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

May 2016 Archives

'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.

2nd Cir. Affirms Dismissal of ERISA Parity Case Against Anthem

The Second Circuit affirmed a lower court's dismissal of an ERISA discrimination suit against health insurers Anthem on the grounds that the latter discriminated against mental-health patients by reimbursing them less than other patients.

But the thrust of the disputed issue at law still remains red hot. The case was not dismissed on the merits so much as the circuit decided that psychiatrists, who brought the suit on behalf of their patients, lacked standing.

2nd Cir. Refuses to Re-Open Arab Bank Terrorism Suit

Controversy aside, jurists will have to live with the fact that precedent does not allow a re-hearing of the Arab Bank suit which ruled against victims of suicide bombers late last year.

This was the final say of the Second Circuit, which finally put to rest the suits brought by families of Israeli victims killed by Palestinian suicide bombers during the Second Intifada.