Articles Posted in Civil Procedure

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The Second Circuit vacated the district court's dismissal of plaintiff's 42 U.S.C. 1983 action, alleging that their constitutional rights were violated when they were coerced by New York City officials into signing settlement agreements waiving various constitutional rights in order to avoid eviction from their businesses and residences. The district court held that it lacked jurisdiction under the Rooker-Feldman doctrine because the settlement agreements were "so-ordered" by judges in the state-court system. The court held that the district court's Rooker-Feldman ruling was erroneous because plaintiffs' alleged injuries were merely ratified by the state-court judgments rather than caused by them. In this case, plaintiffs were attempting to remedy an alleged injury caused when, prior to any judicial action, they were coerced to settle, not an injury that flowed from a state-court judgment. Accordingly, the court remanded to the district court for further proceedings. View "Cho v. City of New York" on Justia Law

Posted in: Civil Procedure

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Geismann filed a Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, class action complaint, alleging that it received unsolicited faxes from ZocDoc. After Geismann moved for class certification, ZocDoc made a settlement offer as to Geismann’s individual claims (FRCP 68), whichGeismann rejected. The court entered judgment in the amount and under the terms of the unaccepted offer and dismissed the action as moot. On remand, ZocDoc deposited $20,000 (FRCP 67) in "full settlement of Geismannʹs individual claims," in the courtʹs registry. The court again entered judgment in Geismannʹs favor and dismissed the action. The Second Circuit vacated. There is no material difference between a plaintiff rejecting a Rule 67 tender of payment and a Rule 68 offer of payment; the parties retained the same stake in the litigation they had at the outset. A claim becomes moot when a plaintiff actually receives all of the relief he could receive through litigation. The Rule 67 procedure provides for safekeeping of disputed funds pending the resolution of litigation, but it cannot alter the parties' contractual relationships and legal duties. Even if the court first entered judgment enjoining ZocDoc from further faxes and directing the clerk to send Geismann the $20,000, that would not have afforded Geismann complete relief. By rejecting the settlement offer, Geismann effectively stated that its suit “is about more than the statutory damages," it is also about the reward earned by serving as lead plaintiff. Nothing forces it to accept ZocDoc’s valuation of that part of the case. View "Radha Geismann, M.D., P.C. v. ZocDoc, Inc." on Justia Law

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The Second Circuit held that a petition filed in New York Supreme Court under N.Y. C.P.L.R. 3102(c) was not a "civil action" removable to federal court under 28 U.S.C. 1441, 1446. The court affirmed the district court's grant of petitioner's motion to remand the case to state court. In this case, the district court held that it lacked federal question jurisdiction pursuant to 28 U.S.C. 1331 over a New York Civil Practice Law and Rules 3102(c) special proceeding for pre‐action disclosure and that diversity jurisdiction under 28 U.S.C. 1332 was barred under 28 U.S.C. 1441(b)'s "forum defendant" rule. View "Teamsters Local 404 Health Services & Insurance Plan v. King Pharmaceuticals, Inc." on Justia Law

Posted in: Civil Procedure

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Plaintiff brought a derivative action as a shareholder of Qlik, alleging that the Cadian Group owned more than ten percent of Qlik and engaged in short-term swing transactions in violation of Section 16(b) of the Securities Exchange Act. While the action was stayed, Qlik was bought out, causing plaintiff to lose any financial interest in the litigation. The Cadian Group subsequently moved to dismiss the action for lack of standing. The district court found that plaintiff's lack of standing deprived it of jurisdiction and that Qlik could not be substituted under Federal Rule of Civil Procedure 17. The Second Circuit reversed, holding that, when plaintiff lost her personal stake in the litigation, the only jurisdictional question was whether the case had become moot. The court held that a district court has jurisdiction to determine whether substituting a plaintiff would avoid mooting the action, and that Rule 17(a)(3) allows substitution of the real party in interest so long as doing so does not change the substance of the action and does not reflect bad faith from the plaintiffs or unfairness to the defendants. In this case, the district court should have substituted Qlik and denied Cadian Group's motion to dismiss for lack of jurisdiction. View "Klein v. Cadian Capital Management, LP" on Justia Law

Posted in: Civil Procedure

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Paysys Atos non‐exclusive rights to use Paysys software and to grant licenses for that software within a specified territory. The agreement provided that in litigation with respect to a territorial violation, the prevailing party would be entitled to an award of its reasonable attorneys’ fees. Paysys sued Atos for breach, alleging multiple violations of those territorial restrictions. Three years later, 12 of Paysys’s 13 claims had been dismissed. Paysys sought a dismissal with prejudice of its remaining breach of contract claim, offering to provide Atos a perpetual, global software license. Atos asserted that it would consent if the court recognized Atos as the “prevailing party.” Paysys argued that if such a condition were imposed, it should be entitled to withdraw its motion. The district court granted Paysys’s motion on the condition that it pay Atos’s attorney’s fees, finding that Atos had succeeded in getting most of Paysys’s claims dismissed. The court held that Paysys was not entitled to withdraw its motion because the fee‐shifting obligation was a contractual one. The Second Circuit vacated. Paysys was entitled to an opportunity to withdraw its motion rather than acquiesce to the court’s terms. When a plaintiff files a motion for dismissal under Rule 41(a)(2), it takes on the risk is that its motion will be denied, not that the motion will carry additional consequences to which the plaintiff does not consent. View "Paysys International, Inc. v. Atos IT Servs. Ltd." on Justia Law

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The Second Circuit held that the district court erred in refusing to exercise supplemental jurisdiction in an action brought by laundromat workers against their employers under the Fair Labor Standards Act (FLSA). The day before the final pretrial conference and one week prior to the first day of trial, the district court sua sponte, and without notice to the parties or any opportunity to be heard, issued an order revoking its exercise of supplemental jurisdiction, vacating the trial, and dismissing the case. The court held that the district court committed three errors where it acted sua sponte without affording the parties notice and an opportunity; it impugned, on the record, plaintiffs' counsel's motives without affording any notice about this assessment of counsel's conduct or any opportunity to explain himself; and its analysis of the factors considered under 28 U.S.C. 1367(c) for determining whether to exercise supplemental jurisdiction was inadequate. Accordingly, the court remanded for further proceedings. View "Lopez Catzin v. Thank You & Good Luck Corp." on Justia Law

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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