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

Wolff received a settlement from the other driver, following a car accident. Aetna sought to collect some of the settlement funds to recoup the disability benefits it had paid to Wolff under her employer's disability plan. In a putative class action, Wolff alleged that Aetna had no right to recoupment and that Aetna’s disability plans utilized standard form language without meaningful variation both within and between employers. Wolff sought to certify a nationwide class composed of all employees who had enrolled in an Aetna standard form disability plan, who were allegedly coerced into repaying a portion of their disability payments from injury recoveries. Aetna argued that the language varied from plan to plan, so Wolff could not demonstrate the cohesiveness required for class certification. Federal Rule 23(b)(3) requires that “questions of law or fact common to class members predominate over any questions affecting only individual members.”The district court certified the class. Aetna did not challenge the order within Rule 23(f)’s 14-day period. Three weeks later, Wolff filed a proposed class notice. Aetna filed objections, including proposed minor modifications to the class definition. After the court revised the definition, Aetna filed a 23(f) petition, which the Third Circuit denied. A modified class certification order triggers a new 23(f) petition period only when the modified order materially alters the original order granting (or denying) class certification. The revision in this case did not effect such a material change. View "Wolff v. Aetna Life Insurance Co" on Justia Law

This consolidated case concerns three appeals from orders entered by magistrate judges in the Western District of Pennsylvania in cases filed under 42 U.S.C. 1983. One case was involuntarily dismissed without prejudice for failure to prosecute; in the others, magistrates entered summary judgment for all defendants.Under 28 U.S.C. 636, precise limits govern a magistrate judge’s jurisdiction absent parties’ consent. A magistrate judge can oversee pretrial discovery even without the consent of the parties, but he cannot grant summary judgment or involuntarily dismiss a case; those limits dissolve if the parties voluntarily consent to a magistrate judge’s final judgment jurisdiction.The Third Circuit dismissed one appeal for lack of jurisdiction because all parties did not consent and, therefore, the magistrate judge lacked the power to involuntarily dismiss the case. However, the magistrate judges were empowered to enter summary judgment in the other cases because all parties either expressly or impliedly consented. The court then affirmed summary judgment based on the plaintiffs’ failure to exhaust administrative remedies. View "Prater v. Pennsylvania Department of Corrections" on Justia Law

For many years, Zurn, a manufacturer of plumbing products and accessories, has faced multiple lawsuits in which claimants allege bodily injury or wrongful death caused by asbestos in its products. To cover litigation costs, Zurn used various insurance policies issued by various insurance companies. Eventually, Zurn was told by its primary and umbrella insurers that Zurn had exhausted the limits of liability under those policies. When Zurn’s excess policy insurers refused to pay, Zurn sought a declaratory judgment that it had exhausted the limits of liability under its primary and umbrella policies and that Zurn’s excess policy insurers had a duty to defend and pay defense costs in the underlying asbestos suits. After discovery, the district court interpreted the meaning of various primary, umbrella, and excess policies, and determined the scope of some duties insurers have under them.One excess policy insurer—American Home—appealed several partial summary judgment orders. The Third Circuit dismissed the appeal for lack of jurisdiction. American Home does not challenge orders that are functionally equivalent to an injunction, No part of the declaration-granting orders compels American Home “to undertake the defense” of Zurn. View "Zurn Industries Inc v. Allstate Insurance Co" on Justia Law

Gillette, a serial sex offender, received a 27-year sentence for sex crimes. After his release, he never registered as a sex offender. On a tip, law enforcement found that Gillette had been living with a 15-year-old boy and had engaged in sexual contact with that child and another child. Gillette was convicted on 20 counts of territorial-law offenses; federal charges were dismissed. The court sentenced Gillette to 155 years’ imprisonment. The Third Circuit affirmed.Gillette filed a habeas petition in the Virgin Islands Superior Court. At Gillette’s request, the Superior Court issued a subpoena duces tecum to the U.S. Attorney’s Office (USAO). As required by Department of Justice regulations, the USAO requested that Gillette submit “a summary of the information” sought “and its relevance to the proceeding.” Gillette instead moved for contempt and sanctions against the USAO for failing to respond to his subpoena. The USAO then removed the proceedings to federal court and successfully moved to quash the subpoena. The Third Circuit dismissed Gillette’s appeal for lack of jurisdiction. The government never waived its sovereign immunity concerning non-monetary actions against it, so the Superior Court lacked jurisdiction over the USAO; the district court derived its jurisdiction over Gillette’s subpoena-enforcement action from 28 U.S.C. 1442(a)(1) and also lacked jurisdiction. View "Gillette v. Golden Grove Adult Correctional Facility" on Justia Law

An Asset Purchase Agreement provided that the sellers could receive variable payments (Earn-Out Consideration) if the post-merger company (IAS) achieved specific benchmarks. Section 2.6(c) specifies that IAS had to provide the sellers with the computation for each period, to become final unless they submitted a “notice of disagreement.” Any disagreement would be settled according to Section 2.3(e),” which refers to resolution by an accounting firm. Section 11.17, however, directs the parties generally to use non-binding mediation, followed by litigation if mediation fails.IAS determined that the company did not meet its targets. The sellers claim that IAS intentionally prevented the company from hitting its targets. Negotiations failed. The sellers sued for breach of contract and tortious interference; later, they filed a notice of disagreement and sought a declaration that the lawsuit was outside the scope of sections 2.3(e) and 2.6(d). IAS sought to compel arbitration under 2.3(e). The district court held that the Agreement contained a valid agreement to arbitrate. An accounting firm subsequently determined that the sellers had no right to Earn-Out Consideration. The district court entered judgment for IAS.The Third Circuit vacated. The Purchase Agreement contains an agreement to submit narrow disputes to an accounting firm for expert determination, not arbitration. Although the statement of IAS’s financial benchmarks becomes final after the expert completes its accounting analysis, the authority to resolve legal questions—like whether IAS violated the duty of good faith— remains with the courts. View "Sapp v. Industrial Action Services LLC" on Justia Law

The Culps each received $8,826.30 to settle a lawsuit and reported their payments as “Other income,” “PRIZES, AWARDS” in their 2015 tax return. In 2017 the IRS proposed to increase their taxes owed for 2015 to reflect a perceived underpayment, giving the Culps 30 days to respond and stating it would send a notice of deficiency if they failed to do so. The Culps did not respond. The IRS mailed a notice of deficiency, informing the Culps of their right to file a petition in the Tax Court within 90 days. In May 2018, the IRS sent the Culps another letter stating they owed only $2,087 in 2015 taxes, penalties, and interest—less than the amount previously assessed. Again they failed to respond. The IRS levied on their property, collecting approximately $1,800 from the Culps’ Social Security payments and 2018 tax refund.The Culps filed a petition in the Tax Court, which dismissed their petition for lack of jurisdiction, reasoning its “jurisdiction depends upon the issuance of a valid notice of deficiency and the timely filing of a petition,” 26 U.S.C. 6212, 6213, 6214. It found the petition untimely because the Culps did not file it within 90 days of the date the IRS sent the second notice of deficiency. The Third Circuit reversed. Congress did not clearly state that section 6213(a)’s deadline is jurisdictional; non-jurisdictional time limits are presumptively subject to equitable tolling. That presumption was not rebutted. View "Culp v. Commissioner of Internal Revenue" on Justia Law

Each of the four plaintiffs filed a putative class action complaint in state court, alleging violations of the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301, claiming that the defendants either concealed written warranties prior to sale or provided warranties that prohibit the use of third-party repair services or parts in violation of MMWA. The defendants removed the actions to the U.S. District Court for the Western District of Pennsylvania pursuant to the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(2).The plaintiffs moved to remand to state court. The district court held that remand was appropriate because MMWA’s jurisdictional requirements were not satisfied and neither CAFA nor traditional diversity jurisdiction can be used to circumvent those jurisdictional requirements. The Third Circuit affirmed.MMWA claims can only be brought in federal court if section 2310(d)(3)’s requirements are satisfied, including that a class action name at least 100 plaintiffs; here, each complaint names only one plaintiff. MMWA’s stringent jurisdictional requirements are irreconcilable with CAFA. Allowing CAFA to govern MMWA class claims would undercut the MMWA’s requirement and allow an MMWA class action to proceed in contravention of the MMWA. View "Rowland v. Bissell Homecare, Inc." on Justia Law

Mahindra, incorporated in New Jersey, is wholly owned by a major Indian corporation. Mahindra has over 5,000 employees in the U.S. About 90% are South Asians although that group comprises 1–2% of the U.S. population and around 12% of the relevant labor market. Mahindra annually obtains thousands of H-1B visas, which permit hiring foreign workers for specialty occupations. Hindi is often spoken at Mahinda's regional conferences. In 2014, Mahindra hired Williams, a Caucasian American, as one of two non-South Asians in his sales group. He reported to a South Asian supervisor. In 2015, Mahindra terminated his employment.Williams was a member of the 2018 "Grant" putative race discrimination class action. In 2020, the North Dakota district court granted Mahindra’s motion to compel individual arbitration and stayed the case. Williams filed his putative class action in 2020, in the District of New Jersey, alleging disparate treatment on the basis of race. Williams did not deny that the longest applicable statute of limitations, four years, had expired but argued for tolling. The court dismissed Williams’s complaint without prejudice, finding that Williams had standing and was likely a member of the Grant putative class, and rejecting “American Pipe” tolling, under which the filing of a putative class action suspends the limitations period for absent class members’ individual claims. Williams’s complaint did not plausibly allege but-for causation on an individual basis. The Third Circuit vacated the dismissal for consideration of “wrong-forum tolling,” and whether Williams plausibly pleaded a pattern-or-practice claim. View "Williams v. Tech Mahindra (Americas) Inc." on Justia Law

Appellant, a fired employee, sued his former employer, alleging a pattern or practice of race discrimination against non-South Asians in violation of 42 U.S.C. Section 1981. The employee had previously attempted to join another class action against the company, but after that case was stayed, he filed this suit – years after his termination. The employer moved to dismiss the complaint under Rule 12(b)(6) as untimely. In response, the employee conceded that the relevant statutes of limitations had expired, and instead, he resorted to two forms of tolling: wrong-forum and American Pipe. The district court concluded that American Pipe tolling did not allow the employee to commence a successive class action, and the employee does not contest that ruling. But the district court dismissed the complaint without considering the applicability of wrong-forum tolling.   The Third Circuit vacated the district court’s order and remanded the case for the district court to consider whether wrong-forum tolling applies and/or whether Appellant has plausibly pleaded a prima facie pattern-or-practice claim. The court explained a class plaintiff’s burden in making out a prima facie case of discrimination is different from that of an individual plaintiff “in that the former need not initially show discrimination against any particular present or prospective employee,” including himself. As a result, Appellant was not required to plead but for causation on an individual basis to avoid dismissal, given the availability of the pattern-or-practice method of proof at later stages of the case. View "Lee Williams v. Tech Mahindra Americas Inc" on Justia Law

Student H.P.-B. resides with her adult cousin Q.T. within the geographical boundaries of Pottsgrove. H.P.-B. enrolled in Pottsgrove during the 2014–2015 school year. Q.T. does not have legal custody of H.P.-B—an August 2008 order grants primary physical and legal custody to H.P.-B.’s grandmother, E.E. Q.T. filed an IDEA due process complaint on H.P.-B’s behalf. The district court held that a straightforward application of C.F.R. 34 Section 300.30 (b)(2) “dictates that Q.T. does not qualify as H.P.-B.’s ‘parent’ for purposes of the IDEA.” Q.T., E.E., and F.P. appealed the district court’s order. Appellants argued that the district court erred by holding that Q.T. does not qualify as H.P.-B.’s parent for purposes of the IDEA and, thus that Q.T. is unable to file a due process complaint on H.P.-B.’s behalf.   The Third Circuit reversed and remanded. The court explained the district court erred in finding that Q.T. did not qualify as H.P.-B.’s parent and thus lacked standing to file a due process complaint on H.P.-B.’s behalf. The court reversed the district court’s decision and remanded with instructions to vacate the hearing officer’s order dismissing Q.T.’s due process complaint. The court explained there is ample evidence in the record that Q.T. was acting in the place of H.P.-B.’s natural parent, satisfying the third definition of “parent.” The record shows Q.T. affirmed that she was supporting H.P.- B. assumed all personal obligations related to school requirements for H.P.-B. and intended to keep and support H.P.-B. continuously, and not merely through the school year. View "Q. T. v. Pottsgrove School District" on Justia Law