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

From 1983-2005, Moen entered into collective bargaining agreements (CBAs) with the union. Employees who retired 1983-1996 and their dependents received hospitalization, surgical and medical coverage without cost. If the retirees (or spouses) were over age 65, Moen also reimbursed the full cost of Medicare Part B premiums. After 1996, retirees and dependents received hospitalization, surgical, and medical coverage upon payment of a co-premium frozen at the time of retirement. If over 65, they received Part B premium reimbursements at specified rates. In 2008, Moen shut down its Elyria operations. A “Closure Effects Agreement” provided that health-care coverage “shall continue” for retirees and spouses “under the [final] Collective Bargaining Agreement.” In 2013, Moen decreased benefits in response to “recent Medicare improvements” and the imposition of an excise tax on “Cadillac plans” through the Patient Protection and Affordable Care Act, 26 U.S.C. 4980I. Medicare-eligible retirees no longer receive coverage or Part B premium reimbursements; Moen shifted non-Medicare-eligible retirees to a plan that requires higher out-of-pocket payments. The court certified a class of about 200 individuals who had retired from the plant and were not covered by an earlier settlement agreement, then granted the plaintiffs summary judgment in reliance on Sixth Circuit precedent that was subsequently repudiated by the Supreme Court. The Sixth Circuit reversed, based on that 2015 decision. View "Gallo v. Moen Inc." on Justia Law

Over the course of seven years, Circle C, a contractor that built 42 warehouses at Fort Campbell Army base, paid some electricians about $9,900 less than the Davis-Bacon (40 U.S.C. 3142) wages specified in its contract with the Army. The government obtained a damages award of $763,000 under the False Claims Act, 31 U.S.C. 3729, arguing that all of the electrical work was “tainted” by the $9,900 underpayment and, therefore, worthless. The Sixth Circuit, reversed the damage award and remanded for entry of an award of $14,748. Actual damages are the difference in value between what the government bargained for and what the government received. The government bargained for the buildings and payment of Davis-Bacon wages. It got the buildings but not quite all of the wages. The shortfall was $9,916--the government’s actual damages. That amount tripled is $29,748 (31 U.S.C. 3729(a)(1)(G)). Minus a $15,000 settlement payment, Circle C is liable for a total of $14,748. View "Wall v. Circle C Constr., LLC" on Justia Law

Retirees, dependents of retirees, and the union filed a class action suit against the retirees’ former employer, M&G, after M&G announced that the plaintiffs would be required to make health care contributions. The district court found M&G liable for violating a labor agreement and an employee welfare benefit plan and ordered reinstatement to the versions of the benefits plans they were enrolled in until 2007, to receive health care for life without contributions. The Sixth Circuit affirmed. On remand, the Supreme Court directed the court to construe the parties’ agreements using “ordinary principles of contract law.” The Sixth Circuit remanded to the district court because prior factual determinations as to the parties’ agreements were made in the “shadow of Yard-Man,” a Sixth Circuit decision abrogated by the Supreme Court. View "Hobert Tackett v. M&G Polymers USA, LLC" on Justia Law

Five multi-employer fringe benefit funds of the Plumbers, Pipe Fitters & Mechanical Equipment Service, Local Union 392, sued to collect delinquent employee fringe benefit contributions from B&B, an Ohio commercial plumbing contractor. The Funds were established for the benefit of contractors’ employees who perform work under a collective bargaining agreement (CBA) negotiated between the Union and the Mechanical Contractors Association as agent for its member employers. During discovery, the Funds were unable to produce a copy of the CBA that was signed by B&B. B&B argued that the Funds had failed to produce proof that B&B’s principal independently signed the CBA, and that B&B had made 10 years of contributions on a voluntary basis. The Sixth Circuit reversed summary judgment in favor of B&B, concluding as a matter of law that B&B entered written agreements setting out its obligation to contribute as required by the Labor Management Relations Act 302(c)(5)(B) and is bound to pay delinquent contributions that are owed to the Funds in accordance with the terms of the CBA and the trust agreements. View "Bd. of Trs. Local 392 v. B&B Mech. Servs." on Justia Law

For some time, Broad Street Energy has owned many Ohio oil-and-gas leases. The market has changed to use of shale-drilling (fracking) to extract oil and gas from shale formations deeper than the formations from which Broad Street has extracted oil. Fracking requires leases of at least 640 acres, as opposed to the 20-to-40-acre leases that Broad Street required for conventional wells. Endeavor agreed to pay $35 million for many of Broad Street’s leases, plus wells, pipelines, and related property. Endeavor put $3.5 million in escrow. Broad Street delivered a list of assets and title limitations. Before closing, Endeavor conducted due diligence and told Broad Street that it found title defects affecting 40% of the leases and reducing the value of the assets by 55%. Endeavor did not seek more information or invoke the agreement’s dispute-resolution process, but terminated on the ground that the title defects reduced value by at least 30%. Broad Street responded several times, disputing those statements and insisting on at least implementing dispute-resolution procedures With no response, it sued. A jury awarded Broad Street the $3.5 million escrow, plus interest. The Sixth Circuit affirmed, noting the relative sophistication of the parties and that the contract did not permit Endeavor to terminate unilaterally based on its own assessment of title defects and their value. View "Broad St. Energy Co. v. Endeavor Ohio, LLC" on Justia Law

Exel, a shipping broker, sued SRT, an interstate motor carrier, after SRT lost a shipment of pharmaceutical products it had agreed to transport for Exel on behalf of Exel’s client, Sandoz. On summary judgment, the district court awarded Exel the replacement value of the lost goods pursuant to the transportation contract between Exel and SRT, rejecting SRT’s argument that its liability was limited under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706. The Sixth Circuit reversed. Whether SRT had limited its liability was a question of fact for a jury. To limit its liability under the Carmack Amendment, a carrier must: provide the shipper with a fair opportunity to choose between two or more levels of liability obtain the shipper’s written agreement as to its choice of liability; and issue a receipt or bill of lading prior to moving the shipment. SRT did not meet its burden on summary judgment of establishing that it provided Sandoz with the opportunity to choose between two or more levels of liability. SRT did not explain what “classification or tariff . . . govern[ed]” the shipment, nor indicate whether it made this information available to Sandoz. View "Exel, Inc. v. S. Refrigerated Transp., Inc." on Justia Law

Slusher, an orthopedic surgeon and military reservist, worked at Heritage, a small hospital in Shelbyville, Tennessee, through a staffing service, on 30-day assignments beginning on July 20, 2010. Slusher was offered, but did not accept, a permanent position. He agreed to a one-year contract in January 2011, which could be terminated by either party for any reason upon 90 days’ notice or by Heritage, effective immediately, with 90 days’ pay instead of notice. It did not provide for renewal or extension. Heritage knew that he could be called up for deployment. On May 4, 2011, Slusher received orders. Before Slusher’s deployment, Heritage informed him that it had interviewed another physician for the orthopedic surgeon position. Heritage granted Slusher military leave. He reported for active duty on June 10. While he was in Iraq, Heritage informed Slusher that it was nearing a contract with Mosley. Slusher later signed a termination agreement, specifying that his employment would end on October 26. Slusher returned to Heritage, where Mosley had begun working, on October 3, and worked there until October 26, 2011. Slusher filed a complaint with the Veterans’ Employment and Training Service. After the Department of Labor closed its investigation, Slusher filed suit, claiming discrimination under and violation of the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301-35 and breach of contract. The Sixth Circuit affirmed summary judgment in favor of the defendants on each claim. View "Slusher v. Shelbyville Hosp. Corp." on Justia Law

Plaintiffs received internet and cable services from TWC in Chardon, Ohio. The Bureau of Criminal Investigation (BCI), conducting an online investigation to identify individuals possessing and sharing child pornography, located a suspect using a public IP address of 173.88.218.170 and found images and movie files titled consistent with child pornography. The IP address of plaintiffs’ computers was 173.88.218.70. Responding to a subpoena for subscriber information for the .170 address, TWC indicated that it was assigned to plaintiffs. While executing a search warrant for plaintiffs’ residence, BCI agents determined that the IP address assigned to plaintiffs was the .70 address, not the .170 address. The search was terminated without discovery of any evidence of criminal activity. Plaintiffs alleged that the search was extensive, destructive, and in plain sight of neighbors; that TWC’s conduct was intentional and fraudulent; that disclosure of their subscriber information without authorization violated the Stored Communications Act, 18 U.S.C. 2707(a)); and state-law claims. The Sixth Circuit affirmed denial of TWC’s claim of immunity under section 2703(e), but found that 18 U.S.C. 2707(e)’s “good faith reliance” defense barred the claims and that the state-law claims failed because the factual allegations were insufficient to establish that TWC disclosed the information intentionally, wrongfully, or in breach of contract. View "Long v. Insight Commc'ns of Cent. Ohio, LLC" on Justia Law

MERV, an LLC formed to purchase and operate an antique mall, encountered difficulties paying its mortgage loan and entered into a forbearance agreement with the Bank. MERV later defaulted and filed a Chapter 11 Bankruptcy Petition. Although a plan of reorganization was confirmed, MERV again defaulted. The Bank foreclosed its mortgage on the property. Before the bankruptcy case closed, MERV retained special counsel and filed an adversary proceeding against some of its founders and the Bank. The claims against the Bank alleged breach of contract, “facilitation of fraud and theft”, and equitable subordination of the Bank’s claim. MERV sought punitive damages. The bankruptcy court granted summary judgment, agreeing with the Bank that MERV had executed a release of all of the claims as part of the forbearance agreement. The Sixth Circuit Bankruptcy Appellate Panel affirmed, finding that the Bank offered prima facie evidence of a complete affirmative defense to the complaint by showing that MERV executed a Release of all claims. MERV did not demonstrate a genuine issue of material fact as to the validity of that Release. MERV did not file a motion or a Rule 56(d) affidavit or declaration with the bankruptcy court requesting more time for discovery. View "In re: MERV Props., LLC" on Justia Law

Best designs and markets exit signs and emergency lighting. Pace manufactured products to Best’s specifications. Best’s founder taught Pace how to manufacture the necessary tooling. There was no contract prohibiting Pace from competing with Best. By 2004, Best was aware that Pace was selling products identical to those it made for Best to Best’s established customers. Several other problems arose between the companies. When they ended the relationship, Pace was in possession of all of the tooling used to manufacture Best’s products and the cloned products, and Best owed Pace almost $900,000 for products delivered. Pace filed a breach of contract suit. Best requested a setoff of damages for breach of warranty and counterclaimed for breach of contract, tortious interference, misappropriation of trade secrets, conversion, and fraud. Pace claimed that Best had misappropriated Pace’s trade secrets and had tortiously interfered with Pace’s contracts. The district court found that Best had breached its contractual obligations by failing to pay, but that Pace was liable for breach of warranties, breach of contract, tortious interference, misappropriation of trade secrets, conversion, and false designation of origin and false advertising under the Lanham Act. The Sixth Circuit affirmed that Pace is liable for breach of contract and tortious interference, but reversed or vacated as to the trade secrets, Lanham Act, conversion, and warranties claims. View "Kehoe Component Sales Inc. v. Best Lighting Prods., Inc." on Justia Law