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

Groups of hospitals in the Cincinnati area and in rural Iowa, challenged the Secretary of Health and Human Services’ calculation of how much to pay those hospitals for inpatient services under Medicare Part A. The hospitals objected to the agency’s decision to include in the calculation the hours associated with a short-term disability program paid from a hospital’s general funds through its payroll system and a program offering a full-time salary for part-time weekend work. The district court entered summary judgment for the Secretary. The Sixth Circuit affirmed, finding the agency’s interpretation was not arbitrary or capricious and referring to “the most completely impenetrable texts within human experience,” statutes and regulations that “one approaches ... at the level of specificity herein demanded with dread.” View "Atrium Medical Ctr. v. U.S. Dep't of Health & Human Servs." on Justia Law

Two Ohio counties brought a class action on behalf of a class of all Ohio counties against the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Housing Finance Agency, as bankruptcy conservator for both Fannie Mae and Freddie Mac. The counties sought unpaid real property transfer taxes under Ohio law. The agencies responded that they are exempt, under their federal charters, from such state taxes. The district court dismissed. The Sixth Circuit affirmed, holding that the real property transfer taxes at issue are encompassed in the statutory exemptions from all taxation. Real property transfer taxes are excise taxes rather than taxes on real property which are an exception to those tax exemptions. Congress had the power to enact the exemptions under the Commerce Clause, and the enactment does not violate any constitutional provision. View "Bd. of Comm'rs of Montgomery Cnty. v. Fed Hous. Fin. Agency" on Justia Law

In 2005 Detroit created not-for-profit corporations and issued debt instruments through those corporations, which passed the proceeds from sales of certificates on to the city, to fund pensions. The city covered the principal and interest payments. Some of the certificates had floating interest rates. To hedge that risk, the service corporations executed interest-rate swaps with banks. When interest rates fell below a threshold, the city had to pay the banks, which was offset by low interest rates owed to investors. If interest rates rose, the city would owe debtholders more interest, but received swap payments. Investors were unwilling to buy certificates and banks were unwilling to execute swaps unless an insurer guaranteed the obligations. Syncora insured the city’s obligations ($176 million in certificates; $100 million in swaps). A 2009 credit downgrade gave the banks the right to terminate the swaps and demand payment ($300 million). To avoid that, the city agreed (Syncora consented) to give the banks an optional early termination right, effectively ending the hedge protection, and established a “lockbox” system, under which the city would place excise taxes it receives from casinos into an account to be held until the city deposits its swap obligations (about $4 million per month). The agreement authorized the banks to “trap” the funds in the event of default or termination. In 2013 Syncora served notice that default had occurred. The city obtained a restraining order requiring release of the funds. The city filed for bankruptcy under Chapter 9 one week later. The bankruptcy court held that Syncora had no right to trap tax revenues, which were protected by the automatic stay under 11 U.S.C. 362(a)(3). The district court declined to consider an appeal, pending appeal of a determination that the city was an eligible debtor. The Sixth Circuit granted a petition for mandamus, requiring the court to rule. View "In re: Syncora Guar. Inc." on Justia Law

Daily Services, owned by Mason, provided short-term temporary employment services. Mason also owned I-Force, which provided longer-term temporary employment services. After losing coverage under the Ohio Bureau of Workers’ Compensation group insurance rating plan, I-Force unsuccessfully applied for self-insurance status. I-Force owed $3 million in premiums. Unable to make payments, I-Force closed. Daily acquired some of its customers and began offering longer-term temporary employment services. Ohio law provides the employer with notice and an opportunity to be heard before the Bureau may file a judgment or lien against it and allows the Bureau to deem one company the successor of another for purposes of an experience rating to calculate premiums, and, if an employer “wholly succeeds another in the operation of a business,” to transfer the obligation to pay unpaid premiums. The Bureau decided that Daily wholly succeeded I-Force, but did not provide notice of its assessment or an opportunity to be heard before it filed judgments and liens against Daily for more than $54 million. A state court vacated the judgments. The Bureau tried again and provided prior notice, but filed a lien before hearing an appeal. The court again vacated. The Bureau’s efforts to recover continue. Daily sued under 42 U.S.C. 1983, alleging violations of procedural due process. The district court concluded that the defendants were entitled to qualified immunity, recognizing that under the Supreme Court decision Parratt v. Taylor, a state may sometimes satisfy due process without providing notice or an opportunity to be heard pre-deprivation. The Sixth Circuit affirmed, holding that the Parratt doctrine does apply, and Daily did not plead that Ohio provided inadequate post- deprivation remedies . View "Daily Services, LLC v. Valentino" on Justia Law

Various Community Groups and the Detroit International Bridge Company sued the Federal Highway Administration (FHWA), challenging the Record of Decision (ROD) issued in 2009, selecting the Delray neighborhood of Detroit as the preferred location alternative for a new international bridge crossing between the U.S. and Canada. The Bridge Company owns and operates the existing Ambassador Bridge, about two miles from the proposed new crossing. The Bridge Company also owns property in the Delray neighborhood. The complaint alleged that selecting the Delray neighborhood as the preferred alternative violated the National Environmental Policy Act (NEPA); Section 4(f) of the Department of Transportation Act; Section 106 of the National Historic Preservation Act (NHPA); and “applicable legal authorities” on environmental justice, essentially because the decision was arbitrary and capricious.” The district court held that the Bridge Company had prudential standing to challenge the ROD and affirmed the ROD. The Sixth Circuit affirmed, noting extensive study of the project. View "Latin Ams. for Social & Econ. Dev. v. Adm'r of Fed. Highway Admin." on Justia Law

On January 13, 2009, Jackson was in a car accident with an agent of the Immigration and Customs Enforcement Agency (ICE) within the U.S. Department of Homeland Security (DHS). Jackson suffered damage to her head and spinal cord. Jackson retained the services of Shaffer, an attorney with the firm “Michigan Autolaw.” On March 5, 2009, Shaffer erroneously submitted Jackson’s administrative claim for Damage, Injury, or Death, to DHS, which forwarded Jackson’s claim to ICE. On June 17, ICE received Jackson’s claim. The cover letter listed Shaffer’s address in Southfield, Michigan. The claim form included Jackson’s mailing address. On July 7, ICE confirmed receipt of Jackson’s claim in correspondence, sent to the Southfield address, stating that ICE would process Jackson’s claim pursuant to the Federal Tort Claim Act, which allows an agency “up to six months to adjudicate a damage claim, beginning from the date the agency receives the claim.” On March 8, 2011, ICE sent to the Southfield address a “final determination” denying Jackson’s claim, stating that Jackson could file suit no later than six months after the date of mailing. On March 23, the Postal Service returned the denial as “Not Deliverable…Unable to Forward.” Autolaw had changed locations in May, 2010. Jackson contends that Autolaw had a one-year forwarding order for its mail. The parties also disagree whether the information about changing locations was conveyed to ICE. Despite receiving the undelivered mail, ICE took no further action. On January 11, 2012, Jackson filed suit. The district court dismissed, finding that the mailing of the denial letter triggered the six-month limitation and declining to apply equitable tolling. The Sixth Circuit affirmed. View "Jackson v. United States" on Justia Law

Pontiac has experienced significant economic difficulties. In 2011 Michigan’s Governor appointed Schimmel as Pontiac’s emergency manager under then-existing law (Public Act 4), in 2011, Schimmel modified the collective bargaining agreements of retired city employees and severance benefits, including pension benefits, for retirees not covered by collective bargaining agreements. Retired employees sued under the Contracts Clause, the Due Process Clause, and the Bankruptcy Clause. The district court denied an injunction. In 2013, the Sixth Circuit vacated and remanded for expedited consideration of state law issues. Michigan voters later rejected Public Act 4 by referendum. Following rehearing, en banc, the Sixth Circuit again vacated and remanded for consideration of whether, under section 903(1) of the Bankruptcy Code, Public Act 4 prescribed a method of composition of indebtedness that binds the retirees without their consent and, if so, whether principles of state sovereignty preclude application of section 903(1) in this case; whether the emergency manager’s orders were legislative acts under the Contract Clause; whether the reductions and eliminations of health care benefits were “necessary and reasonable” under the Contract Clause; whether the retirees’ procedural due process claim is viable; and, assuming the Due Process Clause’s procedural protections apply, whether the collective bargaining agreements, considered in their entireties, establish protected property rights. View "City of Pontiac Retired Emps. Ass'n v. Schimmel" on Justia Law

From 1998 to 2010, Dimora was one of three elected Cuyaho County commissioners. From 2005 to 2010, Gabor worked for the county weights-and-measures office, which inspects gas pumps, grocery store scanners, truck scales and the like for accuracy. In 2007, the FBI began investigating public corruption in Cuyahoga County and discovered that Dimora handed out public jobs, influenced Cleveland decision-makers and steered public contracts in return for about 100 bribes worth more than $250,000. Gabor bought his job for $5,000 and spent most of his time on errands for Dimora that were unrelated to the job, including acting as a go-between in arranging kickback schemes on county projects. When Gabor learned that the FBI was investigating him, he warned his co-conspirators about the investigation and tried to convince them to lie. After a 37-day trial, they were convicted of 39 violations of anti-corruption laws. The district court sentenced Dimora to 336 months in prison and Gabor to 121 months. The Sixth Circuit affirmed, rejecting challenges to a jury instruction for the RICO charge, 18 U.S.C. 1962(c), (d); to the sufficiency of the evidence; and to various evidentiary rulings. View "United States v. Dimora" on Justia Law

Cameron returned to Kentucky after serving as a Marine in Iraq and applied for VA Medical Benefits, but did not include verification of service (DD-214). Four months later, the VA verified his service, but its record did not reflect combat service or other eligibility; his status was “Rejected.” A week later, Cameron’s records were updated and he was retroactively enrolled. Cameron had been involved in killing a civilian family. His parents had contacted the Lexington VA mental health department and urged their son to seek help. Tiffany, his wife, told him that she and their baby would not continue to live with him unless he sought help. Days before his enrollment was corrected Cameron went to the Leestown VA. The intake clerk recognized that Cameron was in urgent need of help and talked to him for 40 minutes, despite not finding his enrollment. She concluded that Cameron was suicidal. No mental health professional was available at Leestown. She sent him to Cooper Drive VA. Cameron called his father later, stating that he had been turned away from Cooper Drive because he did not have his DD-214. Cameron drove home. He and Tiffany searched for the form. Cameron became frustrated and threatened Tiffany, who called 911. While on the phone, she heard a shot. Her husband had committed suicide. His family asserted claims under the Federal Tort Claims Act. The district court dismissed, holding that it did not have jurisdiction over a “benefits determination,” Veterans’ Judicial Review Act, 38 U.S.C. 511.The Sixth Circuit reversed. Whether the clinics had a duty to care for Cameron is an improper question for this stage. The government failed to show that the actions of the VA employees satisfied the test of the FTCA’s discretionary function exception. View "Anestis v. United States" on Justia Law

In 2003 the Social Security Administration denied DeLong’s applications for Disability Insurance Benefits. After each of three hearings, the ALJ concluded that DeLong was not disabled. After the third determination, the Appeals Council declined further review. In 2010, DeLong challenged the denial under 42 U.S.C. 405(g) and 1383(c)(3). The district court vacated and remanded, concluding that the ALJ had failed to provide ‘good reasons’ for the weight he gave to the opinions of treating physicians,” but rejected two other claims, noting that credibility determinations are peculiarly within the province of the ALJ, that the ALJ had not mischaracterized underlying medical evidence, and no error in the consideration of lay opinion evidence. DeLong sought attorney fees under the Equal Access to Justice Act, 28 U.S.C. 2412, contending that the denial of benefits and defense of the denial had lacked substantial justification. The district court denied the motion, reasoning that the agency’s position was substantially justified because the court had rejected all but one argument; DeLong had improperly attempted to present evidence in court that she had not presented to the ALJ; the record did not “strongly establish” entitlement to benefits; and the reversal was on procedural, not substantive, grounds. The Sixth Circuit affirmed. View "DeLong v. Comm'r of Social Sec." on Justia Law