2nd Circuit Contract Law News - U.S. Second Circuit
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This is a case about Benihana, burgers, and contracts. Benihana was founded in 1963 by Rocky Aoki, who would have been a serious contender for the title "Most Interesting Man in the World."

Unfortunately, the case doesn't really involve the considerable family drama surrounding the company after Aoki's death in 2008, which pitted Aoki's six children against his third (much younger) wife, who also happened to be the CEO of Benihana of Tokyo at the time. This case is about a 1994 agreement splitting the company into two entities.

Thus far, the Supreme Court has granted cert. to only one case from the Second Circuit. Gelboim v. Bank of America is a civil action brought by several investors against several banks, arising out of the LIBOR scandal of a few years ago.

LIBOR -- the London Interbank Offered Rate -- is an important interest rate in worldwide banking. It was discovered that several banks colluded to manipulate the interest rate, harming investors by giving them a lower interest rate on financial products than they would have had otherwise.

How lucrative are "check cashing" businesses? Pretty lucrative, but states are increasingly regulating these bank-like industries that charge extremely high interest rates. Enter the Indian tribes! Payday lenders are teaming up with Indian tribes to utilize tribal sovereignty as an end-run around state usury laws, which the lenders claim don't apply to loans made on tribal land. As a result, the legality of these operations is a serious question. From Minnesota to California, states are cracking down on these tribal lending operations.

Yesterday, the Second Circuit Court of Appeals dealt a bit of a death blow to a New York-based Indian payday lender.

The past month was a busy one for fashion brands as two lawsuits made headlines (but thankfully had no effect on hemlines).

In the first suit, designer Rachel Roy is suing Jones Apparel Group ("Jones"), where she is trying to stop Jones from selling her brand for $14.6 million to Bluestar Alliance, allegedly in violation of several agreements between Roy and Jones, reports WWD. (subscription only)

In the next, Aeropostale is suing H&M for trademark infringement over the use of the phrase "Live Love Dream," says WWD. (subscription only)

Here's a breakdown of each case.

A putative class action brought by investors against multinational bank Barclays was revived by the Second Circuit last week, when the court vacated in part the district court's dismissal of the suit, reports Reuters.

While the Second Circuit agreed with Judge Shira Scheindlin (of New York City stop and frisk fame) that Barclay's SEC filings were not materially false, the court found her dismissal of the other claims, prior to discovery, premature.

Back in February we mentioned a pending shareholder lawsuit brought by Lululemon shareholders against the company. They claimed that during the class action period, September 7, 2012 and January 10, 2014, Lululemon mislead and defrauded shareholders, reports Reuters.

Last Friday, District Judge Katherine B. Forrest, of the District Court for the Southern District of New York, issued her opinion dismissing the complaint against Lululemon.

Can we get a collective Namaste?

The Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") was enacted to provide a framework for the cleanup of hazardous waste, and to allocate the cost of cleanup to those who create or maintain hazardous conditions. The question before the Second Circuit was a novel one: whether CERCLA creates a subcontractor's right of recovery against a landowner, when the landowner has already paid the contractor in full.

The Cleanup

Norampac discovered that the soil at the one of its sites was contaminated with lead, so Norampac contracted with AAA Environmental, Inc. for the cleanup. AAA subcontracted with Price Trucking, and Price Trucking completed all of its work.

The ripples of the financial crisis that spun out of control in the fall of 2008 are now being felt as shareholder suits progress through the judicial system. Maurice "Hank" Greenberg is not only AIG's former CEO, his company, Starr International Co., had a 12% stake in AIG, making it AIG's largest shareholder. Last week, the Second Circuit dealt a blow to one of his two cases in federal court, reports Reuters.

2008 Financial Crisis

In September 2008, AIG alerted the Federal Reserve Bank of New York ("FRBNY") that it may have to file for bankruptcy. To avoid further financial catastrophe, the FRBNY entered a credit agreement with AIG to prevent bankruptcy, effectively giving the federal government an 80% interest in AIG's common stock. Successive financial vehicles and agreements were utilized as rescue deals to prevent AIG from failing.

Perhaps the Second Circuit is already in a pre-Thanksgiving, turkey tryptophan-induced food coma, but so far it's been a not-so busy week for the court as far as precedential decisions. But, there is some important news coming out of the circuit that is worth noting.

'Ghost Rider' Rides Back to Court; Hopefully Not to Theatres

Anyone remember that pair of Nicholas Cage abominations masquerading as "superhero films" from a few years back? Yeah. Those were awful. They also led to this lawsuit.

Though Marvel already had a horse-riding "Ghost Rider" character as early as 1966, freelance writer Gary Friedrich proposed a man on a motorcycle in 1972. Credit for the flaming skull head and the "pact with Satan to save [loved one's] life" cliché are still in dispute.