Okarter v. City of Mount Vernon

Background

Chantelle Okarter, described as the City of Mount Vernon’s former appointed Commissioner of the Planning & Community Development Department, sued the City and Deborah Reynolds, identified as the City’s Comptroller, in Reynolds’s official capacity. Okarter asserted claims under the Fair Labor Standards Act (FLSA), the federal wage-and-overtime law, and for common-law breach of contract. She alleged that ordinances transferred funding for her position to the City and required her to receive an annual salary of $108,171, but that Reynolds did not carry out the ordinances. The City answered, admitted most or all of Okarter’s allegations, and asserted a crossclaim seeking indemnification—reimbursement for liability or losses—against Reynolds in both her official and individual capacities.

Okarter had previously pursued relief with the City in a state-court proceeding. The Westchester County Supreme Court denied a request for a preliminary injunction directing Reynolds to transfer funds for Okarter’s salary. The state court found that the March 28, 2018 ordinance was defective because it did not identify the source of the funds. Okarter and the City later discontinued that proceeding without prejudice. In the federal case, Okarter consented to dismissal of her claims against Reynolds, stating that Reynolds was no longer a necessary party. The City did not file papers opposing Reynolds’s motion to dismiss.

Motion to Dismiss

Reynolds moved under Federal Rule of Civil Procedure 12(b)(1), which concerns subject-matter jurisdiction, and Rule 12(b)(6), which concerns whether a complaint adequately states a claim. The court first dismissed all of Okarter’s claims against Reynolds in her official capacity. It relied on Okarter’s consent and on the rule that claims against an official in her official capacity are redundant when the same claims are asserted against the governmental entity itself. The court also dismissed the City’s indemnification crossclaim against Reynolds in her official capacity because that would effectively have the City suing itself for indemnification.

FLSA-Based Crossclaim

The court dismissed the City’s indemnification crossclaim against Reynolds in her individual capacity to the extent it was based on Okarter’s FLSA claim. Relying on Second Circuit precedent, the court held that employers have no right to indemnification or contribution under the FLSA.

Contract-Based Crossclaim

The court also dismissed the City’s indemnification crossclaim against Reynolds in her individual capacity to the extent it was based on Okarter’s breach-of-contract claim. As to the March 28 ordinance, the court applied the Rooker–Feldman doctrine, which generally prevents a federal district court from exercising jurisdiction in a way that would effectively reverse or modify a state-court judgment. The court concluded that deciding whether Reynolds acted outside her authority by refusing to carry out the ordinances would require determining the validity of the March 28 ordinance, which was tied to the state court’s decision.

The court noted that the state court had not ruled on the August 14 ordinance. Even so, it held that the City’s crossclaim based on that ordinance was not adequately stated. The court characterized the underlying dispute as a challenge to an administrative determination about Okarter’s compensation, for which the appropriate procedure was a state proceeding under Article 78. The court also noted that the City had not explained why Okarter’s appointment letter, the ordinances, or related personnel-change documents formed a valid and binding contract. The court therefore dismissed the remaining indemnification crossclaim against Reynolds in her individual capacity.

Disposition

Judge Nelson S. Roman granted Reynolds’s motion to dismiss. The court dismissed without prejudice Okarter’s claims against Reynolds in her official capacity and the City’s crossclaim against Reynolds in both her official and individual capacities. The order did not dismiss Okarter’s claims against the City. The court directed Okarter and the City to file a written status report by August 2, 2022, addressing their intentions for moving forward.