Sixth Circuit Court of Appeals

Five Stories That Matter in Michigan This Week – August 11, 2023

CRA Issues Bulletin, Recalling Vape Cartridges Due to Possible Presence of Banned Chemical

On July 21, 2023, the Cannabis Regulatory Agency (“CRA”), issued a public health safety bulletin, recalling more than 13,000 vape cartridges “due to the possible presence of banned chemical residue exceeding the established action limits.”

Why it Matters: Sky Labs, LLC, is the licensed marijuana processor who manufactured the three batches of vape cartridges that were recalled. Businesses operating in the cannabis market are required to adhere to strict rules and regulations laid out by the CRA. Failure to do so can result in steep fines, recalled product, and potential loss of license(s).

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Business Education Series – Setting Meaningful Goals and Time Blocking for Success

On August 22, 2023, gain valuable knowledge and skills to set meaningful goals, establish priorities, and effectively manage their time through the practice of time blocking.

Why it Matters: Participants will learn practical strategies and techniques to enhance their goal-setting abilities, develop a clear sense of direction, and optimize their productivity. Learn more.

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Michigan Supreme Court Alters Premises Liability Framework

Michigan courts have long held that premises owners generally have no duty to protect invitees from “open and obvious” hazards. In a recent decision (Kandil-Elsayed v F&E Oil, Inc and Pinsky v Kroger Co of Michigan), the Michigan Supreme Court held that whether a hazard is open and obvious is not an integral part of duty but is instead “relevant to breach and the parties’ comparative fault.” The Court overruled the special-aspects exception, holding that “when a land possessor should anticipate the harm that results from an open and obvious condition, despite its obviousness, the possessor is not relieved of the duty of reasonable care.”

Why it Matters: This decision significantly changes the legal standards in premises liability cases, particularly slip-and-fall cases.

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Fraser Trebilcock Attorney Thaddeus Morgan Obtains Summary Judgment for Firm Client; Sixth Circuit Affirms Dismissal

The U.S. Court of Appeals for the Sixth Circuit affirmed a decision by the U.S. District Court for the Western District of Michigan, which granted summary judgment for the firm’s client, who was represented by Fraser Trebilcock attorney Thaddeus Morgan.

Why it Matters: The U.S. Court of Appeals for the Sixth Circuit did not find either of the district court’s decisions erroneous, affirming the denial of the Plaintiff’s motion to amend and granting summary judgment to the defendants.

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Michigan Supreme Court Rules that New No-Fault Law Does Not Apply Retroactively

On July 31, 2023, the Michigan Supreme Court affirmed, in part, a court of appeals decision ruling that medical cost controls in Michigan’s new no-fault auto insurance law do not apply retroactively to car crash victims whose accidents occurred prior to the change in the law.

Why it Matters: As a result of the ruling, drivers who were catastrophically injured in accidents prior to the no-fault must be paid at full rates and not be subject to new cost controls for medical services.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Business & Tax | Ed Castellani
Insurance Law | Gary Rogers
Litigation | Thaddeus Morgan

Five Stories that Matter in Michigan This Week – November 11, 2022

Sixth Circuit Rules that Notice is Required to Terminate Contract for Successive Performances

Under Section 440.2309(2) of Michigan’s Uniform Commercial Code, a contract that “provides for successive performances but is indefinite in duration” may be terminated at any time (without cause). However, as a U.S. Court of Appeals for the Sixth Circuit decision points out, reasonable notice of such termination must be provided, unless the requirement of notice is waived via the contract.

Why it Matters: The court’s ruling in the case of Stackpole International Engineered Products v. Angstrom Automotive Group is a reminder for buyers and sellers, especially in the manufacturing industry, who enter into contracts that provide for successive performances to work with experienced legal counsel in the drafting, review and enforcement of commercial contracts in order to avoid contractual disputes and litigation.

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Michigan Election Results: Governor’s Race, State House and Senate

In the hotly contested governor’s race, Democrat Gretchen Whitmer defeated Republican challenger Tudor Dixon and will continue to serve as Michigan’s Governor for the next 4 years. And, both the State House and Senate flipped to Democratic control.

Why it Matters: This is the first time since 1984 that the Governor’s Office, State House and Senate are all controlled by Democrats. As officials look towards new leadership in certain areas, Fraser Trebilcock’s election law team will continue to monitor and report on any significant changes happening in Lansing.

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Municipalities Vote on Marijuana

While adult-use recreational marijuana passed the ballot in 2018, each individual municipality has the control to allow adult-use recreational marijuana businesses to operate in their community. This election cycle saw numerous municipalities vote on this issue.

Why it Matters: According to data provided by the CRA prior to the November election, less than 10% of all municipalities in the state had opted in for adult-use recreational marijuana businesses. Following election results showing that more municipalities are allowing for adult-use recreational businesses to operate in their town, the issues that have plagued current license owners arise again for officials to handle.

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Passed – Prop 1: Term Limits and Financial Requirements

Following the November 8, 2022 election results, Prop 1, which proposed changes to term limits for state legislators and required elected officials to disclose financial information, passed.

Why it Matters: As we covered in an earlier newsletter, this development will permit lawmakers to serve 12 years in Lansing, and all of that time can be spent in the House or Senate, or it could be divided between the two chambers. Additionally, elected officials would have to disclose their assets, income and liabilities, and their involvement in any businesses, nonprofits, labor organizations or educational institutions.

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Controversial Landlord-Tenant Rules Proposed by State Court Administrative Office

The State Court Administrative Office unveiled proposed changes to Michigan Court Rule 4.201, that if enacted, would alter the way eviction cases are handled for both landlords and tenants. Some of the proposed amendments are the ability for tenants to get an automatic stay if they have applied for rental aid, and a requirement that tenants be served in person if a landlord wants an immediate default judgement.

Why it Matters: If enacted, these rules would allow commercial and residential tenants more time to pay their landlords if they fall behind on payments. However, some are against the new proposed rules as they believe it would increase the difficulty for landlords to evict non-paying tenants, and make the process of finding new tenants more difficult.

Related Practice Groups and Professionals
Labor, Employment & Civil Rights | Aaron Davis
Election Law | Garett Koger
Cannabis Law | Sean Gallagher
Real Estate | Jared Roberts

Sixth Circuit Limits the Scope of Personal Jurisdiction in FLSA Litigation

On August 17, 2021, in Canaday vs. The Anthem Companies, Inc., the United States Court of Appeals for the Sixth Circuit became the first appellate court to hold that individuals with a connection to the forum state may only join a collective action under the Fair Labor Standards Act (FLSA). This ruling protects employers by limiting their liability and expense in litigating claims of nonresident opt-in employees who join an FLSA collective action. It also prevents an employee from engaging in forum shopping of federal courts for the most favorable outcomes.

What is the background of this case and the resulting analysis by the Sixth Circuit?

In this case, The Anthem Companies, with corporate offices in Indiana, employed nurses to review medical insurance claims to determine if claimant payments are authorized under a medical necessity. Nurses who were contracted from all across the country were paid a salary and classified as exempt. As a result, they weren’t entitled to overtime pay.

Laura Canaday, a nurse based in Tennessee, reviewed The Anthem Companies medical insurance claims. She argued that Anthem misclassified her as “exempt” and she was entitled to overtime pay under the FLSA. Canaday moved to certify a nationwide collective action claim of review nurses who worked in several different states. The Anthem Companies moved to dismiss the suit from all out-of-state nurses since they lacked personal jurisdiction. The District Court and the Sixth Circuit agreed.

In its reasoning, the SIxth Circuit relied on the Supreme Court decision in Bristol-Myers, 137 S.Ct. 1773 (2017). This case involved Bristol-Myers, a California-based company, and its manufacture of a blood thinner, Plavix. California residents and nonresidents alleged defects of Plavix and related injuries. The Court ruled that the nonresident plaintiffs did not claim a relationship with the forum state (California). These nonresident plaintiffs did not purchase Plavix in California or suffer any harm from the drug in the state. The Supreme Court ruled “that any similarity between the resident and nonresident plaintiffs’ claim offered an insufficient basis for exercising specific jurisdiction.”

The Sixth Circuit in Canaday relied on Bristol’s reasoning, stating: “Anthem did not employ the nonresident plaintiffs in Tennessee. Anthem did not pay the nonresidents in Tennessee. Nor did Anthem shortchange them overtime compensation in Tennessee. . . a court may not exercise specific personal jurisdiction over claims unrelated to the defendant’s conduct in the forum state.”

Canaday contended that she must only show that their claims arose out of Anthem’s contacts within the United States, not specifically Tennessee. The Sixth Circuit disagreed: “Many federal laws provide for nationwide service on defendants and personal jurisdiction over them in any federal district court in the country. . . The FLSA, however, does not offer nationwide service of process.”

The court disagreed with Canaday’s claim that as the named plaintiff she must comply with the Fourteenth Amendment, but the nonresident plaintiffs aren’t required to do the same.

“Whether a court has personal jurisdiction over a defendant depends on the defendant’s contacts with the state in which the plaintiff filed the lawsuit. Two types of personal jurisdiction exist for corporations. A court may assert ‘general’ … jurisdiction over a defendant in its home state, where the defendant is incorporated or headquartered. Or a court may exercise ‘specific’ … jurisdiction over a defendant if the plaintiff’s claims ‘arise out of or relate to’ the defendant’s forum state activities.”

The Anthem Companies, which is incorporated and headquartered in Indiana has no “at home” status in Tennessee.

How does this ruling impact employers?

The scope of litigation under FLSA—at least in states within the Sixth Circuit—is limited in terms of size and geography, and as a result employers will likely enjoy reduced expense and liabilities of “out of state” employees who lack personal jurisdiction where the company is headquartered. It prevents employees from forum shopping to provide the “ideal” federal court to hear their claims.

If you have any questions about this case, or questions about the FLSA more generally, please contact Aaron Davis or your Fraser Trebilcock attorney.

Aaron L. Davis is Shareholder and Chair of Fraser Trebilcock’s labor law practice. You can reach him at adavis@fraserlawfirm.com or (517) 377-0822.

Sixth Circuit Allows Professor to Move Forward with Lawsuit Alleging University’s Preferred-Pronoun Policy Violates his Constitutional Rights

In a recent case with important implications for higher education institutions, the U.S. Court of Appeals for the Sixth Circuit held that a university professor plausibly pled claims that his employer’s enforcement of its policy requiring employees to refer to students by their preferred pronouns violated his constitutional rights under the free speech and free exercise clauses of the First Amendment.

The case, Meriwether v. Hartop, involves plaintiff Meriwether, a professor at defendant Shawnee State University (a public university). Meriwether, a devout Christian, sought a compromise with the university that would involve him using students’ preferred pronouns while placing a disclaimer in his syllabus, “noting that he was doing so under compulsion and setting forth his personal and religious beliefs about gender identity.” This proposed accommodation for Meriwether’s sincerely held religious beliefs was rejected by the university, which argued that the syllabus disclaimer, itself, would violate the policy.

In response to complaints filed by a transgender student of Meriwether, the university’s Title IX office conducted an investigation which concluded that Meriwether’s treatment of the transgender student, including refusing to use the student’s preferred pronoun, created a “hostile environment” violating the university’s non-discrimination policy. The university placed a written warning in Meriwether’s file, and Meriwether then brought suit against the university.

Meriwether argued that the university’s actions violated his rights under both the free speech and free exercise clauses of the First Amendment, and also asserted a due-process and equal-protection claims under the Fourteenth Amendment. His complaint was dismissed by an Ohio federal district court, and he appealed the decision, with the exception of the dismissal of the equal-protection claim, to the Sixth Circuit. The Sixth Circuit panel ruled that Meriwether’s case could proceed under both his free speech and free exercise claims.

With regard to the free speech claim, the Sixth Circuit panel ruled that the First Amendment protects the academic speech of university professors. In reaching this determination, the Sixth Circuit analyzed the U.S. Supreme Court’s decision in Garcetti v. Ceballos, 547 U.S. 410 (2006). In Garcetti, the Supreme Court held that, in normal circumstances, “when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline.” However, the Sixth Circuit held, in a decision consistent with the approach of the Fourth, Fifth, and Ninth Circuits, that the ruling in Garcetti does not apply in the academic context of a public university. Accordingly, the university violated Meriwether’s First Amendment rights.

As to the free exercise claim, the Sixth Circuit concluded that the university’s policy was not applied neutrally to religion as demonstrated by university officials showing hostility toward Meriwether’s religious beliefs and request for religious accommodation. As a result, the Sixth Circuit ruled that the university violated Meriwether’s free exercise rights.

Finally, the Sixth Circuit upheld the district court’s decision to dismiss Meriwether’s due process claim. Meriwether argued that the university’s policy violates due process because it is vague. However, the court found that Meriwether had notice of the policy and understood that it prohibited his conduct.

It is important to note that the Sixth Circuit’s ruling in this case only addressed the university’s motion to dismiss the complaint. Accordingly, for purposes of the appeal, Meriwether’s factual allegations were assumed to be true. He still has to prove his claims. However, the ruling does set important Sixth Circuit precedent affecting Michigan higher education institutions on issues of free speech and free exercise.

For any questions regarding this opinion, and how it may impact higher education institutions, please contact Ryan Kauffman.

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.

Federal Court Issues New Ruling Regarding Applicability of Title VII to Employers with Volunteer Work Forces

Recently, the Sixth Circuit Court of Appeals addressed the issue of whether an person must receive compensation in order to be considered an “employee” for purposes of meeting the 15-employee threshold for covered employers under Title VII.

Continue reading Federal Court Issues New Ruling Regarding Applicability of Title VII to Employers with Volunteer Work Forces