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

Articles Posted in Government & Administrative Law
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Percoco, a longtime friend and top aide to former Governor Andrew Cuomo, accepted payment in exchange for promising to use his position to perform official actions. For one scheme, Percoco promised to further the interests of an energy company, CPV; for another, Percoco agreed with Aiello to advance the interests of Aiello’s real estate development company. Aiello was convicted of conspiracy to commit honest services wire fraud, 18 U.S.C. 1349. Percoco was convicted of both conspiracy to commit honest-services wire fraud and solicitation of bribes or gratuities, 18 U.S.C. 666(a)(1)(B). The court had instructed the jury that the quid-pro-quo element of the offenses would be satisfied if Percoco wrongfully “obtained . . . property . . . in exchange [for] official acts as the opportunities arose.”The Second Circuit affirmed. Although the as-opportunities-arise instruction fell short of a recently clarified standard, which requires that the honest-services fraud involve a commitment to take official action on a particular matter or question, that error was harmless. A person who is not technically employed by the government may nevertheless owe a fiduciary duty to the public if he dominates and controls governmental business, and is actually relied on by people in the government because of some special relationship. View "United States v. Percoco" on Justia Law

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In 2012, then-Governor Cuomo launched the "Buffalo Billion” initiative to develop the greater Buffalo area through the investment of $1 billion in taxpayer funds. A big-rigging scheme ensued with respect to state-funded projects. Four defendants were convicted of various counts of conspiracy to engage in wire fraud, 18 U.S.C. 1349, wire fraud, 18 U.S.C. 1343, and making false statements to federal officers, 18 U.S.C. 1001(a)(2).The Second Circuit affirmed, rejecting challenges to the sufficiency of the evidence with respect to the charged wire fraud conspiracies, the instructions to the jury regarding the right-to-control theory of wire fraud and the good faith defense, the preclusion of evidence regarding the success of the projects awarded to defendants through the rigged bidding system and the admission of evidence from competitors regarding the range of fees typically charged by other companies in the market, and the district court's denial of a motion to dismiss Gerardi's false statement charge for alleged prosecutorial misconduct. Evidence of actual economic harm is not necessary for conviction in "right-to-control" cases, which require "a showing that the defendant, through the withholding or inaccurate reporting of information that could impact on economic decisions, deprived some person or entity of potentially valuable economic information." View "United States v. Percoco et al." on Justia Law

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Property owners in the Town of East Hampton appeal from two separate decisions of the district court concerning their claims that the jetties abutting Lake Montauk Harbor have caused significant erosion on their properties. First, the district court dismissed plaintiffs' Federal Tort Claims Act (FTCA) claims against the Untied States for lack of subject matter jurisdiction on sovereign immunity grounds, citing the FTCA's discretionary function exception. Second, the district court granted judgment as a matter of law to the Town on plaintiff's state-law private nuisance and trespass claims.The Second Circuit affirmed the district court's judgment in both decisions, concluding that the district court correctly concluded that plaintiffs' claims against the United States are barred by sovereign immunity. In this case, neither the FCSA nor the 3x3x3 Paradigm prescribes a specific course of action abridging the USACE's broad discretion in carrying out the LMH Study, and that study and the Lake Montauk Harbor FNP are clearly susceptible to policy analysis. The court also held that, under New York law, the Town's ownership of the land beneath the jetties, standing alone, did not give rise to a duty to mitigate any erosion caused by the jetties. The court concluded that the district court had subject matter jurisdiction over plaintiffs' state-law claims; the district court properly granted the Town's renewed motion for judgment as a matter of law; and the law of the case doctrine did not compel denial of the Town's motion for judgment as a matter of law. View "Cangemi v. United States" on Justia Law

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The Second Circuit denied petitions for review of the EPA's final rule restricting access by consumers to methylene chloride, a dangerous chemical used in paint removal products. Petitioners contend that the Toxic Substances Control Act required the EPA to regulate commercial uses of methylene chloride as well as consumer uses. The court held that HSIA's challenge to the final rule fails because the final rule was supported by substantial evidence. In this case, EPA's implementation of a retailer distribution ban was a reasonable means to achieve its required goal of ensuring that the risks posed by consumer uses of methylene chloride were no longer presented. The court also concluded that the environmental petitioners' challenge is prudentially unripe for review at this time. View "Labor Council for Latin American Advancement v. Environmental Protection Agency" on Justia Law

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Connecticut Governor Ned Lamont and the state's Commissioner of the Department of Emergency Services and Public Protection James Rovella appeal from the district court's order granting a preliminary injunction ordering that the Governor repeal, in light of the COVID-19 pandemic, a provision to suspend collection of fingerprints in connection with applications for authorization to obtain firearms. The injunction also ordered that the Governor repeal that provision of the executive order and that the DESPP Commissioner resume fingerprinting services at that agency.The Second Circuit vacated the preliminary injunction and concluded that: (1) with respect to the individual plaintiffs, the preliminary injunction motion became moot in the district court; and (2) CCDL lacked organizational standing. Because the motion was moot and CCDL lacked standing, the district court had no jurisdiction to issue the preliminary injunction. View "Connecticut Citizens Defense League, Inc. v. Lamont" on Justia Law

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The Second Circuit granted 1-800 Contacts' petitions for review of the FTC's final order finding that agreements between 1-800 Contacts and various competitors to, among other things, refrain from bidding on "keyword" search terms for internet advertisements, violate Section 5 of the Federal Trade Commission Act (FTC Act).The court held that, although trademark settlement agreements are not immune from antitrust scrutiny, the FTC (1) improperly considered the agreements to be "inherently suspect" and (2) incorrectly concluded that the challenged agreements are a violation of the FTC Act under the "rule of reason." In this case, where the restrictions that arise are born of typical trademark settlement agreements, the court cannot overlook the challenged agreements' procompetitive goal of promoting trademark policy. In light of the strong procompetitive justification of protecting 1-800 Contacts' trademarks, the court concluded that the challenged agreements merely regulate and perhaps thereby promote competition. Therefore, the court stated that they do not constitute a violation of the Sherman Act and thus an asserted violation of the FTC Act fails of necessity. Accordingly, the court vacated the FTC's final order and remanded to the Commission with orders to dismiss the administrative complaint. View "1-800-Contacts, Inc. v. Federal Trade Comission" on Justia Law

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The Superintendent of the New York State Department of Financial Services (DFS) filed suit against the Office of the Comptroller of the Currency and the U.S. Comptroller of the Currency (together, the "OCC"), challenging the OCC's decision to begin accepting applications for special-purpose national bank (SPNB) charters from financial technology companies (fintechs) engaged in the "business of banking," including those that do not accept deposits. The district court ultimately entered judgment in favor of DFS, setting aside OCC's decision.The Second Circuit reversed, concluding that DFS lacks Article III standing because it failed to allege that OCC's decision caused it to suffer an actual or imminent injury in fact. The court explained that the Fintech Charter Decision has not implicated the sorts of direct preemption concerns that animated DFS's cited cases, and it will not do so until OCC receives an SPNB charter application from or grants such a charter to a non-depository fintech that would otherwise be subject to DFS's jurisdiction. The court was also unpersuaded that DFS faces a substantial risk of suffering its second alleged future injury—that it will lose revenue acquired through annual assessments. Because DFS failed to adequately allege that it has Article III standing to bring its Administrative Procedure Act claims against OCC, those claims must be dismissed without prejudice.The court also found that DFS's claims are constitutionally unripe for substantially the same reason. Finally, the court lacked jurisdiction to decide the remaining issues on appeal. Accordingly, the court remanded to the district court with instructions to enter a judgment of dismissal without prejudice. View "Lacewell v. Office of the Comptroller of the Currency" on Justia Law

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Plaintiffs, a group of nursing homes that participate in both the Medicare and Medicaid programs, challenge the legality of DHS's Final Rule permitting survey teams conducting certain inspections of nursing homes not to include a registered nurse. The district court dismissed plaintiffs' claims, brought under the Medicare and Medicaid Acts, for lack of subject-matter jurisdiction based on claim-channeling and jurisdiction-stripping provisions governing claims arising under the Medicare Act.The Second Circuit reversed, concluding that the district court has jurisdiction under 28 U.S.C. 1331 over plaintiffs' claim arising under the Medicaid Act, which does not incorporate the same claim-channeling and jurisdiction-stripping provisions as the Medicare Act. The court explained that the Medicare Act's review provisions do not preclude plaintiffs from challenging the Final Rule in federal court because their challenge is independently rooted in the Medicaid Act. Furthermore, plaintiffs' Medicaid Act claim is not inextricably intertwined with a Medicare Act claim for benefits or compliance determination, and the government's policy rationale does not support claim channeling and jurisdiction stripping in this case. Accordingly, the court remanded for further proceedings. View "Avon Nursing & Rehabilitation v. Becerra" on Justia Law

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The Second Circuit affirmed the district court's dismissal of the operative amended complaints in two actions seeking to hold defendant bank liable under the Antiterrorism Act of 1990 (ATA), for providing banking services to a charitable organization with alleged ties to Hamas, a designated Foreign Terrorist Organization (FTO) alleged to have committed a series of terrorist attacks in Israel in 2001-2004. The actions also seek to deny leave to amend the complaints to allege aiding-and-abetting claims under the Justice Against Sponsors of Terrorism Act (JASTA).The court concluded that 18 U.S.C. 2333(a) principles announced in Linde v. Arab Bank, PLC, 882 F.3d 314 (2d Cir. 2018), were properly applied here. The court explained that, in order to establish NatWest's liability under the ATA as a principal, plaintiffs were required to present evidence sufficient to support all of section 2331(1)'s definitional requirements for an act of international terrorism. The court saw no error in the district court's conclusion that plaintiffs failed to proffer such evidence and thus NatWest was entitled to summary judgment dismissing those claims. The court also concluded that the district court appropriately assessed plaintiffs' request to add JASTA claims, given the undisputed evidence adduced, in connection with the summary judgment motions, as to the state of NatWest's knowledge. Therefore, based on the record, the district court did not err in denying leave to amend the complaints as futile on the ground that plaintiffs could not show that NatWest was knowingly providing substantial assistance to Hamas, or that NatWest was generally aware that it was playing a role in Hamas's acts of terrorism. The court dismissed the cross-appeal as moot. View "Weiss v. National Westminster Bank PLC" on Justia Law

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The City filed suit against five multinational oil companies under New York tort law seeking to recover damages for the harms caused by global warming. In this case, the City asserts that its taxpayers should not have to shoulder the burden of financing the City's preparations to mitigate the effects of global warming. Rather, the City suggests that a group of large fossil fuel producers are primarily responsible for global warming and should bear the brunt of these costs.The Second Circuit held that municipalities may not utilize state tort law to hold multinational oil companies liable for the damages caused by global greenhouse gas emissions. The court explained that global warming is a uniquely international concern that touches upon issues of federalism and foreign policy. Consequently, it calls for the application of federal common law, not state law. The court also held that the Clean Air Act grants the Environmental Protection Agency – not federal courts – the authority to regulate domestic greenhouse gas emissions. Therefore, federal common law actions concerning such emissions are displaced. Finally, the court held that while the Clean Air Act has nothing to say about regulating foreign emissions, judicial caution and foreign policy concerns counsel against permitting such claims to proceed under federal common law absent congressional direction. Because no such permission exists, the court concluded that each of the City's claims is barred and the complaint must be dismissed. View "City of New York v. Chevron Corp." on Justia Law