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

The defendants ran an Atlantic City heroin trafficking organization. For more than two years, law enforcement documented its crimes. Bailey, Davis, Macon, and Venable were among 34 people charged with drug-trafficking offenses. A jury convicted them of conspiracy to distribute and possess with intent to distribute heroin within 1,000 feet of a public housing complex, 21 U.S.C. 846, 21 U.S.C. 841(a)(1) & (b)(1)(A), and 21 U.S.C. 860, use or possession of a firearm in furtherance of that drug trafficking offense, 21 U.S.C. 924(c)(1)(A)(i), (ii), (iii) and 18 U.S.C. 2, and use of a communication facility to further a drug conspiracy, 21 U.S.C. 843(b). Davis was also convicted of possession of a firearm as a felon, 18 U.S.C. 922(g)(1). The Third Circuit affirmed, rejecting arguments that the evidence was insufficient to support the convictions and that the court should have suppressed the government’s wiretapping evidence. While the court violated Federal Rules of Evidence 404(b) and 403 by admitting certain evidence regarding a drug-trafficking-related murder and a drug-trafficking-related assault, given the overwhelming amount of other evidence, the error was harmless. The court also rejected Bailey’s claim that the court erred in admitting evidence of his past convictions for possession of cocaine with intent to distribute and possession of a firearm. View "United States v. Bailey" on Justia Law

Hargus and others rented F&I's 26-foot ship, One Love, to travel throughout the U.S. Virgin Islands. F&I had hired Coleman as a captain. At Cruz Bay, Coleman anchored close to the shore. Most of the passengers disembarked. Later, members of the group, standing on the beach approximately 25 feet away from the boat, threw beer cans at Hargus while he was standing on the One Love’s deck. Coleman threw an empty insulated plastic coffee cup that hit Hargus on the side of his head. Hargus did not lose consciousness, nor complain of any injury. One Love resumed its journey. Days later, Hargus, having experienced pain and vision impairments, was diagnosed with a concussion and a mild contusion. Hargus had previously suffered 10-12 head injuries. The doctor allowed Hargus to return to work that day without restrictions. Hargus did not seek further medical treatment until a year later, when he was examined for headaches, memory loss, mood swings, and neck pain. Hargus filed suit, claiming a maritime lien against the One Love, negligence, and negligent entrustment. The district court awarded $50,000, concluding that it had admiralty jurisdiction, that Coleman was negligent and that the One Love was liable in rem. The Third Circuit vacated, holding that the act giving rise to Hargus’ claim was insufficient to invoke maritime jurisdiction because it was not of the type that could potentially disrupt maritime commerce. The district court lacked subject matter jurisdiction. View "Hargus v. Ferocious & Impetuous, LLC" on Justia Law

Mack, a Muslim inmate at the federal correctional institution in Loretto, Pennsylvania, claims that he was terminated from his paid work assignment for complaining to a prison official about two correctional officers’ anti-Muslim harassment at work. He also claims that the same officers’ harassment had caused him to refrain from praying while at work. Mack brought suit, pro se, against prison employees seeking monetary relief for alleged violations of his rights under the First Amendment, Fifth Amendment, and the Religious Freedom and Restoration Act (RFRA). The district court dismissed all of Mack’s claims. The Third Circuit vacated as to the First Amendment retaliation and RFRA claims. The court held that an inmate’s oral grievance to prison officials can constitute protected activity under the Constitution; that RFRA prohibits individual conduct that substantially burdens religious exercise; and that RFRA provides for monetary relief from an official sued in his individual capacity. The court upheld dismissal of the First Amendment Free Exercise and Fifth Amendment equal protection claims. View "Mack v. Warden, Loretto Fed. Corr. Inst." on Justia Law

Plaintiffs worked 12-hour shifts at DuPont’s Towanda, Pennsylvania manufacturing plant and had to be onsite before and after their shifts to “don and doff” uniforms and protective gear. They were required to participate in “shift relief,” which involved employees from the outgoing shift sharing information about the status of work with incoming shift employees. The time spent donning, doffing, and providing shift relief ranged from 30-60 minutes a day. DuPont compensated plaintiffs for 30-minute meal breaks and two other non-consecutive 30-minute breaks during their twelve-hour shifts, although there was no legal requirement to do so. The paid break time always exceeded the amount of time plaintiffs spent donning and doffing and providing shift relief. The district court rejected, on summary judgment, plaintiffs’ claims under the Fair Labor Standards Act, 29 U.S.C. 201, and Pennsylvania’s Wage Payment and Collection Law, seeking overtime compensation for time they spent donning and doffing and performing “shift relief” on behalf of a purported class. The Third Circuit reversed, finding that the FLSA and applicable regulations, as its 2005 precedent in Wheeler v. Hampton Twp., limiting offsetting to “extra compensation” not included in the regular rate, compel the opposite result. View "Smiley v. EI DuPont de Nemours & Co." on Justia Law

In 2010, Free, as the sole proprietor of Electra Lighting, filed a voluntary bankruptcy petition. He also owns Freedom Firearms, selling WWII-era guns. After Free fell behind on payments on business-related properties, the lender purchased them in foreclosure; Free purportedly filed for bankruptcy in an effort to “stay” the sale and “work out an agreement.” He had sufficient assets to pay his debts. He then hid assets worth hundreds of thousands of dollars from the Bankruptcy Court. Free was eventually convicted for multiple counts of bankruptcy fraud. His creditors received 100 cents on the dollar. The Sentencing Guidelines increase a fraudster’s recommended sentence based on the amount of loss he causes, or intends to cause. The district court treated the estimated value of the assets that Free concealed and the amount of debt sought to be discharged as the relevant “loss” under the Guidelines. The Third Circuit vacated. On remand, the court must determine whether Free intended to cause a loss to his creditors or what he sought to gain from committing the crime. Free will not necessarily receive a lower sentence on remand. Free’s repeated lying to the Bankruptcy Court and his manifest disrespect for the judicial system may merit an upward variance from the Guidelines. View "United States v. Free" on Justia Law

Singh, a citizen of India, was admitted as a lawful permanent resident in 2009. He ran convenience stores in Clearfield County, Pennsylvania. In 2011, state troopers searched his stores. Singh was charged with “the manufacture, delivery, or possession with intent to manufacture or deliver, a controlled substance,” conspiracy, and “[k]nowingly or intentionally possessing a controlled or counterfeit substance.” A “Negotiated Plea Agreement” described the counts as involving a “PA Counterf[e]it Substance – Non Fed.” At his plea colloquy, Singh pled guilty to “possession with intent to deliver a counterfeit substance under Pennsylvania law but not under federal law” and “criminal conspiracy to commit possession with the intent to deliver … designated a counterfeit substance, under Pennsylvania law but not under federal law. DHS began removal proceedings for being convicted of: an aggravated felony, 8 U.S.C. 1101(a)(43)(B); “a violation of . . . any law or regulation of a State … relating to a controlled substance,” 8 U.S.C. 1227(a)(2)(B)(i); a “crime involving moral turpitude,” 8 U.S.C. 1227(a)(2)(A)(i); and an aggravated felony, 8 U.S.C. 1227(a)(2)(A)(iii). An IJ found Singh removable. Singh filed a stipulation from the Clearfield County District Attorney, indicating that: the Plea form is a standard form that “do[es] not constitute an admission of any specific facts” and that Singh “plead[ed] only to the delivery of an unidentified counterfeit substance under Pennsylvania law.” The BIA held Singh was removable for being convicted of an aggravated felony, without deciding whether Singh was removable under other sections. The Third Circuit vacated. Singh’s conviction does not sufficiently match the elements of the generic federal offense and was not for an aggravated felony. View "Singh v. Attorney Gen. of the United States" on Justia Law

CFI, comprised of former insiders from the pipe fitting industry, brought a False Claims Act qui tam action against Victaulic, a global manufacturer and distributor of pipe fittings. The complaint alleged that Victaulic, for many years, imported millions of pounds of improperly marked pipe fittings without disclosing that the fittings are improperly marked, thereby avoiding paying marking duties. CFI alleged that Victaulic imported approximately 83 million pounds of fittings from overseas, 2003-2013, and a miniscule fraction of Victaulic’s fittings for sale in the U.S. bear any indication of their foreign origin, with an even smaller percentage bearing country of origin markings required by 19 U.S.C. 1304. The district court dismissed with prejudice, rejecting Victaulic’s jurisdictional argument that CFI’s complaint was based primarily on publicly available information, but finding that it failed to cross the threshold from possible to plausible. The court stated that it believed the FCA’s reverse false claims provision did not cover failure to pay marking duties, but declined to rule on those grounds because the complaint was based on legal conclusions unsupportable by the facts alleged. The Third Circuit vacated. Failure to pay marking duties may give rise to reverse false claims liability. CFI’s complaint contains enough reference to hard facts, combined with other allegations and an expert’s declaration, to allege a plausible course of conduct by Victaulic to which liability would attach. View "Customs Fraud Investigations LLC v. Victaulic Co." on Justia Law

The district court dismissed, for lack of jurisdiction, a constitutional challenge to an electronic surveillance program operated by the National Security Agency (NSA) under the authority of Section 702 of the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. 1881a. The court noted that the plaintiff failed to plead facts from which one might reasonably infer that his own communications had been seized by the federal government. The Third Circuit vacated and remanded. The second amended complaint alleged that because the government was “intercepting, monitoring and storing the content of all or substantially all of the e-mail sent by American citizens,” plaintiff’s own online communications had been seized in the dragnet. That allegation sufficiently pleaded standing to sue for a violation of plaintiff’s Fourth Amendment right to be free from unreasonable searches and seizures. Plaintiff may lack actual standing to sue; the government may, on remand to make a factual jurisdictional challenge to that pleading. The alleged facts—even if proven—do not conclusively establish that a dragnet on the scale alleged by plaintiff. On remand, the court must closely supervise limited discovery. View "Schuchardt v. President of the United States" on Justia Law

A large communications equipment manufacturer, Avaya, and its dealer and service provider, TLI had a falling out. Avaya subsequently aggressively acted to block TLI from providing independent maintenance services for Avaya equipment. Meanwhile, the newly-independent TLI took various “legally dubious actions” to gain access to Avaya communications systems used by clients the parties once shared. Avaya filed suit, alleging several business torts and breach of contract; TLI counter-sued for antitrust violations. After years of pre-trial litigation, and in the midst of a months-long trial, the district court granted TLI’s motion for judgment as a matter of law on all of Avaya’s affirmative claims. The court later instructed the jury that none of TLI’s actions could be considered unlawful. The jury found Avaya liable for two antitrust violations and awarded substantial damages. The Third Circuit vacated. Given how intertwined the two sides’ claims are, and given that Avaya’s antitrust defense relied in large part on justifying Avaya’s conduct as a response to TLI’s conduct, the erroneous Rule 50 judgment infected the jury’s verdict. View "Avaya Inc v. Telecom Labs Inc" on Justia Law

Generic drug manufacturers (plaintiffs) originally sued name-brand drug companies (defendants) that manufacture and sell “Doryx,” the delayed-release doxycycline hyclate, an oral antibiotic of the tetracycline class used to treat severe acne. Tetracyclines are a broad category of antibiotics, the most common being doxycycline monohydrate and minocycline, which vary in their use and efficacy. Plaintiffs claimed that defendants conspired to protect their position in the market through “product hopping,” by making four critical changes to Doryx, all of which required generics to go through a cumbersome regulatory approval process if they wanted to continue to benefit from state substitution laws. Several plaintiffs settled their cases and the district court rejected, on summary judgment, remaining claims of unlawful monopoly and attempted monopolization under section 2 of the Sherman Act; agreement in restraint of trade under section 1 of the Sherman Act; and tortious interference with prospective contractual relationships under Pennsylvania law. The Third Circuit affirmed, finding that defendants’ conduct was not anticompetitive, and that, even if it was, it was not established that defendants had the requisite market power in the relevant product market. Adoption of plaintiffs’ theory of “anticompetitive product redesign” could have adverse, unintended consequences, including slowing innovation. View "Mylan Pharma. Inc v. Warner Chilcott Pub. Ltd. Co." on Justia Law