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

In 2008, Tiversa, a cybersecurity company, informed LabMD, a medical testing business, that it had found LabMD’s confidential patient information circulating in cyberspace and that it could help LabMD respond to the data leak. LabMD’s own investigation revealed no leak. LabMD accused Tiversa of illegally accessing the patient information. Tiversa submitted a tip to the FTC, prompting an investigation. The FTC enforcement action and the reputational damage ruined LabMD. In 2014, a former Tiversa employee disclosed that the patient information did not spread from a leak but that Tiversa had accessed LabMD’s computer files and fabricated evidence of a leak.LabMD sued. In one suit, the district court dismissed claims of defamation and fraud after prohibiting the discovery or use of expert testimony. After finding that LabMD and its counsel breached those discovery limits, the court awarded fees and costs to the defendants, struck almost all of LabMD’s testimonial evidence, and revoked its counsel’s pro hac vice admission. When LabMD’s replacement counsel later tried to withdraw, the court denied that request. LabMD failed to pay the monetary sanctions; the Court held it in contempt. The second lawsuit, asserting similar fraud claims, was dismissed.The Third Circuit vacated in part. The prohibition on expert testimony was unwarranted; the court abused its discretion in imposing sanctions and erred in denying the motion to withdraw. LabMD’s other claims, in that case, were properly dismissed. In the second case, the court affirmed; LabMD did not challenge independently sufficient grounds for the decision. View "LabMD, Inc v. Tiversa Holding Corp" on Justia Law

A yacht owned by Raiders ran aground. Raiders had insured the vessel with GLI, which denied coverage stating the yacht’s fire-extinguishing equipment had not been timely recertified or inspected notwithstanding that the vessel’s damage was not caused by fire. GLI sought a declaratory judgment that Raiders’ alleged failure to recertify or inspect its fire-suppression equipment rendered the policy void from its inception. Raiders responded with five counterclaims, including three extra-contractual counterclaims arising under Pennsylvania law for breach of fiduciary duty, insurance bad faith, and breach of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.Concluding the policy’s choice-of-law provision mandated the application of New York law and precluded Raiders’ Pennsylvania law-based counterclaims, the district court dismissed those claims. The court rejected Raiders’ argument that applying New York law would contravene Pennsylvania public policy, thereby making the choice-of-law provision unenforceable under Supreme Court precedent (Bremen (1972)), which held that under federal admiralty law a forum-selection provision is unenforceable “if enforcement would contravene a strong public policy of the forum in which suit is brought.” The Third Circuit vacated. Bremen’s framework extends to the choice-of-law provision at issue; the district court needed to consider whether Pennsylvania has a strong public policy that would be thwarted by applying New York law. View "Great Lakes Insurance SE v. Raiders Retreat Realty Co LLC" on Justia Law

In 2014, Frein ambushed Pennsylvania State Troopers, killing one and injuring the other. Knowing he had used a .308-caliber rifle, police got a warrant to search the home that he shared with his parents and seize that type of rifle and ammunition. They did not find a .308-caliber rifle but found 46 guns belonging to the parents. The officers got a second warrant and seized them. Frein was eventually arrested, tried, convicted, and sentenced to death. The government never used the parents' guns at trial, sentencing, or on appeal. The parents were not charged nor was it alleged that any of their guns were involved in the crime. The parents went to Pennsylvania state court and unsuccessfully asked to get their guns back, raising Second Amendment, takings, due process, excessive fines, and state-law objections.The parents then sued under 42 U.S.C.1983, arguing that by keeping the guns, the government is violating the Takings Clause and the Second Amendment’s right to “keep" arms and that the state’s procedure for letting them reclaim their property violated procedural due process. The district court dismissed. The Third Circuit vacated in part. By keeping the parents’ guns after the criminal case ended, the officials took their property for public use without compensating them. Because the parents lawfully owned the guns, they also have a Second Amendment claim. However, they had a real chance to challenge the government’s actions and got procedural due process. View "Frein v. Pennsylvania State Police" on Justia Law

PPG, a Pittsburgh company, developed a new kind of plastic for airplane windows, “Opticor™ A former PPG employee, Rukavina, agreed to share proprietary information concerning Opticor with TMG, a China-based manufacturer. TMG contacted the PPG subcontractor that made Opticor window molds, asking it to manufacture the same molds, attaching photographs and drawings from a proprietary report. The subcontractor alerted PPG, which notified the FBI, which executed warrants to search Rukavina’s email account and residence. Rukavina was charged with criminal theft of trade secrets.PPG filed a civil action against TMG, under RICO, 18 U.S.C. 1962(c)-(d) and Pennsylvania law. TMG did not respond to the complaint, nor did it answer requests for admissions. More than a year after TMG should have appeared the clerk entered a default. PPG asserted actual damages of $9,909,687.31. Four months later, TMG appeared and unsuccessfully moved to set aside the default. The court held that PPG had sufficiently established TMG’s liability and was entitled to treble damages, an injunction, and attorneys’ fees, costs, and expenses. The court found that $8,805,929 of the claimed actual damages were supported by sufficient evidence and entered judgment for $26,417,787.The Third Circuit affirmed. TMG effectively conceded the complaint’s allegations. Under the Uniform Trade Secrets Act, it can be appropriate to measure unjust enrichment from a misappropriated trade secret by looking at development costs that were avoided but would have been incurred if not for the misappropriation. The district court carefully analyzed such evidence; its methodology and conclusion are sound. View "PPG Industries Inc v. Jiangsu Tie Mao Glass Co Ltd" on Justia Law

In 2016, York County, Pennsylvania police officers conducted controlled cocaine buys from Brown, then obtained a search warrant for Brown’s apartment. Inside the apartment, they discovered Brown himself, cocaine, scales, money, and a loaded revolver tucked under the couch cushion where Brown had been sitting. Brown was indicted on multiple counts, including being a felon in possession of a firearm. 18 U.S.C. 922(g). Brown pleaded guilty to cocaine possession and distribution and the section 922(g) offense. At the time of sentencing, Brown had five prior Pennsylvania convictions for the distribution, or possession with intent to distribute, of controlled substances. One, from 2008, involved cocaine, and the remaining four, spanning from 2009-2014, involved marijuana.The district court applied the Armed Career Criminal Act (ACCA)'s 15-year mandatory minimum. The court declined to decide whether Brown was a “career offender” under U.S.S.G. 4B1.1 after making the ACCA determination. The Third Circuit affirmed Brown’s 15-year sentence, despite the intervening federal decriminalization of hemp. Absent contrary statutory language, the law in effect at the time of the commission of the federal offense applies when employing the categorical approach in the ACCA context. The state schedule matched the federal schedule in effect when Brown committed the federal offense triggering the ACCA enhancement. View "United States v. Brown" on Justia Law

Crosbie was hired by Gateway to help Highmark, a health insurance company, investigate fraud. While auditing Highmark’s network of doctors, Crosbie claims he discovered that some doctors had prior convictions for selling opioid prescriptions; others lacked required Medicaid licenses. He reported his concerns to Gateway's managers. They investigated but did not take any action. Crosbie kept pressing the issue. More than a year after his report. Crosbie’s coworker lodged a complaint that Crosbie had called her “Miss Piggy” and “oinked” at her. Gateway’s human-resources team investigated. An eyewitness corroborated the complainant’s story. Other people described past issues between Crosbie and the complainant.Gateway fired Crosbie. Crosbie sued Gateway and Highmark under the False Claims Act for retaliation based on his fraud reports. The employers replied that the people who had decided to fire Crosbie knew nothing about his reports and that they had good reason to fire him. The Third Circuit affirmed summary judgment in favor of the employers. Crosbie has not shown that the employers’ reason was a mere pretext for retaliation. View "Crosbie v. Highmark Inc" on Justia Law

ESML filed for Chapter 11 bankruptcy. Chippewa funded ESML’s exit from bankruptcy. The plan and confirmation order discharged all claims against ESML arising before the plan’s effective date and enjoined actions against ESML and Chippewa by holders of those claims. The Court retained jurisdiction over matters arising under the Bankruptcy Code or arising in or related to the Chapter 11 cases or plan. ESML emerged from bankruptcy as Mesabi. During the bankruptcy case, Chippewa sought to acquire ESML. Its affiliate, ERPI, agreed to engage Riley as its exclusive financial advisor. Riley would receive a “Restructuring Fee” if ERPI successfully acquired ESML. One day before the plan’s effective date, Riley, ERPI, and Chippewa entered an amendment that purported to bind ERPI, Chippewa, and the post-effective date Mesabi. After a debt financing transaction closed, Riley sought payment from Chippewa and Mesabi of a $16 million "success fee." Mesabi refused to pay, Riley filed suit and a FINRA arbitration. Mesabi filed a Bankruptcy Court adversary complaint, maintaining the fee had been discharged.The Bankruptcy Court dismissed the adversary proceeding for lack of jurisdiction. The Third Circuit reversed. The Bankruptcy Court had jurisdiction to interpret and enforce the discharge and injunction provisions of its plan and confirmation order. This matter falls within the category of “core proceedings.” Executing the relevant amendment a day before the plan’s effective date may hint that Chippewa and ERPI tried to circumvent the bankruptcy process. View "Mesabi Metallics Co. LLC v. B. Riley FBR Inc." on Justia Law

Vurimindi, a native of India, came to the U.S. on a work visa in 2000, and after marrying an American citizen, became a lawful permanent resident in 2008. Vurimindi’s erratic behavior toward his neighbors eventually led to his arrest and conviction on two counts of misdemeanor stalking under Pennsylvania law, which makes it a crime to: engage[] in a course of conduct or repeatedly commit[] acts toward another person . . . under circumstances which demonstrate either an intent to place such other person in reasonable fear of bodily injury or to cause substantial emotional distress to such other person.” Vurimindi was sentenced to two consecutive terms of 15-30 months’ imprisonment.In removal proceedings under 8 U.S.C. 1227(a)(2)(E)(i), which makes any noncitizen convicted of a “crime of stalking” removable, the IJ applied the categorical approach, comparing the elements of the relevant state offense with the elements of the federal generic offense. The IJ concluded that Vurimindi was removable. The Third Circuit granted Vurimindi’s petitions for review. The BIA mistakenly found that Vurimindi failed to raise the issue before the IJ; the Pennsylvania stalking offense sweeps more broadly than the federal generic under the categorical approach and is not a removable offense. View "Vurimindi v. Attorney General United States" on Justia Law

The consumers had rental applications denied based on inaccurate consumer reports generated by a consumer reporting agency, RealPage, which would not correct the reports unless the consumers obtained proof of the error from its sources. The identity of RealPage’s sources was not included in the disclosures to the consumers, despite their requests for their files. The consumers sued under the Fair Credit Reporting Act, 15 U.S.C. 1681, to disclose on request “[a]ll information in the consumer’s file at the time of the request” and “[t]he sources of th[at] information,” seeking damages and attorneys’ fees for themselves and on behalf of a purported class and subclass.The district court denied their Rule 23(b)(3) motion for class certification, citing the Rule’s predominance and superiority requirements and finding that their proposed class and subclass were not ascertainable. The Third Circuit vacated. The district court based its predominance analysis on a misinterpretation of Section 1681g(a), erroneously concluding that individualized proof would be needed to distinguish requests for “reports” from those for “files.” The court also misapplied ascertainability precedents. The consumers have standing, having made the requisite showing of the omission of information to which they claim entitlement, “adverse effects” that flow from the omission, and the requisite nexus to the protected “concrete interest.” View "Kelly v. RealPage Inc" on Justia Law

The Clean Water Act empowers citizens to sue for violations of the Act, 33 U.S.C. 1365(a)(1); a citizen-suit plaintiff must “give[] notice of the alleged violation” to the “alleged violator,” and also to the U.S. Environmental Protection Agency and to the state in which the alleged violation occurs. After the plaintiff has provided the required notice, it must wait 60 days before suing, to give the alleged violator an opportunity to bring itself into complete compliance. Shark River Cleanup Coalition, a non-profit citizen’s group, delivered a notice letter alleging a Clean Water Act violation.The Third Circuit affirmed the dismissal of the Coalition's subsequent suit. Under the applicable regulation, Notice regarding an alleged violation “shall include sufficient information to permit the recipient to identify the specific standard, limitation, or order alleged to have been violated, the activity alleged to constitute a violation, the person or persons responsible for the alleged violation, the location of the alleged violation, the date or dates of such violation, and the full name, address, and telephone number of the person giving notice, 40 C.F.R. 135.3(a). The Coalition’s Notice was deficient in that it did not “include sufficient information to permit [Defendants] to identify the specific standard, limitation, or order alleged to have been violated[.]” View "Shark River Cleanup Coalition v. Township of Wall" on Justia Law