McGinty v. State of New York
| Decision Date | 01 August 2000 |
| Docket Number | PLAINTIFFS-APPELLANTS,Docket No. 00-7189,DEFENDANTS-APPELLEES |
| Citation | 251 F.3d 84 |
| Parties | (2nd Cir. 2001) MARY MCGINTY, AS ADMINISTRATRIX OF THE ESTATE OF MAUREEN NASH, AND JAMES NASH ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,, v. STATE OF NEW YORK, NEW YORK STATE AND LOCAL EMPLOYEES RETIREMENT SYSTEM, AND NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, |
| Court | U.S. Court of Appeals — Second Circuit |
James T. Towne, Jr., Albany, New York (Thorn Gershon Towne Tymann and Bonanni, LLP, Albany, New York, of counsel), for Plaintiffs-Appellants.
Laura Etlinger, Albany, New York (Eliot Spitzer, Attorney General of the State of New York, Nancy A. Spiegel, Daniel Smirlock, Albany, New York, of counsel), for Defendants-Appellees.
Before: Cardamone, Sotomayor, and Katzmann, Circuit Judges.
The evolution of this appeal illustrates the potential consequences when a decree of the Supreme Court is applied retroactively to a different case open at the time it is issued. Just prior to the decree, plaintiffs were well on their way to recovering damages for age discrimination in pension benefits concededly committed by the State of New York. When the Supreme Court ruled, in another case, that states had sovereign immunity from suit under the statute upon which plaintiffs had been relying, plaintiffs' prospects for victory vanished like spent light.
Plaintiff Mary McGinty is the executrix1 of the estate of Maureen Nash, who was employed by the New York State Department of Taxation and Finance (Department) and a member of the New York State and Local Employees' Retirement System (Retirement System). Her death benefit beneficiary was plaintiff James Nash. Plaintiffs McGinty and Nash, acting on behalf of themselves and all others similarly situated, filed suit against defendants, the Retirement System, the State of New York (State) and the Department under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634, as amended by the Older Workers Benefit Protection Act of 1990, Pub. L. No. 101-433, 104 Stat. 978. In particular, plaintiffs challenge what they claim were wrongful reductions in certain death and disability benefits based upon the age of the Retirement System member.
Plaintiffs appeal to this Court for a second time, seeking reversal of a judgment entered in favor of defendants by the United States District Court for the Northern District of New York (Kahn, J.). See McGinty v. New York, 84 F. Supp. 2d 314 (N.D.N.Y. 2000). On plaintiffs' first appeal from an adverse judgment, we reversed in part and remanded for further proceedings. See McGinty v. New York, 193 F.3d 64, 72 (2d Cir. 1999). The key issue on the appeal now before us is whether the federal courts have subject matter jurisdiction over the State of New York defendants in light of the Supreme Court's recent decision in Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 67 (2000), holding that the ADEA does not validly abrogate states' Eleventh Amendment sovereign immunity. Relying on Kimel, the district court dismissed plaintiffs' complaint sua sponte. See McGinty, 84 F. Supp. 2d at 314-15.
The facts are set forth in detail in our prior opinion, with which familiarity is presumed. See McGinty, 193 F.3d at 67-68. We set out only those facts relevant to the present appeal.
Defendants admit that for some three-and-a-half years, from October 16, 1992 to June 20, 1996, the New York State death benefit system violated the ADEA. McGinty, 193 F.3d at 67. Death benefits were reduced when an employee joined the Retirement System after turning age 52, and were further reduced 10 percent for each year the employee worked after turning age 60, subject to a floor of 10 percent of the benefit in force at age 60. N.Y. Retire. & Soc. Sec. Law § 508(a)(2) (McKinney 1999); accord McGinty, 193 F.3d at 67 n.4. Maureen Nash became a member of the Retirement System at age 53 and died at age 62 while still employed; her death benefit was thereby reduced under state law, in what defendants concede was a violation of the ADEA.
Plaintiffs filed complaints of age discrimination with the Equal Employment Opportunity Commission (EEOC) in early 1996. McGinty, 193 F.3d at 68. At the same time, the state comptroller's office -- which was unable to persuade the legislature to amend the law -- decided to correct the ADEA violations by voluntarily making supplemental death benefit payments. Id. at 67. It began making such payments in late 1996. Id. at 67-68. In October 1996 a benefits examiner contacted James Nash as Maureen Nash's beneficiary regarding the differential payment. Id. at 68. Plaintiffs commenced the instant class action in federal district court on October 17, 1996.
When plaintiffs brought their first appeal, the district court had dismissed their action on defendants' motion under Fed. R. Civ. P. 12(b)(1). We reversed the determination that plaintiffs' death benefit claims were moot in light of the Retirement System's corrective supplemental payments, and ruled instead that the ADEA violations were "willful" and that plaintiffs were therefore entitled to liquidated damages under the ADEA. Id. at 69-71. We remanded for a determination of damages and for a resolution of plaintiffs' charge that the new administrative method for calculating death benefits still violated the ADEA. Id. at 71. We also vacated the dismissal of plaintiffs' disability benefit claims and remanded for the district court to reconsider plaintiffs' standing to bring these claims. Id. at 72. Finally, we rejected defendants' assertion of sovereign immunity. Id. at 71-72 (quoting Cooper v. N.Y. State Office of Mental Health, 162 F.3d 770, 776 (2d Cir. 1998), vacated sub nom. Bd. of Trustees of Univ. of Conn. v. Davis, 528 U.S. 110 (2000)).
Meanwhile, after plaintiffs had filed their appeal on July 31, 1998, but before we issued our decision on October 1, 1999, the Supreme Court granted certiorari in Kimel. Kimel v. Fla. Bd. of Regents, 139 F.3d 1426 (11th Cir. 1998), cert. granted, 525 U.S. 1121 (1999) (Nos. 98-791, 98-796). Following our decision on the first appeal, defendants requested the district court to stay the matter pending the Supreme Court's determination in Kimel. That request was granted on October 7, 1999.
Kimel was decided on January 11, 2000. On January 19, 2000 the district court sua sponte dismissed plaintiffs' claims for lack of subject matter jurisdiction. In a brief order it cited Kimel's holding that Congress did not validly abrogate states' sovereign immunity when it passed the ADEA. McGinty, 84 F. Supp. 2d at 314. The trial court gave the parties no advance notice that dismissal was contemplated and afforded them no opportunity to brief the question of subject matter jurisdiction. From that order, plaintiffs appeal.
On appeal from a decision regarding subject matter jurisdiction, we review factual findings for clear error and legal conclusions de novo. Viacom Int'l, Inc. v. Kearney, 212 F.3d 721, 725-26 (2d Cir.), cert. denied, ___ U.S. ___, 121 S. Ct. 655 (2000).
Whether a federal court has subject matter jurisdiction is a question that "may be raised at any time... by the court sua sponte." Lyndonville Sav. Bank & Trust Co. v. Lussier, 211 F.3d 697, 700 (2d Cir. 2000). Thus, the district court properly considered whether in light of Kimel defendants had sovereign immunity that deprived it of subject matter jurisdiction. Having found this immunity could be and was raised, the district court had reason to dismiss plaintiffs' complaint. See id. at 700-01 ().
Yet, the district court inappropriately dismissed the case without informing plaintiffs it was contemplating such action. A district court should not dismiss an action pending before it without first providing the adversely affected party with notice and an opportunity to be heard. Acosta v. Artuz, 221 F.3d 117, 124 (2d Cir. 2000). Notice serves several important purposes. It gives the adversely affected party a chance to develop the record to show why dismissal is improper; it facilitates de novo review of legal conclusions by ensuring the presence of a fully-developed record before an appellate court, see B.F. Goodrich v. Betkoski, 99 F.3d 505, 522 (2d Cir. 1996); and, it helps the trial court avoid the risk that it may have overlooked valid answers to what it perceives as defects in plaintiff's case, Snider v. Melindez, 199 F.3d 108, 113 (2d Cir. 1999). For example, while the district court ruled the ADEA did not abrogate defendants' right to assert sovereign immunity, it failed to address whether immunity might have been waived or whether the Retirement System was entitled to assert immunity as an arm of the state. Either a "yes" answer to the first question, or a "no" answer to the second, would have required a different result.
Recognizing that a sua sponte dismissal absent notice and an opportunity to be heard can itself be grounds for reversal, Lewis v. New York, 547 F.2d 4, 5-6 & n.4 (2d Cir. 1976), we nevertheless undertake to address the issues raised on this appeal ourselves. Unlike Lewis, where defendants refused to defend...
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