Nike counterfeiting case: Chinese banks spared $150 million in punishment by the 2nd Circuit

The 2nd U.S. Circuit Court of Appeals concluded Monday that six Chinese banks were not liable for a potential $150 million in sanctions for failing to freeze the assets of hundreds of Nike counterfeiters.

U.S. Circuit Judge Michael Park wrote for a unanimous three-judge panel that Next Investments LLC, which bought the rights to the $1.8 billion default award from Nike Inc, had failed to seek enforcement of the freeze against the banks for nearly six years before asking the court to hold them in contempt.

A request for comment from Next Investments and its attorney, Robert Weigel of Gibson Dunn & Crutcher, was not immediately returned.

Five of the banks were delighted with the verdict, according to Sandy Weisburst of Quinn Emanuel Urquhart & Sullivan, who represented them.
In 2015, Nike and its Converse Inc subsidiary obtained a default judgment in federal court in Manhattan against over 600 Chinese businesses and people. Judge Shira Scheindlin of the United States District Court for the District of Columbia also issued orders prohibiting the defendants and “any people working in concert or in cooperation” with them from moving their assets.

In 2017, Nike sold their portion of the judgment to Next Investments LLC, a Houston-based subsidiary of litigation finance firm Tenor Capital Management LP. The government then subpoenaed six Chinese banks with New York offices where the counterfeiters allegedly maintained accounts, and launched a contempt action against them in 2019, asking $150 million in compensatory damages for failing to comply with the asset restraining orders.

Next’s application was denied by Senior U.S. District Judge Colleen McMahon in 2020, in part because to New York’s distinct entity law, which recognizes U.S. branches of foreign banks as independent legal entities and prevents the court from enforcing the hold on assets in China.

On appeal, Next contended that the separate entity rule shouldn’t be used as a “get-out-of-jail free card” for counterfeiting and other illegal activities.
Park declined to hold the banks in contempt or implement the injunction, joined by Senior Circuit Judge Jon Newman and Circuit Judge Steven Menashi.

Nike and Next had “explicitly disclaimed” that they were seeking to enforce the orders against four of the banks, Park noted, in addition to not seeking to compel the banks to comply with the orders for over six years.

The court was unable to rule on the banks’ suggested arguments that the orders did not apply as a result of the delay, and Park said that the contempt motion was a “improper vehicle for addressing the banks’ important legal defenses” for the first time.

Park also declined to hold the banks in contempt, citing a “reasonable basis for dispute” about whether the directives applied to them under the separate entity rule.

“We don’t have to decide whether the separate entity rule precludes enforcement,” Park explained. “It’s enough that Next has failed to define a legal theory that clearly binds the Chinese subsidiaries to asset limitations.”

The ruling “reaffirmed our conviction that our client had done nothing unlawful and the case against it should have never been brought,” said Adam Hoffinger of Greenberg Traurig, who represented the Agricultural Bank of China.

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Ex-U.S. citizens cannot be deported because of a drug conviction, according to the 3rd Circuit.

A US appeals court ruled on Tuesday that an Indian man cannot be deported because of a drug conviction that occurred before he was stripped of his US citizenship for making false claims on his naturalization application.

Baljinder Singh was not a “alien” eligible for deportation under the Immigration and Nationality Act while still a U.S. citizen, according to a three-judge panel of the 3rd U.S. Circuit Court of Appeals, and his fraudulent application did not nullify his citizenship retroactively.

Singh’s appeal for judicial review of a Board of Immigration Appeals ruling ordering his deportation was granted, and the board was ordered to revisit his case.

Singh’s lawyer, John Leschak of Leschak & Associates, did not immediately respond to a request for comment. Neither did the United States Department of Justice.

Singh landed from India without documents at San Francisco International Airport in 1991, according to the verdict. He was released on bond after telling officials his identity was Davinder Singh.

According to the judgement, Singh failed to appear for a hearing in 1992 and was ordered deported. He subsequently applied for asylum under the name Baljinder Singh and married a U.S. citizen while his case was pending.

Singh fraudulently claimed in an application for lawful permanent resident status that he had entered the United States without inspection in 1991 and neglected to reveal that he had used a different name.

According to the ruling, he was granted lawful resident status in 1998 and became a naturalized citizen in 2006. In 2018, the authorities found his lies and cancelled his naturalization.
Meanwhile, Singh pleaded guilty in 2011 to conspiring to distribute heroin, MDMA, and marijuana.

The Department of Homeland Security charged Singh with removability after he lost his citizenship due to his narcotics conviction. Any alien convicted of an aggravated felony is subject to deportation, according to the INA, which defines “alien” as “any individual who is not a citizen or national of the United States.”

Singh was ordered deported by an immigration judge, and the Board of Immigration Appeals upheld the decision last year.

Singh filed an appeal, and the 3rd Circuit ruled on Tuesday that he was not a “alien” at the time of his conviction in 2011, and thus could not be deported for his drug-related felony.
The court agreed with Singh that his case was similar to Costello v. INS, in which the Supreme Court of the United States ruled in 1964 that a provision identical to the INA did not apply to a naturalized citizen who was convicted of a crime.

The government said that Costello did not apply because it concerned a legal remedy known as “court advice against deportation,” which Congress has since repealed and which Singh never had access to. The court, on the other hand, was not convinced.

Circuit Judge Kent Jordan wrote, “The government’s position needs considerable suspension of disbelief.” “After all, the statute is specifically directed at ‘aliens,’ and a citizen is not an alien by definition.”

Circuit Judge Paul Matey of the Eastern District of Pennsylvania and U.S. District Judge Marilyn Horan of the Western District of Pennsylvania sat on the panel by designation.

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The Michigan mask restrictions did not infringe on religious schools’ constitutional rights, according to the 6th Circuit.

Statewide mask mandates, according to parents of children at a private Catholic school in Michigan, violate their constitutional rights. The United States Court of Appeals for the Sixth Circuit disagrees.

Attorneys for the Lansing-based Resurrection School and its parents filed a complaint in October, requesting that a federal judge impose a temporary restraining order prohibiting the applicability of the mask rule to private schools. One of their reasons was that requiring religious school kids to wear masks infringes on their religious liberty. However, anyone “engaging in a religious service” was exempt from the mask requirement.
The restraining order motion was denied, then appealed to the United States Sixth Circuit Court of Appeals, where it was denied a second time last week.

The Michigan Department of Health and Human Services (MDHHS) mask mandate was found to be “connected to a legitimate compelling governmental purpose” and was applied to all students for the benefit of public health, according to the Court of Appeals majority ruling.

Judge Karen N. Moore wrote in the majority court judgment, “We conclude that the MDHHS Orders do not violate the Free Exercise Clause because the MDHHS Orders are impartial and of universal applicability and satisfy rational-basis analysis.”

Former MDHHS Health Director Robert Gordon, Ingham County Health Officer Linda Vail, state Attorney General Dana Nessel, and Ingham County Prosecutor Carol Simeon are all named in the complaint.

“This judgement supports our position that MDHHS was fully within its authority to implement a mask mandate as children returned to school last school year to help restrict the spread of COVID-19,” Nessel stated. “Enacting a mask mandate in the manner in which MDHHS did so does not violate one’s rights-it is a measure through which we can better protect public health,” says the Sixth Circuit.

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2nd Circuit: Harassment claims against Fox News belong in federal court

Former Fox News host Andrea Tantaros’ claim that her bid to keep sexual harassment allegations against the network out of arbitration belongs in state court was rejected by a federal appeals court on Friday, saying that a federal judge must first decide whether the claims can be arbitrated under federal law.

Tantaros’ harassment allegations against late Fox News CEO Roger Ailes and other persons are brought under New York state law, according to a 2-1 decision by the 2nd U.S. Circuit Court of Appeals.

In the aftermath of the #MeToo movement, a 2019 New York law prohibits mandatory arbitration of sexual harassment and discrimination cases, “save where federal law prohibits it.” According to the 2nd Circuit majority, this compels federal courts to evaluate whether a dispute must be arbitrated under the FAA from the start.

According to Tantaros’ lawyer, Bruce Fein, the ruling effectively prevents New York state courts from implementing a 2019 statute intended to assist discrimination victims.

In an email, Fein said that employers accused of harassment and retaliation “will be able to remove cases involving all forms of discrimination to federal court as a tactic to forum shop, causing costly delay and undue burden on victims and denying plaintiffs their rightful choice of forum to have their claims heard.”

“After five years of litigation and seven different sets of lawyers, Andrea Tantaros has yet to progress her bogus claims,” Fox News said in a statement. We are going to file a motion to dismiss her case.” Kirkland & Ellis and Jones Day represent the New York-based network.

Tantaros alleged in a 2016 state court lawsuit that she was fired from Fox News in punishment for rejecting Ailes’ advances and complaining to top executives at the network, including former co-president William Shine. She claimed that Ailes had made repeated comments about her beauty and that the network “runs like a sex-fueled, Playboy Mansion-type cult.”

Fox News and Roger Ailes, who died in 2017, have both denied wrongdoing.

The complaint was transferred to arbitration by a state judge in 2017, citing an arbitration agreement Tantaros had signed with the network.

Tantaros filed a petition in state court in 2019 after New York’s mandatory arbitration prohibition went into force, seeking an injunction to prevent her claims from being arbitrated further.

The lawsuit was taken to federal court by Fox News.

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Fifth Circuit upholds Texas abortion ban

The Fifth Circuit Court of Appeals upheld a 2017 Texas statute prohibiting D&E (dilation and evacuation) or dismemberment abortions in the second trimester.

With bipartisan backing, the Texas legislature passed the Texas Dismemberment Abortion Ban in 2017, making D&Es a felony and prohibiting them from being done unless in an emergency. Whole Women’s Health, several Planned Parenthood groups, several doctors, and others sued in the United States District Court for the Western District of Texas after the bill was approved but before it went into effect.

The district court decided in their favor, halting the law’s implementation. The office of Texas Attorney General Ken Paxton filed an appeal, and in October, a three-judge panel of the Fifth Circuit upheld the lower court’s decision.

Paxton then requested that the matter be reviewed by the entire 17-member court, which they agreed to do in January. Nine judges on the New Orleans-based appeals court ruled in favor of the Texas Act, five against it, and three recused themselves eight months later in an en banc review.

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Appeals Court Affirms MSNBC Win in “Russian Propaganda” Suit

Rachel Maddow’s statement regarding Trump-friendly One America News isn’t actionable, according to the 9th U.S. Circuit Court of Appeals. Herring Networks, the owner of One America News Network, filed a libel complaint against MSNBC and Rachel Maddow (OAN). The 9th U.S. Circuit Court of Appeals affirmed a trial court’s decision that Maddow’s comments about the Trump-friendly network aren’t actionable on Tuesday.

The lawsuit was filed after The Daily Beast published an article titled “Trump’s New Favorite Channel Employs Kremlin-Paid Journalist” on July 22, 2019. “We literally found today that that publication the president is supporting shares staff with the Kremlin,” Maddow said later that night. What do you mean?… In this scenario, America’s most slavishly pro-Trump right-wing news organization is literally funded Russian propaganda. The Russian government pays their on-air U.S. politics correspondent to produce propaganda for that government.”

U.S. appeals court revives lawsuit over Washington County gun club restrictions

An appeals court said Tuesday that a federal judge should not have dismissed a legal challenge to township zoning restrictions that limited activities at a shooting range in Washington County and confined “sportsman’s clubs” to nonprofit companies.

The case was resurrected by the 3rd U.S. Circuit Court of Appeals, which ordered the district judge to gather evidence, stating that Second Amendment rights necessitate a more thorough investigation of the facts than had previously transpired in the case.

The verdict concerns William Drummond’s ambitions to reopen a shuttered gun range and run the Greater Pittsburgh Gun Club on a 265-acre plot of land in Robinson Township. The three-judge panel unanimously agreed that the township’s attempt to limit what happens on the land may violate the right to keep and bear arms guaranteed by the Constitution.

Eighth Circuit rules on Agricultural Gag laws

Two “Ag-Gag” statutes, one from Arkansas and the other from Iowa, have received decisions from the Eighth Circuit Court of Appeals.

Whistleblowers and animal advocates are barred from accessing the inner workings of agricultural processing plants under ag-gag legislation. Slaughterhouses and concentrated animal feeding operations, or CAFOs, are two examples.

Whistleblowers and investigators could face civil penalties under Arkansas law. The statute is illegal because it stifles free speech, according to the appeals court. However, the majority of an Iowa legislation threatening criminal penalties for people who misrepresent their job to get access to the facility was upheld by the court.

Ridgewood Health Care Center, Inc. v. National Labor Relations Board

A federal appeals court ruled on Friday that an Alabama nursing home operator was not compelled to rehire and bargain with its predecessors’ unionized employees before making changes to working conditions, overturning the National Labor Relations Board’s decision.

There was no evidence to support the NLRB’s judgment that Ridgewood Health Care Center Inc’s reluctance to hire four of its predecessor’s unionized employees was motivated by anti-union animus, according to a panel of the 11th U.S. Circuit Court of Appeals.

Ridgewood was also exempt from bargaining with a United Steel Workers local since just 49 of the 101 workers it employed had previously worked at the home, falling just short of the requisite majority to qualify as a “successor” under federal labor law, according to the court.

As a result, the panel found it was not illegal for Ridgewood to impose new labor terms without bargaining.


On Friday, a federal appeals court reinstated a law that requires private insurers that handle federally sponsored Medicare programs to repay potentially billions of dollars in overpayments resulting from inaccurate diagnoses.

UnitedHealth Group Inc (UNH.N) was dealt a blow by a panel of the D.C. Circuit Court of Appeals in Washington, which had successfully challenged the rule in a lower court.

UnitedHealth did not respond to a request for comment right away. The US Department of Health and Human Services, which oversees Medicare, the federal health-care program for seniors and individuals with disabilities, did not respond.

The 2014 rule applies to Medicare Advantage plans, which are funded by the Department of Health and Human Services but administered by commercial insurers such as UnitedHealth.