Veronika Chauca, Appellant,v.Jamil Abraham, et al., Respondents.BriefN.Y.December 14, 2016CTQ-2016-00003 Second Circuit Docket Nos. 15-1720-cv(L), 15-1777-cv(XAP) Court of Appeals of the State of New York VERONIKA CHAUCA, Plaintiff-Appellant, – v. – JAMIL ABRAHAM, Individually, PARK MANAGEMENT SYSTEMS, LLC, AKA Park Health Center, ANN MARIE GARRIQUES, Individually, Defendants-Respondents. –––––––––––––––––––––––––––––– ON APPEAL FROM THE CERTIFIED QUESTION BY THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT IN DOCKET NO. 15-1777-CV BRIEF OF AMICUS CURIAE NATIONAL EMPLOYMENT LAWYERS ASSOCIATION/NEW YORK (NELA/NY) JOSHUA FRIEDMAN FRIEDMAN & HOULDING, LLP 1050 Seven Oaks Lane Mamaroneck, New York 10543 Tel.: (888) 369-1119 Ext. 4 Fax: (866) 731-5553 On Behalf of Amicus Curiae: NATIONAL EMPLOYMENT LAWYERS ASSOCIATION/NEW YORK (NELA/NY) 39 Broadway, Suite 2420 New York, New York 10006 Tel.: (212) 317-2291 Fax: (212) 977-4005 Dated: August 31, 2017 Table of Contents CORPORATE DISCLOSURE STATEMENT ......................................................... 1 INTEREST OF THE AMICUS CURIAE ................................................................... 2 INTRODUCTION ..................................................................................................... 4 POINT I ...................................................................................................................... 9 THE CORRECT CONSTRUCTION OF SUBDIVISION (13) CAN BE DETERMINED BY REFERENCE TO THE 1991 AMENDMENT AND THE LEGISLATIVE HISTORY ALONE ................................................................ 9 POINT II .................................................................................................................. 16 THE CITY COUNCIL LEGISLATIVELY OVERRULED FARIAS WITH THE PASSAGE OF THE 2005 RESTORATION ACT ......................................... 16 POINT III ................................................................................................................. 21 DIRECT LIABILITY OF INDIVIDUALS AND EMPLOYERS .......................... 21 A. Direct Individual Liability for Punitive Damages .................................... 21 B. Direct Employer Liability for Punitive Damages ..................................... 23 ii Table of Authorities CASES Baker v. Bd. of Educ., 70 N.Y.2d 314 (1987) ......................................................................................... 22 Buckhannon Bd. & Care Home v. W. Va. Dep’t of Health & Human Res, 532 U.S. 598 (2001) ............................................................................................ 18 Burlington Industries, Inc. v Ellerth, 524 US 742 (1998) .............................................................................................. 11 Chauca v. Abraham, 841 F.3d 86 (2d Cir. 2017) ..................................................... 9, 12, 16, 18, 19, 20 Faragher v. City of Boca Raton, 524 U.S. 775 (1998) ............................................................................................ 11 Farias v. International Systems, Inc., 259 F.3d 91 (2d Cir. 2001) ..................................................................... 15, 16, 21 Gabel v. Richards Spears Kibbe & Orbe LLP, 615 F. Supp. 2d 241 (S.D.N.Y. 2009) ................................................................ 20 Gallo v. Alitalia - Linee, 585 F. Supp. 2d 520 (S.D.N.Y. 2008) ......................................................... 19, 20 Greenbaum v. Handelsbanken, 67 F. Supp. 2d 228 (S.D.N.Y. 1999) ..................................................................... 7 Katz v. Adecco United States, Inc., 845 F. Supp. 2d 539 (S.D.N.Y. 2012) ................................................................. 20 Kolstad v. Am. Dental Ass’n, 527 U.S. 526 (1999) ........................................................................... 8, 12, 15, 21 Loeffler v. Staten Island Univ. Hosp., 582 F.3d 268 (2d Cir. 2009) ................................................................................ 20 iii McGrath v. Toys, 3 N.Y.3d 421 (2004) ..................................................................................................................... 17, 18, 20 Oral Argument, Zakrzewska v. The New School, 14 N.Y.3d 469 (2010) (No. 62) ........................................................................6, 7 Thompson v. Am. Eagle Airlines, Inc., 2000 U.S. Dist. LEXIS 14932 (S.D.N.Y. Oct. 4, 2000) .............................. 15, 20 Williams v. N.Y.C. Hous. Auth., 61 A.D.3d 62 (1st Dep’t 2009) .............................................................. 19, 20, 21 Zakrzewska v. New School, 14 N.Y.3d 469 (2010) .................................................... 6, 7, 9, 10, 11, 12, 14, 15 OTHER AUTHORITIES Comm. on Gen. Welfare, Report on Prop. Int. No. 22-A (Aug. 17, 2005) 17, 18, 19 Department of Numbers, New York Household Income, deptofnumbers.com, http .................................................................................................................................... 4 Statement of Annabel Palma at the meeting of the NY City Council (Sept. 15, 2005). ....................................................................................................................... 19 Vivian Berger, Winners and Losers: Employment Discrimination Trials in the Southern and Eastern Districts of New York: 2016 Update, NYSBA Labor and Employment Law Journal (April 14, 2017) ...................................................... 4, 5, 6 STATUTES 42 U.S.C. § 1981a(b)(1) ............................................................................................. 7 42 U.S.C.S. § 2000e ................................................................................................... 7 N.Y.C. Admin. Code § 8-107(13) ....................................... 6, 7, 9, 11, 12, 14, 16, 21 N.Y.C. Admin. Code § 8-107(13)(b) .................................................... 7, 8, 9, 11, 13 N.Y.C. Admin. Code § 8-107(13)(d) ............................................ 8, 9, 10, 11, 12, 13 iv N.Y.C. Admin. Code § 8-107(13)(e) ........................................................ 8, 9, 10, 14 N.Y.C. Admin. Code § 8-107(13)(f)................................................................... 9, 10 N.Y.C. Admin. Code § 8-126(a) ....................................................................... 21, 22 N.Y.C. Admin. Code § 8-130 ............................................................................. 9, 21 N.Y.C. Admin. Code § 8-502 ............................................................................. 9, 18 1 CORPORATE DISCLOSURE STATEMENT Pursuant to the Rules of Practice of the Court of Appeals, 22 N.Y.C.R.R. § 500.l(f), Amicus Curiae makes the following disclosure: The National Employment Lawyers Association/New York (“NELA/NY”) states that it is a non-profit corporation with no parent corporation and no subsidiaries. NELA/NY is an affiliate of the National Employment Lawyers Association, a national bar association dedicated to the vindication of the rights of individual employees. 2 INTEREST OF THE AMICUS CURIAE NELA/NY is the New York affiliate of the National Employment Lawyers Association (“NELA”), a national bar association dedicated to the vindication of the rights of individual employees. NELA is the nation’s only professional organization comprised exclusively of lawyers who represent individual employees. NELA has over 4000 member attorneys and 69 state and local affiliates who focus their expertise on employment discrimination, employee compensation and benefits, and other issues arising out of the employment relationship. With approximately 350 members, NELA/NY is on of NELA’s largest affiliates. NELA/NY advances and encourages the professional development of its members through networking, educational programs, publications and technical support. NELA/NY also promotes the workplace rights of individual employees through legislation, a legal referral service, briefs as amicus curiae and other activities, with an emphasis on the special challenges presented by New York’s employment laws. NELA/NY is dedicated to advancing the rights of individual employees to work in an environment that is free of discrimination, harassment, and retaliation. Our members advance these goals through representation of employees who have been discriminated and retaliated against, including employees with claims under the New York City Administrative Code. NELA/NY has filed numerous amicus 3 briefs in this Court in cases that raise important questions of anti-discrimination law. The aim of this participation has been to highlight the practical effects of legal decisions on the lives of working people. 4 INTRODUCTION The issue before this Court is of great importance to the members of the National Employment Lawyers Association, New York affiliate (“NELA/NY”), and to all New Yorkers who have or will have claims under the employment discrimination claims provisions of the New York City Administrative Code (the “City Law” or NYCHRL). Employers regard defending employment discrimination suits as a cost of doing business. Such suits do not operate as deterrents to unlawful conduct. This is largely because in any given suit the amount of damages awarded is often too low to have an impact on the employer's future conduct. During the period January 2004 to December 2010, the median award for pain and suffering in employment discrimination cases in the Southern and Eastern Districts of New York was $30,000, after post-verdict motions.1 Our clients do not earn salaries large enough that a back pay award would represent a deterrent to discrimination. In New York State, according to census data for 2015, median per capita income was $34,297.2 1 Vivian Berger, Winners and Losers: Employment Discrimination Trials in the Southern and Eastern Districts of New York: 2016 Update, NYSBA Labor and Employment Law Journal (April 14, 2017), available at http://www.vberger-mediator.com/mediation/employment- discrimination-trials.html. The study looked at PACER data January 2004 to December 2010. 2 Department of Numbers, New York Household Income, deptofnumbers.com, http://www.deptofnumbers.com/income/new-york/ (last visited August 31, 2017). “The median household income across New York City stands at $50,711, according to 2010-2012 estimates from the U.S. Census Bureau.” WNYC, Median Income, NYC Neighborhoods, 5 Plaintiffs are required to mitigate principally because they cannot afford to be unemployed, and they do mitigate. Thus back pay awards are small. Punitive damages charges are rare. Of 160 cases that went to trial 2004 through 2010, in the Eastern and Southern Districts of New York, in only 22 cases were the juries charged on punitive damages.3 In our experience, the vast majority of employers carry employment practices insurance, which covers employment discrimination, including hostile work environment claims, and associated legal fees (employer’s and plaintiff’s), but excludes coverage for punitive damages. Thus, the only real potential financial deterrent to discrimination are punitive damages awards. However, the deterrent potential of the City Law has not been realized. Virtually all employment discrimination cases that survive summary judgment are settled. Verdicts drive settlements. As a consequence, those settlements rarely reflect anything for punitive damages, because the employer is unwilling to bargain to avoid something it need not fear. Moreover, employers are not even motivated to fire or discipline managers who unlawfully harass their subordinates, since managers earn a great deal more project.wnyc.org, https://project.wnyc.org/median-income-nabes/ (last visited August 31, 2017) (emphasis supplied). 3 Berger, Winners and Losers, supra note .. 6 profit for the employer than one subordinate. These are the facts we confront in the vast majority of the employment discrimination cases we prosecute. Our members sue repeat offenders on a regular basis.4 The language of the original amendments to the City Law, and the legislative history, made it clear that the law was amended in 1991 to increase the deterrent power of the statute. As this Court noted in Zakrzewska v. New School, the legislative history and the plain text of section 8-107(13) evinced a two pronged approach. 14 N.Y.3d 469, 479-80 (2010). Only mitigation of punitive damages would be allowed, and employers would face strict liability for the harassing conduct of those employees who exercised managerial or supervisory responsibility. Id. During oral argument in Zakrzewska v. New School, Judge Smith, in one sentence, captured the problem that has confounded every attorney who has tried to argue that a punitive damages charge is required under section 8-107(13), doubting that the New York City Council actually intended the consequence of an accurate construction of subdivision (13). See Oral Argument at 11:27-11:57, Zakrzewska v. The New School, 14 N.Y.3d 469 (2010) (No. 62); N.Y.C. Admin. Code. § 8- 4 “As compared with the average plaintiff, the mainly institutional defendants in employment discrimination cases are typically seasoned, high-stakes repeaters.” Berger, Winners and Losers, supra note . 7 107(13). Judge Smith pointed out that if this Court construed subdivision (13) as creating strict liability for the harassing conduct of an employee with supervisory responsibility, it would lead to employer liability for punitive damages, “where you have no fault.”5 Plaintiff’s counsel responded “under that circumstance, yes, the employer can be liable. The City Council made a choice here . . .”6 This Court, nonetheless, correctly held there was strict liability under subdivision (13)(b)(1), and that in such case “an employer’s antidiscrimination policies and procedures may be considered “in mitigation of the amount of civil penalties or punitive damages” only. Zakrzewska, 14 N.Y.3d at 479-80. Because enhanced scienter has been a requirement for the imposition of punitive damages under New York law7 for so long, able jurists8 either miss, distinguish, or simply ignore the plain language of subdivision (13), and thereby undermine the goals of the legislation. The instant case is a good example. Assuming arguendo that the trial court’s 5 Oral Argument at 11:27-11:57, Zakrzewska v. The New School, 14 N.Y.3d 469 (2010) (No. 62), https://www.nycourts.gov/ctapps/arguments/2010/Mar10/Mar10_OA.htm 6 Id. 7 And under Title VII, since the passage of 42 U.S.C. § 1981a(b)(1), in 1991. 8 See, e.g., Greenbaum v. Handelsbanken, 67 F. Supp. 2d 228, 262 (S.D.N.Y. 1999) (Justice Sonia Sotomayor, then a Judge on the Second Circuit, sitting by designation as a District Court Judge, applying the federal standard to determine liability for punitive damages under the City Law). 8 finding that the facts did not meet the Kolstad9 standard was correct, they plainly met the subdivision (13)(b) standard. The jury found that two managers or agents fired the plaintiff because she was pregnant. Appendix (“A”) 493. The record is replete with prevarication probative of guilty knowledge. See generally Plaintiff- Appellant’s Brief, Chauca v. Abraham, CTQ-2016-00003 (March 3, 2017) at 2-10 (citing Appendix). Had it been charged under subdivision (13)(d) and (e), the jury could have found that this was the fourth time a woman had been fired after the employer became aware she was pregnant. See A. 409-411 (district judge declining to charge the jury punitive damages); A. 70-72, 95-96, 157-59, 162, 171-75 (indicating three other women who had been fired or lost their employment following pregnancy). The employer would have been entitled to try to prove facts in support of mitigation under subdivision (13)(d), but the good employer factors are not readily apparent. The Council’s view was that a greater deterrent than compensatory damages and back pay, was required, upon a finding of liability under subdivision (13)(b)—without proof of enhanced scienter. The instant case is a perfect example. The jury could have found that the employer is a classic-repeat offender. 9 Kolstad v. Am. Dental Ass’n, 527 U.S. 526 (1999) 9 POINT I THE CORRECT CONSTRUCTION OF SUBDIVISION (13) CAN BE DETERMINED BY REFERENCE TO THE 1991 AMENDMENT AND THE LEGISLATIVE HISTORY ALONE The basis of the certification to this Court by the Second Circuit is the fact that no New York state-court decision since the passage of the 2005 Restoration Act addressed the question certified: What is the standard for finding a defendant liable for punitive damages under the New York City Human Rights Law, N.Y.C. Admin. Code § 8-502? Chauca v. Abraham, 841 F.3d 86, 93-95 (2d Cir. 2017) (referring to Local Civil Rights Restoration Act of 2005, N.Y.C. Local Law No. 85 of 2005 (Oct. 3, 2005) § 7, N.Y.C. Admin. Code § 8-130) (“Restoration Act”). This is an accurate characterization of the case law; however, it overlooks the fact that in Zakrzewska v. New School, this Court construed the same language at issue in the instant certification, namely, the meaning of New York City Human Rights Law, N.Y.C. Admin. Code (“NYCHRL” or “City Law”) sections 8-107(13)(b), and (d)-(f). See generally 14 N.Y.3d 469, 479-80 (2010). This Court did so without reference to the 2005 Restoration Act, holding that those sections conveyed a “plain meaning,” and the legislative history of section 8-107(13) was consistent with its plain meaning.10 See generally id. 10 The City Council’s Committee on General Welfare reported to the full Council that the 10 At issue in Zakrzewska v. New School was whether the employer was strictly liable for the sexually harassing conduct of a supervisor under the standards set forth in sections 8-107(13)(d)-(f) of the City Law, or whether the federal- and state-Faragher-Ellerth standard should be used to determine when an employer is vicariously liable for the sexually harassing conduct of a supervisor. Id. at 479. This Court noted: We have “generally interpreted” state and local civil rights statutes “consistently with federal precedent” where the statutes “are substantively and textually similar to their federal counterparts” (McGrath v Toys "R" Us, Inc., 3 NY3d 421, 429, 821 NE2d 519, 788 NYS2d 281 [2004]. But we also “construe unambiguous language to give effect to its plain meaning.” (Matter of DaimlerChrysler Corp. v Spitzer, 7 NY3d 653, 660, 860 NE2d 705, 827 NYS2d 88 [2006]). Id. (emphasis in original). The Faragher-Ellerth doctrine provides the employer with an affirmative defense when the alleged harasser was a supervisor. Faragher new law would put the city’s law at the forefront of human rights laws. Faced with restrictive interpretations of human rights laws on the state and federal levels, it is especially significant that the city has seen fit to strengthen the local human rights law at this time. Comm. On Gen. Welfare, Report on Prop. Int. No. 465-A & 536-A (1991) at 12 [hereinafter 1991 Committee Report], available at www.antibiaslaw.com/sites/default/files/all/LL39 CommitteeReport.pdf. In his signing remarks June 18, 1991, Mayor Dinkins noted that the bill was introduced in the Council at his request, it was particularly important because since 1980 the federal government “has been marching backwards on civil rights issues,” and “we have had no choice but to move forward independently.” Remarks by Mayor David N. Dinkins at Public Hearing on Local Laws 1-2 (June 18, 1991) [hereinafter 1991 Dinkins’ Remarks], available at www.antibiaslaw.com/sites/default/files/all/LL39LegHist-Mayor.pdf. 11 v. City of Boca Raton, 524 U.S. 775, 807 (1998); Burlington Industries, Inc. v Ellerth, 524 US 742 (1998). The elements are “(a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” Faragher, 524 U.S. at 807. The doctrine provides a safe harbor. An employer could avoid liability entirely, if it could prove the affirmative defense. Id. In Zakrzewska v. New School, this Court held that section 8-107(13) of the City Law created a unique standard of liability, including strict liability for the harassing conduct of persons exercising supervisory or managerial authority. 14 N.Y.3d at 479-80. This Court held: Here, as the District Court correctly concluded, the plain language of the NYCHRL precludes the Faragher-Ellerth defense. . . .Unlike state law, though, subdivision (13) of section 8-107 of the NYCHRL creates an interrelated set of provisions to govern an employer's liability for an employee's unlawful discriminatory conduct in the workplace. This legislative scheme simply does not match up with the Faragher-Ellerth defense. Id. at 479 (emphasis supplied). This Court explained that unlike federal and state law, proof of compliance with the detailed standards set forth in subdivision (13)(d), did nothing to avoid liability in cases of violations of subdivisions (13)(b)(1) and (13)(b)(2). Id. at 479-80. They were intended only to allow the employer to mitigate punitive damages. Id. They provided a potential liability 12 shield only for conduct amounting to employer negligence under subdivision (13)(b)(3): Regarding the first two instances, an employer’s antidiscrimination policies and procedures may be considered “in mitigation of the amount of civil penalties or punitive damages” recoverable in a civil action (see Administrative Code of City of NY § 8-107 [13] [e]). As a result, even in cases where mitigation applies, compensatory damages, costs and reasonable attorneys’ fees are still recoverable. Further, an employer’s antidiscrimination policies and procedures—which are at the heart of the Faragher-Ellerth defense—shield against liability, rather than merely diminish otherwise potentially recoverable civil penalties and punitive damages, only where an employer should have known of a non-supervisory employee's unlawful discriminatory acts (id.). Zakrzewska, N.Y.3d at 479-80. These “interrelated set of provisions” under subdivision (13), are as much at odds with the safe harbor from punitive damages provided in Kolstad11 as they are with the Faragher-Ellerth safe harbor. Section 8-107(13)(d) provides: d. Where liability of an employer has been established pursuant to this section and is based solely on the conduct of an employee, agent, or independent contractor, the employer shall be permitted to plead and prove to the discriminatory conduct for which it was found liable it had: 11 As the Second Circuit noted in the Certification: Under the Title VII standard, “[p]unitive damages are limited . . . to cases in which the employer has engaged in intentional discrimination and has done so ‘with malice or with reckless indifference to the federally protected rights of an aggrieved individual.’” Chauca v. Abraham, 841 F.3d 86, 90-91 (2d Cir. 2016) (quoting Kolstad v. Am. Dental Ass’n, 527 U.S. 526, 529–30 (1999)) (quoting 42 U.S.C. § 1981a(b)(1)). 13 (l) Established and complied with policies, programs and procedures for the prevention and detection of unlawful discriminatory practices by employees, agents and persons employed as independent contractors, including but not limited to: (i) A meaningful and responsive procedure for investigating complaints of discriminatory practices by employees, agents and persons employed as independent contractors and for taking appropriate action against those persons who are found to have engaged in such practices; (ii) A firm policy against such practices which is effectively communicated to employees, agents and persons employed as independent contractors; (iii) A program to educate employees and agents about unlawful discriminatory practices under local, state, and federal law; and (iv) Procedures for the supervision of employees and agents and for the oversight of persons employed as independent contractors specifically directed at the prevention and detection of such practices; and (2) A record of no, or relatively few, prior incidents of discriminatory conduct by such employee, agent or person employed as an independent contractor or other employees, agents or persons employed as independent contractors. N.Y.C. Admin. Code § 8-107(d). These detailed standards require a charge on punitive damages when plaintiff prevails under sections 8-107(13)(b)(1)-(3), and establish the content of that charge: e. The demonstration of any or all of the factors listed above in addition to any other relevant factors shall be considered . . . in mitigation of civil penalties or punitive damages which may be imposed pursuant to chapter four or five of this title. . . . 14 N.Y.C. Admin. Code § 8-107(e). The City Law clearly provides a standard for determining when a plaintiff is entitled to a punitive damages charge, and it provides a road map for that charge. The trial court can simply instruct the jury that if it finds liability under subdivision (13)(b), it “may” impose punitive damages. See id. If it does so, it “shall” consider which subdivision (13)(d) good-employer factors have been proved by defendant, “in addition to any other relevant factors,” and that it must mitigate any award of punitive damages to the extent that it finds that the defendant has carried its burden of proof concerning such factors. See N.Y.C. Admin. Code § 8-107(d), (e). What this Court wrote in Zakrzewska v. New School is equally applicable in the instant case, because the same interrelated provisions are at issue: The New York City Council adopted section 8-107(13) in 1991 as part of a major overhaul of the NYCHRL. In a side-by-side comparison of then-current law with the proposed new law, the Report of the Council's Committee on General Welfare describes new section 8-107 (13) as providing for [s]trict liability in employment context for acts of managers and supervisors; also liability in employment context for acts of co-workers where employer knew of act and failed to take prompt and effective remedial action or should have known and had not exercised reasonable diligence to prevent. Employer can mitigate liability for civil penalties and punitive damages by showing affirmative anti-discrimination steps it has taken (1991 NY City Legis. Ann., at 187). Thus, section 8-107 (13)'s legislative history is consonant with its unambiguous language. 15 Zakrzewska, N.Y.3d at 480 (emphasis in original) (internal quotations omitted). Five years before the Restoration Act, in Thompson v. Am. Eagle Airlines, Inc., 2000 U.S. Dist. LEXIS 14932 at *30-35 (S.D.N.Y. Oct. 4, 2000), the court correctly construed subdivision (13), in a manner similar to the construction in Zakrzewska v. New School. The Thompson court rejected defendants’ attempt to import the Kolstad safe-harbor standard to avoid a jury trial on punitive damages. The court held that “the analysis under federal anti-discrimination laws cannot be used in those cases where the statutes differ.” Id. at *33. Thompson also rejected the argument that the statute authorized the court to dismiss plaintiff’s punitive-damages claims, because the defendants had proved that the good-employer element of subdivision (13)(d) were fulfilled. Id. at *32-33. The court held that “[i]n view of the explicit language that these factors are only to be considered as factors in mitigating punitive damages, they are not a complete defense sufficient to strike the claim for punitive damages on a motion for summary judgment.” Id. at *32.12 12 The Farias court distinguished Thompson based on plaintiff’s counsel’s mistaken description of subdivision (13), rather than the holding itself: “[Plaintiff] relies on a recent district court opinion, Thompson v. American Eagle Airlines, Inc., 2000 U.S. Dist. LEXIS 14932, 2000 WL 1505972 (S.D.N.Y. Oct. 6, 2000) . . . and argues that the Administrative Code is more permissive with respect to punitive damages because there is no articulated standard in the statute or the caselaw.” Farias v. Instructional Sys., 259 F.3d 91, 102 (2d Cir. 2001) (citation omitted). That is not what the Thompson court held. It held that “the analysis under federal anti- discrimination laws cannot be used in those cases where the statutes differ,” Id. at *33 and the 16 As discussed below, Amicus respectfully disagrees that the 2005 Restoration Act creates doubt whether Farias v. International Systems, Inc., 259 F.3d 91 (2d Cir. 2001) was overruled. However, Amicus believes that the text and legislative history of section 8-107(13), alone, make plain that no enhanced finding of scienter is required under subdivision (13). POINT II THE CITY COUNCIL LEGISLATIVELY OVERRULED FARIAS WITH THE PASSAGE OF THE 2005 RESTORATION ACT As the Certification correctly noted, the Restoration Act called into question the holding of Farias. Chauca, 841 F.3d at 91. The Certification questions whether the Restoration Act actually overruled Farias, because Farias was not mentioned by name in the legislative history. Id. at 92 (“Farias was not among the decisions expressly identified by the Council.”). Id. However it is clear that the Restoration Act overrules Farias, even though the case is not mentioned by name in the statute or legislative history. language of subdivision (13) only allowed mitigation of punitive damages, and was therefore incompatible with federal law, which provided a safe harbor. Thompson, 2000 U.S. Dist. LEXIS 14932, at *30-35. The Farias Court then corrected plaintiff, noting that Thompson prohibits the use of federal law to construe the City Law where it is “incompatible with the federal standard” Farias, 259 F.3d at 102. This should have lead to the same holding that the Thompson court reached. The Farias court did the opposite. It distinguished counsel’s wrong description of subdivision (13), rather than the actual language of subdivisions (13)(d) and (e): “[Thompson] does not inform the analysis when the local statute is silent as to the applicable standard,” id., and held it contained no punitive-damages standard, and therefore the court should rely on the federal-Kolstad standard. See Farias, 259 F.3d at 102. 17 There is a bit of irony here. Prior to the Restoration Act, because the Human Rights Law liberal construction requirements appeared only in the legislative history, courts dismissed them, and construed the City Law using federal and state standards.13 Now that the Council has expressly included within the statute direction on how the statute should be construed, a few courts have questioned whether the explicit naming in a Committee Report, of examples of incorrect decisions, amounted to a license to continue to abide by all the other decisions which did not accord the City Law proper construction. In other words, expressio unius est exclusio alterius. For instance, in the Certification the Second Circuit posited that the legislative history of the Restoration Act makes clear that it sought to override legislatively several judicial decisions that the Council thought had too narrowly construed the NYCHRL or that had established a federal standard more narrow than that intended under the NYCHRL. Indeed, it identified those decisions by name as ones the Restoration Act was intended to override. See The Council Report of the Governmental Affairs Division, Committee on General Welfare, on Prop. Int. No. 22-A at 4-6 (Aug. 17, 2005). This suggests that the Council was well aware of the specific cases it thought had misconstrued its human rights law, and importantly, Farias was not 13 See, e.g. McGrath v. Toys "R" Us, Inc., 3 N.Y.3d 421, 432-33 (2004) (“Primarily relying on the legislative history of the 1991 amendment to the New York City Human Rights Law, plaintiffs in this case argue that the Farrar standard should not be applied to attorney's fee claims under the local law notwithstanding the fact that the language in the fee provision is substantively indistinguishable from the federal attorney's fee statutes. We are unpersuaded. . . . ‘[T]hese statements merely reflect the broad policy behind the local law . . .’ [S]uch broad expressions of overriding policy offer no basis to overlook the textual similarities between the local law fee provision and the federal statutes . . .”) 18 among the decisions expressly identified by the Council. Chauca, 841 F.3d at 91-92. However, in the cited portion of the Committee Report above, at 4-6, only one cases is discussed, McGrath, and it is plainly used as an example: A number of recent judicial decisions underscore the need to clarify the breadth of protections afforded by New York City’s human rights law. For instance, in McGrath v. Toys “R” Us, Inc., 3 N.Y.3d 421 (2004), the Court of Appeals reasoned that broad statements regarding the intended liberal construction of the City’s human rights law are insufficient to justify interpretation of the law to afford broader rights than are protected under comparably worded state or federal laws. Comm. on Gen. Welfare, Report on Prop. Int. No. 22-A at 4-6 (Aug. 17, 2005) [hereinafter the 2005 Committee Report]. The 2005 Committee Report made it clear it was providing an example of a case, which should have accorded a more liberal construction of the City Law language than federal law, even though the language was similar to the federal language. See id.14 Other portions of the 14 This line of argument also fails because the Council made it clear in the passage of the 2005 Restoration Act (Local Law 85), that it was capable of articulating its intent to nullify a specific holding. To Section 8-502 (f), which previously merely authorized the court to award attorney's fees and costs to the prevailing party, was added that to be awarded fees, a prevailing party need not have obtained a judgment, only filed a lawsuit which was the catalyst for change. This was plainly a response to a single holding, Buckhannon Bd. & Care Home v. W. Va. Dep’t of Health & Human Res, 532 U.S. 598 (2001) (following Blacks Law dictionary, which defined prevailing party as one in whose favor a judgment is rendered). As the Committee Report clearly explained: “In addition to the clarifications regarding overall construction of the human rights law, Prop. Int. 22-A aims to encourage rigorous enforcement of the City’s human rights law by amending § 8-502 to remove any doubt that attorney’s fees may be awarded under the City’s human rights law in circumstances that differ from those under which they are awarded under similarly worded federal law.” Comm. on Gen. Welfare, Report on Prop. Int. No. 22-A at 5 19 legislative history make plain that individual cases were singled out only as examples of decisions that “failed to interpret the City Human Rights Law to fulfill its uniquely broad purposes, ignore [sic] the text of specific provisions of the law, or both.” Williams v. N.Y.C. Hous. Auth., 61 A.D.3d 62, 67 (1st Dep’t 2009) (quoting Council Member Annabel Palma, Statement of Annabel Palma at the meeting of the NY City Council at 41 (Sept. 15, 2005). The assumption that the City Council intended to accept a federal standard or case as applicable under the City Law, simply because it did not explicitly reject that standard or case in the City Law's legislation or legislative history, was rejected by the court in Williams in its discussion of Gallo v. Alitalia - Linee, 585 F. Supp. 2d 520 (S.D.N.Y. 2008).15 In Gallo, the court concluded that the failure of the Council to single out the “severe or pervasive” element of the federal-sexual harassment claim, despite many chances including passage of the Restoration Act, meant that the Council intended that the severe or pervasive standard continue to be used in City Law hostile work environment cases. Gallo, 585 F. Supp. 22 at 537 (“This Court declines to change the standard of law when the legislature elected (Aug. 17, 2005) (emphasis supplied), relied on in the Certification, see Chauca, 841 F.3d at 91- 92). 15 “Throughout this decision, we have referenced Gallo to illustrate types of analyses that have now been rejected by the Restoration Act. . . .” Williams v. N.Y.C. Hous. Auth., 61 A.D.3d 62, 79 n.28 (1st Dep’t 2009). 20 not to do so.”). The reasoning was similar to the construction the Certification posited, as discussed above. See Chauca , 841 F.3d at 91-92. The Williams court rejected the Gallo reasoning, explaining that the way that the Council responded to McGrath was not by dealing with the specific topic of the case (the availability of attorney's fees in circumstances where only nominal damages are awarded), but by changing the method of analysis applicable to all provisions of the law. . . In light of the foregoing, it is puzzling that Gallo would make the identical Council “could have done so” argument already specifically rejected by the Restoration Act Williams, 61 A.D.3d at 74 n.18. As the Certification notes,16 in Loeffler v. Staten Island Univ. Hosp., 582 F.3d 268, 278 (2d Cir. 2009), the Second Circuit embraced the Williams decision. In reversing the district court for relying on federal law to construe the City Law, it held that “cases that had failed to respect” the need to construe the City Law independently “were being legislatively overruled” by the Restoration Act. Id. at 278 (quoting Williams, 872 N.Y.S.2d at 31) (emphasis supplied).17 In 2016, the Council amended the City Law, in order to make it absolutely clear that such cases were no longer good law: 16 Chauca, 841 F.3d at 94. 17 Accord, Katz v. Adecco United States, Inc., 845 F. Supp. 2d 539, 552 (S.D.N.Y. 2012); Gabel v. Richards Spears Kibbe & Orbe LLP, 615 F. Supp. 2d 241 (S.D.N.Y. 2009) (citing Thompson v. American Eagle Airlines, Inc., 2000 U.S. Dist. LEXIS 14932, 2000 WL 1505972 (S.D.N.Y. Oct. 6, 2000)). 21 Cases that have correctly understood and analyzed the liberal construction requirement of subdivision a of this section and that have developed legal doctrines accordingly that reflect the broad and remedial purposes of this title include . . . Williams v. New York City Housing Authority, 61 A.D.3d 62, 872 N.Y.S.2d 27 (1st Dep't 2009). N.Y.C. Admin. Code § 8-130. Such cases include Farias, which relied on Kolstad to construe the very different language of subdivision (13). POINT III DIRECT LIABILITY OF INDIVIDUALS AND EMPLOYERS The Certification requests that this Court provide a standard for individual and employer liability for punitive damages, when liability arises directly, rather than pursuant to subdivision (13). A. Direct Individual Liability for Punitive Damages The fact that the City Law does not contain a specific provision concerning individual liability for punitive damages in private civil actions, separate from civil liability in administrative actions, is not necessarily an omission. Having granted to the Commission the power to award up to $125,000 in civil penalties against individuals, based simply on establishing liability, the Council may well have thought it unnecessary to again specify that liability alone is sufficient for the imposition of punitive damaged against individuals. See § 8- 22 126(a).18 In that same section the Council made it clear that a higher-scienter standard, such as malice, is only required if the Commission seeks to impose a civil penalty between $125,001 and $250,000. Id. However, should this Court conclude that the Council omitted to specify the scienter standard for imposition of punitive damages against individuals—in light of the clear evidence that the Council intended to allow the punishment of individuals with civil penalties, without proof of more than liability—this Court should imply that the scienter standard is simply proof of a violation of Section 8- 107(1). See, e.g., Baker v. Bd. of Educ., 70 N.Y.2d 314, 320 (1987) (implying a cause of action where the intent of the legislature was to create a cause of action separate from federal and State law, was clear: “the Taylor Law provides that the ‘fundamental distinctions between private and public employment shall be recognized, and no body of federal or state law applicable wholly or in part to private employment, shall be regarded as binding or controlling precedent.’ . . . This statutory role is the basis for the implied cause of action in favor of public employees against their unions for breach of the duty to represent all members 18 “[W]here the commission finds that a person has engaged in an unlawful discriminatory practice, the commission may, to vindicate the public interest, impose a civil penalty of not more than one hundred and twenty-five thousand dollars. Where the commission finds that an unlawful discriminatory practice was the result of the respondent’s willful, wanton or malicious act or where the commission finds that an act of discriminatory harassment or violence as set forth in chapter six of this title has occurred, the commission may, to vindicate the public interest, impose a civil penalty of not more than two hundred and fifty thousand dollars.” 23 fairly . . .”) (citation omitted) B. Direct Employer Liability for Punitive Damages NELA/NY joins in Point IV of the Anti-Discrimination Center, Inc.’s Amicus brief. Dated: August 31, 2017 Mamaroneck, New York Respectfully submitted, _________________________ Joshua Friedman Friedman & Houlding, LLP 1050 Seven Oaks Lane Mamaroneck, NY 10543 888-369-1119 Ext. 4 On behalf of Amicus Curiae: National Employment Lawyers Association/New York 39 Broadway, Suite 2420 New York, New York 10004 (212) 317-2291 A A .I A A U l UBUipaiJj Bnqsof ~T&~n NEW YORK STATE COURT OF APPEALS CERTIFICATE OF COMPLIANCE I hereby certify pursuant to 22 NYCRR PART 500.1(j) that the foregoing brief was prepared on a computer using Microsoft Word 2011. A proportionally-spaced typeface was used, as follows: Name of typeface: Times New Roman Point size: 14 Line spacing: Double The total number of words in this brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citations, proof of service, certificate of compliance, corporate disclosure statement, questions presented, statement of related cases, or any authorized addendum containing statutes, rules, regulations, etc., is 5320 words. Dated: August 31, 2017 Mamaroneck, New York Respectfully submitted, _____________________________ Joshua Friedman FRIEDMAN & HOULDING, LLP 1050 Seven Oaks Lane Mamaroneck, NY 10543 888-369-1119 Ext. 4 P imMAM A uni 11 niMr, i i On behalf of Amicus Curiae: National Employment Lawyers Association/New York 39 Broadway, Suite 2420 New York, New York 10004 (212) 317-2291