Cresci v. Mohawk Valley Community College, 693 F. App'x 21

Background

Plaintiff Peter J. Cresci, an attorney proceeding pro se, sued Mohawk Valley Community College (MVCC) and employees under USERRA and 42 U.S.C. § 1983 for discrimination and First Amendment retaliation arising from MVCC’s refusal to hire him in 2012–2013.
Cresci alleged refusals to hire were motivated by his status as a veteran (USERRA claim) and by retaliation for protected speech (representing clients in civil-rights cases and submitting FOIL requests).
District Court dismissed USERRA claims for lack of federal subject-matter jurisdiction and dismissed the First Amendment retaliation claim for failure to state a claim; the court denied leave to amend and entered judgment.
Cresci appealed the jurisdictional dismissal of USERRA claims and the dismissal-with-prejudice of the First Amendment claim and denial of leave to amend.
Second Circuit affirmed lack of jurisdiction over USERRA claims against MVCC (a state entity), vacated the dismissal-with-prejudice of the First Amendment claim, and remanded for opportunity to amend.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal courts have subject-matter jurisdiction over Cresci’s USERRA claims against MVCC (a state actor)	Cresci sought relief under USERRA in federal court against MVCC	MVCC argued USERRA limits federal jurisdiction for individual plaintiffs suing state employers; such suits must be in state court	Held: No federal jurisdiction; affirmed dismissal of USERRA claims (USERRA actions by individuals against states belong in state court)
Whether Cresci plausibly pleaded First Amendment retaliation based on his litigation representing clients	Cresci argued his civil-rights representation constituted protected speech and motivated MVCC’s hiring decisions	MVCC argued Cresci failed to plead that decisionmakers knew of his protected speech or that it motivated adverse hiring decisions	Held: Dismissal was improper with prejudice because complaint did not plausibly allege defendants’ awareness or causation; claim may be amendable; reversal and remand to allow amendment
Whether Cresci alleged retaliation based on FOIL requests	Cresci argued FOIL requests were protected and motivated retaliatory rejections	MVCC pointed out some rejections predated the FOIL requests, undermining causation	Held: Court found pleading implausible as to causation (earlier rejection occurred before FOIL request)
Whether District Court properly denied leave to amend simultaneously with dismissal	Cresci argued he requested leave to replead and should have had opportunity after learning defects	MVCC defended the denial based on local rule and Cresci’s failure to submit a proposed amended complaint earlier	Held: Denial was improper; under Loreley and Rule 15 a plaintiff must be given opportunity to amend after a court explains deficiencies; remanded for further proceedings permitting amendment

Key Cases Cited

Mastafa v. Chevron Corp., 770 F.3d 170 (2d Cir. 2014) (standard for Rule 12(b)(1) subject-matter jurisdiction review)
McIntosh v. Partridge, 540 F.3d 315 (5th Cir. 2008) (USERRA claims by individuals against state employers are for state court)
Goldstein v. Pataki, 516 F.3d 50 (2d Cir. 2008) (Rule 12(b)(6) standard)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of Twombly plausibility standard)
Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Ed., 444 F.3d 158 (2d Cir. 2006) (elements of First Amendment retaliation claim)
Wrobel v. County of Erie, 692 F.3d 22 (2d Cir. 2012) (decisionmakers must be aware of protected conduct for causation)
Loreley Financing (Jersey) No. 3 Ltd. v. Wells Fargo Securities, LLC, 797 F.3d 160 (2d Cir. 2015) (plaintiff entitled to opportunity to amend after court identifies pleading defects)
Porat v. Lincoln Towers Cmty. Ass’n, 464 F.3d 274 (2d Cir. 2006) (liberal policy favoring leave to amend)