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

Plaintiff filed a Chapter 13 bankruptcy petition. In her bankruptcy schedules, Plaintiff disclosed that she was the beneficiary of an annuity and claimed the annuity as exempt from the bankruptcy estate. The County failed to object to the claimed exemption within the timeframe prescribed by Federal Rule of Bankruptcy Procedure 4003(b). Plaintiff filed an adversary proceeding against the County seeking to avoid the tax foreclosure as a constructively fraudulent conveyance under 11 U.S.C. Section 548. The Bankruptcy Court held that the foreclosure amounted to a constructively fraudulent transfer of property, and it avoided the transfer. The district court affirmed. The County argues that it was not subject to the deadline prescribed by Rule 4003(b).   The Second Circuit affirmed. The court concluded that the Bankruptcy Court correctly applied Rule 4003(b). The court also found no error in the Bankruptcy Court’s choice of remedy. The court explained the Bankruptcy Code permits a trustee to avoid a transfer that occurred within two years of the filing of a bankruptcy petition. Here, because the Property was transferred within two years of Plaintiff’s bankruptcy petition, that transfer may be avoided if Plaintiff did not receive reasonably equivalent value for it and was insolvent on the date of transfer or rendered insolvent by the transfer on March 7, 2017. The Bankruptcy Court was compelled to exclude from its calculation of Plaintiff’s assets “property that may be exempted from property of the estate under section 522.” The plain text of the Code thus contemplates that insolvency is determined based on the debts and properties of and exemptions from the bankruptcy estate. View "DuVall v. County of Ontario" on Justia Law

il”) in Connecticut state court, alleging that Exxon Mobil had engaged in a decades-long campaign of deception to knowingly mislead and deceive Connecticut consumers about the negative climatological effects of the fossil fuels that Exxon Mobil was marketing to those consumers. Based on these allegations, Connecticut asserted eight claims against Exxon Mobil, all under the Connecticut Unfair Trade Practices Act (“CUTPA”). Exxon Mobil removed the case to federal district court, invoking subject-matter jurisdiction under the federal-question statute, the federal-officer removal statute, and the Outer Continental Shelf Lands Act (the “OCSLA”), as well as on other bases no longer pressed in this appeal. The district court rejected each of Exxon Mobil’s theories of federal subject-matter jurisdiction and thus remanded the case to state court. Exxon Mobil appealed.   The Second Appellate affirmed the district court’s order. The court explained that there are only three exceptions to the “general rule” that “absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege a federal claim.” The court reasoned that Exxon Mobil cannot establish Grable jurisdiction simply by gesturing toward ways in which “this case” loosely “implicates” the same subject matter as “the federal common law of transboundary pollution.” The court wrote that because no federal issue is necessarily raised by any of Connecticut’s CUTPA claims, the Grable/Gunn exception from the well-pleaded complaint rule is inapplicable here. View "Connecticut ex rel. Tong v. Exxon Mobil Corp." on Justia Law

Plaintiff was sitting on a bus when police officers boarded the bus, removed him, and arrested him on a misdemeanor bench warrant. Plaintiff, then 67 years old, was a resident of the City of Elmira (the "City"), in Chemung County (the "County"), New York. Plaintiff was taken to the County Jail, where an officer subjected him to a visual body cavity strip search. In addition, although Plaintiff’s girlfriend promptly posted his bail, his release was delayed about two hours. Plaintiff sued the County, the City, and officers in the County Sheriff's Department and City Police Department in the Western District of New York pursuant to 42 U.S.C. Section 1983. The district court dismissed the claims against the City and County at the outset of the case and eventually granted summary judgment dismissing the claims against the individual defendants as well.  Plaintiff appealed the dismissal of the claims against the individual defendants.   The Second Circuit affirmed in part, vacated in part, and remanded. The court explained that on the record, a reasonable jury could find that, instead of simply following the orders of a superior officer, the corrections officer was a party to harassment and demeaning conduct culminating in the search -- conduct that he, and other reasonable officers, should have known had no legitimate penological purpose and was therefore unconstitutional. The court explained that a jury may find otherwise, but in light of these disputed material facts, the district court erred when it granted summary judgment on Plaintiff’s strip search claim. View "Murphy v. Hughson et al." on Justia Law

Defendant pleaded guilty to unlawful possession of a firearm and ammunition after previously having been convicted of a felony. The district court determined that Defendant’s recommended range of imprisonment under the Sentencing Guidelines was 15 to 21 months. On July 7, 2021, the court nevertheless sentenced Defendant principally to an above-Guidelines sentence of 48 months of imprisonment. Defendant argued that his sentence was both procedurally and substantively unreasonable because the district court failed to adequately explain its rationale for the sentence it imposed on Defendant and because the district court’s stated justifications were insufficient to support the sentence imposed.   The Second Circuit affirmed the judgment. The court explained that to hold that Defendant’s sentence was not ultimately reasonable, the court would need to conclude that the sentence he received was “shockingly high.” Defendant argued that his sentence meets that standard because, inter alia, he had a difficult upbringing, completed many rehabilitative program hours while in prison, and does not have a lengthy history of violence. The court explained that these facts weigh in Defendant’s favor and likely were part of the district court’s reasons for not sentencing Defendant to a 70-month imprisonment term as the government requested and as Defendant received when he was convicted of the same offense in 2005. However, they are not strong enough to demonstrate that the district court abused its discretion when sentencing Defendant to a 48-month imprisonment term. Accordingly, the court concluded that the district court did not commit any plain procedural error when imposing Defendant’s sentence. View "United States v. Davis" on Justia Law

Defendant-Appellant Petróleos de Venezuela, S.A. (“PDVSA”), an oil company wholly owned by the Bolivarian Republic of Venezuela, entered into two Note Agreements and a Credit Agreement with the predecessor-in-interest to now-Plaintiff-Appellee Red Tree Investments, LLC (“Red Tree”). PDVSA became delinquent on its obligations under the contracts. Red Tree’s predecessor-in-interest accelerated the outstanding debt. Then Red Tree initiated these actions in Supreme Court, New York County, which Defendants removed to district court. PDVSA claimed that any further payment under the Agreements was impossible and should therefore be excused. The district court granted summary judgment against PDVSA on the grounds that PDVSA had failed to provide sufficient evidence that payment was impossible or in the alternative, that any impediment to payment was not reasonably foreseeable. It therefore entered judgment in favor of Red Tree and imposed post-judgment interest. On appeal, PDVSA contends that the district court erred in concluding that no reasonable trier of fact could find that payment was impossible or that U.S. sanctions were unforeseeable. PDVSA further asserts that the district court incorrectly calculated post-judgment interest.   The Second Circuit affirmed. The court agreed with the district court that payment by PDVSA was not impossible. Further, the court concluded that the district court did not err in its calculation of post-judgment interest. The court explained that under the plain language of the Note and Credit Agreements, the outstanding principal and interest that accrued prejudgment—including both default and ordinary interest—are subject to default interest post-judgment. View "Red Tree Investments, LLC v. PDVSA, Petróleo" on Justia Law

In January 2017, Defendant-Appellant Petróleos de Venezuela, S.A. (“PDVSA”), an oil company wholly owned by the Bolivarian Republic of Venezuela, entered into a Note Agreement with then-Plaintiff-Appellee Dresser-Rand Company. PDVSA made two of the twelve payments due under the Note Agreement in April and July 2017 but failed to make any subsequent payments. In February 2019, Dresser-Rand declared PDVSA to be in default, accelerated the debt, and initiated this action in Supreme Court, New York County, which Defendants removed to the district court. PDVSA claimed that any further payment was impossible and should therefore be excused. The district court concluded that PDVSA had failed to prove that repayment was impossible. It therefore entered judgment in favor of Dresser-Rand. On appeal, PDVSA contends that the district court erred in concluding that payment was not impossible. PDVSA further asserts that the district court incorrectly calculated post-judgment interest.   The Second Circuit affirmed. The court agreed with the district court that payment by PDVSA was not impossible, and the court further concluded that PDVSA forfeited any arguments relating to post-judgment interest. The court explained that the evidence demonstrates that PDVSA never attempted payment to a different bank or in an alternative currency, nor did it investigate whether this manner of payment would have been truly impossible. Instead of the evidence shows, did nothing. PDVSA cannot benefit from the impossibility defense on speculation. View "Siemens Energy, Inc. v. PDVSA" on Justia Law

In the months following the 2020 presidential election, Defendant-Appellant threatened prominent elected officials in several posts on various social media platforms. A jury convicted Defendant of one count of threatening to assault and murder members of Congress. The district court sentenced Defendant to a prison term of nineteen months. On appeal, Defendant challenged the sufficiency of the evidence, a jury instruction, the partial closure of the courtroom due to the COVID-19 pandemic, and his sentence.The Second Circuit affirmed. The court explained that the constitutional fact doctrine’s requirement that courts “determine for themselves whether the fact-finder appropriately applied First Amendment law to the facts” is inapplicable where, as here, the First Amendment is not implicated. The court found that the evidence was sufficient to support Defendant’s conviction.   Defendant also argued that the district court violated his right to a public trial by excluding his father from the courtroom during the trial. The court explained that the Sixth Amendment guarantees defendants in a criminal prosecution the right to a public trial. However, the court reasoned as a general matter, courts may constitutionally close a courtroom under certain circumstances. Applying the relevant four-part test, the court found that the district court did not plainly err by excluding Defendant’s father from the trial courtroom.   Defendant also challenged the district court’s sentence on the ground that it improperly considered a rehabilitative purpose in sentencing him to prison. The court explained that in sentencing Defendant, the district court did not impermissibly consider rehabilitation. Rather, it considered the factors prescribed by 18 U.S.C. Section 3553(a) View "United States v. Hunt" on Justia Law

Plaintiffs-appellants, nineteen children in New York City’s foster care system, filed suit alleging “systemic deficiencies” in the administration of the City’s foster care system in violation of federal and state law. The named Plaintiffs moved to represent a class of all children who are now or will be in the foster care custody of the Commissioner of New York City’s Administration for Children’s Services and two subclasses. As remedies, they sought injunctive and declaratory relief to redress alleged class-wide injuries caused by deficiencies in the City’s administration—and the New York State Office of Children and Family Services’ oversight—of foster care. The district court denied Plaintiffs’ motion for class certification. Plaintiffs appealed, arguing that the district court erred in its analysis of the commonality and typicality requirements under Federal Rule of Civil Procedure 23(a).   The Second Circuit vacated the district court’s order denying class certification and remanded. The court held that the district court erred in its analysis of commonality and typicality under Rule 23. The court explained that the district court did not determine whether commonality and typicality exist with respect to each of Plaintiffs’ claims. Instead, it concluded that commonality was lacking as to all alleged harms because “Plaintiffs’ allegations do not flow from unitary, non-discretionary policies.” The court held that this approach was legal error requiring remand. Further, the court wrote that here, the district court largely relied upon its commonality analysis to support its finding that typicality was not satisfied. Thus, the deficiencies identified in its commonality inquiry can also be found in its handling of typicality. View "Elisa W. v. City of New York" on Justia Law

This case involves a dispute between two law firms, each of which claims the right to represent a Salvadoran company in its efforts to stave off a transnational judgment-collection effort. Specifically, the two firms are vying to defend ALBA Petróleos de El Salvador S.E.M. de C.V. (“ALBA”) in district court from the enforcement of a $45 million default judgment obtained against Colombian narco-terrorist organizations. Marcos D. Jiménez appeared to represent ALBA. White & Case LLP moved to substitute itself as ALBA’s counsel. Both purport to represent ALBA. White & Case argued that the political-question doctrine, the act-of-state doctrine, and Venezuelan law required the district court to allow it to represent ALBA. Jiménez responded that he had the right to represent ALBA under Salvadoran law. The district court denied White & Case’s motion, holding that the issue was governed by Salvadoran law. White & Case filed an interlocutory appeal and, in the alternative, a petition for a writ of mandamus.   The Second Circuit dismissed the appeal and denied the petition for a writ of mandamus. The court wrote that it lacks appellate jurisdiction over this interlocutory appeal of the denial of a third-party motion to substitute counsel. The court explained that such an appeal fails to satisfy the requirements of the collateral order doctrine because the denial of a motion to substitute counsel is effectively reviewable after final judgment and does not implicate an important issue separate from the merits of the underlying action. White & Case also does not meet the demanding standard required to obtain a writ of mandamus. View "In re ALBA Petróleos de El Salvador S.E.M. de C.V." on Justia Law

Plaintiffs are two couples, both engaged to be married when they filed suit and a New York-based minister. Together, the individuals brought a constitutional challenge to state COVID-19 regulations that limited to fifty the number of attendees at social gatherings. After the expedited briefing, the district court granted Plaintiffs’ motion for a preliminary injunction just forty-five minutes before the start time of the first of the two scheduled weddings. The first of the couples married in their planned ceremony and held their wedding celebration involving over 100 guests. A Second Circuit judge issued a temporary administrative stay of the district court’s order. A separate panel later dismissed the appeal as moot and vacated the district court’s order after the second couple announced that, regardless of the outcome of the appeal, they no longer planned to hold a wedding. All five Plaintiffs then sought an award of attorney’s fees in the district court. The district court denied their motion.   The Second Circuit affirmed. The court explained that here, Plaintiffs managed to secure a preliminary injunction with just forty-five minutes to spare after an abbreviated briefing schedule. The court further wrote that their initial success was fleeting: Defendants succeeded in obtaining a stay of the injunction from the court within two weeks of its issuance, and the district court’s order was later vacated after Plaintiffs intentionally mooted their claims during the pendency of Defendants’ appeal. The preliminary injunction in this case does not support a determination that Plaintiffs are prevailing parties eligible for attorney’s fees under Section 1988. View "DiMartile v. Hochul" on Justia Law