John Matthew Cannella

Plaintiff David Bergstein sued his former employer, Jordache Enterprises, for breach of contract over unpaid sales commissions, tortious interference with contract, and violations of the Pennsylvania Commissioned Sales Representatives Act, after his discharge. The motion at issue sought to modify a magistrate judge's discovery order that had denied the plaintiff's requests for an adverse inference and sanctions based on the defendant's loss of sales-commission records belonging to other non-party salespersons, some dating back to 1982. The district court denied the motion under the clearly erroneous standard of Federal Rule of Civil Procedure 72(a), concluding that the magistrate had properly found no bad faith or intent to destroy relevant evidence, as the loss occurred in the ordinary course of business and the magistrate was best positioned to evaluate the parties' conduct during discovery. The court also rejected the plaintiff's argument that paragraphs in the complaint made the records relevant under Federal Rule of Evidence 406.

procedurelabor & employment

This case involved a consolidated multidistrict securities class action where plaintiffs alleged that defendants violated federal securities laws in connection with public offerings of units in equipment-leasing limited partnerships. The parties reached a settlement creating a $14,750,000 fund, which the court had previously approved. Addressing the plaintiffs' counsel's petition for fees and expenses from that fund, the court applied the lodestar method with a risk-enhancement multiplier of 1.44 after reviewing contemporaneous time records, awarding $2,454,791.40 in attorney's fees and $55,427.80 in litigation expenses while denying reimbursement for certain post-settlement and unrelated costs. The reasoning emphasized computing a fair fee under applicable precedents in common-fund cases that benefits the settlement fund as a whole.

business & regulatoryprocedure

This case is a federal declaratory judgment action brought by insurer National Casualty Company seeking a ruling on its obligations under a general liability policy issued to Jordache Enterprises, specifically whether it must defend or indemnify Jordache in an underlying patent-infringement lawsuit and related ITC proceeding. Jordache moved to stay the federal action in favor of a parallel California state-court breach-of-contract suit it had filed against National, and also sought dismissal of the claims against the other named defendants. The court denied both motions, holding that it had diversity jurisdiction, that the California action had itself been stayed pending this proceeding, and that abstention was unwarranted because the case did not involve complex state regulatory schemes or other exceptional circumstances that would require deference to the state forum. The court further noted that Jordache lacked standing to seek dismissal of claims against the non-insured defendants and that the federal forum was convenient for the parties.

business & regulatoryprocedure

The case involved a class action by purchasers of Harcourt Brace Jovanovich preferred stock alleging that the company and related defendants made misrepresentations about its ability to meet financial obligations in connection with a 1987 recapitalization plan, in violation of section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5, and section 20. Defendants moved to dismiss under Rule 12(b)(6), arguing that the claims were time-barred because public filings and events had placed plaintiffs on inquiry notice more than one year before the suit was filed in March 1992. The court denied the motion, holding that inquiry notice could not be established as a matter of law at this stage because the disclosed facts about the recapitalization, asset sales, and debt did not clearly reveal material inconsistencies or retrenchments sufficient to trigger the limitations period. The court reasoned that distinguishing factors from prior cases, such as the nature of the disclosures and the absence of clear red flags like an IRS inquiry, precluded dismissal on statute-of-limitations grounds.

business & regulatoryprocedure

This case involves a former employee, Roy Ludwig, who sued NYNEX Service Co. and related defendants under ERISA to recover pension benefits and obtain a declaratory judgment on portability rights after transitioning from AT&T to NYNEX employment. Ludwig also brought state-law claims for promissory estoppel and breach of contract, alleging that NYNEX employees assured him he would not be treated as a portable employee, which would suspend his AT&T pension. The court granted the defendants' motion for summary judgment, dismissing all claims. The reasoning centered on the absence of any clear promise or representation regarding non-portability status, the inability of oral statements to modify ERISA plan terms, and the lack of reasonable reliance that could support estoppel claims under federal common law.

labor & employmentfederal power

This case is a consolidated securities fraud class action brought by purchasers of Harcourt Brace Jovanovich common stock against the company and its officers under federal securities laws, alleging reliance on misstatements during a defined class period. The court denied plaintiffs Rand and LeWinter's appeal of a magistrate judge's order compelling production of complaints, deposition transcripts from other securities or class actions, and brokerage statements showing their trading activity in 1988-1989, finding the order neither clearly erroneous nor contrary to law under Rule 72(a). The court also denied the motion by Rand, LeWinter, and Levy to withdraw as class representatives, determining that allowing withdrawal after fact discovery was nearly complete would prejudice the defendants. The ruling upheld the magistrate's broad discretion in discovery matters relevant to assessing the named plaintiffs' suitability as class representatives.

business & regulatoryprocedure

This consolidated multidistrict securities class action arose from public offerings of limited partnership units in two equipment leasing funds sponsored by McDonnell Douglas affiliates, where plaintiffs alleged that prospectuses and offering materials contained misrepresentations and omissions about the conservative nature of the investments, expected monthly distributions, return of capital, and the partnerships' acquisition of overvalued obsolete equipment. The actions asserted claims under Sections 11, 12(2), and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, plus common-law claims. The court approved the proposed settlement creating a $14,750,000 fund and providing for liquidation of the partnerships under Federal Rule of Civil Procedure 23(e), citing the substantial recovery (over 95% of invested capital net of fees) relative to litigation risks including potential defenses on disclosure adequacy and market factors. Plaintiffs' joint request for $4 million in attorney's fees and expense reimbursement was held in abeyance pending submission of contemporaneous time records, expense reports, and affidavits on perceived risk of loss at key litigation stages.

business & regulatoryprocedure

The case involved Virginia plaintiffs who purchased shares of Total Health Systems, Inc. stock through defendant broker D.H. Blair & Co. in 1987, following telephone recommendations from the broker's representative that the stock was suitable for a pension plan and carried a low risk of loss; after the stock declined sharply, plaintiffs alleged breach of contract, common law fraud, securities fraud under Rule 10b-5, and breach of fiduciary duty based on misrepresentations, omissions about the stock's inflated value and manipulation, and failure to disclose risks. The court denied the defendant's motion to dismiss the breach of contract and fiduciary duty counts under Fed.R.Civ.P. 12(b)(6), denied dismissal of the fraud counts as to claims of failure to disclose the stock's value, and granted dismissal of the fraud counts as to allegations of unsuitability, high risk of loss, and misrepresentations of low risk under Fed.R.Civ.P. 9(b), while granting leave to amend. The core reasoning was that the pleadings sufficiently stated claims meeting the elements of contract, fiduciary duty, and certain fraud omissions, but the fraud allegations concerning suitability and risk lacked the required particularity, with reliance presumed for material omissions under securities law precedents.

business & regulatoryproceduretorts & liability

This case involves an application by Maria Cruz, a witness in a federal drug and firearms prosecution against Jesus Lopez, seeking disclosure of her own grand jury testimony prior to testifying at a suppression hearing challenging the consent to a search. The court denied the application, holding that under Second Circuit precedent and Federal Rule of Criminal Procedure 6(e), a grand jury witness must demonstrate a particularized need for the transcripts that outweighs the interests in maintaining grand jury secrecy. The court reasoned that Cruz's desire to avoid potential inconsistencies in her testimony did not constitute such a need, and that countervailing factors including risks to an ongoing investigation supported nondisclosure.

criminal lawprocedure

The case involves David Bergstein, a Pennsylvania sales representative terminated by New York-based Jordache Enterprises in 1989 after developing retail accounts under a commission agreement. Bergstein sued for wrongful discharge, prima facie tort, breach of contract, intentional interference with contract, and violation of the Pennsylvania Commissioned Sales Representative Act. Applying Pennsylvania law under choice-of-law rules, the court granted dismissal of the wrongful discharge and prima facie tort claims but denied dismissal of the breach of contract, intentional interference, and Sales Representative Act claims, finding the allegations sufficient to state those causes of action.

labor & employmentbusiness & regulatorytorts & liability

This case involves securities litigation arising from Litton Industries' 1983 acquisition of Itek Corporation, where Litton alleged that insider trading by Dennis Levine and others, including leaks from Lehman Brothers employees, artificially inflated Itek's stock price, causing Litton to overpay for shares in open market purchases, a tender offer, and merger. The third amended complaint asserted claims under federal securities laws, RICO, and state law, seeking various damages including overpayment amounts, disgorgement of trading profits, and return of investment banking fees. The court denied Litton's motion for partial summary judgment, granted Lehman Brothers' cross-motion in part and denied it in part, denied Litton's motion to strike an affidavit, granted Litton's motion for entry of final judgment under Rule 54(b) on certain claims, denied a joint motion for final judgment, and denied Litton's motion to reverse a magistrate's ruling on compelling deposition testimony. These rulings were based on application of Federal Rules of Civil Procedure 54(b), 56, and 72(a), as well as 28 U.S.C. § 636, considering the procedural history and status of remaining claims against multiple defendants.

business & regulatoryprocedurecriminal law

This case involved a dispute between Fasolino Foods, an importer, its president and guarantor Antonio Fasolino, and bank BNL over credit facilities for letters of credit used to purchase Italian goods, including a proposed $4 million facility tied to sales to Kraft and an alleged separate $5 million non-Kraft facility. After a bench trial, the court ruled for BNL on all claims, holding Fasolino Foods and Fasolino jointly and severally liable for $1,289,579.93 plus interest and attorneys' fees under the letter of credit agreement and personal guaranty, while dismissing the complaint and denying any set-off. The core reasoning was that no $5 million non-Kraft credit agreement existed between the parties, the conditions for extending even the $4 million facility were never satisfied, and Fasolino Foods failed to prove by the required evidentiary standards that BNL had fraudulently or negligently misrepresented its intent to extend additional credit.

business & regulatorytorts & liability

In McNeil-P.P.C., Inc. v. Bristol-Myers Squibb Co., McNeil, maker of Tylenol, sued Bristol-Myers, maker of Excedrin, under the Lanham Act alleging that Bristol-Myers' television and promotional advertising claiming its Aspirin-Free Excedrin relieves pain better than Extra-Strength Tylenol was false and misleading. The court granted McNeil's request for injunctive relief, enjoining Bristol-Myers from making superiority claims or claims that scientific tests establish superiority. The decision rested on findings that Bristol-Myers' clinical studies purporting to show a statistically significant difference between the products were unreliable due to inadequate handling of carryover effects in the crossover design and failure to properly analyze all relevant data, such that the advertising claims were literally false.

business & regulatory

In this case, Steven Donahue and his family sued the United States under the Federal Tort Claims Act, alleging that DEA agents negligently directed them to travel to Lebanon as part of an undercover drug operation, resulting in their being taken hostage by militias and subjected to torture. The government moved to dismiss for lack of subject matter jurisdiction under the FTCA's foreign country exception and, alternatively, for summary judgment, arguing that Donahue had gone to Lebanon on his own initiative. The court denied both motions. It reasoned that the foreign country exception does not apply where the alleged negligent acts or omissions, such as planning and supervision, occurred within the United States, and that genuine issues of material fact existed regarding the government's involvement in directing the trip, precluding summary judgment.

criminal lawfederal powertorts & liability

The case was a wrongful death action filed in New York federal court by the estate of a New York resident killed in a 1989 boating accident at Walt Disney World in Florida against the operating company (WDW) and its parent. WDW moved to dismiss for lack of personal jurisdiction under New York CPLR 301 or, alternatively, to transfer venue to Florida. The court denied dismissal but granted transfer to the Middle District of Florida under 28 U.S.C. § 1406(a), finding that the plaintiff's allegations of solicitation and other activities did not meet the continuous and systematic contacts required to establish that WDW was doing business in New York, though the parent was subject to jurisdiction there.

proceduretorts & liability

The case involves Travelers Insurance seeking a declaration of rights under facultative reinsurance contracts with Buffalo Reinsurance and other reinsurers. After initially granting summary judgment to the Reinsurers on February 9, 1990, the court grants Travelers' motion for reargument under Local Civil Rule 3(j) and Fed.R.Civ.P. 59(e), vacates the judgment, and denies the motion for summary judgment. The core reasoning is that the court had overlooked deposition testimony from the reinsurers regarding industry custom and usage on the timing of claim notices transmitted through intermediaries, which raises a genuine issue of material fact as to whether Travelers' June 22, 1984 notice was given within a reasonable time.

business & regulatoryprocedure

The case involved Litton Industries suing Lehman Brothers, Dennis Levine, Bank Leu entities, and related individuals for insider trading in Itek Corporation stock based on nonpublic information about Litton's planned tender offer, which allegedly inflated the purchase price Litton paid. Litton sought damages and disgorgement of profits, fees, and commissions from the defendants' trades. The court granted in part and denied in part the Bank Leu defendants' motion for partial summary judgment on the disgorgement claim, reasoning that the relief sought was restitutionary in nature and did not support joint and several liability against non-trading defendants or those who did not receive the profits, while granting Litton's motion for leave to file a third amended complaint and denying its challenges to the magistrate's discovery and expert disclosure rulings.

business & regulatoryprocedure

The case involved Travelers Insurance seeking a declaratory judgment that its reinsurers, including Buffalo Reinsurance, were obligated to indemnify it under facultative reinsurance certificates for a share of losses paid on product liability claims from Koppers Company's defective roofing membranes. The policies treated the claims as a single occurrence per policy year, triggering reinsurance layers above $500,000. The reinsurance certificates required Travelers to provide prompt notice of claims that might involve the reinsurers, with some using a standard clause and others a New York Insurance Exchange form. The court granted the reinsurers' motion for summary judgment, holding that Travelers' delay in providing notice—from its awareness of the claims in early 1984 until June or December 1984—was unreasonable as a matter of law, breaching the notice provisions and relieving the reinsurers of any obligation.

business & regulatory

In Babigian v. Association of the Bar of the City of New York, an attorney sued various bar association officials, judges, and others under 42 U.S.C. § 1983 and state law, claiming violations of his constitutional rights stemming from attorney disciplinary proceedings that occurred between 1973 and 1975 related to his legal research business advertising. The United States District Court for the Southern District of New York granted the defendants' motions to dismiss the complaint. The court reasoned that the claims were barred by applicable statutes of limitations, that many defendants were protected by absolute immunity, and that other grounds such as lack of subject matter jurisdiction and personal jurisdiction also supported dismissal.

civil rightsprocedure

The case involved a trustee suing a book publisher and a plastic surgeon over the publication of a new multi-volume textbook on plastic surgery edited by the defendant doctor. The plaintiff claimed that the new work improperly used the name of the late Dr. Converse, whose earlier treatise the trusts controlled, and alleged violations of the Lanham Act through false designation of origin, copyright infringement, breach of contract, and related state-law claims. The court denied the motion for a preliminary injunction. It reasoned that the plaintiff had not shown irreparable harm or a likelihood of success on the merits, as there was no valid copyright ownership established, no enforceable contract breach, and insufficient evidence of false representations or other violations.

business & regulatorypropertyprocedure