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

Officers of the Internet Crimes Against Children task force, browsing Craigslist, saw Babcock’s ads in offering money for sex with someone of any age. An officer responded by e-mail, as 14-year-old “Amber.” Babcock steered the discussion toward sexual topics and arranged a meeting in Columbus, Ohio. He pled guilty to attempting to entice a minor to engage in sexual activity, 18 U.S.C. 2422(b). Babcock had been the victim of physical and sexual abuse as a child, and claimed to have been diagnosed with schizophrenia and bipolar disorder. His father was absent and his mother was a substance abuser. His criminal history began at age 12, with juvenile adjudications for breaking and entering, assault, theft, and burglary. He had 17 adult convictions, most related to narcotics, but had pleaded no contest to three counts of corruption of a minor, based on allegedly engaging in consensual sex with 14-to-15-year-old girls. He was convicted of providing a pornographic video to an eight-year-old and for failing to register or verify his address as required by his status as a sex offender. This history resulted in a Guidelines sentencing range of 120–150 months, but the probation office concluded that the repeat child sex offender enhancement of U.S.S.G. 4B1.5(a) should apply, which increased his range to 235–293 months. The court sentenced Babcock to 190 months’ imprisonment and a life term of supervised release. The Sixth Circuit affirmed. View "United States v. Babcock" on Justia Law

Lubrizol, a chemical manufacturer, produces petroleum wax-based oxidates, used in anti-corrosion products. In 2007, Lubrizol acquired Lockhart’s oxidate business and assets, leaving Lockhart’s Flint, Michigan oxidate production facility partially unused. The purchase agreement “prohibited Lockhart, for a period of five years from the date of the purchase agreement, from directly or indirectly engaging in any business competitive with the assets it sold to Lubrizol.” Lubrizol allegedly later employed the clause to prevent the use or re-lease of the plant to another oxidates manufacturer.” The purchase gave Lubrizol a 98% market share monopoly in the oxidate market. Lubrizol subsequently increased prices by 70%. In 2009, the FTC alleged violations of Section 5 of the FTC Act and Section 7 of the Clayton Act. In a consent agreement, Lubrizol promised: to divest the Lockhart oxidates assets to Additives Int'l; to rescind any prohibition or restraint including noncompete agreements, on the sale or use of the Flint plant for the manufacture and sale of products by Additives or others; and to lease the Flint plant to Additives. Z Technologies, a purchaser of oxidates that makes anti-corrosion products for cars, filed suit in 2012, alleging violations of the Sherman and Clayton Acts and Michigan antitrust laws. The district court dismissed, determining that the claims were time-barred. The Sixth Circuit affirmed, rejecting a continuing-violations argument. Lubrizol’s price increases and alleged implementation of the non-compete clause did not constitute a “new and independent” injury. The court also found a hold-and-use argument inapplicable because the alleged implementation of a non-compete clause was not a “new use” of an “asset.”View "Z Techs. Corp. v. Lubrizol Corp." on Justia Law

The Energy Policy Act of 2005 directs the Department of Energy (DOE) to fund alternative energy projects called “biorefinery demonstration projects,” 42 U.S.C. 16232(d), to develop ways to convert trees, crops and agricultural waste into energy. Frontier sought a grant to construct a plant in Michigan’s Upper Peninsula that would use about 770 tons of wood chips per day to produce 20 million gallons of ethanol per year. As required by the National Environmental Policy Act (NEPA), DOE prepared a draft environmental assessment. After receiving input, DOE issued a final environmental assessment that proposed changes, including use of a biomass boiler instead of natural gas boilers to generate power for the plant. DOE issued a finding of “no significant impact” and awarded $100 million toward construction of the plant, about 34% of its total cost. Opponents sued, alleging violation of the NEPA. The district court held that the plaintiffs lacked standing and that the claims also failed on the merits. The Sixth Circuit reversed with respect to standing, holding that the opponents did show injury subject to redress, but affirmed on the merits, stating that DOE completed a thorough environmental assessment and reasonably described the environmental impacts identified as not significant. View "Klein v. U.S. Dep't of Energy" on Justia Law

A video recording taken from Ohio Trooper Kline’s cruiser shows Kinlan's Nissan move into a narrow space between cars in the left lane of the four-lane street. Kline followed for about 30 seconds until its driver signaled a turn. Kline activated his lights and siren and pulled the Nissan over. Kline approached and informed Kinlin that he had nearly cut off the car behind him and had “cut left of center” before the intersection. Kline asked how much alcohol Kinlin had consumed. Kinlin answered: “two beers.” Kinlin exited the car and appeared disheveled, but not off-balance. Kline ushered Kinlin out of camera range for a field sobriety test. Kinlin said: “I’m not doing a test…. I’m not drunk.” Kline informed Kinlin that he was under arrest. Kinlin replied: “You’re kidding.” Kline said: “One more chance … take my test?” Kinlin again refused. Kline responded that he could smell alcohol and that Kinlin’s eyes were glassy. While Kline was patting him down, Kinlin agreed to submit to a test. The test, administered later, indicated a blood-alcohol content of .012%, below Ohio’s limit of .08%. Kinlin sued under 42 U.S.C. 1983. The district court found that Kline had probable cause to stop Kinlin and probable cause for arrest. The Sixth Circuit affirmed. View "Kinlin v. Kline" on Justia Law

J.H. has known Reid, an acquaintance of her family, since early childhood. In 2011, Reid (age 48) began to send J.H. (age 13) text messages and phone calls that led her to think of him as her boyfriend. He eventually had sex with her, first in Memphis, Tennessee, then in a hotel across the Mississippi border. J.H. told Reid that she wanted to run away from home. Reid encouraged her to leave, picked her up on her way to school, and headed to Las Vegas, having sex along the way. When they reached Las Vegas, J.H. called her family, who had been searching for her. Reid was convicted of violating the Mann Act, which prohibits knowingly transporting a minor in interstate commerce with intent that the minor engage in illegal sexual activity, 18 U.S.C. 2423(a) and sentenced to 198 months in prison. The Sixth Circuit affirmed, rejecting challenges concerning being allowed only nine peremptory challenges in the selection of the jury that convicted him; to the admission of evidence concerning his in-state sexual encounters with J.H.; in the application of an “undue influence” enhancement at his sentencing; and in the calculation of his criminal history score. View "United States v. Reid" on Justia Law

Brown claimed that he injured his shoulder while paving a road for his employer Ajax Paving, and sought workers’ compensation. Ajax introduced medical testimony suggesting that the injury occurred outside of work. While the case remained pending before the Michigan administrative agency, Brown and Ajax settled. Brown, however, thought that Ajax had introduced false medical testimony and that it had done the same to other employees, and sued Ajax and its insurers, claims administrators and the doctor, under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1964(c). The district court dismissed. The Sixth Circuit affirmed. Under the Act, Brown must show that illegal racketeering activities have “injured [him] in his business or property.” The Sixth Circuit has held that “loss or diminution of benefits the plaintiff expects to receive under a workers’ compensation scheme does not constitute an injury to ‘business or property’ under RICO.” View "Brown v. Ajax Paving Indus., Inc." on Justia Law

Trusts established by James Cartwright before his death have resulted in litigation in several jurisdictions involving his adopted children and others. The cases involve spendthrift trusts, Crummey Trusts, limited partnerships, and other entities, and tort claims of conversion, conspiracy, self-dealing, and manipulation of trust fund assets. The federal district court held that it lacked jurisdiction, reasoning that both state and federal court actions alleged claims involving administration of the trusts and were quasi in rem and that the Tennessee state court first asserted jurisdiction over the property at issue. The Sixth Circuit affirmed. View "Cartwright v. Garner" on Justia Law

The bankruptcy court held that real property transferred in error to the debtor by his father pre-petition was impressed with a constructive trust as a matter of law, and that the bankruptcy estate had no interest in the real property. The Sixth Circuit Bankruptcy Appellate Panel affirmed.View "In re: Thomas III" on Justia Law

The bankruptcy court voided the transfer of $74,102.60 to 1st National Cash Refund pursuant to 11 U.S.C. 549 and ordered recovery of transferred property from 1st National Cash Refund and Woodford pursuant to 11 U.S.C. 550. The Sixth Circuit Bankruptcy Appellate Panel affirmed, upholding determinations that the statutes of limitation found in sections 549 and 550 were equitably tolled and that the trustee had power to avoid and recover the transferred property. View "In re: Anderson" on Justia Law

Hi-Lex has about 1,300 employees. Blue Cross Blue Shield of Michigan (BCBSM) served as a third-party administrator (TPA) for Hi-Lex’s Health and Welfare Benefit Plan since 1991. Under the Administrative Services Contracts (ASCs) between the parties, BCBSM agreed to process healthcare claims for Hi-Lex employees and grant those employees access to BCBSM’s provider networks. BCBSM received an “administrative fee” set forth in ASC Schedule A on a per-employee, per month basis. In 1993, BCBSM implemented a new system, “retention reallocation,” to retain additional revenue. Regardless of the amount BCBSM was required to pay a hospital for a given service, it reported a higher amount that was then paid by the self-insured client. Hi-Lex allegedly was unaware of the retention reallocation until 2011, when BCBSM disclosed the fees in a letter and described them as “administrative compensation.” Hi-Lex sued, alleging breach of fiduciary duty under the Employee Retirement Income Security Act, 29 U.S.C. 1104(a). The court awarded Hi-Lex $5,111,431 in damages and prejudgment interest of $914,241. The Sixth Circuit affirmed that: BCBSM was an ERISA fiduciary and breached its fiduciary duty under ERISA section 1104(a), that BCBSM conducted “self-dealing” in violation of section 1106(b)(1), and that Hi-Lex’s claims were not time-barred. View "Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of MI" on Justia Law