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

Wilmington Trust financed construction projects. Extensions were commonplace. Wilmington’s loan documents reserved its right to “renew or extend (repeatedly and for any length of time) this loan . . . without the consent of or notice to anyone.” Wilmington’s internal policy did not classify all mature loans with unpaid principals as past due if the loans were in the process of renewal and interest payments were current, Following the 2008 "Great Recession," Wilmington excluded some of the loans from those it reported as “past due” to the Securities and Exchange Commission and the Federal Reserve. Wilmington’s executives maintained that, under a reasonable interpretation of the reporting requirements, the exclusion of the loans from the “past due” classification was proper. The district court denied their requests to introduce evidence concerning or instruct the jury about that alternative interpretation. The jury found the reporting constituted “false statements” under 18 U.S.C. 1001 and 15 U.S.C. 78m, and convicted the executives.The Third Circuit reversed in part. To prove falsity beyond a reasonable doubt in this situation, the government must prove either that its interpretation of the reporting requirement is the only objectively reasonable interpretation or that the defendant’s statement was also false under the alternative, objectively reasonable interpretation. The court vacated and remanded the conspiracy and securities fraud convictions, which were charged in the alternative on an independent theory of liability, View "United States v. Harra" on Justia Law

Davis answered a Craigslist.com ad, entitled “Wild child,” posted by Officer Block, who was conducting a sting operation. The ad stated that the poster was an 18-year-old woman. During their correspondence, Block posed as an eighth-grade girl, “Marisa.” They exchanged text messages for eight days. Davis showed repeated reluctance to engage in lewd conversation, expressed fear of getting caught, stated that he was gay, and claimed that he was 19; he was 30. His responses were permeated with innuendo. He addressed Marisa's virginity, plied her with compliments, asked when she was not supervised, repeatedly attempted to get her to meet, and offered her gifts. They agreed to meet and spend the day together at a water park. Marisa expressed concern about getting pregnant. Davis assured her that he would bring “protection.” Davis traveled from New York to Pennsylvania with three condoms in his pocket.Davis was convicted of use of an interstate facility to attempt to knowingly persuade, induce, entice and coerce a minor to engage in sexual activity, 18 U.S.C. 2422(b), and travel in interstate commerce with intent to engage in illicit sexual conduct with a minor, section 2423(b). The Third Circuit affirmed his convictions and 127-month sentence, rejecting claims of insufficient evidence and of entrapment and upholding the application of a sentencing enhancement for Davis’s misrepresentation of his age and of his sexual orientation. View "United States v. Davis" on Justia Law

Under the Controlled Substances Act, a person may not make, distribute, or sell drugs, 21 U.S.C. 841, and may not own or maintain a “drug-involved premises,” for using, sharing, or producing drugs (section 856). Section 856 was added in 1986 in response to the proliferation of crack houses and was extended to reach even temporary drug premises. Safehouse wants to try a new approach to combat the opioid crisis by opening a safe-injection site that would offer drug treatment and counseling, refer people to social services, distribute overdose-reversal kits, and exchange used syringes for clean ones, with a consumption room where users could inject themselves with illegal drugs, including heroin and fentanyl, that the user brings in from outside. The user would not be allowed to share or trade drugs on the premises. Staffers would watch users for signs of overdose and intervene with medical care as needed. Safehouse hopes to prevent diseases, counteract drug overdoses, and encourage drug treatment.The district court held that section 856(a)(2) does not apply to Safehouse’s proposed consumption room, declining to reach Safehouse’s Commerce Clause or Religious Freedom Restoration Act, 42 U.S.C. 2000bb–2000bb-3, defenses. The Third Circuit reversed. Safehouse’s benevolent motive makes no difference; its safe-injection site falls within Congress’s power to ban interstate commerce in drugs. Courts are not arbiters of policy but must apply the laws as written. View "United States v. Safehouse" on Justia Law

In 2012, Rad and others were charged with acquiring penny stocks, “pumping” the prices of those stocks by bombarding investors with misleading spam emails, and then “dumping” their shares at a profit. Rad was convicted of conspiring to commit false header spamming and false domain name spamming under the Controlling the Assault of Non-Solicited Pornography And Marketing Act (CAN-SPAM), 15 U.S.C. 7701(a)(2), which addresses unsolicited commercial email. The PSR recommended raising Rad’s offense level to reflect the losses inflicted on investors, estimating that Rad realized about $2.9 million in “illicit gains” while acknowledging that because “countless victims” purchased stocks, the losses stemming from Rad’s conduct could not “reasonabl[y] be determined.” Rad emphasized the absence of evidence that any person lost anything. Rad was sentenced to 71 months’ imprisonment. The record is silent as to how the court analyzed the victim loss issue. The Third Circuit affirmed. DHS initiated removal proceedings under 8 U.S.C. 1227(a)(2)(A)(iii), which renders an alien removable for any crime that “involves fraud or deceit” “in which the loss to the victim or victims exceeds $10,000.” The IJ and the BIA found Rad removable.The Third Circuit remanded. Rad’s convictions for CAN-SPAM conspiracy necessarily entail deceit under 8 U.S.C. 1101(a)(43)(M)(i). The second element, requiring victim losses over $10,000, however, was not adequately addressed. The court noted that intended losses, not just actual ones, may meet the requirement. View "Rad v. Attorney General United States" on Justia Law

In 2005, Hart was convicted of possessing crack cocaine with intent to distribute. The Sentencing Guidelines recommended 35 years to life imprisonment; because of his extensive criminal record and the amount of crack, his mandatory minimum sentence was life. The 2010 Fair Sentencing Act lowered Hart's mandatory minimum to 10 years. The 2018 First Step Act made those lower minimums retroactive. The Eastern District of Pennsylvania U.S. Attorney’s Office and Federal Defender’s Office formed a committee that identified prisoners who were eligible for lower sentences, calculated new sentences, and submitted them for court approval. The committee incorrectly believed that eligible inmates could be resentenced only within their new Guidelines range, not below it. For Hart, the committee negotiated a 35-year sentence, which Hart accepted. Hart later asked the court to lower his sentence more based on the 18 U.S.C. 3553(a) factors. The court denied Hart’s motion, reasoning that Hart’s Guidelines range depended mainly on his criminal history, not on the amount of crack he had possessed. The court did not consider the 3553(a) factors nor Hart’s personal growth. The court added that Hart had gotten one sentence reduction and could not have another.The Third Circuit remanded. The Act’s section 404(c) bar on second resentencings is not jurisdictional and it is fair to accept the government’s waiver of that bar. When a court rules on a First Step Act resentencing motion, it must consider the applicable section 3553(a) factors. View "United States v. Hart" on Justia Law

On February 24, 2003, Diodati arrived at work, unlocked the store, and entered. Someone behind her “pushed his way inside," and told her to turn off the alarm. Diodati did so. The masked intruder demanded money from the safe. Diodati handed him envelopes containing money; he set down a folder that he had been carrying and a gun. When the robber stood up, he picked up the gun but left the folder, and told her to go to the second safe, which was in her office. Taking about $7,000, the intruder went out the back and into to a running automobile. Detective Godlewski processed for fingerprints on the counter, the door that the robber tore partially off its hinges, and the Manila left by the intruder. Some prints belonged to Travillion, who was found guilty of the robbery and sentenced to a mandatory 10-20 years' imprisonment, consecutive to the separate sentence of life without the possibility of parole that he was serving as a result of a separate 2006 second-degree murder conviction.The Third Circuit granted Travillion habeas relief, finding that the Pennsylvania court’s adjudication of his insufficient evidence claim involved an unreasonable application of clearly established federal law. Evidence that Travillion’s fingerprints were found on the easily movable folder and paper inside the folder and Diodati's description of the robber, which did not match Travillion but did not exclude him is not sufficient evidence for a rational trier of fact to place Travillion at the scene of the crime when the crime was committed beyond a reasonable doubt. View "Travillion v. Superintendent Rockview SCI" on Justia Law

Heatherly and William frequented an internet chat room where users regularly shared child pornography. One chat-room user repeatedly live-streamed himself raping and sexually abusing his six-year-old nephew. Heatherly and Staples encouraged him as he did so and repeatedly asked users for other child-pornography videos. The two were convicted of receiving child pornography and conspiring to receive child pornography, 18 U.S.C. 2251(d). The Sentencing Guidelines recommended 40-70 years’ imprisonment. The court sentenced Heatherly to 25 years and Staples to 30.The Third Circuit affirmed. The district court properly admitted videos shown in the chat room of children being violently sexually abused. After reviewing that evidence for itself, the court properly found that the risk of unfair prejudice did not substantially outweigh its probative value. The evidence was highly probative of the conspiracy and the defendants’ awareness of what they were involved in. The court also rejected challenges to the sufficiency of the evidence, to venue, to the admission of other exhibits, to jury instructions on venue, to the calculation of the Sentencing Guidelines ranges, and to the denial of a motion to sever the defendants’ trials. View "United States v. Heatherly" on Justia Law

The owner told officers that he suspected Nasir used unit C69 for drug activity and provided a photograph of the inside, showing coolers and a box of baggies. The police learned that Nasir had felony drug convictions. They visited unit C69 with a drug detection dog, who positively alerted. Waiting for a search warrant, the officers stopped Nasir. In his SUV, they found a key to unit C69, which contained marijuana, scales, and packaging materials. They obtained a search warrant for Nasir’s home and any vehicles on the property. The officers found $5,000 in cash in the house and several handguns with ammunition in a Dodge parked on the property.Nasir was indicted under the crack house statute; for possession of marijuana with intent to distribute; and as a felon in possession of a firearm. His motion to suppress was denied. Nasir stipulated that before the date when he allegedly possessed the firearm, he had been “convicted of a felony crime punishable by imprisonment for a term exceeding one year." Convicted, Nasir was sentenced as a career offender based on Virginia convictions for attempting to possess cocaine with intent to distribute and for possession of cocaine and marijuana.The Third Circuit affirmed in part, rejecting arguments that there was insufficient evidence to sustain his crack house conviction because the section under which he was convicted does not make it unlawful to store drugs, that the officer who searched the Mercury did not have probable cause, and that a juror was avowedly partial. Career offender enhancement should not have applied; one of his convictions does not qualify as a “controlled substance offense.” The court vacated the firearm conviction; the government did not prove that Nasir knew he was a felon, as required by the Supreme Court’s 2019 Rehaif holding. View "United States v. Nasir" on Justia Law

In 2001, Penn State’s former president, Spanier, and others decided not to report to state authorities suspected sexual abuse of children involving the school’s football program and Jerry Sandusky, the well-known defensive coordinator for Penn State’s football team. In 2007, Pennsylvania amended the statutory definition of child endangerment and its statute of limitations. In 2012, Spanier was charged. The jury was instructed in language that tracked the post-amendment statute. The Commonwealth argued that Spanier engaged in a course of conduct endangering child welfare until 2012, and therefore he “was charged well within the applicable statute of limitation.” In affirming Spanier’s 2017 conviction, the state court concluded that Spanier's conduct violated the 1995 statute as interpreted by the Pennsylvania Supreme Court in 2015. The federal district court granted Spanier’s federal habeas corpus petition and vacated his conviction.The Third Circuit reversed. The Pennsylvania court’s affirmance of Spanier’s conviction, based on its conclusion that his conduct was covered by the 1995 statute was not “contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court.” While that court applied state supreme court precedent post-dating the conduct in question, the supreme court’s interpretation of the statute was not unforeseeable nor indefensible. View "Spanier v. Director Dauphin County Probation Services" on Justia Law

In 2011, Folajtar pled guilty to a federal felony: willfully making a materially false statement on her tax returns, which is punishable by up to three years’ imprisonment and a fine of up to $100,000, 26 U.S.C. 7206(1). She was sentenced to three years’ probation, including three months of home confinement, a $10,000 fine, and a $100 assessment. She also paid the IRS over $250,000 in back taxes, penalties, and interest. Folajtar was then subject to 18 U.S.C. 922(g)(1), which prohibits those convicted of a crime punishable by more than one year in prison from possessing firearms.Folajtar sued, asserting that applying section 922(g)(1) to her violated her Second Amendment right to possess firearms. The district court dismissed, finding that Folajtar did not state a plausible Second Amendment claim because she was convicted of a serious crime. The Third Circuit affirmed, noting the general rule that laws restricting firearm possession by convicted felons are valid. There is no reason to deviate from this long-standing prohibition in the context of tax fraud. View "Folajtar v. Attorney General of the United States" on Justia Law