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

Delaware and Hoboken, New Jersey each sued the oil companies in state court for state-law torts. By “produc[ing], marketing, and s[e]l[ling] fossil fuels,” they claimed, the oil companies worsened climate change. They sought damages for the environmental harm they had suffered and injunctions to stop future harm. The oil companies removed the cases to federal district courts. The suits’ broad focus on “global climate change,” the companies reasoned, “demand[ed] resolution by a federal court under federal law.”. They argued the tort claims arose under federal law, either because they were inherently federal, not state claims, or they raised substantive federal issues; the suits related to producing oil on the Outer Continental Shelf; and the oil companies were acting under federal officers.The Third Circuit affirmed the remands of the cases to state courts, noting that four other circuits have refused to allow the oil companies to remove similar state tort suits to federal court. These lawsuits neither are inherently federal nor raise substantial federal issues that belong in federal court. Oil production on the Outer Continental Shelf is too many steps removed from the burning of fuels that causes climate change. Delaware and Hoboken are not suing over actions that the companies were directed to take by federal officers. View "City of Hoboken v. Chevron Corp" on Justia Law

R&C, run by two employees, entered an agreement to haul equipment for American Wind. The agreement’s arbitration clause provides: any claim, dispute or controversy including, but not limited to the interpretation of any federal statutory or regulatory provisions purported to be encompassed by this Agreement; or the enforcement of any statutory rights emanating or relating to this Agreement shall be resolved on an individual basis (and not as part of a class action) exclusively between Contractor and Carrier by final and binding arbitration.R&C alleges that American Wind failed to make agreed-upon detention payments, resulting in a cash shortfall, forcing R&C to sell its trucks. R&C continued to haul equipment for American Wind but on behalf of the trucks’ new owner. R&C filed suit, alleging breach of contract and contending that the arbitration clause was unenforceable because R&C is a transportation worker operating under a contract of employment, exempt from the Federal Arbitration Act (FAA). R&C also argued that the arbitration provision was unconscionable. After R&C refused to arbitrate, the case was dismissed for failure to prosecute. The Third Circuit affirmed, noting that R&C had not sought interlocutory review of the order compelling arbitration, as permitted by the FAA. The interlocutory order was not part of the final order, so the court concluded it lacked jurisdiction to review it. View "R & C Oilfield Services LLC v. American Wind Transport Group, LLC" on Justia Law

Fischer, a Pennsylvania resident and former FedEx security specialist, brought a collective action under the Fair Labor Standards Act (FLSA) in the Eastern District of Pennsylvania. Fischer alleged FedEx misclassified her and other security specialists as exempt from the FLSA’s overtime rule and underpaid them. Two former FedEx employees, Saunders, from Maryland, and Rakowsky, from New York, submitted notices of consent, seeking to join Fischer’s collective action. Saunders and Rakowsky both worked for FedEx in their home states but, other than FedEx’s allegedly uniform nationwide employment practices, have no connection to Pennsylvania related to their claims. The district court did not allow these opt-in plaintiffs to join the suit, reasoning that, as would be true for a state court, the district court lacked specific personal jurisdiction over FedEx with respect to their’ claims.On interlocutory appeal, the Third Circuit noted a division among the circuits and held that in an FLSA collective action in federal court where the court lacks general personal jurisdiction over the defendant, all opt-in plaintiffs must establish specific personal jurisdiction over the defendant with respect to their individual claims. In this way, the specific personal jurisdiction analysis for an FLSA collective action in federal court operates the same as it would for an FLSA collective action, or any other traditional in personam suit, in state court. The out-of-state opt-in plaintiffs here cannot demonstrate their claims arise out of or relate to FedEx’s contacts with Pennsylvania. View "Fischer v. Federal Express Corp" on Justia Law

Attorney Avenatti rose to public prominence in 2018 by representing “Stormy Daniels,” with whom then-President Trump had allegedly had an extra-marital affair. His subsequent arrest received extensive media coverage, including by Fox News and its individual employees. Avenatti sued Fox and several individuals in Delaware Superior Court. His initial complain described allegedly defamatory statements made by Hunt but did not name Hunt as a Defendant.Days later, Fox removed the case to federal court claiming complete diversity. Avenatti filed an amended complaint in the district court. Because the amended complaint was entered within 21 days, Avenatti did not require leave of court or the opposing parties, Fed. R. Civ. P. 15(a)(1)(A). The amended complaint named Hunt—a California resident, as was Avenatti—as a Defendant and alleged that Hunt had published an article online about Avenatti’s arrest which included the same defamatory accusations previously attributed to the other Defendants. Avenatti moved to remand the case back to state court, citing Hunt’s shared California citizenship as destroying diversity.The Third Circuit affirmed the district court’s denial of the remand motion, citing the court’s discretionary authority under Rule 21 to drop Hunt from the litigation to restore complete diversity. The court employed “an open-ended balancing test" for considering post-removal amendments that add nondiverse parties and found that Hunt had been joined to defeat diversity and Avenatti would not be prejudiced by Hunt’s excision. View "Avenatti v. Fox News Network LLC" on Justia Law

Adam saw advertisements for free samples of beauty products, which implied that she need only pay for shipping and handling. Adam ordered two free samples and purchased another item. She was charged $9.94 for shipping and $14.99 for the purchased item. Soon thereafter, Adam was unexpectedly charged $92.94, which resulted in an overdraft of her checking account. A company representative told Adam that “she had agreed" to pay the full amount if she kept the "free samples" and that Adam would need to return the items before refunds could be issued. Adam, not trusting the company, refused to return the items, then called her bank, which temporarily reversed the charge but ultimately reinstated it. Adam contends that her bank was misled by the “false-front scheme” and that the charge would have been reversed but for the defendants’ misrepresentations.Adam filed a putative class-action suit, alleging violations of (or conspiracy to violate or aiding and abetting violation of): multiple California laws; the Electronic Fund Transfer Act, 15 U.S.C. 1693–1693r; the RICO Act, 18 U.S.C. 1961–1968; and consumer laws. The Third Circuit reversed the dismissal of the suit. Adam has standing; she was not made whole by the refund offer; she has neither received a refund nor accepted any alternative. Defendants’ conduct could provide but-for causation for Adam’s financial harm and a restitution order would redress that harm. View "Adam v. Barone" on Justia Law

Plaintiffs purchased notary services at New Jersey UPS stores and, in class action complaints, alleged they were charged an amount that exceeded the $2.50 fee permitted by New Jersey law. Neither complaint alleged that the amount in controversy exceeded $5 million. During discovery, while an appeal from the denial of a motion to dismiss was pending, UPS produced a spreadsheet showing that the New Jersey UPS stores had more than one million notary transactions during the six-year class period, which established an amount in controversy that satisfied federal jurisdiction under the Class Action Fairness Act (CAFA). UPS removed both complaints to federal court. The district court remanded, reasoning that UPS could have performed the required calculation when the spreadsheet was produced in December 2020, so the removal petitions filed months later were untimely. The court did not consider whether CAFA’s local controversy exception required remand.The Third Circuit vacated. The removal statute requires removal within 30 days of service of a pleading that demonstrates the existence of federal jurisdiction or within 30 days of the date on which a defendant receives an amended pleading, motion, order, or other paper that discloses federal jurisdiction. Here, the initial pleadings did not demonstrate the existence of federal jurisdiction. UPS never received any paper that disclosed jurisdiction, so removal was timely. The court remanded for consideration of the local controversy exception. View "McLaren v. The UPS Store Inc" on Justia Law

The parents of M.W., a minor eligible for services under the Individuals with Disabilities Education Act (IDEA), filed a Petition for Due Process against the Board of Education. Before a scheduled hearing, the ALJ met with counsel, M.W.’s parent, and a Board representative. The terms of a purported settlement were read into the record. In a “Decision Approving Settlement,” the ALJ made specific findings and ordered, “that the parties comply with the settlement terms.” The parents later contacted the Board, repudiating the agreement, and moved the ALJ to “set aside the settlement.” They filed suit, seeking relief under the IDEA.The district court questioned whether the ALJ’s bare findings that the settlement was entered into voluntarily and resolved all disputes satisfied the IDEA's jurisdictional requirements, concluded that it lacked jurisdiction, citing IDEA provisions for the enforceability of settlement agreements (20 U.S.C. 1415(e), 1415(f)(1)(B)), and held that the ALJ’s decision was not based on “substantive grounds,” under 1415(f). The Third Circuit reversed. The entry of a “Decision Approving Settlement” in an IDEA dispute satisfies section 1415(I)'s jurisdictional prerequisite to an appeal of an administrative IDEA determination. If a prevailing party may enforce a settlement agreement embodied in an administrative consent order as an “aggrieved party” under 1415(i)(2), then a party seeking to challenge such an order as improperly entered must likewise be able to bring a challenge in federal court. View "G W v. Ringwood Board of Education" on Justia Law

The New Jersey Attorney General, investigating Smith & Wesson under the state's Consumer Fraud Act, issued a subpoena seeking documents related to Smith & Wesson’s advertisements. Instead of producing the documents, Smith & Wesson filed suit in federal court under 42 U.S.C. 1983, alleging the subpoena violated the First, Second, Fourth, Fifth, and Fourteenth Amendments. The state trial court subsequently ordered Smith & Wesson to show cause and threatened the company with contempt and a ban on sales in New Jersey; the court rejected the constitutional arguments presented in the federal suit. Smith & Wesson unsuccessfully sought an emergency stay of production. In federal court, Smith & Wesson added claims that the Attorney General’s suit was “retaliation" for the exercise of its First Amendment right to petition a court for redress.The Attorney General moved to dismiss the federal suit, citing “Younger” abstention. The district court dismissed the complaint, stating “the subpoena-enforcement action involves orders in the furtherance of state court judicial function.” Smith & Wesson eventually produced the subpoenaed documents under a protective order. The Third Circuit vacated the dismissal, citing the district court’s “virtually unflagging obligation . . . to exercise the jurisdiction given.” Abstention was not warranted in this case because the document production order was not “uniquely in furtherance of the state courts’ ability to perform their judicial functions.” View "Smith & Wesson Brands Inc v. Attorney General New Jersey" on Justia Law

In 2016, the out-of-state petition circulators challenged Section 2869 of the Pennsylvania Election Code, which requires that any circulator of nomination petitions be “a qualified elector of the Commonwealth, who is duly registered and enrolled as a member of the party designated in said petition.” The district court found that the ban was not facially unconstitutional, but was unconstitutional as applied to the plaintiffs for the 2020 election only. The plaintiffs did not appeal the conclusion that the ban was not facially unconstitutional. The court declined to expand the injunctive relief to cover future elections for the plaintiffs and all similarly situated individuals. The Third Circuit held that permanent injunctive relief for all future elections is appropriate for the plaintiff circulators only, not to all similarly situated individuals, and only if the plaintiffs continue to submit to Pennsylvania’s jurisdiction. The request for permanent relief for the plaintiffs and all similarly situated individuals goes beyond the specific plaintiffs and circumstances of this litigation and seeks facial relief. A factual record specific to each similarly situated individual circulator will be necessary to determine the appropriate relief in future elections. Each individual circulator will need to demonstrate their willingness to submit to Pennsylvania’s jurisdiction for the purpose of nomination circulation. View "Benezet Consulting LLC v. Secretary Commonwealth of Pennsylvania" on Justia Law

The New Jersey Board of Public Utilities (BPU) ordered Altice, a cable service provider, to prorate its bills for the month in which a cable customer cancels his service, as required by New Jersey law. In federal court, Altice argued that the Proration Requirement is preempted by the Cable Communications Policy Act of 1984.The district court granted Altice judgment on the pleadings, concluding that “Younger” abstention was not warranted and that the Proration Requirement was preempted. The Third Circuit vacated. The Younger ruling was incorrect. BPU’s civil enforcement proceeding was quasi-criminal in nature and, thus, the type of proceeding to which Younger applies. BPU commenced the action against Altice by filing a formal complaint, a Show Cause Order with attributes similar to the filing of formal charges, and did so in its sovereign capacity. The proceeding was judicial in nature and ongoing when the federal complaint was filed; the proceeding implicates important state interests; and Altice has an adequate opportunity to raise its federal claims in the state proceeding. View "Altice USA Inc v. New Jersey Board of Public Utilities" on Justia Law