Sixth Circuit Issues Nationwide Stay Blocking Federal Regulation Over Water and Wetlands

The Sixth Circuit is making national headlines today after ordering a nationwide stay that temporarily will block the so-called Waters of the United States (WOTUS) rule finalized back in May by the Environmental Protection Agency and the U.S. Army Corps of Engineers.  See In re EPA and DOD Final Rule; “Clean Water Rule: Definition of Waters of the United States,” 80 Fed. Reg. 37,054 (June 29, 2015), Case Nos. Nos. 15-3799/3822/3853/3887.  The new clean water rule is intended to clarify the definition of “waters of the United States,” as used in the Clean Water Act, 33 U.S.C. § 1251 et seq., to make it more predictable which waterways the EPA and the Corps of Engineers may regulate.  Critics, however, decry the water regulations as a federal “power grab” that fail to satisfy federal notice-and-comment requirements.


Today’s 2-1 ruling by the Sixth Circuit expands on a preliminary injunction issued by a North Dakota district court that stayed operation of the new clean water rule in 13 states.  See North Dakota v. EPA, No. 3:15-cv-59 (D.N.D. Aug. 27, 2015) (PDF).  Indeed, the Sixth Circuit’s decision was influenced by the fact that there already was a stay in over a dozen states.  The panel majority stated that its decision to impose a nationwide stay “temporarily silences the whirlwind of confusion that springs from uncertainty about the requirements of the new Rule and whether they will survive legal testing.”  The stay will remain in place while the Sixth Circuit considers whether it has subject matter jurisdiction over the matter.


Judge Keith dissented from today’s order, stating that “it is not prudent for a court to act before it determines that it has subject-matter jurisdiction . . . .”  As Judge Keith stated: “If we lack jurisdiction to review the Rule, then we lack jurisdiction to grant a stay.”


We’ll continue to monitor this case to see what the Sixth Circuit does next, and it won’t take long.  As the Court noted in today’s opinion, “[b]riefing on the jurisdictional question will be completed and the question ripe for decision in a matter of weeks.”




En Banc Update: NLRB Tribal Dispute

We have been following a pair of Sixth Circuit cases concerning the NLRB’s jurisdiction over tribal casinos.  In the first case, NLRB v. Little River Band of Ottawa Indians Tribal Government, a split panel determined that the NLRB could block a Michigan tribe’s restrictions on organized labor in its casinos.  In the second case, Soaring Eagle Casino and Resort v. NLRB (which came out shortly after the first) the panel determined that it was bound by Little River, but all three panelists agreed that Little River was wrongly decided.  As a result, the law in the Sixth Circuit rests on a decision that was supported by only 2 of the 6 panelists to consider the issue, an oddity which we noted might lead to en banc review.

Petitions were filed in both cases and, just recently, the Court denied en banc review of the decision in Little River.  However, an en banc determination has not yet come down with respect to Soaring Eagle.   We will continue to monitor the situation, which will either lead to an interesting en banc review or highlight just how restricted en banc review is becoming.



Sixth Circuit Revives “Juggalo” First Amendment Lawsuit

In 2011, the National Gang Intelligence Center—part of the FBI—included fans of the band “Insane Clown Posse,” also known as “Juggalos,” in its report on gang activity, describing Juggalos as a “hybrid gang” and claiming that “Juggalo subsets exhibit gang-like behavior and engage in criminal activity and violence.”  Six plaintiffs (four Juggalos and the two members of ICP) filed suit against the DOJ and FBI, alleging, among other things, that the 2011 report violated their First Amendment rights to free speech and association and Fifth Amendment right to due process.  The district court dismissed their suit for lack of Article III standing.  However, in a unanimous decision issued earlier today, Parsons v. USDOJ, the Sixth Circuit held that the Juggalos had standing to proceed on their claims.

The Sixth Circuit found that a Juggalo serving in the Army with visible ICP tattoos alleged sufficient injury for standing because allegations of stigmatization and reputational injuies accompanied his belief that “because of the Juggalo gang designation, his identity as a Juggalo ‘places him in imminent danger of suffering discipline or an involuntary discharge.’” And the court rejected the government’s argument that the injuries of the other five plaintiffs—the cancellation of a music event, denial of an Army recruitment application, and brief police detentions and questioning—was not “fairly traceable” to the report because those decisions were made by independent third parties exercising their own judgment and were not explicitly dictated by the FBI or DOJ.  The court explained:

[I]t is still possible to motivate harmful conduct without giving a direct order to engage in said conduct. The Juggalos allege that the injurious third-party actions were motivated by the DOJ gang designation. In the nebulous land of “fairly traceable,” where causation means more than speculative but less than but-for, the allegation that a defendant’s conduct was a motivating factor in the third party’s injurious actions satisfies the requisite standard.

The court took pains to emphasize that its “conclusion is based upon the allegations made in the Complaint” and that it should not be construed as an opinion “as to the 12(b)(6) motion to dismiss or the merits of the case.”  However, regardless of how this particular case plays out, the Sixth Circuit has demonstrated that it is willing, in principle, to recognize that informational reports issued by government agencies can cause concrete harm and injury to the groups and/or individuals discussed therein.

Foreign Law In the Sixth Circuit

Some trial court judges are reluctant to apply foreign law or to enforce an international forum selection clause, but such decisions generally cannot survive appellate scrutiny.  These decisions are becoming increasingly prevalent and may reflect the recent debate about whether and how American judges should apply to foreign law or defer to foreign proceedings.  The “American Laws for American Courts” movement has gained momentum, at one extreme, while Justice Breyer argues, at the other, that foreign decisions can help interpret the Constitution itself.  This post takes a brief look at the Sixth Circuit’s practice with applying foreign law.

Looking at the numbers, the Sixth Circuit’s docket has become increasingly international.  Lexis searches show that the court’s transnational docket was minimal until the 1980s, but has exploded since the late 1990s—roughly half of the cases involving foreign law from the circuit’s entire history have occurred in the past fifteen years.  A review of these case also shows that the circuit is taking increasing pains to understand and correctly apply foreign law.  For example, in Murphy v. Lazarev, 589 Fed. Appx. 757, 766 (6th Cir. 2014), the court appears to have done its own research to find and apply provisions of the Russian Civil Code to resolve a copyright licensing dispute.  The panel relied on Civil Rule 41’s statement that “[i]n determining foreign law, the court may consider any relevant material or source . . . whether or not submitted by a party.”  Other decisions delve deeply into Japanese contract law, Servo Kinetics, Inc. v. Tokyo Precision Instruments Co., 475 F.3d 783, 790 (6th Cir. 2007), or rely on English decisions to interpret Romanian law, General Star Nat’l Ins. Co. v. Administratia Asigurarilor De Stat, 289 F.3d 434, 440 (6th Cir. 2002).  The circuit also does not hesitate to find that other forums, such as Gibraltar, are not “ineffective or unfair” despite their differences with our system.  See Wong v. PartyGaming, Ltd., 589 F.3d 821, 829 (6th Cir. 2009).  Along similar lines, the Sixth Circuit has taken a conservative approach to foreign anti-suit injunctions, granting greater weight to international comity than those circuits that allow district courts to more easily enjoin foreign litigation.  Compare Gau Shan Co. v. Bankers Trust Co., 956 F.2d 1349 (6th Cir. 1992), with E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984 (9th Cir. 2006).

One common denominator in all of these cases is that the Sixth Circuit requires parties to submit more than just a photocopied page of a foreign statute. The panel in Tschira v. Willingham, 135 F.3d 1077, 1084 (6th Cir. 1998), chided the parties for not providing translated copies of the relevant German statutes, and then conducted its “own exploration of German law on the subject.” When foreign law will be a contested issue, the best practice is to submit a detailed expert opinion along with translations of the cases or statutes relied on by the expert.


Sixth Circuit Breaks New Ground In Cost-Shifting

Circuit courts do not frequently address issues of costs at the district court level. However, in Freeman v. Blue Ridge Paper Products, Inc., a divided panel of the Sixth Circuit became the first circuit authority in the country to find that renting a conference room to conduct depositions qualifies as a taxable cost.  The case involved the cost of a hotel conference room that saved the witnesses 50 miles of travel each way to counsel’s office.  The Court reasoned that, because the cost of renting the conference room replaced the witness’s otherwise taxable travel costs, it too was taxable to the extent it mitigated those costs.

In a short dissent, Judge Sutton disagreed on this point, maintaining that conference room rentals are not enumerated in Congress’s statutory regime and noting the expansive potential of the Court’s rationale.  Giving a couple colorful examples, Judge Sutton suggested that the Court’s rationale also applies to the purchase of Rosetta Stone software so as to save on interpreter fees and the cost of buying the latest gadget that could potentially reduce copying and transcript expenses.

The Court did not publish its decision, so the full impact of it remains to be seen.  But it may certainly encourage parties to become creative with their costs arguments at the district court level.

Consensual Debt Collection Calls in the Sixth Circuit

The Telephone Consumer Protection Act (TCPA), which, as we’ve reported, has been litigated a fair amount in the Sixth Circuit in recent years, was under scrutiny again last week in Hill v. Homeward Residential, Inc.

As the court outlined, the case primarily concerned what “prior express consent” means in the context of the TCPA and whether a debtor’s provision of his cellular telephone number to his creditor can prevent the debtor from recovering under the TCPA for unwanted calls related to his debt. Over the course of a decade, Stephen Hill provided his cellphone number to Homeward’s predecessor in interest and eventually to Homeward in connection to the mortgage he owed Homeward. After falling behind on the mortgage, Hill allegedly received 482 calls from Homeward about the debt from 2009 to 2013.

Hill sued Homeward for these calls under the TCPA, which prohibits the use of auto-dialers without prior express consent, and provides a hefty minimum penalty of $500 per violation. Relying on the FCC’s rules promulgated under the TCPA, the district court instructed the jury that “autodialed . . . calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt” do not violate the Act as they are made with the “prior express consent” of the debtor. The jury returned a verdict for Homeward, and a unanimous Sixth Circuit affirmed. Hill attempted to argue that only a number provided when the debt was incurred could constitute express consent, but the court pointed out that no such language exists in the TCPA. Further, the court reasoned that the FCC’s rules in this regard clarify that a creditor may call a number provided by the debtor only in connection with the debt (not other topics), but that the provision of the number at any time constitutes consent to live and automated calls regarding the debt.

Judge Clay wrote separately to emphasize that the decision did not outright affirm the FCC’s rules on this issue, nor did it foreclose a later challenge to what he proposed is a dubious interpretation of the TCPA by the FCC.

Sixth Circuit Assesses Class Action Criteria in Digestive Drug Litigation

The importance of class definition was on display last week at the Sixth Circuit, in a case producing three separate opinions. In Rikos v. The Procter & Gamble Company, a divided court affirmed the certification of classes covering five states and nearly half a decade of purchasers P&G’s digestive health drug Align, and in the process added to the (somewhat confusing) map of the post-Dukes and Comcast class action landscape.

Early last year, the plaintiffs sought—and the district court certified—five single-state classes led by three plaintiffs who purported to represent the purchasers of P&G’s digestive bacterial fortification drug Align. The plaintiffs alleged violations of various state laws on unfair competition and deceptive trade practices on the basis that the drug did not comport with P&G’s marketing claims about its efficacy. On appeal, P&G’s primary challenges to class certification included arguments regarding the commonality and typicality requirements of 23(a), the predominance requirement of 23(b)(3), and the developing doctrine of ascertainability.

The court rejected P&G’s claim that “[Wal-Mart v.] Dukes requires that named plaintiffs present evidence proving that class members suffered an actual common injury to establish commonality,” holding rather that the issue was “whether Plaintiffs have shown . . . that they can prove—not that have already shown—that all members of the class have suffered the ‘same injury.’” Finding the plaintiffs’ claim that Align simply did not work for anyone was a common question with a common answer and was adequate in light of Dukes, the court turned to typicality. On this point, the court concluded that some consumers’ satisfaction with Align was irrelevant to class certification. The court held that the typicality requirement was satisfied by the district court’s conclusion that the appropriate inquiry was “’whether the purchaser received the product that was advertised.’”

In its analysis, the Sixth Circuit declined to follow Carrera v. Bayer, the recent Third Circuit case overturning class certification due to the class’s “unascertainable” nature, citing criticism of the case by other circuits, the Third Circuit’s own subsequent limitation of the case, and the ready ascertainability of the Rikos classes. It also distinguished Carrera on its facts.

Judge Cohn penned a short concurrence, encouraging bifurcation of the case in order to assess Align’s health benefits on the merits as soon as possible and so dispose of the case. However, Judge Cook dissented from certification overall, arguing that the plaintiffs had merely pleaded, not proven, Rule 23’s requirements, in contravention of Comcast, Amgen, and Dukes. This is a key issue that has engendered much confusion in the caselaw in the wake of these Supreme Court decisions. Finally, the dissent found that the district court impermissibly shifted Rule 23’s burden to P&G to disprove commonality, and that an examination of the drug’s efficacy was a necessary intrusion into the merits of the case in line with the Supreme Court’s “rigorous analysis” jurisprudence.

Stunning Result: Sixth Circuit Finds No Duty to Warn for Taser

In a divided 2-1 decision, the Sixth Circuit affirmed summary judgment for Taser related to failure to warn claims arising out of the death of an individual who had been tased.  Mitchell v. City of Warren.  Before reaching the merits, the majority opinion, written by Judge Sutton, provides an overview and history of Taser products.  Relevant to the case at hand, the majority discussed certain literature related to the potential risk of cardiac episodes as a result of being tased in the chest.  The Court, however, emphasized that generic knowledge of risk isn’t sufficient:  “The plaintiff must show that a manufacturer knew or should have known its product posed the particular risk at issue in case.”  On this point, the Court found plaintiff’s claims inadequate because it did not establish anything more than a possibility that the particular harm would occur:  “We have refused to rely on studies establishing that the product can possibly cause an injury to prove that a product probably caused the injury.”  Accordingly, after the surveying the evidence, the Court affirmed the failure to warn claim.

The plaintiff also argued that Taser had a post-sale duty to warn, but the majority rejected this claim as well:  “If Taser had no such duty to warn based on the pre-sale information available, it could not be liable if later studies suggested safer ways to design and market its products.”  The Court emphasized the statutory language in Michigan’s product liability statute and expressed an unwillingness to go beyond the contours of the statute to recognize plaintiff’s post-sale warning claim.

In dissent, Judge Donald criticized the majority’s portrayal of the facts, insisting that the majority “improperly usurps the role of the fact finder.”  Focusing on the pre-sale duty to warn, Judge Donald found the majority too quick to dismiss the record evidence bearing on the risk of harm.  Fundamentally, she claimed that the majority was setting the bar too high on a duty to warn:  “Simply because a particular risk does not boast medical certainty does not automatically render the risk speculative or theoretical.”  Judge Donald also relied extensively on a Fourth Circuit decision that the majority declined to follow.

Although confined to Michigan law, the competing analyses of duty to warn claims in the Sixth Circuit certainly carry relevance far beyond the instant opinion.  These opinions further illustrate the tension over what evidence suffices to show that a product likely caused the injury at issue, and whether those claims can reach a jury.

Sixth Circuit Follows Six Other Circuits In Upholding Obamacare’s Contraception Mandate Accommodation Against Religious Freedom Challenge

The Affordable Care Act’s contraception mandate is back in the news.  Last Friday, the Sixth Circuit made headlines when it joined six other Circuits in upholding the accommodation scheme for religious non-profits that object to the contraception mandate.  See August 21, 2015 Opinion, Michigan Catholic Conference, et al. v. Burwell, et al. (6th Cir. Case Nos. 13-2723/6640) (PDF).  As we previously have covered in-depth, the contraception mandate is the requirement under the federal health care statute that requires employers to cover contraceptives in their employee health care plans.  In its August 21 opinion, the Sixth Circuit re-issued and re-affirmed its earlier decision from June 2014 in which the Court, in a 3-0 opinion written by Judge Moore, affirmed decisions by Michigan and Tennessee district courts denying preliminary injunctions to the plaintiffs on all their claims against the contraception mandate.  See June 11, 2014 Opinion, Michigan Catholic Conference, et al. v. Burwell, et al. (6th Cir. Case Nos. 13-2723/6640) (PDF).

Despite their June 2014 loss, the plaintiffs’ challenge was back before the Sixth Circuit because the plaintiffs petitioned for a writ of certiorari that focused on whether the accommodation provision violated their rights under the Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. §§ 2000bb, et seq.  On April 27, 2015, the U.S. Supreme Court granted the plaintiffs’ petition, vacated the Sixth Circuit’s June 2014 judgment, and remanded the case back to the Sixth Circuit for further consideration in light of the High Court’s high-profile decision in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), which held that family-owned for-profit companies with sincerely held religious beliefs are not required to comply with the contraception mandate.

In Friday’s 3-0 opinion, once again penned by Judge Moore, the Sixth Circuit panel considered the impact of Hobby Lobby but adhered to its original June 2014 disposition of the case. The panel explained that while the Supreme Court in Hobby Lobby had held that the federal government cannot force closely held companies with sincere religious objections to provide contraception coverage to their employees, “that issue is fundamentally different from the issue at the heart of this case—whether an entity’s decision not to provide such coverage by exercising an accommodation [under federal law] is, by itself, a violation of that entity’s religious beliefs.” The panel explained that in its original June 2014 opinion, it upheld the accommodation against a RFRA challenge, and “[n]othing in Hobby Lobby changes this analysis.”

To bolster its decision, the Sixth Circuit panel highlighted how six other circuits have addressed whether the accommodation passes muster under the RFRA, and all six have upheld the accommodation. All six, moreover, have held that Hobby Lobby does not compel a contrary conclusion.

Although it is likely that plaintiffs once again will petition for a writ of certiorari before the Supreme Court, they have several substantial hurdles to clear.  For one thing, there is no Circuit split.  The Sixth Circuit’s August 21 decision now means there are seven Circuits all holding that accommodation passes muster under RFRA.  In addition, as the Sixth Circuit panel noted in its opinion on Friday, the Supreme Court in Hobby Lobby “discussed the accommodation favorably” (though not definitively), and it never suggested that it violated RFRA.

We’ll of course continue to follow any appeal to the Supreme Court.

Sixth Circuit Gives Copyright Protection To Cheerleading Uniforms

The Sixth Circuit recently explored the question, what makes a cheerleading uniform a cheerleading uniform?  Can it serve its function without stripes, chevrons, zigzags, and colorblocks?  In the district court, Varsity Brands, Inc. sued Star Athletica, LLC, claiming that Star copied Varsity’s copyrighted designs for cheerleading uniforms.   Star countered that Varsity did not hold valid copyrights to the designs.  The district court agreed, granting summary judgment for Star.  In Varsity Brands et al v. Star Athletica, in a divided decision, the Sixth Circuit reversed.  Judge Moore, writing for the majority, concluded that Varsity’s designs are protectable under the Copyright Act.  Along the way, the court addressed several unsettled issues of copyright law in the Sixth Circuit.

First, the court resolved what level of deference is owed to the Copyright Office (which initially approved Varsity’s copyright registrations).  That determination, the court concluded, is entitled to Skidmore deference, not the higher Chevron deference.  In light of the Copyright Office’s experience, published manual, and consistent treatment of Varsity’s designs, the court applied a presumption in favor of copyright validity.

Next, the court examined whether the designs were protectable. A cheerleading uniform, the court concluded, is a “useful article,” meaning that it serves an intrinsic utilitarian function.   For the design of a useful article to be copyrightable, it must incorporate pictorial, graphic, or sculptural features that can be separated from and exist independently of the article’s function.  After surveying the many tests that have been used to evaluate this question, the Court elected to take a “hybrid approach,” which asks, among other things:  Is the design objectively necessary to the article’s useful function?  What was the process for designing the article?  Can the design be separately imagined as an independent artistic work?

The key question over which the majority and dissent diverged is how to define the useful function of uniforms.  The utilitarian function of the cheerleader uniform, the majority concluded, is “to cover the body, wick away moisture, and withstand the rigors of athletic movements.”  Under this conception, the majority reasoned that the stripes and zigzags were decorative, not functional, and therefore protected.   Judge McKeague, in dissent, defined the uniform’s function more narrowly.  He concluded that the uniform and its accompanying designs served to identify a cheerleader as a cheerleader.  He further concluded that these decorative elements are part of the function, not separately protected.

Judge Moore countered that neither a “decorative” function nor an “identifying” function is properly considered part of what makes an article a “useful” article.  Were it otherwise, the court reasoned, there would be no protection for purely decorative art; and the function of conveying information – as in, conveying the fact that the wearer is a cheerleader for a particular team – cannot on its own render the uniform a “useful article.”

This may not be the last word on the subject, however.  Judge McKeague closed with a call to Congress or the Supreme Court to clarify the tangled law in this area.