Justia Banking Opinion Summaries

The case involves the surviving relatives of Quinn Lucas Schansman, a passenger on Malaysia Airlines Flight 17 (MH17), which was shot down over eastern Ukraine by a missile launched from territory controlled by the Russian Federation-backed Donetsk People’s Republic (DPR). The plaintiffs allege that Sberbank of Russia PJSC (Sberbank) provided material support to the DPR by facilitating money transfers from donors to the DPR via correspondent accounts in the United States, which they claim proximately caused the downing of MH17.The United States District Court for the Southern District of New York denied Sberbank’s motion to dismiss the second amended complaint on foreign sovereign immunity grounds. Sberbank argued that it was immune under the Foreign Sovereign Immunities Act (FSIA) and the Anti-Terrorism Act (ATA) after the Ministry of Finance of the Russian Federation acquired a majority share in Sberbank. The district court found that Sberbank was presumptively immune under the FSIA but that the commercial activity exception applied, as the claims were based on commercial activities carried out in the United States.The United States Court of Appeals for the Second Circuit reviewed the case and held that Sberbank is presumptively immune under the FSIA due to its majority ownership by the Russian Ministry of Finance. However, the court also held that the FSIA’s commercial activity exception applies to Sberbank’s conduct, as the alleged claims are based on commercial activities—facilitating money transfers—carried out in the United States. Additionally, the court held that the ATA’s immunity provisions apply to instrumentalities of foreign states and that the FSIA’s commercial activity exception applies equally to actions brought under the ATA. Consequently, the court affirmed the district court’s order and remanded the case for further proceedings. View "Schansman v. Sberbank" on Justia Law

Oladayo Oladokun was convicted in the United States District Court for the Southern District of New York after pleading guilty to conspiracy to commit bank fraud and conspiracy to commit money laundering. His involvement included directing others to open bank accounts to receive stolen or forged checks and launder money. He was sentenced to 125 months in prison followed by three years of supervised release.Oladokun appealed, challenging the district court's calculation of his offense level under the United States Sentencing Guidelines. He argued against the application of an eighteen-level enhancement based on the loss amount, a two-level enhancement for ten or more victims, and a four-level enhancement for his role in an offense involving five or more participants. Additionally, he claimed ineffective assistance of counsel for not requesting a Franks hearing to suppress evidence obtained from his residence.The United States Court of Appeals for the Second Circuit reviewed the case. The court found that the district court did not err in its factual basis for the Guidelines enhancements. It upheld the eighteen-level enhancement for the intended loss amount, the two-level enhancement for ten or more victims, and the four-level enhancement for Oladokun's role in the offense. The court also rejected Oladokun's ineffective assistance claim, noting that even if his counsel had been ineffective, Oladokun failed to show the requisite prejudice because the warrant application was supported by probable cause without the challenged evidence.The Second Circuit affirmed the judgment of the district court. View "United States v. Oladokun" on Justia Law

Plaintiff, individually and on behalf of others similarly situated, filed suit against defendant, alleging violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Plaintiff alleged that defendant failed to provide the "amount of the debt" within five days after an initial communication with a consumer in connection with the collection of a debt, as required by section 1692g. The court declined to hold that a mortgage foreclosure complaint was an initial communication with a consumer in connection with the collection debt. In this case, the court concluded that neither the Foreclosure Complaint nor the July Letter were initial communications giving rise to the requirements of section 1692g(a). The court held, however, that the August Letter was an initial communication in connection with the collection of a debt, and that the Payoff Statement attached to the August Letter did not adequately state the amount of the debt. The Payoff Statement included a "Total Amount Due," but that amount may have included unspecified "fees, costs, additional payments, and/or escrow disbursements" that were not yet due at the time the statement was issued. The court explained that a statement was incomplete where, as here, it omits information allowing the least sophisticated consumer to determine the minimum amount she owes at the time of the notice, what she will need to pay to resolve the debt at any given moment in the future, and an explanation of any fees and interest that will cause the balance to increase. Accordingly, the court vacated and remanded for further proceedings. View "Carlin v. Davidson Fink LLP" on Justia Law

Plaintiff filed a putative class action against Comenity to recover statutory damages for violations of the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. The district court concluded that plaintiff failed, as a matter of law, to demonstrate that four billing-rights disclosures made to her by Comenity in connection with plaintiff's opening of a credit card account violated the TILA. The court concluded that plaintiff failed to demonstrate the concrete injury required for standing to pursue two of her disclosure challenges and thus dismissed those two claims for lack of jurisdiction. The court concluded that, although plaintiff established standing to pursue the two remaining claims, those challenges fail as a matter of law. In this case, Comenity’s notice that certain TILA protections applied only to unsatisfactory credit card purchases that were not paid in full is substantially similar to Model Form G–3(A) and, therefore, cannot as a matter of law demonstrate a violation of 15 U.S.C. 1637(a)(7). Furthermore, because neither the TILA nor its implementing regulations require unsatisfactory purchases to be reported in writing, Comenity’s alleged failure to disclose such a requirement cannot support a section 1637(a)(7) claim. Accordingly, the court affirmed the district court's grant of summary judgment to Comenity on those TILA claims. The court also affirmed the district court's denial of her cross-motion for class certification as moot. View "Strubel v. Comenity Bank" on Justia Law

Claimants-Appellants appealed an award of summary judgment which forfeited to the United States various claimants’ interests in multiple properties, including a 36‐story office building located at 650 Fifth Avenue in Manhattan, real properties in Maryland, Texas, California, Virginia, and New York, and the contents of several bank accounts. Also at issue is the September 9, 2013 order denying a motion to suppress evidence seized from the Alavi Foundation’s and the 650 Fifth Avenue Company’s office. The court vacated the judgment as to Claimants Alavi Foundation and the 650 Fifth Ave. Co., of which Alavi is a 60% owner because there are material issues of fact as to whether the Alavi Foundation knew that Assa Corporation, its partner in the 650 Fifth Ave. Co. Partnership, continued after 1995, to be owned or controlled by Bank Melli Iran, which is itself owned or controlled by the Government of Iran, a designated threat to this nation’s national security; the district court erred in sua sponte considering and rejecting claimants’ possible statute of limitations defense without affording notice and a reasonable time to respond; in rejecting claimants’ motion to suppress evidence seized pursuant to a challenged warrant, the district court erred in ruling that claimants’ civil discovery obligations obviate the need for any Fourth Amendment analysis; and the district court erred in its alternative ruling that every item of unlawfully seized evidence would have been inevitably discovered. Accordingly, the court vacated and remanded for further proceedings. View "In re 650 Fifth Avenue and Related Properties" on Justia Law

In an antitrust class action brought on behalf of approximately 12 million merchants against Visa and Mastercard, as well as other various banks, plaintiffs alleged conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. After the parties agreed to a settlement releasing all claims, the district court certified two settlement-only classes and approved the settlement. Numerous objectors and opt‐out plaintiffs appealed and argued that the class action was improperly certified and that the settlement was unreasonable and inadequate. The court concluded that class members of the (b)(2) class were inadequately represented in violation of both FRCP 23(a)(4) and the Due Process Clause. The court also concluded that procedural deficiencies produced substantive shortcomings in this class action and the settlement. Consequently, the court concluded that the class action was improperly certified and the settlement was unreasonable and inadequate. The court vacated the district court's certification of the class action and reversed the approval of the settlement. The court remanded for further proceedings. View "In re Payment Card Interchange Fee and Merchant Discount Antitrust" on Justia Law

OneWest commenced a foreclosure action against defendant. The district court denied defendant's cross-motion to dismiss and granted OneWest's motion for summary judgment. The district court held in part that a national bank such as OneWest is a citizen only of the state in which its main office is located - not also of the state of its principal place of business - and that OneWest’s main office is indisputably in California. The court agreed with the district court and joined its sister circuits in holding that, for purposes of subject matter jurisdiction, a national bank is a citizen only of the state in which its main office is located. The court also concluded that OneWest had standing to foreclose based on LSA's assignment of all of its rights that FDIC previously had to defendant's loan as the conservator and receiver of IndyMac Federal. Accordingly, the court affirmed the judgment. View "OneWest Bank, N.A. v. Melina" on Justia Law

Plaintiff filed a qui tam action under the New York False Claims Act (NYFCA), N.Y. Stat Fin. Law 187 et seq., on behalf of the State and the City against Wells Fargo for fraudulent avoidance of New York tax obligations. The district court dismissed for failure to state a claim. The court concluded that, with no special state interest, and with no indication of congressional preference for state-court adjudication, the exercise of federal jurisdiction in this case is fully consistent with the ordinary division of labor between federal and state courts. The court also concluded that the complaint did not plausibly allege that the Wells Fargo trusts were not qualified to be treated as Real Estate Mortgage Investment Conduits (REMICs). Therefore, the complaint failed to state a claim on which relief could be granted under the NYFCA for any false statement or record affecting the trusts' entitlement to exemption from income tax under the New York tax laws. Accordingly, the court affirmed the judgment. View "State of New York ex rel. Jacobson v. Wells Fargo" on Justia Law

Plaintiffs filed numerous antitrust suits alleging that the Banks colluded to depress LIBOR by violating the rate‐setting rules, and that the payout associated with the various financial instruments was thus below what it would have been if the rate had been unmolested. After consolidation into a multi-district litigation (MDL), the district court dismissed the litigation in its entirety based on failure to plead antitrust injury. The court vacated the judgment on the ground that: (1) horizontal price‐fixing constitutes a per se antitrust violation; (2) a plaintiff alleging a per se antitrust violation need not separately plead harm to competition; and (3) a consumer who pays a higher price on account of horizontal price‐fixing suffers antitrust injury. The court remanded for further proceedings on the question of antitrust standing. Finally, the court rejected the Bank's alternative argument that no conspiracy has been adequately alleged. View "In re: LIBOR-Based Financial Instruments Antitrust Litig." on Justia Law

Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729(a)(1)(A), alleging that Wells Fargo defrauded the government within the meaning of the FCA by falsely certifying that they were in compliance with various banking laws and regulations when they borrowed money at favorable rates from the Federal Reserve’s discount window. The district court granted defendants’ motion to dismiss. The district court held that the banks’ certifications of compliance were too general to constitute legally false claims under the FCA and that relators had otherwise failed to allege their fraud claims with particularity. The court agreed, concluding that it has long recognized that the FCA was not designed to reach every kind of fraud practiced on the Government. Even assuming relators’ accusations of widespread fraud are true, they have not plausibly connected those accusations to express or implied false claims submitted to the government for payment, as required to collect the treble damages and other statutory penalties available under the FCA. Accordingly, the court affirmed the dismissal of the suit. View "Bishop v. Wells Fargo" on Justia Law