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

Defendants held ASI notes that could be converted into shares of stock at either a pre-set price-per-share or a floating price that depended on share price over a defined period prior to conversion. A note was converted into shares, all of which were sold in the week following conversion. ASI, seeking to recoup the profits earned on the sale, sued under the Securities Exchange Act, 15 U.S.C. 78p(b), which prohibits statutory insiders such as defendant from profiting on the trade of securities on a short-swing basis. The district court found defendants liable for profits of $4,965,898.95 earned in short-swing insider trading. The Second Circuit affirmed. Rejecting an argument that the relevant transactions were not “purchases” of securities for purposes of the act, but were within the scope of the “debt” and “borderline transaction” exceptions to liability, and that the scope of any liability found should be limited to defendant Cannell’s pecuniary interest in the profits at issue. View "Analytical Surveys, Inc. v. Tonga Partners, L.P.," on Justia Law

Zaleski was convicted of possessing machine guns, 18 U.S.C. 922(o), 924(a)(2); possessing a firearm with an obliterated serial number, 18 U.S.C. 922(k), 924(a)(1)(B); and possessing firearms, silencers, and destructive devices not registered to him, 26 U.S.C. 5841, 5861(d), and 5871. The district court imposed a 101-month sentence and ordered forfeiture of machine guns and pistols, a shotgun, homemade silencers, hand grenades, and improvised explosive devices, all unlawfully in his possession. Weapons Zaleski lawfully possessed remained in government custody while the government sought an order (All Writs Act, 28 U.S.C. 1651(a)), authorizing it to destroy them. Zaleski estimates the value of non-forfeited weapons at $100,000, including guns, 65,000 rounds of ammunition, body armor, grenades, a grenade launcher, explosive chemicals, and materials for pipe bombs. As a convicted felon, Zaleski was prohibited under 18 U.S.C. 922(g) from possessing the items; he sought to have the weapons transferred to a dealer for sale. The court determined that the government did not need the requested order, that the proposed sale arrangement would violate 18 U.S.C. 922(g)(1), and that appraisal would be useless because the doctrine of sovereign immunity bars claims for damages. The Second Circuit vacated in part; 922(g) does not categorically prohibit the proposed sale arrangement. View "United States v. Zaleski" on Justia Law

U.S. Immigration and Customs Enforcement obtained a report from German federal police indicating that the user of a particular IP address had child pornography on their computer. American officials traced the IP address, obtained the name and address of the customer whose account was associated with the address, verified the address (but not the apartment number) with post office and drivers’ records, and obtained a warrant. Neither the warrant nor any accompanying information mentioned Voustianiouk’s name. About a week later, agents arrived at the building and rang both buzzers because neither was marked. They saw a light from the second floor; a man came to the front door and confirmed that he was Voustianiouk. Officials did not explain that the warrant did not mention Voustianiouk’s name or that it clearly referred to the downstairs apartment, not the second floor. Officials discovered thousands of files containing child pornography on Voustianiouk’s computers. He admitted to viewing child pornography for more than one year. The district court imposed a five-year sentence. The Second Circuit vacated the conviction, holding that the search violated the Fourth Amendment and that the government should have been prohibited from introducing evidence seized as a result of that search. View "United States v. Voustianiouk" on Justia Law

Plaintiffs, “captains” in defendants’ wholesale food warehouse, sought unpaid overtime wages, liquidated damages, and attorneys’ fees and costs, under the Fair Labor Standards Act 29 U.S.C. 207(a)(1), 216(b) and an analogous section of New York Labor Law. The district court granted summary judgment for defendants on all claims on the ground that plaintiffs are “executives” exempt from the overtime pay provisions The Second Circuit affirmed. The only disputed criterion was whether the teams of employees that plaintiffs supervise constitute “customarily recognized department[s] or subdivision[s],” of the company, defined by Department of Labor regulations as units with “a permanent status and a continuing function.” The court acknowledged that a warehouse worker who earns $700 per week ensuring that vegetables and other foodstuffs are loaded onto the correct delivery trucks and who lacks an office, a cubicle, or even a chair, to call his own does not fit the popular image of a “bona fide executive,” but concluded that plaintiffs fit the DOL definition. View "Ramos v. Baldor Specialty Foods, Inc." on Justia Law

In 1986, minority inmates commenced a class action, alleging racial discrimination in housing, job assignment, and discipline. The trial judge found a “pattern of racism” and, in 1993, issued a decision requiring that the percentage of minority inmates in “preferred” jobs, including jobs in the print shop, correspond to the percentage of minority inmates in the general prison population. In 1999, plaintiffs, inmates formerly employed in the print shop, filed complaints alleging racial discrimination by civilian supervisors and prison administrators. After four years of discovery, plaintiffs sought to file an amended class action complaint. In addition to claims under 42 U.S.C. 1981, 1983, 1985, and 1986, the complaint claimed violations of the earlier order, and the state Human Rights Law and constitution. Plaintiffs contended that the pattern-or-practice method of proof used in Title VII class actions could be employed against individual defendants. The court denied class certification and leave to amend and analyzed plaintiffs’ individual complaints under the McDonnell Douglas burden-shifting framework generally employed in assessing individual disparate treatment claims under Title VI and granted defendants summary judgment on individual claims. The Second Circuit affirmed; the pattern-or-practice framework is ill-suited to establish liability of individual defendants named in the proposed amended complaint. View "Reynolds v. Barrett" on Justia Law

In 1987, Cassesse was convicted of conspiracy to distribute heroin and sentenced to five years’ probation. In 1991, he was convicted of possession with intent to distribute more than 500 grams of heroin and sentenced to 87 months with a consecutive term of 87 months for violating probation, and a lifetime term of supervised release, 21 U.S.C. 841(b)(1)(B) (1991). While under supervised release, he was indicted for racketeering, 18 U.S.C. 1962. Following his guilty plea, the district court sentenced Cassesse to 90 months of imprisonment and three years of supervised release. Cassesse pled guilty to the supervised release violation in exchange for a recommendation that any additional term be served concurrently. The court rejected the recommendation, imposing a sentence of 12 months of imprisonment for the supervised release violation to run consecutively to the 90 month term. Having revoked lifetime supervised release for the narcotics violation, the court then imposed a new lifetime term of supervised release. The Second Circuit affirmed. The court was not required to deal with “the almost metaphysical issue” of how a lifetime term of supervised release, imposed for a supervised release violation, should be reduced by the number of months of a prison term imposed for the violation. View "United States v. Martini" on Justia Law

In 2009, the Board of Health of the City of New York adopted a resolution requiring all tobacco retailers to display signs bearing graphic images showing certain adverse health effects of smoking. The district court held that the resolution is preempted by federal labeling laws. The Second Circuit affirmed, citing the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. 1331-41, a comprehensive program to deal with cigarette labeling and advertising, which includes a preemption provision, limiting the extent to which states may regulate the labeling, advertising, and promotion of cigarettes. View "23-34 94th St. Grocery Corp. v. NY City Bd. of Health" on Justia Law

Plaintiffs, 11 Asian-Americans currently or formerly Port Authority police officers, sued under Title VII of the Civil Rights Act, 42 U.S.C. 2000e, alleging that they were passed over for promotions because of race. The plaintiffs asserted: individual disparate treatment, pattern-or-practice disparate treatment, and disparate impact. A jury found liability for discrimination against seven plaintiffs and awarded back pay and compensatory damages. The district court also granted prevailing plaintiffs retroactive promotions, seniority benefits, and salary and pension adjustments corresponding with hypothetical promotion dates. The Second Circuit affirmed in part. With regard to individual disparate treatment allegations, the district court properly admitted background evidence predating onset of the limitations period; there was sufficient evidence to conclude that the Port Authority discriminated within the limitations period. The district court erred in: submitting the pattern-or-practice disparate treatment theory to the jury in a private, nonclass action and concluding that the “continuing violation” doctrine applied to the disparate impact theory so that the jury could award back pay and compensatory damages for harms predating the statute of limitations. The court remanded for reconsideration of damages and equitable relief to the extent that relief was premised on failures to promote outside the limitations period. View "Port Auth. Police Asian Jade Soc'y v. The Port Auth. of NY & NJ" on Justia Law

Plaintiffs are non-immigrant aliens, authorized by the federal government to reside and work as pharmacists in the U.S. All reside in New York and are licensed pharmacists there pursuant to a statutory waiver to New York Education Law 6805(1)(6)’s requirement that only U.S. citizens or Legal Permanent Residents are eligible to obtain a pharmacist’s license in New York. The waiver provision was set to expire in 2009. The district court permanently enjoined the state from enforcing the law. The Second Circuit affirmed. A state statute that discriminates against aliens who have been lawfully admitted to reside and work in the United States should be viewed in the same light under the Equal Protection Clause as one which discriminates against aliens who enjoy the right to reside here permanently. Applying strict scrutiny and finding, as the state conceded, that there are no compelling reasons for the statute’s discrimination based on alienage, the court found the statute unconstitutional. View "Paidi v. Mill" on Justia Law

RTI owns patents relating to the automatic routing of telephone calls based upon cost. Aware of infringement by Speakeasy, a telecommunications company, RTI offered to release Speakeasy from liability in exchange for a one-time payment under RTI’s tiered pricing structure. In 2007, the companies entered a “Covenant Not to Sue” with a payment of $475,000 to RTI, and a provision barring Speakeasy from challenging, or assisting others in challenging, the validity of the patents. The agreement defined “Speakeasy” to include both Speakeasy and Best Buy, which had previously announced plans to acquire Speakeasy. Three years later, Best Buy announced a plan to sell Speakeasy and merge it into Covad. RTI again learned of an infringement and notified Covad. Covad sought a declaratory judgment that the patents were invalid. The action was later dismissed voluntarily. RTI initiated the present lawsuit. The district court dismissed, holding that the doctrine of licensee estoppel, under which a licensee of intellectual property “effectively recognizes the validity of that property and is estopped from contesting its validity,” is unenforceable in the context of challenges to patents, and that the no-challenge clause was contrary to the public interest in litigating the validity of patents. The Second Circuit affirmed. View "Rates Tech. Inc. v. Speakeasy, Inc." on Justia Law