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

A South Korean entertainment company that owns trademarks for the popular “Baby Shark” song and related products brought a lawsuit in the United States District Court for the Southern District of New York against dozens of China-based businesses. The company alleged these businesses manufactured or sold counterfeit Baby Shark merchandise, violating trademark, copyright, and unfair competition laws. Seeking to stop the alleged counterfeiting, the company obtained temporary and preliminary injunctions and moved to serve the defendants by email, arguing that this method was appropriate under Federal Rule of Civil Procedure 4(f)(3).After the plaintiff served process by email, most defendants did not respond, leading to default judgments against many of them. However, two defendants appeared and challenged the court’s jurisdiction, arguing that service by email violated the Hague Service Convention, to which both the United States and China are parties. The district court agreed, finding that the Convention did not permit service by email on parties in China, and dismissed the claims against these defendants without prejudice for improper service. The plaintiff appealed to the United States Court of Appeals for the Second Circuit.The United States Court of Appeals for the Second Circuit affirmed the district court’s decision. The appellate court held that the Hague Service Convention does not allow email service on defendants located in China, as China has expressly objected to alternative methods such as those in Article 10 of the Convention. The court further held that neither Federal Rule of Civil Procedure 4(f)(2) nor any purported emergency exception permitted email service in these circumstances. The court also upheld the denial of a default judgment, finding no abuse of discretion. Accordingly, the dismissal of the claims against the two China-based defendants for lack of proper service was affirmed. View "Smart Study Co., LTD v. Shenzhenshixindajixieyouxiangongsi" on Justia Law

A nonprofit organization that publishes content critical of United States immigration policy was issued a subpoena by the New York Attorney General’s office seeking documents related to its governance, finances, and relationships with vendors and contractors. The organization alleged that the subpoena was motivated by a desire to suppress its viewpoints and thus violated its rights under the First Amendment and the New York State Constitution. The Attorney General, however, maintained that the investigation was prompted by concerns about possible self-dealing and regulatory noncompliance.After the subpoena was issued, the nonprofit partially responded but maintained objections. It then filed a federal lawsuit seeking damages and an injunction against enforcement of the subpoena, claiming the subpoena was retaliatory and unconstitutional. Shortly thereafter, the Attorney General initiated a special proceeding in New York State Supreme Court to compel compliance. The organization moved to dismiss or stay the state proceeding, raising constitutional arguments. The state court ruled against the nonprofit, ordering compliance with the subpoena (with some redactions allowed), and the New York Appellate Division, First Department affirmed. The New York Court of Appeals dismissed a further appeal.The United States District Court for the Northern District of New York denied the nonprofit’s request for a preliminary injunction and dismissed the federal claims, holding that they were precluded by the earlier state court judgment under the doctrine of res judicata. The United States Court of Appeals for the Second Circuit affirmed the district court’s judgment, holding that the state court’s decision was final and on the merits, involved the same parties and subject matter, and therefore barred the federal claims. The court also dismissed as moot the appeal of the denial of preliminary injunctive relief. View "VDARE Foundation, Inc. v. James" on Justia Law

A distributor of television programming alleged that three groups of broadcasters, including two that were so-called “sidecar” entities of a larger broadcaster, engaged in a horizontal price-fixing conspiracy. The distributor claimed that the broadcasters coordinated through a common negotiator to demand supracompetitive retransmission fees during contract renewal talks. When the distributor declined to pay the demanded rates, it lost access to the broadcasters’ stations in certain markets, resulting in blackouts for subscribers and subsequent lost profits.Prior to this appeal, the United States District Court for the Southern District of New York reviewed the case. The district court granted the broadcasters’ motion to dismiss the federal antitrust claims, concluding that the distributor lacked antitrust standing. Specifically, the district court found that there was no antitrust injury because the distributor did not actually pay the alleged supracompetitive prices, and that the distributor was not an efficient enforcer since its injuries were indirect and speculative. Consequently, the district court declined to exercise supplemental jurisdiction over the distributor’s remaining state law claims.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s judgment. The Second Circuit held that the distributor plausibly alleged an antitrust injury, as lost profits from a reduction in output (subscriber losses caused by blackouts resulting from price fixing) are a cognizable form of antitrust injury. The court further held that the distributor is an efficient enforcer because it was the direct target of the alleged conspiracy and had a preexisting course of dealing with the broadcasters. The Second Circuit reversed the district court’s dismissal of the federal antitrust claims, vacated the decision to decline supplemental jurisdiction over the state law claims, and remanded the case for further proceedings. View "DirecTV, LLC v. Nexstar Media Group, Inc." on Justia Law

A lawful permanent resident was convicted in 1999 of second-degree criminal sale of a controlled substance under New York law. In 2000, an Immigration Judge determined this conviction made him removable as both an aggravated felony and controlled substance offense and ordered his deportation. He was deported to the Dominican Republic. Over the following years, he reentered the United States twice without authorization, was convicted each time for illegal reentry, and the original 2000 removal order was reinstated for both removals. Following a third unauthorized reentry, he was again charged with illegal reentry. He then moved to dismiss the indictment, arguing that his original removal order was fundamentally unfair because his underlying conviction was not actually a removable offense, as clarified by the United States Court of Appeals for the Second Circuit in United States v. Minter.The United States District Court for the Southern District of New York denied his motion to dismiss. The district court concluded that, although there had been a procedural error in the original removal order, the defendant could not show prejudice because his subsequent illegal reentry convictions would themselves have rendered him removable. The district court thus found that the defendant had failed to meet the prejudice requirement under 8 U.S.C. § 1326(d).On appeal, the United States Court of Appeals for the Second Circuit held that the district court erred by relying on the later reinstatements of the invalid 2000 removal order. The Circuit explained that those reinstatements were not new removal orders and could not serve as independent predicates for the illegal reentry charge. The proper inquiry is whether the original removal order was fundamentally unfair and prejudicial, which it was. The court vacated the judgment and remanded for further proceedings. The related appeal was dismissed for lack of jurisdiction. View "United States v. Rodriguez" on Justia Law

In this case, the petitioner was convicted in 2012 of several offenses related to drug trafficking and violence, including attempted Hobbs Act robbery and two counts of using or brandishing a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c). The firearm convictions were predicated on the attempted robbery and a murder committed during a narcotics conspiracy. The attempted robbery involved physically assaulting a drug dealer with a firearm. The district court sentenced the petitioner to a total of 100 years in prison, including consecutive sentences for the § 924(c) convictions.After his conviction and unsuccessful direct appeal, the petitioner filed an initial motion under 28 U.S.C. § 2255, which was denied. He then sought permission to file a second § 2255 motion, arguing that the Supreme Court’s decisions in United States v. Davis (which struck down § 924(c)’s residual clause as unconstitutionally vague) and United States v. Taylor (which held that attempted Hobbs Act robbery does not qualify as a "crime of violence" under the elements clause) required vacatur of his firearm brandishing conviction. The United States District Court for the Southern District of New York reviewed the trial record and concluded that the petitioner’s conviction for brandishing a firearm during the attempted robbery was based on the elements clause, not the residual clause.The United States Court of Appeals for the Second Circuit affirmed the district court’s order denying the petitioner’s second § 2255 motion. The Second Circuit held that because the petitioner’s conviction was based on the elements clause, his claim relied only on a statutory change, not on a new rule of constitutional law, and thus did not satisfy the requirements for a successive habeas petition under the Antiterrorism and Effective Death Penalty Act. The court also rejected his argument regarding the second firearm conviction as foreclosed by precedent. View "Barnes v. United States of America" on Justia Law

A Texas-based firearms retailer sold and shipped large quantities of unfinished firearm frames and receivers to New York, including products easily convertible into untraceable “ghost guns.” State and city authorities in New York alleged that the retailer intentionally marketed and sold these products to purchasers likely to be legally prohibited from owning firearms. The authorities claimed this resulted in increased gun violence and compelled them to spend additional resources on law enforcement, public health, and community services.Following these lawsuits, the retailer demanded that its liability insurers provide defense and indemnification under policies that covered damages caused by an “accident.” The insurers denied coverage and sought a declaratory judgment in the United States District Court for the Southern District of New York, arguing that the underlying suits did not allege harm resulting from an “accident” as required under Texas law and the policies’ terms. The district court granted summary judgment for the insurers, finding that the complaints alleged intentional conduct with expected consequences, not an “accident.” The judgment also encompassed indemnification after the parties agreed that the same reasoning applied.The United States Court of Appeals for the Second Circuit reviewed the case de novo. It held that, under Texas law, the policies only covered injuries arising from an “accident,” which is defined as a fortuitous, unexpected, and unintended event. The Court concluded the underlying lawsuits described intentional acts by the retailer that led to expected injuries, rather than accidental harm. Therefore, the insurers had no duty to defend or indemnify the retailer in these lawsuits. The Court of Appeals affirmed the judgment of the district court. View "Granite State Insurance Co. v. Primary Arms, LLC" on Justia Law

Several parents of disabled children brought a class action against the New York City Department of Education, the Board of Education of the City School District of New York, and the Chancellor, alleging that the defendants violated the Individuals with Disabilities Education Act (IDEA). The plaintiffs claimed the defendants maintained a policy of discontinuing special education services to disabled students before their twenty-second birthday, despite federal and state guidance and previous case law indicating that such services should continue until that age.The United States District Court for the Southern District of New York dismissed the suit, finding that it lacked subject-matter jurisdiction because the plaintiffs had not exhausted administrative remedies as generally required under the IDEA. The district court agreed with the defendants’ argument that exhaustion was necessary and rejected the plaintiffs’ contention that exhaustion would be futile due to the existence of a blanket, citywide policy.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s dismissal. The appellate court clarified that the IDEA’s exhaustion requirement is not jurisdictional but is instead a claim-processing rule, meaning that failure to exhaust is not a bar to the court’s power to hear the case. The Second Circuit held that exhaustion of administrative remedies is excused when plaintiffs challenge a policy or practice of general applicability that is contrary to law and when the purposes of exhaustion—such as developing a factual record or utilizing agency expertise—would not be served. Because the plaintiffs’ claims raised a purely legal question regarding the validity of a blanket policy, the court found that exhaustion would be futile. The Second Circuit vacated the district court’s dismissal and remanded the case for further proceedings. View "J.M. v. New York City Dept. of Ed." on Justia Law

A Malaysian national who worked as a managing director for Goldman Sachs in Malaysia was prosecuted for his role in a large-scale financial scheme involving 1Malaysia Development Berhad (1MDB), a Malaysian state-owned investment fund. The government presented evidence showing that, along with other conspirators, he participated in three major bond offerings raising $6.5 billion, from which more than $2.5 billion was diverted for bribes and kickbacks to officials and participants, including himself. The funds were laundered through shell companies, and the defendant received $35.1 million that was deposited in an account controlled by his family members. The defendant’s wife asserted at trial that these funds were legitimate investment returns, not criminal proceeds.Prior to this appeal, the United States District Court for the Eastern District of New York denied several motions by the defendant. The court rejected his arguments that the indictment should be dismissed for lack of venue, concluding that acts in furtherance of the conspiracy passed through the Eastern District of New York. The court also found that the government did not breach an agreement regarding his extradition from Malaysia, since the superseding indictments did not charge new offenses. The district court excluded a video recording offered by the defense as inadmissible hearsay, and ultimately, a jury found him guilty on all counts. He was sentenced to 120 months’ imprisonment and ordered to forfeit $35.1 million.On appeal to the United States Court of Appeals for the Second Circuit, the defendant argued improper venue, breach of extradition agreement, erroneous exclusion of evidence, and that the forfeiture was an excessive fine under the Eighth Amendment. The Second Circuit held that the district court had not erred in any respect. Venue was proper, the extradition agreement was not breached, the evidentiary ruling was not an abuse of discretion, and the forfeiture was not grossly disproportionate to the offense. Accordingly, the judgment of conviction and forfeiture order were affirmed. View "USA v. NG CHONG HWA" on Justia Law

In October 2021, a Florida attorney, Ross, held a trust account at Regions Bank that received a $29.6 million wire transfer, the result of a business email compromise fraud perpetrated on a company called Phoenix. Most of the funds were rapidly transferred out of the account, with some recalled by the bank. Federal authorities seized approximately $4.9 million remaining or recovered from the account and initiated a civil forfeiture action, alleging the funds were proceeds of fraud or involved in money laundering.The United States District Court for the Northern District of New York oversaw the initial proceedings. Ross filed a verified claim to $1.21 million of the seized funds, asserting they were legitimate client funds or proceeds from his home sale, but made no claim to the remaining $3.69 million. Another claimant, Phoenix, also asserted interest in the $1.21 million. The district court entered default judgment forfeiting the unclaimed $3.69 million to the government, dismissed without prejudice the forfeiture proceedings as to the $1.21 million, and issued a certificate of reasonable cause for the seizure. It denied Ross’s subsequent motion for attorney fees, costs, and interest under CAFRA, finding he did not “substantially prevail,” and denied reconsideration.On appeal, the United States Court of Appeals for the Second Circuit held that Ross lacked standing to contest the forfeiture of the $3.69 million because he had not filed a claim as to those funds. The court rejected Ross’s due process challenge to the stay of proceedings, finding the delay reasonable, and upheld the denial of attorney fees, costs, and interest, concluding that dismissal without prejudice did not make Ross a prevailing party under CAFRA. The court also found no abuse of discretion in dismissing the forfeiture action without prejudice. However, the Second Circuit vacated the issuance of a certificate of reasonable cause, as no judgment for Ross had been entered. All other aspects of the district court’s judgments were affirmed. View "United States v. Ross" on Justia Law

A former high school principal alleged that, during her tenure at a small New York school district, she was subjected to gender-based hostility and was ultimately fired because of her sex. The principal, who began her role in 2014, reported to the district superintendent. She claimed the superintendent behaved in a demeaning and discriminatory manner towards her and other women, while treating male employees more favorably. In 2016, she was placed on administrative leave and then terminated. She filed complaints with state and federal agencies and then brought suit against the school district, the board of education, and the superintendent, alleging violations of Title VII and New York State Human Rights Law for discriminatory discharge and hostile work environment.The U.S. District Court for the Northern District of New York granted summary judgment to defendants on the principal’s equal protection claim but allowed her Title VII and state law claims to proceed to trial. After a six-day trial, a jury found in her favor, concluding her gender was a motivating factor in her termination and that she was subjected to a hostile work environment. The jury awarded her nearly half a million dollars in damages, including lost income. The district court denied defendants’ post-trial motions for judgment as a matter of law, a new trial, and reduction of damages.On appeal, the United States Court of Appeals for the Second Circuit reviewed whether the verdict was supported by sufficient evidence, whether lost-income damages were proper, and whether alleged trial errors—including a confusing comment by the district judge about New York law—necessitated a new trial. The Second Circuit held that the jury’s verdict was supported by substantial evidence, the damages award was proper, and any errors during trial did not render it unfair. The court affirmed the judgment of the district court. View "Krause v. Kelahan" on Justia Law