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

Plaintiff sued defendant asserting claims of breach of contract and various business torts in connection with defendant's alleged wrongful termination of plaintiff's employment affiliation with defendant. Plaintiff appealed from summary judgment in favor of defendant on one of its counterclaims against plaintiff for nonrepayment of the outstanding balance of a loan for which he had given a promissory note. The court held that the district court's order of summary judgment was inappropriate and dismissed the appeal for lack of appellate jurisdiction where the determination that the promissory note was independent of the promises made by defendant in the Affiliation Agreements would involve consideration of defendant's promises underlying plaintiff's claims for breach of contract and wrongful termination and of the relationships among those promises. Therefore, the court would be required to consider many of the same issues that would need to be considered in any appeal from a final judgment adjudicating plaintiff's claims.

Plaintiffs, a father and his children, brought various claims under 42 U.S.C. 1983 asserting that a children's services caseworker entered their home unlawfully and effected an unconstitutional removal of the children into state custody. At issue was whether the district court properly concluded that the caseworker was entitled to qualified immunity with respect to all of the claims against him and granted summary judgment in his favor. The court held that the caseworker was not entitled to qualified immunity and vacated the district court's grant of summary judgment on plaintiff's claims for Fourth Amendment violations arising out of the allegedly unlawful search of plaintiffs' home; plaintiffs' claims for violations of procedural due process under the Fourteenth Amendment; the father's claim for violation of substantive due process under the Fourteenth Amendment; and the children's claim for unlawful seizure under the Fourth Amendment. Accordingly, the court remanded for further proceedings.

Plaintiff, a federal safety inspector, sued defendant in New York Supreme Court, alleging that defendant used photographs of plaintiff for advertising purposes without his consent in violation of New York State Civil Rights Law 50 and 51. Defendant filed a notice of removal asserting federal subject-matter jurisdiction on the basis of its third-party claims and plaintiff moved to remand the case back to state court. At issue was whether the district court properly determined that plaintiff's complaint contained no federal claim and therefore, the district court lacked subject matter jurisdiction over the case and remanded back to state court. The court held that, because the district court's decision to remand the case rested on its determination that it was without subject matter jurisdiction, the court lacked appellate jurisdiction to review it. The court held, however, that it did possess appellate jurisdiction to review the district court's award of attorney's fees and costs pursuant to 28 U.S.C. 1447(c). Accordingly, the court held that the district court did not abuse its discretion in determining that defendant's purported basis for removal was objectively unreasonable and therefore, the modest size of the award of attorney's fees and costs was not an abuse of discretion.

Defendants entered a plea of guilty to conspiracy to commit securities fraud, based on trading on material, nonpublic information and tipping others. The SEC instituted a civil enforcement action, alleging that defendants violated section 10(b) of the Exchange Act and Rule 10b-5 and section 17(a) of the Securities Act of 1933 by engaging in insider trading. The district court imposed civil penalties under section 21(d)(3) of the Exchange Act, 15 U.S.C. 78u(d)(3): a penalty of $600,000 on one defendant for five violations and a penalty of $120,000 on another for two tips The Second Circuit vacated in part, holding that civil monetary penalties for insider trading are not available under section 21(d)(3). The section refers to penalties for violations, "other than by committing a violation subject to a penalty pursuant to section 78u-1;" the referenced section states that penalties shall not exceed three times profit gained or loss avoided. The court held that 21(d)(3) is intended to deal with violations other than insider trading. Although the defendants did not make a profit or avoid a loss and were not penalized under 78u-1, they committed insider trading and are "subject to" penalty even if the penalty was not assessed.

Petitioner sought review of a final order of removal, issued after a determination that he was ineligible for a "hardship waiver" of the requirements for filing a joint petition with his citizen spouse to lift the conditions on his residency. At issue was whether the agency erred as a matter of law by placing upon petitioner the burden of establishing that his qualifying marriage was entered into in good faith; whether the wrong standard was applied for assessing eligibility for a hardship waiver; and whether an erroneous assessment was made in weighing the evidence. The court held that the allocation of the burden of proof was proper where it was consistent with the applicable statutory structure and intent; that the agency articulated the proper legal standard for demonstrating a good faith marriage where the immigration judge's consideration of the course of the relationship after the wedding, in order to ascertain an alien's intent at the time he entered his marriage, was entitled to deference; and that the agency properly determined that petitioner was ineligible for the relief he sought where the amount of weight to be accorded any particular fact raised no question of law and was not within the court's jurisdiction to review the agency's determination. Accordingly, the petition for review was denied.

Petitioner sought a writ of habeas corpus to overturn his conviction on one count of felony murder in the second degree for a street robbery that resulted in the death of a young doctor and soon-to-be father. Petitioner, whose first trial on these charges resulted in a hung jury, principally challenged admission at his second trial of the transcript and testimony offered by a State witness at the first trial without informing the jury that the witness had, since the first trial, "recanted." The court held that, because the claim was not properly raised and preserved before the trial court and was therefore procedurally defaulted under New York state law, the district court's grant of the habeas corpus petition was reversed and remanded for further proceedings.

Petitioner applied for leave to file a successive 28 U.S.C. 2255 motion, challenging his 2006 murder-for-hire conviction and resulting sentence. At issue was whether a movant's prior unsuccessful motion under section 2255 seeking reinstatement of his right to direct appeal rendered a subsequent section 2255 motion challenging his conviction or sentence "successive" under the Antiterrorism and Effective Death Penalty Act ("AEDPA"), 28 U.S.C. 2255. The court held that, because a prior unsuccessful section 2255 motion was filed for the purpose of obtaining a direct appeal, and did not directly attack his conviction or sentence, the section 2255 motion that petitioner now wished to filed was not "successive" within the meaning of section 2255(h). Therefore, the court denied his motion as unnecessary and transfered the matter to the district court.

Defendant, subject to delinquency and default penalties under 18 U.S.C. 3612(g) for failure to pay restitution and a fine arising from his criminal conviction, appealed a district court order denying his request that the district court waive or reduce such penalties. At issue was whether the district court erred by finding that it lacked the authority under section 3612 to waive all or part of defendant's delinquency and default penalties. The court held that the district court correctly interpreted section 3612(h) as authorizing only the Attorney General, in its discretion, to waive all or part of delinquency and default penalties properly assessed pursuant to section 3612(g). Therefore, the district court properly denied defendant's motion for waiver of his delinquency and default penalties.

Defendant appealed from two judgments of conviction related to his involvement in "pump and dump" stock schemes. At issue was whether the first judgment of conviction, entered upon a jury verdict, should be overturned, either because the evidence was insufficient to permit a jury to find a fiduciary duty, or because the jury was improperly instructed about how to determine the existence of a fiduciary duty. Also at issue was whether the second judgment of conviction should be overturned because defendant's guilty plea, entered after his conviction in the first trial, was premised on the outcome of that trial. The court held that, upon reviewing the jury instructions for plain error and taking the evidence in the light most favorable to the Government, the jury was entitled to find that the brokers in this case had a duty to disclose their exorbitant commissions, just as they had a duty to refrain from making affirmative misrepresentations regarding the size of their commissions, and thus, the district court properly instructed the jury on the elements of that duty. The court also held that, because it found no principled basis on which to distinguish this case from United States v. Szur, the court concluded that there was no error in the charge, and affirmed defendant's first conviction. Therefore, the court's conclusion necessarily defeated defendant's argument challenging his subsequent guilty plea and the second judgment of conviction was also affirmed.

Plaintiffs sued defendants, former directors of a retirees association of former unionized transportation workers, alleging, among other things, that defendants breached their fiduciary duty to the retirees association and its members by buying and maintaining a health insurance policy with premiums that far outstripped the benefits received by members. When defendants prevailed on all counts, defendants appealed the district court's denial of their fees motion. At issue was whether the district court erred in denying the fees motion in light of the recent Supreme Court decision, Hardt v. Reliance Standard Life Insurance Co. The court affirmed and held that the district court did not abuse its discretion in denying fees where, although the district court did not have the benefit of Hardt in reaching its decision, nothing in the district court's opinion contradicted Hardt or suggested that the district court would have decided the matter differently in light of Hardt. Accordingly, Hardt did not require the court to reverse or remand. The court also held that, when determining whether attorney's fees should be awarded to defendants, the court focused on whether plaintiffs brought the complaint in good faith.