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

The case involves Gerald Forsythe, who filed a class action lawsuit against Teva Pharmaceuticals Industries Ltd. and several of its officers. Forsythe claimed that he and others who purchased or acquired Teva securities between October 29, 2015, and August 18, 2020, suffered damages due to misstatements and omissions by Teva and its officers related to Copaxone, a drug used to treat multiple sclerosis. Teva's shares are dual listed on the New York Stock Exchange and the Tel Aviv Stock Exchange.The District Court granted Forsythe's motion for class certification, rejecting Teva's assertion that the class definition should exclude purchasers of ordinary shares. The Court also rejected Teva's argument that Forsythe could not satisfy Rule 23(b)(3)’s predominance requirement.Teva sought permission to appeal the District Court’s Order granting class certification, arguing that interlocutory review is proper under Federal Rule of Civil Procedure 23(f). Teva contended that the Petition presents a novel legal issue and that the District Court erred in its predominance analysis with respect to Forsythe’s proposed class-wide damages methodology.The United States Court of Appeals for the Third Circuit denied Teva's petition for permission to appeal. The court found that the securities issue did not directly relate to the requirements for class certification, and agreed with the District Court’s predominance analysis. The court also clarified that permission to appeal should be granted where the certification decision itself under Rule 23(a) and (b) turns on a novel or unsettled question of law, not simply where the merits of a particular case may turn on such a question. View "Forsythe v. Teva Pharmaceutical Industries Ltd" on Justia Law

The case revolves around a local ordinance in the Borough of Camp Hill that regulates the display of signs on private property. The ordinance categorizes signs into about twenty different types, each with its own set of restrictions. Two residents, Katherine Pearson and Caroline Machiraju, displayed political signs on their lawns in the lead-up to the 2022 midterm elections. However, they were told to remove their signs as they violated the local sign ordinance. The ordinance categorized their signs as "Temporary Signs" and further classified them as "Personal Expression Signs," which express a non-commercial message. The ordinance limited the number of such signs a resident could display and the time frame within which they could be displayed.The residents complied with the directive but subsequently sued Camp Hill, challenging the provisions of the ordinance under the First Amendment. The United States District Court for the Middle District of Pennsylvania granted them summary judgment on their facial challenge, ruling that the provisions were content-based and failed strict scrutiny.The United States Court of Appeals for the Third Circuit affirmed the District Court's decision. The Court of Appeals found that the ordinance was content-based as it classified signs based on their content, favoring commercial expression over noncommercial and holiday messages over non-holiday messages. The court held that such content-based restrictions could only stand if they furthered a compelling government interest and were narrowly tailored to achieve that interest. The court found that Camp Hill's interests in traffic safety and aesthetics, while legitimate, were not compelling and that the ordinance was not narrowly tailored to serve those interests. The court concluded that the ordinance was unconstitutional on its face. View "Camp Hill Borough Republican Association v. Borough of Camp HIll" on Justia Law

The case involves the Government Employees Insurance Company (GEICO) and its affiliates, who sued several medical practices in separate actions in the District of New Jersey. GEICO alleged that the practices defrauded them of more than $10 million by abusing the personal injury protection (PIP) benefits offered by its auto policies. The practices allegedly filed exaggerated claims for medical services, billed medically unnecessary care, and engaged in illegal kickback schemes. GEICO's suits against the practices each included a claim under the New Jersey’s Insurance Fraud Prevention Act (IFPA).The practices sought arbitration of GEICO’s IFPA claim, arguing that a valid arbitration agreement covered the claim and that a different New Jersey insurance law allowed them to compel arbitration. However, each District Court disagreed, ruling instead that IFPA claims cannot be arbitrated. The practices appealed to the United States Court of Appeals for the Third Circuit.The Third Circuit Court of Appeals reversed the lower courts' decisions, holding that claims under the IFPA are arbitrable. The court found that GEICO's argument that the IFPA implicitly prohibits arbitration was not persuasive. The court also concluded that GEICO’s IFPA claims must be compelled to arbitration under the Federal Arbitration Act (FAA), as the claims fell under the scope of the arbitration agreement in GEICO's Precertification and Decision Point Review Plan. The court remanded the case with instructions to compel arbitration of GEICO’s IFPA claims against the practices. View "GEICO v. Caring Pain Management PC" on Justia Law

The case revolves around Victor Cora-Alicea, who was involved in a drug trafficking operation led by Ramone Velazquez. Cora-Alicea, who had no supervisory responsibilities and was merely tasked with bagging drugs, was arrested and pleaded guilty to violations of drug trafficking laws. His sentencing was calculated based on a base offense level of 31, with reductions for his safety-valve eligibility, minor role, and acceptance of responsibility, resulting in a total offense level of 24. His criminal history category I was based on a nonexistent criminal record. The District Court set his Guidelines range at 51–63 months. Cora-Alicea requested a mitigation-based variance from the range, arguing that his life history, personal characteristics, and an anticipated change to the Guidelines for people with zero criminal history points justified a variance to approximately 24 months’ imprisonment.The District Court sentenced Cora-Alicea to 45 months on each count, to be served concurrently, followed by a total of three years on supervised release. The court took into consideration his zero-point status but ignored Cora-Alicea’s other bases for a variance. Cora-Alicea appealed the District Court’s judgment, arguing that the court procedurally erred at sentencing by dismissing the majority of his personal mitigation evidence offered in support of a variance under 18 U.S.C. § 3553(a) on the ground that it was “already taken into account” by the downward adjustments under the Guidelines.The United States Court of Appeals for the Third Circuit found that the District Court had erred in its interpretation of the Guidelines. The court noted that the safety-valve provision, minor-role, and acceptance-of-responsibility adjustments considered in Cora-Alicea’s sentencing had nothing to do with the myriad of mitigating circumstances he raised under § 3553(a). The court concluded that the District Court's erroneous legal conclusion preempted any weighing of the mitigation evidence against the Guidelines range or the other sentencing factors. As a result, the court vacated Cora-Alicea’s sentence and remanded his case to the District Court for resentencing. View "USA v. Cora-Alicea" on Justia Law

The case involves a shareholder derivative action against Cognizant Technology Solutions Corporation and its board of directors. The plaintiffs, shareholders of Cognizant, alleged that the directors breached their fiduciary duties, engaged in corporate waste, and unjust enrichment. The allegations stemmed from a bribery scheme in India, where Cognizant employees allegedly paid bribes to secure construction-related permits and licenses. The plaintiffs claimed that the directors ignored red flags about the company's anti-corruption controls and concealed their concerns from shareholders.The case was initially dismissed by the United States District Court for the District of New Jersey, which held that the plaintiffs failed to state with particularity the reasons why making a demand on the board of directors would have been futile. The plaintiffs appealed this decision to the United States Court of Appeals for the Third Circuit.The Third Circuit, sitting en banc, reconsidered the standard of review for dismissals of shareholder derivative actions for failure to plead demand futility. The court decided to abandon its previous standard of review, which was for an abuse of discretion, and adopted a de novo standard of review. Applying this new standard, the court affirmed the District Court's dismissal of the case. The court found that the plaintiffs failed to show that a majority of the directors faced a substantial likelihood of liability or lacked independence, which would have excused the requirement to make a demand on the board. View "In re: COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION DERIVATIVE LITIGATION" on Justia Law

The case involves a dispute over the Environmental Protection Agency's (EPA) decision to implement a Federal Implementation Plan (FIP) to regulate emissions in Pennsylvania. The Commonwealth of Pennsylvania had initially submitted a State Implementation Plan (SIP) to the EPA for approval, as required by the Clean Air Act. The EPA initially approved the plan, but the approval was later vacated by the Third Circuit Court of Appeals, which directed the EPA to either approve a new state-made plan or formulate a new federal plan within two years. The EPA decided to create its own plan, which was challenged by the Commonwealth and one of the three coal power companies affected by the plan.The petitioners argued that the EPA exceeded its statutory authority when it promulgated the plan and that the plan was arbitrary and capricious because the EPA failed to show its work. However, the Third Circuit Court of Appeals found that the EPA acted in accordance with the Clean Air Act and denied the petition for review. The court held that the EPA properly exercised its authority under the Clean Air Act by partially disapproving the 2016 SIP and promulgating the FIP. The court also held that the contents of the FIP were not arbitrary, capricious, or an abuse of the EPA’s discretion. View "Keystone-Conemaugh Projects LLC v. EPA" on Justia Law

The case involves Qing Qin, a Chinese software architect who alleges that he was denied a promotion and wrongfully terminated from his position at Vertex, Inc. based on his race and national origin. He also claims that he was retaliated against for complaining about the alleged discrimination and that he was subjected to a hostile work environment. The District Court granted summary judgment in favor of Vertex on all claims.The case was reviewed by the United States Court of Appeals for the Third Circuit. The court agreed with the District Court that Qin did not present evidence to demonstrate a sufficiently severe and pervasive hostile work environment. However, the court found that Qin presented evidence that would give rise to an inference of discrimination and presented comparator evidence that would allow a reasonable jury to determine Vertex’s reasons for denying promotion and termination were pretextual. The court also found that the evidence and timeline of his protected activity are sufficient to find causation on his retaliation claims under their precedent.Therefore, the court affirmed the District Court’s grant of summary judgment in favor of Vertex on Qin’s hostile work environment claim but vacated the District Court’s order on his discrimination and retaliation claims. The case was remanded for further proceedings consistent with the opinion of the Court of Appeals. View "Qing Qin v. Vertex Inc" on Justia Law

Paul Montemuro was elected as the President of the Jim Thorpe Area School Board. However, a week later, the Board elected someone else without giving Montemuro any prior notice. Montemuro sued the Board members who voted against him and the Jim Thorpe Area School District, alleging that they had deprived him of his property without due process, in violation of 42 U.S.C. § 1983 and the Fourteenth Amendment. The defendants claimed qualified immunity.The District Court held that Montemuro had a clearly established property right in his employment and had been deprived of that right without due process. The defendants appealed this decision, arguing that they were entitled to qualified immunity.The United States Court of Appeals for the Third Circuit affirmed the District Court's decision. The Court found that Pennsylvania law clearly established that Montemuro had a property interest in his job as the Board President. The Court also accepted Montemuro's allegation that he was removed from office without notice. Therefore, the Court concluded that the defendants were not entitled to qualified immunity because they had violated Montemuro's clearly established right to due process. View "Montemuro v. Jim Thorpe Area School District" on Justia Law

A motor vehicle manufacturer, General Motors LLC (GM), sought to terminate its franchise agreement with Mall Chevrolet, Inc., a successful car dealership in New Jersey, after discovering that the dealership had submitted false warranty claims for vehicle repairs. GM also intended to recoup the amounts it paid in disputed warranty claims through a chargeback process. In response, Mall Chevrolet sued GM under the New Jersey Franchise Practices Act to prevent the termination of the franchise agreement and the chargebacks. However, the dealership's claims did not survive summary judgment.The District Court found that there was no genuine dispute of material fact – the dealership did submit false claims for warranty repairs – and GM was entitled to judgment as a matter of law on each of the appealed claims. The dealership then appealed the District Court’s summary-judgment rulings.The United States Court of Appeals for the Third Circuit affirmed the judgment of the District Court. The court found that GM had good cause to terminate the franchise agreement because Mall Chevrolet had materially breached the contract by submitting false claims for warranty work. The court also found that the dealership's remaining statutory claims were barred by the defense provided in the New Jersey Franchise Practices Act, which allows a franchisor to avoid liability for any claim under the Act if the franchisee has not substantially complied with the franchise agreement. View "Mall Chevrolet Inc v. General Motors LLC" on Justia Law

The case revolves around a dispute between Sanofi-Aventis U.S. LLC and Mallinckrodt PLC. Sanofi sold its rights in a drug to Mallinckrodt for $100,000 and a perpetual annual royalty. The drug was successful, but Mallinckrodt filed for bankruptcy and sought to convert Sanofi's right to royalties into an unsecured claim. Mallinckrodt aimed to discharge all future royalty payments and continue selling the drug without paying royalties, leaving Sanofi with only an unsecured claim.The bankruptcy court approved Mallinckrodt's discharge, ruling that since Sanofi had fully transferred ownership years ago, the contract was not executory. It also held that Sanofi's remaining contractual right to future royalties was an unsecured, contingent claim, which Mallinckrodt could discharge. The District Court affirmed these rulings.The United States Court of Appeals for the Third Circuit reviewed these rulings de novo. The court held that Sanofi's right to payment arose before Mallinckrodt filed for bankruptcy, making its royalties dischargeable in bankruptcy. The court rejected Sanofi's argument that the future royalties were too indefinite to be a claim, stating that the Bankruptcy Code allows for claims that are both contingent and unliquidated. The court also disagreed with Sanofi's assertion that bankruptcy cannot resolve its royalties claim because it will not exist until Mallinckrodt hits the sales trigger each year. The court ruled that a claim can arise before it is triggered, and most contract claims arise when the parties sign the contract. The court affirmed the lower courts' decisions, ruling that Sanofi's contingent claim arose before Mallinckrodt went bankrupt and is therefore dischargeable in bankruptcy. View "In re Mallinckrodt PLC" on Justia Law