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

Quinn, charged with aiding and abetting Johnson in an armed bank robbery, claimed that when he drove Johnson to the bank, he did not know that Johnson intended to rob a bank teller at gunpoint. Johnson, who was awaiting sentencing, refused to testify. The district court refused Quinn’s request to immunize Johnson so he could testify. His statement to police that Quinn was not aware of the planned robbery was excluded as hearsay. Quinn was convicted and sentence to 147 months. The Third Circuit affirmed, rejecting a claim of prosecutorial misconduct by postponing sentencing to induce Johnson not to testify. Quinn also argued that the court erred by not exercising its authority to immunize Johnson’s testimony. Rejecting that claim, the court stated that courts lack that authority, as immunity is a statutory creation reserved to the Executive Branch. If the accused can show a due process violation, a court has authority to vacate a conviction. View "United States v. Quinn" on Justia Law

The district court permanently enjoined enforcement of two Hazleton ordinances that attempt to prohibit employment of unauthorized aliens and preclude them from renting housing within the city. The Third Circuit affirmed in 2010. The Supreme Court granted certiorari and remanded for reconsideration in light of Chamber of Commerce v. Whiting, S. Ct. 1968 (2011). The Court later decided Arizona v. United States, 132 S. Ct.2492 (2012). Both address the extent to which federal immigration law preempts state laws pertaining to the treatment of unauthorized aliens. On remand, the Third Circuit again concluded that both the employment and housing provisions of the Hazleton ordinances are preempted by federal immigration law. The employment provisions in the ordinance are distinguishable from the Arizona law upheld in Whiting. The lack of minimal procedural protections in Hazleton’s ordinance conflicts with express congressional objective of minimizing undue burdens on, and harassment of, employers. The rental registration scheme serves no discernible purpose other than to register the immigration status of a subset of the city’s population. The Supreme Court’s reasoning in Whiting and Arizona does not undermine a conclusion that both the employment and housing provisions are preempted. View "Lozano v. City of Hazleton" on Justia Law

Portland Generating Station is a 427-megawatt, coal-fired, electricity generating plant in Northampton County, Pennsylvania, directly across the Delaware River within 500 feet of Warren County, New Jersey. The EPA found that Portland emits sulfur dioxide in amounts that significantly interfere with control of air pollution across state borders. In response to a petition under the Clean Air Act (42 U.S.C. 7408, 7409)), the EPA imposed direct limits on Portland‘s emissions and restrictions to reduce its contribution to air pollution within three years. The Third Circuit upheld the EPA actions. It was reasonable for the EPA to interpret Section 126(b) as an independent mechanism for enforcing interstate pollution control, giving it authority to promulgate the Portland Rule. The contents of the Portland Rule are not arbitrary, capricious, or abusive of the EPA‘s discretion. View "GenOn REMA LLC v. U.S. Envtl. Prot. Agency" on Justia Law

States participating in Medicaid in a managed care environment are required to make, at least every fourth month, supplemental “wraparound” payments to federally-qualified health centers (FQHCs) equal to the difference between a rate set by statute multiplied by the number of Medicaid patient encounters, and the amount paid to FQHCs by managed care organizations (MCOs) for all Medicaid-covered patient encounters, 42 U.S.C.1396. Concerned that gaps in FQHC claim verification led to overpayments, the New Jersey Department of Human Services changed its calculation: instead of basing wraparound payments solely on the number of Medicaid encounters and total MCO receipts as self-reported by FQHCs, the state would rely on data reported by MCOs absent receipt of certain additional data from the FQHCs. Because MCOs report only encounters that they have approved and paid, prior MCO payment would be a prerequisite to wraparound reimbursement under the new system. An association of FQHCs sued, claiming that the change violated their due process rights as well as state and federal law, resulting in budget shortfalls. The district court granted the association summary judgment and a preliminary injunction. The Third Circuit affirmed the holding that the requirement that wraparound payments be contingent on prior MCO payment violated the Medicaid statute’s requirement that FQHCs receive timely full wraparound payment for all Medicaid-eligible claims. View "NJ Primary Care Assoc. v. NJ Dep't of Human Servs." on Justia Law

The Securities and Exchange Commission (SEC) Office of Investigations (OIG) found that the SEC had received numerous substantive complaints since 1992 that raised significant concerns about Madoff’s hedge fund operations that should have led to a thorough investigation of the possibility that Madoff was operating a Ponzi scheme. The SEC conducted five examinations and investigations, but never took the steps necessary to determine whether Madoff was misrepresenting his trading. The OIG found that had these efforts been made, the SEC could have uncovered the Ponzi scheme. Madoff’s clients filed suit under the Federal Tort Claims Act, 28 U.S.C. 1346(b), 2671, to recover damages resulting from the SEC’s failure to uncover and terminate the scheme in a timely manner. The district court dismissed for lack of subject matter jurisdiction, finding that the claims were barred by the discretionary function exception to the FTCA. The Third Circuit affirmed, reasoning that SEC regulations afford examiners discretion regarding the timing, manner, and scope of investigations and that there is a strong presumption that the SEC’s conduct is susceptible to policy analysis. View "Baer v. United States" on Justia Law

The Virgin Islands, a U.S. territory, does not share the same sovereign independence as the states; the power to pass rules and regulations governing territories rests with Congress. Congress passed legislation applying the Internal Revenue Code to the Virgin Islands, 48 U.S.C. 1397, “except that the proceeds of such taxes shall be paid into the treasuries of said islands.” Bona fide VI residents are granted a full exemption from paying federal income taxes if they file a territorial tax return and fully pay territorial taxes to the Virgin Islands Bureau of Internal Revenue (VIBIR), I.R.C. 932(c). This exemption is significant because Congress authorized the VI government to create an Economic Development Program granting substantial tax incentives to certain taxpayers. Between 2001 and 2004 Taxpayers claimed bona fide VI residency and eligibility for the tax benefits granted by the Economic Development Program; they filed tax returns with the VIBIR and paid taxes only to the VI government. Taxpayers did not file federal income tax returns. In late 2009-2010, Taxpayers were issued IRS tax prepayment deficiency notices challenging their claims of residency. The district court dismissed Taxpayers’ challenges on grounds that the Tax Court was the only proper forum. The Third Circuit affirmed. View "McGrogan v. Comm'r of Internal Revenue" on Justia Law

The NLRB certified a union and ordered an election. The union won a majority. The company refused to bargain. The union claimed unfair labor practices. A three-member NLRB delegee group granted the union summary judgment. The NLRB is composed of up to five members, appointed by the president and confirmed by the Senate, 29 U.S.C. 153(a) and may delegate its authority to any group of three or more members. Delegee groups must maintain a membership of three.The company unsuccessfully moved for reconsideration, arguing that the group’s order was not issued until it was mailed, by which time one member had resigned and the panel had only two members. The company then argued that the reconsideration order group was improperly constituted because one panelist was a recess appointee whose term concluded at the end of the Senate‘s 2011 session, which, it contended, was 13 days before the order issued. The NLRB denied the second motion. The company next argued that the group that issued the second order included two members that were invalidly appointed under the Recess Appointments Clause while the Senate was not in recess, reasoning that if the Senate‘s session ended when it began using pro forma sessions, the term of one member had expired; if the session did not end then, the president‘s recess appointments were invalidly made while the Senate was not in recess. The NLRB denied the motion. The Third Circuit vacated, holding that the Recess of the Senate in the Recess Appointments Clause refers to only intersession breaks; the panel lacked the requisite number of members because one panel member was invalidly appointed during an intrasession break. View "New Vista Nursing & Rehab. v. Nat'l Labor Relations Bd." on Justia Law

Under the “Hyde Amendment,” a district court in criminal cases may award to a prevailing party a reasonable attorney’s fee and other litigation expenses, if the position of the United States was vexatious, frivolous, or in bad faith, unless the court finds special circumstances, 18 U.S.C. 3006A. The district court denied such an award in a case involving four counts of conspiring and attempting to commit extortion, 18 U.S.C. 951(a) & 2 (Hobbs Act), and two counts of traveling in interstate commerce to promote and facilitate bribery, 18 U.S.C. 1952(a)(3) & 2 (Travel Act). The government alleged that Manzo, a candidate for mayor of Jersey City, sought cash payments from Dwek, an informant posing as a developer, and that, in exchange, Manzo indicated he would help Dwek with matters involving Jersey City government. The district court dismissed each Hobbs Act count because Manzo was not a public official at the time of the conduct. The Third Circuit affirmed. The court later held that receipt of something of value by an unsuccessful candidate in exchange for a promise of future official conduct does not constitute bribery under the New Jersey bribery statute and dismissed all remaining charges. The Third Circuit affirmed the denial of fees. View "United States v. Manzo" on Justia Law

In 2007, Tellado heard a Spanish-language radio advertisement for mortgage refinancing, called the number, and spoke in Spanish to arrange refinancing of an existing mortgage. Bloom, a closing agent acting as a representative of IndyMac, conducted the closing at the Tellados’ home. The loan documents, including the notice of the right to cancel, were in English. Oral communications between Bloom and the Tellados, were conducted through the Tellados’ daughter, who served as an interpreter for verbal instructions and Bloom’s explanations of the loan documents. IndyMac subsequently failed and was placed in FDIC receivership. In 2009, the Tellados sent a notice of cancellation under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, 73 P.S. 201-7. The district court held that IndyMac had failed to provide proper notice and that the three-day cancellation period had never begun; it ordered refund to the Tellados of all payments, termination of the security interest, and payment of a $10,000 penalty. The Third Circuit reversed; the claim is precluded by the Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. 1821(d)(13)(D) because the claim is predicated upon an act or omission of IndyMac. Tellados failed to exhaust their administrative remedies under FIRREA. View "Tellado v. Indymac Mortg. Serv." on Justia Law

Phillip and Defoe worked together at an oil refinery in the U.S. Virgin Islands. Phillip was driving a company-owned vehicle near the refinery when it struck Defoe. While recovering, Defoe filed a claim and received benefits under the Virgin Islands Workers’ Compensation Act, 24 V.I. Code 250. He also sued Phillip for negligence in the Superior Court of the Virgin Islands, which granted summary judgment for Phillip, holding that the Act prevents injured employees from suing their coworkers. The Supreme Court of the Virgin Islands reversed, declaring that it was not bound by Third Circuit pre-2007 decisions on Virgin Islands law. Phillips sought certiorari to the Third Circuit, which upheld the decision of the Supreme Court of the Virgin Islands, stating that that court “is on the road to Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938),” which requires federal courts to defer to local courts on issues of local law. The court held that it will defer to the Supreme Court on questions of local law, subject to a manifest-error standard of review, including with respect to its pre-2007 precedents; the court did not manifestly err in rejecting that precedent. View "Defoe v. Phillip" on Justia Law