Justia Civil Procedure Opinion Summaries

Mesabi Metallics Company LLC (Mesabi) filed for Chapter 11 bankruptcy in 2016 and emerged successfully in 2017. During the bankruptcy proceedings, Mesabi initiated an adversary proceeding against Cleveland-Cliffs, Inc. (Cliffs), alleging tortious interference, antitrust violations, and civil conspiracy. Mesabi claimed Cliffs engaged in anti-competitive conduct to impede Mesabi's business operations. To facilitate discovery, the parties entered a stipulated protective order allowing documents to be designated as confidential. Mesabi later moved to unseal certain documents filed under seal to support a petition in the Minnesota Court of Appeals.The United States Bankruptcy Court for the District of Delaware, applying the common law right of access, held that Cliffs had not met the burden to keep the documents sealed. The court relied on the Third Circuit's precedent in In re Avandia, which requires a showing that disclosure would cause a clearly defined and serious injury. Recognizing potential ambiguity in the law, the Bankruptcy Court certified the question for direct appeal to the United States Court of Appeals for the Third Circuit.The Third Circuit clarified that the sealing of documents in bankruptcy cases is governed by 11 U.S.C. § 107, not the common law right of access. Section 107 imposes a distinct burden, requiring protection of trade secrets or confidential commercial information without the need for balancing public and private interests. The court vacated the Bankruptcy Court's decision and remanded for application of the correct standard under § 107. Additionally, the Third Circuit held that the Bankruptcy Court lacked jurisdiction to grant a third party's motion to intervene and unseal documents while the appeal was pending, vacating those orders as well. View "ESML Holdings Inc v. Mesabi Metallics Compay LLC," on Justia Law

Plaintiffs alleged that an automobile manufacturer designed, manufactured, and sold defective vehicles, specifically Dodge "muscle" cars with defective rear differentials. They filed a complaint asserting state and federal causes of action based on fraud and breach of warranty. The District Court dismissed the fraud counts and some warranty counts, allowing plaintiffs to amend their complaint. After amending, the District Court dismissed the fraud counts again and some warranty counts, but allowed two warranty counts to proceed.The United States District Court for the District of Delaware initially dismissed the complaint without prejudice, allowing plaintiffs to amend it. After the plaintiffs amended their complaint, the District Court dismissed the fraud counts and some warranty counts with prejudice, but allowed two warranty counts to proceed. The plaintiffs then moved to certify the dismissal of their fraud counts for appeal under 28 U.S.C. § 1292(b) or for final judgment under Rule 54(b). The District Court denied the request for certification under § 1292(b) but granted the request for final judgment under Rule 54(b) for the fraud counts.The United States Court of Appeals for the Third Circuit reviewed the case and determined that the District Court's Rule 54(b) judgment was not final. The Court of Appeals held that the fraud and warranty counts constituted a single claim for purposes of Rule 54(b) because they were alternative theories of recovery based on the same factual situation. As a result, the judgment did not dispose of all the rights or liabilities of one or more of the parties. Consequently, the Court of Appeals dismissed the appeal for lack of jurisdiction and instructed the District Court to vacate its order directing the entry of a partial final judgment. View "Diaz v. FCA US LLC" on Justia Law

Jeffrey Herrera filed a pro se complaint alleging that he was detained for several months beyond his maximum release date, which he claimed violated the Eighth Amendment. Herrera was arrested in September 2012, sentenced in March 2013 to 36 to 72 months’ imprisonment, and released on parole in December 2014. After violating parole, his sentence was reduced in January 2017 to 30 to 66 months, with credit for time served. Despite this, Herrera claimed he was detained until October 2019, seven months past his maximum release date of March 2019.The United States District Court for the Middle District of Pennsylvania dismissed Herrera’s complaint under 28 U.S.C. § 1915(e), reasoning that his claim must be brought as a habeas corpus petition under 28 U.S.C. § 2254 and that his claim for damages was barred by Heck v. Humphrey, 512 U.S. 477 (1994). The court also found that any amendment to the complaint would be futile. Herrera’s motions for reconsideration and relief from judgment were denied, with the court maintaining that his claim was barred by Heck and the statute of limitations.The United States Court of Appeals for the Third Circuit reviewed the case and determined that Heck does not apply to Herrera’s overdetention claim because it does not imply that his conviction or sentence were invalid. The court found that Herrera plausibly pleaded an Eighth Amendment overdetention claim, as he alleged that prison officials were aware of his overdetention and failed to act, resulting in his prolonged detention. However, the court noted that the claim might be time-barred under Pennsylvania’s two-year statute of limitations but remanded the case to allow Herrera to amend his complaint to address potential tolling of the statute of limitations. The Third Circuit vacated the District Court’s order and remanded for further proceedings. View "Herrera v. Pennsylvania Board of Probation and Parole" on Justia Law

Prestige Home Care Agency, operated by Nursing Home Care Management Inc., did not compensate its employees for travel time between clients' homes. The U.S. Department of Labor (DOL) sued Prestige for this and other violations of the Fair Labor Standards Act (FLSA). The District Court found Prestige's actions to be willful violations of the FLSA and granted summary judgment in favor of the DOL. Prestige appealed the summary judgment, the exclusion of its expert witness, and the denial of its motion for sanctions against the DOL.The District Court for the Eastern District of Pennsylvania excluded Prestige’s expert witness, denied Prestige’s motion for sanctions, and granted summary judgment for the DOL on all claims. The court found that Prestige willfully violated the FLSA by not compensating for travel time, failing to pay for short breaks, improperly compensating overtime, and not keeping accurate records.The United States Court of Appeals for the Third Circuit reviewed the case. The court held that travel time between job sites during the workday is compensable under the FLSA. It affirmed the District Court’s finding that Prestige violated the FLSA’s recordkeeping requirements and acted willfully in its violations, extending the statute of limitations to three years. The court also upheld the District Court’s calculation of back wages and liquidated damages, finding the DOL’s estimates sufficient given Prestige’s inadequate records.The Third Circuit found no abuse of discretion in the District Court’s exclusion of Prestige’s expert witness, who made several legal errors in his report. The court also upheld the denial of sanctions against the DOL, as the documents in question were already in Prestige’s possession and had little impact on the case. The Third Circuit affirmed the District Court’s judgment in all respects. View "Secretary United States Department of Labor v. Nursing Home Care Management Inc." on Justia Law

A Harrisburg, Pennsylvania ordinance prohibits persons to “knowingly congregate, patrol, picket or demonstrate in a zone extending 20 feet from any portion of an entrance to, exit from, or driveway of a health care facility.” Individuals purporting to provide “sidewalk counseling” to those entering abortion clinics claimed that the ordinance violated their First Amendment rights to speak, exercise their religion, and assemble, and their due process and equal protection rights. The court determined that the ordinance was content-neutral because it did not define or regulate speech by subject-matter or purpose, so that intermediate scrutiny applied, and reasoned that it must accept as true (on a motion to dismiss) claims that the city did not consider less restrictive alternatives. The claims proceeded to discovery. In denying preliminary injunctive relief, the court ruled that plaintiffs did not demonstrate a likelihood of success on the merits. The Third Circuit vacated. In deciding whether to issue a preliminary injunction, plaintiffs normally bear the burden of demonstrating likelihood of prevailing on the merits. In First Amendment cases where the government bears the burden of proof on the ultimate question of a statute’s constitutionality, plaintiffs must be deemed likely to prevail for purposes of considering a preliminary injunction unless the government has shown that plaintiffs’ proposed less restrictive alternatives are less effective than the statute. View "Reilly v. City of Harrisburg" on Justia Law

Deadline for petition to Tax Court is jurisdictional and cannot be waived for equitable reasons. When spouses file a joint tax return, each is jointly and severally liable for the tax due, 26 U.S.C. 6013(d); the IRS may grant relief where it would be “inequitable to hold the individual liable.” Rubel and her ex-husband filed joint income tax returns, 2005-2008. They had an unpaid tax liability for each year. In 2015, Rubel sought relief under the innocent spouse relief provisions. On January 4, 2016, the IRS denied relief for tax years 2006-2008. On January 13, the IRS sent a denial for 2005. The determinations stated that Rubel could appeal to the Tax Court within 90 days; Rubel needed to file a petition by April 4 for the 2006-2008 tax years and by April 12 for 2005. Rubel submitted additional information to the IRS. In a March 3 letter, the IRS stated that it “still propose[d] to deny relief” and, incorrectly, “Your time to petition … will end on Apr. 19.” Rubel mailed a petition on April 19. The Third Circuit affirmed the Tax Court’s dismissal. The deadline set forth in 26 U.S.C. 6015(e)(1)(A), is jurisdictional and cannot be altered, regardless of the equities of the case. View "Rubel v. Commissioner Internal Revenue" on Justia Law

The consolidated appeals involve allegations that the companies holding the patents for Lipitor and Effexor XR delayed entry into the market by generic versions of those drugs by engaging in an overarching monopolistic scheme that involved fraudulently procuring and enforcing the underlying patents and then entering into a reverse-payment settlement agreement with a generic manufacturer. In 2013, the Supreme Court recognized that reverse payment schemes can violate antitrust laws and that it is normally not necessary to litigate patent validity to answer the antitrust question. The district judge dismissed most of plaintiffs’ claims. The Third Circuit remanded after rejecting an argument that plaintiffs’ allegations required transfer of the appeals to the Federal Circuit, which has exclusive jurisdiction over appeals from civil actions “arising under” patent law, 28 U.S.C. 1295(a)(1). Not all cases presenting questions of patent law necessarily arise under patent law; here, patent law neither creates plaintiffs’ cause of action nor is a necessary element to any of plaintiffs’ well-pleaded claims. The court remanded one of the Lipitor appeals, brought by a group of California pharmacists and involving claims solely under California law, for jurisdictional discovery and determination of whether remand to state court was appropriate. View "In re: Lipitor Antitrust Litigation" on Justia Law

Plaintiffs suffered from disabilities, for which each was prescribed an emotional support animal. Each woman obtained a dog. This violated the “no dogs” rule of their condominium association. Plaintiffs each sought an accommodation for an emotional support animal by filing paperwork, with a doctor’s letter prescribing an emotional support animal, and a dog certification. Other residents became upset about the presence of the dogs. The condominium board voted to impose a fine. When a new Board President took office, the Board granted the accommodation requests and waived the accrued fines. Plaintffs filed suit under the Fair Housing Act, alleging that the association denied their reasonable requests for accommodation (42 U.S.C. 3604(f)(3)(B)) and interfered with the exercise of their fair housing rights (42 U.S.C. 3617). Plaintiff Walters committed suicide while her case was pending. The district court dismissed Walters’ Fair Housing Act claims entirely due to her death and rejected Kromenhoek’s claims on the merits. The Third Circuit reversed. The survival of claims under the Fair Housing Act is not governed by Section 1988(a), but by federal common law, under which a claim survives the death of a party. There were genuine issues of material fact regarding the merits of the claims. View "Revock v. Cowpet Bay West Condominium Association" on Justia Law

Pennsylvania resident Rarick worked for a company that insured its vehicles under a policy issued by Federated, a Minnesota corporation, under which the employer waived uninsured motorist coverage for most of its employees, including Rarick. Rarick alleged that he suffered injuries after he crashed a company car because an unidentified vehicle forced him off the road. Rarick submitted a claim to Federated for uninsured motorist benefits. Federated denied the claim. Rarick filed a class action, seeking a declaration that Pennsylvania’s Motor Vehicle Financial Responsibility Law required Federated to provide Rarick with uninsured motorist coverage. Rarick also requested damages for breach of contract. On a motion to remand to state court, the district court adopted a “heart of the matter” test to determine whether it had discretion to decline jurisdiction, found that the crux of the litigation was declaratory, noted “the nature and novelty of the state law issues,” declined jurisdiction and remanded the case. The Third Circuit vacated, stating that the heart of the matter test is problematic because it enables plaintiffs to avoid federal subject matter jurisdiction through artful pleading. The independent claim test is the applicable legal standard for review of a complaint that seeks both legal and declaratory relief. View "Rarick v. Federated Service Insurance Co" on Justia Law

Pleasant Valley High School wrestling coach Getz allegedly assaulted team member C.M. and discriminated against C.M.’s sister, A.M. based on her gender. Plaintiffs alleged that during practice, C.M. was forced to wrestle a larger student, who threw him through the doors into the hallway and punched him. After Getz prodded C.M. to keep wrestling, an altercation ensued, in which Getz lifted C.M. up and “smash[ed] his head and back into the wall.” C.M., A.M., and their mother sued. The School Defendants asserted that discovery showed that Plaintiffs made numerous false statements in the complaint and amended complaint, and their claims lacked merit and that Plaintiffs’ Rule 56.1 statement contained false statements. The district court denied Defendants’ Rule 11 motions as “meritless,” noting that these Rule 11 motions tax judicial resources and emphasizing that the truth of the allegations in a case of this sort is revealed through discovery and addressed at summary judgment or trial, not via motions for sanctions. On interlocutory appeal, the Third Circuit affirmed. The district court appropriately exercised its wide discretion in concluding the motions lacked merit, and were counterproductive as they relied upon factual discrepancies that did not show the claims were patently frivolous. View "Moeck v. Pleasant Valley School District" on Justia Law