Smalls v. New York City Employees' Retirement System

Background

James Smalls, representing himself, sued the New York City Employees’ Retirement System over the temporary suspension of his pension benefits. The court held a one-day bench trial on March 11, 2020. On September 15, 2020, it issued findings of fact and legal conclusions and directed entry of judgment for the retirement system on Smalls’s claim that the suspension violated procedural due process, meaning the constitutional requirement for fair procedures before or after certain government actions.

Earlier rulings had dismissed claims against certain individual defendants and dismissed Smalls’s breach-of-fiduciary-duty claim. At the conclusion of the trial, the court dismissed his breach-of-contract claim against the retirement system. The remaining procedural due-process claim was resolved in the retirement system’s favor.

Rule 59 standard

Smalls moved for a new trial under Federal Rule of Civil Procedure 59(a)(2), which allows a court in a nonjury case to reopen the judgment, take additional testimony, change its factual findings or legal conclusions, or enter a new judgment. The court explained that this remedy is discretionary and may be granted for substantial reasons such as a clear legal error, a factual mistake, or newly discovered evidence. It also explained that the rule is not a way to relitigate old issues or present new legal theories.

Arguments and analysis

Smalls again argued that the retirement system violated due process by failing to tell him that he could challenge the suspension through a New York Article 78 proceeding, a state-court procedure for reviewing certain government actions. The court rejected that argument again. Relying on Supreme Court and Second Circuit authority, it held that due process does not require officials to give individuals personalized notice of state-law remedies that are available through published statutes and case law. The court also rejected Smalls’s reliance on a state-court case in which notice of an Article 78 proceeding had allegedly been provided to another person.

Smalls also raised legal theories that he had not included in his earlier pleadings. He argued that the retirement system’s September 14, 2017 letter about a possible suspension violated Section 613-b(L) of New York’s Retirement and Social Security Law, and that the retirement system had misled or defrauded the court. The court said those issues did not affect its due-process analysis, which turned on whether the retirement system had to inform him about the Article 78 remedy. Because the theories were new, they could not support a new trial in any event.

Smalls further characterized the letter as mail fraud and asked the court to refer the retirement system’s conduct to the United States Attorney’s Office. The court found that his mail-fraud allegations were conclusory and noted that he had not shown that the federal mail-fraud statute creates a private right to sue. The court also found that his request for a prosecutorial referral was procedurally improper and, even if considered, lacked merit. It disagreed with his account of the retirement system’s and its counsel’s trial conduct.

Ruling

Judge Katherine Polk Failla denied Smalls’s motion for a new trial and directed the Clerk of Court to terminate the motion at docket entry 75 and mail a copy of the order to Smalls. The court found that he had presented no new evidence, no clear legal error, and no factual mistake that justified a new trial.