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Looking over the headlines from 2001, the judges of the 3rd U.S. Circuit Court of Appeals were called on to resolve a wild variety of cases — ranging from the dog shot by a police officer while its owner watched in horror to the suspected terrorist who was awarded more than $100,000 in legal fees when the government’s case against him fell apart. Along the way, the court also found the time to approve a multibillion-dollar settlement, place limits on judicial gag orders, force more bankruptcy debtors to pay off their student loans, and put an end to a testy Philadelphia City Council election dispute. Among the winners were the gun industry, mortgage companies and a dead rap singer. Counting their losses were Nasdaq investors, the folks who live in the vicinity of the Three Mile Island nuclear power plant, and a brand-new cement plant in Camden, N.J. Here are some of the highlights: JANUARY C. Delores Tucker, the former politician who became a crusader against “gangsta rap,” lost her bid to revive a defamation suit against Time and Newsweek magazines but won the right to pursue the same claim against a lawyer. A unanimous three-judge panel found that Tucker, a public figure, could not show that the news magazines acted with “actual malice” when they printed accounts of her lawsuit against now-deceased rapper Tupac Shakur that said Tucker was claiming Shakur had destroyed her sex life. But, voting 2-1, the same panel found that Tucker should be allowed to pursue her claim against attorney Richard Fischbein because he continued, in media interviews, to describe her husband’s loss-of-consortium claim that way even after he received a copy of a suit from Tucker that accused him of defamation for doing so. Judge Samuel A. Alito found that Fischbein’s comments could have damaged Tucker’s reputation. Rejecting the view of five other circuit courts, the 3rd Circuit held that post-judgment interest on an award of attorney fees runs from the date that the court “actually quantifies the award” and not the date that the plaintiff became entitled to the award. “We recognize, of course, that our approach in this case is different from that of the Courts of Appeals for the 5th, 8th, 9th, 11th and Federal circuits, and thus that the weight of authority is against our position,” Judge Marjorie O. Rendell wrote in Eaves v. County of Cape May. Rendell found that since the federal post-judgment interest statute, 28 U.S.C. � 1961(a), uses the term “money judgment,” a plain reading of the law is that the interest cannot begin to accrue until the court fixes the amount of the attorney fees. FEBRUARY A unanimous panel upheld an award of more than $625,000 to the former president and CEO of US Wats Inc., who said he was fired for no reason in December 1996 — about five months before his two-year commitment was to expire — and that he was later cheated out of lucrative stock options. But the court said the trial judge erred in holding two officers of US Wats personally liable under theories of conspiracy and “alter ego.” And, in a ruling that could significantly swell the award to plaintiff Mark Scully, the panel also said the judge erred in refusing to award Scully attorney fees under the Pennsylvania Wage Payment and Collection Law. Scully was represented by attorneys Jonathan D. Wetchler and Amy Anderson Miraglia of Wolf, Block, Schorr and Solis-Cohen in Philadelphia. Failed City Council candidate Julie Welker lost her bid to revive an election fraud suit that accused her opponent, Darrell Clarke, of “stealing” the 1999 primary election in which he officially bested her by 140 votes. A unanimous three-judge panel rejected Welker’s argument that Philadelphia’s Board of Elections violated state law when it allowed residents who had moved away from her district to cast votes in their former home districts. “We agree with the district court that Pennsylvania law does not preclude persons who are registered at addresses from which they have moved from voting,” Judge Robert E. Cowen wrote. The decision was a victory for attorneys John P. Lavelle Jr. and John S. Summers of Philadelphia’s Hangley Aronchick, who represented the Philadelphia Board of Elections, and Clarke’s lawyers — Gregory M. Harvey, Charles C. Sweedler and Jeanette Melendez of Montgomery McCracken in Philadelphia. MARCH In the complex and long-running ERISA suit brought by Unisys Corp. retirees who say the company misled them into believing they would receive lifetime medical benefits, the court overturned a decision that said the statute of limitations had run on all the claims. Instead, the court found that some of the 20,000 retirees may be able to successfully invoke the “fraud or concealment” provisions of ERISA to extend the six-year statute of limitations. But the court split 2-1 on the question of when the statute would begin to run even in the case of fraud. The majority opinion, written by Judge Walter K. Stapleton and joined by Judge Richard L. Nygaard, said that the statute begins to run on the date that a worker retires. In a partial dissent, Judge Carol Los Mansmann said she would hold that the “last action” which constituted a part of the breach for statute of limitations purposes “was the termination of the medical benefits that Unisys had assured the retirees they would receive for life, rather than any particular decisions the retirees made on the strength of that assurance.” APRIL In a victory for employers, the court held that requiring a worker who claims to be disabled to submit to an independent medical exam is not enough to prove that the employer “regarded” the worker as disabled. Instead, a unanimous panel held in Tice v. Centre Area Transportation Authority that the Americans with Disabilities Act allows employers to require an IME so long as it is “job-related” and there is a “business necessity” for doing so. “A request for such an appropriately tailored examination only establishes that the employer harbors doubts (not certainties) with respect to an employee’s ability to perform a particular job,” Chief Judge Edward R. Becker wrote. “Doubts alone do not demonstrate that the employee was held in any particular regard,” Becker said, and “inability to perform a particular job is not a disability.” Lawyers who represent their own children in suits brought under the Individuals with Disabilities Education Act are not entitled to petition for attorney fees upon winning the case, the court held in Woodside v. School District of Philadelphia. Adopting the reasoning of the 4th Circuit, the panel found that when a lawyer-parent represents his or her own child, there is a danger of inadequate representation because such a task is “emotionally charged.” “The better rule is one which encourages parents to seek independent, emotionally detached counsel for their children’s IDEA actions,” visiting Judge Phyllis A. Kravitch of the 11th Circuit wrote in an opinion joined by 3rd Circuit Judges Alito and Theodore A. McKee. MAY In a major blow to the remaining plaintiffs in the long-running suit over alleged exposure to radiation in the March 1979 nuclear reactor accident at Three Mile Island, the 3rd Circuit held that the trial judge properly barred the plaintiffs from pursuing any “new theories” or finding new medical experts. The unanimous three-judge panel found that U.S. District Judge Sylvia H. Rambo of the Middle District of Pennsylvania had correctly interpreted the appellate court’s 1999 opinion that revived the claims of 1,990 plaintiffs. In its 1999 opinion, the 3rd Circuit ruled that Rambo had properly tossed out the claims of the first 10 plaintiffs whose cases were set to be tried as a test case when she found that their expert witnesses could not establish a key fact — that the TMI accident had caused them to be exposed to radiation. But in what appeared at the time to be a major victory for the plaintiffs, the appeals court said Rambo went too far when she tossed out the claims of all the remaining plaintiffs, all of whom claimed they have “neoplasms,” or abnormal tissue growths, that resulted from TMI radiation exposure. But when the case was sent back to Rambo, the plaintiffs claimed they were denied their right to develop the cases for the remaining plaintiffs. Judge Nygaard disagreed and said that Rambo was correct in saying that discovery was closed. In United States v. Adams, the court ruled that before a federal judge imposes sentence, the criminal defendant himself — and not just his lawyer — must be directly asked by the judge if he wants to make a statement on his own behalf. Posing the question only to the defense lawyer is “plain error,” the court said. “While the right of allocution is not constitutional, nonetheless it is ancient in origin, and it is the type of important safeguard that helps assure the fairness and, hence legitimacy, of the sentencing process,” Judge Rendell wrote. Employment discrimination plaintiffs cannot be faulted when a claim languishes for several years before the U.S. Equal Employment Opportunity Commission since the only time requirements in the law is that a plaintiff file suit in court within 90 days of receiving a “right-to-sue” letter, the court held in Burgh v. Borough Council of the Borough of Montrose. The ruling reversed a decision by Judge Richard P. Conaboy of the Middle District of Pennsylvania who dismissed a race discrimination suit filed nearly five years after the plaintiff first filed charges with the EEOC and the Pennsylvania Human Relations Commission. Judge Jane R. Roth found that Conaboy erred in holding that since neither Title VII nor the Pennsylvania Human Relations Act includes a statute of limitations, it was necessary to “borrow” one from Pennsylvania law. JUNE In Sheehan v. Anderson, the court held that a worker cannot sue a co-worker for slander over criticisms made to their superiors that related to job performance since such remarks are not capable of defamatory meaning under Pennsylvania law. In the suit, John Sheehan, an examiner employed by the Federal Reserve Bank, complained that three of his co-workers had falsely accused him of “sitting around, drinking coffee and talking” for more than an hour every morning and creating an “antagonistic” work environment in which others were afraid to express their opinions. But the bank’s lawyers — Frank A. Chernak of Montgomery McCracken and Howard J. Bashman of Buchanan Ingersoll in Philadelphia — argued that the defamation claim was fatally flawed since the statements were all made in the workplace to a limited audience of Sheehan’s superiors and focused entirely on his job performance. Judge Stapleton wrote, “Given the context, audience and nature of the alleged communication, we conclude that while the statements were critical of Sheehan and thus may annoy or embarrass him, they are not sufficient as a matter of law to create an action for defamation.” JULY “Dual recovery” exclusions in underinsured motorist policies are “invalid and unenforceable” in a multiple tortfeasor case, the court ruled in Nationwide Mutual Insurance Co. v. Cosenza, because they frustrate the goals of Pennsylvania’s Motor Vehicle Financial Responsibility Law. “Upholding the dual recovery prohibition in multiple tortfeasor cases would be counter to the express purpose of UIM insurance, which is protecting those persons who purchase motor vehicle liability insurance and then suffer bodily injury or property damage caused by a motorist who did not purchase similar coverage,” Judge Cowen wrote. But Cowen said the same exclusion would be enforceable in a single tortfeasor case where it serves the valid purpose of preventing the insured from attempting to convert inexpensive UIM insurance into the more expensive liability insurance. Judge Dolores K. Sloviter held that employers are legally required to think “creatively” to comply with the ADA and cannot simply say that a disabled worker’s proposal for a reasonable accommodation would have been “inconvenient.” Writing for a unanimous panel in Skerski v. Time Warner Cable Co., Sloviter revived an ADA suit brought by a cable installer who said that he was no longer able to climb because of panic attacks and that his employer refused to provide him a bucket truck that would have allowed him to keep doing his job. Plaintiff Larry Skerski complained that even though there was a bucket truck available, Time Warner instead demoted him to a job paying much less. Judge Donetta W. Ambrose of the Western District of Pennsylvania dismissed the suit after finding that climbing is an “essential function” of a cable installer’s job. But Sloviter found that employers have a duty to consider reasonable accommodations. “Time Warner’s defense in this case has been, in essence, that it would have been ‘inconvenient’ for it to make the adjustments needed to retain Skerski in the position that he previously had. However, the ADA was enacted to compel employers to look deeper and more creatively into the various possibilities suggested by an employee with a disability,” Sloviter wrote. “It is only when the accommodation suggested would constitute an undue hardship that the employer can justify failure to accommodate in that manner,” Sloviter wrote in an opinion joined by 3rd Circuit Judges Roth and Rendell. AUGUST Refusing to extend the U.S. Supreme Court’s decision in Oncale v. Sundowner, the court held that while same-sex sexual harassment is now actionable, the decision did not extend Title VII to cover claims of anti-gay harassment. “Harassment on the basis of sexual orientation has no place in our society. Congress has not yet seen fit, however, to provide protection against such harassment,” Judge Maryanne Trump Barry wrote in Bibby v. Philadelphia Coca-Cola Bottling Co. In Newton v. Merrill Lynch, the court refused to certify a class action brought by investors in the Nasdaq market who claimed they were cheated out of the best possible price in their trades by brokers who obviously knew since they were using new methods to get the best prices in their own trades. Judge Anthony J. Scirica found that the case would be impossible to manage because the trial “would require hundreds of millions of individual assessments.” Bids cannot be sealed when a federal judge holds an auction to choose the lead counsel in a class action because the public has a right to watch over the process and inspect all court papers, the court held in the matter of In Re Cendant Corp. The decision offered no opinion on the much larger question of whether auctions are a proper method for choosing lead counsel. Instead, the court focused only on the question of sealing because the appeal was brought by a lawyer who was hit with a $1,000 sanction for violating the court’s sealing order by discussing the bids in an interview with The New York Times. “We conclude that, in deciding to seal the bids, the district court failed to recognize that the bids were judicial records, subject to the common law presumption of public access,” Judge Julio M. Fuentes wrote. In a second Cendant decision later the same month, the court upheld a $3.2 billion settlement of the securities suit against Cendant Corp. and its auditors, Ernst & Young, but ordered that the plaintiffs’ attorney fees must be reduced from $262 million to no more than $187 million and possibly much less. Chief Judge Becker found that the settlement deserved court approval under the so-called Girsh factors since most weighed heavily in favor of the settlement and only a few weighed moderately against it. The appellate court’s ruling on the issue of the attorney fees stemmed from its decision that U.S. District Judge William H. Walls of the District of New Jersey erred when he held an auction to select the lead lawyers in the case. Since the auction resulted in a fee agreement that differed from the $187 million cap that was placed on the fees in the original retainer, Becker found that the trial judge erred when he awarded a larger fee amount. On remand, Becker said, Walls should consider awarding even less than the agreed-upon $187 million to avoid paying a “windfall” to the plaintiffs’ lawyers. “We cannot blind ourselves to the reality that both the fee award of $262 million under the auction and (potentially up to) $187 million under the retainer agreement are staggering in their size, and, on the basis of the evidence in the record, may represent compensation at an astonishing hourly rate,” Becker wrote. SEPTEMBER Gag orders should be used only to prevent prejudicing a jury pool or to avoid a “carnival atmosphere” in a high-profile case, but they cannot be justified by citing possible effects on the judge’s ability to decide pretrial issues, the court held in United States v. Scarfo. The ruling vacated a gag order imposed by U.S. District Judge Nicholas H. Politan of the District of New Jersey on attorney Donald F. Manno after Manno gave an interview to The Philadelphia Inquirer criticizing the government’s investigative techniques. At the time of the interview, Manno had already been disqualified from representing the lead defendant — Nicodemo S. Scarfo Jr., the son of the former Philadelphia mob boss — on charges of supervising a mob-linked bookmaking and loan-sharking operation in North Jersey. Even though he was already off the case, Politan issued a gag order that barred Manno from making any further comments to the media about the issue. The 3rd Circuit ruled that Politan violated Manno’s First Amendment rights and that there was no real need for the gag. “Judges are experts at closing their eyes and ears to extraneous or irrelevant matters and focusing only on the relevant in the proceedings before them,” Judge Max Rosenn wrote. Overturning an award of more than $580,000 in attorney fees, the court ruled in Zucker v. Westinghouse Electric Corp. that lawyers who represent shareholders in derivative actions are not entitled to any fees unless the suit benefited the corporation. Judge Morton I. Greenberg found that it was not enough to show that Westinghouse’s successor, CBS Corp., had benefited from the $250,000 settlement of the derivative action simply because it cleared the way for a $67 million settlement of a class action. Instead, Greenberg said, the derivative suit lawyers would be entitled to fees only if they could show that CBS “is better off because of the institution and settlement of the derivative litigation than it would have been if the litigation had not been brought in the first place.” OCTOBER In a rare move, a three-judge panel ruled from the bench to uphold a $1.75 million settlement in a class action against a mortgage provider, rejecting objections from lawyers who said it had undermined their similar case pending in federal court in Georgia. The ruling in Hall v. Midland Group upheld a decision by U.S. District Judge Jay C. Waldman who found that when two parallel, overlapping class actions are filed in different federal courts, one of the suits can settle independently with the approval of just one judge. Judge Roth announced the appellate court’s decision just minutes after oral arguments were completed, saying the court had concluded that the case in Georgia “is not a superior proceeding” and that Waldman had not abused his discretion when he approved the settlement. The ruling was a victory for lawyers on both sides of the Philadelphia case — defense attorney Burt M. Rublin of Philadelphia-based Ballard Spahr Andrews & Ingersoll for Midland Group and plaintiffs’ attorneys Stuart A. Eisenberg and Carol McCullough of McCullough & Eisenberg in Warminster, Pa. Student loans can’t be discharged in bankruptcy unless the debtor can show that her financial prospects are so “hopeless” that she won’t be able to make payments in the foreseeable future. In the matter of In Re Patricia A. Brightful, the court reversed a bankruptcy court decision that discharged more than $50,000 in student loans because repayment would cause an “undue hardship.” Judge Rendell found that the bankruptcy judge misapplied the 3rd Circuit’s three-prong test for student loan discharge announced in the 1995 decision in the matter of In re Faish. In a harshly worded opinion, the court reversed a decision by U.S. District Judge Stewart Dalzell to disqualify the entire Philadelphia U.S. Attorney’s Office from handling a case, saying the judge’s actions were “unjustified” because the prosecutors hadn’t violated any ethics rules. Dalzell had ruled that prosecutors violated several of Pennsylvania’s Rules of Professional Conduct when they accidentally sent a “victim’s rights” letter to a man who was actually targeted in the investigation. The indictment of Wayne Whittaker was part of a massive crackdown on “chop shops.” Although Whittaker’s name appeared on a list of owners of stolen cars, he should not have received a victim’s rights letter because prosecutors were already intent on pressing charges that he conspired in the theft of his own car to get out of making lease payments. Judge Greenberg was harshly critical of Dalzell’s handling of the issue, saying that “the district court’s unjustified view of this matter extended over a period of weeks during which it had an opportunity to reconsider its position, particularly when the government moved for reconsideration.” “But the district court adhered to its unjustified conclusions, seemingly losing all sense of proportion.” In a split decision, the court revived a civil rights suit against a police officer who allegedly shot and killed an unleashed dog just moments after the dog’s owner begged him not to shoot. In Brown v. Muhlenberg Township, the court held that a police officer’s unjustified shooting of a dog violates the owner’s Fourth Amendment right to be free from unreasonable seizures of property. Significantly, the court also found that Pennsylvania law would allow the owner who witnessed the shooting to sue the officer for intentional infliction of emotional distress. But a dissenting judge said he believed the lower court was correct in dismissing the suit because the evidence clearly showed that the dog, a rottweiler, was threatening the officer. Writing for the majority, Judge Stapleton found that while police have the right to destroy animals when they pose an “immediate danger,” they have no such right when the animal poses no threat and “the owner is looking on, obviously desirous of retaining custody.” NOVEMBER Voting 2-1, the court held that Montgomery County property owners have legal standing to challenge the county’s trash tax because they claim it inhibits their ability to “freely engage in the interstate market for waste-processing and disposal services.” The ruling in Oxford Associates v. Waste System Authority of Eastern Montgomery County reversed a decision by U.S. District Judge Ronald L. Buckwalter, who dismissed the case after finding that the plaintiffs’ interests are not within the “zone of interests” that the Commerce Clause was designed to protect. But a dissenting circuit judge said she would have upheld Buckwalter’s decision because she thinks the property owners’ interests are “too marginally related to the purpose behind the dormant Commerce Clause for them to have standing.” In a major victory for gun manufacturers, the court upheld the dismissal of a suit brought by Camden County that accused gun makers of creating a “public nuisance” and sought to recoup the governmental costs associated with gun-related crimes. “Whatever the precise scope of public nuisance law in New Jersey may be, no New Jersey court has ever allowed a public nuisance claim to proceed against manufacturers for lawful products that are lawfully placed in the stream of commerce,” the unanimous panel said in an unsigned, per curiam opinion in Camden County Board of Chosen Freeholders v. Beretta USA Corp. In the suit, attorneys David Kairys of Philadelphia’s Kairys, Rudovsky, Epstein, Messing & Rau, along with Peter Nordberg and Eric L. Cramer of Berger & Montague in Philadelphia, argued that the gun manufacturers’ conduct — the marketing and distribution of handguns — created and contributed to the widespread criminal use of handguns in Camden County, N.J. DECEMBER In a decision that commented extensively on the war on terrorism, the court overturned an award of more than $110,000 in attorney fees to a Palestinian man who successfully avoided deportation after the government accused him of involvement in the 1993 bombing of the World Trade Center. Judge Ruggero J. Aldisert found that the government’s efforts to deport Hany Mahmoud Kiareldeen were “substantially justified” even though the agreement was ultimately unable to prove its case against him to the satisfaction of the trial judge. “In immigration matters, the government may not always be able to prove its case by clear, convincing and unequivocal evidence, but this should never deter its assiduous search to weed out from our midst those who would destroy us,” Aldisert wrote. “That the FBI would be unwilling to compromise national security by revealing its undercover sources, is both understandable and comforting. That a court would then choose to criticize the FBI for being unwilling to risk undermining its covert operations against terrorists is somewhat unnerving,” Aldisert wrote. In a closely watched “environmental racism” case, a divided panel held that �1983 cannot be used to enforce a federal regulation “unless the interest already is implicit in the statute authorizing the regulation.” The ruling in South Camden Citizens in Action v. New Jersey Department of Environmental Protection vacated an injunction issued by U.S. District Judge Stephen M. Orlofsky of New Jersey that barred the opening of an already-built $50 million cement plant in Camden. Orlofsky found that New Jersey environmental officials never considered the disparate impact on a predominantly minority neighborhood that already suffers from the effects of a sewage treatment plant, a trash-to-steam plant and numerous toxic waste sites. But soon after, the U.S. Supreme Court handed down Alexander v. Sandoval, a 5-4 decision in which the justices held that there is no private right of action under Title VI of the Civil Rights Act to enforce “disparate impact” regulations. Orlofsky refused to lift the injunction, saying the plaintiffs had the right to pursue the same remedies under �1983. The 3rd Circuit disagreed. Voting 2-1, the court found that �1983 would be a valid avenue only if the statute created the right embodied in the regulation. Since Title VI prohibits only intentional discrimination, the court said the plaintiffs could not use the disparate impact regulation to create new rights. But a dissenting judge said the majority was engaging in “analytical alchemy” and that its decision would effectively overturn controlling 3rd Circuit precedent — something only the court sitting en banc is allowed to do.

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