Alter v Oppenheimer & Co. Inc.

[*1] Alter v Oppenheimer & Co. Inc. 2005 NY Slip Op 50994(U) Decided on June 30, 2005 Supreme Court, New York County Gische, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 30, 2005
Supreme Court, New York County

IRINA ALTER, Plaintiff,

against

OPPENHEIMER & CO. INC. f/k/a FAHNESTOCK & CO. INC., and ERIC SHAMES, Defendants.



121188/03

Judith J. Gische, J.

Discussion

There are three separate actions pending in Supreme Court, New York County [*2]against the same defendant which all raise discrimination claims. The Supreme Court actions are before three separate judges. There is the present case with plaintiff Irina Alter, commenced on December 10, 2003 ["Alter"], a case before the Hon. Richard F. Braun [Andrea Bertoline v. Oppenheimer & Co. Inc. f/k/a Fahenstock & Co. Inc. and Eric Shames, Index No. 121187/03], also filed on December 10, 2003 ["Bertoline"] and another before the Hon. Rolando T. Acosta [Christina Pellegrino v. Oppenheimer & Co. Inc. and Eric Shames, Index No. 101834/04], filed on May 21, 2004 ["Pellegrino"].

The plaintiff in each of the Supreme Court cases asserts that the defendant Oppenheimer & Co. condoned a hostile work environment that permitted Eric Shames, the corporate defendant's general counsel, to sexually harass them. In each case, Mr. Shames was the plaintiff's supervisor or manager [FN1].

On September 30, 2003, before any of the state cases were commenced, another former Oppenheimer employee (Josephine Chapple) filed a lawsuit in the United States District Court for the Eastern District of New York against the Oppenheimer company, and other defendants, claiming that they tolerated, created and condoned a hostile work environment in which she had been subjected to sexual harassment and employment discrimination. Josephine Chapple v. Fahnestock & Co. Inc., Eric Shames and Robert Pelham, No. 03-Civ-04989 (NGG)(JMA)] ["Chapple"]. Though the original verified complaint in the federal case has not been provided by either side for the court's review, Chapple has brought a motion in her case for permission to amend her complaint to assert additional grounds for relief including a class action claim. FRCP 15 (a); FRCP 23 (a), (b)(1) (3).

The amended complaint proposed by Chapple asserts causes of action for: intentional discriminatory treatment based on sex or gender, discriminatory treatment in the work place, retaliatory termination of employment for reasons related to sex or gender, and discriminatory treatment of a class because of sex or gender. Civil Rights Act of 1964, 42 USC §§1981, 2000e et. seq.; and New York State Human Rights Law, Exec Law §290 et seq.

The three state cases have hostile environment/sexual harassment claims in common, and all three plaintiffs seek punitive damages. Alter also asserts a claim for employment discrimination, because she was allegedly terminated due to her pregnancy. In addition to her hostile environment/sexual harassment claims, Bertoline asserts a claim for constructive discharge because she resigned from her job due to the alleged harassment she faced at work. Pellegrino asserts no other causes of action, aside from the one for hostile work environment/sexual harassment and punitive damages.

Defendants seek a stay of this state case [FN2] while the federal court decides whether Chapple will be allowed to assert a class action claim. Plaintiff not only [*3]opposes the stay, but she seeks consolidation of this case with the Bertoline and Pellegrino cases, based upon CPLR 602(a).

A motion for stay of proceedings is primarily addressed to court's discretion. CPLR §2201. Generally, an action in a state court will not be stayed pending determination of a federal action, "where it appears that the action sought to be stayed will have to be determined no matter which way the case in the federal jurisdiction is decided." Grand Central Building Inc. v. New York Harlem Railroad Company, 59 AD2d 207, 210 (1st Dept 1977). It is not necessary that the parties in the state case and the federal action be identical or that the respective parties in each action assume identical positions. See: Goodridge v. Fernandez, 121 AD2d 942 (1st Dept 1986). Thus, where a federal action was commenced first, and the state claims are encompassed within the federal action, a stay may be appropriate, even if there is only a "substantial identity" between the two actions. Asher v. Abbott Laboratories, 307 AD2d 211 (1st Dept 2003). Partly this is to avoid duplication of effort and wasting judicial resources. It may also be that the federal court has a particular expertise in the area of law. Asher v. Abbott Laboratories, supra. The decision, which is discretionary, involves a weighing of the equities, an evaluation of the extent to which issues overlap, and an analysis of whether more complete relief can be accorded by the federal court than in state court. Gallo v. Meyers, 50 Misc 2d 385 aff'd 26 AD2d 773 (2nd Dept 1966).

Defendants contend that a stay of this state case is warranted because plaintiff is part of the proposed federal class, and it would be prejudicial for them to have to defend themselves in two actions while Ms. Alter decides which one is more advantageous. Defendants further contend that if discovery is not stayed, the potential for plaintiff to share information with Chapple to Alter's advantage, and defendants' disadvantage is great. Finally, defendants maintain that because the state action will be encompassed within the federal lawsuit (if the class is certified), and Alter will be part of the class, unless she "opts out," there is a "substantial identity" between the federal and state actions.

In opposition to the stay, plaintiff argues that the certification may never happen, and that even if it does, at that point she will have the prerogative to opt out or stay in. FRCP 23 (b)(3). She argues that it is pointless for her to make a firm decision one way or another at this time, since defendants oppose the class certification, and in all likelihood it will take years of litigation before the federal lawsuit can proceed. She argues that because the parties in the federal action are not identical, there is no point in staying this case. Plaintiff further contends that discovery is well underway in this case and she should be allowed to continue with her personal claims expeditiously.

The facts and circumstances presented by these motions, and this record, do not warrant a discretionary stay. The motion to amend the complaint in the federal action to include a class action has not been granted by the federal court, and could possibly be denied. Although a stay is justified where there is another already commenced action pending in federal court, and there is a "substantial relationship" between the parties, issues, and relief sought, that standard is not met by the defendants in this case. Unless, and until, the Chapple case is class certified, Ms. Chapple is simply a plaintiff in an unrelated action. Even then if Ms. Alter opts out of the class, this action [*4]would still need to proceed.

Although the defendants urge the court to stay discovery in this case (and that the other judges should do so in their cases as well), their reasons are not persuasive. There is no indication that Ms. Alter or her lawyers have acted in an inappropriate manner, or violated any of the confidentiality agreements in place. There is no legal uthority supporting defendants' claim that the state plaintiffs cannot consult with the federal plaintiff, or share certain information. The details in the proposed amended Chapple complaint are a matter of public record.

Having already deposed plaintiff, the harm in staying discovery is far greater to plaintiff than the defendants. Defendants have failed to make a preliminary showing that they would be prejudiced by allowing discovery to proceed in this case, pending the federal court's decision on class certification.

While there is little dispute that if the federal case is class certified, Ms. Alter would qualify as a member of the class, she is uncertain whether she will "opt out" or stay in the class. Defendants contend plaintiff is "hedging her bets," to their detriment. Defendants, however, are likewise engaged in legal maneuvers, since they oppose the class certification while at the same time seeking this stay. Given these circumstances, if this case is stayed while the federal case grinds through the certification process it is likely that plaintiff's claims will not be heard for many years, whether here or in federal court. Although discovery is not yet completed in this case, it is far more developed than in the federal case. The federal case may be first in time, but it is in its legal infancy. On the other hand, if deadlines are set and adhered to in this case, it will be ready for trial within a relatively short period of time.

Defendants' least persuasive argument for why this court should defer to the federal court is that the federal court has greater expertise in the areas of discrimination and sexual harassment law. State courts, however, have concurrent jurisdiction with federal courts to hear Title VII actions. Yellow Freight System Inc. v. Donnelly, 494 U.S. 820 (1990). The New York State Human Rights Law and the Civil Rights Act are, in fact, textually the same, providing for similar recovery and addressing the same types of discrimination. Forrest v. Jewish Guild for the Blind, 3 NY3d 295 (2004); Ferrante v. American Lung Association, 90 NY2d 623 (1997). State Supreme Court Judges try discrimination and sexual harassment cases on a regular basis. For example: Constantine v. Kay, 6 Misc 3d 924 (NY Sup Ct., Kings Co. 2004). This court is, therefore, as equally competent as the federal court to preside over this case.

In accordance with this decision defendants' motion for a stay of this action is denied in its entirety.

Plaintiff has cross moved to have the Alter, Bertoline and Pellegrino cases consolidated for joint trial, claiming that they involve the same defendants, the same legal claims against them and similar facts. Plaintiff maintains that consolidation of these cases would conserve judicial resources because there could be unified pre-trial motions. She also claims that since these cases have similar facts, the potential for divergent decisions after trial would be eliminated by having all three cases tried before one jury.

Defendants oppose the motion claiming that each case involves different factual allegations about defendants' alleged conduct, how each plaintiff responded, and how [*5]each plaintiff separated from employment. Defendants maintain that sexual harassment cases are highly individualized, and do not lend themselves to being consolidated, because plaintiff has the burden of proving the challenged conduct in the workplace was unwelcome. Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986).

The court has the discretion to order the consolidation of actions where common questions of law or fact exist. CPLR 602 [a]; Bradford v. John A. Coleman Catholic High School, 110 AD2d 965 (3rd Dept 1985). It is unnecessary that all the facts and issues be the same, but there must be "at least some important rules of law and fact in common to both actions." Bradford v. John A. Coleman Catholic High School, supra at 966. Thus, while the cases do not have to be identical in every respect, individual issues should not predominate. Bender v. Underwood, 93 AD2d 747 (1st Dept 1983). Where the actions arise from the same incident, have substantially the same facts and issues of law, and the same witnesses would testify at both trials if actions were tried separately, consolidation is appropriate. Burger v. Long Island Rail Road Company, 24 AD2d 509 (2nd 1965) [different damages, but same collision, same witnesses]. As a practical matter, it eliminates the potential for injustice from divergent decisions based upon the same facts. Chinatown Apartments Inc. v. New York City Transit Authority, 100 AD2d (1st Dept 1984).

If common questions of law or fact exist, consolidation is warranted unless the party who is opposed can show prejudice to a "substantial right." Maigur v. Saratogian, 47 AD2d 982 (3rd Dept 1975). "The mere desire to have one's dispute heard separately does not, by itself, constitute a 'substantial right'. " Vigo S.S. Corp. v. Marship Corp of Monrovia, 26 NY2d 157 (1970). However, where the consolidation of the cases, and presentation to the same jury tends to bolster each claim, to defendants' disadvantage, this would constitute prejudice to a substantial right. Bradford v. Coleman Catholic High School, supra at 966.; Tarshish v. Associated Dry Goods Corp. et al, 232 AD2d 246 (1st Dept 1996).

All three of the state cases involve women who worked at Oppenheimer & Co. (f/k/a Fahnestock & Co.), in the legal department under the supervision of Mr. Shames, its general counsel. All three plaintiffs allege that the defendants created and condoned a hostile work environment in which sexual harassment was tolerated. They have certain causes of action in common, but two of them (Alter and Bertoline) assert termination claims. In Alter's case, she claims she was wrongfully terminated because of her pregnancy. In Bertoline, she asserts that the hostile work environment made resignation her only option. All three plaintiff are represented by the same law firm (as are the defendants), and the various plaintiffs have consolidated their discovery demands and responses with the defendants.

The elements of a prima facie case of sexual harassment are as follows: 1) the plaintiff belongs to a protected group, (2) the plaintiff was the subject of unwelcome sexual harassment, (3) the harassment was based on the plaintiff's gender, (4) the sexual harassment affected a term, condition or privilege of employment; and (5) the employer knew or should have known of the harassment and failed to take remedial action. Pace v. Ogdon Services Corp., 257 AD2d 101 (3rd Dept 1999).

Ms. Alter does not need to prove the sexual harassment claims of the other plaintiffs in order to prove her own case. Though she may want to call them as [*6]witnesses in her direct case, their testimony is not necessary for her to establish her prima facie case against the defendants. Assuming these witnesses can testify in plaintiff's case about the harassment they themselves encountered in the work place, they would provide corroborating circumstantial evidence of the work environment Oppenheimber tolerated, but not plaintiff's own claim that she was personally harassed and personally found the environment "hostile." See: Valentin v. New York City, 1997 WL 33323099 (U.S.D.C., E.D.NY 1997) [not officially reported]; Smith v. Northeastern Illinois University, 388 F.3d 559 (7th Cir 2004). Plaintiff does not have to establish as an element of her direct case that other women employed at Oppenheimber were treated the same way. For example: Mittl v. New York State Division of Human Rights, 100 NY2d 326 (2003).

Even though consolidation would be convenient to for the plaintiffs since all are represented by the same attorney, convenience is not the applicable standard. The three cases all involve sexual harassment, but have no important facts in common to them, except the identify of the defendants. On the other hand, defendants' argument, that consolidation of these cases will impermissibly allow the plaintiffs to prove their individual cases by showing that the defendants acted similarly on different, unrelated occasions, is persuasive. Coopersmith v. Gold, 223 AD2d 572 (2nd Dept 1996). Having these cases consolidated and tried before the same jury would bolster each plaintiff's claim, and prejudice the defendants right to a fair trial. Bradford v. Coleman Catholic High School, supra at 966.; Tarshish v. Associated Dry Goods Corp. et al, 232 AD2d 246 (1st Dept 1996). Plaintiff's arguments about inconsistent verdicts before different juries ignores that each plaintiff has to independently prove her case which are all based on defendant acts and defendant incidents. Whether consolidated or not, a jury could reasonably reach different verdicts as to each plaintiff and her damages.

Having failed to prove that consolidation of these cases is necessary, or practical, the motion for consolidation must be denied.

Conclusion

It is hereby

ORDERED that defendants' motion for a stay of this case and discovery is denied in its entirety; and it is further

ORDERED that plaintiff's cross motion for consolidation is also denied; and it is further

ORDERED that

Any relief that has not been expressly addressed has nonetheless been considered and is hereby denied. This shall constitute the decision and order of the court.

Dated: New York, New York

June ___, 2005

So Ordered: [*7]

_________________

J.S.C. Footnotes

Footnote 1:Identical motions and cross motions have been made in each case. All the plaintiffs and defendants have agreed to wait for this court's decision before proceeding any further in these cases. They have also informally requested that Judges Acosta and Braun wait for this court's decision since it was the first in time to be argued and submitted.

Footnote 2:Defendants have moved for similar stays in the two other Supreme Court actions.