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

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

Panico, a New Jersey resident, incurred substantial debt on an MBNA credit card, which qualifie as “debt” under the Fair Debt Collection Practices Act, 15 U.S.C. 1692a(5). MBNA assigned the rights to the debt to PRA, a debt collector. PRA’s collection efforts failed. In 2014, more than three but fewer than six years after the cause of action accrued, PRA sued. New Jersey’s statute of limitations barred collection ofsuch debts after six years; Delaware’s statute proscribed collection of such debts after three years. The credit agreement provided for application of “the laws of ... Delaware, without regard to its conflict of laws principles, and by any applicable federal laws.” PRA agreed to a stipulated dismissal. In 2015, Panico filed a putative class action under the FDCPA, arguing that PRA had sought to collect on a time-barred debt. The district court granted PRA summary judgment, finding that a Delaware tolling statute prevented the Delaware statute of limitations from running as to a party residing outside that state during the credit relationship, default, collections attempts, and ensuing litigation. The Third Circuit reversed. Delaware’s tolling statute has been interpreted as abrogating its statute of limitations only as to defendants not otherwise subject to service of process; it was not intended to export the state’s tolling statute into out-of-state forums and to substantially limit the application of the Delaware statute of limitations. View "Panico v. Portfolio Recovery Associates, LLC" on Justia Law

In 2014, Super Bowl XLVIII was held at New Jersey's MetLife Stadium. Finkelman alleges that the NFL has a policy of withholding 99% of Super Bowl tickets from the general public; 75% of the withheld tickets are split among NFL teams and 25% of tickets are for companies, broadcast networks, media sponsors, the host committee, and other “league insiders.” The 1% of tickets for public purchase are sold through a lottery system. A person has to enter by the deadline, be selected as a winner, and choose to actually purchase a ticket. Finkelman purchased tickets on the secondary market for $2,000 per ticket, although these tickets had a face value of $800 each. He did not enter the lottery to seek tickets offered at face value but filed a putative class action under New Jersey’s Ticket Law, N.J. Stat. 56:8-35.1: It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets’ release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating. The Third Circuit concluded that Finkelman had standing based on the plausible economic facts he pleaded, but deferred action on the merits pending decision by the Supreme Court of New Jersey on a pending petition for certification of questions of state law. View "Finkelman v. National Football League" on Justia Law

Wellman, a Butler Area high school, freshman suffered head injuries while playing flag football in a physical education class, during football practice, and during a game. Despite a concussion diagnosis and requests from Wellman’s mother and doctor, the school refused to provide any accommodation. A CT scan revealed post-concussive syndrome. The school was unresponsive. Wellman received homebound instruction through his sophomore year. The school denied Wellman an Individualized Education Plan (IEP). For junior year, he enrolled in private school, from which he graduated. Wellman filed a due process complaint with the Pennsylvania Department of Education. In a settlement, Wellman released the District from all claims which could have been pursued under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400; the Americans with Disabilities Act (ADA); or any other statute. Wellman then filed suit under the Rehabilitation Act, 29 U.S.C. 794, the ADA, 42 U.S.C. 12132, and 42 U.S.C. 1983, alleging equal protection violations. The Third Circuit remanded for dismissal with prejudice, citing the Supreme Court’s 2017 "Fry" opinion, which requires that courts consider the “gravamen” of the complaint to determine whether a plaintiff seeks relief for denial of the IDEA’s core guarantee of a free and appropriate education (FAPE); if so, then the plaintiff must exhaust his IDEA administrative remedies. Wellman released all claims based on the denial of a FAPE and has no claims to exhaust. View "Wellman v. Butler Area School District" on Justia Law

The Delaware Companies challenged Delaware’s right to audit whether funds paid for stored-value gift cards issued by their Ohio-based subsidiaries are held by the Companies and subject to escheatment. Their argument relied on Supreme Court precedent establishing priority among states competing to escheat abandoned property, giving first place to the state where the property owner was last known to reside. If that residence cannot be identified or if that state has disclaimed its interest, second in line is the state where the holder of the abandoned property is incorporated; any other state is preempted from escheating the property. The Companies argued that money left unclaimed by owners of the stored-value cards is held by the Ohio Subsidiaries, so Delaware can have no legitimate escheatment claim and must be barred from auditing the Companies in connection with the gift cards. The Third Circuit held that private parties can invoke federal common law to challenge a state’s authority to escheat property but agreed that dismissal was proper. “The notion that the State cannot conduct any inquiry into abandoned property to verify a Delaware corporation’s representations regarding abandoned property lacks merit” and, to the extent the Companies challenged the scope or means of the audit, the claim is not ripe, since Delaware has taken no formal steps to compel an audit. View "Marathon Petroleum Corp v. Secretary of Finance for the State of Delaware" on Justia Law

Pursuit, managed by its founders, Schepis and Canelas, created and was the general partner in two funds to “acquire securities for trading and investment appreciation.” They invested in offshore entities formed in the Cayman Islands. Pursuit voluntarily petitioned for Chapter 7 bankruptcy in 2014, after it became liable for legal judgments of $5 million. Pursuit listed no assets but indicated that it had a “[p]otential indemnification claim” against one of the funds it managed and claims connected to other cases. Financial statements revealed that Pursuit’s 2011 gross income, $645,571.22 from one fund, was transferred to Pursuit’s members in 2013. Creditors Group claimed Schepis and Canelas enriched themselves at the expense of creditors and sought avoidance, 11 U.S.C. 544, 547, 548. The Trustee obtained court approval of an agreement to “settle, transfer and assign” the avoidance claim and other potential claims. The Pursuit Parties objected, seeking to purchase the claims themselves. The Trustee sold the claims to Creditors Group for $180,001. The Bankruptcy Court approved the sale. The Pursuit Parties did not seek a stay. Creditors Group sued on the claims in the Bankruptcy Court. The Third Circuit affirmed the district court’s dismissal of an appeal as moot under 11 U.S.C. 363(m), because the Pursuit Parties the requested remedy, if entered, would affect the validity of the sale. View "In re: Pursuit Capital Management" on Justia Law

Collins, who worked as a Mary Kay beauty consultant in New Jersey, brought a putative class action, claiming that Mary Kay policies and practices violated the New Jersey Wage Payment Law. Mary Kay, a Texas-based company, moved to dismiss on forum non conveniens grounds, relying on written agreements that set forth the parties’ relationship. Both contained forum selection clauses specifying that legal claims would be submitted to Texas state court and contained choice-of-law clauses stating that Texas law would apply. The district court granted Mary Kay’s motion. The Third Circuit affirmed. Although Collins argued that her claims fell outside the scope of the forum-selection clause, Texas contract law applies to govern the interpretation of that clause. The parties have a substantial relationship to the state of Texas and there is no evidence New Jersey has a “materially greater interest” in the application of its own contract law to the interpretation of the forum selection clauses, or that application of Texas contract law to interpret the scope of the forum selection clauses would offend the “fundamental policy” of New Jersey. View "Collins v. Mary Kay Inc" on Justia Law

Rubi, a U.S. citizen, is the Director of 7R Holdings LLC, which has its principal place of business in Puerto Rico. Holdings holds 7R Charters, which owned M/Y Olga, a yacht registered in the British Virgin Islands (BVI). Calot captains Olga. Using email and the telephone, Calot, while in Puerto Rico, hired Trotter, while in Florida, to work as a chef on Olga. Trotter boarded Olga in St. Thomas, U.S. Virgin Islands. Days later, Olga traveled to Scrub Island, BVI, and let down its anchor. Trotter allegedly sustained an injury while descending stairs to the dock, was treated for her alleged injuries at a BVI hospital, and returned to Florida. Trotter sued Rubi, Holdings, and Olga in the District Court of the Virgin Islands under the Jones Act, 46 U.S.C. 30104, and general maritime laws. The court dismissed, citing forum non conveniens. The Third Circuit affirmed, applying the general presumption that the possibility of a change in substantive law should ordinarily not be given substantial weight in the forum non-conveniens inquiry, because the remedy provided by the alternative forum is not clearly inadequate and because the Jones Act does not contain a special venue provision. The court did not abuse its discretion in exercising its forum non-conveniens power after reasonably balancing the relevant private and public interest factors. View "Trotter v. 7R Holdings LLC" on Justia Law

Despite repeatedly asserting his innocence, Satterfield was convicted of first-degree murder in 1985 and sentenced to life in prison. After years of direct and collateral litigation, the district court, acting on his habeas petition, found that his ineffective assistance of counsel claim meritorious. The Third Circuit reversed, finding his petition barred by Antiterrorism and Effective Death Penalty Act’s (AEDPA’s) one-year statute of limitations, 28 U.S.C. 2244(d)(1). Years later, the Supreme Court decided, in McQuiggin v. Perkin, that a petitioner who can make a credible showing of actual innocence can overcome that limitations period. Satterfield sought relief from the judgment denying his habeas petition, characterizing McQuiggin’s change in law as an extraordinary circumstance to justify relief under FRCP 60(b)(6). The district court denied Satterfield’s motion. The Third Circuit vacated, holding that changes in decisional law may, under certain circumstances, justify Rule 60(b)(6) relief. “A district court addressing a Rule 60(b)(6) motion premised on a change in decisional law must examine the full panoply of equitable circumstances in the particular case.” In this case, the court did not articulate the requisite equitable analysis. If Satterfield can make the required credible showing of actual innocence, an equitable analysis would weigh heavily in favor of deeming McQuiggin’s change in law, as applied to Satterfield’s case, an exceptional circumstance justifying Rule 60(b)(6) relief. View "Satterfield v. District Attorney Philadelphia" on Justia Law

Christopher Columbus owns and operates the passenger vessel “Ben Franklin Yacht,” which provides cruise services on the Delaware River from Philadelphia. Bocchino was a patron on a Ben Franklin cruise on May 3, 2013, when, in a “drunken brawl,” he was apparently “assaulted on the vessel and/or in the parking lot near the dock” by “unknown patrons of the cruise and/or agents, servant[s], workmen and/or employees’” of Christopher Columbus. Bocchino filed a state court suit, alleging negligence. Christopher Columbus then filed its Complaint for Exoneration From or Limitation of Liability in federal court. The district determined that the test for maritime jurisdiction had not been met and dismissed the limitation action for lack of subject-matter jurisdiction. The Third Circuit vacated. The federal courts have the power to hear “all Cases of admiralty and maritime Jurisdiction,” U.S. Const. art. III, sect. 2, cl. 1; 28 U.S.C. 1333(1). The location aspect of the jurisdictional test is satisfied because the alleged tort occurred on the Delaware River and carrying passengers for hire on a vessel on navigable waters is substantially related to traditional maritime activity. Such an incident has the potential to disrupt maritime commerce. View "Christopher Columbus LLC v. Bocchino" on Justia Law