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

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Over the past eight years, the Hudson County family court has required Malhan to pay $300,000 in child and spousal support to his putative ex-wife, Myronova. Malhan claims that New Jersey officials violated his federal rights when they failed to reduce his support obligations after he was awarded custody of their two children and Myronova obtained a job that pays more than his own. The district court dismissed Malhan’s second amended complaint, holding that it lacked jurisdiction under the Rooker-Feldman doctrine and that to the extent it had jurisdiction, it declined to exercise it under Younger v. Harris. The Third Circuit affirmed in part and reversed in part. Malhan does not complain of injuries caused by a state court judgment; none of the interlocutory orders in Malhan’s state case are “judgments.” Rooker-Feldman does not apply when state proceedings have neither ended nor led to orders reviewable by the U.S. Supreme Court. With respect to “Younger abstention,” the court noted that Malhan’s wife, not the state, began the family court case. The case has not sought to sanction Malhan for wrongdoing, enforce a parallel criminal statute, or impose a quasi-criminal investigation. Malhan is not trying to “annul the results” of a past garnishment. View "Malhan v. Secretary United States Department of State" on Justia Law

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Jury selection in Howell’s 2004 prosecution consisted of two venire panels. The first included 35 individuals, two of whom were black; both were excused for hardship. The second panel included 25 potential jurors, all of whom were white. Howell, a black man, was convicted for the 2002 felony murder of a white man by an all-white jury. Before jury selection, Howell filed a Motion to Ensure Representative Venire, arguing that he was entitled to a jury pool that represented a fair cross-section of the community, particularly with respect to race. The court held a hearing on Howell’s allegations that black individuals were systemically under-represented in Allegheny County’s jury pools and considered expert testimony that black individuals made up 4.87% of Allegheny County’s jury pool but made up 10.7% of the population of Allegheny County eligible for jury service. The court denied Howell’s motion. The Pennsylvania Superior Court held that Howell had not been denied a trial by a fair cross-section of the community. In Howell’s federal habeas proceeding, the court assumed, without deciding, “that the Superior Court erred in requiring [Howell] to show discriminatory intent,” but concluded that Howell failed to establish a Sixth Amendment violation because other courts found no constitutional violation in cases with higher percentages of disparity. The Third Circuit affirmed. Any underrepresentation in Howell’s jury pool was not caused by a systematically discriminatory process. View "Howell v. Superintendent Rockview SCI" on Justia Law

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National, hoping to contract with the federal government to provide student loan collection services, reached an Agreement with Net Gain, which procured networking relationships for its clients. In return for introductions, National agreed to pay a finder’s fee for any related contract that National “consummated” during the Agreement’s term. A few years later, Net Gain assigned the Agreement to Fed Cetera. During the effective period of the Agreement, National signed a contract with the government. It did not begin performance on that contract until after the Agreement’s applicable period ended. National refused to pay the finder’s fee, arguing that it had not “consummated” the federal contract. The district court ruled in favor of National. The Third Circuit reversed. The Agreement did not require some degree of performance while the Agreement was in force in order for a contract to be “consummated.” A Fee Transaction is consummated when it is formed, not when performance has begun. The economics of the contract are plausible only if Fed Cetera’s compensation turns on the satisfactory completion of its function—not events, like performance by National, that post-date the only service Fed Cetera performs and are outside of its control. View "Fed Cetera LLC v. National Credit Services Inc" on Justia Law

Posted in: Contracts

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Bank of Hope sued Ryu for embezzling money from its customers. As the case went on, Ryu began sending letters to the Bank’s shareholders, alleging that the Bank’s claims were baseless and were ruining his reputation. He hoped that the letters would pressure the Bank to settle. The Bank asked the magistrate judge to ban Ryu from contacting its shareholders. The district court affirmed the magistrate’s order imposing that ban. The Third Circuit vacated. The district court marshaled no evidence that this restriction on speech was needed to protect this trial’s fairness and integrity and it considered no less-restrictive alternatives. Courts have inherent power to keep their proceedings fair and orderly. They can use that power to order the parties before them not to talk with each other, the press, and the public. The First Amendment, however, requires an explanation of why restricting speech advances a substantial government interest, consider less-restrictive alternatives, and requires that the court ensure that any restriction does not sweep too broadly. View "Bank of Hope v. Chon" on Justia Law

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University of Pittsburgh Medical Center includes 20 hospitals. Its more than 2,700 doctors are employed by Medical Center subsidiaries. Each surgeon had a base salary and an annual Work-Unit quota. Every medical service is worth a certain number of Work Units, which are one component of Relative Value Units (RVUs). RVUs are the units that Medicare uses to measure how much a medical procedure is worth. The surgeons were rewarded or punished based on how many Work Units they generated. The number of Work Units billed by the Neurosurgery Department more than doubled in 2006-2009. The relators accuse the surgeons of artificially boosting their Work Units: The surgeons said they acted as assistants on surgeries and as teaching physicians when they did not and billed for procedures that never happened. They did surgeries that were medically unnecessary or needlessly complex. Most of the surgeons reported total Work Units that put them in the top 10% of neurosurgeons nationwide. Whenever a surgeon did a procedure at one of the hospitals, the Medical Center billed for hospital and ancillary services. The United States intervened in a suit as to the physician services claims, settling those claims for $2.5 million. It declined to intervene in the hospital services claims. The Third Circuit reversed the dismissal of those claims. The relators adequately pleaded violations of the Stark Act, 42 U.S.C. 1395nn(b)(4), which forbids hospitals to bill Medicare for certain services when the hospital has a financial relationship with the doctor who requested those services. It is likely that the surgeons' pay is so high that it must take referrals into account. Stark Act exceptions work like affirmative defenses; the burden lies with the defendant, even under the False Claims Act, 31 U.S.C. 3729(a)(1)(A). View "United States v. University of Pittsburgh Medical Center" on Justia Law

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Freethought proposed an ad to run on Lackawanna County public buses: “Atheists” with the group’s name and website. County of Lackawanna Transit System (COLTS) rejected the ad under its 2011 policy, prohibiting ads for tobacco, alcohol, firearms, political candidates; ads that in COLTS’s “sole discretion” were “derogatory” to racial, religious, and other specified groups; and ads that are “objectionable, controversial[,] or would generally be offensive to COLTS’[s] ridership. In promulgating the policy, COLTS considered vandalism directed at atheist posts in other locations. In 2013, COLTS added a prohibition on ads: that promote the existence or non-existence of a supreme deity, deities, being or beings; that address, promote, criticize or attack a religion or religions, religious beliefs or lack of religious beliefs; that directly quote or cite scriptures, religious text or texts involving religious beliefs or lack of religious beliefs; or [that] are otherwise religious in nature. The Third Circuit concluded that the policy discriminates based on viewpoint and violates the First Amendment. Government actors cannot restrict speech because they “disapprov[e] of the ideas expressed.” That a message is “decidedly religious in nature” does not relegate it to second-class status Even if COLTS’s ban on religious speech were viewpoint neutral, it is not reasonable. COLTS never received a complaint about an ad, even one sponsored by a racist and anti-Semitic blog. No one complained about the religious and political ads COLTS ran before it enacted its policies. View "Northeastern Pennsylvania Freethought Society v. County of Lackawanna Transit System" on Justia Law

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Sapa manufactures aluminum extruded profiles, pre-treats the metal and coats it with primer and topcoat. For decades, Sapa supplied “organically coated extruded aluminum profiles” to Marvin, which incorporated these extrusions with other materials to manufacture aluminum-clad windows and doors. This process was permanent, so if an extrusion was defective, it could not be swapped out; the whole window or door had to be replaced. In 2000-2010, Marvin bought about 28 million Sapa extrusions and incorporated them in about 8.5 million windows and doors. Marvin sometimes received complaints that the aluminum parts of its windows and doors would oxidize or corrode. The companies initially worked together to resolve the issues. In the mid-2000s, there was an increase in complaints, mostly from people who lived close to the ocean. In 2010, Marvin sued Sapa, alleging that Sapa had sold it extrusions that failed to meet Marvin’s specifications. In 2013, the companies settled their dispute for a large sum. Throughout the relevant period, Sapa maintained 28 commercial general liability insurance policies through eight carriers. Zurich accepted the defense under a reservation of rights, but the Insurers disclaimed coverage. Sapa sued them, asserting breach of contract. The district court held that Marvin’s claims were not an “occurrence” that triggered coverage. The Third Circuit vacated in part, citing Pennsylvania insurance law: whether a manufacturer may recover from its liability insurers the cost of settling a lawsuit alleging that the manufacturer’s product was defective turns on the language of the specific policies. Nineteen policies, containing an Accident Definition of “occurrence,” do not cover Marvin’s allegations, which are solely for faulty workmanship. Seven policies contain an Expected/Intended Definition that triggers a subjective-intent standard that must be considered on remand. Two policies with an Injurious Exposure Definition also include the Insured’s Intent Clause and require further consideration. View "Sapa Extrusions, Inc. v. Liberty Mutual Insurance Co." on Justia Law

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RDC is a direct purchaser and wholesaler of Remicade, the brand name of infliximab, a “biologic infusion drug” manufactured by J&J and used to treat inflammatory conditions such as rheumatoid arthritis and Crohn’s disease. For many years, Remicade was the only infliximab drug available. That position was threatened when the FDA began approving “biosimilars,” produced by other companies and deemed by the FDA to have no clinically meaningful differences from Remicade. RDC alleged that J&J sought to maintain Remicade’s monopoly by engaging in an anticompetitive “Biosimilar Readiness Plan,” which consisted of imposing biosimilar-exclusion contracts on insurers that either require insurers to deny coverage for biosimilars altogether or impose unreasonable preconditions governing coverage; multi-product bundling of J&J’s Remicade with other J&J drugs, biologics, and medical devices; and exclusionary agreements and bundling arrangements with healthcare providers. RDC’s own contractual relationship with J&J is limited to a 2015 Distribution Agreement, which is not alleged to be part of J&J’s Plan. The Agreement contains an arbitration clause, applicable to any claim “arising out of or relating to the Agreement. Reversing the district court, the Third Circuit held that RDC’s antitrust claims do “arise out of or relate to” the Agreement and must be referred to arbitration. View "In re: Remicade (Direct Purchaser) Antitrust Litigation" on Justia Law

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In 2014, Weber sued, pro se, nearly 60 defendants, based on her dealings with New Jersey public officials during a child custody matter. When she filed her federal complaint, Weber was also appealing an adverse custody decision in the New Jersey Superior Court. That seemingly-related action caused the district court to consider the prudential limitations on subject-matter jurisdiction in the abstention doctrines. The court dismissed Weber’s complaint without prejudice, permitting her 30 days to amend. Weber filed a notice of appeal. The Third Circuit Clerk responded, advising Weber, warning of "possible dismissal due to a jurisdictional defect” because her complaint had been dismissed without prejudice. The letter enclosed a copy of 28 U.S.C. 1291, and stated that, “to be final, order of dismissal must be with prejudice; order dismissing without prejudice contemplates leave to amend and is not appealable unless plaintiff elects to stand on complaint.” Receiving no response from the district court, Weber withdrew her appeal. Defendants sought dismissal with prejudice. The district court made an electronic entry on the docket: “Civil Case Terminated." Weber filed a new notice of appeal. The Third Circuit dismissed for lack of a final order. The docket entry was a utility event; Weber cannot rely on the entry. Weber’s indecision does not show clear and unequivocal intent, so the “stand on the complaint” doctrine cannot rescue the lack of a final order. Weber’s case remains pending in the district court. View "Weber v. McGrogan" on Justia Law

Posted in: Civil Procedure

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Arianna Holding Company purchased a tax lien on a piece of property owned by the Hacklers and eventually obtained title to the Hacklers’ property via foreclosure proceedings. Shortly after Arianna obtained title, the Hacklers filed for Chapter 13 bankruptcy and sought to void the transfer of the title as preferential, 11 U.S.C. 547(b). The Bankruptcy Court and the district court ruled in favor of the Hacklers. The Third Circuit affirmed. The title transfer meets 547(b)’s requirements for avoidance. The transfer was made to or for the benefit of a creditor, was made for an antecedent debt, was made while the debtor was insolvent, was made on or within 90 days before filing for bankruptcy, and enabled the creditor to receive more than it would have received in a Chapter 7 liquidation proceeding. The petition and schedules listed the value of the property at $335,000, which far exceeded the value of the liens against the property; Arianna filed a proof of claim for $42,561.21 and other liens totaled no more than $89,000. The Hacklers’ Chapter 13 plan proposed to pay Arianna’s claim in full. Federalism concerns raised by Arianna cannot overcome the plain language of the Code. View "In Re: Hackler" on Justia Law