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

Conestoga and individuals who own 100 percent of the voting shares of Conestoga and who practice the Mennonite religion, alleged that regulations promulgated by the Department of Health and Human Services, which require group health plans and health insurance issuers to provide coverage for contraceptives, violated the Religious Freedom Restoration Act, 42 U.S.C. 2000bb (RFRA) and the Free Exercise Clause of the First Amendment. The Mennonite Church teaches that taking of life, including anything that terminates a fertilized embryo, is intrinsic evil and a sin against God to which they are held accountable. Plaintiffs specifically object to two “morning after” drugs that must be provided under the mandate that may cause the demise of an already conceived, unattached embryo. The District Court denied a preliminary injunction. The Third Circuit affirmed, holding that a for-profit, secular corporation cannot to engage in religious exercise under the Free Exercise Clause and RFRA. Nor do the owners have viable claims; the law does not impose any requirements on them. Compliance and penalties are placed squarely on Conestoga. View "Conestoga Wood Specialties Corp. v. Sec'y U.S. Dep't of Health & Human Servs." on Justia Law

Munir sent his son, O.M., to a private residential facility and a private boarding school after multiple suicide attempts, and sought reimbursement for the cost of the placements from the school district under the Individuals with Disabilities Education Act (IDEA), which requires that states receiving federal education funding ensure that disabled children receive a free appropriate public education, 20 U.S.C. 1412(a)(1) or pay for their education elsewhere if a child require specialized services that the public institution cannot provide. The district court denied the request, reasoning that O.M. had emotional problems, but that those problems were not affecting his ability to learn. The Third Circuit affirmed, finding that O.M.’s placement was to meet his mental health needs; any educational benefit he received from the placement was incidental. O.M. was an above-average student, without serious attendance problems, and socialized well in the district school. An individualized education plan offered by the district satisfied its IDEA obligations. View "Munir v. Pottsville Area Sch. Dist." on Justia Law

GSK holds patent and FDA rights to market and sell the pharmaceutical (paroxetine hydrochloride) controlled release tablets for treatment of depression, under the brand name Paxil. Under a 2007 settlement agreement, GSK granted Mylan certain rights to produce, market, and sell generic paroxetine. In 2010, GSK agreed, in an unrelated settlement, to begin supplying Apotex with GSK-produced generic paroxetine for marketing and sale. Mylan sued GSK and Apotex, claiming the 2010 agreement violated its licensing agreement, which did not permit GSK to provide its own form of generic paroxetine to another generic drug company to be marketed and sold in direct competition with Mylan. The district court found that the terms of the agreement were unambiguous and did not limit to whom GSK was permitted to market and sell its own version of generic paroxetine. The Third Circuit reversed the order of summary judgment on the breach-of-contract cause of action against GSK, but affirmed summary judgment on other claims. View "Mylan Inc. v. SmithKline Beecham Corp." on Justia Law

Flemming, convicted in 2004 of possessing with intent to distribute crack cocaine, 21 U.S.C. 841(a), 841(b)(1)(C), and two firearm counts, had a Guidelines range of 92 to 115 months’ imprisonment. Because he had two prior controlled substances convictions, he was classified as a career offender under U.S.S.G. 4B1.1(a), so that his Guidelines range was 262 to 327 months. The court granted a downward departure under U.S.S.G. 4A1.3, based on “reliable information . . . that the criminal history category does not adequately reflect the seriousness of the defendant’s past criminal conduct or the likelihood that the defendant will commit other crimes” and sentenced Flemming to 175 months in prison (115 months plus a 60 month term for one of the firearm convictions). The Third Circuit affirmed. In 2007, the Sentencing Commission issued Amendment 706, lowering by two the base offense levels for most crack-cocaine offenses. It later made the amendment retroactive. Flemming moved for a reduction of sentence under 18 U.S.C. 3582(c). The district court denied the motion. The Third Circuit affirmed. Individuals who were designated as career offenders under U.S.S.G. 4B1.1 and 3 and were granted a downward departure under 4A1.3 are not eligible for resentencing. View "United States v. Flemming" 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

Kluger and Bauer were charged as conspirators in an insider-trading scheme in which Robinson was the third participant. The conspiracy spanned 17 years and was likely the longest such scheme in U.S. history. Kluger entered a guilty plea to conspiracy to commit securities fraud; securities fraud; conspiracy to commit money laundering; and obstruction of justice, 18 U.S.C. 371, 15 U.S.C. 78j(b) and 78ff(a); 18 U.S.C. 1956(h), 18 U.S.C. 1512(c)(2), and 18 U.S.C. 2. The plea agreement did not include a stipulation as to the guidelines sentencing range. The district court imposed a 60-month term on Count I and 144-month custodial terms on each other count, all to be served concurrently, thought to be the longest insider-trading sentence ever imposed. After a separate hearing on the same day, the court sentenced Bauer to a 60-month term on Count I and 108-month terms on each other count to be served concurrently. Robinson, who was the “middleman,” in the scheme, pled guilty to three counts and was sentenced to concurrent 27-month terms. Robinson’s sentence was far below his guidelines range of 70 to 87 months but the prosecution sought a downwards departure because Robinson was cooperating in its investigation and prosecution. The Third Circuit upheld Kluger’s sentence. View "United States v. Kluger" on Justia Law

Moreno, born in Mexico in 1971, was adopted by a U.S. citizen at age nine. New Mexico issued a birth certificate, indicating a birth place of Mexico. In the 1990s, Moreno was convicted of possession with intent to distribute a controlled substance and of false imprisonment. In 2006, she was deported, after an immigration judge, the Board of Appeals, and the Fifth Circuit found that she was not a U.S. citizen. She returned to the U.S. in 2007 and obtained a passport, listing her place of birth as New Mexico. In 2008, the passport was confiscated by Border Patrol, but it was never revoked. She was released pending investigation. In 2011, DHS informed her that she was not a citizen. When she arrived in St. Thomas after a cruise, she told immigration officers that she was a U.S. citizen and presented her New Mexico driver’s license and a copy of her U.S. passport. Moreno was charged with falsely representing herself to be a citizen, 18 U.S.C. 911. On the night before trial, the government disclosed a DHS report concluding that the passport was valid but recommending investigation into her citizenship. Moreno did not accept a continuance. The district court did not admit the documents into evidence, finding that the non-exculpatory information had been previously disclosed. The court also declined to admit an FBI report, listing her citizenship as “United States,” and rejected an argument that the passport was conclusive evidence of citizenship. Moreno was sentenced to 29 months. The Third Circuit affirmed, holding that under 22 U.S.C. 2705, a passport constitutes conclusive proof of citizenship only if issued to a U.S. citizen. View "United States v. Moreno" 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

Exchange is a reciprocal insurance exchange, under 40 PA. STAT. 961. Members purchase insurance policies and receive indemnification for losses out of Exchange’s pool of funds. A 2012 Complaint alleged that Exchange is owned by subscribers and has no independent officers or governing body; that Indemnity is a public corporation that serves as Exchange’s attorney-in-fact; that Indemnity is permitted to retain up to 25% of Exchange’s premiums; that the balance of premiums is to be used for insurance losses and operational costs and may be distributed to Exchange members as dividends at Indemnity’s discretion; that members who pay premiums in installments must pay service charges and are subject to late payment and policy reinstatement fees; that, beginning in 1997, Indemnity began to retained for itself service charges paid to Exchange, which belonged to Exchange; and that, beginning in 2008, Indemnity misappropriated fees, totaling more than $300 million. The complaint was filed for Exchange by certain members and “on behalf of” all other members. Contending that the words “on behalf of” converted the case into a class action, Indemnity removed the case to federal court. The district court remanded to state court. The Third Circuit affirmed, stating that the case was brought under state rules that bear no resemblance to Rule 23 in that they allow for suits by entities, not a conglomerate of individuals, and does not meet the statutory definition of “class action.” View "Erie Ins. Exch. v. Erie Indem. Co" on Justia Law