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

Plaintiffs filed suit for fraud, rescission, conspiracy, aiding and abetting, fraudulent conveyance, and unjust enrichment alleging that defendants had misrepresented that collateral managers would exercise independence in selecting assets for collateralized debt obligations (CDOs). The district court granted summary judgment in favor of defendants.The Second Circuit affirmed and held that plaintiffs have failed to establish, by clear and convincing evidence, reliance on defendants' representations. In this case, plaintiffs based their investment decisions solely on the investment proposals their investment advisor developed; the advisor developed these detailed investment proposals based on offering materials defendants provided and on the advisor's own due diligence; plaintiffs premised their fraud claims on the advisor's reliance on defendants' representations; but New York law does not support this theory of third-party representations. The court also held that plaintiffs have failed to establish that defendants misrepresented or omitted material information for two of the three CDO deals at issue—the Octans II CDO and the Sagittarius CDO I. The court explained that defendants' representations that the collateral managers would exercise independence in selecting assets were not misrepresentations at all, and defendants did not have a duty to disclose their knowledge of the hedge fund's investment strategy because this information could have been discovered through the exercise of due care. View "Loreley Financing (Jersey) No. 3 Ltd. v. Wells Fargo" on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiff's claims as time-barred under the two year statute of limitations set forth in the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention), and denial of plaintiff's motion to amend the complaint. Plaintiff filed suit against American and others, alleging that, while boarding a flight from Paris, France, to Dallas, Texas, on December 28, 2015, a flight attendant struck him, causing injury.The court concluded that, because plaintiff alleged that he was injured while boarding an international flight, his claims fall under the Montreal Convention, a multilateral treaty that "applies to all international carriage of persons, baggage or cargo performed by aircraft." Furthermore, the district court did not abuse its discretion in denying leave to amend. The court considered plaintiff's remaining arguments and found them to be without merit. View "Cohen v. American Airlines, Inc." on Justia Law

Plaintiffs filed a class action on behalf of Connecticut-based franchisees, in which they allege that their franchise agreement misclassifies franchisees as independent contractors rather than employees. Plaintiffs claim that the collection of franchise fees violates the Connecticut Minimum Wage Act, Conn. Gen. Stat. 31-71e, and the Connecticut anti-kickback statute, Conn. Gen. Stat. 31-73.The Second Circuit affirmed the district court's dismissal of the Connecticut Minimum Wage Act claim and grant of summary judgment on the anti-kickback claim. The court concluded that the district court correctly applied the principles set forth by the Connecticut Supreme Court in Geysen v. Securitas Sec. Servs. USA, Inc., 142 A.3d 227, 234 (Conn. 2016), and Mytych v. May Dep't Stores Co., 793 A.2d 1068, 1072 (Conn. 2002), in concluding that plaintiffs failed to state a claim under the Connecticut Minimum Wage Act. The court explained that, even if plaintiffs should have been classified as employees under Connecticut law, Mytych forecloses their section 31-71e claim. Likewise, the district court properly granted summary judgment to Jani-King on plaintiffs' unjust enrichment claim. Finally, the court denied plaintiffs' motion to certify proposed questions of law to the Connecticut Supreme Court. View "Mujo v. Jani-King International, Inc." on Justia Law

The Second Circuit affirmed defendant's conviction and sentence for knowingly and intentionally possessing with intent to distribute controlled substances in violation of 21 U.S.C. 841(a)(1). The court held that the district court did not err in denying defendant's motion to suppress where the warrantless dog sniff was not a search within the meaning of the Fourth Amendment. The court also held that there was sufficient evidence to establish defendant's knowing possession of the cocaine, and the district court was not required to hold an evidentiary hearing to address his claim that police investigators knowingly misled a New York court in an application for a search warrant. Furthermore, the district court did not err in calculating defendant's Guidelines Sentencing Range. The court considered defendant's remaining arguments and found them to be without merit. View "United States v. McKenzie" on Justia Law

Cabrera engaged in four drug transactions with his barber. Cabrera’s sole defense was entrapment. Cabrera and his barber gave opposite accounts of who first proposed partnering in the drug trade. The barber was receiving deferrals of removal while serving as a paid DEA informant. Special Agent Son, who had surveilled Cabrera at two deals, also testified, stating that Cabrera, unlike the “average drug dealer,” appeared to be “experienced” because he had employed counter-surveillance driving techniques (which consisted of really bad driving).The Second Circuit vacated Cabrera’s convictions and remanded for a new trial. Because of the differing versions of who initiated the drug transactions, it was crucial that the charge accurately state Cabrera’s burden: the slight burden of adducing “some credible” evidence that the government initiated the crime. The charge overstated that burden, effectively requiring that the jury weigh the evidence and definitively accept Cabrera’s account as a precondition to considering predisposition. Compounding the prejudice to Cabrera’s defense, the special agent’s testimony that Cabrera was an “experienced” drug dealer was inadmissible as lay opinion and undercut Cabrera’s account of how the transactions with his barber originated, as well as his lack of predisposition to deal. View "United States v. Cabrera" on Justia Law

Percoco, a longtime friend and top aide to former Governor Andrew Cuomo, accepted payment in exchange for promising to use his position to perform official actions. For one scheme, Percoco promised to further the interests of an energy company, CPV; for another, Percoco agreed with Aiello to advance the interests of Aiello’s real estate development company. Aiello was convicted of conspiracy to commit honest services wire fraud, 18 U.S.C. 1349. Percoco was convicted of both conspiracy to commit honest-services wire fraud and solicitation of bribes or gratuities, 18 U.S.C. 666(a)(1)(B). The court had instructed the jury that the quid-pro-quo element of the offenses would be satisfied if Percoco wrongfully “obtained . . . property . . . in exchange [for] official acts as the opportunities arose.”The Second Circuit affirmed. Although the as-opportunities-arise instruction fell short of a recently clarified standard, which requires that the honest-services fraud involve a commitment to take official action on a particular matter or question, that error was harmless. A person who is not technically employed by the government may nevertheless owe a fiduciary duty to the public if he dominates and controls governmental business, and is actually relied on by people in the government because of some special relationship. View "United States v. Percoco" on Justia Law

In 2012, then-Governor Cuomo launched the "Buffalo Billion” initiative to develop the greater Buffalo area through the investment of $1 billion in taxpayer funds. A big-rigging scheme ensued with respect to state-funded projects. Four defendants were convicted of various counts of conspiracy to engage in wire fraud, 18 U.S.C. 1349, wire fraud, 18 U.S.C. 1343, and making false statements to federal officers, 18 U.S.C. 1001(a)(2).The Second Circuit affirmed, rejecting challenges to the sufficiency of the evidence with respect to the charged wire fraud conspiracies, the instructions to the jury regarding the right-to-control theory of wire fraud and the good faith defense, the preclusion of evidence regarding the success of the projects awarded to defendants through the rigged bidding system and the admission of evidence from competitors regarding the range of fees typically charged by other companies in the market, and the district court's denial of a motion to dismiss Gerardi's false statement charge for alleged prosecutorial misconduct. Evidence of actual economic harm is not necessary for conviction in "right-to-control" cases, which require "a showing that the defendant, through the withholding or inaccurate reporting of information that could impact on economic decisions, deprived some person or entity of potentially valuable economic information." View "United States v. Percoco et al." on Justia Law

In 2006, petitioner was convicted under New York's child endangerment statute, N.Y. Penal Law 260.10(1). In 2017, the United States initiated removal proceedings against him, citing as a ground of removal defendant's conviction of a crime of child abuse, child neglect, or child abandonment pursuant to 8 U.S.C. 1227(a)(2)(E)(i). In 2010, the BIA held that this provision included convictions under child-endangerment statutes for which "actual harm" is not an element of the crime.The Second Circuit held that the holding in Matter of Soram, 25 I. & N. Dec. 378, 381 (B.I.A. 2010), applies retroactively, rendering petitioner removable. The court also held that it lacked jurisdiction to review the denial of petitioner's cancellation of removal because the agency retains discretion to weigh the probative value of uncorroborated arrest reports. Accordingly, the court denied in part and dismissed in part. View "Marquez v. Garland" on Justia Law

Property owners in the Town of East Hampton appeal from two separate decisions of the district court concerning their claims that the jetties abutting Lake Montauk Harbor have caused significant erosion on their properties. First, the district court dismissed plaintiffs' Federal Tort Claims Act (FTCA) claims against the Untied States for lack of subject matter jurisdiction on sovereign immunity grounds, citing the FTCA's discretionary function exception. Second, the district court granted judgment as a matter of law to the Town on plaintiff's state-law private nuisance and trespass claims.The Second Circuit affirmed the district court's judgment in both decisions, concluding that the district court correctly concluded that plaintiffs' claims against the United States are barred by sovereign immunity. In this case, neither the FCSA nor the 3x3x3 Paradigm prescribes a specific course of action abridging the USACE's broad discretion in carrying out the LMH Study, and that study and the Lake Montauk Harbor FNP are clearly susceptible to policy analysis. The court also held that, under New York law, the Town's ownership of the land beneath the jetties, standing alone, did not give rise to a duty to mitigate any erosion caused by the jetties. The court concluded that the district court had subject matter jurisdiction over plaintiffs' state-law claims; the district court properly granted the Town's renewed motion for judgment as a matter of law; and the law of the case doctrine did not compel denial of the Town's motion for judgment as a matter of law. View "Cangemi v. United States" on Justia Law

The Second Circuit denied petitions for review of the EPA's final rule restricting access by consumers to methylene chloride, a dangerous chemical used in paint removal products. Petitioners contend that the Toxic Substances Control Act required the EPA to regulate commercial uses of methylene chloride as well as consumer uses. The court held that HSIA's challenge to the final rule fails because the final rule was supported by substantial evidence. In this case, EPA's implementation of a retailer distribution ban was a reasonable means to achieve its required goal of ensuring that the risks posed by consumer uses of methylene chloride were no longer presented. The court also concluded that the environmental petitioners' challenge is prudentially unripe for review at this time. View "Labor Council for Latin American Advancement v. Environmental Protection Agency" on Justia Law