Barron Patterson McCune

This case is an appeal from a bankruptcy court order in the Chapter 11 reorganization of Allegheny International and related debtors, including Chemetron. The appellees, who lived near former Chemetron industrial sites in Ohio, sought permission to file late claims for personal injuries allegedly caused by radioactive and toxic contamination from operations that ended in 1975. The bankruptcy court had ruled that the appellees were known creditors entitled to actual notice of the claims bar date and allowed the late claims under the totality of the circumstances. The district court reversed, holding that publication notice in national newspapers was constitutionally sufficient because the appellees were unknown creditors at the time of the 1988 filing, that their claims were therefore discharged upon plan confirmation, and that they had not shown excusable neglect warranting late filing.

business & regulatoryproceduretorts & liability

In Kossman v. TJX Companies, Inc., plaintiff Paul Kossman sued TJX for breach of a 1982 commercial lease after TJX had assigned its interest and later sold related assets to Ames Department Stores under an agreement in which Ames agreed to indemnify TJX for lease-related liabilities. Ames filed for Chapter 11 bankruptcy in 1990, prompting TJX to seek referral of the case to bankruptcy court on the ground that it was a “related proceeding” under 28 U.S.C. § 1334(b). Applying the Third Circuit’s Pacor test—whether the outcome could conceivably affect the debtor’s estate—the court found that a judgment against TJX would trigger Ames’s indemnification obligation and therefore impact the bankruptcy estate. The court therefore dismissed the plaintiff’s objections and ordered the case referred to the bankruptcy court for further proceedings, including TJX’s motion for an extension of time.

procedurebusiness & regulatory

This case was a declaratory judgment action in which insurance companies Foremost and Donegal sought a ruling that their homeowner's policies did not require them to defend or indemnify their insured, Weetman, against a state-court lawsuit by the Platek family alleging that Weetman sexually abused their minor children in 1985. The district court granted the insurers' motions for summary judgment, holding that neither policy provided coverage. Both policies contained exclusions for bodily injury that was expected or intended by the insured. The court reasoned that, under the majority rule followed by courts in other jurisdictions, intent to cause injury is inferred as a matter of law from acts of child sexual molestation, so the exclusions applied and the insurers had no duty to cover any resulting damages.

torts & liability

This case involved claims under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) by residents and a company against the National Bank of the Commonwealth for response costs and contribution related to hazardous waste contamination at a former metal polishing facility known as the Berlin Property. The bank sought summary judgment, arguing it was protected by CERCLA's security interest exemption during the eight months it held record title after foreclosing on a mortgage. The court denied the motion, holding that the exemption does not shield a party that takes title and that factual disputes existed over whether releases or disposals of hazardous substances occurred during the bank's ownership period. The court also vacated prior dismissal orders on due process grounds and allowed the claims to proceed against the bank as a potentially responsible party under 42 U.S.C. § 9607(a)(2).

environmentbusiness & regulatoryproperty

This case involves an appeal from a bankruptcy court order finding that the debtor, Quattrone Accountants, Inc., was a 'responsible person' under 26 U.S.C. § 6672 and thus liable for unpaid federal employment taxes owed by its client, the United Dairy Farmers Cooperative Association. The bankruptcy court also ruled it lacked jurisdiction over the tax liability of Phillip Quattrone, an individual not in bankruptcy. The district court reviewed the record and accepted the bankruptcy court's factual findings that the debtor handled UDF's finances, had discretion over payments, knew of the tax delinquencies, and willfully failed to remit the taxes by directing funds to other creditors instead. The court affirmed the order, noting that the debtor's arguments about lacking authority were not supported by the evidence.

taxesbusiness & regulatoryprocedure

The case involves a Title VII lawsuit by the EEOC against Metal Service Company alleging race discrimination in hiring, based on charges filed by two Black applicants who were not hired for positions filled by white applicants. The defendant moved for summary judgment, arguing that the charges were untimely because they were filed with the EEOC on the 218th and 219th days after the alleged discrimination, exceeding the general 180-day filing deadline. The court denied the motion, holding that the extended 300-day limitations period applied. It reasoned that Pennsylvania is a deferral state with a work-sharing agreement between the EEOC and the state agency (PHRC), such that the EEOC's transmittal of the charges fulfilled the requirement to initially institute state proceedings, making the filings timely even after accounting for the 60-day deferral period.

labor & employmentcivil rightsprocedure

This case involved an appeal by a shopping center lessor from a bankruptcy court order under 11 U.S.C. § 365 authorizing a Chapter 11 debtor (a fast-food lessee) to assume and assign its lease to a new corporation formed by the debtor's shareholders. The district court affirmed the order, finding that the 60-day statutory deadline for lease assumption had been properly extended, the trustee had authorized the motion, and the assignee had provided adequate assurance of future performance and compatibility as required for shopping center leases. The court rejected challenges to the timing, standing, notice, and valuation issues, noting that the lessor's remedies were limited to ensuring cure of defaults and financial security rather than selecting a preferred tenant. It further held that any disputes over arrearages could be addressed separately without delaying the assignment.

business & regulatorypropertyprocedure

This case involved former Conrail employees who received lump-sum termination incentive payments of up to $25,000 in 1982 under 45 U.S.C. § 797a and sought refunds after the IRS taxed the payments as ordinary income in the year received. The court first addressed jurisdiction, concluding that the district court rather than the Special Court under 45 U.S.C. § 1105 had authority to decide the tax treatment issue. On the merits, the court determined that the payments constituted income but initially held they must be apportioned over the years earned; upon reconsideration of the statutory language in § 797d(b) and legislative intent, it ruled the payments were non-taxable. The court granted the plaintiffs' motion for judgment on the pleadings and denied the defendant's, while striking an incomplete proposed refund order and denying attorney fees.

taxeslabor & employmentfederal power

The case involved a Libyan citizen who entered the U.S. as a J-1 exchange student and sought a waiver of the mandatory two-year return to Libya requirement after the INS determined it would cause exceptional hardship to his U.S. citizen spouse and subject him to persecution. The USIA declined to recommend the waiver, so the INS denied it, and the plaintiff sued alleging abuse of discretion. The court granted the defendants' motion to dismiss, ruling that the statute requires a favorable USIA recommendation before the Attorney General can waive the requirement, and that the USIA's decision is committed to agency discretion by law and thus unreviewable by the courts under the Administrative Procedure Act.

immigrationfederal powerprocedure

In this case, the plaintiff sued his former employer under the Age Discrimination in Employment Act and Fair Labor Standards Act, alleging that his demotion in 1982, layoff later that year, and termination in 1984 were the result of willful age discrimination. The defendant moved for summary judgment, arguing that the claims were time-barred, that the plaintiff had not established a prima facie case, and that its actions were driven by legitimate economic factors rather than age. The court granted the motion, finding that the plaintiff failed to show he was qualified for other positions or that younger employees received more favorable treatment, and that all relevant maintenance positions were eliminated due to economic conditions and plant shutdowns. The court also noted that the plaintiff's statistical evidence did not support an inference of age discrimination.

labor & employmentcivil rights

The Commonwealth of Pennsylvania sued Latrobe Road Construction, Inc. and Derry Construction Co., Inc. for alleged violations of the Sherman Act and RICO statutes, claiming a conspiracy in restraint of trade involving mail fraud from 1979 to 1980 in connection with road construction. Defendants moved for a more definite statement due to lack of specificity in the pleadings and to dismiss the RICO claims. The court agreed the complaint lacked particularity under Fed. R. Civ. P. 9(b) for both the antitrust and RICO allegations but ordered limited discovery followed by an opportunity to amend rather than immediate dismissal or a more definite statement, noting the facts were largely within defendants' control and that defendants had already admitted Sherman Act violations in a related criminal case. On the RICO motion, the court denied dismissal, holding that Sedima v. Imrex eliminated any prior conviction or separate racketeering injury requirement, that §§ 1962(a) and (b) permit the same entity to be both the "person" and "enterprise," and that the alleged conspiracy sufficiently pleaded a pattern of racketeering activity imputable to both defendants.

criminal lawbusiness & regulatoryprocedure

This case is a civil forfeiture action by the United States to seize a 1982 Datsun automobile used in connection with cocaine possession and distribution activities. The court granted the government's motion for summary judgment, finding that the government met its burden under 21 U.S.C. § 881 by showing probable cause that the vehicle was used to pick up cocaine, mail payment for it, and drive to a remote area for inspection of the drugs. The claimant's "innocent owner" defense, based on lack of knowledge or authorization of the illegal use, was rejected because that exception had not been adopted by the Third Circuit Court of Appeals. Even assuming the defense applied, the court held that the owner had not done all that reasonably could be expected to prevent the proscribed use of the vehicle.

criminal lawproperty

Plaintiff Ellen Witt sued Merrill Lynch and account executive Marc Gold, alleging that churning and unsuitable investments in her securities accounts from 1982 to 1984 reduced her $45,000 investment to $13,500. The court addressed multiple motions in the case, dismissing the RICO count against Merrill Lynch because the defendant cannot be the same entity as the enterprise, and dismissing counts based on NYSE and NASD rules for lack of a private right of action. It denied dismissal of the RICO count against Gold due to a circuit split and the Third Circuit's liberal approach to pleadings, denied a venue change because the claim arose in the district, denied a more definite statement request, and denied arbitration of common law claims as they were factually intertwined with non-arbitrable securities and RICO claims.

business & regulatoryprocedure

This case involved a contract dispute between Universal Plumbing & Piping Supply, Inc. and John C. Grimberg Co. over the supply of pipe for a construction project, where the parties exchanged a bid/offer and a purchase order containing differing terms. Grimberg moved to dismiss the lawsuit, arguing that a disputes clause in its purchase order required arbitration under the American Arbitration Association rules. The court denied the motion to dismiss, holding that the arbitration provision did not become part of the contract. The core reasoning was that under Pennsylvania's version of UCC § 2-207, the seller's offer expressly limited acceptance to its own terms, and alternatively, an arbitration clause constitutes a material alteration that requires explicit assent to be binding.

business & regulatoryprocedure

The case concerned whether a bequest to the Verona Cemetery, a non-profit public cemetery, qualified for a charitable deduction from federal estate tax under Internal Revenue Code § 2055(a)(2). The plaintiffs, executors of the estate, sought a refund after the IRS disallowed the deduction for the residue of the estate left to the cemetery's endowment and a new building. The court held that the cemetery qualified as a corporation organized and operated exclusively for charitable purposes, entitling the estate to the deduction. It reasoned that the cemetery performs an important public function by providing burial services without profit or private benefit, lessens the burden on government, maintains tax-exempt status under multiple laws, and aligns with the broad definition of charity under the Code, rejecting distinctions based on references to cemeteries in other tax provisions.

taxes

In this diversity action, plaintiff LaReita Blumenschein, as beneficiary of a declining term life insurance policy on her husband, sought full benefits after his death by suicide roughly 23 months after issuance, but the insurer paid only the premiums under the policy's suicide clause. The jury returned a defense verdict, and the court denied the plaintiff's post-trial motions for judgment notwithstanding the verdict and a new trial. The court held that the two-year suicide clause did not violate Pennsylvania public policy under longstanding precedent such as Tritschler and Longenberger, that the policy and attached application complied with statutory requirements, and that evidence of the insured's state of mind at purchase was irrelevant to the unambiguous contract language.

business & regulatoryprocedure

The case involves two Pennsylvania boroughs that purchase wholesale electricity from Pennsylvania Power Company for resale to local customers, alleging that the company violated the Sherman Act and Robinson-Patman Act through an anticompetitive price squeeze by setting wholesale rates higher relative to its retail industrial rates. The court addressed the company's motion for summary judgment and the boroughs' motion to amend their complaint, granting the summary judgment motion in part and denying it in part while denying the motion to amend. The court reasoned that prior FERC determinations on rates and classifications were not preclusive in the antitrust action, that the electricity sales qualified as occurring in interstate commerce for Robinson-Patman Act purposes because they involved power flowing across state lines, and that certain other claims had already been dismissed or did not warrant amendment based on prior rulings and the record.

business & regulatoryfederal power

This case concerned a 56-year-old white male coal miner who alleged he was denied employment by Canterbury Coal Co. due to sex discrimination (after inquiring about a job for his daughter) and age discrimination, bringing claims under Title VII, the ADEA, Section 1981, and the Fourteenth Amendment. The court granted the defendant's motion for summary judgment on all claims. The Title VII claim was dismissed as time-barred because the plaintiff failed to file a proper charge with the EEOC within the required 300 days after learning of the alleged discrimination, consistent with Supreme Court precedent requiring initial filing with a state agency. The ADEA claim failed for lack of evidence raising a genuine issue that age was the reason for the denial of employment, while the Section 1981 claim was rejected as it applies only to racial discrimination with no supporting facts alleged, and the Fourteenth Amendment claim lacked any allegation of state action.

labor & employmentcivil rights

This case involves a blind teacher, Ceinwen King-Smith, who sued the Pittsburgh school board under 42 U.S.C. § 1983, the Rehabilitation Act of 1973 (Section 504), and the Fourteenth Amendment, alleging she was fired solely because of her disability after receiving an unsatisfactory rating and being transferred and laid off. The defendants moved for partial summary judgment on the Section 504 claim, arguing that the plaintiff was not an intended beneficiary of federal funds and that the funding did not have a primary objective of providing employment. The court denied the motion, reasoning that the broad language of Section 504, modeled after Title VI and interpreted consistently with the Supreme Court's North Haven decision on Title IX, prohibits employment discrimination in federally funded programs on its face, with legislative history supporting coverage of such claims, and that factual disputes remained about the scope of federal funding and the plaintiff's role in funded programs.

civil rightslabor & employment

This case involved a homeowners insurance dispute after a house owned by plaintiffs David and Janice Opat as tenants by the entireties was destroyed by fire. The defendant insurer refused to pay the claim, alleging that Janice had intentionally set the fire with her husband's brother, though it paid off the mortgage to Mellon Bank; the jury found that Janice or someone acting with her had intentionally caused the fire. The court denied a new trial and held that David, as an innocent spouse, could recover his one-half interest in the loss under the policy because the insurance interests were not presumed joint, while Janice was barred by the fraud finding. It also granted judgment to the insurer on its counterclaim against both plaintiffs jointly and severally for the $10,955.51 mortgage payment, as the mortgage obligation was joint.

propertyprocedure