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

Denby-Peterson purchased a Chevrolet Corvette. Several months later, the Corvette was repossessed by creditors after Denby-Peterson defaulted on her car payments. Denby-Peterson subsequently filed an emergency voluntary Chapter 13 petition, notified the creditors of the bankruptcy filing, and demanded that they return the Corvette to her. They did not comply with her demand. Denby-Peterson filed a motion in the Bankruptcy Court, seeking to require the creditors to return the Corvette and sanctions for alleged violation of the Bankruptcy Code’s automatic stay. The court ordered turnover of the Corvette to Denby-Peterson but denied her request for sanctions. The district court and Third Circuit affirmed. As a matter of first impression, the Third Circuit held that a secured creditor’s failure to return collateral that was repossessed pre-bankruptcy petition upon notice of the debtor’s bankruptcy is not a violation of the automatic stay. A secured creditor does not have an affirmative obligation under the automatic stay to return a debtor’s collateral to the bankruptcy estate immediately upon notice of the debtor’s bankruptcy because failure to return the collateral received pre-petition does not constitute “an[] act . . . to exercise control over property of the estate,” 11 U.S.C. 362(a)(3). View "In re: Denby-Peterson" on Justia Law

Stern was crushed between multi-ton pieces of mining equipment. The mine section supervisor, McDonald, got to the scene minutes later and called for an ambulance. Smith, a “fire boss mine examiner” and EMT, placed Stern in a neck brace. Stern never lost consciousness or the ability to respond to questions, nor did he have any problem with his pulse or breathing but he had signs of internal bleeding. McDonald and Smith requested a helicopter medevac service. The mine safety supervisor, Tennant, was called at home and went to the scene. He called the Mine Safety and Health Administration (MSHA) about two hours later. Mine operators must notify MSHA within 15 minutes after the occurrence of an injury having “a reasonable potential to cause death,” 30 U.S.C. 813(j). The Federal Mine Safety and Health Review Commission and the Third Circuit upheld a citation based on the delay. Reasonable doubts must be resolved in favor of notifying MSHA; liability assessed based on whether a reasonable person in the circumstances would view the injuries as having a reasonable potential to cause death. The totality of the circumstances must be considered with the focus on the information available around the time of the injury; posthoc medical evidence is less probative. Given the knowledge and training possessed by Tennant, McDonald, and Smith, a reasonable person possessing the available information would have concluded there was a reasonable potential for death. View "Consol Pennsylvania Coal Co., LLC v. Mine Safety & Health Review Commission" on Justia Law

Healthcare managed investment funds. Investors filed an involuntary bankruptcy petition with the intention of seeking Healthcare's removal as the fund manager. Healthcare was not served with process; the petition was uncontested. The bankruptcy court entered an order for relief. Healthcare was removed as the fund manager. The investors installed Summit as the new manager. Summit then dissolved the funds. About a month later, having learned what had transpired, Healthcare successfully moved to vacate the order for relief. Healthcare opposed dismissal asserting that it had claims for damages under 11 U.S.C. 303(i) because the investors filed the petition in bad faith. The bankruptcy court granted the investors’ motion for voluntary dismissal but retained jurisdiction, stating that “nothing herein shall limit [Healthcare’s] right to seek damages, including without limitation, fees and costs.” Healthcare sought section 303(i) damages and instituted an adversary proceeding against the investors asserting section 362(k) claims for violation of the automatic stay by the removal of Healthcare as the fund manager and the installation of Summit without court orders. The district court affirmed the dismissal of the 362(k) action. The Third Circuit reversed and remanded for reinstatement of the claim. The bankruptcy court had jurisdiction over Healthcare’s 362(k) adversary action. A section 362(k) action, no matter when instituted, is a case under title 11. The bankruptcy court lacked authority to limit what claims Healthcare could bring in the bankruptcy court after the dismissal of the bankruptcy petition. View "In re: Healthcare Real Estate Partners LLC" on Justia Law

Planned Parenthood was the site of numerous clashes between opponents and advocates of abortion rights, including bomb threats, vandalism, and blockades. The police deployed an overtime detail to maintain order. After Pittsburgh was declared a financially distressed municipality in 2003, the detail was discontinued. Police were called as needed. The clinic reported an “obvious escalation.” The City Council held hearings on proposed legislation. Many witnesses expounded on the competing interests and expressed a desire to protect both free speech and access to healthcare, including abortions. A member of the police overtime detail attested that the criminal laws were not adequate. The Ordinance states that “[n]o person or persons shall knowingly congregate, patrol, picket or demonstrate” in a 15-foot “buffer zone” outside the entrance of any hospital or healthcare facility. Plaintiffs engage in leafletting and “peaceful . . . one-on-one conversations” conducted “at a normal conversational level and distance” intended to dissuade listeners from obtaining an abortion. The city asserted that the Ordinance applies to this “sidewalk counseling,” The Third Circuit affirmed summary judgment in favor of the city, concluding that the Ordinance does not cover sidewalk counseling and thus does not impose a significant burden on speech. The Ordinance prohibits “congregat[ing],” “patrol[ling],” “picket[ing],” and “demonstrat[ing],” saying nothing about leafletting or one-on-one conversations. Nor does it mention a particular topic or purpose. With respect to the listed activities, the Ordinance is “narrowly tailored to serve a significant governmental interest.” View "Bruni v. City of Pittsburgh" on Justia Law

Orie, a former state senator, used her government-funded legislative staff to do fundraising and campaigning for her reelection. When the Commonwealth investigated, she tried to hide and destroy documents. Orie's sisters, including a Pennsylvania Supreme Court Justice, were also charged. At trial, Orie introduced exhibits with directives to her chief of staff, not to do political work on legislative time. The prosecution determined that these exhibits had forged signatures. The court found that the forged documents were “a fraud on the Court,” and declared a mistrial. The Secret Service subsequently found that many of the exhibits were forged. During Orie’s second trial, the prosecution's expert testified that Orie’s office lease barred her staff from using that office for anything besides legislative work. Orie unsuccessfully sought to call an expert to testify that the senate rules let staff do political work from legislative offices on comp time. Orie was convicted of theft of services, conspiracy, evidence tampering, forgery, and of using her political position for personal gain, in violation of the Pennsylvania Ethics Act. The Third Circuit affirmed the denial of her federal habeas petition, first finding that it lacked jurisdiction to consider her Ethics Act challenge because she is not in custody for those convictions. The court rejected a double jeopardy argument. The state court reasonably found that a mistrial was manifestly necessary because the forged documents could have tainted the jury’s verdict. Orie did not show that her senate-rules expert’s testimony would have been material, so she had no constitutional right to call that witness. View "Orie v. Secretary Pennsylvania Department of Corrections" on Justia Law

Javitz accepted an “at-will” position as Luzerne County's Director of Human Resources. Javitz participated in meetings with the American Federation of State, County, and Municipal Employees (AFSCME), which resulted in ASFSCME filing an unfair labor practices suit. Javitz claimed that a document filed in that lawsuit was a transcript of the meetings. She suspected that a county employee had recorded the meeting without Javitz’s consent—a crime under Pennsylvania law. Javitz's supervisor agreed that the meeting may have been recorded; they met with the District Attorney, who indicated that she would refer the matter to the Office of the Attorney General due to a conflict of interest. Javitz claims that the County Manager intervened and instructed the District Attorney to drop the matter. Javitz followed up about the investigation. Javitz alleges that county employees retaliated against her. Within weeks Javitz was fired. The County maintains that Javitz was fired because of her conduct toward unions, her failure to follow directions, and her handling of employment applications. The district court rejected her claims under 42 U.S.C. 1983. The Third Circuit affirmed that Javitz did not have a property interest in her employment; her termination did not violate her due process rights. The court reversed as to a First Amendment claim: Who Javitz spoke to, what she spoke about, and why she spoke fall outside the scope of her primary job duties. Javitz was a citizen speaking to a matter of public concern. View "Javitz v. County of Luzerne" on Justia Law

Plaintiffs, part-time Worthington police officers, were paid hourly wages. The Borough terminated their employment without affording any process. Plaintiffs sued under 42 U.S.C., claiming that the state’s Borough Code or Tenure Act conferred a constitutionally-protected property interest in their continued employment and that the lack of any process violated their due process rights. The Third Circuit certified questions of state law to the Pennsylvania Supreme Court. That court responded that the “civil service protections embodied in the Borough Code and the Tenure Act are ... intended to govern all borough police forces” and the Borough Code's “normal working hours” criterion should be employed to determine how many members a borough police force has for purposes of deciding whether the Tenure Act’s two-officer maximum or the Borough Code’s three-officer minimum is implicated. The Borough Code's exclusion for “extra police” does not apply to part-time officers who are not extra police. In this case, the plaintiffs were part-time officers, but not necessarily “extra police” so the exclusion was irrelevant. An hourly wage compensation that satisfies the Borough Code criteria of being officers “paid a salary or compensation." Part-time work “is not dispositive.” The Third Circuit concluded that the plaintiffs may have a property interest sufficient to support their procedural due process claims and remanded. View "Evan Townsend v. Borough of Worthington" on Justia Law

Gentile, the owner of a New York broker-dealer, was involved in two pump-and-dump schemes to manipulate penny stocks in 2007-2008. Gentile was arrested in 2012 and agreed to cooperate, but the deal fell apart in 2016. The indictment was dismissed as untimely. Gentile was still the CEO of a Bahamas-based brokerage and the beneficial owner of a broker-dealer; he had expressed an intention to expand that brokerage and hire new employees. The SEC filed a civil enforcement action eight years after Gentile’s involvement in the second scheme, seeking an injunction against further securities law violations and an injunction barring participation in the penny stock industry. A five-year statute of limitations applies to any “action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise,” 28 U.S.C. 2462. The Supreme Court has held that “[d]isgorgement in the securities-enforcement context” is a “penalty” subject to that five-year limitations period. The district court dismissed, holding that those remedies were penalties. The Third Circuit vacated; 15 U.S.C. 78u(d) does not permit the issuance of punitive injunctions, so the injunctions at issue do not fall within the reach of section 2462. The court remanded for a determination of whether the injunctions sought are permitted under section 78u(d). View "Securities and Exchange Commission v. Gentile" on Justia Law

The 1992 federal Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. 3702, prohibited governmental entities from involvement in gambling concerning competitive sports. New Jersey’s 2012 Sports Wagering Act authorized sports gambling. NCAA and professional sports leagues (Appellees) filed suit. The district court entered a temporary restraining order (TRO) barring the New Jersey Thoroughbred Horsemen’s Association (NJTHA) from conducting sports gambling, finding that the state law violated PASPA. The court required Appellees to post a $1.7 million bond as security. On appeal, NJTHA successfully challenged the constitutionality of PASPA in the Supreme Court. On remand, NJTHA unsuccessfully sought to recover on the bond. The Third Circuit vacated and remanded. NJTHA was “wrongfully enjoined” within the meaning of Federal Rule 65(c) and no good cause existed to deny bond damages. PASPA provided the only basis for enjoining NJTHA from conducting sports gambling. The Supreme Court ultimately held that that law is unconstitutional; NJTHA had a right to conduct sports gambling all along. There was no change in the law; NJTHA enjoyed success on the merits and is entitled to recover provable damages up to the bond amount. View "National Collegiate Athletic Association v. Governor of New Jersey" on Justia Law

Under the Communications Act of 1934, 47 U.S.C. 151, the Federal Communications Commission had rules governing ownership of broadcast media to promote “competition, diversity, and localism.” The 1996 Telecommunications Act, Section 202(h) requires the Commission to review those rules regularly to “determine whether any of such rules are necessary in the public interest.” The Third Circuit has ruled on previous reviews. Following a remand, the Commission failed to complete its 2010 review cycle before the start of the 2014 cycle. The Third Circuit found the FCC had unreasonably delayed action and remanded several issues concerning the broadcast ownership rules and diversity initiatives. The Commission then substantially changed its approach to regulation of broadcast media ownership, issuing an order that retained almost all of its existing rules, effectively abandoning its long-running efforts to change those rules since the first round of litigation. The Commission then changed course, granting petitions for rehearing and repealing or otherwise scaling back most of those same rules. It also created a new “incubator” program designed to help new entrants into the broadcast industry. The Third Circuit vacated and remanded most of the Commission’s actions. Although some of those actions, including the incubator program, were not unreasonable, the Commission did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities. View "Prometheus Radio Project v. Federal Communications Commission" on Justia Law