Federal Practice Update – Recent Decisions From The Federal Court

April 01, 2004

This month we review four decisions rendered by the Judges of the Eastern District of New York, Central Islip Courthouse, involving federal practice and procedure. We first consider a decision by the Honorable Denis R. Hurley granting a motion to dismiss for failure to effect timely service of a complaint. Next, we review two decisions by the Honorable Arthur D. Spatt: one granting summary judgment dismissing a civil complaint alleging criminal violations, and a second applying the Rooker-Feldman and Younger abstention doctrines. Finally, we review a decision by the Honorable Leonard D. Wexler considering the attachment provision of the Terrorism Risk Insurance Act of 2002.

In Toner v. Suffolk County Water Auth., No. CV-99-7574 (DRH) (E.D.N.Y. Feb. 4, 2004), plaintiff commenced an action on November 19, 1999 against the Suffolk County Water Authority claiming violations of the Americans with Disabilities Act (“ADA”) by filing a summons. The return of service indicated that only a summons was served, and not the complaint. After two years of inactivity in the case, Judge Hurley issued an order to show cause why the case should not be dismissed for failure to prosecute. Plaintiff responded, claiming he intended to prosecute the action. Months later, he moved for default. The court denied the motion for default, on the ground that there was no evidence that the complaint was ever timely served. Plaintiff ultimately submitted a return of service indicating the complaint was served on defendants on December 11, 2002, over two years after the action was commenced.

On defendants’ motion to dismiss for failure to effect timely service, the court held that plaintiff failed to show good cause for the two-year delay. Recognizing that the requirements of FRCP 4(m) are somewhat relaxed with pro se litigants, the court nevertheless found that no excuse for the delay was proffered. Furthermore, since the time limitation on plaintiff’s ADA had since run, the court’s dismissal was with prejudice.

In Garay v. U.S. Bancorp, No. 02-CV-4007 (ADS) (E.D.N.Y. Feb. 3, 2004), plaintiff, a consumer, brought an action against U.S. Bancorp claiming violations of various criminal statutes in connection with the issuance of a credit card to an imposter of plaintiff. The imposter incurred over $20,000 in charges, and the account became delinquent. Ultimately, U.S. Bancorp assumed the loss. Nevertheless, plaintiff brought an action claiming violations of the Identity Theft and Assumption Deterrence Act of 1998 (18 U.S.C. § 1028), the Mail Fraud statute (18 U.S.C. § 1341) and obstruction of justice, along with assorted state-law claims. Judge Spatt dismissed the federal claims on the ground no private right of action exists under the criminal statutes plaintiff relied upon. The court also declined to exercise supplemental jurisdiction over the remaining state-law claims. Finally, since the court found the complaint to be completely devoid of any viable cause of action, the court declined to permit plaintiff the opportunity to amend.

In Cogswell v. State of New York Hearing Examiner, No. 02-CV-4281 (ADS) (E.D.N.Y. Jan. 24, 2004), plaintiff brought an action against the hearing officer and various Sherriff’s Department employees based upon incidents claimed to have occurred in the context of a child support hearing arising out of Suffolk County Family Court. The court dismissed the amended complaint and granted leave to replead with specific directions. The defendants then moved to dismiss the second amended complaint which essentially claimed that plaintiff was excused from the child support hearing and that the hearing officer made a request to the family court judge that plaintiff be arrested. Plaintiff further alleges that various deputies sherriff broke into her home and falsely arrested her.

Considering the motion to dismiss, the court first looked to FRCP 8, which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Describing the second amended complaint as “verbose and somewhat disjointed”, the court concluded, however, that it did provide defendant adequate notice of the substance of the claims. Going to the merits of the motion, the court determined that the Rooker-Feldman doctrine barred challenge to any of the family courts’ determinations. Under the Rooker-Feldman doctrine, federal courts lack jurisdiction to review state court decisions, whether final or interlocutory. Only the Supreme Court may review a state court judgment. The doctrine also bars federal district courts from reviewing state court judgments involving claims that are “inextricably intertwined” with a state court’s determination. The court concluded that claims as to any family court determinations are barred by the Rooker-Feldman doctrine. The false arrest claim, however, was not. As to the false arrest claim, the court found that the hearing officer is entitled to absolute judicial immunity against damage claims and, accordingly, dismissed all claims against defendant Rodriguez. The court also based its dismissal of the complaint upon Younger abstention which requires federal courts to abstain from exercising jurisdiction when claims have or could have been presented in ongoing state judicial proceedings concerning important state interests.

In Weinstein v. The Islamic Republic of Iran, No. MISC. 02-237 (E.D.N.Y. Jan. 13, 2004), Judge Wexler was asked to determine the respective rights of assets in accounts maintained at Bank of New York, and whether the accounts were subject to attachment under the Terrorism Risk Insurance Act of 2002 (“TRIA”). The underlying action arises out of serious injuries, and the ultimate death of Ira Weinstein, who was a victim of a suicide bombing by the Hamas terrorist organization.

Plaintiffs had filed an action in the Federal District Court for the District of Columbia under the Foreign Sovereign Immunities Act which ultimately led to a judgment entered against defendants finding that they had provided tens of millions of dollars to Hamas for the execution of terrorist attacks, and holding defendants liable for $183.2 million. In October 2002, plaintiffs filed the judgment in the Eastern District of New York and served restraining notices on banks, including Bank of New York to aid in the enforcement of the judgment. BNY restrained and identified three accounts. The three accounts belonged to three Iranian banks. The banks threatened legal action against BNY if their restraints were not lifted.

The court was asked to consider application of the Terrorism Risk Insurance Act of 2002 (“TRIA”) which provides that when a person has obtained a judgment against a terrorist party on a claim based on an act of terrorism, the blocked assets of that terrorist party including any agency or instrumentality, is subject to execution or attachment. The banks argued that the assets in the BNY accounts are not “blocked assets” and that none of the banks is a “agency or instrumentality” under the TRIA. The court construed statutory language and legislative history of the TRIA and concluded that the banks’ assets at issue were not “blocked assets” under the TRIA, and did not reach the issue of whether the banks were “agencies or instrumentalities” under the statute.

The author is a Partner at Farrell Fritz, P.C., and a member of that firm’s Commercial Litigation Practice Group.

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