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

Simko began working for U.S. Steel in 2005. In 2012, Simko successfully bid on a new position. During training, Simko requested a new two-way radio to accommodate his hearing impairment. U.S. Steel did not provide the new radio or any other accommodation. Although Simko completed the training, he alleges that his trainer refused to “sign off” that he was able to perform the position’s duties because of his disability. Simko resumed working at his former position.In May 2013, Simko signed an EEOC charge under the Americans with Disabilities Act (ADA), 42 U.S.C. 12101, asserting discrimination and denial of reasonable accommodation In December 2013, U.S. Steel discharged Simko after an incident. In May 2014, Simko was reinstated but was discharged again in August 2014, based on a safety violation. About three months later, the EEOC received Simko's handwritten claim that he was discharged in retaliation for his EEOC filing. In December 2015, the EEOC communicated to Simko’s counsel that it had notified U.S. Steel that an amended charge was pending. In January 2016, Simko’s counsel filed an amended EEOC charge. In February 2019, the EEOC issued a determination of reasonable cause. A right-to-sue letter issued in April 2019.In June 2019, Simko filed suit, asserting only retaliation, without alleging disability discrimination or failure to accommodate. The Sixth Circuit affirmed the dismissal of the complaint. Simko failed to file a timely EEOC charge asserting retaliation. His amended charge claiming retaliation was filed 521 days after his termination. Simko was not entitled to equitable tolling; he was not misled by the EEOC or prevented from filing the amended charge and offered no reason why he could not file a timely claim. View "Simko v. United States Steel Corp." on Justia Law

The Appellants, with a $594,000 Small Business Administration loan, bought a Harrisburg, Pennsylvania property that became a pub. They executed a note, mortgage, and unconditional guarantees, providing that federal law would control the enforcement of the note and guarantees and that they could not invoke any state or local law to deny their obligations. The Appellants defaulted on the loan and sold the property. The SBA allowed the sale to proceed but declined to release the Appellants from their loan obligations, which were assigned to CBE for collection. The Appellants sued, citing the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, and the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL). CBE sought sanctions under Federal Rules 11 and 37, arguing that the Appellants brought frivolous claims and disobeyed discovery orders. The Appellants filed an untimely brief opposing sanctions and summary judgment, which did not include the separate responsive statement of material facts required by Local Rule. The district court granted summary judgment and denied the sanctions motions, reasoning that neither FDCPA not UTPCPL applies to commercial debts and the Appellants identified no material facts supporting their other claims. The Third Circuit affirmed and granted CBE FRAP 38 damages. The Appellants filed a brief that was essentially a copy of the one filed in the district court. The substance of their appeal “is as frivolous as its form.” View "Conboy v. United States Small Business Administration" on Justia Law

Orexigen produced a weight management drug, Contrave. In June 2016, Orexigen agreed to sell Contrave to McKesson, which provided the drug to pharmacies. The Distribution Agreement permitted “each of [McKesson] and its affiliates … to set-off, recoup and apply any amounts owed by it to [Orexigen’s] affiliates against any [and] all amounts owed by [Orexigen] or its affiliates to any of [McKesson] or its affiliates.” MPRS and Orexigen entered into a “Services Agreement” weeks later; MPRS managed a customer loyalty discount program for Orexigen. MPRS would advance funds to pharmacies selling Contrave and later be reimbursed by Orexigen. The agreements did not reference each other. McKesson and MPRS were distinct legal entities.When Orexigen filed its 2018 Chapter 11 petition, it owed MPRS $9.1 million under the Services Agreement. McKesson owed Orexigen $6.9 million under the Distribution Agreement. With setoff, Orexigen would have owed MPRS $2.2 million; McKesson would have owed Orexigen nothing. McKesson objected to a sale of Orexigen's assets. McKesson agreed to pay the $6.9 million receivable; Orexigen agreed to keep that sum segregated pending resolution of the setoff dispute. Parties may invoke setoff rights when the debts they owe one another are mutual, 11 U.S.C. 553.The bankruptcy court, the district court, and the Third Circuit rejected McKesson’s request to set off its debt by the amount Orexigen owed MPRS. McKesson wanted a triangular setoff, not a mutual one, as allowable under section 553. View "In re: Orexigen Therapeutics, Inc." on Justia Law

Motorized-wheelchair users filed a purported class action, alleging that Uber discriminated against individuals with mobility disabilities by not offering a “wheelchair accessible vehicle” (WAV) option in the Pittsburgh area, citing the Americans with Disabilities Act (ADA), 42 U.S.C. 12181. They argued that but for the unavailability of WAVs, Plaintiffs would download the Uber app and use its ridesharing service. Uber moved to compel arbitration under the Federal Arbitration Act, 9 U.S.C. 3–4, contending that although Plaintiffs had never registered for an Uber account or accepted its Terms of Use, they were nevertheless bound by the mandatory arbitration clause of that agreement; Plaintiffs could not establish standing to sue in federal court unless they “step into the shoes” of actual Uber Rider App users.The Third Circuit affirmed an order denying Uber’s motion. Plaintiffs’ failure to download the Uber app, agree to the terms and perform the “futile gesture” of requesting a WAV ride did not prevent them from pleading an injury in fact. Plaintiffs’ disability discrimination claim did not rely on or concerncUber’s Terms of Use, but was based on the ADA. On interlocutory appeal from the denial of a motion to compel arbitration, appellate jurisdiction is confined to review of that order; the court has no independent obligation to review non-appealable orders, even jurisdictional ones concerning standing. View "O'Hanlon v. Uber Technologies Inc" on Justia Law

Klotz’s now-deceased husband received medical services from the Hospital and incurred a $1,580 debt; he left no estate. The Hospital retained CSW to collect the debt. CSW mailed collection letters to Klotz. Klotz claims she is not liable for the debt, arguing that the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691, preempts New Jersey’s common-law doctrine of necessaries (where a spouse is jointly liable for necessary expenses incurred by the other spouse) and sued CSW for violating the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e and 1692f. Preemption of the doctrine would allow Klotz to pursue her FDCPA case. The Third Circuit affirmed the dismissal of the case. The ECOA does not preempt New Jersey’s doctrine of necessaries. One ECOA regulation provides that “a creditor shall not require the signature of an applicant’s spouse . . . on any credit instrument if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested.” Rejecting an argument that the doctrine effectively treats her as a spousal co-signer in violation of the spousal-signature prohibition, the court reasoned that Klotz’s medical debt falls within an exemption for incidental credit and rejected an argument that CSW failed to follow the procedural requirements of the doctrine of necessaries. View "Klotz v. Celentano Stadtmauer and Wale LLP" on Justia Law

Dansko conducted due diligence to replace the trustee for its employee stock ownership plan. Benefit falsely denied having been recently been investigated by the Department of Labor. Dansko’s board passed a resolution appointing Benefit as the new trustee under the Trust Agreement. Around that time, Dansko decided to refinance its debt. Benefit never agreed in writing to help with the refinance but allegedly said it would “be able to do the [deal]” and estimated that it would need a month or more to do due diligence for the trust. Dansko thought Benefit would be the trustee for the deal. In December 2014, Benefit told Dansko that it would not serve as trustee for the debt deal, which delayed the deal and allegedly cost Dansko more than $2 million in extra interest.Dansko sued Benefit, alleging breach of the trust agreement, breach of an implied promise (promissory estoppel), and that Benefit fraudulently induced Dansko to hire it by falsely denying the DOL investigation. Benefit counterclaimed for its defense costs under an indemnification clause in the trust agreement. The district court rejected Dansko’s claims but held that Dansko did not have to indemnify Benefit for its defense costs. Applying Pennsylvania law, the Third Circuit vacated. The court erred in rejecting Dansko’s contract, estoppel, and fraud claims but under the trust agreement, Dansko must advance the trustee’s reasonable litigation expenses. View "Dansko Holdings Inc. v. Benefit Trust Co." on Justia Law

Moyer failed to pay her credit-card debt. The card issuer hired Patenaude to collect it. Patenaude sent Moyer a one-page, single-sided collection letter that stated: If you wish to eliminate further collection action, please contact us at …. This is an attempt to collect a debt and any information obtained will be used for that purpose. Moyer sued Patenaude under the Fair Debt Collection Practices Act (FDCPA), arguing the letter’s second sentence, “to eliminate further collection action, please contact us," would deceive a debtor and lead a debtor to believe that a phone call is a “legally effective way to stop such collection action” when, in reality, only written communication can legally stop collection activity. Moyer claimed that the Contact Sentence would make a debtor uncertain about her right to dispute the debt in writing.The Third Circuit affirmed summary judgment in favor of Patenaude. The letter included statements that inform the consumer how to obtain verification of the debt and that she had 30 days in which to do so. Patenaude invited Moyer to call to “eliminate” collection action, but never asserted, explicitly or implicitly, that the phone call would, by law, force Patenaude to cease its collection efforts. View "Moyer v. Patenaude & Felix A.P.C." on Justia Law

The Pennsylvania Department of General Services (DGS) solicited bids for a Shenango Township Youth Development Center, closed since 2013. HIRA, a consultant for Islamic educational groups, submitted the highest bid, $400,000, planning to establish a youth intervention center and Islamic boarding school. DGS and HIRA entered into a contract. Legislators sent a letter to Governor Wolf, claiming HIRA was not in a financial position to turn the property into an economic driver, that New Jersey had revoked HIRA’s corporate status, that HIRA reported low income, that HIRA had not returned their phone calls, and that contract paperwork remained incomplete. When Governor Wolf did not act, the Legislators spoke with the press and at a community meeting where some participants made comments about Muslims. Lawrence County opened a criminal investigation into the bidding process. The Legislators tried, unsuccessfully, to pass a law divesting DGS of authority to sell the property, then tried to persuade DGS to halt the sale. Shenango Township rezoned the property.The sale fell through. DGS solicited new bids. HIRA offered $500,000; another group offered $2,000,000. Legislators promised to ensure the new purchaser secured funding. HIRA sued the officials, including the Legislators in their individual capacities, citing the Religious Land Use and Institutionalized Persons Act, the Pennsylvania Religious Freedom Protection Act, and 42 U.S.C. 1983. The district court denied the Legislators’ motions to dismiss. The Third Circuit reversed in part. Whether HIRA alleged conduct outside the sphere of legitimate legislative activities or that violates clearly established law is a question of law over which it had jurisdiction. Some of the allegations concerned “quintessentially legislative activities” for purposes of absolute immunity. Other allegations fell “well short of showing that the rights [HIRA] seeks to vindicate here were clearly established” for purposes of qualified immunity. View "HIRA Educational Services North America v. Augustine" on Justia Law

The Debtors’ most valuable asset was an economic interest in Texas’s largest power transmission and distribution company, which NextEra agreed to buy through a Merger Agreement. The sale was not approved by the Public Utility Commission and did not go through. NextEra sought a $275 million Termination Fee. The Bankruptcy Court and Third Circuit rejected that claim. NextEra then sought to recover approximately $60 million in administrative fees under 11 U.S.C. 503(b)(1)(A), arguing that the Merger Agreement required the parties to bear their own expenses. The district court affirmed the Bankruptcy Court’s dismissal, finding that NextEra failed to benefit the estate. The Third Circuit reversed.NextEra plausibly alleged that through a post-petition transaction, the Merger Agreement, it benefitted the estate by providing valuable information, and accepting certain risks, that paved the way for a later deal. The precise monetary value of this benefit and the costs imposed on the estate cannot be distilled from pleadings alone. NextEra plausibly alleged that it is not foreclosed from receiving administrative expenses under Section 503(b)(1)(A). Although NextEra and the Debtors entered into an agreement that generally provided each party would bear its own costs, the agreement exempted from that general rule expenses addressed in the Plan of Reorganization, which unambiguously provides for the recovery of administrative claims under Section 503(b). View "In re: Energy Future Holdings Corp." on Justia Law

Counterman entered a plea of guilty to possession with intent to distribute in excess of 50 grams of methamphetamine, money laundering, and aiding and abetting. His contemporaneously-filed plea agreement stated that the possession charge carried a mandatory minimum period of imprisonment of 20 years. The government subsequently submitted an “Information of Prior Convictions” under 21 U.S.C. 851(a), which resulted in the imposition of an enhanced sentence of 144 months.The Third Circuit vacated. Under 21 U.S.C. 851(a)(1), no person convicted of Counterman's drug offense "shall be sentenced to increased punishment by reason of one or more prior convictions, unless before trial, or before entry of a plea of guilty, the United States attorney files an information with the court . . . stating in writing the previous convictions to be relied upon.” The court rejected arguments that Counterman received actual notice of the enhancement and that the sentence imposed falls within the pre-enhancement range contemplated by statute and the Sentencing Guidelines. The filing of a 21 U.S.C. 851(a)(1) information is mandatory. Counterman, without actual notice of the government’s intent to rely on a particular prior conviction for an enhancement and the attendant opportunity to contest it, waived his trial rights. The error affected Counterman’s substantial rights and the fundamental fairness of the proceeding. View "United States v. Counterman" on Justia Law