2d Circuit Affirms Dismissal of NYC Fair Chance Act Claim; Amount-in-Controversy Element Not Satisfied

In Suarez v. Mosaic Sales Solutions US Operating Co., LLC, 2018 WL 357540 (2d Cir. 17-2344 Jan. 11, 2018), the Second Circuit affirmed the dismissal of plaintiff’s claim under the New York City Fair Chance Act, N.Y.C. Admin. Code § 8-107(11)(a), based on defendant’s failure to follow certain procedures before rescinding plaintiff’s job offer after discovering, through a background check, that plaintiff had two convictions.

The court does not reach the merits of plaintiff’s discrimination claims, because it determined that it did not have subject matter jurisdiction to hear the case. Because this case did not involve a “federal question”, the plaintiff attempted to gain entry to federal court on the basis of “diversity jurisdiction” under 28 U.S.C. § 1332(a). That statute provides, in pertinent part:

The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between [] citizens of different States[.] (Emphasis added.)

In sum, the court held that plaintiff could not meet the $75,000 threshold. Plaintiff’s job was seasonal and was eliminated within four weeks, and plaintiff found another job. This resulted in potential back pay in the low four figures – substantially below the federal $75,000 threshold.

Plaintiff argued that he could reach it by establishing sufficient “non-economic” damages – e.g., emotional distress and the like. But the court was not persuaded:

Suarez maintains that he “was extremely hurt, humiliated, and frustrated” by Mosaic’s rescinding the job offer, and that he “gained weight” and “suffered from a great deal of stress … even though he ultimately found another job.” Suarez argues that precedent supports a large compensatory damages award for such “garden-variety” emotional distress damages, despite his failure to allege any required medication or treatment. The argument fails because none of the cases on which he relies allege comparable facts. Rather, they present more serious injury.

The court also rejected plaintiff’s attempt to rely on punitive damages, reasoning that “[a] trial court is plainly not compelled to accept a claim of punitive damages, however unwarranted, made for the purpose of conferring federal jurisdiction” and that “a claim for punitive damages is to be given closer scrutiny … than a claim for actual damages when calculating a jurisdictional amount[.]

Applying the law, the court explained:

[T]he district court was hardly compelled to find that a likely punitive damages award would allow Suarez to satisfy the jurisdictional amount. Suarez submitted an email that he received from Mosaic stating that he had in fact passed Mosaic’s background check, but that a “recruiter, in a simple entry error,” entered the wrong result. App’x 64. Mosaic “greatly apologize[d] for this error,” and offered to “ensure that [Suarez] received an expedited interview” for a number of other open positions at the company. Id. Even if these circumstances might demonstrate negligence by the recruiter, they do not manifest wanton negligence, recklessness, or a conscious disregard of Suarez’s rights by Mosaic.

Finally, the court held that plaintiff could not use attorney fees to bridge the gap, since “attorney’s fees only calculate into the jurisdictional amount in controversy if they are recoverable as a matter of right”, and “[a]ttorney’s fees for NYCFCA violations are discretionary.” The district court was, therefore, correct in not considering them in calculating the amount in controversy.