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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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.
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Motion to dismiss; The Electronic Fund Transfer Act (EFTA); Statute of limitations; 15 USC § 1693m(g); Applicability of the discovery rule; Rotkiske v Klemm; The continuing-violation doctrine; Tobey v Chibucos (7th Cir); The National Automated Clearing House Association (NACHA) rules; Whether plaintiff had a viable NACHA claim because of her deposit account agreement with a bank; Whether the Bank Secrecy Act creates an express private right of action to enforce the Suspicious Activity Report (SAR) filing requirement; Supplemental jurisdiction
The court held that plaintiff-Koeberer’s EFTA claim against defendant-Chase Bank was barred by the one-year statute of limitations, and that she did not plead a viable NACHA claim. Further, the “Bank Secrecy Act does not create an express private right of action for private litigants to enforce the SAR filing requirement[,]” and the district court did not err in declining to exercise supplemental jurisdiction over her state-law claims after dismissing all her federal claims. Koeberer is the beneficiary of a testamentary trust. In this case, she sued, among others, the bank handling the trust’s financial assets, Chase. The district court granted defendants’ motion to dismiss. On appeal, the court first upheld the dismissal of her claim “that Chase Bank violated the Bank Secrecy Act by failing to flag suspicious activities on her trust account.” It noted that “Congress knew how to create a private action in the Bank Secrecy Act” as it created one for whistleblowers. It did not have to decide whether the “Act gives rise to an implied private right of action because Koeberer” did not raise this argument. The court next held that her EFTA claim was untimely. A consumer must file an EFTA claim within one year of the date of the violation. She did not do so. While she relied on the discovery rule and the continuing-violations doctrine to toll the running of the statute of limitations, the court concluded that they did not. First, it held that the “discovery rule does not apply to the EFTA’s limitations period.” Second, the continuing-violation “doctrine does not resurrect an otherwise untimely claim where, as here, ‘a discrete incident of unlawful conduct gives rise to continuing injuries because the plaintiff can bring a single suit based on an estimation of total injuries.’” As to her NACHA claim, which she based on her deposit account agreement with Chase, the court found that she could not “enforce the rules because the agreement does not incorporate them, nor does [it] identify her as an intended beneficiary of the NACHA rules.” Affirmed.
Commodities Exchange Act (CEA); Sports-event contracts; Statutory definition of “swap”; 7 USC § 1a(47)(A)(ii); Commodity Futures Trading Commission’s (CFTC) exclusive jurisdiction; § 2(a)(1)(A); Equitable cause of action; Ex parte Young; Supremacy Clause; Express, field & conflict preemption; Preliminary injunction
The court held that plaintiff-Kalshi’s sports-event contracts are not “swaps” under the CEA and, even assuming they are, the CEA neither expressly nor impliedly preempts Ohio’s or Tennessee’s gambling laws. Kalshi operates a CFTC-regulated designated contract market (DCM) and began offering contracts allowing customers to take positions on the outcomes of sporting events. After Ohio and Tennessee regulators sought to enforce their sports-gambling laws against Kalshi, it sued the state officials and sought preliminary injunctions on preemption grounds. The Ohio district court denied relief, while the Tennessee district court granted a preliminary injunction. On appeal, the court first concluded that Kalshi could maintain an equitable preemption action against the state officials because it was seeking “‘the standard, well-established remedy of an injunction against’” allegedly preempted state law, and the CEA did not displace that cause of action. It next found that the contracts did not satisfy the statutory definition of a swap because an event must be “intrinsically associated with a financial consequence” such that hedging risk or deriving pricing information would be beneficial. Kalshi’s sports-event contracts instead had, at most, “downstream economic consequences,” which were “too attenuated, indirect, and speculative” to qualify. The court also rejected Kalshi’s alternative contention that the CFTC had exclusive jurisdiction over the contracts even if they were not swaps, holding that “involving swaps” modifies the entire statutory series of accounts, agreements, and transactions. Further, assuming the contracts were swaps, the court nevertheless determined that the CEA did not expressly preempt the state laws because its exclusive-jurisdiction provision displaces only “direct regulatory and enforcement authority over licensing and operation of” DCM transactions, while the gambling laws merely incidentally burdened them. It further concluded that field preemption did not apply because the CEA’s savings clauses and express preservation of state authority showed Congress had not occupied the field, and conflict preemption failed because compliance with both regimes was possible and the state laws did not obstruct Congress’s objectives. Thus, Kalshi failed to establish a likelihood of success on the merits. Affirmed in the Ohio case, vacated in the Tennessee case, and remanded.
Arbitration in employment disputes; Federal Arbitration Act (FAA); Whistleblowers’ Protection Act (WPA); Adhesion contract; Unconscionability; Rayford v American House Roseville I LLC; Enforceability of arbitration provision; Johnson v Best Buy Co Inc (On Remand); Fair Treatment Process (FTP)
The court held that the Michigan Supreme Court’s decision in Rayford did not alter its prior conclusion that plaintiffs’ employment claims were subject to enforceable arbitration agreements under defendants’ FTP. Plaintiffs, former DMC employees, asserted WPA, wrongful-discharge, and related claims after their employment was terminated during the COVID-19 pandemic. Each had agreed to the FTP, which required final and binding arbitration of employment-related disputes. The court previously reversed the trial court’s refusal to compel arbitration, but the Supreme Court vacated that judgment and remanded for reconsideration in light of Rayford. On appeal, the court held that Rayford did not require a different result because “the issue presented did not involve the reasonableness of a shortened limitations period, but rather the application of an arbitration provision.” It further held that the published decision in Johnson controlled the arbitration question, explaining that “principles relating to adhesion and form contracts could nonetheless result in a reasonable agreement” where the arbitration provision was mutual, used standard arbitration rules, and identified the claims subject to arbitration. Applying Johnson, the court concluded that the FTP “involved standard arbitration rules, applied to all parties, and addressed the provision language to determine the claims included, indicating it remained enforceable.” Reversed and remanded.
Negligence; Causation; Speculation; Skinner v Square D Co; Mere possibility; Powell-Murphy v Revitalizing Auto Cmtys Envtl Response Trust; Intentional interference with a business relationship; Johnson v Michigan Minority Purchasing Council; Whether administrative determinations were inadmissible hearsay; Distinguishing Swartz v Dow Chem Co; Registered Nurse (RN); Nurse Practitioner (NP); Centers for Medicare & Medicaid Services (CMS); Administrative law judge (ALJ); Department of Health & Human Services’ Departmental Appeals Board (DAB)
Holding that plaintiff failed to establish a genuine issue of material fact on causation, the court affirmed summary disposition for defendant on her negligence and intentional interference with a business relationship claims. Plaintiff is an RN and NP. After she began working for defendant as an NP, it submitted her “application for Medicare and Medicaid billing privileges on her behalf” and, pursuant to its policy, “used its administrative address as the mailing address for Medicare correspondence addressed to” her. The case arose from the revocation of her Medicare billing privileges and 10-year bar on her reenrollment. She asserted negligence and intentional interference with a business relationship claims for defendant’s failure to promptly forward letters related to a medical records request from a CMS contractor. The court concluded that while she offered “evidence that she would have taken prompt action if defendant had timely forwarded the records request to her, there is no evidence to show anything beyond, at very most, a ‘mere possibility’ that her proposed actions would have resulted in a different outcome.” It found that the record lacked “direct or circumstantial evidence from which a jury could reasonably infer that, had plaintiff taken any of the actions she has identified, she ‘more likely than not’ would have retained her billing privileges or not been barred from reenrollment for 10 years.” The court noted that “CMS, the ALJ, and the DAB all interpreted the pertinent federal regulations as imposing an independent recordkeeping duty on plaintiff. [She] consistently admitted during the administrative proceedings, and has never disputed, that she did not keep her own records[.]” CMS, the ALJ, and the DAB all “concluded that her admitted failure to keep her own records regarding the patients at issue violated those legal obligations and warranted revocation of her privileges and” the 10-year bar. The court also rejected her argument that the administrative determinations were inadmissible hearsay and the trial court erred in relying on them. It found her reliance on Swartz misplaced. Further, the factual findings in those determinations reflected her admissions “that she did not independently keep her own records[,]” which were nonhearsay under MRE 801(d)(2). Affirmed.