Tag Archives: Civil opinions

New opinion — Third Circuit rules for former governor in malicious-prosecution appeal

Zimmerman v. Corbett — civil — reversal — McKee

A staffer for a PA state legislator was prosecuted for obstructing an investigation into whether Democratic staffers were doing campaign work on state time. After the charges against him were dismissed, he brought a malicious prosecution suit against various defendants, including Tom Corbett (the Republican state AG at the time of the prosecution, and later the governor). The district court denied the defendant’s motion to dismiss, but today the Third Circuit reversed, holding that there was probable cause to prosecute.

Joining McKee were Cowen and Fuentes. Arguing counsel were Joshua Autry of Lavery Faherty for the appellants and Devon Jacob of Mechanicsburg for the appellee.

New opinion — IDEA plaintiffs who got a hearing can get attorneys’ fees

H.E. v. Walter D. Palmer Leadership Learning Partners Charter School — disability — reversal — Krause

Parents of children with disabilities filed an administrative complaint against a charter school for allegedly failing to meet its obligations under the Individuals with Disabilities Education Act. The administrative hearing officer dismissed their complaint, so the parents sued in federal court, asking the court to vacate the hearing officer’s dismissal and remand for a hearing. The district court did as the plaintiffs asked, but it refused to award them attorneys’ fees as the prevailing party. Today, the Third Circuit reversed, holding that the fee denial was an appealable final order and that the plaintiffs’ purely procedural victory sufficed to entitle them attorneys’ fees under the IDEA.

Joining Krause were Ambro and Scirica. The case was decided without oral argument.

New opinion — Third Circuit reverses movie theater’s ADA win [updated]

McGann v. Cinemark USA — disability — reversal — Restrepo

A blind and deaf man asked a movie theater to provide him with a tactile interpreter so that he could experience a movie there. If you think that sounds silly or contrived, here’s some context:

McGann has experienced movies in theaters for many
years. He enjoys attending movies in person for a number of
reasons; among others, it affords him the opportunity to
participate in discussions about the movies with his friends and
family. Before his wife passed away in 2001, she would
provide him with tactile interpretation during movies in the
theater. Since then, McGann has attended movies at a local
Carmike Cinema. Carmike provided him with tactile
interpretation services for movie presentations at his request.

In November 2014, McGann became interested in
experiencing the movie Gone Girl (Twentieth Century Fox
Film Corp. 2014), after hearing about it from his family and
reading about it online using Braille. After he contacted his
customary Carmike Cinema to inquire about attending a
presentation of the movie, he learned it was no longer playing
there. So he sought another theater in which to experience it.

When the theater refused to provide him with a tactile interpreter, he sued it under the Americans with Disabilities Act. After a bench trial, the district court ruled in the theater’s favor based on its view that movie-theater tactile interpreters were not covered by the ADA. Today, the Third Circuit reversed. Significantly, the court did not reach the theater’s defense that having to provide tactile interpreters would cause it an undue burden, instead remanding that issue for the district court to consider first.

Time to fire up the “Federal judges are activists! Plaintiffs are snowflakes!” internet hate machine? I hope not.

UPDATE: Right on cue, National Review posts, “A Contender for the Silliest Decision of the Year Award.” The author, who says he views the ADA as unconstitutional, laments that “activist judges will keep pushing it further and further.

Joining Restrepo were Smith and McKee. Arguing counsel were Carol Horowitz of the Disability Rights Network of Pennsylvania for the patron, M. Brett Burns of Hunton & Williams for the theater, and Bonnie Robin-Vargeer for the DOJ as amicus.

New opinion — Third Circuit upholds rejection of price-fixing suit

Valspar Corp. v. DuPont — antitrust — affirmance — Hardiman

A split Third Circuit panel today affirmed a grant of summary judgment in an antitrust price-fixing case. The majority opinion’s introduction:

This appeal involves an alleged conspiracy to fix prices in the titanium dioxide industry in violation of Section 1 of the Sherman Act. Appellant Valspar, a purchaser of titanium dioxide, claimed Appellee DuPont conspired with other titanium dioxide suppliers to fix prices. Valspar argued that the price-fixing agreement was made manifest primarily by thirtyone parallel price increase announcements issued by the suppliers. DuPont countered that the parallel pricing was not the product of an agreement, but rather the natural consequence of the marketplace. Specifically, DuPont posited that because the market for titanium dioxide is an oligopoly, the price movement was caused by “conscious parallelism”—an economic theory that explains oligopolists will naturally follow a competitor’s price increase in the hopes that each firm’s profits will increase. The District Court agreed with DuPont and granted its motion for summary judgment. We will affirm.

The dissenting judge, interestingly, was a district judge sitting by designation. And he dissented with vigor! He accuses the majority of adopting a “new approach that appears to shut the door on a district court’s ability to accept reasonable inferences in any case involving oligopolists” and that “misses by a mile an essential truth of actual courtroom litigation: that circumstantial evidence is competent, valid, and vital evidence in almost every conspiracy trial, civil or criminal.” Thirty-two pages long.

Joining Hardiman was Krause; dissenting was Stengel EDPA by designation. Arguing counsel were James Lockhart of Minnesota for the appellants, Shari Lahlou of Crowell & Moring for the appellee.

New opinions, including a hot-button voting case with some harsh words for the appellant

American Civil Rights Union v. Philadelphia City Commissioners — civil / voting — affirmance — McKee

Back in May I posted here about a Third Circuit oral argument that got off to a bad start when the lawyer raised his voice in an unsuccessful attempt to talk over one of the judges. (You’d expect a former law school dean and Scotus clerk to know better.)

Interrupting a judge, it turns out, was not the path to victory. Today, the Third Circuit affirmed a district court’s rejection of a conservative group’s challenge to Philadelphia’s alleged failure to remove persons convicted of a felony from its voter rolls.

And it turns out interrupting a judge was the least of counsel’s advocacy missteps. The opinion tartly observed that one of the appellant’s arguments “not only mangles the statute beyond recognition, it also misrepresents the non-precedential case it relies on.” Later: “This is exactly the kind of statutory contortion that led the District Court to … threaten[] to impose sanctions for blatant misrepresentation of the statute.” Pow.

Joining McKee were Vanaskie and Rendell. Arguing counsel were John Eastman of the Center for Constitutional Jurisprudence for the appellant and Kelly Diffily for the city.

 

Alimbaev v. AG — immigration — reversal — Krause

Here’s a fascinating introduction:

This disconcerting case, before our Court for the second time, has a lengthy procedural history marked by conflict between the Board of Immigrations Appeals (BIA) and the Immigration Judge (IJ) and fueled by troubling allegations that Petitioner, an Uzbek national, relished watching violent terroristic videos, while apparently harboring anti-American sympathies. The issue on appeal, however, is whether the BIA correctly applied the clear error standard of review, as required, when reviewing the IJ’s factfinding in this case—an inquiry that highlights the role of faithful adherence to applicable standards of review in preserving the rule of law, safeguarding the impartiality of our adjudicatory processes, and ensuring that fairness and objectivity are not usurped by emotion, regardless of the nature of the allegations. Because we conclude that the BIA misapplied the clear error standard when reversing the IJ’s finding that Petitioner’s testimony was credible, we will grant the petition for review of the BIA’s removal order, vacate the denial of Petitioner’s applications for adjustment of status, withholding of removal, and protection under the Convention Against Torture (CAT), and remand once more to the BIA.

The opinion features a significant discussion of clear-error review by the Board of Immigration Appeals and how it applies to immigration judges’ credibility findings. The opinion emphasized the Third Circuit’s obligation to “carefully” scrutinize the BIA’s application of clear-error review in accepting or rejecting IJ factfinding.

Joining Krause were Jordan and Stearns D.Mass by designation. Arguing counsel were Lawrence Rudnick of Rudnick Immigration Group for the petitioner and Daniel Smulow for the government.

 

Christopher Columbus LLC v. Bocchino — admiralty — reversal — Stengel EDPA

Precedential opinions by judges sitting by designation in the Third Circuit are pretty unusual. It’s also fairly uncommon for district judges to sit by designation over CA3 appeals from their own district — reviewing a colleague’s work, that is. But both occurred here.

Also unusual? An appeal that “arise[s] out of a drunken brawl which erupted among passengers who were enjoying a cruise.” The issue on appeal was whether the dispute fell under maritime jurisdiction, and the court held that it did and vacated the district court’s dismissal.

Joining Stengel EDPA by designation were Hardiman and Krause. Arguing counsel were Daniel Wooster of Palmer Biezup for the appellant and Stanley Gruber of Freedman & Lorry for the appellee.

New opinion — student-athletes showing concussion signs have a right to be protected

Mann v. Palmerton Area School Dist. — civil rights — affirmance — Vanaskie

Sheldon Mann, a 17-year-old student who played high school football, suffered a hard hit during a team practice. One of his teammates said it was one of the bigger hits he’d ever seen, another said Sheldon seemed dizzy and was stumbling around the field. But the coach at the time (he’s still the coach) “claim[ed] he did not see the hit,” asked Sheldon if he was all right and then told him to continue practicing. Not long after, Sheldon sustained a second big hit. This time he was removed, but it was too late: he suffered a traumatic brain injury.

Sheldon’s parents sued, alleging that the coach violated Sheldon’s constitutional right to bodily integrity by telling him to stay in after the first hit and that the school district failed to train the coach and protect the player. The district court granted summary judgment in favor of the defendants, and today the Third Circuit affirmed.

The Third Circuit held that a student-athlete at a state school who is showing signs of a concussion has a constitutional right to be protected from further violent hits. This is a major ruling that I expect to have national significance. But the court went to hold that this right was not clearly established at the time of Sheldon’s injury in 2011. The court also denied the Monell failure-to-train claim because there was no evidence of a pattern of recurring head injuries in that school’s football program, nor that the coaching staff acted deliberately.

Joining Vanaskie were McKee and Rendell. Arguing counsel were Howard Bashman for the parents and Thomas Specht of Marshall Dennehey for the coach and the district.

UPDATE: coverage by Matt Miller on Pennlive here.

 

New opinion — Third Circuit narrows overtime-pay protection

Souryavong v. Lackawanna County — civil — affirmance — Vanaskie

The introduction:

This employee-overtime appeal raises questions as to the nature of the evidence that is sufficient to create a jury question on the purported “willfulness” of an employer’s nonpayment of overtime. The question matters because a finding of willfulness expands the limitations period for claims under the Fair Labor Standards Act (“FLSA”), in effect permitting a plaintiff to receive a larger award. Here only the willfulness question was contested—Appellee Lackawanna County conceded the basic overtime violations—and at trial Appellants Michael Souryavong and Nelson Rolon presented some evidence on the question but not enough to avoid a directed verdict in the County’s favor. We find no error in the District Court’s decision because the evidence presented did not suggest the County was subjectively aware of the FLSA problem at the time of the violations, at least with respect to Souryavong and Rolon. Additionally, Souryavong and Rolon challenge the District Court’s calculation of attorney’s fees, but we find that decision appropriate as well. We will affirm.

On the willfulness issue, the opinion also affirmed for two alternative reasons. First, it said that “an FLSA violation [a willful one, I believe the opinion means] must have a degree of egregiousness” lacking in this case. Second, it said that a “willful violation” requires evidence that the employer knew it was violating the FLSA specifically — awareness of “wage and hour issues” caused by its widespread non-payment of overtime for work over 40 hours and acknowledgement that the employees could file a grievance for back overtime wasn’t enough.

Both alternative rationales, but especially the second, strike me as significant new retreats from the statute’s language.

Joining Vanaskie were Ambro and Restrepo. Arguing counsel were Cynthia Pollick of the Employment Law Firm for the employees and Harry Coleman for the county.

New opinion — Third Circuit upholds rejection of radiation victim’s suit

Estate of Ware v. Hospital of the Univ. of Penn. — civil — affirmance — Ambro

Judge Ambro is a national treasure, and here is the conclusion to his opinion today:

The facts of Boyer’s action are tragic: her husband, a 47-year-old researcher whose life’s work was studying the effects of radiation on biological organisms, died from a rare form of brain cancer. But as often happens in the law, this case provides us little opportunity to contemplate Ware’s suffering from his illness or his family’s suffering from his loss. Instead, our review is confined to bloodless questions of statutory interpretation and appropriate management of litigation. On these issues we find no fault with the District Court’s holdings. The Price-Anderson Act governed Boyer’s negligence claims, and the Court did not abuse its discretion in denying her request to withdraw those claims and to remand her others. We thus affirm its judgment.

Joining Ambro were Restrepo and Cowen. Arguing counsel were Aaron Freiwald of Layser & Freiwald (nice website!) for the plaintiff and Donald Jose of Jose & Associates and Theresa Sachs of Marshall Dennehey for the university.

A new ERISA opinion

Dowling v. Pension Plan for Salaried Employees of Union Pacific — ERISA — affirmance — Vanaskie

“Retirement plans,” today’s opinion begins, “can be complex documents … with numerous peculiarities,” and who would disagree? The litigation arising from disputes over those plans can be complex and peculiar too. Today, a divided Third Circuit panel affirmed a district court ruling in favor of the employer, emphasizing the deference courts owe to plan administrators.

Joining Vanaskie was Hardiman; Ambro cogently dissented, describing the majority’s reasoning as “imaginative,” “innovative,” and “dubious.” Arguing counsel were Kelly Watkins of Norris McLaughlin for the employee and David Fryman of Ballard Spahr for the employer.

4 new opinions, including two immigration reversals

Uddin v. AG — immigration — reversal — Rendell

The Third Circuit today granted an immigration petition to review, holding that the BIA erred when it found a Bangladesh citizen ineligible for withholding of removal. The BIA had deemed him ineligible because he was a member of a major political party, some of whose members had committed terrorist acts.

The Third Circuit held that membership in a party whose members had committed terrorism wasn’t enough — the BIA had to find that the terrorist acts were authorized by party leaders. Analogizing to American politics, the court observed, “If a single member of the Democratic or Republican Party committed a terrorist act, we would not impute terrorist status to the entire group, absent some showing that party leadership authorized the act.”

The court joined the reasoning of a 2008 Seventh Circuit opinion authored by just-retired Judge Posner. Not surprisingly, today’s opinion quotes Posner at length and identifies him by name.

Joining Rendell were Greenaway and Shwartz; Greenaway also concurred separately. Arguing counsel were Visuvanathan Rudrakumaran of NY for the petitioner and Daniel Smulow for the government.

UPDATE: The Court issued an amended opinion on September 25. The opinion link has been updated; the change is identified in this order.

 

Mateo v. AG — immigration — reversal — Vanaskie

The Third Circuit held that a non-citizen’s Pennsylvania conviction for robbery of a motor vehicle did not support his removal. The removal order was premised on the vehicle-robbery conviction being a crime of violence, but the Third Circuit held that the crime-of-violence standard was unconstitutionally vague. The court joined three other circuits on this point, splitting with the Fifth Circuit. The court further held that the vagueness standard is no lower in immigration cases than it is in criminal cases.

Joining Vanaskie were McKee and Jordan. Arguing counsel were Tracey Hubbard of Scranton for the petitioner and Matthew Connelly for the government.

 

US v. Hodge — criminal — reversal in part — Chagares

After a Virgin Islands man used a gun to rob an armored vehicle, the government charged him with a separate Virgin Islands gun count for each of three crimes he committed during the offense. Today, the Third Circuit vacated two of those non-federal convictions on double jeopardy grounds (but it rejected the analogous argument as to two federal gun counts). The court granted relief even though the defendant received a single sentence for all three counts, similar to the federal practice of imposing concurrent sentences. The court rejected the defendant’s many other challenges.

Joining Chagares were Jordan and Hardiman. Arguing counsel were Richard Della Fera of Florida for the defendant and David White for the government.

 

Moody v. Atlantic City Bd. of Education — employment discrimination — reversal — Shwartz

An employee sued her employer, alleging that a fellow employee had sexually harassed her and the employer retaliated against her when she complained.

On the harassment claim, the employer’s liability turned on whether the alleged harasser was her supervisor even though he didn’t hire and couldn’t fire her. The plaintiff was a substitute janitor who worked at different sites; the alleged harasser had the power to decide if she got work at one of those sites, and in a recent several-month period 70% of her work had been at that site. The district court granted summary judgment to the employer based its conclusion that the alleged harasser was not her supervisor.

Today, a divided Third Circuit panel reversed, holding that the plaintiff’s allegations were sufficient to survive summary judgment on whether the alleged harasser was her supevisor. Judge Rendell dissented on this point, arguing that in light of a recent Supreme Court case the majority was “simply incorrect.”

On the retaliation claim, the panel was unanimous that reversal was required, holding that her allegation that her hours were reduced right after she complained was sufficient.

Joining Shwartz was Greenaway; Rendell dissented in part. Arguing counsel were Samuel Dion of Dion & Goldberger for the plaintiff and Rachel Conte of Riley and Rile for the employer.

New opinion — Third Circuit rejects company’s effort to force arbitration of rewards-card dispute

White v. Sunoco — civil / arbitration — affirmance — Chagares

Sunoco, like many corporations, offers incentives to consumers who sign up for a rewards-program credit card. Sunoco doesn’t issue the credit card; a bank (here, Citibank) issues the card. Citibank sets terms and conditions, including that, in a dispute between the cardholder and the bank, the bank can force binding arbitration.

Here, a cardholder alleged that rewards-program benefits were fraudulent, and he sued Sunoco, not Citibank. Sunoco moved to compel arbitration based on the terms set by Citibank. The district court denied arbitration.

Today, in what strikes me as a major consumer-arbitration-law ruling, a divided Third Circuit panel affirmed, applying state law to conclude that Sunoco could not force arbitration under the credit-card terms issued by Citibank. The court rejected Sunoco’s arguments based on equitable estoppel and based on the arbitration clause’s inclusion of claims “made … against anyone connected with us.”

Joining Chagares was Restrepo. Roth dissented in an opinion that uses the phrase “basic contract law” twice and the adverb “clearly” five times. Arguing counsel were Seamus Duffy of Drinker Biddle for Sunoco and David Stanoch of Golomb & Honik for the consumer.

New opinion — Third Circuit remands for labor arbitration

Employer Trustees of Western PA Teamsters v. Union Trustees of Western PA Teamsters — labor — reversal — Vanaskie

When labor negotiations deadlocked over employee benefits, one side sought appointment of an arbitrator to break the stalemate. The district court denied the request, but today the Third Circuit reversed, holding that the disputes fell within the parties’ agreement to arbitrate.

Joining Vanaskie were Ambro and Scirica. Arguing counsel were Robert Prorok of Cohen & Grigsby for  the appellants and  Joseph Pass of Jubelirer Pass for the appellees.

4 more new opinions

This post covers the precedential opinions issued yesterday, August 30.

Borrell v. Bloomsburg Univ. — civil rights — reversal — Hardiman

A nurse-anesthetist student was dismissed from her program for refusing to take a drug test required by the private hospital where she was doing a clinical program. The person who decided to dismiss her from the university program was the director of the program, a joint employee of the hospital and the university. The student sued under 1983, and the district court granted her summary judgment, concluding that the hospital and the program director were state actors. After a damages trial, the jury awarded her $415,000 in damages and $1.1 million in punitives which the judge reduced to $250,000 and $750,000.

The Third Circuit reversed, holding that the hospital and the program director weren’t state actors with respect to the decision to dismiss her from the program. The court also held that a university professor who had a role in the dismissal was entitled to qualified immunity.

Joining Hardiman were Fisher in full and Roth in part; Roth concurred in the judgment in part. Arguing counsel were Barry Dyller of the Dyller Law Firm for the student, Jaime Tuite of Buchanan Ingersoll for the hospital and program director, and John Knorr III of the state AG’s office for the professor.

 

US v. Penn — criminal — affirmance — Smith

The Third Circuit held that a district court did not abuse its discretion when, after opening statements, it removed and replaced a juror with a scheduled surgery.

Joining Smith were Fuentes and Starks D.Del. by designation. The case was decided without oral argument.

 

Williams v. Pa. Human Relation’s Comm. — employment discrimination — affirmance — Fuentes

The introduction, minus citations:

Cheryl Williams, an African-American woman,
claims that she was subjected to constant harassment at the
Pennsylvania Human Relations Commission (the
“Commission”) by her supervisors, Joseph Retort and Adam
Stalczynski. As a result of this treatment, she alleges she faced a hostile work environment and was ultimately constructively
discharged from her position as a Human Relations
Representative. She then filed this action against the
Commission under Title VII of the Civil Rights Act of 1964
(“Title VII”), seeking damages for the loss of her job and the
harm sustained to her physical and emotional health. She also
included claims against her former supervisors, Retort and
Stalczynski, claiming that they violated her federal rights under
Title VII and the Americans with Disabilities Act (“ADA”)
and they are therefore liable for damages under 42 U.S.C.
§ 1983. On defendants’ motion, the District Court granted
summary judgment in favor of all defendants.

In this case, we address for the first time whether
violations of Title VII and the ADA may be brought through
§ 1983. In light of the comprehensive administrative scheme
established by Title VII and the ADA, we conclude that these
claims, standing alone, may not be asserted under § 1983. And
because we also agree with the District Court that Plaintiff
Cheryl Williams presents no triable issues of fact on her
Title VII claims against the Commission, we will affirm.

Joining Fuentes were Smith and Nygaard. The case was decided without oral argument.

 

Delaware Riverkeeper Network v. Secretary, Dept. of Environmental Protection — environmental — affirmance — Smith

The Third Circuit rejected another effort by an environmental group to stop an interstate gas pipeline. This time the court also held that the state agency’s decision was final.

Joining Smith were Nygaard and Fuentes. Arguing counsel were Aaron Stemplewicz for the Riverkeepers, Joseph Cigan III for the state, and John Stoviak of Saul Ewing for the intervenor pipeline company

Five new opinions from the end-of-summer opinion surge

This post covers the precedential opinions issued August 29.

Parker v.Montgomery Co.  Corr. Facility — prisoner civil rights — denial — Smith

I detest the Prisoner Litigation Reform Act. This opinion magnifies the shabby unfairness of the PLRA, so I detest its result and I hope (with no optimism) that the Supreme Court or Congress fixes it.

While I believe all that, I also believe this: this opinion is superb, a near-perfect model of clarity and restraint. It is a crisp counter-punch to the cynics and the “politicians in robes” federal-judge-bashers. I deplore its holding as a policy matter, but, given controlling law, its ruling is probably correct and without a doubt reasonable.

Under the PLRA’s three-strikes rule, an indigent prisoner who has filed three actions or appeals that were deemed “frivolous, malicious, or fail[] to state a claim upon which relief may be granted” no longer qualifies to proceed in forma pauperis. That means that, unlike all other poor litigants, they must pre-pay the full filing fees. The current fee for one Third Circuit appeal is $505, or over 2600 hours of income for a PA inmate earning 19 cents an hour.

The issue in this case is whether an inmate may appeal IFP from a district court imposing a third strike. The court held that, given the language of the statute and a unanimous 2015 Supreme Court case interpreting it, he may not appeal IFP from his third strike, disagreeing with the Solicitor General and splitting with the Ninth Circuit.

Joining Smith were Fuentes and Stark D. Del. by designation. Arguing counsel were Ryan Becker of Fox Rothschild for the prisoner and Philip Newcomer for the county. The panel extended its gratitude to Becker and his co-counsel Peter Buckley for “donating their time and talent in accepting this pro bono appointment.”

 

Davenport v. Borough of Homestead — civil rights — partial reversal — Fisher

Late one night, a driver ran a red light and then did not pull over for police. Police followed him, as he drove into Pittsburgh, never exceeding 45 miles per hour and jeopardizing no one. The police sergeant called off the low-speed pursuit, but instead several off-duty police officers deployed a spike strip in an area filled with pedestrians. After the red-light-runner swerved out of his lane to avoid the spike strip, several officers opened fire. A pedestrian was struck in the back and the driver’s mother, a passenger in the car, was shot in the head. The mother sued the officers for using excessive force, the officers asserted qualified immunity, and the district court denied the officer’s motion.

The Third Circuit reversed, holding that no reasonable juror could find for the mother because of the heavy pedestrian presence and the driver’s swerving and, alternatively, because the unconstitutionality of the officer’s actions wasn’t clearly established. Ugh.

Joining Fisher were Hardiman and Roth. Arguing counsel were Shane Haselbarth of Marshall Dennehey for the officers and J. Kerrington Lewis Sr. of Lewis Lewis for the mother.

 

NLRB v. New Vista Nursing & Rehab. — labor — reversal — Smith

The Third Circuit rejected an employer’s challenges to the NLRB’s power to act based on various grounds including recess appointments of its board members. On the merits, the court vacated the NLRB’s order for applying the wrong test to decide whether the nurse employees were supervisors and thus unable to unionize.

Joining Smith was Fisher in full and Greenaway in part; Greenaway dissented on the merits issue. The case was decided without oral argument despite impressive counsel and an amicus.

 

Norfolk Southern Railway v. Pittsburgh & W. Va. R.R. — contract — affirmance — Vanaskie

The Third Circuit affirmed a district court’s grant of summary judgment in a dispute over interpretation of a railroad lease.

Joining Vanaskie were Ambro and Scirica. The case was decided without oral argument.

 

Bamaca-Cifuentes v. AG — immigration — affirmance — McKee

The Third Circuit rejected an immigration petition for review, holding that 8 CFR 1003.2(c)’s timebar applies to motions to reopen removal under the Convention Against Torture.

Joining McKee were Cowen and Fuentes. The case was decided without oral argument.

4 new opinions

I’m out of the office for the next few days, so my posts will be later and briefer than usual.

McMunn v. Babcock & Wilcox Power — civil — affirmance — Smith

The Third Circuit today upheld summary judgment in favor of the defense in a major civil suit that alleged that radiation emissions caused the plaintiffs’ cancers.

Smith was joined by Restrepo. McKee concurred (apparently without joining Smith’s opinion, and also joined by Restrepo, which seems likely to cause future confusion to the extent the two opinions disagree). Arguing counsel were Louis Bograd of Motley Rice for the plaintiffs and John Phillips of Paul Hastings and Nancy Milburn of Arnold & Porter for the defendants.

 

Mendoza-Ordonez v. AG — immigration — reversal — Nygaard

The Third Circuit granted a Honduras citizen’s petition for review, holding that the man was entitled to withholding of removal based on evidence that he faced violence for his political views and reports indicating that his home country was unable to protect him.

Joining Nygaard were Ambro and Restrepo. Arguing counsel were Joseph Brophy of Brophy & Lenahan for the petitioner and Sabatino Leo for the government.

 

Williams v. Globus Medical — civil — affirmance — Scirica

The Third Circuit upheld dismissal of a shareholder suit against a company for belatedly disclosing a business decision that caused a sales decline.

Joining Scirica were Chagares and Fisher. Arguing counsel were Jacob Goldberg of the Rosen Law Firm for the shareholders and Barry Kaplan of WA for the company.

 

Delaware Riverkeeper Network v. US Army Corp of Engineers — environmental — affirmance — Smith

The Third Circuit denied a petition to review an agency ruling approving a gas pipeline.

Joining Smith were Nygaard and Fuentes. Arguing counsel were Aaron Stemplewicz for the Riverkeepers, Varu Chilakamurri for the government, and John Stoviak of Saul Ewing for the intervenor pipeline company.

Three new opinions, including an interesting actual-innocence case

Bruce v. Warden — habeas corpus — affirmance — Fisher

The Third Circuit today upheld a federal prisoner’s ability to challenge his conviction under 28 USC 2241 instead of 28 USC 2255, but on the merits held that the prisoner failed to prove his actual innocence, and thus affirmed.

On the 2241 issue, the court noted “an entrenched split among the courts of appeals regarding the extent to which a change in statutory interpretation permits a federal prisoner to resort to § 2241 for an additional round of collateral review.” (Emphasis added). The opinion notes that 10 circuits (including the Third) allow it, while the Tenth and Eleventh don’t. In a parenthetical, the opinion provocatively notes that Judge Gorsuch was the author of the 10th Circuit opinion, and it ends by noting that split causes difficulties that “will remain, at least until Congress or the Supreme Court speaks on the matter.” All that sounds a weensy bit like a nudge to grant certiorari and perhaps reverse the Third Circuit rule, but the opinion goes on to emphatically reaffirm the rightness of the circuit’s approach, and perhaps that tension explains why it took 10 months after oral argument to issue the opinion.

On the actual innocence issue, the court began by noting that this was the first time it had considered the merits of an actual innocence claim under 2241. It left open the question of what standard applies to such claims by rejecting Bruce’s claim under the more lenient standard, the Schlup/House/McQuiggan gateway standard. Applying that standard to the facts, the court rejected Bruce’s claim.

Joining Fisher were Vanaskie and Krause. Arguing counsel were Rajeev Muttreja of Jones Day for Bruce and Kevin Ritz for the government.

 

Vanderklok v. US — civil rights — reversal in part — Jordan

This appeal arose from an airport-security-screening dispute. A would-be traveler alleged that a TSA screener violated his First and Fourth Amendment rights by falsely accusing him of making bomb threats after the traveler threatened to file a complaint against the screener. The Third Circuit today held that no Bivens action for First Amendment retaliation exists against airport security screeners who retaliate against travelers for exercising their free-speech rights. As to the Fourth Amendment malicious prosecution claim, the court held that no interlocutory appeal was available because the defendant sought summary judgment on the merits rather than on qualified immunity.

Joining Jordan were Smith and Roth. Arguing counsel were John Connell of Archer for the TSA screener, Thomas Malone of the Malone Firm for the traveler, and Daniel Aguilar for the government as amicus.

 

M.R. v. Ridley School Dist. — civil — reversal — Krause

The introduction:

Under the Individuals with Disabilities Education Act, a parent of a child with a disability can bring administrative and judicial proceedings to challenge a school district’s alleged violations of the Act, and, if the parent emerges as “a prevailing party,” the parent is then eligible for an award of attorneys’ fees. 20 U.S.C. § 1415(i)(3)(B). This case presents the question whether a fee award is available to parents who, after unsuccessfully challenging a school district’s proposed educational placement for their child, later obtain a court order requiring the school district to reimburse them for the costs of the child’s “stay put” placement—the “then-current educational placement” in which the Act permitted the child to remain while administrative and judicial proceedings were pending. Id. § 1415(j). We answer this question in the affirmative and conclude, consistent with the Act’s text and with the opinions of this Court and the other Courts of Appeals, that a court-ordered award of retrospective and compensatory relief, even if awarded under the Act’s “stay put” provision, 20 U.S.C. § 1415(j), confers “prevailing party” status. We therefore will reverse the District Court’s denial of attorneys’ fees and remand for proceedings consistent with this opinion.

Joining Krause were Vanaskie and Restrepo. Arguing counsel were Alan Yatvin of Popper & Yatvin for the appellants and John Francis Reilly of Media for the district.

New opinions — significant new antitrust, declaratory-judgment opinions

In re: Lipitor Antitrust Litig. — antitrust — reversal — Smith

In a sprawling opinion whose 17-page caption is longer than many published opinions, the Third Circuit today reversed a district court’s dismissal of antitrust suits against companies holding the patents on popular drugs for treating cholesterol and depression. The court rejected the district court’s rulings that the plaintiffs’ allegations were not plausible.

Joining Smith were Ambro and Fisher. The nine (!) arguing counsel were:

 

Kelly v. Maxum Specialty Ins. Gp. — civil — reversal — Chagares

After a plaintiff sued a defendant, the plaintiff filed a federal suit seeking a declaratory judgment on the defendant’s insurer’s coverage. The Third Circuit said this situation is “familiar” and that district courts in this circuit are divided on the “important” question of whether to let the federal suits proceed. Today, the court reversed a district court’s dismissal, holding that a federal declaratory-judgment coverage suit was not substantially similar to the underlying civil suit and that its remand was an abuse of discretion.

Joining Chagares were Hardiman and Scirica. Arguing counsel were Sina Bahadoran of Florida for the insurer, John Reed Evans of Donnelly & Associates (formerly of Selective Law Group) for an insurance broker, and Gregory Kowalski of Pansini & Mezrow for the plaintiff.

 

New opinion — Third Circuit rejects strip club’s effort to force arbitration

Moon v. Breathless — civil / employment / arbitration — reversal — Greenaway

The Third Circuit today reversed a district court’s ruling granting summary judgment in favor of arbitration. The case arose when a woman who performed at the Breathless Men’s Club sued the club under the Fair Labor Standards Act and two state laws alleging employee wage-and-hour violations. The club argued, and the district court agreed, that her suit was barred by an arbitration clause in its contract with the woman, which by its terms applied to disputes “under this Agreement.” Applying New Jersey law, the Third Circuit held that courts should decide the arbitrability issue and that the clause did not cover this suit mainly because it arose under statutes, not under the contract.

Joining Greenaway were Fisher and Hardiman. Arguing counsel were Jeremy Abay of Sacks Weston for the woman and Marc Gross, formerly of Greenbaum Rowe but now at Fox Rothschild, for the club.

Three new opinions

US v. Martin — criminal sentencing — affirmance — Hardiman

Can both of these things be true at once?

  • A criminal sentence is “based on a sentencing range that has been subsequently lowered by the Sentencing Commission,” but
  • the Guidelines chance does NOT have “the effect of lowering the defendant’s applicable guideline range.

That is, can a sentence be “based on” a guidelines range without that range being the “applicable” guidelines range?

Today the Third Circuit answered that question ‘yes,’ and on that basis it held that the defendant was not entitled to retroactive application of a Guidelines amendment. The defendant’s guilty plea and the sentence he received were based on the drug quantity involved (impacted by the Guidelines amendment), but the sentencing court had found that his advisory guidelines range should be based on his career offender status (not impacted by the Guidelines amendment).

Joining Hardiman were Roth and Fisher. The case was decided without oral argument.

 

McNelis v. PP&L — employment — affirmance — Hardiman

The Third Circuit ruled that employment-related regulations promulgated by the Nuclear Regulatory Commission trumped the Americans with Disability Act.

Joining Hardiman, again, were Roth and Fisher, and again the case was decided without argument.

 

In re: Howmedica Osteonics — civil / mandamus — reversal — Krause

Successful mandamus petitions are rare. Successful mandamus petitions turning on previously not-very-settled questions of law are rarer still. But the Third Circuit granted such a petition today.

The district court ruling at issue involved forum-selection agreements. The Supreme Court has said such agreements usually must be enforced, but the question in this case was what to do when some of the defendants had signed non-compete clauses with forum-selection clauses, but some hadn’t. The district court decided not to enforce the forum-selection clauses against any of the defendants. Today, the Third Circuit held that this was a clear error, and ruled that the claims against the forum-selection-clause defendants will proceed in one forum while the claims against the no-clause defendants will proceed in another.

Joining Krause were Scirica and Fuentes. Arguing counsel for the mandamus petitioners was Robert Carty Jr. of Texas. Arguing for various defendants were Jed Marcus of Bressler Amery, Anthony Haller of Blank Rome, and Jeffery Brown of California.

 

New opinion — Third Circuit partially revives challenge to corporate escheat

Plains All American Pipeline v. Cook — civil — partial reversal — Fisher

After Delaware initiated proceedings to review whether a company’s property was subject to seizure under the state’s escheat law, the company filed suit, alleging various constitutional violations. The district court dismissed the suit, mainly on ripeness grounds because the suit was filed before Delaware assessed liability or sought to make its review findings enforceable. Today, the Third Circuit reversed in part, holding that the company’s as-applied procedural due process claim was ripe, but otherwise affirming. The court declined to affirm the dismissal of the due process claim on alternative grounds, citing circuit precedent that absent exceptional circumstances the court will decline to consider an issue not passed on below and finding no exceptional circumstances.

Joining Fisher were Chagares and Scirica. Arguing counsel were Jeremy Marwell of Vinson and Elkins for the company, Steven Rosenthal of Washington DC for one group of appellees, and Ryan McManus of Boston for another appellee.

 

New opinions — catching up on last week’s ten opinions, including another ACA blockbuster and several notable reversals

Last week I was on vacation. During slow periods it’s not all that rare for the Third Circuit to go a week without issuing a single published opinion. But July/August is never a slow period — that’s when clerkships typically end, so everyone is scrambling to clear the decks. Last week the court issued 10 precedential opinions, 5 on Friday alone.

And there were some big ones, including a hot-button Affordable Care Act case and reversals in criminal, habeas, immigration, and prisoner civil rights cases. But enough wind-up …

 

US v. Wrensford [July 31] — criminal — reversal in part — Shwartz

The Third Circuit held that a defendant was arrested for Fourth Amendment purposes when he was involuntarily taken to a police station and held in a cell. Seems obvious, but the district court ruled to the contrary. The court vacated his criminal conviction and remanded. The court affirmed a co-defendant’s convictions on various grounds.

Joining Shwartz were Greenaway and Fuentes. Arguing counsel were FPD Omodare Jupiter for the prevailing appellant, Martial Webster for the other appellant, and Rhonda Williams-Henry and David White for the government.

 

Haskell v. Superintendent [August 1] — habeas corpus — reversal — Ambro

In this significant habeas corpus opinion, the Third Circuit held that a petitioner who has established a reasonable likelihood that the prosecution’s knowing use of false evidence could have affected the outcome need not also show that the error was not harmless. (Or, for my fellow habeas nerds, once you clear Napue you don’t have to clear Brecht too.) On the merits, the court reversed the district court’s denial of relief. Appallingly, the district court had not even granted a certificate of appealability.

Joining Ambro were Vanaskie and Restrepo. Arguing counsel were AFPD Elisa Long for the appellant and Mark Richmond of the Erie DA’s office for the Commonwealth.

 

EEOC v. City of Long Branch [August 2] — civil procedure — reversal — Chagares

The Third Circuit summarized its decision vacating a district court ruling in an EEOC enforcement suit thus:

The EEOC raises two issues on appeal: (1) whether Long Branch is precluded from contesting the motion to enforce because it failed to exhaust its administrative remedies ***, and (2) whether the EEOC may disclose information from the noncharging parties’ employment and personnel records to Lt. Johnson ***. Despite the compelling nature of these issues, we will not reach them because of a procedural error committed by the District Court: the District Court erroneously treated the motion to enforce that the Magistrate Judge had reviewed as a nondispositive motion instead of a dispositive motion. This is a meaningful distinction under the Federal Magistrates Act, 28 U.S.C. § 631, et seq., as the categorization of motion dictates, inter alia, the level of authority with which a magistrate judge may act on a motion and the availability and standard of review afforded by the District Court and our Court.

Joining Chagares were Ambro and Fuentes. The case was decided without oral argument.

 

Ildefonso-Candelario v. AG [August 3] — immigration — reversal — Stearns

The Third Circuit held that a conviction under Pennsylvania’s obstruction-of-justice statute, 18 Pa. Cons. Stat. 5101, is not categorically a crime involving moral turpitude because it sweeps in non-fraudulent conduct. The court firmly rejected the government’s request to remand without decision to let the BIA reconsider its ruling.

Joining Stearns (D. Mass., sitting by designation) were Jordan and Krause. Arguing counsel were Daniel Conklin of the Shagin Law Group for the petitioner and Rebecca Phillips for the government.

 

Blackledge v. Blackledge [August 3] — family — affirmance — Krause

The Third Circuit rejected a father’s appeal from denial of his petition alleging that the mother violated an international treaty by retaining custody of their son.

Joining Krause were Ambro and Nygaard. Arguing counsel for the father was former Fisher clerk M. Patrick Yingling of Reed Smith; Barbara Ernsberger of Behrend & Ernsberger argued for the mother. The opinion thanked the father’s counsel for accepting the court’s appointment in the case and for their “excellent briefing and argument.”

 

Millhouse v. Heath [August 4] — prisoner civil rights — reversal — Cowen

The mean-spirited Prison Litigation Reform Act contains a provision — the PLRA’s three strikes rule — that poor prisoners cannot qualify for the same reduced filing fees as any other poor litigants if they previously filed three or more prisoner suits that were deemed frivolous, because it’s so fair to punish people who are poor and lawyer-less for not accurately assessing the strength of their potential legal claims.

Last week, a partially divided Third Circuit panel held that a prisoner was entitled to file in forma pauperis despite having more than 3 prior suits dismissed as frivolous because (1) the number of PLRA strikes must be assessed as of the time the notice of appeal is filed and (2) dismissals without prejudice for failure to state a claim do not count as strikes. Judge Ambro disagreed on both points but would have reached the same result through equitable tolling.

Joining Cowen was Restrepo, with Ambro dissenting in part. Arguing counsel were Stephen Fogdall of Schnader Harrison for the prisoner and Timothy Judge for the government. The opinion thanked Fogdall and his Schnader co-counsel Emily Hanlon for their “excellent work” as pro bono counsel appointed by the court.

 

US v. Ferriero [August 4] — criminal — affirmance — Scirica

The Third Circuit affirmed the conviction and sentence of a New Jersey county politico convicted of violating the Travel Act, RICO, and the wire fraud statute by lobbying on behalf of commercial clients without disclosing his own financial interest. In a lengthy opinion, the court rejected various challenges to the convictions, including the defendant’s quite plausible-sounding argument that failing to disclose his interest cannot constitute making a false or fraudulent misrepresentation under the wire fraud statute. The court also rejected the defendant’s arguments relying on McDonnell v. United States.

Joining Scirica were Hardiman and Rosenthal SD Tex by designation. Arguing counsel were Peter Goldberger for the defendant and Bruce Keller for the government.

 

US v. Chapman [August 4] — criminal — affirmance — Greenaway

The Third Circuit held that a conviction for mailing a threat to injure constitutes a crime of violence under the Sentencing Guidelines. Judge Jordan concurred “to express dismay at the ever-expanding application of the categorical approach.”

Joining Greenaway were Jordan and Rendell. Arguing counsel were Ronald Krauss of the MDPA federal defender for the defendant and unfairly blocked Third Circuit nominee Rebecca Ross Haywood for the government.

 

In re: AE Liquidation [August 4] — civil — affirmance — Krause

The opinion’s introduction says it best:

This case arises from the bankruptcy and subsequent
closing of a jet aircraft manufacturer, and requires us to assess
that manufacturer’s obligation under the Worker Adjustment
and Retraining Notification (WARN) Act, 29 U.S.C. §§
2101-2109, to give fair warning to its employees before
effecting a mass layoff. On appeal, we are asked to determine
whether a business must notify its employees of a pending
layoff once the layoff becomes probable—that is, more likely
than not—or if the mere foreseeable possibility that a layoff
may occur is enough to trigger the WARN Act’s notice
requirements. Because we conclude that a probability of
layoffs is necessary, and the manufacturer has demonstrated
that its closing was not probable until the day that it occurred,
it cannot be held liable for its failure to give its employees
requisite notice. Accordingly, we will affirm ***

Joining Krause were Fisher and Greenberg. Arguing counsel were Jack Raisner of New York for the appellants and Barry Klayman of Cozen O’Connor for the appellees.

 

Real Alternatives v. Secretary DHHS [August 4] — civil — affirmance — Rendell

A sharply split Third Circuit panel held last week that a secular anti-abortion group with no religious affiliation was not entitled to the same exemption as houses of worship from the Affordable Care Act’s requirement that employer-provided health insurance include contraceptive services. The court also held that employees’ religious beliefs are not substantially burdened by the ACA’s contraception mandate. The majority answered both questions “[a]fter careful review, but without any hesitation.” A petition for certiorari seems a certainty and I sure wouldn’t bet against a grant.

Joining Rendell was Greenaway. Jordan dissented as to the rejection of the employees’ claims. Both authors are at the top of their game. Arguing counsel were Matthew Bowman of Alliance Defending Freedom for the employer and employees and Joshua Salzman for the government.

New opinion — “Because his allegations against the beauty-products corporation are more than skin-deep, we reverse.”

Trzaska v. L’Oreal USA — employment — reversal — Ambro

The Third Circuit today ruled in favor of an in-house attorney who alleged that he was fired by L’Oreal for refusing to meet a corporate quota for patent applications (?) by filing applications for unpatentable products. The witty quote that forms the title of this post is from the opinion.

Ambro was joined by Fuentes; Chagares dissented. Arguing counsel were Harold Goodman of Raynes McCarty for the attorney and Christopher Carton of K&L Gates and Eric Savage of New York for L’Oreal.

Two new opinions

Seneca Resources v. Township of Highland — civil — affirmance — Smith

A Pennsylvania township enacted an ordinance barring a gas company from using a well to store waste from fracking. When the gas company sued the township, four groups moved to intervene to help defend the statute. After their motion was denied on the theory that the township adequately represented the intervenors interests, the township repealed the ordinance and entered a consent decree. The would-be intervenors appealed, challenging the denial of intervention and the consent decree. The Third Circuit held that the denial of intervention was moot because there was no ordinance to defend and that, as non-parties, they could not appeal the consent decree.

Joining Smith were Jordan and Roth. Arguing counsel were Lindsey Schromen-Wawrin of Washington for the would-be intervenors, Stanley Yorsz of Buchanan Ingersoll for the gas company, and Arthur Martinucci of Quinn Buseck for the township.

 

Parks v. Tyson Foods — civil — affirmance — Jordan

The introduction:

This case concerns a trademark that once enjoyed widespread recognition but has since grown considerably weaker. Since the 1950s, Parks Sausage Company has manufactured or licensed sausage under the brand name “PARKS.”1 At one point, PARKS was placed on the Principal Register of trademarks at the United States Patent and Trademark Office (“USPTO”), but, sometime in the early 2000s, Parks failed to renew the registration. In 2014, Tyson Foods, Inc. and Hillshire Brands Company (collectively, “Tyson”),2 the owners of the frankfurter brand BALL PARK, launched a premium frankfurter product called PARK’S FINEST. Parks sued, arguing that Tyson was engaged in false advertising and was infringing Parks’s trademark. The District Court determined that Parks’s claim for false advertising was really a repetition of its trademark claim, and that the PARKS mark was too weak to merit protection against Tyson’s use of the PARK’S FINEST name. We agree with the District Court and will affirm in all respects.

The highlight of the opinion surely is this footnote:

Though it may distress the cognoscenti, we use the terms “frankfurters,” “franks,” and “hot dogs,” as synonyms. Not so with the term “sausage,” which we use to denote something akin to but arguably different from hot dogs.

Joining Jordan were Smith and Roth. Arguing counsel were Jeffrey Lewis of Eckert Seamans for the appellant and John Dabney of D.C. for the appellees.

New opinion: Third Circuit clarifies that a single act of harassment can establish a hostile work environment

Castleberry v. STI Group — civil / employment discrimination — reversal — Ambro

The Third Circuit today reversed a district court’s dismissal of an employment-discrimination suit. The court resolved its inconsistent caselaw on the harassment necessary to establish a hostile work environment, stating, “The correct standard is ‘severe or pervasive.” Applying this standard, the court held that a single act of harassment — a supervisor’s use of what the opinion called “the ‘n-word'” — constituted severe conduct sufficient to state a hostile-work-environment claim.

Joining Ambro were Vanaskie and Restrepo. Arguing counsel were Richard Swartz of Swartz Swidler for the employees and Donna Walsh of Myers Brier for the employers.

New opinion — Third Circuit upholds FCC caps on bidding assistance to telecom outsiders

Council Tree Investors v. FCC — civil / agency — affirmance — Hardiman

The Federal Communications Commission has a statutory duty to avoid “excessive concentration of [telecommunications] licenses” and to “disseminat[e] licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women,” collectively referred to as designated entities. Seemingly they’re not doing so hot, given what today’s opinion calls “our telecommunications quadropoly” of AT&T, Verizon, Sprint, and T-Mobile.

So it isn’t surprising that, when the FCC decided to scale back its efforts to help the outsiders get licenses, one of them sued. The main way the FCC helps designated entities is by giving them bidding credits to help them win license auctions. But in 2015 the FCC modified its bidding-credit regime, and one thing it did was impose a new cap on bidding credits. The challenger argued that the FCC ignored its statutory mandate and acted on an insufficient record.

Rejecting these challenges, the Third Circuit today upheld the FCC’s bidding-credit limit.

Joining Hardiman were Smith and Krause. Arguing counsel were Kevin Russell of Goldstein & Russell for the petitioner and Clifford Pash Jr. for the FCC.

Three new opinions, including another consumer win

Susinno v. Work Out World — civil / consumer — reversal — Hardiman

A company allegedly called a person’s cell phone and left a recorded sales pitch on her voicemail. She sued, alleging that the message violated the Telephone Consumer Protection Act’s prohibition on prerecorded calls to cell phones. The district court dismissed on the grounds that Congress wasn’t protecting people against single calls and that one message caused no concrete injury. Today, the Third Circuit disagreed on both points and reversed.

Joining Hardiman were Krause and Stengel EDPA by designation. Arguing cousel were Timothy Sostrin of Chicago for the plaintiff, Joshua Bauchner of Ansell Grimm for the company, and Andrew Pincus of Mayer Brown for the Chamber of Commerce as amicus.

 

In re World Imports — bankruptcy — reversal — Hardiman

The Bankruptcy Code gives priority to creditors who sold goods “received by the debtor within 20 days before the bankruptcy petition was filed. Today, the Third Circuit held that “received” requires physical possession.

Joining Hardiman again were Krause and Stengel EDPA. Arguing counsel were Kirk Burkley of Bernstein-Burkley for the appellants and David Braverman of Braverman Kaskey for the appellees.

 

Hamilton v. Bromley — civil — affirmance — Fisher

A father sued in federal court alleging a conspiracy to deprive him of contact with his son. After filing suit, he gained custody of his son pending the outcome of state-court litigation. Today the Third Circuit affirmed dismissal of the father’s suit, holding that the father’s custody mooted his federal case, but also that the district court erred in dismissing under Younger abstention without deciding mootness.

Joining Fisher were Hardiman and Roth (although Hardiman did not join the part of the opinion where the court said because it lacked jurisdiction it could not decide the Younger issue and that the district court applied the wrong Younger test.) Arguing counsel were Jon Heintz of Jones Day for the father, James Johnson of State College for the mother, Amy Marshall of Babst Calland for a youth home, and Michael Daley of the state AOC for a state judge. The opinion thanked Jones Day for handling the appeal pro bono and for the quality of counsel’s representation.

New opinions — Third Circuit recognizes right to film police in public

Fields v. City of Philadelphia — civil rights — reversal — Ambro

In a landmark free-speech ruling, the Third Circuit today held that individuals have a First Amendment right to film police activity in public. A panel majority further held that the officers who did the filming here were entitled to qualified immunity from suit because the right had not been sufficiently clearly established; Judge Nygaard dissented on this ground. The court remanded for the district court to decide whether the city was subject to municipal liability.

Joining Ambro was Restrepo; Nygaard joined in part and dissented in part. Arguing counsel were Molly Tack-Hooper of ACLU-PA for the plaintiffs and Craig Gottlieb of the Philadelphia city Law Department for the defendants. A host of top-flight appellate lawyers were on the briefs on the ACLU’s side, including Jonathan Feinberg of Kairys Rudovsky, Alicia Hickok of Drinker Biddle, and Ilya Shapiro of Cato Institute.

Early commentary by Eugene Volokh at Volokh Conspiracy here and by Mark Joseph Stern at Slate here.

US v. Stimler* — criminal — affirmance — Roth

The Third Circuit affirmed the convictions of three Orthodox Jewish rabbis who were convicted of conspiracy to commit kidnapping for their role in “a scheme through which they … sought to assist Orthodox Jewish women to obtain divorces from recalcitrant husbands.”  The court rejected 8 different challenges to the convictions; Judge Restrepo wrote separately to disagree with the panel majority’s conclusion that investigators’ warrantless use of cell site location information did not violate the Fourth Amendment, but would have affirmed anyway under the good-faith exception.

Joining Roth was Chagares; Restrepo concurred in the judgment in part. Arguing counsel were Nathan Lewin of Washington DC for one defendant, Aidan O’Connor of Pashman Stein for the second, and Peter Goldberger for the third. Arguing for the government were Norman Gross and Glenn Moramarco of the NJ US Attorney’s office.

Early news coverage here and here.

UPDATE: on July 17 the court issued an order stating that the government “has advised of factual errors contained within the opinion” and that in light of the letter the Court will issue an amended opinion. It states that the amendment does not alter the judgment.

*The link at the top of this entry now goes to the amended opinion issued July 17. The original, withdrawn opinion is here.

Three new opinions [updated]

US v. Jackson — criminal — reversal — Cowen

The government appealed from the criminal sentences imposed on a husband and wife for abusing their foster children. A divided Third Circuit reversed for resentencing on a host of grounds.

The 82-page majority opinion noted:

This case implicates a number of rather unusual sentencing issues. This is not surprising because Defendants were not convicted and sentenced for committing enumerated federal crimes of the sort that federal courts consider on a regular basis. Instead, they were convicted and sentenced in federal court for state law offenses “assimilated” into federal law pursuant to a federal statute, the ACA.

The panel majority held that the district court erred in concluding that the federal sentencing guideline for assault was not sufficiently analogous to use to calculate the defendants’ guideline range. The district court also erred in refusing to make sentencing-related findings of fact beyond the findings found by the jury at trial. And it erred some more by “focusing on state sentencing principles to the exclusion of basic federal sentencing principles.” Judge McKee dissented, mainly to disagree with the majority on the analogous-guideline point.

Finally, Judge Cowen’s majority opinion concluded that “we do conclude” that the sentences were substantively unreasonable. But a footnote in the majority opinion stated that Judge Fuentes “would vacate” on the preceding procedural grounds “without reaching” substantive unreasonableness. (A footnote in Judge McKee’s dissent states that he refrains from reaching the issue.) So is there a precedential holding on substantive unreasonableness? It’s possible to argue either way, and I expect future litigants will do exactly that. I think the substantive reasonableness section probably is precedential, but the opinion’s failure to be clear on that point is strange.

Joining Cowen was Fuentes; McKee dissented with some harsh language for the government. Arguing counsel were John Romano of the NJ US Attorney’s office for the government, Herbert Waldman of Javerbaum Wurgaft for the wife, and Louise Arkel of the NJ federal defender for the husband.

 

Knick v. Township — civil — affirmance — Smith

A Pennsylvania township enacted an ordinance that authorizes officials to enter any property to “for the purpose of determining the existence of and location of any cemetery” and compels private cemeteries to open themselves to the public during daylight hours.

The Third Circuit described the ordinance as “extraordinary and constitutionally suspect,” noting “it is difficult to imagine a broader authorization to conduct searches of privately owned property” and urging the township to abandon it. But the court affirmed dismissal of a suit challenging the ordinance, holding that the the plaintiff lacked standing to raise a facial Fourth Amendment challenge because her rights were not violated and that her Fifth Amendment takings claim is not ripe because she had not first sought compensation under the state’s inverse-condemnation procedure. (Embarrassingly, the court noted that the standing issue had not been raised by the township, and that it did raise a “curious” argument that the plaintiff failed to satisfy Monell because she failed show show a cognizable injury.) The opinion helpfully clarifies the different burdens for facial and as-applied challenges and distinguishes facial takings from facial challenges.

Smith was joined by McKee and Rendell. Arguing counsel were J. David Breemer of the Pacific Legal Foundation for the plaintiff and Thomas Specht of Marshall Dennehey for the township defendants.

 

Taha v. County — class action — affirmance — Greenberg

The Third Circuit affirmed an order granting class action certification in a suit against defendants who created a web page that made available information about over 60,000 people who had been held at a county jail, including persons whose records were expunged. The defendants had argued that the court erred in deciding certification after ruling on a motion for partial summary judgment, but the court held that this challenge was waived because it was not raised below. The defendants also argued that the court erred in certifying a punitive damages class on several grounds, including standing and predominance, but the court disagreed.

Joining Greenberg were Greenaway and Shwartz. Arguing counsel were Burt Rublin of Ballard Spahr for the county defendants and Robert LaRocca of Kohn Swift for the plaintiffs.

New opinion — maybe 69 phone calls over a $25 debt wasn’t such a hot idea

Daubert v. NRA Group — civil / consumer — reversal in part — Fisher

“This case,” today’s Third Circuit’s opinion begins, “— involving tens of thousands of dollars in statutory damages, half a jury trial, and cross-appeals — stems from a debt collector’s pursuit of $25 in unpaid medical bills.” After debt collector called a medical patient’s cellphone 69 times over 10 months (!), he sued them, alleging that they violated the Telephone Consumer Protection Act. He also alleged that the collection letters they sent him violated the Fair Dept Collection Practices Act. The district court granted summary judgment in the plaintiff’s favor on the TCPA claim, but granted judgment as a matter of law in the defendant’s favor on the FDCPA claim. Today, the Third Circuit affirmed on the TCPA but reversed on the FDCPA, handing the debt collector a total defeat.

Joining Fisher were Hardiman and Roth. Arguing counsel were Richard Perr of Fineman Krekstein and Carlo Sabatini of the Sabatini Law Firm. (The caption doesn’t say who represented whom, but their respective practice areas suggest that Perr represented the debt collector and Sabatini represented the plaintiff.)

Two new opinions

US v. Johnson — criminal — affirmance — Fuentes

The Third Circuit rejected a defendant’s argument that a district court lost jurisdiction to revoke his supervised release when a different district court revoked an unrelated concurrent term of supervised release. In rejected the argument that concurrent terms of supervised release merge, The court joined the Second and Fifth Circuits. The court also rejected the defendant’s argument that the district court lacked jurisdiction to revoke him because he was living in the other district and his release was being supervised by the other district.

Joining Fuentes were Greenaway and Shwartz. Arguing counsel were Omodare Jupiter of the VI FPD for the defendant and David White for the government.

 

Blanyar v. Genova Prods. — civil — affirmance — Vanaskie

The introduction says it best:

Appellants, former employees of Appellee Genova
Products Inc. (“Genova”), challenge the District Court’s
decision to dismiss their putative class action for medical
monitoring as barred by the applicable two year statute of
limitations. While acknowledging that their exposure to the
alleged toxic substances upon which they base their medical
monitoring claims ended more than two years before
commencing this litigation, Appellants contend that the
limitations period should have been tolled by the discovery
rule and should not have begun to run until they discovered
the toxicity of the substances present in the Genova
workplace, a discovery they claim was first made less than
two years before this action was initiated. The District Court
concluded that the discovery rule did not save Appellants’
action because information concerning the dangers of the
chemicals to which Appellants were exposed had been widely
available for decades before they filed their complaint. For
the reasons that follow, we will affirm the dismissal of
Appellants’ lawsuit.

Joining Vanaskie were Fisher and Krause. Arguing counsel were Sol Weiss of Anapol Weiss for the class plaintiffs and Justin Bagdady of Michigan for the class defendants.

Three new opinions

De Ritis v. McGarrigle — civil rights — reversal — Krause

The Third Circuit today emphatically rejected a former public defender’s claim that his First Amendment rights were violated when he told others that he had been transferred because he took too many cases to trial. The court reversed the district court’s denial of summary judgment based on qualified immunity. Among the court’s holdings was that an attorney’s idle chatter with other lawyers in court during breaks between proceedings is protected by the First Amendment.

Krause was joined by Vanaskie and Nygaard. Arguing counsel were De Ritis pro se and Mark Raith of Holsten & Associates for the public defender.

 

Halley v. Honeywell Int’l — class action — affirmance in part — Scirica

The Third Circuit upheld approval of a $10 million class action settlement of a large chemical pollution suit. The court rejected several challenges to the settlement, including various arguments that the court lacked a sufficient factual record for approval. The court also upheld the $2.5 million attorneys’ fees award, but remanded for reconsideration of the award of costs because the lower court failed to adequately explain its reasoning.

Joining Scirica were Ambro and Vanaskie. Arguing counsel were Thomas Paciorkowski of Jersey City for the objector and Anthony Roisman of Vermont for the appellees.

 

Duquesne Light Holdings v. C.I.R. — tax — affirmance — Ambro

A divided Third Circuit panel today affirmed a tax-court ruling applying the Ilfeld doctrine that, absent clear Congressional intent, the tax code should not be interpreted to give taxpayers the equivalent of a double deduction. The tax-liability dispute here is, to my inexpert eye, arcane.

Joining Ambro was Krause; Hardiman dissented. Arguing counse were appellate powerhouse James Martin of Reed Smith for the taxpayer and Arthur Catterall for the government.

New opinion — fathers challenging NJ’s child-custody laws can’t sue judges

Allen v. DeBello — civil — affirmance — Fuentes

The Third Circuit today held that a 1983 challenge to New Jersey’s child-custody law that named New Jersey judges as defendants was barred by judicial immunity because judges making custody rulings are acting as judicial arbiters rather than enforcers. The plaintiffs are fathers who alleged that child-custody laws in practice favor mothers.

Joining Fuentes were Ambro and Shwartz. Arguing counsel were Paul A. Clark of Jersey City (whose website is unusual) for the fathers and Benjamin Zieman for the state.

New opinion — Third Circuit upholds agency’s black-lung regulation

Helen Mining v. Elliott — administrative — affirmance — Krause

The Third Circuit today upheld a federal agency’s power to issue a regulation imposing on mine operators the burden of rebutting disability causation, and it upheld the agency’s award of black-lung benefits to a worker against a mine operator.

Joining Krause were Chevron-critic Jordan and Vanaskie. Arguing counsel were Christopher Pierson of Burns White for the mining operator, Heath Long of Pawlowski Bilonick for the worker, and Sean Bajkowski for the government agency.

By the way, seems like a flurry of Krause opinions lately, no? Turns out, of the Third Circuit’s last 11 published opinions, Judge Krause authored 4 of them, while no other judge wrote more than one. Interesting, but significant? It could well just be a random statistical blip, since she didn’t write any of the 11 published opinions before this.

New opinion — a Delaware case with “a long and tortuous litigation trail”

Norman v. Elkin — civil — reversal in part — Jordan

After the two shareholders in a company disagreed over the majority shareholder’s actions, the minority shareholder sued. “It was the beginning of a long and tortuous litigation trail,” the Third Circuit explained today in an opinion that won’t end that trail:

We conclude that the District Court erred in concluding that tolling of the statute of limitations is categorically inappropriate when a plaintiff has inquiry notice before initiating a books and records action in the Delaware courts. Accordingly, we will send most of the claims back to the District Court to determine whether tolling should have applied and, if so, whether any of the claims are nevertheless time-barred. We also conclude that the District Court erred when it vacated the jury’s award of nominal damages for one of Norman’s breach of contract claims. Finally, we hold that Norman’s fraud claim was not supported by sufficient proof of damages and we thus affirm judgment as a matter of law on that claim on the alternative grounds that Elkin has proposed.

Two interesting points:

  • The opinion deemed waived two arguments that a party attempted to incorporate by reference from his district-court filings.
  • Judge Shwartz disagreed with the panel’s disposition of one of the issues, but instead of writing separately the opinion included a footnote noting her “different perspective on this point.”

Joining Jordan were Smith and Shwartz. Arguing counsel were David Felice of Bailey and Glasser for one side and Steven Caponi of Blank Rome for the other.

New opinion — a Virgin Islands election case

Rodriguez v. 32nd Legislature — elections — affirmance — Shwartz

After a candidate was elected to the Virgin Islands Legislature, his former opponent filed a suit alleging that he was unqualified to serve because he had sworn under oath in a bankruptcy filing that he lived in Tennessee. The elected candidate removed that suit to federal court and filed one of his own, asking the court to declare that the qualification decision must be made by the legislature, not the courts. Today the Third Circuit held that, under Virgin Islands law and separation of powers principles, only the legislature could decide the qualifications of its members.

Joining Shwartz were Greenaway and Fuentes. Arguing counsel were Francis Jackson for the elected candidate, Terri Griffiths for the opponent, and Kye Walker for the legislature.

Early news coverage here.

Three new opinions plus an en banc grant

In re: Zoloft — civil — affirmance — Roth

“This case involves complicated facts, statistical methodology, and competing claims of appropriate standards for assessing causality from observational epidemiological studies. Ultimately, however, the issue is quite clear.” So said the Third Circuit today, affirming a district court’s decision to exclude an expert witness in a high-stakes drug-liability case.

Joining Roth were Chagares and Restrepo. Arguing counsel were former assistant to the Solicitor General David Frederick of Kellogg Hansen for the appellants and Mark Cheffo of Quinn Emanuel for the appellees.

 

US v. Fattah Jr. — criminal — affirmance — Smith

In this latest chapter in the Chip Fattah saga, the Third Circuit ruled that while an FBI agent’s media disclosures about Fattah were wrongful, Fattah was not entitled to relief.

Joining Smith were Hardiman and Krause. Arguing were Eric Gibson for the government, Fattah for himself, and Ellen Brotman as amicus appointed by the court for Fattah. The court thanked Brotman for her “excellent advocacy” which the court noted she provided on an expedited basis.

 

Gillette v. Prosper — prisoner civil rights / jurisdiction — dismissal — Hardiman

The Third Circuit dismissed for lack of jurisdiction a prisoner’s interlocutory appeal challenging denial of his request under the PLRA that his case be decided in district court by a three-judge court.

Joining Hardiman were Chagares and Jordan. Arguing counsel were Joseph DiRuzzo III for the prisoner and Kimberly Salisbury for the warden.

 

US v. Douglas

The Third Circuit granted rehearing en banc in US v. Douglas, with oral argument “limited to the application of the enhancement for abuse of position of trust under U.S.S.G. 3B1.3.” My coverage of the now-vacated panel ruling is here — Judge Greenaway had dissented from the panel majority’s holding on this point.

New opinion — Third Circuit clarifies preliminary-injunction standard

Reilly v. City of Harrisburg — civil — reversal — Ambro

The Third Circuit today clarified the standard for granting preliminary injunctions. It’s always been clear that the preliminary injunction test has 4 pieces — (1) probability of success, (2) irreparable injury, (3) harm to others, and (4) public interest — but circuit caselaw has been contradictory about how the burden of proof works. Some cases said the movant has the burden of proving only the first two, while others said the movant must prove all four.

Today, the court held that the movant has the burden of proving only the first two parts of the test. It reasoned that this rule predated the must-prove-all-four cases and thus was binding under the rule that later panels can’t overrule earlier ones. It also reasoned that a contrary result wasn’t required by the Supreme Court’s 2008 statement that  “[a] plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”

The underlying case arose from a challenge against Harrisburg’s 20-foot health-care buffer-zone ordinance brought by “sidewalk counselors” who seek to dissuade women from getting abortions. Despite the incendiary nature of the underlying suit, I read today’s opinion as entirely non-ideological and limited to cleaning up how the preliminary-injunction standard works.

Joining Ambro were Jordan and Roth. Arguing counsel were Horatio Mihet of Liberty Counsel for the movants and Joshua Autry of Lavery Faherty for the appellees.

Two messy new opinions

Oliver v. Roquet — civil rights / civil commitment — reversal — Krause

This appeal arose after a state psychologist recommended an unfavorable action against a civil detainee in a report that referred critically to the detainee’s pro se litigation and legal assistance for other detainees. The psychologist said the detainee’s legal work could be “counter-therapeutic” for him.

In an interlocutory appeal, the Third Circuit today held that the district court erred in denying the psychologist’s qualified-immunity motion. The court first rejected the detainee’s argument that the psychologist’s assertion of qualified immunity came too late because it was not included in her first motion to dismiss.

The court then held that the detainee’s First Amendment claim failed to adequately allege causation. A state actor’s mere consideration of protected activity normally is enough to plead retaliation in a retaliation case, but more than mere consideration of protected activity is required to state a valid retaliation claim against a mental health professional at a state institution for the civilly committed: “There must be particular facts alleged that allow the court to reasonably infer it is the protected activity itself, and not simply medically relevant behavior associated with that activity, that formed the basis of the defendant’s adverse action.”

Finally, the court alternatively held that the detainee’s asserted right was not clearly established.

Joining Krause were Ambro and Smith. Arguing counsel were David DaCosta of the NJ Attorney General’s office for the psychologist and Stephen Fogdall of Schnader as amicus counsel for the detainee. The court thanked Fogdall “for accepting this matter pro bono and for the quality of his briefing and argument in this case.”

 

Fahie v. People — criminal — affirmance — Jordan

The Third Circuit today affirmed a Virgin Islands criminal conviction. The court held that it was not an abuse of discretion for the court to issue an aiding-and-abetting instruction even though the co-defendant had pled to being an accessory after the fact, rejecting the defendant’s argument that the plea meant there was no one for him to abet.

The case was unusual in two ways. First, the Third Circuit granted certiorari to review the Virgin Islands ruling after Congress revoked the court’s cert. jurisdiction. But the court applied its prior precedent to hold that the revocation did not apply to cases that had commenced in the Virgin Islands courts before the revocation, precedent the Virgin Islands bar association decried in an amicus brief as “absurd.” Second, the court dismissed as improvidently granted a second issue on which the court had granted certiorari, concluding that the issue turned in territorial rather than federal law. A bit of a mess.

Joining Jordan were Chagares and Hardiman. Arguing counsel were David Cattie for the petitioner, Su-Layne Walker of the VI Attorney General’s office for the people, and Edward Barry for the bar association amicus.

New opinions — two civil affirmances

Jones v. Does — civil / arbitration — affirmance — Fuentes

Today the Third Circuit ruled against an employer who argued that an overtime-pay suit against it should have submitted to arbitration. The employees sued the employer under the Fair Labor Standards Act. The employer moved to stay or dismiss pending arbitration, arguing that disputes over interpretation of the collective-bargaining agreement had to be arbitrated, but the district court disagreed and a divided Third Circuit panel affirmed.

Joiing Fuentes was Chagares; Ambro dissented. Arguing counsel were Stuart Weinberger of Goldberg & Weinberger for the employer and Matthew Miller of Swartz Swidler for the employees.

 

Petras v. Simparel — civil / qui tam — affirmance — McKee

The Third Circuit today affirmed dismissal of a suit under the False Claims Act. Addressing an issue of first impression, the court held that the Small Business Administration was not acting as the government for FCA purposes when it was merely a receiver for a private company. The court also relied on legislative history to rule that certain contingent obligations fell outside the FCA’s scope.

Joining McKee were Hardiman and Rendell. The case was decided without oral argument.

 

New opinion — IRS error doesn’t excuse taxpayer’s late filing

Rubel v. CIR — tax — affirmance — Shwartz

Suppose the IRS denies your petition and tells you in a letter that your appeal is due April 19, so you appeal on April 19. But actually the statute says your appeal was due a week or two earlier, so the IRS argues that your appeal ought be tossed as untimely.

Fair? Maybe not, but today the Third Circuit held that the appeal deadline was jurisdictional so fairness mattered not. In a footnote, the court primly “remind[ed] the IRS to exercise care when drafting correspondence to a taxpayer.”

Joining Shwartz were Greenaway and Simandle DNJ by designation. Arguing counsel were Carlton Smith of New York for the taxpayer and Richard Caldarone for the government.

New opinions — an immigration reversal and 1L property-class flashbacks

Flores v. AG — immigration — reversal — Fuentes

Our government decided to remove a Guatemalan woman who had pled guilty to being an accessory after the fact to murder — she saw her jealous ex-boyfriend kill her current boyfriend, but did not tell police because because the murderer threatened to kill her and her 3-year daughter if she did. She contested her removal because “her father, who had physically and sexually abused her as a child, wanted to kill her” and “she had been raped by members of a local gang immediately following her previous removal to Guatemala.” The BIA ruled against her on the grounds that her conviction was related to obstruction of justice and thus so serious that she was ineligible for withholding of removal. The Third Circuit today reversed in a thorough and compelling opinion.

Joining Fuentes was Ambro; Shwartz dissented. Arguing counsel were Marcia Kasdan for the petitioner and Andrew Insenga for the government.

US v. Cardaci — property / tax — partial affirmance — Jordan

I could be mistaken, but I’m pretty sure I’ve never seen this sentence in a court opinion before: “To give one admittedly extreme example, it stands to reason that a healthy twenty-six-year-old wife would have a greater interest in a life estate than would her ailing eighty-nine-year old husband.” Will today’s opinion containing that sentence become the leading case for this proposition? I’m eager to find out.

After a husband’s business nosedived and he failed to pay around $80,000 in taxes, the government sued him for back taxes, seeking a forced sale of the home where he lived with his wife. The district court decided the husband’s share of the jointly owned house wasn’t worth enough and instead ordered the husband to start paying the government rent instead. Today, the Third Circuit held that the district court did have the power to order a forced sale of a jointly owned house in New Jersey, but it remanded for reconsideration of the remedy.

Joining Jordan were Greenaway and Rendell. Arguing counsel were Julie Avetta (subject of this 2009 Washington Post “OnLove” essay, and also an accomplished classical singer) for the government and Anthony Monzo of Monzo Catanese for the homeowners.

Three big new opinions by Judge Hardiman

In re: Trustees of Conneaut Lake Park — civil — reversal — Hardiman

Pennsylvania law bars insurance companies from paying out fire insurance to a “named insured” if the owner of the property owes back taxes on it. The main purpose of this law, the Third Circuit noted today, is to keep property owners from profiting from arson.

This appeal arose from a fire at a beach club owned by one corporation and operated by another. The operator insured the club against fire damage, there was a fire, and the operator submitted a claim. It emerged that the owner owed taxes on the property; the non-payment happened long before the operator ever entered the picture. But the upshot was that the vast majority of the operator’s insurance payout — hundreds of thousands of dollars — went to various government bodies to pay off the owner’s back taxes, not to cover the fire losses of the operator who paid the policy. Not surprisingly, the operator sued. (The suit was transferred to bankruptcy court when the owner filed for bankruptcy.)

The district court ruled that the operator was entitled to the insurance payout because the PA statute was ambiguous and the legislative intent was to apply it only to insureds who were themselves the tax-delinquent property owners. Today, the Third Circuit reversed, holding that the plain language of the statute required it to be applied to any named insured and rejecting the operator’s argument that the outcome violated the takings clause. The court left the door open for the operator to try to recover money from the owner in the bankruptcy proceedings.

Now, I’m no insurance expert, but I suspect this holding could create a giant mess for Pennsylvania. Does the Third Circuit’s reading of PA law mean that now every would-be tenant in the state needs to research and then monitor their property owner’s property tax payments or face catastrophic loss from denial of fire-insurance proceeds they bought and paid for in perfect good faith? Is that realistic? How many PA tenants don’t even know the identity of their property owner? Do PA tenants need to insist that future property leases require the owners to be and stay current on property taxes as a lease condition? What about current leases? Unless I’m mistaken, the consequences of today’s paean to plain meaning could be broad and profoundly disruptive.

The opinion does not address these concerns, but it defends its holding with a policy argument of its own, warning that the insurer’s “interpretation could incentivize an end run around Section 638 by permitting unscrupulous owners to use the corporate form to collect insurance proceeds without satisfying their delinquent taxes.” Fair point. But, in my view, the problem the court avoids is nothing compared to the problems it creates. If the operator seeks en banc rehearing, I think it deserves a serious look.

Joining Hardiman were Fisher and Greenaway. Arguing counsel were John Mizner for the operator-insured and Arthur Martinucci of Quinn Buseck for the appellants.

 

Cazun v. AG — immigration — affirmance — Rendell

The Third Circuit today affirmed the denial of an asylum applicant’s appeal, upholding the government’s rule that aliens subject to reinstated removal orders are ineligible to apply for asylum. Although the panel was unanimous on the outcome, it divided along ideological lines on the rationale. The majority found the statute ambiguous and applied Chevron deference to the agency’s interpretation, but the concurrence in the judgment found the statute unambiguous and thus that Chevron was inapplicable.

Joining Rendell was McKee; Hardiman concurred in the judgment. Arguing counsel were Keren Zwick of the National Immigrant Justice Center for the asylum applicant and Carmel Morgan for the government.

 

US ex rel. Gerasimos Petratos v. Genentech — civil / qui tam — affirmance — Hardiman

The Third Circuit issued a significant False Claims Act ruling yesterday, affirming on alternative grounds the district court’s dismissal of a pharmaceutical qui tam action.

The appeal arose from a drug company’s marketing of its “multi-billion dollar cancer drug” Avastin; the company’s head healthcare data analyst alleged that the company concealed key information about the drug’s side effects, which resulted in doctors prescribing the drug more often and the government paying out more Medicare claims. The analyst then sued under the False Claims Act.

The district court dismissed the suit on falsity grounds based on its view that the analyst had to prove that how the drug was used had been rejected by the FDA, not by individual doctors. The Third Circuit disagreed, holding that the district court had conflated two different statutory standards. But the Third Circuit affirmed on alternative grounds, holding that the suit failed on materiality grounds under the recent USSC Escobar decision, essentially because the government continued paying out Medicare claims even after the analyst revealed his information. The court concluded, “Petratos’s allegations may be true and his concerns may be well founded—but a False Claims Act suit is not the appropriate way to address them.”

Joining Hardiman were Scirica and Rosenthal SDTX by designation. Arguing counsel were Matthew McCrary of San Francisco for the appellants, Mark Mosier of Covington & Burling for the company, and Weili Shaw for the government.

UPDATE: this post on JDSupra calls Genentech a “gift to qui tam defendants” because it relied on the government’s non-intervention as evidence that the alleged wrong was immaterial. The post asserts that the government chooses to intervene in less than 25 percent of cases, and “No authority has ever suggested … before” that non-intervention suggests immateriality.

New opinion — Third Circuit sides with insurer in asbestos-coverage fight, again rejecting an asserted waiver

General Refractories v. First State Insurance — insurance — reversal — Vanaskie

If you made a list of the most fun things about being a circuit judge, I suspect that “reviewing the district court ruling of a judge who since has become your colleague on the appeals court” would be pretty far from the top.  But it happens, and yesterday it resulted in a unanimous reversal in an asbestos-insurance-coverage appeal.

The dispute arose from a Pennsylvania insurance policy that excluded losses “arising out of asbestos.” The policyholder argued that this only excluded losses related to raw asbestos, not asbestos-containing products. The insurer argued it excluded both.

The district court — Judge Restrepo, before his 2016 elevation to the Third Circuit — sided with the policyholder, ruling that “asbestos” was ambiguous and that the insurer’s asserted exclusion of asbestos-product liability was unenforceable. But yesterday the Third Circuit reversed, holding that, even if “asbestos” meant only raw asbestos, under PA law the words “arising out of” unambiguously encompassed all losses that would not have occurred but for the raw asbestos, thus including asbestos-product losses.

For the second time in less than a week, the court (indeed, the exact same panel) grappled with whether to rest its holding on a position not asserted below, and again it took the more assertive route. The policyholder argued that the insurer waived its but-for causation argument by not raising it below, instead focusing on the meaning of the word asbestos. The Third Circuit ruled that the two arguments were close enough, and alternatively that, even if the causation argument were waived, this was an exceptional circumstance where the public interest would require it to be heard. “Were we to ignore the consistent and explicit meaning assigned to the phrase in Pennsylvania insurance exclusions,” it said, “we would cast doubt on a tradition of interpretation that many parties have relied upon in defining their contractual obligations.”

It’s hard to be sure from the opinion how sound its no-waiver ruling is, but I think the alternative public-interest ruling is wrong. One sentence — “The causation argument is waived so we don’t reach it and nothing in today’s opinion casts doubt on PA’s well-settled rule” — would have protected state law and the waiver rule.

I’d have predicted that the court would be especially unwilling to reverse one of its own this way, but evidently not so.

Joining Vanaskie were Jordan and Krause. Arguing counsel were Theodore Boutrous Jr. of Gibson Dunn for the insurer and Michael Conley of Offit Kurman for the policyholder.

New opinion — plaintiffs failed to present evidence that Delaware’s massive ongoing failure to release its prisoners on time was “callously misguided”

Wharton v. Danberg — prisoner civil rights — affirmance — Greenaway

The Third Circuit today issued a remarkable opinion in a remarkable case, rejecting Delaware inmates’ argument that the state violated the constitution by failing to release a horrifying proportion of its inmates on time. The heart of the opinion comes near the end:

Viewing the facts in the light most favorable to Appellants, we could conclude that over-detentions are rampant in Delaware and that correctional officials are trying, albeit without great success, to tackle that challenge. So far, this is not deliberate indifference. Appellants need more to rescue their claim. They would need to show that Appellees’ efforts to improve COR so obviously miss the mark that pursuing those efforts manifests disregard for the real problem and thereby amounts to deliberate indifference. Such evidence is absent from the record.

The word “discovery” appears once in the opinion, in passing.

Joining Greenaway were Jordan and Rendell. Arguing counsel were Stephen Hampton of Grady & Hampton for the inmates and Michael McTaggart for the state.

 

New opinion — Third Circuit clarifies test for manufacturer-distributor patent disputes, despite the appellant’s waiver

Covertech Fabricating v. TVM Building Prods. — patent — partial affirmance — Krause

The Third Circuit today affirmed on alternative grounds a district court ruling in favor of the manufacturer in a trademark dispute, but it vacated the lower court’s damages calculation. The opinion’s introduction:

Too often the silence of contracting parties must be
filled by the voice of the courts. Such is the case here, where
we are called upon to resolve a trademark dispute in which no
written contract designates ownership, and, in the process, to
clarify the paradigm through which common law ownership
of an unregistered trademark is determined when the initial
sale of goods bearing the mark is between a manufacturer and
its exclusive distributor. The District Court in this case
awarded ownership to the manufacturer, but did so on the
basis of the first use test, and found the distributor liable for infringement and fraud before rejecting its defense of
acquiescence and awarding damages under the Lanham Act.
Because the District Court failed to recognize and apply the
rebuttable presumption of manufacturer ownership that we
conclude pertains where priority of ownership is not
otherwise established, and because the District Court
incorrectly relied on gross sales unadjusted to reflect sales of
infringing products to calculate damages, we will affirm on
alternative grounds as to ownership, will affirm as to fraud
and acquiescence, and will vacate and remand as to damages.

Beyond the merits holdings, the opinion also features notable appellate procedure rulings. The court held that the first-use test did not apply to manufacturer-distributor trademark disputes, but the losing party below never made that argument in district court nor even in its opening brief on appeal. Instead, the Third Circuit itself directed the parties to brief the issue. The court noted the distributor’s waiver, but said “it is necessary and appropriate for us to take up the question of the proper legal test because it is a purely legal question, the resolution of which is in the public interest” (citation omitted).

The court also opted to apply the correct six-factor test on appeal, instead of remanding to give the district court the first crack. It noted that application of the factors was “fully briefed, the parties have confirmed that they would not add to the record on remand, and our application of the test may provide helpful guidance to district courts.”

Joining Krause were Jordan and Vanaskie. Arguing counsel were Brian Shaffer of Morgan Lewis for the appellee manufacturer and J. Michael Baggett of McCann Garland for the appellant distributor.

New opinion — Third Circuit tackles antitrust-jurisdiction issues in pharma reverse-payments appeals

In re: Lipitor Antitrust Litig. — civil / jurisdiction — partial affirmance — Fisher

In two sprawling MDL antitrust class actions involving drug-company reverse payments consolidated into one appeal, the Third Circuit yesterday addressed two antitrust-jurisdiction issues. First, it held that it (not the Federal Circuit) had jurisdiction over suits involving fraudulent procurement and enforcement of patents, where “patent law neither creates plaintiffs’ cause of action nor is a necessary element to any of plaintiffs’ well-pleaded claims.” Second, it held that the district court erred in denying a post-removal motion to remand to state court on the ground that the defendants had potential federal patent-law defenses, because “federal jurisdiction depends on the content of the plaintiff’s complaint, not a defendant’s possible defenses.” The court remanded appeal involving this second issue for jurisdictional discovery.

Joining Fisher were Ambro and Smith. Amongst a list of counsel that ran 10 pages long in the opinion, arguing counsel for the appellants were: Barry Refsin of Hangley Aronchick, Scott Perwin of Florida, David Sorensen of Berger & Montague, James Cecchi of Carrella Byrne, and James Alioto of California. Arguing for the appellees (the pharmaceutical-company antitrust defendants) were Robert Milne of White & Case, Jay Lefkowitz of Kirkland, and Noah Leibowitz of Simpson Thacher.

New opinions

I’m out of the office this week, and next week is the Third Circuit conference, so my posting will be a bit irregular for a while. To wit, here are yesterday’s two published opinions.

In re: Lansaw — bankruptcy — affirmance — Melloy

The first paragraph:

The filing of a bankruptcy petition operates as an automatic stay of debt collection activities outside of bankruptcy proceedings. 11 U.S.C. § 362(a). If “an individual [is] injured by any willful violation of [the] stay,” that individual “shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.” Id. § 362(k)(1). In the present case, Frank Zokaites committed several willful violations of the automatic stay arising from Garth and Deborah Lansaw’s bankruptcy petition. Because of these violations, the Bankruptcy Court awarded the Lansaws emotional-distress damages as well as punitive damages under § 362(k)(1). The District Court affirmed the awards, and Zokaites now appeals. We conclude that § 362(k)(1) authorizes the award of emotional-distress damages and that the Lansaws presented sufficient evidence to support such an award. We also conclude that the Lansaws were properly awarded punitive damages. Accordingly, we will affirm.

Joining Melloy CA8 by designation were Fisher and Krause.

 

Andrews v. Scuilli — civil rights — reversal — Nygaard

The first paragraph:

David Andrews was found not guilty of the crimes for which he was charged. He brought suit against Officer Robert Sciulli for false arrest and malicious prosecution.1 On appeal he contends that the District Court erred by granting summary judgment, on the basis of qualified immunity, in favor of Sciulli. We agree. We will reverse the District Court’s judgment and remand the cause for trial.

Joining Nygaard were Vanaskie and Krause.

New opinion — Third Circuit affirms in pro se ERISA appeal

Secretary USDOL v. Kwasny — ERISA — affirmance — McKee

The Third Circuit today affirmed a district court’s grant of summary judgment in an ERISA case against Richard Kwasny, a former law-firm partner who directed employee retirement-fund contributions into the firm’s general assets.

Joining McKee were Restrepo and Hornak WDPA by designation. The case was decided without argument.

Kwasny is identified in the caption as “Attorney for Appellant,” and is listed on Pacer as “Richard J. Kwasny, Esq.” and coded “Pro Se Atty,” having used on his civil information statement an email address starting with “kwasnylaw@.” Kwasny was suspended in PA for five years in 2014 and disbarred in New Jersey in 2015 for mismanaging client funds and practicing law while on administrative suspension.

New opinion – housing-rights win for emotional-support-dog owners

Revock v. Cowpet Bay West — civil / housing / disability — reversal — Restrepo

The Fair Housing Act’s protection against housing discrimination covers a disabled person’s reasonable and necessary use of an emotional-support animal in one’s home despite a rule prohibiting one, the Third Circuit ruled today. The court reversed a district court grant of summary judgment in favor of the defendant condominium, holding that a plaintiff’s FHA claim survived her death under federal common law and that there was a factual dispute over whether the condominium refused to accommodate. The court also found a factual dispute over whether the defendants — including a neighbor who criticized the plaintiffs on his blog — interfered with the plaintiffs’ housing rights by harassing them after they complained.

The parties did not dispute, and the court did not decide, whether the plaintiffs were disabled or whether the accommodation they requested was reasonable. Suffice to say emotional-support animals are not universally beloved, as this scathing 2014 New Yorker article confirms.

Restrepo was joined by Fuentes and Vanaskie. Arguing counsel were Karin Bentz of St. Thomas for the plaintiffs; James Parker of Florida, Boyd Sprehn of Benham & Chan, and Kyle Waldner of St. Thomas for the defendants, and April Anderson for the government as amicus supporting the plaintiffs.

UPDATE: I’m mighty skeptical that private citizens should be subject to FHA liability for saying mean things online about emotional-support-animal-owning neighbors. I think it’s not unlikely that private citizens will say mean things about today’s opinion.

 

New opinion — Third Circuit affirms denial of prison-phone-service provider’s motion to compel arbitration

James v. Global Tellink — civil / arbitration — affirmance — Hardiman

Global Tel-Link contracts with prisons to provide phone service to inmates. They have been accused by the FCC, at least six state attorney generals, and many many many many others of charging inmates excessive rates, reportedly up to $14 a minute!  (Not to be outdone, the other major prison-phone-service provider reportedly has been sued repeatedly for recording attorney-client legal calls.)

In New Jersey, a group of inmates and family members sued Global Tel-Link for charging rates it alleged were “unconscionable.” GTL sought to dismiss some of the claims based on an arbitration clause in the terms of service it posted online. But at least some of the plaintiffs never saw or assented to the terms of service because they signed up by phone.

Today, the Third Circuit affirmed the district court’s order denying the GTL’s motion to compel arbitration. GTL can’t force the plaintiffs to arbitrate their claims just by telling users that using their service constituted acceptance of their terms, without actually informing them of the terms nor eliciting assent to them.

Joining Hardiman were Chagares and Scirica. The case was decided without argument.

New opinion — Third Circuit rules for defendants on CAFA jurisdiction

Ramirez v. Vintage Pharmaceuticals — civil / class action — reversal — Vanaskie

In 2005, Congress passed the Class Action Fairness Act to make it easier for defendants to keep large class actions from being decided by state courts. Under CAFA, a suit can be eligible for removal if more than 100 plaintiffs seek a joint trial, but consolidation only for pretrial purposes doesn’t qualify.

Today, the Third Circuit ruled in favor of defendants seeking to keep a case in federal court, holding that language in the 100+ plaintiffs’ single complaint that “claims have been filed together . . . for purposes of case management on a mass tort basis” wasn’t clear enough to defeat removal: “Where, as here, more than 100 plaintiffs file a single complaint containing claims involving common questions of law and fact, a proposal for a joint trial will be presumed unless an explicit and unambiguous disclaimer is included.”

Joining Vanaskie were Chagares and Krause. Arguing counsel were Angela Vicari of Arnold & Porter for the defendants and Keith Bodoh of Georgia for the plaintiffs.

New opinions — Third Circuit takes sides in circuit split on federal jurisdiction over suits seeking declaratory and legal relief

Rarick v. Federated Mutual — civil / jurisdiction — reversal — Hardiman

Federal courts have broad discretion to refuse to hear declaratory-judgment suits, but a “virtually unflagging” duty to hear suits seeking legal relief. Today, the Third Circuit addressed the intersection of these two standards, deciding how much discretion federal courts have about whether to hear suits seeking both declaratory and legal relief.

Other circuits have split over what jurisdictional standard to apply to these hybrid declaratory/legal suits. The Seventh and Ninth Circuits have ruled that if the legal claims are not independent of the declaratory claims, the court may decline jurisdiction over the entire suit. Three other circuits apply the virtually-unflagging standard. And one has focused on which claims constitute the “heart of the matter,” and this is the standard that district courts within the Third Circuit had followed, including in the two cases decided in today’s appeal.

Today, the Third Circuit adopted the independent-claim test, reversing the district courts. It explained, ” The independent claim test is superior to the others principally because it prevents plaintiffs from evading federal jurisdiction through artful pleading.”

Joining Hardiman were Chagares and Scirica. Arguing counsel were Charles Spevacek of Minnesota and James Haggerty of Haggerty Goldberg.

 

US v. Repak — criminal — affirmance — Smith

The Third Circuit today issued a 68-page opinion affirming a public official’s conviction for extortion and bribery. Ronald Repak, the longtime head of Johnstown, PA’s redevelopment authority, was convicted of getting contractors who did business with the authority to replace the roof on his home and excavate land for his son’s gym. (Something tells me indicted admitted-new-roof-gift-receiver Philadelphia DA Seth Williams won’t enjoy reading this opinion much.)

The opinion addressed a flurry of claims:

  • The court affirmed admission of other-bad-acts evidence under FRE 404(b), even though the district court had failed to explain how the evidence was relevant to the defendant’s mental state or why the unfair prejudice did not outweigh its probative value.
  • The court affirmed admission of evidence that Repak had an affair, rejecting his FRE 403 claim.
  • The court rejected the defendant’s challenges to the sufficiency of the evidence for the Hobbs Act extortion counts and the bribery counts.
  • The court rejected Repak’s plain-error challenges to the extortion and bribery jury instructions.
  • The court rejected Repak’s argument that the indictment was constructively amended.
  • The court denied Repak’s claim that the prosecutor committed misconduct during closing arguments. The court did say that the prosecutor’s reference to Repak’s affair was “inappropriate, irrelevant to any issue at trial, and unnecessarily prejudicial.”

Joining Smith were McKee and Shwartz. Arguing counsel were Laura Irwin for the government and Timothy Lyon of Pittsburgh for the defendant.

New opinion — Third Circuit vacates Fosamax summary judgment

In re: Fosamax — civil — reversal — Fuentes

Plaintiffs alleged that an osteoporosis drug sold by Merck caused thigh-bone fractures. Merck sought summary judgment, arguing that the plaintiffs’ product-liability claims were preempted because the FDA would not have approved the warning the plaintiffs tendered. Today, the Third Circuit vacated, emphasizing that the predictive preemption defense at issue is “demanding” and that the plaintiffs’ evidence was enough to defeat summary judgment.

Of particular note is this paragraph near the end of the opinion:

There is a deeper problem lurking in the District Court’s decision to grant Merck a merits judgment in all of the MDL cases. A mass tort MDL is not a class action. It is a collection of separate lawsuits that are coordinated for pretrial proceedings—and only pretrial proceedings—before being remanded to their respective transferor courts.170 Some purely legal issues may apply in every case. But merits questions that are predicated on the existence or nonexistence of historical facts unique to each Plaintiff—e.g., whether a particular Plaintiff’s doctor would have read a warning in the Adverse Reactions section and ceased prescribing Fosamax as a result—generally are not amenable to across-the-board resolution. Each Plaintiff deserves the opportunity to develop those sort of facts separately, and the District Court’s understandable desire to streamline proceedings cannot override the Plaintiffs’ basic trial rights.171 As a technical matter, Merck’s actual burden at the summary judgment stage was to prove that there is no genuine dispute in every single MDL case that Plaintiffs’ doctors would have continued to prescribe Fosamax even if the fracture warning had been added to the Adverse Reactions section before May 2009. It could not do so, and the District Court’s grant of summary judgment on the merits was therefore erroneous.

Joining Fuentes were Chagares and Restrepo. The opinion ran 78 pages with 172 footnotes. Superstar arguing counsel were former Assistant to the Solicitor General David Frederick of Kellogg Hansen for the plaintiffs and John Beisner of Skadden Arps for Merck. Audio of the oral argument is here.

New opinions — three civil reversals

The Third Circuit issued three published opinions yesterday, all three reversing at least in part.

Aliments Krispy Kernals v. Nichols Farms — civil / arbitiration — reversal — Fuentes

The Third Circuit remanded for a district court to resolve a factual issue about whether the parties to a contract agreed to arbitration. The district court had denied the motion to enforce arbitration, but the Third Circuit ruled that at least two material factual disputes must be resolved first.

Joining Fuentes were Ambro and Shwartz. The case was decided without argument.

 

Egan v. Delaware River Port Authority — civil / employment discrimination — partial reversal — Shwartz

The Third Circuit vacated a defense verdict in a suit brought under Family and Medical Leave Act, holding that the district court erred in requiring the plaintiff to support his FMLA claim with direct (as opposed to circumstantial) evidence. The court affirmed the defense verdict on the plaintiff’s claim under the Americans with Disabilities Act.

Significantly, Judge Jordan concurred in the judgment, noting his “discomfort” with Chevron deference and urging that the doctrine “deserves another look.” (He expressed similar views in during a public program in January.)

Joining Shwartz was Smith, with Jordan concurring in the judgment. Arguing counsel were Michael Salmanson of Salmanson Goldshaw for the plaintiff, Rachel Goldberg for the government as amicus supporting the plaintiff, and Zachary Davis of Stevens & Lee for the defendant.

 

Carvalho-Grevious v. Delaware State Univ. — civil / employment discrimination — partial reversal — Fisher

A professor sued a university and administrators under Title VII, alleging retaliation for complaining about discrimination. The district court granted summary judgment in favor of all defendants, but the Third Circuit reversed in part, reviving claims against the university and an administrator. The court endorsed the Fourth Circuit’s view that retaliation plaintiffs need only show at the prima facie stage that retaliation was the likely reason for the employer’s adverse action, criticizing the Sixth and Tenth Circuit’s view that such plaintiffs must prove but-for causation.

Joining Fisher were Ambro and Smith. Arguing counsel were Christine Burke of Karpf Karpf & Cerutti for the professor and James Taylor Jr. of Saul Ewing for the defendants.

Three new opinions, including an immigration reversal

Chavez-Alvarez v. AG — immigration — reversal — Ambro

Years after a lawful permanent resident was convicted by a military court of sodomy and other crimes, the government sought to deport him on the theory (among others) that his sodomy conviction was for a crime involving moral turpitude. The BIA upheld removal, “determining that because Chavez-Alvarez’s particular crime was subject to a sentence enhancement because it was committed forcibly, and because the application of the enhancement in his case was the “functional equivalent” of a conviction for the enhanced offense, he was convicted of forcible sodomy.”

Today, the Third Circuit reversed. Applying the categorical approach, the court ruled that a military conviction for sodomy did not require proof of force and, given Lawrence v. Texas, was not a crime involving moral turpitude. The court rejected the argument that the president’s military sentencing guidelines functioned to create separate offenses for categorial-approach analysis.

Joining Ambro were Vanaskie and Scirica. Arguing counsel were Craig Shagin of the Shagin Law Group for the petitioner — by my quick count, this is the fourth CA3 published win for Shagin since 2015! — and Sabatino Leo of the DOJ for the government.

 

Fried v. JP Morgan Chase — civil — affirmance — Ambro

In my book, this is opinion-introduction perfection:

Ginnine Fried bought a home in 2007 for $553,330. It was near high tide in the real estate market, but she had to believe she was getting a bargain, as an appraisal estimated the home’s value to be $570,000. Fried borrowed $497,950 at a fixed interest rate to make her purchase and mortgaged the home as collateral. Because the loan-to-purchase-price ratio ($497,950 / $553,330) was more than 80%, JPMorgan Chase Bank, N.A. (“Chase”), the servicer for Fried’s mortgage (that is, the entity who performs the day-to-day tasks for the loan, including collecting payments), required her to obtain private mortgage insurance. Fried had to pay monthly premiums for that insurance until the ratio reached 78%; in other words, the principal of the mortgage loan needed to reduce to $431,597, which was projected to happen just before March 2016.

We now know that the housing market crashed in 2008, and the value of homes dropped dramatically. Fried, like many homeowners, had trouble making mortgage payments. Help came when Chase modified Fried’s mortgage under a federal aid program by reducing the principal balance to $463,737. The rub was that Chase extended Fried’s mortgage insurance premiums an extra decade to 2026. Whether it could do this depends on how we interpret the Homeowners Protection Act (“Protection Act”), 12 U.S.C. § 4901 et seq. Does it permit a servicer to rely on an updated property value, estimated by a broker, to recalculate the length of a homeowner’s mortgage insurance obligation following a modification or must the ending of that obligation remain tied to the initial purchase price of the home? We conclude the Protection Act requires the latter.

Joining Ambro were Vanaskie and Scirica. Arguing counsel were Jonathan Massey of Massey & Gail (the attorney who won the Chavez en banc last year) for the bank and Antonio Vozzolo of NJ for the homeowner.

 

Edinboro College Park Apts. v. Edinboro University Foundation — antitrust / sovereign immunity — partial reversal — Smith

When apartment owners sued a state university’s foundation and its president for conspiring to monopolize the student-housing market, the defendants asserted they were state actors immune from antitrust liability. Today, the Third Circuit agreed because the university’s anticompetitive conduct conformed to a clearly articulated state policy and the foundations were directed by the university.

Joining Smith were McKee and Restrepo. Arguing counsel were Matthew Wolford of PA for the apartment owners, Matthew McCullough of MacDonald Illig for the foundation, and Kemal Mericli of the PA AG for the president.

 

New opinions — a Title IX blockbuster and a prisoner-civil-rights reversal with a blistering reprimand for the lower court

Two opinions published today — both of them authored by Judge Fisher, both of them partial reversals in favor of civil plaintiffs, and both broadly significant.

Doe v. Mercy Catholic Med. Ctr. — civil / sex discrimination — reversal in part — Fisher

In a major Title IX opinion, the Third Circuit today ruled in favor of a medical resident whose Title IX sex discrimination claims had been dismissed by the district court. The resident alleged that her supervising doctor sexually harassed her and retaliated when she rebuffed him. The court reversed dismissal of claims for retaliation and quid pro quo and affirmed dismissal of a hostile-environment claim on statute of limitations grounds.

First, it ruled that the medical center’s residency program fell within Title IX’s scope, reading education broadly while rejecting the center’s argument that Title IX reaches only principally educational entities. The court listed features for deciding if something is an “education program or activity covered by Title IX:

(A) a program is incrementally structured through a particular course of study or training, whether full- or part-time; (B) a program allows participants to earn a degree or diploma, qualify for a certification or certification examination, or pursue a specific occupation or trade beyond mere on-the-job training; (C) a program provides instructors, examinations, an evaluation process or grades, or accepts tuition; or (D) the entities offering, accrediting, or otherwise regulating a program hold it out as educational in nature.

Second, the court held that Doe’s private causes of action for retaliation and quid pro quo were cognizable under Title IX, rejecting the argument that Title VII’s employment-discrimination provisions (with its elaborate administrative exhaustion requirements) were her exclusive remedy. On this point the court expressly split with the Fifth and Seventh Circuits while joining the First and Fourth Circuits. The court did not reach whether Doe’s private hostile environment claim was cognizable because it held that Doe’s was time-barred, rejecting her argument that her dismissal was part of a continuing violation.

Joining Fisher were Krause and Melloy by designation. Arguing counsel were Joshua Boyette of Swartz Swidler for Doe, Christine Monta for the government as amicus supporting Doe, and Robin Nagele of Post & Schell for the medical center.

 

Pearson v. Prison Health Svc. — prisoner civil rights — partial reversal — Fisher

After an inmate at SCI Somerset in Pennsylvania had a botched surgery for appendicitis, he sued prison and medical staff for Eighth Amendment deliberate indifference, and the district court granted summary judgment for the defendants. Today the Third Circuit ruled in the prisoner’s favor as to one of the defendants and affirmed as to the others.

The court rejected the lower court’s view that expert testimony was always necessary to establish deliberate indifference. The court ruled that lay jurors were capable of deciding that (1) a prison nurse acted with deliberate indifference when he forced the prisoner, screaming in pain, to crawl to a wheelchair to obtain treatment, and (2) delay or denial of treatment for a non-medical reason was deliberate indifference.

The court also “[r]egretfully” criticized Magistrate Judge Keith Pesto and District Judge Kim Gibson (though neither is named in the text of the opinion) for irrelevant editorializing generally to the effect that too many prisoner suits were frivolous:

When we remanded this case, we were hopeful that the Magistrate Judge and District Judge would cease making these kinds of irrelevant, categorical statements for several reasons, including that they are unnecessary and might cast our judicial system in a bad light by leading an observer to question the impartiality of these proceedings. In addition, it is antithetical to the fair administration of justice to pre-judge an entire class of litigants, and we expect courts to conduct, at a minimum, a careful assessment of the claims of each party. By failing to exhibit such an individualized inquiry, these statements disserved the important principle that “justice must satisfy the appearance of justice.” Offutt v. United States, 348 U.S. 11, 13 (1954).

Despite our optimism, and despite our admonishment of these sorts of categorical statements, this commentary continued since we last remanded this case to the District Court. ***

As we noted in Pearson’s prior appeal and will reiterate now, Pearson suffered from two serious medical conditions, and “it does not appear . . . that he filed this lawsuit for recreational purposes or to harass prison personnel.” Pearson, 519 F. App’x at 84. It appears he filed this suit because he genuinely believes that the prison officials acted deliberately indifferent to his medical needs in violation of his constitutional rights. Whether or not he ultimately prevails, equality before the law is one of the founding principles of our government and Pearson deserves to have his case treated as carefully and thoughtfully as any other litigant’s.

While we remain convinced that the Magistrate Judge and District Judge are capable of handling Pearson’s trial without any bias, we trust that our message will be heard on this third remand and that this editorializing will cease going forward.

Extraordinary stuff.

In a footnote, the court added that district judges are responsible for magistrate judges’ reports that they adopt in their entirety, and it noted that district judges and magistrates must recuse, sua sponte, whenever their impartiality might reasonably be questioned!

Joining Fisher were Krause and Greenberg. Arguing counsel were Brandon Verdream of Clark Hill for the prisoner, and Kemal Mericli of the PA AG’s office and Kathryn Kenyon of Meyer Unkovic for the defendants.

New opinion: Third Circuit sets limits on death-row solitary confinement

Williams v. Secretary — prisoner civil rights — affirmance — McKee

In a major opinion issued today, the Third Circuit held that death row inmates have a due process right not to be housed in solitary confinement, without meaningful review, after a court has vacated their death sentences. The court recognized this right and held that it is clearly established (and thus enforceable in a federal civil rights suit) going forward, but it affirmed the district court’s grant of summary judgment against the two prisoners who brought these suits because the right was not clearly established until this opinion.

Both plaintiffs originally were sentenced to death, later won sentencing-phase relief, and in the end were re-sentenced to life in prison. Years passed after the courts vacated their death sentences before their resentencings — 6 years for one of them, 8 years for the other — and the prisons kept them in solitary confinement on death row the whole time, without any regular review of their housing status. The two prisoners brought federal civil rights suits, alleging that keeping them in solitary on death row violated their due process liberty interests. In today’s opinion, the court affirmed on qualified immunity grounds but established a precedent that will bar prisons from continuing this appalling practice.

Joining McKee were Fuentes and Roth. Arguing counsel were James Bilsborrow of New York (a former Smith clerk) for the prisoners and John Knorr III of the OAG for the defendants.

New opinions — two civil affirmances

Issa v. School District — education — affirmance — Fisher

The Third Circuit today affirmed a district court ruling granting a preliminary injunction in favor of international-refugee students who alleged that their school district violated federal law when it denied their request to transfer from a for-profit school for at-risk students into a public school with intensive ESL offerings. It’s an impressive opinion, readable and fact-grounded.

Joining Fisher were Krause and Mellow CA8 by designation. Arguing counsel were Thomas Specht of Marshall Dennehey for the district and Witold Walczak of the PA ACLU for the students.

 

Capps v. Mondelez Global — employment discrimination / FMLA — affirmance — Restrepo

The court ruled for the employer in a family-leave-suit appeal today, holding that “an employer’s honest belief that its employee was misusing FMLA leave can defeat an FMLA retaliation claim.”

Restrepo was joined by Fuentes and Shwartz. Arguing counsel were Christine Burke of Karpf Karpf for the employee, Leslie Greenspan of the Tucker Law Group for the employer, and Jeremy Horowitz of the EEOC as amicus.

New opinion — a big plaintiffs’ standing win in data-breach class action appeal

In re: Horizon Healthcare — class action — reversal — Jordan

The Third Circuit today ruled in favor of a putative class of data-theft victims who sued the company that their data was taken from. The introduction of the Court’s opinion:

The dispute at the bottom of this putative class action began when two laptops, containing sensitive personal information, were stolen from health insurer Horizon Healthcare Services, Inc. The four named Plaintiffs filed suit on behalf of themselves and other Horizon customers whose personal information was stored on those laptops. They allege willful and negligent violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq., as well as numerous violations of state law. Essentially, they say that Horizon inadequately protected their personal information. The District Court dismissed the suit under Federal Rule of Civil Procedure 12(b)(1) for lack of Article III standing. According to the Court, none of the Plaintiffs had claimed a cognizable injury because, although their personal information had been stolen, none of them had adequately alleged that the information was actually used to their detriment.

We will vacate and remand. In light of the congressional decision to create a remedy for the unauthorized transfer of personal information, a violation of FCRA gives rise to an injury sufficient for Article III standing purposes. Even without evidence that the Plaintiffs’ information was in fact used improperly, the alleged disclosure of their personal information created a de facto injury. Accordingly, all of the Plaintiffs suffered a cognizable injury, and the Complaint should not have been dismissed under Rule 12(b)(1).

Joining Jordan was Vanaskie. Judge Shwartz concurred in the judgment based on her view that the plaintiffs’ loss of privacy, apart from any statutory violation, constitutes injury in fact. Arguing counsel were associate Erich Schork of Chicago for the plaintiffs and Kenneth Chernof, litigation co-chair of Arnold & Porter, for the company.

New opinion: Third Circuit affirms dismissal of vehicle-shipping private antitrust suit

In re: Vehicle Carrier Services Antitrust Litig. — antitrust — affirmance — Shwartz

Offhand, I can’t recall ever before seeing a Third Circuit opinion with 95 lawyers listed in the caption. The caption fills the first 11-plus pages of the slip opinion. Holy cannoli, that’s a heap of billable hours to end up at “affirm.”

Broadly, this appeal arose out of a suit brought by auto-industry plaintiffs against vehicle-shipping companies alleging that the shippers colluded to keep up prices. The district court dismissed the suit and today the Third Circuit affirmed: “Because the ocean common carriers allegedly engaged in acts prohibited by the Shipping Act of 1984 … and the Act both precludes private plaintiffs from seeking relief under the federal antitrust laws for such conduct and preempts the state law claims under circumstances like those presented here, the District Court correctly dismissed the complaints.”

Joining Shwartz were Ambro and Fuentes. Arguing counsel were Richard Kilsheimer of New York and Warren Burns of Texas for the appellants, and Mark Nelson of Cleary Gottlieb in D.C., and former Rendell clerk Jason Leckerman of Ballard Spahr for the appellees.

UPDATE: the court issued an amended opinion on 1/26 correcting typos and formatting. I’ve updated the opinion link to go to the revised version.

New opinion — Third Circuit issues major ADEA ruling creating circuit split

Karlo v. Pittsburgh Glass Works, LLC — employment discrimination — partial reversal — Smith

The Age Discrimination in Employment Act protects employees who are 40 and older against age discrimination, and a plaintiff can prove an ADEA violation by showing that that the employer’s action had an age-based disparate impact.

But suppose the employer takes an action that disproportionately impacts only its oldest employees, not all over-40 employees. For example, imagine an employer has a round of layoffs where it terminates lots of its over-60 employees, but keeps enough of its age-40-to-60 employees that, overall, the impact on over-40 employees (i.e. all employees who fall within ADEA’s scope) is proportionate. Can proof of a disparate impact on only the over-60s — a ‘subgroup claim’ — state a valid ADEA age-discrimination claim?

Today, the Third Circuit answered that question in the affirmative. In so holding, it expressly split with the Second, Sixth, and Eighth Circuits, noting, “While we are generally reluctant to create circuit splits, we do so where a “compelling basis” exists.” It’s a tour de force opinion, thorough and clear and persuasive. An explicit circuit split on an important issue makes this a strong candidate for Supreme Court review, naturally.

The court also reversed the district court’s exclusion of a statistics expert under Daubert and FRE 702, summarizing the Daubert standard thus (cites omitted):

“The test of admissibility is not whether a particular scientific opinion has the best foundation, or even whether the opinion is supported by the best methodology or unassailable research.” Instead, the court looks to whether the expert’s testimony is supported by “good grounds.” The standard for reliability is “not that high.” It is “lower than the merits standard of correctness.”

Joining Smith were McKee and Restrepo. Arguing counsel were Samuel Cordes from Pittsburgh for the plaintiffs, David Becker from Chicago for the company, Neal Mollen of Paul Hastings as amicus US Chamber of Commerce supporting the company, and Anne Occhialino of the EEOC as amicus supporting the plaintiffs.

New opinion — a significant Eleventh Amendment immunity reversal

Malandi v. Montclair State Univ. — civil — reversal — Krause

The Third Circuit today held that Montclair State University is an “arm of the state” and thus entitled to Eleventh Amendment immunity from federal suit. The opinion resolves a split among district courts in the circuit and gives a thorough review and application of the court’s Eleventh Amendment precedent applicable to state universities.

Joining Krause were Ambro and Thompson D-NJ by designation. Arguing counsel were Jennifer McGruther for New Jersey and Michael DiChiara of Krakower DiChiara for the appellees.

New opinion — disabled children over 17 don’t qualify for child tax credit

Polsky v. United States — tax — affirmance — per curiam

The Third Circuit today held that parents of disabled children over age 17 are not eligible for the child tax credit under 26 USC 24, only a dependent deduction.

The panel was Shwartz, Cowen, and Fuentes. The case was decided without argument. Published per curiam opinions are rare in the Third Circuit, and my guess is the reason it is per curiam is because the appellant parents were pro se.

New opinion — Third Circuit rules for plaintiff in USERRA suit

Carroll v. Delaware River Port Auth. — civil / employment-discrimination — remand — Fuentes

The federal Uniformed Services Employment and Reemployment Rights Act generally bars employment discrimination on the basis of military service. The Third Circuit today held that plaintiffs in failure-to-promote discrimination suits under USERRA need not plead or prove they were objectively qualified for the promotions. Defendants can assert lack of qualification as a non-discriminatory-justification defense.

Joining Fuentes were Ambro and Shwartz. The case was decided without oral argument.

New opinion — no jurisdiction to hear opt-in plaintiffs’ challenge to FLSA decertification

Halle v. West Penn Allegheny Health Sys. — civil — dismissal — Smith

Hospital employees sued a hospital under the Fair Labor Standards Act for failing to pay them for work during meal breaks. They sought to proceed as an FLSA collective action (analogous to a class action) on behalf of similarly situated employees, but the district court decertified the collective action on the ground that the claimants were not similarly situated. In a prior appeal, the Third Circuit dismissed for lack of appellate jurisdiction, ruling that a decertification order is not appealable and a voluntary dismissal does not make it so. Employees filed a new suit, in which the district court denied collective-active certification on issue preclusion grounds.

The present appeal was brought by employees who tried to opt into the successor suit. The Third Circuit began by detailing what an FLSA collective action is, how it works, and how it differs from a class action, including an affirmative opt-in requirement. After this lucid overview, the opinion sua sponte held that it lacked jurisdiction over the appeal because the appellants’ claims were dismissed without prejudice and thus have no appealable final order. The court rejected the employees argument that it should hear the appeal because the defendants picked off the original plaintiff.

Joining Smith were Ambro and Fisher. Arguing counsel were Nelson Thomas of NY for the employees and David Fryman of Ballard Spahr for the hospital.

New opinions — employment and bankruptcy

FOP Lodge 1 v. City of Camden — employment discrimination — reversal in part — McKee

Camden, NJ, adopted a policing policy they called “directed patrols,” which required officers to make brief passes through specific areas. During these passes officers were to interact with community members and try to get their names and addresses. The local police union filed suit, arguing the policy violated NJ state law barring policing quotas, that officers suffered retaliation for not complying with and protesting against it, and other claims. The district court dismissed on all counts. Today, the Third Circuit affirmed on all grounds except for claims brought under NJ’s employee-whistleblower statute, on which it reversed and remanded.

Joining McKee were Ambro and Scirica. Arguing counsel were Gregg Zeff for the police union and John Eastlack Jr. of Weir & Partners for the city.

 

In re: Energy Future Holdings Corp. — bankruptcy — reversal — Ambro

The introduction to this opinion reads:

We address what happens when one provision of an indenture for money loaned provides that the debt is accelerated if the debtor files for bankruptcy and while in bankruptcy it opts to redeem that debt when another indenture provision provides for a redemption premium. Does the premium, meant to give the lenders the interest yield they expect, fall away because the full principal amount is now due and the noteholders are barred from rescinding the acceleration of debt? We hold no.

A confession: I haven’t the foggiest what that means.

Joining Ambro were Smith and Fisher. Arguing counsel, bankruptcy specialists all, were Philip Anker of Wilmer Cutler for one appellant, Gregory Horowitz (a Stapleton clerk) of Kramer Levin for other appellants, and Andrew McGaan of Kirkland & Ellis for the appellees.

New opinion — Voiding union contracts in budget crisis violated Contract Clause

United Steel Paper & Forestry Rubber Manu. Allied Ind. & Svc. Workers Int’l Union AFL-CIO-CLC v. Gov’t Virgin Is. — labor — reversal — Fisher

The introduction of yesterday’s opinion is a model of concision and clarity:

In 2011, the Virgin Islands faced a severe budget crisis as a result of the economic recession. In response to this crisis, the Government of the Virgin Islands enacted the Virgin Islands Economic Stability Act of 2011 (“VIESA”), 2011 V.I. Sess. Laws 84, which reduced most Government employees’ salaries by 8%. Many of the Government employees, however, were covered by collective bargaining agreements negotiated on their behalf by their representative unions. The collective bargaining agreements, agreed to and signed by the Governor on behalf of the Government, set forth detailed salary and benefit schedules to be paid to covered Government employees.

The unions brought suit alleging that the salary reductions in VIESA constituted an impermissible impairment of the collective bargaining agreements, in violation of the Contract Clause of the United States Constitution. The District Court, after a bench trial, held that VIESA did not violate the Contract Clause. We will reverse.

The court rejected the government’s mootness argument, finding the ‘evading review’ exception inapplicable but ruling that the challenged law’s continuing collateral consequences preclude mootness. On the merits, the court ruled that VIESA violated the Contract Clause because it was unreasonable: the government knew about the financial crisis when it negotiated the contracts it later voided, and it promised the unions it could pay the contract rates in exchange for other concessions. Said the court, “The Contract Clause is not toothless.”

Joining Fisher were Krause and Roth. Arguing counsel were Nathan Kilbert for the unions and Samuel Walker for the government.

UPDATE: News coverage in the St. Thomas Source is here.

New opinions — ripeness and arbitratrability

Marshall v. Commissioner PA DOC — capital / ripeness — dismissal — per curiam

Having already removed his first set of appointed lawyers, a capital inmate moved to remove the next set of lawyers, too. While his motion was still pending, he filed a notice of appeal, and some time after the district court denied the motion. Today, the Third Circuit dismissed the appeal for lack of jurisdiction, holding that the district court’s post-notice ruling did not cure the lack of ripeness.

The opinion was per curiam; the panel was Smith, Hardiman, and Restrepo. The case was decided without argument.

South Jersey Sanitation v. Applied Underwriters Captive Risk Assurance Co. — civil / arbitration — reversal — Greenaway

The Third Circuit today reversed a district’s denial of a motion to compel arbitration, holding that the challenges to arbitration failed because they applied to the contract as a whole instead of the arbitration agreement alone, and thus were issues for the arbitrator to decide instead of grounds to avoid arbitration.

Joining Greenaway were Jordan and Hardiman. Arguing counsel were Thomas Quinn of Wilson Elser for the appellant and Louis Barbone of Jacobs & Barbone for the appellee.

 

New opinion — local official entitled to qualified immunity

Zaloga v. Borough of Moosic — civil rights — reversal — Jordan

The Third Circuit today reversed a district court’s denial of summary judment on qualified-immunity grounds. The introduction:

This case is an appeal from an interlocutory decision denying defendant Joseph Mercatili’s claim to qualified immunity. Dr. Edward Zaloga, who had been engaged in an ongoing feud with local government officials, publicly opposed Mercatili’s reelection as the President of the Moosic, Pennsylvania Borough Council. Mercatili allegedly retaliated against Zaloga by seeking to damage his business interests.

Zaloga brought this § 1983 suit against several county entities and individuals, alleging various constitutional violations, including Mercatili’s retaliation. The United States District Court for the Middle District of Pennsylvania granted the defendants’ motion for summary judgment with respect to all defendants except Mercatili. The Court decided that Mercatili’s claim to qualified immunity depended on disputed facts and would have to be resolved by a jury.

Mercatili now appeals, arguing that he is entitled to qualified immunity because his conduct, even if Zaloga’s allegations are true, did not violate clearly established law. We agree and will reverse and remand for the District Court to grant summary judgment in Mercatili’s favor.

Joining Jordan were Smith and Rendell. Arguing counsel were Joshua Autry of Lavery Law for the appellants and Joseph Healey of O’Malley Harris for the appellees.

New opinion — paying employees for meals doesn’t excuse failure to pay them for overtime

Smiley v. E.I. DuPont — employment — reversal — Rendell

Employees of DuPont sued the company under the FLSA and state law for not paying them overtime for their off-the-clock time donning and doffing their uniforms and consulting with other employees. DuPont argued that it didn’t have to pay them this overtime because instead it paid them for their meal-break time, which it was not legally required to do. It argued that it could use the meal time for which it paid employees to offset the other time for which it didn’t. The district court agreed with DuPont, but today the Third Circuit reversed.

Joining Rendell were Vanaskie and Krause. Arguing counsel were Thomas Marrone for the employees, David Fryman of Ballard Spahr for Dupont, and Rachel Goldberg for the US Department of Labor as amicus curiae.

New opinions — a wiretap-suit-standing shocker and a qui tam reversal [updated]

Schuchardt v. President of the U.S. — civil — reversal — Hardiman

Today the Third Circuit ruled in favor of a solo civil practitioner named Elliott Schurchardt appearing pro se and appealing the denial of a pro se suit he brought against the government on behalf himself and others similarly situated. The pro se filer alleged that the NSA’s electronic monitoring violates the Fourth Amendment. The district court dismissed his suit on standing grounds, but the Third Circuit held that the pro se filer’s allegations were sufficient to survive dismissal on standing grounds, even though he alleged that the harm here resulted from collection of “all or substantially all of the email sent by American citizens by means of several large internet service providers.”

I’m going to go way out on a limb and predict a government rehearing petition and/or cert petition.

Joining Hardiman were Smith and Nygaard. Arguing counsel were Schuchardt (his address in the caption is in Virginia, his website lists Tennessee, and 2015 news coverage says Pittsburgh) pro se, and Henry Whitaker of the DOJ appellate section for the government.

UPDATE: seemingly intent on snatching defeat from the jaws of victory, the miraculously prevailing appellant already has been quoted in this news story as follows:

The appellate court ruling, however, limits his ability to subpoena evidence and depose witnesses, apparently exempting anything with a national security classification.

“If that’s the case, I’m not sure how much further the case can go because obviously, this entire area is classified,” said Schuchardt, who is considering an appeal to the Supreme Court on that part of the decision.

Sigh.

U.S. ex rel. Customs Fraud v. Victaulic — civil / qui tam — reversal — Roth

A divided Third Circuit panel today ruled that a district court erred in denying on futility grounds a qui tam relator’s motion for leave to amend its complaint. This appeal arises from the same amazing sitting I wrote about a couple weeks ago, the tenth published opinion from that panel.

Joining Roth was Krause; Fuentes dissented with vigor, arguing, “Whereas Twombly and Iqbal require plausible allegations of wrongdoing, CFI gives us unsupported assumptions and numerical guesswork.” Arguing counsel were Jonathan Tycko of D.C. for the appellant, Henry Whitaker (same one) for the government as amicus appellant, and Thomas Hill of D.C. for the appellee.

 

 

New opinion — Third Circuit reverses in hard-fought Avaya appeal

Avaya v. Telecom Labs — civil / antitrust — reversal — Jordan

In an appeal that pitted a former Solicitor General against a former president of the American Academy of Appellate Lawyers, a divided Third Circuit today held that a district court erred by granting a mid-trial motion for judgment as a matter of law in this gigantic antitrust and civil suit. The majority slip opinion runs 118 pages. The dissent, another 15 pages, argues in part that the majority should not reverse based on an argument first made in the reply brief.

Jordan was joined by Greenaway; Hardiman dissented. Superstar arguing counsel were Seth Waxman for the appellant and James Martin for the appellees. (Argument audio here.)

New opinion — Third Circuit upholds rejection of generic drug-maker’s antitrust suit

Mylan Pharma. v. Warner Chilcott — antitrust — affirmance — Fuentes

“Product hopping” is a strategy name-brand drug makers use to suppress competition from makers of generic drugs. By changing their drugs in minor ways, they force generic makers to restart the federal approval process to show that their generic drug is the same. The practice has led to antitrust litigation, including today’s case involving an acne drug sold under the unfortunate brand name Doryx.

Today, the Third Circuit affirmed a district court ruling in favor of the antitrust defendant, holding that the plaintiffs failed to show that the defendants had monopoly power and failed to show that their product-hopping was in fact anti-competitive.

Joining Fuentes’s lucid opinion were Shwartz and Barry. Arguing counsel, amidst a phalanx of amici, were Jonathan Jacobson of Wilson Sonsini for the generic drug-maker and John Gidley of White & Case for the antitrust defendants.

New opinion — Third Circuit blocks hospital merger

Federal Trade Comm’n v. Penn State Hershey Medical Ctr. — antitrust — reversal — Fisher

The Third Circuit today ruled that the government was entitled to a preliminary injunction blocking the proposed merger of the two largest hospitals in the Harrisburg, Pa., area. The district court had denied the injunction, ruling that the FTC had failed to properly define the relevant geographic market. The Third Circuit’s review was plenary because the lower court misapplied economic theory. On the merits, it explained:

We find three errors in the District Court’s analysis. First, by relying almost exclusively on the number of patients that enter the proposed market, the District Court’s analysis more closely aligns with a discredited economic theory, not the hypothetical monopolist test. Second, the District Court focused on the likely response of patients to a price increase, completely neglecting any mention of the likely response of insurers. Third, the District Court grounded its reasoning, in part, on the private agreements between the Hospitals and two insurers, even though these types of private contracts are not relevant to the hypothetical monopolist test.

Joining Fisher were Greenaway and Krause. Arguing counsel were William Efron for the FTC and Louis Fisher of Jones Day for the hospitals.

Early news coverage by Pennlive here and Legal Intelligencer here. My prior post on the case (quoting a former FTC general counsel saying the district court’s ruling was “appallingly bad”) is here.

New opinion — a quirky little treaty case

Didon v. Castillo — treaty — reversal — Greenaway

The Hague Convention allows a parent to petition for return of a child who has been removed from her country of “habitual residence” in violation of the parent’s rights. In a clear and thorough opinion, the Third Circuit today held that the Hague Convention does not permit a child to have two “habitual residence” countries at the same time, and ruled that the parent’s petition here must be dismissed because the child’s country of habitual residence does not recognize the Hague Convention.

Joining Greenaway were McKee and Fisher. Arguing counsel were civil appeals lawyer Anthony Vetrano of Vetrano Vetrano & Feinman for today’s losing parent and Michelle Pokrifka of CGA Law Firm for the winning parent.

New opinion — Court rejects necessity requirement for class certification

Gayle v. Warden Monmouth County Corr. Inst. — immigration / class action / jurisdiction — reversal — Krause

Today’s lone published opinion was issued by a panel comprised of Judges Fuentes, Krause, and Roth, which sat in February. It’s the third precedential opinion issued by that panel in the past week (Johnson and Hoffman are the other two), and all three are biggies. I went back and looked, and this is the ninth precedential opinion issued by that panel!  (Others include the kindergardener-abduction case, a criminal-sentencing appeal I described as “exceptionally aggressive,” and a big Fourth Amendment home search case.) I don’t normally track such things, but nine published opinions (and counting?) from one panel sitting has to be some kind of a record.

Anyway, today’s opinion arises from a class action suit challenging a federal statute imposing mandatory detention of aliens who have committed certain crimes. The facts and procedural history are complicated, but the gist of it is that the Court ruled today that the district erred by deciding the merits of the suit long after the class representatives’ claims had become moot, depriving both the district court and the Third Circuit of jurisdiction over the entire case except for a motion for class certification. (Oops.) The Court further held that the district court erroneously denied certification based on its view that a class action was “unnecessary” — noting a circuit split, the court held that necessity is not a freestanding basis for denying certification.

Krause was joined by Fuentes and Roth. Arguing counsel were Judy Rabinovitz of the ACLU Immigrants’ Rights Project for the class and Elizabeth Stevens for the government.

New opinions — affirming class certification and re-issuing an immigration opinion

Williams v. Jani-King of Philadelphia — civil / class action — affirmance — Fisher

The Third Circuit today affirmed a ruling certifying a class in a suit brought by two franchisees who allege that they are employees not independent contractors and thus are entitled to state-law wage protections. The class defendants argued that certification was error because the claims were not fit for class resolution, an issue implicating both commonality and predominance. The panel majority rejected this argument, emphasizing that an interlocutory challenge to certification is not the place to decide the merits. Judge Cowen dissented on commonality grounds, arguing that the majority opinion threatens the viability of franchising.

Joining Fisher was Chagares; Cowen dissented. Arguing counsel were Aaron Vanoort of Minnesota for the class defendants and Shannon Liss-Riordan of Massachusetts for the class plaintiffs.

UPDATE: commentary on JDSupra agreeing with the dissent here.

 

Ordonez-Tevalan v. A.G. — immigration — affirmance –Greenberg

The Third Circuit today granted panel rehearing and issued a new panel opinion in Ordonez-Tevelan v. A.G. The prior opinion is here, my summary is here. The disposition is unchanged, and my quick comparison of the two cases failed to reveal to me what changed. If an eagle-eyed reader alerts me I’ll update this post.

 

 

New opinion — split panel upholds dismissal of suit against officer who confronted and killed man high on PCP

Johnson v. City of Philadelphia — civil rights — affirmance — Fuentes

A lone police office responding to a radio call arrived on the scene to find a man “standing in the street, naked, high on PCP, and yelling and flailing his arms.” Police department policy directed the officer on what to do: “DEESCELAT[E] THE INCIDENT” by waiting for back-up, attempting to de-escalate through conversation, and retreating instead of using force. But, instead, the officer ordered the man to approach him. A confrontation ensued, the man reached for the officer’s gun, and the officer tasered the man and then used his gun to kill him. The man’s estate sued the officer and the city for excessive force.

Today, a divided Third Circuit panel affirmed dismissal of the man’s suit. The majority left open the possibility that an officer’s reckless initiation of an encounter could form the basis for an excessive-force claim, and also that the officer’s violation of department policy may be used to assess the reasonableness of a seizure. But the majority upheld dismissal of the suit on proximate-cause grounds, holding that there was no evidence from which a reasonable jury could find the requisite nexus between the officer’s act and the resulting death.

Judge Roth (notably, the only judge on the panel nominated by a Republican president) dissented, arguing, “By knowingly violating a police department regulation designed to keep mentally disturbed individuals safe, Dempsey set into motion the confrontation that ultimately led to Newsuan’s death – a confrontation whose foreseeability was the impetus for the establishment of Directive 136.”

Fuentes was joined by Krause, with Roth dissenting. Arguing counsel were Armando Pandola Jr. of Abramson & Denenberg for the estate and Craig Gottlieb of the city law department for the city.

Two big new opinions for the civ pro nerds [updated]

The Third Circuit issued two published opinions today, both fascinating if you enjoy tricky civil procedure issues.

 

Hoffman v. Nordic Naturals — civil — affirmance — Fuentes

Imagine you file a suit in state court. The defendant removes the case to federal court and then urges the federal court to dismiss your suit on a procedural ground. You’re sure the federal court has no jurisdiction at all to hear the case and so must remand it. The district court agrees with the defendant that dismissal would be warranted on the procedural ground — and it agrees with you that it has no jurisdiction. So what should the district court do?

Before today, I would have said the answer was dead obvious — the district court has to remand because it lacks jurisdiction. Without jurisdiction, it can’t decide your case, no matter how good it thinks either party’s arguments are, and no matter whether those arguments go to the merits of your claims or instead rest on a procedural ground.

But today the Third Circuit reached the opposite conclusion: “The District Court was . . . permitted to ‘bypass’ the jurisdictional inquiry in favor of a non-merits dismissal on claim preclusion grounds,” because “a court is not required to establish jurisdiction before dismissing a case on non-merits grounds.” That rationale seems wrong to me.

Here’s how the issue arose: plaintiff Harold Hoffman brought class-action lawsuit #1 in state court. The defendants removed the suit to federal court pursuant to CAFA, which gives federal courts jurisdiction to hear class actions big enough to meet certain thresholds, including that the amount in controversy exceeds $5 million. The district court denied Hoffman’s remand motion because it held that the suit met CAFA’s thresholds, and then on the merits it dismissed the suit on the pleadings. (Having dismissed the suit on the merits, the court gave Hoffman a chance to amend his suit, which he didn’t do.)

Hoffman then filed suit #2, again in state court. His new claims were basically the same as his old claims, but this time he defined the class more narrowly. Said the Third Circuit, “The purpose of this change, was, it seems, to reduce the amount recoverable and therefore defeat federal jurisdiction.” The defendant again filed notice of removal, Hoffman sought remand because this time CAFA did not confer jurisdiction, and the district court dismissed suit #2.

Today, the Third Circuit affirmed. But, critically, the court did not hold that the district court had jurisdiction over suit #2. Instead, it held that the district court didn’t need to have subject-matter jurisdiction over the case — that is, the removal need not have been legal — if the court ends up dismissing on non-merits grounds, citing the Supreme Court’s 2007 Sinochem case. Sinochem held that “a court need not resolve whether it has authority to adjudicate the cause (subject-matter jurisdiction) or personal jurisdiction over the defendant if it determines that, in any event, a foreign tribunal is plainly the more suitable arbiter of the merits of the case.” In my view, Sinochem is night-and-day different from what the court does here. Sinochem was just about forum selection and efficiency, not about courts nuking cases they don’t have the power to hear.

The whole point of the second removal was to throw out the second suit based on the federal court’s view of the merits. If the federal court didn’t have jurisdiction over the second suit, then it shouldn’t be the one to decide the preclusive effect of its merits ruling in the first suit. Nor should it decide whether tactical gamesmanship in repackaging the second suit warranted its dismissal. Only a court that has jurisdiction over the second suit — here, the state court — should get to decide those things.

As the hypothetical I began this post with suggests, I read today’s opinion to mean that federal courts can decide and dismiss removed state-filed suits — even if the removal was patently illegal — any time they can find a non-merits basis for dismissal. Suffice to say such a rule would be a big deal.

The introduction to today’s opinion emphasizes that the plaintiff here is a “serial pro se class action litigant.” (See, e.g., this law firm’s web page entitled, “Have you been Sued by Harold Hoffman?”) That fact wasn’t relevant to the court’s legal reasoning, but its prominent mention in the opinion may help explain the outcome here. And, frankly, it isn’t easy to imagine the court being eager to grant a rehearing petition filed by that same serial-filing pro se attorney. That’s a shame, because I think today’s opinion does warrant rehearing.

Joining Fuentes were Krause and Roth. The case was decided without oral argument.

 

UPDATE #1: After I posted the above, I was contacted by the losing party and ultimately retained to prepare a petition for rehearing in the case. I had no connection at all to the case at the time I wrote the post.

UPDATE #2: The same day the court issued its opinion, it also entered an order granting Nordic’s motion under FRAP 38 for sanctions and double its costs for filing an utterly frivolous appeal.

 

Wallach v. Eaton Corp. — civil — reversal — Krause

The Third Circuit issued a wonderfully cogent opinion today deciding a little point of antitrust procedure and a not-so-little point of class action procedure. The opinion’s introduction crisply explains:

In this case, we are called upon to determine, among other things, the fount and contours of federal common law applicable to the assignment of federal antitrust claims and the reach of the presumption of timeliness for motions to intervene as representatives of a class. Consistent with the Restatement of Contracts and the doctrines undergirding federal antitrust law, we hold that an assignment of a federal antitrust claim need not be supported by bargained-for consideration in order to confer direct purchaser standing on an indirect purchaser; such assignment need only be express, and that requirement was met here. We also hold that the presumption of timeliness, that is, the presumption that a motion to intervene by a proposed class representative is timely if filed before the class opt-out date, applies not only after the class is certified, as we held in In re Community Bank of Northern Virginia, 418 F.3d 277, 314 (3d Cir. 2005), but also in in the pre-certification context. Because the District Court failed to apply that presumption and the intervenors’ motion here was timely considering the totality of the circumstances, we conclude the District Court abused its discretion in denying their motion to intervene on that basis. Accordingly, we will reverse and remand for proceedings consistent with this opinion.

On the antitrust standing issue, the holding (antitrust claim assignments don’t require consideration) matters less than how the court got there. The court followed its prior precedent to conclude that the issue was controlled by federal common law. Since no precedent answered the question, the court then had to decide where to look for the content of federal common law. One side urged the court to look at the state law in all 50 states and adopt the prevailing approach; the other side urged it to follow the Restatement. The court decided that the Restatement was the right starting point and accepted the Restatement’s rule.

The class action timeliness-of-intervention rule has broad significance. The way the issue arose is that the defense sought to knock out the named plaintiff for lack of standing, other members of the putative class realized that the whole suit could be thrown out if the defense standing argument prevailed, so other putative class members moved to intervene but the district court said the intervention request was untimely. The Third Circuit disagreed for practical reasons:

[C]lass members would be compelled to intervene in every class action to protect their interests in the event the proposed class representatives are ultimately deemed inadequate”—giving rise to inefficiencies the class action device was designed to avoid  both before and after class certification. Denying the presumption to putative class members also could result in great inefficiencies and reductions in judicial economy in cases like the one before us, which would be dismissed after years of motion practice and discovery, only to be filed anew by plaintiffs who were unable to simply intervene and carry the motion for class certification through to its conclusion. Further, if the presumption of timeliness applied only to certified classes, then motions to intervene brought prior to class certification might be deemed untimely, even though those same motions would be timely if brought years later, after a class was certified.

(Internal quotation marks, alteration, and citation omitted.) Analyzing the timeliness of the motion to intervene itself, the court ruled that it was timely.

Joining Krause were Chagares and Scirica. Arguing counsel were Emmy Levens of Cohen Milstein for the appellants and Pratik Shah, of Akin Gump, for the appellees. On the appellee’s side alone, I count 22 lawyers on the brief from at least 6 household-name big firms. Fun fact: the lawyer who argued the losing side is co-head of Akin Gump’s Supreme Court and appellate practice; the lawyer who argued the winning side is an associate.

New opinions — is the Third Circuit raising the bar for class certification again?

In re: Modafinil Antitrust Litig. — civil / class action — reversal — Smith

Today a divided Third Circuit panel vacated a district court order certifying a class in a pharmaceutical antitrust suit, announcing a new framework for analyzing the size of the class (“numerosity”). The majority directed that the numerosity inquiry “should be particularly rigorous when the putative class consists of fewer than forty members.” It ruled that the district court erred by placing too much weight on the late stage of the proceeding, directing that on remand the court should not take into account the sunk costs of litigation nor the risk of delay if certification were denied. The majority also held that the district court failed to “fully” explore whether class members could just join instead. The panel unanimously rejected the class defendants’ predominance arguments.

Judge Rendell dissented vigorously from the majority’s numerosity analysis, beginning thus:

Today, the Majority concludes that the able District Court judge abused his discretion by purportedly focusing on a consideration that we have never—indeed, by my research, no court has ever—stated it should not consider. How can that be? Furthermore, how can it be that the Majority mischaracterizes the late stage of the proceedings as being the focus of Judge Goldberg’s ruling when his reasoning actually focuses on the considerations that our case law dictates it should? Also how can it be that in analyzing judicial economy district courts are prohibited from considering the stage of the proceedings? I am perplexed. I am similarly perplexed as to why the Majority is directing the District Court on remand to figure out whether joinder is practicable when the appellants have failed to make that case themselves. I therefore respectfully dissent from part III.A of the Majority’s opinion.

This was Rendell’s second major dissent in two weeks.

Joining Smith was Jordan, with Rendell dissenting in part. Arguing counsel were Bruce Gerstein of Garwin Gerstein for the appellees, and Rowan Wilson of Cravath Swaine and Douglas Baldridge of Venable for the appellants.

UPDATE: news coverage on PennRecord.com, describing the court’s ruling as “surprising,” here.

 

Carpenters Health & Welfare Fund v. Management Resource Sys. — civil / labor — reversal — McKee

The Third Circuit today reversed a district court order dismissing a suit challenging a company’s failure to make contributions to employee funds.

Joining McKee were Fisher and Greenaway. Arguing counsel were Stephen Holroyd of Jennings Sigmond for the appellants and Walter Zimolong III for the appellees.

 

In re: Asbestos Pros. Liab. Litig. — civil — reversal in part — Scirica

In 1999, the Supreme Court described asbestos litigation as “elephantine.” Over a decade and a half later, the elephant is still lumbering along.

A worker exposed to asbestos died of lung cancer, and his estate sued the corporation whose equipment contained the asbestos he had been exposed to. In a fact-bound ruling applying Indiana law, the Third Circuit today affirmed dismissal of claims related to some of the equipment but reversed dismissal of claims related to other equipment.

Joining Scirica were McKee and Ambro. Arguing counsel were Robert McVoy from Illinois and Christopher Conley from Georgia.

Three new opinions

Associated Builders v. City of Jersey City — civil — reversal — Krause

Jersey City, NJ, offers tax exemptions to developers, but only if they meet certain labor conditions including using union labor, rejecting strikes and lock-outs, and a set percentage of local hiring. Today, the Third Circuit held that, in enacting the labor conditions, the city was acting as a regulator not a market participant. The ruling reversed the district court and meant that the conditions were reviewable for pre-emption and dormant-Commerce-Clause violation.

Joining Krause were Chagares and Scirica. Arguing counsel were Russell McEwan of Littler Mendelson for the appellants, Zahire Estrella for the city, and Raymond Heineman of Kroll Heineman for an intervenor.

 

Goodwin v. Detective Conway — civil rights — reversal — Fuentes

Rashied Goodwin sued police officers for false imprisonment and malicious prosecution after he was arrested; he alleged that the officers should have known he was innocent because they had a booking sheet indicating he was in jail at the time of the crime. The defendants moved for summary judgment based on qualified immunity, the district court denied the motion, and today the Third Circuit reversed. The court reasoned that the booking sheet did not show that Goodwin was in custody at the relevant time. (I was confused when I read the opinion because the key dates are replaced with empty brackets; I missed fn.6 explaining these are redactions requested by the parties.)

Joining Fuentes were Chagares and Restrepo. Arguing counsel were Eric Pasternack for the officers and Catherine Aiello of Lowenstein Sandler for Goodwin.

 

US v. Adeolu — criminal — affirmance — Vanaskie

The Third Circuit affirmed a criminal sentence, holding that the USSG 3A1.1(b)(1) vulnerable-victim sentencing enhancement does not require actual harm to the victim, only a nexus between the victim’s vulnerabilty and the crime’s success.

Joining Vanaskie were Greenaway and Shwartz. Arguing counsel were Karina Fuentes of the FPD for the defendant and AUSA Jose Arteaga for the government.

 

New opinion — a public-sector-employment affirmance

Mancini v. Northampton Co. — civil / employment-civil rights — affirmance — Restrepo

The Third Circuit today affirmed a district court’s rulings in an employment dispute caused when new local Republican leaders fired a county solicitor who was a Democrat. At trial, the jury ruled in favor of the fired employee on her claims against the county but not those against the individual leaders. The court summarized the key issue thus:

This case requires us to consider whether there is an exception to the ordinary requirements of procedural due process when a government employee with a protected property interest in her job is dismissed as part of a departmental reorganization that results in the elimination of her position. We have not previously considered this so-called “reorganization exception.” We hold that a reorganization exception to constitutional procedural due process cannot apply as a matter of law where, as here, there is a genuine factual dispute about whether the reorganization was pretext for an unlawful termination.

The opinion’s introduction refers to the district judge below as “the able trial judge,” a generous tip-of-the-hat in an opinion authored by a judge who until this year sat in the same district.

Joining Restrepo were Fuentes and Chagares. Arguing counsel were Patrick Reilly of Gross McGinley for the appellee/cross-appellant and David Schwalm of Thomas Thomas & Hafer for the appellant/cross-appellee.

UPDATE: early news coverage here.

New opinion — divided panel rejects waiver argument and orders arbitration

Chassen v. Fidelity Nat’l Financial — civil / arbitration — affirmance — Smith

A divided Third Circuit panel today ruled in favor of a civil defendant seeking to compel individual arbitration (that is, non-class arbitration; the opinion refers to it as bipolar arbitration). The court held that the defendant did not waive its arbitration-clause defense — even though it did not raise the defense in two and a half years of expensive litigation below, and even though it could have but did not raise the arbitration defense to obtain class arbitration the whole time — because an effort to compel individual arbitration would have been futile under then-existing law. The majority ruled that the factors it previously had announced for deciding when a party waived an arbitration defense did not control when the sole reason for the delay in asserting the defense is futility.

Judge Rendell — who, as I’ve observed, has been a major force in the court’s recent en banc litigation — dissented. Her opinion began:

The majority’s opinion is flawed for a clear and obvious reason: it relies on caselaw that has no application here. Therefore, I must respectfully dissent.

In Muhammad v. County Bank of Rehoboth Beach, the New Jersey Supreme Court held that “the presence of the class-arbitration waiver in Muhammad’s consumer arbitration agreement render[ed] that agreement unconscionable.” 912 A.2d 88, 100 (N.J. 2006). Yet, despite the lack of a class arbitration waiver in the arbitration clauses here, the majority holds that a New Jersey court in 2009, at the outset of this case, would have found Muhammad controlling here. I reject that view, and urge you to read Muhammad and the actual arbitration clauses at issue here. Doing so will lead inexorably to one conclusion: this case is not Muhammad, and a motion by the Defendants in 2009 to compel arbitration thus would have been anything but futile. Moreover, the majority has expanded the concept of futility beyond what we as a court should recognize.

Seems like a good bet for a petition for en banc rehearing.

Joining Smith was Roth, with Rendell dissenting. Arguing counsel were Michael Quirk of William Cuker for the appellants and Michael O’Donnell of Riker Danzig for the defendant.

 

Fractured en banc court restores two felons’ gun rights

Suarez v. Attorney General — civil / 2nd Amendment

The en banc Third Circuit ruled today that the federal statute criminalizing gun possession by convicted felons violates the Second Amendment as applied to the two challengers here. It’s the court’s most closely divided en banc ruling since Chief Judge McKee became chief.

On the ultimate outcome, the court split 8 to 7 in favor of the challengers.  The 8 were Ambro with Smith and Greenaway, plus Hardiman with Fisher, Chagares, Jordan, and Nygaard. The 7 were Fuentes with McKee, Vanaskie, Shwartz, Krause, Restrepo, and Roth.

No one rationale commanded a majority of the court. As Eugene Volokh (whose work is cited repeatedly in today’s opinion) ably explains in a blog post here, Hardiman’s 5 embraced a broader view of the Second Amendment, Ambro’s 3 a narrower one.

It’s a fascinating vote split. The court’s most conservative judges voted together, but the moderate and liberal votes were more surprising, which reinforces a broader trend I flagged last year.

The 8-to-7 vote also invites some interesting what-ifs. Judge Rendell went senior over a year ago, and President Obama’s nomination of Rebecca Haywood has languished for almost six months now. If Rendell or Haywood were active judges today, would the en banc court have split down the middle, leaving no precedential decision? It’s possible.

Volokh writes that if the government asks the Supreme Court to grant certiorari, “it’s likely that the court will agree to hear the case.”

Arguing counsel were Patrick Nemeroff for the government, and Alan Gura of Gura & Possessky for the challengers.

 

New opinions — Bridgegate disclosure, taxpayer standing, and antitrust standing

NJ Media Group v. United States — civil — reversal — Jordan

The Third Circuit today vacated a district court order that had required disclosure of the names of the unindicted co-conspirators in the NJ Bridgegate scandal. The opinion explained, “Although the appeal arises out of a matter of high public interest, the issue presented is basic and undramatic.” The court ruled that a prosecution letter identifying the co-conspirators should be treated like criminal discovery, not a bill of particulars, and thus was not subject to public disclosure.

Joining Jordan were Ambro and Scirica. Arguing counsel were Jenny Kramer of Chadbourne & Parke for the appellant, Bruce Rosen of McCusker Anselmi for media groups seeking disclosure, and U.S. Attorney Paul Fishman for the government.

Early news coverage of the opinion by Ted Sherman on NJ.com is here.

 

Nichols v. City of Rehoboth — civil — affirmance — Fisher

A divided Third Circuit panel today held that a taxpayer lacked standing to sue because she failed to show any illegal use of taxpayer funds.

Fisher was joined by Rendell; Cowen dissented. Arguing counsel were David Finger of Finger & Slanina for the appellant and Max Walton of Connolly Gallagher for the appellees.

 

Hartig Drug Co. v. Senju Pharma. — civil / antitrust / class action — reversal — Jordan

The Third Circuit today ruled that a district court erred when it dismissed an antitrust class action suit under F.R.Civ.P. 12(b)(1) on standing grounds, holding that antitrust standing is not an issue of subject-matter jurisdiction. The appeal arose out of an antitrust suit alleging wrongful suppression of generic competition in the sale of medicated eyedrops. The winning argument was not made by the appellant, prompting the court to write, “Remarkably, Hartig neglects to address the argument at all, except to acknowledge that amici have raised it.” The opinion has some sharp words (“simply not so,” “attempt to change the discussion,” “wholly new argument”) for the appellees, too. Quite a victory for amici.

Joining Jordan were Ambro and Greenberg. Arguing counsel were Brent Landau of Hausfeld for the appellant and M. Sean Royall of Gibson Dunn for the appellee.

 

Addie v. Kjaer — civil — affirmance in part — Fisher

The Third Circuit largely upheld a district court’s rulings under Virgin Islands law granting pre- and post-judgment interest but denying attorney’s fees. The court ruled that certain prejudgment interest should have been paid at a statutory rate.

Fisher was joined by Krause and Roth. Arguing counsel were former Rendell clerk Robert Palumbos of Duane Morris for the appellants and Sherry Talton of Texas and Maria Hodge of the Virgin Islands for the appellees.

En banc court — minus two judges listed as voted on rehearing, including the panel author — reverses in Chavez v. Dole Food

Chavez v. Dole Food — civil — reversal — Fuentes

The en banc Third Circuit today unanimously reversed a district court order dismissing a suit by Central American farmworkers over alleged pesticide exposure. The prior panel opinion had come out the other way, with Nygaard joined by Greenaway in the majority and Fuentes dissenting.

Needless to say, it is unusual to see a unanimous en banc ruling that reaches a different outcome than the panel majority did. So what happened? Two things, both interesting.

First, Greenaway switched sides. He joined Nygaard’s panel opinion in favor of Dole, but today he joins the en banc court ruling against Dole. He did not write separately to explain his switch.

Second, Nygaard did not participate. He wrote the panel opinion, and the order granting en banc rehearing stated he would participate, but the docket shows he did not participate in oral argument and he was not a member of the en banc panel today. Also, Hardiman was listed as participating in the en banc vote but was not on the en banc panel for argument or decision.

So, why did Nygaard and Hardiman not participate? Answer: I don’t know. Neither today’s opinion nor the docket entries say.

This is a case with a lot of blue-chip-corporation parties like Dow Chemical and Shell Oil, and it would not be surprising if some of the judges owned stock in one of them and thus had to recuse. Now, it would be surprising to me if such a conflict went unrecognized until after the en banc ruling. (But as I mentioned recently, during now-Justice Alito’s Scotus confirmation proceedings, then-Chief Judge Scirica said in 2005 that CA3 judges had been listed by mistake on en banc corams many times. That could explain well Hardiman but not Nygaard.)

For Nygaard, no potential financial conflicts jump out at me on a quick glance at his 2012 financial disclosure, the most recent of his posted on judicialwatch. But what matters is what he owned in 2016, not 2012, and that is not publicly available. Bottom line, if he recused after writing the panel opinion, I can’t tell why. (It does not appear to be health-related since, for example, his is sitting on argument panels next week.) In any event, his withdrawal is unusual.

As to Hardiman, he disclosed dividend income from Dow Chemical in his 2012 disclosure, also the most recent disclosure up on Judicialwatch, although that does not necessarily mean he still did at the time of this en banc case.

Anyway, I’ve gotten all sidetracked on the composition of the court here and haven’t said a thing about the substance of the opinion. From the introduction (footnote omitted):

Our resolution of this appeal is therefore threefold. First, we conclude that the Delaware District Court abused its discretion under the first-filed rule by dismissing the plaintiffs’ claims with prejudice. Second, we conclude that the Delaware District Court erred by refusing to transfer the plaintiffs’ claims against Chiquita Brands International to another forum. And third, we conclude that the timeliness dismissals entered by the Louisiana District Court do not create a res judicata bar to the plaintiffs’ Delaware suits. As these cases come to us today, there is a serious possibility that no court will ever reach the merits of the plaintiffs’ claims. More than twenty years after this litigation began, we think that outcome is untenable—both as a matter of basic fairness and pursuant to the legal principles that govern this procedurally complex appeal.

Joining Fuentes were McKee, Ambro, Smith, Fisher, Chagares, Greenaway, Vanaskie, Shwartz, Krause, and Restrepo. Arguing counsel were Jonathan Massey of Massey & Gail for the appellants and Andrea Neuman of Gibson Dunn and Steven Caponi (formerly) of Blank Rome for the appellees.

“Although we will affirm … we do so with some reluctance…. [T]he circumstances of this case appear to exemplify what can be described as a flaw in our system of justice”

Curry v. Yachera — civil rights — affirmance– Chagares

The quote that forms the title of this post comes from the introduction of today’s notable opinion upholding the dismissal of a civil rights complaint.

The court summarizes the facts underlying the suit like this (appendix cites and footnotes omitted):

In the fall of 2012, Curry read a newspaper article that stated there was an outstanding warrant for his arrest, related to a theft at a Wal-Mart store in Lower Macungie Township, Pennsylvania. Wal-Mart security employee Kerrie Fitcher identified Curry. Curry insists that he had never been in that Wal-Mart store. Curry called the Wal-Mart store and spoke to a security employee, John Doe, who refused to review the store surveillance video. Curry then called the Pennsylvania State Police and spoke to Trooper Brianne Yachera. Yachera informed Curry that he was going to jail and that the courts would “figure it out.”

On October 29, 2012, Curry was arrested and charged with (1) theft by deception and (2) conspiracy. Unable to afford bail, Curry was jailed. On November 14, 2012, while Curry was still in jail, he was charged with “theft by deception – false imprisonment” by Exeter Township Police Detective Richard McClure. This charge was separate and apparently unrelated to the charges brought by Yachera. Two months later, McClure met Curry in prison, admitted Curry was innocent of the November 14 charges, apologized, and said he would do whatever he could to help. In or about February 2013, McClure’s charges against Curry were dropped, but he remained in jail on the charges brought by Yachera. Curry was told he would need to wait until September 2013 for the case to proceed. During his imprisonment, Curry missed the birth of his child and lost his job. Curry feared losing his home and motor vehicle. He decided to plead nolo contendere to the remaining charges, theft by deception and conspiracy. Following his plea, he was released and returned home.

The court’s analysis begins with this remarkable passage (footnotes omitted):

The broader context of this matter is disturbing, as it shines a light on what has become a threat to equal justice under the law. That is, the problem of individuals posing little flight or public safety risk, who are detained in jail because they cannot afford the bail set for criminal charges that are often minor in nature. One recent report concluded that “[m]oney, or the lack thereof, is now the most important factor in determining whether someone is held in jail pretrial” and that “the majority of defendants cannot raise the money quickly or, in some cases, at all.” By way of example, in New York City in 2013, fifty-four percent of those jailed until their cases were resolved “remained in jail because they could not afford bail of $2,500 or less.” It seems anomalous that in our system of justice, the access to wealth is what often determines whether a defendant is freed or must stay in jail. Further, those unable to pay who remain in jail may not have the “luxury” of awaiting a trial on the merits of their charges; they are often forced to accept a plea deal to leave the jail environment and be freed.

“Curry’s inability to post bail,” the court observed, “deprived him not only of his freedom, but also of his ability to seek redress for the potentially unconstitutional prosecution that landed him in jail in the first place.” The court denied the malicious prosecution claim because his conviction stood. The court did rule that his malicious prosecution claims should have been dismissed without prejudice because his claim will not accrue unless and until his conviction is reversed.

Joining Chagares were Fuentes and Greenberg. The case was decided without oral argument.

 

Auto-Owners Insurance Co. v. Stevens & Ricci — insurance — affirmance — Jordan

A divided Third Circuit panel affirmed a district court ruling in favor of the insurance company in a coverage dispute.

Joining Jordan was Hardiman; Greenaway dissented, arguing that the majority misapplied a rule against aggregation. Arguing counsel were David Oppenheim from Illinois for the appellant and Timothy Tobin from Minnesota for the appellee.

 

New opinions in three civil cases

Black v. Montgomery County — civil rights — reversal — Chagares

The Third Circuit today reversed a district court’s grant of summary judgment in favor of defendants in a remarkable civil rights suit, holding that the plaintiff was seized for purposes of her Fourth Amendment malicious-prosecution claim and that she stated a valid due process claim for fabricated evidence even though she was acquitted at trial. The case arose from what the plaintiff alleged was a badly bungled fire investigation and prosecution; the accused was found not guilty of arson after the jury deliberated less than 40 minutes.

Joining Chagares were Krause and Scirica. Arguing counsel for the appellant was Michael Schwartz of James, Schwartz & Associates; for the appellees, Carol Vanderwoude of Marshall Dennehey, Philip Newcomer of the Montgomery County Solicitor’s Office, and Claudia Tesoro of the Office of the Attorney General.

 

DePolo v. Board of Supervisors — civil — dismissal of appeal — McKee

The Third Circuit held that a ham radio operator’s federal suit challenging denial of permission to build a 180-foot radio tower (!) was precluded by his failure to appeal a prior adverse ruling by a township zoning appeals board.

Joining McKee were Ambro and Scirica. Arguing counsel were Fred Hopengarten of Massachusetts (whose solo telecom practice focuses on antenna and tower issues and whose website includes an image of his Third Circuit bar admission certificate) for the appellant, and Maureen McBride of Lamb McErlane and John Larkin of Gawthrop Greenwood for the appellees.

 

NY Shipping Assoc v. Waterfront Comm’n — affirmance — Nygaard

The Third Circuit upheld district court rulings upholding the NY Waterfront Commission’s power under an interstate compact to require non-discriminatory hiring policies.

Joining Nygaard were Fuentes and Roth (the case was argued on July 9, nine days before Fuentes went senior, so the panel composition comported with 3d Cir. IOP 3.1 even though all three judges were senior at the time the opinion issued). Arguing counsel for various appellants were Donato Caruso of New York and Kevin Marrinan of New York, and Peter Hughes of Ogletree Deakins; arguing counsel for appellees was Phoebe Sorial of the NY Harbor Waterfront Commission.

New opinions: a big immigration win for the government, and a little preemption circuit split

Castro v. U.S. D.H.S. — immigration — affirmance — Smith

The Third Circuit issued a blockbuster immigration ruling today, holding that (1) federal courts lack jurisdiction to review challenges to expedited removal orders, and (2) the statute depriving courts of such jurisdiction does not violate the Suspension Clause.

On the statutory issue, the court joined a majority of courts to address the issue, citing opinions from the Second, Fifth, and Ninth Circuits and rejecting opinions from the Ninth Circuit and two district courts.

On the Suspension Clause issue, the court admitted it was “very difficult.” The opinion summarized the issue thus:

Petitioners argue that the answer to the ultimate question presented on appeal – whether § 1252 violates the Suspension Clause – can be found without too much effort in the Supreme Court’s Suspension Clause jurisprudence, especially in I.N.S. v. St. Cyr, 533 U.S. 289 (2001), and Boumediene v. Bush, 553 U.S. 723 (2008), as well as in a series of cases from what has been termed the “finality era.” The government, on the other hand, largely views these cases as inapposite, and instead focuses our attention on what has been called the “plenary power doctrine” and on the Supreme Court cases that elucidate it. The challenge we face is to discern the manner in which these seemingly disparate, and perhaps even competing, constitutional fields interact. Ultimately, and for the reasons we will explain below, we conclude that Congress may, consonant with the Constitution, deny habeas review in federal court of claims relating to an alien’s application for admission to the country, at least as to aliens who have been denied initial entry or who, like Petitioners, were apprehended very near the border and, essentially, immediately after surreptitious entry into the country.

Joining Smith were Hardiman and Shwartz. Hardiman also briefly concurred dubitante to express doubt about the opinion’s reasoning on the Suspension Clause issue. Arguing counsel were Lee Gelernt of the ACLU Immigrants Rights Project for the appellants and Erez Reuveni for the government. A large number of amici participated, represented by an impressive array of local and national counsel, and the opinion thanked amici for their valuable contributions.

Given its importance, the case is an obvious candidate for a petition for en banc rehearing, but the panel composition makes me suspect that finding a majority for rehearing will be difficult.

Update: Steve Vladeck has early commentary on the opinion in a post on his Just Security blog here. And it’s harsh commentary: “incredibly novel and misleading,” “simply nuts,” and “hopefully, a strong candidate for en banc review.”

Update2: Noah Feldman has this critical commentary (“The decision is wrong, and the U.S. Supreme Court should review it”) on Bloomberg View.

Rosenberg v. DVI Receivables XVII — civil — reversal — Ambro

Today the Third Circuit held that § 303(i) of the bankruptcy code does not preempt state-law claims predicated on the filing of an involuntary bankruptcy petition by non-debtors. The opinion creates a circuit split with the Ninth Circuit.

Joining Ambro were Jordan and Scirica. Arguing counsel were Lewis Pepperman of Stark & Stark for the appellants and Peter Levitt of Florida for the appellees.

New opinion — Third Circuit rejects copyright infringer’s appeal

Leonard v. Stemtech International — civil — affirmance, mostly — Shwartz

A “stem cell photographer” sued a nutritional-supplement company for copyright infringement. He took black-and-white photographs of stem cells through electron microscopes and then colored them in, at a time when few others were able to. The company wanted to use two of his pictures in its magazine but thought his $950 licensing fee was too high, so it sent him $500 and used the images, not just in its magazine but in many other marketing materials. After a trial, the jury returned a verdict in the photographer’s favor for $1.6 million. The company appealed the denial of its new-trial motion on secondary liability and various damages and fees grounds, and Leonard appealed the denial of prejudgment interest and other points. Today the Third Circuit affirmed on all grounds except that it vacated the order denying prejudgment interest. The court found many of the company’s arguments waived for failure to object below or develop them on appeal.

The slip opinion includes the two stem-cell images at issue. The Third Circuit very rarely includes visual images in the bodies of its opinions, but I think it’s a great idea and hope the court does it more often.

Joining Shwartz were Fuentes and Restrepo. Arguing counsel were Kathleen Kushi Carter of Hollins Law for the photographer and Jan Berlage of Gohn Hankey for the company.

En banc court upholds habeas relief in capital case, plus two divided panels and a sentencing affirmance

Another blockbuster August day today, with a big capital-habeas en banc ruling and three panel opinions. Over 300 pages of opinion today.

Dennis v. Secretary — capital habeas corpus — affirmance — Rendell

The en banc Third Circuit today affirmed habeas corpus relief for James Dennis, holding in a landmark habeas opinion that the prosecution suppressed evidence that effectively gutted its case and that the Pa. Supreme Court unreasonably applied Brady v. Maryland when it denied relief. The 2015 panel ruling (Fisher with Smith and Chagares) had ruled for the state.

Joining Rendell were McKee, Ambro, Fuentes, Greenaway, Vanaskie, Shwartz, and Krause, and by Jordan in part. McKee concurred “to underscore the problems inherent in eyewitness testimony and the inadequacies of our standard jury instructions relating to that evidence.” Jordan concurred in part and concurred in the judgment, noting:

Every judge of our en banc Court has now concluded that the Pennsylvania Supreme Court’s contrary determination was not only wrong, but so obviously wrong that it cannot pass muster even under AEDPA’s highly-deferential standard of review. In other words, it is the unanimous view of this Court that any fairminded jurist must disagree with the Dennis I court’s assessment of the materiality and favorability of the Cason receipt. Yet somehow a majority of the Pennsylvania Supreme Court endorsed Dennis’s conviction and death sentence. The lack of analytical rigor and attention to detail in that decision on direct appeal is all the more painful to contemplate because the proof against Dennis is far from overwhelming. He may be innocent.

Fisher dissented, joined by Smith, Chagares, and Hardiman, and Hardiman also authored a dissent that Smith and Fisher joined. Arguing counsel were Amy Rohe of Reisman Karron for Dennis and Ronald Eisenberg of the Philadelphia D.A.’s office for the state.

 

Watson v. Rozum — prisoner civil rights — reversal in part — McKee

A divided Third Circuit panel today ruled in favor of a prisoner alleging a First Amendment retaliation claim.

Joining McKee was Ambro; Ambro also concurred, explaining the court’s rejection of caselaw from the Fifth and Eighth Circuits and its disavowal of prior non-precedential circuit rulings. Hardiman dissented. Arguing counsel were Kemal Mericli of the Pa. A.G.’s office for the state and former Fisher clerk Ellen Mossman of Dechert for the prisoner.

 

NAACP v. City of Philadelphia — First Amendment — affirmance — Ambro

It’s unusual enough for the same panel to issue two precedential opinions on the same day, but it’s rare indeed for the same judge to dissent in both cases. But so it was here, where Hardiman again dissented from a McKee-Ambro majority. In this case, the majority affirmed a district court ruling that Philadelphia’s policy of banning non-commercial advertising at its airport violates the First Amendment.

Arguing counsel were Craig Gottlieb for the city and Fred Magaziner of Dechert (who clerked for Rosenn) for the challengers.

 

US v. Carter — criminal — affirmance — Shwartz

The Third Circuit affirmed a district court criminal sentence applying a sentencing enhancement for maintaining a stash house. The defendant had argued he did not maintain the stash house because he did not own or rent the house and did not pay for its operation from his own funds.

Joining Shwartz were Fuentes and Restrepo. The case was decided without oral argument.

New opinions — habeas corpus relief and three affirmances

OFI Asset Management v. Cooper Tire — civil — affirmance — Jordan

In a 51-page opinion, the Third Circuit today rejected an appellant’s challenge to the district court’s management of a complex securities-fraud class action. The court criticized the clarity appellant’s underlying complaint, then wryly observed:

Now that OFI [the plaintiff-appellant] has come to us with the same kind of broad averments that drove the District Court to demand specificity, we find ourselves more than sympathetic to that Court’s position.

The court also rejected a long list of intensely factbound substantive arguments.

Joining Jordan were Ambro and Scirica. Arguing counsel were James Harrod of Bernstein Litowitz for the appellants and Geoffrey Ritts of Jones Day for the appellees.

 

Goldman v. Citigroup Global — civil — affirmance — Jordan

The Third Circuit affirmed dismissal of a securities suit for lack of subject-matter jurisdiction, rejecting the plaintiffs’ arguments under Grable & Sons v. Darue Engineering that the court had jurisdiction despite the absence of a federal cause of action. The court refused to be bound by language in a prior precedential opinion such “a summary and unexplained jurisdictional ruling” where jurisdiction was not in dispute has no precedential effect. The court also rejected the appellants’ argument that an arbitration panel’s manifest disregard for the law created a federal-question jurisdictional hook.

Joining Jordan were McKee and Roth. Arguing counsel were Richard Gerace for the appellants and Brian Feeney of Greenberg Traurig for the appellees.

 

Dempsey v. Bucknell University — civil rights — affirmance — Krause

College student Reed Dempsey was arrested after another student accused him of assaulting her. The affidavit of probable cause accompanying the criminal complaint “recklessly omitted” certain facts. After the charges were later dropped, Dempsey brought a civil rights suit alleging that the arrest violated his Fourth Amendment rights.

Today, the Third Circuit affirmed summary judgment against Dempsey because, even considering the omitted facts, a reasonable jury could not find lack of probable cause to arrest. The court rejected Dempsey’s argument that, in analyzing a probable cause issue at summary judgment, a court must ignore unfavorable disputed facts. It held that, “when a court determines that information was asserted or omitted in an affidavit of probable cause with at least reckless disregard for the truth, it must perform a word-by-word reconstruction of the affidavit.” It ruled that information was recklessly omitted, reconstructed the affidavit to include it, and held that the any reasonable juror would find that the reconstructed affidavit established probable cause.

Joining Krause were Vanaskie and Shwartz. Arguing counsel were Dennis Boyle (formerly) of Fox Rothschild for Dempsey and James Keller of Saul Ewing for the defendants.

 

Brown v. Superintendent SCI Greene — habeas corpus — reversal — Ambro

The introduction of today’s opinion granting habeas corpus relief:

This case has a familiar cast of characters: two co-defendants, a confession, and a jury. And, for the most part, it follows a conventional storyline. In the opening chapter, one of the defendants (Miguel Garcia) in a murder case gives a confession to the police that, in addition to being self-incriminating, says that the other defendant (Antonio Lambert1) pulled the trigger. When Lambert and Garcia are jointly tried in Pennsylvania state court, the latter declines to testify, thereby depriving the former of the ability to cross-examine him about the confession. The judge therefore redacts the confession in an effort to comply with Bruton v. United States, 391 U.S. 123 (1968). As a result, when the jury hears Garcia’s confession, Lambert’s name is replaced with terms like “the other guy.” The idea is that the inability to cross-examine Garcia is harmless if the jury has no reason to think that the confession implicates Lambert.

During closing arguments, however, there is a twist when the prosecutor unmasks Lambert and reveals to the jurors that he has been, all along, “the other guy.” Now, instead of a conclusion, we have a sequel. Based on a Sixth Amendment violation caused by the closing arguments, we conclude that Lambert is entitled to relief. We therefore remand so that the District Court can give Pennsylvania (the “Commonwealth”) the option either to retry or release him.

In holding that the Bruton error was not harmless, the court noted that the prosecution’s key witness had flaws and rejected the state’s argument that error was harmless because the jury already knew about these other flaws and believed the witness anyway.

Joining Ambro were Krause and Nygaard. Arguing counsel were Ariana Freeman of the EDPA Federal Community Defender for Brown and Susan Affronti of the Philadelphia DA for the state.

New opinions — a rare plain-error reversal of a criminal sentence, and an expansion of disabilities-suit exhaustion

US v. Dahl — criminal — reversal — Scirica

The Third Circuit today held that it was plain error for the district court to sentence a criminal defendant as a sex-offender recidivist under USSG § 4B1.5. The district court had focused on the actual conduct underlying the defendant’s prior convictions in deciding whether his prior crimes qualified as sex offense convictions, but the Third Circuit held that courts are required instead to apply the categorical approach, focusing on whether the elements of the prior crime necessarily qualify, just as in the armed-career-criminal-enhancement context.

The court disavowed dicta from its 2012 ruling in Pavulak purporting to apply a modified-categorical approach. It reversed under plain error, even though it was undisputed that this defendant’s prior acts would have qualified as sex offenses, stating, “We generally exercise our discretion to recognize a plain error in the misapplication of the Sentencing Guidelines.”

Joining Scirica were Chagares and Krause. Arguing counsel were Brett Sweitzer of the Federal Community Defender in Philadelphia for the defendant and Bernadette McKeon for the government.

 

S.D. v. Haddon Heights Bd. of Educ. — civil / education / disability — affirmance — Greenaway

The Individuals with Disabilities Education Act is one of many constitutional or statutory protections against disability-related discrimination. The IDEA requires plaintiffs to administratively exhaust their claims before they can file suit. In its 2014 ruling in Batchelor, the Third Circuit held that the IDEA exhaustion requirement applies to claims that are raised under other statutes but which arise from rights explicitly protected by the IDEA. Today, the court extended Batchelor “narrow[ly]” to hold that IDEA’s exhaustion requirement also applies to non-IDEA claims that are “educational in nature and implicate services within the purview of the IDEA,” even when they “do not . . . arise from their enforcement of rights explicitly under the IDEA.”

Joining Greenaway were Jordan and Hardiman. Arguing counsel were Sarah Zuba of Reisman Carolla for the appellants and William Donio of Cooper Levenson for the appellee.

Three new opinions — antitrust, criminal sentencing, and prisoner civil rights

It’s mid-August, so clerkships are ending and opinions are issuing thick and fast. Three more today, including a significant prisoner-rights opinion.

Deborah Heart & Lung Ctr. v. Virtua Health — civil / antitrust — affirmance — Roth

A dispute between two health care providers over patient referrals led one of them to bring an antitrust suit against the other. The district court ruled for the defendant, and today the Third Circuit affirmed. The opinion begins, “In antitrust suits, definitions matter,” and the court found that the plaintiff failed to meet its own undisputed definitions of the relevant products and markets. The court stated that it wrote in order to clarify the plaintiff’s burden under Section 1 of the Sherman Act when the plaintiff doesn’t allege that the defendants have market power: such plaintiffs must show anti-competitive effects on the market as a whole.

Joining Roth were Fuentes and Krause. Arguing counsel were Anthony Argiropoulos of Epstein Becker for the appellant and Philip Lebowitz of Duane Morris for the appellees.

US v. Jones — criminal — affirmance — Hardiman

When defendants commit a crime while they are on supervised release, they get a new, revocation sentence, and the length of that sentence depends on the seriousness of the original offense. But what if the seriousness of the offense has changed between the time of the original conviction and the time of the revocation sentencing?

Jermaine Jones was sentenced back in 2000 as an armed career criminal. Since that time, the Supreme Court decided cases that Jones says would make him ineligible to be sentenced as an armed career criminal today. So when Jones violated the terms of his supervised release and faced revocation sentencing, the sentencing court had to decide how to calculate his revocation sentence now–as a career criminal or not? Jones argued that he should be sentenced today based on how his original offense would be classified today; it would be unconstitutional to sentence him as an armed career criminal now, so it would be wrong to classify him now as an armed career criminal when imposing a revocation sentence. The government argued he should be sentenced today based on how his offense was classified at the time.

Today, the Third Circuit agreed with the government and affirmed, holding that it was correct to classify Jones as an armed career criminal for purposes of calculating his revocation sentence.

Hardiman was joined by Smith (Sloviter also had been on the panel before she assumed inactive status). The case was decided without oral argument.

 

Parkell v. Danberg — prisoner civil rights — reversal in part — Chagares

A Delaware inmate fell and seriously injured his elbow. In the suit he eventually filed, he alleged a disturbing year-long ordeal of mistreatment and neglect by prison guards and health-care staff. He also alleged that his Fourth Amendment rights were violated by three-times-daily visual body cavity searches even though he had no contact with anyone. The district court granted summary judgment for the defendants.

Today in a 38-page opinion the Third Circuit reversed summary judgment on the Fourth Amendment cavity-searches claim, holding that the Fourth Amendment gives inmates a “very narrow” right to bodily privacy and that the prisoner here may be able entitled to prospective injunctive relief. The court affirmed summary judgment on his Eighth Amendment conditions-of-confinement and deliberate-indifference claims, as well as his effort to recover money damages on his Fourth Amendment claim, essentially because the pro se inmate had failed to marshal enough proof about who was actually responsible.

Joining Chagares were Fisher and Cowen. Arguing counsel for the inmate were Suzanne Bradley and former Barry clerk Brendan Walsh of Pashman Stein, who the court thanked for the quality of their pro bono representation. Counsel for the defendants were Devera Scott of the Delaware AG’s office and Chad Toms and Daniel Griffith of Whiteford Taylor.

New opinion — Third Circuit affirms denial of class certification in suit alleging that Widener law school advertised misleading graduate-employment stats

Harnish v. Widener Univ. School of Law — civil / class action — affirmance — Chagares

Six recent graduates of Widener University School of Law filed a class action against the law school, alleging:

Between 2005 and 2011, Widener reported that 90-97% of its students were employed after graduation. These numbers were widely and deliberately advertised in print and online publications, along with oral presentations, targeting prospective students. But in reality, only 50-70% of Widener graduates ended up in full-time legal positions, which Widener knew.

They alleged that these misleading employment statistics let Widener charge higher tuition. The district court denied class certification, finding that common questions did not predominate and that the named plaintiffs’ claims were not typical of the proposed class, and the plaintiffs filed for interlocutory review.

Today, the Third Circuit affirmed. The court rejected the plaintiffs’ argument that the district court’s predominance review was too demanding, stating that a court’s pre-certification predominance analysis must be rigorous and must consider the merits to the extent of predicting whether the class-wide evidence on the predominant issues will be sufficient to win. The court ruled that the plaintiffs failed predominance because their damages theory was non-cognizable under applicable state law. Although the court agreed with the plaintiffs that the district court mistakenly focused on the fact that graduates got fulltime legal jobs, it found the error harmless.

Joining Chagares were Krause and Barry. Arguing counsel were David Stone of Stone & Magnanini for the plaintiffs and Thomas Quinn of Wilson Elser for the law school.

 

 

New opinions — Cosby unsealing appeal dismissed as moot, plus a civil rights attorney-fees reversal

Constand v. Cosby — civil / justiciability — dismissal — Ambro

Sometimes I can’t summarize a case more clearly than the opinion does itself. The problem occurs frequently with Ambro opinions. To wit:

William H. Cosby, Jr., appeals the District Court’s order unsealing certain documents that reveal damaging admissions he made in a 2005 deposition regarding his sexual behavior. There was no stay of that order, and the contents of the documents received immediate and wide publicity. While the parties dispute whether the District Court properly balanced the public and private interests at stake in unsealing the documents, we must decide at the outset whether Cosby’s appeal has become moot due to the public disclosure of their contents. The Associated Press (the “AP”) argues in favor of mootness because resealing the documents after they have already become public will have no effect. Cosby claims this is not the case for two primary reasons, as resealing the documents would (1) at least slow the dissemination of their contents and (2) might affect whether they can be used against him in other litigation. For the reasons that follow, we conclude that the appeal is moot.

Interestingly, the opinion relies in part on the results of a Google search performed the Friday before the opinion issued, including what looks to me like the first-ever circuit citation to Deadspin.

The court in a footnote expressed “serious reservations” about the district court’s reasoning that unsealing the documents was supported by Cosby’s image as a “public moralist,” a phrase the court described as “vague and undefined” and having “no basis in our jurisprudence.”

Joining Ambro were Smith and Krause. Arguing counsel were George Gowen III of Cozen O’Connor for Cosby and Gayle Sproul of Levine Sullivan for AP.

 

Raab v. Ocean City — civil / attorney’s fees — reverse in part — Chagares

A two-judge Third Circuit panel today held that a settling civil-rights plaintiff can be a prevailing party eligible to recover attorney’s fees where the district court dismissed the suit sua sponte in an order incorporating and retaining jurisdiction over the private settlement, even though the district court entered no consent decree and apparently did not review the settlement before entering its order.

Joining Chagares was Restrepo; Van Antwerpen was on the panel when the case was orally argued but died before the opinion issued. Arguing counsel were Paul Rizzo of DiFrancesco Bateman for the plaintiff, A. Michael Barker of Barker Gelfand for one defendant, and Thomas Reynolds of Reynolds & Horn for another defendant.

Three new opinions, featuring two judges writing separately on substantial standing and waiver issues

Freedom From Religion Foundation v. New Kensington Arnold S.D. — civil / First Amendment —  reversal in part — Shwartz

For the past 60 years, a public high school in Pennsylvania has a had a granite monument on school grounds inscribed with the Ten Commandments. A student, a parent, and a group dedicated to the separation of church and state sued the school, alleging that the monument violated the Establishment Clause, but the district court dismissed the suit on standing and mootness grounds. Today, the Third Circuit reversed in part, holding that the parent had standing because she had direct contact with the monument and remanding to determine whether the parent was a member of the group.

Joining Shwartz were Smith and Hardiman; Smith concurred dubitante in a lengthy opinion explaining his doubt that a claim for nominal damages should suffice to confer standing or overcome mootness.

Arguing counsel were Marcus Schneider of Steele Schneider for the appellants, Anthony Sanchez for the school district, and Mayer Brown associate Charles Woodworth for amicus.

 

NLRB v. Fedex Freight — labor — petition denied — Scirica

A group of Fedex Freight drivers voted to unionize but Fedex refused to bargain with them, arguing that another group of employees had to be included, too. The NLRB ruled against Fedex and Fedex filed a petition for review. Today, a divided Third Circuit panel denied the petition for review. Apart from the merits issues, the majority and concurring opinions feature an important back-and-forth about when cursory presentation of an argument in district court will result in waiver on appeal.

Joining Scirica was Ambro; Jordan concurred in part and concurred in the judgment, explaining his view that Fedex waived one of its central arguments below by making it only in passing in a footnote. Arguing counsel were Milakshmi Rajapakse for the NLRB and Ivan Rich Jr. for Fedex.

 

US v. Stevenson — criminal — affirmance — Hardiman

The Third Circuit today affirmed a criminal defendant’s conviction and sentence, rejecting a series of challenges including his argument that the dismissal of the charges against him for a speedy-trial violation should have been with prejudice, not without. The court also held that indictment defects are subject to harmless error analysis, overruling its own prior precedent based on intervening Supreme Court precedent and splitting with the Ninth Circuit.

Joining Hardiman were Smith and Shwartz. The case was decided without argument.

New Jersey clobbered in sports-betting en banc

NCAA v. Governor — civil — affirmance — Rendell — en banc

The en banc Third Circuit today rejected New Jersey’s effort to legalize sports betting, holding that the effort violated the Professional and Amateur Sports Protection Act and that PASPA did not violate constitutional anti-commandeering principles. The en banc ruling came out the same way as the earlier panel ruling.

A couple quick observations.

First, New Jersey got pasted. They came into en banc rehearing with reason to be fairly confident about two votes (Fuentes and Vanaskie, the dissenters from Christie I and the Christie II panel), so they needed to pick up another 5 votes for an en banc majority. They picked up zero. Their position was built around business and federalism, but they failed to pick up a single Republican-nominated judge. For New Jersey and for state-sports-gambling advocates, today’s outcome was a disaster.

Second, there was some speculation last month by prominent legal experts (here and here) that the court’s slowness in issuing the opinion gave reason to think New Jersey would win. That speculation proved badly off the mark.

New Jersey reportedly will to petition for Supreme Court review, but one supporter admits it’s a “long shot.” Indeed.

New opinion — Third Circuit rejects challenge to gas pipeline permits

Delaware Riverkeeper Network v. Secretary — environmental — petition denial — Roth

The Third Circuit today rejected environmentalist petitioners’ challenges to permits for interstate natural gas pipelines in New Jersey and Pennsylvania. The court also rejected various justiciability and sovereign immunity arguments raised by the respondents.

Joining Roth were Greenaway and Scirica. Arguing counsel were Aaron Stemplewicz of the Delaware Riverkeeper Network and Edward Lloyd of Columbia Law School for the environmentalist petitioners, Joseph Cigan III and Lewin Weyl for the state agency respondents, and John Stoviak of Saul Ewing and Christine Roy of Rutter & Roy for the industry respondents.

New opinions — an en banc ruling in the Double Eagle gold coins case, plus an immigration case

Langbord v. US Dept. of the Treasury — civil — affirmance — Hardiman

The en banc Third Circuit ruled that the government was allowed to keep 10 extremely rare and valuable Double Eagle gold coins it seized from the family that had handed them over for authentication. Previously a divided panel (Rendell and McKee with Sloviter dissenting) had ruled for the family. It’s an unusual en banc case in that covers a dizzying list of appellate issues, many of them fact-bound.

The court split 8+1 to 3. Joining Hardiman were Ambro, Fuentes, Smith, Fisher, Chagares, Vanaskie, and Shwartz. Jordan concurred in part and concurred in the judgment, describing the Mint’s strategy of claiming the coins without judicial authorization as “a bad idea.” Rendell with McKee and Krause dissented, criticizing the majority’s reasoning as “at best cryptic and, at worst, sets an incorrect and dangerous precedent that would allow the Government to nullify CAFRA’s provisions at will.”

Arguing counsel were Barry Berke for the family and Robert Zauzmer for the government.

An interesting and odd case.

 

Sunday v. AG — immigration — petition denied — Chagares

The Third Circuit held that the Immigration and Nationality Act does not grant the Attorney General authority to grant a waiver of inadmissibility, and it held that removal cannot be unconstitutionally disproportionate punishment because it is not punishment.

Joining Chagares were Fisher and Barry. Arguing counsel were Keith Whitson of Schnader Harrison in Pittsburgh for the petitioner and Andrew Oliveira for the government.

New opinion — restitution award against child-porn producer does not bar later civil suit

Doe v. Hesketh — civil — reversal — Greenaway

Matthew Mancuso adopted a five-year-old girl, sexually abused her, took photos and videos of the abuse, and traded this child pornography online. He was convicted of sexual exploitation of a minor and received a sentence that included $200,000 in restitution to the victim. The victim later sued Mancuso under 18 USC 2255, but the district court held that the civil suit was barred by the prior restitution award. Today, the Third Circuit reversed, holding that section 2255 allows victims to sue for damages even if they already have received restitution for the same conduct.

Joining Greenaway were Scirica and Roth. Arguing counsel were Sidney Moore of Georgia for the appellant and Stanley Greenfield of Greenfield & Kraut for the appellee.

New opinion — the circuit’s next big internet-privacy opinin

In re: Nickelodeon Consumer Privacy Litig. — civil — partial affirmance — Fuentes

The opinion’s cogent introduction:

Most of us understand that what we do on the Internet is not completely private. How could it be? We ask large companies to manage our email, we download directions from smartphones that can pinpoint our GPS coordinates, and we look for information online by typing our queries into search engines. We recognize, even if only intuitively, that our data has to be going somewhere. And indeed it does, feeding an entire system of trackers, cookies, and algorithms designed to capture and monetize the information we generate. Most of the time, we never think about this. We browse the Internet, and the data-collecting infrastructure of the digital world hums along quietly in the background.

Even so, not everything about our online behavior is necessarily public. Numerous federal and state laws prohibit certain kinds of disclosures, and private companies often promise to protect their customers’ privacy in ways that may be enforceable in court. One of our decisions last year, In re Google Inc. Cookie Placement Consumer Privacy Litigation, addressed many of these issues. This case addresses still more.

This is a multidistrict consolidated class action. The plaintiffs are children younger than 13 who allege that the defendants, Viacom and Google, unlawfully collected personal information about them on the Internet, including what webpages they visited and what videos they watched on Viacom’s websites. Many of the plaintiffs’ claims overlap substantially with those we addressed in Google, and indeed fail for similar reasons. Even so, two of the plaintiffs’ claims—one for violation of the federal Video Privacy Protection Act, and one for invasion of privacy under New Jersey law—raise questions of first impression in our Circuit.

The Video Privacy Protection Act, passed by Congress in 1988, prohibits the disclosure of personally identifying information relating to viewers’ consumption of video-related services. Interpreting the Act for the first time, we hold that the law permits plaintiffs to sue only a person who discloses such information, not a person who receives such information. We also hold that the Act’s prohibition on the disclosure of personally identifiable information applies only to the kind of information that would readily permit an ordinary person to identify a specific individual’s video-watching behavior. In our view, the kinds of disclosures at issue here, involving digital identifiers like IP addresses, fall outside the Act’s protections.

The plaintiffs also claim that Viacom and Google invaded their privacy by committing the tort of intrusion upon seclusion. That claim arises from allegations that Viacom explicitly promised not to collect any personal information about children who browsed its websites and then, despite its assurances, did exactly that. We faced a similar allegation of deceitful conduct in Google, where we vacated the dismissal of state-law claims for invasion of privacy and remanded them for further proceedings. We reach a similar result here, concluding that, at least as to Viacom, the plaintiffs have adequately alleged a claim for intrusion upon seclusion. In so doing, we hold that the 1998 Children’s Online Privacy Protection Act, a federal statute that empowers the Federal Trade Commission to regulate websites that target children, does not preempt the plaintiffs’ state-law privacy claim.

Accordingly, we will affirm the District Court’s dismissal of most of the plaintiffs’ claims, vacate its dismissal of the claim for intrusion upon seclusion against Viacom, and remand the case for further proceedings.

Joining Fuentes were Shwartz and Van Antwerpen. Arguing counsel were Jason Barnes for the appellants, David O’Neil of Debevoise & Plimpton and Michael Rubin of Wilson Sonsini for appellees, and Alan Butler of the Electronic Privacy Information Center and Jeffrey Wall of Sullivan & Cromwell for amici.

Third Circuit revisits Lehman Brothers in another must-read sanctions opinion

Roberts v. Ferman — civil — affirmance — Smith

Fellow Third Circuit enthusiasts will recall the court’s ruling last year in Lehman Brothers, where the court held that a litigant’s failure to include a transcript in the appellate record resulted in forfeiture of the litigant’s claim. The ruling sparked much discussion, some of it critical of the opinion, some of it on this blog (see for example my post and this Third Circuit Bar Association newsletter article by Howard Bashman and me).

Today, the Third Circuit revisited Lehman Brothers, vigorously reaffirming the ruling but also emphasizing its narrowness. The court tartly noted, “we did not cavalierly hold that any failure to comply with [FRAP] Rule 10(b) would result in forfeiture.” It explained:

The takeaway, then, from Lehman Brothers should be clear: Gateway made an affirmative and serious misstatement in its brief before this Court when it stated that no record of the telephonic oral argument existed. This, we concluded, evinced either an intent to deceive the Court or a “remarkable lack of diligence.” Id. at 101. Even so, that alone was insufficient to warrant forfeiture, because we went on to consider Gateway’s post hoc explanation for its failure. Only upon finding Gateway’s explanation lacking did we conclude that forfeiture was an appropriate sanction.

The court held that Lehman Brothers‘ forfeiture sanction was not warranted in this case, even though this appellant also failed to include in the record some available and relevant transcripts, because “[t]here is no allegation that Roberts [the appellant] misrepresented the existence or non-existence of the trial transcript or that the explanation for his omission was a disingenuous post hoc rationalization.”

If today’s opinion’s ended there it would still be CA3-nerd can’t-miss reading, but there’s much more.

Gaps in the transcript were discovered while the case was still in district court, and the court directed the appellant to follow the FRAP 10(c) procedure for recreating the missing record. When the appellant failed to do so, the district court dismissed for failure to prosecute the appellant’s post-trial motion. With some withering language — for example, “Roberts’ counsel should take the time to read Rule 10(c)” — the Third Circuit held that this ruling was no abuse of discretion, and, alternatively, that the appellant’s actions would also foreclose review of the merits of his appeal. The opinion gives this useful practice guidance:

[O]ur holding in this case leaves open avenues for appellants to seek appropriate relief if they can show that they were prejudiced by the loss of part or all of the record below. Such an appellant must comply with the dictates of Rule 10(c) and then present specific reasons why his or her attempt to recreate the record was insufficient. This would allow us on appeal (or the district court when considering a posttrial motion) to properly assess whether we could in fact grant meaningful review of the appellant’s claims without the actual trial transcript available to us.

Finally, the court held that the district judge did not err in reconsidering sua sponte an earlier denial of summary judgment.

Joining Smith were Ambro and Krause. The case was decided without oral argument. Counsel for the appellant was Brian Puricelli, who in 2004 was the subject of a New York Times story (!) describing one of his briefs as “infested with typographical errors,” and reporting that a federal judge wrote, “Mr. Puricelli’s complete lack of care in his written product shows disrespect for the court.” Counsel for the appellee was Carol VanderWoude of Marshall Dennehy.

 

 

New opinion — court rules for pornography producers in challenge to records laws

Free Speech Coalition v. AG — civil — vacatur — Smith

A divided Third Circuit panel today ruled in favor of pornography-industry plaintiffs challenging federal laws requiring them to maintain and allow inspection of certain records. The majority ruled that the statutes and regulations were content based and thus subject to scrutiny under the First Amendment. It further held that the inspection provisions facially violated the Fourth Amendment. Dissenting on the First Amendment issue, Judge Rendell argued strict scrutiny should not apply. This case was before the court for the third time; I discussed the previous round here.

Joining Smith was Scirica, with Rendell dissenting. Arguing counsel were J. Michael Murray for the plaintiffs and Anne Murphy for the government.

New opinions — a major immigration reversal, and an Alito loss

Cen v. Attorney General — immigration — reversal — Krause

The Third Circuit today struck down an immigration regulation, and it’s hard for me to imagine what possessed the government to take the position it did. Here’s the introduction from today’s opinion:

The Immigration and Nationality Act (INA) allows a child under the age of twenty-one whose alien parent has married a U.S. citizen abroad to obtain a temporary “K-4” visa to accompany her parent to the United States and, based on the parent’s marriage, to apply to adjust her status to that of a lawful permanent resident. On a petition for review of a decision of the Board of Immigration Appeals (BIA), we now consider the validity of a regulation that makes it impossible for a child who entered on such a visa to remain with her family and adjust her status from within the United States if she was over the age of eighteen at the time of her parent’s marriage. Because the regulation departs from the plain language of the INA, contravenes congressional intent, and exceeds the permissible scope of the Attorney General’s regulatory authority, we conclude it is invalid. We therefore will grant the petition for review and will reverse and remand to the BIA for further proceedings.

The Seventh Circuit struck down the same regulation in 2013, but the government has continued to enforce it outside that circuit. The Third Circuit today held that the regulation failed at step two of Chevron analysis. The opinion is thorough, and vigorous: “the Government’s reading of § 1255(d) would transform K-4 visas for older K-4 children into nothing more than tourist visas, giving their holders only a glimpse of what life with their families might have been like in America before being sent home because they are legally incapable of fulfilling § 1255(a)(2)’s eligibility requirement. Such a reading defies common sense.”

Joining Krause were Shwartz and Greenberg. Arguing counsel were Scott Bratton for the petitioner and Robert Stalzer for the government.

 

1621 Rt 22 West Operating Co. v. NLRB — labor — affirmance — Jordan

If I were a circuit judge, would I be a little nervous about ruling against a party represented a Supreme Court Justice’s sister? I might. But that’s what the Third Circuit fearlessly did today, ruling in favor of the NLRB in a case where arguing counsel for the petitioner was Rosemary Alito, the Justice’s younger sister and quite a formidible lawyer in her own right.

The appeal arose out of a workplace union election. After the NLRB ruled that the employer engaged in anti-union activities, the employer argued for the first time on appeal that the NLRB’s acting general counsel was serving illegally and therefore his complaint and all that followed were invalid. The Third Circuit held that it lacked jurisdiction to hear this argument because it was not exhausted. The court also rejected the employer’s arguments that an NLRB member should have recused because his chief counsel had previously represented the union in this case but did not participate in the NLRB’s review, that its labor practices were legal, and that the NLRB imposed the wrong remedy.

Joining Jordan, who has been on an opinion tear lately, were Ambro and Scirica. Arguing counsel were Alito of K&L Gates for the employer and Jeffrey Burritt and Benjamin Shultz for the government.

Third Circuit affirms ruling striking down PA third-party ballot-access limits, and wallops the AG

The Constitution Party of Pa. v. Cortes — election law — affirmance — Smith

The Third Circuit has been issuing some fascinating opinions over the past few weeks, and today brings another. The court affirmed a summary judgment grant in favor of several political parties who challenged Pennsylvania’s election-law system for making it too difficult for third parties to get on the ballot.

The defendants in the case were two state elections officials, and they were represented on appeal by the office of the PA attorney general. The officials did not challenge the substance of the district court ruling that the state’s ballot-access provisions were unconstitutional as applied. Instead, the officials appealed only two issues their brief characterized as “relatively narrow” and “more technical,” namely whether the district court’s order was invalid because it denied a facial challenge but accepted an as-applied challenge and whether the plaintiffs sued the wrong state officials.

The opinion amounts to a brutal indictment of the competence of the OAG’s advocacy in the case, an indictment all the more remarkable coming from one of the court’s most even-tempered judges. On the first appeal issue, the appellants “misunderstand[] the fundamental difference between facial and as-applied challenges.” Ouch. On the second issue, their position “falls apart once one properly understands the District Court’s opinion” and “is, to say the least, off the mark.” Pow.

Perhaps the most withering criticism comes in a footnote discussing the appellants’ decision not to challenge the district court’s ruling that the plaintiff’s constitutional rights were violated (emphasis mine):

In its opening brief, the Commonwealth notes that “[t]he legal rub here is that, even assuming some constitutional injury, or potential injury, has been inflicted on the litigants . . . that injury was not and could not be inflicted by the two officials they sued . . . .” Appellants’ Br. at 3. The Commonwealth then makes the two arguments discussed above but never addresses the District Court’s opinion on the merits. The Aspiring Parties take note of this and state that “the Commonwealth concedes that the challenged statutory scheme is unconstitutional as applied to the Minor Parties.” Appellees’ Br. at 28. In its reply, the Commonwealth argues that “[t]here was no concession.” Appellants’ Reply Br. at 3. Instead, the Commonwealth tries to argue that somehow they were able to dodge the merits of this case by assuming an injury and only raising these narrower issues on appeal. This displays a fundamental misunderstanding of the federal appellate process: by not challenging the merits of the District Court’s order, if the Commonwealth loses on the two arguments it raised in this appeal, the order will remain in effect and the Commonwealth will not be able to enforce both provisions against the Aspiring Parties. Indeed, at oral argument the Commonwealth conceded that this was a conscious decision, but when asked why it chose such a litigation strategy, its answer was more opaque than illuminating. See Oral Argument at 00:10:20, Cortes v. Constitution Party of Pa., (No. 15-3046).

Language like that is rare in this circuit; seeing it directed at lawyers in an office of a state attorney general is extraordinary. What a disaster.

Joining Smith were Ambro and Krause. Arguing counsel were Oliver Hall of the Center for Competitive Democracy for the third-party challengers and Claudia Tesoro of the Office of the Attorney General, joined on the brief by three other OAG lawyers and one law firm lawyer, for the state officials.

Divided panel issues significant abortion-clinic-access ruling

Bruni v. City of Pittsburgh — First Amendment — vacate in part — Jordan

The overwhelming majority of circuit court decisions are uncontroversial and essentially non-ideological. This ain’t one of them.

The Third Circuit today vacated an order dismissing First Amendment challenge to Pittsburgh’s ordinance prohibiting certain speech within fifteen feet of health care facilities. The suit was brought by five plaintiffs who “engage in what they call ‘sidewalk counseling’ on the public sidewalk outside of a Pittsburgh Planned Parenthood facility in an effort, through close conversation, to persuade women to forego abortion services.”

The blockbuster language from Jordan’s opinion:

Considered in the light most favorable to the Plaintiffs, the First Amendment claims are sufficient to go forward at this stage of the litigation. The speech at issue is core political speech entitled to the maximum protection afforded by the First Amendment, and the City cannot burden it without first trying, or at least demonstrating that it has seriously considered, substantially less restrictive alternatives that would achieve the City’s legitimate, substantial, and content-neutral interests. McCullen teaches that the constitutionality of buffer zone laws turns on the factual circumstances giving rise to the law in each individual case – the same type of buffer zone may be upheld on one record where it might be struck down on another. Hence, dismissal of claims challenging ordinances like the one at issue here will rarely, if ever, be appropriate at the pleading stage. Instead, factual development will likely be indispensable to the assessment of whether an ordinance is constitutionally permissible.

Fuentes disagreed:

I agree with the majority that the allegations in the Complaint, taken as true, establish that Pittsburgh’s Ordinance restricting certain speech within 15 feet of designated health care facilities violates the intermediate-scrutiny standard for time, place, and manner regulations. I disagree, however, with the majority’s reasoning in support of that result. In particular, I disagree with its conclusion that the Supreme Court’s decision in McCullen v. Coakley requires governments that place “significant” burdens on speech to prove either that less speech-restrictive measures have failed or that alternative measures were “seriously” considered and “reasonably” rejected. That interpretation distorts narrow-tailoring doctrine by eliminating the government’s latitude to adopt regulations that are not “the least restrictive or least intrusive means of serving the government’s interests.” Nothing in McCullen or the Supreme Court’s First Amendment jurisprudence requires us to apply such a rule. Accordingly, as to Plaintiffs’ free-speech claim, I concur only in the judgment.

In an especially strongly worded footnote, the majority fired back (emphasis mine):

The concurrence repeatedly tries to downplay the significance of McCullen – variously referring to the opinion as “incremental,” “modest,” and “unexceptional” (Concurrence at 4-5) – and devotes much of its energy to narrowing that case only to its facts. It does so, presumably, in service of a desire to avoid the import of the Supreme Court’s decision. Consider our colleague’s reading of McCullen: “[u]nlike the majority, I do not believe that McCullen announces a general rule requiring the government to affirmatively prove that less-restrictive measures would fail to achieve its interests.” (Concurrence at 1-2.) Then try to reconcile that with the actual language of McCullen: “To meet the requirement of narrow tailoring, the government must demonstrate that alternative measures that burden substantially less speech would fail to achieve the government’s interests, not simply that the chosen route is easier.” 134 S. Ct. at 2540. We are more ready than our colleague is to take the high Court at its word, and that is the heart of our disagreement with him.

I’d certainly expect a petition for en banc rehearing here. I’m not making any prediction about whether it would be granted, but I expect it would get a very careful look.

Joining Jordan was Vanaskie; Fuentes joined in part and concurred in the judgment on the First Amendment issue. Arguing counsel were Matthew Bowman (a CA3 Alito clerk) of the Alliance Defending Freedom for the challengers and Matthew McHale for the city.

Civ Pro refresher: suing the wrong defendant isn’t a standing issue

Davis v. Wells Fargo — civil — vacate in part — Jordan

The Third Circuit vacated in part in this messy civil appeal arising out of a foreclosure dispute between a homeowner, Wells Fargo bank, and an insurer. The court affirmed dismissal of the homeowner’s claims against Wells Fargo on claim preclusion and statute-of-limitations grounds. But the court reversed the dismissal of claims against the insurer. The district court had dismissed the case on standing grounds because the homeowner sued the wrong corporate entity, but the Third Circuit explained that “this case is not about standing at all” and that whether plaintiff sued the right defendant should have been decided under Rule 12(b)(6), not 12(b)(1). The opinion gives a lucid analysis of when each rule applies and why it matters.

While affirming dismissal of the claims against Wells Fargo, the court included this striking footnote:

Although we affirm the District Court’s dismissal of Davis’s claims against Wells Fargo, we would be remiss if we did not add a note about the disturbing allegations he has made. If they are true, the bank locked Davis out of his home before starting foreclosure proceedings, initiated a series of fraudulent assignments of the mortgage, and obtained insurance on the Property as part of a kickback scheme with the insurer while Davis paid excessive premiums. Although the insurance should have covered the leak and damage to the wall, Wells Fargo allegedly settled the damage claim for a payment of $317 – for roof repairs – but then took no action to actually repair the roof. And all of this took place during and around the time that Davis was serving three years of active duty in the United States Army in a time of war.

When asked about those facts during oral argument, Wells Fargo did not dispute their veracity, nor did its counsel seem particularly concerned about the brazenly exploitative character of the alleged actions of the bank. In one telling portion of the argument, when asked whether the bank had the right to make an insurance claim, take money for a roof repair, and then pocket that money and not make the repair, all while knowing the result could be further deterioration and structural damage to the Property, counsel said simply, “that is what the mortgage gives them the right to do.” See Oral Argument, http://www2.ca3.uscourts.gov/oralargument/audio/15-2658Davisv.WellsFargo.mp3, at 19:13-19:38 (argued March 2, 2016). If the allegations are true, they raise serious questions about bad faith that we are not now in a position to address. Suffice it to say, however, that although we affirm the dismissal of Davis’s claims, we hope the allegations of the amended complaint do not reflect Wells Fargo’s actual business practices.

Congratulations, Wells Fargo and counsel on your appellate victory!

Joining Jordan were Greenberg and Scirica. Arguing counsel were Earl Raynor for the homeowner, Stacey Scrivani of Stevens & Lee for Wells Fargo, and Matthew Faranda-Diedrich of Dilworth Paxson for the insurer.

Two new opinions — a big telecom case and a little criminal-sentencing case

Stirk Holdings v. FCC — agency / telecom — vacate and remand — Ambro

Here is the remarkable introduction to Judge Ambro’s remarkable opinion today scolding the FCC:

Twelve years have passed since we first took up challenges to the broadcast ownership rules and diversity initiatives of the Federal Communications Commission (“FCC” or “Commission”). In some respects the Commission has made progress in the intervening years. In key areas, however, it has fallen short. These shortcomings are at the center of this dispute—the third (and likely not the last) round in a protracted battle over the future of the nation’s broadcast industry. Specifically, the parties present challenges to the Commission’s “eligible entity” definition, its Quadrennial Review process, and its rule on television joint sales agreements.
Although courts owe deference to agencies, we also recognize that, “[a]t some point, we must lean forward from the bench to let an agency know, in no uncertain terms, that enough is enough.” Public Citizen Health Research Group v. Chao, 314 F.3d 143, 158 (3d Cir. 2002) (emphasis and internal quotation marks omitted). For the Commission’s stalled efforts to promote diversity in the broadcast industry, that time has come. We conclude that the FCC has unreasonably delayed action on its definition of an “eligible entity”—a term it has attempted to use as a lynchpin for initiatives to promote minority and female broadcast ownership—and we remand with an order for it to act promptly.

Equally troubling is that nearly a decade has passed since the Commission last completed a review of its broadcast ownership rules. These rules lay the groundwork for how the broadcast industry operates and have major implications for television, radio, and newspaper organizations. Although federal law commands the Commission to conduct a review of its rules every four years, the 2006 cycle is the last one it has finished; the 2010 and 2014 reviews remain open. Several broadcast owners have petitioned us to wipe all the rules off the books in response to this delay—creating, in effect, complete deregulation in the industry. This is the administrative law equivalent of burning down the house to roast the pig, and we decline to order it. However, we note that this remedy, while extreme, might be justified in the future if the Commission does not act quickly to carry out its legislative mandate.

Whereas the first two issues before us involve agency delay, the third is a challenge to agency action. The Commission regulates the number of television stations a company can own. In 2014, it determined that parties were evading its ownership limits through the influence exerted by advertising contracts known as joint sales agreements. As a result, it created a rule designed to address this perceived problem. However, we conclude that the Commission improperly enacted the rule; hence we vacate it and remand the matter to the Commission.

Ambro was joined by Fuentes; Scirica dissented in part because he would have gone further and ordered the FCC to issue its 2010 quadrennial review within 6 months. Arguing counsel were David Gossett for the FCC, and Helgi Walker of Gibson Dunn, Patrick Philbin of Kirkland & Ellis, and Georgetown Law professor Angela Campbell for various petitioners/intervenors.

 

United States v. Nerius — criminal sentencing — affirmance — Shwartz

Jean Nerius was convicted of two crimes. He was classified as a career offender at sentencing, resulting in a sentencing guidelines range of 37 to 46 months. Although his pre-sentencing prison-discipline record was bad, the judge sentenced him at the bottom of that range, 37 months. But the career-offender designation was error, so Nerius was resentenced. This time his guideline range was 30 to 37 months. And since his original sentencing his disciplinary record had been spotless. But this time the sentencing judge sentenced him to 36 months, near to top end of the guideline range and just one month less he’d gotten than when he was deemed a career offender.

On appeal, Nerius argued that his new sentence was presumptively vindictive — that the sentencing judge should be presumed to have punished him for winning his first appeal by going from a bottom-of-the-old-range sentence to an-almost-top-of-the-new-range sentence, when the only thing that had apparently changed since the first sentencing (besides the fact that he was no longer deemed a career offender) was that he’d been a model prisoner for the past two years.

Today, the Third Circuit rejected Nerius’s argument and affirmed his sentence. The panel said that no presumption of vindictiveness applies because the new sentence was shorter than the old one, period. The fact that the sentence went from the bottom of the guideline range to near the top, with no intervening bad acts, did not trigger the presumption.

If you believe that sentencing judges put much stock in guidelines ranges and career-offender designations, you’re more likely to think this ruling is unjust. If you don’t, well, you probably don’t. In that vein, it’s interesting that the panel consisted of two former district judges and one former magistrate judge.

Joining Shwartz was Smith and Hardiman. The case was decided without oral argument.

A divided panel applies civil rules strictly to dismiss an appeal as untimely

State National Insurance v. County of Camden — civil — dismissal — Fisher

A divided Third Circuit panel today held that it lacked jurisdiction to hear an appeal because the appeal was untimely. It’s an interesting case both factually and legally.

The appeal was brought from dismissal of a legal malpractice suit. The legal malpractice suit, in turn, arose from a civil suit. A person injured in a car crash sued Camden County alleging negligent maintenance. The county had an insurance policy with a $10 million limit. The lawyer who represented the county allegedly told the insurance company (belatedly) that the case was meritless and she valued it at $50,000. But after a trial the jury awarded the victim $31 million, later remitted to $19 million. Four days later, the insurer sued the county and the attorney. (Actually, the former attorney — her Linkedin page states that she took “a very early retirement,” moved to another state, and became a realtor.)

Now here’s where things get tangled procedurally. The insurer’s original complaint against the lawyer — one of the 2 defendants — was dismissed in 2010. The insurer filed a motion to reconsider that ruling under Rule 59(e), and also a motion to certify an immediate appeal under Rule 54(b), both of which were denied. For the next four years, the insurer litigated its claims against the other defendant, the county. The district court eventually denied the insurer’s motion for summary judgment. The insurer believed that this denial undermined the basis for the earlier dismissal of the claims against the lawyer, so it sought to reinstate those claims under Rule 60(b)(6), and the court ordered briefing on the motion. While motion to reinstate the claims against the lawyer was pending, the insurer and the county settled the claims against the county, The joint stipulation of dismissal between the insurer and the county recited that the insurer wanted to renew its claims against the lawyer. The district court then denied the motion to reinstate the claims against the lawyer, and 15 days later the insurer filed a notice of appeal from the denial of the motion to reinstate the claims against the lawyer. FRAP 4 provides 30 days to file a notice of appeal after entry of judgment or the order appealed from.

The appeal turned on whether the insurer’s appeal involving its claims against the lawyer was timely, and the panel split. The majority (Fisher joined by Chagares) held that the appeal was untimely. Rule 60(b)(6) gives district courts authority to undo final judgments, it explained, and at the time when the insurer filed its 60(b)(6) motion the judgment was not final because the claims against the county remained pending. Thus Rule 60(b)(6) “was not a proper avenue by which to challenge” dismissal of the claims against the lawyer, and as a result the majority treated it as a nullity. And, while district courts also have inherent power to reconsider prior interlocutory orders, that power ends when the court loses jurisdiction, which the majority held happened when it entered a voluntary stipulation of dismissal of the claims against the county, even though no entry of judgment resulted from that. And because the 60(b)(6) motion was “not a proper Rule 60(b) motion,” the majority ruled that it could not toll the appeal-filing deadline under FRAP 4(a)(4)(A). The majority acknowledged that its ruling was “strict.”

Judge Jordan dissented, beginning:

The Majority acknowledges that its interpretation of the operative rules of procedure is “strict.” But the interpretation goes beyond strict: with all respect, it is wrong.

He reasoned:

As the Majority would have it, State National could only maintain its appeal rights by choosing between two bad alternatives: it could abandon its settlement of its separate claim against the County, or it could appeal the dismissal of the claims against Whiteside even as the District Court was actively reconsidering that dismissal. The federal rules of civil procedure and of appellate procedure are meant to permit the “just, speedy, and inexpensive determination of every action and proceeding,” Fed. R. Civ. P. 1, and to allow district courts to fully resolve all issues in the first instance so that appellate review is not “piecemeal,” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170 (1974). It would therefore be strange if the rules really did put State National in that bind.

In Jordan’s view, the insurer’s Rule 60 motion to reinstate the claims against the lawyer kept those claims open until the court ruled on the motion. He disagreed that the district court lost its power to reinstate the claims against the lawyer when the claims against the county were voluntarily dismissed, and also disagreed that the Rule 60(b) motion was a nullity because it was filed before the voluntary dismissal. In a footnote, he noted that the majority “are abolishing Rule 60(b) relief for parties in [the insurer’s] position” because any motion would be too early, too late, or, as here, both.

I’m betting the farm that the insurer will seek rehearing en banc, and rare though en banc rehearing is, I think such a motion has a realistic chance of being granted here. On first reading, I find the dissent’s analysis more persuasive. It’s one of the strongest Third Circuit dissents I’ve seen in recent years.

As noted, Fisher was joined by Chagares and Jordan dissented. Arguing counsel were Walter Andrews of Hunton & Williams for the insurer and Michael Canning and Matthew Fiorovanti of Giordano Halleran for the appellee.

 

New opinion — Court affirms plaintiffs’ win in overtime suit

Mazzarella v. Fast Rig Support — employment — affirmance — Shwartz

Two trucking companies hired drivers to haul water used for fracking. Although the drivers often worked more than 40 hours per week, the companies only paid them overtime above 45 hours per week. The drivers sued, alleging that the failure to pay them overtime for all hours over 40 per week violated the Fair Labor Standards Act. The companies argued that they were exempt from FSLA’s overtime rules per the Motor Carrier Act. The district court ruled that the companies failed to prove they met the MCA exemption. Today, the Third Circuit affirmed, noting that, while the defendants’ brief was filled with factual assertions, the record evidence they actually introduced was not enough to meet their burden.

Joining Shwartz were Smith and Hardiman. The case was decided without oral argument.

 

New opinion — a NEPA affirmance

Maiden Creek Assocs v. U.S. Dept. of Transp. — environmental — affirmance — Barry

The Third Circuit today affirmed an order dismissing a complaint brought under the National Environmental Policy Act and denying the plaintiffs’ motion to amend. The NEPA claim challenged some highway work that a developer and a township board believed would impede a planned shopping center.

Joining Barry were Fisher and Rendell. Arguing counsel were Marc Kaplin for the developer, Christopher Garrell for the township board, James Maysonett for the government, and Kenda Jo Gardner for the state department of transportation.

You still don’t have a constitutional right to own an M-16 machine gun

United States v. One Palmetto State Armory — Civil / Second Amendment — affirmance — Thompson

The Second Amendment does not give people the right to own machine guns, the Third Circuit held today. And would-be machine gun owners can’t dodge the federal law against machine-gun possession by just creating a trust to own it instead.

Joining Thompson D-NJ were Ambro and Krause. Arguing counsel were Stephen Stamboulieh for the would-be machine gun owner and Patrick Nemeroff for the government.

 

Two new opinions

Fair Housing Rights Ctr v. Post Goldtex — housing –affirmance — Nygaard

Today, the Third Circuit answered this “somewhat abstruse” housing-law question: “do the design and accessibility requirements of the Fair Housing Act (FHA), 42 U.S.C. § 3604(f)(3)(C), apply to a commercial building that was originally constructed before the requirements’ effective date, but converted into residential units after that date?” HUD had answered the question in the negative, and, applying Chevron deference, the Third Circuit today agreed.

Joining Nygaard were Fuentes and Smith. The case was decided without argument.

 

MRL Development v. Whitecap Investment  — civil — affirmance — Fisher

The plaintiffs bought treated lumber for the deck of a vacation home, but the lumber didn’t last, and the plaintiffs sued. The district court ruled that the suit was time-barred and granted summary judgment. Today the Third Circuit affirmed, applying the gist-of-the-action doctrine (which bars tort claims that merely replicated contractual claims).

Joining Fisher were Krause and Roth. Arguing counsel were Thomas Wilkinson of Cozen O’Connor for the appellants and Alex Moskowitz, Andrew Kelly, and Robert Carlson for the appellees.

New opinion — Third Circuit reverses on civil-procedure error

In re: Asbestos Prods. Liability — civil — reversal — Hardiman

A railroad worker was exposed to asbestos used for insulation on railcars. He contracted asbestosis and mesothelioma and sued the railcar manufacturers under state law. The defendants argued that the state-law claims were pre-empted, and the district court agreed and dismissed the suit. Today the Third Circuit reversed, holding that the district erred procedurally by dismissing based on facts that were not pled in the complaint. The court acknowledged that the district court could treat the motion as one for summary judgment instead of dismissal, but held that summary judgment was not appropriate here either because the defendants did not provide evidentiary support for the district court’s factual finding, or, at a minimum, there was a factual dispute and the court had to draw inferences in the non-movant’s favor.

Joining Hardiman were Ambro and Nygaard. Arguing counsel were John Roven of Houston for the appellant (joined on the brief by Howard Bashman ) and Holli Pryer-Baze of Akin Gump and Joseph Richotte for the appellees.

New opinion — ‘interesting tax-accounting appeal’ is not an oxymoron, apparently

Giant Eagle v. Commissioner — tax — reversal — Roth

A supermarket offered its customers a discount on gas purchases: for every $50 spent on groceries, they got 10 cents off a future gas purchase. Naturally, at the end of the tax year, there were customers who had earned a gas discount but had not yet redeemed it. In its taxes, the supermarket claimed those earned-but-not-yet-redeemed discounts as deductions, reducing the total amount outstanding by past redemption rates. The IRS and the tax court disallowed the deductions, but today a divided Third Circuit reversed, ruling in the supermarket’s favor.

Joining Roth was Fisher; Hardiman dissented. Both opinions are excellent. Arguing counsel were Robert Barnes of Marcus & Shapira for the supermarket and Julie Avetta (who had quite a wedding announcement) for the government.

New opinions — two civil affirmances

Eisai, Inc. v. Sanofi Aventis — civil — affirmance — Roth

The Third Circuit today affirmed summary judgment in favor of the defendant in an antitrust case. Pharma giant Sanofi used various marketing strategies to sell its anticoagulant drug Lovenox. The court ruled that these strategies may have harmed Sanofi’s competitors, but the competitors did not show they cause broad harm to the competitive nature of the anticoagulant market.

Joining Roth were Ambro and Fuentes. Arguing counsel were Jay Fastow of Ballard Spahr for the appellant and George Cary of Cleary Gottlieb for the appellees.

 

Davis v. City of Philadelphia — civil / tax — affirmance — Hardiman

The Third Circuit today held that federal protections limiting penalties for late property-tax payments for active-duty servicemembers do not apply to taxes owed by a corporation solely owned by the servicemember. The city was represented on appeal by private counsel, apparently not an appellate specialist, and in a footnote the court rejected the city’s “odd suggestion” about the applicable standard of review. The court also rejected the parties’ view that the key issue in the case was standing.

Joining Hardiman were McKee and Smith. The case was decided without argument.

New opinion — Third Circuit decides a major preemption case

Sikkelee v. Precision Airmotive — civil — reversal — Krause

The Third Circuit today held that federal aviation-safety law does not preempt state-law products-liability claims, reversing on interlocutory review a district court grant of summary judgment. The appeal arose from a fatal Cessna plane crash in 2005; the pilot’s wife alleged that the crash was caused by faulty design of the plane’s carburetor.

The opinion features a thorough and thoughtful discussion of preemption, “a necessary but precarious component of our system of federalism.” (On this point the opinion cites a 1995 Kennedy concurrence, notable because Krause clerked for Kennedy in 1994-95.) The court rejected an expansive interpretation of prior landmark preemption case, Abdullah v. American Airlines, 181 F.3d 363 (3d Cir. 1999), holding that Abdullah does not govern products-liability claims. It then proceeded to a close analysis and Congressional intent and relevant precedent.

Joining Krause were Chagares and Van Antwerpen. The high-powered arguing counsel were Teijinder Singh of Goldstein & Russell for the appellant and Kannon Shanmugam of Williams & Connolly for the appellees.

 

New opinion — Third Circuit upholds NFL concussion-suit settlement

In re: NFL Players Concussion Injury Litig. — class action — affirmance — Ambro

The Third Circuit today affirmed approval of a $1 billion settlement in a suit brought by former pro football players against the NFL for failure to inform of risks, and protect them from injuries, arising from concussions. The court rejected objections to both class certification and the settlement terms.

Early coverage by Ken Belson in New York Times here and Jeremy Roebuck on Philly.com here.

Joining Ambro were Hardiman and Nygaard. The superstar-studded cast of arguing counsel were Samuel Issacharoff and Paul Clement for appellees, and Howard Bashman, Deepak Gupta, Charles Becker, Cullin O’Brien, and Steven Molo for the appellant objectors. Audio of the almost-two-hour-long argument is here.

New opinion — two-judge panel affirms in civil appeal

Havens v. Mobex Network Svcs — civil / telecommunications — affirmance — Roth

The Third Circuit today affirmed district court rulings for the defense in a dispute over maritime telecommunications licenses. The court upheld dismissal of the plaintiffs’ claims under the Federal Communications Act and entry of judgment on their Sherman Act claim.

Joining Roth was Fuentes; Sloviter had been on the panel and heard oral argument but assumed inactive status before the opinion issued and so the opinion was filed by panel quorum. Arguing counsel were Stephen Hudspeth for the appellants and Robert Mauriello Jr. for the appellees.

New opinion — Third Circuit recognizes Supreme Court overruling on settlement-offer mootness

Weitzner v. Sanofi Pasteur — civil / class action — affirmance — Scirica

Today the Third Circuit held that an unaccepted offer of judgment, filed prior to a plaintiff’s class certification motion, does not moot a plaintiff’s entire action. The court applied the recent Supreme Court ruling in Campbell-Ewald Co. v. Gomez, which the court recognized overruled its prior contrary holding in Weiss that an offer of complete relief generally moots the plaintiff’s claim. The court stated, “Beyond this, we decline to elaborate on the implications of Campbell-Ewald on our other holdings in Weiss.”

Joining Scirica were Shwartz and Roth. Arguing counsel were Carl Greco for the defendants and Todd Bank for the class plaintiffs.

New opinion — partial reversal in an arbitration appeal

Hamilton Park v. 1199 SEIU — civil / arbitration — partial reversal — Ambro

The Third Circuit today affirmed in part and reversed in part in an appeal arising from an arbitration. The opening of the opinion aptly lays out the basics:

Hamilton Park Health Care Center filed a petition to vacate an arbitration award in a dispute with the 1199 SEIU United Healthcare Workers East union. The District Court denied the petition and confirmed the award. On appeal, Hamilton Park asserts that the Court erred by approving a multi-year arbitration award when the parties’ collective bargaining agreement (“CBA”) only contemplated a single-year award. Because the parties consented at arbitration to a multi-year award, we affirm this portion of the Court’s order.

Hamilton Park also argues that, even if a multi-year award is permissible, the Court should have severed a provision authorizing a new round of arbitration at a later date. We agree; thus we reverse and remand as to this portion of the order.

The conclusion clarifies the basis for reversal:

Our deference to an arbitrator’s award does not include the rubber stamping of a self-perpetuating arbitration provision that the parties did not agree to include. We therefore reverse the portion of the District Court’s order approving the inclusion of a new arbitration provision for disputes arising for the year starting June 30, 2015. We remand the case with instructions for the Court to void only the portion of the award providing for that arbitration. We affirm the Court’s order in all other respects.

(Citation and footnote omitted).

Joining Ambro were Jordan and Scirica. The case was decided without oral argument.

Today’s opinion was the court’s first published opinion since March 11.

New opinions — an extraordinary debt case and a jurisdictional dismissal

Goldenstein v. Repossessors Inc — civil — partial reversal — Krause

Oh, what a story. (The facts are taken from the opinion.)

A guy borrowed $1000 from a lender, offering his car as collateral. The interest rate on this loan was 250 percent. The lender wired the money into the guy’s account, and then the lender started withdrawing $208 each month. After two months the guy took the money out of the account because he didn’t realize it was the lender making those withdrawals. The next month, when the lender couldn’t withdraw the third payment, it promptly contracted to repossess the guy’s car. Then — the lender having already collected $415 in monthly installments and $50 as a transfer fee — the repossessor told the guy that to get his car back — this is just a few months after the guy took out the $1000 loan — he had to sign a release, pay a $250 repossession fee, and pay $2143 to satisfy the loan.

Which he did. Then he sued, under RICO, the FDCPA, and state law. Eye poppingly, the district court granted summary judgment, on all claims, against the guy.

Today, the Third Circuit affirmed as to one claim — upholding denial of the FDCPA claim because the defendants had a right to possess the car even if the underlying loan was illegally usurious — but reversed on everything else. The court emphatically rejected the district court’s view that RICO’s prohibition against collecting unlawful debt did not apply to seizing collateral. And the court reversed the summary judgment on the state law claims after offering this withering observation:

The District Court granted summary judgment against Goldenstein on his PFCEUA and UCC claims without addressing the substance of the PFCEUA claim, without even mentioning the UCC claim, and despite the fact that Appellees did not argue those claims in their motion for summary judgment.

Kapow.

Joining Krause were Greenaway and Greenberg. Arguing counsel were Robert Salvin for the guy and Neal Thakkar for the appellees.

S.B. v. KIndercare Learning — civil — jurisdictional dismissal — Sloviter

After a child was allegedly injured at a daycare center, her mother sued in state court. The daycare removed the case to federal court. The plaintiffs retained a new lawyer, who sought to voluntarily dismiss without prejudice because the child (age 4) was too young to explain her injury. The district court granted dismissal but ordered the plaintiffs to pay the daycare’s attorney fees and refile within 4 years (extendable for good cause). The plaintiffs appealed. and today the Third Circuit held that the voluntary dismissal without prejudice here was not an appealable final order. The court left open the possibility that a litigant could appeal the attorney fees once their amount had been set, and that a litigant could appeal the conditions in an appeal from a later dismissal with prejudice for failing to comply.

Joining Sloviter were Smith and Hardiman. The case was decided without argument.

 

 

Two new opinions, with a rare Third Circuit benchslap

Mammaro v. NJ Division of Child Protection — civil rights — reversal — Ambro

New Jersey child services took away a mother’s one-and-a-half-year-old child for “a few days” because the mother twice tested positive for marijuana and moved out of approved housing. After the mother got her infant back, she filed a civil rights suit against child services and the caseworkers involved. The district court dismissed the suit against child services but refused to dismiss a substantive due process claim against the caseworkers. The caseworkers appealed, and today the Third Circuit reversed, holding that the caseworkers were protected by qualified immunity. The court assumed a consensus of persuasive authority that temporary removal of a child could violate due process, but found no consensus that removing the infant was an “unconstitutional interference with the parent-child relationship” because no prior case so held.

Practitioners should take special note of a footnote in the opinion, inserted apparently at Chief Judge McKee’s request:

A hair follicle test [of the mother] in November 2011 showed a very small amount of marijuana and cocaine, but the amount found was too low to meet the standard for a positive test.

Although Chief Judge McKee joins this opinion in its entirety, he notes his concern with the misleading nature of the Division’s brief on this point. The brief stated that Mammaro “submitted to a hair follicle drug test, which was positive for cocaine and marijuana.” However, at oral argument, after counsel for Mammaro represented that she never tested positive for cocaine, the Division’s counsel (who was involved in drafting the brief) was given an opportunity to clarify whether the hair follicle test for cocaine was positive, as represented in the brief, or negative. Counsel first responded that the result was “inconclusive,” but then
conceded that Mammaro’s hair follicle analysis was “negative” for cocaine.

* * * given the thresholds employed by the lab and the Division’s own guidelines, Mammaro’s test results were negative.

Chief Judge McKee believes that it is (at best) unfortunate and (at most) disingenuous and intentionally misleading for the Division to have stated, without qualification or explanation, that Mammaro was using cocaine. The failure to explain or qualify such an assertion is particularly egregious here where the focus of our inquiry is the reasonableness of the challenged interference with Mammaro’s custody of her child, and the alleged bad faith of the Division. Moreover, the misstatement in the brief should not be minimized merely because the removal of Mammaro’s child preceded the disputed cocaine analysis. By its own statement, the Division provided the misleading lab results for “background information.” Since the information was, by the Division’s own admission, irrelevant to its decision to interfere with
Mammaro’s parental rights, Chief Judge McKee is concerned that it may have been offered in an attempt to “poison the [analytical] well.”

Not how any appellate attorney wants to be remembered in a published circuit opinion.

Joining Ambro were McKee and Hardiman. Arguing counsel were Michael Walters of the state attorney general for the child services defendants and Kenneth Rosellini for the mother.

Cunningham v. M&T Bank — civil — affirmance — Ambro

The Third Circuit upheld a district court’s ruling that a class-action lawsuit was barred by the statute of limitations and not subject to equitable tolling based on any fraudulent concealment.

Joining Ambro were McKee and Scirica. The case was decided without argument.

New opinion — partial dismissal in insurance-coverage appeal

Ramara Inc. v. Westfield Insurance — civil / insurance — dismissal in part — Greenberg

The Third Circuit held that a district court’s order that an insurer must defend a suit was immediately appealable, and applied Pennsylvania law to affirm the district court’s order.

Joining Greenberg were Fuentes and Chagares. The case was decided without argument.

New opinions — qui tam and Sarbanes-Oxley

United States ex rel. Moore & Co. v. Majestic Blue Fisheries — qui tam — reversal — Rendell

The False Claims Act enables someone to sue someone else for defrauding the government — FCA suits are commonly called qui tam suits. (For example, there’s a big qui tam suit against disgraced cyclist Lance Armstrong related to his doping while sponsored by the US Postal Service.) This case involves a law firm that brought a qui tam suit alleging that foreign nationals fraudulently obtained fishing licenses reserved for citizens. The district court granted summary judgment for the defendants, but today the Third Circuit reversed. The main issue was whether the law firm’s suit survived the FCA’s public disclosure bar, and the court held that it did because it alleged information that was independent of and materially added to publicly disclosed information about the alleged fraud.

Joining Rendell were Vanaskie and Nygaard. Arguing counsel were Clay Naughton for the law firm and Robert Salcido of Akin Gump for the appellees.

 

Wiest v. Tyco Electronics Corp. — civil — affirmance — Greenberg

The Third Circuit today affirmed a district court’s ruling granting summary judgment against a former employee in an action for retaliation brought under the Sarbanes-Oxley Act.

Joining Greenberg were Fuentes and Chagares. The case was decided without oral argument.

New opinion — Third Circuit lacks mandamus jurisdiction in patent cases

In re: Dr. Lakshmi Arunachalam — patent / mandamus — dismissal — per curiam

The Federal Circuit has exclusive jurisdiction over appeals in patent infringement actions. Today, the Third Circuit held that the Federal Circuit also has exclusive jurisdiction over mandamus petitions arising from such actions. Accordingly, the court dismissed for lack of jurisdiction the mandamus petition of a pro se litigant who claimed that the district court should have recused due to a financial interest in the case, and the court directed the clerk to transfer it to the Federal Circuit.

The panel was Fisher, Jordan, and Vanaskie. The case was decided without argument.

New opinion — a legal error in arbitration is insufficient to upset its result

Whitehead v. Pullman Group — civil / arbitration — affirmance — Fuentes

How’s this for a lucid opening paragraph?

Singer-songwriters John Whitehead and Gene McFadden were “an integral part of the Philadelphia music
scene in the 1970s.” In 2002, appellant David Pullman
approached Whitehead and McFadden about purchasing their
song catalogue. The parties signed a contract but never
finalized the sale. Whitehead and McFadden passed away in
2004 and 2006, respectively, and Pullman became embroiled
in a series of disputes with their estates over ownership of the
song catalogue. The parties eventually agreed to arbitration.
Pullman, unhappy with the arbitral panel’s ruling, moved in
the District Court to vacate the arbitration award on the
ground that the panel had committed legal errors that made it
impossible for him to present a winning case. The District
Court denied Pullman’s motions, and Pullman now appeals.
Even if we were to agree with Pullman that the arbitrators
misapplied the law—and we do not—legal error alone is not a
sufficient basis to vacate the results of an arbitration.
Accordingly, we will affirm.

Joining Fuentes were Chagares and Greenberg. The case was decided without argument.

UPDATE: Nick Vadala of philly.com has the case backstory here.

New opinion — Third Circuit rejects Super Bowl ticket appeal based on standing

Finkelman v. NFL — civil / standing — affirm/dismiss — Fuentes

The NFL allegedly makes only 1% of Super Bowl tickets available to the public. New Jersey has a statute (apparently intended to prevent event-organizers from favoring insiders over the public) making it illegal to withhold from the public more than 5% of available seating for an event. Two plaintiffs — one who bought above-face-price scalped Super Bowl tickets, one who balked — sued the NFL in federal court, alleging that its Super Bowl ticket sales violated the NJ law. Today, the Third Circuit held that both plaintiffs lacked standing to argue that the NFL violated the statute.

I feel sure this opinion will be cited heavily by future standing opponents in the circuit. I won’t claim to have my brain fully wrapped around the standing issue here, but the notion that the guy who bought scalped tickets lacks standing — a position even the NFL didn’t advance — strikes me as a mighty tough sell.

Joining Fuentes were Smith and Barry. Arguing counsel were Bruce Nagel for the plaintiffs and Jonathan Pressment for the NFL.

Third Circuit revives employment-discrimination suit

Connelly v. Lane Construction — employment discrimination — vacate & remand — Jordan

Sandra Connelly was a truck driver. According the suit she later filed, her male co-workers harrassed her, and her complaints about this harassment strained her work relationships. When the company then laid off drivers, she alleged, she was let go before less-senior male drivers, and when the company recalled laid-off drivers, the company brought back less-senior men but not her. She sued under title VII and state law, but the district court dismissed based its conclusion that she failed to plead a sufficiently plausible gender-discrimination claim. Today, the Third Circuit vacated that dismissal, holding that Connelly’s claims were sufficient to survive a motion to dismiss. The court reiterating that a complaint need not establish a prima facie case in order to survive dismissal, and that the test is whether the complaint is plausible on its face, a test that can be met “even if one believed it ‘unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits.'”

Joining Jordan were Fisher and Chagares. Arguing counsel were Emily Town (formerly of Stember Cohn but now a WDPA clerk) for the employee, Samantha Clancy (formerly of Ogletree Deakins but now corporate counsel) for the appellant, and Christine Back for the EEOC as amicus appellant. (Neither Town nor Clancy are on their firms’ websites.)

New opinion — an alphabet-soup Clean Air Act affirmance

Group Against Smog & Pollution v. Shenango Inc. — environmental — affirmance — Van Anterwerpen

A company runs a plant that’s subject to the NAAQS established by the EPA, requiring them to create a SIP, which was enacted by the ACHD, but the EPA and the DEP and the ACHD sued for violations of the SIP and then GASP did too. I think. Today the Third Circuit affirmed dismissal of the private suit against the polluter, holding that the private suit was barred by the diligent-prosecution bar of the Clean Air Act.

Van Antwerpen was joined by Fuentes and Shwartz. The case was decided without argument (“TCWDWA”).

New opinions — another blow against class arbitration, and a plain-error sentencing reversal

Chesapeake Appalachia v. Scout Petroleum — arbitration — affirmance– Cowen

Last year in Opalinski the Third Circuit held that the availability of class arbitration is an issue for courts to decide unless the parties’ arbitration agreement provides otherwise “clearly and unmistakeably.” Today, the court held that the parties’ arbitration agreement here, which incorporated rules promulgated by the American Arbitration Assoc., did not delegate the class arbitrability decision to the arbitrators with the requisite clarity, and therefore it affirmed the district court’s order vacating the arbitrator’s decision.

Joining Cowen were Shwartz and Krause. Arguing counsel were Robert Pratter of Cohen Placitella for the appellants and Daniel Donovan of Kirkland & Ellis for the appellee.

US v. Moreno — criminal sentencing — reversal in part — Fisher

Applying plain-error review, the Third Circuit today vacated a criminal defendant’s sentence because the defendant’s right of allocution was violated when the court permitted the prosecutor to vigorously cross-examine the defendant during his allocution. The court held that the error was plain even though “no previous cases have explicitly proscribed cross-examination during allocution,” because cross-examination was clearly contrary to the purpose of allocution. Interestingly, the opinion went on to say that, even if the error here were not plain, the court would still exercise its supervisory power to hold that defendants may not be cross-examined during allocution. The court also affirmed the defendant’s conviction (concluding it was clear a Confrontation Clause violated occurred when a witness read into the record law enforcement reports, but that the error was harmless) and rejected a challenge to imposition of a sentencing enhancement.

Joining Fisher were Chagares and Jordan. Arguing counsel were Brett Sweitzer of the federal defender for Moreno and Jane Datillo for the government.