Sixth Circuit Opinion Reversed in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc.

The Supreme Court on Tuesday issued an opinion in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc., which reversed the Sixth Circuit’s October 2020 decision finding that DaVita Inc. plausibly asserted a claim against an Ohio hospital’s health plan for unlawfully discriminating against patients with end-stage renal disease by offering low reimbursement rates for outpatient kidney dialysis.  Specifically, the Sixth Circuit majority found that the health plan violated the Medicare Secondary Payer Act’s anti-discrimination provision—which prohibits a health plan from differentiating its benefits based on whether an individual has end-stage renal disease—by offering lower reimbursement rates for services offered by dialysis providers.   See DaVita, Inc. v. Marietta Mem’l Hosp. Emple. Health Ben. Plan, 978 F.3d 326 (6th Cir. 2020).  The Sixth Circuit, over Judge Murphy’s dissent, concluded that the anti-discrimination provision authorized “disparate-impact” liability, and that the limited payments for dialysis treatment had a disparate impact on individuals with end-stage renal disease.  See id. at 349. 

In a succinct seven page opinion written by Justice Kavanaugh on behalf of a 7-2 majority, the Supreme Court reversed.  Justice Kavanaugh, borrowing language from Judge Murphy’s dissent, rejected the Sixth Circuit majority’s “disparate-impact” theory because the text of the Act’s anti-discrimination provision “does not ask about ‘the effects of non-differentiating plan terms that treat all individuals equally.’” Op. at 5 (quoting 978 F. 3d at 363 (opinion of Murphy, J.)).   And the text of the plan, according to the opinion, did not “differentiate in the benefits provided to individuals with and without end-stage renal disease,” because it provided the same benefits, “including the same outpatient dialysis benefits, to individuals with and without end-stage renal disease.”  Id. at 4.  In addition to being “atextual,” the Court also found that a disparate-impact theory “would be all but impossible to fairly implement.” Id. at 5.  According to the opinion, “Courts would be entirely at sea in trying to determine an appropriate benchmark or comparator for outpatient dialysis.” Id. at 6. 

Justice Kagan, joined by Justice Sotomayor, dissented.  The dissent agreed with the Justice Kavanaugh’s opinion on disparate impact, but would have instead found outpatient dialysis to be a “proxy” for end-stage renal disease, because nearly all patients with end-stage renal disease, and hardly anyone else, undergo outpatient dialysis.  Dissent at 1–2.  The majority opinion, according to the dissent, “flies in the face of both common sense and the statutory text.”  Id. at 2.

Reception of the opinion is, naturally, split, with Law360 reporting that counsel for the health plan is “very pleased that the Supreme Court reads the Medicare Secondary Payment Act the way that it is written,” and the CEO of DaVita criticizing the Court’s “narrow interpretation of the” Medicare Second Payer Act and limiting the Act’s ability “to protect some of the most vulnerable patients in the healthcare system.” 

With Shoop v. Twyford, also decided Tuesday, the Court has issued opinions on each of the ten cert. petitions granted from the Sixth Circuit this term. 

The Corpus Linguistics Bug: New Cases in the Sixth, Fourth Circuits.

In a previous post, we discussed corpus linguistics, an emerging tool in statutory and constitutional interpretation.  It appears that the corpus linguistics bug is spreading, both in this Circuit and to other circuits as well.  Two recent cases serve as a reminder that the Sixth Circuit is both a thought leader in analyzing and utilizing this new variant of legal analysis and is an increasingly powerful vector of transmission. 

Consider Fulkerson v. UNUM Life Ins. Co. of Am., a Sixth Circuit opinion handed down a week ago.  No. 21-3367, 2022 U.S. App. LEXIS 15363 (6th Cir. June 3, 2022).  In Fulkerson, a panel consisting of Chief Judge Sutton and Judges Siler and Readler weighed whether reckless driving was a “crime” pursuant to the crime exclusion of an insurance policy.  Id. at *4.  Judge Readler penned the opinion.   He concluded that reckless driving was a crime for the purposes of the insurance policy by looking to dictionaries and “the tapestry of state laws” regulating the conduct in question.  Id. at *5-8.  Following a belt and suspenders approach, Judge Readler also used corpus linguistics, “a helpful tool in assessing common usage” to support his conclusion that “[t]he contemporary common usage of the term ‘reckless driving’” “fits within the ordinary meaning of ‘crime.’”  Id. at *8.  As Judge Readler noted, “[a]lthough more commonly used in the constitutional and statutory interpretive settings, these resources seemingly have the same force in many contractual settings as well.  Id. at *9 (citing Stephen C. Mouritsen, Contract Interpretation with Corpus Linguistics, 94 Wash. L. Rev. 1337, 1341 (2019)).  Judge Readler then laid out the results of his analysis of the Corpus of Contemporary American English for the term “reckless driving” during the relevant time period.  Id. at *10-13.  “Tellingly, a vast majority recount instances in which some manner of prosecution occurred, where the individuals either were ‘charged,’ ‘convicted,’ and/or ‘sentenced for reckless driving” and others “explicitly refer[ed] to ‘reckless driving’ as a crime[.]”  Id.  

A few key takeaways: 

  • Judge Readler’s analysis is consistent with our point in our last post: “corpus linguistics is not a silver bullet.”  And, as Judge Thapar noted, “corpus linguistics is one tool . . . but not the whole toolbox.”  Wilson v. Safelite Grp., Inc., 930 F.3d 429, 441 (6th Cir. 2019) (Thapar, J., concurring).  If invoked, it will likely be used as evidence that supplements other more common interpretative modalities.
  • The makeup of this panel also shows the increased appetite for, or at least lack of aversion to, corpus linguistics analyses in this Circuit.  Previously, Judges Thapar, Readler, and Griffin wrote or joined opinions relying, in part, on corpus linguistics.  See United States v. Woodson, 960 F.3d 852, 855 (6th Cir. 2020) (6th Cir. 2020) (Judges Griffin and Thapar joining an opinion in which Judge Readler invoked corpus linguistics); Wilson v. Safelite Grp., Inc., 930 F.3d at 438 (Thapar, J., concurring) (invoking corpus linguistics in statutory analysis).  We can now add Chief Judge Sutton and Judge Siler to this list.  As a reminder, Judge Stranch penned a lengthy concurrence to her own opinion in Wilson v. Safelight expressing her concerns with using corpus linguistics.  Id. at 445-48 (Stranch, J., concurring).
  • Before Fulkerson, corpus linguistics was typically used in the constitutional and statutory contexts.  From what we can tell, this is the first time any federal court has applied corpus linguistics to a private contract. Corpus linguistics has officially entered the contracts arena, making understanding this tool all the more imperative for all lawyers. 

Next, consider United States v. Rice, a Fourth Circuit opinion handed down yesterday.  No. 19-4489, 2022 U.S. App. LEXIS 15886 (4th Cir. June 9, 2022).  The Fourth Circuit was “asked to decide if the North Carolina crime of assault inflicting physical injury by strangulation is a ‘crime of violence’” for the purposes of sentencing enhancement under the U.S. sentencing guidelines.  Id. at *1-3.  We will not go into this case too deeply, but do note that they concluded strangulation was a crime of violence.  It is notable, however, that Judge Quattlebaum, writing for the majority,  cited to Judge Thapar’s concurring opinion in Wilson v. Safelight for the proposition that, “[a]lthough relatively new, corpus linguistics is gaining traction as an interpretive tool.”  Id. at *10.  Judge Thapar’s jurisprudence and this Circuit’s continued use of corpus linguistics in tough cases will likely push other circuits to consider conducting corpus linguistics analyses as well.  Moreover, this is the first instance that a corpus linguistics analysis was featured in a Fourth Circuit opinion, albeit in a footnote, to supplement the court’s analysis. 

The corpus linguistics bug is spreading in our own Circuit and spreading to others.  We recommend you read up on this tool of statutory, constitutional, and now contractual interpretation and will keep you updated on any interesting new developments.

Rachel Bloomekatz Nominated to the Sixth Circuit

Today, President Biden nominated Columbus, Ohio appellate litigator Rachel Bloomekatz to the Sixth Circuit as part of his eighteenth round of judicial nominees, which would fill the seat vacated by Judge R. Guy Cole Jr.  Judge Cole announced in December his intention to take senior status. 

Rachel Bloomekatz is currently a solo practitioner at Bloomekatz Law, LLC, a law firm that she founded in 2019 in Columbus, Ohio.  She specializes in public interest work and has represented nonprofit organizations including Everytown for Gun Safety, the Public Health Law Center, the American Heart Association, and the Ohio Conference of the NAACP.   She also served as state counsel for Biden’s 2020 campaign in Ohio.  Prior to opening her own firm, Bloomekatz was a principal at Gupta Wessler PLLC and an associate at Jones Day, LLC.   She also clerked for Chief Justice Margaret Marshall on the Massachusetts Supreme Judicial Court, served as an Assistant Attorney General in Boston, Massachusetts, and clerked for Justice Stephen Breyer on the United States Supreme Court.  She received her J.D. from UCLA School of Law and her A.B., magna cum laude, from Harvard University. 

Bloomekatz is President Biden’s third nomination to the Sixth Circuit, with U.S. District Judge Stephanie Dawkins Davis having been confirmed by the Senate yesterday, and Memphis litigator Andre Mathis awaiting a Senate vote after clearing the Senate Judiciary Committee in February.  

Corpus Linguistics in the Sixth Circuit and Beyond

Corpus linguistics has been in the news lately, which gives us a chance to discuss this interesting tool of statutory interpretation and, in the process, revisit some Sixth Circuit views about it.

What is corpus linguistics?  We will let Circuit Judge Amul Thapar explain:

[Corpus linguistics] draws on the common knowledge of the lay person by showing us the ordinary uses of words in our common language. How does it work? Corpus linguistics allows lawyers to use a searchable database to find specific examples of how a word was used at any given time. . . These databases, available mostly online, contain millions of examples of everyday word usage (taken from spoken words, works of fiction, magazines, newspapers, and academic works). . . Lawyers can search these databases for the ordinary meaning of statutory language . . . The corresponding search results will yield a broader and more empirically-based understanding of the ordinary meaning of a word or phrase by giving us different situations in which the word or phrase was used across a wide variety of common usages. . . In short, corpus linguistics is a powerful tool for discerning how the public would have understood a statute’s text at the time it was enacted.

Wilson v. Safelite Grp., Inc., 930 F.3d 429, 440 (6th Cir. 2019) (Thapar, J., concurring) (internal citations omitted).

Corpus linguistics is a tool used to identify the original public meaning of words – no small thing when the outcome of a case often hinges on the meaning of a single word in a statute or the Constitution.  And, if you fail to address corpus linguistics in your brief, you may receive a letter from the court requesting you to submit supplemental briefing correcting the omission.

Consider what happened a few days ago in the highly anticipated Ninth Circuit case of Jones v. Bonta, which involved the Second Amendment.  Judges Nelson, Lee, and Stein “asked the parties to file supplemental briefing addressing in part the applicability of corpus linguistics to [the] case.”  No. 20-56174, 2022 U.S. App. LEXIS 12657, at *16 n.6 (9th Cir. May 11, 2022).  Similarly, a Sixth Circuit panel of judges consisting of Judges Thapar and Siler and Eastern District of Kentucky Judge Hood “asked the parties to file supplemental briefs on the original meaning of Article III’s case-or-controversy requirement, specifically whether the corpus of Founding-era American English helped illuminate that meaning.”  Wright v. Spaulding, 939 F.3d 695, 700 n.1 (6th Cir. 2019).  In neither Jones v. Bonta nor Wright v. Spaulding did corpus linguistics control the outcome of the case.  But they do show the appetite among judges for bringing new tools to bear when discerning the original public meaning of the Constitution or other statutory text.

Regardless of prior briefing, judges at the district or circuit level may use corpus linguistics to rule for or against you.  Two cases illustrate the point.  See United States v. Woodson, 960 F.3d 852 (6th Cir. 2020); Health Freedom Def. Fund, Inc. v. Biden, No. 8:21-cv-1693-KKM-AEP (M.D. Fla. Apr. 18, 2022).  These examples underscore corpus linguistics’ utility in ascertaining the meaning of statutes.

In Woodson, the defendant and his accomplices robbed over a dozen diamond stores across multiple states.  At sentencing, the district court determined that the defendant’s sentence should be enhanced because the defendant “relocated, or participated in relocating, a fraudulent scheme to another jurisdiction to evade law enforcement or regulatory officials.”

Judge Readler, writing for the majority, helpfully broke down the statute into four elements that trigger the enhancement:  “(1) relocation or participation in relocation, (2) of a fraudulent scheme, (3) to another jurisdiction, (4) to evade law enforcement or regulatory officials.”  In dispute were the district court’s reading of the first two elements.  The defendant argued that because the scheme’s “home base” or “hub” remained Toledo, Ohio throughout the robberies, he never relocated the scheme.  The district court ruled otherwise, holding that the defendant “had purposefully targeted stores” across multiple states “to impede communication between law enforcement, triggering the relocation enhancement.”

The panel disagreed with Woodson’s interpretation of “a scheme” as something tangible, such as a “hub.”  Judge Readler, referencing numerous dictionaries, instead found that a scheme is something intangible such as a plot or plan.  Thus, the district court was correct that purposefully targeting diamond stores in multiple states was sufficient to satisfy the first two elements.  Not stopping there, Judge Readler conducted a corpus linguistics analysis of the term “scheme”, and found the analysis was in agreement with the dictionaries cited.  Corpus linguistics extinguished any doubt.

In Health Freedom Def. Fund, Inc., Middle District of Florida Judge Kathryn Kimball Mizelle used corpus linguistics to fortify her opinion in one of the most publicized cases so far this year.  The Health Freedom Defense Fund challenged the CDC’s imposition of a mask mandate on all air travel in the U.S. pursuant to the Public Health Services Act of 1944 (“PHSA”).

The PHSA authorized the CDC to “make and enforce such regulations” necessary to “prevent the introduction, transmission, or spread of disease” through “fumigation, disinfection, sanitation” and other actions.  The U.S. argued that the airline mask mandate was a sanitation measure.  Judge Mizelle found that, at the time of the passage of the PHSA, sanitation had one of two meanings: 1) “measures that clean something or that remove filth” or 2) “measures that keep something clean”.  If sanitation was given the former meaning, the mandate failed because masks do not actively clean anything.  If given the latter, the mask mandate should be upheld because masks keep the air clean from COVID-19.

Judge Mizelle relied upon “all the traditional tools of statutory interpretation” to settle the question.  First she looked to context.  “Sanitation” was accompanied by active (not preventative) words such as fumigation and disinfection.  This favored the first meaning.  The structure and history of the statute were also in harmony with the first definition.

Moreover, by using corpus linguistics, Judge Mizelle determined that “customary usage at the time agree[d]” with her findings.  She searched uses of “sanitation” in the relevant corpus during the relevant time period and found that the most frequent use of sanitation was in the context of “a positive act to make a thing or place clean” whereas only five percent was “of sanitation as a measure to maintain a status of cleanliness, or as a barrier to keep something clean.”  As such, Judge Mizelle concluded that “sanitation” carried the first meaning and the mask mandate was unauthorized.

Corpus linguistics is not a silver bullet.  As Judge Thapar noted, “corpus linguistics is one tool—new to lawyers and continuing to develop—but not the whole toolbox. Its foremost value may come in those difficult cases where statutes split and dictionaries diverge.”  Wilson v. Safelite Grp., Inc., 930 F.3d 429, 440 (6th Cir. 2019);  see also id. at 445-48 (Judge Stranch, concurring in her own opinion to respond to Judge Thapar’s “endorsement of ‘corpus linguistics’” and noting in particular: practical issues of privileging newsworthy connotations of a term” over “the ordinary meaning,” the difficulty of culling “irrelevant results,” and concerns with courts conducting such statistical analyses).

Yet corpus linguistics is likely something litigators should familiarize themselves with when construing the meaning of a statute or constitutional provision.  You may be asked to brief judges on the matter.  And it might end up being the tool that persuades the court to accept an interpretation of a statute or the Constitution in your client’s favor.

Sixth Circuit Dissolves Nationwide Injunction of Immigration Guidance

The Sixth Circuit issued a very interesting decision three days ago in Arizona v. Biden (22-3272).  The origins of the dispute go back to last fall when the Secretary of Homeland Security issued “Guidelines for the Enforcement of Civil Immigration Law.”  The Guidance notes the Department lacks the resources to apprehend and remove the roughly 11 million removable noncitizens in the country.  As for removal of noncitizens who are already in state custody, the Guidance prioritizes the removal of those individuals who threaten national security, public safety, and border security.  Eleven days before the Guidance took effect, three States — Ohio, Arizona, and Montana — filed suit against the United States, the Department of Homeland Security, and various officials (collectively, “the Department”).  In the States’ view, the Guidance impermissibly deprioritized the removal of noncitizens who fall into other categories that Congress still wants removed, including noncitizens who commit drug crimes and crimes of moral turpitude.  The States requested a preliminary injunction to prevent the Department from implementing the Guidance.  The States claimed the Guidance violates the Administrative Procedure Act because it is contrary to law, arbitrary or capricious, and should have been subject to notice and comment.  After the District Court granted the States a “nationwide preliminary injunction,” the Department sought emergency relief in the Sixth Circuit.

The Sixth Circuit heard oral argument in the case on April 7, 2022, and just five days later the Court issued a decision staying the District Court’s injunction.  Chief Judge Sutton wrote the opinion for the Court, which Judge Moore and Judge Cole joined.  Judge Sutton also took the unusual step of writing a concurring opinion in addition to his majority opinion addressing the issue of nationwide injunctions.

The Court’s majority opinion tackled both justiciability and the merits of the States’ challenge.  On both fronts, the Court thought the feds were likely to succeed in their appeal of the District Court’s injunction.  On constitutional standing, the Court deemed the States’ asserted injuries too speculative.  The Court noted the Guidance does not directly injure the States.  Indeed, the Court thought the Guidance could possibly decrease burdens on the States.  The States also had a causation problem.  The Court reasoned most of the fall in immigration enforcement is attributable to prosecutorial discretion at the front end when immigration agents and law enforcement decide whom to arrest and whom not to — not the back end when detention and removal decisions are made.  The States also argued that Massachusetts v. EPA, 549 U.S 497 (2007) relaxed the Constitution’s standing requirements for States — to no avail.  While the Court acknowledged that the States had “more theories of injury available to them” under Massachusetts v. EPA, that did not “allow them to bypass proof of injury in particular or Article III in general.”

The Court also doubted the reviewability of the Department’s Guidance under the APA.  It was not clear that the Guidance constituted an action “by which rights or obligations have been determined, or from which legal consequences will flow.”  An important clue in that regard was the conditional language of the Guidance, which preserves much official discretion.

The States’ challenge fared no better on the merits.  The Court shot down each statutory basis the States cited in support of their claims.  The States argued that while federal law “requires” the Department “to arrest and remove certain aliens,” the Guidance lets immigration officers do so only after they “determine that arrest or removal is justified by a set of extra-statutory factors.”   But the Court thought it unlikely that such mandatory language displaced the Department’s longstanding discretion in enforcing “the many moving parts of the nation’s immigration laws.”  The States’ arguments based on arbitrary-or-capricious review and notice-and-comment largely met the same fate.  At day’s end, whether because of justiciability or merits defects, the Court concluded the Department was entitled to a stay.

Especially interesting was Chief Judge Sutton’s separate concurrence on the issue of nationwide injunctions.  Judge Sutton added his voice to a growing chorus of detractors who have expressed concern over such injunctions in recent years.  According to Judge Sutton, nationwide injunctions “seem to take the judicial power beyond its traditionally understood uses, permitting district courts to order the government to act or refrain from acting toward nonparties in the case.” In the process, Judge Sutton reasons, they encroach on the rules governing class actions, and they create practical problems by incentivizing forum shopping and short-circuiting judicial decisionmaking.  Agree or disagree with him, Judge Sutton’s concurrence is well worth a read.  It is a helpful primer that canvasses the leading critiques of this peculiar remedy while making its own unique contribution to the debate.

Supreme Court Lets Kentucky AG Intervene in Cameron v. EMW.  Now What?

Nearly two years ago, a panel of the Sixth Circuit declined to let the Kentucky Attorney General intervene in a Sixth Circuit case to defend a Kentucky law.  About a week ago, the Supreme Court reversed and remanded.  This post considers likely next steps.

The case began as a constitutional challenge to House Bill 454, which regulates an abortion procedure known as dilation and evacuation.  The Kentucky Legislature adopted HB 454 in April 2018, and a district court in Kentucky permanently enjoined the law’s enforcement the next year.  The State’s Health Secretary defended the law throughout the district court proceedings and continued to defend the law at the Sixth Circuit, which ultimately affirmed the district court in an opinion written by Judge Clay.  The late Judge Merritt joined Judge Clay’s opinion and Judge Bush dissented.  Meanwhile, the people of Kentucky elected Daniel Cameron, a Republican, to be their new Attorney General, and they elected Andrew Beshear (who Cameron replaced as AG), a Democrat, to be their new Governor.

Long story short, the new Health Secretary (appointed by the new Governor) decided not to petition for rehearing en banc or petition for a writ of certiorari.  That’s when Attorney General Cameron tried to intervene, which the new Health Secretary did not oppose, and tender a petition for re-hearing en banc within the 14-day deadline.  Cameron never got to file the brief.  The panel, over another dissent by Judge Bush, denied Cameron’s motion to intervene and dismissed his petition for re-hearing en banc.  Last week, the Supreme Court disagreed and held that the Sixth Circuit should have allowed Cameron to intervene, handing the relatively new Kentucky Solicitor General’s Office a win in its debut Supreme Court argument.

What happens next procedurally is a little unclear, and substantively, things are even murkier.  The Supreme Court’s mandate will issue twenty-five days after its decision.  That means the mandate will issue on March 28, 2022.  But will Cameron have to file another motion to intervene?  Or will he automatically be added as a party?  Will he have to file another petition for rehearing en banc (if he so desires)?  Or will the Sixth Circuit simply file the brief he tendered almost two years ago?  No Sixth Circuit rules speak directly to these mundane procedural questions, but it’s safe to assume the Sixth Circuit will answer them in due time.

A more important procedural question is:  which judge will replace Judge Merritt on the panel?  (We still miss Judge Merritt).  And here’s where procedure and substance begin to blend.  It’s not hard to imagine that a different judge will have a different view of the merits, which occurs in the perennially fraught context of abortion jurisprudence.  If that happens, the new panel might agree to reconsider the old panel’s decision before the Sixth Circuit even gets a chance to take the case en banc.

Moving more directly into substance, there’s also the question of how changes in the legal landscape affect any reconsideration of the case’s merits.  A lot has happened in the Supreme Court’s and the Sixth Circuit’s caselaw since the original Cameron panel issued its decision on the merits.  Since that time, the Supreme Court decided June Medical, invalidating an abortion law.  Chief Justice Roberts cast the deciding vote against the law in that case, while arguably creating a more-difficult standard for abortion plaintiffs going forward.  The Sixth Circuit, sitting en banc, then decided Preterm-Cleveland v. McCloud, where it upheld an Ohio abortion law and conclusively decided that Chief Justice Roberts’s June Medical concurrence controlled the analysis.  A few months later, the Sixth Circuit issued another en banc decision upholding an abortion law – this one from Tennessee.  And a few months after that, the Sixth Circuit announced it would rehear a case en banc about another Tennessee abortion law.  The en banc court recently stayed an injunction that the district court had granted against the law’s enforcement in that case.  Meanwhile, the country awaits a decision in Dobbs v. Jackson Women’s Health Org., which could be the case in which the Supreme Court overturns Roe v. Wade.  Given that last prospect, perhaps the most likely outcome for now is that Cameron is held pending Dobbs.  In any event, whatever Cameron’s ultimate fate, the Supreme Court’s decision last week means the case lives to see another day.

Potential Sea Change in Sixth Circuit’s Certification of FLSA Collective Actions

A Fair Labor Standards Act case is working its way through the Sixth Circuit and could have serious ramifications for FLSA plaintiffs in the Sixth Circuit.  In this post, we discuss the potential sea change that a decision in In re: A&L Home Care and Training Center, et al. could effect in the Sixth Circuit’s jurisprudence on certification of collective actions in the FLSA context.

Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987) set out the ubiquitous two-step process for certifying collective actions under the FLSA:  a conditional certification stage and a final certification stage.  It is this standard that Defendants recently asked a motions panel of the Sixth Circuit to consider in deciding whether to grant interlocutory review of the District Court’s decision.

Judge McFarland, sitting in the Southern District of Ohio, had the first bite at the apple.  In his thorough opinion, Judge McFarland provided a helpful explanation of how the bifurcated Lusardi process typically works. First, conditional certification “takes place at the beginning of discovery” and, in this stage, “plaintiffs need only make a modest factual showing that they are similarly situated to the proposed class of employees.” This standard is “fairly lenient and usually results in conditional certification of a representative class.”  Once a conditional class is certified, plaintiffs “may send opt-in notices to current and former employees who potentially satisfy the definition of the collective.”  In the second stage, after discovery concludes, courts examine the conditional class more closely and employ stricter standards beyond “simple allegations and affidavits to demonstrate similarity.”

Defendants asked Judge McFarland to join the Fifth Circuit in abandoning Lusardi. In Swales v. KLLM Transport Services, L.L.C. 985 F.3d 430 (5th Cir. 2021), Judge Willet applied a thoroughly textualist reading of the FLSA, noting that “‘certification,’ much less ‘conditional certification,’ appears nowhere in FLSA.”  According to Judge Willet, the FLSA commands district courts to (1) only allow “similarly situated” individuals to opt-in to collective litigations and (2) not signal approval on the merits in facilitating collective litigation.  In Judge Willet’s view, Lusardi flouts the plain text of the FLSA in modifying those two conditions.  Moreover, Judge Willet reasons, “similarly situated” is a rigorous standard.  Judge Willet faults Lusardi for construing “similarly situated” as a lenient standard at the conditional certification stage.

Judge McFarland declined Defendants request to abandon Lusardi.  As Judge McFarland noted, the Sixth Circuit, “it is true, does not appear to have expressly adopted Lusardi, although the Circuit has acknowledged that district courts use the bifurcated certification framework.” And, Judge McFarland continued, “the circuit has recognized that the evidentiary standard at the conditional stage is fairly lenient.” (quotation marks omitted). Because “this district routinely appl[ies] the two-step process in FLSA cases[,]” Judge McFarland concluded his hands were tied.  “[A]bsent contrary direction from the Sixth Circuit,” Judge McFarland agreed to “follow the two-step process.”

Critically, however, because “Defendants’ challenge of two-step certification raise[d] issues that merit[ed] the Sixth Circuit’s attention,”  Judge McFarland certified the case for “immediate review under 28 U.S.C. 1292(b).”  1292(b) grants appellate courts discretion to hear an order certified for interlocutory appeal by the district court if three elements are met: “(1) the order involves a controlling question of law; (2) an immediate appeal may materially advance the ultimate conclusion of the litigation; and (3) a substantial difference of opinion exists regarding the correctness of the decision.”

In granting the interlocutory appeal, a Sixth Circuit motions panel (consisting of Chief Judge Sutton, Judge Griffin, and Judge Nalbandian) agreed with Judge McFarland “that the statutory factors support review of these issues,” and cited Judge McFarland’s analysis of Lusardi and Swales.  In so doing, the Sixth Circuit followed a familiar pattern of accepting interlocutory review of a decision that the district court certified as worthy of the Sixth Circuit’s immediate attention under 1292(b) (See here and here for posts where we have explored this practice in further depth).

The Sixth Circuit’s local rules do not say whether the judges on the motions panel will also serve on the merits panel.  But, in our experience, that is not the Sixth Circuit’s typical practice.  Generally, a merits panel consists of a different group of randomly selected judges.  In any event, whoever ultimately serves on the merits panel, it’s fair to say that Lusardi’s viability in the Sixth Circuit is in limbo pending a decision on the merits.

If the merits panel finds Judge Willet’s opinion persuasive, then plaintiffs will have to satisfy a higher standard in establishing a collective and obtaining discovery under the FLSA.  And regardless of what the Sixth Circuit decides, there seems significant potential here for a successful cert petition down the road.  As always, we will update you on any developments.

Sixth Circuit Declines to Enjoin HHS’s Title X Abortion Referral Rule

On February 8, the Sixth Circuit issued an unsigned order declining to enjoin (pending appeal) an HHS rule that does at least two notable things:  (1) the rule eliminates the prior Administration’s requirement “that grantees create strict physical and financial separation between their Title X programs and any abortion services they may provide” and (2) the rule requires “that grantees provide referrals to abortion services when requested by the patient.”  The panel consisted of Judges Boggs, Bush, and Larsen.

Ohio and eleven other States had sued under the APA, claiming the rule was “arbitrary, capricious, and contrary to law[,]” and sought a preliminary injunction.  Judge Black of the Southern District of Ohio found that the States did not meet their burden of establishing entitlement to a preliminary injunction. The panel agreed.

The panel opinion focused its analysis on the States’ burden of showing irreparable harm.  The States claimed they would be irreparably harmed in three ways: (1) increased competition for funds from other grantees who were unable to compete for grants under the previous rule; (2) reputational injuries because they would not be able to provide the same level of service of care; and (3) being forced to place their imprimatur on abortion by making referrals to abortion providers.

The panel found that the first two alleged harms were speculative. There was no way to conclusively determine if the States would receive less money in the next round of funding. Moreover, it was unclear what impact, if any, the rule would have on the States’ quality of services.  Finally, the third alleged harm was “neither certain nor immediate.”  The panel declined to reach a conclusion on whether federal conscience statutes mitigated this harm.  Instead, the panel noted that, at the time of argument, “all state programs that apparently desire[d] Title X funds for this year . . . ha[d] already applied.”  Notably, the panel did not reach the States’ likelihood of success on the merits or rule out a future injunction.

Judge Larsen, concurring in the judgement, wrote separately to underscore that “the States have not shown that granting them temporary relief will cure their alleged harm.”  According to Judge Larsen, it was unclear whether competitors who had previously declined to apply for Title X grants before the rule would rescind their funding applications under the new rule if the rule was enjoined.  Without knowing who the States’ competitors were and how they would react to an injunction, there was no way to know whether an “injunction would cause the decrease in grant competition that the States desire.”

The panel’s decision follows on the heels of the en-banc court’s decision earlier this month to stay an injunction granted to abortion providers in Memphis Center for Reproductive Health.  Notably, Judges Bush and Larsen (who sat on the en banc court) did not join Judge Moore’s dissent from that decision, and thus presumably voted with the majority.

The divergent outcomes of the two decisions is a reminder that the judges of the Sixth Circuit approach each case on its own merits, regardless of whether it arises in the hot-button abortion context.

Opioid Update: Court denies pharmacies’ motion for certification of an interlocutory appeal

Earlier this week in the Opioid MDL, Judge Polster denied the defendant pharmacies’ motion for certification of an interlocutory appeal.  The defendants asked him to certify three issues for appeal:  (1) whether the Ohio Product Liability Act abrogated the public nuisance claim, (2) whether the Court properly handled a juror’s misconduct during the trial, and (3) whether the Controlled Substances Act imposes anti-diversion duties on corporate pharmacies.  Judge Polster’s opinion reasoned that he’d already addressed these issues, that the motion was untimely, and that an appeal would “unnecessarily extend the litigation because a final judgment is near.”  His principal concern was that an interlocutory appeal did not make sense when an appeal of the final judgment could be taken so soon.  The opinion also focuses on “redundancy” and “timing” issues.  Two of the issues had already been subject to a 28 U.S.C. § 1292(b) motion.  And the defendants argued that circumstances had changed based on discovery, but Judge Polster dismissed that by stating that discovery had ended years ago.

Though he discusses each of the statutory factors under § 1292(b), practical issues predominated Judge Polster’s opinion, an analysis that is becoming increasingly common in the Sixth Circuit.  Judge Polster focused on the third statutory factor, which requires that the interlocutory appeal materially advance the litigation.  He held that even if the public nuisance claim were abrogated, the other claims would still proceed; that reversing the juror-misconduct issue will still require a new trial; and that plaintiffs’ claims could proceed regardless of the Controlled Substances Act.  All of this is to say that Judge Polster believed that an immediate appeal would only extend, and not shorten, the litigation (which defendants at times appeared to admit in their briefing).

Litigants hoping to secure an interlocutory appeal should keep these practical considerations, including those not expressly included in the § 1292(b) requirements, top of mind when briefing these issues.  Without a § 1292(b) certification from the district court, litigants cannot file an appeal with the court of appeals, and so effective briefing before the district court is imperative.

Sixth Circuit Awards Attorney Fees to Multiple Qui Tam Relators

Last week, a panel of the Sixth Circuit unanimously greenlighted an award of attorney fees for multiple qui tam relators who had entered into a settlement agreement with the government and defendants under the False Claims Act.  Judge Moore authored the Court’s opinion.  She was joined by Judge Clay and Judge Gibbons.

The seven relators had alleged that Community Health Systems and its affiliated hospitals violated the Act in submitting fraudulent claims for medically unnecessary hospital admissions to Medicaid and Medicare.  The relators’ claims prompted a nationwide investigation by the government, which encouraged the relators “to work together on the cases and share any proceeds that might result.”  Heeding that advice, the relators engaged in a “collaborative effort” over multiple years that involved “bi-monthly calls with the Government.”  The government would later intervene in each of the cases, and, in exchange for a payment exceeding $97 million, the government and the seven relators agreed to dismiss with prejudice all their claims against Community Health.  After the settlement agreement was approved, the government awarded just one of the relators all of the relators’ share of the most valuable claims in the underlying litigation.  That relator had been the first to file a lawsuit involving such claims.  The remaining relators received their share of the award pursuant to the government-encouraged share agreement into which they had previously entered.

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