July 13, 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 Joanna Seybert relied on the good faith exception to the exclusionary rule in denying a motion to suppress where the search warrant lacked particularity. Judge Jack B. Weinstein, denying defendant's motion for summary judgment in a Title VII case brought by a pro se plaintiff, discussed the need for legal assistance in such cases and the current efforts to fill that need. Judge I. Leo Glasser declined to vacate a default judgment against defendants, whose claims of defective service of process were unpersuasive. And Judge Joseph F. Bianco affirmed Magistrate Judge Gary R. Brown's finding of discovery misconduct by an insurer/defendant and its counsel in a Hurricane Sandy case.

Search Warrant—Particularity

In United States v. Cwibeker, 12 CR 0632 (EDNY, Dec. 31, 2014), Judge Seybert held that a search warrant lacked particularity, but applied the "good faith" exception to the exclusionary rule in denying a motion to suppress.

Defendant Melvin Cwibeker, a licensed chiropractor, was charged with health care fraud and related offenses in connection with a scheme to submit Medicare claims for fictitious or otherwise non-compensable services. The U.S. Department of Health and Human Services, Office of the Inspector General (DHHS-OIC), handled the investigation, which revealed evidence of many days when the claimed medical services would have been impossible to perform.

In March 2012, DHHS-OIC Special Agent Elysia Doherty, working with the U.S. Attorney's Office, signed an Affidavit in support of a Warrant to search defendant's home office for evidence related to the fraud.

The Affidavit sets out, in detail, the proof already amassed and the applicable criminal statutes. Attachment A to the warrant described the place to be searched. Attachment B listed 11 categories of items to be seized. Magistrate Judge William Wall authorized the warrant.

On the day of the search Agent Doherty briefed a team of officers on the suspected fraud, its time frame, and the search's objective. Each officer received a copy of the warrant and its attachments as well as an Operational Plan summarizing the investigation and the parameters of the search.

There was one omission: "While Agent Doherty made copies of the Affidavit available, she did not distribute them to the officers." Slip op. 7. In executing the warrant, Doherty continued to instruct the officers on the permissible scope of the search. About 28,000 documents were seized, enough to fill 20 boxes. Four percent of the documents fell outside the warrant's scope.

In his motion to suppress, defendant asserted that the warrant lacked particularity in describing the items to be seized, violating the Fourth Amendment. The court's assessment of particularity was necessarily limited to the warrant and the two Attachments. The court did not "consider the Doherty Affidavit because it was neither incorporated in nor attached to the Search Warrant." Slip op. 9. The rationale for this limitation is that the executing officers did not have access to the Affidavit itself.

Seybert rejected the government's arguments that the warrant's limiting references to the crimes under investigation, the "regarding Medicare" phrase in some paragraphs, and the "concerning Cwibeker" language adequately narrowed the search's permitted boundaries. Slip op. 10-16.

Despite the Fourth Amendment violation, the good faith exception to the exclusionary rule applied here, where the evidence was "obtained in objectively reasonable reliance on a subsequently invalidated search warrant." United States v. Leon, 468 U.S. 897, 922 (1984). That the warrant was issued by a magistrate judge strongly suggests the officers' good faith, and the circumstances do not show that a "reasonably well trained" agent would have known of the illegality.

"Given the interior limitations in many parts of the Search Warrant calling for documents 'regarding Medicare,' the defect in the warrant was not so egregious as to preclude reasonable reliance on the Magistrate's judgment." Slip op. 18. "Moreover, the complex nature of the crime being investigated and the type of evidence sought might lead an ordinary officer to expect to find broader categories of items to be seized." Slip op. 18-19.

Nor was there any indication of deliberate misconduct by the agents. To the contrary: (1) Agent Doherty consulted with the prosecutors on the case. (2) Her affidavit set forth more detail than normally required for probable cause. (3) Before the search, she circulated her Operational Plan, which cabined the scope of the search more tightly than Attachment B. (4) Agent Doherty herself led the search, "and nothing suggests that she relied upon the defective Search Warrant over her knowledge of the investigation and the limits contemplated by the Affidavit." (5) "Perhaps most importantly," the conduct of the search in its entirety—lasting six hours, with an error rate less than 5 percent—underscores the agents' good faith. Slip op. 20-23.

Pro Se Litigants

In Floyd v. Cosi, 14 CV 3772 (EDNY, Jan. 12, 2015), involving claims of employment discrimination under Title VII of the Civil Rights Act of 1864, 42 U.S.C. §2000e, et seq., Judge Weinstein denied defendant's motion for summary judgment based on the statute of limitations, then recused himself because plaintiff's pro se status had already required the court to intervene on plaintiff's behalf.

Plaintiff, an African-American, alleged race discrimination by the restaurant chain Cosi, Inc. He filed the complaint on Sept. 27, 2013, alleging that the discriminatory conduct took place on March 20, 2012. Defendant argued that plaintiff did not initiate his complaint within the 300 days required for filing an Equal Employment Opportunity Commission complaint. Construing the pro se complaint liberally, Weinstein determined that plaintiff's EEOC filing was timely, because the complaint also mentioned other discriminatory conduct from March 19, 2012, through July 24, 2013. Under questioning by the court, plaintiff testified that the discriminatory conduct in July 2013 was part of a continuing series of related activity, making timely plaintiff's Title VII claims.

Weinstein discussed the importance of legal representation in our system of justice. In the court's view, plaintiff was not capable of representing himself and there are no satisfactory means of providing counsel to such a litigant in a civil case. Plaintiff's case would not be economically feasible for private counsel, and appointed counsel would have to pay significant costs for discovery. On the other hand, "[i]f the plaintiff were to continue pro se, the court would probably be forced to intervene and, in effect, advocate on his behalf, possibly prejudicing the defendant's case." Slip op. 4. Without representation by counsel, moreover, "adequate justice cannot be served in this case." Finally, because Weinstein had already intervened on plaintiff's behalf, the court ordered the case to be reassigned to another judge to avoid the appearance of partiality.

As Weinstein noted, there is no federal constitutional right to counsel in a civil case. In addition, federal programs for this purpose are underfunded and restricted, resulting in unmet needs that disproportionately impact racial minorities, women and the poor, particularly in Title VII cases.

The court described efforts to solve the problem of representation in civil cases, pointing to a new partnership, the Federal Pro Se Legal Assistance Program, between the Eastern District of New York and the New York City Bar Association's City Bar Justice Center, funded as a pilot project by the Eastern District Civil Litigation Fund and the court. The program will provide one-on-one free legal assistance in the courthouse to pro se litigants at all stages of their cases. The attorney will offer assistance in drafting, reviewing and editing discovery and motion practice documents, but will not represent the litigants in court. Weinstein mentioned other programs in various stages of development, including an Immigrant Justice Corps, initiated by Chief Judge Robert A. Katzmann of the U.S. Court of Appeals for the Second Circuit, and programs set up by the Boston Bar Association, Judicial Council of California, and Columbia Law School Human Rights Clinic.

Default Judgment

In Bricklayers Insurance and Welfare Fund v. Sukhmnany Construction, 13 CV 6803 (EDNY, Dec. 22, 2014), Judge Glasser, finding proper service of process, denied defendants' motion to vacate a default judgment.

In July 2014, the court entered a default judgment in favor of plaintiff International Union of Bricklayers & Allied Craftworkers Local 1 of New York and its fringe benefit funds against Sukhmany Construction, Inc. and its owner and president, Sandeep Boparai, for damages as a result of unpaid contributions and remittances that defendants were obligated to provide under a collective bargaining agreement (CBA) and ERISA. Defendants sought to vacate the default judgment under Federal Rule of Civil Procedure 60(b)(4), alleging that they had not been properly served with process.

Plaintiffs had moved for the default judgment on July 18, 2014. After it was granted, defendants submitted their motion on Nov. 24, 2014, to vacate the default. They contended that they had moved their offices and plaintiffs knew or should have known where they were. Defendants claimed they became aware of the suit when plaintiffs' judgment enforcement actions blocked payments from suppliers and vendors.

Courts disfavor default judgments and regard them as severe sanctions, and the district court has discretion to vacate. Rule 60(b)(4), allowing vacatur of "void" judgments, is limited by the Supreme Court to listed instances where there is a lack of jurisdiction or a violation of due process that deprives a party of notice and an opportunity to be heard.

Glasser concluded that service to the address specified in the CBA was proper. Although defendants claimed to have left that address in October 2012, they had not given plaintiff any formal notice of the move. Even though they contended that plaintiff knew or should have known about the move, the old address was still on the company letterhead and payroll documentation.

Defendants' lack of a meritorious defense also made the question of whether they had been properly served academic. Defendants raised conclusory allegations about the proper amount, but did not dispute their liability. Thus, voiding the default judgment would serve no purpose: "there is no question as to whether they are liable, and their alleged failure to receive documents informing them of Plaintiffs' intent to seek redress for that liability before the Court was of their own making." Slip op. 6.

Discovery Misconduct

In a decision issued under the joint caption In re: Hurricane Sandy Cases, 14 CV 41, and Raimey v. Wright National Flood Insurance Co., 14 CV 461 (EDNY, Dec. 31, 2014), Judge Bianco affirmed the Nov. 7, 2014, order of Magistrate Judge Gary R. Brown (reported in the Dec. 12, 2014 column) relating to discovery misconduct by an insurer/defendant and its counsel in a property claim arising from Hurricane Sandy.

Brown had found that defendant violated several Case Management Orders (CMOs) issued in the Sandy-related litigations by failing to produce drafts of an engineer's report regarding plaintiffs' house. The drafts revealed that another engineer, who did not inspect the premises and whose name did not appear on the final report, had directed the inspecting engineer, who appeared as the report's author, to make changes detrimental to plaintiffs. Brown directed that defendant produce all such drafts and related documents, and imposed sanctions on defendant and its counsel. (He also directed defendants in other Sandy-related cases to make similar production. That portion of the order, affirmed by a panel of magistrate judges as reported in the Jan. 9, 2015, column, was not before Bianco.)

Bianco affirmed on four principal grounds. First, he rejected defendant's argument that the CMOs did not clearly call for drafts in the possession of third parties, such as engineers. Drafts were clearly called for, it was undisputed that the engineer in question was within the control of defendant and, despite defendant's denials, discovery after Brown's order confirmed that defendant itself had the draft report. Slip op. 2-3., 16-18. Second, defendant's effort to defend its actions by explaining the general process of "peer review" by other engineers missed the point: The problem was not that another engineer contributed to the report, but rather that responsive documents reflecting his contributions were withheld. Slip op. 2-3, 18-19. Third, Brown properly found that defendant's conduct had unreasonably prolonged the litigation, as the withheld documents were "a critical component in the litigation" and should have been produced without the need for an evidentiary hearing. Slip op. 4, 20.

Finally, Brown did not err in sanctioning counsel for its conduct. In an effort to end the evidentiary hearing before the reviewing engineer took the stand, counsel represented to the court that the reviewing engineer's testimony would be consistent with that of the author/engineer, who said they had consulted about the proposed changes. When the court nonetheless elected to hear from the reviewing engineer, "it became clear that the representation was inaccurate." The reviewing engineer testified that the author/engineer had "just adopted his conclusions completely," without any consultation; moreover, those conclusions were contained in a red-lined draft of the report that came to light only through the reviewing engineer's testimony. Slip op. 5, 22-24.

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.