bianco noted. Detective Dunn could raise this issue again at summary judgment following discovery.

As to the state law claims for defamation, plaintiff failed to file a timely notice of claim against Nassau County within 90 days after the claim arose. Moreover, only certain state courts, not federal district courts, have jurisdiction to consider and grant an application for an extension of time to file a notice of claim.

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 March 11, 2011, issue of the New York Law Journal. Copyright © 2011 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.]