Category: Constitutional Law

Second Circuit Denies En Banc Review of Decision Upholding Private Damages Remedy under the Religious Freedom Restoration Act

Case Name: Tanvir v. Tanzin

Date of Opinion: February 14, 2019

Opinion by: En banc. Judge Pooler and Chief Judge Katzmann Concur in Denial of Rehearing En Banc; Judges Jacobs, Cabranes, and Sullivan Dissent

Summary:

In the underlying case, plaintiffs sued federal law enforcement officials and officers alleging that they were put on a national “No Fly” list, despite not posing an aviation threat, in retaliation for their declining to serve as FBI informants reporting on fellow Muslims. Plaintiffs alleged defendants’ actions constituted a substantial burden on their exercise of religion in violation of the Religious Freedom Restoration Act (“RFRA”).  The United States District Court for the Southern District of New York dismissed the complaint, in relevant part, on the ground that the RFRA does not permit private parties to recover monetary damages against federal officers sued in their individual capacities. Plaintiffs appealed and, on June 25, 2018, a Second Circuit panel consisting of Chief Judge Katzmann and Circuit Judges Pooler and Lynch reversed, holding that the RFRA does permit private recovery of money damages against federal officers sued in their individual capacities.

Following the June 2018 decision, an active judge of the Second Circuit requested a poll on whether to rehear the case en banc. A majority of the Second Circuit declined the en banc review, and Judge Pooler issued a written concurrence, joined by Chief Judge Katzmann, in support of the panel’s original ruling that the RFRA permits a private action for monetary damages.  Judges Jacobs and Cabranes each issued a written dissent to the denial of the en banc review and joined the other, and Judge Sullivan joined both dissents.

The concurring judges contend that, contrary to the position taken in the dissenting opinions, the holding that a private action for monetary damages exists in this case is grounded in the express provisions for relief set out in the RFRA, and is not a judicially implied right of action that represents an extension of the Supreme Courts’ 1971 decision in Bivens v. Six Unknown Named Agents of the Federal Bureau of NarcoticsContinue reading

Second Circuit Upholds Securities Fraud Indictment and Conviction Despite a Senior FBI Official’s Extensive Leaks to the Press During the Investigation

Case Name: United States v. Walters

Date of Opinion: December 4, 2018

Opinion By: Judge Chin

Summary:

In April 2017, defendant-appellant William T. Walters, a professional gambler, was convicted of securities fraud and related crimes following a jury trial in the United States District Court for the Southern District of New York.  Walters was sentenced to 60 months imprisonment and a fine of $10, and was ordered to forfeit $25,352,490 and pay restitution of $8,890,969.33.  On appeal to the Second Circuit, Walters argued that his indictment should be dismissed because a Federal Bureau of Investigation (FBI) Special Agent’s repeated leaks about the investigation to The Wall Street Journal (WSJ) and The New York Times (NYT) violated the grand jury secrecy provision of Federal Rule of Criminal Procedure 6(e) and the Fifth Amendment’s Due Process Clause. Walters also challenged the district court’s orders on forfeiture and restitution.

The FBI and United States Attorney’s Office (USAO) began investigating Walters for suspicious trading activities in 2011.  FBI Special Agent Chaves served as the supervising agent for the FBI’s investigation.  In 2013, following a referral by the Financial Industry Regulatory Authority (FINRA), the investigation expanded to Walters’s and others’ trading related to a Dallas Company, Dean Foods, and Walters’s close relationship with Thomas Davis, a member of the Dean Foods Board of Directors.  Beginning a year later, in mid-2014, the WSJ and NYT published a series articles revealing confidential and highly detailed information about the ongoing insider trading investigation of Walters, including that Walters may have received tips from an insider about Dean Foods. One WSJ article published in August 2015 named Davis as a target of the investigation.  In early 2016, Davis agreed to cooperate with the government.  That May, following the presentation of evidence including Davis’s testimony, the grand jury issued a multi-count indictment against Walters for securities fraud and related charges related to insider trading in Dean Foods and a second company.

Late in 2016, the district court granted Walters’s motion for an evidentiary hearing on whether the news leaks constituted a violation of FRCP 6(e), but shortly before the scheduled hearing, the government acknowledged a likely FRCP 6(e) violation, informing the court that it had learned that Agent Chaves was the source of the confidential leaks to reporters.  The government noted that Chaves had been referred to appropriate authorities within the FBI and USAO for investigation for his professional misconduct and the district court cancelled the hearing. Walters then moved to dismiss the indictment on the basis that he was prejudiced by the leaks and, in the alternative, that they constituted “’systematic and pervasive’ prosecutorial misconduct . . .  and a violation of the Due Process Clause.” The district court denied that motion.  Following a three-week jury trial, Walters was convicted on all counts in April 2017.  Walters’s motion for a new trial was denied and he appealed.  His appeal renewed the arguments raised in his prior motions to dismiss the indictment. Continue reading

Second Circuit Holds New York Plaintiffs Asserting § 1983 Federal Malicious Prosecution Claim Must Demonstrate Criminal Proceedings Terminated in Manner Affirmatively Indicating Their Innocence

Case Name: Lanning v. City of Glens Falls et al.

Date of Opinion: November 7, 2018

Opinion By: Judge Lohier

Summary:

In 2012, the plaintiff was engaged in a divorce and custody dispute with his estranged wife, who was dating Ryan Ashe, a Glens Falls police officer. Lanning was arrested twice that same year after his estranged wife and Ashe falsely reported that Lanning had threatened them in violation of a previously issued order of protection. The charges stemming from those arrests were subsequently dismissed in 2014 during a jury trial. Three traffic tickets issued to him while his criminal charges were pending in 2013 in a traffic stop performed by Ashe were also dismissed.

Thereafter, the plaintiff, David Lanning Jr., sued the City of Glens Falls and other law enforcement officials for malicious prosecution in violation of the Fourth Amendment under 42 USC § 1983. In his complaint, Lanning did not specify a reason for the dismissal of the criminal charges. Appellees moved to dismiss and, in his papers opposing the motion to dismiss, Lanning contended that the charges were dismissed for lack of sufficient evidence and lack of jurisdiction. The United States District Court for the Northern District of New York dismissed Lanning’s claim of malicious prosecution in connection with his first arrest for failure to rebut the presumption of probable cause established by the indictment and failure to plead Ashe’s personal involvement in the prosecution. The District Court likewise dismissed the plaintiff’s claim of malicious prosecution in connection with his second arrest, finding that criminal proceeding had not terminated in Lanning’s favor, a required element of a § 1983 claim. Lanning appealed.

The Second Circuit affirmed, agreeing that Lanning had failed to adequately allege in his § 1983 claims for malicious prosecution that the criminal proceedings brought against him were terminated in his favor. Lanning had argued that the court should apply the standard adopted by the New York Court of Appeals for favorable termination under the applicable state tort of malicious prosecution that termination of the underlying proceeding “is not inconsistent with” innocence. The Second Circuit disagreed, however, clarifying that federal law defines the elements of a § 1983 malicious prosecution claim and state tort law serves only as a source of persuasive, but not binding, authority in defining the elements. In so ruling, the Second Circuit relied on the Supreme Court’s ruling in Manuel v. City of Joliet that common law principles were meant “to guide rather than to control the definition of § 1983 claims[.]” The Second Circuit held that “prior decisions requiring affirmative indications of innocence to establish ‘favorable termination’” continue to govern § 1983 malicious prosecution claims irrespective of developments in state malicious prosecution law.

The Second Circuit also dismissed Lanning’s additional constitutional claim of selective enforcement in violation of the Fourteenth Amendment Equal Protection Clause, holding that he did not provide any evidence that the defendants treated him differently than other individuals against whom reports of criminal activity had been made.

Summary Prepared By: Matla Garcia Chavolla

Second Circuit Vacates Injunction That Had Enjoined Release of Lynyrd Skynyrd Movie

Case Name: Ronnie Van Zant, Inc. v. Artimus Pyle – Second Circuit

Date of Opinion: October 10, 2018

Opinion by: Per Curiam; Judge Newman & Judge Hall (concurring)

Summary:

Defendant-Appellants appeal a permanent injunction decree issued by the United States District Court for the Southern District of New York that prohibited the release and distribution of a film surrounding the plane crash of the Lynyrd Skynyrd Band.

The Lynyrd Skynyrd band was founded in the 1960s by Ronnie Van Zant (“Ronnie”), Gary R. Rossington, and Allen Collins. In 1975, Artimus Pyle joined the band as a drummer. On October 20, 1977, the band was in a plane crash that killed lead singer, Ronnie, and several other members. Pyle, Rossington, and Collins survived the crash. Following the tragic crash, Ronnie’s widow, Judith and the surviving members entered into an oath, in which they agreed to never use the Lynyrd Skynyrd name ever again. For a period of ten years, the promise was honored. However, in 1987, the surviving band members embarked on a Lynyrd Skynyrd tribute tour. Judith took issue with the use of the band’s name and sued the members in the United States District Court for the Southern District of New York. At the conclusion of that suit, the district court issued a Consent Order limiting the members’ ability to use the band’s name and the biographical material of Ronnie, while allowing the surviving members “to exploit their life stories and portray their experiences with the band in movies.” That Consent Order is the basis for this present appeal.

Thereafter, in 2016, Pyle agreed with Cleopatra Records, Inc. to film a movie about Lynyrd Skynyrd and the events surrounding the 1977 plane crash. The contract provided that the story would be told “’through the recollections and experiences of Pyle.’” When plaintiffs, former band members and their trustees and representatives, learned of the film via press release, they sent a cease and desist letter to Cleopatra Records, Inc. Cleopatra Records, Inc. responded, asserting that it had no agreement with the plaintiffs and that it had a First Amendment right to produce and distribute the movie, and moved forward with the movie production. Plaintiffs sought judicial redress in the United States District Court for the Southern District of New York. After reviewing the final script, the district court ultimately concluded that the plaintiffs were entitled to a permanent injunction prohibiting the distribution of the film and other related activities. The defendants appealed this decision, Continue reading

Second Circuit Affirms the Constitutionality of New York’s Zero Emission Credit Program for Nuclear Power Plant Subsidies

Case Name: Coalition for Competitive Electricity, et al. v. Zibelman, et al. – Second Circuit

Date of Opinion: September 27, 2018

Opinion By: Judge Jacobs

In August 2016, the New York Public Service Commission (PSC) adopted a Zero Emissions Credit (“ZEC”) program as part of a plan to reduce greenhouse-gas emissions. The ZEC program subsidizes qualifying nuclear power plants, giving state-created and state-issued credits certifying zero-emission produced by participating nuclear plants. The ZEC program credit price for each MWh of electricity generated is calculated by PSC as the hypothetical environmental damage that would result from nuclear plan retirement, based upon federal task force estimates of damage from carbon emission. The price was $17.48 for the first two years of the ZEC program and, beginning in 2019, is to be calculated by PSC every two years with possible reduction based upon “renewable energy penetration” in the New York energy market and forecasts of wholesale electric energy prices.

In October 2016, plaintiffs, a group of electrical generators and trade groups, brought suit in the United States District Court for the Southern District of New York, challenging the constitutionality of the ZEC program, alleging that it is preempted by the Federal Power Act (“FPA”) and that it violates the dormant Commerce Clause.  Continue reading