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

The center provided care for children of low-income parents and sought license renewal in 2005. The application remained pending for 15 months. During that period, the state agency, ODJFS, reduced its capacity from 88 to 38 children. The agency responsible for funding under Title XX, which provides government assistance for child care, 42 U.S.C. 1397, discontinued public assistance for its services, based on a proposed adjudication, which would reject the renewal application based on alleged improper use of physical discipline and failure to adequately ensure that employees did not have disqualifying criminal convictions. While the matter was pending, the center experienced difficulty with third-party contracts, including liability insurance and workers compensation renewal certification, and went out of business. The center sued under 42 U.S.C. 1983 and state law, claiming tortious interference with business relationships, based on racial animus. After the center also filed in the Ohio Court of Claims, the district court dismissed the claims against ODJFS. The center continued to amend its federal pleadings, including addition of an antitrust claim, but the claims were ultimately dismissed. The Sixth Circuit affirmed, finding that any unwaived claims were barred by the Local Government Antitrust Act.

V&M filed suit against Centimark alleging breach of contract and negligence after metal roof sheeting panels being installed at its steelwork facility fell into an electrical substation, causing loss of power for more than 30 hours. Damages for repairs and lost profits were around $3 million The district court granted Centimark summary judgment, ruling that V&M failed to produce sufficient evidence of causation to sustain either legal claim. The Sixth Circuit reversed and remanded, holding that genuine issues of material fact exist.

Plaintiffs were catastrophically injured in automobile accidents. All sustained traumatic brain injuries and are now mentally impaired. State Farm initially paid no-fault insurance benefits for the cost of attendant care services rendered at home, but reduced the rates on the basis of market surveys of the cost of the services. State Farm refused to raise the rates because it could not verify whether plaintiffs had received the type of care that would justify paying higher rates. Plaintiffs refused to submit documentation regarding the nature and extent of the care they were receiving. Plaintiffs sued. The district court awarded plaintiffs monetary sanctions, instead of default judgment, in response to State Farm’s violation of discovery orders. A jury rendered a verdict in State Farm’s Favor. The Sixth Circuit dismissed appeal regarding the discovery sanctions, for lack of jurisdiction, but otherwise affirmed.

In addition to about $4 million invested through his family corporation, Nonneman personally invested about $15 million in OKO for domestic oil and gas exploration, although he had no experience in such businesses, was showing signs of dementia, and suffered disabilities. In 2003, Nolfi assumed management of Nonneman’s affairs and it was apparent that the OKO investments would yield no returns. Of 128 wells, only 11 produced oil, and did not produce enough to recoup the investment. Nolfi filed suit in Ohio state court and learned facts that gave rise to federal and state securities claims. He filed in federal court, alleging violations of the Securities Act of 1933, 15 U.S.C. 78j(b) and 77l(a)(1); violations of the Ohio Blue Sky laws by the sale of unregistered securities; federal securities fraud; misrepresentation; common law fraud; breach of fiduciary duties; and breach of contract. The cases were consolidated and, after complicated rulings concerning limitations periods, the district court entered judgment for Nonneman. Despite having stated rescissory damages as more than $7 million, the jury only listed an award of $1,777,909 on its verdict form. The court held that plaintiffs had waived their right to challenge the verdict. Sixth Circuit affirmed.

Nonneman, acting through Fencorp, a family investment corporation, invested $3,980,345.50 in OKO for domestic oil and gas exploration, although he had no experience in such businesses, was showing signs of dementia, and suffered disabilities. In 2003, Nolfi assumed management of Nonneman’s affairs and it was apparent that the OKO investments would yield no returns. Of 128 wells, only 11 produced oil, and did not produce enough to recoup the investment. Nolfi filed suit in Ohio state court. During discovery plaintiffs learned facts indicating federal and state securities violations and filed in federal court, alleging violations of the Securities Act of 1933, 15 U.S.C. 77l(a)(1); violations of the Ohio Blue Sky laws by the sale of unregistered securities; federal securities fraud; common law fraud; misrepresentation; breach of fiduciary duties; and breach of contract. After a complicated set of rulings, the district court awarded Fencorp $1,012,835.50, the maximum not barred by the statute of repose. The Sixth Circuit affirmed in part, upholding rulings concerning the statute of repose, but setting aside the verdict on the state common law fraud claim and directing reinstatement of the verdict on the federal securities claim ($847,858).

The collective bargaining agreement was scheduled to expire. During negotiations, the union disclaimed representation of the company's employees and terminated the collective bargaining process. The company then withdrew from the multiemployer pension plan. The pension fund imposed withdrawal liability and assessed $57,291.50, 29 U.S.C. 1399. The company demanded indemnification from the union pursuant to the collective bargaining agreement, which stated: "The Union shall indemnify the Company for any contingent liability which may be imposed under the Multiemployer Pension Plan Amendments Act of 1980." The district court concluded that an arbitration provision was enforceable. The arbitrator ordered the union to pay. The district court upheld the award. The Sixth Circuit affirmed, rejecting an argument that it would violate public policy for a union to indemnify an employer for any contingent liability to a pension plan established under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1381-1461.

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.

Dorn Sprinkler, formed in 1977 and operated by its owner, David, failed to contribute to benefit funds required by its collective bargaining agreement for three months in 2006-2007. Employees organized a work stoppage. Sprinkler went out of business with its required contributions still unpaid. David’s son, Christopher, lead salesman at Sprinkler, had formed a company called Dorn Fire Protection during the 1990s but had not started doing business. Shortly before financial troubles at his father's business, Christopher began operations. The Union submitted a request to arbitrate to Fire Protection under the theory that it is an alter ego of Sprinkler. Fire Protection refused. The district court, finding that Fire Protection is not an alter ego of Sprinkler, granted summary judgment to defendants. The Sixth Circuit affirmed. The management structures at the companies were not substantially identical; there was no substantial continuity in employees, customers or equipment. There was no proof of intent to avoid the bargaining agreement.

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.

Defendant, a Russian citizen, attended graduate school and owns real property, vehicles, and bank accounts in Ohio. He spends some time in Ohio each year, ranging from 40 days in 2007 to a total of 17 days in 2008–2009. He visits under a tourist visa and does not have an Ohio driver's license. After going to Russia to take part in a business venture with defendant, plaintiff filed suit in Ohio. The contract had no connection to the state. The trial court dismissed for lack of personal jurisdiction, noting that defendant was not served with process in a manner that automatically confers personal jurisdiction. The Sixth Circuit affirmed, finding that notions of fair play and substantial justice weigh against jurisdiction in Ohio. The court quoted a Russian proverb, “If you’re afraid of wolves, don’t go into the forest” that could be read, “If you’re afraid of the Russian legal system, don't do business in Russia.”