Source: https://pacesecondcircuit.blogs.pace.edu/
Timestamp: 2019-04-20 12:16:09+00:00

Document:
Case Name: Davis-Garett v. Urban Outfitters, Inc.
Plaintiff Blair Davis-Garett brought an employment discrimination suit against her former employer, Anthropologie, Inc. and its parent company, Urban Outfitters, Inc., alleging that they discriminated against her on the basis of age and retaliated against her for bringing discrimination complaints. For example, she stated that when she worked at an Anthropologie store at the Roosevelt Field Mall in Long Island, the other sales associates got to rotate through various sections of the store, while she (at age 54) was assigned to spend most of her time staffing the fitting room. She further alleged that after that store closed, she was reassigned to the Anthropologie store in White Plains and told that she had been placed there because of the “demographics in White Plains,” i.e., that the “people that shopped in the store were older.” She alleged that there, she once again received less favorable assignments than her younger colleagues. After complaining, she was transferred to the Greenwich store, and was later terminated after an incident where she called the police on someone whom she believed was shoplifting. Ultimately, the District Court for the Southern District of New York granted summary judgment to the defendants, holding that Plaintiff had failed to present sufficient evidence of age-related abuse and adverse employment action to support her claims.
The Plaintiff appealed, and the Second Circuit vacated the judgment and remanded the Plaintiff’s federal and state claims back to the district court. It found that the district court erred in finding that pre-February 16, 2013 events were time barred in connection with Plaintiff’s claims since they occurred before the permissible 300-day filing period under 29 U.S.C. § 626(d)(1)(B). The Second Circuit held that since hostile work environment claims involve repeated conduct and are based on the cumulative effects of individual acts, a claim will not be time-barred as long as all acts that constitute the claim are “part of the same unlawful employment practice and at least one act falls within the time period.” In addition, the time bar does not prevent a plaintiff from using prior acts that fall outside of the scope of the permissible time period as background evidence in support of a timely-filed retaliation claim.
The Second Circuit affirmed the dismissal of charges against two criminal defendants after finding their Sixth Amendment Speedy Trial right had been violated. The Court noted that this decision marks the third time in two years that a criminal defendant’s right to speedy trial was violated in the Western District of New York.
Defendants-appellees were indicted on March 6, 2012, and charged with one count of Hobbs Act conspiracy. On March 7, 2012, prosecutors informed the district court that the case against Defendants might become eligible for capital prosecution. Two years and nine months later, the prosecution filed a superseding indictment that added new charges and accused the Defendants of an entirely new crime. A decision whether to seek the death penalty had not yet been made with regard to the initial crime when the prosecution filed the new charges. On January 13, 2015— two years and ten months after the government informed Defendants that they could potentially face capital prosecution—the government decided that it would not seek the death penalty. It took another two years and ten months before the government brought the Defendants to trial; in sum, Defendants waited sixty-eight months for a trial. The District Court granted Defendants’ pre-trial motion to dismiss based on speedy trial grounds, and the government appealed.
In 2012 and 2013, Robert D. Haar (“Haar”), an orthopedic surgeon, provided treatment to several patients injured in car accidents for which Nationwide Mutual Fire Insurance Company (“Nationwide”) was the insurer. After treating these patients, Haar submitted the claims to Nationwide for payment of the medical treatment he provided. Nationwide denied one claim in full and denied three others in part. Nationwide based the full denial on a Peer Review Report which stated that there was no cause and effect relationship between the injuries treated and the alleged incident. For the other three claims, Nationwide based its decision on the applicable fee schedule, rather than any issue with the medical treatment provided. Nationwide then submitted a complaint to the New York State Office of Professional Medical Conduct (“OPMC”). On January 27, 2017, the OPMC notified Haar that it had concluded an investigation and would not take any disciplinary action.
Harr then initiated this suit under N.Y. Public Health Law section 230(11)(b) against Nationwide, alleging that Nationwide had submitted a bad faith report about him with the OPMC. On November 30, 2017 the United States District Court for the Southern District of New York dismissed Haar’s complaint, finding that the New York Court of Appeals, were it faced with the question, would find that the statute does not create a private right of action. Because the issue turns on a question of state law for which no controlling decisions of the New York Court of Appeals exist, and given a split in the Appellate Division, the Second Circuit certified this question to the Court of Appeals, pursuant to 22 N.Y.C.R.R. § 500.27 and 2d Cir. R. 27.2(a).
The Second Circuit stated that New York courts are to consider three factors when determining whether an implied private right of action exists under a statute: (1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme. The district court had held that the overall statutory scheme was not enacted for the benefit of individuals against whom reports were made but, rather, to create a scheme to regulate medical misconduct.
The Second Circuit noted that, in relation to the second factor, the Court of Appeals has articulated the purpose of section 230(11)(b) as encouraging complaints by individuals who would otherwise be reluctant to provide information regarding errant doctors for fear of litigation, and has written that the creation of an implied right of action would “chill such complaints.” Nevertheless, the Second Circuit found that the Court of Appeals had not squarely ruled on the issue of whether a private right of action exists under the statute and New York’s Appellate Division has been split over this issue for over a decade. Accordingly, although the parties did not request certification, the Second Circuit certified the dispositive question of law – does New York Public Health Law Section 230(11)(b) create a private cause of action for bad faith and malicious reporting to the Office of Professional Medical Conduct – to the New York Court of Appeals.
To read the full opinion, please visit this link.
In this decision, the Second Circuit held that hostile work environment claims are cognizable under the Americans with Disabilities Act (“ADA”), 42 U.S.C. §§ 12111 et seq.
Plaintiff-Appellant Christopher Fox has suffered from Tourette’s Syndrome and Obsessive‐ Compulsive Disorder (“OCD”) since birth. In 1996, he started working for Costco’s Holbrook, New York warehouse. During his long tenure, he worked on the floor crew, as an Assistant Cashier, Cashier, and Greeter. In 2013, while Fox was working as a Greeter, he was reprimanded twice by an Assistant Manager who was not his immediate supervisor, for leaving the Costco entrance area and for leaving a cart unattended in front of the freezers. There was no formal disciplinary action. Costco’s management received two customer complaints about Fox’s behavior in 2013 and 2014 while he was working as a Greeter. Both complaints were from female customers who took issue with comments Fox made to them, one about her appearance, and the other, about his love for her. After the first complaint, General Manager Larry Resnikoff addressed the matter with Fox and warned him he would terminated if it happened again. After the second complaint, Resnikoff asked Fox to write down what happened, then suspended Fox for three days without pay and transferred him to an Assistant Cashier position so he would have less direct contact with customers. The transfer was made in lieu of Fox’s termination, and neither his salary nor his benefits were reduced as a result.
Once he began his position as an Assistant Cashier, other Costco employees bullied Fox. His neurological condition often caused him to touch the floor before moving, and he would often cough when he felt a verbal tic coming on, in order to prevent others from hearing him swear. The Costco employees mocked him by making “hut-hut-hike” remarks to mimic his verbal and physical tics. Additionally, Fox was denied his breaks on a couple occasions in 2014. Fox emailed Costco’s CEO Craig Jelinek in March 2014 to explain his working conditions and his concern that the recent change in atmosphere was causing him stress and aggravating his symptoms. Fox did not mention the “hut-hut-hike” comments. Even though Fox had not followed Costco’s internal procedures for filing complaints, Resnikoff initiated an investigation, interviewing employees and transferring one of the perpetrators to another position. After the investigation, Costco employees continued to treat Fox poorly because of his disability. In November 2014, Fox suffered a panic attack while he was at work, for which he required medical attention. He has been on indefinite medical leave since the anxiety attack.
In January 2015, Fox sued Costco for disability discrimination under the ADA and New York State Human Rights Law (“NYSHRL”), alleging hostile work environment, disparate treatment, failure to accommodate, and retaliation. The U.S. District Court for the Eastern District of New York granted summary judgment to Costco on all of Fox’s claims, determining that the record did not sufficiently support any of Fox’s theories of recovery.
On appeal, the Second Circuit affirmed in part the district court’s judgment dismissing the disparate treatment, failure to accommodate, and retaliation claims. However, it vacated in part the order barring Fox’s hostile work environment claim and remanded it for further proceedings, after finding that such claims are cognizable under the ADA and that there are disputes as to material facts with regard to Fox’s claim.
Case Name: SEC v. Raj Rajaratnam, et al.
In 2011, Raj Rajaratnam, former hedge fund manager of Galleon Management, LP, was indicted in the Southern District of New York on nine counts of securities fraud under Section 17(a) of the federal Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act. Rajaratnam’s criminal indictment was based on his insider trading of the stock of five different companies, in addition to five counts of conspiracy to commit insider trading.
On the day of his arrest, the Securities and Exchange Commission (“SEC”) filed a related civil action against Rajaratnam in the Southern District of New York. The SEC based its civil allegations on the same insider trading conduct charged in the criminal case, as well as additional violations of the Securities and Exchange Acts stemming from Rajaratnam’s alleged purchases and sales of stock in certain companies based on material nonpublic information. In the civil action, the SEC sought an injunction against further securities violations, disgorgement of Rajaratnam’s gains from the alleged violations, and a civil monetary penalty under Section 21A of the Exchange Act.
Following an eight-week trial in the criminal case, a jury found Rajaratnam guilty on all counts, and he was sentenced to 132 months’ imprisonment and ordered to pay a $10 million criminal fine and a court-imposed forfeiture of $53.8 million. Following Rajaratnam’s conviction and sentencing, the SEC moved for partial summary judgment on the civil insider trading claims that formed the basis of Rajaratnam’s criminal conviction. Rajaratnam conceded liability based on principles of equitable estoppel, leaving the amount of the civil penalty as the sole issue for the district court to decide on summary judgment. The district court accepted Rajaratnam’s calculation that the “total profit gained and loss avoided” from the insider trades was $30,935,235, and that he personally gained approximately $4.7 million. It then determined that the language of Section 21A imposing a penalty of “three times the profit gained or loss avoided” was not limited to a penalty equal to three times Rajaratnam’s personal gains of $4.7 million. Rather, the court held, the penalty extended to the total profit of nearly $31 million from the illegal trades he secured. Based on this reading of the statute, and considerations of Rajaratnam’s “egregious” violations, the district court imposed the maximum civil penalty of $92,805,705.
On appeal before the Second Circuit, Rajaratnam made two main arguments. First, he argued, as he did in the district court, that Section 21A penalties are not permitted to exceed three times of his personal profit gained or loss avoided. Second, Rajaratnam argued that the district court abused its discretion in imposing the maximum penalty because it impermissibly relied on his wealth and ability to pay and ignored the criminal penalties previously imposed on him.
In analyzing the permissible extent of a Section 21A penalty, the Second Circuit relied on the plain meaning of the statute and case law, and agreed with the district court that Section 21A “permits a civil penalty to be based on the total profit resulting from the violation.” The Court also found that the district court’s interpretation of Section 21A was consistent with the congressional intent of federal securities laws to allow civil penalties based on the total profit resulting from a violation, rather than merely the profit earned by the defendant. Moreover, the Court determined that the lower court’s penalty effectuated the purpose of Section 21A to deter the exact conduct that Rajaratnam had been found liable for (both criminally and civilly).
As to Rajaratnam’s abuse of discretion argument, the Second Circuit relied on its own precedent, as well as the precedent of other circuits, in determining that the district court permissibly considered Rajaratnam’s wealth and ability to pay in imposing the civil penalty. Specifically, the Court found that the district court had undertaken “a careful and thoughtful analysis of the factors bearing on the appropriate penalty.” Moreover, the Court determined that the district court properly considered Rajaratnam’s criminal penalty in calculating his civil penalty, and Section 21A contemplates and permits the imposition of civil penalties in addition to criminal penalties.
Accordingly, the Second Circuit affirmed the district court’s imposition of a $92,805,705 civil penalty against Rajaratnam.
Case Name: Francis v. Kings Park Manor, Inc.
In this decision, the Second Circuit held that a landlord may be liable under §§ 3604 and 3617 of the Fair Housing Act of 1968 (“FHA”) and analogous provisions of the New York State Human Rights Law (“NYSHRL”) for failing to take prompt action to address a racially hostile housing environment created by one tenant targeting another, where the landlord knew of the discriminatory conduct and had the power to correct it.
Plaintiff Donahue Francis signed a lease in 2010 and moved into an apartment unit of a complex owned by Defendant Kings Park Manor (“KPM”) and managed by Defendant Corinne Downing shortly thereafter. After several months, Francis’s neighbor Raymond Endres began to subject Francis to a “relentless campaign of racial harassment, abuse, and threats.” Fearing for his personal safety, Francis contacted the police in March 2012 to complain. He filed a police report and spoke to police, who reported Endres’s conduct to the KPM defendants. The KPM defendants did not take action. Francis continued to suffer harassment from his neighbor and filed another police report in May 2012, this time notifying the KPM defendants directly via letter. The KPM defendants again did not respond, and Endres’s conduct persisted—to the point where he was arrested for aggravated harassment, a charge to which he pleaded guilty. In August 2012, Francis sent a second letter to the KPM defendants informing them of Endres’s recent arrest and that Endres continued to direct racial slurs at Francis and anti-Semitic remarks against Jewish people. When Endres attempted to photograph Francis’s apartment in September 2012, Francis contacted the police and the next day sent the KPM defendants a third and final letter complaining about Endres’s continued harassment. The KPM defendants declined to follow up, and instead directed Downing “not to get involved.” Endres remained a tenant of the apartment complex until his lease expired in January 2013.
In June 2014 Francis sued the KPM defendants and Endres for violations of the FHA, the Civil Rights Act, and the NYSHRL, as well as for negligent infliction of emotional distress, and for aiding and abetting a violation of NYSHRL. Francis also sued the KPM defendants for breach of contract and breach of the implied warranty of habitability, and Endres, for intentional infliction of emotional distress. Francis alleged the KPM defendants failed to investigate or attempt to resolve his complaints of racial abuse, instead permitting Endres to remain at the complex until his lease expired without reprisal. The United States District Court for the Eastern District of New York entered a default judgment against Endres when he failed to appear, and granted the KPM defendants’ motion to dismiss under Rule 12(b)(6) except as to the implied warranty of habitability claim.
The Second Circuit vacated the District Court’s dismissal of the federal claims and the NYSHRL claims, remanded for further proceedings, and affirmed the remaining judgment. In so doing, the Court ruled that landlords are subject to the Fair Housing Act if they knew or should have known about third-party conduct that created a hostile environment, and failed to take corrective action despite having had the power to do so.
Case Name: Levy v. BASF Metals, Ltd.
After obtaining a partial recovery in the 2014 settlement of a suit alleging platinum market manipulation class action, the plaintiff, an attorney proceeding here pro se, brought the present action against a different set of defendants on September 16, 2015. In the 2015 complaint, she raised similar platinum market manipulation claims in violation of state and federal law. She alleged that she first learned about certain conduct by the defendants, and their identities from a complaint filed in a related 2014 class action suit. The United States District Court for the Southern District of New York granted defendants’ motion to dismiss, finding that the plaintiff’s federal claims were time barred, and declined to exert supplemental jurisdiction over her state law claims.
The Second Circuit affirmed the district court’s decision in a summary order published simultaneously with a separate decision where they specifically address the plaintiff’s Commodities Exchange Act (“CEA”) claims. In so affirming that her federal claims were time-barred, the Court held, for the first time, that Rotella v. Wood, 528 U.S. 549 (2000) applies to CEA claims. Under Wood, federal courts apply a ”discovery accrual rule” – pursuant to which “discovery of the injury, not discovery of the other elements of the claim” will “start[s] the clock” for statute of limitations purposes – when a statute does not address the issue.
In applying the rule to the facts in the case, the Court found the plaintiff discovered her CEA injury when she suffered the financial losses in 2008 in what her complaint describes as “’an extraordinary, unprecedented and unjustified sudden collapse’” in market price. Because the CEA sets a two-year limitations period, plaintiff’s 2015 suit was thus time -barred. The Court emphasized that the date on which this plaintiff had actual knowledge of her injury, and not years later when she discovered additional information relating to the identity of the defendants or other information about the manipulation scheme necessary for her to bring suit, determined the limitations period.
This decision involved 88 consolidated appeals stemming from Bernard Madoff’s Ponzi Scheme. Many of the direct investors in Madoff Securities (Bernard Madoff’s New York investment firm) were “feeder funds”—entities that pool money from numerous individual investors and then place the pooled money into a “master fund,” like Madoff Securities. Although Madoff Securities was supposed to then actually invest the money, it instead simply commingled the various investor money into a checking account at JPMorgan Chase. Whenever an individual investor wanted to withdraw money from a feeder fund, the feeder fund would initiate a withdrawal request to Madoff Securities. To satisfy the request, Madoff Securities would then transfer commingled investor money from the JP Morgan Chase account to the feeder fund, which in turn would transfer the money back to the individual investor.
After the Ponzi Scheme came to light and Madoff Securities was placed into liquidation, Irving Picard was appointed as Trustee for the Liquidation of Bernard Madoff Investment. The Trustee sought to recover the moneys that had been “withdrawn” by individual investors from feeder funds that had pooled their money in Madoff Securities. The Trustee argued that the transactions that occurred when Madoff Securities transferred the commingled moneys to the feeder funds (in response to investor requests) were voidable as fraudulent under § 548(a)(1)(A) of the Bankruptcy Code and could be recovered under § 550(a)(2) of the Bankruptcy Code by the Trustee. The particular question in these appeals was whether the Trustee could recover such moneys even from foreign investors in foreign feeder funds that had invested in Madoff Securities.
In the underlying case, plaintiffs sued federal law enforcement officials and officers alleging that they were put on a national “No Fly” list, despite not posing an aviation threat, in retaliation for their declining to serve as FBI informants reporting on fellow Muslims. Plaintiffs alleged defendants’ actions constituted a substantial burden on their exercise of religion in violation of the Religious Freedom Restoration Act (“RFRA”). The United States District Court for the Southern District of New York dismissed the complaint, in relevant part, on the ground that the RFRA does not permit private parties to recover monetary damages against federal officers sued in their individual capacities. Plaintiffs appealed and, on June 25, 2018, a Second Circuit panel consisting of Chief Judge Katzmann and Circuit Judges Pooler and Lynch reversed, holding that the RFRA does permit private recovery of money damages against federal officers sued in their individual capacities.
Following the June 2018 decision, an active judge of the Second Circuit requested a poll on whether to rehear the case en banc. A majority of the Second Circuit declined the en banc review, and Judge Pooler issued a written concurrence, joined by Chief Judge Katzmann, in support of the panel’s original ruling that the RFRA permits a private action for monetary damages. Judges Jacobs and Cabranes each issued a written dissent to the denial of the en banc review and joined the other, and Judge Sullivan joined both dissents.
Case Name: Orlando v. Nassau Cty. Dist. Atty’s Off.
In December 2004, a man named Bobby Calabrese was shot and found dead in Long Beach, New York. The following week, Nassau County police detectives interviewed Mark Orlando and Herva Jeannot, who officers believed had been with Calabrese that night. The two men were questioned in separate rooms at the police station. Jeannot confessed to shooting Calabrese and stated that Orlando had hired Jeannot to murder Calabrese in order to avoid paying a gambling debt to Calabrese. During his questioning, Orlando gave two different statements to the police–one before being told that Jeannot had incriminated him, and one after being so informed–but he consistently denied being involved in the murder. Orlando and Jeannot were later both charged with murder for their involvement in Calabrese’s death, and the two men were tried separately.
At Orlando’s trial, Detective McGinn testified for the prosecution and recounted Jeannot’s confession about Orlando’s involvement in the murder. Defendant’s counsel objected on hearsay and Confrontation Clause grounds, but the trial judge allowed the testimony, stating that the testimony was not being offered for the truth of the contents of the statement, but rather to give a clear picture to the jury of what was going on during the interrogation of Orlando. The trial court gave the jury a limiting instruction to use McGinn’s testimony only when considering the circumstances under which Orlando may have made statements and for no other purposes. The trial court also instructed the jury to completely disregard any statement allegedly made by Jeannot when considering evidence against Orlando. McGinn then resumed testifying and stated that after Orlando learned of Jeannot’s confession, Orlando changed his account of the events that night. The jury ultimately convicted Orlando of murder in the second degree, and Orlando was then sentenced to twenty-five years to life in prison. Jeannot was also convicted of the murder in a separate trial.
In 2009, Orlando appealed his conviction to the New York Supreme Court, Appellate Division. Orlando argued that Detective McGinn’s testimony as to Jeannot’s statement had been inadmissible hearsay and also violated Orlando’s Sixth Amendment right to confront witnesses through cross examination, since Jeannot did not testify at his trial. The Appellate Division rejected this argument and found that the trial court properly instructed the jury to use the testimony for the limited purpose of explaining the detective’s actions and their effect on Orlando, and not for the truth of Jeannot’s statement. The New York Court of Appeals denied Orlando’s leave to appeal.
Orlando then filed a pro se petition for writ of habeas corpus pursuant to 28 U.S.C. § 2254 in the United States District Court for the Eastern District of New York. The district court denied the petition, and Orlando appealed.

References: v. 
 § 626
 § 500
 v. 
 v. 
 v. 
 v. 
 § 548
 § 550
 v. 
 § 2254