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

In 1957 the Commonwealth constructed the Quehanna Wild Area Nuclear Site. Part of the site was donated to Pennsylvania State University. Until 1967 Penn State leased to a Lockheed predecessor, conducting work under Atomic Energy Commission contracts, involving Strontium-90, a radioactive isotope. The predecessor partially decontaminated. According to Lockheed, the Commonwealth was aware that Strontium-90 remained and could not be removed without dismantling the facility. In the 1990s, the Nuclear Regulatory Commission ordered the Commonwealth, the Pennsylvania Department of Environmental Protection, and the Department of Conservation and Natural Resources to decommission the facility. This cost more than $20 million. PADEP sued Lockheed under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9607(a). Lockheed defended that the Commonwealth should recover less than its demand based on its own conduct and liability and the doctrines of unclean hands, estoppel, waiver, and laches. Lockheed also alleged that PADEP was liable under CERCLA as an owner-operator and as having arranged for or transported hazardous substances. The district court dismissed Lockheed’s third-party complaint, concluding that the Commonwealth and DCNR retained Eleventh Amendment immunity when PADEP filed a federal suit. The Third Circuit vacated with instructions to dismiss the third party complaint as moot, based on the sufficiency of Lockheed’s affirmative defenses. View "Commonwealth of PA Dep' of Envtl. Prot. v. Lockheed Martin Corp." on Justia Law

Andrews was designated as contractor for improvements to the sewage system, in a no-bid process involving kickbacks and bribery, having made numerous false statements in the bond application package. After the contract was terminated, he submitted a claim of $748,304, based on false statements and duplicate charges. Evidence indicated that Andrews was not capable of the project work and that the entire scheme was fraudulent. He was convicted of one count of conspiracy, 18 U.S.C. 371, four counts of wire fraud, 18 U.S.C. 1343, 1346, and 2, one count of program fraud, 18 U.S.C. 666(a)(1)(B) and 2, one count of making a false claim upon the Government of the Virgin Islands, 14 V.I.C. 843(4), and one count of inducing a conflict of interest, 3 V.I.C. 1102, 1103, and 1107. The Third Circuit affirmed the conviction, but remanded for resentencing. Errors in the indictment and jury instructions concerning honest services fraud did not affect substantial rights. Although the 151-month term of imprisonment was within the statutory maximum for Counts Two through Five, it exceeded the statutory maximum for Counts One and Six; it was not possible to determine whether the sentence was legal as to each count View "United States v. Andrew" on Justia Law

In 2007, two groups filed separate class action suits against Volkswagen. The cases were consolidated for pre-trial purposes because they raised substantially similar allegations: that several models of Volkswagen and Audi automobiles had defectively designed sunroofs that, when clogged by plant debris and pollen, allowed water to leak into the vehicle. While leakage could be prevented through regular cleaning and maintenance, Volkswagen allegedly failed to inform car owners of these preventive measures because such a disclosure would acknowledge a design defect, and would likely obligate Volkswagen to cover any resulting damage under their warranty program. The parties reached a settlement, under which a "reimbursement group" received the right to reimbursement for certain qualifying damages, paid from an $8 million fund. "Residual group" member were required to wait until the reimbursement group made its claims. The court certified a single class. The Third Circuit reversed, agreeing with objectors that the representative plaintiffs, all members of the reimbursement group, cannot adequately represent the interests of the class members in the residual group; the certification violated FRCP 23(a)(4). View "Dewey v. Volkswagen " on Justia Law

Following a controlled-buy involving a confidential informant, Haziz was charged with distribution of five grams or more of cocaine base, 21 U.S.C. 841(a)(1) and distribution of cocaine base within 1,000 feet of a public housing facility, 21 U.S.C. 860(a). He waived conflict for representation by a firm representing a co-defendant. When he withdrew consent, a new attorney was appointed. At trial, the judge denied a motion for a mistrial that was based on witness statements that Haziz was in jail, but used a cautionary instruction. After the jury was dismissed, an alternate juror told a deputy that jurors had stated that they went along with the verdict although they did not necessarily agree with it. The court informed counsel, but denied a motion to interview the alternate juror. Haziz was sentenced to 120 months. The Third Circuit affirmed the convictions, rejecting arguments based on disqualification of first defense counsel; denial of a mistrial; denial of the request to interview the alternate juror; refusal to adopt a “mitigating role” adjustment in sentencing; and the total weight of the drugs involved. The court vacated the sentence; the Fair Sentencing Act of 2010 applies and Haziz is not subject to a mandatory minimum sentence. View "United States v. Self" on Justia Law

ABC is a dissolved corporation. Doe 1 was the company’s President and sole shareholder. Doe 2 is his son. LaCheen represents ABC and Doe 1; Blank represents Doe 2. The law firms have a joint-defense agreement covering the three. Investigating tax implications of ABC’s acquisition and sale of closely held companies, the government issued a grand jury subpoena to ABC’s former vice president as custodian of records. The documents are in custody of Blank. ABC refused to accept service of the subpoena issued to its former employee. The government issued subpoenas to LaCheen and Blank. The firms withheld documents listed on a privilege log. The government sought to compel ABC, Blank, and LaCheen to produce documents identified on the privilege logs, citing cited the crime-fraud doctrine, which provides that evidentiary privileges may not be used to shield communications made for purposes of getting advice for commission of a fraud or crime. The district court entered the order. The Third Circuit dismissed for lack of appellate jurisdiction. To obtain immediate appellate review, a privilege holder must disobey the order, be held in contempt, then appeal the contempt order. That route is available to ABC, which can obtain custody of the documents from its agent. View "In Re: Grand Jury" on Justia Law

Barnabas rented a van from Budget and gave Dewindt permission to use it without listing her as an authorized driver on the rental agreement. Dewindt was driving down a steep hill when the brakes failed. Dewindt attempted to stop by driving onto an uphill driveway. The van crashed into a tree, injuring the passengers. Barnabas was not in the van. The district court entered summary judgment for Budget. The Third Circuit reversed and remanded on claims of strict liability, breach of warranty, and loss of consortium. The district court erroneously relied on cases decided under the Second Restatement of Torts which does not recognize strict liability claims against lessorss. Strict liability under the Third Restatement would reach Budget as lessor/distributor of the allegedly defective van. The Third Circuit had certified the question and the Supreme Court of the Virgin Islands responded that Virgin Islands local courts should apply sections 1 and 20 of the Third Restatement and allow lessors to be held strictly liable for injuries resulting from a defective product. The district court should also determine whether plaintiffs may rely on warranties in the rental agreement with Budget. View "Banks v. Int'l Rental & Leasing Corp." on Justia Law

Plaintiffs installed shingles manufactured by Owens Corning (debtor). They discovered leaks in 2009; shingles had cracked. Each sent warranty claims, which were rejected. They filed a class action alleging fraud, negligence, strict liability, and breach of warranty. In 2000, the debtors had filed Chapter 11 bankruptcy petitions; the Bankruptcy Court set a claims bar date in 2002 and approved a notice that appeared in multiple publications. Notices of the confirmation hearing for the Plan, in 2006, included generic notice to unknown claimants. At the time they filed the class action plaintiffs did not hold “claims” under 11 U.S.C. 1101. The Third Circuit subsequently established a rule that a claim arises when an individual is exposed pre-petition to a product or other conduct giving rise to an injury, which underlies a right to payment under the Bankruptcy Code. Based on that holding, the district court held that plaintiffs’ claims were discharged. The Third Circuit affirmed in part and remanded, agreeing that plaintiffs had “claims.” Both were “exposed” to the product before confirmation of the plan. Plaintiffs were not afforded due process by published notice, however, because they could not have known they had claims at the time of confirmation. View "Wright v. Owens Corning" on Justia Law

Rolan was convicted in 1984 of murder and possession of an instrument of crime for a 1983 shooting death involving a drug sale. He obtained habeas corpus relief based on ineffective assistance of counsel. After a retrial, the jury convicted Rolan of murder again. After exhausting appeals, he again sought habeas corpus. The district court denied the petition. The Third Circuit affirmed, rejecting a claim of prosecutorial misconduct that was based on closing argument statements about the reliability of an alibi witness. The court properly allowed reading of a transcript of testimony by a witness, who died before retrial. View "Rolan v. Coleman" on Justia Law

E.R., now 10 years old, attended kindergarten and first grade at a public school. E.R. has been identified as having numerous learning disabilities, and health-related problems, including severe food and contact allergies. During the summer after first grade, her parents determined that programs offered by the district were inadequate to address E.R.'s unique needs, and decided to enroll her at a private school that specializes in instructing students with learning disabilities. They filed a complaint with the Pennsylvania Department of Education, seeking compensatory education for violations of the Individuals with Disabilities Education Act, 20 U.S.C. 1400 and the Rehabilitation Act, 29 U.S.C. 701, and tuition reimbursement, including transportation expenses. A hearing officer awarded compensatory education for the 2007-2008 school year, reimbursement of tuition for the 2008-2009 school year, and reimbursement for transportation. The district court reversed and the Third Circuit affirmed. The district took reasonable steps to accommodate E.R.'s disabilities and include her in all class activities; it was not required to grant the specific accommodations requested by her parents or otherwise make substantial modifications to the programs that were used for all other students. View "Ridley Sch. Dist. v. M.R." on Justia Law

While working as a dentist, Fleisher obtained long-term disability insurance coverage under separate policies. He obtained the North American policy by membership in a professional organization. The Standard policy is an employee benefit, governed by the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B) and provides for monthly benefits to a maximum of "$10,000 before reduction by Deductible Income," defined to include "[a]ny amount you receive or are eligible to receive because of your disability under another group insurance coverage," but to exclude benefits paid under "any individual disability insurance policy." In 2008, Fleisher became disabled and claimed benefits under both policies. Shortly after Fleisher began collecting under both policies, Standard reduced his monthly benefits from $10,000 to $8,500 based on its determination that the North American policy was another group insurance coverage, and that the $1,500 in benefits he receives under it is deductible income. The district court dismissed his ERISA suit. The Third Circuit affirmed, finding the decision supported by substantial evidence and not unreasonable. View "Fleisher v. Std. Ins. Co." on Justia Law