                                                                                                                           Opinions of the United
2002 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


11-22-2002

Gagliardo v. Connaught Lab Inc
Precedential or Non-Precedential: Precedential

Docket No. 01-4045




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PRECEDENTIAL

       Filed November 22, 2002

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 01-4045

JANE A. GAGLIARDO;
JOHN GAGLIARDO

v.

CONNAUGHT LABORATORIES, INC.,
       Appellant

ON APPEAL FROM THE
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

(D.C. Civil No. 97-cv-00768)
District Judge: The Honorable Yvette Kane

Submitted Under Third Circuit LAR 34.1(a)
October 29, 2002

Before: NYGAARD, GARTH and MICHEL,*
Circuit Judges.

(Filed: November 22, 2002)
_________________________________________________________________

* Honorable Paul R. Michel, Circuit Judge, United States Court of
Appeals for the Federal Circuit, sitting by designation.


       Carl J. Greco, Esq.
       4th Floor
       327 North Washington Avenue
       Professional Arts Building
       Scranton, PA 18503
        Counsel for Appellant

       Patrick J. Reilly, Esq.
       Gross McGinley LaBarre & Eaton
       33 South 7th Street
       PO Box 4060
       Allentown, PA 18105
        Counsel for Appellees

OPINION OF THE COURT

MICHEL, Circuit Judge.

Plaintiff-appellee Jane Gagliardo ("Gagliardo") sued
Connaught Laboratories, Inc. ("CLI") for employment
discrimination in the United States District Court for the
Middle District of Pennsylvania. After a trial, the jury found
CLI’s dismissal of Gagliardo violated both the Americans
with Disabilities Act ("ADA"), 42 U.S.C. S 12101 et seq., and
the Pennsylvania Human Relations Act ("PHRA"), 43 Pa.
Cons. Stat. S 955 et seq., and awarded Gagliardo 2.5
million dollars. CLI appeals the district court’s denial of its
motion for judgment as a matter of law ("JMOL"), denial of
its motion for a new trial or remittitur, and denial in part
of its motion to alter or amend the judgment to comply with
42 U.S.C. S 1981a(b)(3)(D) (limiting the damage amount
recoverable under the ADA).

We affirm the district court’s judgment in all respects
challenged before us.

I.

Gagliardo began working for CLI in 1987. In 1992 she
became a customer account representative and continued
in that capacity until her dismissal. Gagliardo’s
responsibilities in that position included receiving calls,

                                2


handling accounts, answering customers’ questions, and
supporting the sales force. Gagliardo was also responsible
for a special project -- the handling of military orders. For
most of her years with CLI, Gagliardo was by all accounts
a capable employee.

Gagliardo’s life began to change in 1992 or 1994 when
she was diagnosed with Multiple Sclerosis ("MS").1
Gagliardo’s symptoms varied over time and included muscle
spasms, fatigue, and numbness in her hands, back, and
legs. The most severe of these symptoms was Gagliardo’s
fatigue. The fatigue affected her ability to think, focus, and
remember. All of Gagliardo’s symptoms were subject to
being exacerbated by stress.

These symptoms began affecting her at work in 1995,
after which she requested the lowering of the temperature
in her workspace as an accommodation. Thereafter,
Gagliardo began to make mistakes at work. In November of
1995 Gagliardo discussed the burden of her military orders
project with her then-supervisor, Wayne Neveling,
expressing concern that this burden was adversely affecting
her ability to do other required work. After that
conversation, Neveling endeavored to analyze the effect of
the military orders on Gagliardo’s performance -- a task
that was never completed.

Beginning in February 1996, Gagliardo’s new supervisor,
Judith Stout, took Gagliardo through the CLI disciplinary
process for poor job performance. Getting first an oral
warning, Gagliardo then received a written caution,
retraining, probation, and ultimately dismissal. Throughout
this process, Gagliardo continued to believe she could
reduce her mistakes if the military orders responsibility was
taken away from her, but this never happened. Also during
this process, Gagliardo met with Christine Kirby, CLI’s
manager of employee communications and human
resources information systems. It was Kirby’s responsibility
to counsel CLI employees and managers on the
_________________________________________________________________

1. MS is a permanent disorder of the brain and spinal cord in which the
body identifies the covers of the nerves as foreign and attacks them. As
a result, the nervous system of the afflicted person does not function as
it should.

                                3


requirements of the ADA. In Gagliardo’s conversations with
Kirby, Gagliardo indicated that her MS was interfering with
her job performance. Kirby, herself an MS sufferer, later
acknowledged that removal of the military project would
have been a reasonable accommodation, but also
acknowledged that CLI had not provided that
accommodation. CLI terminated Gagliardo’s employment on
May 29, 1996 because of her continued errors and failure
to follow procedures.

In July of 1996 Gagliardo filed a complaint alleging
disability and age discrimination with the Pennsylvania
Human Relations Commission. Gagliardo later sued CLI in
the United States District Court for the Middle District of
Pennsylvania alleging discrimination under both the ADA
and the PHRA. The case was tried to a jury in September
2000.

The jury returned a verdict in favor of Gagliardo on both
the ADA and PHRA claims and awarded her $2,000,000 in
compensatory damages and $500,000 in punitive damages.
After trial CLI filed a motion to alter or amend judgment to
comply with 42 U.S.C. S 1981a, motion for JMOL, and a
motion for a new trial or remittitur. The district court
granted in part and denied in part the motion to alter or
amend (lowering the punitive damages award to $300,000),
but denied CLI’s other motions. The court’s decisions were
filed on September 28, 2001.

On October 29, 2001 CLI appealed to this court. We have
jurisdiction pursuant to 28 U.S.C. S 1291.

II.

We have plenary review of a district court’s order denying
JMOL. Warren v. Reading Sch. Dist., 278 F.3d 163, 168 (3d
Cir. 2002). Accordingly, we apply those standards that the
district court applied. JMOL under Fed. R. Civ. P. 50 is
appropriate only where, "viewing the evidence in the light
most favorable to the non-movant and giving it the
advantage of every fair and reasonable inference, there is
insufficient evidence from which a jury could reasonably
find liability." Id. (quoting Fultz v. Dunn, 165 F.3d 215, 218
(3d Cir. 1998)). On appeal, CLI asserts that JMOL as to

                                4
liability was appropriate because, they argued, Gagliardo
failed to make out a prima facie case under the ADA and
PHRA.2

To establish a prima facie case under the ADA a plaintiff
must show: (1) she is disabled within the meaning of the
ADA; (2) she is otherwise qualified to perform the essential
functions of the job; and (3) she has suffered an adverse
employment decision because of discrimination. Taylor v.
Phoenixville Sch. Dist., 184 F.3d 296, 306 (3d Cir. 1999).
CLI challenges only the first element, that being whether
Gagliardo was disabled.

The ADA defines "disability" as: "(A) a physical or mental
impairment that substantially limits one or more of the
major life activities of such individual . . . or (C) being
regarded as having such an impairment." 42 U.S.C.
SS 12102(2)(A)-(C) (2000). At trial, Gagliardo presented
evidence relevant to both (A) and (C) above, and on appeal
CLI challenges its sufficiency as to both claims. With regard
to (A), the district court, in its order denying JMOL,
determined that "[t]he chronic fatigue and resulting
forgetfulness brought on by multiple sclerosis prevented
Plaintiff from participating in major life activities of thinking
and remembering." In addition, as to (C), the court
concluded "[t]estimony of company representatives
established that Plaintiff had a record of an impairment
and was regarded as disabled." On appeal, CLI fails to
persuade us that the district court erred in its
determinations that sufficient evidence supported the jury’s
verdict.

CLI first argues that Gagliardo offered no proof she was
limited in any major life activity. Gagliardo, however,
submitted evidence she was limited in the major life
activities of concentrating and remembering (more
generally, cognitive function). Our court has held that such
activities are major life activities. See Taylor , 184 F.3d at
_________________________________________________________________

2. Because liability under the PHRA is premised upon language similar
to that of the ADA and because that language is generally interpreted in
accordance with the judicial construction of the ADA, we address only
the language of the ADA in our analysis. See Kelly v. Drexel Univ., 94
F.3d 102, 105 (3d Cir. 1996).

                                5


307 (holding thinking is a major life activity); see also
EEOC Guidelines, 29 C.F.R. S 1630.2(i), and Department of
Health and Human Services Rehabilitation Act Regulations,
45 C.F.R. S 84.3(j)(2)(ii) (listing examples of major life
activities, including learning and working).

CLI next argues that the testimony fails to show
Gagliardo was "substantially limited" in the activities of
concentrating and remembering. CLI cites the recent
Supreme Court case of Toyota Motor Manufacturing,
Kentucky, Inc. v. Williams, 122 S. Ct. 681 (2002), in which
the Court held that "to be substantially limited in
performing manual tasks, an individual must have an
impairment that prevents or severely restricts the individual
from doing activities that are of central importance to most
people’s daily lives. The impairment must also be
permanent or long-term." Id. at 691 (citing 29 C.F.R.
SS 1630.2(j)(2)(ii)-(iii) (2001)). In the EEOC’s regulations,
"substantially limited" is defined as: "Significantly restricted
as to the condition, manner or duration under which an
individual can perform a particular major life activity as
compared to the condition, manner or duration under
which the average person in the general population can
perform that same major life activity." 29 C.F.R.S 1630.2(j).
The regulations list several factors for evaluating whether
someone is "substantially limited": "(i) The nature and
severity of the impairment; (ii) The duration or expected
duration of the impairment; (iii) The permanent or long
term impact, or the expected permanent or long term
impact of or resulting from the impairment." Id.
S 1630.2(j)(2).

Contrary to CLI’s assertions, we hold that Gagliardo did
present witnesses from whose testimony a jury could
reasonably conclude she was substantially limited in her
ability to concentrate and remember. First, Gagliardo’s
physician, Dr. Barbour, testified that there was no cure for
MS and that the MS produced Gagliardo’s fatigue. Dr.
Barbour also expressed his opinion as an expert that
Gagliardo was substantially limited in her ability to, among
other things, learn, work, and think. Second, Gagliardo
testified she experienced muscle spasms and fatigue. Third,
four of Gagliardo’s coworkers testified as to her fatigue and

                                6


muscle spasms. Fourth, Gagliardo produced evidence that
her supervisor recognized her memory and concentration
problems, having provided Gagliardo with video and audio
tapes to assist Gagliardo in overcoming her memory
problems. Lastly, Gagliardo’s son and her husband
similarly testified that she was often fatigued and had
trouble concentrating and focusing.

Therefore, we conclude that there was sufficient evidence
that Gagliardo was "disabled" within the meaning of the
ADA to support the jury’s verdict. Because of this
conclusion, we need not address Gagliardo’s alternative
theory that CLI regarded her as being disabled. We affirm
the district court’s denial of CLI’s motion for JMOL.

III.

We review de novo a district court’s interpretation of a
statute. Idahoan Fresh v. Advantage Produce, Inc., 157 F.3d
197, 202 (3d Cir. 1998). The statute at issue limits the
damages available to a claimant under certain federal
statutes, including the ADA. 42 U.S.C. S 1981a(a)(2) (2000).
The "cap" applies to both punitive and compensatory
damages and depends on the number of persons employed
by the defendant. Id. S 1981a(b)(3). The specific cap
applicable in this case is $300,000. Id.S 1981a(b)(3)(D).
Gagliardo sued under the ADA, which is subject to the cap,
and the PHRA, which is not. The jury did not apportion
damages between the claims, instead granting a general
verdict of $2,000,000 in compensatory and $500,000 in
punitive damages. On CLI’s motion to alter or amend the
judgment, the district court applied the federal cap to only
the punitive damages,3 lowering them to $300,000, and
apportioned all the compensatory damages to Gagliardo’s
PHRA claim. Thus, on appeal we are presented with the
issue of whether the statutory cap of S 1981a applies to the
entirety of the damages where the jury awarded them
_________________________________________________________________

3. The district court rightly concluded that the jury awarded the punitive
damages under plaintiff ’s ADA claim -- and therefore subjected them to
the S 1981a cap -- because punitive damages are not available under the
PHRA. See Hoy v. Angelone, 691 A.2d 476, 483 (Pa. Super. Ct. 1997).

                                7


unapportioned between a capped federal claim and a
virtually identical, uncapped state claim.

On appeal, CLI argues the district court’s apportionment
constituted reversible error because, according to CLI,
S 1981a applies to all similar claims in a single lawsuit. On
this issue of first impression in our circuit, we instead
accept the sound reasoning of the district court and two of
our sister circuits and hold that S 1981a does not prevent
a claimant from recovering greater damages under a state
law claim that is virtually identical to a capped federal
claim. Passantino v. Johnson & Johnson, 212 F.3d 493, 510
(9th Cir. 2000) (discussing Title VII and the Washington
Law Against Discrimination); Martini v. Fed. Nat’l Mortgage
Ass’n, 178 F.3d 1336, 1349-50 (D.C. Cir. 1999) (discussing
Title VII and the District of Columbia Human Rights Act). In
Passantino and Martini, the courts focused on the effect a
broader application of S 1981a would have on recovery
under state law claims corresponding to capped federal
claims. Both courts recognized the federal law at issue,
Title VII, contained an express prohibition against limiting
state remedies. Passantino, 212 F.3d at 510; Martini, 178
F.3d at 1349-50. Importantly, the ADA also contains such
a prohibition: "Nothing in this chapter shall be construed to
invalidate or limit the remedies, rights, and procedures of
any Federal law or law of any State . . . that provides
greater or equal protection for the rights of individuals with
disabilities than are afforded by this chapter." 42 U.S.C.
S 12201(b) (2000). Here, the PHRA, with its similar
language and applicability, clearly provides a cause of
action nearly identical to that of the ADA. The fact that the
PHRA does not contain a damages cap further indicates
that it was intended to provide a remedy beyond its federal
counterpart, the ADA. As the courts in Passantino and
Martini recognized, subjecting such state law claims to the
federal cap would effectively limit a state’s ability to provide
for greater recovery than allowed under the corresponding
federal law. Passantino, 212 F.3d at 510; Martini, 178 F.3d
at 1349-50. Imposing such a limitation would violate the
federal law’s prohibition on limiting state remedies. Id.

As noted by the Ninth Circuit in Passantino and the trial
court, a district court’s obligation to uphold lawful jury

                                8


awards whenever reasonable further supports the
apportionment of damages between the state and federal
claims present here. Passantino, 212 F.3d at 510; see also
Motter v. Everest & Jennings, Inc., 883 F.2d 1223, 1230 (3d
Cir. 1989). In this case, given the similarity of the claims
and the jury’s unapportioned award of damages, it is
reasonable to infer that the jury intended to award its
entire verdict to Gagliardo. Because there is no cap under
the PHRA, it was entirely reasonable for the trial court to
apportion the damages so as to allow Gagliardo to recover
the entire jury award, as reduced by the district court.

In light of this reasoning, we are not persuaded by CLI’s
offering of contrary authority. Two of these cases are easily
distinguishable because they involve multiple federal
claims. Smith v. Chicago Sch. Reform Bd., 165 F.3d 1142,
1148 (7th Cir. 1999) (discussing claims under 42 U.S.C.
S 1981 and Title VII); Hudson v. Reno, 130 F.3d 1193, 1196
(6th Cir. 1997) (analyzing claims under Title VII, the Equal
Pay Act, 29 U.S.C. S 206(d), and the Privacy Act, 5 U.S.C.
S 552a). Moreover, these cases simply do not stand for the
propositions CLI argues. Indeed, the issue in Smith and
Hudson was whether a party could recover under separate
and distinct episodes of discrimination in a single lawsuit
under a federal cause of action that was subject to the
S 1981a cap. Smith, 165 F.3d at 1150; Hudson, 130 F.3d at
1199. In Hudson, the district court had found in favor of
the plaintiff only on her Title VII claims; thus the issue
before the Sixth Circuit was whether the S 1981a cap
applied to each claim or to the lawsuit as a whole. Hudson,
130 F.3d at 1196, 1199-1200 (denying plaintiff recovery of
damages above cap where jury awarded $250,000 for sex
discrimination, $500,000 for retaliation, and $750,000 for
the constructive discharge). Similarly in Smith , the Seventh
Circuit did not remand the plaintiff ’s S 1981 claim, holding
instead that her evidence could not support such a claim.
Smith, 165 F.3d at 1149. Therefore, its discussion of
S 1981a was limited to whether the cap applied to each
claim or incident of discrimination under Title VII. Id. at
1150 (denying recovery beyond the S 1981a cap where
plaintiff contended she had three claims of discrimination
-- one for each school that discriminated against her); see
also id. at 1148 ("The bulk of the damages depends on

                                9


S 1981, because a Title VII award is subject to a statutory
cap.") Both courts relied on the plain language of S 1981a
to conclude that the cap limited recovery per lawsuit under
the capped federal statute, rather than per claim. Smith,
165 F.3d at 1150-51; Hudson, 130 F.3d at 1200-01. The
issue presented in the case at bar is wholly different.
Gagliardo is not attempting to circumvent the damages cap
by asserting multiple claims of discrimination under a
federal law; rather she urges the apportionment of the
jury’s verdict between two nearly identical causes of action,
one under a federal law and one under a state law.

The one case CLI cites that is on point is Oliver v. Cole
Gift Centers, Inc., 85 F. Supp. 2d 109 (D. Conn. 2000). In
Oliver, the district court, on defendant’s post-verdict
motion, declined to apportion damages between Title VII
and the Connecticut Fair Employment Practices Act. Id. at
114. The court acknowledged it was going against the
weight of authority, but found apportionment would be
inappropriate because it "would contravene the policies
underlying both the Congressional limitation on recovery
under Title VII and the limitation on punitive damages
under Connecticut law." Id. Although CLI urges us to adopt
the Oliver court’s reasoning and holding, we decline. Rather
than contravening any federal or state policy, we instead
conclude that our decision "to permit [Gagliardo] to benefit
from the remedy provided by state law does not conflict
with the congressional purpose of making [Federal]
employment discrimination awards reasonable, and is
expressly provided for in the statute." Luciano v. Olsten
Corp., 912 F. Supp. 663, 675 (E.D.N.Y. 1996).

In sum, we hold that S 1981a does not prohibit
apportionment of damages between claims, one under a
capped federal statute and another under a corresponding
uncapped state statute, so that the verdict winner gets the
maximum amount of the jury award that is legally
available. We base our holding on the ADA’s explicit
language which prohibits limiting state remedies, the policy
of upholding reasonable jury verdicts, and the power of
persuasive authority from two other circuit courts.

                                10


IV.

We review a district court’s denial of a motion for a new
trial for abuse of discretion. Olefins Trading, Inc. v. Han
Yang Chem. Corp., 9 F.3d 282, 289 (3d Cir. 1993).
Similarly, we review a district court’s denial of a motion for
remittitur for an abuse of discretion. Starceski v.
Westinghouse Elec. Corp., 54 F.3d 1089, 1100 (3d Cir.
1995). A court may grant a new trial "where a miscarriage
of justice would result if the verdict were to stand." Olefins,
9 F.3d at 289 (citations and quotations omitted). On
appeal, CLI asserts three grounds for a new trial: (1) the
trial court’s failure to adopt two proposed jury instructions;
(2) the jury’s improper award of punitive damages; and (3)
the jury’s award of damages was so disproportionate to the
injury that it "shocks the conscience of the court." We
address each in turn.
A.

CLI takes issue with the district court’s refusal to adopt
two of its proposed jury instructions. First, CLI states that
the court should have instructed the jury that Gagliardo
was an "at-will employee" and therefore CLI was free to
terminate her employment so long as it wasn’t for
discriminatory reasons. As the court below noted, the
authority CLI cited does not require a district court to give
such a charge. See Pivirotto v. Innovative Sys., Inc., 191
F.3d 344 (3d Cir. 1999). In Pivirotto the plaintiff in a Title
VII case argued the district court’s inclusion of a similar
charge constituted reversible error. Id. at 350. This court
held otherwise, noting that although the inclusion of an at-
will instruction was not erroneous, "[t]he better practice
may be for a district court to not give such an instruction
in a statutory discrimination suit." Id. at 350 n.2. Thus, no
cited authority holds that inclusion of this charge is a legal
necessity. Further, CLI offers no specific reason or facts
demonstrating that this charge was necessary in this case.

Second, CLI contends the district court erred in not
instructing the jury that the mere diagnosis of MS does not
establish a statutory disability. CLI claims this instruction
was necessary because the court did instruct the jury that

                                11


MS is an impairment within the meaning of the ADA. This
instruction was not prejudicially erroneous, however,
because the court also instructed the jury that the
disability must substantially limit a major life activity.
Hence, the jury was fully aware that the impairment itself
did not establish a disability within the meaning of the
ADA. Looking at the instructions as a whole, we hold the
district court did not abuse its discretion by failing to
include the requested clarifying instruction.

B.

CLI also claims there was insufficient evidence relevant to
punitive damages to submit the question to the jury and
that the jury failed to follow the instruction in awarding
such damages. Punitive damages are available under the
ADA when "the complaining party demonstrates that the
respondent engaged in a discriminatory practice . . . with
malice or with reckless indifference." 42 U.S.C.
S 1981a(b)(1) (2000). These terms focus on the employer’s
state of mind and require that "an employer must at least
discriminate in the face of a perceived risk that its actions
will violate federal law." Kolstad v. Am. Dental Ass’n, 527
U.S. 526, 535-36 (1999).

As the trial court concluded, Gagliardo produced
sufficient evidence of CLI’s reckless indifference toward her
statutory disability rights. Gagliardo presented evidence
that CLI -- through its employees -- was aware she had
MS. For example, Gagliardo produced evidence that her last
supervisor, Judith Stout, and CLI’s human resources
representative, Christine Kirby, discussed Gagliardo’s MS
prior to Gagliardo’s dismissal. Gagliardo also produced
evidence that Stout requested information concerning MS.
She also offered evidence that she advised CLI of the
limitations her condition imposed on her ability to perform
her job and that a high level CLI employee -- herself an MS
sufferer -- counseled Gagliardo regarding the impact of the
disease. In addition, Gagliardo produced evidence that she
had requested accommodation on multiple occasions and
that CLI refused to act on any of those requests. Finally,
Gagliardo demonstrated that CLI was aware of her federal
disability rights, as Christine Kirby testified she was

                                12


familiar with the ADA and responsible for ensuring CLI
followed the ADA. In sum, there was sufficient evidence to
support the jury’s award of punitive damages.

C.

CLI argues chiefly that the excessiveness of the jury’s
award mandates a new trial or remittitur. The jury awarded
$2.0 million in compensatory damages and another
$500,000 (later reduced to $300,000) in punitive damages.
Gagliardo’s expert testified her economic loss was $450,000
so we assume the remaining $1.55 million of the jury’s
verdict on compensatory damages was for pain and
suffering. CLI attacks only these emotional damages on
appeal, arguing their excessiveness compels either a new
trial or remittitur.

To recover emotional damages a plaintiff must show"a
reasonable probability rather than a mere possibility that
damages due to emotional distress were in fact incurred [as
a result of an unlawful act]." Spence v. Bd. of Ed., 806 F.2d
1198, 1201 (3d Cir. 1986). The district court found this
standard to be met because Gagliardo produced evidence
from her co-workers and family demonstrating the effects
her problems with CLI had on her life. This testimony tied
Gagliardo’s pain and suffering to her early employment
problems after she was diagnosed with MS and detailed
their subsequent worsening effect on her life. The testimony
demonstrated the effects of the mental trauma,
transforming Gagliardo from a happy and confident person
to one who was withdrawn and indecisive. Because this
evidence establishes a reasonable probability that Gagliardo
incurred the emotional damages, we hold that the trial
court did not abuse its discretion by allowing the jury’s
verdict to stand. See id. Therefore, we affirm the district
court’s denial of CLI’s motion for a new trial. In addition, in
light of this evidence we also hold the trial court did not
abuse its discretion in finding the jury’s verdict is not so
excessive as to be unsupportable or offend the conscience
of the court, and therefore denying remittitur. See, e.g.,
Gumbs v. Pueblo Intern., Inc., 823 F.2d 768, 771 (3d Cir.
1987) ("This court has noted that our review of this
question is severely limited: we may disturb the district
                                13


court’s determination only if the verdict is so grossly
excessive as to shock the judicial conscience.") (citations
and quotation marks omitted).

In sum, we affirm the district court’s denial of CLI’s
motion for a new trial or for remittitur.

V.

For the foregoing reasons, we affirm the judgment of the
district court.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                                14
