Sixth Circuit Blog

Supreme Court Hears Arguments in Three Sixth Circuit Cases

The Supreme Court began its November argument calendar on Monday, October 30, with three cases from the Sixth Circuit -- Osborn v. Haley, Case No. 05-593, and consolidated argument in Jones v. Bock, Case No. 05-7058, and Williams v. Overton, Case No. 05-7142.

With respect to the first argument, the Sixth Circuit had issued its opinion in Osborn v. Haley, 422 F.3d 359 (6th Cir. 2005), on September 8, 2005, in a case originally filed in the Western District of Kentucky.  A full description of the factual background of the case appears in an argument preview at Scotusblog from Friday, Oct. 27, here.  Ross Runkel's blog, LawMemo, has a post about Osborn here and a prior commentary about the case here.

As explained in greater detail in the cited posts, when a federal employee is sued in a civil action in state court, the Westfall Act, 28 U.S.C. 2679(d)(2), authorizes the Attorney General to remove the action to federal court, and to substitute the United States as the party defendant in place of the employee, by certifying that "the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose."  The petition for certiorari had presented the following two questions:

1.  Whether the Westfall Act authorizes the Attorney General to certify that the employee was acting within the scope of his office or employment at the time of the incident solely by denying that such incident occurred at all.

2.  Whether the Westfall Act forbids a district court to remand an action to state court upon concluding that the Attorney General's purported certification was not authorized by the Act.

In granting certiorari, the Supreme Court directed the parties to brief and argue the following additional question:

3.  Whether the court of appeals had jurisdiction to review the district court's remand order, notwithstanding 28 U.S.C. 1447(d).

Petitioner's merits brief can be found here and its reply brief here.  The Government's merits brief is here.  The merits brief of Respondents Gay Verdi and Land Between the Lakes Association is here.

Scotusblog has a recap of the argument here.  The Court's transcript of the argument appears here.

The second, 11:00 a.m. consolidated argument in Jones v. Bock and Williams v. Overton involved the scope of the exhaustion-of-remedies requirement under the Prison Litigation Reform Act.  A third Sixth Circuit case, Walton v. Bouchard, was joined with Williams at the Sixth Circuit and was also argued to the Supreme Court.  The Sixth Circuit affirmed the dismissal of each case for failing to satisfy the exhaustion requirement in three unreported opinions.  See Jones v. Bock, 135 Fed. App. 837 (6th Cir. 6-15-2005);  Williams v. Overton, 136 Fed. App. 859 (6th Cir. 6-22-2005);  Walton v. Bouchard, 136 Fed. App. 846 (6th Cir. 6-17-2005).

Questions Presented in Case No. 05-7058:

1.  Whether satisfaction of the PLRA' s exhaustion requirement is a prerequisite to a prisoner's federal civil rights suit such that the prisoner must allege in his complaint how he exhausted his administrative remedies (or attach proof of exhaustion to the complaint), or instead, whether non-exhaustion is an affirmative defense that must be pleaded and proven by the defense.

2.  Whether the PLRA prescribes a "total exhaustion" rule that requires a federal district court to dismiss a prisoner's federal civil rights complaint for failure to exhaust administrative remedies whenever there is a single unexhausted claim, despite the presence of other exhausted claims.

Questions Presented in Case No. 05-7142:

1.  Whether the PLRA requires a prisoner to name a particular defendant in his   or her administrative grievance in order to exhaust his or her administrative   remedies as to that defendant and to preserve his or her right to sue them.

2.  Whether the PLRA prescribes a "total exhaustion" rule that requires a federal   district court to dismiss a prisoner's federal civil rights complaint for failure to   exhaust administrative remedies whenever there is a single unexhausted   claim, despite the presence of other exhausted claims.

Scotusblog's preview of the argument appears here.  The parties' briefs may be found here. LawMemo's post on the cases is here.  The Court's transcript of the oral argument is located here.

New Ethics Rules May Restrict Lawyers' Blogs (Blawgs)

In a development that has many lawyers across the country wondering whether we are on the precipice of radical changes in multiple jurisdictions, New York has proposed new ethics rules which would place significant restrictions on lawyers' web logs (blogs or, more colloquially, blawgs), websites and e-mail communications.  The rule changes would require all electronic communications to carry the word "ADVERTISEMENT."  The definition of "advertisement" would also be revised to include "any public communication made by or on behalf of a lawyer or law firm about a lawyer or law firm, or about a lawyer's or law firm's services."  See Section 1200.1(k) of the New York Ethics Rules.

Specifically, Section 1200.6 of the New York Ethics Rules, corresponding to DR 2-101 of the Code of Professional Responsibility, adds subparagraph (h) which provides, in pertinent part, that "computer-accessed communications" shall be labeled "Attorney Advertising" on the first page.  In the case of electronic mail, the subject line must contain the notation "ATTORNEY ADVERTISING."  New Section 1200.1(m) defines "computer-accessed communication" to mean:

any advertisement or solicitation that is disseminated through the use of a computer or other electronic device, including, but not limited to, web sites or pages, search engines, electronic mail, banner advertisements, pop-up advertisements, chat rooms, list servers, instant messaging, domain names, or other internet presences, and any attachments or links related thereto.

In addition to the broad definition of "advertisement" set forth above, the new rules correspondingly expand the definition of "solicitation" to include:

any advertisement or other communication directed to or targeted at a specific recipient or group of recipients, including a prospective client, or a family member or legal representative of a prospective client, concerning the availability for professional employment of a lawyer or law firm.

Section 1200.1(l).  All of the new ethics rules proposed in New York may be found here.

In addition to blogs and e-mails, query whether the new rules would also apply to extranets and virtual private networks (VPNs) that many law firms maintain for their lawyers and clients?  Stay tuned for further developments and elucidation in this emerging area of ethics issues and requirements.

Election Law Case Scheduled for En Banc Hearing

On December 6, 2006, the Sixth Circuit sitting en banc will hear arguments in an important election law case debating the precedential value of the Supreme Court's controversial 5-4 decision in Bush v. Gore, 531 U.S. 98 (2000)(per curiam), that decided the 2000 presidential election.

White and black voters in Summit and Sandusky Counties (in northern Ohio) and in Hamilton and Montgomery Counties (in southern Ohio) brought suit in the Northern District of Ohio for declaratory and injunctive relief, alleging inter alia that (i) the use of unreliable voting equipment (including punch card ballots) in some Ohio counties but not in others violated certain voters' rights under the Equal Protection Clause of the Fourteenth Amendment, and (ii) the use of punch card voting systems in Hamilton, Montgomery and Summit Counties had a disparate impact on African-American voters in violation of Section 2 of the Voting Rights Act of 1965.

In Stewart v. Blackwell, 356 F. Supp.2d 791 (N.D. Ohio 2004), Judge Dowd found in favor of Defendants, Secretary of State (current candidate for Governor) Ken Blackwell and others, holding that (i) the use of punch card ballots in Hamilton, Montgomery and Summit Counties did not violate the Due Process Clause, the Equal Protection Clause or the Voting Rights Act, and (ii) the use of optical-scan technology to count votes in Sandusky County did not violate the equal protection rights of voters.

On April 21, 2006, a divided panel of the Sixth Circuit reversed, Stewart v. Blackwell, 444 F.3d 843 (6th Cir. 2006), with Judges Martin and Cole in the majority, holding that the selective use of unreliable punch card ballots in some Ohio counties violates the Equal Protection Clause under the holding of Bush v. Gore.  Judge Gilman dissented, relying on a law review article by noted election law scholar Professor Richard L. Hasen, Bush vs. Gore and the Future of Equal Protection Law in Elections, 29 FSU L. Rev. 377 (2001), to conclude that Bush v. Gore should not be applied as valid precedent.  The dissent applied the standard of Burdick v. Takushi, 504 U.S. 428 (1992), to find that there is no equal protection problem with the selective use of punch card voting procedures.  On July 21, 2006, the Court vacated the panel opinion and granted en banc review.

Professor Hasen's posts on his blog, Election Law, regarding the panel opinion are here and here.  His update when the Court granted rehearing en banc is here.  Howard Bashman has another comment on the panel opinion in his blog How Appealing located here.  Professor Dan Tokaji, co-counsel for the prevailing parties who made the oral argument to the panel, has this post at his Equal Vote blog.

Professor Hasen has stated that, if the Supreme Court were to take any Bush v. Gore-type cae in the near future, "it is likely to be Stewart v. Blackwell, if the en banc court reaches the same decision as the three-judge Sixth Circuit panel holding that the selective use of punch card ballots in only part of a jurisdiction violates equal protection under Bush v. Gore."

The en banc argument on December 6 will begin at 2:00 p.m. in Courtroom 403.

Supreme Court Grants Cert. in Cases Involving Circuit Splits Where Sixth Circuit is in the Majority

In its September 26 Orders granting certiorari in nine cases for decision this term, the Supreme Court has accepted for review two issues involving deep circuit splits in which the Sixth Circuit has been in the majority.

First, in Case No. 06-84, Safeco Insurance v. Burr, and Case No. 06-100, General Insurance v. Edo, the Court has granted cert. in two Fair Credit Reporting Act ("FCRA") cases from the Ninth Circuit.  A conflict exists between the 4th, 5th, 6th, 7th and 8th Circuits on the one hand, and the 3rd and 9th Circuits on the other, over the mens rea required for a "willful" violation of FCRA.

In Safeco, the 9th Circuit held a defendant can be found liable for a "willful" violation upon a finding of "reckless disregard" for FCRA's requirements, in conflict with the other circuits which require the defendant's actual knowledge that its conduct violates FCRA.  In General, the 9th Circuit held a defendant may be deemed to have acted recklessly, and thereby "willfully" under FCRA, if the company relied on "unreasonable," "implausible" or "untenable" interpretations of FCRA even if they derived from a legal opinion the company sought in good faith for the very purpose of ensuring compliance with the law.

The two questions presented are:

1.  Whether the Ninth Circuit's construction of "willfully" under section 1681n of FCRA impermissibly permits a finding of willfulness to be based upon nothing more than negligence, gross negligence, or a completely good-faith but incorrect interpretation of the law, and upon conduct that is objectively reasonable as a matter of law, rather than requiring proof of a defendant's knowledge that its conduct violated FCRA or, at a minimum, recklessness in its subjective form?

2.  Whether the Ninth Circuit improperly expanded section 1681n of FCRA by holding that an "adverse action" has occurred and notice is required thereunder, even when a consumer's credit information has had either no impact or favorable impact on the rates and terms of the insurance that would otherwise have been offered or provided?

Second, in Case No. 06-102, Sinochem International v. Malaysia International Shipping Corp., a divided panel of the 3rd Circuit held a district court must first conclusively determine it has personal jurisdiction over a defendant before it may dismiss the suit on forum non conveniens grounds.  The 3rd Circuit acknowledged that its holding was inconsistent with the interests of judicial economy, recognized that its decision deepened an already existing 2-4 split among the circuits, and invited the Supreme Court's review of the issue.

The question presented for review is:

Whether a district court must first conclusively establish jurisdiction before dismissing a suit on the ground of forum non conveniens?

None of these cases has yet been scheduled for argument, although it seems probable they will appear on the February or March argument calendar.

New Sixth Circuit Rules

The Sixth Circuit has voted to amend Sixth Circuit Rule 28(g), permitting the citation of unpublished opinions, to conform to the amended FRAP 32.1.  The Court notifies interested parties that they have until December 20, 2006 to comment on the proposed changes by mail or e-mail addressed to Hon. Leonard Green, Clerk of the Court.

Death Penalty Arguments Next Week

In a week with an exceptionally heavy oral argument calendar, four cases stand out for special attention by the Court:

1.  Monday afternoon, October 30, the Sixth Circuit will hear oral arguments on the appeal of a Kentucky inmate sentenced to death following his 1992 conviction on two counts of murder from the summary dismissal of his habeas corpus petition by Judge Reeves (E.D. Ky.) on Younger abstention grounds.  Bowling v. Haeberline, Case No. 03-5681, 2:00 p.m., Courtroom 636 (30 minutes per side).

2.  Tuesday afternoon, October 31, the Sixth Circuit will hear the appeal from the denial of habeas corpus by Judge Polster (N.D. Ohio) for an Ohio inmate sentenced to death following his 1987 three-judge conviction for aggravated murder.  Haliym v. Mitchell, Case No. 04-3207, 2:30 p.m., Courtroom 636 (30 minutes per side).

3.  Thursday afternoon, November 2, the Court will hear oral arguments in Bonnell v. Mitchell, Case No. 04-3301, 1:45 p.m., Courtroom 636 (30 minutes per side).  Petitioner, an Ohio inmate sentenced to death following his jury conviction for aggravated murder, appeals from the decision of Judge Katz (N.D. Ohio) denying his habeas corpus petition.

4.  Thursday afternoon, November 2, the Sixth Circuit hears argument in an appeal by a Tennessee inmate sentenced to death for first-degree murder whose request for habeas relief was denied by Judge McCalla (W.D. Tenn.) -- this case is on remand from the United States Supreme Court.  Cone v. Bell, Case No. 99-5279, 3:00 p.m., Courtroom 403 (30 minutes per side).

Sixth Circuit Stays Implementation of Judge Taylor's Order Permanently Enjoining NSA Warrantless Surveillance Program

We have previously posted on the August 17 opinion by Judge Anna Diggs Taylor (E.D. Mich.) declaring the NSA's domestic wiretap and surveillance program unconstitutional and in violation of FISA and Title III.  Her decision has been the subject of considerable criticism from political as well as legal circles.  The Government appealed Judge Taylor's ruling to the Sixth Circuit (Case No. 06-2095).

On October 4, a panel of the Court (Circuit Judges Batchelder, Gilman and Gibbons) issued an Order unanimously granting the Government's request for a stay of Judge Taylor's injunction pending the appeal.  Thus, the district court order enjoining the Government from conducting the NSA Terrorist Surveillance Program ("TSP") in any way that would contravene FISA and Title III, "including . . . conducting warrantless wiretaps of telephone and internet communications," was stayed pending the outcome of the Sixth Circuit's consideration of the merits.

While many commentators have suggested that the import of the Court's stay is that it supposedly presages the panel's intention to reverse Judge Taylor on the merits, the most intriguing aspect of the panel's Order is its use of the standard for stays pending appeal taken from Grutter v. Bollinger, 247 F.3d 631, 633 (6th Cir. 2001), and Michigan Coalition of Radioactive Material Users v. Griepentrog, 945 F.2d 150, 153 (6th Cir. 1991).

The Grutter/Michigan Coalition test allows a stay to be granted, even if the party requesting the stay has not demonstrated the traditional "substantial likelihood" of success on the merits, if it can show that the irreparable harm to it from the underlying order absent a stay would outweigh any potential harm to the nonmoving party if the stay were granted.  In this fashion, the greater the harm that is shown, the less likely a party's success on the merits has to be.  Thus, the degree of "success on the merits" that must be demonstrated is "inversely proportional to the harm."  If the harm to a moving party "decidedly outweighs" any potential harm to the nonmoving party if a stay is granted, then all the moving party must show at a minimum are "serious questions going to the merits" rather than a "substantial likelihood of success on the merits."

The panel found the more lenient Grutter/Michigan Coalition standard "has been met in this case."  That does not necessary signal the panel's conclusions on the merits beyond findng that the appeal raises serious questions regarding the merits.  It more probably reflects the panel's determination that the potential harm to the Government's efforts to fight terrorism from denying the stay and leaving the injunction against the TSP in force decidedly outweighs any harm to the plaintiffs or the public from granting the stay.  The panel's Order granting a stay pending appeal is not necessarily the broader prediction of the eventual outcome of the case that critics of Judge Taylor's opinion wish it were.

Supreme Court Denies Cert. in Sixth Circuit Case

On October 2, the Supreme Court denied certiorari in Case No. 06-38, Detroit Entertainment LLC v. Romanski.  A jury found that respondent had been arrested at a casino without probable cause and awarded her compensatory and punitive damages under 42 U.S.C. 1983.  The Sixth Circuit held, based on a provision of Michigan law, that the actions taken by the casino and one of its security guards constituted "state action" subjecting them to liability under section 1983.

The questions presented by the petition were:

1.  Has the Sixth Circuit fundamentally departed from this Court's state action jurisprudence, faithfully applied by other circuits, holding that private conduct that is contrary to state policy does not constitute "state action" for purposes of 42 U.S.C. 1983?

2.  Did the Sixth Circuit err in holding, contrary to decisions of other circuits and the Michigan Supreme Court, that an arrest by a private party constitutes state action?

Romanski is the only case from the Sixth Circuit on the Court's conference schedule thus far during the new 2006 term.

Neither Disgorgement Damages Nor Punitive Damages May be Aggregated to Satisfy Amount in Controversy Requirement

After having been away for two months due to a variety of factors (en banc argument in Sixth Circuit, Jewish high holy days, daughter's wedding), we are more than ready to climb back into the saddle with a review of important developments within or affecting the Sixth Circuit since the end of August.

The first concerns an important issue of federal diversity jurisdiction, both original and removal, currently relevant to multi-plaintiff and class-action cases where the damage claims do not exceed $5 million.  Federal courts may exercise diversity jurisdiction only where, among other things, the matter in controversy exceeds the sum of $75,000 exclusive of interest and costs.  See 28 U.S.C. 1332.  This requirement that the matter in controversy in a diversity case must exceed a specified amount, currently $75,000, is "[t]o ensure that diversity jurisdiction does not flood the federal courts with minor disputes."  Exxon Mobil Corp. v. Allapattah Services, 545 U.S. __, 125 S. Ct. 2611, 2617 (2005).  While a single plaintiff may aggregate the value of as many claims as she may have against the same defendant(s) in order to satisfy the amount-in-controversy requirement, even if the claims have nothing in common except the identity of the parties, the same is not true with respect to multiple plaintiffs.

For 175 years, since the Supreme Court's seminal decision in Oliver v. Alexander, 31 U.S. 143 (1832), multiple plaintiffs with separate and distinct claims have not been permitted to aggregate their respective "amounts in controversy" to satisfy the jurisdictional amount requirement.  Even in the class action context, the Court has allowed multiple plaintiffs to aggregate their compensatory damage claims only where they "unite to enforce a single title or right in which they have a common and undivided interest."  Snyder v. Harris, 394 U.S. 332, 335 (1969);  see also Zahn v. Int'l Paper Co., 414 U.S. 291, 294 (1973), superseded on other grounds by statute, Judicial Improvements Act of 1990, Pub. L. No. 101-650, 104 Stat. 5089, sec. 310.

Four telephone customers living in Ohio and Michigan brought a class action (prior to the enactment of the Class Action Fairness Act (CAFA), Pub. L. No. 109-2, 119 Stat. 4, 9 (2-18-05), codified at 28 U.S.C. 1332(d)(2)) against their respective wireless service providers alleging they falsely represented to customers that there would be no charge for phone calls which were unanswered or rang busy.  Seeking compensatory and punitive damages, injunctive relief, restitution and disgorgement for unjust enrichment, the plaintiff class sued in Ohio state court and the defendants removed the case to federal district court on diversity grounds.  The Northern District of Ohio denied the plaintiffs' remand motion based on its conclusion that the damages alleged by the disgorgement claim alone exceeded $75,000 in the aggregate.  The only remaining defendant, Dobson Cellular Systems, thereafter recovered summary judgment in its favor, and plaintiffs appealed the remand order to the Sixth Circuit, arguing that the district court never had valid diversity jurisdiction over the case.

In Everett v. Verizon Wireless, Inc., 2006 Fed. App. 0324p, 2006 U.S. App. LEXIS 21931 (6th Cir. 8-28-06), the Sixth Circuit held that the district court erred in aggregating plaintiff's disgorgement claims.  The Court rejected three of Dobson Cellular's arguments supporting aggregation and determined it need not decide the fourth:

1.  Understanding that it had to show plaintiffs had "unite[d] to enforce a single title or right in which they have a common and undivided interest," Dobson Cellular relied on the plaintiffs' unjust enrichment claim to argue that plaintiffs' request for disgorgement of its ill-gotten gains would mean the imposition of a constructive trust and the creation of a "common fund" in which all plaintiffs share an interest.  However, the Sixth Circuit ruled that the required "common and undivided interest" exists only when the defendant owes an obligation to the group of plaintiffs as a group and not to the individuals severally:

Aggregation is permitted "where there is not only a common fund from which the plaintiffs seek relief, but where the plaintiffs also have a joint interest in that fund, such that if plaintiffs' rights are not affected by the rights of co-plaintiffs then there can be no aggregation.  In other words, the obligation to the plaintiffs must be a joint one."

Everett, supra, at *12, quoting Eagle Star Ins. Co. v. Maltes, 313 F.2d 778, 781 (5th Cir. 1963) (emphasis supplied and citations omitted).  In other words, the "common fund" exception does not permit plaintiffs to aggregate their claims whenever they share a proprietary interest in the proceeds of litigation;  it permits them to aggregate claims only when they jointly own, or have an undivided interest in, the property at issue in the litigation.  "Plaintiffs suing to enforce a 'single title or right' must share their 'common and undivided interest' in vindicating that right before the litigation, not as a result of it."  Id. at *14, citing Gilman v. BHC Sec., 104 F.3d 1418, 1424, 1430 (2nd Cir. 1997).

2.  Dobson Cellular also argued that there was a "collective action" exception to the non-aggregation principle, on the supposed basis that the class as a whole had an undivided interest in the disgorgement claim because the class members brought it "in addition to" their compensatory damages claims.  The Sixth Circuit found this argument to be without merit for three reasons, including (i) the fact that, under Ohio law, unjust enrichment claims are in the alternative rather than in addition to plaintiffs' compensatory damages contract claims (citing Rice v. Wheeling Dollar Sav. & Trust Co., 155 Ohio St. 391, 396-97 (1951) and All Occasion Limousine v. HMP Events, 2004-Ohio-5116), and (ii) there is no logical reason why the nature of the disgorgement remedy alters the underlying rights plaintiffs are seeking to vindicate, and thus why the rule should be different in this circumstance.

3.  Consistent with extensive case law from many other circuits, the Court held that multiple plaintiffs likewise may not aggregate punitive damages to meet the amount-in-controversy requirement when they do not share a "joint or common interest or title" in the suit.

4.  Finally, the Court addressed the last theory offered by Dobson Cellular to support removal jurisdiction -- the monetary cost of complying with plaintiffs' request for injunctive relief was sufficient to satisfy the jurisdictional amount.  It is well-settled that the costs of complying with an injunction may establish the amount-in-controversy.  See Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977);  McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 181 (1936).  However, as the Sixth Circuit had previously remarked, "there is a circuit split as to whether a court may determine the amount in controversy from the perspective of either party (the 'either viewpoint rule') or whether a court may only consider the plaintiff's viewpoint."  Olden v. Lafarge Corp., 383 F.3d 495, 503 n.1 (6th Cir. 2004).  As in Olden, the Court determined that it need not decide the issue because Dobson Cellular had failed to show any evidence in the record demonstrating that the costs of complying with the requested injunctive relief would probably exceed $75,000.

For class action suits filed after February 18, 2005, CAFA raises the jurisdictional amount requirement to $5 million and specifically authorizes the aggregation of individual claims to meet the increased amount-in-controvery requirement.  See 28 U.S.C. 1332(d)(2), 1332(d)(6).  Thus, the decision in Everett v. Verizon Wireless supplies the rule of decision in non-class multi-plaintiff cases, and in those class actions not governed by the provisions of CAFA.

Thanks to Tom Theado for bringing this case to our attention.