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

Yellow Corporation, a major trucking company, ceased operations and filed for bankruptcy in 2023. As a result, it withdrew from several multiemployer pension plans, triggering withdrawal liability—an amount owed to the pension plans to cover unfunded vested benefits for employees. The pension plans, which had received substantial federal funds under the American Rescue Plan Act of 2021 (ARPA) to stabilize their finances, filed claims against Yellow’s bankruptcy estate for withdrawal liability. The dispute centered on how much of the ARPA funds should be counted as plan assets when calculating Yellow’s liability, as well as whether certain contractual terms could require Yellow to pay a higher withdrawal liability than statutory minimums.The United States Bankruptcy Court for the District of Delaware reviewed the claims. It upheld two regulations issued by the Pension Benefit Guaranty Corporation (PBGC): the Phase-In Regulation, which requires ARPA funds to be counted as plan assets gradually over time, and the No-Receivables Regulation, which bars plans from counting ARPA funds as assets before they are actually received. The Bankruptcy Court found these regulations to be valid exercises of PBGC’s authority and not arbitrary or capricious. It also ruled that two pension plans could enforce a contractual provision requiring Yellow to pay withdrawal liability at a higher, agreed-upon rate, rather than the rate based solely on its actual contributions.On direct appeal, the United States Court of Appeals for the Third Circuit affirmed the Bankruptcy Court’s order. The Third Circuit held that the PBGC’s regulations were valid under ARPA and ERISA, as Congress had expressly delegated authority to the PBGC to set reasonable conditions on the allocation of plan assets and withdrawal liability. The court also held that pension plans could enforce contractual terms requiring higher withdrawal liability, as the statutory scheme sets a floor, not a ceiling, for such liability. View "In re: Yellow Corporation" on Justia Law

A car leasing company leased a vehicle to an individual who defaulted on payments soon after the lease began. Despite having the right to repossess the car, the company did not do so. Two years later, the lessee was stopped by police in Butler, New Jersey, for driving with a suspended license, suspended registration, and no insurance. The police seized the car and had it towed by a contractor, Malanga’s Automotive. The lessee was informed of the tow but did not retrieve the vehicle. The towing company did not notify the leasing company that it possessed the car until nearly a year later, at which point it demanded payment of towing and storage fees before releasing the vehicle.The leasing company filed suit in the Superior Court of New Jersey against the towing company, later adding the Borough of Butler as a defendant and asserting claims under 42 U.S.C. § 1983 for violations of the Fourteenth Amendment’s Due Process Clause, the Fourth Amendment, and the Fifth Amendment. The case was removed to the United States District Court for the District of New Jersey, which granted summary judgment to Butler on all claims. The District Court found that the company had a property interest in the vehicle but concluded that Butler’s policies provided sufficient notice and opportunity to be heard, and that the seizure and retention of the vehicle were reasonable and did not constitute a taking.On appeal, the United States Court of Appeals for the Third Circuit held that Butler’s policies violated the Fourteenth Amendment’s Due Process Clause because they failed to require prompt notice to all holders of property rights in seized vehicles and did not provide an opportunity for a hearing to challenge the lawfulness of the tow or the fees. The court reversed and remanded the due process claim. However, it affirmed the District Court’s judgment on the Fourth and Fifth Amendment claims, finding no unreasonable seizure or unconstitutional taking. View "Honda Lease Trust v. Malanga's Automotive" on Justia Law

Five teenage boys disappeared in Newark, New Jersey, in 1978, and the case remained unsolved for decades. In 2008, police charged Lee Evans with their murders, relying primarily on a confession from Philander Hampton, Evans’s cousin. Evans was later acquitted at trial. He then filed a civil lawsuit, alleging that Detectives Lou Carrega and William Tietjen coerced Hampton’s confession and fabricated evidence to implicate him. Hampton later recanted, stating that his confession was false and coerced by the detectives.The United States District Court for the District of New Jersey reviewed the case after Evans brought claims for malicious prosecution against the detectives. The detectives moved for summary judgment, arguing they were entitled to qualified immunity. The District Court denied summary judgment on the malicious prosecution claims, finding that a reasonable jury could conclude the detectives made reckless, material omissions by failing to disclose that Hampton’s confession was coerced, and that these omissions led to Evans’s prosecution without probable cause. The detectives appealed this decision.The United States Court of Appeals for the Third Circuit reviewed the District Court’s denial of summary judgment. The Third Circuit held that qualified immunity does not shield law enforcement officers from liability for malicious prosecution when the prosecution is based on evidence that was allegedly manufactured or coerced. The court affirmed the District Court’s order denying summary judgment to the detectives on the malicious prosecution claim, concluding that a reasonable jury could find the officers violated Evans’s constitutional rights by arresting and prosecuting him without probable cause, based on fabricated evidence. The court also remanded for further consideration of the timeliness of Evans’s separate fabrication of evidence claim. View "Evans v. City of Newark" on Justia Law

An incarcerated individual alleged that, while detained at a county jail, he was assaulted by corrections officers, resulting in a fractured orbital bone, denied proper medical care, and unlawfully restrained for an extended period. He claimed to have submitted a grievance regarding the incident by placing it in the slot of his cell door, as he was in segregated housing and could not access the grievance box directly. The jail officials disputed his account, asserting that their use of force was justified, that he received prompt medical attention, and that he was restrained for a shorter period than he claimed.The United States District Court for the Western District of Pennsylvania reviewed the case after both parties moved for summary judgment. The defendants argued that the plaintiff failed to exhaust administrative remedies as required by the Prison Litigation Reform Act, supporting their position with a declaration that no grievance from the plaintiff was found in the jail’s records. The plaintiff, proceeding without counsel, reiterated his claim of submitting a grievance, but did so only in unsworn statements within his complaint and opposition brief. The District Court concluded that these unsworn statements could not be considered as evidence and granted summary judgment in favor of all defendants on the basis of non-exhaustion.The United States Court of Appeals for the Third Circuit reviewed the District Court’s decision. The Third Circuit held that, while unsworn statements cannot create a genuine dispute of material fact at summary judgment, the District Court erred in concluding it was entirely barred from considering such statements for other purposes, such as deciding whether to permit the plaintiff an opportunity to cure procedural defects under Federal Rule of Civil Procedure 56(e). The Third Circuit vacated the District Court’s grant of summary judgment and remanded the case for further proceedings consistent with its opinion. View "Lauria v. Lieb" on Justia Law

A pharmaceutical company challenged provisions of the Inflation Reduction Act of 2022, which established a program requiring the Department of Health and Human Services, through the Centers for Medicare and Medicaid Services (CMS), to negotiate maximum fair prices for certain high-cost prescription drugs covered by Medicare. The company’s drug was selected for the program, and it signed the required agreements to participate. The program imposes significant penalties and an excise tax on manufacturers who do not comply, but allows manufacturers to exit Medicare and Medicaid programs to avoid the tax, a process the company argued was not a realistic option.After its drug was selected, the company filed suit in the United States District Court for the District of New Jersey, alleging that the program violated the Eighth Amendment’s Excessive Fines Clause, the Fifth Amendment’s Takings Clause, and the First Amendment’s Free Speech Clause. The District Court granted summary judgment for the government, holding that participation in the program is voluntary and that the program primarily regulates conduct, not speech. The court also found it lacked jurisdiction over the Eighth Amendment claim due to the Tax Anti-Injunction Act and the Declaratory Judgment Act.On appeal, the United States Court of Appeals for the Third Circuit affirmed. The court held that the company’s Eighth Amendment claim was barred by the Tax Anti-Injunction Act and the Declaratory Judgment Act, as the relief sought would restrain the assessment or collection of a federal tax. The court further held that the program does not violate the Takings Clause or the First Amendment, relying on its recent precedent. The judgment of the District Court was affirmed. View "Novartis Pharmaceuticals Corp v. Secretary Department of Health" on Justia Law

Whittaker, Clark & Daniels, Inc. and its affiliates, former processors and distributors of industrial chemicals including talc, faced thousands of asbestos-related tort claims after selling their operating assets in 2004. In 2023, following a $29 million jury verdict in South Carolina for a plaintiff diagnosed with mesothelioma, the South Carolina Court of Common Pleas appointed a receiver to manage Whittaker’s assets. The receiver was granted broad authority to administer Whittaker’s assets and protect its interests, but the order did not explicitly remove the board’s authority over corporate affairs.Whittaker’s board, without consulting the receiver, authorized a bankruptcy filing in the United States Bankruptcy Court for the District of New Jersey. The receiver moved to dismiss the bankruptcy, arguing that only he had authority to file. The Bankruptcy Court denied the motion, finding the board retained authority under New Jersey law, and the United States District Court for the District of New Jersey affirmed. Meanwhile, the Official Committee of Talc Claimants intervened in an adversary proceeding, contesting whether certain successor liability claims against a nondebtor (Brenntag) were property of the bankruptcy estate. The Bankruptcy Court granted summary judgment to the debtors, holding that these claims belonged to the estate, and certified the decision for direct appeal.The United States Court of Appeals for the Third Circuit affirmed both lower courts. It held that an improperly filed bankruptcy petition is not a jurisdictional defect but may be grounds for dismissal. The court determined that under New Jersey law, the board retained authority to file for bankruptcy because the South Carolina receiver had not been recognized by a New Jersey court. The court also held that successor liability claims based on a “product line” theory are general claims belonging to the bankruptcy estate, not to individual creditors, following its precedent in In re Emoral. View "In re Whittaker Clark & Daniels Inc." on Justia Law

After the Supreme Court’s decision in New York State Rifle & Pistol Association v. Bruen, which struck down New York’s “proper cause” requirement for public handgun carry, New Jersey enacted Chapter 131. This law removed its own “justifiable need” standard but imposed new licensing requirements, increased permit fees, mandated liability insurance for handgun carriers, and designated numerous “sensitive places” where firearms are prohibited, such as parks, entertainment venues, healthcare facilities, and private property without express consent. Two groups of plaintiffs, including individuals and gun rights organizations, challenged these provisions under 42 U.S.C. § 1983, arguing they violated the Second Amendment.The United States District Court for the District of New Jersey consolidated the cases and allowed legislative leaders to intervene as defendants. The District Court preliminarily enjoined enforcement of several “sensitive place” restrictions, the vehicle carry ban, the liability insurance requirement, and the private property default rule, finding these likely unconstitutional under Bruen’s historical tradition test. The State and some plaintiffs appealed, and the Third Circuit Court of Appeals granted a partial stay, allowing most of the law to take effect pending appeal.The United States Court of Appeals for the Third Circuit reviewed the District Court’s preliminary injunction, applying de novo review to the underlying Second Amendment questions. The Third Circuit held that most of New Jersey’s “sensitive place” restrictions—such as those covering parks, entertainment venues, healthcare facilities, libraries, museums, and places serving alcohol—are likely constitutional, finding them consistent with a historical tradition of regulating firearms in locations set aside for civic, educational, or recreational purposes. However, the court affirmed the injunction against the liability insurance mandate, the portion of the permit fee allocated to the Victims of Crime Compensation Office, the private property default rule as applied to places open to the public, and the ban on carrying operable firearms in private vehicles, holding these provisions likely violate the Second Amendment. The court vacated the injunction as to film sets and certain hunting regulations for lack of standing or mootness, and remanded for further proceedings consistent with its opinion. View "Koons v. Attorney General New Jersey" on Justia Law

A philosophy lecturer at a public university in New Jersey had his contract non-renewed after his private, off-campus comments and writings about race, politics, and immigration became public. These included controversial essays and recorded conversations, which were later featured in a New York Times article. The university received some complaints from students, faculty, and outside parties, and several faculty groups issued public statements condemning the lecturer’s views. The university placed him on paid leave, conducted an investigation into his outside activities and class attendance, and ultimately decided not to renew his contract, citing both the content of his speech and alleged policy violations.The United States District Court for the District of New Jersey granted summary judgment in favor of the university, holding that the lecturer’s speech was not protected by the First Amendment. The court found that the university’s interest in mitigating disruption outweighed the lecturer’s interest in expressing his views. The District Court did not address whether the speech was a substantial or motivating factor in the non-renewal, whether the same action would have occurred absent the speech, or whether university officials were entitled to qualified immunity.The United States Court of Appeals for the Third Circuit reviewed the case and reversed the District Court’s judgment. The Third Circuit held that the lecturer’s off-campus, extramural speech on matters of public concern was protected by the First Amendment, and that the university had not demonstrated sufficient disruption to outweigh the lecturer’s interest in his speech under the Pickering balancing test. The court found the evidence of disruption minimal and insufficient to justify the adverse employment action. The judgment was vacated and the case remanded for further proceedings. View "Jason Jorjani v. New Jersey Institute of Technology" on Justia Law

A company sought approval to construct electricity transmission lines in Pennsylvania as part of a larger project selected through a federally supervised regional planning process. The project was designed to alleviate regional congestion on the electricity grid, which would lower wholesale electricity costs in certain states but increase costs for some Pennsylvania consumers. The regional transmission organization (PJM), acting under Federal Energy Regulatory Commission (FERC) rules, selected the project using a benefit-cost methodology approved by FERC.The Pennsylvania Public Utility Commission (PUC) reviewed the company’s applications for siting and eminent domain authority. After an evidentiary hearing, an administrative law judge recommended denial, finding that the project was no longer needed due to decreased congestion and that the benefit-cost analysis used by PJM was deficient under Pennsylvania law. The PUC adopted this recommendation, denied the applications, and rescinded the company’s provisional certificate of public convenience. The company appealed to the Pennsylvania Commonwealth Court, which affirmed the PUC’s decision. The company then pursued federal constitutional claims in the United States District Court for the Middle District of Pennsylvania, reserving those issues in state court.The United States Court of Appeals for the Third Circuit reviewed the case. It held that the PUC’s order was preempted under the Supremacy Clause of the U.S. Constitution because it posed an obstacle to federal objectives established by Congress and implemented by FERC—specifically, the regional planning and congestion-reduction process. The court found that the PUC’s independent “need” determination, which second-guessed PJM’s FERC-approved methodology, impermissibly conflicted with federal law. The Third Circuit affirmed the District Court’s judgment for the company and did not reach the dormant Commerce Clause issues. View "Transource Pennsylvania LLC v. DeFrank" on Justia Law

Marquis Smalls pleaded guilty in 2013 to conspiring to distribute heroin and was sentenced by the United States District Court for the District of New Jersey to 110 months’ imprisonment followed by five years of supervised release. His supervised release was conditioned on compliance with certain terms, including not committing new crimes or illegally possessing controlled substances. After his release in December 2020, Smalls repeatedly violated these conditions, resulting in multiple periods of home detention. In June 2024, he was arrested by state officials on heroin-trafficking charges, and the United States Probation Office charged him with eight violations of supervised release, successfully petitioning for a federal arrest warrant. Upon release from state custody, Smalls was transferred to federal custody and presented before the District Court for an initial appearance, where he was ordered detained pending a final revocation hearing. Smalls waived his right to a preliminary hearing.Smalls later moved for release from custody, citing a district court opinion from the District of Connecticut in United States v. Mercado, which held that no statute authorized pre-revocation detention for supervised release violations. The District Court for the District of New Jersey denied Smalls’s motion, finding it had authority to detain him under Federal Rule of Criminal Procedure 32.1(a)(6) and 18 U.S.C. § 3143(a)(1), based on flight risk and danger to the community. Smalls appealed to the United States Court of Appeals for the Third Circuit, which denied his motion for release in a summary order. Smalls then filed a petition for rehearing.The United States Court of Appeals for the Third Circuit granted the petition for rehearing to provide a precedential explanation but again denied Smalls’s motion for release. The court held that 18 U.S.C. § 3143(a)(1) authorizes detention of a defendant alleged to have violated supervised release pending revocation proceedings, as such detention is part of the execution of the original sentence. The court affirmed the District Court’s authority to detain Smalls pending his final revocation hearing. View "USA v. Smalls" on Justia Law