Kaitlyn Elias Fishman Stewart PLLC Jessica Fleetham Bill Gilbride Ingham County Bar Association Tim Kramer Dan Kielczewski Nicholas H. Klaus MDTC Tom Quilter Steven Susser
Providing summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit. Over 60,000 cases summarized to date.
Full Text Opinion
Motion for an emergency stay of the district court’s order ruling that the Centers for Disease Control & Prevention (CDC) lacked the authority to issue an eviction moratorium; The Public Health Service Act; 42 USC § 264(a)
In an order, the court denied the government’s emergency motion for a stay pending an appeal of the district court’s ruling that the CDC exceeded its authority by issuing an eviction moratorium because there is no language in the Public Health Service Act (PHSA) indicating Congress’s intent to invade the traditionally state-controlled arena of landlord-tenant relations. The CDC ordered a nationwide moratorium on residential evictions (Halt Order), justifying its actions through a PHSA provision authorizing the CDC to “sanitize property exposed to contagion.” Plaintiffs-property owners and managers challenged the order and its extensions. The district court ruled for plaintiffs, concluding that the CDC exceeded its authority under the PHSA. The government requested an emergency stay pending appeal, but the court denied the request. Framing the issue as whether Congress granted the CDC the power to prohibit evictions, the court held that its sole authority rested on § 264, and that the statute could not support the CDC’s action. It rejected the government’s position that § 264’s “catchall provision” gave it the authority to consider the moratorium as an “other measure” to mitigate contagion. Even if it could be construed as an “other measure,” the court was unwilling to read the PHSA “to grant the CDC the power to insert itself into the landlord-tenant relationship without some clear, unequivocal textual evidence of Congress’s intent to do so. Regulation of the landlord-tenant relationship is historically the province of the states.”
The Federal Deposit Insurance Corporation’s (FDIC) limits on financial institutions’ “golden parachute” payments; 12 USC § 1828(k); 12 CFR §§ 303.244(a) & 359.4(a)(2); Whether the FDIC violated the Administrative Procedure Act (APA) by refusing to approve plaintiff’s payment; § 359.4(b)(3)
[This appeal was from the ED-MI.] The court affirmed the district court’s ruling that defendant-FDIC was entitled to judgment on the administrative record where it did not violate the APA or act “arbitrarily or capriciously” by refusing to approve a second “golden parachute” payment to plaintiff-Wollschlager where the payment exceeded his one-year salary, the bank did not obtain FDIC approval for the golden parachute agreement, and the “white knight” exception to the bar on golden parachutes does not permit incentivizing existing stays at troubled institutions. The bank hired Wollschlager to help it recover from financial difficulties. As a condition of employment, he was covered under a golden parachute arrangement that Congress requires the FDIC to approve when dealing with “troubled banks.” The original arrangement provided that if he was fired prematurely, he would be paid $175,000. But after two years, a new agreement was negotiated (without obtaining FDIC approval) equaling approximately two years’ salary. After he left the bank, the FDIC approved payment of a first installment payment, but declined to approve the second, explaining that golden parachute payments were not to “exceed one year’s salary, particularly for someone who had worked at the bank for just three years.” Wollschlager sued, alleging that it violated the APA by refusing to approve the second payment. The court noted that § 359.4(a)(2), the white knight provision, encourages “a talented banker to join a ship that may be sinking.” The court reviewed the FDIC’s discussion of the § 359.4 factors and agreed with its assessment that the length of employment and the reasonableness of the payment factors undermined Wollschlager’s right to the second payment, especially where “it would result in a windfall of two years’ salary for an employee who worked for just three years[,]” and where the bank never sought initial approval for the new agreement. The court observed that the new agreement “was made in order to retain, not to hire, him.” Further, the separation agreement providing for the two payments was made only one month before he left the bank, and it was signed “in order to fire Wollschlager, not ‘in order to hire’ him.” The court concluded that the FDIC offered “‘adequate reasons’ for withholding consent,” and did not act arbitrarily or capriciously.
Claims under Title VII & Michigan’s Elliott-Larsen Civil Rights Act (ELCRA); Sexual harassment; 42 USC § 2000e-2(a)(1); MCL 37.2202(1)(a); Williams v. General Motors Corp.; Harris v. Forklift Sys., Inc.; Retaliation; § 2000e-3(a); MCL 37.2701(a); Retaliation claim under the Family & Medical Leave Act (FMLA); 29 USC § 2615(a)(1)
[This appeal was from the ED-MI.] While the court held that the district court erred by ruling that the former employee’s (Massey) alleged harassment was not based on her sex, it affirmed summary judgment for defendant-employer (Great Lakes) on the hostile work environment claim where “the harassment was not sufficiently severe or pervasive.” It also affirmed summary judgment for Great Lakes on the retaliation claims under Title VII, ELCRA, and FMLA. Massey was fired for allegedly falsifying an incident report. She alleged a hostile work environment through sexual harassment and retaliation under Title VII and the ELCRA, and retaliation under the FMLA. After she filed for Chapter 7 bankruptcy, her trustee, Nathan, was substituted as plaintiff. The court held that the district court erred by ruling that the alleged harassment was not “based on Massey’s sex” where “[a]reasonable jury could find that Massey’s supervisors and co-workers would not have harassed Massey about her breasts ‘but for’ Massey’s sex.” To hold otherwise would conflict with Williams, which held that “‘[a]ny unequal treatment of an employee that would not occur but for the employee’s [sex]' constitutes harassment based on sex . . . .” The court noted that the district court put an unwarranted emphasis on the fact that two of Massey’s harassers were women, and that it was irrelevant that they also harassed her about “her size.” Title VII does not require that sex be “the only cause of harassment[.]” But there was insufficient evidence that the harassment was sufficiently “severe or pervasive” under Sixth Circuit precedent. While a reasonable jury could find that the subjective prong of this element was met, the court concluded there was insufficient evidence that Great Lakes’ work environment was “objectively hostile” where Massey gave evidence of only 5 instances of sex-based harassment that occurred over a 15-month period. Further, “no one at Great Lakes ever physically threatened Massey or placed their hands on her[,]” and her interactions with her supervisors would not be as humiliating because others did not hear the comments. It held that the harassment she “faced was closer to ‘isolated incidents’ than a pattern of conduct that altered ‘the conditions of [Massey’s] employment.’” The claim that she was fired in retaliation for complaining about the harassment failed because Great Lakes had “an honest belief that Massey falsified her report.” Finally, where Nathan could not “establish pretext in the Title VII and ELCRA context,” he also could not establish it in the FMLA context.
Claims for post-termination commissions; Breach of contract; Barber v SMH (US), Inc; Clark Bros Sales Co v Dana Corp (ED MI); Contractual silence on an issue; Unjust enrichment; Karaus v Bank of NY Mellon; Distinguishing Turner Assoc, Inc v Small Parts, Inc (ED MI); Cell phone allowance claim; Exclusion of evidence; Motion for reconsideration; Futile amendment
The court held that summary disposition of plaintiff’s breach of contract claim for post-termination commissions was improper because the contract was ambiguous on the issue and no rule of law governed its resolution, thus further factual development was required to resolve the ambiguity. But given the existence of the contract, it affirmed the dismissal of plaintiff’s unjust enrichment claim. He argued “that the trial court erred by adding a provision to the employment contract that he was only entitled to payment of commissions during his employment with defendant.” Defendant contended that the contract was unambiguous and clearly stated that his right to commissions “exists ‘with’ the position of Senior Robot Programmer” and “will be paid only so long as [plaintiff] retains the position title Senior Robot Programmer.” But defendant did not provide any “authority supporting an interpretation of ‘with’ sufficiently expansive to preclude payment of commissions after the termination of plaintiff’s employment, and the agreement does not ‘clearly’ state that commissions will be paid only during” his employment with defendant. Rather, the contract was at best silent on the issue, and this silence allowed “two equally reasonable interpretations regarding payment of commissions for employees referred during plaintiff’s employment: one that precludes payment of commissions following the termination of plaintiff’s employment and one that requires the payment of commissions, even after the termination of plaintiff’s employment, for ‘all workers brought to [defendant] by [plaintiff].’” As to his unjust enrichment claim, while plaintiff cited Turner in arguing that the fact the contract did not refer to post-termination commissions meant he could assert a viable unjust enrichment claim, Turner did “not support such a broad interpretation.” The court determined that Turner did not apply given that there was no dispute as to the existence of a valid contract here. The court also reversed some of the separate orders plaintiff challenged on appeal, while affirming one denying his motion for leave to file a second amended complaint to reinstate his futile unjust enrichment claim. Affirmed in part, reversed in part, and remanded.
Search & seizure; Motion to suppress evidence; Particularity requirement for a search warrant; Distinguishing Groh v Ramirez; Execution of the warrant; Maryland v Garrison; Mootness; Distinguishing People v. Richmond
Rejecting defendant’s assertions that the prosecution mooted or otherwise waived its right to appeal the order granting his motion to suppress, the court held that the trial court erred in doing so. The warrant satisfied the particularity requirement as to the premises to be searched, and even if police learned that the house “was a multifamily dwelling while executing the warrant, defendant’s constitutional rights were never violated.” The trial court dismissed charges of possession with intent to deliver 450 grams or more but less than 1,000 grams of cocaine and felony-firearm against him. As to mootness, the court noted that this case was distinguishable from Richmond as “the prosecution did not move to dismiss the charges.” The trial court sua sponte dismissed the case given its ruling on defendant’s motion to suppress, despite its “order noting that the dismissal was on motion of ‘the PEOPLE.’” When asked by defense counsel if there was a motion, “the prosecutor unequivocally stated ‘no.’” Turning to the motion to suppress, it was unclear whether the trial court found as a matter of fact that the officer (M) who prepared the affidavit for the search warrant knew or should have known that the house was a multifamily house, or whether it simply “believed that the warrant was invalid because the house was, in fact, a multifamily house. In either case,” it erred. If it concluded the latter, this was error because “a warrant is only invalid for failing to identify a multifamily dwelling as a multifamily dwelling if the officer knew or should have known that the dwelling was a multifamily dwelling at the time the warrant was issued.” Alternatively, the court found no feature on the front of the house that would have alerted M it “had more than one subunit.” While there were two electricity meters on the back, it was not unreasonable for M “to only examine the front of the house before requesting a warrant.” Given the facts, the court was “left with a definite and firm conviction that the trial court misapprehended what [M] reasonably should have known.” In light of the information available to her when she requested the warrant, it “fairly described the place to be searched with sufficient particularity to ensure the officers executing the warrant searched the correct location.” Reversed.
Search & seizure; Whether a traffic stop was lawful; Terry v Ohio; People v Williams; License plate violation; MCL 257.225(1) & (2); People v Simmons; Improper lane use; MCL 257.642; Operating a vehicle while intoxicated (OWI); MCL 257.625(1); An officer's conclusions drawn from reasonable inferences based on the facts in light of his or her training & experience; People v Steele
The court held that the trial court erred by granting defendant’s motion to suppress evidence and dismiss the OWI charge against her. The officer pulled her over on the bases that he could not see a visible license plate and that she had crossed the center line. She was charged with OWI III. She successfully moved to suppress and dismiss, arguing that the traffic stop was unlawful because she had a visible paper temporary license plate properly placed in her rear window and the patrol video did not show that she crossed the center line. On appeal, the court agreed with the prosecution that the trial court erred by granting defendant’s motion because the officer “had a reasonable suspicion that traffic laws were being violated, which permitted him to lawfully conduct a traffic stop of” her vehicle. It noted that the officer “was justified in conducting the traffic stop of defendant’s vehicle based on the reasonable suspicion that MCL 257.225(2) had been violated by the failure to keep the temporary registration in a clearly visible position or clearly legible condition.” Thus, the stop “was justified at its inception.” In addition, the trial court’s “sole focus on the license plate issue failed to give adequate attention to the evolving circumstances” the officer encountered. “Having testified that he observed defendant’s vehicle crossing the center line into the center turn lane without making a left turn, [he] had a reasonable suspicion that another civil infraction justifying a traffic stop had been committed by defendant for violating MCL 257.642(1).” Further, the officer testified that his “training and experience led him to conclude that there was a possibility that defendant . . . was intoxicated based on the failure to stay within her lane at 3:30 a.m.” His reasonable suspicion that she “was violating the law by driving while intoxicated provided another valid justification for the traffic stop.” These later developments involving her vehicle crossing the center line and the officer’s reasonable suspicion of intoxicated driving independently supported “a conclusion that the traffic stop was justified at its inception even if the temporary license plate had been rendered clearly visible and legible by the lights from” the patrol vehicle before the officer effectuated the stop. Reversed and remanded.
Sentence reduction; The Fair Sentencing Act; First Step Act § 404(b); Whether the First Step Act demands a plenary resentencing accounting for all changes in the law since the original sentence; 18 USC §§ 3553(a) & 3582(c); Consideration of subsequent developments
The court affirmed the district court’s denial of defendant-Maxwell’s motion for a discretionary sentence reduction under the First Step Act, holding that the Act does not require a plenary resentencing that accounts for all changes in the law since a defendant was originally sentenced. It also held that the Act gives the district court the discretion to consider subsequent developments in the law when deciding whether to modify the original sentence. Maxwell was sentenced to 30 years in prison on a drug conviction. He unsuccessfully moved for a sentence reduction under the First Step Act. On appeal, the court first held that the district court was permitted to reduce his sentence where § 3582(c) and the First Step Act “expressly permitted” it to exercise its discretion and lower his sentence. Maxwell argued that the district court was required to “engage in a plenary resentencing, one that recalculates the advisory guidelines range according to the law at the time of the request, here the law in 2020[,]” including changes to his career offender designation. But the court noted that the Act only required the district “court to sentence Maxwell ‘as if’ the crack-cocaine sentencing range had been reduced under the Fair Sentencing Act of 2010, not as if other changes had been made to sentencing law in the intervening years.” The court noted that it had “considerable company in following the relevant language—the Act’s ‘as if’ directive and § 3582(c)’s prohibition on modifying sentences unless ‘expressly permitted’—to its natural end. Several circuits have rejected the idea that a First Step Act request requires the trial court to engage in a plenary resentencing hearing.” However, it also held that the Act does not prohibit “trial judges from considering intervening legal and factual developments in handling First Step Act requests.” The court concluded that sentencing courts may consider developments such as changes to career offender status when balancing the § 3553(a) factors. The district court “reasoned through Maxwell’s arguments and acted well within its discretion in concluding that ‘a sentence of 360 months’ imprisonment remains sufficient, but not greater than necessary, to meet all of the goals and objectives of’” § 3553. The court declined to consider “whether the First Step Act permits a district court to modify a sentence below the changes ushered in by the Fair Sentencing Act.”
Anti-retaliation provision of the False Claims Act (FCA); 31 USC § 3730(h); MCL 400.610c; Whether the FCA’s reference to conduct prohibited against “employees” encompasses post-termination conduct; § 3730(h)(1); Robinson v. Shell Oil Co.
[This appeal was from the ED-MI.] In an issue of first impression in this circuit, the court held that the FCA’s anti-retaliation provision protects former employees alleging post-termination retaliation. Relator-Felten claimed that defendant-Beaumont blacklisted him after he filed a qui tam action against it, alleging certain federal- and state-law violations. However, the alleged blacklisting occurred after Beaumont terminated his employment, and his allegations alleged only post-termination actions—that Beaumont “‘intentionally maligned [him] . . . in retaliation for his reports of its unlawful conduct,’ undermining his employment applications to” nearly 40 institutions. The district court dismissed the claims, ruling that the FCA only covered actions taken during his employment. The issue was whether § 3730(h)(1)’s reference to an employer’s prohibited conduct towards an “employee” refers only to a “current employment relationship,” or if it encompasses one that has ended. The court found the language ambiguous. It applied the same reasoning that Robinson applied to Title VII and concluded that the term “employees” could be read to apply to both current and former employees. “First, there is no temporal qualifier accompanying the term ‘employee’ in § 3730(h)(1), and that provision’s explicit reference to ‘[a]ny employee,’ . . . could mean that it applies to any person who has ever been employed.” Further, the availability of “reinstatement” under § 3730(h)(2) and other language in that section indicated that “remedies exist regardless of whether the plaintiff is still employed." The court observed that “[i]f employers can simply threaten, harass, and discriminate against employees without repercussion as long as they fire them first, potential whistleblowers could be dissuaded from reporting fraud against the government.” Acknowledging its decision created a circuit split, the court reasoned that it was a “better fit with all of Robinson’s considerations to construe § 3730(h)(1) to effectuate the statute’s broader context and purpose.” Reversed and remanded. On remand the district court is to consider whether “blacklisting is included as a form of prohibited retaliatory action.”
Action seeking PIP benefits for replacement services & attendant care; MCL 500.3105(1); MCL 500.3107(1)(a) & (c); Johnson v Recca; Fraud; Bahri v IDS Prop Cas Ins Co; Meemic Ins Co v. Fortson; Materiality; Mina v General Star Indem Co
The court held that the trial court erred by denying defendant-insurer’s motion for summary disposition on the basis of insurance fraud. Plaintiff filed this action when defendant denied her claim for PIP benefits after a car accident. On appeal, the court agreed with defendant that the trial court erred by denying its summary disposition motion “because no genuine dispute of fact existed as to whether plaintiff made material misrepresentations with respect to her claim for replacement services and attendant care.” It noted that she “clearly submitted affidavits for attendant care and replacement services that were, in [her] own words, inaccurate.” She failed to identify “any evidence that anyone actually did anything for her at her home during” her four-day trip out of state. In addition, it was a “logical stretch for plaintiff to claim she required 12 hours of attendant care at her home while she was not there.” Further, not only was her “claim for replacement services while she was out of town false, the misrepresentations were material.” Thus, there was “no genuine issue of material fact regarding whether plaintiff materially misrepresented her need for replacement services during the time she was out of town. Plaintiff submitted fraudulent claims for replacement services under the terms of the insurance contract, which entitled defendant to void the contract. Defendant was entitled to summary disposition on this basis alone.” Reversed and remanded for entry of summary disposition for defendant.
First-party action under the No-Fault Act; “Allowable expenses” & “replacement services”; MCL 500.3107(1)(a) & (c); Medical expenses; Reasonable necessity; Krohn v Home-Owners Ins Co; Attendant care services distinguished from replacement services
The court held that the trial court did not err in granting defendant-insurer summary disposition of plaintiff-Pepaj’s claim for medical expenses, that some of the services for which he sought coverage were replacement services rather than attendant care services, and that his claim for attendant care expenses failed because he did not present “externally verifiable objective evidence that” they were reasonably necessary. The court found Krohn particularly relevant, and it adopted the trial court’s analysis and conclusion, which were consistent with that case. Addressing billing statements for medical and psychological services rendered after 12/8/16, “including those referencing cervicalgia, i.e., neck pain,” it noted that they did not provide any “evidence that the associated services and expenses were reasonably necessary, just that Pepaj obtained the services and incurred the costs.” Further, even if the reference to cervicalgia constituted a formal diagnosis, there was no elaboration allowing “the inference that the medical services or expenses resulted or arose from the motor vehicle accident. Pepaj was able to produce a mountain of medical records for services provided before” 12/8/16 related to whether the medical expenses were reasonably necessary, but he provided no such evidence as to treatment received after that date. The fatal flaw in his case was his “failure to submit evidence of ‘externally verifiable phenomena associated with an objective viewpoint,’ . . . i.e., some substantive evidence of an objective perspective by a doctor or psychologist indicating or suggesting that the medical and psychological services and expenses were reasonably necessary. Pepaj’s vague deposition testimony provided, at best, a mere subjective perception or belief by Pepaj that services were reasonably necessary.” The court further determined that house cleaning, doing the laundry, and meal preparation were replacement services, not attendant care services, and thus claims of coverage for them were barred by a release. As to those that qualified as attendant care services, his “reliance on his own subjective perception or belief that he needed attendant care services did not suffice to create a genuine issue of material fact.” Affirmed.
The charitable institution exemption under the General Property Tax Act; MCL 211.7o(1); Wexford Med Group v Cadillac; Trinity Health-Warde Lab, LLC v Charter Twp of Pittsfield; Whether a subsidiary corporation is entitled to a tax exemption when it is a nonexempt organization & the parent company is exempt; Ann Arbor v University Cellar, Inc; Tax Tribunal (TT)
The court held that the TT did not err by finding petitioners-USA Hockey Foundation and subsidiary were not entitled to the charitable-institution exemption from ad valorem property taxation for their ice-hockey arena located in respondent-township. “The statutory language at issue in this case provides that real and personal property is exempt from ad valorem taxation only when it is ‘owned and occupied by a nonprofit charitable institution while occupied by that nonprofit charitable institution solely for the purposes for which that nonprofit charitable institution was incorporated.’ Because the real property in this case is owned only by [the subsidiary], which is not a nonprofit-charitable institution, [the subsidiary] is not entitled to the tax exemption, and the” TT did not err in its ruling. The court also noted its holding in Trinity Health-Warde Lab remains precedentially binding. It concluded that petitioners’ claim “the Foundation ‘owns’ the real property to which its subsidiary company holds legal title is simply another way to express its argument that a subsidiary corporation is entitled to a tax exemption when its parent company is exempt.” The court noted that this argument was “directly rejected . . . in Trinity Health-Warde Lab.” Finally, it rejected their contention that the TT erred by finding the subsidiary to be a for-profit entity, noting their petition “expressly alleged that the Foundation is a non-profit corporation, but made no allegation that [the subsidiary] is a non-profit entity.” Affirmed.
Fall while riding a defendant-SMART bus; Whether defendant-bus driver’s operation of the bus was negligent; Duty of care
In an order in lieu of granting leave to appeal, the court vacated the Court of Appeals judgment (see e-Journal # 73675 in the 9/1/20 edition) and remanded the case to the Court of Appeals for reconsideration. It noted that, in considering whether defendant-bus driver owed “plaintiff a duty of care, the Court of Appeals referenced the trial court’s ruling on the defendants’ motion for summary disposition but not the trial court’s ruling on” their motion for reconsideration after first permitting plaintiff to present more evidence. The court directed the Court of Appeals on remand to address the trial court’s 2/13/19 opinion and order, and reconsider whether plaintiff offered “evidence of a ‘special and apparent reason’ that the defendant-bus driver should have waited for the plaintiff to reach a seat before moving the bus. The Court of Appeals shall also reconsider its previous holdings that are impacted by this determination and, if necessary, the other arguments made by the defendants that the Court of Appeals did not address in its initial opinion.”
Termination under § 19b(3)(a)(ii) (parent has deserted child for more than 91 days); Child’s best interests
Holding that § (a)(ii) was established and termination of respondent-father’s parental rights was in the best interests of the child, E, the court affirmed. The DHHS presented sufficient evidence to establish that he failed to make any substantial effort to visit or communicate with E, or seek custody of E, for a period in excess of 91 days. Respondent had no contact with E “since the time she was 10 months old until the termination hearing, when she was two years old—a period far in excess of the 91-day statutory period.” Further, it was undisputed that in the 91 days before the petition for termination of his parental rights was filed, respondent neither sought any contact with E nor took any steps to obtain custody of her. Rather than dispute his complete absence from E’s life for the 91-day period before the petition was filed, respondent argued that the mother thwarted his efforts to visit E, and he did not abandon E because the “mother had sole legal and physical custody and her attitude toward him prevented him from seeing” E. This argument lacked merit. By his own admission, he did not have a relationship with E, he was to blame for not initiating contact with the mother to visit or communicate with E, and his hostile relationship with the “mother was ‘not a good excuse’ for letting ‘a while’ pass since the last time he had asked for visitation with” E. While respondent maintained that the mother’s “attitude” toward him prevented him from seeing E, he “acknowledged that he never sought custody or parenting time in court, and he unequivocally stated” the mother had never interfered with his ability to visit E. The reasons for abandonment were irrelevant. Where he made no efforts for legal custody between 7/18 and termination in 6/20, the trial court did not err in terminating his parental rights to E under § (a)(ii).