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

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.

Former customers of RCM, a subsidiary of the now-bankrupt Refco, appealed from a dismissal of their securities fraud claims against former corporate officers of Refco and Refco's former auditor. RCM operated as a securities and foreign exchange broker that traded in over-the-counter derivatives and other financial products on behalf of its clients. Appellants, investment companies and members of the putative class, claimed that appellees, former officers and directors of Refco, breached the agreements with the RCM customers when they rehypothecated or otherwise used securities and other property held in customer brokerage accounts. The district court dismissed the claims for lack of standing and failure to allege deceptive conduct. The court held that appellants have no remedy under the securities laws because, even assuming they have standing, they failed to make sufficient allegations that their agreements with RCM misled them or that RCM did not intend to comply with those agreements at the time of contracting.

Claimant appealed from a judgment of the district court ordering the forfeiture to plaintiff United States, pursuant to 22 U.S.C. 401(a), of certain communication-jamming devices, to wit, the defendant-in-rem Jammers, owned by claimant and a company of which he was the majority shareholder and CEO. On appeal, claimant contended that the district court erred in dismissing his claim, arguing principally that the stipulation he signed was void on the grounds that it was signed under duress and without consideration. The court held that, as a matter of New York law, no consideration for claimant's agreement to the release was needed; and thus, if consideration was absent, its absence did not make the stipulation invalid. The court also held that claimant's assertions did not meet any part of the test of duress. The court further held that the district court correctly granted the government's motion to strike or for summary judgment on the ground of claimant's lack of Article III standing. Accordingly, the judgment was affirmed.

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 sued defendant, with which she had a catastrophic medical insurance policy, because defendant told her that she had not yet "incurred" sufficient charges to satisfy its deductible. Plaintiff claimed that defendant's refusal to pay benefits rested on a deliberate misinterpretation of "incurred" and breached the insurance contract. The district court held that plaintiff, a Medicare recipient, could not have incurred charges that her physicians had agreed with Medicare to forgo prior to providing treatment. On appeal, plaintiff argued that the district court incorrectly read "incurred" in the insurance policy as including only those amounts that the insured paid or was legally obligated to pay. The court held, however, that the district court correctly interpreted "incurred," and therefore affirmed.

Plaintiff filed suit alleging that two shoe lines manufactured by defendant infringed plaintiff's trademark. At issue was whether a trademark registrant's delivery of a covenant not to sue, and voluntary dismissal of its trademark claims, divested a federal court of subject matter jurisdiction over a defendant's counterclaims for a declaratory judgment and cancellation of the trademark's registration. After considering the breadth of plaintiff's covenant not to sue and the improbability of future infringement, the district court dismissed defendant's counterclaims because no case or controversy existed under Article III of the United States Constitution. The court agreed with the district court and affirmed the judgment.

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.

Plaintiff appealed from the judgment of the district court dismissing its suit for improper venue on the basis of a forum selection clause mandating Ireland as the appropriate venue for the contract dispute between the parties. The court held that the forum selection clause at issue was permissive, not mandatory, because the clause contained no specific language of exclusion evidencing an intent by the parties to give the Irish Courts exclusive jurisdiction or make Ireland an obligatory venue for disputes arising out of the agreement. The court held that because permissive forum selection clauses contemplated that jurisdiction could be proper in more than one forum, the district court's dismissal for improper venue was improper. Therefore, the court vacated and remanded.

Plaintiffs appealed from a dismissal of their complaint, which sought a declaratory judgment that, inter alia, the Financial Industry Regulatory Authority, Inc. (FINRA) lacked the authority to bring court actions to collect disciplinary fines as imposed. The court held that the heavy weight of evidence suggested that Congress did not intend to empower FINRA to bring court proceedings to enforce its fines and that the 1990 Rule Change did not authorize FINRA to judicially enforce the collection of its disciplinary fines.

This appeal concerned tax deductions that Altria claimed in 1996 and 1997, and which the IRS disallowed. The claimed deductions resulted from Altria's participation in nine leveraged lease transactions with tax-indifferent entities. The jury found that Altria was not entitled to the claimed tax deductions. Applying the substance over form doctrine, the jury rejected Altria's contention that it retained a genuine ownership or leasehold interest in the assets and therefore was entitled to the tax deductions. The district court denied Altria's motion for judgment as a matter of law or for a new trial and entered judgment for the government. The court affirmed and held that Altria had not shown that the district court erred in instructing the jury regarding the substance over form doctrine.