Second Circuit

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In an opinion last week, the Second Circuit, reversing a decision by Judge Furman (covered here), held that Citibank could sue to recoup almost $500 million that it had sent, in error, to certain lenders of a struggling borrower, Revlon.

Citibank was the administrative agent for the loans, and, based on a technical error, wired the full principal balance (nearly $900 million) before the maturity date. Judge Furman applied the “discharge for value” defense to conclude that even a mistaken payment need not be returned where it pertains to a valid debt.

The Second Circuit concluded, however, that the defense is inapplicable so long as the recipient is on “inquiry notice” of the mistake. Inquiry notice was shown by the fact that there was no prior notice of any loan repayment, as the transaction documents required, and by the fact that Revlon was not expected to have the funds to repay: …
Continue Reading Second Circuit: Citibank Can Recoup $500 Million Accidental Debt Repayment

In an opinion last week, the Second Circuit affirmed Judge Cote’s decision (covered here) finding that the force majeure clause in a contract relating to an art auction was triggered by the COVID-19 pandemic.

Judge Cote had found that COVID-19 qualifies as a “natural disaster” within the clause, and the appellant argued that there was at least fact question as to whether the pandemic was truly a natural disaster, insofar as it may have been the result of a leak from a Chinese lab of man-made, genetically engineered viral material. The Second Circuit decided it need not resolve that issue, and seized on different language in the same clause about circumstances beyond the parties’ “reasonable control”:…
Continue Reading Second Circuit: COVID-19 Pandemic Triggers Contractual Force Majeure Clause for Circumstances Beyond the Parties’ “Reasonable Control”

Last week, the Second Circuit affirmed Judge Schofield’s decision last year to to deny the motion by Donald Trump, the Trump Corporation, and other Trump family members to compel arbitration of claims related to the multi-level marketing scheme ACN (see our previous coverage here).  Defendants argued that, because the plaintiffs had agreed to arbitrate any claims they might have against ACN, the same arbitration clause should force arbitration of any claims against the Trump defendants related to their endorsement of ACN.

The Second Circuit agreed that equitable estoppel did not apply:…
Continue Reading Second Circuit Affirms Judge Schofield’s Denial of Motion to Compel Arbitration for Trump-Related Multi-Level Marketing Scheme Claims

This week, the Second Circuit issued two orders reversing in part the district court’s decision dismissing claims brought by former Knicks player Charles Oakley, all stemming from a 2017 incident at Madison Square Garden where Oakley was forcibly removed from the stands during a Knicks game by the arena’s security (see our previous coverage here).

The Second Circuit concluded that the allegations of excessive force were best left for a jury to decide:…
Continue Reading Second Circuit Allows Charles Oakley’s Assault and Battery Claims to Proceed, But Agrees Defamation Claims Should Be Dismissed

In an opinion yesterday, the Second Circuit affirmed Judge Torres’s decision (covered here), to reinstate the Democratic Primary on June 23.

The Board of Elections argued that the cancellation was necessary to limit the spread of COVID-19, but the Second Circuit concluded that this “justification is overstated for at least two reasons”:…
Continue Reading Second Circuit Upholds Reinstatement of Democratic Primary

Earlier today, the Second Circuit reversed a decision by Judge Ramos that had invalidated an executive order targeting “sanctuary cities” that did not cooperate with federal law enforcement on immigration issues (see our previous coverage here).

Judge Ramos had held that the order was arbitrary and capricious under the Administrative Procedures Act, and impinged on the powers of state and local governments.  The Second Circuit disagreed, noting that the federal government has broad power to enforce immigration policy:…
Continue Reading Second Circuit Reverses Judge Ramos on “Sanctuary Cities,” Allows Executive Order Cutting Funding

In a opinion today, the Second Circuit held that two financial institutions must comply with recent subpoenas issued by the House Permanent Select Committee on Intelligence and the House Financial Services Committee seeking information related to the Trump Organization and Trump family businesses.  President Trump and others had filed a suit to prevent the banks from complying with the subpoenas (see our previous coverage here).

The Second Circuit affirmed in part Judge Ramos’ earlier denial of President Trump’s request for an injunction.  In part, the Second Circuit found that the public interest outweighed individual privacy concerns because the lead plaintiff was the President of the United States:…
Continue Reading Second Circuit: Banks Must Comply with House Subpoena for Trump Financial Records

In an opinion this morning, the Second Circuit largely affirmed the decision by Judge Marrero (covered here) to allow the Manhattan DA to enforce a grand jury subpoena to President Trump’s accountants seeking (among other things) President Trump’s tax returns.

The Second Circuit acknowledged that the President, occupying “a unique position in the constitutional scheme,” could be shielded from certain types of judicial process, but concluded that a subpoena to his accountants did not merit that protection:…
Continue Reading Second Circuit Refuses to Block Manhattan DA Subpoena to Trump for Tax Returns