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

Okuno was working as an art director with a clothing company when she developed symptoms including vertigo, extreme headaches, memory loss, and abdominal pain. Though she had previously been diagnosed with fibromyalgia and degenerative disc disease, Okuno contends that these maladies had been “stable and well-controlled” for years and did not prevent her from working. After visits to multiple specialists, numerous tests, and two visits to the emergency room, Okuno was eventually diagnosed with narcolepsy, Crohn’s disease, and Sjogren’s syndrome, an autoimmune disease. After diagnosis, she struggled with negative drug interactions and the side effects associated with her many treatments. Unable to continue working, Okuno went on short-term disability and applied for benefits under her employer’s long-term disability plan, issued and administrated by Reliance. Reliance denied the application on the basis that depression and anxiety contributed to Okuno’s disabling conditions. After exhausting her administrative appeals, Okuno brought a claim under the Employee Retirement Income Security Act (ERISA). 29 U.S.C. 1132(a)(1)(B). The district court found in favor of Reliance on cross-motions for judgment on the administrative record. The Sixth Circuit reversed, reasoning that her physical ailments, including Crohn’s disease, narcolepsy, and Sjogren’s syndrome, are disabling when considered apart from any mental component. View "Okuno v. Reliance Standard Life Ins. Co." on Justia Law

Black drove a truck for Western, one of 48 freight service providers that carry raw paper to Dixie’s Bowling Green factory. Black parked the truck, containing 41,214 pounds of pulpboard rolls, separated by 10-lb. rubber mats. Black received permission from Chinn, the Dixie forklift operator, to enter the loading dock. It was “[c]ommon practice” for the truck driver to unload the rubber mats so that the Dixie forklift operator did not “have to get off each time.” Chinn and Black got “into a rhythm” in unloading the materials until Chinn ran over Black’s foot with the forklift, leading to a below-the-knee amputation of Black’s leg. Black received workers’ compensation from Western, then filed a tort action against Dixie, seeking $1,850,000. Following a remand, the district court denied Dixie summary judgment. The Sixth Circuit reversed, holding that the Kentucky Workers’ Compensation Act barred Black’s claims, Ky. Rev. Stat. 342.610(2), .690. The work Black was doing as part and parcel of what Dixie does; a worker injured in this setting will receive compensation regardless of fault by a company in Dixie’s shoes or one in Western’s shoes. The immunity from a further lawsuit applies as well. This burden and benefit are the trade-offs built into any workers’ compensation system. View "Black v. Dixie Consumer Prods., LLC" on Justia Law

In 2006, plaintiffs procured a mortgage from Regions to purchase a home near the Cumberland River. The National Flood Insurance Act (NFIA) requires mortgagors to obtain flood insurance for properties in flood zones, 42 U.S.C. 4012a(b)(1). CoreLogic provided Regions with flood-zone certification. The National Flood Insurance Program Flood Insurance Rate Map (FIRM) showed that the property was in a Special Flood Hazard Area (SFHA), but CoreLogic informed plaintiffs that their property was in a non-SFHA zone. FEMA issued a revised FIRM for the area months later. Regions informed plaintiffs that their home was in a flood zone and that they must procure flood insurance within 45 days. Plaintiffs hired Vandenbergh, who procured for them a Nationwide Standard Flood Insurance Policy for a home constructed before the effective FIRM. Plaintiffs’ home, built in 1984, after the 1981 FIRM, required a post-FIRM policy, under which they could receive full coverage only after obtaining an elevation certificate showing sufficient elevation above the base flood zone. A 2010 flood submerged plaintiffs’ home in 16” of water. Nationwide informed plaintiffs of pre-/post-FIRM discrepancy and required an elevation certificate, which showed that the home’s lower level was below the base flood-zone elevation. Because plaintiffs’ home was post-FIRM and situated below the base flood-zone elevation, their SFIP did not cover all losses “below the lowest elevated floor.” FEMA upheld Nationwide’s coverage determination. The Sixth Circuit affirmed partial summary judgment for Vandenbergh, but vacated dismissal of claims against Regions, CoreLogic, and Nationwide. The NFIA did not preempt state-law claims arising from procurement of the SFIP: that plaintiffs would not have purchased their home absent defendants’ negligence and breach of fiduciary duty. View "Harris v. Nationwide Mut. Fire Ins." on Justia Law

Construction Contractors (CC), was formed to perform employment functions for regional construction employers, who would transfer funds into CC’s accounts to cover gross payroll, taxes, benefits, and administrative costs. CC would disburse the funds to satisfy subscribers’ obligations. In 2002, CC outsourced its daily operations to AlphaCare. In 2012, AlphaCare informed CC that there were insufficient assets to meet obligations, although the subscribers had paid enough money to fulfill their respective obligations. An AlphaCare manager (Moon) had been falsifying financial statements. CC terminated its agreement with AlphaCare. An investigation revealed that the IRS had started levying CC accounts in 2011. CC owed more than $1.25 million, plus penalties, in unpaid taxes dating back to 2005. AlphaCare had also failed to remit $715,000 in Ohio unemployment taxes for the first quarter of 2012.CC’s CFO, VanDenBerghe, determined that Moon had committed wire fraud by transferring over $900,000 from CC’s account to AlphaCare’s account from 2009-2012. VanDenBerghe continued investigating; about $1 million was still missing. CC applied for a crime-coverage insurance policy, with coverage for employee theft, from Federal Insurance. After Federal executed the policy, CC determined that Moon had misappropriated the missing $1 million. Federal denied CC’s claim for that loss. The Sixth Circuit affirmed summary judgment in favor of Federal, concluding that any loss caused by one employee is considered a “single loss” under the policy and that CC had “discovered” the loss before the execution of the policy. View "Constr. Contractors Employers Group, LLC v. Fed. Ins. Co." on Justia Law

Harrogate, a healthcare provider, participates in Blue Cross networks. Harrogate’s patients sign an “Assignment of Benefits,” allowing Harrogate to bill Blue Cross directly for services. The Provider Agreement allows Blue Cross to perform post-payment audits and recoup overpayments from Harrogate. Blue Cross paid Harrogate's claims for antigen leukocyte cellular antibody (ALCAT) tests, which purport to identify certain food allergies. Blue Cross claims that these tests have “little or no scientific rationale.” Investigational treatments are not “covered, compensable services” under Blue Cross’s Manual, which is incorporated by reference into the Provider Agreement. That Agreement also specifies that Harrogate may not “back-bill” patients for un-reimbursed, investigational treatments unless, before rendering such services, “the Provider has entered into a procedure-specific written agreement with the Member, which has advised the Member of his/her payment responsibilities.” Blue Cross began recouping ALCAT payments. Harrogate filed suit under the Employee Retirement Income Security Act. The district court dismissed, holding that Harrogate did not meet the statutory definition of “beneficiary” and had not received a valid assignment for the purpose of conferring derivative standing to bring suit under ERISA. The Seventh Circuit affirmed. While Harrogate had derivative standing through an assignment of benefits, its claim regarding recoupments falls outside the scope of that assignment. View "Brown v. BlueCross BlueShield of Tenn., Inc." on Justia Law

Blue Cross controls more than 60% of the Michigan commercial health insurance market; its patients are more profitable for hospitals than are patients insured by Medicare or Medicaid. BC enjoys “extraordinary market power.” The Justice Department (DOJ) claimed that BC used that power to require MFN agreements: BC would raise its reimbursement rates for services, if a hospital agreed to charge other commercial insurers rates at least as high as charged to BC. BC obtained MFN agreements with 40 hospitals and MFN-plus agreements with 22 hospital systems. Under MFN-plus, the greater the spread between BC's rates and the minimum rates for other insurers, the higher the rates that BC would pay. Class actions, (consolidated) followed the government’s complaint, alleging damages of more than $13.7 billion, and seeking treble damages under the Sherman Act, 15 U.S.C 15. In 2013, Michigan banned MFN clauses; DOJ dismissed its suit. During discovery in the private actions, plaintiffs hired an antitrust expert, Leitzinger. BC moved to exclude Leitzinger’s report and testimony. Materials relating to that motion and to class certification were filed under seal, although the report does not discuss patient information. BC agreed to pay $30 million, about one-quarter of Leitzinger's estimate, into a settlement fund and not to oppose requests for fees, costs, and named-plaintiff “incentive awards,” within specified limits. After these deductions, $14,661,560 would be allocated among three-to-seven-million class members. Class members who sought to examine the court record or the bases for the settlement found that most key documents were heavily redacted or sealed. The court approved the settlement and denied the objecting class members’ motion to intervene. The Seventh Circuit vacated, stating that the court compounded its error in sealing the documents when it approved the settlement without meaningful scrutiny of its fairness to unnamed class members . View "Shane Group, Inc. v. Blue Cross Blue Shield of Mich." on Justia Law

Waskiewicsz suffers from type-1 diabetes, major depression, and gender identity disorder She worked as a product design engineer for Ford from 1990 until October, 2010, when she suffered “a debilitating emotional breakdown.” In December, after her father found her barricaded in her house, she sought long-term disability benefits under Ford’s Plan, governed by the Employment Retirement Income Security Act, 29 U.S.C. 1001. Under the plan: An Active Employee whose employment is terminated . . . shall cease to be eligible for Benefits as of the earlier of: (a) the date the Employee has been notified; or (b) the day prior to the date of such termination (in the case of retroactive terminations) . .... An employee is required to notify the Claim Processor ... if the employee is absent for more than five (5) consecutive Workdays.” She did not give notice within the five-day period and was, apparently, terminated in the interim. UniCare concluded that she did not qualify for benefits. The Sixth Circuit reversed. On remand, Waskiewicz must be given the opportunity to show that her alleged failure to comply with the requirements of the Plan was due to the very disability for which she seeks benefits. View "Waskiewicz v. UniCare Life & Health Ins. Co." on Justia Law

Max Trucking transports freight throughout the United States, maintaining a staff of six dispatchers at its Michigan headquarters. The dispatchers find jobs on websites and contact one of 76 truck drivers, including about 20 drivers based in Michigan, to offer the load to that driver. The Michigan Worker’s Disability Compensation Act (WDCA) requires employers to maintain worker’s compensation insurance coverage for their employees. Liberty Mutual issued Max a policy, which it renewed annually for several years. In 2011, Liberty audited Max and determined that 16–18 Michigan-based drivers, who leased trucks from Max through a lease-to-buy program, were employees, not independent contractors, and increased Max’s policy premium. Max has not paid the premium increase and sought a declaratory judgment that drivers operating under the lease-to-buy program are not employees but are independent contractors under the WDCA. Liberty filed a counterclaim, seeking unpaid premiums totaling $101,592. The Sixth Circuit affirmed judgment in favor of Liberty Mutual, agreeing that the truckers are employees, despite evidence that that they may decline to work, can incur a financial loss, made a significant financial investment in the vehicle purchase, and receive all tax deductions and depreciation of the vehicles on their personal tax returns. View "Max Trucking, LLC v. Liberty Mut. Ins. Corp." on Justia Law

The NEI Board administers a self-funded, multi-employer health plan covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. A Trust Agreement, executed by the participating companies and the Board, does not specify Plan details, but provides that “[t]he detailed basis on which payment of benefits is to be made … shall be set forth in the Plan of Welfare Benefits … subject to amendment by the Trustees.” The National Elevator Industry Health Benefit Plan Summary Plan Description, (SPD) provides the details and includes a subrogation provision: The Plan has the right to recover benefits advanced to a covered person for expenses or losses caused by another party. The Plan is only obligated to provide covered benefits resulting from that illness or injury that exceed amounts recovered from another party (regardless of whether designated to cover medical expenses). The Plan sought reimbursement for medical expenses paid on Moore’s behalf, following Moore’s settlement of a negligence action against entities responsible for injuries he suffered in an accident. Moore counterclaimed, alleging that the Board had violated its fiduciary duty by misrepresenting the Plan terms. The Sixth Circuit found that the SPD containing the subrogation provision set out the binding terms of the Plan and that the plain language of the provision required reimbursement. View "Bd. of Trustees v. Moore" on Justia Law

When the plant closed, plaintiffs retired under a collective bargaining agreement (CBA) that provided that the employer would continue health insurance and that coverage an employee had at the time of retirement or termination at age 65 or older (other than discharge for cause) “shall be continued thereafter provided that suitable arrangements for such continuation[] can be made… In the event… benefits … [are] not practicable … the Company in agreement with the Union will provide new benefits and/or coverages as closely related as possible and of equivalent value." In 2011 TRW (employer’s successor) stated that it would discontinue group health care coverage beginning in 2012, but would be providing “Health Reimbursement Accounts” (HRAs) and would make a one-time contribution of $15,000 for each eligible retiree and eligible spouse in 2012 and, in 2013, would provide a $4,800 credit to the HRAs for each eligible party. TRW did not commit to funding beyond 2013. Plaintiffs sued, claiming that the change violated the Labor-Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. The court entered summary judgment, ruling that the CBAs established a commitment to lifetime health care benefits. The Sixth Circuit affirmed, but subsequently vacated and remanded for reconsideration in light of the Supreme Court’s 2015 decision in M & G Polymers. View "United Steel v. Kelsey-Hayes Co." on Justia Law