Attorneys’ Fees | After-Acquired Evidence | Web Defamation

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Federal Court Awards Our Client Attorneys’ Fees

Federal Court Awards Our Client Attorneys’ FeesA recent decision of the United States District Court for the Eastern District of New York awarded this firm’s client-landlord’s attorneys’ fees and costs after it held that twenty-two respondents, all of whom were tenants of a mobile-home park against which summary holdover proceedings had been brought by the landlord in Suffolk County’s Second District Court, Lindenhurst, had “no objectively reasonable basis” for removing those actions to federal court.

Generally, an action brought in State court may be removed to federal court if the notice of removal is filed within 30 days after receiving the pleading, and the federal court would otherwise have jurisdiction over the action.

In this action, the respondents had filed their notice of removal of 19 separate holdover summary proceedings outside of the 30-day limitation, but argued that a “revival exception” applied. Essentially, this exception provides that the 30 days to remove a proceeding may be “revived” if the plaintiff amends the complaint, and in so doing, dramatically changes the essential character of the action. Here, no such amendment was made, but instead, respondents argued that a summary judgment motion filed by the petitioner-landlord in the summary holdover proceedings triggered the exception. The Court assigned no credibility to this argument, and found that removal was untimely.

Although unnecessary, the decision continued, and concluded that even if notice was timely filed — which it wasn’t — there was still no basis for the federal court to exercise jurisdiction. Here, it was very clear that the summary holdover proceedings did not arise under federal law or the U.S. Constitution. However, the respondents again attempted to rely on an exception to the rule, which allows removal in cases where “the defendant is denied or cannot enforce in the courts of such State, a right under any law providing for []equal rights . . . .” This exception was created by the U.S. Supreme Court in Georgia v. Rachel, 384 U.S. 780 (1966), where the defendants were being prosecuted in State court for criminal trespass, after refusing to leave a private restaurant in which they sought service, on the basis of their race. There, any attempt to prosecute the defendants for trespass conflicted with the federal civil rights statutes prohibiting racial discrimination in places of public accommodation.

Here, respondents relied solely on the fact that the individuals against whom summary holdover proceedings were brought were African Americans and Hispanics to meet this exception. Respondents did not alleged facts to support that the State court action — which seeks redress against the Respondents’ alleged holding over beyond the expiration of their tenancies — is itself an act by which their civil rights were violated. Nor did respondents make any demonstration that, if they did have a civil rights claim, it could not be brought in State court. Therefore, the narrow exception was inapplicable.

Thus, the Court concluded that there was absolutely no basis for federal jurisdiction, and held it appropriate to send the 19 cases back to the State District Court and require Respondents to pay just costs, and any actual expenses, including attorneys’ fees, incurred by the petitioner as a result of respondents’ wrongful removal. The respondents promptly paid the fees.

Defense of After-Acquired Evidence

Defense of After-Acquired EvidenceIn Gorman v. Covidien Sales, LLC, plaintiff brought an action against its former employer to recover damages for alleged discrimination on the basis of military status and medical disability, retaliation, and intentional infliction of emotional distress during plaintiff’s employment. The employer moved to amend the answer to assert an additional affirmative defense of “after-acquired evidence.”

Plaintiff alleged that he suffers post-traumatic stress disorder following Navy service between 1987 and 1991. During discovery, however, the plaintiff had admitted that he recorded certain telephone calls with his supervisor and others – apparently against workplace rules. Based on this, the Court allowed the defendants to amend their answer to assert an additional affirmative defense of “after-acquired evidence” asserting that even if Gorman was improperly fired, subsequently revealed evidence of wrongdoing provided a non-discriminatory justification for his termination.

The Court recognized that the “after-acquired evidence defense” allows an employer in a discrimination action to “assert that even if an employee was improperly fired at the time, subsequently revealed evidence of wrongdoing provides non-discriminatory justification for their termination. Although the defense of after-acquired evidence cannot dispose of plaintiff’s claims in their entirety, the defense is relevant to the award of damages and remedies, as a successful defense renders front pay and reinstatement improper. See McKennon v. Nashville Banner Pub. Co., 513 U.S. 352, 360-62 (1995) (“[Although] [t]he employer could not have been motivated by knowledge it did not have and it cannot now claim that the employee was fired for the nondiscriminatory reason[,]…as a general rule in cases of this type, neither reinstatement nor front pay is an appropriate remedy.”). Because the proposed amendment is not obviously insufficient for the purpose of limiting damages and remedies, the Court finds that the proposed amendment is not futile.”

The Court concluded that the defendants showed good cause for amendment and had not unduly delayed nor acted in bad faith, noting only a three-week delay in the application to amend after the plaintiff’s admission in a deposition.

Don’t Sue the Messenger!

Don’t Sue the Messenger!In Ricci v. Teamsters Union Local 456, Teamsters Union Local 456 (Union) member Peter Ricci alleged that he was “blackballed” and suffered retaliation by Union leadership for 10 years after he refused to endorse Union president Eddie Doyle at a September 2002 meeting. In August and September 2012, Union members distributed newsletters containing defamatory statements about Ricci and his family. These newsletters were also published on a now defunct web site that was hosted on GoDaddy.com LLC’s web servers. Mr. Ricci and his wife sued the Union, as well as GoDaddy for defamation.

Affirming the District Court’s judgment, the U.S. Court of Appeals, Second Circuit, held that the federal Communications Decency Act of 1996 shielded GoDaddy from defamation liability.

The Communications Decency Act provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. §230(c)(1). The preemption over State and local laws is expressed: “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” Id. §230(e)(3). “Preemption” is a doctrine based on the Supremacy Clause of the U.S. Constitution that holds that certain matters are of such a national, as opposed to local, character that federal laws preempt or take precedence over state laws. As such, a state may not pass a law inconsistent with the federal law.

Here, the Court reasoned that the Riccis sought to hold GoDaddy liable as a “publisher or speaker” of allegedly defamatory statements authored by someone else — that is, “another information content provider.” So if GoDaddy is being sued in its capacity as a provider of an “interactive computer service,” it is immune from defamation liability under the Communications Decency Act.

“The statute defines ‘interactive computer service’ expansively, to include ‘any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server.’ This wording has been construed broadly to effectuate the statute’s speech-protective purpose:

Congress recognized the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium….Section 230 was enacted, in part, to maintain the robust nature of Internet communication and, accordingly, to keep government interference in the medium to a minimum….None of this means, of course, that the original culpable party who posts defamatory messages would escape accountability….Congress made a policy choice, however, not to deter harmful online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties’ potentially injurious messages.

In short, a plaintiff defamed on the internet can sue the original speaker, but typically “cannot sue the messenger.”

The Court concluded that because GoDaddy was sued in its capacity as a provider of an “interactive computer service” the Communications Decency Act preempted the State law of defamation. The Court held that [t]he Riccis do not allege that GoDaddy had any role in creating the allegedly defamatory newsletters.” Rather, their complaint only alleges that GoDaddy hosted the web site on which those newsletters were published, refused to remove the newsletters from its servers, and refused to investigate complaints by Ricci’s wife.

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