Sixth Circuit Holds Its TCPA Decision Not Impacted by Supreme Court’s Opinion in PDR Network

Recently a Sixth Circuit panel unanimously agreed in a published opinion that the 2019 Supreme Court decision, PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., does not impact the resolution of a circuit case reviving an unsolicited advertisement claim under the Telephone Consumer Protection Act (“TCPA”).

The Sixth Circuit Case

Matthew N. Fulton, D.D.S., P.C. v. Enclarity, Inc., concerns a 2016 fax received by Fulton, a dental practice, that sought verification or update of the practice’s contact information for use in a medical provider database.  Continue Reading

Sixth Circuit stays district court order that had lifted Michigan gym lockdown

Note — This post (and many more) arrives thanks to Zach Young, a Cincinnati native and rising 2L at Stanford Law School, where he studies as a Knight-Hennessy Scholar. He will be contributing to the Sixth Circuit Appellate Blog regularly this summer.

Michigan gym owners will have longer to wait before they can reopen.

Last Wednesday, the Sixth Circuit granted Michigan Governor Gretchen Whitmer an emergency stay from a district court injunction authorizing Michigan gyms to resume business.

The decision comes as coronavirus cases appear to be on the rise in several states, with Texas recently announcing a pause in its reopening. Business owners, who have faced months of little to no revenue, have turned to the courts to challenge state orders prohibiting their activity.

In Michigan, gyms have been shut down since a March 16 executive order. While some facilities in the northern part of the state have been allowed to reopen, most gyms must remain closed until July 4 at the earliest. Plaintiffs—a collection of twenty-two Michigan gyms and an affiliated trade association—filed suit on May 22.

They found quick relief in the form of a preliminary injunction issued by Judge Paul Maloney of the Western District. On June 19, the district court held that Gov. Whitmer had not provided sufficient support for why some indoor businesses—like hair salons and bars—could reopen, while gyms could not. This ran afoul of the Fourteenth Amendment’s Equal Protection Clause, the court contended, since it treated similarly situated businesses differently without a rational basis. The governor “answered with a blanket ‘trust us’ statement that is insufficient,” Judge Maloney wrote, inviting Plaintiffs to open their doors on June 26.

The Sixth Circuit has now withdrawn that invitation. Continue Reading

Sixth Circuit Vacates Right-to-Literacy Ruling

Last month, we explained that the settlement between the plaintiffs and Michigan’s Governor Whitmer in Gary B. v. Whitmer might end up ultimately vacating the Sixth Circuit’s pathbreaking right-to-literacy ruling in that case.  The parties informed the Court of the settlement and the plaintiffs promised to file a motion to dismiss.  But some defendants had already petitioned for rehearing en banc and other amicus parties (including ten state Attorneys-General and a homeschooling association) also asked for the decision to be taken en banc and overruled.  Those briefs presented a dozen different attacks on the decision.

Interestingly, the Sixth Circuit did not grant any of those requests but instead granted en banc review on its own sua sponte.  Under Circuit Rule 35(b), granting en banc review automatically vacates the prior panel’s decision.  The plaintiffs then moved to dismiss because the settlement had mooted the dispute, and, yesterday, the en banc court dismissed the case as moot.  By acting sua sponte to take case en banc, and then dismissing the case as moot, the Circuit did not endorse any of the theories pushed by the defendants or amici.  And the decision itself was neatly vacated without the need for even a Munsingwear analysis.

The Detroit Free Press reports that the parties have taken this turn of events with equanimity.  The plaintiffs, after all, still have their settlement, and even a vacated decision might be helpful somewhere down the line.  And, except for the items Governor Whitman agreed to in the settlement, the defendants do not have any legal repercussions or awkward precedent.





Coronavirus Update: PPP Guarantees Loans for Sexually-Oriented Small Businesses

The effects of the coronavirus pandemic continue to play out in unexpected ways, as this blog has covered on several occasions. Now the Sixth Circuit has ruled on loan guarantees under the Paycheck Protection Program for sexually-oriented businesses.  Can the Small Business Administration, consistent with long-standing agency policy, prohibit sexually-oriented small businesses from eligibility for paycheck loans guaranteed by the federal government under the PPP?  The Sixth Circuit and Eastern District of Michigan have both said “no.”

The SBA Deems Sexually-Oriented Businesses “Ineligible” for PPP Participation

The PPP—part of Congress’s effort under the March 2020 CARES Act “to mitigate the economic devastation caused by the COVID-19 pandemic”—authorizes the SBA to guarantee billions in private loans to small businesses.  Loans made by SBA-participating banks to small businesses to satisfy payroll obligations (among other things) are eligible for forgiveness.  The SBA, rather than the small business, pays the lender the amount of the loan, plus interest.

The SBA has “extraordinarily broad powers” to aid, counsel, assist, and protect the interests of small business, including guaranteeing loans made by private lenders to small businesses.  As part of those broad powers, since at least January 1996 the SBA has deemed “ineligible” certain sexually-oriented businesses from participating in SBA lending programs.  That prohibition continues today.

Shortly after enactment of the CARES Act, the SBA adopted a set of rules to implement the PPP loan guarantees.  Those rules incorporated SBA’s prohibition of sexually-oriented businesses from participating in SBA lending programs.  A consortium of adult entertainment and novelty stores filed an emergency motion for preliminary injunction, imploring the district court to prohibit the SBA from denying PPP loans based on the “sexual nature” of their businesses.

District Court Enjoins the SBA PPP Implementing Rules

Applying the Chevron doctrine, the district court ruled the CARES Act unambiguously prohibits the SBA from excluding sexually-oriented businesses from the PPP.  Under the familiar Chevron “two-step,” the court first asks whether “Congress has directly spoken to the precise question at issue.”  If the statute is unambiguous, that is the end of the matter; the court applies the statute as written.  “However, if the statute is ambiguous, then (and only then)” does the court proceed to step two of the Chevron analysis—deference to the agency’s reasonable statutory interpretation.

Emphasizing that Chevron step one is no toothless formality, the court explained that Congress has identified “only two criteria” for a business to be eligible for PPP loans: (1) the business must have fewer than 500 employees (2) during the “covered period” of the PPP.  So long as a business has less than 500 employees during the covered period, Congress provided that “any business . . . shall be eligible to receive” a SBA-guaranteed loan.  Congress’s use of “any” and “shall” in the PPP, according to the court, “requires the SBA to deem eligible for a PPP loan guarantee every business” that employed less than 500 people during the covered period.  Thus, under the clear terms of the statute, the SBA could not exclude the sexually-oriented businesses from the PPP.

Sixth Circuit Denies SBA Emergency Stay Motion

Last Friday, a Sixth Circuit panel (Stranch, J., Donald, J.) agreed.  The Court explained the term “any” carries an expansive meaning, makes no distinction or limitation, and thus implies “every member of the class or group.”  That “broad interpretation” was also appropriate given “Congress’s intent to provide support to as many displaced American workers as possible.”  Or as the district court put it, “Congress did not pick winners and losers in the PPP.  Instead, through the PPP, Congress provided temporary paycheck support to all Americans employed by all small businesses that satisfied the two eligibility requirements—even businesses that may have been disfavored during normal times.”  Because the district court’s ruling was reasonable, the Sixth Circuit denied the SBA’s emergency motion to stay the injunction order.

Judge Siler dissented, contending the PPP is indeed ambiguous.  Picking up on an argument raised by SBA, the dissent contends the PPP says it is “to be administered ‘under the same terms, conditions, and processes’ as other [SBA] loans, which exclude private clubs and adult entertainment businesses from eligibility.”  That additional language, the dissent and the SBA argue, creates ambiguity as to whether SBA’s longstanding policy to exclude sexually-oriented businesses from loan eligibility is permissible under the PPP.

On one key point, the Siler dissent—a concise effort drafted under unusual time pressure—says aloud what we’ve all thought at one time or another:

It is also a weekend and time is running short.





Sixth Circuit stays injunction in Ohio pandemic voting rights case

Today the Sixth Circuit issued a published order in Thompson v. DeWine, the First Amendment voting rights case that Ben Beaton blogged about on Friday. The per curiam order by a three-judge panel granted the Ohio Attorney General’s request for a stay pending appeal of the district court’s injunction (and denied as moot the state’s request for an administrative stay).

Focusing principally on the likelihood of success on the merits, the court weighed the burdens imposed by Ohio’s constitutional requirements for ballot initiatives against the state interests those requirements are meant to serve, taking into consideration the extent to which those interests make it necessary to burden the plaintiffs’ rights (the Anderson-Burdick framework). The court concluded that Ohio’s requirements—including that a ballot initiative’s petitioners must sign in ink, not electronically—passed muster under that standard, notwithstanding the COVID-19 pandemic. It distinguished its unpublished order in Esshaki v. Whitmer, 2020 U.S. App. LEXIS 14376 (6th Cir. May 5, 2020), from earlier this month on the grounds that Ohio’s stay-at-home order specifically exempted First Amendment-protected activity and that Ohio was beginning to lift its stay-at-home order, several weeks before the deadline for submission of a ballot-initiative petition.

Several aspects of the decision are noteworthy, beyond the substance. Continue Reading

Covid E-Signature Voter Case on (Very) Fast Track from Ohio to En Banc Review?

Just two days after a federal district court’s preliminary injunction allowed use of e-signatures to satisfy some Ohio election requirements, the Ohio Attorney General has taken the unusual step of asking the en banc Sixth Circuit to overturn or stay the injunction. And the Sixth Circuit responded with equal if not greater alacrity, calling within hours for short-fuse opposition briefing.

Ohio groups advocating minimum-wage, voting-rights, and marijuana ballot initiatives for the fall election asked the Southern District of Ohio to allow electronic signatures to satisfy voting-law requirements. Public-health concerns surrounding coronavirus transmission, they argued, made traditional pen-and-paper signatures untenable. The Ohio Constitution, however, requires signatures in ink, and the state has raised concerns regarding fraud.

The district court held that the First Amendment, under current circumstances, entitles the advocacy groups to use electronic signatures and requires Ohio to extend the signature-collection deadline by a month to July 31. The court declined, however, to reduce the number of signatures required or to simply place the initiatives on the ballot directly. This decision follows hot on the heels of the Sixth Circuit’s May decision in Esshaki v. Whitmer, 2020 WL 2185553 (May 5, 2020), a split order, which addressed the First Amendment’s applicability to state election signature requirements and deadlines.

The Ohio AG’s appeal is notable for its speed (filed less than two days after the district court order) and its target (straight to en-banc review). The government also requested an administrative stay and stay pending appeal. Four hours later, the court asked the plaintiffs to respond to the en banc petition in a week. Happy drafting!

Following the initial surge of covid-related litigation over shutdown orders and religious gatherings, Ohio’s election appeal is part of a next wave of pandemic litigation worth watching. The case is Thompson v. DeWine, No. 20-3526.

Sua Sponte En Banc Rehearing Granted in Right-to-Education Case

The full Sixth Circuit has voted to rehear the Detroit right-to-education case. This vacates the panel decision holding that access to literacy was a fundamental constitutional guarantee.

The court’s order comes only 6 days after Michigan Gov. Gretchen Whitmer announced a settlement with the student plaintiffs and sought dismissal of the suit on mootness grounds.  One group of defendants and another group of would-be intervenors had asked the court to go banc. Other defendants, meanwhile, supported the settlement and opposed their co-defendants’ authority to continue the fight.

(All of which would amount to a veritable fed-courts feast–or famine. Furloughed 3Ls from Michigan to Tennessee can say a prayer of thanksgiving for p/f  this semester. Silver linings!)

Notably, the court’s order indicates that a judge *sua sponte* called for the rehearing vote. So those predicate procedural questions regarding intervention, standing, and litigating authority remain unanswered, if diminished in importance, at least for now.

Michigan Settlement Attempts to Moot Potential En Banc Review of Right-to-Literacy Ruling

Last night the State of Michigan and students from Detroit public schools reached a settlement agreement in a case concerning whether those students had a constitutional right of “access to literacy.” News reports indicate the settlement includes a legislative request by Gov. Whitmer for $94.5 million in literacy funding for Detroit schools, $280,000 for seven student plaintiffs, and creation of two task forces focused on educational quality.

As previously reported on this blog, a split Sixth Circuit panel found in Gary B. v. Whitmer  that the Fourteenth Amendment’s Due Process Clause protected a right to a basic minimum education, which included a “foundational level of literacy.”

The settlement with students comes shortly after the Michigan Legislature moved to intervene and tendered a petition for rehearing en banc. The court has not yet ruled on the Legislature’s motion to intervene. Additionally, the Michigan State Attorney General, on behalf of two of the State Board of Education members who are defendants in the suit, petitioned for rehearing en banc,  but, in an unusual filing, some defendants moved to withdraw the Rehearing petition filed by the same office on behalf of the other defendants. The parties indicated in a joint filing to the clerk that the student plaintiffs plan to move to dismiss the case in its entirety as moot.

Eagle-eyed appellate lawyers may have spotted a lurking question whether U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership and the Munsingwear doctrine have any implications for the precedential status of the panel decision under these circumstances. We will stay tuned to see whether that question is asked or answered in the coming days.

Supreme Court Trims Wire Fraud Theory of Public Corruption in Bridgegate Decision

The Supreme Court revisited the Chris Christie administration last week with a decision in Kelly v. United States that reversed the corruption convictions of two top gubernatorial aides. The charges stemmed from their role in the partial closing, and resulting traffic jam, of the George Washington Bridge.

Sixth Circuit blogger Ben Glassman recently published his views on how the ruling will–and won’t–affect public-corruption prosecutions going forward.

Although the Supreme Court characterized this conduct as an abuse of power, it held that Kelly and Baroni had not committed federal wire fraud or fraud against a federally funded program because both laws criminalize schemes to obtain money or property—and the defendants here sought political punishment, not property. …

Substantively, the Kelly decision does cut back somewhat on federal prosecutors’ ability to use wire fraud in charging public corruption. It gives additional force to arguments that the use of public employees’ time and labor must be an object of the scheme, not incidental to it. But it does not cut back that statute in nearly the way that Skilling v. United States, 561 U.S. 358 (2010), narrowed the construction of honest services fraud.

You can read the whole post here.


Sixth Circuit Concurrence Fears Courts May Be Groovin’ to the Wrong Tune in Copyright Cases

It’s a question we know has been keeping you up at night, as you reach deep into your quarantine discography: who is (or are) the true author(s) of the Everly Brothers hit, Cathy’s Clown?  Sadly, those looking for finality will have to wait.  On Monday, a Sixth Circuit panel held that question must be resolved by a jury.  As Dick Clark presciently recognized on American Bandstand, the song is “a little unusual, a little strange,” and so is the dispute in Everly v. Everly.

Brothers Out of Tune

Don and Phil Everly—together, the Everly Brothers—recorded and released Cathy’s Clown in 1960 and both shared in its success for many years.  The brothers, originally credited as co-authors, each granted 100% of the copyrights to Cathy’s Clown to a publication company in exchange for royalties.  Unfortunately, the brothers’ musical harmony did not extend to their personal relationship, and by 1973 Don and Phil had ceased speaking to each other.  Phil passed away in 2014, but now, Don and Phil’s successors each claim to have copyright interests in Cathy’s Clown.  Don claims he is the sole author of the song, while Phil’s successors maintain the brothers wrote the song together.

Don sued Phil’s successors in 2017, seeking a declaration that his late brother is not a co-author of Cathy’s Clown and Don owns 100% of the copyright termination rights in the song, including 100% of the royalties.  Phil’s successors counterclaimed for a declaration that both brothers were authors.  The district court granted summary judgment in favor of Don, which turned on the court’s finding that Phil’s authorship had been expressly repudiated no later than 2011 (when Don filed his copyright termination notice and claimed to be sole author of Cathy’s Clown), thus triggering the 3-year statute of limitations.  Accordingly, the district court ruled, any claim Phil may have had to authorship was forfeit by 2014.

Jury To Sort It Out

In a split decision (Bush, J., opinion, joined by Murphy, J.), the Sixth Circuit reversed.  It held that a genuine factual dispute existed regarding whether Don expressly repudiated Phil’s authorship.  Analogizing to “the doctrine of adverse possession in real property,” the court explained the statute of limitations for a copyright ownership claim begins to run whenever one author makes a “plain and express repudiation” of authorship against a putative co-author.  Because the record did not establish such a plain and express repudiation as a matter of law by Don against Phil as a co-author, the court enlisted the jury “to sort it all out.”

Doubt-Filled Concurrence

Judge Murphy, although agreeing with the outcome, wrote separately to “express doubt over [whether the plain-and-express repudiation] test is the right way to think about the start date for this statute of limitations.”  Judge Murphy takes issue with the well-worn “groove” courts “have gotten into” of mechanically applying the plain-and-express repudiation test—a “discovery rule” that triggers the statute of limitations period when a putative author “discovers or should have discovered” a co-author’s clear challenge to the others’ authorship status.  According to the concurrence, the text of the Copyright Act and Supreme Court precedent mandate a copyright authorship claim accrues (i.e., the statute of limitations begins to run) “on the date that a violation of the plaintiff’s legal right has occurred.”  As Judge Murphy sees it (quoting Nimmer on Copyright), “courts ‘should not deem the statute of limitations to start running until [a] claim has matured to the point of being legally cognizable.’”  And, Judge Murphy “do[es] not think one owner’s notice disputing another’s ownership interest suffices to create a ‘complete and present’ claim in this ownership context.”

But after setting the hook, Judge Murphy stops short of reeling in the catch.  He “remain[s] unconvinced by the plain-and-express-repudiation test,” but “confess[es] doubt . . . over when this sort of ‘claim’ does ‘accrue’ under the statute of limitations.”  The “few possibilities” apart from the plain-and-express repudiation test put forth in the concurrence admittedly “fray” and “wrinkle” by interjecting principles of “state-created claim[s],” thus calling into question the applicability of the Copyright Act’s statute of limitations altogether.  But, according to the concurrence, those “difficult questions [are] for another day,” and for some other “poor soul”—likely the Supreme Court—“tasked with getting [the courts] out” of their unfortunate groove.