2d Circuit weighs in on the City's pandemic legislation intended to help commercial tenants

The City of New York enacted various laws in the wake of the Covid-19 pandemic intended to protect commercial tenants from being evicted because they were unable to pay the rent. The concern was that, without these protections, the businesses would have to close up for good and New York City would never recover economically from the pandemic. Two of those measures came before the Second Circuit.

The case is Melendez v. City of New York, decided on October 28. The first law prevents commercial landlords from harassing or threatening their tenants because of their actual or perceived status as a person impacted by Covid-19. The landlords argue this law violates the First Amendment's free speech guarantees because it might prohibit the collection of rent. The Court of Appeals disagrees.

The anti-harassment provision does not define "threatening." The Court (Raggi, Cabranes and Carney in dissent on the contracts clause issue) uses the dictionary definition of "threatening" in finding the law would not make it illegal to make a routine request for rent because that would not be an illegal means to seek payment for delinquent rent. Nor would such a routine request signal an intent to inflict harm on the tenant. Since the plaintiffs do not intend to pursue unlawful remedies in collecting rent, they cannot claim the law violates the First Amendment. The Rule 12(6)(6) motion to dismiss that claim was therefore granted.

The second law under review says that commercial tenants do not have to pay back rent ever if they were unable to do so during a 16-month window. The idea was to ensure that city businesses do not face the loss of their businesses and face financial ruin or bankruptcy because the pandemic. This law would allow them to recover financially and save their businesses once the pandemic subsides.

The landlords challenge this law under the Constitution's contracts clause, a relatively obscure provision of the Constitution, which says that "no State shall pass any law impairing the obligation of contracts." Judge Raggi provides an extensive review of contracts clause jurisprudence over the years, noting that courts used to interpret it literally, without any balancing test. But courts have since interpreted the clause with more flexibility. As now understood, the contracts clause "allow[] states to protect the public welfare" in cancelling some contracts, so long as the state can identify a legitimate and significant public purpose through reasonable and appropriate means. Courts like balancing tests in applying constitutional provisions that have absolute language, and the contracts clause is no exception.

Under this test, the landlords may proceed with their constitutional challenge to the rent-cancellation law, and the district court should have denied the Rule 12(6)(6) motion. The rationale here is that the law "appears permanently and unexpectedly to repudiate commercial lease guaratees for arrears arising over a sixteen-month period" such that they have suffered significant impairments of their contracts. In addition, While the law is motivated by a significant government interest, it is not clear that the City adopted the best means to protect tenants from financial ruin, as the law does not provide them temporary protection from paying back rent, but permanent protection, even if they never reopen their businesses. The law also protects tenants even if they do nothing in the public interest in generally ensuring functioning neighborhoods. Nor is the law necessarily based on need, as even businesses that might someday be able to pay their back rent are excused from doing so. In short, there may have been better ways for the City to protect tenants during the pandemic. The case returns to the district court to sort out these issues in discovery.

No Section 1983 claim for violating substance abuse patient confidentiality

Plaintiffs' lawyers will from time to time get phone calls over health care privacy. Sometimes you get a call because someone's HIPAA rights were breached in the unauthorized release of medical records. But the courts have already ruled that HIPPA does not provide a private right of action. There is no lawsuit under HIPAA for this. In this case, the Second Circuit considers another health records case under a different statute, also finding there is no claim.

The case is Schlosser v. Kwak, issued on November 2. Plaintiff was incarcerated in a Connecticut state prison before he was released on probation and began using illegal substances to deal with the withdrawals occasioned by running out of medication to treat his mental illness. He was sent to a counseling center for substance abuse treatment. When plaintiff's probation officers submitted an affidavit that mentioned his substance abuse treatment, a process that led to proceedings against him in state court for violating the terms of his probation, plaintiff sued under 42 U.S.C. 290dd-2(a), which prohibits public disclosure of substance abuse treatment.

Is there a case for the violation of this statute? The general federal civil rights law, Section 1983, provides damages for the violation of a federal right. But not every federal statute can give rise to a Section 1983 case. The Supreme Court has devised a formula for determining which statutes can predicate a Section 1983 lawsuit. We ask whether Congress intended that the federal statute creates personal rights that are enforceable through Section 1983. That's the rule in Blessing v. Firestone, 520 U.S. 239 (1997).

This statute cannot support a Section 1983 claim, the Second Circuit (Lohier, Leval and Sullivan) says. The Fourth and Sixth Circuits have already held as such. The Second Circuit adopts the reasoning in those cases, stating that nothing in the statutory language suggests that Congress had in mind the creation of individual rights for purposes of suing under Section 1983. Rather, "Congress was concerned primarily with  fostering programs aimed at curtailing our nation's staggering substance abuse problems." And, while Congress provided criminal sanctions for violating this law, it made no mention of any private enforcement mechanism.

Qualified immunity for police officers in fatal shooting case

A few days ago I wrote about a recent qualified immunity decision from the Supreme Court, which has been summarily reversing lower court rulings on this issue without oral argument, finding, on immunity grounds, that a Section 1983 plaintiff cannot bring an excessive force claim against the police. This is another such case.

The case is City of Tahequah v. Bond, issued on October 18. It happened in Oklahoma. The decedent's ex-wife called the police because Dominic was intoxicated, would not leave the home, and "it's going to get ugly real quick." When the police showed up, Dominic led them into the garage and he began fidgeting with something before he grabbed a hammer and held it in a manner suggesting he was going to swing it like a baseball bat or even throw it or charge the officers. The officers were six feet away. Dominic did not drop the hammer and the police shot and killed him.

The Tenth Circuit said the jury may find that the police shooting was excessive and the officers recklessly created the situation that led to the fatal shooting by cornering Dominic. The Supreme Court reverses without oral argument or extended briefing, holding that the law was not clearly-established that facts like this give rise to a Fourth Amendment violation.

Qualified immunity gets police officers off the hook if no prior case law suggests their actions were unconstitutional. That does not mean there has to be a case on all fours, but the prior case must come close. The point is that only the most incompetent public officials may be get sued. Otherwise, they get the benefit of the doubt.

What wins the case for the officers is that the Tenth Circuit cases that that court relied upon in rejecting qualified immunity are quite unlike this one. One case, Allen v. Muskogee, 119 F.3d 837 (10th Cir. 1997), involved a potential suicide victim whom the police shot and killed after they ran toward him and tried to wrest a gun from his hands. That is not this case, the Supreme Court says. Another Tenth Circuit case says in dicta that deliberate pre-seizure police conduct can give rise to an excessive force case. But that case is no good because the Tenth Circuit in that case held it had no jurisdiction to even hear the case. You see where we are going with this. The prior cases have to be a tight fit with this one.

Circuit weighs in on res judicata, the FLSA, and small claims court

This case looks at what happens when you sue someone in small claims court for your overtime money and then sue the employer in federal court under the Fair Labor Standards Act and the New York Labor Law. The Court of Appeals says the small claims action triggers claim preclusion principles. In other words, res judicata!

The case is Simmons v. Trans Express, LLC, issued on October 26. This case was originally argued in the Second Circuit in January 2020. The Court of Appeals certified this case for review by the New York Court of Appeals in April 2020 because the Second Circuit wanted a definitive state court ruling on the applicability of the New York Civil Court Act, which governs the preclusive effect of judgments rendered by a small claims court. That law says as follows:

A  judgment  obtained  under  this  article  shall  not  be  deemed  an adjudication of any fact at issue or found therein in any other action or  court;  except  that  a  subsequent  judgment obtained in another action or court involving the same facts, issues and parties shall be reduced by the amount of a judgment  awarded  under  this  article.

After the small claims court awarded Simmons $1,000 in her case against Trans Express for lost wages, she filed suit in federal court under the FLSA and the state Labor Law, under which she would most likely recover more damages. 

After the Second Circuit sent this case to the New York Court of Appeals for definitive ruling, the latter court said that, under the Civil Court Act, "ordinary rules of claim preclusion apply to the judgments of the small claims court." Claim preclusion is the same thing as res judicata, which is Latin for "the judgment in one court means you can't bring the same case in a different court," even if the second court might give you more money. In other words, one court to a customer.

With the case back in the Second Circuit, the court then applies traditional res judicata principles in determining whether Simmons can maintain the claim in federal court. She cannot. Prior cases have held that a small claims judgment from a wrongful discharge and defamation claim prevents the litigant from bringing a national origin discrimination claim arising from the same events in a different court. Another case holds that you cannot sue in one court for age discrimination when you've already sued for defamation in a different court. These holdings convince the Second Circuit (Sullivan and Bianco) that Simmons cannot maintain this federal action.

While Simmons argues that she actually sued in small claims court for wrongful discharge, making that case different from the federal action under the FLSA and NYLL, the Second Circuit says that, even if that were the case, we would still have claim preclusion, as both claims still arose from the same "transaction." 

What about the fact that Small Claims Court cannot award you more than $5,000, and the federal claims have a greater value than that? No matter, the Second Circuit says. Courts in New York have already held that "the small claims court's limited damages jurisdiction alters the preclusive effect of judgments."  

Supreme Court dismisses excessive force claim on qualified immunity grounds

The Supreme Court has issued another qualified immunity ruling that reverses a lower court decision that allowed an excessive force case to proceed against the police. The Court has been doing this for a number of years now, handing down qualified immunity decisions without oral argument, signaling that the lower courts are still allowing too many such cases to proceed.

The case is Rivas-Villegas v. Cortesluna, issued on October 18. It all started when the police got a 911 call stating that the mother's boyfriend was threatening people in the house with a chainsaw. The police arrived and the bad guy exited the house. So now we have a police confrontation. When he was 10-11 feet from the police, they saw a knife sticking out of his pocket. The bad guy appeared to reach for the knife, so the police twice shot him with a beanbag gun, whatever that is. The police officer then told him to get down, which he did. When another officer shouted out that the bad guy had a knife on him, an officer kneeled into his back for about eight seconds in order to seize the knife. 

The Ninth Circuit said the plaintiff-bad guy has an excessive force claim against the kneeling officer, but the Supreme Court reverses on qualified immunity grounds. Officers are entitled to this immunity when they do not violate clearly-established case law. Without clearly-established law, the officers are not on constructive notice they are violating the Constitution. Qualified immunity has been in the news lately, as legal commentators complain that it is quite difficult to win the case unless a prior court decision involves factual allegations that are nearly identical to the present case. Without clearly-established law, the officers cannot be sued and are therefore not accountable. A congressional effort to eliminate or limit this immunity recently failed.

The Supreme Court has been reversing lower court rulings without oral argument over the last decade or so in finding that the facts alleged by the plaintiff did not assert a clearly-established constitutional right. This is another such case. The Court unanimously says that even assuming we look to Ninth Circuit case law, there is no case from that Circuit that resembles this one. This case certainly looks like a close call on the facts so I don't know if the plaintiff could have won the excessive force trial in any event. He certainly was not a sympathetic plaintiff. They did say, after all, that he was threatening people with a chainsaw and exited the house with a knife.

The Court throws in a line that makes it clear that it has never told us exactly what body of case law governs the clearly-established inquiry. Is it appellate rulings from one of the 13 Courts of Appeal? Or is it Supreme Court authority? One of these days, the Court will resolve that issue. If the Court says you can only look to Supreme Court authority, that ruling will make it significantly harder for plaintiffs to win cases, I can tell you that.

No defamation claim against the New York Times

The Court of Appeals holds that a controversial writer cannot sue the New York Times for defamation arising from a series of articles in which the Times said he was "animated by race hatred," an "open white nationalist," and "anti-Semitic."

The case is Brimelow v. New York Times, a summary order issued on October 22. The Times published five articles in 2019 and 2020. The case is dismissed under Rule 12, so plaintiff has to satisfied the heightened Iqbal plausibility standard that the Supreme Court adopted in 2009 in determining whether the plaintiff states a viable claim. He does not, the Court of Appeals (Walker, Bianco and Menashi) says, because of another heightened legal standard: since plaintiff is a public figure, he has to plausibly allege that the Times acted with malice in describing him this way.

The Second Circuit has held that a public figure, in bringing a defamation claim, he "must plead plausible grounds to infer actual malice by alleging enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of actual malice." You cannot guess your way into a lawsuit. The Court wants facts that plausibly give rise to the elements of the claim. This may be a tall order if you are trying to prove the defendant had a malicious state of mind. 

Actual  malice  requires  that  the  Complaint  plausibly allege that the Times published the defamatory statements that form the basis of Brimelow’s claims with knowledge that [they were] false or with reckless disregard of whether [they were] false or not.” Plaintiff does not allege this. He claims the Times acted with malice because he had repeatedly denied being a white nationalist, which means the Times ran the articles knowing that its statements about him were false. But it is "well-settled that denials without more do not support a plausible claim of actual malice," the Court says, citing Edwards v. National Audubon Society, 556 F.2d 113 (2d Cir. 1977). At best, plaintiff alleges, the Times acted with journalistic negligence in writing the articles. Since negligence is not the same as "actual malice," the complaint fails to assert a claim, and the case is dismissed.

Court narrows the scope of religious harassment statute

It took the Court of Appeals two years to resolve this case, which interprets the Freedom of Access to Clinic Entrances Act, which makes it illegal to harass, injure, or interfere with someone who is exercising his religion "at a place of religious worship." The question here is what is a "place of religious worship"?

The case is Zhang Jungrong v. Chinese Anti-Cult Worldwide Alliance, Inc., issued on October 14. Plaintiffs are adherents of Falun Gong, a modern spiritual practice originating in China. They set up five tables on a sidewalk in Flushing, Queens, protesting the Chinese government's persecution of members of Falun Gong. They claim that defendants harassed them at the sidewalk tables. Defendants regard the plaintiffs as a cult and object to their views (some of which involve not taking medication for illness, and alien visits to Earth). The altercations at the heart of this case got pretty nasty: tables were knocked over, displays were torn down, people were threatened and assaulted, etc. Hence this lawsuit.

Are the table set-ups "places of religious worship"? The Second Circuit (Carney, Walker and Leval) says they are not. The statute does not answer this question directly, so the Court has to review dictionary definitions and legislative history. The dictionary definition could go either way, as "place of worship" "is susceptible to more than one plausible interpretation. The dictionary says this phrase  is defined as "a place where believers regularly meet for religious worship, esp. a building designed for or dedicated to this purpose." That does not help us, so the Court looks to the legislative history.

The legislative history shows that that Congress in enacting the law in 1994 contemplated that the statute prohibits harassment and threats at "a place recognized or dedicated as one primarily used for religious worship." That can include a fixed location, but other places as well. As applied to this case, the tables don't qualify for protection under the statute. They are not a place "whose primary purpose is religious worship." Rather, these tables are "a site for political protest activity against the Chinese Communist Party, even if some incidental religious practice took place at the tables."

If you are a Commerce Clause fan, Judge Walker's concurrence is for you. He believes that Congress has no authority to protect the tables as a place of religious worship because the Supreme Court has already held that the Commerce Clause does not reach "noneconomic, violent criminal conduct . . .  based solely on the aggregate effect on interstate commerce." The Court said that in United States v. Lopez and United States v. Morrison, in 1995 and 2000.