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

Plaintiffs filed a putative class action challenging New York City's Third Party Transfer (TPT) Program, through which the City initiates in rem foreclosure proceedings against tax-delinquent properties and, following a foreclosure judgment, transfers ownership of the properties to third party partners who develop and manage the properties. Plaintiffs alleged federal constitutional and state law claims stemming from the transfer of their properties through the TPT. The district court dismissed the complaint.The Second Circuit concluded that plaintiffs lack standing to seek injunctive and declaratory relief; the TIA is not directly applicable to plaintiffs' claims and the district court exceeded its discretion in concluding that comity bars their claims; and the Rooker-Feldman doctrine does not bar plaintiffs' equal protection and due process claims, or their second takings claim – that their property was taken for a public purpose without just compensation – to the extent that for each of those claims, they seek only the value of their lost property in excess of the amount owed in taxes. Accordingly, the court reversed in part, affirmed in part, and remanded for further proceedings. The court also vacated and remanded the district court's decision not to exercise supplemental jurisdiction over plaintiffs' state law claims. View "Dorce v. City of New York" on Justia Law

The Second Circuit held that maritime complaints seeking exoneration from or limitation of liability pursuant to the Limitation of Liability Act must contain sufficient factual matter to satisfy the plausibility standard applicable to pleadings under Federal Rule of Civil Procedure 8(a), as interpreted by the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). The court concluded, however, that petitioner's Second Proposed Amended Complaint met that standard, and thus the district court exceeded its discretion in denying the motion for leave to amend.In this case, petitioner sought exoneration from or limitation of liability pursuant to 46 U.S.C. 30511 et seq. in connection with a fatal boating accident. The district court dismissed the maritime complaint for failure to allege sufficient factual matter to state a plausible claim for exoneration or limitation, and denied his motion for leave to amend. The court affirmed the judgment to the extent that it dismissed the initial complaint and denied petitioner's first motion for leave to amend, but reversed the judgment to the extent it denied the second motion for leave to amend on grounds of futility and bad faith. The court remanded for further proceedings. View "Bensch v. Estate of Umar" 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

The Second Circuit affirmed Defendants Eldridge and Allen's convictions and sentences for offenses arising from their participation in a drug-dealing enterprise that operated in Buffalo, New York, from 2003 to 2005.The court concluded that the district court’s decision to install a waist-high black curtain around the defense tables before trial did not violate defendants' rights to a fair trial. The court further held that, although United States v. Davis, 139 S. Ct. 2319 (2019), and United States v. Barrett, 937 F.3d 126 (2d Cir. 2019), have invalidated at least one of the three theories upon which Eldridge's second 18 U.S.C. 924(c) conviction might have been premised, Eldridge has failed to show that any error affected his substantial rights in light of the evidence supporting the third, valid theory—namely, that Eldridge participated in an attempted Hobbs Act robbery. In reaching this conclusion, the court held that even in cases where an unpreserved claim of error is based on a supervening change in case law, the defendant bears the burden of establishing all four prongs of the plain-error standard. Finally, the court held that Section 403(a) does not apply to Eldridge because the district court imposed his sentence before Congress passed the First Step Act, and that the pendency of his direct appeal does not change that fact. The court affirmed defendants' remaining claims in a separate summary order. View "United States v. Eldridge" on Justia Law

Plaintiffs, five South Korean citizens who traded a derivative financial product called KOSPI 200 futures on an overnight market of the Korea Exchange (KRX), filed suit against Tower and its CEO, alleging that, in 2012, Tower's trading of KOSPI 200 futures violated the anti-manipulation provisions of the Commodity Exchange Act (CEA).The Second Circuit affirmed the district court's grant of summary judgment on plaintiffs' CEA claims. The court concluded that the trading of KOSPI 200 futures on the KRX is not subject to the rules of the Chicago Mercantile Exchange (CME), and therefore rejected plaintiffs' contention that there is a genuine factual dispute as to whether Tower's trading was subject to the rules of the CME. The court also concluded that the district court did not abuse its discretion by excluding a report from plaintiffs' expert witness who opined that Tower's trading of KOSPI 200 futures was "subject to" the rules of the CME. The court further concluded that the district court's judgment does not contradict the court's prior ruling in this case. Finally, the court concluded that the district court properly rejected plaintiffs’ public policy arguments. View "Myun-Uk Choi v. Tower Research Capital, LLC" on Justia Law

Plaintiff, a civilly confined person under Article 10 of the New York Mental Hygiene Law, filed claims under 42 U.S.C. 1983, challenging the constitutionality of aspects of his Article 10 proceedings. The district court dismissed the complaint because he filed his claims after the expiration of the applicable three-year statute of limitations. During the pendency of his appeal, the Second Circuit has deducted court fees from plaintiff's institutional account at the Central New York Psychiatric Center pursuant to the filing fee requirement of the Prison Litigation Reform Act (PLRA) that applies to a "prisoner" proceeding in forma pauperis. Plaintiff now moves for restoration of those fees.The Second Circuit granted plaintiff's motion for restoration of fees deducted from his patient account and directed the Clerk of Court to refund those fees and to cease further collections. The court concluded that plaintiff, as a civil detainee who completed his criminal sentence, was no longer a "prisoner" under the PLRA when he filed his lawsuit. Therefore, he is not subject to the fee provisions under the PLRA. View "Jones v. Cuomo" 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 Second Circuit affirmed the district court's grant of a petition for habeas relief to petitioner, who was convicted by a jury in state court of first degree manslaughter. The court concluded that the admission of the autopsy report at petitioner's trial through a surrogate witness was an unreasonable application of clearly established Supreme Court precedent. See Crawford v. Washington, 541 U.S. 36, 40 (2004); Melendez-Diaz v. Massachusetts, 557 U.S. 305 (2009); and Bullcoming v. New Mexico, 564 U.S. 647 (2011). Furthermore, the unreasonably erroneous admission of the autopsy report was not harmless where the report was the strongest evidence in the State's case and was not cumulative of other inculpatory evidence connecting petitioner to the victim's death. View "Garlick v. Lee" on Justia Law

Plaintiffs, four Black firefighters who suffer from a skin condition that causes pain and sometimes scarring when they shave their facial hair, filed suit alleging that the FDNY discriminated against them in violation of the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964, and various other laws. Plaintiffs' claims stemmed from the FDNY's refusal to offer them a medical accommodation to the department's grooming policy. The policy requires firefighters to be clean shaven in the areas where an oxygen mask or "respirator" seals against their skin.The Second Circuit reversed the district court's grant of summary judgment in favor of plaintiffs on their ADA claim, holding that the OSHA regulation, 29 C.F.R. 1910.134(g)(1)(i)(A), unambiguously prohibits plaintiffs' proposed accommodation and that a binding federal regulation presents a complete defense to an ADA failure-to-accommodate claim. Furthermore, plaintiffs waived the issue of alternative accommodation because they failed to raise it until their reply brief on appeal. The court also concluded that plaintiffs' Title VII disparate impact claim mirrors their ADA claim and meets a similar fate. The court explained that, although plaintiffs have made a prima facie case, the FDNY has conclusively rebutted that case by showing that complying with the respiratory-protection standard is a business necessity. Just as in the ADA context, the court concluded that Title VII cannot be used to require employers to depart from binding federal regulations. Nor can the court agree with plaintiffs that the FDNY's failure to consistently enforce the respiratory-protection standard means that complying with the regulation is not a business necessity. Accordingly, the court affirmed in part and reversed in part. View "Bey v. City of New York" 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