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

Defendant appealed from a judgment of conviction following his guilty plea to one count of transmitting a threat in interstate commerce, one count of threatening to assault a federal law officer, and one count of obstruction of justice. At a sentencing proceeding conducted by videoconference and under seal, the district court sentenced Defendant principally to eighty-four months’ imprisonment. On appeal, Defendant argues that (1) the government breached the plea agreement, (2) his sentence was procedurally unreasonable, and (3) the district court erred in conducting his sentencing by videoconference.   The Second Circuit affirmed. The court held that (1) the plea agreement expressly provided for the government to take the very actions Defendant now characterizes as breaches of that agreement, (2) the district court provided adequate notice and factual support for the sentencing variances and enhancements it applied, and (3) Defendant knowingly and voluntarily waived his right to be physically present at sentencing. The court also held as a matter of first impression – that sealed sentencings conducted by videoconference do not implicate Federal Rule of Criminal Procedure 53’s prohibition on “the broadcasting of judicial proceedings from the courtroom” or the procedural requirements associated with the CARES Act’s exception to Rule 53. View "United States v. Sealed Defendant One" on Justia Law

Defendants JABA Associates LP and its general partners appealed the district court’s judgment granting summary judgment to Plaintiff, (“Trustee”), pursuant to the Securities Investor Protection Act of 1970 (“SIPA”). JABA was a good faith customer of Bernard L. Madoff Investment Securities LLC (“BLMIS”) and held BLMIS Account Number 1EM357 (the “JABA Account”). The Trustee brought this action to recover the allegedly fictitious profits transferred from BLMIS to Defendants in the two years prior to BLMIS’s filing for bankruptcy. The district court granted recovery of $2,925,000 that BLMIS transferred to Defendants in the two years prior to BLMIS’s filing for bankruptcy, which made it recoverable property under SIPA.Defendants appealed the district court’s grant of summary judgment. The Second Appellate District affirmed reasoning that because is no genuine dispute of material fact that Bernard L. Madoff transferred the assets of his business to Defendants, which made it recoverable property under SIPA, the district court properly granted summary judgment to Plaintiff. The court reasoned that here Here, Defendants argue that the Bankruptcy Code does not authorize an award of prejudgment interest because the statute is silent. Yet Defendants do not make any argument that this silence is dispositive. Further, the court wrote that prejudgment interest has been awarded against other similarly situated defendants in related SIPA litigation. Thus, the district court appropriately balanced the equities between the parties. Given this, the district court did not abuse its discretion in granting an award of 4 percent prejudgment interest to the Trustee. View "In re: Bernard L. Madoff Investment Securities LLC" on Justia Law

Petitioner appealed dismissing his pro se petition for a writ of habeas corpus and an order denying his motion for reconsideration. Petitioner challenged his conviction on the ground that the state court erroneously denied his motion to suppress a gun seized during an allegedly unlawful search. Without giving Petitioner prior notice and an opportunity to be heard, the district court dismissed the petition sua sponte, concluding that his Fourth Amendment claim could not provide a basis for habeas relief under Stone v. Powell, 428 U.S. 465 (1976), because Petitioner had a full and fair opportunity to litigate the claim in state court.   At issue is (1) whether a district court may dismiss a petition sua sponte under Stone without providing a petitioner notice and an opportunity to be heard; and (2) if such notice and an opportunity to be heard are required. The Second Circuit vacated the judgment. The court held that although a district court has the authority to raise the Stone issue sua sponte, a habeas petitioner is entitled to notice and an opportunity to be heard before a petition is dismissed under Stone. The court further concluded that, in this case, the district court did not comply with that procedure, and the denial of a post-judgment motion for reconsideration, which objects to the sua sponte dismissal under Stone, is not an adequate substitute for that requirement. View "Ethridge v. Bell" on Justia Law

Plaintiff sued individuals and entities affiliated with the Russian Orthodox Church Outside Russia ("ROCOR" and, collectively, "Defendants") -- for defamation, contending that they defamed him when they publicly accused him of forging a series of letters relating to his appointment as the Bishop of Miami. Defendants moved to dismiss based on the "church autonomy doctrine," arguing that Plaintiff's suit would impermissibly involve the courts in matters of faith, doctrine, and internal church government. The district court denied the motion. Defendants then filed a motion for reconsideration and a motion to limit discovery to the issue of whether the church autonomy doctrine applied or otherwise to stay proceedings. The district court denied those motions as well   The Second Circuit held that it lacks jurisdiction to hear the appeal because the collateral order doctrine does not apply in the circumstances here. Accordingly, the court granted Plaintiff’s July 15, 2021, motion to dismiss. Dismissed the appeal, and vacated the temporary stay granted on September 2, 2021. The court explained that the district court's orders lack the conclusiveness required for appellate jurisdiction under the collateral order doctrine. Likewise, the court concluded that the district court's orders do not involve a claim of right separable from the merits of the action. View "Belya v. Kapral, et al." on Justia Law

Plaintiffs in two putative class actions took out home mortgage loans from Bank of America, N.A. (“BOA”), one before and the other after the effective date of certain provisions of the DoddFrank Wall Street Reform and Consumer Protection Act (“DoddFrank”). The loan agreements, which were governed by the laws of New York, required Plaintiffs to deposit money in escrow accounts for property taxes and insurance payments for each mortgaged property. When BOA paid no interest on the escrowed amounts, Plaintiffs sued for breach of contract, claiming that they were entitled to interest under New York General Obligations Law Section 5-601, which sets a minimum 2% interest rate on mortgage escrow accounts. BOA moved to dismiss on the ground that GOL Section 5-601 does not apply to mortgage loans made by federally chartered banks because, as applied to such banks, it is preempted by the National Bank Act of 1864 (“NBA”). The district court disagreed and denied the motion.   The Second Circuit reversed and remanded. The court held that (1) New York’s interest-on-escrow law is preempted by the NBA under the “ordinary legal principles of pre-emption,” Barnett Bank of Marion Cnty., N.A. v. Nelson, 517 U.S. 25, 37 (1996), and (2) the Dodd-Frank Act does not change this analysis. GOL Section 5-601 thus did not require BOA to pay a minimum rate of interest, and Plaintiffs have alleged no facts supporting a claim that interest is due. View "Cantero v. Bank of Am., N.A." on Justia Law

Petitioner a native and citizen of Mexico, sought review of a Board of Immigration Appeals (“BIA”) decision affirming the decision of an Immigration Judge (“IJ”) denying Petitioner’s application for cancellation of removal. Petitioner’s application rested on his assertion that removing him from the United States would cause “exceptional and extremely unusual hardship” to his three young, U.S.-citizen children, whose mother, Petitioner testified, was unable to care for them. Petitioner sought a brief continuance of the merits proceeding to enable him to present live testimony from an expert and three others regarding his children’s health, the family’s circumstances, and the nature and severity of the hardship that his removal would cause. The IJ denied the requested continuance as well as an alternative request to permit the expert to testify by telephone and then found Petitioner ineligible for cancellation on the ground that he failed to establish the necessary hardship. The Board of Immigration Appeals affirmed.   The Second Circuit granted Petitioner’s petition. The court concluded that the agency abused its discretion in denying the brief continuance that Petitioner sought. The IJ’s denial fell outside the range of permissible decisions because it prevented Petitioner from presenting relevant and material testimony in support of his application with regard to the precise ground on which the BIA ruling turned. View "Martinez Roman v. Garland" on Justia Law

Plaintiff alleged that while he was incarcerated at a facility run by the New York Department of Corrections and Community Supervision (“DOCCS”), he was beaten by corrections officers who were attempting to break up a fight. He was transferred first to a mental health observation cell, then to the Central New York Psychiatric Center (“CNYPC”) in the custody of the New York State Office of Mental Health (“OMH”). During his stay at CNYPC, Plaintiff attempted to file a grievance for the alleged beating, but the grievance was refused for being untimely, for not being filed at the DOCCS facility at which he was housed, and because he was not allowed to file grievances with DOCCS while in OMH custody. Plaintiff appealed the district court’s ruling granting Defendants’ motion for summary judgment on his 28 U.S.C. Section 1983 claim for excessive force claim.   The Second Circuit reversed the district court’s ruling. The court held that Plaintiff was excused from his statutory obligation to exhaust his administrative remedies due to his transfer to mental health confinement which rendered the grievance program unavailable to him. The court explained that there is no reason to believe that Plaintiff could have requested an exception after he was transferred to OMH custody just as he would not be permitted to file a grievance against DOCCS once transferred. Second, even if Plaintiff had submitted a request for an exception within the thirteen days he was still in DOCCS custody, he would not have been able to file a grievance once he was transferred to OMH custody pursuant to Section 701.5(a). View "Romano v. Ulrich et al." on Justia Law

Defendant OneBeacon Insurance Company reinsured one of three excess insurance policies issued by Plaintiff Fireman’s Fund Insurance Company to policyholder ASARCO, Inc. After developing significant potential liability on claims made by asbestos-injured claimants, ASARCO sought coverage from Fireman’s Fund under all of its excess policies. ASARCO and Fireman’s Fund ultimately settled all of the claims under the three policies. Fireman’s Fund allocated a portion of that settlement to the policy reinsured by OneBeacon and sought reinsurance coverage on the allocated sum. OneBeacon rejected Fireman’s Fund’s claim, arguing that the settlement allocation violated the terms of the excess and reinsurance policies. The district court granted summary judgment to Fireman’s Fund, and OneBeacon appealed.   The Second Circuit affirmed. The court agreed with the district court that Fireman’s Fund’s allocation of a portion of the settlement to the excess policy reinsured by OneBeacon was not contrary to that policy’s exhaustion requirement or to the terms of the reinsurance policy. OneBeacon is therefore obligated under the reinsurance policy’s follow-the-settlements clause to provide the requested coverage. View "Fireman's Fund Ins. Co. v. OneBeacon Ins. Co." on Justia Law

Hudson Valley Federal Credit Union (“HVCU”) appealed from the district court’s ruling denying HVCU’s motion to compel arbitration of Plaintiff’s putative class action claims for breach of contract, breach of the covenant of good faith and fair dealing, and claims under New York law and the Federal Electronic Fund Transfer Act.   The Second Circuit vacated and remanded the district court’s ruling, holding that the record was insufficiently developed for the district court to deny the motion to compel arbitration. The court concluded that the record is insufficiently developed on the issue of whether the parties entered into an agreement to arbitrate and, as a consequence, the court wrote it cannot determine the matter of arbitrability “as a matter of law.” Therefore, the court remanded for the district court to consider further evidence or, if necessary, hold a trial.   The court further explained that it was an error for the district court to engage in the inquiry notice analysis based on the copy of the Internet Banking Agreement, which does not depict the content and design of the webpage as seen by users signing up for online banking. The court wrote that on remand, the district court should consider the design and content of the Internet Banking Agreement as it was presented to users in determining whether Plaintiff assented to its terms. And the district court should assess whether the Account Agreements are clearly identified and available to the users based on the court’s precedents. View "Zachman v. Hudson Valley Federal Credit Union" on Justia Law

Plaintiff Citibank, N.A, the Administrative Agent for the lenders on a $1.8 billion seven-year syndicated loan to Revlon Inc., appeals from the judgment of the district court in favor of Defendants, the Loan Managers for certain lenders, who received and refused to return  Citibank’s accidental, unintended early repayment of the loan. The district court, after a bench trial, relying on Banque Worms v. BankAmerica International, 570 N.E.2d 189 (N.Y. 1991), ruled that the rule of discharge for value provided a defense against Citibank’s suit for restitution.   The Second Circuit vacated the district court’s ruling. The court held because the Defendants had notice of the mistake and because the lenders were not entitled to repayment at the time, the rule of Banque Worms does not protect the Defendants. The court explained that the Court of Appeals’ specified requirement of entitlement to the money, combined with the cases it cited as precedents for the rule, and its continued espousal of New York’s general rule that mistaken payments should be returned, lead the court to conclude that, in New York, a creditor may not invoke the discharge-for-value rule unless the debt at issue is presently payable. Here, the debt on which Citibank mistakenly made a payment was not due for another three years. As a result, Defendants may not invoke the discharge-for-value rule as a shield against Citibank’s claims for restitution. View "In re: Citibank August 11, 2020" on Justia Law