July 9, 2015

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 Sandra L. Townes granted the government's request to keep a trial jury anonymous and partially sequestered. Judge Edward R. Korman denied a motion by the City of New York for judgment on the pleadings in a suit alleging tort claims brought by a mentally impaired prison inmate who, in another case, had signed a settlement releasing the city from civil rights claims.

In the Hurricane Sandy cases, a panel consisting of Magistrate Judges Cheryl L. Pollack, Gary R. Brown and Ramon E. Reyes generally rejected defendants' motions for reconsideration of an earlier order requiring them, in the wake of certain discovery misconduct, to turn over engineering reports and related materials. And Judge Nina Gershon denied defendants' motion for summary judgment as to plaintiff's claims of pregnancy discrimination in her firing.

Anonymous Jury

In United States v. Ahmed, 12 CR 661 (Dec. 10, 2014), Judge Townes granted the government's motion to empanel an anonymous and partially sequestered jury for the trial of three defendants charged with crimes relating to their support of al-Shabaab, a foreign terrorist organization.

The government asked that "the names, addresses and workplaces of both the venire and petit juries not be revealed, that the jurors be kept together during recesses and taken to or provided lunch as a group each day during trial, and that they be escorted to and from the courthouse each day in a manner to be arranged by the United States Marshals Service."

The court noted the pervasive issue of terrorism contained in the specific charges, which were reasonably likely to instill in the jurors a fear for their safety. The government's motion papers described numerous terrorist acts by al-Shabaab. Most important to the analysis here, it "attacked a shopping mall in Kenya killing approximately 72 civilians in retaliation for the Kenyan government's interference with al-Shabaab's mission." Similarly, al-Shabaab could see "interference with its mission" in the prosecution of these three defendants, all valuable members of the organization. Slip op. 4.

The extensive press coverage of this case could also expose jurors to intimidation or harassment.

The court explained the required precautions it would take to uncover any bias and give the jurors non-prejudicial explanations for not disclosing their identities. To this end, the court will (a) "order distribution of questionnaires for prospective jurors[,]" with counsel's input; and (b) "inform jurors in a neutral manner" that the procedures used are "standard" in federal court and "intended to protect their privacy." Given the demonstrated need for protection and the available measures to prevent bias, the court granted the government's motion in its entirety. Slip op. 7-8.

General Release

In Smith v. City of New York, 12 CV 4851 (EDNY, Dec. 2, 2014), Judge Korman, denying the city's motion for judgment on the pleadings, found that a General Release and Stipulation signed by plaintiff in another case against the city did not bar this action.

Plaintiff, an inmate in the custody of the New York City Department of Corrections, filed four different actions against the city arising from different periods of detention. In the first (Smith I), proceeding pro se, he accused Department of Corrections (DOC) officers of unlawfully depriving him of property by changing his telephone PIN number without permission or authority. Plaintiff entered into a settlement agreement pursuant to which the city paid him $750 in exchange for a General Release and Stipulation of Settlement, releasing the defendants in that action "from any and all liability, claims, or rights of action alleging violation of my civil rights." Both the Release and Stipulation released civil rights violations only, and the Stipulation stated that it "shall not be admissible in, nor is it related to, any other litigation or settlement negotiations."

At the time of the Smith I General Release and Stipulation, Smith II was pending. There, plaintiff had asserted pro se claims against the city regarding improper accommodations for religious practice at Rikers Island. The court consolidated that action with other actions filed by similarly situated plaintiffs. Pro bono counsel filed a single complaint listing all consolidated plaintiffs. The district court dismissed Smith II based on the General Release and Stipulation in Smith I.

The present action is Smith III. Plaintiff, now represented by counsel, alleged that while he was in a cell at the Queens County Courthouse, one corrections officer assaulted and beat him; another observed this without intervening; and a third grabbed his cane, causing him to fall down, and left him lying on the ground.

In Smith IV, where plaintiff was represented by the same counsel, the complaint alleged "negligence and reckless conduct on behalf of the City and several DOC employees, stemming from incidents in which plaintiff committed self-inflicted injuries due to inadequate supervision." The complaint further alleged that DOC employees assaulted and battered plaintiff.

As Korman observed:

Smith II is an improper predicate for issue preclusion because it is still pending before the district court and is not appealable. Indeed, while the district court dismissed plaintiff Smith from Smith II, some of Smith's co-plaintiffs continued prosecuting the case in the district court. Plaintiff Smith's dismissal is thus open for reexamination and cannot be appealed at this time.

Slip op. 7.

Korman also found evidence suggesting that mental incapacity and other extreme circumstances may warrant granting plaintiff relief from the binding effect of the General Release and Stipulation in Smith I. Accordingly, the court treated the complaint as a request for relief pursuant to Rule 60(b).

Finding that plaintiff had a "plausible claim based on the circumstances surrounding [his] assent to the General Release and Stipulation," the court emphasized several factors.

First, reports from New York City's Correctional Health Services "provide a history" of plaintiff's "chronic paranoid schizophrenia, extreme bipolar, major depression, personality disorder, and suicidal ideation." Slip op. 8. According to another city report, his reading comprehension was "equivalent to that of an eight year old." The court stated that the Restatement (Second) of Contracts, §15 provides that when a party to a contract is unable to act in a reasonable manner and the other party has reason to know of his condition, the contract is voidable. Because the city had issued the health reports, corporation counsel knew or should have known about Smith's condition.

Second, plaintiff signed the General Release and Stipulation after his attorney had served the city with notices of claim in Smith III and Smith IV. Thus, corporation counsel, with actual or constructive knowledge of those claims, secured the release from those suits without consulting counsel.

Third, $750 was insufficient consideration for the broad release plaintiff signed, supposedly releasing the city not only from Smith I, but from three other suits, including the allegations here of brutal assault and battery. As the court noted: "The release of these claims for the nominal amount provided is a cause for concern when coupled with plaintiff's pro se status and mental condition." Slip op. 9-10.

The General Release and Stipulation were ambiguous, because (1) the language indicated that the Stipulation barred only actions alleging civil rights violations, and not the additional claims grounded in New York tort law; (2) the Stipulation's limiting provision stated that it is not admissible in or related to any other litigation, and thus would not bar this action at all; and (3) the "uncertainty created by the limiting provision is magnified by the other actions pending when Smith signed the General Release and Stipulation" of which the corporation counsel had at least constructive knowledge. Slip op. 11-12.

Hurricane Sandy Cases

A committee consisting of Magistrate Judges Pollak, Brown and Reyes (the Sandy Panel) issued a decision in In re: Hurricane Sandy Cases, 14 CV 41 (EDNY, Dec. 8, 2014), responding to various motions to reconsider a Nov. 7, 2014, decision by Brown.

As reported in the Dec. 12, 2014, column, Brown had found that the defendant in one of the more than 1,000 Hurricane Sandy-related cases pending in the Eastern District had withheld from discovery draft engineers' reports and related materials that were called for by Case Management Orders (CMOs) issued by the Sandy Panel. Because there were strong indications that the misconduct extended to defendants in other Sandy matters, Brown ordered defendants in all those cases to produce any such reports and related materials within their control, including any in the possession or custody of third parties, by Dec. 12, 2014.

The other Sandy defendants filed "more than 100 motions for reconsideration and clarification" of Brown's order, raising essentially four points.

The Sandy Panel identified two reasons for rejecting defendants' argument that, because they did not directly participate in the single matter where Brown had found misconduct, Brown's order had denied them an opportunity to be heard. First, Brown's order merely confirmed defendants' obligations under earlier CMOs that had been entered on notice to all defendants without timely objection. Second, the defendant in the matter where the misconduct was uncovered had a duty to coordinate with the Federal Emergency Management Agency (and, through it, with the other defendants), and it was undisputed that it actually did so. In any event, consideration of defendants' motions for reconsideration cured any previous denial of their opportunity to be heard. Slip op. 4-6.

Defendants' related argument that the "diversity of facts and circumstances" among the Sandy cases made it improper to extend findings from a single matter to the broader universe also failed. Any differences in the cases did not affect defendants' discovery obligations under the earlier CMOs that Brown's order was based upon, and Brown had specifically found evidence that the failures of disclosure "were standard 'across the field of engineering.'" Slip op. 6-7.

The burden upon defendants in obtaining materials from third parties within their control was minimal. In later November, the Sandy Panel had addressed such complaints by providing that the issuance of subpoenas to relevant third parties, returnable by year's end, would suffice. Slip op. 8. Defendants prevailed only in their argument that the disclosure requirements of Brown's order should be mutual. Slip op. 7-8.

Finally, the panel granted plaintiffs' request for an evidentiary hearing. Substantial evidence of improper discovery practices by insurance carriers regarding damage reports had been presented. This included an engineer's affidavit that his signature and seal on a final report had been "lifted" from an earlier draft, and evidence that the engineer who had authored certain reports had never visited the subject premises but rather applied his name to the work of engineers who were not licensed in New York. The Sandy Panel scheduled an evidentiary hearing on these matters for Jan. 28, 2015. Slip op. 9-10.

Pregnancy Discrimination

In Peralta v. Roros, 940, 11 CV 6242 (EDNY, Dec. 9, 2014), Judge Gershon denied defendants' motion for summary judgment to dismiss plaintiff's Title VII claims of pregnancy discrimination.

Between April 2010 and September 2011 plaintiff Ashley Peralta worked for defendant Roros 940, Inc. (Roros Inc.), a FedEx subcontractor, as a driver. Defendant John Roros, the owner and operator of Roros Inc., testified that he was responsible for hiring, disciplining and terminating the employees who worked for him. Peralta delivered packages along a FedEx ground route. She claimed that as soon as Roros learned she was pregnant, he began to impose rules on her that he did not impose on her co-workers, growing angry when she sought time off for medical appointments, telling co-workers she was a "bitch" for attending those appointments, and reprimanding her unnecessarily.

Roros assigned Todd Gibson, a driver in training, as an additional helper to plaintiff so that he could cover her route when she was on maternity leave.

In late August 2011, FedEx began investigating the disappearance of a large package that had been loaded onto plaintiff's truck. When interviewed, plaintiff stated that there had been only one package, not two, for delivery to JC Cell on her truck, and that it was still on the truck when she left for vacation in late August. Gibson and one Alex Valdez covered her route.

Two employees—Valdez and Jilani Mitchell—also told FedEx investigators that there was only one package addressed to JC Cell on plaintiff's truck. Investigators did not interview Gibson, who served as plaintiff's helper during the week before her vacation. The FedEx report concluded that certain statements by plaintiff and Mitchell were inconsistent with the statements from JC Cell. Roros terminated plaintiff on Sept. 20, 2011.

According to plaintiff, when Roros fired her he said that he was giving her route to Gibson because Gibson threatened to quit if not promoted to full-time driver. A FedEx security officer told her to leave the building. Defendants contended that FedEx made the decision to terminate plaintiff and did the firing.

Plaintiff sued Roros 940, Inc. and John P. Roros, alleging disparate treatment based on gender and pregnancy. The Pregnancy Discrimination Act, 42 U.S.C. §2003(k), expands Title VII, 42 U.S.C. §2003-2(a)(1), to prohibit discrimination on the basis of pregnancy. Plaintiff established a prima facie case of discriminatory termination by showing that (1) she was a member of a protected class; (2) she was qualified for her position; (3) she suffered an adverse employment action; and (4) the circumstances—including the assignment of her position to Gibson—gave rise to an inference of discrimination.

Gershon was unpersuaded by defendants' argument that FedEx was solely responsible for plaintiff's dismissal, because the FedEx report specifically states that Roros notified FedEx that he had terminated plaintiff. Defendants produced no evidence of an instruction by FedEx to terminate plaintiff.

Defendants claimed to have provided a non-discriminatory reason for her termination in the FedEx report, shifting the burden back to plaintiff to prove that her pregnancy motivated the dismissal. Gershon found that plaintiff showed "pretext" by demonstrating that co-workers outside the protected class engaged in comparable "misconduct" without being terminated. A number of other workers who had similar access to the missing package kept their jobs—such as plaintiff's helpers the week before she went on vacation and those who covered her route while she was on vacation. No one else was disciplined, Gibson was promoted to plaintiff's position, and defendants did not suggest that plaintiff and her undisciplined co-workers were not similar in their work abilities.

Gershon concluded:

Crediting the totality of plaintiff's allegations, a reasonable juror could conclude that Roros harbored misgivings about plaintiff's pregnancy and, once a shipment came up missing from her vehicle, doled out selective discipline to replace her with a non-pregnant employee. That is discrimination under Title VII.

Slip op. 14.

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.