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2nd U.S. Circuit Court of Appeals

Second Circuit Clarifies Statute of Limitations for Debt Claims

Last month, the Second Circuit clarified when the statute of limitations begins to run under the Fair Debt Collection Practices Act, The New York Law Journal's Mark Hamblett reports. It is when the bank freezes a debtor's account, not when the notice of debt is served.

The plaintiff in the underlying case is suing attorney Todd Houslanger of Houslanger & Associates for freezing his account when it was allegedly another man with a similar name who was the judgment debtor.

Second Circuit Rules Citizenship Law Discriminates Against Fathers

Earlier this month, the U.S. Court of Appeals for the Second Circuit ruled that an immigration law that treats mothers and fathers differently in determining whether their children may claim U.S. citizenship is unconstitutional, Reuters' Joseph Ax reports.

The law requires unwed fathers who are U.S. citizens to spend at least five years residing in the U.S. before they can confer citizenship to children born out of country, out of wedlock and to a mother who is not a U.S. citizen. In contrast, unwed U.S. mothers only must reside in the U.S. for a year for their children to be able to obtain American citizenship.

Apple Likely Heading For Another Appeal with E-Books Ruling

The Second Circuit, 2-1, has upheld a finding that Apple violated antitrust laws with its e-book pricing, Fortune's Philip Elmer-DeWitt reports.

The majority found that the Sherman Antitrust Act was violated if a conspiracy results in higher prices to consumers--no matter other factors, he notes. Dissenting Judge Dennis Jacobs argued that market conditions like competitor Amazon's e-book monpoly and Apple's status as a book distibutor should be considered.

Philip Elmer-DeWitt notes that Apple can either seek en banc review by the Second Circuit or seek the slender chance it will be granted certiorari by the Supreme Court.

'Choose Life' License Plates Barred As 'Patently Offensive'

The U.S. Court of Appeals for the Second Circuit has ruled that New York can exclude "Choose Life" license plates from the state's specialty license plate program, The Volokh Conspiracy's Eugene Volokh writes. The Department of Motor Vehicles found that the plates are patently offensive, which the Second Circuit, 2-1, upheld.

The license plates are nonpublic forums in which "the government may select which speech is allowed, so long as the restriction is reasonable, viewpoint-neutral, and doesn’t vest excessive discretion in government officials, since such excessive discretion would lend itself to forbidden viewpoint discrimination," Volokh writes. The Second Circuit said the program excludes all viewpoints on the subject of abortion and thus is reasonable, viewpoint-neutral and doesn't vest excessive discretion in government officials.

Volokh agrees with the dissent that the DMV can't pick and choose what "'custom plates to permit, based solely on ... subjective judgment regarding the degree to which any given political, religious, or social issue is “inflammatory'" at any given time.

Second Circuit Rejects NSA's Collection of Bulk Call Data

The U.S. Court of Appeals for the Second Circuit ruled Thursday that the National Security Agency's bulk collection of Americans' phone records is illegal, The New York Times' Charlie Savage and Jonathan Weisman reports. The panel ruled that the Patriot Act can't be interpreted to allow the bulk collection of domestic call metadata, but noted that Congress could choose to authorize "'such a far-reaching and unprecedented program.'" The Patriot Act is set to expire June 1.

The Patriot Act permits the collection of records deemed "'relevant'" to a national security case, but the federal government interpreted this to cover the collection of all phone-call metadata so long as relevant records were reviewed by intelligence analysts, Savage and Weisman note.

Court Greenlights Debt-Collection Class Action Against Law Firm

The Second Circuit has upheld the certification of class actions against law firm Mel Harris and Associates, as well as a debt-buying company and a process serving agency, for allegedly intentionally failing to serve debtors in debt-collection cases and obtaining default judgments in New York City Civil Court, the New York Law Journal's Mark Hamblett reports.

The plaintiffs allege that more than 90 percent of the debtors were never served and the defendant provided bogus proof of service and affidavits of merit attesting to their personal knowledge of the debts to win default.

Second Circuit Skeptical of Fair Use Argument in Google Books Case

The Second Circuit appeared skeptical during oral argument Tuesday over the Authors Guild's claim that it's not fair use for Google to scan millions of out-of-print books and post them online, Gigaom's Jeff John Roberts reports. The guild argued the scanning project is not fair use because it is commercial in nature, Roberts reports, which was a shift in strategy after "Judge Denny Chin awarded a decisive victory to Google in November of last year by throwing out the Authors Guild’s class action suit, after concluding Google Books was 'highly transformative.'"

Second Circuit Upholds Tribal Leader's Conviction

Submitted by Amaris Elliott-Engel on Wed, 11/12/2014 - 08:23

Here's a piece I wrote for the Connecticut Law Tribune regarding a former president of the Mashantucket Pequot Tribal Nation who, despite being a strong advocate for American Indian rights, is now serving a federal prison sentence for embezzling from the tribe:

Michael Thomas had a reputation as a "tireless and effective advocate" for the Mashantucket Pequot Tribal Nation, and he rose to president of the tribal council, a position he held for nine years, despite a difficult childhood. But now, with his conviction recently upheld by the U.S. Court of Appeals for the Second Circuit, Thomas will spend 18 months in federal prison for embezzling more than $100,000 in tribal funds.

It could have been worse for the former leader of the tribe that runs the successful Foxwoods Resorts Casino. When U.S. District Judge Janet Bond Arterton sentenced Thomas, she took into account his advocacy for American Indian rights and gave him a sentence that was more lenient than federal guidelines "to reflect [the] defendant's positive work for the tribe."

Over a two-year period, Thomas used his tribal American Express card to pay over $100,000 in personal expenses. Most of the money Thomas embezzled was spent on a car service he hired to bring his mother to and from her dialysis and other medical appointments, at $450 per trip. He also spent tribal money on Direct TV for his personal residence, Sirius XM Satellite Radio for his personal vehicle and cell phone service for two of his associates, among other expenditures.

Tribal law prohibited the use of the tribal-issued AmEx card to pay for personal expenses. Thomas himself signed that tribal resolution as the council chairman. But Thomas alleged that personal items could be charged on his card as long as they were reimbursed.

Prosecutors countered that Thomas had no way to repay the charges. His personal income was in decline and his personal checking account was overdrawn every month. Thomas also never reimbursed or attempted to reimburse the tribe for any portion of the $100,000 of the personal charges.

He was ousted from his elected position in 2009.

In the latest development, the U.S. Court of Appeals for the Second Circuit upheld Thomas' conviction on narrow grounds last month.

Thomas had been convicted of theft from an Indian tribal organization and theft from a tribal government that received $10,000 in federal funds. He agreed that his intention to repay the funds was not in itself a defense to charges of theft and embezzlement. But Thomas's counsel, Steven Rasile of the Law Offices of Mirto & Rasile in West Haven, argued that Thomas's "intent to repay, when coupled with the tribe's practice of permitting [Thomas] to place personal expenses on the tribe's charge card and reimburse them later could have demonstrated that the defendant lacked the requisite intent to commit the crimes with which he was charged."

The district court held that it was not relevant to the case that Thomas had previously reimbursed the tribe for $159,000 in personal expenses charged to his tribal-issued American Express card, or that Shalida Jones, another tribal councilor, had used her tribal credit card for $36,511 in personal expenses. If the defendant "had evidence that other tribal council members charged big-ticket items, like $80,000 of limo services, and went years without repaying, that's getting closer in comparability," Arterton said. "'From what the government is saying, there isn't any such evidence."

The Second Circuit panel of John Walker Jr., Jose Cabranes and Raymond Lohier Jr. rejected Thomas' contention that his due process rights were violated because he was not allowed to introduce that evidence at the trial.

"Even if the evidence at issue was sufficient to establish that the tribe, in practice, permitted its officials to charge personal expenses to their cards with subsequent reimbursement, such evidence would only have been relevant at trial if Thomas's conduct comported with that practice," the panel said. "Here, it is undisputed that Thomas did not reimburse the tribe for any of the over $100,000 in personal expenses that he charged to his card between October 2007 and September 2009—despite the fact that he was not indicted until January 2013."

Not only was Thomas' defense irrelevant to the crimes he was charged with, but the probative value of the evidence was substantially outweighed by the danger of confusing the jury, the court said.

The panel noted in footnotes that there were two issues of first impression in the case.

The first was whether theft from a tribal government could be prosecuted under a federal law that bars people from taking more than $5,000 in funds from programs that receive $10,000 or more in federal funds per year. While Thomas did not challenge federal jurisdiction over his embezzlement from the tribe, the panel did note that the Eighth Circuit has affirmed convictions in federal court for people who have stolen from a tribal government.

The second issue of first impression was whether a defendant's intent to repay funds can be used as a defense to charges of embezzlement and theft. The panel noted that, while it has not decided directly if a defendant's intent to repay funds is a defense to charges of embezzlement and theft, the Second Circuit has issued an unpublished opinion citing a First Circuit's ruling that "'an intent to return money or property is not a defense to the charge of embezzlement.'"

Rasile, Thomas' counsel, declined comment. Assistant U.S. Attorneys Christopher Mattei and Marc Silverman wrote the brief for the U.S. Attorney's Office in Connecticut. Mattei argued the case before the Second Circuit. That office declined comment as well.


2nd Circuit Upholds Regulation of American Indian Payday Lenders

The U.S. Court of Appeals for the Second Circuit has ruled that New York's top financial regulator can tackle online lending businesses run by two American Indian tribes in Oklahoma and Michigan, the New York Times reports: "In their lawsuit, the tribes — the Otoe Missouria Tribe in Red Rock, Okla., and the Lac Vieux Desert Bank of Lake Superior Chippewa Indians in Watersmeet, Mich. — argued that their sovereign status shielded them from the reach of New York State. The appeals court disagreed, outlining in a 33-page opinion that the borrowers reside in New York and received the loans, 'certainly without traveling to the reservation.”'

Second Circuit Hears Arguments on Phone Surveillance

The federal government was before the U.S. Court of Appeals for the Second Circuit yesterday to defend the National Security Agency's collection of phone call metadata for millions of Americans in order to investigate foreign terrorism, the New York Law Journal's Mark Hamblett reports: [Assistant U.S. Attorney General Stuart] Delery said the case was governed by Smith v. Maryland, 442 U.S. 735 (1979), where the U.S. Supreme Court held that telephone users lack a Fourth Amendment privacy interest in the telephone numbers they dialed because they voluntarily give that information to their telephone company. [Alex] Abdo [of the American Civil Liberties Union] countered that the use of a pen register against a criminal suspect in the Smith case was a far cry from the mass accumulation of phone data on the chance it may be useful to derail a terror attack." U.S. District Judge William Pauley refused to grant an injunction against the surveillance, but two other district judges came to the opposite conclusion.



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