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

Plaintiff filed a whistleblower action against FRBNY, her former employer, and three of its employees. The district court dismissed the suit and determined, inter alia, that palintiff could not maintain claims against the employees under the banking agency whistleblower protection statute, 12 U.S.C. 1831j(a)(2). The court concluded that neither sharing an interest in the financial well‐being of a company nor sharing information about that company leads to a reasonable inference that the employees were performing services for the FDIC. Further, plaintiff’s allegations fall far short of plausibly showing that the employees were performing a service on behalf of the FDIC, as required under the whistleblower protection statute. Accordingly, the court affirmed the judgment. View "Segarra v. Federal Reserve Bank of N.Y." on Justia Law

Plaintiffs, owner of Fiscal Agency Agreement (FAA) bonds that were not restructured, filed suit against BCRA seeking to recover their unpaid principal and interest. The district court held that the FAA's express waiver of sovereign immunity, pursuant to 28 U.S.C. 1605(a)(1), also waived BCRA's immunity because BCRA is Argentina’s “alter ego.” The district court further held that BCRA’s use of its account with the Federal Reserve Bank of New York (FRBNY) constituted “commercial activity” in the United States, which waived BCRA’s sovereign immunity under 28 U.S.C. 1605(a)(2). The court concluded that it has jurisdiction over the appeal under the collateral-order doctrine; Argentina’s sovereign‐immunity waiver in the FAA may not be imputed to also waive BCRA’s independent sovereign immunity; and BCRA’s use of its FRBNY account is too incidental to the gravamen of plaintiffs’ claim to serve as the basis for waiving BCRA’s sovereign immunity under the commercial‐activity exception to the FSIA. Accordingly, the court reversed and remanded with instructions to dismiss the complaint. View "EM Ltd. v. Banco Central de la Republica Argentina" on Justia Law

Plaintiff filed a putative class action alleging that defendants violated the Fair Debt Practices Act (FDCPA), 15 U.S.C. 1692e, 1692f, by charging and attempting to collect interest at a rate higher than permitted under the law of her home state and that defendants violated New York's usury law, N.Y. Gen. Bus. Law 349; N.Y. Gen. Oblig. Law 5-501; N.Y. Penal Law 190.40. The district court entered judgment in favor of defendants. The court reversed the district court's holding that the National Bank Act (NBA), 12 U.S.C. 85, preempts plaintiff's claims because neither defendant is a national bank nor a subsidiary or agent of a national bank, or is otherwise acting on behalf of a national bank, and because application of the state law on which plaintiff's claim relies would not significantly interfere with any national bank’s ability to exercise its powers under the NBA. Accordingly, the court vacated the judgment and remanded to the court to address in the first instance whether the Delaware choice-of-law precludes plaintiff's claims. Finally, the court also vacated the district court's denial of class certification. View "Madden v. Midland Funding, LLC" on Justia Law

Plaintiffs, pension funds, filed suit, seeking to hold BNYM responsible for the losses allegedly caused by Countrywide's breach of its representations and warranties in connection with 530 residential mortgage-backed securities (RMBS) created between 2004 and 2008 for which BNYM acts as trustee. The court affirmed the portion of the district court's order dismissing plaintiffs' claims related to the trusts in which they did not invest for lack of standing because plaintiffs' claims do not implicate the "same set of concerns" as those of absent class members who purchased certificates issued by trusts in which no named plaintiff invested; reversed the portion of that order denying BNYM's motion to dismiss plaintiffs' Trust Indenture Act (TIA), 15 U.S.C. 77aaa-77aaaa, claims related to the PSA-governed (pooling and servicing agreements) New York trusts where the New York certificates at issue are exempt from section 304(a)(2) of the TIA; and the court remanded in part for further proceedings. View "Retirement Board v. Bank of New York Mellon" 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

In this appeal, the district court held that the "separate entity rule" precludes a court from ordering a garnishee bank with branches in New York to restrain assets of judgment debtors held in foreign branches of the bank. The court certified the following question to the New York Court of Appeals: "whether the separate entity rule precludes a judgment creditor from ordering a garnishee bank operating branches in New York to restrain a debtor's assets held in foreign branches of the bank." The Court of Appeals answered the question in the affirmative. Consequently, the court held that the district court correctly concluded that the separate entity rule precludes the restraint of assets held in Standard Chartered Bank's foreign branches. Therefore, the court remanded to the district court with instructions to vacate the restraining order on defendants' assets. View "Motorola Credit Corp. v. Standard Chartered Bank" on Justia Law

The district court approved a settlement agreement between representative plaintiffs and Bank of America in a class action lawsuit alleging violations of the Securities Act of 1933, 15 U.S.C. 77a et seq., and the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq. The underlying litigation stemmed from Bank of America's negotiations with Merrill Lynch in 2008, which resulted in the two financial institutions merging in 2009. The court concluded that the district court did not violate the Private Securities Litigation Reform Act, 15 U.S.C. 78u-4(a)(2)(A)(vi), 78u-4(a)(4), when it awarded reimbursement costs to representative plaintiffs; the notice of the statement of average amount of damages per share was not constitutionally deficient in violation of appellants' due process rights and the district court did not exceed the bounds of its discretion in approving the notice; the award of attorneys' fees was reasonable and appellants failed to identify any specific abuse of discretion on the part of the district court; and appellants' remaining arguments are without merit. Accordingly, the court affirmed the judgment. View "In re Bank of America" on Justia Law

This case arose out of the collapse of SIV, managed by Cheyne and structured by Morgan Stanley. PSERS and Commerzbank appealed from the final order of judgment denying class certification, dismissal of Commerzbank's claim for lack of standing; and dismissal of PSERS's claim because its presence as a party would destroy complete diversity, the sole basis of subject matter jurisdiction. The court affirmed the denial of class certification and dismissal of PSERS; held that it was not a permissible exercise of discretion for the district court to limit Commerzbank's ability to establish its standing; certified to the New York Court of Appeals the question of whether a reasonable trier of fact could find that Commerzbank had acquired from a third party that had purchased securities a fraud claim against Morgan Stanley; and certified the question whether, if Commerzbank has standing, a reasonable trier of fact could hold Morgan Stanley liable for fraud based on the present record. View "Pennsylvania Public School Employees’ Retirement System v. Morgan Stanley" on Justia Law

Plaintiffs, family members or trustees of the estates of victims of state-sponsored terrorism, seek to enforce their 2009 Florida state court judgment obtained against Cuba by attaching the blocked assets of that state under section 201 of the Terrorism Risk Insurance Act of 2002 (TRIA), 28 U.S.C. 1610 note. Plaintiffs seek to satisfy the underlying judgment from electronic fund transfers (EFTs) blocked under the Cuban Assets Control Regulations, 31 C.F.R. Part 515. The court concluded that the EFTs are not attachable under section 201 because no terrorist party or agency or instrumentality thereof has a property interest in the EFTs. In this case, it is undisputed that no Cuban entity transmitted any of the blocked EFTs directly to the blocking bank. Accordingly, the court reversed the district court's grant of summary judgment for plaintiffs and remanded for further proceedings. View "Hausler et al., v. JPMorgan Chase Bank, N.A., et al." on Justia Law

This appeal involves a dispute between the Trustee, appointed to protect public customers and creditors in the liquidation of LBI, and purchasers of LBI's assets over the entitlement to two sets of LBI assets: (1) the Margin Assets and (2) the Clearance Box Assets (CBAs). The district court held that Barclays was entitled to both the Margin Assets and the CBAs, and was conditionally entitled to the Rule 15c-3 Assets. The Trustee appealed from the Margin Assets and CBA rulings. Barclays cross-appealed from the Rule 15c3-3 Assets ruling but the settlement had disposed of that issue and cross-appeal. The court concluded that the transfer of the Margin Assets to Barclays was contemplated in the Asset Purchase Agreement and confirmed in the Clarification Letter. The court agreed with the district court that extrinsic evidence showed an intent to transfer the CBAs to Barclays. Accordingly, the court affirmed the judgment of the district court.View "In Re: Lehman Brothers Holdings Inc." on Justia Law