author: REENA RAGGI, Circuit Judge:

text:
    Zhara FERNANDEZ, Tanya Chambers, Kenya Brown, Amy Chu, John Volpe, Andrew Bullington, individually and on behalf of others similarly situated, Plaintiffs-Appellants, v. ZONI LANGUAGE CENTERS, INC. (d/b/a Zoni Language Centers), Zoni Language Centers-Flushing LLC (d/b/a Zoni Language Centers), and Zoilo C. Nieto, Defendants-Appellees.
    Docket No. 16-1689-cv
    August Term, 2016
    United States Court of Appeals, Second Circuit.
    Argued: December 9, 2016
    Decided: May 26, 2017

      Joshua S. Androphy, Michael Faillace & Associates, P.C., New York, New York, for Plaintiffs-Appellants.
    Stephen I. Latzman, Esq., New York, New York, for Defendants-Appellees.
    Before: CALABRESI, RAGGI, LYNCH, Circuit Judges.
   REENA RAGGI, Circuit Judge:

Plaintiffs Zhara Fernandez, Tanya Chambers, Kenya Brown, Amy Chu, John Volpe, and Andrew Buffington are or were employed to teach English as a second language by defendants, two Zoni Language Centers, one in Manhattan and the other in Queens, as well as the centers’ president, Zoilo C. Nieto (collectively, the “Zoni Centers”). On behalf of themselves and others similarly situated, plaintiffs filed this putative class and collective action in the United States District Court for the Southern District of New York (P. Kevin Castel, Judge), alleging that defendants violated the Fair Labor Standards Act (“FLSA”), see 29 U.S.C. §§ 201 et seq., and New York Labor Law, see N.Y. Lab. Law §§ 650 et seq., in failing to pay them both the statutory minimum wage for hours worked out of the classroom and statutory overtime when plaintiffs’ classroom and out-of-classroom work exceeded 40 hours per week. On this appeal, plaintiffs challenge the district court’s dismissal of their FLSA claims for failure to state a claim. See Fed. R. Civ. P. 12(b)(6); Fernandez v. Zoni Language Ctrs., Inc., No. 15-cv-6066, 2016 WL 2903274 (S.D.N.Y. May 18, 2016). They argue that defendants were not entitled to the exemption from the FLSA’s minimum wage and overtime requirements applicable to teachers working as bona fide professionals, see 29 U.S.C. § 213(a)(1); 29 C.F.R. § 541.303(a), because defendants are not “educational establishments,” as required for that exemption to apply, see 29 C.F.R. §§ 541.303(a), 541.204(b).

For the reasons stated herein, we conclude that the Zoni Centers are “educational establishments” under 29 C.F.R. § 541.204(b) and, accordingly, we affirm the judgment in defendants’ favor.

I. Background

A. Defendants Zoni Centers

Defendants Zoni Centers are part of a chain of private, for-profit facilities offer-mg English language instruction. Both Zoni Centers are licensed by the New York State Department of Education as English-as-a-Second-Language schools, as required by state law. See N.Y. Educ. Law § 5001(1), (l)(b), (4)(f)(4). They are also accredited by the Accrediting Council for Continuing Education and Training, one of ten institutions deemed “Nationally Recognized Accrediting Agencies” by the United States Department of Education. See Accreditation-Agency List, U.S. Dep’t of Educ., http://ope.ed.gov/accreditation/ Agencies.aspx (last visited May 23, 2017).

B. Plaintiffs’ Employment at Defendants’ Zoni Centers

Each of the named plaintiffs is or was employed as an English-language instructor at one of the two defendant Zoni Centers. As such, they not only teach English language classes held at the Zoni Centers, but also devote time outside of class to creating lesson plans consistent with Zoni’s curriculum standards, grading students’ midterm and final examinations, and attending professional development meetings. Like teachers at primary and secondary schools, plaintiffs receive no extra compensation for these outside-the-classroom activities. But unlike primary and secondary school teachers, who generally receive a fixed salary for the totality of their work, plaintiffs are paid at an hourly rate^—here, $16 to $17 per hour—calculated by reference only to their classroom teaching time. Plaintiffs allege that their preparation and grading of student work represents a material part of their work-time and should be compensated in addition to classroom time.

C. Procedural History

Plaintiffs filed this action on August 3, 2015, seeking compensation under the FLSA and applicable state law for (1) unpaid minimum wages for their out-of-classroom work, see 29 U.S.C. § 206(a); and (2) overtime pay for any weeks in which a teacher’s total work time inside and outside the classroom exceeded 40 hours, see id. § 207(a). The Zoni Centers moved to dismiss the complaint, arguing that plaintiffs, as “teachers” at an “educational establishment,” 29 C.F.R. § 541.303(a), are subject to the FLSA’s exemption from minimum wage and overtime requirements for persons “employed in a bona fide executive, administrative, or professional capacity,” 29 U.S.C. § 213(a)(1). In opposing the motion, plaintiffs conceded that they were “teachers” under the applicable regulation, but disputed the Zoni Centers’ status as an “educational establishment.”

On May 18, 2016, the district court concluded, based on its review of eight factors, that the Zoni Centers were properly characterized as “other educational institution[s]” within the meaning of the Department of Labor’s (“DOL’s”) exemptive regulations. Accordingly, it dismissed plaintiffs’ FLSA claims on the merits and declined to exercise supplemental jurisdiction over their state-law claims. A final judgment of dismissal was entered the same day, from which plaintiffs now appeal.

II. Discussion

A. Standard of Review

We review de novo both the district court’s interpretation of administrative regulations, see Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 558 (2d Cir. 2012), and its judgment of dismissal under Rule 12(b)(6), accepting plaintiffs’ plausible allegations as true and drawing all reasonable inferences in their favor, see Chen v. Major League Baseball Props., Inc., 798 F.3d 72, 76 (2d Cir. 2015).

B. The FLSA’s Exemption for Bona Fide Professionals, Including Teachers at Educational Establishments

The FLSA generally requires employers to pay “employees a specified minimum wage, and overtime of time and one-half for hours worked in excess of forty hours per week.” Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528, 533 (2d Cir. 2015) (citing 29 U.S.C. §§ 206-207). Because the FLSA is remedial legislation, we construe its exemptions narrowly and place the burden on the employer to show that his establishment is “plainly and unmistakably within the[ ] terms and spirit” of the exemption. Chen v. Major League Baseball Props., Inc., 798 F.3d at 81 (internal quotation marks omitted).

The statutory exemption at issue here states that the FLSA’s minimum wage and overtime requirements “shall not apply with respect to ... any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools).” 29 U.S.C. § 213(a)(1); see Anani v. CVS RX Servs., Inc., 730 F.3d 146, 150 & n.4 (2d Cir. 2013). The DOL, which administers the FLSA, see 29 U.S.C. § 204, has promulgated regulations pertinent to this exemption, see 29 C.F.R. pt. 541. The regulations at issue here, having undergone the notice-and-comment process, see Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, 69 Fed. Reg. 22,122 (Apr. 23, 2004) (codified at 29 C.F.R. pt. 541), “ ‘have the force of law, and are to be given controlling weight unless they are found to be arbitrary, capricious, or manifestly contrary to the statute,’ ” Ramos v. Baldor Specialty Foods, Inc., 687 F.3d at 559 (quoting Freeman v. Nat’l Broad. Co., 80 F.3d 78, 82 (2d Cir. 1996)). The parties here make no such challenge to the DOL’s regulations. Rather, they dispute only the regulations’ meaning. Before addressing that dispute, we make a few observations.

In general, an employer relying on the “bona fide professional” exemption from the FLSA’s minimum wage and overtime mandates “must satisfy both a duties requirement and a salary requirement.” Anani v. CVS RX Servs., Inc., 730 F.3d at 147. To satisfy the duty requirement, the employer must generally show that the employee’s work requires “knowledge of an advanced type in. a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction,” or “invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.” 29 C.F.R. § 541.300(a)(2). To satisfy the salary requirement, the employer must show that the employee has been “[c]ompensated on a salary basis at a rate of not less than $455 per week.” 29 C.F.R. § 541.600(a); see Anani v. CVS RX Servs., Inc., 730 F.3d at 147-48.

These generalized duty and salary requirements, however, do not apply to “teaching professionals.” 29 C.F.R. § 541.303(d). Rather, the applicable regulations dispense with the salary requirement entirely, see id., and establish a more specific duty test, identifying a teaching professional as an employee (1) “with a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge,” (2) “who is employed and engaged in this activity as a teacher in an educational establishment,” id. § 541.303(a). Plaintiffs concede that their primary duty while employed by defendants is teaching in order to impart knowledge, specifically, knowledge of the English language. What they dispute is defendants’ status as qualifying “educational establishments].”

DOL regulations define “educational establishment” as “an elementary or secondary school system, an institution of higher education or other educational institution.” Id. § 541.204(b). The Zoni Centers are not associated with an elementary or secondary school, or with any institution of higher education. Thus, to qualify for the FLSA exemption applicable to bona fide professionals, they must be “other educational institution^.” Id. (emphasis added).

DOL regulations do not specifically define “other educational institution.” Instead, they state that (1) the term “includes special schools for mentally or physically disabled or gifted children, regardless of any classification of such schools as elementary, secondary or higher”; (2) “[f]actors relevant in determining whether post-secondary career programs are educational institutions include whether the school is licensed by a state agency responsible for the state’s educational system or accredited by a nationally recognized accrediting organization for career schools”; and (3) “for purposes of the [teaching professional] exemption, no distinction is drawn between public and private schools, or between those operated for profit and those that are not for profit.” Id.

C. Regulatory Interpretation of “Other Educational Institution”

In this case, we address whether the Zoni Centers constitute such an “other educational institution.” In so doing, we look to the plain language of the regulatory text, which we consider “in light of its purpose, as stated in the regulation’s preamble ... as well as the purpose of the regulation’s authorizing statute.” Halo v. Yale Health Plan, Dir. of Benefits & Records Yale Univ., 819 F.3d 42, 52 (2d Cir. 2016) (citing approvingly to Kevin M. Stack, Interpreting Regulations, 111 Mich. L. Rev. 355 (2012)).

1. Plain Meaning

The word “educational,” as used both in the operative regulations and in DOL opinion letters, appears here to bear its common meaning, i.e., “of, relating to, or concerned with education or the field of education.” Webster’s Third New International Dictionary (Unabridged) 723 (1986 ed.). “Education” is “the act or process of providing with knowledge, skill, competence or us[ually] desirable qualities of behavior or character or of being so provided especially] by a formal course of study, instruction, or training.” See id. This comports with § 541.303, captioned “Teachers,” which states that the FLSA’s bona fide professional exemption applies to “any employee with a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge. ...” 29 C.F.R. § 541.303(a) (emphasis added). Whether an institution is “educational” thus turns not upon the subject matter that is learned, but upon whether and how it is provided.

The open-ended nature of this definition is confirmed by the applicable regulation, which does not explain what an “other educational institution” means or is limited to, but only what it “includes,” 29 C.F.R. § 541.204(b) (emphasis added). Such language indicates that the facilities discussed thereafter-—special schools for disabled or gifted children—are merely illustrative, and not exhaustive, as to what might qualify as an “other educational institution.” See Black’s Law Dictionary 831 (9th ed. 2009) (explaining that “participle including typically indicates a partial list” (emphasis in original)); Webster’s Third New International Dictionary (Unabridged) 1143 (defining “include” as “to place, list, or rate as a part or component of a whole of a larger group, class, or aggregate”). This conclusion is reinforced by § 541.204(b)’s next sentence, which recognizes that “post-secondary career programs”—entities distinct from the aforementioned special schools— can also qualify as educational establishments, particularly if they are state-licensed or nationally accredited.

Applying these plain-language considerations here, the Zoni Centers are “other educational institution^].” As described in plaintiffs’ amended complaint, their primary purpose is to provide English-language instruction to students using prescribed books in a traditional classroom environment. Every lesson plan must include speaking, listening, writing, and reading English, with student progress assessed on midterm and final examinations. These allegations confirm that plaintiffs were engaged in the transmittal of knowledge to students in much the same way as primary and secondary school teachers, except that plaintiffs’ students were adults, not children, and the knowledge conveyed to them focused on a single subject, the English language. Further, as discussed by the regulation in the context of career schools, the Zoni Centers have both national educational accreditations and state licensure. Indeed, the latter qualification requires that Zoni Center teachers have completed a program in teaching English as a second language or have at least one year’s experience teaching English as a second language, see 8 N.Y.C.R.R. § 126.10(j)(3)(iii)(a), further indicating that the teaching of English as a second language in New York is conducted by bona fide professionals.

2. Regulatory Purpose

The purpose of the regulation warrants no different conclusion. What scant legislative history there is regarding 29 U.S.C. § 213(a)(1)’s bona fide professional exemption suggests that it was premised on the intention to exempt workers who “typically earned salaries well above the minimum wage, and ... were presumed to enjoy other compensatory privileges ... setting them apart from the nonexempt workers entitled to overtime pay.” Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, 69 Fed. Reg. at 22, 124. Here, plaintiffs’ $16-to-$17 hourly pay for their classroom work is well above the federal hourly minimum wage. Even when plaintiffs’ earnings are attributed to the total hours worked inside and outside the classroom, no plaintiffs hourly rate of pay declines to less than $10 per hour, still above the federal and state minimum wage during that period. See 29 U.S.C. § 206(a)(1)(C) (mandating federal minimum wage of $7.25 as of July 2009); N.Y. Lab. Law § 652(1) (raising state minimum wage to $8 per hour effective December 31, 2013, and $8.75 effective December 31, 2014).

Certainly, plaintiffs’ total weekly earnings are hardly munificent and much lower than those of a new teacher employed by the New York City Board of Education. See United Fed’n of Teachers, Salary Schedules for 2009-2018 Contract 2-5, http://www.uft.org/files/attachments/ secure/teacher-schedule-2009-2018.pdf (announcing increases in minimum base salary for New York City teachers to $45,985 as of May 1, 2013, and to $49,908 as of May 1, 2015). Also, because the FLSA is a remedial statute intended “to remedy the evil of overwork,” Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015) (internal quotation marks omitted), we must limit the application of FLSA exemptions “to those establishments plainly and unmistakably within their terms and spirit,” Chen v. Major League Baseball Props., Inc., 798 F.3d at 81 (internal quotation marks omitted). But we need not further address the aptness of a comparison between the wages of plaintiffs and other teachers because DOL regulations—the enforceability of which plaintiffs do not challenge—specifically exclude any salary requirement for exempt teaching professionals. See 29 C.F.R. § 541.303(d).

As for the regulatory preamble, it too has little to say about application of the bona fide professional exemption to teachers. It highlights the DOL’s decision to use state licensure and national accreditation as relevant factors in deciding whether post-secondary career programs qualify for the exemption. See 69 Fed. Reg. at 22,147. Otherwise, the preamble simply states, in response to industry commen-ters, that DOL opinion letters can provide guidance in deciding whether a particular entity constitutes an “other educational institution” for purposes of the FLSA bona fide professional exemption. See id.; see also Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132, 149 (2d Cir. 2008) (observing that this court has “often relied” on such letters “for their persuasive value” as illustrating “a body of experience and informed judgment to which courts and litigants may properly resort for guidance” (internal quotation marks omitted)).

Our review of applicable DOL opinion letters confirms the breadth of subject-matter areas that may be encompassed by an “educational institution.” For example, the DOL has concluded that the bona fide professional exemption for teachers applies to instructional programs for automobile, diesel, collision repair, motorcycle, and marine technicians, see Opinion Letter from Dep’t of Labor, Wage & Hour Div. (“Opinion Letter”), 2006 ,WL 3406601 (Oct. 26, 2006); to cosmetology schools, see Opinion Letter, 2008 WL 4906284 (Oct. 1, 2008); and to daycare providers, at least insofar as they provide “grade school currículums, introductory programs in kindergarten, or nursery school programs in elementary education,” and not simply childcare, Opinion Letter, 2008 WL 4906283 (Sept. 29, 2008). While no DOL opinion letters address the status of an English language instructor at a standalone language instruction facility, we see no principled ground for differentiating such a facility from those discussed in the cited opinion letters.

D. Plaintiffs’ Arguments

1. “Other Educational Institution” Is Not Limited to Schools for the Disabled or Gifted, or to Post-Secondary Career Programs

In urging the contrary conclusion, plaintiffs first assert that 29 C.F.R. § 541.204(b), by specifically identifying schools for “disabled or gifted children” and “post-secondary career programs” as “other educational institution[s],” necessarily excludes other instructional programs from that phrase. See NLRB v. SW Gen., Inc., — U.S.-, 137 S.Ct. 929, 940, 197 L.Ed.2d 263 (2017) (explaining “expressio unius est exclusio alterius” canon, which suggests that expression of one or several items in enumerated list signals intent to “exclude[ ] another left unmentioned.” (internal quotation marks omitted)). We cannot agree.

As a preliminary matter, “[o]ther educational institution” is the third and final category listed in the definition of an “educational establishment,” with the prior two being elementary or secondary school systems and institutions of higher learning. Where such a series of specifically defined disjunctive terms ends with a generalized “other” category, that can indicate that the ultimate term is a “catchall” provision. See, e.g., T.M. ex rel. A.M. v. Cornwall Cent. Sch. Dist., 752 F.3d 145, 164 (2d Cir. 2014) (so concluding as to phrase “or other removal of children” in least-restrictive-environment provision of Individuals with Disabilities Education Act); City of New York v. Permanent Mission of India to the United Nations, 618 F.3d 172, 183 (2d Cir. 2010) (concluding that “other benefits” term in definition of benefits under Foreign Missions Act not limited by preceding specific terms that were merely “illustrative”).

That § 541.204(b) is such a catchall provision is evident from its text, which does not state what an “other educational institution” is, or is limited to, but only what the term “includes.” 29 C.F.R. § 541.204(b) (emphasis added). As we have already observed, the use of that word generally indicates a partial list. See supra Part II.C.1. Thus, “[t]he word ‘include’ ... generally signals that entities not specifically enumerated are not excluded.” 2A N. Singer & S. Singer, Sutherland on Statutes and Statutory Construction § 47:25, at 444 (7th rev. ed. 2014); see Environmen tal Encapsulating Corp. v. City of New York, 855 F.2d 48, 54 (2d Cir. 1988) (“We are reluctant to read the term ‘includes’ as meaning ‘is limited to.’ ”). The expressio unius canon warrants no different conclusion because it requires “identifying a series of two or more terms or things that should be understood to go hand in hand, which is abridged in circumstances supporting a sensible inference that the term left out must have been meant to be excluded.” Chevron U.S.A. Inc. v. Echazabal, 536 U.S. 73, 81, 122 S.Ct. 2045, 153 L.Ed.2d 82 (2002) (emphasis added). That is not so here because special schools for the disabled or gifted are not so closely related to post-secondary career programs as to admit the necessary inference that all other instructional programs were deliberately excluded from the regulation.

2. Neither Certificates Held by Teachers nor Earned by Students Are Necessary for the Zoni Centers To Qualify as “Other Educational Institution[s]” under 29 C.F.R. § 541.204(b)

Plaintiffs argue that, even if the institutions specifically enumerated in § 541.204(b) are not exclusive, defendant Zoni Centers do not qualify as “other educational institutionfs]” because their instructors do not possess, and their students do not earn, certificates akin to their primary school, secondary school, or college counterparts. Specifically, plaintiffs argue that Zoni completion certificates are not required for a career; Zoni teachers need not themselves possess teaching certificates, or even major in a field related to English language instruction; and some Zoni teachers may, in fact, lack the baccalaureate degrees required by state law.

These arguments fail because plaintiffs point to nothing in the statute or its implementing regulations indicating that an “educational establishment” must (1) require instructors to hold teaching certificates or (2) award students certificates necessary for employment or educational opportunities. The need for the latter certificate is belied by DOL’s inclusion in a non-exhaustive list of “[ejxempt teachers” persons teaching nursery school, home economics, and vocal or instrumental music—areas where a certificate of course completion would not be a necessary prerequisite for employment or academic advancement. See 29 C.F.R. § 541.303(b). Even if facility with English is not a prerequisite for particular jobs, plaintiffs cannot dispute that English fluency is a gateway for many more employment opportunities in the United States. See, e.g., Jennifer Cheeseman Day & Hyon B. Shin, U.S. Census Bureau, How Does Ability To Speak English Affect Earnings? 6-8, http://www. census.gov/hhes/socdemo/language/data/ acs/PAA_2005_AbilityandEarnings.pdf (conducting study using 2000 Census data and concluding that greater English-language proficiency correlated with higher earnings in United States labor market). As for teacher certification, while “an elementary or secondary [school] teacher’s certificate [is] a clear means of identifying the individuals contemplated as being within the scope of the exemption for teaching professionals,” § 541.303(c), the same regulation observes that “a teacher’s certificate is not generally necessary for employment in institutions of higher education or other educational establishments,” and that “a teacher who is not certified may be considered for exemption,” id. DOL opinion letters make equally plain that “there is no minimum educational or academic degree requirement for bona fide teaching professionals in educational institutions.” Opinion Letter, 2008 WL 4906281 (Sept. 26, 2008); see Opinion Letter, 2008 WL 4906284 (Oct. 1, 2008) (“[U]nlike the learned professional exemption, there is no requirement that exempt teachers possess an advanced degree in a field of science or learning.”); id. (stating that cosmetology instructors are exempt teachers notwithstanding that they “do not possess teaching certificates”).

3. Further Discovery Was Not Required

Finally, plaintiffs submit that dismissal was premature insofar as the Zoni Centers and/or certain of its teacher-employees may not be in full compliance with their licensure and accreditation requirements. We are not persuaded because that factual question does not bear on the legal issue of whether the Zoni Centers are the type of institution DOL regulations deem “educational.” DOL’s regulations speak only of whether the establishment has received licensure or accreditation, not whether it is actually compliant therewith. See 29 C.F.R. § 541.204(b).

E. Other Factors Bearing on Defendants’ Educational Status

In identifying the Zoni Centers here as educational establishments, whose teachers are bona fide professionals exempt from FLSA minimum wage and overtime requirements, we do not conclude that the factors that decide this case are the only ones relevant to determining whether an establishment is “educational” under 29 C.F.R. § 541.204(b), or whether an employee is a “teacher,” see id. § 541.303(a)-(b). Specifically, we do not disapprove consideration of any other factors relied on by the district court. We hold only that consideration of ah eight factors identified by the district court is not compelled in every case by the plain language of the relevant regulations. Where, as here, there is no dispute that the plaintiffs are teachers employed by defendants “with a primary duty of teaching” in order to “impartí ] knowledge,” the pleadings themselves established that plaintiffs “engaged in this activity as ... teacher[s] in an educational establishment,” id. § 541.303(a), ie., an establishment whose primary purpose was to convey knowledge. Other evidence, subject to judicial notice in this case, such as defendants’ state licensure and national accreditation, and state requirements for professionals teaching English as a second language, only reinforces that conclusion.

Accordingly, we conclude that because the FLSA bona fide professional exemption applies here, plaintiffs cannot state plausible FLSA claims for minimum wage and overtime payments. We affirm the district court’s judgment of dismissal.

III. Conclusion

To summarize, we conclude as follows:

1. Defendants’ language-instruction facilities are “other educational insti-tutionfs]” under 29 C.F.R. § 541.204(b) because plaintiffs’ complaint demonstrates that their primary purpose is to impart knowledge, specifically, knowledge of the English language.
2. This status is further supported by defendants’ possession of state licen-sure and recognized national accreditation.
3. These conclusions, considered together, plainly establish defendants’ entitlement to the FLSA’s bona fide professional exemption applicable to teachers, see 29 U.S.C. § 213(a)(1); 29 C.F.R. § 541.303(a), and prevent plaintiffs from pleading plausible minimum wage and overtime claims. Accordingly, the district court correctly dismissed these federal claims with prejudice and related state-law claims without prejudice to refiling in state court.

The challenged district court judgment is, therefore, AFFIRMED.

      . Upon dismissing plaintiffs’ federal claims on the merits, the district court declined to exercise supplemental jurisdiction over related state law claims and, instead, dismissed these claims without prejudice to refiling in state court. See Fernandez v. Zoni Language Ctrs., Inc., 2016 WL 2903274, at *12-13. Because plaintiffs raised no challenge to that decision but, rather, urged it, see Pl's Opp. to Mot. to Dismiss at 16 n.3, Fernandez v. Zoni Language Ctrs., Inc., No. 15-cv-6066, (S.D.N.Y. Dec. 11, 2015), ECF No. 21 ("Plaintiffs acknowledge that if the Court dismisses Plaintiffs['] federal claims, the Court should decline to continue to exercise supplemental jurisdiction over the state law claims of the Complaint.”), we affirm this part of the judgment without further discussion, see Indiana Pub. Ret. Sys. v. SAIC, Inc., 818 F.3d 85, 93 (2d Cir. 2016) (declining to consider any challenge to dismissal of claims where "affirmatively waived”).

      . Various allegations in the complaint can be summarized as asserting that plaintiffs on average were paid for approximately between 25 and 35 hours of in-class time each week, but that they spent on average between 8 and 10 uncompensated hours per week preparing for class. Thus, the complaint asserts that something on the order of 15-30% of plaintiffs’ work time was uncompensated, depending on the plaintiff and the particular week (since plaintiffs’ hours varied depending on the curriculum and exam schedules).

      . Citing two opinions from outside this circuit, see Astor v. United States, 79 Fed.Cl. 303, 316-17 (2007); Escobedo v. Constr. Laborers’ Educ. Training & Apprenticeship Fund, No. 11-cv-3653, 2012 WL 4838880, at *4-6 (D. Minn. Oct. 11, 2012), as well as the applicable DOL regulation, 29 C.F.R. § 541.204(b), the district court identified the following eight factors as relevant to determining whether a facility qualifies as an "other educational institution”:
      (1) the title of employees;

        (2) the certifications required of [employees];
      (3) the formality of courses;
      (4) the granting of certificates or degrees;
      (5) the [institution’s] charter;
      (6) the [employees’] involvement in organizing, communicating and delivering curriculum;
      (7) whether the [institution] is licensed by a state agency responsible for the state’s educational system; and,
      (8) whether the [institution] is accredited by a nationally recognized accrediting organization.
      App’x 91-92; see Fernandez v. Zoni Language Ctrs., Inc., 2016 WL 2903274, at *8.
      While we agree that these factors can be helpful in identifying an “other educational institution’’ that may qualify under the bona fide professional exemption applicable to teachers, we do not adopt these factors as a formal test determinative in every case.

      . In this opinion, we address only so much of the exemption as applies to teachers, who are "professional’’ rather than "executive’’ or “administrative” employees. See 29 C.F.R. § 541.303(a).

      . The salary threshold was recently increased to "not less than $913 ... per week.” 29 C.F.R. § 541.600(a) (effective Dec. 1, 2016). That amendment, however, is presently enjoined nationwide. See Nevada v. U.S. Dep't of Labor, 218 F.Supp.3d 520, 533-34, 2016 WL 6879615, at *9 (E.D. Tex. Nov. 22, 2016), appeal docketed, No. 16-41606 (5th Cir. Dec. 1, 2016).

      . The parties agree that DOL regulations use the terms "other educational institution” and “other educational establishment” interchangeably.

      . After plaintiffs filed their amended complaint, the state minimum wage increased to $9 effective December 31, 2015 and $11 effective December 31, 2016. See N.Y. Lab. Law § 652(1).


source: Caselaw Access Project

author: DENNIS JACOBS, Circuit Judge:

license: Public Domain

text:
    The Hon. Otto J. REICH, Otto Reich Associates, LLC, Plaintiffs-Appellants, v. Leopoldo Alejandro Betancourt LOPEZ, Pedro Jose Trebbau Lopez, Defendants-Appellees.
    Docket No. 16-510-cv
    August Term, 2016
    United States Court of Appeals, Second Circuit.
    Argued: March 10, 2017
    Decided: May 26, 2017

      JEFFREY ERNEST GRELL, Grell Feist Prince PLC, Minneapolis, Minnesota, for Appellants The Hon. Otto J. Reich and Otto Reich Associates, LLC.
    FRANK H. WOHL (with Jonathan D. Lamberti, on the brief), Lankier Siffert & Wohl LLP, New York, New York for Ap-pellee Leopoldo Alejandro Betancourt Lopez.
    JOSEPH A. DEMARIA, Fox Rothschild LLP, Miami, Florida for Appellee Pedro Jose Trebbau Lopez.
    Before: JACOBS and DRONEY, Circuit Judges, and STANCEU, Chief Judge, U.S. Court of Int’l Trade.

       Judge Timothy C. Stanceu, Chief Judge of the United States Court of International Trade, sitting by designation.

   DENNIS JACOBS, Circuit Judge:

Plaintiff-Appellant Otto J. Reich is the principal of a (co-plaintiff) consulting firm specializing, inter alia, in fighting government corruption. He alleges that he and his firm were victims of an effort to discredit them by persons connected to a Venezuelan energy company that was in litigation with one of Reich’s clients. This appeal is taken from the dismissal of his RICO and state law claims against the principals of the Venezuelan energy company, and we affirm the rulings of the District Court for the Southern District of New York (Oetken, J.). Dismissal of the RICO claims under Rule 12(b)(6) was proper because Reich failed to allege that the defendants engaged in a “pattern of racketeering activity”: of his two theories, one fails because the predicate acts posed no continuing threat of racketeering; the other fails because the predicate acts he chose were insufficiently related to each other. We also affirm dismissal of the state law claims because Reich could not establish personal jurisdiction over either defendant.

I

We take all the allegations in the complaint as true, as we must on a motion to dismiss.

Plaintiffs allege that Derwiek Associates, a Venezuelan energy company, has stolen billions of dollars from the Venezuelan government. It allegedly bribes Venezuelan officials in order to secure energy contracts at inflated rates without public bidding, then subcontracts out the actual work while keeping a substantial profit. Derwiek is run by Leopoldo Alejandro Be-tancourt Lopez (“Betancourt”), Pedro Jose Trebbau Lopez (“Trebbau”), and Francisco D’Agostino Casado (“D’Agostino”), the three original defendants in this case.

Plaintiff Otto Reich was the U.S. ambassador to Venezuela in the 1980s. He now runs a consulting agency focused on government relations and anti-corruption; it is the co-plaintiff with Reich in this suit (we refer to them collectively as “Reich”).

In 2012, the Derwiek principals filed two state court defamation lawsuits against a Venezuelan bank that they believed was threatening to expose Derwiek’s criminal activities. The Venezuelan bank then hired Reich to help assist its defense of the defamation suits. Concerned about the assistance Reich might provide the bank, the Derwiek principals undertook to break up the relationship. An agent of Derwiek called one of the bank’s largest shareholders to tell him falsely that Reich was secretly working for Derwiek, thus inducing the bank to terminate its relationship with Reich. Around the same time, one of the Derwick principals called another of Reich’s clients, Eligió Cedeño, to deliver the same falsehood: that Reich was working for Derwick. Cedeño also terminated his relationship with Reich. Reich’s firing by Cedeño and the Venezuelan bank cost him tens of thousands of dollars monthly in consulting fees.

Reich filed suit against Betancourt, Trebbau, and D’Agostino in July 2013 bringing RICO and various state law claims. (D’Agostino has since been dismissed from the case pursuant to a stipulation of dismissal.) In a series of rulings, the district court dismissed the RICO claims for failure to state a claim and the state law claims for lack of personal jurisdiction.

II

We review de novo the dismissal of a complaint for failure to state a claim upon which relief can be granted. Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374, 380 (2d Cir. 2001).

RICO imposes liability on individuals working for an “enterprise” that commits certain predicate crimes that amount to a “pattern of racketeering activity.” 18 U.S.C. §§ 1962, 1964. Reich has alleged an “enterprise”: Derwick Associates. And he has alleged predicate crimes covered by RICO: wire fraud arising from the false phone calls, and violations of the Travel Act arising from the bribery of Venezuelan officials. 18 U.S.C. § 1961(1). This case turns on whether those predicate acts amount to a “pattern of racketeering activity.”

The Supreme Court has interpreted that phrase to require both that the RICO predicates pose a threat of continuous criminal activity and that they be related to each other. H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989). Since RICO only requires a combination of two or more predicate acts, 18 U.S.C. § 1961(5), Reich can mix-and-match predicate acts in an attempt to identify a pattern of racketeering activity that has both “continuity” and “relatedness.” He argues that two combinations of predicate acts each meet the pattern requirements. His first theory is that the requisite pattern is formed by the two acts of wire fraud alone: the false phone call to the bank shareholder and the false phone call to Cedeño. His second theory is that the requisite pattern is formed by the acts of wire fraud combined with the Travel Act violations. Both putative patterns include a wire fraud claim, which matters because “RICO claims premised on mail or wire fraud must be particularly scrutinized because of the relative ease with which a plaintiff may mold a RICO pattern from allegations that, upon closer scrutiny, do not support it.” Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 489 (2d Cir. 2014).

Reich’s first theory fails because the predicate acts lack continuity. His second theory fails because the predicate acts lack relatedness.

A. RICO’s Continuity Requirement

RICO targets conduct that “amount[s] to or pose[s] a threat of continued criminal activity.” H.J., 492 U.S. at 239, 109 S.Ct. 2893. Such continuity can be closed-ended or open-ended. Id.

Criminal activity that occurred over a long period of time in the past has closed-ended continuity, regardless of whether it may extend into the future. Id. at 242, 109 S.Ct. 2893. As such, closed-ended continuity is “primarily a temporal concept,” Spool v. World Child Int’l Adoption Agency, 520 F.3d 178, 184 (2d Cir. 2008), and it requires that the predicate crimes extend “over a substantial period of time.” H.J., 492 U.S. at 242, 109 S.Ct. 2893. Predicate acts separated by only a few months will not do, id.; this Circuit generally requires that the crimes extend over at least two years. Spool, 520 F.3d at 184.

On the other hand, criminal activity “that by its nature'projects into the future with a threat of repetition” possesses open-ended continuity, and that can be established in several ways. H.J., 492 U.S. at 241, 109 S.Ct. 2893. Some crimes may by their very nature include a future threat, such as in a protection racket. Id at 242, 109 S.Ct. 2893. When the business of an enterprise is primarily unlawful, the continuity of the enterprise itself projects criminal activity into the future. Spool, 520 F.3d at 185. And similarly, criminal activity is continuous when “the predicate acts were the regular way of operating that business,” even if the business itself is primarily lawful. Cofacredit, S.A. v. Windsor Plumbing Supply Co., 187 F.3d 229, 243 (2d Cir. 1999).

Reich’s first theory—involving wire fraud alone—is not continuous in either sense. The two phone calls are separated by at most a few months, too short a time for elosed-ended continuity. H.J., 492 U.S. at 242, 109 S.Ct. 2893 (noting that a period of a few months is insufficient for elosed-ended continuity). Open-ended continuity is likewise unsupportable. The phone calls included no future threat of repetition, and false phone calls were not Derwick’s “regular way of operating [its] business.” Cofacredit, 187 F.3d at 243. Nor can Reich allege that Derwick’s business was primarily unlawful. Even if Derwick pays bribes, it is primarily in the energy business; it is not a narcotics ring or an organized crime family. See United States v. Aulicino, 44 F.3d 1102, 1111 (2d Cir. 1995) (noting that open-ended continuity does not exist when predicate acts are “in furtherance of endeavors that are not inherently unlawful, such as frauds in the sale of property”); United States v. Pizzonia, 577 F.3d 455, 465 (2d Cir. 2009) (holding, in the context of continuity, that “long-term criminal associations plainly include those traditionally grouped under the phrase ‘organized crime’” (internal quotation marks omitted)).

Reich’s second theory—that the predicate acts are both the wire fraud and the Travel Act violations—sufficiently pleads elosed-ended continuity because it alleges conduct from 2009 until at least the end of December 2012. We therefore go on to consider whether it meets RICO’s “relatedness” requirement.

B. RICO’s Relatedness Requirement

Because RICO does not apply to “isolated or sporadic criminal acts,” it has a relatedness requirement in addition to the continuity requirement. United States v. Indelicato, 865 F.2d 1370, 1383 (2d Cir. 1989) (in banc) (internal quotation marks omitted). Predicate crimes must be related both to each other (termed “horizontal relatedness”) and to the enterprise as a whole (“vertical relatedness”). United States v. Cain, 671 F.3d 271, 284 (2d Cir. 2012).

Vertical relatedness, which entails the simpler analysis, requires only:

that the defendant was enabled to commit the offense solely because of his position in the enterprise or his involvement in or control over the enterprise’s affairs, or because the offense related to the activities of the enterprise.

United States v. Burden, 600 F.3d 204, 216 (2d Cir. 2010). Reich’s complaint sufficiently alleges vertical relatedness because both crimes relate to Derwick’s activities: the Travel Act violations were done for Derwick’s profit, and the wire fraud was done to protect it from litigation.

The Supreme Court has explained that predicate acts are horizontally related when they:

have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.

H.J., 492 U.S. at 240, 109 S.Ct. 2893. In certain cases, we have relaxed the requirement of horizontal relatedness and held that proof of vertical relatedness alone can also serve as proof of a horizontal relation. See, e.g., United States v. Daidone, 471 F.3d 371, 375 (2d Cir. 2006) (per curiam). Reich urges us to do the same here. We decline the invitation.

When dealing with “an enterprise whose business is racketeering activity, such as an organized crime family,” horizontal relatedness can be established simply by linking each act to the enterprise. United States v. Coppola, 671 F.3d 220, 243 (2d Cir. 2012) (internal punctuation and citations omitted). When dealing with an enterprise that is primarily a legitimate business, however, courts must determine whether there is a relationship between the predicate crimes themselves; and that requires a look at, inter alia, whether the crimes share “purposes, results, participants, victims, or methods of commission.” H.J., 492 U.S. at 240, 109 S.Ct. 2893; see also Indelicato, 865 F.2d at 1382 (looking to “temporal proximity, or common goals, or similarity of methods, or repetitions”).

We have explicitly drawn that same distinction—between enterprises that are and are not primarily legitimate—in the context of the “continuity” requirement for a RICO pattern. See Burden, 600 F.3d at 219 (“ ‘Where the enterprise is an entity whose business is racketeering activity, an act performed in furtherance of that business automatically carries with it the threat of continued racketeering activity.’ ” (quoting Indelicato, 865 F.2d at 1383-84)); see also United States v. Minicone, 960 F.2d 1099, 1108 (2d Cir. 1992) (“The question of whether acts form a pattern rarely is a problem with a criminal enterprise, as distinct from a lawful enterprise that commits occasional criminal acts.” (internal quotation marks omitted)). That distinction ensures that RICO does not ensnare “the perpetrators of ‘isolated’ or ‘sporadic’ criminal acts.” United States v. Vernace, 811 F.3d 609, 615 (2d Cir. 2016). If every crime done by any employee of a large, ramified corporation was deemed horizontally related, it would be child’s play to plead RICO actions against those companies notwithstanding that the crimes themselves might be “isolated” and otherwise unrelated. Id. So where, as here, the enterprise in question is not primarily in the “business [of] racketeering activity,” predicate acts must be related to each other in kind for a RICO case to proceed. Coppola, 671 F.3d at 243.

That relatedness analysis begins with the factors identified in H.J.: similar “purposes, results, participants, victims, [and] methods of commission.” 492 U.S. at 240, 109 S.Ct. 2893. But predicate acts need not be linked in every way. Daidone, 471 F.3d at 375. Using the H.J. list as a guidepost, we consider whether the Derwiek principals’ alleged acts of wire fraud are “related” to the alleged Travel Act violations.

The participants in both crimes were the Derwiek principals, a circumstance that weighs in favor of relatedness. However, there is little else. As to the Travel Act violations, they were accomplished by the payment of bribes; the result was that Derwiek secured energy contracts; and the victims were competing energy contractors and the government of Venezuela; whereas the wire fraud was accomplished by false phone calls, the result was that two clients terminated Reich, and the victims were Reich himself and his firm. The methods of commission, victims, and results of the predicate acts are all dissimilar and weigh against relatedness.

The last factor we consider is purpose, and the parties dispute which way it cuts. In the ordinary sense of “purpose,” the Travel Act violations were intended to secure energy contracts and the wire fraud was intended to get Reich fired. In a very broad sense, however, the “purpose” of both crimes was to help Derwiek. But to engage purpose at that level of generality would make the factor meaningless: virtually all crimes committed on behalf of an enterprise are done to help it. See Schlaifer Nance & Co. v. Estate of Warhol, 119 F.3d 91, 97 (2d Cir. 1997) (rejecting the argument that various predicate acts' were related because they shared the common goal of maximizing the wealth of the enterprise). We therefore conclude that the distinct purposes of the alleged crimes weigh against relatedness. Cf. Daidone, 471 F.3d at 376 (holding in the context of a primarily illegitimate enterprise that “increasing and protecting the financial position of the enterprise” was a “common goal[ ]”).

The only horizontal link between the predicate crimes is the overlap of participants. In this case, where the enterprise in question is not primarily in the business of racketeering, that is insufficient. See Schlaifer, 119 F.3d at 97 (holding that predicate acts were unrelated despite an overlap of participants). Reich’s RICO theory based on the combination of the wire fraud and the Travel Act violations therefore fails.

Because 'his alternative theory'—based on the wire fraud alone—lacked continuity, dismissal of his substantive RICO claim was appropriate. His RICO conspiracy claim fails for the same reasons. First Capital Asset Mgmt., Inc, v. Satinwood, Inc., 385 F.3d 159, 182 (2d Cir. 2004).

Ill

Reich’s various state law causes of action against Lopez and Trebbau were dismissed for lack of personal jurisdiction. Reich argues for jurisdiction over the defendants on several bases: general jurisdiction, specific jurisdiction, and jurisdiction by personal service. As the district court determined, each premise is unavailable.

A. General Jurisdiction

For a court to exercise general jurisdiction over a defendant, 1) state law must authorize general jurisdiction; and 2) jurisdiction “must comport with constitutional due process principles.” Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59-60 (2d Cir. 2012). We assume for the purpose of this appeal that state law would authorize jurisdiction, see N.Y. C.P.L.R. 301, but we conclude that the exercise of jurisdiction over the defendants would be improper because it would violate due process.

General jurisdiction over an individual comports with due process in the forum where he is “at home,” meaning the place of “domicile.” Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 225 (2d Cir. 2014) (per curiam). Owning property in a forum does not alone establish domicile. “One may have more than one residence in different parts of this country or the world, but a person may have only one domicile.” United States v. Venturella, 391 F.3d 120, 125 (2d Cir. 2004). In an “exceptional case,” an individual’s contacts with a forum might be so extensive as to support general jurisdiction notwithstanding domicile elsewhere, Daimler AG v. Bauman, — U.S.-, 134 S.Ct. 746, 761 n.19, 187 L.Ed.2d 624 (2014), but the Second Circuit has yet to find such a ease.

The district court found, after jurisdictional discovery, that Lopez and Betanc-ourt are not domiciled in New York. Reich does not contest that finding. Instead, he argues that this case is the exceptional one in which we can exercise general jurisdiction over the defendants even though they are domiciled elsewhere.

This is not a case in which we need to decide the question of whether it would ever be possible to exercise general jurisdiction over an individual in a forum other than the one in which he is domiciled, nor do we need to define the exact contours of what could make such an “exceptional case.” See Daimler AG, 134 S.Ct. at 761 n.19 (declining to reach the question or lay out any such standards in the case of a corporate defendant). Betancourt, a Venezuelan citizen, has relationships with New York banks and law firms, and owns an apartment in New York; but he spent fewer than 5% of nights in New York during a 31-month period the district court examined. Trebbau, also a Venezuelan citizen, does not own or rent any property in New York. In the same 31-month period, he spent fewer than 3% of nights in New York. The defendants’ contacts with New York do not approach the point at which general jurisdiction over them would comport with due process.

B. Specific Jurisdiction

Reich argues that, even in the absence of general jurisdiction, New York’s long-arm statute confers specific jurisdiction over the defendants. Two sections of New York’s long-arm statute—the “tortious act” and “transaction of business” provisions—are relevant to his claim.

New York allows for long-arm jurisdiction over defendants who “commit[] a tortious act within the staté, except as to a cause of action for defamation.” N.Y. C.P.L.R. 302(a)(2). Reich alleges that some of the false phone calls forming the basis of his wire fraud claim took place in New York, and he argued to the district court that was a “tortious act within the state” which established personal jurisdiction. As the district court concluded, however, Reich’s various state law claims sound in defamation, and were thus subject to the defamation exception of Section 302(a)(2).

On appeal, Reich shifts the emphasis of his argument to N.Y. C.P.L.R. Section 302(a)(1), which authorizes jurisdiction over defendants if: 1) the defendants transact business in New York; and 2) the cause of action arises from that transaction of business. Licci, 673 F.3d at 60. Reich argues that the defendants “transacted business” in New York by making the false phone calls, but he cannot use Section 302(a)(1) to do an end-run around the defamation exception of Section 302(a)(2). “In defamation cases ... the single act of uttering a defamation, no matter how loudly, is not a transaction of business that may provide the foundation for personal jurisdiction.” Best Van Lines, Inc. v. Walker, 490 F.3d 239, 248 (2d Cir. 2007) (internal punctuation omitted). Reich also alleges that the defendants retained legal counsel in New York. While that is certainly a transaction of business, it is insufficient to confer specific jurisdiction because Reich’s claims do not arise from the defendants’ retention of counsel.

C. “Tag” Jurisdiction

Finally, Reich argues that Betanc-ourt (but not Lopez) was personally served while within the state and is thus subject to “tag” jurisdiction. Reich did not present this argument to the district court, however, and the parties dispute whether Betancourt was in fact personally served. Generally speaking, failure to raise in the district court an issue that requires fact-finding effects waiver of that issue on appeal. Virgilio v. City of N.Y., 407 F.3d 105, 116 (2d Cir. 2005). We decline to consider Reich’s waived argument for “tag” jurisdiction over Betancourt, and there is thus no basis for us to exercise personal jurisdiction over any of the defendants on Reich’s state law claims.

CONCLUSION

For the foregoing reasons, the order of the district court is AFFIRMED.

      . Because RICO has its own jurisdictional provisions which may apply here, see 18 U.S.C. § 1965, we reach both the sufficiency of the RICO claim and the question of personal jurisdiction on the state law claims.

      . Because we affirm dismissal of the RICO claim on the basis that Reich failed to plead a “pattern of racketeering activity,” we do not reach the defendants' alternative argument that Reich failed to sufficiently plead wire fraud.

      . The multiple Travel Act violations alone do not suffice because RICO requires that the plaintiff suffer an injury from at least one of the predicate acts, European Cmty. v. RJR Nabisco, Inc., 764 F.3d 149, 151 (2d Cir. 2014) (per curiam), and Reich suffered no injury from the Travel Act violations.

      . Such a distinction between primarily legitimate and primarily illegitimate enterprises does not run afoul of the Supreme Court’s instruction that we treat civil and criminal cases the same. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 489, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985).


author: KATZMANN, Chief Judge:

text:
    UNITED STATES of America, Appellee, v. Frances M. LIBOUS, Executrix of the Estate of Thomas W. Libous, Defendant-Appellant, Thomas W. Libous, Defendant.

    Docket No. 15-3979
    August Term, 2016
    United States Court of Appeals, Second Circuit.
    Submitted: November 22, 2016
    Decided: May 30, 2017

      Benjamin Mee, Assistant United States Attorney, for Joon H. Kim, Acting United States Attorney for the Southern District of New York, New York, NY.
    Paul DerOhannesian II, DerOhannesian & DerOhannesian, Albany, NY, for Defendant-Appellant.
    Before: KATZMANN, Chief Judge, WINTER, Circuit Judge, and STEIN, District Judge.

       The official caption has been amended to conform to the caption above.

       Judge Sidney H. Stein, of the United States District Court for the Southern District of New York, sitting by designation.

   KATZMANN, Chief Judge:

Under the well-established doctrine of abatement ab initio, when a convicted defendant dies pending an appeal as of right, his conviction abates, the underlying indictment is dismissed, and his estate is relieved of any obligation to pay a criminal fine imposed at sentence. In this case, we are asked to decide whether, under the doctrine of abatement, a defendant’s estate is also entitled to the return of a criminal fine that the defendant paid before his death. We hold that it is.

Background

On July 22, 2015, a federal jury convicted former New York State Senator Thomas W. Libous of making false statements to the FBI in violation of 18 U.S.C. § 1001. At sentencing, the district court (Briccetti, J.) imposed a two-year term of probation on Libous—who doctors determined had less than a year to live—along with a $50,000 fine and the mandatory $100 special assessment. The district court denied Libous’s request to stay the sentence pending appeal, and Libous paid the fine and special assessment. In May 2016, after filing a notice of appeal but before filing an appellate brief, Libous succumbed to prostate cancer. Frances M. Libous, acting in her capacity as the executrix of Libous’s estate, now moves to withdraw the appeal. Invoking the common law doctrine of abatement ab initio, she further asks that we vacate the judgment of conviction, remand to the district court for the dismissal of the indictment, and order the return of the $50,000 fine and $100 special assessment.

Discussion

In the federal courts, “when a convicted defendant dies while his direct appeal as of right is pending, his death abates not only the appeal but also all proceedings had in the prosecution from its inception.” United States v. Wright, 160 F.3d 905, 908 (2d Cir. 1998) (internal quotation marks omitted); United States v. Christopher, 273 F.3d 294, 297 (3d Cir. 2001) (“[T]he rule followed almost unanimously by the [federal] Courts of Appeals is that a conviction abates on the death of the accused before his appeal has been decided.”). To effectuate this common law rule, “we normally vacate the judgment and remand to the district court with instructions to dismiss the indictment.” Krantz v. United States, 224 F.3d 125, 126 (2d Cir. 2000) (per curiam) (internal quotation mark omitted). In other words, the criminal proceedings abate ab initio: “[T]he appeal does not just disappear, and the case is not merely dismissed. Instead, everything associated with the case is extinguished, leaving the defendant as if he had never been indicted or convicted.” United States v. Estate of Parsons, 367 F.3d 409, 413 (5th Cir. 2004) (en banc) (internal quotation marks omitted); see also United States v. Logal, 106 F.3d 1547, 1552 (11th Cir. 1997) (“Under the doctrine of abatement ab initio ... the defendant stands as if he never had been indicted or convicted.” (internal quotation marks omitted)).

The somewhat obscure doctrine of abatement is principally animated by two considerations. “First, the interests of justice ordinarily require that a defendant not stand convicted without resolution of the merits of an appeal.” Wright, 160 F.3d at 908 (internal quotation marks and alterations omitted). “Second, to the extent that the judgment of conviction orders incarceration or other sanctions that are designed to punish the defendant, that purpose can no longer be served.” Id. The first rationale—what we will call the “finality rationale”—is “grounded in procedural due process concerns” and more readily supports the far-reaching consequences of abatement ab initio. United States v. DeMichael, 461 F.3d 414, 416 (3d Cir. 2006); see also Estate of Parsons, 367 F.3d at 415 (recognizing the finality rationale as “the primary reason behind abatement” because it “provides a better explanation why all prior proceedings disappear”). In particular, the finality rationale reflects the notion “that the state should not label one as guilty until he has exhausted his opportunity to appeal.” United States v. Volpen-desto, 755 F.3d 448, 453 (7th Cir. 2014) (internal quotation marks omitted); see also Logal, 106 F.3d at 1552 (“[A] fundamental principle of our jurisprudence from which the abatement principle is derived is that a criminal conviction is not final until resolution of the defendant’s appeal as a matter of right.”); United States v. Pauline, 625 F.2d 684, 685 (5th Cir. 1980) (“[W]hen ... death has deprived the accused of his right to our decision, the interests of justice ordinarily require that he not stand convicted without resolution of the merits of his appeal, which is an integral part of our system for finally adjudicating his guilt or innocence.” (internal quotation marks and alterations omitted)).

The government consents to the vacatur of Libous’s conviction, which it recognizes our precedents demand. And the government does not oppose the dismissal of the indictment or dispute that an unpaid fine would abate along with the conviction. See, e.g., Christopher, 273 F.3d at 297 (“Criminal forfeitures and fines are subject to abatement.”). Nevertheless, the government opposes the estate’s request for the return of the $50,000 fine imposed on Libous at sentencing, arguing that the policies underlying abatement do not support the abatement of a paid fine.

We disagree. Since Libous “stands as if he never had been indicted or convicted,” Logal, 106 F.3d at 1552, “at least in the eyes of the criminal court ... [he] is no longer a wrongdoer,” Estate of Parsons, 367 F.3d at 416. There is no legal basis on which the state can retain a fine exacted from Libous as punishment for an offense he is now presumed not to have committed. Cf. Volpendesto, 755 F.3d at 454 (abating criminal restitution order where defendant died pending appeal because “[wjithout a final criminal conviction, there can be no order of restitution under 18 U.S.C. § 3556”). Once Libous’s conviction is vacated, the state is as much entitled to retain the fine as if Libous had been acquitted. And in our system of criminal justice, the state is not permitted to charge the accused for the privilege of having been prosecuted.

Our conclusion is reinforced by the Supreme Court’s recent decision in Nelson v. Colorado, — U.S. -, 137 S.Ct. 1249, 197 L.Ed.2d 611 (2017). In Nelson, the Supreme Court held that “[w]hen a criminal conviction is invalidated by a reviewing court and no retrial will occur,” the state is required under the Fourteenth Amendment’s due process guarantee “to refund fees, court costs, and restitution exacted from the defendant upon, and as a consequence of, the conviction.” Id. at 1252. Once a defendant’s conviction is “erased, the presumption of [his] innocence [is] restored,” id. at 1255, and the state “has no interest in withholding from [a defendant] money to which the [s]tate currently has zero claim of right,” id. at 1257. At bottom, the state “may not presume a person, adjudged guilty of no crime, nonetheless guilty enough for monetary exactions.” Id. at 1256.

To be sure, Nelson was contemplating convictions that were reversed or vacated due to some identified infirmity in the underlying proceedings, rather than convictions that were abated as a result of the appellant’s death. One could argue that Libous’s conviction was not “invalidated” within the meaning of Nelson. Nevertheless, at a minimum, the logic of Nelson strongly supports abating the fine.

The government argues that the fine should not abate because the punitive purpose of the fine was served when Libous paid it before he died. As a result, the government submits, the second rationale for abatement—that there is no point in punishing the deceased—is not applicable. That’s true enough. But this observation does nothing to explain why the first rationale for abatement—the finality rationale—does not apply with equal force in the case of paid fines as it does in the case of unpaid fines. Taking the government’s position to its logical conclusion, why abate the conviction of the deceased defendant at all? The conviction, after all, served its purpose, acting to condemn the defendant during his lifetime. That is not the law, however, because abatement ab initio is premised at least as much, if not more, on the fairness of allowing a conviction and penalties to stand when a defendant dies pending an appeal as of right as it is on the futility of punishing the deceased. See Estate of Parsons, 367 F.3d at 413-15 (adopting finality rationale as “primary justification” for abatement). Moreover, if we were to adopt the government’s approach, we would be privileging defendants who had not paid their criminal fines at the time of death over those who had.

The government suggests that abating the fine would be tantamount to determining that Libous’s punishment was illegitimate. Not so. Abating the fine does not reflect a determination that Libous was wrongfully punished, just as abating his conviction does not reflect a determination that the conviction was wrongfully obtained. See id. at 416 (“Despite what may have been proven at trial, the trial is deemed not to have taken place.”). Instead, it reflects a recognition that there is no longer a valid conviction to support the government’s retention of the fine. Cf. Nelson, 137 S.Ct. at 1252, 1257.

Finally, the government argues that a paid fine is analogous to time served and is therefore not refundable, relying on a Seventh Circuit decision that adopted that reasoning. See United States v. Zizzo, 120 F.3d 1338, 1346-47 (7th Cir. 1997) (“The fine and assessments served to deprive [the defendant] ... of some of his resources during his lifetime. They are analogous to time served and are not refundable.”). We find the analogy inapt. That time served cannot be abated is a principle of nature, not of law. A paid fine, by contrast, can easily be returned to the defendant’s estate. See United States v. Sheehan, 874 F.Supp. 31, 34 (D. Mass. 1994) (ordering the government to return fine to the estate of a defendant who died pending appeal because while. “[t]ime served pursuant to a judgment later voided cannot be recovered!,] ... this unhappy circumstance does not mean that the defendant (or his estate) should also be deprived of fine monies taken by a judgment determined to be without any legal force”); cf. Nelson, 137 S.Ct. at 1257 (rejecting state’s argument that because defendants are not automatically entitled to compensation for time spent wrongfully incarcerated, the state need not return sums exacted pursuant to a subsequently invalidated conviction).

The government also points to United States v. Schumann, 861 F.2d 1234 (11th Cir. 1988), which held that a fine paid by the defendant before his death did not abate because “the penalty operated as a punishment to [the defendant] rather than to his estate.” Id. at 1236. Critically, neither Zizzo nor Schumann acknowledged the finality rationale for abatement—and, for the reasons explained above, we find that their holdings cannot be reconciled with that rationale. See Sheehan, 874 F.Supp. at 33-34 (“By emphasizing the various penal dimensions to sentences partially executed before they are abatec], the cases [indicating that paid fines do not abate] lose sight of the fundamental character of the issue: the ultimate judicial determination to render null and void the underlying judgment.”). They were also decided before the Supreme Court’s decision in Nelson v. Colorado, as were cases in which courts noted in passing that paid fines are not subject to abatement. See, e.g., United States v. Rich, 603 F.3d 722, 724 n.3 (9th Cir. 2010) (“[F]ines already paid need not be refunded because they are the equivalent of time-served.”); Estate of Parsons, 367 F.3d at 413 & n.6 (citing Zizzo and Schumann).

We recognize that the consequences of abatement can be unsettling. In certain cases, they can surely be devastating to those affected by the defendant’s conduct. The inclination to allow some component of the deceased defendant’s punishment to stand is therefore an understandable one. But “the sources of such satisfactions are not found in a reasoned evaluation of the relevant juridical concepts.” Sheehan, 874 F.Supp. at 35; cf. Volpendesto, 755 F.3d at 454-55 (Sykes, J., concurring) (expressing skepticism of abatement ab initio as a policy matter while agreeing that, as long as the doctrine remains the law, restitution orders imposed pursuant to abated convictions must also abate). If Libous’s conviction is to be vacated and his indictment dismissed, as our precedents require, then his estate is entitled to the return of the fine.

Abatement ab initio is a common law doctrine: If Congress deems it an undesirable one, it can act accordingly.

Conclusion

For the foregoing reasons, the appellant’s motion is GRANTED, Libous’s judgment of conviction is VACATED, and the case is REMANDED for the dismissal of the indictment and the return of the fine and special assessment imposed on Libous pursuant to his now-vacated conviction.

      . Pursuant to Federal Rule of Appellate Procedure 43(a)(1), we grant the request to substitute Frances M. Libous for Thomas W. Libous as the party to this appeal.

      . We express no view on how abatement operates, if at all, in the event the defendant commits suicide pending an appeal as of right.

      . On the other hand, the Nelson Court made a point of not parsing the reasons that a conviction was reversed or vacated. See Nelson, 137 S.Ct. at 1256 n.10 (noting that “reversal is reversal, regardless of the reason, and an invalid conviction is no conviction at all” (internal quotation marks omitted)).


author: PER CURIAM:

text:
    Trathony GRIFFIN and Michael Godwin, Plaintiffs-Appellants, v. SIRVA INC. and Allied Van Lines, Inc., Defendants-Appellees.
    Docket No. 15-1307
    August Term, 2015
    United States Court of Appeals, Second Circuit.
    Argued: January 8, 2016
    Decided: May 31, 2017
    STUART LICHTEN, Lichten & Bright, P.C., New York, NY, for Plaintiffs-Appellants.
    GEORGE W. WRIGHT, George W. Wright & Associates, LLC, New York, NY, for Defendants-Appellees.
    Before: POOLER, HALL, and CARNEY, Circuit Judges.
   PER CURIAM:

This appeal presents the question of who may be held liable under Section 296(15) of the New York State Human Rights Law (“NYSHRL”), which prohibits the denial of employment on the basis of a criminal conviction, and who may be held liable under Section 296(6) of the NYSHRL, which imposes liability for the aiding and abetting of a violation of Section 296(15). See N.Y. Exec. Law § 296(6), (15).

Plaintiffs-appellants Trathony Griffin and Michael Godwin (collectively, “Plaintiffs”) are two former employees of Astro Moving and Storage Co. (“Astro”), which provides certain moving and storage services under contract to defendant-appellee Allied Van Lines, Inc. (“Allied”). Griffin and Godwin’s direct employer, Astro, which is not a party to this appeal, terminated Griffin and Godwin after discovering their past criminal convictions through a background check. Because Astro had signed a contract under which Allied prohibited any individuals convicted of certain crimes from working on Allied jobs, Griffin and Godwin allege that Allied and defendant-appellee Sirva, Inc., as Allied’s parent company, can be held liable under the NYSHRL, N.Y. Exec. Law § 290 et seq., for employment discrimination on the basis of their criminal convictions.

The United States District Court for the Eastern District of New York (Brodie, J.) denied Plaintiffs’ motion for partial summary judgment and granted Sirva and Allied’s motion for summary judgment. The district court determined that Section 296(15) applied only to the aggrieved party’s “employer.” See Griffin v. Sirva, Inc., No. 11-CV-1844, 2014 WL 2434196, at *11 (E.D.N.Y. May 29, 2014). The district court examined a variety of cases discussing how an entity is determined to be an individual’s “employer.” See id. at *11-*13. Because Griffin and Godwin were not employed by either Allied or Sirva, the district court determined that Allied and Sirva could not be held liable under the NYSHRL for Astro’s termination of Griffin and Godwin. Id. at *14.

On August 30, 2016, this Court entered an order certifying three questions to the New York Court of Appeals:

First, does Section 296(15) limit liability for unlawful denial of employment only to the aggrieved party’s “employer”? Second, if Section 296(15) is limited in that way, how should courts determine whether an entity is the aggrieved party’s “employer” for the purposes of a claim under Section 296(15)? Third, does the “aiding and abetting” liability provision of the NYSHRL, Section 296(6), apply to Section 296(15) such that a non-employer may be liable under Section 296(15) as an aider and abettor of an employer’s unlawful denial of employment?

Griffin v. Sirva Inc., 835 F.3d 283, 285 (2d Cir. 2016).

On May 4, 2017, the New York Court of Appeals issued its decision in response to this Court’s certified questions. Griffin v. Sirva, Inc., 29 N.Y.3d 174, 54 N.Y.S.3d 360, 76 N.E.3d 1063, 2017 WL 1712423 (2017). The New York Court of Appeals answered the first certified question in the affirmative, as the district court had, holding that liability under Section 296(15) is limited to an aggrieved party’s employer. Id., 29 N.Y.3d at 181, 54 N.Y.S.3d at 362, 76 N.E.3d 1063; see Griffin, 2014 WL 2434196, at *10-*11.

With respect to the second certified question, the New York Court of Appeals reformulated the question posed as: “if Section 296(15) is limited to an employer, how should courts determine whether an entity is the aggrieved party’s ‘employer’ for the purposes of a claim under Section 296(15)?” Griffin, 29 N.Y.3d at 185, 54 N.Y.S.3d at 365, 76 N.E.3d 1063, (brackets omitted). Based on New York case law, the New York Court of Appeals identified four factors to use in determining whether an entity is an aggrieved party’s employer: “(1) the selection and engagement of the servant; (2) the payment of salary or wages; (3) the power of dismissal; and (4) the power of control of the servant’s conduct.” Id. at 12-13, 29 N.Y.3d at 186, 54 N.Y.S.3d at 366, 76 N.E.3d 1063 (citing State Div. of Human Rights v. GTE Corp., 109 A.D.2d 1082, 1083, 487 N.Y.S.2d 234 (1985)). The New York Court of Appeals concluded that “common-law principles, as discussed in GTE, determine who may be liable as an employer under [S]ection 296(15) of the [New York State] Human Rights Law, with greatest emphasis placed on the alleged employer’s power to order and control the employee in his or her performance of work.” Griffin, 29 N.Y.3d at 186, 54 N.Y.S.3d at 366, 76 N.E.3d 1063, (internal quotation marks omitted).

With respect to the third certified question, the New York Court of Appeals reformulated the question posed as follows: “whether [Sjection 296(6) extends liability to an out-of-state nonemployer who aids or abets employment discrimination against individuals with a prior criminal conviction.” Id. at 14, 29 N.Y.3d at 187, 54 N.Y.S.3d at 366, 76 N.E.3d 1063. The New York Court of Appeals answered this question in the affirmative. Id. The New York Court of Appeals decided that the district court had read Section 296(6) too narrowly, and explained that “Section 296(6) extends liability to persons and entities beyond joint employers,” that “Section 296(6) ... applies to out-of-state defendants,” and that the “provision should be construed broadly.” Id. at 14, 15, 29 N.Y.3d. at 187, 188, 54 N.Y.S.3d at 367, 76 N.E.3d 1063.

Accordingly, we VACATE the order of the district court to the extent that it conflicts with the decision of the New York Court of Appeals and REMAND the case for further proceedings.