Justia Civil Procedure Opinion Summaries

GBForefront, a limited partnership, sued FMG, an LLC, alleging diversity jurisdiction (28 U.S.C. 1332) because GBForefront’s general partner was an LLC whose sole member was a “resident” of Pennsylvania; none of FMG’s members were Pennsylvania residents. Years later, GBForefront accepted an offer of judgment. The district court entered judgment. Problems arose with satisfaction of the judgment; the parties submitted a joint motion to amend the judgment to effectuate a new agreement, which the court granted. GBForefront soon alleged default and moved for entry of a consent judgment under the new agreement. Defendants then cross-moved to dismiss the case for lack of subject matter jurisdiction, claiming that GBForefront had not adequately pled the citizenship of FMG and that complete diversity was lacking when the lawsuit was filed. The Supreme Court then issued its opinion in Americold Realty, dealing with the citizenship of trusts. The district court then dismissed, finding that the membership of GBForefront included trusts whose beneficiaries were New Jersey citizens and FMG also had a member who was a New Jersey citizen. Abrogating its own precedent, the Third Circuit vacated, concluding that the citizenship of a traditional trust is based only on the citizenship of its trustee. The court remanded with instructions to determine whether the trusts are of the traditional or business variety and whether there is diversity jurisdiction. View "GBForefront LP v. Forefront Management Group LLC" on Justia Law

Plaintiffs sued on behalf of a proposed nationwide class of individuals who “owned, own, or acquired” structures on which Owens Corning's "Oakridge" fiberglass asphalt roofing shingles roofing shingles are or have been installed since 1986, claiming that the shingles were “plagued by design flaws that result in cracking, curling and degranulation” and “will eventually fail, causing property damage, and costing consumers substantial removal and replacement costs.” The district court rejected the suit on summary judgment, finding that the claims had been discharged in bankruptcy. The Third Circuit partially reversed. After the case was remanded, others filed similar suits in district courts in other states, which were transferred for consolidation. Plaintiffs proposed two classes: property owners from four states, asserting various state-law claims, and a nationwide class seeking a ruling regarding the legal standard governing whether Owens Corning can use a bankruptcy discharge defense. The Third Circuit affirmed the denial of class certification. The Nationwide Class cannot satisfy Rule 23(a)’s commonality requirement because the only common question it poses can be answered only by an advisory opinion, which is forbidden by Article III. The Four-State Class cannot satisfy Rule 23(b)(3)’s predominance requirement. Plaintiffs did not allege a defect common to the class that might be proved by classwide evidence. View "Gonzalez v. Owens Corning" on Justia Law

Paladino, a New Jersey State Prison inmate, filed a 42 U.S.C. 1983 civil rights action against prison employees alleging a number of constitutional claims. The district court granted summary judgment on many of his claims, finding that he failed to exhaust administrative remedies, as required by the Prison Litigation Reform Act of 1995. The Third Circuit affirmed with respect to most of Paladino’s claims but vacated with respect to Paladino’s excessive force claim based on an alleged 2010 assault, finding a genuine issue of material fact regarding whether he exhausted that claim because there was a conflict between the prison’s records and Paladino’s deposition testimony. Some type of notice and an opportunity to respond are needed before a district court elects to decide factual disputes regarding exhaustion. View "Paladino v. Newsome" on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

Panico, a New Jersey resident, incurred substantial debt on an MBNA credit card, which qualifie as “debt” under the Fair Debt Collection Practices Act, 15 U.S.C. 1692a(5). MBNA assigned the rights to the debt to PRA, a debt collector. PRA’s collection efforts failed. In 2014, more than three but fewer than six years after the cause of action accrued, PRA sued. New Jersey’s statute of limitations barred collection ofsuch debts after six years; Delaware’s statute proscribed collection of such debts after three years. The credit agreement provided for application of “the laws of ... Delaware, without regard to its conflict of laws principles, and by any applicable federal laws.” PRA agreed to a stipulated dismissal. In 2015, Panico filed a putative class action under the FDCPA, arguing that PRA had sought to collect on a time-barred debt. The district court granted PRA summary judgment, finding that a Delaware tolling statute prevented the Delaware statute of limitations from running as to a party residing outside that state during the credit relationship, default, collections attempts, and ensuing litigation. The Third Circuit reversed. Delaware’s tolling statute has been interpreted as abrogating its statute of limitations only as to defendants not otherwise subject to service of process; it was not intended to export the state’s tolling statute into out-of-state forums and to substantially limit the application of the Delaware statute of limitations. View "Panico v. Portfolio Recovery Associates, LLC" on Justia Law

In 2014, Super Bowl XLVIII was held at New Jersey's MetLife Stadium. Finkelman alleges that the NFL has a policy of withholding 99% of Super Bowl tickets from the general public; 75% of the withheld tickets are split among NFL teams and 25% of tickets are for companies, broadcast networks, media sponsors, the host committee, and other “league insiders.” The 1% of tickets for public purchase are sold through a lottery system. A person has to enter by the deadline, be selected as a winner, and choose to actually purchase a ticket. Finkelman purchased tickets on the secondary market for $2,000 per ticket, although these tickets had a face value of $800 each. He did not enter the lottery to seek tickets offered at face value but filed a putative class action under New Jersey’s Ticket Law, N.J. Stat. 56:8-35.1: It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets’ release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating. The Third Circuit concluded that Finkelman had standing based on the plausible economic facts he pleaded, but deferred action on the merits pending decision by the Supreme Court of New Jersey on a pending petition for certification of questions of state law. View "Finkelman v. National Football League" on Justia Law

Wellman, a Butler Area high school, freshman suffered head injuries while playing flag football in a physical education class, during football practice, and during a game. Despite a concussion diagnosis and requests from Wellman’s mother and doctor, the school refused to provide any accommodation. A CT scan revealed post-concussive syndrome. The school was unresponsive. Wellman received homebound instruction through his sophomore year. The school denied Wellman an Individualized Education Plan (IEP). For junior year, he enrolled in private school, from which he graduated. Wellman filed a due process complaint with the Pennsylvania Department of Education. In a settlement, Wellman released the District from all claims which could have been pursued under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400; the Americans with Disabilities Act (ADA); or any other statute. Wellman then filed suit under the Rehabilitation Act, 29 U.S.C. 794, the ADA, 42 U.S.C. 12132, and 42 U.S.C. 1983, alleging equal protection violations. The Third Circuit remanded for dismissal with prejudice, citing the Supreme Court’s 2017 "Fry" opinion, which requires that courts consider the “gravamen” of the complaint to determine whether a plaintiff seeks relief for denial of the IDEA’s core guarantee of a free and appropriate education (FAPE); if so, then the plaintiff must exhaust his IDEA administrative remedies. Wellman released all claims based on the denial of a FAPE and has no claims to exhaust. View "Wellman v. Butler Area School District" on Justia Law

The Delaware Companies challenged Delaware’s right to audit whether funds paid for stored-value gift cards issued by their Ohio-based subsidiaries are held by the Companies and subject to escheatment. Their argument relied on Supreme Court precedent establishing priority among states competing to escheat abandoned property, giving first place to the state where the property owner was last known to reside. If that residence cannot be identified or if that state has disclaimed its interest, second in line is the state where the holder of the abandoned property is incorporated; any other state is preempted from escheating the property. The Companies argued that money left unclaimed by owners of the stored-value cards is held by the Ohio Subsidiaries, so Delaware can have no legitimate escheatment claim and must be barred from auditing the Companies in connection with the gift cards. The Third Circuit held that private parties can invoke federal common law to challenge a state’s authority to escheat property but agreed that dismissal was proper. “The notion that the State cannot conduct any inquiry into abandoned property to verify a Delaware corporation’s representations regarding abandoned property lacks merit” and, to the extent the Companies challenged the scope or means of the audit, the claim is not ripe, since Delaware has taken no formal steps to compel an audit. View "Marathon Petroleum Corp v. Secretary of Finance for the State of Delaware" on Justia Law

Pursuit, managed by its founders, Schepis and Canelas, created and was the general partner in two funds to “acquire securities for trading and investment appreciation.” They invested in offshore entities formed in the Cayman Islands. Pursuit voluntarily petitioned for Chapter 7 bankruptcy in 2014, after it became liable for legal judgments of $5 million. Pursuit listed no assets but indicated that it had a “[p]otential indemnification claim” against one of the funds it managed and claims connected to other cases. Financial statements revealed that Pursuit’s 2011 gross income, $645,571.22 from one fund, was transferred to Pursuit’s members in 2013. Creditors Group claimed Schepis and Canelas enriched themselves at the expense of creditors and sought avoidance, 11 U.S.C. 544, 547, 548. The Trustee obtained court approval of an agreement to “settle, transfer and assign” the avoidance claim and other potential claims. The Pursuit Parties objected, seeking to purchase the claims themselves. The Trustee sold the claims to Creditors Group for $180,001. The Bankruptcy Court approved the sale. The Pursuit Parties did not seek a stay. Creditors Group sued on the claims in the Bankruptcy Court. The Third Circuit affirmed the district court’s dismissal of an appeal as moot under 11 U.S.C. 363(m), because the Pursuit Parties the requested remedy, if entered, would affect the validity of the sale. View "In re: Pursuit Capital Management" on Justia Law