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

Fleet Owners Fund is a multi-employer “welfare benefit plan” under the Employee Retirement Security Act (ERISA), 29 U.S.C. 1001, and a “group health plan” under the Patient Protection and Affordable Care Act (ACA), 26 U.S.C. 5000A. Superior Dairy contracted with Fleet for employee medical insurance; the Participation Agreement incorporated by reference a 2002 Agreement. In a purported class action, Superior and its employee alleged that, before entering into the Agreement, it received assurances from Fleet Owners and plan trustees, that the plan would comply in all respects with federal law, including ERISA and the ACA. Plaintiffs claim that, notwithstanding the ACA’s statutory requirement that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the plan maintains such restrictions and that Superior purchased supplemental health insurance benefits to fully cover its employees. Fleet argued that the plan is exempt from such requirements as a “grandfathered” plan. The district court dismissed the seven-count complaint. The Sixth Circuit affirmed, concluding that plaintiffs lacked standing to bring claims under ERISA and ACA, having failed to allege concrete injury, and did not allege specific false statements. View "Soehnlen v. Fleet Owners Insurance Fund" on Justia Law

In 2010, plaintiffs, former employees of establishments that operate in “Fourth Street Live,” a Louisville entertainment district, sued, alleging violations of the Kentucky Wage and Hour Act, KRS 337.385, based on policies regarding off-the-clock work and mandatory tip-pooling. In 2012, the district court granted class certification under Rules 23(a) and 23(b). In 2013, the defendants unsuccessfully moved for reconsideration, citing the Supreme Court’s 2013 "Comcast" decision. In 2014, the parties reached a financial settlement. It took almost another year to reach an agreement regarding non-monetary terms. In March 2015, the parties filed a joint status report declaring that they had reached a settlement agreement and anticipated filing formal settlement documents in April. The defendants then became aware of a February 2015 Kentucky Court of Appeals holding that KRS 337.385 could not support class-action claims. Defendants unsuccessfully moved to stay approval of the settlement. The court granted preliminary approval of the settlement. The Sixth Circuit denied an appeal as untimely because the defendants had not challenged an appealable class-certification order under Rule 23(f). Defendants filed another unsuccessful decertification motion with the district court. The court granted final approval of the settlement as “a binding contract under Kentucky law.” The Sixth Circuit affirmed. A post-settlement change in the law does not alter the binding nature of the parties’ agreement. View "Whitlock v. FSL Management, LLC" on Justia Law

In the 1990s, Stryker purchased a Pfizer subsidiary that made orthopedic products, including the “Uni-knee” artificial joint. It was later discovered that those devices were sterilized using gamma rays, which caused polyethylene to degrade. If implanted past their five-year shelf-life, the knees could fail. Expired Uni-Knees were implanted in patients. Stryker, facing individual product-liability claims and potentially liable to Pfizer, sought defense and indemnification under a $15 million XL “commercial umbrella” policy, and a TIG “excess liability” policy that kicked in after the umbrella policy was fully “exhausted.” XL denied coverage, arguing that the Uni-Knee claims were “known or suspected” before the inception of the policy. Stryker filed lawsuits against the insurers, then unilaterally settled its individual product-liability claims for $7.6 million. Stryker was adjudicated liable to Pfizer for $17.7 million. About 10 years later, the Sixth Circuit held that XL was obliged to provide coverage. XL paid out the Pfizer judgment first, exhausting coverage limits. TIG declined to pay the remaining $7.6 million, arguing that Stryker failed to obtain “written consent” at the time the settlements were made. Stryker claimed that the policy was latently ambiguous because XL satisfied the Pfizer judgment first, Stryker was forced to present its settlements to TIG years after they were made. The district court granted Stryker summary judgment. The Sixth Circuit reversed, finding the contract unambiguous in requiring consent. View "Stryker Corp. v. National Union Fire Insurance Co." on Justia Law

The City of Chattanooga added a cost-of-living adjustment (COLA) to its Fire and Police Pension Fund in 1980. In 2000, the city amended the COLA for a third time to create a fixed three-percent annual increase in retirement benefits. The city amended the COLA again in 2014 to a lower, variable annual increase. Fund participants challenged the 2014 amendment under the Contract Clause, claiming a right to the fixed three-percent COLA. The district court granted the defendants summary judgment. The Sixth Circuit affirmed. There is no unmistakable evidence of the city’s intent to be bound to the fixed COLA, because the COLA is neither vested nor accrued within the meaning of the City Code. Absent some clear indication that the legislature intends to bind itself contractually, a statute does not create a contractual relationship. The City Code contains one vesting provision: After 10 years of service, a participant has the right either to a full refund of her contributions or to retirement benefits upon turning 55. The section does not mention the COLA. The fact that the Fund described the fixed three-percent COLA as “guaranteed” when enacting the 2000 amendment does not prove that the city intended to be bound to the fixed COLA. View "Frazier v. City of Chattanooga" on Justia Law

Before accepting a transfer to a Bridgestone facility in North Carolina, Deschamps expressed concern about losing pension credit for his 10 years of employment with Bridgestone in Canada. After receiving assurances from Bridgestone’s management team that he would keep his pension credit, Deschamps accepted the position. For several years, Deschamps received written materials confirming that his date of service for pension purposes would be August 1983. He turned down employment with a competitor at a higher salary because of the purportedly higher pension benefits he would receive at Bridgestone. In 2010, Deschamps discovered that Bridgestone had changed his service date to August 1993, the date he began working at the American plant. After failed attempts to appeal this change through Bridgestone’s internal procedures, Deschamps filed suit, alleging equitable estoppel, breach of fiduciary duty, and an anti-cutback violation of ERISA, 29 U.S.C. 1054(g). The Sixth Circuit affirmed summary judgment for Deschamps on all three claims. The text of the plan “is at worst ambiguous, but at best, favors Deschamps’s argument that he was a covered employee in 1983” and, as a result of the change in the interpretation of this provision that excluded foreign employees from being classified as covered employees, Deschamps’s benefits were decreased. View "Deschamps v. Bridgestone Americas, Inc." on Justia Law

The Michigan office of Alix, an international company, administers payroll and benefits for U.S. employees and is directly involved in U.S. hiring. In 2013, Alix hired Brewington, a Texas resident, for its Dallas Corporate Services team. The employment agreement provides that it “will be construed and interpreted in accordance with the laws of the State of Michigan” and states, “any dispute arising out of or in connection with any aspect of this Agreement and/or any termination of employment . . ., shall be exclusively subject to binding arbitration under the . . . American Arbitration Association . . . decision of the arbitrator shall be final and binding as to both parties.” In 2014, Brewington was terminated. He filed a demand for arbitration, asserting claims under Title VII, 42 U.S.C. 2000e, on behalf of himself and a purported nationwide class of current, former, and potential Alix employees. The Michigan district court ruled that Brewington was precluded from pursuing arbitration claims on behalf of any purported class. The Sixth Circuit affirmed that court’s refusal to dismiss, finding that Brewington had sufficient contacts with Michigan to establish personal jurisdiction, and upheld summary judgment in favor of Alix. An agreement must expressly include the possibility of classwide arbitration to indicate that the parties agreed to it. This clause is silent on the issue and is limited to claims concerning “this Agreement,” as opposed to other agreements. It refers to “both parties.” View "AlixPartners, LLP v. Brewington" on Justia Law

Stevens worked for Baker from 1989 until 1996. When his employment ended, Stevens signed a contract in which he promised to maintain the confidentiality of Baker’s trade secrets. In 1999, Stevens sued, alleging failure to fully pay the compensation due him during his employment. The parties eventually settled; Baker paid Stevens $10,000. Around that time, Stevens formed S&S Chemical to produce polyethylene products. Baker suspected that S&S was improperly using Baker’s EP Processes and sent Stevens a letter in 2002 reminding Stevens of his Termination Agreement. Stevens responded that he had independently developed the processes used to manufacture S&S’s chemicals. Baker later confirmed that S&S was not then using Baker’s confidential information. Baker again became suspicious and, in 2014, sued Stevens. The Sixth Circuit affirmed judgment in favor of Stevens. Petrolite unquestionably knew of and approved each step that gave rise to the settlement contract at issue, the Release Provision of which unambiguously released Stevens from the obligations of the Termination Agreement. View "Baker Hughes Inc. v. S&S Chemical, LLC" on Justia Law

Plaintiff purchased a 2006 Chevrolet Cobalt from Car Source for $8,525.00. Plaintiff paid $1,248, using a grant from the state of Michigan. A salesman entered information from her most recent pay stubs and a recent bank statement into a computer program that incorrectly calculated that Plaintiff’s monthly income as $1,817.38. Plaintiff’s actual income was about $900 per month. It is not clear how the error occurred. Based on the incorrect estimate and her deposit, the APR on Plaintiff’s loan was set at 24.49%. Plaintiff signed an agreement. Days later she was notified that the terms had to be modified and returned to Car Source. Plaintiff claims that Car Source employees began “yelling and swearing” at her; removed her belongings from the Cobalt and “dumped them” at her feet; and stated that if she wanted her car back, she would have to make an additional payment of $1,500. Plaintiff refused to sign a new agreement and was never provided with written notice explaining why her credit arrangement had been or needed to be changed. The Sixth Circuit affirmed summary judgment that Car Source violated the Equal Credit Opportunity Act, 15 U.S.C. 1691, by changing the terms without providing a written notice with specific reasons. The court reversed the district court’s determination that injunctive relief was not available to Plaintiff under the ECOA and reversed summary judgment in favor of Defendants on Plaintiff’s statutory conversion claims. View "Tyson v. Sterling Rental, Inc." on Justia Law

In 2002, Deere became the exclusive North American wholesale supplier of Hitachi products. In 2014, Deere notified Rudd, a long-time authorized dealer of Hitachi equipment, of its intent to terminate its dealer agreements and initiated arbitration proceedings, as required by the agreement. Although Rudd agreed that arbitration was the proper forum, it sought injunctive relief to maintain the status quo during arbitration and moved to seal the case, stating that “the very fact of this lawsuit” could cause loss of customers, layoffs (or preemptive departure) of employees, and diminution of the value of Rudd’s financial investment. Two weeks later, the district court entered Rudd's proposed order, before Deere submitted a response. During an on-the-record telephonic status conference, the court asked the parties whether the case should remain under seal; Rudd’s counsel replied that it should, while Deere’s counsel was silent. The matter proceeded to an Agreed Order. The arbitration panel requested a copy of that Order, believing that it would obviate the need for an expedited hearing. Deere’s counsel forwarded the Order without consulting Rudd. Rudd moved for contempt . Deere moved to vacate the sealing order. The Sixth Circuit affirmed an order unsealing the case. Rudd cannot show any countervailing privacy interest sufficient to outweigh the strong presumption in favor of public access to federal court records View "Rudd Equip. Co., Inc. v. John Deere Constr. & Forestry Co." on Justia Law

For more than 40 years, participants in the Tennessee Valley Authority Retirement System (TVARS) received cost-of-living adjustments on top of their investment returns, pension benefits, and supplemental benefits. In 2009, with the system’s financial health in jeopardy, the TVARS board amended the rules that govern the system to cap or eliminate cost-of-living adjustments for the years 2010–2013, increase the eligibility age for cost-of-living adjustments, and lower the interest rate on a savings fund. The participants sued. None of their claims survived summary judgment. According to the district court, the plaintiffs did not have a private right of action to enforce the board’s compliance with the TVARS rules, and a Takings claim failed on the merits. The Sixth Circuit affirmed in part; cost-of-living adjustments are not vested, the agencies were also entitled to summary judgment on the merits of the claim that the board violated TVARS rules by reducing vested benefits. The court remanded remaining claims alleging violations of the TVARS rules because those claims are judicially reviewable in the context of this case. View "Duncan v. Muzyn" on Justia Law