Review of a Federal Deposit Insurance Corporation (FDIC) order removing a bank executive/director from his position; 12 USC §§ 1818(e)(1) & 1813(u)(1); The Administrative Procedure Act (APA); Whether FDIC Board members are unconstitutionally insulated from removal by the President; Seila Law LLC v Consumer Fin Prot Bureau; Whether the FDIC’s administrative law judges (ALJs) are insulated by multiple levels of for-cause protection; Free Enter Fund v Public Co Accounting Oversight Bd; Whether an unconstitutional provision inflicted compensable harm upon plaintiff; Collins v Yellen; Whether the post-Lucia v SEC hearing was a “new hearing”; Limitation on cross-examination on bias; Sufficiency of the record evidence to support the Board’s findings

The court denied the petition for review of an FDIC order removing plaintiff-Calcutt from his bank position, prohibiting him from participating in the affairs of any insured depository institution, and imposing civil money penalties. It held that even if he were to establish a constitutional violation as to FDIC officials’ removal restrictions, he did not show the alleged unconstitutional provision inflicted “compensable harm” upon him. It also held that his second hearing satisfied Lucia’s mandate, that the ALJ’s limits on cross-examination constituted harmless error, and that there was substantial record evidence to support the FDIC’s findings as to the elements of § 1818(e)(1). The FDIC found that he had violated the commercial-loan policy of the bank where he was president, CEO, and chairman of the board of directors. His first hearing before an ALJ occurred before Lucia. His second, post-Lucia hearing before a new ALJ resulted in the penalties he now challenged. Calcutt first argued that under Seila Law, FDIC Board members “are unconstitutionally insulated from removal by the President.” He also claimed that “the FDIC’s ALJs are insulated by multiple levels of for-cause protection in contravention of” Free Enterprise Fund. The court held that neither argument invalidated his FDIC proceedings because under Collins, “even if an agency’s structure unconstitutionally shields officers from removal, a party challenging the agency’s action is not entitled to relief unless that unconstitutional provision ‘inflict[s] compensable harm.’” Calcutt failed to show “the removal protections of the FDIC Board or the FDIC ALJs caused” him such harm. It also rejected his claim that the second, post-Lucia hearing was not a “new hearing” as required. “A new hearing need not be from scratch; rather, the impact of the prior proceeding must be sufficiently muted that the new adjudicator can independently consider the merits.” Further, any error in limiting cross-examination on bias at the second hearing was harmless where “substantially equivalent evidence” was presented. The court noted he did not address the Board’s finding that he “‘repeatedly concealed material information’ . . . from regulators, and that such misrepresentations ‘constitute unsafe or unsound practices.’” It also held that the record supported the Board’s finding he “committed additional imprudent acts that posed an abnormal financial risk.” And substantial evidence supported “the conclusion that some—but not all—of the impacts to the Bank are ‘effects’ under [§] 8(e) and were proximately caused by Calcutt’s misconduct.”

Review of a Federal Deposit Insurance Corporation (FDIC) order removing a bank executive/director from his position; 12 USC §§ 1818(e)(1) & 1813(u)(1); The Administrative Procedure Act (APA); Whether FDIC Board members are unconstitutionally insulated from removal by the President; Seila Law LLC v Consumer Fin Prot Bureau; Whether the FDIC’s administrative law judges (ALJs) are insulated by multiple levels of for-cause protection; Free Enter Fund v Public Co Accounting Oversight Bd; Whether an unconstitutional provision inflicted compensable harm upon plaintiff; Collins v Yellen; Whether the post-Lucia v SEC hearing was a “new hearing”; Limitation on cross-examination on bias; Sufficiency of the record evidence to support the Board’s findings

The court denied the petition for review of an FDIC order removing plaintiff-Calcutt from his bank position, prohibiting him from participating in the affairs of any insured depository institution, and imposing civil money penalties. It held that even if he were to establish a constitutional violation as to FDIC officials’ removal restrictions, he did not show the alleged unconstitutional provision inflicted “compensable harm” upon him. It also held that his second hearing satisfied Lucia’s mandate, that the ALJ’s limits on cross-examination constituted harmless error, and that there was substantial record evidence to support the FDIC’s findings as to the elements of § 1818(e)(1). The FDIC found that he had violated the commercial-loan policy of the bank where he was president, CEO, and chairman of the board of directors. His first hearing before an ALJ occurred before Lucia. His second, post-Lucia hearing before a new ALJ resulted in the penalties he now challenged. Calcutt first argued that under Seila Law, FDIC Board members “are unconstitutionally insulated from removal by the President.” He also claimed that “the FDIC’s ALJs are insulated by multiple levels of for-cause protection in contravention of” Free Enterprise Fund. The court held that neither argument invalidated his FDIC proceedings because under Collins, “even if an agency’s structure unconstitutionally shields officers from removal, a party challenging the agency’s action is not entitled to relief unless that unconstitutional provision ‘inflict[s] compensable harm.’” Calcutt failed to show “the removal protections of the FDIC Board or the FDIC ALJs caused” him such harm. It also rejected his claim that the second, post-Lucia hearing was not a “new hearing” as required. “A new hearing need not be from scratch; rather, the impact of the prior proceeding must be sufficiently muted that the new adjudicator can independently consider the merits.” Further, any error in limiting cross-examination on bias at the second hearing was harmless where “substantially equivalent evidence” was presented. The court noted he did not address the Board’s finding that he “‘repeatedly concealed material information’ . . . from regulators, and that such misrepresentations ‘constitute unsafe or unsound practices.’” It also held that the record supported the Board’s finding he “committed additional imprudent acts that posed an abnormal financial risk.” And substantial evidence supported “the conclusion that some—but not all—of the impacts to the Bank are ‘effects’ under [§] 8(e) and were proximately caused by Calcutt’s misconduct.”

Motion for relief from judgment; Attempted murder; MCL 750.91; Principle that the offenses of attempted murder & AWIM are mutually exclusive crimes; People v Long; Jury instructions; People v Miller; Good cause & prejudice; MCR 6.508(D)(3)(a) & (b); Waiver; People v Kowalski; Ineffective assistance of counsel; People v Trakhtenberg; Trial strategy; People v Dunigan; Testimonial record; People v Reed

The court held that defendant failed to establish “actual prejudice” as required by MCR 6.508(D)(3)(B) to proceed with his claim for relief from judgment predicated upon instructional error. He was convicted of attempted murder and aggravated domestic violence for attacking his wife when they were in the midst of a divorce. In a prior appeal, the court affirmed, but the Supreme Court remanded for a hearing on ineffective assistance of counsel. On remand, the trial court denied relief, the court again affirmed, and the Supreme Court denied leave to appeal. The trial court then denied defendant’s motion for relief from judgment. In the present appeal, the court found the trial court properly denied his motion, agreeing with the prosecution that defendant waived all challenges to the trial court’s jury instructions and failed to satisfy the stringent requirements for relief from judgment. “‘[T]o permit proper review in cases where appellate counsel has pursued an appeal as of right and raised nonfrivolous claims, the defendant must make a testimonial record in the trial court in connection with a claim of ineffective assistance of appellate counsel.’ Defendant has done no such thing in this case, so he has not established ‘good cause’ under MCR 6.508(D)(3)(a) for failing to raise the instructional error on direct appeal.” And the trial record provided “no support for the argument ‘that the defendant is innocent of the crime’ of attempted murder.” Further he could not demonstrate “‘actual prejudice from the alleged irregularities that support the claim for relief.’” Affirmed.

Assignment of rights to personal protection insurance benefits; Whether an injury arose out of the “ownership, operation, maintenance or use of a motor vehicle as a motor vehicle”; MCL 500.3105(1); Allowable expenses; MCL 500.3107(1)(a); Spectrum Health Hosps v Farm Bureau Mut Ins Co of MI; Reasonableness of expenses; MCL 500.3157; Bronson Hosp v Auto-Owners Ins

The court held that plaintiff-medical provider failed to raise a genuine issue of material fact as to whether the disputed charges it submitted to defendant-insurer were reasonable, and the trial court did not err when it granted defendant’s motion for summary disposition. Plaintiff billed defendant for services it purportedly provided to its insured (Shaw), who was involved in a car accident. Plaintiff then sued defendant alleging it “refused to pay ‘necessary and incurred expenses related to [Shaw]’s medical care in accordance with the contract provisions and the No-Fault Act.’” The trial court ruled in favor of defendant. On appeal, the court rejected plaintiff’s argument that the trial court erred by granting defendant summary disposition because it failed to pay the reasonable amount for medical services on the basis that two of the procedures were duplicative of other charges and declined to pay anything for those two procedures. “[P]laintiff failed to present to the trial court any medical testimony supporting its conclusion that the charges for the procedures were reasonable.” Affirmed.

Assignment of rights to personal protection insurance benefits; Whether an injury arose out of the “ownership, operation, maintenance or use of a motor vehicle as a motor vehicle”; MCL 500.3105(1); Allowable expenses; MCL 500.3107(1)(a); Spectrum Health Hosps v Farm Bureau Mut Ins Co of MI; Reasonableness of expenses; MCL 500.3157; Bronson Hosp v Auto-Owners Ins

The court held that plaintiff-medical provider failed to raise a genuine issue of material fact as to whether the disputed charges it submitted to defendant-insurer were reasonable, and the trial court did not err when it granted defendant’s motion for summary disposition. Plaintiff billed defendant for services it purportedly provided to its insured (Shaw), who was involved in a car accident. Plaintiff then sued defendant alleging it “refused to pay ‘necessary and incurred expenses related to [Shaw]’s medical care in accordance with the contract provisions and the No-Fault Act.’” The trial court ruled in favor of defendant. On appeal, the court rejected plaintiff’s argument that the trial court erred by granting defendant summary disposition because it failed to pay the reasonable amount for medical services on the basis that two of the procedures were duplicative of other charges and declined to pay anything for those two procedures. “[P]laintiff failed to present to the trial court any medical testimony supporting its conclusion that the charges for the procedures were reasonable.” Affirmed.

Medical malpractice; Vicarious liability

The court held that plaintiffs failed to demonstrate that the trial court erred by determining as a matter of law that defendant-Page was not defendant-Holland Hospital’s ostensible agent and granting summary disposition in favor of the hospital. Plaintiffs argued that the trial court erred in granting summary disposition as to Holland Hospital’s vicarious liability because there were genuine questions of material fact as to whether Page was an ostensible agent of Holland Hospital. Plaintiffs initiated this action alleging medical malpractice related to plaintiff-Anne’s treatment at Holland Hospital by Page when Anne presented to the ER. The sole focus was “whether plaintiffs may seek to hold Holland Hospital vicariously liable for the allegedly negligent medical treatment provided by Page.” Although Anne claimed in her affidavit that when she arrived at the ER “department of Holland Hospital, ‘[a]ll signage in the ER and at the hospital suggested that I was upon the premises of Holland Hospital and that the facility was staffed with Holland Hospital employees and agents and that I would be provided with care and staff as necessary, by the hospital,’ she did not mention any specific sign or the specific language of any sign that she saw.” She only claimed “as to her belief but without including any evidence of any specific fact on which that belief was based.” Thus, on this record, there was only evidence that Anne was informed that ER “physicians at Holland Hospital may not be hospital employees and may instead be independent contractors whose medical decisions were not subject to the hospital’s control.” Even viewing the evidence in the light most favorable to plaintiffs as the court must, there was “no evidence to support a conclusion that Anne could have held a reasonable belief that Page was Holland Hospital’s agent or that any such belief was generated by some act or neglect attributable to Holland Hospital.” Affirmed.

Federal Tort Claims Act; Derivative immunity for a government contractor; Whether the Tennessee Valley Authority (TVA) would be immune from liability under Thacker v Tennessee Valley Auth; The “inconsistency inquiry”; Whether the court could consider an issue raised solely in an amicus brief; Whether a suit against the TVA would be inconsistent with & precluded by the Supremacy Clause & the Comprehensive Environmental Response, Compensation, & Liability Act (CERCLA); The “grave-interference inquiry”

In an amended opinion (see e-Journal # 77442 in the 6/2/22 edition for the original opinion), the court again held that because nonparty-TVA would not be immune if it had been named as a defendant in this tort case, defendant-Jacobs Engineering, the TVA’s prime contractor on a project, was not entitled to immunity. In its amended opinion, the court deleted portions of its original opinion discussing whether it could consider arguments only raised in the TVA’s amicus brief, including whether an argument “the lawsuit would have been inconsistent with the applicable state workers’ compensation regime” was properly before it. The court again concluded that the “inconsistency inquiry” and the “grave-interference inquiry” would not have protected the TVA from liability in this case. It again affirmed the district court's denial of derivative contractor immunity.

Termination under §§ 19b(3)(b)(i), (b)(ii), (g), (j), & (k)(iii); In re Ellis; Children’s best interests; In re White

While it concluded the trial court erred in finding some statutory grounds for termination were established by clear and convincing evidence, the court held that § (j) was established, and that terminating respondent-mother’s parental rights was in her surviving children’s best interests. Thus, it affirmed the termination order. The case arose after the death of respondent’s three-month-old child, DB. As to § (b)(ii), the court noted this case had “many similarities to Ellis” but found that the difference was “the lack of clear and convincing evidence supporting a finding that the non-abuser parent failed to prevent the abuse.” Medical testimony here indicated “the injury was caused in the 24-hour period before DB’s death. No external injuries were visible. Therefore, although DB had severe internal injuries, there is nothing on this record to suggest that the non-abuser parent would have been able to detect them.” Further, the record lacked “any evidence suggesting that DB—or any of her siblings—had sustained any prior injuries indicative of child abuse. Thus, there is nothing to suggest that the non-abuser parent was aware of the need to protect the child from the abuser.” In addition, because it could not “be established by clear and convincing evidence that respondent was, in fact, the” abuser, the trial court clearly erred in terminating her parental rights under § (b)(i). Further, termination under § (g) was clear error because the trial court did not make any “actual finding that respondent was, in fact, able to provide proper care and custody for her children.” Clear and convincing evidence also did not support termination under § (k)(iii). But as to § (j), unrefuted medical testimony showed accidental injury was ruled out as the cause of DB’s death from blunt force trauma, and neither parent “offered a plausible (or implausible) alternative explanation for the injury.” They were her only caretakers “in the relevant timeframe. Thus, . . . the trial court did not clearly err by finding that either DB’s father or respondent was the perpetrator of the abuse. If respondent was the perpetrator of the abuse, her conduct (killing DB) shows that there is a reasonable likelihood her surviving children will be harmed if returned to her care.” Even if she was not, she intended to stay with the father and raise their children with him. This showed “a reasonable likelihood that her surviving children will be harmed if returned to her care.”

Removal of the child; MCL 712A.13a(9); MCR 3.965(C)(2); Reasonable reunification efforts; Child Protective Services (CPS)

The court affirmed the trial court’s order removing respondent-mother’s child, DDF, from her care. The trial court “explicitly found in its order entered following the preliminary hearing that it was contrary to the welfare of DDF to remain in the home and that reasonable efforts were made to prevent the removal of DDF from the home, thereby complying with MCR 3.965(C)(3) and (4).” As to the “five requirements of MCL 712A.13a(9) and MCR 3.965(C)(2), the trial court found during the preliminary hearing that being in respondent’s care presented an ongoing risk of harm to DDF because of respondent’s continued illegal drug use, that continuing in respondent’s home was contrary to DDF’s welfare, that the only adequate arrangement at that point was removal of DDF from respondent’s care and placement in appropriate foster care adequate to safeguard the child, and that under the circumstances [DHHS] had made reasonable efforts to prevent the need for DDF’s removal from the home.” Thus, the court determined that the trial court satisfied the requirements of MCL 712A.13a(9) and MCR 3.965(C)(2). Respondent’s argument that there was insufficient evidence to support removal was “unpersuasive because the trial court’s findings at a preliminary hearing ‘may be made on the basis of hearsay evidence that possesses adequate indicia of trustworthiness.’” Thus, the trial court could consider the testimony of CPS investigator “Woods, which was based in part on information from respondent’s drug-screen reports and a police report, to demonstrate that respondent abused substances while pregnant with DDF. Moreover, there was ample evidence that remaining in respondent’s home was contrary to DDF’s welfare.” Her conduct showed “she was not prepared to place DDF’s needs over her own even shortly before his birth.” As to reasonable efforts to prevent DDF’s removal, the court noted that “Woods testified that she tried numerous times to reach respondent by phone, by text, and by visiting her home in person, and attempted to contact respondent through police and through the hospital; she was never able to reach respondent and respondent did not respond to messages.” DHHS could not offer her “services aimed at preventing removal if respondent refuses contact by” DHHS. The evidence suggested that her refusal to cooperate with DHHS “was intentional because respondent had been engaged in a case service plan for two years regarding her older child and therefore was aware of what efforts [DHHS] would expect her to make.”