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.

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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 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, 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.


Opioid Update: 6th Circuit Orders Mandamus Response from Judge Polster, Bellwether Counties

If anyone doubted the Sixth Circuit was paying close attention to the opioid MDL, that’s been put to rest.

Today, in a short order issued by Circuit Clerk Deborah S. Hunt, the Sixth Circuit requested a response to the Ohio AG’s mandamus petition, supported by many states and the U.S. Chamber, seeking to enjoin the upcoming bellwether trial. The Court ordered “that Cuyahoga and Summit Counties”–the plaintiffs in the bellwether trial–“file either joint or separate answers.” The order also ordered “that the MDL judge”–Judge Polster, whom several opioid defendants recently asked to recuse–“address this mandamus petition within 7 days.”

The order tracks Federal Rule of Appellate Procedure 21(b)(4), which gives courts of appeals the option of inviting or ordering “the trial court judge to address the petition” for mandamus. Suffice to say that appellate courts don’t issues these orders to trial courts every day.

Regardless of whether the court actually enjoins the trial–which would be a rare occurrence indeed–rest assured that the Sixth Circuit judges are carefully watching this MDL. Stay tuned.

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

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

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

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”

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.”