Berry v. City of New York

Background

Ronald Berry sued the City of New York, the New York City Transit Authority, and individual employees over an October 3, 2019 arrest. The complaint included claims for false arrest, malicious prosecution, assault, and alleged constitutional violations. The arrest apparently followed a Transit Authority employee’s call to police asserting that Berry was trespassing on Transit Authority property.

The Transit Authority answered and brought a New York unjust-enrichment counterclaim. It alleged that Berry received and cashed paychecks issued in error during approximately six years of claimed medical leave and sought repayment. The City and its employees were dismissed after a settlement. The court also dismissed all claims against the Transit Authority and all claims against Michael Herer except Berry’s federal false-arrest claim under 42 U.S.C. § 1983.

The Transit Authority then asked to remain in the case solely to pursue its counterclaim. The court required it to explain why the federal court should retain jurisdiction over the counterclaim after dismissing the Transit Authority as a defendant. Berry opposed the request and indicated that he would dismiss the remaining claim against Herer if the Transit Authority abandoned its counterclaim.

Counterclaim classification

The court first considered whether the counterclaim was compulsory or permissive under Federal Rule of Civil Procedure 13. A compulsory counterclaim must arise from the same transaction or occurrence as the opposing party’s claim; a permissive counterclaim does not meet that standard.

The court held that the unjust-enrichment counterclaim was permissive. Although both the counterclaim and the arrest-related claims involved questions about Berry’s employment status and permission to be on Transit Authority property, the court found that Berry’s constitutional rights during the 2019 arrest did not depend logically on whether he had been unjustly enriched by receiving paychecks during the preceding years.

Supplemental jurisdiction

The court next considered supplemental jurisdiction, which allows a federal court to hear certain related state-law claims in a case that includes a federal claim. The court held that the counterclaim and the remaining false-arrest claim did not arise from a common nucleus of operative facts.

The false-arrest claim would focus mainly on the events surrounding the October 3, 2019 arrest, including whether Herer provided information to police, whether police exercised independent judgment, and whether there was probable cause. The unjust-enrichment counterclaim would focus mainly on years of earlier payroll payments, Berry’s employment and leave status, the Transit Authority’s alleged loss, and whether it would be unfair for Berry to retain the payments. The court found that the limited factual overlap was only tangential.

The court also concluded that judicial economy, convenience, fairness, and avoiding unnecessary decisions of New York law favored dismissal. Keeping the counterclaim would substantially expand the case into a dispute about six years of payroll payments and New York unjust-enrichment law. The Transit Authority had also voluntarily sought dismissal as a defendant and had waited more than a year after the case began to bring its counterclaim.

Disposition

The court declined to exercise supplemental jurisdiction over the Transit Authority’s counterclaim. The court denied the Transit Authority’s request to remain in the action and dismissed the counterclaim without prejudice.

Because Berry had stated that he intended to dismiss the remaining claim against Herer if the counterclaim was dropped, the court also dismissed and discontinued the case without costs. The order preserved the right to seek reopening within 14 days. The court separately noted that the settling parties could ask it to retain jurisdiction to enforce their settlement by submitting the agreement within that period.