Justia Contracts Opinion SummariesArticles Posted in US Court of Appeals for the Sixth Circuit
Solo v. United Parcel Service Co.
Plaintiffs purchased liability insurance for packages shipped through UPS before December 30, 2013. The price of that insurance was set by a contract that stated that there is no additional charge for the first $100 of coverage whether or not a shipper purchases additional declared value coverage. When Plaintiffs shipped their packages, they were charged $0.85 for each hundred-dollar increment, including the first. Plaintiffs sued UPS on behalf of a proposed class. UPS argued that the controlling phrase was “total value declared” and that “total” value necessarily includes the first $100. In moving for dismissal, UPS stated that it “reserves its right to move to compel arbitration and does not by this motion in any way waive this contractual right.” UPS referenced an arbitration clause found in an amended contract that became effective December 30, 2013, after the shipments at issue were mailed. The Sixth Circuit reversed the dismissal of the suit, relying on the complaint’s allegations that UPS routinely credits customers who complain about the overcharge and “acknowledges the validity of Solo’s reading of the contractual provision.” On remand, UPS raised the obligation to arbitrate as its first affirmative defense. After discovery, UPS moved to compel arbitration. The district court denied the motion on the basis of waiver. The Sixth Circuit affirmed. The Amended UPS Agreement did not retroactively apply to the transactions at issue and, in any event, UPS waived its right to arbitrate. View "Solo v. United Parcel Service Co." on Justia Law
Faber v. Ciox Health, LLC
Three out of every five hospitals use Ciox, a medical records provider, which processed 4.3 million pages per day in 2018. Ciox is subject to the 1996 Health Insurance Portability and Accountability Act (HIPAA), 110 Stat. 1936. Department of Health and Human Service fee-limit provisions prohibit Ciox from charging patients more than “reasonable, cost-based fee[s]” for their records. Tennessee’s Medical Records Act (TMRA), prevents hospitals from charging patients more than the “reasonable costs for copying and the actual costs of mailing [their] records.” The named Plaintiffs worked with law firms to request their medical records from Tennessee hospitals. Ciox serviced those requests. Plaintiffs filed a class action, accusing Ciox of charging them more than what HIPAA regulations and TMRA allow. HIPAA does not authorize a private cause of action, so the Plaintiffs cited common-law causes of action: negligence, negligence per se, unjust enrichment, and breach of implied-in-law contract. The district court dismissed the TMRA claim but granted class certification and later granted Ciox summary judgment The Sixth Circuit affirmed. Tennessee's common law is no substitute for the private right of action that Congress refused to create in HIPAA. TMRA’s fee limits unambiguously do not apply to medical-records providers. Plaintiffs cannot prove the existence of any common-law duty or legal contract. Because the court did not send notice to absentee class members, the decision binds only the named Plaintiffs. View "Faber v. Ciox Health, LLC" on Justia Law
McGee v. Armstrong
Plaintiff, a management employee of the Summit County Board of Developmental Disabilities, worked under renewable one-year agreements that contained broad arbitration provisions. When Plaintiff joined the Ohio Army National Guard in 2008, his contract provided for “military leave in accordance with Board Policy.” Thereafter, there were several disputes about his entitlement military leave at full pay. Plaintiff refused to sign a proposed 2011–12 contract. Plaintiff filed his first complaint in 2011. In April 2012, shortly after returning from military leave, the Board delivered to Plaintiff a pre-disciplinary hearing notice. The Board subsequently notified Plaintiff of his termination. Plaintiff filed another complaint, alleging wrongful termination of employment, breaches of the employment contract, and discrimination and retaliation based on his military status. The district court granted Defendants’ motion to compel arbitration, excluding two breach of contract claims. An arbitrator determined that all of the claims identified as possibly subject to arbitration were arbitrable, and granted the Defendants summary judgment. The court granted Defendants summary judgment regarding Plaintiff’s breach of contract claims. The Sixth Circuit affirmed. The contract provided that the arbitrators could decide questions of arbitrability and, under Ohio law, the arbitrators did not exceed their powers by entering a decision on Defendants’ motion for summary judgment. Plaintiff failed to show a breach of his contract with respect to military leave. View "McGee v. Armstrong" on Justia Law
Evoqua Water Technologies, LLC v. M.W. Watermark, LLC
The parties manufacture and sell equipment that removes water from industrial waste. Gethin founded Watermark's predecessor, “J-Parts,” after leaving his position at JWI. JWI sued Gethin and J-Parts for false designation of origin, trademark dilution, trademark infringement, unfair competition, unjust enrichment, misappropriation of trade secrets, breach of fiduciary duties, breach of contract, and conversion. The parties settled. A stipulated final judgment permanently enjoined Watermark and Gethin and “their principals, agents, servants, employees, attorneys, successors and assigns” from using JWI’s trademarks and from “using, disclosing, or disseminating” JWI’s proprietary information. Evoqua eventually acquired JWI’s business and trade secrets, technical and business information and data, inventions, experience and expertise, other than software and patents, and JWI’s rights and obligations under its contracts, its trademarks, and its interest in litigation. Evoqua discontinued the J-MATE® product line. Watermark announced that it was releasing a sludge dryer product. Evoqua planned to reintroduce J-MATE® and expressed concerns that Watermark was violating the consent judgment and improperly using Evoqua’s trademarks. Evoqua sued, asserting copyright, trademark, and false-advertising claims and seeking to enforce the 2003 consent judgment. The district court held that the consent judgment was not assignable, so Evoqua lacked standing to enforce it and that the sales agreement unambiguously did not transfer copyrights. A jury rejected Evoqua’s false-advertising claim but found Watermark liable for trademark infringement. The Sixth Circuit vacated in part. The consent judgment is assignable and the sales agreement is ambiguous regarding copyrights. View "Evoqua Water Technologies, LLC v. M.W. Watermark, LLC" on Justia Law
Bisig v. Time Warner Cable
Plaintiffs worked as multi-dwelling unit sales representatives for Insight, a Louisville cable, internet, and phone services provider. In 2011, Time Warner announced it was acquiring Insight. Plaintiffs claim that Time Warner induced them to stay in their jobs although developments at the company would have otherwise caused them to leave. Time Warner allegedly promised them that they would keep their positions and receive better pay. Time Warner acquired Insight in 2012, and allegedly reiterated its promises at meetings. Plaintiffs claim they were shocked to learn in October 2013 that their workforce was being cut in half and that they would need to reapply if they wished to keep their positions. Time Warner argued that Plaintiffs electronically acknowledged and accepted three different at-will employment disclaimers on or before the acquisition date and that, at an August 2013 meeting, Time Warner provided each Plaintiff a copy of a plan that overhauled how they would earn commissions. Plaintiffs each resigned and filed suit, alleging fraud, negligent misrepresentation, and promissory estoppel. The court excluded certain documents that Time Warner allegedly failed to timely disclose, including job offers and electronically-acknowledged at-will disclaimers. The court awarded Plaintiffs attorneys’ fees and costs related to the motion but granted Time Warner summary judgment. The Sixth Circuit affirmed the summary judgment and reversed the sanctions. A party may not rely on oral representations that conflict with contrary written disclaimers that the complaining party earlier specifically acknowledged in writing. View "Bisig v. Time Warner Cable" on Justia Law
Logan v. MGM Grand Detroit Casino
Logan worked as a cook for MGM. As part of her job application, she agreed to a six-month limitation period to bring any lawsuit against her employer. After leaving the job, she sued MGM under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e, alleging employment discrimination. Her former employer asserted a statute of limitations defense. Although Logan arguably brought her claim within the Title VII statutory period, she waited longer than the limitation period provided in her employment application. The district court granted MGM summary judgment. The Sixth Circuit reversed. The contractual limitation period cannot supersede the statutory limitation period for bringing suit under Title VII. The Title VII limitation period is part of an elaborate pre-suit process that must be followed before any litigation may commence. Contractual alteration of this process abrogates substantive rights and contravenes Congress’s uniform nationwide legal regime for Title VII lawsuits. View "Logan v. MGM Grand Detroit Casino" on Justia Law
United States v. Board of County Commissioners of Hamilton County
In 1968, the Hamilton County, Ohio Board of County Commissioners and Cincinnati consolidated their sewer districts into a single sewer system and entered an agreement providing that the city would manage the sewer system’s operations, subject to County oversight, for 50 years. After the city indicated that it planned to unilaterally withdraw from the agreement in 2018, the Board sought judicial intervention. The district court found that the city’s withdrawal would interfere with environmental remediation projects that the city and Board had committed to implement under a 2004 consent decree. The court temporarily extended the term of the 1968 agreement, enjoining the city’s withdrawal pursuant to the court’s inherent power to enforce consent decrees. The Sixth Circuit affirmed. The district court did not abuse its discretion in granting the temporary injunction because doing so was necessary to enforce the terms and objectives of the 2004 consent decree. District courts possess broad authority to enforce the terms of consent decrees, even where doing so requires interfering with municipal prerogatives or commitments. View "United States v. Board of County Commissioners of Hamilton County" on Justia Law
Zehentbauer Family Land, LP v. Chesapeake Exploration, L.L.C.
The defendants, exploration and production companies, contracted with landowners (plaintiffs) to drill for oil and gas on leased properties in Ohio’s Utica Shale Formation between 2010-2012. The agreements provide for royalty payments to the plaintiffs based on the gross proceeds received by the defendants from the sale of each well’s oil and gas production. The defendants sell the oil and gas extracted from the leased properties to “midstream” companies affiliated with the defendants. To calculate the price that an unaffiliated entity would have presumptively paid for the oil and gas, the defendants use the “netback method.” The plaintiffs claim the defendants underpaid their royalties because the netback method does not accurately approximate an arm’s-length transaction price, and improperly deducts post-production costs from the price. The district court granted class certification under FRCP 23(b)(3). The Sixth Circuit affirmed. While the plaintiffs have not met their burden of showing that common issues predominate with respect to a theory that the defendants sold oil and gas to midstream affiliates at below-market prices, the plaintiffs no longer pursued that theory at the class-certification stage. The plaintiffs satisfy the requirements of Rule 23(b)(3) with their liability theory based on the defendants’ deductions of post-production costs. View "Zehentbauer Family Land, LP v. Chesapeake Exploration, L.L.C." on Justia Law
GGNSC Louisville Hillcreek v. Estate of Bramer
Robert was admitted to a nursing home multiple times. During his final stay, he fell out of bed, sustained a head injury, and later died. His estate sued in state court, alleging negligence, negligence per se, violations of Kentucky’s Residents’ Rights Act, KRS 216.515(26), corporate negligence, medical negligence, wrongful death, and loss of consortium. The nursing home sought to enforce an arbitration agreement in federal court. The district court held that no valid agreement covering the final visit existed. An Agreement dated January 5, 2015 displays a mark of some kind in the “Signature of Resident” block, but it is difficult to read. Bramer’s estate alleges that this scrawl is a forgery; Robert's widow stated in an affidavit that neither she nor Robert signed that form. On an Agreement dated January 26, 2015, the widow signed in the “Signature of Resident” block. The Alternative Dispute Resolution Agreements are identical, bind successors and assigns, and require arbitration of a wide range of disputes. They purport to remain in effect through discharge and subsequent readmission. Although signing the Agreement was not a condition of admission, it was presented as part of the admissions packet. The estate presented evidence that the staff implied that signing the Agreement was required. The Sixth Circuit affirmed. By requesting a second agreement on January 26, the nursing home effectively abandoned the first agreement. Lacking Robert’s consent, there was no valid agreement to arbitrate. View "GGNSC Louisville Hillcreek v. Estate of Bramer" on Justia Law
Knight Capital Partners Corp. v. Henkel AG & Co.
KCP, the plaintiff, had hoped to act as a middleman in a potential distribution deal for a novel cleaning product and targeted Henkel, a large consumer products company as a potential distributor. KCP and Henkel entered into a non-disclosure agreement (NDA) to aid in the negotiations of a distribution deal. KCP provided Henkel with confidential information about the product. Following a year of exchanging information and engaging in negotiations, the NDA lapsed, and no deal was consummated. KCP asserts that Henkel’s parent company, Henkel KGaA, used confidential information it acquired through the NDA to develop the product on its own and also interfered with the potential distribution deal. The district court granted summary judgment in favor of KGaA. As to a breach of contract claim, the court found that KGaA was not a party to the NDA and could not be liable for its breach. As to a tortious interference claim, the court found that KGaA is the parent company of Henkel, so the parent-subsidiary privilege immunizes it from a tortious interference claim involving its subsidiary; the court found that the narrow “improper motive” exception to that privilege did not apply. The Sixth Circuit affirmed summary judgment in favor of KGaA, KCP has not presented sufficient evidence of any improper motive or means to pierce the parent-subsidiary privilege. View "Knight Capital Partners Corp. v. Henkel AG & Co." on Justia Law