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Chevron Escapes $9.5 Billion 'Amazon Chernobyl' Judgment

Energy giant Chevron can breathe a little easier after the Second Circuit overruled a lower court award of $9.5 billion, finding that the judgment was "procured by corrupt means" and attorney fraud. It's a gigantic win for a gigantic company that has the potential to set the tone for international business litigation strategies.

The attorney who is at the center of this reversal-slash-scandal is Steven Donzinger whom Chevron accused of conducting a "shake-down" of the company. Donzinger's lawyer called the circuit's decision "unprecedented."

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.

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.

Tom Brady Must Be Punished for Deflategate, Says 2nd Circuit

The Second Circuit's Court of Appeals weighed in on the Deflategate controversy and decided that a reinstatement of a four-game suspension against Tom Brady was the proper route. Brady had earlier petitioned a lower district court ruling on due process grounds.

No surprise, the news was met with nodding approval by NFL Commissioner Roger Goodell who fast-tracked proceedings against Brady that led to the player's suspension.

A lawsuit over the New York Metropolitan Transit Agency's refusal to run anti-Muslim ads has been mooted by the Agency's new advertising standards, the Second Circuit ruled last week. The American Freedom Defense Initiative, famous for insulting billboards and "draw Muhammad" contests, had tried to run the controversial ad on New York City subways and busses. The MTA denied the ad, on the grounds that it incited violence.

AFDI won in court, promoting the MTA to change its advertising policy. The ad was still banned, but now because it was "political," and that was enough to moot the case, the Second Circuit ruled.

When the New England Patriots were caught using slightly deflated footballs in championship games, allegations of cheating soon followed. In response, the NFL suspended Pat's quarterback Tom Brady for four games. "Deflategate" or, as some call it, "Ballghazi," soon went before the federal courts, where U.S. District Judge Richard Berman vacated Brady's suspension this September.

Now Brady's controversial footballs are directly before Second Circuit, with the NFL submitting the first brief in its appeal. The court, the League argues, overstepped its bounds by reversing the NFL's decisions on an issue that "struck at the heart of the game's integrity."

Before there was Enron, there was Cendant. Cendant, a travel and real estate company, cooked its books for 12 years, in one of the largest accounting frauds ever. When the fraud was discovered, Cendant's stock crashed, with investors losing $19 billion in a single day -- the largest tumble on record, until Enron came around.

It took three trials and over eight years for Walter Forbes, former Cendant chairman, to be convicted of securities fraud for his role in the fraud. He was sentenced to 12 years and ordered to pay $3.275 billion in restitution -- again, the largest restitution award ever, until Bernie Maddof came around. 

Forbes won't be getting a fourth trial, as the Second Circuit on Tuesday rejected his request to be retried because of newly discovered evidence. Not only does the case keep Forbes locked up, but it adds a new layer to the Second Circuit's treatment of newly discovered evidence. While known but physically unavailable evidence may be considered newly discovered, that which was withheld because of the Fifth Amendment will not.

Four years after an FBI dragnet brought down her husband, Arlene Drimal's lawsuit against agents who listened in to her privileged conversations with her husband has been dismissed. According to the Second Circuit, Drimal's allegations of improper wiretapping failed to assert sufficient facts under Iqbal and Twombly.

Drimal's husband, Craig Drimal, pleaded guilty to securities fraud in connection with the collapse of the Galleon hedge fund and its founder, Raj Rajaratnam, whose insider trading landed him one of the longest white collar criminal sentences ever. The case against Mr. Drimal and Rajartnam relied heavily on wiretaps.

More than 22 years ago, environmental advocates accused Texaco, later acquired by Chevron, of polluting the Amazonian rainforest homeland of 30,000 Ecuadorians. Since then, the controversy has produced reams of media coverage, a well-received documentary, and a judgment of nearly $9 billion against Chevron.

It also produced a three hundred page court opinion finding that the billion dollar judgment to be based on fraudulent evidence, bribery and deceit -- and preventing enforcement of the judgment under an anti-racketeering statute often used for mobsters, not environmental lawyers.