This case provides a good introduction into how employment discrimination cases are decided in the Second Circuit. The plaintiff alleges retaliation for speaking out on financial abuses, and brings this action under the Sarbanes-Oxley Act, which courts resolve under traditional employment retaliation standards.
The case is Yang v. Navigators Group, a summary order decided on December 22. The district court threw out Yang's case on summary judgment. The Court of Appeals (Leval, Sack and Raggi) revives the claim, and it heads to trial. Here is how the district court got it wrong:
1. The district court said Yang did not engage in protected activity when she communicated concerns about some investment risk models because she only offered her own deposition and affidavit testimony about her protected activity. But the Court of Appeals reminds us that this "self-serving" testimony is enough to create an issue of fact for trial. We do not need corroborating evidence if the plaintiff testifies from her personal knowledge that something happened. For more on this concept, see Danzer v. Norden Sys. Inc., 151 F.3d 50, 57 (2d Cir. 1998) and Walsh v. N.Y.C. Hous. Auth., 828 F.3d 70, 80 (2d Cir. 2016). This is an important pointt in discrimination/retaliation cases, as plaintiffs often find they cannot find corroborating witnesses, most of whom will disappear once the lawsuit is filed because they do not want to suffer their own retaliation for assisting the plaintiff-traitor.
2. The district court also said that plaintiff cannot prove she was fired because of her outspoken objections. She was fired two weeks after plaintiff opened her mouth. That is normally close enough to draw a retaliatory inference, but the district court said there was an intervening factor that cut off the causal connection: she gave a disorganized and incoherent presentation to defendant's senior executive team. Intervening factors can in fact kill off a retaliatory inference, and defense lawyers are always looking for this kind of evidence, but the parties here dispute what happened at that meeting. The jury has to resolve this evidentiary conflict, not the district court. As an aside, the district court relied on another district court case in support of its holding that the intervening cause entitled management to summary judgment. But that district court ruling has since been overturned by the Second Circuit, Sharkey v. JP Morgan Chase, 2016 WL 4820997 (2d Cir. Sept. 12, 2016).
3. Plaintiff also wins this appeal because defendant offered conflicting reasons for her termination. Those conflicting reasons suggest defendant was dissembling to shield a retaliatory motive. While defendant cites generalized performance concerns to justify plaintiff's termination, she was never told of these concerns during her employment. Rather, plaintiff says she was only told she was fired because she did not fit into defendant's "culture" and lacked a "hands on" approach to her position. This is an interesting holding. Usually, the "inconsistent explanations" theory of retaliatory or discriminatory intent involves different reasons offered by defendant once the case proceeds to litigation. In this case, we look at what management told plaintiff prior to her termination and compare it with defendant's explanations post-lawsuit.
This case will be of interest only to lawyers who try cases in federal court. The Second Circuit applies a few interesting rules that can make or break the appeal for those of us unlucky enough to lose at trial.
The case is McFadden v. County of Monroe, a summary order decided on December 6. Losing at trial is awful, no matter what side you're on. Think about what it takes for a case to go to trial. The case proceeds to discovery for six months to a year, followed by motion practice, when each side tries to convince the judge either that you have a great case (plaintiff's argument) or there is no case at all and a jury trial would be a waste of time (defendant's argument). If the case cannot settle (most cases settle prior to trial) it means the parties have dug into their positions such that any settlement offer or demand is regarded as an insult and the other side can go to hell. In this context, hell is trial, where eight strangers sit in judgment of your clients. After a week of testimony and trial madness, the jury reaches a verdict. The losing side picks itself off the floor and looks for a way to bring an appeal.
Most jury verdicts are essentially unreviewable on appeal unless the lawyer can argue that the trial court did something wrong that denied you a fair trial. One way to do that is to challenge the jury instructions on appeal. A bad jury instruction can go a long way toward a meritorious appeal. But even those arguments can lose. That's what happened here.
This is an employment discrimination case. The jury ruled against the plaintiff, who relied on the Cat's Paw theory of liability. Cat's Paw is a judge-made doctrine that says if the decisionmaker is a nice guy who happened to rely on the recommendation of a racist or sexist supervisor in terminating your employment, you can win the case because the racist or sexist supervisor tainted the process. Judges like Cat's Paw cases because it allows them to drop a footnote telling us about the Aesop's Fable from which the Cat's Paw language derives. It has something to do with a monkey, chestnuts, a fire and a cat.
Plaintiff argues that he was denied a fair trial because the trial court did not charge the jury on Cat's Paw. He also argues that the court should have told the jury that a retaliation plaintiff can win his case with proof of "a convincing mosaic of circumstantial evidence that would support the inference that retaliatory animus was at work."
Let's look at the mosaic argument. This language comes straight from a Seventh Circuit case, Smith v. Bray, 681 F.3d 888 (7th Cir. 2012). The "mosaic" theory of discrimination proof has turned up in Second Circuit cases, as well. It's another way of saying the plaintiff can win the case with bits and pieces of circumstantial evidence that together make out a mosaic of discrimination. But the mosaic language is useful only for resolving summary judgment motions, where the trial judge decides if the plaintiff has enough evidence to win the case. "Mosaic" is not a legal standard. For that reason, the Seventh Circuit said in the Smith case that any judge who mentions "mosaic" in the jury charge will probably be reversed on appeal. Since the trial court in McFadden's case did tell the jury he can win the case on circumstantial evidence, the jury charge was OK.
Equally interesting, at least for the trial lawyers, is why the Second Circuit (Katzmann, Winter and Calabresi) rejects the Cat's Paw argument. Yes, Cat's Paw language can go into the jury charge. But it was not reversible error for the trial court to omit that language from the jury charge. Since McFadden did not object to the jury charge during the trial, he can only win the appeal if the omission was "plain error," which is another way of saying the trial judge totally blew it. The trial court did not blow it in this case because the Second Circuit had neither accepted nor rejected the Cat's Paw approach when the trial took place. Since plain error only exists when the the trial court's ruling was contrary to law at the time of the ruling, McFadden cannot win the appeal on this basis. Which means the verdict stands.
The Second Circuit recently issued a lengthy ruling that upheld a false arrest and excessive force judgment in favor of a 17 year-old plaintiff who was awarded $196,500 in damages. Here I discuss the second plaintiff's claim, which lost at trial. The Court of Appeals ordered a retrial for this plaintiff.
The case is Dancy v. McGinley, decided on December 7. While Elting won his false arrest/excessive force claims, the jury rejected Dancy's excessive force claim. The Second Circuit (Chin, Livingston and Carney) says the trial court did not give the proper jury instruction on Dancy's excessive force claim.
Officer Williams testified that, at the time of Dancy's arrest, he deliberately bent Dancy over a police car but that he did not cause Dancy to suffer his injuries, which included a broken jaw. He also said he never intended to harm Dancy. The trial court instructed the jury that it had to find that Williams "acted intentionally or recklessly" rather than "merely negligently" in his interaction with Dancy. The court suggested that if Williams' actions were "merely negligent," Dancy could not win the case. The jury ruled against Dancy.
Here is the lay of the land in Fourth Amendment cases alleging excessive force. Plaintiffs "must prove the officer intended to commit acts that constituted a seizure in the first instance." But intent is not relevant "as to the officer's underlying motivation for his actions during the seizure. ... An officer's good intentions are immaterial and will not justify an objectively reasonable use of force." In other words, "objectively unreasonable actions during the course of a seizure, even if based on a mistake, are unconstitutional." Once a seizure is initiated, the officer's objectively unreasonable conduct may violate the Fourth Amendment, even if he did not intend to injure the plaintiff. While Fourth Amendment cases require intentional actions by police officers, "in the excessive force context, the intent in question can only be the intent to perform some action, not that a particular result be achieved." In reaching these legal conclusions, Judge Chin draws in part from cases from around the Circuits.
What this means for Dancy is that the district court should not have charged the jury that "if the defendant's acts were merely negligent ... the jury must find that the plaintiff has established his claim." The jury could have believed from this instruction that an officer must have intended the results of his actions or consciously disregarded their consequences. Dancy could have won this case simply by proving that Williams applied some degree of force and did so deliberately. The jury was not able to conclude that Williams intentionally used force, but that he was not liable if he did not intend that the force cause Dancy's injuries. The Court stated:
Under the district court's instruction, the jury could have concluded that there was no violation because Williams did not intend to use enough force to break Dancy's jaw. But given Williams's admission that he intentionally used some amount of force on Dancy, it is irrelevant whether he intentionally applied force sufficient to break Dancy's jaw or otherwise intended to injure Dancy.
2d Circuit upholds $196,500 damages award in false arrest/excessive force case (Dancy v. McGinley Part II)
This is Part II of my discussion of Dancy v. McGinley, a recent decision from the Second Circuit that upheld a false arrest judgment in favor of the plaintiff, whose case was sufficiently clear-cut that the trial court ruled in his favor mid-trial, taking the case away from the jury entirely. Part I of my discussion is at this link. In the interests of full disclosure and to dispel any suspicion that this post was written by the Russians, I co-litigated this case with Christopher Watkins, Esq.
Elting did not just allege that Police Officer McGinley had falsely arrested him. He also said that McGinley had caused him to suffer physical injuries. So we have an excessive force claim, as well. When the trial court ruled as a matter of law that McGinley had falsely arrested Elting, she ruled that any injuries sustained by Elting as a result of the arrest were unjustified as a matter of law. Here is Elting's evidence of the physical injuries:
Elting testified that, after McGinley stopped them and said that he suspected Dancy of criminal activity, Elting took out his phone to call his mother -- a local corrections officer. McGinley told him to put his "fucking phone away." McGinley then grabbed Elting by his left arm and spun him around to the ground. Elting landed on his shoulder and his face hit the ground. McGinley twisted Elting's left arm behind his back, and pressed his knee into Elting's back. At the time, McGinley weighed between 205 and 220 pounds while Elting weighed 140 pounds. Other officers arrived and began punching Elting in the back while he was on the ground. Dancy testified that he saw McGinley punch Elting in the ribs while Elting was held to the ground. Another officer punched Elting in the face, causing his head to hit the pavement. He was then handcuffed and lifted up, at which point he saw another officer pointing a gun toward him.
At the police station, Elting was interrogated about the robbery and detained for about eighteen hours. After his mother bailed him out, Elting went to the emergency room. "He was in pain and had bruises and abrasions on his head, face, and torso. There was swelling on the right side of his head and left side of his face. The hospital conducted a CAT scan and chest x-ray, which revealed no fractures. The emergency room medical records confirm the bruising to the right side of head, face, and torso, with the recommendation to allow for natural healing and to take Advil to relieve pain. Its physical assessment documented the following: left eye pain, head pain, bruising on cheeks, elbow, back, swelling of his head and temporal area, tender upper and lower back, and abrasions to his nose and hand." Soon afterwards, "Elting began complaining of pain while urinating, and his mother took him to see his regular physician. Elting reported the same injuries as well as long-lasting migraine headaches and soreness. He reported back pain over his right kidney. His physical injuries healed after two to three weeks."
Elting missed a week of school as a result of the incident, and he sought counseling. The experience "changed [his] outlook on a lot of things," and that he lost "trust [in] the police" and his mother's coworkers in law enforcement. "At the time of trial, he continued to seek counseling as a result of the incident because he 'always expect[s] the worst to happen,'" and he became a withdrawn young man who underwent a personality change, according to Elting's mother.
The jury awarded Elting $115,000 for the false arrest and $100,000 for the excessive force. The trial court reduced the excessive force damages to $81,500. The Court of Appeals (Chin, Livingston and Carney) upholds the $81,500/$115,000 damages award. The general rule is that we defer to the jury's views on damages unless the award "shocks the conscience." We also defer to the trial court's damages assessment in reducing the award. Appellate courts will look to comparable cases in determining whether the damages are too high.
Elting's damages award falls in line with comparable cases, the Second Circuit holds, even if no two cases are alike. Judge Chin notes in particular that Elting suffered "substantial" damages from the false arrest, particularly because of his age -- 17 years old -- and Second Circuit authority that recognizes that "an event such as he experienced here has a deeper and lasting impact on a seventeen-year old than an adult." The Court notes that Elting has lost trust in law enforcement even though his mother is a law enforcement officer. This prompts the Court to draw from Justice Sotomayor's dissenting opinion in a recent Fourth Amendment decision: ""For generations, black and brown parents have given their children 'the talk' -- instructing them never to run down the street; always keep your hands where they can be seen; do not even think of talking back to a stranger -- all out of fear of how an officer with a gun will react to them."
The Court of Appeals has upheld the judgment in favor of an excessive force/false arrest plaintiff who prevailed at trial after the district court granted the plaintiff's motion for Rule 50 relief. The second plaintiff, who lost at trial, wins a retrial with new jury instructions on his excessive force claim. This case raises a variety of issues, to be discussed in a series of blog posts.
This false arrest claim saw the plaintiffs arrested for trespass when they went to an empty house in New York City for a party. The Second Circuit reverses summary judgment and finds that a jury may rule in plaintiffs' favor on their false arrest claim because the police did not conclusively establish that they had probable cause to think the house was abandoned.
The case is Mitchell v. City of New York, decided on October 28. The police were familiar with the brownstone, and in connection with a prior police call, they went inside and it looked empty. But a few weeks later, upon seeing people on the property, the police went inside and saw about 30 people inside with a bar, disco lights, a big TV, some couches and an electrical thingamajig hooking up the house's electrical supply from an outside location. When no one at the party answered when the police asked who owned the house, everyone got arrested. The question here is whether the police had probable cause to think the house was abandoned such that they were able to arrest everyone for trespass.
The Second Circuit (Winter, Pooler and Sack) says "it appears that no member of the NYPD made serious efforts to verify the legal status of the brownstone, i.e., the existence of a person or entity with a claim of occupancy of ownership, the property's status under the FTAP, or the lack of any claim or other status." FTAP is a City program that allows the police to take custody over empty properties when people complain about riff-raff using them. The officers did not investigate the ownership status of the property and only assumed it was abandoned. In fact, there was a "for-sale"sign on the property, suggesting that someone claimed ownership of the brownstone. The only basis for the officers to believe the property fell within the FTAP program was word-of-mouth. As for the extension cords, the Court says, that could have been explained by someone's desire to protect the circuits in the brownstone. Moreover, the officers only called the realtor selling the property once to see if it was abandoned; after leaving a voice message, no one followed up with the realtor. While everyone at the party was silent when the police asked who owned the property, that "does not necessarily establish that the officers had a reasonable factual basis for thinking that the brownstone was abandoned."
The facts of this case suggest it was a close call, and it took the Court of Appeals 18 months to decide this appeal, which is a mighty long time. What strikes me about this case is that, at first glance, the house properly did look to be abandoned, but the police did not try hard enough to establish that it was in fact abandoned. The Second Circuit cites a New York Court of Appeals ruling, Colon v. City of N.Y., 455 N.E.2d 1248, 1250 (1983), which says “the failure to make a further inquiry when a reasonable person would have done so may be evidence of lack of probable cause.” This is a correct statement of the law, but those who handle these cases on a regular basis will tell you that a common legal principle that turns up in in false arrest rulings is that the police are not required to undertake a full investigation before determining they have probable cause to arrest someone. That principle does not apply in this case, which is remanded to the district court to resolve the qualified immunity issue.
When the New York City Council passed its own civil rights law, it wanted broader protections against employment discrimination than provided by Title VII. The question in this case is whether the City law's punitive damages standard is co-terminus with Title VII, or whether plaintiffs under the City law may recover them even without proof that the employer acted in reckless or wanton disregard of the civil rights laws.
The case is Chauca v. Abraham, decided on November 1. I argued the appeal. Anne Donnelly Bush tried the case in the Eastern District of New York, convincing a jury that the defendant terminated plaintiff's employment because of her pregnancy. At trial, the judge declined to charge the jury on punitive damages on the City law claim, reasoning that, even if the employer discriminated against plaintiff, there was no evidence that the employer acted in reckless disregard of plaintiff's civil rights. In other words, the district judge applied the federal standard. Chauca argues that the federal standard does not apply to City law claims.
Chauca prevailed at trial because she was not allowed to return to work after she had a baby. Her less senior co-workers were able to keep their jobs. Plaintiff's boss testified that he did not return her to work because she had filed an EEOC charge against her employer. The jury gave Chauca $60,500 in damages.
The Court of Appeals (Katzmann, Sack and Hall) cannot decide the punitive damages issue just yet. The Court says that no binding state court ruling has definitively resolved what legal standard governs punitive damages claims under the City law. Chauca argued that the City law presumes that discrimination victims are entitled to a punitive damages jury charge even without evidence that the discrimination was wanton and reckless. She grounds that argument in statutory construction and the City Council's directive that courts liberally apply the City law. Defendant notes in response that the Second Circuit in 2001 held that punitive damages claims are governed by the Title VII standard. But the Court of Appeals wonders whether that case, Farias, remains good law after the City Council said in 2005 that courts were not liberally applying the City law.
What does the Second Circuit do when it has an unresolved issue of state law? It can certify that issue to the state Court of Appeals, which presumably knows more about state law than federal judges do. That is what the Second Circuit does here. The issue is sent to the state's highest court to issue a definitive ruling. When that happens, the case returns to the Second Circuit to resolve the appeal once and for all, benefiting from the state Court of Appeals' statutory interpretation.
It often happens that employees who complain about workplace discrimination don't actually have a viable discrimination claim, but the employer's vindictive response to the internal discrimination complaint hands the plaintiff a retaliation case on a silver platter. That is what happened here.
The case is Vogel v. CA, Inc., a summary order issued on October 25. Vogel worked for a computer software company. At some point, he was recruited by Kozak to join the company's India Service Provider Team, eventually answering to Perlman. In early 2010, Vogel complained that he was being treated differently because of his race. Afterward, Perlman treated him badly and Vogel was fired because he did not meet his sales quotas. Here is what the Second Circuit (Lohier, Livingston and Rakoff [D.J.]) does with the case:
1. Vogel has no underlying discrimination claim even though supervisors uttered racial comments. While Kozak said that "Indians would rather work with Indians," Kozak said this shortly before he recruited Vogel to work on the India Service Provider Team, undercutting any inference of discriminatory intent. And it was Perlman and not Kozak who allegedly treated Vogel like garbage until the date Vogel was fired. While Perlman said that "Vogel does not work well and play well with the guys in India," that proves nothing because the record shows that Vogel had a tense working relationship with his team members in India. Summary judgment is affirmed on the discrimination claim.
2. The retaliation claim is a horse of a different colour. This is what I mean when I say the cover up is worse than the crime. Think of Watergate. Nixon's people broke into the Democratic headquarters. That was bad. But it was the cover-up -- where Nixon obstructed the criminal investigation into the break-in -- that led to Nixon's resignation, spending the final years of his life in New Jersey. What happened to Vogel was no Watergate, but there will be a trial in this case, and that's bad for the defendant. The issue is whether Vogel can prove an adverse employment action, which exists if the employer's response to his good-faith discrimination complaint would dissuade a reasonable employee from complaining about discrimination in the future. Perlman singled out Vogel for hostile treatment, harassing him on conference calls, making jokes about him in front of colleagues, removing him from meetings, yelled at him, called him names, told him his actual performance was irrelevant and repeatedly said he did not want Vogel on his team. Vogel was fired 11 months after complaining about discrimination. The Court of Appeals says this is enough for a retaliation claim, as Vogel testified that Perlman kicked him around shortly after he complained about the discrimination.
This is interesting reasoning, as many claims that management hounded the plaintiff following a discrimination claim fail on the adverse action element of the prima facie case. But if you put an employee through the wringer, that can be enough to dissuade a reasonable employee from complaining.
Collective bargaining agreements sometime contain language that says that any legal disputes between workers and management have to be handled in arbitration, not court. Assuming the employees even know the CBA says this, they probably give it little thought until they decide to file a discrimination lawsuit against the employer. When they make that decision, their lawyer will tell them that the CBA's arbitration agreement says they cannot go to court and have to proceed in arbitration. For various reasons, most plaintiffs' lawyers prefer court to arbitration, and defendants prefer arbitration, or they would not fight so hard to keep these claims out of court. But the arbitration language has to be done right, or else the employer has to defend the case in court. This arbitration clause was not good enough, and the plaintiffs win the appeal.
The case is Lawrence v. Sol G. Atlas Realty Co., decided on October 28. The courtroom guarantees certain procedures and protections that arbitration cannot provide. That's why arbitration agreements have to be exquisitely drafted, to ensure the employees know exactly what they're getting into when they ratify the CBA. The Supreme Court has therefore said that in order for a mandatory arbitration agreement in a CBA to prevent the employee to litigating her statutory claims in court (like Title VII or the ADEA), "the inclusion of such claims must be unmistakable, so that the wording is not susceptible to a contrary reading." To put it in layman's terms, the arbitration provisions of the CBA must be as clear as the river stream on a winter's day and written so that normal people can understand it.
This CBA did not satisfy that standard. This is what it says:
There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability of an individual in accordance with applicable law, national origin, sex, sexual orientation, union membership, or any characteristic protected by law. Any disputes under this provision shall be subject to the grievance and arbitration procedure (Article V).
Article V is the mechanism of arbitration, which says the employee must first file a grievance with management, and that if the grievance cannot be settled, it goes to the Office of the Contract Administrator. It goes on to say that “[t]he procedure herein with respect to matters over which a Contract Arbitrator has jurisdiction shall be the sole and exclusive method for the determination of all such issues."
Since this arbitration clause is too general and does not say that claims that might be brought under Title VII, Section 1981 or the ADEA must be arbitrated, its language was not "clear and unmistakable" to deprive employees of their right to file a lawsuit. While the "No Discrimination" provision prohibits discrimination and compels arbitration of "any disputes under that provision," that only creates a contractual right of employees to be free from unlawful discrimination that is subject to arbitration. But "a contractual dispute is not the same thing as a statutory claim,. even if the issues involved are coextensive." Indeed, the Second Circuit (Jacobs, Livingston and Rakoff [D.J.]) says, "the No Discrimination provision may plausibly be interpreted to require arbitration of contractual disputes only." But it says nothing about "claims" or "causes of action" and cites no statutes.
Stephen Bergstein is a civil rights lawyer in Orange County, N.Y. He has briefed or argued more than 200 appeals in the state and federal courts.