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

Some of Kaplan’s students obtain financial aid through the U.S. Department of Education. Some Kaplan employees have access to those students’ financial information. About 10 years ago, Kaplan discovered that some financial-aid officers had stolen students’ payments and that some of its executives had engaged in self-dealing, using relatives as vendors. Kaplan implemented measures to prevent abuses, including credit checks on applicants for senior-executive positions and positions with access to company financials, cash, or access to student financial-aid information. Reports include whether: an applicant has ever filed for bankruptcy, is delinquent on child-support, has any garnishments, has outstanding judgments exceeding $2,000, or has a social-security number inconsistent with what the credit bureau has on file. The report does not note the applicant’s race. When the EEOC sued Kaplan, alleging disparate impact on African-Americans, under Title VII of the Civil Rights Act, 42 U.S.C. 2000e-2(a)(1), (a)(2), (k), EEOC relied on statistical data compiled by Murphy, who holds a doctorate in industrial and organizational psychology. The district court excluded Murphy’s testimony as unreliable. The Sixth Circuit affirmed, noting that the EEOC uses the same criteria for hiring. EEOC presented no evidence that Murphy’s methodology, which involved Murphy looking at copies of drivers’ licenses to determine race, satisfied any of the factors that courts consider in determining reliability under Federal Rule of Evidence 702. Murphy himself admitted his sample was not representative of Kaplan’s applicant pool as a whole. View "Equal Emp't Opportunity Comm'n v. Kaplan Higher Educ. Corp." on Justia Law

A contract for reinsurance between National and Meadowbrook required both parties to submit any reinsurance disputes to a three-member arbitration panel to be comprised of “two arbitrators and an umpire” who were “active or retired disinterested officials of the insurance or reinsurance companies, or Underwriters at Lloyd’s, London, not under the control of either party.” After Meadowbrook initiated arbitration, National named Rosen and Meadowbrook named Schlaybaugh as arbitrators. They deadlocked in selecting an umpire, exchanged slates of candidates, and chose Greene, who disclosed that he was a personal friend of Rosen and that both were members of the reinsurance industry group The panel adopted orders that, “Ex parte communications with any member of the Panel shall cease upon the filing of the parties’ initial pre-hearing briefs.” The panel issued a unanimous Interim Final Award, resolving issues of liability in favor of National, but did not calculate a final damages award at that time. Rosen resumed ex parte communications and National disclosed those communications. After the panel rejected Meadowbrook’s submissions concerning damages, Meadowbrook claimed that it had disenfranchised Schlaybaugh. National claimed that a swift decision was needed, that Schlaybaugh was on vacation and could not be reached, and that his participation would have made no difference. The district court enjoined proceedings. The Sixth Circuit reversed, noting that judicial review of arbitral decisions is narrow and deferential. View "Savers Prop. & Cas. Ins. Co. v. Nat'l Union Fire Ins. Co." on Justia Law

In 2009, Kamper, Head, and St. Onge began to manufacture and distribute MDMA (ecstacy) in Chattanooga. Kamper first proposed the idea of dealing drugs, supplied start-up funds, and ensured that the process stayed “on an even keel.” Head had access to chemicals through his laboratory job at a water treatment facility, and used his chemistry training to devise a method of producing MDMA from the sassafras plant. St. Onge used his experience dealing other drugs to organize a distribution network among deejays and others involved in the “rave scene.” They initially manufactured MDMA at Kamper’s home, but they later relocated to Georgia. After they sold drugs to a confidential informant, St. Onge cooperated with authorities. Kamper and Head appealed their 144-month sentences as unreasonable. Kamper also argued that the MDMA-to-marijuana equivalency ratio underlying his Guidelines sentencing range was based on faulty science, and that the court erred when it justified its refusal to reject the ratio with institutional concerns. The Sixth Circuit affirmed with respect to Kamper. The district court misunderstood its authority to reject and replace a Guidelines equivalency ratio based on policy disagreements, but the error was harmless. The court vacated Head’s sentence because the district court erred in applying a sentencing enhancement for obstruction of justice.View "United States v. Head" on Justia Law

In 2007, Marion County sheriff’s officers found individuals in possession of “ice” methamphetamine during traffic stops. An investigation began, including controlled purchases of methamphetamine by a confidential informant, and led to indictments charging 39 individuals with a methamphetamine conspiracy and associated drug and firearms offenses. Pritchett, Johnson, Rollins and Coffelt, went to trial and were found guilty of conspiracy to manufacture and distribute methamphetamine and conspiracy to possess a listed chemical (pseudoephedrine and iodine) with knowledge that the chemical would be used to manufacture methamphetamine. Pritchett, Rollins and Coffelt were also convicted of associated offenses. Pritchett and Coffelt, were found responsible for 50 grams or more of methamphetamine (actual) or 500 grams or more of a mixture containing methamphetamine. Rollins and Johnson were found responsible for conspiracy concerning five grams of methamphetamine (actual) or 50 grams of a mixture containing methamphetamine. Pritchett was sentenced to 240 months in prison; Rollins was sentenced to 360 months; Johnson was sentenced to 97 months; and Coffelt was sentenced to 240 months. The Sixth Circuit affirmed, rejecting challenges: to sentencing enhancement based on prior drug offenses; alleging constructive variance of the indictment; and to testimony by the informant concerning prior drug use.View "United States v. Coffelt" on Justia Law

Nicole discovered Shawn’s body in their Ohio home. Shawn had gone out drinking the night before, while Nicole spent the night at a friend’s house. The Medical Examiner’s Office reported the cause of death as “[a]sphyxia by extreme and restricted position (positional asphyxia)” and the manner of death as “[a]cute ethanol intoxication ... ACCIDENT: Prolonged and extreme hypertension of neck and torso while intoxicated.” Shawn’s blood-alcohol level at the time of autopsy was .22%. Nicole filed a $212,000 claim for accidental-death benefits with the Plan, which covers “injury” as a result of an “accident,” defined as “an unintended or unforeseeable event or occurrence which happens suddenly and violently.” No benefits will be paid if the “Covered Person [is] deemed and presumed, under the law of the locale … to be under the influence of alcohol or intoxicating liquors.” Nationwide directed denial of Nicole’s claim, citing Exclusion 12, but quoting an earlier version that provided: “The Covered Person being deemed and presumed … to be driving or operating a motor vehicle while under the influence…” Later, based on amended Exclusion 12, Nationwide upheld the denial; its appeals panel affirmed. Nicole filed suit, asserting claims under the Employee Retirement Income Security Act and a common-law breach-of-fiduciary-duty claim. The district court entered judgment in favor of the defendants, but agreed with Nicole that the appeals panel had breached its statutory duty to provide her with Plan-related documents upon written request, and imposed a penalty of $55 per day ($8,910). The Sixth Circuit affirmed. View "Cultrona v. Nationwide Life Ins. Co." on Justia Law

The plaintiffs deal in silver and gold jewelry, ingots, numismatics, and other related items. They challenged the facial constitutionality of the Precious Metals Dealers Act, Ohio Rev. Code 4728, alleging violation of the commercial speech rights of businesses dealing in precious metals, vagueness, and violation of the Fourth Amendment by imposing overly burdensome retention, reporting, and record-keeping requirements. The district court granted a preliminary injunction, finding that the Act violated the First Amendment because only those engaged in commercial speech are subject to its licensing requirement. The injunction prohibited the state from requiring licenses or fining those, like plaintiffs, who previously violated the statute. The Sixth Circuit reversed, applying “rational basis” review. The Act does not burden the commercial speech rights of unlicensed precious metals dealers. Such dealers do not have a constitutional right to advertise or operate a business does not comply with reasonable requirements of Ohio law and cannot “hold themselves out” to the public without a license, regardless of whether they advertise. The issue is not advertising, but whether a business holds itself out to the public, which can occur by posting a sign, placing goods in a window, or simply conducting business in a manner that is visible to the public. The court noted the public interest in the statutory scheme .View "Liberty Coins, LLC v. Goodman" on Justia Law

During the 2000 presidential election, Dewald established and operated political action committees (PACs): “Friends for a Democratic White House” and “Swing States for a GOP White House.” He sent fundraising letters to political donors found on Federal Election Commission donor lists. The PACs collected about $750,000 in contributions, but Dewald remitted less than 20 percent of that amount to the political parties or to outside PACs. He funneled most the money to his for-profit corporation, which provided “consulting and administrative services” to the PACs. Dewald was convicted, under Michigan law, for obtaining money under false pretenses, common-law fraud, and larceny by conversion and ultimately sentenced to between 23 and 120 months. Rejecting Dewald’s preemption claim, the Michigan Court of Appeals reasoned that the Federal Election Campaign Act, 2 USC 453 has a narrow preemptive effect. Dewald unsuccessfully sought state post-conviction relief. Dewald later obtained federal habeas corpus relief 28 U.S.C. 2254, on grounds that FECA preempted state law and that the Michigan court’s determination was objectively unreasonable. The Sixth Circuit reversed. There is no clearly established federal law, as determined by the Supreme Court, holding that FECA precludes a state from prosecuting fraud in the context of a federal election. Even if federal preemption provides “clearly established federal law” in general, the state decision did not unreasonably apply those general principles to this case. View "Dewald v. Wriggelsworth" on Justia Law

The Union sought a declaratory judgment to enforce a settlement agreement it had entered into with UPS in 2010 to resolve a labor dispute. UPS maintained that any allegation of failure to abide by the agreement fell within a broad arbitration clause in the parties’ collective-bargaining agreement. The district court agreed and dismissed for lack of subject matter jurisdiction. The Sixth Circuit held that the district court had subject-matter jurisdiction, but affirmed dismissal based on the language of the CBA, which provides that “any controversy, complaint, misunderstanding or dispute” that concerns “interpretation, application or observance” of the CBA “shall be handled” in accordance with the CBA’s grievance procedures. The parties agreed that the alleged breach of the Settlement Agreement constituted a violation of the CBA. View "Teamsters Local Union 480 v. United Parcel Serv., Inc." on Justia Law

From 2004 to 2009, Russell worked at Citicorp’s Florence, Kentucky call center. He had signed a standard contract to arbitrate any disputes with the company. The agreement covered individual claims but not class actions. In 2012, Russell filed a class action against the company, claiming that the company did not pay employees for time spent logging into and out of their computers at the beginning and end of each workday. Citicorp did not seek arbitration. In 2012, with the lawsuit still in progress, Russell applied to work again at Citicorp’s call center and was rehired. Citicorp had updated its arbitration contract to cover class claims as well as individual ones. Russell signed the new contract and began work in the call center. Russell did not consult with his lawyers before signing the new contract. About a month later, Citicorp’s outside attorneys learned that he had been rehired and sought to compel Russell to arbitrate the class action, which by then had begun discovery. The district court held that the new arbitration agreement did not cover lawsuits commenced before the agreement was signed. The Sixth Circuit affirmed. View "Russell v. Citigroup, Inc." on Justia Law

Demyanovich, an employee of Cadon for more than 20 years, was terminated after he requested leave under the Family and Medical Leave Act to treat his congestive heart failure. He had previously taken leave and his condition had gotten worse over the course of about 10 years. He claimed that Cadon and his direct supervisor, Ensign, interfered with his exercise of his FMLA rights, retaliated against him for seeking FMLA leave, and discriminated against him on the basis of disability. Ensign denied the FMLA request because he believed that Cadon did not have enough employees to be subject to the Act, but referred to Demyanovich as a “liability” immediately after the request for FMLA leave. The district court entered summary judgment in favor of Cadon. The Sixth Circuit reversed, noting evidence that establishs a genuine factual dispute as to whether Demyanovich was permanently incapable of working at the time that he was terminated. View "Demyanovich v. Cadon Plating & Coating, L.L.C." on Justia Law