Whistleblower John Tipaldo Wins His Case Against the NYC Department of Transportation, 20 Years After Blowing The Whistle

John Tipaldo

Court rules acting in good faith key to whistleblower protection

NYSSBA

On Board Online • November 16, 2015

After becoming aware of alleged bidding irregularities in the New York City Department of Transportation (DOT), an employee notified his immediate supervisors and the Department’s Inspector General. Should the employee be protected under the state’s Civil Service whistleblower law from adverse job actions, even though he failed to first inform the official “appointing authority” as specified in the law?

Yes, according to the state’s highest court, the Court of Appeals, in Tipaldo v. Lynn.

The reason? The appointing authorities and the alleged wrongdoers were one and the same, and the actions of the employee, John Tipaldo, demonstrated good faith compliance with the law.

Tipaldo worked as DOT’s Acting Assistant Commissioner for Planning and Engineering. He discovered an alleged scheme by his then-superiors (Transportation Commissioner Christopher Lynn and First Deputy Commissioner Richard Malchow) by which a signage contract was to be awarded to Lynn’s acquaintance in violation of the city’s public bidding rules.

After an order was placed for the signs from Lynn’s acquaintance, a meeting was held informing DOT employees, including Tipaldo, that the signs had been purchased. The legality of the process was questioned by Tipaldo and other employees, and the DOT employees who were required to authorize the purchase refused to sign the authorization for the purchase. According to the court, the next day, Lynn and Malchow solicited bids from the public and after the delivery and installment of the signs, the DOT received lower bids as compared to the amount paid to Lynn’s acquaintance. Then Lynn and Malchow allegedly created a backdated memorandum indicating that the need for the signs was “urgent” and that the order must be placed immediately, rather than proceed through bidding.

Tipaldo informed his immediate supervisors about the alleged misconduct and, one or two business days later, reported the alleged improper actions to the DOT Office of the Inspector General. Tipaldo claimed that shortly after that, various retaliatory actions were taken against him by Lynn and Malchow. He was eventually removed from his position and demoted.

Tipaldo commenced a whistleblower action pursuant to Civil Service Law Section 75-b. Pursuant to that law, adverse action must not be taken against a public employee because the employee discloses to a governmental body information which he or she “reasonably believes to be true and reasonably believes constitutes an improper governmental action.” However, prior to the reporting, the employee must make “a good faith effort to provide the appointing authority or his or her designee the information to be disclosed and shall provide the appointing authority or designee a reasonable time to take appropriate action unless there is imminent and serious danger to public health or safety.” This requirement gives the employer the opportunity to end the violations prior to disclosing misconduct to an outside agency.

The defendants sought to dismiss the case, arguing that Tipaldo failed to comply with the statute by not reporting the alleged wrongful actions to the appointing authority (Lynn and Malchow) before contacting the Office of the Inspector General.

A state Supreme Court judge granted defendants motion and dismissed the complaint, but the Appellate Division reversed on appeal. The Appellate Division found that “plaintiff’s good-faith efforts in the manner and timing of his reporting, first informally to his immediate supervisors, and then soon thereafter to the [DOI], satisfactorily met the requirements” of the Civil Service Law.

The Court of Appeals agreed with the Appellate Division. It determined that because the appointing authorities in the specific case were actually Lynn and Malchow, the plaintiff “understandably did not report their alleged misconduct to them.” The court noted, “Lynn and Malchow would not likely have been receptive to plaintiff’s complaints or reported themselves to the Department of Investigation.” The court found that Tipaldo’s actions demonstrated good faith compliance with the Civil Service Law.

Although this case does not involve school district employees, the court’s decision applies to all public employees and thus school districts will be affected by this ruling.

Editor’s Note: A legislative bill (A.7951/S.4628) which passed both houses during the last legislative session would eliminate the requirement for a whistleblower to first report to the appointing authority. NYSSBA opposed the bill because such notification provides school districts and other public employers with the opportunity to make corrections and avoid unnecessary litigation. The bill has not yet been delivered to the governor.

John TIPALDO, Respondent, v. Christopher LYNN, & c., et al., Appellants.

New York court orders reinstatement of whistleblower

By on September 2, 2010Posted in Government Whistleblowers

A New York State appellate court has ordered the New York City Department of Transportation to reinstate whistleblower John Tipaldo. When Tipaldo reported that his superiors violated bidding rules, he was demoted from his position as Acting Assistant Commissioner for Planning. That was in 1996. In 2006, the trial court granted the City summary judgment on grounds that Tipaldo had not made a formal report of the bidding violations to the "appointing authority." The appellate court reversed in 2008 holding that Tipaldo’s report to the Department of Investigations was appropriate when the "appointing authority" was the person engaged in the violations. Tipaldo v. Lynn, 48 AD3d 361. The appellate court held that since there was no dispute about the retaliatory demotion, the case would be remanded only for a determination of damages and remedies. On the second appeal, the court held that Tipaldo was entitled to interest on his back pay, thereby increasing his award from $175,000 to $662,721. The appellate court awarded the interest even though the state’s statute did not make any explicit provision for interest. The state statute has "the goal of remediating adverse employment actions which, if allowed, would undermine an important public policy, that is, encouraging public employees to expose fraud, waste and other squandering of the public fisc." Tipaldo had hired an expert to compute the interest and the City did not. The court also held that Tipaldo was entitled to reinstatement even though he had declined promotions offered after his demotion. The court said that his corroborated fear of retaliation made his decisions reasonable so that he could still receive reinstatement as part of the court’s order. It took Tipaldo 14 years, and two trips to the court of appeals to get justice. This is an example of how public officials, when challenged by the integrity of a whistleblower, will waste unlimited public resources to delay justice. This might be a good time for New York’s legislature to consider improving its whistleblower law to provide for general and punitive damages, interest, expert fees, attorney fees and jury trials. The case is Tipaldo v. Lynn, Thank you to the New York Public Personnel Law blog for alerting me to this decision.

Tipaldo v. Lynn

Whistleblower wins more than $1M in lawsuit over demotion

By Susan Edelman

, NY POST, 6/17/17

A whistleblower triumphed in a 20-year battle with City Hall, winning more than $1 million to compensate for a pay cut and demotion he suffered after reporting corruption.

As a Department of Transportation official under Mayor Rudy Giuliani in 1996, John Tipaldo alerted authorities to a plan by his bosses — DOT Commissioner Christopher Lynn and first deputy Richard Malchow — to award a contract to make 100 “Don’t Honk” signs to Lynn’s buddy.

The two officials tried to cover their tracks after awarding the contract by publishing a notice seeking public bids. They also issued a memo claiming an urgent need for the signs required bypassing normal bidding rules, a probe confirmed.

After Tipaldo tipped off the city Department of Investigation, Lynn and Malchow set out to destroy his career, the DOI confirmed.
While Tipaldo was due a promotion to assistant commissioner, the duo bad-mouthed his job performance and demoted him, slashing his salary by $25,000 a year.

Tipaldo sued. While the DOI found him the victim of retaliation, city lawyers argued that the whistleblower law required him to report wrongdoing to his bosses — the same guys engaged in the scam.

“This is an example of how public officials, when challenged by the integrity of a whistleblower, will waste unlimited public resources to delay justice,” the National Whistleblower Center said in 2010, when an appellate court found in Tipaldo’s favor.

The appellate judges ruled Tipaldo deserved a raise, back pay for salary he would have received if he hadn’t fingered Lynn and Malchow — plus 9 percent a year in interest.

But it wasn’t over yet. The city Law Department appealed to the Court of Appeals, the last resort in New York. In 2015, the high court unanimously upheld Tipaldo’s win.

The city finally is paying off its debt to Tipaldo, now a DOT assistant commissioner, in installments.

Last fiscal year, he was NYC’s highest-paid employee, collecting $672,700, including his $176,700 salary, records show.

“It started out by screwing him out of a raise of $25,000 a year. It wound up costing them over $1 million, plus the time and effort of the Law Department for over 20 years,” a source remarked.

“This case has a complicated procedural history, including multiple appeals, that prolonged the litigation,” said Law Department spokesman Nick Paolucci.

Lynn, who insisted his pal “Vinnie” was the only person who could do the sign job, left the DOT in 1997 after the probe concluded he violated procurement rules.

Reached last week, he said he did “nothing illegal or immoral.” and questioned whether Tipaldo deserved the big award.

Tipaldo and his lawyer, Lewis Rosenberg, declined to comment.

How the Politically Connected Control the New York Court System

Judge Joan Kenney

How the politically connected control the New York court system

By Julia Marsh, Carl Campanile and Bruce Golding

Geoffrey Wright

Manhattan lawyers knew Judge Joan Kenney was “confrontational,” “abusive” and “outright nasty” — and said so on a judge-ranking Web site, The Robing Room.

One fed-up attorney went further, complaining to the state Commission on Judicial Conduct that she was “rude” and failed to display “judicial temperament” during a settlement conference.

The city Bar Association publicly branded her with a damning “Not Approved” rating in 2010, saying she failed “to affirmatively demonstrate the requisite qualifications” to sit in judgment of others.

And last year, she was “universally not respected” by a Democratic screening committee that blocked her bid to run for a seat on the state Supreme Court, a panel member told The Post.

But none of the red flags affected her seat on the bench — or even her 2009 promotion to acting Supreme Court justice, for which she scored her first annual renewal just two months after being deemed unfit by the Bar Association.

That all ended on May 9, when Kenney showed up to court an hour late and disheveled, then erupted in fury at reporters taking notes in the public gallery.

“You can’t write everything I say. I think out loud,” she ordered. “In this courtroom, I’m the boss.”

She was demoted to handling lesser matters in Manhattan Civil Court — to which she was elected in 2000 and 2010 — and her conduct cost her the $13,600-a-year salary differential between the two jobs.

It also shone a light on the political machinations that turn lawyers into judges in the Big Apple, where the road to the bench has long been shadowed by suspicions that corrupt pols were putting unqualified hacks on the bench.

“There’s bad apples in any industry, and everybody knows who those judges are. There are several names you can say and the whole room will groan,” said high-profile Manhattan lawyer Elizabeth Eilender, who represented Atlanta Hawks hoopster Thabo Sefolosha in a false-arrest suit against the NYPD. “Even when outrageous behavior is brought to the state’s Commission on Judicial Conduct, nothing gets done. It’s not until the press shines a bright spotlight on this type of conduct that anything is done.”

New York City has more than 400 judges who are selected locally, according to the state Office of Court Administration.

Voters choose the judges for the Supreme, Surrogate’s and Civil courts, while the mayor appoints judges to the Family and Criminal courts and also fills interim vacancies in Civil Court.

For the elected judgeships, candidates must win nomination through a primary election, except for Supreme Court, where candidates are chosen through a judicial nominating convention.

But given the Democratic Party’s overwhelming dominance in every borough except Staten Island, “the ‘election’ of a judge is often determined de facto at the nomination stage,” according to a 2014 guide by the city Bar Association. “Political considerations, including a history of political party activity, contributions to political party organizations and acquaintance with political party officials, may influence the selection process to varying degrees,” the report notes.

That influence has been an issue since the at least the 1800s, when a crisis of confidence in the legal system led voters to amend the state Constitution in 1869 and ratify the election of judges, who at the time were all appointed to the bench.

The change helped sweep from power William “Boss” Tweed’s nakedly corrupt Tammany Hall political machine, with the bloody “Orange Riot” leading to its virtual destruction in the election of 1871.

But any hope that politics no longer corrupted the selection of city judges was irreparably dashed by the mid-2000s scandal that brought down Brooklyn Democratic boss and longtime Assemblyman Clarence Norman for extorting $10,000 from a judicial candidate.

During a 2007 trial — one of three at which Norman was convicted of crooked schemes — former Brooklyn Civil Court Judge Karen Yellen told jurors how the “King of Brooklyn” put the screws to her campaign manager, Scott Levenson, while negotiating his party’s endorsement of her re-election bid.

The deal included a $1,000 donation to the campaign of a Norman political ally, then-Assemblywoman Adele Cohen, and $9,000 to crony William Boone for a get-out-the-vote operation.

“Ultimately, the words he used were, ‘We will dump her,’ ” Yellen testified about the July 2002 shakedown inside Brooklyn’s Democratic Party headquarters on Court Street.

“He was very angry. It was very, very unpleasant. He rose up out of his seat, leaned across the desk and was in Scott’s face.

“I know I was shocked because the way it was done was not the way one expects it to happen — unprofessional and astonishing,” she added.

Yellen broke down in tears while describing the ultimate results of the 2002 Democratic primary. “I lost,” she said. “And I was out of a job.”

But she admitted forking over $9,000 a day after the defeat — in the vain hope it would help buy her another seat on the bench.

“I thought that possibly I could go up to the Supreme Court,” she said. “That I could get the nomination from the party if I paid the monies that were demanded of me, that I could save my career.”

Norman wound up serving nearly four years in the slammer for shaking down Yellen, soliciting illegal contributions from a lobbyist and stealing $5,000 in campaign funds, before being paroled in 2011. He and Yellen both declined to comment.

Kenney’s since-rescinded promotion to acting Supreme Court justice illustrates another way politics can affect the makeup of the city’s judiciary, sources said. While the number of Supreme Court seats in each judicial district is fixed by the state Constitution, the demands of an ever-increasing caseload has led court administrators to elevate certain lower-court judges to fill the gap.

Currently, 143 — or nearly half — of the city’s 294 Supreme Court justices are there by virtue of appointment by the chief administrative judge, in consultation with other court officials.

“The most important factor in making these appointments is ability to handle Supreme Court cases, but seniority is also a factor,” Chief Administrative Judge Lawrence Marks said.

Getting appointed an acting Supreme Court justice is considered “a plum,” said one court insider, who added, “It’s a much more prestigious position and a lot less work.”

“Some people get acting Supreme because they’re producers. Others get it because of support from the county [political] leaders,” the source said. “There’s political grease with 50 to 60 percent of them . . . Unless you do something bad, they don’t take it away from you.”

And while demotions are rare, Kenney’s was actually preceded earlier this year by the even-harsher punishment imposed on Manhattan Civil Court Judge Geoffrey Wright, who was bounced from Manhattan Supreme Court to Queens Family Court. Sources said it was for repeatedly clashing with Manhattan prosecutors, including cursing one out in open court.

The humiliating move followed an official complaint from Manhattan District Attorney Cyrus Vance Jr., sources said at the time.

Neither Kenney nor Wright responded to a request for comment.

Wright — son of the late judge known as “Cut ‘Em Loose Bruce” Wright — is the brother of former Harlem Assemblyman Keith Wright, chairman of the Manhattan Democratic Party.

Last year, The Post revealed that Keith Wright had alienated some party members by pushing for an endorsement of his brother’s law clerk, Phaedra Perry, to run for a Civil Court judgeship.

Perry won the backing of the party’s Executive Committee at a closed-door meeting last month, a source said. Geoffrey Wright is also up for re-election this year, and — despite his recent humbling — is all but guaranteed re-election due to his brother’s influence, said longtime judicial-convention delegate Alan Flacks.

“No one’s allowed to run against him. Keith Wright wants his brother re-elected. There is a panel of one up there, and it’s called the Keith Wright selection panel,” Flacks said.

“What black lawyer in Harlem will run against the county leader’s brother? No one.”

For decades, reformers have been calling for the elimination of judicial elections and creation of an independent “merit-based” selection system involving screening panels composed of lawyers and nonlawyers who don’t hold any other public offices.

“A process which relies on political connections may not sufficiently emphasize the importance of character and integrity, and the extensive political ties of those judges chosen by such a process may additionally make them more susceptible to requests for favors from the political leaders who helped elect them,” according to a 2003 report by a task force of the city Bar Association.

The report cited a 1992 study by the Fund for Modern Courts that examined judicial-misconduct cases dating back 15 years and found that seven of 181 elected city judges were convicted of a crime, removed from office or otherwise publicly sanctioned, compared with just one of 188 appointed judges.

The Bar Association also slammed the naming of acting Supreme Court justices, saying they’re “effectively chosen by an official with limited political visibility, through a process which makes no use of an insulating, independent selection committee.”

It called for ending those appointments in favor of establishing “an adequate number of regular Supreme Court judges,” with court officials agreeing until then not to elevate any judge who “has been found not qualified by this association or any comparable group.”

Retired Appellate Division Justice David Saxe, now a partner at the Morrison Cohen law firm, offered a bleak assessment.

“Our state court system in New York is absolutely insane,” he told The Post. “It has enabled political people to control the courts, and they don’t want to give it up — so it’s very hard to get legitimate change that would be beneficial to the public.