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

AmEx is the world’s largest issuer of traveler’s checks, which never expire. AmEx and third-party vendors sell the checks at face value, and AmEx profits by investing the funds until the TC is redeemed. Although most are cashed within a year, AmEx uses the remaining uncashed checks for long-term, high-yield investments. Until recently, every state’s abandoned property laws presumed abandonment of uncashed traveler’s checks 15 years after issuance. This presumption requires the issuer to transfer possession of the funds to the state. In 2008 Kentucky amended KRS 393.060(2) to change thes abandonment period from to seven years. AmEx claims violation of the Due Process Clause, the Contract Clause, and the Takings Clause. Following a remand and amendment of the complaint to add a dormant Commerce Clause argument and a claim that the legislation did not apply retroactively to checks that were issued and outstanding prior to the effective date, the district court granted the state summary judgment. The Sixth Circuit affirmed, holding that the amendment applies only prospectively and does not violate the Commerce Clause. View "Am. Express Travel Related Servs. Co., Inc. v. Hollenbach" on Justia Law

Kennedy family members own a controlling interest in corporate entities that comprise Autocam. John Kennedy is Autocam’s CEO. The companies are for-profit manufacturers in the automotive and medical industries and have 661 employees in the U.S. The Kennedys are practicing Roman Catholics and profess to “believe that they are called to live out the teachings of Christ in their daily activity and witness to the truth of the Gospel,” which includes their business dealings. Regulations under the Patient Protection and Affordable Care Act of 2010 (ACA), 124 Stat. 119, require that Autocam’s health care plan cover, without cost-sharing, all FDA-approved contraceptive methods, sterilization, and patient education and counseling for enrolled female employees. Autocam and the Kennedys claim that compliance with the mandate will force them to violate their religious beliefs, in violation of the Religious Freedom Restoration Act, 42 U.S.C. 2000bb. The district court denied their motion for a preliminary injunction. The Sixth Circuit affirmed for lack of standing. Recognition of rights for corporations under the Free Speech Clause 20 years after RFRA’s enactment does not require the conclusion that Autocam is a “person” that can exercise religion for purposes of RFRA. View "Autocam Corp. v. Sebelius" on Justia Law

McCloud pled guilty to distributing 19.4 grams of crack cocaine, 21 U.S.C. 841,was released on bond, and failed to appear for sentencing. After evading law enforcement for more than three years, McCloud was captured and sentenced to 140 months of imprisonment and four years of supervised release. Between McCloud’s plea and sentencing, the Fair Sentencing Act of 2010 (FSA) was enacted, reducing the statutory sentencing range applicable to McCloud from 5–40 years to 0–20 years. McCloud’s counsel did not object to use of the pre-FSA range at sentencing. The Sixth Circuit affirmed the sentence as reasonable. Although the court erred in using the pre-FSA statutory range, that error did not affect McCloud’s substantial rights because it is highly unlikely that a proper statutory range with no effect on the Guidelines range would have changed the imposition of a within-Guidelines sentence. View "United States v. McCloud" on Justia Law

After the Underhills received their discharge under a voluntary Chapter 7 petition in May 2010, Golf Chic, an LLC in which Beth Underhill was the sole member, filed a claim for tortious interference against several entities in October 2010. The lawsuit was settled and $80,000 was awarded to the LLC, but the settlement check was made payable to Beth Underhill and her attorney, rather than to the LLC. Huntington Bank successfully moved to reopen the case so that the settlement proceeds could be administered as an asset of the bankruptcy estate. The Bankruptcy Appellate Panel affirmed. The settlement proceeds received after the discharge were sufficiently rooted in the debtors’ pre-bankruptcy past to be property of the estate, 11 U.S.C. 541(a)(1) and the claims were not abandoned by the trustee when the bankruptcy case was closed. The claim was known to Beth Underhill and affected the value of her membership interest. Placing a value of zero on the membership interest with that knowledge constituted failure to disclose the asset and warrants reopening and a determination by the bankruptcy court of the value of the interest in the LLC. View "In re: Underhill" on Justia Law

Satyam approached the Trust about forming a joint venture to provide engineering services to the automotive industry. Satyam represented that it was an IT-services provider with a base of automotive customers, that it was publicly-traded, audited, and financially stable. The Trust formed VGE, a separate legal entity; in 2000, VGE and Satyam formed SVES under the laws of India; VGE contributed $735,000. VGE and Satyam signed agreements calling for binding arbitration. In 2005, Satyam initiated arbitration. VGE counterclaimed that Satyam had breached its obligations. The arbitrator rejected VGE’s counterclaims, found that Satyam never competed with SVES, and found an event of default entitling Satyam to purchase VGE’s shares in the joint venture for book value. Satyam filed an enforcement action. The district court ordered VGE to comply with the award. The Sixth Circuit affirmed. Following a 2007 contempt proceeding, VGE complied. In 2010, VGE and the Trust sued, alleging that, starting before the joint venture, Satyam engaged in a massive fraud scheme about its financial stability, and claiming civil violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961–1968. The district court dismissed, based on res judicata defense, and denied leave to amend. The Sixth Circuit reversed. The complaint adequately alleged that Satyam wrongfully concealed the factual predicate to claims, so the defense of claim preclusion does not apply. View "Venture Global Eng'g, LLC v. Satyam Computer Servs., Ltd." on Justia Law

As part of a separate drug investigation, the FBI began wire intercepts of cellular telephones of several individuals (Wiretap Act, 18 U.S.C. §§ 2510–22) including West, Freeman’s co-defendant. They overheard a murder-for-hire plot. West was convicted of paying Freeman to murder Day. Freeman was convicted under 18 U.S.C. 1958 for conspiracy to use interstate commerce facilities in the commission of murder for hire and received a life sentence. At trial, FBI agent Lucas, interpreted the conversations as they were played. His testimony ranged from voice and nickname identifications to substantive interpretations of the meaning of the various statements. Defense counsel objected: “I think this is outside of the scope of both the notice we received regarding this witness’s expertise and his expertise.” Lucas had been qualified as an expert to testify to the meaning of specific code words and drug slang. The prosecution responded: “Your honor, this is not expert testimony. This is based upon his personal knowledge of the investigation.” The objection was overruled, and Lucas continued to testify as a lay witness under Rule 701, interpreting conversations to broadly illustrate the prosecution’s theory of the case. The Seventh Circuit vacated and remanded, holding that the district court erred by permitting the testimony. View "United States v. Freeman" on Justia Law

In 2003, Henderson was stopped for speeding. The officer discovered that the vehicle had been reported stolen. A Detroit Police Officer attempted to organize a live lineup, but could not locate five males of defendant’s description. The officer then conducted a photographic lineup, at which Henderson was identified as the suspect in a carjacking. Police records indicate that an attorney representing Henderson’s interests, Corr, was present for the photographic lineup. After Henderson’s conviction, Corr wrote a letter to Henderson stating that he had not been present at the lineup. At trial, Henderson’s counsel challenged neither admission of the photographic lineup, nor testimony regarding it and presented no evidence. Henderson was convicted of armed robbery and carjacking. State court efforts were rejected as untimely because the filing arrived one day late due to failings in the prison mail system. Henderson filed a federal petition for habeas corpus. The district court found several claims to be procedurally defaulted based on the lateness of Henderson’s application for leave to appeal the trial court’s denial of his first motion for reconsideration, which caused the Michigan Court of Appeals to dismiss his application. The Sixth Circuit reversed. Sixth Circuit law, Maples v. Stegall, (2003), provides that “[w]here a pro se prisoner attempts to deliver his petition for mailing in sufficient time for it to arrive timely in the normal course of events” that circumstance “is sufficient to excuse a procedural default based upon a late filing.” View "Henderson v. Palmer" on Justia Law

GM provides its salaried retirees with continuing life insurance benefits under an ERISA-governed plan. MetLife issued the group life insurance policy and periodically sent letters to participants advising them of the status of their benefits. The plaintiffs, participants in the plan, allege that those letters falsely stated that their continuing life insurance benefits would remain in effect for their lives, without cost to them. GM reduced their continuing life insurance benefits as part of its 2009 Chapter 11 reorganization. The plaintiffs sued MetLife under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(a)(2) & (a)(3) and state law. The district court dismissed. The Sixth Circuit affirmed. MetLife did not tell participants that the benefits were fully paid up or vested upon retirement, but that their benefits would be in effect for their lifetimes, which “was undeniably true under the terms of GM’s then-existing plan.” The court rejected claims of estoppel, of breach of fiduciary duty, unjust enrichment, breach of plan terms, and restitution. View "Merrill Haviland v. Metro. Life Ins. Co." on Justia Law

An internal investigation by the U.S. Attorney’s Office found evidence suggesting that during the Jefferson trial on drug-conspiracy charges, the prosecution failed to disclose to the defense the extent of the promises of leniency that the prosecution made to cooperating witnesses. In a motion to vacate his sentence, 28 U.S.C. 2255, Jefferson alleged that he was denied a fair trial because the prosecutor violated his obligation under Brady v. Maryland to disclose material impeachment evidence. Following a remand, the district court again denied Jefferson’s motion, finding that Jefferson’s claims were not timely filed, that equitable tolling was not warranted, and that even if timely, Jefferson’s Brady claims failed on the merits. The Sixth Circuit affirmed that the claims filed on the merits, because the material at issue was not prejudicial. The court rejected the conclusion that Jefferson failed to exercise due diligence in these circumstance. A section 2255 petitioner is permitted to rely on the government’s representation that it has fulfilled its Brady obligations. Reasonable diligence does not require a section 2255 petitioner repeatedly to scavenge for facts that the prosecution is unconstitutionally hiding from him. View "Jefferson v. United States" on Justia Law

Groeneveld sued Lubecore, claiming that Lubecore’s automotive grease pump is a “virtually identical” copy of Groeneveld’s automotive grease pump. The complaint asserted tradedress infringement in violation of section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), and violation of related federal and Ohio laws. The trade-dress claim went to the jury, which found for Groeneveld and awarded it $1,225,000 in damages. The Sixth Circuit reversed, holding that a company cannot use trade-dress law to protect its functional product design from competition with a “copycat” design made by another company where there is no reasonable likelihood that consumers would confuse the two companies’ products as emanating from a single source. Trademark law is designed to promote brand recognition, not to insulate product manufacturers from lawful competition. View "Groeneveld Transp. Efficiency, Inc. v. Lubecore Int'l, Inc." on Justia Law