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

Winn-Dixie sued EMMC, its individual farmer members, and certain downstream distributors claiming their price-fixing agreement violated the Sherman Act. 15 U.S.C. 1. EMMC, a cooperative of mushroom growers, targets the Eastern United States. Initially, EMMC controlled over 90 percent of the supply of fresh Agaricus mushrooms in the relevant market. That share fell to 58% percent by 2005, and 17% percent by 2010. EMMC’s 20-plus initial members shrunk to fewer than five. EMMC’s stated purpose was to establish a “Minimum Pricing Policy,” under which it would “circulat[e] minimum price lists” along with rules requiring the member companies to uniformly charge those prices to all customers. Those minimums were not the price at which growers sold the product, but the price at which EMMC members hoped to coerce downstream distributors to go to market. Certain members were grower-only entities, lacking an exclusive relationship with any distributor. Many members partnered with specific, often legally-related downstream distributors. The precise nature of these relationships varied widely but downstream distributors were prohibited from joining EMMC.The district court instructed the jury to apply the “rule-of-reason” test. The Third Circuit affirmed a verdict in EMMC’s favor. Winn-Dixie argued that the judge should have instructed the jury to presume anticompetitive effects. Because this hybrid scheme involved myriad organizational structures with varying degrees of vertical integration, the court correctly applied the rule of reason. Under that more searching inquiry, the evidence was sufficient to sustain the verdict. View "Winn Dixie Stores v. Eastern Mushroom Marketing Cooperative Inc" on Justia Law

Former employees of Alternatives, a for-profit hospice provider, sued under the False Claims Act, 31 U.S.C. 3729, alleging that Alternatives submitted claims for Medicare reimbursement despite inadequate documentation in the patients’ medical records supporting hospice eligibility, under 42 C.F.R. 418.22(b)(2). For a patient to be eligible for Medicare hospice benefits, and for a hospice provider to be entitled to reimbursement, a patient must be certified as “terminally ill.” The district court granted Alternatives summary judgment based on lack of materiality, finding “no evidence” that Alternatives’ insufficiently documented certifications "were material to the Government’s decision to pay.” The court reasoned that “[t]he Government could see what was or was not submitted” yet never refused any of Alternatives’ claims, despite the inadequacy or missing supporting documentation or where compliance was otherwise lacking.The Third Circuit vacated. When a government contractor submits a claim for payment but fails to disclose a statutory, regulatory, or contractual violation, that claim does not automatically trigger liability. The Act requires that the alleged violation be “material” to the government’s decision to pay. The Supreme Court has identified factors to assist courts in evaluating materiality. In this case, the court based its decision principally on the government’s continued payments after being made aware of its deficient documentation, overlooking factors that could have weighed in favor of materiality— and despite an open dispute over the government’s “actual knowledge.” View "Druding v. Care Alternatives" on Justia Law

M.P.N. manufactures radiators in Philadelphia. Mercer worked at M.P.N. from 2015-2017. In 2019, Mercer sued., alleging that M.P.N. concealed blood test results showing that he had dangerously high levels of zinc and lead after he was exposed to lead and cadmium on the job. A physician advised M.P.N. to remove Mercer from work but M.P.N. ignored the advice. As a result, Mercer continued working at M.P.N. and suffered permanent, avoidable brain damage. The Pennsylvania Workers’ Compensation Act is the “exclusive” source of employer liability for suits relating to workplace injuries suffered by employees. Mercer argued that he could recover from M.P.N. under a “fraudulent misrepresentation” exception recognized by the Pennsylvania Supreme Court.Zenith Insurance sought a declaration that it was not contractually obligated to defend M.P.N., against a workplace liability lawsuit. In a partial summary judgment, the district court declared that Zenith has a duty to defend M.P.N. The Third Circuit dismissed an appeal. Because the district court did not rule on all of the claims before it, that order is not final and cannot be appealed under the usual source of jurisdiction, 28 U.S.C. 1291. Zenith argued the court could consider its challenge under 28 U.S.C. 1292(a)(1), which permits appeals from non-final orders that relate to injunctive relief but the Third Circuit rule is that purely declaratory orders are not injunctive and cannot be enforced by contempt. View "Zenith Insurance Co. v. Newell" on Justia Law

Federal Protective Service, within DHS, hires Protective Service Officers for federal property and can secure contracts for private security. FPS contracted with a private security company, to provide security for the Philadelphia Social Security Administration (SSA) office. Smith and Bell were assigned to that office. In 2020, Washington was told that he could deliver certain paperwork to that office. He found the door locked. Bell explained that the office was open, with modified operations because of the coronavirus pandemic. Bell directed Washington to a drop box where he could deposit his paperwork. Washington insisted that he be allowed to visit the person with whom he spoke on the phone and forced his way into the building. Smith and Bell eventually subdued and handcuffed Washington.Washington was charged with two violations of 18 U.S.C. 111. The indictment alleges that Washington “forcibly assaulted, resisted, opposed, impeded, intimidated and interfered with an officer of the United States, as designated in [18 U.S.C. 1114], that is, [the victim], a Protective Services Officer,” while the victim was performing official duties. Weeks before trial, the government stated that Smith and Bell were contract officers but contended that they were designated under section 1114 because they were assisting the FPS in securing the SSA office. The Third Circuit reversed Washington's conviction. The indictment was flawed. It alleged that Washington assaulted federal officers when his victims could be protected only if designated as persons assisting federal officers or employees. The government’s evidence did not prove that modification. View "United States v. Washington" on Justia Law

Epsilon, an Ohio corporation with a principal place of business in Texas, entered into Joint Operating Agreements (JOAs) with companies, including Chesapeake, an LLC whose sole member is an Oklahoma citizen, to develop natural gas in Pennsylvania. The JOAs require Chesapeake to “have full control of all operations on the Contract Area.” Chesapeake can be removed as Operator for good cause by a vote of the other JOA parties. The JOAs allow the “Non-Operator parties” to propose new well sites. The others have 30 days to decide whether to participate. The work is then ordinarily performed by Chesapeake. If Chesapeake does not approve the project, the Consenting Parties designate a Consenting Party as Operator. Chesapeake opposed wells proposed by Epsilon, then blocked Epsilon from operating the proposed project unilaterally.Epsilon sought a declaration to drill without Chesapeake’s participation. Chesapeake moved to dismiss the suit for failure to join the other JOA co-signatories. The district court dismissed for failure to state a claim. The Third Circuit remanded. The other contracting parties are required (Fed. R. Civ. P. 19(a)(1)). A declaratory judgment interpreting the JOAs to authorize a single Consenting Party to propose the drilling of a new well would affect all their interests. However, other Absent JOA Parties are citizens of Texas who cannot be feasibly joined without defeating diversity and destroying subject matter jurisdiction. Deciding whether to proceed without them requires findings by the trial judge. View "Epsilon Energy USA Inc. v. Chesapeake Appalachia LLC" on Justia Law

Titus’s solo medical practice, in its last 13 months, earned $1.1 million by distributing more than 20,000 prescriptions for Schedule II drugs. Titus often did only cursory physical examinations before prescribing opioids. He kept prescribing drugs despite signs that his patients were diverting or abusing them. At least two of Titus’s patients overdosed. Other doctors filed professional complaints. Titus closed his practice. Federal agents raided the homes of Titus and two of his employees and found thousands of patient files. Titus was indicted on 14 counts of unlawfully dispensing and distributing controlled substances (based on 14 prescriptions) and maintaining drug-involved premises, 21 U.S.C. 841(a)(1), (b)(1)(C), 856(a)(1).The government's statistician, using the Prescription Monitoring Program, identified 1,142 patients for whom Titus had prescribed controlled drugs, drew a random sample of 300 patients, and extrapolated to conclude that Titus had provided 29,323 controlled substance prescriptions to 948 patients with at least one inconsistent drug test and 1,552 such prescriptions to 352 patients he had already discharged from his practice. The government’s medical expert reviewed 24 of those files and determined that Titus had written illegal prescriptions for 18 of the patients.The district court held Titus responsible for at least 30,000 kilos, citing “general trial evidence” and extrapolating from the 24-file sample. The Third Circuit affirmed Titus’s convictions but vacated his 240-month sentence. The government failed to prove that extrapolating from a small sample satisfied its burden to prove the drug quantity by a preponderance of the evidence. View "United States v. Titus" on Justia Law

Pretrial detainee Wilson complained to Philadelphia Federal Detention Center medical staff about a lump on his testicle in November 2017. They allegedly stated that such a lump was probably cancerous. Wilson subsequently complained that his condition worsened but received no further treatment. Wilson was transferred to Bureau of Prisons custody, where a urologist determined in February 2018 that the lump was cancerous. Wilson's right testicle was surgically removed. Wilson believed that if his cancer had been addressed earlier, treatment would not have involved chemotherapy and surgery.Wilson alleged medical negligence under the Federal Tort Claims Act (FTCA). The court granted extensions for Wilson (pro se) to act on Pennsylvania Rule 1042.3, which requires medical malpractice plaintiffs to certify either that they have expert support for their claims or will proceed without an expert. Wilson explained that he wanted an expert but conceded the impossibility of obtaining one during the pandemic prison lockdowns. He stated that his medical records would demonstrate that his injury “was not inevitable" and specifically identified documents as discoverable material to substantiate his allegations, The court granted the government summary judgment stating that, while a factfinder could find without expert testimony that the delay in treatment was unreasonable, the issue of whether the delay caused the need to remove Wilson’s testicle required expert testimony.The Third Circuit reversed, finding that the FTCA does not incorporate Rule 1042.3. Wilson did not otherwise have an adequate opportunity to seek out an expert or conduct discovery due to his unique position as a pro se inmate during the pandemic. View "Wilson v. United States" on Justia Law

In 2022, New Jersey passed a law, N.J. Stat. 2C:58-33(a), that empowers only the state’s Attorney General to sue gun-industry members whose “unlawful … or unreasonable” conduct “contribute[s] to a public nuisance in [New Jersey] through the sale, manufacturing, distribution, importing, or marketing of a gun-related product.” It requires industry members to “establish, implement, and enforce reasonable controls” on these activities. The Attorney General has not attempted to enforce the law. Four months after the law was passed, the Foundation, a trade group of gun makers, retailers, and other industry members, filed suit, claiming that the law is preempted by the federal Protection of Lawful Commerce in Arms Act, 15 U.S.C. 7901–7903, and violates due process, the First and Second Amendments, and the dormant Commerce Clause. The Foundation moved for a preliminary injunction, attaching declarations that gunmakers “will continually be at risk of litigation and potential liability unless [they] cease[] doing business.” They gave no factual detail.The Third Circuit held that the challenges must be dismissed. “Pre-enforcement challenges are unusual,” the plaintiff must show that the stakes are high and close at hand. This suit “falls far short of even the “normal” pre-enforcement challenge.” A brand-new civil tort statute, without more, does not justify a federal court’s intervention. View "National Shooting Sports Foundation v. Attorney General New Jersey" on Justia Law

Following workplace-safety regulations, Precision requires its rig hands to wear flame-retardant coveralls, steel-toed boots, hard hats, safety glasses, gloves, and earplugs. The rig hands, wanting to be paid for the time they spend changing into and out of protective gear and for the time spent walking from the rigs’ changing house to safety-meeting locations, sued Precision under the Fair Labor Standards Act, 29 U.S.C. 206, 207.Under the Portal-to-Portal Act, employers need not pay workers for traveling to and from the actual place where they perform the principal activities for which they are employed or for “activities which are preliminary to or post-liminary to said principal" activities, section 254(a). A “principal activity” is “the productive work that the employee is employed to perform” and all activities that are an "integral and indispensable part of the principal activities.” To be integral, a task must be “intrinsic” to the principal activity; it is indispensable when a worker cannot dispense with doing it “if he is to perform his principal activities.”The district court ruled that the oil-rig hands need not be paid for changing gear. The Third Circuit vacated. To determine whether changing is integral and intrinsic, the district court should consider whether workers have the option to change at home, whether changing is required by law, what kind of gear is required, and whether it is reasonably necessary for doing the work safely and well. View "Tyger v. Precision Drilling Corp." on Justia Law

Police stopped Henderson for a traffic violation, searched his vehicle, and found a loaded semiautomatic firearm with an obliterated serial number and 13 rounds of ammunition. Henderson pled guilty to possession of a firearm by a convicted felon, 18 U.S.C. 922(g)(1). He had a prior state robbery conviction under 18 Pa. Cons. Stat. 3701(a)(1)(ii).The court applied the U.S.S.G. 2K2.1(a)(4) sentencing enhancement based on Henderson’s robbery conviction, reasoning that section 3701(a) is divisible and Henderson was convicted of violating subsection (ii), which qualified as a “crime of violence” under U.S.S.G. 4B1.2(a). Subsection (ii) provides that a person is guilty of robbery if he “threatens another with or intentionally puts him in fear of immediate serious bodily injury,” which means a violation of the subsection necessarily “requires the purposeful use or threat of physical force against another.” With an enhancement for possessing a firearm with an obliterated serial number, U.S.S.G. 2K2.1(b)(4)(B), and a reduction for acceptance of responsibility, U.S.S.G. 3E1.1, his Guideline range was 57-71 months’ imprisonment.The Third Circuit affirmed Henderson’s 60-month sentence, applying the “modified categorical approach,” and concluding that subsection (ii) involves the requisite force and mens rea to qualify as a crime of violence under 4B1.2’s elements clause. View "United States v. Henderson" on Justia Law