Justia Civil Procedure Opinion SummariesArticles Posted in US Court of Appeals for the Sixth Circuit
Wellfount, Corp. v. Hennis Care Centre of Bolivar, Inc.
Wellfount, with its principal place of business in Indiana, contracted to provide services to Hennis nursing homes in Ohio. When the relationship soured, Wellfount sued Hennis in Indiana state court. Before Hennis filed a responsive pleading, Wellfount voluntarily dismissed its suit when Hennis questioned whether Indiana was a proper venue. The dismissal was without prejudice. Wellfount refiled in federal court. Hennis argued improper venue, based on a forum selection clause in the parties’ contract. Before Hennis filed a response, Wellfount moved for voluntary dismissal without prejudice under Federal Rule of Civil Procedure 41(a)(2). Wellfount indicated that it planned to refile in Ohio state court. Hennis moved to convert Wellfount’s motion into a self-effectuating notice of dismissal under Rule 41(a)(1). Hennis argued that no court order was necessary for Wellfount to dismiss its case because Hennis had yet to serve an answer or motion for summary judgment. Wellfount opposed Hennis’s motion; it sought a Rule 41(a)(2) court-ordered dismissal to avoid the claim-preclusive effect of Rule 41(a)(1)(B). The district court granted Wellfount’s motion, dismissing the case without prejudice. The Sixth Circuit affirmed; neither Rule 41(a)'s text nor the purpose of the Rule 41(a)(1)(B) two-dismissal clause indicate that a plaintiff is barred from seeking a court-ordered Rule 41(a)(2) dismissal if it is eligible to file a Rule 41(a)(1) notice of dismissal. The court rejected Hennis’s argument that allowing court-ordered dismissals at the earliest stages of a lawsuit will nullify the two-dismissal rule. View "Wellfount, Corp. v. Hennis Care Centre of Bolivar, Inc." on Justia Law
Adams v. Baker
Tennessee inmate Adams filed a pro se lawsuit under 42 U.S.C. 1983, claiming that Baker retaliated against him for his informal grievances about unfair workplace procedures in violation of his First Amendment rights. On January 17, 2018, the district court denied Adams’ request for a preliminary injunction. Adams filed this interlocutory appeal. The Sixth Circuit dismissed the appeal as moot. While Adams’ appeal was pending, he took his case to trial and won. On August 15, 2019, the district court entered a final judgment, making his appellate request for a preliminary injunction moot. The point of a preliminary injunction is to maintain “the status quo” until the resolution of the case “on its merits.” A final decision on the merits extinguishes a preliminary injunction. Even if the court agreed with Adams on the merits of his interlocutory appeal, it could not provide “effectual relief” because any preliminary injunction would immediately “dissolve.” View "Adams v. Baker" on Justia Law
United States v. $39,000.00 in U.S. Currency
During a screening of Wells’ luggage, TSA officials discovered bundles of U.S. currency totaling $39,000.00. The government filed a forfeiture action. Wells filed a verified claim asserting that he is “the sole and absolute owner of the monies ... unlawfully removed from [his] exclusive possession and control.” Wells filed an answer to the forfeiture complaint, denying the government’s allegations on the grounds “that the answer could very well tend to, or actually, violate Claimant’s Fifth Amendment rights.” Pursuant to the Federal Rules of Civil Procedure’s Supplemental Rules for Admiralty or Maritime Claims and Civil Forfeiture Actions, the government served “special interrogatories” to Wells seeking information testing his assertion of ownership. In response to each interrogatory, Wells stated, “Claimant refuses to answer this interrogatory as he is asserting his Fifth Amendment right against self-incrimination.” The government then moved for summary judgment, citing Wells’ failure to respond to discovery requests aimed at determining the legitimacy of his alleged ownership interests. The district court granted the government summary judgment, finding that Wells failed to establish standing. The Sixth Circuit affirmed. A blanket assertion of the Fifth Amendment privilege does not excuse a claimant’s burden of establishing standing at the summary judgment stage, nor can a claimant use the privilege “to make one’s assertions of ownership impervious to attack.” View "United States v. $39,000.00 in U.S. Currency" on Justia Law
VanderKodde v. Mary Jane M. Elliott, P.C.
Defendants bought consumer debts. Collection proceedings in Michigan state court suit resulted in a judgment against each plaintiff. The defendants employed Michigan’s simplified post-judgment garnishment procedure. None of the debtors timely objected. The rate of post-judgment interest “is calculated on the entire amount of the money judgment, including attorney fees and other costs,” using a complex formula. The Michigan Department of Treasury’s website lists every judgment interest rate calculated using this method. During the 11-year period at issue, it reached a peak of 4.033% and a valley of 0.687%. The plaintiffs’ debts were, instead, subjected to a rate of 13%, the maximum interest rate allowed for a judgment “rendered on a written instrument evidencing indebtedness with a specified [or variable] interest rate” although the underlying default judgments specify that they are “not based on a note or other written evidence of indebtedness,” and none of the judgments include any supporting written instrument. The plaintiffs alleged that using the 13% rate was improper and filed a federal suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and the Michigan Collection Practices Act. The Sixth Circuit reversed the dismissal of the debtors’ suit. The suit “is not the rare one" subject to the Rooker-Feldman doctrine, under which federal courts are prohibited from reviewing appeals of state-court decisions. The plaintiffs' injuries stemmed from the defendant’s conduct, not the state-court judgment. View "VanderKodde v. Mary Jane M. Elliott, P.C." on Justia Law
Radiant Global Logistics, Inc. v. Furstenau
Furstenau managed Radiant’ Detroit office. When he joined a competitor, BTX, Radiant sued him for misappropriation of trade secrets. The district court entered a preliminary injunction, prohibiting Furstenau and other former Radiant employees who had joined BTX from using Radiant’s trade secrets and from contacting certain customers and carriers for a six-month period. The Sixth Circuit dismissed an appeal as moot because the six months have passed. BTX never objected to the injunction’s ongoing restriction on the use of Radiant’s trade secrets. The six-month noncompete restrictions expired and today requires nothing; a court has no way to grant relief as to that part of the order. A mootness exception for disputes “capable of repetition, yet evading review” does not apply. A live controversy remains as to the merits of Radiant’s claims, so BTX will still have the opportunity for its day in court—including an appeal —once the district court enters a final judgment. The court declined to vacate the district court’s order; BTX did not even request vacatur until after oral argument and “slept on its rights,” and a preliminary injunction has no preclusive effect—no formal effect at all—on the judge’s decision whether to issue a permanent injunction. View "Radiant Global Logistics, Inc. v. Furstenau" on Justia Law
Madej v. Maiden
Since 1997, the Social Security Administration has found Madej completely disabled and entitled to benefits. In addition to her other ailments, her doctors say she has “multiple chemical sensitivity,” which is not a disease recognized by the World Health Organization or the American Medical Association. She goes to great lengths to avoid everyday materials that she believes will trigger harmful reactions like burning eyes and throat, dizziness, or nausea. Madej fears that the use of asphalt on a road near her home will cause more harm. She sued to stop the roadwork, alleging violations of the Fair Housing Amendments Act and the Americans with Disabilities Act. Applying the “Daubert” standard, the district court excluded the opinions of Madej’s experts that the asphalt would injure her. Without expert causation evidence, the claims could not withstand summary judgment. The Sixth Circuit affirmed, stating that “as far as we are aware, no district court has ever found a diagnosis of multiple chemical sensitivity to be sufficiently reliable to pass muster under Daubert.” The court also questioned whether Madej had cognizable claims under the cited federal statutes. It is not obvious that the roadwork amounts to a “provision of services” “in connection with” the Madej home under 42 U.S.C. 3604(f)(2) View "Madej v. Maiden" on Justia Law
VIP, Inc. v. KYB Corp.
Plaintiffs purchase KYB shock absorbers from KAC through “buying groups.” There is no arbitration provision in the buying group agreements nor in the invoices reflecting specific purchases between the plaintiffs and KAC. Beginning in 2016, the buying group agreements provided that the individual plaintiffs agreed to accept a rebate from KAC in exchange for servicing consumer warranty issues. The agreement requires the plaintiffs, in exchange for that allowance, to honor the terms of the KYB limited warranty, which mandates arbitration in accordance with American Arbitration Association Commercial Rule 7(1), which delegates to the arbitrator the power to determine his jurisdiction. The plaintiffs filed a putative class action, alleging anticompetitive activities in the auto parts industry. The defendants move to dismiss, citing the Federal Arbitration Act, 9 U.S.C. 1. The Sixth Circuit affirmed the denial of the motion. Before referring a dispute to arbitration, the court must determine whether a valid arbitration agreement exists; if a valid agreement exists and delegates the arbitrability issue to the arbitrator, the court may not decide arbitrability. In this case, the parties did not form an agreement to arbitrate. The warranty’s arbitration provision applies only to original retail purchasers, a group that does not include the plaintiffs. View "VIP, Inc. v. KYB Corp." on Justia Law
Young v. Kenney
On November 8, 2019, the district court entered judgment dismissing Young’s prisoner civil-rights complaint. A notice of appeal was due to be filed by December 9. Young’s notice of appeal was dated December 17 and filed on December 30. Young claimed that he did not see the judgment until November 21, because “he was placed on dry cell protocol” on October 22, and was transferred on October 30, and placed in the prison’s psychiatric unit. An attached exhibit confirmed the transfer. Young stated that inmates in the psychiatric unit are not permitted to have property in their possession. The Sixth Circuit remanded for a determination of whether Young has shown excusable neglect or good cause to warrant an extension of time for filing a notice of appeal. Both 28 U.S.C. 2107(c) and Federal Rule of Appellate Procedure 4(a)(5) provide for an extension of time where the party seeking such an extension files a motion asking for more time. While no particular form of words is necessary, a simple notice of appeal does not suffice. However, district courts must liberally construe a document that could reasonably be interpreted as a motion for an extension of time. Young’s notice of appeal effectively reads as a motion for an extension of time to file and will be treated as such. View "Young v. Kenney" on Justia Law
Miller v. Bruenger
The Office of Personnel Management (OPM), manages the Federal Employees’ Group Life Insurance Act (FEGLIA), 5 U.S.C. 8705(a). Absent a valid beneficiary selection, FEGLIA provides an order of precedence for the proceeds, starting with the policyholder's surviving spouse, followed by the policyholder's descendants. FEGLIA will not follow that order if a “court decree of divorce, annulment, or legal separation, or . . . any court order or court-approved property settlement agreement” “expressly provides” for payment to someone else. The decree, order, or agreement must be “received” by the policyholder’s “employing agency” or OPM before the policyholder’s death. At the time of his death, Miller worked at Tinker Air Force Base and maintained a MetLife policy. Coleman's 27-year marriage to Donna ended in divorce in 2011. Their property settlement agreement states that “[Donna] shall remain the beneficiary of the life insurance policy.” The court ordered Coleman to assign his FEGLI benefits to Donna. Upon Coleman’s death, his only child, Courtenay, was appointed administratrix of his estate. The Air Force informed Courtenay that the court order had not been filed with Coleman’s employing office. Courtenay was paid $172,000 in proceeds and sought a declaration that she is the rightful owner. Citing lack of subject-matter jurisdiction, the district court dismissed the suit. The Sixth Circuit affirmed, noting the lack of a substantial federal question. FEGLIA does not contain an express cause of action for Donna. There is no federal agency involved. View "Miller v. Bruenger" on Justia Law
Quality Associates., Inc v. Procter & Gamble Distributing Center, LLC
QAI sued P&G in federal court for breaking a contract with it in a racially discriminatory manner, 42 U.S.C. 1981. P&G had already sued QAI in Ohio state court over the same contractual dispute underlying QAI’s section 1981 claim; that litigation was still ongoing. P&G moved to dismiss QAI’s federal suit, arguing that its section 1981 claim was a compulsory counterclaim to the state litigation, Ohio Civ. R. 13(A). The district court dismissed QAI’s suit. The Sixth Circuit reversed. A federal court cannot enforce a state compulsory-counterclaim rule against a federal litigant outside the preclusion context, and because QAI’s claim is not yet precluded here (because the state court has not yet entered a final judgment), the district court lacked authority to base its judgment of dismissal on this ground. That this case implicates compulsory counterclaims does not alter the basic federalist principle that litigants are free to split their claims between state and federal court and “race to the first judgment,” even if that stratagem is ill-advised and inefficient. View "Quality Associates., Inc v. Procter & Gamble Distributing Center, LLC" on Justia Law