Tuesday, December 08, 2015

Plausible Malice 

The Court, in Biro v. Conde Nast held that a defamation claim made by a limited purpose public figure, the plaintiff must plead sufficient facts to demonstrate that the required allegation of actual malice is plausible.  In this case, the Second Circuit, in affirming the decision of the District Court, held that the plaintiff had not made any adequate showing of plausibility with respect to actual malice.

The decision in this case can be found here.

Tuesday, October 20, 2015

Judge Cardamone dies 

Former Judge Richard J. Cardamone died at age 90 on October 16, 2015.

Monday, October 19, 2015

Post-garnishment residual wages -- Certified to Connecticut Supreme Court 

The Second Circuit has certified the following question to the Connecticut Supreme Court:

Do Conn. Gen. Stat. sections 52-361a and 52-367b, read together, exempt post-garnishment residual wages held in a third-party's bank account from further execution, so that the become freely transferable under the Connecticut Uniform Fraudulent Transfer Act, Conn. Gen. Stat. section 52-552a et seq.?

This question arose under the following facts:

The Appellants owes more than $3,000,000 to the Appellee with respect to two state court judgments.  The Appellant transferred to his wife (also an appellant) more than $300,000 by depositing his wages into her bank account.  During part of this period, the appellee and another judgment creditor garnished appellee's wages.

The Appellee sued the Appellants to recover those transfers.  Both parties moved for summary judgment and the District Court ruled in favor of the Appellee, answering the above-cited question in the negative..  The Appellants appealed.

The Second Circuit stated: "Although [the District Court's" well-reasoned opinion accords with an earlier District of Connecticut decision and one Superior Court opinion, the weight of state authority -- including two Superior Court cases, an opinion of the state Attorney General, and a Judicial Branch form -- has adopted the contrary view."

Because the uncertainty of the state law, the Second Circuit certified the question to the Connecicut Supreme Court.

The decision in The Cadle Co. v. Fletcher can be found here.

Wednesday, January 21, 2015


The Second Circuit has held that it is within the State's police power to require children to be vaccinated in order to attend public school and that such a requirement does not violate the First Amendment or other constitutional rights.

Citing Supreme Court precedent, the Second Circuit held that the right to practice religion freely does not include liberty to expose the community or the child to communicable disease or the latter to ill
health or death.

The Second Circuit further held that the Supreme Court had held in 1905 that a compulsory vaccination law was not a violation of substantive due process.

The Court also held that the plaintiffs had not made a showing of any violation of the Equal Protection clause of the Constitution.

Finally, the Court held that the Ninth Amendment was not a source of individual rights, and, accordingly, the plaintiffs claim under that amendment could not stand.

The decision is Phillips v. City of New York can be found here.

Tuesday, January 20, 2015

Repudiating arbitration agreements 

The Second Circuit has held that, pursuant to 13 U.S.C. 1787(c), the Nation Credit Union Administrative Board ("NCUA") may repudiate the contract of a credit union that it is liquidating, including any arbitration clauise.

In National Credit Union Administration Board v. Goldman, Sachs & Co., NCUA brought a lawsuit against Goldman, Sachs on behalf of a credit unit that it was liquidating.  Goldman Sachs sought to arbitrate the claims, pursuant to a Cash Account Agreement that contained an arbitration clause.  The NCUA repudiated the agreement and claimed that it was not obligated to arbitrate.

Goldman Sachs claimed that the NCUA's repudiation of a contract is equivalent to that of a trustee in bankruptcy, and that, pursuant to Second Circuit precedent, a trustee in bankruptcy cannot repudiate an arbitration clause.  The Second Circuit, however, held that its prior precedent does not hold that a bankruptcy trustee may not reject an arbitration agreement or clause.

Goldman Sachs further argued that, under common law, a repudiation of an agreement constitutes a breach, and a breaching party is still bound by the contract.  The Second Circuit held that the common law was inapplicable because the statute gave the NCUA the right to repudiate.

Finally, Goldman, Sachs argued that repudiation does not apply to purely procedural provisions of the contract, and, accordingly, the arbitration clause was not enforceable.  The Second Circuit, while not acknowledging that arbitration agreement are "purely procedural," held that Goldman, Sachs had shown neither reason nor authority supporting the proposition that arbitration agreements should be excluded from the NCUA's repudiation power.

The decision can be found here.

Tuesday, May 06, 2014

Foreign Securities 

The Second Circuit as  a matter  of first impression, considered whether the bar on extraterritorial application of the United States securities laws, as set forth in Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010), precludes claims arising out of foreign‐issued securities  purchased  on  foreign  exchanges,  but  cross‐listed  on  a domestic exchange.  It concluded that federal courts had no jurisdiction to consider such claims under the Securities and Exchange Act of 1934.

The decision in City of Pontiac Policeman's and Fireman's Retirement System v. UBS AG can be found here.

Monday, March 24, 2014

Penal Law Rule 

In an interpleader action brought by the United States, the District Court granted summary judgment to Brazil, one of the parties who claimed entitlement to certain funds, holding that Brazil was entitled to the funds under a Brazilian forfeiture law, which was grounded in Brazil criminal law.  The other parties seeking the money claimed that summary judgment was not appropriate in that enforcement of the forfeiture law violated the common law penal law rule under which a country will not enforce the penal laws of another country.  On appeal, the Second Circuit held that summary judgment had been improperly granted based on the penal law rule, however, it also held that because Brazil was seeking assistance from the United States Attorney General in enforcing its forfeiture judgment, pursuant to 28 U.S.C. 2467, the District Court should allow Brazil and the Attorney General time to complete this process before taking further action in the case.

The decision in United States v. The Federative Republic of Brazil can be found here.

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