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

A woman rented a car from a rental company in 2014 and, after a traffic camera recorded a violation during her rental, the company paid the fine and charged her both the fine amount and an administrative fee. She filed a putative class action in the United States District Court for the District of New Jersey on behalf of customers who were charged fines and fees in similar circumstances, alleging state-law claims such as violations of consumer fraud statutes and unjust enrichment. The rental company later updated its rental agreements in 2016 to include an arbitration clause and class-action waiver, but this provision applied only prospectively to rentals after its adoption. The named plaintiffs’ rentals predated this clause.The District Court, after years of litigation that included several amended complaints, discovery, mediation, and a motion to certify a class, ultimately certified a subclass that included some renters whose agreements contained the arbitration provision. The District Court found that the rental company had waived its right to enforce arbitration by participating in litigation for several years without moving to compel arbitration. The company then filed a motion to compel arbitration for the affected class members, which the District Court denied again on waiver grounds, emphasizing that the company had not sought to enforce arbitration until after class certification.On appeal, the United States Court of Appeals for the Third Circuit reviewed the waiver issue de novo. The Third Circuit held that waiver of the right to compel arbitration did not occur here, because the company’s conduct—such as raising arbitration as an affirmative defense and the futility of seeking to compel arbitration prior to class certification—did not evince an intentional relinquishment of that right. The Third Circuit vacated the District Court’s order denying the motion to compel arbitration and remanded for consideration of other unresolved questions about enforceability. View "Valli v. Avis Budget Group Inc" on Justia Law

Police investigating a fatal drive-by shooting in Philadelphia identified several suspects, including T.C., and obtained an arrest warrant for him. Detectives used multiple databases, including CLEAR and police records, to determine T.C.’s last known address, which pointed to 4838 Stenton Avenue. Believing T.C. resided there, detectives and a SWAT team executed the warrant early one morning. Instead of finding T.C., officers encountered Richard Miller and Tonya Crawley, who had lived at the residence for two years and were not connected to T.C. The officers detained Miller and Crawley briefly and then left after learning T.C. was not present. T.C. was later located and cleared of wrongdoing.Miller and Crawley sued the involved officers and the City of Philadelphia in the United States District Court for the Eastern District of Pennsylvania under 42 U.S.C. § 1983, alleging that the officers lacked probable cause and violated the Fourth Amendment, and that the City failed to train or supervise its officers. The District Court dismissed the municipal-liability claim for failure to state a claim and granted summary judgment to the officers on the unlawful-entry claim, holding that they had probable cause to enter the residence.On appeal, the United States Court of Appeals for the Third Circuit reviewed both the dismissal and summary judgment de novo. The court held that, although the District Court incorrectly invoked the good-faith exception, the error was harmless because the officers had probable cause to believe T.C. lived at the address and would likely be home at the early hour. The court also held that the plaintiffs failed to allege facts sufficient to establish municipal liability, as there was no pattern of similar constitutional violations or plausible basis for single-incident liability. The Third Circuit affirmed the District Court’s decisions. View "Miller v. City of Philadelphia" on Justia Law

Several individuals who were former partners at Cantor Fitzgerald L.P., BGC Holdings L.P., and Newmark Holdings L.P. separated from those partnerships and were entitled to receive certain payments after their departure. These payments included an initial amount plus four annual installment payments, but the partnership agreements allowed the partnerships to withhold the annual payments if the former partners engaged in broadly defined “Competitive Activity.” The partnerships exercised this right and withheld payments from the plaintiffs after determining they had engaged in such activity. The plaintiffs alleged that these provisions constituted unreasonable restraints of trade in violation of Section 1 of the Sherman Act and, for two plaintiffs, a violation of Delaware’s implied covenant of good faith and fair dealing.The United States District Court for the District of Delaware dismissed the plaintiffs’ complaint. The court found that the plaintiffs had failed to plead an “antitrust injury,” which is necessary to assert a claim under the Sherman Act, and further held that the implied covenant claims failed because the partnership agreements gave the partnerships express contractual discretion to withhold the payments when a former partner competed, leaving no contractual gap for the implied covenant to fill. The plaintiffs appealed the dismissal.The United States Court of Appeals for the Third Circuit affirmed the District Court’s judgment. The court held that the plaintiffs’ pecuniary injuries, stemming from the withholding of payments, were not antitrust injuries because they did not result from anticompetitive conduct affecting their status as market participants, nor were their injuries inextricably intertwined with any anticompetitive scheme. Regarding the implied covenant claims, the Third Circuit found that the relevant agreements expressly permitted withholding the payments under the circumstances, and there was no plausible allegation that the partnerships exercised their discretion in bad faith. View "McLoughlin v. Cantor Fitzgerald L.P." on Justia Law

Jerome Brown was indicted after law enforcement discovered over thirteen kilograms of fentanyl, a handgun, ammunition, and a large sum of cash in his car, home, and storage unit during a drug-trafficking investigation near Pittsburgh, Pennsylvania. After his arrest, Brown confessed to the offenses. Rather than proceed to trial, he entered into plea negotiations with the government.The parties initially presented a plea agreement to the United States District Court for the Western District of Pennsylvania recommending a sentence of 180 months, the mandatory minimum. The District Court rejected this agreement, finding it inconsistent with the Sentencing Guidelines and the statutory sentencing factors. The parties then negotiated a second agreement for a 198-month sentence, which the District Court also rejected, instead proposing its own sentence of no less than 235 months. Brown, after consulting with counsel, opted to plead guilty without a plea agreement, understanding the District Court’s sentencing position. He was ultimately sentenced to 235 months’ imprisonment with ten years of supervised release.On appeal, the United States Court of Appeals for the Third Circuit considered whether the District Court’s involvement in plea negotiations, in violation of Federal Rule of Criminal Procedure 11(c)(1), required vacatur of Brown’s guilty plea. The Court found that the District Court had improperly participated in plea discussions. However, applying plain error review, the Third Circuit held that Brown failed to demonstrate that this error affected his substantial rights because the record showed he intended to plead guilty regardless of the court’s actions. The Court also rejected Brown’s constitutional challenge to his firearm conviction, noting binding precedent that forecloses his argument. The Third Circuit affirmed the District Court’s judgment. View "USA v. Brown" on Justia Law

An employee was hired by a nonprofit organization to help organize a fundraiser and was given access to a board member’s email account for work purposes. After a dispute about the nature of her employment, the employee resigned and requested payment for her services, but the organization stopped communicating with her and did not pay. The former employee, still having technical access to the email account, began accessing it, downloaded internal documents, and sent them to a friend. The friend subsequently threatened the organization with releasing these documents unless both were paid substantial sums. The organization eventually revoked the employee’s access and reported the matter to the authorities.A grand jury in the United States District Court for the Eastern District of Pennsylvania indicted both individuals on several counts of violating the Computer Fraud and Abuse Act (CFAA), which prohibits intentionally accessing a computer “without authorization.” At trial, the prosecution’s theory was that the employee’s resignation automatically ended her authorization to access the email account, making her subsequent access a crime. The district court denied defense motions for acquittal and a new trial, the latter of which challenged both the jury instructions on authorization and the prosecutor’s remarks about extortion.The United States Court of Appeals for the Third Circuit held that, in the absence of any evidence the organization took affirmative steps to revoke the employee’s authorization—or any contract linking authorization to employment—the mere act of resignation did not terminate authorization under the CFAA. The court found the jury instruction on authorization erroneous and determined there was insufficient evidence to support the conviction. The Third Circuit vacated the conviction and ordered a judgment of acquittal. The court also found that any improper remarks by the prosecutor were harmless given the curative instructions. View "USA v. Eddings" on Justia Law

Two Philadelphia police officers responded to reports of drug dealing and observed what they believed to be a drug transaction. When the suspected dealer, Tahir Ellison, saw the officers, he fled in his SUV. The officers pursued Ellison, initially at normal speeds, but the chase escalated when Ellison ran a red light, drove the wrong way down a one-way street, and sped up significantly. The officers followed, also running red lights and reaching high speeds. The chase lasted less than a minute and ended when Ellison crashed into another car, killing an uninvolved bystander, Virgen Martinez. Ellison later pleaded guilty to criminal charges relating to the incident.After the incident, Joshua Otero, as administrator of Martinez’s estate, filed a lawsuit in the United States District Court for the Eastern District of Pennsylvania. The suit alleged that the officers, by engaging in a high-speed chase in a densely populated area, violated Martinez’s Fourteenth Amendment rights under 42 U.S.C. § 1983. The officers moved for partial summary judgment based on the absence of intent to harm and on qualified immunity. The magistrate judge found no evidence of intent to harm but denied summary judgment on both the constitutional and qualified immunity arguments, certifying the case for interlocutory appeal.The United States Court of Appeals for the Third Circuit reviewed the case de novo. It held that police officers engaged in a high-speed chase are constitutionally liable for injuries to bystanders only if they acted with intent to harm. Because the officers did not intend to harm anyone, they could not be liable under the Fourteenth Amendment. The court also held that qualified immunity applied, as no clearly established law prohibited the officers’ conduct under these circumstances. The Third Circuit reversed the district court and instructed it to enter partial summary judgment for the officers. View "Otero v. Kane" on Justia Law

A New Jersey physician wished to provide medical aid in dying to terminally ill patients, including nonresidents seeking this service under New Jersey’s law that permits doctor-assisted suicide. The relevant statute allows only New Jersey residents, with a prognosis of six months or fewer to live, to request and obtain a prescription for life-ending medication. Patients must demonstrate residency through various documents and satisfy several procedural safeguards. The plaintiff, a physician, challenged the law’s residency requirement after two terminally ill nonresidents who had joined the suit died during the course of litigation.The United States District Court for the District of New Jersey dismissed the complaint. The court reasoned that the right to receive medical aid in dying was neither a fundamental privilege nor a fundamental right requiring extension to nonresidents under the Privileges and Immunities Clause or the Equal Protection Clause. It further found the law was not economic protectionism and survived rational-basis review. The plaintiff appealed this decision.The United States Court of Appeals for the Third Circuit affirmed the District Court’s dismissal. It held that New Jersey’s restriction of doctor-assisted suicide to its own residents does not violate the Privileges and Immunities Clause because there is no longstanding tradition making such access a fundamental privilege, nor does it violate the Equal Protection Clause, as there is no fundamental right to assisted suicide or to interstate travel for this purpose. The Third Circuit also determined that the law does not offend the dormant Commerce Clause since it is a moral rather than commercial regulation and does not discriminate against out-of-state economic interests. The court concluded that New Jersey’s residency requirement is constitutionally permissible, justified by the state’s interests in protecting doctors, avoiding interstate friction, and safeguarding patients. View "Bryman v. Murphy" on Justia Law

Spring Creek Rehabilitation and Nursing Center purchased a skilled nursing facility previously operated by Amboy Nursing and Rehabilitation Center. Amboy had a longstanding collective bargaining relationship with a union representing its employees, and a dispute arose when Amboy sold the facility to Spring Creek without ensuring that Spring Creek would assume certain monetary obligations to employees under the expired collective bargaining agreement. The union filed unfair labor practice charges with the National Labor Relations Board (NLRB) against both Amboy and, later, Spring Creek, alleging Spring Creek refused to bargain collectively and in good faith.After the NLRB issued a complaint and scheduled a hearing before an administrative law judge (ALJ), Spring Creek filed suit in the United States District Court for the District of New Jersey. Spring Creek sought to enjoin the NLRB proceedings, arguing that NLRB ALJs are unconstitutionally insulated from presidential removal. The District Court denied Spring Creek’s motion for a preliminary injunction, concluding that Spring Creek had not shown it would suffer irreparable harm without the relief. The NLRB administrative hearing subsequently took place, though no decision had been issued at the time of appeal.On appeal, the United States Court of Appeals for the Third Circuit reviewed the District Court’s denial of injunctive relief. The Third Circuit determined that, because the action sought by Spring Creek arose from a labor dispute between Spring Creek and its employees, the Norris-LaGuardia Act deprived the District Court of jurisdiction to issue the requested injunction against the NLRB. The court held that the Act’s anti-injunction provisions broadly apply to cases involving or growing out of labor disputes and that no statutory or judicial exception to the Act applied in this instance. Accordingly, the Third Circuit vacated the District Court’s order and remanded the case for further proceedings consistent with its opinion. View "Spring Creek Rehabilitation and Nursing Center LLC v. NLRB" on Justia Law

Several defendants facing prosecution for federal criminal charges in the District of New Jersey challenged the authority of Alina Habba to serve as Acting U.S. Attorney. They argued that her appointment violated federal law governing who may serve as an acting official in positions requiring presidential appointment and Senate confirmation. Habba’s appointment followed a series of administrative moves: after the previous U.S. Attorney resigned, the First Assistant U.S. Attorney initially assumed the acting duties under the Federal Vacancies Reform Act (FVRA). The Attorney General later appointed interim U.S. Attorneys, including Habba, under a statute specific to U.S. Attorneys, and after Habba’s interim term expired, she was made a Special Attorney and designated First Assistant, with the government contending this made her eligible for acting service under the FVRA.The United States District Court for the District of New Jersey, presided over by Judge Matthew W. Brann, denied the defendants’ motions to dismiss their indictments but granted their motions to disqualify Habba from participating in the prosecutions. The court found that Habba was not lawfully serving as Acting U.S. Attorney under the governing statutes. The government appealed the disqualification order.The United States Court of Appeals for the Third Circuit reviewed the District Court's order under the collateral order doctrine. The Third Circuit held that only the First Assistant in place at the time of the vacancy is eligible for automatic acting service under the FVRA and that Habba, having been nominated for the permanent U.S. Attorney position, was barred from acting service by the FVRA’s nomination restriction. The court also held that the Attorney General’s broad delegation of all U.S. Attorney powers to Habba was prohibited by the FVRA’s exclusivity provision. The Third Circuit affirmed the District Court’s order disqualifying Habba from the prosecutions. View "USA v. Giraud" on Justia Law

A student athlete who played football at Rutgers University challenged two NCAA Division I bylaws that counted seasons played at junior colleges toward the NCAA’s limit of four seasons of eligibility over a five-year period. The athlete, Jett Elad, had played at Ohio University, Garden City Community College (a junior college), and UNLV, exhausting his eligibility under the rule despite only playing three seasons at NCAA Division I schools. After learning of a favorable ruling for another athlete in a similar situation, Elad sought a waiver from the NCAA, which was denied. He then entered the transfer portal, was recruited by Rutgers, received a lucrative NIL contract, and filed suit seeking an injunction to allow him to play an additional season.The United States District Court for the District of New Jersey granted Elad a preliminary injunction, preventing the NCAA from counting his junior college season toward his eligibility limit. The NCAA appealed, arguing that the rule was not subject to antitrust scrutiny and that the lower court had failed to properly define the relevant market for its antitrust analysis.The United States Court of Appeals for the Third Circuit reviewed the case and applied de novo review to the district court’s legal conclusions and clear error review to factual findings. The appellate court held that NCAA eligibility rules are not categorically exempt from Sherman Act scrutiny and that the challenged “JUCO Rule” had a commercial effect because it restrained participation in the college football labor market. However, the court found that the district court erred by failing to adequately define the relevant market and by relying on outdated market realities that did not reflect changes following NCAA v. Alston. The Third Circuit vacated the preliminary injunction and remanded for further proceedings, instructing the lower court to conduct a proper market analysis. View "Elad v. NCAA" on Justia Law