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

Participants in Deloitte LLP’s 401(k) retirement plan filed a class action lawsuit against the plan fiduciaries, alleging that they breached their fiduciary duty under the Employee Retirement Income Security Act (ERISA) by allowing excessive administrative and recordkeeping fees. The plaintiffs claimed that the fees were higher than those of comparable plans and that the fiduciaries failed to obtain lower fees.The United States District Court for the Southern District of New York dismissed the action, finding that the plaintiffs did not plausibly allege that the fees were excessive relative to the services provided. The court also denied the plaintiffs' motion to file an amended complaint, deeming it futile as the proposed amendments did not cure the deficiencies in the original complaint.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that the plaintiffs failed to provide sufficient factual allegations to support a plausible inference that the defendants breached their duty of prudence. The court noted that the plaintiffs did not adequately compare the services provided by the plan to those of the comparator plans, nor did they provide context to show that the fees were excessive. The court also upheld the dismissal of the derivative claim for failure to monitor, as it was dependent on the primary claim of breach of fiduciary duty. View "Singh v. Deloitte LLP" on Justia Law

Two Connecticut attorneys, Mario Cerame and Timothy Moynahan, challenged Connecticut Rule of Professional Conduct 8.4(7), which prohibits harassment or discrimination by lawyers based on fifteen protected categories. They argued that the rule violates the First and Fourteenth Amendments by imposing content-based and viewpoint-based restrictions on speech and being unconstitutionally vague. They claimed that the rule's broad language could potentially sanction their speech on controversial topics, thus chilling their First Amendment rights.The United States District Court for the District of Connecticut dismissed their complaint, ruling that Cerame and Moynahan lacked standing to bring a pre-enforcement challenge. The court found that they did not demonstrate a "real and imminent fear" of enforcement under Rule 8.4(7) and that their allegations were too general to establish a credible threat of enforcement.The United States Court of Appeals for the Second Circuit reviewed the case and concluded that Cerame and Moynahan have standing to seek pre-enforcement relief. The court held that they had sufficiently alleged an intention to engage in conduct arguably proscribed by Rule 8.4(7) and faced a credible threat of enforcement. The court noted that the rule's broad language and the lack of clear guidelines for enforcement created a substantial risk of disciplinary action, which was sufficient to establish an injury in fact. Consequently, the Second Circuit vacated the district court's judgment and remanded the case for further proceedings to consider whether the Eleventh Amendment bars the plaintiffs' claims. View "Cerame v. Slack" on Justia Law

Andrew Davis was convicted of conspiracy to distribute and possess with intent to distribute marijuana, possession with intent to distribute marijuana, possession of firearms in furtherance of a drug trafficking crime, and conspiracy to commit money laundering. Davis trafficked large quantities of marijuana in Bridgeport, Connecticut, using a method involving shipping marijuana from California via FedEx. Upon his arrest, he was found with over 136 pounds of marijuana, numerous handguns, and approximately $412,000 in cash. A co-conspirator cooperated with the government, leading to Davis's conviction.The United States District Court for the District of Connecticut sentenced Davis to 295 months’ imprisonment. Davis appealed, arguing that the evidence was insufficient to support his conviction for conspiracy to commit money laundering. He also raised ten additional arguments in pro se supplemental briefs, including claims of ineffective assistance of counsel and challenges to the sufficiency of the evidence for his other convictions.The United States Court of Appeals for the Second Circuit reviewed the case. The court concluded that the evidence at trial was sufficient to support Davis’s conviction for conspiracy to commit money laundering. The court found that the government provided ample circumstantial evidence linking the cash used in financial transactions to Davis's drug trafficking operations. The court also determined that Davis's pro se arguments either lacked merit, were forfeited, or were premature. Consequently, the Second Circuit affirmed the district court’s judgment. View "United States v. Davis" on Justia Law

In 2016, James E. Moore, Jr., also known as Kevin Thompson, filed a lawsuit under 42 U.S.C. § 1983 against corrections officer Troy Booth and four other officers at Fishkill Correctional Facility, alleging excessive force. The officers, represented by the New York State Attorney General, claimed Thompson failed to exhaust administrative remedies as required by the Prison Litigation Reform Act (PLRA). In 2020, the Attorney General withdrew as Booth's counsel due to his non-participation. Booth subsequently failed to appear for a deposition and a pre-motion conference, leading the district court to strike his answer as a sanction. The district court dismissed the claims against the other officers for failure to exhaust administrative remedies but granted a default judgment against Booth, awarding $50,000 in damages.The United States District Court for the Southern District of New York dismissed the claims against the four other officers on the grounds that Thompson had not exhausted administrative remedies. However, it granted a default judgment against Booth because his answer, which included the exhaustion defense, had been struck due to his non-participation.The United States Court of Appeals for the Second Circuit reviewed the case and concluded that the district court abused its discretion by granting a default judgment against Booth while dismissing the claims against the other officers on the merits. The appellate court held that, according to the principle set forth in Frow v. De La Vega, once the district court determined that Thompson could not maintain his claims against the litigating defendants due to failure to exhaust administrative remedies, it should have dismissed the claims against Booth for the same reason. The Second Circuit vacated the default judgment and remanded the case to the district court with instructions to enter a judgment in favor of Booth. View "Thompson v. Booth" on Justia Law

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

The plaintiffs, a group of American service members and their families affected by the 1983 bombing of the U.S. Marine barracks in Beirut, Lebanon, sought to enforce multi-billion-dollar judgments against Iran. They aimed to obtain $1.68 billion held in an account with Clearstream Banking, a Luxembourg-based financial institution, representing bond investments made in New York on behalf of Bank Markazi, Iran’s central bank. The United States District Court for the Southern District of New York granted summary judgment in favor of the plaintiffs, ordering Clearstream and Bank Markazi to turn over the account contents. Clearstream and Bank Markazi appealed.The United States Court of Appeals for the Second Circuit reviewed the case. The court concluded that the district court lacked subject matter jurisdiction over the plaintiffs’ turnover claim against Bank Markazi. However, it determined that the district court could exercise personal jurisdiction over Clearstream. The court also found that Clearstream’s challenge to the constitutionality of 22 U.S.C. § 8772, which makes certain assets available to satisfy judgments against Iran, failed. Despite this, the court held that the district court erred in granting summary judgment in favor of the plaintiffs without applying state law to determine the ownership of the assets.The Second Circuit affirmed in part and vacated in part the district court's order and judgment. It remanded the case for further proceedings, instructing the district court to determine whether Bank Markazi is an indispensable party under Federal Rule of Civil Procedure 19 and to apply state law to ascertain the parties' interests in the assets before applying 22 U.S.C. § 8772. View "Peterson v. Bank Markazi" on Justia Law

The case involves a challenge to New York State Environmental Conservation Law § 11-0535-a, known as the State Ivory Law, by The Art and Antique Dealers League of America, Inc. and The National Antique and Art Dealers Association of America, Inc. The plaintiffs argued that the State Ivory Law, which restricts the sale and display of ivory, is preempted by the federal Endangered Species Act (ESA) and violates their First Amendment rights.The United States District Court for the Southern District of New York dismissed the plaintiffs' preemption claim, ruling that the State Ivory Law was not preempted by the ESA. The court also granted summary judgment in favor of the defendant, Basil Seggos, on the plaintiffs' First Amendment claim, while denying the plaintiffs' motion for summary judgment on the same claim.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the district court's dismissal of the preemption claim, holding that the State Ivory Law is not preempted by the ESA. The court found that the ESA's preemption clause does not void state laws that are more restrictive than federal law unless they prohibit conduct authorized by a federal exemption or permit, which was not the case here.However, the Second Circuit reversed the district court's grant of summary judgment on the First Amendment claim. The court held that the Display Restriction, which prohibits the physical display of ivory items not authorized for intrastate sale, violates the First Amendment. The court found that the restriction was more extensive than necessary to serve the state's interest in preventing illegal ivory sales and that less restrictive alternatives could achieve the same goal. The court directed the district court to grant summary judgment in favor of the plaintiffs on the First Amendment claim and to issue an injunction barring enforcement of the Display Restriction against the plaintiffs and their members. View "The Art & Antique Dealers League of Am., Inc. v. Seggos" on Justia Law

In August 2021, New York City’s Department of Education mandated COVID-19 vaccinations for all staff and contractors working in school settings. This mandate was updated over time, including a religious exemption process. The plaintiffs, New York City public sector employees, challenged the constitutionality of the mandate and the exemption process, both facially and as applied.The Southern District of New York denied a preliminary injunction and dismissed the consolidated amended complaint on the merits. The Eastern District of New York also denied a similar preliminary injunction motion. The plaintiffs appealed these decisions, leading to a consolidated review by the United States Court of Appeals for the Second Circuit.The Second Circuit affirmed in part and dismissed in part the denials of preliminary injunctions, affirmed the dismissal of the facial challenges, and affirmed in part while vacating and remanding in part the dismissal of the as-applied challenges. The court found that the request to rescind the vaccine mandate was moot due to its official rescission and denied the request for reinstatement and backpay, as the plaintiffs could not show irreparable harm post-termination. The court upheld the dismissal of the facial challenges, finding no evidence that the Citywide Panel process preferred certain religions or was infected with religious animus. However, the court vacated and remanded the as-applied challenges for plaintiffs Natasha Solon and Heather Clark, who plausibly alleged that their religious accommodation requests were improperly denied. View "New Yorkers for Religious Liberty v. City of New York" on Justia Law

GEICO, a group of insurance companies, presented evidence that the defendants, collectively known as the Mayzenberg Defendants, paid third parties for referring patients eligible for no-fault insurance benefits to Mingmen Acupuncture, P.C. GEICO argued that this constituted an illegal kickback scheme, violating New York's rules of professional misconduct, and thus, under the Eligibility Regulation (11 N.Y.C.R.R. § 65-3.16(a)(12)), Mingmen was ineligible to receive no-fault payments. The Mayzenberg Defendants contended that paying for patient referrals might be professional misconduct but did not violate a "licensing requirement" under the Eligibility Regulation.The United States District Court for the Eastern District of New York granted summary judgment in favor of GEICO, agreeing that the Mayzenberg Defendants paid for patient referrals and that this conduct rendered Mingmen ineligible for no-fault benefits. The court also granted GEICO summary judgment on its common law fraud and RICO claims, based on the same conclusions about Mingmen’s ineligibility.The United States Court of Appeals for the Second Circuit reviewed the case and found that while the facts established that the Mayzenberg Defendants paid for patient referrals, the legal question of whether this conduct violated a "licensing requirement" under the Eligibility Regulation was unsettled. Given the lack of clear precedent from the New York Court of Appeals and the significant policy implications, the Second Circuit certified the question to the New York Court of Appeals to determine if paying for patient referrals in violation of New York Education Law § 6530(18) and 8 N.Y.C.R.R. § 29.1(b)(3) disqualifies a provider from receiving no-fault payments under the Eligibility Regulation. View "GEICO v. Mayzenberg" on Justia Law

The plaintiffs, a group of textbook authors, entered into publishing agreements with McGraw Hill, which included provisions for royalty payments based on the net receipts from sales of their textbooks. The agreements also stipulated that McGraw Hill would publish the textbooks at its own expense. The authors alleged that McGraw Hill breached these agreements by reducing royalty payments for textbooks sold through its online platform, Connect, which also includes additional course materials.The United States District Court for the Southern District of New York dismissed the authors' breach-of-contract claims, ruling that the contract definitions of "net receipts" unambiguously limited royalties to sales of the textbooks themselves, excluding other products sold through Connect. The court also found that McGraw Hill's reduction of royalties did not violate the contracts' requirement to publish the textbooks at its own expense, reasoning that Connect was more than just a publishing platform.On appeal, the United States Court of Appeals for the Second Circuit reviewed the case. The court agreed with the district court's interpretation of the "net receipts" clauses, affirming that the authors were only entitled to royalties based on the sales of their textbooks, not on additional content sold through Connect. However, the appellate court found merit in the authors' claim that McGraw Hill breached the "own expense" clause. The court concluded that the complaint plausibly alleged that McGraw Hill's new royalty calculation method effectively shifted some of the publishing expenses to the authors, contrary to the agreements.The Second Circuit vacated the district court's dismissal of the breach-of-contract claims related to the "own expense" clause and remanded the case for further proceedings consistent with its opinion. View "Flynn v. McGraw Hill LLC" on Justia Law