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

After seeing an idling car, illegally parked in front of a store known for drug sales, officers waited for the driver to return, then approached the car. The driver admitted not having a driver’s license. Hester, the passenger, stated that he had a license and started to get out of the car. As he moved, an officer heard the familiar thud of a gun hitting the vehicle's floorboards. Another officer, who testified to seeing Hester drop the gun, verbally alerted the others. Hester attempted to run, but was apprehended. Officers near the vehicle confirmed the presence of a gun at the foot of the passenger’s seat. Hester was convicted as a felon in possession of a firearm following the denial of his motion to suppress. The court applied a four-level enhancement to Hester’s Guidelines range under the theory that Hester’s possession itself constituted New Jersey evidence tampering but varied downward to mitigate its effect, and sentenced Hester to 86 months’ imprisonment. The Third Circuit affirmed the denial of the motion to suppress but held that the application of the evidence tampering sentencing enhancement was erroneous. A traffic stop is a seizure of everyone in the stopped vehicle. Hester had submitted to the officers’ show of authority when he waited in the vehicle with the driver before and during questioning but there was objectively reasonable suspicion to support Hester’s seizure. View "United States v. Hester" on Justia Law

When Revel entered Chapter 11 bankruptcy, its tenant, IDEA, continued to operate nightclubs and a beach club on Revel's Atlantic City casino premises. IDEA sought to protect its right to continue operating by filing an adversary proceeding. Polo became the defendant in the proceeding (and IDEA’s landlord) when the court approved a Purchase Agreement. The Sale Order authorized Polo’s purchase of Revel’s assets “free and clear of all liens, claims, encumbrances and other interests of any kind” under 11 U.S.C. 363(f). The Order contained carve-out provisions that expressly preserved certain rights relating to IDEA’s continued use of the casino premises under the Lease. After entering the Order, the Bankruptcy Court granted Revel’s long-pending motion to reject the Lease retroactively. IDEA filed a notice of its election to retain its rights as a tenant under section 365(h), as expressly allowed by the Sale Order. In an omnibus order, the Bankruptcy Court clarified major aspects of the post-petition landlord–tenant relationship between IDEA and Polo. The Third Circuit affirmed the Bankruptcy Court and the district court. IDEA is permitted to reduce its rental obligations under a tenant-protective provision, 11 U.S.C. 365(h), the Lease, and the doctrine of equitable recoupment, regardless whether its rights arose before or after Revel filed for bankruptcy and regardless whether they arose before or after Revel rejected the Lease. View "Revel AC Inc v. IDEA Boardwalk, LLC" on Justia Law

In 2008, IMMC filed a Chapter 11 bankruptcy petition in the District of Delaware. The liquidating trustee filed an adversary proceeding, alleging that Appellees, IMMC’s former officers and directors, had breached their fiduciary duties by pursuing a risky and costly litigation strategy in an unrelated suit against a competitor, overcompensating themselves in the process. In 2011, the Bankruptcy Court held that it lacked jurisdiction to hear the adversary proceeding, rejecting arguments that the adversary proceeding was a “core” proceeding or that the adversary proceeding was a non-core proceeding “related to” a Chapter 11 case. The trustee did not appeal. The Bankruptcy Court then considered the trustee’s request to transfer the adversary proceeding to the Eastern District of Pennsylvania under 28 U.S.C. 1631 and concluded that it lacked authority to transfer the adversary proceeding. The district court and Third Circuit agreed. The Bankruptcy Court lacked authority over the claims in the adversary proceeding. Exercising jurisdiction over the adversary proceeding so as to transfer it under section 1631 would have been ultra vires, regardless of whether bankruptcy courts fall under section 610’s definition of courts as referenced in section 1631. The court noted that bankruptcy courts have limited authority. View "IMMC Corp. v. Erickson" on Justia Law

Then-New Jersey Governor Christie appointed Baroni as Deputy Executive Director of the Port Authority of New York and New Jersey. Baroni and Kelly, the Deputy Chief of Staff for New Jersey’s Office of Intergovernmental Affairs, engaged in a scheme to impose crippling gridlock on the Borough of Fort Lee after its mayor refused to endorse Christie’s 2013 reelection bid. Under the guise of conducting a “traffic study,” they conspired to limit Fort Lee motorists’ access to the George Washington Bridge (the world’s busiest bridge) over four days during the first week of the school year. Extensive media coverage of “Bridgegate” ensued. Baroni and Kelly were convicted of conspiracy to obtain by fraud, knowingly convert, or intentionally misapply property of an organization receiving federal benefits, 18 U.S.C. 371, and the substantive offense; conspiracy to commit wire fraud, section 1349, and the substantive offense; and conspiracy against civil rights, section 241, and the substantive offense. The Third Circuit affirmed the wire fraud convictions but vacated the civil rights convictions. The government presented evidence sufficient to prove defendants violated the wire fraud statute by depriving the Port Authority of, at a minimum, its money in the form of public employee labor. The court rejected an argument that Baroni possessed the unilateral authority to control Port Authority traffic patterns. There is no “clearly established” constitutional right to intrastate travel, so the defendants were entitled to qualified immunity on the civil rights claims. View "United States v. Baroni" on Justia Law

On April 21, 2004, and March 22, 2005, Defendants sent unsolicited faxes to Dr. Weitzner’s office. Weitzner filed a putative class action in Pennsylvania state court under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(C), including at least one fax sent to Weitzner. The proposed class included all individuals “who received an unsolicited facsimile advertisement from defendants between January 2, 2001[,] and the date of the resolution of this lawsuit.” In June 2008, the court denied class certification. The case continues as Weitzner's individual action. Defendants stopped sending unsolicited faxes in April 2005. In 2011, Weitzner and his professional corporation (Plaintiffs) brought individual claims based on the same faxes, plus class claims similar to those alleged in state court. The court dismissed, concluding that the four-year federal default statute of limitations, 28 U.S.C. 1658, applicable. The Third Circuit affirmed, rejecting a claim under the Supreme Court’s “American Pipe” holding that the timely filing of a class action tolls the applicable statute of limitations for putative class members until the propriety of maintaining the class is determined. American Pipe permits putative class members to file only individual claims after a denial of class certification and does not toll the limitations period for named plaintiffs like Weitzner. Any judgment in favor of Weitzner P.C. would benefit only Dr. Weitzner. Applying tolling to P.C.’s claims would effectively allow Weitzner to pursue his claims for a second time outside the limitations period. View "Weitzner v. Sanofi Pasteur, Inc." on Justia Law

Salmoran, a citizen of Mexico, was granted lawful permanent resident status in 2004. In 2015, he pled guilty to violation of New Jersey Statutes 2C:24- 4(b)(5)(b): Any person who knowingly possesses or knowingly views any photograph, film, videotape, computer program or file, video game or any other reproduction or reconstruction which depicts a child engaging in a prohibited sexual act or in the simulation of such an act, including on the Internet, is guilty of a crime of the fourth degree. DHS charged Salmoran as removable for having been convicted of: the aggravated felony crime of sexual abuse of a minor; an offense relating to child pornography; and a crime of child abuse, child neglect, or child abandonment. The BIA held that the conviction “categorically constitutes a crime of child abuse," so as to subject him to removal (8 U.S.C. 1101(a)(43)(I), 1227(a)(2)(E)(i)) but did not address whether the conviction was categorically an aggravated felony for an offense relating to child pornography, rejected Salmoran’s argument that the state statute was broader than the federal offense, and found that Salmoran was “statutorily precluded from applying for cancellation of removal. The Third Circuit remanded. The conviction qualifies as a crime of child abuse, but does not qualify as an aggravated felony relating to child pornography; while Salmoran is removable, he may still file an application for cancellation of removal. View "Salmoran v. Attorney General United States" on Justia Law

The Photographers entered into representation agreements with Corbis, a photography agency, providing Corbis authority to sub-license their works to third parties on a non-exclusive, fixed-duration basis. The agreements include forum selection clauses and give Corbis sole authority to make and settle claims for unauthorized use of images. If Corbis declines to bring such a claim within 60 days, the Photographers may bring actions. Corbis sub-licensed their photographs to McGraw-Hill. The invoices included the name of the photographer responsible for the work and incorporated Corbis’ standard “Terms and Conditions,” which included mandatory, exclusive forum selection clauses. The Photographers each brought a copyright action against McGraw-Hill in the Eastern District of Pennsylvania. McGraw-Hill moved to transfer venue under 28 U.S.C. 1404(a), arguing that the disputes implicate the Corbis–McGraw-Hill agreements, under which the proper venue was the Southern District of New York. One judge denied the motion, reasoning that the claims are based purely on copyright law, so the action is not a “dispute regarding th[e] Agreement[s],” and not subject to the forum selection clauses. Another judge reasoned that the copyright claims depend upon the interpretation of the Corbis–McGraw-Hill agreements so that the photographer was subject to the forum selection clause as an intended third-party beneficiary. In consolidated actions, the Third Circuit concluded that the photographers are not bound because they are not intended beneficiaries of the agreements, nor are they closely related parties. Because the erring district court’s mistakes were not clear or indisputable, the court declined to grant mandamus relief. View "In re: McGraw-Hill Global Education Holdings, LLC" on Justia Law

Favero’s car struck Alpizar-Fallas's car, causing Alpizar-Fallas serious injuries. Both drivers were insured by Progressive. The next day, Barbosa, a Progressive claims adjuster, went to Alpizar-Fallas's home to inspect her car and have her sign “paperwork” that would “expedite the processing of the property damage claim.” Alpizar-Fallas alleges that he stated that her signature was “necessary” for Progressive to advance her payment. Alpizar-Fallas signed the document. The document was actually a broadly written comprehensive general release of all claims. Barbosa failed to advise Alpizar-Fallas to seek legal counsel and did not communicate with her in Spanish, her native language. Alpizar-Fallas sought damages for the personal injuries she sustained in the accident and amended her complaint to include a class action claim against Progressive and Barbosa under the New Jersey Unfair Claims Settlement Practices Regulations (UCSPR) and the Consumer Fraud Act (CFA). The district court dismissed Alpizar-Fallas’s class action claim to the extent it alleged a violation of the UCSPR because those regulations do not provide a private right of action, then dismissed Alpizar-Fallas’s CFA claim, as a claim for denial of insurance benefits, and construing the CFA to only apply to the “sale or marketing” of insurance policies. The Third Circuit vacated, finding that Alpizar-Fallas’s complaint alleged deception that would be covered by the CFA. View "Alpizar-Fallas v. Favero" on Justia Law

Former shareholders alleged that Altisource and several of its officers (collectively AAMC) inflated the price of its stock through false and misleading statements. When these mistruths were revealed to the market, they claimed, the price of AAMC’s stock plummeted, costing shareholders billions of dollars. The district court dismissed the complaint, concluding that Plaintiffs failed to satisfy the requirements of the Private Securities Litigation Reform Act (PSLRA), 15 U.S.C. 78u– 4. The Third Circuit affirmed. Plaintiffs failed to adequately plead three elements of a Rule 10b-5 claim: a material misrepresentation (or omission), scienter, and loss causation, with “particularity” as required by PSLRA. The economic harm suffered by AAMC’s investors is "regrettable," but plaintiffs failed to plausibly allege that this harm arose from fraud. When a stock experiences the rapid rise and fall that occurred here, it will not usually prove difficult to mine from the economic wreckage a few discrepancies in the now-deflated company’s records. View "City of Cambridge Retirement System v. Altisource Asset Management Corp." on Justia Law

In 2008, the U.S. government strove to rescue the collapsing economy, including by enacting the Housing and Economic Recovery Act, which authorized the government to act as conservator for Fannie Mae and Freddie Mac, government-sponsored enterprises with critical roles in the home mortgage market. Under that conservatorship, Fannie and Freddie made a deal with the Department of Treasury, guaranteeing those agencies access to hundreds of billions of dollars; they had to give their net profits to the Treasury—in perpetuity. Fannie’s and Freddie’s junior shareholders had expected to share in those future profits. The agreement wiped out that expectation. The Third Circuit rejected challenges by those junior shareholders. The Recovery Act gave the government broad, discretionary power to enter into the deal and the deal complies with the requirements of the Act, as well as Delaware and Virginia corporate law. In addition, the relief sought would “restrain or affect the exercise of [the government’s] powers” as conservator, which the Recovery Act forbids, 12 U.S.C. 4617(f). View "Jacobs v. Federal Housing Finance Agency" on Justia Law