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.

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

Vaccination

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.