3rd U.S. Circuit Court of Appeals

The Federal Trade Commission has the authority to regulate lax cybersecurity as an unfair business practice, the U.S. Court of Appeals for the Third Circuit has ruled, Bank Info Security's Tracy Kitten reports. Hotel chain Wyndham Worldwide Corp. was sued by the FTC for allegedly having inadequate security measures to protect consumer data, which the agency said violated the FTC Act's unfair business practice provisions.

Cybersecurity attorney Chris Pierson said the case "'is a seminal case for the FTC for the proposition that the FTC has the power and ability to oversee cybersecurity breach issues as the nation's default regulator."'

The Third Circuit has ruled that the religious exception from the mandate that all health insurance plans cover contraception is fair, The Legal Intelligencer's Saranac Hale Spencer reports. The accommodation for nonprofit religious organizations requires a head of a religious nonprofit to submit a self-certification to insurers that it will be claiming the exception so that the insurer, not the employer, is paying for the contraceptive portion of insurance coverage. The challengers argued "the act of sending the notification to the insurance company makes them complicit in providing the contraceptive services to which they object, which qualifies as a substantial burden under the Religious Freedom Restoration Act," but the appellate panel reasoned that "'the regulatory notice requirement does not necessitate any action that interferes with the appellees' religious activities,'" Spencer reports.

The Third Circuit is considering a constitutional challenge to New Jersey's ban on lawyers putting complimentary quotes from judges' opinions into ads, the New Jersey Law Journal. Only the full text of the opinion with the comments can be presented, the Journal notes.

On one hand, proponents of the ban argue it ensures that the judiciary does not appear to be biased in favor of one side and won't be pulled into  impermisible judicial endorsements. On the other hand, one of the appellate judges said during oral argument that judges' opinions "'can be quoted all over the place,' in law reviews, symposia and in court," so why can't a judge's comment about an attorney in an opinion be used in attorney advertising, the Journal further reports.

Delaware Business Court Insider's Jeff Mordock reported this week on Leo E. Strine Jr.'s confirmation as the chief justice of the Delaware Supreme Court. While Delaware is a preferred forum for America's corporations, one thing that struck me about Jeff's coverage is that Strine said he plans to focus on family court, which is an often overlooked area of law: "'One of the things I never forget is how important Family Court is. The Justice of the Peace Court comes into contact with more Delaware residents than any other court. The challenge of delivering the high-quality justice our court has done with limited resources is a daunting one and I'm committed to giving my all to do that. My background has positioned me well to understand the challenges of my colleagues in the other courts."'

Strine also defended the Court of Chancery's confidential arbitration program against the argument that it violates the First Amendment. Delaware is appealing to the U.S. Supreme Court in a last-ditch attempt to reinstate the program after the Third Circuit struck it down.

The New Jersey Law Journal reports on two issues of first impression the Third Circuit reached in a copyright case:

* one, courts don't have the power to cancel copyright registrations; 

* two,  the three-year statute of limiations for copyright infringement claims do not start to run for alleged joint authors of copyrighted works "until a claimant is alerted to the potential violation of his or rights through a co-author's express repudiation."
 

After the Third Circuit rejected the Delaware Court of Chancery from overseeing private arbitrations, Delaware has asked the U.S. Supreme Court to review what some called "secret trials," Reuters reports. "The arbitration process was seen by Delaware attorneys as a key to boosting the attractiveness of the Court of Chancery," Reuters further reports. "It was also considered economically important to the state, as at least one company in an arbitration dispute had to be incorporated in Delaware."

The Legal Intelligencer's Saranac Hale Spencer reports that the Third Circuit has decided to take up en banc a case involving GPS tracking. A three- judge panel ruled that a warrant was needed for police to attach a GPS tracker to a suspect's vehicle. "Prosecutors sought appeal on the issue of whether the police officers had shown objective good faith in their actions, which would allow the evidence they gathered through the GPS tracking to survive," The Legal reports.

Even though a trial date has been set in the first case in which plaintiffs are challenging Pennsylvania's ban on same-sex marriage, Governor Tom Corbett's administration is appealing to the Third Circuit on the applicability of U.S. Supreme Court precedent, Baker v. Nelson, on the Pennsylvania case, The Legal Intelligencer's Saranac Hale Spencer reports. In 1971, the Supreme Court upheld a five-page Minnesota Supreme Court opinion that the federal Constitution does not protect a fundamental right for same-sex couples to get married for "'want of a substantial federal question,'" according to SCOTUSblog's Lyle Denniston. The Supreme Court has not yet declared if there is a fundamental right for same-sex couples to get married.

U.S. District Judge John E. Jones III of the Middle District of Pennsylvania, however, rejected the idea that Baker still has precedential value: "'The Supreme Court has decided several cases since Baker which demonstrate that it no longer views constitutional challenges based on sex or sexual identity classifications as unsubstantial,'" The Legal reports.

The Third Circuit has ruled that the Delaware Court of Chancery's private arbitration program violates the public's First Amendment right to access court proceedings, The Legal Intelligencer reports. The panel was divided 2-1.

"Allowing public access to state-sponsored arbitrations would give stockholders and the public a better understanding of how Delaware resolves major business disputes," according to The Legal's account of the majority opinion. "Opening the proceedings would also allay the public's concern about a process only accessible to litigants in business disputes who are able to afford the expense of litigation. In addition, public access would expose litigants, lawyers and the Chancery Court judge alike to scrutiny from peers and the press."

Even though the Third Circuit has held that "secular, for-profit companies aren't afforded religious protection and the constitutional rights of their owners don't pass through to the corporate entity," a district-court federal judge sided with employers that are challenging Obamacare's contraceptive-coverage mandate on the grounds that it violates their freedom of religion, The Legal Intelligencer, Pennsylvania's legal newspaper, reported. The Legal also reported that U.S. District Chief Judge Joy Flowers Conti of the Western District of Pennsylvania denied a request from the Obama administration for an indicative ruling on the application of the Third Circuit case when Conti had granted an injunction for a plaintiff from the contraception mandate.

The issue is being primed for the U.S. Supreme Court. A circuit split is present on the issue between the Third Circuit and the Tenth Circuit.