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

Defendant, a citizen and resident of France charged with violating the Commodity Exchange Act, appealed the district court's memorandum order applying the fugitive disentitlement doctrine and denying her motions to dismiss the indictment on grounds of extraterritoriality and due process.After determining that it has jurisdiction to review the order disentitling defendant, the court reversed and remanded for further proceedings to consider or reconsider the merits of her motions to dismiss. The court agreed with defendant that it has jurisdiction to review the fugitive disentitlement ruling pursuant to the collateral order doctrine. The court held that defendant is not a fugitive, and that, even if she were, the district court abused its discretion in concluding that disentitlement was justified. The court explained that fugitivity implies some action by defendant to distance herself from the United States or frustrate arrest, but she took no such action. The court concluded, however, that it lacked jurisdiction to review the merits of the extraterritoriality and due process challenges and dismissed the appeal to that extent. View "United States v. Sindzingre" on Justia Law

Halkbank, a commercial bank that is majority-owned by the Government of Turkey, was charged with crimes related to its participation in a multi-year scheme to launder billions of dollars' worth of Iranian oil and natural gas proceeds in violation of U.S. sanctions against the Government of Iran and Iranian entities and persons. Halkbank moved to dismiss the indictment but the district court denied the motionThe Second Circuit held that it has jurisdiction over the instant appeal under the collateral order doctrine. The court also held that, even assuming the Foreign Sovereign Immunities Act (FSIA) applies in criminal cases—an issue that the court need not, and did not, decide today—the commercial activity exception to FSIA would nevertheless apply to Halkbank's charged offense conduct. Therefore, the district court did not err in denying Halkbank’s motion to dismiss the Indictment. The court further concluded that Halkbank, an instrumentality of a foreign sovereign, is not entitled to immunity from criminal prosecution at common law. View "United States v. Bankasi" on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiff's claims as time-barred under the two year statute of limitations set forth in the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention), and denial of plaintiff's motion to amend the complaint. Plaintiff filed suit against American and others, alleging that, while boarding a flight from Paris, France, to Dallas, Texas, on December 28, 2015, a flight attendant struck him, causing injury.The court concluded that, because plaintiff alleged that he was injured while boarding an international flight, his claims fall under the Montreal Convention, a multilateral treaty that "applies to all international carriage of persons, baggage or cargo performed by aircraft." Furthermore, the district court did not abuse its discretion in denying leave to amend. The court considered plaintiff's remaining arguments and found them to be without merit. View "Cohen v. American Airlines, Inc." on Justia Law

In 2013, Nike and its subsidiary, Converse, brought a trademark infringement action under the Lanham Act against hundreds of participants in Chinese counterfeiting networks. The district court entered five prejudgment orders, a default judgment, and one postjudgment order against defendants, who never appeared in court. Each order enjoined defendants and all persons acting in concert or in participation with any of them from transferring, withdrawing or disposing of any money or other assets into or out of defendants' accounts regardless of whether such money or assets are held in the U.S. or abroad. In 2019, Nike's successor-in-interest, Next, moved to hold appellees—six nonparty Chinese banks—in contempt for failure to implement the asset restraints and for failure to produce certain documents sought in discovery.The Second Circuit affirmed the district court's judgment, holding that the district court did not abuse its discretion in denying Next's motion for contempt sanctions against the Banks because (1) until the contempt motion, Nike and Next never sought to enforce the asset restraints against the Banks; (2) there is a fair ground of doubt as to whether, in light of New York's separate entity rule and principles of international comity, the orders could reach assets held at foreign bank branches; (3) there is a fair ground of doubt as to whether the Banks' activities amounted to "active concert or participation" in defendants' violation of the asset restraints that could be enjoined under Federal Rule of Civil Procedure 65(d); and (4) Next failed to provide clear and convincing proof of a discovery violation. View "Next Investments, LLC v. Bank of China" on Justia Law

Plaintiffs, American purchasers of bulk Vitamin C, filed a class action alleging that four Chinese exporters of Vitamin C conspired to inflate prices and restrict supply in violation of the Sherman Act and the Clayton Act. The district court denied defendants' motion to dismiss on the basis of the act of state doctrine, foreign sovereign compulsion, and international comity. After the district court denied defendants' motion for summary judgment, the case proceeded to trial where all defendants settled except for Hebei and its parent company NCPG. Following the jury verdict, the district court entered treble damages against Hebei and NCPG and denied their renewed motion for judgment as a matter of law. The Second Circuit reversed. The Supreme Court then reversed the Second Circuit's judgment and remanded.On remand from the Supreme Court, the Second Circuit once again concluded that this case should be dismissed on international comity grounds. Giving careful consideration but not conclusive deference to the views of the Ministry of Commerce of the People's Republic of China, the court read the relevant Chinese regulations—as illuminated by contemporaneous administrative documents and industry reports—to have required defendants to collude on Vitamin C export prices and quantities as part and parcel of China's export regime for Vitamin C. The court balanced this true conflict between U.S. and Chinese law together with other established principles of international comity, declining to construe U.S. antitrust law to reach defendants' conduct. Accordingly, the court reversed and remanded with instructions to dismiss the case. View "Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd." on Justia Law

Plaintiffs and their family members were injured or killed in attacks carried out by Hamas, which the United States has designated as a foreign terrorist organization. They sued BLOM Bank for aiding and abetting Hamas’s attacks by providing financial services to customers affiliated with Hamas, in violation of the Anti-Terrorism Act (ATA), 18 U.S.C. 2333, as amended by the Justice Against Sponsors of Terrorism Act (JASTA), section 2333(d)(2). The district court dismissed. concluding that Plaintiffs failed to plausibly allege BLOM aided and abetted Hamas’s attacks in violation of JASTA.The Second Circuit affirmed. While the district court applied the wrong standard for JASTA aiding-and-abetting liability, the complaint fails to state a claim under the correct standard. Plaintiffs plausibly alleged that the party whom BLOM aided (indirectly), Hamas, committed attacks causing the Plaintiffs’ injuries but their allegations did not support an inference that BLOM was aware of the customers’ ties with Hamas before the relevant attacks. The complaint’s references to media articles and publications on the connection to Hamas were insufficient. View "Honickman v. BLOM Bank SAL" on Justia Law

The Second Circuit affirmed the district court's July 8, 2020 Order granting an application for discovery assistance pursuant to 28 U.S.C. 1782 and the August 25, 2020 Order denying reconsideration of the same. The Fund, a Russian corporation, sought assistance from the district court to order discovery from AlixPartners for use in an arbitration proceeding brought by the Fund against Lithuania before an arbitral panel established pursuant to a bilateral investment treaty between Lithuania and Russia.The court concluded that an arbitration between a foreign state and an investor, which takes place before an arbitral panel established pursuant to a bilateral investment treaty to which the foreign State is a party, constitutes a "proceeding in a foreign or international tribunal" under 28 U.S.C. 1782; the Fund, as a party to the arbitration for which it seeks discovery assistance, is an "interested person" who may seek discovery assistance for such an arbitration under section 1782; and the district court did not abuse its discretion in finding that the Intel factors weigh in favor of granting the Fund's discovery application under section 1782. View "The Application of the Fund v. AlixPartners" on Justia Law

Gater sought to renew a default judgment, which the district court entered in 2000, that enforced a Russian arbitration award in favor of Lloyd's Underwriters against appellants. Lloyd's assigned its default judgment to Gater in 2012. The district court entered a renewal judgment in Gater's favor after concluding that it had personal jurisdiction over appellants as well as subject-matter jurisdiction over the renewal claims.The Second Circuit vacated the district court's judgment in Gater's renewal action, concluding that the district court lacked personal jurisdiction over Moldovagaz. The court explained that the Due Process Clause prohibits federal courts from exercising personal jurisdiction over Moldovagaz because Moldovagaz has no contacts with the United States. Furthermore, Moldovagaz is not an alter ego of the Republic of Moldova.The court also concluded that the district court lacked subject-matter jurisdiction over Gater's claim for renewal against the Republic of Moldova. The court explained that the Foreign Sovereign Immunities Act (FSIA) provides that federal courts lack subject matter jurisdiction over claims brought against foreign states unless one of the FSIA's immunity exceptions applies. In this case, the Republic of Moldova is a foreign state and no immunity exception applies to Gater's claims against it. Furthermore, the Republic of Moldova was not a party to the underlying arbitration agreement and no equitable theory, even assuming such theories apply under 28 U.S.C. 1605(a)(6), supports abrogating the Republic's sovereign immunity here. Accordingly, the court remanded with instructions to dismiss the renewal action for lack of jurisdiction. The court nevertheless affirmed the district court's refusal to vacate its original default judgment because appellants have failed to demonstrate that the district court had no arguable basis to exercise jurisdiction to enter that judgment. View "Gater Assets Ltd. v. AO Moldovagaz" on Justia Law

Plaintiffs filed a second amended complaint (SAC), seeking (A) to hold the bank liable as a principal under the Antiterrorism Act of 1990 (ATA) for providing banking services to Hizbollah, a designated Foreign Terrorist Organization alleged to have injured plaintiffs in a series of terroristic rocket attacks in Israel in July and August 2006; and (B) to hold the bank liable as a coconspirator or aider and abettor of Hizbollah under the Justice Against Sponsors of Terrorism Act (JASTA). The district court granted defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).The Second Circuit concluded that plaintiffs having abandoned their ATA terrorism and JASTA conspiracy claims, and thus the court addressed only their JASTA aiding-and-abetting claims. In regard to the JASTA aiding-and-abetting claims, the court found merit in plaintiffs' contentions that the district court did not correctly apply the analytical framework set out in Halberstam v. Welch, 705 F.2d 472 6 (D.C. Cir. 1983), specified by Congress as the proper legal framework for assessing such claims. The Halberstam requirements for a claim of aiding and abetting are (1) that the person whom the defendant aided must have performed a wrongful act that caused injury, (2) that the defendant must have been "generally aware of his role as part of an overall illegal or tortious activity at the time that he provide[d] the assistance," and (3) "the defendant must [have] knowingly and substantially assist[ed] the principal violation."The court concluded that the district court erred in its findings as to the plausibility of, and the permissible inferences that could be drawn from, SAC allegations of the bank's knowledge that the customers it was assisting were affiliated with Hizbollah and that it was aiding Hizbollah's terrorist activities. The court explained that the plausibility of the allegations as to LCB's knowledge of Hizbollah's terrorist activities and of the customers' affiliation with Hizbollah is sufficient to permit the inference that LCB was at least generally aware that through its money-laundering banking services to the customers, LCB was playing a role in Hizbollah's terrorist activities. Furthermore, the SAC adequately pleaded that LCB knowingly gave the customers assistance that both aided Hizbollah and was qualitatively and quantitatively substantial. Accordingly, the court vacated the district court's dismissal of the JASTA aiding-and-abetting claims and remanded for further proceedings. View "Kaplan v. Lebanese Canadian Bank" on Justia Law

In 2017, Swiss law enforcement officers seized more than a thousand pieces of ancient art owned by the plaintiffs as part of an ongoing investigation into the illegal trafficking of cultural property. The plaintiffs sued the Swiss government entities and instrumentalities in the Southern District of New York, alleging that the seizure was arbitrary and made without probable cause. The district court dismissed the cases, holding that it lacked jurisdiction over the defendants under the Foreign Sovereign Immunities Act, 28 U.S.C. 1605(a)(3).The Second Circuit affirmed, rejecting an argument that jurisdiction was proper under the statute’s “expropriation exception,” which applies in cases involving property taken by a foreign state in violation of international law. A routine law enforcement seizure does not ordinarily constitute a taking at all, let alone a taking in violation of international law, because it falls within a state’s traditional police powers. Although there are a handful of narrow exceptions to that general rule, such as when the seizure is not rationally related to a public purpose and is a pretextual attempt to nationalize property without compensation, or (has continued for an unreasonable amount of time, none of those exceptions applies here. View "Beierwaltes v. L'Office Fédérale de la Culture de la Confederation Suisse" on Justia Law