Case in Point
Major Court Decisions Impacting New Yorkers
Mon, 24 Aug 2009 08:56:00
Federal Courts Could Now Veto State Courts On Taxes And More
Cloverleaf Realty v. Town of Wawayanda
Decided by: Second Circuit Federal Appeals Court, July 15
Seventy years ago, the United States Supreme Court set forth the now-famous “Erie Doctrine.” Under Erie, federal courts in New York (or any state) must apply the law of the state in which they are located when deciding many legal issues. Erie ensures judicial consistency: Regardless of whether a person uses a state or federal court, the same substantive law applies.
One consistent Erie principle has been that statutes of limitations—the amount of time a claimant has to file a lawsuit—is a matter of substantive law. Thus, federal courts in New York have applied the periods set by the State Legislature. Until last month, that is; in mid-July, the United States Court of Appeals for the Second Circuit carved out a new exception now allowing some lawsuits that would be time-barred in New York state courts to go forward in a federal forum.
The new rule emerges from a simple tax dispute in Orange County. Needing to improve its water system, the town of Wawayanda approved a special assessment tax on property. Cloverleaf Realty, which owned two parcels in the town, was assessed $38,000 in new taxes. Under protest, Cloverleaf paid the assessment and filed suit in New York Supreme Court to declare the tax invalid for violating several state and federal laws. But the state court dismissed the claim, noting it was untimely, since the four-month statute-of-limitations period had expired. Cloverleaf then sued the town in federal court, making similar federal law claims. The federal trial judge in Manhattan dismissed the suit, concluding the litigation was precluded by the earlier state-court judgment.
In July, the federal appeals court overturned the district court. Traversing a dangerous path that could lead to duplicitous state and federal court litigation, the appeals court gave Cloverleaf another chance to litigate. Although the court noted that Cloverleaf’s state and federal claims were “essentially identical,” the court said the Supreme Court has long recognized the expiration of a statute of limitations does not extinguish an underlying right—a litigant is free to vindicate that right if another jurisdiction permits it. Relying on New York Court of Appeals precedent, the court then wrote, “We conclude that New York law does not depart from the traditional rule.”
The ruling could have considerable importance for those who want to challenge municipal decisions. Such challenges made under New York state law, in the form of Article 78 proceedings, can usually be brought under federal law as well. A broad interpretation of the Cloverleaf case would allow for the re-litigation of these cases and mean a federal court in New York could effectively veto settled state-court rulings.
Your Rights Can Be Classified
Doe v. Central Intelligence Agency
Decided by: Second Circuit Federal Appeals Court, August 5
In September 2005, Jane Doe filed a lawsuit she could probably never win—she sued the Central Intelligence Agency. Forbidden from revealing even her real name to the court, Jane Doe’s case is a remarkable example of the sobering reality faced by American operatives and their families who forfeit many of the fundamental rights they work to protect.
Jane Doe is the wife of a former covert-status CIA employee. At some point in recent history, Jane, her husband and their children were assigned to work overseas. While abroad, the CIA discharged Jane’s husband for classified reasons. Jane’s family immediately departed for another country, listed in court documents as “Country A.” However, because of their former covert status, Jane and her family have been unable to leave Country A.
Alleging the CIA has failed to provide her any assistance prevented her from returning to the United States, and rendered Jane a “prisoner in her own home,” who lives “constantly fearful of eventual detection,” Jane sued for severe emotional distress. Jane argued that the CIA violated her constitutional rights guaranteeing access to the court by preventing her from meeting with her attorney or preparing certain court documents because, the government contended, such actions threatened national security.
To dismiss the suit, former CIA Director Porter Goss filed a statement with the court saying Jane’s litigation would “necessarily result in the disclosure of classified information,” and could cause serious damage to national security, and the state-secrets privilege prevented both Jane and her attorney from viewing any information that might assist Jane’s case. The district court granted Goss’ request to dismiss.
Last month, the Second Circuit Appeals Court affirmed the district court’s decision—none of Jane’s fundamental rights were violated. The court wrote that she has “no right to use material that is alleged by the government to contain state secrets.” Thus, Jane had no First Amendment rights to use classified information, even where lack of access would mean the certain dismissal of her lawsuit.
Although the court said the government could not simply assert “state secrets” in every case it wished to not litigate, the judges offered no method to determine what cases fell into this category.
Cloverleaf Realty v. Town of Wawayanda
Decided by: Second Circuit Federal Appeals Court, July 15
Seventy years ago, the United States Supreme Court set forth the now-famous “Erie Doctrine.” Under Erie, federal courts in New York (or any state) must apply the law of the state in which they are located when deciding many legal issues. Erie ensures judicial consistency: Regardless of whether a person uses a state or federal court, the same substantive law applies.
One consistent Erie principle has been that statutes of limitations—the amount of time a claimant has to file a lawsuit—is a matter of substantive law. Thus, federal courts in New York have applied the periods set by the State Legislature. Until last month, that is; in mid-July, the United States Court of Appeals for the Second Circuit carved out a new exception now allowing some lawsuits that would be time-barred in New York state courts to go forward in a federal forum.
The new rule emerges from a simple tax dispute in Orange County. Needing to improve its water system, the town of Wawayanda approved a special assessment tax on property. Cloverleaf Realty, which owned two parcels in the town, was assessed $38,000 in new taxes. Under protest, Cloverleaf paid the assessment and filed suit in New York Supreme Court to declare the tax invalid for violating several state and federal laws. But the state court dismissed the claim, noting it was untimely, since the four-month statute-of-limitations period had expired. Cloverleaf then sued the town in federal court, making similar federal law claims. The federal trial judge in Manhattan dismissed the suit, concluding the litigation was precluded by the earlier state-court judgment.
In July, the federal appeals court overturned the district court. Traversing a dangerous path that could lead to duplicitous state and federal court litigation, the appeals court gave Cloverleaf another chance to litigate. Although the court noted that Cloverleaf’s state and federal claims were “essentially identical,” the court said the Supreme Court has long recognized the expiration of a statute of limitations does not extinguish an underlying right—a litigant is free to vindicate that right if another jurisdiction permits it. Relying on New York Court of Appeals precedent, the court then wrote, “We conclude that New York law does not depart from the traditional rule.”
The ruling could have considerable importance for those who want to challenge municipal decisions. Such challenges made under New York state law, in the form of Article 78 proceedings, can usually be brought under federal law as well. A broad interpretation of the Cloverleaf case would allow for the re-litigation of these cases and mean a federal court in New York could effectively veto settled state-court rulings.
Your Rights Can Be Classified
Doe v. Central Intelligence Agency
Decided by: Second Circuit Federal Appeals Court, August 5
In September 2005, Jane Doe filed a lawsuit she could probably never win—she sued the Central Intelligence Agency. Forbidden from revealing even her real name to the court, Jane Doe’s case is a remarkable example of the sobering reality faced by American operatives and their families who forfeit many of the fundamental rights they work to protect.
Jane Doe is the wife of a former covert-status CIA employee. At some point in recent history, Jane, her husband and their children were assigned to work overseas. While abroad, the CIA discharged Jane’s husband for classified reasons. Jane’s family immediately departed for another country, listed in court documents as “Country A.” However, because of their former covert status, Jane and her family have been unable to leave Country A.
Alleging the CIA has failed to provide her any assistance prevented her from returning to the United States, and rendered Jane a “prisoner in her own home,” who lives “constantly fearful of eventual detection,” Jane sued for severe emotional distress. Jane argued that the CIA violated her constitutional rights guaranteeing access to the court by preventing her from meeting with her attorney or preparing certain court documents because, the government contended, such actions threatened national security.
To dismiss the suit, former CIA Director Porter Goss filed a statement with the court saying Jane’s litigation would “necessarily result in the disclosure of classified information,” and could cause serious damage to national security, and the state-secrets privilege prevented both Jane and her attorney from viewing any information that might assist Jane’s case. The district court granted Goss’ request to dismiss.
Last month, the Second Circuit Appeals Court affirmed the district court’s decision—none of Jane’s fundamental rights were violated. The court wrote that she has “no right to use material that is alleged by the government to contain state secrets.” Thus, Jane had no First Amendment rights to use classified information, even where lack of access would mean the certain dismissal of her lawsuit.
Although the court said the government could not simply assert “state secrets” in every case it wished to not litigate, the judges offered no method to determine what cases fell into this category.
