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Small claims dispute with Kodak now a federal case

Rochester Business Journal
May 23, 2014

Mildred Boles, a former Eastman Kodak Co. worker who put in more than 20 years with the former camera giant, never claimed a $1,912 benefit that she became eligible to collect from the company in 1998.

Boles thinks the company still owes her the money.

Kodak disagrees.

In an attempt to recover the arguably modest sum, Boles took the dispute to small claims court, a venue specifically designed to yield quick decisions with a minimum of fuss in disputes over small amounts of cash.

She did not want to make a federal case out of it.

Kodak did.

A former Rochesterian, Boles, 62, started working for Kodak 30 years ago. She worked first as an assembler at Kodak’s Elmgrove plant and later in customer service in Kodak’s office imaging unit.

After Kodak sold the unit to Danka Business Systems PLC in 1997, Boles kept working there. She stayed until 2009.

Now relocated to Largo, Fla., Boles works at a furniture restoration company. Last year she applied for Social Security, choosing to take an early, reduced payment.

It was through the Social Security Administration that she learned about what she thought was a modest windfall, the $1,912 benefit. A notice from SSA detailing her eligibility to collect the Kodak benefit arrived in November.

She might have known about it once, Boles said, but had long ago forgotten the $1,912.

“There was so much going on,” she explained. “I got my 401(k), and I spent that to take care of my mother.”

In December, Boles asked Kodak to please send her the $1,912.

“They just kept shuffling me from one place to another,” she said. “People were speaking to me with words I did not understand. They told me it was because I moved my stock but I told them I never moved anything. They just said I must have done it.”

To file her small claim, Boles made a 2,600-mile round trip to Rochester from Largo in the Tampa-St. Petersburg area.

A sister who still lives in Rochester put her up, so the trip doubled as a family visit, Boles said. She planned to return on June 17 for the court date she was assigned when she filed the notice of claim in Rochester City Court.

When a letter from a Rochester law firm arrived, informing her that the case had been removed to federal court, she was not sure what to make of it.

A veteran of several multimillion-dollar patent battles and only a few months past a Chapter 11 bankruptcy, Kodak is no stranger to federal courts.

To Boles, they are virtually unknown territory.

“What do I do now?” she wondered. “When is my court date supposed to be?”

The dispute, which falls $73,088 short of the minimum $75,000 that civil cases usually must exceed for federal courts to hear them, is hardly the usual federal court fare.

In court papers, Kodak’s lawyer, Chad Flansburg, a litigator in the Rochester office of Phillips Lytle LLP, looked to grounds other than the amount in dispute to justify the case’s removal.

“The jurisdictional statute invoked by Kodak, 28 USC Section 1331, authorizes federal district courts to hear jurisdictional disputes arising under the Constitution, laws or treaties of the United States, and USC Section 1441 authorizes a state court defendant to remove a case when a federal court would have had jurisdiction if the case had been filed there originally,” Flansburg wrote in the May 13 removal notice.

If another reason to put the case in a federal court is needed, he added, “a claim to recover benefits or enforce the right to benefits may be maintained under the Employee Retirement Security Act (“ERISA”) Section 502(a)(1)(B), 29 USC.”

In kicking the case to the federal court, Kodak might well pay more in legal fees and court costs than it would to pay Boles’ claim. To hire an outside law firm, it will almost certainly spend more than it would have if it sent an in-house lawyer to mount a defense in small claims court.

In a 2012 case, a federal judge in Buffalo ordered the loser to pay the winner’s legal fees. The bill came to $107,322 to cover 558 hours put in by three partners and six associates for an average hourly rate of $192.33.

The firm that racked up that bill was Phillips Lytle, the same firm Kodak has hired to defend it against Boles. Ten billable hours might more than cover Boles’ $1,912 claim.

Asked to detail Kodak’s reasons for removing the case, company spokesman Christopher Veronda wrote in an email: “Kodak believes that federal district court is the appropriate venue for the case and that the claim is without merit.”

Boles had planned to show a judge the sole piece of hard evidence she possesses: the SSA notice informing her of her entitlement to the $1,912 benefit. She was dismayed to learn that a federal case would require steps she had not anticipated taking—submitting papers and hiring a lawyer, to name two.

Still, she was not ready to give up yet.

“I think I’d better contact legal aid,” she said.

5/23/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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