Articles Posted in Civil Procedure

by
Anwar, a U.S. citizen, was hired to work for MEG International in Dubai. Anwar alleges that, following her promotion, her supervisor, Ramachandran, began harassing her about working when she had young children; openly made comments about not needing highly-paid female employees; and expressed his disapproval of Anwar’s divorce, going so far as to meet with her husband. Anwar alleges that this culminated in her termination, one day after she initiated her divorce. Anwar sued in a Dubai court and obtained severance pay. She argues that Dubai’s courts could not provide a sufficient remedy for sex and marital status discrimination. Anwar filed a complaint in Michigan, alleging that she was impermissibly terminated because of her gender, religion, national origin, and marital status, citing Title VII; the Michigan Elliott-Larsen Civil Rights Act; and breach contract. The district court dismissed claims against Ramachandran for lack of personal jurisdiction and opened discovery for limited purposes: Investigating Anwar’s allegations that MEG International does business as MEG America and that the MEGlobal subsidiaries act as a single entity and Anwar’s allegation that Ramachandran and other MEG managers are employed by Dow. Dow obtained a protective order to prohibit depositions. The Sixth Circuit affirmed dismissal of all claims. Anwar did not allege facts, aside from those demonstrating possible macromanagement, that MEG International is the alter ego of MEG Americas. Under Michigan law, the separate entities will be respected unless “a contrary determination would be inequitable.” View "Anwar v. Dow Chemical Co." on Justia Law

by
Debtor filed several unsuccessful lawsuits to invalidate Sandlin Farm's Deutsche Bank mortgage. Debtor, d/b/a Sandlin Farms sought Chapter 12 bankruptcy relief but did not propose to pay that mortgage nor a BoA mortgage on other property. Debtor filed adversary complaints to avoid the liens. The Trustee moved to dismiss the case due to inaccurate monthly reports and Debtor’s inability to generate sufficient income to implement his plan if the liens were valid. The Bankruptcy Court dismissed the Deutsche Bank adversary proceeding, citing res judicata. Debtor voluntarily dismissed the BoA proceeding but did not re-notice the confirmation hearing or amend the plan. The court denied Debtor’s motion to stay pending appeal of the Deutsche Bank dismissal and set a hearing on the Trustee's motion. Debtor resisted scheduling depositions and requested time to find new counsel. The Trustee then sought Dismissal as a Sanction for Failure to Cooperate with Discovery. Debtor did not appear at the hearing. The Bankruptcy Court dismissed (11 U.S.C. 1208(c)) based on inability to present a timely confirmable plan; unreasonable delay; and a continuing loss to the estate without reasonable likelihood of rehabilitation. The Bankruptcy Appellate Panel affirmed. Although Debtor had actual notice of the hearing, it was not reasonably calculated to give him sufficient notice of exactly what issues would be addressed nor an opportunity to be heard. Nonetheless, Debtor failed to refute that cause existed to dismiss the case, so the error was not prejudicial. View "In re: Haffey" on Justia Law

by
Robinson is a stockholder in the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (the Companies), for-profit corporations organized by the government under 12 U.S.C. 1716-1723 and 1451-1459. During the economic recession in 2007–2008, Congress enacted the Housing and Economic Recovery Act (HERA), which created the Federal Housing Finance Agency (FHFA), and authorized FHFA to place the Companies in conservatorship. The Companies, through FHFA, entered into agreements with the Department of the Treasury that allowed the Companies to draw funds from Treasury in exchange for dividend payments and other financial benefits. An Amendment to those agreements modified the dividend payment structure and required the Companies to pay to Treasury, as a quarterly dividend, an amount just short of their net worth. The Amendment effectively transferred the Companies’ capital to Treasury and prevented dividend payments to junior stockholders, such as Robinson. Robinson brought suit. The district court found and the Sixth Circuit affirmed that Robinson’s claims under the Administrative Procedures Act were barred by HERA’s limitation on court action and that Robinson had failed to state a claim upon which relief can be granted. Robinson failed to demonstrate that FHFA or Treasury exceeded the statutory authority granted by HERA. View "Robinson v. Federal Housing Finance Agency" on Justia Law

by
Martin, proceeding pro se, filed a late notice of appeal. In response to a show cause order, he claims that he did not receive timely notice of the underlying judgment. Federal Rule of Appellate Procedure 4(a)(6) requires Martin to seek relief in the district court. He did not. The Sixth Circuit dismissed, concluding it lacked jurisdiction over his appeal. The timely filing of a notice of appeal in a civil case is a jurisdictional requirement. The losing party has 30 days to file a notice of appeal after entry of an adverse judgment, 28 U.S.C. 2107(a), but can move the district court for an extension based on “excludable neglect or good cause” or can move to reopen the time to file an appeal if it did not receive proper notice of the underlying judgment. Both options require a “motion” in which the losing party asks the district court for more time. The “motion” is not the same thing as the “notice” a party must file to appeal and the rules do not vest the district court with power to extend time without a motion in civil cases. View "Martin v. Sullivan" on Justia Law

Posted in: Civil Procedure

by
Mokdad, a naturalized U.S. citizen, sought injunctive relief against the Attorney General, the FBI, and the Director of the Terrorist Screening Center (TSC) based on alleged instances where he was denied boarding on commercial airline flights between the U.S. and his native country, Lebanon. Claiming that his application for redress under the Department of Homeland Security Traveler Redress Inquiry Program (DHS TRIP) was not adequately resolved, he requested that the court order his removal from the No Fly List and any other such list. The Sixth Circuit reversed the district court’s conclusion that it lacked subject matter jurisdiction On remand, TSC re-examined Mokdad’s DHS TRIP request, notified him that he was not on the No Fly List, and issued a declaration that Mokdad is not on the No Fly List and will not be placed back on the list based on the currently available information. The district court dismissed. The Sixth Circuit affirmed. Mokdad’s case is moot in light TSC’s declaration. Even if Mokdad has been placed on another watch list, or is experiencing delays as he alleged, Mokdad did not identify any other lists or defendants, precluding effectual relief. If Mokdad believes that he is on another government list, the remedy is to file a new action. View "Mokdad v. Sessions" on Justia Law

by
Worldwide Equipment, a Mack Truck dealer, remitted a 12% federal excise tax collected from purchasers of its heavy-duty trucks, and sought a refund, claiming that the trucks, designed for use in the Appalachian coalfields, qualified as exempted, “off-highway” vehicles under 26 U.S.C. 7701(a)(48). The statute, 26 U.S.C. 6416(a), requires a refund claimant to show that it has made arrangement to avoid double payments and unjust enrichment by submitting written customer consent forms. Worldwide did not supply such consents to the IRS. In its denial, the IRS did not refer to the failure to supply consents. The district court, relying on long-standing Supreme Court and Sixth Circuit precedents applying predecessor statutory provisions, dismissed Worldwide’s refund claims on nonwaivable sovereign immunity grounds because the consent forms were statutorily required as part of a “duly filed” claim under 26 U.S.C. 7422(a). The Sixth Circuit affirmed. Worldwide’s failure to file its customer consent forms at the administrative stage violated section 6416(a); therefore, the claims had not been “duly filed with the Secretary, according to the provisions of law in that regard,” violating section 7422(a), so that federal courts are without jurisdiction to consider Worldwide’s refund claims. View "Worldwide Equipment of Tennessee, Inc. v. United States" on Justia Law

by
Plaintiffs, members of Global Fitness gyms, believed that Global misrepresented the terms of its gym memberships and sued as a class. The parties settled: Global agreed to pay $1.3 million to the class members, class counsel’s fees as ordered by the court, and the claims administrator’s fees and costs. The court approved the agreement over the objections of some class members and ordered its implementation. The Sixth Circuit affirmed. The Supreme Court denied certiorari. In the meantime, Global had sold all of its gyms and funneled $10.4 million of the proceeds to its managers through “tax distributions.” The payments Global owed to the class were in escrow under the terms of the settlement agreement, which made no similar provision for class counsel and the claims administrator. Days before its payment obligation under the agreement came due, Global notified the court it could not meet its remaining obligations. The court held Global Fitness and its managers in civil contempt. The Sixth Circuit reversed. Global had no legal obligation to conserve funds to pay class counsel and the claims administrator while the appeals were pending. Its obligation to pay became definite and specific only once the appeals were exhausted. The court erred in considering any of Global’s conduct from before that date and by holding the managers jointly and severally liable. View "Gascho v. Global Fitness Holdings, LLC" on Justia Law

by
In the 1980s, merchant marine plaintiffs filed asbestos-liability suits against ship-owner and manufacturer defendants in the Northern District of Ohio. That court ruled, in 1989, that it lacked personal jurisdiction over many of the defendants. Instead of dismissing those defendants, the court stated that if a defendant did not wish to be transferred, it could “waive the in personam jurisdiction problem” by filing an answer. Some did so. In 1990, the court ordered the transfer of some cases to scattered venues. Those transfers did not occur. Certain defendants sought to appeal the order, specifically stating that they did not waive jurisdiction. The court did not certify the interlocutory appeal. Eventually, the cases were consolidated into multidistrict litigation in the Eastern District of Pennsylvania. Certain defendants objected, arguing that they had been “strong-armed” into submitting to Ohio jurisdiction. The Pennsylvania court held that the N.D. of Ohio lacked personal jurisdiction over the relevant defendants and that those defendants had not waived or forfeited their personal jurisdiction defense. Thousands of parties were dismissed. Ten plaintiffs appealed the Pennsylvania’s decision as to 19 defendants. The Sixth Circuit affirmed. The Pennsylvania district court did not abuse its discretion in holding that the ship-owner defendants had not waived their personal jurisdiction defense by filing answers in the N.D. of Ohio and had no authority to transfer the cases to jurisdictions that did have jurisdiction. View "Kalama v. Matson Navigation Co." on Justia Law

by
The Class Action Fairness Act extends federal court jurisdiction to class actions on behalf of 100 or more people and in request of $5 million or more in damages if “any member of a class of plaintiffs is a citizen of a State different from any defendant,” 28 U.S.C. 1332(d)(2)(A), (d)(5), (d)(6). Roberts filed a class action on behalf of Tennessee citizens against Mars, a citizen of Tennessee and Delaware, alleging a conspiracy to employ a “prescription-authorization requirement” to sell pet food at above market prices in violation of the Tennessee Trade Practices Act. Mars removed the case to federal court, invoking its Delaware citizenship and claiming its Tennessee citizenship did not matter. The Sixth Circuit reversed the district court’s denial of plaintiffs’ motion for remand to state court. Because section 1332(d)(2)(A) refers to all of a defendant’s citizenships, not the alternative that suits it, Mars cannot rely on its state of incorporation (Delaware) and ignore its principal place of business (Tennessee) to create diversity under the Act. View "Roberts v. Mars Petcare US, Inc." on Justia Law

by
At a campaign rally in Louisville, Kentucky, in March 2016, then-candidate Trump responded to protesters by stating, “Get ‘em out of here,” followed closely by, “Don’t hurt ‘em—if I say go ‘get ‘em,’ I get in trouble with the press.” Allegedly in response to Trump’s initial statement, three protesters were assaulted by Trump supporters. Those protesters filed a complaint in Kentucky state court, which was removed to federal court. The district court denied in part Trump’s motion to dismiss, holding the complaint stated a plausible claim for “incitement to riot” under Kentucky law. The Sixth Circuit granted a petition for leave to appeal under 28 U.S.C. 1292(b). A district court may certify an order for interlocutory appeal if it is “of the opinion” that: “[1] the order involves a controlling question of law to which there is [2] substantial ground for difference of opinion and . . . [3] an immediate appeal may materially advance the termination of the litigation.” When the district court certifies its order and a timely petition follows, the Circuit Court must decide whether to exercise its “discretion,” as a prudential matter, to permit an appeal. The three factors that justify interlocutory appeal should be treated as guiding criteria rather than jurisdictional requisites. In this case, these criteria, along with other prudential factors, indicate that interlocutory appeal is “hardly imprudent.” View "In re: Donald Trump" on Justia Law