Articles Posted in Civil Procedure

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Former Howmedica Sales Representatives, all California natives, signed employment agreements with confidentiality, non-compete, and forum-selection clauses, designating New Jersey (or Michigan) as the forum for any litigation arising out of the agreements. After clashes with Howmedica, the Sales Representatives resigned and became independent contractors representing Howmedica’s competitor, DePuy. Some of Howmedica’s customers, previously assigned to the Sales Representatives, followed them. Howmedica suspected that the Sales Representatives and DePuy conspired to convert those customers before the Sales Representatives’ resignations. Howmedica filed suit in New Jersey, joining DePuy’s regional distributor, Golden State as a “necessary party.” The defendants successfully moved to transfer the case to California under 28 U.S.C. 1404(a), which, for “the convenience of parties and witnesses” and “in the interest of justice,” allows transfer to a district where the case “might have been brought.” The Third Circuit directed the district court to transfer claims against only the two corporate defendants who did not agree to any forum-selection clause. Where contracting parties have specified the forum in which they will litigate disputes arising from their contract, federal courts must honor the forum-selection clause “[i]n all but the most unusual cases.” In this case, all defendants sought transfer to one district; some, but not all, defendants are parties to forum-selection clauses. View "In re: Howmedica Osteonics Corp" on Justia Law

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The district court denied a motion to proceed in forma pauperis (IFP) filed by Millhouse, a Lewisburg prisoner. The court identified five strikes under the Prison Litigation Reform Act (PLRA), 28 U.S.C. 1915(g), and found that Millhouse failed to establish that he was under imminent danger of serious physical injury. The statute limits IFP status: In no event shall a prisoner bring a civil action or appeal a judgment in a civil action or proceeding under this section if the prisoner has, on 3 or more prior occasions, while incarcerated or detained in any facility, brought an action or appeal in a court of the United States that was dismissed on the grounds that it is frivolous, malicious, or fails to state a claim upon which relief may be granted, unless the prisoner is under imminent danger. The Third Circuit vacated. For purposes of this appeal, Millhouse has only one strike. The court must look to the date the notice of appeal is filed, not the date on which the court rules, in assessing whether a particular dismissal counts as a strike and a dismissal without prejudice for failure to state a claim does not rise to the level of a strike. View "Millhouse v. Heath" on Justia Law

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Long Branch Police Lieutenant Johnson filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC), alleging racial discrimination, under Title VII of the Civil Rights Act, 42 U.S.C. 2000e, by subjecting him “to different and harsher disciplinary measures than similarly situated white colleagues who committed the same or similar . . . infractions.” The EEOC served Long Branch with a notice to charge and requested “all disciplinary records” for Johnson and six Caucasian comparator officers. Long Branch responded that it would not produce the materials unless the EEOC executed a confidentiality agreement. The EEOC refused to execute the agreement and served a subpoena on Long Branch. The city responded with a “Notice of Motion to Quash Subpoena,” captioned for the Superior Court of New Jersey. A person or entity intending not to comply with an EEOC subpoena must submit a petition to modify or revoke the subpoena to the EEOC’s Director or General Counsel within five days after service, 29 C.F.R. 1601.16(b)(1). Long Branch never did so. The EEOC sought enforcement of its subpoena in federal court. The Third Circuit vacated an order enforcing the subpoena in part without reaching claims concerning exhaustion of administrative remedies and disclosure to the charging party of other employees’ records. The court noted a significant procedural defect pertaining to the treatment of the motion to enforce under the Federal Magistrates Act. View "Equal Employment Opportunity Commission v. City of Long Branch" on Justia Law

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Seneca, an oil and natural gas exploration and production company, sought to convert a natural gas well in Highland Township into a Class II underground injection control well in which to store waste from fracking. Highland Township, in Elk County, Pennsylvania, enacted an ordinance that, among other things, prohibited “disposal injection wells” from existing within Highland. In Seneca’s lawsuit, challenging the ordinance, the Community Environmental Legal Defense Fund sought to intervene on the side of the Township to represent the interests of underlying environmental groups (appellants). The district court denied its motion to intervene, holding that the Township adequately represented underlying interests in defending the ordinance. While a motion for reconsideration was pending, the Township repealed the ordinance and entered into a settlement with Seneca that culminated in a consent decree adopted by the district court. The Third Circuit affirmed, finding that original motion to intervene was moot because there is no longer an ordinance to defend. The Consent Decree does not bind any of the appellants nor does it deprive them of any rights after the ordinance has been repealed. Because the appellants are nonparties, they cannot appeal the Consent Decree. View "Seneca Resources Corp v. Township of Highland" on Justia Law

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In 2014, father had partial custody of S.H.; S.H. accused mother of abuse and fled from her home to father. Father sought a temporary order of full custody. A Pennsylvania judge granted mother emergency custody. S.H. was referred to Centre County’s Children and Youth Services (CYS) because of the abuse allegations. CYS concluded that the allegation did not meet the definition of child abuse but continued its investigation, giving S.H. the option of moving into a group home or remaining with his mother. S.H. did not want to stay with her. Mother arranged for S.H. to stay in Youth Haven and objected to any contact with father, claiming that she had sole custody. CYS and Youth Haven allowed contact. After a visit, father complained about Youth Haven, which told CYS that S.H. could not stay due to problems with father. CYS informed father that he could no longer contact S.H. at Youth Haven. Hamilton filed a federal suit, seeking declaratory and injunctive relief, alleging that conspiracy to deprive him of his constitutional rights by “placing S.H. in a shelter tantamount to confinement” and “arbitrarily and capriciously terminating all paternal visits and contact.” While that case progressed, S.H. left Youth Haven. A new Pennsylvania judge vacated the prior emergency custody order, granted father physical custody of S.H., and prohibited contact between S.H. and mother. The Third Circuit affirmed dismissal, finding that the case was mooted when father obtained custody. View "Hamilton v. Bromley" on Justia Law

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Defendants created a publicly searchable “Inmate Lookup Tool” into which they uploaded information about thousands of people who had been held or incarcerated at the Bucks County Correctional Facility since 1938. Taha filed suit, alleging that the County and Correctional Facility had publicly disseminated information on the internet in violation of the Pennsylvania Criminal History Record Information Act, 18 Pa. Cons. Stat. 9102, about his expunged 1998 arrest and incarceration. The district court granted Taha partial summary judgment on liability before certifying a punitive damages class of individuals about whom incarceration information had been disseminated online. The court then found that the only remaining question of fact was whether defendants had acted willfully in disseminating the information. After the court certified the class, the defendants filed an interlocutory appeal. The Third Circuit affirmed the class certification order, rejecting an argument that the district court erred in granting Taha partial summary judgment on liability before ruling on class certification. The court upheld conclusions that punitive damages can be imposed in a case in which the plaintiff does not recover compensatory damages, that punitive damages can be imposed on government agencies, and that the predominance requirement under FRCP 23(b)(3) was met so that a class could be certified. View "Taha v. County of Bucks" on Justia Law

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Genova manufactures vinyl pipes and rain gutters. It operated a plant in Hazleton, Pennsylvania. Former employees of that plant filed a putative class action, seeking medical monitoring for their alleged exposure to toxic substances. Genova ceased operations at its Hazleton facility in 2012, more than two years before the suit was filed. Plaintiffs claimed to have discovered previously unavailable Material Safety and Data Sheets (MSDSs), revealing that, while working for Genova, they were exposed to carcinogens and other toxic chemicals linked to various diseases or conditions and that Genova violated the Occupational Safety and Health Administration Hazard Communication Standard, 29 C.F.R. 1910.1200, by failing to inform them about the chemicals to which they were exposed and by failing to provide the requisite protective equipment. No members of the putative class have suffered an injury or illness linked to the substances used at Genova’s plant. The Third Circuit affirmed the dismissal of the suit as barred by the two-year limitations period. Reasonable minds would not differ in finding that the plaintiffs did not exercise the reasonable diligence required for the discovery rule to toll the statute of limitations. Information concerning the dangers of the chemicals to which they were exposed was widely available for decades before they filed their complaint. View "Blanyar v. Genova Products Inc" on Justia Law

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The fathers of minor children in New Jersey challenged the state law governing child custody proceedings between New Jersey parents. In a suit against state court judges, under 42 U.S.C. 1983, they argued that the “best interests of the child” standard that New Jersey courts use to determine custody in a dispute between two fit parents is unconstitutional. The fathers alleged that their parental rights were restricted, or that they were permanently or temporarily separated from their children, by order of the New Jersey family courts without adequate notice, the right to counsel, or a plenary hearing, i.e. without an opportunity to present evidence or cross-examine and that although mothers and fathers are, in theory, treated equally in custody disputes under New Jersey law, in practice courts favor mothers. The Third Circuit affirmed dismissal of the suit, after holding that the Rooker-Feldman doctrine did not bar the suit, which was not challenging the state court judgments, but the underlying policy that governed those judgments. The court concluded that the judicial defendants were not proper defendants, having acted in an adjudicatory capacity and not in an enforcement capacity. View "Allen v. DeBello" on Justia Law

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The Virgin Islands Bureau of Internal Revenue (BIR) sent the Hassens a final notice of intent to levy their property to satisfy an outstanding tax debt of $5,778.32 for the 2004 tax year and subsequently issued a levy against the Hassens’ bank account. In June and December 2013, the Hassens submitted letters requesting an installment agreement. The December letter reflects that the Hassens and the BIR engaged in discussions and that the BIR directed the Hassens to submit IRS Form 9465 to request an installment agreement. The Hassens failed to do so. Thereafter, the BIR issued four additional levies against the Hassens’ accounts. Rather than file an administrative claim as required by 26 U.S.C. 7433(d), the Hassens filed suit under section 7433(a), alleging that the additional levies violated 26 U.S.C. 6331(k)(2), which prohibits the issuance of any levy while a proposed installment agreement is pending. The district court determined that exhaustion of administrative remedies was not a jurisdictional prerequisite, but was a condition to obtain relief, and dismissed their complaint. The Third Circuit affirmed. To bring a claim under section 7433(a), a taxpayer must exhaust the administrative remedies under section 7433(d). While such exhaustion is not a jurisdictional requirement, it is mandatory. View "Hassen v. Government of the Virgin Islands" on Justia Law

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Norman and Elkin were the only shareholders of USM, a company that acquired and sold rights to radio frequencies. Norman held a minority interest and sought legal relief after he discovered that Elkin had transferred to another company the ownership of several frequencies purchased by USM, that Elkin had treated capital contributions as loans, and that Elkin had paid himself from USM funds without giving Norman any return on his minority investment. Despite two juries agreeing with Norman, verdicts in his favor were overturned. Most of his claims were held to be time-barred after the district court rejected his argument that a state court case he had brought to inspect USM’s books and records under the Delaware Code tolled the statute of limitations. Other claims were eliminated for insufficient evidence. The Third Circuit vacated in part. The district court erred in concluding that tolling of the statute of limitations is categorically inappropriate when a plaintiff has inquiry notice before initiating a books and records action in the Delaware courts and erred in vacating the jury’s award of nominal damages for one of Norman’s breach of contract claims. Norman’s fraud claim was not supported by sufficient proof of damages. View "Norman v. Elkin" on Justia Law