Cigarette taxes on Indian reservations. The Second Circuit has held that the District Court improperly enjoined the state from enforcing a cigarette tax on sales in Indian reservations. Because the tax was paid by the consumer, not by the Indian retailer, the law did not violate tribal immunity or the tribal immunity for state taxation. And while the retailers would bear an economic burden from the prepayment of the tax, that is only because they chose to participate in the taxable cigarette market.

The decision in Oneida Nation of New York v. Cuomo can be found here.

UPDATE: After losing before the Second Circuit, the tribes went to state court and obtained a temporary restraining order enjoining New York frommtaxing reservation cigarette sales to non-Indian customers. A hearing on the tribes' motion for an injunction will be held on June 1, 2011.

Certified Question. In Connecticutt, there is a common law "make whole" doctrine, under which an insurer's right of subrogation may only be enforced after the insured has been fully compensated for his loss. In Fireman's Fund Ins. Co. v. TD Banknorth Ins. Agency Inc., an insured argued that the insurer could not collect from the escrowed funds containing the settlement of its claims against third-parties until it had recovered its deductible ($150,000) under the "make whole" doctrine. The District Court held that the subrogation clause in the insurance contract abrogated the "make whole" doctrine. On appeal, the Second Circuit disagreed. However, the Court noted that the Connecticut courts had not decided whether the "make whole" doctrine applied to deductibles. The Court certified this question to the Connecticutt Supreme Court.

The Second Circuit's decision in this case can be found here.

Sanctions for frivolous and vexatious litigation. When April Gallop commenced an action claiming that Dick Cheney and Donald Rumsfeld orchestrated the September 11, 2001 attacks for their own political purposes, you could predict that the case was not long for the world. And, of course, it was dismissed. But unwisely, Ms. Gallop and her attorneys chose to appeal, and now they face an award of sanctions. The Second Circuit held that under Rule 38 of the Federal Rules of Appellate Procedure, 28 U.S.C. 1927 and its inherent power, it had the authority to impose such sanctions, provide adequate notice and an opportunity to be heard is afforded. The Court gave Ms. Gallop and her attorneys 30 days to show cause why they should be ordered to pay double costs and damages in the amount of $15,000.

The decision in Gallop v. Cheney can be found here.

No private right of action. The Second Circuit, in M.F. v. State of New York Executive Department Division of Parole has held that the Interstate Compact for Adult Offender Supervision does not create a private right of action. M.F., an individual who had been convicted of endangering the welfare of children in New Jersey sought to move to New York, where he worked. New Jersey made a request to New York that it take over the lifetime supervision imposed upon him. New York agreed, but required him, among other things to inform his employer of his conviction. M.F refused and decided not to relocate to New York. It brought an action against the New York Division of Parole, claiming that it had violated the Interstate Compact by placing requirements on him that would not be placed on a New York offender. The District Court granted summary judgment to New York, holding that M.F. had failed to show that a New York offender would have been treated differently. On appeal, M.F. argued that New York, on a motion for summary judgment, had the initial burden of showing that the same restriction would have been placed on a New York offender, and that because New York failed to make such a showing, an issue of material fact existed, precluding summary judgment. (M.F. also claimed for the first time that the District Court did not have jurisdiction over the action and requested that the Court remand the case to the District Court with instruction to dismiss the action so that M.F. could refile in state court.) The State on appeal claimed that the restrictions placed on M.F. were no different than those that could have been placed on a New York offender. It also argued, for the first time, that the Interstate Compact created no private right of action. The Second Circuit affirmed. First, the Court held that the District Court did have jurisdiction to hear the action. The Court then held that the Interstate Compact did not create a private right of action, so that even if the State had violated the Interstate Compact, M.F. had no remedy under it to bring an action for damages. The decision can be found here.

Standing. The Second Circuit has reversed the District Court's grant of summary judgment to the Government in a case involving the constitutionality of a provision of the Foreign Intelligence Surveillane Act of 1978, which provides the Government unregulated authority to monitor international communications. The action had been brought by attorneys, journalists, and labor, legal, media and human rights organizations, who had reason to believe that their international communications might be monitored. The District Court held that the plaintiffs did not have standing to bring the action. The Second Circuit reversed, holding the because the plaintiffs have reason to fear that they will be injured by the statute and that they have incurred expenses to avoid such injury, they have standing to bring the action. The Court did not address the merits of the action.

The decision in Amnesty International USA v. Clapper can be found here.

New Judge. The Senate has confirmed the nomination of Raymond Joseph Lohier, Jr. by a vote of 92-0.

Extraterritorial reach. The Second Circuit has held that the RICO statute does not have extraterritorial reach. The decision in Norex Petroleum Limited v. Access Industries, Inc. can be found here.

She's arrived! Who has? Why the daughter of my latest law student blogger adoptee, Izzie, that's who. She's named Z, at least on the blog, and Izzie has been stingy with pictures, but I'm sure that will change.

I haven't mentioned Izzie because I thought I'd wait until I updated my blogroll. But who knows when that will happen? You can follow her law school adventures (and non-law school adventures) at Only 3 Years.

And while I'm at it, my first law student blogger adoptee, Heidi Bond, after clerking for Judge Alex Kozinski of the Ninth Circuit and Justices Sandra Day O'Connor (retired) and Anthony Kennedy of the United States Supreme Court is now an Assistant Professor at Seattle University School of Law. (She has been since 2009. I've been holding out on you.)

And my second law student blogger adoptee, Butterflyfish is still blogging and is pregnant (second time). I'm sworn to secret about anything else.

No private right of action. The Second Circuit had held that a federal statute that bars discrimination against health care workers who refuse to participate in abortion procedures does not create a private cause of action. In Cenzon-DeCarlo v. Mount Sinai Hospital, an operating room nurse claimed that she was forced to participate in a late-term abortion and sued the hospital. The Court held that there was no evidence of congressional intent to create a private right of action.

The decision in the case can be found here.

Ooooh, technical. In Local Union 36, International Brotherhood of Electrical Workers, AFL-CIO v. NLRB, the Second Circuit dealt with a technical issue. The NLRB sought to have the case transferred to the DC Circuit because it had not been served with a copy of the petition for review stamped by the court with the date of filing, as required by statute. Because of this defect, the NLRB asserted that the appeal should be heard where the case had been instituted, i.e., in the DC Circuit. The petitioner had, however, served it with the petition for review, accompanied by the e-mail bearing the date and time of filing. The Second Circuit held that this was sufficient compliance with the statute and denied the NLRB's motion.

The decision in this case can be found here.

Attorneys' Fees. The Second Circuit has held that an attorney appearing pro se in a bankruptcy proceeding is not entitled to seek attorneys' fees under Bankruptcy Code 7430 after prevailing in challenging a claim filed against him in the bankruptcy court.

The decision in United States v. Hudson can be found here.

Reissued Order. The Board of Immigration Appeals dismissed a petitioner's appeal on the ground that no brief was filed within the time scheduled by the Court. The reason for this was that her attorney withdrew, and her new attorney moved for reconsideration. Within 30 days of the denial of that motion and after the BIA had issued a "Reissued Order," she appealed to the Second Circuit even though more than 30 days after had passed since the issunace of the original order. The Second Circuit held that the appeal was timely in that the petitioner was seeking relief was from the Reissued Order.

The decision in Lewis v. Holder can be found here.

Burned. In Moltner v. Starbucks Coffee Co. (discussed below), the plaintiff had been burned while opening the lid on a "Venti"-sized cup of coffee from Starbucks. The defendant moved for summary judgment, which motion was granted. The plaintiff put in expert affidavits to show that cups and/or lids were defectively designed. The district court held that all of affidavits did not meet the standard required by Rule 702 of the Federal Rules of Evidence. The Second Circuit agreed in a summary order.

The summary order can be found here.

Removal. The Second Circuit held that the time to remove a case begins to run from the time that the amount of damages are specified, not from the time the complaint is served (though, of course, that can be the same time). In Moltner v. Starbucks Coffee Co., the plaintiff did not specify the damages in her complaint. The defendant served a Request for Supplemental Demand for Relief. The plaintiff responded that she sought damages not to exceed $3 million. The defendant then sought to remove the case to federal court. The plaintiff sought to remand the case to state court, claiming that the removal was untimely. The Court declined to remand and granted defendants' motion for summary judgment (discussed in another post). The plaintiff appealed from the order denying her motion for remand and granting the defendant's motion for summary judgment.

The Second Circuit in upholding the decision not to remand the case, stated: "We join the Eighth Circuit, as well as all of the district courts in this Circuit to have addressed the issue, inholding that the removal clock does not start to run until the plaintiff serves the defendant with a paper that explicitly specifies the amount of monetary damages." The Court felt that it was unreasonable for a defendant to be forced to guess the defendant's damage and seek removal on the basis of such a guess.

The decision in this case can be found here.

No tax. The Indian and Mongolian missions are not subject to taxation, pursuant to a Notice issued by the State Department, pursuant to its authority under the Foreign Missions Act. The Notice establishes an exemption from real property taxes on property owned by foreign governments and used to house the staff of permanent missions to the United Nations or the Organization of American States or of consular posts. The Second Circuit held that the State Department had acted within its power in issuing the Notice.

The decision in City of New York v. Permanent Mission of India to the United Nations can be found here.

Psychedelic Drug Blawg. My friend and colleague Noah Potter has entered the blawgosphere with a new blog, which deals in large part, with medical marijuana issues. You can find the New Amsterdam Psychedelic Law Blog here.

Top Guns. While the Second Circuit is one of the most important commercial courts in the United States, we rarely get a number of top gun attorneys appearing in a single case. In Fox Television Statements, Inc. v. FCC. Three top well-known appellate lawyers appeared in the case -- Carter Phillips, Miguel Estrada and Seth Waxman. In a prior decision in the case, the Second Circuit had held that the indecency policy of the FCC was arbitrary and capricious under the Administrative Procedure Act. The Supreme Court disagreed and remanded the case to the Second Circuit to consider the petitioners' constitutional argument. On remand, the Second Circuit held that the policy violates the First Amendment because it is unconstitutionally vague, creating a chilling effect that goes beyond the "fleeting explitives" at issue in the case. The decision can be found here. Congratulations to Carter, Miguel and Seth for being among the prevailing attorneys. The case was argued on January 13, 2010. If I had known of the star power being assembled in this case, I certainly would have made time to come down for the argument.

No arbitration. The Second Circuit has held that an arbitration clause in a promissory note was unconscionable under California law because of class-action and class-arbitration provisions. Accordingly, the plaintiff, in Fensterstock v. Education Finance Partners, was able to continue his class action, which involved allegations of fraudulent and deceptive practices in connection with the solicitation, consolidation and servicing of student loans, in court. The Second Circuit's decision can be found here.

Wrong. The Appellate Division, Third Department has disagreed with the Second Circuit on the constitutionality of New York's persistent felony offenders sentencing statute. In People v. Battease, the Third Department rejected the defendant's contention that his 20-years-to-life sentence was excessive and unconstitutional. The decision in that case can be found here. The Second Circuit, in Besser v. Walsh and other cases, has invalidated heavy sentences imposed under the statute because they were imposed by judges on persistent felony offenders and not by jurors, in violation of the Sixth Amendment. The Second Circuit's decision can be found here. The Third Department held that it was not bound by local federal circuit court rulings.

This raises an interesting issue. Assume that the New York State Court of Appeals hears this case and agrees with the Third Department. All state courts will be bound by this precedent. But then, if the case goes to federal habeas review, the federal courts will be bound by the Second Circuit decision. In questions of constitutional law, the Second Circuit would not be bound by the decision of the New York State Court of Appeals. So the two court systems would seem to be directly competing on this matter, with the federal system winning in the end. So was the Third Department correct in finding that it was not bound by the Second Circuit's interpretation of federal constitutional law?

EFTs. The Second Circuit has held that electronic fund transfers temporarily in the possession of an intermediate bank in New York may not be garnished. The decision in Export-Import Bank of the United States v. Asia Pulp & Paper Co. can be found here.

Costs. The Second Circuit has held that a district court was not restricted in any way from awarding a successful appellant as a cost the expense of obtaining a letter of credit in order to bond an appeal. The mandate of the appellate court does not have to specify what costs may be sought from the district court.

The decision in L-3 Communications Corp. v. OSI Systems, Inc. can be found here.

More certified questions. This time the questions are being certified to the Connecticut Supreme Court. The case, Arrowood Indemnity Co. v. King, involves an insurance company's disclaimer of liability purportedly because the accident at issue did not occur in an "insured location." The questions are:

1. With respect to a claim for negligent entrustment under a liability policy that excludes coverage for "[a]rising out of . . . [t]he entrustment by an insured" "to any person""of a motor vehicle" other than "[a] motorized land conveyance designed for recreational use off public roads, not subject to motor vehicle registration and . . . [o]wned by an insured and on an insured location," is the insured location
(a) the place where the entrustment of the vehicle took place; or
(b) the place where the vehicle is garaged; or
(c) the place where the accident occurred?

2. In the absence of a policy definition of "premises," should a private road located within a residential development owned by insured's homeowners association be considered "premises used . . . in connection with a [residence] premises" under the terms of a homeowner's insurance policy if the portion of the road where the liability arose is not regularly used by the insured, although other portions of the road are so used?

3. Under Connecticut law, where a liability insurance policy requires an insured to give notice of a covered claim "as soon as practical," do social interactions between the insured and the claimant making no reference to an accident claim justify a delay in giving notice of a potential claim to the insured?

The decision in which the Court certified these questions can be found here.

Certified questions. This time the questions are certified to the Vermont Supreme Court. The case, Hunt Construction Group, Inc. v. Brennan Beer Gorman/Architects, P.C., involves a dispute between a general contractor and design professionals. The District Court dismissed the action, holding that the action was barred by the Vermont economic loss doctrine. The question certified by the Second Circuit are:

1. Does the economic loss doctrine bar a contractor from seeking purely economic damages against design professionals who allegedly provided negligent professional services in violation of the designed professionals' contractual obligations with a mutual counterparty?

2. Does the economic loss doctrine apply to claims of negligent misrepresentation?

Federal rate. The Second Circuit has held that the federal rate of post-judgment interest rather than the New York rate should be applied in a diversity case where the contract at issue contains a choice-of-law provision providing that New York law applies. The Court held that the choice-of-law provision was insufficient to establish that the parties intended that the federal rate would not apply. The decision in FCS Advisors, Inc. v. Fair Finance Co. can be found here.

Nomination to the Second Circuit. President Obama has nominated Yale University deputy general counsel Susan Carney to a seat on the Court of Appeals for the Second Circuit.

No appellate jurisdiction. The Second Circuit, in Greenwich Financial Services Distressed Mortgage Fund 3 LLC v. Countrywide Financial Corp., held that the Class Action Fairness Act of 2005 bars appellate review of orders remanding securities class actions to state court.

The Second Circuit's decision can be found here.

Pro se Estate. The Second Circuit has held that the administrator of an estate can represent the estate pro se where the estate has no other beneficiaries (other than the administrator) or creditors. The decision in Guest v. Hansen can be found here.

Late again. In Lora v. O'Heaney, the appellants, two defendants in a prisoner lawsuit had moved for summary judgment on qualified immunity grounds. The District Court denied the motion on January 21, 2009. The appellants moved for reconsideration under Rule 59(e) of the Federal Rules of Civil Procedure. (That motion was not made within the ten days period within which such motions must be made.) The Court denied that motion on July 29, 2009. The appellants filed notices of appeal from both the underlying decision and the decision denying reconsideration on August 27, 2009.

The plaintiff moved to dismiss the appeals. On November 19, 2009, a motions panel of the Second Circuit held that the District Court's orders denying qualified immunity are appealable collateral orders because the defendants had conceded the plaintiff's version of the facts for the purposes of the appeal. The motions panel also stated that only the appeal from the order denying reconsideration was timely.

On full appeal, the Second Circuit noted that an untimely Rule 59(e) motion is treated as a motion for relief from a final judgment, order or proceeding, under Rule 60(b). Such a motion does not toll the time within which an appeal from the underlying order must be taken. An appeal from an order denying Rule 60(b) relief does not bring up the merits of the underlying judgment or order. Such an order is not an appealable collateral order. Accordingly, the Court dismissed the appeal.

The decision in this case can be found here.

Late. Bad news for the defendant in Napoli v. City of Windsor. A motion for summary judgment on qualified immunity was denied on January 12, 2009. On May 14, 2009, an order was issued clarifying the January 12, 2009. On June 9, 2009, the defendant filed a notice of appeal. Too late! Because the May 14, 2009 order did not relate to qualified immunity issue, it did not restart the time to appeal. The Second Circuit dismissed the appeal for lack of appellate jurisdiction.

The decision in the case can be found here.

New nomination. President Obama as nominated Assistant U.S. Attorney Raymond Lohier, Jr. for a seat on the Second Circuit. Mr. Lohier is chief of the Securities and Commodities Fraud Task Force of the U.S. Attorney's Office of the Southern District of New York.

For more information on this nomination, click here.

Certified questions. On an appeal from a preliminary injunction, enjoining the sale of untaxed cigarettes by a American Indian merchant to anyone other than members of the tribe, the Second Circuit certified two questions to the New York State Court of Appeals:

1. Does New York Tax Law 471-e, either by itself or in combination with the provisions of section 471, impose a tax on cigarettes sold on Native American reservations when some or all of these cigarettes may be sold to persons other than members of the reservation's nation or tribe?

2. If the answer to Question 1 is "no," does New York Tax Law 471 alone impose a tax on cigarettes sold on Native American reservations when some or all of those cigarettes may be sold to person other than members of the reservation's nation or tribe?

The decision in City of New York v. Golden Feather Smoke Shop, Inc. can be found here.

New Second Circuit Judge. President Obama has nominated Judge Robert Chatigny for a seat on the Second Circuit. Judge Chatigny currently sits as a district court judge in the District of Connecticut.

More information about the appointment can be found here.

Lynne Stewart. The Second Circuit refused to rehear en banc its decision relating to the sentence of attorney Lynne Stewart. The decision denying rehearing en banc in United States v. Stewart, along with the concurrences (by one by Chief Judge Jacobs and joined by Judges Wesley and Hall and one by Judge Pooler) and dissent (by Judges Cabranes and Raggi) can be found here. Even Judge Cabranes's dissent did not favor en banc review in order to shorten Lynne Stewart's sentence or even to maintain the lenient sentence imposed by the District Court. He felt that certain issues should have been addressed, but were not, by the panel. These issues included the reasonableness of Lynne Stewart's sentence, the "nature" and "seriousness" of Stewart's offense and the purported lack of harm caused by the offense. It is likely that she will be spending a longer period behind bars than was originally thought.

Holocaust insurance claims. The plaintiffs, relatives of victims of the Holocaust, sought to recover insurance proceeds from policies purchased by the victims. The Second Circuit, agreeing with the District Court, held that the state law claims were preempted by the United States foreign policy, which favors the resolution of such claims by the International Commission on Holocaust Era Insurance Claims. The Court's decision was based on the Supreme Court case, American Insurance Association v. Garamendi.

The decision in In re Assicurizioni Generali, S.P.A. can be found here.

Commerce Clause. The District Court, in United States v. Guzman, had held that 42 U.SC. 16913, which provides that a convicted sex offender must register "and keep the registration current, in each jurisdiction where the offender resides, . . is . . . employ[ed], [or] is a student," exceeds congressional power under the Commerce Clause. The Second Circuit disagreed, holding that "[t]o the extent that [section] 16913 regulates solely intrastate activity, its means 'are "reasonably adapted" to teh attainmnet of a legitimate end under the commerce power.'"

The decision can be found here.

Significant romantic relationship. The Second Circuit vacated a condition of supervise release that required the defendant to inform the Probation Department if he entered into a significant romantic relationship and to inform the other party in the relationship of his conviction for possession of child pornography. The Court held that the condition was too vague and not reasonably related to sentencing objectives in that there was nothing in the record suggesting that he had been a threat to a romantic partner. The Court also found that the condition effected an unnecessary deprivation of liberty.

The decision in United States v. Reeves can be found here.

Qualified Immunity. While caseworkers who allegedly wrongfully remove a child from his home are not entitled to absolute immunity for their actions, the Second Circuit has asserted that they are entitled to qualified immunity, and upheld the ruling of a District Court (while disagreeing with it on the absolute immunity issue), dismissing an action for wrongul removal of a child.

The decision in Cornejo v. Bell can be found here.

Electronic Filing Cometh. From the Second Circuit website relating to electronic filing in the Second Circuit can be found here.

Blurring. A coffee company got sued by Starbucks when it marketed a dark roasted blend that it called Charbucks Blend (and later Mr. Charbucks). The District Court dismissed Starbuck's action, holding that there was no dilution of Starbuck's trademark or likelihood of dilution and no likelihood that consumers would confuse the dark roasted blend with Starbucks. The Second Circuit reversed in part, and remanded the case to the District Court for a determination as to whether the use of Charbucks Blend and Mr. Charbucks would dilute Starbuck's trademark by "blurring" or tarnishment.

The decision in Starbucks Corporation v. Wolfe's Bourough Coffee, Inc. can be found here.

Not defamatory. The Second Circuit has held that a news report that a prisoner planned to cooperate with prosecutors was not defematory. Cooperating with law enforcement is not a bad thing.

The deciison in Michtavi v. New York Daily News can be found here.

Lynne Stewart is screwed. Lynne Stewart, attorney for radicals and terrorists (allegedly), is now in deep trouble. The Second Circuit has affirmed her conviction and has even suggested that the District Court may have been too lenient. It probably didn't help that she stated that she could do the two-and-a-half-year sentence "standing on her head." For a smart lawyer, she sure didn't handle herself well post-conviction. In my view, she might have expressed her gratitude to the District Court for its lenient sentence (the prosecution had asked for thirty years) and done in her time. If she had done so, she would have completed her sentence by now and could be working on getting reinstated to the bar. That' s not going to happen now.

The Second Circuit's decision in United States v. Stewart can be found here.

Cautionary Tale. Not from the Second Circuit, but of interest to appellate practitioners is the decision in Espitia v. Fouche. The Wisconsin Court of Appeal sanctioned a litigant for an citation error.

The decision in the case can be found here. The relevant portion of the decision is in paragraph 5.

Aiding and Abetting Alien Torts. The Second Circuit has set a high bar for foreign plaintiffs attempting to use U.S. courts to hold foreign defendants accountable for aiding and abetting human rights violations in foreign lands. Such a defendant may only be found liable if he or she "purposefully" aided and abetted a violation of international law. Knowledge alone is not enough.

The decision in The Presbyterian Church of Sudan v. Talisman Energy, Inc. can be found here.

Global warming. The Second Circuit reinstated lawsuits brought by New York State and others who challenged major utilities on carbon dioxide emissions from coal-burning power plants, holding that there was no need for the District Court to defer to the political branches and refrain from hearing the suit until there is a definitive policy statement on global warming from Congress and the President.

The decision in State of Connecticut v. American Electric Power Co. can be found here.

Superior respondeat (or something). The Second Circuit has held that an employer may be held liable for discrimination by third parties, including independent contractors authorized by the employer to make hiring decisions on its behalf.

The decision in Halpert v. Manhattan Apartments Inc. can be found here.

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.

Caught in the legal recession? Well, I try not to go off topic, but when the ABA asks for help, who am I to withhold it?

The ABA Journal is surveying lawyers about the job market and the current state of the economy. Here is the link: http://www.surveymonkey.com/s.aspx?sm=9Dhw2g7bX_2bxfq4mW8eB1Cg_3d_3d

Survey results will be published in the January ABA Journal. Answers will be kept confidential and used only in combination with all other responses received.

Well you've been informed.

Diversity. The Second Circuit has held that CPLR 901(b), which prohibits a lawsuit seeking a statutory penalty from being brought as a class action, can be applied in a federal court sitting in diversity.

The decision in Shady Grove Orthopedic Associates, P.A. v. Allstate Ins. Co. can be found here.

Swastica tatoos. The Second Circuit held that it was a violation of the Confrontation Clause for a District Court to prevent a minority-group defendant from cross-examining a government witness about his swastica tatoos.

The decision in United States v. Figueroa can be found here.

Purchase Money Obligation. The Second Circuit has asked the New York Court of Appeals to construe the term "purchase money obligation" as it is used in UCC 9-103(a)(2). The Court needs the answer to this certified question so that it can determine what status in bankruptcy should be accorded to the "negative equity" that someone who trades in an old car rolls over into a new car-financing contract.

The decision in In re Faith Ann Peaslee can be found here.

Erasing a Sanction. The Second Circuit has held that parties cannot condition the settlement of an action on the District Court's vacatur of an award of sanctions against a party's attorneys. The decision in ATSI Communications, Inc. v. Shaar Fund, Ltd. can be found here

Executives. In answer to a certified question, the New York State Court of Appeals has held that an executive is an employee under the New York Labor Law, article 5, except where expressly excluded. The Court of Appeals further held that section 193 of the Labor Law did not prevent the parties from entering into a contract where a commission was not "earned" until after certain deductions were made from her percentage of gross billings.

The answers provided by the Court of Appeals worked to the detriment of an executive who, upon leaving her company, sued it for making certain purportedly unlawful dcductions.

The decision in Pachter v. Bernard Hodes Group can be found here.

KPMG Employees Off the Hook. The Second Circuit has upheld the dismissal of the indictments of eleven partners and employees of accounting firm KPMG, LLP because the government had caused KPMG to put conditions on the advancement of legal fees to the defendants. This violated the defendants’ Sixth Amendment right to counsel.

The decision in United States v. Stein can be found here.

Tolling the staute. The Second Circuit held that a application, pursuant to 18 U.S.C. 3292, to suspend the running of a statute of limitations pending a request for foreign evidence must be made before the statute of limitations expires.

The decision in United States v. Kozeny can be found here.

Certified question. In an action brought under the Individuals with Disabilities Education Act, a father brought an action seeking relief on behalf of him and his disabled son. Because he was the non-custodial parent, the distirict court held that he did not have standing to bring the action. The Second Circuit held that standing turned on an unsettled issue of New York state law and certified the question for decision by the New York State Court of Appeals. The certified question is:

Whether, under New York law, the biological and non-custodial parent of a child retains the right to participate in decision pertaining to the education of the child where (1) the custodial parent is granted exclusive custody of the child and (2) the divorce decree and custody order are silent as to the right to control such decisions?

The Second Circuit noted that two departments of the Appellate Division, New York's intermediate appellate court, have held that non-custodial parent does not retain such a right, but it "was reluctant to take that final step [considering the Appellate Division decisions as determinative] in the absence of a Court of Appeals pronouncement because the ruling has broad implications affecting the custodial relationships in New York -- a matter of paramount concern."

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

Absentee Ballot. The Second Circuit reversed the District Court's decision dismissing a complaint claiming that the New York State Board of Elections violated the plaintiffs' Fifth Amendment rights by failing to provide for absentee ballots in elections for polical party county committees, while providing them for all other kinds of elections. The Court remanded the case to the District Court with instructions to enter judment in favor of the plaintiffs.

The decision in Price v. New York State Board of Elections can be found here.

Steinbeck. The Second Circuit has reversed a ruling that awarded John Steinbeck's son and granddaughter publishing rights to 10 of the author's early works, including 'The Grapes of Wrath.

The decision in Penguin Group (USA) Inc. v. Steinbeck can be found here.

DISCLOSURE: My firm represents Nancy Steinbeck in this action, although she was not a party to the appeal.

9/11. The Second Circuit has ruled that Saudi Arabia and four of its princes cannot be held liable in the Sept. 11 attacks. The Court held that the Saudi defendants are protected by sovereign immunity. It also agreed with a lower court that a Saudi banker and a charitable organization cannot be held liable.

The decision in In re Terrorist Attacks of September 11, 2001 can be found here.

Modest success. The Second Circuit has held that the district court was proper in reducing a request for attorneys' fees in a case brought under the Fair Labor Standanrds Act from $340,375 to $49,889 in light of the limited successs acheived by the attorney.

The decision in Barfield v. New York City Health and Hospitals Corp. can be found here.

Another certified question. The Second Circuit has asked the Court of Appeals for its view on another question. The certified question is:

Does New York General Obligations Law 15-301(1) abrogate, in the case of a contract where the second of two irreconcilable provisions requres that any modifications to the agreement be made in writing, the common law rule where two contractual provisions are irreconcilable, the one appearing first in the contract is to be given effect rather than the one appearing subsequent?

The decision in Israel v. Chabra can be found here.

Waiving Doctor-Patient Privilege. The Second Circuit granted a writ of mandamus and reversed an order that required a prisoner's psychiatric records to be disclosed in a case where the prisoner brought a 1983 action alleging that correctional officers used excessive force on him. The prisoner was not seeking damages for mental or unusual emotional injury.

The decision in In re Sims can be found here.

Evidence after summations. The Second Circuit, in United States v. Crawford, held that the district court had abused its discretion in reopening the record after summations to allow the posecution to put in additional evidence.

The decision in this case can be found here.

Cash-based defined benefit plans. The Second Circuits, joining the other circuits that have considered the issue, has held that cash-based defined benefit plans do not inherently result in age-based reduction in the rate of benefit accrual and do not violate ERISA. The Court noted that there had been some confusion among the district courts of the Second Circuit as to law on this issue.

The decision in Hirt v. The Equitable Retirement Plan for Employees, Managers and Agents can be found here.

Attempted Deceit -- Certified Questions. The Second Circuit, in Amalfitano v. Rosenberg has certified the following questions to the New York State Court of Appeals:

Can a successful lawsuit for treble damages brought under N.Y. Judiciary Law 487 be based on an attempted but unsuccessful deceit upon a court by the defendant?

In the course of such a lawsuit, may the costs of defending litigation instituted by a complaint containing a material misrepresentation of fact be treated as the proximate result of the misrepresentation if the court upon which the deceit was attempted at no time acted on the belief that the misrepresentation was true?

The decision can be found here.

Prerequisite. The Second Circuit has held that it is not a prerequisite to liability under the Americans with Disabilities Act to request an accommodation when the employer is aware of its employee's disability or the disability is apparent. The decision in Brady v. Walmart Stores, Inc. can be found here.

Can there by corporate scienter without scienter of a corporate agent? The Second Circuit says yes, at least at the pleading stage. The Court, in Teansters Local 445 Freight Division Pension Fund v. Dynex Capital Inc. found that the requisite strong inference of scienter of the corporate defendant had not been made, and vacated the District Court's order denying the motion to dismiss and remanding the case to the District Court.

The decision in that case can be found here.

We have discretion? Evidently not all district judges are aware that they have discretion to depart from the sentencing guidelines range. Because of this, a crack coclaine defendant will get a chance for a lower sentence. It was unclear whether his judge was one of those clueless judges.

The deciison in United States v. Jones can be found here.

Fraudulent conveyance. The Second Circuit has held that a federal securities receiver may not employ New York Debtor and Creditor Law section 276 to set aside a fraudulent conveyance where he represents only the transferor.

In addition, the Court held that a third party who claims a right to certain property held by the receiver is entitled to a jury trial under the Seventh Amendment.

The decision in Eberhard v. Marcu can be found here.

Recusing for Mukasey. The Justice Department does not have to recuse itself from representing the Untied States in an appeal from former-District Judge Michael Mukasey. The Court noted that if Mukasey is not participating in the appeal that is sufficient.

The decision in United States v. Hasarafally can be found here.

Those creative lawyers!

Chutzpah. In United States v. Habbas, we have two gentlemen who conspire to frame a man for a crime that could put him behind bars for life. They were caught and entered into plea agreements. One of these "gentlemen" argued that the government had breached the plea agreement by arguimg for a higher sentence than the non-binding estimate it made in the plea agreement. The agreement specifically stated that it was non-binding and stated that the government might seek a higher sentence (which it did). The Second Circuit affirmed the sentence, noting, among other things. that the defendant had suffered no prejudice from the dovernment's action, stating that "[t]he [district] court understandably found that the heinous cynicism and cruelty of defendant's crime called for a sentence of nothing less than eight years, whihc was far in excess of the range resulting from the four-level addition." The Court would have done what it did regardless of the government's position. The crime was seen as so despicable that it warranted the severe sentence.

The decision in this case can be found here.

Student's First Amendment rights. The Second Circuit upheld a denial of an injunction to void the election of a Seniro Class Secretary and ordering the school to have a new election in which the plaintiff's daughter would be allowed to participate. The daughter had been disqualifed from the election because she posted a vulfar and misleading message about the supposed cancellation of an upcoming school event on an independently-operated, publicly accessible blog. The District Court held that the plaintiff was unlikely to prevail on the merits. The Second Circuit affirmed, stating that the student's blog post created a foreseeable risk of substantial disruption at the the school. The Court held that the, under the circumstances of the case, warratned the disciplinary action imposed and the fact that the student's statement on the blog did not take place on school grounds was irrelevant because the statement was likely to create a disruption. All this about a school concert.

Much ado about nothing.

The decision in Doninger v. Niehoff can be found here.

Civil First. The Second Circuit has held that a tax evader is not entitled to argue his tax position in a civil proceeding before being prosecuted for tax evasion. Not really a shocking holding. Many white collar crimes have a civil claim that can also be brought by the government. To allow a defendant an opportunity to try his or her case civilly first would allow the defendant to get to see the government's evidence and witnesses while the stakes are lower.

The decision in United States v. Ellett can be found here.

Remand. The Second Circuit has held that it has the authority to remand an issue of nationality to the Board of Immigration Appeals if the issue had been presented but not decided by the Board. The Government had taken the position that 8 U.S.C. 1252(b)(5), which provides that the Court of Appeals is to decide issues relating to nationality without saying anything about remand, precludes the Court from sending a nationality case back to the BIA. The Court disagreed.

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

Solicitor General. Paul Clement has resigned as Solicitor General of the United States. It is likely that principal deputy Solicitor General Gregory Garre will close out the Bush administration as acting Solicitor General.

No Jurisdiction. The Second Circuit, based on its prior precedent, found that it did not have jurisdiction to review a claim that an immigration judge erred in its application of law in determining whether an alien's removal would result in "exceptional and extremely unusual hardship." The Court stated that it agreed with the petitioner's legal position, but lacked jurisdction under its prior precedents.

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

Payment. A lawyer failed to take the required actions to proceed with an appeal from a decision of the Board of Immigration Appeals because his client had not paid the agreed upon fee. When the fee was paid, a year after the appeal had been dismissed, the attorney sought to reinstate the appeal and recall the mandate.

Judge Newman, while appalled that an attorney would think that he had no ethical obligation to proceed with an appeal after accepting some money and entering into a retainer agreement, granted the motion, stating that "it seems unfair to penalize the client because of his lawyer's conduct." A copy of the file was transmitted to the Grievance Committee of the Circuit for such action as it sees appropriate.

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

Right of Action. Under the Vienna Convention on Consular Relations, an alien is entitled to be informed of his right to contact his consulate in the event of arrest. The plaintiff in Mora v. People of New York was not so informed and sued under the Alien Tort Statute. The case was dismissed because the court believed that the Convention did not convey an individual right that could be enforced in domestic courts. On appeal, the plaintiff asserted that the right could be enforced not only under the Alien Tort Act, but also under section 1983 and through an implied right of action arising from the Convention itself.

The Second Circuit held that no such right of action existed. The decision can be found here.

Kelo redux. In an attempt to stop proposed development of downtown Brooklyn through, in part, the use of eminent domain, the plaintiffs in Goldstein v Pataki claimed that the use of that power, which they claimed, was not for a public purpose and hence violated the Public Use clause of the Fifth Amendment.

The District Court dismissed the action, and the Second Circuit, based on the Supreme Court's decision in Kelo v. City of New London, affirmed.

The decision can be found here.

Light cigarettes. The Second Circuit has reversed an order granting certification of a class consisting of individuals who were deceived into believing that "light" cigarettes were healthier than ordinary cigarettes. The Court found that individual issues outweighed issues susceptible to common proof.

The decision in McLaughlin v. American Tobacco Co. can be found here.

Inter-racial marriage. The Second Circuit has held that a white person married to a black person may sue under Title VII if his employer takes action against him because of his inter-racial marriage. The decision in Holcomb v. Iona College can be found here.

Congratulations. As regular readers of this blog (if there is such a thing) know, I have the practice of "adopting" a law school blogger. My current adoptee is "Butterflyfish," who blogs on life and law school. She has just been made an editor on the law review of her unnamed law school. Because she wants to be anonymous, I am not at liberty to even reveal the precise position, but, suffice it to say, it is a responsible one. Congratulations.