U.S. Second Circuit: May 2010 Archives
U.S. Second Circuit - The FindLaw 2nd Circuit Court of Appeals Opinion Summaries Blog

May 2010 Archives

Also Decisions Involving Civil Rights, Contract, and Government Benefits Matters

Seijas v. Repub. of Argentina, No. 09-0332, concerned a class action by holders of defaulted bonds issued by the Republic of Argentina.  The Second Circuit affirmed in part the district court's order certifying a class, on the grounds that 1) the fact that damages may have to be ascertained on an individual basis was not sufficient to defeat class certification; and 2) the district court correctly determined that proceeding individually would be prohibitive for class members with small claims.  However, the court of appeals reversed in part, holding that estimating gross damages for each of the classes as a whole, without using appropriate procedures to ensure that the damages awards roughly reflected the aggregate amount owed to class members, enlarged plaintiffs' rights by allowing them to encumber property to which they have no colorable claim.

Zaleski v. Burns, No. 09-2366, involved an action seeking an order that plaintiff's allegations--that there was a conspiracy to deny criminal defendants their constitutional rights--be presented to a grand jury.  The court of appeals affirmed the dismissal of the complaint, holding that 1) plaintiff did not allege that he ever requested that the Southern District U.S. Attorney's Office present his information to a grand jury, and thus he lacked standing to assert his claims; and 2) plaintiff failed to request any relief likely to redress the injury he asserted.

Genier v. Astrue, No. 09-3991, concerned plaintiff's appeal from the district court's judgment affirming the Social Security Administration's denial of benefits to plaintiff.  The court of appeals vacated the judgment, holding that 1) the administrative law judge (ALJ) failed to consider all of the evidence of record, including plaintiff's testimony and other statements with respect to his daily activities; and 2) plaintiff's testimony did not contradict his assertions that he had been substantially impaired by pain and fatigue prior to his treatment and surgery.

Katel LLC v. AT&T Corp., No. 09-1575, involved an action against AT&T alleging breach of contract, tortious interference with contractual relations, and an entitlement to fees pursuant to the International Telecommunications Regulations Act.  The court of appeals affirmed summary judgment for defendant, holding that 1) nothing in the parties' agreement required the parties to do business with one another at all -- it was not a requirements contract, and it imposed no minimum volume; 2) AT&T's payment obligation was to a third-party carrier, and that third-party carrier was in turn responsible for paying plaintiff -- AT&T was not responsible for paying plaintiff directly; and 3) the International Telecommunications Regulations did not create a private right of action.

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Stop and Questioning Upheld Over Challenge in Drug Case

In US v. Harrison, No. 09-2907, the court of appeals affirmed defendant's possession with intent to distribute cocaine base conviction, holding that the time elapsed between the stop at issue and the arrest was only five to six minutes, and the questions about the passengers' comings and goings were subsumed in that brief interval, and this additional questioning did not prolong the stop so as to render it unconstitutional.

As the court wrote:  "Defendant-appellant Jonathan Harrison appeals the judgment of the United States District Court for the 31 Northern District of New York (Mordue, C.J.) convicting him of possession with intent to distribute cocaine base (crack). He appeals the denial of his motion to suppress the drugs, arguing that the officers found them only after unreasonably protracting an otherwise lawful traffic stop."

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Denial of Habeas Petition in Murder Prosecution Affirmed

Also Ruling in Habeas Petition from Conviction for Assaulting Federal Official

In US v. Arenburg, No. 08-5090, the Second Circuit affirmed defendant's conviction for assaulting a federal official, holding that the district court erred by failing to revisit the issue of defendant's competence to stand trial based on defendant's behavior in the courtroom.

In Bierenbaum v. Graham, No. 08-1375, the court of appeals affirmed the denial of petitioner's habeas petition in a murder prosecution, holding that 1) it was not unreasonable for the Appellate Division to conclude that the reliability of the victim's statements was "amply supported" for hearsay purposes; and 2) there was no reasonable probability that the outcome of the trial would have been different absent defense counsel's alleged errors.

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Dispute Over HIV/AIDS Treatment Grant Program Funding

Also Decided Today: Suit Over Construction of Resort and Contract Case

Hunt Const. Group, Inc. v. Brennan Beer Gorman, No. 08-5603, concerned an action for negligence and negligent misrepresentation against defendant design professionals over allegedly late and erroneous delivery of professional services as part of the construction of a resort.  The Second Circuit certified the following questions to the Vermont Supreme Court:  1) Does the economic loss doctrine bar a contractor from seeking purely economic damages against design professionals who allegedly provided negligent professional services in violation of the design professionals' contractual obligations with a mutual counterparty?  2) Does the economic loss doctrine apply to claims of negligent misrepresentation?

County of Suffolk v. Sebelius, No. 09-3193, involved an action under the Administrative Procedure Act seeking additional funding for fiscal years 2007 and 2008 from a grant program administered by the Department of Health and Human Services ("HHS") pursuant to the Ryan White HIV/AIDS Treatment Modernization Act of 2006.  The court of appeals affirmed the dismissal of the action, holding that the congressional appropriations relating to the funds sought had been lawfully distributed -- and therefore exhausted -- and thus the court of appeals lacked authority to grant effectual relief in the context of an Article III case or controversy.

FCS Advisors, Inc. v. Fair Fin. Co., No. 09-2609, concerned a breach of contract action, in which the district court awarded post-judgment interest to plaintiff.  The Second Circuit vacated the award, holding that post-judgment interest was to be calculated at the federal rate provided for under 28 U.S.C. section 1961(a) where the court's jurisdiction was premised on the diversity of the citizenship of the parties and the contract giving rise to the action contained a choice-of-law provision directing application of New York law.

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Johnston v. Maha, No. 08-6048, involved a civil rights action regarding the conditions of plaintiff-inmate's confinement.  The court of appeals granted plaintiff's motion for appointment of counsel in his appeal of the grant of defendants' motion for summary judgment, on the ground that plaintiff's claims met the threshold standard of likely merit and presented issues of substantial complexity such that appointment of counsel would be of significant benefit to the court.

In US v. Oluwanisola, No. 08-4442, the court of appeals vacated defendant's convictions for conspiring to import heroin into the U.S., conspiring to possess with intent to distribute heroin, and possessing heroin with intent to distribute, holding that the district court erred in applying United States v. Barrow, 400 F.3d 109 (2d Cir. 2005), to whether certain evidence elicited at trial would open the door to the admission of proffer statements.

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Adams v. Zelotes, No. 07-1853, concerned an action challenging the constitutionality of a Bankruptcy Code provision, 11 U.S.C. § 526(a)(4), alleging that the provision's prohibition on debt relief agencies advising clients to incur additional debt in contemplation of bankruptcy violated plaintiff's First Amendment rights.  The Second Circuit reversed an injunction in favor of plaintiff, on the ground that the Supreme Court's decision in Milavetz directly foreclosed plaintiff's as-applied challenge by narrowly construing the Bankruptcy Abuse Prevention and Consumer Protection Act to avoid his First Amendment complaint.

AmeriCredit Fin. Servs. v. Tompkins, No. 09-0022, involved a creditor's appeal from the bankruptcy court's order expunging creditor's unsecured claim in a Chapter 13 proceeding and overruling creditor's objection to the confirmation of the plan.  The court of appeals vacated the order, on the ground that both state law and the contract of the parties gave creditor the right to an unsecured deficiency judgment.

Arrowood Indemn. Co. v. King, No. 07-5249, concerned an action by an insurer seeking a declaration that neither a homeowner's policy nor an umbrella policy provided coverage for a tort plaintiff's claimed injuries.  The Second Circuit certified the following questions to the Connecticut Supreme Court:  1) With respect to a claim for negligent entrustment under a liability policy that excludes coverage for "[a]rising out of . . . [t]he entrustment by an insured" "to any person," "of a motor vehicle" other than "[a] motorized land conveyance designed for recreational use off public roads, not subject to motor vehicle registration and . . . [o]wned by an insured and on an insured location," is the insured location a) the place where the entrustment of the vehicle took place, or b) the place where the vehicle is garaged, or c) the place where the accident occurred?  2) In the absence of a policy definition of "premises", should a private road located within a residential development owned by the insured's homeowners association be considered "premises used . . . in connection with a [residence] premises" under the terms of a homeowner's insurance policy if the portion of the road where the liability arose is not regularly used by the insured, although other portions of the road are so used?  3) Under Connecticut law, where a liability insurance policy requires an insured to give notice of a covered claim "as soon as practical," do social interactions between the insured and the claimant making no reference to an accident claim justify a delay in giving notice of a potential claim to the insurer?

Slayton v. Am. Express Co., No. 08-5442, involved a securities fraud action challenging one allegedly misleading statement made in the defendants' May 15, 2001 quarterly report.  The court of appeals affirmed the dismissal of the complaint, on the ground that the alleged misleading statement was a forward-looking statement that was protected by the safe harbor of the Private Securities Litigation Reform Act.

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Interworks Sys. Inc. v. Merchant Fin. Corp., No. 08-1425, concerned a complaint-in-intervention by the U.S. seeking unpaid employment taxes from defendant, under New York Lien Law sections 70-79a (Article 3-A).  The court of appeals affirmed the dismissal of the complaint, on the ground that Article 3-A's requirement that there be no prior pending Article 3-A action applied to the U.S. when it brought an action under Article 3-A, and the existence of a pending Article 3-A action required dismissal.

Fincher v. Depository Trust & Clearing Corp., No. 08-5013, involved an employment discrimination action alleging that defendant retaliated against plaintiff by failing to investigate her complaint.  The Second Circuit affirmed summary judgment for defendant, holding that an employer's failure to investigate a complaint of discrimination could not be considered an adverse employment action taken in retaliation for the filing of the same discrimination complaint.

In re: Baker, No. 09-4656, concerned the bankruptcy trustee's appeal from the bankruptcy court's order exempting the proceeds of an annuity from a Chapter 13 bankruptcy estate under New York Debtor and Creditor Law section 282 and New York Insurance Law section 3212.  The court of appeals affirmed, holding that New York law permitted the debtor to exempt the annuity payments, and he gave consideration for the contract when he released a wrongful death claim.

In US v. Needham, No. 06-5652, the court of appeals affirmed in part defendant's Hobbs Act robbery and Hobbs Act conspiracy convictions, on the ground that the interstate commerce element was proven with respect to the defendants' conspiracy convictions, which encompassed cocaine and heroin robberies - substances that necessarily originated out-of-state.  However, the court vacated in part, on the ground that the government presented the jury with no evidence that the marijuana robberies at issue affected interstate commerce in any fashion.

Dickerson v. Napolitano, No. 09-2167, involved a civil rights action arising out of plaintiffs' arrests, incarcerations, and prosecutions for attempting to enter a federal building with objects resembling police badges.  The Second Circuit affirmed summary judgment for defendants, on the grounds that 1) plaintiffs' First Amendment claim was waived because it was not explicitly raised, or supported by facts alleged, in the complaint; 2) plaintiffs' Fourth Amendment claim failed because there was probable cause for their arrests; 3) plaintiffs only had standing to make an as-applied challenge to New York City Administrative Code section 14-107, and that section was not unconstitutionally vague as applied to them; and 4) plaintiffs failed to adequately serve certain defendants with process.

Vaughn v. Airline Pilots Assoc. Int'l., No. 08-4173, concerned an action against an airline pilot's union for breach of the duty of fair representation.  The Second Circuit affirmed the dismissal of the complaint, holding that 1) defendants' failure to conduct the audit at issue was not so far outside a wide range of reasonableness as to be irrational; 2) the mere collection of management fees in exchange for services legally rendered did not, without more, evidence an improper motive; and 3) plaintiffs failed to allege a causal connection between defendant's failure to conduct the audit and the termination of plaintiffs' benefit plan.

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Child Pornography Sentence Vacated, and Insurance Matter

Nationwide Mut. Ins. Co. v. Mortensen, No. 08-5214, involved an action arising out of the retention of policyholder information by former insurance agents for plaintiff, summary judgment dismissing both plaintiff's claims and defendants' counterclaims is affirmed, on the grounds that 1) the policyholder information was readily available from another source, and thus did not qualify as a trade secret as a matter of law; 2) plaintiff effectively abandoned its breach of fiduciary duty claim on appeal because it failed to challenge the district court's determination that it could not prove damages on that claim; 3) the agents did not qualify as employees covered by ERISA as a matter of law; and 4) the agents pointed to no evidence showing that plaintiff's allegedly unfair trade practices resulted in an ascertainable loss.

In US v. Dorvee, No. 09-0648, the court of appeals vacated defendant's child pornography distribution sentence, on the grounds that 1) it appeared that the district court believed it was imposing a non-Sentencing Guidelines sentence when, in fact, it selected a sentence conforming exactly to the Guidelines, and thus committed procedural error; 2) the sentence was substantively unreasonable because of the district court's apparent assumption that defendant was likely to actually sexually assault a child, a view unsupported by the record evidence yet one that plainly motivated the court's perceived need "to protect the public from further crimes of the defendant"; and 3) the district court erred in considering it a foregone conclusion that the statutory maximum sentence "probably [would] be upheld" on appeal, apparently because it concluded that its sentence was "relatively far below" the initial Guidelines calculation.

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Spiegel v. Schulmann, No. 06-5914, concerned an action claiming that defendants violated the anti-retaliation provision of the Americans with Disabilities Act (ADA) and related state laws by terminating plaintiffs as karate instructors.  The court of appeals affirmed summary judgment for defendants in part, holding that 1) the district court properly concluded that there was no individual liability for retaliation claims brought under the ADA and 2) the district court correctly determined that plaintiffs failed to state a claim under the New York State Human Rights Law (NYCHRL).  However, the Second Circuit vacated the judgment in part, on the ground that the district court needed to consider in the first instance whether obesity was a disability under the NYCHRL.

As the court wrote:  "Appeal from a judgment by the United States District Court for the Eastern District of New York (Townes, J.) granting the Defendants-Appellees' motion for summary judgment. Because we hold that the district court properly concluded that there is no individual liability for retaliation claims brought under the Americans with Disabilities Act ("ADA"), we affirm the court's granting of the motion for summary judgment with respect to the ADA retaliation claims against Defendant-Appellee Daniel ("Tiger") Schulmann. Further, we also hold that the court correctly determined that the Plaintiffs failed to state a claim under the New York State Human Rights Law. However, we vacate and remand with respect to the Plaintiffs' claim under the New York City Human Rights Law. We find the Plaintiffs' remaining bases for appeal to be without merit. Accordingly, we affirm in part and vacate in part the
judgment of the district court, and remand."

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Appeals Deal with Drug Conspiracy Convictions and Sentences

In US v. Torres, No. 09-1771, the court of appeals reversed defendant's drug conspiracy conviction, holding that the trial evidence was insufficient to permit the jury to find beyond a reasonable doubt that he had knowledge that the purpose of the conspiracy of which he was found to be a member was the distribution of narcotics.

In US v. Hernandez, No. 09-1421, the Second Circuit vacated defendant's drug conspiracy sentence, on the ground that the district court evidently started with an assumption--invalid after so long an interval--that the baseline for the re-sentencing was the sentence imposed in 1991, and thereby failed to properly consider the factors set out in 18 U.S.C. section 3553(a)--particularly defendant's submission of evidence of rehabilitation--at the time of re-sentencing.

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