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

After Phillips invoked the force majeure clause to terminate its agreement to sell a Rudolf Stingel painting on behalf of JN based on COVID-19 nonessential business restrictions, JN filed suit for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, and equitable estoppel.The Second Circuit affirmed the district court's grant of Phillips's motion to dismiss the complaint for failure to state a claim, agreeing with the district court that the pandemic constituted "a circumstance beyond the parties' reasonable control" as contemplated by their agreement, rejecting JN's arguments to the contrary. The court also rejected JN's contention that the district court erred in dismissing its claim for breach of another agreement, the Basquiat Agreement. Rather, the court concluded that the Basquiat Agreement was not integrated with the Stingel Agreement and was fully performed where JN signed the Stingel Agreement, and Phillips auctioned off the Basquiat Painting and paid the seller a guaranteed sum. Furthermore, assuming the Basquiat Agreement required Phillips to fully perform the Stingel Agreement, Phillips's proper invocation of the force majeure clause excused its performance. Finally, JN's remaining contentions regarding its implied covenant claim, bad faith claims, and breach of fiduciary duty claim are unavailing. View "JN Contemporary Art LLC v. Phillips Auctioneers LLC" on Justia Law

The Second Circuit affirmed the district court's denial of summary judgment as to absolute and qualified immunity in an action raising Fourth Amendment claims of false arrest and malicious prosecution brought pursuant to 42 U.S.C. 1983. The court agreed with the district court that absolute prosecutorial immunity did not apply to appellants' participation in obtaining the arrest warrant for plaintiff. The court explained that long-standing precedent makes clear that swearing to an arrest warrant affidavit and executing an arrest are traditional police functions, and performing such functions at the direction of a prosecutor does not transform them into prosecutorial acts protected by absolute immunity.The court also concluded that the district court correctly determined that summary judgment on the issue of qualified immunity was unwarranted given the factual disputes here. In this case, the district court identified relevant and exculpatory omissions from the arrest warrant affidavit related to plaintiff's intent and credibility that, construing the evidence in a manner most favorable to plaintiff, could have materially impacted a magistrate judge's determination as to whether probable cause existed for plaintiff's arrest, and such factual issues preclude summary judgment for appellants on the ground of qualified immunity at this stage of litigation. The court remanded for further proceedings. View "Washington v. Napolitano" on Justia Law

Plaintiffs, a putative class of fantasy sports players, filed suit alleging claims for fraudulent misrepresentations and omissions, negligent misrepresentations, violations of various state consumer protection laws, and unjust enrichment. Plaintiffs alleged that defendants fraudulently concealed that player statistics were purportedly unreliable because of rule violations in the form of electronic sign-stealing by certain MLB teams during the 2017–2019 baseball seasons. Plaintiffs further alleged that MLB intentionally took no action to address these rule violations in order to protect its financial interest and investment in DraftKings.The Second Circuit affirmed the district court's dismissal of the First Amended Complaint and its denial of plaintiffs' motion for reconsideration, holding that alleged misrepresentations or omissions by organizers and participants in major league sports about the competition itself—such as statements about performance, team strategy, or rules violations—do not give rise to plausible claims sounding in fraud or related legal theories brought by consumers of a fantasy sports competition who are utilizing a league's player statistics.The court also affirmed the district court's order, which concluded that a September 14, 2017 letter from the MLB Commissioner to the New York Yankees General Manager should be unsealed. The court concluded that the district court did not abuse its discretion in unsealing the letter in light of plaintiffs' attempted use of the letter in their proposed Second Amended Complaint and the district court's discussion of the letter in explaining its decision to deny plaintiffs' request for leave to amend in their reconsideration motion, and because MLB disclosed a substantial portion of the substance of the letter in its press release about the investigation. View "Olson v. Major League Baseball" on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiff's complaint, alleging violations of regulations promulgated pursuant to the Americans with Disabilities Act of 1990 (ADA). Plaintiff, who uses a wheelchair and is disabled, did not assert in the complaint that he visited West Point Realty's website with the intention of visiting the hotel run by West Point Realty; rather, he alleged that he frequently visits hotel websites to determine whether those websites comply with ADA regulations. The court agreed with the district court that plaintiff failed to allege a concrete injury in fact and therefore lacked standing to assert a claim under the ADA. The court also concluded that the district court did not abuse its discretion by considering only the allegations in plaintiff's complaint when deciding West Point Realty's motion to dismiss. View "Harty v. West Point Realty, Inc." on Justia Law

Plaintiff filed this federal action after a Connecticut probate court issued an order recognizing the validity of a state lien against plaintiff's interest in an estate. The district court applied the doctrine established in Younger v. Harris, 401 U.S. 37 (1971), and abstained from adjudicating plaintiff's suit because of the ongoing state probate proceedings.The Second Circuit clarified that Younger abstention applies only to a narrow class of state civil proceedings. Civil probate proceedings are no more invulnerable to federal court interference than any other state civil proceedings, unless the state order at issue protects the State's administration of its judicial system or its process for compelling compliance with the judgments of its courts. The court concluded that the district court appears to have misunderstood the narrow scope of Younger abstention to extend to state probate proceedings that concern the validity of a lien. The court considered the Commissioner's remaining arguments and found them to be without merit. Therefore, the court vacated the district court's decision and remanded for further proceedings. View "Cavanaugh v. Geballe" on Justia Law

The Second Circuit concluded that, under its precedents, there can be no doubt that a Notice to Appear that omits information regarding the time and date of the initial removal hearing is nevertheless adequate to vest jurisdiction in the Immigration Court, so long as a notice specifying this information is later sent to the alien. The court also concluded that using a false document in connection with petitioner's application for a U.S. passport, in violation of 18 U.S.C. 1001(a), requires that an offender make a material misrepresentation with the intent to impair the efficiency and lawful functioning of the government, and thus it is a crime involving moral turpitude that renders petitioner ineligible for cancellation of removal under 8 U.S.C. 1229b. Accordingly, the court denied the petition for review of the BIA's decision affirming the IJ's denial of petitioner's motion to terminate removal proceedings and his application for cancellation of removal. View "Cupete v. Garland" on Justia Law

Springfield, debtors in bankruptcy who applied for and were denied Paycheck Protection Program (PPP) funds pursuant to the CARES Act solely due to their bankruptcy status, initiated this adversary proceeding in bankruptcy court against the Administrator of the SBA, in her official capacity. Springfield challenges the SBA's administration of PPP funds and asks that the bankruptcy court enjoin the SBA from denying its PPP application on the basis of its bankruptcy status.The Second Circuit held that, based upon the plain language of Section 525(a) of the Bankruptcy Code, that the PPP is a loan guaranty program and not an "other similar grant," and Section 525(a) does not apply to the PPP. Therefore, the bankruptcy court incorrectly ruled that Springfield was entitled to summary judgment and a permanent injunction. Rather, the court concluded, as a matter of law, that summary judgment in the SBA's favor is warranted on the Section 525(a) claim, reversing the judgment and vacating the permanent injunction. The court remanded to the bankruptcy court for further proceedings. View "Springfield Hospital, Inc. v. Guzman" on Justia Law

Exxon appealed the dismissal of its complaint against the New York and Massachusetts Attorneys General, alleging that the states' investigations into Exxon's purportedly deceptive speech regarding climate change were motivated by viewpoint discrimination and violated Exxon's constitutional rights. During the pendency of this appeal, the New York Attorney General closed the New York investigation and started an enforcement action, which resolved in Exxon's favor and is not being appealed by the state.The Second Circuit concluded that these events mooted Exxon's claims against the New York Attorney General and thus the court lacked jurisdiction over those claims. In regard to claims against the Massachusetts Attorney General, the court concluded that the claims are barred under the doctrine of res judicata because Exxon could have pursued the relief it now seeks in an earlier Massachusetts state court proceeding arising from the same events that underlie the present suit. Accordingly, the court dismissed in part and affirmed in part. View "Exxon Mobil Corp. v. Healey" on Justia Law

GenSys appealed the district court's grant of summary judgment in favor of Adar Bays, the holder of a Convertible Redeemable Note securing a loan to GeneSYS. The district court held that the Note's interest rate did not violate the New York State criminal usury law, N.Y. Penal Law 190.40. The Second Circuit then certified two questions to the New York Court of Appeals, which answered as follows: (1) a stock conversion option that permits a lender, in its sole discretion, to convert any outstanding balance to shares of stock at a fixed discount should be treated as interest for the purpose of determining whether the transaction violates N.Y. Penal Law 190.40, the criminal usury law; and (2) if the interest charged on a loan is determined to be criminally usurious under N.Y. Penal Law 190.40, the contract is void ab initio pursuant to N.Y. Gen. Oblig. Law 5-511.The Second Circuit vacated the district court's order because the New York Court of Appeals stressed that the value of any individual floating-price stock conversion option is a question of fact. Accordingly, the court remanded for further proceedings. View "Adar Bays, LLC v. GeneSYS ID, Inc." on Justia Law

Objectors challenged the district court's judgment approving a class action settlement that includes Freddie Mac, with FHFA as its conservator, as a member of the plaintiff settlement class and enjoins FHFA from further pursuing Freddie Mac claims that were at issue in the action. The Second Circuit rejected FHFA's contention that the Housing and Economic Recovery Act of 2008 (HERA) deprived the district court of subject matter jurisdiction to treat FHFA or Freddie Mac as a member of the settlement class or to rule that conservatorship assets were within the scope of the settlement.However, the court concluded for other reasons that the district court's March 8, 2019 prejudgment ruling that FHFA is a member of the settlement class was erroneous. The court explained that the Settlement Class, as certified by the district court, consists of persons and entities who purchased or otherwise acquired interests in the NovaStar bonds "prior to May 21, 2008." However, because FHFA did not succeed to the interests of Freddie Mac until September 6, 2008, it acquired no interest in Freddie Mac's NovaStar bonds until that date. Therefore, FHFA is not a member of the Settlement Class and the court modified the judgment to reflect the court's ruling. View "N.J. Carpenters Health Fund v. NovaStar Mortgage, Inc." on Justia Law