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

Plaintiffs are twenty-six former employees of International Business Machines Corporation (“IBM”) who signed separation agreements requiring them to arbitrate any claims arising from their termination by IBM. The agreements set a deadline for initiating arbitration and included a confidentiality requirement. Plaintiffs missed the deadline but nonetheless tried to arbitrate claims under the Age Discrimination in Employment Act of 1967 (“ADEA”). Their arbitrations were dismissed as untimely. They then sued IBM in district court, seeking a declaration that the deadline is unenforceable because it does not incorporate the “piggybacking rule,” a judge-made exception to the ADEA’s administrative exhaustion requirements. Shortly after filing suit, Plaintiffs moved for summary judgment and attached various documents obtained by Plaintiffs’ counsel in other confidential arbitration proceedings. IBM moved to seal the confidential documents. The district court granted IBM’s motions to dismiss and seal the documents. On appeal, Plaintiffs argued that (1) the filing deadline in their separation agreements is unenforceable and (2) the district court abused its discretion by granting IBM’s motion to seal.   The Second Circuit affirmed. The court first wrote that the piggybacking rule does not apply to arbitration and, in any event, it is not a substantive right under the ADEA. Second, the court held that the presumption of public access to judicial documents is outweighed here by the Federal Arbitration Act’s (“FAA”) strong policy in favor of enforcing arbitral confidentiality provisions and the impropriety of counsel’s attempt to evade the agreement by attaching confidential documents to a premature motion for summary judgment. View "In re IBM Arb. Agreement Litig." on Justia Law

Petitioners challenged he post-trial rulings of the United States Tax Court regarding their tax obligations for the 2004 tax year. Petitioners argued that the Tax Court erroneously concluded that (1) they filed a valid joint return, (2) the Internal Revenue Service issued a statutory notice of deficiency before the limitations period for a tax assessment under I.R.C. Sections 6501(a) and (c)(4) expired, (3) they owed a $28,836 penalty pursuant to I.R.C. Section 6651(a)(1) for filing a late tax return, and (4) they owed a $128,526 penalty pursuant to I.R.C. Section 6662 for filing an inaccurate tax return.   The Second Circuit affirmed. The court held that the Tax Court did not clearly err in its finding that Petitioners intended to jointly file the Return. Further, the court wrote that the IRS issued the Deficiency Notice within the limitations period for the tax assessment. Moreover, the court held that Petitioners are subject to a $28,836 late-filing penalty under I.R.C. Section 6651(a)(1). Finally, the court held that Petitioners are subject to a $128,526 accuracy-related penalty under I.R.C. Section 6662. View "Soni v. Comm'r of Internal Revenue" on Justia Law

Plaintiff Jane Doe alleged that for a period of seven years, she suffered sexual, physical, and psychological abuse at the hands of an Immigration and Customs Enforcement (ICE) officer. Four years after the alleged abuse ended, Doe brought this action against the officer, the United States, the Department of Homeland Security, and two senior DHS officials, asserting various federal and state claims. The district court granted Defendants’ motions for summary judgment based on the applicable statutes of limitations and denied Doe’s request for equitable tolling.   The Second Circuit vacated the district court’s ruling and held that the district court erred in granting summary judgment because the evidence in the record could have allowed it to conclude that the prerequisites for equitable tolling were met. The court explained that the record makes plausible the inferences that years of violent sexual abuse and threats to Doe’s life constituted an extraordinary circumstance preventing Doe from sooner pursuing her claims and that she acted with reasonable diligence. View "Doe v. United States" on Justia Law

Plaintiff appealed the district court’s judgment dismissing for failure to state a claim his suit against Defendant-Appellee New York State Department of Corrections and Community Supervision (“DOCCS”) for attorneys’ fees and costs under 20 U.S.C. Section 1415(i)(3)(B)(i), the fee-shifting provision of the Individuals with Disabilities Education Act (“IDEA”).   The Second Circuit reversed and remanded. The court explained that the relevant provision permits a court, in its discretion, to award reasonable attorneys’ fees and related costs to “a prevailing party who is the parent of a child with a disability.” 20 U.S.C. Section 1415(i)(3)(B)(i)(I). The IDEA defines “parent” broadly to include, inter alia, foster parents, guardians, individuals “acting in the place of a natural or adoptive parent . . . with whom the child lives,” and “individual[s] who [are] legally responsible for the child’s welfare.” On de novo review, the court concluded that the IDEA permits a court to award fees and costs to J.S. as “an individual who is legally responsible for the child’s welfare” because, as an adult “child with a disability” and without representation by a guardian, natural parent, or appointed individual, he prevailed in his action on his own behalf seeking required educational services from DOCCS. View "J.S. v. DOCCS" on Justia Law

Defendants Citigroup Inc. and Citibank, N.A. (collectively, “Citi”) appealed from the bankruptcy court’s order granting in part and denying in part Citi’s motion, pursuant to Federal Rule of Bankruptcy Procedure 7012, to dismiss Plaintiff’s amended complaint, or, alternatively, to strike or dismiss the nationwide class action allegations therein. On appeal, Citi advanced s two primary arguments. First, Citi argues that a bankruptcy court’s civil contempt power is limited to the enforcement of its own orders and, therefore, that the Bankruptcy Code does not authorize one bankruptcy court to adjudicate the claims of a nationwide class of former debtors seeking to hold Citi in contempt of discharge orders entered by other bankruptcy courts across the country. Second, Citi argues that Plaintiff’s claim for violation of her discharge order and injunction under 11 U.S.C. Section 524(a)(2) fails to satisfy the civil contempt standard under Taggart v. Lorenzen, 139 S. Ct. 1795 (2019).The Second Circuit affirmed in part and reversed in part the bankruptcy court’s order and remanded the case to the bankruptcy court. The court explained that the Bankruptcy Code does not authorize a bankruptcy court to enforce another bankruptcy court’s discharge injunction. Further, the court wrote that there is no Section 524 “affirmative act” deficiency here. An intentional and systematic refusal to update the credit report upon the debtor’s request constitutes “an act to collect” under Section 524(a)(2), where, objectively, it has the practical effect of improperly coercing the debtor into paying off a discharged debt. View "In re: Kimberly Bruce" on Justia Law

The Second Circuit vacated and remanded the district court’s ruling granting summary judgment for Defendants, a former Immigration and Customs Enforcement officer. Plaintiff, Jane Doe, alleged she was sexually and psychologically abused by Defendant, a former Immigration and Customs Enforcement officer. Four years after the abuse ended, Doe initiated this action against Rodriguez and various government defendants. Defendants moved for summary judgment, arguing Doe’s claims were untimely. Doe asked the district court to equitably toll the applicable statutes of limitations. The court granted summary judgment to Defendants.   The Second Circuit vacated and remanded. The court explained that in this case, the district court denied equitable tolling as a matter of law, purporting to draw every inference in favor of Doe. The court vacated its judgment because the record allows for a finding that Doe faced extraordinary circumstances and acted with reasonable diligence. On remand, the district court should act in a fact-finding capacity and determine whether Doe has demonstrated extraordinary circumstances and reasonable diligence. The court explained that if the court determines that she has established these prerequisites for equitable tolling, then it should engage in the discretionary determination of whether to grant her request for equitable tolling. View "Doe v. United States" on Justia Law

Petitioners challenged the post-trial rulings of the United States Tax Court regarding their tax obligations for the 2004 tax year. Petitioners argued that the Tax Court erroneously concluded that (1) they filed a valid joint return, (2) the Internal Revenue Service issued a statutory notice of deficiency before the limitations period for a tax assessment under I.R.C. Sections 6501(a) and (c)(4) expired, (3) they owed a $28,836 penalty pursuant to I.R.C. Section 6651(a)(1) for filing a late tax return, and (4) they owed a $128,526 penalty pursuant to I.R.C. Section 6662 for filing an inaccurate tax return.   The Second Circuit affirmed. The court held that the Tax Court did not clearly err in its finding that Petitioners intended to jointly file the Return. Further, the court concluded that the IRS issued the Deficiency Notice within the limitations period for the tax assessment. The court held that Petitioners are subject to a $28,836 late-filing penalty under I.R.C. Section 6651(a)(1). Finally, the court held that Petitioners are subject to a $128,526 accuracy-related penalty under I.R.C. Section 6662. The court explained that Petitioner’s inaccuracy was not the product of reasonable reliance upon the advice of a tax professional. As the Tax Court also found, Petitioners failed to provide their accountants “necessary and accurate information.” Moreover, the record includes evidence that Petitioner disregarded the advice of accountants who warned him that he would need proof to substantiate the claimed loss. View "Soni v. Comm'r of Internal Revenue" on Justia Law

Defendant pleaded guilty in district court to conspiracy to commit honest services wire fraud. Defendant’s underlying criminal conduct included facilitating a bribe that resulted in the Correction Officers’ Benevolent Association (“COBA”), investing $20 million with Platinum Partners (“Platinum”), a hedge fund that ultimately declared bankruptcy amid government investigations into fraud. Following his guilty plea, Defendant’s case was reassigned to another district judge for sentencing. After his sentencing hearing but prior to his final restitution determination, Defendant moved to have his case reassigned to another district judge. His motion was premised on the recently discovered personal relationship between the district judge in his case and a defendant and a cooperating witness in the ongoing prosecutions against those involved in the Platinum fraud. The district court denied that motion and ordered Defendant to pay restitution to COBA for all of its remaining losses. On appeal, Defendant argued that his case should have been reassigned for resentencing or, in the alternative, that the district court erred in imposing restitution for all of COBA’s losses.   The Second Circuit remanded the case for reassignment to a different district judge and for plenary resentencing. The court held that the district judge erred in not recusing himself under Section 455(a). The judge not only had a close, near-paternal relationship with the witness, but he also advised the witness on how to proceed in his pending criminal case arising from the Platinum fraud. The judge’s relationship with the witness was sufficiently close, and his case was sufficiently related to Defendant’s case that a reasonable person would have questioned the district court’s impartiality. View "United States of America v. Rechnitz" on Justia Law

Petitioner petitioned for review of an order of the Board of Immigration Appeals (BIA) affirming a decision of an Immigration Judge (IJ) that denied his applications for asylum, withholding of removal, and relief under the Convention Against Torture and ordered him removed from the United States. The IJ’s decision was based, in part, on its finding that Petitioner was not credible.   The Second Circuit granted Petitioner’s petition for review and vacated the BIA’s decision. The court remanded, concluding that certain reasons for that credibility finding were erroneous, and the court cannot be confident that the IJ would have made the same determination absent those errors. The court concluded that the agency improperly relied on a number of trivial omissions and inconsistencies to find that Petitioner was not credible. First, the details Petitioner provided in his testimony about his encounter with the police at the police station were also referenced in his prior asylum statement. And even if they were not, they would merely supplement rather than contradict the asylum statement and would thus not alone support an adverse credibility determination. Second, most, if not all, of the inconsistencies in Petitioner’s description of his relationship with his wife were trivial. Third, although any inconsistencies relating to Petitioner’s interactions with his cousin may be non-trivial, the court wrote that it cannot “confidently predict” that the IJ would have made the same adverse credibility determination based on those inconsistencies alone. View "Chen v. Garland" on Justia Law

Plaintiff-Appellant FAT Brands Inc. alleged that Defendants engaged in a conspiracy to defraud Plaintiff by misleading it as to the source and certainty of deal funding. On appeal, FAT Brands Inc. argues that the district court (Furman, J.) erred by dismissing claims against Defendants-Appellees Kristina Fields and Mickey Edison for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2); claims against Defendants-Appellees SJ Global Investments Worldwide, Ltd., SJ Global Investments, Ltd., Peter Samuel, and Neil Walsh for failure to state a claim pursuant to Rule 12(b)(6); and separate claims against Defendant-Appellee Wesley Ramjeet for failure to state a claim.   The Second Circuit vacated in part and affirmed in part the district court’s decision and remanded. The court held that FAT Brands plausibly alleged a conspiracy in which both Fields and Edison joined and participated. As such, the court turned to the three additional requirements to establish personal jurisdiction over a co-conspirator under New York law (awareness, benefit, and direction or control). The court held that all three are satisfied. Accordingly, the court vacated the district court’s order dismissing Count IV against Fields and Edison.   Further, the court wrote that because FAT Brands adequately alleged that the SJ Global Defendants conspired with the PPMT Defendants to commit the fraud, it states a claim against the SJ Global Defendants for the primary fraud tort as well. Accordingly, the court vacated the district court’s order dismissing Count IV against the remaining SJ Global Defendants. View "FAT Brands Inc. v. Ramjeet et al." on Justia Law