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

An Agreement was signed by ISC and by Gerber, treasurer of Nobel, under which ISC was to manage $200 million of Nobel assets; the Agreement provided for arbitration. Months later, ISC filed a petition to compel arbitration. Nobel argued that the court lacked personal jurisdiction and that the Agreement had been fraudulently procured by ISC, a firm with no history of asset management, and Gerber, who, without authority, had signed in exchange for a kickback. The district court denied the petition, noting that the American Arbitration Association had refused to arbitrate, because rules specified in the Agreement were incompatible with AAA arbitration. On remand, discovery problems arose; the court allowed withdrawal by ISC counsel; ISC filed notice of voluntary dismissal without prejudice and requested that the judge recuse himself because of his conversation with counsel about reasons for withdrawal. The court denied recusal, vacated notice of dismissal, and rescheduled the trial. ISC unsuccessfully attempted to obtain a stay. At trial, ISC declined to call witnesses or introduce evidence; the court dismissed with prejudice. The Second Circuit affirmed. Even if ISC counsel conveyed extrajudicial information, denial of recusal was appropriate. ISC’s purported voluntary dismissal was improper because Rule 41(a)(1)(A)(i) does not apply to petitions to compel arbitration. View "ISC Holding AG v. Nobel Biocare Fin. AG" on Justia Law

In 2005 Truman and partners purchased a vacant commercial building for $175,000, insured for $4,250,000 in fire-related losses. The property, without the building, was worth more than with the building. After a minor accidental fire, Truman told an employee that if it ever caught fire again, just get out. Considering leasing, Truman stated that it would make more money if it burnt. By late 2006, Truman had less than $5,000 in personal bank accounts. Premiums were paid through November 17. The building burned down November 12. Truman, Jr. confessed that he had burned the building at his father’s direction. State charges were dismissed because of inability to corroborate junior’s testimony, as required under New York law. Truman was charged with aiding and abetting arson, 18 U.S.C. 844(i); mail fraud, 18 U.S.C. 1341; use of fire in commission of a felony, 18 U.S.C. 844(h); and loan fraud, 18 U.S.C. 1341. Following a guilty verdict the district court granted acquittal and conditionally granted a new trial. The Second Circuit vacated and remanded for sentencing. Junior’s refusal to answer certain questions did not render his testimony incredible as a matter of law, and his prior state testimony was nonhearsay. Truman was not prejudiced by improper cross-examination or summation argument references to the cooperation agreement. View "United States v. Truman" on Justia Law

Krist claimed that defendant, a New York City restaurant, discriminated against her on the basis of her disabilities in violation of of the Americans with Disabilities Act, 42 U.S.C. 12181-12189; New York State Executive Law 290-301; and New York City Administrative Code 8-101 to 8-703 by attempting to restrict her access and that of her service dog to the restaurant and by verbally harassing her on account of her disability and use of the service dog. The district court dismissed. The Second Circuit affirmed, rejecting arguments that the ADA imposes a code of civility and that the trial court erroneously imposed a requirement that plaintiff prove intentional discrimination. View "Krist v. Kolombos Rest. Inc." on Justia Law

Defendant pleaded guilty to a two-count information that charged him with producing child pornography, 18 U.S.C. 2251(a) and possessing child pornography, 18 U.S.C. 2252A(a)(5)(B), (b)(2), and was sentenced to concurrent sentences of imprisonment for 240 months and 120 months and 40 years of supervised release with numerous conditions. The Second Circuit affirmed, rejecting an argument that his plea was defective because the district court did not advise him of the possibility of civil commitment as a sexually dangerous person at the end of his prison term under the Adam Walsh Child Protection and Safety Act of 2006, 18 U.S.C. 4248(a) (2006).The court was not required by due process or Rule 11 of the Federal Rules of Criminal Procedure to advise of the possibility of civil commitment. View "United States v. Youngs" on Justia Law

Plaintiff, a seaman, contracted lymphoma and sued his former employer, a tugboat operator, seeking maintenance and cure. The doctrine of maintenance and cure concerns the vessel owner’s obligation to provide food, lodging, and medical services to a seaman injured while serving the ship. Undisputed evidence established that the seaman had lymphoma during his maritime service, but the disease did not present any symptoms at all until after his service. The district court granted summary judgment for the tugboat operator. The Second Circuit reversed. Because the seaman’s illness indisputably occurred during his service, he is entitled to maintenance and cure regardless of when he began to show symptoms. View "Messier v. Bouchard Transp." on Justia Law

Based on GT’s audit of the financial statements of its client, Winstar, plaintiffs (Winstar stockholders) claimed that GT committed securities fraud under the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), and made false and misleading statements in an audit opinion letter, 15 U.S.C. 78r. The district court dismissed. The Second Circuit remanded, finding that triable questions of fact exist as to whether GT acted with scienter in making alleged misrepresentations in its audit opinion letter, whether plaintiffs purchased Winstar’s stock in actual reliance on those representations, and whether plaintiffs suffered losses as a result. View "Gould v. Winstar Commc'n, Inc." on Justia Law

Convicted of conspiracy to distribute and to possess with intent to distribute cocaine, heroin, ketamine, and morphine, 21 U.S.C. 846; distribution and possession with intent to distribute cocaine and attempting to distribute and to possess with intent to distribute morphine and ketamine, 21 U.S.C. 812, 841(a)(1), and 841(b)(1)(C), defendant, a previously convicted felon, was sentenced to four concurrent terms of 120 months, the mandatory minimum. The Second Circuit remanded for resentencing, noting that the indictment did not properly allege any quantified amount of cocaine, so that defendant should have been sentenced under 21 U.S.C. 841(b)(1)(C), the penalty provision that does not depend on quantity and does not, except in circumstances not present here, provide a mandatory minimum prison term. View "United States v. Gonzalez" on Justia Law

A jury convicted defendant of conspiracy, (Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(d)), and being a felon in possession of a firearm, (18 U.S.C. 922(g)). The district court upheld the firearm conviction, but vacated the RICO conviction and dismissed the conspiracy count from his indictment. The court stated that the attempt to prosecute conspiracy to violate the Contraband Cigarette Trafficking Act, 18 U.S.C. 2341, failed for unconstitutional vagueness in New York Tax Law, 471, which delineated the parameters of a CCTA violation. The Second Circuit reversed, holding that a prior decision to certify questions regarding Section 471 to the state’s highest court did not indicate that that statute was unconstitutionally vague. The court rejected a claim that the CCTA was inapplicable to defendant given New York’s “forbearance policy,” under which the state refrained from collecting taxes on cigarette sales transacted on Native American reservations. The forbearance policy did not signal a choice not to enforce tax laws when enforcement would be possible, but represented a concession to the difficulty of state enforcement, complex jurisdictional issues surrounding reservation-based cigarette sales, and the politically combustible nature of bootlegging prosecutions. Congress enacted the CCTA to provide federal support to states struggling with those circumstances. View "United States v. Morrison" on Justia Law

Defendants held ASI notes that could be converted into shares of stock at either a pre-set price-per-share or a floating price that depended on share price over a defined period prior to conversion. A note was converted into shares, all of which were sold in the week following conversion. ASI, seeking to recoup the profits earned on the sale, sued under the Securities Exchange Act, 15 U.S.C. 78p(b), which prohibits statutory insiders such as defendant from profiting on the trade of securities on a short-swing basis. The district court found defendants liable for profits of $4,965,898.95 earned in short-swing insider trading. The Second Circuit affirmed. Rejecting an argument that the relevant transactions were not “purchases” of securities for purposes of the act, but were within the scope of the “debt” and “borderline transaction” exceptions to liability, and that the scope of any liability found should be limited to defendant Cannell’s pecuniary interest in the profits at issue. View "Analytical Surveys, Inc. v. Tonga Partners, L.P.," on Justia Law

Zaleski was convicted of possessing machine guns, 18 U.S.C. 922(o), 924(a)(2); possessing a firearm with an obliterated serial number, 18 U.S.C. 922(k), 924(a)(1)(B); and possessing firearms, silencers, and destructive devices not registered to him, 26 U.S.C. 5841, 5861(d), and 5871. The district court imposed a 101-month sentence and ordered forfeiture of machine guns and pistols, a shotgun, homemade silencers, hand grenades, and improvised explosive devices, all unlawfully in his possession. Weapons Zaleski lawfully possessed remained in government custody while the government sought an order (All Writs Act, 28 U.S.C. 1651(a)), authorizing it to destroy them. Zaleski estimates the value of non-forfeited weapons at $100,000, including guns, 65,000 rounds of ammunition, body armor, grenades, a grenade launcher, explosive chemicals, and materials for pipe bombs. As a convicted felon, Zaleski was prohibited under 18 U.S.C. 922(g) from possessing the items; he sought to have the weapons transferred to a dealer for sale. The court determined that the government did not need the requested order, that the proposed sale arrangement would violate 18 U.S.C. 922(g)(1), and that appraisal would be useless because the doctrine of sovereign immunity bars claims for damages. The Second Circuit vacated in part; 922(g) does not categorically prohibit the proposed sale arrangement. View "United States v. Zaleski" on Justia Law