September 12, 2019
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 (sitting by designation) found no "fair and just reason" to allow defendant to withdraw her guilty plea. Judge Nicholas G. Garaufis held that the Board of Governors of the Federal Reserve System had failed to release documents responsive to plaintiff's FOIA request. And Judge Raymond J. Dearie ruled on fee applications by plaintiffs' counsel in a class action case.
Withdrawal of Guilty Plea Denied
In United States v. Kalichenko, 14 CR 95 (EDNY, July 22, 2019), Judge Bianco denied defendant's presentence motion to withdraw her guilty plea, entered several years earlier, despite her dubious claim that she would not have pled guilty had she known that the Ukrainian government was protesting her prosecution in the United States.
This case has a long procedural history. Briefly, in April 2016 defendant pled guilty to crimes involving the sexual exploitation of a minor. According to the superseding indictment, defendant (1) had filmed herself in the Ukraine while she engaged in sexually explicit acts with her daughter, as "scripted" by one Joseph Valerio, a New York resident; and (2) had sent those videos to Valerio in the United States through her mobile phone and parcel delivery service, and had exchanged emails with Valerio about those activities. The sentencing was repeatedly adjourned pursuant to requests by defendant's original counsel, and the court dealt with various defense motions. In February 2018 her original counsel sought an adjournment, stating that Ukrainian officials had met with the U.S. State Department regarding an "earlier" Ukrainian request to assume jurisdiction over this case for crimes committed in Ukraine.
At issue here is defendant's motion in March 2019 to withdraw her plea, in light of the Ukrainian protests. By that time, defendant had new counsel.
Rule 11(d)(2)(B) allows a defendant to withdraw a guilty plea before sentencing if she can show "a fair and just reason" for the request. Bianco found that none of the relevant factors weighed in defendant's favor:
First, there was no assertion of legal innocence. Even assuming that Ukraine is protesting this prosecution, "the United States child exploitation statutes apply extraterritorially to [defendant's] conduct overseas." Slip op. 4. Nor does Ukraine's purported position suggest legal innocence.
Second, the multi-year delay in making the motion "weighs strongly" in favor of denial. Defendant's assertion that she did not learn of the Ukrainian government's protest until the end of 2018 is belied by the record.
Third, a plea withdrawal would prejudice the government. The Assistant U.S. Attorney who prepared the case three years ago has left the office and can no longer try the case. A number of FBI agents, forensic experts and other investigators on this matter have retired. Though the evidence of guilt is overwhelming, a trial now would unduly burden the government's resources.
Fourth, defendant failed to assert any question as to the voluntariness of the plea. Her claim of "pressure" to plead because explicit pictures of her and her daughter would be introduced at trial does not show that the plea was involuntary. Any indication by the government before the plea that the videos would be introduced was merely a "true recital of the scenario that would play out ..." United States v. Doe, 537 F.3d 204, 213 (2d Cir. 2008). Defendant's statements during the plea allocution also show voluntariness. She pled guilty, Bianco found, because of the force of the evidence against her. Ukraine's belated objection to the prosecution of this case would have had no impact on her decision, and her invented, pretextual grounds to challenge the plea, and thus delay the sentence, are not credible.
FOIA Requests: Granted in Part
In Center for Popular Democracy v. Board of Governors of the Federal Reserve System, 16 CV 5829 (EDNY, July 16, 2019), Judge Garaufis granted in part a crossmotion for summary judgment by a non-profit organization seeking production of records from the Federal Reserve under the Freedom of Information Act, 5 U.S.C. §552 et. seq. (FOIA), and denied the bulk of the Federal Reserve's motion for summary judgment.
Plaintiff had served FOIA demands seeking documents relating to (1) the appointment of Reserve Bank presidents and certain classes of directors, and (2) policies regarding the promotion of diversity among the Federal Reserve's leadership. After partial productions were made, the Reserve Bank moved for summary judgment on the ground that its response was adequate. Arguing that defendant improperly narrowed the scope of files searched, used insufficient search terms, failed to search agency records at the Federal Reserve's 12 Reserve Banks, and failed to pursue leads to additional documents clear on the face of the documents produced, plaintiff cross-moved for summary judgment.
The court found defendant's search for responsive documents deficient in various respects. A search of the records for only three members of the board that defendant deemed most likely to have responsive documents did not fairly meet a request for records of all members of the board, which generally has six members at any given time. Defendant further fell short in its selection of search terms for the files it did search. Slip op. 9-14. Its argument that records held at the Reserve Banks, including records regarding the appointment and performance of board presidents, were not agency records, was mistaken, and such records were therefore wrongly excluded from the search. Slip op. 15-20.
In addition, the documents that were produced suggested that various files excluded from the search would include additional responsive documents. For example, the Federal Reserve's Administrative Manual calls for the directors of each Reserve Bank to evaluate the performance of its president annually, but the search did not include the records of many such directors. Slip op. 20-22. The Board of Governors' Frequently Asked Questions webpage, and certain documents in the production, demonstrated or strongly suggested that the Committee on Federal Reserve Bank Affairs (BAC) discusses the Reserve Bank's annual assessments of their presidents and maintains "Annotated Bank Evaluation summaries," so exclusion of the BAC records from the search was also unwarranted. Slip op. 22-23.
Defendant was granted summary judgment only as to an uncontested item, concerning personal privacy rights, and was directed to (1) search the records of all members of the Board of Governors for the relevant period; (2) expand the search terms used; (3) include records of the Reserve Banks in the search, and (4) look specifically for the Annotated Bank Evaluation summaries.
Class Action: Attorney Fees
In New York Association for Retarded Children v. Andrew M. Cuomo, 72 CV 356, 72 CV 357 (EDNY, July 22, 2019), Judge Dearie granted, with a number of modifications, a motion by plaintiffs' counsel for attorney fees and costs for the period 2012 to 2019.
This 1972 class action related to the "deprivation of basic rights, including unclean and unsafe living conditions of individuals with intellectual and developmental disabilities housed at the Willowbrook State Developmental Center in Staten Island." A 1975 Consent Judgment followed by a Permanent Injunction in 1993 called for plaintiffs' counsel to provide legal services and compliance monitoring to enforce the terms of the injunction, with legal fees and costs to be paid by defendants. Plaintiffs' counsel are attorneys from the New York Civil Liberties Union (NYCLU) and New York Lawyers for the Public Interest (NYLPI). The NYCLU attorneys work on protection from harm issues, guardianship matters, end of life and medical consent issues, research issues, regulatory initiatives, legislative enactments and program initiatives issued by the New York State Department of Health and the New York Office for People with Developmental Disabilities (OPWDD). The NYLPI works on due process notices. Plaintiffs' counsel seek fees for performing their responsibilities under the Injunction to (1) audit OPWDD services, (2) compile observed deficiencies, and (3) approve the plan to correct the deficiencies.
From 1997 to 2012, the parties stipulated to attorney fees without seeking court intervention, but this time OPWDD objected to the fees, including the attorney billing rates and hours spent. In response, plaintiffs' counsel brought this motion. Kazowitz, Benson and Torres was retained specifically to prepare the fee application.
As Dearie explained, the Second Circuit applies the "forum rule," which creates a rebuttable presumption that the courts should use the hourly rates common in the district in calculating a reasonable fee. A district court may apply an out-of-district rate only if the moving party demonstrates required special expertise beyond that of the forum law firms. Counsel here asked the court to apply the prevailing market rates from the Southern District of New York, given their constitutional expertise, monitoring experience and resources acquired working on the case over the years. Dearie rejected that request, concluding that the hourly rates sought by plaintiffs' counsel were too high. Nevertheless, a billing rate at the higher end of the spectrum was merited by their expertise in the subject-matter and vast institutional knowledge. Slip op. 12. The court reduced the requested hourly rates from a range of $600 to $150 to a range of $500 to $100. The delay in submitting the fee application was one factor in reducing the billing rates.
The court also reduced the number of hours sought by 10%, because of work outside the scope of the Injunction, such as attending conferences, and vague billing entries.
Addressing the fees sought for preparing the fee application, Dearie heavily reduced the hourly rates and hours sought by Kasowitz, the firm that prepared the fee application, from a range of $925 to $300 per hour to $500 to $250. The number of hours for three of the Kasowitz lawyers was reduced by 50% and 40%, because of "redundant billing, inefficiencies and overstaffing." The number of hours billed on preparation of the fee application by counsel for the NYCLU was reduced by 30%. After the reductions, Dearie awarded NYCLU counsel $2,791,737.90 and NYLPI counsel $110,763. Kasowitz received an award of $30,293.75.
Finally, the court directed plaintiffs' counsel to submit annual fee applications and counsel for OPWDD to provide notice of future fee applications to class members and pay the related costs.
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.