Sixth Circuit’s Plain-Meaning Approach to Foreign Arbitration Discovery

By Benjamin Beaton on Posted in Case Updates, Recent Cases, Supreme Court

Parties may now seek discovery from district courts within the Sixth Circuit for use in foreign private arbitrations. In Abdul Latif Jameel Transportation Company v. FedEx, a unanimous panel held that the plain meaning of the phrase “foreign or international tribunal” included non-governmental tribunals. The decision addresses an important foreign-discovery provision that, according to some at the ABA, had raised more questions than courts had answered.

Following a deep dive into dictionaries, treatises, and judicial precedent, the Sixth Circuit held that a federal district court has the authority, under 28 U.S.C. § 1782(a), to compel discovery from a U.S. corporation for use in a foreign private proceedings—in this case, a Dubai arbitration. The decision departed from two 1999 precedents of the Second and Fifth Circuits, which limit discovery to government proceedings. Those opinions, according to Judge Bush, “turned to legislative history too early in the interpretive process.”

His unanimous opinion (Chief Judge Cole and Judge Griffin joining), by contrast, adopted a textualist interpretation to § 1782(a). That statute allows U.S. courts to order a person or corporation that resides in the district to produce testimony, a statement, documents, or things “for use in a proceeding in a foreign or international tribunal.” According to both legal and non-legal dictionaries, the ordinary meaning of the word “tribunal” in 1964 (when Congress enacted § 1782(a)) embraced private arbitrations. So did an 1853 treatise written by none other than Justice Joseph Story, a 20th century string of state supreme court opinions, and various U.S. Supreme Court opinions.

What does this mean for U.S. businesses and counsel? District courts in the Sixth Circuit may start hearing from more parties embroiled in foreign disputes. Discovery is by no means absolute, however: under the Supreme Court’s 2001 decision in Intel v. ADM, several discretionary factors govern whether trial judges should compel discovery under §1782(a), even when the law allows it. Absent a cert grant, the Western District of Tennessee will face that question on remand.

Opioid Update: MDL Defendants Seek Judge Polster DQ

By Benjamin Beaton and Barrett Block on Posted in Case Updates

Eight drug retailers, distributors, and pharmacies (but no manufacturers) have asked Judge Dan Aaron Polster to recuse himself from presiding over most of the 2,000 pending opioid lawsuits comprising the MDL.

The parties filed the motion to disqualify Judge Polster on Saturday. They claim that the Judge’s comments made during various hearings, interviews, and forums demonstrate prejudice and bias.

The defendants emphasized comments during the first MDL hearing on January 9th, 2018: because of the “opioid crisis . . . 150 Americans are going to die today, just today, while we’re meeting.” “My objective is to do something meaningful to abate this crisis,” Judge Polster added.

“Any one of these statements would be enough to cause a reasonable person to question a judge’s impartiality,” the motion stated. Judge Polster, it contended, seemingly has “prejudged the responsibility of all the Defendants for ‘the opioid crisis.’”

A lawyer for the plaintiffs, Paul Geller, responded to Law360 that “it’s tough to comment because my jaw is still on the floor.” Legal scholars and commentators, meanwhile, suggested that the DQ motion is unlikely to succeed—at least now—but may be intended to aid a future appeal, particularly given the Sixth Circuit’s reversal of Judge Polster’s data-publication decision in June.

As we covered Thursday, this motion for disqualification comes after Ohio Attorney General Dave Yost filed a mandamus petition at the Sixth Circuit Court of Appeals to enjoin the judge from proceeding with the October 21st trial for Cuyahoga and Summit counties. Stay tuned.

Opioid Update: Ohio Asks Sixth Circuit for Mandamus while U.S. Chamber Says Muni Suits by Plaintiffs’ Firms Could Upend Civil Litigation

By Benjamin Beaton and Barrett Block on Posted in Case Updates, News and Analysis

As we covered in July, the country has its eyes on an Ohio opioid MDL handling more than 2,000 lawsuits brought by more than 1,200 cities, counties, and tribes against drug manufacturers, distributors, and pharmacies.

Ohio Attorney General Dave Yost recently filed a mandamus petition at the Sixth Circuit Court of Appeals to enjoin District Judge Dan Polster from proceeding with the October 21st trial for Cuyahoga and Summit counties. The counties seek billions of dollars to cope with the opioid crisis’ effects on their health care systems, law enforcement, and economies—in a bellwether case for the thousands of others pending across the country. According to Yost, the trial would “cripple the federal dual-sovereign structure of these United States,” by letting counties infringe on the state’s power to prosecute claims on behalf of its citizens.

Thirteen other states and the United States Chamber of Commerce backed up Yost in amicus briefs filed last week. The Chamber’s brief, filed by OSU law professor and administrative-law guru Chris Walker, described “the perils of affirmative municipal litigation.” (Which, as perceptive defense lawyers already know, looms on the horizon as a massive development in federal civil litigation.)

The Chamber contends that “these municipal lawsuits essentially duplicate the lawsuits the states themselves have already brought,” threatening to “significantly reduc[e] the funds available to compensate injured individuals” and “shif[t] substantial settlement funds away from the states and their residents and into the pockets of plaintiffs’ lawyers.” Litigating with 50 state AGs is one thing; trying to negotiate with thousands of municipalities would “mak[e] global settlements nearly impossible.”

But according to the counties—who have been litigating the case for over two years—this is an eleventh-hour power grab. Counsel for Cuyahoga County, Hunter Shkolnik, said the state attorneys general “are acting like pirates, coming in to take the spoils of the hard work we’ve done.”

To the chagrin of Yost and others, Judge Polster just approved a negotiation class that could consist of every city and county in the country. Moreover, Purdue Pharma, the maker of Oxycontin, proposed a $12 billion (yes, billion with a “b”) settlement with about half of the states and local governments involved. Still, Yost doesn’t “think there’s a settlement . . . there is a proposal that’s been accepted by a majority of attorneys general, but there are quite a few significant states that have not joined at this point.” And Pennsylvania Attorney General Josh Shapiro thinks the tentative deal is a “slap in the face to everyone who has had to bury a loved one due to [Purdue Pharma].”

According to Shapiro, “this is far from over.” He may be right. Stay tuned.

En banc watch: “Death [or at least en banc denial] by distorted originalism”

By Benjamin Beaton and Barrett Block on Posted in Case Updates, En Banc Watch

Like a Sergio Leone scene, the Sixth Circuit issued an explosive en banc denial of CIC Services LLC v. Internal Revenue Service (a case we covered back in June).

As he did at the panel stage, Judge Clay defended the application of the Anti-Injunction Act, which here bars CIC Services from challenging the IRS’s categorization of an in-house insurance company as a tax shelter. He minced no words, characterizing Judge Thapar’s en banc “dissental” (itself a defense of Judge Nalbandian’s earlier panel dissent) as an attempt “to inflict death by distorted originalism on the modern administrative state.” According to Judge Clay, the case was “about statutory interpretation, not about the constitutionality of the so-called administrative state, or even the constitutionality of the AIA.”

Judge Thapar disagreed, writing (on behalf of six other judges) that the AIA shouldn’t apply because it only “applies to suits ‘for the purpose of restraining the assessment or collection of a tax.’” And this case wasn’t about taxes; it was about civil penalties for failing to report information to the IRS. See Autocam Corp. v. Sebelius (distinguishing the assessment or collection of a tax from an underlying policy rule), and Seven-Sky v. Holder, 661 F.3d 1, 8–10 (D.C. Cir. 2011), abrogated on other grounds by NFIB v. Sebelius, 567 U.S. 519. “Indeed, CIC currently has no ‘tax’ liability under this regulatory regime and may never incur any such liability.”

According to Judge Thapar, applying the AIA here unfetters the IRS’s “power to impose sweeping ‘guidance’ across areas of public and private life.” “In this country,” Thapar asserted, “people should not have to risk prison time in order to challenge the lawfulness of government action. In this circuit, they now do.”

Judge Sutton was in the pivot. His concurrence in the denial of rehearing expressed sympathy with the view of Judges Nalbandian and Thapar—at least “as an original matter.” Given the conflicting opinions from the Supreme Court, D.C. Circuit, and now the Sixth Circuit, however, he reminded his colleagues (and perhaps clerks reviewing a future cert petition?) that the ball had already passed to the high court:

“In a dispute in which the Court’s decisions plausibly point in opposite directions, it’s worth asking what value we would add to the mix by en-bancing the case in order to create the very thing that generally prompts more review: a circuit split.”

Particularly one involving a 2015 opinion of then-Judge Kavanaugh. Judge Sutton called on his colleagues that a “little caution” was “is in order when it comes to judging the efforts of our colleagues on this court and on the D.C. Circuit to sort this out.”

Sixth Circuit: Bank Fraud Requires … a Bank

By Thomas Zeno and Benjamin Beaton on Posted in Case Updates, Recent Cases

A divided Sixth Circuit panel overturned the convictions of two alleged fraudsters because the government failed to prove that they intended to obtain property from a bank (technically, a “financial institution,” under 18 U.S.C. §1344).  Back in the heady 2000s, the defendant homebuilders in the companion cases of U.S. v. Banyan and U.S. v. Puckett used straw purchasers and fraudulent applications to induce mortgage companies to finance purchase of multiple luxury homes, to the tune of $5 million.  Mortgage payments went unmade; the mortgage companies foreclosed; and the FBI investigated.

Continue Reading

Bargaining from Scratch is Alright. Sometimes.

By Benjamin Beaton and Lauren Kuley on Posted in Case Updates, Recent Cases

Note — This post (plus many others) arrives thanks to the hard work of Sixth Circuit Appellate Blog intern extraordinaire Barrett Block, a rising 3L at UK Law. 

In Hendrickson USA, LLC. v. National Labor Relations Board, a divided Sixth Circuit panel revisited one of the oft-litigated phrases in labor law: “bargaining from scratch.”  The majority—applying a series of Supreme Court, Sixth Circuit, and NLRB decision on the subject—determined the NLRB lacked support when it ruled the phrase, as used here, was an unlawful threat rather than lawful speech.

The dispute arose when an employer responded to the formation of a union organizing committee by sending a letter to all plant employees advocating against unionization. The letter described the disadvantages that could follow unionization and stated that “contract negotiations would begin ‘from scratch.’” An employee complained to the NLRB, which determined the letter represented an unlawful threat of a more onerous work environment and lower wages and benefits. Continue Reading

July Wrap-Up: First Amendment Arrest Edition

By Benjamin Beaton and Lauren Kuley on Posted in Case Updates, Recent Cases

The Sixth Circuit wrapped up July with two decisions addressing similar protest-arrest claims under the First Amendment.  But the panel opinions and outcomes looked quite different.

Parma police parody: Anthony Novak was fed up with the Parma Police Department. So he created a “farcical Facebook account” (i.e., “meme” page) designed to look like the police department’s official page. Novak polarized his audience with posts describing, say, rehabilitated sex-offender piglet-cops. Some “thought it was ‘the funniest thing ever.’”

Others less so. The police department investigated, issued a press release, subpoenaed Facebook, obtained a search warrant, and eventually nabbed the anonymous author. It arrested Novak for impairing police functions.  Ohio Rev. Code § 2909.04(B).

Novak stood trial and was acquitted. Then he unleashed a civil complaint that any professor who’s written a First Amendment exam would envy: retaliation, prior restraint, anonymous speech, malicious prosecution, Privacy Protection Act, conspiracy, supervisory liability. The works.

The district court denied the officers’ attempt to dismiss on qualified-immunity grounds. In Novak v. City of Parma, a unanimous Sixth Circuit panel (Thapar writing; Merritt and Readler joining) affirmed in part:

Novak’s page delighted, disgusted, and confused. Not everyone understood it. But when it comes to parody, the law requires a reasonable reader standard, not a “most gullible person on Facebook” standard. The First Amendment does not depend on whether everyone is in on the joke.

The appeal implicates many fascinating First Amendment questions, and is well worth a read. Some questions are not yet squarely presented, given the motion-to-dismiss/qualified-immunity posture—such as whether public officials may delete Facebook posts (see, e.g., Morgan v. Bevin, 298 F.Supp.3d 1003 (E.D. Ky. 2018) (denying preliminary injunction)) and whether probable cause defeats a retaliation claim based solely on protected speech and/or an infrequently enforced statute.

For now, each side walks away with something: the anonymous-speech, public-censorship, and “right to receive speech” claims fail because the officers didn’t violate clearly established law, while the retaliation, prior-restraint, search-and-seizure, malicious prosecution, supervisory-liability, conspiracy, and privacy act claims survive.

Breakfast of champions (of free speech): In 2015, the Fairness Commission protested the Kentucky Farm Bureau’s ham breakfast at the State Fair in Louisville. Members wearing t-shirts enumerating allegedly discriminatory Farm Bureau policies stood up during the breakfast (outside a designated “protest zone”) and refused to leave.

As in Parma, officers arrested the protesters. But in Louisville, prosecutors dropped the charges. As in Parma, the arrested protesters sued. But in Louisville, the trial court held qualified immunity protected the arresting officers.

(But wait, there’s more!) As in Parma, the Sixth Circuit in in Hartman v. Thompson took a close look at the Supreme Court’s recent decision in Nieves v. Bartlett (probable cause to arrest (usually?) defeats a claim for First Amendment retaliation claim). But unlike the unanimous Parma decision, Hartman resulted in a fractured decision.

Judge Suhrenreich’s majority opinion affirmed the district court’s judgment on qualified-immunity and merits grounds: probable cause existed to arrest the plaintiffs for disrupting a meeting, so the § 1983 claims failed.

Judge Bush concurred in part: probable cause should take into account “all the facts and circumstances within the officers’ knowledge” to evaluate whether “a man of reasonable caution [would] believe that an offense” had been committed. Because the Fairness Campaign also had stood in protest during the 2014 breakfast, the officers had probable cause in 2015.

Judge Moore, however, dissented: because accounts of the protesters’ arrest varied, genuine issues of material fact precluded summary judgment. She also disagreed that the officers’ restriction of the Fairness Campaigners to a protest zone had properly been deemed a viewpoint-neutral time/place/manner restriction.

Mid-July Recap: Barratry(!), ERISA Preemption(!!!), the Havis Trilogy and the Times

By Benjamin Beaton and Lauren Kuley on Posted in Case Updates

Note — This post (plus many others) arrives thanks to the hard work of Sixth Circuit Appellate Blog intern extraordinaire Barrett Block, a rising 3L at UK Law. 

A win for the Times — Our June Court Week recap highlighted the oral argument in Carlo Croce v. New York Times, involving a “prolific” Ohio State cancer researcher’s defamation claim against the New York Times. In a speedy decision issued only 26 days after argument, the Sixth Circuit (Moore writing; Cook and Nalbandian joining) unanimously affirmed Judge Graham’s dismissal. Though the Times’ article about Croce “may be unflattering . . . [it] is a standard piece of investigative journalism that presents newsworthy allegations made by others.”

The court reasoned “that a reasonable reader would not interpret [the] article, considering it as a whole, to be defamatory.” The panel nodded to Judge Nalbandian’s concurrence in Boulger v. Woods, which supported a reasonable-person rather totality-of-the-circumstances test under Ohio’s innocent-construction defamation rule.

Havis persists: Part III — United States v. Havis, a seemingly ordinary Tennessee felon-in-possession case, is the gift that keeps on giving for Sixth Circuit court watchers. It produced:

  1. four panel opinions, including a lengthy concurrence from Judge Amul Thapar challenging Auer deference,
  2. an en banc reversal, following Havis’ rehearing petition, restricting Sentencing Commission authority to establish freestanding criminal liability through the Guidelines,
  3. and now a concurrence to the denial of the government’s rehearing petition, in which Judge Jeff Sutton explained why the lawyers might’ve overlooked a way to treat Havis’ conviction as a controlled substance offense under 21 U.S.C. 841(a)(1) without running afoul of the Guidelines.

Alas, at this late stage in the proceedings that argument was no longer available. As the dust finally settles, Jeffery Havis’ drug conviction stands vacated and the Havis Trilogy has ended. (Unless, of course, the government files a cert petition.)

Back to Tennessee — Lillian Knox-Bender sued a hospital in Tennessee state court for overcharging her. Her husband’s ERISA plan covered just $100 of the $8,000 bill. But because federal courts have exclusive jurisdiction over ERISA claims, the hospital removed the case and the federal court denied her motion to remand the case back to state court. Knox-Bender appealed to the Sixth Circuit—and won.

In Knox-Bender v. Methodist Healthcare-Memphis Hospitals, a unanimous panel (Thapar writing; McKeague and Murphy joining) held that “the simple presence of an ERISA plan on the balance sheet” is not enough for federal preemption. Otherwise, whenever “an ERISA plan paid any amount, no matter how small, [it] would be enough to force a case into federal court.”

If you sued for above-menu pricing, Judge Thapar explained, you would sue the restaurant rather than your credit-card company. Similarly, suing for an overcharged medical bill amounts to a claim against the hospital, not your ERISA plan.

1st Amendment Worker’s Comp — Ohio law bars attorneys from soliciting worker’s compensation claimants. Bevan, a law firm, allegedly violated O.R.C. § 4123.88(A) when it used state Bureau of Workers Compensation information to send direct mail to claimants. Bevan’s declaratory judgment claim that § 4123.88 is unconstitutional failed at the district court but prevailed at the Sixth Circuit.

Judge John Bush wrote in another unanimous opinion (Judges Cook and Siler joining) that although “Ohio has a substantial interest in protecting claimant privacy . . . [the] total ban on solicitation [was] not designed carefully to achieve the State’s goal.” Had the law banned only in-person solicitation or the use of illegally obtained information, it may have been constitutional.  But under Central Hudson and other commercial-speech decisions, the complete ban found in this 1930s-era law suppressed too much speech.

“Lexis on Steroids”: Corpus Linguistics receives mixed reception at the Sixth Circuit

By Benjamin Beaton on Posted in Case Updates, Learned Sixth, News and Analysis

By Zak Lutz (HLS ’20; Squire Patton Boggs summer associate) and Benjamin Beaton

Sixth Circuit judges have taken an interest in “corpus linguistics.” At a recent gathering in northern Kentucky, three Sixth Circuit judges engaged in an impromptu discussion of the interpretive tool. And last week, in Wilson v. Safelite Group, two other Sixth Circuit judges wrote concurrences debating its merits.

A “corpus” is simply a collection of texts. “Corpus linguistics” is where big data meets legal interpretation: textualist jurists and scholars (most prominently at BYU) are using a vast searchable collection of texts to assess linguistic meaning(s), frequency, and change. The movement has a somewhat populist (or “ordinary meaning”) bent, with the corpus including “regular usage” texts—magazines, books, academic articles, and speeches—but not dictionaries.

Lawyers and judges can search corpora to identify how a word was used during a specific time frame; as one commentator described it, corpus linguistics is “Lexis on Steroids.” Corpus linguistics cannot alone determine a word’s meaning (the way a dictionary might), but it can provide empirical evidence to guide a judge choosing among multiple plausible or time-sensitive meanings.

In 2011, Justice Thomas Lee of the Utah Supreme Court was the first to use corpus linguistics in a judicial opinion: In re the Adoption of Baby E.Z.* Since then, the Utah Supreme Court has continued to use corpus linguistics, and in 2016 majority and dissenting opinions from the Michigan Supreme Court both embraced corpus linguistics in People v. Harris.

Now, corpus linguistics has reached the Sixth Circuit: Judge Amul Thapar relied on corpus linguistics in a concurrence—the first time (as far as we can tell) that a federal judicial opinion has done so. Continue Reading

Court Week(s): June’s Oral Arguments and one Supreme Court affirmance

By Lauren Kuley and Benjamin Beaton on Posted in Case Updates, News and Analysis, Supreme Court

If you’ve got the money, I’ve got the time (for an infringement action) — Willie Nelson made an appearance at the Sixth Circuit last month—but alas, only in the briefs. The court heard argument in Philpot v. L.M. Communications, involving a radio station website’s unauthorized use of a photo of the Red-Headed Stranger. The district court held that the infringement was not willful because no evidence showed that the station knew—actually or constructively—that Philpot had a copyright for the photo. So Philpot received $3,500, not the $150,000 plus attorney’s fees he could have received under 11 U.S.C. § 504(c)(2) if the infringement were willful. The panel (Batchelder, Griffin, Donald) is now poised to answer this question of first impression in the Sixth Circuit: whether actual knowledge is required for a finding of willful infringement. (The Second and Seventh Circuits have held it is not.)

The Times and the Buckeyes — The court also heard argument in a defamation case involving the New York Times and Dr. Carlo Croce—a “prolific” cancer researcher and professor at the Ohio State University. It all started when Croce agreed to an interview with Times writer James Glanz to discuss “the fascinating topic of microRNA.” It surely surprised Croce to later learn that his interview would become the basis for a front-page article that spanned fourteen pages and accused him and OSU of scientific misconduct and financially driven data falsification.

Croce sued the Times for defamation. The district court granted the paper’s summary judgment motion, however, concluding that the article was an “accurate and balanced report about Dr. Croce’s research.” Croce appealed, but a coalition of 41 media organizations filed an amicus brief supporting the Times.

At argument, Judge Nalbandian pressed the Times’ attorney about Ohio’s “innocent construction” rule and how the Times’ social media posts should be analyzed under it. Judge Deborah Cook asked Croce’s counsel to specifically identify the defamatory parts of the article. And Judge Karen Moore revealed very little. The case gives Judge Nalbandian his second chance just this year to address Ohio’s innocent-construction rule. His partial concurrence in Boulger v. Woods critiqued whether Ohio’s totality-of-the-circumstances test effectively distinguishes fact from opinion when a question is at issue (which, according to Nalbandian, is “like asking how tall an elephant weighs”).

SCOTUS affirms CA6: Tennessee liquor law unconstitutional — During the final week of the 2018–19 Term, the U.S. Supreme Court struck down a law that had prevented out-of-state retailers from setting up shop in Tennessee—affirming a Sixth Circuit decision from last February. Major retailer Total Wine and a mom-and-pop store challenged Tennessee’s two-year residency requirement, which they said amounted to protectionism. Judge Moore’s opinion held that this violated the “dormant” Commerce Clause. Justice Alito’s majority, for seven justices, agreed: Tennessee’s two-year residency requirement for retail license applicants was unconstitutional because it “blatantly favors the state’s residents and has little relationship to public health and safety.”

In line with the approach of Judge Sutton’s concurrence below, Justices Thomas and Gorsuch, in dissent, would have allowed Tennessee more room to regulate alcohol sales under the 21st Amendment. In addition to ending Prohibition and spawning punny bar names, the Amendment’s less celebrated second section prohibits (again?!) the “transportation or importation into any state … of intoxicating liquors, in violation of the laws thereof.” As Judge Sutton wrote, this provision “empowers States to regulate sales of alcohol within their borders.” In his view, and Justice Thomas’, this should have permitted some (though not all) of the Tennessee regulations at issue.

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