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

Plaintiff rented a car, drove 64 miles in one day, refilled the fuel tank, and returned the car to the same location from which he rented the car. In addition to rental and other fees that he does not dispute, he was charged a $13.99 fuel service fee that he challenged by filing a putative class action, claiming breach of contract, fraud, and unjust enrichment. Defendant claimed that, because plaintiff drove fewer than 75 miles during the rental period, to avoid the charge he was required to return the car with a full fuel tank and to submit a receipt. The district court dismissed, finding that the contract was not ambiguous. The Sixth Circuit affirmed, citing the voluntary payment doctrine.

In 2006, plaintiffs contracted with defendant to purchase a condominium for $395,900. They made cash deposits of $11,877 and executed a note for $19,795. When notified of a closing date in 2009, plaintiffs' counsel sent defendant a letter rescinding the agreement and requesting return of the deposits. Defendant declined. Plaintiffs' complaint alleged violation of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1701, for failing to provide a printed property report, and failure to include a provision notifying plaintiffs that if defendant failed to furnish a property report before execution of the purchase agreement, they had the right to revoke the purchase agreement within two years of its signing. They also asserted a claim under the Michigan Condominium Act, Mich. Comp. Laws 559.184. The district court held that the claim for rescission was untimely, stating that a purchaser must notify the seller of rescission within two years after the signing, but a has an additional third year to bring suit if the seller refused to honor the rescission. The Sixth Circuit affirmed that the claim for automatic rescission was untimely, but reversed dismissal of the state law claim and remanded. Equitable rescission may be available under 15 U.S.C. 1709.

Plaintiffs paid off their home mortgage early and were charged a $30 "payoff statement fee" and a $14 "recording fee" in connection with the prepayment. They challenged the fees as violations of the mortgage contract, of state laws, and of the federal Real Estate Settlement Procedures Act, 12 U.S.C. 2601. The district court dismissed the suit as preempted by the federal Home Owners’ Loan Act, 12 U.S.C. 1461, and for failure to state a claim under RESPA. The Sixth Circuit held that the other claims were properly dismissed, but remanded a breach of contract claim. A Michigan Usury Act claim was preempted by HOLA; plaintiffs failed to state a claim under the deed recording statute, the state consumer protection law, or RESPA, which does not apply to charges imposed after the settlement. The court rejected a claim by the FDIC, appointed as receiver for the defendant-lender, that the court had been deprived of jurisdiction by the Financial Institution Reform, Recovery, and Enforcement Act, 12 U.S.C. 1281(d).

Two members of a program advertised as providing healthcare discounts to consumers sued, seeking to represent a class of 30,850. They claimed violations of the Ohio Consumer Sales Practices Act as well as Ohio’s common law prohibition against unjust enrichment in that healthcare providers listed in the discount network that had never heard of the program, and that newspaper advertisements, designed to look like news stories were deceptive. The district court exercised jurisdiction under the Class Action Fairness Act of 2005, 28 U.S.C. 1332(d), which grants jurisdiction over class actions in which the amount in controversy exceeds $5 million and the parties are minimally diverse. The district court dismissed. The Sixth Circuit affirmed. The consumer-protection laws of many states, not just of Ohio, govern the claims and there are many factual variations among the claims, making a class action neither efficient nor workable nor above all consistent with the requirements of Rule 23 of the Federal Rules of Civil Procedure.

Plaintiffs Carol Metz and others filed a putative class action against fifty-five banks, including Fifth Third. The claims arose out of a Ponzi scheme involving bogus promissory notes. Five months later, attorney Daniel Morris filed a motion to intervene on behalf of his clients. Attached to the motion was a complaint similar to Metz's complaint except it was premised on promissory notes issued by different entities. The district court granted the motion to intervene. After the district court had dismissed Fifth Third with prejudice, Morris filed an intervenors' complaint against Fifth Third. The complaint was virtually identical to the complaint attached to the motion to intervene Morris filed earlier. The district court dismissed the claims with prejudice and granted Fifth Third's request for sanctions. The Sixth Circuit affirmed the imposition of sanctions, holding (1) the district court's imposition of sanctions under the bad faith standard was proper; (2) the record set forth sufficient evidence to support the district court's decision; (3) the district court properly sanctioned Morris under its inherent authority even though Fed. R. Civ. P. 11 also applied; (4) the district court did not deny Morris due process; and (5) the amount of fees awarded was not excessive.

The debtor did not pay his $2,902 bill for treatment of an infection, which was turned over to a collections agency. He made payments for several years. When the balance was at $536.35 the agency sued in Michigan court for $678.27, attaching to the complaint a document titled "Combined Affidavit of Open Account and Motion for Default Judgment." An agency employee then incorrectly told the debtor that he owned $1,016. The district court rejected the debtor's suit under the Fair Debt Collection Practices Act 15 U.S.C. § 1692e. The Sixth Circuit reversed in part, holding that the title to the document attached to the complaint could be misleading. The mistaken balance was not given as part of a collection effort and was not a violation of the Act.

Plaintiffs filed suit under the federal Driver’s Privacy Protection Act (DPPA), 18 U.S.C. 2721-2725, and 42 U.S.C. 1983, alleging that personal information, as defined by the DPPA, was disclosed by individual defendants while acting as agents of the Ohio Department of Public Safety or the Ohio Bureau of Motor Vehicles (BMV). The BMV apparently made bulk disclosures of personal information from motor vehicle records to a company, for an asserted permissible purpose, and the company resold or redisclosed the information. The district court determined that the defendants were not entitled to qualified immunity. On interlocutory appeal. the Sixth Circuit reversed and remanded. The DPPA is not a strict liability statute and the defendants made the disclosures for a purportedly permitted purpose; they did not violate plaintiffs' "clearly established" rights. The DPPA does not impose a duty to investigate requests for disclosure nor does it clearly prohibit bulk disclosures.

The Sixth Circuit previously reversed defendant's conviction and sentence for possession of a firearm in connection with drug trafficking, 18 U.S.C. 924(c), but affirmed other convictions and the 30-year sentence he received for those counts. The government dropped the charge and the court vacated the sentence for that count by written order without allowing defendant to personally appear or re-allocute. peals arguing that the district court erred by not conducting a plenary resentencing. The Sixth Circuit affirmed, holding that because the issue was limited to the 924 charge, which the United States declined to pursue, there was no sentencing to be done. The district court did not rely on the 924 conviction in imposing the sentence for the other counts and it was not improper to consider the actual possession of a gun.

The first plaintiffs alleged that Fidelity failed to provide a discount, required by its filed rates, when issuing title insurance to homeowners who had purchased a title insurance policy for the same property from any other insurer within the previous 10 years. The second plaintiff brought the same claims against First American. The district court denied their motion to certify a class. The Sixth Circuit affirmed. Although the claims involve small amounts, so that the plaintiffs are likely unable to recover except by class action, the plaintiffs did not establish that issues subject to generalized proof and applicable to the whole class predominate over issues subject to individualized proof. The need to establish entitlement to join the class and the need to prove individual damages are not fatal to class certification, but the Ohio insurance rate structure would necessitate individual inquiries on the issue of liability. The plaintiffs phrased their claims in a way that would require examination of individual policies and whether the company received the requisite documentation for the discount.