Cavalieri, M.D. v. TJH Medical Services, P.C. et al, No. 1:2014cv01818 - Document 32 (E.D.N.Y. 2014)
Court Description: ORDER granting 21 Motion to Amend/Correct/Supplement; rejecting 25 Report and Recommendations. Ordered by Judge I. Leo Glasser on 12/30/2014.(Russell, Alexandra)
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Cavalieri, M.D. v. TJH Medical Services, P.C. et al Doc. 32 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------x RALPH L. CAVALIERI, M.D., MEMORANDUM AND ORDER Plaintiff, 14 Civ. 1818 (ILG) (J O) - against TJ H MEDICAL SERVICES, P.C., et al., Defendants. ------------------------------------------------------x GLASSER, Senior United States District J udge: Pending before the Court are Defendants’ objections to Magistrate J udge (“MJ ”) Orenstein’s Report and Recom m endation (“R&R”) that Defendants’ m otion for leave to file an am ended Answer, m ade after the deadline fixed in a scheduling order for filing such m otions, be denied. For the following reasons, the R&R is REJ ECTED and Defendants’ m otion is GRANTED. BACKGROU N D Plaintiff, Dr. Ralph Cavalieri, com m enced this action against his form er em ployers, TJ H Medical Services, P.C., (“TJ H”) and the J am aica Hospital Medical Center (“Hospital,” together with TJ H, “Defendants”) alleging age discrim ination and retaliation in violation of the New York State Hum an Rights Law. See Com pl., Dkt. No. 1. Through discovery, Defendants learned in early October 20 14 that Plaintiff had printed and rem oved from Hospital grounds em ails containing sensitive patient health inform ation, in violation of the Hospital’s policy and HIPAA. See Defendants’ Objections to Report & Recom m endation (“Objections”) at 2 (Dkt. No. 28). Based on this newly-discovered evidence of Plaintiff’s m isconduct, Defendants sought to assert an “after-acquired evidence defense” by adding the following proposed am endm ent to their 1 Dockets.Justia.com Answer: “Som e or all of Plaintiff’s claim s are barred by virtue of after-acquired evidence of Plaintiff’s wrongful and/ or unlawful conduct.” See Letter Motion to Am end (Dkt. No. 21) at 1. Defendants filed a m otion to am end their Answer on October 9, 20 14, after the August 29, 20 14 deadline for such am endm ents set in the Scheduling Order. See id. On Novem ber 12, 20 14, MJ Orenstein issued his Report and Recom m endation (“R&R”), which recom m ended that the Court deny Defendants’ request. See Dkt. No. 25. He concluded that (1) the proposed am endm ent was futile and (2) Defendants failed to show “good cause” to belatedly am end their Answer. See id. Defendants filed their Objections to the R&R on Decem ber 1, and Plaintiff filed his Opposition to Defendants’ Objections on Decem ber 10 (Dkt No. 31). STAN D ARD OF REVIEW “For dispositive m atters, 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, 20 14 WL 5311455, at *1 (E.D.N.Y. Oct. 16, 20 14) (citing Fed. R. Civ. P. 72(b)(3)). District courts in this Circuit have held that a m agistrate judge’s denial of a m otion to am end 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, 20 0 5); Children First Found., Inc. v. Martinez, No. 0 4-CV-0 927, 20 0 7 WL 4618524, at *4 (N.D.N.Y. Dec. 27, 20 0 7) (“a [m agistrate judge’s] denial of a m otion to am end is dispositive where the denial is based on futility . . .”). Thus, the Court reviews the R&R de novo. D ISCU SSION I. Fu tility o f th e Am e n d m e n t 2 Defendants’ am endm ent purports to bar “som e or all of Plaintiff’s claim s” by virtue of the evidence of Plaintiff’s wrongdoing, which they discovered after his em ploym ent ended.1 Yet, according to the Suprem e Court, such “after-acquired” evidence of an em ployee’s m isconduct cannot bar claim s of em ploym ent discrim ination. See Greene v. Coach, Inc., 218 F. Supp. 2d 40 4, 413 (S.D.N.Y. 20 0 2) (citing McKennon v. Nashville Banner Publ’g Co., 513 U.S. 352, 360 -61 (1995)). Rather, it lim its only the scope of recovery, i.e., front pay and back pay for the period after the em ployer learned of the em ployee’s wrongful conduct. See McKennon, 513 U.S. at 360 -62. With respect to the lim itation on back pay, the Court in McKennon explained: The object of com pensation is to restore the em ployee to the position he or she would have been in absent the discrim ination, but that principle is difficult to apply with precision where there is after-acquired evidence of wrongdoing that would have led to term ination on legitim ate grounds had the em ployer known about it. Once an em ployer learns about em ployee wrongdoing that would lead to a legitimate discharge, we cannot require the em ployer to ignore the inform ation, even if it is acquired during the course of discovery in a suit against the em ployer and even if the inform ation m ight have gone undiscovered absent the suit. Id. at 362. It m ade clear that “the em ployee’s wrongdoing becom es relevant not to punish the em ployee,” but rather to “take due account of the lawful prerogatives of the em ployer in the usual course of its business.” Id. at 361. Defendants’ am biguous term inology has caused analytic difficulty in resolving this discrete issue. They seek to plead their after-acquired evidence defense as follows: “som e or all of Plaintiff’s claim s are barred by virtue of after-acquired evidence of 1 The R&R concluded that the evidence of Plaintiff’s m isconduct cannot support this defense because it relates to events that occurred after his alleged “constructive discharge” from the Hospital. However, the alleged m isconduct occurred before he resigned on J uly 26, 20 11. Even if he prevails in proving that he was constructively discharged before the alleged m isconduct occurred, there is no binding precedent in this Circuit that precludes Defendants from using this evidence to support their defense. See Ellis v. Cygnus Enters., LLC, No. CV 11-711, 20 12 WL 259913, at *3 (E.D.N.Y. J an. 3, 20 13) (“The Second Circuit has never had occasion to decide whether post-em ploym ent m isconduct can support an after-acquired evidence defense.”) (internal citations om itted). 3 Plaintiff’s wrongful and/ or unlawful conduct.” Letter Motion to Am end at 1 (em phasis added). However, the evidence only lim its certain dam ages, nam ely front pay and back pay for the period after Defendants learned of Plaintiff’s wrongful conduct. Defendants argue that they are not attem pting to lim it their liability entirely (as the R&R concludes) and state that “the lim itations of the after acquired evidence doctrine are not in dispute.” See Objections at 4. Although Defendants’ pleaded term inology is im precise, their after-acquired evidence defense is not substantively futile. If the Answer were am ended, it would preclude Plaintiff from recovering back pay for the period after October 20 14, when Defendants first learned of his m isconduct, which allegedly would have been grounds for term ination.2 “Once an em ployer learns about em ployee wrongdoing that would lead to a legitim ate discharge, [the court] cannot require the em ployer to ignore the inform ation.” See McKennon, 513 U.S. at 362. Defendants should not be precluded from asserting this lim itation on Plaintiff’s recovery due to what is essentially a technical defect in their pleading. The Court therefore rejects the R&R’s conclusion regarding the am endm ent’s futility. In the interests of precise pleading, Defendants should fram e their proposed am endm ent to explicitly aver the appropriate lim itation on Plaintiff’s recovery of front pay and certain back pay, rather than “Plaintiff’s claim s.” II. Go o d Cau s e 2 Contrary to the R&R’s conclusion, the Court finds that Defendants did “propose to plead that they would in fact have term inated the plaintiff on the basis of the cited evidence of m isconduct.” See R&R at 3. The Motion to Am end described Plaintiff’s violations of the Hospital’s confidentiality policy, pursuant to which any violation will subject the em ployee to disciplinary action, “up to and including term ination.” See Confidentiality Policy, Ex. A to Letter Motion to Am end. 4 Defendants have shown “good cause” to belatedly am end their Answer. The good cause standard “requires a party to show that despite its having exercised diligence, the applicable deadline could not have been reasonably m et.” See, e.g., Perfect Pearl Co. v. Majestic Pearl & Stone, Inc., 889 F. Supp. 2d 453, 457 (S.D.N.Y. 20 12) (internal quotations and citations om itted). “A party fails to show good cause when the proposed am endm ent rests on inform ation that the party knew, or should have known, in advance of the deadline.” Id. Defendants received nearly one thousand pages of initial disclosures (which contained evidence of Plaintiff’s wrongful conduct) on August 5, 20 14. See Letter Motion to Am end at 2. Over the next two m onths, the parties reviewed and produced thousands of docum ents, pursuant to an expedited discovery schedule. See id. In the course of that process, Defendants found the evidence of Plaintiff’s m isconduct in early October, and filed their m otion the following week. See id. The R&R noted that Defendants received the docum ents on which they rely 24 days prior to the am endm ent deadline, but did not find the evidence of m isconduct until over a m onth after the deadline had passed. R&R at 1. It concluded that “[r]egardless of the other dem ands on counsel’s tim e, the failure to review evidence during that [two m onth] period does not satisfy the pertinent standard of good cause.” Id. Other courts in this district, however, have held that good cause existed to belatedly am end a pleading under sim ilar circum stances. For exam ple, J udge Spatt recently granted a m otion to am end m ade two years after the deadline for am endm ents had expired. Denis v. Hom e Depot, U.S.A., Inc., No. 10 -CV-3227, 20 14 WL 6632486, at *4 (E.D.N.Y. Nov. 21, 20 14). There, plaintiff filed a m otion to am end on the basis of evidence he discovered within the “hundreds of pages” that defendant produced in discovery. Id. The court held that plaintiff had dem onstrated “good cause” even though he filed his 5 m otion three m onths after defendant produced the docum ents. Id.; see also Bryant v. Carlisle Carrier Corp., No. 13-CV-578, 20 14 WL 712592, at *2 (E.D.N.Y. Feb. 25, 20 14) (finding good cause existed for belated am endm ent to defendants’ Answer where defendants sought to add counterclaim two m onths after discovering evidence that supported their proposed counterclaim ). Defendants have sim ilarly established that “despite . . . having exercised diligence, the applicable deadline could not have been reasonably m et.” See Perfect Pearl Co., 889 F. Supp. 2d at 457. Furtherm ore, Plaintiff will suffer no prejudice as a result of the am endm ent—fact discovery is ongoing through March 20 , 20 15 and the parties have filed no dispositive m otions. See Objections at 3. Accordingly, Defendants have shown “good cause” to am end their Answer. CON CLU SION For the foregoing reasons, the R&R’s recom m endation is REJ ECTED and Defendants’ m otion to am end is GRANTED. SO ORDERED. Dated: Brooklyn, New York Decem ber 30 , 20 14 / s/ I. Leo Glasser Senior United States District J udge 6
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