Justia Government & Administrative Law Opinion Summaries

Articles Posted in US Court of Appeals for the Third Circuit
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Wilmington Trust financed construction projects. Extensions were commonplace. Wilmington’s loan documents reserved its right to “renew or extend (repeatedly and for any length of time) this loan . . . without the consent of or notice to anyone.” Wilmington’s internal policy did not classify all mature loans with unpaid principals as past due if the loans were in the process of renewal and interest payments were current, Following the 2008 "Great Recession," Wilmington excluded some of the loans from those it reported as “past due” to the Securities and Exchange Commission and the Federal Reserve. Wilmington’s executives maintained that, under a reasonable interpretation of the reporting requirements, the exclusion of the loans from the “past due” classification was proper. The district court denied their requests to introduce evidence concerning or instruct the jury about that alternative interpretation. The jury found the reporting constituted “false statements” under 18 U.S.C. 1001 and 15 U.S.C. 78m, and convicted the executives.The Third Circuit reversed in part. To prove falsity beyond a reasonable doubt in this situation, the government must prove either that its interpretation of the reporting requirement is the only objectively reasonable interpretation or that the defendant’s statement was also false under the alternative, objectively reasonable interpretation. The court vacated and remanded the conspiracy and securities fraud convictions, which were charged in the alternative on an independent theory of liability, View "United States v. Harra" on Justia Law

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A Compact between Pennsylvania and New Jersey created the Delaware River Joint Toll Bridge Commission, which is authorized to “acquire, own, use, lease, operate, and dispose of real property and interest in real property, and to make improvements,” and to "exercise all other powers . . . reasonably necessary or incidental to the effectuation of its authorized purposes . . . except the power to levy taxes or assessments.” The Commission undertook to replace the Scudder Falls Bridge, purchased land near the bridge in Pennsylvania, and broke ground on a building to house the Commission’s staff in a single location. Pennsylvania Department of Labor and Industry inspectors observed the construction; the Commission never applied for a building permit as required under the Department’s regulations. The Commission asserted that it was exempt from Pennsylvania’s regulatory authority. The Department threatened the Commission’s elevator subcontractor with regulatory sanctions for its involvement in the project. The Commission sought declaratory and injunctive relief.After rejecting an Eleventh Amendment argument, the Third Circuit upheld an injunction prohibiting the Department from seeking to inspect or approve the elevators and from further impeding, interfering, or delaying the contractors. Pennsylvania unambiguously ceded some of its sovereign authority through the Compact. The fact that both states expressly reserved their taxing power—but not other powers—indicates that they did not intend to retain the authority to enforce building safety regulations. View "Delaware River Joint Toll Bridge Commission v. Secretary Pennsylvania Department of Labor and Industry" on Justia Law

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A regulation promulgated under the National Traffic and Motor Vehicle Safety Act, 49 U.S.C. 30101, requires a tire dealer to help customers register their new tires with the manufacturer. The regulation prescribes three methods for tire dealers to help register a buyer’s tires. According to Thorne, Pep Boys failed to pursue any of the three when, or after, it sold her the tires. She sued on behalf of a class of Pep Boys customers who similarly received no tire registration assistance.The district court dismissed her complaint without leave to amend, holding that a dealer’s failure to help register a buyer’s tires in one of the three prescribed ways does not, by itself, create an injury-in-fact for purposes of Article III standing. The Third Circuit vacated and remanded for dismissal without prejudice. A district court has no jurisdiction to rule on the merits when a plaintiff lacks standing. Thorne’s benefit-of-the-bargain allegations do not support a viable theory of economic injury, and her product-defect argument ignores the statute’s defined terms. Unregistered tires are not worth less than Thorne paid and are not defective. Congress did not intend to give private attorneys general standing to redress the “injury” of unregistered tires. View "Thorne v. Pep Boys Manny Moe & Jack" on Justia Law

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PDX is a last-mile shipper of wholesale auto parts in New Jersey and other states. Depending on the volume and timing of its customers’ shipping needs, PDX hires “independent owner-operators” on an “as-needed” basis. PDX long classified these drivers as independent contractors. In 2012, after completing an audit of PDX for 2006-2009, the New Jersey Department of Labor and Workforce Development determined that PDX had misclassified its drivers, finding they were employees, not independent contractors. The Department reached the same conclusion in two subsequent audits and sought payment of unemployment compensation taxesPDX filed suit, contending New Jersey’s statutory scheme for classifying workers was preempted by the Federal Aviation Administration Authorization Act of 1994 and was unconstitutional under the Interstate Commerce Clause. An action before the New Jersey Office of Administrative Law (OAL) was stayed at PDX’s request. SLS, also a last-mile shipper, was audited by the Department and was allowed to intervene in the lawsuit. The Department’s audit against SLS remains pending.The trial court dismissed the entire case as barred by the Younger abstention doctrine. The Third Circuit held that the trial court correctly dismissed PDX, but erred in dismissing SLS. PDX’s OAL action is an ongoing judicial proceeding in which New Jersey has a strong interest and PDX may raise any constitutional claims while SLS is not subject to an ongoing state judicial proceeding. View "PDX North Inc v. Commissioner New Jersey Department of Labor and Workforce Development" on Justia Law

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Alita, her son, and her stepfather died in a fire that engulfed their Philadelphia apartment. With the building already burning, Alita had called 911. A fire department operator instructed her to remain inside, promising help was on the way. Firefighters initially drove to the wrong location and, at the scene, never learned that the family was waiting. The firefighters extinguished the blaze without a search, leaving all three trapped in their home where they perished from smoke inhalation. Days passed before firefighters returned and discovered their bodies. Their estates sued the city and two fire department employees.The Third Circuit affirmed the dismissal of the suit. The state-created danger theory does not apply. The dispatcher did not act affirmatively to create the danger, but only failed to communicate the family’s location, and the operator’s behavior did not shock the conscience. The employees neglected to relay the information through error, omission, or oversight. There is no plausible allegation that the city was deliberately indifferent to anyone’s substantive due process rights. Rejecting a negligence argument based on the history of problems at the residence, and failure to fix the building’s fire hazards, the court reasoned that the city was immune from these claims because it had insufficient control over the building. View "Johnson v. City of Philadelphia" on Justia Law

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Porter co-owned property with a partner. His wife, Debra, held an unrecorded $2.8 million mortgage on the property. Unbeknownst to Porter, his partner obtained a second mortgage on the property from Commerce. That mortgage went into default. The property was listed at a mortgage foreclosure sheriff’s sale. The Porters filed lawsuits before the sale. A Pennsylvania court awarded Debra damages for the title company’s failure to record her mortgage but declined to have it retroactively recorded and denied a motion to postpone the sale. A federal declaratory judgment action, claiming that Debra’s unrecorded mortgage had priority over Commerce’s mortgage, was still pending. Porter contacted the Sheriff’s Office before the sale and sought Commerce’s assurance that it would inform bidders about the pending lawsuit. Commerce’s attorney never arrived at the sale, so when the property came up for sale, Porter stood up to make the announcement. Sheriff’s Office attorney Chew and Deputy Stewart ordered him to stop speaking. They put Porter in a chokehold, placed him in handcuffs, and dragged him from the room. Porter and a deputy required medical attention. Porter was convicted of misdemeanor resisting arrest.On Porter's s Monell claim against Philadelphia based upon its unwritten policy of not allowing non-bidders to comment at a sheriff’s sales, the jury awarded him $750,000. The Third Circuit vacated the judgment. Chew’s unendorsed actions did not become municipal policy. There is no evidence that municipal decision-makers were aware of Chew’s inconsistent implementation of the no-comment policy or that Chew had previously used force to enforce it. Because the sheriff’s sale is a nonpublic forum, the Sheriff’s Office policy prohibiting comments is valid; it is viewpoint neutral and reasonable in light of the city’s right to preserve the property under its control for the use to which it is lawfully dedicated. View "Porter v. City of Philadelphia" on Justia Law

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The SEC investigated Gentile for his role in a penny-stock manipulation scheme in 2007-08 and civilly sued Gentile, who was indicted for securities fraud violations. The criminal prosecution was dismissed as untimely. The SEC separately investigated securities transactions through an unregistered broker-dealer in violation of the Securities and Exchange Act of 1934, 15 U.S.C. 78o(a): Traders Café, a day-trading firm, maintained an account with Gentile’s Bahamian broker-dealer, which was not registered in the U.S. The SEC issued a Formal Order of Investigation into Café in 2013. Without issuing a new Formal Order, the SEC informed Gentile that he was a target in that investigation.The SEC subpoenaed Gentile for testimony. He refused to comply. The SEC did not seek enforcement against Gentile but subpoenaed Gentile’s attorney and an entity affiliated with Gentile’s Bahamian broker-dealer, which also refused to comply. The SEC commenced enforcement actions against those entities. Gentile unsuccessfully moved to intervene; the Florida district court ordered compliance. Gentile filed suit in New Jersey, seeking a declaration that the Café investigation was unlawful, requesting the quashing of the subpoenas, and seeking an injunction to prevent the SEC from using the fruits of that investigation against him.The Third Circuit affirmed the dismissal of the suit. The APA’s waiver of sovereign immunity, 5 U.S.C. 702, includes an exception for “agency action committed to agency discretion by law,” section 701(a)(2); sovereign immunity prevents judicial review of the Formal Order of Investigation. View "Gentile v. Securities and Exchange Commission" on Justia Law

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In 2006, a McVey assisted living resident fell and suffered injuries that resulted in his death. An investigation led to a homicide charge against Geness, a permanently mentally disabled McVey resident. A judge deemed Geness incompetent to stand trial and ordered him transferred to a psychiatric hospital for assessment. Approximately 10 months after his arrest, Geness was transferred to a psychiatric facility where he was deemed incompetent with a “poor” prognosis for improvement. He remained imprisoned for years, while his case remained on the court’s monthly “call of the list.” About five years after Geness’s arrest, a second competency evaluation was conducted, at the prison. It was again determined that Geness was incompetent to stand trial and unlikely to improve. A judge released him for involuntary commitment to a Long Term Structured Residence. Geness’s case remained the monthly “call of the list.” In 2015, a judge entered a nolle prosequi order. After nine years in custody without a trial, Geness was released.Geness sued the county and city, former detective Cox, and McVey under the Americans with Disabilities Act, 42 U.S.C. 12131, and the Fourteenth Amendment, 42 U.S.C. 1983. All defendants were dismissed except Cox. Following a remand, Geness added ADA “Title II” and Fourteenth Amendment claims against the Commonwealth and the Administrative Office of Pennsylvania Courts (AOPC). The Third Circuit remanded for dismissal of AOPC. While Congress abrogated sovereign immunity for Title II claims, Geness has not stated a Title II claim against AOPC, which had no power over the disposition of his case. There is no allegation regarding how AOPC’s alleged failure to contact the Supreme Court connects to Geness’s disability. View "Geness v. Administrative Office of Pennsylvania Courts" on Justia Law

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PSBA is a non-profit association created by Pennsylvania’s school districts. Campbell energetically used Pennsylvania's Right to Know Law (RTKL) to obtain records from PSBA’s constituent school districts. In 2017, Campell sent RTKL requests to public school agencies, seeking contact information for district employees and union representatives. PSBA’s attorney advised member districts that they were required to release publicly-available information, but they did not have to provide private data and that they could simply make the results “available for pickup.” When Campbell received copies of PSBA’s legal guidance, he established a web page entitled “PSBA Horror,” mocking PSBA's Executive Director. PSBA’s counsel threatened to sue Campbell for defamation. Campbell submitted another, 17-page, RTKL request, seeking 27 types of documentation regarding the districts' relationship with PSBA.PSBA sued Campbell, alleging defamation, tortious interference with contractual relations, and abuse of process. Campbell then filed a 42 U.S.C. 1983 suit, alleging that PSBA’s state suit was motivated by an improper desire to retaliate against him for proper RTKL requests, violating his First Amendment rights. The Third Circuit affirmed the dismissal of Campell’s suit. Campbell’s RTKL requests and PSBA’s state tort claims were both protected under the Noerr-Pennington doctrine, which shields constitutionally-protected conduct from civil liability, absent certain exceptions. The district court erred in requiring a heightened burden of proof on PSBA’s motives in bringing its state court tort claims but Campbell’s civil rights claim would fail under any standard of proof. View "Campbell v. Pennsylvania School Boards Association" on Justia Law

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Sierra Club sought review of the EPA’s approval of new Pennsylvania National Ambient Air Quality Standards (NAAQS) to govern pollution output at coal-burning power plants, as required by the Clean Air Act, 42 U.S.C. 7408(a). Sierra Club argued that the standards wrongly claim to reduce pollution output at Pennsylvania’s most advanced plants while simply rubber-stamping an average of current pollution output as its supposed new gold standard and criticized the proposal’s minimum temperature threshold—a measure that allows plants to nearly quintuple their pollution output when operating below 600 degrees Fahrenheit—as unsupported and unsupportable given the technical record before the agency. Sierra Club claims that the approved standards lack enforceable reporting regulations.The Third Circuit remanded to the EPA, finding that “the regulatory regime which springs forth from these three defining characteristics is neither supported by adequate facts nor by reasoning found in the administrative record.” Given the EPA’s concession that technological advances may allow for a more environmentally friendly standard than the one approved, reliance on a study that is more than 25 years old is neither a persuasive nor reasonable basis for adopting the standard it approved. The EPA is able neither to offer a reasonable justification for failing to require a stricter standard nor to justify the standard it endorsed. View "Sierra Club v. United States Environmental Protection Agency" on Justia Law