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

The Randolph-Sheppard Act, 20 U.S.C. 107–107e, gives blind persons a priority in winning contracts to operate vending facilities on federal properties. Fort Campbell, Kentucky, operates a cafeteria for its soldiers. For about 20 years, Kentucky’s Office for the Blind (OFB) has helped blind vendors apply for and win the base’s contracts for various services. In 2012, the Army, the federal entity that operates Fort Campbell, published a solicitation, asking for bids to provide dining-facility-attendant services. Rather than doing so under the Act, as it had before, the Army issued this solicitation as a set aside for Small Business Administration Historically Underutilized Business Zones. OFB, representing its blind vendor, filed for arbitration under the Act, and, days later, filed suit, seeking to prevent the Army from awarding the contract. The district court held that it lacked jurisdiction to consider a request for a preliminary injunction. The Sixth Circuit vacated. OFB’s failure to seek and complete arbitration does not deprive the federal courts of jurisdiction. View "Commonwealth of Kentucky v. United States" on Justia Law

Southern Rehabilitation Group and its medical director sued the Secretary of Health and Human Services and past and present Medicare contractors, seeking review of the Secretary’s final decision on 6,200 claims for Medicare reimbursement. The district court remanded so that the Secretary could pay the disputed amount. After payment, the case returned to the district court, which concluded that the claims for payment were moot and dismissed remaining constitutional and statutory claims as barred by jurisdictional provisions of the Medicare Act. The court also held that plaintiffs did not show that they were eligible to collect interest on their claims and that it did not have jurisdiction over 8,900 other claims that plaintiffs alleged were still in the administrative process. The Sixth Circuit affirmed summary judgment to defendants on plaintiffs’ federal and state law claims and on the 8,900 claims still in the administrative process, but reversed summary judgment on plaintiffs’ claims for interest. The Secretary could not rely on her unreasonable interpretation of the “clean-claims” statute as a basis for summary judgment concerning interest. View "S. Rehab. Grp. v. Sec'y of Health & Human Servs." on Justia Law

Project labor agreements (PLAs) are used in the construction industry to set common conditions of employment for large projects involving multiple subcontractors and unions. On a public construction project, a PLA can be entered into by the governmental unit paying for the project or by its general contractor; the other party is a labor organization. If the governmental unit enters into a PLA, all contractors bidding on the project must agree to abide by it. Opponents argue that PLAs discourage nonunion contractors from bidding on government contracts and increase construction costs. Proponents, such as the trades councils, claim that PLAs enhance job-site cooperation and reduce labor disputes. The federal government has gone back and forth on allowing PLAs. Michigan passed the first version of the Fair and Open Competition in Governmental Construction Act in 2011, restricting the use of PLAs on publicly funded projects. Following entry of an injunction, that version was superseded by an amended act, passed in 2012. The district court enjoined the current version as preempted by the National Labor Relations Act. The Sixth Circuit reversed, finding that the act furthers Michigan’s proprietary goal of improving efficiency in public construction projects, and is no broader than necessary to meet those goals. View "MI Bldg. & Constr. Trades Council v. Snyder" on Justia Law

Greco worked at MetroHealth, a county-owned health-care provider in Cleveland, from 1997 until 2009, supervising independent contractors who worked on MetroHealth construction projects, selecting contractors for small-scale no-bid maintenance projects, and authorizing payment for their work. Greco used his authority to facilitate a bribery scheme set up by his boss and Patel, the vice-president of a construction company. The participants became nervous and Greco took action to hide his involvement in the scheme, but Patel contacted the government and confessed; in exchange for a reduced sentence, Patel provided detailed information about the scheme. Greco was convicted of bribery and conspiracy to commit bribery involving programs receiving federal funds (18 U.S.C. 666(a)(1)(B) and 371), violation of and conspiracy to violate the Hobbs Act (18 U.S.C. 1951), making false tax returns (26 U.S.C. 7206(1)), and conspiracy to commit mail fraud (18 U.S.C. 1349) and was sentenced to 112 months’ imprisonment and required to pay $994,734.84 in restitution to MetroHealth. The Sixth Circuit affirmed, rejecting arguments that the court improperly applied a 12-level enhancement based on an erroneous loss calculation; improperly applied a two-level enhancement for obstruction of justice; and imposed a substantively unreasonable sentence. View "United States v. Greco" on Justia Law

Like many Michigan municipalities, Pontiac has experienced significant economic difficulties, especially since 2008. Michigan’s Governor appointed Schimmel as Pontiac’s emergency manager. Acting under Michigan’s then-existing emergency manager law (Public Act 4), in 2011, Schimmel modified the collective bargaining agreements of Pontiac’s retired employees and modified severance benefits, including pension benefits, that Pontiac had given retirees not covered by collective bargaining agreements. The retired employees claim that Schimmel and Pontiac violated their rights under the Contracts Clause, the Due Process Clause, and the Bankruptcy Clause. The district court denied the retirees an injunction. The Sixth Circuit vacated and remanded for expedited consideration of state law issues. Michigan voters have since rejected Public Act 4 by referendum, which may have rendered Schimmel’s actions void.The court also questioned whether two-thirds of both houses of the Michigan Legislature voted to make Public Act 4 immediately effective. The court noted that similar issues face many Michigan municipalities. View "City of Pontiac Retired Emps. Ass'n v. Schimmel" on Justia Law

The Authority was formed under Ga. Code 46-4-82(a) to provide member municipalities with natural gas. It operates as a non-profit, distributing profits and losses to member municipalities: 64 in Georgia, two in Tennessee, 12 in other states. It pays its own operating expenses and judgments; it is exempt from state laws on financing and investment for state entities and has discretion over accumulation, investment, and management of its funds. It sets its governance rules; members elect leaders from among member municipalities. Smyrna, Tennessee has obtained gas from the Authority since 2000, using a pipeline that does not run through Georgia. The Authority entered a multi-year “hedge” contract for gas acquisition, setting price and volume through 2014, and passed the costs on. The market price of natural gas then fell due to increased hydraulic fracturing (fracking), but Smyrna was still paying the higher price. Smyrna sued for breach of contract, violations of the Tennessee Consumer Protection Act, breach of fiduciary duty, and unjust enrichment. The district court denied the Authority’s motion to dismiss based on sovereign immunity under Georgia law and the Eleventh Amendment. The Sixth Circuit affirmed, stating that the Authority’s claim that any entity referred to as a state “instrumentality” in a Georgia statute is entitled to state-law sovereign immunity “requires quite a stretch of the imagination.” View "Town of Smyrna, TN v. Mun. Gas Auth. of GA" on Justia Law

Triple A, a Michigan corporation, has offices in Dearborn, Michigan, the Congo (previously known as Zaire), and Sierra Leone. In 1993, Zaire ordered military equipment worth $14,070,000 from Triple A. A South Korean manufacturer shipped the equipment to Zaire at Triple A’s request. For 17 years, Triple A sought payment from Zaire and then the Congo without success. In 2010, Triple A sued the Congo for breach of contract. The district court dismissed the case, citing lack of jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1602. The Sixth Circuit affirmed, citing the language of the Act, under which federal courts have jurisdiction “in any case in which the action is based upon” the following: [1] a commercial activity carried on in the United States by the foreign state; or [2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. View "Triple A Int'l, Inc. v. Democratic Republic of the Congo" on Justia Law

Janosek owns a business that makes welded ring products. The business uses water to cool hydraulics used in the process. In or before 1999 Janosek installed closed loop water chillers that he hoped would recapture the water and significantly decrease water consumption. Instead of seeing a decrease in his water bills, Janosek continued to pay in excess of $150,000 a year until 2002, when the bills dropped to between $10,000 and $25,000 a year. Janosek suspected that he had been over-charged based on the Cleveland Water Department practice of estimating water consumption. Cleveland’s Moral Claims Commission, established to consider monetary claims that Cleveland is not legally obligated to pay, held a hearing, without notifying Janosek, and denied the claim. The district court dismissed Janosek’s case, finding that claims of unjust enrichment, taking without just compensation, and negligence were barred by the statute of limitations, and that a due process claim concerning the lack of notice failed because Janosek had not identified a valid property interest. The Sixth Circuit affirmed. Any legitimate property interest that Janosek had in the overpayments lapsed with the running of the limitations period. View "Janosek v. City of Cleveland" on Justia Law

Hill, Director of Risk Management for Detroit Public Schools invited Washington to submit a proposal for a wellness program for DPS employees. Washington and others joined Associates for Learning (A4L) and submitted a proposal quoting $150,000 for a pilot study. Contrary to DPS policy, Hill did not open competitive bidding or execute a written contract, and made payments by wire transfer, rather than by check. Hill, who later left DPS testified that he met with Washington to discuss larger amounts. Washington paid Hill five percent of the invoice amount for assistance in getting the invoices paid. Invoices totaling more than a million dollars for “future work” were paid. The partners met in public places to distribute cash. Washington was convicted of conspiracy to commit program fraud, 18 U.S.C. 371 and 666, and conspiracy to commit money laundering, 18 U.S.C. 1956. The district court enhanced Washington’s base offense level by 22 levels, finding that Washington was an “organizer or leader” and that the amount of loss to DPS was more than $2.5 million, and sentenced her to 84 months. The Sixth Circuit affirmed, finding that Washington was not prejudiced by errors made by counsel and that the evidence was sufficient. View "United States v. Washington" on Justia Law

Kentucky provided medical care to its poorest citizens through Medicaid (42 U.S.C. 1396-1) using a traditional fee-for-service model until 2011, when it transitioned to a managed-care program and awarded Coventry a contract to administer Medicaid services in southeastern Kentucky. Coventry entered into a temporary agreement with Appalachian, the dominant hospital care provider in that area, to provide members in-network hospital care and other services. Coventry soon realized it was losing money, partly because its network included Appalachian, whose patients, on average, were sicker and more expensive to treat. Coventry learned that its competitors were not required to contract with Appalachian and unsuccessfully sought an increase in payment rates. Coventry then noticed termination of Appalachian’s contract, which would have made thousands of Medicaid recipients unable to access healthcare providers at Appalachian’s facilities without first paying fees. Appalachian sued Coventry and state defendants. The district court required Coventry to keep Appalachian in its network for four months longer than the contract specified (until November 1, 2012) and denied Coventry’s motion to require Appalachian to post a security bond. The Sixth Circuit affirmed with respect to the bond and otherwise dismissed an appeal as moot because no recognized exception permits review of an expired injunction. View "Appalachian Reg'l Healthcare, Inc. v. Coventry Health & Life Ins. Co." on Justia Law