Articles Posted in US Court of Appeals for the Sixth Circuit

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Tramble worked for various Kentucky coal companies from at least May 1963 until June 1985. Tramble’s 1987 claim for benefits under the Black Lung Benefits Act (BLBA), 30 U.S.C. 901–944, indicated that he had stopped working due to a job-related back injury. That claim was denied although the parties stipulated to 17 years of qualifying coal mine employment. The ALJ found that medical evidence established that Tramble suffered from coal workers’ pneumoconiosis but was not totally disabled. After his 2008 death, Tramble’s widow sought survivor’s benefits. Reversing an award by an ALJ, the Department of Labor Benefits Review Board found that the ALJ failed to explain adequately how he calculated the 15.25-years of underground coal mine employment that justified application of the 15-year statutory presumption of entitlement to benefits. On remand, the ALJ again awarded benefits. The Board again reversed. The Sixth Circuit remanded. Further fact-finding is required to ensure that all relevant evidence has been considered. The court rejected Incoal’s argument that, in order to be credited with one year of coal mine employment, a miner must be on the payroll of a mining company for 365 consecutive days and have worked 125 of those days in or around a coal mine . View "Shepherd v. Incoal, Inc." on Justia Law

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In an act of road rage, Bedford fired two shots at a truck driver while they both headed westbound on Interstate 40 in Tennessee. The truck driver, P.D., was employed by P&R, a private trucking company that had a contract with the United States Postal Service (USPS) to transport mail, and was carrying U.S. mail. Bedford was charged with forcibly assaulting, resisting, opposing, impeding, intimidating, or interfering with a person assisting officers and employees of the United States, while that person was engaged in the performance of official duties, and in doing so, using a dangerous weapon, 18 U.S.C. 111(a)(1), (b). Bedford moved to dismiss the indictment for lack of jurisdiction, contending that P.D. was not an officer or employee of the United States within the meaning of 18 U.S.C. 1114. The district court denied the motion, finding that the driver was a person assisting a federal officer or employee and fell within the statute’s reach. Bedford now appeals that denial. The Sixth Circuit affirmed. When a private mail carrier, pursuant to formal contract, carries U.S. mail on behalf of the USPS, he assists an officer or employee of the United States in the performance of official duties. View "United States v. Bedford" on Justia Law

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As a cost-saving measure, Flint's municipal water supply was switched from the Detroit Water and Sewerage Department (DWSD) to the Flint River and was processed by an outdated and previously mothballed water treatment plant, with the approval of Michigan regulators and an engineering firm, and distributed without adding chemicals to counter the river water’s known corrosivity. Within days, residents complained of foul smelling and tasting water. Within weeks, some residents’ hair began to fall out and their skin developed rashes. Within a year, there were positive tests for E. coli, a spike in deaths from Legionnaires’ disease, and reports of dangerously high blood-lead levels in Flint children. The river water was 19 times more corrosive than the Lake Huron water pumped supplied by DWSD; without corrosion-control treatment, lead leached out of the lead-based service lines. The district court dismissed many claims and defendants in a suit by residents. The remaining defendants appealed with respect to the remaining 42 U.S.C. 1983 claim--that defendants violated their right to bodily integrity as guaranteed by the Substantive Due Process Clause. The Sixth Circuit concluded that plaintiffs pled a plausible Due Process violation regarding some defendants, rejecting their qualified immunity claims. The court reversed as to other defendants; plaintiffs alleged mere negligence, not a constitutional violation, against them. The court rejected a claim that the city was entitled to Eleventh Amendment immunity based on Michigan's takeover of the city under the “Emergency Manager” law. View "Guertin v. Michigan" on Justia Law

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Michigan’s Unemployment Insurance Agency's automated program, MiDAS, accessed claimant records from employers, state agencies, and the federal government. When MiDAS detected unreported income or “flagged” other information, it initiated an automated process to determine whether the individual had engaged in fraud. If an employee reported no income for any week during a quarter in which he earned income, MiDAS automatically found fraud. MiDAS did not inform the claimant about the basis for suspicion and did not allow fact-based adjudication but automatically sent claimants multiple-choice questionnaires. No human being took part in the fraud determination. MiDAS sent the questionnaires to claimants’ online accounts, many of which were dormant, and did not take additional steps (emails, mail, or phone) to notify claimants. When MiDAS determined that a claimant committed fraud, the individual’s right to benefits terminated immediately and severe monetary penalties were automatically assessed, even when claimants did not actually receive benefits. Most claimants did not know about the determination until the time for appeal had expired. The Agency did not answer calls and garnished claimants’ wages and intercepted their federal income tax returns without an opportunity to contest the fraud determinations. The Michigan Auditor General reviewed 22,000 MiDAS fraud determinations; 93% did not actually involve fraud. In an action under 42 U.S.C. 1983, the district court denied the Individual Defendants qualified immunity. The Sixth Circuit affirmed in part. Plaintiffs adequately alleged that Defendants violated their right to procedural due process by terminating their eligibility for benefits and seizing their tax refunds without any meaningful pre-deprivation process; the right to a pre-deprivation hearing was clearly established at the time. Plaintiffs failed to state a plausible equal protection claim; they failed to allege Defendants intentionally singled them out for discriminatory treatment. Plaintiffs’ Fourth Amendment rights were not clearly established in this context. View "Cahoo v. SAS Analytics Inc." on Justia Law

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In 2006-2008, plaintiffs each applied, unsuccessfully, for Social Security disability benefits, 42 U.S.C. 423(d)(2)(A), 1382c(a)(3)(B). Each plaintiff retained Kentucky attorney Conn to assist with a subsequent hearing. Each plaintiff’s application included medical records from one of four examining doctors. In each case, ALJ Daugherty relied exclusively on the doctor's opinion to conclude, without a hearing, that plaintiffs were disabled and entitled to benefits. Daugherty took bribes from Conn to assign Conn’s cases to himself and issue favorable rulings. Nearly 10 years after the agency learned of the scheme, it initiated “redeterminations” of plaintiffs’ eligibility for benefits and held new hearings, disregarding all medical evidence submitted by the four doctors participating in Conn’s scheme. Plaintiffs had no opportunity to rebut the assertion of fraud as to this evidence. Each plaintiff was deemed ineligible for benefits as of the date of their original applications; their benefits were terminated. Plaintiffs sued, alleging violations of the Due Process Clause and the Social Security Act. The Sixth Circuit held that the plaintiffs are entitled to summary judgment on their due-process claim and the agency is entitled to summary judgment on the Social Security Act claims. The agency must proffer some factual basis for believing that the plaintiffs’ evidence is fraudulent. Plaintiffs must have an opportunity to “rebut the Government’s factual assertions before a neutral decisionmaker.” Congress has already told the agency what to do when redetermination proceedings threaten criminal adjudications; the answer is not to deprive claimants of basic procedural safeguards. View "Griffith v. Commissioner of Social Security" on Justia Law

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The Tennessee Hospital Association and three hospitals sued, challenging efforts by the Centers for Medicare and Medicaid Services (CMS) to direct states to recoup certain reimbursements made under the Medicaid program. The hospitals serve a disproportionate share of Medicaid-eligible patients and are thereby entitled to supplemental payments under the Medicaid Act, (DSH payments), 42 U.S.C. 1396a(a)(13)(A)(iv); 1396r-4(b). The Act limits the amount of DSH payments each hospital can receive in a given year. CMS contends that the hospitals miscalculated their DSH payment-adjustments for fiscal year 2012 and received extra payments. Plaintiffs argued, and the district court agreed, that CMS’s approach to calculating DSH payment adjustments is inconsistent with the Act and the regulations that CMS implemented in 2008. The Sixth Circuit affirmed, agreeing that CMS’s policy is inconsistent with its 2008 rule and cannot be enforced unless it is promulgated pursuant to notice-and-comment rulemaking. The court disagreed with the district court’s conclusion that CMS’s policy exceeds the agency’s authority under the Medicaid Act. CMS’s payment-deduction policy is a reasonable interpretation of an ambiguous section of the Act but is not a valid interpretative rule. CMS attempted to exercise its delegated discretion to “determine[]” the “costs incurred” in serving Medicaid-eligible patients—precisely the sort of agency action that requires notice-and-comment rulemaking. View "Tennessee Hospital Association v. Azar" on Justia Law

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Losantiville Country Club hosted unprofitable nonmember events for many years, consistently using those losses to avoid paying tax on its investment income. Because the Internal Revenue Service determined that Losantiville did not hold nonmember events for the primary purpose of making a profit, the club could not offset its income from investments with losses from those nonmember activities. Invalidating those deductions resulted in Losantiville having underpaid tax on its unrelated business income between 2010 and 2012. Plus, the IRS imposed accuracy-related penalties. On appeal, the Tax Court upheld this determination, reasoning that Losantiville did not intend to profit from its nonmember events. Finding no reversible error in that decision, the Sixth Circuit affirmed. View "Losantiville Country Club v. Comm'r of Internal Revenue" on Justia Law

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Petitioners-appellants John Machacek, Jr. and Marianne Machacek were the sole shareholders of John J. Machacek, Jr., Inc. (Machacek, Inc.), a corporation organized under Subchapter S of the Internal Revenue Code. John was also an employee of Machacek, Inc. The Machaceks appealed the Tax Court’s ruling requiring them to treat as income the economic benefits resulting from Machacek, Inc.’s payment of a premium on John's life insurance policy under a compensatory split-dollar arrangement. Relying on the compensatory nature of the arrangement, the Tax Court rejected the Machaceks’ argument that the economic benefits should be treated as a shareholder distribution. The Sixth Circuit reversed, finding that the Tax Court did not consider the impact of a provision of the tax regulations specifically requiring that such economic benefits be treated as shareholder distributions. View "Machacek v. Comm'r of Internal Revenue" on Justia Law

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Mason, an African-American Ohio resident sued against all 88 Ohio county recorders for violating the Fair Housing Act’s prohibition against making, printing, or publishing “any . . . statement” indicating a racial preference, such as a racially restrictive covenant. Mason’s complaint included copies of land records, recorded in 1922-1957, that contain racially restrictive covenants. There is no allegation that such covenants have been enforced since the 1948 Supreme Court decision prohibiting enforcement of such covenants. Mason maintains that permitting documents with restrictive covenants in the chain of title to be recorded or maintained and making them available to the public violated the Act. Mason alleges that defendants “discouraged the Plaintiff and others from purchasing real estate ... by creating a feeling that they ... do not belong in certain neighborhoods” and that defendants’ actions “damage and cloud the title to property owned by property owners.” Mason’s counsel stated that Mason became aware of the covenants while looking to buy property, a fact not contained in the complaint. The Sixth Circuit affirmed that Mason lacked standing. A plaintiff must show that he suffered a palpable economic injury distinct to himself; any alleged injury was not caused by the county recorders, who are required by Ohio statute to furnish the documents to the public; county recorders cannot redress the alleged harm, as they have no statutory authority to edit the documents. View "Mason v. Adams County Recorder" on Justia Law

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Seven Counties, a nonprofit provider of mental health services, attempted to file for Bankruptcy Code Chapter 11 reorganization. For decades, Seven Counties has participated in Kentucky’s public pension plan (KERS). Because the rate set for employer contributions has drastically increased in recent years, Seven Counties sought to reject its relationship with KERS in bankruptcy. The bankruptcy court and the district court both held that Seven Counties is eligible to file under Chapter 11 and that the relationship between Seven Counties and KERS is based on an executory contract that can be rejected. The Sixth Circuit affirmed in part. Seven Counties is only eligible to be a Chapter 11 debtor if it is a “person” under 11 U.S.C. 109(a); a “governmental unit” is generally excluded from the category of “person.” Because the Commonwealth does not exercise the necessary forms of control over Seven Counties for it to be considered an instrumentality of the Commonwealth, Seven Counties is eligible to file. Seven Counties characterized its relationship with KERS as contractual, such that, to the extent it is executory, it may be rejected in bankruptcy, 11 U.S.C. 365. KERS argued the relationship is purely statutory, similar to an assessment, such that it cannot be rejected. The Sixth Circuit certified the question of the nature of the relationship to the Kentucky Supreme Court. View "Kentucky Employees. Retirement System v. Seven Counties.Services, Inc." on Justia Law