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

In 1988 Sutherland received breast implants in North Carolina. She filed suit in North Carolina five years later, after learning that the silicone in her implants could be causing a variety of serious medical problems. The Silicone’s manufacturer, Dow Corning, filed for bankruptcy in Michigan, and Sutherland’s suit was transferred there. In 2012, 24 years after Sutherland received the implants, the district court concluded that Sutherland’s claim was barred by Michigan’s statute of limitations and granted summary judgment to the defendant. The Sixth Circuit reversed, reasoning that the district court should have applied North Carolina’s law instead of Michigan’s, and should have concluded that there was a genuine factual issue as to whether Sutherland’s claim was timely-filed under North Carolina law. View "Sutherland v. DCC Litig. Facility, Inc." on Justia Law

Johnson, a long-time city employee (garbage collectors) was denied utility services by Memphis Light, Gas & Water, a division of the city, in February 2010 because he did not possess a state-issued photo identification card. Johnson, born in rural Mississippi, lacked a birth certificate, was illiterate and had intellectual disabilities that made it difficult for him to navigate the process of obtaining the necessary state identification. He lived without utilities for more than 18 months and died of heat stroke in August 2011. His wife and sister sued MLGW under 42 U.S.C. 1983; the Governmental Tort Liability Act (GTLA), Tenn. Code 29-20-205.; and Tennessee’s wrongful death statute, Tenn. Code 20-5-106. The court granted summary judgment for MLGW on the grounds that all of Plaintiffs’ claims were barred by the statutes of limitations. The Sixth Circuit reversed, finding sufficient evidence that Johnson was of unsound mind to apply the state's earlier tolling statute. View "Johnson v. Memphis Light, Gas & Water Div." on Justia Law

Plaintiff offered to sell 3 million pounds of scrap copper to the defendant. The defendant negotiated the core terms of the sale but did not object to a fee-shifting provision: “In the event purchaser shall default in his obligations hereunder, purchaser shall be liable for [the plaintiff]’s costs of collection, including attorney’s fees.” The contract was negotiated between two experienced and sophisticated commercial entities. There was no duress. In a suit between the two, the otherwise victorious plaintiff appealed the district court’s ruling that the unilateral fee-shifting clause for attorney’s fees was unenforceable under Ohio law as a matter of public policy. The district court relied on Sixth Circuit precedent, holding that the Ohio Supreme Court would not enforce similar fee-shifting clauses. The Sixth Circuit reversed, noting that the Ohio Supreme Court has since clarified that it would enforce such unilateral or one-sided fee-shifting contract provisions. View "Allied Indus. Scrap, Inc. v. OmniSource Corp." on Justia Law

The bankruptcy court imposed sanctions against attorneys stemming from their representation of Debtors in an adversary proceeding in which a creditor and the Trustee sought denial of discharge. The attorney filed notice of appeal regarding the July 16 sanctions order on July 30. On August 1, the bankruptcy court entered an Order Setting Amount of Additional Sanctions. On August 5, the bankruptcy court amended its August 1, order and imposed additional sanctions under 28 U.S.C. 1927, covering attorney fees and expenses incurred by the Trustee and creditor in the adversary proceeding. An August 27 motion to dismiss asserted that the July 16 order was not final and that cause did not exist to allow appeal from an interlocutory order. A September 8 amended motion for leave to appeal and corrected notice of appeal indicated an appeal of all three sanctions orders. In response, a motion to strike asserted failure to timely perfect appeal from the August 1 or August 5 orders. The Sixth Circuit Bankruptcy Appellate panel denied the motions to dismiss and to strike, holding that it had jurisdiction because the amount of sanctions was set forth in a final order. Notice of appeal was timely filed. Resolution of the sanctions issue will have no discernable impact on the pending discharge issue. View "In re: Blasingame" on Justia Law

Yoder hosts auctions for used construction equipment. Its largest annual auction is in Florida. Efacts, owned by Garafola, provides auctioneers with online bidding platforms. In 2003, Yoder began accepting live Internet bids during the Florida auction. Efacts provided services. Efacts received and maintained confidential customer information relating to Yoder’s auctions. In 2008 the companies had a falling out. Yoder terminated the contract and hired RTB, another online bidding services company. On February 7-9, 2010, Efacts accessed the RTB bidding platform without authorization, using an RTB administrative username and password. Garafola was aware of the username and password combination from Efacts’ prior relationship with Yoder and submitted winning bids with a combined price of $41,000 for which it did not pay. On February 10- 11, an Efacts employee gained unauthorized access to the RTB platform, posing as a Yoder customer, and placed 18 winning bids with a combined price of $1,212,074 which were not paid. The Sixth Circuit affirmed judgment in favor of Yoder, rejecting claims based on denial of spoliation sanctions; denial of hearsay objections to documents produced by internet service providers; denial of summary judgment on Computer Fraud and Abuse Act claim; and imposition of sanctions under FRCP 37. View "Yoder & Frey Auctioneers, Inc v. EquipmentFacts, LLC" on Justia Law

Elvira was driving a car, owned by Mullalli, when she hit ice and collided with a negligently parked vehicle. Elvira, who suffered a traumatic brain injury, acute cervical and lumbar sprains, bulging discs, and other injuries, sued in federal court to recover under Mullalli’s no-fault State Farm automobile insurance policy,. Elvira and Mullalli are citizens of Michigan; State Farm is an Illinois citizen. The district court dismissed for lack of diversity jurisdiction, reasoning that the suit was a “direct action” under 28 U.S.C. 1332(c)(1), requiring Mullalli’s Michigan citizenship to be imputed to State Farm. The Sixth Circuit reversed. Because the direct action proviso does not apply to suits brought against the insurer by insured persons identifiable before the accident occurs, this suit was not a direct action and Mullalli’s citizenship should not have been imputed to State Farm. The court distinguished between the personal protection provisions of Michigan’s no-fault law that require coverage of an identifiable group of individuals: the named insured, a spouse, any relatives living with them, and any occupant of a car they own and the property protection provision of the statute, which states simply that “an insurer is liable to pay benefits for accidental damage.” View "Ljuljdjuraj v. State Farm Mut. Auto. Ins. Co." on Justia Law

Kopko ran SFS in Michigan, providing financial transaction processing and electronic funds transfers to companies engaged in e-commerce, processing those transactions through its Fifth Third account, Fifth Third discovered that FBD was processing illegal gambling funds through that account and notified SFS that it was closing SFS’s account immediately. Losing this account crippled SFS’s ability to do business. SFS went bankrupt. Kopko telephoned FBD and spoke to Bastable, FBD’s vice-president for e-commerce. According to Kopko, Bastable said FBD did not have an account in SFS’s name. Months later SFS received a grand jury subpoena related to a federal investigation of the gambling transactions done in SFS’s name. When Kopko called Bastable again to discuss the subpoena, Bastable admitted that FBD had an account in SFS’s name and that the board of directors was aware of this account. In 2012, SFS sued FBD, Bastable, and FBD’s individual directors in federal court for negligence and fraud against. The district court dismissed. The Sixth Circuit affirmed that: answering the phone calls did not establish personal jurisdiction over individual defendants; FBD owed no duty of care to SFS because SFS was not a customer; and SFS failed to adequately plead a claim of fraud. View "SFS Check, LLC v. First Bank of De." on Justia Law

P&C filed suit on behalf of Penn, LLC against Prosper Corporation, Prosper’s owners, and their counsel, the Arnold Firm, alleging violations of the Racketeering Influenced and Corrupt Organizations Act, fraud, conversion, unjust enrichment, and breach of fiduciary duty in connection with the management of Penn and Prosper’s joint venture, BIGresearch. There had been court and arbitration proceedings since 2004, but Penn never before named the Arnold Firm as a defendant. The Arnold Firm served P&C with a letter purporting to satisfy the obligations of Fed. R. Civ. P. 11, threatening to seek sanctions if the matter was not dismissed, and claiming that the action was frivolous and had been filed for the “improper and abusive purpose” of disrupting the Arnold Firm’s attorney-client relationship with Prosper and its owners. The district court ultimately dismissed the Arnold Firm from the action, but denied a motion for Rule 11 sanctions against P&C. The Sixth Circuit affirmed on the alternative ground that the Arnold Firm’s failure to comply with Rule 11’s safe-harbor provision made sanctions unavailable. The Arnold Firm’s warning letter expressly reserved the firm’s right to assert additional grounds for sanctions in its actual motion. View "Penn, LLC v. Prosper Bus. Dev. Corp." on Justia Law

Hoey, who owns a farmers’ market that offers hay rides, pony rides, and pumpkin picking, hired Armbruster to run the hay wagon for eight weekends. Armbruster is now a paraplegic because an accident with the wagon crushed her spine. She sued for negligence in Michigan state court. Armbruster and Hoey also sought a declaratory judgment, again in state court, that Armbruster was covered by Hoey’s General Commercial Liability insurance policy. The insurer, Western, sought a federal declaratory judgment that Armbruster was not covered by the insurance policy. The cases were consolidated in federal court. Counsel, provided by Western to Hoey, filed a workers’ compensation claim on the theory that Armbruster was an “employee” eligible for workers’ compensation. The state tort claim has been stayed until the workers’ compensation claim is resolved. The district court accepted jurisdiction and construed the policy to exclude Armbruster’s injury from coverage. The Sixth Circuit affirmed, agreeing that it would be helpful for the parties to know whether Western was liable for Hoey’s legal fees, that Western was not playing procedural games, and that the federal forum could resolve the action without interfering in Armbruster’s tort suit or taking on difficult questions of state law. View "W. World Ins. Co. v. Armbruster" on Justia Law

Smith was an employee CGC, which offered some employees, including Smith, enhanced compensation if they would remain with CGC through its merger with AEGON. Under the Voluntary Employee Retention and Retirement Program (VERRP) Smith would retire in 2000. Smith elected to receive $1,066.54 under the qualified plan and $1,122.97 under the non-qualified plan, through the “AEGON USA Pension Plan: Election for Distribution and Explanation of Benefits.” An attachment informed Smith that “you will be entitled to receive additional benefits from the [CGC] Retirement Plan.” The two plans subsequently merged. Smith retired and the Plan paid him a lump sum plus $2,189.51 per month. In 2007, AEGON amended the Plan to add a “Restriction on Venue. A participant or Beneficiary shall only bring an action in connection with the Plan in Federal District Court in Cedar Rapids, Iowa.” In 2011, the Plan told Smith that it had overpaid him by $1,122.97 per month for 11 years and eliminated Smith’s entire monthly payment to obtain recoupment. Smith exhausted administrative remedies then filed suit against CGC in state court, asserting breach of contract, wage and hour statutory violations, estoppel, and breach of the duty of good faith and fair dealing. CGC removed the action to federal court, which dismissed, finding that that the VERRP was regulated by ERISA, that Smith was suing to recover benefits under this ERISA plan, and that only the Pension Committee, not CGC, was a proper defendant. The Sixth Circuit affirmed. Smith filed suit against the AEGON Plan in the U.S. District Court for the Western District of Kentucky. The district court dismissed based on the venue selection clause. The Sixth Circuit affirmed, upholding the venue selection clause as applying to all actions brought by a participant or beneficiary, not just claims for benefits. View "Roger Smith v. Aegon Companies Pension Plan" on Justia Law