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

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

Plaintiffs brought a class action complaint against Cellular Sales of New York, LLC and Cellular Sales of Knoxville, Inc. (“Cellular”) for unfair wage deductions, unpaid compensable work, untimely commissions, unjust enrichment, and failure to pay minimum wage and overtime under the FLSA and New York Labor Law. Essentially, Plaintiffs claim that Defendants misclassified them as independent contractors instead of employees as defined by the FLSA and [New York Labor Law], thus depriving them of employee benefits required by law.   Cellular appealed the district court’s order granting attorney’s fees to Plaintiffs. Cellular argued that (1) the district court abused its discretion in finding that Plaintiffs’ successful minimum wage and overtime claims were sufficiently intertwined with their unsuccessful unfair wage deduction, unpaid compensable work, and untimely commissions claims under the Fair Labor Standards Act and New York Labor Law; and (2) regardless of whether the claims were intertwined, that the district court abused its discretion in reducing the attorney’s fees award by only 40 percent given Plaintiffs’ relative lack of success. 
 The Second Circuit affirmed. The could be explained that Plaintiffs brought wage-and-hour statutory claims that clearly arise from a common nucleus of operative fact regarding their time working for Cellular. Thus, the district court’s finding that the discovery involved in litigating the unpaid overtime wage claims is inseparable from the discovery involved in the unfair wage deductions, unpaid compensable work, or untimely commissions claims is well supported.  Further, the court affirmed the attorney’s fee awards explaining that fee awards are reviewed under a deferential abuse of discretion standard. View "Holick v. Cellular Sales" on Justia Law

A group of public servants who had contacted Navient for help repaying their loans (collectively, “Plaintiffs”) filed a putative class action lawsuit, alleging that Navient had not “lived up to its obligation to help vulnerable borrowers get on the best possible repayment plan and qualify for PSLF.”   Navient moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, which the district court granted in part, dismissing all claims except “the claim brought under New York’s General Business Law Section 349”. The district court certified a class for settlement purposes under Federal Rule of Civil Procedure 23(b)(2) and approved the settlement as “fair, reasonable, adequate,” and “in the best interest of the Settlement Class as a whole.”   Two objectors now appeal that judgment, arguing that the district court erred in certifying the class, approving the settlement, and approving service awards of $15,000 to the named Plaintiffs. The Second Circuit affirmed concluding that the district court did not abuse its discretion in making any of these determinations. The court explained that here, the amended complaint plausibly alleged that the named Plaintiffs were likely to suffer future harm because they continued to rely on Navient for information about repaying their student loans. At least six of the named Plaintiffs continue to have a relationship with Navient. That is enough to confer standing on the entire class. Further, the court explained individual class members [in fact] retain their right to bring individual lawsuits,” and the settlement does not prevent absent class members from pursuing monetary claims. View "Hyland v. Navient Corporation" on Justia Law

Plaintiff filed for Social Security benefits, but her application was denied by the Social Security Commissioner. The Appeals Council denied review, which made the Commissioner’s decision final. Plaintiff appealed that decision to the district court, which denied her motion and granted the Commissioner’s motion for judgment on the pleadings. Plaintiff appealed that judgment.   The Second Circuit affirmed in part and remanded in part. The court held the district court failed to properly assess Plaintiff’s Residual Functional Capacity (RFC) with regard to her ability to work consistently as well as her limitations regarding social interactions, and that substantial evidence accordingly does not support the determination that Plaintiff’s psychological impairments do not render her disabled. By contrast, the court held that substantial evidence does support the determination that Plaintiff’s physical impairments do not render her disabled. View "Rucker v. Kijakazi" on Justia Law

This dispute arises out of the efforts of the federal Environmental Protection Agency (“EPA”) to designate a new waste disposal site on Long Island Sound for byproducts of local dredging activities. New York State and the Town of Southold, New York (“Southold,” and together with New York, the “Plaintiffs”) challenged the EPA’s designation of the site pursuant to the Administrative Procedure Act (“APA”), alleging a violation of the Coastal Zone Management Act (“CZMA”). They appealed a district court’s judgment granting Defendants EPA and the Connecticut Department of Energy and Environmental Protection’s cross-motions for summary judgment.   The Second Circuit affirmed, holding that contrary to Plaintiffs’ claim, the APA’s arbitrary-and-capricious standard of review applies and that under that standard, the EPA’s designation of the new disposal site passes muster under the CZMA. The court also held that Southold’s claim under the National Environmental Protection Act is not properly before the court. The court explained that New York failed to show that the EPA’s decision to impose additional restrictions on the Eastern Site undermines the agency’s efforts to achieve full consistency with the New York Program. Further, the court concluded that the EPA’s determination that its activity is fully consistent with the Southold Program is not arbitrary and capricious and that Southold’s NEPA claim is waived. View "Town of Southold, et al. v. Wheeler, et al." on Justia Law

Defendant pled guilty to one count of receipt of child pornography, in violation of 18 U.S.C. Sections 2252A(a)(2)(B), (b)(1), and 2, and one count of possession of child pornography, in violation of 18 U.S.C. Sections 2252A(a)(5)(B), (b)(2), and 2.  The district court applied sentencing enhancements under 18 U.S.C. Section 2252A(b)(1) and (b)(2), which increase the mandatory minimum sentence if the defendant has a prior conviction “under the laws of any State relating to aggravated sexual abuse, sexual abuse, or abusive sexual conduct involving a minor or ward. Defendant was previously convicted in New York for attempted sodomy in the first degree against an eight-year-old victim.   Defendant argues that the federal sentencing enhancements are inapplicable because the New York law does not qualify as a predicate offense under the modified categorical approach. Defendant further argues that the sentencing enhancements, as interpreted by the district court, are unconstitutionally vague.   The Second Circuit agreed with the district court that Defendant’s prior conviction categorically “relates to” the sexual abuse of a minor, and we conclude that the sentencing enhancements in 18 U.S.C. Section 2252A(b)(1) and (b)(2) are not unconstitutionally vague. Further, the court explained that even if Defendant’s vagueness challenge were not subject to such a high standard of review, however, it would still fail on the merits. An ordinary person could certainly understand that engaging in sexual conduct “consisting of contact between the penis and the anus, the mouth and the penis, or the mouth and the vulva” with a child under the age of eleven "relates to" the sexual abuse of a minor. View "United States v. Ragonese" on Justia Law

Defendants were charged with conspiracy to possess with intent to distribute 100 kilograms or more of marijuana. Defendants filed a joint motion to dismiss the narcotics conspiracy count on the grounds that the classification of marijuana under Schedule I of the Controlled Substances Act violates their Fifth Amendment due process and equal protection rights. They argued that marijuana's scheduling has no rational basis because it does not meet the statutory criteria for inclusion on Schedule I. The district court denied their motion to dismiss, concluding that they incorrectly sought to tether the rational basis inquiry to the statutory criteria   The Second Circuit agreed with the district court that the Act's scheduling criteria are largely irrelevant to our constitutional review because the rational basis test asks only whether Congress could have any conceivable basis for including marijuana on the strictest schedule. Because there are other plausible considerations that could have motivated Congress's scheduling of marijuana, the court concluded that its classification does not violate Defendants’ due process or equal protection rights. View "United States v. Green" on Justia Law

Defendant contends primarily that the district court erred in denying his motion pursuant to Section 3582 by refusing to consider new evidence that he says calls into question the validity of his conviction.   The Second Circuit affirmed. The court concluded that when considering a motion for a sentence reduction pursuant to 18 U.S.C. Section 3582(c)(1)(A), a district court does not have discretion to consider new evidence proffered for the purpose of attacking the validity of the underlying conviction in its balancing of the 18 U.S.C. Section 3553(a) factors. Facts and arguments that purport to undermine the validity of a federal conviction must be brought on direct appeal or pursuant to 28 U.S.C. Section 2255 or Section 2241. Here, because the district court properly refused to consider such evidence here as to the Sections 3553(a) factors and otherwise did not abuse its discretion in denying Defendant’s motion for compassionate release, the court affirmed. View "United States v. Orena" on Justia Law

Plaintiffs suing individually and on behalf of others similarly situated, appealed from an August 2020 judgment of the United States District Court for the Southern District of New York, on the ground of forum non conveniens, their amended complaint against defendants E‐Commerce China Dangdang Inc. (ʺDangdangʺ), its controlling shareholders, and others, alleging negligent misrepresentation, breach of fiduciary duty, and violations of Sections 10(b), 13(e), and 20(a) of the Securities Exchange Act of 1934 (ʺExchange Actʺ) and rules promulgated thereunder, in connection with Dangdangʹs 2016 ʺgoing‐privateʺ merger and the purchase by its controlling shareholders of its outstanding publicly‐traded shares, listed as American Depositary Shares (or ʺADSsʺ) on the New York Stock Exchange (or ʺNYSEʺ).On appeal, plaintiffs argue principally that the district court erred in concluding that the forum selection clause was not applicable to all of the defendants and to all of plaintiffsʹ claims, and in according unwarranted weight to public‐interest factors pointing toward dismissal.The Second Circuit vacated and remanded the district court’s judgment concluding that the forum selection clause was not applicable to all of defendants and to all of plaintiffsʹ claims. The court held the district court principally misinterpreted the scope of the forum selection clause. View "Fasano v. Guoqing Li" on Justia Law