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

Facing asbestos-related personal injury lawsuits filed in the 1980s, a group of producers of asbestos and asbestos-containing products formed the Center for Claims Resolution to administer such claims on behalf of its Members. About 20 Members negotiated and signed the Producer Agreement, which established and set forth the mechanics of the Center and the obligations of the Members. After G-I failed to pay its contractually-calculated share of personal injury settlements and Center expenses, U.S. Gypsum and Quigley were obligated to pay additional sums to cover G-I’s payment obligations. G-I filed for bankruptcy and the Center, U.S. Gypsum, and Quigley each filed a proof of claim, seeking to recover for G-I’s nonpayment under the Producer Agreement. The Center settled its claim with G-I. The Bankruptcy Court granted summary judgment in G-I’s favor. The district court affirmed. The Third Circuit vacated, holding that the Producer Agreement permits the Former Members to pursue a breach of contract action against G-I for its failure to pay contractually-obligated sums due to the Center, in light of their payment of G-I’s share. View "In re: G-I Holdings, Inc." on Justia Law

In 2001, the Bryan family’s adopted son, J.O., repeatedly raped and molested his younger foster brother, K.B., in the room the boys shared. After weeks of abuse, K.B. told his foster parents, who contacted the Erie County Office of Children and Youth (ECOCY), which had facilitated J.O.’s adoption, and had J.O. removed from their home. The Bryans blamed ECOCY for K.B.’s ordeal, claiming that ECOCY employees concealed J.O.’s history of violent behavior and sexual misconduct. The Bryans sued ECOCY and seven employees under 42 U.S.C. 1983 on a theory that permits recovery from state actors when “the state’s own actions create the very danger that causes the plaintiff’s injury.” During trial, the parties agreed to a high-low settlement. Regardless of the verdict, the Bryan family was to receive at least $900,000 and defendants were to pay no more than $2.7 million. The jury returned an $8.6 million verdict; the defendants tendered $2.7 million. The Bryans claimed breach of the settlement agreement’s confidentiality clause, rendering the deal unenforceable. The district court concluded that it lacked subject matter jurisdiction to decide whether to enforce those terms or the verdict. The Third Circuit remanded. The case was not dismissed, nor was the verdict satisfied. A district court’s jurisdiction does not terminate at the moment jury deliberations do. View "Bryan v. Erie Cnty. Office of Children & Youth" on Justia Law

Sara sued the City of Newark and Police Officer Borrero, alleging that Borrero, who had an extensive disciplinary history and who was off-duty at the time, stopped Sara for alleged unsafe driving. Borrero then entered her car and attacked Sara, threatened a bystander who tried to intervene, charged Sara with attacking an officer, and held her without counsel for 12 hours. A jury found that Borrero and the city were liable and awarded $2,700,000 in compensatory damages. The district court remitted Sara’s award to $750,000 and informed her of her right to either accept the remitted award or reject it and proceed to a second jury trial, limited to the quantum of her compensatory damages. A second jury was convened and awarded $4,000,000 in compensatory damages. Instead of addressing the city’s new motion for remittitur, the court entered a final order, vacating the second jury’s verdict and the earlier order of remittitur, and reinstating the first jury’s verdict. The Third Circuit vacated and remanded with instructions that the district court should resolve the city’s motion for remittitur of the second jury’s verdict, but stating that it saw little merit to any of the arguments on appeal.View "Lesende v. Borrero" on Justia Law

In connection with a loan, Bayonne provided Nuveen with an audit report by accounting firm, Withum and an opinion letter from Bayonne’s counsel, Lindabury. Later, Bayonne filed a Chapter 11 bankruptcy petition. Nuveen claimed that the audit report and opinion letter concealed problems. The district court dismissed claims of fraud (Withum), negligent misrepresentation, and malpractice (Lindabury) based on Nuveen’s noncompliance with N.J. Stat. 2A:53A-26 (AOM Statute), which requires an affidavit of merit for certain actions against professionals. The Third Circuit remanded for reconsideration of diversity jurisdiction. On remand, the court found that the action was “related to” Bayonne’s bankruptcy, establishing jurisdiction under 28 U.S.C. 1334(b), and again dismissed. The Third Circuit affirmed as to jurisdiction and held that the AOM Statute can be applied by a federal court without conflicting with FRCP 8. In 2012 the court certified to the New Jersey Supreme Court questions relating to the “nature of the injury” and “cause of action” elements of the AOM Statute. The state court declined. The Third Circuit then held that the AOM Statute applies and affirmed the dismissal. Although such statutes typically apply only to malpractice claims rooted in negligence resulting from harm to a known property, New Jersey courts go further.View "Nuveen Mun. Trust v. Withumsmith Brown PC" on Justia Law

In 1995 the FDA approved Fosamax® to treat or prevent osteoporosis and Paget’s Disease. Teva developed alendronate sodium, a generic form of the branded drug, and obtained FDA approval on its abbreviated new drug application in 2008. Other generic manufacturers subsequently obtained approval for formulations. The drugs act by inhibiting bone resorption or absorption and suppressing bone turnover; they also inhibit primary mineralization, which is involved in the formation of new bone. Meanwhile, secondary mineralization of existing bone continues, which increases the bone’s mineral content and results in higher bone mineral density. According to the plaintiffs, higher bone mineral density does not necessarily correspond with reduction of fracture risk but can make bone highly mineralized, homogenous, brittle, and more susceptible to fracture. According to some studies, the effects of alendronate sodium linger, with one study reporting that bone turnover may be inhibited by 50% five years after discontinuing treatment. The district court granted judgment on the pleadings in favor of the generic manufacturer defendants finding that state-law strict liability claims were pre-empted by federal law. The Seventh Circuit affirmed. Manufacturers have no control over the design or labeling of generic drugs; the plaintiffs failed to identify anything the generic defendants could do to reconcile their conflicting duties under state and federal law.View "In re: Fosmax (Alendronate Sodium)" on Justia Law

In the late 1990s, people who had taken the prescription diet-drug combination Fen-Phen began suing Wyeth, claiming that the drugs caused valvular heart disease. A 2000 settlement included creation of the Fen-Phen Settlement Trust to compensate class members who had sustained heart damage. Claims required medical evidence. Attorneys who represented certain claimants retained Tai, a board-certified Level 2-qualified cardiologist, to read tests and prepare reports. Tai read 12,000 tests and asserted that he was owed $2 million dollars for his services. Tai later acknowledged that in about 10% of the cases, he dictated reports consistent with the technicians’ reports despite knowing that the measurements were wrong, and that he had his technician and office manager review about 1,000 of the tests because he did not have enough time to do the work. A review of the forms Tai submitted found that, in a substantial number of cases, the measurements were clearly incorrect and were actually inconsistent with a human adult heart. Tai was convicted of mail and wire fraud, 18 U.S.C. 1341 and 1343, was sentenced to 72 months’ imprisonment, and was ordered to pay restitution of $4,579,663 and a fine of $15,000. The Third Circuit rejected arguments that the court erred by implicitly shifting the burden of proof in its “willful blindness” jury instruction and applying upward adjustments under the advisory Sentencing Guidelines for abuse of a position of trust and use of a special skill, but remanded for factual findings concerning whether Tai supervised a criminally culpable subordinate, as required for an aggravated role enhancement. View "United States v. Tai" on Justia Law

Freidrich and Davis, both American citizens, were passengers on a U.S. Airways flight in 2010 from Philadelphia to Munich, Germany. Davis formerly lived in Pennsylvania, but now lives in Germany. On his 2012 Registration and Ballot Request form, Davis checked a box that declared his intent to return to the U.S. Freidrich alleges that, during the flight, Davis left his seat and, while standing in the aisle waiting to use the lavatory, he fell on her, breaking her arm. In 2012, Freidrich filed suit against Davis for her injuries in the U.S. District Court for the Eastern District of Pennsylvania based on diversity jurisdiction. The court dismissed for lack of subject matter jurisdiction. The Third Circuit affirmed. Freidrich argued that, because Davis manifested his intent to return to the U.S., he did not produce sufficient evidence to rebut the presumption that his domicile continued to be Pennsylvania. Rejecting the argument, the court upheld a finding of a German domicile, based upon both Davis’ actions and his declarations of intent. View "Freidrich v. Davis" on Justia Law

Quest provides diagnostic and clinical testing. In general, it tests a patient’s specimens upon the request of a referring physician. Once Quest bills a patient’s insurance provider, the provider reviews the claim and sends Quest an Explanation of Benefits (EOB) or an Electronic Remittance Advice (ERA), which informs Quest of the amount, if any, that the patient is responsible for paying. Quest then sends the patient a bill, and, if no response is received, it may turn the bill over to a collection agency. Plaintiffs in a putative class action claimed that Quest billed patients in excess of the amount stated on the EOB or ERA. The district court denied certification as to all four proposed classes and granted summary judgment against an individual plaintiff, as to her state law claims of consumer fraud and unjust enrichment. The Third Circuit affirmed. The court properly found that individual inquiries would be required to determine whether an alleged overbilling constituted unjust enrichment for each class member. View "Grandalski v. Quest Diagnostics Inc." on Justia Law

Decades ago, BASF’s predecessor, Engelhard, discovered that its talc products contained disease-causing asbestos. Plaintiffs allege that Engelhard, with the help of the Cahill law firm, destroyed or hid tests and reports that documented the presence of asbestos in Engelhard talc; when new plaintiffs focused on Engelhard’s talc as a possible cause of their disease, Engelhard represented that its talc did not contain asbestos and that no tests ever said it did. Most of the original plaintiffs have died. Spurred by recent testimony that Engelhard’s talc contained asbestos and that the company knew it, survivors and successors brought claims of fraud, fraudulent concealment, and violation of the New Jersey Racketeer Influenced and Corrupt Organizations Act. The district court dismissed, finding that each was inadequately pled or barred by law. The court found the requested declarations and injunctions-ranging from an injunction against the future invocation of res judicata to a declaration that BASF and Cahill committed fraud—beyond its power to grant, but rejected defendants’ argument that the Rooker-Feldman doctrine deprived it of jurisdiction. The Third Circuit reversed as to the fraud and fraudulent concealment claims, but affirmed dismissal of the RICO claim. To the extent that plaintiffs attempt to have the court decide, now, statute of limitations, laches, and preclusion issues that will arise in future cases, they fail to present a whole or ripe controversy. View "Williams v. BASF Catalysts LLC" on Justia Law

Ferring and Watson market competing prescription progesterone products. Progesterone plays a key role in helping women become pregnant and maintain pregnancies by preparing and maintaining the uterine lining to support the embryo during early pregnancy. Historically, women have received progesterone through intramuscular shots, which are not FDA-approved and which patients consider painful. Both companies manufacture a product that administers progesterone to women through vaginal inserts rather than shots. Ferring’s product, Endometrin, is delivered in capsule form. Watson’s product, Crinone, is a gel delivered via applicator. Ferring unsuccessfully sought a preliminary injunction under the Lanham Act, based on two presentations made by Watson in 2012 to healthcare professionals concerning Crinone. Watson’s consultant, Dr. Silverberg made statements concerning a “Black Box” warning on Endometrin’s package insert; a patient preference survey comparing the products; and Endometrin’s effectiveness in women over the age 35. Silverberg was alerted to the inaccuracy of his statement about a Black Box warning after the first webcast and certified to Ferring and to the court that he would not repeat the statement. The district court held that Ferring failed to demonstrate irreparable harm. The Third Circuit affirmed, citing Supreme Court holdings that a party bringing a claim under the Lanham Act is not entitled to a presumption of irreparable harm when seeking a preliminary injunction and must demonstrate that irreparable harm is likely. View "Ferring Pharm. Inc. v. Watson Pharm., Inc." on Justia Law