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

Plaintiff appealed the dismissal of his direct suit against Defendant Brightstar Asia, Ltd. In connection with the sale of his company, Harvestar, to Brightstar Asia, Plaintiff entered into a contract with Brightstar Asia, Harvestar, and his co-founder. The contract provided that conflicted transactions between Brightstar Asia and Harvestar must be on “terms no less favorable to” Harvestar than those of an arms-length transaction. Plaintiff alleged in his complaint that Brightstar Asia engaged in conflicted transactions that rendered his options rights worthless. Those actions, according to Plaintiff, breached both the express terms of the contract and the implied covenant of good faith and fair dealing. The district court dismissed his complaint for raising claims that could be brought only in a derivative suit.   The Second Circuit agreed that Plaintiff can bring a claim for breach of the express conflicted-transactions provision only in a derivative suit. However, the court held that Plaintiff may bring a direct suit for breach of the covenant of good faith and fair dealing because that covenant is based on his individual options rights. Accordingly, the court affirmed in part and vacated in part the district court’s judgment.   The court explained that the inquiry into whether a claim is direct, and a plaintiff, therefore, has “standing” to bring it, is not an Article III standing inquiry Even if the district court were right that Plaintiff’s claims had to be brought in a derivative suit, it should have dismissed the complaint for failure to state a claim. View "Miller v. Brightstar Asia, Ltd." on Justia Law

Petitioner appealed from a district court judgment denying his petition for writ of habeas corpus in connection with an extradition proceeding. Petitioner argued that the text of the relevant extradition treaty and its legislative history indicate that whether extradition is time-barred is a question for the extradition court, which cannot issue a certificate of extraditability if extradition is so barred.   The Second Circuit affirmed, concluding that the most natural reading of the relevant extradition treaty’s text is that the issue of timeliness is a matter for the relevant executive authority to decide in its discretion, not a question for the extradition court to decide as a matter of law. The court explained that based on the customary meaning of the word “may” and its particular use in Article 6 of the Treaty; the Senate Report’s Technical Analysis, the most authoritative item of legislative history cited by either party to this case; and the government’s consistent position as to the meaning of the provision, the court held that the plain meaning of the word “may” in that provision is discretionary, and not mandatory, in nature.   The court further explained that because Article 6‘s Lapse of Time provision is discretionary, the decision whether to deny extradition on the basis that the Requested State’s relevant statute of limitations would have barred prosecution had the relevant offense been committed within that State’s jurisdiction is a decision consigned to that State’s relevant executive authority, and is not a mandatory determination to be made by a federal court before issuing a certificate of extraditability. View "Yoo v. United States" on Justia Law

Plaintiff appealed from a district court’s order awarding him attorney’s fees under 42 U.S.C. Section 1988 in an amount substantially less than he sought. After Plaintiff prevailed against the City of New York on the merits of his due process claim under 42 U.S.C. Section 1983, the district court, adopting the report and recommendation of the magistrate judge, lowered the attorney’s claimed hourly rate, excluded time spent on a related concurrent administrative proceeding, struck certain billing entries and imposed a 40% across-the-board reduction to the fee request.   Plaintiff challenged primarily the across-the-board reduction and the exclusion of time-related to the administrative proceeding. The Second Circuit vacated the district court’s order, explaining that while it identified no error in the district court’s decision to exclude all hours related to that proceeding, the court found that the 40% blanket reduction was not justified on the record. The court explained that it agrees with Plaintiff that the 40% overall reduction applied by the district court was not justified: the district court was able to (and in fact did) examine the block-billed entries for reasonableness, and Plaintiff’s counsel obtained a strongly favorable result for him overall, prevailing on claims that rested on the same core set of facts as did the claims that the court dismissed. However, the court identified no error in the district court’s decision to exclude from the fee calculation the hours that Plaintiff’s counsel devoted to defending him in the OATH proceeding because Plaintiff has not shown that this work was necessary to the result achieved in the federal court. View "Raja v. Burns" on Justia Law

Defendant was indicted for knowingly producing child pornography in violation of federal law. He moved to suppress evidence gathered from his electronic devices, arguing that the government’s search warrants lacked probable cause and therefore violated his Fourth Amendment rights. The district court denied the motion. Defendant then pleaded guilty but reserved the right to appeal the district court’s decision on his motion to suppress.   The Second Circuit affirmed the district court’s judgment explained that it disagrees with the district court that Defendant’s prior guilty plea to an earlier charge in Tennessee state court precludes him from challenging the search warrants in this case. But the court agreed that even assuming arguendo that the warrants are defective, the good-faith exception to the exclusionary rule applies.   The court explained that there was at least arguable probable cause for the Tennessee Warrants, therefore, the Detective acted based on an “‘objectively reasonable good-faith belief’ that [his] conduct [was] lawful.” The court further wrote that the affidavits at issue here are not so devoid of factual support because they detail allegations from State Victim 1’s mother that support the common-sense inference that her daughter told her that Defendant took nude photographs of her. View "United States v. Jones" on Justia Law

Plaintiffs are several parents suing on behalf of themselves and their children, whose requests for medical exemptions from the school immunization requirements were largely denied. They brought this action below against Defendants, the New York State Department of Health (the "Health Department"), Health Department officials, local school districts, and local school district officials (collectively, "Defendants"), alleging that the new regulations and the enforcement thereof violated their rights under the Due Process Clause of the Fourteenth Amendment and Section 504 of the Rehabilitation Act, 29 U.S.C. Section 794 (the "Rehabilitation Act"). The district court granted Defendants' motions to dismiss for failure to state a claim.   The Second Circuit affirmed the district court’s judgment. The court first concluded, as a procedural matter, that the district court properly applied the motion to dismiss standards. The court then concluded, as a substantive matter, that neither the new regulations nor the enforcement thereof violated the Due Process Clause or the Rehabilitation Act. The court explained that the new regulations do not implicate a fundamental right and that therefore strict scrutiny does not apply. The court further found that there is a reasonable relationship between the delegation of authority to school districts to review and approve medical exemption requests and protecting communities from serious diseases. Finally, the court concluded that Plaintiffs fail to plausibly allege that they were excluded from school "solely by reason of" their disabilities. View "Goe v. Zucker" on Justia Law

Appellant appealed from a judgment of the district court affirming an order of the bankruptcy court denying the Appellant’s statutory discharge under 11 U.S.C. Section 727(a)(2). Appellant argued that the bankruptcy court erred by finding that he had an interest in Soroban, Inc., that was concealed to hinder creditors, and, in the alternative, that denying discharge was improper because the concealment began prior to the statutory one-year period set forth in Section 727(a)(2)(A).   The Second Circuit affirmed, holding that the bankruptcy court did not err in finding that Appellant had a valid interest in Soroban that was concealed to hinder creditors, and properly denied the discharge because the acts of concealment continued throughout the one-year period prior to his filing the bankruptcy petition. The court explained that the record evidence fully supports the bankruptcy court’s findings that Appellant concealed his interest in Soroban, and that the concealment was done with an intent to hinder his creditors. View "Gasson v. Premier Capital, LLC" on Justia Law

International Code Council, Inc. ("ICC"), a nonprofit organization that develops model building codes and standards, sued a for-profit competitor, UpCodes, Inc., for false advertising and false statements in violation of the Lanham Act, 15 U.S.C. Section 1125(a), New York General Business Law Sections 349 and 350-a, and New York's common law of unfair competition. ICC alleges that UpCodes falsely asserted that its codes were always up to date, that its codes integrated all amendments enacted by local jurisdictions, and that it was the sole provider of such integrated amendments.   The district court sua sponte and without notice converted the parties' pre-motion letters into a motion to dismiss and a response, and then granted that motion. On appeal, the Second Circuit concluded that the district court erred by failing to provide ICC with notice and an opportunity to fully defend the sufficiency of its complaint. However, because the parties have fully briefed the legal issues presented on appeal and we review a dismissal for failure to state a claim de novo, we reach the merits and reverse on nearly all grounds. The court concluded that the ICC sufficiently alleged the materiality of the challenged statements. Thus, the court affirmed the district court's decision only to the extent that it dismissed claims premised on UpCodes's promises that its customers would glean a "complete understanding" of relevant code, but we affirm that narrow dismissal on different grounds. View "Int'l Code Council v. UpCodes" on Justia Law

Petitioner a native and citizen of South Korea, sought review of a Board of Immigration Appeals  (BIA) decision affirming an Immigration Judge’s denial of Petitioner’s application for cancellation of removal. The BIA found Jang ineligible for cancellation because of her state conviction for attempted second-degree money laundering which it deemed a “crime involving moral turpitude” (“CIMT”) under the Immigration and Nationality Act.   The Second Circuit granted Petitioner’s petition for review and remanded the case to the agency for further consideration. The court held that Petitioner’s offense of conviction lacks the scienter required to qualify as a CIMT. The court explained that the BIA’s reliance on Section 470.10(1) to determine that Petitioner’s crime was a CIMT was indisputably misplaced, either as a reference to the Tejwani provision that had been superseded by Section 470.15(1)(b)(ii)(A) before Petitioner’s offense conduct or as a reference to the current Section 470.10(1), which defines money laundering in the third, not second, degree. Further, the knowledge required for conviction under Section 470.15(1)(b)(ii)(A) falls well short of the depravity described by the BIA as requisite for a CIMT. The BIA, therefore, erred in treating Petitioner’s conviction for attempted money laundering in the second degree as a CIMT and on that basis denying her application for cancellation of removal. View "Jang v. Garland" on Justia Law

Plaintiffs appealed a district court judgment dismissing their action against Defendants-Appellees BLC Bank, S.A.L. (“BLC”), Credit Libanais, S.A.L. (“CL”), AlMawarid Bank, S.A.L. (“AM”), and Banque du Liban (“BDL”) for want of subject-matter jurisdiction, for want of personal jurisdiction, and for forum non conveniens based on binding forum selection clauses in agreements Plaintiffs entered into with AM and BLC. Plaintiffs alleged that Defendants- (together, “the Banks”) engaged in a scheme to cheat them out of millions of U.S. dollars (“USD”) by inducing them to deposit those dollars in Lebanese bank accounts with the promise that they would be able to withdraw that money in the United States, only to renege on that promise and keep the money trapped in Lebanon. The district court dismissed the claims against AM and BLC because the Daous’ agreements with those banks included valid, enforceable forum selection clauses specifying Beirut as the proper forum; those against CL because it lacked personal jurisdiction over that bank, and those against BDL because that bank is an agency or instrumentality of the Lebanese state and no exception applied under the Foreign Sovereign Immunities Act (“FSIA”).   The Second Circuit held that the district court lacked personal jurisdiction over AM, BLC, and CL (together, “the Commercial Banks”) under the relevant provision of New York’s long-arm statute, N.Y. C.P.L.R. Section 302(a)(1), because there was insufficient connection between Plaintiffs’ claims against the Commercial Banks and those banks’ business transactions in New York. The court further held that BDL, an agency or instrumentality of a foreign sovereign is entitled to sovereign immunity. View "Daou v. BLC Bank, S.A.L." on Justia Law

Defendant appealed his conviction following a jury trial in district court in which he was found guilty of racketeering, murder in aid of racketeering, various narcotics offenses, interstate prostitution, and sex trafficking of minors. On appeal, Defendant argued that the district court erred by permitting him to represent himself without a psychiatric evaluation.   The Second Circuit affirmed the judgment holding that while the district court has the discretion to conduct an inquiry into a defendant’s mental competence before granting a motion to proceed pro se, the court is not required to order psychiatric testing and did not err in granting Defendant’s motion. The court explained that where a defendant has been found competent to stand trial Edwards does not require a court to conduct a further competency hearing or order psychiatric evaluations before permitting a defendant to proceed pro se. (Indiana v. Edwards, 554 U.S. 164 (2008).) Further, on the current facts, the court could not say that the district court abused its discretion in failing to sua sponte order a psychiatric evaluation prior to determining that Defendant “knowingly and intelligently” waived his right to counsel. View "United States v. Rivera" on Justia Law