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

A subsidiary of Whirlpool Corporation with a single part-time employee in Luxembourg sold refrigerators and washing machines to Whirlpool in a series of complicated transactions involving Whirlpool-Mexico. By means of a 2007 corporate restructuring, neither the Luxembourgian subsidiary nor Whirlpool itself paid any taxes on the profits (more than $45 million) earned from those transactions. The IRS later determined that Whirlpool should have paid taxes on those profits.The Tax Court granted summary judgment to the Commissioner. The Sixth Circuit affirmed. An American corporation is taxed directly on foreign base company sales income (FBCSI) held by its “controlled foreign corporations” (CFCs), 26 U.S.C. 954(a)(2). Lux’s income from its sales of appliances to Whirlpool-US and Whirlpool-Mexico in 2009 is FBCSI. Section 954(d)(2) expressly prescribes that the sales income “attributable to” the “carrying on” of activities through Lux’s Mexican branch “shall be treated as income derived by a wholly-owned subsidiary” of Lux and that the income attributable to the branch’s activities “shall constitute foreign base company sales income of” Lux. View "Whirlpool Financial Corp. v. Commissioner of Internal Revenue" on Justia Law

Beginning in 1986, Arabian was the sole authorized dealer for Ford brands in Kuwait. In a 2005 Agreement, the companies agreed to use “binding arbitration” as the “exclusive recourse” for any dispute. Ford ended the Agreement in 2016 and applied to the American Arbitration Association for a declaration that it permissibly ended the Agreement. Arabian sued, seeking an injunction prohibiting Ford from proceeding with arbitration and asserting breach of contract and fraud. Arabian argued that the Motor Vehicle Franchise Contract Arbitration Fairness Act, 15 U.S.C. 1226, requires that arbitration between dealers and car manufacturers requires that the parties consent to it after the dispute arises. The district court denied the motion, deciding that the arbitrator must resolve the gateway issue.The arbitral tribunal decided that the Act did not deprive it of authority and held that Ford permissibly terminated the Agreement; it taxed Arabian $1.35 million for fees and costs. Arabian brought counterclaims for breach of contract and fraud but withdrew them before the award. The Sixth Circuit confirmed the award. On remand, Ford moved to stay the federal action to allow the arbitrator to resolve Arabian’s common law claims. The district court dismissed the case without prejudice. The Sixth Circuit reversed. The Act’s command, 9 U.S.C. 3, that a district court “shall on application of one of the parties stay the trial,” conveys a mandatory obligation. Dismissal, unlike a stay, permits an objecting party to file an immediate appeal; a dismissal order undercuts the Act's pro-arbitration appellate-review provisions. View "Arabian Motors Group W.L.L. v. Ford Motor Co." on Justia Law

Hymes pleaded guilty to possessing crack cocaine with the intent to distribute, 21 U.S.C. 841(a)(1); (b)(1)(C). Hymes had multiple prior state convictions. The district court initially sentenced Hymes to 188 months’ imprisonment. While Hymes’s appeal was pending, the Sixth Circuit decided “Havis” (2019), casting doubt over the district court’s reading of the Sentencing Guidelines in Hymes’s case. On remand, with the career offender provision off the table, Hymes faced a Guidelines range of 110-137 months imprisonment. Hymes argued that his prior driving offenses artificially inflated his criminal history score and that several post-incarceration developments warranted a variance, including his behavior in prison and the COVID-19 pandemic.The Sixth Circuit affirmed his 124-month sentence. The district court, acting on a limited remand, did not abuse its discretion in evaluating Hymes’s criminal history or rehabilitation arguments. A district court is not required to consult the Sentencing Commission’s collected data in order to avoid sentencing disparities. In two separate sentencing proceedings, the district court thoughtfully explained why a sentence near the bottom of the Guidelines range was appropriate and, citing Hymes’s recent drug trafficking convictions, concluded that Hymes was a chronic recidivist and that a sentence below the Guidelines recommendation would be inappropriate. View "United States v. Hymes" on Justia Law

In 2018, ATF promulgated a rule that classified bump stocks as machine guns, reversing its previous position. Bump stocks assist the shooter in “bump firing,” a technique that increases a semiautomatic firearm’s rate of fire. The district court held that the ATF’s interpretation was entitled to Chevron deference and that the classification of bump stocks as machine guns was “a permissible interpretation” of 26 U.S.C. 5845(b). The court denied a preliminary injunction.The Sixth Circuit initially reversed, reasoning that an agency’s interpretation of a criminal statute is not entitled to Chevron deference and that ATF’s rule is not the best interpretation of section 5845(b). On rehearing, en banc, the court divided evenly and, therefore, affirmed the denial of a preliminary injunction. Chevron provides the standard of review, even though the law under consideration has criminal applications. Applying Chevron, Congress has not spoken to the precise question at issue and, after exhausting the traditional tools of statutory construction, section 5845(b) remains ambiguous. ATF’s interpretation of section 5845(b) is a permissible construction of the statute and is reasonable; it is entitled to Chevron deference. Even without applying deference, the Final Rule provides the best interpretation of section 5845(b). View "Gun Owners of America, Inc. v. Garland" on Justia Law

Eight named plaintiffs, including two minors, brought a nationwide putative class action against e-commerce provider StockX for allegedly failing to protect millions of StockX users’ personal account information obtained through a cyber-attack in May 2019. Since 2015, StockX’s terms of service included an arbitration agreement, a delegation provision, a class action waiver, and instructions for how to opt-out of the arbitration agreement. Since 2017, StockX's website has stated: StockX may change these Terms without notice to you. “YOUR CONTINUED USE OF THE SITE AFTER WE CHANGE THESE TERMS CONSTITUTES YOUR ACCEPTANCE OF THE CHANGES. IF YOU DO NOT AGREE TO ANY CHANGES, YOU MUST CANCEL YOUR ACCOUNT.The Sixth Circuit affirmed the dismissal of the suit and an order compelling arbitration. The court rejected arguments that there is an issue of fact as to whether four of the plaintiffs agreed to the current terms of service and that the defenses of infancy and unconscionability render the terms of service and the arbitration agreement (including the delegation provision) invalid and unenforceable. The arbitrator must decide in the first instance whether the defenses of infancy and unconscionability allow plaintiffs to avoid arbitrating the merits of their claims. View "I. C. v. StockX, LLC" on Justia Law

In 1996, two 17-year-olds, Harris and Gaines, approached soldiers at the Fort Campbell Army base. Attempting to rob them, Gaines pulled out a handgun, which discharged. A bullet struck Private Alonso-Caravia, killing him. Harris and Gaines pleaded guilty to aiding and abetting second-degree murder, 18 U.S.C. 2 and 1111, aiding and abetting attempted robbery, 18 U.S.C. 2 and 2111, and aiding and abetting using or carrying a firearm during and in relation to a crime of violence, 18 U.S.C. 2 and 924(c). The district court sentenced Harris to 420 months plus a consecutive 60-month prison term for the section 924(c) conviction.The Sixth Circuit affirmed the denial of his second or successive 28 U.S.C. 2255 motion. Harris argued that the consecutive 60-month sentence must be vacated because it is possible that the court imposed that punishment under the unconstitutionally vague “residual clause” of 18 U.S.C. 924(c)(3)(B) and that the sentence cannot be saved under the “elements clause” of section 924(c)(3)(A) because neither of his other convictions could have been considered a “crime of violence” under then-existing precedent. Harris cannot establish harm that he suffered from any error. At best, Harris can show that the record of his sentencing is silent as to whether the court relied upon 924(c)(3)’s elements clause or residual clause when imposing his sentence. The 18 U.S.C. 2111 crime of aiding and abetting attempted robbery necessarily constitutes a crime of violence under the elements clause. View "Harris v. United States" on Justia Law

Gillispie was convicted of two 1988 rapes and spent more than 20 years in prison before Ohio courts vacated his convictions, based on his claims of failure to disclose exculpatory evidence and actual innocence. Gillispie brought 42 U.S.C. 1983 claims against Moore, the police officer responsible for much of the investigation and the identification of Gillispie as the likely perpetrator. Gillispie alleges that Moore suppressed exculpatory evidence, arranged an unduly suggestive eyewitness identification procedure, fabricated inculpatory evidence, assisted in maliciously prosecuting him, and destroyed exculpatory evidence. Moore claims entitlement to qualified immunity. The district court determined that each of Gillispie’s claims should proceed to trial.The Sixth Circuit dismissed an appeal for lack of jurisdiction. Moore’s argument on appeal is simply a challenge to the district court’s determinations that genuine issues of material fact exist on the core claims. Defendants cannot appeal a denial of a motion for summary judgment based on qualified immunity insofar as that order determines whether the pretrial record sets forth a “genuine” issue of fact for trial. “An appeal choosing to take this tack anyway delays the administration of our justice system and is a waste of judicial resources.” View "Gillispie v. Miami Township" on Justia Law

Zometa-Orellana's domestic partner in El Salvador, Oscar, beat and raped her and locked her inside their home to prevent her from seeking help. She escaped, thinking she could not relocate within El Salvador due to its small geographic size, and that she could not rely on the El Salvadorian police. She entered the U.S. without inspection, was apprehended, and sought asylum and withholding of removal (8 U.S.C.A. 1158(a)-(b), 1231(b)(3)) based on her anti-machismo political opinion and her membership in a particular social group--El Salvadorian women of childbearing age in domestic partnerships.The IJ ultimately assumed that her allegations were credible but found no evidence Zometa-Orellana ever expressed any anti-machismo political opinion to anyone except Oscar and concluded that Zometa-Orellana’s proposed particular social group failed because “age” is a “mutable” characteristic and that she was targeted because she was her abuser's domestic partner. The IJ noted that Zometa-Orellana had not demonstrated that the government would be unable to protect her or that she was unable to relocate within El Salvador. The BIA agreed, noting that she did not report the incidents to the police.The Sixth Circuit vacated, noting that a crucial case on which the BIA and the IJ relied to assess Zometa-Orellana’s particular social group was vacated by the Attorney General. The IJ and BIA failed to consider the entire record in determining the El Salvadorian government’s willingness to respond and Zometa-Orellana’s ability to relocate within El Salvador. View "Zometa-Orellana v. Garland" on Justia Law

Presley pleaded guilty to participating in a conspiracy to burglarize more than 90 pharmacies, 18 U.S.C. 2118(d), and to assault of a police officer, 21 U.S.C. 2118(c). Presley had attempted to flee from arrest by speeding off in a car, almost striking the arresting officer, and had led a high-speed chase through residential areas before becoming stuck in a yard. Presley received a full reduction for acceptance of responsibility. He stipulated to “specific offense characteristics” for the conspiracy count: the burglary involved a structure other than a residence, the offense involved more than minimal planning, and the loss was more than $20,000 but less than $95,000. The court added one level because a controlled substance was taken, two levels for possession of a crowbar as a “dangerous weapon,” six levels for the assault of the officer, and two levels for the risk created to others by Presley’s flight. During his plea colloquy, Presley twice confirmed that he had discussed the appeal waiver with his attorney and was “giving up the right to appeal the sentence to be imposed.” With a Guidelines range of 92-115 months, after addressing the 18 U.S.C. 3553(a) factors, the court imposed a 102-month sentence.Though Presley’s plea agreement contained an appellate waiver, he challenged his sentence. The Sixth Circuit dismissed. Presley knowingly and voluntarily waived his right to appeal and was aware of the consequences; both his appellate waiver and his plea agreement are enforceable. View "United States v. Presley" on Justia Law

Mbonga joined an athletic club that had connections with the Congo’s then-ruling political party, the People’s Party for Reconstruction and Development. The club’s leaders recruited Mbonga to join the party’s youth group in 2013. The leaders allegedly planned to use the youth group to disrupt peaceful protests by the opposition party, the Union for Democracy and Social Progress. Mbonga refused to participate and, instead, joined the opposition party because of its political platform favoring equality and nonviolence. He began to attend the opposition party’s demonstrations and meetings. He claims that he was subsequently beaten by police several times.In 2018, Mbonga arrived in the United States and applied for asylum, withholding of removal, and relief under the Convention Against Torture. An IJ denied relief, finding that Mbonga was not credible and lacked a likelihood of future persecution because of changed conditions in the Congo. The country had since elected a new president from Mbonga’s own political party. The BIA affirmed. The Sixth Circuit denied a petition for review. The BIA can find a disqualifying change in conditions using general evidence showing that the political party that persecuted a refugee has lost power, which shifts the burden to the refugee to identify specific evidence proving that persecution still remains likely. Mbonga did not present such evidence. View "Mbonga v. Garland" on Justia Law