United States District Court, S.D. New York
March 29, 2004.
NIDIA BARCIA, et al., Plaintiffs -against- LOUIS SITKIN, et al., Defendants; MUNICIPAL LABOR COMMITTEE, et al., Plaintiffs -against- LOUIS SITKIN, et al., Defendants
The opinion of the court was delivered by: ROBERT CARTER, Senior District Judge
Defendants seek a stay of the court's order of June 10, 2003
(Barcia v. Sitkin, 2003 WL 21345555 (S.D.N.Y. 2003) (Carter,
J.), pursuant to Rules 62(c) and (d), F.R.Civ.P., pending their appeal to
the United States Court of Appeals for the Second Circuit.
This case dates back to 1979 and concerns a 20-year-old consent decree,
familiarity with which is assumed. The plaintiff class of unemployment
insurance claimants originally brought suit challenging the procedures of
defendants, the New York State Unemployment Insurance Appeal Board ("The
Board"). The Consent Decree entered into by the parties provided for a
list of procedural safeguards to be implemented by the Board.
The court in Barcia v. Sitkin, 2003 WL 21345555 (S.D.N.Y.
June 10, 2003) (Carter, J.) ordered the following relief: 1) the Board
was enjoined from sending any reopening notices that failed to provide
specific reasons for reopening;*fn1 2) the Board was ordered to turn
over to plaintiffs any "draft" checklists or information about changes
made to final checklists;*fn2 and 3) the Board was ordered to produce
a random sample for
the 450 cases that were previously (but insufficiently)
reviewed.*fn3 The court also made a finding that the Board was not in
substantial compliance with the Consent Decree.*fn4 By way of remedy,
the court did not order defendants to adopt plaintiffs' proposed
amelioration plan because this was a drastic step and defendants had
shown recent good faith efforts towards compliance. Instead, the court
allowed defendants to come up with their own remedial plan as follows:
"Defendants are ordered to produce a report and plan within 90 days,
which at the very least should include (1) an analysis of compliance with
all provisions of its own former plans; (2) a new plan; (3) a
comprehensive system for tracking compliance with the provisions of the
new plan; and (4) a system of tracking the level of compliance with the
Decree." Barcia, 2003 WL 21345555 at *7.
A district court will consider the following factors when determining
whether to grant a stay of an injunction pending appeal: (1) whether the
movant will suffer irreparable injury absent a stay;*fn5 (2) whether a
party will suffer substantial injury if the stay is granted; (3) whether
the movant has established a substantial possibility, which need not be a
likelihood, of success on appeal; and (4) the public interest.
United States v. Private Sanitation Indus. Ass'n of Nassau/Suffolk.
Inc., 44 F.3d 1082, 1084 (2d Cir. 1995). The burden of establishing
a favorable balance of these factors is a heavy one and more commonly
stay requests will be denied for not meeting the standard. 11
Charles A. Wright & Arthur R. Miller, Fed. Prac. & Proc.
Civ.2d § 2904.
I. IRREPARABLE INJURY TO MOVANT
Defendants contest the scope of the court's June 10, 2003 Order
("Order"). They argue that requiring the Board to expend resources when
relief may be modified or limited on appeal will cause unnecessary and
substantial injury to the Board and the public it serves. The Board will
need to spend resources on a new computerized or manual system that will
identify which cases require reopening, and on preparing notices for each
case identified. This, it is argued, will divert "progressively
resources at a time when its caseload is substantially expanding
due to recent increased unemployment in the last few years.*fn6 (Defs.'
Mem. at 12.) Defendants argue that requiring maintenance of "draft"
checklists will require additional programming resources and will
increase the time in which current cases are processed. All of this will
require substantial assistance from the Labor Department and the Board's
computer technology staff, who are currently engaged in a "major
modernization project" that might be jeopardized by any diversion of
resources.*fn7 (Defs.' Mem. at 14.)
Defendants, however, do not offer any evidence of the financial,
administrative, or personnel burden they claim.*fn8 Even if they had
offered such evidence, their brief only purports to show "substantial
injury" rather than "irreparable injury." Plaintiffs point out and
defendants do not counter that the relief ordered will not divert the
attention of hearing and appeal ALJs from processing current cases,
because the work required will be performed by Board management and
support staff from the New York Department of Labor. Developing adequate
notices of reopening will not be burdensome, particularly if the Board
utilizes sample notices provided by plaintiffs. Nor should providing
with "draft" checklists for purposes of tracking any alterations to
the checklists be unduly burdensome or hamper the current claims
process.*fn9 Defendants kept and provided plaintiffs with such "drafts"
for 15 years before computerization, and assured plaintiffs and the court
that providing the drafts would continue. (Pls.' Mem. at 9.) Undoubtedly
there will be some additional burden and expense imposed by the
court-ordered relief. But such additional burden and expense do not
normally justify a denial of fundamental due process rights. Fuentes
v. Shevin, 407 U.S. 67, 92 n. 22 (1972); Goldberg v.
Kelly, 397 U.S. 254, 265-266 (1970); Rufo v. Inmates of
Suffolk County Jail, 502 U.S. 367, 392 (1992) (regarding
modification of consent decree). Furthermore, in this case any burden
imposed by the court's Order has not been shown to be "irreparable."
II. SUBSTANTIAL INJURY TO A PARTY
Defendants contend a stay of injunctive relief will not substantially
injure the plaintiffs because the Board will continue to comply with all
other provisions of the Consent Decree that are not on appeal; and that
granting a stay will save resources for both parties.
However, a stay will substantially injure members of the plaintiff
class. After 20 years of litigation the Board is still not in substantial
compliance with the Consent Judgment, a fact that belies any claim that
there is no ongoing injury to the plaintiff class. See supra
note 4. Defendants' own data reveals that the existing plan does not
work: for example, from 1991 through 2001 the violation rate remained
around 29%; the remedy
rate was far short of the Board's goal; the 2001 violation and
remedy rates were significantly higher than in 1998; and there is no
evidence that these rates were appreciably reduced in 2003 or will be
absent a new plan. (Pls. Mem. at 10-11.) The Board's recent caseload
increases, used by defendants to support their argument with respect to
dwindling resources, makes a stronger case for the view that now even
more claimants will be denied due process under the current system.
III. SUBSTANTIAL POSSIBILITY OF SUCCESS ON APPEAL
"[T]ribunals may properly stay their own orders when they have ruled on
an admittedly difficult legal question and when the equities of the case
suggest that the status quo should be maintained." Goldstein v.
Miller, 488 F. Supp. 156, 172 (D.C.Md. 1980). See also Caravel
Corp. v. Eisenberg, 1988 WL 120135 at *2 (S.D.N.Y. Oct. 31, 1988).
Defendants contend that "admittedly difficult legal question[s]"
present in this case and ripe for Appellate review are whether New
York State National Organization of Women v. Pataki, 261 F.3d 156
(2d Cir. 2001) ("NOW") requires an end to court-ordered
monitoring of a state agency by plaintiffs' private law firm; and whether
the principles of federalism and comity, newly-strengthened by recent
decisions of the U.S. Supreme Court,*fn10 require modification of the
However, as the court found in Barcia v. Sitkin, 2003 WL
21345555 at *3 (S.D.N.Y. June 10, 2003), these decisions, which may mark
an attitudinal shift in the Supreme Court, do not go so far as to change
the law applicable to this case. Furthermore, the NOW decision
is distinct from this case and may not be persuasive on appeal. The
NOW court concluded that because alternative procedures
in that case Article 78 proceedings were available to plaintiffs,
it could not be said that all remedies had been exhausted, and thus no
violation of due process could be found. In this case, "neither Article
78 nor any other proceeding will avail unemployment insurance claimants."
(Pls.' Mem. at 6.) Furthermore, whereas NOW was primarily
concerned with reducing the huge backlog of cases before the New York
State Division of Human Rights, here the fundamental due process rights
of present and future claimants before the Board is primarily at
issue.*fn12 This is a standard enforcement case that does not involve
unique, untested, or complex legal issues. The Board agreed by Consent
Decree to provide basic due process during its hearings and the plaintiff
class has a right to see it enforced.*fn13 Defendants fail to show a
substantial possibility of success on appeal.
IV. PUBLIC INTEREST
Defendants assert that a stay is in the public interest because it will
conform to the principles of federalism and comity, and because it will
halt injunctive relief that will significantly burden a state agency.
Principles of federalism and comity, however, are not part of the
analysis of whether to modify a consent decree; rather, they
come into play only after a court has determined that a modification is
warranted. Rufo v. Inmates of Suffolk County Jail,
502 U.S. 367, 392, n. 14 (1992). Furthermore, as discussed above, defendants
did not submit evidence to support their view that the injunctive relief
will significantly burden the Board or impact the work of its ALJs. The
court, therefore, finds the public interest will be better served by a
denial of the stay.
The motion for a stay is denied, except in so far as the retroactive
relief to which plaintiffs have not objected for purposes of this stay is
concerned. Defendants have not met their heavy burden of establishing
that the balance of the equities tilts in their favor. There is no
evidence that the injunctive relief ordered will significantly burden the
Board. This is particularly so considering that plaintiffs have dropped
an objection they could have made to a stay of retroactive relief, thus
substantially reducing the overall burden imposed upon the Board. Even if
a significant burden had been shown, there is no proof or even allegation
that defendants will suffer "irreparable injury" if a stay is not
In contrast, a substantial burden upon the plaintiff class is
evident from violation rate statistics and the court's previous findings
of significant due process violations. At stake here are the due process
rights of unemployment insurance claimants. Given the protracted 20-year
history of this case and the longstanding failure to substantially comply
with the Consent Decree,*fn14 enforcement of the court's Order is the
best way to serve the public interest. A substantial possibility of
success on appeal has not been shown, and to the extent any possibility
of success exists, the other three factors weigh in favor of denying the
Defendants have 90 days from the date of this opinion to implement the
relief ordered by the court's June 10, 2003 opinion, notwithstanding the
above-mentioned retroactive relief which shall be stayed pending appeal.
IT IS SO ORDERED.