Released time. I had thought the issue of whether "released time" policy under which a school district could allow students to leave school to participate in religious instruction violated the Establishment Clause had been resolved in 1952 when the Supreme Court decided Zorach v. Clauson. However, the plaintiffs in Pierce v. Sullivan West Central School District made an "as applied" challenge to the policy. They were no more successful that the plaintiff in Zorach. Although a New York regulation allowed school districts to allow students to leave for religious instruction, this regulation provided that "released time" could only be at the end of the morning or afternoon session for no more than an hour per week. The school district in Pierce, however, allowed the "released time" to take place in the middle of the morning session. During that period, the remaining students had no organized activities. They awaited the return of the students taking religious instruction.

The plaintiffs complained that the way the program was implement violated their Establishment Clause rights because it humiliated them, left non-participants in the program with nothing to do, conveyed a message of endoresement of religion, violated the regulation by allowing students to leave in the middle of the morning session and enabled the students receiving religious instruction to bring religious literature into the classrooms. The school district, while admitting that the policy did not comply with the regulation, argued that it did not violate the Establishment Clause. The District Court granted summary judgment to the school district.

The Second Circuit affirmed. It found that Zorach controlled the case. The Establishment Clause was not violated because no religious instruction took place in the school itself, no expenditure of public funds supported the program and the public school did not promote the instruction beyond collecting permission slips from the parents.

The decision can be found here.

Autoerotic Asphyxiation. Wow! Can you say that three times?

This case involved the issue of whether the survivor of a person who died while engaged in the practice of autoerotic asphyxiation, was entitled to life insurance benefits where there was an exclusion for intentionally self-inflicted injuries. As this is a family blog, for those of you not familiar with the practice, click here for an explanation. The district court granted summary judgment to the insurance company, holding that the practice constituted an intentional self-inflicted injury.

On August 12, 2003, the Second Circuit, by a 2 to 1 majority, voted to affirm. A judge of the Court requested a poll to have the appeal reheard en banc. While the poll was pending, one of the judges on the panel changed his mind, and a new opinion in Critchlow v. First Unum Life Insurance Co., which can be found here, was issued. The dissent can be found here. Henceforth in the Second Circuit, autoerotic asphyxiation is not an intentional self-inflicted injury for insurance purposes.

It's great to be back.

Emergency! Save this blog! Oh, don't worry. I'm not really going anywhere, but the number of hits this site is getting is amazingly low. It's down to an average of 11 per day. I know that weekends bring the average down, but really! Don't people care about the Second Circuit? Well, it's up to you my loyal readers (all 11 of you), to reverse this trend. Tell your friends about this blog. If you have a blog of your own, link to this blog. Visit more often. And if you know of any way to increase the visibility of this blog, don't keep it to yourself. Tell me.

Gone Fishin'! Well, not exactly fishing, but I will be in attendance at the American Bar Association Annual Meeting from August 5 through 10 and, in that I am not one of those laptop carrying, Wi-Fo using bloggers, I, most likely, will not be blogging (although anything is possible). I'll try to do another post or two on any cases that come out today, but if I don't, see you next week.

If any of you are going to be at the ABA Meeting and would like to meet me, I'll be staying at the Courtyard Marriott Hotel -- Downtown. Give a call.

Rook(er)ed! Stephen T. Mitchell is a criminal attorney who ahd been part of the panel of attorneys certified to serve as compensated, court-appointed counsel for indigent criminal defendants. The committee that certifies such counsel denied his recertification and terminated his appointment to the panel. Mitchell sued, claiming that the committee discriminated against him on the basis of his race and in retaliation of his complaints of racial discrimination.

The District Court dismissed the case. It held that the committee was an adjunct of the Court and was entitled to absolute immunity from damages. It also held that Mitchell was not entitled to injunctive relief because injunctive relief in a section 1983 action against a judicial officer for an act taken in that officer's judicial capacity unless a declaratory decree was violated or declaratory relief was unavailable. Finally, the Court dismised the claim for declaratory relief under the Rooker-Feldman doctrine. That doctrine prohibits federal courts from reviewing decisions of state courts. The Court noted that, in this case, there was no decision made by any court, but reasoned that the decision of a body acting as an arm of the state judiciary was the functional equivalent of a judgment of a state court, which could not be reviewed by a federal court.

The Second Circuit held that the Rooker-Feldman doctrine did not apply. Federal courts were not precluded from reviewing "executive action, including determinations made by a state administrative agency." The committee was acting as an administrative body and was not conducting judicial proceedings. The Court also held that the committee's "decision was, in its effect, legislative rather than judicial," and, thus, not protected by the doctrine.

The Second Circuit also held that the defendants were not entitled to absolute immunity because their acts were not judicial or integrally related to a judicial proceeding.

The decision in Mitchell v. Fishbein can be found here.

Court refuses to vacate arbitration award. Surprise! Tatung Co. lost an arbitration to Lucent Technologies Inc. to the tune of $12,551,613 plus interest. It decided its next step was to attack the arbitrators. First, it complained that it did not receive a disclosure form that revealed that one of the arbitrators had been a litigation consultant to Lucent in an unrelated case. Second, it argued that it had not been revealed that two of the arbitrators had owned an airplane together from 1974 to 1990. The district court confirmed the award, stating that Tatung's argument was "a classic example of a losing party seizing upon a pretext for invalidating the [arbitration award]." The District Court found that vacatur of the award would serve no public purpose in a case where the disclosure was made to the AAA, but not forwarded to the parties. Finally, the Court found that the disclosures were not such as would suggest partiality or warrant vacating the award.

The Second Circuit agreed. While the Court agreed that where an arbitrator hid a conflict, such action might suggest evident partiality so as to warrant vacatur. But that rule must be applied on a case by case basis. Where the arbitrator made the disclosure, even though the AAA did not follow through, no presumption of bias can be made. And requiring vacatur whenever a disclosure was accidently not made would run counter to the policy of encouraging and supporting arbitration. The Court also noted that Tatung knew of the policy of providing disclosures, yet it never asked about the missing disclosure until after it lost.

The Court further agreed with the District Court that the joint ownership of an airplane by two of the arbitrators, which ended over a decade ago, was too insubstantial to warrant vacatur of the award.

Finally, the Court agreed with the District Court that the fact that an arbitrator served as a litigation consultant for Lucent in an unrelated case did not warrant vacatur. The arbitrator's relationship had materially ended before Lucent appointed him an arbitrator.

Tatung had asked the Second Circuit for leave to take discovery regarding the conflict if it did not vacate the award. Becasue Tatung had not sought that relief from the District Court, the Second Circuit declined to do so.

The decision in Lucent Technologies Inc. v. Tatung Co. can be found here.

Oops. Virginia Gambale and Deutsche Bank AG settled a sexual harassment lawsuit and filed a stipulation dismissing the case. The settlement agreement provided that the terms thereof would be kept confidential. The District Court, however, disclosed certain provisions of the agreement in a sua sponte order which unsealed certain documents relating to the action. The Bank appealed from the order, claiming that once the action was dismissed, the Court no longer had jurisdiction, and, even if the Court had jurisdiction, the order was otherwise improper. The Second Circuit, however, disagreed and upheld the order. The Court, however, remanded the case to the District Court with an instruction to maintain under seal the transcript of a conference in whcih the parties revealed to the Court the confidential amount that the Bank was paying Gambale, unless all confidential information and direct and indirect references to confidential information are redacted from the transcript.

The Second Circuit held that while the filing of a stipulation dismissing the case divests a Court of all jurisdiction over the case, it does not follow that the filing of such a stipulation divests the Court of the authority to either dispose of material in its files as it thinks appropriate or to modify or vacate its own protective orders with respect to such documents. The Second Circuit stated: "The records and files are not in limbo. So long as they remain under aegis of the court, tehy are superintended by the judges who have dominion over the court." Given the public's common law right to access to judicial documents, a district court that decides that such access is appropriate in a case "acts within its jurisdiction when it modifies or vacates a protective order to allow that access, irrespective of whether it does so before or after a stipulation of dismissal has been filed."

The Second Circuit, however, noted that the amount paid by the Bank to Gambale to settle the lawsuit "stands on starkly different footing." The amount is set out in the settlement documents that are not part of the court record. Hence, there is no presumption of access with respect to this information. While not precluding the possibility that some case could require such disclosure, the Court held that this was not such a case. Indeed, the Court noted that an agreement to keep the terms of a settlement confidential could facilitate settlement, a salutory result. Although the amount of the settlement was disclosed on the record at a conference, the Court found that the Bank's interest in confidentiality outweighed the public interest in disclosure.

The Second Circuit held that it was a serious abuse of discretion for the District Court to have revealed the settlement amount in its unsealing order. That order is available on Westlaw and Lexis, and the Court noted that it was unable to put the genie back in the bottle.

The decision in Gambale v. Deutsche Bank AG can be found here.

Unusual Circumstances. In a prior post, I reported on the case of Hemstreet v. Greiner, in which the Second Circuit affirmed the District Court's grant of a writ of habeas corpus because of ineffective assistance of trial and appellate counsel. The Second Circuit has sua sponte vacated that opinion and remanded to the District Court for reconsideration. Since the decision came down, the witness who had claimed to have been intimidated by detectives, which alleged intimidation was the predicate for the relief granted, has recanted. Given the highly unusual circumstances, the Court reconsidered its prior decision and vacated and remanded to the District Court. The new decision can be found at the Second Circuit website. It was decided on August 2, 2004.

Ineffective Assistance. Isaac Jacob Sharvit was found guilty of engaging in a conspiracy to dstribute and possessing with intent to distribute pills containing ecstasy. He moved for a new trial on the ground of ineffective assistance of counsel, which was denied, based primarily on the affidavit of his trial counsel, who rebutted all of Sharvit's contentions. He appealed.

During the pendency of his appeal, Sharvit's trial counsel was indicted for conspiracy to defraud the United States by submitting fraudulent appplications for appointment of counsel under the Criminal Justice Act. The indictment also stated that she had made false statements to the United States District Court and to criminal investigators and that she attempted to dissuase another person from making certain communications to law enforcement personnel. According to a New York Times article, there were allegations that the attorney abused prescription drugs and laundered money on behalf of a client. Sharvit brought these facts to the attention of the Second Circuit in his reply brief. The Government did not deny any of the allegations.

The Second Circuit remanded the case to the District Court for further fact finding, although the Court noted that the usual procedure for bringing an ineffective assistance claim is on habeas review. The case, which was decided on July 30, 2004, can be found here.

Inducement of Agent to Travel Between States for a Fraudulent Purpose. In United States v. Thomas, the Second Circuit held that a conviction for inducing someone to travel between states for a fraudulent purpose, a violation of 18 U.S.C. 2314, can stand even if the person induced was an agent of the person cheated, and not the actual person. In so holding, the Court agreed with the Seventh and Ninth Circuits. The decision can be found here. An article on the case from the New York Law Journal can be found here.

Confrontation and Co-conspirators. Two cases came down from the Second Circuit on July 28, 2004 relating to whether a criminal defendant's Sixth Amendment confrontation right was violated by the admission into evidence of statements by co-conspirators. In United States v. McClain, the defendants were accused of money laundering, wire fraud and conspiracy to commit money laundering and wire fraud. At trial, the government was permitted to introduce three co-conspirators' guily plea allocutions to establish the existence of a conspiracy. The defendants were convicted and appealed. After the appeal was filed, but prior to oral arguement, the Supreme Court decided Crawford v. Washington, in which the Court established a per se bar on the admission of out-of-court statements made by unavailable declarants where there had been no prior opportunity for cross-examination. The Second Circuit held that the plea allocutions were testimonial in nature in that they are formally given in court, under oath, and in response to questions by the court or the prosecutor. The Court, however, noted that while the admission of these allocutions violated the Confrontation Clause, the violation was subject to harmless error review. Since the evidence against the defendants was overwhelming, the Second Circuit held that the violation of the defendants' confrontation rights was harmless error and affirmed the convictions.

In United States v. Saget, the defendant was accused of trafficking in firearms and conspiracy to traficking in fire arms. The trial court allowed the government to enter into evidence statements that the defendant's co-conspirator made to a confidential informant. The defendant was convicted and appealed. The Second held that Crawford did not place any limites on the admissibility of non-testimonial statements. And Crawford at least suggested "that the determinative factor in determing whether a declarant bears testimony is the declarant's awareness or expectation that his or her statements may later be used at trial." The Second Circuit held that the co-conspirator's statements were not testimonial in nature. However, if the statements do not fall within a firmly rooted hearsay exception or contain particularized guarantees of trustworthiness, their admission would still violate the Confrontation Clause. The Court found that, under its precedents, the statements "were made in circumstances that confer adequate indicia of reliability on [them]." Hence, the Confrontation Clause was not violated. The conviction was affirmed.

McClain can be found here. Saget can be found here.

The Competition.  I just discovered another blog covering the Second Circuit beat.  Check out Second Circuit News.

Tax Relief.  In Superintendent of Insurance for the State of New York v. Ochs (In re First Central Financial Corp., the Second Circuit decided whether a tax refund, to which an insurance company in rehabilitation was entitled pursuant to a written contract with its parent, was part of the bankruptcy estate of the parent.  The parent filed a consolidated tax return for itself, the insurance company and another subsidiary.  Because the insurance company was the only one of the three entities that had income, it paid the entire tax burden.  Pursuant the agreement with its parent, it would be entitled to any refund up to the amount it would have been entitled had it filed separately.  The past practice was that the refunds were paid to the insurance company.  But when the parent went into bankruptcy, things changed.  The trustee took the position that the $2.5 million refund it received was part of the bankruptcy estate.  The Superintendent of Insurance took the position that the parent was holding the refund in trust for the insurance company, and asked the bankruptcy court to impose a constructive trust on the funds.  The Bankruptcy Court declined to do so, and the District Court affirmed.

The Second Circuit held that the existence of a written contract relating to how tax refunds would be allocated was fatal to any claim of unjust enrichment, an essential element of a constructive trust claim.  Also, the Court noted that the remedy of a constructive trust was "fraud-rectifying" rather than "intent-enforcing."  As there was no allegation of fraud, the remedy was found not be appropriate.  Finally, while recognizing that bankruptcy law does not trump New York constructive trust,  courts are required to "act very cautiously" to minimize conflict with the Bankruptcy Code.  As a result, bankruptcy courts are reluctant to impose constructive trusts without a substantial reason for doing so.

The insurance company can, of course, file a claim as an unsecured creditor.  As the Second Circuit noted: "While [the insurance company] may understandably chafe at being required to accept less than it was entitled to receive under the Agreement, the short -- and conclusive -- answer is that this is not injustice, it is bankruptcy."

The decision can be found here.

Issue Preclusion and the Rooker-Feldman Doctrine.   No, that's not the title of one of a show on HBO this fall (although I'd watch such a show).  It's the issue in Vargas v. The City of New York.   Vargas was a police officer who was terminated for the use of excessive force.  He brought an Article 78 proceeding in state court seeking to overturn the NYPD's decision, but the court found substantial evidence supporting the charges. 

Vargas then brought a section 1983 action in federal court, alleging that his termination violated his equal protecti rights in that his punishment was racially discriminatory because it was allegedly the policy and practice of the NYPD to selectively prosecute Hispanic and minority officers more often and more severely than their white colleagues.  The District Court dismissed the case under the Rooker-Feldman doctrine.  Under that doctrine, inferior federal courts have no subject matter jurisdiction over suits that seek direct review of judgments of state courts or that seek to resolve issues that are "inextricably intertwined" with an earlier state court determination.  Vargas appealed.

The Second Circuit noted that the doctrine is generally applied coextensively with principles of res judicata and collateral estoppel.  In the case of an Article 78 proceeding, res judicata would not apply because a state court hearing such a proceeding does not have the power to award the full measure of relief available in a subsequent section 1983 litigation.  In order for Vargas's claim to be barred by the Rooker-Feldman doctrine, it had to be subject to New York's collateral estoppel rules.

The Court noted that the racial discrimination claim had never been presented to the state court.  Hence, it could not have been necessarily decided in the Article 78 proceeding.  Nor would a decision on the equal protection claim require the federal court to reconsider the precise issue decided in the Article 78 proceeding.  In other words, even if there was a rational basis for the dismissal, it still could have been based on a discriminatory motive.  Hence, the doctrine was held not to bar the equal protection claim.

Vargas had also asserted a due process claim based on the fact that the NYPD waited almost three years before prosecuting him for using excessive force, in violation of NYPD regulations requiring such action be taken within 18 months.  The District Court had dismissed this claim not on the grounds of the Rooker-Feldman doctrine, but because Vargas had not established that the procedural safeguards established by the state were insufficient to protect his rights.  The Second Circuit affirmed the dismissal of this claim.

The case can be found here.

Interesting Strategy.  I've been thinking about Martha Stewart these days.  I've read that she's considering serving her sentence pending appeal.  And she's not planning on dropping the appeal.  This is an interesting strategy.  If Stewart was out on bail pending appeal and won her appeal, the likely result would be that she would be retried.   But if she serves her sentence while awaiting appeal, would the government bother trying her again if she prevailed?  I'm not an expert on criminal law, but if they did try her again and convicted her again, could she be given a longer sentence?  I'm anxious to see how this plays out.

Looky what I found!  I just wanted to clue Second Opinions readers to a website that I've found.  (I'm not sure if it's technically a blog, but it sort of looks like one.)  It's called Humble Opinion.  It's chock full of interesting legal information.

Also, if anybody is interested in the INDUCE Act (and who isn't), check out the INDUCE Act Blog.  It's a group blog by Andrew Raff, Chris Rush Cohen and Kevin (no last name).

The Devil's in the details.  A general contractor was unable to collect on a performance bond where the subcontractor defaulted because it had failed to comply with certain terms of the bond.  In Elm Haven Construction Limited Partnership v. Neri Construction LLC, the general contractor failed to provide notice of the subcontractor's default to the bonding company prior to hiring a new subcontractor.  Such notice was required under the terms of the bond.   In failing to give the subcontractor time to cure the default, as provided under the terms of the bond, the general contractor had breached the agreement and was unable to collect under the bond. 

The general contractor also was not able to collect on a payment bond.  The contractor had directly paid certain sub-subcontractors, who had claimed that they were not paid.  The subcontract agreement, however, explicitly prohibited the general contractor from directly paying sub-subcontractors without the permission of the subcontractor and the bonding company.  By making the payments without permission, the general contractor was deemed an "intruder," not entitled to reimbursement.

The decision in the case can be found at the Second Circuit website.  It was decided on June 23, 2004.

Super hotties of the Second Circuit.  Sure, it's frivolous, but one of our own Second Circuit Judges, Robert Katzmann, was named runner up in the Judicial Superhottie Competition going on at the Underneath Their Robes blog.  And a District Court Judge from the Southern District of New York -- Kimba Wood -- won the title in the women's competition.  Congratulations to our Second Circuit super hotties -- and to Ninth Circuit JudgeAlex Kozinski, who won the male competition, edging out Judge Katzmann.   (To those looking for actual substance -- well, the Second Circuit appears not to have decided any cases yesterday.) 

Congratulations II.  No, Douglas Berman did not make Law Review (actually, he probably did, just not recently).  But the 35-year old law professor has had an article in the Wall Street Journal written about him and his Sentencing Law and Policy blog.  It's nice to see blawgs getting play in the press.

Congratulations!  Heidi Bond of Letters of Marque has made law review at the University of Michigan.  Since she gets a zillion more hits per day than I do, I don't know why I'm directing even more traffic her way, but I guess that's just the kind of guy I am.  

No discovery.  German litigants in a German action tried to get discovery in America via 28 U.S.C. 1782 in an action against Deutsche Telecom AG from the attorneys representing the parties in a similar class action pending in the Southern District of New York.   The German litigants wanted the discovery material that had been produced in the the class action and were willing to be subject to the same confidentiality order entered in the class action.  However, a criminal action against Deutsche Telecom AG relating to the same transactions that were the subject of the civil action was pending in Germany, and the Bonn Prosecutor asserted that discovery in this proceeding would interfere with the criminal investigation.  The District Court found that the German litigants met the requirements of 28 U.S.C. 1782, but that it was exercising its discretion, in light of the German prosecutor's view, not to order discovery.  In Schmitz v. Bernstein Liebhard & Lifshitz, the Second Circuit affirmed.  The decision in this case can be found at the Second Circuit website and was decided on July 20, 2004.

A Cautionary Tale.  Not that it has anything to do with the Second Circuit, but appellate lawyers should read this article before filing a motion for additional time in the Seventh Circuit.

Check this out!  Here's an interesting article from law.com (printed in the New York Law Journal yesterday) about the Second Circuit's decision to certify questions to the United States Supreme Court in United States v. Penaranda.

Contact Me!  No, I'm not desparate for attention (well, ok, maybe I am), but I just wanted to alert you to my nifty new Contact me link on the left hand side of this blog.  If you want to alert me to a case I've missed or tell me how boring (or fascinating) this blog is, you can now do so.

Martha's appeal.  Well, now that Martha Stewart has been sentenced, it's on to the Second Circuit.  Here is an article from law.com regarding her appeal.

FREE!  Off topic.  When I started this blog, I said that occassionally I would engage in off topic sallies, and this is one of them.  I have just found out that Mark Belnick, former Tyco general counsel, has been acquitted of all charges.  The Manhattan DA had accused Belnick of stealing more than $30 million in compensation and loans from Tyco.  I never believed it.  I was an associate at Paul, Weiss, Rifkind, Wharton & Garrison back in the late 1980s when Belnick was a partner there.  I did not know him well.  In fact, I don't recall ever working on a case with him.  But I knew him.  And I could never reconcile my impression of the man with that of a crook.  Was it possible that, tempted by huge sums of money, he gave into the dark side.  Sure, it's possible.  But I never thought it likely, and it appears that the jury agreed.  I'm very pleased for Mark.  It's a good thing he made all that money.  He's going to need it to pay his attorneys.  And the civil suits are still pending!

They haven't cited me, yet! Well, this is interesting. In its Penaranda case, which was the subject of this post, the Second Circuit actually cites to a blog. No, not to Second Opinions, drat the luck. It cites to the Sentencing Law and Policy blog. Well, I can only hope that someday it will happen to me. Thanks to the Falconred Goes to Law School blog for alerting me to this fact.

To the Supremes! The Second Circuit, in United States v. Penaranda, has certified three questions to the Supreme Court for resolution in light of its decision in Blakely v. Washington. In Blakely, the Supreme Court held that facts that warrant enhancing a sentence must be found by a jury. Since Blakely was decided last month, there has been much speculation whether the Federal Sentencing Guidelines were constitutional in that sentences under the Guidelines are based on factors that are not decided by the jury. That question arose in this case. The Second Circuit ordered the appeals in this case to be heard in banc, limited to the issue of the validity of the defendants' sentences under Blakely. The active judges of the Court unanimously agreed that they should certify the following questions to the United States Supreme Court:

1. Does the Sixth Amendment permit a federal district judge to find facts, not reflected in a jury's verdict or admitted by a defendant, that form the basis for determining the applicable adjusted offense level under the Federal Sentencing Guidelines and any upward departure from the offense level?

2. In a case where a jury has convicted a defendant of possessing with intent to distribute five kilograms or more of cocaine and one kilogram or more of heroin, does the Sixth Amendment permit a federal district judge to determine, under the Federal Sentencing Guidelines, the quantity of drugs for which the defendant is responsible and upon whihc his based offense level and corresponding sentencing range will be calculated under U.S.S.G. 2D1.1?

3. In a case where a defendant has pled guilty to conspiring to distribute five kilograms or more of cocaine, does the Sixth Amendment permit a federal district judge to determine, under the Federal Sentencing Guidelines, (a) the quantity of drugs for which the defendant is responsible and upon whihc his base offenses level and corresponding sentencing range will be calculated under U.S.S.G. 2D1.1, (b) the applicability of a two-level enhancement to the base offense level for carrying a fun in connection with the offense, under U.S.S.G. 2D1(b)(1), and (c) the applicability of a three-level managerial role enhancement under U.S.S.G. 3B1.1(b)?

The decision can be found here.

Rules? What rules? Regina Jacobs is a world-class track athlete, who may very well compete in the Olympics next month. However, the United States Anti-Doping Agency has accused her of using a prohibited substance and has threatened to sanction her, which may result in her not competing in Greece. She, not surprisingly, took issue with that and demanded arbitration before the American Arbitration Association. So here's the issue. Both parties have agreed to arbitrate -- but they can't agree on whether the AAA's Commercial Rules or Supplementary Rules apply. Both agree that an arbitrator can make that decision, but the rules differ in how an arbitrator is chosen. The AAA has decided that the Supplementary Rules apply and that an arbitrator should be chosen under those rules. Jacobs brought an action, seeking to compel arbitration under the Commercial Rules. The District Court held that it lacked jurisdiction and the Second Circuit agreed. An action to compel arbitration may only be brought if the other party refuses to arbitrate. Since the Agency was willing to arbitrate and the only dispute was the rules, the court had no jurisdiction. The decision in Jacobas v. USA Track and Field can be found here.

Man, oh, Mandamus. I'm sure you've all heard about Martha Stewart's criminal problems. Well, she also has civil problems in the form of a class action. When the criminal court hit, the parties to the civil case agreed to stay all discovery by and against Ms. Stewart. But the district judge had other ideas. He directed Ms. Stewart to conduct any discovery she decided. So, on October 21, 2003, Martha Stewart subpoenaed two attorneys for the SEC -- Helene Glotzer and Jill Slansky -- who had interviewed Stewart and her co-defendant in the criminal case, Peter Bacanovic.

Not surprisingly, the SEC was not so eager to allow its employees to appear for a deposition. It inquired of Stewart as to her reason for subpoenaing Glotzer and Slansky. Stewart's attorneys told the SEC that they wanted to question the lawyers regarding their recollection of interviews that they had conducted with Steward Bacanovic and his assistant, Douglas Faneuil.

The SEC declined to allow its attorneys to testify, claiming that such a deposition would violate the attorney work product privilege.

Stewart moved to compel compliance with teh subpoena. The SEC claimed that Stewart had not exhausted her administrative remedies, but the district judge granted the motion, asserting that he would deal with any privilege issues as they arose.

The SEC filed an emergency motion with the Second Circuit, seeking a stay of the district court's order and for a petition for mandamus. The Court heard argument on the motion and granted the petition for mandamus, dismissing the stay motion as moot.

The Court found that there was a novel and significant issue of law -- whether the Administrative Procedure Act's exhaustion requirement applies to a motion to compel a government agency to comply with a subpoena -- and that resolution of the issue would "lend structure to the procedural framework for adjudicating discovery disputes involving government agencies."

Second, the Court found that mandamus was proper because the district court's order was not appealable and, hence, mandamus was the only adequate means available to the SEC to protect its interests. While the SEC could just refuse to comply and deal with the issue on a contempt motion, the Court noted that the circumstances of the case were unusual and that such a procedure was not appropriate under the facts of the case. First, the SEC was not arguing that the district court had abused its discretion in granting the motion. It was asserting that the district court lacked jurisdiction to consider the motion. Second, the Court felt it inappropriate to force a government agency to submit to a contempt order.

Third, the Court held that resolution of the issue would aid in the administration of justice.

Having found, based on the above, that mandamus was a proper remedy, the Court turned to the merits of the petition. The Court held that in order to seek judicial review of an agency's non-compliance with a subpoena, a party must exhaust administrative remedies pursuant to section 704 of the Administrative Procedure Act. Stewart failed to do so. Hence, the district court lacked jurisdiction to hear the motion, and, on that basis, the petition for mandamus was granted.

In re SEC ex rel. Glotzer can be found at the Second Circuit website. It was decided on July 6, 2004.

Get it in writing. That's what Judge Newman says, speaking of plea agreements, in United States v. Graves. Graves was indicted for narcotics offenses. He agreed to plead guilty to one firearms violation count for which he would receive a sentence of 15 years. The plea agreement provided a cooperation section, which required that Graves cooperate with the Government by providing complete and truthful information about his criminal activity and testifying where necessary. The cooperation section did not say anything about acquiring new information about criminal activity by acting as an informant, nor did it require the Government to move or consider moving for a 5K1.1 departure for rendering substantial assistance.

The District Court approved the plea agreement. During the plea allocution, the prosecutor stated that there was a 5K aspect to the plea agreement because the Government might make a 5K motion. The Court explained the plea agreement to Graves, stating that if he provided substantial assistance to the Government, "then the government will move for a downward departure under Rule 5K of the sentencing guidelines and ask that I impose a lower sentence." The Court, however, warned Graves that "the government is not obligated under this agreement to do that, but will do so only if you have given substantial assistance and cooperation to the government."

Graves sought to withdraw his plea. He complained that, although he was cooperating with the Government, the Government claimed his assistance was not substantial. While the prosecutor admitted that the information provided by Graves was "good, fruitful information," it did not make a 5K motion. The Government decided that the evidence provided, in light of his criminal background, was not substantial enough to warrant making the motion and certainly not worth releasing him to act as an outside informant.

Graves' attorney claimed that despite the language of the plea agreement, there was an understanding with the prosecutor that the actual sentence would be substantially less than 15 years. The prosecutor did not deny that such had been discussed, but claimed that he had told Graves that it was a long shot that he would be released.

The District Court denied the motion to withdraw Graves's plea.

The Second Circuit remanded the case to the District Court. In light of the fact that there clearly had been discussions about a 5K motion, the Court held that there were issues of fact for a factual inquiry as to exactly what was said aobut proactive cooperation, what understanding was reasonably conveyed to Graves concerning the cooperation that would be required for him to have a chance for a reduced sentence and whether he would be released in order to render such cooperation.

Judge Newman noted: "Of course, all of the uncertainties surrounding this plea could have been avoided if the Government had heeded our prior admonition to include all representations in the written plea agreement."

The decision can be found here.

Reliance not required. I know. It's hornbook law that in order to prove a case for fraud, you have to show reliance. Well, according to the Second Circuit in Ideal Steel Supply Corp. v. Anza, reliance is not required to state a RICO claim based on mail or wire fraud. In that case, Ideal's competitior was gaining a competitive advantage by not charging tax to customers who paid in cash. The competitor sent fraudulent tax information to the government. This practice was put in place, according to Ideal, to give its competitor a competitive advantage over Ideal and to gain customers it would not be able to obtain absent the practice. The District Court dismissed the complaint, holding that because Ideal did not rely on the fraudulent tax information, it lacked standing. The Second Circuit held that reliance was not necessary. What was necessary was a showing that Ideal was an intended victim of the fraud and that its injury was proximately caused by the fraud. The decision can be found at the Second Circuit website. The decision came down on July 2, 2004.

Are you a debt collector? That question was raised in Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carrol & Bertolotti. There, a law firm was sued under the Fair Debt Collection Practices Act. The firm moved for summary judgment asserting that its actions -- sending out a three-day notice pursuant to the New York State Real Property Actions and Proceedings Law -- did not violate the Act and that it was not a debt collector within the meaning of the Act. The district court granted the motion on the second ground. The plaintiff appealed.

The district court's decision was grounded in the fact that the law firm had not derived significant revenue from debt collection over the past year, did not devote significant resources to that area of practice, did not market itself as a debt collector and had no regular client relationship with a debt collecting business. The Second Circuit, however, held that the determination of whether a law firm regularly engages in debt collection activity such as to make it a debt collector under the Act must be assessed on a case by case basis. In assessing "regularity," a court should consider a number of factors, including (1) the number of debt collection communications issued and/or debt collection litigations commenced over the relevant period, (2) the frequency of such communications or litigations, (3) whether the firm has personnel specifically assigned to work on debt collection matters, (4) whether the firm has systems or contractors in place to facilitate such activity and (5) whether the activity is undertaken in connection with ongoing client relationships with entites that have retained the frim to assist in the collection of outstanding debt collection activity.

Finding that, based on the facts before the district court, a rational fact finder could find that the law firm was a debt collector under the Act, the Second Circuit vacated the summary judgment and remanded the case for further proceedings.

The decision can be found here.

It's un-bear-able! The Vermont Teddy Bear Company sued Robert M. Schwimer upon finding that Schwimer was using its BEARGRAM mark in the marketing of his products, asserting various intellectual property and related state law tort claims. The Company moved for summary judgment, and, despite having received notice, Schwimmer failed to oppose the motion. The district court granted the summary judgment motion simply by endorsing the notice of motion and adopting, with slight modifications, the Company's proposed order as judgment. The order contained no reasoning. Schwimer appealed.

On July 1, 2004, the Second Circuit vacated and remanded. It wrote "to clarify the procedure to be followed when a motion for summary judgment is unopposed." The Court held that Rule 56 does not embrace default judgment principles and even if a summary judgment motion is unopposed, the district court still has to decide whether the movant is entitled to judgment as a matter of law. It took no position as to whether summary judgment was appropriate in this case, but remanded the case to the district court for a reasoned determination on that issue.

The decision in Vermont Teddy Bear Co. v. 1-200 Beargram Co. can be found here.

Effective July 6, 2004, certain policies of the Second Circuit will be modified. As of that date, conferences in counseled immigration appeals will no longer be automatic. Also, as of that date, absent any need for expedition, the Court will grant a party one 30-day extension of time to file a brief upon filing an appropriate motion. Such extensions will be granted administratively by the Clerk, unless opposed, in which case it will be referred to a judge. For more information, see this.

Was I wrong? When the Calabresi imbroglio came to light, I knew that Washington lawmakers would not let the Judge off easily. A group of legislators have asked a committee that studies the enforcement of judicial conduct rules to conduct an investigation into the remarks of Judge Calabresi in which he compared Bush to Hitler and Mussolini. For those of you who have had your head in the sand for the past couple of weeks, I have posted about this incident here, here and here. Justice Breyer, who chairs the committee has told the legislators that the committee is not the proper forum for such an investigation. An article on the legislators' request can be found here. I'm not sure that we've heard the end of this.

UPDATE: The New York Sun printed this article on the latest Calabresi news. Actually, that was the article I first read about the issue, but since I am not a subscriber to the electronic version of the Sun, I had no access to the on-line version of the article. Evidently, Howard Bashman of How Appealing doesn't have that problem, and I thank him for providing the link.

ANOTHER UPDATE: Here is the letter that was sent to Justice Breyer. Thanks to Eugene Volokh, who posted it, and Howard Bashman (again) who pointed me to it.

Wow! This is better than the movies! If you're tired of the normal, staid Second Circuit decisions, you might want to read the facts of State v. Tanella, decided June 30, 2004. It's really riveting stuff (written by Judge McLaughlin). DEA agents had Egbert Dewgard (his parents must have hated him), an alleged drug dealer, boxed in. But that did not stop Dewgard. Judge McLaughlin writes:

"[R]amming Deterctive Corcoran's car and driving at high speed onto the sidewalk, Dewgard managed to escape. Agents Peterson and Tanella sounded their sirens. Detective Corcoran initially lend the pusuit, but because he had no siren, he pulled over and allowed the three agents to pass him. As Dewgard raced through the streets of a residential neighborhood, Peterson and Herbel [DEA agents] lost sight of Deward, leaving Tanella alone to pursue him. During the high-speed chase, Tanella continually used his radio to apprise the other members of the field team of his location.

"About three quarters of a mile into the chase, Dewgard careened, for a second time, ontot the sidewalk, where his car wedged between a telephone pole and a fire hydrant, narrowly missing a pedestrian who was pushing her three-year old daughter in a stroller.

"Dewgard jumped from his car and fled on foot carrying the black plastic bag [drugs]. Tanella radioed the other officers and pursued Dewgard on foot. He was about twenty-five feet behind Dewgard. Tanella displayed his badge, removed his gun from its left-side holster, identified himself as a police officer, and shouted to Dewgard to stop. Dewgard continued running down New York Avenue. Tanella testified that, because he was behind Dewgard, he was unable to see if Dewgard was armed.

"Dewgard finally stumbled and landed between a parked car and a parked van. He dropped the black bag, which was later found to contain three kilograms of cocaine. Tanella then caught up to Dewgard, who was still on the ground, and jumped on top of him. The two men struggled between the parked vehicles, with Dewgard continuing to resist arrest. At some point while they wrested, Tanella fired one shot which hit the lower right portion of Dewgard's back and killed him. Within a minute, Agents Peterson and Herbel, who had lost contact with Tanella during the foot chase, arrived at the scene. A search of Dewgard revealed he had no gun."

Whew! Well, of course the State tried to prosecute Tanella for manslaughter. Tanella petitioned the United States District Court for the Eastern District of New York for removal under 28 U.S.C. 1442(a)(1), which was granted. He then moved to dismiss the indictment, claiming immunity under the Supremacy Clause of the United States. The State argued that the issue of immunity should go to the jury. The District Court granted the motion, dismissing the indictment with prejudice and finding that Tanella "did no more than what was necessary and proper in the discharge of his duty " as a federal agent and was thus immune from prosecution.

The Second Circuit affirmed. It claimed that Tanella had a reasonable belief that Dewgard was about to grab his gun. Under such circumstances, even if Tanella incorrectly evaluated the circumstance, he was immune from prosecution under the Supremacy Clause.

The decision can be found here.

Something's not kosher. That's what the plaintiff in Yerushalyim v. United States Department of Corrections thought. He brought an action against the United States Department of Corrections complaining that he was deprived of kosher food during his 49-hour incarceration in November 2000. Unfortunately for Mr. Yerushalayim, there is no such agency as the United States Department of Corrections. The prisons are run by the Federal Bureau of Prisons. The District Court dismissed his action on the ground that federal agencies are immune from suit for such claims and even if Mr. Yerushalyim has intended to sue the Bureau of Prisons, the Bureau was immune from suit. Mr. Yerushalayim moved for relief from the order, requesting leave to change the caption to name the Bureau as the sole party in place of the non-existent Department of Corrections. He did not seek leave to add as parties the individual federal officials who were allegedly responsible for the violation of his rights. The motion was denied as untimely.

Yerushalayim did not give up. He appealed from both orders and sought leave to proceed in forma pauperis, but did not mention the issue of amending his complaint to name the relevant federal officials. The Court granted the motion and appointed counsel to brief the issue of the denial of his kosher meals, but dismissed as frivolous his appeal from the order denying his mtoion for relief from the judgment.

By the time counsel was appointed, the 3-year statute of limitations had passed on his constitutional claims. If Yerushalayim were to amend his complaint, it would be untimely unless it could relate back. However, since Yerushalayim had been put on notice by the Court's original order that he had named the wrong parties, the amendment would not relate back to the initial pleading. Hence, he was time barred.

Yerushalayim had one other arrow in his quiver. He had sued under the Religious Land Use and Institutionalized Persons Act. The Court, however, held that the Act does not create a cause of action the federal government or its correctional facilities, and, hence, Yerushalayim had no claim under the Act.

The decision in the case can be found here.

In today's New York Law Journal, it is reported that Judge Calabresi has apologize profusely for the comments he made at the American Constitution Society Conference a few days ago. This apology was contained in a letter released by the Second Circuit. I have posted on this story previously here and here. Unfortunately, I could not give a direct link to the article. I'm not sure if it's even available on line, but it's on page 2 of the paper edition.

Update: Here's a link to the Reuter's story on Judge Calabresi's apology.

Today's New York Sun has another article on the Calabresi affair. Evidently, the judge was (or may have been) on Clinton's short list for the Supreme Court. (Sorry, in that I am not a subscriber to the Sun's electronic edition, I cannot link to the article.) Of course, in that he's 71 now, it's unlikely that he would be nominated if Kerry is elected, and it is pretty certain, in light of his remarks at the American Constitutional Society, which I posted about here, that he will get the nod from Bush. Hmmm, I still haven't heard anything about impeachment. Is the House getting mellow?

Well, the New York State Court of Appeal's docket is getting heavier due to certified questions from the Second Circuit. On June 21, 2004, as reported yesterday, the Court certified a series of questions related to common law copyright. On June 18, 2004, the Court in State Farm Mutual Automobile Ins. Co. v. Mallella, the Second Circuit has certified the question of whether an insurer may refuse to compensate medical providers for healthcare services that are within the scope of the no-fault program in every way except that they are provided by health care professionals employed by medical practices that, under state education and business laws, are unlawfully incorporated. The decision can be found here.

The Second Circuit, on June 21, 2004, certified three question to the New York State Court of Appeals relating to common law copyright of recordings made prior to February 15, 1972. The questions are:

1. whether the expiration of the copyright under the law of the United Kingdom (where the recordings were made) precludes any claim under New York's common law of copyright.

2. whether copyright infringement under New York common law requires some or all of the elements of the tort of unfair competition

3. whether a claim of copyright infringement under New York common law is defeated by showing that the allegedly infringing work is a "new product."

The infringing work at issue in Capitol Records, Inc. v. Naxos of America, Inc. consist of restorations of recordings of important classical performances. The decision in the case can be found here.

Oh boy! If you haven't seen this article in today's New York Sun (a paper that I read regularly but by fluke did not pick up today), check it out. At the annual meeting of the American Constitution Society, Judge Guido Calabresi of the Second Circuit compared George W. Bush's ascendency to the presidency to that of Mussolini and Hitler.

Now, of course, the Judge was not comparing Bush to Hitler; he specifically said he was not. He was merely pointing out that those politicians who are put into power without winning an election sometimes try to "exercise much power," which might be a legitimate complaint against the current officeholder. But one would expect a little more tact from an Article III judge. And I'm saying this from the prospective of a Democrat who often refers to Bush as The Usurper.

How long do you think it will it take the rightwingers to call for the impeachment of the Judge? Especially since the Judge also said that Bush should be expelled from office, claiming that this view was based not on politics, but "the structural reassertion of democracy." Hmmm. I think I hear knives being sharpened at this very moment on Capitol Hill.

At any rate, thanks to Howard Bashman of How Appealing for cluing me in to this story. Eugene Volokh has this to say about the Judge's statement. The Curmudegeonly Clerk has this to say.

Oops! Two parole officers attempting to pick up an absconded parolee instead picked up a lawsuit. But the doctrine of qualified immunity saved them from liability. The parole officers had been provided erroneous information as to the whereabouts of the parolee. As a result, they came into the residence of a person who was not the parolee and searched the premises. Once they found out that the information was erroneous, they left. A lawsuit ensued. The District Court declined to grant summary judgment on the plaintiff's Fourth Amendment claim, holding that there were triable issues of fact relating to the legality of the warrantless search. In a decision issued on June 10, 2004, the Second Circuit reversed, holding that the parole officers' actions were reasonably related to their duty to supervise the parolee, the search complied with the rules and regulations of the State Division of Parole, and the officers reasonably believed that they were entering the residence of the absconded parolee. Under these circumstances, the parole officers were entitled to qualified immunity. The decision in Moore v. Vega can be found here.

Readers of this blog may be interested in Matthew Lerner's blog on New York Civil Law. I came across it last week and found it to be quite interesting. And since he mentioned this blog in a recent post, I thought I would return the favor.

Off topic. Howard Bashman of How Appealing makes a good point in this post, in which he wonders who on the Supreme Court will have to recuse himself (or herself) from any subsequent case challenging the constitutionality of the Pledge of Allegiance. As we all know, Scalia recused himself because of public comments he had made about the Newdow case before it reached the Supreme Court. Will Scalia have to recuse himself again if a new case on this issue reaches the Supreme Court? And what about O'Connor, Thomas and Rehnquist, all of whom are on the record as having an opinion on the merits of the issue? And when you think of it, Scalia, Thomas and Rehnquist are all on record as stating that there is no constitutional right to an abortion under any circumstances. Should they recuse themselves from any future abortion cases? I'm not sure what the answer is, but it sure is an interesting question.

UPDATE: Lyle Denniston at SCOTUS also agrees that this is an interesting question in this post.

Off topic. I just want to refer my readers to a new legal blog on intellectual property law authored by Chris Rush Cohen, a third year law student at my alma mater, the Benjamin N. Cardozo School of Law. The blog can be found here. I think it's really good. Check it out.

An issue of New York law, which had been referred to the New York State Court of Appeals by the Second Circuit, has been decided. The issue was whether punitive damages were available against a municipality under New York City Human Rights Law. The New York State Court of Appeals, in Krohn v. Katt held that such damages were not available. (That Court's decision can be found here.) The Second Circuit allowed the parties to present letter briefs commenting on this decision. In light of the state court's decision, the Second Circuit, in Krohn v. Katt, held that the vacatur of the punitive damages award by the District Court was proper and affirmed. The Second Circuit decision can be found at the Second Circuit website. The decision is dated June 9, 2004.

The Second Circuit Court of Appeals is closed today for the Day of Mourning for the late Ronald Reagan. No new cases.

In a case that gives new meaning to the term "secret justice," the Second Circuit has held that the press has a qualified First Amendment right to access to docket sheets of cases in the Connecticut state courts. The Connecticut state court system had, over the past 38 years, decided thousands of cases where sealing procedures prohibited court personnel from giving the public access to the court files, and, in some instances, from acknowledging the cases altogether. The plaintiffs, newspapers, found out about this practice and uncovered it in an article, which implied that, while some cases may have been legitimately sealed (juvenile records, bar grievance cases), others may have been sealed at the behest of prominent parties, who did not want litigtion in which they were involved made public.

The article had the desired effect of reform, but the newspapers wanted to find out what the Courts had been hiding in the past, and commenced this action. They sought an order, pursuant to 42 U.S.C. 1983 and 1985, requiring the Court personnel to provide them with the docket sheets to the sealed cases. The defendants argued that they lacked the power to provide the relief sought in that the files were subject to court orders and/or statutes. The district court agreed with the defendants and dismissed the action.

Although the district court had not reached the First Amendment issue, the Second Circuit found that it was "a matter of law suitable for determination by an appellate tribunal in the first instance." The Court, following estblished precedent, noted that the First Amendment secured the public's capacity to inspect certain court records. The Court stated that "the ability of the public and press to attend civil and criminal cases would be merely theoretical if the information provided by docket sheets were inaccessible. In this respect, docket sheets provide a kind of index to judicial proceedings and documents, and endow the public and press with the capacity to exercise their rights guaranteed by the First Amendment." Other circuits that had considered similar issues had also found that the First Amendment provides a right of access to docket sheets.

As to the issue of whether the plaintiffs could provide the relief sought, the Court found that the record was inadequate to make a determination. The defendants had not presented any orders or statutes that would preclude them from turning over the requested docket sheets. The Court determined that a remand on this issue was warranted.

Finally, the Court held that none of the abstention doctrines were applicable to the case.

The decision in Hartford Courant Co. v. Pellegrino can be found here.

On June 4, 2004, the Second Circuit decided Weiler v. Chatham Forest Products, Inc.. That case raised the question of whether a private individual could sue in federal court , under section 304(a)(3) of the Clean Air Act, to challenge the determination of the New York State Department of Environmental Conservation ("DEC") that the defendant may proceed with the construction of a factory without obtaining a particular permit.

The defendant proposed to build an oriented strand board manufacturing factory (whatever that is) in Lisbon, New York. The manufacturing process produces pollutant that may be emitted into the atmosphere. The defendant did not obtain a "major source" permit, which the plaintiffs claim is required. The defendant claims that it does not require such a permit in that the DEC had determined that such a permit was not necessary and issued a different permit (a synthetic minor source permit).

The district court dismissed the case, holding that federal judicial review is prohibited under the circumstances. The Second Circuit reversed and remanded.

The Court noted that citizen suits play an important part in the enforcement of the Clean Air Act. Since Congress did not preclude such suits or even evidence an intention to do so, there would seem to be no reason to preclude such suits. The Court rejected the argument that the existence of other mechanisms of enforcement preclude citizen suits.

The Court remanded that action for further proceedings consistent with its decision. The decision can be found at the Second Circuit website.

The Second Circuit, on June 4, 2004, held that the School District of Mamaroneck and the School District of Pelham had violated Title IX of the Education Amendments of 1972 and its governing regulations by holding men's soccer in the fall, when the men's team could participate in the New York Regional and State Championships, and holding the women's soccer program in the spring, when the women's team could not so participate. The decision in Mccormick v. School District of Mamaroneck can be found here.

I'm a little behind the curve on this one. For those of you who depend on me for your Second Circuit news, I'm sorry. On May 28, 2004, the Court in United State v. Geibel dismissed 80 counts of insider trading on the basis of venue. The only connection between the trades and New York is that the insider information was misappropriated in New York, which the Court found was insufficient to support venue. A few counts for which some evidence of a New York connection was submitted were upheld. A conspiracy count, which had New York connections was upheld (although the Court narrowed the conspiracy because the tipper had no knowledge of the ultimate tippees and vice versa), and the commercial bribery counts were upheld. The decision can be found here.

An interesting question relating to contingency fee attorneys arose in Universal Acupuncture Pain Services, P.C. v. Quadrino & Schwartz, a case that was decided on June 2, 2004. There, the appellant, a law firm, had agreed to represent the appellees on a contingent fee arrangement. The clients, in the midst of the litigation, fired the law firm. The law firm claimed that it was entitled to be paid on a quantum meruit basis and requested that the Court determine and award attorneys' fees on that basis. The District Court postponed the determination of that issue until the resolution of the case, holding that the fact that the law firm had a contingent fee agreement with the client was still relevant and that, by electing to be paid on a quantum meruit basis, the law firm was only able to recover a fixed fee from its former client's ultimate recovery.

The lawsuit settled without a monetary award to the clients. The magistrate recommended, based on the District Court's ruling, that the law firm should not be paid and did not determine whether the law firm had been discharged for cause. The District Court adopted the magistrate's report, and the law firm appealed.

The Second Circuit, applying New York law, held that unless the law firm was discharged for cause, it was entitled to be paid the reasonable value of its services, even if it had a contingent fee agreement. The Court held, however, that the District Court had not abused its discretion to wait until the end of the litigation to decide the issue of compensation even though it is usual for such a determination to be made immediately after discharge.

The Court did hold that the District Court had abused its discretion by deciding that the law firm was precluded from recovering based on the fact that the clients did not obtain a monetary award. It noted that such a position is inconsistent with the usual practice of determining the amount of fees immediately after discharge. While the Court recognized that such a holding might constain a client's ability to terminate representation, it was bound by New York State precedent, holding that attorneys are entitled to such compensation even where there was a contingent fee agreement. The case was remanded to the District Court for a determination of whether the law firm was discharged for cause, and, if it was not, for a determination of fees based on quantum meruit.

The decision can be found at the Second Circuit website.

Sorry for the gap in posting. I have been away and have not had access to reliable internet service. Not that much seems to have been happening in the Second Circuit over the past week. Oh, yeah, there's D.A.S. Sand & Gravel, inc. v. Chao, in which a mine operated by petitioner was cited by the Department of Labor for multiple regulatory violations under the Federal Mine Safety and Health Amendments Act of 1977. The petitioner claimed that because all of the coal that it mined was provided to in-state endusers, the Act did not apply. Silly petitioner. The Commerce Clause covers virtually everything, and the Court found that it was Congress's intent to invoke its full authority under the Commerce Clause. The decision was issued on May 26, 2004 and can be found here.

On May 24, 2004, in Clarett v. National Football League, the Second Circuit reversed the District Court's holding that the NFL eligibility rule which prohibited any player less than three football seasons removed from high school from participating in the draft violated the antitrust laws.

The Second Circuit noted that the rule was part of a collective bargaining agreement. The Courts have established a non-statutory exception to the antitrust laws, whose purpose is to allow meaningful collective bargaining to take place by protecting some restraints on competition imposed through the bargaining process from antitrust scrutiny.

The Court held that it would not give football players rights under the antitrust laws that were not enjoyed by transport workers, coal miners or meat packers. As no important antitrust policies would be vindicated by upholding the antitrust claim, the Court applied the exception and remanded the case to the District Court, where judgment will be entered in favor of the NFL.

Maurice Clarett will have to wait until next year to play in the NFL.

The decision can be found here.

On May 20, 2004, in Blue Tree Hotels Investment (Canada), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., the Second Circuit dealt with issues involving section 2(c) of the Robinson-Patman Act. The plaintiffs owned certain hotels, which were managed by the defendants, which owned other competing hotels. The defendants, who were authorized to make purchases on behalf of the plainiffs' hotels, allegedly received kickbacks or rebates from some of the suppliers. The plaintiffs claimed that this violated section 2(c) of the Robinson-Patman Act.

The District Court dismissed the action, claiming that the plaintiffs lacked standing to assert the claim. It held that only competitors of the suppliers who were paying the kickbacks or rebates had such standing.

The Second Circuit disagreed with the District Court, but, nevertheless, agreed that the case should be dismissed. First, it held that the plaintiffs need not show "competitive injury," but rather "antitrust injury." The latter could be satisfied by showing that the defendants had violated the antitrust law and the plaintiffs had been injured as a result of the violation. Under this standard, the plaintiffs had standing to assert a claim.

The Court, however, held that the claim has pleaded could not stand. The issue of whether commercial bribery constituted a violation of the Robinson-Patman Act is an open one in the Second Circuit, and the Court did not resolve the issue in this case. It instead held that the plaintiffs had not set out a claim for commercial bribery. They had not alleged that the rebates or kickbacks were paid by the vendors with the intent to improperly influence the defendants' conduct on behalf of the plaintiffs. Unless someone intends to bribe a party, there can be no bribe. The absence of such an allegation, in the view of the Court, mandated dismissal.

The case can be found at the Second Circuit website.

On May 21, 2004, in United States v. Numisgroup International Corp., the Second Circuit considered whether the presence of objective and subjective grading factors in valuing coins immunizes a seller from a criminal charge of fraudulently misrepresenting the grade and value of coins to purchasers. The Court upheld the District Court's finding that even though there were certain subjective factors in valuing coins, no such factor accounted for the huge differential between the grading and the actual value of the coins. The decision can be found at the Second Circuit website.

On May 20, 2004, the Second Circuit decided Labarbera v. Clestra Hauserman Inc.. The plaintiffs in that case sought, among other things, to compel one of the defendants to post a surety bond, pursuant to a collective bargaining agreement. The action was brought under ERISA. The plaintiffs prevailed and sought attorneys' fees under 29 U.S.C. 1132(g)(1). The District Court found that it did not have discretion to award attorneys' fees. The Second Circuit disagreed, finding that the statute did give the District Court the discretion to award such fees. Big deal. The defendant is out of business. The decision can be found here.

On May 19, 2004, in Ontario Public Service Employees Union Pension Trust Fund v. Nortel Networks Corp., the Second Circuit decided that a party does not have standing to bring an action against a company under Section 10(b) of the Securities Exchange Act and Rule 10b-5 if the party did not purchase the company's stock. The plaintiffs in this case had purchased shares of a company that had a business relationship with the defendant based on representations made by the defendants. The Court, however, found that the plaintiffs lacked standing, holding that the private right of action under section 10(b) and Rule 10b-5 should be construed narrowly. The decison can be found at the Second Circuit website.

In Collazos v. United States, decided on May 18, 2004, the Second Circuit was presented with its first opportunity to interpret the disentitlement provision of the Civil Asset Forfeiture Reform Act of 2000. Collazos is a Colombian national, who appears to have been involved in money laundering in the United States. The government brought an in rem forfeiture action against the contents of an account that she had with Prudential Securities, which were allegedly connected to her money laundering activities. Collazos also had criminal problems, including state charges in Texas and federal charges in Florida. She chose not to come into the United States to confront those charges. The government sought to dismiss her claim in the forfeiture action on the ground that as a person who refused to enter the United States to answer pending criminal charges, she was not entitled to be heard in a related criminal proceeding. The District Court granted the government's motion, and Collazos appealed.

Collazos asserted that 28 U.S.C. 2466, which is entitled "Fugitive disentitlement" cannot be applied to her because she is not a "fugitive" as that term is understood at common law. She claimed that in order to be a fugitive, one must have been present in the United States at the time the crime was committed and fled the jurisdiction. Collazos had not been in the United States since 1977.

The Second Circuit noted that while the title of the statute contained the word "fugitive," that word is not found in the text of the statute. The text of the statute, on its face, applied to persons who had never been in the United States, but who knew they were subject to arrest in the United States and who refused to enter the country to avoid prosecution. Hence, the statute applied to Collazos.

The Court further noted that the Supreme Court in 1996 had held that a court, through its inherent authority, could not apply the common law fugitive disentitlement doctrine against a criminal defendant in a civil forfeiture action. Congress, however, conferred statutory authority to order disentitlement in civil forfeiture cases. The statutory authority was not limited to common law fugitives.

The Court rejected Collazos's contention that disentitlement violated due process. She was not denied a right to be heard. All she had to do was enter the country. Her failure to comply with that statutory requirement caused the Court to dismiss her claim in the forfeiture action. In addition, the Court noted that Collazos had had notice of the government's motion and could have been heard as to her position as to whether she met the statutory requirements for disentitlement. And, as disentitlement was not mandatory, she was also free to present such evidence as would show that justice would not be served by disentitlement.

Judge Katzmann concurred with the majority decision and wrote a concurring opinion in which he noted that the legislative history suggested that the intention of the legislature in enacting the disentitlement statute was to reinstate the common law doctrine, not to broaden it. He agreed with the majority, however, that the plain statutory language mandated the result reached by the majority.

The decision in this case can be found here. Judge Katzmann's concurring opinion can be found on the Second Circuit website.

On May 13, 2004, in Mony Group, Inc. v. Highfields Capital Management, L.P., the Second Circuit reversed the denial of a preliminary injunction in a case involvoing a proxy fight. The issue in the case was whether a duplicate copy of a proxy card that had been sent by MONY to its shareholders was a "form of revocation," which would require the defendants to comply with all proxy rules. A solicitation by a person who does not seek the power to act as proxy and which does not contain a form of revocation of a prior proxy is not subject to the SEC proxy regulations. MONY sought to enjoin the defendants, who were opposing a merger proposal favored by MONY's management, from including the duplicate card in their solicitations to shareholders. The District Court denied the motion, concluding that MONY was unlikely to succeed on the merits. The Second Circuit reversed holding that, under the circumstances of the case, the duplicate proxy form was a form of revocation under the SEC rules. The Court also held that MONY would be irreparably harmed if the solicitation went out without satisfying the disclosure regulations promulgated by the SEC. The decision can be found here.

On May 11, 2004, in Hemstreet v. Greiner, the Second Circuit affirmed a grant of a petition for habeas corpus on the ground that the petitioner's trial and appellate counsel in his criminal case (homicide) were ineffective. The basis for this finding was that a possible defense witness had been intimidated by the police not to speak with the defense. She purportedly had evidence that was consistent with the defense theory of the case (that he was not present when the victim was murdered). The trial attorney alerted the Court to the intimidation, but did nothing further, and the witness did not testify at the petitioner's trial (his second, his first having been reversed because of a grand jury error). The petitioner's appellate counsel did not raise the issue on appeal. The District Court had found that the witness had not testified because of the intimidation, and the Second Circuit held that that finding was not clearly erroneous. Based on that finding, the Second Circuit held that trial counsel's performance fell below an objective standard of reasonableness and that his performance affected the outcome of the trial. Similarly, the Second Circuit noted that trial counsel's failure to obtain the testimony of the exculpatory witness was an obvious issue for appeal, which he did not advance. This failure prejudiced his appeal.

The decision was not unanimous. Judge Barrington D. Parker dissented. He did not believe that the record established the ineffectiveness of trial counsel. This, of course, meant that the appellate counsel could not be faulted for raising an issue where the record was not properly developed.

The decision and dissent can be found at the Second Circuit website.

WorldCom figures in two posts in a row!

On May 7, 2004, the Second Circuit, in Hevisi v. Citigroup Inc., allowed certain parties to file an interlocutory appeal of an order granting class certification. The case, as to those parties, involved a research analyst, who had expressed very positive opinions about WorldCom, which was a client of his company. The defendants, Citigroup and certain related entities had argued that the District Court had assumed that the fraud-on-the-market doctrine applied to expressions of opinions by a research analyst, which assumption the defendants felt was erroneous. Under that doctrine, reliance, an essential element of a securities fraud claim, is presumed. If it does not apply, then each plaintiff would have to show individual reliance, and individual questions would predominate over common questions of fact, meaning that a class could not be certified. The Court held that the certification order implicated a legal question about which there was a compelling need for immediate resolution. The issue would have a major effect on class action securities actions. The Court also noted that since securities actions are often not litigated to conclusion, it is unlikely that the issue would ever be resolved. The decision can be found here.

On May 11, 2004, the Second Circuit decided an issue of first impression in California Public Employees' Retirement System v. Worldcom Inc., whether a federal district court can exercise bankruptcy jurisdiction over generally nonremovable claims brought under the Securities Act of 1993. The issue involved two conflicting statutes, section 22(a) of the Securities Act, which provides that an action under the Act brought in a state court may not be removed, and 28 U.S.C. 1452(a), which permits removal of claims that are related to a bankruptcy case. Because of the importance of the issue, the case was heard on an interlocutory basis. The Court held that the conflict between the statutes must be resolved in favor of bankruptcy removal. The Court noted that under Supreme Court precedent a specific statute takes precedence over a general one. The Court first found that section 22 was not more "specific" than section 1452. But it then noted that even if it were more specific, section 22 unduly interferes with the operation of the Bankruptcy Code, an exception under that same Supreme Court precedent. The Court also refused to find that because the section 22(a) was amended in 1998, it trumps section 1452(a), which was enacted in 1984, absent a showing that Congress intended to give individual plaintiffs an absolute choice of forum for claims brought under the Securities Act. Nothing in the text or legislative history of the section indicated that that was Congress's intent. As the Court noted, there are a number of district court cases taking an opposite view. We might hear more of this issue in the future. The Court's decison can be found here.

A case involving the unpublished poems of Dorothy Parker was decided by the Second Circuit on May 7, 2004. Silverstein v. Penguin Putman, Inc. involved a dispute between Stuart Silverstein, an individual who put together a collection of Ms. Parker's unpublished poems, and Penguin Putnam, Inc., which published a book of all of Ms. Parker's poems, including the one's in Silverstein's book. The District Court had enjoined Penguin from selling its book and had granted summary judgment to Silverstein, finding the Penguin had infringed on his copyright and violated the Lanham Act and state law. Penguin appealed. The Second Circuit held that questions of fact existed as to whether Silverstein exercised creativity in selecting the works for his compilation. If he did not, he has no claim for copyright infringement. The Court reversed the grant of summary judgment on that count and remanded it to the District Court. It also found that the issuance of an injunction was an abuse of discretion.

Oy! "We are left in the unhappy position of being required to reverse a conviction notwithstanding our knowledge that the defendant is guilty. That is the consequence of being governed by the rule of law." That's what the Second Circuit said in United States v. Jackson, where it reversed the conviction of Aaron L. Jackson for being in possession of ammunition by a previously convicted felon, in violation of 18 U.S.C. 922(g)(1). the government had proved that he was a previously convicted felon by introducing a court record showing a New York felony conviction for a person named Aaron Jackson. But the government did not show that the conviction related to this Aaron Jackson, and, therefore, had not proved its case beyond a reasonable doubt. The case can be found at the Second Circuit website.

Off topic. The Sixth Circuit, on April 30, 2004, upheld the denaturalization of Nazi war criminal John Demjanjuk. I was involved in this case in an earlier round of the litigation, representing the World Jewish Congress and Holocaust Survivors and Friends in Pursuit of Justice, Inc., as amici curiae. The Sixth Circuit, in my view, had bent over backwards to benefit Demjanjuk in the past. I am glad that this time they got it right. The decision can be found here.

Off topic. I was in my local Barnes & Noble yesterday and picked up a copy of Richard Kluger's Simple Justice, which has been reissued in a nice trade paperback. The book is a fascinating study of Brown v. Board, probably the best history of a famous case that I have ever read (and I've read a lot of them). This new edition was released to coincide with the 50th anniversary of the case, and contains some new material. Highly recommended.

Well, the Second Circuit has started issuing full opinions again. Yesterday, the Court rendered a decision in Gold v. Deutsche Aktiengesellschaft. In that case, Gold, a homosexual man, broght an action in which he alleged sexual harassment against his employer. Gold, however, had signed a Form U-2, which mandated arbitration of all claims. Gold asserted that such claims were not subject to arbitration, citing cases from the Ninth Circuit and Massachusetts. The District Court sent the case to arbitration, where, after 30 sessions, the arbitration panel found for the defendants and dismissed the claims. Gold went back to Court, continuing to assert that his claims should be heard in Court. The District Court disagreed and dismissed his action. The Second Circuit affirmed. First, it held that sexual harassment claims were subject to arbitration based on prior precedent in the Circuit. It did not find special circumstances warranting invalidating the arbitraion clause. Gold had not read the Form U-4 carefully nor did he question it. That was his responsibility. The case can be found at the Second Circuit website. It was decided on April 21, 2004.

I'm mortified by my failure to post for a while, but it's not my fault. The Second Circuit hasn't issued a full opinion since April 14, if I'm not mistaken. The most recent rash of cases was on April 15, and they were all summary decisions. Don't worry, folks, once the Second Circuit starts cranking out the decisions again, you'll read about it here.

In United States v. Nucci, the Second Circuit considered an issue of first impression in the Circuit -- whether it was improper to order a number of defendants to pay restitution to a victim, where the cumulative effect of the orders would be that the victim would receive a windfall. Nucci argued that the Court should have apportioned the restitution among the defendants, rather than ordering each to pay the full amount, or limited the total amount that the victim could receive. The Court stated that is was within the District Court's discretion to apportion the restitution under the statute, and that any restitution obligation may be ordered to be joint and several. The Court noted that nothing in the statute precluded double recovery by a victim in the criminal context, nor does it expressly state that the defendant's restitution obligation ceases upon the victim having been made whole by receipt of restitution payments from other co-defendants. The Second Circuit, however, joined the Seventh and Ninth Circuits in holding that the statutes, although they do not explicitly say so, bar the recovery by the victim of any sum above his or her actual loss. The Court stated that to hold otherwise would be in derogation of the common law. The Court was unwilling to allow for such a windfall in the absence of clear and unequivocal language from Congress. The decision can be found on the Second Circuit website. It was decided on April 14, 2004.

In a case where Judge Calabresi concurs with himself (it's true; I couldn't make that up), the Second Circuit has held that the provisions of the Antiterrorism and Effective Death Penalty Act, which took away from the petitioner, who was being deported after serving a term of incarceration on a drug offense, the right to seek discretionary relief from the Attorney General, could not be applied retroactively in this case. The petitioner could have sought such relief at the time of his arrest, but chose to wait to a later time, expecting that he would have a stronger case after he had a record of rehabilitation after serving his sentence. Hence, his settled expectations were frustrated when the new legislation took away such rights. Since the Act did not clearly state that it was to be retroactive, the Court held that it could only be applied retroactively if it did not frustrate settled expectation. The Court noted that the district court, which had granted habeas relief to the petitioner on the ground that the Act could not be applied to criminal conduct that preceded the passage of the Act was wrong. It remanded the case to the District Court to determine whether the petitioner could make an individualized showing that he had relied on his right to make an application for discretionary relief at a later time in waiving his right to do so at an earlier time. As noted, Judge Calabresi wrote the decision and issued a concurring opinion, in which the other panel members did not join, which provides "an explanation of the current state of the law in this complicated area, and how it relates to [this] case." The decision in Restrepo v. McElroy can be found here. Unfortunately, I cannot get a direct link to the concurring opinion, but it can be found at the Second Circuit site.

The question of whether the Probation Department's monitoring of a convicted pornographer's computer violates the Fourth Amendment arose in United States v. Lifshitz, a case decided by the Second Circuit on March 30, 2004. The case, authored by Judge Katzmann, was one of first impression in that the Second Circuit had "never evaluated the conformity of special conditions of probation or supervised release with the Fourth Amendment." The Court noted that, under Supreme Court precedent, to allow a special needs search in the absence of probable cause or a warrant, (1) the government must allege a special need, (2) there must be a diminished expectation of privacy and (3) the search must seek a minimum of intrusiveness coupled with maximum effectiveness so that the searches bear a close and substantial relationship to the government's special needs. The Court remanded the case to the district court to evaluate the privacy implications of the proposed computer monitoring techniques as well as their efficacy as compared with computer filtering, and then to impose a condition. The decision can be found here. Stay tuned for future developments.