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

In 2003, Foy was charged in Pennsylvania with threatening a federal official, 18 U.S.C. 115(a)(1)(B). The government also sought revocation of probation imposed by a Texas district court. The Pennsylvania court found that Foy was incapable of assisting in his defense and committed him for 120 days (18 U.S.C. 4241(d)). In 2005, the court found that Foy continued to be incompetent and that there was no substantial probability that he would attain competency in the foreseeable future. The government successfully moved to dismiss the criminal complaint. Three years later the Pennsylvania court terminated Foy’s Texas probation. The warden at the Missouri Federal Medical Center certified that Foy was suffering from a mental disease or defect so that his release would pose a substantial risk and that suitable arrangements for state custody were not available. A Missouri district court ordered Foy committed under section 4246(d). The Eighth Circuit affirmed. Annual reports have recommended Foy’s conditional release. Rather than accept a conditional release, Foy sought unconditional release by instituting proceedings in both district courts.The Pennsylvania court denied his FRCP 60(d)(3) motion and declined to vacate the order of civil commitment. The Third Circuit vacated, finding that the Pennsylvania court lacked jurisdiction because Foy’s commitment is currently pursuant to a Missouri order. View "United States v. Foy" on Justia Law

In 2000 the Port Authority signed a 30-year lease for the largest marine terminal at Port Elizabeth (445 acres including structures and berthing) with Maher, which handles cargo. The Lease requires “Basic Rental,” (in 2012, $50,413 per acre, totaling $22,433,612) plus “Container Throughput Rental,” based on the type and volume of cargo at Maher’s terminal. For eight years, Maher was exempted from Throughput Rental. Since 2008 the first 356,000 containers are exempted; for containers 356,001 to 980,000, Maher paid $19.00 per container in 2012; and for each additional container, Maher paid $14.25. Maher must handle a minimum amount of cargo to maintain the Lease and pay an annual guaranteed minimum Throughput Rental. Maher paid $12.5 million in Throughput Rental in 2010, and expected the 2012 amount to be $14 million. Maher claims the Port Authority profits from the Lease and uses the revenue to fund harbor improvements and projects unrelated to services provided to Maher or vessels. In 2012 Maher sued, alleging violations of the Constitution’s Tonnage Clause; the Rivers and Harbors Appropriation Act, 33 U.S.C. 5(b); and the Water Resources Development Act, 33 U.S.C. 2236. The Third Circuit affirmed dismissal, agreeing that Maher lacked standing to bring its Tonnage Clause and RHA claims because it was not a protected vessel and did not adequately plead that fees imposed on vessels were not for services rendered. Maher’s WRDA claim failed because Maher had not shown that the Authority imposed fees on vessels or cargo and because the WRDA did not prohibit use of Lease revenue to finance harbor improvements. View "Maher Terminals LLC v. Port Auth. of NY" on Justia Law

Witasick was covered by a disability policy and a business overhead expense policy. His claims against both policies were honored. A dispute arose concerning coverage of some claimed business expenses. After years of negotiation, the parties settled: the insurer agreed to pay more than $4 million and Witasick agreed to release known, unknown, and future claims. The settlement contained a covenant not to sue, based on “any conduct prior to the date the Parties sign this document, or which is related to, or arises out of” the policies. During negotiations, the U.S. Government notified Witasick that he was the target of a grand jury investigation related to fraud and business expense claims on his income tax returns. Witasick was indicted in 2007. To support its charge of mail fraud, the government relied on information and documents Witasick had submitted to the insurer. An employee of the insurer testified before the Grand Jury and at Witasick’s trial. Witasick was convicted on most counts, but acquitted of mail fraud, and was sentenced to 15 months’ imprisonment. In 2011, Witasick sued the insurer based on the policies and cooperation with the prosecution. The Third Circuit affirmed dismissal, finding the claims prohibited by the settlement agreement. View "Witasick v. Minn. Mut. Life Ins, Co." on Justia Law

Revel opened an Atlantic City resort-casino, costing $2.4 billion. Revel entered into a 10-year lease with IDEA to run two nightclubs and a beach club. IDEA contributed $16 million of the projected cost of construction in addition to monthly rental payments. The Casino did not turn a profit. Revel filed a “Chapter 22” bankruptcy, seeking permission to sell its assets free of all liens and interests (including leases). The Bankruptcy Court approved and set an auction date. IDEA, concerned that the proposed sale would eliminate the value of its lease notwithstanding its $16 million investment, filed objections. No qualified buyer appeared. The court postponed the auction. A month later, Revel closed the Casino’s doors and barred tenants, IDEA gave notice that it intended to continue operating its beach club and nightclub and expected Revel to honor its obligations to provide uninterrupted utility service. In the meantime Polo agreed to buy the Casino for $90 million. Days before the sale hearing, Revel replied to IDEA’s objections. IDEA appealed an unfavorable order and sought a stay pending appeal, noting that, if the decision were not stayed, its appeal would be moot under 11 U.S.C. 363(m) once the sale closed. The district court denied the motion. The Third Circuit reversed, staying that part of the order that allowed Revel to sell the Casino free of IDEA’s lease. View "In re: Revel AC Inc" on Justia Law

Nagle and Fink were co-owners and executives of concrete manufacturing and construction businesses. The businesses entered into a relationship with a company owned by a person of Filipino descent. His company would bid for subcontracts on Pennsylvania transportation projects as a disadvantaged business enterprise. Federal regulations require states that receive federal transportation funds to set annual goals for participation in transportation construction projects by disadvantaged business enterprises, 49 C.F.R. 26.21. If his company won the bid for the subcontract, Nagle and Fink’s businesses would perform all of the work. Fink pled guilty to conspiracy to defraud the United States. A jury found Nagle guilty of multiple charges relating to the scheme. The Third Circuit affirmed Nagle’s conviction, upholding the admission of electronic evidence discovered during searches of the businesses’ offices, but vacated both sentences, based on loss calculation errors. View "United States v. Nagle" on Justia Law

The Clean Air Act, 42 U.S.C. 7491, and EPA regulations require states to evaluate the impact of emissions from certain pollution sources within their borders on atmospheric visibility in national parks and wilderness areas. After conducting this evaluation, Pennsylvania declined to require its sources to implement additional pollution controls, concluding that costs associated with the controls outweighed the limited visibility improvements they would produce, and set forth its conclusions in its 2010 State Implementation Plan (SIP), which was approved by the EPA in 2014. Conservation Groups sought review. The Third Circuit denied the petition to the extent it challenged the Transport Rule or Pennsylvania’s reliance on it in lieu of conducting source-specific best available retrofit technology (BART) analysis regarding SO2 and NOx emissions from each source with an electricity generating capacity of at least 750 megawatts. This appeal was not the appropriate vehicle to challenge EPA’s finding that the Transport Rule is better-than-BART or decision to approve state reliance on that rule; both stem from a final rule and separate rule-making proceeding not before the court. The court nonetheless vacated and remanded, finding that Pennsylvania’s source-specific BART analysis failed to comply with the Guidelines, and that the EPA arbitrarily approved the SIP despite these flaws. View "Nat'l Parks Conservation Ass'n v. Envtl. Prot. Agency" on Justia Law

Athena incurred $1.4 million in losses on investments with Goldman Sachs and believed that Goldman misrepresented the risks, Goldman and Athena participated in arbitration to settle the dispute. Athena asserted misrepresentation, securities fraud, common law fraud and breach of fiduciary duty. After the first panel session, the Financial Industry Regulatory Authority (FINRA) disclosed that a panel member, Timban, had been charged with the unauthorized practice of law based on an appearance in a New Jersey municipal court. Neither party, nor FINRA, objected to Timban’s continued participation; neither party conducted further due diligence. Following a nine-day hearing, the panel ruled in favor of Goldman. Two panel members signed the award, but Timban did not. Under the Subscription Agreement, only two members needed to sign the award for it to have binding effect. After the award, Athena conducted a background investigation on Timban and learned that Timban failed to disclose numerous regulatory complaints against him. The district court ordered a new arbitration hearing, reasoning that Athena’s rights were compromised by an arbitrator who misrepresented his ability to serve and abandoned the panel before its final ruling. The Third Circuit reversed, finding that Athena waived its right to challenge the award. View "Goldman Sachs & Co v. Athena Venture Partners, L.P." on Justia Law

After attending a parochial school, G.L. entered high school in the Ligonier Valley District in 2008. At an open house shortly after he started, G.L.’s teacher told his father that G.L. seemed distracted and lacked organizational skills. G.L.’s father orally requested that the District evaluate G.L. for special education needs. No evaluation was conducted and, following a car accident in which G.L. lost his sister, the District purportedly investigated whether G.L. lived within its boundaries. That investigation confirmed the District’s obligation under the Individuals with Disabilities Education Act (IDEA) to provide G.L. a free appropriate public education (FAPE). Little was done to deal with G,L.’s struggles or alleged bullying, while the District repeatedly investigated residency. His parents withdrew G.L. from the school in March 2010. Within two years (the limitations period set forth in 20 U.S.C. 1415(f)(3)(C)), G.L.’s parents filed a due process complaint, alleging that the District denied him a FAPE and requesting compensatory education for September 2008 through March 2010. A hearing officer adopted a two-year remedy cap, compensating only injuries that occurred within two years of the filing date, regardless of whether filing occurred within two years of reasonably discovering older injuries. The Third Circuit disagreed and remanded, concluding that section 1415(b)(6)(B) is simply an inartful attempt to mirror the two-year statute of limitations. View "G L v. Ligonier Valley Sch. Dist" on Justia Law

In 2000, Bronowicz was charged with crimes ranging from terroristic threats to driving under the influence. He entered a negotiated plea, served his term of imprisonment, and was released. A complicated sequence of probation revocation and sentencing proceedings allegedly had the cumulative effect of unlawfully imposing additional penalties for criminal judgments that had already been satisfied. Bronowicz successfully appealed his additional prison sentence in state court and then filed a federal suit, seeking damages for wrongful incarceration under 42 U.S.C. 1983. The district court dismissed his claims as barred by the 1994 Supreme Court decision, Heck v. Humphrey. The Third Circuit reversed in part, holding that an order from the Superior Court of Pennsylvania vacating a sentence imposed by a court of common pleas constitutes a favorable termination of the proceedings against a plaintiff within the meaning of Heck v. Humphrey, notwithstanding the fact that the order failed expressly to address the inmate’s specific legal challenges to the sentence, so that any section 1983 claims stemming from the invalidated sentence are not barred by Heck. View "Bronowicz v. County of Allegheny" on Justia Law

Until 2011, Woodbridge, the largest wholesale grocery distributor by revenue in the U.S., contributed to the fund pursuant to collective bargaining agreements (CBAs). Under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, Multiemployer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381-1461, employers withdrawing from multi-employer pension plans must pay the share of the fund’s total unfunded vested benefits allocable to them. Woodbridge owes $189,606,875 and elected to satisfy its “withdrawal liability” through annual payments instead of a lump sum. Under the MPPAA, annual payments must be based on “the highest contribution rate at which the employer had an obligation to contribute under the plan.” The plan’s board claimed the single highest rate from the multiple contribution rates established in the three CBAs . Woodbridge argued that it was responsible only for a weighted average of those contribution rates. The board also claimed that Woodbridge’s payments should include a 10 % surcharge it had been paying under the 2006 Pension Protection Act, 29 U.S.C. 1085. The Third Circuit affirmed that the annual withdrawal liability payment should be based on the single highest contribution rate, but should not include the surcharge. The “highest contribution” rate means the single highest contribution rate established under any of the CBAs. View "Bd. of Trs. of the IBT Local 863 Pension Fund v. C&S Wholesale Grocers Inc" on Justia Law