U.S. Third Circuit - The FindLaw 3rd Circuit Court of Appeals Opinion Summaries Blog

June 2010 Archives

Dwumaah v. Attorney General, 09-4140, concerned a petition for review, by a citizen of Ghana, of a final order of removal by the BIA.  In denying the petition, the court held that substantial evidence supports the finding that DHS met its burden of proving that the petitioner falsely claimed citizenship on at least two occasions in connection with federal student loan applications.

In re Goody's Family Clothing Inc., No. 09-2168, concerned a challenge to the district court's affirmance of the Bankruptcy Court's decision to award "stub rent" as an administrative expense to three of the debtors' landlords in Chapter 11 Bankruptcy proceedings.  In affirming the decision  for essentially the same reasons given by the district court, the court held that section 365(d)(3) does not supplant section 503(b) and the landlords are entitled to "stub rent" as an administrative expense.

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Appeal in Suit Against an ATP Under Sherman Act Rejected

Deutscher Tennis Bund v. ATP Tour, Inc., No. 08-4123, concerned plaintiffs' suit against the ATP Tour, an organizer of worldwide men's professional tennis circuit, claiming that ATP Tour's reorganization to revitalize its popularity violated sections 1 and 2 of the Sherman Act and constituted a breach of the directors' fiduciary duties. 

In affirming the judgment of the district court, the court held that the jury verdict on the Sherman Act section 1 claim was proper as the plaintiffs failed to prove the relevant market.  The court also affirmed the district court's judgment as a matter of law dismissing the breach of duty of loyalty claim against a director as neither he individually nor the ATP Board of Directors as a whole were materially self-interested when they voted in favor of the reorganization plan.   

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Edwards v. A.H. Cornell & Son, Inc., No. 09-3198, concerned a plaintiff's suit against her employers and supervisors, claiming that she was terminated in violation of section 510 of ERISA and state common law after complaining to management about alleged ERISA violations.

In discussing the term "inquiry" as stated in section 510 of ERISA, the court wrote: "Here, Edwards does not allege that anyone approached her requesting information regarding a potential ERISA violation.  Rather, she made her complaint voluntarily, of her own accord.  Under these circumstances, the information that Edwards relayed to management was not part of an inquiry under the term's plain meaning."

Thus, in affirming the district court's grant of defendants' motion to dismiss, the court held that, unsolicited internal complaints are not protected activities under the anti-retaliation provision of section 510 of ERISA.   

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In Sides v. Cherry, No. 08-1982, the Third Circuit faced a challenge to a  jury verdict in favor of the defendant-prison officials, in a former inmate's 42 U.S.C. section 1983 suit, arguing that being restrained by handcuffs and leg irons throughout the trial denied him the right to a fair trial.

As stated in the decision: "[T]he district court took several appropriate steps to comceal the shackles from the jury, including directing that (1) a jacket be placed over Sides' hands, (2) an apron and boxes be placed around the plaintiff's table, and (3) the jury be removed from the courtroom before Sides took the witness stand."  The court also noted that the district court gave a cautionary instruction to the jury at the beginning of trial that cured any prejudice to the former inmate. 

Thus, in affirming, the court held that requiring a party in a civil trial to appear in shackles may well deprive him of due process unless the restraints are necessary.  Here, the court held that even if the district court erred in ordering that defendant be shackled during trial, that error was harmless.   

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In US v. Marcavage, No. 09-3573, the Third Circuit faced a challenge to a conviction of defendant for violating the terms of a permit and interfering with agency function, arising from his refusal to move his anti-abortion demonstration from the sidewalk in front of Liberty Bell to a nearby location.

In vacating the conviction, the court held that the sidewalk at issue, as a thoroughfare sidewalk, seamlessly connected to public sidewalks at either end and intended for general public use, is a traditional public forum.  Here, the restrictions imposed on defendant were content-based as the park rangers' actions were motivated by the content of defendant's speech.  Therefore, the court held that the defendant's First Amendment right to free speech was impermissibly infringed because government's exclusion of defendant from the sidewalk cannot withstand strict scrutiny as the exclusion was neither narrowly tailored to serve the government's interests nor the least restrictive means of doing so.   

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Travelers Cas. & Sur. Co. v. Ins. Co. of N. Am., No. 06-4100, concerned a dispute over reinsurance coverage, involving allegations of manipulation of post-settlement allocation. The court affirmed the district court's judgment for the most part, including the district court's Phase I order in Traveler's favor as INA did not meet its burden at trial of showing that the allocation decisions it was challenging were driven primarily by reinsurance considerations, as well as the district court's Phase II ruling that INA is not bound by Traveler's decision to annualize the per-occurrence limits of the policies INA reinsured.  Lastly, the court affirmed district court's ruling that post-judgment interest on the pre-judgment interest did not begin to accrue until the district court issued its order quantifying the amount of pre-judgment interest due. 

However, the court vacated in part and remanded in concluding that the district court should have calculated the prejudgment interest owed to Travelers according to the New York rate.   

US v. Liburd, No. 09-3156, the court faced a challenge to a conviction of defendant for possession with intent to distribute 500 grams or more of cocaine and attempted importation of the drugs.  In vacating the judgment, the court held that the prosecutor's use of defendant's statement, made at the airport, "so infected the trial with unfairness as to make the resulting conviction a denial of due process.   

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In Devcon Int'l Corp. v. Reliance Ins. Co., No. 07-4602, the Third Circuit dealt with a plaintiff's claim that its insurer was required to defend and indemnify plaintiff in a nuisance action brought against it, arising from a construction to extend an airport that generated large amounts of dust which drifted over nearby property.  In affirming the district court's entry of a declaratory judgment in favor of the insurer, the court held that the insurer has carried its burden to show that the plain language of the pollution exclusion removes coverage for the plaintiffs' alleged harms.   

Specialty Surfaces Int'l, Inc. v. Cont'l Cas. Co., No. 09-2773, also concerned a plaintiffs' action against its insurer, seeking a declaratory relief that the insurer had a duty to defend and indemnify plaintiffs in an underlying action. 

In affirming the district court's grant of summary judgment in favor of the insurer, the court held that Pennsylvania has a far greater interest in having the coverage issue determine in accordance with its law than California.  Accordingly, the court held that the insurer did not have a duty to defend after receiving notice of the original complaint.  In addition, the insurer was not required to defend plaintiff because the allegations in the amended complaint do not support a determination that any damage was caused by an "occurrence," as any damages to plaintiff's own work product based on plaintiff's alleged negligence claims are claims of damage based on faulty workmanship.   

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Inmate's Conviction for Possession of Utility Blade Affirmed

US v. Holmes, No. 09-2846, concerned a challenge to an inmate's conviction for possessing a weapon in a prison, including a challenge to the sufficiency of the evidence for the jury to conclude that the utility knife blade was a weapon within themeaning of section 1791.

In affirming the conviction, the court held that the defendant's challenge to the sufficiency of the evidence at trial is rejected as a rational jury cold have concluded that the blade found was a weapon.  Moreover, the potential severity of the punishment for possessing a weapon in prison is counterbalanced by the need for safety and security and, as such, does not justify the mens rea requirement sought by defendant.  Lastly, the court rejected defendant's argument that he should have been charged with what he sees as the lesser included offense under 18 U.S.C. section 1791(d)(1)(F).

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In Sheridan v. NGK Metals Corp., No. 08-4373, the Third Circuit faced a challenge to the district courts' grant of defendants' motion to dismiss in two putative class actions against multiple defendants, alleging negligence in connection with beryllium exposure and seeking a medical monitoring trust fund based on their increased risk of developing chronic beryllium disease (CBD).

In affirming the dismissal, the court held that with respect to one of the suits, the plaintiff cannot prevail because under Pohl, the threshold increase in risk to establish a medical monitoring claim under Redland Soccer remains at sensitization, a point along the exposure-to-disease continuum that plaintiff has not reached.  Also, with respect to the other suit, the court held that plaintiff has failed to present sufficient evidence that as a proximate result of the exposure he has a significantly increased risk of contracting CBD. 

Finally, the court held that barring a third plaintiff's medical monitoring claim against a defendant is consistent with the purpose of claim preclusion because the underlying assertions in each action are the same, and because the plaintiff could have brought a medical monitoring claim in the prior suit, and as such, district court properly granted a defendant's motion for judgment on the pleadings.  Therefore, the district court properly granted defendant-engineering consultants' motion to dismiss for failure to state a claim upon which relief can be granted. 

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In Harris v. Ricci, No. 09-2562, the Third Circuit faced a challenge to the district court's denial of defendant's petition in habeas proceedings arising from a conviction for murder and a sentence of death, challenging the trial court's decision to impanel a foreign jury rather than transfer the case to a different venue in light of the pretrial publicity surrounding the trial.

In affirming the district court's denial of the petition, the court held that the defendant has not shown that the New Jersey Supreme Court's decision upholding the use of foreign jurors to ameliorate the effect of the pretrial publicity was contrary to law clearly established by the Supreme Court of the United States.  

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Espinosa-Cortez v. US Attorney General, No. 08-4170, concerned a Colombian national's petition for review a BIA's affirmance of the IJ's denial of his application for asylum and related relief, on the ground that he had not shown that he would be persecuted on account of actual or imputed political beliefs if he were removed to Colombia.  In granting the petition, the court held that the BIA's conclusion that the Fuerzas Armadas Revolucionarias de Colombia's (FARC) threats were not centrally motivated by a political opinion the guerrillas imputed to petitioner is not supported by substantial evidence in the record.   

In In re: Grossman's Inc., No.09-1563, In Chapter 11 proceedings, the Third Circuit faced a challenge to the district court's affirmance of the Bankruptcy Court's holding that the plaintiffs' tort claims, arising from exposure to asbestos contained in home improvement products sold by the debtor, were not "claims" under 11 U.S.C. section 101(5).

In reversing the decision of the district court, the court first held that the Frenville accrual test is overruled as it imposes too narrow an interpretation of a "claim" under the Bankruptcy.  Next, the court held tha a "claim" arises when an individual is exposed pre-petition to a product or other conduct giving rise to an injury, which underlies a "right to payment" under the Bankruptcy Code, and here, plaintiffs' claims arose sometime in 1977, the date the plaintiff alleged that debtor's product exposed her to asbestos.  Thus on remand, the court stated that whether a particular claim has been discharged by a plan of reorganization depends on factors applicable to the particular case and is best determined by the appropriate bankruptcy court or the district court.  

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In In re: Exide Technologies, No. 081872, the Third Circuit faced a challenge to the district court's affirmance of the Bankruptcy Court's grant of the debtor's motion to reject an agreement to sell substantially all of its industrial battery business, on the ground that the agreement was an executory contract, subject to rejection under 11 U.S.C. section 365(a), and that rejection terminated the debtor's obligations under it. 

As stated in the decision: "The Bankruptcy Court here failed to properly measure whether either party had substantially performed.  Our inspection of the record, however, reveals that the inferences are clear that EnerSys has substantially performed.  Applying Hadden's balancing test, EnerSys's performance rendered outweighs its performance remaining and the extent to which the parties have benefitted is substantial.  Specifically, EnerSys has substantially performed by paying the full $135 million purchase price and operating under the Agreement for over ten years."

Thus, in vacating the judgment and remanding the matter, the court held that the agreement is not an executory contract because it does not contain at least one ongoing material obligation for the other party, and because the agreement is not an executory contract, the debtor cannot reject it.   

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