Latest 2 Cases: United States v. Silvia (Contracts), Jalbert v. Zurich Services Corp. (Insurance Law)

What Happens Now?

JOSEPH MARGULIES

Cornell law professor Joseph Margulies points out that in the face of the present COVID-19 pandemic, there seems to be general consensus nationwide that the federal government should intervene to mitigate the economic damage, even among those who very recently believed that social problems are better solved by the private sector than by the government. Margulies asks whether this new perspective will also evoke compassion. He points out that, given the expected duration of the fight against the novel coronavirus, $2,500 is not nearly sufficient for a struggling family of four who can no longer work. What will we do for the tens of millions of Americans facing disaster?

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United States v. Silvia

Docket: 18-1412

Opinion Date: March 20, 2020

Judge: David J. Barron

Areas of Law: Contracts, Real Estate & Property Law

The First Circuit affirmed the judgment of the district court denying Defendant's motion for a new trial, in which Defendant sought to vacate seventeen convictions that he received and that resulted from two separate trials, holding that the district court did not err in denying Defendant's motion for a new trial. Following the verdicts in his second trial, Defendant filed a motion for a new trial, alleging that he had received ineffective assistance of counsel at his first trial and that the district court erred in denying his motion in limine to preclude guilty verdicts in the first trial from being used to impeach him at his second trial. The district court treated the motion as challenging not only the nine counts for which Defendant had been found guilty in the second trial but also the eight counts for which he had been found guilty in the first trial but for which no judgment of conviction had yet been entered. The district court denied the motion for a new trial. The Supreme Court affirmed, holding that Defendant was not entitled to relief as to any of his arguments.

Jalbert v. Zurich Services Corp.

Docket: 18-2244

Opinion Date: March 20, 2020

Judge: Torruella

Areas of Law: Insurance Law, Securities Law

In this insurance dispute, the First Circuit affirmed the judgment of the district court granting summary judgment in favor of Defendants and dismissing Plaintiff's suit to recover unreimbursed defense costs that a former investment advisory firm (Firm) incurred in connection with a Securities and Exchange Commission (SEC) investigation of the Firm, holding that the Firm was not entitled to coverage. Plaintiff, in his capacity as trustee of a trust established during the bankruptcy proceedings of the Firm, filed this suit against Defendants, two of the Firm's excess insurers, seeking to recover defense costs that the Firm incurred in connection with the SEC investigation. The district court granted summary judgment for Defendants, concluding that an SEC order issued before the start of Defendants' coverage period initiated the investigation of the Firm, and this order triggered the policy's "deemed-made" clause, meaning that the claim was deemed first made prior to Defendants' policy taking effect. The First Circuit affirmed, holding (1) the SEC investigation was a claim that was deemed to have been made when the SEC order issued prior to the inception of Defendants' policies; and (2) accordingly and the claim was outside of the policies' coverage period, and Defendants were not obligated to reimburse the Firm for its defense costs.