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

Defendants appealed their convictions for securities fraud in violation of sections 10(b) and 32 of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), 78ff; Securities and Exchange Commission (SEC) Rules 10b-5 and 10b5-2, 17 C.F.R. 240.10b-5, 240.10b5-2, and 18 U.S.C. 2; and conspiracy to commit securities fraud in violation of 18 U.S.C. 371. The court concluded that, in order to sustain a conviction for insider trading, the Government must prove beyond a reasonable doubt that the tippee knew that an insider disclosed confidential information and that he did so in exchange for a personal benefit; the court held that the evidence was insufficient to sustain a guilty verdict against defendants because the Government's evidence of any personal benefit received by the alleged insiders was insufficient to establish the tipper liability from which defendants' purported tippee liability would derive, and even assuming that the scant evidence offered was sufficient, the Government presented no evidence that defendant knew that they were trading on information obtained from insiders in violation of those insiders' fiduciary duties; and, therefore, the court reversed and remanded with instructions to dismiss the indictment. View "United States v. Newman" on Justia Law

The Trustee for the Bernard L. Madoff Investment Securities LLC (BLMIS) under the Securities Investor Protection Act (SIPA), 15 U.S.C. 78aaa et seq., filed suit against hundreds of BLMIS customers who withdrew more from their accounts than they had invested and profited from Madoff's scheme. Defendants moved to dismiss the actions on the ground that the payments received by BLMIS customers were securities-related payments that cannot be avoided under 11 U.S.C. 546(e). Section 546(e) establishes an important exception to a trustee's clawback powers and provides that certain securities-related payments, such as transfers made by a stockbroker in connection with a securities contract, or settlement payments cannot be avoided in bankruptcy. The court affirmed the district court's conclusion that the payments were shielded by section 546(e) and dismissal of the relevant claims under Rule 12(b)(6). View "In re: Bernard L. Madoff Investment Securities LLC" on Justia Law

Plaintiffs filed suit against defendants under, inter alia, the Alien Tort Statute (ATS), 28 U.S.C. 1350, alleging that defendants took plaintiffs away from their families as children, falsely told them that their parents had died or abandoned them, and transported them to Australia. Plaintiffs' claims stem from an alleged "child migration" program undertaken after World War II as a part of a scheme to populate Australia with "pure white stock" from Britain and "working boys" from Malta. Plaintiffs and other children were made to work essentially as slaves for long hours without pay and were subject to extreme physical and, in some cases, sexual abuse. In light of Kiobel v. Royal Dutch Petroleum Co., the court held that plaintiffs' claims under the ATS for violations of international law that occurred in Australia, except for human trafficking, must be dismissed as extraterritorial applications of the ATS. As for the human trafficking claim, plaintiffs' claim is barred by the statute of limitations. The court rejected plaintiffs' remaining arguments and affirmed the district court's dismissal of the complaint. View "Ellul v. Christian Brothers" on Justia Law

After losing his property in a state foreclosure action, plaintiff filed suit against Accredited and Deutsche Bank for fraud, negligent misrepresentation, unjust enrichment, violations of the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq., violations of Connecticut's truth in lending law, and violations of the Connecticut Unfair Trade Practices Act (CUTPA), Conn. Gen. Stat. 42-110a et seq., as well as perjury, forgery, and predatory lending. The court concluded that the district court lacks jurisdiction over certain of plaintiff's fraud claims under the Rooker-Feldman doctrine; however, after determining that it lacked jurisdiction, the district court should have remanded the barred claims to state court instead of dismissing them on the merits; and, therefore, the court vacated the judgment as to those claims so they may be remanded to the state court. To the extent that petitioner asserted fraud claims that are not barred by Rooker-Feldman, the court affirmed the district court's dismissal of the claims as untimely and barred by collateral estoppel because plaintiff has not challenged those rulings on appeal. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Vossbrinck v. Deutsche Bank National Trust Co." on Justia Law

Defendant plead guilty to failing to register as a sex offender and possession of stolen firearms. On appeal, defendant challenged his sentence, contending that the district court erroneously applied an enhancement under U.S.S.G. 2K2.1. The court vacated the judgment and remanded for resentencing, concluding that defendant's conviction for statutory rape under New York Penal Law 130.40-2 was not categorically a "crime of violence" under U.S.S.G. 4B1.2. View "United States v. Van Mead" on Justia Law

Petitioner, a Chinese national, sought review of the BIA's decision upholding the IJ's denial of asylum and withholding of removal. The BIA determined that imposition of a fine equal to approximately twenty times petitioner's annual income and, after petitioner left China, further sanction for failure to pay the fine, specifically, termination of his family's farming leasehold, did not establish either past persecution or a well founded fear of future persecution. The court held that while a severe fine can amount to economic persecution, an alien claiming to have suffered past persecution must show more than the imposition of such a fine; he must show that payment of the fine (or efforts to pay or collect it) actually deprived him of the basic necessities of life or reduced him to an impoverished existence. The court clarified that an unpaid fine and sanctions imposed after an alien is already in the United States for nonpayment of a fine may support a well founded fear of future persecution if the alien were returned to his native country. In this case, substantial evidence supports the BIA's finding that petitioner failed to demonstrate that the imposition of a severe fine deprived him of the basic necessities of life or impoverished him before he left China. However, the BIA erred in concluding that no evidence existed of continuing demands for payment while petitioner has been in the United States and reaching other factual conclusions not supported by substantial evidence. Accordingly, the court vacated the BIA's order insofar as it denied petitioner both asylum and withholding of removal. The court remanded for further proceedings, granting review of the BIA's feared future persecution ruling. View "Huo Qiang Chen v. Holder" on Justia Law

Defendant pleaded guilty to conspiring to possess, with intent to distribute, over 1,000 grams of heroin. On appeal, defendant challenged his sentence of 288 months' imprisonment and 10 years' supervised release. The court concluded that defendant's rights were substantially affected and the fairness and integrity of the judicial proceedings were seriously compromised where defendant's mandatory minimum sentence was miscalculated and where the record reflects that this miscalculation had an impact on the sentence imposed. Due to this plain error, the court vacated the sentence and remanded for resentencing. View "United States v. Sanchez" on Justia Law

This case stemmed from plaintiffs' request for tuition assistance for their daughter under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400 et seq. Plaintiffs filed suit challenging the State Review Officer's (SRO) decision to deny reimbursement for private schooling and the district court reversed in part and ordered the school district to reimburse plaintiffs for May 1, 2009 to May 31, 2009, and for the 2009-2010 school year. Because the court deferred to the SRO's determination that plaintiffs did not meet their obligation to demonstrate the appropriateness of their daughter's placement, plaintiffs cannot recover under the IDEA for any portion of the time she was placed at Family Foundation. Accordingly, the court reversed the judgment of the district court and remanded for entry of an order affirming the SRO's decision. View "Hardison v. Bd. of Ed. Oneonta City Sch. Dist." on Justia Law

Defendant pleaded guilty to conspiracy to distribute Adderall. On appeal, defendant challenged the district court's judgment convicting defendant of violating her supervised release by making false statements to a probation officer and leaving the district of her supervision without permission. During the pendency of her appeal, defendant completed her time in custody on the contested adjudication, although her term of supervision had not run. The court concluded that defendant's appeal was not mooted by the expiration of her custodial sentence and that the possibility of a reduced term of supervised release can satisfy Article III's case-or-controversy requirement. On the merits, the court concluded that the district court's conclusion that defendant's violation was willful was not an abuse of discretion. Defendant's remaining arguments are without merit. Accordingly, the court affirmed the judgment. View "United States v. Wiltshire" on Justia Law