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

Gordon Clark, acting on his own behalf and as the executor of his late wife’s estate, filed a lawsuit against Wells Fargo, Santander Bank, and other defendants, alleging various tort claims and violations of federal law related to the foreclosure of his wife’s home. The United States District Court for the District of Connecticut ordered Clark to obtain outside counsel to represent the estate, as it had other beneficiaries and creditors besides Clark.The district court reviewed the probate records and concluded that Clark, a pro se litigant, could not represent the estate due to the presence of other beneficiaries and creditors, including Santander Bank. The court directed Clark to retain counsel for the estate by a specific date, failing which his claims on behalf of the estate would be dismissed. Clark’s motion for reconsideration was granted, but the court adhered to its decision. Clark’s second motion for reconsideration was denied, leading him to appeal.The United States Court of Appeals for the Second Circuit reviewed the case. The court held that it had jurisdiction under the collateral order doctrine to review the district court’s rulings denying an estate representative’s motion to proceed pro se. The standard of review for such decisions was determined to be de novo, as they involve the application of law to the facts of a given dispute. Applying de novo review, the court concluded that the district court did not err in denying Clark’s motion to proceed pro se, as the estate had other beneficiaries and creditors. Consequently, the Second Circuit affirmed the orders of the district court. View "Clark v. Santander Bank, N.A." on Justia Law

In 2020, East Fork Funding LLC filed a quiet title action against U.S. Bank, N.A., regarding a mortgage recorded against East Fork’s property. The mortgage had been subject to three foreclosure actions, two of which were voluntarily discontinued by the mortgagee. The district court granted summary judgment in favor of East Fork, holding that under the Foreclosure Abuse Prevention Act (FAPA), enacted in December 2022, the voluntary discontinuances did not reset the six-year statute of limitations for bringing a foreclosure action. Consequently, the statute of limitations continued to run from the commencement of the first foreclosure action in 2010 and expired six years later, entitling East Fork to quiet title.The United States District Court for the Eastern District of New York reviewed the case and granted summary judgment in favor of East Fork. The court held that FAPA applied retroactively to the voluntary discontinuances, meaning they did not reset the statute of limitations. Therefore, the statute of limitations began running with the filing of the 2010 action and expired before East Fork commenced the quiet title action. The court also found that retroactive application of FAPA did not violate the U.S. Constitution and that even under pre-FAPA law, the statute of limitations had expired.The United States Court of Appeals for the Second Circuit is currently reviewing the case. The main issue on appeal is whether FAPA applies retroactively to voluntary discontinuances that occurred before its enactment. The court has certified this question to the New York Court of Appeals, as it is a novel question of state law necessary to resolve the appeal. The Second Circuit seeks clarification on whether Sections 4 and/or 8 of FAPA apply to a unilateral voluntary discontinuance taken prior to the Act’s enactment. The court retains jurisdiction pending the New York Court of Appeals' response. View "E. Fork Funding LLC v. U.S. Bank, Nat'l Ass'n" on Justia Law

The case involves a Chapter 7 bankruptcy proceeding where the United States Bankruptcy Court for the Southern District of New York approved a settlement agreement among the trustee of the bankruptcy estate, the debtor, and other parties. The settlement released claims that appellants Richard and Marisa Stadtmauer had originally asserted in a New York state court action. The Stadtmauers alleged that the debtor, Mark Nordlicht, and others engaged in a scheme to conceal Nordlicht’s assets to avoid paying his debts. When Nordlicht filed for bankruptcy, the state court proceedings were stayed, and the trustee took possession of the Stadtmauers’ claims. The settlement included a $2.5 million payment to the estate by Nordlicht’s mother, Barbara Nordlicht, and provisions for indemnification and reimbursement of legal fees.The Stadtmauers objected to the settlement and appealed the bankruptcy court’s decision to the United States District Court for the Southern District of New York. They argued that the state court had granted them valid liens on two of Nordlicht’s properties, giving them secured property rights. They contended that the trustee lacked the authority to settle their claims, that the settlement violated due process and bankruptcy principles, and that the bankruptcy court abused its discretion in approving the settlement. The district court rejected these arguments and affirmed the approval of the settlement agreement.The United States Court of Appeals for the Second Circuit reviewed the case and agreed with the district court. The court held that the trustee had the authority to settle the Stadtmauers’ claims because they were general claims that were property of the bankruptcy estate. The court also found that the settlement did not violate the principles of creditor priority as articulated in Czyzewski v. Jevic Holding Corp. because the validity of the Stadtmauers’ liens was in bona fide dispute. The court concluded that the bankruptcy court did not abuse its discretion in approving the settlement and affirmed the district court’s judgment. View "In re Nordlicht" on Justia Law

Windward Bora LLC purchased a junior promissory note signed by Constance and Royston Browne, secured by a junior mortgage on real property. Windward's predecessor had already obtained a final judgment of foreclosure on the junior mortgage. Without seeking leave from the court that issued the foreclosure, Windward filed a diversity action to recover on the promissory note. Both parties moved for summary judgment.The United States District Court for the Southern District of New York granted the Brownes' motion for summary judgment and denied Windward's. The court found diversity jurisdiction by comparing the national citizenship of the Brownes with that of Windward’s sole member, a U.S. lawful permanent resident, and concluded that state domiciles were irrelevant. It also held that the suit was precluded by New York’s election-of-remedies statute because Windward did not seek leave before suing on the note after its predecessor had already sued on the mortgage. The court found no special circumstances to excuse Windward’s failure.The United States Court of Appeals for the Second Circuit reviewed the case. It agreed with the district court that diversity jurisdiction was present but clarified that the state domiciles of the parties were relevant. The court resolved a divide among district courts, stating that there is no diversity jurisdiction in a suit between U.S. citizens and unincorporated associations with lawful permanent resident members if such jurisdiction would not exist in a suit between the same U.S. citizens and those permanent resident members as individuals. The court also affirmed the district court’s decision to grant summary judgment for the Brownes under New York’s election-of-remedies statute, finding no special circumstances to excuse Windward’s failure to seek leave. The judgment of the district court was affirmed. View "Bora v. Browne" on Justia Law

A group of citizens and a civic organization, Citizens United To Protect Our Neighborhoods (CUPON), filed a lawsuit against the Village of Chestnut Ridge, New York, alleging that the village violated the Establishment Clause of the First Amendment by enacting a new zoning law related to places of worship in 2019. The plaintiffs claimed that the new law favored religious uses over secular uses, thus violating the constitutional separation of church and state.The case was initially heard in the United States District Court for the Southern District of New York, where it was dismissed. The district court found that none of the plaintiffs had constitutional standing to pursue the claim. The court determined that the individual plaintiffs lacked municipal-taxpayer, direct-harm, or denial-of-benefits standing, and that CUPON lacked associational or organizational standing.The case was then appealed to the United States Court of Appeals for the Second Circuit. The appellate court agreed with the lower court's decision, affirming that neither the individual plaintiffs nor CUPON had any form of standing. The court found that the plaintiffs failed to demonstrate a measurable appropriation or loss of revenue attributable to the challenged activities, a personal constraint or control under the challenged law, or a denial of benefits. The court also found that CUPON failed to show that it had suffered an injury in fact that was distinct and palpable. Therefore, the court affirmed the district court's judgment, dismissing the plaintiffs' complaint for lack of standing. View "Citizens United To Protect Our Neighborhoods v. Village of Chestnut Ridge" on Justia Law

The case was a lawsuit filed by Janet and Joseph Harvey against the Permanent Mission of the Republic of Sierra Leone to the United Nations. The Harveys alleged that they were harmed by faulty renovations at the Mission's headquarters, which is located next door to their home in Manhattan. The Mission sought to dismiss the complaint, arguing that the district court lacked subject-matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA). The district court, however, denied the Mission's motion to dismiss, holding that two exceptions to the Mission's immunity applied: the commercial activity exception and the tortious activity exception.The United States Court of Appeals for the Second Circuit affirmed the district court's decision. The Appeals Court held that the commercial activity exception applied because the Harveys' claims were based upon the Mission's allegedly faulty contractual renovations, which is an activity that a private party can, and often does, do. The court did not need to address the tortious activity exception as the commercial activity exception was sufficient to affirm the district court's decision. The Mission, therefore, was not immune from the lawsuit under the FSIA. View "Harvey v. Permanent Mission of the Republic of Sierra Leone" on Justia Law

The case pertains to Ariel Jimenez, who owned and operated a tax preparation business in Bronx, New York. Between 2009 and 2015, Jimenez led a large-scale tax fraud and identity theft scheme, purchasing stolen identities of children to falsely claim them as dependents on clients' tax returns. Through this scheme, Jimenez obtained millions of dollars, which he laundered by structuring bank deposits, investing in real estate properties, and transferring the properties to his parents and limited liability companies. Following a jury trial, Jimenez was convicted of conspiracy to defraud the United States with respect to tax-return claims, conspiracy to commit wire fraud, aggravated identity theft, and money laundering.On appeal, Jimenez raised two issues. First, he claimed that the district court’s jury instruction regarding withdrawal from a conspiracy was erroneous. Second, he alleged that the evidence supporting his conspiracy convictions was insufficient. The United States Court of Appeals For the Second Circuit affirmed the conviction. The court held that the district court’s jury instruction on withdrawal from a conspiracy was a correct statement of the law and that the evidence supporting Jimenez's conspiracy convictions was sufficient. The court found that Jimenez had failed to effectively withdraw from the conspiracy as he continued to benefit from it. View "United States v. Jimenez" on Justia Law

The United States Court of Appeals for the Second Circuit affirmed the decision of the United States District Court for the Eastern District of New York, which dismissed the plaintiffs' complaint. The plaintiffs, Ben and Hank Brinkmann and their company Mattituck 12500 LLC, had alleged that the Town of Southold, New York's use of eminent domain to take their land for public park purposes was a pretextual and bad faith exercise of the Takings Clause of the Fifth Amendment. The plaintiffs argued that the real motive was to prevent them from constructing a hardware store on the property.The Court of Appeals ruled that if a property is taken for a public purpose, in this case, the creation of a park, courts do not inquire into alleged pretexts and motives. The court found that a public park serves a public purpose, and thus, the taking of the property was permissible under the Takings Clause of the Fifth Amendment. It concluded that the plaintiffs' allegations of pretext and bad faith did not violate the Takings Clause as the intended use of the property was for a public park. The court stated that a pretextual taking would only violate the Takings Clause if the actual purpose of the taking was for a non-public (i.e., private) use, which was not the case here. View "Brinkmann v. Town of Southold, New York" on Justia Law

The United States Court of Appeals for the Second Circuit affirmed the United States District Court for the Southern District of New York's dismissal of a lawsuit brought by BMG Monroe I, LLC. BMG, a developer, had sued the Village of Monroe, New York, alleging that the Village's denial of its applications for building permits on five lots violated the Fair Housing Act and the Equal Protection Clause due to a discriminatory animus towards the Hasidic Jewish community. The Village denied the applications due to non-compliance with the architectural criteria established in the Smith Farm Project's approval conditions. The Court of Appeals agreed with the district court that the claims were unripe because BMG had not exhausted its administrative remedies. In order to satisfy the finality requirement under ripeness doctrine, BMG needed to appeal the adverse planning-board decision to a zoning board of appeals and submit at least one meaningful application for a variance. BMG could not claim that further actions were futile based on the Village's indication that it would likely not be receptive to a variance request that had yet to be made. View "BMG Monroe I, LLC v. Village of Monroe" on Justia Law

In the case before the United States Court of Appeals for the Second Circuit, Ateres Bais Yaakov Academy of Rockland (ABY) sued the Town of Clarkstown, George Hoehmann, CUPON Inc., and Citizens United to Protect Our Neighborhoods of Greater Nanuet Inc. ABY, a religious educational institution, planned to purchase property in Clarkstown, New York, to establish an Orthodox Jewish school. It alleged that the Defendants manipulated an ostensibly neutral building permit application and zoning appeals process to block this construction. The district court dismissed the complaint for lack of subject matter jurisdiction, concluding that ABY's religious discrimination and civil rights claims were not ripe as it had not received a final decision from the town’s Zoning Board of Appeals (ZBA) and that the lost-contract injury underpinning ABY’s tortious interference claim was not traceable to the Town Defendants.In this appeal, the Second Circuit disagreed with the district court. The Second Circuit found that the ZBA's refusal to adjudicate ABY's appeal of its permit application constituted a final decision for ripeness purposes. The court also determined that ABY had plausibly alleged a causal connection between the Town Defendants’ actions and the injuries resulting from ABY's lost contract with Grace Church. Therefore, the Second Circuit reversed the district court's judgment and remanded the case for further proceedings. View "Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstoawn" on Justia Law