Disability discrimination case fails after 2d Circuit examines what is a "disability"

This case asks the Court of Appeals to find that plaintiffs may challenge a school district's special education program that places too many students into non‐credit bearing courses intended for students at risk of not meeting state performance standards. They sue under the Americans with Disabilities Act and Section 504 of the Rehabilitation Act, claiming the program has an unlawful disparate impact on disabled students. The Second Circuit says they do not have a case.

The case is BC v. Mt. Vernon School District, decided on September 16. This case alleges that this class was offered to children with a “disability” under the Individuals with Disabilities Education Act
(“IDEA”) at a greater rate than to children without such a disability. Since they sue under the ADA and Rehabilitation Act (the Federal disability statutes), the question is whether they are disabled under these laws. Although IDEA students are classified as having a disability, the question for the Court of Appeals is whether they are protected under the Federal disability statutes. The problem is that the IDEA and Federal disability statutes define "disability" differently. So the Court of Appeals (Livingston, Walker and Jacobs) has to resolve this issue of first impression:

Whether an individual with a “disability” under the IDEA categorically qualifies as an individual with a “disability” under the ADA and Section 504, such that Plaintiffs’ data relating to “child[ren] with a disability” under the IDEA can establish a prima facie case with respect to a claim predicated on the plaintiff having a “disability” under the ADA and Section 504.

Issues of first impression mean the Court of Appeals writes on a clean slate. So the Court starts from scratch. What does the IDEA say about "disability"? And how does the ADA and Rehabilitation Act define "disability"? The statutes are different. "The ADA and Section 504 define the term 'disability' differently than the IDEA does. The ADA defines 'disability' as a 'physical or mental impairment that substantially limits one or more major life activities. Section 504 expressly incorporates, with certain qualifications not applicable here, the ADA’s definition. By contrast, under the IDEA, a 'child with a disability' has one or more of an enumerated list of impairments requiring 'special education or related services.'” As the Federal disability laws define "disability" differently than the IDEA, the Court of Appeals says,

These are distinct legal standards. Although both define “disability” by reference to the effects of an individual’s impairment, the statutes provide for different inquiries. The ADA asks whether an impairment “substantially limits” a major life activity, while the IDEA trains on whether an impairment necessitates “special education and related services.” Thus, a child might “need[] special education and related services” by reason of an impairment, id., even if that impairment does not “substantially limit[] . . . [a] major life activit[y]. Although many, if not most, IDEA‐eligible individuals may “also [be] handicapped under [the ADA],” we agree with the Tenth Circuit that Plaintiffs’ approach reads the ADA’s substantial limitation requirement, which we have consistently enforced, out of that statute, The ADA defines “major life activities” as, inter alia, “learning, reading, concentrating, thinking, communicating, and working.”

You get the picture. "Disability" carries different definitions under different federal laws. What it means for this case is that "an IDEA disability is not equivalent to a disability as cognizable under the ADA and Section 504. Plaintiffs, therefore, cannot rely solely on 'receipt of special education' to establish an ADA or Section 504 disability. Those seeking relief pursuant to ADA or Section 504 must come forward with 'additional evidence' — beyond simply their eligibility for IDEA coverage — showing their eligibility for the remedies afforded by the ADA and Section 504." Since "the record is devoid of any evidence as to whether the students included in the data qualify as disabled under the ADA or Section 504," this disparate impact case fails because an IDEA disability does not necessarily mean "disability"under the Federal disability statutes.

Establishment Clause claim stymied by standing objections

I have said it before and I'll say it again. Constitutional "standing" principles can rip the fun out of a lawsuit. We see that again in this case that alleges a Rockland County school district was allegedly in violation of the Establishment Clause over its relationship with Hasidic Jews.

The case is Montesa v. Schwartz, decided on September 12.Seemingly a zillion taxpayers in Ramapo are suing the school district, alleging that a majority of the school board have promoted the Hasidic faith by funding Hasidic schools with public money by manipulating the settlement process governing claims involving disabled students (who are protected under the Individuals with Disabilities in Education Act) and other shifty maneuvers such as the sale and lease of two school buildings and buying religious books with public money.

The Constitution places limits on when you can bring a lawsuit. You have to show a personal stake in the outcome of the case. I can't sue the town I live in just because I don't like how it spends taxpayer money. But I can sue the town if it passes a zoning law that affects how I control my property. There are some exceptions to these standing rules, including ones carved out by the courts allowing people to sue the government under the Establishment Clause, which demands the separation of church and state. The reason for that exception is that Establishment Clause injuries are particularly elusive, and if we make it too hard to being lawsuits under the Clause, then the government will get away with promoting religion simply because the questionable rules will affect everyone, precisely the standing circumstance that prevents everyone from suing.

Under the "direct exposure" theory of Establishment Clause standing,

a plaintiff will have direct exposure standing in at least the following circumstances: when (1) a plaintiff is personally constrained or otherwise subject to control under a governmental policy, regulation, or statute grounded in a “religious” tenet or principle (e.g., a statute that directly precludes plaintiff from conducting  business on Sunday); or (2) a plaintiff is personally confronted with a government‐sponsored religious expression that directly touches the plaintiff’s religious or non‐religious sensibilities. In both situations, it is a plaintiff’s interaction with or exposure to the religious object of the challenged governmental action that gives rise to the injury. Thus, a plaintiff is “directly affected,” as opposed to indirectly affected, by an unconstitutional governmental action when a plaintiff’s injury arises out of plaintiff’s immediate and personal confrontation with the object of that governmental action—most commonly a government‐sponsored religious expression or a governmental policy, statute, or regulation grounded in a religious” tenet or principle.

The relaxed standing requirements under the Establishment Clause are not an open invitation to sue towns and school boards, however. Where there is a "direct exposure" theory of standing to bring these religious favoritism claims, it cannot apply here. Plaintiffs say the school district is depriving its students of a proper education by manipulating the IDEA settlement process in a way that gives Hasidic Jews more money and takes money away from the public schools. But the Court of Appeals (Hall, Lohier and Reiss [D.J. in dissent]) says "the Student-Plaintiffs have not been 'directly affected' by the payment of the IDEA settlements in support of religious institutions; they have only been indirectly affected." The Court explains:

This is so because the alleged harm—the deprivation of educational services—is merely incidental to the IDEA Settlement disbursements themselves. It does not arise out of the Student‐Plaintiffs’ personal interaction with the IDEA Settlement process. The Student‐Plaintiffs’ injury is too far removed, too attenuated, from the alleged unconstitutional component of the act of funneling public monies to support the advancement of Orthodox Hasidic Jewish schools to constitute the type of injury cognizable and compensable as the result of an Establishment Clause violation. We hold, therefore, that the Student‐Plaintiffs do not have standing to assert an Establishment Clause violation.

JP Morgan retaliation case goes to trial

This plaintiff sued JP Morgan Chase for retaliation under the Sarbanes-Oxley Act because she was fired one week after she blew the whistle on what she reasonably thought was illegal activity. The case was dismissed on a motion for summary judgment in the district court, but the Second Circuit reinstates the claim.

The case is Sharkey v. JP Morgan Chase, a summary order issued on September 12. This summary order has limited precedential value, but it gives us some insight into how the Second Circuit views these bread-and-butter retaliation claims where the issues are often quite simple and do not require extended discussion.

The district court said plaintiff could not make out a prima facie case of retaliation because she could not show her protected activity was a contributing factor in  her termination. The protected activity was her recommendation to management that JP Morgan end its relationship with a client about whom she had communicated concerns of possible illegal activity. While plaintiff was fired only a week after this protected communication, the district court said she had no case because there was an intervening factor that led to her termination: she had purportedly lied to a superior about communicating with a different client.

You'll see this defense from time to time. The plaintiff has what appears be a decent retaliation case, but management argues that something  happened along the way that really explains the plaintiff's termination. We call this the "legitimate intervening basis" defense. It is not enough for JP Morgan in this case. Even assuming that a legitimate intervening basis can defeat an inference of causation, "it could not do so as a matter of law here because Sharkey disputes lying to her superior about the client communications, pointing to her own contrary deposition testimony." This is an issue for the jury, not a court on a motion for summary judgment.

Technical dismissal of criminal claim undercuts malicious prosecution claim

In order to bring a malicious prosecution claim, you have to show the police lacked probable cause to arrest you and that they did so with malice. Malicious prosecution cases are like false arrest cases in that respect. As one judge used to love to say in federal court years ago, when the police arrest someone and the court throws out the conviction, that's giving the defendant a ticket to the courthouse. But that ticket does not always result in victory.

The case is LaBoy v. County of Ontario, a summary order decided on September 9. Plaintiff was arrested for harassment. The police said he resisted arrest, and a Grand Jury indicted and a public jury convicted. But the Appellate Division reversed the conviction because the accusatory instrument that alleged LaBoy had done these things was not written by an officer who had witnessed the crimes. Facial insufficiency is a nice, clean way to overturn a conviction, because all the appellate court has to do is check to ensure the documents were prepared properly. But what does a facial insufficiency dismissal mean for a malicious prosecution case?

To win a malicious prosecution case, you have to show the criminal proceedings terminated in your favor and the police cannot arrest you again for that event. Malicious prosecution cases are more profitable for plaintiffs than mere false arrest claims, which only entitle you to damages until the date of your arraignment. In malicious prosecution cases, you get damages for the hassles of being prosecuted long after the arraignment.

While a facial insufficiency conviction reversal is all well and good if you want to erase the conviction from your record, it is not enough to bring a malicious prosecution claim. The Court of Appeals (Pooler, Parker and Livingston) says: "When an arrest is dismissed on the grounds of legal insufficiency, ... rather than pure innocence, courts have found that the was not a termination in favor of the plaintiff."

You're hired! Now sign here.

Employees have little if any bargaining power when they begin a new job, so when the employer makes them agree to certain limitations on their right to sue them, most employees go along with it, either not giving it much thought or never thinking in a million years that they might have to sue their employers.

The case is Patterson v. Raymour Furniture, a summary order decided on September 14. When Patterson began working for Raymours, she agreed in writing that she would participate in the Employment Arbitration Program, which says all claims go straight to arbitration and there are no class actions. So, here is the issue on appeal:

Whether EAP's prohibition of class or collective adjudication of work-related claims illegally restricts employees' substantive rights under the National Labor Relations Act and the Norris-LaGuardia Act and is unenforceable under the Federal Arbitration Act.

This is a legal issue that only a labor lawyer can love, but it can affect anyone, even you. This is so because if you have a potential case that is not worth much and you've waived the right to bring a class action that can make the lawsuit more worthwhile for a lawyer who does not have the time or resources to handle a small case, then you are out of luck and there is no lawsuit.

While the National Labor Relations Board has frowned upon waivers like this one, the Circuit courts are split on its legality. Does this mean the Second Circuit can go its own way? Yes, but it can't because the Court of Appeals has already resolved this issue. Referencing decisions from other Circuits, the Second Circuit (Lynch, Carney and Hellerstein [D.J.]) says: "If we were writing on a clean slate, we might well be persuaded, for the reasons forcefully stated in Chief Judge Wood’s and Chief Judge Thomas’s opinions in Lewis and Morris, to join the Seventh and Ninth Circuits and hold that the EAP’s waiver of collective action is unenforceable. But we are bound by our Court’s decision in Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013), which aligns our Circuit on the other side of the split."

One panel of the Court of Appeals cannot overturn a prior Second Circuit decision. Once three judges decide an issue, that case remains the law of the Circuit until the Supreme Court weighs in. That could happen here. The panel in this case notes that other Circuits have split on this issue. That makes the issue ripe for Supreme Court intervention.

How far does New York's anti-felony retaliation statute reach?

Did you know it is illegal in New York to fire someone (or refuse to hire them) because of his criminal conviction? The State Executive Law spells this out. Unless the conviction hits too close to home -- for example, an embezzler can't work as the comptroller somewhere -- the convict is entitled to a second chance.

The case is Griffin v. Sirva, Inc., decided on August 30. Plaintiffs worked for Astro Moving and Storage, who terminated their employment after discovering their prior convictions through a background check. Astro provides certain moving and storage services for Allied Van Lines. Sirva Worldwide is the parent company of North American Van Lines, the parent company of Allied. Astro is not a party to this case. Instead, Astro had signed a contract with Allied Van Lines prohibiting anyone convicted of certain crimes from working on Allied jobs. Plaintiffs say that Allied and Sirva, Inc., are Astro's parent and are therefore liable under New York law.

The question here is whether Allied and Sirva can be held liable for Astro's termination of plaintiffs. This is a complicated area under state law. One issue is whether the provision prohibiting felony discrimination limits liability only to the plaintiff's "employer." If so, another issue is how to determine if an entity is the plaintiff's "employer" under the statute. And what about "aider and abettor" liability under the statute? How does that play into this? Put broadly, how far does the law reach when someone is fired for his criminal record? And how many defendants can the plaintiff sue that have a contractual relationship with his immediate employer?

The law is not clear in this area. The Court of Appeals (Pooler, Hall and Carney) go through the statute and employer "single employer" liability principles as well as the "aiding and abetting" provision under the Human Rights Law before throwing up its hands and certifying this issue for the New York State Court of Appeals, which is able to issue a definitive ruling on these issues.

If you've got it, plead it

Ever since the Supreme Court said in the Iqbal ruling in 2009 that trial courts must dismiss lawsuits that have conclusory or implausible facts, we have seen case after case cheerfully dismissed because the complaint does not have enough factual allegations.

The case is Marcus v. Leviton Manufacturing Co., a summary order decided on September 2. Marcus sues for age discrimination. After running through the usual boilerplate about how lawsuits must plead facts that give plausible support for the allegations, the Court of Appeals (Walker, Chin and Lohier) notes that plaintiff "alleges that the defendant was attempting to get 'younger' by terminating older employees and replacing them with younger ones." But, the Court says, the complaint "is nearly bereft of any specific facts to support this conclusion" and it merely provides a single name without dates, ages or reasons for the termination of other employees. This will not cut it under Iqbal.

Also, while plaintiff says his termination for yelling and using profanity was a pretext as two younger employees used profanity but were not disciplined, the complaint does not say whether these employees were similarly-situated. Nor does the complaint cite the specifics of their conduct. The Complaint also provides no details about the younger and less experienced person who replaced Marcus. "Without more, the mere fact that an older employee was replaced by a younger one does not plausibly indicate discriminatory motive."

Maybe there was a case here, but the Complaint does not give the Court a reason to think so, at least not under the Iqbal pleading standards. The case might have survived a motion to dismiss under the pre-Iqbal rules. But the world has changed, and lawsuits need more specifics than ever before. So here is a pleading tip: put everything (or nearly everything) you know about the case into the Complaint. The more detail, the better. Iqbal compels it.

The Fourth Amendment is soft on crime

Sometimes the bad guy goes free. In this case, the Court of Appeals reluctantly says the police overreached in searching a motorist who was connected with a robbery conspiracy. The Court says it had no choice; the Fourth Amendment compels this result.

The case is United States v. Cunningham, decided on August 31. Defendant hung around some bad people. A few months after they committed a heinous robbery, the police stopped defendant's car as he was on his way to commit another robbery. Defendant was driving with a guy named Scott when they ran a red light. The police approached the car. This is what they saw: Defendant's arm was moving up and down in the middle console area. When the police approached, defendant was talking on his cellphone and would not put it down when the police told him to do so. Defendant then fumbled around the console looking for his license and registration. Eventually, pursuant to the policeman's directive, defendant exited the car. Defendant was frisked, and a legal pocketknife turned up on his person. The other officer saw Scott's body move "too far left into the middle area [of the car] where you would not be seated." As one of the officers continued his search of the car, defendant became fidgety and repeatedly looked over his shoulder. The police eventually found illegal weapons in the car.

The weapons are suppressed, the Court of Appeals (Lohier, Calabresi and Lynch) holds, reversing the district court, which upheld the search. The Second Circuit feels bad about this, noting its high regard for the trial judge. But the law is the law. Under Supreme Court authority, the police may search a stopped vehicle upon "a reasonable belief based on specific and articulable facts which, taken together with the rational inferences from those facts, reasonably warrant to officers in believing that the suspect is dangerous and the suspect may gain immediate control of weapons." This is like a Terry stop (or a "stop and frisk") on the highway.

The defendant and his passenger may have acted a little strange, but there was not enough "reasonable and articulable suspicion of danger justifying the search of Cunningham's car as protective." While the Court of Appeals suspects the defendant and Scott "were hiding something and up to no good," that does not mean the police have the right to search the vehicle. As for the funny arm movements, "We are hard pressed to see how a driver in a high crime area in the Bronx (or anywhere else, for that matter) moving his right arm and hand around the center console to retrieve a smartphone can reasonably suggest that danger lurks any more than a suburban father or mother reaching for a smartphone from the center console after a traffic stop to call a spouse or relative could be considered dangerous." As for defendant's delayed reaction to the officer's initial directives, while a little fishy, it was not enough to show defendant was dangerous. And Scott's contorted seating position was also insufficient to prove he was hiding something dangerous.

The Court of Appeals is repeatedly apologetic about this holding, even offering a hypothetical about two women or businessmen acting as defendant and Scott did. "Virtually everyone will agree that the police officer under those circumstances would have overstepped if they conducted a protective search of the passenger compartment on the ground that the women (or the businessmen) were dangerous and might gain immediate control of a weapon."

How not to investigate a sexual harassment complaint

This case reminds us that when an employee complains about sexual harassment, management has to stop everything and take it seriously. If management fails to do so, the plaintiff can sue her employer under Title VII. The case also says for the first time that "Cat's Paw" liability can apply when the antagonist is a co-worker and not just a supervisor.

The case is Vasquez v. Empress Ambulance Service, Inc., decided on August 29. After plaintiff rebuffed Gray's repeated sexual advances, she reported the harassment to management. Gray found out about the complaint and immediately presented management with forged text messages and questionable photographs that made it look like he and plaintiff had been romantically involved and that she had sexually harassed him. Management took Gray's word for it and did not investigate any further, refusing plaintiff's attempts to place Gray's "evidence" in context. She was fired shortly thereafter.

This is not how we investigate sexual harassment claims. Any HR representative will tell you that management should hear out all sides and not simply ignore the victim's evidence. The question here is whether the employer can be held liable under Title VII. Under the Cat's Paw theory of liability that the Supreme Court adopted a few years ago, if the decisionmaker is unwittingly influenced by a discriminatory supervisor who wants the employer to terminate the plaintiff, then the employer is liable if the bad guy influenced the decision. (If you want to know where the Cat's Paw terminology came from, Google it. Judges like to repeat the fable from which it derives, which makes it probably the most commonly-referenced Aesop's fable in the federal judiciary).

In this case, management argues that it was the co-worker and not management that had committed the discriminatory acts against plaintiff, and that the Cat's Paw theory therefore cannot not apply. The Second Circuit (Walker, Calabresi and Hall) disagrees, holding that "Assuming that Empress knew or should have known of Gray’s retaliatory animus, the fact that 'Gray was nothing more than . . . a low-level employee with no supervisory or management authority,' cannot shield Empress from answering for Gray’s conduct because Empress’s own negligence provides an independent basis, under Ellerth and agency law, to treat Gray as Empress’s agent and hold Empress accountable for his unlawful intent." (Ellerth is the Supreme Court case that says management is liable for supervisory sexual harassment if it fails to take the harassment complaint seriously). In addition, the Court says, "Such a negligence-based approach to 'cat’s paw' liability, moreover, fully comports with established Title VII caselaw in our Circuit requiring that a biased non-decisionmaker play a 'meaningful role' in an adverse employment decision for the unbiased decisionmaker to be culpable." Put another way,

Empress’s alleged negligence—in crediting Gray’s accusations to the exclusion of all other evidence, and specifically declining to examine contrary evidence tendered by Vasquez, when it knew or, with reasonable investigation, should have known of Gray’s retaliatory animus—caused Gray’s accusations to form the sole basis for Empress’s decision to terminate Vasquez. Thus, as a result of Empress’s negligence, Gray achieved a “meaningful,” and indeed decisive, role in Vasquez’s termination. Put differently, while Gray might, on other facts, have played no greater part than that of a mere “informant” or “witness at a bench trial,” who simply offered information for the decisionmaker’s examination, on the facts before us, viewed in the light most favorable to Vasquez, Gray became the entire case against Vasquez when Empress negligently chose to credit his, and only his, account.