The Sixth Circuit’s Business Docket: The Year in Review

September 8, 2011

Squire Sanders Presenters

Moderator: Pierre H. Bergeron, partner and chair of Squire Sanders’ Appellate & Supreme Court Practice J. Philip Calabrese, partner, former law clerk to Chief Judge Alice Batchelder Amy C. Hocevar, senior associate, former law clerk to Judge Deborah Cook

Special Guest Presenter Andrew S. Pollis, Assistant Professor of Law, Case Western University School of Law

Agenda

2:30 – 3 p.m. Registration

3 – 3:10 p.m. Introduction and Overview by Pierre Bergeron

3:10 – 4 p.m. Moderated Panelist Discussion and Q&A

The panel will focus its discussion around:

• Daubert Rulings and the Future of Expert Testimony in the Sixth Circuit

• Key Business Concerns: Large Jury Verdicts, Punitive Damages and Class Actions

• High Profile Rulings on Health Care Reform and Affirmative Action

• Has the Sixth Circuit Made it Easier to Dismiss Complaints?

• The Sixth Circuit’s Reputation

Recommended Reading

The Squire Sanders Sixth Circuit Appellate Blog fosters discussion on news about and opinions issued by the United States Court of Appeals for the Sixth Circuit with an emphasis on cases pertaining to business interests.

The following blog posts address key points of cases pertinent to our webinar discussion:

Daubert Rulings and the Future of Expert Testimony in the Sixth Circuit

• Divided Daubert Decision Could Have Wide-Reaching Repercussions

• Will the Court Review Recent Daubert Decision En Banc?

• Pluck v. BP Oil Pipeline Co.: The Sixth Circuit Continues to Raise the Bar for Expert Causation Testimony

• The Higher Standard for Expert Causation Testimony Is Here to Stay: The Supreme Court Denies Certiorari in Tamraz v. Lincoln Electric Company

Key Business Concerns: Large Jury Verdicts, Punitive Damages and Class Actions

• Declining Rehearing, Sixth Circuit Lets US$101 Million Verdict Stand

• Class Action Defendants Are Winning on Appeal – Surprising Statistics on Class Actions in the Sixth Circuit

• Reversal Rates in the Sixth Circuit, AKA, the Importance of an Excellent Brief

• The Sixth Circuit’s Recent Treatment of Large Jury Awards

High Profile Rulings on Health Care Reform and Affirmative Action

• Breaking News: Sixth Circuit Upholds Health Care Statute, Becoming the First Appellate Court to Rule on the Constitutionality of the Individual Mandate

• Highlights and Analysis of Yesterday’s Sixth Circuit Oral Argument on President Obama’s Health Care Statute

• Breaking News: Sixth Circuit Strikes Down Michigan Constitutional Amendment on College Admissions

• En Banc Petition Filed in Michigan Affirmative Action Case

Has the Sixth Circuit Made it Easier to Dismiss Complaints?

• Sixth Circuit Examines for the Second Time This Week the Application of Twombly and Iqbal to a Complaint – This Time With a Different Result

• Sixth Circuit Reluctantly Applies Twombly and Iqbal to Uphold Dismissal of Complaint Recognizing That Plaintiff Has No Way of Finding out the Facts in the Hands of Defendants

The Sixth Circuit’s Reputation

• The Supreme Court, Affirming the Sixth Circuit, Simplifies Calculations Under the Speedy Trial Act: United States v. Tinklenberg

• Supreme Court Reverses two Sixth Circuit Decisions

• Is the Sixth Circuit on a “Losing Streak”?

• Overturning the Sixth Circuit, the Supreme Court Rules That Telephone Companies Must Provide Access to Their Competitors at Cost

• US Supreme Court Reversal Rates Continue to Attract Attention

• Supreme Court, in Five-Four Decision, Reverses Sixth Circuit in Criminal Case

• Pillorying the Sixth Circuit: Sensational Claims About “Dysfunction” Make Headlines but How True Are They?

Declining Rehearing, Sixth Circuit Lets $101 Million Verdict Stand: Sixth Circuit Appell... Page 1 of 1

Declining Rehearing, Sixth Circuit Lets $101 Million Verdict Stand Posted by ,. on June 28, 2011

As the Sixth Circuit Appellate Blog , last month a panel of the Sixth Circuit affirmed a $101 million jury award based on a finding of tortious interference with a prospective advantage under Kentucky law. A copy of the panel's ruling can be found (PDF). Defendant- appellant HCP, Inc. , arguing that the panel had incorrectly applied the law as to preclusion and Kentucky law on sufficiency of the evidence, and also as to the decision to remand for a determination on punitive damages.

On June 27, 2011, the panel denied HCP's request for rehearing, and, without dissent, the full Court declined en bane review. In a (PDF) issued the same day, Ventas applauded the Court's decision. According to a by Business Week, perhaps in reaction to this most recent ruling by the Court, shares of Ventas climbed 13 cents to $52.88, while HCP stock fell 5 cents to $36.50. Based on the panel's original order, the matter will now be remanded to the district court for a trial solely to determine whether Ventas should also be awarded punitive damages. Whether HCP will appeal to the U.S. Supreme Court remains to be seen.

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Class Action Defendants Are Winning On Appeal - Surprising Statistics on Class Actions... Page 1 of 2

Class Action Defendants Are Winning On Appeal - Surprising Statistics on Class Actions In The Sixth Circuit Posted by 1; July 12, 2011

We have covered a number of important Sixth Circuit decision on class actions over the past year, including as i, and

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........................................................ .................__I_.._.._..._ -._............................................................................_.............. ..........1.................... __................... Though a small percentage of the court's docket, such cases often have an outsize

effect on both precedent within the circuit and on parties looking at settlement. We have briefly reviewed the Court's decisions dealing with important issues in class litigation since January 2009. The statistics are summarized below.

The big surprise was that defendants have an impressive success rate as appellants in the Sixth Circuit, obtaining a reversal in 85% of their appeals. By contrast, plaintiff= appellants obtained reversals in just 18% success of their appeals, not much better than the for all appellants in the Sixth Circuit. These percentages include a number of decisions regarding class certification. Not surprisingly, plaintiffs appealed three times as often as defendants. Given the high stakes in class litigation, defendants often feel intense pressure to settle after an adverse decision in the district court. But given the current success rates, defendants with compelling arguments should take a second look at an appeal.

Overall, one-third of the Sixth Circuit's class action decisions reversed the district court in whole or in part. The circuit is currently on a tear of reversals — five of the last eight decisions in our study were reversed at least in part. Though we did not consider petitions under Rule 23(f), Professor Barry Sullivan has found that the Sixth Circuit granted 66% of defendants' petitions for interlocutory appeal of class certification decision under Rule 23(f). This again suggests that class action defendants with good arguments may benefit from an aggressive appellate strategy in the Sixth Circuit.

More after the jump.

Given the importance of these cases, it is not surprising that nearly a third of the class action decisions had a dissenting or concurring opinion. However, we did not see any significant correlations between judges, political affiliation, and outcomes, though the sample was probably too small to show anything but a large effect. Much of the above research was prepared by Carrie Jantsch, who is currently working as a summer associate at SSD.

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Sixth Circuit Reluctantly Applies Twombly and Igbal to Uphold Dismissal of Complaint

Page 1 of 2

11 I ' ! all is Iqbal to Uphold Dismissal of Complaint Recognizing that Plaintiff Has No Way of Finding out the Facts in the Hands of Defendants Posted by ̀ on June 21, 2011

In what appears to be a reluctant decision mandated by Supreme Court precedent, Judge Merritt, joined by Judges Clay and Griffin, recognize the insurmountable obstacles that a Plaintiff may face in - alleging claims to survive a motion to dismiss.

In New Albany Tractor, Inc. v. Louisville Tractor, Inc., No. 10-5100 (6th Cir. June 21, 2011) (/'` . ::: ), the Plaintiff alleged violations of the , Robinson-Pathan Act, which prohibits a seller from selling the same product to two different buyers at different prices. Plaintiffs claims were based on a discriminatory pricing scheme by the two Defendants and relied on the "indirect purchaser doctrine," to allege that one Defendant was a "dummy" or "strawman" operation that was controlled by the other. The district court for the Western District of Kentucky dismissed Plaintiffs Robinson-Patman claim, finding insufficient Plaintiffs allegation that one Defendant was a "dummy" operation because Plaintiff did not allege sufficient facts to indicate that one Defendant set or controlled the other Defendant's resale price.

In upholding the district court's dismissal of the Complaint, the Sixth Circuit stated that " [t]he plaintiff apparently can no longer obtain the factual detail necessary because the language of Iqbal specifically directs that no discovery may be conducted in cases such as this, even when the information.., is solely within the purview of the defendant or a third party...." Demonstrating an apparent reluctance to uphold the dismissal of the Complaint, the Court went out of its way to note that it was bound by the Iqbal decision of the Supreme Court ( F). The Panel also recognized that in the pre-Twombly ( 4 ) and pre-Iqbal era, courts would probably have allowed this case to proceed so that Plaintiff could conduct discovery in order to gather the pricing information that was solely retained within the accounting system of Defendants. Adding to Plaintiffs defeat, the Sixth Circuit affirmed the dismissal with prejudice because even though Plaintiff had additional time to come up with more specific evidence, without discovery from Defendants it was unable to do so.

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Divided Daubert Decision Could Have Wide-Reaching Repercussions : Sixth Circuit App... Page 1 of 2

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Posted by on September 08, 2010

In an end-of-the-summer blockbuster, the Sixth Circuit addressed the "often-elusive line between admissible opinion and inadmissible speculation under Rule 702." The case could have significant ramifications for products liability cases, particularly in the MDL setting. Not only does this decision overturn ajury verdict of $20.5 million, but it also signals an uphill battle for plaintiffs seeking to rely upon expert testimony to establish causation where the science is unsettled.

In (6th Cir., Case No. 08-4015/4016, Sept. 9, 2010) (PDF), the Court held that a physician's testimony regarding the cause of a disease must be tested under Daubert principles as stringently as the physician's testimony regarding the diagnosis of the disease. The parties in Tamraz generally agreed that the plaintiff suffered from Parkinson's Disease, but they did not agree on whether the disease was caused by exposure to manganese during the plaintiffs career as a welder.

The majority reversed the district court's admission of the physician's testimony because some steps in the analysis were supported only by purely theoretical studies and others by unsupported analogies or suppositions. While the Court acknowledged that the "working hypothesis" offered by the expert was "plausible" and "may even be right," it did not survive Daubert scrutiny because of the "speculative jumps" inherent in the expert's opinion. What science may view as a "useful but untested hypothesis," the Sixth Circuit held the law should "generally treat as inadmissible speculation." The Court expressed concern about "allowing the law to get ahead of science," a result that "would destroy jobs and stifle innovation unnecessarily."

Judge Martin's dissent, which may be the first opinion in the Federal Reporter to cite the TV show " (see fn. 1), criticized the "majority's newly-minted requirement that scientific testimony must

be without flaws or gaps and have no unprovable inferences or assumptions" as inconsistent with the scientific process. Judge Martin also hinted at a circuit split, arguing that the Second Circuit would treat such matters as questions of weight, rather than admissibility.

Judge Sutton and District Court Judge Reeves (sitting by designation) were in the majority. Judge Martin dissented.

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Will the Court Review Recent Daubert Decision En Banc? : Sixth Circuit Appellate Blog ... Page I of l

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Posted by ; on October 05, 2010

Counsel for plaintiffs in the (pdf) has filed a for en bane review of the Court's recent reversal of his $20.5 million verdict. In their petition, the plaintiffs claim that the majority (1) did not properly apply an abuse of discretion standard to the trial judge's decision to admit the expert testimony at issue, (2) imposed overly-stringent standards given the expert's role as a treating physician, and (3) improperly applied the Court's harmless error doctrine by assuming that the evidence affected the outcome.

As we by a 2-1 vote, the Sixth Circuit reversed the trial court's admission of the plaint ills' expert on the grounds that his opinion did not survive Daubert scrutiny. Whether the Court accepts the case for en bane review could have a significant impact not only on the welding-fume cases but also on other toxic tort cases.

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Pluck v. BP Oil Pipeline Co.: The Sixth Circuit Continues to Raise the Bar for Expert Can... Page 1 of 2

Pluck v. BP Oil Pipeline Co.: The Sixth Circuit Continues to Raise the Bar for Expert Causation Testimony Posted by •. .:y on May 13, 2011

In Pluck v. 13P Oil Pipeline Co. (09-4572), the Sixth Circuit built on its decision in Tamraz v. Lincoln Elec. Co.,620 F. 3 d 665 (6th Cir. 2010) ( ), and reiterated that a high standard governs expert causation testimony in toxic tort litigation. Pluck affirmed the district court's exclusion of a plaintiffs specific causation expert under Dauber!. It emphasizes that causation must be supported by quantifiable and reliable data, both when pointing to the cause of the illness and when ruling out other causes.

The Plaintiff argued that gasoline spills from an underground pipeline owned by BP from 1946-1962 resulted in benzene contamination that caused her Non-Hodgkins lymphoma in 2002. The Plaintiff moved into the area in 1996 and drank from a well with small levels of benzene contamination for a few months before BP installed a new well that remained free of benzene until 2003. When benzene was again detected, a carbon filtration system was installed to capture it. The levels of the chemical were at all times well below the EPA's maximum level of benzene for drinking water.

The Plaintiffs expert claimed that Plaintiff had been "heavily" exposed to benzene, and that the exposure had caused the disease. The Sixth Circuit affirmed the district court's rejection of those claims under Dauberi, expanding on its decision in Tamraz that the expert must both "reliably rule in benzene as the cause" and "rule out alternative causes of her illness."

The Court first noted that the expert did not have any reliable data to support his conclusion of heavy benzene exposure, and that benzene exposure in the record had always been within the EPA limitations. Without quantifiable exposure data, the expert's causation claim was nothing more than "speculation and conjecture." Second, the Court found that the expert had not adequately accounted for benzene exposure from the Plaintiffs extensive smoking habit. The expert's failure to quantify the Plaintiffs exposure to benzene from smoking (and the effect it might have on her disease) rendered his opinion unreliable.

The Sixth Circuit also took a hard line with the expert's attempt to change his methodology after the Daubert challenge through a supplemental declaration. The Court held that the district court correctly excluded the declaration as "a transparent attempt to reopen the Daubert inquiry after the weaknesses in the expert's prior testimony have been revealed."

i;;...,. ........ ..of our Cleveland office handled the case for BP.

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The Higher Standard For Expert Causation Testimony Is Here To Stay: The Supreme Cou... Page 1 of 1

Posted by ' ............. on May 19, 2011

We have :. ' . on the welding-rod case Tamraz v. Lincoln Electric Company, and the new, higher standard for expert causation testimony under Daubers. We reported that on the plaitniff s cert petition . ... The Supreme Court has now denied the plaintiff's petition for certiorari. The case, which had resulted in a $20.5 million verdict, will go back for retrial. The opinion, however, will continue to hold expert witnesses in the Sixth Circuit to a :;.~ :: for causation in toxic tort cases.

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Reversal Rates In The Sixth Circuit, AKA. The Importance Of An Excellent Brief: Sixth ... Page 1 of I

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Posted by on November 04, 2010

It is generally understood that federal appellate courts do not often reverse or remand, but the actual statistics are not as well-known. The yearly put out by the Administrative Office, gives the statistics for every circuit. In 2009, the Sixth Circuit decided 590 appeals in private civil appeals on the merits of the case (this does not include criminal, bankruptcy, administrative, or cases involving the government). Of those cases decided on the merits, 85% resulted in a win for the appellee, either affirmance (83%) or dismissal (2%) — only 15% were reversed or remanded. (Another 550 private civil cases were also dismissed for lack of jurisdiction or other procedural reasons, showing there is still considerable confusion about what orders and judgments can be appealed.)

The Sixth Circuit's numbers are just under the 16% average for merits decisions in the federal courts of appeal. The Ninth Circuit has the highest reversal rate for private civil appellants, at 18%, while the D.C. Circuit has by far the lowest rate, at 7%. Most circuits are between 13-16%.

Because of those long odds, appeals must be carefully and passionately written and argued. Judge Aldisert of the Third Circuit that "more than ever, the appellant's brief takes on a vital and decisive role." The brief must immediately convince the judge that the case presents a serious reversible error - that yours is the one appeal on the judge's desk that requires reversal. Clerking on the Third Circuit, I learned that many judges felt that the great majority of appeals did not come anywhere close to presenting reversible error. An appellant's brief cannot just show where the district court went wrong — it must cry out for reversal.

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U.S. SUPREME COURT REVERSAL RATES CONTINUE TO ATTRACT ATTENTIO... Page 1 of I

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Posted by ``' on July 22, 2011

We have previously reported about the Sixth Circuit's recent "• the U.S. Supreme Court as well as subsequent by the Court. The broader issue of reversal rates by the U.S. Supreme Court was the subject of a recent by the Los Angeles Times. While the article focused on the Ninth Circuit and its well-publicized reversal rate, some of the numbers from the past term are instructive. The article notes that the Supreme Court generally reverses about 75% of the cases that it hears, and over the past term the Sixth Circuit led the reversal percentage with 83%, followed by the Fifth Circuit with 80%, the Ninth with 79%, and the Second with 75%. What differentiates the Ninth from those other four circuits is a substantially higher number of rulings that were reviewed by the Court. The article also focused on the notion that the "liberal" judges on the Ninth Circuit are most often the targets of reversal by the Supreme Court. As we previously discussed, it is far too simplistic to use such a portrayal at the Sixth Circuit. Many of the panels that were reversed by the Supreme Court include some or a majority of Republican appointees, and many of the panels were "bipartisan." That suggests that the reversals are not simply the product of ideological disagreement, at least when it comes to the Sixth Circuit. And indeed, if the overall reversal rate is around 75%, it suggests that the Court is reversing decisions across the ideological spectrum. And this lends support to the notion that the well-publicized "losing streak" by the Sixth Circuit is simply not statistically significant. Indeed, the L.A. Times article quotes U.C. Irvine Dean Erwin Chemerinsky (who happens to give a great discussion each year at the ' `j'~ < .vlcial ...................._.

............. on the past term by the U.S. Supreme Court), who remarked that "reversal rates have no meaning whatsoever." It calls to mind a quote by one of my favorite all-time justices, Robert Jackson: We are not final because we are infallible, but we are infallible only because we are final."

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Pillorying the Sixth Circuit: Sensational Claims About "Dysfunction" Make Headlines Bu... Page 1 of 2

Posted by ' on May 24, 2011

In an article about an that cleared a bankruptcy judge of misconduct for membership in an exclusive country club alleged to discriminate, Adam Liptak of the New York Times ....`. the Sixth Circuit is an "odd institution" that is "surely the most dysfunctional federal appeals court in the nation." An article in the ABA Journal echoed the point, if the Sixth Circuit is "the Nation's Most Dysfunctional Appeals Court." As a frequent practicioner before the Sixth Circuit (and as an adjunct teaching a law school clinic focusing on that court), I feel that sweeping accusation deserves further scrutiny.

Beyond his disagreement with the ethics decision itself, which I will not address, the genesis of Mr. Liptak's observation is doubtless the public airing of private disagreements between some Sixth Circuit judges in recent years. The most notable disagreements concerned......:.: .... and In

where certain judges accused other judges of ignoring the circuit's procedures to influence the results in each case. Some have that ideologically-driven review in death penalty cases may be the catalyst for the circuit's 0-15 record before the Supreme Court over the past few years.

But is there any empirical evidence that the Sixth Circuit is actually dysfunctional as an institution? This post will look at Supreme Court reversal rates, reversal rates for district courts, productivity per judge, the influence of the circuit, the number of dissenting opinions, and the lag time for decisions.

The Sixth Circuit's current a=.._ before the Supreme Court is certainly unfortunate. But that was almost certainly a statistical fluke. From 2004 to 2007 — immediately after the events in Grutter and Byrd — the circuit's success rate in the Supreme Court was an above-average 42%.

The rate that the Sixth Circuit reverses district courts, which reflects the quality of the guidance it gives to those courts, is .... ... Productivity per judge, as measured by the number of signed opinions, is also close to the of 53.

Another way to evaluate a federal court of appeals is to see how often other circuits cite its opinions. Using this data, Professors Lawrence Lessig and William Landes have i... 3 that the Sixth Circuit is tenth (out of the thirteen federal courts of appeal) in its overall influence, and ninth in the average quality of its opinions. These numbers indicate that the Sixth Circuit is within the mainstream of its sister circuits in terms of influence on the overall development of the law.

The Sixth Circuit consistently has a high percentage of dissenting opinions, but this phenomenon dates back well before Grutter and Byrd. Professors Lee Epstein, William Landes and Richard A.

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Pillorying the Sixth Circuit: Sensational Claims About "Dysfunction" Make Headlines Bu... Page 2 of 2

Posner that the dissent rate averaged about 2.8% for all circuits from 1990-2006, with the Sixth Circuit the highest at 4.8% and the Eleventh Circuit the lowest at 1.1%. (The D.C. and Ninth Circuits also tend to have much higher dissent rates closer to the Sixth Circuit's rate). Another study found that the increased dissent rate in the Sixth Circuit was not confined to ideologically-charged cases, but extended into contract interpretation cases that are unlikely to provoke partisan-influenced dissents.

Nor is it clear that a larger number of dissents is a bad thing. It was the strong dissents to the ethics opinion that drew attention to the ruling. Indeed, the media attention the circuit's decisions receive are often only possible because of the judges' willingness to actively dissent. The percentage of dissents in all circuits has diminished as the caseload has increased, indicating that judges might write more dissents if they were willing to spare the time. So the high number of dissents in the Sixth Circuit does take up additional resources, perhaps contributing to the Sixth Circuit's long wait times for decisions — which is currently four months longer than average (only the Ninth Circuit is worse).

The Sixth Circuit is certainly not without its problems, but this quick review of the data suggests that singling the circuit out for criticism as "dysfunctional" is unfair.

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BREAKING NEWS: SIXTH CIRCUIT UPHOLDS HEALTH CARE STATUTE, BECO... Page 1 of 2

BREAKING NEWS: SIXTH CIRCUIT UPHOLDS HEALTH CARE STATUTE, PE MING THE FIRST APPELLATE COURT TO RULE ON THE

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Posted by fl on June 29, 2011

If you have been following my blog posts for the last half year, you know I have been predicting that the Sixth Circuit was ..... ................. _.... :_.. .. in the country to rule on the constitutional challenge to the mandate requiring individuals to purchase health insurance under the recently enacted 1 I also predicted

;.._ in my interview with the .......'_.!._`.............:: radio network that an opinion would be forthcoming by midsummer. Both of these predictions proved accurate today.

The Sixth Circuit earlier today issued a whopping 64 page opinion (just 28 days after oral argument) in which it upheld the health care statute as a constitutional exercise of Congress's commerce power. See

...................:... Thomas More Law Center, et al. v. Obama, et al. (Sixth Circuit, Case No. 10-2388).

The Sixth Circuit has become the first Circuit Court in the country to rule on the health care statute's constitutionality, and its analysis is sure to reverberate in other Circuit Courts still addressing the same issue, including the Fourth Circuit (which heard oral arguments on May 10, 2011), and the Eleventh Circuit (which heard ~::. ° : ~::-: _ : on June 8, 2011). See Commonwealth of ' Virginia, et al. v. Sebelius (Fourth Circuit, Case No. 11-1057); State of Florida, et al. v. United States Department of Health and Human Services, et al. (Eleventh Circuit, Case No. 11-11021).

The Sixth Circuit panel included Sixth Circuit Judges Boyce F. Martin, Jr. and Jeffrey S. Sutton, and United States District Judge James L. Graham (Southern District of Ohio), sitting by designation. All three judges issued separate opinions, and all three agreed that the plaintiffs had standing to bring their claims and that the Anti-Injunction Act did not bar the plaintiffs' action. But that is where the agreement ended.

Only Circuit Judges Martin and Sutton agreed that the individual mandate was a constitutional exercise of Congress's Commerce Clause power. As Judge Martin stated in his opinion, the minimum coverage provision is constitutional because it regulates economic activity with a substantial effect on interstate commerce, and it is an essential part of a broader economic regulatory scheme. Of particular note, Judge Martin knocked down the plaintiff's "activity" vs. "inactivity" distinction under which the plaintiffs had argued that there is not a single controlling case that allows

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BREAKING NEWS: SIXTH CIRCUIT UPHOLDS HEALTH CARE STATUTE, BECO... Page 2 of 2

Congress to stretch its Commerce Clause authority to regulate intrastate inactivity or, in effect, mere "existence" within the borders of the United States. Judge Martin said that "the constitutionality of the minimum coverage provision cannot be resolved with a myopic focus on a malleable label."

Judge Sutton similarly agreed that the Commerce Clause does not contain an action/inaction dichotomy that limits congressional power. First, the relevant text of the Constitution does not contain such a limitation. Second, as Judge Sutton observed, "the promise offered by the action/inaction dichotomy—of establishing a principled and categorical limit on the commerce power—seems unlikely to deliver in practice." In the end, Judge Sutton chose the path of judicial restraint. He recognized that the policy debate over the strengths and weaknesses of the health care statute must be resolved in the political sphere, not by the judiciary acting as a super legislature. As Judge Sutton wrote: "Time assuredly will bring to light the policy strengths and weaknesses of using the individual mandate as part of this national legislation, allowing the peoples' political representatives, rather than their judges, to have the primary say over its utility."

Senior District Judge Graham vehemently dissented. Invoking, among other authorities, The

Federalist No. 78 (Alexander Hamilton), Judge Graham concluded that the individual mandate is "legally stillborn" because it exceeds Congress's power under the Commerce Clause. Judge Graham highlighted that "[i]f the exercise of power is allowed and the [individual] mandate upheld, it is difficult to see what the limits on Congress's Commerce Clause authority would be." According to Judge Graham, the Sixth Circuit's opinion effectively gives Congress a general police power that the Tenth Amendment is supposed to reserve for the states and the people. For Judge Graham, "[a] structural shift of that magnitude can be accomplished legitimately only through constitutional amendment."

The Sixth Circuit's divided opinion in Thomas More Law Center is a fascinating read that touches upon history, federalism, and venerable principles of constitutional law. It will receive extremely close scrutiny given the politically charged atmosphere under which it was decided. And yet, this is just the beginning of the story. Look for the plaintiffs to file a motion for rehearing en bane within the next 14 days. Stay tuned to our blog for the latest.

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Highlights and Analysis of Yesterday's Sixth Circuit Oral Argument on Obama's Health C... Page 1 of 3

Highlights and Analysis of Yesterday's Sixth Circuit Oral Argument on Obama's Health Care Statute

Posted by.:: : ,_~. : :...'.... _ on June 02, 2011

Outside on the downtown streets of Cincinnati yesterday, the city was alive with ....`~. including a spirited by members of the Cincinnati tea party. 'That's because inside

Cincinnati's federal courthouse, in a standing room only courtroom, the Sixth Circuit heard oral argument in the high-profile appeal involving a constitutional challenge to the mandate requiring individuals to purchase health insurance under the recently enactedE : ..::. : ...... _ _. ...._._......._._.

See Thomas More Law Center, et al. 1'. Obania, cal al. (Sixth Circuit, Case No. 10-2388).

In unusual fashion, the oral argument was separated into two segments (motion to dismiss and merits), and it was conducted very informally. As Judge Martin quipped (to the delight of the packed courtroom). "I feel like I'm back in the Jefferson Circuit Court in Louisville, Kentucky. I just love this." (Don't be misled if you listen to the audio from the oral argument. Parties ordinarily should not expect to encounter the same sort of informality during oral argument before the Sixth Circuit.)

For highlights of the parties arguments, continue reading.

The panel first heard arguments on the government's May 27, 2011 . . . `......:. `;~; :: (PDF) seeking to dismiss plaintiffs' appeal based on standing grounds. The mp3 audio lint: to these arguments is available 1 , .° (30 minutes). Acting Solicitor General Neal Katyal argued first for the government. (It is unusual to have the SG argue a case in the Sixth Circuit, but his presence shows the importance of this appeal.) General Katyal contended that one of the plaintiffs recently purchased health insurance and has had it during the pendency of her appeal, and thus she now lacks standing to challenge the health care statute. As a result, the plaintiff cannot show that the individual mandate will cause her any economic injury, much less that such injury is imminent. General Katyal argued that, at a minimum, the case has to be remanded to the district court for additional fact-finding on the standing issue.

Robert Muise, the lawyer for the Thomas More Law Center, countered that the government's arguments ignore that the district court also found that several of the other plaintiffs had established standing in this case, and thus standing was not dependent on one plaintiff alone. Mr. Muise argued that standing exists because the individual mandate imposes a governmental burden on individuals who do not have insurance: `They are feeling economic pressure now because this individual mandate is imposing this requirement on them. This is what all the plaintiffs are presently feeling." In responding to a ripeness inquiry from Judge Sutton, Mr. Muise stated that it is "better to have judicial review now rather than later because this is an exceedingly broad and encompassing statute [and] the

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Highlights and Analysis of Yesterday's Sixth Circuit Oral Argument on Obama's Health C... Page 2 of 3

government needs to know sooner rather than later whether an essential component of it—the individual mandate—is itself constitutional."

Judge Sutton, in particular, was very active during the motion to dismiss arguments, and the panel appeared to struggle with some of the standing issues that had been raised. The overall impression, however, is that the panel will conclude that the plaintiffs have standing, and thus the government's motion to dismiss will be denied.

The panel then turned to the merits of the appeal. Judge Martin began by directing Mr. Muise to address whether the plaintiffs' challenge to the health care statute was precluded by the Anti-Injunction Act, which is a federal law that precludes suits to restrain the collection of any tax. Mr. Muise argued that when Congress passed the health care statute, it did not impose a tax, but instead imposed a penalty pursuant to the Commerce Clause, and thus the Anti-Injunction Act did not apply. General Katyal confirmed that the government was not advancing an Anti-Injunction Act argument.

Turning to the Commerce Clause issue, Mr. Muise began by addressing Judge Martin's inquiry regarding the activity vs inactivity distinction raised in the (PDF). Mr. Muise argued that "there is not a single controlling case that this Court can point to where Congress has had the authority under the Commerce Clause to regulate non-activity." Mr. Muise noted that if Congress seeks to regulate the activity of purchasing, it certainly can do so, but that is not what the health care statute does. As Mr. Muise argued, "They're mandating someone to engage in commerce" and "are effectively regulating inactivity." Mr. Muise contended that Congress can only regulate activity that is economic in nature, which is defined as the consumption, distribution, or production of a commodity. Judge Martin questioned, however, why "economic" activity also does not include the transfer of wealth. Judge Sutton, in turn, asked whether the distinction between activity and inactivity even makes sense when considering the concept of risk "because it is really hard to think of risk as inaction." Mr. Muise responded that "one of the main problems is that there is no constitutionally significant limiting principle that can be applied for this broad power.... There is virtually no limit to Congress' power." Mr. Muise argued that this case transcends health care because to allow Congress to regulate non-activity turns the Constitution on its head, and instead of a federal government with limited and enumerated powers, the federal government will have unlimited authority with police powers properly reserved for the states. Shifting focus, Judge Sutton inquired whether a facial challenge to the health care statute would fail to the extent it is concluded that Congress has the authority to regulate the activities of individuals who already have health insurance Mr. Muise responded by simply stating that if Congress does not have the authority under the Commerce Clause to enact the individual mandate, then the individual application of the statute does not matter because the law is "legally stillborn."

General Katyal began his argument by identifying the three findings made by Congress which he contended provide three independent bases to uphold the health care statute: (1) the minimum coverage requirement regulates commercial and economic activity that substantially affects interstate commerce, (2) the requirement is an essential part of the federal government's broader regulation of the health care market. and (3) the statute will reduce the federal deficit. General Katyal added that these three bases become even weightier when the Court considers the "strong presumption of constitutionality" that applies to all acts of Congress. Judge Martin interjected and asked whether the entire health care statute must be invalidated if the individual mandate is declared unconstitutional given that the statute does not contain a severability clause. (You'll note that, as

Florida District Judge Roger Vinson ruled that "[b]ecause the individual mandate is unconstitutional and not severable, the entire Act must be declared void.") General Katyal responded that the case law recognizes that a severability clause is unnecessary, and thus the entire statute would not need to be invalidated. His main point was that Congress clearly has the power to enact the

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Highlights and Analysis of Yesterday's Sixth Circuit Oral Argument on Obama's Health C... Page 3 of 3

individual mandate in light of the broad principles of "economic practicality" that underlie the commerce power. Judge Sutton questioned, however, about the limits of congressional power, stating that "it is just not proper to make people buy things. That's the real point. It is hard to see this limit." Judge Graham also weighed in to express skepticism over whether Congress can "force someone into the market." General Katyal responded by arguing that the ultimate test is whether Congress is regulating an activity that affects interstate commerce, and here Congress made a specific finding that it does. He contended that the real debate is not whether Congress can regulate "inactivity." Rather, the real question is: "Can Congress regulate in a market in which it knows everyone is participating (that is, the health care market)?" Judge Graham weighed in again and noted that he was having difficulties seeing how there is any limit to the commerce power as General Katyal was defining it given that every human activity ultimately has economic consequences and can be aggregated to have a substantial effect on interstate commerce. Judge Graham inquired about the limits on congressional power and whether Congress could "require someone to purchase a product or service that they do not want." General Katyal responded that there clearly are limits on the commerce power, as recent U.S. Supreme Court cases make clear. He argued that in this case, Congress is not regulating the failure to buy something, but rather is exercising its power to secure financing for something that everyone will need to buy, and thus the health care statute is constitutional.

The overall impression from the oral argument is that Judge Martin favors upholding the individual mandate, Judge Graham is leaning toward striking it down, and Judge Sutton is looking for ways to write a narrow opinion that avoids having to address many of the issues raised. That puts this appeal in the "too close to call" category. Let us know if you agree or disagree. The mp3 audio link to the merits argument is available (65 minutes).

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Breaking News: Sixth Circuit Strikes Down Michigan Constitutional Amendment on Coll... Page 1 of 2

Breaking News: Sixth Circuit Strikes Down Michigan Constitutional Amendment on College Admissions

Posted by ... on July O 1, 2011

A divided panel of the Sixth Circuit today struck down an amendment to the Michigan constitution added by voters in 2006 that prohibited Michigan's public colleges and universities from granting "preferential treatment to[] any individual or group on the basis of race, sex, color, ethnicity, or national origin." In

: . .~ t1 Cir. Nos . 1387 08-1389 08-1534 , 09-11] I) (PDF), the panel majority ruled that the amendment, known more popularly as "Proposal 2", ran afoul of U.S. Supreme Court precedent interpreting the Equal Protection Clause.

Writing for himself and Judge Daughtrey, Judge Cole found that "Proposal 2 unconstitutionally alters Michigan's political structure by impermissibly burdening racial minorities." In dissent, Judge Gibbons argued that the Equal Protection Clause did not clash with Proposal 2, and that Supreme Court precedent had not "require[d]" the use of rece in college admissions but, instead, merely "tolerate[d]" it, leaving Michigan free to prohibit the practice.

Proposal 2 was passed by 58% of Michigan voters, and in 2008 the federal district court in Detroit had found the amendment constitutional. In the immediate aftermath of today's ruling, came swiftly, with opponents of Proposal 2 hailing the decision while supporters of the proposal denounced the ruling as "activist" and predicted reversal of the panel decision as being inconsistent with Supreme Court case law.

The Sixth Circuit Appellate Blog will keep its eye on this case for a possible petition for en bane review.

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En Banc Petition Filed in Michigan Affirmative Action Case : Sixth Circuit Appellate Blo... Page 1 of 2

En Banc Petition Filed in Michigan Affirmative Action Case Posted by on July 29, 2011

As anticipated, Michigan's attorney general today filed a . (PDF) for rehearing en bane in Coalition to Defend Affrrrnative Action, Integration and Immigrant Rights and Fight for Equality by Any Means Net v. Regents of the Univ. of Michigan (6th Cir. Nos. 08-1387, 08-1389, 08-1534, 09-1111). As :................:..:. '.......:... by this blog, on July 1, 2011, Judge Cole, writing for himself and Judge Daughtrcy. struck down in amendment to the Michigan constitution popularly known as "Proposal 2," which was passed by voter referendum in 2006 and which prohibited Michigan's public colleges and universities from granting "preferential treatment to[] any individual or group on the basis of race, sex, color, ethnicity, or national origin." The panel ruled that Proposal 2 ran afoul of U.S. Supreme Court precedent interpreting the Equal Protection Clause. In dissent, Judge Gibbons argued that the Equal Protection Clause presented no obstacle to Proposal 2 and that Supreme Court precedent merely "tolerate[d]" the use of race in college admissions, leaving Michigan free to prohibit the practice.

Michigan's attorney general, g g .now seeks en bane review of the divided panel ecision. In his petition, the attorney general characterizes the issue as follows: "whether a state violates the Equal Protection Clause by prohibiting discrimination based on race or sex" (emphasis in original). In urging the full court to hear the matter, Michigan argues that the panel's ruling opened a circuit split, citing the Ninth Circuit's 1997 upholding the constitutionality of California's Proposition 209, a measure akin to that of Proposal 2. Michigan further claims that the panel decision is at odds with the Sixth Circuit's ... . the preliminary injunction stage of the case at bar when, according to Michigan, "three members of this Court followed [the Ninth Circuit's ruling] and rejected the exact claim the panel majority has now upheld." Finally, Michigan draws the Court's attention to the fact that the panel decision "invalidates a provision of Michigan's Constitution that was ratified by 58% of Michigan's voters," which it observes is "no small matter."

The Sixth Circuit Appellate Blog will keep an eye open for the Court's decision on the petition.

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Sixth Circuit Upholds $101 Million Jury Verdict: Sixth Circuit Appellate Blog : Squire S... Page 1 of 2

Sixth Circuit Upholds $101 Million Jury Verdict Posted by on May 19, 2011

In September 2009, a jury in the Western District of Kentucky found Defendant-Appellant .....i. .:. ("HCP") liable under Kentucky law for tortious interference with a prospective advantage, which claim was advanced by Plaintiff-Appellee . ic, ("Ventas"). Finding that HCP tortious interference caused Ventas to purchase certain assets of the Sunrise Senior Living Real Estate Trust ("Sunrise") at $1.50/unit over the original purchase agreement price that Ventas had earlier offered, the jury concluded that HCP was liable for total compensatory damages in excess of $101.6 million. The district court, however, had ruled against Ventas as a matter of law as to Ventas's punitive damages claim. In .........................I ;.'c(6th Cir., Nos. 09-6385/6413, May 17, 2011) (PDF), the Sixth Circuit affirmed the jury's award of compensatory damages, yet reversed the district court and remanded the matter back for trial on the single issue of punitive damages. This is believed to be one of the largest jury verdicts ever affirmed by the Sixth Circuit.

The matter below concerned a somewhat involved transaction in which Sunrise, a Canadian real estate investment trust, conducted a two-round, confidential auction of its assets in which HCP and Ventas participated. As part of the auction, invitees, including Ventas and HCP, had to sign "standstill agreements" with Sunrise, in which the invitees agreed not to make or announce any bid outside of the auction process for 18 months. In their preliminary bids. HCP offered $16.25/unit, and Ventas offered $13.25/unit. Sunrise invited HCP and Ventas to proceed to the second round, where they were the only invitees participating. Each bidder was required first to enter into an independent agreement with Sunrise Senior Living, Inc. ("SSL"), which managed Sunrise's properties under long-term management contracts. Ventas was able to negotiate an agreement with SSL, but HCP could not. On the day the bids were due, Ventas submitted a bid of $15.00/unit, which Sunrise's Board of Trustees approved that same day, and Sunrise and Ventas entered into a binding purchase agreement, subject only to the approval of two-thirds of Sunrise's voting unitholders, which "seemed to be a foregone conclusion." However, in subsequent weeks, officials from Sunrise and HCP discussed whether the parties could still reach terms. More than a month after Ventas's bid had been accepted and the binding purchase agreement executed, HCP made a conditional bid of $18.00/unit and issued a press release stating the same. The first market day after HCP's announcement, the selling price of Sunrise shares increased from approximately $15.00/unit to approximately $18.00/unit. The parties quickly came to loggerheads over HCP's maneuvering, which culminated in each asking a Canadian court for a declaration regarding the validity of the earlier standstill agreements. That court concluded that the standstill agreements were, in fact, valid and that HCP was not authorized to submit a late bid. HCP then withdrew its offer to purchase Sunrise, and when Sunrise's unitholders began to vote against the sale to Ventas, Ventas was forced to increase its original bid from $15 .00/unit to $16.50/unit. Having done so, Sunrise's unitholders approved the deal -- and Ventas filed suit in U.S. district court against HCP, asserting Kentucky state law claims of tortious interference with contract and tortious interference with a prospective advantage. The district court ruled against Ventas as a

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Sixth Circuit Upholds $101 Million Jury Verdict : Sixth Circuit Appellate Blog : Squire S... Page 2 of 2

matter of law on punitive damages, but the case went to trial and the jury found HCP liable for tortious interference with a prospective advantage and awarded Ventas $101 million in compensatory damages: effectively, the difference between Ventas's $15.00/unit original bid and the $16.50/unit bid that Ventas had been forced to make to keep the deal from imploding.

Writing for a unanimous panel that included Judges Merritt and Griffin, Judge Clay affirmed the jury verdict but reversed on the district court's punitive damages ruling. In doing so, the Court found no fault with the district court's jury instructions on tortious interference under Kentucky law. The Court also expressly found that the jury's verdict was supported by sufficient evidence. As to punitive damages, applying Kentucky law, the Court found that there was also sufficient evidence for a jury to conclude that: 1) HCP "acted toward Ventas" with fraud, 2) HCP had the "intention of causing injury" to Ventas, and 3) HCP's fraud proximately caused Ventas's injury. In so concluding, the Court observed that "[t]he record is replete with evidence of intentional misrepresentations, deceit, and/or concealment of material facts by HCP." For those reasons, the Court remanded for a trial solely on the issue of punitives.

Judge Merritt filed a very brief concurrence in which he did not concur with the admonitions given by the Court to the parties' attorneys in footnote 17 of the opinion. In that footnote, the Court complained that the attorneys had filed excessive conditional briefing and supplementary authority letters on a "completely collateral and immaterial issue," observing that such activities must have required "scores if not hundreds of attorney hours." In his concurrence, Judge Merritt stated that, "[a] s a matter of fairness," he would not draw the inference that the attorneys in the case had "improperly run up the number of hours spent on the case" without giving counsel an opportunity to explain their actions.

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The Supreme Court, Affirming the Sixth Circuit, Simplifies Calculations Under The Spec... Page 1 of 1

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The Supreme Court, Affirming the Sixth Circuit, Simplifies Calculations Under The Speedy Trial Act: United States v. Tinklenberg Posted by(o ......on May 26, 2011

In I. ... !!//! r, 563 U. S. (2011), the Supreme Court affirmed the Sixth Circuit's dismissal of a criminal case under the Speedy Trial Act, which requires that trial begin within 70 days of indictment or arraignment. Justice Breyer's opinion, however, rejected the Sixth Circuit's reasoning. The Court held that any pretrial motion will pause the 70-day countdown under 18 U.S.C. § 3 161 (h)(1)(1)), finding that the Sixth Circuit's requirement that the motion actually cause delay to be overly complicated and out of step with practice in the other circuits. The Court also held that weekends and holidays should be included as transportation days under § 3 161 (h)( 1 )(F), rejecting the Sixth Circuit's holding otherwise. (Here, the circuit had been in agreement with all other circuits to address the issue.) In the end, however, the Court affirmed because the two holdings canceled each other out, resulting in a trial that was still over 70 days from the defendant's arraignment.

The affirmance in Tinklenberg both ends the Sixth Circuit's 0-14 "losing streak" before the Supreme Court (discussed here and here), and shows that such simplified win/loss statistics are often misleading.

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Supreme Court Reverses Two Sixth Circuit Decisions : Sixth Circuit Appellate Blog : Sq... Page 1 oft

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Supreme Court Reverses Two Sixth Circuit Decisions Posted by ` _; ...... on January 25, 2011

On January 24, the Supreme Court unanimously reversed two Sixth Circuit decisions.

In R :. _ . c P+ :..:t: °_ -:.__. l~ss, I;1±, the plaintiff and his fiancee were both employed by the defendant. The plaintiff claimed that the defendant discharged him in retaliation for his fiancee's filing of an EEOC charge of discrimination. The Sixth Circuit, in a divided en bane decision, held that the plaintiff could not sue under Title VII because he had not engaged in any protected activity and thus was not within "the class of persons for whom Congress created a retaliation cause of action." (See our prior reports on this case, k. and here.)

The Supreme Court reversed in an 8-0 decision (with Justice Kagan not participating). Adopting a "zone of interests" test developed in administrative law, the Court held that the statutory phrase "person claiming to be aggrieved" is broad enough to include "any plaintiff with an interest 'arguably [sought] to be protected by the statutes," not just those persons who engaged in protected activity. As an employee who was intentionally harmed as a means of retaliation against another employee, the plaintiff fell "well within the zone of interests sought to be protected by Title VII."

In .2:L::............the defendants asserted qualified immunity from the plaintiffs Section 1983 lawsuit. The district court denied summary judgment on the qualified immunity defense on the ground that it "turned on material facts genuinely in dispute." After the case proceeded to trial and the jury returned a verdict for the plaintiff, the defendants challenged the denial of summary judgment on appeal. The Sixth Circuit, recognizing denial of qualified immunity denial as an exception to the general rule against review of summary judgment decisions after trial, reversed. (See our guest blog post on this case, .)

The Supreme Court unanimously reversed the Sixth Circuit. The Court held that an order denying summary judgment may not be reviewed after a trial on the merits. It left open, however, the possibility that a qualified immunity defense raising a purely legal issue--i.e., an issue as to the substance and clarity of existing law, and not as to the facts of what occurred--may be reviewable after trial. The Court did not need to reach that question because the defendants' claim of qualified immunity turned on the facts. That being the case, the defendants were required to preserve their argument by making a Rule 50(b) motion post-verdict, which they did not do.

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Is The Sixth Circuit On A "Losing Streak"? : Sixth Circuit Appellate Blog : Squire Sander... Page I of 2

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Is The Sixth Circuit On A "Losing Streak"? Posted by '. :; :, on February 21, 2011

Comparing the court to a sports team, the Cincinnati Enquirer announced the "U.S. 6th Circuit Court of Appeals on 0-15 losing streak," ,'_ .. that the Supreme Court has now reversed fifteen cases in ...... a row from the Sixth Circuit. The article calls this a "poor showing," but cannot find any pattern in the cases. In death penalty cases, the Sixth Circuit affirmed execution in two, but in three it held execution improper. The Supreme Court reversed each time. Though the circuit's "liberal" judges were more likely to be reversed, the article reports that "almost all of the appeals court's 15 active judges were on the wrong side of at least one overturned decision." This blog has covered many of these cases, see .:...:, .::... and ' ...:.... Unable to figure out if the losing streak is meaningful, the article quotes Judge Martin's comment that "I don't think you can read anything into it."

It is hard to see how the 0-15 record is a meaningful indicator of the Sixth Circuit's jurisprudence: the Supreme Court reviews only about one in a thousand of the 4,400 appeals before in the Sixth Circuit each year. Other statistics, c o - .:.... ; t .. .<<, ; are more significant. For example, reversal rates (reflecting the quality of the guidance given to district courts) place the Sixth Circuit at

......... _ with a 16% overall reversal rate. Unfortunately, the Sixth Circuit is well below average on the time it takes to decide appeals. Nationally, appeals are decided in 11.7 months, but the Sixth Circuit currently takes around 15.5 months — only better than the Ninth Circuit's 16.3 months. The other circuits average around 10 months. Some scholars also look at productivity to measure the circuits, including the number of signed opinions per judge. By that standard, the Sixth Circuit's 51 signed opinions per judge is very close to the national average of 55.

Like .:._.'.:::._...;...'.. . °__ t:<, the article speculates that the reversal rate is attributable to certain .... disagreements between judges that have been well-publicized. But it is hard to see any link between that and the circuit's apparent inability to predict how the Supreme Court will decide on a close question. At this point, it seems unlikely that the "losing" streak is anything but a statistical anomaly.

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Overturning the Sixth Circuit, the Supreme Court Rules that Telephone Companies Must ... Page 1 of I

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Overturning the Sixth Circuit , the Supreme Court Rules that Telephone Companies Must Provide Access to Their Competitors At Cost Posted by C~ I rb on June 09, 2011

In Talk America, Inc. v. Michigan Bell Telephone Co., the Supreme Court ' :'..:._{.; ,.. ,. < s! holding that state utility commissions can require established telephone companies to provide smaller competitors access to their network at cost. It overturns a Sixth Circuit decision (which disagreed with decisions from the Seventh, Eighth, and Ninth Circuits) that allowed companies to charge market rates before allowing access to their networks. Talk America will make it easier for small companies to enter the market and compete with more established telephone companies like Michigan Bell, AT&T or Verizon. Writing for a unanimous court, Justice Thomas held that the relevant statute (47 U. S. C. § 251(c)) was ambiguous but that the agency's interpretation of its own regulations was reasonable. Under Auer v. Robbins, 519 U. S. 452, 461 (1997), the Court then deferred to the agency's view that competitors can buy access at cost.

In a concurrence, Justice Scalia agreed with the result but noted that he was beginning to doubt the premise of Auer. He argued that the principle of separation of powers should prevent the Court from defering to an agency's interpretation of its own law.

For more analysis on this issue in Talk America, see our previous coverage of this case ...........

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U.S. SUPREME COURT REVERSAL RATES CONTINUE TO ATTRACT ATTENTIO... Page 1 of 1

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U.S. SUPREME COURT REVERSAL RATES CONTINUE TO ATTRACT ATTENTION Posted by .` ! ...?_' : -. on July 22, 2011

We have previously reported about the Sixth Circuit's recent "lo ̀...' i:" at the U.S. Supreme Court as well as subsequent..........................by the Court. The broader issue of reversal rates by the U.S. Supreme Court was the subject of a recent t.: by the Los Angeles Times. While the article focused on the Ninth Circuit and its well-publicized reversal rate, some of the numbers from the past term are instructive. The article notes that the Supreme Court generally reverses about 75% of the cases that it hears, and over the past term the Sixth Circuit led the reversal percentage with 83%, followed by the Fifth Circuit with 80%, the Ninth with 79%, and the Second with 75%. What differentiates the Ninth from those other four circuits is a substantially higher number of rulings that were reviewed by the Court. The article also focused on the notion that the "liberal" judges on the Ninth Circuit are most often the targets of reversal by the Supreme Court. As we previously discussed, it is far too simplistic to use such a portrayal at the Sixth Circuit. Many of the panels that were reversed by the Supreme Court include some or a majority of Republican appointees, and many of the panels were "bipartisan." That suggests that the reversals are not simply the product of ideological disagreement, at least when it comes to the Sixth Circuit. And indeed, if the overall reversal rate is around 75%, it suggests that the Court is reversing decisions across the ideological spectrum. And this lends support to the notion that the well-publicized "losing streak" by the Sixth Circuit is simply not statistically significant. Indeed, the L.A. Times article quotes U.C. Irvine Dean Erwin Chemerinsky (who happens to give a great discussion each year at the ̀!.; Lic a

on the past term by the U.S. Supreme Court), who remarked that "reversal rates have no _ ................................................. meaning whatsoever." It calls to mind a quote by one of my favorite all-time justices, Robert Jackson: "We are not final because we are infallible, but we are infallible only because we are final."

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SUPREME COURT, IN FIVE-FOUR DECISION, REVERSES SIXTH CIRCUIT IN CR... Page 1 of 1

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SUPREME COURT, IN FIVE-FOUR DECISION, REVERSES SIXTH CIRCUIT IN CRIMINAL CASE Posted by '- ; : on June 28, 2011

The Supreme Court recently handed down its decision in _ .. which reversed an unpublished decision by the Sixth Circuit regarding the Federal Sentencing Guidelines. The case involved a retroactive guideline change that addressed the disparity in penalties between crack cocaine and powder cocaine. Mr. Freeman sought to obtain a sentence reduction based on the change even though he had already been sentenced, which the Sixth Circuit denied. The Supreme Court reversed, relying on both the Federal Rules of Criminal Procedure and relevant statues as the basis for the decision. A more complete description of this case can be found at the pout 4'

This case continues the trend of the Supreme Court's recent reversals of the Sixth Circuit that we have reported on : and here.

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The Sixth Circuit's Recent Treatment of Large Jury Awards : Sixth Circuit Appellate Blo... Page 1 of 2

The Sixth Circuit's Recent Treatment of Large Jury Awards Posted by .:..:....:.:.....: :....._:......."._'.::_.<.: on June 15, 2011

As we previously reported . : and . _ . the Sixth Circuit recently affirmed two jury verdicts totaling over $1 million. These decisions stoked our curiosity about the Court's treatment of significant jury verdicts. So, without conducting a scientific study, I reviewed the Court's decisions over the past two years, wherein a verdict exceeding $1 million was challenged and the government wasn't a party. My review yielded 12 cases, wherein verdicts ranging from about $1.1 million -- $101 million were evaluated. Of these,

• 7 arose from a contract claim; • 2 arose from an employment claim; and • 3 arose from torts.

Notably, of the 12 cases reviewed, the Court partially or fully affirmed 9 of the verdicts (including the $101 million verdict in Ventas, Inc. v. HCP, Inc., which stemmed from a tortious interference with prospective advantage claim) and remanded 3 cases for new trial or entry of judgment in favor of the defendants. While the results may not be statistically significant, they do suggest a word of caution about challenging large verdicts. Any party who has suffered a significant verdict has confidence that the appellate court will correct the errors of the trial court. But simply showing the Sixth Circuit a large verdict isn't enough — the court must be convinced that actual reversible error occurred. And, at least recently, the tendency is to affirm.

Another practice pointer here is to consider involvement of the Circuit'ss: _: ':. _ The Sixth Circuit has a very effective mediation office that is well equipped to settle large verdict cases. And any appellant in those circumstances should give mediation serious consideration, as these recent cases confirm.

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Sixth Circuit Examines for the Second Time This Week The Application of Twombly and... Page 1 of 2

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Sixth Circuit Examines for the Second Time This Week The Application of Twombly and Iqbal to a Complaint - This Time With a Different Result Posted by .... ii ..... on June 22, 2011

For the second time this week, the Sixth Circuit reviewed a district court's dismissal of an antitrust complaint for failure . to state a claim upon which relief can be granted. As reported .: ., Judges Merritt, Clay and Griffin earlier this week upheld the dismissal of an antitrust complaint, even though the information necessary to establish Plaintiffs claims was solely in the purview of the Defendants. In N contrast, in Watson Carpet & Floor Covering, Inc. v. Mohawk Industries, Inc., Nos. 09-6140/09-6173 (6th Cir. June 22, 2011) C ... ), Judges Siler, Moore and Griffin reversed the district court's dismissal for failure to state a claim under Twombly of a complaint alleging a conspiracy to restrain trade in violation of the Sherman Act.

The Panel in Watson focused primarily on the fact that, even though Defendants offered alternative reasons for their refusal to sell to Plaintiff, the alleged agreement to drive Plaintiff out-of-business plausibly explained the complained-of-actions; it did not have to be the probable or exclusive explanation. Remarkably - and notably absent from the Complaint discussed in our previous post - Plaintiff Watson alleged specific facts surrounding the agreement among Defendants to drive it out of

business, including who made the agreement, when it was made, and the specifics as to how it was carried out. Though the basis for how Plaintiff was able to learn the facts to support its Complaint (which would presumably be solely within the purview of Defendants) was not specifically addressed in the opinion, the factual history suggests that Plaintiff may have learned the specifics in discovery in a related litigation involving a conspiracy among the same parties. That related litigation predated Twombly, and thus would not have been subject to the same strict pleading standards. Fortunately for the Plaintiff, it may have provided the factual basis for Plaintiff to survive a motion to dismiss.

It remains to be seen, however, how other plaintiffs, with similar claims based upon conduct within the exclusive purview of the defendants, and without the benefit of discovery, will be able to survive in a post-Twombly world. The Sixth Circuit is clearly grappling with that question, but it looks like it is being sorted out on a case-by-case basis.