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. Jack B. Weinstein granted in part, and denied in part, an application by Bloomberg News to unseal sentencing materials. Judge Joanna Seybert granted a new trial to two of three plaintiffs seeking §1983 damages after their criminal convictions had been vacated based on DNA evidence. Judge Arthur D. Spatt remanded a case to a state criminal court in East Hampton where defendant, a Shinnecock Indian, could not show that he would be denied "racial equality" in the state court. And Judge Denis R. Hurley held that Centro de la Communidad Hispana de Locust Valley had standing to challenge a town ordinance prohibiting day laborers from soliciting work by trying to stop vehicles, and that defendants were not entitled to discover the identities of Centro's members.

Sentencing Documents

In United States v. Taiyyib Ali Munir, 12 CR 648-1 (EDNY, July 17, 2013), an insider trading case, Weinstein denied an application by Bloomberg News to unseal the Probation Department's presentence report, while granting its application to unseal defendant's sentencing memorandum and letters of support, but with redactions prescribed by the court.

Defendant acted as a "minor middleman" between someone with access to insider information and potential investors. One of the conspirators was the son of a former Kyrgyzstan president. Defendant pleaded guilty to one count of insider trading and was sentenced to time served (about a month) and three years' supervised release. The press was free to attend the sentencing, order transcripts and see a video recording of the proceeding.

Bloomberg News argued that unsealing the presentence report and sentencing memorandum would serve the public's interest in knowing the factors considered at the sentencing. Taking no position regarding defendant's sentencing memorandum and letters, the government objected to disclosure of the presentence report because of the "chilling effect" on the Probation Department's ability to gather information from defendant, government personnel and others in preparing the report. Defendant opposed disclosure of both documents, adding that the release of private information from himself and his family and friends would be harmful and unfair.

Defendant's allocution at the open plea proceeding set forth the basis of the crime. After the sentencing, the court published a detailed Statement of Reasons for the sentence.

As to the presentence report, Weinstein noted that disclosure would not advance the deterrent purpose of sentencing:

Those who can be deterred by his sentence will have already heard of this case. The size of the punishment is more critical to general deterrence than are the details of the defendant's background.

There is also an "abundance" of public information describing the offense, the defendant and his family history. The court thus saw "no good reason to violate the general rule against publication of presentence reports." Slip op. 12.

As to defendant's sentencing memorandum and letters, there was a strong presumption of public access. Defendant's sentencing submission included an excerpt from the presentence report and relied on letters from family and friends. He asserted here that disclosure would violate the confidentiality of the presentence report and expose private identifying and medical information of the letter-writers.

Though these interests, in the court's view, were "compelling," "wholesale suppression" of documents would be unnecessary. Rather, "[c]areful redactions can appropriately balance the interests of confidentiality, a free press, and an informed citizenry." Slip op. 12. Accordingly, only the portions of the memorandum and letters that do not reveal either quotations from the presentence report or private information about defendant's family would be publicly filed. That resolution was especially apt "where, as here, the information that will be withheld from the public was immaterial to the sentencing decision." Slip op. 13.

Section 1983 Claims

By joint decision in Kogut v. County of Nassau, 06 CV 6695, and Restivo v. Nassau County, 06-CV-6720 (EDNY, July 22, 2013), Seybert granted in part and denied in part motions for a new trial brought by three plaintiffs seeking civil damages under 42 U.S.C. §1983.

In 1986, John Kogut, John Restivo and Dennis Halstead were convicted for the rape and murder of 16-year-old Theresa Fusco. Kogut had confessed, and implicated both Restivo and Halstead. After all three convictions were vacated in 2003 based on DNA evidence, the Nassau County District Attorney's office retried Kogut. He was acquitted, and charges against Restivo and Halstead were then dismissed.

Kogut brought an action under §1983, which was consolidated for trial with a similar action brought by Restivo and Halstead. All three plaintiffs alleged that the county, prosecutors and police had: (1) violated their constitutional rights to due process and a fair trial by, inter alia, fabricating evidence and coercing testimony, and (2) engaged in malicious prosecution by persisting with criminal charges after their convictions had been vacated.

Upon plaintiffs' motions in the wake of a defense verdict, Seybert found that her jury charge regarding malicious prosecution, while "legally correct," "may have misled the jury" by suggesting that it could consider Kogut's confession in determining whether there was probable cause to proceed against Restivo and Halstead. Slip Op. 12. The court also agreed with plaintiffs that it should not have allowed the jury to decide Restivo and Halstead's claims of supervisory liability against Detective Sean Spillane, but rather should have decided it as a matter of law upon consideration of the jury's relevant factual findings. The court did not address the merits of that claim in this decision. Slip Op. 37-40.

Rejecting plaintiffs' remaining arguments, the court granted in part and denied in part the motion for a new trial by Restivo and Halstead, and denied Kogut's motion for a new trial in its entirety.

State Criminal Case

In People of the State of New York v. Smith, 13 CV 428 (EDNY, June 28, 2013), Spatt remanded this state criminal case to the Criminal Court of the Town of East Hampton because defendant could not show that he was denied "racial equality" or that he would be unable to enforce his rights in New York state courts.

Defendant, a member of the Shinnecock Indian Tribe, lived and worked at the Shinnecock Indian Nation Reservation in the Town of Southampton, Suffolk County. He owned a fishing boat, captained and staffed by non-Shinnecock personnel. After several confrontations between the captain of the boat, its crew member and defendant on one hand and officers from the New York Department of Environmental Conservation and local law enforcement personnel on the other, defendant was charged with possessing undersized bay scallops in violation of New York Law. Defendant removed the case to the Eastern District, alleging civil rights violations under 42 U.S.C. §§1982, 1985(3) and 1986 based on his status as a member of the Shinnecock Tribe. Plaintiff moved to remand.

Under 28 U.S.C. §1443(1) removal is appropriate if defendant is "denied or cannot enforce in the courts of [a] State a right under any law providing for the equal rights of citizens of the United States." In Georgia v. Rachel, 384 U.S. 780 (1966), the U.S. Supreme Court interpreted this removal language to refer to the right of racial equality. The denial of civil rights, however, must be clear in the language of the state law. A defendant must also show that "there is a federal law that legalizes the activity of which he is charged in state criminal court." Slip op. 6.

Defendant alleged that the facts of his case were "race based," but did not refer to any federal statute providing for racial equality as required by section 1443(1). Nor did he state a federally protected right to have undersized scallops. Defendant attempted to sue under the Treaty of Fort Albany of 1664, but the treaty secures rights only to tribes and bands of Indians, not individuals. The Wyandanch to Ogden Deed of 1659 was similarly inapplicable, because when, as here, "an Indian tribe conveys ownership of tribal lands to non-Indians, it loses any right to absolute and exclusive use and occupation of the conveyed lands." South Dakota v. Bourland, 508 U.S. 679, 689 (1993).

Defendant also failed to state that his rights would be denied in New York state courts, or to point to an explicit state law that would inevitably deny those rights. He alleged that the New York state "Laws"illegally regulated his property rights and taxed him as a member of the Shinnecock Indian Nation, a racial classification. But the requirement that a statute must discriminate on its face in terms of race was not met here. Thus, the alleged denial of defendant's civil rights was not obvious in the state law. Finally, Spatt held that "even if the motives of the officers are corrupt, it does not follow that the state court could not enforce his constitutional rights." Slip op. 9.

Challenge to Town Ordinance

In Centro de la Communidad Hispana de Locust Valley v. Town of Oyster Bay, 10 CV 2262 (EDNY, June 18, 2013), Hurley (1) denied defendants' motion for summary judgment challenging the standing of plaintiff Centro, an organization that advocates on behalf of immigrant workers and day laborers, to challenge the validity of a town ordinance; (2) dismissed defendants' counterclaims; and (3) upheld Magistrate Judge Arlene R. Lindsay's protective order regarding defendants' request for the names and addresses of plaintiffs' members. Hurley had entered a preliminary injunction in June 2010.

Plaintiff Centro, an unincorporated organization, was formed to ensure its members' right to work in response to the Town of Oyster Bay's intention to adopt an ordinance prohibiting day laborers from stopping or attempting to stop vehicles to solicit work. Centro runs educational programs for day laborers and visits sites where day laborers solicit employment. It requires no application, holds bimonthly membership meetings, has a steering committee and considers all persons who have attended meetings to be members.

The court concluded that Centro had "organizational standing" to bring the action in its own right because the ordinance threatened an injury in fact to Centro. The ordinance posed a threat to Centro's organizational activities and goals, which include meeting with day laborers at street corners where they solicit employment to provide educational outreach and information. Hurley recognized this impairment as a "cognizable interest" in light of Centro's stated mission to promote day laborers' right to work with dignity, respect and justice. Centro had status as an organization to sue because it had a membership and Centro kept records of the members, even though it did not have formal membership policies. Centro did not have "representational standing" given Second Circuit precedent prohibiting plaintiffs from bringing §1983 claims based on representational standing.

Defendants asserted counterclaims for a declaratory judgment that: (1) the ordinance was a lawful time, place or manner restriction and did not violate the First Amendment; (2) the speech the ordinance sought to ban was unlawful speech, not entitled to constitutional protection; (3) the speech was commercial speech, but the ordinance advances a substantial government interest; and (4) the ordinance was not unconstitutionally vague and did not violate the First or Fourteenth amendments. The affirmative defenses were identical.

When a counterclaim mirrors the opposing party's claim and is not otherwise independent, the court has discretion to dismiss the counterclaim. In dismissing the counterclaims, Hurley found that (a) the first three counterclaims were repackaged versions of defendants' affirmative defenses, and (b) the four counterclaims were mirror images of plaintiffs' claims. Thus, no case or controversy would remain once plaintiffs' claims were resolved.

Hurley affirmed the protective order issued by Lindsay prohibiting discovery into the identities of the plaintiffs' members and individual day laborers known to the plaintiff organizations. The court applied a "clearly erroneous"standard, determining first that plaintiffs had made a prima facie case that the disclosure sought would lead to threats and harassment and harm plaintiffs' associational rights.

Defendants also could not show a compelling need for the discovery. Claiming violations of law by the laborers, defendants asserted that the "was tailored to address the real world dangerous conditions created by the personal conduct of the day laborers as they congregate on the street and sidewalks of the Town."Defendants wanted to use the discovery to find witnesses to prove their case. But the speech that defendants sought to ban — soliciting employment and congregating on the street — was not unlawful in itself. Nor did the alleged violation of certain laws by some laborers make the speech itself unlawful. Defendant cited no authority to support its contention that it could go behind the commercial speech to determine if there was some unspoken illegality. Hurley agreed with the magistrate judge that "the invasion of privacy that would result from the discovery outweighs any need the defendants have for the discovery." Slip op. 25.

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 August 9, 2013, issue of the New York Law Journal.  Copyright © 2013 ALM Properties, Inc.  All rights reserved.  Further duplication without permission is prohibited.]