EFT in Temporary Possession of Bank Not Garnishable Under FDCPA, Plus Bankruptcy and Civil Rights Matters

Export-Import Bank of the U.S. v. Asia Pulp & Paper Co., No. 09-2254, involved an action to collect a $144 million judgment against defendants pursuant to the Federal Debt Collection Procedures Act (FDCPA).  The Second Circuit affirmed the district court's order quashing plaintiff's writs of garnishment, holding that an electronic funds transfer (EFT) temporarily in the possession of an intermediary bank in New York may not be garnished under the FDCPA to satisfy judgment debts owed by the originator or intended beneficiary of that EFT.

In Zakrzewska v. The New School, No. 09-0611, a sexual harassment action, following the New York Court of Appeals' answer to a certified question, the court of appeals affirmed the denial of summary judgment to defendant, holding that the affirmative defense to employer liability articulated in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), did not apply to sexual harassment and retaliation claims under section 8-107 of the New York City Administrative Code.

Amore v. Novarro, No. 08-3150, concerned a 42 U.S.C. section 1983 action alleging a false arrest.  The court of appeals reversed the denial of summary judgment based on qualified immunity, on the ground that the district court erred in deciding that, despite the fact that a state loitering statute was still widely published as though it remained valid, it would have been clear to a reasonable officer in defendant's position that making the arrest was unlawful.

In re: Delta Airlines, Inc., No. 08-5002, involved creditors' appeal from the bankruptcy court's order upholding debtor's objections to their claims under tax indemnification agreements.  The court of appeals vacated the order, on the grounds that 1) the bankruptcy court's construction of "pay" as that term was used in an agreement at issue nullified debtor's obligation to pay the "Owner Participant" under the agreement upon the occurrence most likely to call its provisions into play - the debtor's insolvency; and 2) the bankruptcy court effectively nullified the agreements by stripping them of their ability to protect the Owner Participant in the event of debtor's default.

Related Resources

• Federal Debt Collection Procedure Act
• Full Text of Export-Import Bank of the U.S. v. Asia Pulp & Paper Co., No. 09-2254
• Full Text of Zakrzewska v. The New School, No. 09-0611
• Full Text of Amore v. Novarro, No. 08-3150
• Full Text of In re: Delta Airlines, Inc., No. 08-5002