Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

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IRS Form 1040, filed after the IRS made an assessment of the taxpayer’s liability, did not constitute “returns” for purposes of determining the dischargeability in bankruptcy of tax debts under 11 U.S.C. 523(a)(1)(B). Giacchi filed his tax returns on time for the years 2000, 2001, and 2002 years after they were due and after the IRS had assessed a liability against him. In 2010, Giacchi filed for Chapter 7 bankruptcy; in 2012 he filed a Chapter 13 petition and brought an adversary proceeding seeking a judgment that his tax liability for the years in question had been discharged in the Chapter 7 proceeding. The district court and Third Circuit affirmed the bankruptcy court’s order denying the discharge. The tax debt was nondischargeable under 11 U.S.C. 523(a)(1)(B) because Giacchi had failed to file tax returns for 2000, 2001, and 2002, and Giacchi’s belatedly filed documents were not “returns” within the meaning of section 523(a)(1)(B) and other applicable law. View "Giacchi v. United States" on Justia Law
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Pretrial detainee’s due process rights were not violated by placement in administrative segregation and restriction of phone privileges pending investigation of misconduct. While Steele was a pretrial detainee at New Jersey’s Middlesex County Adult Correction Center, officials received credible information that Steele was threatening other detainees in order to coerce them into using Speedy Bail Bond Service and was receiving compensation from Speedy. After interviewing Steele and advising him of the allegations, officials placed him in administrative segregation while they investigated. Steele’s telephone privileges were restricted to legal calls only. Steele filed suit under 42 U.S.C. 1983, claiming violations of his due process rights when the defendants transferred him to administrative segregation and restricted his phone privileges, interfering with his ability to find a co-signer for his own bail. The Third Circuit affirmed summary judgment for all defendants. Defendants’ limitation of Steele’s phone privileges did not “shock the conscience.” Steele has not met his heavy burden of showing that defendants exaggerated their response to the genuine security considerations that actuated his move. Steele’s transfer was for institutional security reasons rather than for discipline or punishment and he was accorded the required level of process. View "Steele v. Cicchi" on Justia Law

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Aliens subject to reinstated removal orders are ineligible to apply for asylum. Cazun was detained at the border and expressed fear of returning to Guatemala. An asylum officer made a negative credible fear determination. An IJ affirmed. An expedited order of removal was issued. Upon Cazun’s return to Guatemala, a drug trafficking gang threatened, tortured, and sexually assaulted her. Cazun fled with her two-year-old son. On her attempted re-entry, Cazun was detained. DHS reinstated her previously-entered removal order rather than initiating a new removal process. An IJ again affirmed a negative credible fear determination. Cazun consulted counsel and, claiming psychological trauma, obtained a new interview, Cazun described sexual assault, torture, and threats against her life and her son's life. The officer concluded that Cazun’s testimony was credible and established a reasonable fear of persecution. An IJ granted Cazun withholding of removal and protection under the Convention Against Torture, but would not consider Cazun’s asylum request. The BIA agreed that she was ineligible under 8 U.S.C. 1231(a)(5), which states that aliens who are subject to a reinstated removal order are “may not apply for any relief under [8 U.S.C. Ch. 12].” The Third Circuit upheld the decision, deferring to the BIA’s “reasonable” interpretation of a statute in which Congress did not speak clearly. View "Cazun v. Attorney General, United States" on Justia Law
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Pennsylvania statute, prohibiting payment of fire insurance proceeds to named insured when there are delinquent property taxes, is not limited to situations where the named insured is also responsible for those taxes. Conneaut Lake Park, in Crawford County, included a historic venue, “the Beach Club,” owned by the Trustees. Restoration operated the Club under contract with the Trustees. Restoration insured the Club against fire loss through Erie. When the Club was destroyed by fire, Restoration submitted a claim. In accordance with 40 Pa. Stat 638, Erie required Restoration to obtain a statement of whether back taxes were owed on the property. The statement showed $478,260.75 in delinquent taxes, dating back to 1996, before Restoration’s contract, and owed on the entire 55.33-acre parcel, not just the single acre that included the Club. Erie notified Restoration that it would transfer to the taxing authorities $478,260.75 of the $611,000 insurance proceeds. Erie’s interpleader action was transferred after the Trustees filed for bankruptcy. Restoration argued that Section 638 applied only to situations where the owner of the property is insured and where the tax liabilities are the financial responsibility of the owner. The Third Circuit reinstated the bankruptcy court holding, rejecting Restoration’s argument. The statute does not include any qualifications. When Restoration insured the Club, its rights to any insurance proceeds were subject to the claim of the taxing authorities. Without a legally cognizable property interest, Restoration has no cognizable takings claim. View "In re: Trustees of Conneaut Lake Park, Inc." on Justia Law

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Qui tam relator failed to satisfy the False Claims Act’s materiality requirement in alleging that the manufacturer of a widely-prescribed cancer drug, Avastin, suppressed data that caused doctors to certify incorrectly that Avastin was “reasonable and necessary” for certain at-risk Medicare patients. Avastin is FDA-approved and has accounted for $1.13 billion a year in Medicare reimbursements. The relator, formerly the head of healthcare data analytics for the manufacturer, claimed the company ignored and suppressed data that would have shown that Avastin’s side effects for certain patients were more common and severe than reported and that such analyses would have required the company to file adverse event reports with the FDA, and could have resulted in changes to Avastin’s FDA label. He claimed the company caused physicians to submit Medicare claims that were not “reasonable and necessary.” The Third Circuit affirmed dismissal of the claim, stating the allegations may be true but a False Claims Act suit is not the appropriate way to address them. The manufacturer followed all pertinent statutes and regulations. If those laws and regulations are inadequate to protect patients, it falls to the other branches of government to reform them. View "Petratos v. Genentech Inc" on Justia Law

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The Third Circuit remanded a determination that Dutton-Myrie, a citizen of Panama, was ineligible for deferral of removal under the U.N. Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. The Board of Immigration Appeals must determine, de novo, whether factual findings that the Panamanian government actively engages against criminal gangs and that Dutton-Myrie did not provide the police notice that the gang attacked him in the past, were sufficient to establish acquiescence. Dutton-Myrie arrived in the U.S. on a visitor’s visa in 1991 and later pled guilty to cocaine-related charges. He escaped during an initial attempt to deport him, but was apprehended in 2005 and deported to Panama. A few days after he returned, a group of men stabbed him in the neck. He fled the country and re-entered the U.S. The government apprehended Dutton-Myrie a second time in 2007; he claimed that the government of Panama was unwilling or unable to protect him from gang attacks. View "Dutton-Myrie v. Attorney General United States" on Justia Law
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The Third Circuit affirmed denial of a sentencing reduction while rejecting the government’s “novel” challenge to its jurisdiction. The court concluded that the denial was a final order under 28 U.S.C. 1291 and that 18 U.S.C. 3742(a)(1)does not bar review for reasonableness. In 2012, Rodriguez pled guilty to conspiracy to distribute cocaine, 21 U.S.C. 846, and conspiracy to possess firearms in furtherance of drug trafficking, 18 U.S.C. 924(o). The drug quantity was more than 15 and less than 50 kilograms of cocaine. Rodriguez was also responsible for multiple drug-related robberies. His sentencing range was 120-150 months; he was sentenced to 123 months’ imprisonment. In 2016, Rodriguez sought a sentencing reduction under 18 U.S.C. 3582(c)(2), based on Amendment 782 of the Sentencing Guidelines, which retroactively reduced by two the offense levels for drug quantities that trigger a mandatory minimum sentence. The district court found Rodriguez eligible for an Amendment 782 sentencing reduction, but denied relief in the exercise of its discretion, stating that Rodriguez had engaged in “an unyielding and escalating pattern of drug-related and violent behavior which has been undeterred by prior and substantial terms of imprisonment.” The courts rejected an argument that the sentence was substantively unreasonable, based on the 18 U.S.C. 3553(a) factors. View "United States v. Rodriguez" on Justia Law
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GRC, a manufacturer and supplier of refractory products designed to retain strength when exposed to extreme heat, previously included asbestos in its products. GRC was the defendant in 31,440 lawsuits alleging injuries from “exposure to asbestos-containing products manufactured, sold, and distributed by GRC” dating back to 1978. GRC’s insurers initially fielded these claims. During the 1970s and ‘80s, GRC had entered into primary liability insurance policies with several different insurers. GRC also secured additional excess insurance policies. In 1994 GRC’s liabilities from thousands of settled claims far exceeded the limits of its primary insurance coverage. In 2002, after years of continued settlements, GRC tendered the underlying claims to its excess insurance carriers. All denied coverage on the basis of a policy exclusion: It is agreed that this policy does not apply to EXCESS NET LOSS arising out of asbestos, including but not limited to bodily injury arising out of asbestosis or related diseases or to property damage. The district court ruled in favor of GRC. The Third Circuit reversed. The phrase “arising out of,” when used in a Pennsylvania insurance exclusion, unambiguously requires “but for” causation. The losses relating to the underlying asbestos suits would not have occurred but for asbestos, raw or within finished products. View "General Refractories Co. v. First State Insurance Co." on Justia Law

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In 2008, the Delaware correctional system was facing scandal for its handling of inmate releases. One inmate committed suicide in his cell on the day he was supposed to be—but was not—released. Dozens of others had either been released too early or too late. Reform consisted of establishment of a new Central Offender Records office within the Delaware Department of Corrections. Inmates who were over-detained sued top correctional officials in a putative class action, claiming that Delaware’s problems with over-detentions have, if anything, gotten worse since 2008. The Third Circuit affirmed summary judgment in favor of the defendants. The court noted that “hard, reliable data about the number of over-detentions occurring each year is more or less missing from the record.” To survive summary judgment on an allegation of deliberate indifference, the plaintiffs needed more than speculation connecting any increase in over-detentions with the COR policies they deem ineffective. View "Wharton v. Danberg" on Justia Law

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Covertech manufactures and sells reflective insulation under its rFOIL brand—its U.S. trademark, registered since 2001. The umbrella rFOIL brand includes ULTRA. In 1998, TVM, a distributor, and Covertech entered into a verbal agreement, designating TVM as the exclusive U.S. marketer and distributor of Covertech’s rFOIL products. In 2007, Covertech terminated the agreement. TVM was consistently late with payment; Covertech discovered TVM had been purchasing comparable products from Reflectix, and passing off some of them as Covertech’s. The parties entered a new agreement, under which Covertech manufactured products for TVM to sell under the TVM brand name; Covertech also continued to sell TVM rFOIL products for resale using Covertech’s product names. TVM violated its agreement to refrain from buying competitors’ products. After Covertech learned of TVM’s illicit purchases, the parties terminated their relationship. Covertech began to sell its products directly in the U.S. Covertech unsuccessfully tried to persuade TVM to stop using rFOIL brand names. The Canadian Intellectual Property Office registered the ULTRA mark in 2010. In 2011, TVM registered ULTRA as its U.S. trademark. Covertech filed an adverse petition with the PTO and filed suit. The district court granted Covertech judgment and awarded damages, 15 U.S.C. 1117(a), (c), applying the “first use test,” and rejecting a defense of acquiescence. The Third Circuit affirmed as to ownership, citing the rebuttable presumption of manufacturer ownership that pertains where priority of ownership is not otherwise established, but vacated as to damages. The district court incorrectly relied on gross sales unadjusted to reflect sales of infringing products to calculate damages. View "Covertech Fabricating Inc v. TVM Building Products Inc" on Justia Law