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

East Penn Manufacturing Company, Inc. (East Penn) did not fully compensate its workers for the time spent changing into uniforms and showering after shifts, which was required due to the hazardous nature of their work involving lead-acid batteries. The company provided a grace period for these activities but did not record the actual time spent. The U.S. Department of Labor sued East Penn under the Fair Labor Standards Act (FLSA) for failing to pay employees for all time spent on these activities.The United States District Court for the Eastern District of Pennsylvania granted summary judgment in favor of the government, determining that changing and showering were integral and indispensable to the workers' principal activities. The jury subsequently awarded $22.25 million in back pay to 11,780 hourly uniformed workers. The District Court, however, declined to award liquidated damages. East Penn appealed the decision, and the government cross-appealed the denial of liquidated damages.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's rulings. The Third Circuit held that employers bear the burden of proving that any unpaid time is de minimis (trivial). The court also held that employers must pay for the actual time employees spend on work-related activities, not just a reasonable amount of time. The court found that the District Court's jury instructions and the admission of the government's expert testimony were proper. Additionally, the Third Circuit upheld the District Court's decision to deny liquidated damages, concluding that East Penn had acted in good faith based on legal advice, even though that advice was ultimately incorrect.In summary, the Third Circuit affirmed the District Court's judgment, requiring East Penn to compensate employees for the actual time spent on changing and showering, and placing the burden of proving de minimis time on the employer. View "Secretary United States Department of Labor v. East Penn Manufacturing Inc" on Justia Law

Henry Washington, a state prisoner, alleged that prison guard T.S. Oswald sexually assaulted him twice, once in 2013 and again in 2015. During the first incident, Washington claimed that Oswald and another guard handcuffed him, fondled him, and attempted to insert a nightstick into his rectum, causing him to bleed. In the second incident, Oswald allegedly fondled Washington and attempted to insert his finger into Washington's rectum while escorting him back to his cell.Washington sued Oswald under 42 U.S.C. § 1983 for cruel and unusual punishment. The jury found in favor of Washington, awarding him $20,000 in compensatory damages and $25,000 in punitive damages for the 2013 assault, and $20,000 in compensatory damages and $200,000 in punitive damages for the 2015 assault. Oswald moved for judgment as a matter of law or a new trial, arguing insufficient evidence and excessive punitive damages. The United States District Court for the Western District of Pennsylvania denied these motions.The United States Court of Appeals for the Third Circuit reviewed the case. The court held that there was sufficient evidence for the jury to find Oswald liable for both assaults. The court also upheld the punitive damages, finding them not excessive under the Due Process Clause. The court noted that Oswald's actions were highly reprehensible, the punitive damages were proportionate to the harm caused, and the awards were consistent with those in comparable cases. The court affirmed the District Court's decision, maintaining the jury's awards. View "Washington v. Gilmore" on Justia Law

The case involves the Pennsylvania Professional Liability Joint Underwriting Association (JUA), which was established by the General Assembly of the Commonwealth of Pennsylvania nearly fifty years ago to address a medical malpractice insurance crisis. The JUA acts as a professional liability insurer of last resort for high-risk medical providers and is funded solely by premiums paid by its policyholders. Over the years, the JUA has accumulated a surplus of about $300 million through investments. From 2016 to 2019, the Commonwealth attempted to transfer the JUA’s surplus to the General Fund or assume control of the JUA through legislative actions.The United States District Court for the Middle District of Pennsylvania reviewed the case multiple times. In 2017, the JUA sued the Governor after the enactment of Act 44, which mandated the transfer of $200 million from the JUA to the General Fund. The District Court granted a preliminary injunction and later summary judgment in favor of the JUA, holding that the JUA was a private entity and that the Act violated the Takings Clause. In 2018, after the enactment of Act 41, which placed the JUA under the control of the Insurance Department and mandated the transfer of all its assets, the JUA again sued. The District Court ruled in favor of the JUA, reiterating its earlier decision. In 2019, the JUA challenged Act 15, which required the JUA to be funded by the Commonwealth and categorized it as a Commonwealth agency. The District Court granted partial summary judgment for the JUA, holding that certain provisions of Act 15 constituted a regulatory taking and violated the First Amendment.The United States Court of Appeals for the Third Circuit reviewed the case and applied the principles from Trustees of Dartmouth College v. Woodward to determine whether the JUA is a public or private entity. The Court concluded that the JUA is a public entity because it was created to serve a public purpose, exercises the Commonwealth’s coercive power, and only the Commonwealth has a legally protectable interest in the JUA. Consequently, the JUA cannot assert constitutional claims against the Commonwealth. The Court reversed the District Court’s rulings in part, affirmed in part, and remanded for further proceedings. View "Pennsylvania Professional Liability Joint Underwriting Association v. Governor of Pennsylvania" on Justia Law

In April 2020, a nursing home decided to pay its employees bonuses in recognition of their efforts during the COVID-19 pandemic. These bonuses were temporary salary increases, which were gradually reduced over the next few months until salaries returned to almost original levels. The company did not notify the union representing its employees or provide an opportunity to bargain before implementing and scaling back the bonuses. The National Labor Relations Board (NLRB) determined that the bonuses were wages subject to mandatory bargaining under the National Labor Relations Act (the Act).An Administrative Law Judge (ALJ) initially found that the bonuses were gifts rather than wages and thus not subject to mandatory bargaining. The ALJ also found that the management rights clause in the collective bargaining agreement (CBA) authorized the company's actions. However, the ALJ found the company violated the Act by failing to respond to the union's information request.The United States Court of Appeals for the Third Circuit reviewed the case. The court upheld the NLRB's determination that the bonuses were wages tied to employment-related factors and constituted hazard pay, making them subject to mandatory bargaining. The court also agreed with the NLRB that the management rights clause did not survive the CBA's expiration and thus did not authorize the company's unilateral actions. The court denied the company's petition for review and granted the NLRB's cross-petition for enforcement, including the make-whole remedy for affected employees and compensation for adverse tax consequences. The court also enforced the order regarding the company's failure to respond to the information request. View "Alaris Health at Boulevard East v. National Labor Relations Board" on Justia Law

In 2021, New Jersey enacted the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), which prohibits employers from refusing to hire job applicants based on cannabis use. In 2022, a retailer rescinded a job offer to an applicant, Erick Zanetich, after he tested positive for cannabis. Zanetich filed a lawsuit claiming the retailer's action violated CREAMMA and public policy. He sought redress individually and on behalf of a putative class.The United States District Court for the District of New Jersey dismissed both counts of Zanetich's complaint. The court found that CREAMMA does not imply a private remedy for violations of its employment protections and that New Jersey's public policy exception to at-will employment does not apply to job applicants. Zanetich appealed the decision.The United States Court of Appeals for the Third Circuit reviewed the case de novo and affirmed the District Court's judgment. The Third Circuit held that CREAMMA does not imply a private remedy for job applicants who fail drug tests for cannabis. The court applied New Jersey's modified Cort test and found that CREAMMA does not confer a special benefit on job applicants, there was no legislative intent to provide a private remedy, and implying such a remedy would not advance CREAMMA's purposes. Additionally, the court held that New Jersey's public policy exception to at-will employment, as established in Pierce v. Ortho Pharmaceutical Corp., does not extend to job applicants. The court also declined to certify the state-law issues to the New Jersey Supreme Court, finding no significant uncertainty or importance warranting certification. View "Zanetich v. WalMart Stores East Inc" on Justia Law

Jose Soto was convicted by a jury of conspiracy to commit bank robbery, two counts of bank robbery, and two counts of using and carrying a firearm during a crime of violence. At sentencing, the District Court set his offense level at 29 and sentenced him to 289 months in federal prison, including two mandatory and consecutive seven-year terms. The offense level included a two-level enhancement for obstruction of justice based on allegations that Soto improperly interacted with jurors, a witness's brother, and victims.The District Court for the District of New Jersey imposed the obstruction of justice enhancement based on three incidents: Soto stepping onto an elevator with jurors and asking one to press a button, interacting with a testifying witness's brother, and greeting victims at the courthouse. Soto's counsel argued that these interactions were not intended to obstruct justice and that Soto had not been instructed to avoid such interactions. The District Court, however, focused on the consequences of Soto's conduct rather than his intent, leading to the enhancement.The United States Court of Appeals for the Third Circuit reviewed the case and found that the District Court's application of the obstruction of justice enhancement was not supported by adequate evidence. The appellate court noted that the District Court did not explicitly adopt the findings of the presentence report and that the record lacked sufficient evidence to support the allegations of obstruction. The court emphasized that the enhancement requires a willful intent to obstruct justice, which was not demonstrated by Soto's actions. Consequently, the Third Circuit vacated the sentence and remanded the case for resentencing without the obstruction of justice enhancement. View "USA v. Soto" on Justia Law

In this case, Robert Z. Maigetter and Barbara J. Berot jointly owned a co-op apartment in Washington, D.C., which Berot's son, Alexis Kyriakopoulos, used. After Berot was diagnosed with terminal cancer, she and Maigetter executed parallel wills, with Berot expressing her wish for the co-op to pass to Kyriakopoulos. Berot passed away in May 2020, and Maigetter sought advice from their attorney, Sarah A. Eastburn, resulting in several email exchanges. Kyriakopoulos sued Maigetter to enforce an alleged contract to will the co-op to him, claiming Maigetter agreed to this arrangement before Berot's death.The United States District Court for the Eastern District of Pennsylvania reviewed the case and, after an in-camera review, ordered the production of twelve emails between Maigetter and Eastburn, finding them probative of Berot's intentions and subject to the testamentary exception to the attorney-client privilege. The District Court certified a narrow question for appeal regarding the scope of the testamentary exception, specifically whether it applies only to communications made by the deceased or also to communications made by others discussing the deceased's statements.The United States Court of Appeals for the Third Circuit reviewed the case and concluded that the District Court's application of the testamentary exception exceeded its traditional bounds. The Third Circuit held that the testamentary exception applies only to communications between the deceased client and their attorney, not to third-party communications made after the client's death. The court emphasized that the attorney-client privilege belongs to the client and can only be waived by the client or through an implied waiver in specific circumstances, which did not apply here. Consequently, the Third Circuit vacated the District Court's order compelling the production of the emails and remanded the case for further proceedings. View "Kyriakopoulos v. Maigetter" on Justia Law

Hertz Corporation and its affiliates filed for Chapter 11 bankruptcy protection in May 2020 due to financial difficulties exacerbated by the COVID-19 pandemic. Despite initial bleak prospects, Hertz's financial situation improved significantly, allowing it to emerge from bankruptcy in June 2021 with a confirmed reorganization plan. This plan proposed to pay off Hertz's pre-petition debt, including unsecured bonds, but only at the federal judgment rate of interest for the bankruptcy period, rather than the higher contract rate. Additionally, Hertz did not pay certain make-whole fees, termed "Applicable Premiums," which were designed to compensate lenders for early repayment.The United States Bankruptcy Court for the District of Delaware initially ruled that the Noteholders were not entitled to the contract rate of interest or the make-whole fees, classifying the latter as disallowed unmatured interest under § 502(b)(2) of the Bankruptcy Code. The Noteholders appealed, arguing that as creditors of a solvent debtor, they were entitled to full payment, including contract rate interest and the Applicable Premiums.The United States Court of Appeals for the Third Circuit reviewed the case. The court held that the Applicable Premiums were indeed disallowed as unmatured interest under § 502(b)(2). However, it also determined that the Noteholders, as creditors of a solvent debtor, were entitled to post-petition interest at the contract rate, not the lower federal judgment rate. The court emphasized that the absolute priority rule, a fundamental principle of bankruptcy law, requires that creditors be paid in full, including contract rate interest, before any distribution to equityholders. Consequently, the court reversed the Bankruptcy Court's decision regarding the post-petition interest rate, affirming the Noteholders' right to contract rate interest and the Applicable Premiums. View "In re: The Hertz Corporation v." on Justia Law

Donna Glaesener, a black woman, has worked at the Port Authority Trans-Hudson Corporation for nearly thirty years. In April 2018, she complained to the human-resources department about a lack of diversity and alleged discrimination in promotional decisions. She subsequently applied for several promotions but was not selected. In December 2018, she filed a formal EEOC complaint alleging discrimination. In November 2019, she sued the Port Authority, claiming she was denied promotions due to her race and in retaliation for her complaints and lawsuit.The United States District Court for the District of New Jersey granted summary judgment in favor of the Port Authority. The court applied the Title VII burden-shifting framework from McDonnell Douglas Corp. v. Green and found that the Port Authority had legitimate, non-discriminatory, and non-retaliatory reasons for not promoting Glaesener. The court concluded that Glaesener failed to show these reasons were pretexts for discrimination or retaliation.The United States Court of Appeals for the Third Circuit reviewed the case de novo, considering all facts and reasonable inferences in Glaesener's favor. The court found no evidence supporting Glaesener's claims of discrimination or retaliation. For the Safety Manager position, the successful candidate had significantly more relevant experience. For the Chief Operations Examiner position, the successful candidate had a higher interview score, and the interview process was deemed legitimate and job-related. Similarly, for the Principal Programs & Training Coordinator and Superintendent of Transportation positions, the successful candidates were more qualified and performed better in interviews.The Third Circuit affirmed the District Court's decision, holding that the Port Authority's reasons for not promoting Glaesener were legitimate and not pretextual. View "Glaesener v. New York & New Jersey Port Authority" on Justia Law

In this case, Bayer U.S. LLC, a pharmaceutical company, recalled millions of dollars’ worth of Lotrimin and Tinactin spray products in October 2021 after discovering benzene contamination in products dating back to 2018. The plaintiffs, who purchased these products during the recall period, did not allege physical injuries but sought compensation for economic losses, claiming the contaminated products were worth less than uncontaminated ones.The United States District Court for the District of New Jersey dismissed the plaintiffs' complaint for lack of standing, concluding that the plaintiffs failed to sufficiently allege economic loss or harm from increased risk of future physical injury. The court found the plaintiffs' allegations too conclusory and lacking in specific facts to support their claims.On appeal, the United States Court of Appeals for the Third Circuit reviewed the case. The appellate court concluded that the District Court erred in applying a heightened standard for standing. The Third Circuit held that the plaintiffs plausibly alleged economic injury under the benefit-of-the-bargain theory, as the contaminated products were unusable and therefore worth less than the uncontaminated products they had bargained for. The court noted that the plaintiffs need not show that all products in the recall were contaminated but must plausibly allege that their specific products were contaminated.The Third Circuit reversed the District Court's dismissal of the complaint for lack of standing as to some plaintiffs and remanded the case for further proceedings consistent with its opinion. The appellate court emphasized that the plaintiffs' allegations, supported by the recall and additional testing data, were sufficient to establish standing at the motion-to-dismiss stage. View "Huertas v. Bayer US LLC" on Justia Law