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

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Wilmington Trust financed construction projects. Extensions were commonplace. Wilmington’s loan documents reserved its right to “renew or extend (repeatedly and for any length of time) this loan . . . without the consent of or notice to anyone.” Wilmington’s internal policy did not classify all mature loans with unpaid principals as past due if the loans were in the process of renewal and interest payments were current, Following the 2008 "Great Recession," Wilmington excluded some of the loans from those it reported as “past due” to the Securities and Exchange Commission and the Federal Reserve. Wilmington’s executives maintained that, under a reasonable interpretation of the reporting requirements, the exclusion of the loans from the “past due” classification was proper. The district court denied their requests to introduce evidence concerning or instruct the jury about that alternative interpretation. The jury found the reporting constituted “false statements” under 18 U.S.C. 1001 and 15 U.S.C. 78m, and convicted the executives.The Third Circuit reversed in part. To prove falsity beyond a reasonable doubt in this situation, the government must prove either that its interpretation of the reporting requirement is the only objectively reasonable interpretation or that the defendant’s statement was also false under the alternative, objectively reasonable interpretation. The court vacated and remanded the conspiracy and securities fraud convictions, which were charged in the alternative on an independent theory of liability, View "United States v. Harra" on Justia Law

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Davis answered a Craigslist.com ad, entitled “Wild child,” posted by Officer Block, who was conducting a sting operation. The ad stated that the poster was an 18-year-old woman. During their correspondence, Block posed as an eighth-grade girl, “Marisa.” They exchanged text messages for eight days. Davis showed repeated reluctance to engage in lewd conversation, expressed fear of getting caught, stated that he was gay, and claimed that he was 19; he was 30. His responses were permeated with innuendo. He addressed Marisa's virginity, plied her with compliments, asked when she was not supervised, repeatedly attempted to get her to meet, and offered her gifts. They agreed to meet and spend the day together at a water park. Marisa expressed concern about getting pregnant. Davis assured her that he would bring “protection.” Davis traveled from New York to Pennsylvania with three condoms in his pocket.Davis was convicted of use of an interstate facility to attempt to knowingly persuade, induce, entice and coerce a minor to engage in sexual activity, 18 U.S.C. 2422(b), and travel in interstate commerce with intent to engage in illicit sexual conduct with a minor, section 2423(b). The Third Circuit affirmed his convictions and 127-month sentence, rejecting claims of insufficient evidence and of entrapment and upholding the application of a sentencing enhancement for Davis’s misrepresentation of his age and of his sexual orientation. View "United States v. Davis" on Justia Law

Posted in: Criminal Law
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Under the Controlled Substances Act, a person may not make, distribute, or sell drugs, 21 U.S.C. 841, and may not own or maintain a “drug-involved premises,” for using, sharing, or producing drugs (section 856). Section 856 was added in 1986 in response to the proliferation of crack houses and was extended to reach even temporary drug premises. Safehouse wants to try a new approach to combat the opioid crisis by opening a safe-injection site that would offer drug treatment and counseling, refer people to social services, distribute overdose-reversal kits, and exchange used syringes for clean ones, with a consumption room where users could inject themselves with illegal drugs, including heroin and fentanyl, that the user brings in from outside. The user would not be allowed to share or trade drugs on the premises. Staffers would watch users for signs of overdose and intervene with medical care as needed. Safehouse hopes to prevent diseases, counteract drug overdoses, and encourage drug treatment.The district court held that section 856(a)(2) does not apply to Safehouse’s proposed consumption room, declining to reach Safehouse’s Commerce Clause or Religious Freedom Restoration Act, 42 U.S.C. 2000bb–2000bb-3, defenses. The Third Circuit reversed. Safehouse’s benevolent motive makes no difference; its safe-injection site falls within Congress’s power to ban interstate commerce in drugs. Courts are not arbiters of policy but must apply the laws as written. View "United States v. Safehouse" on Justia Law

Posted in: Criminal Law
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A Compact between Pennsylvania and New Jersey created the Delaware River Joint Toll Bridge Commission, which is authorized to “acquire, own, use, lease, operate, and dispose of real property and interest in real property, and to make improvements,” and to "exercise all other powers . . . reasonably necessary or incidental to the effectuation of its authorized purposes . . . except the power to levy taxes or assessments.” The Commission undertook to replace the Scudder Falls Bridge, purchased land near the bridge in Pennsylvania, and broke ground on a building to house the Commission’s staff in a single location. Pennsylvania Department of Labor and Industry inspectors observed the construction; the Commission never applied for a building permit as required under the Department’s regulations. The Commission asserted that it was exempt from Pennsylvania’s regulatory authority. The Department threatened the Commission’s elevator subcontractor with regulatory sanctions for its involvement in the project. The Commission sought declaratory and injunctive relief.After rejecting an Eleventh Amendment argument, the Third Circuit upheld an injunction prohibiting the Department from seeking to inspect or approve the elevators and from further impeding, interfering, or delaying the contractors. Pennsylvania unambiguously ceded some of its sovereign authority through the Compact. The fact that both states expressly reserved their taxing power—but not other powers—indicates that they did not intend to retain the authority to enforce building safety regulations. View "Delaware River Joint Toll Bridge Commission v. Secretary Pennsylvania Department of Labor and Industry" on Justia Law

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Wilson was a marine construction worker on the New Jersey Route 3 bridge replacement project, which spans the Lower Passaic River from Clifton to Rutherford, at a location where the navigation channel was authorized to be 150 feet wide and 10 feet deep. Wilson drove steel piles for a cofferdam, a watertight structure that allows construction below the waterline, and was routinely exposed to extremely loud working conditions. He was diagnosed with a permanent hearing impairment resulting from those conditions. Wilson sought compensation benefits under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. 901–50. An ALJ and the Benefits Review Board dismissed Wilson’s claim, finding that he was not covered under the LHWCA because he was not injured on navigable waters of the United States.The Third Circuit reversed. The waters where Wilson was injured were navigable, looking to whether a waterway “by itself or by uniting with other waterways, forms a continuous [commercial] highway,” and whether commercial vessels could navigate within the noted physical constraints. There were no impediments blocking the navigation channel between its confluence with the Newark Bay and the Route 3 bridge. At all points in between, the channel exceeded four feet in depth and 72 feet in width. View "Wilson v. Creamer-Sanzari Joint Venture" on Justia Law

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Dual-status military technicians are “Federal civilian employees” but must maintain National Guard membership and wear the appropriate military uniform while performing civilian technician duties. They must meet certain military requirements.Newton worked as a National Guard dual-status technician, 1980-2013, also serving as a New Jersey Army National Guard member, receiving separate military pay. In 2013, Newton retired from both. He received a pension from the Defense Finance and Accounting Service for his National Guard service and an annuity paid by the Office of Personnel Management for his dual-status technician service. The Social Security Administration (SSA) notified Newton that he qualified for retirement benefits, subject to a reduction under the Windfall Elimination Provision (WEP), 42 U.S.C. 415(a)(7)(A), because he received a separate pension payment “based in whole or in part upon" earnings not subject to Social Security tax, his civil service annuity. Newton argued that his civil service pension triggered an exception to the WEP for uniformed service.The Third Circuit held that Newton’s benefits are subject to a WEP reduction. Newton has always received two separate salaries and now receives two separate pensions. At most, Newton’s OPM civil service pension is based on service he provided while also serving in the National Guard, but not for “service as a member of a uniformed service.” View "Newton v. Commissioner Social Security" on Justia Law

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In 2012, Rad and others were charged with acquiring penny stocks, “pumping” the prices of those stocks by bombarding investors with misleading spam emails, and then “dumping” their shares at a profit. Rad was convicted of conspiring to commit false header spamming and false domain name spamming under the Controlling the Assault of Non-Solicited Pornography And Marketing Act (CAN-SPAM), 15 U.S.C. 7701(a)(2), which addresses unsolicited commercial email. The PSR recommended raising Rad’s offense level to reflect the losses inflicted on investors, estimating that Rad realized about $2.9 million in “illicit gains” while acknowledging that because “countless victims” purchased stocks, the losses stemming from Rad’s conduct could not “reasonabl[y] be determined.” Rad emphasized the absence of evidence that any person lost anything. Rad was sentenced to 71 months’ imprisonment. The record is silent as to how the court analyzed the victim loss issue. The Third Circuit affirmed. DHS initiated removal proceedings under 8 U.S.C. 1227(a)(2)(A)(iii), which renders an alien removable for any crime that “involves fraud or deceit” “in which the loss to the victim or victims exceeds $10,000.” The IJ and the BIA found Rad removable.The Third Circuit remanded. Rad’s convictions for CAN-SPAM conspiracy necessarily entail deceit under 8 U.S.C. 1101(a)(43)(M)(i). The second element, requiring victim losses over $10,000, however, was not adequately addressed. The court noted that intended losses, not just actual ones, may meet the requirement. View "Rad v. Attorney General United States" on Justia Law

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In 2005, Hart was convicted of possessing crack cocaine with intent to distribute. The Sentencing Guidelines recommended 35 years to life imprisonment; because of his extensive criminal record and the amount of crack, his mandatory minimum sentence was life. The 2010 Fair Sentencing Act lowered Hart's mandatory minimum to 10 years. The 2018 First Step Act made those lower minimums retroactive. The Eastern District of Pennsylvania U.S. Attorney’s Office and Federal Defender’s Office formed a committee that identified prisoners who were eligible for lower sentences, calculated new sentences, and submitted them for court approval. The committee incorrectly believed that eligible inmates could be resentenced only within their new Guidelines range, not below it. For Hart, the committee negotiated a 35-year sentence, which Hart accepted. Hart later asked the court to lower his sentence more based on the 18 U.S.C. 3553(a) factors. The court denied Hart’s motion, reasoning that Hart’s Guidelines range depended mainly on his criminal history, not on the amount of crack he had possessed. The court did not consider the 3553(a) factors nor Hart’s personal growth. The court added that Hart had gotten one sentence reduction and could not have another.The Third Circuit remanded. The Act’s section 404(c) bar on second resentencings is not jurisdictional and it is fair to accept the government’s waiver of that bar. When a court rules on a First Step Act resentencing motion, it must consider the applicable section 3553(a) factors. View "United States v. Hart" on Justia Law

Posted in: Criminal Law
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On February 24, 2003, Diodati arrived at work, unlocked the store, and entered. Someone behind her “pushed his way inside," and told her to turn off the alarm. Diodati did so. The masked intruder demanded money from the safe. Diodati handed him envelopes containing money; he set down a folder that he had been carrying and a gun. When the robber stood up, he picked up the gun but left the folder, and told her to go to the second safe, which was in her office. Taking about $7,000, the intruder went out the back and into to a running automobile. Detective Godlewski processed for fingerprints on the counter, the door that the robber tore partially off its hinges, and the Manila left by the intruder. Some prints belonged to Travillion, who was found guilty of the robbery and sentenced to a mandatory 10-20 years' imprisonment, consecutive to the separate sentence of life without the possibility of parole that he was serving as a result of a separate 2006 second-degree murder conviction.The Third Circuit granted Travillion habeas relief, finding that the Pennsylvania court’s adjudication of his insufficient evidence claim involved an unreasonable application of clearly established federal law. Evidence that Travillion’s fingerprints were found on the easily movable folder and paper inside the folder and Diodati's description of the robber, which did not match Travillion but did not exclude him is not sufficient evidence for a rational trier of fact to place Travillion at the scene of the crime when the crime was committed beyond a reasonable doubt. View "Travillion v. Superintendent Rockview SCI" on Justia Law

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AndroGel, a testosterone replacement therapy, generated billions of dollars in sales, The Federal Trade Commission sued the owners of an AndroGel patent under Section 13(b) of the Federal Trade Commission Act, 21 U.S.C. 301, alleging that they filed sham patent infringement suits against Teva and Perrigo and entered into an anticompetitive reverse-payment agreement with Teva. The FTC accused the defendants of trying to monopolize and restrain trade over AndroGel. The District Court dismissed the FTC’s claims to the extent they relied on a reverse-payment theory but found the defendants liable for monopolization on the sham-litigation theory. The court ordered the defendants to disgorge $448 million in profits but denied the FTC’s request for an injunction.The Third Circuit reversed in part. The district court erred by rejecting the reverse-payment theory and in concluding that the defendants’ litigation against Teva was a sham. The court did not err in concluding the Perrigo litigation was a sham and that the defendants had monopoly power in the relevant market. The FTC has not shown that monopolization entitles it to any remedy. The court did not abuse its discretion in denying injunctive relief. The court erred by ordering disgorgement because that remedy is unavailable under Section 13(b). View "Federal Trade Commission v. AbbVie Inc" on Justia Law