Plaintiffs cannot sue to enforce housing regulation

Disabled plaintiffs in New Haven sued the Housing Authority of New Haven for instituting and failing to correct policies that violated their right to certain reasonable accommodations. The Court of Appeals affirms the district court's order dismissing the case because the regulations under which plaintiffs bring this action cannot be enforced under 42 U.S.C. sec. 1983.

The case is Taylor v. New Haven Housing Authority, decided on May 4. The Second Circuit's ruling is quite short, particularly for a published opinion. The Court of Appeals (Kearse, Miner and Chin) is so impressed with the district court's thorough reasoning that the Second Circuit simply adopts Judge Arterton's reasoning in pinpoint fashion, stating, "We adopt the district court's carefully considered and thorough discussion of these issues. See, Taylor v. Housing Authority of New Haven, 267 F.R.D. 36, 40-47, 52-54 (D. Conn. 2010)." Why reinvent the wheel?

The district court ruling tells the story. Plaintiff claimed that the housing authority failed to provide them reasonable accommodations under a regulation that requires private landlords to, i.e., encourage families to locate an available accessible dwelling unit and approve a family request for certain rent exceptions. Plaintiffs' claim draws from a regulation, not an actual statute. There is a difference. You may have to go to law school and take an administrative law class to really understand this, but regulations cannot give rise to a private claim distinct from that conferred by the statute itself. In addition, under Alexander v. Sandoval, 532 U.S. 275 (2001), "language in a regulation may invoke a private right of action that Congress through statutory text created, but it may not crate a right that Congress has not." In other words, agencies that create the regulations intended to enforce statutes "may play the sorcerer's apprentice but not the sorcerer itself."

This case failed in the district court because the Rehabilitation Act of 1973 -- a federal statute -- speaks broadly in terms of access to benefits but does not speak in terms of specific components of a benefit, program or activity. So, even though the regulations that enforce that statute, may provide that level of specificity, they do not create a private cause of action. The regulations are certainly there for a reason, to provide guidance in the provision of Section 8 benefits, and they certainly may help the disabled in their public housing. But the regulations at issue here, 24 C.F.R. sec. 8.28(a), cannot give rise to this lawsuit.

How not to write a Rule 68 offer

All federal litigators should know about Offers of Judgment under Rule 68. The defendant offers to settle the case, and if plaintiff wins the case but recovers less than the Rule 68 offer, then plaintiff pays the defendants' costs and forfeits certain attorneys' fees. A shrewd Rule 68 offer makes the plaintiff think twice about litigating the case any further. Of course, this all requires that the defendant's lawyer serve a proper Rule 68 offer.

The case is Barbour v. City of White Plains, 07 Civ. 3014 (RPP), 2011 WL 2022884, decided by district judge Patterson on May 24. Three plaintiffs sued police officers under 42 U.S.C. sec. 1983 for civil rights abuses. Shortly before trial, defense counsel served on plaintiffs a Rule 68 offer, amounting to $10,000 for each plaintiff. Plaintiffs took the money, and their attorneys moved for attorneys' fees as prevailing parties. They recover nearly $300,000 in fees. How did this happen?

Most Rule 68 offers state that the settlement offer includes attorneys' fees. Not this one. The offer also did not specify that it included costs. It should have, if that was the defendants' intent. Citing Marek v. Chesny, 473 U.S. 1 (1985), Judge Patterson writes, "if defendants had intended its offers to include costs and attorneys fees, it offers of judgment should have so stated." Not only that, but the judgment signed by Judge Patterson said that judgment was entered in each plaintiffs' favor, "with the costs accrued, including reasonable attorneys' fees, in an amount to be determined by the Court."

Defendants' counsel claimed to be surprised when plaintiffs next moved for attorneys' fees. He argued that the Rule 68 offer was not intended to compensate plaintiffs for all their time expended on the case, and that, at best, the attorneys' fees should have come out of the $10,000 judgment for each plaintiff. No dice, Judge Patterson says. That's an unreasonable interpretation of the Rule 68 offer, all the more so because defendants' counsel drafted the offer. He should have been more careful. Judge Patterson cites a SDNY case from 1989 that's on all fours: "Defendant's counsel simply erred in failing to protect against an acceptance of the offer followed by a request for costs, including attorneys' fees."

This amounts to a poorly-drafted Rule 68 offer that costs the defendants nearly $300,000, in part due to the huge expenditure of time that plaintiffs' counsel reasonably spent in litigating the case and preparing for trial that was only weeks away from the offer. What should have been a $30,000 settlement costs defendants nearly ten times that amount. If defense lawyers are reading this, let this be a lesson to ya. Be careful in writing up those Rule 68 offers.

Circuit remands attorneys' fees case yet again

In December 2010, the Court of Appeals resolved an attorneys' fees appeal, remanding the case to the district court to reconsider the fee application because the prevailing attorney did not provide the court with contemporaneous time records, a requirement under Second Circuit precedent.

In that case, Scott v. City of New York, the Second Circuit noted that, in New York State Association for Retarded Children v. Carey, 711 F.2d 1136 (2d Cir. 1983), it held that "all applications for attorneys' fees ... should normally be disallowed unless accompanied by contemporaneous time records indicating, for each attorney, the date, the hours expended, and the nature of the work done." This language was a problem for Thomas Puccio, Esq., the attorney in Scott, who was entitled to more than $500,000 in fees for his work on a collective action case under the Fair Labor Standards Act. For some reason, his time records were not contemporaneously maintained, and in remanding the case to the district court, you wondered if counsel would get no money at all. The Court of Appeals in December 2010 provided the governing standard for the district court:

While we can imagine rare circumstances where an award of fees might be warranted even in the total absence of contemporaneous records — such as where the records were consumed by fire or rendered irretrievable by a computer malfunction before counsel had an opportunity to prepare his application — the circumstances justifying such an exception would have to be found by the awarding court and laid out in sufficient detail to permit review of the justification on appeal.

This is a tough standard to meet. Did counsel's office burn down? Did his computer malfunction? No. I thought counsel would get no attorneys' fees, and that $515,000 would fly out the window, but district judge Scheindlin again awarded counsel his attorney's fees on remand. In Scott v. City of New York, 2011 WL 867242 (SDNY March 9, 2011), the district court stated that "there must be an exception under Carey based on my personal observation of Puccio and his contribution to this extraordinarily lengthy and complex litigation." Here is the crux of Judge Scheindlin's reasoning:

Puccio, who is primarily a criminal defense attorney, is a highly respected member of the bar. Puccio, and his outstanding reputation as a skilled litigator and effective advocate, are well known to this Court. It would be fundamentally unfair and inequitable to deprive Puccio of an already deeply discounted fee award where this Court personally observed the vital and integral role he played in this protracted FLSA action.

I personally observed Puccio function as lead trial counsel in a trial that lasted sixteen days, from 10:00 a.m. to 4:30 p.m. each day. Puccio was present for the entire trial and he gave the closing argument. When a modest travel allowance is added, the trial alone accounts for approximately 120 hours of in-court work. In addition, Puccio was present for most of the numerous in-person and telephone conferences that preceded the trial. I also received many letters and faxes from Puccio throughout the course of the litigation.

While Puccio has not presented this Court with the type of exception noted by the Second Circuit - e.g., a fire or a computer malfunction - fundamental concepts of fairness mitigate against the denial of any fee under the circumstances presented here. I surely appreciate the need for a bright line rule requiring the submission of contemporaneous time records. And I am loathe to create a “personal observation” exception. Nonetheless, given Puccio's extensive involvement in the case for more than six years, his severely reduced fee award, his predominantly criminal practice, and his role as lead trial counsel, no fee would be fundamentally unfair. In sum, despite the fact that Puccio did not submit contemporaneous time records in support of his fee application, I conclude that the deeply discounted original fee award of $515,179.28 is reasonably supported by the record in this case and my personal observation of Puccio's efforts throughout this litigation.

This is common sense, but is it appropriate under the Second Circuit's test in this very case? Not really, the Second Circuit held on May 24, taking up the case again. The Court of Appeals reminds us that the failure to provide contemporaneous time records may be excused only in extreme cases. The district court's equitable ruling in counsel's favor will not cut it, as that kind of judgment is not fair to lawyers who are not well-known to the court or do not otherwise have stellar reputations.

On the other hand, the Second Circuit (Miner, Katzmann and Hall) finds that the district court may award fees in a case like this if it is clear from the record that counsel did try the case and also attended court conferences. To that end, while the "personal observation" exception does not work under the Second Circuit's stringent standard, Judge Scheindlin was in the right ballpark. The Second Circuit says, "an award based entirely on the district court judge's personal observation and opinions of the applying attorney ... is contrary to Carey and must be vacated." Yet, we know the lawyer did try the case. So, the Court of Appeals says, "entries in the official court records (e.g., the docket, minute entries, and transcriptions of proceedings) may serve as reliable documentation of an attorney's compensable hours in court at hearings and at trial and in conferences with the judge or other court personnel. Where the court's docket reflects that Puccio was in the courtroom participating in trial or was in chambers in conference with the judge and other counsel, these entries, comparable to contemporaneous time records, may be effective substitutes for Puccio's own contemporaneous records." But the Second Circuit says it does not want an attorneys' fees award based on the kind of conjecture that the district court engaged in, i.e., awarding fees based on 120 hours of trial time.

The case is remanded once again to the district court to recalculate counsel's attorneys' fees. It looks like counsel will not get the $515,000 in attorneys fees that the district court had originally awarded him. The award will be limited to counsel's work that is reflected in the district court's docket entries. But he will get something out of this case, and something is always better than nothing.

Second Circuit revives age discrimination claim

The Court of Appeals will vacate summary judgment in an employment discrimination case if the employer's reasons for firing the plaintiff are pretextual (or knowingly false) and there is something discriminatory about the case. In this case, an age discrimination case is revived because there was pretext all over the place, along with some ageist jokes.

The case is O'Reilly v. Marina Dodge, a summary order decided on May 19. O'Reilly was a salesman in the service department for Marina Dodge. This 58 year-old was replaced by a 36 year-old. Management said that "Mr. Kaiser would be a better option than [O’Reilly] as a result of its prior experiences with Mr. Kaiser and Plaintiff O’Reilly’s continued disorganization, lackadaisical approach to his job performance, failure and refusal to embrace new initiatives to increase profitability, and his negative attitude about the workplace.” Here is why O'Reilly wins the appeal:

1. There is no contemporaneous evidence of plaintiff's poor job performance. No negative performance reviews or write-ups and, instead, management praised his performance and gave him performance bonuses. The only evidence of poor performance comes in the form of affidavits submitted by management in support of the summary judgment motion.

2. Defendant said that plaintiff had a negative and lackadaisical attitude, but the evidence suggests that he was always a good worker for many years despite his disorganization. The Second Circuit (Parker, Pooler and Lohier) says, "Supervisor Lootens stated that “profitability expectations” became greater in 2006 and 2007, and that a more 'organized' worker would be better, but Lootens does not explain why O’Reilly was able to meet the previous profitability goals but not the new goals. Indeed, there is no evidence that O’Reilly ever was disciplined for not bringing in enough work or for being disorganized, nor is there evidence that he was spoken to about these matters. A reasonable jury could find that these post hoc explanations were pretextual."

In the context of O'Reilly's alleged bad attitude, the Court of Appeals takes into account the ageist jokes in the workplace that suggested co-workers thought he was senile and forgetful and made fun of his bald head. The Court writes, "Although it may be a close factual call, a reasonable jury could find that the employees – including President Gabriele and Supervisor Lootens, who participated directly in the decision to fire O’Reilly – were relying on stereotypes of older people when they 'teased' O’Reilly."

3. And speaking of ageist stereotypes, defendant said it fired plaintiff because he resisted new initiatives. In fact, the evidence suggests that O'Reilly did take the lead on some new initiatives and, in any event, this critique may be stereotypical. The Court writes, "Marina Dodge’s claim that O’Reilly resisted 'new initiatives' while at Marina Dodge must be evaluated in light of the arguably ageist jokes O’Reilly suffered at Marina Dodge. A common stereotype of elderly people is that they resist change and new approaches. A reasonable jury could find that Marina Dodge’s claim that O’Reilly resisted 'new initiatives' was a pretext for Marina Dodge’s desire for a younger employee to interact with customers and was based on Marina Dodge’s unfounded assumption that a younger (36-year old) employee would better implement 'new initiatives' than an older (almost-59-year old) employee."

Finally, defendant raised an argument that is common to these cases: that it did not engage in age discrimination because older people still worked there after plaintiff was fired. The Court of Appeals is not buying it. "Although people above age 59 worked at Marina Dodge after O’Reilly was fired, none worked in the Service Department. A reasonable jury could find that Marina Dodge did not (and does not) believe that older people are unsuited for all work at Marina Dodge – but that Marina Dodge believed that such people are unsuited for high-pressure sales work in the Service Department, including convincing customers to pay for more (and more expensive) maintenance or repairs. Age discrimination is illegal, regardless of whether it is targeted at certain jobs."

Court of Appeals grants habeas petition, grants defendant a new trial

Ellis Wood was charged with hiring someone to kill the guy who owned a travel agency. When the police took Wood into custody, they began asking him questions, before he said, "I think I should get a lawyer." The police a few minutes later resumed questioning Wood on video, when he made some incriminating statements that he probably would not have made had an attorney been present to tell Wood to shut his mouth. The jury convicted Wood, and the state appellate courts affirmed. Hence the habeas corpus petition in federal court.

The case is Wood v. Ercole, decided on May 4. This case presents a battle of the titans. Judge Lynch wrote the majority opinion. Judge Livingston wrote the dissent. Both were former Assistant U.S. Attorneys who taught at Columbia Law School. Lynch wins out because district judge Sessions signs onto his opinion. Wood gets a new trial because the police should have stopped questioning Wood after he said he wanted a lawyer, prompting Judge Lynch to write a lengthy footnote about the linguistic meaning of the word "think" and whether it is too ambiguous to place the police on notice that they they had to honor the Sixth Amendment.

While the police violated the Sixth Amendment in ignoring Wood's request for counsel, the question is whether this was harmless error. It was not. The admissions that Wood made on video most likely got him convicted, the Court of Appeals says, because the two corroborating witnesses at trial were shaky and had serious credibility problems. One witness, the triggerman, was "the archetypal miscreant" with a long criminal record who lied to the investigators in this very case and committed perjury in a prior case. He also escaped life in prison for his testimony against Wood. His testimony about his agreement with Wood to kill the victim was therefore shaky. The other corroborator was Wood's ex-girlfriend, who claimed that Wood told her he played a role in the killing. She also had credibility problems; she testified to avoid prosecution for her role in a criminal dispute that allegedly motivated Wood to kill the travel agency owner in the first instance. She also faced deportation as a nonlegal resident and she lacked direct knowledge of the murder and did not even think Wood had a role in the killing.

So, it was Wood's confession that got him convicted, not the corroborators who were easy targets on cross-examination. While the Court of Appeals does not even think Wood's confession is that convincing to start with, it did bolster the prosecution's case, and the prosecutor highlighted the video confession in summation. On this record, the Sixth Amendment violation was not harmless at all, and the habeas petition is granted.

For ADA regulatory mavens only

Under the Americans With Disabilities Act, municipalities have to provide special transportation services to the disabled, particularly for those who need to be picked up and dropped off at home. In Nassau County, this is done through "Able-Ride," which provided door-to-door transportation services. When the County in 2010 modified this service to deal with the budgetary crisis, it got sued for not consulting the public on these cutbacks.

The case is Abrahams v. MTA Long Island Bus, decided on May 5. ADA regulations say that the Department of Transportation has to allow for public participation in the ongoing "development and assessment" of paratransit services. Suing under 42 U.S.C. sec. 1983, plaintiffs argue that defendants violated this mandate. They cannot do so.

Section 1983 allows you to sue if the government has violated a federal civil right. There are limits to this. Under Alexander v. Sandoval, 532 U.S. 275 (2001), the Court said that Congress must intend that federal statutes allow for a private legal claim. In addition, plaintiffs may sue to enforce regulations created to enforce the statute, but to do so, the regulation must merely apply and not expand the statute. This is a subtle but important (and very complicated) distinction that dooms this case.

While the portion of the ADA that gave rise to the regulation may be enforced in a private right of action, the regulation at issue here cannot. The regulation that requires ongoing public participation in the management of paratransit services does not merely enforce that portion of the ADA but, instead, imposes obligations not found in the statute. The Court notes, "the statute requires public participation in connection with the development and submission of a public entity’s initial paratransit plan and annual plan updates. But that is all § 12143 requires in terms of public participation; it does not require any other ongoing form of public participation." Moreover, "the 'ongoing requirement' of 49 C.F.R. § 37.137(c) has a broader application than the implementation of an initial plan or the submission of annual updates." The regulation expands upon the ADA and does not merely enforce it. This means the regulation cannot be enforced under Section 1983.

Win some, lose some under FLSA

The Second Circuit splits the baby in a FLSA case where the plaintiff worked for Black and Decker and was denied certain overtime pay in connection with his work at Home Depot.

The case is Kuebel v. Black & Decker, decided on May 5. Keubel was responsible for setting up Black & Decker displays at Home Depo. He frequently worked overtime because he could not get all the work done in a 40 hour week. Since he worked out in the field, he had to use a Personal Digital Assistant to let management know when he came and went from Home Depot stores. You had to synch the PDA which bounced that information off satellites over to his superiors. He did that at home after work, along with other work-related matters that took up about 30 minutes to an hour each night.

Since Keubel did all this work at home, he wants compensation for his commute. He argues that these tasks were indispensable to his principal job activities, and his workday therefore began and ended at home and encompassed his morning and evening drives to the Home Depot outlets. Good try, but no cigar, the Court of Appeals (Parker, Livingston and Lynch) says. It is true, under Second Circuit precedent, that "periods of time between the commencement of the employee's first principal activity and the completion of his last principle activity on any workday must be included in the computation of hours" to which he is entitled to compensation. But ordinary commutes are not compensable under the FLSA, and "the fact that Kuebel performs some administrative tasks at home, on his own schedule, does not make his commute time compensable any more than it makes his sleep time or his dinner time compensable." Since plaintiff had flexibility in deciding when to complete his daily administrative responsibilities of checking email and voicemail and synching his PDA, among other tasks, he could have done this right before leaving work, as opposed to at night, when he got home. As company policy did not require him to do this immediately after returning home, he does not get any compensation for the commute.

On the other hand, Kuebel's complaint is reinstated on his claim that he was denied overtime for hours that he did not record on his time sheets. The district court rejected plaintiff's claim because he falsified his records to reflect that he did not work overtime and therefore could not prove his damages with precision. The problem with this reasoning is that, according to Keubel, his superiors told him to omit the overtime hours from his time sheets because the company did not want to pay overtime. They told him "you're only supposed to mark forty on your timecard because we can't afford overtime." Acknowledging the realities of life, in addition to the fact that companies cannot delegate their obligation under the FLSA to maintain accurate records of their employees' hours, the Second Circuit says:

At least where the employee’s falsifications were carried out at the instruction of the employer or the employer’s agents, the employer cannot be exonerated by the fact that the employee physically entered the erroneous hours into the timesheets. As the district court emphasized, Kuebel admits that it was he who falsified his timesheets, notwithstanding B&D’s official policy requiring accurate recordkeeping. But his testimony — which must be credited at the summary judgement stage — was that he did so because his managers instructed him not to record more than forty hours per week. He specifically testified that at company meetings and during discussions with one of his supervisors, it was conveyed to him that he was not to record overtime no matter how many hours he actually worked. In other words, Kuebel has testified that it was B&D, through its managers, that caused the inaccuracies in his timesheets.