John Berne Hannum

This class action case involved individuals with alcoholism in the Third Circuit seeking to compel the Secretary of Health and Human Services to evaluate their claims for Social Security Disability Insurance and Supplemental Security Income benefits using standards from Third Circuit precedents like McShea v. Schweiker rather than the agency's differing policies. The plaintiffs also alleged violations of the 1984 Social Security Disability Benefits Reform Act. The court granted a permanent injunction requiring the Secretary to cease nonacquiescence and apply the circuit's standards for determining disability due to alcoholism, which recognize chronic alcoholism as a potentially disabling impairment. The reasoning was that abundant evidence already demonstrated the Secretary's nonacquiescence policy, making further proceedings unnecessary, and that permanent relief was appropriate given the five-year duration of the case and the parties' readiness for final adjudication.

federal powerhealthcare

The case involves plaintiffs Gilda and Robert Stinson who sued Van Valley Development Corp. and others alleging securities fraud under section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 in connection with their purchase of Copper Lake Manor revenue bonds; they claimed misrepresentations and omissions in offering statements regarding the project's finances, occupancy, and economic conditions. After their initial complaint was dismissed for inadequate pleading of reliance, the Stinsons sought leave to amend to invoke a fraud-created-the-market presumption of reliance. The court analyzed whether this presumption is available in the Third Circuit for newly issued or inefficiently traded securities, noting that while the fraud-on-the-market theory was approved in Peil and Basic for developed markets, the fraud-created-the-market variant remains unsettled with conflicting district court decisions like Bexar and Desfor. The court further examined whether the facts could support the presumption, observing that the underlying project had substantial appraised value and was not a worthless sham, and concluded that leave to amend should be denied as the proposed complaint could not withstand a motion to dismiss.

business & regulatoryprocedure

The case involved a dispute between International Raw Materials, which operates a terminal for exporting soda ash, and the American Natural Soda Ash Corporation (ANSAC), an export trade association registered under the Webb-Pomerene Act along with its members. IRM alleged antitrust violations by ANSAC through horizontal price-fixing of domestic terminalling rates for soda ash exports. ANSAC moved for summary judgment, asserting exemption from Sherman Act liability under the Webb-Pomerene Act for conduct in the course of export trade. The court granted summary judgment to ANSAC, concluding that the statutory definition of export trade covers arrangements for terminalling services tied to exporting goods and excludes only domestic production, manufacture, or sales within the United States.

business & regulatory

In Stinson v. Van Valley Development Corp., plaintiffs alleged that they and a proposed class were defrauded when purchasing revenue bonds issued to finance a retirement center project, citing misstatements and omissions in the offering documents regarding working capital, occupancy forecasts, economic conditions, and other project details, in violation of section 10(b) of the Securities Exchange Act and Rule 10b-5. The court addressed motions to dismiss under Rule 12(b)(6) and for class certification, with plaintiffs seeking to rely on the fraud-on-the-market presumption to establish reliance since they had not read the disclosure statements before purchase. The court granted dismissal, holding that plaintiffs failed to allege transaction causation or facts supporting an efficient and developed market necessary for the presumption under precedents like Peil v. Speiser and Basic v. Levinson. It reasoned that the bonds were sold in an undeveloped market without indicia of efficiency such as trading volume or analyst coverage, precluding indirect reliance on market integrity. With the individual claims dismissed, the class certification motion was deemed moot.

business & regulatory

The case involves a dispute over unpaid payments for cardio-respiratory services provided by the plaintiff to Oxford Hospital under an alleged contract. Oxford filed for Chapter 11 bankruptcy, automatically staying proceedings against it, while co-defendant Kensington moved for summary judgment on grounds that it had no corporate relationship with Oxford and thus no liability for the debt. The court denied Kensington's motion, finding that conflicting evidence about the hospitals' relationship created a genuine issue of material fact under Fed.R.Civ.P. 56, and that the bankruptcy stay did not bar ruling on claims against the solvent co-defendant.

business & regulatoryprocedure

The case involved a medical equipment supplier, Quality Care, that had been assigned Medicare Part B claims for seat-lift chairs and challenged Pennsylvania Blue Shield's later denial of most of those claims under an intensified medical-necessity review, as well as the carrier's refusal to find good cause for the supplier's untimely requests for review of the denials. The bankruptcy court dismissed the adversary complaint for failure to state a claim. The court reasoned that it lacked jurisdiction because the plaintiff had not exhausted administrative remedies by timely appealing the claim denials, that no clear nondiscretionary duty existed to support mandamus relief, and that the carrier's good-cause determination was committed to its discretion under the governing regulations.

healthcareprocedurefederal power

The case arose from a 1985 helicopter crash in the Gulf of Mexico that killed the pilot and passengers; a wrongful death suit on behalf of one passenger was filed in Pennsylvania state court alleging only state-law claims. Defendants removed the action to federal district court, asserting federal question jurisdiction on the ground that the Death on the High Seas Act (DOHSA) completely preempted the state claims and converted them into federal claims. The plaintiff moved to remand, and the court granted the motion, holding that the well-pleaded complaint rule barred removal because the complaint contained no federal claim on its face and DOHSA lacked the extraordinary preemptive force (as seen in ERISA) necessary to trigger the complete preemption doctrine. The court therefore concluded it lacked subject-matter jurisdiction and ordered the case returned to state court.

proceduretorts & liability

The case involved an employee welfare fund and its trustees suing their former auditor, Price Waterhouse, alleging that the firm failed to detect and report negligent management and overcharging by the fund's administrators, in violation of ERISA fiduciary duties as well as under contract and negligence theories. The court granted Price Waterhouse's motion to dismiss all counts of the complaint. It reasoned that Price Waterhouse could not be considered a fiduciary under ERISA because it performed independent audits, which by definition preclude discretionary authority or control over the plan, and thus no ERISA claims could proceed against it. The court then declined to exercise pendent jurisdiction over the remaining state law claims.

labor & employmentprocedure

The case involved white foster parents suing the Philadelphia Department of Human Services and its commissioner after the agency removed a Black child from their home pursuant to a policy against cross-racial long-term foster placements, placing him instead with a Black family. The plaintiffs claimed violations of equal protection and due process under the Fourteenth Amendment, including lack of required notice under state law. The court granted their motion for a preliminary injunction, ordering the child's return, after finding a likelihood of success on the merits because the racial-matching policy constituted an unconstitutional racial classification, that the plaintiffs would suffer irreparable harm, and that the child's psychological bonding with the foster parents and other factors favored restoration of the status quo.

civil rightsfamily law

This case is a personal injury lawsuit in which the plaintiff alleged that defective breast implants manufactured by the defendant caused her injuries, asserting claims for negligence, strict product liability, and breach of warranty. The defendant moved for summary judgment on the ground that all claims were barred by the applicable statutes of limitations under Pennsylvania law. The court denied summary judgment on the negligence and product liability claims because genuine issues of material fact existed regarding when the plaintiff discovered or should have discovered her injury under the discovery rule, which could make the 1987 complaint timely following 1985 revision surgery. The court granted summary judgment on the breach of warranty claims, holding that the four-year UCC limitations period accrued upon delivery of the implants in 1972 regardless of discovery.

torts & liabilityprocedure

This case involved crossclaims for indemnification or contribution between Farmers Export Co. and Energy Terminals, Inc., after both settled a personal injury lawsuit brought by Mario Caltabiano (and his wife) for $216,000 following an accident in a leased grain bin that Energy was converting for coal use; Caltabiano, an employee of a contractor hired by Energy, was injured when his welding torch ignited residual grain dust. The court found both parties to be tortfeasors under Pennsylvania law, with Energy exercising primary control over the premises and the work pursuant to the sublease. Applying Pennsylvania's Comparative Negligence Law, 42 Pa.C.S.A. § 7102(b), the court apportioned liability such that Energy bears 80% of the damages and Farmers bears 20%, rejecting claims of full indemnification, borrowed servant status, and certain duties to warn or disclose.

torts & liabilityprocedure

This case was a class action by former AFDC recipients against Pennsylvania Department of Public Welfare officials alleging failures to promptly reassign and distribute child support payments after AFDC benefits ended, to issue correct refunds of excess collections, and to provide periodic accountings or objection procedures, in violation of Title IV-D of the Social Security Act and its regulations as well as the Takings and Due Process Clauses. On cross-motions for summary judgment, the court relied on undisputed facts showing average delays of 165–300 days in reassigning support orders and remitting collections. The court directed the parties to submit joint proposals addressing remedies for mishandled cases, outstanding refunds, improved procedures, and a monthly statement format containing support and refund information.

family lawfederal power

The case concerned a Chapter 13 bankruptcy debtor who listed an IRS tax debt to be paid outside his plan and later objected to the IRS proof of claim while proposing modified plans that reduced payments. The bankruptcy court ruled that secured tax claims could be addressed outside the plan under 11 U.S.C. § 1325(a)(5), while priority unsecured claims for later tax years had to be paid in full inside the plan per 11 U.S.C. § 1322(a)(2), and denied the IRS motion to dismiss or convert to Chapter 7. The district court affirmed on appeal, rejecting the IRS arguments that all secured claims must be included in the plan, that plan modification required extraordinary post-confirmation circumstances, and that the court improperly raised issues at the hearing.

taxesprocedure

The case concerned an employee who sued his employer and supervisors under ERISA for pension benefits allegedly promised after a corporate acquisition, along with related state-law tort claims for misrepresentation that led to his demotion and resignation. The defendants moved for summary judgment, raising questions of ERISA preemption of the state claims and whether the plaintiff had to exhaust internal plan remedies before suing. The court analyzed multiple precedents on preemption, concluding that ERISA generally displaces state tort actions tied to pension plan administration or processing but distinguishing the plaintiff's claim as seeking independent relief from any contractual entitlement under the plans.

labor & employmentfederal powertorts & liability

In Ellis v. Merrill Lynch & Co., customers sued the brokerage firm and its CEO, alleging that the defendants disbursed proceeds from securities sales via checks drawn on geographically remote banks and delayed crediting or paying dividends to earn interest-free use of customer funds, in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5, RICO, and Pennsylvania fraud, fiduciary duty, and contract claims. On the defendants' motion to dismiss under Rule 12(b)(6), the court held that the remote-check practice for sale proceeds stated a viable securities fraud claim because it amounted to misappropriation of client funds in connection with securities transactions and involved a breach of the broker's fiduciary duty to disclose the practice, drawing support from Supreme Court precedent and an SEC release condemning the practice. The court dismissed the claims based on dividend handling, however, because those practices were not sufficiently connected to the purchase or sale of securities. The court also rejected challenges to the pleadings under Rule 9(b) and left the RICO and state-law counts to be addressed in further proceedings.

business & regulatorycriminal law

In McLaughlin v. Pernsley, white foster parents sued the City of Philadelphia Department of Human Services and its commissioner after their black foster child was removed from their home solely due to the agency's policy against cross-racial long-term placements, alleging violations of equal protection and due process under the Fourteenth Amendment; the removal occurred without the notice required by state law. The defendants moved to dismiss, arguing that prior state court proceedings barred the claims under res judicata and that the federal court should abstain under Younger v. Harris. The court denied the motion, holding that the federal constitutional claims were not precluded by the state proceedings and that abstention was not warranted because the plaintiffs had not had a full and fair opportunity to litigate their federal claims in an ongoing state forum.

civil rightsfamily law

This case involves plaintiff Irene Cooper's challenge to the denial of her application for widow's insurance benefits under Title II of the Social Security Act, claiming status as the common-law wife of the decedent. After her claim was denied at the initial and reconsideration stages, she filed an untimely request for a hearing before an administrative law judge, which the ALJ dismissed for lack of good cause despite holding a hearing on the merits; the Appeals Council declined review of the dismissal. The Secretary moved to dismiss the federal court action for lack of jurisdiction under 42 U.S.C. § 405(g), arguing there was no final decision made after a hearing. The court granted the motion and dismissed the complaint, holding that judicial review requires exhaustion of administrative remedies resulting in a final decision after a hearing, which was not present here due to the untimely filing, and finding no applicable waiver under precedents like Rankin v. Heckler.

healthcareprocedure

Temple University sued Salla Brothers, Inc. and related corporate and individual defendants under the federal RICO statute, alleging damages from a scheme to bribe university employees, overcharge for goods, and bill for undelivered items through mail fraud, commercial bribery, and Travel Act violations. The defendants moved to dismiss the complaint, contending that the RICO claims failed to allege a racketeering injury, required prior convictions on predicate acts, and did not properly plead an enterprise distinct from the pattern of racketeering or from the defendants themselves. The court denied the motion to dismiss, applying the Supreme Court's recent Sedima decision to reject any need for a separate racketeering injury or prior convictions and holding that an enterprise may be the victim of the racketeering and need only be alleged as a separate ongoing entity.

criminal lawprocedure

This case involves a dispute over the award of a public school construction contract by the School District of Philadelphia. Plaintiff Thomas P. Carney, Inc., the lowest bidder, was rejected because its bid did not include the required minority and female business subcontracting plan under the district's affirmative action policy. Carney and other plaintiffs sued, claiming the policy violated state law requiring contracts to be awarded to the lowest responsible bidder in a non-discriminatory manner, and sought an injunction to stop the work and award the contract to them. The court denied the preliminary injunction after a hearing, concluding that the plaintiffs were not entitled to the relief sought.

civil rightsbusiness & regulatory

The case involved plaintiff Carlos Grasty seeking judicial review of the U.S. Department of Housing and Urban Development's (HUD) final decision refusing to accept assignment of his federally insured mortgage under 24 C.F.R. § 203.650(a), which would have prevented foreclosure by the mortgagee. HUD had determined that Grasty failed to satisfy two required conditions: that his default resulted from circumstances beyond his control and that there was a reasonable prospect he could resume full mortgage payments within 36 months. The court granted summary judgment to HUD, concluding that the agency did not err because the default arose from Grasty's decision to move possessions from Grenada to Barcelona and his choice to leave the country without collecting available unemployment compensation, neither of which qualified as an inevitable temporary crisis or uncontrollable circumstance under the regulations. The court limited its review to HUD's final findings and rejected arguments that other conditions were at issue.

federal powerproperty