90 day filing deadline in employment discrimination cases are strictly enforced

Deadlines are deadlines. This cases reminds us that filing deadlines in Title VII and ADEA cases are strict, and the exceptions are rare.

The case is Ko v. JP Morgan Chase Bank, a summary order issued on April 17. This is a case brought under the Age Discrimination in Employment Act. In New York, before employment discrimination plaintiffs can sue in court, they have to file an administrative charge of discrimination with the Equal Employment Opportunity Commission within 300 days of the last discriminatory act. Once the EEOC completes the investigation and issues a Right to Sue Letter, you have 90 days to file the lawsuit.

Plaintiff got the Right to Sue Letter on July 2, 2016. She filed the lawsuit on October 2, 2016. The case was dismissed because the lawsuit was filed two days late. You might think 90 days from July 2 is October 2, but the rule says 90 days, not three months. Since the months of July and August have 31 days, 90 days from July 2 is September 30. So the lawsuit was filed too late.

There are exceptions to late filings in this context. We call it the "equitable tolling" rule. The name of the rule alone tells you what's going on here. You need a good reason for the late filing so that the court will see the equities in your favor and give you a break. The test is whether the plaintiff acted with "reasonable diligence" to enforce her rights but was prevented from doing so by no fault of her own. Plaintiff's equitable tolling argument said ""the weekend after her letter was sent was the Independence Day weekend."  Receiving the Right to Sue Letter at the time of the July 4 weekend is not a good enough excuse for the late filing in September/October, the Court of Appeals (Hall, Droney and Stanceu [by designation]) says. I think the argument here is that the holiday weekend caused delays in the mail service so that plaintiff did not receive the Right to Sue Letter until sometime after the holiday, bringing the 90 day deadline into early October, not late September. The Court of Appeals rejects that argument. "Every litigant seeking relief from a district court must navigate federal holidays in the calendar, and Ko provides no authority suggesting that equitable tolling should be granted for alleged delays in the mail service."

Syracuse water turn-off policy is constiutionally suspect

The City of Syracuse set up its water service so that only property owners, or landlords, but not tenants, set up their water service accounts. This means if the landlord does not pay the bill, the tenant will go without any water. When the tenant finds out the water may be shut off, she or the landlord can request a hearing before an administrative law judge. In this case, relying on the landlord's assurance that he would pay the bill, plaintiff did not request a hearing. The landlord blew off the bill, and plaintiff got the shaft, and proceeded with this class action lawsuit against the City under the Due Process Clause, which the trial court dismissed.

The case is Winston v. City of Syracuse, decided on April 11. The Second Circuit reinstates the lawsuit. But first, it puts the kibosh on her equal protection claim that there is no rational basis for the City's rule that only landlords and not tenants can open water accounts. The transient nature of tenants justifies the rule, which ensures that landlords, who don't come and go, will pay the water bills at the risk of a lien on the property. The lien threat does not kick in with tenants, only landlords. While plaintiff offers some creative ways to get around the logistical problem of collecting payment from transient tenants, the Court of Appeals notes that the equal protection claim must fail if the City can put forward any rational basis for distinguishing between tenants and landlords, an easy burden for the City. This analysis reminds us that it is quite difficult to challenge municipal policies under rational basis review.

But while the  water account policy is constitutional, a different analysis governs the water service termination policy. We have two classes here for purposes of equal protection analysis: tenants whose landlords have delinquent water bills and tenants whose landlords actually give a damn and pay their bills. Is there a rational basis for this distinction? That's the question here. In 1974, the Fifth Circuit said water policies like this violated the Equal Protection Clause. The Sixth, Seventh and Ninth Circuits have similarly ruled over the years. The Second Circuit joins these courts in ruling that ordinances like this are constitutionally suspect:

Requiring a tenant without any legal obligation for a landlord's unpaid bill to pay that bill to retain or restore water service fails rational basis review. The tenants of non-delinquent and delinquent landlords are similar in all respects to this situation. First, they rent their homes and cannot open water accounts in their own name. Second, their landlords have the legal obligation to pay the water bills to the City; neither class of current tenants possesses a legal obligation to pay the unpaid water bill. As a result, the City's policy of shutting off water to collect debs 'divorces itself entirely from the reality of legal accountability for the debt involved' and penalizes not the debtor but an innocent third party with whom the debtor contracted." 

Civilian street fight produces interesting ruling on subject matter jurisdiction

This is a different kind of case, where one civilian sues another civilian over an assault and battery and other state law claims, and the case goes to trial in federal court. It all started when plaintiff Wright got into a verbal and then physical confrontation with defendant Musanti as they were walking the streets of Manhattan on their way to work. Wright prevailed in this lawsuit against Musant, who appeals.

The case is Wright v. Musanti, decided on April 13. Musanti handles this appeal pro se. These two people accidently walked into each other. Eventually, Musanto kicked at Wright and then kicked, hit and scratched him. Musanti reported Wright to the police, who arrested Wright for attempted assault and harassment, escorting him out of his office in handcuffs. The criminal case against Wright was dismissed because Musanti did not show up in court. Wright then sued Musanti in state law tort and the police officer under Section 1983 for false arrest. The district court chucked the federal claim against the officer, leaving us with Wright's state law claim against Musanti, which went to trial in the SDNY through diversity jurisdiction, since Musanti relocated to Tennessee. Are you with me so far? Following a bench trial, the district court ruled in Wright's favor, deeming him credible and Musanti incredible, and crediting surveillance video which corroborated Wright's account. The court awarded Wright a dollar in nominal damages for the assault and battery, $5,000 for the false arrest and $10,000 in punitive damages.

On appeal, the Court of Appeals (Walker, Lynch and Chin) first says the district court had diversity jurisdiction over the case. When the case was first brought in the SDNY, both parties lived in New York. The general rule of diversity jurisdiction is that federal courts have authority to hear the case if the parties live in separate states when the case was first commenced. That rule would seem to undercut subject matter jurisdiction in this case, as Musanti moved away only after this case was filed. But, the Second Circuit says, that rule "was developed . . . in cases where diversity jurisdiction is the only basis for federal subject matter jurisdiction. In such cases, the rule plays a vital role: if diversity of citizenship did not exist when the action was filed, federal court jurisdiction over the case would never have attached, and for a federal court to take any action in the case would be an 'unconstitutional usurpation of state judicial power.'" But this case is different, because the federal court had jurisdiction over the case due to plaintiff's Section 1983 claim against the arresting officer (even though that claim was later dismissed). So, although diversity jurisdiction did not exist when the case was initially brought, it later became present once Musanti moved to Tennessee. This holding is significant, as "this exact situation" has never previously arisen in the Second Circuit. Here's some useful language: "diversity need not be established until diversity becomes necessary to establish federal subject matter jurisdiction."

What began as a street fight between two civilians, therefore, turns into a holding that is of interest to federal court practitioners. The Second Circuit goes onto uphold the district court's finding of liability, not a difficult task for the Court of Appeals, as the verdict turns on factual and credibility determinations that are difficult to overturn on appeal.

White Flag Rule 68 offer does not moot the case

Rule 68 of the Federal Rules of Civil Procedure is one of the trickiest rules in the canon. Even lawyers who bring federal cases do not always fully understand its implications. In this case, the Court of Appeals takes another look at Rule 68 and reaches a holding that only civil rights and federal class action lawyers probably care about.

The case is Franco v. Allied Interstate LLC, a summary order issued on April 9. Rule 68 works like this. Plaintiff brings a lawsuit. Defendant does not want to be bothered with the case or it knows it will lose the case. So defendant sends a Rule 68 offer to the plaintiff's attorney. The offer is formally called an Offer of Judgment. The offer is what it sounds like: defendant is offering a judgment to the plaintiff, not merely a settlement where the parties deny that defendant did anything wrong. In addition to the judgment, the defendant offers a sum of money. But there is a catch: the plaintiff has a limited time to accept or reject the offer. If the plaintiff rejects the offer and then proceeds to trial and wins the case but gets less money than the defendant offered, then the plaintiff pays a penalty in the form of defendant's costs expended after the offer of judgment was served. In civil rights cases, where the plaintiff recovers attorneys' fees from the losing defendant, if the jury verdict is less than the Rule 68 offer of judgment, then the plaintiff forfeits all attorneys' fees post-Rule 68 offer.

So the cases interpreting Rule 68 often use language like this: "A Rule 68 offer forces the plaintiff to think long and hard about whether to proceed with the case." That's true. When the Rule 68 offer arrives in the plaintiff's attorneys' in-box, counsel and client must immediately talk about the offer and what it means. Plaintiff's counsel must also educate the client on the implications of a shrewd Rule 68 offer.

What if the defendant makes a Rule 68 offer that would provide the plaintiff with everything she was seeking in the lawsuit? Where the defendant is essentially waiving the white surrender flag? Some courts had held that such a Rule 68 offer moots the case and the trial court enters judgment for the plaintiff. After all, the defendant is giving the plaintiff everything he asked for. But the Supreme Court held in Campbell-Ewald Co. v. Gonzalez, 136 S.Ct. 663 (2016), that an unaccepted Rule 68 offer is a nullity if the plaintiff for whatever reason does not accept it in time.

In this case, defendant made such a Rule 68 offer to the plaintiff, who is trying to pursue a class action. The advantage for the defendant is that the class action goes away if the plaintiff takes the Rule 68 offer. The district court declared the case moot in light of the Rule 68 white flag, stating:

Defendant has now offered judgment referencing "unconditional surrender" and affording complete relief to plaintiff. Accordingly, judgment shall be entered against defendants under Rule 68. This entry of judgment moots plaintiff's individual claim. There is therefore no longer any named plaintiff with an interest in the litigation to proceed with a claim on behalf of a class. Plaintiff Franco cannot nominally continue in some capacity as class representative as he would definitionally be atypical and not an adequate representative.

Not so fast, says the Second Circuit (Pooler, Raggi and Droney), which reinstates the case on authority of Campbell-Ewald. Plaintiff is back in the case, and ready to litigate this case brought under the Fair Debt Collection Practices Act.

Inmate loses three-strikes PLRA filing fee exception

Under the Prisoners Litigation Reform Act, with narrow exceptions, inmates who bring three frivolous lawsuits cannot bring another lawsuit or appeal in forma pauperis, which allows impoverished people -- including inmates -- to proceed without paying filing fees. (If they want to bring another case, the inmates have to pay the filing fees). The Court of Appeals applies this rule to an inmate who in the past has brought frivolous lawsuits.

The case is Akassy v. Hardy, decided on April 4. Four of plaintiff's cases were dismissed on statutes of limitations grounds. Under settled precedent, those timeliness dismissal qualify as frivolous cases under the PLRA. Plaintiff tries to get around this by arguing that these four  dismissals should count as only one strike because the dismissals were implemented in a single order from the Court of Appeals. Nice try, but the Second Circuit is not buying it. Those cases were consolidated by the Court of Appeals as a single appeal. Those separate appeals did not thereby become a single appeal for purposes of determining if plaintiff has three strikes under the PLRA.

Another way to avoid the three-strikes rule is showing the current lawsuit claims the inmate is under imminent danger of serious physical injury. Plaintiff invokes this rule. The Court frames his argument this way:

Akassy, who seeks to sue his former attorneys, states "my life is in a cl[ea]r and present danger as I have been subjected to abuses, physical assaults and denied my prisoner's rights by overzealous Correctional Officers for filing grievances and reporting abuses to law enforcement authorities and Human Rights Organizations" and "because of the nature of my alleged criminal case and the legal malpractice."

But this not what the imminent physical injury exception was intended to cover. You have to claim  imminent physical injury; if the injuries have already occurred, the statute will not protect you. Also, the purpose of this exception is to allow you to file the lawsuit to redress that imminent physical injury, such that there must be a nexus between the lawsuit and the threat. There is no such nexus here. 

Supreme Court rejects pro-employee statutory construction in FLSA cases

The Supreme Court has narrowly construed the Fair Labor Standards Act, ruling that service advisors for car dealerships are exempt from the overtime rules, which apply to "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements." In reaching this holding, the Court rejects the principle that courts should narrowly interpret FLSA overtime exceptions.

The case is Encino Motorcars, Inc. v. Navarro, decided on April 2. The service advisors "consult with customers about their servicing needs and sell them servicing solutions." As the Court further describes these employees, service advisors "meet with costumers; listen to their concerns about their cars; suggest repair and maintenance services; sell new accessories or replacement parts; record service orders; follow up with customers as the services are performed . . . ; and explain the repair and maintenance work when customers return for their vehicles." These are the people who want you to dump your wallet on the table for services and products you did not know you wanted or needed. Think Puddy, from Seinfeld.

As the Supreme Court sees it, service advisors are salesmen primarily engaged in servicing automobiles. Justice Thomas continues, "A service advisor is obviously a salesman." They also service vehicles. The Oxford Dictionary says  that servicing can mean either "the action of maintaining ore repairing a motor vehicle" or "the action of providing a service." Service advisors fit both definitions, as they are "integral to the servicing process" and, "If you ask the average customers who services his car, the primary, and perhaps only, person he is likely to identify is his service advisor." This means that "'primarily engaged in . . . servicing automobiles' must include some individuals who do not physically repair automobiles themselves but who are integrally involve din the servicing process."

The Ninth Circuit, in ruling otherwise, invoked the principle that exceptions to the overtime rules must be construed narrowly. The Court says, "we reject this principle as a useful guidepost for interpreting the FLSA." Quoting from a book written by the late Justice Scalia, the Court says,

Because the FLSA gives no “textual indication” that its exemptions should be construed narrowly, “there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.” Scalia, Reading Law, at 363. The narrow-construction principle relies on the flawed premise that the FLSA “ ‘pursues’ ” its remedial purpose “ ‘at all costs.’ ” American Express Co. v. Italian Colors Restaurant, 570 U.S. 228, 234 (2013) (quoting Rodriguez v. United States, 480 U.S. 522–526 (1987) (per curiam)); see also Henson v. Santander Consumer USA Inc., 582 U. S. ___, ___ (2017) (slip op., at 9) (“[I]t is quite mistaken to assume . . . that whatever might appear to further the statute’s primary objective must be the law” (internal quotation marks and alterations omitted)). But the FLSA has over two dozen exemptions in §213(b) alone, including the one at issue here. Those exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement. See id., at ___ (slip op., at 9) (“Legislation is, after all, the art of compromise, the limitations expressed in statutory terms often the price of passage”). We thus have no license to give the exemption anything but a fair reading.

Justices Ginsburg, Sotomayor, Breyer and Kagan dissent. Ginsburg writes in part:

This Court has long held that FLSA “exemptions are to be narrowly construed against the employers seeking to assert them and their application limited to those [cases] plainly and unmistakably within their terms and spirit.” Arnold v. Ben Kanowsky, Inc., 361 U. S. 388, 392 (1960). This principle is a well-grounded application of the general rule that an “exception to a general statement of policy is usually read . . . narrowly in order to preserve the primary operation of the provision.” Maracich v. Spears, 570 U. S. 48, 60 (2013) (internal quotation marks omitted). In a single paragraph, the Court “reject[s]” this longstanding principle as applied to the FLSA, without even acknowledging that it unsettles more than half a century of our precedent.

In the FLSA world, this is a major case, rejecting what everyone thought was a pillar of statutory construction under this remedial labor law. I have not seem much commentary on this point, but a management-side law firm has pointed out the implications in rejecting the narrow exemption rule. In a blog post entitled, "Employers, Rev Your Engines," these lawyers note that "in deciding that the exemption does apply to service advisors, the Court dropped a true bombshell with respect to FLSA jurisprudence: it rejected the longstanding principle that exemptions are to be construed narrowly.  As a result, going forward, courts will need to place exemptions on the same statutory and interpretive footing as the substantive overtime requirements in the statute. . . . The Court’s ruling will have an impact on every case involving the application of FLSA exemptions to employees, whether those cases are brought by individuals or as collective actions on behalf of similarly situated workers."

Age discrimination claim against federal government fails

One of these days, the Supreme Court will square away how and when you can bring a constitutional claim for age discrimination against the government. The law still seems murky in this area. The Second Circuit addresses this issue in an unpublished decision, ruling against the plaintiff.

The case is Neary v. FDIC, issued on April 5. Neary was a 41 year old applicant for a position at the FDIC. He says he was denied the position because of his age, in part, because 53 of the FDIC's 54 new hires were under the age of 40, as per an Obama-era directive to focus on hiring recent college graduates. Apart from the fact that the directive was not yet in effect when Neary was denied the position, his constitutional claim fails for another reason: the government had a rational basis to focus on younger hires.

While the Equal Protection Clause (and related provisions that we invoke in suing the federal government) makes it difficult for the government to discriminate on the basis of age and race (heightened scrutiny applies), the Supreme Court has never said that age is a suspect class. This means the government can avoid liability upon a showing that its age-related decisonmaking has a rational basis. The leading case on this issue is Mass. Bd. of Ret. v. Murgia, 427 U.S. 307 (1976). The Second Circuit (Jacobs, Wesley and Eaton [by designation]) says:

The government’s proffered justification for the program is “to replenish a workforce containing an evergrowing number of Federal employees near[ing] retirement age with students and recent graduates.” Neary may be correct that the government could have adopted a different selection process to identify qualified applicants who would likely become long‐serving federal employees, and it may be true that the selection criteria the program used failed to account for the work preferences of Millennials, but that is not the relevant inquiry. “[W]here rationality is the test,” the government does not violate equal protection “merely because the classifications made by its laws are imperfect.”

Courts in the Second Circuit have ruled in favor of plaintiffs who sue the government for age discrimination under the Equal Protection Clause. I worked on one of those cases, Shapiro v. New York City Dept. of Education, 561 F. Supp. 2d 413 (SDNY 2008), where Judge Rakoff treated the Section 1983 claim like a traditional ADEA claim, stating, "In order to establish a prima facie case of age discrimination under either the ADEA or § 1983,a plaintiff must show that (1) he was a member of the protected class, i.e. an employee over 40 years of age; (2) he was qualified for his position; (3) he suffered an adverse employment action; and (4) the circumstances surrounding the action give rise to an inference of age discrimination." The Court in Shapiro also said that "although the Second Circuit has not yet decided the precise issue, 'the weight of authority in the Second Circuit favors the position that the ADEA does not preempt claims under § 1983 for age discrimination.'"

The plaintiff in Neary also sued under the ADEA. At first glance, he has a great case, as he notes that nearly all of the FDIC's recent hires were less qualified than he was. But that it not enough to plead an ADEA claim under the Iqbal pleading rules. The Court of Appeals rejects the case because "he fails to plead facts that allow us to infer that the applicants ultimately hired were disproportionately younger than 40, relative to the applicant pool. And Neary cannot complain of a disparate impact based on the CEP Program’s recent graduation requirement because, as a recent graduate himself, he lacks standing to challenge it."