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

The case revolves around a dispute between Sanofi-Aventis U.S. LLC and Mallinckrodt PLC. Sanofi sold its rights in a drug to Mallinckrodt for $100,000 and a perpetual annual royalty. The drug was successful, but Mallinckrodt filed for bankruptcy and sought to convert Sanofi's right to royalties into an unsecured claim. Mallinckrodt aimed to discharge all future royalty payments and continue selling the drug without paying royalties, leaving Sanofi with only an unsecured claim.The bankruptcy court approved Mallinckrodt's discharge, ruling that since Sanofi had fully transferred ownership years ago, the contract was not executory. It also held that Sanofi's remaining contractual right to future royalties was an unsecured, contingent claim, which Mallinckrodt could discharge. The District Court affirmed these rulings.The United States Court of Appeals for the Third Circuit reviewed these rulings de novo. The court held that Sanofi's right to payment arose before Mallinckrodt filed for bankruptcy, making its royalties dischargeable in bankruptcy. The court rejected Sanofi's argument that the future royalties were too indefinite to be a claim, stating that the Bankruptcy Code allows for claims that are both contingent and unliquidated. The court also disagreed with Sanofi's assertion that bankruptcy cannot resolve its royalties claim because it will not exist until Mallinckrodt hits the sales trigger each year. The court ruled that a claim can arise before it is triggered, and most contract claims arise when the parties sign the contract. The court affirmed the lower courts' decisions, ruling that Sanofi's contingent claim arose before Mallinckrodt went bankrupt and is therefore dischargeable in bankruptcy. View "In re Mallinckrodt PLC" on Justia Law

The case involves Alice Chu, who was indicted in September 2019 and convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud. Chu's trial was initially set for February 22, 2021, but due to the COVID-19 pandemic, the Chief Judge of the District of New Jersey issued multiple standing orders that delayed trials and excluded these delays from Speedy Trial Act (STA) calculations. Chu's trial eventually commenced on March 1, 2022.Chu moved to dismiss multiple times on STA grounds, arguing that the delays denied her right to a speedy trial under the Sixth Amendment and that the government abused the grand jury process causing inexcusable delay. The District Court denied these motions. After her conviction, Chu filed two motions for a new trial, claiming she was unfairly prejudiced by trial testimony about prior bad acts and that newly discovered evidence could change the probability of a conviction at trial. The District Court denied both motions.The United States Court of Appeals for the Third Circuit affirmed the District Court's decisions. The Court of Appeals agreed with the District Court that the exclusions resulting from the COVID-19 pandemic did not violate defendants’ rights under the STA. The Court also found no clear error in the District Court’s adoption of the factual findings contained within the COVID Standing Orders. The Court of Appeals further agreed with the District Court that Chu failed to show that the government’s “sole or dominant purpose” was to impermissibly delay her trial. The Court of Appeals concluded that the District Court did not abuse its discretion in denying Chu's motions for a new trial and that the evidence at trial was sufficient to prove Chu’s knowledge and intent to commit health care fraud. View "United States v. Chu" on Justia Law

The case involves a challenge to New Jersey's primary election ballot design, known as the "county-line" ballot. The plaintiffs, Andy Kim, Sarah Schoengood, and Carolyn Rush, who are all Democratic candidates for various offices, argue that the county-line ballot design infringes their First Amendment rights. They contend that the design unfairly favors candidates endorsed by local party leaders, placing them in prime ballot positions, while disadvantaging those who are not endorsed or choose not to associate with certain candidates.The case was initially heard in the United States District Court for the District of New Jersey, where the plaintiffs sought a preliminary injunction to prevent the use of county-line ballots and require the use of office-block format ballots instead. The District Court granted the injunction, finding that the plaintiffs had shown a severe burden on their First Amendment rights and that the state's interests did not outweigh these burdens.On appeal, the United States Court of Appeals for the Third Circuit affirmed the District Court's decision. The Court of Appeals agreed that the county-line ballot design imposed a severe burden on the plaintiffs' First Amendment rights. It also found that the design likely violated the Elections Clause of the Constitution, which limits a state's power to regulate elections. The court concluded that the plaintiffs had demonstrated a substantial likelihood of success on the merits of their claims, and that they would suffer irreparable harm without the injunction. The court also found that the balance of harms and the public interest favored the plaintiffs. View "Kim v. Hanlon" on Justia Law

The case involves a long-standing trademark dispute between two charities, Kars 4 Kids, Inc. and America Can! Cars for Kids. Both organizations sell donated vehicles to fund children's education programs. In 2003, Texas-based America Can discovered a Kars 4 Kids advertisement in the Dallas Morning News and sent Kars 4 Kids a cease and desist letter, asserting America Can’s rights to the “Cars for Kids” mark in Texas. Kars 4 Kids, based in New Jersey, did not respond to the letter and continued to advertise in Texas.The case was first brought to the United States District Court for the District of New Jersey in 2014, where both parties alleged federal and state trademark infringement, unfair competition, and trademark dilution claims. A jury found that Kars 4 Kids infringed on America Can’s unregistered mark in Texas. The District Court awarded monetary and injunctive relief. However, the court's decision was appealed, and the case was remanded for the District Court to reexamine its conclusion that the doctrine of laches did not bar America Can’s claims.On remand, the District Court again concluded that laches did not bar relief. The court found that Kars 4 Kids’ advertising in Texas was not open and notorious enough to prompt America Can to act more quickly to protect its mark. The court also found that Kars 4 Kids was not prejudiced by America Can’s delay because Kars 4 Kids had assumed the risk of its advertising campaigns after receiving the 2003 cease and desist letter.The United States Court of Appeals for the Third Circuit disagreed with the District Court's findings. The appellate court held that the District Court abused its discretion by not properly applying the presumption in favor of laches. The court found that America Can failed to establish that its delay in bringing suit was excusable and that Kars 4 Kids was not prejudiced as a result of that delay. Therefore, the court vacated the District Court's judgment granting monetary and injunctive relief and remanded with instructions to dismiss America Can’s claims with prejudice based on laches. The court also dismissed as moot America Can’s cross-appeal. View "Kars 4 Kids Inc v. America Can Cars For Kids" on Justia Law

The case involves Terril Edwards, who was convicted in 2008 on three counts: possession with intent to distribute more than 50 grams of crack cocaine, carrying a firearm during and in relation to a drug trafficking crime, and possession of a firearm by a felon. Based on Edwards’s criminal history, the District Court determined that the statutory minimum for the Drug Trafficking Charge was life imprisonment. In 2011, Edwards filed a motion to vacate, set aside, or correct his sentence, which the District Court denied. In 2019, following the passage of the First Step Act of 2018, Edwards filed a motion for resentencing. The District Court granted the motion and resentenced Edwards to a total of 240 months.Edwards's conviction and sentence were affirmed by the United States Court of Appeals for the Third Circuit. In 2020, Edwards filed a second motion to vacate, set aside, or correct his sentence in light of the Supreme Court’s decision in Rehaif v. United States. The District Court transferred the petition to the Third Circuit to determine whether it could consider the successive petition.The United States Court of Appeals for the Third Circuit held that Edwards's second motion was a second or successive motion because a First Step Act resentencing is unrelated to the validity of the judgment it amends and thus does not result in a new, intervening judgment under Magwood. The court also held that Edwards had not satisfied the requirements of § 2255(h) because Rehaif did not announce a “new rule of constitutional law” made retroactive to cases on collateral review by the Supreme Court. Finally, the court held that Edwards could not challenge his sentence under 28 U.S.C. § 2241, as the Supreme Court had foreclosed this possibility in Jones v. Hendrix. As a result, the court denied Edwards's requests. View "In re Edwards" on Justia Law

The case involves Sherry and David Lewis, who sued their auto insurer, GEICO, for allegedly breaching their insurance contract when their car was totaled. The Lewises claimed that GEICO undercompensated them by applying a "condition adjustment" that artificially reduced its valuation of their car and by failing to reimburse them for taxes and fees necessary to replace the car. They sought to certify a class of similarly underpaid insureds for each instance of underpayment.The District Court certified both classes under Federal Rule of Civil Procedure 23. GEICO appealed the decision, challenging the certification of the classes.The United States Court of Appeals for the Third Circuit affirmed the order certifying the class for the taxes-and-fees claim. However, the court found that the Lewises lacked standing to bring the condition-adjustment claim as they failed to show that GEICO caused them concrete harm when it applied the condition adjustment. Therefore, the court vacated the District Court’s order in part and remanded with instructions to dismiss the condition-adjustment claim.Regarding the taxes-and-fees claim, the court found that the Lewises met the requirements for standing as they alleged financial harm stemming from GEICO's pre-2020 practice of declining to pay taxes and fees to lessee insureds. The court also found that the class was ascertainable, meeting the requirements for class certification. View "Lewis v. GEICO" on Justia Law

The case involves the Government Employees Insurance Company (GEICO) and its affiliates, who sued several medical practices in separate actions in the District of New Jersey. GEICO alleged that the practices defrauded them of more than $10 million by abusing the personal injury protection (PIP) benefits offered by its auto policies. The practices filed exaggerated claims for medical services, billed medically unnecessary care, and engaged in illegal kickback schemes. GEICO's suits against the practices each included a claim under the New Jersey’s Insurance Fraud Prevention Act (IFPA).The practices sought arbitration of GEICO’s IFPA claim, arguing that a valid arbitration agreement covered the claim and that a different New Jersey insurance law allowed them to compel arbitration. However, each District Court disagreed, ruling instead that IFPA claims cannot be arbitrated. The practices appealed to the United States Court of Appeals for the Third Circuit.The Third Circuit Court of Appeals reversed the lower courts' decisions and compelled arbitration. The court found that the IFPA does not implicitly prohibit arbitration. The court also found that the IFPA claims before them should be compelled to arbitration under a different New Jersey law. Furthermore, the court concluded that GEICO’s IFPA claims must be compelled to arbitration under the Federal Arbitration Act (FAA). The court held that the arbitration agreement in the Plan covers the IFPA claims and therefore, must compel arbitration. The court also addressed practice-specific issues in the Mount Prospect and Precision Spine appeals. The court concluded that the District Court should not have granted GEICO leave to amend its complaint in the Mount Prospect case. In the Precision Spine case, the court held that the District Court abused its discretion by denying Precision Spine’s motion sua sponte because it was addressed to the unamended complaint. View "GEICO v. Mount Prospect Chiropractic Center PA" on Justia Law

The case involves Carlos Hill, who was convicted in 2013 for possession of a firearm in violation of 18 U.S.C. § 922(g)(1), a law that makes it illegal for a person convicted of a crime punishable by more than a year in prison to possess a firearm. In 2019, Hill sought to challenge his conviction following the Supreme Court's decision in Rehaif v. United States, which overturned previous interpretations of § 922(g)(1) and held that the government must prove that the person knew they belonged to the prohibited group. Hill requested the appointment of counsel to pursue his Rehaif claim in a motion under 28 U.S.C. § 2255. The District Court denied his request, ruling that Hill's § 2255 motion was second or successive and that he did not qualify for relief under Rehaif.The United States Court of Appeals for the Third Circuit disagreed with the District Court's ruling. The appellate court determined that Hill's § 2255 motion was not second or successive, and that Rehaif announced a new substantive rule that is retroactive for non-successive § 2255 motions. The court concluded that the District Court's order was incorrect and vacated it, remanding the case for further proceedings. The appellate court also issued a certificate of appealability for Hill's appeal, finding that jurists of reason would find it debatable whether Hill has stated a valid constitutional claim and whether the District Court was correct in its procedural ruling. View "United States v. Hill" on Justia Law

Michael Rivera, a Pennsylvania state prisoner, was in an open-air telephone cage when he overheard prison officials preparing to forcibly extract another inmate, Ryan Miller, from a nearby cell. Anticipating the use of pepper spray, Rivera informed the officials that exposure to the spray would trigger his asthma. Despite his pleas to be moved back to his cell, the officials refused, citing the lack of available personnel due to the ongoing preparations for Miller's extraction. After the pepper spray was deployed, Rivera suffered an asthma attack. He sued the prison officials for damages, alleging they had acted with deliberate indifference to the substantial risk of serious harm to him, in violation of the Eighth Amendment.The United States District Court for the Middle District of Pennsylvania granted summary judgment in favor of the prison officials. The court concluded that the law was not clearly established to the extent that the officials would have known that their actions violated the Eighth Amendment.On appeal, the United States Court of Appeals for the Third Circuit affirmed the lower court's decision. The appellate court found that the prison officials were entitled to qualified immunity because their actions did not violate clearly established statutory or constitutional rights of which a reasonable person would have known. The court noted that the officials were confronted with competing institutional concerns and that the cited case law did not clearly establish that the officials' decision to prioritize one prisoner's health and safety over another's violated the Eighth Amendment. View "Rivera v. Redfern" on Justia Law

This case revolves around Harvey Robinson, who was convicted of multiple crimes including three counts of first-degree murder. The prosecution sought the death penalty for each of the murder counts, arguing that Robinson posed a future danger to society if he was ever released from prison. During sentencing, a juror asked the judge whether a life sentence would entail parole. The judge initially speculated that while current law doesn't permit parole, the law might change in the future. Later, the judge corrected his statement, firmly asserting that life imprisonment meant no parole.Robinson's case went through several layers of courts. During his appeal, the Pennsylvania Supreme Court affirmed the lower court's decision, arguing that the prosecution did not make an issue of Robinson's future dangerousness and there was no error in the trial court's instruction. The state courts and a federal district court denied him collateral relief.The United States Court of Appeals for the Third Circuit affirmed the lower court's ruling. The court noted that the judge's final instruction to the jury made it clear that Robinson, if sentenced to life imprisonment, would not be eligible for parole. The court concluded that even if the judge's initial speculation about parole had been problematic, his subsequent correction absolved any error. The court also concluded that the prosecution had indeed raised the issue of Robinson's future dangerousness, contrary to the state court's ruling. Thus, the court upheld the denial of habeas corpus. View "Robinson v. Secretary, Pennsylvania Department Of Corrections" on Justia Law