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

June 2010 Archives

Macey v. Carolina Cas. Ins. Co., No. 08-6067, involved an action against an insurance policy for coverage of an underlying suit against corporate directors for breach of fiduciary duty.  The court of appeals reversed summary judgment for defendants, on the ground that the directors and officers insurance policy at issue was ambiguous under Virginia law.

Torraco v. Port Auth., No. 08-1768, concerned a challenge to the actions taken by defendant-police officers when plaintiffs attempted to transport unloaded firearms in checked baggage through various New York airports.  The court of appeals affirmed summary judgment for defendants, holding that 1) 18 U.S.C. section 926A was not enforceable through 42 U.S.C. section 1983; (2) plaintiffs' rights to be free from false arrest were not violated; and (3) plaintiffs' rights to travel were not infringed.

In US v. Whitten, No. 07-1320, the court of appeals affirmed defendant's murder and racketeering convictions on the grounds that 1) the evidence was sufficient to support a jury finding that he had acted with any of the motives required for conviction under the VICAR statute; and 2) there was no abuse of discretion in the district court's control of a witness's recross examination.  However, the court reversed defendant's death sentence on the ground that two arguments made to the jury by the prosecution -- both bearing on the critical issues of remorse, acceptance of responsibility, and future dangerousness -- impaired defendant's constitutional rights.

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Kaytor v. Electric Boat Corp., No. 09-1859, involved an action for hostile work environment sex discrimination and retaliation.  The court of appeals affirmed summary judgment for defendant in part, holding that defendant's proffer was sufficient to show a non-retaliatory motive for plaintiff's termination.  However, the court vacated in part, on the ground that the district court, in evaluating the harassment claim, disregarded some evidence that clearly would be admissible at trial.

New York v. Atlantic States Marine Fisheries Comm., No. 09-1594, concerned an action under section 702 of the Administrative Procedure Act (APA) challenging the Atlantic States Marine Fisheries Commission's (ASMFC) final management rule for the 2008 recreational summer flounder fishery.  The court of appeals reversed the district court's denial of the ASMFC's motion to dismiss, holding that the ASMFC was not a federal agency within the meaning of the APA because it was not an "authority of the [g]overnment of the United States."

Romano v. Kazacos, No. 08-6187, involved an action alleging that employees of Morgan Stanley & Co., Inc. misrepresented that if plaintiffs were to retire early, their investment savings would be sufficient to support them through retirement.  The court of appeals affirmed the district court's order denying plaintiffs' motion to remand and dismissing the action, holding that the district court was entitled to look beyond the four corners of plaintiffs' amended complaints because determining whether the cases were properly removed under the Securities Litigation Uniform Standards Act was essentially a jurisdictional question.

In US v. Malki, No. 08-4417, the court of appeals vacated defendant's sentence for improper use of national defense information, holding that section 2M3.3 of the Sentencing Guidelines, rather than section 2M3.2, should have been used for the initial calculation of defendant's sentence.

In US v. Ramirez, No. 07-2912, the Second Circuit affirmed defendants' drug conspiracy convictions and sentences, on the grounds that 1) the district court improperly relied on "acquitted conduct" to establish drug quantity at sentencing, but the error was harmless; and 2) certain impeachment testimony - describing defendant's transport and delivery of cocaine - related to the charged conspiracy, and contradicted defendant's statement on direct examination that he had no contact with drugs during the relevant period.

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Carpenter v. Repub. of Chile, No. 09-3743, involved an action claiming that plaintiff was subject to abuse by the courts of Chile in a criminal case that was initiated in Santiago, Chile over ten years ago.  The court affirmed the dismissal of the action in part, on the grounds that 1) the district court did not err in dismissing plaintiff's claims against the Republic of Chile based on its sovereign immunity; and 2) plaintiff could not assert a claim on behalf of British Airways against a third party.  However, the court vacated in part, holding that the district court needed to determine, in the first instance, whether plaintiff's claims against the government officials of Chile were barred by foreign sovereign immunity under the common law.

Scheffer v. Civ. Serv. Employees' Assn., No. 07-3683, involved an action by public-sector employees who, as nonmembers of the union that represented them for collective-bargaining purposes, challenged organizing fees assessed by the union.  The Second Circuit affirmed in part the dismissal of the complaint, holding that the union's fee calculation and disclosure procedures were constitutional.  However, the court reversed in part, holding that charging nonmembers for the organizing expenses at issue violated their First Amendment rights.

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In Ruiz v. Cty. of Rockland, No. 09-0759, an action against a county for national origin and race discrimination under Title VII and the Equal Protection Clause, the Second Circuit affirmed summary judgment for defendant, holding that 1) the district court erred in finding that plaintiff was not qualified for his position based on evidence of plaintiff's misconduct; but 2) plaintiff failed to raise an inference of discrimination.

As the court wrote:  "Plaintiff Jorge Ruiz appeals the February 11, 2009 order of the United States District Court for the Southern District of New York (Eginton, J.) granting defendants County of Rockland and Mary Ann Walsh-Tozer summary judgment on plaintiff's action for national origin and race discrimination pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq.; 42 U.S.C. § 1981; and the Equal Protection Clause of the Fourteenth Amendment pursuant to 42 U.S.C. § 1983. The district court concluded that Mr. Ruiz had failed to establish a prima facie case of discrimination. We agree that Mr. Ruiz failed to raise an inference of discrimination and we therefore affirm the decision of the district court. However, we wish to clarify the second prong of the prima facie case: whether Mr. Ruiz was qualified for his position. We conclude that the district court erred in finding that Mr. Ruiz was not qualified for his position based on the evidence of Mr. Ruiz's misconduct. Instead, the court should have evaluated such evidence in the context of defendants' legitimate, non-discriminatory reason for his termination."

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Brown v. Kelly, No. 07-3356, involved a class action by persons allegedly arrested pursuant to an unconstitutional New York anti-begging statute.  The Second Circuit affirmed in part the district court's class certification order, holding that the citywide plaintiff class did meet the requirements of Federal Rules of Civil Procedure 23(a) and 23(b)(3).  However, the court reversed in part, on the ground that the district court erred in certifying a statewide defendant class because the defendant class representatives did not meet the adequacy and typicality requirements of Federal Rule of Civil Procedure 23(a), and the district court also erred in certifying a statewide plaintiff class because the certification of this class was contingent on the bilateral certification of both a statewide plaintiff and a statewide defendant class.

Durakovic v. Bldg. Serv. 32 BJ Pension Fund, No. 09-3651, concerned an ERISA challenge to a union disability-benefits denial.  The Second Circuit reversed the dismissal of the complaint, holding that 1) a fund organized pursuant to 29 U.S.C. section 186(c)(5) is conflicted within the meaning of Metropolitan Life Insurance Company v. Glenn, 128 S. Ct. 2343 (2008); 2) the district court should have accorded the conflict in this case more weight; and 3) no rational trier of fact could have failed to conclude that the benefits denial was arbitrary and capricious.

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NLRB v. Talmadge Park, No. 09-2601, involved the National Labor Relations Board's petition for enforcement of an order.  The court of appeals denied the petition, on the ground that the order issued on May 27, 2009 when the Board comprised only two members, and accordingly the order was invalid on the basis of the Supreme Court's decision in New Process Steel, L.P. v. NLRB.

Insurance Co. of N. Am. v. Pub. Serv. Mut. Ins. Co., No. 09-3640, concerned an appeal from the district court's order granting respondent's Fed. R. Civ. P. 60(b)(2) motion based on newly discovered evidence that an arbitrator who had resigned was, in fact, able to rejoin the arbitration panel prior to the district court's decision on whether to convene a new panel or order a replacement arbitrator.  The court of appeals affirmed on the ground that the rule articulated in Marine Products Export Corp. v. M.T. Globe Galaxy, 977 F.2d 66 (2d Cir. 1992) - that, absent "special circumstances," if a vacancy arises on an arbitral panel due to the death of an arbitrator prior to the rendering of an award, a new panel should be convened - did not apply to a vacancy occasioned by a resignation, and that, in the instant case, the district court's decision either to reappoint the arbitrator who had resigned, or, in the alternative, to direct INA to appoint a replacement was proper pursuant to 9 U.S.C. section 5.

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Export-Import Bank of the U.S. v. Asia Pulp & Paper Co., No. 09-2254, involved an action to collect a $144 million judgment against defendants pursuant to the Federal Debt Collection Procedures Act (FDCPA).  The Second Circuit affirmed the district court's order quashing plaintiff's writs of garnishment, holding that an electronic funds transfer (EFT) temporarily in the possession of an intermediary bank in New York may not be garnished under the FDCPA to satisfy judgment debts owed by the originator or intended beneficiary of that EFT.

In Zakrzewska v. The New School, No. 09-0611, a sexual harassment action, following the New York Court of Appeals' answer to a certified question, the court of appeals affirmed the denial of summary judgment to defendant, holding that the affirmative defense to employer liability articulated in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), did not apply to sexual harassment and retaliation claims under section 8-107 of the New York City Administrative Code.

Amore v. Novarro, No. 08-3150, concerned a 42 U.S.C. section 1983 action alleging a false arrest.  The court of appeals reversed the denial of summary judgment based on qualified immunity, on the ground that the district court erred in deciding that, despite the fact that a state loitering statute was still widely published as though it remained valid, it would have been clear to a reasonable officer in defendant's position that making the arrest was unlawful.

In re: Delta Airlines, Inc., No. 08-5002, involved creditors' appeal from the bankruptcy court's order upholding debtor's objections to their claims under tax indemnification agreements.  The court of appeals vacated the order, on the grounds that 1) the bankruptcy court's construction of "pay" as that term was used in an agreement at issue nullified debtor's obligation to pay the "Owner Participant" under the agreement upon the occurrence most likely to call its provisions into play - the debtor's insolvency; and 2) the bankruptcy court effectively nullified the agreements by stripping them of their ability to protect the Owner Participant in the event of debtor's default.

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US v. Heras, No. 09-3150, concerned the government's appeal from the district court's grant of defendant's motion for judgment of acquittal on the charges of conspiracy to possess and aiding and abetting an attempt to possess with intent to distribute 500 grams or more of cocaine.  The court reversed on the ground that the evidence was sufficient to permit a jury to infer from defendant's knowledge that a co-conspirator was a drug dealer seeking to take possession of a quantity of drugs and defendant's knowing effort to further and facilitate that possession that defendant necessarily adopted the specific intent underlying the attempted possession, namely, distribution of any acquired drugs.

Jennifer Matthew Nursing & Rehab. Ctr. v. US Dept. of Health & Hum. Servs., No. 08-5052, involved a petition for review of a ruling by the Appeals Board of the U.S. Department of Health and Human Services affirming the decision of an Administrative Law Judge that upheld the assessment of an $80,000 civil monetary penalty for regulatory violations imposed by the Centers for Medicare and Medicaid Services against a certified nursing facility formerly owned and operated by petitioner.  The court of appeals dismissed the petition as moot, holding that, subsequent to the filing of the petition, the new owner-operator satisfied the civil monetary penalty assessed against the facility.

In US v. 777 Greene Ave., No. 08-5428, a civil forfeiture proceeding, the court of appeals denied the motion to withdraw of defendant's counsel, holding that such a motion would not be granted unless counsel satisfies the requirements established under Anders v. California, 386 U.S. 738 (1976), and its progeny.

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Also, Rulings in Ponzi-Scheme Related Case, and Copyright and Employment Discrimination Action

Weinstein v. Islamic Repub. of Iran, No. 09-3034, involved efforts to collect on a default judgment against Iran and in favor of the family of an individual severely injured in a 1996 suicide bombing in Jerusalem. An order granting plaintiff's motion for appointment of receiver to attach defendant's property in satisfaction of the prior judgment is affirmed as: 1) section 201(a) of the Terrorism Risk Insurance Act provided courts with subject matter jurisdiction over post-judgment execution and attachment proceedings against property held in the hands of an instrumentality of the judgment-debtor, even if the instrumentality was not itself named in the judgment; 2) Congress, by virtue of providing subject matter jurisdiction over execution and attachment proceedings based in part on the Office of Foreign Asset Control's determination of what assets were blocked, did not unconstitutionally delegate its authority to the Executive Branch; and 3) there was no conflict between the TRIA and the Treaty of Amity, Economic Relations, and Consular Rights.   

SEC v. Byers, No. 09-0234, involved nonparties' appeal from the district court's order holding that its jurisdiction in rem and its equitable powers provided it with sufficient authority to issue an injunction barring non-parties from filing involuntary bankruptcy petitions against any of the defendants.  The court of appeals affirmed on the ground that, while it should be sparsely exercised, district courts possess the authority and discretion to enter anti-litigation orders, including those that bar the filing of involuntary bankruptcy petitions absent the district court's permission.

Penguin Group (USA) Inc. v. Am. Buddha, No. 09-1739, concerned a copyright infringement action in which the district court dismissed the action for lack of personal jurisdiction.  The Second Circuit certified the following question to the New York Court of Appeals:  In copyright infringement cases, is the situs of injury for purposes of determining long-arm jurisdiction under N.Y. C.P.L.R. section 302(a)(3)(ii) the location of the infringing action or the residence or location of the principal place of business of the copyright holder?

McGullam v. Cedar Graphics, Inc., No. 08-4661, involved an action alleging federal and state law claims of a sexually hostile work environment, disparate treatment, and retaliation.  The court of appeals affirmed summary judgment for defendant, on the ground that the one non-trivial comment that may fall within the limitations period is insufficiently related to the earlier course of alleged harassment.

Padmore v. Holder, No. 09-0243, involved a petition for review of an order of the BIA vacating the decision of an Immigration Judge granting petitioner's application for cancellation of removal under section 240A(a) of the Immigration and Nationality Act.  The court of appeals granted the petition, holding that the BIA impermissibly engaged in factfinding and relied on unproven and disputed allegations as a basis for its decision.

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Urinyi v. US, No. 09-3398, involved petitioner's motion for leave to file a "second or successive" motion to vacate his conviction pursuant to 28 U.S.C. section 2255.  The court of appeals denied the petition, on the ground that petitioner's prior motion did not count when determining whether his proposed motion was "second or successive" under the Antiterrorism and Effective Death Penalty Act, and thus petitioner did not require leave of the court to file the proposed motion in the district court.

In US v. Awan, No. 07-4315, the court of appeals vacated defendant's conspiracy to commit murder sentence, holding that the district court erred by denying the U.S.'s request for imposition of a terrorism enhancement, because the district court failed to consider application of the "intended to promote" prong of U.S.S.G. section 3A1.4 and misconstrued the "involved" prong.

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Alleged Breach of Securities Sale Agreement, and Criminal Matters

In US v. DeJesus-Concepcion, No. 09-1673, the court of appeals affirmed defendant's sentence for an unstated offense on the ground that the district court did not misapply section 4A1.2(c)(1) of the Sentencing Guidelines because unauthorized use of a vehicle in New York was an offense "similar to" the listed offense of "[c]areless or reckless driving" under section 4A1.2(c)(1).

Highland Cap. Mgmt. LP v. Schneider, No. 08-4630, concerned an action for breach of contract alleging that defendants' agent made an oral agreement to sell certain notes to plaintiffs at a significant discount, but reneged on that agreement.  The court of appeals reversed judgment for plaintiffs, on the ground that the evidence was insufficient to support a finding that defendants' agent had actual or apparent authority to make the contract on defendants' behalf or that he made such a contract.

US v. Julius, No. 08-4267, involved the government's appeal from the district court's order holding that a firearm seized during the arrest of defendant must be excluded from evidence because it was obtained as a result of a search that violated the Fourth Amendment.  The court of appeals remanded to give the district court the opportunity to reconsider its decision in light of the Supreme Court's recent decision in Herring v. United States, 129 S. Ct. 695 (2009).

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In re the City of New York, No. 10-0237, involved a civil right action brought by protesters and others who were arrested at the 2004 Republican National Convention (RNC).  The court of appeals granted the City of New York's petition for a writ of mandamus vacating the district court's order granting plaintiffs' motion to compel the production of roughly 1800 pages of confidential "Field Reports" prepared by undercover officers of the New York City Police Department who were investigating security threats in the months before the RNC, holding that 1) a writ of mandamus was the only "adequate means" for the City to seek review of the district court's order and thereby prevent the irreparable harm that the City - and thus the public - would suffer from the disclosure of the Field Reports; 2) because the Second Circuit had never before addressed the circumstances in which the law enforcement privilege must yield to a party's need for discovery, the petition presented novel and significant questions of law whose resolution would aid in the administration of justice; 3) after determining that the law enforcement privilege applied, the district court indisputably erred in failing to apply a strong presumption against lifting the privilege; 4) the district court indisputably erred in failing to require that plaintiffs show a "compelling need" for the Field Reports; and 5) the district court made a clearly erroneous assessment of the evidence when it found that plaintiffs' need for the Field Reports outweighed the public's interest in their secrecy.

Dobrova v. Holder, No. 09-2046, concerned a petition for review of the BIA's decision finding petitioner statutorily ineligible for a discretionary waiver of inadmissibility.  The court denied the petition on the ground that, under 8 U.S.C. section 1182, an alien who "has previously been admitted" to the U.S. as a lawful permanent resident denoted an alien who had been so admitted at any time in the indefinite past.

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FDIC v. Great Am. Ins. Co., No. 09-1052, concerned an action for breach of an insurance contract.  The court of appeals affirmed summary judgment for defendant, on the ground that the district court erred in ruling that the fidelity bond at issue was not an "asset" under 12 U.S.C. section 1823(e), but to honor the FDIC's position and allow it to recover would effectively strike the rescission clause from the bond.

As the Court wrote:  "The following facts are not in dispute. In 1999, Connecticut Bank of Commerce ("CBC"), having assets of approximately $89 million, entered into a Purchase and Assumption Agreement (the "P&A Agreement") to acquire MTB Bank ("MTB"), a New York bank with approximately $299 million in assets. CBC purchased substantially all of MTB's assets, including its factoring unit. This transaction required Federal Deposit Insurance Corporation ("FDIC") approval, which MTB sought on August 4, 1999 and obtained on February 5, 2000. At the time MTB and CBC entered into the P&A Agreement, MTB had a 15-year insurance relationship with Lloyd's of London and was covered by a Lloyd's fidelity bond set to expire on June 30, 2000."

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Harrington v. Cty. of Suffolk, No. 09-3911, involved an action pursuant to 42 U.S.C. section 1983 asserting that defendants deprived plaintiffs of a property interest protected by the Due Process Clause by conducting an inadequate investigation into their son's fatal traffic accident.  The court of appeals affirmed the dismissal of the action, holding that plaintiffs had no property interest in an adequate police investigation.

Domnister v. Exclusive Ambulette, Inc., No. 08-4387, concerned an action by Russian immigrants alleging that their former employer discriminated and retaliated against them based on their national origin.  The Second Circuit vacated the dismissal of the action following removal, holding that plaintiffs' state-court complaint neither invoked, nor substantially relied upon, any collective bargaining agreement, and therefore was not subject to Garmon preemption.

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Nathel v. Comm'r. of Int'l. Rev., No. 09-1955, involved an appeal from a decision by the tax court finding that capital contributions petitioners made to two S corporations could not be treated as "tax-exempt income" to the corporations for the purpose of increasing, pursuant to 26 U.S.C. section 1367(b)(2)(B), the petitioners' bases in loans they made to the corporations, and that petitioners could not deduct their capital contributions as ordinary losses incurred in a trade or business pursuant to 26 U.S.C. section 165(c)(1) or incurred in a transaction entered into for profit pursuant to section 165(c)(2). 

The court of appeals affirmed, holding that 1) petitioners' capital contributions did not constitute "tax-exempt income" to the S corporations and, therefore, petitioners were not entitled to increase their bases in their loans; and 2) because the petitioners did not meet their burden of showing that the primary purpose of their capital contributions was to obtain releases from their loan guarantees, the petitioners are not entitled to deductions from ordinary income pursuant to section 165(c)(2).

L-3 Comms. Corp. v. OSI Sys., Inc., No. 09-2292, concerned defendant's appeal from the district court's order taxing to defendant, under Fed. R. App. P. 39(e), plaintiff's costs of obtaining a letter of credit to secure the judgment on appeal.  The Ninth Circuit affirmed, on the ground that the court of appeals' order awarding costs to plaintiff without limitation pursuant to Rule 39(a)(4) entitled plaintiff to seek from the district court any and all permissible items of appellate costs properly taxed by that court pursuant to Rule 39(e).

Harris v. City of N.Y., No. 09-0081, involved plaintiff's appeal from the district court's order revoking his in forma pauperis status and dismissing his complaint.  The Ninth Circuit affirmed in part, holding that 1) 28 U.S.C. section 1915(g) applied to a plaintiff who had been released from prison subsequent to the filing of his complaint; 2) a court may dismiss a complaint pursuant to section 1915(g) even if the defendants did not raise that provision in the pleadings; 3) a court may rely on docket sheet entries of prior dismissals in order to determine whether section 1915(g) applies; and 4) plaintiff did not qualify for the imminent danger exception under section 1915(g).  However, the court vacated in part to permit the district court to issue a new order of dismissal permitting plaintiff to apply for in forma pauperis status as a non-incarcerated plaintiff if he chose to refile his complaint.

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Bank of N.Y. v. First Millennium, Inc., No. 09-1628, involved an action asserting competing claims to the proceeds of a failed securitization of credit card debt.  The court of appeals affirmed summary judgment for the Bank of New York and against the Federal Deposit Insurance Corporation (FDIC), holding that 1) the FDIC adduced no evidence to support its contention that the amount due on the notes at their maturity was an "invested amount" by the notes' terms, rather than the unpaid principal amount; 2) the FDIC failed to identify any other provision of the transaction documents that supported its contentions that the amount due on the notes was anything other than their entire unpaid principal; 3) issue preclusion did not apply because a prior action did not consider whether the notes at issue were full recourse or limited recourse obligations of the issuer; and 4) since the Bank of New York asserted no claims against the FDIC as receiver for the failed bank, it was not bound by the jurisdictional limitations or other procedural requirements of 12 U.S.C. section 1821(d).

As the court wrote:  "In this interpleader action, the parties assert competing claims to the dregs of a failed securitization of credit card debt. Appellant, the Federal Deposit Insurance Corporation (the "FDIC"), as well as appellees, First Millennium, Inc., Millennium Partners, L.P. (together, "Millennium") and RMK Advantage Income Fund ("RMK"), seek distribution of the funds held by the interpleader plaintiff, the Bank of New York ("BNY"), as trustee for the NextCard Credit Card Master Note Trust ("the trust"). The FDIC argues that it is entitled to the funds as the receiver for NextBank, N.A., ("NextBank") a now-defunct internet-only bank, which established the trust in order to generate money to lend to credit card holders. Millennium and RMK claim that they are entitled to the funds as owners of notes issued by the trust."

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