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

Plaintiff is the marketer, distributor, and seller of 5-hour ENERGY (FHE), an “energy shot,” which is an energy drink sold and consumed in small portions. Plaintiff began selling FHE in 2004. FHE was not the first energy shot on the market, but was the first to achieve widespread success and was unique in being marketed FHE to adults as a replacement for an afternoon cup of coffee or a caffeinated soda. Plaintiff submitted “5-hour ENERGY” for trademark registration with the Patent and Trademark Office, which rejected the application in January 2005, deeming the mark too descriptive to be eligible for protection. Plaintiff placed FHE on the Supplemental Register in September 2005 and secured a trademark for “5-hour ENERGY” in August 2011. Plaintiff also protected its mark and market position through litigation. Defendants have marketed dietary supplements since the mid-1990s. In 2008, defendants began to market and sell “6 Hour Energy Shot,” in a bottle resembling the FHE bottle. In a suit under the Lanham Act, 15 U.S.C. 1051, the district court found infringement of plaintiff’s trademark and trade dress, then entered an order of contempt after the defendants violated a permanent injunction entered. The Sixth Circuit affirmed.View "Innovation Ventures, LLC v. N2G Distrib., Inc." on Justia Law

The plaintiffs deal in silver and gold jewelry, ingots, numismatics, and other related items. They challenged the facial constitutionality of the Precious Metals Dealers Act, Ohio Rev. Code 4728, alleging violation of the commercial speech rights of businesses dealing in precious metals, vagueness, and violation of the Fourth Amendment by imposing overly burdensome retention, reporting, and record-keeping requirements. The district court granted a preliminary injunction, finding that the Act violated the First Amendment because only those engaged in commercial speech are subject to its licensing requirement. The injunction prohibited the state from requiring licenses or fining those, like plaintiffs, who previously violated the statute. The Sixth Circuit reversed, applying “rational basis” review. The Act does not burden the commercial speech rights of unlicensed precious metals dealers. Such dealers do not have a constitutional right to advertise or operate a business does not comply with reasonable requirements of Ohio law and cannot “hold themselves out” to the public without a license, regardless of whether they advertise. The issue is not advertising, but whether a business holds itself out to the public, which can occur by posting a sign, placing goods in a window, or simply conducting business in a manner that is visible to the public. The court noted the public interest in the statutory scheme .View "Liberty Coins, LLC v. Goodman" on Justia Law

Corning hired Hyundai, an ocean shipper, to transport thin glass sheets for use in televisions and computer monitors from the U.S. to Asia. Although it is not clear when the damage occurred, damage was noted when Hyundai unloaded the containers from flatcars operated by its subcontractors (Norfolk Southern Railway and BNSF, another rail carrier). Corning had no role in selecting and no relationship with the subcontractors. There were opinions that the damage was caused by movement of the railcars, not by packing, but the actual cause was not established. Corning’s insurer paid Corning $664,679.88 and filed suit. The district court held that the case would proceed solely under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11706, apparently reasoning that the damage undisputedly occurred while the cargo was in the possession of a rail carrier. The court found that a Subcontracting Clause did not immunize the rail carriers from suit, but obligated Corning to indemnify Hyundai for any resultant claims by a subcontractor against Hyundai arising out of the same facts. The court held that a $500-per-package limit of liability did not apply to the rail carriers or Hyundai. After a jury trial, the court found Hyundai and the railroads liable, but denied prejudgment interest. The Sixth Circuit affirmed the judgment against Hyundai, reversed and vacated judgments against the railroads, and remanded for reconsideration of prejudgment interest.View "CNA Ins. Co. v. Hyundai Merch. Marine Co., Ltd." on Justia Law

Kentucky law prohibits businesses that sell substantial amounts of staple groceries or gasoline from applying for a license to sell wine and liquor, Ky. Rev. Stat. 243.230(7). A regulation applies the prohibition to retailers that sell those items at a rate of at least 10% of gross monthly sales. A group of grocers sued the Kentucky Department of Alcoholic Beverage Control, alleging that the law irrationally discriminated against them in violation of state and federal equal-protection rights; that it violated state separation-of-powers principles by granting the administrative board unfettered discretion to define the law; and that it violated state and federal due process rights by vaguely defining its terms. A liquor store intervened as a defendant. The district court granted summary judgment to the grocers on the federal equal-protection claim but rejected the other claims. The Sixth Circuit reversed in part, upholding the statute. Applying the rational basis test, the court reasoned that the statute conceivably seeks to reduce access to high-alcohol products, and offends neither separation of powers nor due process principles. View "Maxwell's Pic-Pac, Inc. v. Dehner" on Justia Law

Until 2001 Dean and Suiza competed to process and sell bottled milk to retailers. Suiza was the largest U.S. processor of milk and Dean was the second largest. Both purchased raw milk from other entities. DFA, a dairy farmer cooperative, was Suiza’s primary supplier and business partner. Dean obtained its raw milk predominantly from independent farmers. Dean and Suiza merged in 2001, becoming Dean Foods, hoping to obtain “distribution efficiencies and economies of scale,” for millions of dollars in cost savings. Certain agreements were negotiated, with input from the Department of Justice, which approved the proposed merger, subject to divestment of particular milk processing plants. Retailers of processed milk sued, charging violation of 15 U.S.C. 1, the Sherman Antitrust Act, by conspiring with a raw milk supplier-milk processor and the purchaser of the divested processing facilities to divide markets and restrict output. The district court granted summary judgment in favor of Dean Foods, finding insufficient proof of injury and failure to establish the relevant antitrust geographic market, primarily because plaintiff’s expert’s testimony was excluded. The Sixth Circuit reversed and remanded, holding that the expert should not have been excluded and that the conclusions regarding injury were based on flawed propositions. View "Food Lion, LLC v. Dean Foods Co." on Justia Law

Beginning in 2004, 1st Source Bank entered into secured transactions with the debtors for the sale or lease of tractors and trailers. The agreements granted 1st Source a security interest in the tractors and/or trailers, accounts, and in proceeds from that collateral. 1st Source filed financing statements that identified the collateral as including the specified tractors/and or trailers, and “all proceeds thereof, including rental and/or lease receipts.” The financing statements did not refer to “accounts,” “accounts receivable,” or any similar language. Later, defendant banks also entered into secured transactions with the debtors and filed financing statements that specifically referred to a security interest in “all accounts receivable now outstanding or hereafter arising.” In 2009, the debtors defaulted. 1st Source undertook repossession of the collateral securing the agreements and attempted to claim a perfected security interest and first priority in debtors’ accounts, arguing that the term “and all proceeds thereof” included accounts receivable. The district court granted defendants summary judgment, finding that 1st Source’s financing statements were not sufficient to put defendants on notice that 1st Source claimed a security interest in accounts receivable, and holding, as a matter of Tennessee law, that “proceeds,” as used in a company’s financing statement, does not include its accounts receivable. The Sixth Circuit affirmed. View "1st Source Bank v. Wilson Bank & Trust" on Justia Law

AmEx is the world’s largest issuer of traveler’s checks, which never expire. AmEx and third-party vendors sell the checks at face value, and AmEx profits by investing the funds until the TC is redeemed. Although most are cashed within a year, AmEx uses the remaining uncashed checks for long-term, high-yield investments. Until recently, every state’s abandoned property laws presumed abandonment of uncashed traveler’s checks 15 years after issuance. This presumption requires the issuer to transfer possession of the funds to the state. In 2008 Kentucky amended KRS 393.060(2) to change thes abandonment period from to seven years. AmEx claims violation of the Due Process Clause, the Contract Clause, and the Takings Clause. Following a remand and amendment of the complaint to add a dormant Commerce Clause argument and a claim that the legislation did not apply retroactively to checks that were issued and outstanding prior to the effective date, the district court granted the state summary judgment. The Sixth Circuit affirmed, holding that the amendment applies only prospectively and does not violate the Commerce Clause. View "Am. Express Travel Related Servs. Co., Inc. v. Hollenbach" on Justia Law

Aleris supplied aluminum to Behr under a requirements contract until a labor dispute forced Aleris to close its Quebec factory in 2008. After learning of the closure, Behr took delivery of aluminum worth $2.6 million from Aleris without paying for it and scrambled to obtain aluminum from other suppliers, which Behr says increased its costs by $1.5 million. Behr filed suit in Michigan state court. That suit was stayed in 2009 when Aleris’s parent company filed for bankruptcy in the U.S. Aleris filed for bankruptcy in Canada. Aleris sued Behr in federal court seeking recovery of $2.6 million for the aluminum delivery. Behr asserted numerous defenses and counterclaims including a setoff for its increased costs after the factory closure. The district court abstained from adjudication of Behr’s counterclaim, characterizing it as “part and parcel of the stayed state-court proceedings,” then granted summary judgment to Aleris in the amount of $1.1 million and closed the case. Behr satisfied the judgment. The state court declined to lift the stay. The Sixth Circuit reversed, stating that the decision gave Behr full value for its untested counterclaim and has the impact of depriving the Canadian estate of monies to which it might be entitled. View "RSM Richter, Inc. v. Behr America, Inc." on Justia Law

Grigoleit supplied knobs for Whirlpool’s washing machines and dryers for several years, and sought to increase prices and amend the parties’ purchase contracts in 2004. The parties reached an amended agreement in 2005, which Whirlpool terminated later that year. When Grigoleit demanded final payment, Whirlpool sued, arguing the contract was unenforceable. The district court upheld the contract but found some aspects of it unconscionable. The Seventh Circuit agreed that the contract was enforceable. Under Michigan law both substantive and procedural unconscionability are required to hold an agreement unenforceable. Refusing to certify questions to the state’s supreme court, the Sixth Circuit reversed the holding that a $40,000 flat fee and 8% increase are unconscionable. Whirlpool created the urgent and unfavorable conditions under which it proposed these terms, and had ample time and opportunity to negotiate more favorable terms. Whirlpool had the resources, experience, and ability to avoid the terms entirely, yet chose not to do so. View "Whirlpool Corp. v. Grigoleit Co." on Justia Law

Cogent sued, alleging that Hyalogic was disseminating false information regarding Cogent’s product Baxyl, an “oral, liquid HA supplement that is sold into the human natural products market.” Shortly after the filing, the parties entered into a settlement agreement. Cogent moved to enforce the settlement agreement, claiming that Hyalogic caused false and misleading videos to be uploaded to You Tube and by statements made at a conference. The district court found no breach of the settlement agreement and denied the motion. The Sixth Circuit affirmed. The contract unambiguously refers to a clear statement “about the other Party’s product.” Statements that refer to preservatives that can be found in a number of products, including Cogent’s products, are not statements “about the other Party’s products.” View "Cogent Solutions Grp, LLC v. Hyalogic, LLC" on Justia Law