Williams v. Rosenblatt Sec. Inc.
| Decision Date | 07 October 2015 |
| Docket Number | 14 Civ. 4390 (JGK) |
| Parties | STEVEN A. WILLIAMS, Plaintiff, v. ROSENBLATT SECURITIES INC., ET AL., Defendants. |
| Court | U.S. District Court — Southern District of New York |
The plaintiff, Steven Williams, was employed by the defendant, Rosenblatt Securities Inc. ("RSI") for less than a year in 2012. He claims primarily that he was terminated in retaliation for his activities as a whistleblower for the Securities Exchange Commission ("SEC" or "Commission") and that he was the victim of employment discrimination based on a perception that he was mentally ill. While he was a strategist at RSI, the plaintiff published a research report that purportedly implicated defendant Jane St. Capital ("Jane St.") in violations of securities laws. RSI did substantial business with Jane St. The plaintiff claims that he was harassed and eventually discharged from RSI because of the report. In the course of the alleged harassment, he was perceived by RSI and others in the financial industry as having a mental illness. RSI required him to undergo medical examinations by defendant Dr. Loraine Henricks ("Dr. Henricks") as a condition of continuedemployment. The plaintiff received treatment from Dr. Henricks, but refused to take anti-psychotic medication. After being terminated, the plaintiff's prospect of employment was allegedly affected by rumors spread by employees of Jane St. and defendant Integral Derivatives ("Integral") regarding his perceived mental illness.
The plaintiff brought the current lawsuit on June 14, 2014 and filed his fourth amended complaint ("FAC") on April 8, 2015, making nine distinct claims against RSI and several RSI employees1 (collectively "RSI Defendants"), Jane St., Integral, and Dr. Henricks. On April 24, 2015, the RSI Defendants, Jane St., Integral, and Dr. Henricks each filed a motion pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss all claims against them.
After the defendants filed their motions to dismiss, the plaintiff filed, in chronological order, a motion to strike parts of the RSI Defendants' motion to dismiss, a motion for partial summary judgment, a motion for partial judgment on the pleadings, a motion to strike various affirmative defenses by Dr. Henricks, and a motion for a conference to file a fifth amended complaint. Most recently the plaintiff brought an order to show cause for a temporary restraining order and apreliminary injunction. These motions and applications will be discussed in turn.
In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiff's favor. See McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court's function on a motion to dismiss is "not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court should not dismiss the complaint if the plaintiff has stated "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While the Court should construe the factual allegations in the light most favorable to the plaintiff, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id.; see also A'Gard v. Perez, 919 F. Supp. 2d 394, 398-99 (S.D.N.Y. 2013).
Where a pro se litigant is involved, the same standards for dismissal apply. However, when deciding a motion to dismiss, the Court may consider allegations that are contained in a pro se plaintiff's opposition papers. See Burgess v. Goord, No. 98cv2077 (SAS), 1999 WL 33458, at *1 (S.D.N.Y. Jan. 26, 1999) (collecting cases). Moreover, a "'court should give the pro se litigant special latitude in responding to a motion to dismiss.'" Gaston v. Gavin, No. 97cv1645 (JGK), 1998 WL 7217, at *1 (S.D.N.Y. Jan. 8, 1998), aff'd, 172 F.3d 37 (2d Cir. 1998) (quoting Adams v. Chief of Sec. Operations, 966 F. Supp. 210, 211 (S.D.N.Y. 1997)); Andujar v. McClellan, No. 95cv3059 (JGK), 1996 WL 601522, at *1 (S.D.N.Y. Oct. 21, 1996); see also Kaplan v. New York State Dep't of Corr. Servs., No. 99cv5856 (JGK), 2000 WL 959728, at *1 (S.D.N.Y. July 10, 2000).
When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiff's possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. See Taylor v. Vt. Dep't of Educ., 313 F.3d 768, 776 (2d Cir. 2002); Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002); see also A'Gard, 919 F. Supp. 2d at 399.
The following facts are alleged by the plaintiff. On January 15, 2012, the plaintiff started working at RSI as the Chief Derivatives and ETP (Exchange Traded Products) Strategist. On April 13, 2012, the plaintiff published a report which explored how Credit Suisse allegedly colluded with high frequency trading ("HFT") firms in the securities lending market to manipulate the market price for TVIX (Velocity Shares 2x Volatility ETN), an exchange-traded note managed by Credit Suisse. While the report stated that "no securities laws were broken," it nevertheless suggested that there were violations of section 10(b) of the Securities Exchange Act of 1934 and of SEC Rule 10b-5. (FAC ¶¶ 1-5 at 1-22; Pl's Opp'n at 5-7.) A copy of the report was forwarded to the SEC. (FAC ¶ 17.) Shortly after it was published, two SEC staff members not on the report's distribution list requested permission to see the report. (Id. ¶ 19.) On April 16, 2012, the SEC opened an investigation into Credit Suisse and several HFTs with regard to the alleged collusion. (Id.)
On April 16, 2012, Richard Rosenblatt ("Rosenblatt"), the CEO of RSI, called the plaintiff into his office, and warned him that "it was not [their] job to police the market." (Id. ¶ 20.) Employees from Credit Suisse and other financial firms subsequently phoned RSI and the plaintiff to express their concern over the report. (Id. ¶¶ 21-23.) Within the next month, the plaintiff was pulled from important projects, and several members of RSI's management team stopped interacting with the plaintiff. (Id. ¶¶ 24, 25, 28.)
Jane St. is an HFT firm, and RSI allegedly derives eighty percent of its revenues facilitating high frequency trading for Jane St. (Id. ¶¶ 18, 100.) On May 16, 2012, two RSI partners, Joseph Gawronski ("Gawronski") and Scott Burrill ("Burrill"), contacted the plaintiff inquiring whether Jane St. was involved in a trade similar to that discussed in the plaintiff's report. (Id. ¶ 30.) The plaintiff responded that it was very likely but there was no way to be certain. (Id.) Later that month, Jane St. traders Dan Macklowitz ("Macklowitz") and Hector Guardinez ("Guardinez") exchanged emails and met with RSI officer Gary Wishnow ("Wishnow"). (Id. ¶¶ 31, 111.)
According to the plaintiff, soon after the email exchange and the meeting, Jane St. and the RSI Defendants conspired to retaliate against him for writing the report that may have implicated Jane St. (Id. ¶ 111.) The plaintiff was moved fromthe trading floor, away from his colleagues, and into an office of his own. (Id. ¶ 33.) In the next few months, the plaintiff alleges, the RSI Defendants engaged in a concerted campaign of harassment identified by the plaintiff as "gaslighting"3 with the purpose of inducing the deterioration of the plaintiff's mental state. (Id. ¶ 3.) Wishnow, the plaintiff's immediate supervisor, allegedly sabotaged the data program used by the plaintiff, and as a result, the plaintiff had to "work unreasonable hours to produce less than exceptional work." (Id. ¶¶ 34, 36.) After the plaintiff's constant complaints, Gawronski, the COO of RSI, assigned Alex Kemmsies ("Kemmsies") as a support person to the plaintiff and had the plaintiff report directly to Gawronski instead of Wishnow. (Id. ¶¶ 38-41.) From July to September of 2012, Kemmsies repeatedly sent the plaintiff erroneous data with significant delays. (Id. ¶ 47.) Both Kemmsies and Gawronski repeatedly changed the content of draft reports submitted by the plaintiff despite the plaintiff's persistent objections. (Id.)
Starting from June 2012, the plaintiff's mental condition caught the attention of RSI's management. In June 2012, Rosenblatt gave the plaintiff a book on Attention DeficitDisorder (ADD) after commenting that the plaintiff's report "looks like somebody with ADD wrote it." (Id. ¶ 35.) Around early July 2012, Rosenblatt required the plaintiff, as a condition of his continued employment, to be treated by Dr. Henricks, a psychiatrist and friend of Rosenblatt. (Id. ¶ 42.)
The plaintiff alleges that during the course of treatment, Dr. Henricks tried to convince the plaintiff that he was mentally unstable, overprescribed medications, engaged in aggressive therapy for the plaintiff that triggered his trauma, shared the plaintiff's privileged information without his consent, and eventually abandoned the plaintiff after his employment was terminated. The plaintiff contends that although Dr. Henricks prescribed anti-psychotic medicine for him, he eventually did not take the medicine. (Id. ¶¶ 60-70, 114.)
On or about September 24, 2012, the plaintiff attended a psychiatric session with Dr. Henricks. Rosenblatt also attended the session after the plaintiff invited him, although the invitation was allegedly sarcastic. (Id. ¶¶ 48-51.) After the plaintiff refused to take anti-psychotic medication despite the pleas...
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