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

Daniel Rutherford sought a reduction of his 42.5-year sentence for two armed robberies, arguing that he is eligible for compassionate release due to changes in sentencing laws under the First Step Act. This Act, among other things, reduced mandatory minimum sentences for certain crimes but did not make these changes retroactive. Rutherford contended that if sentenced today, his sentence would be significantly shorter due to these changes.The United States District Court for the Eastern District of Pennsylvania denied Rutherford's motion, citing the Third Circuit's precedent in United States v. Andrews. In Andrews, the court held that nonretroactive changes to sentencing laws, such as those in the First Step Act, cannot be considered "extraordinary and compelling reasons" for compassionate release. The District Court concluded that this precedent barred Rutherford's argument.On appeal, the United States Court of Appeals for the Third Circuit affirmed the District Court's decision. The Third Circuit reiterated its holding in Andrews, stating that the nonretroactive changes to 18 U.S.C. § 924(c) under the First Step Act cannot be considered as a basis for compassionate release. The court emphasized that allowing such changes to be considered would conflict with Congress's explicit decision to make these changes nonretroactive. The court also noted that while the Sentencing Commission's amended policy statement allows for consideration of nonretroactive changes in certain circumstances, this policy cannot override the clear intent of Congress as interpreted in Andrews.Thus, the Third Circuit held that the First Step Act's changes to § 924(c) cannot be considered in determining eligibility for compassionate release, affirming the District Court's denial of Rutherford's motion. View "USA v. Rutherford" on Justia Law

Kay Ellison, co-founder of a charter airline, was convicted of federal wire fraud, bank fraud, and conspiracy. The airline, Direct Air, faced cash flow issues and Ellison siphoned millions from an escrow account through fictitious reservations and falsified records. She was charged alongside Judy Tull and chose not to testify or present a defense at trial. The jury convicted her on all counts, and she was sentenced to ninety-four months in prison and ordered to pay over $19 million in restitution. Her convictions were affirmed on direct appeal.Ellison filed a motion to vacate her sentence under 28 U.S.C. § 2255, claiming ineffective assistance of counsel. She argued her attorney incorrectly advised her that if she did not testify, she could not present other evidence, which she claimed prejudiced her defense. The United States District Court for the District of New Jersey denied her motion without an evidentiary hearing, concluding that even if her counsel was ineffective, she could not show prejudice because there was no reasonable probability that the jury would have acquitted her if she had testified or presented other witnesses.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's decision. The Third Circuit applied the Strickland v. Washington standard, which requires showing a reasonable probability that the result of the proceeding would have been different but for the attorney's errors. The court found that Ellison failed to demonstrate such a probability, as her proposed testimony and that of her witnesses would not have likely changed the jury's verdict given the strong evidence against her. Thus, the denial of her habeas corpus petition was upheld. View "Ellison v. USA" on Justia Law

Several contractors and an employee, who regularly handle public works projects for PennDOT and SEPTA, challenged Philadelphia's requirement for project labor agreements (PLAs) on public projects. These PLAs mandated union recognition and membership, and set workforce diversity goals. The plaintiffs argued that these requirements violated their First Amendment rights and the Equal Protection Clause, as well as 42 U.S.C. § 1981. They were ineligible to bid on certain city projects due to their existing collective bargaining agreements with the United Steelworkers, which is not affiliated with the required unions.The United States District Court for the Eastern District of Pennsylvania granted summary judgment to Philadelphia. The court found that the plaintiffs lacked standing to challenge the union-eligibility requirement and failed to show that the diversity requirement caused them harm based on race. The court also concluded that the plaintiffs' § 1981 claim failed because race was not a but-for cause of their inability to work on city projects with PLAs.The United States Court of Appeals for the Third Circuit reviewed the case and found that the plaintiffs had standing to challenge the union-eligibility requirement under the First Amendment. The court determined that the plaintiffs suffered a concrete and particularized injury by being ineligible to bid on city projects due to the PLAs. The court also found that the plaintiffs' claims were not moot despite Philadelphia's subsequent changes to the PLAs, as the plaintiffs sought damages for past violations and prospective relief.The Third Circuit also found that the plaintiffs had standing to raise an Equal Protection claim, as they demonstrated an intent to bid on future projects covered by the PLAs. The court vacated the District Court's judgment and remanded the case for further proceedings to consider the merits of the plaintiffs' First Amendment, Equal Protection Clause, and § 1981 claims. View "Road-Con Inc v. City of Philadelphia" on Justia Law

Eric Gilbert filed for Chapter 7 bankruptcy, listing his interest in retirement accounts worth approximately $1.7 million. The issue was whether these accounts could be accessed by creditors due to alleged violations of federal law governing retirement plans. The Bankruptcy Court ruled that the accounts were protected from creditors, and the District Court affirmed this decision.The Bankruptcy Court dismissed the trustee John McDonnell's complaint, which sought to include the retirement accounts in the bankruptcy estate, arguing that the accounts violated ERISA and the IRC. The court found that the accounts were excluded from the estate under § 541(c)(2) of the Bankruptcy Code, which protects interests in trusts with enforceable anti-alienation provisions under applicable nonbankruptcy law. The District Court upheld this ruling, agreeing that ERISA's anti-alienation provision applied regardless of the alleged violations.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the lower courts' decisions. The court held that the retirement accounts were excluded from the bankruptcy estate under § 541(c)(2) because ERISA's anti-alienation provision was enforceable, even if the accounts did not comply with ERISA and the IRC. The court also dismissed McDonnell's claims regarding preferential transfers and fraudulent conveyances, as the transactions in question did not involve Gilbert parting with his property. Additionally, the court found no abuse of discretion in the Bankruptcy Court's decisions to dismiss the complaint with prejudice, shorten the time for briefing, and strike certain items from the appellate record. View "In re: Gilbert" on Justia Law

The case involves James Peperno, Jr., who was found guilty by a jury of nine counts of conspiracy to commit bribery and wire fraud, among other related charges. Peperno devised a scheme to solicit bribes from Walter Stocki, who was involved in zoning litigation with the borough of Old Forge, Pennsylvania. Peperno, along with Robert Semenza, Jr., the Old Forge Borough Council President, planned to influence the litigation in Stocki's favor in exchange for bribes. Peperno initially approached Stocki in January 2019, asking for a $20,000 upfront payment and a monthly retainer. Stocki recorded their conversations and later contacted the FBI, which led to further recorded interactions and payments facilitated by the FBI.The United States District Court for the Middle District of Pennsylvania presided over the case. At trial, Peperno was found guilty on all counts except for two counts of money laundering. The Presentence Report (PSR) recommended sentencing enhancements for multiple bribes and for the total value of the bribes exceeding $15,000. Peperno objected to these enhancements, but the District Court overruled his objections, finding the recommendations supported by the evidence. The court sentenced Peperno to 72 months’ imprisonment, considering his intent and financial motivations.The United States Court of Appeals for the Third Circuit reviewed the case. Peperno appealed, arguing that the District Court erred in denying his request for a jury instruction on entrapment and in applying the sentencing enhancements. The Third Circuit held that the District Court correctly denied the entrapment instruction, as Peperno failed to show government inducement or lack of predisposition. The court also upheld the sentencing enhancements, agreeing that the evidence supported the finding of multiple bribes and that the total value of the bribes exceeded $15,000. The Third Circuit affirmed the District Court’s judgment of sentence. View "USA v. Peperno" on Justia Law

Meghan Young was denied a mortgage loan due to an erroneous credit report prepared by Experian Information Solutions, Inc. The report falsely indicated that foreclosure proceedings had been initiated against her, despite her having paid off her mortgage in full. Following this, Young enrolled in a credit monitoring service called CreditWorks, which is affiliated with Experian. The terms of use for CreditWorks included an arbitration agreement covering disputes related to the service.Young sued Experian in the District of New Jersey for violations of the Fair Credit Reporting Act. Experian moved to compel arbitration based on the CreditWorks agreement. The District Court denied the motion without prejudice, allowing for limited discovery on the issue of arbitrability. The court applied the summary judgment standard from Guidotti v. Legal Helpers Debt Resolution, L.L.C., as the arbitration agreement was not apparent from the face of the complaint.The United States Court of Appeals for the Third Circuit reviewed the case. The court clarified that discovery is not necessary when there is no factual dispute about the existence or validity of the arbitration agreement. Since Young did not dispute the existence of the agreement but only its scope, and because the agreement delegated arbitrability issues to the arbitrator, the court held that the District Court should have granted the motion to compel arbitration without discovery. The Third Circuit vacated the District Court’s order and remanded the case for further proceedings consistent with its opinion. View "Young v. Experian Information Solutions Inc" on Justia Law

Two employees of a publicly traded company raised concerns internally that the company had overstated its earnings by not accounting for slower-than-expected drilling speeds. Subsequently, an article in The Wall Street Journal reported similar allegations, and within three months, the company terminated both employees. The employees then filed a complaint with the Secretary of Labor, claiming their termination violated whistleblower protections under the Sarbanes-Oxley Act (SOX). An administrative proceeding resulted in a preliminary order for their reinstatement, which the company ignored.The employees sought to enforce the reinstatement order in the United States District Court for the District of New Jersey. The District Court dismissed the case for lack of subject-matter jurisdiction, interpreting the relevant statute as not granting it the power to enforce the preliminary order. The employees appealed this decision.While the appeal was pending, the employees chose to abandon the administrative process and filed a separate civil action in federal court. Consequently, the administrative proceedings were terminated. The company then moved to dismiss the appeal on mootness grounds.The United States Court of Appeals for the Third Circuit reviewed the case and determined that the employees' request to enforce the preliminary reinstatement order no longer satisfied the redressability requirement for Article III standing. The preliminary order was extinguished with the dismissal of the administrative proceedings, and a federal court cannot enforce a non-existent order. Therefore, the employees lost Article III standing during the litigation, and no exception to mootness applied. The Third Circuit vacated the District Court’s judgment and remanded the case with instructions to dismiss it on mootness grounds. View "Gulden v. Exxon Mobil Corp" on Justia Law

Ephriam Rodriquez, a bus operator, was terminated by the Southeastern Pennsylvania Transportation Authority (SEPTA) after accumulating excessive negative attendance points under his union’s Collective Bargaining Agreement. His final absence on June 8, 2018, was due to a migraine headache. Following an informal hearing on June 26, where his discharge was recommended, Rodriquez applied for leave under the Family and Medical Leave Act (FMLA) and sought medical documentation to support his claim. Despite this, SEPTA held a formal hearing and approved his termination.Rodriquez filed a lawsuit in the United States District Court for the Eastern District of Pennsylvania, alleging FMLA retaliation and interference. The jury found in favor of Rodriquez on the interference claim, awarding him $20,000 in economic damages, but ruled in favor of SEPTA on the retaliation claim. SEPTA then moved for judgment as a matter of law, arguing that Rodriquez did not have a “serious health condition” under the FMLA at the time of his absence. The District Court granted SEPTA’s motion, leading to Rodriquez’s appeal.The United States Court of Appeals for the Third Circuit reviewed the District Court’s decision de novo. The appellate court affirmed the lower court’s ruling, holding that Rodriquez failed to demonstrate that his migraines constituted a “chronic serious health condition” as defined by the FMLA. Specifically, Rodriquez did not provide evidence of periodic visits to a healthcare provider for his migraines before his termination, which is a requirement under the FMLA regulations. The court concluded that there was no legally sufficient evidence for the jury to find that Rodriquez had a qualifying serious health condition at the time of his June 8 absence. View "Rodriquez v. SEPTA" on Justia Law

William Valentin, along with four other men, robbed a jewelry store in New Jersey, during which Valentin pointed a loaded gun at a store employee. The robbers stole nearly $900,000 in jewelry and left behind substantial evidence, including video footage, fingerprints, DNA, and cell phone records. A jury convicted Valentin of Hobbs Act robbery, conspiracy to commit Hobbs Act robbery, use of a firearm during a crime of violence, and conspiracy to use a firearm during a crime of violence. The District Court sentenced him to a term of imprisonment within the applicable sentencing guidelines range.The District Court for the District of New Jersey initially tried Valentin and his cousin Jonathan Arce together, but the jury acquitted Arce and failed to reach a verdict for Valentin, resulting in a mistrial. Valentin was retried a year later, and the jury found him guilty on all counts. The District Court sentenced him as a career offender, calculating the applicable sentencing guidelines range as 360 months to life imprisonment. Valentin did not object to the stated basis for the sentence, and the Court imposed a within-guidelines sentence of 360 months’ imprisonment, 5 years’ supervised release, and $889,844.33 in restitution.The United States Court of Appeals for the Third Circuit reviewed the case. Valentin raised several challenges to his convictions and sentence, including the admission of certain identification testimony, the exclusion of other similar testimony, the admission of evidence of a prior criminal relationship, and the reasonableness of his sentence. The Court of Appeals found that any potential errors in the District Court’s evidentiary rulings were harmless given the overwhelming evidence of Valentin’s guilt. The Court also held that brandishing a firearm during a robbery qualifies as a crime of violence under the sentencing guidelines. Consequently, the Court of Appeals affirmed the District Court’s judgment of conviction and sentence. View "USA v. Valentin" on Justia Law

Glenn O. Hawbaker, Inc. (GOH) engaged in a scheme to underpay its employees by misappropriating fringe benefits owed under the Pennsylvania Prevailing Wage Act (PWA) and the Davis-Bacon Act (DBA). This led to two class-action lawsuits against GOH. GOH sought coverage under its insurance policy with Twin City Fire Insurance Company (Twin City), which denied coverage and sought a declaratory judgment that it had no duty to provide coverage. GOH and its Board of Directors counterclaimed, alleging breach of contract and seeking a declaration that certain claims in the class actions were covered under the policy.The United States District Court for the Middle District of Pennsylvania dismissed GOH's counterclaims, concluding that the claims were not covered under the policy due to a policy exclusion for claims related to "Wage and Hour Violations." The court also granted Twin City's motion for judgment on the pleadings, affirming that Twin City had no duty to defend or indemnify GOH for the class-action claims.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's judgment. The Third Circuit agreed that the claims in question were not covered under the policy because they were related to wage and hour violations, which were explicitly excluded from coverage. The court emphasized that the exclusion applied broadly to any claims "based upon, arising from, or in any way related to" wage and hour violations, and found that the factual allegations in the class actions were indeed related to such violations. Thus, Twin City had no duty to defend or indemnify GOH under the terms of the policy. View "Twin City Fire Insurance Co. v. Glenn O. Hawbake, Inc." on Justia Law