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

A commercial property owner that operates a large shopping mall in Nassau County, New York, was fined approximately $4.8 million by county officials for failing to provide financial information as required under the county’s Annual Statement of Income and Expenses (ASIE) Law. This law mandates commercial property owners to report financial data to county assessors or face a fine calculated as a percentage of the property’s market value. The property owner did not submit the required statements for two consecutive years and was subsequently notified of the fine.After receiving notice of the penalty, the property owner filed suit in the United States District Court for the Eastern District of New York, rather than pursuing remedies under state law or contesting the fine through state administrative proceedings. The owner argued that the ASIE Law and the resulting penalty violated the Eighth Amendment’s Excessive Fines Clause, the Fourteenth Amendment’s Due Process Clause, and several state laws. The district court granted summary judgment in favor of Nassau County and its officials, finding that the fine was not excessive, that adequate procedural due process was available through an Article 78 state court proceeding, and that the ASIE Law did not violate substantive due process. The district court also denied the owner’s motion for sanctions against the county, finding no evidence of bad faith or egregious conduct.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s judgment. The Second Circuit held that the Excessive Fines Clause applies to business entities, including trusts, and that the fine imposed was not grossly disproportional to the offense. The court further found that the available procedures satisfied due process requirements and that the ASIE Law was rationally related to a legitimate government interest. The denial of sanctions was also upheld. View "The Retail Property Trust v. Nassau Cnty. Dep't of Assessment" on Justia Law

In late 2022 and early 2023, Swiss authorities intervened in the affairs of Credit Suisse, a major Swiss bank facing severe financial distress and significant capital outflows. Rather than pursuing receivership or nationalization, Switzerland opted to orchestrate a takeover of Credit Suisse by UBS, another large Swiss bank. As part of this process, Switzerland unilaterally negotiated merger terms, exerted coercive control over Credit Suisse, enacted emergency ordinances to facilitate the transaction, and extended substantial loans and guarantees. A key step was Switzerland’s directive that Credit Suisse write down $17.3 billion in bond liabilities, which directly affected bondholders whose securities were held and cleared in New York.Bondholders, who lost their investments due to the write-down, brought suit in the United States District Court for the Southern District of New York. They alleged that Switzerland’s actions fell within the commercial activity exception to the Foreign Sovereign Immunities Act (FSIA), claiming that Switzerland’s “brokering” of the merger was commercial in nature. The district court disagreed, finding that Switzerland’s conduct, viewed as a whole, was not commercial because it involved the exercise of sovereign authority, including coercive directives and the unilateral enactment of ordinances. The district court therefore dismissed the case for lack of subject matter jurisdiction.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s dismissal. The Second Circuit held that, while certain actions by Switzerland (such as providing loans and guarantees) might arguably be commercial if viewed in isolation, the overall course of conduct—particularly the coercive control over Credit Suisse and the use of sovereign powers to enact emergency ordinances—was not the type of activity undertaken by private parties in commerce. Accordingly, the commercial activity exception under the FSIA did not apply, and Switzerland retained sovereign immunity. View "Creditincome Limited v. The Swiss Confederation" on Justia Law

New York State created a congestion-pricing program in 2019, requiring vehicles entering the Central Business District (CBD) in Manhattan to pay a daily toll. The stated purposes of the program include reducing traffic congestion and raising funds to support mass transit projects. Rockland and Orange Counties, neighboring municipalities with limited mass-transit access to Manhattan, argued that this program disproportionately burdens their residents, who often rely on driving rather than transit. Before the program began, Rockland and Orange Counties sued the Triborough Bridge and Tunnel Authority and the Metropolitan Transportation Authority, alleging that the toll was an unauthorized tax, violated the right to travel, and infringed upon the Due Process, Equal Protection, and Excessive Fines Clauses of both the New York and U.S. Constitutions.The United States District Court for the Southern District of New York consolidated the cases and granted the defendants’ motion to dismiss for failure to state a claim, also denying leave to amend. The court found that the plaintiffs failed to plausibly allege constitutional violations and determined that any challenge to the toll as a tax should be brought in state court.The United States Court of Appeals for the Second Circuit reviewed the appeal, assuming without deciding that the toll was not a tax. The Second Circuit affirmed the district court’s dismissal, holding that the congestion-pricing program does not create invidious distinctions or more than a minor restriction on the right to travel and thus is reviewed for reasonableness. The court found the toll to be a reasonable user fee, rationally related to legitimate state interests in funding transit and reducing congestion. It also determined there was no due process, equal protection, or excessive fines violation. The Second Circuit further ruled that the district court did not abuse its discretion in denying leave to amend the complaints. View "County of Rockland v. Triborough Bridge & Tunnel Auth." on Justia Law

New York City and New York State passed laws that effectively prohibit the use of fossil-fuel-powered appliances in new buildings as part of broader efforts to address pollution and greenhouse gas emissions. These measures ban, for example, installing gas stoves or other fossil-fuel-based heating or cooking appliances in new construction. Trade associations, contractor and builder groups, and unions whose members would be affected by these prohibitions sued, arguing that the Energy Policy and Conservation Act (EPCA), a federal law that sets efficiency standards for certain appliances, expressly preempts these state and local laws.In the United States District Court for the Southern District of New York, the plaintiffs challenging the New York City law lost when the court granted the City’s motion to dismiss, finding that EPCA did not preempt the local law. In a separate case in the United States District Court for the Northern District of New York, plaintiffs challenging the State law were denied relief at the summary judgment stage against the remaining state defendant, with the court again holding that EPCA’s preemption provision did not apply. In both cases, the plaintiffs appealed.The United States Court of Appeals for the Second Circuit reviewed both appeals together. The court held that EPCA’s express preemption provision only preempts state and local “energy conservation standards” for covered appliances and a limited class of related regulations. The challenged New York laws, which prohibit the use of certain types of appliances but do not set standards for the amount of energy those appliances use, do not fall within the scope of EPCA’s preemption. Accordingly, the Second Circuit affirmed the judgments of the district courts, allowing the state and city laws to stand. View "Association of Contracting Plumbers v. City of New York" on Justia Law

The United States government brought a civil forfeiture action against a luxury superyacht, alleging that it was beneficially owned by a Russian national subject to U.S. sanctions. Two claimants, an individual and his company, asserted that they—not the sanctioned individual—owned the yacht, both legally and beneficially. The government, however, argued that these claimants were mere straw owners holding title on behalf of the sanctioned individual and therefore lacked constitutional standing to contest the forfeiture.The United States District Court for the Southern District of New York held an evidentiary hearing to resolve factual disputes regarding the claimants’ standing. The court found, by a preponderance of the evidence, that the claimants had relinquished all meaningful ownership and control over the yacht through a memorandum of agreement executed in September 2021. As a result, the court concluded that the claimants were only bare title holders, acting as straw owners, and lacked Article III standing to object to the forfeiture. The court granted the government’s motion to strike the claim and entered default and final judgments of forfeiture when no other claims were filed.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s legal conclusions de novo and its factual findings for clear error. The Second Circuit affirmed, holding that the claimants’ legal title alone did not establish standing where the evidence showed they retained no substantive ownership interest after the September 2021 agreement. The court also upheld the district court’s exclusion of a hearsay declaration and concluded there was no procedural error in the conduct of the evidentiary hearing. The judgment of forfeiture was affirmed. View "United States v. The M/Y Amadea" on Justia Law

A Puerto Rican international banking entity, which operated under an offshore charter and was regulated by Puerto Rico’s Office of the Commissioner of Financial Institutions, maintained a master account with the Federal Reserve Bank of New York. In 2019, following a federal investigation into potential anti-money laundering violations involving a Venezuelan client, the entity’s offices were raided and its account was temporarily suspended. After the investigation concluded with a fine and compliance improvements, the account was restored under stricter risk-mitigation terms. However, in 2022 and 2023, the Federal Reserve Bank determined the entity had not met required compliance standards and ultimately terminated the master account, citing serious risk concerns related to money laundering and deficiencies in compliance programs.The entity sued in the United States District Court for the Southern District of New York, seeking to compel reinstatement of its account and damages. It claimed a statutory entitlement to a master account under the Federal Reserve Act, as amended by the Monetary Control Act, and brought claims under the Administrative Procedure Act, Mandamus Act, Declaratory Judgment Act, the Fifth Amendment, and New York contract law, among others. The district court denied preliminary relief and dismissed all claims, holding that the relevant statutes did not create a nondiscretionary entitlement to a master account and finding failures in both standing and the plausibility of the claims.The United States Court of Appeals for the Second Circuit affirmed. It held that the Federal Reserve Act does not grant depository institutions a statutory or nondiscretionary right to a master account; instead, regional Reserve Banks retain discretion over account access. The court further found that the plaintiff lacked standing to sue the Federal Reserve Board of Governors, failed to plausibly allege contract or constitutional claims, and that amendment of the complaint would be futile. The district court’s judgment was affirmed in all respects. View "Banco San Juan Internacional, Inc. v. Fed. Rsrv. Bank of N.Y., Bd. of Governors of the Fed. Rsrv." on Justia Law

Minority shareholders of an Argentine oil and gas company, previously privatized in 1993, became involved in litigation after the Argentine government expropriated a majority stake in the company in 2012. The government’s acquisition of shares was conducted without making a public tender offer to minority shareholders, a process that was explicitly required by the company’s bylaws to protect such shareholders in the event of a takeover. The plaintiffs, consisting of Spanish entities and a New York hedge fund, had acquired significant stakes in the company, and after the expropriation, they claimed that they suffered substantial financial losses due to the government’s failure to comply with the tender offer requirement.The plaintiffs sued in the United States District Court for the Southern District of New York, asserting breach of contract and promissory estoppel claims under Argentine law against both the Argentine Republic and the company. After extensive litigation, the district court found in favor of the plaintiffs on their breach of contract claims against the Argentine Republic, awarding over $16 billion in damages, but granted summary judgment to the company, finding it had no obligation to enforce the tender offer provision. The court also dismissed the promissory estoppel claims.On appeal, the United States Court of Appeals for the Second Circuit held that the plaintiffs' breach of contract damages claims against the Argentine Republic and the company were not cognizable under Argentine law, reasoning that the bylaws did not create enforceable bilateral obligations between shareholders and that Argentine public law governing expropriation precluded such claims. The court affirmed the dismissal of the promissory estoppel claims and judgment in favor of the company, but reversed the judgment against the Argentine Republic, remanding for further proceedings consistent with its opinion. View "Petersen Energía v. Argentine Republic" on Justia Law

A federal prisoner challenged the calculation of his earned time credits under the First Step Act by the Bureau of Prisons, arguing that the Bureau’s failure to properly apply these credits prevented his timely transfer from prison to prerelease custody. While the petition was pending, the prisoner was transferred to a residential reentry center, a form of prerelease custody, though he still had a significant number of unused credits. The Bureau had already used some credits to move up the start date of his supervised release, but the remaining credits were not applied.The United States District Court for the District of Connecticut determined that, although his original request for transfer to prerelease custody was moot, the petition should be construed more broadly as requesting application of remaining time credits to reduce the length of his supervised release. The district court concluded that the First Step Act required such credits to be used to shorten the prisoner’s supervised release and ordered the Bureau of Prisons to calculate and communicate the remaining credits for that purpose.The United States Court of Appeals for the Second Circuit reviewed the case and held that the relevant statutory provision, 18 U.S.C. § 3632(d)(4)(C), allows earned time credits only to accelerate a prisoner’s move from incarceration to prerelease custody or to an earlier start of supervised release, but not to reduce the length of a term of supervised release itself. The court found that, once the prisoner was transferred to prerelease custody and his credits were applied to start supervised release early, his petition became moot. The Second Circuit therefore vacated the district court’s judgment and remanded with instructions to dismiss the case as moot. View "Rivera-Perez v. Stover" on Justia Law

In 2024, a plaintiff filed suit against three individuals, alleging that they sexually assaulted her in 2012. She brought her claims under New York City’s Victims of Gender-Motivated Violence Protection Law (VGMVPL), which, as amended in 2022, created a two-year window (from March 2023 to March 2025) for victims of sexual and gender-based violence to revive and pursue civil claims that would otherwise be time-barred. The defendants removed the case to federal court, arguing that the VGMVPL’s revival window was preempted by earlier state statutes—the Child Victims Act (CVA) and the Adult Survivors Act (ASA)—which had established shorter, earlier revival periods for similar claims.The United States District Court for the Southern District of New York agreed with the defendants, holding that the state laws preempted the VGMVPL’s revival window. The district court concluded both that the CVA and ASA conflicted with the city law and that the state legislature intended to occupy the field of revival windows for such claims, rendering the city’s extension invalid. The plaintiff appealed this decision.The United States Court of Appeals for the Second Circuit reviewed the case and found that the question of whether the city’s VGMVPL revival window is preempted by the state’s CVA and ASA raises significant issues of New York law, particularly regarding home rule principles and state-local government relations. Recognizing a lack of controlling precedent from the New York Court of Appeals and the importance of the issue, the Second Circuit deferred its decision and certified the following question to the New York Court of Appeals: whether the VGMVPL’s two-year revival window for civil claims is preempted by the CVA and ASA’s earlier revival periods. The decision on the merits is reserved pending guidance from the state’s highest court. View "Parker v. Alexander" on Justia Law

Several health care facilities and their affiliates faced administrative complaints from the General Counsel of the National Labor Relations Board (NLRB) in 2012 for alleged unfair labor practices. The proceedings were assigned to Administrative Law Judge (ALJ) Kenneth Chu, who developed the factual record over multiple hearings. During this period, the Supreme Court’s decision in NLRB v. Noel Canning invalidated certain NLRB Board appointments, calling into question ALJ Chu’s own appointment. The Board later “ratified” prior actions, including Chu’s appointment, after regaining a lawful quorum. Administrative proceedings were delayed for several years due to interlocutory appeals and COVID-19, and ultimately resumed in 2023. Shortly before resumption, the plaintiffs sought to halt the proceedings, arguing the ALJ was unlawfully appointed and protected from removal in a manner unconstitutional under the separation of powers.The plaintiffs initially sought relief in the United States District Court for the District of New Jersey, which denied a temporary restraining order and transferred the case to the United States District Court for the District of Connecticut. There, the plaintiffs moved for a preliminary injunction, again raising constitutional arguments regarding the ALJ’s appointment and removal protections. The District of Connecticut denied the injunction, finding the plaintiffs had not shown a clear likelihood of success on the merits. Proceedings before ALJ Chu concluded in May 2024, after which Chu retired and the NLRB Board assumed de novo review of the case.The United States Court of Appeals for the Second Circuit reviewed the appeal. It assumed jurisdiction but declined to address the likelihood of success on the merits, instead affirming the district court’s denial of a preliminary injunction on the ground that the plaintiffs could not demonstrate irreparable harm. The court held that, because all proceedings before the challenged ALJ had concluded and the Board (now lawfully constituted) would conduct de novo review, there was no risk of irreparable injury warranting injunctive relief. The order was affirmed. View "Care One, LLC v. NLRB" on Justia Law