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

Under Pennsylvania law, a court may appoint a custodian to take control of a corporation if the corporation’s board of directors is deadlocked or if the directors’ acts are illegal, oppressive, fraudulent, or wasteful. The eight-person FRBK Board of Directors became evenly split into two factions until one of the Hill Directors died. The Madonna Directors immediately used their new numerical advantage to start rearranging the bank’s leadership and took steps to fill the Board vacancy with an ally.The Hill Directors sued. Within hours, the district court ordered the Madonna Directors to cease their actions. Nine days later, without an evidentiary hearing or fact-finding, the court appointed a custodian to take control of FRBK and to hold a special shareholders’ meeting to fill the vacant Board seat. The following month, the court – without prompting from any shareholder or Board member – directed the custodian to add a Board seat and to fill that seat at the special shareholders’ meeting.The Third Circuit reversed. The decision to displace the corporate governance structure of a publicly-traded company did not reflect the required caution, circumspection, or justification for such a drastic step. FRBK’s bylaws describe how the Board should proceed after the death of a director. The Madonna Directors followed those instructions. The court abused its discretion by hastily supplanting the Bylaws with its own process. There was no deadlock, illegality, oppression, or any other ground for appointing a custodian. View "Hill v. Cohen" on Justia Law

In 2007, Transit was awarded an exclusive license to bring telecommunications services to 277 New York City subway stations. Transit subcontracted with Fiber-Span, to develop remote fiber nodes to amplify telecommunication signals in the first six subway stations to receive service. Fiber-Span agreed to subsidize certain developmental costs, hoping to be selected as the contractor for the remaining 271 subway stations. Transit agreed that, if Fiber-Span was not selected to supply nodes for the remaining stations, Transit would reimburse those front-loaded costs. The relationship deteriorated. Transit asserted that Fiber-Span remained in breach of contract even after attempts to remediate problems but nevertheless took the network live. Transit insisted that Fiber-Span replace the nodes. Fiber-Span said it would do so only after it was awarded a contract for the remaining stations. Transit continued to use the nodes for two more years, then sued in New York state court. Fiber-Span filed for bankruptcy.The Third Circuit concluded Transit’s decision to keep using the nodes was consistent with the acceptance of non-conforming goods. Fiber-Span breached the contract; the damages must reflect the difference in value between what Transit received and what it was promised, which is less than what the bankruptcy and district courts awarded. Transit was not required to compensate Fiber-Span for not selecting it to provide nodes for the remaining subway stations. Transit’s claim to the payment on Fiber-Span's performance bond is time-barred. View "In re: Fiber-Span Inc" on Justia Law

In February 2016, C.M. was six years old and in first grade, when he exhibited behavioral problems. The school district determined that he was ineligible for special education and related services because he was not disabled and did not need them. The child’s parents disagreed and sought redress under the Individuals with Disabilities Education Act (IDEA) and section 504 of the Rehabilitation Act. In their administrative grievance, they asserted that the school district violated its statutory obligation to identify, locate, and evaluate children with disabilities, thereby denying their child his statutory right to a free appropriate public education (FAPE). The parents’ claims did not succeed at the administrative level or in the district court. In April 2017, C.M. was diagnosed with autism. The school developed an individualized education program, which his parents agreed to in August 2017, shortly before their son entered third grade. In July 2019, C.M. enrolled in a private school.The Third Circuit affirmed summary judgment in favor of the school district; the district did not violate its “child find” obligations nor deprive C.M. of a FAPE before April 2017. The parents have not exhausted administrative remedies on their claim for tuition reimbursement. View "J. M. v. Summit City Board of Education" on Justia Law

For several years, Adair sold prescription opioid pills in Pittsburgh. She pleaded guilty to a 10-count indictment. At sentencing, the court increased her offense level by four points for being an organizer or leader of extensive criminal activity, U.S.S.G. 3B1.1(a). Although Adair timely pleaded guilty, the government did not move for a one-point reduction for acceptance of responsibility, section 3E1.1(b). The district court calculated Adair’s Sentencing Guidelines range as 188-235 months and granted a downward variance so that Adair received a 168-month prison term for the longest of her concurrent sentences.The Third Circuit affirmed, upholding the imposition of a four-point increase for the organizer-leader enhancement and rejecting an argument that the court should have compelled the government to move for a one-point reduction for acceptance of responsibility. View "United States v. Adair" on Justia Law

The Third Circuit denied Petitioner's petition for review challenging his expedited removal by the Department of Homeland Security (DHS) based on Petitioner's Pennsylvania conviction for receiving stolen property, holding that Petitioner's state conviction was an aggravated felony under the Immigration and Nationality Act (INA), 8 U.S.C. 1101(a)(43)(G).In 2020, DHS initiated expedited removal proceedings against Petitioner, a native and citizen of Mexico, alleging that Petitioner was charged with being deportable under the INA as an alien "convicted of an aggravated felony" because he had been convicted of receiving stolen property. Petitioner requested withholding of removal, arguing that his Pennylvania receiving stolen property conviction was not an aggravated felony under the INA. DHS disagreed, and the immigration judge (IJ) upheld the determination. The Third Circuit denied Petitioner's petition for review, holding that the Pennsylvania offense was sufficient to constitute an aggravated felony under 8 U.S.C. 1101(a)(43)(G). View "Jacome v. Attorney General United States" on Justia Law

A group of insurance companies appealed an order appointing a representative for the interests of unidentified future asbestos and talc claimants in an ongoing bankruptcy proceeding. According to these insurers, who fund the asbestos claims trust established under 11 U.S.C. 524(g), this “future claimants’ representative” (FCR) has a conflict of interest precluding him from serving in this role because the FCR’s law firm also represented two of the insurance companies in a separate asbestos-related coverage dispute.The Third Circuit held that the Bankruptcy Court did not abuse its discretion in appointing the FCR. The court gave due consideration to the purported conflict, and correctly determined that the interests of both the insurance companies and the future claimants were adequately protected. View "In re: Imerys Talc America, Inc." on Justia Law

In 2015, Mitchell was convicted of drug-and gun-related offenses, including two counts of possession of a firearm in furtherance of a drug-trafficking crime, and aiding and abetting such possession, 18 U.S.C. 924(c)(1). After the enactment of the 2018 First Step Act, the Third Circuit vacated Mitchell’s 1,020-month sentence, finding that the sentencing court violated his due process rights.The Third Circuit held that the provisions of the First Step Act do apply to Mitchell’s resentencing. The Act is ambiguous; it applies, prospectively, to all offenses committed after the Act’s enactment but, retroactively, “to any offense that was committed before the date of enactment of this Act, if a sentence for the offense has not been imposed as of [that] date.” The court chose to interpret it broadly to allow the Act’s provisions to apply to a defendant whose pre-Act-unconstitutional sentence was vacated after the Act’s enactment. Because Mitchell’s sentence was fully vacated, he was an unsentenced defendant after the enactment of the Act and entitled to benefit from it. View "United States v. Mitchell" on Justia Law

In response to the Covid-19 pandemic, Port Authority, a municipal bus and light-rail operator, required its uniformed employees to wear face masks. Initially, Port Authority was unable to procure masks for all its employees, so they were required to provide their own. Some employees wore masks bearing political or social-protest messages. Port Authority has long prohibited its uniformed employees from wearing buttons “of a political or social protest nature.” Concerned that such masks would disrupt its workplace, Port Authority prohibited them in July 2020. When several employees wore masks expressing support for Black Lives Matter, Port Authority disciplined them. In September 2020, Port Authority imposed additional restrictions, confining employees to a narrow range of masks. The employees sued, alleging that Port Authority had violated their First Amendment rights.The district court entered a preliminary injunction rescinding discipline imposed under the July policy and preventing Port Authority from enforcing its policy against “Black Lives Matter” masks. The Third Circuit affirmed. The government may limit the speech of its employees more than it may limit the speech of the public, but those limits must still comport with the protections of the First Amendment. Port Authority bears the burden of showing that its policy is constitutional. It has not made that showing. View "Amalgamated Transit Union Local 85 v. Port Authority of Allegheny County" on Justia Law

Pyrotechnics manufactures and sells hardware (a control panel and a field module) and software that control fireworks displays under the “FireOne” brand. Since around 1995, Pyrotechnics’s hardware has used a proprietary protocol. Pyrotechnics’s Romanian competitor, fireTEK, reverse-engineered Pyrotechnics’s hardware to learn its communication protocol. In 2018, fireTEK developed a router that could send analog signals to Pyrotechnics’s field module just like those sent by Pyrotechnics’s control panel.; fireTEK promoted its router as a replacement for Pyrotechnics’s control panel. Pyrotechnics filed a seven-page document describing its protocol (Deposit Copy) with the U.S. Copyright Office and received a Certificate of Registration, indicating the copyrighted work is “text.” Pyrotechnics asserts that it submitted the Deposit Copy as “identifying material” for its protocol under 37 C.F.R. 202.20(c)(2)(viii). Pyrotechnics claims the protocol was first published when it was embedded inside its hardware in 1995.Pyrotechnics sued fireTEK for copyright infringement, tortious interference with prospective contractual relations, and unfair competition, 17 U.S.C. 411(a). The district court entered an injunction. The Third Circuit vacated, finding the copyright invalid. Pyrotechnics’s digital message format is an uncopyrightable idea and the individual digital messages described in the Deposit Copy are insufficiently original to qualify for copyright protection. View "Pyrotechnics Management Inc v. XFX Pyrotechnics LLC" on Justia Law

El-Battouty was a leader of a large-scale online child pornography ring for almost two years. Using an alias, El-Battouty posted several thousand times on the internet chat platform, Discord's servers, which were organized into text channels that functioned as chatrooms. They operated as hierarchical distribution networks for sexually explicit images and videos of minors. Users shared methods to coerce children into producing pornography. El-Battouty used a fictional online persona to deceive minors into believing they were playing a “game” of progressively lewder sex acts with a fellow minor, surreptitiously recorded and then distributed this content to other users on the Discord servers. An undercover FBI agent monitored and preserved content. A search of El-Battouty’s residence pursuant to a warrant recovered digital devices containing thousands of archived sexually explicit images and videos of minors. The devices and El-Battouty’s own statements established his access and use of the servers.Convicted of engaging in a child exploitation enterprise, 18 U.S.C. 2252A(g), he was sentenced to 30 years’ imprisonment, a life term of supervised release, and restitution. The Third Circuit affirmed. The central issue was whether El-Battouty acted alone or conspired with other users on the Discord servers. The statute presents common words and phrases, which the district court explained to the jury in a straightforward way. View "United States v. El-Battouty" on Justia Law