Rooker-Feldman Doctrine.

In Cho v. City of New York, the plaintiffs had been charged with violating New York City's Nuisance Abatement Law.  They entered into settlement agreements with the City rather than defend themselves in court.  Each of the agreements were "so-ordered" by the state court.  The New York law allowed ex parte orders, requiring a premises on which an alleged public nuisance was being conducted to be closed.

Bringing a federal action against the City, the plaintiffs asserted that the City used the state court actions to compel property owners and leaseholders to enter into settlement agreements waiving their constitutional rights and that the so-ordered so-ordered settlement agreements violated the Fourteenth Amendment.  They asked the district court to enjoin the City from enforcing the agreements and declare them to be unconstitutional, invalid and unenforceable.  The City moved to dismiss and the district court granted the motion, claiming that it had no jurisdiction over the matter under the Rooker-Feldman Doctrine.  The Rooker-Feldman doctrine provides that federal district courts lack jurisdiction over suits that are, in substance, appeals form state court judgments.

For a district court to be without jurisdiction under this doctrine, four requirements must be met.  First, the plaintiff in the federal action must have lost in state court.  Second, the plaintiff must complain of injuries caused by a state court judgment.  Third, the plaintiff must invite district court review and rejection of that judgment.  Fourth, the state court judgment must have been rendered before the district court proceedings had been commenced.

The Second Circuit reversed, holding that where the state court action did not cause the injury but was a mere ratification of it, the second requirement of the Rooker-Feldman doctrine had not been met and the district court was not deprived of jurisdiction.  The injury that the plaintiffs sought to remedy was an injury caused when, prior to any judicial action, they were coerced to settle, not an injury that flows from a state court judgment.  Accordingly, the judgment was vacated and the case remanded to the district for further proceedings.

The decision in this case can be found here.

Whole grain

The Kellogg Company advertised on the labels that its Cheez-It crackers were made with whole grain.  In fact, the primary ingredient in the crackers was enriched white flour.  The plaintiffs filed a class action against Kellogg, alleging that the labels were false and misleading.  The district court held that the whole grain labels would not mislead a reasonable consumer and dismissed the action.  The plaintiffs appealed.

The Second Circuit reversed the decision of the district court and remanded the case for further proceedings.  The Court rejected the contention that information on the side of the box, relating to the nutritional content of the crackers cured the misstatement.  It held that the plaintiffs had alleged a plausible claim and that the district's dismissal had been improper.

The decision in Mantikas v. Kellogg Co. can be found here.

Qualified Immunity for Tasing Student

The parents of a 12-year old profoundly-deaf boy got into a confrontation over a takeout order with a teacher at his school.  He became angry, ran from the dorm and entered onto a nearby fenced-off construction site.  The teacher followed him and the boy hit him with a stick and threw rocks at him.  The dean of the school called the police.  When the police arrived the boy was holding a large rock.  Officer Gionfriddo, of the police, instructed the boy to drop the rock, which instruction was translated by the dean into American Sign Language.  The boy did not drop the rock.  Officer Gionfriddo then told him that he would be tased if he did not drop the rock, which was also translated to ASL.  When the boy did not drop the rock the police tased him twice and put him in handcuffs.

The boy denies that he actually received or understood any of the instructions or warnings given to him or even knew that the police officers were at the school until he was tased.  He (or actually his parents who commenced suit on his behalf) claimed that Officer Gionfriddo's belief that the instructions and warnings were translated and being understood by the boy were unreasonable.

Officer Gionfriddo moved for summary judgment on the ground of qualified immunity.  The district court denied the motion, asserting that such immunity depends on factual disputes that hinge on credibility determinations, which must be made by the jury.  Officer Gionfriddo appealed.

The Second Circuit reversed, holding that it was objectively reasonable for Officer Gionfriddo to believe that his conduct was lawful.  In other cases, the Court had held that it was not unreasonable for an officer to use a taser in similar circumstances.  Accordingly, Officer Officer Giorfriddo was entitled to qualified immunity.

The decision in Muschette v. Gionfriddo can be found here.

Trying to Evade a Class Action

In Geismann, M.D., P.C. v. ZocDoc, Inc., Geismann , a Missouri professional corporation, commenced a class action in Missouri state court against the defendant, claiming that it had violated the Telephone Consumer Protection Act by sending unsolicited advertisements by fax.  Geismann, a Delaware corporation, also moved for class certification.  ZocDoc removed the case to the District Court for the Eastern District of Missouri.  Two weeks later, ZocDoc made an offer of judgment to Geismann, pursuant to Rule 68 of the Federal Rules of Civil Procedure for (a) $6,000 plus reasonable attorney's fees in satisfaction of Geismann's individual claims and (b) an injunction prohibiting the defendant from engaging in similar statutory violations in the future.  Geismann rejected the offer of judgment because it did not provide relief to the other members of the class.  ZocDoc moved to transfer the case to the Southern District of New York, which motion was granted.

Upon transfer of the case, ZocDoc moved to dismiss the complaint on the ground that the offer of judgment provided full satisfaction of Geismann's claim and the action was moot.  The District Court granted ZocDoc's motion.  Geismann appealed.

The Second Circuit reversed based on the Supreme Court's decision in Campbell-Ewald Co. v. Gomez, which held that the failure to accept an offer of judgment is not a basis to dismiss an action because such failure, like any unaccepted contract offer, is a legal nullity with no operative effect on a  plaintiff's individual claim.  The Supreme Court, however, left open the possibility that the result would be different if the defendant deposited the full amount of the plaintiff's individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.

Before the Second Circuit had issued its decision but after the Supreme Court's decision in Cambell-Ewald, ZocDoc filed a motion with the District Court to deposit a check in the amount of $6,100 payable to the clerk of the court in satisfaction of Geismann's judgment.  The Court granted the motion.

After the Second Circuit's decision, the judgment was vacated and the case remanded to the District Court.  The Court stated that ZocDoc's deposit on the funds with the clerk did not match the Supreme Court's hypothetical case in Campbell-Ewald in that it was deposited pursuant to a judgment that no longer existed and should not have been entered in the first place.

ZocDoc filed a letter motion to the District Court seeking leave to deposit an additional $13,900 with the Court under Rule 67, explaining that "ZocDoc hereby makes an open-ended offer to Geismann with no expiration date on a total of $20,000 (twenty thousand dollars) and for all injunctive relief Geismann seeks in the operative complaint."  It further stated that after depositing the funds, it would  seek to perfect the Cambell-Ewald hypothetical by filing a motion for summary judgment in which it will ask the Court to enter a judgment in favor of Geismann and against ZocDoc for the full amount of Geismann's individual claims and to dismiss the class allegations without prejudice..  The District Court granted ZocDoc's letter motion to deposit the funds and to make a summary judgment motion.  ZocDoc moved for summary judgment and asked that the Court dismiss the action as moot in that ZocDoc had deposited the money and consented to the injunctive relief.  The Court granted the motion, dismissed the action and dismissed the class claims without prejudice.  Geisman appealed.

The Second Circuit again reversed, holding that the deposit with the clerk of the $20,000 was not the same as a bank account in plaintiff's name (the hypothetical in Campbell-Ewald) because the plaintiff does not have the right to withdraw the funds at any time.  Hence, the deposit did not render Geismann's individual claims moot.  Also, at the time of the deposit, the District Court was not divested of power to enter a judgment in favor of Geismann.  Again, Geismann's individual claims were not mooted by the deposit.  The Court acknowledged that Geismann's claims could be rendered moot if ZocDoc surrendered to the complete relief sought by Geismann, but that complete relief includes its class claims.  The Court concluded that the District Court had to resolve the pending class certification motion before entereing judgment and declaring an action moot based solely on relief provided to a plaintiff on an individual basis.  To hold otherwise would allow a defendant to thwart class litigation at will through the use of tactical procedural maneuvers.

The Second Circuit's decision in this case can be found here.

CPLR 3102 proceeding not a "civil action" for purposes of removal

In Teamsters Local 404 Health Services & Insurance Plan v. King Pharmaceuticals, the Teamsters Local 404 Health Services & Insurance Plan ("Teamsters Plan") had commenced a proceeding, seeking pre-action discovery under CPLR 3102(c).  It sought to obtain settlement agreement, licensing agreements and any other related agreements between King Pharmaceuticals , Meridian Technologies, Inc. and Pfizer, Inc., the respondents in the proceeding (collectively, the "Respondents") and Teva Pharmaceutical Industries, Ltd. ("Teva"), which documents would assist Teamsters Plan in drafting a complaint by bringing to light certain "pay-for- delay" or "reverse-payment" agreements under which the Respondents were paid to hold off bringing a generic EpiPen to market until June 2015, which agreements Teamsters Plan contended violated state consumer protection laws and state and federal antitrust laws.  King Pharmaceutical attempted to remove the proceeding to federal court and to dismiss because such pre-action disclosure was not available under the Federal Rules of Civil Procedure.  The District Court remanded the case to state court, holding that there was no federal question jurisdiction and that diversity jurisdiction was barred by 28 U.S.C. 1441(b)'s "forum defendant" rule.  That rule provides that when a defendant resides in the state in which the action is commenced, the defendant cannot remove the case to federal court.

The Second Circuit affirmed, but on different grounds.  The Court held that a proceeding brought under CPLR 3102 does not state a substantive cause of action, which is required for a case to be removable.

The decision in this case can be found here.

(Apologies are in order.  This post has been sitting in draft version since mid-October.  I neglected to push the Publish button.  Sorry.)

Doctrine of Functus Officio

Under the doctrine of functus officio, once a panel of arbitrators has exercised its authority to adjudicate the issues submitted to it, the authority of the arbitrators over those question is ended.  In General Re Life Corp. v. Lincoln Nat'l Life Ins. Co., the arbitrators issued an award, and then later issued a "clarification" of the award.  The parties each tried to confirm the award -- Lincoln attempted to confirm the award as clarified and General Re sought to confirm the award as originally issued.  The question was whether the arbitrators had the power to issue the clarification.

The Second Circuit joined the Third, Fifth, Sixth, Seventh and Ninth Circuit in holding that their was an exception to functus officio where an arbitration award fails to address a contingency that later airses or when the award is susceptible to more than one interpretation.  The District Court had accepted the clarification and, on appeal, the Second Circuit affirmed.

The decision in this case can be found here.