Friday, April 21, 2017

Yeah, it's legal

The police entered the apartment building with the owner's consent in order to keep the common areas free from drugs and crime. They found the defendant drinking alcohol on the third floor, so they decided to give him a summons for violating New York's open containers law, which prohibits alcoholic beverages in any "public place." The officer frisked defendant and found an illegal firearm. Should the courts suppress the firearm as the fruit of an unlawful search?

The case is United States v. Diaz, decided on April 18. There are two issues here: did the officer have probable cause to search Diaz? And was the warrantless search illegal if the officer did not intend to arrest defendant when he began the search? The Court of Appeals (Sack, Walker and Chim) upholds the search.

Issue number 1 asks if the officer had probable cause to arrest defendant for violating the open container law. This is tricky because the apartment building stairwell is arguably not a public place under the New York City penal code, which defines public place as "a place to which the public or a substantial group of persons has access, including, but not limited to, any highway, street, road, sidewalk, parking area, shopping area, place of amusement, playground, park or beach located within the city." Since the law says nothing about locked residential buildings or common areas, did the officer reasonably believe it was a public place under the law? The Court of Appeals says Yes. The Supreme Court said a few years ago (Heien v. North Carolina) that the police are able to arrest someone based on their reasonable misunderstanding of the law that authorized the arrest. Judge Sack says the City law is ambiguous and the courts have not yet clarified its scope. Some trial courts in New York have interpreted the City law to include apartment building lobbies. For these reasons, the officer acted reasonably under Supreme Court authority, even if the City law did not expressly authorize this search.

Issue number 2 asks whether the police can legally search someone if, at the time of the search, he did not intend to arrest the defendant, and makes the arrest after he finds something illegal, in this case, a gun. The Second Circuit took up this issue in 1977, ruling that a search was legal because the officer had probable cause to arrest the defendant for speeding, regardless of whether or nor the officer intended to arrest the defendant before finding drugs in the car. 1977 was a long time ago, but cases from 1977 can still be good law. While the defendant argues that the 1977 precedent has been repudiated by subsequent precedent, the Second Circuit is not buying it. This arrest was legal.  

Thursday, April 20, 2017

Misplaced chair no basis for prisoners' rights suit

I sometimes wonder what federal judges think of the weaker cases that come before them. This is such a case. The plaintiff is an inmate who "alleged that the prison employee violated his Eighth
Amendment rights by failing to remove a chair from a baseball field. Cintron later ran into the
chair during a game and broke his arm." The Court of Appeals says plaintiff has no case.

The case is Cintron v. Doldo, a summary order decided on April 19. Inmates are allowed to file their own lawsuits. They do have constitutional rights, and without those protections, just imagine what the jails would look like. But if an inmate files too many frivolous suits, the courts can require him to seek pre-filing clearing before bringing another action. Even if the cases are quite weak, someone representing the government still has to do the work, and the courts have to review the matter, taking time away from other cases.

This plaintiff sues under the Eighth Amendment, which prohibits cruel and inhumane jail punishments. The courts have interpreted the Eighth Amendment to cover conditions of confinements inside the jail. Usually, these cases involve bad medical treatment or abusive prison guards. The legal standard is this: "a court should assess whether society considers the risk that the prisoner complains of to be so grave that it violates contemporary standards of decency to expose anyone unwillingly to such a risk.”

The Second Circuit (Katzmann, Jacobs and Leval) says there is no case here. "The placement of the chair on the baseball field did not constitute a 'deprivation . . . sufficiently serious that [Cintron] was denied the minimal civilized measure of life’s necessities,' nor did treatment by prison staff member Mattraw 'deprive [Cintron] of his basic human needs.'” Nor did plaintiff allege that prison staff acted with deliberate indifference.

Wednesday, April 19, 2017

2d Circuit declines to hold that Title VII prohbits sexual orientation discrimination

The Second Circuit has once again declined to rule that Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of sexual orientation, ruling that it cannot overrule a Second Circuit ruling from 2000 that said "sex discrimination" does not extend to gays and lesbians.

The case is Zarda v. Altitude Express, decided on April 18. I helped write the brief with lead counsel, Gregory Antollino, who argued the appeal. Zarda was a skydiver who was fired after a customer complained that he told her about his sexual orientation. A straight skydiver was not terminated after telling a customer about his own sexual orientation. The case went to trial in federal on a state-law discrimination claim after the district court ruled that plaintiff could not seek any relief under Title VII. The jury returned a defense verdict and plaintiff appealed the trial court's Title VII ruling, arguing that the EEOC's recent directive that Title VII prohibits sexual orientation discrimination renders the Second Circuit's decision in Simonton v. Runyon, 232 F.3d 33 (2d Cir. 2000), obsolete.

A few weeks ago, the Second Circuit took up this issue, holding in Christianson v. Omnicom that one Second Circuit panel cannot overrule the decision of a prior panel. Two judges in Christianson issued a concurrence stating the time may be right to bring the Court of Appeals into the modern age and recognize that sexual orientation is in fact sex discrimination. Citing Christianson, the Zarda Court says it cannot overturn Simonton. The Second Circuit is essentially inviting Zarda to seek en banc review on this issue. Astute Title VII aficionados know that the Seventh Circuit recently overruled a prior decision in ruling en banc that Title VII prohibits sexual orientation discrimination. Will the Second Circuit do the same?

An interesting side note. The plaintiff in Zarda lost his sexual orientation claim at trial under state law. Defendant argued that Zarda cannot win his Title VII appeal because the jury has already said there was no discrimination. Zarda got around this by pointing out that the jury charge on the state law claim asked whether Zarda could prove "but for" causation. That is not the standard under Title VII, which asks whether the plaintiff's protected characteristic -- gender, race, etc. -- was a motivating factor in his termination. "Motivating factor" is a more plaintiff-friendly standard than "but-for" causation, so Zarda's Title VII challenge is not mooted by the adverse state-law verdict in federal court.

Monday, April 17, 2017

Supremes rule for plaintiff in Fourth Amendment seizure case

The plaintiff in this case was pulled over for a traffic stop when the police found a bottle in his car containing pills. The police claimed it was drugs, but tests proved otherwise. Still, plaintiff spent 48 days in pretrial detention. He sues for false arrest. The case was dismissed as untimely. It was also dismissed because the court said you can't challenge your pretrial detention under the Fourth Amendment . The Supreme Court finds otherwise and rules in his favor.

The case is Manuel v. City of Joliet, decided by the Supreme Court on March 21. This constitutional case actually looks at our nation's founding document in the most technical manner possible. We start with the Fourth Amendment's protection against "unreasonable seizures." Is that 48-day detention a seizure? If it is, then Manuel can sue.

Writing for the Court, Justice Kagan notes that the Supreme Court said four decades ago that a claim challenging pretrial detention falls within the scope of the Fourth Amendment. Subsequent Supreme Court cases say that pretrial detention can violate the Fourth Amendment not only when it precedes but when it follows the start of legal process in the criminal case. Manuel's criminal case had already started he spent all that time in the slammer. Here is where the technicality comes in. Manuel has a case under the Fourth Amendment and not -- as the Seventh Circuit held -- under the Due Process Clause. Here is the analysis:

Pretrial detention can violate the Fourth Amendment not only when it precedes, but also when it follows, the start of legal process in a criminal case. The Fourth Amendment prohibits government officials from detaining a person in the absence of probable cause. That can happen when the police hold someone without any reason before the formal onset of a criminal proceeding. But it also can occur when legal process itself goes wrong—when,for example, a judge’s probable-cause determination is predicated solely on a police officer’s false statements. Then, too, a person is confined without constitutionally adequate justification. Legal process has gone forward,but it has done nothing to satisfy the Fourth Amendment’s probable-cause requirement. And for that reason, it cannot extinguish the detainee’s Fourth Amendment claim—or somehow, as the Seventh Circuit has held, convert that claim into one founded on the Due Process Clause. If the complaint is that a form of legal process resulted in pretrial detention unsupported by probable cause, then the right allegedly infringed lies in the Fourth Amendment.
In other words, it was an unlawful seizure even after the criminal process began because there was no probable cause to detain Manuel. As Justice Kagan writes, "Legal process did not expunge Manuel’s Fourth Amendment claim because the process he received failed to establish what that Amendment makes essential for pretrial detention—probable cause to believe he committed a crime."

The remaining question involves the statute of limitations. The Supreme Court does not take up that issue, instead sending it back for the Seventh Circuit to worry about it. The Supreme Court does summarize the different points of view on this issue. If we treat Manuel's seizure like a malicious prosecution case, then his lawsuit is timely because the statute of limitations would begin on the day the charges were dismissed. But if we treat Manuel's case like a false arrest, then the statute of limitations began the day he was arrested, and this case is untimely.

Sunday, April 16, 2017

Circuit finds black-car drivers are not employees under the FLSA

A huge number of "black-car drivers" bring this Fair Labor Standards Act case against corporate entities that either own a "base license" that allows them to operate a black-car dispatch base in New York City or provide administrative support for the operation of the franchisor's dispatch bases. In other words, the drivers -- who operate a type of for-hire vehicles that provide ground transportation for people -- sue the defendants for unpaid wages. The issue here: did the defendants employ the plaintiffs under the FLSA and state law? The Court of Appeals says the defendants are not employers.

The case is Saleem v. Corporate Transportation Group, decided on April 12. Only employers are liable under the FLSA. If the plaintiffs are independent contractors, they cannot sue for lost wages under the Act. The plaintiffs' black-car franchises are affiliated with defendants, some of whom provide administrative support for the operations. The plaintiffs mostly purchased their franchises from the franchisor defendants, and the franchise agreement has a non-compete clause that prevents them from driving CTG customers without processing payment through CTG. But these agreements do not prevent the drivers from transporting non-CTG customers. While the franchise agreements come with a rule book governing standards of conduct, plaintiffs still enjoyed considerable autonomy in their day-to-day affairs, such as deciding when and how often to drive, where they worked and to accept or decline jobs that were offered. The drivers could also work for other entities.

This back-and forth with respect to driver autonomy and defendant control over them lies at the heart of this case. An employer under state and federal law is able to control the plaintiff. Without sufficient control over the plaintiff, the defendant is not an employer and the plaintiff is merely an independent contractor who cannot invoke the FLSA and state law wage protections. This is a totality of the circumstances test, and the facts are typically quite involved, so much that these decisions can be lengthy and complicated, as reflected in the 14 month time period the Court of Appeals (Livingston, Leval and Carney) took to issue this decision. The Court finds that plaintiffs were independent contractors.

Despite the broad sweep of the FLSA’s definition of “employee,” the record here does not permit the conclusion that Plaintiffs were employees, but instead establishes that they were in business for themselves. As discussed below, Plaintiffs independently determined (1) the manner and extent of their affiliation with CTG; (2) whether to work exclusively for CTG accounts or provide rides for CTG’s rivals’ clients and/or develop business of their own; (3) the degree to which they would invest in their driving businesses; and (4) when, where, and how regularly to provide rides for CTG clients. While none of these facts is determinative on its own, considered as a whole with the goal of discerning the underlying economic reality of the relationship here, the district court correctly determined that Plaintiffs are, as a matter of law, “properly classified as independent contractors rather than employees for purposes of the FLSA.” 

Wednesday, April 12, 2017

Are Rule 68 offers covered by Cheeks v. Pancake House?

Normally, parties settle lawsuits in private and tell the judge the case is over. The judge then "so orders" a stipulation of discontinuance, someone writes a check and we all move on with our lives. That does not apply to cases brought under the Fair Labor Standards Act. In 2015, the Second Circuit held that courts must approve FLSA settlements "to avoid the “potential for abuse,” including “highly restrictive confidentiality provisions in strong tension with the remedial purposes of the FLSA,” “overbroad release[s],” excessive attorney’s fee awards, and inadequate awards. Does this apply to settlements reached under Rule 68?

The case is Yu v. Hasaki Rest., Inc., No. 16-CV-6094 (JMF), 2017 U.S. Dist. LEXIS 54597 (S.D.N.Y. Apr. 10, 2017), a SDNY case decided on April 10. Under Rule 68, the defendant serves an Offer of Judgment on the plaintiff. That offer would pay the plaintiff a sum of money. The plaintiff has a limited time to accept that offer. If the plaintiff rejects the offer and wins less money at trial, then plaintiff has to pay the defendant's post-offer costs. Plaintiff also forfeits attorneys' fees incurred after the offer was sent. In return, the plaintiff gets money and a judgment against defendant.

In this case, Judge Furman holds that Rule 68 settlements are subject to the requirements set forth by the Second Circuit in Cheeks v. Freeport Pancake House, 796 F.3d 199, 200 (2d Cir. 2015), which says the courts must approve FLSA settlements. The judge writes:

In the wake of Cheeks, litigants have increasingly tried to evade the requirement for judicial or DOL approval by entering into settlements pursuant to Rule 68. These litigants have argued — as the parties do in this case — that approval is not required for such settlements because Rule 68 provides that “[t]he clerk must . . . enter judgment” of an accepted offer of judgment and lacks any language comparable to Rule 41’s “applicable federal statute” exception that figured prominently in Cheeks. Fed. R. Civ. P. 68.
Some courts in the Second Circuit say that Rule 68 settlements are not covered by Cheeks. Judge Furman sees it differently. While the judge notes that the clerk "must" enter judgment for the plaintiff upon accepting a Rule 68 offer, allowing parties to avoid Cheeks oversight makes no sense. He writes:

But that foundation — namely, that Rule 68 is, by its terms, mandatory and leaves no room for judicial scrutiny of an accepted offer — crumbles under closer scrutiny. That is, although it is sometimes said that a court “has no choice about entering” a Rule 68 judgment, “this general statement is too broad to encompass all instances in which Rule 68 offers are made.” 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 3005 (2d ed. 1996)). Indeed, as one judge on the Eleventh Circuit observed, “[t]here are myriad settings in which a court has an independent duty . . . to review the terms of a settlement offer; Rule 68’s operation does not relieve the court of that duty.” Util. Automation 2000, Inc. v. Choctawhatchee Elec. Co-op., Inc., 298 F.3d 1238, 1250-51 (11th Cir. 2002) (Marcus, C.J., specially concurring). “[I]n the context of class actions,” for example, “Rule 68 offers of judgment are routinely employed despite the fact that all agreements must subsequently be approved by the court after a fairness hearing.” Gordon v. Gouline, 81 F.3d 235, 239 (D.C. Cir. 1996) (citing cases). And as the D.C. Circuit has held, in bankruptcy cases, Rule 68 does not override the requirement that compromises or settlements must be approved by the court. See id. at 239-40. In fact, there are a host of situations in which parties may not, without approval of either or both a government agency and a court, enter into a settlement.
For now, there is a split in the Second Circuit on this issue. The Court of Appeals will no doubt straighten this out some day. Until that happens, each Rule 68 settlement under the FLSA will be handled differently from judge to judge.

Monday, April 10, 2017

New York's credit card surcharge law implicates First Amendment

This is not the most exciting First Amendment case I've ever seen, but a First Amendment case it is. The Supreme Court says that

The case is Expressions Hair Design v. Schneiderman, decided on March 29. We examine credit card pricing in this case. New York makes it illegal for merchants to charge more money if customers want to use a credit card. The credit card companies charge a fee for the use of the cards, so merchants want to encourage customers to use cash. The plaintiffs are merchants who want to impose credit card surcharges. They also want to tell customers that it's not the merchant's fault that they have to raise prices to cover these surcharges. Hence, this First Amendment case.

The Second Circuit ruled against the plaintiffs, finding that this law does not restrict speech and that it instead merely regulates conduct in the form of price controls. The Supreme Court disagrees. The law regulates First Amendment speech because it tells merchants how they can communicate their prices. Chief Justice Roberts writes:

The law tells merchants nothing about the amount they are allowed to collect from a cash or credit card payer. Sellers are free to charge $10 for cash and $9.70, $10, $10.30, or any other amount for credit. What the law does regulate is how sellers may communicate their prices. A merchant who wants to charge $10 for cash and $10.30 for credit may not convey that price any way he pleases. He is not free to say “$10,with a 3% credit card surcharge” or “$10, plus $0.30 for credit” because both of those displays identify a single sticker price—$10—that is less than the amount credit card users will be charged. Instead, if the merchant wishes to post a single sticker price, he must display $10.30 as his sticker price. Accordingly, while we agree with the Court of Appeals that §518 regulates a relationship between a sticker price and the price charged to credit card users, we cannot accept its conclusion that §518 is nothing more than a mine-run price regulation. In regulating the communication of prices rather than prices themselves, §518 regulates speech.
The Court does not decide whether this law is constitutional. Now that the Court has found that the law regulates speech, the case is sent back to the Second Circuit to decide if the law is a valid speech regulation or whether it can be upheld as a valid disclosure requirement. The only direction for the Second Circuit is to treat this law as a speech regulation and decide whether it violates the First Amendment.