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Sixth Circuit Continues to Decrease Time for Resolution of Appeals

Posted in News and Analysis

Last fiscal year, the Sixth Circuit terminated 2,638 appeals on the merits, ranking its caseload fifth among the federal circuits by this metric. Not surprisingly, this correlates with the Circuit’s average case resolution time of 9.8 months from the filing of notice of appeal to final order or disposition, which makes it the fourth-longest resolution time among the circuits, but only slightly above the median of 9.2 months. However, this follows the Sixth Circuit’s downward trend in case resolution time that we reported on last year: the Circuit’s average time interval for disposition of an appeal in FY 2014 fell by almost a full month as compared with FY 2013. By comparison, the fastest court by this metric was the First Circuit, which also terminated the second fewest cases on the merits—725. (Interestingly, the D.C. Circuit terminated the fewest cases on the merits—376—but took the longest time to do so—a median time interval of 12.8 months.)

Also of note, the Sixth Circuit ranks ninth among the circuits in terms of median time interval to resolve a prisoner petition (7.5 months), and eighth in terms of general criminal appeals (11.8 months). The Second and Fourth Circuits were fastest in these areas, at 4.2 months and 7.9 months, respectively. In addition, the Sixth Circuit is tied with the First Circuit for eighth place in its resolution of Administrative Agency appeals (1.3 months). However, this year the Sixth Circuit ranks right in the middle—sixth—for time interval to resolve a civil appeal, at 10.2 months (fastest is the Fourth Circuit at an even 6 months). The Sixth Circuit also holds the same rank—sixth—for termination of bankruptcy cases (timing out at an even 11 months).

Sixth Circuit Is on Middle Ground for Unpublished Opinions

Posted in News and Analysis

Recently released federal court statistics for FY 2013-2014 revealed a number of interesting points about the circuits’ varying publication tendencies, and couple of interesting points about the Sixth Circuit in particular.

We have previously covered the Sixth Circuit’s tendency to follow national appellate statistical trends, and this year was no exception. The Circuit was solidly in the middle of the pack on most appellate metrics, ranking 7th among the circuit courts as far as most published opinions at 261, and 5th for its percentage of unpublished opinions, with almost 92% of the court’s opinions issued unpublished. Perhaps not surprisingly, the Seventh Circuit issued the most published opinions—635, with only 63.4% of its opinions unpublished. The Third Circuit issued the most unpublished opinions

The Sixth Circuit also ranked 5th in terms of overall cases terminated (3,460). Year-over-year, the federal appellate caseload declined by 0.5%, and new cases filed decreased by 2.6%. These figures indicate a consistent, albeit slow reduction in the federal appellate caseload, down overall by 27.3% since 2005. The Sixth Circuit also followed this trend in FY 2014, with a 2.1% decrease in pending cases. Here again, however, the Sixth Circuit was near the median: by contrast, the Ninth Circuit decreased its caseload by just over 3%, and the Third Circuit experienced a 4.3% increase in its caseload.

En Banc Sixth Circuit: No ADA Violation In Telecommuting Suit

Posted in En Banc Watch, News and Analysis, Recent Cases

On Friday, the Sixth Circuit issued a significant decision on telecommuting accommodations for disabled employees.  In EEOC v. Ford Motor Co., a divided en banc court affirmed summary judgment for Ford on claims brought under the Americans with Disabilities Act by the Equal Employment Opportunity Commission.  At issue in the case was a telecommuting request from a Ford employee with underlying health problems.  The EEOC alleged that Ford: 1) failed to reasonably accommodate the employee, Ms. Harris, by denying her telecommuting request and 2) retaliated against her for raising the issue with the EEOC.  Emphasizing the importance of consistent in-person attendance for interactive jobs, the majority held that no genuine issue of material fact remained, and EEOC’s claims failed as a matter of law.

The lynchpin of the court’s ruling was that regular and predictable on-site job attendance was an essential function of Ms. Harris’s job as a resale buyer.  Concluding that Ms. Harris’s job was fundamentally interactive, the majority invoked the “general rule” that regularly attending work on-site is essential to most jobs, especially interactive ones.  Factors emphasized by the court included Ford’s own assessment of what the job required, Harris’s poor performance, her past failed attempts at telecommuting, and the “ad hoc” terms of her proposed telecommuting schedule.  Given that Harris could not regularly and predictably work on-site, the court concluded that she was not qualified as a matter of law to perform the job even with a reasonable accommodation.

Core areas of disagreement between the majority and dissent included how to treat Harris’s and Ford’s respective versions of the job’s “essential functions” and what arrangements would satisfy the job’s interactive requirements in light of changed technology.  With respect to this particular job, the majority held that in-person attendance was still necessary.   Ford had allowed Harris to try different telecommuting schedules twice in the past, but she had been unable to accomplish her job duties under those arrangements.  Declining to credit Harris’s version of the facts, the majority held that an employee’s unsupported testimony that she could perform her job functions from home does not create a genuine issue of material fact precluding summary judgment.  The court instead credited Ford’s testimony that it rarely used video conferencing, and that email and phone were insufficient to satisfy the job’s requirements.

The dissent maintained that it should no longer be assumed that teamwork must be done in person in light of technological changes such as email.   The dissent also contended that the facts must be taken in the light most favorable to the employee at summary judgment and disputed that the court had engaged in a sufficiently factual, case-by-case analysis.  In the dissent’s view, the employee’s own declaration created an issue of fact as to whether regularly appearing in person was essential to the job, and Ford’s self-serving assessment was equally open to question.  The dissent also disputed the majority’s characterization of the record with respect to what accommodation Harris actually requested, and how similar it was to accommodations made for other workers.

The retaliation claim was subject to similar debate about the content of the record.  The majority held that no reasonable jury could find that Ford would have continued to employ Ms. Harris in light of her past failures to perform her job and her inability to perform the essential elements of her job in the future.  Ms. Harris received low evaluations (placing her in the bottom 10 percent among her peers) both before and after she filed her complaint, which the majority found undermined her retaliation claim.  Citing the timing of her termination four months after the EEOC complaint was filed along with contentious behavior by the supervisor, the dissent disputed that Ford would have fired Ms. Harris when it did but for the EEOC claim. Although the majority noted that the timing of the termination weighed against Ford, it noted that suspicious timing alone is not sufficient to prove discriminatory intent.

This significant ADA decision may make it more difficult for employees to establish that a telecommuting accommodation satisfies teamwork and communication-related job requirements.  More broadly, the decision appears to signal a presumption in favor of an employer’s version what constitutes the essential elements of a particular job, particularly where other facts in the record indicate that alternative arrangements have failed in the past.

Sixth Circuit Reverses Government’s $650 Million Verdict in False Claims Case

Posted in Recent Cases

On Monday, the Sixth Circuit issued its published opinion in United States v. United Technologies Corp., the most recent appeal in several rounds of fraud litigation stemming from jet engine prices charged to the government over thirty years ago.

The case stemmed from prices charged by Pratt & Whitney (now part of United Technologies) to the government in competitive contracts with GE for fighter jet engines in the 1980s. The government’s first suit against Pratt in 1998 before the Armed Services Board of Contract Appeals ended in a decision favorable to Pratt. The government’s second action against Pratt in federal court ended in a Sixth Circuit decision establishing Pratt’s liability under the FCA to the tune of $7 million, but then a finding by the district court on remand that Pratt was liable for an additional $650 million.

In this second appeal—from the $657 million total judgment—the Sixth Circuit addressed two distinct issues. First at issue was whether the Board of Contract Appeals’ decision that “the Air Force relied on competition between GE Aircraft and Pratt” in evaluating the companies’ prices bound the district court for purposes of issue preclusion. Finding the Board’s decision to be ambiguous, the Sixth Circuit erred on the side of construing issue preclusion narrowly, and so held that the Board’s decision did “not bar the government’s damages claims under the False Claims Act and common law restitution.”

Addressing the second issue, the thrust of Pratt’s appeal, the Sixth Circuit held that the opinion below improperly disregarded the “role that competition between Pratt and GE . . . played in determining reasonable and fair prices” and “whether that competition [and resulting prices] eliminated any damages to the government.” In so holding, the Sixth Circuit rectified several misunderstandings of its opinion in the previous appeal: (1) the opinion did not require damages (it merely left their possibility open), (2) the opinion did not undermine factual conclusions in the district court’s first $7 million decision, and (3) in asking for a “fair market value” of the engines to determine whether the government actually suffered damages, the opinion “broke no new ground” on damages calculations.

Moving to the government’s five arguments for upholding the district court’s decision, the Sixth Circuit addressed each in turn. It held that: (1) Pratt had successfully rebutted the presumption that fraud on the government results in dollar-for-dollar damages; (2) Pratt objected to and thus did not forfeit the argument that its engines were actually comparable to GE’s; (3) Truth in Negotiations Act regulations did not establish that “cost plus a reasonable profit” established proper contract prices; (4) Pratt’s fraud did not make a price comparison with GE’s engines impossible; and (5) GE’s market entry costs also did not make price comparison impossible.

Writing for the majority, Judge Sutton noted, “[w]e are tempted to say that, after seventeen years of litigation about a fraud that occurred thirty-two years ago, the time has come to end this dispute”; however, the case will go back to the district court for a second—and likely final—time for a determination of the government’s proper damages.

Sixth Circuit Offers Lesson on Interplay Between Post-Judgment Motions and Notices of Appeal

Posted in News and Analysis, Recent Cases

In Slep-Tone Entertainment Corp. v. Karaoke Kandy Store, Inc. , the Sixth Circuit explained the ramifications for filing a premature notice of appeal.  In a case that took place before an advisory jury, the plaintiff requested findings of fact and conclusions of law pursuant to Rule 52 after the trial court entered judgment against it.  Shortly thereafter, the plaintiff filed an appeal, and the parties fully briefed the case before the Sixth Circuit.  The Sixth Circuit, however, concluded that it lacked jurisdiction to resolve the appeal because of the pending request pursuant to Rule 52.  The Rule 52 request submitted by plaintiffs is one of the types of post-judgment motions identified in Federal Rule of Appellate Procedure 4 that tolls the time period for the notice of appeal.  (FRAP 4(a)(4)(A)(ii), for those keeping score at home). Filing the notice of appeal while such a motion is pending was, therefore, premature.  As a result, the Sixth Circuit concluded that:  “We do not have jurisdiction to resolve the appeal.”  The Court accordingly remanded the case to the district court to resolve the post-judgment motion, while staying the appeal and awaiting the results from the district court.

Although the result in this case seems fairly clear given how the rules are structured, this case illustrates that parties continue to confuse these issues.  A notable aspect of this opinion is that it is an actual published opinion, rather than an unsigned order from the clerk’s office.  In most cases where the Court disposes of a case on jurisdictional grounds like this, a perfunctory order from the clerk’s office is issued.  Those orders often provide little guidance to anyone beyond the parties for the case.  Therefore, it appears that the Court in this instance felt the need to publicize these issues and provide overall guidance to the bar. And taking heed to these lessons is important – it avoids briefing an appeal without jurisdiction, or having to brief a case twice.

Split Sixth Circuit Compels Arbitration in Employee Benefit Class Action Suit

Posted in Recent Cases

Last week, the Sixth Circuit handed down its decision in Supplemental Benefit Committee v. Navistar International Corp., an appeal by a corporation seeking to compel arbitration in an ongoing dispute over employee benefits. Subjecting the disputed contractual issues to arbitration and holding that Navistar had not waived arbitration by participating in litigation, the Sixth Circuit demonstrated just how wide the “strong federal preference” for arbitration sweeps.

The opening salvo in this series of lawsuits was fired as a class action by employees of Navistar after the company attempted to reduce their benefits. There, the court entered a consent decree restructuring the employees’ benefit plan and forming a Supplemental Benefit Committee (SBC) to administer the plan and a trust. Under the decree, Navistar was to report to the SBC its financial information to ensure the company’s compliance with the plan, and disputes over this information were “to be referred for binding determination to an accountant.” After disputing several of Navistar’s reports and calculations under the plan, the SBC requested additional information from Navistar and eventually intervened in the original class action. On Navistar’s motion to dismiss SBC’s intervening complaint, the district court held that, although the informational disputes were subject to the arbitration clause, Navistar had waived arbitration through its conduct before and during litigation.

In vacating the district court’s dismissal of the action and compelling arbitration, the Sixth Circuit first held that, although the arbitration clause “could potentially involve questions of contract interpretation as well as accounting,” (1) the unqualified language of the agreement trumped the assumption that the parties would not commit legal disputes to an accounting firm, and (2) it was reasonable to assume that the parties intended the accounting-related contract disputes to be arbitrated.

Second, the court held that Navistar did not waive its right to arbitrate through its actions before and during litigation. The court indicated that: Navistar had acknowledged the possibility of arbitration in one of its responses to the SBC’s request for information; ignoring a subsequent SBC letter was mere “posturing” and not a refusal of a formal request to arbitrate; SBC could have sought to compel arbitration prior to its motion to intervene; and Navistar could not have waived its right to arbitrate issues alleged in SBC’s complaint that arose after the company’s behavior that allegedly constituted waiver.

In his dissent, Judge Clay disagreed with both the majority’s characterization of the consent decree and its analysis of waiver. Elaborating on some of the facts of the case, the dissent argued that SBC’s complaint was actually that Navistar had deliberately manipulated its corporate structure in order to reduce its contributions to the plan, and that Navistar was “engaging in a bad faith scheme to negate its substantive contractual duty to contribute a portion of its profits to fund the benefits of its retirees.” The dissent also did not accept Navistar’s refusal to answer the SBC as “posturing,” and would have held that Navistar’s delays caused SBC to incur additional litigation costs and thus prejudice.

Sixth Circuit Rescues Client From Lawyer’s Blunders

Posted in News and Analysis, Recent Cases

In Prime Finish, LLC v. ITW Deltar IPAC, the Sixth Circuit reversed and remanded a district court order dismissing the case based on counsel’s non-compliance with various scheduling orders.  After prior counsel withdrew, the district court set various deadlines for the appearance of new counsel and the filings of various pleadings.  Several of these deadlines were missed, ultimately prompting the district court to dismiss the case.  On appeal, the Sixth Circuit reversed, emphasizing the significance of the sanction of dismissal.  The primary factor that courts usually evaluate considering dismissal is whether there is a clear record of delay or contumacious conduct.  On this point, the Sixth Circuit found the record largely barren.  While it did note that the court had made several warnings about the possible dismissal for non-compliance, the lack of bad faith and lack of prejudice pointed in the other direction.  Equally important, the Court found that the district court did not consider whether other, lesser sanctions might have been more appropriate.

At the end of the day, the Court concluded:  “While the district court’s frustration is understandable, we cannot countenance its failure to consider whether a lesser sanction might properly balance the need for adherence to judicial orders with a desire to provide parties with a full and fair opportunity to have their cases decided on the merits.”  While the client escaped the ultimate penalty in this case, this decision certainly serves as a cautionary tale for litigants and underscores a simple rule: pay attention to orders by the district court!

A Footnote About The Lack Of Footnotes

Posted in News and Analysis

Last week, we had a post on a decision in St Marys Cement, Inc. v. United States Environmental Protection Agency.  While the opinion is a fairly routine application of agency deference principles, one aspect of it caught the attention of some of our readers.  In Judge Sutton’s opinion, he includes a lengthy parenthetical about the fact that St. Marys does not have an apostrophe “s.”  This prompted a digression about how the Canadian government used to discourage the possessive form of place names whenever possible.  This comported with the American experience, as President Benjamin Harrison in 1890 established a board on geographic names, which adopted a policy that achieved the removal of approximately 250,000 apostrophes from federal maps.  This war on apostrophes is pretty interesting stuff for the trivia buffs out there, but some questions we received were “why wasn’t this in a footnote?”  The reason, at least for this case, is that Judge Sutton simply does not use footnotes.  Indeed, we are not aware of any opinions of Judge Sutton’s that actually include a footnote (although we are prepared to be proven wrong on this).  We reported awhile back on the growing shift away from footnotes in briefs as a result of judges reading the briefs electronically. All of this is a good reminder about why you should limit, as much as possible, footnotes in your briefs. (And if you want to really get the Court’s attention, find interesting side notes like the history of apostrophes in geographic names!).

Sixth Circuit Judges In The News

Posted in News and Analysis

Sixth Circuit judges Karen Nelson Moore and Martha Craig Daughtrey were both featured in the news last week.  Judge Moore was named the President of Harvard University’s Board of Overseers for 2015/16.  Judge Moore graduated from Harvard for both undergraduate and law school.  The attached article in the Harvard Gazette contains an interesting profile of Judge Moore and background on her career.

The Tennesseean published an article about Judge Daughtrey’s career that focuses on the number of firsts that she achieved and the barriers that she broke.  This article contained a very interesting profile on her career and accomplishments.   It also discusses Judge Daughtrey’s dissent in the gay marriage case, which is presently before the Supreme Court.

 

“Tying” Products Via Discount Only “Unlawful” When Second Product Sells Below Cost

Posted in News and Analysis, Recent Cases, Supreme Court

In Collins Inkjet Corp. v. Eastman Kodak Co., the Sixth Circuit recently held that differential pricing—charging more for a product when the customer fails to buy a second “tied” product—constitutes unlawful tying only when the second product is effectively being sold for below-cost.  In adopting this “discount attribution” standard, the court sided with the Ninth Circuit in a circuit split, finding the Ninth Circuit’s analysis “more compelling than that of the Third Circuit” on the issue. We previously posted on the case here.

Although the court found the district court’s analysis “unduly favored” the plaintiff, it ultimately found that, even under its stricter standard, the preliminary injunction was warranted.  The district court’s test for unlawful tying was based on Virtual Maintenance v. Prime Computer, 957 F.2d 1318 (6th Cir. 1992) (en banc), in which the court had said:

A tying arrangement clearly exists here because the large price differential between software support alone and the software support/hardware maintenance package induces all rational buyers of Prime’s software support to accept its hardware maintenance.

 Thus, the district court’s test for whether differential pricing created an unlawful tie was whether the difference would induce “all rational buyers” to buy the products together.  In the instant case, however, the Sixth Circuit held that this portion of Virtual Maintenance was “dicta, unnecessary to determining the outcome of the appeal” and criticized it as “a single sentence with no supporting authority.” The court pointed out that the pricing policy in Virtual Maintenance “would self-evidently fail” the discount attribution standard, and thus there was “little need to determine exactly” where to draw the line.

Judge Daughtrey concurred in the judgment, but not in “the majority’s formulation of a decisional framework applicable to all tying arrangements.”  Judge Daughtrey’s preferred holding would have been much narrower: “where a defendant . . . has a 100-percent monopolistic share of the market for a tying product, it may not price a tied product, for which it does not control the relevant market, below its costs.”

With a 2-1 circuit split, this case may be a viable contender for Supreme Court review. In the meantime, it will be interesting to see whether subsequent panels will read this decision broadly, to apply to “all tying arrangements,” or pare it back (as the majority did to Virtual Maintenance) on the grounds that determining the outcome did not require choosing a test (because the panel affirmed the injunction even under the stricter discount attribution standard).