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

WI buys furniture wholesale. OEC provided WI with non-vessel-operating common carrier transportation services. WI signed an Application for Credit that granted a security interest in WI property in OEC’s possession, custody or control or en route. As required by federal law, OEC also publishes a tariff with the Federal Maritime Commission, which provides for a Carrier’s lien. WI filed voluntary Chapter 11 bankruptcy petitions. OEC sought relief from the automatic stay, arguing that it was a secured creditor with a possessory maritime lien. OEC documented debts of $458,251 for freight and related charges due on containers in OEC’s possession and $994,705 for freight and related charges on goods for which OEC had previously provided services. The estimated value of WIs’ goods in OEC’s possession was $1,926,363. WI filed an adversary proceeding, seeking release of the goods. The bankruptcy court ruled in favor of WI, citing 11 U.S.C. 542. The district court affirmed, holding that OEC did not possess a valid maritime lien on Pre-petition Goods. The Third Circuit reversed, noting the strong presumption that OEC did not waive its maritime liens on the Prepetition Goods, the clear documentation that the parties intended such liens to survive delivery, the familiar principle that a maritime lien may attach to property substituted for the original object of the lien, and the parties’ general freedom to modify or extend existing liens by contract. View "In re: World Imports LTD" on Justia Law

KCI’s Transit Division provides bus and shuttle services on 32 set routes, four of which cross state lines. From 2009 through 2012, its revenue generated by interstate routes fluctuated between 1.0% and 9.7%. KCI trains drivers on multiple interstate and intrastate routes. KCI may assign a driver to any route on which he has been trained, including interstate routes, and may discipline a driver who refuses to drive an assigned route. As a “common carrier by motor vehicle” authorized to engage in interstate commerce, KCI is subject to Federal Motor Carrier Safety Administration (FMCSA) regulations and possesses a U.S. Department of Transportation registration number. KCI provides each driver with a “Federal Motor Carrier Safety Regulations Pocketbook” detailing the driver’s responsibilities under DOT regulations. Plaintiffs were drivers who, during the relevant period, worked more than 40 hours in a week without receiving overtime pay; 1.3% of their trips required them to cross state lines. Resch filed a purported collective action to recover unpaid overtime. The district court conditionally certified a class. The Third Circuit affirmed summary judgment in favor of KCI, holding that Plaintiffs are ineligible for overtime under the Motor Carrier Act exemption to the Fair Labor Standards Act, 29 U.S.C. 213(b)(1), and Pennsylvania Minimum Wage Act. View "Resch v. Krapf's Coaches Inc" on Justia Law

McMaster worked for Eastern, an armored courier company, as a driver or guard. Her assignment changed daily. McMaster spent 51% of her total days working on vehicles rated heavier than 10,000 pounds, and 49% of her total days working on lighter vehicles. She was paid by the hour and frequently worked more than 40 hours per week. She was not paid overtime. After McMaster left Eastern, she filed a purported class action claiming that the Fair Labor Standards Act required Eastern to pay overtime wages , 29 U.S.C. 216(b). The dispute centered on the Act’s the Motor Carrier Act Exemption. According to McMaster, she fell within an exception to the exemption, enacted prior to her employment. The Corrections Act waives the exemption for motor carrier employees who, in whole or in part, drive vehicles weighing less than 10,000 pounds and states: “Section 7 of the Fair Labor Standards Act . . . appl[ies] to a covered employee notwithstanding section 13(b)(1) of that Act.” The district court held that McMaster was eligible for overtime for all hours she worked over 40 in a workweek. The Third Circuit affirmed. McMaster met the criteria of a “covered employee” and was entitled to overtime. View "McMaster v. Eastern Armored Servs., Inc" on Justia Law

Bala, a unionized signal repairman, has worked for PATH since 1990. Signal repairmen of Bala’s seniority get 12.5 paid holidays and 23 paid vacation days per year. Separate from holidays and vacations, Bala took more than 600 sick and personal days through 2008. In 2007, Bala took 82 sick days, compared to the 17 days of sick leave per year typically taken by PATH’s unionized signalmen. PATH warned that if his attendance did not improve formal disciplinary action might be taken. On June 22, 2008, Bala experienced back pain while at home. The next day, Bala’s physician ordered him off work through July. PATH notified Bala of a hearing regarding his absenteeism. After that hearing, PATH suspended Bala for up to six days, without pay. Bala filed a complaint with the U.S. Secretary of Labor, alleging that the suspension was retaliation for taking statutorily protected sick leave, in violation of the Federal Railroad Safety Act, 49 U.S.C. 20101. The Review Board held that PATH violated the Act, which prohibits railroads from disciplining employees “for following orders or a treatment plan of a treating physician.” The Third Circuit reversed, holding that only physicians’ orders which stem from on-duty injuries are covered. View "Port Auth. Trans-Hudson Co v. Sec'y, Dep't of Labor" on Justia Law

The Locomotive Inspection Act (LIA), 49 U.S.C. 20701, provides that “a locomotive … and its parts and appurtenances” must be “in proper condition and safe to operate without unnecessary danger of personal injury.” The Federal Railroad Administration, under the authority of the Secretary of Transportation, has promulgated regulations on the governing standards of care. Canadian Pacific settled lawsuits brought by its employees who had suffered injuries as a result of defective train seats, then brought indemnification, contribution, and breach-of-contract claims against Knoedler Manufacturing, which supplied the seats, and Durham, which tried unsuccessfully to repair the seats. The district court dismissed Canadian Pacific’s claims as preempted by the LIA. The Third Circuit vacated. State law claims of breach of contract, indemnification, contribution based on the LIA are not preempted. To hold that the LIA preempts all breach-of-contract claims would allow, and perhaps encourage, manufacturers to make grand contractual promises to obtain a deal and then breach their duties with impunity. View "Del. & Hudson Ry. Co v. Knoedler Mfrs., Inc" on Justia Law

George, a 21-year old U.S. citizen, was scheduled to fly from Philadelphia to California to begin his senior year at Pomona College. George claims that at the Philadelphia International Airport, he was detained, interrogated, handcuffed, and then jailed, because he was carrying a deck of Arabic-English flashcards and a book critical of American interventionism. The flashcards included every day words and phrases such as “yesterday,” “fat,” “thin,” “really,” “nice,” “sad,” “cheap,” “summer,” “pink,” and “friendly,” but also contained such words as: “bomb,” “terrorist,” “explosion,” “attack,” “battle,” “kill,” “to target,” “to kidnap,” and “to wound.” George had a double major in Physics and Middle Eastern Studies and had traveled to Jordan to study Arabic as part of a study abroad program; he then spent five weeks traveling in Ethiopia, Egypt and Sudan. He was released after about five hours. In his suit against three employees of the Transportation Security Administration and two FBI Joint Terrorism Task Force members, the district court’s denied motions in which the defendants asserted that they were entitled to qualified immunity against claims that they violated George’s Fourth and First Amendment rights. The Third Circuit reversed and ordered the case dismissed. View "George v. Rehiel" on Justia Law

The Association of New Jersey Rifle and Pistol Clubs alleged that the Port Authority enforced state gun laws against its non-resident members at Newark Airport. The district court held that 18 U.S.C. 926A does not create a right enforceable under 42 U.S.C. 1983. The Third Circuit affirmed, holding that, in enacting the amended section 926A, Congress did not intend to confer the right upon the plaintiff. Section 926A confers protection upon those who wish to engage in the interstate transportation of firearms: Notwithstanding any other … law … any person who is not otherwise prohibited by this chapter from transporting, shipping, or receiving a firearm shall be entitled to transport a firearm for any lawful purpose from any place where he may lawfully possess and carry such firearm to any other place where he may lawfully possess and carry such firearm if, during such transportation the firearm is unloaded, and neither the firearm nor any ammunition being transported is readily accessible or is directly accessible from the passenger compartment of such transporting vehicle…. The court concluded that Congress did not intend the amended section 926A to benefit those who wish to transport firearms outside of vehicles. View "Ass'n of NJ Rifle & Pistol Clubs, Inc. v.Port Auth. of NY & NJ " on Justia Law

As the tanker Athos neared Paulsboro, New Jersey, an abandoned anchor in the Delaware River punctured its hull and caused 263,000 gallons of crude oil to spill. The owner of the tanker, Frescati, paid $180 million in cleanup costs and ship damages, but was reimbursed for nearly $88 million by the U.S. government under the Oil Pollution Act, 33 U.S.C. 2701. Frescati made claims against CARCO, which ordered the oil and owned the terminal where the Athos was to unload, claiming breach of the safe port/safe berth warranty made to an intermediary responsible for chartering the Athos and negligence and negligent misrepresentation. The government, as a statutory subrogee for the $88 million reimbursement reached a limited settlement agreement. The district court held that CARCO was not liable for the accident, but made no findings of fact and conclusions of law, required by FRCP 52(a)(1). The Third Circuit remanded for findings, but stated that the Athos and Frescati were implied beneficiaries of CARCO‘s safe berth warranty; that the warranty is an express assurance of safety; and that the named port exception to that warranty does not apply to hazards that are unknown and not reasonably foreseeable. The court noted that it is not clear that the warranty was actually breached, absent findings as to the Athos‘s actual draft or the clearance provided. The court further stated that CARCO could be liable in negligence for hazards outside the approach to CARCO‘s terminal. View "United States v. Citgo Asphalt Ref. Co." on Justia Law

The mall is bounded by a railroad track and drainage ditches owned by CSX. Houses beyond the track are higher than the track, which is higher than the mall. CSX’s predecessor installed a berm, straddling the property line, to prevent storm water from flowing onto the mall property. In 2010 storm water breached the berm. Runoff and debris from CSX’s property flowed down the slope and overwhelmed a private storm water inlet in the mall parking lot. CSX assured mall representatives that it planned a ditch to resolve the problem, but, instead, began constructing a spillway on the mall side of the berm to direct storm water into the mall’s drainage inlet. The mall manager discovered and immediately halted the work. The mall claimed negligence and continuing trespass. During discovery, the mall learned that CSX had refurbished the relevant portion of the track and argued that the modifications led to the discharge onto its property and that the discharge was evidence that CSX had violated, 49 C.F.R. 213.33, enacted under the Federal Railroad Safety Act. The district court granted CSX summary judgment, holding that the claims were blocked by the FRSA preemption provision. The Third Circuit vacated, noting the “constrained scope” of FRSA preemption. View "MD Mall Assocs. v. CSX Transp., Inc" on Justia Law

Araujo, who worked for New Jersey Transit Rail Operations, witnessed a fatal accident in 2008, when a construction worker was electrocuted on the job. He reported an emotional injury and was later suspended for violation of a rule relating to the accident. He filed a complaint with the Occupational Safety & Health Administration Office of Whistleblower Protection, which issued findings in favor of Araujo, and ordered NJT to pay $569,587 in damages, to which NJT objected. Araujo then filed suit, alleging that he was disciplined in retaliation for his participation in an activity protected by the Federal Rail Safety Act, 49 U.S.C. 20109, in reporting his injury. The district court found that the discipline was not retaliatory and granted NJT summary judgment. The Third Circuit reversed, holding that NJT failed to refute Araujo’s assertion that his actions were in line with NJT practice at the time of the accident. View "Araujo v. NJ Transit Rail Operations, Inc." on Justia Law