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

Plaintiffs, a putative nationwide class of third-party payors and a putative nationwide class of individual patient-consumers who paid for prescriptions, sued pharmaceutical manufacturers alleging that they paid for oncology and hepatitis drugs that were ineffective or unsafe for the off-label uses for which they were prescribed and that defendants pursued illegal marketing campaigns to persuade physicians to prescribe the drugs for those uses. While physicians are not prohibited from prescribing drugs for off-label uses, manufacturers are generally prohibited by the Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301, from manufacturing, marketing, or selling for off-label use. Defendant had pled guilty to a criminal charge brought by the FDA and agreed to pay fine of $180 million and to pay $255 million to resolve civil claims that it defrauded Medicare, Medicaid, and the VA. The district court dismissed, for lack of standing, claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961, the New Jersey RICO statute, N.J.S. 2C:41-1, and other state statutory and common law causes of action. The Third Circuit affirmed, finding that plaintiffs failed to establish a causal connection between the alleged misconduct and the alleged harm. View "In Re: Schering Plough Corp." on Justia Law

Debtors began development of a subdivision and entered into a construction loan agreement with Bank Lenders, who retained a lien on substantially all of Debtors' assets. Debtors subsequently borrowed from Cornerstone, which similarly received liens and later agreed to subordinate the claims to that of Bank Lenders. After selling approximately a quarter of the planned units, Debtors filed petitions for relief under Chapter 11. The final plan of reorganization, confirmed by the court, specified that claims of Cornerstone would be secured to the extent determined by the court and included a budget that anticipated full payment of both Bank Lenders and Cornerstone; unsecured claimants would receive about 45 percent. The court valued Cornerstone's claims, using fair market value of the project on the plan confirmation date, rather than potential use and disposition value. Because the amount due Bank Lenders exceeded that value plus the value of other assets, no collateral remained to secure Cornerstone's claims; Cornerstone was treated as unsecured. The district court and Third Circuit affirmed. The Bankruptcy Court properly accepted the valuation because it overcame the presumed validity and amount of the Cornerstone’s secured claims. Cornerstone did not prove that secured claims were worth more than the valuation indicated. View "In re: Heritage Highgate Inc." on Justia Law

In 1993 Simon and others burglarized a house; the occupant arrived during the burglary and was shot dead. Simon was tried for felony murder, first degree robbery, and third degree burglary. Simon repeatedly moved to dismiss his appointed defender, Ayala. Ayala moved to withdraw claiming that Simon was hostile and was planning to claim ineffective assistance of counsel. The court declined. Ayala did not give an opening statement, call witnesses, or object to closure of the courtroom during closing arguments and jury instructions. Simon was convicted and sentenced to life imprisonment without parole. His direct appeals were unsuccessful. Another participant, who testified against Simon, had his sentence reduced for his assistance. Virgin Islands court rejected a petition for habeas corpus and, on appeal, Simon's attorney filed an Anders motion to withdraw. The motion was granted and the petition was ultimately denied. The Third Circuit vacated, first rejecting a challenge to its jurisdiction. The Appellate Division did not err in applying Anders procedures to assess motions filed by court-appointed counsel to withdraw on post-conviction appeal, but erred in finding the Anders brief sufficient on its face. There were nonfrivolous issues that should be reviewed on the merits. View "Simon v. Gov't of the VI" on Justia Law

A Trustee was appointed in a Chapter 7 bankruptcy. The estate included 44 lots, subdivided and zoned for mobile homes. Lot 45 contained an assisted living facility. The lots shared infrastructure and were subject to restrictions, including one prohibiting transfer of lots for construction of residences and requiring that title remain in the developer. GCL purchased Lot 45. The township solicitor agreed and the Bankruptcy Court declared the sale free of the restriction. The Trustee discovered that some residents had affixed mobile homes to the land. To resolve the matter, the Trustee agreed to sell lots to the residents. The trustee and the township entered agreement, abrogating the restriction as to the lots. CGL, not a party to that agreement, alleged that the sales damaged its property interests in Lot 45 and that the agreement deprived CGL of its property rights without notice and without due process of law. The Bankruptcy Court concluded that the claims were not frivolous and could be filed in state court. The district court and Third Circuit affirmed. The Barton doctrine, which requires a party seeking to sue a court-appointed receiver, to obtain leave of the appointing court, continues to apply to bankruptcy trustees.View "In Re: VistaCare Group, L.L.C." on Justia Law

The company and its affiliates filed for Chapter 11 bankruptcy and sought to resolve asbestos-related liability through the creation of a personal-injury trust under 11 U.S.C. 524(g). As part of its reorganization plan, it sought to transfer rights under insurance liability policies to the trust. The Insurers had provided liability policies to the debtors prior to bankruptcy and objected that the transfer violated the policies' anti-assignment provisions. The bankruptcy and district courts held that 11 U.S.C. 1123(a)(5)(B) preempts those provisions. The Third Circuit affirmed. Section 524 trusts are the only national statutory scheme available to resolve asbestos litigation through a quasi-administrative process. The plain language of 11 U.S.C. 1123(a) evinces clear intent for a preemptive scope that includes transfer of property to a 524 trust; that preemption reaches private contracts enforced by state common law. View "In Re: Fed-Mogul Global, Inc." on Justia Law

Defendant pleaded guilty to two counts of bank robbery, 18 U.S.C. 2113(a). Based on prior Pennsylvania convictions for simple assault and third-degree murder, the presentence report recommended that he be sentenced as a career offender under USSG 4B1.1. The district court agreed and imposed a sentence of 96 months. The Third Circuit affirmed. Defendant’s attempt to drag his wife up the stairs with his hands around her neck qualified as a crime of violence, as did his kicking a man to death after an attempt to buy drugs. View "United States v. Marrero" on Justia Law

Defendants owned an engineering and surveying company. Between 2002 and 2008, it failed to pay the IRS more than $500,000 in taxes withheld from employee paychecks. They were convicted of conspiracy to defraud the United States, 18 U.S.C. 371, and 21 counts of failure to account and pay over employment taxes, 26 U.S.C. 7202. The Third Circuit affirmed the convictions, rejecting claims of evidentiary errors, but remanded for resentencing. The district court erred in imposing a two-level increase to the offense levels for abuse of a position of trust, pursuant to U.S.S.G. 3B1.3.View "United States v. DeMuro" on Justia Law

A psychologist challenged the government's claim that he had over-billed Medicare and owed the government more than $600,000 in overpayments. At a hearing on the claim, the doctor presented extensive evidence, but the government neither appeared nor presented argument or advocacy, either written or in person. The ALJ concluded that the overpayment was actually $5,434.48. The doctor moved, under the Equal Access to Justice Act, 5 U.S.C. 504(a)(1), to recoup tens of thousands of dollars in attorneys' fees and expenses incurred in fighting the claim. His request was denied by an administrative appeals council and the district court based on their conclusion that the hearing before the ALJ was not an adversary adjudication, as is required for a fee award under the EAJA. The Third Circuit affirmed denial, finding that the government did not engage in purposeful advocacy.View "Handron v. Sec'y of Health & Human Servs." on Justia Law

An ATF agent noticed that his barber carried guns and that the shop was used for illegal activities. Learning that his barber had felony convictions, the agent purchased weapons from the barber, obtained warrants, searched the shop and arrested the barber, which led to indictment of Turner. Turner was convicted of conspiring to make false statements to a firearms dealer, 18 U.S.C. 371, 924(a)(1)(A), knowingly aiding and abetting in making false statements to a firearms dealer, 18 U.S.C. 924(a)(1)(A), (2), and knowingly possessing a firearm after being convicted of a felony, 18 U.S.C. 922(g)(1), 924(e), and sentenced to 190 months. On appeal, Turner‘s newly-appointed counsel filed a "quasi- Anders brief," raising a combination of colorable and frivolous arguments. The Third Circuit affirmed the conviction, clarifying that, except in cases governed by Anders, parties represented by counsel may not file pro se briefs. When such briefs are filed the clerk will refer them to putative pro se litigant's counsel. Counsel may include a client's pro se arguments in their own briefs or, in an appropriate and unusual case, seek leave to file a separate, supplemental brief drafted by counsel that advances arguments raised by the client that counsel believes are meritorious. View "United States v. Turner" on Justia Law

After police conducted a controlled buy, through a confidential informant, defendant was convicted of cocaine distribution and possession of cocaine with intent to distribute, 21 U.S.C. 841(a)(1) and (b)(1)(C); using and carrying a firearm during a drug-trafficking offense, 18 U.S.C. 924(c)(1); and possession of a firearm by a convicted felon, 18 U.S.C. 922(g)(1) and sentenced to 120 months' imprisonment. The Third Circuit affirmed, rejecting a challenge to sufficiency of the evidence and an argument that the district court violated defendant's constitutional rights and Federal Rule of Criminal Procedure 43 by questioning prospective jurors on the record, at sidebar outside his presence. The court properly denied his motion to disclose the identity of the confidential informant and properly imposed an upward variance. View "United States v. Johnson" on Justia Law