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Plaintiffs, licensed taxi and limousine operators, sued under 42 U.S.C. 1983, challenging an agreement between Newark and Uber as violating their rights under the Takings, Due Process, and Equal Protection Clauses. In order to operate in Newark without taxi medallions or commercial driver’s licenses, setting its own rates, Uber agreed to pay the city $1 million per year for 10 years; to provide $1.5 million in liability insurance for each of its drivers; to have a third-party provider conduct background checks on its drivers. The Third Circuit affirmed the dismissal of the suit. The agreement places the plaintiffs in an “undoubtedly difficult position” but the situation cannot be remedied through constitutional claims. Even if plaintiffs have a legally cognizable property interest in the medallions themselves, they remain in possession of and able to use their taxi medallions to conduct business. The decrease in the market value of the medallions is not sufficient to constitute a cognizable property interest necessary to state a claim under the Takings Clause. The city controls the number of medallions in circulation and maintains the ability to flood the market with medallions. With respect to equal protection, it is rational for the city to determine that customers require greater protections before accepting a ride from a taxi on the street than before accepting a ride where they are given the relevant information in advance. View "Newark Cab Association v. City of Newark" on Justia Law

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Arctic, an income trust, filed for bankruptcy under Canada’s analog of Chapter 11 and received recognition under 11 U.S.C. 1521(a). Its bankruptcy Plan imposed few limits on the Monitor (trustee) and insulated Arctic and its officers from any claim related to the bankruptcy with limited exceptions. The Monitor sold Arctic’s assets and repaid creditors in full. On December 11, 2014, Arctic issued notices announcing that the shareholders as of December 18 would be entitled to the initial distribution without specifying how much Arctic would distribute or when. Arctic did not notify the Financial Industry Regulatory Authority (FINRA) of its plans. FINRA regulates distributions on the U.S. Over-the-Counter Market. Nor did the Plan refer to FINRA’s rules. Arctic’s share price held steady until January 22, 2015, although its shares no longer traded with the right to the dividend and should have lost value. Brodskis bought 12,600,000 Arctic shares on the Over-the-Counter Market. On January 21, the Monitor announced that the next day it would distribute a dividend of 15.5557 cents per share to shareholders as of December 18. Brodskis argue FINRA would have set a date of January 23, 2015, so their shares would have entitled them to the dividend. On January 23, Canadian and American regulators froze trading. When trading resumed, Arctic's share price plunged from 21 to 5 cents, reflecting the paid-out dividend. Brodskis sued Arctic. The Bankruptcy Court dismissed the complaint as barred by the releases and res judicata. The Third Circuit affirmed. Brodskis bought shares subject to the Plan’s terms, including terms that governed post-confirmation acts taken to carry out the Plan, and were on notice. View "In re: Arctic Glacier International, Inc." on Justia Law

Posted in: Bankruptcy

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Newark Police received a report that the Audi had been carjacked at gunpoint. Three hours later, State Troopers spotted the Audi. Bland was behind the wheel. They activated their police lights., Bland drove recklessly, running red lights and shutting off his headlights, reaching speeds exceeding 100 miles per hour. Several officers joined the pursuit. Bland drove the wrong way down a one-way street, colliding with occupied police vehicles, which struck an unoccupied car. The cars became entangled. Officers surrounded the Audi and ordered Bland to surrender, then fired 28 shots, none of which hit Bland. Bland revved the engine and freed the Audi, striking the police car again. He drove over a curb and through a public park, then continued to speed through Newark with his lights off. During the chase, a police car struck an occupied civilian vehicle. Bland eventually drove to an intersection where an unmarked police vehicle rammed the Audi, sending the Audi into scaffolding that surrounded a school. It became entangled. Troopers surrounded the Audi and fired their weapons. Bland denies that the troopers shouted any commands or that he made evasive movements. Bland was shot 16-18 times and suffered a traumatic brain injury, respiratory failure, vision loss, and facial fractures. No officer observed Bland with a weapon. Bland sued under 42 U.S.C. 1983. On interlocutory appeal, the Third Circuit held that the officers were entitled to qualified immunity. Their conduct was within the bounds of Supreme Court decisions regarding the use of lethal force; they did not violate Bland’s clearly established constitutional rights. View "Bland v. City of Newark" on Justia Law

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Plaintiffs suffer from asbestos disease as a result of exposure to Grace's Montana mining and processing operations and sought to hold Grace’s insurers (CNA), liable for negligence. CNA sought to enforce a third-party claims channeling injunction entered under Grace’s confirmed plan of reorganization to bar the claims. Bankruptcy Code section 524(g) allows an injunction that channels asbestos mass-tort liability to a trust set up to compensate persons injured by the debtor’s asbestos; channeling injunctions can also protect the interests of non-debtors, such as insurers. The Third Circuit rejected the Plaintiffs’ argument that the Plan and Settlement Agreement’s terms preserved all of CNA’s duties as a workers’ compensation insurer in order to avoid preempting the state’s workers’ compensation laws. The court then applied a three-part analysis: Section 524(g)(4)(A)(ii) allows injunctions to “bar any action directed against a third party who is identifiable . . . and is alleged to be directly or indirectly liable for the conduct of, claims against, or demands on the debtor [that] . . . arises by reason of one of four statutory relationships between the third party and the debtor.” CNA is identified in the Injunction, satisfying the first requirement. Analysis of the second factor requires review of the law to determine whether the third-party’s liability is wholly separate from the debtor’s liability or instead depends on it. The Bankruptcy Court must make that determination, and, with respect to the “statutory relationship” factor, should review the law and determine whether CNA’s provision of insurance to Grace is relevant legally to the Montana Claims. View "W.R. Grace & Co. v. Carr" on Justia Law

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M.B., a second-grade student with dyslexia and epilepsy, took her service dog to school to detect and respond to her seizures. In third grade, M.B. switched to the School, which had a specialized program for dyslexic students. M.B.’s mother explained the need for a dog; the principal stated that M.B. was a “good fit.” Later, M.B. was paired with a new service dog, Buddy, but the principal asserted that Buddy would be “too much of a distraction.” Because Buddy was not allowed to accompany her, M.B. had extensive absences in third and fourth grades. In fifth grade, M.B.’s pediatric neurologist recommended that Buddy accompany M.B. at school. The principal then said that another student was allergic to dogs. M.B. missed school for more than two months. The parents of the allergic student informed the principal that they had arranged for allergy treatments and did not want M.B. to be excluded on their son’s behalf. The principal finally agreed that M.B. could return with Buddy in a special therapeutic shirt. The shirt made Buddy overheated and he failed to alert to M.B.’s seizures. At one point, M.B slept on the floor for hours after seizing. M.B. withdrew and enrolled in the local public school, which allowed Buddy to accompany her. M.B. had fallen behind and had to repeat fourth grade. M.B.’s parents sued. The Third Circuit reinstated their Rehabilitation Act claim: As a matter of first impression, despite the absence of a regulation specifically interpreting the RA's mandate of “reasonable accommodations,” the RA generally requires that individuals with disabilities be permitted to be accompanied by their service animals, consistent with the mandate of “reasonable modifications” under the Americans with Disabilities Act. Such requested accommodations are per se reasonable. View "Berardelli v. Allied Services Institute of Rehabilitation Medicine" on Justia Law

Posted in: Education Law

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In 2000, Peppers was indicted for numerous federal firearms and drug offenses, including murder with a firearm. After a trial, he was sentenced to life imprisonment. On remand, Peppers pleaded guilty as an armed career criminal in possession of a firearm, 18 U.S.C. 922(g)(1) and 924(e)(1). The charging document stated that Peppers had previously been convicted of felonies in six separate proceedings. Peppers was sentenced to 15 years of imprisonment--the mandatory minimum under the Armed Career Criminal Act. In his second habeas petition, Peppers challenged that sentence, citing the Supreme Court’s “Johnson” decision, which invalidated ACCA’s residual clause. The district court denied relief. The Third Circuit vacated. The jurisdictional gatekeeping inquiry for successive section 2255 motions based on Johnson requires only that a defendant prove he might have been sentenced under the now-unconstitutional residual clause, not that he was actually sentenced under that clause. A Rule 11(c)(1)(C) guilty plea does not preclude a defendant from collaterally attacking his sentence if his sentence would be unlawful once he proved that ACCA no longer applies to him. A defendant seeking a sentence correction in a successive section 2255 motion based on Johnson, who uses Johnson to satisfy the section 2255(h) gatekeeping requirements, may rely on post-sentencing cases to support his claim. Peppers’s convictions under Pennsylvania’s robbery statute, are not categorically ACCA violent felonies. Peppers did not prove his Johnson claim with respect to his Pennsylvania burglary conviction. The court remanded for analysis of whether treating the robbery convictions as predicate offenses under ACCA, was harmless in light of his other convictions. View "United States v. Peppers" on Justia Law

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Fattah, a prominent fixture in Philadelphia politics, financially overextended himself in both his personal life and his professional career during an ultimately unsuccessful run for mayor. Fattah received a substantial illicit loan to his mayoral campaign and used his political influence and personal connections to engage friends, employees, and others in an elaborate series of schemes aimed at preserving his political status by hiding the source of the illicit loan and its repayment. Fattah and his allies engaged in shady and, at times, illegal behavior, including the misuse of federal grant money and federal appropriations, the siphoning of money from nonprofit organizations to pay campaign debts, and the misappropriation of campaign funds to pay personal obligations. Based upon their actions, Fattah and four associates were charged in a 29-count indictment. Each was convicted on multiple counts. The Third Circuit affirmed in part, rejecting various challenges to evidentiary rulings, jury instructions, and the sufficiency of the evidence, but vacated certain convictions involving jury instructions concerning the meaning of the term “official act” as used in the bribery statute and the honest services fraud statute. In light of the Supreme Court’s 2016 “McDonnell” decision, released the week after the jury verdict, the instructions were incomplete and erroneous. View "United States v. Fattah" on Justia Law

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Reading, a Pennsylvania not-for-profit health system, issued auction rate securities (ARSs) to finance capital projects. J.P. Morgan was the underwriter and broker-dealer. Reading claims that J.P. Morgan and others artificially propped up the ARS market through undisclosed support bidding; when they stopped in 2008, the market collapsed. Reading filed state law claims and demanded arbitration with the Financial Industry Regulatory Authority (FINRA). The 2005 and 2007 broker-dealer agreements state “all actions and proceedings arising out of” the agreements or ARS transactions must be filed in the Southern District of New York. Reading filed a claim under FINRA Rule 12200, which requires a FINRA member (J.P. Morgan) to arbitrate any dispute at the customer’s request. J.P. Morgan refused, arguing that the forum-selection clauses in the 2005 and 2007 broker-dealer agreements constituted a waiver of Reading’s right to arbitrate under Rule 12200. The Third Circuit affirmed the Eastern District of Pennsylvania, which resolved the transfer dispute before the arbitrability dispute, declined to transfer the action, and required J.P. Morgan to submit to arbitration. Reading’s right to arbitrate is not contractual but arises out of a binding, regulatory rule, adopted by FINRA and approved by the SEC. Condoning an implicit waiver of Reading’s regulatory right to arbitrate would erode investors’ ability to use a cost-effective means of resolving allegations of misconduct and undermine FINRA’s ability to oversee and remedy such misconduct. View "Reading Health System v. Bear Stearns & Co., Inc." on Justia Law

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St. Pierre used New Jersey E-ZPass and agreed to maintain a positive balance in a prepaid account from which highway tolls are automatically deducted. When he failed to maintain a positive balance, E-ZPass assigned his account to a private debt collection agency, which sent St. Pierre a collection letter for $1,200.75. The envelope in which the letter was sent had a glassine window through which was visible St. Pierre’s name and address, a “quick response” code and St. Pierre’s account number. The Fair Debt Collection Practices Act, 15 U.S.C. 1692a-1692p, prohibits the use of “any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails,” in the collection of a “debt,” defined as an “obligation . . . of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes.” The district court concluded that the matter was not a debt, but a legal obligation in the nature of a tax. The Third Circuit affirmed the dismissal of St. Pierre’s suit. Violation of section 1692f(8) is a legally cognizable injury that confers standing on St. Pierre but the FDCPA is not implicated where, as here, the bulk, if not all services rendered, are made “without reference to peculiar benefits to particular individuals or property.” View "St. Pierre v. Retrieval Masters Creditors Bureau, Inc." on Justia Law

Posted in: Consumer Law

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Tepper took a home equity line of credit with NOVA Bank secured by a mortgage. The Pennsylvania Department of Banking closed the Bank. The FDIC was its receiver. Tepper stopped receiving statements but attempted to remit payments. The FDIC neither cashed nor returned the check. Rather than attempt further payments, Tepper waited for a statement. Months later, the FDIC declared the loan to be in default and sold it, assigning the mortgage, to Amos, an Illinois LLC that is not a lender but only purchases debts for collection. Amos mailed Tepper letters demanding lump-sum payments and sent a notice, containing a higher amount due, stating that it intended to foreclose, then filed a foreclosure action. Amos was not yet registered to do business in Pennsylvania. Tepper requested loan statements and to resolve the default. An Amos officer refused to provide statements and said the Tepper home belonged to Amos. Amos's attorney sent an email attempting to collect an even higher amount. Tepper filed suit under the Fair Debt Collections Practices Act. The court decided: Amos is a “debt collector” under 15 U.S.C. 1692a(6); the loan is a “debt” (1692a(5)); and Amos violated the Act but was not liable for failing to register. The Third Circuit affirmed that Amos is a debt collector. Whether an entity acquired the debts it collects after they became defaulted does not resolve whether that entity is a debt collector: an entity whose principal purpose is the collection of any debts is a debt collector regardless whether it owns the debts it collects. View "Tepper v. Amos Financial LLC" on Justia Law

Posted in: Consumer Law