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CASALE v. METROPOLITAN TRANSPORTATION AUTHORITY

December 16, 2005.

NICHOLAS CASALE, Plaintiff,
v.
METROPOLITAN TRANSPORTATION AUTHORITY, PETER S. KALIKOW, Chairman, METROPOLITAN TRANSPORTATION AUTHORITY, KATHERINE N. LAPP, Executive Director, METROPOLITAN TRANSPORTATION AUTHORITY, MARTIN SANSVERIE, Inspector General, METROPOLITAN TRANSPORTATION AUTHORITY, and GARY DELLAVERSON, Director, Labor Relations, METROPOLITAN TRANSPORTATION AUTHORITY, Defendants.



The opinion of the court was delivered by: MICHAEL MUKASEY, Chief Judge

AMENDED OPINION AND ORDER

Defendants Metropolitan Transportation Authority ("MTA") and persons sued as MTA executives*fn1 removed this case from New York State Supreme Court, New York County, where plaintiff Nicholas Casale had initiated a special proceeding under Article 78 of New York's Civil Practice Law and Rules*fn2 and then amended his petition to create a hybrid special proceeding and action by adding a claim under 42 U.S.C. § 1983. In the initial verified petition ("original petition"), plaintiff alleged that the decision to terminate his employment as Deputy Director of Security for the MTA was arbitrary and capricious, in bad faith, and contrary to law, and that defamatory information disseminated with the stated reasons for his termination violated his Fourteenth Amendment right to due process; he sought reinstatement, back pay, and a name-clearing hearing. (Verified Pet. (Pet.), ¶¶ 49, 56) Plaintiff's amended verified petition/complaint ("amended petition") includes an additional claim for damages under § 1983 predicated on the same alleged due process violation. (Am. Verified Pet./Compl. (Am. Pet.), ¶ 58) Plaintiff now moves to remand the case to state court on the ground that defendants' failure to remove within 30 days of receiving the original petition requires application of the time bar imposed by 28 U.S.C. § 1446 (b). Plaintiff also seeks attorney fees, costs, and disbursements pursuant to 28 U.S.C. § 1447 (c) for improper removal. For the following reasons, plaintiff's motion for remand is granted, but the request for attorney fees, costs, and disbursements is denied.

  I.

  The underlying dispute in this case began when plaintiff was fired from his position as Deputy Director of Security for the MTA on May 9, 2003. (Id. ¶ 2) However, plaintiff's motion for remand does not relate to the circumstances leading to his dismissal, but only to the events thereafter.

  On or about September 8, 2003, plaintiff commenced an Article 78 proceeding against defendants in New York State Supreme Court, New York County. (Affirmation of Steven J. Hyman (Hyman Aff.), ¶ 4) Plaintiff's notice of petition stated that he would move the Court for "a judgment pursuant to CPLR Article 78, CPLR §§ 7803 and 7804." (Notice of Pet.) The original petition asserted two claims. The first contained the following two paragraphs:
Petitioner is entitled to a name-clearing hearing to vindicate his Fourteenth Amendment right not to be deprived of his liberty interest in order to demonstrate the falsity of the stigmatizing charges made by respondents that "might seriously damage his standing and associations in the community" or that "might impose on him a stigma or other disability that forecloses his freedom to take advantage of other employment opportunities."
Respondents have otherwise violated Petitioner's rights under the Fourteenth Amendment of the Constitution of the United States. (Pet., ¶¶ 49, 50)
The second claim alleged that "[p]etitioner's termination was arbitrary and capricious and otherwise in bad faith in that it was without legitimate basis in fact or law," and so he should be reinstated and awarded back pay. (Id. ¶¶ 56-57)

  On September 15, 2004, defendants (then respondents) received a notice of motion and a supporting affirmation that disclosed plaintiff's (then petitioner's) intent to move for permission to amend the original petition. (Notice of Removal, ¶ 1) Annexed to the notice and affirmation was a copy of the amended petition. (Id. ¶ 2) The affirmation stated that, in response to a recent Second Circuit decision holding that compensatory damages were available in § 1983 actions where the defendant had failed to provide a name-clearing hearing, plaintiff wished to add a § 1983 claim and seek money damages in addition to other available relief. (Hyman Aff., ¶¶ 6-9 (citing Patterson v. City of Utica, 370 F.3d 322 (2d Cir. 2004)))

  At a State Supreme Court appearance on December 21, 2004, counsel for defendants MTA, Peter Kalikow, Katherine Lapp, and Gary Dellaverson said that they did not oppose the motion to amend, but could not stipulate to the amendment for fear that they would waive their right to removal should they do so. (Decl. of Neil H. Abramson ("Abramson Decl.), ¶¶ 4-5) Although the parties submitted a proposed order granting the amendment as unopposed, the Court instead ruled on the motion to amend in a decision and order dated April 7, 2004. (Id. ¶¶ 5-7)

  In addition to granting the motion to amend, the same decision and order addressed the substantive issues of the case. First, the Court held that plaintiff had established a "stigma plus" due process violation and was therefore entitled to a name-clearing hearing. (Notice of Removal, Ex. 2, 10-11) Second, the Court ordered an evidentiary hearing on whether the MTA's decision to fire plaintiff was arbitrary and capricious. (Id. at 12-14) The Court also determined that the Office of Inspector General is not distinct from the MTA, and therefore denied a motion to dismiss by defendant Sansverie. (Id. at 14) The decision and order was filed as a "non-final disposition" on April 12, 2005, and a notice of entry was served on defendants on April 15, 2005. (Abramson Decl., ¶ 7)

  On April 22, 2005, in a conference before the State Supreme Court, plaintiff's attorneys stated that plaintiff intended to proceed with the amendment, and defendants' counsel advised the Court that they would be removing the case to federal court. (Notice of Removal, ¶ 4) The Court told the parties that it would not move forward until the question of removal had been resolved, and asked counsel for defendants to indicate in the notice of removal that the Court was prepared to proceed expeditiously pursuant to its decision and order. (Id.) Plaintiff served the amended petition on defendants that same day through a supplemental summons/notice of petition. (Abramson Decl., ¶ 7)

  The amended pleading contains three claims. The first two are identical to the claims in the original petition described above. (Am. Pet., ¶¶ 44-56) The third asserts that "[r]espondents deprived Mr. Casale of a liberty interest without due process in violation of the Fourteenth Amendment of the Constitution of the United States and 42 U.S.C. § 1983, by making stigmatizing statements about him when terminating him from the MTA and failing to give him a name-clearing hearing." (Id. ¶ 58) In addition to the relief sought in the original petition, the amended petition seeks a money judgment for lost wages, damage to reputation, standing, and business activities, and physical and emotional distress resulting from defendants' failure to provide a name-clearing hearing. (Id. ¶¶ 4, 60-61)

  On April 28, 2005, defendants filed a notice of removal in this court pursuant to 28 U.S.C. §§ 1441 and 1446. The notice states that the first and third claims in the amended petition fall within this court's federal question jurisdiction under 28 U.S.C. § 1331, and that supplemental jurisdiction under 28 U.S.C. § 1367 is appropriate with respect to any purely state claims within the pleading. (Notice of Removal, ¶¶ 6-9)

  II.

  Plaintiff moves to remand this case to New York State Supreme Court, New York County, on the ground that defendants' notice of removal was untimely because it was not filed ...


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