Articles Tagged with Third Circuit

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In its August 11, 2014 decision in Griswold v. Coventry First, LLC, et al. the Third Circuit affirmed the District Court’s decision that denied Defendant’s motion to compel arbitration, and held that Plaintiff, Lincoln T. Griswold, was not estopped from pursuing his fraud claim by rejecting arbitration.

Griswold purchased an $8.4 million life insurance policy in January of 2006, establishing a Lincoln T. Griswold Irrevocable Trust for the “sole and exclusive purpose” of maintaining ownership of the policy. Shortly thereafter the formation of the Trust, Griswold formed a limited liability partnership in Georgia, Griswold LLP, as the sole beneficiary of the policy. Upon the receipt of the proceeds from the life insurance policy, this limited liability partnership would be dissolved, and the trustee would then liquidate the property, satisfy the claims of creditors, and distribute remaining property to the partners. At the completion of this task, the trustee would file a “Cancellation of the Election to Become a Limited Liability Partnership” to terminate the partnership.

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Refusing to adopt the heightened pleading standard under Rule 9(b), the US Court of Appeals for the Third Circuit reversed the U.S. District Court for New Jersey’s order, which held that Plaintiff Foglia failed to meet the pleading requirements under Rule 9(b) for pleading a false claims act case. U.S. ex rel. Foglia v. Renal Ventures Mgmt., LLC, 2014 WL 2535339 (3d Cir. June 6, 2014).  In contrast to the District Court, the Third Circuit agreed to a more liberal standard for pleading cases under the federal False Claims Act and concluded that Foglia’s factually false claim against Renal proved sufficient to satisfy Rule 9(b).  The circuits are split over whether a whistleblower must allege specific examples of false claims to survive a Rule 12(b)(6) motion, and the Third Circuit held that the whistleblower need not provide such specific examples.

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United States Court of Appeals for the Third Circuit. Robert FREEDMAN, Appellant v. Sumner M. REDSTONE; Philippe P. Dauman; Thomas E. Dooley; George S. Abrams; Alan C. Greenberg; Shari Redstone; Frederic V. Salerno; Blythe J. McGarvie; Charles E. Phillips, Jr.; William Schwartz; Robert K. Kraft; Viacom, Inc. No. 13–3372. Decided: May 30, 2014 

The United States Court of Appeals for the Third Circuit affirmed the Delaware District Court’s July 16, 2013 decision by further solidifying the most basic requirements for filing a derivative and direct claim. The plaintiff, Robert Freedman, as a stockholder, failed to make a pre-suit demand to Viacom’s Board of Directors in his derivative claim. Also, the plaintiff failed to state a cause of action in his direct claim against the defendant. As such, the District Court dismissed the case, which the Third Circuit affirmed.

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