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

In May 2020, at the height of the pandemic, New York City amended its Residential and Non-Residential Harassment Laws, to prohibit “threatening” tenants based on their “status as a person or business impacted by COVID-19, or . . . receipt of a rent concession or forbearance for any rent owed during the COVID-19 period,” and added the “Guaranty Law,” which renders permanently unenforceable personal liability guarantees of commercial lease obligations for businesses that were required to cease or limit operations pursuant to a government order. For rent arrears arising during March 7, 2020-June 30, 2021, the Guaranty Law extinguishes a landlord’s ability to enforce a personal guaranty.In a suit under 42 U.S.C. 1983, the plaintiffs alleged that the Harassment Amendments violated the Free Speech and Due Process Clauses of the U.S. and New York Constitutions by impermissibly restricting commercial speech in the ordinary collection of rents and by failing to provide fair notice of what constitutes threatening conduct. Plaintiffs further alleged that the Guaranty Law violated the Contracts Clause, which prohibits “State . . . Law[s] impairing the Obligation of Contracts.” The district court dismissed the suit.The Second Circuit affirmed in part, agreeing that the plaintiffs failed to allege plausible free speech and due process claims. The court reinstated the challenge to the Guaranty Law. The Guaranty Law significantly impairs personal guaranty agreements; there are at least five serious concerns about that law being a reasonable and appropriate means to pursue the professed public purpose. View "Melendez v. City of New York" on Justia Law

The Plaintiff States filed suit alleging that the $10,000 cap on the federal income tax deduction for money paid in state and local taxes (SALT), enacted as part of the 2017 Tax Cuts and Jobs Act, violates the United States Constitution.The Second Circuit affirmed the district court's grant of defendants' motion to dismiss for failure to state a claim and denial of the States' cross-motion for summary judgment. The court concluded that the States had standing and that their claims were not barred by the Anti-Injunction Act (AIA). However, the court rejected the States' contention that the SALT deduction is constitutionally required by the text of Article I, Section 8 and the Sixteenth Amendment of the Constitution, and thus the SALT deduction cap effectively eliminates a constitutionally mandated deduction for taxpayers. Rather, the court concluded that the Constitution itself does not limit Congress's authority to impose a cap. In this case, the States' arguments mimic those that the Supreme Court rejected in South Carolina v. Baker, 485 U.S. 505, 515–27 9 (1988). In Baker, the Court held that Congress had the power to tax interest earned on state-issued bonds even though it had not previously done so. The court also concluded that the SALT deduction cap is not coercive in violation of the Tenth Amendment or the principle of equal sovereignty. View "New York v. Yellen" on Justia Law

The Second Circuit held that a report evaluating the Indian Health Service's management and administration is not a "medical quality assurance record" under 25 U.S.C. 1675, and thus not exempt from disclosure under the Freedom of Information Act (FOIA). This case arose from plaintiffs' request of a report from Indian Health Services under FOIA, and the Department's subsequent denial of the FOIA request pursuant to section 1675. The court found the Department's remaining arguments to be without merit and affirmed the district court's grant of summary judgment to plaintiffs. View "The New York Times Co. v. U.S. Department of Health and Human Services" on Justia Law

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

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

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

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

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

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

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