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

Articles Posted in Government & Administrative Law
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On expedited interlocutory appeal, the Second Circuit affirmed in substantial part the district court's order denying President Trump's motion for a preliminary injunction preventing compliance with subpoenas seeking his financial records and denying President Trump's motion for a stay pending appeal. Specifically at issue was the lawfulness of three subpoenas issued by the House Committee on Financial Services and the House Permanent Select Committee on Intelligence to two banks, Deutsche Bank AG and Capital One Financial Corporation, seeking financial records of President Trump, members of his family, and the Trump Organization (collectively, "appellants"), and financial records from the Trump Organization and affiliated entities. The court held that those seeking to preliminarily enjoin compliance with subpoenas issued by congressional committees exercising their constitutional and duly authorized power to subpoena documents in aid of both regulatory oversight and consideration of potential legislation must satisfy the more rigorous likelihood‐of‐success standard. In this case, although appellants have established irreparable injury, the court held that appellants have not shown a likelihood of success on any of their statutory and constitutional claims. The court also held that the balance of the hardships and equities did not decidedly tip in favor of appellants, and the public interest in vindicating the committees’ constitutional authority was clear and substantial. Therefore, the court affirmed the district court's order in substantial part to the extent that it denied a preliminary injunction and ordered prompt compliance with the subpoenas, except that the case is remanded to a limited extent for implementation of the procedure set forth in this opinion concerning the nondisclosure of sensitive personal information and a limited opportunity for appellants to object to disclosure of other specific documents within the coverage of those paragraphs of the subpoenas listed in this opinion. The court dismissed as moot the appeal from the order to the extent that it denied a stay pending appeal. View "Trump v. Deutsche Bank AG" on Justia Law

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The Second Circuit vacated the district court's judgment granting Wells Fargo's motion to dismiss. Relators alleged that the district court erred in concluding that fraudulent loan requests knowingly presented to one or more of the Federal Reserve System's twelve Federal Reserve Banks (FRBs) are not "claims" within the meaning of the False Claims Act (FCA), and thus do not give rise to FCA liability. The court held that the FCA's definition of a "claim" is capacious. The court explained that, although FRB personnel are not officers or employees of the United States, the FRBs administered the Federal Reserve System's emergency lending facilities on behalf of the United States, using authority delegated by Congress and money provided by the Board of Governors of the Federal Reserve System. Therefore, the court concluded that the FRBs are agents of the United States within the meaning of 31 U.S.C. 3729(b)(2)(A)(i). The court also held that the money requested by defendants and other Fed borrowers is provided by the United States to advance a Government program or interest within the meaning of section 3729(b)(2)(A)(ii). View "United States v. Wells Fargo" on Justia Law

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Petitioners challenged the SEC's denial of whistleblower awards following a $50 million settlement the SEC reached with Deutsche Bank AG. The Second Circuit denied the petitions for review, holding that it was not arbitrary or capricious for the SEC to conclude that Petitioner Doe's submissions did not provide "original information to the Commission that led to" a successful enforcement action, because Doe's submissions were not used by the Deutsche Bank team. Therefore, the SEC was not equitably estopped from denying Doe's award. The court also held that the SEC did not violate Doe's due process rights by failing to provide Doe with certain materials, and the SEC did not act arbitrarily or capriciously by favoring Claimant 2's submissions over Doe's. Furthermore, petitioners were not entitled to an award for the information they submitted in their Form TCR. Finally, the court held that petitioners' remaining claims were without merit. View "Kilgour v. SEC" on Justia Law

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Presidential immunity does not bar the enforcement of a state grand jury subpoena directing a third party to produce non‐privileged material, even when the subject matter under investigation pertains to the President. President Trump filed suit seeking declaratory and injunctive relief to prevent the District Attorney of New York County from enforcing a grand jury subpoena served on a third-party custodian of the President's financial records. The district court dismissed the complaint under Younger v. Harris, 401 U.S. 37 (1971), abstaining from exercising jurisdiction. In the alternative, the district court held that the President was not entitled to injunctive relief. The Second Circuit held that Younger abstention did not apply to the circumstances here, because the President raised novel and serious claims that were more appropriately adjudicated in federal court. The court held, however, that any presidential immunity from state criminal process did not extend to investigative steps like the grand jury subpoena in this case. Accordingly, the court affirmed as to the immunity question, vacated as to the Younger abstention issue, and remanded for further proceedings. View "Trump v. Vance" on Justia Law

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At issue are motions by several news organizations to intervene in a pending appeal and to unseal an unredacted letter filed by Deutsche Bank on August 27, 2019. Deutsche Bank filed the letter in an appeal from an order denying a preliminary injunction sought by President Trump and others to prevent compliance with subpoenas seeking production of numerous documents, including tax returns. The Second Circuit granted the motions to intervene, because news media have a right to intervene to seek unsealing of documents filed in a court proceeding. However, the court denied the motions for unsealing, because the sealed letter was not relevant to any issue in the underlying appeal and thus it was not a judicial document within the meaning of the decisions requiring unsealing of documents with a court. Furthermore, the letter was not a record of any court which, absent special circumstances, would be available for public scrutiny. View "Trump v. Deutsche Bank AG" on Justia Law

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The Times filed suit under the Freedom of Information Act (FOIA), seeking five DOJ memoranda and accompanying exhibits. The requested documents detail DOJ's legal reasoning and factual analysis in making the determinations, first, that it would formally investigate only two of more than one hundred alleged instances of abuse of detainees allegedly held overseas in the custody of the CIA and that it would not bring criminal charges in either of the two cases. At issue are the two public statements made by the then-Attorney General Eric Holder. The district court granted The Times' motion for summary judgment, holding that Attorney General Holder's public statements expressly adopted the memoranda by relying on their reasoning. The Second Circuit held American Civil Liberties Union v. National Security Agency, clarified that the "express adoption" exception to Exemption 5 does not apply in the instant context. The court also held that the government waived the privilege over the sections of the memoranda and exhibits relating to the conclusion that a number of the detainees investigated were not in CIA custody. Because Holder referenced this fact in both of his public statements, the court's holding applies to all five of the memoranda and associated exhibits. However, the court held that none of the remaining three statements at issue divulges the content of the memoranda with enough specificity to constitute waiver of the work product privilege. The court also held that Holder’s references to U.S. Attorney John Durham's reports, although clearly spoken with an intent to explain the Department's decision not to prosecute, did not constitute "testimonial use" of the reports and therefore did not waive the work product privilege over the documents. Furthermore, Holder's use of Durham's memoranda was not so unfair as to implicate the same concerns in John Doe Co. v. United States. Accordingly, the court affirmed in part, reversed in part, and remanded. View "The New York Times Co. v. United States Department of Justice" on Justia Law

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Owners and operators of businesses in the hospitality industry appealed the district court's dismissal based on lack of subject matter jurisdiction of their complaint, alleging that President Trump violated the Domestic and Foreign Emoluments Clauses of the United States Constitution. Specifically, plaintiffs alleged that they have been and will be injured because foreign and domestic government entities that patronize Washington, D.C. and New York hotels, restaurants, and event spaces patronize Trump establishments in the hope of enriching the President and earning a reward from him through official Presidential action favorable to their governments. The Second Circuit vacated and held that the district court did not apply the law correctly in finding that it lacked jurisdiction to decide the case, and that plaintiffs satisfied all three prongs of Article III standing. The court held that plaintiffs adequately alleged an injury in fact, their injury was fairly traceable to President Trump, and their injury was redressable by injunctive relief. The court noted that the Fourth Circuit reached the opposite conclusion in a closely analogous case, but found its arguments to be unpersuasive. The court noted that whether a lawsuit has political motivations was irrelevant to the determinative issues. The court also held that the district court erred in dismissing the complaint on the theory that plaintiffs' injuries fall outside the zone of interests of the Emoluments Clauses. The court held that the zone of interests test does not, as the district court believed, implicate the district court's subject matter jurisdiction, and the Supreme Court's precedents make clear that plaintiffs' injuries were not outside the zone of interests of the Emoluments Clauses. Finally, the court found the district court's prudential considerations unpersuasive, disagreeing with the district court's determination that the case was non-justiciable and not ripe for adjudication. Accordingly, the court remanded for further proceedings. View "Citizens for Responsibility and Ethics in Washington v. Trump" on Justia Law

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President Trump engaged in unconstitutional viewpoint discrimination by utilizing Twitter's blocking function to limit certain users' access to his social media account, which is otherwise open to the public at large, because he disagrees with their speech. The First Amendment does not permit a public official who utilizes a social media account for all manner of official purposes to exclude persons from an otherwise‐open online dialogue because they expressed views with which the official disagrees. In this case, the government concedes that individual plaintiffs were blocked from President Trump's Twitter account after they criticized the President or his policies, and that they were blocked as a result of their criticism. The Second Circuit affirmed the district court's grant of summary judgment in favor of plaintiffs and entry of a declaratory judgment that the blocking of the individual plaintiffs from the account because of their expressed political views violates the First Amendment. View "Knight First Amendment Institute at Columbia University v. Trump" on Justia Law

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Under Exemption 5 of the Freedom of Information Act (FOIA), an agency "adopts" a previously privileged document where the agency's statements or behavior indicate that the agency treats the document as binding authority, and "incorporates" a previously privileged document "by reference" where a formal agency opinion or decision explicitly relies on that document and its reasoning. The ACLU filed suit under FOIA, seeking disclosure of certain documents concerning the legal authority for certain national security programs from the Government. The Second Circuit affirmed the district court's grant of summary judgment for the Government and held that (1) a document reflects an agency's "working law" when the agency regards that document as functionally binding authority, and "adoption" and "incorporation by reference" are means by which an otherwise privileged document becomes an agency's "working law;" (2) "express adoption" is a basis for disclosure of a previously privileged document where an agency's statements indicate that it now acts (or refrains from acting) pursuant to the document's functionally binding authority; (3) "incorporation by reference" is a basis for disclosure of a previously privileged document where an agency's formal opinion or ruling explicitly relies on that document and its reasoning in reaching a decision; (4) OLC 10 was properly withheld under FOIA Exemption 5; (5) the six intelligence program documents at issue were properly withheld under FOIA Exemptions 1 (classified information) and 3 (material shielded from disclosure by other statutes); and (6) because FOIA decisions must be evaluated as of the time of the agency decision, courts should not order reprocessing simply to reassure themselves that a FOIA decision remains current in light of subsequent disclosures. View "American Civil Liberties Union v. National Security Agency" on Justia Law

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Plaintiffs challenged the district court's dismissal of their complaint for failure to exhaust administrative remedies and, in the alternative, failure to state a claim. Although plaintiffs challenged the inclusion of marijuana on Schedule I of the federal Controlled Substances Act, they did not first pursue reclassification through the administrative process defined in the Act. The Second Circuit held that plaintiffs' action was premature, because plaintiffs should attempt to exhaust their administrative remedies before seeking relief from this court. However, the court noted that it was troubled by the DEA's history of dilatory proceedings and thus, rather than dismiss the case, the court held it in abeyance and retained jurisdiction in this panel to take whatever action might become appropriate if the DEA does not act with adequate dispatch. View "Washington v. Barr" on Justia Law