Filed: Sep. 11, 2015
Latest Update: Mar. 02, 2020
Summary: 13-4074 Morse v. Fusto 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2014 4 (Argued: October 7, 2014 Decided: September 11, 2015) 5 Docket No. 13-4074 6 7 DR. LEONARD MORSE, 8 Plaintiff–Appellee, 9 v. 10 JOHN FUSTO and JOSE CASTILLO, 11 Defendants–Appellants.* 12 13 Before: JACOBS, SACK, and DRONEY, Circuit Judges. 14 The defendants, John Fusto, a former prosecutor with the New York State 15 Attorney General's Office Medicaid Fraud Control Unit, and Jose Castillo, a 16
Summary: 13-4074 Morse v. Fusto 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2014 4 (Argued: October 7, 2014 Decided: September 11, 2015) 5 Docket No. 13-4074 6 7 DR. LEONARD MORSE, 8 Plaintiff–Appellee, 9 v. 10 JOHN FUSTO and JOSE CASTILLO, 11 Defendants–Appellants.* 12 13 Before: JACOBS, SACK, and DRONEY, Circuit Judges. 14 The defendants, John Fusto, a former prosecutor with the New York State 15 Attorney General's Office Medicaid Fraud Control Unit, and Jose Castillo, a 16 ..
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13‐4074
Morse v. Fusto
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3 August Term, 2014
4 (Argued: October 7, 2014 Decided: September 11, 2015)
5 Docket No. 13‐4074
6
7 DR. LEONARD MORSE,
8 Plaintiff–Appellee,
9 v.
10 JOHN FUSTO and JOSE CASTILLO,
11 Defendants–Appellants.*
12
13 Before: JACOBS, SACK, and DRONEY, Circuit Judges.
14 The defendants, John Fusto, a former prosecutor with the New York State
15 Attorney Generalʹs Office Medicaid Fraud Control Unit, and Jose Castillo, a
16 former audit‐investigator with the Unit, appeal from the September 16, 2013,
17 judgment of the United States District Court for the Eastern District of New York
18 (Carol Bagley Amon, Chief Judge) denying their motions for judgment as a matter
19 of law and a new trial. The defendants argue that the district court erred in
20 failing to accord them qualified immunity as a matter of law and in failing to
The Clerk of Court is respectfully directed to amend the official caption as shown
*
above.
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Morse v. Fusto
1 order a new trial as a result of the courtʹs conclusion that one of the factual bases
2 offered in support of the plaintiffʹs claims lacked a sufficient evidentiary basis to
3 permit it to be considered by the jury for that purpose. We conclude that the
4 defendants were not entitled to qualified immunity because the plaintiffʹs
5 constitutional rights were violated and the law giving rise to the violation was
6 clearly established at the time of the violation. We also conclude that the district
7 court did not err by declining to order a new trial despite its conclusion that one
8 of the factual assertions upon which the verdict was based was insufficiently
9 supported by the evidence.
10 We therefore AFFIRM the judgment of the district court.
11 CECILIA C. CHANG, New York City Law
12 Department, Andrew W. Amend, New
13 York State Office of the Attorney General,
14 New York, NY, for Defendants‐Appellants.1
15 JON NORINSBERG, Law Offices of Jon L.
16 Norinsberg, New York, NY, for Plaintiff–
17 Appellee.
18
The names of Barbara D. Underwood, New York State Solicitor General, Steven C.
1
Wu, Deputy Solicitor General, Seth J. Farber, Assistant Attorney General, Christopher
Y. Miller, Special Assistant Attorney General, and Eric T. Schneiderman, Attorney
General, also appear on the appellantsʹ briefs, but they are not currently representing
the appellants before this Court. At the time the appellantsʹ briefs were submitted, Ms.
Chang was Special Counsel to the Solicitor General.
2
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Morse v. Fusto
1 SACK, Circuit Judge:
2 This is an appeal from a judgment of the United States District Court for
3 the Eastern District of New York (Carol Bagley Amon, Chief Judge) in an action
4 involving the alleged fraudulent alteration of evidence by the defendants, John
5 Fusto, then a Special Assistant Attorney General with the Medicaid Fraud
6 Control Unit (ʺMFCUʺ) of the New York State Attorney Generalʹs Office, and Jose
7 Castillo, then an audit‐investigator with the MFCU, during the course of MFCUʹs
8 investigation of the plaintiff, Dr. Leonard Morse.
9 The defendants suspected that Morse, a dentist with a practice in
10 Brooklyn, New York, was perpetrating Medicaid fraud by submitting false
11 billing to Medicaid. During the course of their investigation, the defendants
12 conducted an audit of Morseʹs billings and created spreadsheet summary charts
13 containing the billing details of eight of his patients. Those charts were later
14 presented to a Kings County, New York, grand jury. Based in part on that
15 evidence, Morse was indicted by the grand jury on one count of Grand Larceny
16 in the First Degree and eleven counts of Offering a False Instrument for Filing in
17 the First Degree. Although Morse was later acquitted of all charges, as a result of
18 the prosecution, he lost his dental practice and sustained other injuries.
3
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Morse v. Fusto
1 After his acquittal, Morse filed the instant action against the defendants in
2 federal district court in Brooklyn alleging that the defendants deprived him of
3 his constitutional right to a fair trial by intentionally manipulating the
4 information contained on the spreadsheet summary charts before they were
5 presented to the grand jury in order to create the false impression that Morse
6 billed Medicaid for dental services that he did not provide.
7 A jury rendered a verdict in his favor, and the defendants moved for
8 judgment as a matter of law under Fed. R. Civ. P. 50 or, in the alternative, a new
9 trial under Fed. R. Civ. P. 59. The district court concluded that one of the factual
10 bases underpinning Morseʹs claim was not sufficiently supported by the
11 evidence to have been properly considered by the jury in reaching its verdict, but
12 nonetheless denied both of the defendantsʹ motions.
13 On appeal, the defendants principally contend that their conduct was not
14 clearly prohibited by the Constitution, and that they are therefore entitled to
15 qualified immunity as a matter of law. The defendants also assert that the
16 district court should have ordered a new trial pursuant to the so‐called general‐
17 verdict rule because the court decided as a matter of law that one of the three
18 factual bases upon which Morseʹs allegation that the defendants ʺfalse[ly] or
4
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Morse v. Fusto
1 fraudulently altered documentsʺ rested lacked a legally sufficient basis in the
2 evidence.
3 We reject these challenges. As the district court held in a careful, detailed,
4 and persuasive post‐trial opinion, Morse v. Fusto, No. 07‐CV‐4793, 2013 WL
5 4647603, at *7, 2013 U.S. Dist. LEXIS 123823, at *18 (E.D.N.Y. Aug. 29, 2013), the
6 actions of the defendants upon which Morse bases his claims were the knowing
7 creation of false or misleading evidence by a government officer acting in an
8 investigative capacity. We have held that such activity by a government official
9 qualifies as an unconstitutional deprivation of the victimʹs rights. This right was,
10 moreover, clearly established at the time of the defendantsʹ conduct. The
11 defendants are therefore not entitled to qualified immunity. See Buckley v.
12 Fitzsimmons, 509 U.S. 259, 273 (1993) (immunity for prosecutors performing
13 investigative functions is not absolute). We also conclude that the defendants
14 waived their general‐verdict rule argument and are therefore not entitled to a
15 new trial despite the district courtʹs conclusion that one of the three factual bases
16 for the juryʹs conclusion as to liability was insufficiently substantiated by the
17 evidence presented at trial.
5
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Morse v. Fusto
1 BACKGROUND
2 The Investigation and Prosecution of Dr. Morse
3 In 2002, the MFCU initiated an investigation into the professional financial
4 affairs of Morse, a dentist, then practicing with another dentist in the Park Slope
5 neighborhood of Brooklyn as ʺ580 Dental, P.C.ʺ The defendant John Fusto, then
6 a Special Assistant Attorney General with the MFCU, was assigned to the case, as
7 was the defendant Jose Castillo, then an MFCU audit‐investigator. As part of the
8 investigation, the defendants audited Morseʹs 2000‐2002 patient billings, creating
9 summaries of the billings designed to highlight those they considered suspicious.
10 They also interviewed Morseʹs patients, inquiring into the professional services
11 that he had rendered to them and the related billings for those services.
12 The investigation drew to a close in late 2005. In March 2006, Fusto
13 presented to a Kings County grand jury evidence of Morseʹs allegedly unlawful
14 billing practices. In the course of the grand jury proceedings, Fusto called
15 Castillo as a witness to testify about a billings analysis that Castillo had prepared
16 which, according to the defendants, showed that through illegal billing, Morse
17 had unlawfully obtained some $1.1 million from New York State Medicaid.
18 Several of Morseʹs former patients also testified that he had not performed
19 denture work for them, despite billings that appeared to indicate otherwise.
6
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1 Finally, and central to the present case, Fusto presented two exhibits,
2 denominated in those proceedings as Exhibit 7 and Exhibit 11, to the grand jury.
3 They contained spreadsheet summary charts purporting to detail the billings
4 associated with eight of Morseʹs patients. The summary charts contained the
5 following fields:
6 Client identification number (denominated ʺCIN NUMBERʺ)
7 Patient last name
8 Patient first name
9 Amount paid
10 Date of service
11 Invoice number
12 Julian date2
13 Procedure code
14 Procedure description
15 Fusto called Dr. Linda DeLuca, a dentist, to testify as to her opinion of the
16 legitimacy of the billings based on the summaries contained in these exhibits.
17 Dr. DeLuca testified that the billings struck her as unusual and excessive.
ʺ[A] Julian date or day number is the number of elapsed days since the beginning of a
2
cycle of 7,980 years invented by Joseph Scaliger in 1583. The purpose of the system is to
make it easy to compute an integer (whole number) difference between one calendar
date and another calendar date.ʺ Julian date, WhatIs.com,
http://whatis.techtarget.com/definition/Julian‐date (last visited Sept. 3, 2015).
7
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Morse v. Fusto
1 On April 5, 2006, the grand jury returned an indictment charging Morse
2 with one count of Grand Larceny in the First Degree in violation of New York
3 Penal Law section 155.42 and eleven counts of Offering a False Instrument For
4 Filing in violation of New York Penal Law section 175.35. The charges were
5 predicated on Morseʹs alleged theft of $1.1 million from Medicaid and his alleged
6 submission of false written statements to the Computer Sciences Corporation, a
7 fiscal agent of the State of New York, with intent to defraud the State of New
8 York, respectively.
9 Morse was acquitted of these charges after an August 2007 bench trial
10 before Kings County Supreme Court Justice John Walsh. Despite his ultimate
11 acquittal, Morse suffered serious financial, reputational, and emotional harm as a
12 result of the high‐profile indictment and trial.
13 The Action Commenced against the Defendants
14 On November 16, 2007, following his acquittal, Morse initiated the instant
15 action in the United States District Court for the Eastern District of New York,
16 asserting claims of, inter alia, false arrest, malicious prosecution, and denial of the
17 right to a fair trial. On November 23, 2009, the defendants moved for partial
18 summary judgment under Fed. R. Civ. P. 56(b). The district court granted the
8
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Morse v. Fusto
1 defendantsʹ motion for summary judgment on the malicious prosecution and
2 false arrest claims, but denied it with respect to the fabrication of evidence
3 claim.3 Morse v. Spitzer, No. 07‐CV‐4793, 2013 WL 359326, at *2, 2011 U.S. Dist.
4 LEXIS 112574, at *4 (E.D.N.Y. Sept. 30, 2011, as corrected Jan. 29, 2013). On
5 February 4, 2013, the parties proceeded to trial before a jury on the fabrication of
6 evidence claim.
7 At trial, Morse focused his fabrication of evidence claim on the billing
8 spreadsheet summaries – labeled Exhibits 7 and 11 – that Castillo and Fusto had
9 prepared during the investigation. Morse argued that the defendants knowingly
10 created the billing summaries to create the false impression that he had billed
11 Medicaid for services that he had not in fact rendered. He pointed to three
12 examples of allegedly false or misleading assertions of ʺfactsʺ included in these
13 summaries:
14 The Stacy Rodriguez ʺTriple Billing Claimʺ: The billing summary for
15 patient Stacy Rodriguez included nine entries, each purportedly
Morse filed his second amended complaint on July 5, 2011, while the defendantsʹ
3
motion for summary judgment was still pending. The district courtʹs partial grant of
summary judgment was made with respect to the second amended complaint. The
second amended complaint also named as defendants ʺEliot Spitzer, Individuallyʺ and
ʺRobert H. Flynn, Individually.ʺ J.A. 149. The district court dismissed the claims
against Flynn during its summary judgment proceedings. The district court dismissed
the claims against Spitzer in a separate order filed January 15, 2013.
9
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Morse v. Fusto
1 representing a distinct procedure performed on the same day, even
2 though records show that Morse billed Medicaid for only three such
3 procedures.
4 The Edwin Gonzalez ʺSuper Patient Claimʺ: The billing summary for
5 patient ʺEdwin Gonzalezʺ contained the billing details for services
6 rendered to three different patients, all named Edwin Gonzalez. The
7 records with respect to those three patients were merged and
8 aggregated to look as though they belonged to one ʺsuper patient.ʺ
9 The Tooth Number Problem: For all of the patients listed in the billing
10 summaries, a ʺtooth numberʺ field was excluded from the
11 spreadsheet. This created the impression that Morse billed Medicaid
12 repeatedly for the same procedure when in fact Morse was billing
13 per tooth for a procedure performed on different teeth of the same
14 patient.
15 At the close of trial, the jury was given a verdict sheet which asked
16 whether, based on a preponderance of the evidence, each defendant was liable
17 for creating ʺfalse or fraudulently altered documents,ʺ ʺconsisting of [the
18 allegedly fraudulent documents], knowing that such information was false or
19 fraudulent,ʺ and, if so, whether that evidence was ʺmaterialʺ to ʺthe grand juryʹs
20 decision to indict.ʺ Verdict Sheet at 1; J.A. 557.
21 The court also instructed the jury as to the defendantsʹ requisite state of
22 mind:
23 Plaintiff must show that the defendants acted knowingly or with
24 reckless disregard. An act is done knowingly if it is done
25 voluntarily and deliberately and not because of mistake, accident,
26 negligence or other innocent reason. An act is done with reckless
10
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Morse v. Fusto
1 disregard if it is done in conscious disregard of its known probable
2 consequences. The plaintiff does not need to show that the
3 defendants specifically intended to deprive him of a constitutional
4 right.
5 Jury Inst. at 9; J.A. 546.4
6 The court defined ʺfalseʺ and ʺfraudulentʺ as follows:
7 A document is false if it is untrue when made and was known to be
8 untrue when made by the person making it or causing it to be made.
9 A document is fraudulent if it is falsely made with intent to deceive.
10 Deceitful half‐truths or the deliberate concealment of material facts
11 may also constitute false or fraudulent information.
12 Id. The court also instructed the jury that ʺfalse or fraudulent evidence was
13 material,ʺ if ʺit was likely to influence the [grand] juryʹs decision to indict.ʺ Id.
14 The jury returned a verdict in favor of Morse based on its finding that both
15 defendants knowingly created ʺfalse or fraudulently altered documents.ʺ Verdict
16 Sheet at 1; J.A. 557. The jury awarded Morse $6,724,936 in compensatory
17 damages —$1,733,941 for past lost earnings; $2,490,995 for future lost earnings;
18 and $2,500,000 for ʺmental/emotional pain and suffering.ʺ Verdict Sheet at 2; J.A.
The instruction thus used the term ʺknowingly or with reckless disregard.ʺ Jury Inst. at
4
9; J.A. 546 (emphasis added). The verdict sheet that the jury later completed reflected
their finding that the defendants ʺcreated false or fraudulently altered documents . . .
knowing that such information was false or fraudulent.ʺ Verdict Sheet at 1, J.A. 557
(emphasis added). On appeal, the defendants do not contest the district courtʹs
reference to ʺreckless disregardʺ in the instructions, and we therefore do not address the
issue of its propriety or materiality.
11
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Morse v. Fusto
1 558. It further awarded Morse $1,000,000 in punitive damages —$750,000 of
2 which was against Fusto, and the remaining $250,000 of which was against
3 Castillo.5 Id. In response to the question on the verdict sheet, ʺHave defendants,
4 John Fusto and Jose Castillo, proven by a preponderance of the evidence that the
5 billing summaries . . . were created in connection with the preparation for the
6 presentation of evidence to the grand jury, and not earlier as part of the
7 investigation?ʺ, the jury answered ʺNo.ʺ Verdict Sheet at 3; J.A. 559.
8 Post‐Judgment Motions
9 After the jury rendered its verdict, the defendants moved for judgment as
10 a matter of law (ʺJMOLʺ) pursuant to Fed. R. Civ. P. 50, or a new trial pursuant to
The facts underlying the amount of the award are set forth by the district court in
5
some detail in Morse, 2013 WL 4647603, 2013 U.S. Dist. LEXIS 123823. They include his
suspension from the New York Medicaid program, on which his practice depended,
and the consequent liquidation of his dental practice; the loss of his teaching position at
a New York hospital (later restored after his acquittal); the public dissemination of the
story of his indictment, including at least one press release from the Attorney Generalʹs
Office and subsequent articles in the New York Post and New York Daily News;
humiliation and ʺsocial and professional disgraceʺ; and a post‐acquittal inability to
procure hospital employment. Id., 2013 WL 4647603, at *23‐25, 2013 U.S. Dist. LEXIS
123823, at *69‐76.
Morseʹs travails are reminiscent of the widely publicized 1987 acquittal of
Raymond J. Donovan, a then‐former United States Secretary of Labor, on New York
State fraud and grand larceny charges. After the verdict, he famously remarked: ʺThe
question is . . . [:] Which office do I go to to get my reputation back? Who will
reimburse my company for the economic jail it has been in for two and a half years?ʹʹ
Selwyn Raab, Donovan Cleared of Fraud Charges by Jury in Bronx, N.Y. TIMES (May 26,
1987), http://www.nytimes.com/1987/05/26/nyregion/donovan‐cleared‐of‐fraud‐
charges‐by‐jury‐in‐bronx.html?pagewanted=1.
12
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Morse v. Fusto
1 Fed. R. Civ. P. 59, or a reduction in the damage award. The defendants argued
2 that they were entitled to JMOL with respect to liability on three grounds: first,
3 the contents of the spreadsheet summary charts were facially true and thus could
4 not have been reasonably found to be either ʺfalse or fraudulentʺ; second, the
5 defendants are entitled to qualified immunity; and third, the defendants are
6 entitled to absolute immunity.
7 The district court concluded that ʺas a matter of law, the Stacy Rodriguez
8 page [was] not a ʹfalseʹ or ʹfraudulently alteredʹ document that can support a
9 fabrication of evidence claim.ʺ Morse, 2013 WL 4647603, at *6, 2013 U.S. Dist.
10 LEXIS 123823, at *18. The district court nonetheless denied the motion for JMOL
11 and upheld the general verdict. Id., 2013 WL 4647603, at *11, *33, 2013 U.S. Dist.
12 LEXIS 123823, at *34, *102. The court explained that the evidence was ʺsufficient
13 to support the juryʹs verdict that the Edwin Gonzalez page and the omission of
14 tooth numbers . . . constituted false or fraudulently altered evidence.ʺ Id., 2013
15 WL 4647603, at *6, 2013 U.S. Dist. LEXIS 123823, at *18.
16 Addressing the defendantsʹ assertion that they were entitled to qualified
17 immunity, the district court concluded that ʺRicciuti [v. N.Y.C. Transit Auth., 124
18 F.3d 123 (2d Cir. 1997)] and its progeny undoubtedly establish that qualified
13
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Morse v. Fusto
1 immunity is unavailable on a claim for denial of the right to a fair trial where that
2 claim is premised on proof that a defendant knowingly fabricated evidence and
3 where a reasonable jury could so find.ʺ Id., 2013 WL 4647603, at *11, 2013 U.S.
4 Dist. LEXIS 123823, at *36 (internal quotation marks omitted).
5 With respect to the defendantsʹ absolute immunity argument, the district
6 court noted that although a prosecutorʹs preparations ʺfor the initiation of
7 judicial proceedings or for trialʺ are protected by absolute immunity, ʺ[a]
8 prosecutorʹs . . . investigatory functions that do not relate to an advocateʹs
9 preparation for the initiation of a prosecution . . . are not entitled to absolute
10 immunity.ʺ Id., 2013 WL 4647603, at *12, 2013 U.S. Dist. LEXIS 123823, at *37
11 (internal quotation marks omitted) (quoting Buckley, 509 U.S. at 273). The court
12 also explained that ʺ[t]he official seeking absolute immunity bears the burden of
13 showing that such immunity is justified for the function in question,ʺ id., and
14 that, in this case ʺthe jury was entitled to simply disbelieve Fustoʹs and Castilloʹs
15 testimonies regarding when they created [the allegedly fraudulent documents,]ʺ
16 id., 2013 WL 4647603, at *13, 2013 U.S. Dist. LEXIS 123823, at *40.
17 Finally, the court rejected the defendantsʹ motion for a new trial as to
18 liability under Fed. R. Civ. P. 59, and granted the defendantsʹ motion for a new
14
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Morse v. Fusto
1 trial with respect to damages unless Morse elected to accept a remitted
2 compensatory damage award of $4,624,936 and a remitted punitive damage
3 award of $100,000. Id., 2013 WL 4647603, at *22‐33, 2013 U.S. Dist. LEXIS 123823,
4 at *69‐102. Morse accepted the remittitur.
5 The defendants appeal from the district courtʹs denial of qualified
6 immunity and from its declining to order a new trial despite its conclusion that
7 one of the factual bases offered in support of Morseʹs claims lacked sufficient
8 evidentiary support.6
9 DISCUSSION
10 I. Standard of Review
11 We review de novo a district courtʹs ruling on a motion for JMOL pursuant
12 to Fed. R. Civ. P. 50, ʺapplying the same standard as the district court.ʺ Cash v.
13 Cty. of Erie, 654 F.3d 324, 332‐33 (2d Cir. 2011). ʺThe standard for post‐verdict
14 judgment as a matter of law is the same as for summary judgment under Fed. R.
The defendants do not appeal from the district courtʹs ruling that they are not
6
entitled to absolute immunity as a matter of law or the district courtʹs ruling on their
Fed. R. Civ. P. 59 motion. Accordingly, we do not review the juryʹs finding that the
billing summaries were created ʺearlier as part of the investigationʺ rather than ʺin
connection with the preparation for the presentation of evidence to the grand jury.ʺ For
the same reason, we need not (and do not) decide whether the district court erred in
denying defendants the protections of absolute immunity. Accordingly, we proceed on
the assumption that the defendants are entitled to qualified immunity, or no immunity
at all.
15
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Morse v. Fusto
1 Civ. P. 56.ʺ Cobb v. Pozzi, 363 F.3d 89, 101 (2d Cir. 2004). Accordingly, ʺa district
2 court must deny a motion for judgment as a matter of law unless, viewed in the
3 light most favorable to the nonmoving party, the evidence is such that, without
4 weighing the credibility of the witnesses or otherwise considering the weight of
5 the evidence, there can be but one conclusion as to the verdict that reasonable
6 persons could have reached.ʺ Id. (alterations and internal quotation marks
7 omitted).
8 That standard places a ʺparticularly heavyʺ burden on the movant where,
9 as here, ʺthe jury has deliberated in the case and actually returned its verdictʺ in
10 favor of the non‐movant. Cross v. N.Y.C. Transit Auth., 417 F.3d 241, 248 (2d Cir.
11 2005). In such circumstances, a court may set aside the verdict only ʺif there
12 exists such a complete absence of evidence supporting the verdict that the juryʹs
13 findings could only have been the result of sheer surmise and conjecture, or the
14 evidence in favor of the movant is so overwhelming that reasonable and fair
15 minded persons could not arrive at a verdict against it.ʺ Brady v. Wal–Mart
16 Stores, Inc., 531 F.3d 127, 133 (2d Cir. 2008) (internal quotation marks and
17 alterations omitted).
16
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Morse v. Fusto
1 II. Qualified Immunity
2 ʺQualified immunity protects public officials performing discretionary
3 functions from personal liability in a civil suit for damages insofar as their
4 conduct does not violate clearly established statutory or constitutional rights of
5 which a reasonable person would have known.ʺ Lore v. City of Syracuse, 670 F.3d
6 127, 162 (2d Cir. 2012) (internal quotation marks omitted). Whether qualified
7 immunity applies ʺturns on the objective legal reasonableness of the action,
8 assessed in light of the legal rules that were clearly established at the time it was
9 taken.ʺ Pearson v. Callahan, 555 U.S. 223, 244 (2009) (internal quotation marks
10 omitted). As we explain in greater detail below, a right is ʺclearly establishedʺ if
11 ʺit would be clear to a reasonable [public official] that his conduct was unlawful
12 in the situation he confronted.ʺ Lore, 670 F.3d at 162.
13 The defendants argue that they are entitled to qualified immunity as a
14 matter of law. First, they assert that they had no constitutional duty to include
15 all material information in the spreadsheet summaries. They rely principally on
16 United States v. Williams, 504 U.S. 36 (1992), and United States v. Regan, 103 F.3d
17 1072 (2d Cir. 1997), for the proposition ʺthat prosecutors may properly give one‐
18 sided presentations to the grand jury in seeking an indictment, and that they are
19 further entitled to keep relevant and material information – even outright
17
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1 exculpatory evidence – from the grand jury.ʺ Appellantsʹ Br. 30 (emphasis
2 omitted). Second, the defendants contend that the omissions involved in
3 creating the billing summaries are not analogous to the fabrication of evidence
4 prohibited under Zahrey v. Coffey, 221 F.3d 342 (2d Cir. 2000), a decision heavily
5 relied upon by the district court. Third, they maintain that in any event, their
6 omission of some details from the summary spreadsheets did not violate clearly
7 established law that would have served to warn them that their conduct was
8 unconstitutional.
9 A. The Constitutional Duty of a Prosecutor
10 ʺIt is axiomatic that the grand jury sits not to determine guilt or innocence,
11 but to assess whether there is adequate basis for bringing a criminal charge.ʺ
12 Williams, 504 U.S. at 51. It has therefore ʺalways been thought sufficient to hear
13 only the prosecutorʹs side.ʺ Id. This means that ʺthe suspect under investigation
14 by the grand jury [has never] been thought to have a right to testify or to have
15 exculpatory evidence presented.ʺ Id. at 52. The defendants argue that the juryʹs
16 finding that they deliberately kept information from the grand jury therefore
17 does not establish a constitutional violation.
18
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1 Notwithstanding the legally permissible one‐sided nature of grand jury
2 proceedings, everyone possesses the additional and distinct ʺright not to be
3 deprived of liberty as a result of the fabrication of evidence by a government
4 officer acting in an investigating capacity.ʺ7 Zahrey, 221 F.3d at 349. This right
5 was violated, Morse contends, when the defendants knowingly created false or
6 misleading billing summaries that were determined to be material to the grand
7 juryʹs decision to indict.
8 We conclude that the omissions in this case were properly considered
9 under the rubric of Zahrey, under which government officials may be held liable
The district court noted that this Circuit has been ʺinconsistent as to whetherʺ
7
fabrication of evidence claims ʺarise[] under the Sixth Amendment right to a fair and
speedy trial, or under the due process clauses of the Fifth and Fourteenth
Amendments.ʺ Morse v. Spitzer, No. 07‐CV‐4793, 2013 WL 359326, at *3, 2011 U.S. Dist.
LEXIS 112574, at *8‐9 (E.D.N.Y. Sept. 30, 2011, as corrected Jan. 29, 2013) (comparing
Zahrey v. Coffey, 221 F.3d 342, 355 (2d Cir. 2000) (ʺIt is firmly established that a
constitutional right exists not to be deprived of liberty on the basis of false evidence
fabricated by a government officer.ʺ) with Ricciuti v. N.Y.C. Transit Auth., 124 F.3d 123,
130 (2d Cir. 1997) (ʺWhen a police officer creates false information likely to influence a
juryʹs decision and forwards that information to prosecutors, he violates the accusedʹs
constitutional right to a fair trial, and the harm occasioned by such an unconscionable
action is redressable in an action for damages under 42 U.S.C. § 1983.ʺ)). The district
court ultimately concluded, however, that ʺ[r]egardless of which constitutional
amendment prohibits government officers from fabricating evidence . . ., these cases
clearly establish that the harm caused by such conduct is redressable through a § 1983
action for damages.ʺ Id., 2013 WL 359326, at *3 n.1, 2011 U.S. Dist. LEXIS 112574, at *9
n.1. We agree with the district court, and therefore do not further address the issue
here.
19
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Morse v. Fusto
1 for fabricating evidence through false statements or omissions that are both
2 material and made knowingly. In Zahrey, the plaintiff, a police officer, brought
3 suit against an Assistant United States Attorney named Martin Coffey, for
4 conspiring to manufacture false evidence against the plaintiff. Coffey
5 ʺinfluenced [the] testimonyʺ of a prospective federal grand jury witness and
6 ʺattempted to pressure and bribe [another witness] to falsely implicate Zahrey.ʺ
7 Id. at 345. The same witness thereafter ʺfalsely testified against Zahrey.ʺ Id. at
8 346. We concluded that the prosecutorʹs behavior violated Zahreyʹs ʺright not to
9 be deprived of liberty as a result of the fabrication of evidence by a government
10 officer acting in an investigating capacity.ʺ Id. at 349.
11 Here, the jury found that by making material omissions in the billing
12 summaries, the defendants in effect falsified them, and they did so knowingly
13 and as part of their investigation. Morse argues that this finding places his case
14 on all fours with Zahrey, requiring us to affirm the judgment of the district court.
15 We agree.
16 As we have observed, ʺfalse information likely to influence a juryʹs
17 decision . . . violates the accusedʹs constitutional right to a fair trial,ʺ because to
18 hold otherwise, ʺworks an unacceptable ʹcorruption of the truth‐seeking function
20
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1 of the trial process.ʹʺ Ricciuti, 124 F.3d at 130 (quoting United States v. Agurs, 427
2 U.S. 97, 104 (1976)). Information may be ʺfalseʺ if material omissions render an
3 otherwise true statement false. For example, in Manganiello v. City of New York,
4 612 F.3d 149 (2d Cir. 2010), we affirmed a verdict against a police officer who was
5 found to have ʺmisrepresented the evidence to the prosecutors, or failed to
6 provide the prosecutor with material evidence or information, or gave testimony
7 to the Grand Jury that was false or contained material omissions,ʺ while knowing
8 that he ʺwas making a material misrepresentation or omission or giving false
9 testimony.ʺ Id. at 159 (internal quotation marks omitted, emphasis added). The
10 Manganiello Court acknowledged that the integrity of the judicial process can be
11 unlawfully compromised by a government officialʹs submission of information to
12 a jury that implicates the accused based in part on material omissions.
13 The defendants ask us to distinguish Manganiello from the instant case on
14 the basis that Manganiello involved a claim against a police officer and not a
15 prosecutor. But we find nothing in Manganiello to suggest a distinction between
16 prosecutors acting in their investigative capacity and police officers acting in
17 theirs, at least in the circumstances presented by the case at bar. To the contrary,
18 the Supreme Court has observed that ʺ[w]hen a prosecutor performs the
21
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1 investigative functions normally performed by a detective or police officer, it is
2 neither appropriate nor justifiable that, for the same act, immunity should
3 protect the one and not the other.ʺ Buckley, 509 U.S. at 273 (internal quotation
4 marks omitted). And we have recognized that prosecutors and police officers are
5 equally responsible for preserving the ʺtruth‐seeking function of the trial
6 process.ʺ Ricciuti, 124 F.3d at 130; see also Napue v. State of Ill., 360 U.S. 264, 269
7 (1959) (stating as a general rule that ʺa State may not knowingly use false
8 evidence, including false testimony, to obtain a tainted convictionʺ).
9 Alternatively, the defendants ask us to distinguish Manganiello because it
10 involved both affirmative misrepresentations and misleading omissions, without
11 directly addressing the distinction between the two. But Manganiello does not
12 suggest that deliberate omissions of material facts are qualitatively different from
13 affirmative misstatements, or that omissions alone cannot support a successful
14 section 1983 action for using fabricated evidence to deprive a plaintiff of his
15 constitutional rights. Nor do we see any reason to distinguish the two under the
16 circumstances of this case. Indeed, both threaten the integrity of the judicial
17 process by injecting it with falsity provided by officers of the state whose official
18 status gives the misinformation a special aura of reliability.
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1 As the district court observed, ʺother areas of law . . . make no legal
2 distinction between misleading statements or omissions and affirmative
3 falsehoods.ʺ Morse, 2013 WL 4647603, at *8, 2013 U.S. Dist. LEXIS 123823, at *25.
4 See, e.g., 18 U.S.C. § 1001 (criminalizing knowingly and willfully ʺfalsif[ying],
5 conceal[ing], or cover[ing] up by any trick, scheme, or device a material fact,ʺ to
6 the federal government); 17 C.F.R. § 240.10b‐5 (prohibiting, under the securities
7 laws, ʺmak[ing] any untrue statement of a material fact or [] omit[ting] to state a
8 material fact necessary in order to make the statements made, in the light of the
9 circumstances under which they were made, not misleadingʺ).8
10 The defendants complain that ʺ[t]he threat of liability for incomplete or
11 under‐inclusive record or transaction summaries will potentially paralyze
12 prosecutorsʹ investigations and preparations for the grand jury.ʺ Appellantsʹ Br.
13 39. This would indeed be a matter of grave concern if it were so. But we foresee
Similarly, the law of libel has long recognized that omissions alone can render a
8
statement false. In Memphis Publishing Co. v. Nichols, 569 S.W.2d 412 (Tenn. 1978), a
newspaper article accurately reported that a woman had shot another woman, the
plaintiff, upon finding her husband at the other womanʹs home. The article neglected to
mention, however, that the husband of the other woman and several neighbors were
also present. The court concluded that the literal accuracy of every material statement
in the article was insufficient to prove the truth of the obvious defamatory insinuation.
In Toney v. WCCO Television, Midwest Cable & Satellite, Inc., 85 F.3d 383, 387 (8th Cir.
1996), then‐retired Justice Byron White, sitting by designation, referred to Nichols as
ʺ[p]erhaps the quintessential modern case of defamation by implication.ʺ
23
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1 no significant barriers to the pursuit of successful prosecutions that would result
2 from the defendantsʹ liability in this case. It ought not to be difficult, even for the
3 most single‐minded of prosecutors, to avoid misconduct of the scope and
4 seriousness of that in which the defendants engaged: 1) ʺcreat[ing] false or
5 fraudulently altered documents,ʺ Verdict Sheet at 1, J.A. 557; 2) in the course of
6 their performance of ʺinvestigatory functions,ʺ Morse, 2013 WL 4647603, at *12,
7 2013 U.S. Dist. LEXIS 123823, at *37; 3) ʺknowing that such information was false
8 or fraudulent,ʺ Verdict Sheet at 1, J.A. 557; 4) where ʺfalseʺ is defined as ʺuntrue
9 when made and . . . known to be untrue when made by the person making it or
10 causing it to be madeʺ and ʺfraudulentʺ as ʺfalsely made with intent to deceive,ʺ
11 Jury Instr. at 9, J.A. 546 (emphasis added). It does not seem to us to be a danger
12 to effective law enforcement to require prosecutors and their aides to abide by
13 these rules even when pursuing the most complicated of cases with the utmost
14 determination.
15 B. Defendantsʹ Remaining Arguments in Favor of Qualified Immunity
16 We find the defendantsʹ remaining arguments in favor of qualified
17 immunity also to be unpersuasive. The defendants assert that the district courtʹs
18 requirement to present evidence ʺas it is, not in an altered form that presents an
24
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1 inaccurate picture of the character of the evidence,ʺ Morse, 2013 WL 4647603, at
2 *10, 2013, U.S. Dist. LEXIS 123823, at *32, was impossible because ʺthere were no
3 paper billing claims to present in their original formʺ and thus ʺno coherent way
4 for defendants to present the database in raw form without selecting from the
5 over fifty fields contained in the database.ʺ Appellantsʹ Br. 36. It is plainly true,
6 as the defendants point out, that ʺ[a] summary of evidence – to be useful, to
7 summarize at all – is necessarily selective.ʺ Appellantsʹ Br. 45. But as we have
8 tried to make clear, the constitutional violation in this case was not the
9 summarization of data, it was the manipulation of data to create false or
10 misleading documents, knowing that such information was false or misleading at
11 the time.
12 To the extent that the defendants insist that the summaries were ʺfactually
13 accurate,ʺ Appellantsʹ Br. 42, they ask us to disregard the juryʹs findings to the
14 contrary. In light of the existence of a firm factual foundation for the juryʹs
15 finding on this score, this is something we plainly cannot do. See Tennant v.
16 Peoria & Pekin Union Railway, 321 U.S. 29, 35 (1944) (ʺCourts are not free to
17 reweigh the evidence and set aside the jury verdict merely because the jury could
25
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1 have drawn different inferences or conclusions or because judges feel that other
2 results are more reasonable.ʺ).
3 C. The Violation of Clearly Established Law
4 Having concluded that the defendantsʹ falsifications constituted a violation
5 of Morseʹs constitutional rights, we must next determine whether the
6 falsifications violated clearly established law that sufficiently warned the
7 defendants that their conduct was unconstitutional. We conclude that they did.
8 ʺQualified immunity protects officials from liability for civil damages as
9 long as their conduct does not violate clearly established statutory or
10 constitutional rights of which a reasonable person would have known.ʺ Taravella
11 v. Town of Wolcott, 599 F.3d 129, 133 (2d Cir. 2010) (internal quotation marks
12 omitted). To be clearly established, ʺ[t]he contours of the right must be
13 sufficiently clear that a reasonable official would understand that what he is
14 doing violates that right.ʺ Anderson v. Creighton, 483 U.S. 635, 640 (1987). This
15 permits a finding of liability even when ʺthe very action in question has [not]
16 previously been held unlawful,ʺ insofar as, ʺin the light of pre‐existing law[,] the
17 unlawfulness [is] apparent.ʺ Id. Qualified immunity therefore only applies if the
18 official action was ʺobjectively legally reasonable in light of the legal rules that
26
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1 were clearly established at the time it was taken.ʺ X–Men Sec., Inc. v. Pataki, 196
2 F.3d 56, 66 (2d Cir. 1999) (alterations omitted).
3 We conclude that the right in question was clearly established such that
4 the defendants are not entitled to qualified immunity. Although there is no prior
5 decision of ours precisely equating the fraudulent omission of factual
6 information from a document with the affirmative perpetration of a falsehood,
7 Ricciuti and its progeny, including Zahrey, clearly establish that ʺqualified
8 immunity is unavailable on a claim for denial of the right to a fair trial where that
9 claim is premised on proof that a defendant knowingly fabricated evidence and
10 where a reasonable jury could so find.ʺ Morse, 2013 WL 4647603, at *11, 2013 U.S.
11 Dist. LEXIS 123823, at *36. As discussed in detail above, because there is no
12 plausible legal distinction between misstatements and omissions that we can
13 perceive in this context, we conclude that it was not ʺobjectively legally
14 reasonableʺ for the defendants in this case to believe that it was permissible for
15 them to knowingly make material omissions in the creation of the billing
16 summaries, thereby knowingly altering evidence during a criminal investigation.
27
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1 IV. A New Trial under the General‐Verdict Rule
2 The defendants argue that the district court erred when it failed to order a
3 new trial after concluding, post‐trial, that ʺas a matter of law, the Stacy
4 Rodriguez page [wa]s not a ʹfalseʹ or ʹfraudulently alteredʹ document that c[ould]
5 support a fabrication of evidence claim.ʺ Morse, 2013 WL 4647603, at *6; 2013
6 U.S. Dist. LEXIS 123823, at *18. The defendants base their assertion on the so‐
7 called ʺgeneral‐verdict rule.ʺ
8 ʺThe Supreme Court decades ago announced the so‐called general verdict
9 rule, that ʹa new trial will be requiredʹ where ʹthere is no way to know that [an]
10 invalid claim . . . . was not the sole basis for [a] verdict.ʹʺ Chowdhury v. WorldTel
11 Bangl. Holding, Ltd., 746 F.3d 42, 50 (2d Cir. 2014) (alterations in original) (quoting
12 United N.Y. & N. J. Sandy Hook Pilots Assʹn v. Halecki, 358 U.S. 613, 619 (1959)),
13 cert. denied sub nom Khan v. Chowdhury, 135 S. Ct. 401 (2014). As we observed in a
14 non‐precedential summary order:
15 This Court has applied the general verdict rule both in cases where
16 one of several legal theories of liability was improperly submitted to
17 the jury, see, e.g., Morrissey v. Natʹl Mar. Union of Am., 544 F.2d 19, 25‐
18 27 (2d Cir. 1976) (applying rule where district court charged jury
19 that defendant could be found liable under either one of two
20 statutory sections, one of which was inapplicable as a matter of law),
21 and also in cases where a single legal theory was submitted to the
22 jury, but one of several sets of facts presented as adequate to prove
28
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1 liability was found insufficient as a matter of law, see, e.g., OʹNeill v.
2 Krzeminski, 839 F.2d 9, 11‐12 (2d Cir. 1988) (applying rule where
3 defendant police officer could not have been liable to plaintiff for
4 failing to prevent injuries resulting from spontaneous beating
5 delivered by other defendant officers, but could have been liable for
6 failing to prevent subsequent mistreatment at the hands of one of
7 those defendants).
8 AIG Global Sec. Lending Corp. v. Banc of Am. Sec., LLC, 386 F. Appʹx 5, 7 (2d Cir.
9 2010) (summary order).
10 In the case before us, the jury returned a general verdict to the effect that
11 the defendants had ʺcreated false or fraudulently altered documents.ʺ Morse,
12 2013 WL 4647603, at *4; 2013 U.S. Dist. LEXIS 123823, at *12. We cannot rule out
13 the possibility that it reached that conclusion relying solely on the ʺStacy
14 Rodriguez ʹTriple Billing Claim,ʹʺ which the district court later concluded was
15 inadequately supported by the evidence. The defendants argue that under the
16 general‐verdict rule, the district court should have granted them a new trial, in
17 which a newly empaneled jury would not be permitted to rely on the ʺStacy
18 Rodriguez ʹTriple Billing Claimʹʺ at all. Morse argues that the defendantsʹ failure
19 to request a special verdict form, request a general verdict with interrogatories,
20 or otherwise object to the verdict form during district court proceedings waives
21 any objections based on the general‐verdict rule.
29
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1 Whether the general‐verdict rule is subject to waiver is an issue of first
2 impression in this Court.9 We conclude, as did the district court, in the
3 affirmative: Having failed to ask for a special verdict, request interrogatories to
4 supplement a general verdict with respect to the three separate factual bases
5 submitted by Morse to the jury, or otherwise object to the form of the verdict
6 sheet or jury instructions ultimately submitted to the jury, the defendantsʹ
7 general‐verdict rule argument is waived. They cannot now complain that it is
8 impossible to know whether the verdict would have been different had the
9 inadequately supported Stacy Rodriguez matter been withdrawn from the juryʹs
10 consideration.
11 The defendants failed to request, prior to jury deliberations, that the
12 district court submit to the jury a special verdict form requiring findings ʺon each
13 issue of factʺ under Fed. R. Civ. P. 49(a), or written questions accompanying the
14 form for a general verdict under Fed. R. Civ. P. 49(b). Nor did the defendants
15 make a timely objection to the general verdict or jury instructions as they were
We appear at least once to have explicitly declined to decide this issue. See OʹNeill v.
9
Krzeminski, 839 F.2d 9, 12 (2d Cir. 1988) (noting that ʺ[i]n the criminal context, . . . a
defendant is obliged to alert a trial judge to a claim that one basis for conviction of an
offense is not supported by sufficient evidence; in the absence of such particularized
objection, the point is waived,ʺ but refraining from ʺdecid[ing] . . . how rigorously the
waiver rule of the criminal cases should apply in the civil contextʺ).
30
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Morse v. Fusto
1 given. The Federal Rules require that an objection relating to a general verdict
2 ʺthat is traced to an alleged error in the jury instruction or verdict sheet,ʺ as it is
3 in this case, must be ʺmade under Fed. R. Civ. P. 51 . . . . [However,] to avail
4 itself of relief under this Rule, a party must object before the jury retires to
5 deliberate.ʺ Jarvis v. Ford Motor Co., 283 F.3d 33, 56 (2d Cir. 2002). The ʺfailure to
6 object to a jury instruction or the form of an interrogatory prior to the jury
7 retiring results in a waiver of that objection.ʺ Id. at 57 (alteration and internal
8 quotation marks omitted).
9 To permit the defendants to rely on the general‐verdict rule when they
10 elected not to avail themselves of the procedural remedies provided by the
11 Federal Rules would allow them ʺanother opportunity to assign as error an
12 allegedly incorrect charge simply because the juryʹs verdict comports with the
13 trial courtʹs instructions.ʺ Id. (internal quotation marks omitted). We conclude
14 that by failing to seek a special verdict or interrogatories on each of the three sets
15 of facts submitted to the jury in support of Morseʹs legal theory of the case, or
16 otherwise object to the verdict sheet or jury instructions, the defendants waived
17 the ability to invoke the general‐verdict rule in seeking, post‐verdict, a new trial
31
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Morse v. Fusto
1 based on the failure of Morse adequately to support one of the three sets of facts
2 on which the general verdict was based.10
3 The Ninth Circuit, in McCord v. Maguire, 873 F.2d 1271 (9th Cir. 1989),
4 amended, 885 F.2d 650 (9th Cir. 1989), similarly concluded that the general‐verdict
5 rule is subject to waiver, and its reasoning bears repeating:
6 [L]itigants have the responsibility to request or submit special verdict
7 forms. Litigants like [the defendant] who wish to challenge the sufficiency
8 of the evidence as to some, but not all, specifications [presented to the jury]
9 must present an appropriate record for review by asking the jury to make
10 separate factual determinations as to each specification. Any other rule
11 would unnecessarily jeopardize jury verdicts that are otherwise fully
12 supported by the record on the mere theoretical possibility that the jury
13 based its decision on unsupported specifications. We will not allow
14 litigants to play procedural brinkmanship with the jury system and take
15 advantage of uncertainties they could well have avoided.
16 873 F.2d at 1274 (citation omitted).11
17 Some twenty years later, the United States District Court for the Southern
18 District of New York cited McCord for the proposition that ʺ[w]here there are
Although the district court concluded the Stacy Rodriguez page could not support a
10
fabrication of the evidence claim, it found the remaining evidence was sufficient to
support the juryʹs verdict irrespective of who should prevail of the waiver issue.
11 The defendantsʹ post‐trial motions challenged the evidentiary support for all of the
ʺspecificationsʺ submitted to the jury and only one of those specifications was
inadequately supported by the evidence. Comparatively, in McCord, the litigants
mounted a challenge to ʺsome, but not all, specifications,ʺ presented to the jury. 873
F.2d at 1274. We perceive no reason why this distinction bears on the circumstances
before us.
32
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1 multiple factual bases for liability on a single claim, one or more of which is
2 found to be defective, but where special interrogatories as to each factual
3 allegation are not requested, the general verdict must be upheld if the remaining
4 evidence is sufficient to support it.ʺ AIG Global Sec. Lending Corp. v. Banc of Am.
5 Sec. LLC, 646 F. Supp. 2d 385, 407 (S.D.N.Y. 2009) (Koeltl, J.), affʹd, 386 F. Appʹx 5
6 (2d Cir. 2010) (summary order). In the case now before us, the district court cited
7 and quoted the district court opinion in AIG Global for the same principle. Morse,
8 2013 WL 4647603, at *6, 2013 U.S. Dist. LEXIS 123823, at *18‐19. We agree with
9 this principle. We conclude that the general‐verdict rule is subject to waiver, and
10 that the defendants have waived their ability to invoke the rule.
11 CONCLUSION
12 For the foregoing reasons, we AFFIRM the judgment of the district court.
33
