Psychic scam found guilty of mail fraud

The Court of Appeals has sustained the criminal conviction against someone who made a fortune promoting fake psychic services. The opinion provides interesting detail into how these scams operate, noting the shocking amount of money this service generated.

The case is United States v. Runner, issued on July 9. The defendant's organization, Direct Marketing Services (DMS) sent letters to people promising they might receive a financial windfall. You would have to complete a questionnaire to qualify. By this point, DMC would start charging you money. The Court of Appeals (Calabresi, Chin and Merriam) writes:

customers who answered got dozens of different mailings offering a fantastical array of supernatural goods and psychic services.  These ranged from mystical ceremonies, to ancient crystals, and to charms that guaranteed good luck. Each item cost around $45. These offerings, the mailings assured, would alleviate the customer’s suffering—whether it was financial hardship, romance troubles, or familial strife. But these were all lies. There was no psychic who had read the customers’ letters (or cashed their checks). It was Patrice Runner and his business, Direct Marketing Concepts (“DMC”)—the mass-mailing enterprise he had founded in Montreal, Canada—that did all that. Duval had sent nothing, though she was, in fact, a real person who lived in France and had a reputation as a psychic. DMC did have a licensing agreement with Duval that permitted DMC to use her name and likeness, but she was not actually involved in any of the mailings.  So, for about two decades, DMC mailed around one-hundred different promotions to hundreds of thousands of people throughout the United States and Canada.

Over the course of 20 years, DMC earned more than $150 million. That, ladies and gentlemen, is an awful lot of money. My guess is that the judges on this case, highly educated intellectuals, cannot believe a scheme like this earned this kind of money.

 For more details on how these scams work, read the opinion. The marketers are very good are convincing people. Eventually, the government got wind of this. They charged defendant with wire fraud. The jury convicted defendant and the Second Circuit affirms, holding that defendant used these letters to induce customers into transactions that would cost them money through fraudulent tactics. A recent Supreme Court decision, Kousisis v. United States, 145 S. Ct. 1382 (2025), informs this analysis.

 

Pro se discrimination plaintiff wins trial against management law firm

This employment discrimination case went to trial in the Southern District of New York. No surprise there. The jury ruled in the plaintiff's favor on the retaliation case, awarding him $50,000 in compensatory damages. Again, no surprise. What makes this case remarkable is that the plaintiff represented himself pro se against an experienced law firm. He persuaded the jury that his former employer had retaliated against him in violation of Title VII. Still, he appealed from the verdict that denied him disparate treatment claim. The Court of Appeals affirms that portion of the discrimination case.

The case is Sanderson v. Leg Apparel, LLC, a summary order issued on July 8. So the retaliation verdict stands, but the discrimination verdict -- in management's favor -- also stands. Plaintiff represented himself on appeal, as well. His arguments on appeal focused on evidentiary issues. Lawyers know that trial courts have broad discretion in ruling on evidentiary matters at trial. The thinking is that the trial judges know the case better than the appellate judges, who only know the matter from a cold record. The trial judge has lived with the case for a few years. We don't see too many verdicts overturned based on evidentiary rulings.

Before we get to this, the summary judgment ruling in the case indicates plaintiff claimed his former employer made derogatory comments about his perceived sexual orientation and his coworkers made negative comments about Black people. Plaintiff alleges he was given a heavy workload because of his race. He suffered retaliation after he complained about a supervisor's discriminatory comments. These issues proceeded to trial. As I noted, the jury ruled in plaintiff's favor on the retaliation claim, and post-trial, the judge awarded plaintiff economic damages in the amount of $24,327.77. Notably, the trial court tolled plaintiff's back pay entitlement after a period of time because plaintiff found work at a different employer but was terminated from that position for cause. That termination, the trial judge finds, means that plaintiff did not properly mitigate his back pay damages. 

One issue is that the trial court excluded certain medical evidence that plaintiff thought would help his case. It was not clear to the Court of Appeals why this evidentiary ruling made a difference at trial, and the Court notes that it will not "manufacture" an argument for plaintiff on this issue. That evidentiary ruling is affirmed. The other issue was the trial court's restriction on plaintiff's cross-examinations at trial. You can imagine what a pro se cross-examination must look like when his adverse witnesses are on the stand. The Second Circuit notes that the cross was messy, requiring the trial judge to frequently interrupt to keep things on track, as some of the examinations "were often interspersed with lengthy soliloquies or took the form of plaintiff's testimony and arguments. The trial court was just trying to keep order, the Court of Appeals says, another matter wholly within the trial court's discretion.

Can you videotape inside a police facility?

The plaintiff in this case sued the City of New York, challenging its policy against video-recording in police facilities, including stationhouse lobbies. He posts his interactions with the police on YouTube, but these videos have gotten him arrested. He claims these arrests violate the First Amendment. This case has reached the Second Circuit, which has determined the State Court of Appeals has to resolve whether New York State and City statutes allow people to make these video recordings. The State Court of Appeals will have to issue a definitive ruling.

The case is Reyes v. City of New York, issued on June 18. The trial court said plaintiff was likely to win this case, entering an injunction in his favor. That ruling is now on hold while New York's highest court sorts out this issue. 

While an NYPD policy says people can film police activity, that right does not extend to the interior of police facilities. But state and city laws, which also allow non-arrestees to record police activity, do not speak to whether you can record video inside a police facility. But the city stood firm on its policy that video recording is prohibited in these facilities. Plaintiff tested the NYPD policy because he had heard the police were arresting people for videotaping in police facility lobbies. He got arrested for doing this, but the charge was dismissed. Still, an arrest is enough for a First Amendment lawsuit.

Since state and city law do not address the issue raised in the NYPD policy. However, since the Second Circuit (Raggi, Kearse and Kahn) cannot predict how the State Court of Appeals would resolve this issue, the Second Circuit sends this case to the State Court of Appeals to take up this issue in the first instance. We call that "certification." The Second Circuit says, "If those laws are properly construed to codify a right to record law enforcement activity  wherever it occurs and whomever it involves . . . that would presumably supersede any common law property or privacy rights that the City or persons might claim to limit recording at odds with these enacted laws." But if the state and city laws at issue in this case are construed more narrowly, affording a right to record law enforcement only on public streets or within publicly accessible premises, or subject to time, place and manner limits under the First Amendment, then the NYPD's policy may be enforced. 

Since this case involves an important area of state law, and the Second Circuit does not like to intrude on state prerogatives without some guidance from the New York Court of Appeals, which is presumably more familiar with state laws and legal principles, the latter court will have to take on this issue. Once it does so, the case returns the Second Circuit to finally resolve the appeal. This will take more than a year, as the parties will have file new briefs in the state Court of Appeals and then have oral argument on the issue, so plaintiff will have to wait quite a while for final resolution.

Doctor loses equal pay claim at trial

This case was a huge win for the plaintiff on her discrimination claim, as the Court of Appeals reinstated the verdict in her favor after the trial court determined there was not enough evidence to show that her employer, NYU Langone Health System, had discriminated against her on the basis of gender. But the Court of Appeals also finds that plaintiff did not have enough evidence to win her equal pay claim.

The case is Edelman v. NYU Langone Health System, issued on June 18. Equal pay claims under federal law are difficult to prove: you have to show that a male worker earned more money, and that both of you performed work requiring equal skill, effort and responsibility, and that the jobs were performed under similar working conditions. The state law equal pay claim, for purposes of this case, has the same elements. Plaintiff said that Dr. Modi, a male rheumatologist, earned more money than she did. The Court of Appeals finds the jury had a basis to reject this claim, even if it did find that the hospital had discriminated against her in other ways. It looks like the jury split the baby.

First, a procedural issue: at trial, plaintiff did not move for judgment as a matter of law on this claim. Since she seeks JMOL now, therefore, she can only get around this waiver by showing the verdict was a manifest injustice, a burdensome proof standard. She cannot meet that test because, even if Dr. Modi were subject to the same working conditions, the record allowed the jury to find that they did not perform equal work as defined by federal and state law.

Why did the Court of Appeals (Merriam, Robinson and Walker) rule against plaintiff on this issue? Because (1) Dr. Modi had two more years' experience than plaintiff, and he had also demonstrated leadership skills, having previously served as Chief Rheumatologist for a multi-specialty group of 500 physicians, where he supervised six rheumatologists, (2) he had also previously served as a medical director, where he supervised 15 doctors and 12 other medical professionals; plaintiff did not have this experience, (3) Dr. Modi and plaintiff had different production targets, and Dr. Modi saw more patients per week than plaintiff did.

This evidentiary record shows that the verdict against plaintiff on her equal pay claim was not a manifest injustice. It sounds like plaintiff would have lost the appeal on this issue even without waiving any JMOL motion during trial, as the evidence, as least as described by the Court of Appeals seems like plaintiff and Dr. Modi had different professional backgrounds and work experiences at NYU Langone.

Qualified immunity denied where police tried to frame someone for attempted murder

The Court of Appeals holds that a plaintiff alleging that police officers in Nassau County had futzed around with the rules and procedures to frame him for attempted murder, resulting in plaintiff spending nearly a decade in prison until he was exonerated when new evidence pointed to a different suspect. While the officers claimed entitlement to qualified immunity, the Court holds that the jury may find the officers did not act in good faith and that clearly established case law had already held that misconduct like this can violate the Constitution.

The case is Galloway v. County of Nassau, issued on June 26. The Second Circuit deals with plaintiff's claim that the officers denied him a fair trial. Fair trial claims may be brought in this jurisdiction if the officers make an arrest on the basis of false or fraudulent information. Plaintiff asserts that the officers (1) coerced witnesses to falsely implicate plaintiff's role in the crime, and (2) prepared a suggestive photo lineup that made it more likely the crime victims and witnesses would implicate the plaintiff. One way the police played around with the photo array, the Court of Appeals says, is by sitting plaintiff on two phone books to make him look taller, since the crime victim (a taxi driver who was shot in the face) identified a man who was much taller than plaintiff. Plaintiff also asserted Brady violations, where the police fail to turn over evidence that might exonerate him.

Qualified immunity attaches when prior case law is not sufficiently on point and the police were therefore not on notice that their misconduct would violate the Constitution. So, even if the police did wrong, if prior cases did not clearly hold as such, they are immune from suit. Many good cases disappear due to this immunity, but this case survives because the Court of Appeals (Jacobs, Chin and Menashi) holds that the right to due process protects us from suggestive police identification procedures that create a substantial risk of mis-identification.One case was Jenkins v. City of New York, 478 F.3d 76 (2d Cir. 2007). Another case holding that Brady violations are actionable under Section 1983 is Walker v. City of New York, 974 F.2d 293 (2d Cir. 1992).

The way to repel a motion for qualified immunity is to find a good case in your jurisdiction that will convince the court that your case is sufficiently similar to a prior case that the police were on constructive notice that they were violation clearly established law. The puzzle is how factually similar the prior case was to your case. There is no hard-and-fast formula for this. It often depends on the identify of the judge whether the case will fail under qualified immunity or proceed to trial. This case will proceed to trial, as the Second Circuit finds that, by 2008, when all of this happened, the officers' misconduct was sufficiently illegal to get around the immunity claim. Prior cases were close enough to this one that plaintiff was able to avoid qualified immunity.

Judge Menashi, in partial dissent, says two of the officers should get qualified immunity because existing precedent in 2008 had not "placed . . . beyond debate the statutory or constitutional question of whether police may use phone books, hats, and sheets to obscure a suspect's short height and braided hair from a witness who they know believes the perpetrator is tall and short-haired." The majority disagrees with the dissent on this point, stating that "it is (and was) clearly established that identification methods bearing a likelihood of mis-identification of the accused violates due process, no matter their form -- just as procedures without such a likelihood do not." The majority adds, "it is immaterial whether appearance is disguised by phone books, or by cigar boxes, or by pillows, or by hats, sheets, eyelashes, mustaches or pimples. With enough artifice and disguise, almost anybody may end up fingered."

The majority's rebuttal to the dissent conveys a tone of impatience. Note that the majority opinion was written by Judge Jacobs, who for many years was among the most conservative judges on the Court of Appeals. The dissent was written by Judge Menashi, one of several conservative judges appointed by the Court by the current president. Conservative judges are more likely to grant qualified immunity, in my experiences, but not always. There are conservatives, and there are conservatives. You can see that play out in this opinion.

Disability discrimination plaintiff can win under City Human Rights Law but not federal law

The Court of Appeals has held that a disability discrimination plaintiff may proceed against her former employer under the New York City Human Rights Law, even if she cannot prevail under federal law. This case reminds us that, since the City HRL relaxes the plaintiff's liability burden, cases may win under that statute even if they fail under the more stringent Americans with Disabilities Act.

The case is Parker v. Israel Discount Bank, issued on June 27. I represented the plaintiff on appeal. Plaintiff was a computer security specialist who suffered a hand injury and requested a workplace accommodation. She was terminated from her position shortly thereafter. Defendant claimed she was fired for performance deficiencies. Plaintiff disputed those allegations and pointed to the questionable sequence of events leading up to her termination. The district court granted summary judgment for the bank on plaintiff's claims brought under federal, state and city law. Parker then appealed.

Here is where things got interesting. In its first ruling in this case, affirming summary judgment on the federal claim, the Court of Appeals held that plaintiff cannot prevail under the ADA. But the Court also vacated summary judgment on the claims brought under the State and City Human Rights Laws, ruling that the trial court abused its discretion in retaining jurisdiction over the state and city claims after it dismissed the federal claim. Recall that the supplemental jurisdiction statute, 28 U.S.C. 1367 directs federal courts to remand the dangling state and city claims if the federal claim is dismissed, though trial courts have some authority to retain those claims as well. In vacating summary judgment on the state and city claims, the Second Circuit did not rule that plaintiff may prevail under these statutes; it merely said these cases can only be reviewed by a state court now that the federal claim is gone. The most likely scenario would be that, upon remand to state court, the bank would file a motion to dismiss on the basis that the same analysis that led to dismissal of the federal claim would compel dismissal of the state and city claims. That is not a rock-solid argument, as the city law claim in particular operates under a different legal framework, but arguments like that are commonplace when the city law claim is kicked over to state court after a federal judge dismisses the federal claim.

Since it did not want State Supreme Court to review this claim on the merits on remand, the bank next moved for reargument, claiming there was no abuse of discretion in retaining (and then dismissing) the state and city law claims since plaintiff did not even make that argument on appeal and, in any event, the same evidence that compelled dismissal of the federal claim would justify dismissing the state and city claims. In opposition the the bank's motion, we argued that case law supports the position that the district court abused its discretion in retaining and then dismissing the state and city claims after it dismissed the ADA claim, as the state and city claims are better suited for State Supreme Court, since they carry different standards of proof for the plaintiff. We also argued that plaintiff can prevail in State Supreme Court under the state and city laws, as they have a more lenient burden of proof in discrimination cases.

The Court of Appeals (Calabresi, Kahn and Carney) resolved the motion for re-argument by doing something unexpected: it did not re-examine its initial finding that the trial court abused its discretion in exercising subject matter jurisdiction over the state and city claims. Instead, the Second Circuit resolved the state and city claims on the merits, reviving the city law claim completely and remanding it for trial. Defendant's motion for reargument backfired.

The Court first held the state law claim was properly dismissed, as it follows the same evidentiary burden as the federal claim, since plaintiff was fired before the new and improved State HRL was enacted in 2019. (I argued that some state law claims predating the 2019 amendments still advocated the "motivating factor" and not the "but for" causation test, but the Second Circuit probably thought those cases were outliers and that the "but for" test was the real test pre-2019). So the state law claim is gone for good.

But the Court of Appeals also held that the district court improperly dismissed the city law claim because, under the more pro-plaintiff standards guiding the City HRL, plaintiff has enough evidence to prevail at trial. The key principle guiding this holding is that "a plaintiff can defeat summary judgment merely by 'produc[ing] some evidence to suggest that at least one reason is false, misleading, or incomplete.'” The cite for that is Cadet-Legros v. N.Y.U. Hosp. Ctr., 21 N.Y.S.3d 221, 226 (1st Dept. 2015). Federal law does not recognize this principle. As the Second Circuit sees it, pre-2019 state law claims did not recognize that principle, either. The Court holds that plaintiff has presented a "triable issue as to whether IDB’s reasons for terminating her were 'incomplete' and whether discrimination was 'one of a number of mixed motives' for her termination." The city law claim is revived and will go to trial.

The Second Circuit, in other words, used the motion for reargument (filed by defendant) to rule in plaintiff's favor on the merits. While the Court did not specify why it said plaintiff can prevail at trial on the City HRL, I believe it was plaintiff's testimony that, when she requested a reasonable accommodation, her supervisor "became angry and threatened me that I was not going to survive" at the bank. That admission highlights an improper motive to fire the plaintiff because she requested a reasonable accommodation.

Supreme Court says excessive force victim cannot sue federal jailers under the Constitution

The Supreme Court has ruled that an inmate in federal custody cannot assert an excessive force claim against his jailers because federal law does not recognize a damages claim for cases like this.

The case is Goldey v. Fields, issued very quietly on June 30, a few days after the Court issued its headline decisions this term. In you sue state or local officials for excessive force, you can do so under Section 1983, the civil rights act that provides for an assortment of damages. But if you sue federal officers for a civil rights violation, there is no Section 1983. Rather, you bring a Bivens action, named after a Supreme Court case from 1971 that identified such claims in limited circumstances. 

Here's the problem: the Court has authorized such cases in a handful of cases, such as employment discrimination and certain police misconduct cases. Each time the Supreme Court gets another Bivens case, it shoots it down. In this case, the Court notes, after permitting only three such cases to proceed from 1971 through the late 1970s, "After 1980, we have declined more than 10 times to extend Bivens to cover other constitutional violations. Those many post-1980 Bivens 'cases have made clear that, in all but the most unusual circumstances, prescribing a cause of action is a job for Congress, not the courts.'”

In this case, the Fourth Circuit said plaintiff could sue prison officials at a federal facility for excessive force. But that ruling collides with the Supreme Court's test for these cases:

To determine whether a Bivens claim may proceed, the Court has applied a two-step test. First, the Court asks whether the case presents “a new Bivens context”—that is, whether the case “is different in a meaningful way” from the cases in which this Court has recognized a Bivens remedy.  

Second, if so, we then ask whether there are “special fac- tors” indicating that “the Judiciary is at least arguably less equipped than Congress to ‘weigh the costs and benefits of allowing a damages action to proceed.’” That analysis is anchored in “separation-of-powers principles.”

The Supreme Court has never recognized a claim like this under Bivens. While Congress has legislated in the area of prisoner litigation, it has never passed a law providing for money damages in excessive force claims. "In addition, extending Bivens to allow an Eighth Amendment claim for excessive force could have negative systemic consequences for prison officials and the 'inordinately difficult undertaking' of running a prison." And, there is another way, beyond a civil rights lawsuit, for aggrieved federal prisoners to recover a remedy, though the Court does not identify such a remedy here. The Court is probably referring to an internal grievance process which may in theory validate the inmate's complaint but will not allow him to recover any damages.

This analysis convinces the Court, even without briefing or oral argument, that the plaintiff cannot litigate this case in court. It is up to Congress to deal with excessive force in federal prisons. I seriously doubt the current Congress will pass any such law. While you may be outraged that the Court has disposed of this case in summary fashion, note that the three liberal Justices have signed onto it without dissent. That's how difficult it is these days to litigate a Bivens claim