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BREAKING NEWS: U.S. Supreme Court Agrees To Review Sixth Circuit’s November 6 Decision Upholding Same-Sex Marriage Bans

Posted in News and Analysis, Recent Cases, Supreme Court

The Sixth Circuit is in the national media spotlight this afternoon.  The U.S. Supreme Court has just agreed to review the Sixth Circuit’s landmark (but divided) ruling from November 6 that upheld same-sex marriage bans in Ohio, Michigan, Kentucky, and Tennessee.   See Opinion (6th Cir. Case Nos. 14-1341; 3057; 3464; 5291; 5297; 5818).  The stage is now set for a potentially historic ruling that once and for all may resolve the debate over same-sex marriage in the United States.

Oral arguments in this case likely will be in April, and the High Court already has extended the time that it usually allots for oral argument from one hour to two-and-a-half hours.  Expect a decision by the Court sometime in late June.

Sixth Circuit Sets Pleading Standard for FDCPA Claims

Posted in Recent Cases

Earlier this week, the Sixth Circuit issued a published opinion in Buchanan v. Northland Group, a putative class action against Northland alleging violations of the Fair Debt Collection Practices Act (FDCPA). In so doing, the Sixth Circuit reversed the district court’s dismissal of the case and remanded it for further proceedings, and in the process delineated the pleading standard for FDCPA claims in the Circuit.

As the court described, LVNV Funding purchases uncollectible debts at a discount from the various companies holding them, and then pays Northland Group to collect them. The present case started when Northland sent Buchanan a letter informing her that LVNV was holding a debt Buchanan owed to the tune of $4,700. The letter offered a “settlement” of the debt for about $1,600. The problem, however, was that the Michigan statute of limitations had run on the debt, and that any payment Buchanan made on the debt—less than the full amount—would restart the statute of limitations. Alleging that a “settlement offer” in light of this constituted a “false, deceptive, or misleading” debt-collection practice prohibited by the FDCPA, Buchanan sued on behalf of herself and others similarly situated.

The district court dismissed Buchanan’s complaint, concluding that, as a matter of law, Northland’s letter could not be “misleading” under the FDCPA. In reversing, the Sixth Circuit noted three points about the letter and the FDCPA. First, whether a letter is misleading under the FDCPA is a question of fact for a jury. Starting from that presumption, the court also noted that “the hurdle to proceed from pleading to discovery remains a low one,” and this favored Buchanan. Second, the court pointed out that Buchanan was prepared to present evidence as to how the letter was misleading, including a psychology expert and the Federal Trade Commission’s current studying of the issue. Finally, as to the issue of whether Northland’s letter was misleading, the court quoted extensively from dictionary definitions of “settlement” and held that Buchanan “offer[ed] a plausible theory of consumer deception and confusion that “nudge[d] her claims across the line from conceivable to plausible.”

However, the panel was not in agreement on these points. Judge Kethledge penned a firm dissent, in which he stated that he would have rejected Buchanan’s suit as a matter of law, maintaining that she sought damages under the FDCPA for “the trouble of reading a letter that offered her a discount on an entirely valid debt that for years she failed to pay.” Calling Buchanan’s reading of Northland’s letter “gossamer,” Judge Kethledge reasoned that her chain of inferences—from “settlement” to “litigation” to “enforceable debt” to “misleading representation under the FDCPA—was not only tenuous, but an implausible reading of the letter.

Debt collection can be a thorny issue, and although merely at the pleadings stage, this suit prompted a thoroughly litigated appeal and split decision by the Sixth Circuit. As such, one should be cautious not to read too much into a fact-dependent case that turns on the wording of a letter, but practitioners in the circuit should make note of the court’s view of the “low hurdle” from “pleading to discovery” that could impact future FDCPA cases. This case also reinforces the care with which such letters should be drafted to avoid litigation (meritless or not).

SCOTUS Declines to Hear Sixth Circuit Discrimination Case

Posted in Recent Cases, Supreme Court

In an order issued Monday (starting on page 27), the Supreme Court denied certiorari in the recent Sixth Circuit case of Kalamazoo County Road Commission v. Deleon. In so doing, the Court allowed the Sixth Circuit’s decision denying summary judgment for the defendant employer to stand. However, Justice Alito authored a strenuous dissent from the denial of certiorari, stating that he would have reviewed and reversed the Sixth Circuit’s decision as being “so far departed from the accepted and usual course of judicial proceedings . . . as to call for an exercise of this Court’s supervisory power” under Supreme Court Rule 10(a).

In Deleon, an employment discrimination case, the district court granted summary judgment for the defendant Commission. The order was based in part on the grounds that the plaintiff’s prior application and interview for the position to which he was eventually transferred “disqualifie[d] him from showing that the employment action [the eventual transfer] was truly ‘adverse.’” In reversing, the Sixth Circuit instructed the district court to apply the standard of “whether the ‘conditions of the transfer’ would have been ‘objectively intolerable to a reasonable person.’” By declining to intervene, the Supreme Court allowed the Sixth Circuit’s discrimination standard in that case to stand.

Justice Alito, however, objected strongly to the denial of certiorari, stating that he would have not only granted review, but also would have summarily reversed the Sixth Circuit. For Justice Alito, it was crucial that the plaintiff had applied for the position to which he was eventually transferred, and that he knew fully what it entailed. Justice Alito was also concerned with, in his opinion, the potential “floodgate” of employment discrimination litigation this decision will allow in the Sixth Circuit. The actual impact of Deleon in the Circuit, however, remains to be seen.

Out to Lunch in the Sixth Circuit: Guards Won’t Receive Overtime for Monitoring Radios at Mealtime

Posted in Recent Cases

Yesterday, the Sixth Circuit issued a published opinion in Ruffin v. MotorCity Casino, in which the court held that casino security guards’ meal breaks, during which they were required to stay on casino property and monitor their two-way radios, were not spent “predominantly for the employer’s benefit,” and so not compensable under the Fair Labor Standards Act.

Several security guards at MotorCity Casino sued their employer in the Eastern District of Michigan, alleging that they were entitled to overtime because the casino required them to “work” during their paid lunch. The guards, regularly scheduled to work weekly forty-hour shifts, claimed that a mandatory fifteen-minute roll call meeting prior to each shift meant they actually worked 41.25 hours each week, and so were entitled to overtime on the additional 1.25 hours under the FLSA. Underlying this claim was the guards’ allegation that their thirty-minute paid meal “breaks” actually constituted “work” because the casino restricted how they could spend those breaks, including requiring them to monitor their radios and respond in cases of emergency.

The district court granted summary judgment for MotorCity and, looking at the “totality of the circumstances,” the Sixth Circuit affirmed. The test for compensable time under the FLSA is whether an employee spends the time “predominantly for the employer’s benefit,” notwithstanding the designation of the time as a lunch or break period. In evaluating the plaintiffs’ appeal under the predominant benefit test, the Sixth Circuit looked to three factors: (1) whether the guards were engaged in the performance of substantial duties during their meal periods, (2) whether the casino’s business regularly interrupted the guards’ breaks, and (3) the guards’ inability to leave casino property during their breaks.

As to the first factor, the court held that the guards’ required radio monitoring and being available for emergencies was a “de minimis activity, not a substantial job duty.” As to the second factor of “regular interruptions,” the court emphasized the fact that three employees alleged a total of only eleven interrupted meal periods over a collective eighteen years of employment. On the final factor, the Sixth Circuit noted that the casino’s requirement that the guards stay on the property during meals did not “convert meal break time into compensable working time” because the employees spent their breaks “doing exactly what one might expect an off-duty employee to do” on break: eat, read, use the internet, and conduct personal business.

Although this case is perhaps not groundbreaking for the proposition that, absent other substantial job duties, radio monitoring during meal breaks is non-compensable, it is worth noting the extent to which the Sixth Circuit relied on other circuits’ precedent regarding the “totality of the circumstances” in reaching its conclusion. Finally, it also emphasizes that employees bear the burden of proving that their meal periods are compensable, and that more than just a few examples or instances are needed to demonstrate a “working lunch.”

Sixth Circuit Holds Grand Ole Opry Cannot Recover for Flood Damage

Posted in Recent Cases

In a published opinion earlier this month, the Sixth Circuit affirmed a Tennessee district court’s dismissal of the Grand Ole Opry’s negligence action against the United States government for flood damages to the Opry in 2010. In dismissing the $326 million suit, the court held that the “discretionary function” exception to the Federal Tort Claims Act (FTCA) provided the government with immunity for any damages arising from the flood and explained the circuit’s law regarding exactly what “government discretion” means in the context of the FTCA.

The company that runs the Opry, as well as several hotel and insurance groups, sued the U.S. government over the Army Corps of Engineers’ actions with respect to the Old Hickory dam, which the plaintiffs alleged resulted in significant damage to the Opry and surrounding buildings during a severe storm in May 2010. The plaintiffs sued under the FTCA, alleging that Army Corps’ negligent operation of the dam during the storm and its failure to follow flood protocols resulted in massive amounts of water being released into the Cumberland River and flooding parts of Nashville. Although the district court relied on both the Flood Control Act’s grant of immunity and the discretionary function exception to the FTCA, the Sixth Circuit relied only on the FTCA exception in affirming the dismissal of the suit.

The Sixth Circuit first laid out the law on the discretionary exception function, as defined by the Supreme Court in 1991 in United States v. Gaubert. Under Gaubert, the government retains immunity from suit in tort if the tort is a result of conduct that is: (1) “discretionary” and “not controlled by mandatory statutes or regulations,” and (2) “the kind [of discretion] that the discretionary function exception was designed to shield . . . i.e., susceptible to policy analysis.” Weighing each of the plaintiffs’ arguments in turn, the appellate panel held that: (1) the Corps’ was permitted but not required to engage in a “pre-flood drawdown” of water in the reservoir behind the dam; (2) the Corps was not required to discharge more water from the reservoir in anticipation of the storm; (3) although protocols told the Corp how and when to implement storm precautions, the protocols did not mandate whether the Corps was obligated to undertake the precautions; and (4) the Corps was not legally required to warn downstream inhabitants prior to discharging the damaging flood waters from the dam. The court also noted that the plaintiffs could not maintain their suit on the grounds that regulations required the Army Corps District Water Manager to stay at his post for two straight days during the storm.

In so holding, the Court emphasized the broad discretion that government has in acting on and implementing regulations. The Court also explained that unless statutes or regulations impose a clear obligation on the acting government agency, the agency retains a reasonably broad immunity from suit over actions within its discretion, and that discretion itself provides a “strong presumption” that Gaubert’s policy-implementation prong is met.

Sixth Circuit Rejects “He Started It” Challenge to Child Exploitation Conviction

Posted in News and Analysis, Recent Cases

In USA v. Wright today, the Sixth Circuit joined the First, Second, Fourth and Eighth circuits in holding that photographing  a minor engaging in sexually explicit conduct suffices for a child pornography conviction under 18 U.S.C. § 2251(a), which provides that “Any person who employs, uses, persuades, induces, entices, or coerces any minor to engage in . . . any sexually explicit conduct for the purpose of producing any visual depiction of such conduct, shall be punished.”

The appellant-defendant argued that, although he photographed a minor’s sexually explicit conduct, he did not “use” the victim because he did nothing to induce or cause the minor’s actions.  According to the defendant, the minor himself had “initiated the nude photography sessions.”  The Court distinguished a Ninth Circuit case as inapplicable, concluding that there was “no circuit split,” and  that simply taking the photographs in that situation was enough to sustain the conviction.

In defining the word “use,” the Court stuck to the basics of statutory interpretation: giving undefined words their “ordinary meaning” and taking Congressional intent into account.  It rejected the defendant’s attempt to import a narrower definition of “use” from a federal “mandatory minimum” law penalizing “use” of a firearm, 18 U.S.C. 924(c)(1), and did not apply any other canons or interpretive principles.

Finding Ohio Withheld “Small Mountain of Exculpatory Evidence,” Sixth Circuit Affirms Habeas Grants In 1992 Boy’s Murder

Posted in News and Analysis, Recent Cases

The Sixth Circuit affirmed conditional grants of habeas in the Ohio cases of Gumm v. Mitchell and Bies v. Sheldon yesterday, finding in both cases that the government withheld exculpatory evidence from the defendants in violation of Brady v. Maryland.  Gumm and Bies were convicted of the 1992 murder of ten-year old Aaron Raines of Cincinnati, and sentenced to death, with Bies’s death sentence eventually replaced by consecutive life sentences due to his intellectual disability.

The court described the Brady violations as “egregious,” noting that evidence withheld included “a substantial collection of tips, leads, and witness statements relating to other individuals who had been investigated for the murder––two of whom had apparently confessed to the crime, and neither of whom was ever ruled out as the perpetrator,” and that “[t]he State also withheld witness statements that undermine the State’s theory of the case and information that could have been used to further impeach two of the State’s witnesses.”

The petitioners’ Brady claims had not been adjudicated on the merits by Ohio courts, and therefore the Sixth Circuit was able to review the Brady claims de novo.  In Gumm, the Court also affirmed the grant of habeas on the ground of prosecutorial misconduct, also under de novo review. Petitioners only had to demonstrate that they were constitutionally entitled to a new trial, and did not have to meet the high threshold of “AEDPA deference,” which applies only to claims adjudicated by state courts on the merits and permits grants of habeas only where the state court “unreasonably applied clearly established federal law.”  In Gumm, where the Ohio Court of Appeals had briefly discussed the merits of the Brady claim in dictum,  the Sixth Circuit declared that, even under AEDPA deference, the Ohio court’s “measly statement regarding the merits of Petitioner’s Brady claim constituted an unreasonable application of clearly established federal law.”  Judge Moore, who otherwise joined in the majority opinion in Gumm, wrote separately to say that it was not necessary to reach the question of whether Gumm’s Brady claim would have survived AEDPA deference.

Unless the State of Ohio can get the Supreme Court to take its side, it will have to choose between retrying Gumm and Bies and releasing them. We have previously reported on how Sixth Circuit grants of habeas fared at the Supreme Court and will continue to follow this case if a petition for cert is filed.

Do Mental Health-Based Gun Restrictions Punish Mental Illness And/Or Involuntary Commitment?

Posted in News and Analysis, Recent Cases, Supreme Court

This is the second in a series of posts discussing Tyler v. Hillsdale, the first case since Heller to strike down a federal gun law. The first post is here.

One of the four “potential limiting principles” the Court offered for its Second Amendment analysis, is that Section 922(g)(4)—which permanently bars those previously involuntarily committed to a mental institution from possessing firearms—“punishes potentially non-volitional conduct.”  The Court described the prohibition as “target[ing] the non-volitional act of being committed,” and pointed out that “[t]he underlying behavior that prompted the commitment may also be non-volitional.” The Court appeared to be suggesting that, by barring the previously committed from possessing guns, Section 922(g)(4) “made a criminal offense of mental illness.” See p.43 n.38 (quoting Robinson v. California, 370 U.S. 660, 666 (1962) (striking down a state law criminalizing simply “be[ing] addicted to . . . narcotics”)).

Although the Court appeared to view Section 922(g)(4) as punishing mental illness, it did recognize that the “compelling interests” served by Section 922(g)(4) are the prevention of crime and suicide, see p.27-28, (as opposed to punishment). It would seem then that strict scrutiny’s narrow-tailoring analysis could be satisfied by demonstrating that the regulated class reasonably captures those who are a danger to themselves or others, even if the danger is not volitional on the part of class members.  It does not seem likely that the Court would strike down a law banning gun possession by the involuntarily dangerous.

Given the Court’s description of the volitional/non-volitional distinction as a “limiting principle,” perhaps its rationale was that volitional conduct acts as a sort of Second Amendment waiver.  In other words, when a class is defined by some volitional conduct, its firearm possession may be constitutionally restricted even if evidence of the class’s danger is not quite strong enough to satisfy strict scrutiny, because the members can choose whether or not to engage in the conduct.  If so, it will be interesting to see how that principle would be applied in a situation where the volitional conduct in question is legal—a possibility that must have been contemplated by the Court, which listed the distinction between law-abiding and non-law-abiding individuals as a separate limiting principle.

Sixth Circuit Holds Ban On Gun Possession After Commitment To Mental Institution Violates Second Amendment

Posted in News and Analysis, Recent Cases, Supreme Court

In Tyler v. Hillsdale Cnty. Sheriff’s Dep’t, a case sure to draw attention nationwide, the Sixth Circuit held today that “’a prohibition on the possession of firearms by a person “who has been committed to a mental institution,’ . . . violates the Second Amendment.”

The court held that the the plaintiff, who “[t]wenty-eight years ago. . . was involuntarily committed for less than one month after allegedly undergoing an emotionally devastating divorce” could not  constitutionally be barred for life from possessing a firearm.

Arguably the most noteworthy aspect of the decision is that the Sixth Circuit applied strict scrutiny to the law, acknowledging that it was “join[ing] a . .. minority view,” and citing only dissents and concurrences in support of its “emergent” position.  The Court catalogued but rejected precedent from nine other circuits applying “heightened” or intermediate scrutiny.

The Court acknowledged that it was the first court of appeals to “sustain[] a Second Amendment challenge to a federal firearms regulation since Heller was decided.  The provision in question, 18 U.S.C. 922(g)(4), bars anyone “adjudicated as a mental defective” or “who has been committed to a mental institution” from possessing firearms for life.  This is just one of a laundry list of bans in Section 922(g), which also bans firearm possession by misdemeanor domestic violence offenders, fugitives, and drug users, as well as other classes.

The Court held that, although Heller approved prohibitions on gun possession by the mentally ill, this did not extend to prohibitions on gun possession by those merely “ever previously mentally institutionalized.”  The 73 year old plaintiff, Clifford Tyler, had been involuntarily committed 28 years prior, for less than one month, allegedly due to suicide risk.  A 2012 psychological evaluation attributed the commitment to a “brief reactive depressive episode” and concluded that there was no evidence of mental illness.  In dictum, the Court reluctantly “suppose[d],” that, based on Heller, Section 922(g)(4) was constitutional as to those “adjudicated as a mental defective.”

The Court determined that strict scrutiny was appropriate. It held—alone and in opposition to nine other circuits—that strict scrutiny should be presumed when a “fundamental right” was at stake, and only “downgraded” to intermediate scrutiny for an “expressly indicated” reason.  The Court also noted that the Heller majority rejected Justice Breyer’s dissent advocating intermediate scrutiny.  Finally, the Court stated flatly that “intermediate scrutiny . . . has no basis in the Constitution.” The Court also attempted to downplay the significance of this choice by describing the choice between intermediate and strict scrutiny as “more important in theory than in practice” and predicting that the choice would not affect the outcomes of similar challenges before other courts.  Judge Gibbons, writing to concur, expressed “substantial doubts” about the decision to apply strict scrutiny and pointed out that it was unnecessary to decide the appropriate degree of scrutiny because the claim would have been viable under intermediate scrutiny also.

Applying strict scrutiny, the Court held that Section 922(g) furthered a compelling interest, but that it was too broad.  Although it approved the portion of Section 922(g)(4) that prohibited those “adjudicated-as-a-mental-defective” from possessing firearms, it held that the broader class of “persons previously committed to a mental institution” was not sufficiently dangerous.  For the latter conclusion, the Court relied on Congress’s decision to establish criteria for optional state “relief-from-disabilities-program[s] for individuals subject to § 922(g)(4)’s prohibition.”  The Court read that as a “conce[ssion]” by Congress that “the previously institutionalized are not sufficiently dangerous, as a class, that it is necessary to deprive all class members of firearms.”

This is just a brief recap of the main points. There is much more to say about the Court’s analysis, its many dicta—the opinion discusses similar prohibitions on firearm possession by illegal aliens, domestic violence offenders, persons under 21, subjects of domestic restraining orders, and drug users and addicts—and the many potential ramifications of this decision.  Although it is most obviously a Second Amendment decision, its critical analysis of sweeping generalizations regarding mental illness and institutionalization could easily resonate more broadly, making it easier, for example, to challenge policies that bar people with certain mental health histories from government jobs.

Needless to say, the cert petition for this case practically writes itself.  We will continue exploring both the Court’s reasoning and the potential effects of this decision in future posts.

Sixth Circuit Follows The Majority Of Circuits In Holding That Informal Warnings Do Not Satisfy Rule 11’s Safe Harbor Provision

Posted in Recent Cases

Until last Friday, the question of whether an informal warning letter satisfied Rule 11’s safe harbor provision was unsettled in the Sixth Circuit.   In Penn, LLC, et al. v. Prosper Business Development Corporation, et al. (6th Cir. Case No. 14-3108) (PDF), the Sixth Circuit panel followed the Second, Fifth, Eighth, Ninth, and Tenth Circuits in holding that an informal warning in the form of a letter without service of a separate Rule 11 motion does not trigger the 21-day safe harbor period provision under the rule.  The lone Circuit espousing a contrary position is the Seventh Circuit.

The 21-day safe harbor provision in Rule 11(c)(2) of the Federal Rules of Civil Procedures states in relevant part:

A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b).  The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. . . .

After plaintiffs sued defendants and defendant’s law firm in Penn, the defendant law firm served plaintiffs’ firm with a letter on December 6, 2010 that purported to satisfy “the obligations of . . . Fed. R. Civ. P. 11” and threatened to seek sanctions “if the captioned matter [was] not dismissed before the first answer date of December 20, 2010.”  Plaintiffs’ law firm rejected the allegations of impropriety and stood by its complaint.  On May 27, 2011, the district court granted the defendant law firm’s motion to dismiss all the claims against it.  Nearly two weeks later, on June 8, 2011, the defendant law firm served plaintiffs’ law firm with a proposed motion for Rule 11 sanctions.  The plaintiffs’ firm opposed the motion by arguing, among other things, that the defendant law firm’s service of a copy of the motion post-dismissal failed to comply with Rule 11’s safe harbor provision, thus making sanctions unavailable.  The defendant law firm countered that its December 6, 2010 letter satisfied the rule.  The district court ended up denying the motion on the merits by holding that the allegations in the complaint were not so deficient to necessitate sanctions.  The district court bypassed the Rule 11 safe harbor issue, calling it “somewhat unsettled.”

On appeal, the Sixth Circuit affirmed by holding that the defendant law firm’s December 6, 2011 letter failed to satisfy Rule 11’s safe harbor provision.  In an opinion written by Judge Cook, the panel made clear that Rule 11 “specifically requires formal service of a motion.”  The panel also highlighted policy grounds that supported its decision, noting that Rule 11’s safe harbor provision was designed “to reduce Rule 11’s volume, formalize appropriate due process considerations of sanctions litigation, and diminish the rule’s chilling effect.”  The panel stated that “[p]ermitting litigants to substitute warning letters, or other types of informal notice, for a motion timely served pursuant to Rule 5 undermines these goals.”  The panel observed that “[w]hereas a properly served motion unambiguously alerts the recipient that he must withdraw his contention within twenty-one days or defend it against the arguments raised in that motion, a letter prompts the recipient to guess at his opponent’s seriousness.”

Penn is a good case illustrating how the Sixth Circuit is free to affirm a judgment on any basis supported by the record.  While the district court in this case had denied the defendant firm’s Rule 11 motion on the merits, the Sixth Circuit affirmed on an alternative procedural ground, which was much narrower and based solely on the application of legal propositions to the undisputed facts.  

Notably, the panel also declined to follow three of the Sixth Circuit’s unpublished decisions establishing that a warning letter satisfies Rule 11’s safe harbor provisions.  The panel stated that “these unpublished decisions neither bind us nor persuade us to forsake the benefit to bench and bar afforded by requiring strict compliance with Rule 11’s clear text.”

The bottom line is that there finally is clarity in the Sixth Circuit on Rule 11’s safe harbor.