Justia Civil Procedure Opinion Summaries

Hackers compromised customer-payment information at several Wendy’s franchisee restaurants. Shareholders took legal action against Wendy’s directors and officers on the corporation’s behalf to remedy any wrongdoing that might have allowed the breach to occur. Three shareholder derivative legal efforts ensued—two actions and one pre-suit demand—leading to a series of mediation sessions. Two derivative actions (filed by Graham and Caracci) were consolidated and resulted in a settlement, which the district court approved after appointing one of the settling shareholder’s attorneys as the lead counsel. Those decisions drew unsuccessful objections from Caracci, who had not participated in the latest settlement discussions. No other shareholder objected. Caracci appealed decisions made by the district court, which together had the effect of dramatically reducing Caracci’s entitlement to an attorney’s fees award.The Sixth Circuit affirmed. The court acted within the bounds of its wide discretion to manage shareholder litigation in its appointment of a lead counsel, its approval of the settlement, and its interlocutory orders on discovery and the mediation privilege. View "Graham v. Peltz" on Justia Law

The Sixth Circuit vacated the judgment of the district court granting summary judgment in favor of Defendant, a Canadian resident, in this lawsuit brought under 28 U.S.C. 1332(a)(2), holding that remand was required for the district court to decide the issue of subject matter jurisdiction in the first place.Plaintiff, Akno 1010 Market Street St. Louis Missouri, LLC, sued Defendant in federal district court, asserting diversity jurisdiction but stating only that it was "organized under the laws of Michigan." Although Plaintiff did not adequately allege its own citizenship the district court decided the case on the merits. The Sixth Circuit vacated the district court's judgment, holding that further fact-finding was required on the issue of whether the district court had subject matter jurisdiction to hear this dispute. View "Akno 1010 Market Street St. Louis Missouri LLC v. Pourtaghi" on Justia Law

Capital, a New York LLC with its principal place of business in New York, sued Peters, an Indiana corporation with its principal place of business in Indiana, for breach of contract and received a judgment by confession in New York state court. Peter then brought suit in the Southern District of Ohio, alleging that Capital and its Operations Manager, a resident of Florida. engaged in a scheme that violated RICO, 18 U.S.C. 1962. The Sixth Circuit affirmed dismissal for lack of jurisdiction, adopting the “forum state approach.” Service over out-of-district defendants is governed by 18 U.S.C. 1965(b), which provides that if “other parties residing in any other district be brought before the court, the court may cause such parties to be summoned, and process for that purpose may be served in any judicial district.” Section 1965 in its entirety “does not provide for nationwide personal jurisdiction over every defendant in every civil RICO case, no matter where the defendant is found.” Section 1965(a) grants personal jurisdiction over an initial defendant to the district court for the district in which that person resides, has an agent, or transacts his affairs; nationwide jurisdiction hinges on whether at least one defendant has minimum contacts with the forum state. Peters did not assert sufficient facts to establish that the court had personal jurisdiction over either defendant and did not specifically allege how the claims arose from conduct within Ohio. View "Peters Broadcast Engineering, Inc. v. 24 Capital, LLC" on Justia Law

To dispute a property tax assessment under Detroit ordinances and Michigan state law, taxpayers “make complaint on or before February 15th" before the Board of Assessors. Any person who has complained to the Board of Assessors may appeal to the Board of Review. For the Michigan Tax Tribunal to have jurisdiction over an assessment dispute, “the assessment must be protested before the board of review.” On February 14, 2017, Detroit mailed tax assessment notices to Detroit homeowners, including an “EXTENDED ASSESSORS REVIEW SCHEDULE” that would conclude on February 18, just four days later. At a City Council meeting on February 14, the city announced: “The Assessors Review process will end this year February the 28th.” News outlets reported the extension and that Detroit had waived the requirement of appearance before the Board of Assessors so residents could appeal directly to the Board of Review. Detroit did not distribute individualized mailings to so inform homeowners.Plaintiffs filed a class action, alleging violations of their due process rights; asserting that Michigan’s State Tax Commission assumed control of Detroit’s flawed property tax assessment process from 2014-2017 so that its officials were equally responsible for the violations; and claiming that Wayne County is “complicit” and has been unjustly enriched. The district court dismissed for lack of subject matter jurisdiction, citing the Tax Injunction Act and the principle of comity. The Sixth Circuit reversed, finding that a state remedy is uncertain. View "Howard v. City of Detroit" on Justia Law

Brown’s company, TME, owned the House of Blues recording studio in Memphis and leased a studio to Falls. Hanover issued separate insurance policies to TME and Falls. Intruders vandalized and burgled the studio, and committed arson. Hanover made advance payments to TME and Falls, then discovered that Brown had submitted false receipts and had been the target of several similar arson incidents. Hanover sued Brown, TME, and Falls, seeking recovery of the prepaid funds and a declaratory judgment. A jury returned a verdict against Brown but found that Falls was entitled to recover the full insurance coverage. Hanover unsuccessfully moved to overturn that verdict because TME was named as an additional insured on Falls’s policy and his policy voided coverage if “you or any other insured” misrepresented a material fact. Meanwhile, Falls sought monetary damages and declaratory relief against Brown and TME in Tennessee state court.Hanover filed an interpleader complaint against Brown, TME, and Falls in federal court, requesting that the court find the insurance award void under Tennessee public policy or, alternatively, determine to whom Hanover should pay the award. The district court enjoined Falls’s state court action, citing the Anti-Injunction Act, 28 U.S.C. 2283, The Sixth Circuit reversed. The Act allows an injunction only for necessity, not simply for efficiency. Because the district court proceedings were not in rem, an injunction was not “necessary” to aid the district court’s jurisdiction. View "Hanover American Insurance Co. v. Tattooed Millionaire Entertainment, LLC" on Justia Law

BDC lent $800,000 to a company owned by the Suggs, who personally guaranteed the loan and secured it with a $200,000 mortgage on their Shaker Heights home. Bank of America and MidFirst Bank held more senior mortgages on the home. The Suggs’ home suffered serious water damage from a burst pipe in 2014. State Farm insured the home for up to $352,130. State Farm denied their claim on the ground that the Suggs had failed to heat their home at a temperature required by their policy.The Suggs sued State Farm in an Ohio state court and sued all three lenders with mortgages on their home, explaining that these lenders “have an interest in the policy proceeds” because the policy entitled them to payment even if State Farm had a valid defense against the Suggs. BDC did not appear. After the case settled, the state court found that BDC had no right to the proceeds. BDC did not seek relief in the state court but filed a federal suit alleging that State Farm, its lawyers, and the Suggs’ lawyers colluded to defraud it. The district court dismissed the suit under Ohio’s claim-preclusion law. The SIxth Circuit affirmed. BDC cannot meet the demanding test required to attack the state court’s judgment in this collateral fashion. View "Business Development Corporation of South Carolina v. Rutter & Russin, LLC" on Justia Law

Born in 1967, Carroll was raised by a single mother near Albert Barber's property. Albert’s younger sister was Arlene. Albert died in 1998. . In 2000, Arlene informed the Geauga County Probate Court that she had lost Albert’s will and possessed only an unsigned copy. She filed an application to probate the will. The court found that all interested parties were given appropriate notice and admitted the will. The court distributed most of the estate— land worth $232,000 and slightly over $30,000 in other assets—to Arlene under the will.Carroll claims that in 2018, Arlene told her that Albert was Carroll’s father. Carrol sued, claiming that Arlene submitted an invalid version of Albert’s will to an Ohio probate court and that she should have inherited Albert’s estate. The district court concluded that she lacked standing and that the probate exception to federal jurisdiction barred it from hearing her claims. The Sixth Circuit affirmed, citing her lack of standing. Carroll has not plausibly pleaded that the Barbers’ misconduct injured her, that they left her any worse off. Even given an opportunity to contest Albert’s will, Carroll would not have been eligible to contest Albert’s will under Ohio law when he died. View "Carroll v. Hill" on Justia Law

NPF sued a franchisee, SY Dawgs, which operated a fast-pitch softball team in the National Pro Fastpitch League, alleging violation of a non-competition agreement. Two-and-a-half years of discovery disputes and repeated sanctions motions followed. The district court imposed sanctions under Federal Rule of Civil Procedure 37 against NPF’s counsel for failure to produce documents and its engagement in other discovery abuses. The Sixth Circuit affirmed the award of sanctions against the individual attorneys who represented NPF, but vacated the award against their law firm. Federal Rule of Civil Procedure 37 does not allow for law-firm sanctions where, as here, the firm was not a party to the lawsuit. View "NPF Franchising, LLC v. SY Dawgs, LLC" on Justia Law

Fox and others failed to pay some of their property taxes. The counties foreclosed on and sold their properties and kept all of the sale proceeds, sometimes tens of thousands of dollars beyond the taxes due. Fox filed this class action. While Fox’s class action was pending, the Michigan Supreme Court held that the counties’ practice violated the Michigan Constitution’s Takings Clause. The Michigan legislature then began crafting a statutory process for recovering the proceeds. ARI then began contacting potential plaintiffs about pursuing relief on their behalf. Meanwhile, the district court certified Fox’s class. ARI instructed the law firm it hired to opt-out ARI-represented claimants and pursue individual relief on their behalf. Fox believed that ARI was improperly soliciting class members.The district court ordered ARI to stop contacting class members and allow 32 class members to back out of their agreements with ARI. The Sixth Circuit affirmed in part. The district court has the authority to protect the class-action process and did not abuse its discretion when it acted to protect class members from ARI’s post-certification communications. While most of the order was justified, the district court abused its discretion by allowing class members who hired ARI before the class was certified to rescind their agreements. View "Fox v. Saginaw County," on Justia Law

Universal Life Church Monastery permits anyone who feels called to become ordained as a minister—over the Internet, free of charge, in a matter of minutes. Tennessee law permits only those “regular” ministers—ministers whose ordination occurred “by a considered, deliberate, and responsible act”—“to solemnize the rite of matrimony.” Tenn. Code 36-3-301(a)(1)–(2). Since 2019, the law has explicitly clarified that “[p]ersons receiving online ordinations may not solemnize the rite.”Asserting that those restrictions violate the federal and Tennessee constitutions, ULC and its members sued several Tennessee officials, seeking an injunction and declaratory judgment. The officials claimed sovereign immunity and that the plaintiffs lacked standing to sue. The district court entered a preliminary injunction against several defendants. The Sixth Circuit reversed in part. No plaintiff has standing to seek relief against Governor Lee, Attorney General Slatery, District Attorney General Helper, or County Clerks Crowell, Anderson, and Knowles. The plaintiffs have standing to sue District Attorneys General Dunaway, Pinkston, and Jones, and County Clerk Nabors. The court noted that county clerks have no discretion to inspect officiants’ credentials or to deny licenses on that basis; state law deems issuance of the licenses a ministerial duty. View "Universal Life Church Monastery Storehouse v. Nabors" on Justia Law