Internet radio. The Second Circuit is the first appellate court to determine whether a webcasting service that provides users with individualized internet radio stations, the content of which can be affected by the users ratings of songs, artists and albums, is an interactive service under 17 U.S.C 114(j)(7). If it were an interactive service, the webcasting service would be required to pay individual license fees to the copyright holders of the sound recordings of songs the webcasting service pays for its users. If it is not, it must only pay a statutory licensing fee set by the Copyright Royalty Board. The Court held that it was not an interactive service.

The decision in Arista Records, LLC. v. Launch Media, Inc. can be found here.

Another certified question. The Second Circuit, in Zakrzewska v. New School, certified the following question to the New York State Court of Appeals:

Does the affirmative defense to employer liability articulated in Faragher v. City of Boca Raton and Burlington Industries v. Ellerth apply to sexual harassment and retaliation claims under section 8-107 of the New York City Administrative Code.

The Supreme Court in those cases provided that an employer would not be liable under Title VII for sexual harassment by a supervisor if the employer can prove that (1) no tangible employment action, such as discharge, demotion or undesireable reassignmentwas taken as part of the alleged harassment, (2) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior and (3) the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

The decision can be found here. When the Court of Appeals acts, it will be reported.

Admission to U.S. Denied. Tariq Ramadan was denied admission into the United States because he had made a donation to a charity that had supplied funds to Hamas and that such contributions were "material support" to a terrorist organization (the charity). The Second Circuit vacated and remanded the decision of the District Court, holding that the record was not clear whether the consular officer had confronted Ramadan with the allegations against him and afford him the opportunity to prove by clear and convincing evidence that he did not know (and reasonabley should not have known) that the recipient of his contributions was a terrorist organization.

The decision in American Academy of Religion v. Napolitano can be found here.

Regular Seller. The plaintiff who was injured by a machine sought to sue the company that sold it to him under a theory of strict liability. In order for the seller, who had sold the machine, second hand, to be liable, he would have to be a regular seller. The defendant argued that it was only a casual or occassional seller of such machines, and the district court, agreeing, dismissed the action. The Second Circuit certified the question of whether the defendant was a regular seller of the machine to the New York Court of Appeals. The Court of Appeals held that the defendant was not a regular user and, based on that holding, the Second Circuit affirmed the decision of the District Court, dismissing the action.

The decision in Jaramillo v. Weyerhawuser Company can be found here.

Certified Question. The Second Circuit has certified two questions to the New York State Court of Appeals:

1. Where a worker who is serving as a counterweight on a makeshift pulley is dragged into a pulley mechanism after a heavy object on the other side of a pulley repidly descends a small set of stairs, causing an injury to plainitiff's hand, is the injury (a) an "elevation related injury," and (b) directly caused by the effect of gravity, such that section 240(1) of New York's Labor Law applies?

2. If an injury stems from neither a falling worker nor a falling object that strikes a plaintiff, does liabiity exist under section 240(1) of New York's Labor Law?

The decision in Runner v. New York Stock Exchange can be found here.

Answer to Certified Question. The Second Circuit had certified a question to the New York State Court of Appeal. The question, as modified by the Court of Appeals asked whether, under New York law, a non-custodial parent retains decision-making authority pertaining to the education of his child where (1) the custodial parent is granted exclusive custody of the child and (2) the divorce decree is silent as to the right to control such decisions. The District Court had dismissed the action, holding that the non-custodial parent lacked standing to challenge decisions made as to the special education of his child. The New York State Court of Appeals answered the question in the negative, and the Second Circuit affirmed the decision of the District Court.

The decision in Fuentes v. Board of Education of the City of New York can be found here.

Sanctions. The Second Circuit has said, "Enough is enough" to plaintiff Bernard P. Gollomp and his attorney, James Morgan, who have been litigating a case in various permutations for eleven years. In Gollomp v. Spitzer upheld an award of sanctions against the plaintiff and his attorney for their repeated "frivolous and vexatious" claims against the state.

The decision can be found here.

Forum Selection Clause. A forum selection clause in the contract at issue in Yakin v. Tyler Hill Corp. provided for litigation in Nassau County. At the time the contract was executed, there was a federal court in Nassau County as well as a state court. By the time a dispute arose, however, the federal court has moved to Suffolk County. The plaintiff brought the case in Nassau Supreme Court, and the defendant removed it to the federal court. The plaintiff moved to remand based on the forum selection clause, and the District Court granted the motion. The defendant appealed.

The Second Circuit found that the forum selection court was not ambiguous, and that it set venue in Nassau County, not in a court whose jurisdiction covered Nassau County.

Careful how you draft those forum selection clauses.

The decision in this case can be found here.

Abuse of discretion. The Second Circuit has held that abuse of discretion is the appropriate standard of review to apply to a district court's ruling on a motion to reduce a sentence, pursuant to 18 U.S.C. 3582(c)(2).

The decision in Unites States v. Borden can be found here.

Googled. The Second Circuit has ruled that Google must face a trademark infringement lawsuit for selling keywords that trigger ads. The decision in Rescuecom v. Google can be found here.

New Judge. President Obama has nominated District Judge Gerard Lynch of the Southern Distirct of New York for a seat on the Second Circuit.

No bail. Bernard Madoff will remain in prison pending sentencing. The Second Circuit summary opinion, affirming District Judge Denny Chin's order can be found here.

Where's Heidi? A few years ago, I had adopted a law student blogger, Heidi Bond. She went on to clerk for Judge Alex Kozinski in the Ninth Circuit and Justice Sandra Day O'Connor on the Supreme Court (OK, Justice O'Connor was retired by that time, but working for a retired justice still means that you are working on important Supreme Court matters.) But I do not know what has happened to Heidi since. Is she working for a prestigious law firm? Is she with the DOJ? Has she given up law altogether? So I'm throwing it out to the blogosphere -- Where is Heidi Bond?

The fact is that I have never spoken to or seen Heidi Bond. Except by reading her blog and exchanging a few e-mails, I do not know her at all. So why do I want to know? Simple -- I get more hits on this blog from people searching her name than I do from people searching MY name. So why shouldn't I try to get a little more traffic to this site? So, if you know where Heidi Bond is, let me know. You can leave a comment by clicking on the # sign under this post or by e-mailing me at shausler at gmail dot com. Hope to hear from you.

Irreparable injury. Irreparable injury is not presumed in a trade secret case, where the owner of a trade secret is not alleging that the party that has wrongful possession of such a secret is planning on disseminating the secret to a wider audience. In Faivelely Transport Malmo AB v. Wabtec Corp., the Second Circuit reversed the grant of a preliminary injunction.

Judge Cabranes had a fun time with this decision, which involved subway breaks. Read on:

"To the parties in this case, subway breaks are known as "Brake Friction Cylinder Tread Break Units" ("BFC TBU"). For the rest of us, BFC TBU are "that loud squeaking, sparking braking system that so reliably stops the New York City Transit subway system. Twenty-four hours a day and 365 days a year, the City's subway cars safely stop at 468 passenger stations -- and as any straphanger knows, many times in between -- depositing riders of all classes and descriptions at homes, workplaces, ballparks and every other destination imaginable.

"The subway is an indelible feature of the City's culture. Its legend and lore fascinate locals and visitors alike. A point of personal pride for many New Yorkers, the City's subterranean transit has appeared in song, on stage and screen."

The decision quotes from the song "New York, New York" and the novel Bonfire of the Vanities. All subway buffs owe a debt of gratitude to Judge Cabarnes.

The decision can be found here.

Collapse. The Second Circuit is usually not shy to certify unclear questions of New York law to the New York State Court of Appeals. But in Dalton v. Harleyville Worcester Mutual Ins. Co. it declined to do so. The definition of what constitutes a "collapse" of a building had not been decided by the Court of Appeals, and the Second and Third Departments of the Appellate Division have taken different views. Rather than certifying the question to the Court of Appeals, the Court decided that the term was ambiguous and should be resolved against the insurer.

I would anticipate a motion for rehearing, asking that the issue be certified. The case involved the all too common occurrence of an insurance company disclaiming liability for damage that appears to be covered by the policy. Perhaps that is the reason that the Court acted as it did. The decision can be found here.

Calorie Counting. The Second Circuit has upheld New York City Health Code 81.50, which requires roughly 10% of the restaurants in New York City, including chains such as McDonlads, Burger King and Kentucky Fried Chicken, to post calorie content information on their menus and menu boards. The Court held that the statute was not preempted by federal law and did not violate the restaurants' freedom of speech.

The decision in New York State Restaurant Ass'n v. New York City Board of Health can be found here.

Champerty -- Certified Questions. In Trust for Certificate Holders of the Merrill Lynch Mortgage Investors Pass-Through Certificates Series 1999-C1, by and through Otix Capital Markets, LLC, as Master Servicer and Special Servicer v. Love Funding Corp., the Trust had sued Love Funding Corp. for breach of certain representations and warranties in a mortgage-loan-purchase agreement governing the origination of certain commercial loans held by the Trust. Love Funding asserted that the claim was champertous because the Trust had purchased the interest from USB Real Securities, Inc. for the sole purpose of suing Love Funding. After a bench trial, the District Court held that the assignment of interest from USB to the Trust was void as champertous and entered judgment for Love Funding. The Trust appealed.

The Second Circuit held that resolution of the appeal depended on significant and unsettled questions of New York law and certified those questions to the New York State Court of Appeals. The questions certified are:

1. Is it sufficient as a matter of law to find that a party accepted a challenged assignment with the "primary" intent proscribed by New York Judiciary Law 489(1), or must there be a finding of "sole" intent?

2. As a matter of law, does a party commit champerty when it "buys a lawsuit" that it could not otherwise have pursued if its purpose is thereby to collect damages for losses on a debt instrument in which it holds a pre-existing proprietary interest?

3. (a) As a matter of law, does a party commit champerty when, as the holder of a defaulted debt obligation, it acquires the right to pursue a lawsuit against a third party in order to collect more damages through that litigation than it had demanded in settlement from the assignor?

(b) Is the answer to question 3(a) affected by the fact that the challenged assignment enabled the assignee to exercise the assignor's indemnification rights for reasonable costs and attorneys' fees?

Aggravated Felony. The Second Circuit held that a state law drug conviction for a small quanity of marijuana was not an aggravated felony, warranting deportation. To make such a determination, the court looked to whether the offense was equivalent to felony drug traficking under the federal Controlled Substance Act ("CSA"). The CSA has an exception for the distribution of small amounts of mariuana without remuneration, treating it as a misdemeanor. The Court held that the petitioner in this case had not committed an aggravated felony because the crime fell within the CSA exception.

The decision in Martinez v. Mukasey can be found here.

No New Hearing. In a habeas proceeding, the district rejected the credibility determinations of the magistrate judge without holding a separate evidentiary hearing. Not a good idea. The Second Circuit vacated the ruling (granting the habeas relief) and remanded it to the district court for further proceedings.

The decision in Carrion v. Smith can be found here.

Discovery in an Arbitration. The Second Circuit held that section 7 of the Federal Arbitration Act does not authorize an arbitrator to compel pre-hearing document discovery from non-parties to the arbitration.

The decision in Life Receivables Trust v. Syndicate 102 at Lloyd's of London can be found here.