Articles Posted in Civil Procedure

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In 1990, Stan and Bara Jurcevic opened an account at the St. Paul Croatian Federal Credit Union (SPCFU). The National Credit Union Administration Board (NCUAB) charters and insures credit unions, 12 U.S.C. 1766, and can place a credit union into conservatorship or liquidation. From 1996-2010, Stan obtained $1.5 million in share-secured loans from SPCFU. Federal auditors discovered that SPCFU’s COO had been accepting bribes in exchange for issuing loans and disguising unpaid balances. SPCFU had $200 million in unpaid debts. NCUAB placed SPCFU into conservatorship and eventually liquidated its assets. NCUAB alleged that Jurcevic failed to disclose a $2,500,000 loan from PNC and an impending decrease in his income; and that he planned to use the loan funds to save his company, Stack. PNC obtained a $2,000,000 judgment against Jurcevic and Stack. NCUAB sued the Jurcevics and Stack and obtained an injunction, freezing the Jurcevics’ and Stack’s assets, except for living expenses. The district court dismissed claims of fraud, conspiracy, and conversion as time-barred and dismissed claims against Bara and Stack as a matter of law. Jurcevic appealed and filed for Chapter 7 bankruptcy. The Board cross-appealed and intervened in the Chapter 7 proceedings. The Sixth Circuit affirmed the asset freeze; the court properly employed the preliminary injunction factors. The court reversed the dismissals because the court did not consider the date of the NCUAB’s appointment and the date of discovery as possible accrual dates for the limitations statute. View "National Credit Union Administration Board v. Jurcevic" on Justia Law

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Cummings worked for the Greater Cleveland Regional Transit Authority for 27 years. She alleges the Authority paid her less than her male colleagues and refused to promote her when she complained about the disparity. She filed suit. The parties entered a settlement on February 4, 2015. The Authority agreed to pay Cummings $45,000 and to suspend her for a six-month period at a pay rate of $600 per month. For 18 months, Cummings could exhaust her paid leave at her regular salary. If Cummings did not obtain other public sector employment with corresponding state retirement benefits, the Authority would again place her on a six-month suspension at $600 per month through January 31, 2017, or the first date she became eligible to retire with 30 years of service credit. Cummings released the Authority from all claims. On July 15, 2016, Cummings asked the Ohio Public Employees Retirement System to calculate her retirement service credit and learned that she would not accumulate additional retirement credit under the settlement because the payments did not count as “earnable salary,” Cummings sought to vacate the judgment and reinstate her complaint. The Sixth Circuit affirmed rejection of her motion as time-barred under Civil Rule 60(b)(1), which permits motions to vacate in the event of “mistake, inadvertence, surprise, or excusable neglect” filed within one year of the judgment. The one-year bar also applies in cases of “fraud ... misrepresentation, or misconduct by an opposing party.” View "Cummings v. Greater Cleveland Regional Transit Authority" on Justia Law

Posted in: Civil Procedure

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Martinez was convicted of distribution of controlled substances, mail fraud, wire fraud, health care fraud, and health care fraud resulting in the death of patients. He was sentenced to life imprisonment. The Sixth Circuit affirmed. Martinez filed, pro se, a 628-page motion to vacate his sentence under 28 U.S.C. 2255. The district court granted a motion to strike because the motion based on the 20-page limit in Northern District of Ohio Local Rule 7.1. The court later dismissed Martinez’s case with prejudice. The Sixth Circuit remanded to allow Martinez to re-file a compliant motion. Martinez filed a new motion, 23 pages long and accompanied by two letters and a 628-page affidavit. The court granted the government’s renewed motion to strike but gave Martinez an opportunity to file a compliant motion. Martinez did not timely re-file. The court dismissed the action. The Sixth Circuit affirmed. The district court correctly applied Local Rule 7.1. Section 2255 motions can be considered civil in nature but even if such proceedings are more criminal in nature, Federal Rule of Criminal Procedure 57 allows district courts to apply local rules if the litigant has notice. Martinez clearly had notice. Local Rule 7.1 is not inconsistent with any provision of section 2255. View "Martinez v. United States" on Justia Law

Posted in: Civil Procedure

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The Tennessee Republican Party, the Georgia Republican Party, and the New York Republican State Committee challenged the legality of 2016 amendments to rules proposed by the Municipal Securities Rulemaking Board (MSRB) that are “deemed to have been approved” by the Securities and Exchange Commission (SEC), 15 U.S.C. 78s(b)(2)(D). The rules arose out of concern “that brokers and dealers were engaging in a variety of ethically questionable practices in order to secure underwriting contracts,” and are intended to limit pay-to-play practices in the municipal securities markets. The amendments limit the campaign activities of persons who advise city and state governments on issuing municipal securities. The Sixth Circuit dismissed because the plaintiffs failed to establish their standing to challenge the amendments. There was no “self-evident” injury to the plaintiffs and only limited information on the number of persons possibly affected by the amendments. At most, there were approximately 713 registered non-dealer municipal advisory firms in the United States that would be affected by the Amendments, but it is unclear how many municipal advisor professionals are associated with these firms, let alone the likelihood that they would donate to plaintiffs if not for the Amendments. It is unknown whether the Amendments have hindered individual candidates who are members of the plaintiff organizations. View "Georgia Republican Party v. Securities & Exchange Commission" on Justia Law

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An unidentified individual alleged that Doe had engaged in nonconsensual sexual activities with a female University of Kentucky student. After an investigation, a Hearing Panel found that Doe had violated the Code of Student Conduct and assessed a one-year suspension. The University Appeals Board (UAB), reversed, finding violations of Doe’s due process rights and the Code of Student Conduct because Simpson, Director of the Office of Student Conduct, withheld critical evidence and witness questions from the Panel. After a second hearing, the Panel again found Doe had violated the policy. The UAB reversed, finding due process errors, including improper partitioning of Doe and his advisors from the student, denying Doe the “supplemental proceeding” described in the Code, and ex parte communications between the student, Simpson, and the Panel. A third hearing was scheduled, but Doe sought an injunction, citing 42 U.S.C. 1983, and Title IX of the Education Amendments Act, 20 U.S.C. 1681. Defendants argued that any constitutional problems would be cured in the third hearing, with new procedures. The court granted Defendants’ request that the court abstain from providing injunctive relief under Younger and held that Simpson was entitled to qualified immunity. The Sixth Circuit affirmed the abstention decision, reversed as to Simpson, and instructed the court to stay the case pending completion of the University proceedings. View "Doe v. University of Kentucky" on Justia Law

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Matovski, a UPS operations manager who has a disability, filed an Equal Employment Opportunity Commission (EEOC) charge, claiming that UPS discriminated and retaliated against him in violation of the Americans with Disabilities Act, 42 U.S.C. 12112(d). Matovski claims that UPS published confidential medical information about him and other employees on its intranet page. The EEOC investigation resulted in a subpoena that requested information about how UPS stored and disclosed employee medical information. UPS opposed the subpoena, claiming that the requested information was irrelevant to Matovski’s charge. The district court granted an application to enforce the subpoena. The Sixth Circuit affirmed. The information that the EEOC requested “relates to unlawful employment practices” covered by the ADA. UPS has not shown that the subpoena is burdensome in any material way. View "Equal Employment Opportunity Commission v. United Parcel Service,Inc." on Justia Law

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Twenty-three Michigan landowners filed suit in the Western District of Michigan, seeking damages in excess of $10,000 for the claimed taking of their land for use as a public recreation trail, alleging: a declaratory judgment claim, a Fifth Amendment claim for just compensation under the Little Tucker Act, 28 U.S.C. 1346 and a Fifth Amendment claim for just compensation under 28 U.S.C. 1331. The district court determined that the Tucker Act, 28 U.S.C. 1491, and the Little Tucker Act, “vested the Court of Federal Claims with exclusive jurisdiction to hear all claims against the United States founded upon the Constitution where the amount in controversy exceeds $10,000.” The court found no constitutional infirmity in this statutory framework, although the Tucker Act prevents the landowners from filing their claims for damages exceeding $10,000 in an Article III court, and litigants bringing claims in the Court of Federal Claims or in the district court under the Little Tucker Act are deprived of a jury trial. Because the landowners had failed to demonstrate that the Acts were unconstitutional, they had no basis for a declaratory judgment. The Sixth Circuit affirmed the dismissal for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. View "Brott v. United States" on Justia Law

Posted in: Civil Procedure

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After the city began using the Flint River as its water source in 2014, residents complained that the water was discolored and foul-smelling. There were reports of skin rashes, hair loss, and vomiting after drinking and bathing in the water. Many children were found to have high levels of lead in their blood stream. In 2016, plaintiffs filed this putative class action in Michigan state court, claiming negligence, intentional and negligent infliction of emotional distress, and unjust enrichment. The defendants include several entities related to the city's expert water consultants. A defendant removed the case to district court under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. 1332(d), asserting that the amount in controversy exceeded $5 million, the putative class comprised at least 100 members, and there was the minimal diversity of citizenship required by CAFA. The district court remanded, citing the local controversy exception, under which a district court must decline to exercise CAFA jurisdiction. The Sixth Circuit reversed, finding that the exception did not apply because other class actions had been filed in the previous three years, asserting the same or similar factual allegations against the defendants. View "Davenport v. Lockwood, Andrews & Newnam, Inc." on Justia Law

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In 2014-2015, Schmückle, a German citizen living in Germany, served as MAG Group’s CEO and managing director of MAG Germany. In 2015, MAG Holdings and MAG US sued (in Michigan) for breach of fiduciary duty, professional negligence, waste of corporate assets, unjust enrichment, and tortious interference under Michigan law. In response to a challenge to jurisdiction, plaintiffs alleged that Schmückle “transacted business” within Michigan and that his “actions and activities led to consequences” in Michigan. Plaintiffs asserted that: Schmückle was responsible for “worldwide operations,” including MAG US; they (Michigan residents) reported directly to Schmückle by email and phone; Schmückle was involved in determining the Michigan facility's operations, budgets, work flow, and sales priorities; he charged MAG US an annual fee, used to pay part of his salary and expenses; he reallocated work from the “consistently profitable” Michigan facility to the “less-profitable” MAG Germany operations and negatively affected the profitability of MAG US in Michigan; and he told MAG US leaders to prepare to transfer $10 million to MAG Germany. Schmückle allegedly visited Michigan twice as CEO, maintains a residence in Oregon, and sits on the boards of U.S.-based three companies. The district court, without holding an evidentiary hearing, dismissed for lack of personal jurisdiction. The Sixth Circuit reversed, stating that the record did not overcome the presumption that exercising personal jurisdiction over Schmückle in Michigan was reasonable. View "MAG IAS Holdings, Inc. v. Schmückle" on Justia Law

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Appellees brought a collection action against Lyshe and served Lyshe with discovery requests. They did not send a separate electronic copy, but instructed Lyshe to contact them if he wanted an electronic copy. Requests for admission required that Lyshe verify his responses, included a blank notary block, and provided that any matter would be deemed admitted unless Lyshe made a sworn statement in compliance with the Ohio Rules of Civil Procedure. Lyshe sued, alleging violation of the Fair Debt Collection Practices Act (FDCPA) by failing to provide electronic discovery without prompting and requiring that the responses to the requests for admission be sworn and notarized. The district court concluded that it lacked subject matter jurisdiction and dismissed the case, reasoning that Lyshe did not plead any injury in connection with the alleged violations of the state rules. Appellees did not violate the Ohio Rules of Civil Procedure by offering to send electronic copies of the discovery only upon Lyshe’s request. Regarding alleged errors in the requests for admissions, the court reasoned that Lyshe failed to allege that he was misled or felt compelled to make a sworn verification or that he even responded to the requests. The Sixth Circuit affirmed, agreeing that Lyshe did not suffer any concrete harm. View "Lyshe v. Levy" on Justia Law