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

Petitioners-appellants John Machacek, Jr. and Marianne Machacek were the sole shareholders of John J. Machacek, Jr., Inc. (Machacek, Inc.), a corporation organized under Subchapter S of the Internal Revenue Code. John was also an employee of Machacek, Inc. The Machaceks appealed the Tax Court’s ruling requiring them to treat as income the economic benefits resulting from Machacek, Inc.’s payment of a premium on John's life insurance policy under a compensatory split-dollar arrangement. Relying on the compensatory nature of the arrangement, the Tax Court rejected the Machaceks’ argument that the economic benefits should be treated as a shareholder distribution. The Sixth Circuit reversed, finding that the Tax Court did not consider the impact of a provision of the tax regulations specifically requiring that such economic benefits be treated as shareholder distributions. View "Machacek v. Comm'r of Internal Revenue" on Justia Law

Defendant-appellant Frank Richardson appealed his conviction for aiding and abetting he use of a firearm during a crime of violence. On his first appeal, the Sixth Circuit affirmed his conviction and sentence in full. But while that appeal was pending, the Supreme Court decided Johnson v. United States, 135 S. Ct. 2551 (2015), which held that part of the Armed Career Criminal Act’s definition of a violent felony was unconstitutionally vague. Although Richardson was not convicted under the Armed Career Criminal Act, he petitioned the Supreme Court for certiorari, arguing that Johnson nonetheless called part of his conviction into question. Richardson contends that the residual clause of 18 U.S.C. 924(c) was unconstitutional because its definition of the term, "crime of violence," was similar to the language at issue in Johnson. The Court granted Richardson’s petition, vacated the Sixth Circuit's judgment, and remanded. In turn, the Sixth Circuit vacated Richardson’s sentence and remanded the case to the district court to determine whether Richardson’s original sentence should stand in light of Johnson. Without determining whether section 924(c)’s residual clause was unconstitutionally vague, the Sixth Circuit affirmed Richardson’s conviction under 924(c)’s force clause, which supplied a separate definition of "crime of violence." The Court also concluded its remand limited the district court’s inquiry to Johnson-related issues and that the district court properly refrained from considering Richardson’s other arguments about alleged deficiencies in the indictment and the trial court’s jury instructions - arguments that he could have raised in his first appeal but did not. Finally, the Sixth Circuit held Richardson’s sentence was procedurally and substantively reasonable. View "United States v. Richardson" on Justia Law

The district court granted Stephen Mitchell habeas relief and gave him a sentence of time-served with three years of supervised release. Both Mitchell and the United States appealed. Since those appeals were filed, the Sixth Circuit decided substantially-similar cases. At the time of his sentencing, Mitchell’s three prior convictions qualified as “violent” felonies under the Armed Career Criminal Act (ACCA), meaning Mitchell was subject to the ACCA’s enhanced sentencing. Applying the ACCA, the trial judge sentenced Mitchell to 250 months of imprisonment and three years of supervised release. But after the Supreme Court invalidated the ACCA’s so-called residual clause as unconstitutionally vague, and then applied that holding retroactively, Mitchell filed for habeas relief. Mitchell argued that without the ACCA’s residual clause, his prior felonies no longer qualified as “violent” under the ACCA. Therefore, he said his 250-month, ACCA-enhanced sentence was invalid. Without the ACCA, the maximum sentence Mitchell could have served for his felon-in-possession conviction was ten years. But Mitchell had already served seventeen years by the end of his habeas proceeding. So the district court decided to release Mitchell from custody and correct his sentence to “time- served.” The district court also re-imposed Mitchell’s original three years of supervised release. The Sixth Circuit affirmed the district court's habeas relief insofar as it held that Mitchell’s burglary conviction was not a “violent” felony under the ACCA. The district court’s judgment as it related to Mitchell’s sentence was vacated and remanded for a determination of whether: (1) a time-served sentence that is equivalent to a term-of-months sentence above the statutory maximum is invalid; and (2) a district court has the discretion to select appropriate proceedings for correcting a sentence—so long as the corrected sentence complies with substantive and procedural reasonableness. View "United States v. Mitchell" on Justia Law

Connecticut imposed liability for breaches of contract when attended by deception. Unhappy with flanges purchased under a contract with PM Engineered Solutions, Inc. (“Powdered Metal”), Bosal Industries-Georgia, Inc. (“Bosal”) decided to switch suppliers and terminate the contract. After a five-day bench trial, the district court found that the termination was not only wrongful in breach of the contract, but that it was deceptive in violation of the Connecticut Unfair Trade Practices Act. Because Connecticut law applied and the district court’s findings rested on a permissible view of the evidence, the Sixth Circuit affirmed except as to the calculation of postjudgment interest on damages. View "Premium Freight Mgmt. v. PM Engineered Solutions" on Justia Law

Plaintiff Mead Vest contended defendant Resolute FP US Inc. breached its fiduciary-duty obligations set forth in the Employee Retiree Income Security Act when it failed to notify her late husband of his right to convert a group life insurance policy to an individual life insurance policy after he ceased employment and began drawing long-term disability benefits. The district court ruled plaintiff did not adequately plead a breach-of-fiduciary-duty cause of action. After review, the Sixth Circuit agreed and affirmed. View "Vest v. Resolute FP US Inc." on Justia Law

Evendale property owners who wanted to rent their properties had to obtain a permit by allowing the building commissioner to inspect the property or sign a sworn affirmation that the property complied with the code. The commissioner also could inspect structures if he suspected a violation. If the building was occupied, the commissioner was to present credentials and request entry. For unoccupied structures, the commissioner was to make a reasonable effort to locate the owner and ask to inspect. Should someone refuse entry, the commissioner could use “remedies provided by law.” Vonderhaar owns 13 rental properties, over half of Evendale's rental homes. Vonderhaar filed a purported class action under the Fourth Amendment, claiming the code authorized warrantless searches, and the Fifth Amendment, claiming the code required permit applicants to attest to compliance. The district court granted a preliminary injunction, concluding that the inspection procedures facially violated the Fourth Amendment. Evendale subsequently amended its code to allow owners applying for rental permits to “[p]rovide a written certification” from an architect or engineer attesting that a building meets Village standards and adding that when a commissioner suspects a violation, the commissioner may “seek a search warrant based on probable cause.” The Sixth Circuit vacated the injunction for lack of standing. The Village never relied on the code to conduct a warrantless search and the plaintiffs have no risk of impending injury. View "Vonderhaar v. Village of Evendale" on Justia Law

Rodriguez-Penton moved from Cuba to the U.S. when he was 15. He is a lawful permanent resident. Rodriguez-Penton was indicted for conspiracy to distribute and possess Oxycodone, retained counsel Butler, and initially cooperated but stopped because he feared for his family’s safety. The government offered Rodriguez-Penton plea deals but he entered an open guilty plea. Rodriguez-Penton’s Cuban citizenship arose during the hearing: the court stated that there was no need to review the civil rights one forfeits by pleading guilty; inquired whether, due to Rodriguez-Penton’s citizenship, there would be an early sentencing; and asked about an Immigration and Customs Enforcement detainer, but did not advise Rodriguez-Penton that pleading guilty might have adverse immigration consequences and sentenced him to a 121-month prison term. Rodriguez-Penton alleges that he learned of the deportation risk after sentencing, during a meeting with his prison counselor. Rodriguez-Penton appealed, represented by Butler, arguing that his plea was not knowing and voluntary. After hearing testimony from Butler and an interpreter, a magistrate concluded that Butler merely told Rodriguez-Penton that he did not have to worry about deportation. Rodriguez-Penton testified unequivocally that he “would not have gone to trial, even if he could not have negotiated a better plea arrangement.” The district court dismissed his 28 U.S.C. 2255 motion. The Sixth Circuit reversed. The legal standard for ineffective assistance of counsel claims has changed in the context of non-citizens faced with criminal charges. Rodriguez-Penton asserted that his decision-making process would have been different if he had been properly advised; the government has not offered any countervailing evidence that Rodriguez-Penton could not have secured a more favorable plea. View "Rodriguez-Penton v. United States" on Justia Law

Esperion has never generated any revenue, relying solely upon investor funding. Esperion’s sole focus is the development of ETC-1002, a first-in-class oral medication for lowering LDL “bad cholesterol,” a significant risk factor in cardiovascular disease. Esperion hopes to market ETC-1002 as an alternative treatment for statin-intolerant patients and as an add-on for patients are unable to reach their recommended levels using statins alone. In 2015, Esperion had completed several clinical studies and reported that ETC-1002 was well-tolerated and demonstrated significant average LDL-cholesterol reductions. After a meeting with FDA officials regarding Phase 3 of the approval process, Esperion published a press release, stating that “[b]ased upon feedback from the FDA, approval of ETC-1002 in [specific] patient populations will not require the completion of a cardiovascular outcomes trial,” with cautionary language, suggesting that “Esperion may need to change the design of its Phase 3 program once final minutes from the FDA meeting are received.” Market reaction was mostly positive. Following its receipt of the final FDA minutes, Esperion published another press release, indicating that the “FDA has encouraged the Company to initiate a cardiovascular outcomes trial promptly.” Esperion’s stock dropped 48% the next day. Plaintiffs, the purchasers of Esperion common stock between the two press releases, brought a class action under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5. The Sixth Circuit reversed the district court holding that Plaintiffs failed to adequately plead a strong inference that Esperion’s CEO willfully or recklessly made misleading statements. Plaintiffs adequately alleged scienter. View "Dougherty v. Esperion Therapeutics, Inc." on Justia Law

After Hickory fired Carter from her job as a nursing assistant in 2007, Carter filed an unlawful discrimination claim with the Ohio Civil Rights Commission. That agency filed a parallel charge with the federal Equal Employment Opportunity Commission, under the Americans with Disabilities Act. For six years, the complaint inched its way through the state system. In November 2013, the Ohio Commission ordered Hickory to reinstate Carter and to pay her lost wages. Carter asked the EEOC for a right-to-sue letter. Because Carter had moved without notifying that agency, it mailed the letter to her old address. Over the next few months, Carter’s attorney, Gilbert, contacted the agency, and in November 2014 procured a copy of the letter dated February 2014. Carter filed suit in December 2014. The court concluded that Carter’s claim was time-barred because she filed it more than 90 days after the date on her right-to-sue letter and imposed a $25,995.32 sanction on attorney Gilbert for advancing a clearly time-barred claim. The Sixth Circuit affirmed. It is irrelevant that Hickory did not move for dismissal but waited until summary judgment to raise the statute of limitations; it instead contacted Gilbert and informed him of the flaws in his case. The court awarded fees and costs incurred only after that time. View "Carter v. Hickory Healthcare Inc." on Justia Law

Boucher pleaded guilty to assaulting a member of Congress. The government sought a 21-month sentence, at the low end of Boucher’s guidelines range. The district court sentenced Boucher to 30 days’ imprisonment. The Sixth Circuit denied Boucher’s motion to dismiss the government’s appeal. Boucher’s plea agreement says nothing about waiving the government’s right to appeal. The prosecutor agreed to seek a 21-month sentence and recommend an acceptance-of-responsibility reduction in return for the agreement and kept that promise, so the plea was supported by consideration. In addition, U.S. Attorneys have no right to control appeals by the government. That authority rests with the Solicitor General. The written plea agreement “supersede[s] all prior understandings, if any, whether written or oral, and cannot be modified other than in writing signed by all parties or on the record.” Whatever Boucher may have believed, the four corners of the plea agreement restrict his appellate rights, not the government’s or anyone else’s. View "United States v. Boucher" on Justia Law