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United States v. Raff & Becker, LLP

United States District Court, E.D. New York

March 27, 2014

UNITED STATES OF AMERICA, ex rel., STATE OF NEW YORK, ex rel., WILLIAM J. ROLD, Plaintiff,
v.
RAFF & BECKER, LLP; DAVID A. RAFF, ROBERT L. BECKER, M. PATRICIA SMITH, LEONARD D. POLLETTA, ANDREW M. CUOMO, AND STATE OF NEW YORK. Defendants.

MEMORANDUM AND ORDER

DORA L. IRIZARRY, District Judge.

This action was commenced by Relator-Plaintiff Hon. William J. Rold ("Plaintiff") on behalf of himself, the State of New York, and the United States, pursuant to the qui tam provisions of the New York State False Claims Act, N.Y. State Fin. §§ 187-194 and the False Claims Act, 31 U.S.C. §§ 3729-33 ("Federal False Claims Act"). Plaintiff alleges that New York State government defendants colluded with David A. Raff, Robert L. Becker, and Raff & Becker, LLP (collectively, the "Private Law Firm Defendants") to divert federal money meant for the unemployment compensation program in New York. Plaintiff also asserts personal claims against defendants for civil rights violations because they allegedly conspired to retaliate against Plaintiff by removing him as Chief Judge of the Unemployment Insurance Appeals Board ("UIAB"), when he attempted to blow the whistle on the activity. Defendants moved to transfer the action to the United States District Court for the Southern District of New York (the "SDNY") pursuant to 28 U.S.C. § 1404(a). Plaintiff opposes the motion. For the reasons set forth below, defendants' motion is granted.

BACKGROUND

I. Parties

Plaintiff was the Chief Judge of the UIAB from September of 2007 until he was removed on January 6, 2010. (Amend. Complaint ("Compl.") ¶¶ 5, 24, Doc. Entry No. 64.) Unemployment compensation is administered by the New York State Department of Labor and claimants who are dissatisfied with a decision on their claim may request a fair hearing before the UIAB. ( Id. ¶ 29.) Defendant Raff & Becker, LLP is a law firm with its main offices located in New York County. ( Id. ¶ 6.) Defendants David A. Raff and Robert L. Becker were partners of Raff & Becker, LLP during the relevant time period. ( Id. ¶ 7.) Defendant M. Patricia Smith is the Solicitor of the United States Department of Labor and was the Commissioner of the New York State Department of Labor during the relevant time period. ( Id. ¶ 9.) Defendant Leonard D. Polletta is the Chairman of the UIAB and was in that position during the relevant time period. ( Id. ¶ 10.) Defendant Andrew M. Cuomo is the Governor of the State of New York and was the Attorney General of the State of New York during the relevant time period. ( Id. ¶ 11.)

II. Relevant Facts and Procedural History

This dispute arose out of disagreements over the implementation of a consent decree in the related consolidated cases of Barcia v. Sitkin, 79 Civ. 5831 (SDNY), Espinosa v. Sitkin, 79 Civ. 5831 (SDNY), New York State Teachers v. Sitkin, 79 Civ. 5899 (SDNY), and Municipal Labor Committee v. Sitkin, 79 Civ. 5899 (SDNY)[1] (collectively, the " Barcia Litigation") and the subsequent alleged retaliation for Plaintiff's whistle-blowing efforts. The Barcia Litigation was a class action alleging violations of due process that was brought in the SDNY by the same Private Law Firm Defendants in this instant case against the New York State Department of Labor and the UIAB, on behalf of claimants who were denied unemployment insurance benefits. The cases were assigned to the late Honorable Robert L. Carter, U.S. District Judge for the SDNY, and subsequently transferred to Chief District Judge Loretta A. Preska. The parties in the Barcia Litigation settled the cases by consent decree in 1983, agreeing to structural injunctions to provide claimants due process protections. ( Id. ¶ 41.) The Private Law Firm Defendants have been involved in monitoring the injunction compliance for nearly 30 years and continue to do so today. ( Id. ¶ 43.) The Private Law Firm Defendants participate in the training of UIAB judges, review proposed changes to UIAB policy impacting the consent decrees, and write letters about decisions in individual cases. ( Id. ¶ 46.)

As part of the consent decree, the UIAB was to present an Amelioration Plan aimed at fixing violations compiled from data collected by the Private Law Firm Defendants. ( Id. ¶ 55.) Plaintiff initially was involved in developing the plan along with Defendants Smith and Polletta and established a Due Process Initiative to be implemented with the intended goal of ending disputes arising from the Barcia Litigation. ( Id. ¶¶ 54-56.) Plaintiff alleges that the government defendants did not provide sufficient resources to execute the Due Process Initiative and instead began negotiations with the Private Law Firm Defendants on an Amelioration Plan. ( Id. ¶ 58.) In 2009, the Private Law Firm Defendants proposed an Amelioration Plan that Plaintiff opposed as costly and burdensome. ( Id. ¶ 64.) Plaintiff alleges that, as a result of his opposition to the proposed Amelioration Plan, Defendant Polletta began to subject Plaintiff to an increasingly hostile work environment. ( Id. ¶ 66.) On January 6, 2010, Defendant Polletta relieved Plaintiff of his duties as Chief Judge of the UIAB, days before the final Amelioration Plan was to be presented to the UIAB Board Members. ( Id. ¶ 107.)

On January 6, 2010, the government defendants agreed to pay the Private Law Firm Defendants $410, 000 for attorneys' fees, and Judge Carter "So Ordered" the stipulation on March 10, 2010. ( Id. ¶ 138.) In 1984, after adoption of the initial consent decree, the parties to the Barcia Litigation submitted a stipulation providing that the Private Law Firm Defendants would submit monthly statements and that the government defendants had ten days to object or the requested fees must be paid. ( Id. ¶ 140.) The stipulation was still in effect during Plaintiff's tenure as Chief Judge of the UIAB and Plaintiff believes it is still in effect today. ( Id. ¶ 141.) Plaintiff alleges that, during his tenure as Chief Judge of the UIAB, the Private Law Firm Defendants typically requested $70, 000-$90, 000 per month in on-going attorneys' fees and that between 1995 and 2003, the Private Law Firm Defendants received approximately $5.3 million, primarily for their monitoring services. ( Id. ¶ 144.)

On December 30, 2011, Plaintiff filed the instant action against the defendants in this Court, alleging that the government defendants colluded with the Private Law Firm Defendants to divert federal money meant for the unemployment compensation program in New York and that the government defendants retaliated against Plaintiff when he tried to report the situation, causing him loss of employment and medical benefits, depression, and stress, for all of which he now seeks declaratory and injunctive relief, treble damages, and attorneys' fees based on the Federal False Claims Act, New York False Claims Act, Constitution, New York Constitution, and the Family and Medical Leave Act. ( Id. at 66-71.)

On November 26, 2012, defendants moved to transfer the case to the SDNY pursuant to 28 U.S.C. § 1404(a). Plaintiff opposed the motion, asserting that deference should be given to his choice of forum and that defendants failed to establish that a motion to transfer should be granted. On April 5, 2013, the United States elected not to intervene as to the allegations in the original complaint pursuant to 31 U.S.C. § 3730(b)(4)(B). On December 28, 2012, Plaintiff filed an amended complaint under seal. On December 5, 2013, the United States elected not to intervene as to the allegations in the amended complaint. On December 18, 2013, Plaintiff filed an unsealed copy of the amended complaint. On December 24, 2013, Plaintiff indicated that he intends to proceed with the causes of action set forth in the amended complaint.

DISCUSSION

The transfer of venue statute provides that, "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). When making a motion to transfer venue, "[t]he party requesting transfer carries the burden of making out a strong case for transfer.'" Audiovox Corp. v. S. China Enter., Inc., 2012 WL 3061518, at *7 (E.D.N.Y. July 26, 2012) (quoting N.Y. Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 114 (2d Cir. 2010)); see also In re Hanger Orthopedic Group, Inc. Sec. Litig., 418 F.Supp.2d 164, 168 (E.D.N.Y. 2006). At the same time, "motions for transfer lie within the broad discretion of the district court and are determined upon notions of convenience and fairness on a case-by-case basis." In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)).

To determine whether a motion to transfer venue should be granted, the court must apply a two-pronged test: "(A) whether the action could have been brought in the proposed forum; and (B) whether the transfer would promote the convenience of parties and witnesses and would be in the interests of justice.'" EasyWeb Innovations, LLC v. Facebook, Inc., 888 F.Supp.2d 342, 348 (E.D.N.Y. 2012) (quoting Clarendon Nat'l Ins. Co. v. Pascual, 2000 WL 270862, at *2 (S.D.N.Y. Mar. 13, 2000)). The parties do not dispute that this action ...


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