Articles Posted in Civil Procedure

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The Second Circuit reversed a petition seeking leave to subpoena the defendant law firm, Shell's United States counsel, for documents belonging to a foreign company, Royal Dutch Shell. The court held that it was an abuse of discretion for a district court to grant a 28 U.S.C. 1782 petition where the documents sought from a foreign company's U.S. counsel would be unreachable in a foreign country. The court cautioned in Application of Sarrio, S.A., 119 F.3d 143 (2d Cir. 1997), that an order compelling American counsel to deliver documents that would not be discoverable abroad, and that are in counsel's hands solely because they were sent to the United States for the purpose of American litigation, as in this case, would jeopardize the policy of promoting open communications between lawyers and their clients. View "Kiobel v. Cravath, Swain & Moore, LLP" on Justia Law

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The Second Circuit affirmed in part and reversed in part the district court's denial of defendants' motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction on grounds of foreign sovereign immunity and Federal Rule of Civil Procedure 12(b)(6) pursuant to the act of state doctrine. The court held that it had subject matter jurisdiction over the case under the Foreign Sovereign Immunities Act (FSIA) where Argentina asserted control over its stake in YPF via expropriation; Argentina incurred a separate commercial obligation under the bylaws to make a tender offer for the remainder of YPFʹs outstanding shares; and Peterson claimed it was injured by repudiation of that commercial obligation. Therefore, the repudiation was an act separate and apart from Argentinaʹs expropriation of Repsolʹs shares, and Peterson's action against Argentina fell within the direct-effects clause of the FSIA. Petersenʹs claims against YPF also fell within the direct‐effect clause of the FSIAʹs commercial activity exception. The court declined to reach the portion of this appeal challenging the district court's ruling on defendants' act of state defense. View "Petersen Energia Inversora, SAU v. Argentine Republic" on Justia Law

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Petitioner challenged the district court's dismissal of her petition asserting a third party interest in certain accounts preliminarily forfeited in the underlying criminal proceedings against her husband, Paul M. Daugerdas. The Second Circuit held that the petition did not currently contain sufficient plausible allegations to sustain her position, but pleading additional facts would not necessarily be futile. Therefore, the court vacated the district court's order because denying petitioner the ability to assert the argument she raised here could potentially permit the government to deprive her of her own property without due process of law. View "United States v. Daugerdas" on Justia Law

Posted in: Civil Procedure

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Petitioner challenged the district court's dismissal of her petition asserting a third party interest in certain accounts preliminarily forfeited in the underlying criminal proceedings against her husband, Paul M. Daugerdas. The Second Circuit held that the petition did not currently contain sufficient plausible allegations to sustain her position, but pleading additional facts would not necessarily be futile. Therefore, the court vacated the district court's order because denying petitioner the ability to assert the argument she raised here could potentially permit the government to deprive her of her own property without due process of law. View "United States v. Daugerdas" on Justia Law

Posted in: Civil Procedure

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Because existing New York law does not clearly settle whether claims for interest on principal continue to accrue after a claim for the principal itself is time‐barred, the Second Circuit certified questions pertaining to that issue to the New York Court of Appeals: 1. If a bond issuer remains obligated to make biannual interest payments until the principal is paid, including after the date of maturity, see NML Capital v. Republic of Argentina, 17 N.Y.3d 250, 928 N.Y.S.2d 666 (2011), do enforceable claims for such biannual interest continue to accrue after a claim for the principal of the bonds is time‐barred? 2. If the answer to the first question is "yes," can interest claims arise ad infinitum as long as the principal remains unpaid, or are there limiting principles that apply? View "Ajdler v. Province of Mendoza" on Justia Law

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Larson was involved with—and later convicted of crimes related to—the organization of fraudulent tax shelters. The IRS then required organizers/promoters to register tax shelters not later than the day of the first offering for sale, 26 U.S.C. 6111(a). Organizers/promoters who failed to register were subject to a penalty of the greater of one percent of the aggregate amount invested in the tax shelter, or $500. Eight years after the IRS notified Larson that he was under investigation, it informed him that it considered him an organizer with a duty to register and was subject to penalties of $160,232,0261 for failure to do so. The IRS Office of Appeals reduced the penalties to $67,661,349, stating that Larson would need to pay the remaining penalty and file a Claim for Refund if he wanted to contest the assessment. Larson paid $1,432,735 and filed his Refund Claim. The IRS rejected Larson’s claim for failure to pay the entire amount. Larson filed suit. The government moved to dismiss, arguing that because Larson had not paid the assessed penalties in full, the court lacked jurisdiction. The court agreed, concluding that application of the full-payment rule did not violate Larson’s due process rights. The Second Circuit affirmed, holding that the full‐payment rule applies to Larson’s section 6707 penalties and that his tax refund, due process, Administrative Procedure Act, and Eighth Amendment claims were properly dismissed. View "Larson v. United States" on Justia Law

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Corsair obtained a $5,443,171.33 judgment against the defendants. Corsair learned that one of the defendants had a contract with National Resources, entitling the defendant to a payment of more than $3,000,000 and obtained a writ of execution.  Corsair engaged Connecticut State Marshall Pesiri, who successfully served the writ. National Resources ignored it, relinquishing $2,308,504 to Corsair only after Corsair instituted and won a subsequent turnover action. Perisi sued, seeking a statutory commission. The Second Circuit concluded that Connecticut state law was insufficiently developed for the court to answer the question raised on appeal. The court certified questions to the Connecticut Supreme Court. The court responded that Marshal Pesiri was entitled to a 15 percent fee under CONN. GEN. STAT. 52‐8 261(a)(F). It does not matter that the writ was ignored and that the monies that were the subject of the writ were procured only after the judgment creditor, not the marshal, pursued further enforcement proceedings in the courts. The Second Circuit then affirmed the district court’s fee award in the amount of $346,275.60. View "Corsair Special Situations Fund, L.P. v. Pesiri" on Justia Law

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Corsair obtained a $5,443,171.33 judgment against the defendants. Corsair learned that one of the defendants had a contract with National Resources, entitling the defendant to a payment of more than $3,000,000 and obtained a writ of execution.  Corsair engaged Connecticut State Marshall Pesiri, who successfully served the writ. National Resources ignored it, relinquishing $2,308,504 to Corsair only after Corsair instituted and won a subsequent turnover action. Perisi sued, seeking a statutory commission. The Second Circuit concluded that Connecticut state law was insufficiently developed for the court to answer the question raised on appeal. The court certified questions to the Connecticut Supreme Court. The court responded that Marshal Pesiri was entitled to a 15 percent fee under CONN. GEN. STAT. 52‐8 261(a)(F). It does not matter that the writ was ignored and that the monies that were the subject of the writ were procured only after the judgment creditor, not the marshal, pursued further enforcement proceedings in the courts. The Second Circuit then affirmed the district court’s fee award in the amount of $346,275.60. View "Corsair Special Situations Fund, L.P. v. Pesiri" on Justia Law

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Plaintiffs filed a putative class action, alleging that defendants (insurance providers, banks, and credit card companies) targeted credit card holders with fraudulent solicitations for illegal accidental disability and medical expense insurance policies. Plaintiffs were among the cardholders who purchased those policies, which plaintiffs allege were void ab initio because they violated New York insurance law. Although plaintiffs did not suffer qualifying losses or make claims for coverage, they argued that they are nevertheless entitled to reimbursement of the premiums and fees they paid defendants, plus enhanced damages, based on quasi‐contract, civil fraud, and statutory claims. The district court dismissed the suit, reasoning that plaintiffs could not establish the injury‐in‐fact element of Article III standing. The court concluded the policies were not void ab initio because under a New York savings statute, plaintiffs would have received coverage had they filed claims for qualifying losses, N.Y. Ins. Law 3103. The Second Circuit vacated, stating that an Article III court must resolve the threshold jurisdictional standing inquiry before it addresses the claim's merits. The district court’s analysis conflated the requirement for an injury in fact with the underlying validity of plaintiffs’ arguments, and engaged a question of New York state law that the state courts have yet to answer. View "DuBuisson v. Stonebridge Life Insurance Co." on Justia Law

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Flores, a native of Ecuador, legally entered the U.S. in 1978 but overstayed his visa. He obtained legal permanent resident (LPR) status in 1979 and a passport stamp reading “temporary evidence of lawful admission for permanent residence valid until 1‐2‐80.” In November 1979, INS denied Flores’ application for adjustment of status and granted voluntary departure. Flores remained. In 1994, an immigration judge ordered his deportation. The BIA dismissed his appeal. In 2008, Flores was arrested and placed in detention. After three months, he was placed on supervised release. The BIA granted a motion to reopen; an IJ terminated the removal proceedings in 2010. The BIA closed the case in 2011. Flores subsequently received a notice from USCIS requesting that he report for a “[r]eview of your IJ decision, and LPR status.” Flores appeared and received a second passport stamp. He received his green card in 2012. In 2013, Flores sent administrative claims to federal entities under the Federal Tort Claims Act (FTCA), 28 U.S.C. 1346(b), 2671‐2680. After those entities denied his claims, Flores filed suit under the FTCA, alleging false arrest and imprisonment and other claims. The Second Circuit affirmed summary judgment for the government. Flores failed to present his claims within the two‐year statute of limitations; the “continuing violation doctrine” did not apply to this action and Flores failed to establish entitlement to equitable tolling of the limitations period. Flores’s injuries ceased after the IJ’s 2010 order. View "Flores v. United States" on Justia Law