Rule Requiring Timely Filing of Notice of Appeal Strictly Enforced

On June 18, 2014, the Second Circuit issued a decision in Martinez v. O’Leary, Docket No. 13-2967, showing once again that failure timely to file a notice of appeal is fatal to an appeal.

In Martinez, the Second Circuit dismissed an appeal from the EDNY, reaffirming the strictness of the rules regarding timely filing a notice of appeal. As it explained:

Filing deadlines are mandatory and jurisdictional. If an appellant does not file a timely notice of appeal, this Court lacks jurisdiction to hear the appeal.

Here, the judgment was entered Wednesday, July 3, 2013. Therefore, the notice of appeal had to be filed no later than Friday, August 2, 2013. In fact, the notice of appeal was not filed until Saturday, August 3, 2013 — 31 days after the district court judgment was entered.

(Internal citations and quotations omitted). One day late. And a weekend day at that. But as this decision shows, the rule is clear and the courts enforce it strictly.

“Least Sophisticated Consumer” Rule of FDCPA Does Not Necessarily Help Sophisticated Consumer

On June 19, 2014, the Second Circuit issued a decision in Nicholson v. Forster & Garbus LLP, Docket No. 13-2394, interpreting the “least sophisticated consumer” rule of the FDCPA.

In Nicholson, the Second Circuit affirmed the EDNY’s grant of summary judgment to the defendant law firm–Forster & Garbus–on the plaintiff class’s Fair Debt Collection Practices Act (“FDCPA”) claims. One issue on summary judgment was whether the defendant had violated § 1692e of the FDCPA by using a “false, deceptive, or misleading representation or means in connection with the collection of any debt.” As the Second Circuit explained:

To determine whether a communication violates § 1692e, this Court applies an objective standard based on the “least sophisticated consumer.” Under this standard, collection notices can be deceptive if they are open to more than one reasonable interpretation, at least one of which is inaccurate.

(Internal quotations and citations omitted). The Second Circuit rejected the argument that the even though an unsophisticaed investor might not have known that the calls were being made on behalf of a law firm, the plaintiff in this action did:

Nor was the statement misleading or deceptive under the least-sophisticated-consumer test. The least sophisticated consumer, if the standard is to be taken literally, would not even know what “Forster & Garbus” is. The terms “law,” “lawyer,” “attorney,” “legal,” etc., were never used, and the phrase “settle this account,” in context, did not suggest that the caller was a lawyer. Moreover, not every sequence of names with an ampersand is a law firm.

Nicholson likely knew that Forster & Garbus was a law firm because his lawyer was in negotiations with that firm. But the least sophisticated consumer test pays no attention
to the circumstances of the particular debtor in question.

(Internal quotations and citations omitted) (emphasis added).

FTCA Subcontractor Immunity Waived When Government Continues to Play Some Role in Subcontracted Task

On June 11, 2014, the Second Circuit issued a decision in Haskin v. United States, Docket No. 13-3880-CV, holding that the US Postal Service may have waived subcontractor immunity under the Federal Tort Claims Act when it also did some of the work for which the subcontractor was engaged.

In Haskin, the plaintiffs sued the US Postal Service for injuries one of them suffered when he slipped and fell on an icy sidewalk outside a post office. The USPS had contracted with defendant Precise Detailing LLC to provide snow and ice removal services at the office. For that reason, the EDNY dismissed the plaintiffs’ claims against the USPS for lack of subject matter jurisdiction, relying on the Federal Tort Claims Act’s independent contractor exception, which provides that where the Government is without fault, it may not be held liable for a negligent or wrongful act or omission of an independent contractor. The Second Circuit reversed, holding:

[T]he district court prematurely dismissed the [plaintiffs’] suit for lack of subject matter jurisdiction, as genuine issues of material fact existed concerning the alleged negligence of USPS employees. The record contains evidence from which a reasonable jury could find that [the plaintiffs’] injury resulted from the negligence of USPS employees. Here, the USPS chose to contractually delegate some–but not all–of its snow removal responsibilities to Precise. At a minimum, the USPS retained responsibility for inspecting the Branch’s sidewalks when less than two inches of snow fell. In such circumstances, as was the case on December 21, 2009, USPS employees could either (1) ask Precise to come to the Branch or (2) remove the snow and ice themselves. Indeed, USPS employees customarily checked the sidewalks surrounding the Branch for snow and ice, and kept shovels and ice melt chemicals at the Branch to remove snow and ice themselves. . . . A reasonable jury could conclude, therefore, that [the plaintiff] was injured by the negligence of USPS employees–specifically, their failure to detect and remove ice on the sidewalks surrounding the Branch, or their failure to summon Precise to remove the ice.

(Internal quotations and citations omitted).

Rule 68 Entitles Civil Rights Action Defendants to Costs Even Though Plaintiff Prevailed on Claim

On June 3, 2014, the Second Circuit issued a decision in Stanczyk v. City of New York, Docket No. 13-1582-CV, holding that Rule 68 requires a prevailing civil rights plaintiff to pay a defendant’s post-offer costs if the plaintiff’s judgment is less favorable than the unaccepted Rule 68 offer.

In Stanczyk, the City of New York, which, along with two police officers, was a defendant in a civil rights action, made an offer of judgment before trial in the EDNY. The City was not found liable, but jury did find that the two police officers had used excessive force against the plaintiff and awarded the plaintiff $55,000 in compensatory damages and $2,000 in punitive damages against each officer.  The EDNY granted the plaintiff’s “fees and costs incurred prior to the date of Defendants’ Rule 68 Offer and awarded the defendants post-offer costs, excluding attorney’s fees.” The Second Circuit affirmed the award, explaining:

Rule 68 is a cost-shifting rule designed to encourage settlements without the burdens of additional litigation. Under normal circumstances, a plaintiff who prevails on a 42 U.S.C. § 1983 claim is entitled to recover costs, including reasonable attorney’s fees. Rule 68, however, precludes a plaintiff from recovering post-offer costs if (a) the defendant timely serves plaintiff with an offer of judgment, (b) plaintiff rejects the offer, and (c) plaintiff prevails but obtains a judgment less than the rejected offer.

The City’s unaccepted offer provided for a judgment in an amount greater than that which [the plaintiff] obtained at trial. In light of Rule 68, it is undisputed that the district court properly limited [the plaintiff’s] costs and attorney’s fees to those incurred prior to [the date of the Rule 68 offer]. The district court also determined that Rule 68 entitled Defendants to costs–excluding attorney’s fees–that they incurred after making the Offer. [The plaintiff] challenges this latter portion of the district court’s decision and argues that Rule 68 cuts off a prevailing plaintiff’s right to costs but does not compel a prevailing plaintiff to bear the defendant’s post‐offer costs.

In other words, [the plaintiff’s] challenge requires us to determine whether Rule 68 not only cancels the operation of Rule 54(d)–which entitles a prevailing party to costs–but also reverses it. Although this is an issue of first impression in this Circuit, every Circuit to have confronted this question appears to have reached the same conclusion: Rule 68 reverses Rule 54(d) and requires a prevailing plaintiff to pay a defendant’s post-offer costs if the plaintiff’s judgment is less favorable than the unaccepted offer. . . .

[O]ur conclusion in no way dictates that a prevailing plaintiff . . . would be liable for a defendant’s post-offer attorney’s fees–a result that would be at odds with Section 1988. In Marek, the Supreme Court made clear that the term “costs” in Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute or other authority. Because a civil rights defendant can recover attorney’s fees only when the plaintiff’s claims are vexatious, frivolous, or brought to harass or embarrass, and a prevailing plaintiff by virtue of her victory exceeds this standard, we cannot conceive of a situation in which attorney’s fees could be properly awardable to a non-prevailing defendant under Rule 68 in a civil rights action.

(Internal quotations and citations omitted) (emphasis added).

Plaintiff States Due Process Claim Against Town For Excluding Him From His Home

On June 3, 2014, the Second Circuit issued a decision in Heckman v. Town of Hempstead, Docket No. 13-1379-CV, reversing in part a decision by the EDNY and finding that a plaintiff had sufficiently alleged due process violations relating to a town declaring his home unfit for human occupancy.

Here are the basic facts as alleged by the plaintiff:

[The plaintiff] is a disabled veteran who suffers from post-traumatic stress disorder and obsessive compulsive disorder. He experiences disordered thinking, insomnia, and an inability to concentrate on and complete even basic tasks. He depends on his sister to manage his personal and financial affairs. Moreover, these mental disabilities allegedly contribute to [the plaintiff’s] lack of fine motor skills and an aversion to parting with certain objects. . . . In short, he is a hoarder.

On December 20, 2007, [the plaintiff] arrived home to find it being boarded up by officials of the Town of Hempstead . . . and its various public safety agencies (collectively, “Defendants”). Defendants had been called to the residence by police officers who, in the course of investigating a reported shooting in the neighborhood, supposedly smelled gas coming from [the plaintiff’s] property. The officials did not permit [the plaintff] to enter his house for any reason: neither to retrieve his money from his home; nor to retrieve his medication from his home; nor to rescue his cat. Apparently fearing arrest if he continued to protest the boarding of his house, [the plaintiff] traveled three hours to the Veteran’s Administration to obtain an emergency supply of his medication, and passed the night in a motel. The next day, [the plaintiff] went to the Town’s Department of Buildings, where . . . the Town’s Supervisor of Inspection services, gave [him] a handwritten list of vague alleged problems to be corrected within the house, and returned [the plaintiff’s] house keys. Returning to his house, [the plaintiff] discovered the cat inside; however the gas, heat, electricity and water were not turned back on. To date, the unfit for human occupancy designation has not been lifted.

(Internal quotations and citations omitted).

The plaintiff alleged that the Town of Hempstead Building Department declared his home “unfit for human occupancy” without providing him notice and an opportunity to be heard in advance. The EDNY dismissed his complaint, but the Second Circuit reversed in part, explaining:

The Fourteenth Amendment prohibits a state from depriving any person of life, liberty, or property, without due process of law. Due process requires that before state actors deprive a person of property, they offer a meaningful opportunity to be heard. In an emergency situation a state may satisfy the requirements of procedural due process merely by making available some meaningful means by which to assess the propriety of the State’s action at some time after the initial taking. Where there is an emergency requiring quick action and where meaningful pre-deprivation process would be impractical, the government is relieved of its usual obligation to provide a hearing, as long as there is an adequate procedure in place to assess the propriety of the deprivation afterwards.

At the pleading stage, then, a plaintiff must provide factual allegations that permit a plausible inference that (1) the relevant official(s) lacked competent evidence to reasonably believe that an emergency existed; or (2) that an officials decision to invoke an emergency procedure was arbitrary or amounted to an abuse of discretion; or (3) that a state’s post deprivation remedies are somehow inadequate. Bound as we are at this stage in the litigation to draw all reasonable inferences in the plaintiff’s favor, we conclude that [the plaintiff] has alleged two plausible grounds on which he might maintain a procedural due process claim going forward.

The two grounds identified by the Second Circuit were allegations that no emergency existed and that the post-deprivation remedies provided to the defendant were inadequate.

Right To Counsel At Interrogation Cannot Be Prospectively Invoked And Must Be Invoked Personally, Not by Counsel

On May 20, 2014, the Second Circuit issued a decision in USA v. Medunjanin, No. 12-4724, affirming a decision by the EDNY that a defendant may not prospectively invoke the right to counsel during an interrogation and that the right to counsel, even when invoked, can be waived.

Medunjanin was convicted “of terrorism-related crimes involving a conspiratorial plan, at the behest of al-Qaeda, to carry out coordinated suicide bombings in the New York City subway system.” Both in the EDNY and on appeal, Medunjanin argued that incriminating statements he made during interviews with law enforcement agents should have been suppressed because he was denied counsel. The Second Circuit affirmed the decision of the EDNY admitting Medunjanin’s statements.

One question addressed by the EDNY and the Second Circuit was the effect of a request by Medunjanin’s counsel that he be present during any questioning of Medunjanin. Twice in September 2009, Medunjanin was questioned by FBI and NYPD officers; the second interview took place at the US Attorney’s office in Brooklyn and lasted ten hours. He was not in custody during either interview and did not request counsel. However, soon after his second interview, one of his acquaintances was arrested on terrorism-related charges. Medunjanin then met with counsel and, on September 28, 2009, his counsel notified the FBI agent and AUSA who had questioned Medunjanin that he “was representing Medunjanin and asked that Medunjanin not be interviewed unless he was present.”

Over three months later, on January 7, 2010, the FBI and NYPD executed a search warrant at Medunjanin’s home and questioned him further. Medunjanin called his lawyer, who called the FBI agent to whom he had spoken in September and left a message for the AUSA, asking to speak to him regarding Medunjanin. “In the meantime, Medunjanin remained upset by” the interview and

[b]etween 3:30 and 4:00 p.m., Medunjanin left home and drove from his building onto the Whitestone Expressway, driving at some 90 m.p.h. He wove in and out of traffic, crossing several lanes, planning to cause an explosive collision. In order to make clear that this would not be viewed as an ordinary rush hour accident, Medunjanin called 911, identified himself, and proclaimed “we love death more than you love life” and, as translated from Arabic, “there is no God but Allah and Muhammad is His messenger,” repeating the latter several times. Medunjanin then turned and sped directly into another car.

Medunjanin survived the crash without significant injury and was questioned by the FBI and NYPD. Medunjanin signed Miranda waiver forms and spoke freely with his questioners, making a number of incriminating statements. It was not until the next day that the AUSA spoke to Medunjanin’s lawyer, and then only to say that “Medunjanin would be arraigned that afternoon” and “that Medunjanin no longer wanted” his counsel “to represent him.” The AUSA “refused to disclose Medunjanin’s whereabouts.” It was not until that afternoon, just before he was indicted, that Medunjanin asked to speak to his counsel. The FBI and NYPD stopped questioning him at that point and allowed him to meet with counsel.

On the question of whether the September 28, 2009, January 7, 2010, and January 8, 2010, telephone calls from his counsel constituted an invocation of Medunjanin’s right to counsel, the Second Circuit explained:

We reject Medunjanin’s contention that the requests by [his counsel] that Medunjanin not be questioned without [his counsel being] present, in calls . . . in September 2009, effective invocations of Medunjanin’s right to counsel. That right was personal to Medunjanin. Only he could waive it; only he could properly invoke it. The only prearrest mention of counsel by Medunjanin himself came on January 7, 2010, when the second search warrant was served and Medunjanin asked whether [his counsel] had been notified. That question, if intended as a request to have counsel present, was at best unclear and ambiguous.

Thus, even assuming that Miranda rights may properly be asserted by a suspect prior to his being in custody and prior to his being questioned, there was no clear and unambiguous invocation of the right to counsel by Medunjanin before his arrest. Accordingly, the agents’ initiation of questioning of Medunjanin after his arrest, and after his receipt of Miranda warnings, did not violate Medunjanin’s Fifth Amendment privilege against self-incrimination or his right to counsel in aid of that privilege.

(Emphasis added).

Failure To Appeal Revised Judgment Prevents Appeal Of Original Judgment

On May 27, 2014, the Second Circuit issued a decision in United States v. Pelt, No. 13-1972-CV, dismissing an appeal from the EDNY.

In Pelt, the defendant, an attorney appearing pro se, filed a notice of appeal of a “partial judgment in favor of the United States on claims that [she] failed to repay her student loans.” At the same time, the defendant filed her Notice of Appeal, she also moved in the EDNY to vacate the judgment.  The EDNY granted her motion in part and entered a new judgment.  The defendant did not file another Notice of Appeal.  The Second Circuit subsequently dismissed the appeal she had filed, explaining:

In these circumstances we are obliged to dismiss [the defendant’s] appeal for lack of jurisdiction. Insofar as [the defendant] appeals from the partial summary judgment entered on March 22, 2013, that is not, by itself, a final judgment over which we may exercise jurisdiction. The Rules of Civil Procedure permit a district court to enter final judgment as to one or more, but fewer than all, claims only if the court expressly determines that there is no just reason for delay; without such an express determination, any order or other decision, however designated does not end the action and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities. The partial judgment entered on March 22, 2013, does not mention Rule 54(b) or expressly determine that there is no just reason for delay. Accordingly, that partial judgment was never certified for appeal.

We have held that, where an appellant files a notice of appeal before final judgment is entered, that premature notice of appeal may ripen into a valid notice of appeal if a final judgment has been entered by the time the appeal is heard and the appellee suffers no prejudice. But there is no reason to apply that principle here, where [the defendant] filed a timely—not a premature—notice of appeal from a judgment that was then vacated. In such circumstances, she was obliged to file a timely notice of appeal from the final judgment entered on November 20, 2013. In the absence of such a notice, we lack jurisdiction to hear the appeal.

(Internal quotations and citations omitted) (emphasis added).

Few things are as unforgiving in the law as the rules for timely filing appeals.

Second Circuit Affirms EDNY Interpretation Of Child Pornography Statute

On May 15, 2014, the Second Circuit issued a decision in United States v. Lockhart, Docket No. 13-602-CR, applying several canons of statutory interpretation to a child pornography statute.

In Lockhart, the EDNY sentenced the defendant to a minimum term of ten years for possessing child pornography, following “18 U.S.C. § 2252(b)(2), which requires a minimum term of imprisonment of ten years . . . when a defendant is found guilty of possessing child pornography and was previously convicted under state law of a crime ‘relating to aggravated sexual abuse, sexual abuse, or abusive sexual conduct involving a minor or ward.'” The defendant appealed on the ground that his previous conviction did not involve a minor or ward. The Second Circuit affirmed the EDNY, in a lengthy but well-worth-reading discussion of the applicable canons of statutory interpretation:

New York Insurance Law Does Not Require Arbitration Of Insurer’s Claim To Recover Payments On Fraudulent Claims

On May 6, 2014, the Second Circuit issued a decision in Allstate Insurance Co. v. Mun, Docket No. 13-1424-CV, holding that while the New York Insurance Law gives a medical provider the right to demand arbitration of a refusal to pay a claim, that right does not extend to a claim by an insurer to recover from the provider already-made payments.

In Allstate Insurance, the plaintiff sued the defendants in the EDNY to recover payments the plaintiff had made to the defendants on no-fault insurance claims that, the plaintiff alleged, were fraudulent. The defendants moved to compel arbitration of the plaintiff’s claims. The EDNY denied the motion, holding “that medical providers have a right to arbitrate as-yet unpaid claims, but not claims that were timely paid.” The Second Circuit affirmed, explaining:

Section 5106 of the New York Insurance Law provides, in relevant part:

(a) Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. . . .
(b) Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited eligibility hearing option, when required, to designate the insurer for first party benefits . . . .

N.Y. Ins. Law § 5106(a)‐(b) (emphases added). . . .

Defendants rely on citations to the FAA; but the real question is: do Allstate’s policies, which implement requirements imposed by New York law and which must be construed to satisfy those requirements, grant Defendants the right to arbitrate Allstate’s fraud claims?

The arbitration provision in the Allstate policies appears quite broad. It contemplates arbitration if the claimant and insurance company do not agree regarding any matter relating to the claim. But it is not as broad as it may seem. An arbitrable dispute is one between the insurance company and a person making a claim for first-party benefits. Defendants are no longer making a claim. They made a claim; they made many claims. And those claims were promptly paid by Allstate. Allstate’s fraud suit therefore does not raise a dispute between it and a person making a claim for first-party benefits. The arbitration provision does not apply.

(Internal quotations and citations omitted).

This decision illustrates that notwithstanding case-law favoring arbitration and the rights of health care providers vis-à-vis insurers, at the end of the day, it is the law and applicable contracts that define the scope of the right to demand arbitration.

RICO Applies To Foreign Enterprises When Underlying Predicates Were Intended To Apply To Such Conduct

On April 23, 2014, the Second Circuit issued a decision in European Community v. RJR Nabisco, No. 11-2475-cv, reversing a decision of the EDNY holding that “RICO does not apply to enterprises outside the United States.”

In European Community, the plaintiff asserted RICO and associated state law claims against the defendants alleging a multi-step international scheme involving “the smuggling of illegal narcotics into Europe by Colombian and Russian criminal organizations,” money laundering and using the laundered funds to purchase cigarettes, the sale of which funded further drug smuggling. The EDNY dismissed the complaint on several grounds, including that RICO does not apply to enterprises located and directed outside the United States. The Second Circuit reversed, explaining, with respect to RICO’s extra-territorial application, that:

We conclude that RICO applies extraterritorially if, and only if, liability or guilt could attach to extraterritorial conduct under the relevant RICO predicate. Thus, when a RICO claim depends on violations of a predicate statute that manifests an unmistakable congressional intent to apply extraterritorially, RICO will apply to extraterritorial conduct, too, but only to the extent that the predicate would. Conversely, when a RICO claim depends on violations of a predicate statute that does not overcome Morrison‘s presumption against extraterritoriality, RICO will not apply extraterritorially either. In all cases, what constitutes sufficient domestic conduct to trigger liability is the same as between RICO and the predicate that forms the basis for RICO liability.

(Emphasis added).