Roeder v. J.P. Morgan Chase & Co. ( 2022 )

21-552
Roeder v. J.P. Morgan Chase & Co.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 25th day of January, two thousand twenty-two.
PRESENT:
SUSAN L. CARNEY,
STEVEN J. MENASHI,
MYRNA PÉREZ,
Circuit Judges.
_________________________________________
DAVID M. ROEDER, INDIVIDUALLY AND ON
BEHALF OF A CLASS OF SIMILARLY SITUATED
INDIVIDUALS, SUSANNE A. ROEDER,
INDIVIDUALLY AND ON BEHALF OF A CLASS OF
SIMILARLY SITUATED INDIVIDUALS, RODNEY
SICKMANN, INDIVIDUALLY AND ON BEHALF OF A
CLASS OF SIMILARLY SITUATED INDIVIDUALS, DON
COOKE, INDIVIDUALLY AND ON BEHALF OF A
CLASS OF SIMILARLY SITUATED INDIVIDUALS, MARK
SCHAEFFER, INDIVIDUALLY AND ON BEHALF OF A
CLASS OF SIMILARLY SITUATED INDIVIDUALS,
Plaintiffs-Appellants,
v. No. 21-552
J.P. MORGAN CHASE & CO., SUCCESSOR BY
MERGER TO CHASE MANHATTAN
CORPORATION, JPMORGAN CHASE BANK,
N.A., SUCCESSOR BY MERGER TO CHASE
MANHATTAN BANK,
Defendants-Appellees.
_________________________________________
FOR APPELLANTS: WALTER D. KELLEY, JR. (Scott A.
Gilmore, Brent W. Landau, on the brief),
Hausfeld LLP, Washington, D.C., and
Philadelphia, PA; V. Thomas Lankford,
Terrance G. Reed, on the brief, Lankford &
Reed, PLLC, Alexandria, VA.
FOR APPELLEES: ROMAN MARTINEZ (William J. Trach,
Michael F. Houlihan, James E. Brandt,
Samir Deger-Sen, on the brief), Latham &
Watkins LLP, Boston, MA, New York,
NY, and Washington, DC.
Appeal from a judgment of the United States District Court for the Southern District
of New York (Liman, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment entered on February 26, 2021, is
AFFIRMED.
Plaintiffs-Appellants, certain former U.S. government employees held hostage in Iran
for 444 days from 1979 to 1981, and their family members, appeal from the district court’s
dismissal of their lawsuit against Defendants-Appellees J.P. Morgan Chase & Co. and
JPMorgan Chase Bank, successors to Chase Manhattan Corporation and Chase Manhattan
Bank (defendants and their corporate predecessors collectively, “Chase”). Plaintiffs sued
Chase on behalf of a putative class, alleging that tortious behavior by former Chase
executives led to plaintiffs’ being taken captive in Iran and the purposeful prolongation of
their captivity until their release in early 1981. The district court concluded that plaintiffs’
claims against Chase were barred by the applicable statute of limitations. We assume the
parties’ familiarity with the underlying facts, procedural history, and arguments on appeal, to
which we refer only as necessary to explain our decision to affirm.
2
1. Diligence-discovery rule
Plaintiffs first submit that their claim under 42 U.S.C. § 1985 did not accrue until the
December 2019 publication by the New York Times of an article exposing details of Chase
executives’ conduct related to the admission of the Iranian Shah to the United States and the
ensuing hostage crisis beginning in November 1979. 1 To support their position that their
claims are timely, they invoke the federal diligence-discovery rule, under which “accrual
occurs when the plaintiff knows or has reason to know of the injury which is the basis of his
action.” 2 Pearl v. City of Long Beach, 296 F.3d 76, 80 (2d Cir. 2002). This argument, to which
plaintiffs adverted in passing in their complaint, was deemed abandoned by the district court
because plaintiffs failed to raise it in their brief opposing Chase’s motion to dismiss or
during oral argument on that motion in the district court. Plaintiffs now contend that the
complaint’s reference to the doctrine was sufficient to preserve the argument for appeal. We
disagree. The district court correctly treated the argument as abandoned and we therefore
treat it here as waived.
Even if not waived, however, plaintiffs’ argument regarding the diligence-discovery
rule would not persuade us that their action did not accrue until 2019. A federal claim
accrues “when the plaintiff knows, or should know, enough to protect himself by seeking
legal advice.” A.Q.C. ex rel. Castillo v. United States, 656 F.3d 135, 140 (2d Cir. 2011). To save
a claim from a statute of limitations defense in reliance on this delayed-accrual doctrine, the
plaintiff must have then “act[ed] with diligence,” including by consulting with counsel, to
“protect the client’s interest by investigating the case and determining whether, when, where,
and against whom to bring suit.” Id. Under this doctrine, it is generally the “discovery of the
injury, not discovery of the other elements of a claim, that starts the clock.” Levy v. BASF
Metals Ltd., 917 F.3d 106, 108 (2d Cir. 2019). Here, plaintiffs discovered their injury and
undoubtedly knew enough to seek legal advice regarding, for example, a claim for false
1 David D. Kirkpatrick, How a Chase Bank Chairman Helped the Deposed Shah of Iran Enter the U.S., N.Y. Times
(Dec. 29, 2019), https://www.nytimes.com/2019/12/29/world/middleeast/shah-iran-chase-papers.html.
2 In quotations from caselaw and the parties’ briefing, this order omits all quotation marks, alterations, and
citations, unless otherwise noted.
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imprisonment on the day they were released from captivity in January 1981. The statute of
limitations on their section 1985 claim thus accrued in 1981, and expired in January 1984,
when the applicable three-year statute of limitations ran.
2. Equitable tolling
Plaintiffs next argue that the federal equitable-tolling doctrine should apply to save
their section 1985 claim from a statute of limitations defense. Again, however, plaintiffs did
not advance this argument in the district court, where they instead relied exclusively on
equitable exceptions available under New York law. They therefore waived any argument
that the federal equitable-tolling exception should apply here.
3. Equitable estoppel
As to their claims under state law, plaintiffs acknowledge that the limitations period
began to run in January 1981, but they contend that the district court erred by declining to
construe their claims as timely under New York’s equitable-estoppel doctrine. Equitable
estoppel is an “extraordinary remedy.” Pulver v. Dougherty, 871 N.Y.S.2d 495, 496 (App. Div.
3d Dep’t 2009). It precludes a defendant who has taken “affirmative steps to prevent a
plaintiff” from bringing a timely claim from arguing that the plaintiff’s claim is barred by the
statute of limitations. Zumpano v. Quinn, 6 N.Y.3d 666, 674 (2006). To invoke equitable
estoppel under New York law, plaintiffs must show that (1) the defendants “induced [them]
by fraud, misrepresentations or deception to refrain from filing a timely action”; (2) plaintiffs
reasonably relied on the defendants’ misrepresentations; and (3) plaintiffs exercised “due
diligence” in bringing the action “within a reasonable period of time after the facts giving
rise to the . . . equitable estoppel claim have ceased to be operational.” Abbas v. Dixon, 480
F.3d 636, 642 (2d Cir. 2007); see Zumpano, 6 N.Y.3d at 674.
Even assuming that, through misrepresentations, Chase induced them for nearly four
decades to delay filing this action, plaintiffs fail to allege any facts demonstrating their due
diligence during that time. Resisting this conclusion, plaintiffs focus particularly on their
allegations regarding Chase’s hidden efforts to delay their release until the day of President
Reagan’s inauguration. Significant information about Chase’s involvement in the events,
4
however, entered the public record long before publication of the 2019 New York Times
article. In 1981, an article in the New York Times detailed the advocacy of Chase executive
David Rockefeller on behalf of the Iranian Shah (whose admittance to the United States
provoked the hostage crisis): it described Rockefeller and Henry Kissinger as “two of the
Shah’s staunchest supporters”; stated that Chase, as Rockefeller’s bank, had a “relationship”
with the Shah’s family; and relayed that Rockefeller “showed himself to be a true friend to
the Shah.” 3 App. 143–44. It also noted “suggestions that [Rockefeller] acted solely out of
concern for Chase Manhattan’s profits.” Id. at 144. Moreover, books published in 2004 and
2007 further revealed Chase executives’ alleged lobbying to “forestall” the hostages’
release—even going so far as to suggest that the lobbying efforts, partly in coordination with
the Reagan presidential campaign, aimed “to keep American hostages imprisoned until
Reagan’s inauguration.” Peter Dale Scott, The Road to 9/11, at 90–92 (2007); see Robert Parry,
Secrecy & Privilege 137 (2004). Plaintiffs’ suggestion that it would have been impossible before
2019 for them to uncover the actions of the Chase representatives is therefore implausible.
Because plaintiffs fail to demonstrate that they exercised the due diligence that New
York’s equitable-estoppel exception requires, the district court correctly concluded that
Chase should not be estopped from asserting the statute of limitations as a defense.
* * *
We have considered plaintiffs’ remaining arguments and find in them no basis for
reversal. The judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
3 Terence Smith, Why Carter Admitted the Shah, N.Y. Times (May 17, 1981),
https://www.nytimes.com/1981/05/17/magazine/why-carter-admitted-the-shah.html.
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