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

Exchange, an unincorporated association, is a reciprocal insurance exchange under Pennsylvania law, owned by its members, who are subscribers to Erie's insurance plans. Exchange has no independent officers nor a governing body. Indemnity, a Pennsylvania corporation, is the managing agent and attorney-in-fact for Exchange and receives a management fee from Exchange’s funds.Erie subscribers (Stephenson Plaintiffs) sued Indemnity in state court, claiming that Indemnity breached its fiduciary duty by charging an excessive management fee. They brought the case as a class action under Pennsylvania law on behalf of themselves and other “Pennsylvania residents” who subscribed to Erie policies. Invoking federal jurisdiction under the Class Action Fairness Act, 119 Stat. 4 (CAFA), Indemnity removed the case to federal court. The Stephenson Plaintiffs voluntarily dismissed the case. A month later, Exchange filed another case in state court, alleging that Indemnity breached its fiduciary duty by charging an excessive management fee; the case is not pled as a class action but is pled in Exchange’s name “by” “Individual Plaintiffs,” on behalf of Exchange, “to benefit all members of Exchange.”Indemnity removed the case, again citing CAFA. The district court remanded the case to state court. The Third Circuit affirmed, rejecting arguments that the district court had jurisdiction because the case is a “class action” for purposes of CAFA or that federal jurisdiction exists because this case is a continuation of a previous federal class action against Indemnity involving similar parties and claims. View "Erie Insurance Exchange v. Erie Indemnity Co" on Justia Law

In 2008, Jenkins pleaded guilty to possession of a firearm by a felon, 18 U.S.C. 922(g)(1), 924(e). He was sentenced to the 15-year mandatory minimum under the Armed Career Criminal Act (ACCA) because he had three prior convictions “for a violent felony or a serious drug offense.” including two prior drug convictions and a conviction for aggravated assault under 18 Pa. Cons. Stat. 2702(a)(3). Section 2702(a)(3) applies to one who “attempts to cause or intentionally or knowingly causes bodily injury” to certain persons “in the performance of duty.”In 2015, the Supreme Court, in “Johnson," held that ACCA’s residual clause is unconstitutionally vague. As a result, Jenkins’s Section 2702(a)(3) conviction for a non-enumerated offense would qualify as a predicate violent felony only if it satisfied the elements clause. Jenkins moved to correct his sentence under 28 U.S.C. 2255, arguing that because Section 2702(a)(3) can be violated without the use, attempted use, or threatened use of physical force, it is not a “violent felony” under ACCA’s elements clause. The Third Circuit agreed and granted relief. A violation of Section 2702(a)(3) can be committed by a failure to act. The court acknowledged the “bizarre result” required by the categorical approach in analyzing Pennsylvania’s aggravated assault laws. View "United States v. Jenkins" on Justia Law

In 2010, Harris pled guilty to possession of a firearm by a convicted felon, 18 U.S.C. 922(g)(1), 924(e), which typically carries a maximum sentence of 10 years’ imprisonment. Harris’ PSR concluded that Harris qualified for a sentence enhancement under the Armed Career Criminal Act (ACCA) because his criminal record included three predicate offenses: one serious drug conviction and at least two violent felony convictions. Based on this determination, the district court imposed a mandatory minimum sentence of 15 years.In 2016, Harris moved to correct his sentence (28 U.S.C. 2255) following the Supreme Court’s Johnson decision, claiming the statutes underlying his prior convictions criminalize reckless conduct. In 2021, the Supreme Court (Borden) held crimes that could be committed with a mens rea of recklessness do not qualify as violent felonies under ACCA’s element of force clause. Borden eliminated some of Harris’ prior convictions as predicate offenses.Before the Borden decision, the Third Circuit (Mayo) held a Pennsylvania conviction for first-degree aggravated assault does not require physical force as understood within the context of ACCA. Based on Mayo, the Third Circuit vacated Harris’ sentence; his aggravated assault conviction is stricken as a predicate, and he no longer has the three violent felony convictions necessary to justify the enhancement. View "United States v. Harris" on Justia Law

Kosh, a Liberian citizen, arrived in the U.S. in 2001 with a false Portuguese passport and requested entry under the Visa Waiver Program (VWP), 8 U.S.C. 1187(a). Like all VWP entrants, Kosh signed waived any right “to contest, other than on the basis of an application for asylum, any action for removal.” Kosh confessed his Portuguese passport was fake and sought asylum. Kosh feared returning to Liberia, which had an ongoing civil war. His father had been murdered and Kosh was arrested before escaping and fleeing to the U.S. The IJ granted Kosh asylum. Kosh married and had four children. He left the U.S. in 2005 using his refugee travel document and apparently re-entered that year.Kosh was convicted of conspiracy to defraud the United States and filing false and fraudulent income tax returns. USCIS denied Kosh’s application to adjust his status to that of a lawful permanent resident. His criminal convictions could make him ineligible for adjustment of status, but DHS can waive inadmissibility “for humanitarian purposes.” An IJ reopened Kosh’s asylum-only proceeding and terminated his asylum status. Kosh argued that DHS, instead of reopening his earlier proceedings, should have filed removal proceedings under 8 U.S.C. 1229a, which would allow him to seek adjustment of status.The Third Circuit granted Kosh’s motion for a stay of removal and vacated. If Kosh re-entered the country as an asylee without signing a new VWP form, he is entitled to complete-jurisdiction proceedings in which he can raise an adjustment-of-status claim. View "Kosh Ishmael v. Attorney General United States" on Justia Law

Nitkin, a Nurse Practitioner, worked in an MLH hospital. During team meetings, the Lead Doctor would sometimes discuss inappropriate sexual topics and his substance misuse and would ask team members about their personal lives, including dating and traumatic experiences. Nitkin also recounted that the Lead Doctor made her feel uncomfortable in private; he never propositioned her for a date or stated that he wanted to have sexual relations with her. Nitkin reduced her work hours and reported his conduct. After an investigation, MLH removed the Lead Doctor from his director role and assigned Dr. Tyson. Nitkin still had to work occasionally with the Lead Doctor.Shortly after telling Tyson that she did not want to work with Lead Doctor, Nitkin received a new job offer and decided to resign. Tyson, however, indicated that Nitkin had divulged confidential information by telling him that she filed a complaint against the Lead Doctor, which was a terminable offense. According to Nitkin, she was told that, if she was terminated for violating policies, her new employer would be informed but that she could avoid that outcome by making her resignation effective immediately. Nitkin did so.Nitkin filed suit, alleging hostile work environment on the basis of sex and retaliation, Title VII, 42 U.S.C. 2000e. The district court granted MLH summary judgment on Nitkin’s hostile work environment and wrongful termination claims but denied it on her retaliation claims. The Third Circuit affirmed. Nitkin did not demonstrate that the harassment was severe or pervasive. View "Nitkin v. Main Line Health" on Justia Law

Upshur and Thompson operated a trust; people wired fees to Upshur and allowed the defendants to file tax forms representing that the Trust had withheld income tax on their behalf, hopefully yielding sizable refunds. The defendants themselves also participated. Though this scheme was largely unsuccessful, the IRS issued one $1.5 million refund but, realizing, its mistake, froze the payment. In another scheme, they made large fraudulent tax overpayments, hoping to generate refunds. This scheme apparently did not generate any payments from the IRS, but the two schemes, together, resulted in over $325 million in fraudulent tax claims.Upshur was convicted of conspiracy to defraud the United States and eight counts of aiding and assisting in the preparation of false tax returns, 18 U.S.C. 371, 26 U.S.C. 7206(2). The court recognized there was no actual loss to the U.S. Treasury, and calculated Upshur’s base offense level under U.S.S.G. 2T1.4 using the intended-loss figure of $325 million, for a Guidelines range of 324-348 months. The Third Circuit affirmed his 84-month sentence. The court acknowledged its 2022 “Banks” holding that for theft offenses, absent Guideline text extending “loss” to intended loss, U.S.S.G. 2B1.1’s loss table reached only actual loss. However. the texts of sections 2T1.1 and 2T1.4, applicable to tax fraud, indicated that 2T4.1’s loss table covers the loss the perpetrator intended. View "United States v. Upshur" on Justia Law

Nucera was charged with committing a hate crime, depriving another of his civil rights, and making false statements to the FBI, arising from actions he took as a police officer arresting Stroye. His jury engaged in heated deliberations with racial tensions playing a major role. Credibility determinations were crucial, and jurors were deeply divided over whom and what to believe.The Third Circuit rejected Nucera’s claims of jury misconduct. Nucera offers only post-verdict affidavits from jurors who say they experienced racial vitriol, intimidation, and other misconduct that occurred during the jury deliberations. When parties challenge a verdict, Federal Rule of Evidence 606(b) bars a court from considering a juror’s statement or affidavit unless it satisfies either an exception in the Rule or a constitutional exception created by the Supreme Court (Peña-Rodriguez, 2017), for evidence of racial bias. The latter exception is narrow and specific: it requires a clear statement that a juror voted for a conviction based on racial animus toward, or stereotypes about, the defendant. None of Nucera’s evidence satisfies the Rule 606(b) exceptions nor does it fit the Peña-Rodriguez exception. The court also affirmed a ruling that limited Nucera’s use of the victim’s out-of-court statement and the court’s jury instructions about unanimity. The court vacated Nucera’s sentence; the district court erred in applying the Sentencing Guidelines. View "United States v. Nucera" on Justia Law

A group consisting primarily of union health and welfare insurance plans claims that Abbvie, the manufacturer of the drug Niaspan, paid off a potential manufacturer of a generic version of the drug to delay the generic’s launch. This putative class action was brought to recover damages based on the allegedly inflated prices charged by Abbvie in violation of state antitrust and consumer protection laws. The district court denied a motion for class certification, finding that the class was not ascertainable.The Third Circuit affirmed, declining to reconsider its “ascertainability” requirement. The court rejected an argument that the district court’s factual findings were clearly erroneous because the court misunderstood their proposed methodology, overstated the prevalence of intermediaries in the pharmacy benefit managers’ data, and failed to consider the use of affidavits as a means of identifying class members. The court further noted that the new suggestion concerning affidavits was not properly put before the district court. The district court properly concluded that the proposed data matching technique is unreliable. View "In Re: Niaspan Antitrust Litigation" on Justia Law

Corsica, Pennsylvania, with 357 residents and two businesses, is governed by a seven-person Council that meets once a month. In 2009, the Council hired Laird as secretary/treasurer—the Borough’s only paid staff position— at $12.50 per hour. Laird was the point person for Borough audits; only Laird and the Council President were authorized to sign Borough checks. Though two signatures were required, the President “common[ly]” provided Laird with signed blank checks. Between 2009-2017, Laird wrote unauthorized checks from the Borough’s bank account to herself and her husband. She paid her personal expenses by electronically transferring Borough funds and used the Borough’s credit card to purchase personal items. Laird embezzled $345,600.79. The Borough had to double property taxes to recoup some of its losses.Laird pleaded guilty to 26 counts of wire fraud, 18 U.S.C. 1343, without a plea agreement. The PSR recommended a two-level increase under U.S.S.G 3B1.3 for Laird’s abuse of a position of trust and a 12-level increase under section 2B1.1(b)(1)(G) for loss between $250,000-$550,000. After decreasing three levels for Laird’s acceptance of responsibility, the PSR calculated a Guidelines sentencing range of 27-33 months’ imprisonment. The district court concluded that Laird’s legitimate salary did not reduce the total loss below $250,000 and applied the abuse-of-trust enhancement. The Third Circuit affirmed Laird’s 21-month sentence and a $266,050.79 restitution order. View "United States v. Laird" on Justia Law

Askew formed Vantage to trade securities. He recruited investors, including the plaintiffs. Vantage filed a Securities and Exchange Commission (SEC) Form D to sell unregistered securities in a 2016 SEC Rule 506(b) stock offering. The plaintiffs became concerned because Askew was not providing sufficient information but they had no right, based on their stock agreements, to rescind those investments. They decided to threaten litigation and to report Vantage to the SEC to pressure Askew and Vantage to return their investments. Before filing suit, the plaintiffs engaged an independent accountant who reviewed some of Vantage’s financial documents and concluded that he could not say “whether anything nefarious is going" on but that the “‘smell factor’ is definitely present.”The Third Circuit affirmed summary judgment for the defendants in subsequent litigation. The district court then conducted an inquiry mandated by the Private Securities Litigation Reform Act (PSLRA) and determined that the plaintiffs violated FRCP 11 but chose not to impose any sanctions. The Third Circuit affirmed that the plaintiffs violated Rule 11 in bringing their federal securities claims for an improper purpose (to force a settlement). The plaintiffs’ Unregistered Securities and Misrepresentation Claims lacked factual support. Askew was not entitled to attorney’s fees because the violations were not substantial. The PSLRA, however, mandates the imposition of some form of sanctions when parties violate Rule 11 so the court remanded for the imposition of “some form of Rule 11 sanctions.” View "Scott v. Vantage Corp" on Justia Law