Articles Posted in Civil Procedure

Cathedral Buffet, an Ohio for-profit corporation, does not generate a profit. Its sole shareholder is Grace Cathedral, a 501(c)(3) non-profit religious organization, which subsidizes the restaurant. The restaurant separated its workers into “employees” and “volunteers.” Volunteers performed many of the same tasks as employees, who received an hourly wage. Reverend Angley recruited volunteers from the pulpit on Sundays, suggesting that members who repeatedly refused to volunteer were at risk an unforgivable sin. The Department of Labor (DOL) filed suit; the district court held that Buffet’s religious affiliation did not exempt it from Fair Labor Standards Act. The Sixth Circuit reversed. To be considered an employee under the FLSA, a worker must first expect to receive compensation; Buffet volunteers had no such expectation. Buffet then sought “prevailing party” costs and attorney’s fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412, arguing that the DOL’s position throughout the litigation was not substantially justified. The Sixth Circuit declined to address the issue: “in the usual case in which fees are sought for the entire litigation, the determination of whether the government was ‘substantially justified’ . . . is for the district court” because that court “may have insights not conveyed by the record.” Buffet did not wish to argue before the district court, which adopted the DOL’s position, but that is not a legitimate reason to forgo judicial economy. The district court is better-equipped to determine the fees, if any, that should be awarded for work at that level. View "Acosta v. Cathedral Buffet, Inc." on Justia Law

Giese claimed that HNRC paid royalties derived from coal mining into an escrow account. After buying the property on which the mining occurred, Giese sued, asserting a right to the escrowed royalties. Lexington Coal disputed Giese’s claim, arguing it purchased all cash and accounts of HNRC and HNRC’s parent company during a bankruptcy case involving those entities. Lexington had been a defendant in an interpleader action before the Bankruptcy Court to determine the rightful owner of the funds at issue. Giese’s state court action was removed to the Bankruptcy Court, which declined to abstain from adjudicating two counts of Giese’s Kentucky state court complaint and dismissed his complaint. The Bankruptcy Appellate Panel affirmed. Giese’s claims were inextricably intertwined with the bankruptcy case and would not exist but for the bankruptcy, so the Bankruptcy Court was right to adjudicate them. Sending two claims (breach of contract and royalty claims) to a court that cannot, under any circumstance, adjudicate the other related claims, would pose a great risk to important policy concerns. Upholding the dismissal, the court stated that an order confirming a plan of reorganization constitutes a final judgment in a bankruptcy proceeding, and res judicata bars relitigation of any issues that could have been raised during the confirmation proceeding. View "In re HNRC Dissolution Co." on Justia Law

Three-and-a-half years ago, a Kentucky state court issued a judgment in plaintiffs’ favor against class-action plaintiffs’ attorney Chesley for $42 million. Since then, the plaintiffs have been trying to collect on that judgment. Chesley has successfully evaded them with the help of his confidantes. In the process, five lawyers have been disbarred; two have been put in jail. Chesley has managed to transfer most of his assets elsewhere, rendering himself judgment-proof and forcing the plaintiffs to file the fraudulent conveyance action underlying this appeal. While that fraudulent conveyance action was pending, Chesley initiated an Ohio state probate court action. He claims the action was started for legitimate purposes—to pay off his law firm’s creditors in a judicially-supervised forum. The district court disagreed. Sensing Chesley was using the probate action to continue to conceal his assets, it issued a preliminary injunction freezing those assets. In the time since the injunction was entered (and this appeal was filed), that probate action was dismissed and declared fraudulent. The Sixth Circuit affirmed the preliminary injunction, which is worded broadly enough to remain effective despite the probate action’s dismissal, and is still adequately supported by the record evidence and is still necessary. View "McGirr v. Rehme" on Justia Law

Abramge is a Brazilian nonprofit professional association of private health insurance providers, many of whom were impacted by a bribery and kickback scandal in the medical device market that broke in the Brazilian media in 2015. Abramge alleged that Stryker, a Michigan corporation, masterminded an “illicit scheme, which was planned and run from Michigan, designed to increase its market share by making improper payments and paying bribes and kickbacks to Brazilian doctors to induce the use of Stryker products” and “made improper payments and paid kickbacks to Brazilian doctors with the intent of influencing those doctors to use Stryker devices and products in patients even if those devices ... did not best meet the patients’ medical needs.” The scheme allegedly increased the cost of devices and the number of devices implanted and surgeries performed; health insurance providers paid for those increases. Abramge claims that Stryker’s actions injured not only its insurer members but also the entire Brazilian public health system and patients throughout the country. Abramge filed suit in the Western District of Michigan, claiming fraud, civil conspiracy, tortious interference with contractual relationships, and unjust enrichment. The district court dismissed, citing forum non conveniens. The Sixth Circuit reversed and remanded. Stryker did not carry its burden of proving that Brazil is an available and adequate alternative forum in which the case may be heard. View "Associacao Brasileira de Medicina v. Stryker Corp." on Justia Law

In 2013, Jackson filed a voluntary Chapter 7 bankruptcy petition. The bankruptcy court lifted the automatic stay on Jackson’s residence. The bank foreclosed on Jackson’s residence in May 2014. Jackson’s right to redeem the property expired six months later. In October 2014, the Chapter 7 Trustee filed a no-asset report; in February 2015, Jackson obtained a discharge. Jackson submitted letters to the bankruptcy court in December 2016, stating that the account number for a creditor had changed; requesting “reconsideration of House being exempt in the bankruptcy case”; requesting a “sign[ed] court Order stating that the amended Scheduled have been listed, dismissed and entered”; and requesting reconsideration of an order denying her request to transfer the case. After a hearing, the bankruptcy court denied all of Jackson’s request and directed the Clerk to “prepare and enter a final decree discharging the trustee and closing the case promptly but not earlier than twenty-eight days after the entry” of that January 26, 2017 order. Jackson filed her Notice of Appeal 28 days later on February 23. On February 24, the Clerk docketed a “Text Order of Final Decree” which referenced the discharge and closed the case. The Sixth Circuit Bankruptcy Appellate Panel, sua sponte, raised the issue and found that the appeal was filed late under 28 U.S.C. 158(c)(2), Supreme Court precedent indicates that the statutory time requirements are jurisdictional in nature. View "In re Jackson" on Justia Law

In 2010, Dr. Menendez treated 15-year-old Garber for a fever, constipation, and back pain. Garber became a paraplegic. The state court dismissed Garber’s initial lawsuit because he failed to file an affidavit from an expert witness in support of his claim. In his second lawsuit, Garber tried to serve Menendez at his Ohio office, but (unbeknownst to him) Menendez had retired to Florida. Garber voluntarily dismissed the lawsuit. Garber sued Menendez a third time in May 2017 and properly served him. Ohio provides a one-year statute of limitations for medical malpractice claims, Ohio Rev. Code 2305.113, which began running on August 5, 2013, when Garber turned 18. Garber argued that Ohio tolls the statute of limitations when the defendant “departs from the state.” The Sixth Circuit reversed the dismissal of the suit. The court rejected an argument that the statute’s differential treatment of residents and non-residents violates the dormant Commerce Clause by disincentivizing individuals from leaving Ohio and offering their services (or retirement spending) in other states. The Ohio tolling provision does not discriminate against out-of-state commerce any more than many other policy benefits reserved for residents of a given state, including the existence of an estate tax for Ohioans but not for Floridians. View "Garber v. Menendez" on Justia Law

Grimsby invited Nancy to take a boat trip on Lake Erie. The boat hit a wave, jarring the passengers and injuring Nancy. In her suit, invoking the court’s diversity and admiralty jurisdiction, Nancy pleaded that “this action is not to be deemed an ‘admiralty and maritime claim’ within the meaning of” Rule 9 of the Federal Rules of Civil Procedure. In 2015, the district court held that the incident fell within the court’s admiralty jurisdiction, meaning that federal maritime law controlled the duty of care. In 2016, the court held that a boat hitting a wave did not count as a “collision” under the Coast Guard Navigation Rules. A jury subsequently found that Grimsby was not negligent. The court granted Nancy’s motion for a new trial, finding that the evidence did not support the verdict. Grimsby filed an interlocutory appeal, and Nancy cross-appealed, citing the interlocutory exception to the final judgment rule that applies to admiralty cases. The Sixth Circuit dismissed. The exception does not apply because Nancy chose to pursue claims under ordinary civil procedures. View "Buccina v. Grimsby" on Justia Law

Mischler filed a civil rights action against multiple government officials. She asked the district court judge to recuse himself from the case under 28 U.S.C. 144. On March 2, 2018, the district court denied Mischler’s motion. On March 7, Mischler appealed the order. The Sixth Circuit dismissed for lack of jurisdiction. The district court has not entered a final appealable order terminating all of the issues presented in the litigation. An order denying recusal is not immediately appealable under the collateral order doctrine. A possible exception applies only when a petitioner alleges that delay will cause irreparable harm. While Mischler insists that the judge “should have recused” himself “because his paramour” is an employee of one of the defendants, she made no argument “that the harm [she] might suffer if forced to await the final outcome . . . is any greater than the harm suffered by any litigant forced to wait.” View "Mischler v. Bevin" on Justia Law

Toll was in solitary confinement at Riverbend Maximum Security Institution when he allegedly threw liquid at a correctional officer. The commander decided to extract Toll from his cell. After the cell extraction team (Doss and Horton) removed Toll from his cell, Toll became unresponsive. A doctor pronounced him dead. Toll’s mother, Luna, sued Horton and Doss in their individual capacities for excessive force, and Bell, the warden, for failure to train (42 U.S.C. 1983). In 2013, the district court entered judgments in favor of the defendants. In 2014, the New York Times published an article about the cell extraction team, based on a letter written by a former team member. Based on this new evidence, Luna was granted a new trial. The court declined to award sanctions because the defendants did not act in bad faith in failing to produce the letter and granted summary judgment, rejecting the claims. The Sixth Circuit affirmed the order granting a new trial and reversed the summary judgment. Luna acted diligently in requesting discovery responses that should have included the letter, which was material, controlling evidence. Summary judgment was inappropriate because the court granted a completely new trial, requiring a new jury to examine anew all factual disputes; the court should have reviewed all material facts in a light most favorable to Luna. View "Luna v. Bell" on Justia Law

The previous case involving the same parties involved automobile dealerships from Michigan, Nevada, Ohio, Florida, California, and Wisconsin, whose franchise agreements were rejected during Chrysler’s bankruptcy, but who had arbitrated successfully under the Consolidated Appropriations Act of 2010, to be reinstated as dealers. The Sixth Circuit held that certain provisions of Michigan and Nevada law were preempted by the Act, but upheld, as unchallenged on appeal, the decision that similar provisions of Ohio law were not preempted. The state laws grant existing dealerships certain rights to protest the installation of competing dealerships in the same vicinity. Spitzer, a party to the previous case, explicitly declined to argue preemption of the Ohio statute. Spitzer and others are now engaged in a protest proceeding before the Ohio Motor Vehicles Dealer Board. Chrysler sued to enjoin Spitzer from relitigating the preemption issue before the Board. The Sixth Circuit affirmed a holding that collateral estoppel precludes Spitzer from raising the preemption issue. Spitzer cannot now make the argument that it “so clearly gave up” in earlier litigation with the same parties regarding the same facts. Younger abstention is not applicable because the Ohio dealer protest proceeding is unlike any of the three types of cases to which Younger applies. View "FCA US, LLC v. Spitzer Autoworld Akron, LLC" on Justia Law