Gerard E. Lynch

This case concerns a constitutional challenge by Amnesty International USA and other advocacy groups, attorneys, and journalists to the FISA Amendments Act (FAA), which expanded government authority to conduct surveillance of overseas communications without individualized warrants. A Second Circuit panel held that the plaintiffs had Article III standing, based on evidence that they had incurred costs to protect the confidentiality of their communications with foreign contacts who might be targeted. After the defendants sought rehearing en banc, the active members of the court conducted a poll and, finding no majority in favor, denied the petition, leaving the panel decision intact. Concurring and dissenting opinions debated whether the panel’s standing analysis was fact-specific and consistent with precedent or instead represented an unwarranted expansion of standing doctrine in a matter of exceptional importance.

civil rightsfederal powerprocedure

The case involves David Krasner suing his former employer HSH Nordbank AG and supervisor Roland Kiser for sexual discrimination and retaliation under Title VII and related state and city human rights laws, as well as state claims for breach of implied employment contract and withholding of a bonus. The court granted the defendants' motion to dismiss all claims for failure to state a claim. The core reasoning was that the alleged favoritism toward a paramour reflected consensual relationships similar to nepotism rather than discrimination on the basis of gender, the single strip club incident was not severe or pervasive enough to create a hostile work environment, the plaintiff's internal complaints did not constitute protected activity under Title VII, and the contract and related claims were insufficiently supported.

civil rightslabor & employment

In Shah v. Kuwait Airways Corp., a pro se plaintiff sued the airline for theft of valuables from her luggage during an international flight from India to New York via Kuwait, claiming $25,000 in damages after her carry-on bag was checked against her wishes. The airline moved for partial summary judgment to cap liability at $460 under the Warsaw Convention's limits for checked baggage on international routes. The court granted the motion, holding that the Convention's liability caps applied to the checked bag despite the plaintiff's intent to carry it on and her allegations of a broader airline practice of theft, as the treaty governs such claims without exception for those circumstances. However, the court noted unresolved factual questions about whether the Warsaw or Montreal Convention's limits controlled and denied full summary judgment on that point.

business & regulatorytorts & liabilityprocedure

The case concerns claims brought by the trustee of a Refco-related trust on behalf of foreign-exchange customers who allegedly lost over $500 million when Refco insiders misappropriated customer assets at Refco Capital Markets to support a broader fraud involving concealed debt and round-trip loans. The trustee asserted New York state-law claims including breach of fiduciary duty, fraud, conversion, and aiding and abetting against accounting firms and law firms that advised Refco. The court granted the professional defendants' motions to dismiss under Rules 12(b)(1) and 12(b)(6), finding that the aiding-and-abetting claims failed to plead actual knowledge or substantial assistance with particularity, that no fiduciary duty ran from the professionals to the customers, and that the conversion claim did not meet the elements of wrongful taking under New York law.

business & regulatorytorts & liabilityprocedure

This SEC enforcement action alleged that Universal Express, its officers, and associated resellers disseminated false information to investors to facilitate the illegal unregistered distribution of hundreds of millions of shares of company stock in violation of federal securities registration and antifraud provisions. After the court granted summary judgment against some defendants and Neuhaus and Sandhu entered bifurcated consent agreements acknowledging liability without admitting or denying the allegations, the SEC moved for disgorgement, prejudgment interest, and civil penalties against the two resellers. The court ordered Neuhaus to pay $14,221,508 (comprising $9,786,589 disgorgement, $3,434,919 interest, and $1,000,000 penalty) and Sandhu to pay $6,036,117 (comprising $4,064,058 disgorgement, $1,472,059 interest, and $500,000 penalty), calculating the amounts based on the complaint allegations deemed true under the consent agreements, evidence of ill-gotten gains from stock sales, and statutory factors for penalties.

business & regulatory

This case centers on SimplexGrinnell LP's claims that Integrated Systems & Power, Inc. infringed its copyrights in fire alarm system panel programming software by using the programs without authorization beyond a limited license from a bankruptcy stipulation. After a bench trial, the court granted a partial permanent injunction against infringement but restricted it to the four registered versions of the software, citing lack of jurisdiction over unregistered derivative works under the Copyright Act. On SimplexGrinnell's motion for reconsideration, which argued that version registrations covered entire revisions or that shared code made unregistered versions actionable, the court denied the request in substantial part due to insufficient factual evidence while amending its prior conclusion to state that each version may constitute a separate derivative work.

business & regulatoryprocedure

In Polestar Maritime Ltd. v. Nanjing Ocean Shipping Co., the plaintiff sued the defendants for breaching a contract to purchase a vessel, seeking an ex parte maritime attachment under Rule B of the Supplemental Rules for Admiralty and Maritime Claims. The court denied the request and dismissed the complaint, holding that it lacked subject matter jurisdiction because a simple breach of a contract for the sale of a vessel does not fall within federal admiralty jurisdiction. The decision relied on longstanding Second Circuit precedent establishing that contracts to purchase vessels are outside admiralty jurisdiction, and determined that recent Supreme Court and Second Circuit cases on maritime contracts did not alter this rule.

procedurefederal power

The case involved a dispute between SimplexGrinnell, a manufacturer of fire safety systems, and ISPI, a competing service provider, arising from a 2004 bankruptcy settlement that ended their prior business relationship and granted ISPI limited rights to purchase parts and receive technical support for its existing customers. SimplexGrinnell asserted claims for copyright infringement, trade secret misappropriation, false advertising under the Lanham Act, and breach of contract, while ISPI counterclaimed for breach of contract, based on allegations that ISPI had used SimplexGrinnell's proprietary software without authorization and made misleading statements to customers. After a bench trial, the court found that ISPI had infringed copyrights by using unauthorized versions of the software, misappropriated trade secrets, and engaged in false advertising regarding its access to parts and technician certifications. The court granted a limited injunction to prevent further infringement, misappropriation, and false advertising but denied broader relief and rejected the contract claims on both sides due to insufficient evidence of breach or damages. The decision rested on findings of fact regarding the parties' conduct post-settlement and conclusions that the unauthorized uses and misrepresentations warranted injunctive relief under federal and state law.

business & regulatoryprocedure

The case involves third-party claims by Higher Ground against ProLink for breach of warranty, indemnification, and contribution arising from a dispute over leased GPS golf course systems, where National City had sued Higher Ground for lease payments after ProLink installed older equipment than allegedly promised. ProLink moved to dismiss the third-party complaint or compel arbitration under a clause in the Service Agreement that required binding arbitration in Maricopa County, Arizona, and to stay proceedings. The court granted the motion to compel arbitration and stayed the case pending arbitration. It reasoned that the Federal Arbitration Act requires enforcement of the arbitration provision as a severable agreement, that disputes over whether the Service Agreement was signed go to the arbitrator, and that the claims fall within the clause's broad scope covering disputes arising out of or relating to the agreement.

business & regulatoryprocedure

This case involves investment funds associated with Thomas H. Lee Partners that lost over $245 million after investing in Refco through a 2004 leveraged buyout; the funds sued Refco's outside counsel, Mayer Brown, alleging that the law firm made direct misrepresentations and concealed related-party transactions during due diligence. Following the Supreme Court's Stoneridge decision, the plaintiffs amended their complaint to assert claims under Section 10(b) of the Securities Exchange Act, RICO, and New York state law for fraud and negligent misrepresentation. The court granted Mayer Brown's motion to dismiss in part and denied it in part, finding that some federal claims were barred by precedent limiting aiding-and-abetting liability while certain state-law claims based on direct statements could proceed, subject to Martin Act preemption rules and pleading requirements for fraud. The decision turned on distinctions between direct misrepresentations to the plaintiffs and participation in a broader scheme, as well as the elements of scienter, reliance, and substantial assistance.

business & regulatoryproceduretorts & liability

This case is a putative class action securities fraud lawsuit arising from the collapse of Refco Inc., in which plaintiff investors sought to hold Refco's outside law firm Mayer Brown LLP and its partner Joseph Collins liable under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for their alleged role in structuring fraudulent round-trip loan transactions that concealed uncollectible receivables from investors. The court granted the Mayer Brown defendants' motion to dismiss the claims against them. The core reasoning is that Supreme Court precedent, including Central Bank and Stoneridge, establishes no private right of action for aiding and abetting securities fraud, and the allegations show only secondary participation rather than primary deceptive conduct by the lawyers on which investors could have relied.

business & regulatoryprocedure

In Kwon v. Yun, plaintiff Byong Kwon sued Daniel Yun and affiliated investment entities, alleging they fraudulently induced him to leave secure employment at New Valley Corporation for roles with hedge funds and related companies that he claims engaged in illegal activities, and that he was led to take out an unpaid $390,000 loan from one defendant. The Yun defendants and Emergent moved for summary judgment on Kwon's affirmative claims, while Kwon cross-moved for summary judgment on a counterclaim regarding the loan. The court granted the defendants' motions in part and denied them in part, while denying Kwon's motion in full. The decision turned on analysis of fraud elements including causation and foreseeability, the scope of employment for agency liability, and whether certain claims could proceed to trial based on disputed facts about representations and reliance.

business & regulatorytorts & liabilitylabor & employment

This case involves French fashion companies seeking to enforce a default judgment from a French court against a New York-based internet fashion magazine for posting unauthorized photographs of the plaintiffs' clothing designs from runway shows. The U.S. district court initially dismissed the enforcement action on public policy grounds due to First Amendment concerns but was reversed and remanded by the Second Circuit to first assess whether the defendant's actions would qualify as fair use under U.S. copyright law and whether French law offers comparable protections. On remand, after additional discovery, the plaintiffs moved for summary judgment arguing that fair use could be rejected as a matter of law, but the court denied the motion. The core reasoning is that resolving fair use requires detailed factual findings on matters such as the nature of the works, the amount used, and market effects, and genuine disputes of material fact remain that preclude summary judgment.

free speechbusiness & regulatoryproperty

Telenor Mobile Communications AS and Storm LLC jointly owned Kyivstar, a Ukrainian telecommunications company, and had a dispute over a 2004 shareholders' agreement governing its management that was resolved by a 2007 arbitration award in Telenor's favor. The court previously confirmed the award in a November 2, 2007 order, and Telenor then moved to hold Storm and its corporate parents (the Altimo Entities) in civil contempt for failing to comply with that order. The court granted the motion, finding that Storm and its affiliates had engaged in collusive and vexatious litigation to undermine the arbitration and award, that the parents dominated Storm such that the corporate veil could be pierced under New York law, and that the parents were responsible for the noncompliance. The decision rested on detailed factual findings about the parties' conduct, the invalidation of the agreement in Ukrainian proceedings, and the failure to implement the award despite formal directions to comply.

business & regulatoryprocedure

This case involved consolidated securities fraud actions brought by former customers of Refco Capital Markets, Ltd., a brokerage subsidiary, against Refco officers, its auditor Grant Thornton, and investors affiliated with Thomas H. Lee Partners. The plaintiffs alleged that defendants made misrepresentations or omissions regarding RCM's compliance with SEC net capital and segregation rules and its fiduciary duties to customers. The court granted the defendants' motions to dismiss in full, holding that the plaintiffs lacked standing to bring securities fraud claims and failed to allege any deceptive conduct. The opinion rejected arguments that boilerplate contract language or audit opinions created actionable misrepresentations, and it denied leave to replead with prejudice.

business & regulatory

This case involves investment funds affiliated with Thomas H. Lee Partners that lost over $245 million after investing in Refco through a 2004 leveraged buyout; the funds sued Refco's outside auditor Grant Thornton for state-law claims including aiding and abetting fraud, negligent and intentional misrepresentation, and professional malpractice, alleging the auditor made misrepresentations tied to the LBO and failed to detect or disclose Refco's fraudulent round-trip loan transactions used to conceal losses. Defendant Grant Thornton removed the case to federal court and moved to dismiss under Rule 12(b)(6). The court granted the motion in part and denied it in part, finding that plaintiffs adequately alleged facts supporting an inference of the auditor's actual knowledge of the fraud for certain claims while dismissing others that failed to meet pleading standards for scienter or reliance.

business & regulatoryprocedure

The case involves VDP Patent, LLC suing Welch Allyn Holdings, Inc. and a distributor for allegedly infringing its patent on a method of removing earwax from the ear canal using a specialized otoscope device. The court had previously granted partial summary judgment finding no literal infringement based on its construction of the term "otoscope" as requiring a light and lens, but denied summary judgment on infringement under the doctrine of equivalents. In the current opinion, addressing cross-motions on additional claim construction disputes and a motion for invalidity, the court construed various disputed elements of the single patent claim and denied summary judgment of invalidity, holding that defendants failed to show by clear and convincing evidence that the term "cylindrical shape in cross-section" was indefinite.

business & regulatoryprocedure

This case arose after Refco's 2005 bankruptcy when the Litigation Trustee sued former insiders, professionals, and advisors in Illinois state court, asserting state-law claims including fraud, breach of fiduciary duty, and malpractice based on an alleged scheme to conceal Refco's financial condition ahead of its LBO and IPO. Certain defendants removed the action to federal court on the ground that it was related to the Refco Chapter 11 proceeding and successfully sought transfer to the Southern District of New York via the MDL Panel. The Trustee moved to remand for lack of subject-matter jurisdiction or, alternatively, for abstention under 28 U.S.C. § 1334(c). The court denied the motion, holding that the claims fell within the district court's "related to" bankruptcy jurisdiction under 28 U.S.C. § 1334(b) because their outcome could affect the bankruptcy estate and that abstention was not required.

business & regulatoryprocedure

The case involves the SEC's motion to hold defendant Richard Altomare in contempt for failing to pay over $1.7 million in disgorgement and prejudgment interest ordered by the court after he was found to have violated federal securities laws by selling unregistered securities and engaging in fraud. The court granted the motion, holding Altomare in civil contempt and ordering his incarceration until he complies with the payment or demonstrates that payment is impossible. The reasoning is that the court's prior orders were clear, Altomare's noncompliance was evident, and he failed to meet his burden of showing inability to pay despite evidence of his high income, luxury expenditures, and assets, while the court noted that he must pay what he can even if not the full amount.

business & regulatoryprocedure

In Boyd v. AWB LTD., U.S. wheat farmers brought a putative class action against Australian wheat exporters AWB Limited and AWB (U.S.A.) Limited, alleging that the defendants participated in a bribery and money-laundering scheme under the United Nations Oil for Food Program to monopolize wheat sales to Iraq and exclude U.S. wheat from that market. The plaintiffs claimed this conduct violated the Sherman Act, Clayton Act, Robinson-Patman Act, and RICO, and that it indirectly lowered domestic wheat prices in the United States by reducing overall U.S. wheat exports. The court granted the defendants' motion to dismiss under Rules 12(b)(1) and 12(b)(6). It held that the plaintiffs lacked antitrust standing because their injuries were too remote and not proximately caused by the foreign conduct, that RICO did not apply extraterritorially on these facts under the effects test, and that the complaint otherwise failed to state a claim.

business & regulatorycriminal law