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

Cephalon’s patent, issued in 1997, claimed a specific distribution of modafinil, used to treat sleep disorders. Cephalon obtained Reissue Patent 516 in 2002. Cephaolon’s use of modafinil was patent-protected until April 2015. In 1998, the FDA approved Cephalon’s New Drug Application (NDA) for the brand-name drug Provigil and granted New Chemical Entity exclusivity until December 2005, as an orphan drug. Cephalon later obtained six months of pediatric exclusivity, 21 U.S.C. 355a(c). Without the patent, Cephalon’s exclusivity would have ended in June 2006. In December 2002, four generic drug each independently filed an Abbreviated NDA seeking to sell generic modafinil. All four were treated as the first filer. Each application certification “automatically counts as patent infringement,” 35 U.S.C. 271(e)(2)(A)), so Cephalon sued all four, then entered into “reverse-payment settlements” to keep each out of the market. A putative class of wholesalers who purchased Provigil directly from Cephalon filed suit, alleging a global conspiracy involving Cephalon and the generic manufacturers, 15 U.S.C. 1; four separate conspiracies; and monopolization, 15 U.S.C. 2. A motion for class certification was filed after eight years of litigation. One month later the court granted defendants summary judgment on the antitrust conspiracy claim. The court certified the class after three defendants settled for $512 million. The Third Circuit vacated the class certification order and remanded for further consideration of whether joinder of all class members is impracticable. Plaintiffs have not met their burden of showing that the numerosity requirement of Rule 23(a)(1) was satisfied. View "In Re: Modafinil AntiTrust Litig." on Justia Law

Adeolu was the part-owner and office manager of a tax preparation company that prepared fraudulent tax returns by encouraging taxpayers to claim false dependents. Adeolu was ultimately convicted of conspiracy to defraud the United States and of aiding and abetting the preparation of materially false tax returns, 18 U.S.C. 371 and 26 U.S.C. 7206(2). At sentencing, the court applied the vulnerable victim sentencing enhancement, U.S.S.G. 3A1.1(b)(1) based upon Adeolu’s fraudulent use of young children’s personal information. The Third Circuit affirmed, rejecting an argument that the children were not vulnerable victims because they did not experience “actual” harm. A showing of actual harm is not required under the vulnerable victim sentencing enhancement; the correct test requires a “nexus” between the victim’s vulnerability and the crime’s success. The requirement was met in this case. View "United States v. Adeolu" on Justia Law

Goodwin was arrested pursuant to a warrant for allegedly selling heroin to an undercover police officer. He was indicted, but the charges were eventually dropped. Goodwin brought suit, 42 U.S.C. 1983, for false imprisonment and malicious prosecution against the detectives involved in securing his arrest warrant. He claims that they submitted a false warrant application because they knew or should have known that he was in jail at the time of one of the undercover drug deals. He argues that his incarceration was evident from a booking sheet the detectives had when they applied for his arrest warrant. The detectives moved for summary judgment, asserting qualified immunity. The district court denied the motion, holding that there was a genuine dispute as to whether the detectives possessed the booking sheet when they submitted the warrant. At oral argument before the Third Circuit, defense counsel conceded that the detectives were aware of the booking sheet before submitting the warrant application. The court concluded that booking sheet did not preclude a finding of probable cause. The sheet showed the date on which Goodwin was incarcerated. It did not say when he was released and did not trigger a duty to further investigate. The detectives had probable cause when they applied for Goodwin’s arrest warrant and are entitled to qualified immunity. View "Goodwin v. Conway" on Justia Law

To stimulate economic development, Jersey City, New Jersey offers tax exemptions and abatements to private developers of projects in certain designated areas. Those tax benefits are conditioned on the developers’ entry into agreements with labor unions that bind the developers to specified labor practices. Employers and a trade group challenged that law, alleging that it is preempted by the National Labor Relations Act (NLRA) and Employee Retirement Income Security Act (ERISA) and barred by the dormant Commerce Clause of the U.S. Constitution. The district court dismissed the complaint, concluding that Jersey City acts as a market participant, not a regulator, when it enforces the law, so that NLRA, ERISA, and dormant Commerce Clause claims were not cognizable. The Third Circuit reversed, holding that Jersey City was acting as a regulator in this context. The city lacks a proprietary interest in Tax Abated Projects. The Supreme Court has recognized a government’s proprietary interest in a project when it “owns and manages property” subject to the project or it hires, pays, and directs contractors to complete the project; when it provides funding for the project; or when it purchases or sells goods or services. This case fits none of these categories. View "Assoc. Builders & Contractors, Inc. v. City of Jersey City" on Justia Law

Mancini, a former Northampton County, Pennsylvania assistant county solicitor, filed a 42 U.S.C. 1983 action against Northampton County, County Executive Brown, and County Solicitor Scomillio, in connection with their termination of her employment. Mancini, a Democrat, alleged that she was a protected career service employee and that the newly elected Republican administration wrongfully dismissed her in violation of the Fourteenth Amendment Due Process Clause and the First Amendment. The elimination of her position was the only ground Northampton provided for Mancini’s dismissal. Although the county held an informal hearing on her grievance after her termination, no decision was ever announced. A jury found that Northampton County, but not Brown or Scomillio, violated Mancini’s procedural due process rights and awarded her $94,232 in damages. The Third Circuit affirmed. A claimed “reorganization exception” to the constitutional procedural due process requirement cannot apply, as a matter of law, if there is a genuine factual dispute about whether the reorganization was a pretext for an unlawful termination. Northampton did not provide Mancini the meaningful process she was due and the jury could have reasonably concluded that the reorganization of the Solicitor’s Office was a pretext for unlawfully terminating Mancini. View "Mancini v. Northampton County" on Justia Law

Plaintiffs represent a putative class of New Jersey real estate purchasers and refinancers who were overcharged $70 to $350 in fees. Plaintiffs allege that settlement agents (Defendants) intentionally charged Plaintiffs more than the county clerk charged for recording deeds and mortgages and kept the difference. The class claims total over $50 million, exclusive of treble damages and interest. Defendants sought dismissal and raised affirmative defenses, but did not seek to enforce arbitration clauses present in their contracts with Plaintiffs. The case was litigated for 30 months with the focus primarily on class certification. Both sides conducted broad discovery and contested substantive motions. Plaintiffs have served 130 non-party subpoenas and spent over $50,000 on experts. In 2011, the Supreme Court held that the Federal Arbitration Act (FAA) preempted state laws that had previously prohibited a party from compelling bipolar (individual) arbitration in certain situations even when it was specifically agreed to by contract. Defendants demanded enforcement of the arbitration agreements in light of this change in the law, then moved to compel bipolar arbitration. The Third Circuit affirmed in favor of Defendants. Futility can excuse the delayed invocation of the right to compel arbitration; any attempt to compel bipolar before the Supreme Court’s decision would have been futile. View "Chassen v. Fid. Nat'l Fin. Inc." on Justia Law

In 2004, buyers contracted to buy an island off of St. Thomas and a St. Thomas launch for $21,000,000 and $2,500,000. The sellers’ attorney, D’Amour, also owned the escrow company involved in the transaction. The buyers deposited $1,000,000. They later paid another $500,000 to extend the closing date. The deposits were nonrefundable. After another extension, the buyers had not paid the purchase price; the sellers had not conveyed marketable title. D’Amour sent the buyers a notice of default; they demanded refunds. The buyers sued; the sellers filed counterclaims. The district court granted summary judgment to the buyers on a conversion claim against D’Amour for $500,000. A jury awarded one buyer, Taylor, $1,500,000 in contract damages from the sellers and $46,000 for fraudulent misrepresentation by D’Amour. The jury awarded the sellers $339,516.76 from the other buyers for misrepresenting their ability to purchase the properties; the court granted judgment as a matter of law, finding the tort claims barred by the gist of the action doctrine. The court reduced Taylor’s contract damages award to $0, but upheld the fraudulent misrepresentation verdict against D’Amour The Third Circuit concluded that all parties failed to perform under the contracts and denied all damages, but concluded that Taylor was entitled to restitution from the sellers ($1,500,000). On remand, the district court awarded prejudgment interest at rates of three and six percent; declined to award attorney’s fees to Taylor, citing Taylor’s “role in breaching the contract” and the complexity of the case; and concluded that D’Amour was not entitled to attorney’s fees . The Third Circuit affirmed, except the award of prejudgment interest at a rate other than the statutorily provided 9 percent. View "Addie v. Kjaer" on Justia Law

About 20 years ago, Binder pled guilty in a Pennsylvania state court to corrupting a minor, a misdemeanor subject to possible imprisonment for up to five years. Binder was sentenced to three years' probation . Suarez pled guilty in a Maryland state court to unlawfully carrying a handgun without a license, a misdemeanor subject to possible imprisonment for “not less than 30 days and not [more than] three years or a fine.” He received a suspended sentence. Pennsylvania law disqualified both from possessing firearms due to their convictions. The Third Circuit ruled in favor of the men, who brought as-applied challenges to the prohibition. Federal law generally prohibits the possession of firearms by any person convicted of​ a “crime punishable by imprisonment for a term exceeding one year,” 18 U.S.C. 922(g)(1), excluding “any State offense classified by the laws of the State as a misdemeanor and punishable by a term of imprisonment of two years or less,” and “[a]ny conviction which has been expunged, or set aside or for which a person has been pardoned or has had civil rights restored.” The court noted its 2010 “Marzzarella” decision, adopting a framework for deciding facial and as-applied Second Amendment challenges. In its 2011 “Barton” decision, the court held that the section 922(g)(1) prohibition does not violate the Second Amendment on its face. In addressing how a criminal offender may rebut the presumption that he lacks Second Amendment rights, the majority concluded that Marzzarella's two-step test drives the analysis: whether the challenged law imposes a burden on conduct falling within the Second Amendment's scope and, if so, whether it survives intermediate scrutiny. View "Binderup v. Attorney Gen. of thel United States" on Justia Law

Hartig filed a putative class action, alleging antitrust violations involving medicated eyedrops manufactured by the Defendants. Hartig claimed that the Defendants’ wrongful suppression of generic competition resulted in supracompetitive pricing of those eyedrops. Although not a direct purchaser of the medications, Hartig claimed it had standing to sue because of an assignment of rights from Amerisource, a direct purchaser. The district court dismissed for lack of subject matter jurisdiction, finding that an anti-assignment clause in a distribution agreement between Allergan (the assignee of the named inventors) and Amerisource barred any assignment of antitrust claims from Amerisource to Hartig. The Third Circuit vacated; the district court erred in treating antitrust standing as an issue of subject-matter jurisdiction. The court distinguished between Article III standing and antitrust standing and stated that, when the correct procedures are followed, the court may consider the impact of the anti-assignment clause. View "Hartig Drug Co., Inc v. Senju Pharma. Co., Ltd" on Justia Law

Nichols is a resident, property owner, and taxpayer in the City of Rehoboth Beach, Delaware. Rehoboth Beach held a special election, open to residents of more than six months, for approval of a $52.5 million bond issue to finance an ocean outfall project. The resolution passed. Nichols voted in the election. She then filed suit challenging the election and the resultant issuance of bonds. The district court, reasoning that Nichols was not contesting the expenditure of tax funds, but the legality of the Special Election; found that Nichols, having voted, lacked standing; and dismissed. The Third Circuit affirmed, stating that because Nichols failed to show an illegal use of municipal taxpayer funds, she cannot establish standing on municipal taxpayer grounds. The court rejected her claims of municipal taxpayer standing on the basis of two expenditures by Rehoboth Beach: the funds required to hold the special election and the funds used to purchase an advertisement in a local newspaper. View "Nichols v. City of Rehoboth Beach" on Justia Law