Articles Posted in U.S. Court of Appeals for the Second Circuit

A nolle prosequi constitutes a "favorable termination" for the purpose of determining when a 42 U.S.C. 1983 claim accrues. In this case, plaintiff filed suit against defendant, a police officer, under section 1983, alleging malicious prosecution in violation of the Fourth Amendment. The district court held that plaintiff's malicious prosecution claim accrued when the nolle prosequi was entered, and that as a result his suit was time‐ barred. The Second Circuit affirmed, holding that plaintiff's claim accrued when the charges against him were nolled. View "Spak v. Phillips" on Justia Law

The Second Circuit reversed and remanded the district court's dismissal of plaintiff's lemon law suit based on lack of subject matter jurisdiction. Plaintiff filed suit under the Magnuson‐Moss Warranty—Federal Trade Commission Act (MMWA), 15 U.S.C. 2301 et seq., and New York State law, contending that the "certified pre-owned" BMW she purchased from defendant was incurably defective. The Second Circuit held that the value of plaintiff's MMWA claims, as pled, exceeded the $50,000 minimum amount in controversy requirement. In this case, although plaintiff could neither add punitive damages under the MMWA nor rely on the value of her state law claims to meet the jurisdictional threshold, plaintiff's rescission claim supplied a sufficient basis for subject matter jurisdiction. View "Pyskaty v. Wide World of Cars, LLC" on Justia Law

Avoca Plaintiffs filed suits against New Kerr-McGee, alleging toxic tort claims. The suits were stayed when the owners/operators of the Avoca Plant, Tronox debtors, filed for bankruptcy. In this appeal, Avoca challenged the district court's order enforcing a permanent anti‐suit injunction issued after the bankruptcy settlement. New Kerr‐McGee had moved in the district court for an order enforcing the Injunction and for sanctions, asserting that the Injunction forecloses claims that arise from liabilities derived from or through the Tronox debtors that are also generalized and common to all creditors. The district court concluded that the claims are barred by the Injunction and, without imposing sanctions or finding contempt, ordered the Avoca Plaintiffs to dismiss with prejudice their state‐court complaints. The court rejected the Avoca Plaintiffs' assertions of appellate jurisdiction, concluding that the district court's order is not "final" for purposes of 28 U.S.C. 1291, because it neither found contempt nor imposed sanctions; the order is not a decision by the district court on review of a bankruptcy court order, as required by 28 U.S.C. 158(d); and the court lacked jurisdiction under 28 U.S.C. 1292(a)(1) because the district court properly construed (and neither modified nor continued) the Injunction. The court held that the Avoca Plaintiffs' personal injury claims based on conduct of the Tronox debtors, and asserted against New Kerr‐McGee on a variety of state‐law indirect‐liability theories, are generalized "derivative" claims that fall within the property of the bankruptcy estate. Accordingly, the court lifted the stay and dismissed the appeal for lack of jurisdiction. View "In re Tronox Inc." on Justia Law

Plaintiffs, unsuccessful bidders in a bankruptcy proceeding, appealed the district court's dismissal of their suit alleging claims for breach of fiduciary duty, tortious interference, and common law fraud against the law firm K&L Gates, LLP and two of its former partners. Plaintiffs alleged that defendants used their prior representation of plaintiffs to undermine plaintiffs' attempt to acquire assets in a bankruptcy sale.  The district court granted defendants' motion to dismiss based on res judicata. The court agreed with plaintiffs that they could not have brought their claims during the bankruptcy proceedings, and that this present action would not disturb the orders of the bankruptcy court. The court explained that the circumstances in this case did not demand that plaintiffs raise their claim in the bankruptcy proceeding, and noted that the relevant issues were not litigated through an adversary proceeding or otherwise. Accordingly, the court reversed and vacated, remanding for further proceedings. View "Brown Media Corp. v. K&L Gates, LLP" on Justia Law

Relator filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., against numerous insurance and trucking companies. On appeal, relator challenged the district court's dismissal with prejudice as a sanction under Federal Rule of Civil Procedure 11. The court joined the D.C. Circuit in holding that the first‐to‐file rule of the FCA is not jurisdictional. Because the court concluded in the summary order accompanying this opinion that the district court did not err by imposing the sanction of dismissal, the court need not consider the non‐FedEx defendants' argument that relator's action did not satisfy the first‐to‐file rule. Accordingly, the court affirmed the judgment. View "United States, ex rel. Hayes v. Allstate Ins. Co." on Justia Law

Tru-Art appealed the district court's order denying its motion for interest and costs. After a jury trial, the district court entered judgment for Tru-Art. On appeal, this court affirmed the finding of liability, vacated the damages award, and remanded for a new trial on damages or, in the alternative, for the district court to offer Tru-Art a remittitur. Tru-Art chose a remittitur and then filed a motion for costs as well as prejudgment and postjudgment interest. The court affirmed the district court's denial of interests and costs, finding that Tru-Art's motion for prejudgment interest was untimely under Federal Rule of Civil Procedure 59(e) and that Tru‐Art waived its claim for costs pursuant to Local Civil Rule 54.1 of the Eastern District of New York. The court vacated the district court's order to the extent it denied postjudgment interest pursuant to 28 U.S.C. 1961, remanding for the district court to calculate and award such interest. View "Tru-Art Sign Co., Inc. v. Local 137 Sheet Metal Workers Int'l Ass'n" on Justia Law

Plaintiff filed suit against ZocDoc, alleging violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227. Plaintiff's suit stemmed from two unsolicited telecopies (faxes), it allegedly received from ZocDoc. ZocDoc made a settlement offer to plaintiff as to its individual claims pursuant to Federal Rule of Civil Procedure 68, but plaintiff rejected the offer. The district court subsequently granted ZocDoc's motion to dismiss the action for lack of subject matter jurisdiction based on the ground that its offer afforded plaintiff complete relief, thus mooting the action. The court concluded, however, that the action was not and is not moot. The court held that an unaccepted Rule 68 offer of judgment was, regardless of its terms, a legal nullity. In this case, the district court entered a judgment that should not have been entered in the first place, and ZocDoc then more than one year later deposited an amount in satisfaction of that errant judgment in an account payable to plaintiff. Therefore, the court vacated and remanded. View "Radha Geismann, M.D., P.C. v. ZocDoc" on Justia Law

TAL challenges the district court's grant of summary judgment to the Chugh Defendants. The district court held that TAL's claims for breach of fiduciary duty by Chugh had previously been determined in Chugh's favor in a prior proceeding and thus TAL was collaterally estopped from asserting them. The court concluded that Chapter 15 of the Bankruptcy Code does not apply when a court in the United States simply gives preclusive effect to factual findings from an otherwise unrelated foreign liquidation proceeding, as was done here; the district court properly applied the doctrine of collateral estoppel where the affirmative defenses in the wind-up proceeding are based in substance on the same allegations made in the Third Amended Complaint; TAL's contention that findings of fact made by the Cayman court cannot have preclusive effect in the district court proceeding are meritless; and TAL's comity argument also lacks merit. Accordingly, the court affirmed the judgment. View "Trikona Advisers Limited v. Chugh" on Justia Law

Plaintiff prevailed in a jury trial on her claim of pregnancy discrimination. On appeal, plaintiff challenges the district court's decision denying plaintiff's request to provide a jury instruction on punitive damages under the New York City Human Rights Law (NYCHRL), N.Y.C. Admin. Code 8‐502. The court certified the following question to the New York Court of Appeals: What is the standard for finding a defendant liable for punitive damages under the New York City Human Rights Law, N.Y.C. Admin. Code 8‐502? View "Chauca v. Abraham" on Justia Law

Hermitage challenges the district court's denial of its motion to disqualify counsel for Prevezon. The underlying litigation arises out of a 2013 civil forfeiture action brought by the United States alleging that Prevezon received the proceeds of a complex, sweeping scheme that defrauded the Russian treasury of roughly $230 million. The government alleges Prevezon laundered portions of the fraud proceeds in New York by buying various real estate holdings in Manhattan. Hermitage, an investment advisory firm, is a victim of the Russian Treasury Fraud. The court concluded that this case presents the “extraordinary circumstances” necessary to grant a writ of mandamus, as Hermitage is without other viable avenues for relief and the district court misapplied well‐settled law. The court explained that it is rare that a nonparty, nonwitness will face the risk of prosecution by a foreign government based on the potential disclosure of confidential information obtained during a prior representation. That real risk, however, coupled with the misapplication of the law by the district court, outweighs the delay and inconvenience to Prevezon of obtaining new counsel. The court found the remaining arguments raised by the parties to be without merit. Accordingly, the court granted the petition for a writ of mandamus and instructed the district court to enter an order disqualifying Moscow and BakerHostetler from representing Prevezon in this litigation. Prevezon’s motion for clarification is denied as moot. View "United States v. Prevezon Holdings, Ltd." on Justia Law