Robert Edward DeMascio

The case involved credit card issuers appealing a bankruptcy court's order discharging over $28,000 in gambling-related debts that a debtor incurred through cash advances on pre-approved cards in the months before filing Chapter 7. The district court reversed, holding that the bankruptcy court had misinterpreted Sixth Circuit precedent in In re Ward as requiring an assumption-of-the-risk analysis; instead, Ward only requires that issuers perform credit checks before extending credit, which the banks had done. The court remanded for the bankruptcy court to apply the nondischargeability standard of 11 U.S.C. § 523(a)(2)(A) to the facts, observing that courts generally treat gambling credit-card debts as nondischargeable under that provision.

business & regulatory

The case involved plaintiffs, including performers and the owner of a bar called The IceHouse, seeking a preliminary injunction against Clinton Township Ordinance #291-A, which prohibited public nudity, explicit sexual activity, and compensated touching dances in establishments licensed by the Michigan Liquor Control Commission, following multiple arrests for topless dancing. The court granted the injunction and held the ordinance unconstitutional on its face. It reasoned that the ordinance was overbroad because it criminalized constitutionally protected expressive conduct under the First Amendment, failed the balancing test from Barnes v. Glen Theatre for content-neutral public nudity bans due to lack of sufficient governmental interest, and could not be saved by Twenty-First Amendment authority since the township lacked delegated power from the state or MLCC to enforce such regulations. The court also found exceptional circumstances justifying federal intervention despite pending state criminal and civil proceedings.

free speechcriminal lawfederal power

In this case, plaintiff Ivey sued vessel owner Baronia Shipping Company for injuries sustained while unloading cargo. Baronia filed a third-party complaint against time charterer Interbulk Ltd. for breach of the Charter Party Agreement and/or negligence. Interbulk moved to sever and stay the third-party proceedings pending arbitration under the agreement's arbitration clause and the Federal Arbitration Act. The court granted the motion, ruling that the broad arbitration clause covers the dispute, the FAA requires a stay, and neither the indemnification provisions nor the use of a Fed.R.Civ.P. 14(c) third-party claim creates an exception to arbitration. The court noted that the plaintiff, not being a party to the agreement, would not be prejudiced by the arbitration between the third parties.

procedurebusiness & regulatory

This case was a class action lawsuit brought by the UAW and individual state employees against Michigan and its Civil Service Commission, alleging that the state's classification and pay systems (the older Position Comparison System and the later Benchmark System) intentionally discriminated on the basis of sex by assigning lower wages to predominantly female job classifications, in violation of Title VII. The plaintiffs focused on specific classes and presented statistical and circumstantial evidence of discriminatory wage assignments. The court ruled in favor of the defendants and dismissed the complaint, concluding that the evidence was insufficient to prove intentional discrimination. The core reasoning was that the systems were implemented consistently using neutral criteria like labor market data and economic factors, alongside affirmative action measures such as expanded career ladders and collective bargaining rights, which contradicted any pattern of sex-based bias.

civil rightslabor & employment

The case involved plaintiffs suing defendants for willful copyright infringement of two workplace tests (the T.A. Survey and E.S. Survey) under the Copyright Act of 1976. The court had previously awarded $50,000 in statutory damages and $25,000 in punitive damages but, on defendants' motion, amended the judgment to strike the punitive damages because they are unavailable for statutory copyright claims under the 1976 Act and are limited to common law actions. Plaintiffs also moved to multiply the statutory damages award for each infringed work, prompting the court to examine whether the two tests formed separate works or a single compilation under 17 U.S.C. § 504(c)(1), using a functional analysis of their distinct objectives and purposes to decide if separate awards were required.

business & regulatoryprocedure

The case involved a plaintiff seeking to enjoin the IRS from levying on her bank account to collect a $23,648.15 assessment under IRC § 6672 for unpaid corporate withholding and FICA taxes, based on her alleged status as a responsible person of Cab & Chassis, Inc. The court granted the IRS's motion to dismiss the action. The Anti-Injunction Act, 26 U.S.C. § 7421, bars suits to restrain tax collection, and although the plaintiff presented facts suggesting she might prevail on the merits by showing lack of responsibility or willfulness, she failed to satisfy the equitable exception under Enochs v. Williams Packing because she had an adequate remedy at law by paying the tax and suing for a refund.

taxesfederal powerprocedure

This case involved a financing company that sued a machine seller and related parties for breach of contract, common law fraud, and civil RICO violations arising from a leasing arrangement for pipe bender machines, alleging misrepresentations about the machines' manufacturing source, value, and included inventory that led to nonpayment by lessees; the defendants counterclaimed for unpaid amounts under the financing deal. The court granted the defendants' motion to dismiss the RICO claim under Rule 12(b)(6) but denied dismissal of the fraud claim and denied the defendants' request to amend the counterclaim to increase damages from $8,000 to over $39,000. The RICO dismissal rested on the conclusion that allegations of multiple acts in furtherance of a single fraudulent scheme failed to plead the required pattern of racketeering activity, as continuity and relationship elements were lacking under Sedima and related precedents. The fraud claim survived because the complaint adequately pled the elements of knowing misrepresentation, reliance, and damages under Michigan law, even without specific facts on investigation or the right to rely. The amendment was denied due to prejudice from the need for additional discovery on new lease agreements.

business & regulatorycriminal lawproceduretorts & liability

The case involved the Michigan Department of Treasury suing a service station operator under the federal RICO statute for underreporting gross receipts and underpaying state sales taxes by about $240,000 in 1982, after the defendant had been convicted in state court and ordered to pay restitution as a condition of probation. The state sought treble damages under 18 U.S.C. § 1964(c) based on predicate acts of mail fraud in filing the tax returns. The court granted the defendant's motion to dismiss, holding that the Revenue Division of the state treasury department is not a "person" with standing to pursue civil RICO remedies in this context. The reasoning centered on the statute's silence regarding state tax agencies, the absence of congressional intent to federalize state sales tax enforcement, the availability of state remedies including restitution, and policy concerns about burdening federal courts with such claims.

criminal lawtaxesfederal power

The EEOC brought this Title VII action against J.C. Penney challenging its “head of household” eligibility rule for spousal coverage under the company’s medical and dental plans, under which an employee could obtain coverage for a spouse only if the employee earned more than the spouse. The rule had replaced an earlier plan that provided spousal coverage only to male employees. The court held that the EEOC could challenge the rule only under § 703(a)(1) and that this provision requires proof of discriminatory intent, consistent with equal-protection standards under General Electric v. Gilbert and Washington v. Davis. Although the rule produced a disparate impact on female employees and had followed a facially discriminatory predecessor plan, the court found it facially neutral and concluded that the EEOC had not shown the requisite intent through historical background, decision-making process, or other Arlington Heights factors. The court therefore entered judgment for J.C. Penney.

labor & employmentcivil rights

In this case, a former salesperson sued her employer, Sears, Roebuck and Co., alleging wrongful discharge under Michigan law after being fired for violating a policy against unauthorized use of merchandise. The court considered the defendant's motion for summary judgment, noting that the plaintiff's 1965 employment application explicitly stated that employment could be terminated with or without cause at any time. The plaintiff argued that language in an employee training guide created a legitimate expectation of termination only for listed reasons, such as theft, but the court found no conflict with the application and no reasonable basis for such an expectation. The court granted the motion, holding that the plaintiff remained bound by the at-will terms of her original signed application despite later leaves of absence, and dismissed the complaint.

labor & employment

The case involved L.P. Acquisition Company and L.P. Media, Inc., which launched a cash tender offer for shares in The Evening News Association (ENA), a closely held Michigan corporation whose securities were not registered with the SEC. LP sought declaratory and injunctive relief, arguing that Michigan's Take Over Offers Act and Blue Sky Law were unconstitutional as applied to the offer because they conflicted with the federal Williams Act and unduly burdened interstate commerce under the Commerce Clause. The court held that the Williams Act, including §14(e), does not apply to tender offers for unregistered securities, as confirmed by legislative history focusing on publicly held companies, and that Congress preserved state authority over such offers. It further reasoned that Michigan's legitimate interest in protecting its resident shareholders—half of whom were in-state—outweighed any incidental burden on commerce, distinguishing precedents like Martin-Marietta that involved registered securities. The court therefore denied the injunction and dismissed the complaint.

business & regulatoryfederal power

The case involved a proposed class action settlement in bankruptcy court between borrowers and investors regarding mortgage loans arranged by the debtor companies, alleging violations of Michigan consumer protection laws. The district court reviewed the bankruptcy court's proposed order approving class certification and a consent judgment and determined it lacked subject matter jurisdiction. The court reasoned that the settlement primarily compromised claims between non-debtor parties with only a tenuous connection to the bankruptcy estates, failing to qualify as a proceeding arising under, arising in, or related to cases under Title 11 pursuant to 28 U.S.C. § 1471(b). Therefore, the proposed order was dismissed.

procedure

The case involved Billy Sims signing a contract with the Houston Gamblers while represented by agent Jerry Argovitz, who held a substantial ownership interest and executive role in the Gamblers, followed by Sims signing a second contract with the Detroit Lions; the Lions and Sims sued to invalidate the Gamblers contract on grounds of fiduciary breach, fraud, and misrepresentation. The court decided to rescind the Gamblers contract, holding that Argovitz's conflict of interest during negotiations was so pronounced and undisclosed that rescission was required. The core reasoning was that Argovitz failed to prove by a preponderance of evidence that he disclosed all material facts to Sims, including his personal financial stake in the Gamblers, the relative values of competing offers, differences between the leagues, and leverage available to Sims, which would have influenced the decision; under Texas law on fiduciary duties and equity, this breach made enforcement unconscionable and barred defenses like ratification or waiver.

business & regulatorytorts & liability

The case involved Mt. Carmel Mercy Hospital, a Medicare provider, challenging the Secretary of Health and Human Services' new malpractice insurance reimbursement rule under Medicare regulations, which shifted from using the hospital's overall Medicare utilization rate (about 36%) to a ratio based on the hospital's actual Medicare malpractice losses over five years, resulting in only 8.1% reimbursement. The court addressed cross-motions for summary judgment after the hospital bypassed administrative review and filed directly in federal district court. The court held that the rule was invalid because it exceeded the Secretary's statutory authority under the Medicare Act by failing to reimburse reasonable costs and risking cost-shifting to non-Medicare patients, and because it was arbitrary and capricious due to insufficient support from the underlying Westat study and lack of justification for departing from prior aggregation methods for overhead costs. The court found, however, that the Secretary had complied with the Administrative Procedure Act's notice-and-comment requirements. The decision rested on analysis of the Medicare statute's requirements for reasonable cost reimbursement and judicial review standards under the APA.

healthcarefederal powerbusiness & regulatoryprocedure

In this case, the government sought a restraining order under the RICO statute to prevent defendants from disposing of their interests in sludge-related corporations while facing a fourteen-count indictment that included charges of conducting corporate affairs through a pattern of racketeering. The defendants argued that any such order required an evidentiary hearing applying the Ninth Circuit's standard from United States v. Spilotro, which would require the court to find it likely that a jury would convict beyond a reasonable doubt. The court rejected that standard as impractical and inappropriate for a pretrial motion, instead adopting a test under which the government must prove by clear and convincing evidence that the targeted property was involved in the RICO violation, would be subject to forfeiture, and was at risk of being made inaccessible before trial. The court entered the parties' stipulated restraining order after concluding it satisfied this standard, emphasizing that the order did not constitute forfeiture but preserved the property for potential later action while affording due process.

criminal lawprocedureproperty

The case arose after Stouffer Corporation sought to cease operating a hotel under a lease held by Northland Point Partners, prompting lawsuits by the landlord and mortgagee Prudential Insurance for damages and specific performance; following Northland Point's Chapter 11 filing, the actions were removed to bankruptcy court. Stouffer moved to dismiss for lack of subject-matter jurisdiction, arguing that the interim rule adopted by the district court pursuant to Sixth Circuit Judicial Council direction could not validly confer authority on bankruptcy judges to adjudicate the state-law claims after Northern Pipeline Construction Co. v. Marathon Pipe Line Co. The court denied the motion, holding that 28 U.S.C. § 1334 preserved original federal jurisdiction over bankruptcy matters through April 1984 and that 28 U.S.C. § 332 empowered judicial councils to direct interim procedures for the administration of justice. It further reasoned that the interim rule's provision for de novo district-court review satisfied Article III requirements for proceedings related to bankruptcy cases.

federal powerprocedureproperty

This case involved Stouffer Corporation's challenge to the constitutionality of an Interim Rule adopted by the U.S. District Court for the Eastern District of Michigan to administer the bankruptcy system following the Supreme Court's decision in Northern Pipeline Construction Co. v. Marathon Pipe Line Co. The court held that the Interim Rule is constitutional and valid, and dismissed Stouffer's motion while also denying a stay of the bankruptcy proceedings. The reasoning was that the Marathon decision did not create a jurisdictional gap, as Congress had expressly preserved the federal district courts' original jurisdiction over bankruptcy matters under 28 U.S.C. § 1334 and related provisions of the Bankruptcy Reform Act of 1978 until at least April 1984. The court further reasoned that Marathon only invalidated the broad jurisdictional grant to Article I bankruptcy courts, leaving district courts with authority to delegate duties to bankruptcy judges under statutes like 11 U.S.C. § 105 and Bankruptcy Rule 927.

federal powerprocedure

In this case, a railway employee sued his employer after being discharged following an investigative hearing under the collective bargaining agreement, where his retained attorney was denied permission to represent him and ejected from the premises. The plaintiff claimed violations of the Railway Labor Act (including 45 U.S.C. § 152 Third), breach of the collective bargaining agreement, due process, intentional infliction of emotional distress, and intentional interference with contractual relations. The court granted the defendant's motion to dismiss, holding that it lacked subject matter jurisdiction because the plaintiff failed to exhaust mandatory administrative remedies under the Railway Labor Act. The court reasoned that the Act's provisions govern disputes over the collective bargaining agreement and preempt related state-law claims, that § 152 Third addresses interference with selection of a collective bargaining representative rather than an individual attorney at an internal hearing, and that there is no due process right to counsel in such employer-conducted proceedings.

labor & employmentprocedurecivil rights

The Department of Justice sued the City of Birmingham, Michigan, under the Fair Housing Act, alleging that the city intentionally interfered with Baldwin House Corporation's efforts to develop racially integrated low-income senior citizen and family housing on a former school site. The court found that the city, aware of state financing requirements for family housing units, actively directed Baldwin House to pursue only rehabilitation of existing homes rather than new construction, amended agreements to prohibit family housing, and otherwise obstructed negotiations to avoid low-income family units. Evidence of the city's consistent actions to limit proposals to senior housing alone supported a finding of intentional racial discrimination that made housing unavailable to black families. The court granted judgment for the plaintiff on liability.

civil rights

The case involved a union striking against a company that had filed for Chapter 11 bankruptcy reorganization and was delinquent on payments to employee benefit funds under a collective bargaining agreement that permitted strikes for nonpayment. The bankruptcy court issued a permanent injunction against the strike, ruling that it violated the automatic stay under 11 U.S.C. § 362(a)(6) and that the Norris-LaGuardia Act did not apply because the dispute was not a labor dispute or because the strike was unlawful. The appellate court reversed and vacated the injunction, holding that the Norris-LaGuardia Act withdrew jurisdiction from all federal courts, including bankruptcy courts, to enjoin strikes arising from labor disputes as defined broadly in 29 U.S.C. § 113(c), and that the Bankruptcy Reform Act of 1978 did not supersede those anti-injunction provisions.

labor & employmentbusiness & regulatoryfederal power