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

Plaintiff filed a qui tam action under the New York False Claims Act (NYFCA), N.Y. Stat Fin. Law 187 et seq., on behalf of the State and the City against Wells Fargo for fraudulent avoidance of New York tax obligations. The district court dismissed for failure to state a claim. The court concluded that, with no special state interest, and with no indication of congressional preference for state-court adjudication, the exercise of federal jurisdiction in this case is fully consistent with the ordinary division of labor between federal and state courts. The court also concluded that the complaint did not plausibly allege that the Wells Fargo trusts were not qualified to be treated as Real Estate Mortgage Investment Conduits (REMICs). Therefore, the complaint failed to state a claim on which relief could be granted under the NYFCA for any false statement or record affecting the trusts' entitlement to exemption from income tax under the New York tax laws. Accordingly, the court affirmed the judgment. View "State of New York ex rel. Jacobson v. Wells Fargo" on Justia Law

The Nation filed suit against defendants contending that the federal Indian Gaming Regulatory Act (IGRA), 25 U.S.C. 2701‐2721, preempts the application of a local anti‐gambling ordinance to a Nation‐owned gaming facility located on land owned by the tribe (the Lakeside facility). The district court dismissed the complaint for lack of subject matter jurisdiction, and, following a motion for reconsideration, concluded that the individual plaintiffs lacked standing. The court concluded that the district court had subject matter jurisdiction, as it was not required to resolve questions of tribal law to hear the lawsuit. The court held that it was entitled to defer to the BIA's recognition of an individual as authorized to act on behalf of the Nation, notwithstanding the limited issue that occasioned that recognition. The court also concluded that the individual plaintiffs have standing to sue because they will suffer an injury distinct from any felt by the Nation. Accordingly, the court vacated the district court's order and remanded for further proceedings. View "Cayuga Nation v. Tanner" on Justia Law

After the SEC commenced an administrative proceeding conducted by an ALJ against appellants, appellants contend that the SEC's administrative proceeding is unconstitutional because the presiding ALJ's appointment violated Article II's Appointments Clause. Appellants filed suit in district court asserting their Appointments Clause claim and seeking an injunction against the ALJ's adjudication based on its alleged unconstitutionality. The district court dismissed the suit for lack of subject matter jurisdiction, concluding that appellants' Appointments Clause challenge fell within the exclusive scope of the SEC's administrative review scheme and could reach a federal court only on petition for review of a final decision by the Commission. The court agreed and concluded that, by enacting the SEC's comprehensive scheme of administrative and judicial review, Congress implicitly precluded federal district court jurisdiction over appellants' constitutional challenge. Accordingly, the court affirmed the judgment. View "Tilton v. SEC" on Justia Law

Ficarra filed suit against petitioner, asserting claims of negligence stemming from a tort involving a vessel on navigable waters. More specifically, the case involves a diving accident off a recreational vessel anchored in shallow but navigable lake waters. The district court concluded that there was no admiralty jurisdiction here and reasoned that a recreational injury occurring on a recreational vessel anchored in a shallow recreational bay of navigable waters could not disrupt maritime commerce and did not bear a sufficient relationship to traditional maritime activity. Although the court concluded that the district court correctly articulated the Supreme Court’s modern test for admiralty tort jurisdiction, the court respectfully disagreed with its conclusion that jurisdiction is lacking here. The Supreme Court instructed the court that, “ordinarily,” “every tort involving a vessel on navigable waters falls within the scope of admiralty jurisdiction.” Therefore, petitioner's appeal of the dismissal of his petition seeking exoneration from or limitation of liability was proper, and the district court has jurisdiction over that petition. The court reversed and remanded. View "In Re Petition of Bruce Germain" on Justia Law

Defendant challenged the denial of his motion for a sentence modification under 18 U.S.C. 3582(c)(2). Defendant had received a sentence modification in 2011 based upon Amendment 750 to the Sentencing Guidelines and sought a second modification in 2015 based upon Amendment 782. The court held that when a defendant is serving a term of imprisonment that has been modified pursuant to section 3582(c)(2), his sentence is “based on” the guideline range applied at his most recent sentence modification, rather than the range applied at his original sentencing. In this case, because defendant’s sentence is “based on” a guideline range of 235 to 293 months and that range has not subsequently been lowered by Amendment 782, he is ineligible for a sentence modification. Accordingly, the court affirmed the judgment. View "United States v. Derry" on Justia Law

On this interlocutory appeal, the United States challenges the district court's order suppressing drugs and money seized incident to defendant's arrest in the home of Shonsai Dickson. The court concluded that, whether the subject of an arrest warrant is apprehended in his own home or a third‐party residence where he is a guest, his Fourth Amendment privacy rights with respect to entry of either premises are those stated in Payton v. New York, at the time of entry, arresting officers must possess (a) a valid arrest warrant for the subject and (b) reason to believe that the subject is then in the premises. The third‐party resident’s Fourth Amendment right in such circumstances to have the entry into his home authorized by a search warrant, does not extend to the subject of the arrest warrant. The court also concluded that the totality of circumstances known to law enforcement authorities at the time they entered third party Dickson’s residence to execute a valid warrant for defendant’s arrest supported reason to believe that defendant was then in those premises. Accordingly, the court vacated the suppression order to the extent it concluded that the entry of Dickson’s apartment violated defendant’s Fourth Amendment rights, and remanded. View "United States v. Bohannon" on Justia Law

Plaintiff, a former employee of Power Solutions, filed suit under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., alleging that Power Solutions and others made fraudulent representations to the United States in connection with certain equipment supplied to the government pursuant to a procurement contract. The court dismissed the Substitute Second Amended Complaint (SSAC) in part pursuant to Fed. R. Civ. P. 12(b)(1), ruling that plaintiff had released his claims against Power Solutions and its parent corporation and thus lacked standing to bring claims against them, and in part pursuant to Fed. R. Civ. P. 9(b) on the ground that the fraud claims were not pleaded with the requisite particularity. The court concluded that, although the right to bring a qui tam suit can be released when the government has knowledge of the relator's fraud allegations, the court did not endorse the district court's conclusion that the government had such knowledge in this case. The court affirmed the dismissal of the action against Power Solutions and Exelis for failure to allege fraud with the requisite particularity where the SSAC did not contain plausible allegations of fact that showed, as required for FCA purposes, that any claim for payment submitted by Power Solutions, ITT, or Exelis was false or that any of the devices delivered to the government failed to meet contract specifications. Finally, the district court did not abuse its discretion in denying leave to amend. View "United States ex rel. v. Exelis, Inc." on Justia Law

Defendants were found liable under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), 12 U.S.C. 1833a, for mail and wire fraud affecting a federally insured financial institution. The Government alleged that defendants violated the federal mail and wire fraud statutes by selling poor-quality mortgages to government-sponsored entities. Defendants argue that the evidence at trial shows at most an intentional breach of contract and is insufficient as a matter of law to find fraud. The court agreed with defendants that the trial evidence fails to demonstrate the contemporaneous fraudulent intent necessary to prove a scheme to defraud through contractual promises. Accordingly, the court reversed with instructions to enter judgment in favor of defendants. View "United States ex rel. O’Donnell v. Countrywide Home Loans, Inc." on Justia Law

Plaintiffs filed numerous antitrust suits alleging that the Banks colluded to depress LIBOR by violating the rate‐setting rules, and that the payout associated with the various financial instruments was thus below what it would have been if the rate had been unmolested. After consolidation into a multi-district litigation (MDL), the district court dismissed the litigation in its entirety based on failure to plead antitrust injury. The court vacated the judgment on the ground that: (1) horizontal price‐fixing constitutes a per se antitrust violation; (2) a plaintiff alleging a per se antitrust violation need not separately plead harm to competition; and (3) a consumer who pays a higher price on account of horizontal price‐fixing suffers antitrust injury. The court remanded for further proceedings on the question of antitrust standing. Finally, the court rejected the Bank's alternative argument that no conspiracy has been adequately alleged. View "In re: LIBOR-Based Financial Instruments Antitrust Litig." on Justia Law

Plaintiff, on behalf of herself and her son, K.T., filed suit under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400 et seq., against the DOE. At issue is the adequacy of three individualized education programs (IEP), which were characterized by a pattern of procedural violations of the IDEA committed by the DOE, and whether these errors deprived K.T. of a free appropriate public education (FAPE) for a period of three consecutive years. The court concluded that the procedural violations in formulating each IEP, when taken together, deprived K.T. of a FAPE for each school year. The DOE displayed a pattern of indifference to the procedural requirements of the IDEA and carelessness in formulating K.T.’s IEPs over the period of many years, repeatedly violating its obligations under the statute, which consequently resulted in the deprivation of important educational benefits to which K.T. was entitled by law. Accordingly, the court reversed the judgment of the district court and remanded for further proceedings. On remand, the district court is directed to consider, in the first instance, what, if any, relief plaintiff is entitled to as an award for K.T.'s FAPE deprivations. View "L.O. ex rel. K.T. v. N.Y.C. Dep’t of Educ." on Justia Law