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

Port Hamilton Refinery purchased an existing St. Croix petroleum refinery at a 2021 bankruptcy auction, hoping to resume operations. The Refinery had for decades served as the backbone of St. Croix’s local economy until it ceased operations in 2012. Months later, the EPA notified Port Hamilton that it would need a Prevention of Significant Deterioration (PSD) permit before the Refinery could resume operations.The PSD program is part of the Clean Air Act (CAA); a facility must not contribute to the violation of applicable air quality standards and must implement the “best available control technology” to limit air pollution, 42 U.S.C. 7475(a), 7479(3). PSD applies to newly constructed stationary sources of air pollution and sources that undergo emissions-altering modifications. Under EPA’s “Reactivation Policy,” an existing facility is “new” if EPA concludes that it had previously been “shut down” and restarted. If the EPA determines that the facility had only been “idled,” it need not obtain a permit.In 2018, EPA notified the Refinery’s prior owner that it need not obtain a PSD permit because the Refinery had been only “idled” since 2012. In 2022, EPA reversed course. The Third Circuit vacated the EPA decision. The Reactivation Policy, as applied to the Refinery, exceeds EPA’s statutory authority. View "Port Hamilton Refining and Transportation LLLP v. United States Environmental Protection Agency" on Justia Law

Gillette, a serial sex offender, received a 27-year sentence for sex crimes. After his release, he never registered as a sex offender. On a tip, law enforcement found that Gillette had been living with a 15-year-old boy and had engaged in sexual contact with that child and another child. Gillette was convicted on 20 counts of territorial-law offenses; federal charges were dismissed. The court sentenced Gillette to 155 years’ imprisonment. The Third Circuit affirmed.Gillette filed a habeas petition in the Virgin Islands Superior Court. At Gillette’s request, the Superior Court issued a subpoena duces tecum to the U.S. Attorney’s Office (USAO). As required by Department of Justice regulations, the USAO requested that Gillette submit “a summary of the information” sought “and its relevance to the proceeding.” Gillette instead moved for contempt and sanctions against the USAO for failing to respond to his subpoena. The USAO then removed the proceedings to federal court and successfully moved to quash the subpoena. The Third Circuit dismissed Gillette’s appeal for lack of jurisdiction. The government never waived its sovereign immunity concerning non-monetary actions against it, so the Superior Court lacked jurisdiction over the USAO; the district court derived its jurisdiction over Gillette’s subpoena-enforcement action from 28 U.S.C. 1442(a)(1) and also lacked jurisdiction. View "Gillette v. Golden Grove Adult Correctional Facility" on Justia Law

Johnsonburg, Pennsylvania Officer Cuneo learned that the St. Marys Police Department had a search warrant to obtain a DNA sample from Perez. Cuneo knew Perez, a local with a history of illegal drug use. A log entry instructed officers who saw Perez to “hold” him and call St. Marys. Cuneo knew that Perez’s DNA had been found at the scene of a recent drug house burglary. Cuneo inferred—mistakenly—that a “body” warrant also had been issued. Later, sitting in his cruiser, Cuneo spotted Perez. The men stood on the sidewalk, having a “friendly conversation.” When Cuneo mentioned the DNA warrant and told Perez he needed to take him into custody. Perez said he was going home and sprinted away.Cuneo pursued Perez. Perez says he was tased from behind without warning. Cuneo says he warned Perez to stop before tasing him. Perez fell forward, breaking his nose. Cuneo radioed for backup and medical assistance. Perez recovered; a physical altercation ensued. Cuneo repeatedly tased and struck Perez with his baton, then shot Perez in the back.In a suit under 42 U.S.C. 1983, Cuneo asserted qualified immunity in defense. The court denied Cuneo’s summary judgment motion as to his use of his firearm and the unlawful seizure claim. The Third Circuit reversed in part. Cuneo did not seize Perez during their initial encounter. The court remanded so Perez’s excessive force claim for Cuneo’s use of his firearm can proceed. View "Perez v. Borough of Johnsonburg" on Justia Law

Vepuri is the de facto director of KVK-Tech, a generic drug manufacturer. He employed Panchal as its director of quality assurance. KVK-Tech manufactured and sold Hydroxyzine, a prescription generic drug used to treat anxiety and tension. The government alleges that Vepuri, Panchal, and KVK-Tech sourced active ingredient for the Hydroxyzine from a facility (DRL) that was not included in the approvals that they obtained from the FDA and that they misled the FDA about their practices.An indictment charged all three defendants with conspiracy to defraud and to commit offenses against the United States and charged KVK-Tech with an additional count of mail fraud. The district court dismissed the portion of the conspiracy charge that alleges that the three conspired to violate the Food, Drug, and Cosmetic Act (FDCA), which prohibits introducing a “new drug” into interstate commerce unless an FDA approval “is effective with respect to such drug,” 21 U.S.C. 355(a).The Third Circuit affirmed, rejecting an argument that a deviation from the approved drug application means that the approval is no longer effective. The approval ceases being effective only when it has been withdrawn or suspended. The indictment does not include any allegations that the KVK-Tech Hydroxyzine manufactured with active ingredients from DRL had a different composition or labeling than the KVK-Tech Hydroxyzine with the effective approval. View "United States v. Vepuri" on Justia Law

An Asset Purchase Agreement provided that the sellers could receive variable payments (Earn-Out Consideration) if the post-merger company (IAS) achieved specific benchmarks. Section 2.6(c) specifies that IAS had to provide the sellers with the computation for each period, to become final unless they submitted a “notice of disagreement.” Any disagreement would be settled according to Section 2.3(e),” which refers to resolution by an accounting firm. Section 11.17, however, directs the parties generally to use non-binding mediation, followed by litigation if mediation fails.IAS determined that the company did not meet its targets. The sellers claim that IAS intentionally prevented the company from hitting its targets. Negotiations failed. The sellers sued for breach of contract and tortious interference; later, they filed a notice of disagreement and sought a declaration that the lawsuit was outside the scope of sections 2.3(e) and 2.6(d). IAS sought to compel arbitration under 2.3(e). The district court held that the Agreement contained a valid agreement to arbitrate. An accounting firm subsequently determined that the sellers had no right to Earn-Out Consideration. The district court entered judgment for IAS.The Third Circuit vacated. The Purchase Agreement contains an agreement to submit narrow disputes to an accounting firm for expert determination, not arbitration. Although the statement of IAS’s financial benchmarks becomes final after the expert completes its accounting analysis, the authority to resolve legal questions—like whether IAS violated the duty of good faith— remains with the courts. View "Sapp v. Industrial Action Services LLC" on Justia Law

For 15 years, Charles ran 26 payday-lending companies, violating state criminal laws against usury, charging fees roughly equal to 780% interest per year. The companies grossed nearly half a billion dollars. Charles was convicted of 17 counts, including two for RICO conspiracy. He was sentenced to 14 years in prison, fined $2.5 million, and had to forfeit $64 million in illicit gains from the RICO conspiracy. Charles had already given some of the forfeited property to his daughter Linda. After the forfeiture orders, Linda filed ancillary claims to recover her interest in the assets.The Third Circuit affirmed the denial of her claims. For a RICO conviction, the defendant “shall forfeit” any interest in or proceeds from the conspiracy, 18 U.S.C. 1963(a). Third parties may neither intervene in that forfeiture proceeding nor bring separate suits to assert their interests. Any person, other than the defendant, asserting a legal interest in the forfeited property may bring an ancillary claim; the court can amend the forfeiture order if that party shows that she either was a bona fide purchaser for value or has an interest in the forfeited property that was vested or superior at the time of the crime. The third party cannot “relitigate” the underlying forfeiture order. View "United States v. Hallinan" on Justia Law

Rivera flew from Miami to Saint Thomas, where Customs officers selected her for extra screening and asked her to fill out a Customs Declaration Form. On the Form, and in statements to officers, Rivera claimed ownership of two suitcases that she had retrieved from the baggage claim. Later, she said she did not own one of them, although it had a baggage tag with her name on it. Rivera said the suitcase belonged to Nieves. The other suitcase had a baggage tag with Nieves’ name on it. Rivera said that Nieves asked Rivera to retrieve the bag for her. Officers searched both suitcases. Each contained six vacuumed-sealed bags of a green, plant-like substance. The bags were concealed by clothes. A DHS agent interviewed Rivera, who changed her story about who told her to pick up the suitcase. She said did not know it was in the suitcases, which were packed by someone else.The Third Circuit affirmed Rivera’s convictions for conspiracy to possess, and possession, with intent to distribute, less than 50 kilograms of marijuana. The court rejected her argument under the 2018 Farm Act, which amended the Controlled Substances Act to exclude hemp from the definition of marijuana. The Act carved out an exception to marijuana offenses: Someone with cannabis possesses marijuana except if the cannabis has a THC concentration of 0.3% or less. The government need not disprove an exception to a criminal offense unless a defendant produces evidence to put the exception at issue. View "United States v. Rivera" on Justia Law

The Culps each received $8,826.30 to settle a lawsuit and reported their payments as “Other income,” “PRIZES, AWARDS” in their 2015 tax return. In 2017 the IRS proposed to increase their taxes owed for 2015 to reflect a perceived underpayment, giving the Culps 30 days to respond and stating it would send a notice of deficiency if they failed to do so. The Culps did not respond. The IRS mailed a notice of deficiency, informing the Culps of their right to file a petition in the Tax Court within 90 days. In May 2018, the IRS sent the Culps another letter stating they owed only $2,087 in 2015 taxes, penalties, and interest—less than the amount previously assessed. Again they failed to respond. The IRS levied on their property, collecting approximately $1,800 from the Culps’ Social Security payments and 2018 tax refund.The Culps filed a petition in the Tax Court, which dismissed their petition for lack of jurisdiction, reasoning its “jurisdiction depends upon the issuance of a valid notice of deficiency and the timely filing of a petition,” 26 U.S.C. 6212, 6213, 6214. It found the petition untimely because the Culps did not file it within 90 days of the date the IRS sent the second notice of deficiency. The Third Circuit reversed. Congress did not clearly state that section 6213(a)’s deadline is jurisdictional; non-jurisdictional time limits are presumptively subject to equitable tolling. That presumption was not rebutted. View "Culp v. Commissioner of Internal Revenue" on Justia Law

Before Dante (age 2) died, his aunt, Mercado, filed a report with the Office of Children and Youth Services, which investigated Dante’s welfare. Bowie, who was dating Dante’s mother, was charged with murdering him. In criminal discovery, Bowie got documents from the investigation that were stored in a statewide database. He gave them to Mercado, who believed he was innocent. Mercado, wanting to blame Youth Services for failing to protect her nephew, started a Facebook group, “Justice for Dante.” and posted some of the documents. Bowie was acquitted. In the meantime, York County District Attorney Sunday charged Mercado with violating Pennsylvania’s Child Protective Services Law. The Law makes it a crime to willfully release or permit the release of any information contained in the Statewide child abuse database to persons or agencies not permitted to receive that information. The DA later dismissed the charge,Schrader, Dante’s grandmother, wants to publish documents generated during Youth Services’ investigation to further publicize Youth Services’ failures. She fears that she will be prosecuted if she does so. Invoking the First Amendment, she claimed that the Law is unconstitutional both on its face and as applied to her. The district court agreed with the as-applied challenge and preliminarily enjoined the prosecution of Schrader for sharing child-abuse documents concerning Dante. The Third Circuit vacated with instructions to narrow the injunction to eliminate a reference to "other documents" that may come into Schrader's possession. Under the content-focused test, the Law is likely unconstitutional as applied here. View "Schrader v. District Attorney York County" on Justia Law

Berkelhammer and Ruiz participated in the ADP TotalSource Retirement Savings Plan, an investment portfolio managed by NFP. They filed suit under section 502(a)(2) of the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132, for their own losses and derivatively on behalf of the Plan. The Plan’s contract with NFP contained an agreement to arbitrate disputes between the two entities. Berkelhammer and Ruiz argued that since they did not personally agree to arbitrate, the arbitration provision did not reach their claims. The district court disagreed, holding that Berkelhammer and Ruiz stand in the Plan’s contractual shoes and must accept the terms of the Plan’s contract.The Third Circuit affirmed. Civil actions under section 502(a)(2) “for breach of fiduciary duty [are] brought in a representative capacity on behalf of the plan as a whole” to “protect contractually defined benefits.” Because the plaintiffs’ claims belong to the Plan, the Plan’s consent to arbitrate controls. The presence or absence of the individual claimants’ consent to arbitration is irrelevant. View "Berkelhammer v. ADP TotalSource Group Inc." on Justia Law