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What are the rights of non-union employees working in a union shop? While they have to pay certain union dues, they can opt-out of the union spending their money on matters unrelated to collective bargaining. As a practical mater, this means the non-union member can object when the union wants to spend union dues on political activity. The constitutional basis for this rule is the right against coerced speech, i.e., the protection against forcing a public employee to subsidize political activity they don't like as a condition of their public employment.
These rules get more complicated when the courts are asked to examine the nuts and bolts of the procedures guiding the non-union employee's objections to spending union dues on political activity. In Seidemann v. Bowen, originally decided August 1 but amended on August 28, the Court of Appeals (Pooler, Sack and Hall) struck down the procedures for the employee to object to the union's political activities.
Against the backdrop of the general rule that the union's opt-out rules must be carefully tailored to minimize the risk of burdening the employee's First Amendment rights, the Second Circuit noted that the various Courts of Appeals are divided on whether the union can make the employee opt-out each year instead of simply making a rolling objection that applies year after year. The Second Circuit ruled that the yearly opt-out requirement is too burdensome for public employees, particularly since the union was unable to put forth any good objection to the annual objection. Since the courts around the country disagree on this issue, by the way, the Supreme Court take this (or a similar case) to iron out the rule once and for all.
But that's not all. The union also required that non-union employees specifically identify which of the union expenditures they object to. This means the employee had to tell the union what percentage of the union fees could not be spent in his name. This kind of particularized objection also violates the First Amendment, the Second Circuit held. That requirement is simply too burdensome, and it is enough for the employee to object to the union's general spending on political activity.
Finally, the plaintiff argued that the union was not providing fair notice of how union dues were being spent politically. The Court of Appeals sent this portion of the case back to the trial court to untangle factual disputes about what kind of notice the union was actually providing. The guiding principle governing this kind of disagreement is that while non-union employees are not entitled to receive all of the financial information union delegates may receive, they deserve adequate information about the basis for the proportionare share of union dues to make a proper objection to the political and ideological spending. This kind of dispute probably is made on a case-by-case basis.
Tuesday, August 28, 2007
Thursday, August 23, 2007
Exotic bird smuggling generates colorful language in Court of Appeals
It's been a slow week for civil rights decisions out of the Second Circuit, but here's a case of particular interest with a small civil rights angle. Thomas Cullen of upstate New York is a highly regarded rare bird expert who was convicted in 2006 for importing exotic birds into the United States in violation of the Wild Bird Conservation Act, among other things. This case offered the Court of Appeals an opportunity to untangle this unique law and feature once again the colorful opinion-writing of Judge Richard Cardamone.
As Judge Cardamone notes in United States v. Cullen, "Judicial opinions often characterize an odd provision fo the law or an ingenious argument of counsel as a 'rare bird' (rara avis). But in this case we have before us as the subject matter literally a rara avis in terris or a rare bird on the earth."
The case began when Cullen asked a friend who was living in Europe to import into the U.S. a Black Sparrowhawk. According to the decision in this case, the Sparrowhawk is quite unique in that this large and colorful bird only lives in Africa and eats mainly other birds. It also sometimes eats small mammals and snakes. It prefers to live in trees rather than fly. Cullen's friend submitted the application, but Cullen was to own the bird. The Wildlife Service Inspector at JFK Airport was skeptical when Cullen said he was picking up the birds for his friend who was still living in England, so the birds were placed in safekeeping, where one of the birds died. At trial, the jury found Cullen guilty of importing the birds in violation of the Wild Bird Act.
Among other arguments, Cullen said on appeal that the law was vague in that it does not sufficiently explain when an exotic bird qualifies as "a personally owned pet" and is therefore exempt from the Wild Bird Act. Cullen explained that he reasonably thought his actions fell within the personal pet exemption. The Court of Appeals disagreed.
It's tough to prevail on a "void for vagueness" argument in the context of criminal law. This defense has constitutional underpinnings under the Due Process Clause. The statute must be precise so that would-be offenders know whether their actions are illegal. Law enforcement also has to know when to invoke the law so they can arrest the alleged offender. As Judge Cardamone wrote, "Although we recognize in many English words there lurk uncertainties, to meet the fair warning prong an ounce of common sense is worth more than an 800-page dictionary."
Cullen did not prevail in the Second Circuit on the void-for-vagueness defense. The Court noted that the words "personal" and "pet" are comprehensible to the ordinary person. And here's the kicker: "An ordinary person would realize that an exception to the import ban for personally owned pets of repatriating Americans would not apply if a person living in the United States asked an American living abroad to pretend that birds being imported belonged to the person living abroad."
As Judge Cardamone notes in United States v. Cullen, "Judicial opinions often characterize an odd provision fo the law or an ingenious argument of counsel as a 'rare bird' (rara avis). But in this case we have before us as the subject matter literally a rara avis in terris or a rare bird on the earth."
The case began when Cullen asked a friend who was living in Europe to import into the U.S. a Black Sparrowhawk. According to the decision in this case, the Sparrowhawk is quite unique in that this large and colorful bird only lives in Africa and eats mainly other birds. It also sometimes eats small mammals and snakes. It prefers to live in trees rather than fly. Cullen's friend submitted the application, but Cullen was to own the bird. The Wildlife Service Inspector at JFK Airport was skeptical when Cullen said he was picking up the birds for his friend who was still living in England, so the birds were placed in safekeeping, where one of the birds died. At trial, the jury found Cullen guilty of importing the birds in violation of the Wild Bird Act.
Among other arguments, Cullen said on appeal that the law was vague in that it does not sufficiently explain when an exotic bird qualifies as "a personally owned pet" and is therefore exempt from the Wild Bird Act. Cullen explained that he reasonably thought his actions fell within the personal pet exemption. The Court of Appeals disagreed.
It's tough to prevail on a "void for vagueness" argument in the context of criminal law. This defense has constitutional underpinnings under the Due Process Clause. The statute must be precise so that would-be offenders know whether their actions are illegal. Law enforcement also has to know when to invoke the law so they can arrest the alleged offender. As Judge Cardamone wrote, "Although we recognize in many English words there lurk uncertainties, to meet the fair warning prong an ounce of common sense is worth more than an 800-page dictionary."
Cullen did not prevail in the Second Circuit on the void-for-vagueness defense. The Court noted that the words "personal" and "pet" are comprehensible to the ordinary person. And here's the kicker: "An ordinary person would realize that an exception to the import ban for personally owned pets of repatriating Americans would not apply if a person living in the United States asked an American living abroad to pretend that birds being imported belonged to the person living abroad."
Saturday, August 18, 2007
Circuit reinstates First Amendment retaliation case
Public employees have one advantage that private employees can only dream about: they cannot suffer adverse consequences from speaking out on matters of public concern. The First Amendment protects public employees from retaliation for engaging in constitutionally-protected activity. That entitlement won a public employee from Connecticut a jury trial in Dillon v. Morano, decided on August 16 by the Court of Appeals.
This was the case of two lawsuits. Dillon initially sued Bailey, the State's Chief Attorney, over retaliation for blowing the whistle on bad search warrant applications that law enforcement submitted to Federal judges. After a jury ruled in Dillon's favor in that suit, Bailey was replaced by Morano, who, according to Dillon, retaliated against Dillon for suing Bailey. Dillon's primary claim against Morano was that Morano failed to promote Dillon for the position of Chief Inspector for the Division of Criminal Justice. According to Dillon, Morano openly disparaged Dillon to others in the workplace for suing Bailey and blowing the whistle on the bad search warrants. Not only did Morano condemn the betrayal occasioned by Dillon's whistleblowing and lawsuit against Bailey, he gave inconsistent reasons for denying Dillon the promotion and violated office procedures in filling the Chief Inspector's position.
The district court granted summary judgment, dismissing Dillon's claim without a jury trial, concluding that even if the jury found that Morano denied Dillon the promotion in violation of the First Amendment, the jury would find that Morano would have made the same decision even without Dillon's lawsuit against Bailey. We call this the Mount Healthy defense, named after a 1977 Supreme Court ruling that allows defendants to avoid liability in First Amendment retaliation cases when the defendant would have made the same employment decision even without the First Amendment activity.
The Court of Appeals (Pooler, Straub and Vitaliano) reversed, holding that the jury could make two findings in Dillon's favor: first, the jury could agree that Dillon was denied the promotion based on his successful prior lawsuit in light of Morano's hostile comments about Dillon's protected activity and also because, among other things, Morano violated office procedure in making this adverse decision. From time to time, the Court of Appeals reminds us that departures from normal procedures in reaching adverse job decisions represent circumstantial evidence of retaliatory and discriminatory intent.
This decision is notable in the Circuit's finding that the jury has to decide whether the employer would have denied Dillon the promotion even without Dillion's protected activity under the First Amendment. As noted above, the Mount Healthy defense is something of a legal fiction in that, even if the plaintiff shows he lost a job benefit in violation of the First Amendment, he still loses if the employer would have made that same decision anyway. In this case, the Court of Appeals decided that the jury has to untangle these competing motives for the promotion denial because, while the jury could find that Morano would have made the decision even without the constitutionally-protected activity, it was not required to in light of the direct and circumstantial evidence favoring Dillon's position. Since Morano's credibility is at stake in respect to his motive for denying Dillon the promotion, a jury has to decide the case, not a court on a motion for summary judgment.
This was the case of two lawsuits. Dillon initially sued Bailey, the State's Chief Attorney, over retaliation for blowing the whistle on bad search warrant applications that law enforcement submitted to Federal judges. After a jury ruled in Dillon's favor in that suit, Bailey was replaced by Morano, who, according to Dillon, retaliated against Dillon for suing Bailey. Dillon's primary claim against Morano was that Morano failed to promote Dillon for the position of Chief Inspector for the Division of Criminal Justice. According to Dillon, Morano openly disparaged Dillon to others in the workplace for suing Bailey and blowing the whistle on the bad search warrants. Not only did Morano condemn the betrayal occasioned by Dillon's whistleblowing and lawsuit against Bailey, he gave inconsistent reasons for denying Dillon the promotion and violated office procedures in filling the Chief Inspector's position.
The district court granted summary judgment, dismissing Dillon's claim without a jury trial, concluding that even if the jury found that Morano denied Dillon the promotion in violation of the First Amendment, the jury would find that Morano would have made the same decision even without Dillon's lawsuit against Bailey. We call this the Mount Healthy defense, named after a 1977 Supreme Court ruling that allows defendants to avoid liability in First Amendment retaliation cases when the defendant would have made the same employment decision even without the First Amendment activity.
The Court of Appeals (Pooler, Straub and Vitaliano) reversed, holding that the jury could make two findings in Dillon's favor: first, the jury could agree that Dillon was denied the promotion based on his successful prior lawsuit in light of Morano's hostile comments about Dillon's protected activity and also because, among other things, Morano violated office procedure in making this adverse decision. From time to time, the Court of Appeals reminds us that departures from normal procedures in reaching adverse job decisions represent circumstantial evidence of retaliatory and discriminatory intent.
This decision is notable in the Circuit's finding that the jury has to decide whether the employer would have denied Dillon the promotion even without Dillion's protected activity under the First Amendment. As noted above, the Mount Healthy defense is something of a legal fiction in that, even if the plaintiff shows he lost a job benefit in violation of the First Amendment, he still loses if the employer would have made that same decision anyway. In this case, the Court of Appeals decided that the jury has to untangle these competing motives for the promotion denial because, while the jury could find that Morano would have made the decision even without the constitutionally-protected activity, it was not required to in light of the direct and circumstantial evidence favoring Dillon's position. Since Morano's credibility is at stake in respect to his motive for denying Dillon the promotion, a jury has to decide the case, not a court on a motion for summary judgment.
Tuesday, August 14, 2007
Sanctions against "human shield" upheld
In early 2003, as the United States was about to wage war with Iraq, Judith Karpova went to Iraq as a "human shield," among other reasons. She also wanted to bear witness to the economic sanctions imposed against Iraq and submitted journalistic articles to the Jersey Journal. The State Department found out about Karpova's trip and fined her $6,700 for violating the rules prohibiting U.S. citizens from engaging in certain interactions with Iraq. The Court of Appeals (Cardamone, Sotomayor and Katzmann) affirmed this fine in Karpova v. Snow, issued on August 14.
Karpova raised various challenges on appeal. First, she argued that the sanction violated the Administrative Procedure Act because the Penalty Notice issued to her was not clear and she was really being punished for acting as a journalist. But, while noting that the Penalty Notice was not a model of clarity in that it failed to explicitly set forth the basis for accusing Karpova of violating the regulations, it was not arbitrary and capricious for the government to believe that she had "engaged in transactions relating to travel in Iraq" in violation of the regulations, particularly since she admitted to the government that she was, in fact, traveling to Iraq. Her "journalistic exception" to the rules also failed as she admittedly went to Iraq to "defend Iraqi civilian infrastructure from bombing."
The most interesting claims were Karpova's constitutional challenges to the sanctions. She claimed protection under the First Amendment and the constitutional right to travel. But the Court of Appeals thought otherwise, finding that "weighty foreign policy" concerns overtake any right to travel to Iraq since the government in 1990 (when the sanctions were enacted) determined that Iraq posed a national security threat to the United States. Although I am certain that Karpova challenged that characterization of the Iraqi threat on appeal, the Second Circuit declined to comment. In addition, since the Constitution does not allow for unrestricted newsgathering, her First Amendment claim also failed as "Karpova was fined because of her actions in violating the travel restrictions, not for her speech." Moral of the story: challenges to U.S. foreign policy through litigation are difficult, if not impossible, to sustain.
Karpova raised various challenges on appeal. First, she argued that the sanction violated the Administrative Procedure Act because the Penalty Notice issued to her was not clear and she was really being punished for acting as a journalist. But, while noting that the Penalty Notice was not a model of clarity in that it failed to explicitly set forth the basis for accusing Karpova of violating the regulations, it was not arbitrary and capricious for the government to believe that she had "engaged in transactions relating to travel in Iraq" in violation of the regulations, particularly since she admitted to the government that she was, in fact, traveling to Iraq. Her "journalistic exception" to the rules also failed as she admittedly went to Iraq to "defend Iraqi civilian infrastructure from bombing."
The most interesting claims were Karpova's constitutional challenges to the sanctions. She claimed protection under the First Amendment and the constitutional right to travel. But the Court of Appeals thought otherwise, finding that "weighty foreign policy" concerns overtake any right to travel to Iraq since the government in 1990 (when the sanctions were enacted) determined that Iraq posed a national security threat to the United States. Although I am certain that Karpova challenged that characterization of the Iraqi threat on appeal, the Second Circuit declined to comment. In addition, since the Constitution does not allow for unrestricted newsgathering, her First Amendment claim also failed as "Karpova was fined because of her actions in violating the travel restrictions, not for her speech." Moral of the story: challenges to U.S. foreign policy through litigation are difficult, if not impossible, to sustain.
Sunday, August 12, 2007
Has the Second Circuit been misapplying qualified immunity all these years?
Government defendants receive a particular cushion when they are sued for constitutional violations under 42 U.S.C. 1983, the omnibus civil rights law that allows aggrieved citizens to recover damages for civil rights abuses, i.e., censorship in violation of the First Amendment or false arrest in violation of the Fourth Amendment. That cushion is "qualified immunity." This cushion is not merely academic; it can make the difference between victory for the plaintiff or the court throwing out the case without a jury ever hearing it.
This is because public officials accused of violating civil rights are entitled to immunity from the lawsuit if they can show certain facts or legal circumstances that would allow the court to give them the benefit of the doubt. We call it "qualified" immunity because that immunity is qualified, not absolute, like the absolute immunity that judges and prosecutors enjoy from lawsuits of any kind.
Anyone who handles civil rights cases for a living can recite by memory the standard governing qualified immunity. It goes something like this:
The above language breaks down the qualified immunity equation into two parts: the "clearly established" prong and the "officers of reasonable competence" prong. The "clearly established prong" is easy to explain: if the state of the law (as determined by existing precedent or past case law) was unclear at the time of the civil rights violation, then the defendant cannot be forced to pay out damages to the plaintiff. This means that a unique or esoteric civil rights case might be dismissed before trial because the case law at the time of the civil rights violation did not place the defendant on notice that his actions might have violated the law. It may be that 20/20 hindsight convinces the court that the defendant did in fact violate the First Amendment or the Fourth Amendment, but since the defendant cannot be expected to predict how a future court will interpret his actions in a unique case, the case will be dismissed. Fortunately for plaintiffs, qualified immunity will not apply even if case law was not directly on point, so long as the unlawfulness of the violation was apparant.
The other prong governing qualified immunity is the "good faith" element, shown if officers of reasonable competence could disagree on the unlawfulness of the challenged action or decision. What this means is that even if the state of the law was clear at the time of the violation, the defendant could still win the case if he acted in good faith and it was objectively reasonable for him to act as he did.
This second prong of the qualified immunity is a last gasp way to win qualified immunity. We have all cited this standard in our legal briefs and argued it in court. It never occured to us that this second prong might be incorrect and unnecessary and not actually endorsed by the U.S. Supreme Court. But it has occured to Judge Sonia Sotomayor of the Second Circuit Court of Appeals.
In a case decided on August 1 by the Second Circuit, Walczyk v. Rio, the Court of Appeals resolved a civil rights case against law enforcement officials who searched someone's house on a bad search warrant. One of the plaintiffs could not show the warrant was obtained without probable cause as he made threats to the police suggesting that he was about to commit violence. The other plaintiff won the right to jury trial because the police searched her house looking for her son who had not lived there for many years. The officers did not win qualified immunity for mom because the jury could find that they did not act in good faith in obtaining the warrant.
Judge Sotomayor concurred in the judgment, summarizing the state of qualified immunity law in the Second Circuit and suggesting that the Court of Appeals has been getting it wrong for years. She points out that while the Second Circuit articulates the qualified immunity test in two parts ("clearly established law" and "good faith" or "objective reasonableness"), the Supreme Court has not quite broken it down that way. While the Supreme Court has repeatedly endorsed determining if the state of law was sufficiently clear to place the defendant public official on notice that his actions were illegal, it has not -- contrary to widespread belief in the lower Federal courts -- given public officials a second bite from the qualified immunity apple in allowing them to avoid suit if their otherwise illegal actions were objectively reasonable at the time.
The objective reasonableness test flows from a Supreme Court ruling, Malley v. Briggs, 475 U.S. 335 (1986), which does use that language in describing the entitlement to qualified immunity. But as Judge Sotomayor points out, that language has not appeared in any of the Supreme Court's majority opinions since then. I did a quick check on Lexis, and Judge Sotomayor is right. The Supreme Court's most recent qualified immunity case, Hope v. Pelzer, 536 U.S. 730 (2002), does not cite that language, and the dissenting Justices chide the majority for that omission. The dissenters state:
The dissenters cited Malley for the final part of the above language. But that language in Malley may have been dicta, or musings from the Court with no legal significance. Assuming the majority in Hope v. Pelzer read the dissent before issuing their decision, we have to assume that they understood the dissenters' objections and ignored them because the dissenters did not accuarately describe the state of the law governing qualified immunity. Yet, the courts continue to cite it and apply it, occasionally dismissing lawsuits on the basis that, although the law was clear when the defendant violated the plaintiff's rights, officers of reasonable competence could have disagreed on whether the conduct was unlawful.
Judge Sotomayor summarizes her objection to the Second Circuit's qualified immunity analysis by suggesting that "departs from Supreme Court dictates and unjustifiably raises the bar to liability for violations of constitutional rights." For now, however, Judge Sotomayor is in the minority on this one. It is not unusual for the Federal Courts of Appeal to read more into the language of Supreme Court decisions than the Supreme Court intended. The Second Circuit's two-part qualified immunity analysis is the law in this Circuit. It will take a Supreme Court ruling to change that. Until now, I doubt anyone even noticed how far removed from Supreme Court precedent the Second (and other) Circuits were in applying qualified immunity.
This is because public officials accused of violating civil rights are entitled to immunity from the lawsuit if they can show certain facts or legal circumstances that would allow the court to give them the benefit of the doubt. We call it "qualified" immunity because that immunity is qualified, not absolute, like the absolute immunity that judges and prosecutors enjoy from lawsuits of any kind.
Anyone who handles civil rights cases for a living can recite by memory the standard governing qualified immunity. It goes something like this:
Defendants are entitled to qualified immunity unless their conduct violated clearly established statutory or constitutional rights of which a reasonable person would have known. If it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted, then qualified immunity does not apply. But if officers of reasonable competence could disagree on the issue, immunity should be recognized.
The above language breaks down the qualified immunity equation into two parts: the "clearly established" prong and the "officers of reasonable competence" prong. The "clearly established prong" is easy to explain: if the state of the law (as determined by existing precedent or past case law) was unclear at the time of the civil rights violation, then the defendant cannot be forced to pay out damages to the plaintiff. This means that a unique or esoteric civil rights case might be dismissed before trial because the case law at the time of the civil rights violation did not place the defendant on notice that his actions might have violated the law. It may be that 20/20 hindsight convinces the court that the defendant did in fact violate the First Amendment or the Fourth Amendment, but since the defendant cannot be expected to predict how a future court will interpret his actions in a unique case, the case will be dismissed. Fortunately for plaintiffs, qualified immunity will not apply even if case law was not directly on point, so long as the unlawfulness of the violation was apparant.
The other prong governing qualified immunity is the "good faith" element, shown if officers of reasonable competence could disagree on the unlawfulness of the challenged action or decision. What this means is that even if the state of the law was clear at the time of the violation, the defendant could still win the case if he acted in good faith and it was objectively reasonable for him to act as he did.
This second prong of the qualified immunity is a last gasp way to win qualified immunity. We have all cited this standard in our legal briefs and argued it in court. It never occured to us that this second prong might be incorrect and unnecessary and not actually endorsed by the U.S. Supreme Court. But it has occured to Judge Sonia Sotomayor of the Second Circuit Court of Appeals.
In a case decided on August 1 by the Second Circuit, Walczyk v. Rio, the Court of Appeals resolved a civil rights case against law enforcement officials who searched someone's house on a bad search warrant. One of the plaintiffs could not show the warrant was obtained without probable cause as he made threats to the police suggesting that he was about to commit violence. The other plaintiff won the right to jury trial because the police searched her house looking for her son who had not lived there for many years. The officers did not win qualified immunity for mom because the jury could find that they did not act in good faith in obtaining the warrant.
Judge Sotomayor concurred in the judgment, summarizing the state of qualified immunity law in the Second Circuit and suggesting that the Court of Appeals has been getting it wrong for years. She points out that while the Second Circuit articulates the qualified immunity test in two parts ("clearly established law" and "good faith" or "objective reasonableness"), the Supreme Court has not quite broken it down that way. While the Supreme Court has repeatedly endorsed determining if the state of law was sufficiently clear to place the defendant public official on notice that his actions were illegal, it has not -- contrary to widespread belief in the lower Federal courts -- given public officials a second bite from the qualified immunity apple in allowing them to avoid suit if their otherwise illegal actions were objectively reasonable at the time.
The objective reasonableness test flows from a Supreme Court ruling, Malley v. Briggs, 475 U.S. 335 (1986), which does use that language in describing the entitlement to qualified immunity. But as Judge Sotomayor points out, that language has not appeared in any of the Supreme Court's majority opinions since then. I did a quick check on Lexis, and Judge Sotomayor is right. The Supreme Court's most recent qualified immunity case, Hope v. Pelzer, 536 U.S. 730 (2002), does not cite that language, and the dissenting Justices chide the majority for that omission. The dissenters state:
The Court correctly states that respondents are entitled to qualified immunity unless their conduct violated "clearly established statutory or constitutional rights of which a reasonable person would have known." But the Court then fails either to discuss or to apply the following important principles. Qualified immunity protects "all but the plainly incompetent or those who knowingly violate the law." If "it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted," then qualified immunity does not apply. But if, on the other hand, "officers of reasonable competence could disagree on the issue, immunity should be recognized."
The dissenters cited Malley for the final part of the above language. But that language in Malley may have been dicta, or musings from the Court with no legal significance. Assuming the majority in Hope v. Pelzer read the dissent before issuing their decision, we have to assume that they understood the dissenters' objections and ignored them because the dissenters did not accuarately describe the state of the law governing qualified immunity. Yet, the courts continue to cite it and apply it, occasionally dismissing lawsuits on the basis that, although the law was clear when the defendant violated the plaintiff's rights, officers of reasonable competence could have disagreed on whether the conduct was unlawful.
Judge Sotomayor summarizes her objection to the Second Circuit's qualified immunity analysis by suggesting that "departs from Supreme Court dictates and unjustifiably raises the bar to liability for violations of constitutional rights." For now, however, Judge Sotomayor is in the minority on this one. It is not unusual for the Federal Courts of Appeal to read more into the language of Supreme Court decisions than the Supreme Court intended. The Second Circuit's two-part qualified immunity analysis is the law in this Circuit. It will take a Supreme Court ruling to change that. Until now, I doubt anyone even noticed how far removed from Supreme Court precedent the Second (and other) Circuits were in applying qualified immunity.
Tuesday, August 7, 2007
Citing near "perfect storm," Circuit vacates arbitration attorneys' fee award
Federal courts are loathe to overturn arbitration awards, but when the arbitrators blow it, the Court of Appeals will correct the errors if they result from corruption on the part of arbitrators or the arbitration award exhibits a "manifest disregard of the law." It was the manifest disregard which led the Second Circuit on August 7 to vacate an arbitration award. The case is Porzig v. Dresdner, Kleinwort.
When Porzig, an age discrimination plaintiff, won his arbitration, the arbitrators decided that the attorneys' fees should go to the plaintiff, and not the lawyer. When the Federal trial court sent the case back to the arbitrators, they made further modifications to the award without authority and ignored Porzig's accurate recitation of the law governing attorneys' fees. This was enough for the Court of Appeals to vacate the arbitration award and remand it to the arbitrators yet again for a new attorneys' fees award.
As noted, Federal courts don't like to interfere with arbitration awards. In citing the arbitrators' errors, the panel in Porzig (Hall, Calabresi and Parker) said, "Taken individually, in all likelihood, such circumstances would not have overcome the deference owed to the [arbitration] Panel's award. Taken together, however, these circumstances create, if not the perfect storm, then a disturbance ample enough to give us pause."
One of the errors committed by the arbitration panel was its interference with the plaintiff-attorney relationship. The arbitrators interpreted the retainer agreement to mean that the client receives the lawyer's attorneys' fees. But, according to the Court of Appeals, "The [arbitration] Panel here was plainly without jurisdiction to order Porzig's lawyer to pay back to his client the specified contingency fee." Further offending the Second Circuit was the arbitrators' failure to adequately explain its low attorneys' fee award which placed a cap on that entitlement. These caps are frowned upon, the Second Circuit noted, and that (among other reasons) was enough to send the case back to the trial court for further review. Accordingly, while the Federal courts don't like to interfere with arbitration awards, under the circumstances here, intervention was appropriate.
When Porzig, an age discrimination plaintiff, won his arbitration, the arbitrators decided that the attorneys' fees should go to the plaintiff, and not the lawyer. When the Federal trial court sent the case back to the arbitrators, they made further modifications to the award without authority and ignored Porzig's accurate recitation of the law governing attorneys' fees. This was enough for the Court of Appeals to vacate the arbitration award and remand it to the arbitrators yet again for a new attorneys' fees award.
As noted, Federal courts don't like to interfere with arbitration awards. In citing the arbitrators' errors, the panel in Porzig (Hall, Calabresi and Parker) said, "Taken individually, in all likelihood, such circumstances would not have overcome the deference owed to the [arbitration] Panel's award. Taken together, however, these circumstances create, if not the perfect storm, then a disturbance ample enough to give us pause."
One of the errors committed by the arbitration panel was its interference with the plaintiff-attorney relationship. The arbitrators interpreted the retainer agreement to mean that the client receives the lawyer's attorneys' fees. But, according to the Court of Appeals, "The [arbitration] Panel here was plainly without jurisdiction to order Porzig's lawyer to pay back to his client the specified contingency fee." Further offending the Second Circuit was the arbitrators' failure to adequately explain its low attorneys' fee award which placed a cap on that entitlement. These caps are frowned upon, the Second Circuit noted, and that (among other reasons) was enough to send the case back to the trial court for further review. Accordingly, while the Federal courts don't like to interfere with arbitration awards, under the circumstances here, intervention was appropriate.
Buyer's remorse not enough to vacate settlement
After age discrimination plaintiff Doreen Powell and her attorney agreed in open court on the terms of her settlement, she changed her mind and refused the sign the written agreement. She then filed a motion under Rule 60 to set aside the settlement and re-open the case. The district court said no, and the Court of Appeals (Winter, Walker and Sack) affirmed on August 7, 2007. The case is Powell v. Omnicom.
The Court of Appeals noted that not every settlement agreement has to be in writing; many are consummated in open court, where the parties unequivocally tell the judge that they agree with the terms of the agreement. Powell argued in this case that the open-court agreement was not enough and that she could revoke it by refusing to sign the written agreement. The Court explained:
Under the totality of the circumstances, the Second Circuit held, Powell could not get around the in-court settlement agreement, and the settlement stands even though she did not sign the written agreement in protest of certain terms. The Court had no difficulty in finding that the first three factors were met as no one at the in-court settlement conference said they wanted a written agreement, and there was partial performance of the agreement in that the defendant had already drafted a letter of reference for plaintiff. What gave the Court of Appeals pause was whether "this agreement is the kind that would normally be reduced to writing."
Second Circuit precedents include a few cases holding that settlements involving future promises by the defendant should be in writing. This includes cases where the settlement is paid out over time or the parties agree that the former employer will handle future requests for employee references in a certain way. Powell v. Omicom resembled those cases, but the Circuit distinguished them because, this time around, "the terms of this this agreement were announced on the record and assented to by the plaintiff in open court."
One final twist here was Powell's reliance on the Older Worker's Benefit Protection Act, which gives age discrimination plaintiffs 21 days to walk away from a settlement agreement. The Court of Appeals observed that that law does not apply to cases that were already filed in court, like Powell's case. It only applies when the parties resolve their claim prior to any lawsuit. For cases filed in court, the question is whether the plaintiff had a "reasonable" period of time to consider the settlement. The Second Circuit said "yes" to that question, as Powell -- a sophisticated business woman -- "had nearly two years between her termination and settlement negotiations to give considered thought to how she wished to resolve this dispute." Although the Older Worker's Benefit Protection Act aims to prevent employees from settling their cases under the shock of termination, Powell was not under time-pressure to settle.
The Court of Appeals noted that not every settlement agreement has to be in writing; many are consummated in open court, where the parties unequivocally tell the judge that they agree with the terms of the agreement. Powell argued in this case that the open-court agreement was not enough and that she could revoke it by refusing to sign the written agreement. The Court explained:
Deciding whether the parties intended to be bound in the absence of a writing requires us to consider (1) whether there has been an express reservation of the right not to be bound in the absence of a writing; (2) whether there has been partial performance of the contract; (3) whether all of the terms of the alleged contract have been agreed upon; and (4) whether the agreement at issue is the type of contract that is usually committed to writing.
Under the totality of the circumstances, the Second Circuit held, Powell could not get around the in-court settlement agreement, and the settlement stands even though she did not sign the written agreement in protest of certain terms. The Court had no difficulty in finding that the first three factors were met as no one at the in-court settlement conference said they wanted a written agreement, and there was partial performance of the agreement in that the defendant had already drafted a letter of reference for plaintiff. What gave the Court of Appeals pause was whether "this agreement is the kind that would normally be reduced to writing."
Second Circuit precedents include a few cases holding that settlements involving future promises by the defendant should be in writing. This includes cases where the settlement is paid out over time or the parties agree that the former employer will handle future requests for employee references in a certain way. Powell v. Omicom resembled those cases, but the Circuit distinguished them because, this time around, "the terms of this this agreement were announced on the record and assented to by the plaintiff in open court."
One final twist here was Powell's reliance on the Older Worker's Benefit Protection Act, which gives age discrimination plaintiffs 21 days to walk away from a settlement agreement. The Court of Appeals observed that that law does not apply to cases that were already filed in court, like Powell's case. It only applies when the parties resolve their claim prior to any lawsuit. For cases filed in court, the question is whether the plaintiff had a "reasonable" period of time to consider the settlement. The Second Circuit said "yes" to that question, as Powell -- a sophisticated business woman -- "had nearly two years between her termination and settlement negotiations to give considered thought to how she wished to resolve this dispute." Although the Older Worker's Benefit Protection Act aims to prevent employees from settling their cases under the shock of termination, Powell was not under time-pressure to settle.
Wednesday, August 1, 2007
Labor unions cannot waive right to jury trial in discrimination cases
Arbitration clauses can be the bane of a plaintiff lawyer's existance. The plaintiff is ready to go to court before she discovers that all discrimination claims against the employer will be decided by an arbitrator, not court, where a jury can hear the claims and presumably award higher damages. This usually happens when the plaintiff's employment agreement says that any claims will go to arbitration. But what happens when the collective bargaining agreement negotiated by a labor union contains a mandatory arbitration clause?
The Second Circuit Court of Appeals resolved this dilemma on August 1, 2007. In Pyett v. Pennsylvania Building Co., three plaintiffs tried to bring their discrimination claims to Federal court even though the union contract contained a mandatory arbitration clause. What result?
The Court of Appeals (Cabranes, Raggi and Korman) noted two lines of Supreme Court cases on the subject of mandatory arbitration. While individual employment agreements can require plaintiffs to arbitrate their claims, union contracts cannot waive the plaintiff's right to litigate her claims in court. In other words, the union cannot, through the collective bargaining agreement, waive the right to a jury trial, even though the union presumably represents the employee in contract negotiations. So the Court of Appeals agreed with the trial court in holding that the union contract in this case could not prevent the plaintiffs from proceeding in Federal court.
The Court of Appeals actually resolved this issue seven years ago in Rogers v. New York University, 220 F.3d 73 (2000), finding that the collective bargaining agreement cannot waive the right to a jury trial. Rogers cited Supreme Court authority (Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)) which held as such. But the employer in the case decided yesterday argued that the Supreme Court had actually overruled Alexander in Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998). While I'm sure the Second Circuit appreciates this kind of advocacy, the Court of Appeals did not take the bait, holding that Alexander has always been good law. So the plaintiffs' age discrimination claims in Pyett v. Pennsylvania Building Co. head to Federal court, not arbitration.
The Second Circuit Court of Appeals resolved this dilemma on August 1, 2007. In Pyett v. Pennsylvania Building Co., three plaintiffs tried to bring their discrimination claims to Federal court even though the union contract contained a mandatory arbitration clause. What result?
The Court of Appeals (Cabranes, Raggi and Korman) noted two lines of Supreme Court cases on the subject of mandatory arbitration. While individual employment agreements can require plaintiffs to arbitrate their claims, union contracts cannot waive the plaintiff's right to litigate her claims in court. In other words, the union cannot, through the collective bargaining agreement, waive the right to a jury trial, even though the union presumably represents the employee in contract negotiations. So the Court of Appeals agreed with the trial court in holding that the union contract in this case could not prevent the plaintiffs from proceeding in Federal court.
The Court of Appeals actually resolved this issue seven years ago in Rogers v. New York University, 220 F.3d 73 (2000), finding that the collective bargaining agreement cannot waive the right to a jury trial. Rogers cited Supreme Court authority (Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974)) which held as such. But the employer in the case decided yesterday argued that the Supreme Court had actually overruled Alexander in Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998). While I'm sure the Second Circuit appreciates this kind of advocacy, the Court of Appeals did not take the bait, holding that Alexander has always been good law. So the plaintiffs' age discrimination claims in Pyett v. Pennsylvania Building Co. head to Federal court, not arbitration.
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