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Cavalieri v. TJH Medical Services, P.C.

United States District Court, Eastern District of New York

December 30, 2014

RALPH L. CAVALIERI, M.D., Plaintiff,
v.
TJH MEDICAL SERVICES, P.C., et al., Defendants.

MEMORANDUM AND ORDER

I. Leo Glasser Senior United States District Judge

Pending before the Court are Defendants’ objections to Magistrate Judge (“MJ”) Orenstein’s Report and Recommendation (“R&R”) that Defendants’ motion for leave to file an amended Answer, made after the deadline fixed in a scheduling order for filing such motions, be denied. For the following reasons, the R&R is REJECTED and Defendants’ motion is GRANTED.

BACKGROUND

Plaintiff, Dr. Ralph Cavalieri, commenced this action against his former employers, TJH Medical Services, P.C., (“TJH”) and the Jamaica Hospital Medical Center (“Hospital, ” together with TJH, “Defendants”) alleging age discrimination and retaliation in violation of the New York State Human Rights Law. See Compl., Dkt. No. 1. Through discovery, Defendants learned in early October 2014 that Plaintiff had printed and removed from Hospital grounds emails containing sensitive patient health information, in violation of the Hospital’s policy and HIPAA. See Defendants’ Objections to Report & Recommendation (“Objections”) at 2 (Dkt. No. 28). Based on this newly-discovered evidence of Plaintiff’s misconduct, Defendants sought to assert an “after-acquired evidence defense” by adding the following proposed amendment to their Answer: “Some or all of Plaintiff’s claims are barred by virtue of after-acquired evidence of Plaintiff’s wrongful and/or unlawful conduct.” See Letter Motion to Amend (Dkt. No. 21) at 1.

Defendants filed a motion to amend their Answer on October 9, 2014, after the August 29, 2014 deadline for such amendments set in the Scheduling Order. See id. On November 12, 2014, MJ Orenstein issued his Report and Recommendation (“R&R”), which recommended that the Court deny Defendants’ request. See Dkt. No. 25. He concluded that (1) the proposed amendment was futile and (2) Defendants failed to show “good cause” to belatedly amend their Answer. See id. Defendants filed their Objections to the R&R on December 1, and Plaintiff filed his Opposition to Defendants’ Objections on December 10 (Dkt No. 31).

STANDARD OF REVIEW

“For dispositive matters, the district court reviews de novo the parts of the R&R to which the parties object.” Louis v. Metro. Transit Auth., No. 12 Civ. 6333, 2014 WL 5311455, at *1 (E.D.N.Y. Oct. 16, 2014) (citing Fed.R.Civ.P. 72(b)(3)). District courts in this Circuit have held that a magistrate judge’s denial of a motion to amend a pleading should be treated as dispositive. See id.; see also Moss v. Stinnes Corp., No. 92 Civ. 3788, 1995 WL 62685, at *1 (S.D.N.Y. Oct. 25, 2005); Children First Found., Inc. v. Martinez, No. 04-CV-0927, 2007 WL 4618524, at *4 (N.D.N.Y. Dec. 27, 2007) (“a [magistrate judge’s] denial of a motion to amend is dispositive where the denial is based on futility . . .”). Thus, the Court reviews the R&R de novo.

DISCUSSION

I. Futility of the Amendment

Defendants’ amendment purports to bar “some or all of Plaintiff’s claims” by virtue of the evidence of Plaintiff’s wrongdoing, which they discovered after his employment ended.[1] Yet, according to the Supreme Court, such “after-acquired” evidence of an employee’s misconduct cannot bar claims of employment discrimination. See Greene v. Coach, Inc., 218 F.Supp.2d 404, 413 (S.D.N.Y. 2002) (citing McKennon v. Nashville Banner Publ’g Co., 513 U.S. 352, 360-61 (1995)). Rather, it limits only the scope of recovery, i.e., front pay and back pay for the period after the employer learned of the employee’s wrongful conduct. See McKennon, 513 U.S. at 360-62. With respect to the limitation on back pay, the Court in McKennon explained:

The object of compensation is to restore the employee to the position he or she would have been in absent the discrimination, but that principle is difficult to apply with precision where there is after-acquired evidence of wrongdoing that would have led to termination on legitimate grounds had the employer known about it. Once an employer learns about employee wrongdoing that would lead to a legitimate discharge, we cannot require the employer to ignore the information, even if it is acquired during the course of discovery in a suit against the employer and even if the information might have gone undiscovered absent the suit. Id. at 362.

It made clear that “the employee’s wrongdoing becomes relevant not to punish the employee, ” but rather to “take due account of the lawful prerogatives of the employer in the usual course of its business.” Id. at 361.

Defendants’ ambiguous terminology has caused analytic difficulty in resolving this discrete issue. They seek to plead their after-acquired evidence defense as follows: “some or all of Plaintiff’s claims are barred by virtue of after-acquired evidence of Plaintiff’s wrongful and/or unlawful conduct.” Letter Motion to Amend at 1 (emphasis added). However, the evidence only limits certain damages, namely front pay and back pay for the period after Defendants learned of Plaintiff’s wrongful conduct. Defendants argue that they are not attempting to limit their liability entirely (as the R&R concludes) and state that “the limitations of the after acquired evidence doctrine are not in dispute.” See Objections at 4.

Although Defendants’ pleaded terminology is imprecise, their after-acquired evidence defense is not substantively futile. If the Answer were amended, it would preclude Plaintiff from recovering back pay for the period after October 2014, when Defendants first learned of his misconduct, which allegedly would have been grounds for termination.[2] “Once an employer learns about employee wrongdoing that would lead to a legitimate discharge, [the court] cannot require the employer to ignore the information.” See McKennon, 513 U.S. at 362. Defendants ...


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