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

The case involves the surviving relatives of Quinn Lucas Schansman, a passenger on Malaysia Airlines Flight 17 (MH17), which was shot down over eastern Ukraine by a missile launched from territory controlled by the Russian Federation-backed Donetsk People’s Republic (DPR). The plaintiffs allege that Sberbank of Russia PJSC (Sberbank) provided material support to the DPR by facilitating money transfers from donors to the DPR via correspondent accounts in the United States, which they claim proximately caused the downing of MH17.The United States District Court for the Southern District of New York denied Sberbank’s motion to dismiss the second amended complaint on foreign sovereign immunity grounds. Sberbank argued that it was immune under the Foreign Sovereign Immunities Act (FSIA) and the Anti-Terrorism Act (ATA) after the Ministry of Finance of the Russian Federation acquired a majority share in Sberbank. The district court found that Sberbank was presumptively immune under the FSIA but that the commercial activity exception applied, as the claims were based on commercial activities carried out in the United States.The United States Court of Appeals for the Second Circuit reviewed the case and held that Sberbank is presumptively immune under the FSIA due to its majority ownership by the Russian Ministry of Finance. However, the court also held that the FSIA’s commercial activity exception applies to Sberbank’s conduct, as the alleged claims are based on commercial activities—facilitating money transfers—carried out in the United States. Additionally, the court held that the ATA’s immunity provisions apply to instrumentalities of foreign states and that the FSIA’s commercial activity exception applies equally to actions brought under the ATA. Consequently, the court affirmed the district court’s order and remanded the case for further proceedings. View "Schansman v. Sberbank" on Justia Law

Debtor-Appellant Avianca Holdings S.A. agreed to pay additional rental payments to Creditors-Appellees Burnham Sterling and Company LLC and Babcock & Brown Securities LLC under 20 aircraft leases. Avianca failed to make certain payments that were due more than 60 days after filing for bankruptcy but before the leases were assumed or rejected. The creditors moved to compel payment under 11 U.S.C. § 365(d)(5), which requires timely performance of obligations arising from or after 60 days post-bankruptcy filing under an unexpired lease of personal property until the lease is assumed or rejected.The bankruptcy court granted the creditors' motion, concluding that Avianca's obligation to pay arose when the payments came due under the lease terms. Avianca appealed, arguing that the obligation arose pre-petition when the leases were executed. The district court affirmed the bankruptcy court's decision, agreeing that the obligations arose as the payments came due.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the lower courts' decisions. The court held that under 11 U.S.C. § 365(d)(5), a debtor's obligation to make payments arises when the payments come due according to the lease terms, not when the lease was executed. The court emphasized that the statutory language requires the debtor to perform obligations that originate from or after 60 days post-petition, aligning with the "billing date" approach rather than the "accrual" approach. The court also noted that this interpretation is consistent with the broader statutory scheme and bankruptcy policy, which aims to balance creditor protection with the debtor's ability to reorganize. View "In re Avianca Holdings S.A." on Justia Law

Shanda Games Limited, a video game company registered in the Cayman Islands, issued proxy materials as part of a freeze-out merger. The lead plaintiff, David Monk, alleged that these materials were materially misleading, causing him to accept the merger price instead of exercising his appraisal rights. The United States District Court for the Southern District of New York dismissed Monk’s claims, stating he failed to properly allege loss causation.The district court found that Monk had adequately pleaded that Shanda made two material misstatements but ruled that Monk had failed to plead reliance because the market in ADS was not efficient after the merger announcement. The court also held that the statements about the merger's fairness were inactionable opinions. Monk's motion for reconsideration was denied in part and granted in part, and his motion to add another lead plaintiff was denied. Monk filed a second amended complaint, which was again dismissed for failure to state a claim.The United States Court of Appeals for the Second Circuit reviewed the case and held that the district court erred in dismissing Monk’s claims. The appellate court concluded that Monk adequately alleged material misstatements, including the preparation of financial projections, the projections themselves, and the fairness of the merger. The court also found that Monk adequately pleaded scienter, reliance, and loss causation. The court affirmed in part, vacated in part, and remanded the case for further proceedings. View "In re Shanda Games Ltd. Securities Litigation" on Justia Law

The Unkechaug Indian Nation and its Chief, Harry B. Wallace, challenged the enforcement of New York State Department of Environmental Conservation (DEC) regulations prohibiting the harvesting of American glass eels. They argued that the Andros Order, a 1676 agreement between the Royal Governor of New York and the Nation, allowed them to fish freely and preempted the DEC’s regulations. The plaintiffs sought declaratory and injunctive relief to prevent the DEC from enforcing these regulations against the Nation’s members in their customary fishing waters.The United States District Court for the Eastern District of New York granted summary judgment to the defendants, holding that the Andros Order is not federal law preempting New York’s fishing regulations. The court also found that the Eleventh Amendment barred claims against the DEC but allowed claims for declaratory and injunctive relief against Commissioner Basil Seggos in his official capacity under the Ex parte Young exception to sovereign immunity.The United States Court of Appeals for the Second Circuit affirmed the District Court’s decision. The appellate court held that the Eleventh Amendment barred claims against the DEC but allowed claims against Commissioner Seggos under the Ex parte Young exception. The court also found that the District Court did not abuse its discretion in failing to resolve Daubert motions or privilege disputes before ruling on the summary judgment motions. Finally, the court held that the Andros Order is not federal law binding on the United States because it was entered before the Confederal period, on behalf of the British Crown, and has not been ratified by the United States. Therefore, the Andros Order does not preempt New York’s fishing regulations, and the judgment of the District Court was affirmed. View "Unkechaug Indian Nation v. Seggos" on Justia Law

Oladayo Oladokun was convicted in the United States District Court for the Southern District of New York after pleading guilty to conspiracy to commit bank fraud and conspiracy to commit money laundering. His involvement included directing others to open bank accounts to receive stolen or forged checks and launder money. He was sentenced to 125 months in prison followed by three years of supervised release.Oladokun appealed, challenging the district court's calculation of his offense level under the United States Sentencing Guidelines. He argued against the application of an eighteen-level enhancement based on the loss amount, a two-level enhancement for ten or more victims, and a four-level enhancement for his role in an offense involving five or more participants. Additionally, he claimed ineffective assistance of counsel for not requesting a Franks hearing to suppress evidence obtained from his residence.The United States Court of Appeals for the Second Circuit reviewed the case. The court found that the district court did not err in its factual basis for the Guidelines enhancements. It upheld the eighteen-level enhancement for the intended loss amount, the two-level enhancement for ten or more victims, and the four-level enhancement for Oladokun's role in the offense. The court also rejected Oladokun's ineffective assistance claim, noting that even if his counsel had been ineffective, Oladokun failed to show the requisite prejudice because the warrant application was supported by probable cause without the challenged evidence.The Second Circuit affirmed the judgment of the district court. View "United States v. Oladokun" on Justia Law

Relators Ralph Billington, Michael Aceves, and Sharon Dorman filed a qui tam action against HCL Technologies Ltd. and HCL America, Inc., alleging that HCL defrauded the United States by securing visas for foreign employees, primarily from India, to avoid paying higher salaries to American citizens. They claimed this scheme violated the False Claims Act (FCA) by underpaying H-1B visa workers, thus reducing tax obligations, and by applying for less expensive visas instead of the required H-1B visas, thereby avoiding higher visa application fees.The United States District Court for the District of Connecticut dismissed all claims, concluding that relators could not demonstrate that HCL avoided or decreased any established obligation to pay money to the United States. The court found no established obligation for HCL to pay federal payroll taxes on wages it never paid and no obligation to pay higher H-1B visa fees when it applied for B-1 and L-1 visas instead.The United States Court of Appeals for the Second Circuit reviewed the case and agreed with the district court. The appellate court held that HCL did not have an obligation under the FCA to pay taxes on wages it never paid, as the duty to pay taxes arises only from wages actually paid. Similarly, the court found no obligation for HCL to pay higher visa application fees for visas it never applied for. The court affirmed the district court’s judgment, concluding that relators failed to state a plausible claim that HCL decreased or avoided an established obligation to pay money to the United States. View "United States ex rel. Billington v. HCL Techs. Ltd." on Justia Law

Plaintiffs, rightsholders of musical recordings affiliated with EMI, sued Vimeo, Inc. and Connected Ventures, LLC for copyright infringement, alleging that Vimeo users uploaded videos containing their copyrighted music without authorization. Vimeo claimed protection under the safe harbor provision of Section 512(c) of the Digital Millennium Copyright Act (DMCA), which shields service providers from liability for user-uploaded infringing content under certain conditions.The United States District Court for the Southern District of New York granted summary judgment in favor of Vimeo, finding that Vimeo was entitled to the DMCA safe harbor. The court concluded that Vimeo did not have actual or red flag knowledge of the infringing content and did not have the right and ability to control the infringing activity in a manner that would disqualify it from the safe harbor.The United States Court of Appeals for the Second Circuit reviewed the case. The court held that Vimeo employees did not have red flag knowledge of the infringing content because it was not obvious to an ordinary person without specialized knowledge of music or copyright law that the videos were infringing. The court also found that Vimeo did not exercise substantial influence over user activities to the extent required to lose the safe harbor protection. The court noted that Vimeo's actions, such as promoting certain videos and banning specific types of content, did not amount to the level of control that would disqualify it from the safe harbor.The Second Circuit affirmed the district court's judgment, holding that Vimeo was entitled to the DMCA safe harbor and dismissing Plaintiffs' claims of copyright infringement. View "Capitol Records v. Vimeo" on Justia Law

Plaintiff Robert Pearson Jr. was held at the Orange County Correctional Facility for a parole violation. He alleged that corrections officers beat him in his cell, tampered with his food, sprayed chemicals in his eye, causing pain and impaired vision, and denied him medical care. Pearson filed a pro se amended complaint under 42 U.S.C. § 1983 against Sergeant Gessner and Officers Morris, Halstead, and Broeckel.The United States District Court for the Southern District of New York dismissed Pearson's complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6). The court considered materials outside the amended complaint, including a video and an Inmate Misbehavior Report, which it deemed integral to the complaint. The court found that the use of pepper spray by Gessner was not objectively unreasonable and that Pearson failed to state a claim for denial of medical care, as he was taken to the infirmary and refused treatment.The United States Court of Appeals for the Second Circuit reviewed the case. The court agreed that the district court erred in considering materials outside the amended complaint, specifically the Misbehavior Report and the video, which were not relied upon by Pearson in drafting his complaint. The appellate court vacated the judgment in part, remanding for further proceedings on the excessive force claims. The court affirmed the dismissal of the claims regarding denial of medical assistance, as the amended complaint itself indicated that Pearson was taken to the medical facility.The appellate court instructed that Pearson should be allowed to file a second amended complaint to clarify which defendants were responsible for the alleged acts of excessive force. The judgment was affirmed in part, vacated in part, and remanded for further proceedings. View "Pearson v. Gesner" on Justia Law

While incarcerated at Woodborne Correctional Facility, Antonio Mallet sought medical care for urinary obstruction and painful urination, symptoms indicative of prostate cancer. Despite a cystoscopy revealing concerning results, prison doctors did not conduct further tests for prostate cancer, instead prescribing medication for a benign enlarged prostate. Mallet was released on parole in January 2019 and was diagnosed with late-stage prostate cancer in May 2021. He filed a lawsuit on February 25, 2022, against the State of New York, the New York State Department of Corrections and Community Supervision (DOCCS), its acting commissioner, and three medical providers, alleging deliberate indifference to his medical needs and other constitutional violations, as well as state law claims for malpractice and negligence.The United States District Court for the Southern District of New York dismissed Mallet’s constitutional claims as untimely, reasoning that the claims accrued by the time he was released from custody in January 2019, thus falling outside the three-year statute of limitations for Section 1983 claims in New York. The court declined to exercise supplemental jurisdiction over the state law claims.The United States Court of Appeals for the Second Circuit found it plausible that Mallet’s deliberate indifference claim had not accrued by February 25, 2019, making his complaint potentially timely. The court reversed the district court’s dismissal of the deliberate indifference claims against Dr. Makram and Dr. Stellato, finding them plausible, but affirmed the dismissal of the claim against Professor Ritaccio and the constitutional claims against New York State, DOCCS, and Annucci due to sovereign immunity. The court vacated the dismissal of the remaining constitutional claims and state law claims, remanding the case for further proceedings. View "Mallet v. New York State Department of Corrections and Community Supervision" on Justia Law

In 1960, the Cuban government seized Banco Nuñez and Banco Pujol, two privately held Cuban banks, and absorbed their assets into Banco Nacional de Cuba (BNC). Decades later, in 1996, the U.S. Congress passed the Helms-Burton Act, which allows U.S. nationals to sue any person trafficking in property confiscated by the Cuban regime. The plaintiffs, successors-in-interest to the assets of Banco Nuñez and Banco Pujol, brought a Helms-Burton action against Société Générale and BNP Paribas, alleging that the banks trafficked in their confiscated property by providing financial services to BNC.The plaintiffs initially filed their suits in the Southern District of Florida and the Southern District of New York. The district courts dismissed the complaints, holding that most of the allegations were time-barred under 22 U.S.C. § 6084, which they construed as a statute of repose. The courts also found that the remaining allegations failed to plausibly allege trafficking as defined by the Helms-Burton Act.The United States Court of Appeals for the Second Circuit reviewed the case. The court held that the plaintiffs had Article III standing to bring their claims. However, it affirmed the district courts' rulings that 22 U.S.C. § 6084 is a statute of repose, not subject to equitable tolling, and that the presidential suspensions of the right to bring an action under the Act did not toll the time bar. The court also concluded that the plaintiffs' allegations of conduct after 2010 were insufficient to state a plausible claim of trafficking under the Helms-Burton Act. Consequently, the Second Circuit affirmed the judgments of the district courts, dismissing the plaintiffs' actions. View "Moreira v. Société Générale,S.A." on Justia Law