U.S. Second Circuit - FindLaw

U.S. Second Circuit - The FindLaw 2nd Circuit Court of Appeals Opinion Summaries Blog


2nd Circuit Decertifies Class After Jury Returns $32M Verdict

A lesson of particular interest to class action civil procedure came out from a unanimous Second Circuit recently. That court of appeals affirmed a lower federal district court's decision to decertify a class of debtors on grounds of lack of commonality and typicality, even though the jury returned a $32 million verdict in favor of plaintiffs.

This ruling does not mean a free-for-all in courts, however. After all, the decertification took place before a final judgment in the case.

Microsoft Doesn't Have to Turn Over Emails on Foreign Servers

The U.S. government cannot not legally compel Microsoft to hand over customer emails stored in Irish servers under the Stored Communications Act, the Second Circuit ruled yesterday. It's a major win for both tech and for privacy advocates.

It is believed that Microsoft is the first company to challenge a domestic search warrant over data held in another country, according to Reuters.

A $7.25 billion antitrust settlement between credit card companies and 12 million merchants was nixed by the Second Circuit last week. For over ten years, merchants had pursued a class action antitrust suit against Visa and MasterCard, alleging that they abused their market power to force unfair fees on businesses that accepted credit cards.

The proposed settlement would have provided those merchants billions in relief, while also preventing those merchants from bringing future challenges to the credit card companies' policies in perpetuity, leading the Second Circuit rule that the settlement was unreasonable and inadequate and that many of the merchants had been inadequately represented.

'Pudgie's' Mark Back in the Hands of Original Family Company

A trademark dispute over Pudgie's pizza and pasta chain made its way up to the Second Circuit recently, as members of this "once-convivial family" fought over control of the Pudgie's franchise.

The dispute pit cousin against cousin in an almost-literal food fight over who had the rights to the Pudgie's mark, and whether one cousin had obtained those rights by fraud.

2nd Cir. Rules in Vimeo's Favor; Good News for ISPs

The Second Circuit ruled in favor of Hi-Def video upload service Vimeo over allegations that the latter ignored red flags when its employees heard popular songs on the Vimeo's website. At the same time, it also affirmed the broad safe-harbor protections afforded under the DMCA, regardless of publication date of the copyrighted material.

It's a decision that made the EFF giddy with delight. It makes sense as the digital freedom group co-wrote an amicus in the case.

2nd Cir. Reverses Lower Ct. Libor Ruling, Says Antitrust Violated

The Second Circuit has reversed a lower federal court decision that had first determined that widespread collusion amongst international banks to price-fix the London Interbank Offered Rate (aka Libor) was not a violation of antitrust law for want of competition.

The Second Circuit's Court of Appeals reversed this recently, breathing new life into plaintiffs' hopes for redemption. As well as plaintiffs' lawyers. The ruling cracks open a doorway to potentially billions in damages tied to the manipulation of the price of money and lending.

Lynn Tilton Loses Bid to Bring Case to Circuit Ct. Over SEC ALJ

The matriarch of Patriarch Partners, the private equity firm, has lost her bid to halt SEC administrative proceedings over her alleged defrauding of investors. Lynn Tilton, founder of Patriarch, will have to go through lower SEC administrative channels first and exhaust those proceedings before getting any type of review by the federal appellate court.

The ruling is no surprise given the increase in the of SEC court proceedings following the Dodd-Frank Act of 2010.

'Hustle' Case Reversed: BofA Escapes $1.3 Billion Penalty

The Second Circuit just handed Bank of America a huge win when it reversed the trial court's order for the mortgage lender to pay up to the tune of $1.27 billion. This penalty was initially ordered for alleged violations by its Countryside unit when the mortgage-crisis reached a fever pitch. The case became known as the "Hustle" case because of its focus on the banking industry tactic of continuing to issue bad loans despite their quality.

The case is a curious one and is sure to infuriate now disbanded members of "Occupy Wall Street." In the opinion of Michael Hiltzik of the L.A. Times, the decision amounted to a kangaroo decision that turned on the following issue: "When is a fraud not a fraud, but just, sort of, a lie?"

WWII Vet Writes 2nd Cir., Reprimands the Panel Over 'Deflategate'

The Deflategate scandal is beginning to strike some as getting a little long in the tooth, particularly owing to the fact that the entire scandal revolves around the PSI of a football, but it looks like it will continue on. While probably everyone is tired of this scandal, no one is quite as frustrated as Warren B. Lessing, a 93-year-old WWII vet who reprimanded the Second Circuit for adding grease to a fire.

The tone of Lessing's letter to the court can be summed up with this very direct question: "Don't you have anything more important to do?"

James Haber and his tax shelter boutique, Diversified Group Inc, were fined $25 million by the Internal Revenue Service for their alleged failure to register offshore tax shelters. Haber handed over $18,370 and his company paid out $15,500, and that was it. To collect the significant balance remaining, the IRS turned to assets controlled by Haber's wife, Jill.

Haber sued, contesting the administrative summons issued by the IRS to Ms. Haber's bank. But, the Second Circuit ruled last Friday, that summons was well within the Service's power, allowing the IRS investigation into Haber's wife to continue ahead.