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

A mortgage conveys an interest in real property as security. Lenders often require borrowers to maintain hazard insurance that protects the property. If the borrower fails to maintain adequate coverage, the lender may buy the insurance and force the borrower to cover the cost (force-placed coverage). States generally require insurers to file their rates with an administrative agency and may not charge rates other than the filed rates. The filed-rate is unassailable in judicial proceedings even if the insurance company defrauded an administrative agency to obtain approval of the rate.Borrowers alleged that their lender, Nationstar, colluded with an insurance company, Great American, and an insurance agent, Willis. Great American allegedly inflated the filed rate filed so it and Willis could return a portion of the profits to Nationstar to induce Nationstar’s continued business. The borrowers paid the filed rate but claimed that the practice violated their mortgages, New Jersey law concerning unjust enrichment, the implied covenant of good faith and fair dealing, and tortious interference with business relationships; the New Jersey Consumer Fraud Act; the Truth in Lending Act, 15 U.S.C. 1601–1665; and RICO, 18 U.S.C. 1961–1968.The Third Circuit affirmed the dismissal of the suit. Once an insurance rate is filed with the appropriate regulatory body, courts have no ability to effectively reduce it by awarding damages for alleged overcharges: the filed-rate doctrine prevents courts from deciding whether the rate is unreasonable or fraudulently inflated. View "Leo v. Nationstar Mortgage LLC of Delaware" on Justia Law

In 2009, D. was delivered at Sharon Hospital by Dr. Gallagher and sustained an injury, allegedly causing her shoulder and arm permanent damage. In 2010-2011, preparing to file D.’s malpractice case, counsel requested records from Sharon and Gallagher, limited temporally to the delivery. Counsel believed that Gallagher was privately employed. Sharon was private; Gallagher was listed on the Sharon website. Counsel did not discover that Gallagher was employed by Primary Health, a “deemed” federal entity eligible for Federal Tort Claims Act (FTCA), 28 U.S.C. 1346(b), malpractice coverage. D.'s mother had been Gallagher's patient for 10 years and had visited the Primary office. In contracting Gallagher, counsel used the Primary office street address. Gallagher’s responses included the words “Primary Health.” The lawsuit was filed in 2016; Pennsylvania law tolls a minor plaintiff’s action until she turns 18.The government removed the suit to federal court and substituted the government for Gallagher. The district court dismissed the suit against the government for failure to exhaust administrative remedies under the FTCA. The case against Sharon returned to state court. After exhausting administrative remedies, counsel refiled the FTCA suit. The Third Circuit affirmed the dismissal of the suit as untimely, rejecting a claim that D. was entitled to equitable tolling of the limitations period because counsel had no reason to know that Gallagher was a deemed federal employee or that further inquiry was required. D. failed to show that she diligently pursued her rights and that extraordinary circumstances prevented her from timely filing. View "D.J.S.-W. v. United States" on Justia Law

New Jersey and New York agreed more than 50 years ago to enter into the Waterfront Commission Compact. Congress consented to the formation of the Waterfront Commission Compact, under the Compacts Clause in Article I, section 10, of the U.S. Constitution, 67 Stat. 541. In 2018, New Jersey enacted legislation to withdraw from the Compact. To prevent this unilateral termination, the Waterfront Commission sued the Governor of New Jersey in federal court. The district court ruled in favor of the Commission.The Third Circuit vacated. The district court had federal-question jurisdiction over this dispute because the Complaint invoked the Supremacy Clause and the Compact (28 U.S.C. 1331) but that jurisdiction does not extend to any claim barred by state sovereign immunity. Because New Jersey is the real, substantial party in interest, its immunity should have barred the exercise of subject-matter jurisdiction. View "Waterfront Commission of New York Harbor v. Governor of New Jersey" on Justia Law

Beginning around 1915, NPRC operated a Jersey City chemical plant, turning chromite ore into chromium chemicals for dyeing cloth and tanning leather. The process generated hazardous chemical waste that eventually seeped into the soil and groundwater. During both World Wars, the production of chromium chemicals was regulated. During World War II, the government designated chromium chemicals as “critical” war materials and implemented controls concerning labor conditions, supplies, subsidies, and pricing. In 1944, the Chemicals Bureau officially recommended that producers switch to a quicker, more wasteful process. Government orders did not direct how the ores were to be processed, how the chemicals were to be made, or how waste should be handled. PPG purchased the site in 1954 and processed chromium chemicals there until 1963, using essentially the same processes as NPRC, including stockpiling the waste outdoors. PPG has spent $367 million to remediate the site and other contaminated areas.PPG sued under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9607, seeking recovery and contribution for costs associated with cleanup. After four years of discovery, the district court granted the government summary judgment. The Third Circuit affirmed. Governmental involvement with the plant during the wars did not make it an “operator” liable for the cleanup costs associated with the waste. Governmental actions in relation to the plant were consistent with general wartime influence over the industry and did not extend to control over pollution-related activities. View "PPG Industries Inc. v. United States" on Justia Law

During the 2009-2010 term, James was a senator in the Virgin Islands Legislature. The Legislature maintained a fund for Legislature-related expenses. James used a large portion of the checks issued to him by the fund for personal expenses and his re-election campaign. James obtained these checks by presenting invoices purportedly associated with work on a historical project. In 2015, James was charged with two counts of wire fraud, 18 U.S.C. 1343 and one count of federal program embezzlement, 18 U.S.C. 666(a)(1)(A). The Third Circuit affirmed his convictions, upholding a ruling that allowed the prosecution to introduce evidence of acts outside the limitations period, 18 U.S.C. 3282(a), and the substitution of an excused juror with an alternate after the jury had been polled. The court rejected a claim of prosecutorial misconduct based on the prosecution calling two witnesses concerning an eviction dispute. The court had instructed the government not to discuss the eviction case in its opening; neither witness testified about the eviction case. The Third Circuit also upheld a ruling that permitted the use of a chart as a demonstrative aid to accompany the case agent’s testimony, with an instruction that the jury that it should consider the chart as a guide for testimony, not as substantive evidence. View "United States v. James" on Justia Law

After the plaintiffs’ disability claims were denied by ALJs employed by the Social Security Administration (SSA), the Supreme Court held in Lucia v. SEC (2018), that ALJs in the Securities and Exchange Commission (SEC) exercised “significant discretion” in carrying out “important functions” and were required, under the Appointments Clause, to be appointed by the President, a court of law, or the head of a department. Because the SEC ALJs were not so appointed, the petitioner there was entitled to a new hearing. When Lucia was decided, the plaintiffs were already in the process of challenging the SSA’s denial of their claims in the district court and demanded new hearings on the ground that the SSA ALJs were unconstitutionally appointed. The Acting Commissioner of SSA quickly reappointed the administrative judges but argued that the plaintiffs were not entitled to relief because they had not previously presented their Appointments Clause challenges to their ALJs or the Appeals Council and had not exhausted those claims before the agency. The district court declined to require exhaustion, vacated the agency’s decisions, and remanded for new hearings. The Third Circuit affirmed. Both the characteristics of the SSA review process and the rights protected by the Appointments Clause favor resolution of these claims on the merits, so exhaustion is not required in this context. View "Cirko v. Commissioner Social Security" on Justia Law

Cranbury Development bought a long-abandoned weapons-manufacturing facility that the U.S. military and others contaminated. The New Jersey Department of Environmental Protection (NJDEP) ordered the parties responsible for the contamination (Cranbury, Maxxam, and the U.S. Navy) to memorialize their commitment to perform remediation. The Navy refused to take part. In 2005, Cranbury and Maxxam entered into a Consent Order with NJDEP, agreeing to clean up the site; NJDEP agreed not to sue them if they complied. That settlement let Cranbury and Maxxam seek contribution 10 from other polluters (like the Navy) while immunizing them from such claims. In 2006, Brick Yard bought the site, planning to redevelop it into commercial warehouses, and sought to assume Cranbury Development’s cleanup obligations. Brick Yard agreed to join the existing agreement, substituting for Cranbury Development. During the cleanup, problems arose. Brick Yard claims to have spent $50 million in the process. In 2015, Brick Yard sued the federal government, seeking cost recovery and contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9607(a), 9613(f)(1). The Third Circuit affirmed the rejection of the claims. The settlement with the state gave Brick Yard immunity from contribution claims, which extinguished its cost-recovery claim. The contribution claim against the federal government is untimely because Brick Yard sued nine years after joining the settlement. View "Cranbury Brick Yard, LLC v. United States" on Justia Law

Charte (relator) filed a False Claims Act (FCA), 31 U.S.C. 3729–3733, "qui tam" suit alleging that defendants, including Wegeler, submitted false reimbursement claims to the Department of Education. Relators are entitled to part of the amount recovered. As required to allow the government to make an informed decision as to whether to intervene, Charte cooperated with the government. Her information led to Wegeler’s prosecution. Wegeler entered into a plea agreement and paid $1.5 million in restitution. The government declined to intervene in the FCA action. If the government elects to pursue an “alternate remedy,” the statute provides that the relator retains the same rights she would have had in the FCA action. Charte tried to intervene in the criminal proceeding to secure a share of the restitution. The Third Circuit affirmed the denial of the motion. A criminal proceeding does not constitute an “alternate remedy” to a civil qui tam action, entitling a relator to intervene and recover a share of the proceeds. Allowing intervention would be tantamount to an interest in participating as a co-prosecutor in a criminal case. Even considering only her alleged interest in some of the restitution, nothing in the FCA suggests that a relator may intervene in the government’s alternative-remedy proceeding to assert that interest. The text and legislative history regarding the provision indicate that the court overseeing the FCA suit determines whether and to what extent a relator is entitled to an award. View "United States v. Wegeler" on Justia Law

Orie, a former state senator, used her government-funded legislative staff to do fundraising and campaigning for her reelection. When the Commonwealth investigated, she tried to hide and destroy documents. Orie's sisters, including a Pennsylvania Supreme Court Justice, were also charged. At trial, Orie introduced exhibits with directives to her chief of staff, not to do political work on legislative time. The prosecution determined that these exhibits had forged signatures. The court found that the forged documents were “a fraud on the Court,” and declared a mistrial. The Secret Service subsequently found that many of the exhibits were forged. During Orie’s second trial, the prosecution's expert testified that Orie’s office lease barred her staff from using that office for anything besides legislative work. Orie unsuccessfully sought to call an expert to testify that the senate rules let staff do political work from legislative offices on comp time. Orie was convicted of theft of services, conspiracy, evidence tampering, forgery, and of using her political position for personal gain, in violation of the Pennsylvania Ethics Act. The Third Circuit affirmed the denial of her federal habeas petition, first finding that it lacked jurisdiction to consider her Ethics Act challenge because she is not in custody for those convictions. The court rejected a double jeopardy argument. The state court reasonably found that a mistrial was manifestly necessary because the forged documents could have tainted the jury’s verdict. Orie did not show that her senate-rules expert’s testimony would have been material, so she had no constitutional right to call that witness. View "Orie v. Secretary Pennsylvania Department of Corrections" on Justia Law

Under the Communications Act of 1934, 47 U.S.C. 151, the Federal Communications Commission had rules governing ownership of broadcast media to promote “competition, diversity, and localism.” The 1996 Telecommunications Act, Section 202(h) requires the Commission to review those rules regularly to “determine whether any of such rules are necessary in the public interest.” The Third Circuit has ruled on previous reviews. Following a remand, the Commission failed to complete its 2010 review cycle before the start of the 2014 cycle. The Third Circuit found the FCC had unreasonably delayed action and remanded several issues concerning the broadcast ownership rules and diversity initiatives. The Commission then substantially changed its approach to regulation of broadcast media ownership, issuing an order that retained almost all of its existing rules, effectively abandoning its long-running efforts to change those rules since the first round of litigation. The Commission then changed course, granting petitions for rehearing and repealing or otherwise scaling back most of those same rules. It also created a new “incubator” program designed to help new entrants into the broadcast industry. The Third Circuit vacated and remanded most of the Commission’s actions. Although some of those actions, including the incubator program, were not unreasonable, the Commission did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities. View "Prometheus Radio Project v. Federal Communications Commission" on Justia Law