Port Authority might be on the hook for Bridgegate legal expenses

Remember "Bridgegate"? That was a New Jersey scandal when Governor Chris Christie was accused of shutting down traffic around the George Washington Bridge to punish the mayor of Fort Lee for not supporting Christine's campaign for governor. That shutdown caused great havoc in Fort Lee. Various public officials, including the plaintiff in this case, were prosecuted over this scandal, but his conviction was overturned, and he sued the Port Authority for indemnification covering his roughly $4 million in legal expenses he incurred in defending himself. Is Port Authority on the hook for these legal expenses? 

The case is Baroni v. Port Authority, issued on December 2. Plaintiff was the deputy executive director of the Port Authority. As the Court of Appeals (Walker, Carney and Menashi) describes the genesis of this case:

While serving in that position in September 2013, Baroni approved a plan to modify the deployment of traffic cones in the New Jersey approaches to the George Washington Bridge. The plan substantially increased traffic for residents of Fort Lee, New Jersey. It was reported in the press that the plan aimed to retaliate against the mayor of Fort Lee, who had refused to endorse then-Governor Chris Christie for re-election. The resulting political scandal was known as “Bridgegate.” Baroni became a subject of investigations by the New Jersey Legislature and the U.S. Attorney for the District of New Jersey.

Baroni went through the wringer in this case, having to respond to legislative subpoenas and criminal charges. But Port Authority would not indemnify him for the legal expenses in fighting off the legislative and criminal charges. Baroni was convicted in criminal court, but he was ultimately exonerated after the U.S. Supreme Court held that the fraud counts were not actionable under federal law. Yet, while plaintiff is a free man with a clean record, he spent millions of dollars in defending himself, and public officials, including those who work for the Port Authority, usually do not have this kind of money. Port Authority refused to indemnify plaintiff, who sued Port Authority in federal court for reimbursement of his legal fees.

This is not an easy case because Port Authority argued that it has sovereign immunity, meaning it cannot be sued under the Eleventh Amendment, which says you cannot sue the state unless the state has waived such immunity. But the Supreme Court has already addressed this issue, in Hess v. Port Authority, 513 U.S. 30 (1994), holding that Port Authority "is not cloaked with the Eleventh Amendment immunity from suit in federal court." Bi-state entitles like Port Authority, which regulate services in New York and New Jersey, do not resemble the sovereign states that are normally protected under the Eleventh Amendment. The reason this remains in dispute for plaintiff is that the Second Circuit, in Caceres v. Port Authority, 631 F.3d 620 (2d Cir. 2011), made incorrect assumptions in interpreting Hess that supported the Port Authority in this case. Hess remains the primary authority for plaintiff. The complexity of this issue is one reason why it took nearly two years for the Court of Appeals to decide this case following oral argument.

What it means for plaintiff is the case cannot be dismissed for lack of subject matter jurisdiction. The parties will continue to fight over whether Port Authority must reimburse him for the approximately $4 million in legal fees. The case is also remanded so that plaintiff can amend his complaint to address another issue that was held against him in the district court: whether he complied with certain notice-of-claims filing requirements in order to maintain this lawsuit against Port Authority. 

How does Muldrow affect sexual harassment "severe or pervasive" cases?

In 2024, the Supreme Court changed the rules guiding adverse employment actions under Title VII, holding that plaintiffs can sue over personnel decisions that inflict "some harm" even if the harm is not "material," such as termination, demotion, or docked pay. That case, Muldrow v. City of St. Louis, 601 U.S. 346 (2024), rejected the Second Circuit's materiality test and made it easier for plaintiffs to win their cases. The question is now whether Muldrow has any effect on the "severe or pervasive" test governing hostile work environment cases.

In Ziparo v. CSX Transportation, issued on November 25, the Second Circuit (Sack, Nardini and Perez) addresses this issue in a footnote. The Court did not have squarely resolve this question because it was not central to Ziparo's case. But it does show this issue is on the Second Circuit's radar. Look at it this way: the existence of a hostile work environment in a sexual or racial harassment case is the adverse action over which the plaintiff is bringing the lawsuit. Is the "severe or pervasive" standard guiding whether the plaintiff suffered a hostile work environment affected by Muldrow? The Second Circuit addresses this in a footnote:

The effect of Muldrow on discriminatory hostile work environment claims is still unclear: Post-Muldrow, the Sixth Circuit has held that Muldrow applies to such claims and no longer requires “plaintiffs to show ‘significant’ harm.” McNeal v. City of Blue Ash, 117 F.4th 887, 904 (6th Cir. 2024). But see Dike v. Columbia Hosp. Corp. of Bay Area, No. 24-40058, 2025 WL 315126, at *5 n.25 (5th Cir. Jan. 28, 2025) (summary order) (rejecting the plaintiff’s argument that Muldrow changed the severe-or-pervasive test). We have not yet opined on Muldrow’s impact on discriminatory hostile work environment claims,

and the question is not before us here.

This footnote is an invitation for plaintiffs' lawyers to attack the "severe or pervasive" test -- regarded as a burdensome legal standard for plaintiffs -- has having been implicitly repudiated by Muldrow. 

Plaintiff recovers damages under Title VII despite adverse Section 1983 holding on summary judgment -- Krause v. Kelahan, Part II

This sex discrimination verdict spent 2.5 years under review by the Second Circuit, which sustained the plaintiff's win but resolved a slew of evidentiary and trial rulings along the way, making this among the more complicated Title VII cases in the Court of Appeals in recent years. At this link, I discuss the evidence that supported the jury's finding that the defendant Superintendent of Schools orchestrated the plaintiff's termination as high school principal. This time, I discuss an interesting issue relating to the plaintiff's entitlement to damages.

The case is Krause v. Kelahan, issued on December 3. I briefed the appeal, which was argued by A.J. Bosman, who tried the case. My write-up on the sex discrimination ruling is here. 

The lawsuit originally asserted two related claims in support of plaintiff's position that she was fired because of her sex. She sued under Title VII and also under Section 1983, which enforces the Equal Protection Clause, which protects those who work for public (but not private) employers. 

On the summary judgment motion, the trial court split the baby: it held that plaintiff can prevail on her Title VII claim but cannot prevail under Section 1983. The reason for this is the different burdens of proof guiding both claims. Under Title VII, the plaintiff can win if discrimination was a motivating factor, even if it is not a determinative factor. If discrimination plays a substantial role in the termination, then the defendant has violated Title VII. But under Section 1983, to win, the plaintiff has to show that sex discrimination played a determinative, or but-for, role in the personnel decision. The discrimination must have made the difference in the plaintiff's termination. The jury may not pay much attention to these distinctions, but courts do. On summary judgment, the district court said that plaintiff can, at best, prove that sex discrimination was the motivating factor in her termination but not the determinative factor. The court reached this decision in the belief that management had some decent reasons to fire plaintiff, even if those reasons were not fully dispositive on paper. 

Taking things a step further, if the plaintiff wins under Title VII, the jury has to decide if the defendant would have fired her even without the discriminatory intent. If so, then the discriminatory intent is not enough to win any damages (though she can still win injunctive relief, attorneys' fees and declaratory relief). On appeal, having lost at trial on the Title VII claim, defendant argued that, since the trial court on summary judgment found that discrimination was not the but-for cause of the plaintiff's termination, that finding necessarily means that the school district would have fired plaintiff even without the discriminatory intent, and the jury's finding that the district violated Title VII does not entitle her to any damages at all. In other words, defendant used the Section 1983 holding on the summary judgment motion in an effort to deprive the plaintiff of any damages on her successful Title VII claim. This argument would have deprived plaintiff of the $400,000+ in damages awarded by the jury.

The Court of Appeals (Carney, Lee and Sullivan [dissenting]) rejected the school district's argument, noting that under Title VII, the defendant has the burden of proving it would have fired plaintiff even without the discriminatory intent, and under Section 1983, plaintiff has the burden of proving that discriminatory intent was the determinative factor in her termination. The Court of Appeals reasons:

At summary judgment, the District Court never considered the question that would be required to find in Defendants’ favor on this defense: whether, with the burden of proof resting on Defendants, they had established that they would have inevitably terminated Krause for non-discriminatory reasons. Nor should the District Court have decided this issue, given that Defendants never raised a same-decision defense in their summary judgment briefing. They cannot now claim that the District Court erred in failing to reach an issue that they did not squarely present.

In a footnote, the Court of Appeals expands this holding further, noting that "even if the District Court should in some way have reached this issue at the summary judgment stage, this Court will not ordinarily hear a post-trial challenge to a district court’s summary judgment ruling. Instead, the Court considers whether the jury’s verdict was supported by sufficient evidence." As the jury concluded that Defendants had not “established by a preponderance of the evidence that they would have made the same decision [to terminate Krause] in the absence of gender discrimination,” and that verdict was supported by substantial evidence, defendants' argument, though creative, must fail. In other words, the jury's verdict takes precedence over anything the trial court said on the summary judgment motion.

This issue is the first time I have seen any federal court address whether a defendant's favorable result under Section 1983 on summary judgment can deprive the plaintiff of any damages upon a successful Title VII verdict at trial. One reason this is a new issue is that the courts, only in the last 15 years or so, have held that most civil rights statutes carry the "but-for" causation test, unlike Title VII, which permits a trial victory if the plaintiff merely proves that discrimination was a motivating factor in the adverse personnel action.

2d Circuit sustains sex discrimination verdict -- Krause v. Kehahan, Part I

The Court of Appeals has upheld a sex discrimination verdict against the Superintendent of Schools in Central New York who orchestrated the termination of a high school principal for pretextual reasons after making disparaging remarks about women generally treating them with hostility in the workplace.

The case is Krause v. Kelahan, issued on December 3, more than 20 months after oral argument. I briefed the appeal on plaintiff's behalf, which was argued by the plaintiff's trial counsel, A.J. Bosman. This case raises multiple issues, as evidenced by the lengthy period of time for the Second Circuit (Carney, Lee and Sullivan [dissenting]) to resolve the case. This blog entry covers the issue of whether there was enough evidence of defendant's intent to discriminate on the basis of sex, which yielded a damages award in excess of $400,000.

The majority notes "Kelahan's disrespectful and demeaning behavior towards the women with whom he worked," as follows: (1) plaintiff saw him scream at a female BOCES employee during a phone call with a "level of viciousness and [a] level of hostility" as he looked squarely at plaintiff during this tirade; (2) he threatened to fire plaintiff at the end of her first year on the job, once using a vulgarity in making this clear ("if you fuck this up, I will fire you, but good luck and have fun"); (3) disparaging plaintiff's office decorations as "very girly" and frequently making sarcastic and condescending comments about her parenting skills; (4) attacking plaintiff's need to leave work early to care for her injured daughter by stating, "That's why I hate working with women so much. They are always so emotional"; (5) frequently commenting on the clothing choices of his female staff;  and (6) developing better and friendlier relationships with his male employees than with plaintiff. Other witnesses corroborated some of this evidence, i.e., plaintiff's work mentor testified that plaintiff mentioned Kelahan's objection about working with "emotional" women. Other witnesses recalled that Keagan treated plaintiff worse than male faculty and staff, and a member of the Board of Education warned the Board about Kelahan's bullying behavior. Not only did this evidence support the wrongful discharge claim but the hostile work environment verdict, which defendants did not appeal.

This evidence supports the finding that gender animus motivated Kelahan to treat plaintiff badly and ultimately push for plaintiffs termination.  Note that the record contains limited evidence of Kelahan's expressly sexist behavior toward plaintiff but additional evidence of the harsh way that he treated women in general in the workplace. The jury was allowed to find that all this evidence demonstrated hostility toward women.

The appeal included numerous evidentiary and trial issues, including the trial judge's comment during trial about a legal principle that arguably did not apply to this case and which favored plaintiff's position. The Court of Appeals finds these issues either fell within the trial court's discretion or were harmless error that did not warrant a new trial. The Second Circuit also held the jury was able to reject the defendants' claim that plaintiff was fired for sex-neutral reasons relating to job performance. Future blog posts will cover these issues. 

Pro-life organization wins First Amendment injunction against State of New York

An anti-abortion organization sued the State of New York to prevent the Attorney General from proceeding against groups who wish to speak out against the use of abortion pills. The state has gone after similar groups who publicly criticized the abortion pills, claiming these public statements violate the state's anti-fraud laws. The plaintiffs in this case do not want similar enforcement actions against them. Hence, this First Amendment lawsuit claiming their speech is protected under the Constitution and cannot be the subject of the state's fraud lawsuits. The plaintiffs win.

The case is National Institution of Family and Life Advocates v. James, issued on December 1. The other anti-abortion groups said on websites and elsewhere that the abortion pill has serious health consequences for women. But the State of New York sued them under the General Business Law on the basis that these public statements misrepresented the efficacy and safety of abortion pill reversal drugs, also known as APR. 

The district court held, and the Court of Appeals (Bianco, Nathan and Lee) agrees, that the plaintiffs' speech in this case is protected under the First Amendment as noncommercial speech, and the state is unable to advance a compelling reason to restrict speech like this. The content-based speech restrictions that the state has pursued against other anti-abortion organizations, the Second Circuit says, is not commercial speech, which carries fewer constitutional protections than political, moral, or religious speech. The informational speech advocated by plaintiffs does not propose a commercial transaction and instead covers their anti-abortion, moral and religious advocacy, as well as womens' health concerns. "To hold otherwise could potentially subject a sweeping range of non-profits to regulation of their speech for providing the public with information and resources concerning critical services," the Court writes. 

Once the Court of Appeals finds the plaintiffs here will prevail on the merits of their constitutional challenge, the remaining elements of their preliminary injunction application are less complicated. The loss of constitutional freedoms constitutes irreparable harm. Such harm is not speculative here, as the state has gone after similar organizations for the speech that plaintiffs want to express in this case.  

Railroad whistleblower will get his retaliation trial

The Court of Appeals has reinstated a whistleblower retaliation lawsuit filed by a railroad employee who claims he suffered the consequences after he opposed their efforts to falsify railroad safety logs. This ruling clarifies the standards guiding such cases under the Federal Railroad Safety Act (FRSA), which provides a more plaintiff-friendly burden of proof.

The case is Ziparo v. CSX Transportation, Inc., issued on November 25. This case last reached the Court of Appeals in 2023, when it held that plaintiff had engaged in protected activity in objecting that the work-order falsification requests were creating an unsafe work environment by placing too much stress on the plaintiff who was therefore unable to properly perform his duties, thus further imperiling railroad safety. On remand, the district court again granted summary judgment for the defendants, concluding that plaintiff's other acts were not protected under the statute and he could not prove a causal connection between his protected activity and the termination of his employment.

The record shows that plaintiff's supervisors stood to gain financially if he falsified the safety records: they would earn higher bonuses. But railroad safety is nothing to play games with. This pressure caused plaintiff to lose focus, and after plaintiff complained to his supervisors about this, they selectively wrote him up for discipline, micromanaged his job performance, threatened to fire him and, after plaintiff reported all of this to the company's ethics hotline, they fired him after he misaligned a train switch, which could have caused a derailment, even though only 6 of the 17 employees who had previously committed similar misconduct were not fired. 

Wow have a lot of legal issues here. First. the Court of Appeals (Sack, Nardini and Perez) holds that, under the Supreme Court's ruling in Murray v. UBS Securities, LLC, 601 U.S. 23 (2024), which involved the Sarbanes-Oxley Act (SOX), the comparable FRSA only requires the plaintiff to show the protected activity was merely a contributing factor to the adverse employment, unlike other civil rights statutes, which carry a less plaintiff-friendly but-for causation model. If the plaintiff makes out that prima facie case, to prevail, the employer must prove by clear and convincing evidence that it would have made the same decision even without the whistleblowing activity. Again, this contrasts with Title VII, where the employer need only articulate a neutral reason for the termination and the plaintiff must prove that reason was a pretext for retaliation. Under the clear and convincing evidence test, the employer must show "the truth of its factual contentions are highly probable." You just don't see language like this in other employment laws, owing to the importance Congress placed on the rights of railroad whistleblowers whose speech may be matters of life and death.

This analysis leads the Second Circuit to overrule the contrary Tompkins v. Metro-North Commuter Railroad Co., 983 F.3d 74 (2d Cir. 2020), decided prior to the Supreme Court's ruling in Murray which said, contrary to Tompkins, that the plaintiff need not prove retaliatory intent under SOX and, in turn, the FRSA. And, while Tompkins held that the retaliation plaintiff most prove more than a temporal connection between the protected activity and the adverse action, since Murray does not require the plaintiff to prove retaliatory animus or motive, the temporal proximity test in Tompkins is no longer good law, and the plaintiff need only show temporal proximity without the heightened burden of proof commanded by Tomkins. Still, the temporal proximity must be close enough to permit an inference of retaliation, and the Court of Appeals approvingly cites employment discrimination cases holding that up to 5 months may be enough. As the Court of Appeals sums up:

An FRSA plaintiff can therefore withstand summary judgment on causation so long as they proffer sufficient evidence—direct or circumstantial, including evidence of temporal proximity—from which a reasonable jury could infer that the plaintiff’s protected activity contributed, in any way, to the challenged adverse action.

All of this helps plaintiff win the appeal, reversing summary judgment and remanding the case for trial. Here is what the Court of Appeals did:

1. Plaintiff's formal and informal complaints were protected under the statute. So long as plaintiff reasonably believed the demands imposed on him by supervisors were creating an unsafe working environment, causing him to become stressed and distracted and unable to focus on his safety-related duties, he could not suffer retaliation for his complaints about this kind of supervisory abuse.

2. A retaliatory hostile work environment is actionable under the statute. The statute prohibits "discharging, demoting, suspending, reprimanding, or in any other way discriminating against an employee" for engaging in protected activity. That language necessarily prohibits a retaliatory hostile work environment. While Title VII imposes a high burden on plaintiffs to prove a hostile work environment ("severe or pervasive"), the Title VII retaliation cases, including Burlington Northern v. White, 548 U.S. 53 (2006), which prohibits any retaliation that would dissuade a reasonable employee from speaking out, allows plaintiffs in these cases to merely show that any form of retaliatory harassment that would dissuade the plaintiff is actionable, such as increased scrutiny, selective discipline and screaming at the plaintiff on a daily basis. 

3. The jury may find that the whistleblowing was a contributing factor (even if only played a "small role") in plaintiff's discipline, including termination, due to tight temporal proximity between the two events, the supervisors' admissions that they exhibited hostility or antagonism toward him, particularly after he blew the whistle. The court writes, "had Ziparo not repeatedly made unheeded safety complaints, perhaps his protected activity would not have created escalating 'tension and animosity' that culminated in" his supervisors' threats to fire him. 

4. The jury may find that CSX cannot prove its affirmative defense that it would have fired the plaintiff even without the whistleblowing. While defendant further argued it would have fired plaintiff in any event because he screwed up a track switch and might have caused a derailment, under the clear and convincing evidence framework, we don't ask what management could have done in isolation but what it would have done without the whistleblowing. Since defendant only fired 6 of the 17 employees who engaged similar misconduct, the jury may find it was "highly probable or reasonably certain" that CSX would not have fired plaintiff without the whistleblowing. "In other words, CSX usually retains employees who erred as Ziparo did."