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Heraeus, a German company, develops and produces bone cement, using copolymers. Biomet also sells bone cement and uses the same copolymers, which it buys from Esschem, a Pennsylvania company. Heraeus holds trade secrets related to the bone cement, including specifications for the copolymers. The trade secrets changed hands during joint ventures before allegedly falling into Esschem’s possession. Heraeus analyzed samples of Biomet’s bone cement in 2005 and discovered that it was virtually identical to Heraeus’ bone cement and that Esschem was manufacturing Biomet's copolymers. Heraeus sued Biomet in Germany in 2008, and brought discovery suits in the U.S. against Esschem and Biomet. By March 2011, Esschem produced e-mail chains between employees of Biomet and Esschem concerning the copolymers. During proceedings against Biomet, that information was corroborated. Heraeus contends it was not until then (December 2011), that it had sufficient information to believe that Esschem had actively participated in the misappropriation of its trade secrets. Less than three years later, Heraeus sued Esschem under the Pennsylvania Uniform Trade Secrets Act (PUTSA) which gives a plaintiff three years from when “the misappropriation was discovered or by the exercise of reasonable diligence should have been discovered” to bring suit. The district court ruled that the limitations period had run because Heraeus was aware of the facts supporting its claims by January 2009. The Third Circuit reversed in part, holding that Pennsylvania applies the rule of separate accrual to continuing trade secret misappropriations, Heraeus may sue for misappropriations that occurred within the three-year period before filing. The court agreed that alleged misappropriations more than three years before Heraeus filed suit are time-barred. View "Heraeus Medical GMBH v. Esschem Inc" on Justia Law

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In 2014, A.M. defrauded two banks and their customers, using skimming devices and PIN-pad overlays on ATMs. He was charged with 19 counts of bank fraud and aggravated identity theft, 18 U.S.C. 1028A and 1344. He pleaded guilty to only one count of each. A.M. objected to his guideline calculation for the bank-fraud conviction because it included a two-level enhancement for using “device-making equipment” to make counterfeit debit cards, U.S.S.G. 2B1.1(b)(11)(A)(i). He argued that his conviction for aggravated identity theft precluded that enhancement. The court disagreed but, because of A.M.’s cooperation, sentenced him to only 10 months’ imprisonment on that count. A.M. objected that the government had not also moved for a departure below the mandatory minimum sentence for his aggravated-identity-theft sentence. The court found that identity theft is an especially severe crime and sentenced A.M. to the mandatory minimum sentence of two years’ consecutive imprisonment. The Third Circuit affirmed. While device-making equipment can copy means of identification, it is not itself a means of identification, so the device-making enhancement was proper. The law empowers courts to depart below a statutory minimum only “[u]pon motion of the Government,” 18 U.S.C. 3553(e). The government made no such motion with respect to aggravated identity theft. View "United States v. Meireles-Candel" on Justia Law

Posted in: Criminal Law

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StoneMor sells funeral products and services and is required by state law to hold in trust a percentage of proceeds from “pre-need sales.” Under Generally Accepted Accounting Principles (GAAP), preneed sales held in trusts may not be represented as current revenue StoneMor issued nonGAAP financials that represented pre-need sales as a portion of current revenue; borrowed cash to distribute to investors the proceeds of preneed sales in the same quarter the sale was made; and used proceeds from equity sales to pay down the borrowed cash that funded those distributions. In 2016, StoneMor announced that it would restate about three years of previously-reported financial statements. Under GAAP regulations, StoneMor was temporarily prohibited from selling units and receiving corresponding equity proceeds. Plaintiffs allege that this prohibition caused StoneMor’s October 2016 unit distribution to fall by nearly half; StoneMor blamed the cut on salesforce issues. StoneMor’s unit price dropped by 45%. Investors sued under the Securities and Exchange Act of 1934, 15 U.S.C. 78j(b), and Rule 10b-5, alleging that Defendants made false or misleading statements, with scienter, which Plaintiffs relied on to their financial detriment. The Third Circuit affirmed the dismissal of the case for failure to satisfy the heightened pleading standards of the Private Securities Litigation Reform Act, 15 U.S.C. 78u-4. In a securities fraud case, a defendant’s sufficient disclosure of information can render alleged misrepresentations immaterial. StoneMor’s disclosures sufficiently informed reasonable investors of the risks inherent in its business. View "Fan v. Stonemor Partners LP" on Justia Law

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Beers was involuntarily committed to a psychiatric inpatient hospital in, 2005, after he told his mother that he was suicidal and put a gun in his mouth. Beers has had no further mental health issues. Beers challenged federal law prohibiting the possession of firearms by anyone who has previously been adjudicated as mentally ill or committed to a mental institution, 18 U.S.C. 922(g)(4), arguing that, as applied to him, it violates the Second Amendment. Beers claimed that, although he was previously involuntarily institutionalized, he has since been rehabilitated, which distinguishes his circumstances from those in the historically-barred class. The Third Circuit rejected his arguments, noting that the traditional justification for disarming mentally ill individuals was that they were considered dangerous to themselves and/or to the public at large. Courts are ill-equipped to determine whether any particular individual who was previously deemed mentally ill should have his firearm rights restored. View "Beers v. Attorney General United States" on Justia Law

Posted in: Constitutional Law

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In 2010, Pennsylvania inmate Houser sued prison officials (42 U.S.C.1983), claiming deliberate indifference to his medical needs. Houser unsuccessfully requested appointed counsel. Discovery proceeded. The defendants moved for summary judgment in 2013. Houser filed opposition papers pro se but again moved to appoint counsel. The court denied the defendants’ motions, granted Houser’s motion, and conducted a search to secure pro bono counsel. After two attorneys declined the case, Reed Smith assumed Houser’s representation and devoted over 1,000 hours to the case before moving to withdraw based on fundamental disagreements with Houser on strategy, a breakdown in communication, and an irremediably broken attorney-client relationship. The court told Houser that it could not dictate strategy, and stated: “We’re not going to ask anyone else... do you want to ... represent yourself?” Houser never gave a straightforward answer. The court granted Reed Smith’s motion. Houser unsuccessfully requested that the court put him back on the “appointment of counsel” list and stay the case. Noting that the case was five years old, the court pushed the trial to December 2015. In October 2015, Houser unsuccessfully moved to appoint counsel. A jury returned a verdict for the defendants. Houser unsuccessfully moved for a new trial based on the denial of his motion to appoint counsel. Houser moved to reconsider, arguing his claims had merit and involved “medical issues that were complex including requiring an expert” and the “conflicting testimony of multiple witness[es].” The Third Circuit affirmed the denial of the motion; denying Houser new counsel was not an abuse of discretion. View "Houser v. Folino" on Justia Law

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In 2005-2006, Blake and Orkis took out mortgages from JP Morgan to buy homes. In 2013, they filed a class action against JP Morgan under the Real Estate Settlement and Procedures Act, alleging a scheme to refer homeowners to mortgage insurers in exchange for streams of kickbacks. The Act has a one-year statute of limitations that runs from the date of the violation, 12 U.S.C. 2614. Blake and Orkis argued that, rather than the limitations period running from the mortgage closing, each kickback separately violated the Act and had its own limitations period. The Third Circuit accepted that argument. While the kickbacks ended more than a year before they sued, they attempted to piggyback on a different class action filed in 2011 that raised the same claims against JP Morgan but was dismissed. As members of that putative class, they argued, the limitations period should toll for them under the Supreme Court’s 1974 “American Pipe & Construction” decision. The Third Circuit affirmed the dismissal of their suit, citing the Supreme Court’s 2018 holding in “China Agritech” that a timely class action should never toll other class actions under American Pipe, which applies only to toll individual claims. View "Blake v. JP Morgan Chase Bank NA" on Justia Law

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In 2006, Sambare, a citizen of Burkina Faso, was admitted to the U.S. as a lawful permanent resident. Sambare was subsequently convicted of credit card theft and forgery. In 2013, when Sambare returned from visiting his mother in Ghana, ICE asserted that Sambare was inadmissible under 8 U.S.C. 1182(a)(2)(A)(i)(I), having been convicted of “crime[s] involving moral turpitude.” Sambare obtained a waiver of inadmissibility, 8 U.S.C. 1182(h), which restored his status as a lawful permanent resident. In 2015, Pennsylvania police stopped Sambare in his vehicle after he allegedly made an illegal U-turn. Sambare, who initially provided a false name, admitted that he had smoked marijuana before driving. Sambare tested positive for marijuana in his system and pleaded guilty to driving under the influence of a Schedule I controlled substance. The Immigration Court found that Sambare was removable because his conviction was for a “violation of . . . any law or regulation of a State . . . relating to a controlled substance . . . , other than a single offense involving possession for one’s own use of 30 grams or less of marijuana,” 8 U.S.C. 1227(a)(2)(B)(i). The Third Circuit dismissed Sambare’s petition for review, agreeing that Sambare’s conviction “is associated with the prohibition of driving, operating, or actual physical control of the movement of a vehicle . . . while there is a controlled substance in the individual’s blood,” which “is more serious than simple possession. View "Sambare v. Attorney General United States" on Justia Law

Posted in: Immigration Law

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Defendants maintain a database of healthcare providers, containing contact information, demographics, specialties, education, and related data. Defendants sell and license the database typically to healthcare, insurance, and pharmaceutical companies, who use it to update their provider directories, identify potential providers to fill gaps in their networks, and validate information when processing insurance claims. One way defendants update and verify the information in their database is to send unsolicited faxes to listed providers, requesting them to correct outdated or inaccurate information. The faxes inform the recipients that: As part of ongoing data maintenance of our Optum Provider Database product, Optum regularly contacts healthcare practitioners to verify demographic data regarding your office location(s). This outreach is independent of and not related to your participation in any Optum network.... This data is used by healthcare-related organizations to aid in claims payment, assist with provider authentication and recruiting, augment their own provider data, mitigate healthcare fraud and publish accurate provider directories....There is no cost to you to participate in this data maintenance initiative. This is not an attempt to sell you anything.” Having received such faxes, Mauthe sued under the Telephone Consumer Protection Act, 47 U.S.C. 227 (TCPA). The Third Circuit affirmed the rejection of his suit on summary judgment, finding that the faxes were not “advertisements” under the TCPA. They did not attempt to influence the purchasing decisions of any potential buyer. View "Robert W. Mauthe, M.D. P.C. v. Optum, Inc." on Justia Law

Posted in: Communications Law

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GSK's drug Avandia is indicated to treat Type II diabetes. Health insurance plans contend that GSK concealed evidence of Avandia’s cardiovascular risk, promoted Avandia as providing cardiovascular benefits, and reaped billions of dollars in profits. In 2007, an independent researcher published an article claiming that Avandia increased the risk of heart attack and cardiovascular disease. The FDA investigated, and the Senate Finance Committee released a report. Plaintiffs’ suits under the Racketeer Influenced and Corrupt Organizations Act (RICO) and state consumer protection laws became part of multi-district litigation (MDL). A protective order (PTO) covered discovery of confidential materials. GSK sought summary judgment on the consumer protection claims on preemption grounds and argued that the RICO claims should be dismissed for failing to identify a distinct RICO enterprise. The parties filed documents under seal pursuant to the PTO. Neither raised any issue as to the confidentiality of the sealed exhibits. The court granted GSK summary judgment. After the plans appealed, GSK sought to maintain the confidentiality of certain sealed documents that had been filed in connection with the summary judgment motion. The court unsealed its own summary judgment opinion but maintained the confidentiality of the remaining documents and directed GSK to file a redacted statement of undisputed material facts. The Third Circuit vacated and remanded. The district court failed to apply the presumption of public access and, instead, applied the Federal Rule of Civil Procedure 26 standard for a protective order. View "In re: Avandia Marketing Sales Practices & Products Liability Litigation" on Justia Law

Posted in: Civil Procedure

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Trant and Ashby had a heated encounter at a gas station in Bovoni, St. Thomas, that ended with each displaying his pistol. After law enforcement officers looked into these events, Trant was convicted as a convicted felon in possession of a firearm, 18 U.S.C. 922(g)(1). The Third Circuit affirmed. The district court did not abuse its discretion by granting the government’s motion to re-open its case-in-chief because Trant was not prejudiced. The motion was made before Trant had the opportunity to present his evidence, thereby giving him the opportunity to respond and also limiting any disruption to the proceedings. The court rejected Trant’s argument that the court should have permitted him to question Ashby about his possession of a firearm, suggesting it was probative of Ashby’s character for untruthfulness and necessary for the jury to evaluate Ashby’s credibility. The implausible nature of Ashby’s having an ulterior motive for testifying hardly made it “obvious” that Trant had the right to ask Ashby about the latter’s illegal possession of a firearm. Trant’s conviction was supported by sufficient evidence. View "United States v. Trant" on Justia Law