Timothy J. Savage

In Brewer v. SmithKline Beecham Corp., plaintiffs moved to remand eight pharmaceutical liability cases that the defendant, GlaxoSmithKline LLC, had removed to federal court on diversity grounds. The court granted the motions, holding that the LLC is a citizen of Pennsylvania for jurisdictional purposes and that removal is barred by 28 U.S.C. § 1441(b). Applying the Supreme Court’s “nerve center” test from Hertz Corp. v. Friend, the court determined that operational decision-making for the LLC occurs in Philadelphia, where its senior officers and board direct its business activities, even though its sole member is a Delaware holding company. Because the holding company delegates control to the operating LLC, the LLC’s own nerve center governs citizenship, resulting in the defendant being a citizen of the forum state.

proceduretorts & liability

Hartford Casualty Insurance Company sued for a declaratory judgment that it had no duty to defend or indemnify New Hope Healthcare under a business liability policy in a Pennsylvania state court negligence action brought by the estate of a deceased resident of a personal care home managed by New Hope. The underlying complaint alleged that New Hope's negligence in failing to supervise the resident, provide access to rooms, and maintain security contributed to his injuries and death. New Hope argued the claims fell within coverage and that any inaccuracies in its insurance application were not material misrepresentations. The court denied Hartford's motion for summary judgment, holding that the complaint asserted ordinary negligence rather than excluded professional negligence and that there was insufficient evidence to void the policy for knowing material falsehoods in the application.

business & regulatoryhealthcaretorts & liability

The case involved defendant John Herron, who was convicted after a jury trial of attempting to manufacture 500 grams or more of methamphetamine in violation of 21 U.S.C. §§ 846 and 841(a)(1), (b)(1)(A) based on a government sting operation using fake precursor chemicals. Herron moved for judgment of acquittal under Fed. R. Crim. P. 29, contending there was insufficient evidence that he intended to produce that quantity because recorded conversations referred to the chemical as Sudafed pills containing only about three percent ephedrine rather than pure ephedrine. The court granted the motion in part, striking the quantity finding and entering judgment on the lesser included offense of attempt to manufacture an unspecified amount under § 841(a)(1) and (b)(1)(C), while denying outright acquittal. The core reasoning was that, viewing the evidence in the light most favorable to the government, no rational jury could conclude beyond a reasonable doubt that Herron believed he possessed enough pure ephedrine to yield 500 grams or more of methamphetamine.

criminal lawprocedure

In this ERISA case, Duane Morgan challenged Prudential's termination of his long-term disability benefits after 24 months, arguing that his disability stemmed from fibromyalgia rather than anxiety and depression, which the plan defined as a mental illness subject to a benefit cap. The court applied a deferential arbitrary-and-capricious standard of review to the administrative record and determined that Prudential's conclusion regarding the cause of the disability was not supported by substantial evidence. As a result, the court entered judgment for Morgan on the benefits claim while also granting Prudential's counterclaim for reimbursement of overpaid short- and long-term benefits.

labor & employmenthealthcare

The case involved Carmen Dixon-Rollins suing Trans Union for negligently and willfully violating the Fair Credit Reporting Act by failing to adequately reinvestigate disputes about an erroneous collection account on her credit report stemming from a settled landlord-tenant debt. After a jury awarded her $30,000 in actual damages and $500,000 in punitive damages, the court denied Trans Union's motion for judgment as a matter of law or a new trial on the liability findings but reduced the punitive damages to $270,000. The court reasoned that sufficient evidence supported the jury's conclusions because Trans Union repeatedly relied solely on the debt collector's verifications without independent corroboration or forwarding consumer information, demonstrating both negligence and willfulness, while the original punitive amount was disproportionate to the harm.

business & regulatory

This case under the False Claims Act involved relator William Thomas alleging that Siemens Medical Solutions USA, Inc. and its parent companies fraudulently induced the Veterans Administration to overpay for medical equipment by submitting false Discount and Pricing Information forms that omitted larger discounts given to other customers. The court held that Thomas stated viable claims under 31 U.S.C. §§ 3729(a)(1) and (2) against SMS but failed to state any claim against Siemens Corporation or Siemens AG, and that no claims were stated under § 3729(a)(7) against any defendant. It further ruled that service of process on Siemens AG was invalid because Thomas did not comply with the Hague Convention and had not sufficiently alleged that the subsidiary could accept service as an agent. The decision rested on the sufficiency of the pleadings regarding false statements and pricing disclosures required by the Federal Acquisition Regulation, combined with the lack of facts supporting liability or agency for the parent entities.

criminal lawbusiness & regulatoryprocedure

This case is a qui tam action under the False Claims Act in which the relator alleges that defendants misrepresented DNA research findings in NIH grant applications and related reports, resulting in false claims for federal funding. The court addressed previously undecided statute-of-limitations questions under the FCA, holding that the tolling provision in 31 U.S.C. § 3731(b)(2) does not apply when the government has not intervened and that the limitations period in § 3731(b)(1) is triggered by the filing of the claim rather than later payment. The ruling is confined to the framework of federal grant programs. The core reasoning rests on statutory interpretation of the FCA's text and structure in light of the government's non-intervention.

criminal lawprocedure

This case involved a putative class action by Pennsylvania consumers against nationally chartered banks, alleging violations of state consumer protection laws, breach of contract, and related claims based on the banks' failure to adequately disclose dormancy and replacement fees that reduced the value of gift cards before expiration. The defendants moved to dismiss, arguing that the state law claims were preempted by the National Bank Act and OCC regulations governing national banks' powers. The court denied the motion, holding that the claims were not preempted. It reasoned that no specific federal regulation addressed gift card disclosures or marketing, so enforcing general state consumer protection requirements on disclosures did not conflict with or significantly interfere with the banks' federally authorized activities or the OCC's oversight.

business & regulatoryfederal power

This bankruptcy appeal concerned borrowers' claims under the Truth in Lending Act that a mortgage lender failed to include a yield spread premium, title insurance fee, and other charges in the finance charge calculation when refinancing an existing loan. The Bankruptcy Court granted summary judgment to the defendants and denied the borrowers' motion for leave to amend their complaint to add new claims and a defendant. On appeal, the District Court affirmed the ruling that the yield spread premium was properly disclosed because it was already incorporated into the interest rate. It vacated the ruling on the title insurance fee, however, because the Bankruptcy Court had applied an incorrect legal standard for determining eligibility for a discounted refinance rate, and it remanded for reconsideration of the motion to add a defendant and for further proceedings on that claim.

business & regulatoryprocedure

In this ERISA action, Anne C. Kaufmann challenged Metropolitan Life Insurance Company's termination of her long-term disability benefits under her employer's group plan, after she stopped working due to chronic back pain and related conditions following unsuccessful surgeries. The court entered judgment for Kaufmann, holding that MetLife acted arbitrarily and capriciously in denying benefits. The decision was not supported by substantial evidence because MetLife selectively credited a brief report from its non-treating consultant that dismissed objective medical findings, while disregarding evaluations from multiple treating physicians without adequate explanation. The court applied a deferential abuse-of-discretion standard, factoring in MetLife's dual role as administrator and payor but finding procedural bias in the review process.

labor & employmentprocedure

Marie Ellis sued Hartford Life and Accident Insurance Company under ERISA after the insurer terminated her long-term disability benefits, claiming she could still perform her job as a secretary despite neck, shoulder, back, and other medical issues. Ellis argued that Hartford's review process was flawed, ignored treating specialists, and cherry-picked evidence. Applying a deferential arbitrary-and-capricious standard of review under Firestone and the Supreme Court's Glenn decision, the court examined the administrative record and concluded that Hartford's decision was reasonable because it compared Ellis's documented limitations against her actual job duties without procedural irregularities. The court therefore denied Ellis's summary judgment motion and granted Hartford's, entering judgment for the insurer.

labor & employmenthealthcare

In United States v. Goodman, the defendant, convicted of conspiracy to distribute crack cocaine and related drug and firearm offenses, moved for a second reduction of his 144-month sentence under 18 U.S.C. § 3582(c)(2) based on the Sentencing Commission's retroactive Amendment 706 lowering offense levels for crack cocaine. The court granted the motion and reduced the sentence to 134 months. It held that a prior below-guideline variance did not preclude application of the amendment, recalculated the advisory guideline range as 144-165 months after substituting the new offense level, and considered the 18 U.S.C. § 3553(a) factors along with the defendant's prison conduct, which included some infractions offset by program participation.

criminal law

The case concerned a dispute between a parent and a school district over the education of a high school student with severe mental retardation and other disabilities under the Individuals with Disabilities Education Act. The parent sought full-time placement in regular education classes with supplemental aids including facilitated communication, along with compensatory education, while the district maintained that the student's current mix of life skills and limited regular classes met legal requirements. The court affirmed the Appeals Panel's decision, which required inclusion in certain non-academic and limited academic settings but rejected full-time regular placement, facilitated communication, and compensatory education. It reasoned that the district was already educating the student in the least restrictive environment to the maximum extent appropriate and providing meaningful educational benefit, based on an independent review of the record and deference to credibility findings.

civil rights

In this FOIA action, the law firm Cozen O’Connor requested extensive documents from the Treasury Department concerning terrorism-related designations of individuals, entities, and foreign states to aid in civil litigation over the September 11 attacks. Treasury moved for summary judgment, asserting an adequate search and proper withholding under exemptions, including Glomar responses for certain entities on national security grounds. The court denied summary judgment, concluding that questions remained about the search's adequacy despite most withholdings being justified based on in camera review of classified materials. Treasury was directed to provide further details on its search parameters to confirm responsiveness.

federal powerprocedurecriminal law

In this employment discrimination action, plaintiff John Williams, an African-American former employee of Wells Fargo, alleged that his termination for sending emails with sexually suggestive and inappropriate content violated Title VII, Section 1981, and the Pennsylvania Human Relations Act, claiming racial bias because 30 of the 31 employees terminated in the investigation were African American. Wells Fargo moved for summary judgment, contending that the decision-maker lacked knowledge of employees' races and that violations of company policies provided legitimate, nondiscriminatory reasons for the terminations. The court denied the motion, holding that Williams had established a prima facie case of racial discrimination and presented sufficient evidence from which a jury could infer that the company's articulated reasons were pretextual, including more favorable treatment of similarly situated non-African-American employees and statistical disparities in the investigation and terminations.

labor & employmentcivil rights

In this case, Kimberly-Clark Pennsylvania, LLC brought a federal declaratory judgment action against the Delaware County Regional Water Quality Control Authority over disputed wastewater and solid waste discharge fees and underreporting fines. The court first held that diversity jurisdiction existed, determining that an LLC's citizenship is based on its member's citizenship rather than its own principal place of business. It then dismissed the action, ruling that the solid waste claim was not ripe because no enforcement action had been taken and that abstention was appropriate for the wastewater claim to avoid interfering with parallel state administrative proceedings. The decision rested on the Declaratory Judgment Act's discretion and the absence of any federal claims or exceptional circumstances warranting federal intervention.

business & regulatoryenvironmentprocedure

This case is a bankruptcy appeal concerning whether cash distributions and promissory notes given to shareholders prior to a merger constituted fraudulent transfers under the Pennsylvania Uniform Fraudulent Transfer Act (PUFTA). The district court affirmed the bankruptcy court's ruling that the creditor failed to prove the transfers left the company with unreasonably small assets and unable to pay debts. The core reasoning was that the burden of proof in a constructive fraud action under PUFTA lies with the plaintiff creditor by a preponderance of the evidence, not with the defendants, and the factual findings supported that the burden was not met.

business & regulatoryprocedure

In Fontroy v. Beard, state prisoners challenged the constitutionality of a Pennsylvania Department of Corrections policy allowing prison staff to open incoming legal and court mail lacking a special control number outside the inmates' presence. The court applied the Turner v. Safley test to determine whether the policy was reasonably related to legitimate penological interests like prison security. After reviewing the record, including evidence on contraband risks and policy implementation, the court found no valid rational connection between the regulation and asserted security interests, as the policy failed to demonstrate necessity or effectiveness in preventing threats. Consequently, the court granted summary judgment to the plaintiffs, held the policy unconstitutional under the First Amendment, and issued an injunction against its enforcement.

criminal lawfree speechcivil rights

This bankruptcy appeal addressed whether the Truth in Lending Act's 'tolerances for accuracy' provision (15 U.S.C. § 1605(f)), which excuses lenders from liability for minimal understated finance charges, qualifies as an affirmative defense that must be pled or is waived. The case arose after borrower Gayle Sterten refinanced her home with Option One Mortgage Corp., later claimed TILA violations including unreasonable appraisal and notary fees not included in the finance charge, and sought rescission; the bankruptcy court initially found the $57 discrepancy fell within the tolerance and ruled for the lender, then reversed on reconsideration to hold the provision was waived. The district court held that the provision is not an affirmative defense, based on the statute's policy to avoid liability for minor errors, the Federal Rules of Civil Procedure, and the definition of affirmative defenses. It therefore vacated the bankruptcy court's January 2006 order and remanded for entry of judgment in favor of Option One consistent with the original October 2005 ruling.

business & regulatoryprocedure

In this employment discrimination case, plaintiff Daniel Hudyka alleged that Sunoco terminated him based on his age and race in violation of the Age Discrimination in Employment Act and the Civil Rights Act of 1866. Sunoco moved to compel arbitration under its Employee Resolution in Action (ERA) Program, which it had implemented during Hudyka's employment and claimed required binding arbitration of such claims. The court denied the motion, holding that no valid and enforceable arbitration agreement existed. The court reasoned that Sunoco failed to provide adequate notice of the arbitration terms to Hudyka, and even if notice had been given, the program's language was ambiguous and conflicting—using terms like "option" and "may" that did not clearly mandate arbitration instead of litigation—requiring construction against the drafter.

labor & employmentcivil rights