Justia Civil Procedure Opinion Summaries

Articles Posted in US Court of Appeals for the Third Circuit
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The Adorers, an order of nuns whose religious beliefs require them “to protect and preserve Earth,” own property in Pennsylvania. When Transco notified them that it was designing a 42-inch diameter interstate gas pipeline to cross their property, the Adorers explained that they would not sell a right-of-way through their property. Transco sought a certificate of public convenience and necessity. The Federal Energy Regulatory Commission (FERC) published notices and hosted open meetings to discuss the pipeline. The Adorers neither provided comments nor attended meetings. When FERC contacted the Adorers directly, they remained silent. Transco altered the pipeline’s route 132 times in response to public comment. FERC issued the requested certificate, which authorized Transco to use eminent domain to take rights-of-way 15 U.S.C. 717f(c)(1)(A). Transco sought an order of condemnation to take rights-of-way in the Adorers’ property. The Adorers failed to respond to the complaint.Days after the district court granted Transco default judgment, the Adorers sought an injunction under the Religious Freedom and Restoration Act (RFRA) 42 U.S.C. 2000bb-1(c). The Third Circuit rejected the Adorers’ contention that RFRA permitted them to assert their claim in federal court rather than before FERC. After the pipeline was put into service, the Adorers sought damages under RFRA. The Third Circuit affirmed the dismissal of the suit. To permit a party to reserve a claim, the success of which would imperil a FERC decision to certify an interstate pipeline, by remaining silent during the FERC proceedings and raising the claim in separate litigation would contravene the Natural Gas Act’s exclusive review framework. View "Adorers of the Blood of Christ United States Province v. Transcontinental Gas Pipe Line Co., LLC" on Justia Law

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From 1986-1991, Weiss did not pay federal income taxes. In 1994, Weiss late-filed returns for those years, self-reporting a $299,202 liability. The IRS made tax assessments against him, triggering a 10-year limitations period for collecting unpaid taxes through a court proceeding or a levy. Weiss’s subsequent bankruptcies tolled that limitations period three times: In July 2009, the IRS began the process of a levy. It mailed a Final Notice to Weiss in February 2009, informing Weiss that it intended to levy his unpaid taxes and that he could request a Collection Due Process hearing. The notice was not sufficient to make a levy, so the limitations period continued to run. Weiss timely requested a Collection Due Process hearing, which suspended the statute of limitations for the period during which the hearing “and appeals therein” were “pending,” 26 U.S.C. 6330(e)(1); no less than 129 days remained in the limitations period. Weiss did not prevail at the hearing or in any of his review-as-of-right federal court challenges. As a last resort, Weiss filed a petition for certiorari with the Supreme Court in October 2018. On December 3, 2018, the Court denied that petition. Instead of proceeding to levy Weiss’s property, the government initiated an action in the district court on February 5, 2019.The Third Circuit found the action timely. Petitions for writs of certiorari are “appeals therein.” An appeal remains “pending” until the time to file such a petition expires. View "United States v. Weiss" on Justia Law

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The Haistens sold discounted animal pesticides and drugs online from their South Carolina home. They operated in violation of multiple FDA and EPA regulations. They sold counterfeit DVDs of movies and television shows that they obtained from China. The Haistens ignored cease-and-desist letters from state regulators and animal pesticides companies. Department of Homeland Security agents began making undercover purchases from the Haistens. Customs and Border Protection (CBP) seized shipments of counterfeit DVDs. Agents then searched the Haistens’ home, which revealed unapproved animal pesticides and drugs, counterfeit DVDs, and business records. In the ensuing prosecution, Count 14 charged the Haistens with trafficking counterfeit DVDs that were seized by CBP officers in Cincinnati. Count 15 charged them with trafficking counterfeit DVDs, that were seized at their home. Defense counsel did not request a jury instruction on improper venue or move for acquittal on Counts 14 or 15 for lack of proper venue in the Eastern District of Pennsylvania. The Haistens appealed, challenging an evidentiary ruling and a statement the government made during its summation. The Third Circuit affirmed.The Haistens then sought relief under 28 U.S.C. 2255, arguing that their trial counsel was ineffective for failing to challenge venue on Counts 14 and 15. The Third Circuit remanded the denial of that motion for the district court to conduct an evidentiary hearing on whether their counsel had a strategic reason for not raising a defense based on improper venue. View "United States v. Haisten" on Justia Law

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A fire at the Barclay assisted living facility caused four residents’ deaths. Their estates sued Barclay and Johnson Controls, which maintained and monitored Barclay’s fire-suppression system. After Barclay and its liability insurers settled with the estates, the insurers sued Johnson in federal court, asserting diversity jurisdiction. The insurers alleged that they stood in the shoes of Barclay as its subrogees and were entitled to damages for the settlement payments they made on Barclay’s behalf. The insurers are structured as reciprocal insurance exchanges--distinct legal entities that can sue or be sued but without corporate existence. Each is an unincorporated association whose subscribers exchange contracts and pay premiums for the purpose of insuring themselves and each other. The subscribers are simultaneously both the insureds of and insurers to one another, with the exchanges of insurance between them effected by a common representative.The district court, reasoning that there was no clear Pennsylvania subrogation law prohibition on insurers “asserting tort-based claims against third-party tortfeasors,” denied Johnson’s motion to dismiss. The Third Circuit vacated without reaching the issue of the availability of the tort claims under Pennsylvania law. Before any federal court can decide the merits of such a question, it must have jurisdiction, which may be lacking in this case. For purposes of diversity jurisdiction, the citizenship of reciprocal insurance exchanges turns on the citizenship of their subscribers, who may not be completely diverse from Johnson. Additional fact-finding is needed. View "Peace Church Risk Retention Group v. Johnson Controls Fire Protection LP" on Justia Law

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The Delaware River Basin Commission banned high-volume hydraulic fracturing (fracking) within the Delaware River Basin, reflecting its determination that fracking “poses significant, immediate and long-term risks to the development, conservation, utilization, management, and preservation of the [Basin’s] water resources.” The ban codified a “de facto moratorium” on natural gas extraction in the Basin since 2010. Two Pennsylvania state senators, the Pennsylvania Senate Republican Caucus, and several Pennsylvania municipalities challenged the ban, alleging that the Commission exceeded its authority under the Delaware River Basin Compact, violated the Takings Clause, illegally exercised the power of eminent domain, and violated the Constitution’s guarantee of a republican form of government.The Third Circuit affirmed the dismissal of the suit for lack of standing. No plaintiff alleged the kinds of injuries that Article III demands. Legislative injuries claimed by the state senators and the Republican Caucus affect the state legislature as a whole; under Supreme Court precedent, “individual members lack standing to assert the institutional interests of a legislature.” The municipalities alleged economic injuries that are “conjectural” and “hypothetical” rather than “actual and imminent.” None of the plaintiffs have standing as trustees of Pennsylvania’s public natural resources under the Pennsylvania Constitution's Environmental Rights Amendment because the fracking ban has not cognizably harmed the trust. View "Yaw v. Delaware River Basin Commission" on Justia Law

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In 2007, Sovereign extended a $15 million line of credit to REMI to fund residential mortgage loans. Kaiser guaranteed REMI’s obligations. Sovereign and Kaiser agreed that any judgment entered against Kaiser would bear interest at the Prime Rate plus six percent per annum, not at the statutory rate of interest after judgment. REMI defaulted. Sovereign sued REMI and Kaiser. The parties resolved the case by agreement, which the district court entered as a $1,560,430.24 consent judgment in 2010. The Judgment was silent about any applicable interest rate.In 2017, Kaiser moved to declare that judgment had been satisfied. The district court denied the motion, ordering that the applicable interest rate is the federal statutory post-judgment interest rate, fixed by the Federal Reserve Bank, at 0.26%; and that REMI may serve discovery to determine the status of payments made toward the Consent Judgment. The court reasoned that no clear, unambiguous, and unequivocal language in the Consent Judgment demonstrated an intent to depart from the rate of interest provided by 28 U.S.C. 1961. The Third Circuit affirmed. It is incumbent on the parties to detail, with precision and with clarity, the bargain they have struck. The failure to do so in a consent judgment precludes a district court from enforcing an otherwise-silent provision one party asks it to enforce. View "Sovereign Bank v. Remi Capital Inc." on Justia Law

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In the 1990s, Aldossari’s company, Trans Gulf, entered into an agreement in Saudi Arabia with three other businesses to establish and operate an oil refinery in Saint Lucia, a Caribbean island nation. Crude oil was to be sourced from the Saudi government or its national oil company, Saudi Aramco. The project went forward, but, Aldossari alleged, the owners of the three contract counterparties – one of whom became the Crown Prince of Saudi Arabia –refused to pay Trans Gulf its share of the proceeds. Two decades later, the soon-to-be Crown Prince promised to pay Aldossari but never did. Aldossari, transferred his rights to his minor son, a U.S. citizen.The federal district court dismissed Aldossari’s subsequent tort and contract claims. The Third Circuit affirmed, holding that dismissal of the claims against a deceased defendant was proper because Aldossari failed to allege any basis for exercising subject-matter jurisdiction over those claims. As for the surviving defendants, the lack of any meaningful ties between those defendants and the United States in Aldossari’s claims defeats his effort to sue them in the U.S. The Foreign Sovereign Immunities Act precludes subject-matter jurisdiction over the claims against Saudi Arabia and Saudi Aramco. The case was remanded with directions to dismiss without prejudice since none of the dispositive rulings reach the merits. View "Aldossari v. Ripp" on Justia Law

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Clemens, then an employee, provided ExecuPharm with sensitive information, including her address, social security number, bank, and financial account numbers, insurance, and tax information, passport, and information relating to her family. Clemens’s employment agreement provided that ExecuPharm would “take appropriate measures to protect the confidentiality and security” of this information. After Clemens left ExecuPharm, a hacking group (CLOP) accessed ExecuPharm’s servers, stealing sensitive information pertaining to current and former employees, including Clemens. CLOP posted the data on the Dark Web, making available for download 123,000 data files pertaining to ExecuPharm, including sensitive employee information. ExecuPharm notified current and former employees of the breach and encouraged precautionary measures. Clemens reviewed her financial records and credit reports for unauthorized activity; placed fraud alerts on her credit reports; transferred her bank account; enrolled in ExecuPharm’s complimentary one-year credit monitoring services; and purchased three-bureau additional credit monitoring services for herself and her family for $39.99 per month.Clemens's suit under the Class Action Fairness Act, 28 U.S.C. 1332(d), was dismissed for lack of Article III standing. The court concluded that Clemens’s risk of future harm was not imminent, but “speculative.” Any money Clemens spent to mitigate the speculative risk was insufficient to confer standing; even if ExecuPharm breached the employment agreement, it would not automatically give Clemens standing to assert her breach of contract claim. The Third Circuit vacated. Clemens’s injury was sufficiently imminent to constitute an injury-in-fact for purposes of standing. View "Clemens v. Execupharm Inc" on Justia Law

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In 2015, the Ninth Circuit affirmed summary judgment in favor of Guam taxpayers in their class action lawsuit against the territorial government. Guam had excessively withheld income taxes to support government spending. Some taxpayers got their refunds through an “expedited refund” process that devolved into arbitrariness and favoritism. The district court had certified a class of taxpayers who were entitled to but did not receive timely tax refunds.Duncan then filed a purported class action challenging the Virgin Islands' income tax collection practices. Duncan alleged that the Territory owed taxpayers at least $97,849,992.74 in refunds for the years 2007-2017, and that, for the years 2011-2017, the Territory failed to comply with the requirement in Virgin Islands Code title 33, section 1102(b), that the Territory set aside 10 percent of collected income taxes for paying refunds, leaving the required reserve underfunded by $150 million. The district court denied class certification, citing Duncan’s receipt of a refund check from the Territory during the pendency of her lawsuit; the check, while not the amount Duncan claims, called into question Duncan’s standing and made all of her claims atypical for the putative class. The Third Circuit vacated, rejecting the conclusion that the mid-litigation refund check deprived Duncan of standing and rendered all of her claims atypical. In evaluating whether Duncan was an adequate representative, the district court applied an incorrect legal standard. View "Duncan v. Governor of the Virgin Islands" on Justia Law

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In 2008, Tiversa, a cybersecurity company, informed LabMD, a medical testing business, that it had found LabMD’s confidential patient information circulating in cyberspace and that it could help LabMD respond to the data leak. LabMD’s own investigation revealed no leak. LabMD accused Tiversa of illegally accessing the patient information. Tiversa submitted a tip to the FTC, prompting an investigation. The FTC enforcement action and the reputational damage ruined LabMD. In 2014, a former Tiversa employee disclosed that the patient information did not spread from a leak but that Tiversa had accessed LabMD’s computer files and fabricated evidence of a leak.LabMD sued. In one suit, the district court dismissed claims of defamation and fraud after prohibiting the discovery or use of expert testimony. After finding that LabMD and its counsel breached those discovery limits, the court awarded fees and costs to the defendants, struck almost all of LabMD’s testimonial evidence, and revoked its counsel’s pro hac vice admission. When LabMD’s replacement counsel later tried to withdraw, the court denied that request. LabMD failed to pay the monetary sanctions; the Court held it in contempt. The second lawsuit, asserting similar fraud claims, was dismissed.The Third Circuit vacated in part. The prohibition on expert testimony was unwarranted; the court abused its discretion in imposing sanctions and erred in denying the motion to withdraw. LabMD’s other claims, in that case, were properly dismissed. In the second case, the court affirmed; LabMD did not challenge independently sufficient grounds for the decision. View "LabMD, Inc v. Tiversa Holding Corp" on Justia Law