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

Whiteside represented the County of Camden in a lawsuit brought by Anderson, which resulted in a jury award paid, in part, by the County’s excess insurer, National. According to National, the County did not notify it of the lawsuit until several months after it was filed. Whiteside initially informed National that the case was meritless and valued it at $50,000. During trial, Whiteside changed her valuation and requested the full $10 million policy limit to settle Anderson’s claims. National conducted an independent review and denied that request. The jury awarded Anderson $31 million, which was remitted to $19 million. Days later, National sought a declaratory judgment that it was not obligated to provide coverage because the County had breached the policy contract by failing to timely notify National of the case and by failing to mount an adequate investigation and defense. National also asserted claims against Whiteside for legal malpractice, breach of fiduciary duty, and breach of contract. The court dismissed those claims because National could not demonstrate that Whiteside’s actions proximately caused it to suffer any damages. The Third Circuit dismissed and appeal for lack of jurisdiction, finding National’s notice of appeal untimely under Federal Rule of Appellate Procedure 4(a)(1), View "State Nat'l Ins. Co v. County of Camden" on Justia Law

Bar Admission Rule 204 allows an attorney to join the Pennsylvania bar by motion, without taking the state bar exam, if the attorney has graduated from an accredited law school, has either passed the bar exam or practiced law for the “major portion” of five of the preceding seven years in a reciprocal state, remains a member in good standing of every bar to which the attorney has been admitted, obtains a favorable moral character determination in Pennsylvania, achieves a sufficient score on the Multistate Professional Responsibility Exam, and has not previously failed the Pennsylvania bar exam. Pennsylvania allows attorneys admitted in any state to apply for pro hac vice admission, limited to a particular case; 38 states and the District of Columbia have reciprocity agreements with Pennsylvania. An organization dedicated to extending reciprocal bar admission to additional states argued that Rule 204 violates the Equal Protection and Privileges or Immunities Clauses, the First Amendment, the Privileges and Immunities Clause of Article IV, and the Dormant Commerce Clause. The district court and Third Circuit upheld the rule, which does not classify attorneys based on residency, but rather, their state of bar admission, and it does not erect a barrier to migration. View "Nat'l Ass'n for the Advancement of Multijurisdictional Practice v. Castille" on Justia Law

Jensen defaulted on a credit card. Her debt was sold to Midland, which retained the Pressler law firm for collection. Midland obtained a $5,965.82 default judgment and served an information subpoena and questions on Jensen. The information subpoena issued under New Jersey Rule 1:9-1, which allows attorneys to issue subpoenas in the name of the clerk of court, bearing the clerk’s signature, although the clerk did not sign the subpoena and likely is unaware of it. Pressler listed “Terrence Lee” on the clerk’s signature line. Lee had never worked as a court clerk; he had been County Clerk, but left that position years earlier. Jensen knew Lee was not clerk of the Superior Court. Jensen sent Pressler a letter, calling the subpoena “fraudulent,” but answered the subpoena questions. Jensen unsuccessfully moved to vacate the state court judgment against her, then filed a putative federal class action against Pressler and Midland, alleging violation of Fair Debt Collection Practices Act, 15 U.S.C. 1692e., which prohibits making false, misleading, or deceptive statements in the collection of consumer debts. The Third Circuit affirmed summary judgment, finding that the misuse of Lee’s name was not a material false statement. A materiality requirement is subsumed within the “least sophisticated debtor” standard that governs FDCPA claims. View "Jensen v. Pressler & Pressler" on Justia Law

The Criminal Justice Act, 18 U.S.C. 3006A, requires each federal district court to establish a plan to furnish representation to indigent persons charged with federal crimes. In seven different Post-Conviction Review Act cases in various Pennsylvania counties, hearings were initiated to disqualify the Federal Community Defender (FCD) as counsel, based on that organization’s alleged misuse of federal grant funds to appear in state proceedings. FCD acknowledges that it sometimes appears in PCRA proceedings without a federal court order directing it to do so, but claims that it uses federal grant funds only for preparatory work that will be relevant to a federal habeas petition and only if it has received a federal court order appointing it as counsel for federal habeas proceedings or is working to obtain such an appointment. FCD removed the motions under the federal officer removal statute, 28 U.S.C. 1442(a)(1), (d)(1). The Commonwealth moved, under 28 U.S.C. 1447(c), to return each to state court, claiming lack of subject matter jurisdiction. FCD argued that the Commonwealth lacked a federal private right of action and that federal law preempted the motions. The district courts split. The Third Circuit held that FCD properly invoked removal jurisdiction and that the Commonwealth’s attempts to disqualify it as counsel proceedings are preempted. View "In Re: Commonwealth's Motion" on Justia Law

Insurance companies allegedly refused to honor claims for payment of blood-clotting-factor products. After they paid the claims in full, the district court dismissed a complaint under the Employees Retirement Income Security Act (ERISA) and state law. Following dismissal, both the plaintiffs and defendants sought attorney’s fees and costs. The Third Circuit affirmed denial, but remanded one issue: whether the plaintiffs were entitled to interest on the delayed payment of benefits. On remand, they sought interest of $1.5 to $1.8 million, primarily under the Maryland Code, with $68,000 based on the federal Treasury bill rate. The companies agreed to pay $68,000.00 in interest and the district court dismissed the case. Plaintiffs then sought attorney’s fees and costs of $349,385.15. The district court denied the motion, finding that plaintiffs had failed to achieve “some degree of success on the merits” as required for an award of fees under ERISA. The Third Circuit reversed, holding that the court used an incorrect legal standard to evaluate eligibility for attorney’s fees and misapplied the “Ursic” factors. The “catalyst theory” of recovery is available to the plaintiffs and judicial action is not required under that theory in order to establish some degree of success. View "Templin v. Independence Blue Cross" on Justia Law

Kaymark defaulted on a mortgage held by Bank of America (BOA). On behalf of BOA, Udren Law Offices initiated foreclosure proceedings. The body of the Foreclosure Complaint listed not-yet-incurred fees as due and owing, which, Kaymark alleged, violated state and federal fair debt collection laws and breached the mortgage contract. The Third Circuit reversed dismissal of claims that the disputed fees constituted actionable misrepresentation under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, but affirmed dismissal of all other claims. By attempting to collect fees for legal services not yet performed in the mortgage foreclosure, Udren violated FDCPA section 1692e(2)(A), (5), and (10), which imposes strict liability on debt collectors who “use any false, deceptive, or misleading representation or means in connection with the collection of any debt,” and section 1692f(1) by attempting to collect “an[] amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” The court analogized to similar claims in a debt collection demand letter. View "Kaymark v. Bank of America NA" on Justia Law

Knight, a member of the International Longshoremen’s Association, was financial secretary for the Local. In 2000, he distributed a flier stating the Local was hosting the Worker’s Coalition. McBride, director of Diamond State Port Corporation (which operates the Port of Wilmington where Union members work) offered to be a speaker and contributed $500 to the hotel hosting the meeting. The Union’s national vice president, Paylor, told McBride that Worker’s Coalition was not affiliated with the Union. McBride withdrew as a speaker, but he did not seek return of the $500. Knight filed Union charges against Paylor for interfering with the Local. Paylor counter-charged, alleging frivolous claims and using the Union name without permission. A hearing board cleared Paylor, but decided that Knight committed violations. Knight filed suit. On first remand, the district court ordered and the Union created a new policy and held a new hearing. The Union did not comply with an order to change its constitution. On second appeal, the Third Circuit held that Knight’s due process rights were not violated in the second hearing, but the district court awarded Knight attorney’s fees ($243,758.34), costs, and interest, reasoning that, because of Knight’s suit, Union members: can no longer be disciplined for harmless references to the Union name or logo; are more aware of disciplinary hearing due process rights; and, are properly informed about the Act. On third appeal, the Third Circuit affirmed. View "McBride v. Int'l Longshoremens Ass'n" on Justia Law

Prosser filed a Chapter 11 bankruptcy petition in 2006, which was converted to a Chapter 7 petition. Carroll was appointed as trustee. At a 2008 trial to adjudicate creditors’ objections to Prosser’s claim of exemptions, Stelzer, Prosser’s former “valet and personal assistant,” testified that Prosser asked him to destroy computer hard drives after Prosser filed for bankruptcy. The Bankruptcy Court denied the exemptions. Carroll and others initiated an adversary proceeding, seeking denial of discharge under 11 U.S.C. 727(a), Prosser deposed Stelzer in an effort to undermine his testimony; Prosser Counsel inquired into the payment of Stelzer’s legal fees by third parties and contacts Stelzer had with Carroll and Carroll’s counsel. Prosser Counsel later sought an evidentiary hearing into “a bribery scheme,” asserting that Stelzer gave unfavorable testimony during the Exemptions Trial in exchange for payment of his attorney fees in multiple litigations and that Carroll’s counsel had misrepresented Carroll’s contacts with Stelzer. Ultimately, Carroll obtained an award of legal fees and expenses against Prosser Counsel (28 U.S.C. 1927) contending that the Adversary Complaint, the Fee Objections, and the Conflicts Motion were patently meritless. The district court vacated, holding that the Adversary Complaint and Fee Objections could not have “multiplied” the adversary proceedings. The Third Circuit reversed, reinstating the sanctions. View "In re: Prosser" on Justia Law

Flora worked as Luzerne County Public Defender from 1980- 2013. He became Chief Public Defender in 2010, maintaining a private practice. His predecessor had tried to secure additional funding by submitting weekly reports concerning excessive caseloads and staffing deficiencies. Flora obtained grant funding for representing juveniles, but was not able to obtain additional money for adult offenders. Flora reported that the existing level of resources did not allow the Office to provide constitutionally adequate representation. The County was unresponsive, so Flora refused representation to those not faced with incarceration. In 2012 Flora initiated a class action lawsuit on behalf of indigent defendants and sought an injunction to prevent his firing. The state court ordered the County to provide adequate funding and prohibited refusing representation to indigent defendants. While the parties were in mediation, the County approved new positions. The funding litigation followed the “Kids for Cash” scandal. From 2003-2008, about 50% of Luzerne County juvenile offenders appeared in court without counsel. Virtually all were adjudicated delinquent. Federal investigators uncovered that judges had accepted kickbacks from for-profit juvenile detention facilities to send unrepresented juveniles to those facilities. The Pennsylvania Supreme Court ordered vacatur and expungement of thousands of delinquency adjudications. Flora alleges that, in 2013, he learned that 3,000 adjudications had not been expunged and reported the matter. Flora was relieved of his duties. Flora sued, alleging retaliation for his funding lawsuit and for reporting noncompliance with the expungement order. The district court dismissed. The Third Circuit vacated, finding that, under the Supreme Court’s 2014 decision, Lane v. Franks, Flora pled facts sufficient to allege that he spoke as a citizen. View "Flora v. County of Luzerne" on Justia Law

McLaughlin had a mortgage. As a result of an error, the mortgage company believed that he was in default and referred the matter to a law firm, PHS, which sent McLaughlin a letter about the debt that he claims violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692 by referring to attorneys’ fees and costs that McLauglin claims had not yet been incurred. The district court dismissed certain claims because McLaughlin did not ask PHS to validate the debt before he filed suit. The Third Circuit reversed, concluding that he was not required to request validation. The court affirmed imposition of sanctions against PHS for its failure to produce certain documents during discovery. View "McLaughlin v. Phelan Hallinan & Schmieg, LLP" on Justia Law