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Oral Argument Postponed in Detroit Bankruptcy Appeal

Posted in News and Analysis, Recent Cases

As we expected might happen in light of the Court’s previous order, the parties in the Detroit bankruptcy appeal agreed to postpone oral argument.  In a letter to the parties, however, Judge Gibbons wrote that the appeals should be resolved before near the beginning of the hearing on the confirmation of the plan of adjustment.  Warning that oral argument might be rescheduled for August 7 or that the panel might decide the case, she gave the parties 48 hours—until close of business on July 31—to decide whether the appeal should be dismissed.  In light of the upcoming confirmation hearings, Judge Gibbons wrote that “the panel does not consider further delay in rendering a decision an option at this time.”  The Detroit News has an article on the postponement that refers to this blog.

As pointed out in the Detroit News, oral argument in the related appeal by Syncora Guarantee, Inc. regarding Detroit’s casino income will go forward this afternoon.

Sixth Circuit Reverses Exclusion of Expert Testimony

Posted in News and Analysis, Recent Cases

A divided panel of the Sixth Circuit held today in Lee v. Smith & Wesson Corp. that a district court abused its discretion in excluding testimony from the plaintiff’s expert that contradicted the injured plaintiff’s own account of how he was injured by an improperly discharging a Smith & Wesson revolver.  The court held that the mechanical engineer’s explanation of the discharge (which involved the revolver’s cylinder being open) met Daubert requirements and therefore was admissible, even though it flatly contradicted the plaintiff’s version of events (where the cylinder was closed before discharge).  The engineer’s testimony was based on a physical examination of the gun, as well as a review of “numerous reports and witness accounts of the accident, Lee’s medical reports, and photos of the revolver.”

Repeatedly emphasizing the expert’s reliance on “physical evidence,” (as opposed to “abstract theory,” “estimates and assumptions,” and “questionable data” in the cases the court distinguished) the panel held that a reasonable jury could find that the expert was correct and that Plaintiff was “mistaken.”  According to the court, “A tort plaintiff should be able to testify honestly to his memory of what happened and still have his lawyer argue that on the evidence as a whole it is more probable than not that the memory was faulty.”

Judge Keith dissented, focusing primarily on the broad grant of discretion given the trial judge and describing the possibility that plaintiff’s account was mistaken as “the outer-most bounds of speculation.”

This is another interesting chapter in the Sixth Circuit’s recent Daubert jurisprudence.  The Court here focused on the reliability of the methodology and held that to be paramount, over even a conflict with plaintiff’s own testimony. And it again illustrates the importance of the Daubert analysis in products liability cases, where the expert can make or break a case.

Oral Argument on Detroit Bankruptcy Postponed In Part

Posted in Recent Cases

Last Friday, the Sixth Circuit postponed oral argument in some of the pending cases in the appeal from the bankruptcy judge’s decision that Detroit was entitled to creditor protection under Chapter 9 of the U.S. Bankruptcy Code and could try to alter the terms of workers’ pensions. The postponement was apparently granted to allow various pension groups to settle with the city. Oral argument will be going forward on July 30 in the cases involving the associations for current and retired police officers and firefighters. Interestingly, Judge Stranch’s dissent from the order postponing oral argument saying that she would rather postpone all of the appeals, and hear all of the issues at once.

That said, counsel for the fire fighter and police officer associations sent a letter to the Court earlier today stating that they would consent to postponing oral argument in their cases as well—so it is possible there will be no oral argument in the City of Detroit appeal on Wednesday.

Offering Cheaper Service For Your Own Product Than For A Competitor’s? Watch Out For Antitrust Issues!

Posted in News and Analysis, Recent Cases

The Sixth Circuit will soon be clarifying its standard for so-called “non-explicit” unlawful tying in ­­­­­ Collins Inkjet Corp. v. Eastman Kodak Co., Case No. 14-3306, currently awaiting submission to a panel.  Kodak and Collins both make Versamark products, including ink and printer parts, but only Kodak refurbishes printheads.  After Collins terminated its relationship as a supplier to Kodak, Kodak announced that it would charge more to refurbish the printheads of Collins’s ink users than to refurbish the printheads of Kodak’s ink users.  On a motion for a preliminary injunction, the district court found that Collins was likely to succeed on the merits of its claim that Kodak unlawfully tied the price of its printhead refurbishment services to the purchase of its ink.  See Collins Inkjet Corp. v. Eastman Kodak Co., No. 1:13CV664 (S.D. Ohio Mar. 21, 2014).

Unlawful tying requires—among other things—that the purchase of one product or service be conditioned on the purchase of another, distinct product or service.  In the Sixth Circuit, if circumstances indicate that “all rational buyers” of one product would buy the other product, that fulfills the element of “conditioning” in the unlawful tying analysis, even if a buyer is technically able to buy one without the other.  The district court’s analysis in this case emphasized the price differential in refurbishment, viewing it as great enough to sway all rational buyers towards Kodak ink and rejecting Kodak’s argument that a rational buyer could still choose Collins’s ink based on the ink’s quality and Collins’s customer service.  The district court declined to consider whether Collins could have offset the refurbishment price differential by lowering the price of its ink, stating that this would only be relevant in a predatory pricing case.   Although the district court acknowledged that Collins retained many customers and that this actual buyer behavior could potentially demonstrate a lack of coercion, it attributed the customers’ behavior to Kodak’s inconsistent enforcement of its price-differentiation policy, holding that the policy itself was still sufficiently coercive to constitute conditioning.

In deciding Kodak’s interlocutory appeal, the Sixth Circuit will have an opportunity to clarify what evidence is and is not relevant to determining the behavior of “all rational buyers.”  In the meantime, companies considering similar strategies ought to carefully consider the potential antitrust implications.  Even if the Sixth Circuit chooses to focus less heavily on the price difference and more on other factors, the “all rational buyers” standard suggests a fact-intensive, case-by-case analysis that can lead to time-consuming and expensive litigation.

Sixth Circuit May Spur Supreme Court to Decide Whether Clean Air Act Preempts State Law Nuisance Claims

Posted in News and Analysis, Recent Cases, Supreme Court

The Supreme Court has held in Am. Elec. Power Co., Inc. v. Connecticut that the CAA preempts tort claims under federal common law and in International Paper Co. v. Ouellette  that the Clean Water Act does not preempt state common law claims under the law of the state that is the source of the alleged pollution.  However, it explicitly left open the question of whether the Clean Air Act preempts tort claims under state common law.  See Am. Elec. Power, 131 S. Ct. at 2540 (“None of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand.”).

There is already an arguable circuit split on this question, and the Sixth Circuit will soon be forced to stake out its own position.  In Bell v. Cheswick Generating Station, the Third Circuit held that the CAA does not preempt claims under the common law of a source state.  In North Carolina v. Tennessee Valley Authority, the Fourth Circuit wrote that the Supreme Court in Ouellete “created the strongest cautionary presumption against” state law nuisance actions where state standards differed from federal standards, a dictum that did not distinguish between source and affected states (although the case involved only affected-state claims) and thereby suggested a broader view of CAA preemption.  The Sixth Circuit has previously held that the Clean Air Act does not preempt statutory state law claims, but has not addressed common law state claims such as nuisance.

In Merrick v. Diageo Am. Supply, Inc., the Western District of Kentucky recently held that the CAA does not preempt common law tort claims under the law of the source state, consistent with some other decisions by district courts in the Sixth Circuit.  See Little v. Louisville Gas & Elec. Co., 2014 U.S. Dist. LEXIS 96947 (W.D. Ky. July 16, 2014); Technical Rubber Co. v. Buckeye Egg Farm, L.P., 2000 U.S. Dist. LEXIS 8602 (S.D. Ohio June 16, 2000).  Last month, the Merrick court certified this issue for an interlocutory appeal to the Sixth Circuit.

The Supreme Court denied certiorari in Bell last month, but a Sixth Circuit decision in Merrick might be the final straw in persuading the Supreme Court to address this issue.

Sixth Circuit Gearing up to Hear Same-Sex Marriage Appeals on August 6, 2014

Posted in News and Analysis, Recent Cases

Wednesday, August 6, 2014 will be a high-profile day at the Sixth Circuit as the Court will hear arguments in five appeals in the battle over same-sex marriages.  Below are the cases on the Court’s calendar:

DeBoer, et al. v. Snyder, et al., Case No. 14-1341:  An appeal from a March 21, 2014 order by Judge Bernard A. Friedman of the U.S. District Court for the Eastern District of Michigan striking down Michigan’s ban on same-sex marriage as violating the Equal Protection Clause of the Fourteenth Amendment. 

Obergefell, et al. v. Himes, et al., Case No. 14-3057:  An appeal from a December 23, 2013 order by Judge Timothy S. Black of the U.S. District Court for the Southern District of Ohio requiring Ohio to recognize same-sex marriages on death certificates issued by the state.

Henry, et al. v. Himes, Case No. 14-3464:  An appeal from an April 14, 2014 order by Judge Black requiring Ohio to recognize valid same-sex marriages lawfully performed in states that authorize such marriages.

Bourke, et al. v. Beshear, et al., Case No. 14-5291:  An appeal from a February 12, 2014 order by Judge John G. Heyburn II of the U.S. District Court for the Western District of Kentucky ruling that Kentucky law denying recognition for valid same-sex marriages violates the Equal Protection Clause of the Fourteenth Amendment and requiring Kentucky to recognize same-sex marriages performed in other states.

Tanco, et al. v. Haslam, et al., Case No. 14-5297:  An appeal from a March 14, 2014 order by Judge Aleta A. Trauger of the U.S. District Court for the Middle District of Tennessee requiring Tennessee to recognize the marriages of three same-sex couples who were validly married outside the state.

Earlier this morning, the Sixth Circuit announced that the three-judge panel hearing these appeals will be Judges Daughtrey, Sutton, and Cook. 

A fully capacity crowd is expected at Potter Stewart Courthouse in Cincinnati on August 6, and thus the Sixth Circuit has issued a notice to the public and the media concerning the oral arguments.  The Court is designating two overflow courtrooms in which spectators will be able to hear live audio streaming of the oral arguments.

The Sixth Circuit stage is set, and we’ll be providing continuing coverage of these important appeals.

Temporal Proximity Alone Enough For Causation in Retaliation Claims, But…

Posted in News and Analysis, Recent Cases

The Sixth Circuit recently published yet another opinion to clarify the role of temporal proximity in the analysis of an employee retaliation claim.  When an employee engages in protected activity, such as reporting unlawful harassment, and faces an adverse employment action shortly thereafter, the “temporal proximity” between the two events serves as evidence of causation when the employee files a retaliation claim.  In Montell v. Diversified Clinical Services, the Sixth Circuit acknowledged some intra-circuit confusion as to whether temporal proximity alone was enough to demonstrate that the protected conduct caused the adverse employment action, and stated that “temporal proximity alone can be enough” to establish causation, reversing a grant of summary judgment in favor of the employer.

However, the facts of the case and the court’s own qualifications indicate that plaintiffs should not rely on temporal proximity alone to get them past summary judgment.  First, the court’s broad pronouncement arguably turned to dictum when it acknowledged that “Montell does not rely on temporal proximity alone,” and pointed to two specific post-protected-activity “efforts” by Montell’s supervisor to “undermine Montell at her worksite.”  Second, the court emphasized the degree of temporal proximity as key to establishing causation, and Montell faced her adverse employment action “the very next day” after engaging in protected activity.   A slightly more patient employer could easily distinguish this case.

On a separate note, this decision underscores how crucial it is for employers to not only keep a written record of poor performance, but to actually read that record and behave consistently with it.  Montell’s employer attempted to argue that its firing of Montell had been “previously contemplated,” which would have made Montell unable to rely on temporal proximity, regardless of how quickly she was fired.  And indeed, there was an extensive written record, “includ[ing] a PIP, documented oral counseling and development plan, a Final Warning, and an Amended Final Warning,” and demonstrating “that before each step was taken, there was discussion and consultation.”  That painstakingly laid paper trail was of no use, however, because the Amended Final Warning specified that Montell had until June 2, 2011 to improve or face termination and she was fired on May 20, 2011.  Thus, the court concluded that her firing “d[id] not accord with either the timing of the termination previously contemplated or with the manner in which that decision was being made.”  Had the employer simply reviewed its own performance records and waited two more weeks to discharge Montell, its grant of summary judgment might have remained intact.

Crystal Balls and Supreme Court Reversal Statistics

Posted in News and Analysis, Supreme Court

The Sixth Circuit has had lots of bad press over the past few years for its long string of reversals by the Supreme Court, mostly in habeas cases.  Over the past term, the Supreme Court has granted certiorari in 11 cases from the Sixth Circuit and reversed in all but 2.  While that sounds bad, it is only slightly worse than the average reversal rate for all circuits, which was 73% this year.  And four circuits fared worse than the Sixth by that metric.  Over the past few years the Supreme Court has taken significantly more cases from Sixth and Ninth Circuits.  This year fully one-third of the total cases from all circuits came from those two.  But this means little by itself.  As we have previously noted, the statistics must account for the fact that the Supreme Court’s decisions on circuit splits effectively overturn the decisions of many circuits.

SCOTUSblog has pointed to three recent papers (here, here, and here) that calculate reversal rates that account for all the circuits on each side of the splits resolved by the Supreme Court.  Each study uses its own timeframe and methodology, but all conclude the true differences in circuit reversal rates are much less important than would appear from the normal “win-lose” statistics cited in legal publications.  Surprisingly, the results of each study for individual circuits varied widely.  In one study, the D.C. Circuit had the worst record in one and nearly the best in another; the First Circuit had similar swings.  The Sixth and Ninth Circuit also varied, though neither ever rose above seventh place in the standings.

Interestingly, the studies came to wildly different conclusions on whether the Supreme Court usually sides with the majority in circuit splits.  One found that the majority approach was affirmed “90 percent of the time” and another found that the Court was just as likely to affirm the minority as the majority.  As shown by these three studies, attempting to determine which courts are more likely to be reversed is not an easy task—even when looking after the fact.    

What To Do About Sealed Documents On Appeal

Posted in News and Analysis

We often get questions about sealed documents on appeal.  This post sets out a few items that might not be obvious to someone new to the Sixth Circuit or that has not dealt with the issue in a while.  The most important thing to know is that if a sealed document has an entry on PACER that document is easily and fully accessible to the Court.  There is no need to include the document in an addendum, appendix, or other special filing.  You can even cite to those documents using the standard format:  (R.12, description, PageID123.)  But because PACER does not allow access to the version of the document with the PageID, you will often need to use the internal page numbering or other markings to direct the court to the relevant pages of the document.  If the document lacks page numbering, or will be cited many times in your brief, you may want to ask the case manager to send you a copy of the sealed document with the PageID numbering.

Sealed documents that do not have an entry on PACER should be treated as any other document not in the electronic record.  Documents that are important to the appeal and were obviously considered by the district court should be included in an appendix under 6 Cir. R. 10(b).  But remember that 6 Cir. R. 25(h) also requires that document sealed in a lower court be filed under seal in the Sixth Circuit.  It is also a good practice to ask opposing counsel whether they have an objection to the filing because Rule 10(e) states that the district court should resolve any questions about what is in the record.  If there is a dispute about what should be in the record, the Sixth Circuit will often stay the appeal and require you to ask the district court to resolve it.

Of course, a good first step on any sealing issue is to call the responsible case manager at the Sixth Circuit and explain what you are trying to do; they are very helpful and can often save you a lot of time.

The Sixth Circuit Applies Bartlett and Mensing to Preempt Claims Against Generic Drugmakers

Posted in Recent Cases

It’s been more than two years since we reported on the appeal in the Darvocet MDL (In re: Darvocet, Darvon and Propoxyphene Products Liability Litigation, No. 11-md-2226-DCR, MDL 2226), which involves claims against generic manufacturers of a generic equivalent of the drug Darvon.  The biggest news is that the panel did not decide whether to recognize claims for parallel misbranding, the theory suggested in the famous “Footnote 4” in Mutual Pharmacy Co., Inc. v. Bartlett, 133 S. Ct. 2466, 2477 n.4 (2013).  In such a claim, the plaintiffs would bring a state law claim that parallels the federal misbranding statute that requires a manufacturer to immediately stop selling an FDA-approved drug where new data, not considered by the FDA, shows additional potential for injury.  Judge Suhrheinrich’s opinion found that the plaintiffs had failed to plead such a claim under Iqbal, and set a high standard for pleading such claims.

The panel also applied Iqbal to dismiss claims that the generic manufacturers could be liable for failing to change their labeling soon enough after a change to the label by the brand-name manufacturer.  Failure-to-communicate claims and a host of other state law claims were dismissal under the preemption analysis under PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011).  Such claims against generic manufacturers often get a very tough reception in the Sixth Circuit.

Plaintiffs’ claims for false representations against the brand-name manufacturers fared no better.  They claimed that doctors relied on brand-name manufacturers’ representations when writing prescriptions for generic propoxyphene.  The Sixth Circuit noted that an “overwhelming majority” of courts has rejected this theory because such claims seek to circumvent state product liability statutes or no duty of care is owed to consumers of generic drugs.  The panel then found that the highest courts in all 22 relevant states would hold the same and included an appendix explaining its decision in each of the 22 jurisdictions.

The appeal resulted in a complete win for the generic manufacturers—only one of sixty-eight cases survived to be remanded (and that case involved the use of a brand-name drug).