Articles Posted in US Court of Appeals for the Second Circuit

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Plaintiff filed a whistleblower action under Section 806 of the Sarbanes-Oxley Act against CGI, alleging that he was unlawfully fired in retaliation for his complaints about and objections to an allegedly fraudulent scheme developed by CGI's executives. The district court held that the Sarbanes-Oxley claim survived summary judgment, but later dismissed plaintiff for lack of standing due to his parallel bankruptcy proceeding. After the bankruptcy case closed, plaintiff moved to be substituted in as the proper party-in-interest. The district court granted plaintiff's motion and then dismissed the case on grounds of judicial estoppel. The Second Circuit held that the district court exceeded its discretion by invoking the judicial estoppel doctrine. The court held that where, as here, a pro se debtor has listed his pending litigation on the Statement of Financial Affairs (SOFA), rather than the Schedule B as it was constituted at the time of plaintiff's filing, and then disclosed it to the trustee and the bankruptcy court prior to discharge of his debt, and the trustee and the bankruptcy court were on sufficient notice to take steps to protect the creditors' interests, the debtor is not estopped from pursuing that litigation by virtue of the doctrine of judicial estoppel. The court explained that, for estoppel to apply, there must be greater indicia than presented here of an intent to deceive the court for the debtor's benefit. Accordingly, the court vacated the judgment and remanded for further proceedings. The court affirmed the district court's grant of partial summary judgment to CGI on the state-law breach of contract claim, holding that the dismissal order was rendered moot by virtue of later developments. View "Ashmore v. CGI Group" on Justia Law

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The Second Circuit affirmed the district court's dismissal of plaintiff's complaint with prejudice as a sanction for misrepresenting his litigation history. The court held that district courts may conduct limited inquiries into whether a litigant's fear of imminent danger under 28 U.S.C. 1915(g) is plausible. In this case, the district court did not err by concluding that plaintiff's claim of imminent danger was "without foundation" where plaintiff's explanation for why he was in imminent danger was both circular and completely conclusory. Furthermore, plaintiff unquestionably received adequate notice, and had an opportunity to be heard, before the district court dismissed his action. View "Shepherd v. Commissioner Annucci" on Justia Law

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The Second Circuit vacated the district court's dismissal of plaintiff's complaint, based on forum non conveniens grounds, alleging claims for damages under federal and state law in connection with a ʺgoing private mergerʺ by which certain controlling defendants purchased American Depositary Shares (ADSs) from Dangdang's minority shareholders. The court held that the district court abused its discretion by failing to consider the forum selection clause contained in the relevant documents and its impact on the forum non conveniens analysis. The court rejected defendants' claim that plaintiffs waived their reliance on the forum selection clause by failing to raise the issue in the district court. The court also held that remand to the district court was necessary for the district court to consider the scope and enforceability of the forum selection clause. View "Fasano v. Li" on Justia Law

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The Second Circuit affirmed the district court's dismissal of plaintiffs' amended complaint in part for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and in part for failure to state a claim under Rule 12(b)(6). Plaintiffs' claims arose from their dissatisfaction with the outcome of divorce proceedings in Israel and subsequent efforts by their ex‐wives, with the assistance of the charitable organizations, to collect child support from them. The court held that the district court properly dismissed all claims against the Israeli Officials for lack of subject matter jurisdiction because, as foreign government officials acting in their official capacity, they were entitled to immunity. With respect to the remaining defendants, plaintiffs failed to satisfy the domestic injury requirement of the Racketeer Influenced and Corrupt Organizations Act. The court also held that the district court did not abuse its discretion in barring Plaintiffs Eliahu and Weisskopf from filing future related actions against defendants without its permission. In this case, the court considered the anti-filing injunction factors such as Eliahu and Weisskopf's history of vexatious litigation, their improper motives for pursuing the litigation, and the expense to defendants and burden on the courts. Furthermore, the court saw no reason to grant Eliahu and Weisskopf the latitude usually granted to pro se litigants, and concluded that other sanctions against them would be inadequate. View "Eliahu v. Jewish Agency for Israel" on Justia Law

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The Second Circuit affirmed the district court's order enjoining Reed Smith's action for tortious interference and unjust enrichment in New York state court against Wohl & Fruchter, in a dispute arising from the two firms' concurrent representation of the plaintiff class in the now-settled litigation. The court held that the district court had ancillary jurisdiction over the motion to stay the state court proceedings; the district court properly declined to abstain from exercising jurisdiction where all six factors in Woodford v. Cmty. Action Agency of Green Cty., Inc., 239 F.3d 517, 522 (2d Cir. 2001), favored retaining jurisdiction; the injunction was proper under the Anti-Injunction Act where the district court properly issued the injunction to prevent Reed Smith from relitigating the terms of the Fee Order; and Wohl & Fruchter's cross appeal was procedurally untenable. View "Kaplan v. Reed Smith LLP" on Justia Law

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Calmare appealed the district court's judgment requiring it to pay $10,352,170.41 to GEOMC after a bench trial of a contract dispute concerning sales of medical devices. The Second Circuit affirmed the district court's ruling striking two affirmative defenses and five counterclaims. The court held that the district court was within its discretion in striking the two affirmative defenses. In this case, striking the sixth defense lacked any indication of what conduct by GEOMC or others might have been a defense to the breach of contract claim added by the second amended complaint, and the seventh defense lacked any indication of which party needed to be joined or why. The district court was also within its discretion in striking the four counterclaims against Radiant on the ground of prejudice and one counterclaims because it was factually and legally deficient. View "GEOMC Co., Ltd. v. Calmare Therapeutics Inc." on Justia Law

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The mailbox rule is inapplicable to claims brought under the Federal Tort Claims Act (FTCA). The Second Circuit affirmed the district court's dismissal of plaintiff's amended complaint alleging tort claims under the FTCA after CBP wrongfully detained and assaulted her at a highway checkpoint stop. The district court held that plaintiff failed to administratively exhaust her claims, and the claims therefore were barred by the doctrine of sovereign immunity. Plaintiff argued that the common law mailbox rule applied. The court declined to reach the question of whether the requirements of the mailbox rule were met in this case and held that the mere mailing of a notice of claim did not satisfy the FTCA's presentment requirement. View "Cooke v. United States" on Justia Law

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The trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC alleged that Madoff Securities transferred property to foreign entities that subsequently transferred it to other foreign entities, including the hundreds of appellees. The trustee claimed that the Madoff Securities' transfers were avoidable as fraudulent under 11 U.S.C. 548(a)(1)(A), and sought to recover the property from appellees under section 550(a)(2). The district court dismissed the actions based on the presumption against extraterritoriality and international comity principles. The Second Circuit vacated and held that neither the presumption against extraterritoriality nor international comity principles barred recovery. In this case, the focus of section 550(a) was on debtor's fraudulent transfer of property to the initial transferee, and these actions involved domestic applications of the Bankruptcy Code because section 550(a) focused on regulating domestic conduct. Therefore, the lower courts erred by dismissing these actions under the presumption against extraterritoriality. The court also held that the district court erroneously dismissed these actions on international comity grounds where the United States' interest in applying its law to these disputes outweighed the interest of any foreign state and prescriptive comity posed no bar to recovery. View "In re: Picard" on Justia Law

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Ceara, a state inmate who claims that he was assaulted by a prison corrections officer, filed a pro se complaint raising claims under 42 U.S.C. 1983, naming “John Doe” as the officer who allegedly assaulted him but also described and named that officer as “Officer Deagan.” After the statute of limitations had expired, Ceara amended his complaint to correctly name “C.O. Deagan” as “Officer Joseph Deacon.” The district court dismissed on the ground that an amended complaint identifying a defendant to replace a “John Doe” placeholder does not relate back to the original complaint under Federal Rule of Civil Procedure 15(c)(1)(C). The Second Circuit vacated and remanded. Ceara’s complaint was not a true John Doe complaint; his amendment to correct a misspelling related back under 15 Rule 15(c)(1)(C). View "Ceara v. Deacon" on Justia Law

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The Second Circuit vacated the district court's denial of U.S. Bank's motion to retransfer the action to the United States District Court for the Southern District of Indiana, where it was instituted, and grant of judgment on the pleadings to Bank of America. The court disagreed with the district court's conclusion that Bank of America was not subject to the jurisdiction of the Indiana court, and therefore necessarily concluded that the Indiana court's transfer to New York was not authorized under 28 U.S.C. 1631. Nonetheless, the court affirmed the New York district court's denial of U.S. Bank's motion to retransfer to Indiana, treated the original transfer as one made under 28 U.S.C. 1404(a), and vacated the judgment of dismissal rendered on the ground that the suit was untimely under the laws of New York. View "U.S. Bank National Ass'n v. Bank of America N.A." on Justia Law