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6th Circuit Appellate Blog


Sixth Circuit Approves NLRB’s Jurisdiction over Michigan Indian Tribe

Posted in Recent Cases

In a recent split decision, the Sixth Circuit held that the National Labor Relations Board (NLRB) possessed jurisdiction to enforce provisions of the National Labor Relations Act (NLRA) against the Little River Band of Ottawa Indians—a Michigan Indian tribe—to prevent the Tribe from enforcing its new labor regulations against a casino on its land.

The controversy in NLRB v. Little River Band of Ottawa Indians Tribal Government began when the Little River Ottawa Band’s Tribal Council amended the Tribe’s Fair Employment Practices Code to allow the Band to set the terms and conditions of collective bargaining, and “prohibits strikes, work stoppage, or slowdown by the Band’s employees. Thereafter, the NLRB sought to prohibit enforcement of some parts of the amended FEPC on the grounds that they violated the NLRA. The Band’s sole objection the NLRB’s order was that the NLRB lacked jurisdiction over the Tribe in this matter. The NLRB found it had jurisdiction, even after reconsideration in light of NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), and sought enforcement of its cease and desist order in the Sixth Circuit.

The Sixth Circuit granted enforcement of the order. Judge Gibbons, writing for the majority (along with Judge Merritt), began by noting that the NLRA is a statute of general applicability, is silent as to Indian Tribes, and that Chevron was inapposite because the NLRB’s jurisdiction was “predicated on its analysis of federal Indian law and policy,” not upon a statutory interpretation. Next, the court noted that Indian sovereignty is derived from federal statutes, treaties, and “inherent” sovereignty, but that “the sovereignty of Indian tribes ‘exists only at the sufferance of Congress and is subject to complete defeasance.’” Then, citing a long list of sister circuits’ precedent, the court posited that “a federal statute creating a comprehensive regulatory scheme presumptively applies to Indian tribes,” and that the Ninth Circuit’s test from the 1985 case of Donovan v. Coeur d’Alene Tribal Farm for determining exceptions to this presumption was the appropriate framework to evaluate the NLRB’s jurisdiction.

Evaluating the case under Coeur d’Alene, then, the Sixth Circuit held that the Band could not take refuge under the two applicable prongs of the Ninth Circuit’s test. First, application of the NLRA to the casino did not undermine “tribal self-governance in purely intramural matters,” because the Tribe’s asserted protection of net revenues or Tribal laws did not show such a destabilization. Second, the absence of “Indian tribes” from the NRLA’s private right of action section did not demonstrate an intent to prevent the application of the NLRA to Indian tribes, because “Congress may choose to impose an obligation on Indian tribes without subjecting them to . . . a private right of action.”

Judge McKeague issued a marked dissent, taking issue largely with the majority’s underlying reasoning and precedential evaluations. Noting the NLRB’s attempt to subject Indian tribes to the NLRA was a relatively recent innovation, the dissent argued that the application of Coeur d’Alene was not so clear cut, nor in line with more recent Supreme Court precedent. Thus, evaluating “Congress’s silence as reflective of intent to uphold tribal sovereignty,” the dissent reached the conclusion that the NLRA could not conclusively apply to the Band, absent an express Congressional intent to do so.

Antitrust Actions at the Sixth Circuit: A Two-Year Review

Posted in News and Analysis

Following our recent survey of IP cases, this post reviews the antirust appeals before the Sixth Circuit during the last two years.  Despite the de novo review that applies to appeals from dismissals and summary judgment decisions, the Sixth Circuit affirmed in almost all of the eight cases we reviewed.  The vast majority of those cases involved a party’s failure (usually the plaintiff’s) to specifically allege or prove facts material to the antitrust claims; only one case was dismissed on statute of limitations grounds.  The only reversal was in a summary judgment decision where the court noted a trend toward a broad application of the rule of reason, but reversed the district court for excluding evidence from the plaintiffs’ expert because he did not meet the Tampa Electric standard for determining the correct geographic market.  Food Lion, LLC v. Dean Foods Co. (In re Southeastern Milk Antitrust Litig.), 739 F.3d 262 (6th Cir. 2014).  The Court explained that the size of a geographic market is a “question better left for a jury to decide.” 

In another interesting case, the Sixth Circuit also affirmed an appeal from a preliminary injunction of a tying arrangement based on its conclusion that a strong likelihood of coercion, combined with sufficient market power, had reduced the tied product’s value below the seller’s cost.  Collins Inkjet Corp. v. Eastman Kodak Co., 781 F.3d 264 (6th Cir. 2015).  There were no post-trial appeals in any antitrust case.

Perhaps more significantly, the Sixth Circuit also denied all three petitions to appeal from a district court’s certification of an antitrust class action.  This perhaps reflects the court’s internalization of the abuse of discretion standard of review in Rule 23(f) petitions.  In re Carpenter Co., 2014 U.S. App. LEXIS 24707, *6 (2014) (citing Beattie v. CenturyTel, Inc., 511 F.3d 554, 560 (6th Cir. 2007)).  While Comcast Corp. v. Behrend has had a real impact on antitrust class action decisions, the Sixth Circuit generally trusts that district courts are getting it right.  The Court’s reluctance to intervene in class certification appeals really highlights the significance of the district court decision, and underscores how critical it is to carefully frame the Rule 23(f) petition. Looking at which cases get granted and which are denied can help mold a petition that may be better received at the Court.   

No En Banc Sitting In June

Posted in En Banc Watch, News and Analysis

The Sixth Circuit historically hears en banc cases at two sittings each year, in June and December.  However, the Court has not scheduled any en banc hearings for this summer, consistent with our prior observations, which can be viewed here and here, that the Court is generally cutting back on the number of en banc cases it takes.  The next en banc sitting scheduled involves an interesting Second Amendment case that we reported on here, and it is slated for October.


Intellectual Property Cases: Trends in the Sixth Circuit

Posted in News and Analysis

We have previously reviewed Sixth Circuit decisions to uncover trends in class actions, as well as in employment and Daubert cases. For this post, we generally reviewed the Sixth Circuit’s intellectual property cases from the last two years.  We found that most of the cases before the court were copyright and trademark cases, with just a few trade secret and patent-related appeals.  (Regular patent appeals, of course, go directly to the Federal Circuit.)  Copyright cases had an impressive 100% affirmance rate—perhaps signaling that the Sixth Circuit’s copyright precedent is especially clear for district courts to follow.  Other IP-related cases, such as trademark and trade dress, fared much worse with an average affirmance rate of 60%—which represents more than twice as many reversals than the 85% average rate of affirmance for all civil appeals.  Many of the reversed cases were grants of summary judgment to plaintiffs or defendants, rather than cases that were taken to trial.  Also interesting was the small number of IP cases; we counted just sixteen Sixth Circuit cases with opinions in the past two years.

The takeaway from this small survey is that plaintiffs and defendants should do everything they can to insulate their win from reversal.  Unless you have a copyright case, reversal may be more likely than you think.

Sixth Circuit Enforces The Public Disclosure Bar Of The False Claims Act

Posted in News and Analysis, Recent Cases

In United States ex. rel. Antoon v. Cleveland Clinic Found., No. 13-4348, the Sixth Circuit affirmed the dismissal of a lawsuit against the Cleveland Clinic and Intuitive Surgical.   Plaintiffs alleged violations of the False Claims Act (FCA) through misrepresentations about the qualifications of the doctor performing the surgery and about the success rate for robotic surgery.  The district court dismissed the lawsuit on multiple grounds, but the opinion by Judge Lawson (sitting by designation) only discussed the FCA’s public disclosure bar, which goes to the jurisdiction of the court.   

The Sixth Circuit held that the plaintiffs had made public disclosures of the alleged fraud before filing the federal lawsuit by filing state court complaints and instigating a CMS investigation.  Because of this, the district court did not have jurisdiction unless the plaintiffs could qualify as an “original source” of the allegations, which requires “direct and independent knowledge of the information on which the allegations are based.”  31 U.S.C. § 3730(e)(4)(B).  The court refused to read the “direct and independent” language as requiring first-hand knowledge of the facts behind the allegations,  but found that plaintiffs did not provide anything but speculation.  It held that the plaintiffs’ only contribution to the allegations was the suspicion that their doctor was lying.  That was not enough of a contribution to qualify as an original source under the FCA. 

Judge Gibbons filed a short concurrence arguing that the court should explicitly require first-hand knowledge to qualify as an original source.  While this would otherwise seem like fertile ground for further cases or a circuit split, the concurrence notes that this issue only applies to cases involving pre-2010 conduct because Congress changed the definition of “original source” in 2010. 

 Colter Paulson and Tom Zeno from our Cincinnati office represented Intuitive Surgical at the trial court and on appeal.


Sixth Circuit Offers Insights on Certification to State Supreme Courts

Posted in Recent Cases

Last Friday, the Sixth Circuit declined to expand the rights of Kentucky counties to seek enforcement of a Kentucky statute.  In an unpublished opinion, Boyd County v. MERSCORP, Inc., the Sixth Circuit upheld the district court’s decision to dismiss a lawsuit brought by forty-one Kentucky counties as a class action lawsuit against Mortgage Electronic Registration Systems, Inc. (MERS) and its shareholders.  The district court dismissed the suit on the grounds that Kentucky counties lack the power to enforce the relevant state statute.

The counties party to this lawsuit claimed that MERS violates Kentucky’s recording statutes when it reassigns promissory notes secured by a mortgage without recording the transfer.  The relevant statute, Ky. Rev. Stat. § 382.360(3), requires: “When a mortgage is assigned to another person, the assignee shall file the assignment for recording with the county clerk . . . .” The district court analyzed the claim as seeking a private right of action under Ky. Rev. Stat. § 446.070, Kentucky’s negligence per se statute, despite the fact that the counties did not invoke § 446.070 in their complaint.  The Sixth Circuit affirmed the district court’s reasoning that Christian Cnty. Clerk ex rel Kem v. Mortgage Electronic Registration Systems, Inc., 515 F. App’x 451 (6th Cir. 2013) would bar counties from bringing claims for unjust enrichment and claims under § 446.070, because counties are not within the class of persons the legislature intended to protect with the recording statute.

The counties, rather than raising a claim under § 446.070, presented a novel argument.  They claimed that as subdivisions of the state, “Kentucky law empowers [counties] to seek enforcement of a statute in which the county has an interest.”  The Sixth Circuit declined the opportunity to expand counties’ rights under Kentucky law, observing that “such legal innovations are better addressed by Kentucky courts.”  The court refused, however, to certify the case to the Kentucky Supreme Court, notwithstanding the counties’ urging to do so.  Sixth Circuit precedent encourages the court to decline certification to state court when the parties did not request certification until after the district court unfavorably resolved the issue. See e.g., Geronimo v. Caterpillar, Inc., 440 F. App’x 442, 449 (6th Cir. 2011).  In other words, certification should not be a strategic second bite at the apple.  This decision, however, offers a wrinkle.  While the parties to this suit did not request certification until after they received an unfavorable decision, that decision did not address the state-law issue in question that was the subject of the certification request.  As certification is discretionary by the Sixth Circuit, Boyd County offers the lesson that delay by the party seeking certification will often spell the denial of the request.  Therefore, for those considering certification (a subject we have previously discussed), ask early and often!

This post was written by Lauren Maynard, a summer associate in SPB’s Cincinnati office.

Sixth Circuit Sets Standard for Advertisements Under Consumer Protection Law

Posted in Recent Cases

Facing an as-yet unaddressed question of statutory interpretation in the Sixth Circuit, last week the court issued an opinion Sandusky Wellness Center v. Medco Health Solutions, which interpreted the Telephone Consumer Protection Act (TCPA) to hold that unsolicited faxes that “lacked the necessary commercial aspects of ads,” were not “advertisements” for purposes of the TCPA and thus not actionable under the Act.

The litigation arose after Sandusky received two unsolicited faxes from Medco (available in the appendix of the opinion), which sought to update Sandusky about lower-priced prescription drugs available through Medco’s clients’ healthcare plans. As a pharmacy benefit manager, Medco tracks the medicines available through healthcare plans and “sends that list to the plan sponsors [i.e., employers] so they can offer the most attractive prescription drug plans to their members.” Medco also “sends [the list] to healthcare providers that prescribe medications to its clients’ members.” After Medco faxed Sandusky—a chiropractic services center—two lists of lower-priced medications, Sandusky sued Medco in a putative class action for violating the TCPA by “sending unsolicited advertisements to fax machines,” and sought the $500-per-offense statutory penalty for Medco’s alleged transgressions on behalf of the class.

The district court granted summary judgment to Medco, and Sandusky appealed. The Sixth Circuit first examined the TCPA’s definition of “advertisement” as “any material advertising the commercial availability or quality of any property, goods, or services,” and then parsed this overall definition. The court reasoned that because an advertisement must promote something to the public for sale, an advertisement (under the TCPA) is inherently commercial and seeks a profit. Differentiating Medco’s faxes from a McDonald’s jingle or a fax that advertises a manufacturer’s product in conjunction with a free seminar, the court held that Medco sent the faxes for “informational and non-pecuniary” purposes and affirmed summary judgment for Medco. Ultimately, because Medco did not actually seek to sell something to Sandusky, the court held that Medco’s faxes, as a matter of law, were not “advertisements” and so Medco did not violate the TCPA.

The Sixth Circuit also addressed Sandusky’s three counterarguments and its appeal from the district court’s order limiting discovery. First, the court noted that Sandusky’s argument that an advertisement is “anything that ‘makes known’ the quality or availability of a good or service” was incorrect because it would include non-commercial announcements. The court then differentiated Sandusky’s case from one in which the Seventh Circuit held a fax was a “‘promotional’ device” because it indirectly solicited business and the sender conceded as much. Third, the court held that Sandusky could not rely on potential, future, ancillary benefits to Medco’s business from the two faxes to show that they were commercial in nature. Finally, the court affirmed the district court’s denial of Sandusky’s request for discovery relating to Medco’s pecuniary interest in the drugs mentioned in the faxes because: as mentioned, Medco’s potential pecuniary interest was irrelevant to determining whether the faxes were ads; their affidavits in support of discovery were too vague; and the purported affidavits legally failed as such because they were not sworn to a notary public nor signed under penalty of perjury.

Sixth Circuit Illustrates the Challenges of Establishing Personal Jurisdiction in the Wake of Daimler and Walden

Posted in Recent Cases, Supreme Court

A pair of recent Supreme Court decisions, Daimler AG v. Bauman, 134 S. Ct. 746 (2014) and Walden v. Fiore, 134 S. Ct. 1115 (2014) have substantially raised the bar for establishing personal jurisdiction over foreign defendants. In a brief unpublished opinion, Maxitrate Tratamento Termico v. Super Systems, Inc., the Sixth Circuit applied these cases to reject a claim of personal jurisdiction over a Brazilian entity.  The dispute arose out of personal injuries that an Ohio citizen suffered in Brazil as a result of a factory explosion, and he sued the factory’s insurer.  Although the insurer was affiliated with a global insurer, the particular entity itself was Brazilian.

In the wake of Daimler, the plaintiff did not even bother to press general personal jurisdiction. Instead, he focused on specific jurisdiction. The Sixth Circuit, applying Walden, found that the defendant did not purposefully avail itself of the privilege of acting in the forum state. Although the plaintiff insisted that jurisdiction was proper because the defendant knew that its intentional acts would cause effects in a state, the Sixth Circuit held that Walden “rejected that theory of personal jurisdiction.” This is one of the first circuit-level decisions to squarely hold that Walden abrogated the “effects” test. 

The short work that the Sixth Circuit made of this case illustrates the challenges to those trying to sue foreign entities in the U.S., and the message that the federal courts are internalizing from the Supreme Court’s recent guidance.


Sixth Circuit Widens Circuit Split By Holding Government-Contractor Immunity Not Jurisdictional

Posted in News and Analysis, Recent Cases

Earlier this week in Adkisson et al. v. Jacobs Eng’g Grp., Inc., the Sixth Circuit joined the Fifth Circuit [link] in holding that government-contractor immunity is not jurisdictional like sovereign immunity. The Sixth Circuit was interpreting Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), which held that government contractors are immune from suit when they act as agents of the federal government, pursuant to authority “validly conferred” by Congress.  The Supreme Court’s opinion in Yearsley was quite brief, and did not address the question of whether the immunity was a jurisdictional bar or an affirmative defense on the merits.

The Fourth Circuit has held that government-contractor immunity derives from sovereign immunity, making it jurisdictional.  In Adkisson, however, the Sixth Circuit sided with the Fifth Circuit, holding that government-contractor immunity under Yearsley is “an issue to be reviewed on the merits,” similar to “qualified immunity for private individuals under government contract.”

Although the court’s decision does not alter the substance of the Yearsley analysis, it makes it more challenging for government contractors to seek dismissal on the basis of government-contractor immunity. A jurisdictional bar may be asserted in a Rule 12(b)(1) motion, and the court has “broad discretion over what evidence to consider,” including evidence outside the pleadings.  As a defense on the merits, however, government-contractor immunity must now—in the Sixth Circuit—be asserted in a Rule 12(b)(6) motion for failure to state a claim. It will be interesting to see how often this makes a difference in the outcome of a motion to dismiss.