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

Germany and Thailand signed a treaty, providing that disputes concerning investments between Germany or Thailand and an investor of the other party may be resolved by arbitration at the request of either party. The treaty applies to “approved investments” made before the treaty by investors of either country in the territory of the other. Bau initiated arbitration, claiming that Thailand had interfered with investments made, 1989-1997, in a Thai tollway project. An arbitration tribunal convened under agreed terms, which empowered the tribunal to consider objections to jurisdiction and provided that U.N. Commission on International Trade Law Arbitration Rules would apply. Thailand objected to jurisdiction on the ground that Bau’s were not “approved investments” because Bau never obtained a “Certificate of Admission” from Thailand’s Ministry of Foreign Affairs. Bau responded that the project was comprised of “approved investments” because Bau was invited to make the investments by the Thai Council of Ministers, which approved the project at various stages, and because the Thai Board of Investment issued certificates of investment for the project. The tribunal held that it had jurisdiction and made an award in favor of Bau. The district court confirmed. The Second Circuit affirmed, rejecting an argument that the court should have independently adjudicated jurisdiction instead of performing deferential review.View "Schneider v. Kingdom of Thailand" on Justia Law

An Agreement was signed by ISC and by Gerber, treasurer of Nobel, under which ISC was to manage $200 million of Nobel assets; the Agreement provided for arbitration. Months later, ISC filed a petition to compel arbitration. Nobel argued that the court lacked personal jurisdiction and that the Agreement had been fraudulently procured by ISC, a firm with no history of asset management, and Gerber, who, without authority, had signed in exchange for a kickback. The district court denied the petition, noting that the American Arbitration Association had refused to arbitrate, because rules specified in the Agreement were incompatible with AAA arbitration. On remand, discovery problems arose; the court allowed withdrawal by ISC counsel; ISC filed notice of voluntary dismissal without prejudice and requested that the judge recuse himself because of his conversation with counsel about reasons for withdrawal. The court denied recusal, vacated notice of dismissal, and rescheduled the trial. ISC unsuccessfully attempted to obtain a stay. At trial, ISC declined to call witnesses or introduce evidence; the court dismissed with prejudice. The Second Circuit affirmed. Even if ISC counsel conveyed extrajudicial information, denial of recusal was appropriate. ISC’s purported voluntary dismissal was improper because Rule 41(a)(1)(A)(i) does not apply to petitions to compel arbitration. View "ISC Holding AG v. Nobel Biocare Fin. AG" on Justia Law

HOP Energy appealed from the district court's confirmation of an arbitration award in favor of Local 553 Pension Fund. The district court held that HOP Energy was not exempt from withdrawal liability under the Multi-Employer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381-1461, because the purchaser of HOP Energy's New York City operating division lacked an obligation to contribute "substantially the same number of contribution base units" to the pension fund post-sale by HOP Energy had contributed pre-sale. The court agreed and held that the "contribution base units" were hours of employee pay. Although the purchaser of HOP Energy's New York City operating division had an obligation to contribute to the pension fund at the same contribution base unit rate, it had no obligation to contribute substantially the same number of hours of employee pay. Therefore, HOP was not exempt from withdrawal liability. View "Hop Energy, L.L.C. v. Local 553 Pension Fund" on Justia Law

Arnold & Itkin, a Texas-based law firm, appealed from a judgment of the district court sanctioning it for its conduct in opposing the arbitration of a dispute between its clients. Arnold & Itkin challenged the determination that the conduct was sanctioned and the amount and form of the sanctions imposed. The court largely affirmed the judgment of the district court, except that the court remanded in part to permit the district court to consider whether it should impose certain limits on its requirements that Arnold & Itkin's attorneys attached the sanction order to all future applications for admission pro hac vice in the Southern District of New York. View "Prospect Capital Corp. v. Enmon" on Justia Law

St. Paul appealed from the district court's grant of a petition by Scandinavian to vacate an arbitral award in St. Paul's favor and denying a cross-petition by St. Paul to confirm the same award. St. Paul had initiated the arbitration to resolve a dispute concerning the interpretation of the parties' reinsurance contract. The principal issue on appeal was whether the failure of two arbitrators to disclose their concurrent service as arbitrators in another, arguably similar, arbitration constituted "evident partiality" within the meaning of the Federal Arbitration Act (FAA), 9 U.S.C. 10(a)(2). The court concluded, under the circumstances, that the fact of the arbitrators' overlapping service in both the Platinum Arbitration and the St. Paul Arbitration did not, in itself, suggest that they were predisposed to rule in any particular way in the St. Paul Arbitration. As a result, their failure to disclose that concurrent service was not indicative of evident partiality. Therefore, the court reversed and remanded with instruction to the district court to affirm the award.

This was an interlocutory appeal from an order of the district court denying a motion to dismiss a suit seeking confirmation of an international arbitration award. Appellant contended that the petition should be dismissed on the ground of forum non conveniens (FNC) in favor of an action in the courts of Peru. The court reversed and remanded with directions to dismiss the petition, concluding that the underlying claim arose from a contract executed in Peru, by a corporation then claiming to be a Peruvian domiciliary against an entity that appeared to be an instrumentality of the Peruvian government, with respect to work to be done in Peru, and the public factor of permitting Peru to apply its cap statute to the disbursement of governmental funds to satisfy the award tipped the FNC balance decisively against the exercise of jurisdiction in the United States.

Plaintiff appealed from an order of the district court vacating the attachment, pursuant to Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure, of a check issued by the district court clerk made payable to defendant. At issue was whether the validity of a Rule B attachment of a treasury check issued from the Southern District's Court Registry Investment System (CRIS), representing the proceeds of electronic funds transfers whose attachment was vacated under Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd. The court held that the jurisdictional defect that led to the vacatur under Jaldhi likewise precluded the attachment of the same funds in the CRIS. Accordingly, the judgment was affirmed.

Plaintiff appealed from a judgment of the district court denying her petition to vacate an arbitration decision that rejected her claims, which asserted principally that defendant, her former employer, discriminated against her on the basis of gender in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq. On appeal plaintiff principally contended that the arbitrators' decision should be vacated in light of the Lilly Ledbetter Fair Pay Act of 2009 (Fair Pay Act), Pub. L. No. 111-2, 123 Stat. 5. The court reviewed the district court's conclusions of law de novo and found plaintiff's contentions to be without merit. Accordingly, the judgment of the district court was affirmed.

Appellants brought various claims before Financial Industry Regulatory Authority (FINRA) arbitrators against Ameriprise, a financial-services company, for, inter alia, breach of fiduciary duty, breach of contract, fraud, and negligent misrepresentation related to the decline in value of various financial assets owned by appellants and managed by Ameriprise. Ameriprise answered appellants' FINRA complaint by asserting, principally, that appellants released their claims by operation of a settlement agreement in a class-action agreement suit that had proceeded between 2004 and 2007 in the United States District Court for the Southern District of New York. After FINRA arbitrators denied Ameriprise's motion to stay appellants' arbitration, Ameriprise moved in the district court, in which the class action had been litigated and settled, for an order to enforce the settlement agreement that would enjoin appellants from pressing any of their claims before FINRA arbitrators. The district court concluded that the class settlement barred all of appellants' arbitration claims and therefore granted Ameriprise's motion and ordered appellants to dismiss their FINRA complaint with prejudice. The court held that the district court had the power to enter such an order and that several of appellants' arbitration claims were barred by the 2007 class-action settlement. Therefore, the court affirmed in part. But because the court concluded that appellants' arbitration complaint plead claims that were not, and could not have been, released by the class settlement, the court vacated in part the district court's judgment, and remanded the case for the entry of an order permitting the non-Released claims to proceed in FINRA arbitration. The court dismissed as moot appellants' appeal from the district court's denial of their motion for reconsideration.

Plaintiffs, Wachovia Bank and WCM, appealed from a judgment of the district court dismissing their action seeking to enjoin an arbitration proceeding brought by VCG before the Financial Industry Regulatory Authority, Inc. (FINRA), against WCM in connection with a credit default swap (CDS) transaction between VCG and WCM. The district court granted VCG's motion for an order compelling arbitration and dismissed the complaint, ruling that the FINRA Code of Arbitration Procedure for Customer Disputes provided for arbitration of disputes between a FINRA member and its customers, and that, as WCM was a FINRA member and negotiated part of the CDS agreement entered into by VCG and Wachovia Bank, VCG should be considered a customer of WCM within the meaning of the FINRA Code. On appeal, plaintiffs contended that the district court erred in ruling that VCG was a customer of WCM. The court held that no rational factfinder could infer that VCG was a customer of WCM. Therefore, Wachovia and WCM were entitled to summary judgment in their favor. The court considered all of VCG's contentions on appeal and found them to be without merit. Accordingly, the judgment of the district court was reversed and the matter remanded for the entry of judgment in favor of plaintiffs, enjoining VCG from proceeding with its FINRA arbitration against WCM with respect to VCG's 2007 credit default swap agreement with Wachovia Bank.