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

Defendant pleaded guilty to conspiracy to commit securities fraud in violation of 18 U.S.C. 371. Defendant, as a broker-dealer in the over-the-counter securities market, executed fraudulent trades for a co-defendant client with the effect of artificially inflating the share price of a sham company, Cubed. While defendant was involved in that activity, his co-defendants arranged the sale of Cubed shares outside the public market in a private placement. The district court concluded that defendant was liable under the Mandatory Victims Restitution Act of 1996 for restitution, both to purchasers of Cubed shares in the public market (in the amount of $479,000) and to purchasers in the private placement (in the amount of $1.85 million).The Second Circuit reversed and remanded, agreeing with defendant that the Government did not show that the private placement losses are attributable to his offense of conviction, as the MVRA requires. The court explained that the MVRA authorizes restitution only for losses "directly and proximately" caused by a covered "offense" of conviction, 18 U.S.C. 3663A(a)(2), (c). This proximate cause element requires that the Government prove, by a preponderance of the evidence, that the losses for which restitution compensates were foreseeable to the defendant in the course of committing the offense of conviction. In this case, because the Government has not adduced sufficient evidence that the private placement losses were foreseeable to defendant during his participation in the conspiracy to manipulate the public share price of Cubed, the MVRA does not authorize the $1.85 million in restitution for these losses. View "United States v. Goodrich" on Justia Law

Defendant appealed his conviction and sentence on four counts of using a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. 924(c)(1)(A) and 2. After the Second Circuit vacated defendant's original 2011 sentence, the district court resentenced defendant to a mandatory minimum term of 115 years' imprisonment. On appeal, defendant argues that his section 924(c) convictions, predicated on his commission of Hobbs Act robbery and attempted Hobbs Act robbery (as well as aiding and abetting the same), are invalid in light of the Supreme Court's decision in United States v. Davis, 139 S. Ct. 2319 (2019), because the predicate offenses do not constitute crimes of violence; his revised 115-year sentence violates the Eighth Amendment's prohibition against cruel and unusual punishments following Congress's passage of the First Step Act of 2018; and, even if there is no Davis error or Eighth Amendment violation, this court should nonetheless vacate his sentence and remand for resentencing so that the district court can reconsider his sentence in view of the First Step Act.The Second Circuit reviewed all defendant's arguments on appeal and found them to be without merit. The court concluded that its decision in United States v. McCoy, 995 F.3d 32 (2d Cir. 2021), in which it held that attempted Hobbs Act robbery and aiding and abetting Hobbs Act robbery categorically qualify as crimes of violence, precludes plaintiff's Davis challenge to his section 924(c) convictions. In regard to plaintiff's remaining arguments, the court held that the passage of the First Step Act does not render his sentence cruel and unusual or otherwise warrants remand to the district court for yet another resentencing. View "United States v. Waite" on Justia Law

Picard was appointed as the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) pursuant to the Securities Investor Protection Act, 15 U.S.C. 78aaa, to recover funds for victims of Bernard Madoff’s Ponzi scheme. SIPA empowers trustees to recover property transferred by the debtor where the transfers are void or voidable under the Bankruptcy Code, 11 U.S.C. 548, 550, to the extent those provisions are consistent with SIPA. Under Sections 548 and 550, a transferee may retain transfers it took “for value” and “in good faith.” Picard sued to recover payments the defendants received either directly or indirectly from BLMIS. The district court held that a lack of good faith in a SIPA liquidation requires that the defendant-transferee has acted with “willful blindness” and that the trustee bears the burden of pleading the transferee’s lack of good faith. Relying on the district court’s legal conclusions, the bankruptcy court dismissed the actions, finding Picard did not plausibly allege the defendants were willfully blind to the fraud at BLMIS.The Second Circuit vacated. Nothing in SIPA compels departure from the well-established rule that the defendant bears the burden of pleading an affirmative defense. The district court erred by holding that the trustee bears the burden of pleading a lack of good faith under Sections 548(c) and 550(b)(1). View "In Re Bernard L. Madoff Investment Securities, LLC" on Justia Law

In 2013, Nike and its subsidiary, Converse, brought a trademark infringement action under the Lanham Act against hundreds of participants in Chinese counterfeiting networks. The district court entered five prejudgment orders, a default judgment, and one postjudgment order against defendants, who never appeared in court. Each order enjoined defendants and all persons acting in concert or in participation with any of them from transferring, withdrawing or disposing of any money or other assets into or out of defendants' accounts regardless of whether such money or assets are held in the U.S. or abroad. In 2019, Nike's successor-in-interest, Next, moved to hold appellees—six nonparty Chinese banks—in contempt for failure to implement the asset restraints and for failure to produce certain documents sought in discovery.The Second Circuit affirmed the district court's judgment, holding that the district court did not abuse its discretion in denying Next's motion for contempt sanctions against the Banks because (1) until the contempt motion, Nike and Next never sought to enforce the asset restraints against the Banks; (2) there is a fair ground of doubt as to whether, in light of New York's separate entity rule and principles of international comity, the orders could reach assets held at foreign bank branches; (3) there is a fair ground of doubt as to whether the Banks' activities amounted to "active concert or participation" in defendants' violation of the asset restraints that could be enjoined under Federal Rule of Civil Procedure 65(d); and (4) Next failed to provide clear and convincing proof of a discovery violation. View "Next Investments, LLC v. Bank of China" on Justia Law

Plaintiff appeals the district court's judgment challenging the dismissal of his claims under 42 U.S.C. 1983 for false arrest, malicious prosecution, and the denial of the right to a fair trial against Defendants New York City Police Department Detective Rudy Anzalone and Lieutenant John Ryan, as well as his state law malicious prosecution claims against the City of New York, Detective Anzalone, and Lieutenant Ryan. Plaintiff's claims stemmed from his arrest for violations of state drug laws and the subsequent dismissal of his charges based on speedy trial grounds.The Second Circuit concluded that the district court properly granted summary judgment on plaintiff's false arrest claim because probable cause existed for his arrest on the charge of loitering for the purpose of gambling. In regard to the federal malicious prosecution claim, the court held that the district court erred in concluding that the dismissal of plaintiff's underlying narcotics charges on speedy trial grounds could not satisfy the "favorable termination" element for that claim. The court also found that the record evidence raises disputed issues of material fact that preclude summary judgment on the issue of probable cause for the federal and state malicious prosecution claims, and that the district court's dismissal of these claims on summary judgment against the City and Detective Anzalone was unwarranted. Likewise, the court concluded that there was sufficient evidence to overcome summary judgment on the fair trial claim based upon allegedly fabricated evidence conveyed to the prosecutors. Accordingly, the court vacated the dismissal of the malicious prosecution claims against Detective Anzalone and the City and the fair trial claim against Detective Anzalone and Lieutenant Ryan; affirmed the district court's grant of summary judgment in all other respects; and remanded for further proceedings. View "Kee v. City of New York" on Justia Law

Plaintiff filed suit in the New York Supreme Court pursuant to New York Civil Practice Law and Rule 7515 (C.P.L.R. 7515), challenging arbitration of her sexual harassment, hostile work environment, and retaliation claims against Fox News and certain senior executives. C.P.L.R. 7515 prohibits mandatory arbitration clauses covering employment discrimination claims, "[e]xcept where inconsistent with federal law." After removal to federal court, the district court denied plaintiff's motion to remand to state court on the basis that the action necessarily raises an issue of federal law: whether her claim is preempted by the Federal Arbitration Act (FAA).The Second Circuit affirmed the district court's denial of plaintiff's motion, concluding that plaintiff's suit arises under federal law. The court applied the Grable-Gunn analysis and concluded that because section 7515 requires a threshold showing that the plaintiff's claim complies with the FAA, it necessarily raises a substantial federal issue that may be resolved in federal court without threatening the federal-state balance. View "Tantaros v. Fox News Network, LLC" on Justia Law

Plaintiffs Horn and Jackson filed civil rights actions against the City of New Haven and law enforcement officials under 42 U.S.C. 1983. Plaintiffs each served more than 17 years in prison for a robbery and murder that they did not commit. Plaintiffs alleged that a police forensic examiner violated their due process rights under the Fourteenth Amendment by withholding exculpatory ballistics reports in contravention of Brady v. Maryland.The Second Circuit affirmed the district court's denial of the examiner's motion to dismiss both actions, concluding that he cannot make out a defense of either qualified immunity or absolute immunity. In this case, the examiner is not entitled to qualified immunity where it was clearly established that a police forensic examiner, whether an analyst or technician fulfilling any of the roles associated with forensic analysis, in 1999 reasonably would have understood that he or she was required to turn over exculpatory information to the prosecutor. Furthermore, the examiner is not entitled to absolute immunity where, even if the court concluded that adjusting the margin of error in a General Rifling Characteristics (GRC) Report constituted prosecutorial advocacy, the complaint nowhere alleges that the examiner was asked or instructed to create a new GRC Report using a larger margin of error. View "Horn v. Stephenson" on Justia Law

Petitioners appeal the district court's order denying their petition to set aside an arbitral award issued by an ad hoc arbitral tribunal constituted under a bilateral investment treaty between Mongolia and the People's Republic of China, and granting Mongolia's cross-petition to confirm the award. Petitioners also challenge the district court's rejection of their petition to compel arbitration on the merits.The Second Circuit affirmed the district court's judgment, rejecting the appeal and holding that petitioners were not entitled to de novo review of the arbitrability of their investment claims. While the bilateral investment treaty in this case does not contain a clear statement empowering arbitrators to decide issues of arbitrability, the court held that the parties nonetheless clearly and unmistakably agreed to submit questions of arbitrability to the arbitral tribunal in the course of the dispute between them. Therefore, the court concluded that the district court properly declined to determine independently the arbitrability of petitioners' investment claims; in reaching their decision on arbitrability, the arbitrators did not exceed their powers; and the court agreed with the district court's decision to confirm the award. View "Beijing Shougang Mining Investment Co., Ltd. v. Mongolia" on Justia Law

Shareholders of Goldman filed a class action alleging that Goldman and several of its executives committed securities fraud by misrepresenting Goldman's freedom from, or ability to combat, conflicts of interest in its business practices. The district court certified a shareholder class, but the Second Circuit vacated the order in 2018. On remand, the district court certified the class once more. The Second Circuit affirmed and then the Supreme Court vacated and remanded because it was uncertain that the court properly considered the generic nature of Goldman's alleged misrepresentations in reviewing the district court's decision.The Second Circuit vacated the class certification order and remanded for further proceedings because it is unclear whether the district court considered the generic nature of Goldman's alleged misrepresentations in its evaluation of the evidence relevant to price impact and in light of the Supreme Court's clarifications of the legal standard. View "Arkansas Teacher Retirement System v. Goldman Sachs Group, Inc." on Justia Law

The Second Circuit affirmed the district court's denial of plaintiff's motion for a preliminary injunction against defendants for alleged violations of the federal Freedom of Access to Clinic Entrances Act (FACE), the New York State Clinic Access Act (State Act), and the New York City Access to Reproductive Health Care Facilities Act (City Act).The court held that the district court did not abuse its considerable discretion in denying a preliminary injunction. At this stage and as to the violations the district court found, the district court concluded that the Attorney General had not demonstrated irreparable harm. In this case, many of the issues are close ones and the court cannot say that the district court abused its considerable discretion in denying a preliminary injunction. Because the court did not disrupt the district court's determination that a preliminary injunction should not issue at this time, the court did not reach defendants' cross-appeal challenging the Attorney General's standing under the City Act or their constitutional challenges to FACE, the State Act, and the City Act. View "New York ex rel. James v. Griepp" on Justia Law