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

The case concerns a defendant who was convicted by a jury in the United States District Court for the Northern District of New York of transporting, receiving, and possessing child pornography, all in violation of federal law. The defendant’s conduct involved the use of the Kik messaging application, which uses software to detect and report child sexual abuse material (CSAM) to the National Center for Missing and Exploited Children (NCMEC). Kik’s detection process relies on a database of known CSAM hash values provided by NCMEC. When Kik’s software identifies a match, a designated employee reviews the file and, if confirmed as CSAM, reports it to NCMEC, which then forwards the information to law enforcement. The defendant was linked to the offending accounts through IP address records and admitted during a post-arrest interview to using the relevant Kik accounts and sharing child pornography.After his arrest, the defendant moved to suppress evidence obtained from Kik’s searches and his own statements to law enforcement, arguing that Kik acted as an agent of NCMEC, which he claimed was a governmental entity for Fourth Amendment purposes. The United States District Court for the Northern District of New York denied the motion, finding that while NCMEC might be a governmental entity, Kik was not acting as its agent. The court also found that the defendant had validly waived his Miranda rights and that his statements were not coerced. The jury acquitted the defendant on some counts but convicted him on others. The court sentenced him to 151 months in prison and 15 years of supervised release.On appeal, the United States Court of Appeals for the Second Circuit held that NCMEC is a governmental entity for Fourth Amendment purposes, but the defendant failed to show that Kik acted as a governmental agent when it searched his accounts. The court affirmed the denial of the suppression motion, found the evidence sufficient to support the convictions, and upheld the sentence as substantively reasonable. However, the court vacated and remanded in part, instructing the district court to amend the written judgment to conform with its oral pronouncement regarding certain conditions of supervised release. View "United States v. Guard" on Justia Law

A law firm serving on the Plaintiffs’ Executive Committee in multidistrict litigation related to the September 11, 2001 terrorist attacks was found to have deliberately leaked a confidential deposition transcript to a reporter, violating two court-issued protective orders. The firm, Kreindler & Kreindler LLP, had previously received a warning for a similar breach. After the leak, the firm conducted an internal investigation but failed to question the individual responsible. When the breach was investigated by the court, the firm initially denied responsibility and submitted deficient declarations before ultimately admitting the leak.The United States District Court for the Southern District of New York, after a two-day evidentiary hearing before a Magistrate Judge, found that the firm had willfully violated the protective orders and misled the court. The court imposed sanctions under Federal Rule of Civil Procedure 37(b), including removal of the firm from the Plaintiffs’ Executive Committee, an order to pay attorney’s fees, and a bar on receiving certain funds. The District Judge affirmed these sanctions. The firm’s petition for a writ of mandamus to the United States Court of Appeals for the Second Circuit was denied, after which the firm filed an interlocutory appeal challenging the sanctions order.The United States Court of Appeals for the Second Circuit held that a Rule 37(b) sanctions order against attorneys for discovery violations is not immediately appealable under the collateral order doctrine. The court reasoned that such orders are effectively reviewable after final judgment and do not resolve important issues separate from the merits of the underlying litigation. Accordingly, the Second Circuit dismissed the appeal for lack of jurisdiction. View "In re: Terrorist Attacks on Sept. 11, 2001" on Justia Law

A private Christian school in Vermont forfeited a girls’ basketball playoff game because it objected, on religious grounds, to playing against a team with a transgender athlete. The school believes that requiring its female athletes to compete against biological males would violate its religious convictions about the immutability of sex. Following the forfeit, the Vermont Principals’ Association (VPA), which oversees extracurricular activities for Vermont schools, expelled the school from all state-sponsored extracurricular activities, including both athletic and non-athletic events.After the expulsion, the school and several students and parents filed suit in the United States District Court for the District of Vermont, seeking a preliminary injunction to reinstate the school’s VPA membership and alleging a violation of their rights under the Free Exercise Clause of the First Amendment. The district court denied the motion, finding that the VPA’s policies regarding transgender athletes were neutral and generally applicable, and thus subject only to rational-basis review. The court concluded that the plaintiffs were unlikely to succeed on the merits of their claim.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s denial of a preliminary injunction. The Second Circuit held that the plaintiffs are likely to succeed in showing that the VPA’s expulsion was not neutral, as it was accompanied by official expressions of hostility toward the school’s religious beliefs. The court found that the plaintiffs also satisfied the requirements of irreparable harm and public interest. Accordingly, the Second Circuit reversed the district court’s order and remanded the case with instructions to grant a preliminary injunction reinstating the school’s VPA membership pending further proceedings. View "Mid Vermont Christian School v. Saunders" on Justia Law

A nonprofit organization sought to provide free legal advice to low-income New Yorkers facing debt-collection lawsuits by training nonlawyer “Justice Advocates” to help individuals complete a state-issued check-the-box answer form. The organization and a prospective Justice Advocate argued that many defendants in such cases default due to lack of understanding, leading to severe consequences. However, New York law prohibits nonlawyers from providing individualized legal advice, and all parties agreed that the proposed activities would violate the state’s unauthorized practice of law (UPL) statutes.The plaintiffs filed a pre-enforcement challenge in the United States District Court for the Southern District of New York, claiming that applying the UPL statutes to their activities would violate their First Amendment rights. The district court found that the plaintiffs had standing and were likely to succeed on the merits, holding that the UPL statutes, as applied, were a content-based regulation of speech that could not survive strict scrutiny. The court granted a preliminary injunction, barring the Attorney General from enforcing the UPL statutes against the plaintiffs and participants in their program.On appeal, the United States Court of Appeals for the Second Circuit agreed that the UPL statutes, as applied, regulate speech. However, the Second Circuit held that the regulation is content neutral, not content based, and therefore subject to intermediate scrutiny rather than strict scrutiny. Because the district court applied the wrong standard, the Second Circuit vacated the preliminary injunction and remanded the case for further proceedings under the correct legal standard. The court did not reach a final decision on whether the statutes, as applied, ultimately violate the First Amendment, leaving that determination for the district court on remand. View "Upsolve, Inc. v. James" on Justia Law

Two former employees of a fire alarm and sprinkler company provided fire alarm testing and inspection services on public works projects in New York. They alleged that their employer failed to pay them the prevailing wages required by New York Labor Law § 220, which mandates that workers on public works projects receive at least the prevailing rate of wages. The contracts between the employer and various public entities included clauses that either disclaimed the applicability of prevailing wage laws, were silent on the issue, or referenced prevailing wage rates. Many contracts also contained a provision shortening the statute of limitations for any action against the company to one year.The United States District Court for the Northern District of New York granted partial summary judgment in favor of the employer on all prevailing wage-related claims. The court found that: (1) the contracts did not expressly promise to pay prevailing wages; (2) the one-year contractual limitations period barred the claims; and (3) fire alarm testing and inspection work was not covered by § 220’s prevailing wage requirement. The court also dismissed related quantum meruit and unjust enrichment claims and later approved a class action settlement on other claims, with the prevailing wage claims reserved for appeal.On appeal, the United States Court of Appeals for the Second Circuit held that, based on a 2009 New York State Department of Labor opinion letter and relevant precedent, fire alarm testing and inspection work is covered by § 220, entitling the plaintiffs to prevailing wages. However, the Second Circuit found New York law unsettled on whether a promise to pay prevailing wages is implicit in every public works contract (even if not expressly stated) and whether a contractual one-year limitations period is enforceable against workers’ third-party beneficiary claims. The court therefore certified these two questions to the New York Court of Appeals for resolution. View "Walton v. Comfort Systems" on Justia Law

In 2019, a well-known advice columnist publicly accused a sitting U.S. president of sexually assaulting her in a department store in 1996. The president, while in office, responded with public statements denying the allegations, asserting he did not know the accuser, and claiming she fabricated the story for personal and political gain. The accuser then filed a defamation lawsuit in New York state court, alleging that these statements were false and damaged her reputation. The case was removed to federal court after the Department of Justice certified that the president acted within the scope of his office, but the DOJ later withdrew this certification. During the litigation, the accuser also brought a separate lawsuit under a new state law allowing survivors of sexual assault to sue regardless of the statute of limitations, which resulted in a jury finding that the president had sexually abused and defamed her after leaving office.The United States District Court for the Southern District of New York granted partial summary judgment for the accuser in the original defamation case, relying on issue preclusion from the verdict in the later case. The trial was limited to damages, and the jury awarded the accuser $83.3 million in compensatory and punitive damages. The president moved for a new trial or remittitur, arguing, among other things, that he was entitled to presidential immunity, that the damages were excessive, and that the jury instructions were erroneous. The district court denied these motions.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s judgment. The court held that the president had waived any claim to absolute presidential immunity by failing to timely assert it, and that the Supreme Court’s intervening decision in Trump v. United States did not alter this conclusion. The court also found no error in the district court’s application of issue preclusion, evidentiary rulings, or jury instructions, and concluded that the damages awarded were reasonable and not excessive. The judgment in favor of the accuser was affirmed in full. View "Carroll v. Trump" on Justia Law

A U.K. citizen and former hedge fund manager predicted that the South African rand would strengthen against the U.S. dollar following a South African election. Acting on this belief, he purchased a one-touch barrier option for his hedge fund, which would pay $20 million if the rand-to-dollar exchange rate dropped below 12.50 before the option’s expiration. As the expiration approached and the rate hovered just above the threshold, he instructed a banker in Singapore to sell large amounts of dollars for rand to push the exchange rate below 12.50, thereby triggering the option and securing the payout for his fund. The trades were executed while he was in South Africa, and the payout obligations ultimately fell on U.S.-based financial institutions.A grand jury in the United States District Court for the Southern District of New York indicted him for commodities fraud and conspiracy to commit commodities fraud under the Commodity Exchange Act (CEA). At trial, the government presented evidence of his intent to manipulate the market to trigger the option. The jury convicted him of commodities fraud but acquitted him of conspiracy. The district court denied his post-trial motions for acquittal or a new trial, finding sufficient evidence of a direct and significant connection to U.S. commerce, adequate jury instructions, and no due process violation.On appeal, the United States Court of Appeals for the Second Circuit affirmed the conviction. The court held that the CEA’s extraterritoriality provision applied because the conduct had a direct and significant connection to U.S. commerce, given that U.S. financial institutions bore the payout risk. The court also found the jury instructions on intent and materiality were proper, that proof of an artificial price was not required under the charged anti-fraud provision, and that the defendant had fair notice his conduct was unlawful. The district court’s judgment was affirmed. View "United States v. Phillips" on Justia Law

Nine inmates at a Connecticut correctional facility challenged their confinement in a unit known as Q-Pod, which is used to transition inmates from more restrictive housing back to the general population. The plaintiffs alleged that Q-Pod imposed harsher conditions than the general population, including extended periods of isolation, unsanitary conditions due to toilet restrictions, lack of access to medical care and counseling, limited vocational and educational opportunities, and restricted religious services. Two plaintiffs specifically claimed they were denied access to Native American religious practices, such as sweat lodge ceremonies and smudging, which are congregate religious activities.The United States District Court for the District of Connecticut granted summary judgment to the prison officials on the basis of qualified immunity for all federal claims, finding that the conditions in Q-Pod did not rise to the level of constitutional violations under the Eighth or Fourteenth Amendments, and that the officials were entitled to qualified immunity on the First Amendment free exercise claims. The court also declined to exercise supplemental jurisdiction over the state-law claims and denied injunctive relief as moot. Plaintiffs’ motion for reconsideration was denied, and they appealed.The United States Court of Appeals for the Second Circuit affirmed the district court’s judgment as to the Eighth Amendment, procedural due process, and the free exercise claims of seven plaintiffs, holding that the conditions and restrictions in Q-Pod did not violate clearly established law. However, the Second Circuit reversed as to the free exercise claims of two plaintiffs who were denied participation in Native American congregate religious services, finding that the denial, without any penological justification, violated clearly established law. The court remanded with instructions to deny summary judgment on these claims and vacated the dismissal of the related state-law claims. View "Baltas v. Chapdelaine" on Justia Law

Several former employees of a social media company were required, as part of their hiring process, to sign agreements mandating that any employment-related disputes be resolved through individual arbitration before a specified arbitral body. These agreements allowed employees to opt out within 30 days, but those who did not were bound to arbitrate disputes under the arbitral body’s rules. After being terminated, the employees initiated arbitration proceedings, but a dispute arose over who was responsible for paying the ongoing arbitration fees. The company argued for a pro-rata split based on the agreements, while the arbitral body, referencing its own rules and minimum standards (incorporated by reference into the agreements), required the company to pay all but the initial case management fees. The company refused to pay the full amount, citing a clause that fee disputes should be resolved by the arbitrator, not the arbitral body. As a result, the arbitral body stayed the proceedings, refusing to appoint arbitrators until the fees were paid.The employees then filed a petition in the United States District Court for the Southern District of New York, seeking to compel the company to pay the fees under the Federal Arbitration Act, arguing that the company’s refusal constituted a failure to arbitrate. The district court agreed, holding that it had authority to compel the company to pay the fees as allocated by the arbitral body, and ordered the company to do so.On appeal, the United States Court of Appeals for the Second Circuit reversed the district court’s decision. The Second Circuit held that disputes over the payment of ongoing arbitration fees in the context of an ongoing arbitral proceeding are procedural matters for the arbitrator or arbitral body to resolve, not the courts. The court concluded that a party’s refusal to pay such fees does not constitute a “failure, neglect, or refusal to arbitrate” under 9 U.S.C. § 4, and therefore, the district court lacked authority to compel payment. The case was remanded with instructions to deny the petition. View "Frazier v. X Corp." on Justia Law

Mathew James, a former nurse and owner of a medical billing business, was convicted after a jury trial for health care fraud, conspiracy to commit health care fraud, wire fraud, and aggravated identity theft. The charges arose from a scheme in which James and his employees falsified insurance claims by “upcoding” and “unbundling” medical procedures, directed patients to emergency rooms for pre-planned surgeries, and impersonated patients in communications with insurance companies. The fraudulent activity spanned several years, involved nearly 150 physicians, and resulted in tens of thousands of claims. While some of James’s business was legitimate, the government’s evidence focused on the fraudulent aspects of his operations.The United States District Court for the Eastern District of New York (Judge Seybert) presided over the trial and sentencing. The jury convicted James on most counts but acquitted him of money laundering conspiracy. During trial, jurors were inadvertently given access to transcripts of two recorded calls not admitted into evidence, but the district court declined to conduct an inquiry into the exposure, instead instructing the jury to disregard any material not in evidence. At sentencing, the court imposed a 144-month prison term, a forfeiture order of over $63 million, and restitution of nearly $337 million. The court applied sentencing enhancements for James’s leadership role and abuse of trust, and increased the sentence after considering James’s potential eligibility for earned time credits and rehabilitation programs.The United States Court of Appeals for the Second Circuit affirmed James’s conviction, finding any jury exposure to extra-record material harmless. However, the court vacated the sentence, including the forfeiture and restitution orders, holding that the district court erred by enhancing the sentence based on potential earned time credits and rehabilitation program eligibility, misapplied sentencing enhancements without adequate findings, and failed to properly calculate forfeiture and restitution by including legitimate business revenue. The case was remanded for resentencing. View "United States v. James" on Justia Law