Persaud v. City Of New York

Background

Devanand Persaud, a former accountant for the City of New York’s Department of Finance, sued the City, Sherif Soliman, William Marshall, and Ari Lieberman in their individual and official capacities. He alleged retaliation for protected political speech in violation of the First Amendment, through 42 U.S.C. § 1983, a federal law that allows claims against state or local officials for certain constitutional violations.

Persaud’s father, Steve, wrote an offensive comment about Guyanese politics in response to a Facebook article. The father believed he was using his own Facebook account, but the comment was posted from Persaud’s account. The Department of Finance received complaints about the post. Within days, it directed Persaud to appear and testify, and later asked him to participate in an equal-employment investigation. Persaud did not appear for either requested interview.

The Department of Finance then brought disciplinary charges under Section 75 of the New York Civil Service Law. The charges included conduct that might cause ill will based on national origin or ancestry, violations of social-media and equal-employment policies, failure to appear and testify, conduct prejudicial to good order and discipline, conduct likely to bring the City or Department of Finance into disrepute, and failure to cooperate with the investigation. An administrative law judge sustained all charges and recommended termination. Persaud was terminated one week later, and the New York City Civil Service Commission affirmed the termination.

Defendants’ motion

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. They argued that collateral estoppel, also called issue preclusion, barred Persaud from relitigating retaliation because he had raised a retaliation argument during the administrative proceeding. They also argued that Persaud did not plausibly allege that the defendants believed he had engaged in protected speech or terminated him because of that belief.

Collateral estoppel

The Court rejected the issue-preclusion argument. At the administrative hearing, Persaud argued that the disciplinary charges were retaliation for internal complaints about the City’s attorneys. In this federal case, he alleged a different theory: that the defendants retaliated because they believed he had posted the Facebook comment as protected political speech. Because Persaud did not raise that theory at the administrative hearing, the Court could not conclude that the administrative law judge actually decided it.

The Court also explained that, even if the retaliation issue had been decided, it was not necessary to support the administrative judgment. The administrative proceeding only needed to determine whether Persaud was incompetent or had committed misconduct. A finding that the disciplinary charges were justified did not resolve whether the defendants also acted with a retaliatory motive.

Causation

The Court held that Persaud plausibly alleged causation at the motion-to-dismiss stage. The Department of Finance began requiring him to appear and testify within days of the Facebook post, and at least four disciplinary charges directly concerned the post’s content. The Court treated this timing and connection as circumstantial evidence that the perceived speech played a substantial part in the adverse employment action.

The Court emphasized that Persaud did not yet have to prove improper motive. The ruling addressed only whether the complaint could proceed based on its allegations.

Disposition

The Court denied the defendants’ motion to dismiss and directed the Clerk of Court to terminate docket entry 26. Judge Mary Kay Vyskocil did not decide whether Persaud will ultimately prove First Amendment retaliation or whether the defendants are liable.