Noteworthy Cases

United States Supreme Court

Altria Group, Inc., v. Good, 129 S.Ct. 538 (2008).  Cigarette smokers sued tobacco products manufacturer, alleging that manufacturer’s claims that product was “light” and had “lowered tar and nicotine” were misrepresentations under the Maine Unfair Trade Practices Act (MUTPA). The United States District Court for the District of Maine granted summary judgment for manufacturer, ruling that the MUTPA claim was preempted by Federal Cigarette Labeling and Advertising Act (FCLAA). The United States Supreme Court held that: (1) action was not expressly preempted by FCLAA, abrogating Brown v. Brown & Williamson Tobacco Corp., 479 F.3d 383; and (2) action was not implicitly preempted by Federal Trade Commission’s (FTC) alleged longstanding policy regarding “light” cigarettes.

Sixth Circuit Court of Appeals

Greenwood v. Raznick, 2009 WL 1421153 (6th Cir. 2009).  Corporate employee brought action to recover for alleged breach of terms of employment agreement, and his employer defended based on broadly worded release provision included in the unexecuted subscription agreement pursuant to which employee allegedly received his stock in corporation. The Sixth Circuit Court of Appeals held that genuine issues of material fact as to how corporate employee received his stock in corporation, whether pursuant to terms of subscription agreement which he subsequently refused to execute or in partial compensation for his services, precluded summary judgment for employer, on estoppel theory, based on broadly worded release provision included in the subscription agreement.

B&H Medical, LLC, v. ABP Administration, Inc., 526 F.3d 257 (6th Cir. 2008).  Supplier of durable medical equipment (DME) and prosthetics and orthotics (P & O), and former member, brought action under Sherman Act against administrator of closed network of suppliers of DME and P & O to enrollees in certain health-benefits plans that health insurer had offered to employees and retirees of three large employers alleging that support contract amounted to illegal exclusive-dealing arrangement, constituted refusal to deal with and boycott of former member, and attempt to monopolize DME/P & O market. The Sixth Circuit Court of Appeals held, among other things, that: competition as a whole had to suffer as result of closed network for order for excluded supplier, who lost anticipated income, to have antitrust standing; and a closed network did not have substantial share of relevant market.

Rehabilitation Institute, Inc., v. Michigan United Food and Commercial Workers Health and Welfare Funds, 2006 WL 1005053 (6th Cir. 2006).  Rehabilitation Institute of Michigan sought to recover from the Michigan United Food and Commercial Workers Health and Welfare Funds the costs of providing rehabilitation services for the 17-year old son of Terence and Stephanie Williams. The Sixth Circuit held that the District Court incorrectly interpreted the portion of defendant’s Employee Retirement Income Security Act of 1974 (“ERISA”) plan that defines eligible dependents and reversed the decision of the district court and remanded for further proceedings.

Kellogg Co. v. Toucan Golf, Inc., 337 F.3d 616 (6th Cir. 2003).  Cereal manufacturer that held trademark in ‘‘Toucan Sam’’ character sought de novo review of Trademark Trial and Appeal Board’s (TTAB) decision to permit registration of word mark ‘‘Toucan Gold’’ by manufacturer of promotional golf equipment. The Court of Appeals held that: (1) plaintiff’s mark was strong; (2) parties’ products were unrelated; (3) parties’ marks were not sufficiently similar to support finding of likely confusion; (4) defendant’s marks did not give rise to likelihood of confusion; (5) defendant’s marks did not dilute fame of plaintiff’s ‘‘Toucan Sam’’ marks; (6) defendant waived claim for attorney’s fees; and (7) defendant was not entitled to damages for allegedly frivolous appeal.

U.S. District Courts - Michigan

Needa Parts Mfg., Inc., v. PSNET, Inc., 635 F.Supp.2d 642 (E.D.Mich. 2009). Aftermarket parts manufacturer brought state court action against investors for breach of stock purchase agreement, fraud, innocent misrepresentation, and tortious interference with business relationships. Defendants obtained removal and counterclaimed for tortious interference, fraud, and breach of contract. Parties filed cross motions for summary judgment. Holdings: The District Court held that: (1) fact issue precluded summary judgment on manufacturer’s breach of contract claim; (2) fact issue precluded summary judgment on manufacturer’s alter ego claim; (3) investors did not plead fraud with particularity; (4) fact issues precluded summary judgment on manufacturer’s fraud claims; (5) manufacturer’s vague and conclusory allegations were insufficient to state claim for tortious interference; and (6) CEO’s alleged conduct in Michigan subjected him to personal jurisdiction in Michigan. Motions granted in part and denied in part.

Mize v. Tedford, 2009 WL 1508373 (E.D.Mich. 2009).  A city did not fail to supervise a police officer who allegedly raped a victim while on duty, and thus was not subject to § 1983 liability. The victim only identified one prior sexual assault complaint against the officer’s unit, which was not against the officer and which the complainant did not pursue, and there had been only four total sexual assault complaints against the city’s police department in the past twenty years. Those undisputed facts could not establish a constitutionally deficient failure to supervise, and the victim could not show the required widespread pattern of constitutional violations to establish that the city’s actions or inactions amounted to a deliberate indifference to the danger of the officer sexually assaulting the victim. 42 U.S.C.A. § 1983.

Star Ins. Co. v. United Commercial Ins. Agency, Inc., 392 F.Supp.2d 927 (E.D.Mich. 2005).  Plaintiff insurance company brought action against defendant insurance company, and defendant brought counter-complaint against plaintiff and a third-party complaint against another insurance company. Defendant brought motion to amend the counter-complaint and third-party complaint to remove claims for negligence and breach of covenant of good faith and fair dealing claims and add claims for fraud, conversion, and an accounting. Holding: The District Court Magistrate Judge held that under Michigan law, despite the presence of a merger clause in the contract, a party could have justifiably relied, as element of fraud in the inducement, upon pre-contractual representations made by another party regarding things outside the scope of the contractual terms. Motion granted.

Trustees of Carpenters’ Pension Trust Fund v. AAA Mortgage Corporation, 269 F.Supp.2d 931 (E.D.Mich. 2003).  Trustees of pension fund brought action against mortgage company for breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) and for state claims. On cross motions for summary judgment, the District Court held that: (1) three-year limitations period began to run when trustees attended a detailed sales pitch which outlined the mortgage program given by the president of the mortgage company; (2) trustees’ ERISA claims were governed by ERISA’s three-year statute of limitations; and (3) trustees’ state law claims were preempted by ERISA claims. Motions granted in part and denied in part.

Ridley Bagel, Ltd., v. Kellogg Co., 233 F.Supp.2d 853 (E.D.Mich. 2002).  British partner in joint venture, which operated British bakery, sued Michigan parent of other British joint venture partner, alleging breach of contract and raising related claims. Parent moved to dismiss, on forum non conveniens grounds. The District Court held that: (1) England was adequate alternate forum; (2) private factors, such as access to witnesses, did not favor dismissal; and (3) public factors, such as forum’s interest in case, did not favor dismissal. Motion denied.

Badalament, Inc., v. Mel-O-Ripe Banana Brands, Ltd., 265 B.R. 732 (E.D.Mich. 2001).  Supplier sued to recover on its past due invoices, and filed motion for summary judgment on its breach of contract claims against individual guarantor. On supplier’s motion for summary judgment, and on corporate customer’s and guarantor’s motion for stay of proceedings, the District Court held that: (1) summary judgment motion was as yet still premature, prior to discovery; (2) District Court, based upon principles of international comity, would stay supplier’s action against corporate customer that had filed for relief under Canadian bankruptcy laws; and (3) District Court would also stay action against guarantor. Summary judgment denied; action stayed.

Kelsey-Hayes Co. v. Maleki, 765 F.Supp. 402 (E.D.Mich. 1991).  Employer brought action to enforce restrictive covenant in form employment agreement.  Following removal, the District Court held that under Michigan law, restrictive covenant did not bar employee who had been involved in work with hydraulic antilock braking systems for light-duty vehicles from accepting position involving work with air brakes for heavy-duty vehicles.

Coleman v. Payne, 698 F.Supp. 704 (W.D.Mich. 1988).  Musical composition copyright owners brought action against radio station owner-operator based on unauthorized performances of musical compositions over the radio station and moved for default judgment against the radio station owner-operator.  The District Court held that: (1) evidence established owner operator knowingly and intentionally violated copyright owners’ rights and was willful infringer under the Copyright Act; (2) statutory damages, which copyright owners had elected, would be awarded in amount of $5,000 per infringement, for total award of $50,000; and (3) costs and attorney’s fees of $1,052.63 would be awarded against willful copyright infringer under the Copyright Act.

Michigan Supreme Court

Frank v. Linkner, 500 Mich. 133 (2017).  Members brought action against other members in limited liability company (LLC), asserting claims for LLC member oppression, breach of contract, and breach of fiduciary duty after LLC sold substantially all of its assets, and members received nothing for their common shares. The Circuit Court granted other members’ motion for summary disposition. Members appealed. The Court of Appeals reversed. Other members’ application for leave to appeal was granted.  The Supreme Court held that: (1) three-year limitation period for actions seeking an award of damages for improper conduct by managers or members in control of LLC constituted “statute of limitations,” rather than statute of repose; (2) cause of action for LLC member oppression accrued at the time that LLC manager substantially interfered with the interests of members, as members, even if members had not yet incurred calculable financial injury; and (3) members’ actions for LLC member oppression accrued when LLC amended its operating agreement to subordinate members’ common shares, rather than when LLC sold substantially all of its assets and members received nothing for their shares.  Affirmed in part, reversed in part, and remanded.

Madugula v. Taub, 496 Mich. 685 (2014).  Minority shareholder of corporation brought action against majority shareholder and corporation, alleging violations of the shareholder oppression provision of the Business Corporation Act (BCA). The Circuit Court granted summary disposition in part in favor of majority shareholder and corporation, but entered judgment on jury verdict in favor of minority shareholder. Majority shareholder appealed. The Court of Appeals affirmed. Majority shareholder sought leave to appeal, which was granted.   The Supreme Court held that: (1) there was no statutory right to a jury trial for claims under shareholder oppression provision of BCA; (2) there was no state constitutional right to a jury trial for claims under shareholder oppression provision of BCA; and (3) violations of shareholder agreements could constituted evidence of oppression under shareholder oppression provision of BCA. Reversed and remanded.

Hill v. City of Warren, 480 Mich. 1195 (2008).  Under MCR 2.604(A), a trial court has the power to revisit its prior rulings unless it has entered a final judgment that adjudicates all the claims, rights, and liabilities of the parties. Here, plaintiffs filed their motion for class certification within 91 days of filing their class-action complaint. While the trial court initially denied plaintiffs’ motion, that denial was not a final judgment on all the claims, rights, and liabilities of the parties. Therefore, the trial court did not err in reconsidering its prior ruling on plaintiffs’ class certification motion under MCR 2.604(A).

Michigan Court of Appeals

Hastings Mut. Ins. Co. v. Safety King, Inc., 286 Mich. App. 287 (2009).  The Court of Appeals held that: fact issue as to whether antimicrobial pesticide contained in sanitizing agent used by insured was a pollutant under the terms of pollution exclusion clause precluded summary disposition, and not all pesticides were necessarily pollutants under pollution exclusion clause.  Reversed and remanded.

Van Eman v. CARS Protection Plus, 2007 WL 1491814 (Mich. App. 2007).  In this case arising under the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq., defendant CARS Protection Plus appealed as of right a judgment awarding plaintiff damages in the amount of $4,047 and attorney’s fees in the amount of $43,537.50 and entering a permanent injunction against defendant. The Court of Appeals affirmed, but remanded for entry of an award of appellate attorney’s fees in favor of plaintiff.

Gearin v. Rogers, 2007 WL 756370 (Mich. App. 2007).  In this action for intentional interference with a business relationship and intentional interference with a contract, plaintiff appealed as of right from the trial court’s order granting defendants’ motion for summary disposition pursuant to MCR 2.116(C)(8) and (10).  The Court of Appeals affirmed. This appeal was decided without oral argument pursuant to MCR 7.214(E).           

Ruben, MD, PC, v. Auto Club Group Ins. Co., 2005 WL 356279 (Mich. App. 2005).  Defendant appealed as of right the jury verdict finding plaintiff’s medical charges reasonable and customary and awarding those charges. The Court of Appeals affirmed.