McGinty v. State of N.Y.

Decision Date22 July 1998
Docket NumberNo. 96-CV-1679 (LEK/RWS).,96-CV-1679 (LEK/RWS).
PartiesMary McGINTY, as Administratrix of the Estate of Maureen Nash, and James Nash, on behalf of themselves and all others similarly situated, Plaintiffs, v. STATE OF NEW YORK, New York State and Local Employees Retirement System, and New York State Department of Taxation and Finance, Defendants.
CourtU.S. District Court — Northern District of New York

Kingsley and Towne, P.C., Albany, NY, James T. Towne, Jr., of counsel, Butler, Fitzgerald & Potter, New York City, Stuart Potter, of counsel, for Plaintiffs.

Dennis C. Vacco, Attorney General of the State of New York, Albany, NY, Robert A. Siegfried, Asst. Attorney General, of counsel, for Defendants.


KAHN, District Judge.

Plaintiffs have brought this action alleging a violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq. ("ADEA"), as amended by the Older Workers Benefit Protection Act of 1990 ("OWBPA"), Pub.L. 101-433, Title I, § 103, 104 Stat. 978 (Oct. 16, 1990). Presently before the Court is defendants' motion to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). A number of motions by the plaintiffs are also before the Court, including motions (1) for a preliminary injunction, (2) to strike defendants' fourth and seventh affirmative defenses, (3) to amend the complaint,1 (3) for judgment on the pleadings and (4) to compel various discovery requests and impose sanctions. Because the Court finds that this action is moot, defendants' motion is granted and plaintiffs' motions are denied.

I. Background

Plaintiff Mary McGinty ("McGinty") is the daughter of Maureen Nash ("Mrs.Nash") and the Executrix of her Estate.2 Prior to her death, Mrs. Nash was employed by the defendant State of New York ("New York") in the offices of the defendant New York State Department of Taxation and Finance. During this employment, Mrs. Nash was a member of the defendant New York State and Local Employees' Retirement System ("Retirement System").3

The Retirement System is established and maintained by New York for the benefit of employees of the state and local governments of New York. Mrs. Nash joined on or about October 17, 1985 at the age of 53. She died on February 17, 1995 at the age of 62.

As a member of the Retirement System, Mrs. Nash was entitled to certain benefits. Among these was a death benefit owed to her named beneficiary, plaintiff James Nash. Mrs. Nash's entitlement to a death benefit is governed by N.Y. Retire. & Soc. Sec. Law ("RSSL") § 448 (McKinney Supp.1998). Under this provision, the amount of the death benefit is reduced for members who joined at age fifty-two or older and is also reduced for those members who died at age sixty-one or older. Because of both the age at which Mrs. Nash became a member of the Retirement System and the age at which she died, the death benefit provided to James Nash was subject to reductions.

This collective action was commenced on October 17, 1996 and served on defendants on October 24, 1996. In their complaint, plaintiffs allege that the reduction in the amount of the death benefit was in violation of the ADEA as amended by the OWBPA. They also allege that the Retirement System has violated the ADEA in discriminating on the basis of age in the payment of disability benefits.

Under 29 U.S.C. § 623(f)(2)(B), a bona fide benefit plan which discriminates on the basis of age may be lawful if,

for each benefit or benefit package, the actual amount of payment made or cost incurred on behalf of an older worker is no less than that made or incurred on behalf of a younger worker....

29 U.S.C.A. § 623(f)(2)(B)(i) (West.Supp. 1998). In short, under the new law, distinctions in benefits on the basis of age must be cost-justified. In this case, defendants have conceded that the distinctions which the Retirement System made in determining death benefits were not cost-justified. They assert, however, that the problem has been corrected and this action is therefore moot. They also argue that this action is barred by the Eleventh Amendment and that the named plaintiffs do not have standing to bring an action for discrimination in the distribution of disability benefits.

II. Discussion
A. Standard of Review

In deciding a Rule 12(b)(1) motion, the Court construes the complaint broadly and liberally in conformity with Fed.R.Civ.P. 8(f) "but argumentative inferences favorable to the pleader will not be drawn." 5A Charles A. Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE § 1350, at 218-219 (1990 & Supp. 1991). The parties may use affidavits and other materials beyond the pleadings themselves to challenge or to support the court's subject matter jurisdiction. See Land v. Dollar, 330 U.S. 731, 735 n. 4, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947); Exchange Nat'l Bank of Chicago v. Touche Ross & Co., 544 F.2d 1126, 1130 (2d Cir.1976), opinion modified, Chemical Bank v. Arthur Andersen & Co., 726 F.2d 930, cert. denied, 469 U.S. 884, 105 S.Ct. 253, 83 L.Ed.2d 190 (1984). Once challenged, the burden of establishing a federal court's subject matter jurisdiction typically rests on the party asserting jurisdiction. See Thomson v. Gaskill, 315 U.S. 442, 62 S.Ct. 673, 86 L.Ed. 951 (1942); Grafon Corp v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979). However, where it is asserted that jurisdiction is lacking because of mootness, courts have placed the initial burden of demonstrating mootness on the defendant. See County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979) (case was dismissed where defendants had met their burden of demonstrating mootness); but see Video Tutorial Services, Inc. v. MCI Telecommunications Corp., 79 F.3d 3, 6 (2d Cir.1996) (plaintiff bears burden of demonstrating that action which is otherwise moot falls under the mootness exception for cases that are "capable of repetition, yet evading review").

B. Mootness

Defendants argue that the case must be dismissed because it is moot. The mootness doctrine is based on the rule under Article III of the Constitution that federal courts may adjudicate only actual, ongoing cases or controversies. Lewis v. Continental Bank Corp., 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990). A case is moot "when the issues presented are no longer `live' or the parties `lack a legally cognizable interest in the outcome.'" Blackwelder v. Safnauer, 866 F.2d 548, 551 (2d Cir.1989) (quoting Murphy v. Hunt, 455 U.S. 478, 481, 102 S.Ct. 1181, 71 L.Ed.2d 353 (1982)); see also Muhammad v. City of New York Department of Corrections, 126 F.3d 119, 123 (2d Cir.1997) (a case is moot when plaintiff lacks "a `personal stake' in the litigation." (citation omitted)). When this occurs, the Constitution's case or controversy requirement is not satisfied and the federal court lacks subject matter jurisdiction over the action. New York City Employees' Ret. Sys. v. Dole Food Co., 969 F.2d 1430, 1433 (2d Cir.1992). A moot action must therefore be dismissed even if the case was live at the outset. Id.

Defendants argue that the action is moot because, although the statutory provisions containing the discriminatory benefit structure have not been amended, the Retirement System has been brought into compliance with the ADEA through administrative means. They further assert that those members of the Retirement System who died after October 12, 19924 and were subject to the discriminatory provisions have been given such additional money with interest that they would be entitled to under the ADEA-compliant system.

Specifically, a total of 672 members covered by the RSSL death benefit provisions died during the relevant period. The total additional amount owing to the beneficiaries of these members under the revised system was $20,790,558.40. McManaman First Aff. ¶ 32. As of July 25, 1997, defendants had paid out $20,362,916.40 or 97.9%. McManaman Second Aff. ¶ 30. According to the defendants, the remaining eligible beneficiaries will be paid the additional amounts due them as soon as they can be located. McManaman First Aff. ¶ 33. In the case of Mrs. Nash, defendants allege without dispute that they offered James Nash his additional benefits with interest but were told by Mr. Nash's attorneys not to have any direct contact with the plaintiff. Thereafter, defendants have indicated to Mr. Nash that payment would be made as soon as it is authorized by his attorneys. Id. ¶ 45.

Voluntary cessation of the allegedly illegal conduct which gave rise to a case does not generally deprive a tribunal of power to hear and determine the case. Campbell v. Greisberger, 80 F.3d 703, 706-07 (2d Cir. 1996). However, a case may be found moot if, upon such cessation, "(1) there is no reasonable expectation that the alleged violation will recur and (2) interim relief or events have completely and irrevocably eradicated the effects of the alleged violation." Id. at 707 (internal quotations omitted) (citing Los Angeles County v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979)).

1. Eradication of the Effects of the Violation

Plaintiffs argue that it is a disputed fact as to whether defendants' measures have cured the effects of the discrimination from which the former benefit structure suffered. They also argue that even if the new structure is non-discriminatory, mootness is precluded by the dispute over whether defendants paid the correct rate of interest on the unpaid death benefits. Plaintiffs further argue that the action is not moot because defendants may still owe liquidated damages.

i. Elimination of the Age-Discriminatory Structure

To revise the system and reverse the effects of past discrimination, defendants first obtained the services of Buck Consulting to identify areas of the benefit structure that were discriminatory and to propose corrections. These proposed corrections were...

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