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

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In October 2012, and again a year later, General Cable announced that it would reissue several public financial statements because they included material accounting errors. Soon after, City of Livonia Employees’ Retirement System initiated a class-action suit against General Cable, under the 1934 Securities Exchange Act, 15 U.S.C. 78j(b), 78t(a), and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. 240.10b-5. Livonia asserted that defendants acted at least recklessly in issuing or approving materially false public financial statements. The defendants countered that the misstatements resulted from accounting errors and a theft scheme in its Brazilian operations of which the defendants were unaware and that they promptly sought to remediate upon discovering them. The district court dismissed Livonia’s complaint with prejudice because it failed to plead scienter adequately. The Sixth Circuit affirmed. Seven factors favored rejecting a scienter inference. Livonia cited no facts with sufficient particularity implicating suspicious insider trading or failure to disclose impending stock sales. View "Doshi v. General Cable Corp." on Justia Law
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A class of Tennessee residents who applied for Medicaid sought declaratory and injunctive relief, alleging that the delays they have experienced in receiving eligibility determinations on their applications violate 42 U.S.C. 1396a(a)(8) of the Medicaid statute, and that the state’s failure to provide a fair hearing on their delayed applications violates that statute and the Due Process Clause. Regulations implementing the statute provide that “the determination of eligibility for any applicant may not exceed” 90 days for those “who apply for Medicaid on the basis of disability” and 45 days for all other applicants. The district court certified a class and granted a preliminary injunction, which requires the state to grant a fair hearing on delayed applications to class members who request one. The Sixth Circuit affirmed the preliminary injunction, holding that the matter is not moot and that the federal government is not a required party. The court noted that the federal government submitted an amicus brief, supporting plaintiffs’ position. Despite the passage of the Affordable Care Act, states remain ultimately responsible for ensuring their Medicaid programs comply with federal law. View "Wilson v.Gordon" on Justia Law

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In 2011, Hogan sued the Life Insurance Company of North America for violating the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, by denying her benefits claim under a disability insurance policy. The Sixth Circuit affirmed the grant of judgment against her. While appeal was pending, Hogan filed a state court suit against two nurses who worked for the Life Insurance Company and who had provided opinions regarding Hogan’s eligibility for benefits after reviewing her claim. Hogan carefully pleaded her claims in the second suit to avoid reference to the Life Insurance Company or ERISA, alleging only that the nurses committed negligence per se by giving medical advice without being licensed under Kentucky’s medical-licensure laws. The defendants removed the case to federal court on the basis of ERISA’s complete-preemptive effect. The district court denied Hogan’s attempts to remand the case to state court and later granted the defendants’ motion to dismiss. The Sixth Circuit affirmed the denial of remand and the dismissal. Hogan’s artfully pleaded state-law claims are simply claims for the wrongful denial of benefits under an ERISA plan that arise solely from the relationship created by that plan. The court denied defendants’ motion for sanctions on appeal because Hogan’s arguments were not frivolous. View "Hogan v. Jacobson" on Justia Law
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In 2010, Craig was hired as a bookkeeper for Bridges. She would sometimes move her hours to a different week to avoid going over 40 hours. After demanding overtime pay, she was terminated and filed suit under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201-219, seeking compensation for four years’ worth of unpaid overtime work. The district court ruled in favor of the employer, holding that by “miscalculating” her own overtime pay rate, Craig had “failed to follow the reasonable time reporting procedures established by [the employer] and . . . therefore thwarted its ability to comply with the FLSA.” The Sixth Circuit reversed the summary judgment, concluding that there were material questions as to how an employer might acquire at least constructive knowledge of its employee’s overtime hours, and, factually, whether such knowledge on the part of a supervisor, is attributable to Bridges in this case. View "Craig v. Bridges Bros. Trucking LLC" on Justia Law

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When the five investment funds at issue lost nearly 90 percent of their value in 2007-2008, investors lost large sums. Various plaintiffs (investors) initially filed claims with the Financial Industry Regulatory Authority, participated in arbitration, or filed state suits. In 2013, they filed suit under the Securities Act of 1933, 15 U.S.C. 77k, 77l, and 77o, the Securities Exchange Act of 1934, 15 U.S.C. 78j(b) and 78t(a), and SEC Rule 10b-5. They alleged that the funds were overvalued and concentrated in risky securities and that investors relied on misrepresentations in purchasing the funds. The district court initially granted class certification, but dismissed the claims as barred by the statutes of limitations. The Sixth Circuit affirmed, holding that the suits were barred by the applicable statutes of repose. The court declined to “toll” those statutes View "Stein v. Regions Morgan Keegan Select High Income Fund, Inc." on Justia Law

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Because of zoning by Upper Arlington, a suburb of Columbus, Ohio, Tree of Life Christian Schools could not use its otherwise-unused land and building to operate a religious school. The government denied a rezoning application because such a use would not accord with provisions of the government’s Master Plan, which call for maintaining commercial use zoning to maximize tax revenue. TOL filed suit under the Religious Land Use and Institutionalized Persons Act (RLUIPA), 42 U.S.C. 2000cc– 2000cc-5, alleging that the government illegally failed to treat TOL Christian Schools on equal terms with nonreligious assemblies or institutions. The district court granted the government summary judgment. The Sixth Circuit reversed and remanded for resolution of the factual issue: whether the government treated nonreligious assemblies or institutions that would fail to maximize income-tax revenue in the same way it has treated the proposed religious school. View "Tree of Life Christian Schools v. City of Upper Arlington" on Justia Law

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In 2010, Bail Bonds and Hamza jointly and severally secured a $75,000 appearance bond on behalf of Mohammed-Ali, an Ethiopian national (Hamza’s cousin), charged with smuggling a controlled substance, (khat), into the U.S., 18 U.S.C. 545. One condition of the sureties’ obligation was that Mohammed-Ali “comply with all conditions of release imposed by this court,” which included that he wear a GPS ankle bracelet. But 15 months later—at Mohammed-Ali’s request and without objection from the government—the court entered an order allowing him to remove the ankle bracelet. Neither counsel nor the court provided the sureties with notice of the motion or of the order. Mohammed-Ali fled to Ethiopia. The government sought judgment against the sureties. The district court granted the government summary judgment, reasoning that Bonds had constructive notice of the motion because it could have accessed the docket for Mohammed-Ali’s case, using the court’s electronic-filing system. The Sixth Circuit reversed. The risk the sureties agreed to accept was that Mohammed-Ali might flee notwithstanding his conditions of release, which included the ankle bracelet. That risk included the possibility that Mohammed-Ali might saw off bracelet and then flee. What the sureties did not accept was that the court would remove the bracelet for him. The purported “notice” was inadequate. View "United States v. Mohammed-Ali" on Justia Law

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Nashville detectives went to Church’s home to serve him with a warrant for violating probation. Church arrived, carrying food. The detectives placed Church under arrest, agreed to allow him to enter the house and call his girlfriend, then accompanied Church inside with his consent. They stated that they smelled burnt marijuana. Church admitted that he had recently smoked marijuana and displayed a marijuana blunt. Church called his girlfriend, who arrived and told police that Church regularly smoked marijuana at the house. Detective Moseley left to prepare a search-warrant affidavit while Bowling stayed with Church. In his affidavit, Moseley recounted the detectives’ visit and conversations with Church and his girlfriend. The detectives executed a warrant for “controlled substances, [and] controlled substances paraphernalia” that afternoon. In a closet, they found 4.8 grams of marijuana and 8 dilaudid (hydromorphone) pills, plus a safe. Church refused to provide the code, so police used a prying ram to break in. The safe contained 800 dilaudid pills, a handgun, and ammunition. Church unsuccessfully sought to suppress the evidence, then pled guilty to possession with intent to distribute hydromorphone and to being a felon in possession of a firearm. He was sentenced to 170 months’ imprisonment. The Sixth Circuit affirmed. The affidavit established probable cause and the police did not break open the safe capriciously: they had probable cause to believe there might be drugs inside. View "United States v. Church" on Justia Law

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Albert Brumley, author of the gospel song “I’ll Fly Away,” assigned the song’s 1932 copyright to a company. The company subsequently became the property of his son, Robert. Albert died in 1977. Albert’s widow also executed an assignment to Robert. During the term of a copyright, an author may use, assign, sell, or license the copyright, 17 U.S.C. 201(d), but songwriters and their descendants may terminate the songwriter’s assignment of a copyright to another party, Sections 203, 304(c). In 2008, four of Brumley’s six children filed notice to terminate the assignment to their brother, Robert. The copyright was then generating about $300,000 per year. The district court and Sixth Circuit affirmed their right to terminate the assignment, rejecting arguments that the song was a “work made for hire,” which is not eligible for termination, 17 U.S.C. 304(c); and that Albert’s widow relinquished any termination rights. View "Brumley v. Brumley & Sons, Inc." on Justia Law

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Acting on information from Holt, a confidential informant (CI) who had purchased oxycodone from Barnes during three recent controlled buys in coordination with law enforcement, federal agents executed a search warrant on Barnes’s trailer home in rural Eastern Tennessee. They found roughly 300 pills in the trailer, mostly in prescription bottles bearing Barnes’s name, and some in bottles prescribed to other individuals, plus at least $1700 in cash—including marked bills from the CI’s controlled buys—and ammunition and firearms. Two guns were tucked under the corners of a mattress in the living room where Barnes slept and where he was seated when agents arrived. A jury convicted Barnes of drug trafficking and firearms offenses including, possession with intent to distribute oxycodone, 21 U.S.C. 841(a)(1) and (b)(1)(C) and possession of a firearm in furtherance of a drug trafficking crime, 18 U.S.C. 924(c). The Sixth Circuit​ affirmed rejecting claims that insufficient evidence supported the Section 924(c) conviction, that the district court wrongly admitted evidence of calls recorded while he was in jail with respect to his possession with intent to distribute conviction, and that the district court improperly considered a 1998 drug conviction when determining Barnes’s guidelines sentencing range. View "United States v. Barnes" on Justia Law
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