Lloyd Francis MacMahon

The case involved a dispute over the selection of an arbitration forum under customer agreements between plaintiffs and defendant brokers Shearson/American Express. After the Supreme Court and Second Circuit affirmed an order compelling arbitration of all claims including RICO, plaintiffs sought to stay arbitration before the NYSE (selected by defendants after plaintiffs missed the contractual five-day election deadline) and instead compel arbitration before the AAA under AMEX rules, first in federal court and then by application in New York state court. The district court treated the motion as one for summary judgment and granted a permanent injunction barring further state court proceedings on the forum selection issue. The court reasoned that defendants had validly elected NYSE pursuant to the agreement's terms, plaintiffs had waived their election right by failing to respond timely and not seeking a stay, and the federal judgment already required arbitration without need for further orders; an injunction was necessary under 28 U.S.C. § 2283 to protect and effectuate that judgment.

business & regulatoryprocedure

In this case, Population Planning Associates, Inc. (PPA), a North Carolina corporation, sued Life Essentials, Inc., a California corporation, and its president for misappropriating PPA's mailing list to solicit sales of a product called Revive Plus, asserting claims under the Lanham Act, RICO, and state law for unfair competition, false advertising, and related torts. The defendants moved to dismiss for improper venue in the Southern District of New York or to transfer the case to the Central District of California. The court held that venue was improper under 28 U.S.C. § 1391(b) because the claims did not arise in New York, as defendants conducted no significant business there, all witnesses and records were located in California, and litigating in New York would be unduly burdensome to the defendants. The court therefore transferred the action to the Central District of California under 28 U.S.C. § 1406(a).

procedurebusiness & regulatory

This case involves claims by plaintiffs Spear, Leeds & Kellogg and Elliot Associates against Public Service Company of New Hampshire (PSNH) and its officers and directors for securities fraud under the Securities Exchange Act of 1934, specifically alleging false representations about the convertibility of warrants and debentures into common stock, along with related state law claims. The court denied the defendants' motions to dismiss the complaint for failure to plead fraud with particularity under Rule 9(b), for summary judgment, to dismiss the Section 20(a) control person liability claim, to stay discovery, and to quash service of process. The reasoning was that the plaintiffs sufficiently alleged specific motives and benefits to establish scienter, that material factual disputes precluded summary judgment, that the primary fraud claim's sufficiency supported the control person claim, and that any delay in service caused no prejudice and was due to excusable neglect.

business & regulatoryprocedure

This case involved defendant Weichert, who was convicted after a jury trial of conspiracy to defraud the United States and multiple counts of bankruptcy fraud arising from the illegal transfer and diversion of assets from a bankrupt wood stove manufacturing company and related entities. Following an appeals court remand, the district court held an evidentiary hearing to determine the actual damages or loss caused by the bankruptcy fraud convictions for purposes of restitution under 18 U.S.C. § 3651. After considering testimony from witnesses including company officers and the defendant's partner, along with documentary evidence of diverted goods and misappropriated checks, the court found by a preponderance of the evidence that the total loss amounted to $155,956.64. The court therefore ordered an amended judgment reducing the previously imposed restitution from $200,000 to this lower amount.

criminal law

This case involved a professional corporation suing brokerage firm Shearson Lehman Brothers and an employee under federal and state securities laws for losses from an allegedly unauthorized transfer of holdings to a margin account. The defendants moved to stay the action and compel arbitration under the Federal Arbitration Act, arguing that an arbitration clause in a customer agreement signed by the corporation's president for his personal account also bound the corporate account, or alternatively that continued trading after receipt of an agreement for the corporate account created an obligation to arbitrate. The court denied the motion in full, holding that no customer agreement was executed on behalf of the corporation and that the personal agreement did not bind the separate corporate entity. The court further reasoned that there was insufficient evidence the corporation received any agreement, and that unsigned arbitration agreements are not enforceable against non-signatories absent specific circumstances like explicit contract language or a longstanding course of conduct, none of which applied here.

business & regulatoryprocedure

In Burmah Oil Tankers, Ltd. v. Trisun Tankers, Ltd., the charterer petitioned to permanently stay a second arbitration demanded by the tanker owner under a 1984 Asbatankvoy charter party, following a prior arbitration that had awarded damages for cargo conversion and resolved withheld freight. The owner sought to arbitrate a separate claim for unpaid demurrage of $47,515.58 that had arisen during the same voyage but was not presented in the first proceeding. The court stayed the arbitration, ruling that the demurrage claim was part of the same cause of action under the transactional test for res judicata and thus barred because a confirmed arbitration award carries the force of a federal judgment that courts may protect from relitigation through later arbitration.

procedurebusiness & regulatory

In this case, a New York resident sued Divi Hotels in state court after suffering injuries from a motorboat while snorkeling at their Aruba resort, and the hotels impleaded the Kingdom of the Netherlands, Netherlands Antilles, and Aruba as third-party defendants, alleging they bore ultimate responsibility due to their lease of the property. The third-party defendants moved to dismiss under the Foreign Sovereign Immunities Act (FSIA), claiming immunity from U.S. court jurisdiction. The court granted the motion and dismissed the third-party complaint for lack of subject matter jurisdiction, holding that none of the exceptions in 28 U.S.C. § 1605(a)(2) applied. The core reasoning was that any commercial activities, such as tourist solicitation or property leasing, lacked a sufficient nexus to the U.S. or a direct effect in the U.S. to overcome sovereign immunity.

torts & liabilityprocedurefederal power

The case involves a cable TV operator (St. Charles Cable TV) and its affiliates suing a manufacturer (Eagle Comtronics) for breach of warranty, fraud, and negligent misrepresentation after purchasing prototype addressable descramblers that allegedly failed to perform as represented, while the defendant counterclaimed for the unpaid balance and asserted conversion claims against the system licensees. After a bench trial limited to liability, the court issued findings of fact and conclusions of law under New York UCC Article 2 governing the sale of goods. The core reasoning addressed contract formation, whether oral or promotional statements created enforceable express warranties beyond the written acknowledgments, the statute of frauds, the experimental nature of the prototypes limiting implied or express assurances, and agency principles for attributing liability among the related entities.

business & regulatorytorts & liability

In Street v. Vitti, minority shareholders and officers of VTS Travel Enterprises Inc. sued the majority shareholder and president in federal court, seeking to block him from filling board vacancies, remove him from office, obtain an accounting for alleged corporate waste and unauthorized loans, and obtain a declaratory judgment interpreting the shareholders' agreement to limit board appointments. After an evidentiary hearing, the court granted plaintiffs a preliminary injunction preventing the defendant from electing new directors or taking improper funds and granted summary judgment on the declaratory judgment claim. The core reasoning was that the 1980 shareholders' agreement and its amendments bound all parties to preserve the existing board composition, required an 80% director vote for major actions like issuing shares or terminating officers, and that allowing the defendant to fill vacancies would undermine those protections without any showing of changed circumstances or authorization.

business & regulatory

This case arose from political turmoil in Panama, where the United States recognized President Delvalle and Ambassador Sosa as the lawful representatives, while a rival regime led by Noriega and Palma claimed authority over government funds held in U.S. banks. The Republic of Panama, through Sosa, sought a preliminary injunction to prevent the banks from disbursing or transferring the funds except as authorized by Sosa. The court granted the injunction, finding irreparable harm from unauthorized transfers and a likelihood of success on the merits based on the executive branch's conclusive certification under 12 U.S.C. § 632 that Sosa alone had authority over the accounts. It also addressed motions to intervene by the rival claimants and Banco Nacional, treating the latter as a central bank subject to the same restrictions. The decision rested on precedents holding that courts must defer to the political branches' recognition of foreign governments and their representatives.

federal powerpropertyprocedure

The case involved a plaintiff seeking damages for personal injuries from a 1977 Braniff flight who, after the airline's bankruptcy automatically stayed her original lawsuit, failed to file a proof of claim by the bar date or obtain relief from the stay, resulting in her claims against Braniff being barred by the bankruptcy court. She then brought a direct action against Braniff's insurer, USAU, under New York Insurance Law § 3420. The court granted USAU's motion for summary judgment, holding that the statute requires both the insured's insolvency and an unsatisfied judgment against the insured as prerequisites to a direct action, which the plaintiff did not satisfy.

proceduretorts & liabilitybusiness & regulatory

In Kronfeld v. Advest, Inc., purchasers of Washington Public Power Supply System bonds sued underwriters and sellers, alleging violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5, RICO, and state-law claims for negligent misrepresentation, fraud, and breach of fiduciary duty based on misrepresentations or omissions about management issues, lack of guarantees, and unenforceability of participants' agreements. Defendants filed multiple motions, including to compel arbitration under the Federal Arbitration Act, to dismiss under Rules 9(b) and 12(b)(6), for summary judgment on statute-of-limitations grounds, and for other relief. The court granted the motion to compel arbitration for plaintiffs who had signed customer agreements containing arbitration clauses, relying on Supreme Court precedents such as Shearson/American Express, Inc. v. McMahon and Dean Witter Reynolds Inc. v. Byrd that establish arbitrability of Exchange Act and RICO claims and reject efficiency-based objections to separate proceedings. For the remaining plaintiffs, the court proceeded to analyze whether the amended complaints satisfied Rule 9(b)'s particularity requirement for pleading fraud, noting prior dismissals and Second Circuit standards.

business & regulatoryprocedure

This case concerns the ownership of the renewal copyright for William Saroyan's play "The Cave Dwellers." The plaintiffs, Saroyan's children, renewed the copyright after the original term expired, while the defendant Foundation, which received the residue of the estate including copyrights under the will, claimed the rights based on the author's testamentary intent and the plaintiffs' estrangement from their father. The court granted summary judgment to the plaintiffs, striking the Foundation's affirmative defenses. The reasoning is that Section 304(a) of the Copyright Act establishes a mandatory hierarchy for renewal rights, granting them to the author's children if living, irrespective of any will or equitable considerations.

propertyprocedure

This case involved a Brazilian corporation (BIAS) suing a Delaware corporation with New York offices (United) in federal court under diversity jurisdiction to recover a commission for services in introducing a European bank as a potential purchaser of or investor in United's Brazilian subsidiary. United moved to dismiss on grounds including forum non conveniens. The court applied the private and public interest factors from Gulf Oil Corp. v. Gilbert and Piper Aircraft Co. v. Reyno, noting that a foreign plaintiff's forum choice receives less deference. It found that nearly all relevant evidence, witnesses, negotiations, and potential damages were located in Brazil or Venezuela, with only minimal connections to New York via two communications initiated by the plaintiff. The court concluded that the private interest factors compelled dismissal, with public interest factors reinforcing that Brazil was the more appropriate forum.

procedurebusiness & regulatory

The case involved a defendant's motion under 28 U.S.C. § 2255 to vacate his sentence after convictions for conspiring to defraud the United States and multiple counts of bankruptcy fraud. The court denied the motion in full. Claims that the indictment was defective or that prosecutorial misconduct occurred were rejected as waived under Federal Rule of Criminal Procedure 12 or as previously litigated and not properly raised on collateral attack. Challenges to the pre-sentence report and restitution obligation were rejected because the sentence permitted adjustment to verified amounts only and sufficiency issues had been resolved on direct appeal. Ineffective assistance claims failed for lack of any showing of deficient performance or prejudice under Strickland v. Washington.

criminal lawprocedure

The case involved a diversity action by St. Charles Cable TV, Inc. against Eagle Comtronics, Inc. seeking damages for defective cable equipment supplied for a Louisiana community antenna television system. Eagle moved to dismiss for lack of subject-matter jurisdiction on the ground that both SCC and Eagle were New York citizens, and for failure to join Cable Holdings as an indispensable party, while also seeking sanctions. After an evidentiary hearing, the court made detailed findings of fact concerning SCC’s incorporation in Louisiana, its day-to-day operations and employees in Louisiana, and its executive decision-making and administrative functions performed in New York, in order to determine SCC’s principal place of business and to resolve the joinder question under applicable procedural rules.

procedurefederal power

The case involved Baldwin Hardware Corporation suing Harden Industries, Inc. under federal false advertising law for distributing a catalog that used photographs of Baldwin's products while claiming they were Harden's. Baldwin sought a preliminary injunction, while Harden moved to dismiss for improper venue or transfer the case to California. After de novo review of the magistrate's report, the court found venue improper in New York because the catalog was prepared and primarily distributed from California, witnesses were located there, and Harden lacked sufficient contacts in the district. The court therefore transferred the action to the Central District of California pursuant to 28 U.S.C. § 1406(a) and referred the injunction motion to the transferee court without addressing its merits.

procedurebusiness & regulatory

This case involved a petition by defendants in a related state criminal prosecution seeking to hold the Bronx District Attorney, his press secretary, and assistant district attorneys in civil and criminal contempt for allegedly violating a 1983 federal court wiretap order. The order had authorized the release of FBI wiretap materials (the 'Tumcon tapes') to the Bronx DA for use in investigating a murder but imposed strict limits on copying and public disclosure without court approval. After the DA's office filed and distributed an excerpts transcript of the wiretaps in state court proceedings, and following newspaper coverage, petitioners argued the actions defied the federal order. The court denied and dismissed the contempt petition, reasoning that a subsequent 1984 federal wiretap order by another judge had authorized public use of the materials in state proceedings, that state courts have authority under federal wiretap statutes to address suppression and disclosure issues, and that no willful violation of the original order occurred.

criminal lawprocedure

This case involves a contract dispute between Catalyst Energy Development Corporation, a New York corporation, and Iron Mountain Mines, Inc., a California corporation, over a promissory note stemming from a collapsed agreement to fund a hydroelectric project on IMMI's California property. After a default judgment was vacated, IMMI moved under Rule 12(b)(2) to dismiss for lack of personal jurisdiction, claiming insufficient contacts with New York. The court denied the motion, finding that IMMI transacted business in New York under CPLR 302(a)(1) by directing Catalyst to deposit the $50,000 down payment into IMMI's New York bank account pursuant to the contract, with the note made payable in New York and governed by New York law. The court reasoned that these actions, plus related communications, established minimum contacts satisfying due process because IMMI purposefully availed itself of the forum such that it could reasonably anticipate being sued there.

procedure

This case involved a dispute over damaged corn cargo shipped from the United States to Egypt under multiple charter parties and a bill of lading. Plaintiff GASC, the cargo receiver, sued after refusing part of the shipment, leading shipowner Olymbos to implead Stellar and others; Olymbos and Stellar then moved to compel GASC to arbitrate under the New York Produce Exchange clause in the Olymbos-Stellar charter party and to stay the federal action. The court denied the motions, holding that the bill of lading did not unmistakably incorporate the arbitration clause, that the clause by its terms applied only to owners and charterers, and that Stellar had not signed the charter party as GASC's agent. The reasoning rested on settled Second Circuit precedent requiring clear incorporation and explicit agency language for non-signatories to be bound, which was absent here.

business & regulatoryprocedure