Court of Appeals revives Fair Housing Act claim

This housing discrimination case alleges that a senior citizens' mobile home community discriminated against an elderly couple by denying them a chance to live there because of their disabled son. The district court dismissed the claims mid-trial, but the Court of Appeals reinstates them and says the plaintiffs have a claim under the Fair Housing Act.

The case is Olsen v. Stark Homes, decided on July 18. After the Olsens told the housing community that their 42 year-old clinically depressed son had to live with them, their application to live there was denied. When a non-profit housing organization sent in "testers" to see if younger "applicants" or those without disabled children were allowed to live there, some of these applicants were apparently given the green light. When the case went to trial, after a few days, the district court dismissed the case and discharged the jury, ruling that there was no evidence that the son's disability was the reason why his parents were denied the housing opportunity. The Court of Appeals (Kearse, Jacobs and Parker) disagrees and reinstates the case for a new trial.

The district court said there was no evidence that the son's disability was the reason why the parents were denied the right to live there. In doing so, the court violated a basic principle governing motions to dismiss: it must view the evidence in the light most favorably to the plaintiff in determining whether the plaintiff has a case. For you non-lawyers, the theory behind this is that the jury may also view the evidence favorably to the plaintiff and disregard the defendant's evidence. Only by taking the plaintiff's side of story as true can the trial court determine whether the plaintiff has a chance to win the case. If in doubt, let the case go to the jury. This does not mean the plaintiffs will win the case. It only means they can win the case.

Here, the son's psychologist sent the housing community a letter that said the son was disabled. Defendants argued that the letter does not allow the jury to infer unlawful intent to discriminate, but the jury could draw different conclusions about defendants' motives from the content of the letter. As the Court of Appeals writes "there was ample evidence that the letter was provided in response to a concern expressed by Stark (the housing guy) as to whether, if Donald Jr. lived at Glenwood with his parents, he would be able, in light of his disability to get along on his own for short periods of time if they were not there."

The jury could draw other inferences favorable to plaintiff, including that (1) the parents were approved to live there without the son and that (2) Stark told the mother that he "didn't need any trouble in this park like that," and that "trouble like that" referred to the son's emotional illness. And, a tester was allowed to live there with a younger sister who was not disabled.

The reasonable accommodation claim under the Fair Housing Act was also improperly thrown out. Yes, the son was not 55 years old. But that is not why defendants sought dismissal of the accommodation claim. They argued instead that the son was not disabled and there was no evidence that defendants knew the son could not live without his parents. But the evidence permits contrary inferences: that the son suffered from major depression and that defendants knew that he had to live with his parents.

When the Court of Appeals reinstates a claim that was dismissed during trial (or that the district court rejects despite a plaintiff's verdict), the Second Circuit provides a good summary of the legal standards governing judgment as a matter of law under Rule 50. This case is no different. What the Court is saying is that close cases go to the jury. If the district court jumps the gun, particularly mid-trial, it runs the risk of setting up a re-trial.

Plaintiff alleges Title VII national origin discrimination claim

The Court of Appeals does not often reinstate discrimination complaints following dismissal in the district court, but it does so in this race and national origin discrimination case brought against a Japanese company that operated a subsidiary in Rockland County.

The case is Brown v. Daikin America, decided on June 27. Plaintiff worked for the Rockland entity. His workgroup consisted of six employees, three of them white Americans. The rest were Jamanese citizens of Japanese national origin. The Japanese employees had previously worked for the Japanese parent but wound up in the U S of A under a rotational assignment program that would last several years. During a reduction in force, plaintiff and another white American were fired. The other white American was transferred out. The three Japanese citizens remained employed in the Rockland group. In all, seven Americans lost their jobs in the RIF, but no Japanese employees were fired.

The question here is whether plaintiff makes out a prima facie case, which requires an allegation that he was fired under circumstances creating an inference of discrimination. "Defendants argue that Brown’s allegations do not support an inference of discrimination because the Japanese rotational employees at Daikin America were not 'similarly situated' to Brown and the other American employees. Therefore, defendants argue, the companies had no duty to consider the Japanese employees for termination as part of the workforce reduction, and Brown has not provided a basis for inferring that his termination was discriminatory." But that's not how the Court of Appeals (Carney, Lohier and Lynch) sees it.

Brown is "similarly situated" or comparable to the Japanese employees. They shared a common employer, the entity in Japan. All were subject to the same workplace standards in that he and two Japanese workers reported to the same supervisor."Drawing all reasonable inferences in Brown’s favor, as we must, both Brown and the Japanese employees in the Group are plausibly alleged to be subject to the same performance evaluation and disciplinary standards, and therefore similarly situated in their employment circumstances."

If you follow Iqbal-related developments, the Court's further reasoning will interest you. Under Iqbal, the Supreme Court said in 2009 that plaintiffs must allege plausible and not merely possible liability. This seemingly subtle change in legal standards under Rule 12 has doomed many cases. Defendant here argues that plaintiff does not allege a plausible case because there were other plausible non-discriminatory reasons for plaintiff's termination.Not so, the Court of Appeals:

That there may be other explanations for the defendants’ employment decisions does not render Brown’s allegations of discrimination inadequate as a matter of law. Whether there existed non-pretextual, non-discriminatory explanations for the defendants’ employment decisions — a question as to which the defendants bear the burden of production — is not properly decided on a motion to dismiss for failure to state a claim.

Serving two masters under Title VII

The old saying is that you can't serve two masters. But you can. Under Title VII, you can sue your immediate employer as well as another entity that also controls your employment. They are both on the hook for an unlawful employment practice if the entities are a "single integrated enterprise."

The case is Brown v. Daiken America, decided on June 27. Brown worked for Daiken America, which makes chemical products and is headquartered in Rockland County. Daiken is a wholly-owned subsidiary of Daiken Industries (DIL), a Japanese corporation. Claiming that defendants fired him because he is a white American, plaintiff sues both entities under Title VII. The district court said plaintiff cannot do this because the complaint does not sufficiently allege that the Japanese entity exercised sufficient control over the Rockland County workplace. The Court of Appeals (Carney, Lohier and Lynch) disagrees.

Here's the law on this: "[a] parent and subsidiary cannot be found to represent a single, integrated enterprise in the absence of evidence of (1) interrelation of operations, (2) centralized control of labor relations, (3) common management, and (4) common ownership or financial control. Although no one factor is determinative . . . control of labor relations is the central concern." "The central question is what entity made the final decisions regarding employment matters related to the person claiming discrimination?"

Brown can sue the Japanese entity along with the Rockland County one because the Complaint adequately alleges centralized control over labor relations. The Court reasons:\

Here, Brown alleged that DIL "closely directed the operations of its wholly owned subsidiary, Daikin America" and that DIL’s approval‚ was required as to all significant actions by Daikin America." Compl. ¶ 5. Brown charged that DIL"immuniz[ed]" Japanese rotational employees from discharge by directing Daikin America to discharge only employees who were not Japanese, id. ¶ 39, and by prohibiting Daikin America from reassigning or discharging Japanese rotational employees, id. ¶ 25. Taken together, these allegations sufficiently suggest that DIL exercised centralized control over Daikin America’s decisions about which employees to terminate in the course of the workforce reduction, and that DIL, by protecting Japanese employees from discharge, effectively ensured that employees of other races or national origins, like Brown, would be terminated.

While Brown does not allege that DIL  participated in the decision to hire him or expressly directed that plaintiff be fired, and while he does not allege common management between the two entities, "at this early stage in the litigation, the control that Brown alleged DIL to have exercised over Daikin America's employment actions ... is adequate to sustain the action against DIL."

Under the First Amendment, the fox cannot watch the hen house

A Town Justice ran for re-election. At the same time, she was appointed the Democratic Party's Election Commissioner, which required her to regulate local elections by reviewing petitions, approve ballots and determine which voters can vote by absentee ballot. Do you see the problem here? The Town did. To deal with this kind of conflict of interest, the Town had previously passed a law that prohibits elected officials who are running for re-election from working in the Board of Elections. The ultimate decision to prevent the Justice from working for the Board during the campaign is legal under the First Amendment.

The case is Castine v. Zurlo, decided on June 23. Your first instinct is that the Town violated the Free Speech clause because plaintiff is being punished for running for office. That's true, but there is more to it. Under the Supreme Court's 1968 decision in Pickering v. Board of Education, the government can discipline and even punish public employees if their protected speech or activity would disrupt efficient government operations, and that potential for disruption outweighs the value of the plaintiff's speech. An example of this was a 2006 case where the Court of Appeals said the NYPD could discipline police officers who engaged in racist off-duty speech that could impair the performance of their duties (since the public has no confidence in racist police officers).

This case is not as dramatic as the racist cops case, but the plaintiff still loses. The Court of Appeals (Leval, Jacobs and Pooler) says, "first, it was reasonable for Defendants to expect that Castine’s candidacy for elective office would create a conflict of interest with her position as Election Commissioner and that it would impair the integrity of Clinton County elections to permit Castine to occupy those two roles simultaneously. Second, it is clear that Defendants temporarily suspended Castine in order to advance the permissible objective of enforcing local law and minimizing the potential damage to the integrity of local elections. Third, the Defendants’ interest in avoiding disruption to the work of the Election Commission outweighs Castine’s interest in running for public elective office while simultaneously serving as Election Commissioner."

In light of this evidence, the County Legislature did what it had to do. The Court explains:

The Clinton County legislature reasonably concluded that the Board’s ability to supervise elections fairly, as well as the public perception of its fairness in performing that function, would be impaired if the persons involved in exercising the supervisory responsibility were themselves candidates in the elections they were supervising. This would present an unacceptable conflict of interest. The legislature therefore enacted the law disqualifying candidates for elective office from simultaneous employment in the Board of Elections. At least the appearance of fairness, and in all likelihood the fact as well, would have been substantially impaired if a candidate for election were to participate in the functions of the Board of Elections supervising that election. The act of the Defendants in removing Castine from her position as Commissioner for the duration of her campaign for elective office reasonably gave effect to this altogether reasonable provision of law. Although without doubt the enforcement of the law caused some curtailment of Castine’s exercise of her First Amendment rights, the Pickering test authorizes such a result.

2d Amendment claim fails under qualified immunity

Qualified immunity is a daily problem for plaintiffs' lawyers. It means the case gets dismissed even if the case technically has merit. A government official is immune from suit if the state of the case law was unclear at the time of the offense. That kills off a case involving Second Amendment rights.

The case is Burgess v. Town of Wallingford, a summary order decided on June 12. Second Amendment jurisprudence was dormant for decades before the NRA and other interest groups argued that it confers an individual right to own and carry a gun (for decades, courts assumed the Second Amendment only governed collective militias). In 2008, a 5-4 Supreme Court majority accepted this theory, ruling that the right to bear arms is a civil right and not a collective right.

Plaintiff was arrested for disorderly conduct. He was carrying his firearm openly, outside the home. It may be, under current Second Amendment law, that the arrest was wrong and the local criminal criminal court had no choice but to dismiss the charges. But that does not mean plaintiff can sue the police officers for the arrest. Again, qualified immunity. When this all happened, the scope of plaintiff's rights under the Second Amendment were not clear. Here is how the Court of Appeals (Parker, Livingston and Droney) sums it up:

In District of Columbia v. Heller, the Supreme Court held that the Second Amendment conferred an individual right to keep and bear arms for self-defense sufficient to invalidate a law that prohibited keeping firearms in one’s home. But as the Court also said, the right protected by the Second Amendment “is not unlimited.” Even at present, we are unsure of the scope of that right. See Kachalsky v. Cnty. of Westchester, 701 F.3d 81, 89 (2d Cir. 2012) (“[W]e do not know . . . the scope of [the Second Amendment] right beyond the home and the standards for determining when and how the right can be regulated by a government. This vast ‘terra incognita’ has troubled courts since Heller was decided.”). Thus, the protection that Burgess claims he deserves under the Second Amendment – the right to carry a firearm openly outside the home – is not clearly established law. And as of Burgess’s arrest on May 16, 2010, this right was even less concrete, as the Supreme Court had not yet held that the Second Amendment right in Heller applies to state governments; it did so shortly thereafter in McDonald v. City of Chicago, 561 U.S. 742 (2010). Given this legal ambiguity, Defendants-Appellants were entitled to qualified immunity.

This does not mean that Second Amendment violations will forever be immune from damages. Once the law becomes clearly-established (and maybe it is by now), then police officers can be sued for violating that right if the plaintiff proves a high-noon example of that rights violation. For plaintiff in this case, though, he cannot maintain this lawsuit.

17 year-old excessive force victim wins case against the police

This plaintiff convinced a jury that the police used excessive force in arresting him, awarding him $50,000 in damages. The City appeals, arguing that the verdict makes no sense because the jury also found that plaintiff struggled with the officer when he was punched and that the officer did not subject plaintiff to state-law assault. The Court of Appeals rejects these arguments and affirms the verdict.

The case is O'Hara v. City of New York, a summary order decided on June 18. Excessive force cases are hard to win. Jurors like the police. Face it, society has to like the police. We have to believe that the police are there to protect us. It takes a lot for the jury to rule against law enforcement.

The Court of Appeals (Raggi, Lynch and Lohier) says the verdict is consistent with the jury's findings that plaintiff struggled with the officer. As the City appeals from a verdict, the Court must accept plaintiff's side of the story, that "in effectuating O'Hara's arrest for a relatively minor matter, McAvoy -- who was one of six armed officers on the scene -- punched O'Hara in the face without provocation and then proceeded to punch him repeatedly after the 17 year old fell to the ground." That sounds like excessive force. The fact that the jury did not find the officer liable for assault does not change things. Assault involves the fear of harm, like when someone is coming at you with a knife or a fist. The Court says, "insofar as the alleged attack occurred without provocation, a jury could have reasonably found both that McAvoy intentionally or recklessly used excessive force against O'Hara, without also finding that O'Hara was placed in imminent fear of harm." 

The City also argues that since the jury found that O'Hara struggled with the police, the force had to be reasonable as a matter of law. True, these cases are harder to win when the plaintiff struggled with the police, since law enforcement is allowed to use force to effectuate an arrest. But this fact-specific inquiry is really a question for the jury. Plaintiff testified that he was struggling to avoid the officer's punches. Since the jury presumably credited that testimony, there is no inherent inconsistency in the verdict.

No FLSA salary for public agency volunteer

The Fair Labor Standards Act is the reason you get paid for your work every day. But not everyone gets paid. Volunteers are not covered under FLSA. In this case, the plaintiff did work for the New York City Board of Education but was not paid for it. He loses in the Court of Appeals.

The case is Brown v. New York City Board of Education, decided on June 18. Brown was given a "volunteer internship," which he fulfilled for three years. In this capacity, he mentored students five days a week on a full time schedule. During this time, he was turned down for paid positions at the school. In this lawsuit, he claims the defendant failed to pay him a salary in violation of FLSA. The Court of Appeals (Raggi, Pooler and Wesley) holds that Brown was a public agency volunteer and thus falls outside FLSA's salary protections.

The question whether someone is a public agency volunteer is a matter of law, the Court of Appeals says. The jury does not get to decide this. The Court of Appeals surveys this heavily-regulated area of labor law, noting that while FLSA has narrow exceptions to the pay requirements, Congress did  not want to discourage volunteer work for "civic, charitable or humanitarian purposes." Brown handled humanitarian work at the school. The Court of Appeals rejects his argument that the volunteer exemption kicks in only when humanitarian work is the sole reason for the humanitarian work. Quoting from the great Benjamin Cardozo, the Second Circuit philosophically notes that "human actions are frequently informed by multiple reasons." "Thus, a person may provide a public agency with free services for genuine civic, charitable or humanitarian reasons, at the same time that he acts for a variety of personal reasons, e.g., to secure community approbation, to make amends for unrelated wrongs, to fill idle time, to meet new people, or -- as in Brown's case -- to improve one's resume."

Finally, Brown argues that he was promised but denied compensation for his work. The regulations preclude the "promise, expectation or receipt of compensation for services rendered." Brown was not really promised any salary. He was told that the school would search the budget to make payment possible. Although he worked 40 hours per week, Brown also did not reasonably expect any payment. "Few people voluntarily work such long hours for so extensive a period without expecting compensation." And while Brown received some cash and benefits (subway fair, lunches) along the way, under the "economic realities" test, this does not mean he was entitled to regular pay. Again, Brown was a volunteer as a matter of law, and the school did him a favor in bringing him aboard for the work experience, albeit as a volunteer, and these were nominal "payments."