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Fund v. City of New York

United States District Court, S.D. New York

May 19, 2014

JERRY FUND, et al., Plaintiffs,
CITY OF NEW YORK, et al., Defendants.



Plaintiffs Jerry Fund and the corporation he owns, Automatic Meter Reading Corporation, are respondents in a pending administrative action before the New York City Commission on Human Rights (the "Commission"). They are presently before the Court seeking a temporary restraining order against the Commission: they allege that Defendant Patricia Gatling, Chair and Commissioner of the Commission, made public comments indicating she had prejudged the merits of the allegations against them and, in so doing, made it impossible for them to receive fair consideration from the Commission. The Court concludes that, pursuant to Younger v. Harris and Sprint Communications, Inc. v. Jacobs , it must abstain from considering Plaintiffs' application.


A. Factual Background

1. The Commission Generally

The Commission exists and is administered pursuant to New York City Administrative Code §§ 8-101 to 8-131. It consists of nine Commissioners, one of whom, Defendant Gatling, serves as its Chair and is the sole paid Commissioner. N.Y.C. Admin. Code § 8-103. The other eight Commissioners are unpaid. Id. Each Commissioner is appointed by and serves at the pleasure of the Mayor. Id. Five Commissioners hold master's or doctorate degrees, and three hold law degrees. ( See generally Pyatt Decl. 9).

The Commission can receive complaints filed by aggrieved individuals or file complaints on its own initiative. N.Y.C. Admin. Code § 8-109. Regardless of who first files the complaint, the Commission then conducts an investigation into the allegations, a process pursuant to which it has subpoena power. Id. § 8-114. When an initial complaint is filed by an individual (as opposed to by the Commission itself), the Commission is charged with determining, as a result of its investigation, whether probable cause exists to believe that the alleged misconduct took place. Id . § 8-116. If so, it refers the complaint to an administrative law judge ("ALJ") for a formal hearing. Id. [2]

Parties referred to an ALJ are subject to rules of procedure that enable them to take discovery and conduct motion practice. N.Y.C. Admin. Code § 8-117. Ultimately, a formal hearing on the complaint is held before the AL I, at which the parties may present testimony and other evidence. Id . § 8-119. At this hearing, the case in support of the complaint is presented by the Commission's prosecutorial bureau. Id. The ALJ then issues conclusions of law and proposals for relief in the form of a Report and Recommendation. Id. § 8-120.

The participants in the hearing are both invited to provide comments on the ALJ's Report and Recommendation. (Pyatt Decl. ¶ 3). The Commission's Deputy General Counsel then reviews the entire hearing record, as well as the Report and Recommendation, and prepares a proposed final decision and order that takes into consideration the applicable local, state, and federal law, as well as prior Commission determinations. ( Id. at ¶¶ 4-6). The Report and Recommendation, the comments of the parties, and the proposed final decision and order are then submitted to a panel comprising three members of the Commission. ( Id. at ¶ 7). The Chair of the Commission, Commissioner Gatling, is typically a member of the panel, and two other Commissioners are selected at random. ( Id. ). Commissioner Gatling's involvement is not, however, a precondition to a panel's review of any given Report and Recommendation, and a panel constituted without Commissioner Gatling has undiminished power to issue final decisions and orders. ( Id. at ¶ 8).

The three-member panel then reviews the record and proposed decision and order and makes any changes to the proposed decision and order it deems necessary. (Pyatt Decl. ¶ 10).[3] If the panel concludes that the alleged discrimination took place, it must state its findings of fact and conclusions of law and issue an order to the accused party to remediate the wrong. N.Y.C. Admin. Code § 8-120. This order can require action including, but not limited to, hiring, reinstatement or upgrading of employees, award of back pay and front pay, and payment of compensatory damages. Id. This constitutes a final order that is subject to review in state court. Parties may file a "special proceeding" expressly provided in the Administrative Code to review these final orders. Id. at § 8-123. Parties may also bring an action under Article 78 of the New York Civil Practice Law and Rules. See Univ. Club v. City of New York, 842 F.2d 37, 40 (2d Cir. 1988) (explaining that the application of city law by the Commission can be challenged via a state court Article 78 proceeding).

2. The Commission Proceeding Giving Rise to this Action

On or about May 4, 2011, an individual named Monica Cardenas filed a complaint with the Commission against Plaintiffs, alleging certain violations of the New York City Human Rights Law, including sexual harassment, gender discrimination, and the creation of a hostile work environment. (Okereke Decl. Ex. A). Plaintiffs responded to this administrative complaint, denying any wrongdoing. ( Id. at Ex. B). The parties then submitted documentary evidence to the Commission; the Commission, through its Enforcement Division, conducted an investigation into the complaint. ( Id. at ¶ 7). The parties also participated in a fact-finding hearing before an ALJ involving the presentation of testimony and other evidence. ( Id. at ¶¶ 8-9). After this hearing, the ALJ issued a Report and Recommendation on March 14, 2014, finding in favor of the claimant and assessing back pay, front pay, and damages against Plaintiffs in the total of approximately $294, 806 with certain adjustments for interest and present value, and a $75, 000 civil penalty to be paid to the City. ( Id. at Ex. C).

The complainant and Plaintiffs were notified by letter dated March 25, 2014, that each side had an opportunity to submit comments to the Commission regarding the ALJ's Report and Recommendation by April 14, 2014. (Okereke Decl. Ex. D). On March 27, 2014, Plaintiffs requested and received an extension of time to submit their comments until May 15, 2014. ( Id. at Ex. E). This deadline has two consequences: (i) it is the last opportunity for Plaintiffs to submit their comments on the ALJ's Report and Recommendation, after which such comments will be barred; and (ii) only after this deadline will the Commission begin its review of the ALJ's Report and Recommendation preparatory to issuing a final decision and order. ( Id. at ¶ 16; May 14 Tr. 3:7-17).

The New York Daily News obtained a copy of the ALJ's Report and Recommendation and contacted Commissioner Gatling to seek her comments for publication. On March 17, 2014, the Daily News printed a story about the matter reporting the following comments attributed to Commissioner Gatling:

This egregious case of sexual harassment [sends] a clear measure through record damages and a high fine... that this type of activity is illegal in New York City and will not be tolerated.... What the complainant endured over years in order to keep her job is something no one should have to go through or even tolerate.

(Compl. Ex. 1).

B. Procedural Background

On April 25, 2014, Plaintiffs filed this action pursuant to 42 U.S.C. § 1983, alleging violations of their rights under the Fifth and Fourteenth Amendments. (Compl. ¶ 6). In particular, Plaintiffs allege that Commissioner Gatling's public statements, made before the parties had submitted comments on the ALJ's Report and Recommendation (and, by extension, before the Commission had begun to consider that Report and Recommendation), violated their rights to equal protection and procedural due process by "prejudging" their guilt. ( Id. at ¶ 19). Plaintiffs seek money damages and injunctive relief. ( Id. at ¶¶ 19, 22). Of note, Plaintiffs contend that the violations of their rights created by Commissioner Gatling's statements are so severe that they are "not curable, " requiring dismissal of the City administrative action in its entirety. ( Id. at ¶ 22).

The Complaint was filed with the Court on April 25, 2014, but not served on Defendants until May 1, 2014. (Dkt. #3). Several days later, on May 5, 2014, counsel for Plaintiffs reached out to the Deputy General Counsel of the Commission, Rudolph Pyatt, and requested that the Commission consent to a stay of the pending administrative action "pending the determination" of this litigation. (Honig Decl. Ex. 2). The next day, May 6, 2014, Pyatt responded that the Commission would not consent to a stay. ( Id. ). Pyatt further informed counsel for Plaintiffs that Commissioner Gatling would "play no role in the consideration or decision and order of this case, " and that a panel of three other Commissioners would "review the matter and render a decision and order without Commissioner Gatling's input." ( Id. ).

Curiously, given the emergent relief they now seek, Plaintiffs took no further action until May 13, 2014. On that day, Plaintiffs filed a motion with the Court for a temporary restraining order and preliminary injunction, seeking to delay the deadline for their submission of comments and, correspondingly, prevent the Commission from beginning its review of the ALJ's Report and Recommendation. (Honig Decl. ¶¶ 2-3; Okereke Decl. ¶ 16). The Court directed Defendants to respond in writing to this application later that day and held oral argument the following morning, May 14, 2014. At that oral argument, Defendants indicated that the Commission would postpone the May 15 deadline to May 22, so that the Plaintiffs would have time to prepare their comments for the Commission's review if injunctive relief were not granted. (May 14 Tr. 49:4-5).


Plaintiffs contend not merely that Commissioner Gatling cannot act as an impartial arbiter of their liability, but also that all other Commissioners and employees of the Commission are so tainted by her public comments that they must be enjoined from taking any action regarding the pending administrative action against Plaintiffs. Defendants disagree; separately, Defendants argue that Younger abstention should prohibit the Court from interfering in the Commission's proceedings. The Court agrees with Defendants that Younger applies here. Plaintiffs' motion for emergent relief is denied on the grounds of abstention and the Court will not consider its merits of Plaintiffs' application. As Younger abstention is mandatory where applicable, Spargo v. New ...

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