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Judge Gardephe last week ruled that the non-disclosure and non-disparagement clauses found in the employment agreements for Donald Trump’s 2020 presidential campaign were void and unenforceable.  The action originally arose when the Trump campaign commenced an arbitration proceeding against a former staffer, claiming that she had breached the non-disclosure and non-disparagement clauses by filing a complaint alleging sex discrimination claims in New York state court.  The present complaint was brought as a putative class action by former employees of the campaign, who sought a declaration that these provisions of the employment agreement were unenforceable.

Judge Gardephe granted the plaintiffs’ motion for summary judgment, and focused on the breadth of the non-disclosure provision as a basis for finding it unenforceable:…
Continue Reading Judge Gardephe: Trump Campaign NDAs Are Unenforceable

Last week, Judge Daniels dismissed a putative class action against NYU over its decision to conduct classes remotely during the COVID-19 pandemic.  He concluded the plaintiff could not identify any actual promise or agreement by which NYU stated its classes would be held in person:…
Continue Reading Judge Daniels: NYU’s Remote Learning During the Pandemic Is Not a Contract Breach Because NYU Never Clearly Promised In-Person Classes

In an opinion yesterday, Judge Cronan refused to dismiss a case under New York’s consumer fraud statute alleging that the “Smokehouse” almonds (depicted below) were marketed in a misleading fashion because allegedly they are not actually prepared via smoking.

The defendant argued that “Smokehouse” refers to the flavoring only, but Judge Cronan concluded that, while a “close call,” the allegations were enough to survive the motion:…
Continue Reading In “Close Call,” Judge Cronan Allows Consumer Fraud Claims to Proceed Over “Smokehouse” Branded Almonds that Are Not Actually Smoked

Based on various orders recently appearing on the dockets, it appears that in-person civil jury trials will begin in May, under a centralized calendaring system. One typical order explains as follows:

The Southern District of New York has reconfigured courtrooms and other spaces in its courthouses to allow civil jury trials to proceed as safely

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We interrupt our regularly scheduled posting to note that this is SDNY Blog post number 1,001.  Thanks to co-bloggers Michael Keough and Jason Meade for their contributions, and the wonderful team at Steptoe for supporting our blog.

A few additional statistics:

  • The blog was started in April 2012.
  • The most frequently-tagged judge has been Judge

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Last week, Judge Furman ruled, following a bench trial, that some of the recipients of accidental wire payments of almost $900 million were entitled to keep the proceeds. Citibank, acting as the administrative agent for the loans, had intended to wire $7.8 million in interest payments to a series of lenders, but through an error had also sent an additional wire of almost $900 million – representing the entire principal amount of the underlying loan.

Judge Furman concluded that the lenders could keep the funds under New York’s “discharge-for-value” defense:…
Continue Reading Judge Furman: Lenders Can Keep Accidental Loan Repayment Arising from Bank Error of “Perhaps Unprecedented Nature and Magnitude”

A class action complaint filed last week against online brokerage firm Robinhood accuses the company of manipulating the open market after it removed GameStop’s stock from its trading platform in the midst of volatile trading last month.  GameStop (ticker symbol GME), a struggling retailer of video games and accessories, saw its stock rise almost 1,700% in one day as small investors drove up the price of the stock as part of an effort encouraged by the Reddit page Wall Street Bets (see full NYT coverage here).  The Southern District complaint is one of 30 cases across the country, reports Law360.

According to the complaint:…
Continue Reading Class Action Seeks Damages Over Robinhood’s Removal of GameStop Stock from Trading Platform After Meteoric Rise

In an opinion yesterday, Judge Wood dismissed a securities fraud case against Papa John’s that arose from two articles in Forbes in 2018 (see here and here), describing (among other things) an allegedly “toxic” culture of workplace sexual harassment.  The stock price dropped after the articles were published, and the theory of the complaint was that investors had been deceived by various public statements portraying a different culture—such as the company Code of Ethics stating that Papa John’s was governed by “principles of honesty, fairness, mutual respect, trustworthiness, courage and personal and professional commitment.”

Judge Wood had dismissed an earlier version of the complaint, and in yesterday’s opinion, concluded that the amended version still failed to state a claim because the statements at issue were “vague, broad, and merely aspirational.” The amended complaint emphasized for the first time that the Code promised that employees who violated its terms would be subject to “corrective action,” but Judge Wood concluded that this statement was still not specific enough:…
Continue Reading Judge Wood: “Puffery” in Papa John’s Code of Ethics Cannot Support Securities Fraud Claims

In an opinion Friday, Judge Stanton dismissed, on jurisdictional grounds, a case accusing the promoters of an initial coin offering of fraud, because the plaintiffs’ transactions did not occur domestically, as required by Morrison v. National Australia Bank, Ltd., 561 U.S. 247 (2010).

The plaintiffs offered declarations from two putative class members who did not live in the U.S. One was from from the United Arab Emirates and the other from the United Kingdom. According to the plaintiffs, there was nonetheless a basis for personal jurisdiction because the servers that hosted the website through which the coin sales were made were physically located in Kansas, and because, in all likelihood, the relevant blockchain “nodes” that would record the transactions publicly were likely located in the United States, as well.

Judge Stanton rejected this reasoning, and found the relevant question to be where the “change in the legal relationship” between the parties occurred:…
Continue Reading Judge Stanton: Offering Virtual Currencies Via a Website Hosted on U.S. Servers Is Not Enough for Jurisdiction