UPON FURTHER REVIEW
The Supreme Court of the United States, in its just-completed term, issued a total of 73 signed opinions in argued cases and five summary reversals without oral argument. Six argued cases reached the Supreme Court directly from the U.S. Court of Appeals for the Third Circuit, and in those cases, the Supreme Court affirmed the Third Circuit only once. In the remaining five cases, the Third Circuit’s judgment was either reversed (four times) or vacated (once).
As in previous years, my description of how the Third Circuit fared in the 2012-13 term will be divided into two parts. This column reviews the outcomes of cases that reached the U.S. Supreme Court directly from the Third Circuit. My August column will discuss how the Third Circuit performed in other cases that presented circuit splits expressly involving the Third Circuit.
Although a 17 percent affirmance rate may not seem particularly admirable, the Third Circuit’s affirmance rate was higher than the affirmance rate that six other federal appellate courts achieved in the 2012-13 term. The First, Sixth, Eighth and Eleventh circuits all suffered a 100 percent reversal rate. And the affirmance rate of the Fifth and Ninth circuits stood at only 14 percent last term.
The case in which the Third Circuit achieved an affirmance last term produced a unanimous Supreme Court ruling. Unfortunately, two of the reversals were also unanimous. The remaining three decisions were each decided by a 5-4 margin. In two of those 5-4 rulings, the dissenting opinion took pains to emphasize the likely limited impact of the decision.
Due to the happenstance of the U.S. Supreme Court’s calendar, the Third Circuit received all five unfavorable rulings last term before receiving its first affirmance, on April 10. The affirmance came in Oxford Health Plans LLC v. Sutter, No. 12–135, in which Justice Elena Kagan wrote the opinion on behalf of a unanimous court. The question presented involved the permissibility of a class action in an arbitration proceeding between the parties.
The opposing parties agreed that the arbitrator should decide whether the contract between the parties allowed for a class action proceeding in the arbitration. After the arbitrator decided that a class action was permissible, Oxford Health Plans sought judicial review, arguing that in so deciding, the arbitrator had exceeded his powers. The Third Circuit, in an opinion by Judge Julio M. Fuentes in which Judge Michael A. Chagares and a visiting judge joined, ruled that the arbitrator did not exceed his powers by concluding that class arbitration was permissible. The U.S. Supreme Court unanimously agreed.
The five unfavorable rulings that the Third Circuit received from the U.S. Supreme Court last term arrived during a two-month period beginning March 27 and ending May 20. Indeed, the Supreme Court announced only a total of four signed opinions from March 27 through April 16 — issuing two opinions on each of those dates — and in all four of those decisions, the Third Circuit’s judgment was either reversed or vacated.
The first reversal that the Third Circuit received this past term came in what had been one of the term’s most anticipated cases, Comcast v. Behrend, No. 11–864. Many observers had hoped or feared that the Supreme Court would use this case to further restrict the availability of class certification in cases seeking damages as the primary remedy. The Third Circuit, in an opinion by Senior Judge Ruggero J. Aldisert in which Judge D. Michael Fisher joined, affirmed the federal district court’s class certification order. Judge Kent A. Jordan dissented in part.
By a vote of 5-4, the Supreme Court reversed. The majority, in an opinion by Justice Antonin Scalia in which Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito Jr. joined, ruled that class certification was improper because the plaintiffs were unable to show that damages were capable of being measured on a classwide basis. In a joint dissenting opinion written by Justices Ruth Bader Ginsburg and Stephen G. Breyer, in which Justices Sonia Sotomayor and Kagan joined, the dissent noted an unusual quirk of this case, which was that the plaintiff class had agreed damages had to be capable of proof on a classwide basis for class certification to be proper. The dissent argued that this concession limited the impact of the majority opinion, because a substantial body of authority previously established that an inability to prove damages on a classwide basis should not necessarily be fatal to class certification.
The other 5-4 reversal in which the dissenters appear to have a legitimate argument regarding the decision’s limited impact came in Genesis HealthCare v. Symczyk, No. 11–1059. Under the Fair Labor Standards Act, a plaintiff may initiate a “collective action,” which would permit other similarly situated claimants to opt-in to the original plaintiff’s lawsuit, thereby binding these other opt-in claimants to the outcome of the case. In this particular case, Genesis HealthCare filed a formal settlement offer giving plaintiff Laura Symczyk all of the relief that she had sought for herself in her lawsuit. The question presented in the Third Circuit was whether Symczyk could continue to maintain her case as a collective action even if the defendant’s settlement offer had mooted her personal claims.
The Third Circuit, in an opinion by Judge Anthony J. Scirica in which Judges Thomas L. Ambro and Thomas I. Vanaskie joined, ruled that even if the defendant had offered the plaintiff all of the relief that she was entitled to recover, the case was not moot with regard to the collective action in which other claimants could choose to join.
By a 5-4 ruling, the Supreme Court reversed in an opinion written by Thomas on behalf of the same five justices in the majority in the Comcast case. Kagan issued a dissenting opinion in which she noted that the entire case before the U.S. Supreme Court rested on the plaintiff’s ill-advised concession that the defendant’s offer of settlement had mooted her case, even though the plaintiff had never formally accepted that offer of settlement. Consequently, in the dissent’s view, because Symczyk’s own claim was not moot, this case did not actually present the issue that the majority purported to decide.
The remaining three unfavorable results from last term can be described much more succinctly. In US Airways v. McCutchen, No. 11–1285, an employer that paid health benefits to an employee who was injured in a car accident involving a third party sought to recover reimbursement from the employee’s personal injury recovery achieved in a separate lawsuit that the employee had brought against the third party who was responsible for causing the accident. The question presented was whether the employer’s recovery should be reduced to reflect the attorney fee that the employee had to pay in the successful personal injury lawsuit.
The Third Circuit, in a ruling by Fuentes in which Judge Dolores K. Sloviter and Vanaskie joined, held that the attorney fee incurred in the personal injury action by the employee should be taken into consideration in determining how much reimbursement the employer should receive. Although the Supreme Court, by a vote of 5-4, vacated and remanded the Third Circuit’s judgment, the majority opinion by Kagan would still allow the Third Circuit to reach the same result on remand, only this time by applying the “common fund” doctrine, whereby the costs of creating a fund of money can be assessed against the beneficiaries of that fund.
In Millbrook v. United States, No. 11-10362, the Supreme Court considered whether the federal government’s waiver of sovereign immunity under the Federal Tort Claims Act applied to a federal prisoner’s claim of assault and battery by correctional officers. In a unanimous per curiam opinion issued by a three-judge panel consisting of Sloviter, Fisher and Senior Judge Joseph F. Weis, the Third Circuit affirmed the dismissal of the prisoner’s lawsuit based on the authority of an earlier Third Circuit ruling from 1986. The Supreme Court, in an opinion by Thomas, unanimously disagreed, holding that the Federal Tort Claims Act waived the federal government’s sovereign immunity for the federal prisoner’s claims of assault and battery against federal correctional officers.
The Third Circuit’s final reversal last term came in another unanimous opinion by Thomas. In PPL v. Commissioner of Internal Revenue, No. 12–43, the Supreme Court considered whether PPL Corp. was entitled to receive a credit against its federal income taxes for taxes a company partially owned by PPL had paid in the United Kingdom. In an opinion by Ambro, in which Chagares and Senior Judge Leonard I. Garth joined, the Third Circuit ruled that PPL was not entitled to any federal income tax credit. The Supreme Court unanimously disagreed, ruling in an opinion issued May 20 that PPL was entitled to the credit.
Although the Third Circuit’s record of 1-5 last term does not initially seem to be deserving of praise, on closer analysis this result is not as bad as it appears. To begin with, a 17 percent affirmance rate puts the Third Circuit solidly in the middle of all federal appellate courts. Secondly, although the Supreme Court vacated the Third Circuit’s judgment in US Airways, the outcome the high court reached was not substantially different from the Third Circuit’s result in that case. And finally, two 5-4 reversals in the realm of class actions and collective actions involved fact patterns that may limit the long-term significance of those reversals.
Next month’s column will examine how the Third Circuit fared at the Supreme Court in cases on direct review from other appellate courts.
Howard J. Bashman operates his own appellate litigation boutique in Willow Grove, Pa., and can be reached at 215-830-1458 and via email at firstname.lastname@example.org. You can access his appellate blog at http://howappealing.law.com and via Twitter @howappealing