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

Current or former Uber drivers from different states agreed to Uber’s “Technology Services Agreement” as a condition of using Uber’s platform. The agreement requires drivers to resolve disputes with Uber on an individual basis through final and binding arbitration. Drivers may opt-out by sending Uber an email or letter. Singh’s class action alleged Uber had violated New Jersey wage and hour laws by misclassifying drivers as independent contractors, failing to pay them the minimum wage, and failing to reimburse them for business expenses. Calabrese’s class action, which was joined to Singh’s, sought to proceed collectively under the Fair Labor Standards Act.The district court ruled in Uber’s favor, compelling arbitration, having defined the relevant class as Uber drivers nationwide. The court found that interstate "rides constitute just 2% of all rides, resemble in character the other 98% of rides, and likely occur due to the happenstance of geography” for purposes of the exception in the Federal Arbitration Act (FAA) for arbitration agreements contained in the “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” 9 U.S.C. 1. The Third Circuit affirmed. The drivers' work is centered on local transportation. Most Uber drivers have never made an interstate trip. When Uber drivers do cross state lines, they do so only incidentally. They are not “engaged in foreign or interstate commerce.” View "Singh v. Uber Technologies, Inc" on Justia Law

Diaz was convicted of conspiracy to distribute and possess with intent to distribute heroin and cocaine and was sentenced to 33 months’ incarceration followed by 36 months’ supervised release. During that period of supervised release, Scranton Police Officers responded to a report of a physical, domestic incident involving Diaz’s then-girlfriend, Fernandez. Other violations of supervised release included possessing and using marijuana. During a probable cause and detention hearing, Magistrate Saporito heard testimony from Fernandez that she was not scared of Diaz. Saporito imposed a no-contact condition. Fernandez's testimony in the detention hearing was proven false. Diaz had called Fernandez and persuaded her to recant her statements to the police. Saporito ordered Diaz to be detained until his final revocation hearing.At the final supervised release violation hearing, Judge Mannion sentenced Diaz to the statutory maximum of 24 months’ incarceration followed by another two years’ supervised release. Mannion reimposed the no-contact order to apply during Diaz’s incarceration and his new term of supervised release. The Third Circuit vacated in part. The district court lacked either statutory or inherent authority to impose the custodial no-contact order. The court upheld the condition of Diaz’s second period of supervised release as narrowly tailored and sufficiently connected to the 18 U.S.C. 3553(a) factors. View "United States v. Santos Diaz" on Justia Law

Cortez-Amador, age 16, fled from Guatemala in 2016, following his father’s murder by gang members. He entered the U.S. without inspection and was placed by in his sister’s custody. In 2020, USCIS granted him Special Immigrant Juvenile Status (SIJS), which is available after a juvenile court finds it would not be in the child’s best interest to return to their country of last habitual residence. An SIJS recipient may pursue legal permanent residency.In 2019, while awaiting his SIJS classification, Cortez-Amador was charged with sexual assault on a child under the age of 13. He pleaded guilty to nonsexual child endangerment and admitted giving the alleged victim a cigarette. He was sentenced to 364 days' incarceration. Charged as removable, Cortez-Amador argued that his SIJS exempted him from removal; he should be granted an adjustment of status; and he was entitled to asylum (8 U.S.C. 1158), withholding of removal (1231(b)(3)), and/or Convention Against Torture (CAT) protection because the group that killed his father would target him in Guatemala.An IJ denied relief. The BIA affirmed, agreeing that SIJS parole applies for adjustment of status only, not removal; that the IJ properly exercised its discretion in denying an adjustment of status; and that any harm did not rise to the level of past persecution, so Cortez-Amador had no objectively reasonable fear of future harm. The Third Circuit rejected a petition for review, stating that the agency decisions do not reflect any error of law or are otherwise supported by substantial evidence. View "Cortez-Amador v. Attorney General United States of America" on Justia Law

The IRS investigated the companies to determine whether they are liable for penalties for promoting abusive tax shelters. Summonses led to the production of documents in 2014, including email chains involving the Delaware Department of Insurance, relating to the issuance of certificates of authority to the companies' clients and to a meeting with the Department’s Director of Captive and Financial Insurance Products. The IRS issued an administrative summons to the Department for testimony and records relating to filings by and communications with the companies. “Request 1” seeks all e-mails between the Department and the companies related to the Captive Insurance Program. The Department raised confidentiality objections under Delaware Insurance Code section 6920. The IRS declined to abide by section 6920's confidentiality requirements. The Department refuses to produce any response to Request 1.The government filed a successful petition to enforce the summons. The Sixth Circuit affirmed, rejecting the Department’s argument that, under the McCarran-Ferguson Act (MFA), 15 U.S.C. 1011, Delaware law embodied in section 6920 overrides the IRS’s statutory authority to issue and enforce summonses. While the MFA does protect state insurance laws from intrusive federal action when certain requirements are met, before any such reverse preemption occurs, the conduct at issue (refusal to produce summonsed documents) must constitute the “business of insurance” under the MFA. That threshold requirement was not met here. View "United States v. State of Delaware Department of Insurance" on Justia Law

The Department of Transportation (DOT) provides funds for state transportation projects. States that receive federal transportation funds must set participation goals for disadvantaged business enterprises (DBEs)--for-profit small businesses “at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged” and “[w]hose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it.” States certify businesses as DBEs.The defendants were convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349, and wire fraud, section 1343, arising out of DOT-financed contracts for work in Philadelphia that included DBE requirements. The Defendants' bids committed to working on the projects with Markias, a company that had prequalified as a DBE. During the performance of their contracts, the Defendants submitted false documentation regarding Markias’ role; PennDOT awarded the Defendants DBE credits and paid them based on their asserted compliance with the DBE requirements. Markias did not do any work on the projects or supply any of the materials. The Defendants arranged for the actual suppliers to send their invoices to Markias, which then issued its own invoices, adding a 2.25% fee.The Third Circuit affirmed the convictions but vacated the forfeiture order and loss calculation. The court acknowledged the complex nature of this fraud in this and commended the attempt to determine the amount of loss for sentencing purposes, and the amount to be forfeited. View "United States v. Kousisis" on Justia Law

Coleman was convicted for supervising a conspiracy to distribute cocaine, 21 U.S.C. 846, 841(a)(1), and was sentenced to life imprisonment before the Supreme Court’s 2000 “Apprendi” decision. The court did not specify which provision of section 841(b) grounded his conviction and sentence. After unsuccessfully seeking habeas relief and a sentence reduction under Sentencing Guidelines amendments, Coleman sought a reduced sentence under the 2018 First Step Act, claiming he had been sentenced for a “dual-object conspiracy involving both crack and powder cocaine.” The district court denied Coleman’s motion, finding that he was not convicted of an offense involving crack cocaine.The Third Circuit vacated. The conspiracy trafficked in crack; the court discussed Coleman’s responsibility for crack-related activities at sentencing; and the parties sparred on direct appeal over the amount of crack attributable to Coleman. If, on remand, the court reaffirms what may have been its implicit factual determination, it should acknowledge those crack references and explain why Coleman was not convicted of a crack offense. The Guidelines required the court to determine whether the drugs involved in the conspiracy were powder cocaine, crack, or both, and the amount of each, “regardless of whether the judge believed that [Coleman’s] crack-related conduct was part of the ‘offense of conviction,’” which could explain how Coleman could be found responsible for crack cocaine yet not be convicted of a crack offense. View "United States v. Coleman" on Justia Law

Doyduk came to the U.S. from Turkey on a visa that expired in 2010. Still in the country a year later, he participated in a night of heavy drinking with his then-girlfriend Filipova (also in the country without authorization). Filipova was stabbed in the stomach, suffering a serious injury. Doyduk’s boss, Coskun, called 911. Doyduk was charged with aggravated assault, possessing an instrument of crime, possessing a prohibited offensive weapon, simple assault, and recklessly endangering another person. All the charges were withdrawn after Filipova and Coskun refused to testify. The charging documents were discarded under a Pennsylvania law that requires expungement after 18 months pass without action.In 2011 removal proceedings under 8 U.S.C. 1227(a)(1)(C)(i) for having overstayed his visa, Doyduk sought an adjustment of status based on his marriage to a U.S. citizen. At a 2017 hearing, the officer who arrested Doyduk testified about the stabbing. The IJ also considered the Philadelphia police report and heard testimony from Doyduk, his citizen-wife, and others attesting to Doyduk’s character. The IJ denied relief, finding that the evidence strongly suggested that Doyduk committed the crime. The BIA affirmed. The Third Circuit denied a petition for review. The Immigration and Nationality Act allows IJs to consider facts underlying expunged charges. View "Doyduk v. Attorney General United States" on Justia Law

Weichsel's Chase credit card member agreement discloses an “Annual Membership Fee” to be added to his billing statement and that Weichsel may request an additional card for an authorized user. A “Rates and Fees Table” discloses the annual membership fee as $450 plus $75 for each additional card. Weichsel included one additional user. Weichsel alleges that his December 2019 billing statement included a renewal notice, stating that Weichsel’s annual $525.00 membership fee would be billed on 02/01/2020, how the fee would be charged, and how Weichsel could avoid it. The notice did not specify the breakdown: $450 for the primary cardholder and $75 for the additional user. The fee appeared as separate items on Weichsel’s February 2020 billing statement: a $450 charge and another for $75. Weichsel paid $525 but claims that “[h]ad [he] been aware” he could retain his credit card for $450, he would have paid only that amount. Weichsel filed a putative class action, alleging that Chase’s failure to itemize each component of the renewal fee in the December 2019 renewal notice violated the Truth in Lending Act (TILA), 15 U.S.C. 1601, and Regulation Z.The Third Circuit affirmed the dismissal of the suit. Weichsel had standing; he suffered an economic injury based on his assertion that he would not have paid the full $525 if he had known it included the additional card fee. However, neither TILA nor Regulation Z expressly mandates disclosure of each individual component of the total annual fee in a renewal notice. Regulation Z requires itemization of fees on other disclosures but lacks such a requirement for renewal notices. View "Weichsel v. JP Morgan Chase Bank NA" on Justia Law

Ahmed was President of Aspen Construction, which failed to pay the IRS federal income, Social Security, and Medicare taxes withheld from employees' wages, 26 U.S.C. 7501, 3102(a), 3402(a). Aspen owed more than $600,000 in withheld taxes. Without recourse against Aspen’s individual employees (who were credited with withheld taxes when their net wages were paid), the IRS shifted liability to Ahmed, 26 U.S.C. 6672. Whether Ahmed received notification of proposed penalties is unclear. The IRS assessed the penalties and later filed liens against Ahmed’s property to secure the penalties. Ahmed immediately sought a Collection Due Process review with the IRS Independent Office of Appeals.While Ahmed’s petition was pending, he sent the IRS $625,000, with instructions that it be treated as a “deposit” to freeze the running of interest on his disputed penalties. The IRS instead applied the money as a direct payment to the tax bill, thereby ending the matter. Without any remaining tax liability to dispute, the Tax Court dismissed Ahmed’s petition. The Third Circuit vacated. Ahmed’s petition was moot only if the IRS properly treated his remittance as a payment, which depends on whether he sent money to the IRS after it validly assessed his penalties. There is ambiguity in the record on that issue. View "Ahmed v. Commissioner of Internal Revenue" on Justia Law

The plaintiffs filed suit asserting federal securities claims. The Third Circuit affirmed summary judgment in favor of the defendants The district court subsequently performed a Federal Rule 11 inquiry mandated by the Private Securities Litigation Reform Act of 1995 (PSLRA) and determined that the plaintiffs violated Rule 11 but did not award attorneys’ fees or impose any other sanctions.The Third Circuit held that the plaintiffs violated Rule 11 in bringing their federal securities claims by filing for an improper purpose. The plaintiffs expressly stated that their “strategy was to file these complaints to force a settlement.” In addition, their Unregistered Securities and Misrepresentation Claims lacked factual support in violation of Rule 11(b)(3). The plaintiffs had a reasonable basis for their Rule 10b-5 Securities Fraud Claim. The court vacated in part. The PSLRA creates a presumption in favor of awarding attorneys’ fees when a complaint constitutes a “substantial failure” to comply with Rule 11 but the district court did not err in finding that the Rule 11 violations were not substantial. Nonetheless, the PSLRA makes the imposition of sanctions mandatory after a court determines that a party violated Rule 11, so the court abused its discretion in declining to impose any form of sanctions. View "Scott v. Vantage Corp" on Justia Law