Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

Veltor Underground LLC, a construction business, applied for a $125,000 loan under the Paycheck Protection Program (PPP) during the COVID-19 pandemic, claiming it had six employees. However, the Small Business Administration (SBA) later discovered that these "employees" were actually independent contractors. Consequently, the SBA denied Veltor's request for loan forgiveness, as payments to independent contractors do not qualify as "payroll costs" under the CARES Act.The United States District Court for the Eastern District of Michigan granted summary judgment in favor of the defendants, the SBA and associated individuals. The court found that Veltor's payments to independent contractors did not meet the statutory definition of "payroll costs," which is a requirement for loan forgiveness under the PPP.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the CARES Act's definition of "payroll costs" includes only payments to employees and not to independent contractors. The court reasoned that the Act distinguishes between businesses with employees and self-employed individuals, including sole proprietors and independent contractors, and that the term "payroll costs" does not encompass payments made to independent contractors by businesses. Therefore, Veltor was not entitled to loan forgiveness and must repay the loan. View "Veltor Underground, LLC v. SBA" on Justia Law

James King sued the United States under the Federal Tort Claims Act (FTCA) and individual government employees under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, alleging physical abuse by U.S. officials. The district court granted summary judgment to the defendants on both claims. King appealed only the Bivens claim, making the FTCA judgment final. The individual defendants argued that the FTCA's "judgment bar" precluded the Bivens claim. The Supreme Court ultimately ruled in favor of the defendants, stating that the FTCA judgment barred the Bivens claim.King then filed a Rule 60(b) motion in the district court to reopen the FTCA judgment to withdraw his FTCA claim and avoid the judgment bar. The district court denied the motion, reasoning that attorney error or strategic miscalculation is not a valid basis for reopening under Rule 60. King appealed this decision.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's denial of the Rule 60(b) motion. The court held that the district court did not abuse its discretion, as attorney error or strategic miscalculation does not justify reopening a final judgment under Rule 60. The court emphasized the public policy favoring the finality of judgments and noted that Rule 60(b)(6) relief is only available in exceptional or extraordinary circumstances, which were not present in this case. View "King v. United States" on Justia Law

Plaintiffs in this multi-district products liability suit allege that they purchased defective Chrysler Pacifica minivans from FCA, which were recalled due to a risk of battery explosions. After the recall, plaintiffs filed seven putative class action suits, which were consolidated in the Eastern District of Michigan. During discovery, FCA discovered that some plaintiffs had agreed to arbitration clauses when purchasing their minivans and moved to compel arbitration for those plaintiffs. The district court denied FCA’s motion, finding that FCA had waived its right to arbitrate by moving to dismiss the entire complaint.The United States District Court for the Eastern District of Michigan denied FCA’s motion to compel arbitration, concluding that FCA had waived its right to arbitrate by engaging in litigation conduct inconsistent with that right, specifically by moving to dismiss the plaintiffs’ claims. The district court made this finding sua sponte, without the plaintiffs raising the issue of waiver.The United States Court of Appeals for the Sixth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that a party cannot waive its right to arbitration without knowledge of that right. The court found that FCA did not know about the arbitration clauses until it obtained the relevant purchase agreements through discovery. Additionally, the appellate court determined that the district court erred by raising the issue of waiver on its own, violating the principle of party presentation. The Sixth Circuit concluded that the district court’s decision was clearly erroneous and remanded the case for further proceedings consistent with its opinion. View "Berzanskis v. FCA US, LLC" on Justia Law

A 39-year-old man developed a relationship with a 16-year-old girl, his coworker, and began exchanging sexually explicit messages and images with her over Facebook. He instructed the minor to take and send him photos and videos of herself engaging in sexually explicit conduct. Forensic analysis confirmed the minor complied with these requests on multiple occasions. The man admitted to using a Facebook alias, knowing the girl’s age, and exchanging sexual content with her. He was indicted for two counts of causing a minor to produce child pornography and one count of possessing child pornography. Pursuant to a plea agreement, he pleaded guilty to one count of causing a minor to produce child pornography, and the remaining charges were dismissed.The United States District Court for the Eastern District of Kentucky, at sentencing, applied two Sentencing Guidelines enhancements: a two-level increase for using a minor to commit the offense, and a five-level increase for engaging in a pattern of prohibited sexual conduct. The defendant objected to both enhancements, arguing they were either duplicative or improperly applied. The district court overruled his objections and imposed a below-Guidelines sentence of 270 months’ imprisonment.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the district court’s application of the enhancements. The court held that the two-level enhancement for using a minor to commit the offense was appropriate because the Guidelines did not otherwise account for the defendant’s use of the minor as both the subject and the photographer of the images. The court also upheld the five-level enhancement for a pattern of activity, finding that two separate occasions of prohibited sexual conduct were established and that the relevant conduct could include acts beyond the offense of conviction. The Sixth Circuit affirmed the district court’s judgment. View "United States v. Parkey" on Justia Law

Aaron Pulsifer was terminated from his position as Dean of Students and Assistant Principal at Westshore Christian Academy. He subsequently filed a lawsuit against the Academy, alleging various state and federal employment discrimination claims based on race and sex. Pulsifer claimed that his termination was retaliatory, following his complaints about unequal treatment and concerns regarding the school's main funder. The Academy argued that Pulsifer's role involved significant religious functions, invoking the ministerial exception to preclude judicial review of his claims.The United States District Court for the Western District of Michigan granted summary judgment in favor of the Academy. The court held that Pulsifer's position involved important religious duties, thus falling under the ministerial exception, which prevents courts from intervening in employment disputes involving key religious employees. Pulsifer appealed the decision, arguing both procedural and substantive errors.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court found that the district court had properly converted the Academy's motion to dismiss into a motion for summary judgment and provided Pulsifer with a reasonable opportunity to respond. On the substantive issue, the Sixth Circuit agreed with the lower court, holding that Pulsifer's role at the Academy included vital religious duties such as leading devotions, conducting prayers, and guiding students' spiritual development. These responsibilities placed him within the ministerial exception, precluding judicial review of his employment discrimination claims.The Sixth Circuit affirmed the district court's judgment, emphasizing that the ministerial exception applies to employees who perform essential religious functions, regardless of their involvement in secular administrative tasks. View "Pulsifer v. Westshore Christian Academy" on Justia Law

Peter McGowan, a dentist, and his solely owned dental practice, Peter E. McGowan DDS, Inc., engaged in a complex life insurance arrangement involving two subtrusts. The dental practice contributed $50,000 annually to these subtrusts, one of which owned a life insurance policy covering McGowan. The policy's death benefit would go to McGowan's wife, while the cash value could potentially be donated to a charity, the Toledo Zoo, if premiums were not paid. McGowan reported only a portion of these contributions as taxable income, and the dental practice deducted the full amount of the premiums.The IRS audited McGowan and the dental practice, concluding that McGowan should have included the full value of the policy's economic benefits in his gross income and that the dental practice could not deduct the premiums. The IRS assessed over $100,000 in unpaid taxes, penalties, and interest for the tax years 2014 and 2015. McGowan and the dental practice paid these amounts and then sued for a refund in the United States District Court for the Northern District of Ohio. The district court granted summary judgment to the government, upholding the IRS's assessments.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's decision. The court held that the split-dollar regulation applied to McGowan's arrangement, requiring him to include the full value of the policy's economic benefits in his gross income and prohibiting the dental practice from deducting the premiums. The court also found that the regulation was consistent with the Internal Revenue Code. Additionally, the court noted that McGowan's income from the arrangement should be treated as a shareholder distribution rather than services-based compensation, entitling him to a refund due to the lower tax rate on dividends. View "McGowan v. United States" on Justia Law

The defendant was found guilty of felony possession of a firearm after a bench trial, having waived his right to a jury trial. The case arose from a traffic stop on December 5, 2020, where the defendant was stopped for driving past a stop bar at a traffic light. During the stop, the defendant refused to provide identification and was subsequently arrested. A search of his vehicle revealed marijuana and a loaded firearm. The defendant challenged the traffic stop, his arrest, and the vehicle search as violations of his Fourth Amendment rights and argued that his conviction was not supported by sufficient evidence.The United States District Court for the Southern District of Ohio denied the defendant's motion to suppress the evidence. The court found that the initial traffic stop was supported by probable cause, the arrest was justified by probable cause, and the vehicle search was permissible under the automobile exception. The court also found sufficient evidence to support the conviction based on the stipulated facts presented during the bench trial.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's decisions. The appellate court agreed that the traffic stop was justified by probable cause due to the observed traffic violation. The arrest was deemed lawful based on probable cause for multiple offenses, including driving with a suspended license and refusing to provide identification. The search of the vehicle was upheld under the automobile exception, as the officers had probable cause to believe it contained illegal contraband. The court also found that the defendant's stipulation to all elements of the offense constituted a waiver of his right to challenge the sufficiency of the evidence. The conviction was affirmed. View "United States v. Watson" on Justia Law

Plaintiff Karim Codrington was subjected to an unlawful traffic stop, search, and arrest by Louisville Metro Police Department officers. During the criminal proceedings, a Kentucky state court suppressed the evidence seized from his vehicle and dismissed the charges. Over three years later, Codrington filed a 42 U.S.C. § 1983 lawsuit, alleging that the officers planted drugs on him, provided those drugs to prosecutors, and stole thousands of dollars from him.The United States District Court for the Western District of Kentucky granted summary judgment in favor of the defendants on all claims, finding that Codrington’s claims were either barred by the statute of limitations or failed on their merits. Specifically, the court found that the unlawful search and seizure, selective enforcement, and false arrest/imprisonment claims were time-barred. The court also found that Codrington failed to provide sufficient evidence to support his fabrication-of-evidence and malicious-prosecution claims.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court’s grant of summary judgment on the unlawful search and seizure, selective enforcement, false arrest/imprisonment, malicious prosecution, and state-law conversion claims. However, the court reversed the district court’s grant of summary judgment on the fabrication-of-evidence claim, finding that there was a genuine dispute of material fact regarding whether the officers fabricated evidence. The court also vacated the district court’s judgment on Codrington’s Monell claims and remanded for further proceedings. View "Codrington v. Dolak" on Justia Law

Robert Cox, acting as the personal representative and special administrator of the estate of Greta Cox, sued Total Quality Logistics, Inc. and Total Quality Logistics, LLC (collectively, TQL) for negligence under Ohio law. Cox alleged that TQL, in its role as a freight broker, negligently hired an unsafe motor carrier, Golden Transit, Inc., which resulted in a motor vehicle crash that killed his wife, Greta Cox. The crash occurred when the driver of the motor carrier, Amarjit Singh Khaira, failed to slow down in a construction zone and collided with Greta Cox's vehicle.The United States District Court for the Southern District of Ohio dismissed the case, ruling that Cox’s claims were preempted by the Federal Aviation Administration Authorization Act (FAAAA), specifically 49 U.S.C. § 14501(c). The district court found that the FAAAA preempted the state law claims because they related to the services of a broker with respect to the transportation of property and did not fall within the Act’s safety exception.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court held that the district court erred in its interpretation of the FAAAA’s safety exception. The Sixth Circuit concluded that the safety exception, which preserves the safety regulatory authority of a state with respect to motor vehicles, includes common law claims like Cox’s negligent hiring claim. The court reasoned that such claims are genuinely responsive to safety concerns and directly involve motor vehicles and motor vehicle safety. Therefore, the court reversed the district court’s judgment and remanded the case for further proceedings consistent with its opinion. View "Cox v. Total Quality Logistics, Inc." on Justia Law

Tammy Livingston, individually and as a beneficiary and co-trustee of the Livingston Music Interest Trust, sued her mother, Travilyn Livingston, over the termination of copyright assignments and associated royalties for songs authored by Jay Livingston. Jay had assigned his copyright interests in several songs to a music publishing company owned by Travilyn. Travilyn later invoked her statutory right to terminate these copyright grants and filed termination notices with the U.S. Copyright Office. Tammy challenged these terminations, claiming her rights as a beneficiary were affected.The United States District Court for the Middle District of Tennessee dismissed Tammy's complaint, holding that it failed to state a claim. Tammy appealed the decision, arguing that the termination notices were ineffective, defective, or invalid, and that she retained a state law right to receive royalties from the songs covered by the terminated agreements.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's dismissal. The court held that the 2003 California probate court order, which declared that the Family Trust held no ownership interests in Jay's copyrights, precluded Tammy's claims. The court also found that Jay had validly executed the copyright grants as an individual, not as a trustee, and that Travilyn owned Jay Livingston Music at the time of the assignments. Additionally, the court rejected Tammy's arguments regarding the termination notices' compliance with federal requirements, noting that she failed to plead specific factual allegations for most of the notices. Finally, the court held that Tammy did not identify a state law basis for her claim to royalties, thus failing to meet the pleading standards under Civil Rule 12(b)(6). View "Livingston v. Jay Livingston Music, Inc." on Justia Law