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

In an antitrust class action brought on behalf of approximately 12 million merchants against Visa and Mastercard, as well as other various banks, plaintiffs alleged conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. After the parties agreed to a settlement releasing all claims, the district court certified two settlement-only classes and approved the settlement. Numerous objectors and opt‐out plaintiffs appealed and argued that the class action was improperly certified and that the settlement was unreasonable and inadequate. The court concluded that class members of the (b)(2) class were inadequately represented in violation of both FRCP 23(a)(4) and the Due Process Clause. The court also concluded that procedural deficiencies produced substantive shortcomings in this class action and the settlement. Consequently, the court concluded that the class action was improperly certified and the settlement was unreasonable and inadequate. The court vacated the district court's certification of the class action and reversed the approval of the settlement. The court remanded for further proceedings. View "In re Payment Card Interchange Fee and Merchant Discount Antitrust" on Justia Law

OneWest commenced a foreclosure action against defendant. The district court denied defendant's cross-motion to dismiss and granted OneWest's motion for summary judgment. The district court held in part that a national bank such as OneWest is a citizen only of the state in which its main office is located - not also of the state of its principal place of business - and that OneWest’s main office is indisputably in California. The court agreed with the district court and joined its sister circuits in holding that, for purposes of subject matter jurisdiction, a national bank is a citizen only of the state in which its main office is located. The court also concluded that OneWest had standing to foreclose based on LSA's assignment of all of its rights that FDIC previously had to defendant's loan as the conservator and receiver of IndyMac Federal. Accordingly, the court affirmed the judgment. View "OneWest Bank, N.A. v. Melina" on Justia Law

Plaintiff filed a qui tam action under the New York False Claims Act (NYFCA), N.Y. Stat Fin. Law 187 et seq., on behalf of the State and the City against Wells Fargo for fraudulent avoidance of New York tax obligations. The district court dismissed for failure to state a claim. The court concluded that, with no special state interest, and with no indication of congressional preference for state-court adjudication, the exercise of federal jurisdiction in this case is fully consistent with the ordinary division of labor between federal and state courts. The court also concluded that the complaint did not plausibly allege that the Wells Fargo trusts were not qualified to be treated as Real Estate Mortgage Investment Conduits (REMICs). Therefore, the complaint failed to state a claim on which relief could be granted under the NYFCA for any false statement or record affecting the trusts' entitlement to exemption from income tax under the New York tax laws. Accordingly, the court affirmed the judgment. View "State of New York ex rel. Jacobson v. Wells Fargo" on Justia Law

Plaintiffs filed numerous antitrust suits alleging that the Banks colluded to depress LIBOR by violating the rate‐setting rules, and that the payout associated with the various financial instruments was thus below what it would have been if the rate had been unmolested. After consolidation into a multi-district litigation (MDL), the district court dismissed the litigation in its entirety based on failure to plead antitrust injury. The court vacated the judgment on the ground that: (1) horizontal price‐fixing constitutes a per se antitrust violation; (2) a plaintiff alleging a per se antitrust violation need not separately plead harm to competition; and (3) a consumer who pays a higher price on account of horizontal price‐fixing suffers antitrust injury. The court remanded for further proceedings on the question of antitrust standing. Finally, the court rejected the Bank's alternative argument that no conspiracy has been adequately alleged. View "In re: LIBOR-Based Financial Instruments Antitrust Litig." on Justia Law

Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729(a)(1)(A), alleging that Wells Fargo defrauded the government within the meaning of the FCA by falsely certifying that they were in compliance with various banking laws and regulations when they borrowed money at favorable rates from the Federal Reserve’s discount window. The district court granted defendants’ motion to dismiss. The district court held that the banks’ certifications of compliance were too general to constitute legally false claims under the FCA and that relators had otherwise failed to allege their fraud claims with particularity. The court agreed, concluding that it has long recognized that the FCA was not designed to reach every kind of fraud practiced on the Government. Even assuming relators’ accusations of widespread fraud are true, they have not plausibly connected those accusations to express or implied false claims submitted to the government for payment, as required to collect the treble damages and other statutory penalties available under the FCA. Accordingly, the court affirmed the dismissal of the suit. View "Bishop v. Wells Fargo" on Justia Law

BNY appealed the district court's grant of summary judgment for Morgan Stanley, arguing that the district court erred in concluding, as a matter of law, that Morgan Stanley was not contractually obliged to repurchase a mortgage loan allegedly issued in breach of a contract representation because (1) the Trustee’s duty to give “notice to cure” within three business days of becoming aware of a material breach was a condition precedent to the seller’s repurchase obligation, and (2) that condition was not performed within the specified three days, but two to four weeks later. The court concluded that the contract at issue did not require notice to cure as a condition precedent to Morgan Stanley remedying breach where the phrase “notice to cure” does not appear in the contract. In this case, the contract contains distinct provisions for giving notice of breach and making request for cure, neither of which is cast in the express language of condition. Therefore, the request for cure is not a condition precedent to Morgan Stanley’s remedy obligations, and the timeliness of a request for cure, as well as of a notice of breach, is properly construed as a promise and reviewed for substantial performance. The court also concluded that the notice of breach and request for cure in this case cannot be held untimely as a matter of law, particularly when reviewed for substantial performance. Accordingly, the court reversed and remanded for further proceedings. View "Bank of New York Mellon Trust v. Morgan Stanley Mortgage" on Justia Law

Plaintiff filed suit against defendants, alleging common-law fraud and violations of the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. Plaintiff alleged that she never agreed to the mortgage loan at issue. The court concluded that the district court acted within its discretion in admitting an attorney's testimony under FRE 406 regarding the fact that he had met with plaintiff and had not asked her to sign blank sheets of paper; the district court did not abuse its discretion in admitting the loan documents at issue under FRE 901(a) for authenticated records and the court rejected plaintiff's argument that admission of the photocopies violated the best evidence rule where the original documents had been lost; plaintiff's FRCP 50 argument fails where the evidence was more than adequate to warrant the jury in finding for defendants' on the case's central issue; and the district court did not abuse its discretion in denying plaintiff's FRCP 59 motion for a new trial where nothing in the record warranted upsetting the verdict. Accordingly, the court found no error and affirmed the judgment. View "Crawford v. Franklin Credit Mgmt. Corp." on Justia Law

The FHFA filed a summons with notice in state court asserting breach of contractual obligations to repurchase mortgage loans that violated representations and warranties and then Quicken removed the action to federal court. Plaintiff, as trustee of the subject residential mortgage‐backed securities trust, took control of the litigation and filed the complaint. Quicken moved to dismiss the suit. The court affirmed the district court's conclusion that (1) the statute of limitations ran from the date the representations and warranties were made; (2) the extender provision of the Housing and Economic Recovery Act,12 U.S.C. 4617(b)(12), did not apply to the Trustee’s claim; and (3) the Trustee’s claim for breach of the implied covenant of good faith and fair dealing was duplicative. View "Deutsche Bank Nat'l v. Quicken Loans" on Justia Law

Plaintiff appealed the district court's dismissal of his claim under the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. 1692k, as untimely. The court concluded that the district court erred in finding that the FDCPA violation “occurred” when defendant sent the restraining notice. The court held instead that where a debt collector sends an allegedly unlawful restraining notice to a bank, the FDCPA violation does not “occur” for purposes of Section 1692k(d) until the bank freezes the debtor’s account. Because the record is unclear as to when the freeze actually took place, the court vacated the judgment and remanded to the district court for further proceedings. View "Benzemann v. Citibank" on Justia Law

Plaintiff filed suit alleging that she was the victim of an identity theft scheme perpetrated by employees of Chase, and seeks to hold Chase liable for this identity theft under the New York Fair Credit Reporting Act, N.Y. Gen. Bus. L. 380-1, 380-s. At issue was whether plaintiff's suit is preempted by the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq. The court held that 15 U.S.C. 1681t(b)(1)(F) preempts only those claims that concern a defendant’s responsibilities as a furnisher of information under the FCRA. The court concluded that, viewed in the light most favorable to plaintiff, the complaint advances claims against Chase for identity theft under N.Y. Gen. Bus. L. 380‐l and 380‐s based on acts of identity theft perpetrated by Chase employees, as distinct from any erroneous or otherwise wrongful actions by Chase in furnishing information to consumer reporting agencies. These identity theft claims are not preempted because they do not concern Chase’s responsibilities as a furnisher. The court further concluded that, to the extent that plaintiff’s complaint seeks relief based on Chase’s erroneous or otherwise improper furnishing of information to consumer reporting agencies, those claims are preempted. Accordingly, the court vacated and remanded. View "Galper v. JP Morgan Chase Bank, N.A." on Justia Law