This is the second of four posts summarizing Judge Sotomayor’s civil opinions.  In the cases discussed below, the Judge’s opinions were twice reviewed by the Supreme Court – in one, the Supreme Court unanimously reversed; in the other, it unanimously affirmed but pointedly rejected the Second Circuit’s rationale.  These opinions again seem largely in line with the views of Justice Souter.  Though the Supreme Court twice reversed Judge Sotomayor’s reasoning by wide margins, both involved the interpretation of isolated statutory provisions, rather than larger jurisprudential questions.

In European Community v. RJR Nabisco, 355 F.3d 123 (2d Cir. 2004), the E.C. and various foreign governments sued tobacco companies under RICO alleging that the companies had engaged in cigarette smuggling and money laundering.  The plaintiff governments claimed that the companies’ conduct had injured them through lost tax revenues and increased law enforcement costs.  Judge Sotomayor’s opinion affirmed the district court’s holding that, under circuit precedent, the suit was barred under the “revenue rule,” which prohibits suits by foreign governments to recoup lost tax revenue.  Judge Calabresi dissented.  After the Supreme Court remanded the case for further consideration of the holding of Pasquantino v. United States, 544 U.S. 349 (2005), that the revenue rule did not preclude the criminal prosecution in that case, the Second Circuit (again per Judge Sotomayor) reinstated its opinion (this time with no dissent).  See 424 F.3d 175 (2d Cir. 2005).  The Supreme Court denied certiorari.  546 U.S. 1092 (2006).

In Dabit v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 395 F.3d 25 (2d Cir. 2005), the plaintiff securities broker brought a putative state law class action alleging that the defendant investment firm had manipulated various stock prices, which allegedly caused the broker to hold overvalued securities.  Judge Sotomayor’s opinion held that suit was not preempted by the Securities Litigation Uniform Standards Act of 1998 (SLUSA), which precludes alleging suits misrepresentations in connection with the purchase or sale of securities. The Second Circuit held that the suit was not preempted because he was a “holder” – not a buyer or seller – of the stocks.  When the Seventh Circuit reached the opposite conclusion in Kircher v. Putnam Funds Trust, 403 F.3d 478 (7th Cir. 2005) (Easterbrook, Ripple, and Wood, JJ.), the Supreme Court granted certiorari to resolve the conflict and unanimously reversed, reasoning that it was appropriate to broadly read the statutory language to reach suits like that brought by the plaintiff, even if they did not formally allege a purchase or sale.  547 U.S. 71 (2006).

In Amnesty America v. Town of West Hartford, 361 F.3d 113 (2d Cir. 2004), anti-abortion protesters brought a Section 1983 suit alleging that a town had improperly trained and supervised police officers who had allegedly used excessive force in arresting them.  The district court granted the town summary judgment, and the Second Circuit reversed.  Judge Sotomayor’s opinion found that the plaintiff-protesters’ allegations were sufficient to create a genuine issue of material fact regarding the objective reasonableness of the officers’ conduct.  “Because a reasonable jury could find that the officers gratuitously inflicted pain in a manner that was not a reasonable response to the circumstances, . . . the determination as to the objective reasonableness of the force used must be made by a jury following a trial.”  The court of appeals also found sufficient evidence for the plaintiffs to proceed on their failure to supervise theory (“a single action is sufficient to expose [a municipality] to liability”), though not the allegation of failure to train.

In William L. Rudkin Testamentary Trust v. Commissioner of Internal Revenue, 467 F.3d 149 (2d Cir. 2006), a trustee of a testamentary trust argued that the investment advisory fees paid by the trust were fully tax deductible.  A full deduction is permitted for an expense “paid or incurred in connection with the administration of the . . . trust” that “would not have been incurred if the property were not held in such trust.”  26 U.S.C. § 63(e).  Judge Sotomayor’s opinion rejected the claimed deduction, reasoning that the fees claimed by the trustee “could” be incurred by an individual (not just a trust).  The Supreme Court granted certiorari to resolve a circuit conflict on the question and unanimously rejected the Second Circuit’s reasoning, concluding that it “flies in the face of the statutory language.”  128 S. Ct. 782, 787 (2008) (per Roberts, C.J.).  The Supreme Court instead adopted the test applied by two other circuits:  whether the fees would “commonly” or “customarily” be incurred by individuals rather than trusts.

In Clarett v. United States, 369 F.3d 124 (2d Cir. 2004), the Second Circuit reversed a district court ruling that the antitrust laws forbade an NFL rule precluding running back Maurice Clarett from declaring for the NFL draft because he was fewer than three seasons removed from high school.  Judge Sotomayor’s opinion held that the non-statutory labor exemption to the antitrust laws exempted the NFL rule.  “[I]t has long been recognized that in order to accommodate the collective bargaining process, certain concerted activity among and between labor and employers must be held to be beyond the reach of the antitrust laws.”  In reaching that decision, the Second Circuit reiterated its disagreement with contrary Eighth Circuit precedent.  The Supreme Court, however, denied certiorari.  544 U.S. 961 (2005).

In United States v. Quattrone, 402 F.3d 304 (2d Cir. 2004), journalists challenged a gag order forbidding the publication of jurors’ names during a criminal trial, despite the fact that the names were not kept secret but instead were read in open court.  Judge Sotomayor’s opinion held that the order violated the First Amendment.  The court of appeals relied on the facts that “the district court did not make factual findings that publicity in this case would impair defendant’s Sixth Amendment right to a fair trial” and “the record does not demonstrate sufficient consideration of measures other than a prior restraint that could have mitigated the effects of the perceived harm.”

In Anderson v. Recore, 446 F.3d 324 (2d Cir. 2006), an individual alleged that his removal from a temporary prison release program in the wake of a positive drug test, but allegedly without notice and an opportunity to be heard, violated due process.  The district court agreed.  Judge Sotomayor’s opinion found that the plaintiffs had made out a constitutional claim:  “[W]here, as here, the [defendants] had discretion to make a considered judgment about whether Anderson should continue his participation in the temporary release program, due process requires some opportunity for Anderson to argue that the charges sustained in the Tier III hearing did not warrant revocation of his supervised release.”  But the court of appeals held that the claim nonetheless was properly dismissed because the defendants were entitled to qualified immunity given that it previously was not clear whether such a hearing could have affected the individual’s status.

In Papineau v. Parmley, 465 F.3d 46 (2d Cir. 2006), officers appealed the denial of summary judgment on their request for qualified immunity for claims that they had violated protesters’ constitutional rights in the course of dispersing a demonstration.  Judge Sotomayor’s opinion for the Second Circuit affirmed.  As then alleged, dozens of officers had charged into a peaceful protest on private property – where it had moved after some protesters had briefly slowed traffic on a highway – and arrested the protesters using substantial force.  “Were we to accept defendants’ view of the First Amendment, we see little that would prevent the police from ending a demonstration without notice for the slightest transgression by a single protester (or even a mere rabble rouser, wholly unconnected to the lawful protest).”  The plaintiffs also were entitled to proceed on their Fourth Amendment excessive force claim:  “For example, plaintiffs allege that without provocation, the [police] threw several plaintiffs to the ground, including an eleven-year-old girl and an elderly medicine woman; beat various plaintiffs with batons; kicked and punched several of them; and pushed at least one man, who was praying, to the ground and choked him.”

In Rivera-Powell v. N.Y. City Board of Elections, 470 F.3d 458 (2d Cir. 2006), the Second Circuit rejected a candidate’s claim that alleged violations of state law in removing her from the ballot violated the First and Fourteenth Amendments.  Judge Sotomayor’s opinion for the Second Circuit held that the Constitution required adequate process, including a pre-deprivation hearing – both of which were provided:  “Though the parties did not brief this issue, the record suggests that this hearing afforded her notice and an opportunity to be heard; indeed, Rivera-Powell’s attorney appeared at the hearing and voiced her position. Case law in analogous contexts suggests that such a hearing meets the essential requirements of due process.  More importantly, after the Board’s action, Rivera-Powell had the opportunity to obtain full judicial review by way of a special proceeding under New York Election Law Section 16-102, which provides for expedited proceedings as to designations.”  On essentially the same grounds, the court of appeals rejected the plaintiff’s First Amendment claim:   “We note that a contrary holding would permit any plaintiff to obtain federal court review of even the most mundane election dispute merely by adding a First Amendment claim to his or her due process claim. We would thereby undermine our holding — one which we share with many other circuits — that federal court intervention in "garden variety’ election disputes is inappropriate.”

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