338 F.Supp.3d 222
S.D.N.Y.2018Background
- Paul Backer (pro se) previously sued Rabobank and others in federal court (16 Civ. 6577); the court dismissed his federal claims on Sept. 30, 2017 and denied leave to amend.
- Backer filed a new state-court action (the Current Action) alleging abuse of process and prima facie tort based on defendants' conduct in the Previous Action (disclosures, motion practice, and sanctions threats directed at Backer as a purported whistleblower).
- Rabobank removed the Current Action to federal court; this Court ordered briefing on remand and Backer petitioned the Second Circuit for a writ of mandamus and sought a stay pending that petition.
- The Court evaluated (1) Backer’s request for a stay pending mandamus and (2) whether federal subject-matter jurisdiction supported removal under 28 U.S.C. § 1331.
- The Court denied the stay because Backer could not show a likelihood of success on a mandamus/recusal claim and concluded the Current Action raises primarily state-law issues; it remanded the case to New York Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a stay should issue pending Backer’s mandamus petition | Backer argued the district judge was biased, acted extrajudicially, ignored motions, and therefore mandamus/recusal likely to succeed | Defendants opposed stay; argued no basis to disturb district court rulings | Denied — Backer failed to show likelihood of success on mandamus or clear abuse of discretion for recusal |
| Whether mandamus is available to review recusal denial | Backer asserted no other adequate remedy and that denial was clear error | Defendants contended ordinary appellate review suffices and district court did not abuse discretion | Denied — mandamus requires clear and indisputable abuse; standard not met |
| Whether federal question jurisdiction exists over state-law claims about conduct in prior federal litigation | Backer framed claims as state-law abuse of process and prima facie tort; said no federal claim pleaded | Defendants argued resolution would necessarily involve federal issues (whistleblower statute, Fed. R. Civ. P. 11, and prior federal order) | Remanded — federal issues, if any, are not necessarily raised or substantial; state-law issues predominate |
| Whether the complaint pleads a federal whistleblower claim under 15 U.S.C. § 78u-6 | Backer cited SEC confidentiality provision only; did not assert a federal statutory claim | Defendants argued court may consider removal record and that Backer effectively reasserts a federal whistleblower claim | Held — Complaint does not assert a federal whistleblower cause of action; § 78u-6 does not supply jurisdiction |
Key Cases Cited
- Nken v. Holder, 556 U.S. 418 (U.S. 2009) (stay factors for interlocutory appeals)
- Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367 (U.S. 2004) (standards for mandamus)
- Kerr v. U.S. Dist. Court for N. Dist. of Cal., 426 U.S. 394 (U.S. 1976) (mandamus prerequisites)
- Liteky v. United States, 510 U.S. 540 (U.S. 1994) (judicial rulings ordinarily not a basis for recusal)
- Gunn v. Minton, 568 U.S. 251 (U.S. 2013) (requirements for federal-question jurisdiction when state claim implicates federal law)
- Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677 (U.S. 2006) (federal-question tests for state-law claims)
- In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 488 F.3d 112 (2d Cir. 2007) (narrow construction of removal and doubts resolved against removability)
- In re Basciano, 542 F.3d 950 (2d Cir. 2008) (high bar for mandamus to overturn discretionary rulings)
- In re Drexel Burnham Lambert Inc., 861 F.2d 1307 (2d Cir. 1988) (mandamus standards and exceptional remedy)