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 as possible during the COVID-19 pandemic. Under the centralized calendaring system currently in place, the Clerk’s Office schedules up to three jury trials to begin on each day of jury selection: a primary case and up to two back-up cases that may proceed in its place if the primary case does not go forward.

Other examples of similar orders are here and here.

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:

Finally, below are links to a sampling of the more notable (or amusing) news items covered by the Blog:

  • Judge Jones concluding that the Defense of Marriage Act was unconstitutional, a ruling later upheld by the Supreme Court.
  • Judge Scheindlin striking down New York City’s “stop-and-frisk” practices as unconstitutional.
  • Judge Pauley bemoaning overly long pleadings.
  • Judge Berman politely declining to autograph a Sports Illustrated magazine about the New England Patriots’ “Deflategate” controversy, which was the subject of litigation before him.
  • Judge Furman striking a citizenship question from the census, a ruling later upheld by the Supreme Court.
  • Judge Marrero upholding a subpoena from the Manhattan DA’s Office for tax records from former President Trump.
  • Judge McMahon issuing pithy letter endorsements.

We look forward to the next 1,000 posts!

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

Earlier today, the Attorney General of the State of New York brought an action to “end the pervasive use of excessive force and false arrests” by the NYPD in “suppressing overwhelmingly peaceful protests” following the police killings of George Floyd and Breonna Taylor. According to the complaint:

From May 28, 2020 to December 11, 2020, NYPD Officers of various ranks (“NYPD Officers”) repeatedly and without justification used batons, fist strikes, pepper spray, and other physical force against New York Residents at the Protests. Protesters—many of whom were never charged with any crime and were merely exercising their First Amendment rights—suffered concussions, broken bones, cuts, bruises, and other physical injuries.

Continue Reading New York State Sues New York City Over NYPD Response to Police Brutality Protests

In an opinion today in the long-running defamation case brought by Sarah Palin against the New York Times (see our coverage here), Judge Rakoff ruled that an expansion of New York’s anti-SLAPP law last month was retroactive, and hence was governing in the case.

Sate anti-SLAPP laws generally give special protections to defendants sued for exercising free speech rights, often by allowing for early dispositive motions, fee-shifting, and heightened standards of proof. New York’s anti-SLAPP law until recently applied only to cases involving public applications or permits, but a statute passed in November expanded the law – including the requirement of proving actual malice by clear and convincing evidence – to reach any claim arising from speech on matters of public interest.

Judge Rakoff concluded that the new law applied to case at hand because, under New York law, “remedial” legislation is given retroactive effect: Continue Reading Judge Rakoff: New York’s Expanded “anti-SLAPP” Law Is Retroactive

In a decision last week, Judge Cote ruled that the COVID-19 pandemic qualified as a “natural disaster” that fell within the scope of a contractual force majeure clause. The defendant auction house had agreed to auction a painting owned by the plaintiff and pay it a guaranteed minimum price, but invoked its right to terminate the agreement after the auction was postponed by the COVID-19 pandemic and related government restrictions.

The force majeure clause applied in the event of “circumstances beyond our or your reasonable control, including, without limitation, as a result of natural disaster, fire, flood, general strike, war, armed conflict, terrorist attack or nuclear or chemical contamination.” Judge Cote held that the pandemic was “a circumstance beyond the parties’ reasonable control” and a “natural disaster”:

Continue Reading Judge Cote: COVID-19 Pandemic is a “Natural Disaster” for Purposes of Contractual Force Majeure Clause