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

Appellants appealed the dismissal of their class action complaint against Nextel, the law firm of Leeds, Morelli & Brown, P.C. (LMB), and seven of LMB's lawyers (also LMB). Appellants were former clients of LMB who retained the firm to bring discrimination claims against Nextel. The complaint asserted that, inter alia, LMB breached its fiduciary duty of loyalty to appellants and the class by entering into an agreement with Nextel in which Nextel agreed to pay: (i) $2 million to LMB to persuade en masse its approximately 587 clients to, inter alia, abandon ongoing legal and administrative proceedings against Nextel, waive their rights to a jury trial and punitive damages, and accept an expedited mediation/arbitration procedure; (ii) another $3.5 million to LMB on a sliding scale as the clients' claims were resolved through that procedure; and (iii) another $2 million to LMB to work directly for Nextel as a consultant for two years beginning when the clients' claims had been resolved. The court held that appellants have alleged facts sufficient to state a claim against LMB for, inter alia, breach of fiduciary duty and against Nextel for aiding and abetting breach of fiduciary duty. Therefore, the court vacated and remanded for further proceedings.

Petitioner was convicted in New York for promoting prostitution in the third degree and subsequently sought review of the BIA's order declining to reconsider whether she had been convicted of an aggravated felony and dismissing her appeal from an order of removal. Petitioner argued that her offense did not constitute an aggravated felony because New York law defined "prostitution" more broadly than federal law did for the Immigration and Nationality Act (INA), 8 U.S.C. 1101(a)(43)(K)(i). The court held that because N.Y. Penal Law 230.25(1) punished conduct that did not involve a "prostitution business" as the term prostitution was used in the INA, petitioner's conviction did not constitute an aggravated felony. Thus, the BIA erred in finding petitioner removable. The court also held that because petitioner was not removable, the court need not address her challenge to the agency's denial of her application for asylum, withholding of removal, and CAT relief.

Defendant was convicted of crimes committed while working for American Airlines at JFK Airport, specifically, conspiracy to import and actual importation of five or more kilograms of cocaine and conspiracy and attempt to distribute and possess with intent to distribute the same quantity of cocaine. On appeal, defendant argued that (1) his statements made pursuant to a proffer agreement should not have been received in evidence because (a) they were elicited through economic coercion, and (b) defense counsel's conduct did not trigger the provision in defendant's proffer agreement waiving Fed. R. Evid. 410; (2) his Sentencing Guidelines range was erroneously enhanced for abuse of a position of trust; and (3) the ordered forfeiture was miscalculated. The court identified no merit in the first two arguments, but concluded that the last required further fact-finding to determine whether the conspiracy's proceeds were realized at the wholesale or retail level. Accordingly, the court affirmed all aspects of the judgment except for the forfeiture order, which the court vacated, remanding the case for further proceedings.

Plaintiffs, a group of prospective political candidates, petition circulators, and voters, appealed from the district court's order awarding summary judgment to the Board of Elections in the City of New York and upholding the State's "Party Witness Rule." The Rule, contained in New York Election Law 6-132, limited who a candidate for a political party's nomination could use to circulate so-called "designating petitions," which allowed the candidate to appear on the party primary ballot. Unless the circulator was a notary public or commissioner of deeds, the Party Witness Rule restricted designating petition circulators to "enrolled voter[s] of the same political party as the voters qualified to sign the petition," the party in whose primary the candidate sought to run. The court held that because plaintiffs were without a right to have non-party members participate in a political party's nomination process, the judgment of the district court was affirmed.

This appeal concerned tax deductions that Altria claimed in 1996 and 1997, and which the IRS disallowed. The claimed deductions resulted from Altria's participation in nine leveraged lease transactions with tax-indifferent entities. The jury found that Altria was not entitled to the claimed tax deductions. Applying the substance over form doctrine, the jury rejected Altria's contention that it retained a genuine ownership or leasehold interest in the assets and therefore was entitled to the tax deductions. The district court denied Altria's motion for judgment as a matter of law or for a new trial and entered judgment for the government. The court affirmed and held that Altria had not shown that the district court erred in instructing the jury regarding the substance over form doctrine.

Defendants appealed their convictions for conspiring to kill U.S. officers, to acquire and export anti-aircraft missiles, and to provide material support to a known terrorist organization. Two defendants were additionally convicted of money laundering and conspiring to kill U.S. citizens. The court held that the United States had federal subject-matter jurisdiction to prosecute defendants; the district court did not err in denying defendants' motion for a hearing on certain issues; because the court concluded that defendants' proffered evidence was inadmissible under Rule 404 and that the district court did not commit manifest error by excluding it under Rule 403, defendants' evidentiary challenge to the exclusion was rejected; defendants' remaining challenges were rejected and their convictions were affirmed under 18 U.S.C. 2332(g); the district court's jury instruction was correct and that 18 U.S.C. 2339B did not violate the Fifth Amendment, notwithstanding that no proof was required that a defendant intended his aid to support the terrorist activity of a terrorist group; and one defendant's insufficiency challenge was rejected. Accordingly, the court affirmed the judgment of the district court.

Defendant appealed from a judgment of the district court, following his guilty plea to conspiring to commit bank fraud in violation of 18 U.S.C. 1349. At sentencing, defendant argued that he was not responsible for the losses incurred during the time period he was incarcerated because his incarceration was evidence of his withdrawal from the conspiracy. The district court disagreed and attributed the actual losses incurred during the entire conspiracy to defendant when it calculated his Sentencing Guidelines range and sentenced defendant to 51 months imprisonment. On appeal, defendant argued that his incarceration was prima facie evidence that he withdrew from the conspiracy, which then shifted the burden to the government to prove the contrary. The court disagreed and held that the evidence before the sentencing court of defendant's incarceration; the nature of the bank fraud conspiracy that he formulated, led, and executed; and defendant's contact with a co-conspirator upon his release from prison supported the district court's finding that he did not withdraw from the conspiracy during his incarceration. Accordingly, the district court did not err in attributing the actual losses of the entire conspiracy to defendant.

Petitioner appealed the district court's denial of his petition for habeas corpus brought under 28 U.S.C. 2254, which claimed a violation of his Sixth Amendment right to a public trial. The claim rested on the New York state trial judge's failure to make specific findings justifying the removal of petitioner's twelve-year-old brother from the courtroom during trial. At issue was whether New York's intermediate appellate court exorbitantly misapplied New York law when it held that petitioner failed to preserve this claim for state appellate review. The court held that the sparse record prevented it from saying definitively that defense counsel properly objected or requested that the brother remain in court. The court also held that because the New York appellate court's finding that this claim was not preserved for appellate review was an independent and adequate state ground for decision, which barred review of the claim by federal courts, the court affirmed.

This was an appeal from three orders: (1) denying summary judgment to Wachovia on the ground that appellee had adequately requested reinstatement to his prior employment position following a period of active military duty; (2) awarding liquidated damages, in an amount equal to the award of backpay and granting equitable relief to appellee following a bench trial on damages after a jury found Wachovia liable for violating the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. 4313, in failing to reemploy appellee promptly to a position of like seniority, status, and pay following his military services; and (3) denying Wachovia's motion for judgment as a matter of law, or, in the alternative, for a new trial. The court held that because it found no error in the district court's thoughtful and well-reasoned opinions, the court affirmed.

This case arose out of the attempts of two federal agencies to disgorge funds from Janet Schaberg, the ex-wife of alleged Ponzi-scheme artist Stephen Walsh. Schaberg subsequently appealed from a memorandum decision and orders of the district court granting preliminary injunctions freezing Schaberg's assets. In response to certified questions, the New York Court of Appeals held that (a) proceeds of a fraud could constitute marital property, and (b) when part or all of the marital estate consisted of the proceeds of fraud, that fact did not, as a matter of law, preclude a determination that a spouse paid fair consideration according to the terms of New York's Debtor and Creditor Law section 272. The court held that because those rulings undermined the key legal assumptions supporting the preliminary injunctions, the court vacated those orders, without prejudice to further proceedings applying the legal principles pronounced by the New York Court of Appeals.