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THE TRIAL JUDGE’S FAILURE TO ACT ON DEFENSE COUNSEL’S OBJECTION TO T-SHIRTS REMEMBERING THE MURDER VICTIM WAS ERROR; UNDER THE FACTS, THE ERROR WAS HARMLESS.

The Court of Appeals, in a full-fledged opinion by Judge Fahey, with a three-judge concurring opinion, determined defendant was not deprived of a fair trial by the trial judge’s failure to take any action when defense counsel informed him family members were wearing T-shirts remembering the murder victim. The Court of Appeals found the trial judge’s failure to act was error. But, under the facts, the error did not deprive defendant of a fair trial. The fact that the trial judge noticed family members had worn the T-shirts before the day when defense counsel objected did not bring up those prior occurrences on appeal. Defense counsel did not elicit a ruling from the trial judge (by moving for a mistrial) based on the pror occurrences, therefore only the wearing of the T-shirts on the day counsel objected was before the court:

We conclude … that although spectator displays depicting a deceased victim should be prohibited in the courtroom during trial, and although the trial court here erred in refusing to intervene upon defense counsel’s request, the error is subject to harmless error analysis. Defendant contends that the deprivation of his right to a fair trial can never be considered harmless. We agree only insofar as there can be no harmless error analysis if an appellate court concludes that spectator misconduct was so egregious and the trial court’s response so inadequate that the defendant was deprived of a fair trial. Where “there has been such error of a trial court . . . or such other wrong as to have operated to deny any individual defendant his fundamental right to a fair trial, the reviewing court must reverse the conviction and grant a new trial,” without regard to whether the proof of guilt was overwhelming or whether “the errors contributed to the defendant’s conviction”… . Here, however, the spectator conduct was not so egregious that defendant was deprived of a fair trial.

A per se rule of reversal is inappropriate in the context of spectator displays of a deceased victim’s image because such displays may vary widely. For example, the display could range from a small button worn on a spectator’s clothing to a life-size image. A trial court’s refusal to intervene in every such display upon defense counsel’s objection is error. However, not every such display requires the drastic remedy of a mistrial, or an appellate reversal. The trial court or the appellate court, respectively, must make that determination based on the unique circumstances of each case.

Under the particular circumstances of this case, we conclude that the trial court’s error in failing to instruct the spectators to remove or cover the shirts upon defense counsel’s objection is harmless. Consequently, defendant was not deprived of a fair trial. People v Nelson, 2016 NY Slip Op 02554, CtApp 4-5-16

CRIMINAL LAW (THE TRIAL JUDGE’S FAILURE TO ACT ON DEFENSE COUNSEL’S OBJECTION TO T-SHIRTS REMEMBERING THE MURDER VICTIM WAS ERROR; UNDER THE FACTS, THE ERROR WAS HARMLESS)/SPECTATOR DISPLAYS (CRIMINAL LAW, THE TRIAL JUDGE’S FAILURE TO ACT ON DEFENSE COUNSEL’S OBJECTION TO T-SHIRTS REMEMBERING THE MURDER VICTIM WAS ERROR; UNDER THE FACTS, THE ERROR WAS HARMLESS)/APPEALS (PRESERATION OF ERROR, CRIMINAL LAW, DEFENSE COUNSEL’S FAILURE TO ELICIT A RULING ON INSTANCES OF SPECTATOR DISPLAYS ON DAYS PRIOR TO THE DAY WHEN COUNSEL OBJECTED, THE PRIOR INSTANCES WERE NOT BEFORE THE COURT ON APPEAL)/PRESERVATION OF ERROR (CRIMINAL LAW, DEFENSE COUNSEL’S FAILURE TO ELICIT A RULING ON INSTANCES OF SPECTATOR DISPLAYS ON DAYS PRIOR TO THE DAY WHEN COUNSEL OBJECTED, THE PRIOR INSTANCES WERE NOT BEFORE THE COURT ON APPEAL)

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THE DEFENSE HAD SEVERAL OPPORTUNITIES TO DISCOVER THE JUDGE’S SENTENCE-PROMISE MISTAKE, THEREFORE THE PRESERVATION REQUIREMENT APPLIED TO DEFENDANT’S CHALLENGE TO THE VALIDITY OF HIS GUILTY PLEA.

The Court of Appeals, in a full-fledged opinion by Judge Abdus-Salaam, over a two-judge dissenting opinion, reversing the Appellate Division, determined defendant’s failure to preserve his challenge to the validity of his guilty plea precluded review in the Court of Appeals. The matter was remitted to the Appellate Division which could entertain the appeal under its interest of justice jurisdiction. The opinion attempts to clarify when a defendant “lacks a reasonable opportunity to object to a fundamental defect in the plea” such that the preservation requirement does not apply. Here the sentencing court made an initial mistake indicating defendant’s sentence would be three years, where the minimum sentence was six years. Defendant argued that his guilty plea was induced by the judge’s mistake. The Court of Appeals found there were many subsequent opportunities to discover the mistake and preserve the error. The defendant violated the terms of his release pending sentencing, an Outley hearing was held, and a six-year sentence, described as an “enhanced sentence,” was ultimately imposed:

… [T]he defense had multiple opportunities to preserve defendant’s current challenge to his plea and seek clarification of the matter, as such opportunities arose from, inter alia: the court’s comment at the plea proceeding about its uncertainty of the legality of the promised sentencing options; the court’s statements at the plea proceeding about the determinative nature of defendant’s predicate felony offender status; the numerous adjournments, the Outley hearing and the post-hearing court appearance that transpired between the plea and sentencing proceedings, which could have allowed counsel and defendant to inquire further into the legality of the promised sentencing options and defendant’s understanding of the plea; and the court’s comments at sentencing, which offered an opening for counsel to confirm the legality of the court’s sentencing options and its effect on the validity of the plea. By failing to seize upon these opportunities to object or seek additional pertinent information, defense counsel failed to preserve defendant’s claim for appellate review … . People v Williams, 2016 NY Slip Op 02551, CtApp 4-5-16

CRIMINAL LAW (PRESERVATION OF ERROR, THE DEFENSE HAD SEVERAL OPPORTUNITIES TO DISCOVER THE JUDGE’S SENTENCE-PROMISE MISTAKE, THEREFORE THE PRESERVATION REQUIREMENT APPLIED TO DEFENDANT’S CHALLENGE TO THE VALIDITY OF HIS GUILTY PLEA)/APPEALS (PRESERVATION OF ERROR, THE DEFENSE HAD SEVERAL OPPORTUNITIES TO DISCOVER THE JUDGE’S SENTENCE-PROMISE MISTAKE, THEREFORE THE PRESERVATION REQUIREMENT APPLIED TO DEFENDANT’S CHALLENGE TO THE VALIDITY OF HIS GUILTY PLEA)/PLEA BARGAIN (PRESERVATION OF ERROR, THE DEFENSE HAD SEVERAL OPPORTUNITIES TO DISCOVER THE JUDGE’S SENTENCE-PROMISE MISTAKE, THEREFORE THE PRESERVATION REQUIREMENT APPLIED TO DEFENDANT’S CHALLENGE TO THE VALIDITY OF HIS GUILTY PLEA)/PRESERVATION OF ERROR (THE DEFENSE HAD SEVERAL OPPORTUNITIES TO DISCOVER THE JUDGE’S SENTENCE-PROMISE MISTAKE, THEREFORE THE PRESERVATION REQUIREMENT APPLIED TO DEFENDANT’S CHALLENGE TO THE VALIDITY OF HIS GUILTY PLEA)

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1899 DEED COVENANT TO PROVIDE FREE ELECTRIC POWER TO DEFENDANT’S PREMISES RAN WITH THE LAND; HOWEVER THE IMPLIED DURATIONAL LIMITS ON THE COVENANT HAVE BEEN SURPASSED RENDERING IT UNENFORCEABLE.

The Third Department, reversing Supreme Court, determined that a covenant in an 1899 deed to provide free power to the property now occupied by defendant Allied Healthcare Product (AHP) was no longer enforceable. The covenant was precipitated by the building of a hydroelectric dam which cut off the water supply upon which the mills on the property now owned by AHP relied. The Third Department determined the covenant met all the requirements for running with the land. But the court went on to find that implied durational limits on the covenant have been surpassed:

While the general requisites of an affirmative covenant running with the land have been met, that does not end the matter. “The affirmative covenant is disfavored in the law because of the fear that this type of obligation imposes an 'undue restriction on alienation or an onerous burden in perpetuity'” … . The power covenant has no express limitation on its duration, and “it may 'fall[] prey to the criticism that it creates a burden in perpetuity, and purports to bind all future owners, regardless of the use to which the land is put'” … . AHP rightly points out that the power covenant may be implicitly “conditioned upon the continued existence of” a hydroelectric facility capable of supplying the required power to ongoing manufacturing at the mills … . Suffice it to say, those conditions have only been intermittently met as historical matter and are not met now. The hydroelectric power facility was not in operation from 1994 to 2012 and, while AHP attempts to minimize the fact, there was not constant manufacturing activity at the mills over the course of the last century. The record further shows that the hydroelectric facility, for both technical and legal reasons, cannot supply consistent or usable electricity directly to the mills. To find that the power covenant remains enforceable under these circumstances would render it an “onerous burden in perpetuity” disfavored by the law, as it would reach beyond any implied durational requirements and overlook the very real changes in the hydroelectric facility and the manner for distributing electricity that defeat the original purpose of the power covenant … . This result cannot be countenanced and, as such, the power covenant is unenforceable. Niagara Mohawk Power Corp. v Allied Healthcare Prods., Inc., 2016 NY Slip Op 02504, 3rd Dept 3-31-16

REAL PROPERTY (1899 DEED COVENANT TO PROVIDE FREE ELECTRIC POWER TO DEFENDANT'S PREMISES RAN WITH THE LAND; HOWEVER THE IMPLIED DURATIONAL LIMITS ON THE COVENANT HAVE BEEN SURPASSED RENDERING IT UNENFORCEABLE)/DEEDS (1899 DEED COVENANT TO PROVIDE FREE ELECTRIC POWER TO DEFENDANT'S PREMISES RAN WITH THE LAND; HOWEVER THE IMPLIED DURATIONAL LIMITS ON THE COVENANT HAVE BEEN SURPASSED RENDERING IT UNENFORCEABLE)/COVENANT RUNNING WITH THE LAND (1899 DEED COVENANT TO PROVIDE FREE ELECTRIC POWER TO DEFENDANT'S PREMISES RAN WITH THE LAND; HOWEVER THE IMPLIED DURATIONAL LIMITS ON THE COVENANT HAVE BEEN SURPASSED RENDERING IT UNENFORCEABLE)

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QUESTION OF FACT WHETHER SNOW-REMOVAL CONTRACTOR CREATED THE ICE CONDITION WHERE PLAINTIFF FELL.

The Third Department, in this slip and fall case, determined Inland, the owner of the shopping mall where plaintiff fell on ice, raised a question of fact whether the snow removal contractor, Hayes Paving, created the dangerous condition (i.e., launched an instrument of harm) by piling ice near a building which subsequently melted and refroze:

… [W]e conclude that a question of fact exists as to whether Hayes Paving negligently created a dangerous condition by piling chunks of ice against the Staples store building which, thereafter, melted and refroze into the patch of ice upon which plaintiff allegedly slipped … . Thus, Hayes Paving was not entitled to dismissal of Inland's third-party claim for contribution. Hannigan v Staples, Inc., 2016 NY Slip Op 02506, 3rd Dept 3-31-16

NEGLIGENCE (QUESTION OF FACT WHETHER SNOW-REMOVAL CONTRACTOR CREATED THE ICE CONDITION WHERE PLAINTIFF FELL)/SLIP AND FALL (QUESTION OF FACT WHETHER SNOW-REMOVAL CONTRACTOR CREATED THE ICE CONDITION WHERE PLAINTIFF FELL)/CONTRACT LAW (QUESTION OF FACT WHETHER SNOW-REMOVAL CONTRACTOR CREATED THE ICE CONDITION WHERE PLAINTIFF FELL)

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QUESTION OF FACT WHETHER GOVERNMENTAL OR PROPRIETARY ACTS WERE INVOLVED IN CONNECTION WITH A BURST WATER MAIN; QUESTION OF FACT WHETHER ROAD-WORK CONTRACTOR LIABLE IN TORT FOR LAUNCHING AN INSTRUMENT OF HARM.

The Third Depatment, in a full-fledged opinion by Justice Garry, determined questions of fact had been raised about governmental immunity and tort liability arising from contract in a property-damage case arising from road renovation work. Village officials and the contractor hired to do the road work (Merritt) decided to allow what was thought to be a small water leak to remain unaddressed temporarily. The leak was apparently created when a fire hydrant was removed to accommodate the road work. At some point the water main burst, causing flooding and a mudslide which damaged plaintiffs' property. The questions before the court were whether the village should be allowed to amend its answer with a governmental-immunity affirmative defense, and whether an indemnification cross-claim against the contractor (Merritt) by the village should have been allowed. The Third Department answered both questions in the affirmative. Although maintenance of a water system for fire protection is a governmental function to which immunity applies, maintenance of the water system generally is a proprietary function, to which immunity would not apply. With respect to Merritt, although tort liability does not usually arise from a contract, here there was a question of fact whether Merritt “launched an instrument of harm” which would trigger liability in tort. With respect to whether governmental immunity applied, the court explained:

A threshold inquiry in determining if a municipality is entitled to immunity in a negligence action is “whether the municipal entity was engaged in a proprietary function or acted in a governmental capacity at the time the claim arose” … . Where the alleged negligence arose out of proprietary, rather than governmental acts, no immunity will attach and a municipality will generally be liable to the same extent as a private actor … . The maintenance of a municipal water system to provide water for the private use of residents has been deemed to be a proprietary function … . However, where the alleged negligence stems from municipal efforts to protect the safety of the public by “aggregating and supplying water for the extinguishment of fires,” it is engaged in a government function entitled to immunity … . These established rules can present challenges as applied to modern municipal water systems that are used to provide water to both homes and hydrants … . In such cases, where a municipality can be seen to be serving dual governmental and proprietary roles, we must look to “the specific act or omission out of which the injury is claimed to have arisen and the capacity in which that act or failure to act occurred” … . Billera v Merritt Constr., Inc., 2016 NY Slip Op 02503, 3rd Dept 3-31-16

MUNCIPAL LAW (QUESTION OF FACT WHETHER GOVERNMENTAL OR PROPRIETARY ACTS WERE INVOLVED IN CONNECTION WITH A BURST WATER MAIN)/GOVERNMENTAL IMMUNITY (QUESTION OF FACT WHETHER GOVERNMENTAL OR PROPRIETARY ACTS WERE INVOLVED IN CONNECTION WITH A BURST WATER MAIN)/PROPRIETARY FUNCTION (QUESTION OF FACT WHETHER GOVERNMENTAL OR PROPRIETARY ACTS WERE INVOLVED IN CONNECTION WITH A BURST WATER MAIN)/NEGLIGENCE (MUNICIPAL LAW, QUESTION OF FACT WHETHER GOVERNMENTAL OR PROPRIETARY ACTS WERE INVOLVED IN CONNECTION WITH A BURST WATER MAIN)/TORT LIABILITY ARISING FROM CONTRACT (QUESTION OF FACT WHETHER ROAD-WORK CONTRACTOR LIABLE IN TORT FOR LAUNCHING AN INSTRUMENT OF HARM)/CONTRACT LAW (QUESTION OF FACT WHETHER ROAD-WORK CONTRACTOR LIABLE IN TORT FOR LAUNCHING AN INSTRUMENT OF HARM)/NEGLIGENCE  (QUESTION OF FACT WHETHER ROAD-WORK CONTRACTOR LIABLE IN TORT FOR LAUNCHING AN INSTRUMENT OF HARM)

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12 TO 18 INCH FALL SUPPORTED SUMMARY JUDGMENT IN FAVOR OF PLAINTIFF UNDER LABOR LAW 240 (1).

The First Department determined a fall of 12 to 18 inches sufficed to award plaintiff summary judgment Labor Law 240 (1) action:

Plaintiff was injured when, while carrying wood planks, he fell through an opening in a latticework rebar deck to a plywood form that was 12 to 18 inches below. “There is no bright-line minimum height differential that determines whether an elevation hazard exists” … , and here, the record establishes that plaintiff's fall was the result of exposure to an elevation related hazard … . Brown v 44 St. Dev., LLC, 2016 NY Slip Op 02527, 1st Dept 3-31-16

LABOR LAW (12 TO 18 INCH FALL SUPPORTED SUMMARY JUDGMENT IN FAVOR OF PLAINTIFF UNDER LABOR LAW 240 (1))

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FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT.

In another lawsuit stemming from the collapse of mortgage-backed securities, the First Department determined fraud causes of action by Aozora Bank against Deutsche Bank were properly dismissed as untimely. Investigations, including a Congressional investigation, into the relevant actions of Deutsche Bank were well-known more than two years before the suit was brought:

The parties do not dispute that plaintiff's fraud causes of action were not timely under New York's six-year limitations period and, to be timely, must have been commenced within two years from the time plaintiff discovered the fraud, or with reasonable diligence could have discovered it (CPLR 213[8]). * * *

… [O]ne of the most significant sources of public information putting plaintiff on notice of its fraud claims is the Senate Report and its associated emails, which actually form the centerpiece of plaintiff's complaint. In fact, the Senate Report contains a 45-page section on Deutsche Bank entitled “Running the CDO Machine: Case Study of Deutsche Bank.” Taken with all the other information available in the public domain, the Senate Report is more than sufficient to have placed Aozora on inquiry notice of possible fraud by April 2011 at the latest … . Aozora Bank, Ltd. v Deutsche Bank Sec. Inc., 2016 NY Slip Op 02511, 1st Dept 3-31-16

FRAUD (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)/SECURITIES (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)/MORTGAGE-BACKED SECURITIES (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)/CIVIL PROCEDURE (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)

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ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT.

The Third Department, reversing Supreme Court, determined the lawsuit against the employer, Ross, by three former employees should have been dismissed. The allegations made by the three employees were not sufficient to make out a prima facie case of a hostile work environment due to sexual harassment:

While Ross' alleged conduct was certainly offensive and grossly unprofessional, those aspects of it that were sexually harassing were not severe or pervasive enough to render any plaintiff's work environment objectively hostile and abusive as these terms are construed under the Human Rights Law.

In order to establish the existence of a sexually hostile work environment, an individual plaintiff must show that his or her workplace was “'permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of [his or her] employment and create an abusive working environment'” … . All of the circumstances must be considered, including “the frequency of the discriminatory conduct; its severity; whether it [was] physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interfere[d] with [the plaintiff's] work performance” … . Moreover, the workplace must be both subjectively and objectively hostile. That is, a plaintiff must not only perceive that the conditions of his or her employment were altered because of discriminatory conduct, but the conduct also must have created an environment that a reasonable person would find to be hostile or abusive … . Pawson v Ross, 2016 NY Slip Op 02502, 3rd Dept 3-31-16

EMPLOYMENT LAW (ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)/HUMAN RIGHTS LAW (ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)/HOSTILE WORK ENVIRONMENT (ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)/SEXUAL HARASSMENT (EMPLOYMENT LAW, ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)

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TRIAL JUDGE GAVE TOO MUCH ADVICE TO THE PROSECUTOR ON THE ADMISSION AND USE OF EVIDENCE, NEW TRIAL ORDERED.

The Third Department reversed defendant's conviction because the trial judge gave excessive procedural advice to the prosecutor (ADA). During several sidebars, the judge explained to the ADA how to lay a proper foundation for the admission of evidence and how to use evidence to refresh a witness's recollection. The judge's well-intentioned assistance was deemed to have created the perception the prosecution received a tactical advantage:

During the course of the trial, the ADA in question demonstrated difficulty in laying the proper foundation for the admission into evidence of certain photographs and bank records and in utilizing a particular document to refresh a witness's recollection. In response, County Court conducted various sidebars, during the course of which the court, among other things, explained the nature of defense counsel's objections, outlined the questions that the ADA needed to ask of the testifying witnesses, referred the ADA to a certain evidentiary treatise and afforded him a recess in order to consult and review the appropriate section thereof. Without further belaboring the point, suffice it to say that our review of the record confirms what County Court itself acknowledged — namely, that in attempting to “explain[] some of the law” and in an effort to avoid portraying defense counsel as “obstructionist,” it “explained one thing too many, in all fairness.” As County Court's assistance in this regard — although well-intentioned — arguably created the perception that the People were receiving an unfair tactical advantage, we are persuaded that this matter should be remitted for a new trial … . People v Kocsis, 2016 NY Slip Op 02480, 3rd Dept 3-31-16

CRIMINAL LAW (TRIAL JUDGE GAVE TOO MUCH ADVICE TO THE PROSECUTOR ON THE ADMISSION AND USE OF EVIDENCE, NEW TRIAL ORDERED)/JUDGES (CRIMINAL LAW, TRIAL JUDGE GAVE TOO MUCH ADVICE TO THE PROSECUTOR ON THE ADMISSION AND USE OF EVIDENCE, NEW TRIAL ORDERED)

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DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED.

The First Department determined a derivative suit against the board of directors of JP Morgan Chase stemming from subprime mortgage-backed securities was properly dismissed for failure to demonstrate the futility of a presuit demand upon the board. The decision includes particularly clear explanations of what must be alleged to sufficiently demonstrate futility under Delaware law pursuant to the “Aronson” and “Rales” tests. With regard to one of the two “Aronson” tests, the court wrote:

Plaintiffs contend that the board's action, including the adoption of the January 2007 resolution delegating authority to a management committee, was not a valid exercise of business judgment. However, this factual assertion examines the board's course of action in hindsight and hinges on certain warning signs that plaintiff alleges the board failed to heed, including some losses that reverted back to JPMorgan's balance sheet by September 2008. Delaware law presumes that in making a business decision the board of directors acts in good faith and in the honest belief that the action is taken in the best interests of the company … . In order to satisfy the second prong of the Aronson test, plaintiffs are required to plead particularized facts sufficient to raise a reason to doubt that [1] the action was taken honestly and in good faith or [2] the board was adequately informed in making the decision … . These facts do not rebut the presumption of regularity of the board's decision making process … . Although risky, the conduct plaintiff challenges, the board's authorization of the securitization and sale of investments, involves “legal business decisions that were firmly within management's judgment to pursue” … . The fact that investors later sued or made repurchase demands does not raise a reasonable doubt that the decision to engage in such transactions was not a valid exercise of business judgment … . Asbestos Workers Phila. Pension Fund v Bell, 2016 NY Slip Op 02510, 1st Dept 3-31-16

CORPORATION LAW (DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED)/MORTGAGE-BACKED SECURITIES (DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED)/SHAREHOLDERS' DERIVATIVE ACTION (DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED)

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