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September 20, 2017
  Elias et al. v. Rolling Stone, LLC et al. - Second Circuit
Headline: Second Circuit Permits Former University of Virginia Students to Proceed with a Defamation Lawsuit Against Rolling Stone

Area of Law: Defamation.

Issue(s) Presented: Whether Plaintiffs, three former University of Virginia Phi Kappa Psi fraternity members, sufficiently pled that a Rolling Stone article, subsequently retracted as fabricated by the source, about an alleged brutal gang rape at the fraternity house, stated actionable defamation claims brought individually and under a small group theory.

Brief Summary: Elias, Fowler, and Hadford, three former male University of Virginia's Phi Kappa Psi's fraternity members, commenced a lawsuit against Rolling Stone magazine claiming defamation for statements made in an article and during an interview with Erdely, the article's author, about an alleged brutal gang rape at the fraternity house. Reversing in part, the Second Circuit held that the United States District Court for the Southern District of New York erred in dismissing Elias and Fowler's individual claims and the small group defamation claim.

The link to the full opinion will be added when the opinion is reposted on the Second Circuit's website.

Extended Summary: George Elias IV, Ross Fowler, and Stephen Hadford (Plaintiffs) were active members of the University of Virginia's Phi Kappa Psi fraternity in the fall of 2012. In November, 2014, Rolling Stone magazine published an online article authored by Sabrina Rubin Erdely and titled, "A Rape on Campus: A Brutal Assault and Struggle for Justice at UVA." Generating worldwide headlines, it recounted a brutal three-hour gang rape in the fall of 2012 of "Jackie," a woman whose interview was the primary source for the article. As a follow-up to the published piece, Erdely was interviewed as a guest on a podcast about the story. Weeks later, after it learned that the story was fabricated, Rolling Stone retracted the article and issued an apology.

Reviewing the United States District Court for the Southern District of New York's decision to dismiss Plaintiffs' complaint in its entirety, the Second Circuit reversed the holding in part, concluding that the District Court improperly rejected Plaintiffs' small group defamation claim and. although it was a close call, also erred in dismissing individual claims relating to Elias and Fowler.

To state a claim for defamation in New York, a complaint must allege a false statement that is published to a third party without privilege or authorization, and, in most cases, that causes harm. To succeed, a plaintiff must allege that the public acquainted with the party and the subject would recognize the plaintiff as a person to whom the statement refers. The Court held that based on the fact that Elias graduated the same year as the alleged perpetrators, lived in the fraternity house in the only bedroom that could fit the description of the alleged location of the rape, and some people who knew him concluded he was one of the alleged attackers, Elias sufficiently pled that the article was "of and concerning" him. The Court reached the same conclusion with Fowler's claim. The court agreed with the district court that Hadford's allegation - that because he rode his bike through campus regularly, readers would conclude that he was the person Jackie said she saw riding a bike in the article- was too speculative to support a defamation claim as to him individually.

Finding that a reader of the article could conclude that all Phi Kappa Psi members were implicated in the alleged rapes, the Court, reversing the district court, also held that Plaintiffs could proceed under a theory of small group defamation. Relying on Brady v. Ottaway Newspapers, Inc., a New York Appellate Division, Second Department case, the Second Circuit considered the small size of Phi Kappa Psi, the fact that the allegations taken as a whole could support the conclusion that many or all fraternity members participated in alleged gang rape and all members turned a blind eye to the crimes, and the prominence of the fraternity on the University's close-knit campus, to conclude that Plaintiffs plausibly alleged the article was "of and concerning" all then-members of the fraternity. Lastly, the court upheld the district court's dismissal of claims based upon Erdely's podcast statements because statements that express opinions of the speaker do not constitute defamation and Erdely's statements on the podcast were speculative.

In a separate opinion, Circuit Judge Lohier concurred with the majority's ruling on the individual claims but disagreed with the application of Brady to the small group claim. Contending that Brady is both factually inapposite to the present case and the only New York Appellate Division opinion to evaluate how to analyze small group defamation claims, Judge Lohier argued that the court should certify a question to the New York Court of Appeals asking that it clarify the standard for small group defamation claims or, in the alternative affirm dismissal of claims under that theory.

Panel: Circuit Judges Cabranes and Lohier; District Judge Forrest

Argument Date: 04/27/2017

Date of Issued Opinion: 09/19/2017

Docket Number: No. 16-2465-cv

Decided:
Affirmed in Part and Reversed in Part

Case Alert Author:
Joanna Kusio

Counsel: Alan Lee Frank, Alan L. Frank Law Associates, P.C. for Plaintiffs‐Appellants; Elizabeth A. McNamara (Samuel M. Bayard, Abigail B. Everdell, Davis Wright Tremaine LLP; Alison Schary, Davis Wright Tremaine LLP, on the brief), Davis Wright Tremaine LLP for Defendants‐Appellees.

Author of Opinion: District Judge Forrest (majority); Circuit Judge Lohier (concurring in part and dissenting in part)

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 09/20/2017 11:22 AM     2nd Circuit     Comments (0)  

September 12, 2017
  United States v. Jones
Case Name: United States v. Jones

Headline: Second Circuit Holds That New York First-Degree Robbery is Categorically a Crime of Violence Under the Career Offender Guideline

Area of Law: Criminal

Issue(s) Presented: Whether New York first-degree robbery categorically qualifies as a crime of violence under the residual clause of the Career Offender Guideline, in light of the Supreme Court's recent decision in Beckles v. United States.

Brief Summary: While serving a 92-month federal sentence in a halfway house, Corey Jones had an altercation with two Deputy U.S. Marshals. He was ultimately convicted of assaulting a federal officer. Because of this conviction and his previous record (which included a conviction for New York first-degree robbery), Jones satisfied the elements of the Career Offender Guideline, which provides longer sentences for career offenders. He was sentenced to fifteen years' imprisonment. Jones appealed, and the Second Circuit initially ruled in his favor, largely based on the argument that the residual clause of the Career Offender Guideline - which provides that a crime of violence includes any offense that "involves conduct that presents a serious potential risk of physical injury to another" - was void for vagueness. Shortly thereafter, however, the Second Circuit vacated its holding to await the Supreme Court's decision in Beckles v. United States, where the Court would address whether the residual clause was unconstitutionally vague. In Beckles, the Supreme Court held that the residual clause of the Career Offender Guideline is constitutional. The Second Circuit then concluded that New York first-degree robbery categorically qualifies as a crime of violence under the residual clause, and affirmed Jones' sentence.

Extended Summary: The Career Offender Guideline ("Guideline") is an enhanced sentencing standard used when defendants in federal court satisfy certain enumerated criteria. A defendant is a career offender if he is at least eighteen years old when he committed the current offense for which he was convicted, the current offense is a felony that is a "crime of violence," and he has at least two prior felony convictions of "crimes of violence." In this context, a "crime of violence" is a legal term that may be satisfied by two different definitions within the Guidelines. At issue in this case is the second definition, which lists specific offenses that apply as crimes of violence and ends with the "residual clause," which incorporates into the second definition any offense that "otherwise involves conduct that presents a serious potential risk of physical injury to another." Recently, the United States Supreme Court has decided two cases that analyze residual clauses. The first, Johnson v. United States, involved the residual clause of the Armed Career Criminal Act, which is nearly identical to the residual clause in the Guideline. In Johnson, the Supreme Court determined that the residual clause was void for vagueness. Following oral argument in the Jones case, however, the Supreme Court determined in Beckles v. United States that the residual clause in the Guideline is not void for vagueness.

In 2013, Jones was completing a federal sentence for unlawful gun possession in a halfway house. He verbally threatened a staff member, which violates the rules of the halfway house, and was remanded to custody of the Bureau of Prisons. Two U.S. Marshals arrived to arrest Jones and bring him into custody, but Jones assaulted one of the Marshals during the arrest, which violated a federal statute. In the District Court for the Eastern District of New York, a jury convicted Jones of assaulting a federal officer. The District Court determined that this conviction satisfied the requirements of the Guidelines because a first-degree robbery is a crime of violence under the residual clause. Under the Guideline, the District Judge sentenced Jones to 180 months in prison to be followed by three years of supervised release. Jones appealed, relying on the Johnson holding to argue that the residual clause in the Guideline should be void for vagueness. The Second Circuit initially agreed and reversed the District Court's conviction. However, the Second Circuit subsequently vacated its decision to await the Supreme Court's decision in Beckles v. United States. In Beckles, the Supreme Court analyzed the Guideline's residual clause and found that it was not void for vagueness. The Second Circuit relied on Beckles to determine that New York first-degree robbery applies as a crime of violence under the residual clause because a person who "forcibly steals property from a person, while armed with a deadly weapon, engages in conduct that presents a serious potential risk of physical injury to another." After making this determination, the Second Circuit affirmed the District Court's conviction of Jones. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1518_complete_opn.pdf

Panel: Judges Walker, Calabresi, and Hall

Argument Date: 04/27/2016

Argument Location: New York

Date of Issued Opinion: 09/11/2017

Docket Number: No. 15-1518-cr

Decided: Affirmed

Case Alert Author: James Creech

Counsel: Bridget M. Rohde, Acting Assistant United States Attorney, for Plaintiff-Appellee Corey Jones, Matthew B. Larsen, Assistant Federal Defender, for Defendant-Appellant

Author of Opinion: Judge Walker, Jr.

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/12/2017 09:21 PM     2nd Circuit     Comments (0)  

September 8, 2017
  United States v. Wells Fargo & Co. - Second Circuit
Headline: Second Circuit Remands Case to District Court to ApplyLess Stringent Requirement for False Claims Act Lawsuits Based Upon Recent United States Supreme Court Decision

Area of Law: False Claims Act, Fraud

Issue(s) Presented: Whether the requirements for claims under the False Claims Act have changed in the wake of a recent United States Supreme Court decision.

Brief Summary: The United States District Court for the Eastern District of New York dismissed a False Claims Act lawsuit in 2015, which claimed that Wells Fargo had falsely certified compliance with federal banking laws in order to obtain more favorable borrowing rates from the Federal Reserve. The United States Supreme Court subsequently vacated and remanded this decision in light of its 2016 Supreme Court decision in Universal Health Services, Inc. v. United States ex Escobar, which abolished created a new standard for evaluating the adequacy of FCA claims. On remand, the Second Circuit analyzed Escobar's materiality discussion and remanded the case back to the District Court for evaluation of the case under this new standard. To read the full opinion, please visit: United States v. Wells Fargo & Co.

Significance, if Any: Case changes the requirements for pleading a claim under the False Claims Act

Extended Summary:
In 2011, Robert Kraus and Paul Bishop ("the complainants") brought a lawsuit on behalf of the federal government against Wells Fargo. The complainants claimed that Wells Fargo had violated the False Claims Act ("FCA") by falsely certifying their compliance with federal banking laws in order to obtain more favorable borrowing rates from the Federal Reserve. The United States District Court for the Eastern District of New York dismissed the lawsuit in 2015, and the Second Circuit affirmed this dismissal, relying on the failure of the complainants to meet two requirements laid out in a 2001 Second Circuit case, Mikes v. Straus. The first requirement laid out in Mikes, known as the express-designation requirement, dictated that false certification only be implied when the statute in question expressly states that payment is contingent on compliance with the statute. The second requirement, known as the particularity requirement, dictated that the sued party must have falsely certified compliance with a particular statute, regulation, or contractual term to satisfy an express false certification claim.

The United States Supreme Court vacated and remanded this case in light of a 2016 United States Supreme Court decision in Universal Health Services, Inc. v. United States ex Escobar. Escobar was also a false certification case, and as the Second Circuit points out in its opinion, the Escobar decision abrogated the two requirements set out in Mikes. With respect to the express-designation requirement, the Supreme Court held that misleadingly omitting critical facts is sufficient on its own, regardless of whether accurate information is expressly made a prerequisite in the statute. Furthermore, the Supreme Court held that liability under the FCA must simply be grounded within its text, "including the 'well-settled meaning[s] of common law terms'" used, even if not defined, to achieve the goals of the particularity requirement.

Accordingly, the Second Circuit held in this per curiam decision that the express-designation and particularity requirements were no longer the appropriate materiality standards to be applied in FCA cases. Instead, the Second Circuit found the materiality standard set out by the Supreme Court in Escobar is that an FCA claim is valid where the alleged misrepresentation is material to the Government's decision to make a payment. Because this standard was not applied by the district court in the Wells Fargo case, the Second Circuit remanded the case back to the district court to apply the materiality standard for determining whether the complainants adequately alleged an FCA claim.

Given this relaxation of requirements for FCA claims, and the new materiality standard, the Supreme Court and Second Circuit's opinions could affect how FCA lawsuits are brought going forward. To read the full opinion, please visit: United States v. Wells Fargo & Co.

Panel: Chief Judge Katzmann and Circuit Judges Sack and Lohier

Argument Date: 03/01/2016

Date of Issued Opinion: 09/07/2017

Docket Number: 15-2449

Decided: Vacated and Remanded

Case Alert Author: Alexandra Dobles

Counsel: Thomas C. Goldstein & Tejinder Singh, Goldstein & Russell, P.C. and Rachel Grier, Berg & Androphy for Plaintiffs-Appellants; Amy Pritchard Williams, Sara S. Ash, & Stephen G. Rinehart, Troutman Sanders LLP for Defendants-Appellees

Author of Opinion: Per Curiam

Case Alert Circuit Supervisor: Elyse Diamond

    Posted By: Elyse Diamond @ 09/08/2017 07:59 AM     2nd Circuit     Comments (0)  

April 24, 2017
  National Labor Relations Board v. Pier Sixty, LLC - Second Circuit
Headline: Second Circuit Grants Enforces National Labor Relations Board Order Protecting Employee From Firing, Finding Employee's Facebook Post Prior to Election to Unionize Was Not So "Opprobrious" as to Warrant Losing National Labor Relations Act Protection

Area of Law: Labor Law

Issues Presented: Whether an employee's comments on social media, that lead to his firing, were so "opprobrious" as to lose protection under the National Labor Relations Act.

Brief Summary: In October 2011, two days before a tense election to unionize Respondent and Cross-Petitioner Pier Sixty, a New York catering company, one of its service employees, Petitioner and Cross-Respondent Hernan Perez, posted a message on his Facebook page using profanity about his Pier Sixty supervisor, and his supervisor's family, and encouraging employees to vote yes for the union. Perez took down the post three days later but it had already come to the attention of Pier Sixty management which, following an investigation, fired Perez in early November. Mr. Perez filed a charge with the National Labor Relations Board (NLRB) claiming he had been terminated in retaliation for "protected concerted activities" under the National Labor Relations Act (NLRA).

Following a decision by the Administrative Law Judge, the NLRB found that Mr. Perez's activity was protected under NLRA sections 8(a)(1) and (a)(3) and his termination was in retaliation for "protected concerted activities." The Second Circuit affirmed, holding that viewing the "totality of the circumstances," including Pier Sixty's "hostility towards employees' union activities" prior to and around the time of the post, and Pier Sixty's historical general tolerance of profanity by its employers, Perez's post "not so egregious as to lose" NLRA protection. The Second Circuit also held that Pier Sixty could not challenge the enforcement of the NLRB's decision on the basis that the Acting General Counsel of the NLRB was in violation of the Federal Vacancies Report Act because the employer never presented this issue to the NLRB, as required by Section 10(e) of the NLRA.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...66497/1/hilite/


Extended Summary: Respondent and Cross-Petitioner Pier Sixty, LLC ("Pier Sixty") is a catering company in New York. Following a contentious lead up to the election between management and its employees, Pier Sixty's service employees voted to unionize in October 2011. Two days before the election, while on an authorized break at work, Pier Sixty employee, Petitioner and Cross-Respondent Hernan Perez, posted on his personal Facebook account using profanity in talking about his supervisor and supervisor's family. His post also stated "vote YES for the union!!!!!!!" Perez took down the post three days later but it had already come to the attention of Pier Sixty management which, following an investigation, fired Perez in early November.

Perez filed a charge with the National Labor Relations Board ("NLRB") alleging that he had been terminated in retaliation for "protected concerted activities" in violation of the National Labor Relations Act ("NLRA"). That charge was subsequently consolidated with a second charge alleging unfair labor practices under the NLRA. The Administrative Law Judge ("ALJ") who heard the matter found that Pier Sixty violated the NLRA by discharging Perez in retaliation for a protected activity under Act sections 8(a)(1) and (a)(3). Pier Sixty filed exceptions, a three-member panel of the NLRB affirmed the ALJ decision, and Pier Sixty appealed.

As an initial matter, the Second Circuit rejected Pier Sixty's contention that the Acting General Counsel of the NLRB, Lafe Solomon, was in violation of the Federal Vacancies Report Act ("FVRA") of 1998, 5 U.S.C. § 3345, and therefore his signing of the complaint in this case rendered the NLRB decision unenforceable. Pursuant to Section 10(e) of the NLRA, all objections must be considered by the NLRB before appeal, unless the failure to do so is excused by extraordinary circumstances. In this instance, Pier Sixty had failed to raise this argument before the NLRB and Second Circuit held that no extraordinary circumstances existed to excuse that failure, stating that a potential meritorious claim does not alone create an extraordinary circumstance.

The Second Circuit next examined whether Perez's activity was protected under the NLRA. Section 7 of this NLRA guarantees employees the right "to engage in concerned activities for the purpose of collective bargaining or other mutual aid or protection." These rights are protected by Sections 8(a)(1) and (a)(3) of the NLRA, which prohibit an employer from discharging employees for participating in protected, union-related activity under Section 7. However, the NLRA will not protect against an employee engaged in an ostensibly protected activity if that employees acts in an abusive manner.

Noting that substantial deference must be given to the NLRB decision, the Second Circuit examined, without endorsing, the nine-factor totality of the circumstances applied by the NLRB test to determine whether Mr. Perez's Facebook post was protected under the NLRA. The Second Circuit thus examined: (1) any evidence of anti-union hostility; (2) whether the conduct was provoked; (3) whether the conduct was impulsive or deliberate; (4) the location of the conduct; (5) the subject matter of the conduct; (6) the nature of the content; (7) whether the employer considered similar content to be offensive; (8) whether the employer maintained a specific rule prohibiting the content at issue; and (9) whether the discipline imposed was typical for similar violations or proportionate to the offense.

The Second Circuit affirmed, holding that the NLRB's decision that Perez's activity was protected under the NLRA was supported by the evidence. In so holding the court noted that Perez's Facebook post included work place concerns, that Pier Sixty had demonstrated hostility towards its employees' union activities immediately prior to Perez's Facebook post, and Perez's Facebook post explicitly protested mistreatment by management and asked employees to vote yes for the union. On this basis, the Second Circuit found, the NLRB reasonably determined that Perez's outburst was not "an idiosyncratic reaction to a manger's request but part of a tense debate over managerial mistreatment in the period before the representation election." The Second Circuit also noted that Pier Sixty consistently tolerated profanity among its workers with few disciplinary sanctions given for the use of profanity, that Perez's comments were made on an online forum, a key medium and tool for worker organization, and that Perez's outburst was not in the immediate presence of customers and did not disrupt any catering event. Accordingly, the Second Circuit held that the NLRB did not err in ruling that Perez's Facebook post was not so egregious as to exceed the NLRA's protection and was reasonably distinguished from other cases of "opprobrious conduct."

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...66497/1/hilite/


Panel: Circuit Judges Kearse, Cabranes, and Chin

Argument Date: 4/5/2016

Date of Issued Opinion: 4/21/2017

Docket Numbers:
15-1841-ag(L), 15-1962-ag(XAP)

Decided: Granted the Board's application for enforcement; Denied Pier Sixty's cross-petition for review

Case Alert Author:
Leigh G. Wellington

Counsel: Thomas V. Walsh, Jackson Lewis P.C., for Respondent - Cross-Petitioner; Benjamin M. Shultz and Scott R. McIntosh for Benjamin C. Mizer, Principal Deputy Assistant Attorney General, U.S. Department of Justice, Civil Division, Amy H. Ginn, Attorney (Jennifer Abruzzo, Deputy General Counsel; John H. Ferguson, Associate General Counsel; Usha Dheena, Supervisor Attorney) for Richard F. Griffin, Jr., General Counsel, National Labor Relations Board, for Petitioner - Cross-Respondent

Author of Opinion:
Circuit Judge Cabranes

Circuit:
Second Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond

    Posted By: Elyse Diamond @ 04/24/2017 08:52 AM     2nd Circuit     Comments (0)  

April 18, 2017
  Zarda v. Altitude Express
Case Name: Zarda, et al. v. Altitude Express

Headline: Second Circuit Declines to Reverse Past Precedent That Title VII Does Not Cover Sexual Orientation Discrimination, Stating That Such Reversal Can Only be Done by En Banc Court

Area of Law: Employment Discrimination

Issue(s) Presented: Whether a three-judge panel of the Second Circuit can overturn the circuit's previous holding that Title VII does not cover employment discrimination based on sexual orientation.

Brief Summary: Donald Zarda filed suit against his former employer, Altitude Express, alleging that he had been terminated due to his sexual orientation, in violation of the New York State Human Rights Law and Title VII. Defendant successfully moved for summary judgment on the Title VII claim, on the basis that the Second Circuit's 2000 decision in Simonton v. Runyon had held that Title VII's prohibition of sex discrimination did not encompass sexual orientation discrimination. Plaintiff appealed, arguing that the Second Circuit should overturn Simonton and find that discrimination on the basis of sexual orientation constitutes impermissible sex discrimination under Title VII. Noting the recent decision in Christiansen v. Omnicom Group, Inc., which confronted a similar issue, the Second Circuit held that only the circuit sitting en banc may overturn Simonton. The Court further noted that the Court of Appeals for the Seventh Circuit - the only circuit so far to have overturned similar precedent and find that Title VII does prohibit discrimination on the basis of sexual orientation - did so sitting en banc when it decided Hively v. Ivty Tech Comm. Coll. earlier this month.

Extended Summary (if applicable):

Altitude Express, defendant, employed Donald Zarda,* plaintiff, as a skydiving instructor. In 2010, Mr. Zarda served as a skydiving instructor for the female partner of a heterosexual couple. Mr. Zarda dove in-tandem with the female partner, and informed her that he was gay to mitigate the awkwardness that might arise from a woman being so tightly strapped to a man. When she and her boyfriend compared notes, and she disclosed that Mr. Zarda had informed her that he was gay, the male partner called and complained about Mr. Zarda's behavior. Altitude Express fired him soon thereafter.

Mr. Zarda filed a wrongful termination suit under the New York State Human Rights Law, N.Y. Exec. Law. § 296(1)(a) ("NYSHRL"), and under Title VII. Altitude Express moved for summary judgment on the Title VII claim on the basis that the Second Circuit had held, in a 2000 case called Simonton v. Runton, that Title VII does not bar discrimination on the basis of sexual orientation. The District Court granted the defendant's motion but let the NYSHRL claim proceed to trial. While the case was pending in 2015, the Equal Employment Opportunity Commission (EEOC) issued a decision stating that discrimination on the basis of sexual orientation amounts to sex discrimination in violation of Title VII. Mr. Zarda moved the court to reconsider its summary judgment dismissal of his Title VII claim, in light of the EEOC's position, but the district court declined due to the Second Circuit's precedent in Simonton. Thus, only Mr. Zarda's state law discrimination claim - which requires a stronger showing of causation than Title VII requires - went to trial, and a jury ruled against him. He appealed to the Second Circuit, on the basis, inter alia, that it should overturn Simonton and find that Title VII prohibits discrimination on the basis of sexual orientation.

The defendant argued that the Court need not revisit this issue because a jury had found against the plaintiff on the state law claim. The Second Circuit rejected this argument, explaining that the District Court had instructed the jury to use "but-for" causation for the state law claim, which is a more difficult standard than the "substantial" or "motivating" factor test utilized by Title VII. Hence, had there been an actionable claim available to the plaintiff under Title VII, it could have been more easily won. However, the court held that as a three-judge panel, it could not reverse Simonton, reaffirming its recent holding in Christiansen v. Omnicom Group, Inc. that only the Court sitting en banc could overturn the prior precedent established in Simonton. Further, the Second Circuit, citing Hively v. Ivty Tech Comm. Coll., No. 15-1720, 2017 WL 1230393, at *1 - 2 (7th Cir. Apr. 4, 2017) (en banc), noted that the Seventh Circuit Court of Appeals only overturned its prior analogous precedent regarding Title VII's coverage of sexual orientation discrimination by sitting en banc. Accordingly, the Second Circuit affirmed the district court's dismissal of Mr. Zarda's Title VII claim.

*As the Court notes in fn. 1, Mr. Zarda died in a skydiving accident prior to going to trial, and the case proceeded with the two executors of his estate replacing him as plaintiff.

To read the full decision, please visit: http://www.ca2.uscourts.gov/de...bdcbd/1/hilite/


Panel: Circuit Judges Dennis G. Jacobs, Robert D. Sack, Gerard E. Lynch.

Argument Date: January 5, 2017

Argument Location: New York, NY

Date of Issued Opinion: April 18, 2017

Docket Number:
No. 15-3775

Decided: Affirmed

Case Alert Author: Vito J. Marzano

Counsel: Gregory Antollino and Stephen Bergstein for Appellants; Saul D. Zabell for Appellees.

Author of Opinion: Per Curiam

Circuit: Second Circuit Court of Appeals.

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 04/18/2017 08:32 PM     2nd Circuit     Comments (0)  

March 28, 2017
  Christiansen v. Omnicom Group, Inc. - Second Circuit
Headline: Openly Gay Employee Has Valid Gender Stereotyping Claim under Title VII Arising from Workplace Discrimination; Concurring Opinion Suggests Second Circuit Reconsider Whether Sexual Orientation Claims Can Serve as a Basis for Claims Under Title VII

Areas of Law: Labor and Employment, Gender Rights

Issue(s) Presented: Whether workplace harassment alleged by opening gay employee sufficiently stated a valid gender stereotyping claim under Title VII

Brief Summary: Matthew Christiansen, an HIV-positive, openly gay man, was an employee of an advertising agency. During his employment, he was subjected to a humiliating pattern of harassment by his supervisor in the form of sexually suggestive images and inappropriate remarks that referred to his effeminacy, sexual orientation, and HIV status. Christiansen sued the agency and its parent corporation for discrimination under the American Disabilities Act, Title VII of the Civil Rights Act, and state and local law. The United States District Court for the Southern District of New York granted the defendant's motion to dismiss Christiansen's claims, holding that his claims alleged sexual orientation discrimination, which the Second Circuit has ruled is not cognizable sex discrimination under Title VII. The U.S. Court of Appeals for the Second Circuit disagreed and reversed, finding that Christiansen's claims adequately alleged discrimination on the basis of gender stereotyping, which is a valid claim under Title VII. In a concurring opinion, Second Circuit Chief Judge Katzmann argued strenuously that the Second Circuit should revisit its precedential decisions that sexual orientation claims are not cognizable sex discrimination cases under Title VII.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...9b4e9902ab5/1/hilite/

Extended Summary: Title VII of the Civil Rights Act of 1964 makes it unlawful for an employer to discriminate against an individual based upon the individual's sex. A 1989 U.S. Supreme Court case established that this protection covers discrimination based upon gender stereotyping, finding that a woman who was told to act more femininely in order to receive a promotion was discriminated against on the basis of her sex. Subsequently, however, the Second Circuit and other circuit courts have declined to extend this language to include discrimination on the basis of sexual orientation.

Relying on, and indicating they were bound by, Second Circuit precedent, the United States District Court for the Southern District of New York dismissed Christiansen's claims on defendant's motion to dismiss for failure to state a legal claim, holding that they were rooted primarily in sexual orientation discrimination, rather than gender stereotyping, and, therefore, not covered by Title VII. However, the Second Circuit found that Christiansen had identified instances in which his supervisor discriminated against him on the basis of gender stereotyping, such as his description of Christiansen as "effeminate" to others in the office, and making reference to Christiansen's feminine qualities in sexually suggestive drawings. The Second Circuit panel explained that although it did not have authority to overrule circuit precedent stating that discrimination based upon sexual orientation is not covered by Title VII, these decisions do not lessen the protection that gay, lesbian, and bisexual individuals have against gender stereotyping, and that these individuals must be afforded the same level of protection as heterosexual individuals.

In a lengthy concurring opinion joined by District Judge Brodie (sitting by designation), Chief Judge Katzmann argued that "the legal landscape has substantially changed" since the Second Circuit's prior rulings and that this court should, in the context of an appropriate case, revisit the holding that sexual orientation claims are not cognizable under Title VII. He outlined three potential arguments, not previously considered by the Second Circuit, that might support a finding that Title VII prohibits discrimination on the basis of sexual orientation and contended that a "fresh look" was warranted given "societal understanding of same-sex relationships has evolved considerably," the EEOC position on the issue had changed, and more recent Supreme Court decisions have "afford(ed) greater legal protection to gay, lesbian, and bisexual individuals."

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...9b4e9902ab5/1/hilite/

Panel:
Circuit Judges Katzmann and Livingston; District Judge Brodie, sitting by designation

Argument Date:
1/20/2017

Date of Issued Opinion:
3/27/2017

Docket Number:
16-748

Decided: Reversed and remanded

Case Alert Author: Alexandra Dobles

Counsel: Susan Chana Lask, Law Offices of Susan Chana Lask, for Plaintiff-Appellant Matthew Christiansen; Howard J. Rubin, Davis & Gilbert LLP, for Defendant-Appellees Omnicom Group Inc., DDB Worldwide Communications Group Inc., Peter Hempel, and Chris Brown; Rick Ostrove, Leeds Brown Law, P.C., for Defendant-Appellee Joe Cianciotto

Author of Opinion: Per curiam

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 03/28/2017 08:47 AM     2nd Circuit     Comments (0)  

March 27, 2017
  Jacoby & Meyers v. The Presiding Justices
Headline: Second Circuit Rejects First Amendment Challenge to New York's Prohibition of Non-Lawyer Investment in Law Firms

Area of Law: Constitutional Law

Issue Presented: Whether New York State's prohibitions on non-lawyer investment in law firms violate lawyers' First Amendment rights to associate with clients and access the courts.

Brief Summary: Jacoby & Meyers brought a putative class action challenging New York's rules, regulations and statutes that collectively prohibit non-attorneys from investing in law firms. The complaint alleged that the additional capital from such investors would allow firms to improve the quality of their legal services and reduce their fees. The United States District Court for the Southern District of New York dismissed the complaint, and the plaintiffs appealed. The Second Circuit affirmed, explaining that "in the context of for-profit law firms who serve their clients' interests as a business," the First Amendment associational right "belongs to the client, not the attorney." Moreover, even assuming for the sake of argument that for-profit law firms "could be found to have some degree of First Amendment right to associate with clients or to petition the government through the courts on their clients' behalf," the complaint failed because the prohibitions were rationally related to a legitimate government interest.

Extended Summary: New York, like many other states, prohibits non-attorneys from investing in law firms. "The prohibition is generally seen as helping to ensure the independence and ethical conduct of lawyers." Jacoby & Meyers, LLP, a limited liability partnership (the "LLP"), and Jacoby & Meyers USA II, PLLC, a related professional limited liability company (the "PLLC"; together, "plaintiffs" or the "J&M Firms") brought a putative class action challenging the various New York state rules, regulations, and statutes that collectively prohibit such investments. They alleged that they had received offers from various sources (including "high net-worth individuals" and "institutional investors) to invest capital in exchange for owning an interest in the firm, and that this funding would enable them to represent their clients more effectively. They argued that "the state regime unlawfully interferes with their rights as layers to associate with clients and to access the courts - rights they see as grounded in the First Amendment."

The United States District Court for the Southern District dismissed the complaint, and the plaintiffs appealed. The Second Circuit affirmed the dismissal. First, the court explained that the First Amendment associational right likely did not apply to for-profit law firms. The court noted that the "Supreme Court has held that the First Amendment bears on some situations in which clients and attorneys seek each other out to pursue litigation," but all of those situations were distinguishable. In particular, there is one line of cases involving political advocacy organizations' ability to recruit and solicit clients, and another line of cases involving clients' ability to collectively seek legal counsel. "The Supreme Court has never held, however, that attorneys have their own First Amendment right as attorneys to associate with current or potential clients, or their own right to petition the government for the redress of their clients' grievances when the lawyers are acting as advocates for others, and not advocating for their own cause," the court explained. The court was skeptical that such First Amendment rights were possessed by for-profit law partnerships or PLLCs that were not engaged in their own political advocacy or expression.

Acknowledging, however, that "the law is evolving rapidly with respect to the protections afforded commercial speech by the First Amendment," the court went on to consider whether--assuming that the plaintiffs did possess some degree of First Amendment rights here--those rights were violated by the New York prohibition. It concluded that they were not. It rejected the plaintiffs' argument that strict scrutiny should apply here, explaining that because there was no substantial burden on a First Amendment right, only rational basis review applied. Because the regulations were rationally related to a legitimate governmental interest - namely, New York State's "well-estalbished interest in regulating attorney conduct and in maintaining ethical behavior and independence" - they "easily pass[ed] muster."
To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...8fb11aeca48/1/hilite/

Panel: Circuit Judges Lynch and Carney, District Judge Hellerstein

Argument Date:
8/19/16

Date of Issued Opinion: 3/24/17

Docket Number: 15-2608

Decided: Affirmed

Case Alert Author: Belino Voshtina

Case Alert Supervisor: Emily Gold Waldman

Counsel: Douglas Gregory Blankinship, Finkelstein, Blankinship, Frei‐Pearson & Garber, LLP, White Plains, New York for Appellants.

Andrew Rhys Davies, Assistant Solicitor General (Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, New York, New York, for Appellees.

Author of Opinion: Judge Carney

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 03/27/2017 07:36 PM     2nd Circuit     Comments (0)  

March 19, 2017
  Gil v. Sessions - Second Circuit
Headline: Second Circuit denies petition to review Board of Immigration Appeals decision denying claim of derivative citizenship

Area of Law: Immigration Law

Issue Presented: Whether the petitioner, who was born out of wedlock in the Dominican Republic to two Dominican citizens, could claim derivative citizenship as a legitimized "child" of his naturalized father under the Immigration and Nationality Act.

Brief Summary: The petitioner was born in the Dominican Republic to unwed Dominican citizens. He petitioned for review of a Board of Immigration Appeals ("BIA") decision that found him ineligible for derivative citizenship through his naturalized father and, accordingly denied his motion to terminate removal proceedings initiated based upon his two prior convictions. To be a "child" eligible for derivative citizenship under § 101(c)(1) of the Immigration and Nationality Act, an individual born out of wedlock must be "legitimated" under the Act by the age of 16. The Second Circuit affirmed the findings of the BIA and held that petitioner failed to gain legitimated status under Dominican or New York law before he turned 16 years old and, therefore, was not eligible for derivative citizenship.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...52cfa3ec46d/1/hilite/

Extended Summary: Gil was born in the Dominican Republic in 1968. His parents, unwed, were both Dominican citizens. In 1978, at nine years old, Gil came to the United States to live with his father as a lawful permanent resident. His father became a naturalized United States citizen in November 1980 when Gil was 11 years old and Gil received a Certificate of Citizenship at this time on the basis that he derived citizenship as a result of his father's naturalization. Gil was convicted of first-degree robbery in 1987 and of a controlled substance offense in federal court in 1995.

Thereafter, in 2010, the United States Citizenship and Immigration Services determined that Gil's Certificate of Citizenship was unlawfully or fraudulently obtained because he was not a qualifying "child" under the Immigration and Nationality ("INA") requirement for derivative citizenship. His Certificate of Citizenship was therefore cancelled and the Department of Homeland Security instituted removal proceedings against Gil based upon his prior convictions.
On November 18, 2013, an Immigration Judge ("IJ") rejected Gil's motion to terminate the removal proceedings based upon a claim of derivative citizenship, finding Gil was not "legitimate" under Dominican or New York law before reaching the age of sixteen as specified in the INA. The Board of Immigration Appeals (BIA) affirmed the IJ's ruling and Gil petitioned the Second Circuit for review of the BIA decision.

The INA § 321(a) addresses when a "child" born outside of the United States to alien parents may become a United States citizen through derivative citizenship. INA § 101(c)(1) then defines a "child" under the Act as "includ[ing] a child legitimated under the law of the child's residence or domicile, or under the law of the father's residence or domicile if such legitimation . . . takes place before the child reaches the age of 16 years . . . and the child is in the legal custody of the legitimating . . . parent . . . at the time of such legitimation." 8 U.S.C. § 101(c)(1). While not defined in the Act, the BIA has interpreted "legitimated" to refer to a child born out of wedlock who has been accorded legal rights that are identical to those enjoyed by a child born in wedlock. The issue of this case turned on whether, before Gil turned 16 years old, Dominican or New York had eliminated all legal distinctions between children born in and out of wedlock.

The Second Circuit ruled that Gil had not "legitimated" by the time he was 16 years old under Dominican law. A law was enacted in 1994 that changed Dominican law to eliminate all legal distinctions between children born in wedlock and those born out of wedlock, however Gil was 26 years old when this law took effect and therefore, the court found, was not a legitimated child by the age of 16 as required by the Act. The Second Circuit further ruled that Gil was not a legitimated child under New York law finding that New York law distinguishes between children born in and out of wedlock for inheritance purposes, citing to N.Y. Est. Powers & Trusts Law § 4-1.2(b) (McKinney 2010). Concluding Gil did not "legitimate" by the age of 16 years old under Dominican or New York law, and accordingly was not a "child" under § 101(c)(1) of the INA. the Second Circuit agreed with that he was not eligible for derivative citizenship through his father's naturalization. Accordingly, the Second Circuit denied Gil's petition for review of the BIA's decision that rejected his claim of derivative citizenship and denied his motion to terminate his removal proceedings.

To read the full opinion, visit,
http://www.ca2.uscourts.gov/de...52cfa3ec46d/1/hilite/

Panel: Circuit Judges Walker, Hall, and Chin

Argument Date: 10/31/2016

Date of Issued Opinion: 3/17/2017

Docket Number: 15-3134-ag

Decided: Petition Denied

Case Alert Author: Leigh G. Wellington

Counsel: Joshua E. Bardavid, New York, New York for Petitioner; Lisa M. Damiano, Trial Attorney, Terri J. Scadron, Assistant Director, Office of Immigration Litigation, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, United States Department of Justice, Washington, D.C. for Respondent.

Author of Opinion: Circuit Judge Chin

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 03/19/2017 11:33 AM     2nd Circuit     Comments (0)  

March 11, 2017
  United States v. Monsalvatge
Headline: Second Circuit Affirms District Court's Admission of Clips From 2010 Film "The Town" into Evidence During Armed Robbery Trial

Area of Law: Evidence and Criminal Law

Issue Presented: Whether the district court abused its discretion in admitting into evidence at trial clips from the 2010 film The Town, which were intended to shed light on the defendants' modus operandi in carrying out a bank robbery.

Brief Summary:
Defendant-appellants Akeem Monsalvatge, Edward Byam, and Derrick Dunkley were convicted in the Eastern District of New York of armed robberies of two Pay-O-Matic check-cashing stores. At the trial, the prosecution had played for the jury several short clips from the 2010 film The Town, which was about a group of Boston bank robbers. The Government used the clips to illustrate and explain the differences in modus operandi between the two robberies that occurred almost two years apart, arguing that before the second robbery, the defendants saw and admired The Town and used ideas from it. On appeal, the defendant-appellants argued that the district court abused its discretion in allowing the prosecution to show the clips. The Second Circuit disagreed. Affirming the Defendant-Appellants' convictions, the court found that the clips were relevant and that their probative value outweighed the potential for prejudice, particularly given the clips' very short length, the clips' narrow tailoring, and the district court's two curative instructions.

Extended Summary: Defendant-Appellants Akeem Monsalvatge, Edward Byam, and Derrick Dunkley appealed from their judgments of conviction in the United States District Court for the Eastern District of New York entered on April 10, 2014. The Defendant-Appellants were convicted after a jury trial of committing two armed bank robberies in violation of 18 U.S.C. § 1951(a), two counts of unlawful use of a firearm during the commission of a crime of violence in violation of 18 U.S.C. § 9124(c)(1)(A)(ii), and conspiracy to commit Hobbs Act robbery in violation of 18 U.S.C. § 1951(a). On April 10, 2014, District Court Judge Dearie sentenced each of the three Defendant-Appellants to thirty-two years of imprisonment, five years of supervised release, $240,795.62 in restitution, and a $500 special assessment.
On appeal, Defendant-Appellants raised a variety of claims. The Second Circuit's opinion addresses one of Monsalvagte's claims, which Dunkley joins: whether the district court abused its discretion in admitting into evidence at trial four clips from the the film The Town.

In advance of the trial, the Government filed a motion in limine requesting to play for the jury at trial film clips from The Town, a 2010 crime drama about a group of Boston bank robbers. The Government asserted the clips would serve as evidence regarding the genesis of the Defendant-Appellants' modus operandi in the second 2012 robbery and to explain the change in modus operandi between the first robbery committed in 2010 and the second in 2012. The district court granted the Government's motion to admit the clips over the Defendant-Appellants objections.
In the first robbery on February 24, 2010, three bandana-covered men, wielding guns, stole $44,039.73 from a Pay-O-Matic in Queens, New York, with one of the robbers gaining access to the protected area of the store by descending through the roof. In the second robbery on February 14, 2012, three robbers stole $200,755.89 at gunpoint from a Pay-O-Matic also located in Queens, New York. This time, however, the robbers wore police uniform disguises and lifelike special effects masks. The robbers also accosted a store employee by showing her pictures of her home in gaining access to the store. In addition, unlike in the first robbery, the robbers poured bleach on the teller counter in order to remove any fingerprints or DNA.

The clips from The Town, totaling one minute and seven seconds, depicted the film's protagonists utilizing the same methods in robbing banks as the robbers who committed the second robbery: pouring bleach on bank surfaces, threatening an employee by revealing knowledge of the employee's home address, wearing police badges, uniforms, and sunglasses, and wearing special effect masks. Furthermore, the Government admitted evidence intended to show that Defendant-Appellant Monsalvatge had seen The Town and admired it.

At trial, before and after the playing of the clips, the district court gave two curative instructions to the jury emphasizing that anything heard on the clips was not before them for the truth of it. Additionally, the district court also further instructed the jury about two differences between the 2012 robbery and the movie clips: that there was no evidence that any perpetrators of the robbery were at the home of the store employee and that unlike the movie clips, there was no evidence that the 2012 robbers used assault weapons in the commission of the robbery.

The Second Circuit reviewed the district court's evidentiary ruling over objection for abuse of discretion. The circuit court will only reverse an evidentiary ruling under abuse of discretion review if the ruling was arbitrary and irrational. Furthermore, the circuit court noted it had in the past declined to second-guess a district court's admission of relevant video or media evidence where the evidence bears an identifiable connection to an issue or defendant in the case.

In affirming the district court's admittance of the movie clips, the Second Circuit found the clips, in conjunction with other evidence, tended to make more probable the factual inference that the 2010 and 2012 robberies were part of the same conspiracy. The Second Circuit noted the aforementioned similarities between the 2012 robbery and the robberies portrayed in The Town as well as the fact that the film had not yet been released prior to the 2010 robberies. In rejecting the Defendant-Appellants contention that the admittance of the clips was prejudicial, the Second Circuit held any prejudicial effect was minimal given the clips' extreme short length, the clips' narrow tailoring and the district court's two curative instructions.
Thus, the Second Circuit found the district court did not abuse its discretion in admitting into evidence the clips from the The Town and therefore affirmed the convictions of Defendant-Appellants Monsalvatge and Dunkley.

To read the full opinion, click http://www.ca2.uscourts.gov/de...11df30b888aa/3/hilite/ .

Panel: Circuit Judges Livingston and Droney; District Judge Torres, sitting by designation

Argument Date: 10/02/2015

Date of Issued Opinion: 03/08/2017

Docket Numbers:
14-1113

Decided: Affirmed

Case Alert Author: Thomas J. Baroni

Counsel: Jonathan I. Edelstein, Edelstein & Grossman, New York, N.Y. for Defendant-Appellant Akeem Monsalvatge; Patrick Michael Megaro, Orlando, Fla. for Defendant-Appellant Edward Byam; Daniel M. Perez, Law Offices of Daniel M. Perez, Newton, N.J. for Defendant-Appellant Derrick Dunkley; Tyler J. Smith, Jo Ann M. Navickas, Tiana A. Demas, Maria Cruz Melendez, Assistant United States Attorneys, New York, N.Y., (Kelly T. Currie, Acting United States Attorney for the Eastern District of New York) for Appellee United States of America

Author of Opinion: Judge Livingston; concurrence by Judge Torres

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 03/11/2017 02:55 PM     2nd Circuit     Comments (0)  

March 3, 2017
  New York Pet Welfare Ass'n, Inc. v. New York City - Second Circuit
Headline: Second Circuit Upholds New York City Animal Welfare Laws Aimed at Controlling Overpopulation of Cats and Dogs

Area of Law: Animal Law, Commerce Clause, State & Federal Preemption

Issue(s) Presented: Whether newly-enacted New York City animal welfare laws are preempted by state or federal law or violate the dormant Commerce Clause.

Brief Summary: Plaintiff-appellant brought suit against New York City in the United States District Court for the Eastern District of New York to challenge two New York City animal welfare laws enacted in 2015. Plaintiff-appellant, the New York Pet Welfare Association, alleged that one law, requiring New York City pet shops to buy dogs and cats only directly from a specific class of federally-licensed breeders, violated the dormant commerce clause. In addition, plaintiff-appellant alleged that the federal Animal Welfare Act preempted this law. Second, plaintiff-appellant alleged that New York law preempted a second animal welfare law that required pet stores to sterilize dogs and cats before consumers could purchase them.

The district court held that plaintiff-appellant's Commerce Clause challenge failed because the laws did not "discriminate against or unduly burden interstate commerce." The district court also found that neither federal law nor New York state law preempted the City's animal welfare laws. Plaintiff-appellant appealed, and the Second Circuit affirmed the district court's dismissal.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...adf82ec74c6/2/hilite/.

Extended Summary: This case concerns animal welfare laws that aim to protect the approximately 1.1 million dogs and cats that reside in New York City. In 2015, defendant-appellant New York City (the "City") drafted a series of animal welfare laws aimed at the breeding of dogs and cats, their subsequent sale, and the unfortunate issue of overpopulation. Before the laws took effect, plaintiff-appellant, the New York Pet Welfare Association, sued the City in the United States District Court for the Eastern District of New York, challenging two of the laws: the "Sourcing Law" and the "Spay/Neuter Law."

The Sourcing Law required that City pet stores sell only animals from a specific class of federally-licensed breeders, while the Spay/Neuter Law required pet stores to spay and neuter the animals before selling them. Plaintiff-appellant alleged that the Sourcing Law violated the Commerce Clause and was preempted by the federal Animal Welfare Act ("AWA and alleged that the Spay/Neuter Law was preempted by New York state law. The district court dismissed the complaint in its entirety, and plaintiff-appellant appealed to the Second Circuit.

In its analysis, the Second Circuit explained that the AWA covers any "person who, in commerce, for compensation or profit, delivers for transportation, or transports, except as a carrier, buys, or sells, or negotiates the purchase or sale of . . . any dog or other animal . . . [for] use as a pet." The AWA gives wide discretion to the Secretary of Agriculture to form a licensing scheme and set standards. With this discretion, the Secretary created three categories of dealers, Classes A-C. Despite the AWA's broad scope, by the Act's express terms, states may still promulgate standards in addition to those set by the Secretary. States have taken the initiative to regulate large-scale breeders and require pet stores to strengthen their warranties and provide more disclosures about the pets they sell.

Plaintiff-appellant argued that the AWA preempted the Sourcing Law because it interfered with the AWA's established licensing systems. The Second Circuit rejected this argument, holding that plaintiff-appellant did not meet its burden in proving that the two laws could not stand together. Specifically, the court noted that plaintiff-appellant failed to show how the Sourcing Law prohibited the Secretary of Agriculture's licensing system from fulfilling Congress's intended goal of inspection. The Court differentiated between the Sourcing Law's goal of regulating sales by a federally-licensed class and the AWA's ability to "facilitate federal enforcement activities." Since Congress directed the Secretary to cooperate with state officials in promulgating and enforcing state animal welfare laws, Congress, the Second Circuit concluded, did not intend the AWA to automatically preempt any proposed state laws.

The Second Circuit likewise rejected plaintiff-appellant's argument that the Sourcing Law's violated the Commerce Clause. As an initial matter, the court determined that the Sourcing Law did not discriminate against interstate commerce. The court stated that the law posed only an incidental burden on commerce because even if the law made it difficult for some out-of-state breeders to sell to City pet stores, as long as some breeders are able to this does not constitute an impermissible burden on interstate commerce overall.

Regarding the Spay/Neuter Law, plaintiff-appellant argued that, because the law set a certain minimum age and weight for required sterilization, these standards conflicted with and were preempted by New York state law dictating that veterinarians should apply independent judgment and obtain informed consent from the owner before performing the surgeries. However, the Second Circuit found no preemption because the Spay/Neuter Law did not impose any obligations on veterinarians who, the court said, could simply refuse to perform any surgeries that they felt would violate their duties under state law.

As a result, the Second Circuit affirmed the lower court's decision dismissing plaintiff-appellant's complaint in its entirety.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...adf82ec74c6/2/hilite/.

Panel (if known): Circuit Judges Leval and Lohier, and District Judge Korman

Argument Date: 09/19/16

Date of Issued Opinion: 03/02/17

Docket Number:
No. 15-4013-cv

Decided: Affirmed.

Case Alert Author: Samantha Hazen

Counsel: Jeffrey M. Pollock (Nancy Elizabeth Halpern, on the brief), Fox Rothschild LLP, Lawrenceville, NJ (James M. Lemonedes, Fox Rothschild LLP, New York, NY, on the brief), for Plaintiff- Appellant, Benjamin Welikson, of Counsel (Zachary W. Carter, Corporation Counsel, Richard Dearing, Assistant Corporation Counsel, Devin Slack, of Counsel, on the brief), City of New York, New York, NY, for Defendants-Appellees, S. Reid Kahn, Kane Kessler, P.C., New York, NY, for Amicus Curiae The Humane Society of the United States.

Author of Opinion: District Judge Edward R. Korman

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 03/03/2017 02:20 PM     2nd Circuit     Comments (0)  

February 16, 2017
  United States v. Barret
Headline: Second Circuit Rules That Testimony of a Former Co-Defendant Who Pleads Guilty During Trial is Admissible During the Same Trial, With Appropriate Precautions

Area of Law: Criminal

Issue Presented: Whether the testimony of a former co-defendant who switches his plea to guilty and agrees midtrial to testify against the remaining co-defendants is admissible, provided that steps are taken to avoid undue prejudice to the remaining defendants.

Brief Summary:
This case developed from a joint investigation by the United States Postal 5 Inspection Service, the Drug Enforcement Administration ("DEA"), and the New York City and New York State Police Departments, into the activities of a large-scale marijuana distribution organization in Queens, New York known as the "Fatherless Crew." The Fatherless Crew is alleged to have run its operation out of the Barret residence in Jamaica, Queens, one other residential property, and several commercial mail receiving agencies ("CMRAs") located in Queens. The first four days of trial consisted primarily of testimony by the case agent, after which one defendant entered into proffer talks with the government. He then entered into a cooperation agreement with the government and changed his plea from innocent to guilty on January 17, 2012. That same day, the government advised the court and defense counsel of its intention to add the now-cooperating defendant to its witness list. The remaining co-defendants were convicted in the United States District Court for the Eastern District of New York, and they appealed. The Second Circuit joined the Third and Seventh Circuits in holding that a district court may allow such testimony, provided that it takes appropriate steps to avoid causing unfair prejudice to the remaining co‐defendants. To read the full opinion, please visit http://www.ca2.uscourts.gov/de...abfc524b541/2/hilite/

Significance, if Any: Issue of first impression in the Second Circuit.

Extended Summary: On October 5, 2010, ten packages weighing roughly 120 kilograms were sent from Arizona to three CMRAs in Flushing. Investigators observed Wilson pick up nine of the boxes and deliver them to the Barret residence. Investigators later discovered the tenth box at another CMRA in Flushing, and seized 10.63 kilograms of marijuana from the box. In addition, on August 19, September 2, and 23, 2010, investigators conducted "trash pulls" of garbage left outside the Barretr residence and discovered bags containing remnants of marijuana, bags with marijuana residue and rubber bands.

Following Barret's arrest, a New York Police Department SWAT team executed a search warrant at the Barret residence. The police also arrested Scarlett, Forrest and several others. During their search of the residence, investigators discovered an open box, along with one bale of marijuana on the kitchen counter and another bale on the floor. Investigators also opened the remaining unopened parcels and found more 13 bales of marijuana. The total weight of the marijuana recovered from the packages exceeded 95.7 kilograms. Investigators recovered approximately 20.4 kilograms more of marijuana elsewhere in Barret's house.

The first four days of trial in the United States District Court for the Eastern District of New York consisted primarily of testimony by the case agent, after which Forrest entered into proffer talks with the government. He entered into a cooperation agreement with the government and changed his plea from innocent to guilty on January 17, 2012. That same day, the government advised the court and defense counsel of its intention to add Forrest to its witness list.

Scarlett, Mitchell, and co-defendant Ryan Anderson objected and moved to exclude Forrest's testimony, arguing: (1) Forrest participated in defense strategy before entering into his cooperation agreement, enabling him to report on such strategies to the government in violation of the co-defendants' Sixth Amendment rights to counsel; (2) Forrest was present at trial for the testimony of the government's first witness, violating Rule 615 of the Federal Rules of Evidence which requires the exclusion of witnesses from the courtroom; and (3) Forrest's testimony would likely refute assertions made during the defense's opening and arguments that were critical to the defense. Nonetheless, the testimony was admitted and the defendants were ultimately convicted.

On appeal, the Second Circuit noted that "the question of whether a district court may permit the testimony of co-defendants who change their pleas to guilty mid-trial and testify for the government is a question of first impression in our Circuit." The court ruled: "We join our sister Circuits in holding that a district court may allow such testimony, but must take appropriate steps to avoid causing unfair prejudice to the remaining co-defendants.

The court then explained what those "appropriate steps" involve. First, the district court must ensure that the testimony of the former co-defendant is admitted "only for the limited purpose of testifying to events other than the witness's involvement in joint defense planning," so that no testimony is given about the defense strategy. Second, the district court must "deliver adequate cautionary instructions to the jury to make certain that the jury does not draw any adverse or unfair inferences against the remaining co-defendants, does not use the former co-defendant's admission as guilt as evidence of the guilt of the remaining co-defendants, and does not give the former co-defendant's testimony undue weight." Here, the court approved of the jury instructions that the district court had given, and affirmed the conviction.
To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...efc17f8cf2d/1/hilite/

Panel (if known): Circuit Judges Pooler, Hall, and Carney

Argument Date: 1/6/16

Date of Issued Opinion: 2/15/17

Docket Number: Nos. 12‐4663(L), 13‐3800, 14‐573, 14‐2014

Decided: Affirmed

Case Alert Author: Belino Voshtina

Counsel: James M. Branden, New York, NY, for Defendant-Appellant Christopher Barret. Michael H. Sporn, New York, NY, for Defendant‐Appellant Omar Mitchell. Peter Tomao, Garden City, NY, for Defendant‐Appellant Leon Scarlett. Tyler J. Smith, Assistant United States Attorney (Amy Busa, Peter A. Norling, Assistant United States Attorneys, on the brief), for Robert L. Capers, United States Attorney for the Eastern District of New York, New York, NY, for Appellee.

Author of Opinion: Judge Pooler

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 02/16/2017 04:46 PM     2nd Circuit     Comments (0)  

February 11, 2017
  In re ACTOS End-Payer Antitrust Litigation
Headline: Second Circuit Revives Pharmaceutical Antitrust Suit Over Takeda's Diabetes Drug ACTOS

Areas of Law: Patent; Antitrust

Issue Presented: Whether the plaintiffs adequately alleged that Takeda had harmed them by filing false patent descriptions about its diabetes drug ACTOS

Brief Summary: A group of drug purchaser plaintiffs sued Takeda Pharmaceuticals, alleging that it had falsely described two patents regarding its diabetes drug ACTOS, thereby delaying competitors from selling generic versions of the drug and causing them to pay monopoly prices. The United States District Court for the Southern District of New York dismissed their complaint, finding that the drug purchasers had not plausibly alleged that Takeda's allegedly false descriptions caused other generic competitors to delay their entry into the market. The Second Circuit affirmed in part and vacated in part, finding that the causation theory was plausible with respect to one out of the ten generic manufacturers. To read the whole opinion, please visit http://www.ca2.uscourts.gov/de...423bbfb3495/2/hilite/

Extended Summary: Takeda Pharmaceuticals received a patent for its diabetes drug ACTOS in the 1980s. The patent had an expiration date of January 17, 2011. Importantly, this expiration date marked the earliest point at which generic forms of ACTOS could enter the market. Takeda subsequently filed two more patents for the same drug, both of which had a later expiration date of June 19, 2016. According to the complaint, Takeda falsely represented the type of these patents to the FDA, thereby making it appear as though June 19, 2016 was the date until which generic competitors had to wait to enter the market.

Plaintiffs, purchasers of the drug ACTOS, brought a lawsuit alleging that Takeda's false descriptions of the two later patents to the FDA delayed competitors from offering generic versions of ACTOS on the market, thereby forcing plaintiffs to pay monopoly prices for longer than necessary. The district court dismissed the plaintiffs' claims, finding that plaintiff's complaint failed to adequately plead that the false descriptions had caused the generic competitors to delay entering the market.

The plaintiffs then appealed to the Second Circuit, alleging two theories of causation. The first theory was that Takeda's allegedly false descriptions of the two subsequent patents forced other pharmaceutical companies to file certifications, which triggered an exclusivity period. Plaintiffs claim that but for the false descriptions, other companies would not have filed certifications and no exclusivity period would have arisen. The Second Circuit concluded, however, that the complaint lacked the factual allegations necessary to allege that the other companies even knew Takeda had described the subsequent patents as drug product patents.

For the second theory of causation, Plaintiffs alleged that Takeda's allegedly false descriptions of the two subsequent patents caused FDA to make an announcement that they would not approve an ACTOS ANDA, and that this announcement specifically caused Teva (one of the generic manufacturers) to stall entering the market. The Second Circuit found that this theory of causation was plausible. Accrodingly, the Second Circuit affirmed the dismissal in part, and vacated it in part, explaining that the complaint could go forward specifically on "plaintiffs' theory as to Teva."

Panel: Circuit Judges Jacobs and Livingston; District Judge Rakoff

Argument Date: 09/16/2016

Date of Issued Opinion: 02/08/2017

Docket Number:
15-3364

Decided: Affirmed in Part and Vacated in Part

Case Alert Author: Alexandra Dobles

Counsel: Steve D. Shadowen, Hilliard & Shadowen LLP for Plaintiffs-Appellants; Rohit K. Singla, Munger, Tolles & Olson LLP for Defendants-Appellees

Author of Opinion: Judge Rakoff

Case Alert Circuit Supervisor:
Emily Gold Waldman

    Posted By: Emily Waldman @ 02/11/2017 05:21 PM     2nd Circuit     Comments (0)  

February 9, 2017
  Coutard v. Municipal Credit Union - Second Circuit
Headline: Second Circuit Vacates Grant of Summary Judgment to Employer who Denied FMLA Leave To Employee to Care for Grandparent

Area of Law: Employment

Issue Presented: Whether an employee gave sufficient notice for FMLA leave when it informed its employer that it needed leave to take care of a sick grandparent but not that the grandparent was in loco parentis.

Brief Summary: The Second Circuit vacated a decision by the United States District Court for the Eastern District of New York which had granted summary judgment to the Municipal Credit Union (MCU), an employer, who was sued by its employee alleging MCU improperly denied him leave to care for his grandfather under the Family and Medical Leave Act of 1993 ("FMLA"). In seeking leave, the employee had notified MCU that his grandfather was sick, but did not specify that his grandfather was in loco parentis, which would have entitled him to leave to care for him under the FMLA. The Second Circuit held that the case should not have been dismissed because an employer is obligated to inquire further whether an employee is entitled to FMLA once the employer has received sufficient information from the employee that he or she may be entitled to leave.

To read the full opinion, go to:
http://www.ca2.uscourts.gov/de...4ff747ac304/1/hilite/

Extended Summary: The Second Circuit Court of Appeals reversed a judgment of the United States District Court for the Eastern District of New York regarding an interpretation and application of the Family and Medical Leave Act of 1993 ("FMLA"), 29 U.S.C. § 2601 et seq. The plaintiff, Frantz Coutard, was employed by the defendant, Municipal Credit Union ("MCU"). As defined under the FMLA, MCU is an "employer" and Coutard is an "employee," to which the FMLA applies. Coutard sought leave from his job at MCU to take care of his seriously ill grandfather, who raised him as a child in loco parentis. Under the FMLA, employees are entitled to leave in situations when a grandfather who stood in loco parentis to the employee when the employee was a child under the age 18. When seeking leave, however, Coutard did not mention to MCO that his grandfather raised him in loco parentis. Upon Coutard's request, MCU denied leave stating that the FMLA did not cover leave to take care of a grandparent. Coutard stayed home to take care of his sick grandfather, missing work, and MCU terminated his employment.

The district court ruled that Coutard's failure to mention the nature of his relationship with his grandfather was grounds for dismissal of this case. Coutard appealed on the basis that his failure to tell MCU that his grandfather raised him in loco parentis was not dispositive because MCU did not inform its employees that an in loco parentis relationship could entitle them to FMLA leave, did not inquire whether Coutard had such a relationship with his grandfather, and when he requested FMLA leave, MCU responded categorically that FMLA did not entitle him to such leave to care for a grandparent. In response, MCU maintained that it is the employee's burden, at the time the request for leave is made, to provide all the facts needed to show the employee is entitled to leave.

The Department of Labor regulations, promulgated pursuant to the FMLA, 29 C.F.R. § 825.303(a) and (b) state that: "[a]n employee shall provide sufficient information for an employer to reasonably determine whether the FMLA may apply to the leave request. . . . When an employee seeks leave for the first time for a FMLA-qualifying reason, the employee need not expressly assert rights under the FMLA or even mention the FMLA. . . . The employer will be expected to obtain any additional required information through informal means."

Based on this regulation, the Second Circuit ruled that the obligation of an employee to give notice of his need for FMLA leave is not the obligation to provide the employer with all the necessary details for a definitive determination of the FMLA's applicability. Rather, the court found, in the absence of a request for additional information, an employee provides sufficient notice to its employer if the notice reasonably indicates that the FMLA may apply. The Second Circuit therefore held that the district court erred in ruling the Coutard's notice to MCU was deficient because he failed to specify that in loco parentis relationship with his grandfather at or before his request for FMLA leave and found that the burden was on MCU to request additional information to determine if Coutard was eligible for FMLA leave. Accordingly, the grant of summary judgment by the district court was vacated and the case was remanded for further proceedings.

To read the full opinion, go to:
http://www.ca2.uscourts.gov/de...4ff747ac304/1/hilite/

Panel: Circuit Judges Kearse, Pooler, and Sack

Argument Date: 02/10/2016

Date of Issued Opinion: 02/09/2017

Docket Number: 15-1113

Decided: Vacated and Remanded

Case Alert Author: Leigh Wellington

Counsel: Abdul K. Hassan, Abdul Hassan Law Group for Plaintiff-Appellant; Douglas E. Motzenbecker, Gordon & Rees for Defendant-Appellee.

Author of Opinion: Judge Kearse

Case Alert Circuit Supervisor:
Elyse Diamond

    Posted By: Elyse Diamond @ 02/09/2017 08:32 PM     2nd Circuit     Comments (0)  

January 25, 2017
  Microsoft Corp. v. United States - Second Circuit
Headline: In Split, Second Circuit Declines to Rehear Case; Prior Decision Granted Motion to Quash Warrant to Compel Microsoft Corporation to Disclose Contents of E-Mails Thought to Contain Evidence of Criminal Activity Stored on Foreign Server

Area of Law:
Fourth Amendment; Search Warrants; Technology

Issue(s) Presented: Whether a full panel of the Second Circuit should rehear a motion, granted in the prior opinion, to quash a warrant issued by the United States government to Microsoft seeking to compel it to disclose private e-mails stored on a server in Ireland.

Brief Summary:
A magistrate judge issued a warrant sought by the United States government under the Stored Communications Act (SCA) requiring Microsoft Corporation, a domestically-incorporated company, to reveal the contents of private e-mails stored on a server in Ireland, but accessible by Microsoft on servers in the United States, based upon probable cause that those e-mails contained evidence of criminal activity. The United States District Court for the Southern District of New York denied Microsoft's motion to quash the warrant, but a majority panel of the Second Circuit reversed, finding that the warrant was an unlawful extraterritorial application of the SCA. The United States moved for a rehearing by the full Second Circuit court. In a four-to-four split decision, with one concurring and four dissenting written opinions, the Second Circuit denied rehearing en banc.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...60619213ece/2/hilite/

Extended Summary:
The United States sought a warrant under the Stored Communications Act to obtain private emails that it believed contained evidence of criminal activity. The warrant was issued by a neutral magistrate judge of the United States District Court for the Southern District of New York upon a showing of probable cause. The warrant directed Microsoft Corporation, a United States corporation and service provider, to use its computer portal in Redmond, Washington to access and disclose the contents of specific e-mails that were stored on servers in Ireland. Microsoft moved to quash the warrant, and the United States District Court for the Southern District of New York denied Microsoft's motion. The original panel majority of the Second Circuit reversed the district court's decision and quashed the warrant on the ground that the warrant "was an extraterritorial application of the SCA." On the government's motion for rehearing en banc, a split four-four court declined to rehear the case. Five judges issued written opinions in the denial including Judge Carney, who concurred in the denial of rehearing, and Judges Jacobs, Cabranes, Raggi, and Droney who each issued a written dissent.

In concurring, Judge Carney wrote that the majority panel's decision to quash the government's search warrant was required under the plain language of the SCA and governing Supreme Court precedent. Specifically, given the Act's language indicating Congress's intent that the Act's warrant procedures not apply extraterritorially, Supreme Court precedent dictated that the court examine whether execution of this warrant - seeking private customer electronic data stored on servers in Ireland - would constitute an improper extraterritorial application of the SCA in light of the statute's "focus." The original panel majority found that the SCA's "focus" to be privacy protections, and the "locus" of those protections to be the place of data storage - Ireland in this case. Although agreeing with the majority in light of existing law, Judge Carney cited the challenge of balancing the needs of law enforcement with citizens' privacy in the age of modern technology and emphasized the need for congressional revision to the SCA to more effectively balance these concerns. She also highlighted sovereignty concerns with the United States accessing data of a foreign citizen in a foreign country.

In his dissent, Judge Jacobs accepted that the SCA was not intended to apply extraterritorially, but had hoped to rehear the case because, he argued, no extraterritorial reach was required in this case because the data sought was easily accessible via Microsoft's computer portals within the United States and would be delivered there. Judge Jacobs called the original majority panel's approach, which evaluated where the data was stored or located, as if it were a tangible object "unmanageable and increasingly antiquated."

Judge Cabranes also dissented from the majority's decision to deny rehearing, arguing that the opinion quashing the warrant improperly ignored that Microsoft already lawfully possessed the e-mails, could access them domestically, and would deliver them in the United States, making this a domestic, and not extraterritorial, application of the SCA. He contended that the original decision improperly focused on the storage or retrieval location in evaluating the SCA's privacy focus, rather than where the disclosure of the information would take place. Additionally, Circuit Judge Cabranes worried about the decision's "far reaching" impact on law enforcement's ability to investigate crimes.

In her dissent, Judges Raggi similarly contended that the original Second Circuit majority got the decision wrong, and that the challenged warrant applied the SCA domestically because the warrant was served on Microsoft and required delivery in the United States. She went further in challenging whether "privacy" was even the focus of the SCA. Judge Raggi notably emphasized the "disturbing consequences" of the original panel's decision to quash the warrant. Judge Droney remarked on the difficulty of the task that confronted the original Second Circuit panel in attempting to apply the SCA, drafted long ago, in the age of modern technology, but agreed with the other dissenters, that a rehearing en banc should have been granted because this did not constitute an extraterritorial application of the SCA.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...60619213ece/2/hilite/

Panel: Chief Judge Katzmann and Circuit Judges Jacobs, Cabranes, Raggi, Hall, Chin, Carney, and Droney

Date of Issued Opinion: 01/24/17

Docket Number: No. 14-2985

Decided: Rehearing en banc denied

Case Alert Author: Samantha Hazen

Counsel: E. Joshua Rosenkranz, Orrick, Herrington & Sutcliffe LLP (Robert M. Loeb and Brian P. Goldman, Orrick, Herrington & Sutcliffe LLP, New York, NY; Guy Petrillo, Petrillo Klein & Boxer LLP, New York, NY; James M. Garland and Alexander A. Berengaut, Covington & Burling LLP, Washington, DC; Bradford L. Smith, David M. Howard, John Frank, Jonathan Palmer, and Nathaniel Jones, Microsoft Corp., Redmond, WA; on the brief), for Appellant, Justin Anderson, Assistant United States Attorney (Serrin Turner, Assistant United States Attorney, on the brief), for Preet Bharara, United States Attorney for the Southern District of New York, New York, NY, Brett J. Williamson, David K. Lukmire, Nate Asher, O'Melveny & Myers LLP, New York, NY; Faiza Patel, Michael Price, Brennan Center for Justice, New York, NY; Hanni Fakhoury, Electronic Frontier Foundation, San Francisco, CA; Alex Abdo, American Civil Liberties Union Foundation, New York, NY; for Amici Curiae Brennan Center for Justice at NYU School of Law, American Civil Liberties Union, The Constitution Project, and Electronic Frontier Foundation, in support of Appellant, Kenneth M. Dreifach, Marc J. Zwillinger, Zwillgen PLLC, New York, NY and Washington, DC, for Amicus Curiae Apple, Inc., in support of Appellant, Andrew J. Pincus, Paul W. Hughes, Mayer Brown LLP, Washington, DC, for Amici Curiae BSA | The Software Alliance, Center for Democracy and Technology, Chamber of Commerce of the United States, The National Association of Manufacturers, and ACT | The App Association, in support of Appellant, Steven A. Engel, Dechert LLP, New York, NY, for Amicus Curiae Anthony J. Colangelo, in support of Appellant, Alan C. Raul, Kwaku A. Akowuah, Sidley Austin LLP, Washington, DC, for Amici Curiae AT&T Corp., Rackspace US, Inc., Computer & Communications Industry Association, i2 Coalition, and Application Developers Alliance, in support of Appellant, Peter D. Stergios, Charles D. Ray, McCarter & English, LLP, New York, NY and Hartford, CT, for Amicus Curiae Ireland, Peter Karanjia, Eric J. Feder, Davis Wright Tremaine LLP, New York, NY, for Amici Curiae Amazon.com, Inc., and Accenture PLC, in support of Appellant, Michael Vatis, Jeffrey A. Novack, Steptoe & Johnson LLP, New York, NY; Randal S. Milch, Verizon Communications Inc., New York, NY; Kristofor T. Henning, Hewlett‐Packard Co., Wayne, PA; Amy Weaver, Daniel Reed, Salesforce.com, Inc., San Francisco, CA; Orin Snyder, Thomas G. Hungar, Alexander H. Southwell, Gibson, Dunn & Crutcher LLP, New York, NY; Mark Chandler, Cisco Systems, Inc., San Jose, CA; Aaron Johnson, eBay Inc., San Jose, CA, for Amici Curiae Verizon Communications, Inc., Cisco Systems, Inc., Hewlett‐Packard Co., eBay Inc., Salesforce.com, Inc., and Infor, in support of Appellant, Laura R. Handman, Alison Schary, Davis Wright Tremaine LLP, Washington, DC, for Amici Curiae Media Organizations, in support of Appellant, Philip Warrick, Klarquist Sparkman, LLP, Portland, OR, for Amici Curiae Computer and Data Science Experts, in support of Appellant, Owen C. Pell, Ian S. Forrester, Q.C., Paige C. Spencer, White & Case, New York, NY, for Amicus Curiae Jan Philipp Albrecht, Member of the European Parliament, in support of Appellant, Owen C. Pell, Ian S. Forrester, Q.C., Paige C. Spencer, White & Case, New York, NY; Edward McGarr, Simon McGarr, Dervila McGirr, McGarr Solicitors, Dublin, Ireland, for Amicus Curiae Digital Rights Ireland Limited, National Council for Civil Liberties, and The Open Rights Group, in support of Appellant.

Author of Opinion(s): Denial en banc (Circuit Judge Carney concurring; Circuit Judges Jacobs, Cabranes, Raggi, and Droney dissenting)

Circuit:
2nd Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 01/25/2017 07:27 AM     2nd Circuit     Comments (0)  

December 6, 2016
  United States of America v. Gilliam
Headline: Second Circuit Affirms That in "Exigent Circumstances," GPS Information Information Can Be Obtained and Used Without a Warrant to Locate a Suspect

Area of Law: Criminal Procedure

Issue Presented: Whether, in exigent circumstances, information from a global positioning system in a phone can be obtained and used without a warrant to locate a suspect.

Brief Summary: Jabar Gilliam appealed from a judgment of the United States District Court for the Southern District of New York, convicting him after a jury trial of offenses concerning sex trafficking of a minor and sentencing him to 240 months of imprisonment. Gilliam had been employing a minor to work for him as a prostitute in Maryland, and then brought her to the Bronx for her to continue working as a prostitute there. The authorities were informed that she was missing from home and eventually discovered Gilliam's identity. They believed and had testimony indicating that he had taken her with the intention to force her into prostitution. Authorities then contacted Sprint Corporation ("Sprint"), a telecommunications company and requested Global Positioning System ("GPS") location information for Gilliam's cellphone, stating that the request was due to an exigent situation involving immediate danger of death or serious bodily injury to a person. Sprint complied with this request and Gilliam was found, arrested and convicted. Gilliam's primary contention in this appeal was that the district court had erred in denying his motion to suppress his cell phone's location information. The Second Circuit held that the District court did not err, based on both statutory and constitutional interpretation. The first statutory question was whether the language "other information" in 18 U.S.C. § 2702(c)(4), allowed for the disclosure of GPS location information. The court held in the affirmative. The second statutory question and the constitutional question hinged on whether the circumstances presented to Sprint could qualify as an exigent circumstance that would permit a warrantless search. Again, the Second Circuit held in the affirmative and finding that exigent circumstances were demonstrated because the evidence available to law enforcement at the time of the search for Gilliam's location was compelling and involved danger of serious physical injury to the minor. Thus, the Second Circuit affirmed the judgment of the District Court.

Extended Summary: Jabar Gilliam appeals from a January 28, 2015, judgment of the District Court for the Southern District of New York, convicting him after a jury trial of offenses concerning sex trafficking of a minor and sentencing him to 240 months of imprisonment.

Gilliam met the minor, a girl known as Jasmin in Maryland in late October or early November 2011. She was sixteen at the time, but told Gilliam that she was seventeen. Gilliam asked Jasmin to work for him as a prostitute after she told him she was working for another pimp. Gilliam told Jasmin that he was going to take her to New York, where she could work for him.

Jasmin worked for Gilliam as a prostitute in Maryland in November 2011. On November 30, Gilliam brought Jasmin to New York City after threatening to require her fifteen-year-old sister to work as a prostitute for him if Jasmin refused to go. Gilliam purchased Jasmin's bus ticket for the trip, and on the ride to New York City, Gilliam told Jasmin to sit near the window and then made sure she couldn't get out of her seat by putting his legs up beside her. Jasmin worked as a prostitute for Gilliam in the Bronx, giving him all the money that she earned.

On November 30, Jasmin's foster mother reported to the Sheriff's Office in Frederick County, Maryland, that Jasmin was missing from home. The foster mother told authorities that Jasmin had mentioned a "boyfriend," who was known to her as "Jabar," and who was later identified as Gilliam. On December 2, the case was referred to the Maryland State Police, and Corporal Chris Heid was assigned to investigate.

Corporal Heid spoke with Jasmin's social worker, who expressed concern that Jasmin was being forced into prostitution by Jabar Gilliam. This concern was based of conversations with Jasmin's biological mother. Heid then spoke to Jasmin's biological mother, who affirmed this information and stated that Gilliam had communicated with her directly and told her that he was planning to take Jasmin to New York so that she could work there as a prostitute.

After this conversation and based on the information he had received, Heid contacted Sprint and told Sprint that he was "investigating a missing child who is . . . being prostituted," and requested GPS location information for Gilliam's cell phone. Heid said that he was making the request because of "an exigent situation involving . . . immediate danger of death or serious bodily injury to a [] person." Sprint complied with Heid's request and began providing real-time GPS location information to the Maryland State Police, which passed the information on to the FBI and the New York City Police Department ("NYPD)."

On December 2, Jasmin placed a phone call to her biological mother from the Bronx apartment of Gilliam's mother. NYPD officers were dispatched to that apartment and questioned Gilliam's mother. After which location information provided by Sprint indicated that Gilliam's cell phone was a few blocks away. NYPD officers subsequently canvassed the neighborhood and saw Gilliam and Jasmin on the street. The officers then confronted Gilliam, he attempted to flee, and was arrested. Gilliam was charged in Count One with sex trafficking of a minor by force, fraud, or coercion in violation of 18 U.S.C. §§ 1591(a), (b)(1), and (b)(2), and in Count Two with transporting a minor in interstate commerce for purposes of prostitution in violation of 18 U.S.C. § 2423(a). Gilliam was convicted on both counts after a jury trial and by judgment, dated January 28, 2015, sentenced to imprisonment for 240 months.

Gilliam appealed the judgment. Gilliam's primary contention in this appeal was that the District Court had erred in denying his motion to suppress his cell phone's location information, which had been supplied, at the Government's request, by a Sprint. The Second Circuit held that the District court did not err.

In coming to this decision the Second Circuit focused on two statutory questions and a constitutional question. The first question was whether the language "other information" in 18 U.S.C. § 2702(c)(4), allowed for the disclosure of GPS location information. The section states that: A provider . . . may divulge a record or other information pertaining to a subscriber . . . (not including the contents of communications covered by [other subsections]) - . . .
(4) to a governmental entity, if the provider, in good faith, believes that an emergency involving danger of death or serious physical injury to any person requires disclosure without delay of information relating to the emergency.
In determining whether "other information" included GPS location information the Second Circuit looked at the legislative history of 18 U.S.C. § 2702(c)(4) and persuasive authority from district courts. The legislative history of the subsection states that Congress intended "other information" to cover "information about the customer's use of the service." Additionally, district courts under 18 U.S.C. § 2703, a statute different from, albeit, similarly written and closely related to, section 2702, had found that "other information" did include GPS location information. Thus, the Second Circuit similarly held that "other information" did include GPS information from a phone.

The second question was whether the circumstances presented to Sprint showed "an emergency involving danger of . . . serious physical injury to any person." This question also tied into a constitutional question, concerning whether Gilliam's Forth Amendment rights were violated by Sprint's disclosure at the request of a law enforcement officer and the use of that information to locate and arrest Gilliam without a warrant. Both the second statutory question and the Fourth Amendment issue turned on whether the circumstances known to law enforcement and presented to Sprint were within the category of "exigent circumstances" that permit warrantless searches. The Second Circuit found that the District Court did not err in finding that exigent circumstances did exist because the evidence available to law enforcement at the time of the search for Gilliam's location was compelling. They based this on Heid's discussions with Jasmin's foster mother, social worker, and biological mother, which demonstrated that law enforcement had a substantial basis to believe that Gilliam was bringing Jasmin to New York City to require her to work there as a prostitute. This kind of sexual exploitation of a minor has often been found to pose a significant risk of serious bodily injury and thus could be seen as an exigent circumstance.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...9a50e0d4b122/2/hilite/ (could not get hyperlink to work for me)

Panel: Circuit Judges Newman, Winter, Cabranes

Argument Date: 9/29/2016

Date of Issued Opinion: 12/1/2016

Docket Numbers: 15-387

Decided: Affirmed.

Case Alert Author: Brian Bendy

Counsel: Robert A. Culp, Law Office of Robert A. Culp, Garrison, NY, for Appellant; Kristy J. Greenberg, Asst. U.S. Atty., New York, NY (Preet Bharara, U.S. Atty., Adam S. Hickey, Asst. U.S. Atty., New York, NY, on the brief), for Appellee.

Author of Opinion: Judge Newman

Circuit: Second Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 12/06/2016 08:26 AM     2nd Circuit     Comments (0)  

November 10, 2016
  Upstate Citizens for Equality v. United States of America - Second Circuit
Headline: Second Circuit Affirms District Court's Finding that Entrustment of New York Oneida Indian Nation Land to Federal Government for Tribe's Benefit and Use was Constitutional

Area of Law: Constitutional

Issue Presented: Was the entrustment of Indian land under the Indian Reorganization Act of 1934 permissible if neither the Indian tribe nor the government continuously held or supervised the land?

Brief Summary: The Oneida Indian Nation Tribe ("the Tribe") sought to have a portion of central New York land held in trust for the Tribe's benefit by the federal government pursuant to § 5 of the Indian Reorganization Act of 1934 to, among other things, allow the Tribe to continue operating its Turning Stone Casino on part of that land. In May of 2008, the Department of the Interior accepted 13,000 acres of central New York land into trust for the Tribe. Plaintiffs, local New York towns and residents, filed suit claiming that the entrustment process was unconstitutional and infringed on New York State's sovereignty. The United States District Court for the Northern District of New York granted the federal government's motion for summary judgment. On the plaintiffs' appeal, the Second Circuit affirmed. The Second Circuit held that the federal government has broad authority in dealing with Indian affairs and the entrustment for the Tribe's benefit was proper even if all of the land sat within a single state and the federal supervision of the land was not continuous, and the entrustment did not violate the United States Constitution's Enclave Clause - which requires state consent for certain federal assertions of jurisdiction over state land - because the federal government does not have "exclusive" jurisdiction over the land in question.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...1d2b862d310/1/hilite/

Extended Summary: The Oneida Nation Tribe ("the Tribe") is a federally recognized Indian tribe situated in central New York. Under the 1788 Treaty of Fort Schuyler, the Tribe sold all but 300,000 acres of their land to New York. In 1794, the federal government entered into the Treaty of Canandiagua, which acknowledged the Treaty of Fort Schuyler, and guaranteed the free use and enjoyment of the reservation for the Tribe. The Tribe continued, however, to sell portions of their land leaving only 32 acres remaining by 1920.

In the 1990s, the Tribe began acquiring parcels of land that were originally party of the Tribe's reservation, eventually opening the Turning Stone Resort Casino on their land. In an earlier action by the town where the casino is located to evict the Tribe from the land for nonpayment of property taxes, the Second Circuit held that because the land was originally part of the earlier treaties, the Tribe was exempt from state property taxes. The United States Supreme Court disagreed, but suggested that the Tribe utilize § 5 of the Indian Reorganization Act of 1934 ("IRA"), which would allow the Tribe to reestablish sovereign authority over the territory by allowing the land to be "taken in the name of the United States in trust for the [] Tribe." 25 U.S.C. § 465. In May 2008, upon the Tribe's request, the Department of the Interior announced its decision to accept approximately 13,000 acres of the land into trust.

Plaintiffs, two New York towns, select residents, and a civic organization, challenged the Secretary of the Interior's decision in federal district court. The United States District Court for the Northern District of New York granted the government's motion for summary judgment on the plaintiffs' claims that the land-into-trust mechanism was unconstitutional and infringed on state sovereignty in addition to asserting the Department of the Interior did not have the authority to take lands in trust for the Tribe.

Plaintiffs argued that the Indian Commerce Clause did not permit the federal government to take action when the action would take place entirely within a single state. The Second Circuit rejected this argument, noting the exceptionally broad power of the federal government in the context of Indian affairs and, citing Supreme Court's 1989 decision in Cotton Petroleum Corp. v. New Mexico, distinguished between the Commerce Clause and the Indian Commerce Clause - finding the latter not containing an implicit "interstate" limitation.

Additionally, Plaintiffs asserted that the federal entrustment, by requiring the state to cede some of its authority to the federal and tribal governments, unconstitutionally infringed on New York's sovereign rights. The Second Circuit held that even though the federal supervision of the Tribe's land was not continuous, it did not preclude Congress from acquiring the land on behalf of the Tribe, even if New York lost some of its governmental power over the land, citing another Supreme Court decision that highlighted the broad federal power to deal with Indian affairs.

The Plaintiffs also argued that the Enclave Clause required Congress to obtain the state legislature's express consent before taking land into trust for Indians. The rarely invoked Enclave Clause ensures that "places on which the security of the entire Union may depend [are not] in any degree dependent on a particular member of it." The Second Circuit found the Enclave Clause inapplicable, however, because it requires that the federal government have "exclusive" jurisdiction for the clause to apply and states still maintain some jurisdiction over the land in trust.

Finally, the Second Circuit found the Plaintiffs assertions that the Tribe was not eligible to be the beneficiary of land entrustment based on the interpretation of "Indians" and "tribe" unpersuasive. The Second Circuit affirmed the district court's judgment that the entrustment of the Tribe's land was proper.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1d2b862d310/1/hilite/

Panel: Circuit Judges Livingston, Chin, and Carney

Argument Date: 5/3/2016

Date of Issued Opinion: 11/9/2016

Docket Numbers:
15-1688, 15-1726

Decided: Affirmed.

Case Alert Author: Scott L. Wenzel

Counsel: David Brown Vickers, for Upstate Citizens for Equality, Inc.; Cornelius D. Murray, O'Connell and Aronowitz, for Town of Vernon, Town of Verona, Abraham Acee, and Arthur Strife; J. David Gunter, United Sates Department of Justice, for the United States of America, Sally M.R. Jewell, Micahel L. Conner, and Elizabeth J. Klein.

Author of Opinion: Judge Carney

Circuit: Second Circuit

Case Alert Circuit Supervisor:
Elyse Diamond

    Posted By: Elyse Diamond @ 11/10/2016 11:07 AM     2nd Circuit     Comments (0)  

November 7, 2016
  Friends of The East Hampton Airport, Inc. v. Town of East Hampton
Headline: Second Circuit Enjoins Three East Hampton Airport Noise-Control Laws

Area of Law: Aviation Law

Issue(s) Presented: Whether a town must comply with the procedural requirements of the Airport Noise and Capacity Act when enacting new laws for its airport, even if it is willing to forgo future federal funding for the airport.

Brief Summary: In order to reduce airport noise at its local public airport, the Town of East Hampton passed three laws: (1) a mandatory curfew on airport use from 11:00 p.m. to 7:00 a.m.; (2) an extended curfew on noisy aircrafts from 8:00 p.m. through 9:00 a.m.; and (3) a one round-trip limit-per- week on noisy aircrafts' airport use during a particular season. A group of plaintiffs, consisting of aviation businesses that use the East Hampton Airport, filed suit in the United States District Court for the Eastern District of New York, seeking an injunction against the enforcement of these laws. The district court enjoined one of the three laws, and both sides appealed. The Second Circuit ruled that all three laws should be enjoined because East Hampton had enacted them without complying with the procedural requirements of the Airport Noise and Capacity Act of 1990. The court rejected East Hampton's argument that it could avoid those requirements by disavowing future federal funding. To read the whole opinion, please visit http://www.ca2.uscourts.gov/de...a5bc5a7cdb6/2/hilite/

Extended Summary: The Town of East Hampton owns and operates the East Hampton Airport, which has both domestic and international flights. Aside from public use, the airport also serves thousands of private aircraft flights. Over the years, town residents complained about the noise emanating from the airport.

In 2014, the Town held public meetings and conducted a three-phase study, focusing on the main sources of the airport noise and determining which times of the year generated the most noise complaints from town citizens. As a result, the Town enacted three new laws: (1) a mandatory curfew on airport use from 11:00 p.m. to 7:00 a.m. (2) an extended curfew on noisy aircrafts from 8:00 p.m. through 9:00 a.m. (3) a one round-trip limit-per- week on noisy aircrafts' airport use during a particular season. In so doing, the Town did not comply with the procedural requirements of the Airport Noise and Capacity Act of 1990 ("ANCA"), which established a "national aviation noise policy" that applied to aircraft noise restrictions.

On April 21, 2015, five days after the Town enacted the laws, various aviation businesses filed suit in the U.S. District Court for the Eastern District of New York against the Town for declaratory and injunctive relief. Specifically, the businesses sought to prevent enforcement of the laws, arguing that the laws violated the ANCA's procedural requirements. The district court enjoined enforcement of one of the laws, and both sides appealed.

At the outset, the Second Circuit found that the aviation businesses had equitable jurisdiction to challenge the Town's laws. The court then concluded that all three laws should be enjoined, because the ANCA's procedural requirements - which the Town acknowledged had not been followed--applied to any public airports, regardless of federal funding status. The Town's disavowal of future federal funding for the airport was thus irrelevant. The court also looked outside of the statute's text, finding that legislative history and other regulations also mandated the same result. Congress was concerned with the uncoordinated response to airport noise complaints, which led Congress to regulate noise control at the national level. Thus, since the laws did not comply with ANCA's procedures, they were federally preempted and subject to the preliminary injunction sought by the plaintiffs.

Panel: Circuit Judges Jacobs, Calabresi, and Raggi

Argument Date: 06/20/16

Date of Issued Opinion: 11/04/16

Docket Number: Nos. 15-2334-cv(L), 15-2465-cv(XAP)

Decided: Affirmed in part, vacated in part, and remanded

Case Alert Author: Samantha Hazen

Counsel: Kathleen M. Sullivan, W. Eric Pilsk, Kaplan, Kirsch & Rockwell, LLP, David M. Cooper, Quinn Emanuel Urquhart & Sullivan, LLP, for Defendant-Appellant-Cross Appellee, Lisa R. Zornberg, Helen A. Gredd, Jonathan D. Lamberti, Lankler Siffert & Wohl LLP, for Plaintiffs-Appellees-Cross-Appellants, Lauren L. Haertlein, General Aviation Manufacturers Association, Amicus Curiae in support of Plaintiffs-Appellees-Cross-Appellants

Author of Opinion: Circuit Judge Raggi

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 11/07/2016 09:57 AM     2nd Circuit     Comments (0)  

November 2, 2016
  Chauca v. Abraham - Second Circuit
Headline: Second Circuit Certifies Question of Punitive Damages Standard for Discrimination Suits Under New York City Human Rights Law to Court of Appeals

Area of Law: Employment Discrimination

Issue(s) Presented: What is the standard for a punitive damages award for unlawful discriminatory acts in violation of the NYCHRL.

Brief Summary: Plaintiff-Appellant Chauca took maternity leave from her job as a physical therapy aid in 2009. Upon her scheduled return, her employer informed her that her services were no longer needed. Chauca filed a charge with the Equal Employment Opportunity Commission ("EEOC") and ultimately brought suit in the United States District Court for the Eastern District of New York alleging sex and pregnancy discrimination under federal and state law as well as under the New York City Human Rights Law (NYCHRL). She prevailed at trial with a jury award of $10,500 in lost compensation and $50,000 for pain and suffering. Chauca now appeals the denial of a jury instruction on punitive damages, arguing that the district court failed to construe the NYCHRL's standard for punitive damages "liberally." This court analyzes her question, and certifies this question to the New York Court of Appeals for more guidance.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...9c9bb380976/1/hilite/

Extended Summary: Plaintiff-Appellant Veronika Chauca began working for Defendant-Appellee Park Management Systems in 2006 as a physical therapy aid. In July 2009, she informed her supervisors that she was pregnant and would be taking maternity leave with a scheduled return in late November, which they approved. During her time away, another aide handled Chauca's duties. Shortly before her scheduled return, she contacted the office to remind them and got the runaround. She was ultimately told by the Office Supervisor, Ann Marie Garriques, that "we no longer need your services." Later, Chauca's supervisors, Dr. Jamil Abraham and Garriques, claimed that Chauca was not brought back because of a business slowdown despite evidence that most other employees maintained a steady work schedule.

In December 2009, Chauca filed a charge with the Equal Employment Opportunity Commission ("EEOC") alleging pregnancy discrimination and, after receiving an EEOC notice of right to sue, brought an action against her employer, and her supervisors individually, in the United States District Court for the Eastern District of New York alleging sex and pregnancy discrimination in violation of the federal Pregnancy Discrimination Act, part of Title VII of the Civil Rights Act of 1964, as well as under New York State and New York City Human Rights Law (NYCHRL). Chauca sought compensatory and punitive damages, the latter of which is the focus of this current dispute.

At trial, the district court declined to provide a punitive damages instruction to the jury over plaintiff's objection. While recognizing that the NYCHRL calls for a liberal construction of its provisions, the district court found that Chauca did not put forward any evidence that her employer had intentionally discriminated with "malice" or with "reckless indifference" to her protected rights. The jury returned a verdict in Chauca's favor, awarding $10,500 in lost compensation and $50,000 for pain and suffering. Chauca now appeals the denial of a jury instruction on punitive damages, arguing that the district court improperly construed the NYCHRL standard for punitive damages by requiring a showing of malice or reckless indifference as required by federal law.

Under Title VII, "[p]unitive damages are limited . . . to cases in which the employer has engaged in intentional discrimination and has done so 'with malice or with reckless indifference to the federally protected rights of an aggrieved individual.'" In a 2001 decision, the Second Circuit applied the federal standard to claims for punitive damages arising under the NYCHRL. However, in 2005, the New York City Council amended the City's Administrative Code by passing the Restoration Act which sought to clarify the "uniquely broad and remedial purposes of the NYCHRL, and expressly provides that the NYCHRL "be construed liberally, . . . regardless of whether federal or New York State civil and human rights laws, including those with provisions comparably-worded to the provisions of [the NYCHRL] have been so construed." Since then, New York courts have repeatedly determined that NYCHRL claims must be analyzed separately and independently from any federal and state law claims, but no decision has specifically addressed the proper standard for awarding punitive damages under the NYCHRL and the Restoration Act does not make any specific reference to punitive damages.

The Second Circuit concluded that the question should be certified to the New York Court of Appeals, finding that existing New York case law does not "provide definitive guidance" on the appropriate standard for a punitive damages award for unlawful discriminatory acts in violation of the NYCHRL, that this is an issue of importance to the state, and that certification was proper because the answer to the question would resolve the litigation.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...9c9bb380976/1/hilite/

Panel:
Chief Judge Katzmann, Circuit Judges Sack and Hall.

Argument Date: 09/09/2016

Date of Issued Opinion: 11/1/2016

Docket Number: No. 15-1777

Decided: Certified Appeal

Case Alert Author: Robyn Downing

Counsel: Stephen Bergstein, Bergstein & Ullrich, LLP, for Plaintiff-Appellant
Arthur H. Forman, for the Defendants-Appellees

Author of Opinion: Chief Judge Katzmann

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond

    Posted By: Elyse Diamond @ 11/02/2016 08:51 AM     2nd Circuit     Comments (0)  

October 26, 2016
  EMI Christian Music Grp., Inc. et al. v. MP3tunes, LLC et al.
Headline: Second Circuit Vacates District Court's Interpretation of "Repeat Infringer" Under the Digital Millennium Copyright Act

Area of Law: Copyright

Issues Presented: Are internet users who download or copy songs for personal entertainment purposes "repeat infringers" under the safe harbor provision of the DMCA?

Brief Summary: MP3tunes operated two websites: MP3tunes.com and sideload.com. MP3tunes.com was primarily a "locker storage" service, which allowed users to store their music on the MP3tunes server and access it from internet-connected devices. Sideload.com provided a search function to users, allowing them to locate free music on the internet. Sideload.com contained a plug-in allowing users to upload music they found to their MP3tunes.com "locker." Music located in MP3tunes.com users' lockers was also searchable by Sideload.com. A group of record companies and music publishers filed a copyright infringement lawsuit against MP3tunes and its CEO, Michael Robertson. On cross motions for summary judgment, a district court for the Southern District of New York granted the motion in part, finding that MP3tunes qualified for safe harbor protection under the Digital Millennium Copyright Act ("DMCA") because MP3tunes reasonably implemented a "repeat infringer" policy. The Second Circuit found the District Court had construed too narrowly the definition of "repeat infringer" and vacated the District Court's grant of partial summary judgment. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...33068d9fd4f/1/hilite/


Extended Summary: MP3tunes was founded in 2005 by Michael Robertson. MP3tunes operated two websites. The first, MP3tunes.com, evolved into a "locker storage" service for its users. MP3tunes.com users could upload their songs to the MP3tunes.com server and access them from any internet-connected device. Sideload.com, however, provided a search function for free music to its users. Embedded in the sideload.com website was a feature that enabled users to upload music they found to their MP3tunes.com "locker." The addition of songs to individual users' lockers added to the number of searchable songs in sideload.com's index. Songs uploaded to MP3tunes.com lockers from sideload.com also had the benefit of not being counted towards storage allotments for the user. Since sideload.com was the primary driver of traffic to MP3tunes.com, MP3tunes encouraged users to upload songs from their own accounts.

The District Court found that MP3tunes was afforded the safe harbor protection under the DMCA, which the plaintiffs challenged on appeal. The DMCA provides a safe harbor for internet service providers that "adopt[] and reasonably implement[] . . . a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider's system or network who are repeat infringers." 17 U.S.C. § 512(i)(1)(A). Plaintiffs asserted that MP3tunes failed to satisfy the safe harbor requirements relating to users who created links to infringing content in the sideload.com index.

The District Court found that users who downloaded or copied "songs from third-party sites for their personal entertainment" could not be "repeat infringer[s]." Furthermore, the District Court found that only users who uploaded content are "blatant infringers that internet service providers are obligated to ban from their websites."

The Second Circuit rejected the District Court's definition of "repeat infringer." The DMCA does not define "repeat infringers." Accordingly, the Second Circuit analyzed the term given its ordinary meaning, finding that repeatedly uploading or downloading copyrighted material for personal use does suffice to be found a "repeat infringer." The broader reading of "repeat infringer" is also supported by the structure and context of the DMCA, which relieves service providers from needing to ascertain the users' knowledge to qualify for the safe harbor provision. The Second Circuit also found the legislative history to be in accord with the broader reading of "repeat infringer," while no other circuit had constrained the definition of "repeat infringer" to encompass only willful infringers.

On the motion for summary judgment, MP3tunes offered evidence that they had terminated 153 users who shared their MP3tunes.com passwords. Plaintiffs, however, showed that MP3tunes took no action to try and connect infringing activity (which MP3tunes learned about through various takedown notices) and users who created links to that content. Therefore, a jury could reasonably infer that MP3tunes knew - or consciously avoided knowing - of specific repeat infringers and failed to take action. Accordingly, the Second Circuit vacated the District Court's finding and remanded the case for further proceedings.

Panel: Circuit Judges Cabranes, Straub, and Lohier

Argument Date: May 11, 2016

Date of Issued Opinion: October 25, 2016

Docket Numbers: 12-4369-cv(L), 14-4509-cv(XAP)

Decided: Affirmed in part, Vacated in part, Reversed in part, and Remanded in part.

Case Alert Author: Scott L. Wenzel

Counsel: Andrew H. Bart, Jenner & Block LLP for Plaintiffs-Appellees-Cross-Appellants; Ira S. Sacks, Ackerman LLP for Defendant-Appellant-Cross-Appellee.

Author of Opinion: Judge Lohier

Circuit: Second Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/26/2016 08:14 AM     2nd Circuit     Comments (0)  

October 13, 2016
  TCA Television Corp. v. McCollum - Second Circuit
Headline: Second Circuit Holds that Broadway's "Hand of God" Appropriation of "Who's on First?" Routine Was Not Fair Use, But Affirms Dismissal of Copyright Infringement Action on Alternative Invalidity Ground.

Areas of Law: Intellectual Property; Copyright Law

Issue(s) Presented: Whether the defendants' verbatim use of a portion of Abbot and Costello's iconic comedy routine "Who's on First?" in the Broadway produced play "Hand of God" qualified as a non-infringing fair use. Whether plaintiffs' had a valid copyright on "Who's on First?"

Brief Summary: In light of the unauthorized use by defendants, the playwright and producers of the dark comedic Broadway play "Hand of God" of a verbatim portion of the iconic comedy sketch "Who's on First?," the successors in interest to the estates of William "Bud" Abbott and Lou Costello - plaintiffs herein - commenced an action for copyright infringement in the Southern District of New York, claiming both federal and common law copyright infringement. Upon defendants' Rule 12(b)(6) motion, the district court dismissed the complaint determining that, as a matter of law, defendants' use of the routine constituted a non-infringing fair use of the material. On plaintiffs appeal from this ruling, the Second Circuit concluded that defendants' unauthorized appropriation of "Who's on First?" was not fair use, but, nevertheless, affirmed the judgment below finding that plaintiffs had failed to plead a valid copyright interest. Judgment of dismissal in favor of defendants affirmed.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...2f0f4973f6a/1/hilite/

Extended Summary:
Plaintiffs, successors-in-interest to the estates of William "Bud" Abbott and Lou Costello (the "Artists"), claim to be owners of the copyright to the comedy routine in issue here, "Who's on First?" (also the "Routine") - a treasured piece of American entertainment history, derived from the humorous misunderstandings which take place when a roster of a baseball team is filled with oddly named players such as "Who," "What," and "I Don't Know." "Who's on First?" was first performed in the late 1930s on a live radio broadcast, and was published, for purposes of federal copyright law, when Abbott and Costello performed a version of it in their first motion picture, "One Night in the Tropics ("Tropics") produced by Universal Pictures Company, Inc. ("UPC"). Abbott's and Costello's work with UPC was pursuant to contractual agreements including one executed in November 1940 (the "November Agreement,") days before the release of Tropics which encompassed a multi-year/multi-picture bargain. The contract gave UPC the right to use Abbott's and Costello's materials and routines in connection with any photoplay in which the Artists appeared. However, the Artists expressly reserved the right to use materials and routines created by them, without the assistance of UPC writers, on the radio and in personal appearances. Additionally, in November 1940, UPC registered a copyright for Tropics with the United States Copyright Office, which it timely renewed in December 1967.

Thereafter, in 1945, Abbott and Costello performed an expanded version of "Who's on First?" in another UPC movie, "The Naughty Nineties." That expanded version, while maintaining the core of the Routine - with "Who" on first base, "What" on second, and "I Don't Know" on third - , further included several new players. Here too, UPC registered a copyright for "The Naughty Nineties," and timely renewed it in 1972. Independently, in April 1944, Abbott and Costello also registered with the Copyright Office a work entitled "Abbott and Costello Baseball Routine," indicating that it had been published in March 1944 in "Soldier Shows." This work, however, was never renewed, and entered the public domain in 1972. Finally, in March 1984, a quitclaim agreement (the "Quitclaim") was entered into between Universal Pictures ("Universal") - successor-in-interest of UPC - and Abbott & Costello Enterprises ("A&C), a partnership formed by the heirs of Abbott and Costello, under which all of Universal's rights, title and interest in the Routine were granted by Universal to A&C. Thereafter, A&C dissolved in 1992, with 50% of its assets being transferred to TCA Television Corporation, a California entity owned by Lou Costello's heirs; and the remaining 50% evenly to Bud Abbot's heirs and later transferred to the remaining plaintiffs in the present action.

The defendants include the author and producers of the successful off-Broadway play "Hand to God," a dark comedy set in small-town Texas, in which the main character, a young man, communicates through a hand puppet, which becomes his evil persona. After success off-Broadway, in the spring of 2015 the play opened for previews on Broadway, incorporating, without license or permission, part of the Routine in one of its key scenes. In that scene, which takes place approximately 15 minutes into the play, "Jason," the lead character, in an attempt to impress "Jessica," his romantic interest, performs almost verbatim, a little over a minute of "Who's on First?" At the end of Jason's performance, Jessica asks whether Jason had come up with the routine by himself. Jason's dishonest answer in the affirmative inevitably induces audience laughter, given the familiarity of this iconic routine.

After learning about the unauthorized use of the Routine through press coverage and online promotional materials, and receiving no response to a letter to cease and desist, plaintiffs filed the underlying action in June 2015 in the United States District Court for the Southern District of New York, claiming federal and common law copyright infringement. Defendants moved to dismiss advancing that: plaintiffs did not hold a valid copyright; or, in any event the Routine was in the public domain; and "Hand to God's incorporation of the Routine was sufficiently transformative to qualify as a permissible fair use, not prohibited infringement. The district court granted defendants' motion to dismiss concluding that defendants' use of the Routine in "Hand to God" was a highly transformative and non-infringing fair use. The instant appeal followed.

The Second Circuit's de novo review of the dismissal found error in the district court's finding of fair use as a matter of law. Citing earlier decisions, the court recognized the well-established principle that some opportunity for fair use of copyrighted materials is necessary to promote the Constitutional purpose of progress in science and art. The nonexclusive factors for a clearly established fair use defense, the court noted, have been codified under 17 U.S.C. §107, as follows: 1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; 2) the nature of the copyrighted work; 3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and 4) the effect of the use upon the potential market for or value of the copyrighted work. These factors, the court noted, must be viewed collectively, with their results weighed together.

The Second Circuit found that all four statutory factors weighed in favor of plaintiffs and against a defense of fair use. First, the court found that the defendants' use of the Routine did not appear to fit within any of the statutory categories identified as "most appropriate" for a purpose or character finding indicative of fair use - criticism, comment, news reporting, teaching, scholarship, and research. The court concluded that the district court's reasoning was flawed by identifying only a general artistic and critical purpose and character of the play as a "darkly comedic critique" of the social norms in a small religious town, but failing to explain how defendants' extensive copying was necessary to accomplish such purpose, or how the character of the Routine was transformed by defendants' use. The court noted that challenged works which satisfied the transformative purpose standard are those where a defendant's use of a work has so "heavily obscured and altered" the original work as to make it "barely recognizable" within the new work. In this case, the court found defendants' use of the Routine fell short of this standard, as the used portion was included unaltered. Therefore, the court concluded, such use could not be held to be transformative.

Even when such unaltered uses could be considered fair use when they bore no relationship to the original work, a justification is, the court noted, nevertheless necessary to qualify for a fair use defense. In this case, defendants used the original work for the same central purpose for which it was created - a comedy. Thus, the court found that defendants fell short of satisfying the justification threshold inasmuch as more than the Routine's ability to capture audience attention was necessary to provide a proper justification for defendants' extensive copying of it. Additionally, the court found that defendants' extensive use of the Routine further qualified as commercial exploitation weighing strongly against fair use.

As to the nature of the copyrighted work, the court also found it weighed in favor of plaintiffs herein, inasmuch as the Routine, being an original comedy sketch created for public entertainment, lay at the heart of copyright's intended protection. Moreover, the court rejected defendants' justification that they needed to use an instantly recognizable "cultural" touchstone in the relevant scene. Likewise, looking to the amount and substantiality of the portion of the appropriated material used, the court found that it weighed strongly in favor of plaintiffs because, although it took less than two minutes to perform, it nevertheless constituted the heart of the original work, by revealing the singular joke underlying the entire Routine. Finally, the court found that the district court had erred in concluding that the play's use of the Routine could not reasonably be expected to usurp the market for Abbott and Costello's original performance because the district court had failed to consider the challenged use's "impact on potential licensing revenues for traditional, reasonable, or likely to be developed markets." Since plaintiffs had alleged the existence of a traditional and active derivative market for licensing the Routine, the court also found this factor weighed in plaintiffs' favor.

Notwithstanding the foregoing analysis, the court concluded that the complaint must nevertheless be dismissed because plaintiffs plausibly failed to plead ownership of a valid copyright in the Routine. The court found that contractual agreements with UPC clearly expressed the parties' intent for Abbott and Costello to merely license the use of, and not to assign copyrights in, their existing comedy routines for use in UPC movies in which the Artists appeared. The court found the contract language to be clear and unambiguous, and concluded that Abbott and Costello furnished UPC with their routines for a limited purpose, their use in any movies in which the Artists appeared under the respective agreements. The court also rejected plaintiffs' argument that the Routine was a work made for hire and, thus, should survive by virtue of UPC's timely renewal of the registration of Tropics, finding that the Routine was prepared several years prior to the contracts, and therefore it could not be said to have been made at UPC's instance and expense.

Finally, the Court was not persuaded by plaintiffs' alternative argument under the merger doctrine that, because so much of the Routine was used in the movies, the material "merged" with them making part of the whole protected by UPC's statutory registration and the timely renewal of the copyrights for movies using the Routine. The Court noted that the Routine had been prepared and existed on its own for some years before it was performed in Tropics, and that it had been performed independently from the films thousands of times on the radio and elsewhere. Therefore, the Court concluded that this merger argument must fail.

In conclusion, although rejecting the defendants' fair use defense, the Court nevertheless affirmed the dismissal of the complaint finding it warranted by plaintiffs' failure plausibly to plead ownership of a valid copyright.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...2f0f4973f6a/1/hilite/

Panel: Circuit Judges Jacobs, Calabresi and Raggi

Argument Date: 06/23/2016


Date of Issued Opinion: 10/11/2016

Docket Number: 16-134-cv

Decided: Affirmed

Case Alert Author: Gloria Mejia-Repp

Counsel:
Jonathan D. Reichman, Kenyon & Kenyon LLP, New York, New York, for Plaintiffs-Appellants; Mark J. Lawless, Law Office of Mark J. Lawless, New York, New York, for Defendants-Appellees.

Author of Opinion:
Judge Reena Raggi

Case Alert Circuit Supervisor: Professor Elyse S. Diamond

    Posted By: Elyse Diamond @ 10/13/2016 07:32 AM     2nd Circuit     Comments (0)  

October 3, 2016
  Garnett v. Undercover Officer C0039, et al.
Headline: Second Circuit Holds that Officer's False Account of the Details Surrounding an Arrest--Even When There Was Probable Cause for the Arrest--is Sufficient Basis for a Denial of Fair Trial Claim

Area of Law: Criminal Procedure

Issues Presented: Whether the fair trial right is violated when an officer, after having had probable cause to make an arrest, then fabricates his or her own observations of what occurred and conveys that false account to a prosecutor.

Brief Summary: Kwame Garnett was arrested during an undercover drug "buy and bust" based on Undercover Officer C0039's ("UC 39") personal observations, which included an incriminating statement Garnett allegedly made. Garnett, however, consistently denied making the statement. Garnett was subsequently acquitted in state court. He then filed a Section 1983 action in the Southern District of New York, alleging various claims against UC 39 and others. In particular, he argued that UC 39 had fabricated his account and therefore violated his right to a fair trial. After a jury trial, UC 39 was held liable on that basis, and Garnett was awarded $1 in nominal damages and $20,000 in punitive damages. Both sides appealed: UC 39 argued that the district court erred in denying his motion for judgment as a matter of law; and Garnett argued that the jury instructions were inaccurate. The Second Circuit affirmed the judgment, explaining that its prior precedents about the right to a fair trial meant that even if an officer had probable cause to arrest a defendant, that defendant could later sue for denial of the right to a fair trial based on a "police officer's fabrication of information...[including] when the information fabricated is the officer's own account of his or her observations of alleged criminal activity." To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...e7d40/1/hilite/


Extended Summary: On November 19, 2011, Undercover Officer C0039 ("UC 39") and Undercover Officer C0243 ("UC 243") were involved in a drug "buy and bust" operation in East Harlem. UC 243 was the officer attempting to purchase the drugs while UC 39 was there to provide security for UC 243. UC 243 entered a bodega with two thought-to-be drug dealers, Naquan Cintron and Naim Roper, and purchased small amounts of crack cocaine and marijuana from them. Cintron and Roper were subsequently arrested.

Garnett was also arrested in connection with the drug sale by Cintron and Roper. UC 39 scanned the area while UC 243 was talking with Cintron and Roper and saw Garnett standing outside the bodega. Based on UC 39's experience, he believed Garnett was keeping lookout for police while Cintron and Roper made the drug sale. UC 39, in addition to writing in a "DD-5" complaint follow-up form, told the arresting officer and prosecutor that Garnett entered the bodega during the sale and told Cintron and Roper, "Yo, hurry up.... I'm not looking to get locked up tonight. Let's go." UC 243 testified that he only heard Garnett speak -- not what he said.

Roper and Cintron eventually both pled guilty criminal charges related to the drug sale. Cintron, in his plea allocution, stated that he acted "in concert with" Garnett in selling "a narcotic drug to a police officer." Garnett proceeded to his state criminal trial. In preparation for trial, UC 39 provided the Assistant District Attorney with the information in in UC 39's DD-5 report. UC 39 also disclosed that Garnett had previously attempted to rob UC 39 during an investigation -- a fact that UC 39 did not realize until after the arrest because he did not recognize Garnett since the attempted robbery took place three years earlier.

Garnett denied having any involvement with the drug sale and was free of any drugs or contraband when searched. Garnett was subsequently charged. Unable to post bail, he was held for eight months until his trial. Garnett was ultimately acquitted of criminal sale of a controlled substance in the third degree and criminal sale of marijuana in the fourth degree.

On October 4, 2013, Garnett then filed a lawsuit against officers involved in his arrest alleging various claims. After summary judgment, the only claims remaining were false arrest, malicious prosecution, a fair trial claim against UC 39, and a failure to intervene claim against UC 243. At trial, UC 39 gave testimony relating to whether Garnett went inside the bodega that was inconsistent with his grand jury testimony. UC 243 testified that he saw Garnett enter the store and say something that caught Cintron and Roper's attention, but did not actually hear what Garnett said.

Garnett testified that he was in the same apartment earlier in the day with Cintron and Roper, but did not speak with them, and that he left alone. Garnett testified that after he left, he went to a restaurant near the bodega. While waiting for his food, he went to get a soda at the bodega, but decided not to because it was crowded. Garnett was later arrested in a video game store near the bodega. Roper also testified at Garnett's trial stating that although Garnett, Cintron, and Roper left the apartment together, Garnett was "a little bit separated from us" and that Garnett was not in the store and did not say anything in the store to Cintron and Roper.

After the jury was charged, the district court received a note from the jury asking for clarification on probable cause. The district court then distributed a supplemental instruction stating: "[if] a reasonable person in the officer's shoes looking at the totality of the circumstances would not believe that there was a probability that the plaintiff had committed a crime or was committing a crime, there would not be probable cause for his arrest." The jury only found for Garnett on his right to a fair trial claim, awarding him $20,000 punitive damages and $1 in nominal damages.

UC 39 moved for judgment as a matter of law, arguing that the fabricated evidence did not cause Garnett's deprivation of liberty because UC 39 had probable cause to arrest Garnett. Relying on Ricciuti v. N.Y.C. Transit Authority, 124 F.3d 129 (2d Cir. 1997), the district court denied UC 39's motion. Garnett, meanwhile, moved for a new trial on his false arrest, malicious prosecution, and failure to intervene claims asserting the district court erred in its response to the jury's question.

The Second Circuit held that Ricciuti is as applicable when an officer falsifies information contained in his own account, conveyed to prosecutors, of what he heard the defendant say or do during the alleged offense, as it is when an officer falsifies information about a defendant's confession (the situation in Ricciuti).

UC 39 asserted that Ricciuti was distinguishable on two grounds: (1) that Ricciuti is limited to whether qualified immunity was available to officers who willfully fabricate evidence and (2) that falsification of evidence has always been addressed under the auspices of false arrest and malicious prosecution claims under the Fourth Amendment. The Second Circuit rejected UC 39's view and interpretation of a summary order, Jovanovic v. City of New York, 486 F. App'x 149, 152 (2d Cir. 2012), holding that a "Section 1983 claim for the denial of a right to a fair trial based on an officer's provision of false information to prosecutors can stand even if the officer had probable cause to arrest the Section 1983 plaintiff." The Second Circuit also rejected UC 39's second theory that fabrication of evidence can only implicate one constitutional provision and that a Fourth Amendment concept like probable cause should not immunize an officer who violates an arrestee's non-Fourth Amendment rights.

Garnett's appeal relating to the jury issue was also denied by the district court, which the Second Circuit affirmed after finding that "the charge, taken as a whole made clear that for UC 39 to have probable cause to believe that Garnett was aiding and abetting a drug sale, the officer would have to have had a reasonable belief that Garnett not only knew that an illegal transaction was occurring, but was also 'intentionally aiding' that sale of narcotics."

Panel: Circuit Judges Pooler, Sack, and Lynch

Argument Date: June 7, 2016

Date of Issued Opinion: September 30, 2016

Docket Number: 15-1489(L)

Decided: Affirmed

Case Alert Author: Scott L. Wenzel

Counsel:
Robert T. Perry for Plaintiff-Appellee-Cross-Appellant Kwame Garnett and Richard Dearing for Zachary W. Carter, Corporation Counsel of the City of New York for Defendant-Appellant-Cross Appellee.

Author of Opinion:
Judge Pooler

Circuit: Second Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/03/2016 08:12 PM     2nd Circuit     Comments (0)  

September 28, 2016
  United States v. American Express Company - Second Circuit
Headline: Second Circuit Reverses, Holding Amex's Non-Discriminatory Provisions in Merchant Contacts Do Not Violate Sherman Anti-Trust Act.

Area of Law: Antitrust

Issue(s) Presented: Whether American Express' anti-steering clauses, inserted as part of the non-discriminatory provisions in their agreements with merchants, violate §1 of the Sherman Antitrust Act.

Brief Summary
: The Second Circuit reversed the United States District Court for the Eastern District of New York's decision that had found American Express (Amex) violated §1 of the Sherman Antitrust Act by imposing and monitoring non-compliance with contractual provisions preventing merchants from indicating a preference for particular credit cards and related prohibitions. The district court found that these restraints had an actual anticompetitive effect on interbrand competition. The Second Circuit disagreed, finding plaintiffs failed to meet their burden of demonstrating an anticompetitive effect on the whole market because the district court erred in excluding cardholders from, and counting only merchants in, its definition of the relevant market.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...0f8de2298e8/4/hilite/

Extended Summary:
In 2010, the United States Government and seventeen states (collectively "Plaintiffs") sued American Express ("Amex), Visa, and MasterCard for unreasonably restraining trade in violation of the Sherman Act § 1.40. The complaint alleged, in essence, that certain anti‐steering provisions contained in each credit card networks' agreements with merchants suppress interbrand competition by blocking competition and removing incentives for networks to reduce card fees. In 2011, Visa and MasterCard entered consent judgments voluntarily rescinding their anti-steering provisions, but Amex proceeded to trial in the United States District Court for the Eastern District of New York. The district court found for Plaintiffs, holding that Amex's anti-steering provisions violate United States. antitrust laws and permanently enjoined Amex from enforcing the provisions for ten years. Amex appealed.

Section 1 of the Sherman Antitrust Act prohibits contracts that restrain trade or commerce among the States. To constitute a violation, plaintiffs must prove two elements: (1) a combination or some form of concerted action between at least two legally distinct economic entities that (2) unreasonably restrains trade. Amex's contracts with merchants include specific standard non-discrimination provisions (NDPs) that prohibit merchants from trying to dissuade consumers from using Amex cards or indicating a preference for other credit cards, among a few other related restrictions. Amex's NDPs at issue are classified as a vertical restraint on merchants. For vertical restraints, courts use a three-step burden shifting framework to analyze an anti-trust claim. Plaintiffs bear the initial burden of demonstrating a defendant's challenged behavior had "an actual adverse effect on competition as a whole in the relevant market." A plaintiff who cannot establish anticompetitive effects directly by showing an actual adverse effect on competition, may do so indirectly by showing that the defendant "has sufficient market power to cause an adverse effect on competition." Once the initial burden is satisfied, the burden shifts to the defendant to offer evidence of any pro-competitive effects of the restraint at issue. Finally, if the defendant meets its burden, plaintiff must prove that any legitimate competitive benefits offered could have been achieved through less restrictive means.

In finding an anti-trust violation, the district court found Amex's NDPs denied merchants the opportunity to influence their customers' payment decisions and thereby shift spending to less expensive cards. On appeal, the Second Circuit disagreed. In analyzing whether Plaintiffs satisfied their initial burden, the district court improperly defined the relevant market and that error was "fatal" to its finding a Sherman Act violation. Specifically, the Second Circuit found the district court erred in excluding the market for cardholders from its relevant market definition and analysis. The Second Circuit found that the district court erred in only accounting for the merchant side when it came to increasing merchant fees because those may be a result of offsetting the increase in cardholder rewards in an effort to not lose cardholders or to attract new ones. The Second Circuit reasoned that prices charged to merchants affect cardholder demands which in turn affect merchant demand. Accordingly, to retain cardholders, a network may need to increase cardholder benefits, by perhaps decreasing prices to cardholders, and this may lead to an increase in merchant fees to fund increased cardholder rewards. If merchant fees are increased such that merchant fees are unprofitable for the network, then they will not be raised and cardholder rewards will also not be raised. This may cause the network to lose cardholders. Thus, the court concluded, merchant pricing is only one half of the equation and the two sides cannot be considered in isolation.

The Second Circuit also concluded that Amex's 26.4% market share was not sufficiently indicative of it creating a barrier to entry for other competitors to demonstrate an indirect adverse effect on competition. It thus found that it was an error for the district court to have relied on cardholder insistence as support for its finding of market power. Although an increase in the value of cardholder rewards attracts customer loyalty, the court determined it is also equivalent to a price decrease to the cardholder which brings down the net price across the entire platform. Accordingly, the court reasoned, cardholder insistence has the opposite effect in that it makes it worthwhile for merchants to accept Amex cards. Ultimately, the court concluded that Amex's market power is a result of its rewards programs and perceived prestige due to Amex cardholders regarding the card as cheaper than competing Visa and MasterCard cards. The court found that the NDPs simply protect the program and that prestige, and outlawing the NDPs would appear to reduce this protection and likely result in increasing competitor market shares. As a result, the Second Circuit concluded plaintiffs did not meet their burden of showing that Amex harmed consumerism as a whole, both to cardholders and merchants.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...0f8de2298e8/4/hilite/

Panel: Judge Winter, Judge Wesley, and Judge Droney

Argument Date: 12/17/2015

Date of Issued Opinion: 9/26/2016

Docket Number:
15-1672

Decided: Reversed and remanded to enter judgment in favor of Amex.

Case Alert Author: Belino Voshtina

Counsel: Evan R. Chesler, Cravath, Swaine & Moore LLP, New York, NY (Peter T. Barbur, Kevin J. Orsini, Cravath, Swaine & Moore LLP; Donald L. Flexner, Philip C. Korogolos, Eric J. Brenner, Boies, Schiller & Flexner, LLP on the brief) for Defendants-Appellants American Express Company and American Express Travel Related Service Company, Inc. Nickolai G. Levin, Attorney, U.S. Department of Justice, Antitrust Division, Washington, D.C. (Sonia K. Pffaffenroth, Deputy Assistant Attorney General, Craig W. Conrath, Mark H, Hamer, Andrew J. Ewalt, Kristen C. Limarzi, Robert B. Nicholson, James J. Fredericks, Daniel E. Haar, Attorneys, U.S. Department of Justice, Antitrust Division; Mike DeWine, Ohio Attorney General, Mitchell L. Gentile, Assistant Ohio Attorney General, on the brief) for Plaintiffs-Appellees the United States, et al.

Author of Opinion:
Judge Wesley

Circuit:
Second Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 09/28/2016 09:04 AM     2nd Circuit     Comments (0)  

September 27, 2016
  GAMCO v. Vivendi - Second Circuit
Headline: Second Circuit Affirms Summary Judgment, Finding No Clear Error in District Court Ruling that Defendant Rebutted Plaintiff Value Investors' Fraud-On-The-Market Presumption of Reliance

Area of Law: Securities

Issue(s) Presented: Whether the defendant corporations successfully rebutted plaintiff value investors' fraud-on-the-market presumption of reliance supporting dismissal of plaintiffs' securities fraud claim.

Brief Summary: Plaintiff-Appellants GAMCO, a group of investors, filed a securities fraud claim against Vivendi Universal, S.A. and Vivendi S.A. (collectively, "Vivendi") under § 10(b) of the Securities Exchange Act of 1934 and the Securities Exchange Commission's ("SEC") Rule 10b-5 for materially misrepresenting their liquidity. Although reliance on a material omission or misrepresentation is an element of such a claim, plaintiffs are afforded a presumption of reliance in circumstances where they rely on the integrity of the market price of the security at issue. This theory of reliance, known as the "fraud-on-the market theory," is, however, rebuttable by a defendant. The United States District Court for the Southern District of New York granted summary judgment for Vivendi, finding Vivendi successfully rebutted GAMCO's fraud-on-the-market theory of reliance by showing that GAMCO used its own value calculation to determine whether to purchase a security, rather than basing the decision on the market price alone. Furthermore, the district court found the facts demonstrated that even had GAMCO had known about Vivendi's alleged concealed liquidity problems, GAMCO still would have completed the purchase transaction. On Plaintiffs' appeal, the Second Circuit, finding no clear error, affirmed the district court's entry of judgment for Vivendi.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...25730/1/hilite/


Extended Summary: To succeed on a securities fraud claim brought under § 10(b) of the Securities Exchange Act of 1934 and the Securities Exchange Commission's ("SEC") Rule 10b-5, one element the plaintiff must prove is "reliance upon [a material] misrepresentation or omission." Although in most cases reliance is proven directly by demonstrating the investor was aware of the defendant's misstatement and engaged in the transaction based upon the misrepresentation, investors in certain circumstances, are afforded a presumption of reliance by showing they relied on the integrity of the market price of the security in choosing to purchase or sell. This presumption of reliance is known as the "fraud-on-the market theory" and is rebuttable by the defendant by a showing that "severs the link between the alleged misrepresentation and the price received or paid by the plaintiff, or [their] decision to trade at a fair market price."

Plaintiff-Appellants GAMCO are value investors. Value investors make an independent estimation of the value of a publicly-traded company's securities and attempt to buy the securities when the market price is lower than its own valuation, betting that the market price will rise over time. GAMCO invested in Defendants-Appellees Vivendi Universal, S.A. and Vivendi S.A. (collectively, "Vivendi") between 2000 and 2002. As the basis of their securities fraud claim, GAMCO alleged in its complaint that Vivendi misrepresented the amount of liquidity it had and, once their actual liquidity came to light, the value of the securities dropped dramatically. Vivendi moved for summary judgment and the United States District Court for the Southern District of New York granted its motion, holding the facts demonstrated that Vivendi successfully rebutted the fraud-on-the-market theory of reliance.

On GAMCO's appeal, the Second Circuit examined the factual findings made by the district court. The district court found that GAMCO's purchasing decisions were largely based on its own "Private Market Value, (PMV)," an independent calculation of the worth of the securities, that approximated the price that an informed industrialist would be willing to pay for the company, if each of its segments were valued independently in a private market sale. GAMCO then compared the PMV to the public market price. If there was a sufficiently large spread between these two numbers, as well as a type of catalyst or dynamic which it believed would cause the securities' value to move toward the PMV over time, GAMCO would purchase the security. The evidence, including testimony from GAMCO employees indicated that Vivendi's liquidity had no impact on the PMV calculation and the district court concluded that, even if GAMCO was aware of Vivendi's liquidity problems and its concealment of those problems, GAMCO's PMV would still have been materially higher than the public market price, making the purchase a good investment in GAMCO's view.

The Second Circuit found no clear error in the district court's factual findings and affirmed summary judgment for Vivendi. It concluded that the district court had a reasonable basis to hold that GAMCO did not believe that the market price necessarily equals, at any given time, the efficient value of a security and, accordingly, that Vivendi had rebutted the fraud-on-the-market presumption of reliance relied upon by GAMCO.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...25730/1/hilite/


Panel: Circuit Judges Carbranes, Livingston, and Lynch

Argument Date: 03/03/2016

Date of Issued Opinion: 09/27/2016

Docket Number: No. 13-1194(L), 13-1377(XAP)

Decided: Affirmed

Case Alert Author: Leigh Wellington

Counsel: Andrew J. Entwistle, Entwistle & Cappucci LLP, New York, N.Y. (Vincent R. Cappucci, Arthur V. Nealon, Jordan A. Cortez, Entwistle & Cappucci LLP, New York, N.Y., on the brief), for Plaintiffs-Appellants-Cross-Appellees; Mark A. Perry, Gibson, Dunn & Crutcher LLP, Washington, D.C. (Miguel A. Estrada, Lucas C. Townsend, Gibson Dunn & Crutcher LLP, Washington, D.C.; Caitlin J. Halligan, Gabriel K. Gillett, Gibson, Dunn & Crutcher LLP, New York, N.Y.; James W. Quinn, Gregory Silbert, Weil, Gotshal & Manges LLP, New York, N.Y.; Daniel Slifkin, Timothy G. Cameron, Cravath, Swaine & Moore LLP, New York, N.Y., on the brief), for Defendants-Appellees-Cross-Appellants.

Author of Opinion:
Per Curiam

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 09/27/2016 07:12 PM     2nd Circuit     Comments (0)  

September 25, 2016
  Harrison v. Republic of Sudan
Case Name: Harrison v. Republic of Sudan

Headline: Second Circuit Denies Sudan's Request for Rehearing in U.S.S. Cole Bombing Case, Despite United States' Amicus Brief in Support

Area of Law: International

Issue(s) Presented: Whether service of process to a foreign state's embassy in Washington D.C. is consistent with the Federal Sovereign Immunities Act and Vienna Convention.

Brief Summary: In 2000, the bombing of the U.S.S. Cole in the Port of Yemen injured and killed numerous American sailors. Sailors and spouses of sailors harmed or killed in the explosion sued Sudan under the Federal Sovereign Immunities Act (FSIA), alleging that Al Qaeda was responsible for the attack and that Sudan had provided material support to Al Qaeda. The suit was brought in the D.C. District Court and, at plaintiffs' request, the Clerk of the D.C. District Court served the summons and complaint on Sudan by mailing the papers to the Minister of Foreign Affairs of Sudan via the Sudanese Embassy in Washington, D.C. Return receipt came back to the Clerk of Court six days later, but Sudan did not substantively respond to the complaint. After the requisite time had elapsed without an answer or other responsive pleading, the Clerk of Court entered a default judgment against Sudan in the amount of $314,705,896. The judgment was later registered in the Southern District of New York, which issued three turnover orders, directing certain banks to turnover assets of Sudan to plaintiffs. Sudan then filed a notice of appearance and appealed the turnover orders to the Second Circuit, which affirmed them. Sudan filed a petition for panel rehearing or rehearing en banc, and the United States filed an amicus brief in support of Sudan's petition. The request for panel rehearing was denied, on grounds that although it was a "close call," the better reading of the FSIA favored the plaintiffs. To read the whole opinion, please visit http://www.ca2.uscourts.gov/de...5d3f5/1/hilite/


Extended Summary: The Federal Sovereign Immunities Act ("FSIA" or "the Act") contains specific provisions to maintain the integrity of foreign relations. One of those provisions dealing with sufficient service of process is at issue in this case. This provision states that service shall be made upon a foreign state "by sending a copy of the summons and complaint and a notice of suit...to the head of the ministry of foreign affairs of the foreign state concerned." The statute does not specify a particular location to which the papers must be sent.

In its amicus brief supporting Sudan, the United States argued that mailing the papers to "the foreign minister at a place other than the foreign ministry" is not authorized by FSIA. The court disagreed, explaining that "a mailing addressed to the minister of foreign affairs via Sudan's embassy in Washington, D.C. was consistent with the language of the statute and could reasonably be expected to result in delivery to the intended person."

The court further disagreed with Sudan's and the United States' contention that this interpretation placed the United States in violation of the Vienna Convention. In particular, the United States had argued that this interpretation would "complicate international relations by subjecting the United States (and other countries) to service of process via any of its diplomatic missions throughout the world." The court explained that here, process was served to the Minister of Foreign Affairs at the foreign mission, and not on the foreign mission itself or the ambassador. "The papers were specifically addressed to the Minister of Foreign Affairs via the embassy, and the embassy sent back a return receipt acknowledging receipt of the papers," the court explained. "We do not preclude the United States (or any other country) from enforcing a policy of refusing to accept service via its embassies." Sudan's acceptance of the service papers, however, constituted consent to this form of service.

The court also rejected Sudan's factual argument that the mailing was never accepted because the signatures on the return receipt were illegible. The court stated that this argument had been raised too late for consideration at this stage of the case.

Finally, the Second Circuit addressed the argument that the district court had erred in issuing the turnover orders without first obtaining a license from the Treasury Department's Office of Foreign Assets Control ("OFAC"). The Court explained that, although a OFAC license is normally required before attaching assets from a foreign state that have been frozen under certain sanction regimes, here a license was not required because the funds at issue in all three turnover orders were already subject to turnover pursuant to the Terrorism Risk Insurance Act. Accordingly, the court denied the petition to the extent it sought panel rehearing. (It did not address the request for rehearing en banc.)

Panel: Circuit Judges Lynch and Chin; District Judge Korman, sitting by designation

Argument Date: 03/11/2016

Date of Issued Opinion: 09/22/2016

Docket Number: No. 14-121-cv

Decided: Petition for panel rehearing denied

Case Alert Author: Hannah Bartges

Counsel: Andrew C. Hall, Lamb and Hall, P.A., for Plaintiffs-Appellees Harrison, et al., Christopher M. Curran, White & Case, LLP, for Defendant-Appellant Republic of Sudan, and David S. Jones (Assistant U.S. Attorney) for the United States of America as Amicus Curiae.

Author of Opinion:
Judge Chin

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/25/2016 09:44 PM     2nd Circuit     Comments (0)  

  U.S. v. Sheehan - Second Circuit
Headline: Second Circuit Affirms Conviction for Use of Destructive Device to Commit Extortion, Finding Jury Reasonably Concluded Partially Constructed Pipe Bomb was a Destructive Device

Area of Law: Criminal Law

Issue(s) Presented: Whether there was sufficient evidence to establish that a partially constructed pipe bomb planted by defendant constituted an explosive device and whether instructions provided to the jury, or the prosecutor's statements during summation, were improper.

Brief Summary: Following a jury trial, the defendant, Daniel Sheehan, was convicted in the United States District Court for the Eastern District of New York for extortion and use of a destructive device to commit extortion when he sought to extort payment from Home Depot stores by placing a device, that he contended was an inert pipe bomb, in one Home Depot store and threatened to plant similar devices in other stores if he were not paid. On appeal, Sheehan challenged his conviction for use of a destructive device to commit extortion, contenting the device he planted lacked an igniter and therefore was incomplete. The Second Circuit rejected his challenge, holding that the government had to show only that the device was capable of exploding. The Second Circuit also rejected Sheehan's claim that the jury was improperly instructed that it could convict if the planted device constituted a "combination of parts" designed to "convert[] a device into an explosive bomb and from which an explosive bomb could be readily assembled" and found that the government's comments in summation did not deprive him of a fair trial.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...d69f94b46b9/2/hilite/


Extended Summary:
Defendant Daniel Sheehan was tried before a jury in the United States District Court for the Eastern District of New York for extortion, in violation of 18 U.S.C. § 1951, and use of a destructive device to commit extortion in violation of 18 U.S.C. § 924(c)(1)(B)(ii). The evidence presented at trial, including a confession made by Sheehan, established that after practicing assembling and detonating a pipe bomb in his shed, Sheehan assembled another device and placed it in a cardboard light fixture box previously purchased from a Home Depot. Later, Sheehan placed the cardboard box containing the device in a Home Depot store but did not initially connect the pull string (a triggering mechanism used to detonate the device when box is picked up) to the shelf, but returned to the Home Depot a week later and affixed the string. He subsequently messaged the store manager stating there was a bomb in the lighting department, that the manager was in no danger, and that he was seeking payment of 2 million dollars. The store manager called the bomb squad which used a robot to unscrew the bomb cap in an attempt to disassemble the device and the device exploded, damaging parts of the store. Sheehan was convicted and appealed, challenging only his conviction for use of a destructive device to commit extortion.

A destructive device is defined for purposes of the applicable criminal statute as either an explosive bomb, or "any combination of parts either designed or intended for use in converting any device into any destructive device [listed in the statute] and from which a destructive device may be readily assembled." On appeal, Sheehan argued the evidence was insufficient to establish his guilt on the enhanced charge of using a destructive device to commit extortion because the device he left in Home Depot was not a "destructive device" and could not be readily converted into such a device. The evidence presented at trial indicated that, although Sheehan's statement had indicated he had placed one in the device, none was found at the scene, and Sheehan argued that the evidence was insufficient to establish that an igniter was present. The government argued that the explosion could have destroyed the igniter. On appeal, the Second Circuit rejected Sheehan's sufficiency challenge, holding that a reasonable jury could have found that a device that is incapable of detonating in its intended manner, but still capable of detonating, is an explosive bomb within the meaning of the statute.

Sheehan also argued that the jury should not have been instructed that he could be convicted on the theory that the device constituted a "combination of parts" designed to convert a device into a bomb and "from which an explosive bomb may be readily assembled," because such a combination‐of‐ parts theory is inapplicable to completed devices. Moreover, he contended that the court was required to instruct the jury that subjective intent is required on such a charge. The court rejected these arguments, finding that the phrase "any combination of parts" extends to both fully disassembled and partially completed devices and, therefore, a combination‐of‐parts instruction is appropriate as long as a rational jury could find a device was at least partially disassembled and, further held that subjective intent was not required. Lastly, Sheehan argued, for the first time on appeal, that the government's summation deprived him of a fair trial because various statements mischaracterized the evidence, reflected the prosecutor's personal beliefs about defense counsel, or denigrated the defense expert. The court determined that most of the comments made were permissible and, even if some of the comments were improper, they did not amount to flagrant abuse, the standard required because the objection was not preserved at trial.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...d69f94b46b9/2/hilite/

Panel (if known): Circuit Judges Winter, Wesley, and Lynch.

Argument Date: 04/21/2016

Date of Issued Opinion: 09/23/2016

Docket Number:
No. 15-1028

Decided: Affirmed

Case Alert Author: Robyn Downing

Counsel: Jonathan I. Edelstein, Edelstein & Grossman, for Defendant‐Appellant Daniel Patrick Sheehan. Jo Ann M. Navickas and Lara Treinis Gatz, Assistant United States Attorneys (of counsel), for Robert L. Capers, United States Attorney for the Eastern District of New York, Brooklyn, New York.

Author of Opinion: Judge Lynch

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 09/25/2016 07:33 PM     2nd Circuit     Comments (0)  

September 20, 2016
  B.C. et. al. v. Mount Vernon School District
Headline: Second Circuit Holds that an Individual with a Disability under the IDEA Does Not Categorically Qualify as an Individual with a Disability under the ADA and Section 504

Areas of Law: Education

Issue Presented: Whether an individual with a "disability" under the IDEA categorically qualifies as an individual with a "disability" under the ADA and Section 504.

Brief Summary: Two former students in the Mount Vernon School District sued the District and other defendants under the Americans with Disabilities Act (the "ADA") and Section 504 of the Rehabilitation Act ("Section 504"). Each of these two students had previously been classified as a child with a disability under the Individuals with Disabilities Education Act ("IDEA"), and had received special education services on that basis. In the instant lawsuit, they claimed that the way the school district provided academic intervention services violated the ADA and Rehabilitation Act by having a disparate impact on students with disabilities. The plaintiffs' only evidence that they were in fact covered by the ADA and the Rehabilitation Act was their previous classification as having a disability under the IDEA. In a case of first impression, the Second Circuit held that an IDEA disability does not necessarily constitute a disability under the ADA and Section 504, noting that the statutes defined "disability" differently. "The ADA [and, by incorporation, Section 504] asks whether an impairment 'substantially limits' a major life activity, while the IDEA trains on whether an impairment necessitates 'special education and related services,'" the court explained. The court noted that although "many, if not most, IDEA-eligible individuals" will also fall under the ADA definition, that showing must be supported by evidence. Here, because the plaintiffs had failed to present such evidence, the Second Circuit affirmed the dismissal of their claim.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...7bca30a4136/1/hilite/

Extended Summary: Two parents, individually and on behalf of their two minor children (former students in the Mount Vernon School District), brought this action in the United States District Court for the Southern District of New York against the Mount Vernon School District, the Board of Trustees, the District Superintendent, the Assistant Superintendent, the NYSED, and the Title I Director. In their lawsuit alleging discrimination under ADA and Section 504, plaintiffs-appellants relied on statistical data showing that the school district offered Academic Intervention Services ("AIS," which referred to noncredit bearing courses intended for students at risk of not meeting state performance standards) to children with disabilities under the IDEA at a higher rate than to children without same. Plaintiffs-appellants claim that the district's policy of offering these noncredit bearing AIS courses during school hours prevented them from earning the number of credits necessary to advance to a higher grade. Consequently, they argue, such policy disparately impacted students with disabilities in violation of ADA and Section 504.

The lawsuit presented a question of first impression to the Circuit: whether a "disability" under the IDEA categorically qualifies as a "disability" under the ADA and Section 504, such that data regarding "children with a disability" under IDEA suffices to establish a prima facie case in a claim predicated on the plaintiff having a "disability" under ADA and Section 504. The Second Circuit held it does not.

In its de novo review of the district court's decision, the Second Circuit outlined the almost identical standards adopted by ADA and Section 504 for the protection of individuals with a disability. The ADA and Section 504 require the showing that the plaintiff (1) is a qualified individual with a disability; (2) was excluded from participation in a public entity's services, programs or activities or was otherwise discriminated against by the public entity; and that (3) such exclusion or discrimination was due to plaintiffs' disability. Additionally, the Court explained that exclusion or discrimination may take the form of inter alia, disparate impact, and that to establish a prima facie case under a disparate impact theory, a plaintiff is required to demonstrate (1) the occurrence of certain outwardly neutral practices, and (2) a significantly adverse or disproportionate impact on persons of a particular type produced by the defendant's facially neutral acts or practices. The showing of the latter requirement, the Court explained, ordinarily requires that plaintiffs include statistical evidence showing the alleged outcome disparity between groups. In this case, the statistical data relied on by plaintiffs-appellants compared (1) the percentage rate at which high school students classified as having a disability under the IDEA received AIS courses with (2) the percentage rate at which high schools students not classified as having a disability received AIS instruction. The data showed that, in the Mount Vernon City School District, the ratio between the two groups was 3:1 (23.02% vs. 8.62%) during the 2008-2009 school year; and 1.5:1 (20.37% vs. 12.56%) during the 2009-2010 school year.

Notwithstanding the foregoing, the Court found that plaintiffs-appellants had failed to provide any evidence that the group of students included in their data classified as having a disability under the IDEA, also satisfied the ADA and Section 504 definitions of "disability." In this regard, the Court explained that although these statutes all provide relief for persons with disabilities, they define disability differently. Under the ADA, a "disability" constitutes a "physical or mental impairment that substantially limits one or more major life activities," whereas under the IDEA, a "child with a disability" has one or more of an enumerated list of impairments requiring "special education or related services." The Court further explained that only if, as a matter of law, a child with a disability under the IDEA necessarily qualifies as an individual with a disability under the ADA and Section 504, plaintiffs-appellants' statistical evidence would suffice to show the disparate impact under the alleged ADA and Section 504. However, based on the distinct legal standards set forth by these statutes, the Court concluded that an individual may qualify as disabled under the IDEA without demonstrating the "substantially limiting impairment" required to qualify as such under the ADA.

This mandatory showing of a substantially limiting impairment to seek redress under the ADA, the Court concluded, had not been made by the plaintiffs-appellants, because the statistical data relied on in this case at most showed that the District's AIS policy affected children with a disability under the IDEA at a higher percentage than it affected children without such disability, but fell short of satisfying the statutory standards of the ADA and Section 504. Therefore, since an IDEA disability is not equivalent as a matter of law to a disability cognizable under the ADA and Section 504, the district court's grant of summary judgment in favor of defendants was proper.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...7bca30a4136/1/hilite/

Panel: Circuit Judges Walker, Jacobs, and Livingston

Argument Date: 08/26/2015

Date of Issued Opinion: 09/16/2016

Docket Number: 14-3603-cv

Decided: Affirmed

Case Alert Author: Gloria Mejia-Repp

Counsel: Michael H. Sussman, Sussman & Watkins, Goshen, N.Y., for Plaintiffs-Appellants; Lewis R. Silverman, Rutherford & Christie, LLP, N.Y., for Defendants-Appellees Mount Vernon City School District, Mount Vernon City School District Board of Trustees, Dr. Welton Sawyer, and Shelly Jallow; Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, Philip V. Tisne, Assistant Solicitor General, for Eric T. Schneiderman, Attorney General of the State of New York, New York, N.Y., for Defendants-Appellees New York State Education Department and Roberto Reyes.

Author of Opinion: Judge Debra Ann Livingston

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/20/2016 10:16 AM     2nd Circuit     Comments (0)  

September 18, 2016
  Paul Betances, et al. v. Brian Fischer, et al. - Second Circuit
Headline: Second Circuit Holds NYS Correctional and Parole Officials' Delay in Implementing Earlier Ruling that Held Administratively Imposed Post-Release Supervision Terms to Criminal Sentences Are Unconstitutional, Was Not Objectively Reasonable

Area of Law: Criminal Law

Issue(s) Presented: Whether defendant NYS Correctional Service and Parole Division officials may be liable for failing to comply with the Court's holding in Early I that their offices' administratively imposed post-release supervision terms to criminal sentences were unconstitutional.

Brief Summary: This case concerns plaintiffs who were convicted of violent felonies and had administratively imposed post-release supervision ("PRS") terms administratively added to their sentences when the sentencing judges had failed to impose them. In 2006, in a case known as Early I, the Second Circuit held that, despite a New York statute requiring that PRS terms were required to be imposed in certain cases, only the judge could impose PRS terms, and PRS terms imposed and enforced administratively by New York State Department Of Correctional Services (DOC) and the Division of Parole (DOP) when the sentencing judge failed to do so were unconstitutional. Although defendants acknowledged that they fully understood the requirements of Early I, they refused to enforce it or take action until the New York Court of Appeals subsequently issued a decision in 2008 that state law did not permit an administratively imposed post-release supervision term. In the current suit, plaintiffs sued individually DOC and DOP officials responsible for implementing Early I for failing to do so until the later 2008 decision. The Second Circuit held that defendants' delay was not objectively reasonable and thus they were not protected by qualified immunity and affirmed the district court's decision to grant plaintiffs' motion for summary judgment seeking to hold the officials personally liable.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...ba3d9/2/hilite/


Extended Summary: Under New York law, an individual convicted of a violent felony must serve a mandatory post-release supervision ("PRS") term in addition to their imprisonment. N.Y. Penal Law § 70.45(1). Here, the Second Circuit revisits the issue of PRS terms administratively imposed and enforced by New York State Department of Correctional Services (DOS) and the Division of Parole (DOP) in cases when the sentencing judge failed to impose this statutory requirement. On June 9, 2006, the Second Circuit first addressed the constitutionality of administratively adding a term of post-release supervision when it decided Early v. Murray, ("Early I"), reh'g denied, ("Early II"). In Early I, the Court held that only the sentencing court may impose a PRS, and that administratively imposed PRS terms were unconstitutional. Defendants, individual DOS and DOP officials, however, refused to implement this decision, claiming it violated New York State law. On April 29, 2008, the New York Court of Appeals followed suit with the Second Circuit, holding that state law allowed only the sentencing judge to impose the terms of PRS. After these decisions, the defendants finally took steps to address obtain resentencing for individuals subject to administratively imposed PRS terms.

The plaintiffs in this case are offenders subjected to continued or newly imposed PRS terms, set forth by DOCS, from the date that Early I was decided. Previously, the Second Circuit affirmed the district court's decision to deny defendants' motion to dismiss. The Court's remand instructed the district court to develop a record as to the objective reasonableness of the time it took defendants to implement Early I. Defendants now appeal the district court's decision to grant plaintiffs' motion for summary judgment on holding the defendants personal liable and to deny defendants' motion for summary judgment on the basis of qualified immunity.

Defendants, Anthony J. Annucci and Brian Fisher, DOCS officials, and Terence Tracy, a DOP official, who were responsible with implementation of Early I, argued that they believed that their only responsibility was to prepare individual resentencing. The Second Circuit found this argument unpersuasive. For prospective PRS terms, the court found defendants' duty was not to impose a PRS term, and then prepare a resentencing if and when requested. For retrospective PRS terms, the court found that the fact that they took action after the 2008 Court of Appeals decision demonstrated that their responsibility was not to passively wait for individuals to file suits.

Although the Second Circuit accepted the difficulties with resentencing all of the violent felons with unpronounced PRS terms, the Court found this argument unpersuasive because Early I did not impose this requirement, and that these difficulties did not cause the delay of 14-19 months. Finally, while the Second Circuit accepted the argument that other state actors were resistant to Early I, the failure of those parties to act did not, the court said, impact defendants' ability to act and defendants had no reason to wait until after the Court of Appeals weighed in. For these reason, the Second Circuit affirmed the district court's decision.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...ba3d9/2/hilite/

Panel: Circuit Judges John M. Walker, Jr., Reena Raggi, and Christopher F. Droney.

Argument Date: 3/28/2016

Date of Issued Opinion: 9/16/2016

Docket Number:
No. 15-2836-cv

Decided: Affirmed

Case Alert Author: Vito J. Marzano

Counsel: Hayley Horowitz, Emery Celli, Brinckerhoff & Abady LLP for Plaintiffs-Appellees; Steven C. Wu, Deputy Solicitor General, for Eric T. Schneiderman, Attorney General of the State of New York, for Defendants-Appellants.
Author of Opinion: Judge Walker

Circuit: Second Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond

    Posted By: Elyse Diamond @ 09/18/2016 11:21 AM     2nd Circuit     Comments (0)  

September 16, 2016
  Church & Dwight Co., Inc., v. SPD Swiss Precision Diagnostics, GmbH - Second Circuit
Headline: Second Circuit Affirms False Advertising Ruling Against Maker of Clearblue "Weeks Estimator" Pregnancy Test

Area of Law: Advertising Law

Issue(s) Presented: Whether, given that the Clearblue "Weeks Estimator" pregnancy test used a different measurement metric than the metric used by doctors, its packaging and advertising were implicitly false.

Brief Summary: In 2013, the manufacturer of the Clearblue pregnancy tests launched a new product: the Clearblue Pregnancy Test with Weeks Estimator. This was the first pregnancy test that not only measured whether or not a woman was pregnant (based on the presence of a hormone in her urine), but also indicated how many weeks she had been pregnant (based on the amount of that hormone). However, the way in which the test dated the pregnancy differed from the commonly-used metric used by doctors. The medical profession dates a pregnancy based on the number of weeks since a woman's last menstrual period. The Clearblue Weeks Estimator test, by contrast, dates it based on weeks since ovulation. Accordingly, the Clearblue Weeks Estimator test generally produces a "weeks pregnant" number that is approximately two weeks less than the number a doctor would provide (since ovulation, on average, occurs two weeks after the start of a menstrual period).

The makers of First Response pregnancy tests (Clearblue's main competitor) brought suit in the United States District Court for the Southern District of New York, alleging that the manufacturer of the Clearblue "Weeks Estimator" test had engaged in false advertising because its materials implied that Clearblue was using the same metric as that used by doctors, boosting its sales. The district court found the defendant liable for false advertising, enjoined defendant from distributing the misleading materials and from using specified phrases, and ordered it to take corrective measures. The Second Circuit affirmed, explaining that the product's "Launch Package, TV Commercial, and other advertising all unambiguously implied the false message that the Product provides a measurement of weeks-pregnant that is consistent with the measurement a doctor would provide."

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...0b7c5cd707e/5/hilite/
[
B]Extended Summary: The Second Circuit affirmed a decision of the United States District Court for the Southern District of New York which found Defendant-Appellant liable for false advertising and issued a permanent injunction regarding its advertising and packaging of one of their pregnancy tests.

For historical and practical reasons, doctors have always dated a woman's pregnancy from her last menstrual period. This method - despite the fact that a woman's egg is not actually fertilized until she ovulates approximately two weeks later - is widely used and remains the standard convention for expressing pregnancy duration. In 2013, the manufacturer of Clearblue pregnancy tests launched a product using an alternate pregnancy-dating method. This product, named the "Clearblue Pregnancy Test with Weeks Estimator," measures how many weeks a woman has been pregnant since ovulation. The test calculates this by measuring the amount of hCG (the hormone human chorionic gonadotropin) in a woman's urine; this hormone is released once the fertilized egg implants in the uterine lining.

Plaintiff-Appellee, Church & Dwight Co., Inc., is the manufacturer of a different test, the "First Response Pregnancy Test," which is Clearblue's direct competitor in the home-pregnancy test market. Plaintiff brought a false advertising suit against the defendant, alleging that defendant's product "communicated the false impression that it uses the same metric and gives the same number of weeks of pregnancy as a medical professional would do," and that this false impression boosted the product's sales, at the expense of plaintiff's competing product.

The defendant lost in the district court, and appealed. First, defendant raised the argument that since it had obtained FDA approval on their packaging and satisfied the requirements of the Federal Food, Drug and Cosmetic Act, it should be protected from liability under a false advertising claim based on the Lanham Act.. The Second Circuit, however, explained that the Lanham Act and the FDCA actually complement each other because the Lanham Act's mission is to protect the concerns of a competitor harmed by false advertising while the FDCA protects public health and safety.

On the substance of the false advertising claim, the Second Circuit affirmed the ruling that the advertising and packaging for the "Weeks Estimator" product was impliedly false. The court held that "if an advertising message means something different from what reasonable consumers would understand it to mean, that message can be considered false." Here, the court concluded that reasonable consumers would have assumed from the various advertising materials that the product was not giving a different number than a medical professional would give - when, in fact, it was. The initial launch package "did not indicate in any visible or clear way that the Product provides a different measurement from a doctor's." Even after the defendant revised its original packaging and advertising because the FDA had expressed concerns over the use of "weeks" language, confusion to a reasonable consumer still existed. The revised version of the "Weeks Estimator" test specifically included the language "Weeks Since Ovulation," but that did not resolve confusion, because "many women are not aware that the medical profession measures pregnancy as starting approximately two weeks prior to ovulation and fertilization." The court stated that even if the confusion were attributable to widespread consumer ignorance on how a doctor measures pregnancy, the defendant still should have "adequately communicat[d] that its measurement was not consistent with the metric used by doctors."

Finally, because Defendant's product advertised such a unique characteristic, this misrepresentation influenced consumers' purchasing decisions. This false advertising was found to have a direct causal connection with Plaintiff's lost sales.
The broad injunction entered by the district court was also affirmed by the Second Circuit. The terms of the injunction, among other things, direct the Defendant to remove all current products from points of sale within forty-five days, deliver within seven days to all retailers and distributors a specified written notice with a copy of the injunction, set up and maintain for a year a page on its website with a message about the lawsuit, publish internet advertising prominently displaying its logo and stating that a federal court has determined they engaged in false advertising, among other severe punishments.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...0b7c5cd707e/5/hilite/

Panel: Circuit Judges Leval and Wesley; District Judge Sannes, sitting by designation

Argument Date:
03/11/2016

Date of Issued Opinion: 09/09/2016

Docket Number: No. 15-2411

Decided: Affirmed

Case Alert Author: Eve I. Lincoln

Counsel: Paul D. Clement, Bancroft PLLC, for Plaintiff-Appellee and Seth P. Waxman, Wilmer Cutler Pickering Hale and Dorr LLP, for Defendant-Appellant

Author of Opinion: Judge Leval

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Elyse Diamond @ 09/16/2016 09:39 AM     2nd Circuit     Comments (0)  

September 13, 2016
  Montesa, et al. v. Schwartz, et al. - Second Circuit
Headline: Second Circuit Rejects Students' Claim Under the First Amendment's Establishment Clause Against East Ramapo School Board

Area of Law:
Constitutional Law, First Amendment, Establishment Clause

Issue(s) Presented: Whether East Ramapo public school students have standing to challenge the district's use of funds that benefit Hasidic children and institutions.

Brief Summary: Current students in Rockland County's East Ramapo School District sued the school board and the board's lawyer under the Establishment Clause of the First Amendment for an alleged unconstitutional use of public district funds to benefit Hasidic students and institutions. Plaintiff-appellees claim that the re-apportioning of funds from the public school to benefit private religious schools and students deprived them of educational opportunities causing them direct damage. They sought an injunction, monetary damages, and attorneys' fees. The Second Circuit held that plaintiff-appellees lacked standing in the case because they did not demonstrate a concrete, specific injury.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...ede8fa0c01/1/hilite/

Extended Summary:
Students in the East Ramapo School District, both current and former, along with district taxpayers, brought the current action in the United States District Court for the Southern District of New York against East Ramapo school board members and board lawyer, Albert D'Agostino. Plaintiffs-appellees alleged violations of state and federal law, as well as the United States Constitution, stemming from defendants-appellants' alleged unconstitutional use of funds that supported Hasidic children and institutions in the school district. Plaintiff-appellees specifically alleged that defendant-appellants manipulated the Individuals with Disabilities Act (IDEA) settlement process to take children who were eligible for IEPs out of the public school and paid for their placement in private Hasidic schools, despite the public school's ability to accommodate the children's needs. Plaintiff-appellees also described other instances where defendant-appellants allegedly gave preferential treatment to the Hasidic community when they attempted to sell district property and purchased religious books for use by Hasidic children in the district with public money. Plaintiff-appellees claimed a causal link between the defendant-appellants' acts and a loss of educational services at the public school and asserted they were directly affected by these actions and that public students' test scores decreased.

At the outset, the district court dismissed all claims except the claim brought under the Establishment Clause of the First Amendment. The lower court also dismissed the former students for lack of standing and found the taxpayers could not seek damages (that appeal is now pending separately in district court), leaving current students as the only remaining plaintiffs in this case. The district court then held that the current students had standing to proceed with their claim under 42 U.S.C. § 1983 and found defendant-appellants were not protected by qualified immunity. Defendant-appellants then petitioned for an interlocutory appeal to address whether the current students had standing in the case and whether they were entitled to immunity. The Second Circuit reversed the district court, holding the current students lacked standing to proceed on their claim and, accordingly did not need to reach the issue of immunity.

The Second Circuit began its de novo review by outlining the requirements for standing as a concrete and actual injury, causation, and a likelihood of redress. The Court then narrowed its scope, outlining that standing for purposes of an Establishment Clause claim may exist only for: (a) taxpayers; (b) a direct harm; or (c) a denial of benefits. Finding that the plaintiff-appellees proceeded under a theory of direct hard, a "novel theory of liability," given the facts in this case, the court held that plaintiffs-appellees needed to demonstrate a concrete injury stemming from a religious message or a causal link between the alleged IDEA scheme and their injuries. The Court reasoned that the allegations that defendant-appellants' shifted funds from the public school to Hasidic children and institutions caused only indirect, incidental effects on the plaintiff-appellees' education. According to the Second Circuit majority, such allegations of academic harm resulting from funneling public funds to religious children and institutions in this way, without more, did not demonstrate a direct injury by religious expression. Thus, the Second Circuit reversed and remanded the lower court's decision, holding that plaintiff-appellees lacked standing to bring this Establishment Clause First Amendment claim against defendant-appellants.

In the dissent, Judge Reiss argued that the majority viewed the plaintiff-appellees' claim through too narrow a lens, and that an Establishment Clause claim is broader than the direct exposure theory asserted by the court. Judge Reiss contended that plaintiff-appellees' allegations should be held to withstand the pleading requirement because plaintiff-appellees alleged a causal link between the lack of funding to their school and their decreased test scores, which Judge Reiss viewed as a specific injury.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...ede8fa0c01/1/hilite/

Panel: Circuit Judges Hall and Lohier; District Judge Reiss

Argument Date:
11/02/2015

Date of Issued Opinion:
09/12/2016

Docket Number:
14-3721-cv(L)

Decided:
Reversed and Remanded

Case Alert Author: Samantha Hazen

Counsel:
Laura D. Barbieri, Arthur Zachary Schwartz, Advocates for Justice Legal Foundation, New York, NY for Plaintiffs-Appellees; David J. Butler, Bryan M. Killian, Randall M. Levine, David B. Salmons, Stephanie Schuster, Morgan, Lewis & Bockius, LLP, Washington, DC for Defendants-Appellants Daniel Schwartz, Yehuda Weissmandl, Moses Friedman, Moshe Hopstein, Eliyahu Solomon, Aron Wieder, Morris Kohn, Richard Stone, Joel Klein, and Eliezer Wizman; Mark D. Harris, Adam W. Deitch, Jessica Zietz, Proskauer Rose LLP, New York, NY for Defendant-Appellant Nathan Rothschild; Meredith D. Belkin, Marian C. Rice, L'Abbate, Balk, Colavita & Contini, LLP, Garden City, NY for Defendant-Appellant Albert D'Agostino

Author of Opinion: Judge Hall (majority); Judge Reiss (dissent)

Case Alert Circuit Supervisor:
Professor Elyse Diamond

    Posted By: Elyse Diamond @ 09/13/2016 08:34 AM     2nd Circuit     Comments (0)  

April 29, 2016
  United States v. Halloran - Second Circuit
Headline: Second Circuit Affirms Former City Council Member's Bribery Conviction and Jail Sentence

Area of Law
: Criminal Law; Fraud

Issue(s) Presented:
Whether there was sufficient evidence to find that a former member of the New York City Council acted with the requisite intent in accepting bribes.

Brief Summary: Daniel J. Halloran, a former member of the New York City Council, was found guilty by a jury of participating in two bribery schemes. In the first scheme, he was found to have accepted bribes in exchange for promising to funnel city funds to the bribe payers. In the second, Halloran was found to have paid to help his co-defendant, Malcolm A. Smith, bribe Republican Party officials to obtain what is known in New York as a Wilson-Pakula certificate or authorization, which would have enabled Smith, a Democrat, to compete for the nomination of the Republican Party in the New York mayoral election. The United States District Court for the Southern District of New York entered a conviction judgment on two counts of wire fraud, two counts of violating the Travel Act, and one count of conspiracy to commit both substantive offenses. Halloran was sentenced to 120 months' imprisonment. The Court of Appeals affirmed the judgment.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...93787/1/hilite/


Extended Summary: Daniel J. Halloran was a Republican member of the New York City Council representing the 19th District in Queens. The charges against him resulted from an investigation by an undercover FBI agent, who went by the name Raj, and a one-time aspiring real estate developer with ties to the Orthodox Jewish community, who was working with the FBI pursuant to a cooperation agreement. Under the first scheme, they bribed Halloran to divert $40,000 to $80,000 in member items (discretionary funding that is available to City Council members for distribution to nonprofit organizations in their districts) to a fictitious entity purportedly controlled by Raj.

The second scheme dealt with the New York mayoral election. Under New York's Wilson-Pakula law, a candidate seeking the nomination of a party of which he is not a member must obtain the consent of the appropriate party committee - an authorization known in the New York political world as a "Wilson-Pakula" - before filing a designating petition allowing him to compete in the primary election. Malcolm Smith, a Democratic state senator, was weighing a run for mayor of New York. Because the field of Democratic mayoral candidates was crowded, he was contemplating running as a Republican. Halloran was paid to help Smith bribe Republican Party officials to obtain the Wilson-Pakula authorization.

Halloran challenged the sufficiency of the evidence supporting his convictions for the first scheme arguing that there was insufficient evidence to support a finding that he acted with the requisite intent. The Court of Appeals found, however, that Halloran had not identified any evidence that conclusively rebutted the most natural inference to be drawn from his dealings with the FBI agent: that he intended to arrange for them to obtain discretionary funding. Rather, the court found the evidence adequately supported that inference and the jury was entitled to disbelieve evidence to the contrary.

Halloran also challenged his conviction of violating the Travel Act by participating in the Wilson Pakula Scheme. A Travel Act conviction based on bribery requires an underlying violation of a federal or state bribery statute. The Second Circuit rejected this second challenge because, it said, Halloran's actions violated the New York State bribery statute. Finally, the Second Circuit rejected challenges to the Travel Act conviction raised by Halloran based upon constitutional vagueness and First Amendment grounds and, thus, affirmed the judgment of the district court.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...93787/1/hilite/


Panel (if known): Circuit Judges Calabresi, Lynch and Lohier

Argument Date: 1/26/2016

Date of Issued Opinion:
4/28/2016

Docket Number:
No. 15-996-cr

Decided: Affirmed

Case Alert Author: Nigyar Alieva

Counsel: Jonathan I. Edelstein, Edelstein & Grossman, for Defendant Appellant; Daniel J. Halloran, pro se; Jessica Feinstein (Karl Metzner, on the brief), Assistant United States Attorneys, for Preet Bharara, United States Attorney for the Southern District of New York, for Appellee.

Author of Opinion: Judge Lynch

Circuit:
2nd Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 04/29/2016 07:24 AM     2nd Circuit     Comments (0)  

April 27, 2016
  Legg et al. v. Ulster County et al.
Headline: Second Circuit, Applying New Supreme Court Precedent, Reinstates Pregnancy Discrimination Claim Against Ulster County

Area of Law: Labor and Employment

Issue Presented: Whether an employer's policy allowing "light duty" assignments only for employees injured on the job can qualify as pregnancy discrimination under Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act of 1978

Brief Summary: Ann Marie Legg, a corrections officer at the Ulster County Jail, became pregnant. Her doctor deemed her pregnancy high-risk and recommended that she be in a "light duty" position that avoided direct contact with inmates. However, her supervisor refused to officially place her in a light-duty position, based on a workplace policy of only providing light-duty assignments for work-related injuries or illnesses. Ultimately, after a major health care due to a physical brush with an inmate, Legg was forced to take time off until after she gave birth. Legg then sued the County and several officials in the Northern District of New York, alleging that the denial of her request for an accommodation amounted to pregnancy discrimination in violation of Title VII. The district court ultimately rejected her claim, concluding that the policy of only providing light-duty work to employees injured on the job did not amount to pregnancy discrimination because it "applied across the board to everyone." Legg appealed, and before her case was decided, the Supreme Court of the United States decided Young v. United Parcel Service, Inc., in which it held that a facially neutral policy can indeed amount to pregnancy discrimination in certain circumstances. The Second Circuit applied this new precedent to Legg's case, and concluded that she had adduced enough evidence to satisfy this standard and have her claims heard by a jury. Accordingly, it vacated the dismissal of her case and remanded it for trial.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...b369a494985/2/hilite/

Extended Summary: Under Title VII of the Civil Rights Act of 1964, employment discrimination based on a person's sex is prohibited. The Pregnancy Discrimination Act of 1978 amended Title VII to make clear that sex discrimination includes pregnancy discrimination, and that "women affected by pregnancy, childbirth, or related medical conditions are to be treated the same as others not affected, but similar in their abilities to work." In 2015, the Supreme Court decided Young v. United Parcel Service, Inc., 135 S. Ct. 1338 (2015), which held that an employer's facially neutral accommodation policy can give rise to an inference of pregnancy discrimination if it imposes a significant burden on pregnant employees that is not justified by the employer's non-discriminatory explanation.

In Young, which had facts similar to Legg's case, UPS refused to accommodate a pregnant mail carrier's request for a "light-duty" position. There, the employee was responsible for moving packages weighing up to seventy pounds, but her doctor had recommended she lift nothing heavier than twenty pounds during her pregnancy. UPS refused to accommodate her, however, explaining that it only offered "light-duty" accommodations to employees who had been injured on the job, lost certification, or suffered from a disability. The Supreme Court ultimately rejected UPS's argument that this sort of facially neutral accommodations policy could never amount to pregnancy discrimination. Instead, the Supreme Court explained that such facially neutral policies can qualify as pregnancy discrimination if they impose a significant burden on pregnant employees that is not justified by the employer's non-discriminatory explanation.

The Supreme Court further articulated the framework that courts should use in analyzing these sorts of cases. First, the plaintiff must show that she was pregnant and sought accommodation, that the employer did not accommodate her, and that the employer did accommodate others who were similar in their inability to work. Once the plaintiff makes this showing, the employer must articulate a legitimate, nondiscriminatory reason for its action--such as a facially neutral accommodations policy. At that point, the employee must show that the real reason for the policy is discrimination. The Court added that a pregnant employee can make this showing by presenting "sufficient evidence that the employer's policies impose a significant burden on pregnant employers, and that the employer's legitimate, nondiscriminatory reasons are not sufficiently strong to justify the burden." One way to prove that the policy imposes a significant burden on pregnant employees is to show that it accommodates a larger percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers.

The Second Circuit applied this new framework to Legg's case, and concluded that under Young, she had enough evidence to go to a jury, and that judgment as a matter of law was inappropriate. First, Legg had proved that she sought a light duty accommodation while she was pregnant, and the County did not accommodate her, even though the county did provide light duty accommodations to other employees with a similar ability or inability to work. Next, the county had articulated a legitimate, non-discriminatory justification for its policy-- that under New York State law, municipalities are required to pay corrections officers injured on the job, but not other employees who are unable to work for other reasons. Thus, the burden shifted back to Legg to show pretext. Here, the Second Circuit concluded that a reasonable jury could find that Legg provided enough evidence to prove this justification was a pretext. The court noted that there were inconsistencies in the various officers' explanations of the accommodations policy, and had barely mentioned the above justification at trial. Moreover, the evidence clearly indicated that the policy accommodated a larger percentage of nonpregnant workers than pregnant workers, given that no pregnant employees were eligible for accommodation under the policy. The court noted that a jury would not have to rule for Legg on remand, but that she was certainly entitled to have these issues decided by a jury.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...b369a494985/2/hilite/

Panel: Circuit Judges Parker, Lynch, and Carney

Argument Date: 10/8/2016

Date of Issued Opinion: 4/26/2016

Docket Numbers: 14-3636 (L), 14-3638 (XAP), 14-4635 (CON)

Decided: Vacated and remanded.

Case Alert Author: Ryan Koleda

Counsel: Stephen Bergstein, Bergstein & Ullrich, LLP, Chester, New York; Brendan Klaproth, Klaproth Law PLLC, Washington, D.C.; and Joseph Ranni, Ranni Law Offices, Florida, New York, for Plaintiff-Appellant and Plaintiff-Cross Appellee.
Matthew J. Kelly (Amanda Davis Twinam, on the brief), Roemer Wallens Gold & Mineaux LLP, Albany, New York, for Defendants-Appellees-Cross-Appellants.

Author of Opinion: Judge Parker

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 04/27/2016 02:06 PM     2nd Circuit     Comments (0)  

April 25, 2016
  National Football League Management Council et al. v. National Football League Players Association et al.
Headline: Second Circuit Reverses District Court and Upholds Arbitration Award Suspending Patriots Quarterback Tom Brady for Four Games as Within the Broad Arbitration Powers of the NFL Commissioner's Office Under the NFL Collective Bargaining Agreement

Area of Law: Labor/Collective Bargaining/Arbitration

Issue(s) Presented: Whether NFL Commissioner Roger Goodell's decision to suspend Tom Brady for four games was a proper exercise of the Commissioner's broad discretion under the collective bargaining agreement.

Brief Summary: Following the 2015 American Football Conference ("AFC") Championship playoff game between the New England Patriots and the Indianapolis Colts, it was alleged that the Patriot's quarterback, Tom Brady, was involved in a scheme, coined "Deflategate" in the media, to deflate footballs below the permissible range (ostensibly making them easier to throw and catch). After an investigation, the National Football League ("NFL") suspended Brady for four games. Brady then requested arbitration under the parties' collective bargaining agreement and NFL Commissioner, Roger Goodell, served as the arbitrator. Goodell entered an award confirming the discipline and the parties sought judicial review. The United States District Court for the Southern District of New York vacated the award, holding that Brady had insufficient notice that his conduct could result in a suspension and that the proceedings deprived Brady of fundamental fairness.

On appeal, the Second Circuit majority reversed the lower court's decision, holding that the Commissioner properly exercised his broad discretion under the parties' collective bargaining agreement. The court found that the arbitration proceedings and decision met the minimum legal standards established by the Labor Management Relations Act and remanded with instructions to confirm the arbitration award.

To read the full opinion, visit:
">http://www.ca2.uscourt.../de.....5/1/hilite/


Extended Summary: Following the January 18, 2015 AFC Championship Game between the Patriots and the Colts, during which officials found several of the Patriots game balls were inflated less than the permissible range, the NFL retained Theodore V. Wells, Jr. Esq. and the law firm of Paul, Weiss, Rifkin, Wharton & Garrison to conduct an investigation into possible impermissible ball tampering. A 139-page report (the "Wells Report), issued the following May, concluded that it was "more probable than not" that two members of the Patriot's equipment staff, Jim McNally and John Jastremski, had deliberately released air from Patriot game balls shortly after they were examined by game officials. On Patriots quarterback Tom Brady's role, the Wells Report concluded - based largely on text exchanges between the McNally and Jastremski referencing Brady and the fact that Brady and Jastremski spoke on the telephone for the first time in six months and met in the locker room on the day the investigation was announced - that it was "'more probable than not' that Brady was 'at least generally aware'" of McNally and Jastremski's actions" and found it unlikely the two men would have deflated the balls without Brady's "'knowledge, approval, awareness, and consent.'" The Wells Report also noted that Brady's failure to make electronic information (such as texts and emails) and documents available impaired their investigation.

Thereafter, on May 11, 2015, Brady was notified that Commissioner Goodell had authorized a four-game suspension under Article 46 of the collective bargaining agreement between the NFL and Player's Association (the "CBA") based upon the Wells Report. Article 46 authorizes the NFL commissioner to, "take disciplinary action against a player whom he 'reasonably judge[s]' to have engaged in 'conduct detrimental to the integrity of, or public confidence in, the game of professional football.'" Brady appealed his suspension and requested arbitration and Commissioner Goodell exercised his discretion under the CBA to serve as the arbitrator. The Players' Association, acting on behalf of Brady, filed multiple motions including seeking Goodell's recusal, requesting production of Paul, Weiss's internal investigation notes, and moving to compel NFL General Counsel to testify about his involvement in the Wells Report. Goodell denied the motions. Also about this time, it was revealed for the first time that Brady had instructed his assistant to destroy the cellphone he had used since early November 2014 on the same day Brady was to be interviewed by the Wells investigative team.

Following the arbitration hearing, Goodell issued a final ruling upholding the four-game suspension. In his ruling, Goodell drew an adverse inference that Brady's cellphone would have contained evidence inculpating Brady in the scheme, citing Brady's "deliberate effort" to prevent the investigators' access to information he had been asked to produce. The decision also likened Brady's conduct to that of a steroid user seeking a game advantage and concluded that a four-game suspension - the same penalty typically imposed for first-time steroid use - was, thus, an appropriate penalty.

Both parties then initiated actions in federal court; the NFL to confirm the arbitration award under the Labor Management Relations Act, and the Players' Association to vacate the award. The United States District Court for the Southern District of New York granted the Player's Association motion vacating the award. The district court based its decision on two grounds: (1) that Brady lacked adequate notice that deflation of footballs could lead to a four-game suspension because the applicable CBA provisions indicated fines would be imposed for misconduct; and (2) that Goodell deprived Brady of fundamental fairness by denying the motions to compel the NFL General Counsel to testify about his role in the investigation and to compel production of the investigative notes used to prepare the Wells Report.

The Second Circuit majority reversed the judgment of the district court and remanded with instructions that the arbitration award be confirmed. Describing the role of federal courts in reviewing arbitration awards as "narrowly circumscribed and highly deferential," the Second Circuit majority emphasized that it is not its role to determine if Brady participated in a scheme to deflate footballs or if he received the appropriate discipline. Rather, it is "simply [to] ensure that the arbitrator was 'even arguably construing or applying the contract and acting within the scope of his authority' and did not 'ignore the plain language'" of the CBA.

The Second Circuit majority rejected the district court's finding that Brady lacked notice that his conduct could result in a suspension, finding Article 46 gave Goodell broad authority to discipline Brady for conduct he believes "might undermine the integrity of the game" and that, at the very least, Goodell's interpretations of the governing provisions could easily withstand the standard on review that they be at least "barely colorable." The majority found Goodell was also within his discretion in drawing an analogy between Brady's conduct and steroid use. The majority further rejected the district court's finding that Brady was disciplined without notice for "general awareness of misconduct on the part of others," finding, instead, that the award made clear Brady was disciplined because he "participated" in the ball-tampering scheme and "obstructed the investigation" when he arranged for the destruction of his cellphone. Finally, the majority also found Goodell acted within his discretion in refusing to compel the NFL general counsel's testimony or production of the investigators' internal notes, because arbitrators do not need to follow strict evidentiary rules and the CBA mandated only that exhibits the parties will rely upon be exchanged.

In a dissenting opinion, Chief Judge Katzmann argued the district court's decision should be affirmed because Goodell changed the factual basis for the discipline by drawing an inverse inference from Brady arranging for destruction of his cellphone and, by setting out an unprecedented punishment, the Goodell acted beyond his authority and asserted his own 'brand' of justice, rather than that explicitly outlined in the CBA.

To read the full opinion please visit:
http://www.ca2.uscourts.gov/de...efe9a0c1da15/1/hilite/

Panel: Katzmann, Parker and Chin

Argument Date: 3/3/2016

Date of Issued Opinion: 4/25/2016

Docket Numbers: 15-2801 (L), 15-2805 (CON)

Decided: Reversed and remanded with instructions to confirm the arbitration award

Case Alert Author:
Gavin Michael Strube

Counsel: Paul D. Clement (Erin E. Murphy, Michael H. McGinley, on the brief), Bancroft PLLC, Washington, D.C.; Daniel L. Nash, Pratik A. Shah, Stacey R. Eisenstein, Gregory W. Knopp & James E. Tysse, Akin Gump Strauss Hauer & Feld LLP, Washington, D.C., on the brief, for Plaintiff‐Counter‐Defendant‐Appellant and Defendant‐Appellant.
Jeffrey L. Kessler (David L. Greenspan, on the brief), Winston & Strawn LLP, New York, NY; Steffen N. Johnson, Winston & Strawn LLP, Washington, D.C., on the brief; Andrew S. Tulumello, Gibson, Dunn & Crutcher, Washington, D.C., on the brief, for Defendant‐Counter‐Claimant‐Appellee and Counter‐Claimant‐Appellee.

Author of Opinion: Parker (for majority); Katzmann (for dissent)

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 04/25/2016 07:23 PM     2nd Circuit     Comments (0)  

  Schoenefeld v. Schneiderman
Headline: Second Circuit Upholds New York's Requirement That Nonresident Members of the Bar Maintain a Physical Office Within New York State

Area of Law: Constitutional

Issue Presented: Whether a New York law requiring nonresident members of the bar to maintain a New York State office for the "transaction of law business" violates the Privileges and Immunities Clause of the U.S. Constitution.

Brief Summary: Plaintiff-appellee Ekaterina Schoenefeld--a New Jersey resident who is licensed to practice law in New York but lacks a home or physical office in the state--argued that a New York state law requiring nonresident attorneys to maintain a physical office within the state violated the United States Constitution's Privileges and Immunities Clause. She pointed out that attorneys who are residents of New York can satisfy this requirement merely by practicing from their homes, while nonresidents are forced to incur the costs of a New York office. She prevailed in the Northern District of New York, but on appeal, the Second Circuit reversed. The court explained that the requirement did not violate the Privileges and Immunities Clause because it had not been enacted for the protectionist purpose of burdening out-of-state citizens, but instead for the nonprotectionist purpose of ensuring that all licensed New York attorneys had a physical presence in the state to receive process.

To read the full opinion, please visit http://www.ca2.uscourts.gov/de...c8428f-196f-4fb9-8ac2- a3fbe6bf14ce/1/ doc/11-4283_complete_opn.pdf#xml= http://www.ca2.uscourts.gov/de...3fbe6bf14ce/1/hilite/.

Extended Summary: The plaintiff-appellee, Ekaterina Schoenefeld, is a resident of New Jersey and is licensed to practice law in New Jersey, New York, and California. She maintains an office in New Jersey, but not in New York. Schoenefeld has declined requests to represent clients before New York state courts specifically to avoid violating New York Judiciary Law § 470. This statute provides that nonresident members of the New York bar are required to maintain a physical "office for the transaction of law business" within the state. Schoenefeld argued that the office requirement imposed by § 470 on nonresident members of the New York bar violates the Privileges and Immunities Clause of the United States Constitution, which states that "the Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several states," and is intended to place citizens of each state upon equal footing. Here, Schoenefeld argued, the New York requirement burdens nonresidents' right to practice law in New York, because resident attorneys of the state are not required to have offices distinct from their homes, but nonresident attorneys are.

Schoenefeld prevailed in the Northern District of New York, which declared § 470 unconstitutional. On appeal, New York State Attorney General Eric Schneiderman, on behalf of the defendants, initially argued that there was no Privileges and Immunities Clause concern because § 470's office requirement could be interpreted to only require an address in the state for accepting personal service. The Second Circuit certified the question of how to interpret the statute to the New York Court of Appeals, which held that a physical office was required, and that a mere mailing address was insufficient.

Given that conclusion, the Second Circuit proceeded to analyze whether the physical office requirement was, in fact, unconstitutional. The court explained that under the Supreme Court's most recent decision interpreting the Privileges and Immunities Clause, the key question is whether a challenged state law was enacted for the protectionist purpose of burdening out-of-state citizens. The Second Circuit concluded that § 470 was not enacted for the protectionist purpose of favoring New York residents in their ability to practice law, or, conversely, of burdening nonresident attorneys practicing in the state. Rather, the court explained, § 470 was initially enacted to avoid service of process concerns, by ensuring that all licensed attorneys in the state had a physical presence on which process could be served. The court acknowledged that the "requirement is now largely vestigial as a means for ensuring process," given further developments in New York procedure, but explained that "the fact remains that the law was enacted for [a] nonprotectionist purpose, and Schoenefeld has adduced no evidence of a protectionist intent to afford some economic advantage to resident New York lawyers."

The court added that the law was being applied equally to New Yorkers and non-New Yorkers: every attorney admitted to the New York bar needed a physical presence in the state. Moreover, there was no evidence that significant numbers of New York attorneys were practicing from their homes rather than their offices.

Judge Hall dissented, concluding that the majority had misinterpreted the Supreme Court as requiring evidence of a protectionist intent for purposes of a successful Privileges and Immunities challenge. He asserted that New York "has chosen to discriminate against nonresident attorneys with regard to their right to pursue a common calling, and it has failed to provide a substantial justification for that discrimination."

Panel: Judges Raggi, Hall, and Carney.

Argument: 06/04/2015

Date of Issued Opinion: 04/22/2016

Docket Number: 11‐4283‐cv

Decided: Reversed and Remanded

Case Alert Author: Steven Manganelli

Counsel: Schoenefeld Law Firm, LLC, Princeton, New Jersey, pro se, for the plaintiff-
appellee. Laura Etlinger, Assistant Solicitor General (Barbara D. Underwood, Solicitor General; Andrea Oser, Deputy Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, Albany, New York, for Defendants‐Appellants. David B. Rubin, Esq., Metuchen, New Jersey, for Amicus Curiae The New Jersey State Bar Association, in support of Plaintiff‐ Appellee. Leah M. Nicholls, Brian Wolfman, Institute for Public Representation, Washington, D.C., for Amici Curiae New York‐ Licensed Nonresident Attorneys, in support of Plaintiff‐Appellee.

Author of Opinion: Judge Raggi (majority); Judge Hall (dissent)

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 04/25/2016 02:10 PM     2nd Circuit     Comments (0)  

April 13, 2016
  In re Pfizer Inc. Securities Litigation - Second Circuit
Headline: Second Circuit Vacates Summary Judgment Dismissal of Pfizer Securities Class Action Suit Back to District Court

Area of Law: Securities Law; Evidence

Issue(s) Presented: Whether the district court erred by excluding plaintiffs' expert on loss causation and damages from testifying at trial.

Brief Summary:
Plaintiffs-Appellants, Teachers' Retirement System of Louisiana and other investors, brought a class action against Pfizer, Inc. and several of its directors and officers, pursuant to the Securities Exchange Act, for making fraudulent misrepresentations and fraudulently omitting to disclose information regarding the safety of two of its drugs, Celebrex (celecoxib) and Bextra (valdecoxib). Plaintiffs allege that when the market eventually learned of the cardiovascular risks associated with these drugs, the value of Pfizer's shares fell, harming shareholders in the process.

The United States District Court for the Southern District of New York granted Pfizer's motion in limine to exclude Plaintiffs' expert on loss causation and damages from testifying at trial. Left with no testimony on these issues, Plaintiffs could not establish key elements of their claims, and the district court granted Pfizer's motion for summary judgment. The Second Circuit vacated summary judgment and remanded the case back to the district court, holding that the district court abused its discretion in precluding the expert's testimony about loss causation and damages in its entirety, rather than prohibiting only testimony about certain price adjustments made to calculate loss.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...ecff1c9cc6a/2/hilite/

Extended Summary: Celebrex and Bextra are part of a broad class of medicines known as non-steroidal anti-inflammatory drugs, which are used to treat chronic pain and inflammation. Before 1999, this class of drugs had a common problem; patients who used the drugs over a long period of time often developed stomach ulcers and other gastrointestinal problems. As a result, two pharmaceutical manufacturers - Merck & Co., Inc. and Searle - began researching a type of non-steroidal anti-inflammatory drug, known as a Cyclooxygenase 2 ("COX-2") inhibitor, which could reduce pain and inflammation without causing gastrointestinal distress. Both companies ultimately succeeded, with Merck creating a drug called Vioxx, and Searle creating Celebrex.

Pfizer, a research-based, global pharmaceutical company that develops, manufactures and markets prescription medicines first became involved with COX-2 inhibitors through Searle. In February 1998, Pfizer signed a series of agreements with Searle in which it agreed to, among other things, help market Celebrex. Searle later transferred control over Celebrex to Pharmacia through a merger in early 2000. Pfizer continued to fulfill its obligations until April 16, 2003, when it obtained the exclusive rights to manufacture, promote, and sell Celebrex and Bextra by purchasing Pharmacia.

Plaintiffs contend that, while Celebrex and Bextra eliminated the gastrointestinal issues associated with non-steroidal anti-inflammatory drugs, the drugs presented a different, dangerous side effect. As early as 1998, they claim, Pfizer and Searle knew about studies linking the COX-2 inhibitors to cardiovascular problems in patients, but because Celebrex was an enormous commercial success, Searle issued press releases and other public statements denying that the drugs presented such risks. When ownership of Celebrex passed to Pharmacia, and later to Pfizer, both companies continued to tout its safety, as well as the safety of Bextra, notwithstanding the discovery of additional medical evidence tying the drugs' use to heightened cardiovascular risks.

According to Plaintiffs, the press releases and public statements that Pharmacia and Pfizer issued during the class period had the effect of maintaining the public's misperception about the safety of Celebrex and Bextra. Plaintiffs claim that once information about studies linking the drugs to cardiovascular risks reached the public eye, Pfizer's share prices fell as investors reassessed the value of Celebrex and Bextra in light of the newly discovered risks. Plaintiffs brought a class action claiming Pfizer and several of its officers and directors misstatements concerning the cardiovascular risks associated with these drugs violated §§ 10(b), 20(a), and 20A of the Securities Act of 1934.

Plaintiffs retained Daniel R. Fischel, Professor Emeritus of Law and Business at the University of Chicago Law School and a former dean of that institution, to issue an expert report, based upon an "event study," regarding Pfizer's stock price change after the market learned about the cardiovascular risks associated with Celebrex and Bextra to establish loss causation and Plaintiffs' damages. Following discovery, the United States District Court for the Southern District of New York issued an order pursuant to Federal Rule of Evidence 702 excluding Fischel from testifying at trial. The district court reasoned that Fischel's failure to disaggregate the impact of Pfizer's alleged misrepresentations and those made by Searle and Pharmacia in his loss causation analysis rendered "his opinions unhelpful to the jury" in calculating damages caused by Pfizer alone. The court additionally rejected the methodology applied by Fischel in a supplement to his opinion adjusting his findings to account for the district court's determination in an earlier summary judgment ruling that stock-price declines on two particular dates could not reasonably be attributed to Pfizer's alleged misrepresentations. Plaintiffs could not establish essential elements of their claims without Fischel's testimony and, accordingly, the district court granted summary judgment in favor of Pfizer.

The Second Circuit vacated summary judgment, holding that the district court's rationale for excluding the testimony was inadequate to justify excluding it in its entirety. The Second Circuit held that, even assuming without deciding that Pfizer lacked authority over Searle and Pharmacia statements as Pfizer contends, Fischel's opinion did not need to account for the impact of the other companies' alleged misrepresentations to be helpful to the jury. The court reasoned that Fischel did not need to disaggregate the impact of the other companies' statements because Plaintiffs' "inflation maintenance theory" alleged that Pfizer concealed the same information as Searle and Pharmacia and, thus, is liable for the full extent of Plaintiffs' losses. The Second Circuit further held that, although the district court did not abuse its discretion in rejecting Fischel's methodology for adjusting his findings to account for stock-price fluctuation on two dates not attributable to alleged fraud, the court should have allowed Fischel to present his other findings. Holding that the district court abused its discretion in excluding the expert testimony in its entirety, the Second Circuit vacated the judgment and remanded to the district court for further proceedings.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...ecff1c9cc6a/2/hilite/

Panel (if known): Circuit Judges Kearse, Pooler, and Livingston

Argument Date: 5/26/2015

Date of Issued Opinion:
4/12/2016

Docket Number:
No. 14-2853-cv

Decided: Vacated and Remanded

Case Alert Author:
Nigyar Alieva

Counsel:
Gregory P. Joseph, Douglas J. Pepe, Sandra M. Lipsman, Joseph Hage Aaronson LLC, Jay W. Eisenhofer, James J. Sabella, Charles T. Caliendo, Grant & Eisenhofer P.A., Jonathan S. Massey, Massey & Gail LLP, David Kessler, Andrew L. Zivitz, Matthew L. Mustokoff, Kessler Topaz Meltzer & Check, LLP, for Plaintiff-Appellants; Miguel A. Estrada, Mark A. Perry, Gibson, Dunn & Crutcher LLP, Beth A. Wilkinson, Charles E. Davidow, Alexandra M. Walsh, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Andrew J. Ehrlich, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Lynn K. Neuner, George S. Wang, Simpson, Thacher & Bartlett LLP, John R. Wellschlager, DLA Piper LLP (US), Jennifer L. Spaziano, Skadden, Arps, Slate, Meagher & Flom LLP, George A. Stamboulidis, Baker & Hostetler LLP, Pamela R. Chepiga, Allen & Overy LLP, Michael L. Calhoon, Julie B. Rubenstein, Baker Botts LLP, for Defendant-Appellees

Author of Opinion:
Judge Livingston

Case Alert Circuit Supervisor:
Professor Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 04/13/2016 07:53 AM     2nd Circuit     Comments (0)  

March 16, 2016
  Harris v. Fischer
Headline: Second Circuit Reiterates that Inmates Retain a Limited Right to Bodily Privacy Under the Fourth Amendment, and Vacates Dismissal of Female Prisoner's Challenge to a Male Guard's Inspection of Her Genitalia

Area of Law: Prisoners' Rights

Issue Presented: Whether the district court erred in granting the defendant prison officials' motion for summary judgment when there were claims that the defendants violated the plaintiff's Fourth and Eighth Amendment rights by holding her down so that a male officer could inspect her genitalia.

Brief Summary: The plaintiff, Audra Lynn Harris, was incarcerated at Bedford Hills Correctional Facility, located in Bedford Hills, New York, for burglary and criminal contempt. Representing herself, she brought suit in the United States District Court for the Southern District of New York, asserting multiple claims relating to her treatment in prison. The particular focus of this appeal was her claim that, after she ripped open a mattress and tried to use the mattress's cotton to block prison officials from watching her while she changed clothes, she was subjected to a strip search in which a male officer inspected her genitalia to see if she was hiding cotton there. Although the district court dismissed this claim on summary judgment, the Second Circuit vacated, holding that there were material factual disputes and that the district court's analysis rested on an incomplete assessment of law, particularly the Fourth Amendment's protection of an inmate's right to bodily privacy.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...c88880246e4/2/hilite/

Extended Summary: Plaintiff, Audra Lynn Harris, alleges that while she was an inmate at Bedford Hills Correctional Facility ("the facility"), four corrections officers violated the Fourth and Eighth amendments when they infringed upon her bodily privacy. When Harris was incarcerated at the facility, she received a designation indicating that she showed symptoms of major/serious mental illness and needed care, treatment, and support from the mental health staff. In addition to a plethora of other grievances and allegations, Harris alleged an incident in which she was ordered into an observation room and directed to change into a smock. When she attempted to put the smock on over her clothing to get undressed, the officers knocked her down and pulled off her clothing, injuring her in the process. After the officers threw the smock back at Harris, she requested medical assistance, but the officers refused. Because of this incident, Harris pulled cotton out of her mattress and used water to paste it onto the windows of the observation room.

When the defendants, Officers Ella Anderson, Valerie Bryant, Robin Trotter, and Michael Miller, entered her room to remove the cotton from the windows, Miller asked Harris if she had any more cotton. When Harris said no, the three female officers, Anderson, Bryant, and Trotter, threw Harris on the ground, lifted her smock, and forcibly opened her legs to allow the male officer, Miller, to visually inspect her genitalia for additional cotton. In her opposition to the defendants' summary judgment motion, Harris provided affidavits and sworn testimony regarding this incident. The defendants provided no such proof to dispute the incident, but merely asserted in their briefs that it did not occur. The district court dismissed Harris's complaint in full, and Harris appealed.

Under the Fourth Amendment of the United States Constitution, the prohibition of unreasonable searches does not apply within the confines of a prison cell. However, inmates do have a limited right to bodily privacy under the Fourth Amendment. When an inmate brings a Fourth Amendment claim challenging an isolated search (as opposed to a prison regulation or policy), courts apply the standard set forth in the Supreme Court's Bell v. Wolfish decision. Under this framework, courts must do a case-specific balancing of the need for the search against the invasion of personal rights that the search entails. This balancing test requires courts to consider "the scope of the particular intrusion, the manner in which it is conducted, the justification for initiating it, and the place in which it is conducted."

In applying this balancing test to these facts, the Second Circuit noted that a visual body cavity search, like the one conducted here, is particularly invasive, especially when conducted by the opposite sex. The court also noted that there was little evidence about the justification for the search, adding that there was no evidence that "possessing cotton, in one's genitalia or elsewhere, violates prison rules." The court emphasized that "inmates retain a limited right of bodily privacy under the Fourth Amendment," and vacated the district court's dismissal of this claim, remanding it for reconsideration in light of this discussion.

As to the plaintiff's Eighth Amendment claim that the search violated her right to be free from cruel and unusual punishment, the Second Circuit concluded that Harris' allegations could lead a factfinder to decide that the defendants used force maliciously and sadistically. Thus, it similarly vacated the district court's dismissal of this claim and remanded it for reconsideration. It also suggested that on remand, the district court consider appointing pro bono counsel for Harris - who had been representing herself - and permitting the parties to take further discovery.

Panel: Chief Judge Katzmann; Circuit Judge Kearse; District Judge Schofield, sitting by designation

Argument Date: 01/15/2016

Argument Location: New York, NY

Date of Issued Opinion: 03/15/2016

Docket Number: 14-2957

Decided: Vacated and Remanded

Case Alert Author: Ryan Koleda

Counsel: Arun S. Subramanian, Susman Godfrey L.L.P., New York, N.Y., for Plaintiff-Appellant; David Lawrence III, Assistant Solicitor General (Barbara D. Underwood, Solicitor General, and Michael S. Belohlavek, Senior Counsel, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, New York, N.Y., for Defendants-Appellees

Author of Opinion: Per Curiam

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Emily Gold Waldman

    Posted By: Emily Waldman @ 03/16/2016 09:38 PM     2nd Circuit     Comments (0)  

March 5, 2016
  In re Sanofi Sec. Litig., AG Funds, L.P. v. Sanofi - Second Circuit
Headline: Second Circuit Holds Pharmaceutical Companies' Opinions About Drug's Likely FDA Approval Are Not Actionable Under New Federal Securities Laws Standards Laid Out By Supreme Court's Recent Omnicare Decision.

Area of Law: Securities Law

Issue(s) Presented: Whether the district court correctly dismissed plaintiffs' securities claims for failure to plead a material misstatement or omission under the standard recently articulated by the Supreme Court in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund.

Brief Summary: The defendants, pharmaceutical company Sanofi, along with its predecessor and three company executives, were sued for allegedly issuing materially false or misleading statements regarding the breakthrough drug, Lemtrada, designed to treat multiple sclerosis ("MS"). The consolidated plaintiffs, individual and corporate stockholders that invested and purchased contingent value rights ("CVRs"), were entitled to cash payouts upon achievement of certain "milestones" connected to the success of Lemtrada. One important milestone, that was not met, was obtaining U.S. Food and Drug Administration ("FDA") approval for Lemtrada by March 31, 2014. The plaintiffs alleged that because the defendants failed to disclose the FDA's concerned feedback regarding the use of only single-blind studies to test Lemtrada, the defendants misled investors as to the likelihood of meeting the "milestones," upon which the CVRs value partially depended, thereby artificially inflating the value of the CVRs. The plaintiffs argued defendants false or misleading statements violated several provisions of the Securities Exchange Act of 1934, the Securities Act of 1933, and state blue sky laws. The defendants moved to dismiss the consolidated complaints for failure to state a claim and the United States District Court for the Southern District of New York granted the defendants' motion.

On appeal, the Second Circuit affirmed, examining the allegations under the recent United States Supreme Court decision, Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, which refined the standard for analyzing whether a statement of opinion is materially misleading. Recognizing that the new U.S. Supreme Court precedent disturbed previous Second Circuit precedent, the Second Circuit still found that plaintiffs failed to allege that defendants made materially misleading statements of opinion and affirmed dismissal of plaintiffs' complaints for failure to state a claim.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...e3deaf9f0f0/2/hilite/

Extended Summary:
Lemtrada, a drug currently owned by the pharmaceutical company Sanofi, has long shown great potential as a treatment for victims of multiple sclerosis ("MS"). Lemtrada has a unique treatment cycle that requires only two annual treatment courses rather than traditional MS treatments which require a daily or weekly dosing regimen. In part, because of Lemtrada's unique treatment design, it was only clinically tested with a single‐blind study, rather than a double-blind study. During a single‐blind study, either the researcher or the patient does not know which drug was administered. By contrast, during a double‐blind study, neither the patient nor the researcher knows which drug was administered. At least as far back as 2002, when Lemtrada was then-owned by the pharmaceutical company Genzyme, the FDA expressed concern about the use of only single‐blind studies for the drug. However, the FDA also stated in various opinions that single-blind studies might be adequate to support approval for the drug if the effect is large.

In 2010 when Sanofi began to acquire Genzyme, the two companies could not agree on a value for Lemtrada. Sanofi ultimately issue contingent value rights ("CVRs") to Genzyme shareholders as part of the acquisition. The CVRs entitled investors and holders to cash payments upon the achievement of certain "milestones" connected to the success of Lemtrada, such as obtaining FDA approval for the drug by March 31, 2014. Following its acquisition of Genzyme, Sanofi continued to speak optimistically about, and make statements endorsing the effectiveness of, Lemtrada. However, the FDA rejected Lemtrada's initial application in 2013, and the value of the CVRs significantly decreased. The drug was ultimately approved by the FDA, but not until November, 2014, well after the "milestone" deadline. The plaintiffs, individuals and corporations that invested and purchased CVRs, subsequently sued for violations of §§ 10(b), 18, and 20(1) of the Securities Exchange Act of 1934, §§ 11 and 12 of the Securities Act of 1933 and state blue sky laws, alleging defendants' issued materially false or misleading statements or omissions regarding Lemtrada.

In its opinion, the Second Circuit affirmed the conclusions of the district court, and its dismissal of the plaintiffs' complaints for failure to state a claim. However, the Second Circuit wrote to principally examine the impact of the U.S. Supreme Court's recent intervening decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 135 S. Ct. 1318 (2015), which was decided after the district court rendered its decision and refined the Second Circuit's own standard for analyzing whether a statement of opinion is materially misleading under Fait v. Regions Financial Corp., 655 F.3d 105 (2d Cir. 2011). The new standard under Omnicare requires that opinions, though sincerely held and otherwise true as a matter of fact, may nonetheless be actionable if the speaker omits information whose omission makes the statement misleading to a reasonable investor. Under this new standard, the core inquiry is whether the omitted facts would conflict with what a reasonable investor would take from the statement itself.

Applying Omnicare to three specific groups of statements of opinion made by defendants, that the district court originally reviewed, the Second Circuit found that the plaintiffs still failed to allege that defendants made materially misleading statements of opinion. The first set of statements related to Sanofi's expectation that the FDA would approve Lemtrada before the "milestone" deadline. The second and third set of statements related to Sonofi's statements optimistically speaking about, and endorsing the effectiveness of, Lemtrada.

As to the first statement of opinion, the Second Circuit firstly found that defendant's optimism about the approval of Lemtrada was not in conflict with the FDA's concerned comments, which indeed indicated that Lemtrada could be approved if it demonstrated an extremely large effect. The record reflected that Lemtrada's treatment was, in fact, large. Secondly, the Second Circuit found Omnicare does not impose liability for a failure to disclose information that runs counter to an expressed opinion, and stated the defendants were not required to disclose all FDA information cutting against their studies.

As to the remaining statements, the Second Circuit found that generalized statements of subjective optimism do not convey facts about how the issuer has formed an opinion and are not actionable. The court reasoned that no reasonable investor would have inferred that the defendants' issued statements of confidence would suggest that the FDA had not engaged in industry‐standard dialogue about potential deficiencies in either the testing methodology or the drug itself. The Second Circuit concluded that, at bottom, there was an absence of plausible allegations showing a conflict between defendants' statements and the FDA's concerned feedback. Rather, the plaintiffs' allegations regarding defendants' opinions about the Lemtrada results were little more than an argument about the proper interpretation of data, something that the Second Circuit has rejected as a basis for liability. The Second Circuit thus affirmed the decision of the district court under the new standards of Omnicare, finding that not only does securities law not impose an obligation to disclose every piece of information in defendants' possession, but that the plaintiffs' in this case were sophisticated investors who could not claim they were misled by optimistic issued statements regarding the approval and launch of Lemtrada.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...e3deaf9f0f0/2/hilite/

Panel: Circuit Judges Parker, Lohier, and Carney

Argument Date: October 7, 2015

Date of Issued Opinion: March 4, 2016

Docket Number:
15‐588‐cv; 15‐623‐cv

Decided: Affirmed

Case Alert Author: Brad Landau

Counsel: Christopher L. Nelson (James M. Ficaro, Brett D. Stecker, on the brief), The Weiser Law Firm, P.C., Berwyn, PA, Daniella Quitt, Harwood Feffer LLP, New York, NY, on the brief, for Plaintiffs‐Appellants Gen. Partner Glenn Tongue, Deerhaven Capital Management; John B. Orenstein (Harry N. Niska, on the brief), Ross Orenstein & Baudry LLC, Minneapolis, MN, for Plaintiffs‐Appellants AG Funds, L.P. et al.; John Neuwirth (Joshua S. Amsel, Caroline Hickey Zalka, Justin D. D'Aloia, on the brief), Weil, Gotshal & Manges LLP, New York, NY, for Defendants‐Appellees.

Author of Opinion: Circuit Judge Parker

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 03/05/2016 05:40 PM     2nd Circuit     Comments (0)  

  American Freedom v. Metropolitan Transportation Authority
Headline: Second Circuit Affirms That American Freedom Defense Initiative Must File New Complaint to Challenge Metropolitan Transportation Authority's Advertising Standards for New York City Subways and Buses

Area of Law:
Constitutional

Issue(s) Presented: Whether the MTA's adoption of new advertising standards for subways and buses rendered the plaintiffs-appellants' previous First Amendment challenge moot.

Brief Summary: American Freedom Defense Initiative (AFDI), a pro-Israel advocacy organization known for its criticism of Islam, sought to purchase an advertisement for display on the back of MTA buses. The advertisement depicted a "menacing-looking man" whose face and head were largely covered by a head scarf; it included a quotation stating that "Killing Jews is Worship that draws us close to Allah" and then said "That's His Jihad. What's yours?" The MTA refused to display it, citing its policy barring the display of any advertisement reasonably likely to incite violence. AFDI filed suit in the United States District Court for the Southern District of New York, alleging a First Amendment violation. The district court granted AFDI's motion for a preliminary injunction, explaining that although it was not striking down the entire policy, the policy could not be enforced against the ad in question. The MTA subsequently amended its advertising standards, stating that it would no longer allow advertisements that were "political in nature." It then informed AFDI that, under this new policy, it would not display the ad. The district court dissolved the prior injunction, on grounds that it was now moot in light of the policy change, and AFDI appealed. The Second Circuit affirmed, explaining that the MTA's conduct had changed the basis of what the AFDI was now disputing. If AFDI wants to challenge these new advertising standards, it must file an amended complaint.

Extended Summary (if applicable): The Metropolitan Transportation Authority (MTA) accepts paid advertisements to be displayed on its subways and buses. In the past, the MTA had accepted both commercial and non-commercial advertisements, excluding only those advertisements that fall within certain discrete categories, such as, for example, misleading advertisements, advertisements promoting unlawful activity, obscene advertisements, and advertisements expected to incite violence. American Freedom Defense Initiative (AFDI), a pro-Israel advocacy organization known for its criticism of Islam, submitted an advertisement for display on the back of MTA buses. According to the district court, the advertisement portrayed a "menacing-looking man whose head and face are mostly covered by a head scarf. The advertisement included a quote from 'Hamas MTV': 'Killing Jews is Worship that draws us close to Allah.' Underneath the quote, the ad stated: 'That's His Jihad. What's yours?' The bottom of the advertisement included a disclaimer that it was sponsored by [ADFI], and did not imply the MTA's endorsement of the views expressed by the ad." The MTA refused to display the advertisement by using its provision against displaying any advertisements reasonably likely to incite violence.

AFDI filed suit against the MTA in the United States District Court for the Southern District of New York, claiming that the application of the incitement prohibition to the advertisement violated the First Amendment, and moved for a preliminary injunction. The district court granted the motion, enjoining the enforcement of the incitement prohibition as to the advertisement in question, rather than striking down the whole standard. The court stayed the effectiveness of the injunction for 30 days. While the stay was in effect, the MTA's Board of Directors voted to amend the MTA's advertising standards to include a prohibition on any advertisement that is "political in nature." After the new standards were approved, the MTA informed AFDI that it would not display the advertisement because it violated this new prohibition. The MTA then moved to dissolve the preliminary injunction, arguing that the claim on which it rested was moot in light of the change to the MTA's advertising standards. The district court granted the motion.

AFDI appealed, and the Second Circuit reviewed whether the district court abused its discretion in granting the motion. AFDI argued that the MTA had failed to satisfy the test for mootness because the new advertising policy was just as unconstitutional as the one already enjoined. However, the Second Circuit affirmed the district court's judgment because the MTA had altered its conduct in a manner sufficient to present a fundamentally different controversy, and AFDI was not suffering an ongoing harm from the MTA's initial rejection of the advertisement under the old standard. The AFDI may challenge the MTA's new advertising standards, but it must do so by filing an amended complaint. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de.../1/doc/15-1997_opn.pdf

Panel: Circuit Judges Katzmann and Kearse; District Judge Schofield, sitting by designation

Argument Date: 1/15/2016

Argument Location: New York, NY

Date of Issued Opinion: 3/3/2016

Docket Number: No. 15-1997

Decided: Affirmed

Case Alert Author: Nigyar Alieva

Counsel: David Yerushalmi, American Freedom Law Center, for Plaintiff-Appellants; Victor A. Kovner, Davis Wright Tremaine LLP for Defendant-Appellees

Author of Opinion: Per Curiam

Circuit: Second Circuit

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 03/05/2016 04:13 PM     2nd Circuit     Comments (0)  

February 25, 2016
  United States of America v. Prado - Second Circuit
Headline: Second Circuit Holds General Jury Instructions for Aiding and Abetting Knowing and Intentional Use of a Firearm Charge are Insufficient and Plainly Erroneous.

Area of Law: Criminal Law

Issue(s) Presented: Whether the jury should have been instructed that it was required to find the defendants joined a criminal venture with full knowledge of its scope, including advance knowledge of a gun at a time the defendant could have withdrawn from the scheme.

Brief Summary: Heriberto Martinez was convicted of fourteen counts related to racketeering activity and three murders and Carlos Ortega was convicted of twelve counts related to racketeering activity and two murders (collectively the "defendants"). In particular, both defendants were convicted of aiding and abetting a violation of 18 U.S.C. § 924(c), using or carrying a firearm in relation to a crime of violence or possessing a firearm in furtherance of that crime, in connection with a murder. At trial, the United States District Court for the Eastern District of New York gave the jury general instructions on aiding and abetting liability and both defendants were found guilty.

The Second Circuit held that in the wake of the 2014 United States Supreme Court decision in Rosemond v. United States, general instructions on aiding and abetting liability that do not require the jury to find that the defendant had advance knowledge that a confederate would be armed are insufficient and plainly erroneous. In addition, the Second Circuit held that this error affected Ortega's, but not Martinez's, substantial rights, and therefore vacated Ortega's aiding and abetting conviction.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...183b70cdb87/1/hilite/

Extended Summary: In March 2010, Martinez and Ortega, members of the gang La Mara Salvatrucha, also known as MS-13, met at the home of Jeremias Amaya, to discuss Quijada, another member of MS-13. The group discussed that Quijada "wasn't running properly," that he "was not good for the Mara because he only caused problems," and that "he only caused problems and never sold a thing." Because of these problems, the MS-13 members present decided that they would require Quijada to kill a rival gang member to prove himself. The group picked up Quijada and drove around looking for rival gang members for Quijada to kill, but were unable to find any. Quijada was dropped off at home and the rest of the group returned to Amaya's home where they unanimously voted to pick Quijada up and kill him.

Following the meeting, the group called Quijada and told him they were coming to pick him up because they had found a rival gang member. The group went to get Quijada, and brought him to the beach. Prior to leaving for the beach, Martinez grabbed a machete. At the beach, Amaya took out a gun to shoot Quijada, but the gun jammed. Martinez gave Amaya the machete, which Amaya then used to stab Quijada. Another MS-13 member then stabbed Quijada with a kitchen knife. Quijada was ultimately stabbed to death. There was no evidence that Ortega participated in the assault on and murder of Quijada after the gun appeared, however, he was present the entire time.

Count 21 of the indictment charged Martinez and Ortega with brandishing a firearm during a crime of violence in connection with the murder of Quijada. The indictment charged them with 18 U.S.C. §924(c)(1)(A)(ii), (c)(1)(C) and 18 U.S.C. §2. For both charges, the United States District Court for the Eastern District of New York gave the jury general instructions on aiding and abetting liability that, in pertinent part, required the jury to find that "the defendants intended to commit the charged crime, not only the predicate offense," but did not ask the jury to find that defendants "consciously shared the knowledge of the principal." and both defendants were found guilty.

The Second Circuit reviewed the appeal of count 21 under the "plain error standard" and concluded that the instructions were erroneous in light of the Supreme Court's 2014 decision in Rosemond v. United States. In Rosemond, the Supreme Court concluded, that "[w]hat matters for purposes of gauging intent, and so what jury instructions should convey, is that the defendant has chosen, with full knowledge, to participate in the illegal scheme." There, the Supreme Court explained that the jury in that case had been improperly charged because the instructions did not explain that the defendant "needed advance knowledge of a firearm's presence."

The Second Circuit noted that, subsequent to Rosemond, both the Sixth and Tenth Circuits have considered whether general umbrella aiding and abetting instructions are plainly erroneous and reached different conclusions. The Sixth Circuit found instructions that did not require only that the defendant have advance knowledge that a firearm would be used but only intent to further the predicate crime, not the use if the gun. The Tenth Circuit, however, found instructions that required the government to prove the defendant "consciously shared the other person's knowledge of the underlying criminal act and intended to help him or her" were not clearly erroneous. Finding that the instructions given in this case "fall somewhere between those rejected by the Sixth Circuit and those accepted by the Tenth Circuit," the Second Circuit held that the jury instructions given to Martinez and Ortega were plainly erroneous because they failed to require the jury to find the "defendants had advance knowledge of the gun at a time that they could have chosen not to participate in the crime."

The Second Circuit next addressed whether the error affected Martinez's and Ortega's substantial rights. The Second Circuit found that there was no direct evidence that Ortega knew, upon leaving to pick up Quijada, that someone had brought a gun, very little evidence of advanced knowledge of the gun, and a reasonable probability of a different trial outcome had the jury been properly instructed. In contrast, the court concluded there was direct evidence of Martinez's participation in the murder because Amaya handed the jammed gun to Martinez and Martinez handed the machete to Amaya and, accordingly, the Second Circuit could not say that there was a reasonable probability of a different outcome at trial for Martinez had the jury been properly instructed.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...183b70cdb87/1/hilite/

Panel: Circuit Judges Calabresi, Pooler, and Lynch

Argument Date: 12/9/2015

Date of Issued Opinion: 2/24/2016

Docket Number: No. 13-2894-cr (L)

Decided: Affirmed, Vacated and Remanded

Case Alert Author: Daniel Plaia

Counsel: Robert A. Soloway, Rothman, Schneider, Soloway & Stern, LLP, New York, NY, for Defendant-Appellant Mario Alphonso Herrera-Umanzor, John Frederick Carman, Garden City, for Defendant-Appellant Vidal Espinal, Randall D. Unger, Bayside, NY (Elizabeth E. Macedonio, New York, NY, on the brief), for Defendant-Appellant Heriberto Martinez, Elizabeth Johnson (Ira D. Johnson and Avrom Robin on the brief), Law Offices of London & Robin, New York, NY, for Defendant-Appellant Carlos Ortega, John J. Durham, Assistant United States Attorney (Carrie N. Capwell, Peter A. Norling, and Raymond A. Tierney, Assistant United States Attorneys, on the brief), for Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Brooklyn, NY, for Appellee.

Author of Opinion: Judge Pooler

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 02/25/2016 08:18 AM     2nd Circuit     Comments (0)  

February 2, 2016
  United States v. Vernace - Second Circuit
Headline: Second Circuit Affirms the RICO Conviction of Gambino Crime Family Boss

Area of Law: Criminal

Issue Presented: Whether the evidence presented at trial regarding defendant's role in 30-year-old murders and drug trafficking for Gambino crime family was sufficient to sustain the defendant's conviction under the Racketeering Influenced and Corrupt Organizations Act ("RICO").

Brief Summary: Defendant Bartolomeo Vernace was convicted following a jury trial of: (1) conspiring to engage in a racketeering enterprise, in violation of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c)-(d); 2) using, carrying and possessing a firearm in relation to a crime of violence, in violation of 18 U.S.C. § 924(c), and 3) operating an illegal gambling business, in violation of 18 U.S.C. § 1955, based upon his role in the 30-year old murders of the owners of Shamrock Bar in Queens, New York (the "Shamrock Murders"). During his trial in the United States District Court for the Eastern District of New York, evidence was presented that Vernace was a member of the Gambino crime family, one of five organized crime families operating at that time in New York City, and that the Gambino crime family engaged in a pattern of criminal enterprises in order to generate money for its members. The trial also established that, at the time of his arrest in 2011, Vernace was a member of the Gambino crime family's three person ruling panel, which placed him in charge of the operations of the organization.

The District Court entered judgment against Vernace and Vernace appealed, claiming that the evidence was insufficient for the jury to find that the predicate Shamrock Murders and additional heroin distribution offenses were related to the RICO conspiracy and that he was convicted under the wrong firearms statute. He also argued that newly discovered evidence mandated a new trial. The United States Court of Appeals for the Second Circuit rejected each of Vernace's arguments and affirmed.

To read the full opinion, please visit http://www.ca2.uscourts.gov/de...7bb3e7ad327/1/hilite/

Extended Summary:
RICO laws are designed to combat organized crime by making it unlawful to engage in a "pattern of racketeering activity." To prove a RICO violation, the government must establish a pattern of at least two predicate racketeering acts, such as murder or drug trafficking, that occur within ten years of each other. In order to prove that the predicate acts constitute a pattern of criminal activity, they must have the "same or similar purposes, results, participants, victims, or methods of commission." However, the government is not required to prove that the predicate offenses were committed in furtherance of the of the organization's activities. At trial, the jury found that Vernace's involvement in the Shamrock Murders and his drug distribution in early 1981 served as the two predicate racketeering acts to convict him of the RICO charge.

On appeal, Vernace argued that there was insufficient evidence to support a RICO violation, since the Shamrock Murders were not related to the activities of the Gambino crime family. The Second Circuit rejected this argument and found that the evidence was sufficient for the jury to infer that the Vernace's participation in the Shamrock Murders was related to the Gambino family's organized crime activities. The Court noted that the Shamrock Murders had occurred as a result of a perceived insult to Gambino associate, Frank Riccardi. Riccardi then contacted Vernace and another Gambino member. All three men then proceeded to the Shamrock Bar and killed the two victims. The Court found that the jury could reasonably
conclude from this evidence that Vernace participated in the Shamrock Murders in order to preserve the Gambino family's reputation as well as his own.

Vernace also argued that the government failed to establish that his alleged heroin distribution in early 1981 had been related to the Gambino crime family. However, the Court rejected this argument, finding that members of the Gambino family were known to distribute drugs in order to increase the profit of their criminal enterprise. As such, it was reasonable for the jury to conclude that the defendant's alleged heroin distribution related to the Gambino crime family.

Vernace next argued that he was convicted and sentenced under an incorrect version of § 924(c), which makes it a crime to use or unlawfully carry a firearm in relation to a felony. Specifically, he argued that the district court erred in applying the recently amended version of § 924(c), which carries a mandatory consecutive sentence, rather than the version that had been in effect in 1981. The Second Circuit concluded that even if the district court erred, the error was harmless as Vernace was sentenced to life imprisonment on the RICO count alone.

Finally, the Second Circuit found that Vernace was not entitled to a new trial on the basis of newly discovered evidence. After the trial, the government had informed the defense that one of the government's witnesses had violated his cooperation agreement. Vernace claimed that this revelation warranted a new trial since the defense could have used this information to impeach the cooperating witness' testimony. The Second Circuit rejected this argument, pointing out that the witness was impeached on a number of prior crimes, and this revelation would not have impacted the outcome of the trial. As such, the district court did not abuse its discretion in refusing to grant Vernace a new trial.

To read the full opinion, please visit http://www.ca2.uscourts.gov/de...7bb3e7ad327/1/hilite/

Panel: Judges Sack, Chin, and Droney

Argument Date: 9/18/2015

Argument Location: New York, New York

Date of Issued Opinion: 2/2/2016

Docket Number: 14-2197-cr

Decided: Affirmed

Case Alert Author: Brian Byrne

Counsel: M. Kristin Mace, Assistant United States Attorney (David C. James, Amy Busa, Evan M. Norris, Amir H. Toossi, Assistant United States Attorneys, on the brief), for Robert L. Capers, United States Attorney for the Eastern District of New York, Brooklyn, New York, for Appellee. Seth Ginsberg, Law Office of Seth Ginsberg, New York, New York, for Defendant‐Appellant.

Author of the Opinion: Judge Chin

Circuit: Second Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 02/02/2016 07:39 PM     2nd Circuit     Comments (0)  

February 1, 2016
  United States v. Allen
Case Name: United States v. Allen

Headline: Second Circuit Weighs in on Circuit Split, Ruling That Officers Must Obtain a Warrant Before Summoning a Suspect to the Door of his Home and Arresting Him

Area of Law:
Criminal Procedure - Fourth Amendment

Issue(s) Presented: Whether the Fourth Amendment permits warrantless "across the threshold" arrests in which law enforcement officers, while remaining outside a suspect's home, summon the suspect to the doorway and then arrest him.

Brief Summary: Dennis B. Allen Jr., was arrested after police officers - following up on an assault complaint - went to his apartment with the intention of arresting him for assault. They never sought a warrant for his arrest. Instead, the officers simply knocked on his door, and requested that Allen speak with them. Allen spoke with them for several minutes, remaining inside his house while the officers stood on the sidewalk. The officers then told Allen that he would need to come down to the police station to be processed for the assault. He asked them if he could go upstairs to put on shoes and advise his daughter that he was leaving; the officers said that he could only do so if accompanied by them. Upon accompanying him upstairs, they saw drug paraphernalia on his person and in the house, and then applied for and obtained a search warrant. While executing that warrant, the officers found a hand gun and more drug paraphernalia. He was ultimately charged with being a felon in possession of a firearm, and entered a conditional guilty plea to the charge in the United States District Court for the District of Vermont. On appeal, Allen challenged the district court's refusal to suppress the firearm as well as the statements he had made, arguing that both were fruits of a warrantless in-home arrest. The Second Circuit agreed, reversing the denial of the suppression motion, vacating the conviction, and remanding for further proceedings. "[W]hen officers approach the door of the resident, announce their presence, and place the occupant under arrest when he or she, remaining inside the premises, opens the door in response to the police request, the arrest occurs inside the home, and therefore requires a warrant," explained the court. To read the whole decision, please visit http://www.ca2.uscourts.gov/de...1ec0d2f218c/3/hilite/

Extended Summary: On July 25 or 26, 2012, the Springfield, Vermont Police Department received a written complaint that on July 23, Dennis Allen had assaulted John Johnston. On July 27, four Springfield police officers went to Allen's apartment with a pre-formed plan to arrest him for the alleged assault. Despite having probable cause, and two days, the officers did not seek a warrant for Allen's arrest. The officers knocked on Allen's door, and Allen came down to speak to the officers, but remained "inside the threshold" while the officers stood on the sidewalk. Allen said he did not assault Johnston, but he had received numerous phone calls from him. Allen then showed the officers his call log. The officers then told Allen he needed to come down to the police station to be processed for assault. Allen said he needed to get his shoes and tell his 12-year-old daughter he would be leaving. The officers followed him inside, where they asked him if he had anything in his pockets. Allen took out several items, including seven bags of marijuana. Officers also saw various drug paraphernalia. Based on the drug paraphernalia that they saw inside the apartment the officers obtained and executed a warrant. While executing the warrant, the officers found a handgun and various drug paraphernalia. Allen was then rearrested on the federal charge of being a felon in possession of a firearm.

After Allen was indicted by a federal grand jury, he moved to suppress the firearm, and the statements he made, contending that both were fruits of a warrantless in-home arrest in violation of the Fourth Amendment. The district court denied Allen's motion. The district court concluded that while Allen was arrested inside the threshold of his apartment, the officers were outside on the sidewalk. The court further reasoned that because Allen submitted to the officer's authority once he asked permission to receive his shoes and say goodbye to his daughter. The court then found that the police summoning Allen to his threshold did not trigger the rule announced by the Supreme Court in Payton v. New York. There, the Court held that police violated the Fourth Amendment by physically entering a home without a warrant to effect an arrest. The Payton Court went on to explain that officers can violate Payton when, in the absence of exigent circumstances or consent, they physically enter protected premises to effect a warrantless search or arrest.

The Second Circuit concluded that the underlying reasoning of Payton applied here. "If the rule of Payton, and the fundamental Fourth Amendment protection of the home on which it is based, are to retain their vitality, the rule must turn on the location of the defendant, not the officers, at the time of the rest," the court explained. Here, Allen never left his house, and the offices "asserted their power over him inside his home." In so holding, the Second Circuit rejected the conclusion of several other circuits - including the Eleventh, Seventh, and Fifth Circuits - that unless the police themselves cross the threshold of the home before arresting a suspect, a warrant is not required.

Panel (if known): Circuit Judges Sack, Lynch, and Lohier

Argument Date: December 5, 2013

Argument Location: New York, NY

Date of Issued Opinion: January 29, 2016

Docket Number: No. 13-3333-cr

Decided: Vacated and Remanded

Case Alert Author: Elizabeth Perreca

Counsel: David L. McColgin, Assistant Federal Public Defender, for Michael L. Desautels, Federal Public Defender for the District of Vermont, Burlington, Vermont, for Defendant-Appellant
William B. Darrow, Assistant United States Attorney (Gregory L. Waples, Assistant United States Attorney, on the brief), for Tristram J. Coffin, United States Attorney for the District of Vermont, Burlington, Vermont, for Appellee.

Author of Opinion:
Judge Gerard E. Lynch

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 02/01/2016 03:05 PM     2nd Circuit     Comments (0)  

January 27, 2016
  Main Street Legal Services v. National Security - Second Circuit
Headline: Second Circuit Holds National Security Council Is Not an "Agency" and Thus Not Subject Freedom of Information Act Disclosure Requirements.

Areas of Law: Freedom of Information Act; Administrative Law

Issue(s) Presented: Whether the National Security Council ("NSC") is an "agency" for Freedom of Information Act purposes under 5 U.S.C. § 552(f)(1), either due to its own function or due to the functions of the broader NSC System.

Brief Summary:
Plaintiffs-Appellants, a non-profit law firm within the City University of New York School of Law, brought suit against Defendant-Appellee, the National Security Council (the "NSC") following the NSC's rejection of Plaintiffs-Appellants' Freedom of Information Act ("FOIA") requests. Plaintiffs-Appellants had requested "[a]ll records related to the killing and attempted killing by drone strike of U.S. citizens and foreign nationals," and "[a]ll National Security Council meeting minutes taken in the year 2011." The NSC moved to dismiss the complaint for failure to state a claim on the grounds that it is not an agency subject to FOIA requests.

The United States District Court for the Eastern District of New York agreed with the NSC and dismissed the case on the merits. The Second Circuit affirmed, holding that the NSC, created by Congress and presided over by the President, "is a unit within the Executive Office of the President whose "sole function" is to advise and assist the Chief Executive." The Second Circuit adopted D.C. Circuit jurisprudence and predicated its holding upon the functions of both the Council and the NSC System, which it held were advisory only and entailed no authority independent of the President.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...d4993/1/hilite/


Extended Summary: Plaintiffs-Appellants brought suit against Defendant-Appellee, the National Security Council (the "NSC"), following the NSC's rejection of Plaintiffs-Appellants' Freedom of Information Act ("FOIA") requests. FOIA "establishes record retention and disclosure requirements for federal agencies" and mandates that, barring certain exemptions, agencies disclose records not already publically available upon request. Plaintiffs-Appellants had moved to compel the NSC to disclose "[a]ll records related to the killing and attempted killing by drone strike of U.S. citizens and foreign nationals," and "[a]ll National Security Council meeting minutes taken in the year 2011." The NSC moved to dismiss the complaint for failure to state a claim on the grounds that it is not an agency subject to FOIA requests.

The United States District Court for the Eastern District of New York agreed with the NSC and dismissed the case on the merits. The Second Circuit affirmed, holding that the NSC, created by Congress and presided over by the President, "is a unit within the Executive Office of the President whose "sole function" is to advise and assist the Chief Executive." The Second Circuit adopted D.C. Circuit jurisprudence and predicated its holding upon the functions of both the Council and the broader NSC System, which it held were advisory only and entailed no authority independent of the President.

In affirming the district court's ruling, the Second Circuit first noted that the FOIA's plain language defining "agency" as any "other establishment in the executive branch of the Government (including the Executive Office of the President)" under 5 U.S.C. § 552(f)(1) had not been strictly construed by the Supreme Court. It then relied upon FOIA's legislative history and the two-prong test enumerated by the Court of Appeals for the District of Columbia (the "D.C. Circuit") in Soucie v. David. Soucie construed the "agency" definition to apply to executive branch entities with "substantial independent authority," but not to those whose "sole function" is to "advise and assist the President."

The Second Circuit noted that the D.C. Circuit, which frequently hears appeals from FOIA request denials, had held on more than one occasion that NSC is not an "agency." The Court went on to accept guidance from the D.C. Circuit's decision in Meyer v. Bush, when that circuit concluded the NSC was not an agency, but conducted its own thorough analysis of the functions of the NSC and the broader NSC System - which includes staff and subcommittees and boards - before concluding that the NSC's sole statutory function is to advise and assist the President and has no independent authority conferred upon it.

In rejecting a series of specific arguments raised by the Plaintiffs to demonstrate NSC's alleged independent authority, the Court noted that, although the NSC formerly directed the Central Intelligence Agency, Congress partially withdrew that authority in 1992, and withdrew the rest of that authority in 2004. The Court also found legislative support for its position that the core function of the broader NSC System was to assist the President through "coordination," by serving as "the means by which the President can secure both the collective national security recommendations of department heads and their cooperation in integrating his policies across various parts of government."

Judge Wesley concurred, writing that, while the conclusion that the NSC is not subject to FOIA requests has implicitly been accepted by Congress in its FOIA amendments and, accordingly, the question of that position's wisdom "is best
considered a political issue for Congress and the President, not for this Court."

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...d4993/1/hilite/


Panel: Circuit Judges Raggi, Wesley, and Lynch

Argument Date: 03/02/2015

Date of Issued Opinion: 01/26/2016

Docket Number: 13‐3792‐cv

Decided: Affirmed

Case Alert Author: Jake B. Sher

Counsel: Ramzi Kassem, Main Street Legal Services, Inc., Long Island City, N.Y., for Plaintiff-Appellee; Jayne Randall Linney, Civil Division, United States Department of Justice, Washington, D.C., for Robert L. Capers, United States Attorney for the Eastern District of New York, Brooklyn, New York, for Defendant‐Appellee.

Author of Opinion: Judge Raggi for majority; Judge Wesley concurring.

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 01/27/2016 07:45 AM     2nd Circuit     Comments (0)  

December 7, 2015
  Espinoza v. Dimon
Headline: Second Circuit Dismisses Derivative Suit Accusing JPMorgan Chase Directors of Insufficiently Investigating the "London Whale" Trading Incident

Area of Law: Corporate

Issue Presented: When a shareholder demands that a board of directors investigate both an underlying wrongdoing and subsequent misstatements by corporate officers about that wrongdoing, what factors should a court consider in deciding whether the board acted in a grossly negligent fashion by focusing its investigation solely on the underlying wrongdoing?

Brief Summary: This shareholder derivative action arose out of the "London Whale" trading incident. Ernesto Espinoza, a shareholder of JPMorgan Chase & Co. ("JPMorgan"), sent a letter to JPMorgan demanding that the board investigate the London Whale incident. The board rejected Espinoza's demand letter, but pursued its own investigation into the incident. Espinoza, however, alleged that JPMorgan's investigation was improperly executed because it focused only on the underlying incident and not the alleged misstatements later made by its executives. Espinoza's derivative suit alleged that his demand letter had been wrongfully refused. The United States District Court for the Southern District of New York dismissed the complaint, finding that Espinoza had not pleaded sufficient facts to rebut the strong presumption that the board's decision reflected a valid exercise of its business judgment. On appeal, the Second Circuit certified the following question of law to the Delaware Supreme Court: "If a shareholder demands that a board of directors investigate both an underlying wrongdoing and subsequent misstatements by corporate officers about that wrongdoing, what factors should a court consider in deciding whether the board acted in a grossly negligent fashion by focusing its investigation solely on the underlying wrongdoing?" Based on the Delaware Supreme Court's answer, the Second Circuit explained that to survive a motion to dismiss, a plaintiff alleging wrongful refusal of a demand must plead facts supporting a plausible inference that the board's decision not to take further action was the result of gross negligence. Here, the Second Circuit concluded that the plaintiff had not done so, and affirmed the dismissal of the complaint. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...2d5c1fed9b4/1/hilite/

Extended Summary: This decision reflected the Second Circuit's third writing on Ernesto Espinoza's derivative suit, which alleges that the board of JPMorgan improperly failed to investigate alleged misstatements made by JPMorgan executives regarding the "London Whale" incident. In earlier opinions, the Second Circuit concluded that the dismissal of Espinoza's complaint should be reviewed de novo, and that it was appropriate to certify the above-described question to the Delaware Supreme Court.

In this opinion, the court noted that the Delaware Supreme Court had provided helpful guidance. "As the Delaware Supreme Court emphasized in its response, our review of a wrongful refusal suit starts from the premise that the decision to initiate a lawsuit is an internal corporate matter within the board's discretion," the Second Circuit wrote. Accordingly, a plaintiff bringing this sort of derivative suit bears a difficult burden.

Here, the Second Circuit noted that JPMorgan's board, in response to the London Whale trading incident, engaged in an extensive review. The board created a Review Committee consisting of three outside board members, who in turn used independent counsel and an expert advisor. The Review Committee also oversaw a management Task Force. These efforts resulted in the publication of two extensive written reports, and led to many of the changes sought by Espinoza in his demand letter, including clawbacks of payments, reductions in compensation, and reformed internal guidelines and controls. The court distinguished this response from other derivative suits that were allowed to go forward based on insufficient board responses.

Moreover, the Second Circuit explained that JPMorgan was not legally required to submit a detailed point-by-point response to Espinoza's demand letter. The court identified two practical considerations here. First, to require boards to reply in full detail to a plaintiff's demand letter might incentivize plaintiffs to include a laundry list of potential claims. Second, providing too much detail in a refusal letter might expose the corporation to regulatory or other legal risks, which would be at odds with the board's obligation to mitigate such risks. Here, JPMorgan's board made clear in its response that they did not want to pursue litigation because of the potential harm to JPMorgan's long-term strategic interests. Accordingly, the Second Circuit affirmed the dismissal of this lawsuit.

Panel: Chief Circuit Judge Katzmann, Circuit Judges Pooler and Carney

Argument Date: April 1, 2015

Date of Issued Opinion:
December 3, 2015

Docket Number: 14-1754

Decided: Affirmed

Case Alert Author: Brad Landau

Counsel: George C. Aguilar (Jay N. Razzouk, on the brief), Robbins Arroyo LLP, San Diego, California; Thomas G. Amon, Law Offices of Thomas G. Amon, New York, New York, for Plaintiff‐Appellant; Richard C. Pepperman, II, Sullivan & Cromwell LLP, New York, New York (Daryl A. Libow, Christopher Michael Viapiano, Sullivan & Cromwell LLP, Washington, D.C., on the brief), for Defendants‐Appellees James Dimon, Douglas L. Braunstein, Michael J. Cavanagh, Ina R. Drew, and Nominal Defendant‐Appellee JPMorgan Chase & Co; Jonathan C. Dickey, Gibson, Dunn & Crutcher LLP, New York, New York, for Defendants‐Appellees Ellen V. Futter, James S. Crown, David M. Cote, Laban P. Jackson, Jr., Crandall C. Bowles, James A. Bell, Lee R. Raymond, Stephen B. Burke, William C. Weldon, and David C. Novak.

Author of Opinion: Chief Judge Katzmann

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 12/07/2015 05:32 PM     2nd Circuit     Comments (0)  

December 4, 2015
  United States v. Gilberto Valle
Headline: Second Circuit, Finding That "Cannibal Cop" Lacked the Specific Intent to Engage in Kidnapping Conspiracy, Affirms His Acquittal.

Area of Law: Criminal

Issues Presented: Whether the District Court appropriately concluded that the Defendant lacked the specific intent to form a kidnapping conspiracy. Whether the District Court properly concluded that the Defendant's use of a government computer to obtain information that was not related to his duties as a police officer violated the Computer Fraud and Abuse Act.

Brief Summary: Gilberto Valle, a New York City Police Officer, was an active member of an internet community known as as the "Dark Fetish Network." ("DFN"). Valle and other members of this community would regularly communicate their desire to satisfy their sexual fetishes by "kidnapping, torturing, cooking, raping, murdering, and cannibalizing various women." Valle was arrested and charged with conspiracy to kidnap a number of the women mentioned in his online conversations. Additionally, Valle was charged with using his position as a New York City Police Officer to improperly access a government computer, in violation of Section 1030(a)(2)(B) of the Computer Fraud and Abuse Act. ("CFAA"). Following a jury trial in the United States District Court for the Southern District of New York, Valle was convicted on both counts. Following the trial, District Judge Gardephe granted Valle's motion for judgment of acquittal on the conspiracy charge, and denied Valle's motion on the CFAA charge. On appeal, the Second Circuit affirmed the acquittal on the conspiracy count, concluding that there was insufficient evidence of a genuine agreement to kidnap and of Valle's specific intent to commit a kidnapping. Additionally, the Second Circuit reversed the conviction on the CFAA count, ruling that the statute only criminalizes situations where a person accesses a computer to obtain information that he is not entitled to view for any purpose. To read the full opinion, please visit ">http://www.ca2.uscourt.../de.....b/2/hilite/


Significance: Second Circuit adds to circuit split over the interpretation of "exceeds authorized access" in the Computer Fraud and Abuse Act.

Extended Summary: To prove the existence of a conspiracy, the government must prove beyond a reasonable doubt that the defendant knew of the conspiracy, and participated in it. Moreover, the defendant must have specific intent to commit the underlying offense (here, kidnapping). During his involvement with the Dark Fetish Network ("DFN"), Valle communicated with twenty-four different individuals on DFN; in those messages, he expressed a desire to kidnap, rape, torture, and cannibalize various women.

On appeal, in a 2-1 split, the Second Circuit rejected the government's contention that Valle had shown a specific intent to engage in a kidnapping conspiracy through any of his communications on the DFN. The Court found it significant that at Valle's trial, the government had pointed to Valle's communications with only three other DFN members as evidence of his intent to engage in a kidnapping conspiracy. In doing so, the government apparently acknowledged that Valle's other communications were fantastical. The government attempted to distance itself from this theory on appeal by arguing that it had never drawn a firm distinction between Valle's communications. However, the Court noted that "[o]nce the Government constructs its case around the theory that a certain group of chats permits the inference of conspiratorial intent while another group of essentially similar chats is consistent with non-criminal behavior, some adequate explanation must be forthcoming."

Valle's most specific actions involved chats with another DFN user, "Moody Blues," in which the two expressed a desire to kidnap, torture, and cannibalize Valle's friend, Kimberly Sauer. During the course of his communications, Valle sent a document to Moody Blues detailing how the kidnapping would unfold. The document included Sauer's photograph and some other accurate information about her (such as her age); it also included false information about her, such as her last name, date of birth, birthplace, and educational history. The document also identified a specific date when the kidnapping would be carried out. The government claimed that these actions demonstrated Valle's intent to engage in a conspiracy to kidnap Sauer. Moreover, Valle used his friendship with Sauer to arrange a lunch meeting, which the government claimed was an act of surveillance in anticipation of the kidnapping. The majority of the Second Circuit rejected these arguments, finding that these acts were not fundamentally different from the fantasies that Valle expressed in his other communications. The Court expressed doubt that Valle ever intended to follow through on the plan to kidnap Sauer, pointing out that Valle had deliberately concealed Sauer's full name and address from Moody Blues. Moreover, the communications between Valle and Moody Blues about Sauer stopped over a month before the proposed kidnapping date of September 2, 2012. As a result, the Court affirmed the District Court's judgment of acquittal on the conspiracy charge.

The majority also concluded that Valle's conduct did not fall under the CFAA. 18 USC § 1030(a)(2)(B) makes it a crime to "intentionally access a computer without authorization or exceeds authorized access and thereby obtains information . . . from any department or agency of the United States. It was undisputed that Valle had used his position as a police officer to access the National Crime Information Center ("NCIC") in order to access information about Maureen Hartigan, one of the women that he had fantasized about kidnapping.

Whether or not Valle conduct violated the statute hinged on the interpretation of the phrase "exceeds authorized access." The Second Circuit noted that this issue has dived the Courts of Appeals, with the Fourth and Ninth Circuits adopting a narrow interpretation of "exceeds authorized access," while the First, Fifth, Seventh, and Eleventh Circuits have adopted a broader interpretation. The broader interpretation is that the term "exceeds authorized access" applies when an individual accessed a computer, with an improper purpose, in order "to obtain or alter information that he is otherwise authorized to access." The narrower interpretation is the user only "exceeds authorized access" by obtaining or altering "information that he does not have authorization to access for any purpose which is located on a computer that he is otherwise authorized to access." In other words, Valle's contention was that he did not violate the statute because he was allowed to access the NCIC as a police officer, even though the reason why he accessed the site was not for a legitimate law enforcement purpose. Finding that both the government and Valle had proposed plausible interpretations of the statute, the Court applied the rule of lenity, and interpreted the statute in Valle's favor. As a result, the Court vacated Valle's conviction under the CFAA.

Dissent: Judge Straub argued that the District Court erred by granting Valle's judgment of acquittal, and should have been reversed. Additionally, the dissent argued that Valle's use of the NCIC database violated 18 USC S 1030 (a)(2)(B), and thus that conviction should have been affirmed. The dissent focused largely on Valle's expressed intent to kidnap Sauer as evidence of his guilt on the conspiracy charge. Judge Straub noted that the communications between Valle and Moody Blues expressed an intent to engage in a conspiracy to kidnap Sauer, and that Valle took acts in furtherance of the conspiracy by meeting Sauer for lunch and compiling a "blueprint" for how the abduction would take place. Viewed in a light most favorable to the jury verdict - conviction - Judge Straub reasoned that there was enough evidence for a reasonable jury to find Valle guilty of conspiracy to kidnap Sauer, even though he ultimately did not go through with it.

Judge Straub also argued that Valle's action of accessing the NCIC in order to obtain information about Hartigan violated the plain language of 18 USC S 1030 (a)(2)(B). Unlike the majority, the dissent found that the term "exceeds authorized access" was plain and unambiguous. Valle was only authorized to access the NCIC database in furtherance of his duties as a police officer and there was no dispute that Valle's purpose of accessing the NCIC was not in furtherance of his duties. As such, it was beyond the scope of his authorized access.

Panel: Judges Straub, Parker, and Carney.

Argument Date: May 12, 2015

Argument Location: New York, NY

Date of Issued Opinion: December 3, 2015

Docket Number: No. 14‐2710‐cr and No. 14‐4396‐cr

Decided: Affirmed in Part and Reversed in Part.

Case Alert Author: Brian Byrne

Counsel: JUSTIN ANDERSON AND RANDALL W. JACKSON (Hadassa Waxman and Brooke Cucinella, of counsel), Assistant United States Attorneys for Preet Bharara, United States Attorney for the Southern District of New York, New York, New York, for Appellant/Appellee.
EDWARD S. ZAS (Robert M. Baum and Julia L. Gatto, of counsel), Federal Defenders of New York, Inc., New York, New York, for Defendant‐ Appellee/Defendant‐Appellant Gilberto Valle.
Eugene Volokh (Hanni Fakhoury and Jamie Williams, Electronic Frontier Foundation, San Francisco, California, on the brief), Scott & Cyan Banister First Amendment Clinic, UCLA School of Law, Los Angeles, California, for Amici Curiae Electronic Frontier Foundation, Center for Democracy & Technology, Marion B. Brechner First Amendment Project, National Coalition Against Censorship, Pennsylvania Center for the First Amendment, and Law Professors.
Stephen L. Braga, Appellate Litigation Clinic, University of Virginia School of Law, Charlottesville, Virginia, for Amici Curiae Frederick S. Berlin, M.D., Ph.D., and Chris Kraft, Ph.D.
Hanni Fakhoury and Jamie Williams (Richard D. Willstatter, National Association of Criminal Defense Lawyers, White Plains, New York, and Harley Geiger, Center for Democracy & Technology, Washington, D.C., on the brief), Electronic Frontier Foundation, San Francisco, California, for Amici Curiae Electronic Frontier Foundation, Center for Democracy & Technology, National Association of Criminal Defense Lawyers, and Scholars.

Author of Opinion: Judge Parker (majority); Judge Straub (dissent)

Circuit: Second Circuit

    Posted By: Emily Waldman @ 12/04/2015 10:32 AM     2nd Circuit     Comments (0)  

November 23, 2015
  The New York Times Company v. United States Department of Justice
Headline: Second Circuit Issues Mixed Ruling in FOIA Request for Information About Targeted Drone Strikes, Ordering Disclosure of Small Amount of New Material

Area of Law: National Security

Issue Presented: Whether information currently under seal in the United States District Court should be disclosed under the Freedom of Information request submitted by plaintiffs.

Brief Summary: In 2014, in response to a FOIA request by the New York Times, the ACLU, and other plaintiffs, the Second Circuit ordered disclosure of a 41-page legal opinion prepared by the Department of Justice's Office of Legal Counsel ("OLC") regarding the legality of targeted drone attacks. In that decision, the Second Circuit remanded the remainder of the case back to the district court for the Southern District of New York, for analysis of whether other related OLC documents that had been withheld should also be disclosed. The district court ruled, in a partially redacted opinion, that most of those documents should not be disclosed, except for one document (itself a redacted version of another document that the court ruled should be kept secret). On appeal, the Second Circuit affirmed all of the district court's conclusions. It ruled that the one redacted document should be disclosed, and that three redacted paragraphs in the district court's opinion could also be disclosed (as the district court itself had urged). All of the remaining documents, however, will remain undisclosed. To read the full opinion, please visit http://www.ca2.uscourts.gov/de...f7093b0b40a/1/hilite/

Extended Summary: There are various exemptions to the Freedom of Information Act (FOIA) that permit government agencies to withhold certain information. One such exemption allows an agency to withhold information pursuant to an Executive order to keep it secret in the interest of national defense or foreign policy. Another such exemption allows an agency to withhold information that describes intelligence sources in methods. Here, the Second Circuit agreed with the district court that most of the documents in question - which, again, related to the legality of drone strikes - fell into the various FOIA exemptions. Most of the opinion's discussion related to a document referred to as "Exhibit E," which reflected "the provision of legal advice in 2002 provided to the President's close legal advisor about the Executive Order 12333 [a 1981 document entitled "United States Intelligence Activities"]. Exhibit E dealt with some topics that were later publicly discussed by the government, but also included other information that has never been disclosed. The court concluded that "these differences suffice to preclude a ruling that waiver has occurred, and we therefore affirm the District Court's decision not to disclose Exhibit E."

The Second Circuit also agreed with the district court that three redacted paragraphs of the court's opinion could be disclosed. The district judge, Colleen McMahon, had herself urged disclosure of these paragraphs, but had maintained them under seal pending appellate review. Although the government had argued that those three paragraphs could be "understood to imply a fact that should not be disclosed," namely, "the nationality of a person who has been considered as a possible target of a drone attack," the Second Circuit was unconvinced. "The three paragraphs neither say nor imply anything about such a nationality," the court explained. The Second Circuit did agree that a handful of words that might be used to identify the nationality of potential targets of drone strikes should remain redacted.

Additionally, the court also declined to disclose the redacted portion of the oral arguments conducted in a closed hearing about these issues. As such, that redacted information would not be disclosed. The Second Circuit noted, however, that "[w]e have substantial reservations about the Government's decision to bring to a closed ex parte hearing personnel whose identity and affiliation it will not disclose to opposing counsel, who were excluded from the hearing." It cautioned that should the need for such a closed ex parte hearing arise again, "the Government should either not bring personnel whose identities may not be disclosed, or present, prior to the hearing, a substantial justification for including such personnel."

Panel:
Newman, Cabranes and Pooler

Argument Date:
6/23/15

Date of Issued Opinion: 11/23/15

Docket Numbers:
14-4432-cv, 14-4764-cv

Decided: Judgment AFFIRMED; redacted portions of District Court opinion to remain UNDISCLOSED, except for three paragraphs (as redacted pursuant to Part IV of this opinion) that the District Court wishes to disclose; and redacted portions of transcript of June 23, 2015, oral argument to remain UNDISCLOSED; case REMANDED.

Case Alert Author: Gavin Michael Strube

Counsel: David E. McCraw, The New York Times Company, New York, N.Y. (Jeremy A. Kutner, New York, N.Y., on the brief), for Plaintiffs-Appellants The New York Times Company,Charlie Savage, and Scott Shane; Jameel Jaffer, American Civil Liberties Union Foundation, New York, N.Y. (Hina Shamsi, Dror Ladin, American Civil Liberties Union Foundation, New York, N.Y., Eric Ruzicka, Colin Wicker, Michael Weinbeck, Dorsey & Whitney LLP, Minneapolis, Minn., on the brief), for Plaintiffs-Appellants American Civil Liberties Union and American Civil Liberties Union Foundation. Sarah S. Normand, Asst. U.S. Atty., New York, N.Y. (Preet Bharara, U.S. Atty., New York, NY, Benjamin C. Mizer, Acting Asst. U.S. Atty. General, Matthew M. Collette, Sharon Swingle, Thomas Pulham, Civil Division, U.S. Dep't of Justice, Washington, D.C., on the brief), for Defendants-Appellees. (Lawrence S. Lustberg, Joseph A. Pace, Gibbons P.C., Newark NJ, for amici curiae Senators Ron Wyden, Rand Paul, Jeff Merkley, and Martin Heinrich, in support of Plaintiffs-Appellants)

Author of Opinion: Jon O. Newman

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 11/23/2015 09:27 PM     2nd Circuit     Comments (0)  

November 1, 2015
  ACLU v. Clapper
Headline: Second Circuit Allows the NSA's Bulk Telephone Metadata Collection to Continue During the 180-Day Transition Period Between the Now-Expired Patriot Act and the Newly-Passed USA Freedom Act

Areas of Law: National Security

Issue(s) Presented: Whether, given that the Second Circuit previously held that the Patriot Act did not authorize the NSA's bulk telephone metadata collection program, the court should enjoin this program from continuing during the 180-Day transition between the Patriot Act and the new USA Freedom Act.

Brief Summary: In May of 2015, in response to a lawsuit brought by the ACLU, the Second Circuit held that the National Security Agency's (NSA) bulk telephone metadata collection program was not authorized by the Patriot Act of 2001. Under this program, which Edward Snowden publicized in 2013, the NSA had been collecting metadata about telephone calls made by and to Americans, and then placing that metadata (which included information about the length of the call and phone numbers involved, but not about the content of the call) in a repository for later use. After the Second Circuit's 2015 ruling, Congress allowed the Patriot Act to expire and immediately replaced it with the USA Freedom Act of 2015, passed on June 2, 2015, which allows the government to collect call detail records only if certain requirements are met. The Freedom Act also stated that these rules would take effect 180 days after the date of enactment of the Act (i.e., on November 29. 2015). Upon passage of the Freedom Act, the federal government asked the Foreign Intelligence Surveillance Court to permit it to continue the original telephone metadata program during the 180-day transition period. The ACLU then moved for a preliminary injunction to halt continuation of the telephone metadata program, and also reiterated its underlying constitutional challenges to bulk telephone metadata collection. The Second Circuit, however, denied the injunction - concluding that Congress had intended to authorize the continuation of the program for the 180-day transition period - and declined to reach the ACLU's underlying constitutional challenges at this time, given Congress's conclusion "that this type of data collection shall not be authorized in the future."

To read the full opinion, please visit http://www.ca2.uscourts.gov/de...e21aee80a08/4/hilite/

Panel: Circuit Judges Sack and Lynch; District Judge Broderick (S.D.N.Y.), by designation

Argument Date: September 2, 2015

Date of Issued Opinion: October 29, 2015

Docket Number: 14-42-cv

Decided: October 29, 2015

Case Alert Author: Jake B. Sher

Counsel: Alexander Abdo, American Civil Liberties Union, for Plaintiff-Appellants; Henry C. Whitaker, United States Department of Justice, for Defendant-Appellee.

Author of Opinion: Judge Lynch

Circuit:
2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 11/01/2015 08:29 PM     2nd Circuit     Comments (0)  

October 31, 2015
  Keeling v. Hars et al. - Second Circuit
Headline: Second Circuit holds derivative stage production parody of film Point Break is eligible for independent copyright protection.

Area of Law: Copyright

Issue(s) Presented: Whether a derivative work that satisfies the fair use exception under copyright law can be independently copyrighted.

Brief Summary: Jaime Keeling is the author of Point Break Live!, a stage production that parodies the film Point Break. The play relies almost exclusively on the dialogue from the film and juxtaposes that dialogue with sight gags and aspects such as having a member of the audience play the part of Keanu Reeves' character, reading from cue cards as a commentary on Reeves' supposedly wooden performance in the film.

In 2007, Keeling executed a contract with Eve Hars, the owner of a production company, New Rock Theater Productions, LLC. The contract allowed for a two month production run of Point Break Live!. At the conclusion of that run, Hars, who had become convinced that Keeling owned no rights to the play, attempted to renegotiate the contract and continued producing the play. Keeling registered a copyright in the play that became effective on January 4, 2008, and Hars continued producing the play for four years without paying anything to Keeling.

The underlying suit followed, and the United States District Court for the Southern District of New York denied Hars' motion for summary judgment. The district court judge instructed the jury that if they found the play constituted a "proper parody," they could find it to be a "fair use" derivative work that was independently copyrightable. The judge did not explicitly instruct the jury on all four of the fair‐use factors listed in 17 U.S.C. § 107, referencing them indirectly but stating that the list was "without much content or meaning." At trial, the jury found for Keeling in the amount of $250,000.

Hars appealed, arguing that a fair use of copyrighted material could not be the subject of an independent copyright in the new material. In essence, because the play borrowed so heavily from the film Point Break, even if it was a fair use it could not be copyrighted. Hars also argued that the district court judge should have instructed the jury on all four of the fair-use factors. The Second Circuit held that Keeling could claim independent copyright protection for her work, and that the parody exhibited the minimal degree of originality required for copyright protection to extend to it. It also held that the district court judge's instructions on originality and fair use were proper.

To read the full opinion, please visit:
">http://www.ca2.uscourt.../de.....f/2/hilite/


Panel: Judges Cabranes, Livingston and Droney

Argument Date: 6/26/2015 (decided on submission)

Date of Issued Opinion: 10/30/2015

Docket Numbers: 13-694-cv

Decided: Affirmed

Case Alert Author: Gavin Michael Strube & Jacob Sher

Counsel: Steven Paradise, Vinson & Elkins LLP, New York, NY, for Plaintiff-Counter-Defendant-Appellee. Eve Hars, pro se, Los Angeles, CA, for Defendant-Appellant

Author of Opinion: Judge Cabranes

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 10/31/2015 09:59 AM     2nd Circuit     Comments (0)  

October 28, 2015
  Lora v. Shanahan - Second Circuit
Headline: Second Circuit Holds that Indefinite Detention Under §1226(c) of the Immigration and Nationality Act is Unconstitutional and Adopts a Bright Line Test Limiting Mandatory Detention to No More Than Six Months Prior to Permitting a Bail Application.

Area of Law: Immigration/Constitutional

Issue(s) Presented: Whether mandatory detention of non-citizens convicted of certain crimes under the Immigration and Nationality Act §1226(c) must be "immediate" upon their release to be mandatory. Whether §1226(c) applies if a non-citizen is not released from a custodial sentence. Whether indefinite detention under §1226(c) violates the Due Process Clause of the Fifth Amendment to the United States Constitution.

Brief Summary: Under section 1226(c) of the Immigration and Nationality Act, the Department of Homeland Security is required to detain non-citizens who are convicted of certain crimes pending removal and deportation proceedings. Non-citizens who contest their removal regularly spend months or years in detention, which includes dangerous criminals alongside those with significant family ties who pose no risk to the community. Alexander Lora was one of these later detainees. Mr. Lora was taken into custody by Immigration and Customs Enforcement agents after being convicted of a drug related offense and detained without bail for four months. Mr. Lora petitioned for a writ of habeas corpus and argued that he was eligible for bail because he had never served jail time and so had not "been released" as required under §1226(c). He also argued that indefinite detention without the opportunity for bail violated his right to due process.

The United States District Court for the Southern District of New York granted his petition on the statutory grounds and did not decide the constitutional issue. The government appealed, and the Second Circuit held that the district court should have deferred to the Board of Immigration Authority's interpretation of the statute, but also that indefinite detention violates the Due Process Clause of the Firth Amendment. Following the Ninth Circuit, the Second Circuit adopted a bright line test mandating that detentions be no longer than six months before a bail application is allowed. The court further held that, "the detainee must be admitted to bail unless the government establishes by clear and convincing evidence that the immigrant poses a risk of flight or a risk of danger to the community."

To read the full opinion please visit:
http://www.ca2.uscourts.gov/de...556e40deb01/1/hilite/

Significance: With this decision, the Second Circuit joins several circuits in holding that an implicit time limit must be read into §1226(c) to comply with the Fifth Amendment right to Due Process. The Second Circuit futrther adopts the standard articulated by the Ninth Circuit, that a six-month limit on detention before a bail hearing is presumptively reasonable but anything beyond six months is unreasonable and rejects a fact specific case-by-case approach followed by the Third and Sixth Circuits.

Extended Summary: Alexander Lora entered the United States from the Dominican Republic in 1990 as a lawful permanent resident. He attended school, built a family and created significant ties to the community. In 2009, while working at a grocery store, Lora and a co-worker were arrested and charged with numerous offenses related to cocaine possession. In July 2010, Lora plead guilty to criminal possession of cocaine with intent to sell, criminal possession of cocaine with an aggregate weight of one ounce or more, and criminal use of drug paraphernalia. Lora's conviction for these crimes rendered him removable under INA §237(a)(2)(B) and INA §237(a)(2)(A)(iii). Lora was sentenced to five years probation and did not violate and conditions of his probation.

On November 22, 2013, Lora was arrested by ICE agents and transferred to Hudson County Correctional Facility without bond, and Homeland Security maintained that under §1226(c) he was subject to mandatory detention and was not eligible for a bail hearing. During this time, Lora moved in New York state court to set aside his conviction. This motion was granted, and Lora then plead guilty to a lesser charge, a single count of third degree possession of a controlled substance and was resentenced to conditional discharge dating back to July 21, 2010. This new sentence gave Lora a strong argument for cancellation of removal, as the new crime he plead guilty to did not qualify as an aggravated felony. As a drug offense, however, it still rendered Lora subject to mandatory detention under 1226(c). In March, 2014, Lora requested permission to file an application for cancellation of removal and that he be granted a bail hearing. His request to file the application was granted, but Lora was denied a bail hearing.

At the same time, Lora filed a petition for a writ of habeas corpus. He argued, first, that §1226(c) requires that an alien be taken into custody "when the alien is released," and ICE did not take Lora into custody until several years after his conviction, and since he was never imprisoned, he was never "released" and thus could not be detained under the section. Second, Lora argued that continued and/or indefinite detention without a bail hearing is unconstitutional under the Due Process Clause of the Fifth Amendment, particularly in light of his defenses against removal. Finally, he argued that his continued detention was not in the public interest.

The United States District Court for the Southern District of New York granted Lora's petition, finding Lora was not detained immediately upon his release from criminal custody and that since he served no custodial sentence (he was never imprisoned as a result of his conviction), he was never released from custody. A bail hearing was granted, and it was determined that Lora was neither a flight risk nor a danger to the community. Lora was released after posting $5000 bail. The district court did not consider or opine on the constitutional argument. The government appealed, arguing that the district court erred in interpreting §1226(c) to require that an alien be detained immediately after release from custody, as well as requiring a term of imprisonment as a condition to be subject to §1226(c). The government notably did not take the position that it should be permitted to detain immigrants indefinitely, but rather argued that a "fact-dependent inquiry" should be conducted in each and every case as to the allowable length of detention.

The Second Circuit agreed that the statute was interpreted improperly. Finding that, at best, the wording of the statute was ambiguous, the court explained that deference should be given to the government agency tasked with enforcing the law, providing the agency decisions are not arbitrary or capricious. The Second Circuit pointed to other sections of the INA where Congress explicitly required individuals to be incarcerated post-conviction to show that Congress did not intend to require an alien serve a term of imprisonment before §1226(c) applies. The Second Circuit also held the language in the statute that states "when...released" is a "duty-triggering" provision, not a "time-limiting" provision. In other words, when an alien is released is when ICE acquires the duty to detain them. However, it does not mean that they must be detained immediately upon release.

The Second Circuit then moved on to the constitutional argument. The Second Circuit stated that it is well-settled law that the Fifth Amendment grants due process rights to aliens during removal proceedings, and indefinite detention without a bail hearing so violates these rights that it is agreed upon by all parties that such conduct is unconstitutional. The court reasoned that earlier constitutional attacks on the statute had failed simply because at the time the average length of detention was brief but noted that this is no longer the case, with detention lasting months or even years in some cases due to heavy backlog, with thousands of non-citizens detained awaiting removal proceedings. Accordingly, the Second Circuit held that §1226(c) must be read to include a requirement that the detention only last a "reasonable" amount of time before a bail hearing should be granted.

The remaining question before the Second Circuit was what approach to utilize in analyzing what constitutes a "reasonable" time. The Second Circuit rejected the government's push to adopt the fact-specific case-by-case analysis applied by Third and Sixth Circuits. The court reasoned that such a case-by-case analysis of what is "reasonable" would lead to confusion and inconsistent rulings among the various district courts in the circuit and questioned the feasibility of such an approach given the Second Circuit's immense immigration docket. Instead, the Second Circuit adopted the bright-line rule followed by the Ninth Circuit that a six-month detention is reasonable, but anything over that time period is not. The court further announced that, after such time, a bail hearing must be held for the detainee, and if the detainee is not a flight risk or a danger to the community, bail must be granted.

To read the full opinion please visit:
http://www.ca2.uscourts.gov/de...556e40deb01/1/hilite/

Panel: Judges Kearse, Parker and Wesley

Argument Date: 4/20/2015

Date of Issued Opinion: 10/28/2015

Docket Number: 14-2343-pr

Decided: Affirmed

Case Alert Author: Gavin Michael Strube

Counsel: Christopher Connolly (Sarah S. Normand, on the brief), Assistant United States Attorneys for Preet Bharara, United States Attorney for the Southern District of New York, for Respondents-Appellants Rebecca A. Hufstader, Legal Intern, Luis Angel Reyes Savalza, Legal Intern, (Alina Das and Nancy Morawetz, on the brief), Washington Square Legal Services, Inc., NYU Law School, New York, NY; Bridget Kessler, Brooklyn Defender Services, Brooklyn, NY, on the brief, for Petitioner‐Appellee. Ahilan Arulanantham, ACLU Immigrants' Rights Project, Los Angeles, CA; Judy Rabinovitz and Anand Balakrishnan, ACLU Immigrants' Rights Project, New York, NY; Alexis Karteron and Jordan Wells, New York Civil Liberties Union Foundation, New York, NY, on the brief, for Amici Curiae American Civil Liberties Union; New York Civil Liberties Union. Andrea Saenz, Immigration Justice Clinic, Benjamin N. Cardozo School of Law, New York, NY, for Amici Curiae the Bronx Defenders; Detention Watch Network; Families for Freedom; Immigrant Defense Project; Immigrant Legal Resource Center; Kathryn O. Greenberg Immigration Justice Clinic; Make the Road New York; National Immigrant Justice Center; National Immigration Project of the National Lawyers Guild; Neighborhood Defender Service of Harlem; New Sanctuary Coalition of New York City; Northern Manhattan Coalition for Immigrant Rights. Farrin R. Anello, Immigrants' Rights/International Human Rights Clinic, Seton Hall University School of Law, Newark, NJ, for Amici Curiae Professors of Immigration and Constitutional Law.

Author of Opinion: Judge Parker

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 10/28/2015 08:06 PM     2nd Circuit     Comments (0)  

October 19, 2015
  New York State Rifle & Pistol Ass'n, Inc., et al. v. Cuomo, et. al.; Connecticut Citizens' Defense League v. Malloy
Headline: Second Circuit Upholds Bulk of Gun Control Legislation Enacted by New York and Connecticut Post-Sandy Hook

Area of Law: Constitutional Law

Issue Presented:Whether the New York and Connecticut gun control laws prohibiting possession of semiautomatic assault weapons and large-capacity magazines violate the Second Amendment and provide constitutionally sufficient notice of the conduct proscribed.

Brief Summary: Motivated by the horrific Sandy Hook Elementary School mass murder in Newtown, Connecticut, as well as by other mass shootings, New York and Connecticut amended their state assault-weapons bans in 2013. Both states' gun control legislation broadened the definition of prohibited "assault weapons" and banned large-capacity-magazines that could hold more than ten rounds of ammunition. New York's law also prohibited possession of a magazine loaded with more than seven rounds of ammunition (a "load limit"). Connecticut's law did not include a "load limit," but did include a list of 183 particular assault weapons that were banned. Plaintiffs - a combination of advocacy groups, businesses, and individual gun owners - filed suit in the Western District of New York and in the District of Connecticut against the governors of New York and Connecticut and other state officials, seeking declaratory and injunctive relief for alleged infringement of their Second Amendment rights. Plaintiffs also claimed that numerous provisions of each statute were unconstitutionally vague. The Second Circuit held that the core provisions of the New York and Connecticut laws prohibiting possession of semiautomatic assault weapons and large-capacity magazines did not violate the Second Amendment, and that none of the challenged provisions were void for vagueness, although it did reject New York's "load limit" and Connecticut's ban of one particular weapon.

Extended Summary: In January 2013, shortly after the mass murders at Sandy Hook Elementary School in Newtown, Connecticut, New York Legislature enacted the Secure Ammunition and Firearms Enforcement Act (SAFE Act), which expanded the definition of prohibited "assault weapons" by defining, as a prohibited weapon, any semiautomatic firearm that contained at least one feature from an enumerated list of military features, such as a battle shroud. Under this definition, the weapon used by the Sandy Hook shooter would have been prohibited. The SAFE Act also made the possession, manufacture, transport, or disposal of an "assault weapon" a felony. Finally, the SAFE Act banned magazines with a capacity to hold more than ten rounds of ammunition and also prohibited possession of a magazine loaded with more than seven rounds of ammunition (a "load limit").

Similarly, in April 2013, Connecticut adopted, and in June 2013, amended "An Act Concerning Gun Violence Prevention and Children's Safety." Much like New York's SAFE Act, the Connecticut statute substituted the two-feature definition of prohibited "assault weapons" with a stricter one-feature test. It also made it a felony to transport, import, sell, or possess semiautomatic "assault weapons." Additionally, the Connecticut legislation banned 183 particular assault weapons listed by make and model, including "copies or duplicates" of most of the listed firearms. Magazines with a capacity to hold more than ten rounds of ammunition were also banned, but unlike in New York, there was no seven-round load limit rule in the Connecticut statute. Both the New York and Connecticut legislation contained grandfather clauses permitting pre-existing owners of assault weapons to continue to possess their firearms if properly registered with the state.

Plaintiffs - a combination of advocacy groups, businesses, and individual gun owners - filed suit in the Western District of New York and in the District of Connecticut against the governors of New York and Connecticut and other state officials, seeking declaratory and injunctive relief for alleged infringement of their Second Amendment rights. Plaintiffs also claimed that numerous provisions of each statute were unconstitutionally vague. Both the United States District Court for the Western District of New York and the United States District Court for the District of Connecticut largely rejected their claims. On summary judgment, each court held that each state's legislation burdened plaintiffs' Second Amendment rights, that intermediate scrutiny should apply, and concluded that the laws' major provisions did not violate the Second Amendment. In the New York action, however, the district court did strike down limited aspects of the act, holding that the load limit did not pass intermediate scrutiny and that three specific provisions were unconstitutionally vague.

The Second Circuit largely affirmed. "The core prohibitions by New York and Connecticut of assault weapons and large-capacity magazines do not violate the Second Amendment," the court wrote. The court explained that both district courts had correctly evaluated the legislation under the constitutional standard of "intermediate scrutiny" - specifically, whether the statutes are "substantially related to the achievement of an important governmental interest" - and that here, the statutes passed intermediate scrutiny because they were substantially related to the important governmental interests of public safety and crime reduction, and because the record indicated that defendants tailored the legislation at issue to address these particularly dangerous weapons.

The Second Circuit further held, however, that neither New York's seven-round load limit nor Connecticut's ban on the Remington 7615 survived intermediate scrutiny. The Court found that because the seven-round load limit would not decrease the availability nor access of those who intend to use ten-round magazines for mass shootings or other crimes, the provision was "entirely untethered" from the governmental interest of reducing the amount of assault weapons and large-capacity magazines in circulation. The Remington 7615 ban did not survive intermediate scrutiny because Connecticut failed to set forth its rationale for banning the pump-action weapon, the single non-semiautomatic weapon on the list.

Finally, the Second Circuit held that no challenged provision in either statute was unconstitutionally vague. Generally, the court found that similar statutory language existed in both federal and New York statutes since 1994 and did not cause confusion at any time in the past two decades.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...d84df8c4dfee/3/hilite/

Panel: Circuit Judges Cabranes, Lohier, and Droney

Argument: 12/09/2014

Date of Issued Opinion: 10/19/2015

Docket Number: 14-36-cv(L); 14-319-cv

Decided: Affirmed in Part and Reversed in Part

Case Alert Author: Maria Ouzlian

Counsel: David Thompson, Charles J. Cooper, Peter A. Patterson, Cooper & Kirk, PLLC, Washington DC, and Brian T. Stapleton, Matthew S. Lerner, Goldberg Segalla LLP, White Plains, NY, Stephen P. Halbrook, Fairfax, VA, for Plaintiffs‐Appellants. Barbara D. Underwood, Solicitor General of the State of New York (Anisha S. Dasgupta, Claude S. Platton, Office of the Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General for the State of New York, New York, NY, for Defendants‐Appellees‐Cross‐Appellants Andrew M. Cuomo, et al. Maura B. Murphy Osborne, Assistant Attorney General of the State of Connecticut (Perry Zinn Rowthorn, Michael K. Skold, Gregory T. D'Auria, Office of the Attorney General, on the brief), for George Jepsen, Attorney General of the State of Connecticut, Hartford, CT, for Defendants‐Appellees Dannel P. Malloy, et al.

Author of Opinion: Judge Cabranes

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/19/2015 07:27 PM     2nd Circuit     Comments (0)  

October 17, 2015
  Authors Guild v. Google, Inc. - Second Circuit
Headline: A "Snippet" in Time is Perfectly Fine: Second Circuit Holds Google's Online Searchable Libraries of Copyrighted Books is '"Fair Use" and Does Not Infringe Book Authors' Copyrights

Areas of Law: Copyright, Class Action

Issues Presented: Whether Google's digital copying of plaintiffs' copyright protected works, submitted to Google by libraries without the authors' authorization, to make them publically searchable by internet users for display of limited 'snippets' from those works, was sufficiently transformative to constitute fair use and, therefore, did not infringe authors' copyrights.

Whether Google's provision of complete digitized copies of plaintiffs' works to libraries that supplied the copyrighted works in hard copy, on the understanding that the libraries would use the copies in a manner consistent with copyright law, constituted copyright infringement.

Brief Summary: Plaintiffs are authors of published and copyrighted books. Under an agreement with participating libraries, and without the authorization or consent from plaintiffs, defendant Google, Inc. ("Google") received and scanned complete copies of plaintiffs' works to create a searchable database for research purposes. Plaintiffs brought a class action suit in the United States District Court for the Southern District of New York alleging copyright infringement.

The district court rejected an early proposed settlement and, following the district court's certification of plaintiffs' fourth amended class action complaint, Google appealed from the certification and moved for summary judgment, asserting their use of the works met the "fair use" defense under copyright law 17 U.S.C. § 107. The Second Circuit provisionally vacated the class certification without addressing the merits and remanded the case for purposes of resolving Google's fair use defense. On remand, the district court granted summary judgment, dismissing plaintiffs' claims with prejudice. Plaintiffs timely appealed and the United States Court of Appeals for the Second Circuit affirmed, holding that Google's use of the works was fair use under copyright law because its use of the works was transformative, its display of copyrighted material was properly limited, and Google Books did not serve as a market substitute for the original works.

To read the full opinion, visit:
">http://www.ca2.uscourt.../de.....a/1/hilite/


Extended Summary: Plaintiffs are authors of published and copyrighted books. Defendant Google, Inc. ("Google") received and scanned complete copies of plaintiffs' works to create a searchable database for research purposes for its Google Library Project and Google Books search tool. The Google Library Project involved bilateral agreements between defendant and several of the world's major research libraries. These agreements permitted participating libraries to submit books form their collections to Google, which Google would scan, digitize, and index. Google retained the original scanned image of each work and stored it on servers protected by the same security systems used by Google to shield its own confidential information. Google then used these works - more than 20 million in all - to create a searchable database for research purposes. The agreements, even in their least restrictive form, required the libraries to employ digital copies of the scanned works in conformity with federal copyright law.

For its Google Books search tool, Google exhibited samples of plaintiffs' works through a publicly available search function, displaying a "snippet view" that contained three lines of sample text containing the searched-for terms in addition to telling the number of times the word or term selected by the searcher appeared in the text of the book. In launching the search tool, Google displayed no advertising to the user of the search function, nor did it receive direct payment from a user's activities. Google allowed only the first usage of the term searched for on a given page, limited to a maximum of three snippets. Google also "blacklisted" one snippet on each page and one complete page out of every ten, making those portions of the work unavailable for snippet view. This amounted to approximately 22% of the total text of a given work.

Plaintiffs brought a class action suit in the United States District Court for the Southern District of New York under 17 U.S.C. § 107 alleging copyright infringement. The district court rejected an early proposed settlement and, following the district court's certification of plaintiffs' fourth amended class action complaint, Google appealed from the certification and moved for summary judgment, asserting their use of the works met the "fair use" defense under copyright law. The Second Circuit provisionally vacated the class certification without addressing the merits and remanded the case for purposes of resolving Google's fair use defense. On remand, the district court granted summary judgment, dismissing plaintiffs' claims with prejudice. Plaintiffs timely appealed and the United States Court of Appeals for the Second Circuit.

On appeal, plaintiffs presented four arguments challenging the district court's ruling. First, they argued that digital copying entire books, and allowing internet users a window into small snippets, was not a "transformative use," and instead provided a substitute for the work. Second, they contended that, although Google made the works publically accessible without direct monetary gain, its revenue from its dominance of the internet search market precluded a fair-use finding. Third, plaintiffs suggested that Google's activities infringed upon their derivative rights by depriving them of revenues or other benefits they would gain from licensed search markets. Finally, plaintiffs contended that the digitized storage of the copyrighted works created a vulnerability that hackers could exploit to disseminate the full texts in contravention of plaintiffs' rights.

The Second Court began by discussing the common law origins of fair use, "which permits unauthorized copying in some circumstances, so as to further copyright's very purpose, to promote the Progress of Science and useful Arts" and was codified in 17 U.S.C. § 107 by Congress in a four factor test to determine fair use. The statute provides that "[t]he fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching . . . , scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work."

The Second Circuit highlighted the Supreme Court's historical grant of greater weight to the first factor, the "purpose and character of the secondary use," and to the fourth factor, "the effect of the use upon the potential market for or value of the copyrighted work," with the fourth factor having the greatest importance. In its analysis, the Court relied significantly on its 2014 decision in Authors Guild, Inc. v. HathiTrust, in which authors brought claims of copyright infringement against an entity formed by libraries participating in the Google Library Project to pool digital copies of books provided to them by Google. In HathiTrust, the Second Circuit held that the making of digital copies and the indexing of those copies via a search tool were fair uses, because "the creation of a full-text searchable database is a quintessentially transformative use." While the Court recognized distinctions between HathiTrust and the case before it, such as Google's display of a "snippet view" and the fact that defendant Google, unlike the defendant in HathiTrust, was a for-profit commercial corporation, it did not find those distinctions destructive to a fair use defense. Instead, the Court examined the nature of the snippets in detail. While the Court recognized that the snippet function could cause some loss of sales for plaintiffs, the fact that a study conducted by plaintiffs could reveal no more than 16% of a book, and because of the snippets' "brief . . . cumbersome, disjointed, and incomplete nature," the Court held that the Google Books search tool constituted a "fair use" did not provide a "significant substitute" for the purchase of plaintiffs' works.

The Court also rejected plaintiffs' argument that Google's use deprived them of derivative rights to revenue from licensed searches finding Google's use simply enabled members of the public to obtain information about whether those works were relevant to their research projects or other interests. Given the surgical manner in which Google restricted the snippets to provide a minimum of contextual background to members of the public, the court held such restriction did not infringe upon plaintiffs' derivative rights. The Court also rejected plaintiffs' argument that Google's storage of digitized copies of their works might expose plaintiffs' works to hackers, holding the argument "theoretically sound," but ineffectual in the absence of any evidence of an "impending" threat. The Court also noted plaintiffs' own security expert had praised Google's security systems, which it used to protect its own proprietary data in addition to plaintiffs' books. Finally, the Court held that defendant's agreements with libraries under the Google Library Project sufficient to protect against plaintiffs' copyright infringement claims because those libraries had agreed to adhere to federal copyright law in their use of Google Library Project texts.

To read the full opinion, visit:
">http://www.ca2.uscourt.../de.....a/1/hilite/


Panel: Circuit Judges Leval, Cabranes, and Parker

Argument Date: 12/03/2014

Argument Location: New York, NY

Date of Issued Opinion: 10/16/2015

Docket Number: 13-4829-cv

Decided: Affirmed

Case Alert Author: Jake B. Sher

Counsel: Paul M. Smith, Jenner & Block LLP, Washington, DC, for Plaintiff-Appellants; Seth P. Waxman, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C., for Defendant-Appellee.

Author of Opinion: Judge Leval

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

Edited: 10/19/2015 at 06:11 AM by Elyse Diamond

    Posted By: Elyse Diamond @ 10/17/2015 10:17 AM     2nd Circuit     Comments (0)  

October 9, 2015
  Baldwin v. EMI Feist Catalog
Case Name: Baldwin v. EMI Feist Catalog, Inc.

Headline: Rights To "Santa Claus is Comin' to Town" Will Return to Songwriter's Family in 2016

Area of Law: Copyright

Issue(s) Presented: Whether the notice of termination that the statutory heirs of the songwriters served on the defendant validly terminated the defendant's copyright.

Brief Summary: The plaintiffs - the statutory heirs of J. Fred Coots, who co-wrote "Santa Claus is Comin' To Town" - began trying in 2004 to terminate rights in the song held by defendant EMI Feist Catalog, to whom Coots and his co-writer had sold the song and copyright in 1934. In 2007 and again in 2012, they served copyright termination notices on the defendant. They subsequently sought a declaratory judgment that these termination notices were effective and that the defendant's rights in the song would terminate as of 2016. Although the United States District Court for the Southern District of New York ruled against them, the United States Court of Appeals for the Second Circuit reversed that decision and ruled in their favor.

Extended Summary: J. Fred Coots and Haven Gillespie, the authors of "Santa Claus is Comin' to Town," ("the Song") first sold their rights to the Song to EMI Feist Catalog, the defendant, in 1934. In 1951, the authors then granted all renewal rights and extensions of all copyrights to the Song for all renewal periods to EMI. EMI later renewed their copyright in the Song, setting an expiration date of 1990. However, in 1976 Congress enacted a statutory scheme that gave authors and their statutory heirs the right to terminate previously made grants of copyright, and to recapture some of the value associated with the authors' work. The 1976 statutory scheme also extended EMI's renewal term until 2009.

According to the statutory scheme, which created two classes of copyright grants, pre-1978 and post-1978, the 1951 Agreement was subject to termination starting on September 27, 2009 and termination could be served as early as ten years before that date. In 1981, Coots heirs served the first termination notice on EMI, naming October 23, 1990, as the termination date for the 1951 Agreement. Following the 1981 Termination Notice, EMI and the heirs negotiated an Agreement, the 1981 Agreement. The 1981 Agreement recited that Coots had transferred the Song's renewal term to EMI in 1951, that EMI had renewed the copyright, and that Congress extended the renewal term, and that EMI possessed all of the copyright interest for the balance of the period. The 1981 Termination Notice was returned to the heirs, and unrecorded. In 1998 Congress enacted the Sonny Bono Copyright Term and added a new termination right that could be effected at any time during a period of 5 years beginning at the end of 74 years from the date copyright was originally secured. This meant that in the case of the Song, termination could start on September 27, 2009.

In 2004, the author's heirs served EMI a termination notice with an effective date of September 27, 2009. EMI responded that the heirs had already exercised their termination rights. The heirs served EMI again in 2007 and 2011, with similar responses from EMI. EMI continually argued that the heirs already exercised their termination right and that they owned the copyright pursuant to the 1951 Agreement and termination was unavailable. According to the 1978 Statutory Scheme, if EMI owned copyright under the 1951 Agreement, the heirs were powerless to termination, but if EMI owned the copyright under the 1981 Agreement, the heirs could effectively terminate. In 2011 the heirs sued EMI seeking declaration that termination was effective. The district court granted summary judgment to EMI, holding that its rights in the song were pursuant to the 1951 Agreement, and termination was unavailable.

The United States Court of Appeals for the Second Circuit reversed, and entered a declaratory judgment in the Plaintiff's. The Second Circuit found that EMI owned the copyright pursuant to the 1981 Agreement, as it was sufficiently clear the parties intended it to replace the 1951 Agreement. The Second Circuit then found that because EMI owned the copyright pursuant to the 1981 agreement, which was a post-1978 agreement, the heirs were entitled to terminate. Therefore, the 2007 Termination Notice will terminate the 1981 Agreement in 2016 and the Song's copyright will be owned by the author's heirs. To read the full decision please visit: http://www.ca2.uscourts.gov/de...e9cbbea3e97a/1/hilite/

Panel: Circuit Judges Pooler, Livingston, and Droney

Argument Date: December 11, 2014

Argument Location: New York

Date of Issued Opinion: October 8, 2015

Docket Number: No. 14-182-cv

Decided:
Reversed and Remanded

Case Alert Author: Elizabeth Perreca

Counsel: Thomas K. Landry, Carey Rodriquez O'Keefe Milian Gonya, LLP, for Plaintiffs-Appellants.
Donald S. Zakarin (Frank P. Scibilia, Ross M. Bagley, on the brie), Pryor Cashman LLP, for Defendant-Appellee.

Author of Opinion: Judge Debra Ann Livingston

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman
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    Posted By: Emily Waldman @ 10/09/2015 01:03 PM     2nd Circuit     Comments (0)  

September 29, 2015
  Expressions Hair Design v. Schneiderman - Second Circuit
Headline: Second Circuit Holds New York's Consumer Protection Statute Prohibiting Merchants from Charging Credit-Card Surcharge Does Not Violate the First Or Fourteenth Amendments

Area of Law: Business; Consumer Protection

Issue(s) Presented: Whether New York's consumer protection statute that prohibits imposing a credit-card surcharge on consumers violates the First Amendment and is unconstitutionally vague in violation of the Due Process Clause of the Fourteenth Amendment.

Brief Summary: Five New York businesses ("Plaintiffs") challenged New York's General Business Law § 518 ("Section 518"), which prohibits sellers from imposing a credit-card surcharge over the regular product purchase price, as unconstitutional, and sought a permanent injunction enjoining New York State from enforcing the law against them. Plaintiffs argued the law is an impermissible content-based free speech restriction in violation of the First Amendment and is impermissibly vague, and therefore void, under the Due Process Clause of the Fourteenth Amendment of the United States Constitution.

The United States District Court for the Southern District of New York agreed, declaring Section 518 unconstitutional and enjoining New York from enforcing it against the Plaintiffs. The United States Court of Appeals for the Second Circuit reversed and remanded the district court's decision, holding that Section 518 regulates prices, not speech, and has a core meaning that can reasonably be understood and applied.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...758de/1/hilite/


Extended Summary: New York State enacted General Business Law § 518 ("Section 518") in 1984 to prohibit businesses from collecting surcharges from customers who purchase goods or services with credit cards instead of cash, check or other alternative payment. New York's enactment of Section 518 was motivated by the expiration of an almost identical federal law. While prohibiting a credit card "surcharge," both the federal law, by its express statutory language, and New York State law, in its summary, permit sellers to offer a "discount" to customers paying in cash. Unlike the expired federal law, Section 518 does not incorporate explicit definitions of "surcharge," "discount," and "regular price."

Five New York businesses, Expressions Hair Design, The Brooklyn Farmacy & Soda Fountain, Inc., Bunda Starr Corp., Five Points Academy, and Patio.Com LLC, along with their owners and officers (collectively the "Plaintiffs"), sued the Attorney General of the State of New York and the District Attorneys of New York County and Kings County (collectively "New York") in the United States District Court for the Southern District of New York, claiming that Section 518 violates the First Amendment's Free Speech Clause and is void for vagueness under the Fourteenth Amendment's Due Process Clause. The district court agreed and entered a judgment declaring Section 518 unconstitutional and permanently enjoining New York from enforcing the law against Plaintiffs. The Defendants appealed. The United States Court of Appeals for the Second Circuit reversed, holding Section 518 does not violate either the First Amendment or Fourteenth Amendment of the United States Constitution.

At the time of suit, only one Plaintiff charged different amounts for credit and cash. That Plaintiff alleged its speech was impermissibly burdened because describing the pricing difference as a "surcharge" or telling customers they would be "charged more" for credit might violate Section 518. The remaining Plaintiffs contended the statute impermissibly restricted their ability to post a single price for goods and services and charge "a surcharge" to credit‐card customers, rather than offering a "discount" to those paying cash. They also contended the statute was impermissibly vague because its applicability depends upon the particular language a seller uses to describe its pricing.

In reversing the district court's finding that the statute violated the First Amendment, the Second Circuit found that Section 518 is a restriction not on speech, but merely on pricing. Citing extensive Supreme Court precedent, the court found it well-established that regulations of economic conduct, including price controls and other price regulations, do not implicate the First Amendment. The Court stated that Plaintiffs mistakenly sought to equate the restriction on the actual imposition of a credit card surcharge with a restriction on the words of the English language used to describe the pricing scheme. It further noted that not only have price-control laws have never been linked to the First Amendment, but prices, although inherently communicated through language, are not considered speech.

The Court also concluded that the district court erred in holding Section 518 unconstitutionally vague under the Due Process Clause of the Fourteenth Amendment. Relying on Supreme Court cases emphasizing that a law is facially unconstitutional only if it is impermissibly vague in all of its applications, the Second Circuit found that Section 518 is constitutional because it has a core meaning that can reasonably understood as applying to sellers who post a single price for goods and services. The Court expressed confidence that sellers of ordinary intelligence could readily understand how to avoid imposing a credit card surcharge, and that New York authorities have sufficient guidance in determining whether sellers are in violation of the law.

Accordingly, the Second Circuit concluded that Section 518 violates neither the First nor the Fourteenth Amendments, and vacated the judgment of the district court and remanded for dismissal of Plaintiffs' claims.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...5590f0758de/1/hilite/

Panel: Circuit Judges Wesley, Livingston, and Carney

Argument Date: 3/5/2015

Date of Issued Opinion: 9/29/2015

Docket Number: 13-4533(L)

Decided: Vacated and Remanded

Case Alert Author: Brad Landau

Counsel: Deepak Gupta, Gupta Beck PLLC, Washington, DC (Gary Friedman, Friedman Law Group, LLP, New York, NY, on the brief), for Plaintiffs‐Appellees; Judith Vale, Assistant Attorney General (Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, on the brief), for Defendant‐Appellant Eric T. Schneiderman, in his official capacity as Attorney General of the State of New York; Larry A. Sonnenschein, Ronald E. Sternberg, for Zachary W. Carter, Corporation Counsel of the City of New York, for Defendants‐Appellants Cyrus R. Vance, Jr., in his official capacity as District Attorney of New York County, and Charles J. Hynes, in his official capacity as District Attorney of Kings County; Linda P. Nussbaum, Grant & Eisenhofer, P.A., New York, NY, for Amici Curiae The Kroger Company, Safeway Inc., Walgreen Co., Food Lion, LLC, Hy‐Vee Inc., H.E. Butt Grocery Co., The Great Atlantic & Pacific Tea Co., Inc., Albertson's LLC, and Rite Aid Corp., in support of Plaintiffs‐Appellees; J. Douglas Richards, Cohen Milstein Sellers & Toll PLLC, New York, NY, for Amici Curiae Consumer Action, National Association of Consumer Advocates, National Consumers League, and U.S. Public Interest Research Group, in support of Plaintiffs‐Appellees; Henry C. Meier, Associate General Counsel, for Amicus Curiae Credit Union Association of New York in support of Defendants‐Appellants.

Author of Opinion: Judge Livingston

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz.

    Posted By: Elyse Diamond @ 09/29/2015 07:52 PM     2nd Circuit     Comments (0)  

September 27, 2015
  Cty. of Westchester v. U.S. Dep't of Hous. & Urban Dev.--Second Circuit
Headline: Second Circuit Holds that HUD's Withholding of Funds from Westchester County for 2011, 2012, and 2014 Did Not Violate Federal Law, but that HUD Must Delay Its Reallocation of the 2014 Funds Until the County Exhausts its Right of Further Review

Area of Law: Housing/Administrative

Issue Presented: Whether HUD was entitled to withhold funds from Westchester County on grounds that the county - in its analysis of impediments to fair housing - failed to adequately consider the potential exclusionary impact of its various municipalities' zoning laws.

Brief Summary: This appeal arose from a long-running conflict between Westchester County and the United States Department of Housing and Urban Development ("HUD"). The conflict began in 2006, when the Anti-Discrimination Center of Metro New York alleged that Westchester had falsely certified to HUD - in order to obtain housing grants - that it would "affirmatively further fair housing," when in fact it was failing to analyze impediments to fair housing or to develop strategies to overcome those impediments. In 2009, Westchester and HUD reached a settlement whereby, among other things, Westchester agreed to take numerous steps to promote "fair housing," including building 750 units of affordable housing over the next seven years, doing an analysis of impediments to fair housing in the county, passing a ban on "source of income" discrimination by landlords, and working with a monitor to oversee compliance. After this settlement was reached, Westchester continued to apply for HUD funds. HUD, however, has withheld these funds on grounds that Westchester did not satisfy all of these conditions. This particular appeal focused on whether HUD could reject Westchester's application on the basis of its determination that Westchester's analysis of fair housing impediments had failed to adequately consider the potential exclusionary impact of its different municipalities' zoning laws. The Second Circuit held that HUD could do so, explaining that "because exclusionary zoning can violate the FHA [Fair Housing Act], and because HUD is required to further the policies of that statute, it was reasonable for HUD to require the County" to include such an assessment in its analysis. The court further held that HUD must wait to reallocate Westchester's potential 2014 funds until Westchester exhausted its right for further review.

Extended Summary: In 2006, the Anti-Discrimination Center of Metro New York brought an action alleging that Westchester County had filed false claims from 2000-2006 in order to obtain nearly $52 million in federal housing grants. Its lawsuit claimed that although Westchester had certified that it would affirmatively further fair housing, and that it had analyzed impediments to fair housing and/or developed strategies to overcome them, the county had actually failed to do so.

In 2009, Westchester and HUD reached a settlement that obligated Westchester to pay back $30 million to the federal government, as well as to spend $30 million of the county's own money to build 750 affordable housing units over the next seven years. The settlement decree also required Westchester to provide HUD with an analysis of impediments to fair housing within 120 days, provided for a monitor to be put in place to ensure compliance, and to promote - a through county legislation - a ban on "source-of-income" discrimination (i.e., legislation making it illegal for owners to refuse to rent to a tenant because that tenant's income comes from Social Security or public assistance programs).

After 2009, Westchester continued to apply for funds from HUD, but its application was denied for several reasons. The instant appeal focused on HUD's decision to deny Westchester's application for funding on the basis of its determination that Westchester's analysis of fair housing impediments had failed to adequately consider the potential exclusionary impact of its various municipalities' zoning laws. (Westchester had concluded that there was no evidence of exclusionary zoning in any of the 31 eligible municipalities in Westchester County; by contrast, the monitor had concluded that certain municipalities had zoning that was socioeconomically exclusionary and/or had a discriminatory impact on racial and ethnic minorities.)

The United States District Court for the Southern District of New York rejected Westchester County's challenge to HUD's determination, and the Second Circuit affirmed. As the court explained, under the Administrative Procedure Act (APA), a reviewing court must uphold agency action unless it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. Here, the court held that HUD's decision had been in accordance with the Fair Housing Act, and neither arbitrary nor capricious, given that exclusionary zoning can violate the FHA and that the monitor had produced detailed reports that refuted Westchester's contention that no municipalities had exclusionary zoning ordinances.

The Second Circuit also rejected Westchester's argument that HUD had violated two statutory provisions that prohibit HUD from requiring jurisdictions to change their zoning laws to qualify for funding. The court explained that HUD had never told Westchester that it would receive funds only if its municipalities actually changed their laws. "Instead, HUD required the County to assess and analyze whether certain zoning laws in the jurisdiction impeded fair housing and, if so, to identify a plan to overcome the effects of such impediments," the court wrote. The court described Westchester as having "reached the same boilerplate conclusion for every municipality," and that HUD had "determined that this repetitive conclusion for each municipality" was not supported by the evidence.

The court emphasized, however, that "this decision does not mean that any of Westchester County's municipalities violated the Fair Housing Act or engaged in discrimination on the basis of race. We merely conclude that HUD's decision - in the context of providing federal funds - to require the County to redo its zoning analysis and to develop strategies to overcome impediments to fair housing did not violate federal law. In short, there has been no finding, at any point, that Westchester actually engaged in housing discrimination."

Panel: Cabranes, Raggi and Wesley

Argument Date: 9/22/15

Date of Issued Opinion: 9/25/15

Docket Numbers: 13-cv-2741, 15-cv-1992

Decided: Affirmed, Temporary Injunction Vacated in Part

Case Alert Author: Gavin Michael Strube

Counsel: Robert F. Meehan, Westchester County Attorney for Plaintiff-Appellant County of Westchester and David J. Kennedy, Assistant United States Attorney for the Southern District of New York for Defendant-Appellee U.S. Dep't Hous. & Urban Dev.

Author of Opinion: Per Curiam

Case Alert Circuit Supervisor: Emily Waldman

    Posted By: Emily Waldman @ 09/27/2015 08:51 PM     2nd Circuit     Comments (0)  

September 23, 2015
  Knife Rights, Inc. v. Vance - Second Circuit
Headline: Second Circuit Finds Individual and Business Plaintiffs Have Standing to Seek a Declaratory Judgment that New York's Law Criminalizing the Possession of Gravity Knives is Unconstitutionally Vague, but Advocacy Organization Plaintiffs Lack Standing

Area of Law: Constitutional Law

Issue(s) Presented: Whether plaintiffs-appellants have standing to pursue a vagueness challenge to a New York law criminalizing the possession of gravity knives and to pursue injunctive relief.

Brief Summary: Plaintiffs-Appellants John Copeland, Pedro Perez, the business Native Leather, and the advocacy organizations Knife Rights and Knife Rights Foundation brought an action to the United States District Court for the Southern District of New York seeking declaratory and injunctive relief against the city of New York and New York County District Attorney Cyrus Vance, Jr., for applying the New York law criminalizing the possession of gravity knives in such a way that renders the proscription unconstitutionally vague as applied to common folding knives, thereby depriving the plaintiffs of the notice mandated by due process.

The United States District Court for the Southern District of New York dismissed plaintiffs' complaint for lack of subject matter jurisdiction, concluding that they lacked standing to pursue that challenge. The United States Court of Appeals for the Second Circuit affirmed the district court's holding that the organizations Knife Rights and Knife Rights Foundation do not have standing, but vacated and remanded the district court's holding as to Copeland, Perez, and Native Leather, finding those plaintiffs sufficiently alleged an injury in fact to satisfy standing.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...scourts.gov/decisions/ isysquery/f68a9b82-d6fd-43c9-ac50-bf1531f61e64/2/hilite/

Extended Summary: In 2010, plaintiffs-appellants John Copeland, an artist, and Pedro Perez, an art dealer, were separately charged with violations of New York Penal Law § 265.01(1), relating to the illegal possession of gravity knives. Joined by plaintiff-appellant Knife Rights, an advocacy organization which asserted certain of its members have been charged or were threatened with charged violations of § 265.01(1), Copeland and Perez initiated an action in the United States District Court for the Southern District of New York seeking a declaration that New York Penal Laws §§ 265.00(5) and 265.01(1) are unconstitutionally vague as applied to common folding knives, and an injunction preventing the defendants, New York City and New York County District Attorney Cyrus Vance, Jr. from continuing to enforce these statutes as to such knives. The defendants moved for dismissal, and plaintiffs successfully sought leave to amend, adding as plaintiffs Native Leather, a retail store that sells folding knives and had been previously charged with violations of § 265.01(1) resulting in fines and mandatory surrender of property, and a second advocacy group Knife Rights Foundation. The defendants then renewed their motion for dismissal, arguing that the court lacked subject matter jurisdiction because no plaintiff alleged an "injury in fact," which is necessary to establish Article III standing. The district court agreed and entered judgment for the defendants.

Copeland and Perez alleged that they have carried, and wish again to carry, common folding knives, but cannot do so because they cannot determine which knives the defendants will deem gravity knives prohibited by § 265.01(1), and they do not wish to risk prosecution, having already been charged with § 265.01(1) violations. The United States Court of Appeals for the Second Circuit found that, given that defendants have indicated their continued intent to prosecute under this statute, Copeland and Perez demonstrated a credible threat of imminent prosecution for intended conduct. The court reasoned that neither Copeland nor Perez should be required to pursue arguably illegal activity or exposure to criminal liability to establish standing to challenge the constitutionality of the law threatened to be enforced. Therefore, the Court found Copeland and Perez satisfied the injury in fact element of standing, and vacated the district court's judgment in favor of the defendants and remanded for further proceeding.

Likewise, the court held that Native Leather, which sells a variety of folding knives that it does not believe violates § 265.01(1), had been formerly charged under the statute, and alleged it is unable to determine which knives the defendant will deem proscribed gravity knives, also satisfied standing requirements. The court concluded that the totality of the circumstances demonstrated a credible threat of imminent prosecution if defendant Vance determined that Native Leather was again selling common folding knives he deemed proscribed gravity knives. The court again reasoned that Native Leather should not be required to expose itself to criminal liability before bringing a suit to challenge the constitutionality of the law threatened to be enforced and vacated the district court's judgment in favor of the defendants, remanding for further proceeding.

In contrast, the Second Circuit held that advocacy organization plaintiffs Knife Rights and Knife Rights Foundation lacked standing to sue on behalf of their members. Rejecting the contention that these plaintiffs met their requirements of Article III standing because they incurred expenses in opposing defendants' application of § 265.01(1), the court found that, even if these expenditures impaired the organization's activities, they at best demonstrate past injury and not injury that can be redressed through the prospective declaratory and injunctive relief sought in this action. Lacking a credible threat that they will be prosecuted, or a showing that anticipated expenditures and ensuing harm to their organizations' activities are certainly impending, the Court affirmed the district court's judgment dismissing Knife Rights and Knife Rights Foundation for lack of standing.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...scourts.gov/decisions/ isysquery/f68a9b82-d6fd-43c9-ac50-bf1531f61e64/2/hilite/

Panel: Judges Katzmann, Kearse, and Raggi

Argument (if known): 01/13/2015

Date of Issued Opinion: 09/22/2015

Docket Number: 13-48040-cv

Decided: Affirmed in Part and Vacated and Remanded in Part

Case Alert Author: Steven Manganelli

Counsel: Daniel L. Schmutter, Greenbaum, Rowe, Smith & Davis LLP, Woodbridge, New Jersey, for Plaintiffs‐Appellants; Benjamin E. Rosenberg (Patricia J. Bailey, on the brief), Assistant District Attorneys, for Cyrus R. Vance, Jr., District Attorney of New York County, New York, New York, for Defendant‐ Appellee Cyrus R. Vance, Jr. 3 Michael J. Pastor, Senior Counsel (Kristin M. Helmers, Counsel, on the brief), for Zachary W. Carter, Corporation Counsel of the City of New York, New York, New York, for Defendant‐ Appellee City of New York.

Author of Opinion: Judge Raggi

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 09/23/2015 09:23 AM     2nd Circuit     Comments (0)  

September 16, 2015
  Citizens Against Casino Gambling in Erie Cty. v. Chaudhuri
Headline: Second Circuit Holds That Seneca Nation Can Run a Casino on its Buffalo, New York Property

Area of Law: Indian Affairs

Issue presented: Whether the U.S. Department of the Interior and the National Indian Gaming Commission acted arbitrarily or capriciously, abused their discretion, or acted in violation of the law in concluding that the Seneca Nation's "Buffalo Parcel" could be used a class III gambling site under the Indian Gaming Regulatory Act.

Brief Summary: In August 2002, the Seneca Nation and the State of New York executed a Nation-State Gaming Compact under which the Seneca Nation would be allowed to establish class III gaming facilities (i.e., a casino) in Buffalo on lands acquired with funds from the Seneca Nation Settlement Act ("SNSA"). Several years later, the Seneca Nation proceeded to purchase nine acres of property in Buffalo, stating that the lands were acquired for the purposes set forth in the 2002 Compact. This triggered several rounds of litigation by plaintiffs, a coalition of individuals and organizations who oppose gambling. In their most recent action, the plaintiffs brought suit in the Western District of New York, claiming that the Indian Gaming Regulatory Act forbade the Buffalo property from being used for class III gaming and that the National Indian Gaming Commission's approval of this usage had not been in accordance with federal law. The district court dismissed the plaintiff's claims, and the Second Circuit affirmed, ruling that the determination by the National Indian Gaming Commission and the Department of the Interior that the Buffalo parcel was eligible for class III gaming had not been arbitrary or capricious, an abuse of discretion, or in violation of the law.
To read the full opinion, please visit ">http://www.ca2.uscourt.../de.....1/1/hilite/


Extended Summary: The regulation of gaming by Indian tribes is governed by the Indian Gaming Regulatory Act ("IGRA"). In order for Native American tribes to conduct gaming activities, the IGRA requires that the tribe have jurisdiction over that particular land, and that the property where the gaming is conducted qualify as "Indian lands."

The Second Circuit began by analyzing whether the Seneca Nation had jurisdiction over the Buffalo parcel, focusing on whether the Buffalo property qualified as a "dependent Indian community" under the Seneca Nation's tribal jurisdiction. To be a "dependent Indian community," two elements must exist. First, the property must be set aside by the federal government for for use by a Native American tribe. Second, the land must be under continued federal superintendence.

The court found that both requirements were satisfied here. First, the court determined that the Buffalo property qualified as a federal set-aside because the property was purchased with SNSA funds. The court explained that the SNSA had limited the purchase of Indian lands with SNSA funds to areas within the Seneca's "aboriginal area in the State or situated within or near proximity to former reservation land. Second, the court found that the Buffalo Parcel was subject to federal superintendence. "Congress - through the SNSA - set aside the Buffalo Parcel for the Seneca Nation's use in order to further tribal interests and provided that the Parcel would be subject to federal superintendence," the court explained. Accordingly, "the Seneca Nation has jurisdiction over this land, and New York has therefore been divested of its jurisdiction."

Having determined that the Seneca Nation had jurisdiction over the Buffalo property, the court next analyzed whether the property qualified as "Indian lands" for purposes of the IGRA. Although the plaintiffs argued that the Department of the Interior and the National Indian Gaming Commission had erred in recognizing the parcel as "Indian lands," the Second Circuit disagreed, explaining that the Seneca Nation held sufficient title over the parcel.

Finally, the Second Circuit rejected the plaintiff's argument that a provision of the IGRA prohibited gaming on the Seneca Nation, explaining that this provision applied only to "lands acquired by the Secretary [of the Interior] in trust for the benefit of an Indian tribe," not - as here - to "lands held in restricted fee by a tribe." The court thus affirmed the district court's dismissal of the plaintiffs' complaint.

Panel: Judges Katzmann, Lohier, and Droney.

Argument: 01/16/ 2015

Date of Issued Opinion: 09/15/2015

Docket Number: 11-5171(L)

Decided: Affirmed

Case Alert Author: Brian Byrne

Counsel: CORNELIUS D. MURRAY, O'Connell and Aronowitz, for Plaintiffs. KATHERINE J. BARTON, United States Department of Justice, Environment & Natural Resources Division. Michael Hoenig, Office of General Counsel, National Indian Gaming Commission,; Andrew S. Caulum, Office of the Solicitor, United States Department of the Interior, Robert G. Dreher, Sam Hirsch, Acting Assistant Attorney General; William J. Hochul, Jr., United States Attorney for the Western District of New York; Mary E. Fleming, Assistant United States Attorney, Western District of New York,; Gina L. Allery, John L. Smeltzer, United States Department of Justice, Environment & National Resources Division, for Defendants‐ Appellees‐Cross‐Appellants.

Author of the Opinion: Judge Droney

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 09/16/2015 08:54 PM     2nd Circuit     Comments (0)  

  Orlander v. Staples, Inc. - Second Circuit
Headline: Second Circuit Finds Staples, Inc. Two-Year "Carry-In" Protection Plan Ambiguous and Potentially Misleading to Customers

Area of Law: Contracts and Business

Issue(s) Presented: Whether the district court erred in granting defendant Staples, Inc.'s motion to dismiss contract and deceptive business practice claims, based upon a finding that Staples' Protection Plan was unambiguous, any breach of the terms was immaterial, and plaintiff failed to adequately allege damages and injury under New York law.

Brief Summary: In March 2012, Andrew Orlander purchased a computer and Staple, Inc.'s ("Staples") two-year "Carry-in" Protection Plan at a Staples store. At that time, Orlander was given a Protection Plan Brochure (the "contract") and verbal assurance from a sales representative that the Protection Plan would offer better coverage than the manufacturer's warranty and that, under the Plan, Orlander would "never need to contact the manufacturer." In November 2012, Orlander brought the computer back to the Staples store with internet-connectivity issues and asked to exchange it for another computer. An employee told Orlander to contact the manufacturer directly and explained that the Protection Plan did not offer coverage until the manufacturer's warranty expired. Orlander brought a class action suit for breach of contract and violations of the consumer deception and false advertising provisions in New York's General Business Law ("NY GBL"), among other claims.

The United States District Court for the Southern District of New York granted Staples motion to dismiss the breach of contract and NY GBL claims, holding that the contract was unambiguous, that any breach of the contract by Staples was immaterial, and that Orlander failed to adequately allege damages or an actual injury under the NY GBL. The United States Court of Appeals for the Second Circuit vacated the judgment granting the motion to dismiss and remanded the case, holding that the contract was ambiguous as a matter of law, the materiality of any breach by Staples was not a basis on which to dismiss the contract claim, and that Orlander adequately alleged deceptive practices and false advertising claims and injury.

To read the full opinion, please visit: ">http://www.ca2.uscourt.../de.....4/3/hilite/


Extended Summary: Under New York law, a successful claim for breach of contract must include allegations that the parties formed a contract, the plaintiff performed his/her part of the contract, the defendant failed to perform, and the plaintiff suffered damages. If the court concludes an applicable contract term is ambiguous as applied to the allegations in a complaint, the court lacks a sufficient basis to dismiss the complaint for failure to state a claim.

It was undisputed that the parties formed a contract and that Orlander performed by purchasing the two-year "Carry-in" Protection Plan for $99.99. The second page of the Protection Plan Brochure provided to Orlander at the time of his purchase listed the terms of the plan contract. In small type after just one of the provisions, the contract stated, "Some restrictions apply. For complete details...see Terms and Conditions. The plan term is inclusive of manufacturer's warranty...and does not replace the manufacturer's warranty." The United States District Court for the Southern District of New York granted Staples motion to dismiss the breach of contract claim, holding that the contract was unambiguous in providing that the Staples Protection Plan did not offer services to a purchaser during the one-year manufacturer's warranty term, and that any breach of the contract by Staples was immaterial.

The Second Circuit disagreed, holding that Orlander's complaint adequately alleged a material breach by Staples that lead to injury and damages to Orlander. The court reasoned that the contract was ambiguous because only one provision of the contract included the note stating that restrictions applied, a reasonable person could conclude that the caveat only applied to one specific provision of the contract. The court stated further that language in the note, itself, was unclear, offering several potential interpretations, and "certainly [did] not communicate that Staples' plan gives no protection" during the warranty term. Noting that even the district court, in finding that Staples breached the contract by not referring Orlander to "the nearest service provider" for repair, interpreted the contract differently from Staples, it also went on to conclude that the district court's conclusion that any breach was immaterial should not be considered in the motion to dismiss for the failure to state a claim. Finally, on the contract claim, the Second Circuit concluded that because Orlander could potentially show Staples breached several provisions of the contract, he could be entitled to a variety of losses, in addition to his adequately plead "restitution" damages.

The Second Circuit also disagreed with the district court and held that Orlander adequately stated claims and injury under New York's General Business Law (NY GBL). NY GBL sections 349 and 350 prohibit deception of customers and false advertising by a business engaged in "trade, commerce or in furnishing any service" in New York State. A successful claim must allege that the defendant engaged in materially misleading consumer-oriented conduct and that the plaintiff suffered an injury as a result of that conduct. Finding it undisputed that Staples' sale of a Protection Plan was consumer-oriented conduct, the court held that Orlander also adequately alleged conduct that was materially misleading based upon his allegations that he was reasonably misled by the contract promise to refer purchasers to "the nearest authorized service center" and by Staples employees' representations that the contract provided complete coverage and he would never have to contact the manufacturer. The court reasoned that these representations, and the contract ambiguity as to whether coverage provided by the manufacturer's warranty might also be provided by Staples, could lead a reasonable customer to believe that Staples would provide more services, such as referral for free repair and replacement, that the company did not intend to provide.

Based upon its findings, the Second Circuit vacated the judgment by the District Court granting Staples' motion to dismiss and remanded.

To read the full opinion, please visit: ">http://www.ca2.uscourt.../de.....4/3/hilite/


Panel: Circuit Judges Leval and Pooler; District Judge Murtha, sitting by designation

Argument Date: 01/22/2015

Argument Location: New York, NY

Date of Issued Opinion: 09/16/2015

Docket Number: No. 14-2677-cv

Decided: Vacated and Remanded

Case Alert Author: Ryan Koleda

Counsel: Megan A. Farmer, Gardy & Notis, LLP, New York, N.Y., for Plaintiff-Appellant; Barry M. Kazan, Thompson Hine LLP, New York, N.Y., for Defendant-Appellee

Author of Opinion: Judge Leval

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

Edited: 09/17/2015 at 07:24 AM by Elyse Diamond

    Posted By: Elyse Diamond @ 09/16/2015 08:31 PM     2nd Circuit     Comments (0)  

September 10, 2015
  Berman v. Neo@Ogilvy LLC - Second Circuit
Headline: Creating Circuit Split, the Second Circuit Holds An Employee Fired After He Reported Securities Law Violations Internally to His Employer Can Seek Remedies Under the Dodd-Frank "Whistleblower" Retaliation Protection Provision.

Areas of Law: Securities Regulation; Labor and Employment

Issue(s) Presented: Whether an employee who suffers retaliation for reporting securities law violations internally can sue for the "whistleblower" retaliation remedies provided in Dodd-Frank.

Brief Summary: Daniel Berman worked as finance director at Neo@Oglivy, a media agency, where he reviewed the company's financial reporting and compliance and was responsible for internal accounting procedures affecting his employer and its parent company, WPP Group USA. During the course of his employment, Berman discovered practices that he alleged amounted to accounting fraud, and reported them internally. A senior officer at Neo@Oglivy allegedly became angry with Berman for this internal report, and Berman was terminated in April of 2013. In October of 2013, about six months after his termination, Berman reported the suspected fraudulent practices to the Securities and Exchange Commission ("SEC").

Berman sued his former employer alleging that he was fired in retaliation for reporting violations internally in violation of Section 21F, the "whistleblower" protection provision added to the Securities Exchange Act of 1934 ("Exchange Act"), by the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"). The United States District Court for the Southern District of New York granted summary judgment dismissing Berman's claims, holding that, in light of the "whistleblower" definition in that section, it provides protection only to those discharged from employment for reporting alleged violations to the SEC. In a split decision, the United States Court of Appeals for the Second Circuit majority reversed and remanded the case, holding that Berman may pursue retaliation remedies under Dodd Frank Section 21F, despite having reported the wrongdoing only internally, but not to the SEC, before his termination.

To read the full opinion, visit:
">http://www.ca2.uscourt.../de.....9/3/hilite/


Extended Summary: Section 21F, the "Securities Whistleblower Incentives and Protection" provision - added to the Exchange Act by the Dodd-Frank - defines a "whistleblower" as "any individual who provides . . . information relating to a violation of the securities laws to the [Securities Exchange] Commission." Subdivision 21F(h) of that provision, protects employees from retaliation by enjoining employers from firing, demoting, suspending, or otherwise harassing a "whistleblower" who provides information to the Commission under Section 21F, assists the Commission in judicial or other proceedings related to the information, or otherwise makes disclosures required or protected under the Exchange Act, the Sarbanes-Oxley Act of 2002, and other laws enforced by the SEC. The Sarbanes-Oxley Act of 2002 includes several provisions relating to internal disclosure of securities law violations or improper practices.

The United States District Court for the Southern District of New York granted summary judgment dismissing Berman's claims for retaliation remedies under Section 21F(h) based upon his firing following his internal reporting. Specifically, the district court held that, in light of the "whistleblower" definition in Section 21F, the subsection, 21F(h) retaliation protections apply only to those discharged from employment for reporting alleged violations to the SEC, and not to Berman, who was fired long before he reported any alleged wrongdoing to the SEC.

The Second Circuit majority disagreed, reversing the district court and remanding for further proceedings. Finding "arguable tension" between the express definition of a "whistleblower" in Section 21F - one who reports violations to the SEC - and the language in subsection 21F(h)(iii) - enjoining employers for retaliating against whistleblowers who make disclosures protected or mandated by the Sarbanes-Oxley Act - the majority deferred to the SEC's 2011 rule implementing section 21F to resolve the ambiguity. The SEC rule provides a broader "whistleblower" definition for purposes of the anti-retaliation protections afforded by Section 21F, that would include those making required and protected internal disclosures.

The Second Circuit majority also reasoned that, while select employees might report wrongdoing simultaneously to their employer and to the SEC, others who reported to their employer first hoping to correct the violation, and auditors and attorneys who might be required by law to report wrongdoing to their employer first, would not be protected from retaliation under a narrower reading of the statute. The majority further noted the SEC's extensive experience with whistleblowers, stating the SEC was "clearly the agency to resolve the ambiguity we face."

Finally, the majority opinion noted "the realities of the legislative process" at play in the last-minute drafting of the Dodd-Frank provision at issue. "When conferees are hastily trying to reconcile House and Senate bills, each of which number hundreds of pages, and someone succeeds in inserting a new provision . . . it is not at all surprising that no one noticed that the new subdivision and the definition of 'whistleblower' do not fit together neatly."

In his dissent, Judge Jacobs admonished his colleagues for effectively altering Dodd-Frank "by deleting three words ('to the Commission')" from the statute's "whistleblower" definition. He noted that this statutory change would create a split between the circuits in interpreting Dodd-Frank, with the Second Circuit "firmly on the wrong side of it." Judge Jacobs was wary to tread on Congress' intent, noting that it may well have had good reasons for writing the law as it did. In contrast to the majority, he argued the plain language of Dodd-Frank would be limited, but not wholly made moot, by adhering to the "plain language" definition set out in the statute.

To read the full opinion, visit: ">http://www.ca2.uscourt.../de.....9/3/hilite/


Panel: Circuit Judges Newman, Jacobs, and Calabresi

Argument Date: 6/17/2015

Argument Location: New York, NY

Date of Issued Opinion: 9/10/2015

Docket Number: 14-4626

Decided: Reversed and remanded.

Case Alert Author: Jake B. Sher

Counsel: Alissa Pyrich, Jardim, Meisner & Susser, P.C., Florham Park, NJ, for Appellant, Daniel Berman; Howard J. Rubin, Davis & Gilbert LLP, New York, NY, for Appellees, Neo@Oglivy LLC and WPP Group USA, Inc.; William K. Shirey, Asst. Gen. Counsel, Washington, D.C., for amicus curiae Securities and Exchange Commission, in support of Appellant; Kate Comerford Todd, U.S. Chamber Litigation Center, Inc., Washington, D.C., of Eugene Scalia, Gibson, Dunn & Crutcher LLP, Washington, D.C., for amicus curiae The Chamber of Commerce of the United States of America, in support of the Appellees.

Author of Opinion: Judge Newman (majority); Judge Jacobs (dissent)

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

Edited: 09/10/2015 at 09:12 PM by Elyse Diamond

    Posted By: Elyse Diamond @ 09/10/2015 09:02 PM     2nd Circuit     Comments (0)  

September 8, 2015
  United States v. Diaz
Headline: Second Circuit Holds That Brief Lane Deviations - Including a Large Truck's Touching the Solid Line Separating the Highway Lane from the Shoulder - Can Create Reasonable Suspicion for Fourth Amendment Purposes

Area of Law: Criminal Procedure

Issue(s) Presented: Whether a vehicle's wheels touching or crossing the solid painted lines of a highway gives rise to reasonable suspicion of a traffic violation, such that a resulting traffic stop is constitutional under the Fourth Amendment.

Brief Summary: Felipe and Wellington Diaz were driving an 18-wheeler tractor-trailer through Meridian, Mississippi when Senior Police Office Gordon Christopher Read received a tip from the United States Department of Homeland Security ("DHS") that a red or white tractor-trailer suspected of trafficking narcotics was an hour-and-half from his current location. Approximately two hours later, Read began driving on a local four-lane highway to resume his ordinary duties. As he drove, he noticed a black tractor-trailer also on the highway, and saw that on two occasions, the tractor-trailer's right rear wheels crossed the white line separating the right lane of traffic from the right shoulder of the road. Believing that this constituted careless driving in violation of Mississippi law, Officer Read stopped the tractor-trailer, which was subsequently searched by other Meridian Police Department officers. The search yielded approximately five kilograms of heroin and four kilograms of cocaine. A federal grand jury in the Southern District of New York returned an indictment against both Felipe and Wellington for conspiracy to possess with intent to distribute. During district court proceedings, Wellington moved to suppress the drugs recovered from the tractor-trailer as evidence. The district court granted the motion, noting that the tractor-trailer was virtually as wide as the highway lane, and the testimony about "two momentary touches of the highway divider" was insufficient to create reasonable suspicion, rendering the search unconstitutional. The U.S. Court of Appeals for the Second Circuit reversed, holding that under the totality of the circumstances, there was reasonable suspicion here, such that the search did not violate the Fourth Amendment. To read the full opinion, please visit http://www.ca2.uscourts.gov/de...3c40f631948/1/hilite/

Extended Summary: The Fourth Amendment permits brief investigative stops, such as a traffic stop, when a law enforcement officer has a particularized and objective basis for suspecting the particular person stopped of criminal activity, or traffic violation. A reasonable suspicion of a traffic violation provides a sufficient basis under the Fourth Amendment for law enforcement officers to make a traffic stop. The reasonable suspicion standard requires less proof of wrongdoing than is necessary for probable cause, but does require some minimal level of objective justification. This is an objective injury that disregards the officer's subjective motivation and asks whether a reasonable officer would suspect unlawful activity under the totality of the circumstances.

Here, in examining the constitutionality of this search, the district court noted that the tractor-trailer was virtually as wide as the entire lane and that "normal driving and atmospheric conditions often cause a slight drift of the rear of the rig." The court concluded that "momentary touching by the back four wheels of a 53 foot truck along the [divider line]" did not amount to careless or impudent driving, and that the officer had lacked reasonable suspicion to stop the vehicle.

On appeal, the government argued that in the absence of adverse conditions, crossing the white line twice established an objectively reasonable suspicion to believe that a traffic violation had occurred. The Second Circuit agreed. Explaining that there is no bright-line rule here, the court examined the totality of the circumstances leading to Officer Read's stop of the Diaz tractor-trailer. It concluded that the observation of the tractor-trailer twice deviating from its lane would warrant a person of reasonable caution that the driver that been driving in a careless or imprudent manner, without due regard for the width, grade, curves, corners traffic and use of the streets and highways and all other attendant circumstances. The court further noted that Mississippi state law, while not binding, supported the contention that an officer's observation of one or more lane-line incursions justified a traffic stop pursuant to the state's careless driving statute.

The Court thus reversed and remanded the case to the district court for further proceedings, explaining that on remand, the district court should consider the parties' remaining arguments as to the constitutional of the stop and ensuing search.

Panel: Circuit Judges Sack, Wesley, and Hall

Argument Date: June 3, 2015

Argument Location:
New York

Date of Issued Opinion: September 8, 2015

Docket Number: Nos. 14-2505, 14-2689

Decided: Reversed and Remanded

Case Alert Author: Elizabeth Perreca

Counsel: Joshua A. Naftalis, for Preet Bharara, United States Attorney for the Southern District of New York, for Appellant, Susan Jewell Walsh, Vladeck, Waldman, Elias & Engelhard, P.C., for Defendant-Appellee and Jesse M. Siegel, for Defendant-Appellee. Terry Neill Grimes, Grimes & Williams, P.C., for Plaintiff-Appellant Clinton Stephen Morse and Joseph M. Rainsbury, LeClairRyan, for Defendant-Appellee

Author of Opinion: Judge Sack

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/08/2015 09:40 PM     2nd Circuit     Comments (0)  

April 13, 2015
  European Community v. RJR Nabisco Inc. - Second Circuit
Headline: Second Circuit Denies Petition to Rehear Case in Which Panel Held that the Racketeer Influenced Corrupt Organizations Act (RICO) Applies to Extraterritorial Conduct

Area of Law: Racketeer Influenced Corrupt Organizations Act (RICO)

Issue Presented: Whether the Second Circuit should rehear a case addressing whether the Racketeer Influenced Corrupt Organizations Act (RICO) applies to extraterritorial conduct in civil actions in which RICO liability is based upon predicate racketeering acts that expressly apply to foreign conduct.

Brief Summary: The Second Circuit issued an order denying a rehearing en banc. The petition for rehearing challenged the ruling by a panel consisting of Circuit Judge Hall and Senior Judges Leval and Sack, that the Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 et seq., applies extraterritorially when liability is based on "racketeering acts" consisting of violations of predicate statutes which Congress expressly made applicable to foreign conduct. In considering the petition for panel rehearing, the court reexamined the panel decision and its compatibility with the Supreme Court's decision in Morrison v. Nat'l Australia Bank, Ltd., 561 U.S. 247 (2010), and the Second Circuit decision in Norex Petroleum Ltd. v. Access Industries, Inc., 631 F.3d 29 (2d Cir.12 2010).

Judge Hall wrote a concurring opinion, in which he supports the original panel ruling and the denial for rehearing. Judges Jacobs, Cabranes, Raggi, and Lynch each authored a dissenting opinion opposing the denial of the petition for rehearing.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...f6fb19e800f/1/hilite/

Extended Summary: By its petition for rehearing en banc, RJR Nabisco Inc. sought review of a panel decision, issued by Circuit Judge Hall and Senior Judges Leval and Sack, that the Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 et seq., applies extraterritorially when liability is based on "racketeering acts" consisting of violations of predicate statutes which Congress expressly made applicable to foreign conduct. Specifically, the underlying civil action alleged that RJR Nabisco was engaged in a complex multi-step racketeering scheme involving the extraterritorial sale of RJR Nabisco cigarettes. The complaint charges RJR Nabisco with the predicate acts of extraterritorial proscribed money laundering and the extraterritorial crime of providing material support for terrorism. The panel concluded that "by incorporating these statutes into RICO's predicate racketeering acts, Congress clearly communicated its intention that RICO apply to extraterritorial conduct to the extent that extraterritorial violations of those statutes serve as the basis for RICO liability." The majority did not vote in favor of en banc review, and the petition for rehearing en banc was denied, but four judges wrote individual dissenting opinions in favor of rehearing.

In his concurrence supporting the denial of the rehearing, Judge Hall reaffirmed the panel's decision as "sound," supported by Congressional intent, and consistent with the Supreme Court's decision in Morrison v. Nat'l Australia Bank, Ltd., 561 U.S. 247 (2010), and the Second Circuit's decision in Norex Petroleum Ltd. v. Access Industries, Inc., 631 F.3d 29 (2d Cir.12 2010).

In his dissent, joined by Judges Cabranes, Raggi, Livingston and Lynch, Chief Judge Jacobs, argues that the panel opinion "is in taut tension" with Norex Petroleum and will lead to "vexing questions" absent review reconciling the precedents. In a separate dissenting opinion, Circuit Judge Cabranes, joined by Judges Jacobs, Raggi and Livingston, argues strongly that the panel's holding that "RICO itself has extraterritorial reach if and when one of RICO's predicate statutes has extraterritorial reach" is "flatly inconsistent" with existing precedent. Judge Cabranes calls the panel ruling "a new and potentially far-reaching, judicial interpretation" of RICO that portends "a significant and long-term adverse impact on activities abroad" by "exposing business activities to civil claims of 'racketeering' grounded on extraterritorial activities anywhere in the world."

Judge Raggi, joined by Judges Jacobs, Cabranes, and Livingston, similarly contends that the panel's ruling on RICO's extraterritorial application conflicts with the Supreme Court's holding in Morrison, mandating a presumption against the extraterritorial application of United States statutes barring clear affirmative legislative intent, and Norex Petroleum, which she contends held RICO does not apply extraterritorially even if some predicate acts may be prosecuted extraterritorially. She argues that clarification is needed both on RICO's extraterritorial application and, additionally, to establish criteria for determining whether a RICO claim is domestic or extraterritorial. Finally, Judge Lynch joins in dissent over the denial of the rehearing en banc, arguing that the tension between the panel's holding in this case and Norex Petroleum should be resolved, but does not join the other dissenters in criticizing the panel's ultimate ruling as unsupported.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...f6fb19e800f/1/hilite/

Panel: En Banc

Panel Decision: European Cmty. v. RJR Nabisco, Inc., 764 F.3d 129 (2d Cir. 2014).

Date of Issued Opinion: 4/13/2015

Docket Number: 11-2475

Decided: Petition for rehearing en banc denied.

Case Alert Author: Marley Strauss

Counsel: For Plaintiffs-Appellants: John J. Halloran, Jr., John J. Halloran, Jr., P.C., White Plains, NY, Kevin A. Malone, Carlos A. Acevedo, Krupnick, Campbell, Malone, Buser Slama, Hancock, Liberman P.A., Fort Lauderdale, FL. For Defendants-Appellees: Gregory G. Katsas, John M. Gore, Jones Day, Washington, D.C., Mark R. Seiden, Jones Day, New York, NY.

Author of Opinion: Judge Hall concurs; Chief Judge Jacobs dissents, joined by Circuit Judge Cabranes, Circuit Judge Raggi, Circuit Judge Livingston and Circuit Lynch; Judge Cabranes dissents, joined by Judge Jacobs, Judge Raggi and Judge Livingston; Judge Raggi dissents, joined by Judge Jacobs, Judge Cabranes and Judge Livingston; and Judge Lynch dissents.

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 04/13/2015 08:42 PM     2nd Circuit     Comments (0)  

April 2, 2015
  Central Hudson Gas & Electric Corp. v. FERC
Headline: Second Circuit Allows New Electrical Capacity Zone in the Lower Hudson Valley To Go Forward

Area of Law: Administrative Law

Issue(s) Presented: Whether the Federal Energy Regulatory Commission (FERC)'s orders approving a new electric power "capacity zone" in the Lower Hudson Valley, along with a new "demand curve" to set capacity prices, were arbitrary and capricious, unsupported by substantial evidence, or would result in unreasonable rates for electricity.

Brief Summary: Two groups of petitioners challenged four orders of the Federal Energy Regulatory Commission (FERC) approving the New York Independent System Operator's (NYISO) creation of a new capacity zone comprising certain areas of Southeastern New York (including the Lower Hudson Valley) and ordering the implementation of a demand curve for that capacity zone. Petitioners argued that the orders were arbitrary and capricious, unsupported by substantial evidence, and would result in unreasonable rates. The Second Circuit disagreed with petitioners on all grounds and denied the petitions for review. The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de.../1/doc/14-1786_opn.pdf - xml=http://www.ca2.uscourts.gov/decisions/isysquery/c052b24f-5e53-42d2-adb5-1042655e3142/1/hilite/

Extended Summary: The orders challenged by petitioners approved a proposal by the NYISO to create a new wholesale electric power capacity zone. The orders represented the culmination of a multi-year process, and served to provide more accurate price signals in the electrical grids of the Hudson Valley. Petitioners claimed the FERC failed adequately to justify the higher prices expected to result from the creation of the new zone, particularly without a "phase-in" of the new zone and its demand curve to soften the impact. Accordingly, petitioners claimed the challenged orders are arbitrary and capricious, unsupported by substantial evidence, and disregard FERC's statutory mandate to ensure that rates are "just and reasonable."

Petitioners made five principal arguments against FERC's orders, each of which were rejected by the court: (1) FERC did not adequately justify its conclusion that consumers would benefit from the creation of the new Lower Hudson Valley Zone and the implementation of its associated demand curve; (2) FERC failed to adequately support its conclusion that implementing the new zone without a phase-in of its demand curve would result in just and reasonable rates; (3) in creating the new zone, FERC improperly ignored evidence regarding New York's transmission upgrade initiatives; (4) FERC improperly failed to set forth criteria for the potential elimination of the Lower Hudson Valley Zone after the transmission constraint no longer exists; and (5) FERC did not demonstrate that the increases in rates arising from the new zone would reflect to some degree the costs actually caused by the customer who must pay them.

The court reviewed the final FERC orders with great deference under the Administrative Procedure Act's arbitrary and capricious standard. The court found FERC adequately supported its decision to approve the creation of the Lower Hudson Valley Zone by relying on economic theory, which is a permissible basis to support conclusions so long as the theoretic principles are applied in a reasonable manner and are adequately explained. The court concluded the FERC articulated sound economic principles to support the zone creation and satisfactorily explained how those principles justified its conclusion. Accordingly, FERC's determinations were not arbitrary and capricious.

Petitioners also objected to FERC's decision to reject a phase-in of the rate increases, but the court found FERC had sufficient evidence to reject the phase-in and that FERC's reliance on reliability concerns was wholly appropriate. Given the deference that FERC is owed in such a highly technical area, the court concluded that its economic predictions about the effects of immediately implementing the Lower Hudson Valley Zone and its demand curve, combined with the evidence presented, were sufficient to support FERC's decision to reject the phase-in.
The court also rejected the argument that it was arbitrary and capricious for FERC to decide to proceed despite claims that New York's planned transmission upgrades would eliminate the transmission constraint on which the new zone was premised. Finally, the court rejected petitioners' argument that the Zone unfairly apportions charges arising from the transmission constraint because it was outside the scope of the Zone Proceeding.

The Second Circuit ultimately denied the petitions for review, ruling the FERC adequately justified its decision to authorize NYISO to create the Lower Hudson Valley Electrical Zone as well as its decision not phase in the new zone and its demand curve, notwithstanding New York's transmission upgrade initiatives.
The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de.../1/doc/14-1786_opn.pdf - xml=http://www.ca2.uscourts.gov/decisions/isysquery/c052b24f-5e53-42d2-adb5-1042655e3142/1/hilite/

Panel:
Circuit Judges Livingston and Droney; District Judge Nathan

Argument Date: September 12, 2014

Date of Issued Opinion: April 2, 2015

Docket Number: No. 14-1786 (L)

Decided:
Petitions Denied

Case Alert Author: Jesse M. Kantor

Counsel: Raymond B. Wuslich, Winston & Strawn LLP, Washington, DC, for Petitioners Central Hudson Gas & Electric Corp., New York Power Authority, New York State Electric and Gas Corporation, and Rochester Gas and Electric Corporation.
Paul Colbert, Associate General Counsel‐ Regulatory Affairs, Central Hudson Gas & Electric Corp., Poughkeepsie, NY, for Petitioner Central Hudson Gas & Electric Corp.
Glenn D. Haake, Principal Attorney, New York Power Authority, Albany, NY, for Petitioner New York Power Authority.
R. Scott Mahoney, General Counsel, Iberdrola USA, Inc., Binghamton, NY, for Petitioners New York State Electric and Gas Corporation, and Rochester Gas and Electric Corporation.
Jonathan D. Feinberg, Solicitor, Public Service Commission of the State of New York (Kimberly A. Harriman, General Counsel, John C. Graham, Assistant Counsel, and Nelli Doroshkin, Assistant Counsel, on the brief), for Petitioners Public Service Commission of the State of New York and People of the State of New York.
Robert H. Solomon, Solicitor, Federal Energy Regulatory Commission, Washington DC (David L. Morenoff, Acting General Counsel, Lisa B. Luftig and Karin L. Larson, Attorneys, on the brief), for Respondent Federal Energy Regulatory Commission.
John S. Moot, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, DC (Karis Anne Gong, on the brief), for Intervenor Entergy Nuclear Power Marketing, LLC.
David B. Johnson, Read and Laniado, LLP, Albany, NY, for Intervenor Independent Power Producers of New York, Inc.
Victoria L. Smith, Stinson Leonard Street LLP, Kansas City, MO (Abraham Silverman and Cortney Madea, NRG Energy, Inc., Princeton, NJ, on the brief), for Intervenors NRG Power Marketing LLC, GenOn Energy Management, LLC, Arthur Kill Power LLC, Astoria Gas Turbine Power LLC, Dunkirk Power LLC, NRG Bowline LLC, Huntley Power LLC, and Oswego Harbor Power LLC.

Author of Opinion: Judge Livingston

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 04/02/2015 04:25 PM     2nd Circuit     Comments (0)  

  Ortiz-Franco v. Holder
Headline: Second Circuit Announces that Jurisdictional Limitations Apply When a Removable Alien Is Denied Deferral of Removal Under the CAT

Area of Law: Immigration Law

Issue(s) Presented: Whether federal circuit courts have jurisdiction to consider the Board of Immigration Appeals' denial of an alien's petition under the Convention Against Torture, when the alien raises no constitutional claims or questions of law.

Brief Summary: Enelison Ortiz-Franco, currently residing in the United States, a native and citizen of El Salvador. He is removable as an alien present in the United States without being admitted or paroled, and also as an alien convicted of a controlled substance violation and a crime of moral turpitude. He applied for asylum, withholding of removal, and deferral of removal under the Convention Against Torture (CAT), contending that if he were removed to El Salvador, he would be tortured and killed by a street gang. The Immigration Judge ruled that his previous convictions rendered him ineligible for asylum and withholding of removal, and that he was not entitled to relief under the CAT. The Board of Immigration Appeals affirmed, and he sought the Second Circuit's review of the CAT denial. The Second Circuit held, however, that it lacked jurisdiction to hear his CAT claim, explaining that when an otherwise removable alien seeks review of his CAT claim, the court's review is limited to questions of law and constitutional claims. The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...84ff9c21c5e/2/hilite/.

Extended Summary:

Ortiz-Franco entered the United States illegally in 1987. He was subsequently convicted of criminal possession of a weapon in the third degree, attempted petit larceny, and possession of a controlled substance. In front of the Department of Homeland Security, Ortiz-Franco conceded that he was removable as an alien present in the United States illegally and that, in addition, he was subject to removal as an alien convicted of violating a law related to a federally controlled substance and convicted of a crime involving moral turpitude.

Years later, after joining a MS-13 (a gang) and being indicted on federal charges in connection with a fight with a rival gang, in an unsuccessful effort to enter into a cooperation agreement, Ortiz-Franco made incriminating statements about his co-conspirators. The government gave copies of Ortiz-Franco's statements to his co-defendants. Afterwards, Ortiz-Franco contended that he had concerns about being deported to his native country because of MS-13's perception that he had cooperated with the government.

In his removal hearing, Ortiz-Franco applied for deferral of removal under CAT. The Immigration Judge denied the application, which permitted Ortiz-Franco to be removed, and the Bureau of Immigration Appeals ("BIA") affirmed. In his petition for review to the Second Circuit, Ortiz-Franco argued that the BIA erred in concluding that he did not show the requisite likelihood of torture or that any torture by gang members would occur with the acquiescence of El Salvador.

In analyzing Ortiz-Franco's petition, the Second Circuit noted that, in similar situations, it has assumed that its review is limited to questions of law and constitutional claims and, in the narrowest of circumstances, has relied on "hypothetical" jurisdiction. In this case, for the first time, the Second Circuit considered the issue and, joining the Fifth, Third, Eighth, Fourth, Eleventh, and Sixth Circuits, held that when an alien who is otherwise removable due to the commission of a covered criminal offense seeks deferral of removal under the CAT, appellate jurisdiction is limited to review of constitutional claims and questions of law. The court recognized that, in the exact situation, the Seventh and Ninth Circuits would find jurisdiction.

The court rooted its analysis in a statutory discussion. Beginning with the CAT itself, the court noted that, because the CAT is not self-executing, it confers no judicially enforceable right on individuals. Instead, Congress implemented the CAT by passing the Foreign Affairs Reform and Restructuring Act of 1998 ("FARRA") and directing the executive to promulgate regulations. In addition, CAT has nothing to say about the scope of judicial review of a right defined by statute or the implementing regulations. Instead, Congress has said courts may consider or review claims under the CAT only when they are part of the review of a final order of removal.

As a further limitation, when the petitioner is removable by reason of having committed a covered criminal offense, courts may only review constitutional claims or questions of law. Because review of deferral claims is part of the review of a final order of removal, the scope of deferral review is limited as well. Acknowledging Ortiz-Franco's arguments, and the Fifth and Seventh Circuits position regarding the finality of deferral decisions, the Second Circuit remained unpersuaded. According to its analysis, the court does not have unlimited jurisdiction over CAT claims and Congress intended to limit the courts' ability to review CAT decision. Agreeing with the majority of circuit courts that have considered the issue, the Second Circuit concluded that the denial of deferral should be treated as final and reviewable. Denial of deferral means that a removal order may be immediately carried out and this conclusion accords with the presumption of judicial review of administrative action.

In conclusion, "once [the court is] satisfied that a given alien has been found 'removable by reason of' conviction of a crime covered [by the CAT]..., [it] lack jurisdiction to conduct further review of the 'final order of removal,' whether relating to asylum, withholding of removal, or CAT relief," except to the extent the alien raises constitutional claims or questions of law. [Citations omitted]. Here, because Ortiz-Franco did not raise any constitutional claims or questions of law, and instead disputed the correctness of the IJ's fact-finding, the court dismissed the petition for review for lack of jurisdiction. Concurring, in the interests of uniformity, Judge Lohier prompted Congress or the Supreme Court to decide the circuit split.

Panel (if known): Judges Jacobs, Lohier, and Droney

Argument Date: 10/09/2014

Date of Issued Opinion: 04/01/2015

Docket Number: 13-3610

Decided: Petition Denied.

Case Alert Author: Samantha Kopf

Counsel: Lee P. Gelernt, American Civil Liberties Foundation, Immigrants' Rights Project (with Dror Ladin, American Civil Liberties Foundation, Immigrants' Rights Project and Genet Getachew, Law Office of Genet Getachew), New York, N.Y., for Petitioner; Jesse M. Bless, Trial Attorney, United States Department of Justice, Civil Division, Office of Immigration Litigation (with David B. Bernal, Director, Stuart F. Delery, Acting Associate Attorney General and Anthony C. Payne, Senior Litigation Counsel), Washington, D.C., for Respondent.

Author of Opinion: Judge Jacobs

Circuit:
2nd Circuit

Case Alert Circuit Supervisor:
Emily Waldman

    Posted By: Emily Waldman @ 04/02/2015 04:12 PM     2nd Circuit     Comments (0)  

March 11, 2015
  Rivas v. Fischer - Second Circuit
Headline: After Serving 22 Years in Prison, Defendant Convicted of 1987 Murder Granted Writ of Habeas Corpus, citing Ineffective Counsel

Area of Law: Criminal Procedure; Habeas Corpus; Constitutional Law

Issue(s) Presented: Whether a writ of habeas corpus should be granted following the state court's denial of defendant's ineffective-assistance claim when the defense presented unchallenged expert testimony persuasively demonstrating that the victim could not have died on the day relied on by the prosecution.

Brief Summary: Petitioner Hector Rivas was convicted in 1993 of second degree murder for the 1987 killing of his ex-girlfriend Valerie Hill. The prosecution's case relied primarily on tying the murder to Rivas in a three-hour window on Friday, March 27, 1987 during which Rivas had no corroborated alibi. In 1999, Rivas petitioned for NYCPL § 440.10 relief, raising a claim of ineffective assistance and presenting unchallenged expert testimony persuasively demonstrating that Hill could not have died on March 27. The state court denied the claim.

In 2002, Rivas filed an amended petition for a writ of habeas corpus in the United States District Court for the Northern District of New York. After a lengthy battle, the petition was found by the Second Circuit not to be time-barred and was remanded to the District Court for Review. On review on the merits, the district court denied the petition in its entirety. The Second Circuit reversed and remanded, directing the district court to issue the writ. It concluded that the state court denial of Rivas's ineffective counsel claim was a rare "unreasonable application" of the United States Supreme Court's 1984 decision, Strickland v. Washington, because the defense demonstrated that Rivas's original defense counsel failed to satisfy his obligation to make reasonable investigations and that failure prejudiced Rivas's defense.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...4b8a68d87ff/3/hilite/

Extended Summary: Rivas was convicted in Onondaga County of second-degree murder for the killing of his ex-girlfriend Valerie Hill. At trial, the prosecution argued that Rivas killed Hill on the night of March 27, 1987. Rivas's counsel primarily relied on an alibi strategy, though there was a three-and-a-half hour window on that night during which Rivas had no corroborated alibi. The prosecution argued that Rivas killed hill during that time frame.

The prosecution's case primarily relied on the testimony of medical examiner Dr. Erik Mitchell, who at the time of the murder had estimated that Hill's death occurred sometime between Saturday, March 28 and Sunday, March 29, and that death on Friday was highly unlikely. However, at trial six years later, Dr. Mitchell testified that Hill likely died on Friday evening, during Rivas's alibi-less window. Dr. Mitchell claimed that this new finding came after reviewing his notes and brain slides. Despite its critical importance to the defense, Rivas's counsel failed to investigate the basis for Dr. Mitchell's revised findings regarding time of death.

In 1999, with new counsel, Rivas filed a motion to vacate the judgment of conviction pursuant to NYCPL § 440.10. The defense suggested that Dr. Mitchell had been under investigation by the District Attorney's office at the time, and had altered his original estimate to satisfy the District Attorney in hopes of avoiding criminal prosecution. Rivas also claimed that the autopsy slides on which Dr. Mitchell purportedly relied did not actually exist in the medical examiner's file. He also produced an uncontested affidavit of an independent expert in forensic pathology attesting that Hill most likely died between 3:30 p.m. on Saturday and 3:30 a.m. on Sunday. The state court denied the motion.

On June 19, 2002, Rivas filed an amended petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254 in the United States District Court for the Northern of New York raising substantially the same claims. After several rulings and remands on timeliness, the Second Circuit held that a credible and compelling showing of actual innocence warrants an equitable exception to the limitations period under the Antiterrorism and Effective Death Penalty Act (AEDPA) and, therefore, remanded to the District Court to hear Rivas' petition. After hearing oral argument on the merits of the petition, the District Court denied the petition. It held that the state court's determination was a reasonable application of the United States Supreme Court's holding in Washington v. Strickland that a defendant must show both that a counsel's performance was so deficient as not to constitute counsel guaranteed by the Sixth Amendment, and that the deficient performance prejudiced the defense.

In its de novo review, the Second Circuit found that the state court had unreasonably applied "Federal law, as determined by the Supreme Court of the United States," and that a writ of habeas corpus should be granted pursuant to 28 U.S.C. § 2254(d)(1). Given the importance of time of death to Rivas's alibi defense, Dr. Mitchell's revised findings placing the murder during the gap in Revis's alibi would have driven any reasonable attorney to further investigate those findings. According to the Second Circuit, Rivas's counsel "relied on an alibi defense when, in fact, Rivas did not have an alibi for the precise time that the prosecution claimed Rivas had murdered Hill. In effect, [counsel]'s alibi defense amounted to no defense at all." The state court's conclusion to the contrary was thus objectively unreasonable.

Further, in earlier finding that Rivas had presented a credible and compelling claim of actual innocence entitling him to an equitable exception to the AEDPA's limitation period, the Second Circuit determined that "a reasonable juror, apprised of all the evidence in the record, would more likely than not vote to acquit." For those same reasons, counsel's failure prejudiced the defense.

The Second Circuit remanded to the District Court and directed it to issue the writ of habeas corpus some twenty-two years after Rivas's conviction, unless the state has taken substantial and concrete steps within sixty days to retry him.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...4b8a68d87ff/3/hilite/

Panel: Circuit Judges Cabranes, Pooler, and Sack.

Argument Date: 12/09/2014

Date of Issued Opinion: 03/11/2015

Docket Number: No. 13-2974-pr

Decided: Reversed and Remanded, with direction to issue Writ of Habeas Corpus

Case Alert Author: Justin J. Fung

Counsel: Richard M. Langone, Langone & Associates , PLLC, Levittown, NY, for Petitioner-appellant. Priscilla Stewart, Assistant Attorney General (Barbara D. Underwood, Solicitor General, Nikki Kowalski, Deputy Solicitor General, on the brief) for Eric T. Schneiderman, Attorney General for the State of New York, for Respondent-appellee.

Author of Opinion: Judge Cabranes

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 03/11/2015 06:49 PM     2nd Circuit     Comments (0)  

February 27, 2015
  Marcel Fashions Group, Inc. v. Lucky Brand Dungarees, Inc., et. al.--Second Circuit
Headline: Second Circuit Lets Trademark Claim Against Lucky Brands Go Forward

Area of Law:
Trademark Infringement

Issue Presented: Whether the plaintiff's trademark infringement claim was barred by the doctrine of res judicata.

Brief Summary: Plaintiff-Appellant Marcel Fashions, owner of the trademark "Get Lucky," has been selling jeans under that mark since 1986. In 1990, defendant-appellee Lucky Brand Dungarees began selling jeans under the mark "Lucky Brand" as well as other marks with the word "Lucky." Marcel Fashions has brought two previous actions against Defendants, each time asserting trademark infringement. In the first action, a settlement was reached where Lucky Brand would stop using "Get Lucky." In the second action, the Final Order and Judgment stated that Lucky Brand and affiliated parties (the "Defendants") had committed trademark infringement by using the "Get Lucky" and "Lucky Brand" trademarks; it further enjoined Lucky from using the "Get Lucky" mark. In the instant action, Marcel asserts that Defendants infringed on Marcel's "Get Lucky" trademark by using the mark in an identical manner for which the Defendants were found liable in a previous action. The District Court granted summary judgment for Defendants, holding that Marcel's claims were precluded by res judicata because the claims were similar to a previous action. The Second Circuit reversed, stating that "winning a judgment based on the defendant's violation of the plaintiff's rights does not deprive the plaintiff of the right to sue the same defendant against for the defendant's further subsequent similar violations." The court added, however, that the injunction from the earlier lawsuit had not clearly prohibited Lucky from using the "Lucky Brand" mark - it had only explicitly forbade use of the "Get Lucky" mark. It therefore affirmed the district court's refusal to hold Defendants in contempt, and remanded the case to go forward. The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...12c33/2/hilite/


Extended Summary: Plaintiff-Appellant Marcel Fashions holds a federal trademark for "Get Lucky" and has sold jeans under that mark. Defendants-Appellees own its own trademarks including "Lucky Brand" and "Lucky Brand Dungarees." Plaintiff has previously brought suit against Defendants alleging unfair competition and trademark infringement. The parties settled in the first action. The settlement provided that Lucky Brand "shall desist henceforth from use of 'Get Lucky' as a trademark," while acknowledging the Defendant's right "to use, license and/or register the trademark LUCKY BRAND and/or any other trademarks...." In the second action, Plaintiff alleged inter alia, that Defendants breached their previous settlement agreement. At the conclusion of the second action, the jury found that Defendants did indeed infringe upon Plaintiff's "Get Lucky" mark after the date of their first settlement and thus awarded Plaintiff compensatory and punitive damages. The lower court's Final Order and Judgment in the second action enjoined Defendants from using the "Get Lucky" mark and also found that Defendant had infringed Marcel Fashion's "Get Lucky" trademark by using "Get Lucky, "Lucky Brand" and other marks with the word "Lucky."

In the instant action, Plaintiff asserts that that Defendants infringed Plaintiff's "Get Lucky" trademarks in the "identical manner and form and on the same goods for which they were found liable for infringement" in the second action. The lower court granted Defendant's motion for summary judgment under the doctrine of res judicata and further denied Plaintiff's motion for leave to file an amended complaint based on claim preclusion. Lastly, the district court also denied plaintiff's motion to hold Defendants in contempt for violating the terms of the second action.
The Second Circuit determined that Plaintiff's complaint and leave to file an amended complaint was not barred by the doctrine of res judicata and therefore vacated the lower court's ruling. The court explained that "[w]inning a judgment based on the defendant's violation of the plaintiff's rights does not deprive the plaintiff the right to sue the same defendant again for the defendant's further subsequent similar violations." The Second Circuit further noted that claim preclusion does not bar a claim arising out a "continuance of the same course of conduct." If this were the case, the court reasoned, Lucky Brand would be free to infringe on Marcel's trademark in perpetuity.

The Second Circuit did, however, affirm the lower court's denial of Marcel's motion to hold Lucky Brand in contempt for violating the injunction issued in the second action by its subsequent use of the "Lucky Brand" marks. The Court found that the order in question was unclear, as it did not clearly forbid Lucky Brand from using the "Lucky Brand" marks. Therefore, the Second Circuit found no error in the lower court's denial of the contempt motion.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...12c33/2/hilite/


Panel: Circuit Judges Leval, Calabresi, and Lynch

Argument Date:
February 5, 2014

Date of Issued Opinion: February 25, 2015

Docket Number: 12-4341-cv

Decided: Affirmed in Part and Vacated in Part

Case Alert Author: Eddie Chang

Counsel: Matthew A. Pek, Law Offices of Matthew A. Pek, Esq., for Plaintiff-Appellant; Leslie Gordon Fagen, Paul, Weiss, Rifkind, Wharton & Garrison LLP (Darren W. Johnson, on the brief), for Defendant-Appellees

Author of Opinion:
Judge Leval

Circuit: 2nd Circuit

Case Alert Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 02/27/2015 12:52 PM     2nd Circuit     Comments (0)  

February 26, 2015
  Matthews v. City of New York - Second Circuit
Headline: Second Circuit Reinstates NYPD Officer's Suit Against New York City Alleging Retaliation for Complaints He Made About Precinct Arrest Quotas

Area of Law: First Amendment

Issue(s) Presented: Whether a New York City police officer's complaints about arrest quota policies within his precinct were made within his official capacity as a public employee and, therefore, were not protected speech under the First Amendment.

Brief Summary: Plaintiff-appellant, Craig Matthews, a New York Police Department officer, sued various New York City police department officials (the NYPD) alleging he faced retaliation in violation of the First Amendment for comments he made to his commanding officers about an arrest quota policy at his precinct. The United States District Court for the Southern District of New York granted the NYPD's motion for summary judgment, holding that Matthews' complaints were made as a public employee, not as a private citizen and, therefore, his speech was not protected by the First Amendment. The Second Circuit disagreed, holding that Matthew's comments were not made as part of his official duties but, instead, as a private citizen. Accordingly, the Second Circuit vacated the district court's grant of New York City's motion for summary judgment and remanded for further proceedings.

The full text of the opinion can be found at: http://www.ca2.uscourts.gov/de...05800/1/hilite/


Extended Summary (if applicable): Plaintiff-appellant Craig Matthews, an officer in the of the New York Police Department's (NYPD) 42nd Precinct, was unhappy about a precinct quota system, mandating arrests and stop-and-frisks and, in 2009, reported his concerns to his then-Captain. Thereafter, in 2011, Matthews met with his commanding officers to voice his concerns with the quota system.

In 2012, Matthews sued under 42 U.S.C. §1983, alleging that the NYPD violated his First Amendment rights by retaliating against him for his outspoken opinions in the form of punitive assignments, denial of overtime and leave, separation from his career-long partner, humiliating treatment by supervisors, and negative performance reviews. The NYPD moved to dismiss, arguing that Matthews' speech was made pursuant to his official employment duties and therefore was not protected speech under the First Amendment. The district court, addressing just this narrow issue, granted the NYPD's motion to dismiss, agreeing that Matthews' speech was made as an employee of the NYPD, not as a private citizen.

The Second Circuit disagreed with the district court, concluding instead that Matthews' was speaking as a private citizen, vacated the district court's grant of summary judgment and remanded the case for further proceedings. The court reasoned that Matthews' opinions about the quota policy were concerns about broad policy issues not related to his actual or functional job responsibilities. Additionally, the court noted that NYPD commanding officers are required to hold community council meetings at which the public is invited to raise concerns about policing practices. Accordingly, the court held that when a public employee, whose duties do not involve formulating, implementing, or providing feedback on a policy that implicates a matter of public concern, engages in speech concerning that policy, and does so in a manner in which ordinary citizens would be expected to engage, he or she speaks as a citizen, not as a public employee.

The full text of the opinion can be found at: http://www.ca2.uscourts.gov/de...05800/1/hilite/


Panel (if known): Circuit Judges Walker and Hall; District Judge Murtha

Argument Date: 04/24/2014

Date of Issued Opinion: 02/25/2015

Docket Number: No. 13-2915-cv

Decided: Vacated and Remanded

Case Alert Author: Jesse M. Kantor

Counsel: Christopher Dunn, (Erin Harrist, Arthur Eisenberg, Alexis Karterton, on the brief), New York Civil Liberties Union Foundation, New York, N.Y., for plaintiff-appellant.

Marta Ross, (Edward F.X. Hart, William S.J. Fraenkel, on the brief) for Zachary W. Carter, Corporation Counsel for the City of New York, New York, N.Y., for defendant-appellee.

Author of Opinion: Judge Walker, Jr.

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 02/26/2015 09:05 PM     2nd Circuit     Comments (0)  

February 24, 2015
  Garcia v. Jane & John Does - Second Circuit
Headline: In Amended Opinion, Second Circuit Dismisses Occupy Wall Street Protesters' False Arrest Suit Against New York City Police Officers

Area of Law: Qualified Immunity, False Arrest, Probable Cause

Issue(s) Presented: Whether the district court erred in denying defendant New York City police officers' motion to dismiss false arrest suit on grounds of qualified immunity.

Brief Summary: Plaintiffs-appellees were arrested on October 1, 2011 during a march in support of the Occupy Wall Street movement, for blocking the Manhattan roadway entrance to the Brooklyn Bridge. They sued the defendants-appellants, New York City Police Department (NYPD) officers, for false arrest in violation of their First, Fourth and Fourteenth Amendment rights. The United States District Court for the Southern District of New York denied the officers' motion to dismiss the complaint and the NYPD officers' appealed.

On August 21, 2014, the Second Circuit affirmed the district court's judgment by a divided vote. However, on December 17, 2014, the Court entered an order withdrawing the earlier opinion and granting appellants' petition for rehearing en banc. In its amended opinion, the Second Circuit reversed the judgment of the district court denying the motion to dismiss, and remanded with instructions to dismiss the complaint. Because the amended opinion reflects the outcome sought by appellants in their petition for rehearing, the court further ruled that the case no longer warrants en banc consideration.

The full text of the opinion can be found at: http://www.ca2.uscourts.gov/de...57bce/1/hilite/


Extended Summary: Plaintiffs-appellees were arrested on October 1, 2011 during a march in support of the Occupy Wall Street movement. Based upon the complaint and video and picture exhibits submitted by plaintiffs, thousands of Occupy Wall Street demonstrators participated in the planned, but unpermitted, march from downtown Manhattan to the Brooklyn Bridge. The New York Police Department (NYPD) was aware of the intended event and had police officers on hand, escorting and, at times, directing marchers across certain streets against traffic signals and other traffic rules.

When the marchers arrived at the Manhattan entrance to the Brooklyn Bridge, a bottleneck developed, creating a large crowd at the entrance to the Bridge's pedestrian walkway. While one group of demonstrators remained on the pedestrian walkway, another large group moved onto the roadway, blocking traffic, where they were met and blocked by a line of police officers. Video footage revealed that NYPD officers made announcements to the crowd to stop obstructing traffic and step back onto the sidewalk or be subject to arrest for disorderly conduct. The plaintiffs asserted, however, they did not hear any warnings and it is unclear whether most demonstrators could hear the officers' warnings over the significant crowd noise. Officers arrested over 700 people who remained on the Bridge roadway, including the plaintiffs-appellees.

Plaintiffs sued the defendant-appellant NYPD officers in the United States District Court for the Southern District of New York or false arrest in violation of their First, Fourth and Fourteenth Amendment rights. Plaintiffs alleged that, by leading the march toward the bridge, and then moving into the roadway at the entrance to the Brooklyn Bridge, the NYPD officers effectively granted marchers an actual and apparent grant of permission to follow. They claimed they were led to believe the NYPD was escorting the protest. The NYPD officers moved to dismiss the claims on the grounds of qualified immunity. The district court denied the motion, holding that the allegations established that a reasonable officer would have known that he lacked probable cause to arrest plaintiffs and, although plaintiffs had clearly violated the law by entering the roadway and blocking vehicular traffic, no reasonable police officer could have believed that plaintiffs had received fair warning that their behavior was illegal.

The NYPD officers appealed and, on August 21, 2014, the Second Circuit affirmed the district court's judgment by a divided vote. However, on December 17, 2014, the court entered an order withdrawing the earlier opinion and granting appellants' petition for rehearing en banc. In its amended opinion, issued today, the Second Circuit reversed the district court and remanded with instructions to dismiss the complaint. Additionally, because the amended decision reflects the outcome sought by appellants in their petition for rehearing, the court found that the case no longer warrants en banc consideration.

The Second Circuit held that there was sufficient evidence to establish probable cause for plaintiffs' arrests for disorderly conduct, because the officers could have reasonably inferred that the plaintiffs were either intentionally obstructing traffic, or were aware there was a substantial and unjustifiable risk they were doing so. The court further concluded that plaintiffs' asserted belief that the officers gave them implied permission to violate traffic laws might provide a defense in a criminal charge, but was not relevant to establishing probable cause for the arrest. Instead, the Court evaluated whether any such defense was so clearly established as a matter of law, and whether the facts establishing that defense were so clearly apparent to the officers on the scene as a matter of fact, that any reasonable officer would have appreciated that there was no legal basis for arresting plaintiffs.

The court rejected plaintiffs' contention that it could not dismiss the complaint so long as any arresting officer might reasonably have anticipated that some protestors would reasonably interpret the police behavior as implied permission, reasoning that police officers could not be required to engage in a speculative inquiry into the potential state of mind of the demonstrators.

The full text of the opinions can be found at: http://www.ca2.uscourts.gov/de...57bce/1/hilite/

Panel: Judges Calabresi, Livingston, and Lynch

Argument Date: 04/22/2013

Date of Issued Opinion: 02/23/2015

Docket Number: 12-2634-cv

Decided: Reversed

Case Alert Author: Jesse M. Kantor

Counsel: Mara Verheyden-Hilliard (Andrea Hope Costello and Carl Messineo, on the brief), Partnership for Civil Justice Fund, Washington, D.C., for Plaintiffs-Appellees.
Ronald E. Sternberg, Assistance Corporation Counsel (Leonard Koerner and Arthur G. Larkin, Assistant Corporation Counsel, on the brief), for Michael A. Cardozo, Corporation Counsel of the City of New York, New York, for Defendants-Appellants.

Author of Opinion: Judge Lynch

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 02/24/2015 08:08 PM     2nd Circuit     Comments (0)  

February 11, 2015
  Monique Sykes, et al. v. Mel S. Harris & Associates, LLC, et al. - Second Circuit
Headline: Second Circuit Affirms Class Certification in Debt Collection "Default Judgment Mill" Action

Area of Law: Civil Procedure, Class Action, Fair Debt Collection Practice Act, RICO

Issue(s) Presented: Whether two classes were properly certified in an action brought by thousands of debtors against corporation affiliates that purchased consumer debt, service process company, and law firm specializing in debt collection litigation, for abusive debt collection practices in violation of federal and state law.

Brief Summary: Plaintiffs are New York City residents who were sued by defendants in debt collection actions in New York City Civil Court between 2006 and 2010. Defendants include affiliates of Leucadia National Corporation, a large purchaser of consumer debt, Mel S. Harris & Associates (Mel Harris), a law firm that initiated debt collection litigation as counsel for Leucadia, and a process service company. Plaintiffs initiated an action in the United States District Court for the Southern District of New York for damages and injunctive relief on behalf of themselves and others, alleging that defendants effectively operated a massive illegal debt collection "default judgment mill" in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), the Fair Debt Collection Practices Act (FDCPA), New York General Business Law (GBL) § 349, and New York Judiciary Law § 487.

The district court certified two classes under FRCP 23, one comprising all those who had or would be sued by Mel Harris as counsel for Leucadia, and one comprising all those sued by Mel Harris as counsel for Leucadia who had a default judgment entered against them. Defendants appealed the class certification orders. In this consolidated appeal, a divided Second Circuit affirm, holding the district court did not abuse its discretion in certifying the two classes.

The full text of the opinion may be found at:
http://www.ca2.uscourts.gov/de...9b275/1/hilite/


Extended Summary: Plaintiffs are New York City residents who were sued by defendants in debt collection actions in New York City Civil Court between 2006 and 2010. Defendants include subsidiaries of Leucadia National Corporation, a large purchaser of consumer debt, Mel S. Harris & Associates (Mel Harris), a law firm that initiated debt collection litigation as counsel for Leucadia, and Samserv, Inc., a process service company. Plaintiffs sued on behalf of themselves and others in the United States District Court for the Southern District of New York alleging that defendants effectively operated an illegal debt collection "default judgment mill" in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), the Fair Debt Collection Practices Act (FDCPA), New York General Business Law (GBL) § 349, and New York Judiciary Law § 487.

According to plaintiffs, the defendants engaged in a scheme to purchase large amounts of consumer debt in order to initiate debt collection actions and collected millions of dollars by generating fraudulent defaults judgments. Plaintiffs alleged more specifically that, after purchasing large amounts of computer debt, defendants electronically generated thousands of complaints and summonses to initiate collection proceedings, engaged a process server for "sewer service" whereby plaintiffs were not actually served, but proof of service was filed with the court, and, ultimately, electronically generated motions for default judgment when plaintiffs failed to appeal. The evidence presented indicated that from 2006 to 2010, "'Leucadia entities filed 124,838 cases' and Mel Harris represented Leucadia in 99.63 percent of those cases." Plaintiffs sought damages and injunctive relief.

After the lower court denied defendants' motion to dismiss, plaintiffs moved for class certification under Federal Rule of Civil Procedure (FRCP) 23(a) and the district court ultimately certified two classes. One class, certified under FRCP 23(b)(2) comprises all those who have been or will be sued by Mel Harris as counsel for Leucadia in violation of RICO and state law and sought injunctive relief directing defendants to, in essence conform their debt collection practices to governing law and notify plaintiffs of their right to re-open cases in which a default had been entered against them. The second class, certified under FRCP 23(b)(3) comprises all those sued by Mel Harris as counsel for Leucadia who have had a default judgment entered against them and seeks damages under RICO, the FDCPA and New York state law.
Defendants appealed, arguing that the district court abused its discretion in certifying the two classes.

The Second Circuit majority disagrees with defendants, finding the district court did not abuse its discretion in certifying one class under 23(b)(2) and the second under 23(b)(3). The majority concludes that, as to the first class certified under 23(b)(s), plaintiffs' evidence satisfied the "commonality" requirement of FRCP 23(a) and that individual issues predominate over issues shared by the class, and met the requirement under 23(b)(2) that the injunctive relief would provide relief to each class.

The majority also finds that the district court did not abuse its discretion in finding that plaintiffs' satisfied the requirements for the second class certification under Rule 23(b)(3). The majority rejects the defendants' argument that individual issues related to damages, timeliness and service predominated over issues shared by the class, making certification inappropriate under Rule 23(a). The court concludes instead that the common issue of whether defendants' actions violated RICO, FDCPA and state law predominated. Referring to the 2013 United States Supreme Court decision in Comcast Corp. v. Behrend, relied on by defendants, the majority holds that Comcast "did not rewrite the standards governing individualized damage considerations: it is still clear that individualized monetary claims belong in Rule 23(b)(3)" where, as here, the damages stem from the same common liability.
The majority further finds no abuse of discretion in the district court's finding that the evidence supported a conclusion that a class action is "superior to other available methods for fairly and efficiently adjudicating" the issues. The Second Circuit explains that, few plaintiffs would have the incentive to proceed in state court, where they would have to bring their claims individually, because the amounts at stake for individual plaintiffs is relatively small, and many of them have limited means to pursue individual claims.

Judge Jacobs filed a dissent in which he maintains that "[t]his is class litigation for the sake of nothing but class litigation." He writes that the majority's superiority ruling is error because there is a statutory remedy available in state court, en masse vacatur, which is more efficient and speedy than a federal class action. He further argues that in finding common issues predominate over individual ones, the district court erred by failing to rigorously weighing the common and distinct issues. The dissent also agrees with defendants that the injunctive relief class was certified in error because, the named plaintiffs have already had their default judgments vacated.

The full text of the opinion may be found at:
http://www.ca2.uscourts.gov/de...dec05/1/hilite/


Panel: Circuit Judges Jacobs, Calabresi, and Pooler

Argument Date: 02/07/2014

Date of Issued Opinion: 02/10/2015

Docket Number: 132742cv

Decided: Affirmed

Case Alert Author: Joan O'Connor Archer

Counsel: PAUL D. CLEMENT, Bancroft PLLC, Washington, DC (Candice Chiu, Bancroft PLLC, Washington, DC; James R. Asperger and Maria Ginzburg, Quinn Emanuel Urquhart & Sullivan LLP, New York, NY; Marc A. Becker, London, UK; Brett A. Scher, Kaufman Dolowich & Voluck LLP, Woodbury, NY, on the brief), for Defendants‐Appellants Mel S. Harris LLC, Mel S. Harris, Michael Young, David Waldman, Kerry Lutz, and Todd Fabacher.

MIGUEL A. ESTRADA, Gibson, Dunn & Crutcher LLP, Washington, DC (Scott P. Martin, Gibson, Dunn & Crutcher LLP, Washington, DC; Michael Zimmerman, Zimmerman Jones Booher LLC, Salt Lake City, UT; Lewis H. Goldfarb and Adam R. Schwartz, McElroy, Deutsch, Mulvaney & Carpetner LLP, Morristown, NJ; Mark D. Harris, Proskauer Rose LLP, New York, NY, on the brief), for Defendants‐Appellants Leucadia National Corporation, L‐Credit, LLC, LR Credit, LLC, LR Credit 10, LLC, LR Credit 14, LLC, LR Credit 18, LLC, LR Credit 21, LLC, Joseph A. Orlando, and Philip M. Cannella.

JACK BABCHIK, Babchik & Young LLP, White Plains, NY, for Defendants‐Appellants Samserv, Inc., William Mlotok, Benjamin Lamb, Michael Mosquera, and John Andino.

MATTHEW D. BRINCKERHOFF, Emery Celli Brinckerhoff & Abady LLP, New York, NY (Jonathan S. Abady, Debra L. Greenberger and Vasudha Talla, Emery Celli Brinckerhoff & Abady LLP, New York, NY; Josh Zinner, Susan Shin and Claudia Wilner, New Economy Project, New York, NY; Carolyn E. Coffey and Ariana Lindermayer, of counsel to Jeanette Zelhoff, MFY Legal Services, New York, NY; Charles J. Ogletree, Jr., Harvard Law School, Boston, MA, on the brief), for Plaintiffs‐Appellees.

JEAN CONSTANTINE‐DAVIS, AARP Foundation Litigation, Washington, DC, on behalf of Amici Curiae AARP, National Association of Consumer Advocates, and National Consumer Law Center, in support of Plaintiffs‐Appellees. DANIELLE F. TARANTOLO, New York Legal Assistance Group, New York, NY, on behalf of Amicus Curiae Consumer Advocates, in support of Plaintiffs‐Appellees. SARANG VIJAY DAMLE, Senior Counsel, Consumer Financial Protection Bureau, Washington, DC (Meredith Fuchs, General Counsel, To Queen Truong, Deputy General Counsel, David M. Gossett, Assistant General Counsel, Jessica Rank Divine, Attorney, Consumer Financial Protection Bureau, Washington, DC; Jonathan E. Nuechterlein, General Counsel, John F. Daly, Deputy General Counsel for Litigation, Theodore (Jack) Metzler, Attorney, Federal Trade Commission, Washington, DC, on the brief), on behalf of Amici Curiae The Consumer Financial Protection Bureau and Federal Trade Commission, in support of Plaintiffs‐Appellees.

Author of Opinion: Judge Pooler for majority; Judge Jacobs dissenting

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 02/11/2015 08:35 AM     2nd Circuit     Comments (0)  

February 2, 2015
  Fezzani v. Bear, Sterns & Co., Inc
Headline: Second Circuit Denies Rehearing Petition in Case Alleging Securities Fraud by Bear Stearns, Clarifying Standard for Liability in Market Manipulation Cases

Area of Law: Securities

Issue Presented: Whether a victim's reliance on a defendant's direct communications is a required showing in every market manipulation case.

Brief Summary: After the Second Circuit affirmed the dismissal of their securities fraud claim against Bear Stearns (the clearing broker in their transactions), the plaintiffs-appellants petitioned for a rehearing or rehearing en banc. The SEC filed an amicus brief supporting them, arguing that the Second Circuit's opinion had incorrectly held that in market manipulation cases, liability could only attach to persons who actually communicated a misrepresentation to a victim. The Second Circuit rejected the petition, but clarified that its earlier opinion had "not require[d] that reliance by a victim on direct oral or written communications by a defendant...be shown in every manipulation case." Rather, a showing of reliance can instead be based on market activity that is designed to send a false pricing signal to the market. Here, however, there was no showing of such market activity, and thus the case was properly dismissed. To read the whole opinion, please visit http://www.ca2.uscourts.gov/de...95b784e475d/3/hilite/

Extended Summary: The plaintiffs-appellants petitioned for rehearing from the Second Circuit's related summary order and opinion, which had affirmed the dismissal by the United States District Court for the Southern District of New York of their dismissal of federal securities law fraud claims against a clearing broker (Bear Stearns) and individual investors. They argued that the Second Circuit's affirmance conflicted with another Second Circuit decision, Levitt v. J.P. Morgan, that had been filed just before its ruling in their case. Specifically, they asserted that their case presented very similar factual allegations to those in Levitt, and since the Second Circuit held that a class was properly certified in that case, their case should proceed as well.

The Second Circuit denied their petition. The court first explained that there was no inconsistency, because Levitt had dealt with whether a class was properly certified, rather than the issue here: whether the allegations were sufficient to state a claim for relief.

The Second Circuit also addressed the argument, made by the SEC in an amicus brief, that its earlier dismissal of this case had erroneously conveyed that, in any and all manipulation cases, liability attaches only to persons who communicate a misrepresentation to a victim. Quoting ATSI Commc'ns, Inv. V. Shaar Fund, Ltd., the SEC argued that "the essence of manipulation is not a misrepresentation, but market activity ... that itself creates a 'false pricing signal." The court clarified that "we agree with the propositions of law asserted by the SEC that, in a manipulation claim, a showing of reliance may be based on 'market activity' intended to mislead investors by sending 'a false pricing signal to the market,' upon which victims of the manipulation rely." In this case, however, the plaintiffs-appellants' complaint failed to so plead.

In order to succeed in a private action for damages stemming from false pricing signals to a market, it must involve: (i) particular securities; (ii) manipulated by particular defendants; which (iii) caused the losses to particular buyers. Here, there was no market that existed for the shares that the defendants sold to the appellants. In fact, the court found that the shares in question were not traded in any structure that could be deemed an independent, arms-length transaction. Therefore, the court concluded, there was no plausible claim that the prices paid by appellants were based on "false pricing signal[s]."

Date of Issued Opinion:
01/30/2015

Docket Number: 14-3983, 09-4414

Case Alert Author: Eddie Chang

Counsel: Max Folkenflik, Folkenflik & McGerity, for Plaintiffs-Appellants; Kerry A. Dziubek and Michael D. Schissel, Arnold & Porter LLP for Appellees Bear, Stearns & Co. Inc. and Bear, Stearns Securities Corp.; Howard Wilson and Scott A. Eggers, Proskauer Rose LLP for Defendant-Appellee Richard Harriton; Anne K. Small, Michael A. Coley, Jacob H. Stillman, John W. Avery, and Jeffrey A. Berger, for amicus curiae The Securities and Exchange Commission

Author of Opinion: Judge Winter (majority); Judge Lohier (concurring in part, dissenting in part)

Case Alert Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 02/02/2015 10:57 AM     2nd Circuit     Comments (0)  

January 28, 2015
  Martin v. Hearst Corporation - Second Circuit
Headline: Second Circuit Affirms Dismissal of Defamation Claims Against Media Outlets that Published and Refused to Remove Reports of Petitioner's Arrest, Although Charges Were Later Nolled and the Arrest Erased Under Connecticut Criminal Records Erasure Statute.

Area of Law: Torts

Issue(s) Presented: Whether an individual who's arrest is erased under Connecticut's Criminal Records Erasure Statute may assert libel and related publication-related tort claims against media outlets that published contemporaneous news accounts of her arrest, on the ground that those accounts had become false or misleading.

Brief Summary: Plaintiff-appellant Martin was arrested in 2010 for various drug-related offenses. Three newspapers owned by defendant-appellee Hearst Corporation, and another media outlet, published accurate online reports of the arrest. More than one year after the published reports, the criminal case against Martin was nolled and her arrest warrant was erased pursuant to Connecticut's Criminal Records Erasure Statute. After the defendant-appellees refused her request to remove the stories from their website, Martin sued, asserting libel and other publication-related tort claims. The United States District Court for the District of Connecticut awarded summary judgment to the defendants on all claims and plaintiff appealed. The Second Circuit affirmed.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...8eefbc8a0898/1/hilite/

Extended Summary (if applicable): Plaintiff-appellant Lorraine Martin was arrested on August 20, 2010 and charged with various offenses related to the possession of narcotics and drug paraphernalia. Within the week, three newspapers owned by defendant-appellee Heart Corporation, as well as defendant-appellee News 12 Interactive LLC, accurately published articles online reporting Martin's arrest.

More than one year after the defendants published the reports, the State of Connecticut decided not to pursue its case against Martin. The charges against Martin were "nolled" under the statute and her arrest records were erased under Connecticut's Criminal Law Erasure Statute. That statute provides that "[a]ny person who shall have been the subject of such an erasure shall be deemed to have never been arrested." Thereafter, Martin requested that the defendants remove the articles reporting her arrest from their websites; the Defendants refused. The articles remain available online.

Martin brought suit in the United States District Court for the District of Connecticut asserting libel, placing another in a false light before the public, negligent infliction of emotional distress, and invasion of privacy by appropriation claims. Despite conceding that the report of her arrest were accurate when first published, Martin claimed that publishing the statements became false and defamatory once the charges against her were nolled. Reasoning that the truth of the reports of Martin's arrest remained the same, and the Erasure Statute did not change the historical fact that Martin was arrested, the District Court granted summary judgment for the defendants on all claims.

On appeal, the Second Circuit affirmed the District Court's grant of summary judgment for defendants. The court interpreted the Criminal Records Erasure Statute as providing to applicable parties, as a matter of "legal fiction," the legal status of someone who has never been arrested. The court concluded that, although this bars government and courts from relying on a defendant's erased record, and allows a defendant to swear under oath that she has never been arrested, it was not intended to provide a basis for defamation suits. Erasure, the court found, while effective in the context of the judicial and law enforcement systems, does not undo historical facts or convert facts into falsehoods. Additionally, the court found that the news organizations' failure to report an update to the Martin arrest could not constitute defamation by implication, because the news reports at issue did not imply any fact that was not true.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...eefbc8a0898/1/hilite/

Panel (if known): Judges Walker, Jacobs, Wesley

Argument Date: 08/18/2014

Date of Issued Opinion: 01/28/2015

Docket Number: 13-3315

Decided: Affirmed

Case Alert Author: Samantha Kopf

Counsel: Ryan O'Neill (Mark Sherman, on the brief), The Law Offices of Mark Sherman, LLC, Stamford, CT, for Plaintiff-Appellant; Jonathan R. Donnellan (Courtenay O'Connor, on the brief), Hearst Corporation, New York, NY, for Defendant-Appellee Hearst Corporation, David A. Schulz (Cameron Stracher, on the brief), Levin Sullivan Kock & Schulz, New York, NY, for Defendant-Appellee News 12 Interactive.

Author of Opinion: Judge Wesley

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 01/28/2015 06:58 PM     2nd Circuit     Comments (0)  

January 22, 2015
  Barrows v. Burwell--Second Circuit
Headline: Second Circuit Vacates the Dismissal of Medicare Beneficiaries' Claim Regarding the Use of "Observation Status" in Hospital Admissions

Area of Law: Civil Procedure, Constitutional, Medicare

Issue(s) Presented: Whether Medicare Beneficiaries have a property interest in their hospital admission status under the Due Process Clause.

Brief Summary: Medicare beneficiaries filed a putative class action suit on behalf of themselves and other Medicare beneficiaries against the Secretary of Health and Human Services alleging that the Secretary's use of "observation status" deprives plaintiffs of Medicare Part A coverage to which they are entitled. Plaintiffs claim Medicare billing rules incentivize hospitals to admit patients under "observation status," which is covered by Medicare Part B, rather than "inpatient status," which is covered more comprehensively by Medicare Part A. Plaintiffs claim they were admitted to hospitals under "observation status" and as a result incurred hundreds of dollars in copays and thousands of dollars in post hospitalization nursing care bills. Plaintiffs claim these costs would have been covered under Medicare Part A to which they are entitled if they had been admitted as inpatients. The district court dismissed the complaint in its entirety and Plaintiffs appealed. The Second Circuit affirmed the dismissal of the Medicare Act claim, but vacated the dismissal of the Due Process Clause claim, remanding the case for limited discovery as to whether plaintiffs have a property interest in their hospital admission status.
The full text of the opinion may be found at http://www.ca2.uscourts.gov/de...ced1b/1/hilite/


Extended Summary: Plaintiffs bring this suit on behalf of themselves and Medicare beneficiaries. Plaintiffs claim they were admitted under observation status rather than as inpatients and as a result incurred thousands of dollars in health care costs. As inpatients, Medicare beneficiaries are entitled to Medicare Part A coverage. Medicare Part A is titled "Hospital Insurance Benefits for Aged and Disabled" and creates an entitlement to inpatient hospital services and post hospitalization extended care. Under Part A, beneficiaries pay a one-time deductible for the first sixty days in the hospital. As observation patients, Medicare beneficiaries are entitled to Part B coverage. Medicare Part B is titled "Supplementary Medical Insurance Benefits for Aged and Disabled" and covers visits to doctors and other outpatient treatments. Under Part B, patients owe a co-pay for each service received and post hospitalization nursing care is not covered.

Plaintiffs allege the Secretary's use of "observation" status deprives them of Medicare Part A coverage to which they are entitled. Plaintiffs claim that the use of observation status and the average length of stay for a patient admitted under observation status has increased dramatically in recent years. Plaintiffs attribute that increase to a Medicare billing rule, which states that "f a beneficiary is admitted but that admission is later found to be improper, the hospital must refund the Part A payment to Medicare but cannot rebill under Part B." Plaintiffs claim the rule incentivizes hospitals to admit patients under observation status because that ensures that the hospital will receive payment.

Plaintiffs' complaint pled nine causes of action including violations of the Medicare Act, the Administrative Procedure Act, the Freedom of Information Act, and the Due Process Clause. Plaintiffs sought a permanent injunction (1) prohibiting the Secretary to allow Medicare beneficiaries to be placed on observation status, (2) directing the Secretary to provide written notification to any Medicare beneficiary who is placed on observation status of the nature of the action and the consequences for coverage and the right to review the action, and (3) directing the Secretary to establish a procedure for administrative review of a decision to place a beneficiary on observation status. The district court dismissed the complaint in its entirety and Plaintiffs appealed two claims.

The issue on appeal is whether the Secretary's failure to provide expedited written notice and administrative review of Medicare beneficiaries' placement into "observation status" violates the Medicare Act and the Due Process Clause. The Second Circuit affirmed the dismissal of the Medicare Act claim holding, first, that Plaintiffs lack standing to challenge the adequacy of the notice they received and, second, nothing in the Act entitles Plaintiffs to the process changes they seek. The Circuit held the district court erroneously relied on the Secretary's assertion that the decision to place a patient into "observation" or "inpatient" status is a complex medical decision left to the discretion of the doctor, rather than accepting Plaintiffs' assertion that, in practice, the decision is based on fixed Medicare criteria, and not left to the discretion of doctors. The impermissible finding of fact led the court to conclude that Plaintiffs lacked a property interest in their hospital admission status. This determination was the sole ground for dismissing the Due Process claim. The Second Circuit remanded the case for limited discovery on the issue of whether Plaintiffs possess a property interest in their hospital admission status.

Panel (if known): Circuit Judges Winter, Walker, and Cabranes

Argument Date: 10/23/2014

Date of Issued Opinion: 01/22/2015

Docket Number: No. 13‐4179‐cv

Decided:
Affirmed in part and vacated in part.

Case Alert Author
: Joan O'Connor Archer

Counsel: Alice Bers (Gill Deford, Center for Medicare Advocacy, Inc., Willimantic, CT; Anna Rich, National Senior Citizens Law Center, Oakland, CA, on the brief), Center for Medicare Advocacy, Inc., Willimantic, CT, for Plaintiffs‐Appellants.

Jeffery A. Clair (Stuart F. Delery, Assistant Attorney General, Adam C. Jed, Michael S. Raab, United States Department of Justice, Civil Division, Appellate Staff, Washington, DC; Deirdre M. Daly, United States Attorney for the District of Connecticut, on the brief), United States Department of Justice, Civil Division, Appellate Staff, Washington, DC, for Defendant‐Appellee.

Mark G. Arnold, Husch Blackwell LLP, Clayton, MO, for Amicus Curiae American Health Care Association.
Edith M. Kalls, Whatley Kallas, LLP, New York, NY, for Amici Curiae American Medical Association, et al.
Catherine E. Stetson, Hogan Lovells US LLP, Washington, DC, for Amicus Curiae American Hospital Association.

Author of Opinion: Judge Cabranes

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 01/22/2015 05:57 PM     2nd Circuit     Comments (0)  

December 4, 2014
  Second Circuit - United States v. Sanchez
Headline: Second Circuit Holds that Erroneous Consideration of Prior State Narcotics Conviction in Calculating Mandatory Minimum Sentence Constituted Plain Error

Area of Law: Criminal

Issue(s) Presented: Whether the district court's miscalculation of defendant's mandatory minimum sentence based upon erroneous consideration of a prior state narcotics conviction constituted plain error.

Brief Summary: Appellant Sanchez pled guilty to conspiring to possess, with intent to distribute, over 1,000 grams of heroin and was sentenced based on his guilty plea and his status as a second-offender. Taking into considering Sanchez's prior Connecticut conviction for narcotics possession, the United States District Court for the District of Connecticut found that Sanchez's mandatory minimums sentences increased from 10 years' imprisonment and 5 years' supervised release to 20 years' imprisonment and 10 years' supervised release. Sanchez was ultimately sentenced to 288 months' imprisonment and 10 years' supervised release. The Second Circuit held that the lower court erred in considering Sanchez's prior conviction and therefore miscalculated Sanchez's mandatory minimum sentences. Finding the calculation constituted plain error, the Court vacated and remanded for resentencing.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...c8d329f53e03/2/hilite/

Extended Summary: Appellant Sanchez pled guilty to one count of conspiring to possess, with intent to distribute, over 1,000 grams of heroin. In sentencing Sanchez, the United States District Court for the District of Connecticut found Sanchez was subject to enhanced penalties because of a prior Connecticut conviction for possession of narcotics. Based on Sanchez's prior-conviction, the District Court found that mandatory minimum sentences for Sanchez's crime increased from 10 years' imprisonment and 5 years' supervised release to 20 years' (360 months) imprisonment and 10 years' supervised release. Sanchez was ultimately sentenced to 288 months' imprisonment and 10 years' supervised release.

Sanchez failed to object at his sentencing hearing but, on appeal, argued that the District Court's imposition of a prior-conviction enhancement, which raised the mandatory minimum sentence, constituted plain error. The Second Circuit agreed with Sanchez and vacated and remanded for resentencing.

Plain error exists where (1) there is an error; (2) the error is clear or obvious, rather than subject to reasonable dispute; (3) the error affected the appellant's substantial rights, which in the ordinary case means it affected the outcome of the district court proceedings; and (4) the error seriously affects the fairness, integrity or public reputation of judicial proceedings. The government did not dispute that prongs one and two were satisfied because considering Sanchez's prior Connecticut conviction as a prior drug felony for sentencing was a clear error, not subject to reasonable dispute, because the Government could not prove Sanchez was convicted under a qualifying federal narcotics laws. Accordingly, the mandatory minimum should have been a shorter term of imprisonment and supervised release. The Government likewise did not dispute that the remaining prongs were satisfied with regard to Sanchez's sentence to supervised release of 10 years, the mandatory minimum considering the prior conviction, and that that portion of the sentence constituted plain error.

The Government did argue, however, that the imprisonment term should stand and did not constitute plain error. The Second Circuit disagreed, holding that the erroneous calculation substantially affected Sanchez's rights and reflected a lack of fairness and integrity of the judicial proceedings. Adopting a narrower reading of the holding in its prior decision in United States v. Deandrade than either the Government or defense, the Court found no bright-line test existed and that, evaluating the case record as a whole as Deandrade dictated, the erroneously calculated mandatory minimum did affect Sanchez's sentence. The Court found that, unlike in Deandrade, the assumption of a higher mandatory minimum permeated the record in this case and both sides relied on the erroneous mandatory minimum throughout Sanchez's sentencing hearing, affecting his substantial rights.

As to whether the error seriously affected the fairness, integrity, or public reputation of judicial proceedings, the Court found that the District Court relied on the erroneous mandatory minimum and, if this error were to stand uncorrected, Sanchez would face a longer sentence than he otherwise would, seriously affecting the fairness and integrity of the judicial proceedings. Accordingly, the Court vacated and remanded for resentencing.

The full text of the opinion may be found at: http://www.ca2.uscourts.gov/de...c8d329f53e03/2/hilite/
Panel: Circuit Judges Cabranes, Straub, and Livingston.

Argument Date: 08/19/2014

Date of Issued Opinion: 12/04/2014

Docket Number: 11-2429-cr

Decided: Vacated and Remanded.

Case Alert Author: Sam Kopf

Counsel: Devin McLaughlin, Langrock Sperry & Wool, LLP, Middlebury, VT, for Appellant Edwin Sanchez; Alina P. Reynolds, Assistant United States Attorney (Edward Chang, Assistant United States Attorney, on the brief), for Deirdre M. Daly, United States Attorney for the District of Connecticut, Bridgeport, CT, for Appellee United States of America.

Author of Opinion: Judge Cabranes

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 12/04/2014 01:23 PM     2nd Circuit     Comments (0)  

October 24, 2014
  Mastafa v. Chevron Corp.
Headline: Second Circuit Affirms the Dismissal of Five Iraqi Nationals' Claims Against Corporations for Illicitly Funding Saddam Hussein's Regime

Area of Law: International Law

Issue(s) Presented: Whether Iraqi nationals, tortured and abused during the Saddam Hussein regime, can recover damages from corporations who allegedly paid kickbacks to the regime.

Brief Summary:
Five Iraqi nationals filed a complaint against Chevron and Banque Nationale de Paris Paribas claiming that they or their relatives were tortured, imprisoned, and in some cases executed by agents of Saddam Hussein and that the defendant corporations had aided and abetted by paying Hussein's regime illegal kickbacks. The district court dismissed the complaint. The Second Circuit affirmed, holding that a recent Supreme Court decision forecloses recovery under the Torture Victim Protection Act because the Act imposes liability on individuals, not corporations. The Circuit also held it lacked jurisdiction on the Alien Tort Statute claim because the plaintiffs' complaint lacked a plausible allegation that the defendants had purposefully aided and abetted alleged violations of customary international law.

The full text of the opinion may be found at http://www.ca2.uscourts.gov/de...44726f2ed6e/1/hilite/

Extended Summary: Five Iraqi nationals brought suit against Chevron Corporation and Banque Nationale de Paris Paribas, claiming that they or their family members were tortured, imprisoned, and in some cases executed by agents of Saddam Hussein and that defendants were liable for illicitly funding the regime. Plaintiffs brought their claims under the Alien Tort Statute of 1789 (ATS) and the Torture Victim Protection Act of 1991 (TVPA). The district court dismissed the claims under Federal Rules of Civil Procedure 12(b)(1) and (6). Plaintiffs appealed and the Second Circuit stayed the appeal pending the Supreme Court's decision in Kiobel v. Royal Dutch Petroleum Co. During the stay, the Supreme Court issued another decision relevant to this case, Mohamad v. Palestinian Authority. After the Supreme Court issued the Kiobel decision, the Second Circuit lifted the stay and affirmed the dismissal of the case in full.

The Torture Victim Protection Act imposes liability on "[a]n individual who, under actual or apparent authority, or color of law, of any foreign nation" subjects another individual to torture or extrajudicial killing. In Mohamad v. Palestinian Authority, 132 S. Ct. 1702 (2012), the Supreme Court held that the TVPA "authorizes liability solely against natural persons," and "does not impose liability against organizations," including corporations. The parties agreed that this decision foreclosed plaintiffs' claims under the TVPA.

The Alien Tort Statute establishes district court jurisdiction "of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States". In Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), the Supreme Court held "the presumption against extraterritoriality applies to claims under the ATS . . . and case[s] seeking relief for violations of the law of nations occurring outside the United States [are] barred." The Second Circuit held that when faced with ATS claims, courts should focus on the particular conduct alleged in the complaint, and then follow a two-step jurisdictional analysis of that conduct. The first step is to determine whether the complained-of conduct - i.e., the "conduct which constitutes a violation of the law of nations or aiding and abetting such a violation" - sufficiently touches and concerns the United States so as to displace the presumption against extraterritoriality. The second step is to "glimps[e] at the merits" and determine whether the complaint plausibly alleges a violation under the ATS.

Applying this standard to the instant complaint, the Second Circuit concluded that it satisfied the first step because of its allegations about financial transactions that occurred in the United States. The complaint failed on the second step, however, because it failed to plausibly plead that the defendants had the mens rea required to establish a violation of the law of nations. The complaint lacked a plausible allegation that the defendants had acted with the purpose of facilitating human rights abuses.

Panel: Circuit Judges Cabranes, Straub, and Livingston

Argument Date: 05/28/2014

Date of Issued Opinion: 10/23/2014

Docket Number: No. 10‐5258‐cv

Decided: Affirmed

Case Alert Author: Joan O'Connor Archer

Counsel: John T. Murray, Murray & Murray Co., L.P.A., Sandusky, Ohio, for Plaintiffs‐Appellants.

Meir Feder, Thomas E. Lynch, Jones Day, New York, NY; Gregory G. Katsas, Michael A. Carvin, Jones Day, Washington, D.C., for Defendant‐ Appellee Chevron Corp.

Robert S. Bennett, Ellen Kennedy, Hogan Lovells US LLP, Washington, D.C.; Jennifer L. Spaziano, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, D.C., for Defendant‐Appellee Banque Nationale de Paris Paribas.

Terrence Patrick Collingsworth, Conrad & Scherer, LLP, Washington, D.C., for amicus curiae Human Rights Watch and Labor Organizations.

Author of Opinion: Judge Cabranes

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/24/2014 11:01 AM     2nd Circuit     Comments (0)  

October 2, 2014
  Urgen v. Holder - Second Circuit
Headline: Second Circuit Holds Asylum Applicant May Prove Nationality through Credibility Testimony.

Area of Law: Immigration

Issue(s) Presented: Whether an applicant for asylum can prove nationality through credibility testimony alone or must provide documentary evidence of nationality.

Brief Summary: Petitioner Urgen applied for asylum and relief under the Convention Against Torture Act, asserting that he is a stateless Tibetan born in Nepal. Finding that Urgen failed to credibly establish his nationality as a stateless Tibetan born in Nepal, an Immigration Judge ("IJ") denied asylum and ordered Urgen removed to Nepal. The Board of Immigration Appeals ("BIA") affirmed, finding that Urgen's documentary evidence failed to establish his Tibetan nationality, necessary for determining his eligibility for asylum. Neither the IJ nor the BIA made a finding as to Urgen's nationality or citizenship. The Second Circuit vacated the BIA's decision, holding that the BIA erroneously required Urgen to establish his nationality through documentary evidence. The Second Circuit remanded the matter to the BIA, instructing the agency to make an explicit determination of Urgen's country of nationality and citizenship, to determine whether he should be removed and, if so, to what country.

The full text of the opinion may be found at: ">http://www.ca2.uscourt.../de.....9/1/hilite/


Extended Summary: Petitioner Urgen applied for asylum in the United States, withholding of removal, and relief under the Convention Against Torture, asserting that he is a stateless Tibetan born in Nepal. His application for asylum asserted that Urgen was born in Nepal to Tibetan parents who fled to Nepal in the 1970s to escape persecution in China, and that neither Urgen nor his parents obtained citizenship in Nepal. The application stated that, years later, having joined the Tibetan Freedom Movement Group and paid contributions to the Tibetan government in exile, Urgen was severely beaten by Nepalese Maoists, was forced to relocate his family, and was arrested by Nepalese police for wearing anti-Chinese clothing in Nepal. The application further asserted that upon learning that Urgen did not have legal status, the police threatened to deport him to China and Urgen fled to the United States using, what he claimed was a fraudulent Nepalese passport and a United States worker's visa obtained for him by his father.

Urgen's asylum application, supported by the passport, visa, a Tibetan identity certificate, various school records, and a letter from his parents, was referred to the Immigration Court. He was placed in removal proceedings through service of a Notice to Appear that asserted that he was a native and citizen of an unknown country and was removable under the Immigration and Nationality Act ("INA") as an alien who entered the United States without a valid immigrant visa. The Immigration Judge ("IJ") ordered Urgen removed to Nepal, finding that Urgen had failed to establish that he is a stateless Tibetan born in Nepal. In so ruling, the IJ noted that aspects of his account were implausible and noted inconsistencies in Urgen's testimony about his name as compared to the name listed on his school papers. She further found that his documentary evidence did not support his identity as a stateless Tibetan, because the Tibetan certificate and letters were inadequate to establish nationality, and the passport, which could not be wholly verified as valid or fraudulent, was either valid, making him a Nepalese national or, if fraudulent, inconclusive as to his nationality.

Urgen's subsequent appeal to the Board of Immigration Appeals ("BIA") was dismissed. The BIA found that Urgen had failed to meet the threshold burden of establishing his identity and nationality, needed to obtain a determination of asylum eligibility. The BIA concluded that Urgen's documentary evidence "at best ... created a question about his name, nationality, and citizenship."

The Second Circuit agreed with the BIA that "'nationality, or lack of nationality, is a threshold question in determining eligibility for asylum, but held that an applicant can meet this threshold on credibility testimony alone. The Court stated that Urgen's country of nationality and originality was fundamental to analyzing whether he had a "well-founded fear of prosecution" and to determining where he could be removed. The Second Circuit therefore remanded the matter, instructing the BIA to review the IJ's credibility finding and to make an explicit determination with respect to Urgen's country of nationality and citizenship.

The full text of the opinion may be found at: ">http://www.ca2.uscourt.../de.....9/1/hilite/

Panel: Circuit Judges Winter, Parker, and Hall

Argument Date: 04/23/2014

Date of Issued Opinion: 10/02/2014

Docket Number: 12-809

Decided: Vacated and Remanded

Case Alert Author:
Sam Kopf

Counsel: Urgen, Pro Se, for Petitioner; Yanal H. Yousef, Office of Immigration Litigation, Civil Division (Stuart F. Delery, Principal Deputy Assistant Attorney General, Jamie M. Dowd, Senior Litigation Counsel, on the brief), United States Department of Justice, for Respondent

Author of Opinion: Per Curiam

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 10/02/2014 01:22 PM     2nd Circuit     Comments (0)  

September 29, 2014
  Equal Employment Opportunity Commission v. Port Authority of N.Y. and N.J.
Headline: Second Circuit Affirms Dismissal of Equal Pay Act Case Against EEOC, Clarifying the Pleading Standard for Employment Discrimination Claims

Area of Law: Employment Law

Issue(s) Presented: Whether a claim under the Equal Pay Act is sufficiently pled without setting forth specific facts regarding job duties in the comparison jobs.

Brief Summary: The EEOC filed a complaint under the Equal Pay Act of 1963 against the Port Authority of N.Y. and N.J., alleging that female and male attorneys working there received unequal pay for performing equal work. The district court dismissed the complaint, holding that the EEOC had not alleged any facts supporting a comparison of actual attorney job duties, but had relied on broad facts about the comparison female and male attorneys, suggesting that they all had the same degree and they were all performing equal work. The U.S. Court of Appeals for the Second Circuit affirmed. The court explained that under the Supreme Court's recent decisions regarding pleading standards, a complaint must allege enough facts to state a claim that is plausible on its face. Here, the EEOC - despite having conducted a three-year investigation prior to filing suit - had not alleged "a single nonconclusory fact supporting its assertion that the claimants' and comparators' jobs required 'substantially equal' skill and effort," dooming its complaint.
The full text of the opinion may be found at http://www.ca2.uscourts.gov/de...9987c68840a/1/hilite/

Extended Summary: After a discrimination claim filed by a female attorney in the Port Authority of New York and New Jersey's law department, the Equal Employment Opportunity Commission ("EEOC") began an investigation into the Port Authority's pay practices. After three years, the EEOC filed a complaint against the Port Authority, asserting that the Port Authority paid its female and male nonsupervisory attorneys unequal wages for equal work, in violation of the Equal Pay Act of 1963. The complaint charged that nonsupervisory attorneys all shared the same job code, the same amount of required effort and skill, and the same working conditions. Despite this, female attorneys were paid less than male attorneys.
The district court, skeptical that the EEOC had adequately pled a claim, ordered the EEOC to answer Port Authority's interrogatories on the issue. In answering, the EEOC presented a chart on fourteen female nonsupervisory claimants and their comparators, detailing dates of bar admission, dates of service with the Port Authority, salaries, and divisions. The district court found this chart to be superficially random at best, and the EEOC position that "an attorney is an attorney" did not give rise to a reasonable inference that the attorneys' jobs required substantially equal work. The district court thus granted judgment in favor of the Port Authority.

On review, the Second Circuit noted the unsettled pleading standard for discrimination claims in the Circuit. In Swierkiewicz v. Sorema (2002), the Supreme Court held that an employment discrimination complaint need not set forth "specific facts establishing a prima facie case of discrimination" to survive a motion to dismiss. However, The Supreme Court's decisions in Twombly and Iqbal later clarified the proper Rule 8 standard that a complaint had to allege "enough facts to state a claim to relief that is plausible on its face." The Second Circuit concluded that Swierkiewicz is still good law in the sense that discrimination complaints need not allege facts establishing each element of a prima facie discrimination claim. However, the baseline Twombly standard still applies: enough nonconclusory facts must be alleged to push the claim from conceivable to plausible.

With that standard clarified, the Second Circuit affirmed the District Court's decision. The court agreed with the District Court that broad generalizations drawn from job titles, classifications, or divisions, and conclusory allegations of sex discrimination were not enough to bring a successful EPA claim which depends on comparison of actual job content. As pled, the EEOC complaint only suggested the possibility - rather than the plausibility - of an EPA violation.

Panel: Circuit Judges Livingston and Droney; District Judge Chen, sitting by designation.

Argument Date: 05/27/2014

Argument Location: New York

Date of Issued Opinion: 09/29/2014

Docket Number: No. 13-2705-cv

Decided: Affirmed

Case Alert Author: Justin J. Fung

Counsel: Julie L. Gantz (P. David Lopez, Lorraine C. Davis, and Daniel T. Vail on the brief), Equal Employment Opportunity Commission, Washington D.C., for Plaintiff-appellant.

Rosemary Alito (George Peter Barbatsuly on the brief), K&L Gates LLP, Newark, New Jersey, for Defendant-appellee.

Author of Opinion: Judge Livingston

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 09/29/2014 08:39 PM     2nd Circuit     Comments (0)  

September 18, 2014
  Second Circuit- Republic of Iraq v. ABB AG
Headline: Second Circuit Affirms Dismissal of Republic of Iraq's Claims Against Corporations and Individuals for Conspiring with Saddam Hussein During His Regime to Profit from the Humanitarian Oil-for-Food Programme.

Area of Law: RICO, International Law; Civil Procedure

Issue(s) Presented: Whether the post-Hussein Republic of Iraq may recover damages resulting from defendants' alleged conspiracy with the former Hussein Regime to illegally profit from the UN Oil-for-Food Programme.

Brief Summary: The Republic of Iraq filed a complaint against dozens of corporations and two individuals claiming that, over the last several years when Saddam Hussein ruled Iraq (the "Hussein Regime"), these defendants conspired with Hussein and plundered the humanitarian "oil for food program," giving rise to claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Foreign Corrupt Practices Act (FCPA), and common law. The United States District Court for the Southern District of New York dismissed the amended complaint, holding that the post-Hussein Republic of Iraq was in pari delicto with the Hussein Regime, and therefore could not recover under RICO, and that no private right of action exists under the FCPA. The district court declined to exercise supplemental jurisdiction on the common law claims. A divided panel affirmed. Judge Droney concurred in the FCPA holding, but dissented from the RICO holding.

The full text of the opinion may be found at:
http://www.ca2.uscourts.gov/de...bd1112c3f68/1/hilite/

Extended Summary: In response to Iraq's invasion of Kuwait in 1990, the United Nations Security Council imposed harsh economic sanctions against Iraq, calling on all states to embargo trade and financial transactions with Iraq. In 1991, the Security Council discovered immense suffering among the Iraqi people, and adopted a series of resolutions to allow Iraq's government led by Saddam Hussein (the "Hussein Regime") to sell oil in exchange for food and medicine. For several years, Hussein refused to meet the conditions set for the aid and the people of Iraq continued to suffer. In 1996, Hussein agreed to participate in the United Nation ("UN") Oil-for-Food Programme, which allowed the regime to sell oil to foreign purchasers and use the proceeds to purchase food and other humanitarian goods for the benefit of the Iraqi people.

Under the Programme, each purchase of Iraqi oil was required to disclose all the terms of the contract. The price of Iraqi oil was to be set each month by the UN. Hussein's Regime conspired with foreign allies purchasing the oil to provide market data reflecting artificially low oil rates, causing the UN to set the price of Iraqi oil below market value. The Regime's allies, five defendants characterized as "Oil Purchasing Defendants," then purchased Iraqi oil below market and immediately sold it at market for profit. In exchange, the allies paid surcharges to the Regime, rather than the Programme. Six of the defendants, banking entities, allegedly helped the Oil Purchasing Defendants hide transactions with the regime from the UN. The remaining "Vendor Defendants," were suppliers of humanitarian goods, who allegedly overcharged for their products, and delivered substandard products, then kicked-back part of the overage to Hussein's Regime.

In 2003, Hussein's Regime fell and the Oil-for-Food escrow account was dispersed to the post-Regime Republic of Iraq. The Republic discovered that billions of dollars had been siphoned from the humanitarian Oil-for-Food Programme to Hussein's Regime.

The Republic of Iraq filed a complaint against dozens of corporations and two individuals claiming that they had conspired with Hussein and plundered the humanitarian Oil-for-Food Programme, giving rise to claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Foreign Corrupt Practices Act (FCPA), and common law. The United States District Court for the Southern District of New York dismissed the amended complaint, holding the Republic of Iraq was in pari delicto with the Hussein Regime on the RICO claim and that there was no private right of action under the FCPA. The court declined to exercise supplemental jurisdiction on the common law claims.

A divided panel affirmed. The Second Circuit held for the first time that in pari delicto is an available defense to a private RICO claim. The in pari delicto defense reflects the principle that a plaintiff who participated equally in a wrongdoing may not recover damages resulting from the wrongdoing. The parties did not dispute the Hussein Regime's wrongdoing or role in the corruption, and the court held that the legal position of a foreign state survives changes in government. The majority rejected the Republic's argument that the Hussein Regime was illegal, noting that Hussein's title was President and he acted as the government of Iraq and was recognized as such by the United States and UN. The majority found that Hussein's Regime was the government of Iraq and that government instigated and was the dominant party in the frauds and breaches that corrupted the Oil-for-Food Programme and, accordingly, held that the district court properly attributed that wrongdoing to the Republic.

Judge Droney concurred with majority holding that no private right of action exists under the FCPA, but dissented from the court's RICO holding. Judge Droney distinguished between the Hussein Regime and the post-Hussein Republic and asserted that the Republic should not be treated as complicit in the fraud against the humanitarian effort. He reasoned that to do so would "release defendants of liability for conduct that, if true, constituted a clear violation of United States law and subversion of United States policy, and [] deprive the ultimate victims of the defendants' conduct of any remedy."

The full text of the opinion may be found at
http://www.ca2.uscourts.gov/de...bd1112c3f68/1/hilite/

Panel (if known): Circuit Judges Kearse, Winter, and Droney

Argument Date: 02/18/2014

Argument Location: New York, NY

Date of Issued Opinion: 09/18/2014

Docket Number: No. 13-0618

Decided: Affirmed

Case Alert Author: Joan O'Connor Archer

Counsel: MARK MANEY, Houston, Texas (Roliff Purrington, Maney & González-Félix, Houston, Texas; Stanley D. Bernstein, Christian Siebott, Bernstein Liebhard, New York, New York, on the brief), for Plaintiff-Appellant.
BRANT W. BISHOP, Washington, D.C. (Thomas D. Yannucci, John R. Bolton, Robert B. Gilmore, Kirkland & Ellis, Washington, D.C., on the joint brief), for Defendants-Appellees Siemens S.A.A. of France, Siemens Sanayi ve Ticaret A.S. of Turkey, and OSRAM Middle East FZE.
ROBERT S. BENNETT, Washington, D.C. (Christopher T. Handman, Ellen S. Kennedy, Hogan Lovells, Washington, D.C.; Jennifer L. Spaziano, Skadden, Arps, Slate, Meagher & Flom, Washington, D.C., on the joint brief), for Defendants-Appellees BNP Paribas USA, BNP Paribas (Suisse) SA, BNP Paribas Hong Kong, BNP Paribas Paris, BNP Paribas UK Holdings Limited, and BNP Paribas London Branch.
AXINN, VELTROP & HARKRIDER (John D. Harkrider, New York, New York, Gail L. Gottehrer, Hartford, Connecticut, on the joint brief), for Defendant-Appellee Secalt S.A.
WILLIAMS & CONNOLLY (Robert A. Van Kirk, Katherine M. Turner, Washington, D.C., on the joint brief), for Defendants-Appellees Textron, Inc., Union Pump S.A.S., and David Brown
Transmissions of France, S.A.
PILLSBURY WINTHROP SHAW PITTMAN (John F. Pritchard, Edward Flanders, Ranah L. Esmaili, New York, New York, on 1 the joint brief), for Defendants-Appellees Atlas Copco Airpower N.V. and Atlas Copco CMT.
KIRKLAND & ELLIS (James P. Gillespie, Karen McCartan DeSantis, Washington, D.C., on the joint brief), for Defendants-Appellees ABB AG, ABB Automation, ABB Elektric Sanayi AS, ABB Industrie AC Machines, ABB Industrie Champagne,and ABB Near East Trading Ltd.
TROUTMAN SANDERS (Elliot Cohen, New York, New York, on the joint brief), for Defendants-Appellees AGCO Denmark A/S,AGCO S.A., and Valtra do Brazil.
LEADER & BERKON (Michael J. Tiffany, New York, New York; Christopher S. Riley, Barnes & Thornburg, Elkhart, Indiana, on the joint brief), for Defendant-Appellee ABB Solyvent-Ventec.
BAKER & McKENZIE (Darrell Prescott, New York, New York, on the joint brief), for Defendant-Appellee Air Liquide Engineering.
COVINGTON & BURLING (Nancy Kestenbaum, New York, New York, Mark H. Lynch, Washington, D.C., on the joint brief), for Defendants-Appellees Akzo Nobel N.V., N.V. Organon, Intervet International B.V., Astra Zeneca AB., Cilag AG International, Janssen Pharmaceutical, and Merial.
ALSTON & BIRD (Karl Geercken, New York, New York, on the joint brief), for Defendants-Appellees B. Braun Medical France, B. Braun Melsungen A.G., B. Braun Medical Industries SDN BHD (Malaysia), Aesculap AG and KG, Aesculap Motric S.A., and Aesculap Surgical Instruments SDN.
CRAVATH, SWAINE & MOORE (Robert H. Baron, Timothy G. Cameron, New York, New York, on the joint brief), for Defendant-Appellee AWB, Ltd.
PARK & JENSEN (Tai H. Park, New York, New York, on the joint brief), for Defendant-Appellee Boston Scientific S.A.
PEPPER HAMILTON (Robert L. Hickok, Barak A. Bassman, Philadelphia, Pennsylvania, Kenneth J. King, New York, New York, on the joint brief), for Defendants-Appellees
GlaxoSmithKline Egypt SAE, Glaxo Wellcome Export Ltd.,Glaxo Wellcome SA (South Africa) (PRY) Ltd., and SmithKline Beecham International.
SPAGNOLETTI & CO. (Francis I. Spagnoletti, David S. Toy, Houston, Texas, on the joint brief), for Defendant-Appellee David B. Chalmers, Jr.
SHEARMAN & STERLING (Philip E. Urofsky, Washington, D.C., Danforth Newcomb, H. Miriam Farber, New York, New York, on the joint brief), for Defendants-Appellees Buhler Ltd.,
Daimler-Chrysler AG, ABG Allgemeine Baumaschinen-GesellschaftmbH, Sulzer Pumpen Deutschland GmbH, Sulzer Turbo Ltd., Renault Trucks SAS, Renault V.I., and Volvo
Construction Equipment AB.
JONES DAY (Meir Feder, Thomas E. Lynch, New York, New York, on the joint brief), for Defendant-Appellee Chevron Corp.
GIBBONS (Thomas R. Valen, Newark, New Jersey, on the joint brief), for Defendants-Appellees Daewoo International Corp. and Kia Motors.
FULBRIGHT & JAWORSKI (Mark A. Robertson, New York, New York, on the joint brief), for Defendant-Appellee El Paso Corp.
CADWALADER, WICKERSHAM & TAFT (Jason Jurgens, Nathan M. Bull, New York, New York, on the joint brief), for Defendant-Appellee Dow AgroSciences.
BOWIE & JENSEN (R. Michael Smith, Towson, Maryland, on the joint brief), for Defendant-Appellee Evapco Europe S.r.l.
KELLEY DRYE & WARREN (Thomas B. Kinzler, David Zalman, Melissa E. Byroade, New York, New York, on the joint brief), for Defendants-Appellees Flowserve Corp., Flowserve Pompes, and Flowserve B.V.
ROTHWELL, FIGG, ERNST & MANBECK (Robert P. Parker, Washington, D.C., on the joint brief), for Defendant-Appellee Ingersoll-Rand Benelux, N.V.
SIDLEY AUSTIN (Richard D. Klingler, Steven J. Horowitz, Washington, D.C., Dorothy J. Spenner, New York, New York, on the joint brief), for Defendants-Appellees Eli-Lilly Export
S.A., Ingersoll-Rand Italiana, SpA., Thermo King Ireland Limited, Ingersoll-Rand World Trade Ltd., and Novo Nordisk.
WILLCOX & SAVAGE (Brett A. Spain, Norfolk, Virginia, on the joint brief), for Defendants-Appellees Liebherr Export AG and Libher France, SA.
NIXON PEABODY (Michael S. Cohen, Jericho, New York, on the joint brief), for Defendant-Appellee Serono Pharma International.
EPSTEIN BECKER & GREEN (Peter L. Altieri, David J. Clark, New York, New York, on the joint brief), for Defendant-Appellee Railtech International.
HARKINS CUNNINGHAM (John G. Harkins, Jr., Philadelphia, Pennsylvania, on the joint brief), for Defendant-Appellee Rohm and Haas France, S.A.
ALSTON & BIRD (John P. Doherty, New York, New York, on the
joint brief), for Defendant-Appellee Pauwels.
DAVIS POLK & WARDWELL (Brian S. Weinstein, New York, New York, Jason McCullough, Washington, D.C., on the joint brief), for Defendants-Appellees F. Hoffman La Roche and
Roche Diagnostics GmbH.
BAKER & HOSTETLER (Gregory L. Baker, Washington, D.C., on the joint brief), for Defendant-Appellee Solar Turbines Europe.
CARTER LEDYARD & MILBURN (Judith A. Lockhart, New York, New York, on the joint brief), for Defendant-Appellee St. Jude Medical Export GmbH.
DRINKER BIDDLE & REATH (Clay J. Pierce, New York, New York, on the joint brief), for Defendant-Appellee Renault Agriculture & Sonalika International.
CANALES & SIMONSON (J.A. Canales, Corpus Christi, Texas, on the joint brief), for Defendant-Appellee Oscar S. Wyatt, Jr.
BAKER & McKENZIE (Larence Walker Newman, New York, New York, on the joint brief), for Defendant-Appellee Sulzer Burckhardt Engineering Works Ltd.
JONES DAY (Michael H. Ginsberg, Pittsburgh, Pennsylvania, on the joint brief), for Defendant-Appellee The Weir Group.
SULLIVAN & CROMWELL (Penny Shane, Andrew P. Giering, New York, New York, on the joint brief), for Defendant-Appellee Vitol, S.A.
K&L GATES (Walter P. Loughlin, New York, New York; Andrew Siegel, Christopher A. Payne, Sandler Siegel, Dallas, Texas, on the joint brief), for Defendant-Appellee Woodhouse
International.
REED SMITH (Casey D. Laffey, New York, New York, on the joint brief), for Defendant-Appellee York Air Conditioning and Refrigeration FZE.

Author of Opinion: Judge Kearse (for the majority); Judge Droney (concurs in part, dissents in part)

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

Edited: 09/19/2014 at 06:27 AM by Elyse Diamond

    Posted By: Elyse Diamond @ 09/18/2014 08:52 PM     2nd Circuit     Comments (0)  

April 24, 2014
  European Community v. RJR Nabisco
Case Name: European Community v. RJR Nabisco

Headline: Second Circuit Holds That Racketeer Influenced and Corrupt Organizations (RICO) Statute Can Apply Extraterritorially, Reinstating European Community's Claims Against RJR Nabisco

Area of Law: International Criminal Law

Issue(s) Presented: Whether the claims brought against RJR Nabisco by the European Community and 26 of its member states under the Racketeer Influenced and Corrupt Organizations ("RICO") statute are impermissibly extraterritorial, and whether the European Community qualifies as an organ of a foreign state for purposes of diversity jurisdiction.

Brief Summary: The European Community and 26 of its member states sued RJR Nabisco ("RJR") under RICO, alleging that RJR had facilitated a worldwide money-laundering scheme in connection with organized crime groups, laundered money through New York financial institutions, and committed common law torts in violation of New York law. The United States District Court for the Eastern District of New York dismissed the complaint on the grounds that the RICO statute has no extraterritorial application, and also dismissed the state law claims on the grounds that the European Community did not qualify as an organ of a foreign state under 28 U.S.C. §§ 1322, 1603, which "deprived the court of jurisdiction over the state law claims." The Second Circuit disagreed, vacating the judgment below and remanding the case to go forward. In regard to the RICO issue, the Second Circuit held that Congress had clearly manifested an intent for RICO to apply extraterritorially in the type of circumstances alleged here. The Second Circuit further held that the European Community qualified as a "foreign state" under 28 U.S.C. § 1332(a)(4), and "its suit against 'citizens of a State or of different States' comes within the diversity jurisdiction." To read the full opinion, please visit http://www.ca2.uscourts.gov/de...5f17e650ebd/1/hilite/

Extended Summary: The plaintiffs alleged that RJR directed and controlled a money-laundering scheme that involved a multi-step process. According to the complaint, Colombian and Russian organized criminal entities smuggled illegal narcotics into Europe. They then sold the drugs, making a profit in euros, which they laundered through money brokers who changed the euros into the "domestic currency of the criminal organizations' home countries." The money brokers then sold the euros money to cigarette importers at a discounted rate. Next, the cigarette importers would use these euros to purchase RJR's cigarettes from wholesalers, who obtained their cigarette supply from RJR. The plaintiffs contended that RJR directed and controlled this money-laundering scheme, thereby committing racketeering acts that violated the RICO statute "including mail fraud, wire fraud, money laundering, violations of the Travel Act, 18 U.S.C. § 1952, and providing material support to foreign terrorist organizations." They also alleged that RJR violated New York state law by committing fraud, unjust enrichment, public nuisance, negligence, negligent misrepresentation, conversion, and money had and received.

The district court dismissed the complaint, holding that RICO did not apply to activity outside the territory of the United States and could not apply to a foreign enterprise. The court further held that it lacked jurisdiction to hear the remaining state law claims because the European Community did not qualify as a "foreign state" under federal law, and therefore there was not complete diversity between the parties.

On appeal, the Second Circuit rejected both conclusions. First, as to the RICO claim, the court held that
when a RICO claim depends on violations of a predicate statute that itself manifests an unmistakable congressional intent to apply extraterritorially, RICO will apply to that conduct as well. Conversely, when a RICO claim depends on violations of a predicate statute that does not clearly apply to extraterritorial conduct, RICO will not apply extraterritorially either. "In all cases, what constitutes sufficient domestic conduct to trigger liability is the same as between RICO and the predicate that forms the basis for RICO liability," the court held. The court further held that the money laundering and material support of terrorism statutes both applied extraterritorially in circumstances such as those alleged in the complaint. The court added that although the wire fraud, money fraud, and Travel Act statutes did not apply extraterritorially, the plaintiffs' RICO claims based on those predicates also applied here because the plaintiffs had alleged that the elements of those statutes were violated in the United States. Accordingly, the plaintiffs' claims could go forward.

Second, the Second Circuit held that the European Community (which, after the lawsuit was filed, was incorporated into the European Union) qualified as a "foreign state." Specifically, the court deemed the European Community an "organ of a foreign state," and "thus an agency or instrumentality of a foreign state" under the relevant statutory provisions. The Second Circuit used the five factors set forth in Filler v. Hanvitt Bank, 378 F.3d 213, 217 (2d Cir. 2004) to determine whether or not the Plaintiff is considered an "organ". These five factors are: (1) whether the foreign state create the entity for a national purpose; (2) whether the foreign state actively supervises the entity; (3) whether the foreign state requires the hiring of public employees and pays their salaries; (4) whether the entity holds exclusive rights to some right in the [foreign] country; and (5) how the entity is treated under foreign state law. It concluded that the European Community satisfied most, if not all, of these factors.
To read the full opinion, please visit http://www.ca2.uscourts.gov/de...5f17e650ebd/1/hilite/

Panel: Judges Leval, Sack, and Hall.

Argument: 02/24/2012

Date of Issued Opinion: 04/23/2014

Docket Number: 11-2475-cv

Decided: Vacated and remanded.

Case Alert Author: Amy Stein

Counsel: John J. Halloran, Jr., Speiser, Krause, Nolan & Granito, for the Plaintiff-Appellants. Gregory G. Katsas, Jones Day, for the Defendants - Appellees.

Author of Opinion: Judge Leval

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 04/24/2014 02:20 PM     2nd Circuit     Comments (0)  

April 22, 2014
  The New York Times Company v. United States - Second Circuit
Headline: Second Circuit Reverses District Court in Part, Requiring Limited Disclosure of Classified Government Documents Pertaining to Legal Justification for Use of Drones for Targeted Killings of United States Citizens in Response to New York Times and ACLU FOIA Requests

Area of Law: Freedom of Information Act

Issue(s) Presented: Whether United States agency responses to FOIA requests, seeking documents related to the United Stated government's justification for a 2011 targeted drone strike killing three United States citizens in Yemen, one of whom the government claimed was a member of Al Qaeda, which refused to disclose responsive documents on grounds that they were classified, privileged, or met other FOIA exemptions and, in some cases, refused to admit or deny the existence of potentially responsive documents, were lawful?

Brief Summary: Plaintiffs, The New York Times, two of its reporters, and the American Civil Liberties Union, brought suit against the Department of Justice (DOJ), the Department of Defense, and the Central Intelligence Agency for failing to adequately respond to Freedom of Information Act (FOIA) requests for documents pertaining to the justification for the government's use of drone attacks that killed three American citizens in 2011. The United States District Court for the Southern District of New York granted the government's motion for summary judgment, dismissing the challenge to the FOIA responses, and the plaintiffs appealed. The Second Circuit affirmed in part, reversed in part, and remanded the case, holding that the government should be required to disclose a classified memorandum prepared by the DOJ's Office of Legal Counsel setting out the legal justification for the drone killings and to submit certain indices of relevant documents to the district court for review of their privilege and exclusion claims.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...006f148ca16/1/hilite/

Extended Summary: Plaintiffs-Appellants, The New York Times Company, two New York Times reporters, Charlie Savage and Scott Shane, and The American Civil Liberties Union (ACLU) (collectively, "Plaintiffs"), submitted Freedom of Information Act (FOIA) requests to the United States Department of Justice (DOJ), the United States Department of Defense (DOD), and the Central Intelligence Agency (CIA) (collectively, "the Government") seeking information concerning the legal justification for targeted drone strikes that killed three United States citizens, Anwar al-Awlaki and Samir Khan, along with Anwar al-Awaki's teenage son, Abdulrahman al-Awlaki, in Yemen in 2011. The DOJ's Office of Legal Counsel (OLC) denied some of the FOIA requests on the grounds that the requested documents were exempt from disclosure pursuant to FOIA exclusions for documents properly classified in the interest of national defense or foreign policy (exemption 1), records specifically exempted by statute - here, the Central Intelligence Agency Act of 1949 or National Security Act of 1947 (exemption 3) - or otherwise exempt as agency memoranda "not available by law to a party other than an agency in litigation with the agency" (exemption 5). The OLC also neither admitted nor denied the existence of other requested documents, asserting the existence or nonexistence of such documents was itself classified. Plaintiffs brought suit in the United States District Court for the Southern District of New York challenging the denials of the requests and the suits were later consolidated. The parties made cross motions for summary judgment and the district court granted Defendants' motions for summary judgment. After the district court entered judgment for Defendants, certain government documents were leaked and then subsequently released by the government, affirming the existence of a classified DOD-OLG memorandum and other documents that were responsive to Plaintiffs' requests.

The Second Circuit began by noting that the FOIA calls for broad disclosure of government records, but also sets out several exemptions to the required disclosure. The Second Circuit affirmed the district court's finding that the search undertaken for responsive documents was sufficient and agreed that the Government was not required to provide to the ACLU certain requested legal memoranda which were very brief, informal and pre-decisional, and constituted personal opinions of the writer. The Second Circuit reversed the district court in part, however, determining that the government should be required to disclose, in redacted form, a classified memorandum - the "OLC-DOD Memorandum" - that set out the OLC's confidential legal advice to the Attorney General relating to the use of drones for targeted killings, and to submit certain indices of relevant documents to the district court for review of their privilege and exclusion claims.

Specifically, the Second Circuit held that the government waived its right to withhold the "OLC-DOD Memorandum" under exemptions 1 and 5 as protected by the deliberative process and attorney-client privileges and as information about military operations, intelligence methods, and foreign relations activities by disclosing portions of the contents of the Memorandum in public statements and in its release of a classified "White Paper" to the public, following a leak of this document, in a public relations effort to convince the public of the lawfulness of the killing of al-Awlaki. The Second Circuit rejected the Government's contention that disclosure of the OLC-DOD Memorandum would inhibit agencies from seeking OLC's legal advice, reasoning that upholding that rationale would effectively mean a waiver of privileges protecting legal advice could never occur. The Second Circuit also rejected the Government's contention that the LOC-DOD Memorandum contents could not be understood without reference to other classified documents and found that, under the FOIA, a redacted version of the document should be provided after deletion of portions exempt under the statute.

The Second Circuit also ordered the Government to disclose indices listing certain documents, the existence of which the Government previously declined to confirm or deny and required the Government to submit other indices to the district court for in camera review on remand for review of claims of exemption and privilege.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...006f148ca16/1/hilite/

Panel:
Circuit Judges Newman, Cabranes, and Pooler

Argument Date:
10/1/2013

Date of Issued Opinion:
4/21/2014

Docket Number
: Nos. 13-422(L), 13-445(Con).

Decided: Affirmed in part, reversed in part, and remanded

Case Alert Author: Gillian Kirsch

Counsel: David E. McCraw, The New York Times Company, New York, N.Y. (Stephen N. Gikow, New York, N.Y., on the brief), for Plaintiffs-Appellants The New York Times Company, Charlie Savage, and Scott Shane. Jameel Jaffer, American Civil Liberties Union Foundation, New York, N.Y. (Hina Shamsi, Brett Max Kaufman, American Civil Liberties Union Foundation, New York, N.Y., Joshua Colangelo-Bryan, Dorsey & Whitney LLP, New York, N.Y., Eric Ruzicka, Colin Wicker, Dorsey & Whitney LLP, Minneapolis, MN., on the brief), for Plaintiffs-Appellants American Civil Liberties Union and American Civil Liberties Union Foundation.

Sharon Swingle, U.S. Appellate Staff Atty., Washington, D.C. (Preet Bharara, U.S. Atty., Sarah S. Normand, Asst. U.S. Atty., New York, N.Y., Stuart F. Delery, Acting Asst. U.S. Atty. General, Washington, D.C., on the brief), for Defendants-Appellees.

(Bruce D. Brown, Mark Caramanica, Aaron Mackey, The Reporters Committee for Freedom of Press, Arlington, V.A., for amicus curiae The Reporters Committee for Freedom of Press, in support of Plaintiffs-Appellants.) (Marc Rotenberg, Alan Butler, Ginger McCall, David Brody, Julia Horwitz, Electronic Privacy Information Center, Washington, D.C., for amicus curiae Electronic Privacy Information Center, in support of Plaintiffs-Appellants.)

Author of Opinion: Judge Jon O. Newman

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 04/22/2014 08:43 AM     2nd Circuit     Comments (0)  

April 9, 2014
  Schoenefeld v. State of New York, et al. - Second Circuit
Headline: Second Circuit Suggests that New York Law Requiring Nonresident Attorneys to Maintain an Office in New York to Practice in New York Courts Could Violate Privileges and Immunities Clause of U.S. Constitution and Certifies Question to New York Court of Appeals for Resolution of Determinative Issue

Area of Law: Constitutional

Issue(s) Presented: Whether a New York State law requiring attorneys who are admitted to practice in New York but reside out of state to maintain an office for the transaction of law business in New York violates the Privileges and Immunities Clause of the United States Constitution

Brief Summary: Plaintiff-appellee, Ekaterina Schoenefeld, is a lawyer admitted to practice law in both New York and New Jersey and maintains her residence and law office in New Jersey. Schoenefeld brought an action suing the State of New York, among others, challenging the constitutionality of New York Judiciary Law § 470 ("Section 470"). Section 470 requires nonresident attorneys to maintain an "office for the transaction of law business" in New York in order to practice law in New York courts. Schoenefeld argued that this law violates the Privileges and Immunities Clause of the United States Constitution by infringing upon her fundamental right to practice law. The defendants argued that the office requirement in Section 470 might be satisfied with something less than maintenance of a physical office in New York and therefore does not treat New York and out-of-state attorneys differently and, in the alternative, even if it does, it imposes "an incidental burden" that is substantially related to adequate state interests. The United States Court of Appeals for the Second Circuit found that the office requirement appears to implicate the Privileges and Immunities Clause, however, certified to the New York Court of Appeals the question of "what minimum requirements are necessary to satisfy th[e] mandate" in Section 470 that nonresident attorneys keep an "office for the transaction of law business."

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...2b08e637b2d/2/hilite/

Extended Summary: Plaintiff-appellee, Ekaterina Schoenefeld is a solo practitioner licensed to practice law in New Jersey and maintains her residence and law office in Princeton, New Jersey. She is also licensed to practice law in the State of New York and claims that on occasion prospective clients have requested that she represent them in New York state courts. Schoenefeld, however, has refused these occasional requests because she believes that her representation of clients in New York state courts would violate New York Judiciary Law § 470 ("Section 470").

New York Judiciary Law § 470 ("Section 470") provides that "[a] person, regularly admitted to practice as an attorney and counselor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counselor, although he resides in an adjoining state." In other words, Section 470 appears to prohibit attorneys that do not reside in New York from practicing law in New York state courts unless they also have an "office for the transaction of law business within the state," which Schoenefeld did not have. Schoenefeld brought an action in the Southern District of New York, arguing that Section 470 was unconstitutional under the Privileges and Immunities Clause, the Equal Protection Clause and the Commerce Clause. The case was subsequently transferred to the Northern District of New York, which held that Section 470 violated the Privileges and Immunities Clause and granted Schoenefeld's cross-motion for summary judgment.

The Second Circuit began by discussing the protection afforded under the Privileges and Immunities Clause. Under the clause, citizens in each state are entitled to "all Privileges and Immunities of Citizens in the several States." According to the Second Circuit, the right to practice law is one such privilege protected under the Clause and, therefore, plaintiff could prevail if she could demonstrate that New York has, in fact, discriminated against nonresident attorneys with regard to this privilege that it accords its own citizens. To then defeat this showing, New York has to demonstrate: "a substantial reason for the discrimination, and [] a reasonable relationship between the degree of discrimination exacted and the danger sought to be averted by enactment of the discriminatory statute." In its analysis, the Second Circuit suggested that the Section 470 "office for transacting business within the state" requirement implicates the Privileges and Immunities Clause because there is no New York law requiring in-state attorneys to maintain an office in New York.

The defendants argued that Section 470 can be read in a manner that does not implicate the Privileges and Immunities Clause. According the defendants, the only requirement imposed by Section 470's language "an office for the transaction of law business" is an address for accepting personal service and simply designating an agent for the service of legal papers could satisfy this requirement." The Second Circuit noted, though, that the New York Supreme Court and its Appellate Division courts have never interpreted the Section 470 "office for the transaction of business" requirement to be satisfied by something less than the maintenance of physical office space in New York. Moreover, because the New York Court of Appeals has never before interpreted the Section 470 office requirement, the Second Circuit found it could not predict how the Court of Appeals would resolve the issue. Concluding that this issue is important to the state, would require value judgments and public policy choices, and is determinative of the plaintiff's claim, the Second Circuit chose to certify the question to the New York Court of Appeals. The specific question certified is as follows: "Under New York Judiciary Law § 470, which mandates that a nonresident attorney maintain an "office for the transaction of law business" within the state of New York, what are the minimum requirements necessary to satisfy that mandate?"

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...2b08e637b2d/2/hilite/


Panel: Circuit Judges Raggi, Hall and Carney

Argument Date: 10/3/2012

Date of Issued Opinion: 4/8/2014

Docket Number: No. 11-4283-cv

Decided: Certified Question to New York Court of Appeals

Case Alert Author(s): Christopher Roma

Counsel: Ekaterina Schoenefeld, for Plaintiff-Appellee; Laura Etlinger, Assistant Solicitor General, for Defendants-Appellants

Author of Opinion: Circuit Judge Hall

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 04/09/2014 07:55 AM     2nd Circuit     Comments (0)  

April 4, 2014
  Bronx Household v. Board of Education
Case Name: Bronx Household v. Board of Education

Headline: Second Circuit Reinstates New York City Board of Education's Restriction on the Use of School Facilities for Religious Worship

Area of Law: Constitutional

Issue(s) Presented: Whether a New York City Board of Education regulation that makes school facilities available outside of school hours for use by outside groups, but prohibits such facilities' use for religious worship services, violates the Establishment Clause or the Free Exercise Clause.

Brief Summary: The New York City Board of Education has been involved in longstanding litigation over its policy of making school facilities available for after-hours and weekend use by outside entities, while limiting such usage for religious purposes. The current version of its policy provides that no permits shall be granted to outside entities seeking to use school facilities for "the purpose of holding religious worship purposes." The Bronx Household of Faith, which had previously unsuccessfully challenged this policy on Free Speech grounds, sought a preliminary injunction on grounds that the policy violated the Free Exercise Clause. The United States District Court for the Southern District of New York granted the requested injunction, but the Second Circuit reversed, holding - in its sixth ruling on this controversy - that the policy violated neither the Free Exercise nor the Establishment Clauses of the First Amendment. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...8367b/2/hilite/


Extended Summary: Regulations promulgated by the New York City Board of Education allow outside groups to use school facilities outside of school hours, without requiring them to pay rent. The regulations specify, however, that "No permit shall be granted for the purpose of holding religious worship services, or otherwise using a school as a house of worship."

The Bronx Household of Faith, which has long sought to hold worship services in New York City public school facilities, challenged its exclusion in 2007 (after previously challenging earlier versions of this rule). It was successful in the United States District Court for the Southern District of New York, which ruled that the regulation violated the Free Speech Clause of the First Amendment. The Second Circuit, however, reversed this ruling and held that the regulation did not violate Bronx Household's free speech rights.

On remand to the district court after the Second Circuit vacated its previous victory, Bronx Household again moved for a preliminary injunction against enforcement of the regulation prohibiting worship services. Bronx Household argued that the prior ruling had only focused on its Free Speech argument, and had not passed on its separate Free Exercise argument. The district court ruled in its favor, holding that the exclusion of religious worship services violated both the Free Exercise Clause and the Establishment Clause. The district court thus enjoined the regulation once again.

The Second Circuit, however, again reversed the district court's ruling, thus lifting the injunction and permitting the regulation to be enforced. The Second Circuit held that (1) "the Free Exercise Clause does not entitle Bronx Household to a grant from the Board of a subsidized place to hold religious worship services;" and (2) the district court erred in concluding that the regulation had violated the Establishment Clause by "compel[ling] the Board to become excessively entangled with religion by deciding what are religious worship services." As to the Free Exercise claim, the court explained that the regulation was treating all religions equally and that the Board's only motivation had been to "protect itself against reasonable Establishment Clause challenges" by declining to provide rent-free premises for religious worship services. As to the Establishment Clause issue, the Second Circuit reasoned that the Board was not violating the Establishment Clause merely by assessing whether a specific group was conducting religious worship services; rather, this Clause "at times compels government officials to undertake such inspection in order to draw constitutionally necessary distinctions," and in any case, the Board's policy "is to rely on the applicant's own characterization as to whether the applicant will conduct religious worship services."

Accordingly, the Second Circuit vacated the injunction imposed by the District Court of the Southern District of New York, allowing the Board's regulation to remain in effect. Judge Walker dissented, as he had done in the prior Second Circuit opinion, reiterating his conclusion that the policy violated the Free Speech Clause, and also arguing that it violated the Free Exercise Clause. Judge Walker concluded that both the Free Speech and the Free Exercise issues were "ripe for Supreme Court review."

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...8367b/2/hilite/



Panel: Judges Walker, Leval, and Calabresi

Argument (if known): 11/19/2012

Date of Issued Opinion: 04/03/2014

Docket Number: 12-2730-cv

Decided: Reversed.

Case Alert Author: Sophia Sofferman

Counsel: Jordan W. Lorence, (Joseph P. Infranco, Alliance Defending Freedom, Washington, DC; David A. Cortman, Alliance Defending Freedom, Lawrenceville, GA; David J. Hacker, Heather Gebelin Hacker, Alliance Defending Freedom, Folsom, CA, on the brief), Alliance Defending Freedom, Washington D.C., for Appellees - Plaintiffs.

Jane L. Gordon (Edward F.X. Hart, Jon Pines, Lisa Grumet, Janice Casey Silverberg, Charles Carey, on the brief), of counsel, for Michael A. Cardozo, Corporation Counsel of the City of New York, New York, NY, for Appellants - Defendants.

Author of Opinion: Judge Leval (majority); Judge Walker (dissent).

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 04/04/2014 10:21 AM     2nd Circuit     Comments (0)  

March 26, 2014
  United States v. Gupta -- Second Circuit
Headline: Second Circuit Affirms Rajat Gupta's Securities and Conspiracy Convictions

Area of Law: Securities Law

Issue(s) Presented: Whether the district court erred in admitting statements of defendant's coconspirator and excluding evidence offered by the defense.

Brief Summary: Rajat Gupta, formerly a member of the Goldman Sachs Board of Directors, was charged with providing inside information to Raj Rajaratnam knowing that the information would be used to buy and sell securities. A jury in the Southern District of New York convicted Gupta of four of the six counts against him, including conspiracy to commit securities fraud and three substantive counts of fraud. On appeal to the Second Circuit, Gupta contended that the trial court erred by admitting wiretapped conversations to which Gupta was not a party, and by excluding evidence offered by the defense. The Second Circuit rejected these arguments and affirmed the conviction. To read the whole opinion, please visit http://www.ca2.uscourts.gov/de...9783e2d8b6f/3/hilite/

Extended Summary: Rajat Gupta, a former member of the Board of Directors of Goldman Sachs, was involved in several financial ventures with Raj Rajaratnam, founder of the Galleon Group, which was the subject of a government investigation of insider trading. This investigation uncovered evidence that Gupta was supplying Rajaratnam with inside information about Goldman Sachs. As a result, Gupta was charged with six counts of securities law violations, on grounds that Gupta, Rajaratnam, and others conspired to commit securities fraud; that Gupta disclosed inside information to Rajaratnam knowing that he would use the information to buy and sell securities.
Gupta was convicted in the United States District Court for the Southern District of New York of securities fraud and conspiracy to commit securities fraud based on insider trading. The majority of the evidence that supported this conviction was circumstantial, consisting of testimony, wiretapped phone calls, and records of phone calls. In his defense, Gupta called witnesses to testify as to his character and introduced evidence suggesting that it was a different Goldman Sachs insider who supplied Rajaratnam with the confidential information.
After being convicted, Gupta was sentenced to 24 months' imprisonment, to be followed by a one year term of supervised release, and was ordered to pay restitution in the amount of $6,218,223.59. On appeal, Gupta argued that Rajaratnam's wiretapped conversations were inadmissible hearsay; that the trial court erred in curtailing evidence proffered by Gupta in his defense; and that the errors, either singly or in combination, entitle him to a new trial. The Second Circuit rejected these arguments and affirmed the District Court's conviction.
Gupta first contended that the wiretap authorizations were obtained in violation of Title III of the Omnibus Crime Control and Safe Streets Act of 1968 and the Fourth Amendment to the Constitution. The Second Circuit, however, rejected these arguments. Secondly, Gupta challenged the admission of the wiretapped conversations between Rajaratnam and other individuals on the grounds that the tapes are hearsay. The Second Circuit found that the lower court had not abused its discretion in finding that the tapes were admissible both as nonhearsay statements in furtherance of the Rajaratnam-Gupta conspiracy and under the exception for statements against penal interest.
Gupta further contended that he was entitled to a new trial on the ground that the district court unduly limited evidence proffered by the defense to show that any communication by Gupta of inside information to Rajaratnam was improbable. The Second Circuit found that the district court did not abuse its discretion in limiting this evidence; rather. the district court made a proper Rule 403 assessment that the evidence, if admitted, would have been unduly prejudicial and confusing to the jury. The court also concluded that if the limitation on the testimony was error, the error was harmless.
Gupta also challenged the lower court's refusal to admit documents that may have shown that another Goldman Sachs employee was responsible for providing Rajaratnam with the inside information, arguing that "the accused may introduce any legal evidence tending to prove that another person may have committed the crime with which the defendant is charged." The lower court had found that the proffered evidence was replete with inadmissible hearsay, suffered from a lack of foundation, and that in the absence of explanatory testimony by a witness the jury would be unable to understand the documents without representations by counsel or speculation, either of which would be improper. The Second Circuit agreed, concluding that the district court did not err in refusing to admit the evidence, especially in light of Gupta's intention to rely solely on the documents themselves, rather than call a witness to lay a foundation for these documents.
The Second Circuit also agreed with the district court's finding that evidence of Gupta's intention to give money to charity was inadmissible hearsay, would be unduly confusing and prejudicial, and its admission unjustified under Rule 106. Moreover, the Second Circuit did not find that the lower court abused its discretion in prohibiting Gupta from questioning witnesses about his "integrity." Lastly, the Second Circuit, again agreeing with the district court, reiterated that it is settled law in the Second Circuit that an instruction that character testimony may by itself raise a reasonable doubt is not required and declined to reconsider that rule.

Panel (if known): Newman, Kearse, and Pooler.

Argument Date: May 21, 2013

Argument Location: New York, NY

Date of Issued Opinion: March 25, 2014

Docket Number: No. 12-4448

Decided: Affirmed

Case Alert Author: Gillian Kirsch

Counsel: Richard C. Tarlowe, Assistant United States Attorney, New York, New York, for Appellee. Seth P. Waxman, Wilmer Cutler Pickering Hale & Dorr, Washington, D.C., for the Defendant-Appellant.

Author of Opinion: Kearse

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 03/26/2014 08:19 AM     2nd Circuit     Comments (0)  

March 18, 2014
  Price Trucking Corp. v. Norampac Industries, Inc. - Second Circuit
Headline: Second Circuit Reverses, Holding CERCLA Does Not Give Subcontractor Right to Sue Landowner Directly For Unpaid Fees Owed to Subcontractor by General Contractor

Issue(s) Presented: Does CERCLA create direct liability between a land owner and a subcontractor for cleanup performed by the subcontractor on a CERCLA remediation site when the owner has paid the general contractor in full for the subcontractor's work?

Brief Summary: The defendant landowner, Norampac Industries, appealed a grant of a summary judgment by the United States District Court for the Western District of New York to plaintiff, Price Trucking. Price Trucking was a subcontractor to the general contractor, AAA Environmental Inc., in a Brownfield remediation cleanup of Norampac's Erie County property. Norampac paid AAA Environmental in full for work, but AAA failed to pay monies owed to subcontractor Price Trucking for the work performed. Price Trucking brought this action asserting liability under the Comprehensive Environmental Response, Compensation, and Liability Act's ("CERCLA") liability provision, codified at 42 U.S.C. § 9607.

The Second Circuit reversed the grant of summary judgment motion and remanded the case. The court held that to make the landowner owner essentially a surety for contractors, subcontractors, employees, or suppliers is beyond the scope of Congress's intent in enacting CERCLA. The court found that CERCLA's purpose is to ensure that landowners accept responsibility and pay for these actions, and Norampac had done so upon completing the cleanup and ensuring that the contracted party was paid. The Second Circuit also reasoned that Congress did not intend to upend state law by providing a separate remedy to the normal method in which subcontractors and contractors seek to be paid.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...c470529bbb1/1/hilite/

Extended Summary: Norampac Industries, Inc. ("Norampac") owned land in Erie County, New York which contained levels of lead and other contaminants exceeding the maximums set by the New York State Department of Environmental Conservation ("DEC"). The company entered into a Brownfield Site Cleanup agreement with the DEC and contracted with AAA Environmental, Inc. to perform the remedial work. AAA Environmental subsequently subcontracted with Price Trucking, the plaintiff, to transport and dispose of the contaminated soil from the site.

Initially, AAA Environmental paid Price Trucking for all services rendered, but on October 6, 2008 the payments stopped. AAA Environmental refused to pay any outstanding invoices, and Price Trucking in turn refused to keep working unless Norampac paid them directly. Norampac agreed to this agreement and Price Trucking continued working until completion. After work was completed, Price Trucking was unable to recover the payments due from AAA Environmental. Price Trucking instituted this suit in the United States District Court for the Western District of New York against Norampac for its unpaid bills premised on the Comprehensive Environmental Response, Compensation, and Liability Act's ("CERCLA") liability provision, codified at 42 U.S.C. § 9607.

In March 2010, Price Trucking moved for partial summary judgment on the issue of liability, and District Court adopted the findings of the Magistrate Judge and found in favor of Price Trucking. There were several concurrent state court cases which affected the damages in this case, but the appeal in front of the Second Circuit dealt solely with the issue of liability.

The Second Circuit initially outlined the primary purposes of CERCLA as "encourage[ing] the timely cleanup of hazardous waste sites; and [placing] the cost of that cleanup on those responsible for creating or maintaining the hazardous condition." The parties stipulated that the defendant met the elements required to impose strict liability under CERCLA and, thus, the court concluded that the issue in the case was whether the landowner had discharged his liability under CERCLA by making payments to the general contractor which included the amounts due for work done by the subcontractor. Norampac argued that its CERCLA liability was satisfied when the response was complete and once it had made all payments pursuant to the applicable contracts entered into to effect the cleanup. Price Trucking argued that liability remained until all parties who contributed to cleanup were made whole for all costs of their work.

The Second Circuit disagreed with the District Court and held that CERCLA does not require the landowner to ensure that all subcontractors are made whole for the work they perform. The court first notes that nothing under 42 U.S.C. § 9607(a), CERCLA's liability provision, on its face provides assistance in determining the extent of a party's liability. The court instead looked to the purpose of CERCLA's liability provision in making its determination, stating that it was enacted "with the expansive, remedial purpose of ensuring that those responsible for any damage, environmental harm, or injury from chemical poisons bear the costs of their actions" and accomplishes these purposes by imposing a "strict liability regime . . . without regard to fault or negligence." The court continued by stating that "CERCLA's purposes are served when landowners and others who profit from hazardous activities are made to bear the costs of accidents on their land."

In this case, the Second Circuit reasoned that through Norampac's actions and payments, it had accepted responsibility and paid for its actions, and Price Trucking's attempt to treat Norampac "as though it were a surety to its subcontract with AAA Environmental . . . pushes the terms of CERCLA beyond their intended assignment of responsibilities." The Second Circuit ultimately held that "CERCLA is not designed to hold the responsible party perpetually liable as a surety in any dispute relating to the clean up between or among contractors, subcontractors, employees, or suppliers."

The Second Circuit went on to address the role of state law in providing resolution for disputes such as this. Common law in New York addresses a subcontractor's right to remedy for nonpayment by a general contractor by providing that subcontractor's cannot assert a cause of action against one who they are not in privity with, and cannot place a mechanic's lien on property unless the owner has not yet paid a general contractor for the work done. The court reasoned that Congress did not intend for CERCLA to upend these longstanding principles. Furthermore, the court stated that neither CERCLA's terms or legislative history suggest that "the statute is meant to provide a substitution for the usual manner in which contractors and subcontractors are paid." The Second Circuit offered a disclaimer, noting that its holding does not suggest that private contractors and subcontractors cannot bring recovery actions, but rather reminds that this can only be done under certain circumstances that did not exist in this case.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...c470529bbb1/1/hilite/

Panel: Chief Circuit Judge Katzmann, Circuit Judges Straub and Sack

Argument: 9/24/2012

Date of Issued Opinion: 3/18/2014

Docket Number: 11-2917-cv

Decided: Reversed and Remanded

Case Alert Author: David Restrepo

Counsel: John Gilbert Horn (Craig A. Slater, of counsel), Harter Secrest & Emery LLP, Buffalo, N.Y., for Appellant. Kevin M. Hogan, Phillips Lytle LLP (Patricia A. Manabelli, of counsel), Buffalo, N.Y., for Appellee.

Author of Opinion: Circuit Judge Sack

Case Alert Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 03/18/2014 03:13 PM     2nd Circuit     Comments (0)  

March 12, 2014
  Hizam v. Kerry - Second Circuit
Headline: The Second Circuit Reverses Order Mandating that the State Department Return Documentation of Citizenship Erroneously Granted to Plaintiff by State as a Child, Despite Plaintiff Having Spent Years Building a Life in the United States in Reliance on the Erroneous Documentation of his United States Citizenship

Area of Law: Immigration; Nationality and Naturalization

Issue(s) Presented: Whether the State Department improperly revoked plaintiff's documentary proof of citizenship, a Consular Report of Birth Abroad (CRBA) and passport, that were issued to him as a child erroneously due to a State Department error and upon which he relied in establishing a life in the United States and in forgoing other paths to citizenship?

Brief Summary: The Secretary of State and United States Department of State appealed from a July 2012 judgment of the United States District Court for the Southern District of New York, granting Plaintiff Abdo Hizam's motion for summary judgment in his action for declaratory relief affirming his United States citizenship and ordering State to return his passport and documentation of citizenship. The Second Circuit reversed holding that, because Hizam's documentation of citizenship was issued due to a State Department error, and he is not and never was a United States citizen, "while the equities . . . weigh heavily in Hizam's favor, well-settled law does not allow the courts to provide the relief that Hizam seeks."

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...630c4f09c13/5/hilite/

Extended Summary: The Plaintiff, Abdo Hizam, was born in Yemen. When Hizam was 2 years old, his father, a naturalized United States citizen, applied on his behalf, for an application for a Consular Report of Birth Abroad ("CRBA"). All of the information contained in his father's application was truthful and accurate. Hizam was issued a CRBA, which was valid proof of his citizenship, and at age 9 he moved to the United States to live with his grandparents. In the several years that followed, Hizam lived in Michigan with his grandparents, attended elementary, middle, and high school, became fluent in English, and attended and graduated from college while working two jobs. Twice during this time period, Hizam applied for and was granted renewal of his United States passport without incident. At the time of this action Hizam was working at his family deli in New York, taking care of his younger brother, and pursuing a grauate degree at Mercy College. In 2011, the State Department discovered, and notified Hizam, that his passport and CRBA had been improperly issued due to its own error in processing the original CRBA application in 1980, and revoked his passport and CRBA.

At the time the Hizam's birth, a child born outside of the United States could obtain citizenship if the child's parent was "present in the United States for at least 10 years at the time of the child's birth." When Hizam's father applied for the CRBA on his behalf when Hizam was two years old, the law had changed and required that the parent of the child be present within the United States for only five years. At the time he applied, Hizam's father had been in the United States 7 years, which he truthfully stated on the CRBA application. The consular officer that granted the CRBA apparently erroneously applied the law at the time of application, rather than the law at the time of the Hizam's birth.

Hizam commenced an action on October 2011 in the United States District Court for the Southern District of New York, seeking an declaration of his status as a national of the United States under 8 U.S.C. § 1503(a). In support of his request for a declaration by the court, he alleged that: 1) the State Department wrongfully denied him his rights and privileges as a national by revoking his CRBA and passport; 2) the State Department lacked the authority to cancel his CRBA because the plain language of 8 U.S.C. § 1504, which authorizes the cancellation of a CRBA under certain circumstances, does not authorize cancellation due to agency error, and, in any event, did not apply retroactively to Hizam's CRBA, granted before that section was enacted; and 3) the State Department was equitably estopped from revoking his CRBA and passport because he had "rightfully relied on his United States citizenship for more than twenty years."

The District Court found that the State Department lacked authority to cancel Hizam's CRBA, and held that doing so would impermissibly apply § 1504 retroactively. The District Court rejected the Defendant's argument that "the power to issue citizenship documents implied the power to revoke those documents," reasoning that allowing that power would render the provision authorizing the cancellation of CRBAs superfluous.

The Second Circuit reversed, holding that the District Court exceeded its authority under § 1503(a) by ordering the Defendant to return Hizam's CRBA. The Second Circuit also disagreed with the District Court's finding that the Defendant's application of § 1504 - which authorizes the State Department to cancel a CRBA under certain circumstances - impermissibly applied the law retroactively, explaining that "the enactment of Section 1504 neither changed the citizenship rights provided by statute, nor attached new legal consequences to a prior acquisition of citizenship," and thus was not impermissibly retroactive." The court reasoned that, although the consular officer erroneously erred by granting the CRBA, and Hizam, through admittedly no fault of his own, relied on the CRBA, Hizam is not a United States citizen because his father did not meet the necessary requirements that were stated in the statute at the time of the Plaintiff's birth. Section 1504, therefore, did not change the Hizam's status, because he was not a citizen or national to begin with. "A finding of retroactive effect in this case would allow a non-citizen to keep documents that serve as conclusive proof of American citizenship when he is not a U.S. citizen."

The Second Circuit also found that, although "[t]he equities in this case overwhelmingly favor" Hizam, who was plainly prejudiced by the State Department error and delay in correcting its error, which delay foreclosed several other avenues to citizenship that Hizam could have pursued at an earlier time, courts cannot grant citizenship through their equitable powers. The court ordered that the District Court's order to return his passport and CRBA be reversed, but called upon the State Department to "support other lawful means to provide relief to Hizam, including a private bill in Congress should one be introduced."

To read the full opinion, please visit http://www.ca2.uscourts.gov/de...630c4f09c13/5/hilite/

Panel: Judges Newman, Pooler, and Livingston.

Argument: 09/30/2013

Date of Issued Opinion: 03/12/2014

Docket Number: 12-3810

Decided: Reversed and Remand with directions to dismiss the complaint.

Case Alert Author: Amy Stein

Counsel: Ropes & Gray, LLP and Morawetz, Washington Square Legal Services, for the Plaintiff-Appellee; Assistant United States Attorney, Southern District of New York, for the Defendants - Appellants.

Author of Opinion: Judge Pooler

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 03/12/2014 07:34 PM     2nd Circuit     Comments (0)  

February 9, 2014
  In re Roman Catholic Diocese of Albany, New York, Inc. - Second Circuit
Headline: Second Circuit Grants Writ of Mandamus Dismissing Suit Against Roman Catholic Diocese of Albany, in Case Alleging Sexual Abuse by Priest, Finding Vermont Court Lacked Personal Jurisdiction over Diocese.

Area of Law: Civil Procedure, Writ of Mandamus, General Personal Jurisdiction

Issue Presented: Whether the Second Circuit should grant the Roman Catholic Diocese of Albany a writ of mandamus dismissing a case against it brought in United States District Court in Vermont for lack of personal jurisdiction in case alleging sexual assault.

Brief Summary: In 2011, plaintiff-respondent Michael Shovah ("Shovah") brought suit in the United States District Court for the District of Vermont alleging that a former priest ("Mercure") of defendant-petitioner Roman Catholic Diocese of Albany, New York ("Diocese") had sexually assaulted him on trips to Vermont. His complaint charged that the Diocese breached its fiduciary duty to Shovah by permitting Mercure to present himself as a priest, and for its negligent supervision of Mercure, both general jurisdiction complaints since they did not arise from the Diocese's contacts with Vermont. Shovah conceded that the Vermont court did not have specific personal jurisdiction over the Diocese.

The Diocese moved to dismiss Shovah's complaint for lack of general personal jurisdiction, but the District Court found the Diocese "at home" in Vermont, despite the Diocese's incorporation in Albany, New York and its lack of real property in Vermont. The District Court determined that it had general personal jurisdiction over the Diocese arising from the continuous and systematic connection formed by one weekly mass at one Vermont church between July 2002 and February 2009 as well as sixteen services held in Vermont and performed by thirteen Diocesan priests. The District Court denied the Diocese's petition for interlocutory appeal and ordered the Diocese to produce documents dating back to 1975 related to all allegations and subsequent investigations involving sexual assault of minors by agents of the Diocese.

The Diocese then petitioned the Second Circuit for a writ of mandamus. The Second Circuit granted the writ, finding clear error constituting abuse of discretion on the part of the District Court. It thus vacated the lower court's finding of personal jurisdiction over the Diocese and ordered dismissal of the complaint.

To read the full opinion, please go to: http://www.ca2.uscourts.gov/de...ab458ca0a400/1/hilite/

Extended Summary: In 2011, plaintiff Michael Shovah ("Shovah") brought suit in the United States District Court for the District of Vermont alleging that a former priest ("Mercure") of defendant Roman Catholic Diocese of Albany, New York ("Diocese") had sexually assaulted him in the 1980s on trips he took with Mercure as a minor to Vermont. His complaint charged that the Diocese breached its fiduciary duty to Shovah by permitting Mercure to present himself as a priest, and for its negligent supervision of Mercure, both general jurisdiction complaints since they did not arise from the Diocese's contacts with Vermont. Shovah conceded that the Vermont court did not have specific personal jurisdiction over the Diocese. (A suit brought by Shovah in New York court in 2011 would have been time-barred under New York's applicable statute of limitations.)

The Diocese moved to dismiss Shovah's complaint for lack of general personal jurisdiction, but the District Court found the Diocese "at home" in Vermont, despite the Diocese's incorporation in Albany, New York and its lack of real property in Vermont. The District Court determined that it had general personal jurisdiction over the Diocese arising from the continuous and systematic connection formed by one weekly mass at one Vermont church between July 2002 and February 2009 as well as sixteen services held in Vermont and performed by thirteen Diocesan priests. The District Court denied the Diocese's petition for interlocutory appeal and ordered the Diocese to produce documents dating back to 1975 related to all allegations and subsequent investigations involving sexual assault of minors by agents of the Diocese. The Diocese then petitioned the Second Circuit for a writ of mandamus.

The Second Circuit granted the writ, finding clear error constituting abuse of discretion on the part of the District Court, vacating the lower court's finding of personal jurisdiction over the Diocese, and ordering dismissal of the complaint. The Second Circuit determined this "extraordinary remedy" relief of a writ of mandamus was warranted as the only "adequate means" of relief that would prevent irreparable harm to the Diocese. The Second Circuit reasoned that the Diocese had no other adequate means to obtain relief because the discovery process necessarily induced by the continuation of the trial would result in irreversible damage by publicizing highly sensitive personal information of employees and perhaps victims of other sexual assaults.

The Second Circuit found clear error constituting an abuse of discretion on the part of the District Court in exercising personal jurisdiction over the Diocese. Vermont's long-arm statute permits exercise of personal jurisdiction to the full extent permitted under the Constitution. Shovah conceded the absence of specific personal jurisdiction because his claims did not arise out of the Diocese's contacts with Vermont. The Second Circuit held that general personal jurisdiction by the Vermont court was not supported, noting that the minimum contacts test for general jurisdiction is much more stringent than the test for specific personal jurisdiction, requiring "continuous and systematic" contacts that would render the Diocese essentially at home in "at home" in Vermont. Specifically, the Second Circuit held that that sixteen religious services delivered over ten years and performed by thirteen different priests, along with the existence of 78 Vermont-resident parishioners over ten years, 18 Vermont-resident employees over ten years, and 21 Vermont-based vendors over ten years, and a 0.08% Vermont contribution to the $67 million in charitable donations received by the Diocese, was insufficient to satisfy the test for general personal jurisdiction. Likewise, one weekly mass in one Vermont church spanning the years 2002-2009 was insufficient to meet the continuous and systematic connections mandated by Supreme Court decisions for the exercise of general personal jurisdiction.

To read the full opinion, please go to: http://www.ca2.uscourts.gov/de...ab458ca0a400/1/hilite/
Panel (if known): Circuit Judges Winter, Wesley, and Chin

Argument Date: Submitted 01/14/2014

Date of Issued Opinion: 02/07/2014

Docket Number: 13-4736

Decided: Writ of Mandamus GRANTED; District Court order VACATED with instruction to dismiss the case for lack of personal jurisdiction over defendant Diocese.

Case Alert Author: Laura Young

Counsel: Michael L. Costello, Tobin and Dempf LLP, Albany, NY (Meir Feder, Jones Day, New York, NY; Thomas E. McCormick, McCormick, Fitzpatrick, Kasper & Burchard, P.C., Burlington, VT, on the brief), for Defendant-Petitioner. Jerome F. O'Neill, O'Neill Kellner & Green, P.C., Burlington, VT for Plaintiff-Respondent.

Author of Order: Per curiam

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 02/09/2014 07:57 PM     2nd Circuit     Comments (0)  

January 29, 2014
  Starr International Co., Inc. v. Federal Reserve Bank of New York and American International Group, Inc. - Second Circu
Headline: Second Circuit Affirms Dismissal of Suit by American International Group (AIG) Shareholder against the Federal Reserve Bank of New York for Breach of Fiduciary Duty in its Rescue of AIG During the Fall 2008 Financial Crisis

Area of Law: Corporate

Issue(s) Presented: Whether state fiduciary law applies to FRBNY's rescue activities or whether it is preempted by federal common law.

Brief Summary: Starr International Co., Inc. "(Starr") appeals from a judgment of the United States District Court for the Southern District of New York, dismissing its claims against the Federal Reserve Bank of New York ("FRBNY) for breach of fiduciary duty in connection with the FRBNY's "rescue" of American International Group, Inc. ("AIG") during the financial crisis in fall 2008. In September 2008, with AIG on the brink of bankruptcy, the FRBNY offered AIG a recue arrangement that included a credit facility from FRBNY of $85 billion dollars. With no alternative, AIG accepted this deal and, on September 22, 2008, AIG and FRBNY executed the formal agreement ("the Credit Agreement) memorializing the rescue agreement. At the time of the Credit Agreement, Starr was AIG's principal shareholder.

Starr brought a suit in November 2011, alleging direct and derivative claims against FRBNY for breach of fiduciary under Delaware state law to AIG's shareholders. On November 16, 2012, the District Court granted FRBNY's motion to dismiss, finding that Starr did not adequately plead that FRBNY was a fiduciary to AIG under Delaware law and that, because FRBNY is a federal instrumentality charged with preserving the stability of the national economy, Delaware fiduciary law was preempted by federal common law and thus did not apply to the challenged actions. The Second Circuit affirmed, agreeing that these state law claims were preempted by federal law common. The court reasoned that an application of Delaware fiduciary duty to FRBNY's rescue activities would be inconsistent with FRBNY's mandate under federal law to adequately protect the federal interests at stake in stabilizing the national economy.

To read the full opinion please visit
http://www.ca2.uscourts.gov/de.../1/doc/12-5022_opn.pdf - xml=http://www.ca2.uscourts.gov/decisions/isysquery/ca3ce68c-8e2e-461a-8f6f-00e5450b4aae/1/hilite/

Extended Summary: On September 16, 2008, when AIG informed the federal government that it might have to file for bankruptcy, the FRBNY offered AIG a rescue arrangement that included a credit facility from FRBNY of $85 billion at an initial interest rate of 14.5%, but required AIG to give the federal government approximately 80% interest in AIG common stock to be held in a trust (the "Trust"). With no other alternatives, AIG accepted this deal and on September 18, AIG's directors replaced the company's existing CEO with Edward Liddy, who Starr alleges to have been under the control of FRBNY and thereby not acting solely in the interests of AIG's shareholders. September 22, 2008, AIG and FRBNY executed the formal agreement ("the Credit Agreement) memorializing the rescue agreement. At the time of the agreement, Starr was AIG's principal shareholder.

Starr brought a suit in the United States District Court for the Southern District of New York in November 2011, alleging direct and derivative claims against FRBNY for breach of fiduciary duty and for aiding and abetting AIG's officers in breaching their fiduciary duties, as well as other constitutional issues that are not at issue in this appeal. Starr claimed that in November and December 2008, FRBNY caused a special vehicle called Maiden Lane III, funded by both AIG and FRBNY, to be used to purchase $62 billion in assets from AIG credit default swap counterparties at full par value. Starr alleges that Maiden Lane III effectively provided the counterparties with "backdoor bailouts" - to the detriment of AIG - because many of the counterparties would have been willing to settle AIG's obligations for less than par value. Additionally, Starr challenged FRBNY's actions involving the Trust. On March 4, 2009, AIG issued the required Series C Preferred Stock to the Trust. Starr contends that the FRBNY circumvented a stockholder vote rejecting a proposal to increase the number of common stock shares through a 20:1 reverse stock split. In November 2012, the District Court granted FRBNY's motion to dismiss Starr's complaint on the grounds that: (1) Starr had not adequately plead that FRBNY was a fiduciary to AIG under Delaware law; and (2) Delaware fiduciary duty law was preempted by federal common law and could not apply to the challenged actions by FRBNY which were performed as a federal instrumentality charged with preserving the stability of the national economy. Starr filed a timely appeal of the dismissal.

The Second Circuit first reviewed that the FRBNY, as one of the twelve regional reserve banks, is a fiscal agent of the United States and is operated not for shareholders profit but, rather, was created and are operated in furtherance of national fiscal policy. Because Federal Reserve banks "conduct important governmental functions regarding" matters including the "general fiscal duties of the United States," they are "instrumentalities of the federal government." FRBNY contended that the emergency rescue activities at issue fell within its statutory authority under Section 13(3) of the Federal Reserve Act to provide discretionary emergency loans to entities such as AIG in "unusual and exigent circumstances" when such entities are "unable to secure adequate credit accommodations from other banking institutions." Starr argued that the FRBNY's challenged rescue activities went beyond the lawful scope of authority granted by the Federal Reserve Act and, accordingly, could be subject to state breach of fiduciary duty claims.

The Second Circuit affirmed the dismissal of Starr's claims, agreeing with the District Court that Delaware fiduciary law did not apply to FRBNY's rescue activities. The Court emphasized that Starr had failed to identify any case limiting the scope of preemption to the federal instrumentality's lawful operation, or making state law inherently available to police excesses of authority by federal actors. The Court further reasoned that application of Delaware fiduciary duty law to FRBNY's rescue activities in this case - which would impose a primary duty to act on the interests of FRBNY's shareholders - would be in direct conflict with FRBNY's duty under federal statute and federal common law to adequately protect of the federal interests at stake in stabilizing the national economy.

To read the full opinion please visit
http://www.ca2.uscourts.gov/de.../1/doc/12-5022_opn.pdf - xml=http://www.ca2.uscourts.gov/decisions/isysquery/ca3ce68c-8e2e-461a-8f6f-00e5450b4aae/1/hilite/

Panel: Circuit Judges Walker, Jr., Livingston, and Chin

Argument: 09/17/2013

Date of Issued Opinion: 01/29/2014

Docket Number: No. 12-5022-cv

Decided: Affirmed

Case Alert Author: Andrea Hlopko

Counsel: David Boies, Boies, Schiller & Flexner LLP, Armonk, NY (Robert J. Dwyer, Boies, Schiller & Flexner LLP, New York, NY and John L. Gardiner for Skadden, Arps, Slate, Meahher & Flom, LLP, New York, NY on the brief), for Plaintiff-Appellant.

John S. Kiernan, Debevoise & Plimpton LLP, New York, NY (Gary W. Kubek, Jennifer E. Spain, Nicholas C. Tompkins, David B. Noland, Thomas C. Baxter, Jr., Shari Leventhal, and Meghan McCurdy, Federal Reserve Bank of New York on the brief) for Defendant-Appellee.
Joseph S. Allerhand, Weil, Gotshal & Manges LLP, New York, NY (Stephan A. Radin and Jamie L. Hoxie on the brief), for Nominal Defendant-Appellee.

Author of Opinion: Circuit Judge John M. Walker, Jr.

Case Alert Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 01/29/2014 04:10 PM     2nd Circuit     Comments (0)  

January 20, 2014
  The Evergreen Association, Inc. v. City of New York
Headline: Second Circuit Partially Upholds, and Partially Reverses, District Court Injunction Striking Down Disclosure Requirements on "Crisis Pregnancy Centers"

Area of Law: Constitutional Law

Issue(s) Presented: Whether New York City can impose requirements on pregnancy services centers aimed at informing potential clients about the centers and the services they do and do not provide, without violating their First Amendment right to free speech.

Brief Summary: In 2010, a New York City Council member introduced a bill designed to regulate the practice of "crisis pregnancy centers" that provide non-medical pregnancy services and are opposed to abortion. The bill, which was signed into law in 2011 by then-Mayor Bloomberg, required "pregnancy service centers" (facilities that either (1) offered obstetric ultrasounds, sonograms, or prenatal care or (2) had the appearance of a licensed medical facility) to disclose (1) whether they had a licensed medical provider on staff; (2) the fact that the New York City Department of Health and Mental Hygiene encouraged potentially pregnant women to consult with a licensed provider; and (3) whether they provided referrals for abortion, emergency contraception, or prenatal care. The bill's legislative records stated that it was intended to prevent deceptive practices that could impede or delay access to reproductive health services. A group of pregnancy services providers that did not provide referrals for abortion or emergency contraception services sought a preliminary injunction in the United States District Court for the Southern District of New York, arguing that the law was void for vagueness and that it compelled them to speak in violation of the First Amendment. The district court granted their requested injunction in full. On appeal, the Second Circuit affirmed in part and vacated in part. The Second Circuit found that the law was not impermissibly vague and that its first requirement (requiring the centers to disclose whether they had a licensed medical provider on staff) was constitutional, but that the other two requirements violated the First Amendment. The court severed those two provisions from the law.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...8b60ea2c229/1/hilite/

Extended Summary: In 2011 then New York City Mayor Michael Bloomberg signed into law Local Law 17 (Law 17), which was scheduled to go into effect four months later. Law 17 required "pregnancy service centers" (facilities that either (1) offered obstetric ultrasounds, sonograms, or prenatal care or (2) had the appearance of a licensed medical facility) to disclose (1) whether they had a licensed medical provider on staff; (2) the fact that the New York City Department of Health and Mental Hygiene encouraged potentially pregnant women to consult with a licensed provider; and (3) whether they provided referrals for abortion, emergency contraception, or prenatal care. The centers were required to provide these disclosures at their entrances and waiting rooms, on advertisements, and during telephone conversations. The bill's legislative records stated that it was intended to prevent deceptive practices that could impede or delay access to reproductive health services.

A group of pregnancy services providers that did not provide referrals for abortion or emergency contraception services sought a preliminary injunction in the United States District Court for the Southern District of New York, in order to prevent the law from taking effect. The district court enjoined the law in full, concluding that the law was impermissibly vague and that they were likely to succeed on the merits.

On appeal, the Second Circuit disagreed that the law was impermissibly vague, holding that Law 17's definition of "pregnancy service center" was sufficiently specific to notify regulated facilities and to curtail arbitrary enforcement. The court then addressed the law's three substantive disclosure requirements, which the plaintiffs argued unconstitutionally compelled speech.

The court found the first disclosure provision - requiring centers to disclose whether they had a licensed medical provider on staff - to be constitutional and therefore enforceable. Although this regulation compelled speech, the court held that it still passed muster because it was narrowly tailored to achieve a compelling government interest: letting a woman know, when she entered a particular pregnancy services center, whether it had a licensed medical provider on hand to supervise her treatment. The court rejected the plaintiffs' argument that this interest could be achieved by general City-sponsored advertisements.

However, the Second Circuit found that the second and third disclosure requirements were unconstitutional. As to the second provision - requiring pregnancy services centers to state that "the New York City Department of Health and Mental Hygiene encourages women who are or who may be pregnant to consult with a licensed provider" - the court stated that less restrictive alternatives existed, such as a City-wide advertising campaign. The court added that this requirement forced pregnancy services centers to convey the City's position on this issue, which was subject to dispute. Additionally, the court rejected the third provision, which required the centers to disclose whether they provided access to emergency contraception and abortion services. The court held that "a requirement that pregnancy services centers address abortion, emergency contraception, or prenatal care at the beginning of their contact with potential clients alters the centers' political speech by mandating the manner in which the discussion of these issues begins."

The Second Circuit thus partially affirmed and partially vacated the district court's decision, striking down the two provisions of Law 17 found unconstitutional, but otherwise leaving the law intact. Judge Wesley concurred in part and dissented in part, arguing that the entire statute was impermissibly vague in how it defined a pregnancy services center. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...8b60ea2c229/1/hilite/


Panel: Circuit Judges Pooler, Wesley, and Lohier

Argument Date: 9/14/2012

Date of Issued Opinion: 1/17/2014

Docket Number: Nos. 11-2735-cv, 11-2929-cv

Decided: District Court's judgment affirmed in part, vacated in part, and remanded for further proceedings consistent with this Opinion.

Case Alert Author(s): Christopher Roma

Counsel: James Henderson, American Center for Law & Justice, for Plaintiffs-Appellees the Evergreen Association Inc. and Life Center of New York, Inc.; Matthew Bowman, Alliance Defense Fund, for Plaintiff-Appellees Pregnancy Care Center of New York, Boro Pregnancy Counseling Center, and Good Counsel, Inc; Mordecai Newman, Assistant Corporation Counsel, for Defendant-Appellants City of New York

Author of Opinion: Circuit Judge Pooler

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 01/20/2014 08:17 AM     2nd Circuit     Comments (0)  

January 16, 2014
  Poventud v. City of New York, et al. - Second Circuit
Headline: Second Circuit Vacates Dismissal of §1983 Claims against New York City and Police, Holding Plaintiff May Assert Claim Based upon Police's Failure to Disclose Brady Evidence Prior to His Criminal Trial, Despite Having Plead to a Lesser Charge After the Conviction was Vacated and Prior to a New Trial.

Areas of Law: Constitutional; Criminal

Issue(s) Presented: Whether §1983 action alleging constitutional claims based upon the police's failure to disclose information prior to criminal trial was barred because, after his conviction was overturned and a new trial was ordered, plaintiff plead to a lesser charge?

Brief Summary:

This appeal arises out of the prosecution of plaintiff Marcos Poventud (Poventud) for the robbery and shooting of a livery cab driver in 1997. Two men robbed the cab driver and shot the driver in the back of the head or neck. A search of the cab turned up a wallet containing ID cards of Francisco, plaintiff Poventud's brother. Initially, police used a photo array containing the photo of Francisco from the ID, and the cab driver identified him "unequivocally" as the shooter. Learning that Francisco was already incarcerated at the time of the shooting, the police then focused on Poventud. The police subsequently showed the cab driver a photo array that included Poventud's photo, but the driver could not identify him as the shooter on three occasions. On a fourth showing, however, the driver did identify Poventud as the shooter. The police did not disclose the initial photos showings to the Assistant District Attorney and, as a result, it was never turned over to Poventud.

Marcos and a co-defendant, Robert Maldonado, were tried and convicted of attempted murder in the second degree and related crimes in June 1998. When Maldonado's conviction overturned, the non-disclosure was discovered. Poventud brought a collateral state appeal and his conviction was overturned and a new trial was ordered. Prior to a new trial, Poventud accepted a plea agreement in which he pled guilty to the lesser crime of attempted robbery and was given a one-year sentence with time served. Poventud subsequently filed a § 1983 action against New York City and police officers for constitutional violations arising out of their failure to disclose the information. That action was dismissed by the United States District Court for the Southern District of New York on a motion for summary judgment as barred. In 2012, he appealed the District Court's dismissal and the appeal was heard by a panel of the Second Circuit. The majority of the divided panel concluded that the appeal was not barred, as the District Court had concluded, because, having been released, Poventud no longer had access to habeas corpus remedies. A rehearing en banc was then ordered.

On this rehearing en banc, the Second Circuit held that Poventud's claims were not barred by the Supreme Court's decision in Heck v. Humphrey, because the overturning of his conviction was a sufficient favorable result to serve as a basis for his § 1983 action. The court reasoned that his complaint was based off of Brady violations that occurred during the investigation of his case and, therefore, it was sufficient that Poventud demonstrated that the violation may have affected the result of the trial. Judges Lynch and Lohier each separately concurred, Judge Chin concurred in part and dissented in part, and Judges Jacobs and Livingston each wrote lengthy dissents to the en banc ruling. The dissenting opinions in this case argue strongly that the majority's decision has weakened the effect of Brady and Heck and that, ultimately, Poventud is being allowed to bring a suit based on a violation of the opportunity to perform a perjurious impeachment.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...0a651ee04dc/1/hilite/

Extended Summary:

Plaintiff Marcos Poventud was previously tried and convicted of attempted murder in the second degree and several other related crimes in June 1998, arising out of the robbery and shooting of a livery cab driver in 1997. The two men robbed and shot the driver in the back of the head or neck. A search of the cab turned up a wallet containing ID cards of Francisco, the plaintiff's brother. Initially, police used a photo array containing the photo of Francisco from the ID, and the cab driver identified him "unequivocally" as the shooter. Upon discovering Francisco was incarcerated when the crime was committed, the police focused on the plaintiff as the most likely suspect. The police showed the cab driver a photo array including the plaintiff's photo but the driver did not identify him on three occasions. On a fourth showing of a photo of the plaintiff, the driver identified him as the shooter. Police then brought Poventud in and the cab driver identified him in a line up. The Assistant District Attorney chose to prosecute the plaintiff and a co-defendant, Robert Maldonado, but was never told about the mistaken identification of Francisco in the previous photo array. At trial, the plaintiff presented an alibi that he was playing video games during the crime, but was unable to cross-examine detectives about the mistaken identification because of the failure to disclose. Maldonado appealed his conviction, which was overturned, and the new Assistant District Attorney learned of the erroneous identification, which then served as the basis of the Poventud's appeal.

In 2003, the New York Supreme Court, First Department Appellate Division upheld Poventud's conviction. However, in 2004 Poventud successfully brought a state collateral challenge of his conviction for violations during the investigation of his case based on Brady v. Maryland, 373 U.S. 83 (1963), and People v. Rosario, 9 N.Y.2d 286 (1961). His original conviction was vacated and a new trial was ordered but, before there was a new trial, and while the State weighed appealing the decision based on Brady, Poventud chose to accept a plea to the lesser charge of attempted robbery in the third degree, receiving a one year sentence with time served. Upon his release, Poventud brought a § 1983 claim in the United States District Court for the Southern District of New York against New York City and police asserting that evidence was withheld against him that would have had a reasonable probability of affecting the result of his trial. The district court dismissed the claims on a motion for summary judgment by the defendants, stating that the § 1983 was precluded by the Supreme Court's decision in Heck v. Humphrey, 512 U.S. 477 (1994). In 2012 Poventud appealed to a panel on the Second Circuit who in 2013 held that Heck did not apply because, having been released from incarceration, Poventud no longer had access to a habeas corpus remedy. The Second Circuit ordered a rehearing en banc and, today, vacated judgment and remanded to the district court, holding that Heck did not bar the §1983 suit because Poventud's claim does not imply that his outstanding conviction was invalid.

The Supreme Court in Heck requires that "in order to recover damages for allegedly unconstitutional conviction or imprisonment, or for other harm caused by actions whose unlawfulness would render a conviction or sentence invalid, a § 1983 plaintiff must prove that the [challenged] conviction or sentence has been reversed on direct appeal, expunged by executive order, declared invalid by a state tribunal authorized to make such determination, or called into question by a federal court's issuance of a writ of habeas corpus, 28 U.S.C. § 2254." 512 U.S. at 486-87.

While the Second Circuit en banc majority remarks that, if this case were based off malicious prosecution it would require a favorable outcome such as acquittal of the previous case, it concludes the district court's error was in treating this case as one involving a malicious prosecution. The Second Circuit finds that plaintiff's case was based off a Brady violation, which does not require that the plaintiff demonstrate factual innocence, but ultimately involves the effect that suppression may have had on the outcome of the trial. The court held that in this case the plaintiff should have been able to argue that, based on the impeachment of the State's main witness, the lead detective, regarding the mistaken identification, he may have been acquitted or convicted on a lesser charge. Ultimately, the court also held that the plaintiff's §1983 claim was limited to the 1998 conviction and could not be brought for his 2006 plea and the one year of time served. The court left the issue of what the damages were worth as a question more properly addressed by the district court. Because the plaintiff's case is based on the improper actions of the police officers before and during his trial in 1998, the court found that he had properly asserted the § 1983 based on the Brady violation.

In a concurring opinion, Judge Lynch writes that the court's decision is consistent with the law, and "with the basic assumptions of our jurisprudence," discussing the common sense implications of the plaintiff's subsequent plea agreement. Judge Lohier essentially disputes any assertion in the dissenting opinion that the complaint infers an action in malicious prosecution. Judge Chin, concurring in part and dissenting in part, agrees with the district court's finding that the plaintiff's claims are factually inconsistent with the 2006 conviction, but argues the case should be remanded to the extent that certain of the claims do not imply that the 2006 conviction is invalid.

In a lengthy dissent, Judge Jacobs writes that the majority impairs the future application of Heck and Brady by removing the finality that results from a guilty plea and negating the effect of Heck once a criminal defendant is released. Judge Livingston likewise dissents, writing that the majority ultimately distorts Brady into the granting of a right of an opportunity to commit perjury based on the plaintiff's subsequent guilty plea, which demonstrates factual guilt, essentially rendering the impeachment evidence perjurious.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...0a651ee04dc/1/hilite/

Panel: En banc, Chief Circuit Judge Katzmann, Judges Jacobs, Calabresi, Cabranes, Pooler, Sack, Raggi, Wesley, Livingston, Lynch, Chin, Lohier, Carney, and Droney.

Argument: 9/25/2013

Date of Issued Opinion: 1/16/2014

Docket Number: 12-1011-cv

Decided:
Vacating a previous decision of a panel of the Second Circuit and Remanding.

Case Alert Author: David Restrepo

Counsel: Joel B. Rudin, Law Offices of Joel B. Rudin, New York, NY (Julia P. Kuan, Romano & Kuan, New York, NY, on the brief), for Plaintiff-Appellant Marcos Poventud; Michael B. Kimberly, Mayer Brown LLP, Washington, D.C. (Richard D. Willstatter, National Association Of Criminal Defense Lawyers, White Plains, NY; Marc Fernich, New York State Association of Criminal Defense Lawyers, New York, NY; Charles A. Rothfeld, Paul W. Hughes, Mayer Brown LLP, Washington, D.C.; on the brief), for Amicus Curiae National And New York State Associations of Criminal Defense Lawyers; Mordecai Newman (Leonard Koerner; Larry A. Sonnenshein; Linda Donahue; Rachel Seligman Weiss; on the brief), for Zachary W. Carter, Corporation Counsel of the City Of New York, New York, NY, for Defendants-Appellees City Of New York, et al.; Caitlin Halligan (Hilary Hassler, Assistant District Attorney, New York County; Steven A. Bender, Assistant District Attorney, Westchester County; Morrie I. Kleinbart, Assistant District
Attorney, Richmond County; Itamar J. Yeger, Assistant District Attorney, Rockland County; on the brief), For Kathleen M. Rice, President, District Attorneys Association of the State of New York, New York, NY, for Amicus Curiae District Attorneys Association of the State of New York; Barbara Underwood, Solicitor General (Richard Dearing, Deputy Solicitor General; Won S. Shin, Assistant Solicitor General; on the brief), For Eric T. Schneiderman, Attorney General of the State of New York, New York, NY, for Amici Curiae States Of New York, Connecticut, And Vermont.

Author of Opinion: Judge Wesley filed the majority opinion in which Judges Katzmann, Calabresi, Pooler, Sack, Hall, Lynch, Lohier, and Carney joined. Judge Lynch filed a concurring opinion. Judge Lohier filed a concurring opinion in which Judges Calabresi, Pooler, Wesley, Hall and Lynch joined. Judge Chin filed an opinion dissenting in part and concurring in part. Judge Jacobs filed a dissenting opinion in which Judges Cabranes, Raggi, Livingston. and Droney joined. Judge Livingston filed a dissenting opinion in which Judges Jacobs, Cabranes, Raggi, and Droney joined.

Case Alert Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 01/16/2014 08:41 PM     2nd Circuit     Comments (0)  

December 4, 2013
  Aegis Insurance Services, Inc. v. 7 World Trade Center Co. - Second Circuit
Headline: Second Circuit Affirms Dismissal of Con Ed Suit Seeking Damages for Destruction of Electrical Substation Resulting from Collapse of 7 World Trade Center on September 11, 2001

Area of Law: Torts

Issue(s) Presented: Whether the designers, constructors, and operators of the 7 World Trade Center building could be held liable for negligence for the collapse of that building following the September 11, 2001 terrorist attack on the Twin Towers.

Brief Summary: Fiery debris from the collapse of the World Trade Center's North Tower on September 11, 2001 crashed into the evacuated 7 World Trade Center Building ("7WTC"), taking out chunks of the building and igniting fires on multiple floors. Already facing with the loss of over 300 firefighters in the Twin Towers' collapse and a severed water supply, the New York City Fire Department designated the area as a collapse zone and did not attempt to extinguish the fire. When 7WTC collapsed after burning for several hours, it destroyed the electrical substation that sat underneath it, owned by Consolidated Edison Co. Of New York, Inc. ("Con Ed").

Con Ed and its insurers sued the defendants, the designers, builders and operators of 7WTC, alleging that their negligence in design and construction caused the 7WTC collapse. In a 2006 decision ruling on certain of the defendants' motion to dismiss, and a 2011 ruling on another of the defendant's motion for summary judgment, the United States District Court for the Southern District of New York dismissed the negligence claims on the grounds that defendants did not owe Con Ed a duty of care and that any general duty owed to Con Ed did not include the improbable "chain of events on September 11" leading to the substation's destruction. The Second Circuit majority affirmed the dismissal, but on alternative grounds, holding that although the District Court erred in finding defendants did not owe Con Ed a duty of care, given "the unprecedented nature and sheer magnitude of the events of September 11," Con Ed could not demonstrate that negligence on the part of these defendants was the "cause-in-fact" of the 7WTC collapse. In a brief dissent, Circuit Judge Wesley argued that the case should have been remanded for review by the trial court of defense experts on the issue of causation and/or a trial to determine whether Con Ed could demonstrate causation.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...088e207c8f6/1/hilite/

Extended Summary: When the North Tower of the World Trade Center site collapsed on September 11, 2001 as a result of the terrorist attacks that morning, extensive fiery debris fell in the surrounding area, including onto the already-evacuated 7 World Trade Center Building ("7WTC"). The falling debris took chunks out of 7WTC and ignited extensive fires on multiple floors. Already dealing with the extensive loss of life of firefighters, and a damaged and limited water supply, the New York City Fire Department made the decision not to attempt to squelch the fire, instead establishing the area as a collapse zone. After burning for seven hours, 7WTC collapsed, destroying the Consolidated Edison Co. Of New York, Inc. ("Con Ed") electrical substation that sat underneath it

Con Ed and its insurers sued New York City, the Port Authority, 7 World Trade Company, L.P., Silverstein Development Corp., Silverstein Properties, Inc., Tishman Construction Corporation ("Tishman"), and Office of Irwin G. Cantor P.C., ("Cantor)" (collectively, the "defendants"), the designers, builders, and operators, of 7WTC, alleging that their negligence caused the building to collapse. After the United States District Court for the Southern District of New York dismissed the claims against New York City and Port Authority, defendants Tishman, and Cantor, and others, moved to dismiss the complaint for failure to state a claim. The district court granted the motion on the ground that these defendants owed no duty of care to Con Ed. Con Ed subsequently filed a second amended complaint and defendant 7 World Trade Company moved for summary judgment. In its opposition, Con Ed argued that 7WTC had been negligently designed and constructed and submitted opinions from multiple experts asserting that, had 7WTC been properly designed and constructed, it would have survived the September 11, 2001 events. Defendant 7 World Trade Company did not submit expert reports to counter those submitted by Con Ed, and none were requested by the District Court. The district court granted summary judgment to 7 World Trade Company, holding no duty of care was owed to Con Ed and the "improbable and attenuated chain of events" leading to the collapse following the September 11 terrorist attacks were not foreseeable to the defendant. Con Ed appealed the order dismissing the claims against Tishman and Cantor and the later order granting summary judgment to 7 World Trade Company.

The Second Circuit held that the district court erred in finding that no duty was owed to Con Ed by the defendants, but nevertheless affirmed the ruling on both the motion to dismiss and summary judgment on an alternative ground. The court found that 7 World Trade Company owed Con Ed a general duty "not to expose it to unreasonable risk because of negligent building design, construction, or maintenance," in the event of a massive fire, a foreseeable risk to a large office building, regardless of whether the precise events leading to the fire - here, terrorists hijacking and flying planes into the Twin Towers - were foreseeable. The court held, however, that Con Ed failed to raise a genuine issue of fact on the required element of whether defendants' actions were the "cause-in-fact" of the resulting injury. The Second Circuit found that the evidence presented by Con Ed was too speculative and did not sufficiently connect the alleged faults in design and construction of 7WTC to the specific constellation of events - the damage to the buildings from the North Tower collapse, the falling debris that ignited fires on multiple floors, the loss of 343 firefighters in the Towers' collapse, the severed water source - that occurred on September 11. The court thus concluded, "t is simply incompatible with common sense and experience to hold that defendants were required to design and construct a building that would survive the events of September 11, 2001."

In a brief dissent, Circuit Judge Wesley argued that, in light of the expert testimony presented by Con Ed, the case should have been remanded for review by the trial court of defense experts on the issue of causation and/or a trial to determine whether Con Ed could demonstrate causation.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...088e207c8f6/1/hilite/

Panel: Judges Pooler, Parker, and Wesley.

Argument Date: 09/12/2012

Date of Issued Opinion: 12/04/2013

Docket Number: No. 11-4403-cv

Decided: Affirmed

Case Alert Author: Bárbara M. Santisteban

Counsel: Franklin M. Sachs, Greenbaum, Rowe, Smith & Davis, LLP, Woodbridge, New Jersey (Mark L. Antin, Gennet, Antin, & Robinson, P.C., Parsippany, New Jersey, on the brief), for Plaintiffs-Appellants.

Katherine L. Pringle, Friedman Kaplan Seiler & Adelman LLP, New York, New York (Eric Seiler, Robert D. Kaplan, Kent K. Anker, Jeffrey R. Wang, Christopher M. Colorado, on the brief); Anita B. Weinstein, Cozen O'Connor, New York, New York (Kenneth G. Schwarz, on the brief), for Defendants-Cross-Defendants-Appellees.

Stephen P. Schreckinger, Gogick, Byrne & O'Neill, L.L.P., New York, New York, for Defendant-Cross-Defendant-Third Party-Defendant-Appellee.

Author of Opinion: Judge Pooler (majority); Judge Wesley (dissent).

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 12/04/2013 09:42 PM     2nd Circuit     Comments (0)  

November 22, 2013
  Lingon; Floyd v. City of New York - Second Circuit
Headline: Second Circuit Denies, Without Prejudice, New York City's Motions to Vacate District Court Judge Scheindlin's Stop and Frisk Stay Order and Denies Removed Judge's Motion Seeking Leave to Oppose City's Motions

Area of Law: Constitutional; Civil Procedure

Issue(s): Whether the Second Circuit should grant New York City's motions to vacate earlier District Court orders which enjoined the New York City Police Department from continuing to execute its stop and frisk policy, when these motions were filed prior to the Second Circuit's recent opinion that superseded the District Court Court's stay? Whether District Court Judge Scheindlin's motions requesting leave to move for an order denying the merits of New York City's motions to vacate may be granted when the Second Circuit, in a previous decision, had ruled that Judge Scheindlin lacks standing to appear on this matter.

Brief Summary: The Second Circuit handed down another brief opinion today in the New York City Police Department "stop and frisk" case, denying four pending motions. Specifically, on November 9, 2013, Appellant, City of New York ("City"), moved the Second Circuit to vacate District Court Judge Scheindlin's February 14 and August 12 orders granting preliminary injunctions enjoining the New York City Police Department from continuing to execute its stop and frisk policy. See Floyd v. City of New York, No. 13-3088, Dkt. 263; Lingon v. City of New York, No. 13-3123, Dkt. 187. Today, the Second Circuit denied the City's two motions without prejudice, to be considered as appropriate as part of the appeal on the merits, because the City's motion were submitted prior to the Second Circuit's November 13, 2013 opinions, which already superseded Judge Scheindlin's stay orders.

The Court also addressed two motions submitted on November 13, 2013 on behalf of Judge Scheindlin requesting "leave to move for . . . an order denying on the merits the City's motions to vacate." The Second Circuit denied these motions as well, relying on its previous denial on November 13 of Judge Scheindlin's motion seeking to appear in the Second Circuits in In re Motion of District Judge, and on the further ground that the Judge's motions are moot in light of the Court's denial today of the City's motions. In its opinion, the Second Circuit went on to address assertions made in Judge Scheindlin and other amicus motions that, in referencing an exchange in an earlier related case that was before Judge Scheindlin as support for its decision to remove Judge Scheindlin from the appeal in this matter, the Second Circuit was using used media reports, and not the actual court transcript of the case referred to. The Second Circuit clarified that, contrary to these assertions, the panel had the actual court transcript for the exchange cited before it when it issued the orders removing Judge Scheindlin and "[a]ny suggestion to the contrary us unfounded."

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...f2e64b7459b/1/hilite/

Panel: Circuit Judges Walker, Cabranes, and Parker

Docket Number: Nos. 13-3123-cv, 13-3088-cv

Decided: 11/22/2013

Case Alert Author: Gillian Kirsch

Author of Opinion: Per Curiam

Circuit: 2d Circuit

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 11/22/2013 01:50 PM     2nd Circuit     Comments (0)  

November 17, 2013
  Lynch v. City of New York
Headline: Second Circuit Upholds NYPD Policy of Administering Breathalyzer to Any Officer Who Discharges a Firearm and Causes Injury or Death

Area of Law: Constitutional Law

Issue(s) Presented: Whether a NYPD policy that requires breathalyzer tests for officers whose discharge of a firearm has caused death or injury to another person authorizes unconstitutional searches under the Fourth Amendment.

Brief Summary: The Patrolmen's Benevolent Association of the City of New York, a union representing New York City's police officers, challenged NYPD Interim Order 52 as unconstitutional under the Fourth Amendment. Order 52 requires officers who discharge their firearms causing injury or death to submit to breathalyzers immediately after the incident. New York City and the NYPD argued that Order 52 was constitutional under the "special needs" exception to the warrant and probable cause requirements of the Fourth Amendment. The Second Circuit agreed with the defendants and found that Order 52 served special needs distinct from the normal criminal law enforcement activities of the NYPD - namely, "personnel management and the maintenance of public confidence in the NYPD" - and otherwise fit within the exception to the warrant and probable cause requirements of the Fourth Amendment. Therefore, the Second Circuit affirmed the district court's ruling that Order 52 was constitutionally reasonable under the Fourth Amendment. To read the full opinion, please visit: ">http://www.ca2.uscourt.../de.....1/2/hilite/


Extended Summary: The Fourth Amendment protects the people's right to be secure in their persons and free from unreasonable searches. The Supreme Court has interpreted this Fourth Amendment protection to require a judicially sanctioned warrant or probable cause when the police undertake a search to discover evidence of criminal wrongdoing. In certain cases, however, a search without a warrant or probable cause can be constitutionally reasonable under the Fourth Amendment. One such exception to these requirements is applicable when there is a "special need" for the search beyond discovery of evidence or other normal law enforcement needs. The special needs exception recognizes that some searches are incompatible with the Fourth Amendment's warrant and probable cause requirements and do not involve the risks and harms the amendment was intended to protect. To fall within this exception, (1) the primary purpose of the search must be something other than normal criminal law enforcement activities, (2) the "special purpose" must serve an interest that outweighs the privacy interests at stake, and (3) the non-law enforcement objective must be incompatible with the usual warrant and probable cause requirements of the Fourth Amendment.

In Lynch v. The City of New York, The U.S. Court of Appeals for the Second Circuit applied the special needs exception to the New York City Police Department (NYPD) Interim Order 52 (Order 52). Order 52 requires the administration of a breathalyzer test to any officer whose discharge of his firearm results in death or injury to any person. Plaintiffs in the case were a union representing almost all of New York City's police officers and its President. They challenged Order 52 in the United States District Court for the Southern District of New York arguing it violated the Fourth Amendment. The district court found the law constitutional based on the special needs exception and granted summary judgment to the defendants.

On appeal to the Second Circuit, plaintiffs argued that Order 52 did not meet the requirements for the special needs exception to apply. Specifically, plaintiffs argued that Order 52 did not have a primary purpose distinct from normal criminal law enforcement and, even if it did, those special needs did not outweigh the invasion of the officer's privacy interest. The Second Circuit rejected these arguments and found Order 52 constitutionally reasonable under the special needs exception to the Fourth Amendment.

The court first examined Order 52 to determine whether it had a primary purpose distinct from normal criminal law enforcement activities. After reviewing the record, the court held that the primary purpose of the law was to determine an officer's sobriety at the time he discharged his firearm. Since sobriety is a fitness-for-duty condition of NYPD employment, Order 52 served interests related to managing personnel and maintaining the public's confidence in the NYPD. Moreover, the court noted that both the NYPD and the public have an interest in finding out whether officers were complying with department sobriety guidelines when he discharges his firearm and causes injury or death. Therefore, Order 52 had a primary purpose that was distinct and separate from normal law enforcement activities. Next, the court found that the personnel and public confidence objectives of Order 52 were incompatible with the usual warrant requirements. Finally, the court relied on Supreme Court precedent to find that Order 52 was reasonable because special needs outweighed the privacy intrusion. The court held officers have little privacy expectations because they are entrusted with firearms and must be fit for duty and that a breathalyzer imposes a minimal intrusion on the officer's privacy. The NYPD's need to promptly confirm whether officers who discharge their weapons were fit for duty outweighs this intrusion. Therefore, according to the court, the special needs exception applied and the law was constitutional.

To read the full opinion, please visit: ">http://www.ca2.uscourt.../de.....1/2/hilite/


Panel: Circuit Judges Raggi and Straub; District Judge Cogan

Argument Date: May 16, 2013

Argument Location: New York

Date of Issued Opinion: November 15, 2013

Docket Number: 12-3089-cv

Decided: Affirmed

Case Alert Author: Christopher Roma

Counsel: Andrew L. Frey, Mayer Brown LLP, for Patrolmen's Benevolent Association of the City of New York, Inc.; Edward F.X. Hart, for The City of New York, New York City Police Department and Raymond W. Kelly.

Author of Opinion: Circuit Judge Raggi

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 11/17/2013 01:14 PM     2nd Circuit     Comments (0)  

November 14, 2013
  In re Reassignment of Cases & In re Motion of District Judge: Ligon; Floyd et al. v. City of New York, et al. - Second C
Headline: Second Circuit Clarifies Basis for Order to Disqualify District Judge in "Stop-and-Frisk" Racial Profiling Cases Against NYPD, and Denies District Judge's Motion to Appear in Support of Retaining Cases

Area of Law: Criminal Procedure; Ethics

Issues Presented: Whether the appearance of impartiality should disqualify the District Judge from retaining related "stop-and-frisk" racial profiling cases? Whether the District Judge may be heard on the decision to reassign the "stop-and-frisk" racial profiling cases?

Brief Summary: On October 31, 2013, the Second Circuit issued a brief order that stayed the opinions rendered by District Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York in two lawsuits challenging the constitutionality of the New York Police Department's "stop-and-frisk" policy. In that brief order, the Second Circuit disqualified Judge Scheindlin based on her appearance of impartiality and ordered the cases reassigned to a new judge. In the first of two opinions, In re Reassignment of Cases, the Second Circuit superseded and clarified that order by explaining that, under 28 U.S.C. 455(a), despite there being no findings of misconduct, actual bias, or actual partiality on the part of District Judge Scheindlin, disqualification of Judge Scheindlin was the proper remedy because statements she made, which appeared to result in the cases being filed with her, along with statements made to the media, "might cause a reasonable observer to question her impartiality." In a second opinion, In re Motion of District Judge, the Second Circuit held that District Judge Scheindlin's motion had no procedural basis to allow her to come before the court and argue on her own behalf in light of these circumstances as "reassignment is not a legal injury to the district judge."

To read the full opinions, please visit: http://www.ca2.uscourts.gov/de...8_complete_amended.pdf and http://www.ca2.uscourts.gov/de...3-3088_motion_opn.pdf

Extended Summary:
The underlying class action lawsuits in this matter, Floyd v. City of New York and Ligon v. City of New York, were before United States District Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York as related cases to prior cases she presided over. These cases challenged the constitutionality of practices by the New York City Police Department ("NYPD") in relation to stop-and-frisks. In an amended opinion on February 14, 2013, District Judge Scheindlin granted the Ligon plaintiffs' motion for a preliminary injunction because the plaintiffs showed "a clear likelihood of proving that defendants have displayed deliberate indifference toward a widespread practice of unconstitutional trespass stops." In a separate opinion, District Judge Scheindlin also granted the defendants' motion to stay the remedies until a decision was reached on "the appropriate scope of preliminary injunctive relief, and the appropriate scope of permanent injunctive relief (if any) in Floyd." On August 12, 2013, following a nine-week trial in Floyd, District Judge Scheindlin held that the City of New York ("the City") violated the plaintiffs' Fourth and Fourteenth Amendment rights, and ordered the City to take remedial measures. On August 27, 2013, the City moved to stay the orders pending an appeal on the merits, which motion was denied by Judge Scheindlin. On September 23, 2013, the City made a motion before the Second Circuit to stay District Judge Scheindlin's order. On October 31, 2013, the Second Circuit granted the stay and ordered that the cases be reassigned to a randomly selected district judge because of District Judge Scheindlin's appearance of impartiality.

In a follow-up and superseding opinion in In re Reassignment of Cases, the Second Circuit gave further explanation for the basis of its October 31 order. It stated that 28 U.S.C. 455(a) has the goal of not only avoiding partiality, but the appearance of partiality. While making no explicit findings of "misconduct, actual bias, or actual partiality on the part of Judge Scheindlin," the Second Circuit found that her conduct on the bench, what may have resulted in Floyd and Ligon being filed and assigned to her, coupled with her statements made to the media, "might cause a reasonable observer to question her impartiality." As support for this conclusion, the Second Circuit referred specifically to several statements made by Judge Scheindlin in related cases and to the press. For example, the court cited an exchange during argument on a motion in Daniels v. City of New York, a related case, during which District Judge Scheindlin repeatedly suggested that if the plaintiffs wanted to seek information outside of the described parameters of a settlement agreement, they should file an additional lawsuit, which she would accept as a related case, and would likely allow the plaintiff to obtain the requested documents. Additionally, the court referred to comments District Judge Scheindlin made to the media after the trial in Floyd, but prior to the decision being issued including stating that she might not be the government's "favorite judge." Furthermore, the Second Circuit referred to a story published in The New Yorker suggesting that Judge Scheindlin would rule against the NYPD, which quoted one of her former law clerks as stating that "the judge . . . thinks cops lie" and which stated that Scheindlin described "herself as a jurist who is skeptical of law enforcement." Combining the comments made during the proceedings, and those made to the media, the Second Circuit held that there was an appearance of partiality. The Second Circuit continued by noting that reassignment "is not unusual in this Circuit" and within the discretion of the court.

In re Motion of District Judge addresses a motion filed by District Judge Scheindlin with the Second Circuit on November 8, 2013, through counsel, seeking an order granting appellate review of the judicial disqualification under 28 U.S.C. 455(a). The motion sought to authorize counsel to appear on District Judge Scheindlin's behalf to address the October 31, 2013 order reassigning the cases to a randomly selected district judge. On November 9, 2013, District Judge Scheindlin's counsel, "styling himself as amicus curiae," filed a letter arguing that the Second Circuit should vacate the reassignment order "to terminate a dispute that is distracting attention for the underlying merits." The motion argued for relief under Federal Rule of Appellate Procedure 21, which permits a trial court judge to request permission to address a petition for mandamus relief if invited or ordered by the court. The Second Circuit denied the motion, holding that the motion lacked a procedural basis because there was no judicial misconduct or ethical violations committed by District Judge Scheindlin, and under the circumstances, there was no procedural mechanism to allow her to argue on her behalf. The Second Circuit found that Rule 21 did not apply because there was no petition for a writ of mandamus or any other extraordinary writ pending. Additionally, there was no precedent which would ultimately allow District Judge Scheindlin to argue before the Second Circuit on the issue of reassignment. The Second Circuit further rejected District Judge Scheindlin's counsel's argument that this was "distracting." The court acknowledged that it may be frustrating to work on a case for a lengthy period of time only to have it reassigned, but found there no legal injury to District Judge Scheindlin.

To read the full opinions, please visit: http://www.ca2.uscourts.gov/de...8_complete_amended.pdf and http://www.ca2.uscourts.gov/de...3-3088_motion_opn.pdf

Panel: Circuit Judges Walker, Jr., Cabranes, Parker.

Date of Issued Opinions: 11/13/13

Docket Number: 13-3123; 13-3088

Decided: Cases are Reassigned; Denied District Judge's Motion to Appear in Support of Retaining Authority Over Cases

Case Alert Author: Jeffrey S. Peters

Counsel: Burt Neuborne, New York, NY, for Judge Shira A. Scheindlin.

Author of Opinion: Per Curiam.

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 11/14/2013 06:11 PM     2nd Circuit     Comments (0)  

  Vincent v. The Money Store--Second Circuit
Headline: Second Circuit Holds That Mortgage Lenders That Hire Law Firms To Send Deceptive Debt Collection Letters Can Be Held Liable under the Fair Debt Collection Practices Act ("FDCPA")

Area of Law: Debt Collection; Creditors' Rights

Issue(s) Presented: Whether the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA") and the Truth in Lending Act, 15 U.S.C. § 1601 et seq. (TILA), apply to a mortgage lender who purchased mortgages that were initially payable to other lenders and hired a law firm to send allegedly deceptive debt collection letters to the defaulting debtors.

Brief Summary: The three plaintiffs in this case defaulted on mortgage loans that they executed with various lending entities, all of which subsequently assigned the loans to The Money Store, a mortgage servicing company. Upon the plaintiffs' default, The Money Store hired an outside law firm to send them "breach notices" informing them that they were in default. Apart from sending these breach letters, the law firm played no role in The Money Store's debt collection efforts. Plaintiffs sued The Money Store in the United States District Court for the Southern District of New York, claiming the letters violated the Fair Debt Collection Practices Act (FDCPA) by falsely implying that a law firm had been retained by The Money Store to collect the debt and commence legal action. They also alleged that The Money Store violated the Truth in Lending Act (TILA) by charging them unauthorized fees and failing to refund the resulting credit balances. The district court dismissed both claims. The United States Court of Appeals for the Second Circuit, however, reversed the dismissal of the FDCPA claim, explaining that although creditors are not usually considered debt collectors subject to the FDCPA, the act includes a "false name" exception whereby creditors can be held liable if, in the process of collecting their own debts, they use "any name other than [its] own which would indicate that a third person is collecting or attempting to collect such debts." The Second Circuit held that given this exception, summary judgment was unwarranted here. The Second Circuit affirmed the dismissal of the TILA claim, by contrast, because The Money Store did not meet the definition of a "creditor" as that term is used in the statute.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...b9d7887ada1/1/hilite/

Extended Summary: In 1996, Plaintiff Lori Jo Vincent took out a mortgage loan on her Texas home, executing a promissory note and a deed of trust with Accubanc Mortgage Corporation, her lender. Neither the promissory note nor the deed of trust mentioned The Money Store. When the loan was executed, Accubanc gave Vincent the disclosure statement pursuant to TILA. Accubanc then transferred its interest in the loan to EquiCredit Corporation of America, who then assigned and endorsed the note and deed of trust to The Money Store two-and-a-half months later and twenty-nine days after the first payment was due.

The remaining plaintiffs, Ruth Gutierrez and Linda and John Garrido, also took out mortgage loans on their homes that eventually were assigned to The Money Store by the original lenders. The facts surrounding these loans and subsequent transfers to The Money Store are materially the same as Ms. Vincent's loan and assignment. The only difference was that Ms. Vincent's first payment was due before the assignment and endorsement to The Money Store while these plaintiffs' first payments were not due until after The Money Store acquired the mortgages. None of the promissory notes or deeds of trust mentioned The Money Store.

All of the Plaintiffs eventually defaulted on their loans. In April 1997, the law firm Moss Codilis, Stawiarski, Morris, Schneider & Prior (Moss Codilis) and The Money Store entered into an agreement by which Moss Codilis would mail breach notices to defaulting borrowers. The Money Store believed that this "Breach Letter Program" would earn the attention of defaulting borrowers because the letters came from a law firm. The letters, on a Moss Codilis letterhead, warned recipients that the both the principal and interest loan amounts would be accelerated if the default was not resolved within 30 days and directed all future communication to The Money Store. Moss Codilis, who got paid by the letter, sent 88,937 letters and collected between $3 and $4.5 million in fees.

Plaintiffs filed suit in the United States District Court for the Southern District of New York against The Money Store only, alleging that the breach letters were unlawful under FDCPA because they falsely created the impression that a hired third party was collecting the debt and that this third party was authorized to commence legal action against the debtors. Plaintiffs also claimed that The Money Store wrongfully charged their accounts for fees and expenses and failed to, pursuant to TILA, return any overcharges to the borrowers. The district court granted The Money Store's motion for summary judgment as to both of plaintiffs' claims.

Generally, creditors are not subject to the FDCPA. However, the FDCPA provides that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692(e). The FDCPA also prohibits "[t]he false representation or implication that any individual is an attorney or that any communication is from an attorney." Id. § 1692(e)(3). To consider a creditor a debt collector pursuant to the false name exception, three conditions must be met: "(1) the creditor is collecting its own debts; (2) the creditor "uses" a name other than its own; and (3) the creditor's use of that name falsely indicates that a third person is 'collecting or attempting the collect' the debts that the creditor is collecting." 15 U.S.C. § 1692a(6). Here, the first condition was indisputably met. The Second Circuit also concluded that the second and third conditions were arguably met, considering factors such as whether the firm's involvement with the letter was merely ministerial, whether the firm had access to the debtor's files, and whether the firm had authority to legally pursue the debts. Considering these factors, Moss Codilis was not making a bona fide attempt, as would a collection agency, to collect the debts; the firm was merely acting as a conduit for the creditor. Because it was not a bona fide debt collector, the firm falsely implied that it was collecting or attempting to collect the debts, especially since the letters stated that the firm had been "retained" in order to "collect a debt for our client." Therefore, on Plaintiff's FDCPA claims, the Second Circuit held that the district court erred in granting summary judgment for The Money Store and remanded the case for further proceedings.

By contrast, the Seocnd Circuit affirmed the District Court's ruling dismissing Plaintiffs' claim that The Money Store violated TILA by wrongfully charging fees and failing to return overcharges to the borrowers. The Court found dismissal of the TILA claim appropriate because The Money Store was not a "creditor" as defined in the statute and therefore not subject to the provisions contained therein. Specifically, TILA defines a creditor as a person who regularly extends consumer credit payable by agreement in more than four installments or for which payment of a finance charge is or may be required. This definition, however, is further qualified and applies only to a person to whom the debt obligation is initially payable, either on the face of the note or contract or by agreement. Plaintiffs argued that The Money Store met this second requirement because they had acquired the loans prior to the first payments being due, therefore, plaintiffs argued, the loans in question were "initially payable" to The Money Store. The court rejected this argument stating that this inquiry focuses on the "face of the evidence of indebtedness," in this case the original promissory notes. Since all three of the initial lenders were entities other then The Money Store and none of the promissory notes mentioned The Money Store, it was not a creditor under TILA and the claims against it were dismissed.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...b9d7887ada1/1/hilite/

Panel: Circuit Judges Katzmann, Livingston, and Lohier.

Argument Date: 11/08/2012

Date of Issued Opinion: 11/13/2013

Docket Number: No. 11-4525-cv

Decided: District Court's judgment affirmed in part, vacated in part, and remanded for further proceedings consistent with this Opinion.

Case Alert Author(s): Amanda Zefi & Christopher Roma

Counsel: Paul S. Grobman (Neal DeYoung, Sharma & DeYoung LLP, on the brief) for Plaintiffs-Appellants; Daniel A. Pollack (Edward T. McDermott, W. Hans Kobelt, on the brief), McCarter & English, LLP for Defendants-Appellees.

Author of Opinion: Chief Judge Katzmann

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 11/14/2013 09:10 AM     2nd Circuit     Comments (0)  

November 7, 2013
  United States v. Freeman - Second Circuit
Headline: Second Circuit Vacates Conviction Based on Finding that Police Lacked Reasonable Suspicion for Terry Stop Based on Anonymous 911 Calls Made from Cell Phone.

Issue(s) Presented: Did the District Court err in denying a motion to suppress a firearm discovered by police when they stopped defendant based upon a tip in two anonymous 911 calls?

Brief Summary: On April 27, 2011, two anonymous 911 calls placed by the same person reported that a man of a certain description was at a certain street location in the Bronx, New York, and was carrying a gun. The operator was not able to identify or reach the caller on the cell phone number listed as the source of the call, despite attempts to call the number listed. Two New York Police Department officers responding to the calls arrived at the scene and attempted to stop the defendant, Joseph Freeman, as he was walking. The defendant continued to try to walk away, at which point the police grabbed him around the waist and tripped him to the ground, eventually handcuffing him and finding a firearm in his waistband. The defendant was subsequently tried and moved to suppress the gun on the grounds that the police did not have reasonable suspicion to stop him. The defendant The United States District Court for the Southern District of New York denied the motion and the defendant was eventually convicted of being a felon in possession of a firearm.

The defendant appealed his conviction and the Second Circuit majority reversed, vacating the conviction, and remanding the case. The Second Circuit held that the two calls placed anonymously by the same person were insufficient to provide reasonable suspicion for the stop. In a dissenting opinion, Circuit Judge Wesley argued that, because the anonymous caller's cell number was available to the operator, and in light of current technology that would presumably enable police to track the caller, the police were reasonable in concluding that the calls created reasonable suspicion supporting the stop. The dissent also urged the Supreme Court to offer guidance in this troubling and important area of jurisprudence.

To read the full opinion, please visit:
">http://www.ca2.uscourt.../de.....8/1/hilite/


Extended Summary: On April 27, 2011, at approximately 1:40 a.m., the New York City Police Department responded to two 911 calls from the same caller that reported a Hispanic Man near a Chase Bank on East Gun Hill Road in the Bronx, New York was carrying a gun. The caller refused to identify herself during both calls, and she could not be re-contacted despite recordings of the calls and the cell phone number from which the call was place having been recorded. The caller remains unknown. In the second call, the caller gave an updated description of the suspect as a "male black" wearing a white du-rag, black hat, and long white t-shirt who was "walking towards" and then "standing at the corner of Burke [Avenue]."

Police officers who responded to the scene observed the defendant walking on Gun Hill Road, noting that he matched the most recent reported description. The officers stopped the vehicle and approached the defendant and attempted to speak with him, at which point the defendant continued to walk away. One officer grabbed his elbow, and the defendant shrugged him off continuing to walk away. The second officer then grabbed the defendant around the waist in a "bear hug" and the defendant continued to try and walk away until the officer tripped him to the ground, eventually handcuffing the defendant and removing a gun from his waistband.

The defendant was tried in the United States District Court for the Southern District of New York and moved to suppress the gun discovered on the grounds that police lacked reasonable suspicion to make the stop. The district court denied the motion, concluding that the stop was supported by reasonable suspicion. To preserve his right to appeal, the defendant waived his right to jury by trial and agreed to a bench trial on the stipulated facts. On December 13, 2011, the district court found him guilty of being a felon in possession of a firearm, at which point he brought the instant appeal challenging the stop.

The Second Circuit reversed and vacated the defendant's conviction, finding police did not have reasonable suspicion for the stop, and remanded the case to the district court. Noting that a determination of reasonable suspicion must be viewed under the totality of the circumstances, and that the suspicion must be justified at the onset, the court analyzed the stop based on two factors: (1) at what point did the police seize the defendant, and (2) whether at that point there was reasonable suspicion.

The court first determined that the defendant had been seized when the police officer grabbed him around the waist, rejecting the government's argument that the seizure occurred when the defendant was handcuffed. The court reasoned that because the defendant never attempted to flee, the court could not consider any events that occurred after the seizure as part of the reasonable suspicion analysis, such as evidence that he struggled and moved his hands towards his waist.

The court then determined that the anonymous tips were insufficient to provide the reasonable suspicion necessary for the stop. Relying on the Supreme Courts 2000 decision in Florida v. J.L., the court held that, because the caller did not provide any information that identified her, there was no way for police to determine her credibility or to hold her accountable for misreporting and, therefore, the anonymous calls were not sufficiently reliable to support the stop. The court rejected the district court's determination that the caller was not truly anonymous, but was rather an eyewitness, because her cell phone number was recorded, she called 911 twice, and because she so accurately described the defendant. Although the majority noted that Justice Kennedy's concurring opinion in J.L. suggested that, at some point, reliability may be demonstrated for anonymous tips from cell phones due to advances in technology allowing the identification of anonymous callers and the ability to hold them accountable for false tips, the record did not demonstrate a material increase in the reliability of the tip in this case.

Finally, the Second Circuit rejected any argument that the danger posed by firearms provided reasonable suspicious supporting the Terry stop. The court stated that the mere presence of the firearm did not justify the stop without an ongoing emergency situation and rejected the assertion that the stop was reasonable because it occurred late at night in a high crime area, noting that the late night activity carries less weight in "the city that never sleeps," and there were areas with more or less crime within the precinct. Finally, the court found the defendant's refusal to cooperate could not be held against him because at the time the police approached him they lacked reasonable suspicion for the stop.

In a dissenting opinion, Circuit Judge Wesley argues that the officers did have reasonable suspicion to make the stop based on the reliability of the 911 calls. Judge Wesley suggests that the call was not truly anonymous based on the factors identified previously by Justice Kennedy in J.L., namely that the call was recorded, the number was recorded, and technology would allow the police to track down the caller whether or not the cell phone was permanent or disposable. He further suggests that due to the changes in the communications industry and 911 call centers, the Supreme Court should give "further guidance in this troubling and exceptionally important area of Fourth Amendment jurisprudence."

To read the full opinion, please visit:
">http://www.ca2.uscourt.../de.....8/1/hilite/


Panel: Circuit Judges Pooler, Wesley and Droney

Argument: 4/16/2013

Date of Issued Opinion: 11/7/2013

Docket Number: 12-2233-cr

Decided: Conviction Vacated, Suppression Decision Reversed and Remanded

Case Alert Author: David Restrepo

Counsel: Yuanchung Lee, Federal Defenders of New York, Inc., for Defendant Appellant and Rachel Maimin, Assistant United States Attorney, (Preet Bharara, United States Attorney for the Southern District of New York, Justin S. Weddle, Assistant United States Attorney, on the brief), for Appellee.

Author of Opinion: Judge Pooler for the majority; Judge Wesley dissenting

Case Alert Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 11/07/2013 04:30 PM     2nd Circuit     Comments (0)  

October 31, 2013
  Ligon, et al. v. City of New York -- Second Circuit
Headline: Second Circuit Disqualifies District Judge in "Stop & Frisk" Racial Profiling Cases Against NYPD, and Stays Her Preliminary Injunction and Remedial Order

Area of Law: Criminal Procedure

Issue(s) Presented: Whether the district judge in the New York City "stop & frisk" racial profiling cases violated the Judicial Code of Conduct by (1) indicating that a case should be marked as 'related' to an existing case in order to be brought before her and (2) participating in a series of interviews and public statements regarding the case.

Brief Summary: The City of New York is defending two suits brought by plaintiffs Ligon and Floyd challenging the constitutionality of the New York Police Department's (NYPD) "stop and frisk" policy. Prior to today, the cases were tried before a district judge in the United States District Court for the Southern District of New York, Shira Scheindlin, who accepted them under S.D.N.Y. Local Rule 13(a) as "related cases" to one of her existing cases. Judge Scheindlin issued various opinions holding that the NYPD's stop and frisk approach was unconstitutional, and ordered significant remedies. The City appealed to the Second Circuit. Today, the Second Circuit - while not expressing a view on the substance or merits of the appeals, which have not yet been argued - issued a very brief order that stayed Judge Scheindlin's opinions in the decisions in the case, such that they will not take effect unless affirmed by the Second Circuit. Additionally, the Second Circuit held that upon remand, these cases shall be assigned to a different district judge chosen randomly. The court found that Judge Scheindlin had misapplied the Local Rule in telling attorneys representing the plaintiffs that she would accept these cases as "related cases" to a case already in her courtroom, and that her commentary jeopardized the appearance of impartiality required by Canons 2 and 3 of the Code of Judicial Conduct. The court also found that she violated the same Canons through participation in media interviews and public statements "purporting to respond publicly to criticism of the District Court."

Panel: Circuit Judges John M. Walker, Jr., Jose A. Cabranes, Barrington D. Parker.

Date of Issued Opinion: 10/31/13

Docket Number: No. 13-3123; 13-3088

Decided: Remanded to district court for implementation of order; mandate otherwise remains with Second Circuit.

Case Alert Author: Laura Young

Circuit: Second Circuit

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 10/31/2013 07:40 PM     2nd Circuit     Comments (0)  

October 25, 2013
  United States v. Ghailani--Second Circuit
Headline: Second Circuit Affirms Conviction and Life Sentence of Convicted Al Qaeda Terrorist Ahmed Khalfan Ghailani

Area of Law: Criminal

Issue(s) Presented: Whether the Speedy Trial Clause of the Sixth Amendment of the Constitution prevents the United States from trying a defendant who was held abroad for several years by the CIA and the Department of Defense while his indictment was pending.

Brief Summary: On January 25, 2011, Ahmed Khalfan Ghailani was convicted in the United States District Court for the Southern District of New York of conspiring to bomb the United States Embassies in Nairobi, Kenya and Dar es Salaam, Tanzania. These bombings, which took place simultaneously on August 7, 1998, killed over two hundred people, and injured thousands. The lengthy time span between the bombings and Ghailani's conviction stemmed from the fact that he eluded capture until 2004, at which point the CIA detained and interrogated him outside the United States for about two years. He then spent several years in custody at Guantanamo Bay. His criminal trial in federal district court began in 2009, at which point the trial judge rejected his argument that the Speedy Trial Clause of the Sixth Amendment barred his prosecution. The Second Circuit affirmed his conviction, holding that the Speedy Trial Clause was not violated because Ghailani had been detained for national security reasons. The court also deemed his life sentence reasonable.


To read the full opinion please visit
http://www.ca2.uscourts.gov/de...a7ac29e17ed/1/hilite/

Extended Summary: In 1996 or 1997, Ahmed Khalfan Ghailani was recruited by al Qaeda as a member of its "East Africa Crew," and became part of the logistics team for the bombings of the American embassies in Nairobi, Kenya and Dar es Salaam, Tanzania. In the months prior to the bombings, Ghailani procured a number of items necessary for building an explosive device. He also hid explosive devices in his home, and substantially participated in the transportation of the devices to the embassy. Prior to the bombings, Ghailani, along with several other members of al Qaeda, flew (with a false passport) to Pakistan.

Ghailani was indicted with his co-conspirators in 1998, but evaded authorities until he was ultimately captured abroad on July 25, 2004. In an effort to obtain "critical, real-time intelligence about terrorist networks," Ghailani was detained and interrogated by the CIA outside of the United States for about two years. After two years, Ghailani was transferred to the Department of Defense at Guantanamo Bay as an "enemy combatant." About a year later, in March 2008, Ghailani was charged before a military commission "with violations of the laws of war, in connection with the bombing of the embassy in Dar es Salaam and with his efforts as a part of al Qaeda in the years during which he remained a fugitive." Shortly the military court proceedings began, after, President Obama suspended the military commissions by executive order.

In March 2009, Ghailani filed a habeas petition in the United States District Court for the Southern District of New York, asserting his right to a speedy trial. The government responded by announcing that it would try Ghailani in the Southern District of New York. Ghailani moved to dismiss the indictment on grounds that it violated the Speedy Trial Clause - given that he had been held for nearly five years by the United States government. Denying Ghailani's motion to dismiss the indictment on the ground that Ghailani had not received a speedy trial, the district court held that "[c]onsidering all of the circumstances, particularly the lack of significant prejudice of the sort that the Speedy Trial Clause was intended to prevent, the delay in this case did not materially infringe upon any interest protected by the right to a speedy trial."

After about four weeks of trial, the jury convicted Ghailani of conspiring to destroy United States buildings and property, and made a specific finding that Ghailani's conduct directly or proximately caused death to a person other than a conspirator. The district court sentenced Ghailani to a term of life in prison. Ghailani appealed the decision on the grounds that 1) the district court should have granted his motion to dismiss because he did not receive a speedy trial, 2) the district court also erred in giving the jury a "conscious avoidance" charge, and 3) a sentence of life in prison was unreasonable.

Affirming the district court's ruling that Ghailani's Sixth Amendment right had not been violated, the Second Circuit reasoned that "the Supreme Court has recognized for more than a century that the constitutional right to a speedy trial is not 'so unqualified and absolute' that it must prevail over 'the demands of public justice.'" In so doing, the court applied the Supreme Court's four-factor balancing test "for evaluating a defendant's claim that his or her speedy trial right has been violated." This test considers: "(1) the length of the delay; (2) the reasons for the delay; (3) whether the defendant asserted his right in the run-up to the trial; and (4) whether the defendant was prejudiced by the failure to bring the case to trial more quickly." The Second Circuit concluded that although the delay here was "undoubtedly considerable," it was not excessive given the national security interests at issue. "There is no evidence that the government ever acted in bad faith to gain a tactical advantage over or to prejudice Ghailani with respect to his defense of th[e] indictment," the court observed.

The court also rejected Ghailani's conscious avoidance argument, disagreeing "that there was insufficient evidence for a rational juror to infer that he was aware of the likelihood that his efforts would contribute to the bombing of American embassies." Finally, in addressing Ghailani's sentence, the Second Circuit "conclude[d] that a sentence of life imprisonment, based on a conviction for conspiring to destroy United States buildings and property and directly or proximately causing the deaths of 224 people, was neither procedurally nor substantively unreasonable." The conviction was therefore affirmed in full.

Panel: Circuit Judges Calabresi, Cabranes, and Parker

Argument: 05/18/2013

Date of Issued Opinion: 10/24/2013

Docket Number: 11-320-cr

Decided: Affirmed.

Case Alert Author: Sophia Sofferman

Counsel: Peter Enrique Quijano, Nancy Lee Ennis & Anna N. Sideris (on the brief) Quijano & Ennis, P.C., New York, NY, for Plaintiff - Appellant, Michael Fabriarz, Assistant United States Attorney, Harry A. Chernoff, Nicholas J. Lewin, Sean S. Buckley, Katherine Polk Failla, Assistant United States Attorneys (on the brief), for Preet Bharara, United States Attorney for the Southern District of New York, for Defendant - Appellee

Author of Opinion: Judge Cabranes

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/25/2013 08:48 AM     2nd Circuit     Comments (0)  

October 24, 2013
  New York Progress and Protection PAC v. Walsh, et al. - Second Circuit
Headline: Second Circuit Grants Preliminary Injunction Sought by Political Action Committee Supporting Mayoral Candidate Joseph Lhota, Enjoining Enforcement of New York Election Law Limit on Political Donations to Independent Expenditure Committees

Area of Law: Election Law; First Amendment

Issue Presented: Whether the district court erred in denying a preliminary injunction seeking to enjoin enforcement of two sections of the New York State Election Law prohibiting an independent political committee from receiving more than $150,000 from any individual contributor?

Brief Summary: Plaintiff New York Progress and Protection PAC ("NYPPP"), an independent political action committee supporting candidate Joseph Lhota in the upcoming November 2013 New York City mayoral election, had a donor seeking to contribute $200,000. Following the September 2013 Republican primary, the NYPPP brought suit in the United States District Court for the Southern District of New York and immediately moved for a preliminary injunction to enjoin the enforcement of New York State Election Law §§ 14-114(8) and 14-126(2) which, in essence, prohibits NYPPP from accepting contributions in excess of $150,000 from any person in any calendar year, arguing that these provisions violate the First Amendment. The district court denied the motion for a preliminary injunction, without evaluating NYPPP's likelihood of success on the merits or whether denial would cause irreparable harm, on the grounds that the injunction was not in the public interest and a balance of the hardships weighed against granting the injunction.

The United States Court of Appeals for the Second Circuit reversed the district court's ruling and granted the preliminary injunction. The Second Circuit held that the limit on contributions was directly related to a restriction on political speech, that NYPPP had a substantially likelihood of succeeding on the merits because all circuit courts to address this issue have held that donors may not be limited in their ability to contribute to independent expenditure committees, and that denial of the injunction would result in significant harm to NYPPP.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...b08a174c3a6/2/hilite/

Extended Summary: Plaintiff New York Progress and Protection PAC ("NYPPP") is an independent political action committee that advocate for political candidates. NYPPP supports New York City mayoral candidate Joseph Lhota in the upcoming election, and has a potential donor willing to contribute $200,000. However, New York State Election Law §§ 14-114(8) and 14-126(2), together, prevents political committees from receiving more than $150,000 from any individual contributor in any calendar year.

On September 25, 2013, approximately two weeks after the New York City mayoral Republican primary, NYPPP filed suit against election officials from the State and City of New York and the Board of Elections in the United States District Court for the Southern District of New York. The next day, NYPPP filed a motion for a preliminary injunction to enjoin the enforcement of §§ 14-114(8) and 14-126(2) on the grounds that they violate the First Amendment right to political speech. The district court set oral argument for October 8 and NYPPP subsequently filed a letter citing the urgency of the matter in light of the upcoming election on November 5.

On October 16, NYPPP filed a petition for a writ of mandamus with the United States Court of Appeals for the Second Circuit. After the Second Circuit scheduled oral argument on the mandamus petition for October 18, the district court denied NYPPP's motion for a preliminary injunction. NYPPP then withdrew their mandamus petition and appealed the district court's ruling on the preliminary injunction to the Second Circuit.

The Second Circuit reversed, holding that NYPPP's motion for a preliminary injunction should have been granted and that the district court erred by failing to address whether NYPPP established a substantial likelihood of success on the merits or would suffer irreparable harm without the sought injunctive relief. The Second Circuit found that irreparable harm occurs when there is a loss of First Amendment freedoms and rejected the State's argument that a presumption of injury did not exist because the monetary contribution limit only indirectly affected constitutionally protected speech. The Second Circuit also concluded that NYPPP had a substantial likelihood of succeeding on the merits of its claim because all circuit courts that have addressed the constitutionality of similar election law provisions in other jurisdictions, have held that limits on donors to independent expenditure committees are unconstitutional.

The Second Circuit also found that the preliminary injunction was in the public interest because it was intended to "secur[e] First Amendment rights," it rejected the district court's assumption that the State's interest was automatically aligned with the public interest, and found that the government did not have an anti-corruption interest in limiting independent expenditures in light of the Supreme Court's recent decision in Citizens United v. FEC. Finally, the Second Circuit found that any potential concerns the district court had with disrupting the election system were insufficient to outweigh the harm on constitutionally protected political speech and stated that the State had failed to show what burdens would be imposed by allowing NYPPP to receive higher contributions than allowed by the statute.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...b08a174c3a6/2/hilite/

Panel: Circuit Judges Jacobs and Lohier; District Judge Koeltl, sitting by designation.

Argument Date: 10/08/2013

Date of Issued Opinion: 10/24/13

Docket Number: 13-3889-cv

Decided: Reversed

Case Alert Author: Jeffrey S. Peters

Counsel: Todd R. Geremia, Jones Day, New York, New York (Michael A. Carvin, Louis K. Fisher, Warren Postman, Jones Day, Washington, D.C., and Michael E. Rosman, Center for Individual Rights, Washington, D.C., on the brief), for Appellant. Judith Vale, (Richard P. Dearing, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, for Appellees.

Author of Opinion: Judge Jacobs

Case Alert Circuit Supervisor: Professor Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 10/24/2013 03:38 PM     2nd Circuit     Comments (0)  

October 20, 2013
  Licci, et al. v. Lebanese Canadian Bank, SAL - Second Circuit
Headline: Second Circuit Holds Exercise of Personal Jurisdiction Over Lebanese Canadian Bank in Terror Case, Based on Bank's "Recurring" Use of New York Bank Account to Execute Wire Transactions, Comports with Constitutional Due Process.

Area of Law: Constitutional Law/Civil Procedure

Issues Presented: Whether exercising personal jurisdiction over a foreign bank in federal court in New York, where the bank's only contact with New York was its recurring use of a New York bank account to execute wire transactions, comports with due process principles under the United States Constitution?

Brief Summary: The underlying case involves Lebanese Canadian Bank's ("LCB") repeated use of a New York based bank account to wire transfer millions of dollars. Plaintiffs, American, Canadian, and Israeli citizens, sued LCB for violations of United States anti-terrorism laws and related claims under Israeli law, in the United States District Court for the Southern District of New York alleging that the money was wired by LCB on behalf of the terrorist organization Hizballah to be used to carry out rocket attacks in July and August 2006 in Israel. After the District Court granted LCB's motion to dismiss for lack of personal jurisdiction, and plaintiff's appealed the dismissal, the Second Circuit certified two questions to the New York Court of Appeals, seeking clarification as to whether LCB's conduct constituted "transacting business" in New York and, if so, whether the harm to plaintiffs could be found to have arisen from the LCB's New York business transactions, such that personal jurisdiction could be proper under the New York Long Arm Statute, N.Y. C.P.L.R. §302(a)(1).

Upon the New York Court of Appeals answering the certified questions affirmatively, the Second Circuit went on to analyze here whether exercising personal jurisdiction over LCB was consistent with the due process principles under the United States Constitution. The Second Circuit then held that, in light of allegations that LCB executed dozens of dollar-denominated wire transfers and that it selected and repeatedly used New York's banking system, exercising personal jurisdiction over LCB satisfied due process.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...64e230d88dc/2/hilite/

Extended Summary: Plaintiffs, American, Canadian, and Israeli citizens, sued Lebanese Canadian Bank's ("LCB"), a foreign bank, in the United States District Court for the Southern District of New York, alleging that LCB repeatedly used a New York-based bank account to wire millions of dollars on behalf of the terrorist organization Hizballah, to be used to carry out rocket attacks in July and August 2006 in Israel in violation of the Anti-Terrorism Act, Alien Tort Statute, and Israeli law. LCB moved to dismiss the action for lack of personal jurisdiction, the District Court granted the motion funding no basis for personal jurisdiction under the New York State Long-Arm Statute, N.Y. C.P.L.R. §302(a)(1), and plaintiffs appealed.

In March 2012, the Second Circuit certified two questions to the New York Court of Appeals. First, the court asked whether a foreign banks use of a New York bank account to execute dozens of wire transfers is sufficiently purposeful conduct to constitute transacting business under the New York State Long-Arm Statute. Second, the court asked whether the allegations in the complaint established the requisite "nexus" between the foreign bank's New York activity and the Plaintiff's claims to support the exercise of personal jurisdiction under the Long Arm Statute. The Court of Appeals answered yes to both.

With the New York statute satisfied, the Second Circuit went on to analyze whether exercising personal jurisdiction over LCB comports with constitutional due process standards requiring "minimum contacts" with the New York forum. The Second Circuit held that it did, reasoning that LCB's selection and repeated use of New York's banking system as an "instrument for accomplishing the alleged wrongs" constituted "purposeful availment" of the privilege of doing business in New York. The Second Circuit noted that, because of the prevalence of United States currency, LCB could have processed the dollar-denominated wire transfers anywhere in the world, but specifically chose New York.

Although the court warns that "mere maintenance" of an account would not be sufficient to support the constitutional exercise of personal jurisdiction over the account holder, the Second Circuit stated that, here, LCB utilized the New York bank account for dozens of transactions, wiring several million dollars in total and, thus, the contacts were not "random, isolated, or fortuitous." The Court also distinguished the present case from the In re Terrorist Attacks on Sept. 11th, 2001 case because, here, the jurisdictional basis of the conduct - the wire-transfers - occurred within the forum, rather than outside of New York as in that case. Finally, the Court reasoned that both the state and federal government have an interest in monitoring banks and banking activity to ensure that its system is not used as an instrument to support terrorism and, therefore, taken together with the showing of minimum contacts, the exercise of personal jurisdiction over LCB would not offend principles of fair play and substantial justice.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...64e230d88dc/2/hilite/

Panel: Chief Judge Katzmann and Circuit Judges Kearse, & Sack

Argument: 02/25/2011

Date of Issued Opinion: 10/ 18 /2013

Docket Number: 10-1306-cv

Decided: Affirmed

Case Alert Author: Andrew S. Paliotta

Counsel: Robert J. Tolchin, The Berkman Law Office, LLC, for Plaintiffs-Appellants and Jonathan D. Siegfried, DLA Piper LLP, for Defendant-Appellee.

Author of Opinion: Judge Sack

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 10/20/2013 05:35 PM     2nd Circuit     Comments (0)  

October 16, 2013
  New York v. Next Millennium Realty--Second Circuit
Headline: Second Circuit Holds That CERCLA Allows New York State To Recover Costs of Addressing Groundwater Contamination in Hempstead, Long Island

Area of Law: Environmental Law

Issue(s) Presented: Whether the installation of systems to remove contaminants from drinking water supplies constituted a "remedial" or "removal" action under CERCLA, each of which have different statutes of limitations.

Brief Summary: New York sued under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. et seq. (CERCLA) to recover costs incurred in the cleanup of groundwater contamination in the Town of Hempstead, New York. The Town had installed cleanup systems on its wells in 1990 and 1995, and the State's long-term remediation plan incorporated these systems in 2003. The United States District Court for the Eastern District of New York granted summary judgment to defendants-appellees (various owners and operators of facilities in the relevant area), holding that the suit was time-barred. In so concluding, the district court applied the six-year statute of limitations applicable to "remedial actions" under CERCLA, calculated from commencement of cleanup construction. The Second Circuit, however, held that the cleanup systems were not "remedial," but rather "removal" actions. Therefore, a three-year statute of limitations applied, calculated from completion of the removal action, and the action was not time-barred. The court vacated and remanded for further proceedings consistent with its opinion. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1d9dcfeb832/1/hilite/

Extended Summary: The State of New York sued defendants-appellees under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. et seq. (CERCLA) to recover costs incurred in investigating and addressing groundwater contamination emanating from the New Cassel Industrial Area (the "NCIA") in the Town of Hempstead, New York (the "Town"). Under CERCLA, the federal and state governments can clean up hazardous waste spills with public money and then seek the recovery of costs from the polluters.

The NCIA lies above an aquifer that serves as an important source of drinking water for the Town. Volatile organic compounds ("VOCs") from light industry in the NCIA seeped into the aquifer's groundwater in the 1950s. In 1989, the Town detected VOCs in two of its wells at levels approaching the State's Maximum Contaminant Levels. The Town installed a granulated activated carbon absorption system (the "GAC system") to remove the VOCs in 1990. The Town installed a tower aeration system to supplement the GAC in 1995 because rising concentrations of VOCs increased the cost of running the system and threatened its effectiveness. The DEC began a remedial investigation in 1995 and selected a remedy in 2003 that, among other things, incorporated the Town's GAC and tower aeration systems. Concurrently, the State entered into agreements with potentially responsible parties (owners and operators of facilities in the NCIA), tolling the statute of limitations starting in 2001.

In 2006, New York State filed suit against the various potentially responsible parties under CERCLA, seeking to recover the costs incurred in investigating and responding to the groundwater contamination at the NCIA. Adopting a report and recommendation of the magistrate judge, the United States District Court for the Eastern District of New York deemed the action time-barred. The district court applied the six-year statute of limitations governing suits to recover costs for "remedial" actions. Under 42 U.S.C. § 9613(g)(2)(B), remedial actions are measures to permanently remediate hazardous wastes. That statute of limitations is triggered by the commencement of cleanup construction. The district court found that construction began more than six years before the suit was brought, either upon installation of the GAC in 1990 or upon construction of the tower aeration system in 1995. It also noted that the first tolling agreement took effect more than six years after those dates - in 2001. Therefore, the district court held that the suit was time-barred as a remedial action. The State appealed.

The Second Circuit reversed. It began by explaining that the court has construed CERCLA liberally to advance its dual goals: to allow governments to respond to spills immediately, and to ultimately hold polluters responsible for that cost. It further concluded that the lawsuit here involved a removal action, not a remedial action. Removal actions, in contrast to remedial actions, are "clean-up or removal measures taken to respond to immediate threats to public health and safety." Under CERCLA, removal actions have a different statute of limitations than remedial actions: 42 U.S.C. § 9613(g)(2)(A) imposes a three-year statute of limitations on removal actions, triggered by the completion of the removal action, as opposed to a six-year statute of limitations triggered by the action's commencement. The Second Circuit explained that the installation of the GAC and tower aeration systems were removal actions because they were installed in response to an imminent public health hazard and were designed to address contamination in the wells (not to permanently address the release of the VOCs from the NCIA). Even though they were incorporated into a permanent remedial solution by the DEC, they remained "removal" actions at all times relevant for purposes of the statute of limitations.

The court concluded that removal measures cannot be deemed completed before the State's adoption of a remediation plan incorporating them. Because this suit was brought within three years of the DEC's adoption of a remediation plan in 2003, the action was not time-barred. The court thus vacated and remanded for further proceedings consistent with its opinion.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1d9dcfeb832/1/hilite/

Panel: Circuit Judges Chin and Lohier; District Judge Swain.

Argument Date: 05/13/2013

Date of Issued Opinion: 10/15/2013

Docket Number: No. 12-2894-cv

Decided: Vacated and Remanded

Case Alert Author: Bárbara M. Santisteban

Counsel: Barbara D. Underwood, Solicitor General (Cecelia C. Chang, Deputy Solicitor General, Matthew W. Greico, Assistant Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, New York, New York, for Plaintiffs-Appellants.

Kathleen M. Sullivan (William B. Adams, on the brief), Quinn Emanuel Urquhart & Sullivan, LLP, New York, New York, and Kevin Maldonado, Kevin Maldonado & Partners LLC, Windham, New York; Philip C. Landrigan and Peter D. Aufrichtig, McCarthy Fingar LLP, White Plains, New York; Paul B. Sweeney and Barry S. Cohen, Certilman Balin Adler & Hyman, LLP, East Meadow, New York; John Gregory Martin and Suzanne M. Avena, Garfunkel Wild, P.C., Great Neck, New York; Charlotte A. Biblow and Franklin C. McRoberts, Farrell Fritz, P.C., Uniondale, New York; Michael S. Cohen, Nixon Peabody LLP, Jericho, New York; Miriam Villani, Sahn Ward Coschignano & Baker, PLLC, Uniondale, New York; Thomas R. Smith, Bond, Schoeneck & King, PLLC, Syracuse, New York; Kenneth L. Robinson, Robinson & Associates, P.C., Syosset, New York, and Theodore Warren Firetog, Law Offices of Theodore W. Firetog, Farmingdale, New York; Robert R. Lucic, John E. Peltonen, and Daniel K. Fink, Sheehan Phinney Bass & Green, P.A., Manchester, New Hampshire; Sheila A. Woolson, Epstein Becker & Green, P.C., Newark, New Jersey; and Richard P. O'Leary, McCarter & English, LLP, New York, New York, for Defendants-Appellees.

Author of Opinion:
Judge Chin

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 10/16/2013 07:56 AM     2nd Circuit     Comments (0)  

October 9, 2013
  United States v. Peters
Headline: Second Circuit Holds Bank Fraud Forfeiture Provision Extends to Direct and Indirect Receipts Obtained in Fraudulent Scheme, Not Merely to "Profits," and Affirms Forfeiture Award Against Defendant for Proceeds that He Received Indirectly Through Companies that Defendant Largely Owned and Controlled.

Area of Law: Criminal; Forfeiture

Issues Presented: Whether the bank fraud forfeiture provision in 18 U.S.C. § 982(a)(2) requires forfeiture of all direct and indirect "receipts," rather than just "profits," of the fraud; and whether, and under what circumstances, an individual defendant may be personally liable to forfeit indirect proceeds received through a company the defendant owned and controlled?

Brief Summary: In 2007, defendant-Appellant Frank Peters ("Peters) was convicted by jury in the United States District Court for the Western District of New York of conspiracy to commit bank fraud and of committing bank fraud, wire fraud, and mail fraud. The charges and conviction arose out of fraudulent accounting and related practices engaged in by two auto parts companies primarily owned and operated by Peters and his wife in connection with a line of credit extended to one of the companies by Chase Manhattan Bank ("Chase"). Peters was sentenced to 108 months in prison, and ordered to pay restitution. The District Court subsequently ordered Peters to forfeit an additional $23,154,259 under the bank fraud forfeiture statute, 18 U.S.C. § 928(a)(2).

Peters argued on appeal that forfeiture fine was excessive because it included receipts, rather than just profits, of the bank fraud. He also argued that the district court erred in holding him personally liable, because any loan payments received as a result of the fraudulent scheme were received by his companies and not by him individually. The Second Circuit held that "proceeds" within Section 928(a)(2) should be broadly interpreted to include all receipts received in connection with bank fraud scheme, in accordance with the punitive intent of the provision. The Second Circuit also held that, under applicable federal law rather than the New York State law standards applied by the District Court, Peters was properly found personally liable for proceeds that he received indirectly through the two companies involved in the fraud that were primarily owned and extensively controlled by Peters and his wife.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...a6c234d62768/2/hilite/

Extended Summary: In 1990, defendant-appellant Frank Peters ("Peters") and his wife acquired World Auto Parts, Inc. ("WAPI) an auto-parts company and, through WAPI, subsequently acquired a second company, renamed Bighorn Core, Ltd. ("Bighorn"). Peters's wife was the Chief Executive Officer and 85% owner of both companies. Peters as President owned 13%; his sister-in-law owned 1% and a fourth, unrelated individual, owned 1%. The combined companies entered into an asset-backed mortgage agreement with Chase Bank, enabling the companies to borrow against accounts receivable (up to 85%) and current inventory (up to 60%) to a maximum $10.5M. Pursuant to the loan agreement, customer payments to the companies were to be deposited into a Chase account to be used by Chase to service the companies' debt and pay off a portion of the principal. The companies practiced fraudulent accounting to embellish their cash-flow, and Peters also created ITEC, a company into which he spun off parts of WAPI and Bighorn. Using ITEC, Peters opened an account at M&T Bank and had ITEC customers (formerly WAPI and Bighorn customers) make payments to that account, depriving Chase of monies to which it was entitled under their pre-existing loan agreement.

Peters was tried by jury and convicted in the United States District Court for the Western District of New York of conspiracy to commit bank fraud and of committing bank fraud, wire fraud, and mail fraud. Peters was sentenced to 108 months in prison, and ordered to pay restitution. The District Court subsequently ordered Peters to forfeit an additional $23,154,259 under the bank fraud forfeiture statute, 18 U.S.C. § 928(a)(2). He appealed on several grounds and the Second Circuit's opinion addresses his appeal to the forfeiture portion of his sentence (the court addressed the other grounds for his appeal, and affirmed his convictions, in separate summary orders issued today).

The Federal Sentencing Guidelines require defendants convicted of defrauding financial institutions to forfeit to the United States "any property constituting, or derived from, proceeds the person obtained directly or indirectly, as the result of such violation." 28 U.S.C. § 928(a)(2).
On appeal, Peters argued that the statutory term "proceeds" should be read to require forfeiture of "profits," and not, more generally, receipts as interpreted by the District Court. The Second Circuit disagreed however, concluding that under the punitive bank fraud forfeiture provision at issue here, a broad reading of the term 'proceeds' to include receipts, and not merely profits, is appropriate.

Peters also argued that he was protected from liability because the benefits of the fraudulent activity accrued to his companies, rather than to him personally. In holding Peters personally liable to forfeit proceed received indirectly from WAPI and ITEC, the District Court had found that, under New York state common law, Peters' degree of ownership and control over these companies justified "piercing the corporate veil" to hold Peters personally liable for the fraudulent proceeds. By contrast, the Second Circuit concluded the issue should be under federal law, rather than New York law, but nevertheless determined evaluating similar factors, that Peters "so extensively control[led and] dominat[d]" WAPI and ITEC that the fraudulent monies paid to these corporations were effectively in his individual control and justified holding him personally liable. Specifically, the Second Circuit held that Peters's familial ownership interest of 99%, level of control exercised over the company, authority to direct the disposition of assets and the extensive degree to which he exercised his authority, as well as his use of corporate assets for personal expenses, all provided evidence that he had derived proceeds indirectly by defrauding a financial institution within the plain meaning of the statute.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...6c234d62768/2/hilite/

Panel: Circuit Judges Sack and Lynch; Judge Guido Calabresi recused himself and the remaining panelists made their determination in accordance with Second Circuit Internal Operating Procedure E(b). See 28 U.S.C. § 46(d).

Argument Date: 12/21/2012

Date of Issued Opinion: 10/9/2013

Docket Nos.: 11-610-cr (L)

Decided: Affirmed

Case Alert Author: Laura Young

Counsel: James W. Grable, Jr., Connors & Vilardo for Peters-Appellant; and Joseph J. Karaszewski, Assistant U.S. Attorney, for Appellee.

Author of Opinion: Judge Sack

Case Alert Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 10/09/2013 02:48 PM     2nd Circuit     Comments (0)  

October 4, 2013
  United States v. McLaurin - Second Circuit
Case Name: United States v. McLaurin - Second Circuit

Headline: Second Circuit Strikes Down Parole Condition of Penile Plethysmography Testing

Area of Law: Criminal

Issue(s) Presented: Whether, as applied to a particular defendant, penile plethysmography testing was unreasonably intrusive and unrelated to the permissible goals of sentencing.

Brief Summary: David McLaurin is a convicted sex offender and thus required by federal law to register any changes of address in accordance with the Sex Offender Registration and Notification Act (SORNA). In 2011, McLaurin moved from Alabama to Vermont, and although he informed the Alabama authorities of his move, he failed to file the requisite paperwork with the Vermont registry. McLaurin was subsequently arrested for violating SORNA and pled guilty. McLaurin received 15 months in prison, and five years of supervised release, including a sex offender treatment program that might involve "penile plethysmography," as directed by the parole officer. Penile plethysmography is a procedure that involves placing a pressure-sensitive device around a man's penis, presenting him with sexual images, and evaluating his level of sexual attraction by measuring changes in his erectile responses. The Second Circuit struck down this requirement, holding that "this extraordinarily invasive condition is unjustified, is not reasonably related to the statutory goals of sentencing, and violates McLaurin's right to substantive due process," particularly given that the condition had been imposed only in connection with the defendant's conviction for failing to complete paperwork.

To read the full opinion please visit http://www.ca2.uscourts.gov/de...9f0440fc792/1/hilite/

Extended Summary: The federal Sex Offender Registration and Notification Act (SORNA) requires sex offenders to "register, and keep the registration current, in each jurisdiction" that they live in. In 2001, David McLaurin was convicted of producing child pornography after he took photographs of his thirteen year old daughter with her breasts exposed. His daughter informed authorities that she had requested the photo shoot to help her modeling career. McLaurin, an Alabama resident, pled guilty to one count of producing child pornography in violation of Alabama law and was sentenced to ten years' imprisonment; most of his sentence was suspended.

Ten years later, in 2011, McLaurin moved to Putney, Vermont. Before his move, he informed the Alabama authorities of his new address in Vermont. Shortly thereafter, Vermont authorities informed McLaurin how to fill out the paper work for the sex offender registry, but he never filled it out. Later in 2011 McLaurin lost his job, and returned to Alabama. McLaurin was charged in Vermont for violating SORNA, and, in October 2011, was arrested in Alabama and returned to Vermont. McLaurin pled guilty and was sentenced in the United States District Court for the District of Vermont to fifteen months' imprisonment and five years of supervised release. While the district court recognized that McLaurin was "unlikely to reoffend again," and that he disclosed his whereabouts (but simply failed to file the required paperwork), McLaurin was still sentenced to fifteen months in prison and five years of supervised release.

The probation office recommended, as one of the conditions of supervised release, having McLaurin "participate in an approved program of sex offender evaluation and treatment, which may include . . . plethysmograph examinations, as directed by the probation officer." Penile plethysmography is a procedure that involves placing a pressure-sensitive device around a man's penis, presenting him with sexual images, and evaluating his level of sexual attraction by measuring changes in his erectile responses. McLaurin objected to this condition, but the district court imposed it anyway, characterizing it as standard.

McLaurin appealed, arguing that the condition was "unnecessary, invasive, and unrelated to the sentencing factors specified in 18 U.S.C. § 3553(a) and therefore impermissible as a discretionary condition of supervised release." The Second Circuit agreed. The court explained that the penile plethysmography condition was such a serious invasion of liberty that it could only be justified if narrowly tailored to serve a compelling government interest. In deciding whether this standard was satisfied, the Second Circuit applied a two-part test, looking both at whether the sentencing goal to which the condition related was reasonable and at whether the condition represented "a greater deprivation of liberty than is necessary to achieve that goal."

The court applied this standard to each of the government's four asserted goals for the condition: the need to provide the defendant with correctional treatment; the protection of the public; deterrence; the need to provide the defendant with needed medical care or other correctional treatment in the most effective manner, and the nature and circumstances of the offense and the history and characteristics of the defendant. It found them all lacking. As to correctional treatment, the court noted that the government "made no showing to the district court that plethysmography is reliable or therapeutically beneficial." As to protection of the public, the court contrasted the plethysmography requirement with other conditions that are "reasonably calculated to protect the public," such as restrictions on where sex offenders may live and on whom and what they may access. "We see no reasonable connection between fluctuating penis size and public protection," the court observed. On deterrence, the court commented that "it [is] odd that, to deter a person from committing sexual crimes, the Government would use a procedure designed to arouse and excite a person with depictions of sexual conduct closely related to the sexual crime of conviction." Finally, looking into the nature and circumstances of the offense and the history and characteristics of the defendant, the court noted that McLaurin's crime was failing to file paperwork, and that ten years had passed between the underlying sexual offense and the failure to register as a sex offender.

The court thus vacated the portion of McLaurin's release regarding penile plethysmography, holding that "[w]e fail to see any reasonable connection between this defendant, his conviction more than a decade ago, his failure to fill out paperwork, and the government-mandated measurement of his penis."

Panel: Circuit Judges Guido Calabresi, Jose A. Cabranes, and Barrington D. Parker

Argument: 06/18/2013

Date of Issued Opinion: 10/03/2013

Docket Number: 12-3514-cr

Decided: Vacated and Remanded to district court.

Case Alert Author: Sophia Sofferman

Counsel: Steven L. Barth, Michael L. Desautels (on the brief) Federal Public Defenders, Burlington, VT, for Plaintiff - Appellant, William B. Darrow and Gregory L. Waples (on the brief ), Tristram J. Coffin, United States Attorney for the District of Vermont, for Defendant - Appellee

Author of Opinion: Circuit Judges Calabresi and B.D. Parker (co-authors)

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/04/2013 09:07 AM     2nd Circuit     Comments (0)  

September 27, 2013
  United States v. Bout - Second Circuit
Headline: Second Circuit Upholds Conviction of International Arms Trafficker

Area of Law: Criminal, Constitutional, International

Issues Presented: Whether defendant's conviction for conspiracy to kill United States nationals and on related charges should be overturned on the grounds that the United States government's conduct in pursuing and prosecuting him constituted a "vindictive prosecution" in violation of his constitutional rights and principles of international law?

Brief Summary: Defendant-appellant Viktor Bout ("Bout"), an international arms trafficker, was the subject of a sting operation executed by the Drug Enforcement Administration ("DEA") ending in 2008. In essence, the DEA used confidential sources to represent themselves as members of the Fuerzas Armadas Revolucionarias de Colombia (the "FARC") to initiate a weapons purchase from Bout. The day after Bout attended a meeting with the confidential sources in Thailand, Bout was arrested by Thai authorities.

A grand jury sitting in the United States District Court for the Southern District of New York returned an Indictment, charging Bout under federal law, with conspiracy to kill United States nationals, officials and employees, conspiracy to transport missiles capable of destroying aircraft, and conspiracy to provide material support to a foreign terrorist organization. After two years of legal proceedings in the Thai courts related to Bout's extradition, Bout was extradited to the United States for a jury trial in the Southern District of New York. The jury found Bout guilty on all counts, and upon entering a judgment of conviction, the district court sentenced Bout to concurrent terms of 180 months' imprisonment on three of the counts and 300 months' imprisonment on the remaining count. Bout appealed his conviction, arguing that the United States government's conduct constituted an outrageous and vindictive prosecution in violation of his constitutional rights. The Second Circuit rejected the defendant's arguments in full and affirmed his conviction.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...e6a421804c0/2/hilite/

Extended Summary: In late 2007, the Drug Enforcement Administration ("DEA") planned a sting operation with the help of three confidential sources. The target of the operation was defendant-appellant Viktor Bout ("Bout"), an international arms trafficker. Two of the confidential sources went undercover as members of the Fuerzas Armadas Revolucionarias de Colombia (the "FARC"), an organization that the United States government has deemed a foreign terrorist organization. In January of 2008, the three confidential sources met with Bout's former associate, Andrew Smulian ("Smulian"), in Curacao to discuss a weapons deal. The deal was discussed under the pretext that FARC wanted these weapons to help their movement against the Colombian government and the United States. Later, Bout met with Smulian in Moscow to discuss the deal in detail. Further discussions were held in Romania between Smulian and the confidential sources in which the confidential sources were told that 100 surface-to-air missiles would be available and other equipment could be made available.

In March of 2008, Bout and Smulian met with the confidential sources in Thailand. During this meeting, a recording was made of Bout stating that had a variety of weapons available for the FARC to purchase and that Bout supported the FARC's intention to kill Americans. The day after this meeting, Bout and Smulian were arrested. Within a month, a grand jury sitting in the United States District Court for the Southern District of New York returned an indictment against Bout charging him with conspiracy to commit murder against Unites States nationals, and related charges. Subsequently, in August 2009, a lower court in Thailand denied Bout's extradition to the United States. A year later, however, a Thai appellate court reversed that decision and Bout was extradited in November of 2010.

In October of 2011, Bout was tried before a jury in the Southern District of New York. The jury convicted Bout on four counts, including conspiracy to kill United States nationals, conspiracy to kill United States officials and employees, conspiracy to export missiles capable of destroying aircraft, and conspiracy to provide material support or resources to a foreign terrorist organization, all violations of federal law. The district court entered a judgment of conviction and sentenced Bout to concurrent terms of 180 months' imprisonment on three of the counts and 300 months' imprisonment on the remaining count. The district court also denied post-trial motions to dismiss the indictment.

Bout's main argument on appeal was that the government's conduct in pursuing and prosecuting him was so outrageous that it constituted a "vindictive prosecution" in violation of his due process rights. The Second Circuit rejected his argument, finding no evidence that the government harbored an actual vindictive motive or "animus" in their pursuit or prosecution of Bout but, rather, that it arose from their long-held belief that he was engaged in widespread criminal activity. The court noted that the government had placed Bout on "United States and United Nations 'sanction lists' since the early 2000s" and found, too, that Bout had not alleged any actual coercive conduct by the government. The Second Circuit also rejected Bout's contention that his conviction should be overturned on the ground that he was illegally extradited, stating that it was established law that a United States court could not "second-guess" a decision by a foreign country to extradite a defendant to the United States and that a defendant may be legally prosecuted even if they were illegally extradited. Rejecting two final arguments in short order, the Second Circuit affirmed Bout's conviction and remanded the case to the district court to correct a clerical error in the judgment of conviction.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...e6a421804c0/2/hilite/

Panel: Judges Cabranes, Hall, and Chin.

Argument Date: 08/22/2013

Date of Issued Opinion: 09/27/2013

Docket Number: 12-1487-cr

Decided: Affirmed and remanded for the purpose of correcting a clerical error.

Case Alert Author: Jeffrey S. Peters

Counsel: ALBERT Y. DAYAN, Law Office of Albert Y. Dayan, for Appellant Viktor Bout. ANJAN SAHNI (Assistant United States Attorney for the Southern District of New York), (Brendan R. McGuire and Michael A. Levy, on the brief), for Appellee United States of America

Author of Opinion: Judge Cabranes

Case Alert Circuit Supervisor: Professor Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 09/27/2013 08:33 PM     2nd Circuit     Comments (0)  

September 25, 2013
  Lederman v. New York City Department of Parks and Recreation - Second Circuit
Headline: Second Circuit Affirms Dismissal of First Amendment Challenge to City Regulation Limiting Display of Wares in City Parks and Upholds Protective Order Barring Plaintiff Street Artists from Deposing Mayor Bloomberg and Former Deputy Mayor Skyler

Area of Law: First Amendment; Federal Civil Procedure

Issues Presented: Whether a new New York City street vending regulation violated the First Amendment and whether Mayor Bloomberg and former Deputy Mayor Skyler should be compelled to submit to depositions.

Brief Summary: Plaintiff street artists Robert Lederman and Jack Nesbitt appealed the dismissal of their complaint alleging that City regulations limiting the sale of expressive matter in New York City parks violate the First Amendment. They also challenged the United States District Court for the Southern District of New York's grant of a protective order barring them from deposing Mayor Bloomberg and Deputy Mayor Sklyer.

The Second Circuit affirmed the judgment of the District Court, finding that the regulations were content-neutral and did not violate the First Amendment. Additionally, the Second Circuit affirmed the District Court's protective order barring the depositions of Bloomberg and Skyler, holding that in order to depose high-ranking government officials to obtain information regarding reasons for taking official action, plaintiffs must demonstrate exceptional circumstances and no exceptional circumstances existed in this case.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...75e58e5f930/3/hilite/

Extended Summary: Plaintiffs Robert Lederman and Jack Nesbitt are artists who sell their works on sidewalks and in New York City public parks. In 2010, the City revised City vending regulations due to an increase in artists selling their wares in City parks. The new regulations allow for vending without a permit anywhere in most City parks so long as the vendors comply with certain restrictions on the size and placement of vending tables. However, in Union Square Park, Battery Park, High Line Park, and a portion of Central Park, vendors may only vend in designated spots, available on a first-come, first-served basis.

Plaintiffs challenged the 2010 regulations, suing the New York City Department of Parks and Recreation, the Parks Commissioner, and Mayor Bloomberg, alleging that the regulation limiting the sale of expressive matter in New York City parks violates the First Amendment. During discovery, plaintiffs sought to depose Mayor Bloomberg and former Deputy Mayor Skyler but, in June 2011, the United States District Court for the Southern District of New York issued a protective order, barring those depositions. Shortly thereafter, the District Court granted summary judgment to the defendants, holding that the 2010 regulations were content-neutral time, place, and manner regulations that did not violate the First Amendment.

On the First Amendment issue, the Second Circuit affirmed the decision of the District Court, finding that the regulations were content-neutral time, place, and manner restrictions that had been narrowly tailored to serve the City's significant government interest in regulating its parks.

The Second Circuit also went on to uphold the protective order of the District Court. In doing so the Second Circuit adopted the rule set forth by the Supreme Court in United States v. Morgan, that "to depose a high-ranking government official, a party must demonstrate exceptional circumstances justifying the deposition." Here, the Second Circuit found that plaintiffs had not demonstrated exceptional circumstances because they failed to identify specific information needed from Bloomberg and Skyler and they did not allege that Bloomberg and Skyler had either first-hand knowledge of the litigated claims or information that could not be obtained through other means.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...75e58e5f930/3/hilite/

Panel: Judges Cabranes, Hall, and Chin

Date of Issued Opinion: 09/25/2013

Docket Number: 12-4333-cv

Decided: Affirmed

Case Alert Author: Sarah Tuttle

Counsel: Julie Milner, Milner Law Office for Plaintiffs-Appellants. Edward F.X. Hart and Sheryl Neufeld (on the brief) and Julie Steiner (Corporation Counsel of the City of New York) for Defendant-Appellees.

Author of Opinion: Judge Chin

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 09/25/2013 09:10 PM     2nd Circuit     Comments (0)  

September 23, 2013
  Newsday v. County of Nassau--Second Circuit
Case Name: Newsday v. County of Nassau - Second Circuit

Headline: Second Circuit Holds That News Organizations Have First Amendment Right of Access to Hearing Transcript in Case Against Nassau County Police Department

Area of Law: First Amendment

Issue Presented: Whether the First Amendment's presumptive right of access to court proceedings applied to civil contempt proceedings and related documents, and if so, whether that presumptive right of access required disclosure under the circumstances of this case.

Brief Summary: News organizations including Newsday and News 12 intervened in a high-profile federal civil rights case against the Nassau County Police Department, seeking access to a sealed courtroom proceeding (a civil contempt hearing) as well as an investigative report of the Nassau County Police Department's Internal Affairs Unit. After the United States District Court for the Eastern District of New York ruled that only a redacted transcript of the civil contempt hearing would be made available, and that the investigative report would remain sealed, the news organizations appealed. They argued that they were entitled to the complete transcript and the investigative report under both the First Amendment's presumptive right of access and the common law right of access to courts. On appeal, the Second Circuit reversed the district court's conclusion to redact part of the hearing transcript, holding that the press was entitled to a copy of the entire transcript, but affirmed the district court's decision to keep the report under seal. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...564218288d9/1/hilite/

Extended Summary: This case arose from an underlying civil rights action filed against the Nassau County Police Department and various other defendants (collectively, the "defendants") by a deceased woman's mother, who claimed that the defendants had negligently contributed to her daughter's fatal stabbing by failing to protect her from her ex-boyfriend. In pursuing her case, the plaintiff sought the production of an investigative report (the "Report") that the Nassau County Police Department Internal Affairs Unit had produced after investigating the murder. After obtaining it in discovery, plaintiff's counsel attempted to release the Report during a press conference. Defendants moved for an injunction to prohibit its release. After hearing oral argument, the magistrate judge granted defendants' motion to temporarily prohibit the release of the Report, concluding that the defendants met the required showing of "good cause" under the Federal Rules. Meanwhile, Newsday LLC and News 12 Networks LLC (collectively, the "press intervenors") were granted leave to intervene in the case to oppose this motion and were permitted to file a motion to unseal any motion papers or transcripts in relation to the Report.

Defendants later reached a settlement for $7.7 million with the plaintiff contingent upon approval by the Legislature and Interim Finance Authority of Nassau County. To approve the settlement, members of the legislature asked to review the evidence. In allowing review, the United States District Court for the Eastern District of New York issued a confidentiality order which prohibited the dissemination of the information contained in the report to others. Later, a member of the legislature made a statement on television which purportedly contained information from the Report.

The Police Benevolent Association (the "PBA") intervened to enforce the district court's confidentiality order, and a civil contempt proceeding ensued against the legislator who had spoken about the report on television. The district judge requested a witness from the PBA to testify about the Report. Nassau County and the PBA made a request to seal the courtroom, but a reporter from Newsday objected. The district court overruled the objection and allowed the courtroom to be sealed. During the sealed proceedings, the Assistant Chief of the Police Department testified about the contents of the Report. The officer reviewed the report prior to his testimony and referred to it twice during his testimony. While the courtroom was closed, the contempt defendant testified that the information he revealed was publicly available and the district court reopened the courtroom. However, after the officer was recalled, the district court sealed the courtroom again. At the conclusion of his testimony, the court was reopened for closing arguments. After formal objection by the press intervenors, the district court concluded that the magistrate judge's protective order coupled with the district court's confidentiality order required the hearing transcript and the Report to remain under seal. However, the district court balanced the public's interest and the common law against the interest of confidentiality and concluded that portions of the hearing transcript should be unsealed.

On appeal by the press intervenors, the Second Circuit held that the First Amendment presumptive right of access applies to civil contempt proceedings. It noted that these proceedings "carry the threat of coercive sanctions and seek to enforce the court's own orders." However, when determining if the right applied to judicial documents, the Second Circuit stated that it applied to "those documents necessary to understand the merits of a civil contempt proceeding."
The Second Circuit then concluded that the hearing transcript did not raise any significant confidentiality concerns, and ordered a full, unredacted version of the transcript be released.

Turning to the Report, the Second Circuit affirmed the district court's conclusion to seal the Report, but determined that it had to review "(a) whether [the Report] is a judicial document to which the First Amendment right applies, and if so, (b) whether the right of access is defeated in this case." Focusing on the use of the Report during the proceedings, the Second Circuit found that the minimal use of the Report in the proceedings would not assist the public in understanding issues raised before the district court and therefore the Report should remain under seal. Judge Lohier wrote a separate concurrence.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...564218288d9/1/hilite/

Panel: Judges Lynch, Lohier, and Carney.

Argument Date: 03/06/2013

Date of Issued Opinion: 09/23/2013

Docket Number: 12-2731-cv

Decided: Affirmed in Part, Reversed in Part, and Remanded.

Case Alert Author: Jeffrey S. Peters

Counsel: DAVID A. SCHULZ (Jacob P. Goldstein, on the brief), Levine Sullivan Koch & Schulz, LLP, New York, NY, for Intervenors-Appellants. DENNIS J. SAFFRAN (Office of the Nassau County Attorney) for John Ciampoli, County Attorney of Nassau County, Mineola, NY, for Defendants-Cross-Claimants-Appellees and Defendants-Appellees. SETH H. GREENBERG, Greenberg Burzichelli Greenberg P.C., Lake Success, NY, for Intervenor-Appellee.

Author of Opinion: Judge Lynch (majority); Judge Lohier (concurring).

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/23/2013 09:03 PM     2nd Circuit     Comments (0)  

September 18, 2013
  Velez v. City of New York - Second Circuit
Headline: Second Circuit Upholds Verdict Rejecting Claim against New York City for Negligence in the Wrongful Death of Confidential Police Informant, Finding No "Special Relationship" Existed Between New York City Police Officers and the Informant

Area of Law: Torts

Issues Presented: Whether a special relationship or duty must exist between a confidential informant and police officers to hold New York City liable for negligence in the informant's wrongful death under New York law.

Brief Summary: Anthony Valdez was a former confidential informant to New York City Police Officers Rudolph Hall & Michael Ruggerio. In 2004, Valdez tipped off police to a stash of guns and drugs at an apartment owned by a man named "Sonny" in New York City. In a raid on the apartment based upon the tip, police took various people, but not Valdez who was also present, into custody. Shortly after the raid, Valdez was shot and killed outside that apartment building by Sonny. Valdez's estate sued the two officers and New York City for negligence in his wrongful death, claiming the New York Police Department (NYPD) had a duty to protect Valdez, and by not taking him into custody, exposed him to danger by making it obvious he was an NYPD informant. At trial, the United States District Court for the Eastern District of New York instructed the jury that police generally owe a duty of protection to the public at large, rather than an individual person and, therefore, the City could not be negligent in Valdez's death unless a special relationship existed between Valdez and the NYPD officers. A jury found the defendants not guilty and Valdez's estate appealed, seeking a new trial on the basis of erroneous jury instructions. The United States Court of Appeals for the Second Circuit affirmed and denied the Appellant a new trial.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1a7cb435409/1/hilite/


Extended Summary: Anthony Valdez was a former confidential informant to New York City Police Department (NYPD) officers, Rudolph Hall & Michael Ruggerio. In 2004, Valdez told Officer Hall about a possible a stash of guns and drugs at an New York City apartment owned by a man named "Sonny" and indicated to Hall that he would call the NYPD's anonymous tip line and provide the same information. Officer Hall told his supervisor, Officer Ruggerio, to expect an anonymous tip, but did not explicitly indicate Valdez was the source. Acting on the tip, Ruggerio's unit raided the apartment, with officers instructed to bring in for questioning, if present, individuals who were subjects of outstanding NYPD arrest or parole warrants. During the raid, the officers took two people into custody, but not Valdez, who was also present. Shortly after police left the scene, Valdez was shot and killed outside that same apartment building by Sonny.

Valdez's estate sued Officers Hall and Ruggerio and New York City asserting federal and state constitutional claims, a claim for negligent "training," and charging the defendants with negligence in Valdez's wrongful death. Specifically, his estate argued that the NYPD had a duty to protect Valdez and, by not taking him into custody, exposed him to danger by making it obvious he was a police informant. The United States District Court for the Eastern District of New York dismissed the constitutional claims as a matter of law and, on the negligence claim, instructed the jury that because police generally owe a duty of protection to the public at large, rather than an individual person, the City could not be negligent in Valdez's death unless a special relationship existed between Valdez and the NYPD officers. A jury found the defendants not guilty and Valdez's estate appealed for a new trial on the basis of erroneous jury instructions.

The Second Circuit affirmed, and denied the request for a new trial. Citing the New York Court of Appeals' June 2013 decision in Applewhite v. Accuhealth, Inc., the Second Circuit agreed with the District Court that, under New York law, when a municipality is engaged in a governmental function at the time of the alleged negligence, such as "providing police protection," a plaintiff must prove the municipality owed a "special duty" to the injured party. The Second Circuit explained that to establish that a special relationship existed between the NYPD and Valdez, the jury had to find the evidence at trial sufficiently demonstrated that: 1) the NYPD assumed an affirmative duty to act on behalf of Valdez; 2) Officer Hall and Ruggerio knew that inaction could lead to harm; 3) there was direct contact between the officers and Valdez; and 4) Valdez justifiably relied on the NYPD's duty to act. The Second Circuit concluded that the evidence adduced at trial did not compel the conclusion that a threat to Valdez's life was reasonably apparent to officers Hall and Ruggerio and, therefore, upheld the jury's determination that the plaintiff had failed to sustain its burden of proof. The Second Circuit also determined that the District Court correctly instructed the jury that all four elements of a special relationship had to be established as to Hall or Ruggerio, the City's "agents," in order for New York City to be liable. The court concluded that Hall's and Ruggerio's knowledge of Velez's identity and role in the police operation, but not of any potential danger to him, was "fatal to plaintiff's claim against the City."

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1a7cb435409/1/hilite/

Panel: Judges Lynch, Lohier, & Carney

Argument: 03/06/2013

Date of Issued Opinion: 09/18/2013

Docket Number: 12-1965-cv

Decided: Affirmed

Case Alert Author: Andrew S. Paliotta

Counsel: Michael G. O'Neill for Plaintiff-Appellant and Kathy H. Chang, Assistant Corporation Counsel for the City of New York (New York City Law Department)

Author of Opinion: Judge Lynch

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 09/18/2013 08:00 PM     2nd Circuit     Comments (0)  

September 16, 2013
  Trezziova v. Kohn--Second Circuit
Headline: Second Circuit Holds that Plaintiffs' Madoff-Related State Law Class Action Claims Against JPMorgan Chase & Co. and the Bank of New York Mellon Corporation Are Precluded By the Securities Litigation Uniform Standards Act of 1998 ("SLUSA")

Area of Law: Securities

Issue Presented: Whether the plaintiffs' state law claims alleged a "misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security" and were thus precluded by SLUSA.

Brief Summary: The plaintiffs, who represented various investors in foreign investment vehicles that had invested in Bernard L. Madoff Investment Securities ("Madoff Securities"), filed suit against JPMorgan Chase & Co. ("JP Morgan") and the Bank of New York Mellon Corporation ("BNY"), the banks at which Madoff Securities' accounts were held. They brought state law class action claims alleging that JPMorgan and BNY had known that Madoff Securities was violating its fiduciary duties and committing fraud, but did nothing because they wanted to continue collecting fees. The United States District Court for the Southern District of New York dismissed the claims against JPMorgan and BNY, holding that they were precluded by the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), which was designed to ensure that class actions affecting the national securities market would be governed by federal securities law. The Second Circuit affirmed, explaining that SLUSA is "broadly worded" and that the allegations in the complaint were "more than sufficient to satisfy SLUSA's requirement that the complaint allege a 'misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.'" To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...8c6698ef8a3/2/hilite/

Extended Summary: In 2008, a number of foreign investment corporations - Thema International Fund plc ("Thema"), Herald Fund SPC-Herald USA Segregated Portfolio One ("Herald SPC"), Herald (LUX) U.S. Absolute Return Fund ("Herald Lux"), and Primeo Select Fund and Primeo Executive Fund (together, "Primeo") - channeled funds from various investors to Bernard L. Madoff Investment Securities ("Madoff Securities"). It was estimated that Thema invested over $1 billion, while Herald SPC and Herald Lux invested approximately $1.5 billion and $225 million, respectively. Investors of the investment vehicles, unsurprisingly, suffered substantial losses when the Madoff Ponzi scheme was exposed.

Repex Ventures S.A., an investor in Herald Lux, filed a state law-based class action lawsuit in the Southern District of New York. Once other investors began to file similar claims against the foreign corporations, the district court consolidated the actions and appointed lead plaintiffs for each group of investors. Neville Seymour Davis was appointed lead plaintiff for the proposed class of Thema investors, Repex Ventures for the proposed class of Herald investors, and Schmuel Cabilly for the proposed class of Primeo investors. Davis and Repex filed amended class action complaints and later named Dana Trezziova, an investor in Herald SPC, as co-plaintiff. Davis, Repex, and Trezziova filed suit against a number of defendants in addition to the investment corporations, among which were managers and directors of the corporations, members of the Madoff family, and JPMorgan and BNY, where the Madoff Securities' accounts were held. The allegations against the foreign investment companies centered on the theme that they had not performed any independent investment selection or management, instead funneling the investments to Madoff Securities in exchange for fees. As to JPMorgan and BNY, the plaintiffs alleged that these banks had possessed actual knowledge that Madoff Securities was violating its fiduciary duties and committing fraud, but did nothing, choosing instead to ensure their own profits.

The district court ultimately dismissed the claims against all of the defendants. Second Circuit affirmed most of these dismissals in a summary order, see http://www.ca2.uscourts.gov/de...04d09ef973e/1/hilite/, and wrote a separate opinion affirming the dismissal of the claims against JPMorgan and BNY.

In its opinion, the Second Circuit explained that in an effort to combat "abusive and
extortionate securities class actions," Congress passed the Private Securities Litigation Reform Act (the "PSLRA"), 15 U.S.C. §§ 77z - 1, 78u - 4, in 1995. The PSLRA established more stringent pleading requirements for those securities fraud class actions filed in federal courts, and plaintiffs subsequently began filing their suits in state court to avoid compliance with the PSLRA. In response, in 1998 Congress enacted SLUSA, which provided that no action "based upon the statutory or common law of any State or subdivision thereof may be maintained in any State or Federal court by any private party alleging . . . a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security." 15 U.S.C. § 78bb(f)(1). Section 18(b) of the Securities Act of 1933 defines a "covered security" as one that is "listed, or authorized for listing, on the national exchanges" or has been "issued by an investment company that is registered, or that has filed a registration statement, under the Investment Company Act of 1940." 15 U.S.C. § 77r(b).
The Second Circuit agreed with the district court that SLUSA applied to the plaintiffs' claims against JPMorgan and BNY, rejecting the arguments of Trezziova and Davis refuted that their investments with the foreign corporations were independent of Madoff Securities' transactions. The Second Circuit emphasized that the plaintiffs' complaints against the banks were "predicated...on the banks' relationship with, and alleged assistance to, Madoff Securities' Ponzi scheme, which indisputably engaged in purported investments in covered securities on U.S. exchanges." Furthermore, the plaintiffs' intentional or unintentional avoidance of explicit securities fraud language did not successfully shield their claim from SLUSA's requirements. In sum, the Second Circuit concluded that the plaintiffs were alleging a "misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security," and that SLUSA therefore applied.


Panel: Circuit Judges Parker and Carney; District Judge Rakoff, sitting by designation.

Argument Date: 04/05/2013

Date of Issued Opinion: 09/16/2013

Docket Number: No. 12‐156‐cv (L), 12‐162 (Con.)

Decided: Affirmed.

Case Alert Author: Amanda Zefi

Counsel: Francis A. Bottini, Jr., Chapin Fitzgerald Sullivan & Bottini LLP, San Diego, CA, for Plaintiff-Appellant Neville Seymour Davis. Timothy Joseph Burke, Stull, Stull & Brody, Beverly Hills, CA, for Plaintiff-Appellant Dana Trezziova. Susan L. Saltzstein, Skadden ARps, Slate, Meagher, & Flom, LLP, New York, NY, for Defendant-Appellee UniCredit S.p.A. Michael E. Wiles, Debevoise & Plimpton LLP, New York, NY, for Defendants-Appelles Alberto Benbassat, Stephane Benbassat, Genevalor, Benbassat & Cie, Gerald J.P. Brady, Daniel Morrissey, David T. Smith, Thema Asset Management Limited, and Thema International Fund plc. Thomas J. Moloney, Cleary Gottlieb Steen & Hamilton LLP, New York, NY, Defendants-Appellees HSBC Holdings plc, HSBC Securities Services (Ireland) Limited, HSBC Institutional Trust Services (Ireland) Limited, and HSBC Securities Securities (Luxembourg) S.A., Patricia M. Hynes, Allen & Overy LLP, New York, NY, for Defendant-Appellee JP Morgan Chase & Co., Thomas G. Rafferty, for Defendant-Appellee PriceWaterhouse Coopers (Dublin).

Author of Opinion: Judge Rakoff

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/16/2013 04:04 PM     2nd Circuit     Comments (0)  

September 9, 2013
  United States of America v. Matthew Getto - Second Circuit
Headline: Second Circuit Refuses to Exclude Evidence Obtained Through Searches and Seizures Undertaken in Israel by Israeli National Police pursuant to FBI Request

Area of Law: Constitutional, Criminal

Issue(s) Presented: Whether evidence obtained by foreign law enforcement authorities is subject to exclusion under the Fourth Amendment.

Brief Summary: Defendant-appellant Matthew Getto, an American citizen living in Israel prior to his arrest, participated in a scheme based in Israel to defraud American citizens. The FBI, after receiving a tip from a United States witness and conducting an initial investigation, filed a request with the Israeli National Police (INP) to investigate the scheme. Pursuant to the request, the INP investigated and eventually obtained Israeli court authorization to search a room used to facilitate the fraud. Based in part on the evidence gathered during the search, Getto was arrested in the United States in 2009 and charged with conspiracy to commit mail and wire fraud in telemarketing. Getto moved to exclude the evidence gathered by INP as inadmissible under the Fourth Amendment. The United States District Court for the Southern District of New York denied his motion and Getto was convicted under 18 U.S.C. §§ 1349, 2326(2). The United States Court of Appeals for the Second Circuit affirmed, finding that the Fourth Amendment did not apply to the evidence obtained by foreign law enforcement officials. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...-4f06-b86e-195fbc2eaa

Extended Summary: Matthew Getto, an American citizen, participated in an elaborate telemarketing scheme, based in Israel, and aimed at defrauding Americans. In essence, Getto and other conspirators, posing as lawyers or other staff working for a fictional lottery, called and informed American citizens that they had won a substantial international sweepstakes, and requested money from the victims to pay taxes and fees. In 2008, acting on a tip from a witness in the United States, the FBI performed an initial investigation and then formally requested that the Israeli National Police (INP) conduct a further investigation. Eventually, the INP obtained Israeli court approval to conduct clandestine surveillance and searches of a room used in connection with the conspiracy. Thereafter, the evidence INP collected formed part of the basis for Getto's 2009 arrest in the United States. Following a bench trial on stipulated facts, the United States District Court for the Southern District of New York held all of the INP evidence admissible and convicted Getto of conspiracy to commit mail and wire fraud in telemarketing under 18 U.S.C. §§ 1349, 2326(2).

The Fourth Amendment, among other things, prohibits unreasonable searches and seizures and requires any warrant to be judicially sanctioned and supported by probable cause. United States Supreme Court cases establish that evidence obtained in violation of the Fourth Amendment can be excluded as inadmissible in a criminal proceeding. The Supreme Court has justified the "exclusionary rule," in part, as necessary to deter law enforcement from gathering evidence illegally. The Second Circuit has expressly recognized, however, that because United States courts lack ability to deter foreign police investigations, the Fourth Amendment's exclusionary rule does not apply to evidence obtained by foreign police unless the facts bring the case into one of two narrow exceptions to this general rule. Evidence obtained by foreign police officials will only be excluded under the Fourth Amendment if: (1) the foreign officials obtain the evidence through actions that are so deplorable they shock "judicial conscience;" or (2) when cooperation with foreign enforcement officials is such that foreign police act as "agents or virtual agents" of United States law enforcement, or when cooperation between United States and foreign authorities is designed to intentionally evade constitutional requirements.

Getto argued that the INP evidence should have been excluded because under all three of the exceptions to the general rule limiting the application of the Fourth Amendment to conduct of foreign police. The Second Circuit first rejected Getto's claim that the evidence should be suppressed because INP officers acted so egregiously their conduct "shocked the judicial conscience." The court reasoned that this exception generally applies only to violations of fundamental international norms of decency, such as the use of physical torture. Next Getto argued that the FBI and INP collaborated so closely that the evidence should be excluded. Getto pointed to facts such as the FBI's formal request for the INP to investigate the conspiracy, the sharing of information between the INP and FBI, and the INP's failure to prosecute him in Israel. The court rejected this argument as well, finding that a request that foreign law enforcement investigate and even "robust" information sharing does not constitute evidence that United States law enforcement officials controlled or directed the foreign parallel investigation as is required to fall into the "virtual agents" exception. The court further found no evidence of intent to evade American constitutional requirements. In rejecting Getto's arguments, the Second Circuit expressly declined, as it had in the past, to adopt a broader "joint venture" doctrine to evaluate whether cooperation between United States and foreign law enforcement raises constitutional implications.
The Second Circuit agreed with Getto that he was improperly sentenced because the District Court failed to make particularized findings required to sentence Getto for actions of his co-conspirators and remanded the case with instructions to vacate Getto's sentence and proceed promptly to resentencing.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...12bffb2a488/2/hilite/

Panel (if known): Circuit Judges Cabranes, Sack and Carney.

Argument Date: 10/24/2012

Date of Issued Opinion: 09/09/2013

Docket Number: No. 11-1237

Decided: Judgment of conviction affirmed in all respects and remanded to resentence.

Case Alert Author: Christopher Roma

Counsel: Law Office of Stephanie M. Carvlin for Matthew Getto; Steve C. Lee (Assistant U.S. Attorney for the Southern District of New York) for the United States of America.

Author of Opinion: Judge Cabranes.

Circuit: 2nd Circuit.

Case Alert Circuit Supervisor: Professor Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 09/09/2013 08:20 PM     2nd Circuit     Comments (0)  

May 1, 2013
  Caronia v. Philip Morris USA - Second Circuit
Headline: Second Circuit Certifies Question of Whether New York Recognizes Independent Equitable Cause of Action for Medical Monitoring to Court of Appeals in Lawsuit by Long-Time Smokers Against Philip Morris.

Area of Law: Equitable Claims

Issue(s) Presented: Whether current and former heavy Marlboro brand cigarette smokers, not currently diagnosed with or under medical care for any smoking-related disease, may assert an independent equitable cause of action for medical monitoring against the Philip Morris tobacco company under New York law?

Brief Summary: Plaintiffs, New York state residents who are current or former heavy smokers of Marlboro brand cigarettes, brought this action against the brand's manufacturer, Philip Morris USA, Inc., for negligence, strict liability, and breach of implied warranty, on the grounds that the company designed, manufactured and sold Marlboro cigarettes "to deliver an excessive amount of carcinogens when smoked" despite "knowing that it was feasible to lower the carcinogenic content of its cigarettes." Plaintiffs also brought an independent equitable claim to require Philip Morris to fund medical monitoring of long-time Marlboro smokers, who faced an increased risk of lung cancer but were neither diagnosed with, nor under medical care for, a smoking-related disease. The United States District Court for the Eastern District of New York dismissed the negligence, strict liability, and some of the breach of implied warranty claims as time-barred and remaining breach of warranty claims for insufficient evidence of breach. Lastly, the district court dismissed the equitable cause of action for medical monitoring, finding Plaintiffs' failed to adequately allege that their injury - an increased risk of cancer - was proximately caused by Philip Morris' actions.

The United States Court of Appeals for the Second Circuit affirmed the dismissal of the negligence and strict liability claims as time-barred, holding these actions accrued when the harmful exposure occurred - here, when Plaintiffs developed an increased risk of lung cancer - and not continually with each new inhalation, and held such accrual is not stalled until a particular remedy the injured party prefers - here, a new medical monitoring procedure - becomes available. The Court also affirmed dismissal of the breach of implied warranty claims because the cigarettes were "minimally safe when used in the customary, usual, and reasonably foreseeable manner." The Second Circuit vacated the dismissal of the equitable claim for medical monitoring, however, and certified the question of whether New York recognizes such a cause of action and, if so, what the elements of such a cause of action are, what statute of limitations applied, and when such a cause of action accrues, to the New York State Court of Appeals.

To read the full opinion, please go to:
http://www.ca2.uscourts.gov/de...dae37da35f3/3/hilite/

Panel: Circuit Judges Kearse, Lohier, and Droney

Argument (if known): 03/01/2012

Date of Issued Opinion: 05/01/2013
.
Docket Number: 11-0316-cv

Decided: Affirmed in part; Certified in part to the Court of Appeals for the State of New York.

Case Alert Author: Elyse Diamond Moskowitz

Counsel: VICTORIA E. PHILLIPS, New York, New York (Steven J. Phillips, Stanley J. Levy, Jerome H. Block, Amber R. Long, Lisa W. Davis, Levy Phillips & Konigsberg, New York, New York, on the brief), for Plaintiffs-Appellants. SHEILA BIRNBAUM, New York, New York (John H. Beisner, Jessica D. Miller, Geoffrey M. Wyatt, Skadden, Arps, Slate, Meagher & Flom Washington, D.C.; Gary R. Long, John K. Sherk, III, Shook, Hardy & Bacon, Kansas City, Missouri; Tammy B. Webb, Shook, Hardy & Bacon, San Francisco, California, on the brief), for Defendant-Appellee.

Author of Opinion: Judge Kearse

    Posted By: Elyse Diamond @ 05/01/2013 07:06 PM     2nd Circuit     Comments (0)  

April 25, 2013
  Patrick Cariou v. Richard Prince, et al. - Second Circuit
Headline: Second Circuit Reverses Copyright Victory for Photographer Patrick Cariou, Holding That Most of Richard Prince's Works Made "Fair Use" of Cariou's Photographs

Area of Law: Copyright

Issue(s) Presented: Whether artwork that incorporated copyrighted photographs qualified as transformative, and thus met the "fair use" standard, even though the works did not comment on the original photographs.

Brief Summary: Plaintiff Patrick Cariou ("Plaintiff") is an artist of classical portraits and landscape photographs who brought a copyright infringement suit against Richard Prince, Gagosian Gallery Inc., and Lawrence Gagosian ("Defendants"), alleging that Prince's works - published and sold by Gagosian - had impermissibly altered, published, and sold Cariou's photographs without his permission. The Defendants raised a fair use defense. The United States District Court for the Southern District of New York found that Defendants had violated Plaintiff's copyrights, reasoning that to qualify as "fair use," Prince's works would have needed to comment on Cariou or his photos. The Second Circuit reversed, holding that the fair use defense does not require the alleged infringer's works to have commented on the original works; rather, the fair use defense can be satisfied as long as the new work is transformative - i.e., as long as it alters the original work with new expression, meaning, or message. Here, the court held that 25 of the 30 challenged works qualified as transformative. The remaining five works presented "closer questions," and the Second Circuit remanded the case to the district court for further consideration of those five works.

To read the full opinion, please go to: http://www.ca2.uscourts.gov/de...068be065092/1/hilite/

Extended Summary: Plaintiff Patrick Cariou is a professional photographer who, over the course of six years, worked with Rastafarians in Jamaica. He created a book of portrait and landscape photographs from his experiences with the Rastafarian community, which was published in 2000. The publication is currently out of print but sold approximately 5,791 copies. Defendant Richard Prince ("Prince") is a well-known appropriation artist, and his work - including taking photographs that others have produced and incorporating them into his own collages and paintings - has been displayed in many prominent art museums globally. Prince saw Cariou's book in 2005 and incorporated photographs from the book to create artwork. Prince's artwork was subsequently featured in Defendant Gagosian's ("Gagosian") art gallery. Cariou learned of Prince's exhibit from an art gallery owner in December 2008 and brought claims of copyright infringement against Defendants in the same month in the United States District Court for the Southern District of New York. The defendants raised a fair use defense, and both sides cross-moved for summary judgment.

Under the Copyright Act of 1976, the "fair use of a copyrighted work" is not considered copyright infringement. To determine whether a secondary use qualifies as "fair use," a key factor is "the purpose and character of the use." The district court interpreted this to mean that to qualify for a fair use defense, the secondary use must "comment on, relate to the historical context of, or critically refer back to the original works." On this basis, the district court ruled against the Defendants, holding that Prince's work failed to comment on Cariou's photographs. The Defendants appealed, arguing that the court had misapplied the fair use standard.

The Second Circuit agreed with the Defendants, holding that that the district court had interpreted "fair use" too narrowly. The court explained, citing Supreme Court precedent, that copyright is not an absolute protective shield for authors but rather is designed to stimulate the public's intellectual enrichment, and that the fair use defense is necessary to meet that goal. Explaining that the most important factor in a fair use analysis is "the purpose and character of the [secondary] use," the Second Circuit rejected the district court's view that this factor means that the secondary use must comment on the original work. "The law imposes no requirement that a work comment on the original or its author in order to be considered transformative," the court wrote. "Instead,...to qualify as fair use, a new work must generally alter the original with 'new expression, meaning, or message.'" The court studied Prince's works and concluded that 25 of the 30 challenged works were transformative, noting that they "manifest an entirely different aesthetic from Cariou's photographs."

The Second Circuit also considered the remaining factors for assessing fair use - namely, the effect of the secondary use on the potential market for the value of the copyrighted work; the nature of the copyrighted work itself; and the "amount and substantiality of the portion used in relation to the copyrighted work as a whole." It found that the audiences varied significantly from Cariou to Defendants, and that Defendants' actions did not usurp Cariou's market for selling his photographs. It also acknowledged that Cariou's original work had been both creative and published - placing it near the core of intended copyright protection - but concluded that because it was being used for a transformative purpose here, this factor's utility was limited. Finally, the Second Circuit considered the proportion of Cariou's work used by Prince. Here, it acknowledged that "Prince used key portions of Cariou's photographs," but again concluded that Prince did so in a transformative manner for 25 of the 30 works.

The Second Circuit concluded that the five remaining works presented closer questions, noting that they involved alterations to Cariou's work that were "relatively minimal." It thus remanded that portion of the case to the district court for further analysis, expressing no view as to how it should come out. Judge Wallace concurred in part and dissented in part, arguing that the entire case should have been remanded to the district court for reconsideration under the the Second Circuit's articulation of the fair use standard.

To read the full opinion, please go to: http://www.ca2.uscourts.gov/de...9068be065092/1/hilite/

Panel: Second Circuit Judges B.D. Parker and Hall; Ninth Circuit Judge Wallace (sitting by designation)

Argument (if known): 05/21/2012

Date of Issued Opinion: 04/25/2013
.
Docket Number: 11-1197-cv

Decided: Reversed in part, vacated in part, and remanded

Case Alert Author:
Sarah Wegmueller

Counsel : JOSHUA I. SCHILLER (Jonathan D. Schiller, George F. Carpinello, on the brief), Boies, Schiller & Flexner LLP, New York, NY, for Defendant-Appellant Richard Prince; HOLLIS ANNE GONERKA BART, CHAYA WEINBERG- BRODT, DARA G. HAMMERMAN, AZMINA N. JASANI, Withers Bergman LLP, New York, NY, for Defendants-Appellants Gagosian Gallery, Inc. and Lawrence Gagosian; DANIEL J. BROOKS (Seth E. Spitzer, Eric A. Boden, on the brief), Schnader Harrison Segal & Lewis LLP, New York, NY, for Plaintiff-Appellee Patrick Cariou. ANTHONY T. FALZONE, JULIE A. AHRENS, DANIEL K. NAZER, Stanford Law School Center for Internet and Society, Stanford, CA; VIRGINIA RUTLEDGE, New York, NY; ZACHARY J. ALINDER, JOHN A. POLITO, Bingham McCutchen LLP, San Francisco, CA, for Amicus The Andy Warhol Foundation for the Visual Arts; JOSEPH C. GRATZ, Durie Tangri, LLP, San Francisco, CA; OLIVER METZGER, Google Inc., Mountain View, CA, for Amicus Google Inc. CLIFFORD M. SLOAN, BRADLEY A. KLEIN, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, DC, for Amici The Association of Art Museum Directors, The Art Institute of Chicago, The Indianapolis Museum of Art, The Metropolitan Museum of Art, The Museum of Modern Art, Museum Associates d.b.a. Los Angeles County Museum of Art, The New Museum, The Solomon R. Guggenheim Foundation, The Walker Art Center, and The Whitney Museum of American Art. MICHAEL WILLIAMS, DALE M. CENDALI, CLAUDIA RAY, Kirkland & Ellis LLP, Washington, DC, for Amici American Society of Media Photographers, Inc., and Picture Archive Council of America.

Author of Opinion: Judge B.D. Parker

Supervisor:
Emily Gold Waldman

    Posted By: Emily Waldman @ 04/25/2013 06:45 PM     2nd Circuit     Comments (0)  

April 22, 2013
  National Organization for Marriage, Inc. v. Walsh - Second Circuit
Headline: Second Circuit Allows "National Organization for Marriage," a nonprofit advocacy organization opposing same-sex marriage, to Proceed with Challenge to New York Election Law

Area of Law: Constitutional Law

Issue(s) Presented: Whether National Organization for Marriage's ("NOM") pre-enforcement challenge to New York Election Law § 14-100.1 was ripe and non-moot.

Brief Summary: The National Organization for Marriage, Inc. ("NOM") is a nonprofit organization dedicated to opposing same-sex marriage. In the fall of 2010, NOM sued the co-chairs and commissioners of the New York State Board of Elections ("BOE"), explaining that it sought to advocate for certain candidates for statewide office in the November 2010 election, but feared that doing so would render it a "political committee" under New York law, thus subjecting it to various statutory requirements. NOM's lawsuit alleged that these requirements had a chilling effect on its protected speech and thus violated the First Amendment. The District Court for the Western District of New York granted Defendants' Motion to Dismiss on ripeness grounds, explaining that NOM had not yet tried to ascertain its status with the BOE, nor had the BOE tried to enforce the "political committee" requirements against NOM. The Second Circuit vacated and remanded, holding that NOM's claim was ripe and that it was not moot even though the 2010 election cycle was over. To read the full opinion, please go to: http://www.ca2.uscourts.gov/de...0a93a511e5/1/hilite/.

Extended Summary: The National Organization for Marriage, Inc. ("NOM"), a nonprofit advocacy organization dedicated to opposing same-sex marriage, filed a First Amendment lawsuit against the chairs and commissioners of the New York State Board of Elections ("BOE") in the United States District Court for the Western District of New York. The claim centered on allegations that NOM wanted to engage in advocacy connected to the November 2010 elections in New York State, but was chilled from doing so for fear that BOE would determine that NOM is a "political committee" under N.Y. Elec. Law § 14-100(1) and thus subject NOM to the regulations found in the remainder of N.Y. Elec. Law Art. 14. The district court granted Defendants' Motion to Dismiss for lack of subject matter jurisdiction, as the court found that NOM's fears were not well founded and that NOM had a chance of qualifying for an exception to § 14-100(1).

The Second Circuit, by a 2-1 vote, vacated and remanded. The majority held that NOM's claim satisfied both the constitutional and prudential standards for ripeness. The constitutional ripeness standard requires that a plaintiff's injury be actual or imminent. Here, NOM's fear of enforcement was justified in that NOM pled detailed facts regarding what it planned to do in future elections. These pleadings included examples of print and radio advertising NOM would run were it not for the chilling effect of the relevant N.Y. Elec. Law regulations, such as a radio advertisement stating "tell your family and friends to vote for Carl Paladino. He'll stand up for marriage between one man and one woman." These pleadings were sufficient to establish that NOM would have been a "political committee." Furthermore, the district court's reliance on the exception to § 14-100(1) was misplaced, because the nature of the above-mentioned advertisements indicated that NOM would not qualify for that exception.

In dealing with the issues of prudential ripeness and mootness, the majority quickly dispatched any remaining obstacles to moving forward with the case at trial. Prudential ripeness was not an obstacle because the court found no precedent supporting the assertion that BOE had to undertake a specific effort to regulate NOM before a challenge was proper. Indeed, BOE could regulate NOM as a political committee as soon as NOM acted in a qualifying manner. Finally, the majority found that there were no mootness issues, even though NOM's claims were brought in the context of the 2010 elections. Because these claims were "capable of repetition, yet evading review," as is often the case with election law-related claims, the court found it proper to allow the claims to proceed. Thus, the case was remanded to the district court for further consideration of the merits of NOM's claim.

In dissent, Judge Newman seized on an administrative mechanism that allowed NOM to request, from BOE, a determination as to whether its activities would qualify the organization as a "political committee." Furthermore, once an applicant uses such a mechanism and receives a negative answer, BOE must alert the applicant before acting contrary to its prior response. As such, Judge Newman found NOM's claim to be not yet ripe, as NOM had not requested such advice from BOE. For NOM's claim to be ripe in the pre-enforcement context, Judge Newman would require NOM first to apply for such advice.

To read the full opinion, please go to: http://www.ca2.uscourts.gov/de...0a93a511e5/1/hilite/.

Panel: Circuit Judges Newman and Hall; Chief District Judge Preska (sitting by designation).

Argument: 08/24/2011

Date of Issued Opinion: 04/22/2013

Docket Number: No. 10-4572-cv

Decided: Vacated and Remanded to the United States District Court for the Western District of New York for further proceedings.

Case Alert Author: Joseph E. Fornadel III

Counsel (if known): RANDY ELF (James Bopp, Jr., Jeffrey P. Gallant, Austin J. Hepworth, James Madison Center for Free Speech, and Laurence Behr, Barth Sullivan Behr, Buffalo, NY, on the brief), James Madison Center for Free Speech, Terre Haute, IN, and as substitute counsel Kaylan L. Phillips, ActRight Legal Foundation, Washington, DC, and John C. Eastman, Center for Constitutional Jurisprudence, Orange, CA, for Plaintiff-Appellant. KENNETH A. MANNING (Michael B. Powers, Craig R. Bucki, on the brief) Phillips Lytle LLP, Buffalo, NY, for Defendants-Appellees Douglas Kellner and Evelyn Aquila. Justin E. Driscoll, Brown & Weinraub, PLLC, Albany, NY, for Defendants-Appellees James Walsh and Gregory Peterson.

Author of Opinion: Judge Hall (majority); Judge Newman (dissent).

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 04/22/2013 08:15 PM     2nd Circuit     Comments (0)  

April 20, 2013
  Poventud v. City of New York - Second Circuit
Headline: Second Circuit Holds § 1983 Claim is Not Barred by Heck v. Humphrey Because Petitioner is no Longer Incarcerated and Has No Other Available Federal Remedy.

Areas of Law: Constitutional Law; Habeas; § 1983 Remedies

Issue(s) Presented: Whether Heck v. Humphrey barred petitioner's § 1983 claim alleging constitutional violations committed by officials who conducted his criminal investigation and prosecution, when petitioner was no longer in custody for the conviction or imprisonment being challenged and had subsequently plead guilty to a lesser charge.

Brief Summary: Plaintiff-appellant Marcos Poventud challenges here the United States District Court for the Southern District of New York's summary judgment dismissal of his 42 U.S.C. § 1983 claim that officials had violated Brady v. Maryland in the course of investigating and prosecuting Poventud for attempted murder, robbery, assault, and criminal possession of a weapon. Poventud had been convicted following a trial on those charges and sentenced to 10 to 20 years but, after Poventud had served 9 years, a state court had vacated the conviction upon Poventud's motion contending that he had just learned of allegedly exculpatory evidence that was withheld by prosecuting officials during the original trial. Pending the government's appeal and a possible new trial while remaining in custody, Poventud accepted a government's offer of immediate release in exchange for a guilty plea to a lesser offense. Poventud then filed this § 1983 action.

The United States District Court for the Southern District of New York dismissed the § 1983 claim relying upon the Supreme Court's decision in Heck v. Humphrey which it held barred § 1983 actions by individuals challenging their conviction or imprisonment unless the challenged conviction was expunged, vacated or reversed.

The Second Circuit vacates the dismissal and remands, holding that, because plaintiff was no longer incarcerated and thus did not have access to habeas relief, his action under § 1983 should proceed. The majority reasons that Second Circuit precedent in the years following Heck dictate that petitioner's asserting civil rights claims in connection with a conviction or incarceration must have access to a federal remedy, either under habeas corpus or § 1983, and, as Poventud could no longer avail himself of habeas relief due to his release, he must be allowed to pursue his claims under § 1983, despite pleading to a lesser charge. Chief Judge Jacobs vehemently dissents, finding the majority's reasoning improperly focused on non-binding dicta, instead of what he considers clear Supreme Court and Second Circuit precedent prohibiting this §1983 claim in light of Poventud's admission of guilt. He also criticizes the majority for the broad implications of their decision.

To read the full opinion, please go to:
http://www.ca2.uscourts.gov/de...43e11d0dde2/2/hilite/

Extended Summary: In 1998, plaintiff-appellant Marcos Poventud was convicted of attempted second degree murder, attempted first degree robbery, first degree assault, and criminal possession of a weapon in the second degree, in connection with the assault and robbery of a New York City taxi cab driver in the Bronx. He was sentenced to a maximum of twenty-years in prison. In 2003, Poventud discovered that, during the initial investigation of the crime, the police had found in the victim's taxicab, a wallet containing photo I.D. cards depicting Poventud's brother. The detectives had shown the I.D. photos to the victim, who then positively identified Poventud's brother, who looked nothing like Poventud, as his assailant. However, at the time of the assault, the brother was incarcerated and could not have committed any crime. The victim identified Poventud as the perpetrator only after being shown Poventud's photo for the fourth time. None of this information surrounding the I.D. photos and the victim's identifications was disclosed to Poventud during the original prosecution.

The New York Supreme Court for Bronx County vacated the original conviction on Poventud's motion that the prosecution's failed to disclose the allegedly exculpatory information. The prosecution appealed, but also offered Poventud his immediate release in exchange for a guilty plea. Poventud accepted the offer and then instituted the instant suit under 42 U.S.C. § 1983, alleging that the prosecution had violated his federal due process and fair trial rights under Brady v. Maryland.

The United States District Court for the Southern District of New York granted the defendants' motion for summary judgment, however, holding that Poventud's § 1983 claim was barred by the Supreme Court's decision in Heck v. Humphrey. Heck held that plaintiffs asserting § 1983 claims in connection with a conviction or incarceration must show "that the challenged conviction has been reversed, expunged, invalidated, or called into question" before the underlying claim will be allowed to proceed. The district court held, therefore, that the plaintiff's guilty plea to the lesser charge prevented the plaintiff from meeting this burden.

In today's opinion, a majority of the United States Court of Appeals for the Second Circuit disagrees, vacating and remanding the district court's order and holding that the bar on § 1983 claims under Heck does not apply to Poventud because he is no longer incarcerated. The majority explains that, while an imprisoned petitioner may challenge conviction or incarceration habeas corpus and thus does not need access to § 1983, Poventud, having been released, can no longer bring a habeas challenge and must therefore have access to the only remaining federal remedy under § 1983. The majority acknowledges that a footnote in Heck suggested that the case's prohibition of § 1983 claims applies regardless of whether the petitioner was incarcerated or not, but reads the footnote as mere dicta. The majority points to Justice Souter's concurring opinion in Heck, and a later case, in which fit contends five justices express a preference for the theory that Heck's prohibition on § 1983 suits is inapplicable to petitioners no longer incarcerated without access to habeas remedies. The majority also reviews Second Circuit case law following Heck, contending it supports the court's interpretation that Heck's bar on § 1983 actions only applies to petitioners still in custody. The majority posits that Poventud's subsequent guilty plea to a lesser charge may be used by the City as a defense to the § 1983 claim, but does not support summary judgment under Heck.

The majority opinion also criticizes Chief Judge Jacobs's dissenting opinion for its "apocalyptic tone" and "flaws" in reasoning. The court asserts that its reliance on prior Second Circuit case law is sound, finding that in the course of two years, four unanimous panels of the Second Circuit affirmed the position that Heck only applies to bar § 1983 relief when a petitioner could seek habeas relief. Second, the majority insists that the dissent's reading of Heck relies on dicta no longer supported by a majority of the Supreme Court justices as indicated in more recent decisions. The court also challenges the dissent's assumption that Poventud's § 1983 suit is improper because it calls into question his second conviction, which had not been invalidated, contending that the Brady violation posited by Poventud undercuts only the vacated conviction on the original charges. Finally, the court criticizes the dissent's argument that Poventud's inability bring a § 1983 action may be sufficient to support a post-release habeas petition, and thereby providing a remedy, as "Ptolemaic in the uselessness of its epicycles."

Chief Circuit Judge Jacobs's dissenting opinion sharply criticizes the majority's decision for disregarding what he believes to be the clear holding of Heck and Second Circuit precedent, and for relying excessively on dicta. Chief Judge Jacobs contends the majority's decision takes a narrow exception adopted by some of the Circuit courts and expands it beyond the contemplation of those previous decisions. The dissent also finds that the Brady violation alleged by the plaintiff "necessarily implies the invalidity of the unchallenged ... conviction that was entered on [Poventud's] plea of guilty to that crime." This is, to the dissent, precisely the situation where Heck serves to bar claims under § 1983. Chief Judge Jacobs also cites prior circuit precedent that barred § 1983 claims even in situations where the plaintiff was no longer in custody. He concludes that the court should follow Heck, the case that directly controls, leaving it to the Supreme Court to handle the dicta applied by the majority in its decision.

To read the full opinion, please go to:
http://www.ca2.uscourts.gov/de...43e11d0dde2/2/hilite/

Panel: Chief Circuit Judge Jacobs, and Circuit Judges Calabresi and Sack.

Argument: 12/20/2012

Date of Issued Opinion: 04/19/2013

Docket Number: 12-1011-cv

Decided: Vacated and Remanded to the United States District Court for the Southern District of New York for further proceedings.

Case Alert Author: Benjamin F. Krolikowsk