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

A Malaysian national who worked as a managing director for Goldman Sachs in Malaysia was prosecuted for his role in a large-scale financial scheme involving 1Malaysia Development Berhad (1MDB), a Malaysian state-owned investment fund. The government presented evidence showing that, along with other conspirators, he participated in three major bond offerings raising $6.5 billion, from which more than $2.5 billion was diverted for bribes and kickbacks to officials and participants, including himself. The funds were laundered through shell companies, and the defendant received $35.1 million that was deposited in an account controlled by his family members. The defendant’s wife asserted at trial that these funds were legitimate investment returns, not criminal proceeds.Prior to this appeal, the United States District Court for the Eastern District of New York denied several motions by the defendant. The court rejected his arguments that the indictment should be dismissed for lack of venue, concluding that acts in furtherance of the conspiracy passed through the Eastern District of New York. The court also found that the government did not breach an agreement regarding his extradition from Malaysia, since the superseding indictments did not charge new offenses. The district court excluded a video recording offered by the defense as inadmissible hearsay, and ultimately, a jury found him guilty on all counts. He was sentenced to 120 months’ imprisonment and ordered to forfeit $35.1 million.On appeal to the United States Court of Appeals for the Second Circuit, the defendant argued improper venue, breach of extradition agreement, erroneous exclusion of evidence, and that the forfeiture was an excessive fine under the Eighth Amendment. The Second Circuit held that the district court had not erred in any respect. Venue was proper, the extradition agreement was not breached, the evidentiary ruling was not an abuse of discretion, and the forfeiture was not grossly disproportionate to the offense. Accordingly, the judgment of conviction and forfeiture order were affirmed. View "USA v. NG CHONG HWA" on Justia Law

In October 2021, a Florida attorney, Ross, held a trust account at Regions Bank that received a $29.6 million wire transfer, the result of a business email compromise fraud perpetrated on a company called Phoenix. Most of the funds were rapidly transferred out of the account, with some recalled by the bank. Federal authorities seized approximately $4.9 million remaining or recovered from the account and initiated a civil forfeiture action, alleging the funds were proceeds of fraud or involved in money laundering.The United States District Court for the Northern District of New York oversaw the initial proceedings. Ross filed a verified claim to $1.21 million of the seized funds, asserting they were legitimate client funds or proceeds from his home sale, but made no claim to the remaining $3.69 million. Another claimant, Phoenix, also asserted interest in the $1.21 million. The district court entered default judgment forfeiting the unclaimed $3.69 million to the government, dismissed without prejudice the forfeiture proceedings as to the $1.21 million, and issued a certificate of reasonable cause for the seizure. It denied Ross’s subsequent motion for attorney fees, costs, and interest under CAFRA, finding he did not “substantially prevail,” and denied reconsideration.On appeal, the United States Court of Appeals for the Second Circuit held that Ross lacked standing to contest the forfeiture of the $3.69 million because he had not filed a claim as to those funds. The court rejected Ross’s due process challenge to the stay of proceedings, finding the delay reasonable, and upheld the denial of attorney fees, costs, and interest, concluding that dismissal without prejudice did not make Ross a prevailing party under CAFRA. The court also found no abuse of discretion in dismissing the forfeiture action without prejudice. However, the Second Circuit vacated the issuance of a certificate of reasonable cause, as no judgment for Ross had been entered. All other aspects of the district court’s judgments were affirmed. View "United States v. Ross" on Justia Law

A former high school principal alleged that, during her tenure at a small New York school district, she was subjected to gender-based hostility and was ultimately fired because of her sex. The principal, who began her role in 2014, reported to the district superintendent. She claimed the superintendent behaved in a demeaning and discriminatory manner towards her and other women, while treating male employees more favorably. In 2016, she was placed on administrative leave and then terminated. She filed complaints with state and federal agencies and then brought suit against the school district, the board of education, and the superintendent, alleging violations of Title VII and New York State Human Rights Law for discriminatory discharge and hostile work environment.The U.S. District Court for the Northern District of New York granted summary judgment to defendants on the principal’s equal protection claim but allowed her Title VII and state law claims to proceed to trial. After a six-day trial, a jury found in her favor, concluding her gender was a motivating factor in her termination and that she was subjected to a hostile work environment. The jury awarded her nearly half a million dollars in damages, including lost income. The district court denied defendants’ post-trial motions for judgment as a matter of law, a new trial, and reduction of damages.On appeal, the United States Court of Appeals for the Second Circuit reviewed whether the verdict was supported by sufficient evidence, whether lost-income damages were proper, and whether alleged trial errors—including a confusing comment by the district judge about New York law—necessitated a new trial. The Second Circuit held that the jury’s verdict was supported by substantial evidence, the damages award was proper, and any errors during trial did not render it unfair. The court affirmed the judgment of the district court. View "Krause v. Kelahan" on Justia Law

A former deputy executive director of a bi-state agency, the Port Authority of New York and New Jersey, was prosecuted in connection with the “Bridgegate” scandal. Although convicted, his convictions were ultimately vacated and the indictment dismissed. Having incurred approximately $4 million in legal expenses, he sought indemnification from the Port Authority under its bylaws, which provide for reimbursement of legal costs upon acquittal or dismissal of criminal charges, subject to certain notice and procedural requirements.After the Port Authority denied his request for indemnification, he commenced suit in New York state court. The Port Authority removed the case to the United States District Court for the Southern District of New York. There, the Port Authority argued that the court lacked subject matter jurisdiction because the plaintiff had not satisfied a condition precedent for suit—specifically, timely delivery of the judgment of acquittal per the bylaws—meaning that the necessary waiver of sovereign immunity had not occurred. The district court agreed, dismissing the case for lack of subject matter jurisdiction and subsequently denying leave to amend the complaint as futile, finding that the plaintiff had failed to plead compliance with the condition precedent.The United States Court of Appeals for the Second Circuit reviewed the dismissal. It held that the Port Authority does not possess state sovereign immunity from suit in federal court, as established by the Supreme Court in Hess v. Port Authority Trans-Hudson Corp., and therefore a failure to plead waiver of sovereign immunity does not deprive the federal court of subject matter jurisdiction. The court vacated the district court’s judgment and remanded for further proceedings, overruling prior circuit precedent to the contrary. The court also vacated the denial of leave to amend, clarifying that compliance with contractual or statutory conditions is an affirmative defense, not a jurisdictional prerequisite. View "Baroni v. Port Authority of New York and New Jersey" on Justia Law

Several nonprofit, faith-based organizations that provide pregnancy-related services and oppose abortion initiated an action against the New York State Attorney General. These organizations had made statements regarding abortion pill reversal (“APR”), a protocol intended to counteract the effects of medication-induced abortion. After the Attorney General commenced a civil enforcement action in New York state court against other entities (not parties to this case) for making similar APR-related statements, the plaintiffs alleged they faced a credible threat of sanctions if they continued such speech. As a result, they stopped making APR-related statements and sought declaratory and injunctive relief in federal court, arguing that the regulation of their APR-related speech violated their First and Fourteenth Amendment rights.The United States District Court for the Western District of New York addressed the Attorney General’s argument that the federal court should abstain under the Younger v. Harris doctrine due to the parallel state enforcement action. The district court found abstention unwarranted, noting the federal claims were not inextricably intertwined with the state action and would not interfere with it. On the merits, the district court determined that the plaintiffs were likely to succeed on their First Amendment claim because the APR-related speech was noncommercial, religiously and morally motivated, involved no financial benefit or remuneration, and did not directly offer APR but instead provided information and referrals. Since the Attorney General did not show the state’s restrictions would survive strict scrutiny, the district court granted a preliminary injunction.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s order. The Second Circuit held abstention under Younger was not required, as the plaintiffs’ claims were independent of the state enforcement action. The court found no abuse of discretion in the grant of the preliminary injunction, agreeing that the plaintiffs’ APR-related speech was noncommercial and protected, and the Attorney General failed to meet the strict scrutiny standard. View "Nat'l Inst. of Fam. & Life Advocs. v. James" on Justia Law

A neurologist submitted a Freedom of Information Act (FOIA) request to the United States Social Security Administration (SSA) seeking documents about how the SSA evaluates disability claims for migraines and other headache disorders. The SSA determined that this request was not directly related to the administration of any of its benefit programs. Relying on a provision in the Social Security Act (42 U.S.C. § 1306(c)), the SSA required the requester to pay the full cost of processing the request, which totaled $2,908. The requester paid the fee but later objected because the SSA did not respond within the statutory deadline set by FOIA.The United States District Court for the District of Vermont found in favor of the requester. The district court concluded that FOIA’s provision prohibiting fees when the agency fails to respond on time superseded the Social Security Act’s cost-reimbursement clause. As a result, the court ordered the SSA to refund the fee and awarded the requester attorneys’ fees and costs. The court reasoned that allowing the SSA to charge fees despite late responses would undermine the FOIA amendments designed to ensure agency timeliness.On appeal, the United States Court of Appeals for the Second Circuit considered whether the Social Security Act’s cost-reimbursement provision or FOIA’s fee-preclusion provision controlled. The Second Circuit held that the plain language of § 1306(c), which begins with a “notwithstanding” clause, explicitly exempts the SSA from FOIA’s fee rules for requests not directly related to program administration. The court agreed with the SSA’s determination that the request was not program-related and found the statute unambiguous. Therefore, the court reversed the district court’s judgment and vacated the award of attorneys’ fees and costs. View "Shapiro v. U.S. Soc. Sec. Admin." on Justia Law

A senior account manager at a telecommunications company was terminated after several major accounts she managed decided to discontinue the company’s services. In the months leading up to her termination, she took eight and a half days of paid leave to care for her ill daughter and mother. Her supervisor had expressed concerns about her performance, particularly with her newer accounts, but consistently granted all her leave requests without referencing the Family and Medical Leave Act (FMLA). Despite meeting some of her performance objectives, the loss of major accounts and her supervisor’s ongoing performance criticisms culminated in her dismissal.The United States District Court for the Southern District of New York granted summary judgment to the employer on the employee’s FMLA interference and retaliation claims. The district court found that the employee had not shown she was denied any FMLA benefits or that her termination was in retaliation for taking leave. The court also declined to exercise supplemental jurisdiction over her related claim under the New York City Human Rights Law (NYCHRL), dismissing it without prejudice.The United States Court of Appeals for the Second Circuit affirmed the district court’s judgment. The appellate court held that the employee did not establish an FMLA interference claim because her supervisor’s criticisms were unrelated to her leave requests, which were fully granted, and she was not prejudiced by the employer’s failure to provide FMLA notice. The court also held that the employee failed to show retaliation, as her termination was based on documented performance issues rather than the exercise of FMLA rights. Finally, the court upheld the district court’s decision to dismiss the NYCHRL claim without prejudice. View "Haran v. Orange Business Services, Inc." on Justia Law

The plaintiff, a former security guard, began experiencing panic attacks and anxiety, particularly when using public transportation, which ultimately led to the loss of his job. He was treated with medication, but continued to suffer from symptoms that interfered with his ability to work consistently. He applied for Supplemental Security Income and Social Security Disability Insurance, claiming disability from the time he was terminated due to his condition. The record included testimony from the plaintiff, a vocational expert, and five medical professionals, all of whom opined that he had at least moderate limitations in maintaining concentration, staying on task, and regular work attendance.After an initial denial by the Social Security Administration, the plaintiff requested a hearing before an Administrative Law Judge (ALJ). The ALJ found that the plaintiff had severe impairments but did not meet the criteria for a listed disability. Relying on some aspects of one consultative psychiatrist's opinion, and discounting others, the ALJ concluded that the plaintiff retained the residual functional capacity (RFC) to perform unskilled work in a goal-oriented setting, without finding any specific limitations on his ability to stay on task or maintain regular attendance. The vocational expert testified that an individual who was off task more than 10% of the workday or absent more than one day per month would be unable to maintain employment. The ALJ nonetheless found the plaintiff not disabled. The Appeals Council denied review, making the ALJ's decision final. The United States District Court for the Southern District of New York affirmed the denial.The United States Court of Appeals for the Second Circuit reviewed the administrative record de novo and concluded that the ALJ’s RFC finding was not supported by substantial evidence, particularly given the unanimous medical opinions regarding the plaintiff's limitations and the vocational expert’s testimony. The Second Circuit vacated the district court’s judgment and remanded the case to the Commissioner for further development of the record and reconsideration of the plaintiff’s application. View "Nunez v. Commissioner of Social Security" on Justia Law

A Guatemalan national sought protection in the United States under the Convention Against Torture (CAT), claiming a high risk of torture if returned to Guatemala. He had been a member of the MS-13 gang from a young age, receiving a distinctive tattoo. After deciding to leave the gang in his twenties, he was subjected to violent retribution, including beatings and shootings, and ultimately had a “greenlight” placed on him—signaling to gang members that they could harm or kill him. His attempts to distance himself from the gang led to further attacks, including by a police officer with alleged gang connections, after the petitioner became romantically involved with the officer’s partner. Fearing for his life, he fled Guatemala, encountered threats in Mexico, and eventually entered the United States. During removal proceedings, the U.S. government presented evidence of an outstanding Guatemalan arrest warrant against him.The Immigration Judge (IJ) conducted hearings, finding the petitioner and his witnesses credible but not persuasive due to inconsistencies and perceived speculation. The IJ determined there was insufficient evidence that MS-13 or others would target him upon return, or that the Guatemalan government would acquiesce to such harm. The IJ also noted harsh prison conditions and the likelihood of incarceration due to the warrant, but found these conditions resulted from neglect or lack of resources, not intentional government action or acquiescence. The Board of Immigration Appeals (BIA) affirmed the IJ’s denial of CAT protection, focusing on the absence of state action or intent to torture.The United States Court of Appeals for the Second Circuit reviewed both the IJ’s and BIA’s decisions. It held that the agency failed to properly consider whether the Guatemalan government would acquiesce to torture by private parties, such as gang members, in prison. The court granted the petition for review, vacated the agency’s decision, and remanded for further proceedings to address the proper legal standard regarding governmental acquiescence to likely torture in prison. View "B.G.S. v. Bondi" on Justia Law

A dispute arose between a manufacturer of construction equipment and its distributor over a 2012 distribution agreement. The distributor alleged that the manufacturer breached the agreement by selling covered equipment directly to third parties, bypassing the distributor. The manufacturer, in turn, counterclaimed that the distributor failed to pay amounts due under a 2016 rental agreement and for various purchases made between 2016 and 2017. Both parties sought damages and prejudgment interest related to their respective claims and counterclaims.The United States District Court for the Southern District of New York, after the completion of discovery, granted summary judgment for the distributor on liability for its breach-of-contract claim, leaving damages to be determined by a jury. The court also granted summary judgment for the manufacturer as to both liability and damages on its breach-of-contract counterclaim. A jury awarded the distributor substantial damages for the manufacturer’s breach. The district court denied the manufacturer’s post-trial motions for judgment as a matter of law and for a new trial or remittitur, and later awarded prejudgment interest to the distributor, despite the manufacturer’s objection that the request was untimely under Federal Rule of Civil Procedure 59(e).On appeal, the United States Court of Appeals for the Second Circuit addressed whether the distributor’s motion for prejudgment interest was timely. The court held that the initial judgment entered by the district court was not sufficiently final, as it omitted reference to the manufacturer’s successful counterclaim and the award of prejudgment interest. As a result, the 28-day deadline for a Rule 59(e) motion was not triggered until a later, comprehensive, final judgment was entered. The Second Circuit affirmed the district court’s award of prejudgment interest to the distributor. View "Alessi Equip., Inc. v. Am. Piledriving Equip., Inc." on Justia Law