The most significant happenings in the U.S. Court of Appeals for the Third Circuit in 2015 came from a varied array of issues concerning data breaches and privacy, appeals from the NFL concussion settlement, and the long road a federal trial judge has had to travel to be named to the appellate court’s bench.
In August, the court ruled that the Wyndham hotel chain and its subsidiaries sued in a Federal Trade Commission action were on the hook for three data breaches into the corporation’s computer network that resulted in $10.6 million in fraudulent charges to customers’ credit cards.
The case has since been settled, but the broader impact of the Third Circuit’s decision was its empowering of the FTC to protect consumer rights in cybersecurity matters, allowing the commission the latitude to determine what is considered an “unfair” practice.
Observers noted FTC’s newfound power will mean a surge in lawsuits.
Scott Vernick, a Philadelphia-based Fox Rothschild attorney who represents Fortune 500 companies in data breach matters, previously said the authority gained from the Third Circuit’s decision coupled with the lack of solid regulations governing cybersecurity means the FTC will be putting many more companies in its crosshairs.
This could affect the likes of Sony, Ashley Madison, Target and Home Depot, Vernick said, because “aside from the regulations put out by the credit card companies, for a broad swath of companies there are no regulations that you can look up” on software, firewalls and data encryption, to name a few areas.
While other industries, like health care, transportation and the financial sector, have more definitive regulations, Vernick said for most commercial entities, the FTC points to its past enforcement actions for guidance.
Ex-NFL PLAYERS OBJECT TO SETTLEMENT
Attorneys representing dozens of former NFL players in the nationwide concussion litigation argued before a Third Circuit panel in November that the league’s $1 billion settlement left certain players suffering from brain trauma without compensation.
The roughly 90 players on appeal took issue with the settlement—reached in April after extended debate—because it didn’t include payment for players diagnosed with chronic traumatic encephalopathy (CTE) after the presiding judge’s settlement approval date. CTE is a degenerative neural disease associated with repeated blows to the head. It was historically referred to as dementia pugilistica, or the state of being “punch drunk.”
The settlement was structured to compensate more than 20,000 former players who were diagnosed with Alzheimer’s disease, dementia, ALS and other neurocognitive diseases related to their time in the league, but it only compensates for CTE if the player had died before the April 22 approval date. At this point, with research on the disease still in its infancy, CTE can only be diagnosed after death. The settlement provides $4 million for each player with CTE who died before April 22.
“We are very much in favor of a settlement,” attorney Steven Molo told the three-judge panel of the Third Circuit in Philadelphia, but the problem with the current setup, he noted, was that provisions still needed to be made for players who develop CTE in the future—at the very least, medical and psychological treatment.
Molo faced scrutiny from the panel at the outset. Third Circuit Judge Thomas M. Hardiman asked Molo how ex-players could be treated and compensated for CTE while they’re living if a diagnosis can only come from an autopsy.
Molo said he believed science would develop a way to diagnose the disease in living patients within the next five years. The current settlement, he added, did not take into account the evolution of science.
“What we want are some kind of rights, some kind of compensation for these claims,” Molo said.
Hardiman fired back that the settlement appeared to provide meaningful compensation for 98 percent of the players involved, but Molo wouldn’t budge, reiterating that CTE was the central issue and not properly addressed.
Another lawyer for the players, Deepak Gupta, echoed Molo’s sentiments as he told the panel that the settlement created a “conflict between those who are presently injured and those who will be.”
Gupta also said the settlement doesn’t pay attention to symptoms said to precede CTE, such as suicidality and depression.
However, Hardiman cautioned Gupta that taking that route would make the settlement overly broad.
“Now the settlement’s going to be watered down,” he said. “Every field goal kicker who’s depressed is part of the class.”
Restrepo’s long haul to the bench
November marked the one-year anniversary of U.S. District Judge Luis Felipe Restrepo of the Eastern District of Pennsylvania’s nomination to the Third Circuit bench by President Obama. It has been a process wrought with delay, with a full Senate confirmation vote only recently scheduled for Jan. 11.
The seat Restrepo has been nominated to fill is classified as a judicial emergency and has been open since Judge Anthony Scirica took senior status in July 2013. The Third Circuit has had an additional vacancy since Judge Marjorie Rendell took senior status in July. No one has been nominated to fill that seat as of yet.
Other candidates who were nominated after Restrepo continued to be confirmed, even after he passed a voice vote in the Senate Judiciary Committee in July.
Restrepo’s confirmation has served as yet another battleground for partisan bickering, with Democrats accusing Republicans of obstructing the confirmation of Obama’s nominees, and Republicans, like Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, arguing the Senate confirmed more nominees during Obama’s presidency than during the George W. Bush administration.
One of Restrepo’s home-state senators, Sen. Pat Toomey, R-Pennsylvania, has also drawn fire by some for not pushing hard enough to get Restrepo confirmed. Despite facing calls for action from multiple groups such as the Pittsburgh City Council and several newspapers, Toomey’s office has consistently expressed the senator’s commitment to getting Restrepo on the Third Circuit bench.
P.J. D’Annunzio can be contacted at 215-557-2315 or firstname.lastname@example.org. Follow him on Twitter @PJDannunzioTLI.•