Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

This action for breach of contract and related tort claims had its origin in a February 9, 2006 Credit and Security Agreement, wherein defendant agreed inter alia to provide plaintiff with a revolving line of credit. Plaintiff subsequently appealed from a judgment of dismissal entered by the district court, contending that the district court erred in relying on releases executed in favor of defendant, most recently in a forbearance agreement to dismiss its claims because its complaint pleaded that these releases were induced by economic duress. The court held that plaintiff failed to plead plausibly that defendant made a "wrongful threat," an essential element of economic duress. Rather, the conduct alleged to have caused duress evidences only the exercise of defendant's legal rights under the parties' original contract and subsequent agreements. Therefore, to the extent that those rights included defendant's exercise of "reasonable discretion" in various areas, plaintiff's allegations failed as a matter of law to plead actions exceeding the scope of such discretion. Accordingly, the court affirmed the judgement of dismissal.

This case arose when plaintiffs alleged that they suffered injury caused by a defectively designed transmission of an all-terrain vehicle (ATV) manufactured by Recreative Industries, Inc. (Recreative) on the basis of a design originally created by Borg-Warner Automotive, Inc. (Borg-Warner). Plaintiff appealed the district court's grant of summary judgment in favor of Borg-Warner and the district court's dismissal of the suit against Recreative on the basis of forum non conveniens. The court affirmed the district court's grant of summary judgment in favor of Borg-Warner where Borg-Warner had sold all rights to the design at issue twenty-six years before manufacture of the machine that caused plaintiffs' injuries; during that time, Borg-Warner had no ability to learn from experience whether its design was causing injuries, no ability to conduct safety tests, and no possibility of improving the design to diminish the risk of harm; and therefore, imposing strict liability on Borg-Warner in these circumstances would not reasonably serve the central rationale for strict liability. The court also held that there was no abuse of discretion in dismissing the suit against Recreative under the doctrine of forum non conveniens where plaintiffs were residents and citizens of Scotland, the accident occurred in England, the ATV remained in England, both nonparty witnesses to the accident were British citizens residing in England, and Recreative was subject to British courts.

Defendant appealed from a judgment of conviction where he and his co-defendant were found guilty of two counts of conspiracy with intent to distribute cocaine and one count of attempt to possess with intent to distribute cocaine. At issue was whether the district court properly admitted a portion of a recorded telephone call that defendant made while incarcerated, because he argued that the communication was protected by the attorney-client privilege. The court held that the district court did not abuse its discretion in finding that defendant was unable to prove that his communication was made in confidence, given his knowledge that his calls were being recorded by the Bureau of Prisons and his ability to communicate directly with his attorney in the absence of any monitoring. Accordingly, the court affirmed the district court's decision to admit defendant's telephone call.

This appeal stemmed from numerous trademark and unfair competition claims over the name "Patsy's." Patsy's Italian Restaurant appealed, and Patsy's Pizzeria cross-appealed, from a judgment of the district court after a jury trial on claims brought pursuant to trademark and unfair competition law. The court upheld the district court's jury instructions; affirmed the district court's refusal to grant a new trial on the issue of whether Patsy's Pizzeria made fraudulent statements to the Patent and Trademark Office, as well as its refusal to vacate the jury's verdict that Patsy's Italian Restaurant did not fraudulently obtain its trademark registrations; affirmed the district court's refusal to reinstate Patsy's Pizzeria's trademark registrations; and upheld the district court's denial of attorneys' fees and injunctive relief. Accordingly, the court affirmed the judgment of the district court.

This case arose when plaintiff filed a putative class action complaint against defendant and others following the decline of defendant's stock price. At issue was whether certain statements concerning goodwill and loan loss reserves in a registration statement of defendant's gave rise to liability under sections 11 and 12 of the Securities Act of 1933, 15 U.S.C. 77a et seq. The court held that the statements in question were opinions, which were not alleged to have falsely represented the speakers' beliefs at the time they were made. Therefore, the court affirmed the judgment of the district court.

Six defendants appealed from their convictions for a variety of weapons trafficking offenses. On appeal, the court addressed three of the many issues raised by defendants, finding, after due consideration, their remaining arguments lacked merit. The court held that the evidence was sufficient to support all of the convictions and rejected a vagueness-as-applied argument raised by one defendant (Kharabadze). The court held, however, that the district court employed the wrong standard of proof at sentencing in imposing increases to another defendant's (Solomonyan) base offense level under U.S.S.G. 2K2.1(b)(1)(E) and (b)(3)(A). Therefore, the court vacated that defendant's sentence and remanded for resentencing.

Defendant was convicted of eleven counts of a thirteen count indictment, including several Hobbs Act, 18 U.S.C. 1951(a), violations predicated on robbery and conspiracy to commit robbery. On appeal, defendant challenged the sufficiency of the evidence, arguing that the stipulation at issue was insufficient to establish the requisite jurisdictional element. The court held that the evidence proffered by the government was sufficient to sustain the interstate elements of the Hobbs Act attempted robbery count at issue where the stipulation entered into by the parties, that "marijuana [wa]s grown outside of the state of New York and travel[ed] in interstate and foreign commerce to arrive in the New York City area[,]" conveyed the same information about the interstate nature of the marijuana trade as the court's precedents. The court also held that the district court did not err in denying defendant's motion for judgment of acquittal where, given the ample evidence, a rational juror could find that defendant's conduct went far beyond "mere preparation" and constituted a "substantial step" toward commission of a robbery. The court considered all of defendant's other arguments and found them to be without merit and therefore, affirmed the judgment of the district court in its entirety.

Thirteen present and former female inmates of various New York state prisons appealed from the dismissal of their class action complaint brought under 42 U.S.C. 1983, seeking declaratory and injunctive relief compelling the Department of Correctional Services (DOCS) to alter its practices and procedures so as to enhance the protection of the class from sexual assault, abuse, and harassment. The complaint also asserted individual claims for damages. The dismissal was based on the grounds that some of the claims of named plaintiffs were moot and that the remaining named plaintiffs had failed to exhaust available remedies as required by the Prison Litigation Reform Act of 1995 (PLRA), 42 U.S.C. 1997e. The court held that it lacked pendant appellate jurisdiction over the damages claims. The court also held that the claims for injunctive and declaratory relief by plaintiffs who were now free but were in DOCs custody when they brought suit were not moot. The court applied a relation-back theory and determined that plaintiffs' class claims were capable of repetition, yet evading review. The court further held that three plaintiffs have exhausted applicable internal prison grievance proceedings while the remaining ten have not. Accordingly, the court vacated the judgment in part and remanded for further proceedings.

This case arose when the FTC alleged deceptive advertising claims against defendants based on two purported weight loss products, a Chinese Diet Tea and a Bio-Slim Patch. On appeal, defendants challenged both the power of the district court to award monetary relief and the means by which the district court calculated the award. The court held that the district court had the power to award restitution pursuant to Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 53(b). The court also held that the district court did not err in ordering defendants to disgorge the full proceeds from its sale of the products in question. Accordingly, the court affirmed the judgment of the district court.

Defendant appealed from a judgment of the district court convicting him of conspiracy to distribute narcotics and possession of a firearm during and in relation to a drug-trafficking crime. The district court imposed a sentencing enhancement pursuant to 18 U.S.C. 924(c)(1)(A)(iii) for the discharge of the weapon, even though it was the intended victim, and not defendant, who fired the gun. Defendant contended that because he did not possess the gun when it was discharged, the district court erred in applying the enhancement. The court held that the district court correctly held that defendant was subject to the discharge enhancement where, as here, defendant possessed a firearm in furtherance of a drug-related crime and the firearm was discharged during the course of that crime. Therefore, by its plain terms, the statute applied. The court also held that when a defendant possessed a firearm during a drug-trafficking offense, the risk of an intended victim trying to seize the gun was just as real as an accidental discharge and that defendant's reliance on United States v. Daija was unavailing. Accordingly, the judgment of the district court was affirmed.