Sunday, June 30, 2024

Supreme Court rejects Chevron-deference, altering administrative law forever

The Supreme Court has overruled one of its most important cases in the last 50 years, holding that courts cannot defer to the judgment of administrative agencies on the meaning of federal statutes. The Chevron precedent, the centerpiece of the modern administrative state, and the lodestar every time a federal agency issues regulations under the Administrative Procedure Act, is gone.

The case is Loper Bright Enterprises v. Raymond, issued on June 28. The case centers on federal regulations involving fishery in the ocean. The industry challenged particular regulations. But the precise issues raised by the parties are not the main event. The story is the future of administrative law in the United States.

The Supreme Court devised Chevron-deference in 1984. That was not a particularly liberal court, but it adopted Chevron-deference by a 6-0 vote (three Justices did not participate in the case), and of those six Justices, five of them were appointed by Republican presidents. 

One of the most valuable things I learned in law school was administrative law. Not because I practice administrative law, but because administrative law is important and complex, and the only way to really understand how it works is through formal instruction. Many non-lawyers are familiar with the concept of Chevron-deference, but this may be the most important below-the-radar issue in American law.

Administrative law is where public policy is formulated, as specialists, experts, scientists, and economists draft regulations to assist in the enforcement of federal statutes that are not always clear about how they apply in specific situations. Environmental policy, along with health and safety, consumer protection, education, etc., is largely formulated by the administrative agencies, part of the Executive Branch and derisively referred to as the "bureaucracy" when it issues rules that people don't like or want to enforce. The idea behind Chevron deference is that, if the regulations are consistent with the statutes they were intended to enforce, then the courts must respect those regulations if someone sues to block their enforcement. If the regulations go too far afield from the legislative intent, then the courts need not enforce them.

Writing for the usual 6-3 majority, Chief Justice Roberts draws from a fundamental constitutional principles: only the courts may interpret the laws, not the Executive Branch. The reasoning in Chevron delegates that authority to the administrative agencies, Roberts holds, and for that reason, Chevron was wrongly decided is no longer binding on any court. The Chief says, in part:

delegating ultimate interpretive authority to agencies is simply not necessary to ensure that the resolution of statutory ambiguities is well informed by subject matter expertise. The better presumption is there- fore that Congress expects courts to do their ordinary job of interpreting statutes, with due respect for the views of the Executive Branch. And to the extent that Congress and the Executive Branch may disagree with how the courts have performed that job in a particular case, they are of course always free to act by revising the statute.

Justice Kagan writes the dissent for Justices Sotomayor and Jackson, stating that Chevron simply reflects the reality of how government works in the modern era, "as Congress knows that it does not—in fact cannot—write perfectly complete regulatory statutes," and that Congress "knows that those statutes will inevitably contain ambiguities that some other actor will have to resolve, and gaps that some other actor will have to fill." Congress, Justice Kagan writes, "would usually prefer that actor to be the responsible agency, not a court." She adds:

Some interpretive issues arising in the regulatory context involve scientific or technical subject matter. Agencies have expertise in those areas; courts do not. Some demand a detailed understanding of complex and interdependent regulatory programs. Agencies know those programs inside-out; again, courts do not. And some present policy choices, including trade-offs between competing goods. Agencies report to a President, who in turn answers to the public for his policy calls; courts have no such accountability and no proper basis for making policy. And of course Congress has conferred on that expert, experienced, and politically accountable agency the authority to administer—to make rules about and other- wise implement—the statute giving rise to the ambiguity or gap. Put all that together and deference to the agency is the almost obvious choice, based on an implicit congressional delegation of interpretive authority. We defer, the Court has explained, “because of a presumption that Congress” would have “desired the agency (rather than the courts)” to exercise “whatever degree of discretion” the statute allows. 

If Roe v. Wade (now overturned) was the crown jewel of abortion law, then Chevron was the Mount Everest of administrative law. Chevron-related issues do not get the public attention that abortion does, but for government employees, non-profits, and the business community, administrative law is the most important thing in the world. In this case, the structure of administrative law has changed forever, and my prediction is that overturning Chevron will result in fewer environmental, health and safety, consumer protection, and related rules and regulations, and many of them are now vulnerable and will be the subject of a slew of legal challenges over the next few years. 

Thursday, June 27, 2024

No speech violation where Town Board cuts public comments out of livestreaming

This First Amendment case from Rockland County examines what happens when the Town Board does not make the public comment portion of its meetings available to the public on its live broadcasts. Is this a free speech violation?

The case is Potanovic v. Town of Stony Point, a summary order issued on June 25. When I covered municipal board meetings as a young journalist in the late 1980s, public comment sessions were not contentious. They have become more contentious in our polarized society. With the Internet, you can watch these meetings at home. All of this gives rise to this lawsuit. Plaintiff argues that, by closing out the public from his comments at the start of the meeting, his First Amendment rights are being squashed because this practice reduces the size of his audience: the people watching from home. 

The Court of Appeals (Livingston, Robinson and Kahn) holds this is not a speech violation. The Court sees things this way:

Potanovic’s First Amendment claim is best understood as seeking to compel the Town to create a limited public forum of the scope and character that Potanovic seeks—namely, broadcast online, recorded, and archived. If, hypothetically, the Town provided an opportunity for members of the public to address the Town Board in person on a separate day, untethered to the Town Board’s livestreamed legislative meeting, Potanovic would not have a First Amendment right to compel the Town to expand the limited public forum it thereby created beyond its deļ¬ned scope by livestreaming the meetings just because the Town had the technology to do so. The fact that the Town’s public comment period is temporally adjacent to the Town Board’s (nonpublic) legislative meeting does not change this analysis.
The Second Circuit holds the Town Board's practices are not illegal because the public can still attend the meetings in person, and people can still address in-person audiences at the meetings. Plaintiff continued to speak at these meetings even after the Town Board shut off the live-streaming during the public comment sessions.

Tuesday, June 25, 2024

Supreme Court expands the claim for malicious prosecution

In a victory for plaintiffs, the Supreme Court has held that they can sue the police for malicious prosecution even if some the charges filed against an arrestee are supported by probable cause. 

The case is Chiaverini v. City of Napoleon, issued on June 20. Malicious prosecution claims may proceed against the police if they charge you with a crime without probable cause, and the plaintiff can also show the charges were motivated by malice. In the Second Circuit, malice may be proven by the lack of any probable cause. And you have to show the charges did not yield a criminal conviction. The question is whether you can bring a malicious prosecution claim if the police charge you with three offenses, two of which are supported by probable cause.

The reason this question arises is because the related claim of false arrest is defeated if the police had any objective basis to arrest you. So that if you are charged with trespass, and there is no probable cause for that charge, but the police could have charged you with resisting arrest, because they would have had probable cause to arrest you for that, then there is no false arrest claim. Some courts have held that malicious prosecution claims, like false arrest claims, will fail if any of the charges are supported by probable cause. The Sixth Circuit was one of those courts, and this case, arising from that Circuit, reaches the Supreme Court after the plaintiff, who owned a jewelry store, was arrested and charged with receiving stolen property and related charges, including money laundering. Plaintiff said the money laundering claim in particular lacked any probable cause. It's the money laundering claim that predicates the malicious prosecution case under Section 1983.

The Supreme Court rejects the false arrest theory of malicious prosecution. It thus holds that if a particular charge lacked any probable cause, then the plaintiff is eligible to sue for malicious prosecution even if the other charges might have been supported by probable cause. The Court reaches this holding upon reviewing Fourth Amendment caselaw and common-law principles. 

Justices Thomas and Alito dissent, taking a more far-reaching view: that the Fourth Amendment cannot support any claims for malicious prosecution, and that the only place for these claims is in state court. Justice Gorsuch also refers to this as "a new tort of [the Court's] own recent invention -- what it calls a 'Fourth Amendment malicious-prosecution cause of action.'"

Monday, June 24, 2024

Supreme Court holds the states may disarm domestic abusers

The Supreme Court has held that the states may disarm people who are subject to a domestic violence restraining order. While the offender asserted the Second Amendment makes the law in question unconstitutional, the Court overwhelmingly disagreed.

The case is United States v. Rahimi, issued on June 21. This is an 8-1 ruling. Justice Thomas dissents.

Prior to the Supreme Court's ruling in District of Columbia v. Heller (2008), this would not have been an issue, as the Court had never previously held that the Second Amendment protects an individual right to own a gun. Since that time, the Court has made it harder to regulate guns, as the Court in 2022 held in New York State Rifle & Pistol Assn. v. Bruen that only gun regulations that resemble the ones in place at the time of the nation's founding in the 18th Century satisfy the Constitution. We call that "originalist" thinking. That legal standard came out of nowhere. So, while Justice Barrett in this case says that the Second Amendment is not absolute, the legal standard created by the Court in 2022 makes is as close to absolute as any of the Bill of Rights. The Supreme Court decides how to interpret the Constitution and it has authority to create legal standards to assist in that interpretation. As the Court writes in this case, 

appropriate analysis involves considering whether the challenged regulation is consistent with the principles that underpin our regulatory tradition. A court must ascertain whether the new law is “relevantly similar” to laws that our tradition is understood to permit, “apply[ing] faithfully the balance struck by the founding generation to to modern circumstances.”
Even under this pro-gun legal standard, the defendant in this case loses. "From the earliest days of the common law, firearm regulations have included provisions barring people from misusing weapons to harm or menace others." What follows is a lengthy dissertation on British case law dating to the 17th Century. These old legal precedents also allowed judges to "prevent all forms of violence, including spousal abuse." Back then, the laws also "targeted the misuse of firearms." While the law at issue in this case "is by no means identical to these founding era regimes, . . . it does not need to be. Its prohibition on the possession of firearms by those found  by a court to present a threat to others fits neatly within the tradition" the older laws represent.

Justice Jackson's concurring opinion notes that the majority opinion impliedly concedes the legal standard first articulated in Bruen is difficult to apply, which explains why the Chief Justice in this ruling tries to clarify what Bruen really means. Jackson notes that lower courts are struggling to understand Bruen and that "there is little method to Bruen's madness."

Friday, June 21, 2024

2d Circuit affirms dismissal of Sarbanes-Oxley retaliation claim

It's been a while since we've seen a Sarbanes-Oxley case in the Second Circuit. This case was dismissed because the plaintiff was unable to show his whistleblowing was protected under this statute, intended to protect against Wall Street financial abuses.

The case is Katzel v. American International Group, a summary order issued on June 21. 

As head of the Legal Operations Center at AIG, plaintiff suggested the LOC spin-off into its own consulting firm, which would continue working with AIG while contracting with other companies to help them reduce their external legal costs. Plaintiff would be president and CEO of this independent LOC. AIG decided against implementing this proposal. 

In December 2016, plaintiff told the compliance department that AIG's evaluation of his proposed LOC spin-off plan were inadequate, and there might be a potential conflict of interest by a consulting firm involved in evaluating the spin-off plan. While plaintiff told the compliance department that he did not have knowledge of any alleged or suspected fraud, "he still thought it would be worthwhile to 'evaluate the advisability of review and testing on the robustness of conflict of interest protections in the processes followed by certain functions responsible for significant transactions at the company' to ensure the company made decisions that 'maximize shareholder value.'” The compliance department determined that while these were valid concerns about AIG's practices of sharing confidential documents with consulting firms, there was not actual conflict.

Plaintiff was fired a few months later after the compliance department wound up its investigation. The stated reason was that he was unwilling and unable to make changes that Solmssen viewed as necessary at the LOC, including cutting its costs and reducing its headcount.

Plaintiff loses in the district court and on appeal, the Second Circuit holds, because he did not engage in protected activity under Sarbanes-Oxley. Plaintiff had to show he reasonably believed he was reporting a violation of Securities and Exchange Commission rules. "While Katzel proffered facts that suggest he legitimately believed AIG was making a poor business decision in declining to proceed with his proposed LOC spin-off, these facts do not suggest he believed this bad business decision reached the level of illegal conduct." The Court reasons as follows:

The notes from Katzel’s initial conversation with the Compliance Department, as well as two separate certifications he signed in 2016, suggest  that he did not believe the conduct he was reporting violated federal law. During Katzel’s initial conversation with the Compliance Department, he stated that he had “[c]oncerns/questions about whether the process was fair & robust,” that he thought the team reviewing the spin-off proposal did not “let[] facts speak for themselves,” and that he thought a “vigorous process need[ed] to be in place” for potential transactions like the spin-off to ensure AIG got the “right price” and the “right buyers.” Absent from the conversation notes, however, is any suggestion that Katzel thought this failure to conduct a “vigorous process” was fraudulent in any way.
Sarbanes-Oxley (known as SOX) is an important law, but you can see the difficulties in bringing such a case. Unfortunately for plaintiff, his case fails at the outset, as the Court of Appeals (Parker, Perez and Jacobs) finds he cannot make out a prima facie case of whistleblowing retaliation.

Thursday, June 20, 2024

It is tough to overturn a jury verdict on appeal

This case went to trial in the Northern District of New York. Plaintiff is an inmate who claims correction officers attacked him, causing him serious injuries. The jury ruled for the officers, and plaintiff appeals. The Court of Appeals affirms the verdict, reminding us once again that it is quite hard to upset a jury verdict on appeal. 

The case is Barnes v. Rock, a summary order issued on June 13. Many trial court rulings are discretionary with the judge. That makes it hard to challenge their rulings on appeal, even if the trial court got it wrong. In order to get a new trial on the basis of the district court's rulings, you have to show an abuse of discretion and that the judge's errors affected the verdict. Again, hard to do.

Plaintiff says the trial court got it wrong in not giving the jury an adverse inference charge on missing video footage that plaintiff claims would have supported his case. But the trial court did allow plaintiff's lawyer to make that argument to the jury during closing arguments. Attorney argument is not as compelling as a trial court adverse inference jury instruction, but that determination is up to the judge. 

Plaintiff also argues that the trial court should not have taken the retaliation claim away from the jury. The judge said there was not enough evidence for plaintiff to win the case. This can be a winning argument: normally, juries decide what happened, and trial courts risk a re-trial if they prematurely dismiss a claim during trial. Plaintiff loses this argument, however, because the jury verdict that the officers did not subject plaintiff to excessive force precludes any retaliation argument, which evidently turned on whether the officers used excessive force.

An interesting argument here is that plaintiff did not get a fair trial because the trial court ordered him to wear shackles in the courtroom. Imagine what the jury is thinking when the plaintiff-inmate is wearing shackles during trial. But there is an "abuse of discretion" standard of review on arguments like this. We leave it to the trial judge to decide these matters.

Tuesday, June 18, 2024

Some guidance on management's duty to protect workers from third-party sexual harassment

In this unusual sexual harassment case, the plaintiff -- a Town Planner and Director of Development Services for the Town of Berlin, Connecticut -- complained that a Town resident (a local developer) was sending the Town a series of letters claiming that plaintiff had a substance abuse problem and she was involved in a sex scandal with a subordinate. Plaintiff ended up resigning over this. The district court said the Town's response to these offensive letters satisfied its obligations under Title VII. The Court of Appeals agrees with plaintiff that a jury may rule in her favor.

The case is Riggins v. Town of Berlin, a summary order issued on June 13. The letter-sender, Coccomo, did not work for the Town. But the Town still had an obligation to protect plaintiff. The Court of Appeals notes that Coccomo's letters "were replete with aggressive, lewd, demeaning, and sexually discriminatory language." In a footnote, the Court states it will not repeat that language verbatim "to avoid further victimizing Riggins through continued dissemination of [Coccomo's] vile attacks." The Town consulted with the police about these letters, determining the letters did not violate any criminal laws, but ultimately the Town decided it could not take any further action against Coccomo. Plaintiff ultimately resigned her position.

The Second Circuit (Leval, Merriam and Khan) notes the standard guiding an employer's duty to protect its staff from outside harassers.Citing Summa v. Hofstra Univ., 708 F.3d 115 (2d Cir. 2013), for this proposition, the Court says, "we look to whether the Town’s 'response was immediate or timely and appropriate in light of the circumstances, particularly the level of control and legal responsibility' the Town had over Coccomo’s behavior."

Plaintiff can win the case because (1) while the Town brought Riggins' complaints to the police, those efforts focused on whether Coccomo could be criminally prosecuted, and not how to prevent further sexual harassment; (2) the Town otherwise took no steps that might dissuade Coccomo from further sexually harassing communications, (3) the Town did not undertake a Title VII investigation until after Riggins resigned; (4) no Town official told Coccomo that his communications constituted inappropriate sexual harassment and that he must stop; (5) the Town did not consult with an employment attorney on this matter until Riggins submitted her resignation letter, which meant she had to deal with this harassment for more than four years. 

While the Town argued that it had limited control over Coccomo, the Court of Appeals says the jury may find otherwise. "The Town did have exclusive control over its workplace and over the email system to which Coccomo sent many of the harassing communications. And the Town presumably could dictate the way in which Coccomo was permitted to communicate with Town employees." The Court of Appeals cites Turnbull v. Topeka State Hosp., 255 F.3d 1238, 1244 (10th Cir. 2001), which states, "The focus is not on the conduct itself but on the employer’s behavior in response; a hospital cannot control every act of its patients, but it does control the environment at large.” Therefore, the Court says, "the Town’s degree of control over Coccomo’s actions is not dispositive of whether the Town’s remedial actions were sufficient and appropriate." And, other than calling the police, it appears the Town did nothing to dissuade Coccomo to stop his abusive behavior.

Monday, June 17, 2024

What does "excusable neglect" mean under the Federal Rules?

I know that you know this, but it always bears repeating: deadlines are important. Miss and deadline and the case could go way for good. That is what happened here.

The case is Doe v. Board of Education of N. Colonie Central Sch. Dist., a summary order issued on June 17. This is a First and Fourteenth Amendment case with a few state law claims. After the district court dismissed plaintiffs' lawsuit without prejudice, citing their failure to meet pleading requirements, plaintiffs were given a deadline amend the complaint and make it right. This is common in federal practice: trial judges usually give the plaintiff at least one chance to amend a deficient complaint on the theory that cases should be resolved on the merits and not based on attorney error or procedural irregularities.

The dismissal order said plaintiffs had until April 27, 2023 to amend the complaint. But that date came and went without an amended complaint, and the district court dismissed the case altogether. A few weeks later, plaintiff filed a motion under Rule 60 to vacate the judgment of dismissal based on excusable neglect. The district court denied that motion, which brings the case to the Court of Appeals.

The Second Circuit (Lohier, Sack and Kahn) finds that the district court did not abuse its discretion in denying the Rule 60 motion. That means the case is over. To get around a dismissal like this, the plaintiff has to prove "excusable neglect." The main factor in determining "excusable neglect" is "the reason for the delay, including whether it was within the reasonable control of the movant." 

The concept of "excusable neglect" sounds forgiving, but that is not always the case. Plaintiffs' lawyer said there was excusable neglect because "the docket notifications containing the April 6 order were emailed to their counsel’s spam folder, rather than his inbox." The district court said this excuse was "highly questionable” as "the Plaintiffs have never plausibly explained why only the April 6 notifications were sent to counsel’s spam folder, while all other notifications were sent to his inbox." 

It is pretty scary to think that a court-related directive might find its way into your spam box. I just checked my own spam box to see if there is anything important there. In any event, that was not the only reason the Rule 60 motion was denied. The Court of Appeals says that counsel also admitted that "a part-time employee at counsel’s firm did receive the April 6 notifications in the employee’s inbox. In addition, the District Court noted that counsel had failed to comply with prior deadlines because he had been unaware of docket notifications.  Counsel also implied that he had not otherwise been monitoring the docket for over two months because he was under the impression [he was] waiting for a Decision from the Court.”  

What we learn from this is that counsel's failure to pay attention to the docket is not excusable neglect. That phrase refers to circumstances beyond plaintiff's control.

Thursday, June 13, 2024

Blanket policies at hospital for new mothers may violate Americans with Disabilities Act

This is a unique case. Plaintiff alleges she went to the hospital and they violated the Americans with Disabilities Act and Rehabilitation Act when they stereotyped her on the basis of her substance abuse disorder. The Court of Appeals has to determine whether this is a true disability discrimination case or a medical malpractice case which would have to be litigated in state court under a different set of legal standards. The Court clarifies the law in this area.

The case is Costin v. Glens Falls Hospital, issued on June 12. Plaintiff went to the hospital to have a baby. Plaintiff told the hospital that she was taking Subutex, as prescribed by her doctor, for substance abuse disorder, but that she was no longer abusing any illicit opioids. The nurse told plaintiff that the hospital drug tests all pregnant women who take medication like this and the hospital also had a policy of reporting all new mothers using Subutex to Child Protective Services for potential child abuse. The hospital also denied plaintiff an epidural, accelerated her labor, failed to discharge the baby right away, prevented skin-to-skin contact between mother and baby, and did not explain treatment alternatives.

How do we sort all of this out? Courts hold that many civil rights case are actually medical malpractice cases. The leading case on this issue is McGugan v. Aldana-Bernier, 752 F.3d 224 (2d Cir. 2014), which holds that medical treatment can violate the ADA when decisions are "pejorative," meaning decisions are made based on irrelevant criteria and/or irrational bias. 

Plaintiff's substance abuse disorder qualifies as a disability under the ADA and the Rehabilitation Act. Under McGugan, the blanket policies against new mothers, relating to reporting them to CPS and mandatory drug tests, may violate the ADA. The problem for the hospital is that these may be blanket policies that apply to all mothers in plaintiff's situation. That may give rise to an ADA violation.The other matters about which plaintiff complained, including the epidural denial, are really medical malpractice claims, the Court of Appeals (Jacobs, Lohier, and Livingston) holds. 

As a side note, the Court holds plaintiff has standing to bring this case. Plaintiff attested that she plans to return to the hospital in the future, and that is enough. The Court also notes in a footnote the "happy news" that plaintiff is pregnant again, which further proves she will return to the hospital in the future.

Wednesday, June 12, 2024

Court of Appeals allows jury to hear threats against postal employees

The Court of Appeals has issued an good old-fashioned evidentiary ruling that applies the settled rules guiding relevance and admissibility. It arises in a criminal case where the defendant was accused of making threats relating to his employment with the Post Office.

The case is United States v. Garnes, issued on May 28. After the defendant was fired, he spoke to the Department of Labor about his unemployment benefits. Those conversations led to an indictment alleging defendant had threatened to injure another person. During the call, the Government alleged, defendant threatened to assault and murder two Post Office employees after he was told he did not qualify for unemployment benefits. 

What did defendant say: the Government claims he said, "If I go back to the post office, I'm gonna shoot somebody," and other similar comments. Prior to trial, defendant's attorney successfully moved to exclude certain other statements that mentioned his prior time in prison and that it would not bother him to be in jail. Defendant argued these were not threatening statements but, instead, "poorly phrased attempts . . . to characterize the absurdity of his predicament; one where it is preferable, from an economic standpoint, to be incarcerated than to live as a free man." The trial court excluded these statements as more prejudicial than probative.

The Court of Appeals (Lynch, Nardini and Kahn) reverses the trial court and says the jury can hear the jail comments, which are relevant to the charge that he threatened to assault or murder postal employees. Here is the reasoning:

the five statements made by Garnes that repeatedly refer to, and indeed overstate, his criminal history, at a minimum have a “tendency” to make it more probable that the threatening language would convey to listeners that they had something to fear, and that Garnes made those statements with an awareness, and even with the intention, that he would create such fear. See Fed. R. Evid. 401. A jury could find that Garnes’s statements about his history of criminal acts, his past experiences in jail and prison, and his comfort with returning to jail would convey to a reasonable listener a sense that Garnes was willing and able to act on his violent words, and that he made those statements in a conscious attempt to make his threats to shoot and kill employees of  the DOL and USPS more credible.

While the defendant claims the statement create the potential for unfair prejudice, the Court of Appeals disagrees. The Court notes that the statements "may create some potential for unfair prejudice," but "the five statements are part of the 'res gestae,' the narrative the government rightly seeks to tell at the guilt phase of the trial." Defendant's exaggerated statements about his criminal record are a part of that: the jury may find the stretched the truth about his jail time in order to make his threats more credible.

Friday, June 7, 2024

Reverse gender discrimination case under Title VII is dismissed

This plaintiff alleges he was fired from his position on the basis of his gender. The case is dismissed because the record shows he was really fired for setting up a fake bank account in his brother's name. Plaintiff tries to argue he was singled out for disparate treatment, but the Court of Appeals finds his "comparators" are not really comparators.

The case is Carter v. TD Bank, NA, a summary order issued on June 4. It all started when plaintiff's brother visited a TD Bank branch in Florida and told the staff that several accounts had been opened in his name without his knowledge or authorization. An investigation followed. The bank determined that plaintiff had opened up the accounts as a scam. The investigator determined that plaintiff's defense was not plausible - plaintiff said his brother must have forgotten that he had opened the accounts only five days earlier. The investigator also thought that plaintiff had forged his brother's name on the new account documents. 

If setting up a false bank account is not grounds for termination, then I don't know what is. But plaintiff said the real reason was gender discrimination because two women were not fired despite engaging in fraudulent activity. One comparator was negligent in failing to detect fraudulent paperwork submitted by a customer. The other woman was found to have committed an act of dishonesty that, according to plaintiff, should have resulted in his termination. 

Are these legitimate comparators? The Court of Appeals' leading case on this issue is Graham v. Long Island Railroad, 230 F.3d 34 (2d Cir. 2000), which says the comparators must be "similarly situated," or subject to the same workplace standards as the plaintiff. The comparators must also have engaged in comparable conduct.

Not this case, the Court of Appeals (Jacobs, Sack and Sullivan) holds. The first comparator was only negligent in her misconduct. She did not engage in intentional fraud. The other comparator was not subject to the same workplaces standards as plaintiff. The Court finds that no reasonable jury could find these two women were comparable to plaintiff. Without additional evidence of gender discrimination, the case is dismissed. 

Wednesday, June 5, 2024

COVID vaccine-related disability discrimination claim fails

We have another COVID-19 vaccination case in the Second Circuit, this one alleging that a medical contractor fired the plaintiff in violation of the Americans with Disabilities Act after he refused to take the vaccine. Plaintiff argued that his employer regarded him as disabled and then retaliated against him after he objected to the vaccine mandate. Plaintiff loses the case.

The case is Sharikov v. Philips Medical Systems MR, Inc., issued on June 4. Plaintiff worked in defendant's Latham, N.Y., office. After defendant began implementing COVID-19 health measures, including masking, glove-wearing, screening, etc., it told its employees that it had to comply with a federal vaccine mandate for federal contractors like Philips Medical Systems. Employees were told they would have to resign if they did not comply with the mandate. Eventually, the federal mandate was put on hold due to court rulings, but defendant continued to adhere to local vaccine mandates. Plaintiff objected to the mandate and claimed he was being discriminated against. In December 2021, plaintiff field an EEOC charge and also sent a missive to defendant's global ethics complaint system, claiming that defendant was

regarding me as having a disability (an impaired immune system and an impaired respiratory system) without any diagnosis or individualized assessment and has also made a record of such disability by misclassifying me as having, in ADA terms, a mental or physical impairment that substantially limits one or more major life activities. My employer is also coercing me to submit to medical examinations and interventions as accommodations ("mitigation measures") without any informed consent.
Plaintiff was eventually fired and his departure was classified a voluntary resignation. 

The Court of Appeals (Livingston, Kearse and Chin) holds that plaintiff's discrimination claim fails for the following reason:

1. Plaintiff's "regarded as" disabled claim under the ADA is dismissed because defendant's vaccine mandate applied to all employees, not just plaintiff, and the company imposed the mandate pursuant to federal rules and also to protect employees and customers from infection. The Second Circuit holds that a plaintiff is not "regarded as" disabled when he is terminated for not complying with an office-wide vaccination mandate. Put another way, the company did not regard plaintiff as disabled because he was not singled out for the mandate on the basis of any perceived disability. "Sharikov does not explain how adopting measures to prevent the spread of a communicable disease implies an impairment, and he cites no case law equating prophylactic measures with assumptions of disability. Moreover, taken to its logical conclusion, Sharikov's position would subject many companywide safety policies to potential challenge under the ADA on the theory that such policies perceived all employees as disabled."

2. Nor is there a retaliation claim. Yes, plaintiff objected to the vaccine mandate and filed an EEOC charge, which is protected activity. But no, he cannot show, even under Rule 12 motion to dismiss standards, that he would not have been fired had he not lodged these objections. "The allegations of the Complaint instead make clear that Sharikov was discharged because he refused to comply with the company-wide policies first announced in October 2021, when all employees were told they had to be vaccinated or approved for an exemption by February 4, 2022 or be deemed to have resigned." The Complaint instead confirms that plaintiff was fired because he would not comply with a company-wide policy that applied to all employees.

Monday, June 3, 2024

NRA wins free speech case against State of New York

After the country endured another mass shooting -- this one in Parkland, Florida, which killed 17 students and staff members -- the Superintendent of the New York Department of Financial Services -- which regulates insurance companies and financial services companies -- sent a letter to organizations that administered insurance policies to National Rifle Association members. That letter and related comments form the basis for this First Amendment lawsuit that the NRA filed against the State of New York. The Supreme Court says the NRA has a case.

The case is NRA v. Vullo, issued on May 30. Vullo was the Superintendent. The letter mentioned the social backlash that the NRA was facing in the aftermath of the Parkland shootings and that businesses were severing their ties to the NRA as a result. In the "Guidance Letters," Vullo urged the DFS-regulated entities to evaluate and manage their risks, including reputational risks, from their relationship with the NRA, and to review any relationships they have with the NRA or similar gun-rights organizations. Three such entities, including Lloyd's, shortly thereafter entered into consent decrees with the State over allegations that they had violated regulations in providing insurance coverage for intentional acts, among other things. Vullo and Governor Cuomo then issued a press release urging insurance companies and banks in New York to discontinue their relationships with the NRA. 

The Supreme Court rarely takes up a case like this, alleging that governmental directives or guidance letters might violate the free speech rights of a private organization. In 1963, the Court held in Bantam Books v. Sullivan, that the government cannot attempt to coerce private parties in order to punish or suppress views that the government disfavors. The NRA case provides another opportunity to develop this area of the law. 

The general rule is that, to state a claim, the private organization must assert that, in context, the message would be reasonably understood to convey a threat of adverse government action in order to punish or suppress free speech. That the NRA was not the recipient of Vullo's guidance letters is of no moment in this analysis. The Court holds that the NRA states a free speech claim because (1) Vullo has regulatory authority over the insurances companies that did business with the NRA, and (2) Vullo had investigated Lloyd's over insurance-related violations and (3) told insurance executives that DFS had been investigating insurance companies and "was less interested in pursuing those infractions unrelated to any NRA business so long as Lloyd's ceased providing insurance to gun groups, especially the NRA." Vullo also told these entities that she would focus her enforcement actions solely on the organizations with ties to the NRA and ignore other syndicates writing similar policies. This was a thinly-veiled threat, the Supreme Court unanimously holds, and the NRA was the target. 

Writing for the Court, Justice Sotomayor reverses the Second Circuit (where she sat prior to her nomination to the Supreme Court). Here is the heart of the analysis:

As alleged, Vullo’s communications with Lloyd’s can be reasonably understood as a threat or as an inducement. Either of those can be coercive. As Vullo concedes, the “threat need not be explicit,” and as the Solicitor General explains, “[t]he Constitution does not distinguish between ‘comply or I’ll prosecute’ and ‘comply and I’ll look the other way,’” So, whether analyzed as a threat or as an inducement, the conclusion is the same: Vullo allegedly coerced Lloyd’s by saying she would ignore unrelated infractions and focus her enforcement efforts on NRA-related business alone, if Lloyd’s ceased underwriting NRA policies and disassociated from gun-promotion groups.