Opioid Update: “Negotiation Class” Under Review

On Friday, Nov. 8, a Sixth Circuit panel (Guy, Griffin, and Kethledge) granted interlocutory appeals of drug manufacturers and distributors embroiled in the Northern District of Ohio opioid MDL. The appeals, brought under Federal Rule of Civil Procedure 23(f), oppose the district court’s certification of the novel “Negotiation Class.” Under the proposed procedure, any class member can opt out, no defendant must negotiate with the class, and the underlying litigation will continue while negotiations theoretically continue.

The district court, mindful that the “Negotiation Class was a novel procedure,” justified it “based on the unique facts of the case and the likelihood it might facilitate a global settlement.”

But as we covered in September, many parties—defendants and 6 plaintiffs, plus 12 states and the US Chamber as amici—oppose the Negotiation Class. They complaint that it fails to provide notice of the settlement, or of the parties’ opt-out rights, “until the settlement is already reached.”

Under Rule 23(f), the court of appeals may “permit an appeal from the grant or denial of a motion for class certification.” And here the court did.  Josh Douglas, Thomas P. Lewis Professor of Law at the University of Kentucky, stated “it’s not surprising for the court to have allowed the appeal, as the issue is novel, impacts major litigation, and could prejudice the defendants without real recourse if an appeal were not permitted.”

Judge Polster’s innovative deployment of Rule 23 has attracted the attention of the plaintiffs’ bar, civil-procedure buffs, and class-action lawyers of all stripes. The Sixth Circuit will now have its chance to weigh in. Stay tuned.

Panel Rehearing Granted On TCPA Agency Principles

The Sixth Circuit has granted a rare panel rehearing in Lucas v. Telemarketer Calling from (407) 476-5680 & Other Tel. Nos., a case filed under the Telemarketing Consumer Protection Act.  Our sister SPB blog, TCPAWorld, one of the web’s leading sources for intelligence and lawyering on TCPA defense, has a detailed post here.  The panel reversed a dismissal in favor of defendants that sold services to telemarketers, and remanded for the district court to determine whether the service providers knew their clients were using their platforms to violate the TCPA.  As summarized at TCPAWorld:

An unusual rehearing twist and turnabout in TCPAWorld. The key, of course, is that the Sixth Circuit … recognized that platform providers might be liable beyond the mere auspices of agency and vicarious liability. Specifically, even in the absence of agency might a platform provider be liable merely because it “knowingly allowed its client(s) to use that platform for unlawful purposes[?]”

This is certainly a case worth watching for any company providing services to telemarketers.

Sixth Circuit certifies Pennsylvania security-screening comp question

Several suits by Amazon workers seeking pay for time spent in security screening have been consolidated in a multidistrict litigation in the Western District of Kentucky. In one of the putative state-law class actions, Pennsylvania-based workers argue that under the Pennsylvania Minimum Wage Act, Amazon owes them for the several minutes per shift they spend in screening.

The district court dismissed the claim, citing the Supreme Court’s decision in Integrity Staffing Solutions, Inc. v. Busk, which held that such “screening is a noncompensable postliminary activity under the Fair Labor Standards Act.”

But the workers—in the fourth appeal (so far) to reach the Sixth Circuit from this MDL—contend that Busk does not apply to the PMWA. On Monday, a Sixth Circuit panel (Griffin writing; Merritt and Daughtrey joining) granted their motion to certify this question to Pennsylvania’s highest court.

Judge Griffin’s opinion reminded the bar that certification is a discretionary determination that is “most appropriate when the question is new and state law is unsettled.” Interestingly, the Sixth Circuit previously declined to certify a similar question to the Kentucky Supreme Court, but distinguished that decision on the ground (among others) that Kentucky law was “in-circuit” and therefore more familiar. Less familiar and more “distant” Pennsylvania law militated in favor of certification. Apparently, it was a prime day for judicial federalism.

In addition to the question whether screening time is compensable under the PMWA, the Pennsylvania Supreme Court also faces a second certified question: whether time spent in screening is a “split-second absurdit[y]” that should be disregarded as de minimis.

Opioid Update: Bellwether Settlement on Eve of Trial

On the eve of trial Monday morning, plaintiffs Summit and Cuyahoga Counties struck a deal worth $260 million. This avoided the first bellwether trial in the opioid multidistrict litigation before Judge Polster. The settlement extinguishes the counties’ claims against AmerisourceBergen, Teva, Cardinal Health, and McKesson. Walgreen’s did not settle, but its trial is pushed off for now.

Also on Monday, the AGs of Tennessee, North Carolina, Pennsylvania, and Texas announced discussions with a similar defendant group regarding a potential eleven-figure global settlement.

Meanwhile, other AGs, like Dave Yost of Ohio, have not lost their taste for the fight. Yost cautions that the plaintiffs’ lawyers representing the counties will receive an unfair windfall in fees. The cap for attorneys representing Ohio are capped at *only* $50 million. No cap may apply to outside counsel for the local governments, however. Yost wrote in a letter to fellow attorneys general last week urging that “lawyers should be paid for their work, but the lawyers representing only a portion of the people of Ohio should not reap greater rewards than the lawyers who are representing all of the people.”

Although the bell has not yet rung on the main event in Cleveland (at least not this week), stay tuned for more opioid appellate news. We doubt the Sixth Circuit has heard the last of this massive MDL.

Opioid Update: Sixth Circuit Won’t Halt Bellwether Trial (and more)

Today the Sixth Circuit issued much-anticipated rulings rejecting bids by Ohio and the industry defendants to halt the upcoming opioid MDL bellwether trial. And as noted below, in other venues the opioid litigation has seen recent notable action from another key state plaintiff and Judge Polster.

Sixth Circuit denies “drastic and extraordinary” mandamus relief – The four-page order avoided ruling on Ohio’s meaty federalism argument that municipal litigation usurps its parens patriae authority to pursue claims for harms to its citizens’ health and welfare. Instead, it held Ohio failed to meet the demanding standard for mandamus relief.

Ohio only recently sought relief in the court of appeals (and didn’t seek to intervene in the MDL), the court noted, despite having notice of the impending trial since Judge Polster’s December 2018 ruling rejecting similar arguments made by the MDL defendants. The court was unpersuaded that limited intervention to assert these sovereignty rights would force Ohio to litigate in federal rather than state courts. Continue Reading

Reviewing the Sixth Circuit’s Performance at the Supreme Court, OT2018 — Part One

During October Term 2018 (“OT2018”), the Supreme Court reversed less than two out of every three cases – its lowest reversal rate in three years. The Sixth Circuit fared particularly well (4 affirmances, 3 reversals), joining the Eleventh and D.C. Circuits as the only circuits to post a winning record.  Notably, the Court did not affirm or reverse the Sixth Circuit along familiar ideological lines. The two most frequent votes for reversal, for example, were Justices Sotomayor and Gorsuch.

OT2018 was the Learned Sixth’s first term with more affirmances than reversals since SCOTUSBlog first published a “Circuit Scorecard” after OT2004. Over the previous fourteen terms, the Sixth Circuit had gone 16-68. Of course, reversal rates do not necessarily mean much. As Justice Jackson once said, “We are not final because we are infallible, but we are infallible only because we are final.”

The seven cases from the Sixth Circuit included two Social Security cases, two Armed Career Criminal Act (ACCA) cases, and a novel Twenty-First Amendment case. We’ll start with some of the good news—two of the Circuit’s four wins.

Continue Reading

Opioid Update: More Irons in the Fire

The Sixth Circuit activity continues to escalate as the MDL bellwether trial date approaches. In just the last week, since the Court of Appeals’ rare order requesting a response to Ohio’s mandamus petition, we’ve seen:

  • Judge Polster respondenergetically—to Ohio’s mandamus petition, one day sooner than the deadline provided in the Court of Appeal’s order;
  • Defendant manufacturers, retailers, and wholesalers file an interlocutory appeal of Judge Polster’s novel settlement-class certification order;
  • Many of the same defendants file their own (expedited) petition for mandamus based on Judge Polster’s denial of their recusal motion; and
  • J&J settle with the 2 bellwether plaintiffs (Cuyahoga and Summit Counties) for $20 million—meaning brand-name manufacturers are now absent from the trial. (The remaining bellwether defendants are the three national drug wholesalers, plus a retail pharmacy, generic manufacturer, and small Ohio distributor.)

Judge Polster’s response is worth pausing a beat, if only because trial judges so rarely get to overtly put on their advocate’s hat and respond directly to adversarial arguments. His 3-page letter offered three arguments that mandamus (always unusual) was “even more extraordinary in this instance”:

  1. “extreme” untimeliness relative to the Nov. 2017 complaint and Dec. 2018 standing ruling (with a nod, and a cleveland.com hyperlink, to different tacks taken by then-AG/now-Gov. Mike DeWine and then-Auditor/now-AG Dave Yost);
  2. a “faulty premise” of the AG’s positions that citizens’ interests, rather than “direct injuries suffered by the [counties] themselves,” was the basis for standing (emphasis in original!); and
  3. the primacy of state courts’ interpretation of state-law limits on municipal authority that the AG invokes—which, according to Judge Polster, should be vindicated in state rather than federal court.

With this many irons in the fire, we are sure to hear more soon from the Sixth Circuit. Stay tuned.

 

 

Sixth Circuit Eliminates Contractual Limitations Periods For Title VII Claims

Employers in the Sixth Circuit may want to review their employment contracts following a recent decision in which the court ruled that employers cannot contractually shorten the statutory limitations period for Title VII claims—except in the arbitration context.

In Logan v. MGM Grand Detroit Casino, Judge Bush (with Judges Boggs and Gibbons joining) explained that Title VII’s 300-day statute of limitations for discrimination claims is a substantive right granted by Congress that cannot be shortened by a pre-dispute employment contract.  The plaintiff’s contract contained a clause waiving Logan’s right to sue if she waited longer than 6 months following any discriminatory incident to file her claim.

In striking down that clause, the panel’s decision relied on Supreme Court precedent holding that “where statutes that create rights and remedies contain their own limitation periods, the limitation period should be treated as a substantive right.”  The opinion explained that Title VII contains its own statutory period of limitations similar to the Fair Labor Standards Act (FLSA), which the Sixth Circuit had previously held to be unwaivable.  Under longstanding Supreme Court precedent, such substantive employment rights cannot be contractually waived in advance.  The decision distinguished claims under ERISA or Section 1981 because those statutes rely on general limitations periods created by other statutes.

Importantly, the decision also notes that Morrison v. Circuit City Stores, Inc., 317 F.3d 646 (6th Cir. 2003) (en banc), crafted a different rule for arbitration claims:  a “one-year limitation period to bring a Title VII claim to arbitration is not unduly burdensome, and therefore such a provision is enforceable.”  The Logan court explained that Morrison’s rule has “little, if any, persuasive force” outside of the arbitration context because it was premised on concerns unique to the Federal Arbitration Act.

Opioid Update: Ohio Cities Now on Both Sides of Negotiation-Class Fight

Six Ohio cities represented by Tom Goldstein filed a petition at the Sixth Circuit Court of Appeals opposing Judge Polster’s certification of the negotiation class in the opioid MDL.

The cities’ petition urges the Sixth Circuit to immediately review the certification of the negotiation class now rather than on appeal—lest they risk wasting the time and money of the thousands of parties and tens of thousands of absent local governments.

According to the cities, the proposed negotiation class (and its five-part procedural structure) violates Rule 23 because the district court’s certifying a class for “purposes of settlement” fails to provide notice of the settlement—or of the parties’ opt-out rights—“until the settlement is already reached.”

Beyond that, they argue the negotiation class violates due process. “When a constitutional right is given away—like the individual’s right to litigate [his or her] own cause of action—that waiver is supposed to be knowing and voluntary. But class members here are being asked to tie themselves to the mast of the negotiation class without knowing whether the settlement will be for anything between millions and tens of billions of dollars.”

Coming on the heels of the Sixth Circuit’s order to the plaintiffs and Judge Polster to respond to the Ohio AG’s mandamus petition, this petition puts municipalities on both sides of the novel negotiation-class fight—and creates still another question for the Sixth Circuit to consider before the MDL bellwether trials are set to begin next month. Stay tuned.

Tenn. Billboard Act Violates First Amendment, Says Sixth Circuit

In a big win for noncommercial outdoor speakers and a loss for LBJ enthusiasts, the Sixth Circuit issued a major First Amendment decision striking down Tennessee’s Billboard Regulation and Control Act. Judge Batchelder’s unanimous opinion (Donald and Cole joining) in Thomas v. Bright held that the law’s on/off-premises distinction represents an unconstitutional content-based abridgment of speech that cannot survive strict scrutiny.

The Tennessee Billboard Act, enacted in 1972 to comply with the Federal Highway Beautification Act (and reap the road-building rewards of “cooperative federalism”), required all signage within 600 feet of a public roadway to be authorized under a Tennessee Department of Transportation permit. The Act provided an exception—common in billboard law—for “on-premises” signs, which allowed signage “advertising activities conducted on the property on which [the sign] is located” to be posted permit-free.

William Thomas owned a billboard on an otherwise vacant lot and posted a “GO USA!” sign on it in support of the 2012 U.S. Olympics Team. Tennessee denied Thomas a permit and ordered him to remove the sign: it could not qualify for the off-premises exception, because Gabby Douglas was presumably not springing doubles on that vacant Tennessee lot.

(Just in case you doubted the import of billboard law, a longtime hobby horse for the SixthCircuitAppellateBlog.com, this appeal drew a murderer’s row of elite appellate advocates: former Alito clerk Sarah Campbell from the Tennessee SG’s office, former Stevens clerk Lindsey Powell for DOJ, First Amendment expert Eugene Volokh of UCLA Law and The Volokh Conspiracy, former Assistant SG and #appellatetwitter maven Kannon Shanmugam, and leading legal intellectuals Ilya Shapiro of Cato and Robert Alt of the Buckeye Institute. The Learned Sixth did not lack for First Amendment firepower here.)

The Sixth Circuit agreed with Thomas that the billboard act is unconstitutional under the Supreme Court’s most recent sign decision in Reed v. Town of Gilbert. The panel ruled Tennessee’s law is intolerably underinclusive because it discriminates between on-premises and off-premises non-commercial messages on the basis of their content. The opinion’s hypo starkly illustrated the conundrum:

A crisis pregnancy center erects a sign on its premises that says: “Abortion is murder!” Such a sign would presumably qualify for the on-premises exception because the message is related to the activities, goods, and services at the center. But may the property owner next door, who provides no services related to abortion, erect a sign that says: “Keep your laws off of my body!”? Under the Billboard Act, no. Two identically situated signs about the same ideological topic – one sign/speaker/message is allowed; the other is not.

By “favoring on-premises-related speech over speech on but unrelated to the premises,” the panel concluded, “the Billboard Act has the effect of disadvantaging the category of non-commercial speech that is probably the most highly protected: the expression of ideas.” Because the Billboard Act is “hopelessly underinclusive” and “not narrowly tailored to further a compelling interest,” the court deemed the Act an unconstitutional restriction on non-commercial speech.

This is a string that commercial-speech lawyers had been tugging on for some time. How much local, state, and federal billboard law it unravels (and there is a lot of it) is a judicial line-drawing exercise worth watching.

The ball is in the state legislature’s court: the panel accepted the district court’s determination, not challenged on appeal, that the on-premises exception was not severable from the rest of the Act. With the fall of the exception, so goes the Act. That is, of course, unless the Sixth Circuit grants Tennessee’s petition for a rehearing en banc.

 

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