Sixth Circuit Appellate Blog

On Wednesday, the Supreme Court issued its decision in Lafler v. Cooper, one of two notable habeas cases that were pending before the Court.  In the criminal case underlying Lafler, the defendant was charged with assault with intent to murder in addition to three other offenses.  The prosecution offered to dismiss two of the charges and recommend a sentence between 51 and 85 months.  The defendant's attorney allegedly convinced him that the prosecution would be unable to prove intent to murder, so the defendant rejected the plea deal.  After a fair trial, the defendant was convicted on all counts and received the mandatory minimum 185-to-360-month sentence.  The defendant claimed ineffective assistance of counsel, and eventually pursued his claim in federal habeas under 28 U.S.C. §2254.  After a Michigan District Court granted a conditional writ of habeas, the Sixth Circuit affirmed finding that “counsel had provided deficient performance by advising respondent of an incorrect legal rule, and that respondent suffered prejudice because he lost the opportunity to take the more favorable sentence offered in the plea.”

According to the Supreme Court, the defendant was required to “show that but for the ineffective advice of counsel there is a reasonable probability that the plea offer would have been presented to the court . . . that the court would have accepted its terms, and that the conviction or sentence, or both, under the offer’s terms would have been less severe than under the judgment and sentence that in fact were imposed.”  While the Supreme Court agreed that the defendant received ineffective assistance of counsel, it disagreed with the District Court and the Sixth Circuit on the appropriate remedy.  The District Court had ordered specific performance of the plea agreement, which was affirmed by the Sixth Circuit.  The Supreme Court found that the correct remedy was to order the state to reoffer the plea deal.  If the deal is accepted, the trial court can determine whether to vacate the convictions and resentence, to vacate only some convictions and resentence, or to leave the convicted and sentence undisturbed. 

The Supreme Court’s decision is significant for holding that criminal defendants have the right to effective assistance of counsel during plea bargaining, even when it results in them turning down a plea and being convicted in a fair trial.

Yesterday we reported that the federal government decided not to seek en banc review of the Eleventh Circuit’s decision striking down the mandate requiring individuals to purchase health insurance under the recently enacted Patient Protection and Affordable Care Act, Public Law 111-148.  Today, the battle has moved to the U.S. Supreme Court in full gear. 

About two hours ago, the government filed its cert petition asking the U.S. Supreme Court to reverse the Eleventh Circuit’s ruling that the individual mandate exceeds Congress’s Commerce Clause power.  Here is the government’s 34 page petition, which is docketed as 11-398. 

As we reported back in August, a divided Eleventh Circuit held that the individual mandate is unconstitutional because it “exceeds Congress’s enumerated commerce power and is unconstitutional.”  See Opinion, State of Florida, et al. v. United States Department of Health and Human Services, et al. (Eleventh Circuit, Case No. 11-11021).  In today’s cert petition, the government argues that the Eleventh Circuit’s decision “is fundamentally flawed and denies Congress the broad deference it is due in enacting laws to address the Nation’s most pressing economic problems and set tax policy.”  The government specifically highlights how the Eleventh Circuit’s decision directly conflicts with the Sixth Circuit’s June 29, 2011 decision upholding the constitutionality of the individual mandate under the Commerce Clause.  See Opinion, Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388). 

Also interesting is the fact that the government has asked the Supreme Court to consider whether lawsuits challenging the individual mandate are barred by the Anti-Injunction Act (which the government previously has argued does not act as a bar).  As we previously reported, the Fourth Circuit earlier this month concluded that the individual mandate is a tax, and thus the plaintiffs could not challenge the mandate until it goes into effect in 2014: “Because this suit constitutes a pre-enforcement action seeking to restrain the assessment of a tax, the Anti-Injunction Act strips us of jurisdiction.”  See Opinion, Liberty University, Inc. v. Geithner (Fourth Circuit, Case No. 10-2347) (PDF). 

In addition to the government’s cert petition, the plaintiffs in this 26-state constitutional challenge to the health care statute also filed a cert petition earlier today.  Likewise, the National Federation of Independent Business, a party to the same lawsuit, has filed a cert petition.  You may be asking: Why are the plaintiffs filing cert petitions if their constitutional argument prevailed at the Eleventh Circuit?  One of the reasons is because of severability.  While the Eleventh Circuit majority ruled that the individual mandate is unconstitutional, it did not follow the lead of Florida District Judge Roger Vinson in setting aside the entire statute.  As we previously reported, Judge Vinson not only ruled back on January 31 that the individual mandate is unconstitutional, he also ruled that the entire law must be invalidated.  See State of Florida, et al.  v. United States Department of Health and Human Services, et al., Case No. 3:10-cv-91 (N.D. Fla.).  As Judge Vinson stated in his opinion, “Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.  This has been a difficult decision to reach, and I am aware that it will have indeterminable implications.”

From a broader perspective, the continued uncertainty over the constitutionality of the health care statute (as evidenced by the conflicting Circuit Court opinions from the last several months) is bad for business and bad for the nation as a whole.  Thus, it is perhaps not surprising that we are presented with the unique situation where the federal government, the states, and business groups all want the Supreme Court to step in immediately and resolve the contentious legal fight.  Given today’s filings, the odds of U.S. Supreme Court review have just gone up dramatically.  To be continued for sure…

We have previously reported about the Sixth Circuit’s recent “losing streak” at the U.S. Supreme Court as well as subsequent continued reversals by the Court.  The broader issue of reversal rates by the U.S. Supreme Court was the subject of a recent article by the Los Angeles Times.  While the article focused on the Ninth Circuit and its well-publicized reversal rate, some of the numbers from the past term are instructive.  The article notes that the Supreme Court generally reverses about 75% of the cases that it hears, and over the past term the Sixth Circuit led the reversal percentage with 83%, followed by the Fifth Circuit with 80%, the Ninth with 79%, and the Second with 75%.  What differentiates the Ninth from those other four circuits is a substantially higher number of rulings that were reviewed by the Court.  The article also focused on the notion that the “liberal” judges on the Ninth Circuit are most often the targets of reversal by the Supreme Court.  As we previously discussed, it is far too simplistic to use such a portrayal at the Sixth Circuit.  Many of the panels that were reversed by the Supreme Court include some or a majority of Republican appointees, and many of the panels were “bipartisan.”  That suggests that the reversals are not simply the product of ideological disagreement, at least when it comes to the Sixth Circuit.  And indeed, if the overall reversal rate is around 75%, it suggests that the Court is reversing decisions across the ideological spectrum.  And this lends support to the notion that the well-publicized “losing streak” by the Sixth Circuit is simply not statistically significant.  Indeed, the L.A. Times article quotes U.C. Irvine Dean Erwin Chemerinsky (who happens to give a great discussion each year at the Sixth Circuit Judicial Conference on the past term by the U.S. Supreme Court), who remarked that “reversal rates have no meaning whatsoever.”  It calls to mind a quote by one of my favorite all-time justices, Robert Jackson: “We are not final because we are infallible, but we are infallible only because we are final.”

In Talk America, Inc. v. Michigan Bell Telephone Co., the Supreme Court resolved a circuit split, holding that state utility commissions can require established telephone companies to provide smaller competitors access to their network at cost.  It overturns a Sixth Circuit decision (which disagreed with decisions from the Seventh, Eighth, and Ninth Circuits) that allowed companies to charge market rates before allowing access to their networks.  Talk America will make it easier for small companies to enter the market and compete with more established telephone companies like Michigan Bell, AT&T or Verizon.  Writing for a unanimous court, Justice Thomas held that the relevant statute (47 U. S. C. § 251(c)) was ambiguous but that the agency’s interpretation of its own regulations was reasonable.  Under Auer v. Robbins, 519 U. S. 452, 461 (1997), the Court then deferred to the agency’s view that competitors can buy access at cost.

In a concurrence, Justice Scalia agreed with the result but noted that he was beginning to doubt the premise of Auer.  He argued that the principle of separation of powers should prevent the Court from defering to an agency’s interpretation of its own law.

For more analysis on this issue in Talk America, see our previous coverage of this case here and here.

Yesterday, the Supreme Court in a per curiam decision upheld Ohio's jury instructions that require jurors first to reject the death penalty before considering a sentence of life imprisonment.  See Bobby v. Mitts, No. 10-1000. 

In the order denying the petition for rehearing en banc before the Sixth Circuit, as previously reported here, Judge Sutton stated the reasons that he thought the panel of the Sixth Circuit decided this case incorrectly, but concluded that this was not a case appropriate for en banc review:   “Sometimes there is nothing wrong with letting the United States Supreme Court decide whether a decision is correct and, if not, whether it is worthy of correction.”  Apparently, the Supreme Court agreed.

The U.S. Supreme Court today rejected an effort by Virginia’s attorney general to bypass the Court of Appeals and have the Supreme Court immediately address the challenge to the mandate requiring individuals to purchase health insurance under the recently enacted Patient Protection and Affordable Care Act, Public Law 111-148. 

Virginia had filed a petition on February 8, 2011 asking the U.S. Supreme Court to hear its case before the Fourth Circuit rules.  See Petition for a Writ of Certiorari Before Judgment in Commonwealth of Virginia v. Sebelius (U.S. Supreme Court, Case No. 10-1014).  It is very rare, however, for the Supreme Court to address legal claims before they are addressed by the Circuit Courts.  Oral arguments already are scheduled in three Circuit Courts during the next month-and-a-half.

The Fourth Circuit will hear oral arguments on May 10, 2011 in the appeal from Virginia District Court Judge Henry Hudson’s December 13, 2010 decision declaring the individual mandate under the health care statute to be unconstitutional.  See Oral Argument Notification, Commonwealth of Virginia, et al. v. Sebelius (Fourth Circuit, Case No. 11-1057).

The Eleventh Circuit will hear oral arguments on June 8, 2011 in the appeal from Florida District Judge Roger Vinson’s January 31, 2011 ruling that that the individual mandate under the health care statute is unconstitutional.  See Oral Argument Order, State of Florida, et al. v. United States Department of Health and Human Services, et al. (Eleventh Circuit, Case No. 11-11021).

And finally, as we reported earlier this month, the Sixth Circuit has scheduled oral arguments for Wednesday, June 1, 2011 at 1:30 p.m. in the appeal from the October 7, 2010 decision by Judge George Steeh of the U.S. District Court for the Eastern District of Michigan upholding the individual mandate under the health care statute.  See Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388).

As we have been saying for months, the Sixth Circuit remains in a position to become one of the first—if not the first—appellate courts in the country to rule on the constitutionality of the health care statute. 

In an opinion examining website policies restricting access to certain types of real-estate brokerage information, the Sixth Circuit ruled that such policies were anticompetitive under Section 5 of the FTC Act.  In Realcomp II, Ltd. v. FTC (6th Cir. 09-4596) [PDF], a unanimous panel affirmed a ruling of the Federal Trade Commission ("FTC") and found that the website policy of Realcomp II, Ltd. ("Realcomp"), a real-estate brokerage association in southeastern Michigan, violated Section 5 by unreasonably restricting access to lower-cost, limited-service brokerage services found in Realcomp's database.

Realcomp had a membership of 14,000 residential real estate brokers, and, as a service to its members, operated a database of property listings known as a multiple listing service ("MLS"). Because MLSs such as that of Realcomp enable consumers to self-supply certain real estate brokerage services, they exert pressure on the traditional real estate model, in which brokers represent buyers and sellers alike in a system of flat fees and commissions. Broker services are commonly governed by exclusive right to sell ("ERTS") or exclusive agency ("EA") agreements, with the former providing a wider scope of services to the customer and the latter providing fewer services but at a discounted price. The FTC filed a complaint against Realcomp, alleging that its website policy was anticompetitive under Section 5 of the FTC Act, 15 U.S.C. § 45, because Realcomp prohibited information about EA and other nontraditional listings on its MLS from being distributed to public real-estate advertising websites.  In addition, Realcomp excluded EA and other nontraditional listings from the default search setting on the MLS; in order to find an EA listing, a broker would have to undertake a more specific search on the database.  Finally, Realcomp required that, in order for a listing to be labeled ERTS, a broker would have to provide full-service brokerage services in connection with the listing.  In a lengthy ruling [PDF] an administrative law judge for the FTC dismissed the complaint, finding that, while Realcomp's website policy was likely anticompetitive, the FTC failed to show any significant anticompetitive effects.  The FTC unanimously reversed [PDF], finding under its "quick-look approach" that Realcomp's policies were inherently suspect and presumptively unlawful and, alternatively under more searching analysis, that Realcomp's market power combined with the anticompetitive nature of its website policy to render its website policies unreasonable.  The FTC entered a cease and desist order, and Realcomp appealed to the Sixth Circuit.

Writing for a unanimous panel that included Judges Siler and Griffin, Judge Moore affirmed the FTC's ruling. Employing a substantial-evidence standard of review, the Court did not reach the FTC's "quick-look" analysis, but instead affirmed the commission's more searching, rule-of-reason analysis.  The Court agreed with the FTC that Realcomp possessed substantial market power and also that, by "limit[ing] access to internet marketing and impos[ing] additional costs on the marketing of discount listings," Realcomp's website policy had an anticompetitive nature.  Because both showings had been made, Realcomp's policy demonstrated "the potential for genuine adverse effects on competition" and, thus, could properly be found to violate Section 5.  The Court also found that, alternatively, Section 5 was violated because the FTC demonstrated "actual detrimental effects" of Realcomp's policies.  Specifically, the Court credited FTC evidence showing that the share of EA listings in Realcomp's MLS declined by 50% after initiation of Realcomp's website policies, thereby showing "substantial consumer harm."  Finally, the Court found that Realcomp had not shown any "countervailing procompetitive virtue" of its website policies, rejecting claims that the policies were designed to solve free-rider or bidding-disadvantage problems.  On these bases, the Court affirmed the FTC ruling.

With so many information-based services currently provided over the Internet, the ruling in Realcomp II provides businesses reason for caution when developing and implementing policies governing access to such information.

Earlier this week, the U.S. Supreme Court sided with the Sixth Circuit and resolved one of two Circuit splits involving interpretation of the Fair Labor Standards Act (“FLSA”), 52 Stat. 1060, 29 U.S.C. § 201 et seq., which sets forth rules governing minimum wages, maximum hours, and overtime pay.

 The FLSA contains an anti-retaliation provision which provides that an employer may not “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the Act], or has testified or is about to testify in such proceeding, or has served or is about to serve on an industry committee.”  Id. at 215(a)(3) (emphasis added).  The Sixth Circuit previously assumed without discussion that the statutory phrase “filed any complaint” includes oral as well as written complaints within its scope.  See Moore v. Freeman (PDF), 355 F.3d 558, 562-63 (6th Cir. 2004).  The Sixth Circuit’s interpretation has been followed by the Fifth, Eighth, Ninth, and Eleventh Circuits.  By contrast, the Second, Fourth, and Seventh Circuits have held that unwritten complaints are not protected. 

In Kasten v Saint-Gobain Performance Plastics Corp. (PDF), No. 09–834 (U.S. Sup. Ct. Mar. 22, 2011), the Supreme Court in an appeal from the Seventh Circuit resolved the Circuit split by siding with the Sixth Circuit’s view and holding that an oral complaint of a violation of the FLSA is protected conduct under the Act’s anti-retaliation provision.  In a majority opinion written by Justice Breyer (who was joined by Justices Roberts, Kennedy, Ginsburg, Alito, and Sotomayor), the Court recognized that a narrow interpretation of the phrase “filed any complaint” would undermine the FLSA’s basic objectives, which includes prohibiting “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.”  29 U. S. C. § 202(a). 

At the same time, the Court in Kasten declined to resolve another Circuit split under the FLSA involving the question of whether the phrase “filed any complaint” encompasses internal complaints made to private employers or instead only protects complaints made with the government.  The Sixth Circuit, along with the First, Third, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits, has held that internal complaints made to an employer are protected.  The Second and Fourth Circuits, by contrast, have rejected that view.  The Supreme Court did not address this issue on the grounds that it was not raised in the certiorari briefs and its resolution was not necessary to address the oral/written question at issue.

On Monday, the Supreme Court denied certiorari in City of Cleveland v. Ameriquest Mortgages Securities (discussed in our previous post), in which the Sixth Circuit had held that indirect injuries asserted by the City of Cleveland were not enough to allow the City to assert public nuisance claims against banks that provided financing to subprime mortgage lenders and created mortgage-backed securities.

SCOTUSblog's "Petition of the Day" for February 14 is Stoval v. Miller, No. 10-851, which seeks review of the Sixth Circuit's decision in Miller v. Stovall, 608 F.3d 913 (6th Cir. 2010).  The questions presented are: (1) whether the Sixth Circuit erred in concluding that "established law" for purposes of the Antiterrorism and Effective Death Penalty Act is determined as of the time the state conviction becomes final, and (2) whether the Sixth Circuit erred in concluding that a suicide note was "testimonial" for purposes of a Confrontation Clause analysis.  The petition argues that the Sixth Circuit's resolution of the first issue conflicts with a decision of the Third Circuit (as well as the Sixth Circuit's own precedent).  No response to the petition has yet been filed.

On January 24, the Supreme Court unanimously reversed two Sixth Circuit decisions.

In Thompson v. North American Stainless, LP, the plaintiff and his fiancee were both employed by the defendant.  The plaintiff claimed that the defendant discharged him in retaliation for his fiancee's filing of an EEOC charge of discrimination.  The Sixth Circuit, in a divided en banc decision, held that the plaintiff could not sue under Title VII because he had not engaged in any protected activity and thus was not within "the class of persons for whom Congress created a retaliation cause of action."  (See our prior reports on this case, here and here.)

The Supreme Court reversed in an 8-0 decision (with Justice Kagan not participating).  Adopting a "zone of interests" test developed in administrative law, the Court held that the statutory phrase "person claiming to be aggrieved" is broad enough to include "any plaintiff with an interest 'arguably [sought] to be protected by the statutes,'" not just those persons who engaged in protected activity.  As an employee who was intentionally harmed as a means of retaliation against another employee, the plaintiff fell "well within the zone of interests sought to be protected by Title VII."

In Ortiz v. Jordan, the defendants asserted qualified immunity from the plaintiff's Section 1983 lawsuit.  The district court denied summary judgment on the qualified immunity defense on the ground that it "turned on material facts genuinely in dispute."  After the case proceeded to trial and the jury returned a verdict for the plaintiff, the defendants challenged the denial of summary judgment on appeal.  The Sixth Circuit, recognizing denial of qualified immunity denial as an exception to the general rule against review of summary judgment decisions after trial, reversed.  (See our guest blog post on this case, here.)

The Supreme Court unanimously reversed the Sixth Circuit.  The Court held that an order denying summary judgment may not be reviewed after a trial on the merits.  It left open, however, the possibility that a qualified immunity defense raising a purely legal issue--i.e., an issue as to the substance and clarity of existing law, and not as to the facts of what occurred--may be reviewable after trial.  The Court did not need to reach that question because the defendants' claim of qualified immunity turned on the facts.  That being the case, the defendants were required to preserve their argument by making a Rule 50(b) motion post-verdict, which they did not do.