November 20, 2018

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 Sterling Johnson Jr. granted, in part, a new trial motion in a criminal case because there was no substantial evidence of specific intent to violate the statute in question dealing with export controls. Judge Brian M. Cogan declined to exercise supplemental jurisdiction over state and city claims for monetary damages in a suit brought under the Americans with Disabilities Act. And Judge Joseph F. Bianco denied a joint habeas petition claiming ineffective assistance of counsel in the failure to advise petitioners of deportation as a "presumptively mandatory" consequence of their guilty pleas.

Motion for New Trial Granted

In  United States v. Diatlova, 12 CV 626 (EDNY, May 3, 2017), Judge Johnson granted defendant's motion for a new trial pursuant to Rule 33, F. R. Crim. P., where the government failed to prove her "specific intent" to violate the International Emergency Economic Powers Act, 50 U.S.C. §§1701-1707 (IEEPA).

Defendant Anastasia Diatlova was convicted on Counts One and Eight of a 17-count indictment charging her and 10 others related to their employment at Arc Electronics, a Houston-based company engaged in exporting microelectronics and other high-tech products. Count 1(a) charged her with conspiring to violate the IEEPA and Count 1(c) with conspiracy to commit wire fraud, 18 U.S.C. §1343. Count Eight charged her with violating the IEEPA by shipping an export-controlled microelectronic to Russia without obtaining the required permission from the Department of Commerce.

As shown by the trial evidence, Arc was not a manufacturer, but resold goods bought from U.S. corporations to Russian entities. Some of those products require permission under the IEEPA from the Department of Commerce before they can be sold to individuals and corporations in certain countries. Defendant, a salesperson at Arc, was among the lowest-earning employees, earning about $2,800 per month. Her job was to assist in filling orders for various parts.

Some U.S. companies providing electronics to Arc demanded a certification from it that the products incorporating the electronics would not be sold abroad in violation of export control laws.

Defendant sometimes provided information as to the end-user of Arc products, but not all Arc products were export-controlled. While there were instances when defendant falsified end-user information in facilitating sales, there was no proof that she did so for items controlled by the IEEPA or knew that other Arc personnel were providing false end-user information to U.S. entities to circumvent the IEEPA.

Of particular significance here, there is no evidence that she acted with specific intent to violate the IEEPA by shipping a certain memory chip to Russia. Rather, the government's case relied on thin inferences, making her conviction on Count Eight a "manifest injustice." Given the opportunity to pin down evidence of intent, the government-"after document-dumping the Court with thousands of pages of transcripts to 'see'"-pointed to proof that, at the time of her arrest, she knew the part at issue was restricted, and that some co-defendants knew of IEEPA violations. Slip op. 6.

Johnson also expressed concern that "spillover evidence" incriminating other defendants could have prejudiced Diatlova with the jury. This added to the necessity for a new trial on Count Eight.

For similar reasons relating to lack of specific intent, Johnson granted a new trial as to Count 1(a), alleging conspiracy to violate the IEEPA.

As to Count 1(c), alleging conspiracy to commit wire fraud, no proof that defendant violated the IEEPA was required, and the evidence of her falsifying certain information was enough to sustain the conviction. Slip op. 6-10.

ADA: Supplemental Jurisdiction

In  Phillips v. 180 Bklyn Livingston, 17 CV 325 (EDNY, May 17, 2017), Judge Cogan, in an action under the Americans with Disabilities Act, 42 U.S.C. §12101 et seq. (ADA), declined to exercise supplemental jurisdiction over related claims under New York state and city law.

Plaintiff sued a Dallas BBQ restaurant in Brooklyn for failure to provide requisite access for disabled persons. When defendants offered to remediate the conditions, "plaintiff's counsel stated in substance that he would have to recommend to his client a very large amount of dollars to settle this action." Slip op. 2. During the initial conference, the court issued an order to show cause why it should not decline to exercise supplemental jurisdiction. Defendants responded, but plaintiff did not.

Cogan acknowledged that the federal and non-federal claims derived from a "common nucleus of operative facts" and therefore qualified for the exercise of supplemental jurisdiction under 28 U.S.C. §1367(a). However, he found grounds to decline that jurisdiction under §1367(a)(2), applicable where the non-federal claim "substantially predominates" over the federal claim, and §1367(a)(4), applicable where "in exceptional circumstances, there are other compelling reasons for declining jurisdiction." Slip op. 4.

The state and city claims differed from the ADA claim in that they permitted money damages, where the ADA allows only injunctive relief to a private litigant, and they called for a jury trial that would address issues of negligence and emotional damages, where the ADA claim would involve only a bench trial that did not address those issues. As Cogan found, the jury trial and need to determine damages would substantially expand the scope of the action beyond the ADA claim.

While citing these factors to show that the state and city claims would "substantially predominate", the decision to decline supplemental jurisdiction was based also on larger policy concerns that amounted to "exceptional circumstances." "[T]he compelling reason to decline supplemental jurisdiction as presented by this case is the prevention of the misuse and exploitation of the ADA in a way that directly contravenes Congressional intent and the remedial nature of the ADA. Congress consciously chose not to permit money damages in ADA actions such as this one, and tacking on state claims that permit damages is effectively creating an end-run on the ADA's purpose and Congress's intent." Slip op. 6.

Cogan was influenced by the primacy plaintiff and her counsel placed on monetary damages over remediation, which defendant had proposed to accomplish within six months. "This Court refuses to allow this plaintiff and her counsel to pursue state money damages through an exercise of federal jurisdiction, particularly where defendants are taking all necessary steps to make their establishment accessible, in line with the spirit of the ADA." Slip op. 6.

Ineffective Assistance of Counsel

In  Rodriguez v. People of the State of New York, 16 CV 5615 (EDNY, May 2, 2017), Judge Bianco denied the habeas petition of twin brothers Edwin Leonel Rodriguez (Edwin) and Edwin Ricardo Rodriguez (Ricardo), claiming ineffective assistance of counsel based on  Padilla v. Kentucky, 559 U.S. 356 (2010), because their attorney did not tell them their guilty pleas would lead to deportation.

Edwin and Ricardo entered the country illegally at the age of nine. In November 2011 they each were charged in the County Court of Suffolk with second-degree rape and sexual misconduct. Both pled guilty to the sexual misconduct charge and were sentenced to six-year terms of probation on July 10, 2012. Ricardo was deported in January 2015.

Under 28 U.S.C. §2244, Edwin's habeas petition, filed within a year after his direct appeal was denied, was timely and he was "in custody" because he was still on probation. Edwin's petition alleged here that "he received ineffective assistance of counsel because plea counsel failed to inform him that deportation was  certain to result from his guilty plea." Slip op. 9 (emphasis in original). In  Padilla, counsel's failure to advise his client that under the applicable statute deportation was "presumptively mandatory" constituted deficient performance. The record in Edwin's case shows that he knew about possible immigration consequences of his guilty plea: (1) he signed a document acknowledging that his plea may have an effect on his immigration status "including a likelihood  or a certainty of deportation, which has been explained to me by my attorney;" (2) at arraignment, he said he understood that no one could make any promises as to the effect of a guilty plea on his status; and (3) his lawyer confirmed that he had explained the immigration issues to Edwin.

As Bianco concluded, however, Edwin's deportation was "presumptively mandatory" under the New York sexual misconduct statute. Thus, his counsel's advice that deportation  could result from a guilty plea was insufficient under  Padilla.

But Edwin could not show prejudice resulting from counsel's deficient performance, because he had "not established ... that he would have rejected the plea deal had he known deportation was a mandatory result of his conviction, that such a decision would have been rational, or that such a decision would have produced a different outcome." Slip op. 15. Edwin's petition was therefore denied.

Bianco denied Ricardo's petition because it did not meet the requirements of 28 U.S.C. §2244. Section 2244 provides that a person in custody pursuant to a state court judgment has one year to file a habeas petition. Because he did not file a direct appeal from the judgment of conviction, Ricardo's conviction became final on Aug. 11, 2012, 30 days after he was sentenced, and he filed his petition on Oct. 7, 2016-four years later. Ricardo did not qualify for any of the exceptions to timely filing: (1) a legal bar preventing him from seeking relief; (2) a factual predicate unknown when the limitations period expired; or (3) a constitutional right newly recognized by the Supreme Court. In addition, Ricardo was not "in custody" because he had been deported before his petition was filed.

Harvey M. Stone and Richard H. Dolan are partners at Schlam Stone & Dolan.