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

In 2016, Venezuela’s state-owned oil company, PDVSA, initiated a bond exchange offer allowing holders of unsecured notes due in 2017 to swap them for new, secured notes due in 2020. As collateral, PDVSA pledged a controlling interest in CITGO Holding, Inc., a major U.S.-based subsidiary. About 39% of the 2017 noteholders participated. PDVSA defaulted on the 2020 notes in October 2019, raising the risk that creditors could seize the CITGO collateral. This took place during significant political upheaval in Venezuela, including disputes over the country’s legitimate government and control of PDVSA.The PDV Entities filed suit in the United States District Court for the Southern District of New York, seeking to declare the bond exchange and related agreements void and unenforceable. They argued that Venezuelan law, specifically Article 150 of the Venezuelan Constitution, required National Assembly approval for such a transaction, which was not obtained. They also asserted that resolutions from the Venezuelan National Assembly in 2016 and 2019 invalidated the transaction as acts of state. The district court initially ruled for Defendants, holding that New York law applied and that the act-of-state doctrine did not bar enforcement. On appeal, the United States Court of Appeals for the Second Circuit certified questions to the New York Court of Appeals, which held that Venezuelan law governs the validity of the notes.Upon remand, the district court concluded that the bond exchange did not violate Venezuelan law because only contracts executed by the Republic or its organs—not state-owned enterprises like PDVSA—are subject to the National Assembly approval requirement under Article 150. The district court also reaffirmed that the act-of-state doctrine did not apply due to the extraterritorial nature of the transaction. On further appeal, the United States Court of Appeals for the Second Circuit affirmed. The court held that National Assembly approval was not required, the governing documents were valid under Venezuelan law, and the act-of-state doctrine did not bar enforcement. View "leos v. MUFG" on Justia Law

A former police officer alleged that he experienced discrimination while employed by a municipal police department, culminating in his termination. The officer identified as Hispanic due to his Ecuadorian heritage and pointed to comments made by a superior several years prior, which he asserted reflected animus based on his background. Over the course of his employment, the officer was subject to multiple disciplinary actions, including remedial training, negative performance reviews, and investigations for failing to properly search arrestees. He was ultimately terminated after a hearing found repeated rule violations and dishonesty during official proceedings.After his termination, the officer filed a complaint in the United States District Court for the Southern District of New York, asserting, among other claims, discrimination based on national origin under 42 U.S.C. § 1983 and the New York State Human Rights Law. The court granted summary judgment to the defendants, finding that the officer failed to establish a prima facie case of discrimination, as he did not provide evidence that his superiors were aware of his Hispanic background or that the adverse employment actions were motivated by discriminatory intent. The court also determined that the municipality had legitimate, non-discriminatory reasons for the termination and that the officer failed to show pretext.On appeal, the United States Court of Appeals for the Second Circuit reviewed only the discrimination claims under Section 1983 and the NYSHRL regarding the officer’s termination. The appellate court affirmed the district court’s decision, holding that the officer failed to provide non-speculative evidence that the defendants knew of his Hispanic national origin or that his termination was the result of discrimination. The court concluded that the employer’s stated reasons for termination were legitimate and not a pretext for discrimination. View "Barberan v. Town of Eastchester" on Justia Law

James Seabrook was arrested in May 2016 and spent more than seven and a half years in pre-trial detention. In April 2019, he was convicted of criminal possession of a weapon, but juries hung on more serious charges during subsequent retrials, and Seabrook was ultimately acquitted of those charges in December 2023. On January 31, 2024, Seabrook was sentenced to an indeterminate term of three and a half to seven years for the 2019 conviction. All parties recognized at sentencing that he had already served more time than the maximum sentence, yet he was remanded to Rikers Island, where he remained for seventeen days pending transfer from the New York City Department of Correction to the New York State Department of Corrections and Community Supervision, before his release.Seabrook filed suit in the United States District Court for the Southern District of New York, alleging violations of the Eighth and Fourteenth Amendments under 42 U.S.C. § 1983, naming the City of New York and various DOC officials. The district court dismissed his claims, holding that the complaint did not adequately allege deliberate indifference by any individual defendant, nor the existence of a City policy or practice causing his over-detention. The court also found no deprivation of a cognizable liberty interest or lack of procedural protections sufficient to sustain the due process claim.The United States Court of Appeals for the Second Circuit reviewed the case and held that Seabrook had plausibly alleged both an unconstitutional City policy or practice causing his excessive detention and deliberate indifference by DOC Captain Monastero. The Court further determined that Seabrook's procedural due process claim was sufficiently pleaded, given the absence of adequate processes to prevent over-detention. The Second Circuit vacated the district court's dismissal and remanded for further proceedings. View "Seabrook v. City of New York" on Justia Law

The plaintiff worked as a store clerk and stocker at grocery stores operated by the defendant. She was scheduled for ten-hour opening shifts, four days a week, at an hourly wage. The employer required her and other similarly situated employees to report to work fifteen minutes before their listed start time. Frequently, when employees arrived at the prescribed time, the stores were locked and they had to wait outside until opening managers arrived to let them in. Managers often did not arrive until the scheduled start, preventing employees from clocking in and being paid for the waiting period, despite being required to be present. The plaintiff alleges that this unpaid waiting time occurred about once a week, sometimes resulting in overtime wages owed.The plaintiff sued in the United States District Court for the Eastern District of New York alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), seeking to represent similarly situated employees. The defendant moved to dismiss, asserting that the Portal-to-Portal Act barred the claims because the waiting time was non-compensable as a preliminary activity. The district court agreed, holding that both the FLSA and NYLL claims were barred and dismissing them with prejudice.The United States Court of Appeals for the Second Circuit reviewed the case de novo. It held that under Department of Labor regulations and Supreme Court precedents, waiting time is compensable under the FLSA when an employer requires an employee to report at a certain time and the employee is prevented from working for reasons beyond their control. The court concluded that the plaintiff stated a plausible claim for compensable waiting time and that the claim could not be dismissed as de minimis based on the pleadings. Accordingly, the Second Circuit vacated the district court’s dismissal and remanded for further proceedings. View "Santos v. Lidl" on Justia Law

Melissa McClain pleaded guilty to kidnapping conspiracy in federal court after participating in a scheme to abduct two elderly victims in New York, intending to exchange them for another person as part of a drug-related bounty. McClain and her co-conspirators transported the victims across the Canadian border and held them captive, but law enforcement ultimately intervened and rescued the victims. As part of the sentencing process, McClain and her counsel emphasized her longstanding substance abuse and mental health issues, requesting that any period of supervised release include intensive treatment and rehabilitation conditions.The United States District Court for the Northern District of New York sentenced McClain to 188 months in prison and three years of supervised release, imposing standard conditions as set forth in a general order of the district, and three special conditions related to mental health and substance abuse treatment. McClain did not object to the supervised release conditions at sentencing. After judgment, McClain appealed, arguing the district court erred by not reading all standard conditions aloud and by failing to provide specific reasons for imposing each standard and special condition.The United States Court of Appeals for the Second Circuit reviewed McClain’s claims under an abuse-of-discretion standard. The court held that an oral reference to the district court’s general order sufficiently satisfies the requirement to pronounce sentence, as established in United States v. Matos. It further held that district courts are not required to provide individualized explanations for each standard condition listed in the Sentencing Guidelines. The reason for imposing the search condition was self-evident from the record. Challenges to the special conditions were waived, as McClain herself requested them at sentencing. The Second Circuit affirmed the district court’s judgment. View "United States v. McClain" on Justia Law

A group of utility customers in Texas and California paid interest on bonds issued by their utility companies, which were intended to finance recovery after winter storms and wildfires. These bonds, known as recovery bonds, were subject to approval by state public utility commissions in Texas and California. Plaintiffs alleged that Bloomberg, L.P. and Bloomberg Index Services, Ltd. unlawfully reclassified these bonds from corporate bonds to asset-backed securities, resulting in higher interest rates that were ultimately paid by the utility customers.After the utilities submitted applications and detailed bond terms, including interest rates, to the state public utility commissions, the commissions retained authority to approve or reject the bonds. The commissions received notice of Bloomberg’s reclassification and the associated interest rates, but permitted the issuance of the bonds. Plaintiffs filed a class action in the United States District Court for the Southern District of New York, claiming that Bloomberg’s actions led to inflated rates. The district court dismissed the case, finding that the filed rate doctrine barred the claims, since the challenged rates were filed with and approved by the relevant state regulators.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s dismissal de novo. The appellate court held that the filed rate doctrine barred the plaintiffs’ claims. It explained that the regulatory process provided sufficient safeguards, as the state commissions had notice of the reclassification and still allowed the bonds to be issued. The court found that plaintiffs had forfeited any argument that the federal filed rate doctrine could not bar state-law claims and further concluded that, under controlling circuit precedent, the doctrine applied. The Second Circuit affirmed the district court’s dismissal of the action with prejudice. View "Skolarus v. Bloomberg, L.P." on Justia Law

Federal agents suspected that an individual was using his auto garage as a front for narcotics distribution. After two controlled purchases of cocaine and ongoing surveillance, agents obtained a warrant to search his house and the surrounding grounds for evidence of drug crimes. The warrant did not specifically list vehicles among the items to be seized. Upon executing the warrant, agents found a blue minivan and a red truck parked in the driveway. Although a search of the vehicles initially revealed no contraband, the agents seized them for civil asset forfeiture, believing the minivan was used to facilitate drug sales and the truck was purchased with drug proceeds. Later, after receiving a tip, agents obtained a separate warrant to search the minivan and discovered cocaine and a firearm hidden in a secret compartment.The United States District Court for the District of Connecticut denied the defendant’s motion to suppress the evidence found in the minivan. The court reasoned that, under Florida v. White, law enforcement does not need a warrant to seize forfeitable vehicles from places where officers are lawfully present, even private driveways. The defendant subsequently pleaded guilty while preserving his right to appeal the suppression ruling.The United States Court of Appeals for the Second Circuit reviewed the case. The Court held that the warrantless seizure of the minivan from the private driveway was reasonable under the Fourth Amendment since the agents had a warrant authorizing them to be present on the property and search its grounds. The Court explained that such a seizure did not constitute an invasion of privacy. The Court distinguished this case from United States v. Lasanta, finding Lasanta inapposite because the agents here had a search warrant for the property, unlike in Lasanta. The judgment of the district court was affirmed. View "United States v. Acevedo" on Justia Law

The plaintiff in this case began working for a law firm in 2017 and, in February 2018, signed an arbitration agreement covering most employment-related disputes. Over several years, she rose through the ranks and contributed to the creation of a legal tech company, earning a substantial award of stock options. By August 2023, those options had fully vested, and she communicated her intention to exercise them. Shortly thereafter, in February 2024, she was terminated without warning, despite prior positive performance reviews. In addition to her claims regarding unlawful termination and deprivation of stock options, she alleged that she experienced ongoing sexual harassment from her supervisors, including inappropriate comments and conduct.Prior to this case, the defendants filed a declaratory judgment action in the United States District Court for the Northern District of Texas seeking confirmation of her termination for cause, and later attempted to compel arbitration. That Texas action was stayed after the plaintiff filed suit in the United States District Court for the Southern District of New York. Her complaint included claims for sexual harassment under state and city law, as well as non-harassment claims, such as breach of contract and conversion. The defendants moved to compel arbitration, dismiss, or transfer the case. The district court denied the motion to compel arbitration, holding that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) allowed the entire lawsuit to proceed in court, not just the sexual harassment claims. Some claims and parties were dismissed for failure to state a claim, but the key harassment and conversion claims remained.The United States Court of Appeals for the Second Circuit reviewed the district court’s denial of arbitration de novo. It held that, when properly invoked, the EFAA permits a plaintiff to invalidate a predispute arbitration agreement for the entire lawsuit, not only for claims directly relating to sexual harassment or assault. The Second Circuit affirmed the district court’s order and remanded the case for further proceedings. View "Diaz-Roa v. Hermes Law" on Justia Law

The case involves a defendant who, after pleading guilty to conspiring to provide material support to ISIS, was released on bail but later violated release conditions, including absconding from supervision and failing to appear at a court-ordered status conference. Her conduct included removing an electronic monitoring device and attempting to flee, resulting in her rearrest. She later entered into a plea agreement, waiving indictment and pleading guilty to failure to appear under 18 U.S.C. § 3146, as well as agreeing to an enhancement under 18 U.S.C. § 3147 for committing the offense while on release. In exchange for her plea, the government agreed not to pursue additional charges carrying potentially higher penalties.After her guilty plea but before sentencing, the defendant moved to withdraw her plea, arguing her conduct did not fall within the scope of § 3146 because she was not released under the Bail Reform Act. The United States District Court for the Eastern District of New York denied her motion, finding a factual basis for her plea, rejecting her arguments, and sentencing her to 230 months’ imprisonment, including consecutive sentences for failure to appear and the § 3147 enhancement.On appeal to the United States Court of Appeals for the Second Circuit, the defendant argued the district court erred in denying her plea withdrawal and that applying the § 3147 enhancement violated the Double Jeopardy Clause. The Second Circuit held that the defendant’s appellate waiver, which expressly foreclosed challenges that her conduct was outside the statute’s scope, barred her first claim. The court further held that applying the § 3147 enhancement to a § 3146 conviction does not violate the Double Jeopardy Clause, as Congress clearly intended cumulative punishments. The Second Circuit therefore dismissed the appeal in part and otherwise affirmed the district court’s judgment. View "United States v. Ceasar" on Justia Law

A fraudulent investment scheme orchestrated by Martin Silver and a co-conspirator caused millions of dollars in losses to several entities, including two investment funds and a bank. Silver, who was a managing partner at an investment advisory firm, pled guilty to conspiracy and substantive counts of wire and securities fraud. As part of his sentence, the United States District Court for the Southern District of New York ordered him to pay over $300 million in restitution, specifying a $40,000 lump-sum payment before incarceration and subsequent monthly payments equal to 10% of his income after release. At sentencing, Silver reported significant assets, which later increased in value post-release, although his income remained small.After his release, Silver made only minimal payments as required by the restitution schedule. The government, supported by the victims, moved in the district court to compel immediate turnover of Silver’s appreciated assets for restitution and to modify his payment schedule. The district court ordered Silver to liquidate and pay the appreciated value of his assets but declined to order turnover of the full asset value or further modify the payment schedule, reasoning that the statutory requirements for such modifications were not met.The petitioners sought review in the United States Court of Appeals for the Second Circuit under the Crime Victims’ Rights Act, arguing that the district court should have ordered turnover of all of Silver’s assets. The Second Circuit held that under the Mandatory Victims Restitution Act, where a restitution judgment does not make payment due immediately and includes a fixed payment schedule, and the defendant is in compliance, the government is not entitled to enforce a turnover order for assets beyond the payment schedule. As a result, the court denied the petition for a writ of mandamus, affirming the district court’s decision. View "In re: IIG Structured Trade Fin. Fund, Ltd." on Justia Law