The Tennessee Hospital Association and three hospitals sued, challenging efforts by the Centers for Medicare and Medicaid Services (CMS) to direct states to recoup certain reimbursements made under the Medicaid program. The hospitals serve a disproportionate share of Medicaid-eligible patients and are thereby entitled to supplemental payments under the Medicaid Act, (DSH payments), 42 U.S.C. 1396a(a)(13)(A)(iv); 1396r-4(b). The Act limits the amount of DSH payments each hospital can receive in a given year. CMS contends that the hospitals miscalculated their DSH payment-adjustments for fiscal year 2012 and received extra payments. Plaintiffs argued, and the district court agreed, that CMS’s approach to calculating DSH payment adjustments is inconsistent with the Act and the regulations that CMS implemented in 2008. The Sixth Circuit affirmed, agreeing that CMS’s policy is inconsistent with its 2008 rule and cannot be enforced unless it is promulgated pursuant to notice-and-comment rulemaking. The court disagreed with the district court’s conclusion that CMS’s policy exceeds the agency’s authority under the Medicaid Act. CMS’s payment-deduction policy is a reasonable interpretation of an ambiguous section of the Act but is not a valid interpretative rule. CMS attempted to exercise its delegated discretion to “determine[]” the “costs incurred” in serving Medicaid-eligible patients—precisely the sort of agency action that requires notice-and-comment rulemaking. View "Tennessee Hospital Association v. Azar" on Justia Law

Olagues is a self-proclaimed stock options expert, traveling the country to file pro se claims under section 16(b) of the Securities and Exchange Act of 1934, which permits a shareholder to bring an insider trading action to disgorge “short-swing” profits that an insider obtained improperly. Any recovery goes only to the company. In one such suit, the district court granted a motion to strike Olagues’ complaint and dismiss the action, stating Olagues, as a pro se litigant, could not pursue a section 16(b) claim on behalf of TimkenSteel because he would be representing the interests of the company. The Sixth Circuit affirmed that Olagues cannot proceed pro se but remanded to give Olagues the opportunity to retain counsel and file an amended complaint with counsel. View "Olagues v. Timken" on Justia Law

Robert died in July 2015, owing a mortgage amount of $113,358.12 on his Detroit home; the monthly mortgage payments. For five months following his death, the mortgage went unpaid. Bayview Loan Servicing sent a delinquency notice to the home in December 2015, showing an unpaid balance of $5,813.95. In November 2016, Bayview foreclosed and purchased the home by sheriff’s deed at public auction. Bayview sold the home to Tran. In May 2017, Robert’s estate filed a complaint, alleging four causes of action against Bayview, including lack of standing to foreclose under the Garn-St. Germain Depository Institutions Act of 1982, 12 U.S.C. 1701j-3 and MICH. COMP. LAWS 445.1626. The district court held that the Garn-St. Germain Act does not authorize a private right of action and did not apply to the’ claims. The Sixth Circuit vacated, concluding that the district court lacked jurisdiction to hear the case because the federal statute does not create a cause of action, and the federal issue nested inside the state law cause of action is not substantial. View "Estate of Cornell v. Bayview Loan Servicing, LLC" on Justia Law

From 2008-2016, Brennan and Dyer (Defendants) operated Broad Street, to incorporate Tennessee corporations (Scenic City). They claimed that once Scenic City was appropriately capitalized, Defendants would register its common stock with the SEC using Form 10, would publicly trade Scenic City, and would acquire small businesses as a legal reverse merger. Investors sent money by mail and electronic wire from other states. Defendants moved the funds through Broad Street’s bank accounts, diverting significant funds to their personal bank accounts. They issued stock certificates and mailed them to investors, but never filed Form 10 nor completed any reverse mergers. Investors lost $4,942,070.18. Defendants reported the embezzled funds as long-term capital gains, substantially reducing their personal tax liability and treated payments to themselves from Broad Street as nontaxable distributions. For 2010-2014, Dyer owed an additional $312,799 in taxes; Brennan owed $164,542. The SEC began a civil enforcement suit under 15 U.S.C. 77(q)(a)(1), 77(q)(a)(2), 77(q)(a)(3), and 78j(b), and Rule 10b-5. Defendants pleaded guilty to conspiracy to commit mail and wire fraud, 18 U.S.C. 371, 1341 and tax evasion, 26 U.S.C 7201. The court sentenced them to prison, ordered restitution ($4,942,070.18), and ordered payments for their tax evasion. The SEC sought and the court entered a disgorgement order to be offset by the restitution ordered in the criminal case. The Sixth Circuit affirmed, rejecting an argument that the disgorgement violates the Double Jeopardy Clause under the Supreme Court’s 2017 “Kokesh” holding that disgorgement, in SEC enforcement proceedings, "operates as a penalty under [28 U.S.C.] 2462.” SEC civil disgorgement is not a criminal punishment. View "United States v. Dyer" on Justia Law

In 1992-2006, Snider committed various crimes, including four convictions under Tennessee’s aggravated burglary statute. In 2007, he was convicted of conspiracy to manufacture methamphetamine, 21 U.S.C. 846; manufacturing and attempting to manufacture over 50 grams of methamphetamine, 21 U.S.C. 841(a)(1) and 846; possessing equipment, chemicals, products, and materials that may be used to manufacture methamphetamine, 21 U.S.C. 843(a)(6); possessing a firearm after being convicted of a felony, 18 U.S.C 922(g); possessing a stolen firearm, 18 U.S.C. 922(j); and possessing a firearm during and in relation to a drug-trafficking crime, 18 U.S.C. 924(c). Snider was sentenced as a career criminal offender based on three Tennessee aggravated burglary convictions deemed crimes of violence (USSG 4B1.1(b)(B)), which was defined to include “burglary of a dwelling.” The Sixth Circuit affirmed the denial of Snider’s motion (28 U.S.C. 2255) to vacate his sentence, rejecting his argument that its 2017 "Stitt" ruling that a conviction for Tennessee aggravated burglary is not a “violent felony” under the Armed Career Criminal Act, 18 U.S.C. 924(e) required that it vacate his sentence as a career offender under the sentencing guidelines. Snider’s challenge to his advisory guidelines range is not cognizable under section 2255, which authorizes post-conviction relief only when a sentence “was imposed in violation of the Constitution or laws of the United States, or . . . the court was without jurisdiction ... or . . . the sentence was in excess of the maximum authorized by law, or is otherwise subject to collateral attack.” View "Snider v. United States" on Justia Law

Mother contends that Utica Schools (UCS) violated the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400 because the Individualized Educational Plan (IEP) for her son, Dylan did provide him with a Free Appropriate Public Education (FAPE). Dylan suffers from Autism, Attention Deficit Hyperactivity Disorder, Tourette’s Disorder, and symptoms of Obsessive-Compulsive Disorder. During the 2012–2013 school year, Dylan was 18 years old and in his fifth year of high school. Dylan's IEP provided that Dylan’s IEP team would implement and document a trial of “assistive technology” and that his curriculum would be evenly split between special education and general education classes. The “Post-Secondary Vision and Transition Activities” section listed several activities in which Dylan was interested that could lead to employment but did not list any next steps or resources. UCS placed Dylan in Community Based Inclusion (CBI) for two periods of his school day. CBI covers “daily living skills, employability training, recreation[,] leisure, [and] personal social skills.” Dylan was enrolled in three special education classes and one general education class, so the CBI placement was inconsistent with his IEP. After mother objected, UCS provided Dylan with instruction in the office, apart from other students. By June 2013, the school had reevaluated Dylan and developed a new IEP, which was amended several times. Mother voluntarily withdrew Dylan from UCS and enrolled him in private school. She filed an administrative complaint with the Michigan Department of Education. The Sixth Circuit affirmed summary judgment, noting that the district acknowledged denying Dylan a FAPE. UCS was ordered to pay for 1,200 hours of tutoring and one year of transition planning as compensatory education and to pay $210,654.65 in attorney fees and costs. View "Somberg v. Utica Community Schools" on Justia Law

Fulton’s Linden, Michigan dental practice filed a purported class action, alleging that it received a fax from Defendants that was an unsolicited advertisement under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, that failed to include the requisite opt-out provision. The district court dismissed, finding that the fax was not an advertisement under the TCPA. The Sixth Circuit reversed. Fulton plausibly alleged that the fax was an unsolicited advertisement by alleging that the fax served as a pretext to send Fulton additional marketing materials. The fax stated that it was a Fax Verification Request to update contact information for sending clinical summaries, prescription renewals, and other sensitive communications. The fax provided space for recipients either to validate or update contact information. It had a signature line and room for comments and included a phone number and a URL for a website of Frequently Asked Questions (FAQs). Fulton’s allegation that providing verified contact information paves the way for Defendants’ customers to “send additional marketing faxes to recipients” finds some support in the FAQs, which confirm that Defendants’ customers use the system to “invite [providers] to become part of a provider network” and “send[] important notifications,” among “other uses.” View "Fulton v. Enclarity, Inc." on Justia Law

In October 2014, Kentucky Educational Television (KET) hosted a debate between the candidates for one of Kentucky’s seats in the U.S. Senate. KET limited the debate to candidates who qualified for the ballot, had collected at least $100,000 in campaign contributions, and had an independent poll indicating that at least one in 10 Kentuckians planned to vote for them. The criteria excluded Patterson, the Libertarian Party candidate. The district court rejected a suit under 42 U.S.C. 1983 by Patterson and the Party, noting that, with relatively few limits, KET could invite to its debates whomever it wanted. KET was not required to create—let alone publish—any criteria at all. KET restricted who could appear in a televised debate, not on the ballot. The debate criteria had nothing to do with a candidate’s views; rather, they measured whether voters had shown an objective interest in hearing the candidate. View "Libertarian National Committee, Inc. v. Holiday" on Justia Law

Williams filed a purported class action against Cleveland, under 42 U.S.C. 1983, alleging that intake procedures at its House of Corrections (HOC), consisting of strip searches and mandatory delousing, violated the Fourth Amendment. On remand, after extensive discovery, the court granted Williams summary judgment in part and permanently enjoined the city from reinstituting its previous delousing method and from conducting group strip searches without installation of privacy partitions to obstruct the view of other inmates. The Sixth Circuit reversed. Williams did not have standing to seek declaratory or injunctive relief; she was not in custody when she filed suit and it must be assumed that she will not return to the HOC. The fact that Williams returned to the HOC three times after filing the complaint does not confer standing because the relevant inquiry is whether she had a live, actionable claim for relief at the time she filed suit. Cleveland had discontinued its delousing policy by 2011, when Williams returned to the HOC. Allowing strip searches to be conducted in groups of two or three during busy periods, such as Williams’s time of intake, was reasonably related to Cleveland's legitimate penological interest of expediting the intake procedure; delousing detainees with a fine mist was reasonably related to its interest in maintaining the HOC's cleanliness and habitability. The need for delousing outweighed the admittedly substantial invasion of personal rights. View "Williams v. City of Cleveland" on Justia Law

Burchett and Jude suffered from serious mental illnesses. Each hired attorney Conn to represent them in applying for Social Security disability benefits, 42 U.S.C. 405(a), which were granted in 2009 and 2010. Conn was perpetrating a fraudulent scheme. Conn paid doctors to submit fraudulent letters concerning his clients' ailments and bribed an ALJ to assign Conn’s cases to his own docket and to decide nearly all of those cases in favor of Conn. Plaintiffs allege that the SSA had reason to suspect Conn's fraud in 2007 due to the reports of internal whistle-blowers. In 2011, the Wall Street Journal published a story about Conn’s exploits. Conn was indicted and pleaded guilty. The Huntington, West Virginia SSA office's former Chief ALJ, pleaded guilty to retaliation against a whistle-blower. The SSA’s Appeals Council informed Jude and Burchett that it was legally required to redetermine their eligibility for benefits (42 U.S.C. 1320a-8(l). Their benefits were suspended pending redeterminations. Each requested additional time to gather evidence. About two weeks after the SSA notices, before the SSA granted those requests, Jude and Burchett each committed suicide. Their estates filed Federal Tort Claims Act (FTCA) claims for wrongful death with the SSA, 28 U.S.C. 1346(b) and 2671, and a Bivens claim alleging procedural due process violations. The Federal Circuit affirmed dismissal of the claims, concluding that the FTCA’s discretionary function exception applied to preclude that claim and that the Bivens claim was improperly formulated. View "Jude v. Commissioner of Social Security" on Justia Law