ORDER DENYING PLAINTIFFS' MOTION FOR JUDGMENT (document no. 45), AND GRANTING DEFENDANTS' MOTION FOR RELIEF FROM JUDGMENT (document no. 46); OPINION; ORDER GRANTING IN PART AND DENYING IN PART FOUAD FARAJ’S MOTION FOR ACQUITTAL (document no. 252); OPINION; OPINION; ORDER DENYING MOTION TO SUPPRESS B

=== ORDER DENYING PLAINTIFFS' MOTION FOR JUDGMENT (document no. 45), AND GRANTING DEFENDANTS' MOTION FOR RELIEF FROM JUDGMENT (document no. 46) ===

2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 1 of 11 Pg ID 566 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION BIBLE BELIEVERS, et al., Plaintiffs, Case No. 12-cv-14236 v. HONORABLE STEPHEN J. MURPHY, III WAYNE COUNTY, et al., Defendants. / ORDER DENYING PLAINTIFFS' MOTION FOR JUDGMENT (document no. 45), AND GRANTING DEFENDANTS' MOTION FOR RELIEF FROM JUDGMENT (document no. 46) On October 28, 2015, the Sixth Circuit issued an en banc opinion remanding the case for entry of summary judgment in favor of the Plaintiffs.1 One of the defendants, Wayne County, filed a motion for relief from judgment under Civil Rule 60(b). The motion argues that the Sixth Circuit's opinion relied on a fact for which there was no evidence in the record. Under Civil Rule 60, the Court may relieve a party from an order due to “mistake, inadvertence, surprise, or excusable neglect.” Fed. R. Civ. P. 60(b)(1). In many cases interpreting the rule, the district court reviews its own order for a mistake or error. The present situation is less common because Wayne County is asking the district court to review the work of an appellate court (sitting en banc, no less). The Court has reviewed the filings and agrees that the Sixth Circuit's opinion contains a clear factual error. And the Court finds that the incorrect fact was necessary to the Sixth Circuit’s reasoning. The Court will therefore grant Wayne County's motion, allow the parties to conduct discovery limited 1 Judge Duggan was originally assigned to the case. The case was reassigned when Judge Duggan retired. 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 2 of 11 Pg ID 567 to the issue of whether Wayne County had an unconstitutional policy, and allow the parties to file renewed summary judgment motions on the issue of municipal liability. I. Factual Background, As Detailed In The Sixth Circuit's Opinion2 BACKGROUND The Bible Believers are a group of Christians dedicated to converting non-believers to the Christian faith. Bible Believers v. Wayne Cnty., 805 F.3d 228, 236 (6th Cir. 2015) (en banc). In 2011, they attended the Arab heritage festival in Dearborn, Michigan. Id. While at the festival they preached the message “that Mohammed was a false prophet who lied to them and that Muslims would be damned to hell if they failed to repent by rejecting Islam.” Id. Members of the crowd responded by assaulting members of the group. Id. The police “initially watched and did nothing, then eventually silenced the Bible Believers by kicking them out and requiring them to leave the Festival grounds.” Id. Before the next Arab heritage festival, in 2012, the Bible Believers’ lawyer sent a letter to Wayne County and Wayne County Sheriff Benny Napoleon recounting their experience at the prior year’s festival. Id. The attorney stated that the Bible Believers had a First Amendment right to share their ideas during the festival, and that the police had a duty to protect them from the reactions of hostile listeners. Id. at 236–37. The Wayne County Corporation Counsel ("Corporation Counsel"), Ms. Zenna Elhasan, responded by letter that the police did not owe any special duty to the Bible Believers. Id. at 237. The letter further stated that “individuals can be held criminally 2 The Court here will provide an outline of the relevant details described by the Sixth Circuit's en banc opinion. See Bible Believers v. Wayne Cnty., 805 F.3d 228 (6th Cir. 2015) (en banc). 2 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 3 of 11 Pg ID 568 accountable for conduct which has the tendency to incite riotous behavior or otherwise disturb the peace.” Id. And the letter noted that the County did not owe any duty to defend a speaker addressing a hostile audience and that police could preserve the peace by removing the speaker for the speaker’s protection. Id. During the 2012 festival, the Bible Believers again carried signs and banners stating that “Islam Is A Religion of Blood and Murder,” announcing that all Muslims would go to hell, and that the prophet was a pedophile. Id. at 238–39. They also carried a pig’s head on a spike because they believed Muslims were afraid of swine. Id. at 238. While at the festival, bystanders started throwing bottles and trash at the Bible Believers. Id. When the police rode by, most of the assaultive behavior stopped. Id. at 239. But the police refused to stay close, explaining that they had to patrol the entire festival. Id. at 240. Instead, the police told the Bible Believers that they were causing a problem and expressed concern that the situation was escalating. Id. According to the Sixth Circuit opinion, “Deputy Chiefs Richardson and Jaafar conferred with Corporation Counsel.” Id. After the purported discussion, the police escorted the Bible Believers from the Festival. Id. The Bible Believers piled into a van; the police pulled the vehicle over down the road because it did not have a license plate. Id. at 241. II. Sixth Circuit’s Reasoning The Sixth Circuit, sitting en banc, held that the police officers who threatened the Bible Believers with arrest and forced them to leave the festival violated the Bible Believers’ First Amendment rights. Id. at 255. In addition, the Sixth Circuit held that the County was responsible for the police officers’ removal of the Bible Believers from the festival. Id. at 260. The Court explained that a municipality could be liable for the acts of its police if the 3 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 4 of 11 Pg ID 569 officers were acting in accordance with a municipality’s policy or custom. “A plaintiff may demonstrate the existence of a policy, custom, or usage in a variety of ways, two of which are relevant to this appeal.” Id. at 260. “First, she may provide evidence of a formal policy officially adopted by the county.” Id. Second, “a single unconstitutional act or decision, when taken by an authorized decisionmaker, may be considered a policy and thus subject a county to liability.” Id. The Sixth Circuit found that Wayne County had an unconstitutional policy, and were therefore liable for the officers' actions: We conclude that Wayne County Corporation Counsel's involvement in drafting a letter to the Bible Believers, and in sanctioning the Deputy Chiefs' decision to remove the Bible Believers from the Festival, easily resolves the matter of municipal liability. “Monell is a case about responsibility.” Pembaur v. City of Cincinnati, 475 U.S. 469, 478 (1986). Therefore, with respect to a single decision, municipal liability is appropriate “where the decisionmaker possesses final authority to establish policy with respect to the action ordered.” Id. at 481 (footnote omitted). Corporation Counsel informed the Bible Believers by way of letter that “under state law and local ordinances, individuals can be held criminally accountable for conduct which has the tendency to incite riotous behavior or otherwise disturb the peace.” Then the Deputy Chiefs consulted Corporation Counsel at the Festival to confirm that they could threaten the Bible Believers with arrest for disorderly conduct because the Bible Believers speech had attracted an unruly crowd of teenagers. As discussed at length, speech cannot be proscribed simply because it has a “tendency” to cause unrest or because people reacted violently in response to the speech. Ashcroft v. Free Speech Coal., 535 U.S. 234, 253 (2002) (“[T]he mere tendency of speech to encourage unlawful acts is not a sufficient reason for banning it.”). Corporation Counsel's misstatement of the law in a letter may not constitute an official policy, but her direction and authorization for the Deputy Chiefs to threaten the Bible Believers with arrest based on the prevailing circumstances is certainly an action for which she “possesse[d] final authority to establish municipal policy.” See Wayne Cty. Muni. Code § 4.312 (Corporation counsel is the chief legal advisor to the County CEO and “all County agencies,” including the Sheriff's Office). The relevant facts in this case bearing on municipal liability are substantially similar to the facts of Pembaur. See 475 U.S. at 484 (“The Deputy Sheriffs who attempted to serve the capiases at petitioner's clinic found themselves in a difficult situation. Unsure of the proper course of action to follow, they sought instructions from their supervisors. The instructions 4 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 5 of 11 Pg ID 570 they received were to follow the orders of the County Prosecutor. The Prosecutor made a considered decision based on his understanding of the law and commanded the officers forcibly to enter petitioner's clinic. That decision directly caused the violation of Petitioner's Fourth Amendment rights.”). Therefore, Wayne County is liable. Bible Believers, 805 F.3d at 260–61. Judge Gibbons wrote a dissenting opinion. In her dissent, she read the majority’s opinion as “admit[ting] that Corporations Counsel['s] misstatement of the law in the letter responding to Bible Believers does not amount to an official policy.” Id. at 272 (Gibbons, J., dissenting). Furthermore, Judge Gibbons stated that the Corporation Counsel did not have final decisionmaking authority: She might have recommended to the Deputy Chiefs to remove the Bible Believers from the festival, but the recommendation did not have the force of County policy. Judge Gibbons did not dispute that the Deputy Chiefs met with Corporation Counsel prior to removing the Bible Believers. No other judge spoke to the issue of municipal liability. III. Wayne County’s Motion For Relief From Judgment On remand, Wayne County has filed a motion for relief from judgment under Civil Rule 60(b)(1). The motion argues that there was no evidence that the Deputy Chiefs spoke with Corporation Counsel about the Bible Believers during the festival. In support, Wayne County attached an affidavit from the Corporation Counsel stating that “[a]t no time on June 15, 2012, or at any other point during the Arab Festival, did I communicate with Deputy Chief Dennis Richardson, Ms. Ursula Henry, or any other Wayne County employee regarding what action, if any, should be taken by the Wayne County Sheriff’s Office towards the Bible Believers.” Mot. Relief, Elhasan Aff. ¶ 4, ECF No. 46-1. The Bible Believers’ Response agrees that there is no evidence Corporation Counsel 5 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 6 of 11 Pg ID 571 spoke with the Deputy Chiefs during the Festival. Instead, the Deputy Chiefs apparently spoke with Ursula Henry, the legal advisor to the Wayne County Sheriffs’ Office. The briefing and the Sixth Circuit's prior panel decision are consistent that the Deputy Chiefs met with the Sheriffs' legal advisor, not the Corporation Counsel. See Bible Believers v. Wayne Cnty., 765 F.3d 578, 585 (6th Cir. 2013) (panel decision) ("Deputy Chief Richardson stepped away briefly to confer with the Director of Legal Affairs for the WCSO and then told Chavez, 'You need to leave. If you don't leave, we're going to cite you for disorderly. You're creating a disturbance. I mean, look at your people here. This is crazy!' Officers then escorted the Bible Believers out."). The Sixth Circuit’s opinion conflates the Sheriffs’ legal advisor with the Corporation Counsel. Neither party has identified evidence that the Sheriff's legal advisor had final policymaking authority necessary to establish municipal liability. And neither party has explained what connection, if any, the Sheriff's legal advisor has to the Corporation Counsel. DISCUSSION In general, district courts make factual findings and draw legal conclusions, which are then reviewed by the appellate courts. The appellate court's conclusions are then binding on the lower court under the doctrine of the law of the case, and the mandate rule. "Under the doctrine of law of the case, findings made at one point in the litigation become the law of the case for subsequent stages of that same litigation.” United States v. Moored, 38 F.3d 1419, 1421 (6th Cir.1994). A complementary doctrine is the mandate rule, under which the district court must adhere to the commands of the superior court. Allard Enters. Inc. v. Advanced Programming Res., Inc., 249 F.3d 564, 569 (6th Cir. 2001). "The trial court is 6 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 7 of 11 Pg ID 572 required to implement both the letter and the spirit of the appellate court's mandate, taking into account the appellate court's opinion and the circumstances it embraces." Westside Mothers v. Olszewski, 454 F.3d 532, 538 (6th Cir. 2006). "This rule of practice promotes the finality and efficiency of the judicial process by protecting against the agitation of settled issues." Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816 (1988) (citation omitted). There are very limited exceptions to the doctrine of the law of the case and the mandate rule. Civil Rule 60(b) allows for a district court to relieve a party "from a final judgment, order, or proceeding" due to "mistake, inadvertence, surprise, or excusable neglect." Fed. R. Civ. P. 60(b). A district court can grant relief from an appellate court's earlier ruling in one of three exceptional circumstances: "(1) where substantially different evidence is raised on subsequent trial; (2) where a subsequent contrary view of the law is decided by the controlling authority; or (3) where a decision is clearly erroneous and would work a manifest injustice." Westside Mothers, 454 F.3d at 538. The issue here is whether the Sixth Circuit's "decision is clearly erroneous and would work a manifest injustice." The parties agree that the Sixth Circuit found a fact — that "Deputy Chiefs Richardson and Jaafar conferred with Corporation Counsel" immediately prior to escorting the Bible Believers out of the festival — that is unsupported by the record. The opinion's factual statement was therefore clearly erroneous. The more difficult question is whether the error "would work a manifest injustice." The Bible Believers argue that the narrow exception is not satisfied here because the Sixth Circuit gave alternative justifications for its finding of municipal liability. They also contend 7 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 8 of 11 Pg ID 573 that, even if the Sixth Circuit's opinion did not give alternative justifications, the Corporation Counsel's letter, standing alone, established an official policy or custom. I. The Factual Error Was Necessary To The Sixth Circuit's Reasoning The Sixth Circuit's opinion does not determine whether the letter, standing alone, constituted an official policy. The opinion's analysis begins by stating that there were two relevant ways that a plaintiff could establish an official policy. First, "she may provide evidence of a formal policy officially adopted by the county." And second, "a single unconstitutional act or decision, when taken by an authorized decisionmaker, may be considered a policy and thus subject a county to liability." Bible Believers, 805 F.3d at 260. The court began its application section by "conclud[ing] that Wayne County Corporation Counsel's involvement in drafting a letter to the Bible Believers, and in sanctioning the Deputy Chiefs' decision to remove the Bible Believers from the Festival, easily resolves the matter of municipal liability." Id. If that were all the opinion said, the Court might agree that there were two independent bases for imposing municipal liability. The two legal premises align with the two factual predicates. The structure of the opinion would therefore support finding that the letter was a "formal policy officially adopted by the county," and the Corporation Counsel's sanctioning of the Deputy Chiefs' decision to remove the Bible Believers was "a single unconstitutional act or decision . . . taken by an unauthorized decisionmaker." Id. But that is not all that the opinion stated. A few sentences later: "Corporation Counsel's misstatement of the law in a letter may not constitute an official policy, but her direction and authorization for the Deputy Chiefs to threaten the Bible Believers with arrest based on the prevailing circumstances is certainly an action for which she possessed final 8 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 9 of 11 Pg ID 574 authority to establish municipal policy." Id. (emphasis added). Judge Gibbons interpreted the sentence to mean that the majority "admits that Corporations Counsel['s] misstatement of the law in the letter responding to Bible Believers does not amount to an official policy." Id. at 272 (Gibbons, J., dissenting). She read the majority opinion to hold that Corporation Counsel's instruction advising the Deputy Chiefs to threaten to issue the Bible Believers a citation was the sole basis for imposing municipal liability. Id. The best reading of the opinion is that the Sixth Circuit did not resolve whether the letter, standing alone, constituted an official policy that caused the constitutional harm. Rather, because the Sixth Circuit found that the Corporation Counsel's purported direction to the Deputy Chiefs to threaten the Bible Believers with arrest established the County's liability, it did not need to resolve the question. This reading supports a natural interpretation of the Sixth Circuit's reasoning that "Corporation Counsel's misstatement of the law in a letter may not constitute an official policy." It explains why the Sixth Circuit did not analyze whether the letter caused the constitutional harm. And it explains why the Sixth Circuit relied almost exclusively on Pembaur, a case that involved a single unconstitutional act by a final decisionmaker, but not a formal policy. Accordingly, the Sixth Circuit's opinion contains a clearly erroneous fact that would work a manifest injustice, and the Court will grant Wayne County's motion for relief from judgment. II. Proceedings Moving Forward The parties have not yet engaged in any discovery in the case because the Defendants filed their motion for summary judgment shortly after the case was filed. Judge Duggan's resolution of the motion for summary judgment so early in the case was 9 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 10 of 11 Pg ID 575 consistent with the need to resolve questions of qualified immunity as early as possible. And the Sixth Circuit's opinion resolved the qualified immunity issue. The Court will therefore treat the case as it would any other dispute with unresolved legal and factual issues, and allow the parties to engage in discovery and file summary judgment motions on the question of municipal liability. The parties may make any argument regarding municipal liability that is supported by the record.3 The parties should file a joint discovery plan no later than January 29, 2016. The Court will set a scheduling conference for February 22, 2016 at 2:00 p.m. The Court will not allow more than ninety days of discovery. The discovery plan should list three potential discovery masters. If the parties cannot resolve discovery disputes amicably, and instead resort to motion practice, the Court will appoint a discovery master to expedite the discovery process. ORDER WHEREFORE, it is hereby ORDERED that the case be REOPENED. IT IS FURTHER ORDERED that Plaintiffs' Motion For Judgment (document no. 45) is DENIED. IT IS FURTHER ORDERED that Defendants' Motion For Relief From Judgment (document no. 46) is GRANTED. 3 The Defendants state in their brief that the Bible Believers had the opportunity to request discovery but failed to do so. The Court notes that Wayne County refused to participate in formulating a Rule 26 discovery plan and filed their motion to dismiss before the date of the scheduling conference. Their earlier refusal to participate in discovery was "due to the fact that qualified immunity bars Plaintiffs' claims and is an adequate basis to object to discovery." Pl.'s Rule 26(f) Rep., ECF No. 11. Now that qualified immunity is no longer an issue, discovery is appropriate. 10 2:12-cv-14236-SJM-DRG Doc # 52 Filed 01/06/16 Pg 11 of 11 Pg ID 576 IT IS FURTHER ORDERED that the parties should submit a joint discovery plan no later than January 29, 2016, and that the Court will set a scheduling conference for February 22, 2016 at 2:00 p.m. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: January 6, 2016 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on January 6, 2016, by electronic and/or ordinary mail. s/Carol Cohron Case Manager 11

=== OPINION ===

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT CITY OF OAKLAND, Plaintiff-Appellant, v. LORETTA E. LYNCH, Attorney General of the United States; MELINDA HAAG, United States Attorney for the Northern District of California, Defendants-Appellees. No. 13-15391 D.C. No. 3:12-cv-05245- MEJ OPINION Appeal from the United States District Court for the Northern District of California Maria-Elena James, Magistrate Judge, Presiding Argued and Submitted February 3, 2015—San Francisco, California Filed August 20, 2015 Before: Richard C. Tallman and Johnnie B. Rawlinson, Circuit Judges, and Stephen Joseph Murphy, District Judge.* Opinion by Judge Murphy * The Honorable Stephen Joseph Murphy, III, District Judge for the U.S. District Court for the Eastern District of Michigan, sitting by designation. 2 CITY OF OAKLAND V. LYNCH SUMMARY** Article III Standing / Jurisdiction The panel affirmed the district court’s order dismissing for lack of jurisdiction the City of Oakland’s collateral attack under the Administrative Procedure Act challenging the government’s filing of a civil in rem forfeiture action against Harborside Health Clinic, a medical marijuana dispensary. The panel held that Oakland had standing to bring suit under Article III where Oakland alleged a sufficient injury with respect to the erosion of its tax revenues. The panel also held, however, that judicial review under the Administrative Procedure Act was precluded because the government’s decision to file the forfeiture action was committed to agency discretion by law, and because allowing the suit to proceed forfeiture would framework. impermissibly disrupt the existing COUNSEL Cedric C. Chao (argued), Stanley J. Panikowski, Roy K. McDonald, Kathleen S. Kizer, and Saori Kaji, DLA Piper LLP (US), San Francisco, California; Barbara J. Parker and Kiran C. Jain, Oakland City Attorney, Oakland, California, for Plaintiff-Appellant. ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. CITY OF OAKLAND V. LYNCH 3 Stuart F. Delery, Assistant Attorney General, Melinda Haag, United States Attorney, Mark B. Stern and Adam C. Jed (argued), Attorney, Civil Division, United States Department of Justice, Washington, D.C., for Defendants-Appellees. OPINION MURPHY, District Judge: I. INTRODUCTION The City of Oakland contests the Government’s filing of a civil in rem forfeiture action against Harborside Health Clinic, a medical marijuana dispensary acting in accordance with local and state laws but in violation of the Controlled Substances Act. Because Oakland lacks a property interest in Harborside, it was unable to participate in the forfeiture action. Instead, Oakland initiated a collateral attack against the Government under the Administrative Procedure Act. The Government moved for dismissal pursuant to Rule 12(b)(1), for lack of subject matter jurisdiction, and Rule 12(b)(6), for failure to state a claim. Oakland appeals from the district court’s order granting dismissal for lack of subject matter jurisdiction. The Government asserts that Oakland lacks Article III standing, that judicial review is precluded, and that, if the APA applies, Oakland’s suit is barred because the forfeiture action does not constitute “final agency action” and because Oakland has another “adequate remedy in court.” We have jurisdiction under 28 U.S.C. § 1291. We conclude that Oakland has Article III standing, but that judicial review is precluded. We therefore affirm the district court. 4 CITY OF OAKLAND V. LYNCH II. BACKGROUND On July 9, 2012, the United States filed a civil in rem forfeiture action pursuant to 21 U.S.C. § 881(a)(7) against the located at 1840 improvements real property and Embarcadero, Oakland, California. United States v. Real Prop. & Improvements Located at 1840 Embarcadero, Oakland, Cal., Case No. C 12-3567. The action targeted Harborside Health Center, a retail marijuana store that distributes medical marijuana legally under state law but allegedly in violation of the Controlled Substances Act (“CSA”), 21 U.S.C. §§ 841 and 856. Because of Harborside’s purported violations of the CSA, the Government asserts the property is subject to forfeiture. 21 U.S.C. § 881(a)(7). Pursuant to 18 U.S.C. § 983 and Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, “[a] person who asserts an interest in the defendant property may contest the forfeiture by filing a claim in the court where the action is pending.” Fed. R. Civ. P. Supp. R. G(5)(a)(i). Because Oakland does not assert an interest in the Harborside property, it did not file a claim in the forfeiture action. Instead, Oakland filed the instant action, seeking a “declaratory judgment that Defendants and any agency under their authority have no right to seek civil forfeiture of the real property located at 1840 Embarcadero, Oakland, California based on purported violations of the Controlled Substances Act,” as well as injunctive relief prohibiting the Government from seeking forfeiture of the property. The Government moved to dismiss Oakland’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of subject matter CITY OF OAKLAND V. LYNCH 5 jurisdiction, and Rule 12(b)(6), for failure to state an actionable claim. Oakland asserts federal question jurisdiction under the (“APA”), 5 U.S.C. Administrative Procedure Act §§ 701–706. Although the United States is generally immune from suit, the APA waives sovereign immunity and provides for judicial review of executive action if certain requirements are met. Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 132 S. Ct. 2199, 2204 (2012). Generally, a plaintiff must be seeking non-monetary relief for legal wrongs resulting from a final action undertaken by an agency or by an agency officer or employee. Id. The plaintiff must also show a lack of another adequate judicial remedy. 5 U.S.C. § 704. In this case, the district court granted the Government’s 12(b)(1) motion, finding both that the Government’s action was not final under the APA, and that Supplemental Rule G(5)(a)(i) constitutes an adequate judicial remedy. Because the district court found it lacked subject matter jurisdiction, it did not consider the Government’s 12(b)(6) motion. Oakland timely appealed from the district court’s decision. In addition to the issue of whether the district court has subject matter jurisdiction over Oakland’s action for declaratory judgment and injunctive relief, the Government questions, for the first time, whether Oakland has standing to sue. 6 CITY OF OAKLAND V. LYNCH III. STANDING On appeal, the Government asserts that Oakland lacks standing under Article III.1 “A suit brought by a plaintiff without Article III standing is not a ‘case or controversy,’ and an Article III federal court therefore lacks subject matter jurisdiction over the suit.” Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004). “If a plaintiff lacks Article III standing, Congress may not confer standing on that plaintiff by statute.” Id. Because constitutional standing implicates jurisdiction, “a challenge to constitutional standing is one ‘which we are required to consider, even though raised for the first time on appeal.’” Laub v. U.S. Dep’t of Interior, 342 F.3d 1080, 1085 (9th Cir. 2003) (quoting Newdow v. U.S. Congress, 313 F.3d 500, 503 (9th Cir. 2002 . Standing requires injury, causation, and redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). “[A]n injury must be concrete, particularized, and actual or imminent . . . .” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013) (internal citations and quotation marks omitted). The Government does not dispute that, if Oakland demonstrates an injury “fairly traceable to the challenged action,” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 1 The Government also asserts, for the first time on appeal, that Oakland should not be permitted to bring suit on the basis of prudential standing. We will not consider the argument, because “a party waives objections to nonconstitutional standing not properly raised before the district court.” Pershing Park Villas Homeowners Ass’n v. United Pac. Ins. Co., 219 F.3d 895, 899 (9th Cir. 2000). In any case, the Supreme Court’s recent decision in Lexmark International, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1386–87 (2014), calls into question the viability of the prudential standing doctrine. CITY OF OAKLAND V. LYNCH 7 Inc., 528 U.S. 167, 180 (2000), it would be redressable by a favorable decision. Oakland cites three direct injuries. First, it asserts injury from an expected loss of tax revenue. Second, it states that it “will suffer a rise in crime and diversion of police resources due to the increase in black market sales of cannabis that will follow if the forfeiture action succeeds.” Third, Oakland argues that a forfeiture of the Harborside dispensary will injure its “proprietary interest in regulating and taxing medical cannabis and providing patients safe and affordable access to medicinal quality cannabis in accordance with California law.” Because we find the expected loss of tax revenue constitutionally sufficient, we decline to address the other two alleged injuries.2 Oakland projected it would receive more than $1.4 million in tax revenues from the city’s four permitted dispensaries in 2012, “enough to pay for a dozen badly needed additional police officers or firefighters.” A substantial portion of this sum would be attributable to Harborside, as it is “reputed to be the largest dispensary in the country.” As of October 10, 2012, Harborside had “paid city and state taxes in excess of one million dollars,” and “customers pay an 8.75% sales tax on all purchases.” 2 Oakland also briefly references potential injuries to its citizens. “If the DOJ succeeds in its forfeiture action, Harborside will not have a secure and reliable place in which to operate,” and “patients cannot obtain the medicine that California voters have decided should be available to them.” As a municipality, however, Oakland may not assert injuries to its citizens, but must allege injury of its own. City of Sausalito v. O’Neill, 386 F.3d 1186, 1197 (9th Cir. 2004). 8 CITY OF OAKLAND V. LYNCH An expected loss of tax revenue can constitute a sufficient injury for purposes of Article III standing. In City of Sausalito v. O’Neill, Sausalito, California brought suit to enjoin the National Park Service (“NPS”) from implementing a plan to develop and rehabilitate a former military base adjacent to the city. 386 F.3d 1186, 1194 (9th Cir. 2004). Sausalito alleged the plan violated a number of environmentally-oriented federal statutes. Id. To establish Article III injury, it cited the harm that would result from the addition of an expected 2,700 daily visitors to the city, including congested roadways, increased crime, and lost sales and property tax revenue (“due to impaired vehicular movement and commerce rendering Sausalito less attractive to business”). Id. at 1198. The district court held that Sausalito sufficiently demonstrated Article III injury, and we affirmed, finding the asserted harm “cognizable as both an aesthetic injury and . . . as an economic injury.” Id. at 1198–99. Oakland’s expected loss of tax revenue satisfies the requirements of Article III. In Sausalito, it was conceded that the NPS plan would “result in an increase in local traffic, an increase in air pollutant emissions, and an incremental contribution to the cumulative noise environment.” Id. at 1199. Because Sausalito alleged “that the aesthetic damage will erode its tax revenue,” we found economic injury that was actual or imminent, and not conjectural or hypothetical. Id. Oakland’s injury is even less speculative. If Harborside is closed, it will no longer provide Oakland with tax revenue, either directly through income taxes or indirectly through customer sales taxes. And our precedent makes clear that the deprivation of revenue constitutes injury under Article III. The Government’s argument to the contrary is unavailing. It argues that Oakland’s “claim of lost tax revenues” is CITY OF OAKLAND V. LYNCH 9 uncertain, because it “assumes that a forfeiture will be ordered, that marijuana sales are not diverted to other dispensaries in Oakland, and that the new tenant of the 1840 Embarcadero property will provide the City with less revenue than the dispensary.” We agree that Oakland’s claim relies on a forfeiture being ordered, but find that this alone is not so speculative as to undermine the claim. See Susan B. Anthony List v. Driehaus, 134 S. Ct. 2334, 2341 (2014) (“An allegation of future injury may suffice if . . . there is a substantial risk that the harm will occur.” (internal quotation marks omitted . We give no weight to the unsupported claims that other dispensaries will see increased sales to make up for Harborside’s losses, or that a new tenant might provide more tax revenue than Harborside. It is the Government’s assertions that are speculative; what is certain is that closing Harborside will lead to a real and immediate erosion in Oakland’s tax revenues. We find that Oakland has standing to bring suit under Article III. Oakland has alleged a sufficient injury with respect to the erosion of its tax revenues. The loss of revenues would be directly attributable to the Government’s forfeiture action and redressable by a favorable ruling. IV. JUDICIAL REVIEW UNDER THE APA In addition to meeting the requirements of constitutional standing, “[a] plaintiff must also satisfy the non-constitutional standing requirements of the statute under which he or she seeks to bring suit.” City of Sausalito, 386 F.3d at 1199. Unlike Article III standing, non-constitutional analysis is a “purely statutory inquiry” that “does not go to our subject matter jurisdiction.” Id. The Government argues that the APA 10 CITY OF OAKLAND V. LYNCH provides no basis for Oakland to bring a collateral action to enjoin the forfeiture proceeding. We agree. As a threshold matter, the APA does not apply if the “agency action is committed to agency discretion by law” or if “statutes preclude judicial review.” 5 U.S.C. § 701(a)(1), (2). The APA does not “confer[] authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.” Id. § 702. Because the Government’s decision to file the forfeiture action is committed to agency discretion, and because Oakland’s suit is impliedly forbidden by the existence of the forfeiture statute, judicial review is precluded. “[L]itigation decisions are generally committed to agency discretion by law, and are not subject to judicial review under the APA.” Didrickson v. U.S. Dep’t of Interior, 982 F.2d 1332, 1339 (9th Cir. 1992). “[R]eview is precluded when plaintiff’s complaint is primarily that the agency made the wrong choice when making an informed judgment.” Merrill Ditch-Liners, Inc. v. Pablo, 670 F.2d 139, 140 (9th Cir. 1982) (internal quotation marks omitted). Here, the Government made an informed judgment to initiate a civil forfeiture proceeding against Harborside. It had to consider the likelihood that a violation actually occurred, whether agency resources were available and should be expended, whether an action would be likely to succeed if initiated, and whether the action was consistent with the Government’s policies and goals. See Heckler v. Chaney, 470 U.S. 821, 831–32 (1985) (identifying these factors as important when considering whether an exercise of discretion is suitable for judicial review). The Government’s decision relied on the exercise of the equivalent of prosecutorial CITY OF OAKLAND V. LYNCH 11 discretion and is thus immune from judicial review under the APA. See Didrickson, 982 F.2d at 1339. The existing forfeiture framework also impliedly forbids judicial review of Oakland’s claims. It is a “well-established principle that, in most contexts, a precisely drawn, detailed statute pre-empts more general remedies.” Hinck v. United States, 550 U.S. 501, 506 (2007) (internal quotation marks omitted). “Congress did not intend the general grant of review in the APA to duplicate existing procedures for review of agency action.” Bowen v. Massachusetts, 487 U.S. 879, 903 (1988). In Hinck, the Supreme Court held that a section of the Internal Revenue Code provided the plaintiff taxpayers with an adequate remedy, and that judicial review was therefore not available, because the code section “provides a forum for adjudication, a limited class of potential plaintiffs, a statute of limitations, a standard of review, and authorization for judicial relief.” 550 U.S. at 506. Granting Oakland a legal remedy under the APA would impermissibly provide for duplicative review. As with the statute in Hinck, the forfeiture statute provides a forum for adjudication (the court in which the action is brought), a limited class of potential plaintiffs (“any person claiming an interest in the seized property”), a limitations period (claims must be filed within “30 days after the date of service of the Government’s complaint or . . . after the date of final publication of notice of the filing of the complaint”), a standard of review (the claimant may dispute that the property in question was involved in a prohibited transaction or attempted transaction), and authorization for judicial relief (in the forfeiture proceeding). 18 U.S.C. §§ 981–983. Oakland’s complaint seeks “a declaratory judgment that [the Government has] no right to seek civil forfeiture of the 12 CITY OF OAKLAND V. LYNCH [Harborside] property” and “a permanent injunction enjoining [the Government] . . . from seeking forfeiture of the [Harborside] property.” The forfeiture proceeding, and not a collateral action, is the proper venue to seek such relief. The fact that Oakland is unable to participate in the forfeiture action, because it does not possess an interest in the Harborside property, is irrelevant. Congress created a framework permitting only certain parties to bring claims, and allowing collateral attacks would disrupt that framework by giving third parties a greater ability to initiate challenges. Supplemental Rule G(5)(a)(ii) requires an interested party to file a claim within 30 days of service. A general civil action under the APA, however, is governed by a six-year limitations period. 28 U.S.C. § 2401(a). Permitting parties to file under the APA and circumvent the short deadlines Congress established in the forfeiture law would make mush of the law. Additionally, allowing a collateral action to proceed would render meaningless the forfeiture statute’s clear language limiting parties who may institute a forfeiture challenge to those with a property interest. the Secretary of Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 132 S. Ct. 2199 (2012), upon which Oakland relies, is inapposite. In that case, the owner of property near the site of a proposed Indian casino filed an action under the APA challenging Interior’s decision—made pursuant to the Indian Reorganization Act—to take land into trust on behalf of the tribe. Id. at 2202–03. The plaintiff alleged economic, environmental, and aesthetic harms, but did not assert a property interest in the land. Id. Because the APA’s waiver of immunity does not apply if another statute “grants consent to suit [and] expressly or impliedly forbids the relief which is sought,” 5 U.S.C. the CITY OF OAKLAND V. LYNCH 13 § 702, and because a separate statute, the Quiet Title Act, authorized suits by plaintiffs with a “right, title, or interest” in real property, 28 U.S.C. § 2409a(d), the federal government argued that the plaintiff’s suit was barred. Match- E-Be-Nash, 132 S. Ct. at 2204–05. But the Supreme Court held that the suit was not barred, reasoning that “[w]hen a statute is not addressed to the type of grievance which the plaintiff seeks to assert, then the statute cannot prevent an APA suit.” Id. at 2205 (internal quotation omitted). The Supreme Court explained that the plaintiff was “bringing a different claim” and “seeking different relief” from “the kind the [Quiet Title Act] addresses.” Id. at 2209. Oakland argues that, because its grievances concern public health and safety, tax revenues, and its regulatory scheme, which are different from Harborside’s grievances, it is not barred from bringing suit under the APA. The argument fails, however, because both parties do in fact seek the same relief: to stop the forfeiture. Finally, even if Oakland overcame the preceding, Section 704 of the APA would nonetheless bar its claims. Judicial review only applies to “[a]gency action made reviewable by statute” (not relevant here), and “final agency action for which there is no other adequate remedy in a court . . . .” 5 U.S.C. § 704 (emphasis added). The Government’s decision to file the forefeiture action is not “final,” because it is not an action “by which rights or obligations have been determined, or from which legal consequences will flow.” Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (internal citations and quotation marks omitted). A forfeiture action simply makes evident the Government’s intention to challenge the status quo; any rights, obligations, and legal consequences are to be 14 CITY OF OAKLAND V. LYNCH determined later by a judge. And as discussed above, there is another adequate remedy—the forfeiture action. V. CONCLUSION The City of Oakland has Article III standing to challenge the Government’s forfeiture action because the closing of Harborside will lead to a decrease in property and sales tax revenues. Judicial review under the Administrative Procedure Act is precluded, however, because the Government’s decision to file the forfeiture action is committed to agency discretion by law, and because allowing the suit to proceed would forfeiture framework. impermissibly disrupt the existing For these reasons, we AFFIRM the district court’s dismissal in favor of the defendant, the United States. Each party shall bear its own costs on appeal.

=== ORDER GRANTING IN PART AND DENYING IN PART FOUAD FARAJ’S MOTION FOR ACQUITTAL (document no. 252) ===

2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 1 of 19 Pg ID 5650 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION UNITED STATES OF AMERICA, Plaintiff, Case No. 13-cr-20564 v. D-3 FOUAD FARAJ, Defendant. / HONORABLE STEPHEN J. MURPHY, III ORDER GRANTING IN PART AND DENYING IN PART FOUAD FARAJ’S MOTION FOR ACQUITTAL (document no. 252) A jury convicted Fouad Faraj (“Fouad”) of engaging in a continuing criminal enterprise, 21 U.S.C. § 848(a) & (c), and of conspiring to sell between fifty and one hundred kilograms of marijuana, id. §§ 841 & 846. ECF No. 249. At the close of the government’s case and again at the close of trial, Fouad moved for a judgment of acquittal, arguing that there was insufficient evidence to support his conviction. The Court took the motions under advisement. Following the jury’s verdict, Fouad again moved for judgment of acquittal, or in the alternative, for a new trial. ECF No. 252. The Court ordered the government to file a supplemental brief specifically addressing whether Fouad was an organizer, supervisor, or manager of the drug organization. Having reviewed all the submissions and reexamined the trial transcript, the Court finds that there was insufficient evidence that Fouad was an organizer, supervisor, or manager within the meaning of 21 U.S.C. § 848(c)(2)(A). Accordingly, the Court will grant Fouad’s motion with regard to that count only. Should the government appeal and the Sixth Circuit find that there was sufficient evidence that Fouad engaged in a continuing criminal enterprise, the Court will 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 2 of 19 Pg ID 5651 order a new trial pursuant to Criminal Rule 33. Finally, the Court will deny Fouad's motion for acquittal of the conspiracy count. I. The Drug Sales Centered Around Fouad's House BACKGROUND In the spring of 2009, Fouad’s younger brother Mohamed approached a childhood- friend, Hafez Hammoud, and asked Hammoud to help him sell marijuana. Tr. 10/30/2014 pg 66, ECF No. 269. Later that day, Mohamed and Hammoud met at Fouad's house along Rutherford Street in Detroit, and agreed to deal drugs from the home. Id. at 69. Customers would arrive from the City of Dearborn, which was only a few blocks away from Rutherford. Mohamed would call Hammoud, "tell [him] when to serve them up, what car they would be in, what they wanted, and [Hammoud] would . . . take care of the hand-to-hand sales." Id. A few months later, a man named "Ziggy" approached Mohamed and Hammoud while they were standing on the street. Id. at 71–72. Ziggy offered to supply them with a more potent form of marijuana called "Kush." Id. They tested it out and found that although it was more expensive, it sold at a faster rate than the marijuana they had peddled previously. Id. at 73. The only problem was they needed money to buy an initial amount. Id. at 73. They approached another of Fouad's brothers, Abed, who invested $9,000 to purchase four pounds of Kush.1 Id. at 74–75. Once they began selling Kush, the crew's business increased dramatically. Id at 75. Hammoud and Mohamed hired several local teenagers to help them with the street sales. Id. at 77–79. They also moved the operation to abandoned and vacant homes along Rutherford Street. Tr. 10/30/2014 pg 82, ECF No. 269; Tr. 11/10/2014 pgs 69, 73, ECF No. 1The jury acquitted Abed of all charges. 2 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 3 of 19 Pg ID 5652 275. Fouad owned a vacant house that Hammoud used to package the marijuana each night. Tr. 10/30/2014 pg 83, ECF No. 269. From 9:00 a.m. until 2:00 a.m. they would sell drugs along the street. Id. Customers would call Hammoud on his drug phone and provide a description of their car. Id. at 80–81. When the car arrived, Hammoud would approach, ask what the customer wanted, and receive payment. Id. at 79–81. He would then relay the order to the younger workers, who would retrieve the drugs from burnt-out houses and take the drugs to the customer. Id. at 81, 84. During 2009, several of the houses along Rutherford Street were unoccupied, but not yet abandoned. "[T]he brothers decided that they should burn it down, burn the houses down. It was to serve a dual purpose: To make them abandoned completely for us to use, and . . . Fouad was hoping the fire would sweep his houses up and get him some insurance money." Id. at 95. Mohamed therefore ordered one of the youths to burn down several unoccupied houses along Rutherford Street. Id. At some point in 2009, Mohamed and Hammoud approached Fouad and told him that they needed a safe-house, somewhere they could flee to if they saw the police approaching. Id. at 90. They told Fouad that it was harder for police to get a warrant to search an occupied residence, and that use of Fouad's house would be helpful. Id. Fouad agreed that they could use his home as a safe-house, and in return Mohamed and Hammoud paid Fouad between $200 and $300 per day. Id. at 87, 90–91, 149. Fouad also allowed them to use the electric meters behind his house. Id. at 107–08. Hammoud or one of the hired teenagers would hook up a space heater to Fouad's electric meter. Id. They would then place the space heater in one of the abandoned houses, and use it to stay warm while selling drugs during the winter months. Id. 3 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 4 of 19 Pg ID 5653 At trial, the government asked one of the teenage workers whether, during the winter of 2009, "did anybody start working as supervisors watching over you all workers . . . [i]n terms of watching over you all and warning you about police presence." Tr. 11/10/2014 pg 121, ECF No. 275. The worker responded "Yeah . . . Abed and Fouad." Id. The testimony does not offer any additional facts, or any particular incidents showing Fouad's supervisory role during the winter of 2009. In September of 2010, police arrested one of the teenage workers in the alley behind Fouad's house. Tr. 10/30/2014 pg 157, ECF No. 269. The police found him asleep with an AK-47 sitting in his lap. Id. A few days later, police chased another young worker to Fouad's house, and arrested him on the property's front porch. Tr. 11/5/2014 pg 170, ECF No. 272. Fouad was at home that night, and told the officer that "he didn't give that guy permission to be in his house and he doesn't know who he is." Id. at 172. In the following days, Fouad became nervous because the police were chasing workers to his property. Tr. 10/30/2014 pg 159, ECF No. 269. Fouad did not want his house to be used as a safe-house anymore, and if it was to be used as a safe-house, he wanted more money. Id. at 160. Mohamed, however, was unwilling to pay him a larger portion of the profits. Id. Due to the increased police presence, Mohamed moved the drug sales from Rutherford Street to different parts of the neighborhood, including Greenview Avenue and Longacre Street, a few blocks west of Rutherford. Tr. 10/30/2014 pg 161, ECF No. 269; Tr. 11/10/2014 pg 123, ECF No. 275. In April of 2011, the police arrested Mohamed as he attempted to resupply one of the teenagers working near Longacre street. Tr. 11/10/2014 pg 124, ECF No. 275. The youth escaped. He later told Fouad that Mohamed had been arrested, and gave Fouad that day's drug proceeds. Id. The worker testified that Mohamed 4 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 5 of 19 Pg ID 5654 had "ordered him to give [the money] to [Fouad] or Abed if anything went wrong." Id. at 124–25. Sometime in 2011, the police again arrested Mohamed, this time as the result of a traffic accident. Tr. 11/13/2014 pg 185, ECF No. 277. At the time, Hammoud had taken a temporary break from drug dealing to work as a waiter at a Coney Island style restaurant. Tr. 10/30/2014 pgs 161–62, 166, ECF No. 269. Ali Bazzi, one of the street workers, testified that for two weeks following Mohamed's arrest Fouad "would make sure that all the workers were working, he would control the money." Tr. 11/13/2014 pg 185, ECF No. 277. After that two-week period, Mohamed Ayoub was responsible for running the organization on a day to day basis. Id. The locus of drug dealing stayed at Greenview Avenue until the fall of 2011, when Mohamed moved the organization back to Rutherford. Tr. 10/30/2014 pg 168, ECF No. 269. The organization continued to sell along Rutherford Street until 2013, when the police arrested most of the conspirators. II. Other Testimony Involving Fouad Testimony revealed additional evidence involving Fouad. Officer Wiencek testified that one night he investigated an abandoned house on Rutherford Street. Tr. 11/4/2014 pg 140, ECF No. 271. As he exited the building, Fouad approached him and told him to stop harassing the people who lived in the neighborhood. Id. at 143. The encounter ended with Fouad arrested, and both Fouad and Officer Wiencek going to the hospital.2 Id. at 146. 2After the events leading to his arrest and hospitalization, Fouad apparently filed a civil suit against Officer Wiencek. Part of the settlement included an agreement that Fouad could not speak further about the incident. Based on the Court's concern that the agreement might prevent Fouad from telling his side of the story, the Court prevented any additional testimony regarding the encounter. Id. at 144–45. 5 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 6 of 19 Pg ID 5655 In addition, neighbors testified about seeing Fouad at his house. One neighbor testified that she saw a "pretty flashy van . . . with rims" and another car that had a "chameleon paint" job parked at Fouad's house. Tr. 10/29/2014 pg 129, ECF No. 268. She identified Fouad as the owner of the "flashy van." Id. at 130. And she stated that the area near his house was the center of the drug sales occurring on the block. Id. at 131. Another neighbor similarly testified that people were constantly transacting with cars temporarily stopped in front of Fouad's house. Tr. 11/14/2014 pg 148, ECF No. 278. He also identified Fouad's van, though he associated both the van and the house with a "short stocky guy" and did not explicitly identify Fouad. Id. at 149. And the person who bought the property across the street stated that when Fouad was moving out of the house (Fouad sold his house in 2013), he would sometimes speak with the people selling drugs. Id. at 164. STANDARD OF REVIEW When reviewing a motion for acquittal, the Court reviews the evidence "in the light most favorable to the prosecution." Jackson v. Virginia, 443 U.S. 307, 319 (1979). The Court must then determine "whether any rational trier of fact could have found the contested elements of the crime beyond a reasonable doubt." United States v. Garcia, 758 F.3d 714, 718 (6th Cir. 2014). The defendant “bears a ‘very heavy burden’ when he challenges the sufficiency of the evidence.” United States v. Owens, 426 F.3d 800, 808 (6th Cir. 2005) (quoting United States v. Spearman, 186 F.3d 743, 746 (6th Cir.1999 . The Court neither independently weighs the evidence, nor makes its own assessment of the credibility of the witnesses who testified at trial. United States v. Howard, 621 F.3d 433, 460 (6th Cir. 2010). 6 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 7 of 19 Pg ID 5656 Under Criminal Rule 33, "the court may vacate any judgment and grant a new trial if the interest of justice so requires." Fed. R. Crim. P. 33(a). Unlike a motion for judgment of acquittal under Criminal Rule 29, the court may weigh the evidence and assess the credibility of the witnesses. United States v. Lutz, 154 F.3d 581, 589 (6th Cir.1998). A motion for new trial is premised on the argument that the jury's verdict was against the manifest weight of the evidence. United States v. Hughes, 505 F.3d 578, 593 (6th Cir. 2007). Such motions are granted only in the extraordinary circumstance when the evidence preponderates heavily against the verdict. Id. at 593 (quoting United States v. Turner, 490 F. Supp. 583, 593 (E.D. Mich. 1979). Motions for a new trial are disfavored and should be granted with caution. United States v. Seago, 930 F.2d 482, 488 (6th Cir.1991). DISCUSSION I. Sufficiency Of The Evidence Of Continuing Criminal Enterprise To convict a defendant of engaging in a continuing criminal enterprise, the government must prove: (1) that the defendant committed a felony violation of federal narcotics laws; (2) that the violation was part of a continuing series of three or more drug offenses committed by the defendant; (3) that the defendant committed the series of offenses in concert with five or more persons; (4) that the defendant acted as an organizer, supervisor, or manager with regard to these five or more persons; and (5) that the defendant obtained substantial income or resources from this series of violations. United States v. Burns, 298 F.3d 523, 535 (6th Cir. 2002); 21 U.S.C. § 848(c). Fouad contends that there was insufficient evidence that he acted as an organizer, supervisor, or manager of more than five co-conspirators. The "defendant need not have the same type of relationship with each individual, and the relationships need not exist at 7 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 8 of 19 Pg ID 5657 the same time." United States v. Ward, 37 F.3d 243, 247 (6th Cir. 1994). Furthermore, "the terms organizer, supervisor, or manager are to be given their ordinary meaning." Id. "To satisfy this element, the government must show the defendant specified the supervisees' activities in adequate detail." United States v. Eiland, 738 F.3d 338, 356 (D.C. Cir. 2013) (internal brackets and quotation marks omitted). For example, in United States v. Jones, 801 F.2d 304, 308–09 (8th Cir. 1986)3 the defendant exercised sufficient managerial authority over lower-level drug dealers when he instructed them on the language they could use to refer to drugs over the phone, set prices for the drugs, dictated whether the sales would be cash or credit, told them who they could sell drugs to, forced the customers to pay promptly, and set the quality of the drugs. In English, the Sixth Circuit found that the defendant was a manager over couriers who transported his drugs, as well as accomplices who stored his cocaine at their homes. 925 F.2d at 157. In addition, "[a] person can be found to be under the defendant's organization or supervision because she knew about the drug operation, took orders directly from the defendant and helped in the drug business." United States v. Avery, 128 F.3d 966, 973 (6th Cir. 1997); see also United States v. King, 169 F.3d 1035, 1042 (6th Cir. 1999) (finding defendant had managerial authority over at least five couriers whom the defendant recruited, and who operated at the defendant's direction). 3 In United States v. Baltimore, 482 F. App'x 977, 984 (6th Cir. 2012),Ward, 37 F.3d at 247, United States v. Chalkias, 971 F.2d 1206,1214 (6th Cir. 1992),and United States v. English, 925 F.2d 154, 157 (6th Cir. 1991), the Sixth Circuit cited Jones as persuasive authority. 8 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 9 of 19 Pg ID 5658 A. Mohammed Alhakami Mohammed Alhakami was one of the youths that Mohamed and Hammoud recruited to sell marijuana. Tr. 10/30/2014 pg 95, ECF No. 269. In 2011, Mohamed moved the drug operation to streets west of Rutherford, including Longacre Street. Tr. 11/10/2014, pg 123, ECF No. 275. In April of 2011, the police arrested Mohamed as he attempted to deliver a marijuana resupply to Alhakami. Id. As the police approached, Alhakami jumped a fence and escaped. Id. Alhakami testified that later that day he "gave the marijuana sales money to Fouad" and "let him know that [Mohamed] got arrested at Longacre." Id. at 124. He explained that he "was ordered from [Mohamed] to give [the money] to [Fouad] or Abed if anything went wrong." Id. at 124–25. A jury could find that Fouad exercised supervisory or managerial authority over Alhakami. Admittedly, the testimony does not reveal that Fouad ordered Alhakami to do anything, or took any steps other than receiving the money. Nonetheless, the testimony stated that Mohamed ordered Alhakami to report to Fouad if anything went wrong, and gave a specific incident where Fouad acted in a position of authority. B. Ali Bazzi Ali Bazzi was another street worker in the organization. He testified that at some point in 2011, the police arrested Mohamed due to a traffic accident. Tr. 11/13/2014 pg 185, ECF No. 277. Bazzi testified that for two weeks after the arrest, Fouad "would make sure that all the workers were working, he would control the money." Id. The testimony did not include any additional factual development. It did not specify the time frame to anything more specific than, "I'd say around like 2011." Id. And it did not specify what people were working during the two-week period. The last point is important because many of the 9 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 10 of 19 Pg ID 5659 workers came and went on an intermittent basis. Thus, while a jury could infer that, for those two weeks, Fouad supervised Bazzi, there was insufficient evidence that he supervised anyone else. C. Ali Al-Hisnawi While the government does not mention Al-Hisnawi in its supplemental brief, the Court finds that there was evidence that Fouad had a managerial role over Al-Hisnawi. Hammoud testified that Mohamed and Fouad decided to burn down several unoccupied houses along the street. Mohamed wanted to burn down the houses so he could use the shells to sell drugs; Fouad hoped the fires would consume his houses, so that he could recover insurance money. Tr. 10/30/2014 pgs 94–95, ECF No. 269. While Mohamed was the person who ultimately gave the order to Al-Hisnawi to torch the residences, the jury could find that Fouad occupied a position of authority over Al-Hisnawi when he burned down the buildings. D. The First Few Months Of The Conspiracy The Government also relies on Fouad's role at the beginning of the conspiracy to show that he had a managerial position over five people. During the spring of 2009, Mohamed and Hammoud met at Fouad's house, and decided that they would sell drugs out of the home. Tr. 10/30/2014 pg 69, ECF No. 269. A few months later Ziggy approached Mohamed and Hammoud while they were standing in the street, and offered to supply them with Kush. Id. at 71–72. Mohamed, Hammoud, and Abed later met in Fouad's house; Abed agreed to invest $9,000 in the new product, and the group began selling Kush from abandoned homes down the street. Id. at 74–75. 10 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 11 of 19 Pg ID 5660 Hammoud's testimony about the crew's origin does not establish that Fouad joined the conspiracy, much less that he had a managerial role. Indeed, Hammoud's testimony about the beginning of the drug sales does not mention Fouad, other than to say Mohamed and Hammoud conducted business out of his house. The testimony does not mention any actions that Fouad took. Nor did Hammoud state that Fouad was present at either his initial meeting with Mohamed, or his later meeting with Mohamed and Abed. E. The Bag-Up House After Mohamed and Hammoud began selling Kush, they moved the point of sale to abandoned houses down the street. Tr. 10/30/2014 pg 82, ECF No. 269. Hammoud also used a vacant house on the block, owned by Fouad, to package the marijuana. Id. at 83. And in the winter, Hammoud and the workers connected a space heater to Fouad's electric meter as a way to keep warm while bagging marijuana at night. Id. at 107–08. Even assuming that Fouad acquiesced in the use of his vacant property and electric meters, the evidence does not show that he had managerial authority. Indeed, Hammoud's testimony about this time period does not disclose any instance when Fouad ordered anyone to do anything. Nor did the testimony show that Fouad supervised the bagging operation, or participated in the drug sales. Furthermore, while courts have stated that a person who stores drugs in their home may be a supervisee, see English, 925 F.2d at 157, a person does not become a supervisor merely because he allows others to use his property for drug sales, without exercising some other form of control or supervision. For example, in Ward, 37 F.3d at 249, defendant Ward rented a house where Mark and Edroy Dickens sold drugs. The Court found that Ward had managerial control over Mark and Edroy, but only after noting a specific instance when the brothers acted as Ward's 11 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 12 of 19 Pg ID 5661 enforcers during a drug transaction. Id. Here, unlike in Ward, the testimony did not reveal any specific occurrence when Fouad controlled or supervised the bagging operation, or when the street workers acted at his behest. F. The Safe House At some point in 2009, Mohamed and Hammoud asked Fouad if they could use his property as a safe-house, explaining that it was harder for the police to get a warrant to search an occupied residence. Tr. 10/30/2014 pg 90, ECF No. 269. Fouad agreed to allow people to use his house as a way to evade the police, in return for $200 to $300 per day. Id. at 87. Furthermore, in September of 2010, the police chased a fleeing worker to Fouad's house and arrested the worker on the front porch. Tr. 11/5/2014 pg 170, ECF No. 272. The government argues that the testimony "demonstrated how the defendant acted as a supervisor for the younger workers, someone who the dealers could go to avoid police." Supplemental Br. 6, ECF No. 341. The testimony only showed, however, that workers could go to Fouad's house to avoid police because the Fourth Amendment "has drawn a firm line at the entrance to the house. Absent exigent circumstances, that threshold may not reasonably be crossed without a warrant." Payton v. New York, 445 U.S. 573, 590 (1980). That protection existed regardless of whether Fouad was at home, or undertook any additional actions, managerial or otherwise. But the testimony did not reveal a single instance when Fouad acted to protect or hide the workers, other than by allowing them to flee to his home. Indeed, the only testimony that involves Fouad actually taking an affirmative action was when he told Officer Jaber that "he didn't give that guy permission to be in his house and he doesn't know who he is." Tr. 11/5/2014 pg 172, ECF No. 272. 12 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 13 of 19 Pg ID 5662 And, as explained above, merely renting out his property as a safe house does not establish that he held a managerial position over the workers. G. Fouad's Role In The Winter Of 2009 During his testimony, the government asked Mohammed Alhakami: Q: Now, during the winter of 2009 did anybody start working as supervisors watching over you all workers? A. Supervisors as not making narcotic deals? Q. In terms of watching over you all and warning you about police presence? A. Yeah. Q. Who? A. Abed and Fouad. Tr. 11/10/2014 pg 121, ECF No. 275. Beyond this brief exchange, there is no factual development about Fouad's role supervising workers during the winter of 2009. As the D.C. Circuit recently explained when rejecting similarly conclusory testimony about a criminal defendant's position in an organization's hierarchy, a lay witness's "opinion regarding [defendant's] role has no more weight than the facts upon which it is based, and those facts were insufficient." Eiland, 738 F.3d at 357. Here, the government elicited no additional facts from which a jury could determine that Fouad was a supervisor during the winter of 2009. H. The Decision To Move The Organization After the police arrested several workers in September of 2010, including one on Fouad's front porch, there was a rift between Fouad and Mohamed. According to Hammoud's testimony, the "upper echelon of our crew," which he defined as including Fouad, "started getting nervous about it because people that would run to Fouad's house, 13 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 14 of 19 Pg ID 5663 the police started chasing them there. They started knowing where to follow us." Tr. 10/30/2014 pg 159–60, ECF No. 269. Based on the heightened police presence on the block, "Fouad didn't want his house to be used as a safe house no more, and it was to be used as a safe house, he wanted a bigger cut. [Mohamed] wasn't willing to give him more money and it was just too much to handle." Id. at 160. Shortly thereafter, Mohamed and Hammoud moved the stash house, and Mohamed moved the locus of street sales west to Greenview Avenue. Id. at 160–61. The testimony does not show that Fouad supervised or organized any of the workers. Hammoud's conclusion that Fouad was part of the group's upper echelon, much like Alhakami's statement that Fouad was a supervisor, is only probative to the extent it is buttressed by facts. The testimony revealed that Fouad was concerned because he did not want the police to connect his residence to the drug sales. And he therefore negotiated for a higher price. But it was Mohamed that made the decision not to pay Fouad any additional money for the use of his property. And it was Mohamed and Hammoud who made the decision to move the main stash house from Dearborn to Hammoud's apartment, and to move the drug sale location away from Rutherford Street. An analogous situation would be if a landlord rented commercial space to a tenant. The landlord would not be a supervisor of the tenant's employees. Nor would negotiating with the tenant for higher rent mean the landlord occupied a position of management within the tenant's business. The same principle applies here. I. Fouad's Interaction With Officer Wiencek 14 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 15 of 19 Pg ID 5664 Officer Wiencek testified that Fouad accosted him while he investigated an abandoned house along Rutherford Street. Tr. 11/4/2014 pg 140, ECF No. 271. Taking every inference in favor of the government, the testimony showed at most that Fouad knew the organization was selling drugs out of the abandoned houses and wanted to prevent Officer Wiencek from seizing any contraband. Such evidence could show that Fouad was a part of the conspiracy. But it is not probative of Fouad's role within the organization: A low-level worker, as much as a manager, could take steps to prevent an officer from discovering drugs. Moreover, it does not establish that Fouad exercised authority over any other person because no other conspirator was involved in the incident. J. Other Testimony Several neighbors also testified about the drug transactions along Rutherford Street. Two neighbors testified that the drug sales centered on Fouad's house, that there was a flashy van parked along the street outside the property, and that they associated the vehicle with Fouad. Tr. 10/29/2014 pg 129, ECF No. 268; Tr. 11/14/2014 pg 148, ECF No. 278. But neither neighbor testified that they saw Fouad participate in any drug sales. And the only reason they could connect Fouad to the residence was because his car was parked out front. The testimony demonstrated that the organization was selling drugs around Fouad's house while Fouad was home, but does not otherwise show his role within the organization. And as explained above, merely selling drugs near Fouad's house does not establish that he was a manager within the organization. Another neighbor testified that when Fouad was moving out of his house in 2013 he would occasionally speak with the workers. Tr. 11/14/2014 pg 148, ECF No. 278. But the testimony did not reveal whether the discussion was drug related. A jury could not infer 15 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 16 of 19 Pg ID 5665 from the neighbors' testimony that Fouad managed any of the workers. See Eiland, 738 F.3d at 358 (explaining that testimony showing the defendant met with a drug dealer outside of a restaurant did not support an inference that defendant managed the dealer). K. Fouad Did Not Act Through Co-conspirators The final issue is whether Fouad acted through his co-conspirators to manage low- level workers. In general, "[a]n individual need not have direct communications with participants in order to be their supervisor . . . If a defendant personally hires only the foreman, that defendant is still responsible for organizing the individuals hired by the foreman to work as the crew." United States v. Patrick, 965 F.2d 1390, 1397 (6th Cir. 1992) (citing United States v. Rosenthal, 793 F.2d 1214, 1226 (11th Cir. 1986 . If the rule were otherwise, "drug king pins [could] organize their dealings in such a way as to escape responsibility." King, 169 F.3d at 1043; see also Ward, 37 F.3d at 250 (rejecting government's argument that Ward acted through his co-conspirator and reasoning that "there is simply no proof that Hicks was a 'foreman' for Ward. While Hicks may have been in partnership with Ward, there is insufficient evidence that Hicks was under Ward's control"). The only instance when Fouad arguably acted through an intermediary was when Mohamed ordered Al-Hisnawi to burn down several houses along the street, see Section I.C., supra. Other than that, however, there is no evidence that Fouad gave orders to or supervised Mohamed, Hammoud, or Ayoub, or that their supervision of street workers was on Fouad's behalf. L. Conclusion 16 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 17 of 19 Pg ID 5666 In short, the Court finds that the jury could have found Fouad held a supervisory position over Mohammed Alhakami, Ali Bazzi, and Ali Al-Hisnawi. But there was insufficient evidence that Fouad occupied a managerial position with respect to any other person. While the Court must make every inference in favor of the government, the Court cannot credit testimony that was not given in the case. Accordingly, the Court will grant Fouad's motion for acquittal. II. New Trial Regarding Continuing Criminal Enterprise If the government seeks appellate review and the Sixth Circuit finds that the evidence was sufficient to support the conviction, the Court will nonetheless order a new trial. Fed. R. Crim. P. 33. The evidence showing Fouad's managerial role in the conspiracy was slim, at best. There was no testimony that Fouad ordered anyone to do anything. He was not present at the meetings at the beginning of the conspiracy. Tr. 10/30/2014 pgs 66, 71–72, 74–75, ECF No. 269. He did not know the location of the main stash house. Id. at 136. It was Mohamed, not Fouad, who decided where and when to move the drug sales in 2010 and 2011. Id. at 161. There was no evidence that Fouad directly participated in the sale or packaging of marijuana, other than allowing the crew to use his properties. Indeed, the few mentions of Fouad in the case were buried in four weeks of testimony, much of which was irrelevant to Fouad's role in the enterprise. The case presents the rare extraordinary circumstance when a new trial is warranted. III. Sufficiency Of Evidence Regarding Conspiracy To Sell Marijuana Fouad also argues that there was insufficient evidence that he joined the conspiracy to sell marijuana. To establish a conspiracy under 21 U.S.C. § 846, the government must prove 1) an agreement to violate the drug laws, 2) knowledge and intent to join the 17 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 18 of 19 Pg ID 5667 conspiracy, and 3) participation in the conspiracy. United States v. Martinez, 430 F.3d 317, 330 (6th Cir. 2005). The testimony established that Fouad joined the conspiracy to sell marijuana. In particular, Hammoud testified that Fouad allowed the organization to use his property as a safe house. The organization also used one of his other properties to bag marijuana. And it used his electric meters to stay warm during the winter while selling drugs. In return for use of his house, several witnesses testified that Mohamed ordered the workers to pay Fouad on a regular basis. Furthermore, Mohammed Alhakami testified that on one occasion he gave Fouad money from the day's drug sales. The evidence was therefore sufficient to show that Fouad joined a conspiracy to sell marijuana under 21 U.S.C. § 846. CONCLUSION For the above reasons, the Court will grant Fouad's motion for acquittal of the continuing criminal enterprise count. If the Sixth Circuit disagrees with the Court's analysis, the Court will order a new trial regarding that count. Finally, the Court will deny Fouad's motion for acquittal regarding the conspiracy charge. ORDER WHEREFORE, it is hereby ORDERED that Fouad Faraj's Motion For Judgment Of Acquittal (document no. 252) is GRANTED IN PART and DENIED IN PART. SO ORDERED. Dated: August 17, 2015 s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge 18 2:13-cr-20564-SJM-MAR Doc # 354 Filed 08/17/15 Pg 19 of 19 Pg ID 5668 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on August 17, 2015, by electronic and/or ordinary mail. s/Carol Cohron Case Manager 19

=== OPINION ===

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AIRLINES DIVISION; AIRLINE PROFESSIONALS ASSOCIATION OF THE IBT, LOCAL UNION NO. 1224, Plaintiffs-Appellees, No. 14-16465 D.C. No. 2:14-cv-00043- APG-GWF v. OPINION ALLEGIANT AIR, LLC; ALLEGIANT TRAVEL COMPANY, Defendants-Appellants. Appeal from the United States District Court for the District of Nevada Andrew P. Gordon, District Judge, Presiding Argued and Submitted February 2, 2015—San Francisco, California Filed June 8, 2015 Before: Richard C. Tallman and Johnnie B. Rawlinson, Circuit Judges, and Stephen Joseph Murphy, III, District Judge.* Opinion by Judge Murphy * The Honorable Stephen Joseph Murphy, III, District Judge for the U.S. District Court for the Eastern District of Michigan, sitting by designation. 2 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR SUMMARY** Labor Law The panel vacated the district court’s preliminary injunction in a union’s action against an airline under the Railway Labor Act. The district court preliminarily enjoined the airline from making policy changes to pilot work rules during the negotiation of a new contract between the union and the airline following the National Mediation Board’s certification of the union as the pilots’ representative. The panel held that the district court had jurisdiction because the case did not raise a representation dispute, and there was no jurisdictional bar preventing the court, rather than the Board, from determining whether a previous advocacy group was a representative within the meaning of the RLA. The panel concluded that it was not reviewing the Board’s finding that the pilots were previously unrepresented. In addition, the airline had waived the argument that the Board’s finding was entitled to preclusive effect. The panel concluded that the Allegiant Air Pilots Advocacy Group, which had negotiated and agreed to the work rules prior to the union’s certification as the pilots’ representative, was not an RLA representative because it sought neither Board certification nor voluntary recognition. Accordingly, the pilot work rules were not a collective ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 3 bargaining agreement under the RLA. The panel held that the district court erred in entering an injunction because the RLA does not require an airline to maintain the status quo during negotiations of an initial labor agreement. COUNSEL Douglas W. Hall, Ford Harrison LLP, Washington D.C., for Defendants-Appellants. Edward M. Gleason Jr., Law Office of Edward Gleason, PLLC, Washington, D.C.; Michael A. Urban and Nathan R. Ring (argued), The Urban Law Firm, Las Vegas, Nevada; James Petroff, Barkan Meizlish LLP, Columbus, Ohio, for Plaintiffs-Appellees. OPINION MURPHY, District Judge: I. INTRODUCTION Allegiant Air is an airline operating from Las Vegas, Nevada. In 2004, Allegiant’s employees organized a pilot advocacy group (the Allegiant Air Pilots Advocacy Group, or “AAPAG”) and elected representatives to bargain with the airline on their behalf. Over the next few years, AAPAG and Allegiant negotiated and agreed to several different Pilot Work Rules, detailed documents that outlined Allegiant’s policies and work conditions. In 2012, some pilots decided they wanted to unionize. The Teamsters expressed interest in representing the pilots and petitioned the National Mediation 4 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR Board (the Board) to certify them as the pilots’ bargaining representative under the Railway Labor Act (RLA). The Board conducted a secret ballot of the pilots and then certified the Teamsters as the pilots’ RLA representative. Shortly thereafter, Allegiant changed several policies contained in the Work Rules without consulting the Teamsters. The Teamsters brought suit. They sought a preliminary injunction that would prevent Allegiant from making any policy changes to the Pilot Work Rules while they negotiated a new contract. The Teamsters contend the AAPAG, its predecessor negotiating on behalf of the pilots, was a representative under the RLA. They argue that the Pilot Work Rules were a collective bargaining agreement. And they assert here that the district court properly enjoined Allegiant from altering the agreement until the parties complete the RLA mandated mediation process. Allegiant disagrees. It contends the district court did not have jurisdiction to determine whether AAPAG was an RLA representative when it executed the Work Rules. It argues that even if the district court did have jurisdiction, AAPAG was not an RLA representative, but merely an informal employee advocacy group. It contends that the Work Rules are not a collective bargaining agreement, the policy modifications are at most differing interpretations of those Work Rules, and an injunction is inappropriate because the Teamsters have not demonstrated irreparable harm. It determined The district court found that it had jurisdiction over the dispute. the AAPAG was an RLA representative, reasoning that the employees had elected AAPAG for the purpose of negotiating terms of employment with the carrier. It therefore enjoined Allegiant from making INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 5 several policy changes until the parties had completed RLA mandated mediation. And it ordered the parties to create a Board of Adjustment to arbitrate the remaining issues. We have jurisdiction under 28 U.S.C. § 1292(a)(1). We conclude that AAPAG was not an RLA representative. We therefore vacate the injunction and remand the case. II. BACKGROUND In 2004, Allegiant grew tired of having “50-odd pilots constantly trumping through the office” with individual complaints. To solve the problem, management approached several senior pilots and asked them to form an organization that could channel employee grievances and provide pilot input. The senior pilots talked with their colleagues and a short while later thirty-five pilots met at PT’s Pub in Las Vegas to create AAPAG. Over the next few years, Allegiant grew rapidly, doubling the number of pilots and expanding its flights to new destinations. AAPAG grew with the company. The pilots annually elected officers who helped interview applicants, advocated for employees during grievance disputes, and discussed pay and work conditions with Allegiant’s management. AAPAG’s stated mission was to communicate pilot concerns to management, and it described itself as a “consulting agency on issues relating to the pilot group.” For several years, pilots and management enjoyed a good relationship. Allegiant allowed AAPAG to give Power Point presentations to new hires. When pilots had pay or leave problems, AAPAG officers advocated on the pilots’ behalf, 6 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR and Allegiant always resolved the issue in a way that “was satisfactory for all involved.” AAPAG and Allegiant also negotiated Pilot Work Rules, documents articulating company policies on leave, pay, scheduling, and other issues that mattered to the parties. For example, AAPAG negotiators and management agreed that the pilots would get an additional five dollars per hour in exchange for time. Before implementing the policy change, AAPAG conducted a secret ballot of the pilots, who “overwhelmingly approved” the change. During that period, Allegiant adhered to the Work Rules; when a question arose about the meaning or application of the Work Rules, Allegiant and AAPAG worked together to find a solution, and Allegiant typically made the aggrieved party whole. less guaranteed flight The parties negotiated the most recent Work Rules in 2010.1 The forty-nine page document was signed by both AAPAG’s President and Allegiant’s Vice President of Flight Operations. In the introduction, it states that “[t]he Flight Operations Department of Allegiant Air will develop, refine, and clarify changes to the Pilot Work Rules, Benefits and Compensation in coordination with the Allegiant Air Pilot’s Advocacy Group (AAPAG), the elected and representative body of the pilot group of Allegiant Air.” It also states Allegiant would “meet with AAPAG to consider revisions and updates to the Work Rules” and that they would “coordinate with AAPAG” to resolve questions about the Work Rules application. Bold lettering at the bottom of the page reads: “Nothing contained in these Work Rules should 1 One witness testified that the final Work Rules were actually implemented in 2011, and that the 2010 date on the document is an error. INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 7 be interpreted as giving rise to a contract or a promise of employment for any period of time.” In 2012, many pilots wanted to unionize with the Teamsters. AAPAG’s officers agreed and campaigned on the Teamsters’ behalf. Some AAPAG officers joined the Teamsters’ Organizing Committee. AAPAG’s president provided the pilots with a brochure stating they were operating “without a current contract,” that the pilots needed more than “a legal version of our 40 page work rules,” and outlined the benefits of Teamsters representation. During the unionization campaign, AAPAG took the position that the pilots did not have a legally binding contract with the company. And when the Teamsters petitioned the Board to certify it as the pilots’ RLA representative, it listed the pilots as presently unrepresented. None of AAPAG’s officers serving on the Teamsters’ Organizing Committee contested that categorization. The Board held an election among the pilots, who voted to unionize with the Teamsters. The Board then certified the Teamsters as the pilots’ RLA bargaining representative. Two weeks after the certification, the Teamsters notified Allegiant that it intended to negotiate a new collective bargaining agreement. The notice stated that the Teamsters expected Allegiant not to unilaterally change any of the conditions in the Work Rules while they negotiated a new contract. Shortly thereafter, Allegiant changed its policies regarding pilots who lose their medical certificate due to being sick or hurt, eliminated pay protection for employees engaged in collective bargaining, altered how many days new parents could take off to spend with their children, and created a new scheduling system. The Teamsters then filed suit, seeking to 8 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR enjoin the changes while the parties negotiated a collective bargaining agreement. III. OVERVIEW OF RAILWAY LABOR ACT Congress passed the RLA to expediently help railroads and their employees resolve conflicts, before disagreements turned into strikes that would paralyze interstate commerce. See Int’l Bhd. of Teamsters v. N. Am. Airlines, 518 F.3d 1052, 1055–56 (9th Cir. 2008). In 1936, Congress amended the RLA to include coverage of air carriers, 45 U.S.C. § 181, but otherwise, the same structure of the Act remained. Under the Act, employees may designate a representative to negotiate agreements concerning rates of pay, rules, and working conditions. When a conflict arises “among a carrier’s employees as to who are the representatives of such employees,” the Board has the sole power to determine when a group or person is a valid representative. Id. § 152, Ninth. The Board is authorized “to take a secret ballot of the employees,” and may take steps to “insure the choice of representatives by the employees without interference, influence, or coercion exercised by the carrier.” Id. After the Board determines the employees’ preferred representative, the Board certifies the representative, and “the carrier shall treat with the representative so certified.” Id. Judicial review of representation disputes is extremely circumscribed. Federal courts may not review the Board’s certification decision or independently determine whether a group represents employees. Switchmen’s Union of N. Am. v. Nat’l Mediation Bd., 320 U.S. 297, 300 (1943). Furthermore, the Board’s “decisions regarding its methods of investigation, balloting procedures, and findings regarding employer INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 9 interference, influence, or coercion, have been largely unreviewable.” Horizon Air Indus. Inc. v. Nat’l Mediation Bd., 232 F.3d 1126, 1132 (9th Cir. 2000). Courts have limited jurisdiction to ensure the Board acts constitutionally and within the scope of its statutory authority. Id. Board factual findings have preclusive effect under traditional principles of estoppel. Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 107 (1991). Once a representative and a carrier have reached an agreement concerning rates of pay, rules, and working conditions, the Act prescribes specific steps parties must take to change the agreement. A party that wants to change an agreement must give advance written notice. 45 U.S.C. § 156. Parties are required to meet in a good faith attempt to voluntarily settle any disagreement. Id. § 152, Second. If conferring fails, either party may request the services of the Board to mediate a dispute. Id. § 155, First. And, if the mediation fails, the parties may consent to binding arbitration. Id. § 157. Finally, if mediation fails and the parties reject arbitration, the RLA imposes a thirty-day cooling off period. Id. § 155, First. Only then can a carrier change an agreement and a labor organization lead its employees out on strike. During the period of negotiation, neither party may unilaterally change employee working conditions. Id. § 156; see generally Int’l Bhd. of Teamsters, 518 F.3d at 1056 (citing Detroit & Toledo Shore Line R.R. Co. v. United Transp. Union, 396 U.S. 142, 149 n.14 (1969 . A different process exists when parties contest the meaning or proper application of a particular provision of an agreement. In that case, the RLA requires employees and carriers first to exhaust the grievance procedure specified in a collective bargaining agreement. 45 U.S.C. § 184. Next, a 10 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR representative for an employee and a carrier must meet in conference to try to settle the dispute. Id. § 152, Second. If parties are unable to resolve a disagreement, the dispute is subject to binding arbitration before a board of adjustment established by the involved airline and labor representative. Id. § 184; see Consol. Rail Corp. v. Ry. Labor Exec. Ass’n, 491 U.S. 299, 304 n.4 (1989). IV. JURISDICTION OF DISTRICT COURT We review de novo whether the district court had jurisdiction. Horizon Air, 232 F.3d at 1128, 1131. District courts have the power to enjoin a carrier from changing a bargaining agreement while the parties complete the process mandated by the RLA. Consol. Rail, 491 U.S. at 303. Allegiant argues the district court lacked jurisdiction because the case turns in part on whether AAPAG was an RLA representative when it agreed to the Work Rules. According to Allegiant, only the Board has the power to determine whether a group is (or was) a representative under the Act. We hold that while the Board has sole power to determine labor’s current bargaining agent, there is no jurisdictional bar preventing a district court from finding that a previous advocacy group was a representative within the meaning of the RLA. found that during Allegiant also argues it the Board’s investigation, the pilots were previously unrepresented. Because the Board made that finding during the course of its investigation, Allegiant contends the Board’s factual conclusion is unreviewable. We hold that when a party is challenging an action taken by the Board—like its certification of a labor representative or its efforts to prevent employer interference with an election—district court review INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 11 is limited to ensuring that the Board acted constitutionally and within the scope of its statutory authority. But when a party brings a claim that does not challenge an action taken by the Board, the district court has jurisdiction, even if the claim denies the Board’s legal or factual conclusion. And the district court should then review the Board’s findings under principles of estoppel. A. Representation Dispute The most important purpose of the RLA was “the avoidance of industrial strife, by conference between the authorized representatives of employer and employee.” Bhd. of Ry. & S.S. Clerks v. Nat’l Mediation Bd., 380 U.S. 650, 658 (1965). An “explosive problem” in its application is how to determine what labor organization represented employees. Switchmen’s Union, 320 U.S. at 303. “[W]hether one organization or another was the proper representative of a particular group of employees was one of the most controversial questions in connection with labor organization matters.” Id. at 302 (internal quotation marks omitted). Section 152, Ninth, establishes “the machinery for the selection of the representatives of employees.” Bhd. of Ry. & S.S. Clerks, 380 U.S. at 658. It provides for a “neutral that can expediently determine employees’ tribunal” bargaining representative and “get the matter settled.” Switchmen’s Union, 320 U.S. at 303. That section provides in relevant part: If any dispute shall arise among a carrier’s employees as to who are the representatives of such employees . . . it shall be the duty of the Mediation Board, upon request of either party 12 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR to the dispute, to investigate such dispute and to certify to both parties . . . the name or names of the individuals or organizations that have been designated and authorized to represent the employees involved in the dispute, and certify the same to the carrier. . . . In such an investigation, the Mediation Board shall be authorized to take a secret ballot of the employees involved, or to utilize any other appropriate method of ascertaining the names of their duly designated and authorized representatives in such manner as shall insure the choice of representatives by the employees without interference, influence, or coercion exercised by the carrier. 45 U.S.C. § 152, Ninth. It further states that once the Board has investigated the dispute and certified a representative, “the carrier shall treat with the representative so certified.” Id. The Supreme Court has held that the Board has the sole power to certify a group or person as an employee representative. Switchmen’s Union, 320 U.S. at 300 (holding federal courts do not have jurisdiction to review the Board’s certification decision). Courts also lack jurisdiction to provide relief that is the functional equivalent of an RLA certification like, judgment instance, entering a declaratory determining what group can bargain on the employees’ behalf. Gen. Comm. of Adjustment v. Mo.-Kan.-Tex. R. Co., 320 U.S. 323, 327 (1943) (holding that the district court lacked jurisdiction to find “that the Engineers should be declared to be the sole representative of the locomotive engineers with the exclusive right to bargain for them”). for INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 13 Furthermore, courts decline to exercise jurisdiction when parties bring an otherwise justiciable claim that requires the court to examine whether a class of employees are represented, and if so, by whom. See United Transp. Union v. Gateway W. Ry. Co., 78 F.3d 1208, 1216 (7th Cir. 1996) (holding court lacked jurisdiction to determine if parent company’s union also represented subsidiary’s employees). Cases on which Allegiant relies similarly either require a court to determine the employees’ current representative or to compel a carrier to bargain in the face of competing representation claims. See Int’l Bhd. of Teamsters v. Tex. Int’l Airlines, 717 F.2d 157, 161 (5th Cir. 1983) (declining jurisdiction to enforce a bargaining agreement that would “inescapably entail[] the continuance of the Union’s role as employee representative”); United Transp. Union v. United States, 987 F.2d 784, 790 (D.C. Cir. 1993) (declining to determine which of two unions was the employees’ bargaining representative). Neither party cites any case in which the court determined the status of a past advocate rather than adjudicated a present dispute about what party represents labor. Our research has not revealed any such case. Resolving the issue as one of first impression, we find the district court correctly exercised jurisdiction. At the outset, we reiterate that federal courts have jurisdiction to enjoin changes to the status quo while parties complete mediation. The only issue is whether Section 152, Ninth, precludes that determination here. For several reasons, we do not think Section 152, Ninth, is applicable. That section gives the Board jurisdiction when “any dispute shall arise among a carrier’s employees as to who are the representatives of such employees.” 45 U.S.C. 14 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR § 152, Ninth. Simply put, there is no dispute among the employees that the Teamsters are the pilots’ current bargaining representative. Indeed, the Board has already certified the Teamsters as the bargaining representative and no party challenges that certification. AAPAG’s position at the time it negotiated the Work Rules has no bearing on the Teamsters’ current status. Furthermore, Section 152, Ninth, provides that once the Board determines the bargaining representative, it must issue a certification, and the carrier must “treat with the representative so certified.” We are not issuing AAPAG a certificate or its equivalent. And there is no reason for the Board to issue a certificate to AAPAG on the basis of its past advocacy. Our resolution of AAPAG’s status when it negotiated the Work Rules will not require the carrier to treat with AAPAG now, or ever. In short, no competing unions vie for the right to bargain, and no employees seek to remain or become unaffiliated. All agree the Teamsters are the employees’ RLA representative, entitled to bargain with Allegiant. Accordingly, this case does not raise a representation dispute, and federal courts have jurisdiction to resolve it. B. The Board’s Factual Finding In 2012, the Teamsters petitioned the Board, seeking a certification that it was the pilots’ bargaining representative. During the Board’s investigation, it determined that no party represented the pilots. The effect of the finding was that when the pilots voted, they had the option of voting for the Teamsters, of writing in other candidates, or to remain unrepresented. See National Mediation Board, Representation INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 15 Manual § 13.201.2 If the Board had found that AAPAG represented the pilots, the ballot also would have included the option of voting for AAPAG, but that was not the case. Allegiant contends we do not have jurisdiction to review the Board’s finding that the pilots were unrepresented. Different rules apply when we directly review a Board action and when an independent claim raises issues the Board has already addressed. In the former situation, judicial review is limited to ensuring the Board acted constitutionally and within the scope of its statutory authority. Horizon Air Indus., 232 F.3d at 1132. For example, if AAPAG had challenged the Board’s certification of the Teamsters on the grounds that the Board had wrongfully kept AAPAG off the ballot, then our review would be limited to taking a “peek at the merits” to ensure that AAPAG’s exclusion was constitutional and the Board did not exceed its statutory authority. Id. But in the latter case, when a party brings a claim that does not challenge a Board action but nonetheless raises an issue the Board has already addressed, courts apply principles of estoppel. Courts “have long favored application of the common-law doctrines of collateral estoppel (as to issues) and res judicata (as to claims) to those determinations of administrative bodies that have attained finality.” Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 107 (1991). “When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.” Id. (quoting United States v. Utah Constr. & 2 The representation manual is available on the Board’s website, http://www.nmb.gov/documents/representation/representation-manual.pdf. 16 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR Mining Co., 384 U.S. 394, 422 (1966 . We have previously found that Board determinations have preclusive effect when made in proceedings that satisfy due process and when the findings were supported by substantial evidence. Bldg. Material & Constr. Teamsters Local No. 216 v. Granite Rock Co., 851 F.2d 1190, 1195 (9th Cir. 1988). In the present case, we are not reviewing any administrative action. No party has asked us to invalidate the Board’s certification of the Teamsters as the pilots’ representative. Rather, the case presents claims independent of the Board’s certification and involve the legality of Allegiant’s changes to the Work Rules. And resolving whether Allegiant’s policy changes were legal turns in part on whether AAPAG was the pilots’ previous RLA representative—a factual determination the Board has already answered in the negative. The question, then, is whether the Board’s finding is entitled to preclusive effect. Allegiant did not argue in its opening brief that the Board’s determination should have preclusive effect. Rather, Allegiant framed its argument as being solely about jurisdiction. In its answering brief, the Teamsters asserted that principles of collateral estoppel should not prevent the Court from revisiting AAPAG’s representation status. And, in its Reply, Allegiant acknowledges that it did not raise the argument of collateral estoppel, but states “IBT’s contention that collateral estoppel would not apply . . . has no merit.” Allegiant cites no authority applying preclusion principles in any analogous situation and, other than the quoted conclusory statement, it does not address the issue of estoppel. We have discretion to consider an issue raised in a reply brief where, as here, an appellee raised an issue in its brief. United States v. Bohn, 956 F.2d 208, 209 (9th Cir. 1992) (per curiam). But INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 17 because Allegiant’s Reply does not cite relevant authority or otherwise press the point, we find the argument waived.3 For these reasons, we hold that the district court properly asserted jurisdiction over the parties’ dispute. V. AAPAG’S REPRESENTATIVE STATUS The district court enjoined Allegiant from changing the Work Rules. And the injunction turned in part on whether AAPAG was an RLA representative. We review a district court’s injunction for abuse of discretion. Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989, 994 (9th Cir. 2011). The threshold question of whether AAPAG was an RLA representative is a question of law that we review de novo. Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 881 (9th Cir. 2012). “When a district court makes an error of law, it is an abuse of discretion.” Id. The RLA defines “representative” as “any person or persons, labor union, organization, or corporation designated either by a carrier or group of carriers or by its or their employees, to act for it or them.” 45 U.S.C. § 151, Sixth. We 3 The Board required the Teamsters to identify whether there was an incumbent representative at the time it requested that the Board investigate the representation dispute. See National Mediation Board, Representation Manual, § 1.02(3). At that time, the Teamsters took the position that AAPAG was not an RLA representative. The position was to their advantage because it kept AAPAG off the election ballot. In a footnote in its Reply, Allegiant argues for the first time that the doctrine of judicial estoppel prevents the Teamsters from taking inconsistent positions. Reply Brief n.4, (citing Rissetto v. Plumbers & Steamfitters Local 343, 94 F.3d 597, 600 (9th Cir. 1996 . Because Allegiant raises that argument for the first time in its Reply, we find the argument also waived. 18 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR hold that employees can “designate” an RLA representative in two ways. Employees may petition the Board to certify a labor representative. Id. § 152, Ninth. Or, a labor organization can seek voluntary recognition, which requires a) it to unequivocally demand RLA recognition from the carrier, b) for the carrier to unequivocally grant recognition, and c) for the labor organization to make a contemporaneous showing that it enjoys majority support amongst the relevant workforce. See N.L.R.B. v. Triple C Maint., Inc., 219 F.3d 1147, 1153 (10th Cir. 2000) (describing voluntary recognition under the National Labor Relations Act). Because AAPAG sought neither Board certification nor voluntary recognition, we find it was not an RLA representative. A. The Need For Certainty Employees, employers, and federal courts need certainty—prior to the advent of litigation—on whether an advocacy group is an RLA representative. For example, a court’s ability to enjoin a labor strike could turn on whether employees have designated a representative. Hypothetically, if AAPAG was not an RLA representative then the Norris- LaGuardia Act might prevent a court from enjoining an AAPAG-led strike. See Aircraft Serv. Int’l, Inc. v. Int’l Bhd. of Teamsters, 779 F.3d 1069, 1080S81 (9th Cir. 2015) (en banc) (Berzon, J., concurring). If, however, AAPAG was a representative, then the pilots would need to use the RLA dispute resolution mechanisms prior to engaging in economic coercion. See Bhd. of R.R. Trainmen v. Chi. River & Ind. R.R., 353 U.S. 30, 42 (1957) (finding courts can enjoin union strike while parties undergo mandatory arbitration). Resolution of the dispute would turn on whether AAPAG was the current bargaining representative, and that question is INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 19 within the sole jurisdiction of the Board. See supra Section IV.A. In a similar hypothetical, if an employee had filed suit disputing Allegiant’s application of the Work Rules, the law and forum would turn on whether AAPAG was an RLA representative. If AAPAG was not a representative, and the Work Rules were therefore not a collective bargaining agreement, the employee’s remedy, if any, would be under state contract law. See Sw. Gas Corp. v. Vargas, 111 Nev. 1064, 1072 (1995) (explaining that employee handbooks can create an employment contract, even if the handbook includes a disclaimer). But if AAPAG was an RLA representative, the employee would have to use the Act’s arbitration procedures. 45 U.S.C. § 184. The forum, the law, and the remedy all turn on the status of the labor advocate, a status courts typically do not have jurisdiction to determine. Furthermore, many airlines establish employee advocacy groups as a way to facilitate employee input. The Board has repeatedly stated that employee committees are lawful under the RLA, unless the carrier uses the group to interfere with a Board election. Delta Airlines, 30 N.M.B. 102, 122 (2002); Am. Airlines, 26 N.M.B. 412, 453 (1999). Carriers often pay the advocacy group leaders for time spent advocating, as well as help set up elections, fund group programs, and provide management classes for group officers. See, e.g., Delta Airlines, 30 N.M.B. at 122–26. While carriers are free to organize channels of communication between pilots and management, those actions become illegal if the advocacy group unwittingly changes into an RLA representative. 45 U.S.C. § 152, Fourth. Those potentially negative legal consequences require employees to put the carrier on notice of a group’s representative status. 20 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR the Act Being an RLA representative also imposes legal obligations on the labor organization. Aside from the explicit obligations in Section 152, RLA lays out representatives also have a duty of fair representation, Landers v. Nat’l R.R. Passengers Corp., 485 U.S. 652, 658 (1988) (citing Steele v. Louisville & Nashville R.R. Co., 323 U.S. 192, 204 (1944 . And representatives have a statutory duty to file reports with the Department of Labor, 29 U.S.C. §§ 402(j)(2), 431. It is important that employees act purposefully when choosing an RLA representative. When employees designate a representative, it affects the applicability of the RLA and the authority of federal courts to interfere on behalf of both employees and employers. The choice also imposes duties on both parties. This need for clarity compels us to hold that an entity becomes an RLA representative only when certified by the Board or voluntarily recognized by the employer. B. Designating A Representative The simplest way for employees to designate an RLA representative is to petition the Board to certify a labor representative. The carrier then “shall treat with the representative so certified.” 45 U.S.C. § 152, Ninth. Unless a labor representative “formally seeks and obtains certification as the employees’ chosen representative, the employer’s duty to ‘treat’ with, i.e. recognize, the representative, is not triggered.” Aircraft Serv. Int’l, 779 F.3d at 1083 (en banc) (Berzon, J., concurring) (citing Summit Airlines, Inc. v. Teamsters Local Union No. 295, 628 F.2d 787, 793–95 (2d Cir. 1980 . When employees vote on a representative, but the carrier refuses to negotiate, the representative labor group must seek Board certification. See Summit Airlines, 628 F.2d INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 21 at 795. And, finally, employees may appoint a representative and a carrier may voluntarily choose to negotiate with them. “Voluntary recognition” is the standard practice under federal labor laws. The Board’s handbook provides that a group which has petitioned the Board for a certification may withdraw an application if the group wishes to seek voluntary recognition. See National Mediation Board, Representation Manual § 6.0. Similarly, various courts have found that carriers may voluntarily recognize an RLA representative. See Summit Airlines, 628 F.3d at 795; Burlington N., Inc. v. Am. Ry. Supervisors Ass’n, 503 F.2d 58, 63 (7th Cir. 1974). Moreover, courts interpreting a comparable section of the National Labor Relations Act (NLRA) have found that employees can “designate” a labor representative under 29 U.S.C. § 159(a) by either acquiring a National Labor Relations Board certification or through voluntary recognition. Triple C Maint., Inc., 219 F.3d at 1153; Sheet Metal Workers’ Int’l Ass’n Local 19 v. Herre Bros. Inc., 201 F.3d 231, 241 (3d Cir. 1999); Am. Automatic Sprinkler Sys. Inc. v. N.L.R.B., 163 F.3d 209, 219 (4th Cir. 1998); N.L.R.B. v. Goodless Elec. Co. Inc., 124 F.3d 322, 324 (1st Cir. 1997). While courts hesitate to import NLRA standards into the RLA due to differences in the statutory schemes, see Bhd. of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 383 (1969), a clear voluntary recognition rule serves the same salutary purposes under both statutes. It ensures that both parties are on notice of the legal import of their agreements, and thereby promotes stable labor relations. It prevents the need for courts to engage in post hoc determinations of a labor organization’s legal status. And, by requiring contemporaneous evidence that an organization enjoys majority support among the relevant workforce, it 22 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR protects the right of a majority of employees to choose their labor representative. C. Application In the present case, AAPAG was not an RLA representative. The parties agree the Board never certified AAPAG under Section 152, Ninth. There is no evidence that AAPAG demanded Allegiant recognize it as the pilots’ RLA bargaining agent. To the contrary, evidence showed that AAPAG’s status did not come up in pilots’ discussions among themselves or with Allegiant. AAPAG did not mention the Railway Labor Act in presentations to new pilots. AAPAG’s Constitution and by-laws are silent about its status under the Act. AAPAG’s officers testified that they were unfamiliar with the RLA and that they never sought outside legal advice about the status of the group or the enforceability of the Work Rules. The officers never discussed whether they could appeal grievances beyond upper management, or whether they could lead the pilots out on strike. The officers never satisfied statutory filing requirements with the Department of Labor. Materials written by AAPAG’s president state that the group was operating “without a current contract” and that the pilots needed more than “a legal version of our 40 page work rules.” And the Teamsters, who worked in concert with a pilot organizing committee that included AAPAG officers, took the position during the Board election process that AAPAG was not an RLA representative. AAPAG’s officers, who were working with the Teamsters, did not contest their categorization. There is no evidence below (much less an unequivocal demand for recognition) that AAPAG officers ever told Allegiant they were bargaining as an RLA representative INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR 23 instead of as a non-RLA employee committee. Both AAPAG’s officers and Allegiant’s management agreed that AAPAG never presented itself as an RLA bargaining agent. Allegiant’s filings with the SEC describe AAPAG as an “in- house association” and the Work Rules as a “mutually acceptable arrangement.” That description is in stark contrast to Allegiant’s statements that the flight attendants had “voted for representation” and were negotiating “a labor agreement.” Finally, while the Work Rules state that Allegiant would change the Work Rules “in coordination with the Allegiant Air Pilot’s Advocacy Group (AAPAG), the elected and representative body of the pilot group of Allegiant Air,” nothing in the Work Rules mentioned the RLA or constitutes Allegiant’s unequivocal recognition of AAPAG’s RLA status. If a labor organization wants to be an RLA representative, it must demand recognition from a carrier; if the carrier will not give it, the group must seek Board certification. Because AAPAG did neither, it was not an RLA representative. Because AAPAG was not an RLA representative, the Work Rules were not a collective bargaining agreement within the meaning of the RLA.4 Thus, when the Teamsters and Allegiant met to draft a collective bargaining agreement, there was no agreement in place. We have previously found the RLA does not require a carrier to maintain the status quo during negotiations of an initial labor agreement. Int’l Bhd. of Teamsters v. N. Am. Airlines, 518 F.3d 1052, 1057–58 (9th Cir. 2008). The RLA therefore did not prevent Allegiant from 4 The Work Rules may have created an employment contract under Nevada state law, but that question is not subject to our review. 24 INT’L BHD. OF TEAMSTERS V. ALLEGIANT AIR changing the Work Rules, and the district court erred in entering an injunction. VI. CONCLUSION Accordingly, the district court’s injunction is VACATED and the case is REMANDED to permit the Teamsters and Allegiant to continue negotiating a collective bargaining agreement in conformity with the RLA and under the Board’s guidance. Each party shall bear its own costs on appeal.

=== OPINION ===

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT UNITED STATES OF AMERICA, No. 12-30337 Plaintiff-Appellant, v. D.C. No. 6:10-cr-60066- HO-1 STEVEN DWIGHT HAMMOND, Defendant-Appellee. UNITED STATES OF AMERICA, Plaintiff-Appellant, v. No. 12-30339 D.C. No. 6:10-cr-60066- HO-2 DWIGHT LINCOLN HAMMOND, JR., Defendant-Appellee. OPINION Appeal from the United States District Court for the District of Oregon Michael R. Hogan, District Judge, Presiding Submitted December 3, 2013* Seattle, Washington * The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). 2 UNITED STATES V. HAMMOND Filed February 7, 2014 Before: Richard C. Tallman and Carlos T. Bea, Circuit Judges, and Stephen J. Murphy, III, District Judge** Opinion by Judge Murphy SUMMARY*** Criminal Law On appeals by the government, the panel vacated sentences for maliciously damaging the real property of the United States by fire, in violation of 18 U.S.C. § 844(f)(1), and remanded for resentencing, in cases in which the defendants set fires on their ranch land that spread to public land. The panel rejected the defendants’ contention that the government waived its right to appeal the sentences in the plea agreements or otherwise failed to preserve its objection to the sentences. The panel explained that the principles governing the formation and interpretation of plea agreements leave no room for implied waivers. ** The Honorable Stephen J. Murphy, III, United States District Judge for the Eastern District of Michigan, sitting by designation. *** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. UNITED STATES V. HAMMOND 3 The panel held that the district court illegally sentenced the defendants to terms of imprisonment less than the statutory minimum. The panel observed that although the district court attempted to justify lesser sentences on Eighth Amendment grounds, sentencing the defendants to five years of imprisonment would not have been unconstitutional. COUNSEL Kelly A. Zusman, Assistant United States Attorney; S. Amanda Marshall, United States Attorney, District of Oregon, Portland, Oregon, for Plaintiff-Appellant. Lawrence H. Matasar, Lawrence Matasar, P.C., Portland, Oregon, for Defendant-Appellee Steven Dwight Hammond. Marc D. Blackman and Kendra M. Matthews, Ransom & Blackman, LLP, for Defendant-Appellee Dwight Lincoln Hammond, Jr. OPINION MURPHY, District Judge: The government appeals the sentences of Steven and Dwight Hammond, whom a jury convicted of maliciously damaging the real property of the United States by fire, in violation of 18 U.S.C. § 844(f)(1). The convictions carried minimum sentences of five years of imprisonment, but citing Eighth Amendment concerns, the district court sentenced Steven to only twelve months and one day of imprisonment and Dwight to only three months of imprisonment. Because 4 UNITED STATES V. HAMMOND the sentences were illegal and the government did not waive its right to appeal them, we vacate the sentences and remand for resentencing. I. Background The Hammonds have long ranched private and public land in Eastern Oregon. Although they lease public land for grazing, the Hammonds are not permitted to burn it without prior authorization from the Bureau of Land Management. Government employees reminded Steven of this restriction in 1999 after he started a fire that escaped onto public land. But in September 2001, the Hammonds again set a fire on their property that spread to nearby public land. Although the Hammonds claimed that the fire was designed to burn off invasive species on their property, a teenage relative of theirs testified that Steven had instructed him to drop lit matches on the ground so as to “light up the whole country on fire.” And the teenager did just that. The resulting flames, which were eight to ten feet high, spread quickly and forced the teenager to shelter in a creek. The fire ultimately consumed 139 acres of public land and took the acreage out of production for two growing seasons. In August 2006, a lightning storm kindled several fires near where the Hammonds grew their winter feed. Steven responded by attempting back burns near the boundary of his land. Although a burn ban was in effect, Steven did not seek a waiver. His fires burned about an acre of public land. The government ultimately prosecuted the Hammonds on charges related to these and other fires. After trial, the jury deliberated several hours and returned a partial verdict. The UNITED STATES V. HAMMOND 5 jury convicted Steven of two counts and Dwight of one count of maliciously damaging the real property of the United States by fire, in violation of 18 U.S.C. § 844(f)(1), based on their respective roles in the September 2001 and August 2006 fires. The jury also acquitted the Hammonds of some charges and failed to reach a verdict on others, including conspiracy charges brought against Steven and Dwight. The judge then instructed the jury to continue deliberating. While the jury deliberated on the remaining charges, the parties reached an oral agreement and presented it to the court.1 The government told the court that the Hammonds had agreed to “waive their appeal rights” — except with respect to ineffective assistance of counsel claims — “and accept the verdicts as they’ve been returned thus far by the jury.” In return, the government promised to “recommend” that Steven’s sentences run concurrently and agreed that the Hammonds “should remain released pending the court’s sentencing decision.” The Hammonds agreed with the government’s summary of the plea agreement. Their attorneys also added that the Hammonds wanted the “case to be over” and hoped to “bring th[e] matter to a close.” According to the defense, the “idea” of the plea agreement was that the case would “be done with at the sentencing” and that the “parties would accept . . . the sentence that’s imposed.” The district court then accepted the plea agreement and dismissed the remaining charges. 1 Although the Hammonds did not enter guilty pleas, the Hammonds agreed not to contest the jury verdicts in exchange for the government moving to dismiss other charges. The resulting posture is the same as that following a plea agreement. We thus will refer to the oral agreement here as a plea agreement and apply to it the law governing plea agreements. 6 UNITED STATES V. HAMMOND At sentencing, the court found that the guidelines range for Steven was 8 to 14 months and for Dwight was 0 to 6 months. Yet their convictions carried five-year minimum terms of imprisonment. See 18 U.S.C. § 844(f)(1). The government accordingly recommended five-year sentences of imprisonment and argued — both in its sentencing memorandum and at sentencing — that the court lacked discretion to impose lesser sentences. that The court, however, concluded the Eighth Amendment required deviation from the statutory minimum. Observing that Congress probably had not intended for the sentence to cover fires in “the wilderness,” the court reasoned that five-year sentences would be grossly disproportionate to the severity of the Hammonds’ offenses. The court then sentenced Steven to two concurrent terms of twelve months and one day of imprisonment and Dwight to three months of imprisonment. II. Standard of Review We review both a waiver of appeal and the legality of a sentence de novo. See United States v. Bibler, 495 F.3d 621, 623 (9th Cir. 2007) (waiver of appeal); United States v. Dunn, 946 F.2d 615, 619 (9th Cir. 1991) (legality of a sentence). III. Discussion A. Waiver A threshold issue is whether the government waived its right to appeal the Hammonds’ sentences in the plea agreement or otherwise failed to preserve its objection. We find no grounds for dismissing the appeal. UNITED STATES V. HAMMOND 7 The Hammonds first argue that the government waived its right to appeal in the plea agreement. Because a plea agreement is partly contractual in nature, we interpret it from the perspective of a reasonable defendant. See United States v. De la Fuente, 8 F.3d 1333, 1337–38 (9th Cir. 1993). But there is no ambiguity here to interpret. A reasonable defendant would expect that the absence of any statements on the government’s right to appeal simply means that no waiver was contemplated. See United States v. Anderson, 921 F.2d 335, 337–38 (1st Cir. 1990). The Hammonds respond by arguing that the statements of defense counsel show that an all-around waiver of appellate rights was the sine qua non of the plea agreement. The record, however, belies that assertion. The statements made by defense counsel just before the judge accepted the plea agreement underscore that all parties sought to resolve the case swiftly, but finality was not the only benefit supporting the plea agreement. Other benefits included favorable recommendations from the government and the dismissal of charges. We thus cannot reasonably read defense counsels’ references to finality as meaning that no party could take an appeal. Assuming then that the plea agreement is silent on the government’s right of appeal, the Hammonds urge us to imply a waiver into the plea agreement. We have never before done so. But relying on United States v. Guevara, 941 F.2d 1299 (4th Cir. 1991), the Hammonds argue that construing the government’s silence as an implied waiver will promote fairness and finality. We reject that position. The principles governing the formation and interpretation of plea agreements leave no room for implied waivers. 8 UNITED STATES V. HAMMOND Federal Rule of Criminal Procedure 11, not the common law of contracts, governs the making of plea agreements. See United States v. Escamilla, 975 F.2d 568, 571 n.3 (9th Cir. 1992); United States v. Partida-Parra, 859 F.2d 629, 634 (9th 1988). Although Rule 11 gives courts discretion to accept or reject a plea agreement, it does not authorize courts to remake a plea agreement or imply terms into one. See United States v. Benchimol, 471 U.S. 453, 455 (1985) (per curiam) (“Rule 11[] . . . speaks in terms of what the parties in fact agree to, and does not suggest that such implied-in-law terms as were read into this agreement by the Court of Appeals have any place under the rule.”); United States v. Stevens, 548 F.2d 1360, 1362 (9th Cir. 1977) (observing that Congress rejected a version of Rule 11 that would have allowed a court to modify a plea agreement in favor of the defendant). We accordingly “enforce the literal terms” of a plea agreement, construing only ambiguous language in the defendant’s favor. United States v. Franco-Lopez, 312 F.3d 984, 989 (9th Cir. 2002); see also United States v. Johnson, 187 F.3d 1129, 1134–35 (9th Cir. 1999). These principles preclude us from implying a waiver where none exists. Moreover, nothing in the nature of plea agreements requires that each promise must be “matched against a mutual and ‘similar’ promise by the other side.” United States v. Hare, 269 F.3d 859, 861 (7th Cir. 2001). To be sure, the idea behind a plea agreement is that each side waives certain rights to obtain some benefit. See Partida-Parra, 859 F.2d at 633. But there are ample reasons that a defendant might enter a plea agreement short of extinguishing the government’s right to appeal, including the possibility of a lower sentence and the dismissal of other charges. Hare, 269 F.3d at 861; cf. Brady v. United States, 397 U.S. 742, 752 (1970) (listing possible reasons for entering a plea). For example, the UNITED STATES V. HAMMOND 9 Hammonds negotiated for favorable recommendations from the government and the dismissal of charges. Such benefits are consideration enough to support a plea agreement. See Hare, 269 F.3d at 861–62. Finally, contrary to the Hammonds’ assertion, the record leaves no doubt that the government preserved the objection to the sentences that it raises on appeal. Nowhere did the government make a “straightforward” concession. United States v. Bentson, 947 F.2d 1353, 1356 (9th Cir. 1991). Nor did the government fail to give the district court an opportunity to address the argument it raises on appeal. See United States v. Grissom, 525 F.3d 691, 694–95 (9th Cir. 2008). In its sentencing memorandum and at sentencing, the government argued that the trial judge lacked discretion to deviate from the statutory minimum. The government thus preserved its objection, and we may hear its appeal. B. Sentences Turning now to the merits, we hold that the district court illegally sentenced the Hammonds to terms of imprisonment less than the statutory minimum. A minimum sentence mandated by statute is not a suggestion that courts have discretion to disregard. See United States v. Wipf, 620 F.3d 1168, 1169–70 (9th Cir. 2010). The court below was bound to sentence terms of imprisonment. See 18 U.S.C. 844(f)(1). Although the district court attempted to justify lesser sentences on Eighth Amendment grounds, sentencing the Hammonds to five years of imprisonment would not have been unconstitutional. the Hammonds five-year to Rather than categorically challenge five-year sentences for arson, the Hammonds argue that the sentences would be 10 UNITED STATES V. HAMMOND constitutionally disproportionate “under the unique facts and circumstances of this case.” We assess this type of Eighth Amendment challenge by “compar[ing] the gravity of the offense to the severity of the sentence.” United States v. Williams, 636 F.3d 1229, 1232 (9th Cir. 2011) (citing Graham v. Florida, 560 U.S. 48, 60 (2010 . Only in the “rare case in which this threshold comparison leads to an inference of gross disproportionality,” do we then “compare the defendant’s sentence with the sentences received by other offenders in the same jurisdiction and with the sentences imposed for the same crime in other jurisdictions.” Graham, 560 U.S. at 60 (internal citations and quotation marks omitted). Here, we need not progress beyond the first step. Congress has “broad authority” to determine the appropriate sentence for a crime and may justifiably consider arson, regardless of where it occurs, to be a serious crime. Solem v. Helm, 463 U.S. 277, 290 (1983). Even a fire in a remote area has the potential to spread to more populated areas, threaten local property and residents, or endanger the firefighters called to battle the blaze. The September 2001 fire here, which nearly burned a teenager and damaged grazing land, illustrates this very point. Given the seriousness of arson, a five-year sentence is not grossly disproportionate to the offense. The Supreme Court has upheld far tougher sentences for less serious or, at the very least, comparable offenses. See Lockyer v. Andrade, 538 U.S. 63 (2003) (upholding a sentence of fifty years to life under California’s three-strikes law for stealing nine videotapes); Ewing v. California, 538 U.S. 11 (2003) (upholding a sentence of twenty-five years to life under California’s three-strikes law for the theft of three golf clubs); UNITED STATES V. HAMMOND 11 Hutto v. Davis, 454 U.S. 370 (1982) (per curiam) (upholding a forty-year sentence for possession of nine ounces of marijuana with the intent to distribute); Rummel v. Estelle, 445 U.S. 263 (1980) (upholding a life sentence under Texas’s recidivist statute for obtaining $120.75 by false pretenses). And we and other courts have done the same. See, e.g., United States v. Tolliver, 730 F.3d 1216, 1230–32 (10th Cir. 2013) (upholding a 430-month sentence for using arson in the commission of a felony); United States v. Major, 676 F.3d 803, 812 (9th Cir. 2012) (upholding a 750-year sentence for offenses under 18 U.S.C. § 924(c , cert. denied, 133 S. Ct. 280; United States v. Meiners, 485 F.3d 1211, 1212–13 (9th Cir. 2007) (per curiam) (upholding a fifteen-year sentence for advertising child pornography); United States v. Uphoff, 232 F.3d 624, 625–26 (8th Cir. 2000) (upholding a five-year sentence for arson of a building). Because the district court erred by sentencing the Hammonds to terms of imprisonment less than the statutory minimum, we vacate the sentences and remand for resentencing in compliance with the law. VACATED AND REMANDED.

=== ORDER DENYING MOTION TO SUPPRESS BY DEFENDANTS CARLOS POWELL (D-1), ERIC POWELL (D-2), EARNEST PROGE (D-5), TOBIAS PROGE (D-6), TAMIKA TURNER (D-8), MARGARITA DE VALLEJO (D-10), BENNY WHIGHAM (D-11), AND DONALD WILSON (D-12) (docket no. 74) ===

2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 1 of 58 Pg ID 1590 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION UNITED STATES OF AMERICA, Plaintiff, Case No. 12-cr-20052 v. HONORABLE STEPHEN J. MURPHY, III CARLOS POWELL, et al., Defendants. _________________________________/ ORDER DENYING MOTION TO SUPPRESS BY DEFENDANTS CARLOS POWELL (D-1), ERIC POWELL (D-2), EARNEST PROGE (D-5), TOBIAS PROGE (D-6), TAMIKA TURNER (D-8), MARGARITA DE VALLEJO (D-10), BENNY WHIGHAM (D-11), AND DONALD WILSON (D-12) (docket no. 74) 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 2 of 58 Pg ID 1591 TABLE OF CONTENTS INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 LEGAL STANDARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 I. Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 II. Real-Time Cell-Site Location-Data Warrants . . . . . . . . . . . . . . . . . . . . . . . . . 8 A. Technical Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 B. Legal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1. History of Real-Time Cell-Site Location-Data Authorization . . . . . . . . 12 2. Statutory Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 a. b. c. Pen Registers and Trap-and-Trace . . . . . . . . . . . . . . . . . . . . . . 13 Stored Communications Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Tracking Devices under 18 U.S.C. § 3117 . . . . . . . . . . . . . . . . . 14 d. Wiretaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3. Judicial Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 a. Cases in Which Probable Cause Is Required . . . . . . . . . . . . . . 15 b. Cases Holding That Less Than Probable Cause Is Required . . . 18 4. United States v. Skinner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 a. Skinner Distinguished . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 C. Conclusion and Findings of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 1. Fourth Amendment Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 2. Statutory Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 2 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 3 of 58 Pg ID 1592 3. Probable Cause Showing for Real-Time Cell-Phone Tracking . . . . . . 30 4. Limitations of the Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 D. Probable Cause for the March 11, 2010 Warrant . . . . . . . . . . . . . . . . . . 35 1. Summary of the March 11, 2010 Donovan Affidavit . . . . . . . . . . . . . . 36 2. Probable Cause Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 3. Good Faith Exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 E. "Fruit of the Poisonous Tree" and the Remaining Cell-Site Warrants . . . 41 III. Warrantless Use of GPS Tracking Devices / Traffic Stops . . . . . . . . . . . . . . 42 A. GPS tracking device . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 1. Technical Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 2. GPS Tracker Installation and Re-Installation . . . . . . . . . . . . . . . . . . . 44 3. Constitutionality of the GPS tracker . . . . . . . . . . . . . . . . . . . . . . . . . . 45 B. The Traffic Stops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 1. Legal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 2. Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 a. Whigham Traffic Stop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 b. c. d. Valle Traffic Stop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Proge Traffic Stop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 de Vallejo Traffic Stop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 IV. Warrants Issued for the Search of Nine Detroit Properties . . . . . . . . . . . 55 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 ORDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 3 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 4 of 58 Pg ID 1593 INTRODUCTION This is a criminal drug prosecution. Defendants are charged with various drug dealing, firearms, and money laundering offenses. 21 U.S.C. §§ 841(a)(1) and 846; 18 U.S.C. §§ 924(c)(1) and 1956. The government contends that the defendants operated a large scale drug trafficking ring in Detroit and, among other things, imported large quantities of cocaine and heroin into the city. In April 2012, eight of the fourteen defendants filed a Motion to Suppress Evidence and Request for an Evidentiary Hearing. See Mot. to Supress, ECF No. 74; see also Notices of Joinder/Concurrence, ECF Nos. 81, 87, 88, 94. The Court held a hearing on the motion on December 18, 2012. On January 4, 2013, the Court issued an order (1) making a preliminary finding that defendants Carlos Powell and Eric Powell had standing to contest admission of the evidence challenged in the motion; (2) denying the motion as to the challenged pen-register and trap-and-trace evidence; and (3) ordering an evidentiary hearing regarding federal agents' use of a GPS tracking device without a warrant during the investigation. See Order Denying in Part Mot. to Suppress ("Order"), ECF No. 167. The Court conducted the evidentiary hearing on January 17, 2013 and February 12, 2013. For the reasons stated at the hearing and explained below, the Court will deny the remainder of the motion to suppress in full. LEGAL STANDARD The Fourth Amendment provides that "[t]he right of the people to be secure . . . against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." U.S. Const. 4 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 5 of 58 Pg ID 1594 amend. IV. The Amendment protects "people — and not simply 'areas' — against unreasonable searches and seizures." Katz v. United States, 389 U.S. 347, 353 (1967). A valid search or seizure "requires adherence to judicial processes," and searches without a warrant are "per se unreasonable under the Fourth Amendment." Id. at 357. To help protect an individual's Fourth Amendment rights, courts apply the "exclusionary rule," which provides that evidence obtained in violation of the Fourth Amendment will be excluded from use against a defendant at trial. United States v. Clariot, 655 F.3d 550, 553 (6th Cir. 2011). A judicial rule, it is premised on "deterrence — to discourage the police from violating the Fourth Amendment by prohibiting them from leveraging illegal encounters into criminal convictions." Id.; see also Elkins v. United States, 364 U.S. 206, 217 (1960). Because the rule is judicial in source, not constitutional, and is intended to deter government misconduct, evidence is not always excluded when the Fourth Amendment has been violated. For example, an exception to the rule occurs when an officer conducts an unconstitutional search in "good faith reliance on some higher authority, such as a warrant or a statute, even if the warrant or statute were later held invalid or unconstitutional." United States v. Buford, 632 F.3d 264, 271 (6th Cir. 2011), cert. denied, 132 S. Ct. 370 (2011). In that event, the evidence, though seized unconstitutionally, nonetheless remains admissible because there is no bad-faith conduct by the officer to deter. Id. BACKGROUND On April 15, 2012, defendants Carlos Powell (D-1), Eric Powell (D-2), Earnest Proge (D-5), and Benny Whigham (D-11) filed a Motion to Suppress and Request for an Evidentiary Hearing. Following the motion, co-defendants Margarita de Vallejo (D-10), 5 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 6 of 58 Pg ID 1595 Tobias Proge (D-6), Tamika Turner (D-8), and Donald Wilson (D-12) filed notices of joinder and concurrence. See Notices of Joinder/Concurrence.1 The remaining defendants did not join the motion. Since the motion's filing, Juan Valle (D-9) entered a guilty plea on January 31, 2013. Valle was not a party to the suppression motion, but Defendants indirectly challenge the search of his vehicle in the motion. Defendants challenge the admission of the following the evidence: (1) Pen-register and trap-and-trace data acquired via orders issued over a nine-month period, for cellular telephones used by Carlos Powell, Eric Powell, and Juan Valle. The Court denied Defendants' motion to suppress this evidence on January 4, 2013. Order at 13. (2) Real-time cell-site location data acquired via Criminal Rule 41 search warrants issued between March 11, 2010 and October 5, 2010, for six cellular telephones. See Fed. R. Crim. P. 41. (3) Location data acquired over a period of several months through the warrantless use of a GPS tracking device affixed to vehicles owned and operated by Carlos Powell and Eric Powell. (4) Evidence seized during the warrantless search of vehicles belonging to Benny Whigham, Juan Valle, Earnest Proge, and Margarita de Vallejo, incident to traffic stops. (5) Evidence seized during the search of nine properties in the Detroit metro area, pursuant to search warrants. 1 For the purposes of this order, the Court will refer to the eight moving defendants as "Defendants." 6 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 7 of 58 Pg ID 1596 I. Standing DISCUSSION Fourth Amendment rights "may not be vicariously asserted." United States v. Pearce, 531 F.3d 374, 381 (6th Cir. 2008) (quoting Rakas v. Illinois, 439 U.S. 128, 133-34 (1978 . To assert a Fourth Amendment violation, a person must first "demonstrate a reasonable expectation of privacy in the things seized." United States v. Smith, 263 F.3d 571, 582 (6th Cir. 2001). Criminal "[c]o-conspirators and codefendants have been accorded no special standing." United States v. Williams, 354 F.3d 497, 511 (6th Cir. 2003) (quoting United States v. Padilla, 508 U.S. 77, 81–82 (1993 . Because of the "omnibus" nature of the motion to suppress, which was filed collectively by eight defendants and challenges dozens of searches and seizures of many different (moving and non-moving) defendants' properties, the Court initially questioned whether each moving defendant had standing to challenge the searches at issue. The government argued that, because the cell phones, vehicles, and properties in dispute were not the co-property of all Defendants, only a few of the defendants — those with direct privacy interests in the things searched — have the ability to challenge the evidence at issue. In its January 4, 2013 Order, the Court analyzed the standing question at some length. The Court concluded that Defendants do not challenge each search directly as unconstitutional. Rather, Defendants directly challenge the cell phone location and vehicle- tracking searches as unconstitutional, and then argue that evidence seized in every subsequent search was the "fruit" of those initial unconstitutional searches, and therefore inadmissible. Because Carlos and Eric Powell owned the cell phones and vehicles at issue, 7 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 8 of 58 Pg ID 1597 the Court concluded that they have standing to challenge all the searches at issue in the motion, either directly or derivatively. Order at 7 (citing Wong Sun v. U.S., 371 U.S. 471 (1963 . The remaining Defendants lack standing, and therefore all of the challenged evidence is admissible against them at trial, regardless of the Court’s decision on this motion. At the January 17, 2013 hearing, the government raised an additional argument that, with respect to the GPS tracking device affixed to Eric Powell's truck, Powell was the truck's sole owner and operator, and therefore the only defendant with standing to challenge the search. See Hr'g Tr., Jan. 17, 2013 at 6 ("Hr’g I"), ECF No. 176. The Court offered the opportunity for additional written argument on the issue, and, after examining two letters from counsel and various exhibits, the Court, for the reasons stated on the record at the February 12, 2013 hearing, found that Carlos Powell also has standing to challenge the search of the truck, and resolved the procedural questions relevant to the issue. See Hr'g Tr., Feb. 12, 2013 ("Hr’g II"), (No ECF Citation yet available). The Court will now address the motion to suppress with respect to each remaining category of evidence: (1) the cell-site location data; (2) the location data derived from the use of a GPS tracking device; (3) evidence seized during traffic stops of Whigham, Valle, Proge, and de Vallejo’s vehicles; and (4) evidence seized during the search of nine properties in the Detroit area. II. Real-Time Cell-Site Location-Data Warrants Defendants challenge search warrants authorizing collection of real-time cell-site location data from six cellular telephones owned by Carlos Powell, Eric Powell, and Juan Valle. The collection of real-time cell-site location data gives the government the ability to 8 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 9 of 58 Pg ID 1598 learn and follow the actual physical location of each phone at any time. Warrants authorizing the searches were issued on March 11, 2010; March 31, 2010; May 7, 2010; June 17, 2010; and October 5, 2010. Each warrant authorized the Drug Enforcement Administration ("DEA") to obtain real-time location data for up to thirty or forty-five days after the warrant issued. Defendants argue that the warrants issued without probable cause. A. Technical Background Every cellular telephone is capable of being located in one of two ways: by cell-site tracking, or by GPS signal locating. The first, cell-site tracking, exploits a cell phone's need to connect to a cellular network. To function, a cell phone must be in contact with a cell tower to transmit calls, text messages, and the like. A cell phone, once activated, will automatically search for the closest cell tower. Once the phone locates a tower, it submits a unique identifier — its "registration" information — to the tower so that any outgoing and incoming calls can be routed through the correct tower. This search and submission of information occurs every several seconds. If a signal to or from a tower changes strength, or the cell phone moves, the cell phone may switch its registry to a different tower. See Timothy Stapleton, Note, The Electronic Communications Privacy Act and Cell Location Data, 73 Brook. L. Rev. 383, 387 (2007). This fact, combined with the fact that in a typical urban environment, a cell phone will be in range of and submit information to several cell towers simultaneously, makes it possible to calculate a cell phone's location within anywhere from several blocks to a few feet using the mathematical process of 9 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 10 of 58 Pg ID 1599 "multilateration."2 While the precision of location data may vary, recent FCC regulations to enable law enforcement to identify a phone's location during a 911 call require a range of precision of no greater than 125 meters. See Wayne LaFave, Search and Seizure, § 2.7(f) (5th ed.). Law enforcement can artificially speed up the process by "pinging" a cell phone, that is, sending an electronic signal to a target cell phone — such as by dialing a number and hanging up — that triggers an identification transmission from the phone. Thus, law enforcement can obtain location data from a cell phone at will. See, e.g., United States v. Forest, 355 F.3d 942, 947 (6th Cir. 2004), cert. granted, judgment vacated sub nom. Garner v. United States, 543 U.S. 1100 (2005). More recently, most "smart" phones now come equipped with GPS locators, often for mapping applications, that can identify a phone's location by using a built-in GPS device. By obtaining the GPS device's information, an even more precise record of the cell phone's location may be obtained without resorting to "multilateration" calculations. See Susan Freiwald, Cell Phone Location Data and the Fourth Amendment: A Question of Law, Not Fact, 70 Md. L. Rev. 681, 713 (2011). In both the "cell-site location" or "GPS location" situations, the government can either track a person in real-time using live registration or GPS data, known as "prospective" records; or compile a list of a person's recent movements with their cell phone, known as "historic" records. See Stapleton, supra, at 388. In either case, if a cell phone is not turned on, it cannot transmit any data. 2 The concept is often referred to as "triangulation," but because the process may involve more or fewer than three cell towers, "multilateration" is a more accurate term. Id. 10 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 11 of 58 Pg ID 1600 For the purposes of the remainder of this opinion and order, the Court will refer to cell- phone location data gathered in real time, whether compiled by multilateration or GPS tracking, as "real-time cell-site location data." B. Legal Standards Defendants challenge all of the search warrants for cell-site and GPS location data, but their primary challenge is to the March 11, 2010 warrant authorizing collection of real- time cell-site location data for the phone number (313) 529-5848, subscribed to by Carlos Powell. Defendants argue that the warrant was not supported by probable cause, and the subsequent warrants are the "fruit of the poisonous tree" of that original warrant.3 Their probable-cause and fruit-of-the-poisonous-tree arguments with respect to the March 11, 2010 warrant are generally applicable to all the real-time cell-site location data warrants at issue in this case. The government argues that the affidavits submitted to the magistrate judge contained enough facts to establish a probable-cause basis for the warrants to issue; and that even if they did not, the evidence should not be suppressed because the DEA agents relied in good faith on the warrants. Before discussing the March 11, 2010 warrant application, the Court will consider the antecedent question of what legal standard applies to a government application to obtain real-time cell-site location data, and what showing, if any, the government must make to acquire the data. As set forth below, the Court concludes that the government must establish probable cause for long-term, real-time tracking of an individual via his cell phone, and that a specific showing must be made to establish probable cause for such tracking. 3 Defendants' initially challenged the March 31, 2010 warrant, but then shifted to the March 11, 2010 warrant when it became clear it was the first cell-phone warrant issued. 11 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 12 of 58 Pg ID 1601 1. History of Real-Time Cell-Site Location Data Authorization The act of tracking an individual's movements in real time is neither new, nor dependent on modern technology. The tried-and-true method of simply following a suspect on foot stretches back many years; real-time tracking of John Dillinger's associates in the 1930s occurred when FBI agents sat in cars and restaurants following their quarry. Thirty years ago, long before cell phones became common, the Supreme Court held in United States v. Knotts, 460 U.S. 276 (1983), that a radio beeper tracking device could be used to track a criminal suspect in public. Today, however, real-time tracking involves far more technologically sophisticated and geographically precise tracking methods; as well as the development that in many cases, a tracked individual owns the very device being used to track him. 2. Statutory Authorities The government may lawfully acquire many different types of data from electronic devices like cell phones, from as little as a phone's subscriber information to as much as the contents of conversations between two people. Currently, federal statutes authorize four means of collecting such data: pen-register and trap-and-trace devices, access to stored communications, the use of tracking devices, and real-time communication intercepts (a.k.a. "wiretaps"). Wiretapping authority was first authorized as part of the Omnibus Crime Control and Safe Streets Act of 1968, P.L. 90-351, 82 Stat. 197; the remaining authorizations are part of the Electronic Communications Privacy Act ("ECPA") of 1986, P.L. 99-508, 100 Stat. 1848.4 4 These statutes have been amended from time to time; for example, by the Communications Assistance and Law Enforcement Act of 1994, P.L. 103-414, 108 Stat. 4279, and the USA PATRIOT Act, P.L. 107-56, 115 Stat. 272. 12 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 13 of 58 Pg ID 1602 a. Pen Registers and Trap-and-Trace Pen-register and trap-and-trace orders are the most easily obtainable. As discussed in the Court’s January 4 Order, a pen-register / trap-and-trace ("pen / trap") order captures the incoming and outgoing numbers dialed by a phone (or other such non-communication- content data transmitted by electronic devices). To obtain this information, the government need only certify that "the information likely to be obtained by [] installation [of a pen register or trap and trace device] and [its] use is relevant to an ongoing criminal investigation." See 18 U.S.C. §§ 3122(b)(2) and 3123(a)(1); see also Michigan Bell Tel. Co. v. United States, 565 F.2d 385, 388 (6th Cir. 1977). b. Stored Communications Act Acquisition of stored electronic communications (including stored internet communications and cell-phone subscriber records) is governed by the Stored Communications Act ("SCA"). See 18 U.S.C. §§ 2701-2712. The SCA generally prohibits providers of electronic communication services or remote computing services from disclosing information to the government, and provides three ways for the government to obtain records. For records and communications created less than 180 days before the date of application, the government must obtain a search warrant to retrieve the information. See 18 U.S.C. § 2703(a). For older records and communications, the government must obtain a court order based on "specific and articulable facts" that provide "reasonable grounds to believe that the contents of a wire or electronic communication, or the records or other information sought, are relevant and material to an ongoing criminal investigation." See 18 U.S.C. § 2703(d); Warshak v. United States, 532 F.3d 521, 534 (6th 13 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 14 of 58 Pg ID 1603 Cir. 2008). The government may also obtain stored records via a properly issued and served subpoena from federal grand jury or district court. c. Tracking Devices under 18 U.S.C. § 3117 A "tracking device" is an "electronic or mechanical device which permits the tracking of the movement of a person or object." 18 U.S.C. § 3117(b). The beepers discussed in Knotts are one example. See Knotts, 460 U.S. at 278. The government may install and use tracking devices under the authority of 18 U.S.C. § 3117. A search warrant issued upon a showing of probable cause is required. Criminal Rule 41 contains specific provisions to authorize installation of a tracking device. 18 U.S.C. § 3117(a); Fed. R. Crim. P. 41(b)(4); see Forest, 355 F.3d at 949. d. Wiretaps Finally, the authority to use wiretaps — government interception of real-time communications, such as the voices on a call or the text in an instant message — is codified at 18 U.S.C. §§ 2510-2522, also known as "Title III" for its place in the 1968 Act. See United States v. Alfano, 838 F.2d 158, 161 (6th Cir. 1988). To wiretap individuals, the government makes a showing of what is sometimes referred to as "probable cause plus." In addition to the conventional probable-cause showing, the "plus" showing requires that an applicant declare whether or not "investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous." See 18 U.S.C. § 2518(3)(c). The wiretap statute reaches only "electronic communications," and it explicitly excludes "tracking devices" under 18 U.S.C. § 3117. See 18 U.S.C. § 2510(12)(C). 3. Judicial Precedent 14 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 15 of 58 Pg ID 1604 Federal courts considering issues involving real-time cell-site location data usually follow one of two approaches. The majority of jurisdictions require the government to make a probable-cause showing to obtain real-time cell-site location data. While some courts also require the same showing for historic cell-site location data, most other courts find that historical location data are "stored communications" and may be obtained on a lesser "relevant to an ongoing criminal investigation" showing. The minority of jurisdictions do not accord any protection to cell-site information, or they authorize the use of such information on a showing of less than probable cause. And, finally, some jurisdictions have not addressed the issue. a. Cases in Which Probable Cause Is Required Of the courts that have addressed the issue, a significant majority have required the government to make a showing of probable cause before obtaining real-time cell-site information. One of the first major decisions to address the issue of cell-site location information was In re Authorizing the Use of a Pen Register, 384 F. Supp. 2d 562 (E.D.N.Y. 2005). When considering an application for an order authorizing collection of cell- site location data, the court found that while cell-site location information is similar to information that a pen register would provide, the government could not obtain the information merely on the showing required by the pen register statute. Id. at 564. After engaging in statutory construction, including a review of legislative history, the court determined that nothing less than probable cause would permit the release of this information. See id. at 565 (citing testimony before the U.S. House of Representatives that "the authority for pen registers and trap and race devices cannot be used to obtain tracking or location information other than that which can be determined from the phone number"). 15 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 16 of 58 Pg ID 1605 The court granted the government’s motion for reconsideration of its original decision. See In re Application of the U.S. for an Order (1) Authorizing the Use of a Pen Register & a Trap & Trace Device, 396 F. Supp. 2d 294 (E.D.N.Y. 2005). The court also invited Electronic Frontier Foundations ("EFF") to submit a brief as an amicus curiae. The government again argued that cell-site information could be obtained on a showing of less than probable cause; EFF argued that such information requires a showing comparable to the wiretap "super-warrant" requirement. Id. at 305. The court again concluded that the probable-cause standard governed the request for the information. See id. at 322. Notably, the court did not specifically hold that Fourth Amendment protections apply to cell-site information, see id. at 323, or that the probable-cause standard would necessarily suffice in the future, and the court declined to address whether a "super- warrant" requirement for the information was appropriate. See id. at 322. The procedural posture of the case obviated any requirement for the court to directly decide the extent of the privacy interests at stake; the court merely considered an application to obtain data, and therefore considered the issues before any information was gathered.5 Another frequently cited case, In re Application for Pen Register and Trap/Trace Device with Cell-site Location Authority, 396 F. Supp. 2d 747 (S.D. Tex. 2005), considered existing privacy statutes and concluded that use of real-time cell-site location data should be considered equivalent to the use of a "tracking device" governed by 28 U.S.C. § 3117 and employed a probable-cause standard. See id. at 757. Looking to the ECPA, the court concluded that the provisions of the ECPA do not overlap; and therefore, cell-site 5 Here, in contrast, Defendants filed a motion to suppress after the government collected the data, which demands a more extensive review of the interests in the case. 16 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 17 of 58 Pg ID 1606 information should be governed by the probable-cause standard only and not other ECPA provisions with alternate standards. Id. at 757-59. Five years later, the same court extended Fourth Amendment protection to historic cell-site information. In re Application of the United States for Historical Cell-site Data, 747 F. Supp. 2d 827 (S.D. Tex. 2010). The court compared historical cell-site data to the GPS device used in United States v. Maynard, 615 F.3d 544 (D.C. Cir. 2010), aff'd in part sub nom. United States v. Jones, 132 S. Ct. 945 (2012), and concluded that although Maynard dealt with a slightly different tracking technology, the historical cell-site data at issue in the case was actually more intrusive than the GPS data revealed in Maynard. See id. at 840-41. The court pointed out that while the level of detail provided by cell-site technology is close to that of GPS technology, cell-site technology is more reliable than GPS technology, and because cell phones are generally carried on the person, it captures more revealing information than GPS technology. Id. Several other jurisdictions agree that cell-site information may not be obtained by the government absent some showing of probable cause. See, e.g., In re Application of the United States for an Order Authorizing the Disclosure of Prospective Cell-site Information, No. 06-MISC-004, 2006 WL 2871743, at *5 (E.D. Wis. Oct. 6, 2006) (finding it "clear" that the effect of cell-site information is akin to a "tracking device," and noting that Criminal Rule 41 is the standard procedure for the use of mobile tracking devices); see also id. at *4 n.3 (noting that the government "regularly" requests cell-site information under the "super-warrant" requirements of § 2518), cf. id. at *5 n.6 (suggesting it was "doubtful" that the use of cell-site data for tracking would be considered a Fourth Amendment search); In re Application of the United States for an Order Authorizing the Monitoring of Geolocation 17 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 18 of 58 Pg ID 1607 and Cell-site Data . . ., No. 06–0186, 187, 188, 2006 WL 6217584, at *4 (D.D.C. Aug. 25, 2006) (agreeing with the "majority rule" that Criminal Rule 41 governs the request for prospective cell-site information and finding a Fourth Amendment privacy interest in location); In re Application of United States for an Order Authorizing Disclosure of Location Information, 849 F. Supp. 2d 526, 539-42 (D. Md. 2011) (finding that "the subject here has a reasonable expectation of privacy both in his location as revealed by real-time location data and in his movement where his location is subject to continuous tracking over an extended period of time, here thirty days," and that the Fourth Amendment requires a showing of probable cause for this information). b. Cases Holding That Less Than Probable Cause Is Required A minority of jurisdictions either do not recognize any protection for cell-site information, or authorize the release of information on a showing of less than probable cause. See, e.g., People v. Hall, 14 Misc.3d 245, slip op. at 253, 257 (N.Y. Sup. Ct. 2006) (finding that the cell-phone technology at issue in the case was not a "tracking device" for purposes of the ECPA and the information was properly obtained under the SCA standard). Although courts finding probable cause usually reject the theory that the disclosure of cell-phone information by a third party, such as a phone company, voids any privacy protection, at least a few courts taking the minority approach have employed the theory. See, e.g., United States v. Dye, No. 1:10-CR-221, 2011 WL 1595255, at *9 (N.D. Ohio Apr. 27, 2011) ("The defendant also seeks to suppress his cell phone records, which were obtained via subpoena. However, there is no reasonable expectation of privacy in cell phone records[] or in cell-site location information."); United States v. Benford, No. 2:09 CR 86, 2010 WL 1266507, at *2 (N.D. Ind. Mar. 26, 2010) ("[D]efendant had no legitimate 18 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 19 of 58 Pg ID 1608 expectation of privacy in records held by a third-party cell phone company identifying which cell phone towers communicated with defendant's cell phone at particular points in the past . . . [but] Fourth Amendment concerns might be raised if cell-site data were used to track the present movements of individuals in private locations."). Similarly, the district court in United States v. Suarez-Blanca, No. 1:07-CR-0023-MHS/AJB, 2008 WL 4200156 (N.D. Ga. Apr. 21, 2008), rejected Fourth Amendment protection for historical cell-site information by combining the third-party doctrine with a finding that the defendants did not have a reasonable expectation of privacy in the location of cell phone towers. Id. at *8, 10; see also In re Application of the United States for an Order . . ., 411 F. Supp. 2d 678, 682 (W.D. La. 2006) (rejecting Fourth Amendment concerns when a "tracking" device only discloses communication with a tower and does not provide detailed tracking information regarding movement inside a private residence). Other courts draw a sharp distinction between historical and prospective cell-site information and grant access to the former through the SCA. See United States v. Graham, 846 F. Supp. 2d 384, 391 (D. Md. 2012) ("Maynard concerned the prolonged surveillance of a vehicle by global positioning system technology, and not through historical cell-site location data. That distinction is important."). The Graham court concluded that individuals do not have a reasonable expectation of privacy in historical cell-site information. See id. at 389. But Graham carefully noted the distinctions between historical cell-site information and real-time GPS tracking. See id. at 391. Moreover, although the court rejected the proposition that the Fourth Amendment places some limits on the amount of historical cell- site information that may be obtained by the government before the search becomes 19 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 20 of 58 Pg ID 1609 "unreasonable," the court concluded that jurisprudence was moving in that direction. See id. at 394. Similarly, the Third Circuit concluded, after analyzing the SCA, that probable cause is not required for the government to obtain historical cell-site information. See In re Application of United States, 620 F.3d 304 (3d Cir. 2010). In many of the above cases, the government advanced a "hybrid theory" for why a showing of less than probable cause is required to obtain cell-site information. The "hybrid theory" combines the authorities of the SCA with the pen-register statute to authorize cell- site location data by reasoning that, although 47 U.S.C. § 1002(a)(2) prevents collection of location data via the pen / trap statute alone, the term "solely" implies that the government may acquire data when combined with an SCA request. See generally Stapleton at 397- 400; In re Application for Pen Register & Trap/Trace Device with Cell Site Location Auth., 396 F. Supp. 2d at 761 (government argued "a pen/trap order, when combined with a § 2703(d) order, is sufficient authority to collect prospective cell site data"). 4. United States v. Skinner On August 14, 2012, the United States Court of Appeals for the Sixth Circuit issued United States v. Skinner, 690 F.3d 772 (6th Cir. 2012), holding that a criminal defendant does not have a reasonable expectation of privacy in the location data in a cell phone, and consequently that government collection of the data is not a search under the Fourth Amendment. Id. at 781. In Skinner, during an investigation into a drug trafficking ring, the government obtained an order from a magistrate judge authorizing the collection of real- time cell-site location data for a cell phone that belonged to the defendant. The defendant challenged the district court's decision to include the evidence at trial. In its ruling, the Sixth Circuit stated "[b]ecause authorities tracked a known number that was voluntarily used 20 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 21 of 58 Pg ID 1610 while traveling on public thoroughfares, Skinner did not have a reasonable expectation of privacy in the GPS data and location of his cell phone." Id. In reaching its decision, the Sixth Circuit relied directly on Knotts' holding that "[a] person traveling in an automobile on public thoroughfares has no reasonable expectation of privacy in his movements from one place to another." Id. at 778 (citing Knotts, 460 U.S. at 281). The court noted that "Skinner was traveling on a public road before he stopped at a public rest stop. While the cell site information aided the police in determining Skinner's location, that same information could have been obtained through visual surveillance." Id. The Sixth Circuit also relied on its decision in United States v. Forest, in which the court determined that DEA agents' actions of dialing a suspect’s telephone number and then quickly hanging up in order to obtain location data from the suspect's phone was not a search under the Fourth Amendment. Forest, 355 F.3d at 951 (finding "no legitimate expectation of privacy in the cell-site data because the DEA agents could have obtained the same information by following [the defendant's] car"). In Skinner, the court stated that Forest stands for the proposition that cell-site data is merely a proxy for an individual's location, and thus a defendant does not have a legitimate expectation of privacy in the data. Skinner, 690 F.3d at 778. Finally, the court distinguished United States v. Jones, the Supreme Court's recent decision addressing use of GPS tracking devices, noting that "the DEA agents only tracked Skinner's cell phone for three days," in contrast to the "intensive monitoring over a 28-day period" that took place in Jones. Id. at 780 (quoting Jones, 132 S. Ct. at 957). Concluding that "[n]o such extreme comprehensive tracking is present in this case," the court found that Skinner did not "present the concern" raised in Jones. Id. 21 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 22 of 58 Pg ID 1611 a. Skinner Distinguished Although Skinner's facts resemble the case here — both cases involve a major drug trafficking investigation and real-time cell-site location data tracking — Skinner is distinguishable for two key reasons. First, Skinner is clearly different from this case with respect to the duration of the government's tracking. In Skinner, the DEA tracked the defendant for three days. In this case, the government secured tracking data for multiple cell phones over the course of half a year, from March 11, 2010, to roughly the end of 2010 when Defendants were arrested. Considering the phones individually, each warrant issued for a minimum of thirty or forty- five days. The Skinner court specifically noted that its holding dealt with "relatively short- term monitoring of a person's movements," and drew a contrast with the "intensive monitoring over a 28-day period" present in Jones. Id. at 780 (quoting Jones, 132 S. Ct. at 957). In other words, based solely on the difference between a three-day and a seven- month period of cell-site tracking, the Court finds this case does present the concerns regarding extreme comprehensive tracking raised in Jones. Second, Skinner relied on the Knotts and Forest line of cases and their rationales to find that use of a tracking device on a public thoroughfare was permissible. Skinner's holding applied to "track[ing] a known number that was voluntarily used while traveling on public thoroughfares . . ." Id. at 781 (emphasis added) (also stating "the monitoring of the location of the contraband-carrying vehicle as it crossed the country is no more of a comprehensively invasive search than if the car was identified in Arizona and then tracked visually . . . as the vehicles progressed"). This basis for distinguishing the instant case from Skinner is related to the first. It is true that the functional impact on privacy of a police 22 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 23 of 58 Pg ID 1612 officer following a suspect on a highway in an unmarked police car, or using cell-phone technology to do the same, is minimal. And it appears that the agents in Skinner collected cell-site location data only while the suspect was on public thoroughfares. Here, however, real-time cell-site location data was collected for more than half a year. The government concedes, and DEA Special Agent Edward Donovan's testimony and the affidavits on file confirm, that the cell phones were tracked for a significant amount of time during the investigation. See June 17 Donovan Aff. at ¶ 64, ECF No. 74-7; Hr’g I at 33. Given the duration and intensity of the tracking, it cannot be reasonably argued that only public- thoroughfare data was collected. The government certainly collected cell-site data emanating from within the defendants’ homes or from another place in which the defendants had a legitimate expectation of privacy. At this point, the analogy between cell-phone tracking and visual surveillance breaks down. In United States v. Karo, 468 U.S. 705 (1984), the Supreme Court considered, as a follow-up to Knotts, the use of a beeper to track an object's movement from a public highway to the inside of a residence. The Court noted that although a DEA agent may physically track a suspect on a public road, and by analogy may use a beeper to do the same, had a DEA agent thought it useful . . . to verify that the ether was actually in the house and had he done so surreptitiously and without a warrant, there is little doubt that he would have engaged in an unreasonable search within the meaning of the Fourth Amendment. For purposes of the Amendment, the result is the same where, without a warrant, the Government surreptitiously employs an electronic device to obtain information that it could not have obtained by observation from outside the curtilage of the house. 23 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 24 of 58 Pg ID 1613 Id. at 715. The distinction is clear: the government may use a beeper to track location in public areas, but may not do so when tracking continues into a protected area, such as a residence, without a warrant. Based on these distinctions, the Court finds that the issues in Skinner are distinguishable from the issues presented in this case: long-term cell-phone tracking into protected areas. C. Conclusion and Findings of Law After a careful review of the statutes and decisions set forth above, the Court makes the following findings. 1. Fourth Amendment Implications First, the public-thoroughfare distinction employed in Knotts and Skinner does not fully address all legal issues presented when, as here, the government seeks to acquire real- time cell-site location data for prospective periods as long as thirty-to-forty-five days or more — tracking for a period of time long enough to monitor an individual in a protected area. Skinner explicitly stated that Jones does not limit or overrule Knotts or Karo. Skinner, 690 F.3d at 779-780. But Karo's holding was not founded entirely on physical trespass; rather, the illegality in that case stemmed from the "monitoring of the beeper." Karo, 468 U.S. at 713. Information regarding the beeper's location inside a private residence would only otherwise have been obtainable by a search of that residence; that is, a police officer would have to, in some manner, enter the premises to obtain the information generated by the beeper. Absent a warrant, the entry would be unconstitutional. The same focus underlies the Court's concern here. If at any point a tracked cell phone signaled that it was inside a private residence (or other location protected by the Fourth Amendment), the only 24 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 25 of 58 Pg ID 1614 other way for the government to have obtained that information would be by entry into the protected area, which the government could not do without a warrant. The Court’s concern here was addressed by the Supreme Court in Kyllo v. United States, 533 U.S. 27 (2001), which upheld the general principle that the use of technology was a search when used to collect information that otherwise could not have been obtained without a physical search. See Id. at 31. In Kyllo, the police used a thermal imaging device to determine whether the suspect’s home was radiating an abnormally high amount of heat. The Court concluded that, as in Karo, the only way police could otherwise have obtained the information provided by the device would have been by a search inside the home. Id. In these situations, which are well beyond the facts analyzed by the court in Skinner, a warrant would be required.6 Kyllo raised another issue implicated by real-time cell-site tracking warrants. In Kyllo, the Court rejected the argument that the government could restrict its thermal searches to non-"intimate" details based on the practical observation that "[n]o police officer would be able to know in advance whether his through-the-wall surveillance picks up ‘intimate’ details–and thus would be unable to know in advance whether it is Constitutional." Id. at 38 (italics added). The same problem is posed by requests for prospective real-time cell- 6 See also Florida v. Jardines, 133 S. Ct. 1409 (2013). In Jardines, the Supreme Court found that the use of a drug-sniffing dog within the curtilage of a defendant's home constituted a search because of the government physically trespassed with the dog onto a protected area without permission. Id. at 1415 ("the only question is whether [defendant] had given his leave (even implicitly) for [the police and dog to enter the curtilage]. He had not."). The concurrence, citing Kyllo, would have found that use of a drug-sniffing dog invaded the defendant's reasonable expectation of privacy: the police "conducted a search because they used a device . . . not in general public use (a trained police dog) to explore details of the home (the presence of [drugs]) that they would not otherwise have discovered without entering the premises." Id. at 1419 (Kagan, J., concurring) (internal quotation marks omitted). 25 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 26 of 58 Pg ID 1615 site location data. The March 11, 2010 warrant authorized the DEA to collect real-time cell- site location data for up to thirty days. Under virtually any circumstance, there was no way the DEA could know in advance whether or not the location data collected during that period would come from within a protected area. Special Agent Donovan stated that the same day that he secured the warrant here, he began to "chase" the phone by pinging it and receiving location information. Hr’g I at 87. Although the information led Donovan to a suspect driving a truck, he could not have known in advance that the phone would not instead have been pinged in a suspect's bedroom. See also In re Application of United States for an Order Authorizing Disclosure of Location Information, 849 F. Supp. 2d at 538 ("[I]t is impossible for law enforcement agents to determine prior to obtaining real-time location data whether doing so infringes upon the subject's reasonable expectation of privacy and therefore constitutes a Fourth Amendment search."); In re Application of U.S. for an Order Authorizing Installation & Use of a Pen Register & a Caller Identification Sys. on Tel. Numbers (Sealed), 402 F. Supp. 2d 597, 605 (D. Md. 2005) ("To the extent the government seeks to act without a warrant, the government acts at its peril, as it may not monitor an electronic tracking device in a private place without a warrant."). The Court’s Fourth Amendment concerns also overlap with those expressed by the D.C. Circuit in Maynard, and in the Jones concurrences. See Maynard, 615 F.3d at 562; Jones, 132 S. Ct. at 963-64 (Alito J., concurring in the judgment); Jones, 132 S. Ct. at 954- 57 (Sotomayor, J., concurring). Generally speaking, those opinions express the view that warrantless long-term tracking by electronic means violates an individual’s reasonable expectation of privacy, not just because of the potential for tracking into protected areas, 26 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 27 of 58 Pg ID 1616 because the information obtained through such means is, in the aggregate, so comprehensive.7 See, e.g., Jones, 132 S. Ct. at 964 ("[S]ociety's expectation has been that law enforcement agents and others would not — and indeed, in the main, simply could not — secretly monitor and catalogue every single movement of an individual's car for a very long period.") (Alito, J., concurring). The Jones majority found the Fourth Amendment implicated on narrower, property-based grounds, and declined to decide whether surveillance of Jones over thirty days by "electronic means, without an accompanying trespass, is an unconstitutional invasion of privacy." Id. at 954 ("[T]he present case does not require us to answer that question."). That basis of decision is not available in this case because no device was installed, and yet the privacy concerns implicated by the tracking seem just as profound. For these reasons, the Court finds that when the government requests authorization to engage in long-term, real-time tracking of an individual’s movements via his or her cell phone, the situation reaches past the law set forth in Skinner, and Fourth Amendment concerns are implicated. 2. Statutory Analysis It is also apparent that the statutory authority relevant to pen-register / trap-and-trace devices, stored communications, tracking devices, and wiretaps is not applicable to cell- phone tracking. 7 This view has its critics. See, e.g., Orin Kerr, The Mosaic Theory of the Fourth Amendment, 111 Mich. L. Rev. 311 (2012). The present Order does not adopt any of the "mosaic theory" approaches specifically, nor does it purport to address the questions raised in Kerr's article regarding the implications of the approach. The Court simply notes that the constitutionality of long-term cell-phone tracking was left open in Jones, submits that the privacy issues presented by such tracking merit a doctrinal response, and finds that the facts presented here fall on the wrong side of the constitutional divide. 27 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 28 of 58 Pg ID 1617 First, the information sought here is clearly location data and the government therefore cannot acquire it solely on the authority of the pen / trap statute, 47 U.S.C. § 1002(a)(2). See generally In re Application of U.S. for Order, 497 F. Supp. 2d 301, 307 (D.P.R. 2007). And neither can, as the government argued in its warrant application, law enforcement acquire real-time location information under the "hybrid" theory combining pen / trap statute and the SCA authorities. See March 11 Donovan Aff., ECF No. 106-1; see also, e.g., In re U.S. for Orders Authorizing Installation & Use of Pen Registers & Caller Identification Devices on Tel. Numbers, 416 F. Supp. 2d 390, 395 (D. Md. 2006); In re U.S. For an Order Authorizing the Disclosure of Prospective Cell Site Info., 412 F. Supp. 2d 947, 958 (E.D. Wis. 2006) aff'd, 06-MISC-004, 2006 WL 2871743 (E.D. Wis. Oct. 6, 2006). Moreover, a cell phone is not a "tracking device" as defined by 18 U.S.C. § 3117. First, a cell phone is not a government-owned-and-installed device. Instead, it is a personal communications device that an individual purchases and owns. The statutory language of § 3117 specifically contemplates government installation: "[i]f a court is empowered to issue a warrant or other order for the installation of a mobile tracking device . . ." 18 U.S.C. § 3117(a); see generally In re Application of the United States for an Order . . ., 411 F. Supp. 2d at 681 ("Tracking devices are devices that are 'installed' at the request of the Government."). Second, the combination of tracking movement and the actual seizure (no matter how limited) of information generated by a non-government device is sufficient to consider real-time cell-site location data tracking distinct from a § 3117 authorized tracking device. Third, significant technological differences exist between tracking cell phones and tracking with § 3117 "tracking devices." There are practical limits on where a GPS tracking device attached a person's vehicle may go. A cell phone, on the other hand, is usually 28 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 29 of 58 Pg ID 1618 carried with a person wherever they go. See generally In re Application for an Order Authorizing The Extension & Use of a Pen Register Device, 07-SW-034-GGH, 2007 WL 397129, at *2 (E.D. Cal. Feb. 1, 2007) ("[I]t would prove far too much to find that Congress contemplated legislating about cell phones as tracking devices."). Because a cell phone is not a "tracking device" under § 3117, the procedure set forth in Criminal Rule 41 for the installation and use of "tracking devices" is also not applicable to the acquisition of real-time cell-site location data. See Fed. R. Crim. P. 41(a)(2)(E) (providing that "tracking device," as used in that rule, "has the meaning set out in 18 U.S.C. § 3117(b)"). Third, there is cause for a firm distinction between historic location data, and live, real- time location data that enables real-time location monitoring. See, e.g., In re Applications of United States for Orders Pursuant to Title 18, U.S. Code Section 2703(d), 509 F. Supp. 2d 76, 78 (D. Mass. 2007) (drawing distinction between government acquisition of real-time and historic location information). Although many of the privacy questions, particularly those concerned with government compilation of a record of a person's movements, see Skinner, 690 F.3d at 780, are the same in historic and prospective tracking cases, the issue presented here is an application for government acquisition of real-time cell-site location data far into the future. Accordingly, this order does not address applications and authorizations for data that is "historic" or obtained as stored communications for the purposes of the SCA. Finally, real-time cell-site location data are also not "communications" subject to Title III’s heightened procedures for intercepting communications via wiretap. While information regarding an individual's location is a "communication" in some sense of the term, so are the numbers dialed in and out of a telephone. In either case, however, that location 29 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 30 of 58 Pg ID 1619 information is not the "content" of actual communications intended to be protected by Title III wiretapping authority. See generally In re Application for Pen Register and Trap/Trace Device with Cell-site Location Authority, 396 F. Supp. 2d at 758 ("Cell site data does not reflect the 'contents' of a communication as that term is defined by the Wiretap Act."). 3. Probable Cause Showing for Real-Time Cell-Phone Tracking In the absence of a definitive statutory niche for prospective cell-phone tracking, and in light of the considerable, and distinctive, privacy concerns raised by long-term, real-time cell-site tracking discussed above, scrutiny of the appropriate probable-cause showing in these cases is called for. The Court concludes that a specific showing is required to establish probable cause when the government seeks a warrant for long-term real-time tracking of an individual via a cell phone. Such a showing should include facts supporting, at least, the following: First, that the actual location of the person the government intends to track via the cell phone is relevant to the investigation of the ongoing crime, or evidence sought. That is, if the government intends to track an individual over a long period of time, and cannot show that the individual will be, for example, in public, non-protected locations for the duration of the tracking, then the warrant application should set forth facts that warrant intrusion into protected locations that the individual may frequent. In other words, the government should set forth a probable-cause basis for following the individual into protected areas via the individual's personal cell phone. It is true that, in a sense, a person's location is in some way always relevant to his potential participation in a crime. And, a person does not have a general privacy interest in his location. But before the government may use an individual's cell phone to track him 30 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 31 of 58 Pg ID 1620 into areas in which an individual does have a reasonable expectation of privacy, the government should show more than that the person is suspected of a crime; the government should show that the person’s location in the protected area is in some way relevant to the ongoing investigation of criminal activity. See generally United States v. Frazier, 423 F.3d 526, 532 (6th Cir. 2005) ("The critical element in a reasonable search is not that the owner of property is suspected of crime but that there is reasonable cause to believe that the specific 'things' to be searched for and seized are located on the property to which entry is sought"). Second, the government should show that the specific cell phone, as well as the person to be tracked, is relevant to the investigation. That is, the government must show there is a nexus between the cell phone, the suspect, and the information sought. See generally United States v. Carpenter, 360 F.3d 591, 594 (6th Cir. 2004) (warrant application must show "a nexus between the place to be searched and the evidence to be sought"); see also, e.g., United States v. Sierra-Rodriguez, 10-20338, 2012 WL 1199599, at *6 (E.D. Mich. Apr. 10, 2012) (finding probable cause shown where the affidavit provided substantial basis to conclude that specific cell phone tracked belonged to suspect embarking on criminally-related travel). This means that the government should show that a criminal suspect under investigation is the likely user of the cell phone at issue and that he or she uses the cell phone in connection with criminal activity. Investigation of a criminal organization using multiple phones, including dedicated phones for criminal activity, over the course of the operation would require the government to make a showing as to each phone it intends to track. The logic of this requirement is simply that, drawing on the Fourth Amendment’s particularity requirement, tracking a phone used in furtherance of criminal 31 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 32 of 58 Pg ID 1621 activity is likely to lead to evidence of criminal activity, whereas tracking phones, the use of which is unconnected to criminal activity, will likely demonstrate where a person conducts highly personal business. In sum, because "the belief that the items sought will be found at the location to be searched must be supported by less than prima facie proof but more than mere suspicion," to establish probable cause for long-term, real-time, cell-site tracking, the government should have to demonstrate a nexus between a suspect and the phone, the phone and the criminal activity, as well as the criminal activity and suspect's location in protected areas, rather than merely probable cause that the person is engaged in criminal activity. See generally United States v. Williams, 544 F.3d 683, 686 (6th Cir. 2008). This standard obviously does not deal a serious blow to the government’s ability to obtain real-time cell-site location data. Although specific, the showings required are nowhere near as stringent as those for a Title III wiretap, which require agents to state that "normal investigative procedures have been tried and failed or reasonably appear to be unlikely to succeed if tried or to be too dangerous" by including "a full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous." United States v. Poulsen, 655 F.3d 492, 503 (6th Cir. 2011), reh'g denied (Oct. 17, 2011), cert. denied, 132 S. Ct. 1772, 1182 (2012) (quoting United States v. Rice, 478 F.3d 704, 716 (6th Cir. 2007 . The showing described here does not require exhaustion of other investigative techniques; it simply calls for the government to provide additional facts in its warrant application to justify tracking an individual via his personal cell phone, over an extended period of time, into protected spaces. The result is a showing that is not 32 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 33 of 58 Pg ID 1622 necessarily heightened, rather it is simply responsive to the full range of recognized privacy interests at stake in long-term cell-phone tracking. Of course, any warrant requirement exacts some costs on the ability of police to investigate crimes. But "[a]n essential purpose of a warrant requirement is to protect privacy interests by assuring citizens subject to a search or seizure that such intrusions are not the random or arbitrary acts of government agents." United States v. Rohrig, 98 F.3d 1506, 1514 (6th Cir. 1996) (quoting Skinner v. Railway Labor Executives' Ass'n, 489 U.S. 602, 621-22 (1989 . The tailored showing described here would help prevent the arbitrary or casual invasion of privacy rights that technological change facilitates. This is a significant concern for modern Fourth Amendment jurisprudence, as recognized in Jones. See Jones,132 S. Ct. at 963 (Alito, J. concurring in judgment) (noting that privacy protections were greater in "the pre-computer age," because "[t]raditional surveillance for any extended period of time was difficult and costly and therefore rarely undertaken"). In practical terms, the consequences of requiring a tailored showing in this instance might be no more than that the government would seek cell-site data for a shorter duration, or would invest more time in physical surveillance to gather necessary facts prior to seeking a warrant. It is true that other courts usually do not require the showing discussed here and no authoritative court has stated plainly that such a showing is required. It is also true that in certain cases, there is no practical difference between obtaining a warrant to use technology to track a suspect and simply using traditional means to do it; the government can often detail DEA agents to follow suspects on highways for a few hours almost as easily as they can track a cell phone. But the same technology and grant of authority, without more care, can also permit the government to conduct near-limitless around-the- 33 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 34 of 58 Pg ID 1623 clock surveillance of a person's location, subject only to the limitation of where the suspect may not have taken a cell phone. As discussed with concern in Skinner and Jones, such monitoring "generates a precise, comprehensive record of a person's public movements that reflects a wealth of detail about her familial, political, professional, religious, and sexual associations." Jones, 132 S. Ct. at 955 (Sotomayor, J. concurring) (quoting People v. Weaver, 12 N.Y.3d 433, 441-442 (2009 . To date, real-time cell-phone location-data tracking is the easiest means to gather the most comprehensive data about a person's public — and private — movements available. The standard discussed here is responsive to this concern, and is not inconsistent with the precedent that binds this Court. 4. Limitations of the Standard The cell-phone tracking standard is meant to be read in harmony with the Sixth Circuit's holding in Skinner. Specifically, if the government seeks to track an individual for a short period of time only, with no foreseeable intrusion into protected areas, the probable- cause showing discussed here would not apply and Skinner would plainly govern. If, for example, the tracking was to be done for a limited purpose on public thoroughfares — like in Skinner, with foreknowledge a suspect was taking a two day cross-country trip — the specific Fourth Amendment concerns addressed here would not be raised. But if the tracking the government seeks to undertake is similar to the "intensive 28-day" monitoring the Sixth Circuit itself distinguished, then the more detailed showing required to meet the cell-phone tracking standard should be made. Applying the cell-phone tracking standard to this case, the Court finds, as discussed next, that the government did not make the necessary probable-cause showing in the March 11, 2010 warrant application. 34 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 35 of 58 Pg ID 1624 D. Probable Cause for the March 11, 2010 Warrant To obtain the real-time cell-site location data for the challenged phones, the government obtained the previously mentioned Criminal Rule 41 probable-cause warrant for each phone. Strictly speaking, Defendants challenge all of the search warrants for cell- site and GPS location data, but their primary argument is that the first March 11, 2010 search warrant was not supported by probable cause and the remaining warrants are the "fruit of the poisonous tree" of that original warrant.8 For a warrant to issue, a magistrate judge must find probable cause such that there is a "fair probability . . . that contraband or evidence of a crime will be found in a particular place." United States v. Gardiner, 463 F.3d 445, 470 (6th Cir. 2006) (quoting United States v. Davidson, 936 F.2d 856, 859 (6th Cir. 1991 . A magistrate judge need only find that there are "reasonable grounds for belief" that evidence will be found. Id. Probable cause is assessed on review of the "four corners" of the affidavit submitted to the magistrate judge, and usually not from extrinsic evidence introduced later. Frazier, 423 F.3d at 535. Once a magistrate judge has decided that probable cause exists, as long as the magistrate judge had a "substantial basis" for that conclusion, a reviewing court should uphold the order. Gardiner, 463 F.3d at 470. When, as here, an affidavit by a law enforcement officer is the basis for the magistrate judge's opinion, the affidavit itself must provide "a substantial basis for determining the existence of probable cause." Id. Search warrant affidavits are judged on the totality of the circumstances, not by line-by-line scrutiny. See generally United States v. Woosley, 361 F.3d 924, 926 (6th Cir. 2004). 8 Defendants also challenge the October 5, 2010 warrant as derivative of the Whigham vehicle search. Because the Court will admit all the evidence seized during the Whigham vehicle search, discussed infra, at 39, the Court will not consider this challenge any further. 35 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 36 of 58 Pg ID 1625 1. Summary of the March 11, 2010 Donovan Affidavit Defendants first challenge the probable-cause basis for the search warrant for cell- phone number (313) 529-5848, subscribed to by Carlos Powell. DEA Special Agent Edward Donovan prepared the affidavit in support of the March 11, 2010 application. See March 11, 2011 Search Warrant App., ECF No. 106-1. Magistrate Judge Donald Scheer approved the application. In the affidavit, Donovan stated the following: He and other DEA agents were investigating a large-scale drug-trafficking ring between Arizona, Illinois, and Michigan. During the course of the investigation, Ted Morawa was arrested and indicted in federal district court in Arizona. Mar. 11 Donovan Aff. at ¶ 7. Morawa agreed to cooperate and proffered that part of the drug trafficking ring involved him delivering or causing to be delivered over 200 kilograms of cocaine and over 100 kilograms of heroin to an individual in Detroit, Michigan then only known as "50," and subsequently identified by Morawa as Defendant Carlos Powell. Based on Morawa's direct statements and proffers, and evidence supporting the veracity of Morawa's statements in the form of intercepted communications, money seizures, and drug seizures, Donovan believed Morawa to be a credible source. Id. at ¶¶ 8, 10. Separately, agents of the Detroit DEA and Detroit Internal Revenue Service Criminal Investigation Division interviewed a cooperating defendant witness, the owner and operator of a jewelry store in Detroit. The cooperating defendant witness stated that defendant Carlos Powell purchased several hundreds of thousands of dollars worth of jewelry in cash from the store. Id. at ¶ 12. Donovan stated that, in his education and experience, such purchases in cash were often derived from the sale of narcotics. Id. at ¶ 13. 36 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 37 of 58 Pg ID 1626 Donovan learned that the T-Mobile cell phone number (313) 529-5848 was subscribed to by Carlos Powell, who at the time was identified as residing at 16475 Ego Avenue, Eastpointe, Michigan. Donovan and other agents attempted to locate Carlos Powell, Carlos Powell's vehicles, or other residences frequented by Carlos Powell, but had no success. Id. at ¶ 15. Donovan stated he believed that requesting the GPS location data related to (313) 529-5848 would assist with tracking Carlos Powell, identifying locations used by Carlos Powell to store narcotics, identifying Carlos Powell's associates, and identifying Carlos Powell's assets derived from unlawful narcotics sales. Id. Magistrate Judge Scheer granted the application on March 11, 2010, and ordered the cell-phone service provider to provide all assistance necessary to ascertain the physical location of the cell phone associated with the number (313) 529-5848, for a period of thirty days. The magistrate judge found probable cause to believe the information would lead to evidence of violations of the drug code, as well as the identification of such violators. See Mar. 11 Warrant, ECF No. 106-1 at 13. 2. Probable Cause Analysis Defendants argue that the March 11 Donovan Affidavit was insufficient to provide a substantial basis for the magistrate judge to find probable cause to issue the warrant. Defendants state that the affidavit provided "even less of a showing of probable cause" than subsequent warrants which themselves were "deficient." Supp. Mem. at 1, ECF No. 106. Defendants argue that the affidavit put forth no evidence that the (313) 529-5848 telephone was used in connection with any unlawful activity. Likewise, Defendants note that the information provided by Morawa was not dated, and therefore did not establish 37 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 38 of 58 Pg ID 1627 probable cause that Carlos Powell was engaged in illegal activity at the time the warrant was sought. In response, the government submits that the affidavit was more than sufficient to show probable cause and that it afforded the magistrate judge a substantial basis on which to grant the warrant. The government argues that the affidavit clearly established through both informant testimony and independent verification the likelihood that Carlos Powell was a major drug trafficker in Detroit. The government also argues that the testimony established Carlos Powell as an active drug dealer, and that the information was not stale. Moreover, it argues that the DEA was entitled to rely on the search warrant under the good faith exception. After reviewing the March 11 Donovan Affidavit, the Court concludes that the affidavit provided, under traditional probable cause analysis, a sufficient basis for the magistrate judge to find probable cause to issue the warrant. The core of the affidavit was the informant testimony, confirmed by independently verified evidence, that Carlos Powell was a major player in a drug trafficking ring in Detroit. Although the affidavit relied to some extent on hearsay, it was corroborated by independently obtained evidence that permitted Donovan to make a reasonable conclusion that Morawa's statements were true. And, in any event, a police officer may rely on hearsay from an informant to establish probable cause, even for warrantless searches, "so long as the informant's statement is reasonably corroborated by other matters within the officer's knowledge." United States v. Helton, 314 F.3d 812, 819 (6th Cir. 2003) (quoting Jones v. United States, 362 U.S. 257, 269-70 (1960 . Donovan found Morawa reliable based on Morawa's statements and additional corroborating evidence from the investigation that supported Morawa's statements. See 38 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 39 of 58 Pg ID 1628 Mar. 11 Donovan Aff. at ¶ 8. Accordingly, the Court finds that under the prevailing probable- cause standard, a substantial basis existed to find probable cause that Carlos Powell was a drug dealer and that tracking his cell phone would lead to evidence of a crime. See, e.g., United States v. Medina-Meraz, No. 10-20338, 2012 WL 1364612, at *3 (E.D. Mich. Apr. 19, 2012). The affidavit does not make a sufficient showing to establish probable cause, however, under the cell-phone tracking standard discussed above. Although it does state sufficient facts to demonstrate that Powell was involved in a large-scale drug trafficking organization, and that the cell phone to be tracked belonged to Powell, it did not set forth facts to demonstrate a nexus between the cell phone and the criminal activity, or between Powell's location in protected areas and the criminal activity. First, although the affidavit states that Morawa communicated with Powell in furtherance of the narcotics trafficking, it does not state that Morawa and Powell communicated by cell phone, or that Morawa contacted Powell at the specific cell-phone number at issue here. Second, the affidavit sought cell-phone location data to determine Powell's location, but it also sought to track the phone for a period of 45 days — significantly longer than reasonably necessary to determine Powell's location. And the tracking was unquestionably long enough to trigger the concern that agents would track Powell's location in protected areas, like his residence. The affidavit does not set forth any facts to support a finding that tracking Powell via his cell phone into, for example, his residence, would lead to evidence of the suspected criminal activity. Accordingly, the Court finds the affidavit does not establish probable cause sufficient to warrant the invasion of privacy brought about by long-term real-time cell phone tracking. A reasonable alternative procedure that the government could have followed in 39 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 40 of 58 Pg ID 1629 this instance would have been to seek short-term cell-phone location data for the limited purpose of determining Powell's location. The government could then have dispatched agents to track Powell physically until they uncovered the additional facts necessary to show a nexus between any protected locations frequented by Powell and the suspected criminal activity. Armed with those facts, the government would readily have met the cell- phone tracking standard described here. 3. Good Faith Exception Under the Court's construction of the applicable precedent, the government did not make a sufficient showing to demonstrate that probable cause existed for the warrant to issue. The evidence is nonetheless admissible, however, because whether or not the warrant issued on probable cause, the government relied on it in good faith. See Buford, 632 F.3d at 271 ("[S]uppression is not an available remedy when police officers conducted a search in good faith reliance on some higher authority, such as a warrant or a statute, even if the warrant or statute were later held invalid or unconstitutional (the ‘good faith exception’).") (citation omitted). The exception is not absolute. The Supreme Court has outlined four scenarios when good-faith reliance on a warrant is not sufficient: "(1) when the warrant is issued on the basis of an affidavit that the affiant knows (or is reckless in not knowing) contains false information; (2) when the issuing magistrate abandons his neutral and detached role and serves as a rubber stamp for police activities; (3) when the affidavit is so lacking in indicia of probable cause that a belief in its existence is objectively unreasonable; and, (4) when the warrant is so facially deficient that it cannot reasonably be presumed to be valid." United States v. Leon, 468 U.S. 897, 914 (1984 . 40 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 41 of 58 Pg ID 1630 Defendants argue that the exception does not apply here because the affidavit is lacking in indicia of probable cause, such that the DEA’s reliance on it was objectively unreasonable. An affidavit is lacking in indicia of probable cause, also known as a "bare bones" affidavit, if it contains only "suspicions, beliefs, or conclusions, without providing some underlying factual circumstances regarding veracity, reliability, and basis of knowledge." United States v. Laughton, 409 F.3d 744, 748-49 (6th Cir. 2005) (quoting United States v. Weaver, 99 F.3d 1372, 1378 (6th Cir. 1996 . This standard is "a less demanding showing than the 'substantial basis' threshold required to prove the existence of probable cause in the first place." Id. (quoting Carpenter, 360 F.3d at 595). The Court has already found that the affidavit met the substantial-basis threshold; it necessarily was also not lacking in indicia of probable cause. Accordingly, the good-faith exception applies. The evidence obtained pursuant to the March 11, 2010 warrant for real-time cell-site location data is admissible and will not be suppressed. E. "Fruit of the Poisonous Tree" and the Remaining Cell-Site Warrants Defendants argue that if the initial March 11, 2010 search was unreasonable, any evidence obtained from it — specifically the subsequent real-time cell-site location-data search warrants — are "fruit of the poisonous tree" and are therefore inadmissible. Defendants are correct that when the government exploits illegally obtained evidence, subsequent searches and seizures based on that evidence are tainted and subject to the exclusionary rule. See Pearce, 531 F.3d at 381(citing Wong Sun, 371 U.S. at 484-85). But because all the evidence obtained pursuant to the March 11, 2010 warrant is admissible under the good-faith exception, the remaining warrants are, therefore, not based on any tainted material that would justify suppression under the derivative rule. Moreover, having 41 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 42 of 58 Pg ID 1631 reviewed the affidavits submitted in support of each warrant, the Court also finds that the government obtained the warrants from a neutral and detached magistrate judge based on more than a "bare bones" affidavit, and that therefore, the evidence obtained from the subsequent warrants is also admissible under the good-faith exception. III. Warrantless Use of GPS Tracking Devices / Vehicle Searches Next, Defendants challenge the government's warrantless installation of GPS tracking devices on vehicles belonging to Carlos Powell9 and Eric Powell, and the use of the location data obtained to conduct four traffic stops in which evidence was seized.10 As set forth below, the Court concludes that whether or not the installation and use of the GPS devices was an unconstitutional search, the evidence seized in the traffic stops is admissible under exceptions to the exclusionary rule. The Court will first discuss the use of the GPS tracking devices, and then discuss the traffic stops. A. GPS Tracking Device As stated above, the Court conducted an evidentiary hearing on January 17 and February 12, 2013 to provide a factual basis for a decision on the motion to suppress. Special Agent Donovan was the only witness. He testified regarding his and the DEA's 9 Special Agent Donovan testified that the government did not collect or use any data from the tracking device affixed to Carlos Powell’s car. Hr’g I at 17-18. Because there is no evidence to suppress from the use of that tracking device, the Court will discuss only the tracking device affixed to Eric Powell’s vehicle. 10 In addition to their fruit-of-the poisonous-tree objection to the evidence seized in the traffic stops, Defendants also seek to directly suppress the location data seized from the GPS tracker. The location-data evidence, strictly speaking, is simply evidence of the location of Eric Powell’s truck at any given moment. As a practical matter, therefore, suppression of the GPS data regarding the location of Powell’s truck, without anything more, really suppresses nothing. Moreover, the uncontroversial DEA testimony that Powell’s truck was on a highway on any particular day, would be permissible in any event, given the extensive in-person police presence on the highways, as discussed below. 42 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 43 of 58 Pg ID 1632 actions in using the GPS tracker to follow Eric Powell's vehicle during the investigation. See Hr’g I at 15. The following facts are taken from his testimony. 1. Technical Background The DEA used a GPS tracker that affixes to the undercarriage or other unobtrusive spot on a vehicle. The tracker is "self-contained," and is found within a storage box that protects it from the elements. The box is attached with magnets to the undercarriage of a vehicle. Id. at 16. The GPS unit transmits its coordinates via the internet. During a typical operation, a DEA or other federal agent has a laptop computer with a wireless internet connection. At any time, the DEA agent can "ping" the GPS tracker by pressing a button on the tracking program. The GPS tracker then transmits its coordinates back to the computer. The program can ping a tracker at regular intervals as long as half an hour or as short as every minute, or whenever the agent wishes. Id. at 53; Hr’g II. There can be a time delay of up to ten minutes between when the GPS tracker transmits its coordinates and when the DEA agent receives the coordinates on the computer. Hr’g I at 54. The printed records of the location data show only when the data was generated, and not when a DEA agent accessed or received the data. Hr’g II. The GPS tracking device is generally accurate to within several meters, and the location data will state the variation from the coordinate reading. For example, a 12-meter variation and a direction would indicate that the actual GPS unit could be within 12 meters from the coordinate reading. Id. The location data is stored on a remote computer server, capable of being accessed by the DEA, and it is usually archived. Hr’g II. On cross-examination, Donovan testified that archived location data for the first two months of the tracking, beginning around June 10, 2010, was inadvertently lost. Typically, the servers keep the data for several months. In this 43 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 44 of 58 Pg ID 1633 case, the servers overwrote the data as part of an apparently normal record storage procedure. The first available tracking records begin on or around August 31, 2010. Id. 2. GPS Tracker Installation and Re-Installation Before placing the GPS tracking device on Eric Powell's truck, the DEA had amassed considerable evidence about the overall drug trafficking ring and Eric Powell's involvement in it. On approximately June 10, 2010, the DEA located Eric Powell’s Chevy Silverado pick- up truck parked in the driveway of Eric Powell's residence at 24505 Franklin Farms Drive, in Franklin, Michigan. Hr’g I at 19-21.The DEA changed out the battery on the tracking devices several times. Most of the time, the change-out was done in Eric Powell's driveway. On three occasions, the truck was parked elsewhere: in front of Earnest Proge's residence, in the commercial parking lot of a warehouse, and in the parking lot of a car dealership. Id. at 21-22. Powell’s home is in a gated community. A security gate blocked the entrance to Franklin Farms Drive, and on the gate there was a sign reading "private property, no trespassing." To install the GPS device, the DEA agents simply walked around the gate, as it is only a vehicular gate and does not bar foot traffic. Hr’g II. During daylight hours, Donovan has driven to the gate and it has opened automatically. Id. Donovan installed the GPS tracker at night, and is unsure whether or not the gate would have opened automatically at that time. Id. 3. Constitutionality of the GPS tracker Defendants principally challenge the use of the GPS trackers under Jones, arguing that after Jones, "it seems clear enough that the warrantless employment of the tracking devices constituted a Fourth Amendment violation." Mot. to Dismiss at 2. Defendants also 44 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 45 of 58 Pg ID 1634 argue that whether or not the warrantless installation of the GPS devices was itself a Fourth Amendment violation under Jones, the long-term use of the GPS device to track Powell's vehicle moves the surveillance beyond the realm of a reasonable search and into one that was clearly unreasonable. Finally, Defendants argue that because Powell's truck was parked in a gated community, requiring key-card access to enter, the DEA agents committed a standard trespass, and hence an unconstitutional search, by entering the property to plant the GPS device. Hr’g II. Taking the last argument first, it is true that gated communities are "private property" in the general sense and are designed to restrict access to the community. But it is not true that residence in a gated community transforms the entire community into an individual’s private property for Fourth Amendment purposes. See United States v. Harris, 6 F. App'x 304, 308 (6th Cir. 2001) (holding that the "curtilage" and "public areas" doctrines do not apply differently to gated communities than to regular neighborhoods). Here, as in Harris, Powell’s gated community is not his exclusive property such that the agents could violate Powell’s reasonable expectation of privacy by entering. As Harris noted, "other residents and their guests, garbage collectors, and other service providers" have regular access to the community. See id. With respect to Jones, the parties disagree about the scope of its holding. In that case, police installed a GPS device on a vehicle and used the data collected to monitor the defendant’s movements for four weeks. The Supreme Court held that the physical installation of the GPS device was a "search" under the Fourth Amendment and affirmed the court of appeals’ finding that evidence obtained as a result should have been excluded at trial. Jones, 132 S. Ct. at 949. Defendants argue that Jones holds that the warrantless 45 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 46 of 58 Pg ID 1635 installation of a GPS tracker is an unreasonable search to which the exclusionary rule always applies, or at least that the search was unreasonable here. The government argues that Jones holds simply that installation of the device is a Fourth Amendment search, and leaves open the question of whether or not such a search could be reasonable. In the instant case, the government contends, the search was reasonable. The Court will not reach the issue, because, for the reasons explained next, all the evidence seized in the traffic stops would be admissible even if the installation and use of the GPS tracker was an unreasonable search otherwise subject to the exclusionary rule.11 B. The Traffic Stops Defendants seek suppression of evidence seized during four traffic stops. Specifically, Defendants argue that installation of the GPS device on Powell’s car allowed police to seize evidence in vehicle searches during: (1) the June 23, 2010 traffic stop and search of Benny Whigham’s vehicle; (2) the September 17, 2010 traffic stop of Earnest Proge’s vehicle; (3) the June 28, 2010 traffic stop and search of Juan Valle’s vehicle; and (4) the October 22, 2010 traffic stop and search of Margarita de Vallejo’s vehicle. The Court finds that the evidence seized in the traffic stops is admissible because each stop falls within an exception to the exclusionary rule. 1. Legal Standards A police officer may lawfully stop a car if there is "probable cause to believe that a civil traffic violation has occurred, or reasonable suspicion of an ongoing crime." United States 11 Nor will the Court discuss the government’s arguments that the officers’ good-faith reliance on the existing law pre-Jones provides an exception to application of the exclusionary rule in this case. See Davis v. United States, 131 S. Ct. 2419, 2429 (2011) ("Evidence obtained during a search conducted in reasonable reliance on binding precedent is not subject to the exclusionary rule."). 46 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 47 of 58 Pg ID 1636 v. Blair, 524 F.3d 740, 748 (6th Cir. 2008) (citations and internal quotation marks omitted). A traffic stop is a "seizure" within the meaning of the Fourth Amendment, and evidence seized during an illegal stop "must be suppressed as fruits of the poisonous tree." United States v. Jackson, 682 F.3d 448, 453 (6th Cir. 2012) cert. denied, 133 S. Ct. 370 (2012). Defendants argue that the traffic stops at issue here were illegal as the fruit of the poisonous tree of the installation and use of the GPS tracker.12 Three exceptions to the exclusionary rule permit the admission of evidence, even when a Fourth Amendment violation has occurred: the independent-source, inevitable- discovery, and attenuation doctrines. See generally United States v. Kennedy, 61 F.3d 494, 497 (6th Cir. 1995). The independent-source doctrine states that even if an illegal search occurs during an investigation, if "a proper, independent search led to the evidence in question," then the evidence may still be admitted. United States v. Baldwin, 114 F. App'x 675, 681 (6th Cir. 2004) (quoting United States v. Dice, 200 F.3d 978, 984 (6th Cir. 2000 . Similarly, under the inevitable-discovery doctrine, evidence is admissible if the government proves that it "inevitably would have been acquired through lawful means had the [] misconduct not occurred." Kennedy, 61 F.3d at 497; see also United States v. Alexander, 540 F.3d 494, 502 (6th Cir. 2008). While a wholly independent investigation is one way for the government to show inevitable discovery, that is not the only way to make the required showing. See id. at 499-500. Instead, the government may show "compelling facts indicating that the disputed evidence inevitably would have been discovered." Id. at 12 Defendants also argue that the real-time cell-site location data led to the traffic stops. Because the Court has already found the location data admissible under the good-faith exception, the Court need not consider whether the data led to a search where the evidence collected was "tainted." Therefore, in this section, the Court addresses only the evidence gathered from the use of GPS tracking data on Eric Powell's vehicle. 47 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 48 of 58 Pg ID 1637 498; see also United States v. Akridge, 346 F.3d 618, 623 (6th Cir. 2003) (quoting Murray v. United States, 487 U.S. 533, 539 (1988) ("The inevitable discovery doctrine, with its distinct requirements, is in reality an extrapolation from the independent source doctrine: Since the tainted evidence would be admissible if in fact discovered through an independent source, it should be admissible if it inevitably would have been discovered."). The government must show inevitable discovery by a preponderance of the evidence. Id. at 497. Finally, the attenuation doctrine states that if evidence seized is sufficiently "attenuated" from the initial Fourth Amendment wrongdoing, the taint may also be so attenuated as to permit the admission of the evidence. United States v. Williams, 615 F.3d 657, 668-69 (6th Cir. 2010). A court must consider "[t]he temporal proximity of the [(unlawful search)] and the [emergence of the incriminating evidence at issue], the presence of intervening circumstances, and, particularly, the purpose and flagrancy of the official misconduct." Id. (brackets in original) (citing Brown v. Illinois, 422 U.S. 590, 603-04 (1975 . "No single factor in this analysis is dispositive of attenuation." United States v. Beauchamp, 659 F.3d 560, 573 (6th Cir. 2011). 2. Analysis The Court will apply the above standards to the traffic stops, in chronological order. a. Whigham Traffic Stop The first challenged stop after the GPS tracker was placed on Eric Powell's truck, was the traffic stop of Benny Whigham's vehicle on June 23, 2010. On June 22, 2010, the DEA determined, using the GPS tracker, that Eric Powell had traveled from Detroit to Chicago. At some point while Powell was in Chicago, the DEA lost the GPS tracker signal from 48 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 49 of 58 Pg ID 1638 Powell’s truck, and deployed agents to locate the truck visually. Hr’g I at 38-40. The next day, the DEA began physical surveillance of Powell's truck and Whigham’s vehicle, following the vehicles to Cicero, Illinois. Id. In Cicero, Powell, Whigham, and Earnest Proge left the two vehicles in a restaurant parking lot for a period of time during which an unknown Hispanic male took Whigham's vehicle to a garage, and then returned it to the parking spot several minutes later. Id. at 40. The agents, assisted by the Michigan State Police, continued physical surveillance of the vehicles for over ten hours, as they were driven in tandem from Cicero back toward Detroit. Sullivan Aff. ¶ 11, ECF No. 74-9. A state trooper stopped Whigham’s vehicle for a traffic violation near Ann Arbor, Michigan. Hr’g I at 44. Whigham granted the police consent to search the vehicle. Id.; Sullivan Aff. at ¶ 13. The trooper found thirteen kilograms of heroin in the vehicle. Id. The traffic stop and search are sufficiently attenuated from use of the GPS tracker to preclude application of the exclusionary rule. As stated above, the factors relevant to attenuation are (1) the length of time between the illegal search and discovery of new evidence; (2) the presence of intervening circumstances; and (3) the purpose and flagrancy of the official misconduct. United States v. Gross, 662 F.3d 393, 401-402 (6th Cir. 2011). Here, the time factor is neutral; the GPS tracker was used to locate Eric Powell's vehicle in Chicago nearly a full day before the traffic stop of Whigham’s vehicle. Even if the gap between use of the GPS tracker and the traffic stop can be considered close in time, temporal proximity alone, does not justify suppression. See generally Clariot, 655 F.3d at 555 ("[N]o case (to our knowledge) holds that temporal proximity alone, without any other indicia of causation, justifies suppression."). 49 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 50 of 58 Pg ID 1639 Next, multiple intervening circumstances occurred between the use of the GPS tracker and the vehicle stop that were sufficient to dissipate any unlawful conduct. First, the GPS tracker was not used to track Whigham's vehicle at all. Second, Whigham's vehicle was directly observed by several DEA agents that day, both in the city and on the highways. The DEA would have inevitably discovered Whigham's vehicle on the highway, regardless of any use of the GPS tracking device on Eric Powell's truck that day. Third, Whigham's vehicle was lawfully stopped by the MSP. Although the stop was pretextual, nothing in the record shows that Whigham did not actually violate the traffic laws justifying the stop. See United States v. Herbin, 343 F.3d 807, 809 (6th Cir. 2003) (even if pretextual, a traffic stop for an actual violation of the traffic laws remains legal). Finally, during the traffic stop, Whigham gave the MSP his consent to search the car. See United States v. Burton, 334 F.3d 514, 519 (6th Cir. 2003) (officers may reasonably request consent to search during a traffic stop even absent other evidence). While the exclusionary rule may in certain circumstances still exclude evidence when a consent to search was given, consent that is "sufficiently attenuated" from the original seizure remains valid. See United States v. Lopez-Arias, 344 F.3d 623, 629 (6th Cir. 2003). Here, for the circumstances discussed above, Whigham's consent was sufficiently attenuated from initial use of the GPS tracker to locate Powell’s truck in Chicago to remain admissible. Finally, the agents’ conduct was not flagrant. Donovan had no reason to believe installation of the tracker was illegal. To the contrary, he consulted extensively with the U.S. Attorney’s Office and the DEA general counsel’s office regarding use of the tracker, and he testified that he would have, and could have, obtained a warrant had he felt it necessary. See Hr’g II; see also United States v. Boone, 62 F.3d 323, 325 (10th Cir. 1995) 50 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 51 of 58 Pg ID 1640 (finding that the officer’s mistaken belief that defendants had consented to search, while a Fourth Amendment violation, "does not qualify as flagrant misconduct that would tilt the scales against attenuation"). Accordingly, the Court finds that the evidence seized during the traffic stop of Whigham’s car is admissible. b. Valle Traffic Stop On June 28, 2010, the DEA was conducting surveillance of a suspected stash location, a residence at 20109 Conley Street, Detroit, Michigan, using pole cameras and physical surveillance. Nov. 8 Donovan Aff. ¶ 61, ECF No. 74-13; Resp. at 37-38. The DEA observed Juan Valle arrive at the residence, followed shortly thereafter by Carlos Powell. Powell carried a large bag with him into the residence. When Valle emerged later, he placed several objects into his vehicle and drove away. Nov. 8 Donovan Aff. ¶ 61-62. The DEA coordinated with the Michigan State Police in Charlotte, Michigan, to track Valle's vehicle. State troopers stopped the vehicle after a traffic violation. Valle gave them his consent to search the vehicle. Resp. at 38. State troopers found roughly $259,000 in the vehicle. Id. at ¶ 63. Although the GPS tracking device was attached to Eric Powell's vehicle during this period, nothing in the record demonstrates that the tracking information had anything to do with the stop of Valle's vehicle. Donovan testified specifically that GPS location data from Eric Powell's vehicle was not used in the events surrounding this search. Hr’g I at 48. Accordingly, the Court finds the GPS tracking data played no, or a highly attenuated, role in this search. Because the traffic stop was legal and Valle consented to search, all evidence from the search is admissible. c. Proge Traffic Stop 51 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 52 of 58 Pg ID 1641 Over the course of several weeks of investigation, which included some use of the GPS tracker, the DEA determined that on several occasions Eric Powell and Earnest Proge drove in tandem between Detroit and Michigan. Nov. 8, 2010 Donovan Aff. ¶ 68. On September 17, 2010, while the GPS tracker was still attached to Powell’s truck, the DEA used surveillance cameras to independently observe Powell arrive at a residence in Eastpointe, Michigan, and, wearing latex gloves, load several large suitcases into Proge’s Ford Flex. Hr’g I at 51; Nov. 8, 2010 Donovan Aff. ¶ 69. Powell drove the Ford Flex to a warehouse in Centerline, Michigan where the DEA continued surveillance of the vehicle using a different pole camera. Id. Later, the Ford Flex, now driven by Proge, departed from the warehouse. From their knowledge of Powell and Proge’s previously tracked trips, the DEA dispatched agents along Interstate 94 to look for the Ford Flex. Hr’g I at 53. An agent spotted the vehicle proceeding west on Interstate 94 toward Kalamazoo, traveling in tandem with Powell’s truck. Id. at 53; Nov. 8, 2010 Donovan Aff. ¶ 70. The GPS device may or may not have been used to locate Powell’s truck at the same time, but Donovan testified that in his opinion, the DEA would inevitably have located Proge's vehicle on the highway at some point that day because of the multiple DEA and Michigan State Police officers searching the highway for the vehicle. Id. at 57. State troopers stopped Proge’s vehicle in Calhoun County, after a traffic violation. Nov. 8 Donovan Aff. ¶ 71. Proge at first complied with the stop, but then fled the scene, nearly striking another police officer who had just arrived. Hrg. I at 59. Proge engaged the Michigan State Police in a high-speed chase before pulling over. The police arrested Proge for felony Fleeing and Eluding and Assault of a Police Officer, and searched his car. During the search of the vehicle, troopers discovered more than $2.2 million, as well as a drug 52 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 53 of 58 Pg ID 1642 ledger, and a newspaper article regarding a Detroit Police Department drug raid. Id.; Nov. 8 Donovan Aff. at ¶¶ 71-73. "If a suspect's response to an illegal stop is a new and distinct crime, such as flight or use of force, any evidence recovered incident to the arrest for the subsequent crime is not tainted by the unlawfulness of the initial detention." Beauchamp, 659 F.3d at 574. The search of Proge's vehicle occurred only after his arrest for unlawful flight, thereby serving to attenuate whatever illegal taint the GPS tracker may have initially provided. See Baldwin, 114 F. App'x at 682 (finding evidence inadmissible where it was discovered before defendant's illegal conduct). The Court will therefore admit all evidence from this stop. d. de Vallejo Traffic Stop The final challenged traffic stop is the search of Margarita de Vallejo’s car on October 22, 2010. Donovan had removed the GPS tracker from Eric Powell's truck sometime on September 17, 2010, because he believed its use may have caused suspicion among the drug traffickers. Hr’g I at 60. But on October 1, 2010, after learning that Eric Powell had apparently taken another trip to Chicago for the purpose of exchanging drugs, Donovan replaced the tracker. Id. at 61. On October 22, 2010, the DEA, using a pole camera, observed Powell loading several suitcases from the Eastpointe residence onto his truck. Nov. 8 Donovan Aff. ¶ 89, ECF No. 74-14. The DEA again established surveillance along I-94 to look for the truck, as well as for a Ford Taurus that agents knew Proge had taken to driving. Hr’g I at 63. Agents spotted the vehicles on I-94 near Romulus, and followed them to the parking lot of a hotel in Ann Arbor. Id. at 63-65. Donovan testified that, although agents used the GPS tracking device to help track Powell's movements, the DEA had a sufficient police presence on the road 53 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 54 of 58 Pg ID 1643 that the agents would inevitably have been able to physically track Powell's truck for the duration of the day. Id. at 64. At the hotel, the DEA observed Powell and Proge transfer the suitcases from the truck into a Toyota Camry parked behind the hotel. Id. at 65; Nov. 8 Donovan Aff. ¶ 94. The DEA agents followed the Toyota, driven by de Vallejo, away from the encounter, and did not follow Powell's truck. The agents then, in conjunction with the Michigan State Police, stopped the Toyota after de Vallejo committed a traffic violation. Id. During the stop, de Vallejo gave the officers her consent to search the vehicle. Nov. 8 Donovan Aff. ¶ 95. Officers found 12 kilograms of cocaine and roughly $2 million in currency in the car. Id. at ¶ 96. Based on the facts presented, the Court finds the inevitable-discovery and attenuation doctrines permit admission of the evidence found in de Vallejo’s vehicle. First, although it is true that agents used the GPS tracker during the pursuit of Eric Powell's vehicle, they did so only after they had observed via the pole camera behavior indicating he was preparing to engage in another illegal drug or money transfer trip. Moreover, as Donovan testified, agents and state troopers were dispatched to locate the truck on the interstate and would inevitably have done so and been able to physically track Powell and Proge as they traveled to Ann Arbor where they met de Vallejo. For these reasons, the Court finds that the agents would inevitably have discovered de Vallejo’s involvement, even without the GPS tracking evidence. Second, like the Whigham stop, the police detained de Vallejo pursuant to a lawful traffic stop, and de Vallejo gave her consent to search. Based on these intervening circumstances, and applying the same legal standards discussed during the Whigham analysis, the Court finds that the agent’s use of the GPS device to track Powell was so 54 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 55 of 58 Pg ID 1644 attenuated from the DEA's actions in stopping de Vallejo's vehicle that the evidence seized in the stop is admissible. IV. Warrants Issued for the Search of Nine Detroit Properties Finally, Defendants challenge the warrants issued on November 8, 2010, for the searches of nine properties in the Detroit metro area. Defendants do not challenge the searches directly, but rather challenge them under the fruit-of-the-poisonous-tree doctrine, arguing that the warrants were premised on information obtained through the contested searches discussed above. The nine properties are: • • • • • • • • • 20109 Conley Street, Detroit, Michigan; a stash house / safe house used by Carlos Powell and his organization. 15765 Stricker, Eastpointe, Michigan; a stash house / safe house used by Carlos and Eric Powell to facilitate their operation. 15514 E. Eight Mile Road, Detroit, Michigan; a commercial store front owned and operated by Carlos Powell. 22208 Raven Avenue, Eastpointe, Michigan; a residence used by Carlos Powell and Tamika Turner. 57869 Apple Creek Drive, Washington Township, Michigan; a residence used by Carlos Powell and Tamika Turner. 6748 Oyster Cove, West Bloomfield, Michigan; a residence owned by Carlos Powell. 24505 Franklin Farms Drive, Franklin, Michigan; a residence used by Eric Powell. 24300 Sherwood Avenue, Centerline, Michigan; a commercial warehouse operated and utilized by Eric Powell. 1137 Outer Drive, Detroit, Michigan; a residence used by Earnest Proge. In applying for the relevant warrants, Donovan prepared a seventy-six page affidavit. See Nov. 8 Donovan Aff. In the affidavit, Donovan first reiterated the identity of Morowa as an informant who identified Carlos Powell as a major drug trafficker; and then he proceeded 55 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 56 of 58 Pg ID 1645 to outline the course of the investigation until that point, including the seizure of $1.1 million in Phoenix, Arizona, in April 2010; the interview of another incarcerated participant in the trafficking ring; the seizure of 13 kilograms of heroin in June; the seizure of $5 million in Chicago in July; surveillance of Carlos Powell and Eric Powell via pole cameras and GPS tracking devices; the seizure of $2 million and 12 kilograms of cocaine in October; and the results of financial and income tax investigations and analysis. Id. at ¶¶ 8-53. The crux of Defendants' argument is that evidence derived from the cell-site and GPS location data from the phones, and from the GPS tracking device on Powell's truck, formed so substantial a part of the November 8 Donovan Affidavit as to taint the warrants with illegality under the fruit-of-the-poisonous-tree doctrine, thereby requiring suppression of the evidence seized from the properties. The Court finds that all the evidence is admissible. First, the Court has already admitted the cell-site and GPS location data from the cell phones under the good-faith exception. To the extent, therefore, the warrants are premised on information obtained from the cell-phone tracking, the evidence is untainted. See United States v. Jenkins, 396 F.3d 751, 760 (6th Cir. 2005) (court may consider untainted portions of warrant affidavit to determine whether probable cause exists). The same is true of the evidence obtained from the vehicle searches. And when considering that evidence along with the rest of the affidavit as the basis for probable cause, the affidavit clearly establishes probable cause to search. Even if the Court did not consider the GPS tracking data, there would remain an overwhelming amount of evidence documented in the affidavit including the vehicle searches, phone records, witness affidavits, and other evidence that is more than sufficient to constitute a substantial basis for the Magistrate Judge to conclude that probable cause existed to search the nine properties. See Gardiner, 463 F.3d at 470 56 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 57 of 58 Pg ID 1646 (magistrate need only a substantial basis to support a finding of probable cause). The warrants remain valid. And even considering the warrant absent the GPS data (which, as stated, would not exclude the previously admitted vehicle searches), any evidence seized from the properties would nevertheless remain admissible under the valid-warrant good faith exception. See Buford, 632 F.3d at 271. The DEA was relying on a warrant issued by a magistrate judge, and none of the four Leon exceptions exclude the evidence. See Leon, 468 U.S. at 914 (limits to good faith exception). No argument is made, nor does any evidence reveal, that the affidavit contained any factually false information; or that the Magistrate Judge abandoned the neutral and detached role. And the affidavit, having a substantial basis, clearly was not lacking in indicia; nor is there any suggestion the affidavit on its face was deficient. The Court will admit all the evidence seized from the properties. CONCLUSION As set forth above, with respect to the real-time cell-site location data, the Court finds that the government did not adequately establish probable cause for the warrants to issue, but the evidence obtained from the cell-phone tracking is admissible under the good-faith exception. With respect to the installation and use of the GPS tracking device, whether or not a reasonable search, the inevitable-discovery, independent-source, or attenuation exceptions permit the admission of all the tracking data gathered, as well as the evidence obtained in the search of Whigham’s, Proge’s, and de Vallejo’s vehicles. The evidence obtained in the search of Valle’s vehicle is also admissible. Finally, the evidence obtained 57 2:12-cr-20052-SJM-MAR Doc # 202 Filed 05/03/13 Pg 58 of 58 Pg ID 1647 in the searches of the nine Detroit properties is admissible under the good-faith exception. For these reasons, and those stated in the Court’s prior order addressing the motion, Defendants’ motion to suppress is denied in full. ORDER WHEREFORE, it is hereby ORDERED that the Motion to Suppress (docket no. 74) is DENIED. SO ORDERED. Dated: May 3, 2013 s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on May 3, 2013, by electronic and/or ordinary mail. Carol Cohron Case Manager 58

=== ORDER ADOPTING REPORT & RECOMMENDATION (docket no. 16) AND GRANTING MOTION TO REMAND (docket no. 8) ===

2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 1 of 8 Pg ID 131 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ANGELO SMITH, et al., Plaintiffs, v. DETROIT ENTERTAINMENT, LLC, d/b/a MOTORCITY CASINO, Defendant. / Case No. 12-12967 HONORABLE STEPHEN J. MURPHY, III ORDER ADOPTING REPORT & RECOMMENDATION (docket no. 16) AND GRANTING MOTION TO REMAND (docket no. 8) This matter arises from an action for unpaid wages brought by Angelo Smith against his former employer, Detroit Entertainment, LLC, d/b/a MotorCity Casino ("MotorCity") pursuant to Michigan's Wages and Fringe Benefits Act, Mich. Comp. Laws §§ 408.471-490. Smith filed his claim with a state administrative agency, as provided under the state law. MotorCity removed the action to this Court while a hearing on its appeal in the state administrative agency was still pending. At issue in the present motion is whether the removal statute, 28 U.S.C. § 1441, permits MotorCity to remove a case to federal court from a state administrative agency. In a Report and Recommendation ("Report") issued on October 31, 2012, the magistrate judge found that it does not and recommended the Court remand the case. MotorCity objects. For the reasons set forth below, the Court will overrule MotorCity's objections, adopt the magistrate judge's Report, and remand the case. BACKGROUND Smith is a former MotorCity security guard. He claims that MotorCity violated Michigan's Wages and Fringe Benefits Act ("WFBA") by failing to pay him wages owed under the collective bargaining agreement ("CBA") between MotorCity and Smith’s union. 2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 2 of 8 Pg ID 132 The WFBA includes a procedure for filing complaints. See Mich. Comp. Laws § 408.481. An employee bringing a claim must first file a written complaint with the department of labor. Id. The department will then notify the employer, investigate the claim, and attempt to facilitate informal resolution of the dispute. Id. If the dispute cannot be resolved informally, the department will issue a determination on the merits of the complaint. Id. The employer or employee may request review of the determination within fourteen days; if neither party does so, the determination is final. Id. If a party seeks review, a hearing is conducted. Id. The hearing officer will either affirm, modify, or rescind the department's determination. Id. The determination of the hearing officer is the final order of the agency. Id. Either party may then seek judicial review of the hearing officer's determination. Id. Such review is conducted by the court without a jury and is confined to the administrative record. Mich. Comp. Laws § 24.304. Smith filed his complaint with the Michigan Wage and Hour Division ("WHD"), a state agency housed within Michigan's Department of Licensing and Regulatory Affairs. As provided in the statute, the WHD notified MotorCity and attempted to informally resolve the matter. It was unable to do so, and on June 6, 2012, it issued a determination order finding that MotorCity owes Smith $700.50 in unpaid wages. See Determination Order, ECF No. 1-3 at 2. MotorCity filed a request for review of the determination order with the Michigan Administrative Hearing System ("MAHS"). The matter was assigned to an administrative law judge, and a hearing was scheduled for July 23, 2012. On July 6, 2012, rather than complete the appeal process with the MAHS, MotorCity removed the action to this Court. On August 6, 2012, the WHD, prosecuting the claim on Smith's behalf, filed the instant motion to remand. ECF No. 8. The WHD argues that remand is warranted because (1) MotorCity filed its Notice of Removal more than thirty days after it received notice that 2 2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 3 of 8 Pg ID 133 Smith filed his wage claim with the WHD; (2) the wage claim does not present a federal question; (3) the MAHS is not a "state court" from which removal is ordinarily permitted; and (4) MotorCity failed to exhaust the administrative remedies available under Michigan law. See Mot. to Remand 2. The magistrate judge found that a federal question justifying this court's jurisdiction likely exists because state-law claims that require the interpretation of a collective bargaining agreement are preempted by Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. §185(a). See Report 6 ("The preemptive force of the [LMRA] likely gives this Court original jurisdiction over Smith's [claim]."). The magistrate judge also found that even if a federal question exists, however, § 1441 does not permit the removal of Smith's action because the MAHS is not a "state court." LEGAL STANDARD A copy of the Report was served upon the parties on October 31, 2012. Pursuant to Civil Rule 72(b)(2), each party had fourteen days from that date in which to file any specific written objections to the recommended disposition. A party's specific written objections are entitled to de novo review by this Court. Fed. R. Civ. P. 72(b)(3). On November 14, 2012, MotorCity timely filed an objection, which this Order reviews de novo. See Objection, ECF No. 17. DISCUSSION Section 28 U.S.C. §1441 provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . ." 28 U.S.C. § 1441(a). The magistrate judge determined that remand is warranted here because the MAHS is not a "state court" from which removal is permitted by the statute. MotorCity objects to that determination and argues that the MAHS may be 3 2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 4 of 8 Pg ID 134 treated as a state court for the purpose of removal. The issue is a matter of first impression in the Sixth Circuit. A split exists among other circuits. Specifically, MotorCity contends that this Court should follow the approach taken by the First and Seventh Circuits. See Volkswagen de Puerto Rico, Inc. v. Puerto Rico Labor Relations Bd., 454 F.2d 38 (1st Cir. 1972); Floeter v. C.W. Transport, Inc., 597 F.2d 1100 (7th Cir. 1979).1 In Floeter, for example, a group of employees filed an action to enforce a collective bargaining agreement with the Wisconsin Employment Relations Commission ("WERC"), a state agency. In determining whether removal was proper, the Seventh Circuit held that removal from a state agency — rather than a "State court," as provided in § 1441 — may be authorized under § 1441 if the state agency "functions" like a state court. Floeter's "functional test" has two inquiries: The court must "evaluate [1] the functions, powers, and procedures of the state tribunal and . . . [2] the respective state and federal interests in the subject matter and in the provision of a forum.” Floeter, 597 F.2d at 1101–02. A federal court should assume jurisdiction only if the agency functions as a court and federal interests predominate over state interests. Applying this test, the Floeter court held that the proceedings before the WERC in the case at issue were "essentially judicial" and that the state's interest in providing a convenient and expeditious forum to resolve 1 MotorCity contends that the Fourth Circuit adopted the First and Seventh Circuit's approach in Kolibas v. Committee on Legal Ethics of West Virginia Bar, 872 F.2d 571 (4th Cir. 1989). But that case addressed the removal of suits against federal officers under 28 U.S.C. § 1442, not removal under § 1441. Construction of the two statutes is not parallel. See Sun Buick, Inc. v. Saab Cars USA, Inc., 26 F.3d 1259, 1262 (3d Cir. 1994) ("The force of Kolibash on [this issue] is diminished, however, because removal in Kolibash was based on 28 U.S.C. § 1442(a), the federal officer removal statute, which is broadly construed, as distinguished from section 1441, the removal statute here, which is strictly construed."). 4 2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 5 of 8 Pg ID 135 labor disputes did "not outweigh the defendant's right to remove the action to federal court." Id. The court approved removal. In contrast, the Ninth and Tenth Circuits take a "literal approach" to the removal statute. See Porter Trust v. Rural Water Sewer & Solid Waste Mgmt., Dist. No. 1, 607 F.3d 1251 (10th Cir. 2010) (noting that "[m]ore recent authority has rejected or severely limited the “functional” test in favor of a standard application of the canons of statutory construction"); Oregon Bureau of Labor and Indus. ex rel. Richardson v. U.S. West Comm. Inc., 288 F.3d 414, 419 (9th Cir. 2002). In Richardson, the plaintiff filed an employment discrimination claim with the Oregon Bureau of Labor and Industries, and his employer removed the action to federal district court.2 The Ninth Circuit considered the approach taken in Floeter, but rejected it in favor of adherence to § 1441's plain language. See Richardson, 288 F.3d at 417 ("The plain language of 28 U.S.C. § 1441(a) limits removal to cases pending before a 'state court.'"). In rejecting Floeter, the Richardson court observed that the functional test "goes beyond the language of the statute, because [it] is a judicially developed analysis that neither appears on, nor is necessarily implied by, the statutory language." Id. at 419. Moreover, the court noted, "the functional test changes the meaning and reach of [§ 1441 by] effectively replac[ing] the statutory term 'state court' with the phrase 'any tribunal that acts as a court' . . . . Because agencies often conduct court- like adjudications, the result is to dramatically expand federal removal jurisdiction to encompass many administrative agency proceedings. Id. at 419. The Court finds, as did the magistrate judge, that a literal construction of the statute is the better approach. The issue is one of statutory interpretation. “The starting point in 2 As in Floeter, the employee's claim was preempted by Section 301 of the LMRA. 5 2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 6 of 8 Pg ID 136 interpreting a statute is its language.” Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 409 (1993). When a "statute's language is plain, 'the sole function of the courts is to enforce it according to its terms.' ” United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989). As the Ninth Circuit observed, the language of § 1441 is plain. See Richardson, 288 F.3d at 417 ("[T]he plain language of 28 U.S.C. § 1441(a) authorizes removal only if the case is brought in a 'court.'"). MotorCity does not contend that the MAHS is a "court." Rather, it contends that the Court should construe § 1441 to permit removal where its text does not. But that is not the function of this Court. Moreover, with respect to § 1441 specifically, the Supreme Court has directed that it is to be narrowly construed. See Healy v. Ratta, 292 U.S. 263, 270 (1934); Polkow v. CSX Transp., 431 F.3d 543, 555 (6th Cir. 2005). The functional test is inconsistent with that directive; it permits a broad construction of the statute, bringing within its scope the removal of actions not contemplated in the text. The Court notes that the flexibility of the functional test facilitates avoidance of one potential consequence of adherence to § 1441's text: if actions like Smith's cannot be removed from agency proceedings, a plaintiff bringing a state-law claim that is preempted by the LMRA can prevent removal of the LMRA claim, at least until after the completion of the administrative proceedings, simply by filing his claim in the state administrative system.3 That outcome runs contrary to a defendant's right of removal, usually applicable to claims 3 Presumably, if a party appeals the state agency determination regarding an LMRA claim to state court, the defendant can remove that appeal to federal court. It is unclear whether, in that event, the federal district court's review would be confined to the more narrow scope of review that may be applicable to the state-law claim. If not, and the district court could find facts de novo, then the state administrative proceedings would be essentially superfluous. If the district court could not decide the claim de novo, then its review of the § 301 claim would be hampered by procedures applicable to the preempted state-law claim. For instance, here, there is no clear reason why the scope of a federal court's review of Smith's claim should be set by the WFBA, if Smith's WFBA claim is preempted by § 301 of the LMRA. Again, the Court finds this ambiguity is best resolved by a clear directive from Congress. 6 2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 7 of 8 Pg ID 137 preempted by § 301 of the LMRA . See Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists & Aerospace Workers, 390 U.S. 557, 560 (1968) (noting that claims preempted by § 301 arise under federal law and are therefore removable). But the issue is best remedied by Congress, rather than by an expansive interpretation of the removal statute. Indeed, as the magistrate judge noted, § 1441 itself contemplates that solution. See Report at 12 (noting that 1441(a) begins: "Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed . . . ."); see also Erica B. Haggard, Removal to Federal Courts from State Administrative Agencies: Reevaluating the Functional Test, 66 Wash. & Lee L. Rev. 1831, 1878 (2009) (suggesting that Congress amend the LMRA to "provide an explicit removal clause for actions filed in state agencies that are adjudged to be preempted by Section 301(a)"). CONCLUSION For the foregoing reasons, the Court finds that remand is appropriate. The Court will adopt the Report and grant the motion to remand. Smith's action is consolidated with the virtually identical case, Andre Havard and State of Michigan, Department of Licensing and Regulatory Affairs, Wage and Hour Division v. Detroit Entertainment, L.L.C., d/b/a MotorCity Casino, No. 12-cv-13427. A motion to remand presenting the same legal issues raised here was filed in that case. See Case No. 12-cv-13427, ECF No. 10. The Court referred both motions to remand to the magistrate judge. The Report's recommendation applies to both. Accordingly this Order grants remand in Havard's case, as well as Smith's. 7 2:12-cv-12967-SJM-LJM Doc # 18 Filed 01/09/13 Pg 8 of 8 Pg ID 138 WHEREFORE it is hereby ORDERED that the Report and Recommendation (docket ORDER no. 16) is ADOPTED. IT IS FURTHER ORDERED that the Motion to Remand (docket no. 8) is GRANTED. IT IS FURTHER ORDERED that these consolidated actions, numbered 12-cv-12967 and 12-cv-13427 are REMANDED to the Michigan Administrative Hearing System. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: January 9, 2013 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on January 9, 2013, by electronic and/or ordinary mail. Carol Cohron Case Manager 8

=== ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS (docket no. 19) AND DENYING PLAINTIFF’S MOTION FOR LEAVE TO FILE A SUR-REPLY (docket no. 22) ===

2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 1 of 9 Pg ID 1220 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION SHIRLEY MORRISON, Plaintiff, Case No. 11-cv-11709 v. CITIZENS REPUBLIC BANCORP., INC., et al., Defendants. ______________________________/ HONORABLE STEPHEN J. MURPHY, III ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS (docket no. 19) AND DENYING PLAINTIFF’S MOTION FOR LEAVE TO FILE A SUR-REPLY (docket no. 22). Shirley Morrison filed her three-count amended complaint pursuant to §§ 409 and 502 of ERISA, 29 U.S.C. §§ 1109 and 1132. She seeks to represent a class of similarly situated plaintiffs against the sponsor and administrator of her 401K plan, Citizens Republic Bancorp, Inc. (“Citizens Republic”), and against other fiduciaries of the plan. Morrison alleges that Defendants breached their duties to her, the plan, and to other class members, in violation of ERISA §§ 404 and 405, by (1) failing to prudently and loyally manage the plan's assets; (2) failing to avoid or resolve conflicts of interest; and (3) failing to adequately monitor other fiduciaries. Defendants moved to dismiss the amended complaint pursuant to Civil Rule 12(b)(6), and the Court held a hearing on the motion. After careful consideration, and for the reasons that follow, the Court will deny in part and grant in part Defendants' motion. BACKGROUND Plaintiff was employed by Citizens Republic and held company shares as part of her 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 2 of 9 Pg ID 1221 retirement package for a portion of the proposed class period. She contends that Defendants should have known that investment in company stock was imprudent based on company performance dating back to the 2006 merger of Citizens Banking Corporation with Republic Bancorp, Inc., which formed Defendant Citizens Republic Bankcorp, Inc. After the merger, Plaintiff claims that “Citizens Republic’s financial condition steadily worsened and the value of its stock plummeted, due to non-performing assets acquired from Republic.” Am. Compl. ¶ 112, ECF No. 15. By the end of 2008, Citizens Republic’s loan loss provision reached $118.5 million, an increase of nearly 1,900% from the previous year, and its nonperforming assets increased by 75%. Id. at ¶ 140. Plaintiff asserts that from 2007 to 2009, Citizens Republic’s “provision for loan losses increased over 620% as its net losses grew to over a half billion dollars.” Id. at ¶ 159 (emphasis omitted). Losses continued into the second quarter of 2010. Id. at ¶ 164. According to Plaintiff, from the start of the class period until the complaint was filed, Citizens Republic stock lost over 94% of its value. Id. at ¶¶ 64-66, 174. Based on this poor performance, Plaintiff alleges that Defendants knew or should have known that company stock was an imprudent plan investment. Consequently, by failing to protect the plan and its participants from foreseeable loss, Defendants breached their fiduciary duties under ERISA. Defendants now move to dismiss Plaintiff's amended complaint pursuant to Rule 12(b)(6), arguing that the complaint fails to state a claim for relief under ERISA because (1) Plaintiff fails to allege that she would have been entitled to greater benefits but for Defendants' alleged breaches of fiduciary duties; (2) her allegations do not rebut the presumption of prudence articulated by the Sixth Circuit in Kuper v. Iovenko. 66 F.3d 2 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 3 of 9 Pg ID 1222 1447,1458 (6th Cir. 1995); (3) she fails to state a claim for misrepresentation or omission; (4) she fails to allege causation because the participant controlled investment decisions; (5) she fails to allege Defendants took any action detrimental to the plan because of alleged conflicts of interest; and (6) she fails to allege any specific facts to support a failure-to- monitor claim. STANDARD OF REVIEW Federal Rule of Civil Procedure 12(b)(6) allows “a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true.” Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). “To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.” Hunter v. Sec'y of the U.S. Army, 565 F.3d 986, 992 (6th Cir. 2009) (citation omitted). In assessing a motion brought pursuant to Rule 12(b)(6), a court must presume as true all well-pleaded factual allegations and draw all reasonable inferences from those allegations in favor of the non-moving party. Bishop v. Lucent Techs., Inc., 520 F.3d 516, 519 (6th Cir. 2008). Although a court must accept as true all factual allegations in the complaint, it need not accept as true any legal conclusion alleged therein, even if couched as a factual allegation. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007 . “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. The complaint’s factual allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. 3 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 4 of 9 Pg ID 1223 DISCUSSION There are three components to a fiduciary’s duties under ERISA. Kuper v. Iovenko, 66 F.3d 1447,1458 (6th Cir. 1995). The first component is the “duty of loyalty.” Id. This requires the fiduciary to make all decisions regarding an ERISA plan “with an eye single to the interests of the participants and beneficiaries.” Id. (internal quotation omitted). The second component is the “prudent man” obligation. Id. This imposes “an unwavering duty to act both as a prudent person would act in a similar situation and with single-minded devotion to those same plan participants and beneficiaries.” Id. (internal quotation omitted). Finally, the third component requires the ERISA fiduciary to “act for the exclusive purpose of providing benefits to plan beneficiaries.” Id. (internal quotation omitted). Plaintiff here has alleged that Defendants failed to fulfill each of these three requirements. I. Causation Defendants seek to have the Court dismiss Plaintiff’s amended complaint because she does not allege specific facts showing she was a plan participant who invested in Citizens Republic’s stock during the class period and was adversely affected by the breaches of fiduciary duty alleged. But Plaintiff does allege that she was a participant in the plan during the class period and that her retirement account in the plan during the class period included Citizens Republic Stock. Am. Compl. ¶ 2. She further alleges that if Defendants had properly discharged their fiduciary duties, the plan and its participants “would have avoided a substantial portion of the losses that they suffered through the Plan's continued investment in Company stock.” Id. at ¶ 225. Plaintiff sufficiently alleges that Defendants’ actions caused harm to the plan and, consequently, to her as a participant. 4 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 5 of 9 Pg ID 1224 Additionally, Defendants assert that Plaintiff cannot show causation because plan participants controlled their own investment decisions. Defendants rely on ERISA 404(c), the “safe harbor” provision which provides that a plan trustee is not liable for any loss which results from a participant’s exercise of control over investment decisions. See 29 U.S.C. §1104(c). But the Sixth Circuit recently addressed this issue in Pfeil v. State Street Bank & Trust Co., and held that “[s]ection 404(c) is an affirmative defense that is not appropriate for consideration on a motion to dismiss when . . . plaintiffs did not raise it in the complaint.” 671 F.3d 585, 598 (6th Cir. 2012). Even if this defense were appropriate to consider now, “section 404(c) does not provide a defense to the selection of the menu of investment options that the plan will offer.” Id. at 601. Accordingly, Defendants’ motion to dismiss on this ground will be denied. II. The Kuper Presumption of Prudence Next, Defendants argue for dismissal based on the Plaintiff’s failure to overcome the Kuper presumption. In Kuper, the Court held that a proper balance between the purpose of ERISA and the nature of an employee stock ownership plan (“ESOP”) requires a court to begin its review presuming that an ESOP fiduciary’s decision to remain invested in employer securities was reasonable. Kuper, 66 F.3d at 1459. A plaintiff can rebut this presumption of reasonableness by showing that “a prudent fiduciary acting under similar circumstances would have made a different investment decision.” Id. This issue was also addressed by the Sixth Circuit in the recent Pfeil decision. The Court held that the Kuper presumption, "is not an additional pleading requirement and thus does not apply at the motion to dismiss stage.” Pfeil, 671 F.3d at 592. Defendants’ motion to dismiss on this ground will, therefore, be denied. 5 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 6 of 9 Pg ID 1225 III. Misrepresentation and Omission Next, Defendants seek to dismiss Plaintiff’s claims for misrepresentation because she fails to allege that any specific misrepresentation occurred. Plaintiff does not allege misrepresentation as its own count in the amended complaint, but alleges misrepresentation and omission in the context of count one’s breach of fiduciary duty claim.1 Plaintiff alleges that Defendants breached their duties of loyalty and prudence “by failing to provide accurate information regarding the Company’s true financial condition and the Company’s concealment of same and, generally, by conveying inaccurate information regarding the Company’s future outlook.” Am. Compl. ¶ 203. To establish a claim for breach of fiduciary duty by misrepresentation, Plaintiff must show that (1) Defendant was acting as a fiduciary when the alleged misrepresentation was made, (2) the misrepresentation was material, and (3) Plaintiff relied on the misrepresentation to her detriment. See James v. Pirelli Armstrong Tire Corp., 305 F.3d 439, 449 (6th Cir. 2002). It is unclear from the amended complaint what information Plaintiff believes was misrepresented or withheld. Her allegations of misrepresentation are conclusory and do not satisfy the pleading requirements set forth in Twombly. See Twombly, 550 U.S. at 555. To the extent Plaintiff seeks to assert a breach of fiduciary duty claim based on misrepresentation, the claim will be dismissed. IV. Conflict of Interests 1 The length and structure of Plaintiff’s amended complaint make it complicated and partly incoherent. It contains 230 paragraphs. Count one begins at paragraph 196. Each of the three counts incorporates all the previous paragraphs of the complaint. And, because the allegations regarding misrepresentation could be construed as a separate claim, the Court will address it as such. 6 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 7 of 9 Pg ID 1226 Next, Defendants seek to dismiss Plaintiff’s claim for breach of fiduciary duty based on the Director Defendants’ failure to avoid conflicts of interest. Plaintiff alleges that the Director Defendants breached their duty to avoid conflicts of interest by “failing to timely engage independent fiduciaries who could make independent judgments concerning the plan’s investments in the Company’s own securities and by otherwise placing their own and/or the Company’s interests above the interests of the participants with respect to the plan’s investment in the Company’s securities.” Am. Compl. ¶ 210. The ERISA duty of loyalty requires fiduciaries to make all decisions regarding the plan “with an eye single to the interests of the participants and beneficiaries.” Kuper, 66 F.3d at 1458. A fiduciary breaches this duty by engaging in fiduciary activity while harboring a conflict of interest. Plaintiff claims that a portion of the directors’ and certain officers’ compensation was paid in the form of stock option awards and that these payments gave Defendants an incentive to keep the plan’s assets invested in Citizens Republic stock. Am. Compl. ¶¶ 184- 85. Defendants contend that this is not actually a conflict of interest, and cite In re Huntington Bancshares Inc., for the proposition that rather than creating a conflict, “compensation in the form of company stock aligns the interests of plan fiduciaries with those of plan participants.” 620 F.Supp.2d 842, 849, n.6. (S.D. Ohio, 2009). It is not clear at this point whether Defendants actually had a conflict of interest. But at least some courts have held that the allegation that a defendant had significant investment in company stock and that the defendant’s pay was tied to the stock’s performance is enough to state a conflict-of-interest claim. See In re Morgan Stanley, 696 F.Supp.2d 345, 365-66 (S.D.N.Y., 2009); see also Hill v. BellSouth Corp., 313 F.Supp.2d 1361, 1369-70 (N.D. Ga. 2004). Plaintiff has therefore sufficiently alleged that a conflict existed. The question of whether 7 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 8 of 9 Pg ID 1227 or not Defendants were actually conflicted is an issue that will be addressed by discovery, and presumably resolved on summary judgment motions or at trial. V. Failure to Monitor Finally, Defendants seek to dismiss Plaintiff’s claim for breach of fiduciary duty based on a failure to monitor co-fiduciaries because Plaintiff fails to allege any specific facts to support her claim. Plaintiff alleges that the Defendants “knew or should have known that the fiduciaries they were responsible for monitoring were . . . continuing to invest the assets of the [p]lan in Citizens Republic common stock when it was no longer prudent to do so,” and that “[d]espite this knowledge” they did not take any action to protect the plan and its participants. Am. Compl. ¶ 219. Plan administrators have a duty to monitor the performance of other fiduciaries under ERISA § 404 and this includes providing necessary information and removing fiduciaries who are not doing their job. See In re Morgan Stanley, 696 F. Supp.2d at 366. Plaintiff's allegation on this point is enough to survive the present motion to dismiss. See In re CMS Energy ERISA Litigation, 312 F. Supp.2d 898, 916 (E.D. Mich. 2004) (finding that Plaintiffs stated a claim for breach of the duty to monitor by alleging “Defendants knew or should have known” that other fiduciaries were allowing the plan to continue offering company stock as an investment option when it was no longer prudent to do so, but “failed to take action to protect the participants from the consequences of the other fiduciaries’ failures.”). CONCLUSION Plaintiff has failed to state a claim for breach of fiduciary duty based on misrepresentation and the claim will be dismissed. As to Plaintiff’s remaining claims, 8 2:11-cv-11709-SJM-MJH Doc # 29 Filed 08/20/12 Pg 9 of 9 Pg ID 1228 Defendants’ motion will be denied. WHEREFORE it is hereby ORDERED that Defendants’ motion to dismiss (docket no. 19) is DENIED in part and GRANTED in part consistent with the terms of this Order. It is FURTHER ORDERED that Plaintiff’s motion for leave to file a sur-reply in opposition to Defendants’ motion to dismiss (docket no. 22) is DENIED as moot. SO ORDERED. Dated: August 20, 2012 s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on August 20, 2012, by electronic and/or ordinary mail. Carol Cohron Case Manager 9

=== ORDER AFFIRMING IN PART AND REVERSING IN PART THE BANKRUPTCY COURT'S ORDER ===

2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 1 of 28 Pg ID 9308 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re JOHN RICHARDS HOMES BUILDING COMPANY, LLC, Debtor. Bankruptcy Case No. 02-54689 Civil Case No. 12-cv-10506 / HONORABLE STEPHEN J. MURPHY, III KEVIN ADELL, Appellant, v. JOHN RICHARDS HOMES BUILDING COMPANY, LLC; and HONIGMAN MILLER SCHWARTZ AND COHN, Appellees. / ORDER AFFIRMING IN PART AND REVERSING IN PART THE BANKRUPTCY COURT'S ORDER This appeal from the United States Bankruptcy Court for the Eastern District of Michigan (“Michigan Bankruptcy Court”) comes at the closing stages of a complex legal battle that began when Kevin Adell filed an involuntary Chapter 11 bankruptcy petition against John Richard Homes Building Co., LLC ("JRH") in 2002. At issue is whether the Michigan Bankruptcy Court abused its discretion in entering a $4.65 million judgment against Adell for (1) the attorney fees and costs JRH has incurred in attempting to enforce a $6.1 million judgment entered against Adell by the Michigan Bankruptcy Court in 2003; and (2) punitive damages for Adell’s conduct after the entry of judgment. The Court heard oral argument on the appeal on June 6, 2012. For the reasons that follow, the Court will AFFIRM the award of attorney fees and costs, and REVERSE the award of additional punitive damages. 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 2 of 28 Pg ID 9309 I. Procedural Overview1 BACKGROUND Adell filed an involuntary petition for Chapter 11 reorganization against JRH in 2002. See generally 11 U.S.C. § 303. The Michigan Bankruptcy Court dismissed the petition in 2003, and, in light of the damage caused to JRH’s business and reputation as a result of the petition, it entered a judgment of $6.1 million in compensatory damages, punitive damages, and attorney fees against Adell and two related firms with whom he had conspired, Adell Broadcasting Co. ("ABC") and STN.com. See id. § 303(I). This Court and the Sixth Circuit affirmed the award, and the Supreme Court denied certiorari. See In re John Richards Homes Building Company, L.L.C., 291 B.R. 727 (E.D. Mich. Bankr. 2003) [hereinafter JRH I], aff’d, 312 B.R. 849 (E.D. Mich. 2004), aff’d, 439 F.3d 248 (6th Cir. 2006), cert. denied, 549 U.S. 818 (2006). Not long after the Michigan Bankruptcy Court entered its ruling, Adell filed for Chapter 11 reorganization in the United States Bankruptcy Court for the Middle District of Florida (“Florida Bankruptcy Court”). Adell liquidated many of his assets to purchase a mansion in Florida. The Florida and Michigan Bankruptcy Courts disagreed as to the validity of Adell’s claim to Florida's unlimited “homestead” exemption from judgment creditors on the mansion. Compare In re John Richards Homes Building Co., LLC, 298 B.R. 591 (E.D. Mich. Bankr. 2003) [hereinafter JRH II] with In re Adell, 321 B.R. 562 (M.D. Fla. Bankr. 2005) [hereinafter Adell I]. The Florida Bankruptcy Court eventually dismissed Adell's petition because Adell was not entitled to a discharge of indebtedness. In re Adell, 332 B.R. 844 (M.D. Fla. Bankr. 1 For a more complete listing of the various substantive orders and opinions entered in this case, see In re John Richards Homes Building Co., L.L.C., 461 B.R. 1, 5–7 (E.D. Mich. Bankr. 2011) [hereinafter JRH V]. 2 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 3 of 28 Pg ID 9310 2005) [hereinafter Adell II]. JRH sought sanctions against Adell in Florida Bankruptcy Court, but the bankruptcy judge there refused to award them, a ruling the district court and the Eleventh Circuit upheld on appeal. In re Adell, No. 07-cv-361, 2008 WL 746833 (M.D. Fla. Mar. 18, 2008) [hereinafter Adell III] (finding bankruptcy court’s decision denying sanctions was not abuse of discretion), aff’d, 296 F. App’x 837 (11th Cir. 2008). After the Sixth Circuit affirmed the original, $6.1 million judgment against Adell, he paid that judgment in full on behalf of himself, ABC, and STN.com. Afterwards, JMH, along with lead counsel Honigman Miller Schwartz & Cohn ("HMSC"), returned to the Michigan Bankruptcy Court and moved for additional attorney fees and costs for incurred during post- judgment litigation. These activities included efforts to execute on Adell’s real and personal property in various forums, garnishment litigation in the Michigan Bankruptcy Court, and the Florida bankruptcy litigation. The bankruptcy court denied the request, but this Court reversed and remanded. In re John Richards Homes Bldg. Co., L.L.C., No. 02-54689, 2006 WL 3228523 (E.D. Mich. Bankr. Sept. 21, 2006) [hereinafter JRH III], rev’d and remanded, 405 B.R. 192 (E.D. Mich. 2009). Likewise, the bankruptcy court denied a motion for additional punitive damages filed by JRH based on Adell’s post-judgment conduct, which this Court also reversed and remanded. In re John Richards Homes Bldg. Co., L.L.C., No. 02-54689, 2006 WL 3230009 (E.D. Mich. Bankr. Sept. 21, 2006) [hereinafter JRH IV], rev’d and remanded, 404 B.R. 220 (E.D. Mich. 2009). On remand, this Court instructed the Michigan Bankruptcy Court to reach the merits of JMH’s requests for costs, attorney fees, and an additional award of punitive damages. After an evidentiary hearing, the Michigan Bankruptcy Court entered an award of $1.85 million in attorney fees, and $2.8 million in punitive damages. JRH V, 461 B.R. 1 at 4. Adell now appeals this additional $4.65 million in damages. 3 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 4 of 28 Pg ID 9311 II. Adell's Asset Sale and Florida Relocation Analysis of the issues presented in this motion requires a narrower focus on the history of the post-judgment proceedings. The Michigan Bankruptcy Court entered its initial, $6.1 million judgment against Adell on April 25, 2003. JRH I, 291 B.R. at 729. Adell’s response was swift. He liquidated many of his Michigan assets, fled to Florida on May 5, 2003, and purchased a $2.8 million home there in Naples on May 8. JRH II, 298 B.R. at 593; Adell I, 321 B.R. at 564–65. JRH scrambled to respond. It filed a motion for post- judgment relief on May 21, 2003, requesting that the Court order Adell to sell the home he purchased and turn over the proceeds in satisfaction of the judgment. Adell defended JRH’s request on the grounds that the Florida Constitution’s “homestead” exemption prohibited such a sale.2 See Fla. Const. art. X, § 4(a)(1) (exempting “a homestead” from any “forced sale under process of any court” and from any “lien” resulting from a “judgment, decree or execution”). The bankruptcy judge ruled against Adell. The judge found that 11 U.S.C. § 303(I) preempted the “homestead” exemption. See JRH II, 298 B.R. at 602–07. He also concluded, as a matter of Florida law, that Adell’s “homestead” claim was invalid because he had not established Florida residency. Id. at 607–09. The bankruptcy judge ordered Adell to sell his home within sixty days of the September 17, 2003 entry date of JRH II, and remit the proceeds in partial satisfaction of the judgment. The Michigan Bankruptcy Court also appointed a receiver on October 3, 2003, after Adell showed recalcitrance in cooperating with JRH II’s directives. This Court granted a stay of proceedings to execute 2 Adell also attempted to assert this defense by filing a lawsuit against JRH in state circuit court in Collier County, Florida, on May 19, 2003, seeking a declaration that the house he purchased qualified for the homestead exemption. JRH removed the case to federal district court, which transferred the case to the Michigan Bankruptcy Court on June 9, 2003. 4 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 5 of 28 Pg ID 9312 on the judgment on November 10, 2003, contingent on Adell posting a supersedeas bond of $2.8 million. III. Adell’s Bankruptcy Filing in Florida On November 14, 2003 — the day before the deadline for compliance with the order of September 17 was set to expire — Adell filed for Chapter 11 reorganization in Florida Bankruptcy Court. See Notice of Bankruptcy, In re John Richards Homes Bldg. Co., L.L.C., No. 02-54689, ECF No. 543 (E.D. Mich. Bankr. Nov. 18, 2003). With that filing, Adell became entitled to the protections of the automatic stay, which stops judicial proceedings against the individual and halts all efforts by creditors to execute on judgments. See 11 U.S.C. § 362. JRH moved to dismiss the Chapter 11 petition, but the Florida Bankruptcy Court denied the motion.3 Adell II, 332 B.R. at 846. While the appeal of the initial motion to dismiss to the District Court for the Middle District of Florida was pending, the Florida Bankruptcy Court’s January 31, 2005 ruling in Adell I expressed disagreement with the Michigan Bankruptcy Court’s conclusion in JRH II in 2003 on the applicability of the “homestead” exemption. By the time the ruling issued, Adell had resided in Florida for 180 days prior to filing the chapter 11 petition, registered to vote in Florida, registered an automobile in Florida, obtained Florida licenses for fishing and driving, opened several Florida bank accounts, started a new business venture in Florida, and formed a Florida not-for-profit company. The Florida Bankruptcy Court concluded that these actions were sufficient to establish “bona fide residence” in Florida, 3 The Florida Bankruptcy Court sanctioned JRH for commencing collection activities immediately after the district court reversed the Florida Bankruptcy Court, because the district court’s order did not technically lift the automatic stay. In re Adell, 328 B.R. 845, 847–48 (M.D. Fla. Bankr. 2005) [hereinafter Adell IV]; see also Fed. R. Bankr. P. 8017(a) (“Judgments of the district court or the bankruptcy appellate panel are stayed until the expiration of 14 days after entry . . . .”). 5 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 6 of 28 Pg ID 9313 and rejected JRH’s overtures regarding the applicability of the “homestead” exemption. Adell I, 321 B.R. at 571. This ruling became moot when the district court reversed the Florida Bankruptcy Court's denial of the motion to dismiss Adell's Chapter 11 petition on May 11, 2005. Adell attempted to convert his case into a Chapter 7 liquidation, but the Bankruptcy Court granted JRH’s motion to dismiss the petition entirely on October 4, 2005. Id. at 846–49. The bankruptcy judge found that there was “no doubt that [Adell] converted nonexempt assets into exempt assets . . . that the transfer took place within one year before the date of the filing of the petition; and, based on the circumstances and events surrounding the sudden move to Florida, the transfer was made to hinder, delay, or defraud a creditor, JRH.” Id. at 849. This statement was not just rhetoric. It was a reference to 11 U.S.C. § 727(a)(2)(A), which prevents the bankruptcy court from granting a discharge to one who has “transferred, removed . . . or concealed . . . property of the debtor, within one year before the date of the filing of the petition.” JRH sought sanctions in the Florida Bankruptcy Court against Adell. The bankruptcy judge denied the request, finding that “Adell attempted to pursue a legitimate goal within the utmost of his ability and, therefore, to impose a sanction would be a double punishment” on top of the Michigan judgment against him. Adell III, 296 F. App’x at 839 (internal quotation marks omitted). The district court and the Eleventh Circuit Court of Appeals affirmed that conclusion on appeal as within the bankruptcy judge's discretion. IV. Adell’s Financial Condition and Negotiations During Appeal Meanwhile, back in Michigan, Adell lost his appeals in both this Court and in the Sixth Circuit Court of Appeals, and the Supreme Court refused to hear his case. No court sanctioned Adell for bringing appeals, even though both had limited authority to do so. See 6 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 7 of 28 Pg ID 9314 Fed. R. Bankr. P. 8020 (permitting district court to impose “just damages and single or double costs to the appellee” if it finds an appeal is “frivolous”); Fed. R. App. P. 38. After the appeals concluded, Adell wrote a check for $6,662,005.58, which covered the original judgment plus post-judgment interest. Adell's financial status during this period is debated extensively by the parties. In 2003, Adell claimed that he “could not afford” to either pay the judgment or purchase a bond. Adell Creditors’ Exam. at 6:21–22, ECF No. 16-9. The need to reorganize his limited assets in the most advantageous manner possible, along with a purported sense of shame at being found at fault for bringing an unwarranted involuntary bankruptcy, were his stated motivations for moving to Florida. Id. at 6:24–25 (noting his decision to move was based on his fear that he would “lose [his] assets” if the judgment was upheld on appeal). Adell reasserted the position that he was unable to pay the judgment in 2003 in the evidentiary hearing below.4 Evid. Hr’g Tr. 96:12–14.5 On November 9, 2004, thanks to a “gift” from his father, Adell offered what he claimed was a “no-strings-attached” supersedeas bond that would guarantee JRH payment in the event their judgment was upheld on appeal. See Mot. for Stay Pending Appeal, In re John Richards Homes Bldg. Co., L.L.C., No. 03-cv-40109, ECF No. 26 (E.D. Mich. Nov. 9, 2004). But by this juncture, JMH had already spent nearly a year pursuing litigation in the Florida Bankruptcy Court, and was close to achieving dismissal of Adell’s petition. Moreover, as 4 In anticipation of this Court's review of the substantive underpinnings of the punitive damages award, the parties provided substantial briefing on Adell's financial status from the time of the judgment onward. Because this debate is largely irrelevant to the grounds on which the Court has chosen to decide the appeal, the Court will not rehash that debate here. 5 These citations refer to the transcript of the evidentiary hearing the bankruptcy court conducted. See ECF Nos. 12-2, 12-3, 12-4. 7 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 8 of 28 Pg ID 9315 the bankruptcy court found in the decision now being appealed, there were indeed “strings” attached to the request. The form of the supersedeas bond Adell proposed required JMH to foreswear “all garnishment proceedings (including actions against [Adell’s employers] STN.com and Adell Broadcasting) and any other action against Adell and his property, including the appointment of a receiver or the sale of Adell’s assets.” Mot. for Stay Pending Appeal, Ex. A, at 2. This Court and the Sixth Circuit denied the requests for a stay on execution of the judgment. See In re John Richards Homes Building Co., L.L.C., No. 03-cv- 40109, ECF No. 37 (E.D. Mich. Jan. 31, 2005), aff'd, No. 04-2154 (6th Cir. Nov. 1, 2005). Likewise, in the proceedings below, the Michigan Bankruptcy Court rejected the argument that JRH’s pursuit of litigation after the bond offer was unnecessary. JRH V, 461 B.R. at 13. STANDARD OF REVIEW This Court “review[s] the bankruptcy court’s findings of fact for clear error.” JRH I, 439 F.3d at 254 (emphasis removed). Under clear error review, the Court “will not disturb the bankruptcy court’s findings of fact unless there is the ‘most cogent evidence of mistake of justice.’” Wesbanco Bank Barnesville v. Rafoth (In re Baker & Getty Fin. Serv., Inc.), 106 F.3d 1255, 1259 (6th Cir. 1997) (quoting Newton v. Johnson (In re Edward M. Johnson & Assoc., Inc.), 845 F.2d 1395, 1401 (6th Cir. 1988 . The Court owes similar deference to the Michigan Bankruptcy Court's legal findings on punitive damages and attorney fees. See JRH I, 439 F.3d at 265 (recognizing appellate court “appl[ies] de novo review to [any] constitutional challenge" to a punitive damages award, "but otherwise review[s] only for abuse of discretion”); Boddy v. U.S. Bankr. Ct. (In re Boddy), 950 F.2d 334, 336 (6th Cir. 1991) (reviewing court “will not reverse a bankruptcy court’s award of fees unless there has been an abuse of discretion"). When reviewing for abuse of discretion, “[t]he question is not how the reviewing court would have ruled, but rather whether a reasonable person could 8 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 9 of 28 Pg ID 9316 agree with the bankruptcy court’s decision; if reasonable people could differ as to the issue, then there is no abuse of discretion.” Barlow v. M.J. Waterman & Assocs., Inc. (In re M.J. Waterman & Assoc., Inc.), 227 F.3d 604, 608 (6th Cir. 2000). Nonetheless, “[a] court abuses its discretion when it commits a clear error of judgment, such as applying the incorrect legal standard, misapplying the correct legal standard, or relying upon clearly erroneous findings of fact.” Wietschner v. Ortino (In re Ferro Corp. Derivative Litig.), 511 F.3d 611, 623 (6th Cir. 2008). DISCUSSION I. Did the Michigan Bankruptcy Court Have Authority to Impose Additional Punitive Damages? The Michigan Bankruptcy Court imposed additional punitive damages of $2.8 million against Adell. It claimed two alternative sources of power to issue this award: its "inherent authority," as described in cases like Chambers v. NASCO, Inc., 501 U.S. 32 (1991); and § 105(a) of the Bankruptcy Code. Adell argues that the additional punitive damages the Michigan Bankruptcy Court imposed, on top of its award of attorney fees, were improper. Because the Court agrees with Adell that the punitive damages were a criminal sanction, and that criminal sanctions go beyond the powers of the bankruptcy court under both § 105(a) and its “inherent authority,” the Court will reverse the judgment below with respect to the punitive damages judgment. A. Criminal and Civil Sanctions, Generally In its previous opinion, the Court found that Chambers v. NASCO, Inc., 501 U.S. 32 (1991), justified the imposition of civil sanctions “when a party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons.’” Chambers, 501 U.S. at 45–46 (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 258–59 (1975 . But this portion of the Chambers opinion dealt specifically with the inherent authority of trial courts 9 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 10 of 28 Pg ID 9317 to impose the sanction of attorney fees. See id. at 40–41 (describing the district court’s imposition of nearly $1 million in attorney fees under its inherent authority). The principal cases Chambers relied upon in formulating this standard were similarly limited. Hutto v. Finney, 437 U.S. 678, 689 n.14 (1978) (“An equity court has the unquestioned power to award attorney’s fees against a party who shows bad faith by delaying or disrupting the litigation or by hampering enforcement of a court order.” (emphasis added ; Alyeska Pipeline, 421 U.S. at 258–59 (noting that the “bad faith, vexatiously, wantonly, or for oppressive reasons” standard was an exception to the American Rule that militates against attorney fees). Chambers did not endorse the idea that substantial punitive damages are appropriate for a trial court to issue as a civil sanction. See Miller v. Cardinale (In re Deville), 280 B.R. 483, 497–98 (9th Cir. B.A.P. 2002) (recognizing that the award in question in Chambers was "purely compensatory," and that it is "apparent from Chambers that 'inherent authority will not suffice to support" penalties in excess of "reasonable compensation"). While the Supreme Court has noted that the rationale for fee shifting under the inherent authority of the courts is "punitive," See Hall v. Cole, 412 U.S. 1, 5 (1973), it has never, to this Court's knowledge, authorized "punishments" that go beyond restoration of the status quo. JRH argues that Chambers authorizes the imposition of a “full panoply of sanctions to remedy wrongful conduct . . . including an award of punitive damages.” JRH’s Br. at 21. But neither case it cites in its brief for this proposition actually acknowledged the power of the courts to impose punitive damages as civil sanctions, much less award them. See Univ. Cooperatives., Inc. v. Tribal Co-op. Marketing Dev. Fed. of India, Ltd., 45 F.3d 1194, 1196 (8th Cir. 1995) (reversing imposition of attorney fees as a sanction because it disagreed with the underlying finding of contempt); In re Generes, 69 F.3d 821, 824 (11th Cir. 1995) 10 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 11 of 28 Pg ID 9318 (agreeing that district court acted within its discretion by imposing costs and attorney fees on a litigant for his bad faith conduct in litigation). This absence of authority is explained by the distinction between civil and criminal sanctions for contempt. Civil sanctions are imposed “to coerce future compliance with a court’s order, or to compensate for the injuries resulting from the noncompliance.” In re Jacques, 761 F.2d 302, 305–06 (6th Cir. 1985) (internal citation omitted). By contrast, criminal sanctions exist as a means of punishing conduct and "vindicat[ing] the public interest." Penfield Co. of Cal. v. SEC, 330 U.S. 585, 590 (1947); see also In re Hake, No. 06-8014, 2006 WL 2846277, at *2 (6th Cir. B.A.P. Oct. 3, 2006) (criminal sanctions exist “to vindicate the authority of the court”). When courts impose a fine, it will generally be considered a criminal sanction “if the contemnor has no subsequent opportunity to reduce or avoid the fine through compliance.” Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 829 (1994). Indeed, a mandatory fine of "as little as $50 announced after a finding of contempt is criminal if the contemnor has no subsequent opportunity to reduce or avoid the fine through compliance." Id. Chambers does not address the power of the courts to impose punitive damages because that case only addressed the civil contempt powers of the courts, and by their very nature, punitive damages are not among those powers. B. Did the Michigan Bankruptcy Court Impose Criminal Sanctions? The Michigan Bankruptcy Court’s punitive damages award constituted criminal, rather than civil, contempt sanctions. The bankruptcy judge had already awarded JRH a sizable judgment, punitive damages authorized by § 303(i) of the Bankruptcy Code, costs, and attorney fees. Adell paid that judgment in full. No present sanction could coerce Adell's compliance with the Court's ultimate judgment or orders because he has already complied. 11 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 12 of 28 Pg ID 9319 See Bagwell, 512 U.S. at 829 ("When a contempt involved the prior conduct of an isolated, prohibited act, the resulting sanction has no coercive effect."). This initial impression is confirmed by the Michigan Bankruptcy Court's order. The bankruptcy judge began by observing that its earlier imposition of punitive damages under § 303(i) failed to deter Adell from abusive conduct. JRH V, 461 B.R. at 19. In considering the appropriate amount of punitive damages, the bankruptcy court reviewed the “reprehensibility” of Adell’s conduct, the proportionality of the fine to the actual harm done, and comparable penalties. Id. at 20–22. The bankruptcy judge did not provide a mechanism for reducing or avoiding the fine by future compliance, as required by Bagwell to bring a fine under the civil contempt heading. Finally, the Michigan Bankruptcy Court concluded its analysis by stating that the $2.8 million sanction it imposed “is necessary to accomplish the dual purposes of deterrence and punishment.” Id. at 22 (emphasis added). The boundary between civil contempts that are "remedial, and for the benefit of the complainant," and criminal contempts that "vindicate the authority of the court," is not precise. Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 441 (1911); see also Bessette v. W.B. Conkey Co., 194 U.S. 324, 329 (1904) ("It may not be always easy to classify a particular act as belonging to either one of these two classes.") But this particular case is clear. The punitive damages award entered against Adell was intended to retrospectively punish him for his behavior after he had already complied with the judgment. Therefore, the Court finds that the Michigan Bankruptcy Court's award of additional punitive damages was in the nature of a criminal sanction. C. Did the Bankruptcy Court Have the Power to Issue Criminal Sanctions? 12 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 13 of 28 Pg ID 9320 Having established that the additional punitive damages award imposed below was “criminal,” the Court must next determine whether the bankruptcy court had the authority to impose it. JRH proposes two possible sources for that authority on appeal. First, as touched upon earlier, all trial courts, including the bankruptcy court, have "inherent powers" that may be exercised to "achieve the orderly and expeditious disposition of their cases." Chambers, 501 U.S. at 43; see also In re Downs, 103 F.3d 472, 477 (6th Cir. 1996) (recognizing that bankruptcy courts share the same authority to impose civil sanctions as the district court). Second, Congress provided independent, statutory powers to the bankruptcy courts for the purpose of enforcing the Bankruptcy Code: The Court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. 11 U.S.C. § 105(a). The Court concludes that neither source of authority empowered the Michigan Bankruptcy Court to enter the new, $2.85 million punitive damages award. The two circuit courts of appeals that have directly addressed this issue concluded that bankruptcy courts lack authority to impose criminal sanctions such as punitive damages, under both sources of authority proposed by JRH. See Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1193, 1197 (9th Cir. 2003); Griffith v. Oles (In re Hipp, Inc.), 895 F.2d 1503, 1521 (5th Cir. 1990). Dyer, which reversed a bankruptcy court's imposition of an additional $50,000 in punitive damages after it had already awarded attorney fees and costs, summarizes the rationale for this conclusion succinctly. It began by rejecting the idea that § 105(a) justified such awards. Section 105(a) only authorizes remedies that are "necessary or "proper" to “carry[ing] out its provisions,” that “enforce” or “implement” the bankruptcy court's orders and rules, or that “prevent an abuse of process.” Criminal 13 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 14 of 28 Pg ID 9321 sanctions are not needed to achieve these ends. Dyer, 322 F.3d at 1193 (“The sanctions associated with civil contempt . . . adequately meet” the goals of § 105(a), “rendering serious punitive sanctions unnecessary”); In re Just Brakes Corp. Sys., Inc., 108 F.3d 881, 885 (8th Cir. 1997) (concluding § 105(a) does not confer “the power to punish”). The Sixth Circuit, in an unpublished opinion, expressed similar views.6 In re Kelvin Pub., Inc., 72 F.3d 129, 1995 WL 734481, at *4 (6th Cir. Dec. 11, 1995) (table decision) (rejecting reading of § 105 that would confer[ ] . . . broad remedial powers" on courts to supplement causes of action in the bankruptcy statute, while conceding that it did "give[ ] bankruptcy courts contempt power"). Some courts have suggested that § 105(a) authorizes "any" order that is "necessary or appropriate," and that this might include an order of punitive damages. See Jove Eng'g v. IRS (In re Jove Eng'g), 92 F.3d 1539, 1554 (11th Cir. 1996). And it is true that an order need not be strictly "necessary" under § 105(a); the phrase "necessary or appropriate" is disjunctive, rather than conjunctive. Contra Dyer, 322 F.3d at 1193 ("[T]he language of § 105(a) authorizes only those remedies 'necessary' to enforce the bankruptcy code."). Rather, it is the verbs of § 105(a) — "carry[ing] out," "enforce," "implement," "prevent" — that persuade the Court that Dyer and Hipp reach the proper interpretation. All of these words describe a power that facilitates compliance with the Bankruptcy Code and the bankruptcy court's orders, and compliance is one of the central goals of civil contempt sanctions. By contrast, criminal contempt sanctions are neither "necessary" nor "appropriate" tools for such a task. They are imposed for the purpose of punishing those 6 The Court is inclined to give Kelvin somewhat more weight because the Sixth Circuit largely adopted its reasoning in a subsequent, published opinion. Pertuso v. Ford Motor Credit Co., 233 F.3d 417, 423 (6th Cir. 2000) (adopting Kelvin's holding that § 105(a) does not create private causes of action where the bankruptcy code itself does not create liability). 14 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 15 of 28 Pg ID 9322 for whom the opportunity to comply has already passed. Hipp, 895 F.2d at 1515 ("Criminal contempt is not 'necessary or appropriate to enforce or implement' the court's rules or orders, but is instead intended to vindicate the authority of the court."). JRH advanced an additional interpretation of § 105(a) during the motion hearing that must be addressed here. In the section of the Bankruptcy Code that immediately follows § 105, which addresses sovereign immunity, Congress waived the immunity of government units as to "an order or judgment awarding a money recovery" from the bankruptcy courts, "but not including an award of punitive damages." 11 U.S.C. § 106(a)(3). According to JRH's argument, because § 106(a)(3) mentions punitive damages, the absence of any provision barring punitive damages in § 105 should be taken as an implicit grant of authority for the bankruptcy court to impose them. If § 105 were the only provision of the Bankruptcy Code affected by § 106(a)(3), then JRH's argument might have merit. But Section 106 waives governmental immunity for fifty-nine provisions of the Bankruptcy Code — including some provisions that explicitly authorize the imposition of punitive damages, such as the sections on involuntary petitions (§ 303) and the automatic stay (§ 362). 11 U.S.C. § 106(a)(1). Contrary to JRH's assertions, there is a need for such an exclusion from § 106(a)(3)'s waiver outside of § 105. It would be highly unusual if a statutory provision designed to circumscribe punitive damages in one context implicitly authorized them in another. Therefore, the Court will not adopt this particular reading of § 105(a). The Dyer court next considered whether the inherent power of the bankruptcy court to impose sanctions justified punitive damages. This authority differs from § 105(a) authority "in at least two ways": it requires explicit findings of bad faith or willful misconduct, and it only permits the court to issue sanctions for violations of a specific order. See Price v. Lehtinen (In re Lehtinen), 564 F.3d 1052, 1058 (9th Cir. 2009). But while inherent 15 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 16 of 28 Pg ID 9323 authority may reach different types of conduct worthy of contempt sanctions, it does not alter the type of sanctions the Court is permitted to impose. Dyer concluded that “[t]he bankruptcy court’s inherent sanction authority . . . does not authorize significant punitive damages” either, for “the same reasons” such awards are inappropriate under § 105(a). Dyer, 322 F.3d at 1197. Additionally, it observed that bankruptcy courts cannot provide the due process protections necessary to cabin the imposition of punitive sanctions in the absence of express congressional authorization. Id. at 1194–95, 97. The Sixth Circuit seems inclined toward accepting the views articulated above. It has favorably cited the Fifth Circuit’s view on bankruptcy courts holding criminal contempt powers. In re Baker & Getty Fin. Servs., Inc., 954 F.2d 1169, 1174 (6th Cir. 1992) (citing the Hipp case). The lone case from the Sixth Circuit Bankruptcy Appellate Panel that directly addressed this issue also endorsed the view of the Ninth and Fifth Circuits and suggested it was the most likely position the Sixth Circuit would take. In re Hake, 2006 WL 2846277, at *4. During the motion hearing, JRH asserted that the Sixth Circuit's decision in In re Tenn-Fla Partners, 226 F.3d 746 (6th Cir. 2000), binds the Court's judgment in this case. The Tenn-Fla panel noted that an award of punitive damages "lies within the discretion of the trial court," but upheld the bankruptcy court's decision to deny those damages. Tenn-Fla, 226 F.3d at 746. Neither the bankruptcy court nor the Sixth Circuit considered the issues raised in this case. It denied punitive damages because it was "not concerned that this debtor will repeat its fiduciary abuses." In re Tenn-Fla Partners, 170 B.R. 946, 973 (W.D. Tenn. Bankr. 1994). The Court concludes that JRH's reading of Tenn- Fla is not persuasive. Other circuits have hinted at, but not reached, conclusions contrary to the one reached by the Fifth and Ninth Circuits. Two circuits, the First and the Tenth, mention the possibility 16 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 17 of 28 Pg ID 9324 that bankruptcy courts possess criminal contempt powers, but do not analyze the question with the thoroughness exhibited in the Dyer and Hipp decisions. See Hake, 2006 WL 2846277, at *4 (citing Eck v. Dodge Chem. Co. (In re Power Recovery Sys., Inc.), 950 F.2d 798, 802 n.17 (1st Cir. 1991) and Graham v. United States (In re Graham), 981 F.2d 1135, 1142 (10th Cir. 1992 . These statements are best characterized as dicta, and they are unpersuasive when viewed next to the positions of the Fifth and Ninth Circuits. The Eleventh Circuit's Jove opinion suffers similar flaws. Moreover, Jove has been used by a number of district courts within that circuit to authorize the imposition of punitive damages. See In re Wasson, No. 06-bk-02669, 2007 WL 4322444 (M.D. Fla. Bankr. 2007); In re Dynamic Tours & Transp., 359 B.R. 336 (M.D. Fla. Bankr. 2006). At the motion hearing, JRH relied upon both Wasson and Dynamic Tours to support its position on the propriety of a bankruptcy court issuing punitive damages. But the Court declines to follow Jove and those cases relying upon it. The Eleventh Circuit's comment on the breadth of § 105(a), insofar as it discussed punitive damages, was dicta. Punitive damages were already foreclosed by virtue of the creditor's sovereign immunity. Jove, 92 F.3d at 1559. Moreover, as explained in more detail above, its unreasoned statement on the power of the bankruptcy court to issue "punitive" orders is not persuasive. It neither addresses the limitations the Supreme Court put on that power in Chambers, nor the careful wording of § 105(a)'s grant of authority to enforce the Bankruptcy Code. “Because a federal court’s inherent powers carry great ‘potency,’ they must be exercised with ‘restraint and discretion.’” Brown v. City of Upper Arlington, 637 F.3d 668, 675 (6th Cir. 2011) (quoting Chambers, 501 U.S. at 44 . The same can be said of § 105(a). Those aims do not appear to be reflected here. Therefore, this Court must reverse 17 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 18 of 28 Pg ID 9325 the judgment of the Michigan Bankruptcy Court as it pertains to the award of punitive damages. II. The Award of Attorney Fees and Costs Section 303(i) of the Bankruptcy Code allows a “reasonable attorney’s fee” when an involuntary petition is dismissed. In its order remanding this matter to the Michigan Bankruptcy Court, the Court held that § 303(i) of the Bankruptcy Code “permit[s] the award of attorney fees and costs that were incurred after the dismissal of the petition.” JRH III, 405 B.R. at 199. On remand, the Michigan Bankruptcy Court awarded $1,854,192.73 in attorney fees and costs to JRH. Adell has appealed that ruling. He makes five principal arguments7: (1) § 303(i) does not permit a party to receive attorney fees for collateral proceedings; (2) the fee request was improper because it was made by Honigman and the other law firms, and not JRH; (3) the fee award was unreasonably large; (4) fees incurred after Adell proposed the supersedeas bond were not necessary for JRH to incur; and (5) the Michigan Bankruptcy Court disregarded this Court’s mandate by not giving sufficient consideration to the Florida proceedings. The Court finds none of these contentions persuasive, and will uphold the attorney fees and costs award in full. A. Does § 303(i) Permit Attorney Fees for Collateral Proceedings? JRH spent nearly a quarter of a million dollars in post-judgment litigation in the Michigan Bankruptcy Court on the $6.1 million judgment, and another quarter of a million dollars defending it on appeal. But its greatest expenses were incurred in the Florida bankruptcy litigation, with approximately $1.3 million spent opposing Adell’s bankruptcy 7 Additionally, Adell's appeal renewed arguments regarding claim and issue preclusion in an effort to preserve them for appeal to the Sixth Circuit. He acknowledged that this Court has already squarely rejected these arguments. The Court relies on its previous rulings as to these arguments, and will not address the matter further here. 18 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 19 of 28 Pg ID 9326 filing. Some additional expenses were also incurred in collection proceedings in California. This Court has already ruled that all of the litigation arising from Adell’s involuntary petition, including the Florida litigation, is compensable under § 303(i). JRH III, 405 B.R. at 215. Adell raises a new issue in this appeal that is worthy of deeper consideration: he argues that § 303(i) only permits awards for fees incurred in the involuntary bankruptcy proceeding itself, and not for work performed in collateral proceedings, like the Florida bankruptcy litigation. This argument is based on the presumption in federal common law against awarding attorney fees absent explicit authorization. See Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Servs., 532 U.S. 598, 602 (2001). Section 303(i)(1)(B) is a fee-shifting statute, meaning that “[w]hen an involuntary petition is dismissed, the debtor is presumed to be entitled to reasonable fees and costs.” In re Maple-Whitworth, 556 F.3d 742, 746 (9th Cir. 2010). As a general rule, in fee-shifting schemes, all costs reasonably incurred in litigating the fee action are compensable, including fees spent to enforce a judgment or collect fees. Balark v. Curtin, 655 F.2d 798, 803 (7th Cir. 1981) ("An award of compensation for injuries . . . would be 'diluted' if fees were denied to plaintiffs required to contest substantial efforts to resist or obstruct the collection of civil rights judgments. The victory would be hollow if plaintiffs were left with a paper judgment not negotiable into cash except by undertaking burdensome and uncompensated litigation."); Weisenberger v. Huecker, 593 F.2d 49, 54 (6th Cir. 1979) (reasoning, in the context of the Civil Rights Act’s fee-shifting provision, that “implementation of Congressional policy requires the awarding of attorney’s fees for time spent pursuing attorney’s fees in the cases presently under review”). A similar theory buttresses § 303(i). As this Court found earlier, "if the petitioner appeals the dismissal or the involuntary petition causes other litigation, the alleged debtor 19 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 20 of 28 Pg ID 9327 continues to suffer damages for which there should be compensation." JRH III, 405 B.R. at 215. The Ninth Circuit has concurred in this assessment. See In re S. Cal. Sunbelt Developers, Inc., 608 F.3d 456, 463 (9th Cir. 2010) (holding, in a § 303(i) case, that “‘it would be inconsistent to dilute a fees award by refusing to compensate attorneys for the time they reasonably spent in establishing their rightful claim to the fee’” (quoting Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 981 (9th Cir. 2008 ; see also 2 Collier on Bankruptcy ¶ 303.33[4][b] (16th ed. 2009) (noting that a “reasonable” fee award also includes fees expended “in the pursuit of costs and damages under [§ 303(i)]”). Adell argues that § 303(i) does not explicitly authorize fees for expenses incurred litigating in other forums to enforce a judgment. But he presents no legal basis for drawing a distinction between “collateral” and “primary” litigation in fee-shifting statutes. And given the policies animating fee-shifting provisions, it should not matter whether post-judgment litigation is pursued in the forum where the judgment was entered, or another forum. See, e.g., Prandini v. Nat’l Tea Co., 585 F.2d 47, 53 (3d Cir. 1978) (“If an attorney is required to expend time litigating his fee claim, yet may not be compensated for that time, the attorney’s effective rate for all hours expended on the case will be correspondingly decreased. Recognizing this fact, attorneys may become wary about taking . . . cases for which attorneys’ fees are statutorily authorized.”). This is particular true when a judgment debtor files for bankruptcy. The judgment creditor has no choice but to follow the debtor into the bankruptcy court in order to preserve the viability of the judgment. To not include reasonably necessary ancillary litigation in an attorney fees award would undermine the ends of § 303(i), an interpretation the Court is disinclined to adopt. JRH III, 405 B.R. at 215 (“[I]f the petitioner appeals the dismissal or the involuntary petition causes other litigation, the alleged debtor continues to suffer damages for which there should be compensation.”). 20 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 21 of 28 Pg ID 9328 Moreover, it is not strictly true, as Adell argues, that requests for fees from collateral proceedings are unprecedented. For instance, in explicating the Civil Rights Act’s fee- shifting provision, 42 U.S.C. § 1988,8 the Supreme Court has endorsed the idea that work performed in outside administrative proceedings could be compensated by the federal court under § 1988 if such work “was both useful and of a type ordinarily necessary to advance the civil rights litigation.” Webb v. Bd. of Educ. of Dyer Cnty., 471 U.S. 234, 243 (1985). In an unpublished decision, the Sixth Circuit observed that, under Webb, “[a]n award of fees for ancillary proceedings is proper if the work was ‘useful and of a type ordinarily necessary’ to secure the relief requested in the primary proceeding.” Grand Traverse Band of Ottawa & Chippewa Indians v. Director, Mich. Dep’t of Nat. Res., 149 F.3d 1183 (table), 1998 WL 385891, at *7 (6th Cir. July 1, 1998) (quoting Webb, 471 U.S. at 243) (upholding lower court’s denial of attorney fees in state court proceedings, in recognition of rule that criminal proceedings prior to institution of civil-rights action are generally non-compensable). Moreover, at least three of the regional circuits have permitted fees to be awarded for state- court litigation that was “necessary” to defend a party's rights in federal civil rights cases 8 “In any action or proceeding to enforce a provision of [the civil rights laws], the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs . . . .” 42 U.S.C. § 1988(b). 21 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 22 of 28 Pg ID 9329 under § 1988.9 Since § 1988 does not explicitly authorize fee awards in collateral proceedings, either, the Court agrees with JRH that this objection carries little weight. In addition, several district courts have awarded supplemental fees to parties forced to oppose a bankruptcy in order to protect their judgments. The leading case is Pinshaw v. Monk, 565 F. Supp. 44 (D. Mass. 1983). In Pinshaw, the defendant filed bankruptcy while a § 1983 case was pending against him, but before the entry of judgment. Pinshaw, 565 F. Supp. at 45. The court granted a fee application under § 1988 covering expenses the plaintiff incurred to "to prevent discharge of any judgment rendered" in the district court case. Id. Two other district courts have followed Pinshaw's holding in the civil-rights context, focusing on the goals of fee-shifting provisions rather than on the forum where the fees were incurred. Seibel v. Paolino, 249 B.R. 384, 387 (E.D. Penn. 2000); Williams v. Ingram, No. 00-1815-C, 2006 WL 3776366, at *4 (S.D. Ind. Dec. 21, 2006). The Court finds those rulings applicable here, given § 303(i)'s similarly broad remedial purpose of restoring the victim of a frivolous involuntary bankruptcy filing to his or her financial status prior to the proceeding. Adell argues that Children's Center for Developmental Enrichment v. Machle, 612 F.3d 518 (6th Cir. 2010), bars this award. It does not. In Machle, the district court dismissed a complaint filed by the defendant against the plaintiff because of a failure to exhaust 9 See Lampher v. Zagel, 755 F.2d 99, 102–04 (7th Cir. 1985) (affirming attorney fee award by federal district court for civil rights plaintiff’s participation in a state-court forfeiture action that raised the same constitutional question raised in the plaintiff’s declaratory judgment action); Stathos v. Bowden, 728 F.2d 15, 22 (1st Cir. 1984) (allowing plaintiff in a § 1983 action to collect attorney fees for defense of a declaratory judgment action in state court that would have precluded their federal claims if it was not successfully opposed); Bartholomew v. Watson, 665 F.2d 910, 912–14 (9th Cir. 1982) (approving award of attorney fees arising from an Oregon state court action initiated by defendants because “the state court proceedings were an essential step in the presentation of [plaintiffs’] section 1983 claim because of the Pullman abstention rule” (emphasis added . 22 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 23 of 28 Pg ID 9330 administrative remedies. Machle, 612 F.3d at 520. The plaintiff prevailed in the administrative proceedings, then brought a new lawsuit against the defendant in district court, seeking attorney fees under § 1988. The Sixth Circuit affirmed the district court's denial of the request, finding that because the action was a stand-alone claim for attorney fees, and was not made in an action "to enforce § 1983 or another listed civil rights law," it was improper. Id. at 523. This case, as well as those cited above, is distinguishable from Machle. Section 303(i) does not contain § 1988's requirement that fee requests be filed "in an action to enforce a provision of" the substantive laws in question. But even if it did, the fee request in this case was properly made in the original involuntary bankruptcy action brought by Adell in support of the judgment entered by the Michigan Bankruptcy Court. The concern articulated in Machle about bringing a completely separate action for attorney fees, based on litigation entirely unrelated to a viable federal claim, is not present here. Therefore, Machle does not bar the fee award in this case. In summary, the Court finds that a bankruptcy court may award attorney fees and costs in post-judgment proceedings under § 303(i) for time spent litigating in collateral proceedings in other forums. Provided the monies spent by the party enforcing the judgment are "'actually and reasonably expended in the prosecution of the litigation,'" JRH V, 461 B.R. at 12–13 (quoting Imwalle v. Reliance Med. Prods., Inc., 515 F.3d 531, 553 (6th Cir. 2008 , collateral proceedings should be treated no differently from proceedings in front of the bankruptcy court for the purposes of determining a reasonable attorney fee. In this case, substantial record evidence suggested that Adell filed his Chapter 11 petition in the Florida Bankruptcy Court to avoid posting a bond while he exhausted his appeals, and to obtain more favorable forum after the Michigan Bankruptcy Court ruled against him on the “homestead” exemption question. The bankruptcy judge concluded that “JRH's 23 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 24 of 28 Pg ID 9331 extended legal battle to challenge Adell's bankruptcy was absolutely necessary for it to obtain any real relief from Adell's wrongful involuntary bankruptcy petition.” JRH V, 461 B.R. at 11. Had JRH not opposed Adell’s bankruptcy, and the Florida Bankruptcy Court granted him a discharge of indebtedness, the judgment against Adell “would have been just a piece of paper.” Id. This conclusion was not an abuse of discretion, and therefore, the award of attorney fees withstands this assignment of error B. Was the Fee Request Procedurally Improper? Adell argues that the fee award is an improperly filed ancillary action over which the Court lacks subject-matter jurisdiction. See Hudson v. Coleman, 347 F.3d 138, 141–46 (6th Cir. 2003) (affirming district court’s decision to quash writs of garnishment as beyond the ancillary jurisdiction of the federal courts). But the Court has already rejected Adell’s argument on a prior occasion. See JRH V, 405 B.R. at 199 (“Adell's arguments that there is no jurisdiction or standing because . . . the application was filed not by JRH but by HMSC after the payment of the judgment are entirely unpersuasive.”). Hudson says nothing to the contrary, and no persuasive argument for reconsidering the Court's prior order has otherwise been made. Accordingly, the Court rejects this argument. C. Was the Fee Unreasonably Large? Adell argues that the Michigan Bankruptcy Court’s ultimate award of attorney fees was unreasonably high. The bankruptcy judge rejected most of Adell’s objections to the claim for attorney fees, but did agree that some of the details of the fee application were inadequate. Accordingly, it reduced the fee award by fifteen percent to restrict JRH to fees which it had substantially justified. See Sykes v. Anderson, 419 F. App’x 615, 618 (6th Cir. 2011) (deeming an across-the-board fee reduction of twenty-five percent to address duplicative billing within the discretion of the district court); see also Hensley v. Eckerhart, 24 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 25 of 28 Pg ID 9332 461 U.S. 424, 436–37 (“The court necessarily has discretion in making [the] equitable judgment” about the size of an award of attorney fees). The bankruptcy court considered, and rejected, all of Adell’s other arguments, and approved of JRH’s fee request. Adell argues on appeal that the reduction in the award was “simply insufficient” to address the fee application’s lack of detail and perceived overstaffing issues. But even if the Court were to reach a different conclusion examining the evidence for itself, the Michigan Bankruptcy Court “found no substantial evidence that assignments were overstaffed; that there was unnecessary duplication of services; that hourly rates were too high for the services performed; that excessive hours were spent; or that any costs were actually overhead.” JRH V, 461 B.R. at 12. Other than assertions that the Michigan Bankruptcy Court “got it wrong,” Adell presents nothing in his brief that would show either a legal error or a clearly erroneous factual basis for the award. Because this Court can only reverse a fee award when there is an "abuse of discretion," it concludes that the attorney fees award cannot be reversed on this ground. D. Was Litigation After the Posting of the Supersedeas Bond "Necessary?" Next, it was not “plain error” for the Michigan Bankruptcy Court to find that JRH’s decision to continue litigating after it offered to post a supersedeas bond was justifiable. Both this Court and the Sixth Circuit denied Adell's motion to approve the bond at the time Adell offered it to JRH in order to stay collection proceedings. That decision is now the law of the case, and the parties raise no compelling grounds for revisiting these prior decisions. See Yeschick v. Mineta, 675 F.3d 622, 633 (6th Cir. 2012). There is no tenable way for the Court to hold that the litigation in Florida was "unnecessary" upon Adell's tender of the supersedeas bond when both this Court and the Sixth Circuit refused to accept Adell's request to stay execution proceedings at the time he made it. 25 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 26 of 28 Pg ID 9333 Second, as JRH argues in its brief, a contrary ruling would suggest that after spending a year opposing a bankruptcy filed solely for the purpose of obstructing its judgment, it was expected to drop all collection efforts when Adell offered the bond. By the time Adell offered the bond, JRH had expended approximately $1 million in litigation expenses in an effort to protect its judgment. JRH was within its rights not to consent to the bond and pursue immediate satisfaction of the judgment. For these reasons, and the reasons given in the Michigan Bankruptcy Court's order below, the Court concludes that the bankruptcy judge's finding that legal work performed after Adell proposed the supersedeas bond was "necessary," and therefore compensable, was not clear error. E. Did the Michigan Bankruptcy Court Adequately Consider the Florida Bankruptcy Court’s Findings? Adell next argues that the Michigan Bankruptcy Court did not adequately take into consideration the proceedings in the Florida courts in assessing damages, as directed by this Court’s remand order. See United States v. Connally, 37 F.3d 1500 (table), 1994 WL 533055 (6th Cir. Sept. 30, 1994) (“The district court is bound on remand by the decision of a superior court and may not consider any issue which that court's mandate has laid to rest.”). With respect to JRH’s fee application, this Court directed the Michigan Bankruptcy Court to “consider all circumstances in making an equitable determination whether attorney fees should be granted, including what transpired between the parties in the Florida court proceedings.” JRH III, 405 B.R. at 200. The Court agrees with JRH that the bankruptcy judge adequately weighed the Florida proceedings in making his determination. With respect to the fee application, the Michigan Bankruptcy Court found that the refusal of the Florida courts to award fees carried little weight in its determination because “the standards by which those courts denied those requests are different from the standard by which the present request is to be determined.” 26 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 27 of 28 Pg ID 9334 JRH V, 461 B.R. at 10. This is a reasonable assessment of the interaction of the Florida court rulings and the questions set before the Michigan Bankruptcy Court. When a superior court asks an inferior court to consider an issue, it is an acceptable response to consider the issue and find it carries little weight. In light of the law framing these issues, it cannot be said that the bankruptcy judge committed an abuse of discretion on this point. Therefore, the attorney fee award withstands this challenge, as well. CONCLUSION & ORDER While the parties disagree on the precise characterization of Adell's conduct in this case, there is no dispute that he strained every nerve to frustrate JRH's collection of the judgment the Michigan Bankruptcy Court duly entered against him. The fee-shifting provision of § 303(i) entitles JRH to compensation for its efforts to preserve that judgment from Adell's evasive tactics. Nonetheless, even in the face of egregious litigation misconduct, courts must exercise their powers with great care and discretion. Upon careful consideration of this Court's previous orders, the arguments of counsel, and the relevant law, the Court must conclude that the punitive damages award entered against Adell was an abuse of discretion. WHEREFORE, it is hereby ORDERED that the Michigan Bankruptcy Court's order is AFFIRMED IN PART with respect to the award of attorney fees and costs, and REVERSED IN PART with respect to the award of punitive damages. SO ORDERED. Dated: July 16, 2012 s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on July 16, 2012, by electronic and/or ordinary mail. 27 2:12-cv-10506-SJM-MJH Doc # 25 Filed 07/16/12 Pg 28 of 28 Pg ID 9335 s/Carol Cohron Case Manager 28

=== ORDER GRANTING DEFENDANTS LEAVE TO FILE PARTIAL MOTION FOR SUMMARY JUDGMENT ===

2:11-cv-14525-SJM-MJH Doc # 40 Filed 06/28/12 Pg 1 of 3 Pg ID 903 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION CONTINENTAL AUTOMOTIVE SYSTEMS US, INC., Case No. 11-14525 Plaintiff, HONORABLE STEPHEN J. MURPHY, III v. SHRADER ELECTRONICS, INC., et al., Defendants. / ORDER GRANTING DEFENDANTS LEAVE TO FILE PARTIAL MOTION FOR SUMMARY JUDGMENT Plaintiff Continental Automotive Systems US. Inc. ("Continental") filed this action against defendants Shrader Electronics, Inc. and Shrader-Bridgeport International, Inc. (together "Shrader"), claiming that Shrader's tire pressure monitoring system ("TPMS") products infringe four patents owned by Continental. The matter before the Court is Shrader's request for permission to file an early summary judgment motion regarding the validity of Continental's patent, U.S. Patent No. 7,004,019 (the "‘019 patent"). Generally in a patent case, a court's analysis of infringement and invalidity is a two-step process: the court construes the patents at issue, and then based on that construction, the jury determines whether infringement has occurred. Markman v. Westview Instruments, Inc., 517 U.S. 370, 384 (1996) (describing "two elements of a simple patent case, construing the patent and determining whether infringement occurred"). But here, Shrader contends that the Court can determine whether Shrader infringed Continental's ‘019 patent without claim construction, by looking to Continental's own allegations of infringement. In short, if Shrader can show that the accused features of its allegedly infringing tire sensors are not materially different than the features Shrader used in tire 2:11-cv-14525-SJM-MJH Doc # 40 Filed 06/28/12 Pg 2 of 3 Pg ID 904 sensors that predate Continental's ‘019 patent, then Continental's patent will necessarily be invalid and Continental's infringement claims will fail. For the purposes of this summary judgment motion only, Shrader will concede infringement. Claim construction will then be unnecessary because Continental's own infringement allegations will suffice to prove that the infringing device embodies the patented invention. The only questions of fact to resolve on summary judgment will be (1) whether the allegedly infringing device differs materially from Shrader's prior art; and (2) whether Shrader can show that its prior art was "on sale" at least one year before Continental filed for its patent. Shrader cites two Federal Circuit cases approving of this approach. See Evans Cooling Sys. v. GMC, 125 F.3d 1448 (Fed. Cir. 1997); Vanmoor v. Wal-Mart Stores, Inc., 201 F.3d 1363 (Fed. Cir. 2000 . In Evans, Evans contended that GM's LT-1 engine contained a cooling system that infringed Evans' patent. GM sought to prove that the infringing feature of its LT-1 engine had been on sale for more than a year prior to Evans' securing his patent. The Federal Circuit held that the suit could be resolved by using Evans' infringement contentions to determine whether GM had placed the allegedly infringing cooling system on sale before Evans took out its patent, thus invalidating the patent. Evans Cooling Sys., 125 F.3d 1448, 1451 (Fed. Cir. 1997) ("Although GM bore the burden of proving that the LT1 engine embodied the patented invention or rendered it obvious for purposes of the summary judgment motion, this burden is met by Evans' allegation, forming the sole basis for the complaint, that the LT1 engine infringes."); see also Vanmoor v. Wal-Mart Stores, Inc., 201 F.3d 1363, 1366 (Fed. Cir. 2000) (following Evans and holding that "[a]lthough Wal-Mart and the manufacturers bore the burden of proving that the cartridges that were the subject of the pre-critical date sales anticipated the '331 patent, 2 2:11-cv-14525-SJM-MJH Doc # 40 Filed 06/28/12 Pg 3 of 3 Pg ID 905 that burden was satisfied by Vanmoor's allegation that the accused cartridges infringe the '331 patent."). Shrader seeks to proceed in the same manner here. The Court will grant Shrader's request because it presents the possibility of simplifying the litigation, narrowing the issues, and saving the parties from engaging in possibly needless discovery through the early resolution of one of Continental's claims. Shrader is directed to file its proposed motion on the docket. The Court will grant Continental limited additional time for discovery to facilitate its response to the motion, and will adjourn the scheduled Markman hearing, as set forth below. ORDER WHEREFORE it is hereby ORDERED that Shrader's request to file an early summary judgment motion regarding Continental's '019 patent is GRANTED. Shrader is directed to immediately file its proposed motion on the docket. The parties shall have thirty days from filing of the motion to conduct discovery related to the motion. At the end of the thirty days, Continental shall have twenty-one days to file its response to Shrader's motion for summary judgment. IT IS FURTHER ORDERED that the Markman hearing presently scheduled for August 3, 2012, is ADJOURNED pending resolution of the motion for summary judgment. The due date for the parties' responsive claim construction briefs remains unchanged. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: June 28, 2012 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on June 28, 2012, by electronic and/or ordinary mail. Carol Cohron Case Manager 3

=== ORDER DENYING CITY DEFENDANTS' MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, FOR PARTIAL SUMMARY JUDGMENT (docket no. 36) Dr. ===

2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 1 of 17 Pg ID 692 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ACTS 17 APOLOGETICS, et al., Plaintiffs, v. CITY OF DEARBORN, et al., Defendants. / Case No. 11-cv-10700 HONORABLE STEPHEN J. MURPHY, III ORDER DENYING CITY DEFENDANTS' MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, FOR PARTIAL SUMMARY JUDGMENT (docket no. 36) Dr. Nabeel Qureshi, David Wood, and Paul Rezkalla ("Plaintiffs") are members of Acts 17 Apologetics, an organization that “seeks to convert Muslims to Christianity through discussion, debate, and dialogue.” Compl. ¶ 9. On June 18, 2010,1 they attended the Arab International Festival (“Festival”) in Dearborn, Michigan (the “City”), with the intent of engaging Muslim attendees in conversation about the merits of Christianity and Islam. They brought video recording equipment with them to document their activities. A few hours after they arrived, City of Dearborn Police Department (“DPD”) officers arrested Plaintiffs for violating the City's "breach of peace" ordinance, based on a festival worker's claim that Plaintiffs threatened his safety. A state district court judge found the police had probable cause to arrest Plaintiffs, and bound them over for trial. A jury acquitted Plaintiffs of the charges. 1 The complaint also describes an incident that took place on June 20, 2010, which is not relevant to the facts of the present motion. 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 2 of 17 Pg ID 693 After their acquittal, Wood, Qureshi, Rezkalla, and Acts 17 filed this action against the City and nineteen individuals who work for it in various capacities2 (collectively, the “City Defendants”), as well as two officials from the Arab-American Chamber of Commerce,3 which stages the Festival. Plaintiffs’ twelve-count complaint alleges violations of the First, Fourth, and Fourteenth Amendments of the federal constitution, as well as a conspiracy to violate these rights, pursuant to 42 U.S.C. § 1983; and state-law claims of defamation, assault, battery, and intentional infliction of emotional distress. The City Defendants now move for partial judgment on the pleadings under Civil Rule 12(c), or, in the alternative, for partial summary judgment under Civil Rule 56(a), with respect to the June 18 incident. Their argument is based on the doctrine of collateral estoppel, or issue preclusion. Since the state district court already determined there was probable cause to arrest and try Plaintiffs, the City Defendants argue, Plaintiffs are foreclosed from relitigating the issue. Plaintiffs respond that the probable-cause issue they are raising in this case is not identical because they are challenging the veracity of the City’s submissions to the state district court. Plaintiffs also argue that they were not given a “full and fair” opportunity to contest probable cause in the state district court. The Court held a hearing on the City Defendants’ motion on December 13, 2011. After taking the motion under consideration, the Court agrees with Plaintiffs that the state district court’s adjudication of the probable cause issue does not preclude the Court from reexamining it here. Accordingly, the motion will be denied. 2 The City officials named include Mayor John B. O'Reilly; Chief of Police Ronald Haddad; Police Officers Jeffrey Mrowka, Brina Kapanowski, Justin Smith, Andrew Ballard, Jarod Micallef, Mark Matteocci, A. Fawaz, R. Gafford, and nine "John Doe" police officers. 3 The persons named are Fay Beydoun, Executive Director; and Norma Haidous, Special Events Coordinator and Executive Assistant. 2 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 3 of 17 Pg ID 694 STANDARD OF REVIEW The standard of review for a Civil Rule 12(c) motion is identical to that used on a Civil Rule 12(b)(6) motion. Fritz v. Charter Tp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010). Therefore, the Court should only grant a Civil Rule 12(c) motion if the allegations are not "sufficient 'to raise a right to relief above the speculative level,' and to 'state a claim for relief that is plausible on its face.'" Henley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir. 2009) (internal citation omitted) (quoting Bell Atlantic Corp. v. Twombly, , 555, 570 (2007 . In evaluating the motion, the Court presumes the truth of all well-pled factual assertions. Bishop v. Lucent Techs., 520 F.3d 516, 519 (6th Cir. 2006). Moreover, it must draw every reasonable inference in favor of the non-moving party. Dubay v. Wells, 506 F.3d 422, 427 (6th Cir. 2007). But "[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the element of a cause of action will not do.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 555). The complaint and pleadings make extensive reference to outside materials, including video clips, court documents, and police reports. But these are virtually the same materials the state district court examined when it made the probable cause ruling that is the subject of this motion. The Court finds that all of the materials the parties have discussed in their briefs “are integral to the complaint, are public records, or are otherwise appropriate for the taking of judicial notice.” Ashland v. Oppenheimer & Co., 648 F.3d 461, 467 (6th Cir. 2011). Therefore, it may well discuss these materials without necessarily converting the motion into one for summary judgment under Civil Rule 56. Id. 3 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 4 of 17 Pg ID 695 I. Acts 17's Activities at the 2009 Festival BACKGROUND Acts 17 first captured the attention of City authorities at the 2009 Festival. Wood and Qureshi held conversations with workers at festival booths promoting Islam and staged public, moderated debates with Muslims on the merits of Christianity. Compl. ¶¶ 84–86. Mary Jo Sharp, another member of the group, filmed their activities. Compl. ¶ 88. According to Plaintiffs, on June 21 — the third day Acts 17 members attended the festival — Norma Haidous, a special events coordinator for the American Arab Chamber of Commerce, began harassing Wood, Qureshi, and Sharp. She allegedly tried to entrap Wood in a violation of the festival’s “Literature Distribution Policy,” and asked Sharp to stop filming a conversation between Qureshi and an individual operating a booth promoting Islam. Compl. ¶¶ 87–89. Eventually, a security guard caught Qureshi handing a pamphlet given to him at the booth to another festival-goer, which led to Qureshi, Wood, and Sharp being “physically forced” out of the Festival by security personnel. Compl. ¶ 95–96. Plaintiffs claim that Qureshi actually had the pamphlet “snatched” from him by a Festival attendee who conspired with a security worker to create a pretext for removing Plaintiffs from the Festival. Id. As security personnel were “forcing” them out, Plaintiffs called Jeffrey Mrowka, a Dearborn police officer, for assistance. Compl. ¶ 97. He arranged for a police escort for Plaintiffs out of the festival without further harassment by security. Id. Plaintiffs publicized this encounter in a series of YouTube videos that paint an unflattering portrait of the Festival and the City. Compl. ¶ 103; see also Special Report: Sharia Comes to Dearborn, Michigan, Answering Muslims, July 1, 2009, http://www.answeringmuslims.com/2009/07/special-report-sharia-comes-to-dearborn.html. The videos prompted an outcry from the City’s civic and religious leaders. See Response 4 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 5 of 17 Pg ID 696 to Acts 17 Apologetics’ “Special Report: Shari’a in the United States” by Concerned Followers of Jesus in Dearborn, October 20, 2009, http://www.fairlanealliance.org/ downloads/letter_concerning_acts_17.pdf (criticizing Acts 17 for “present[ing] a contrived and false image of the actual situation here on the ground in Dearborn” on behalf of a group of Christian ministers recruited to discuss the issue by the City); Background on Arab Fest Arrests, City of Dearborn Homepage, http://www.cityofdearborn.org/government/city- services/public-information/press-releases/441-arab-fest-response (claiming videos were “a distortion of [Acts 17's] experience and a misrepresentation of the Dearborn Arab International Festival”). Plaintiffs claim that Mayor John B. O’Reilly and numerous city officials made false statements about the Plaintiffs, promoted other Christian missionaries who attended the Festival in an effort to cast the Plaintiffs as radicals, and coordinated much of the public criticism of their activities. Compl. ¶¶ 112–27. II. Encounter at the 2010 Arab Festival When the Plaintiffs returned to the Festival on June 18, 2010, they came with a fair amount of notoriety. They claim the City Defendants received false “tips” prior to the Festival that Acts 17 would attempt to “invade” the festival. Compl. ¶ 155. When they did arrive, Qureshi, Wood, and Rezkalla4 roamed the Festival and filmed themselves with handheld cameras. Compl. ¶ 156. Their intent was “to document their missionary activities . . . and . . . the general atmosphere of the festival for Christians.” Id. Qureshi carried a microphone to conduct man-on-the-street interviews. Compl. ¶ 157. Although many DPD officers and Festival security guards saw the Plaintiffs, neither group made an effort to stop Plaintiffs from engaging in these activities. Compl. ¶ 166. Festival officials were soon aware 4 Nageen Mayel filmed the Plaintiffs at a distance to provide further corroboration of Acts 17's story in case the police bothered them. The complaint originally named her as a plaintiff, but she withdrew from the action prior to the filing of the present motion. 5 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 6 of 17 Pg ID 697 of the Plaintiffs' presence, and other Christian ministers attending the Festival overheard Festival personnel discussing a "need to get rid of [the Plaintiffs]" and "conspiring" to have them removed. Compl. ¶¶ 170–71. When these ministers called Mrowka, the police officer coordinating security at the event, to complain, he became "angry and dismissed their concerns, taking no further action." Compl. ¶¶ 173–77. Luke Campbell, a Christian minister not affiliated with Acts 17, approached the three men after they had been roaming the Festival for an hour or so. Compl. ¶ 179. Campbell told Plaintiffs that Roger Williams, a Festival security volunteer, had prevented him from passing out a Bible tract earlier that day. Id. Qureshi asked Campbell if he would like to describe his experience in an interview. Compl. ¶ 180. Campbell agreed. Id. At the end of the interview, Williams saw the Plaintiffs and Campbell conversing, approached them, and told Campbell, “I knew you were with [the Plaintiffs].” Compl. ¶ 183. After a brief and unremarkable exchange, the Plaintiffs ended the interview and walked away from Williams and Campbell. Compl. ¶ 185. After wandering for several minutes, Qureshi, Wood, and Rezkalla noticed that Campbell and Williams were still talking to each other. Compl. ¶ 186; Video of Williams, Pls.’ Resp Ex. E (on file with the Court). Plaintiffs approached, standing in a loose circle around Campbell and Williams, with their cameras rolling. Id. Qureshi asked Campbell if “everything was alright” and if Williams was “‘messing’ with him again.” Id. Campbell assured Plaintiffs that nothing was wrong, and Plaintiffs started to walk away. Id. They had not gotten far when Williams said to them, “You don’t have to worry about me messing with him, you have to worry about me messing with you, all right.” Id. When Plaintiffs turned around to ask Williams what he meant by this, Williams had started talking to security personnel on his walkie-talkie. Compl. ¶ 187–88. Plaintiffs asked 6 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 7 of 17 Pg ID 698 Williams for an explanation of what they had done, narrated the actions he was taking, and filmed the entire exchange. Id. Williams started walking away from Plaintiffs several times, only to return and confront them, and he claimed he would offer an explanation as to what Plaintiffs had done wrong if they would turn off the video camera. Compl. ¶¶ 190–91. Plaintiffs offered to do so, but do not appear to have actually complied with his request, and Williams left without explaining the matter any further. Compl. ¶ 192. After leaving Plaintiffs behind, Williams and Amal Alslami, another festival worker, went to the DPD command trailer at the Festival and spoke to Mrowka and Brian Kapanowski, another DPD officer. Compl. ¶ 202. According to the arrest reports, Williams told the police that he had been surrounded by the Plaintiffs and pestered with questions while being videotaped, despite requests that they stop. Id.; Op. & Order Denying Mots. for Bill of Particulars and for Dismissal 5 [hereinafter “District Court Order”], Sept. 13, 2010, ECF No. 36-3. He believed that Plaintiffs were attempting to corner him and make him feel uncomfortable. Compl. ¶ 202. Mrowka sent Kapanowski and Brian Smith, another officer, into the Festival grounds to make a further inquiry. Compl. ¶ 207. The officers found Qureshi in the main tent area conversing with a small crowd of Muslim youths who had seen Acts 17's videos about the 2009 Festival, with Rezkalla and Wood filming the scene. Compl. ¶¶ 219–27; Video of “Last 17 Minutes,” Pls.’ Resp. Ex. G (on file with the Court). Without using vulgar language or threats, Qureshi defended Acts 17's previous work and his Christian beliefs from the crowd's pointed, and occasionally hostile, questions. Compl. ¶¶ 224, 227 The police report prepared by Mrowka described the scene this way: [Plaintiffs] actions caused a crowd to gather and become agitated. The weather conditions, hot and humid temperatures, fueled an already agitated crowd. This was evident by the crowds yelling profanities and repreated calls to security and 7 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 8 of 17 Pg ID 699 police on the behavior of [Plaintiffs]. When uniform[ed] officers were present Qureshi was yelling into the crowd further inciting the crowd. Mrowka Police Rep. 1, June 18, 2010, ECF No. 36-4. This description reflects one possible interpretation of the scene, but it is also argumentative. For instance, one could say Qureshi was “yelling” at the crowd, but one reviewing the video evidence could also say he was simply raising his voice to be heard over the crowd talking to him, or, to use his word, feeling the natural effects of "adrenaline." Based on Williams’ accusations and their own observations, the officers decided to arrest Plaintiffs. Compl. ¶ 228. DPD officers also seized the cameras as an incident to the arrest, and later received search warrants to copy their contents. Id. Qureshi and Rezkalla offered to show the video to the police at the time of their arrest in an effort to prove they had done nothing wrong, but the officers refused the offer. Compl. ¶ 263. Plaintiffs spent a night in jail and were released on bond the following day. Compl. ¶ 268. After the Festivals, both Plaintiffs and the City Defendants resumed their media offensive. Plaintiffs released another series of YouTube videos showing what happened to them at the Festival, and accused the City of imposing de facto sharia5 law by silencing their missionary efforts. See, e.g., Arab Festival 2010: Arrested for being Christian Preachers in Dearborn, June 19, 2010, http://www.youtube.com/watch?v=8FXDAaiT6os. City Mayor John B. O’Reilly responded in an open letter published on the City’s website, accusing Plaintiffs of “aggressively engaging passers-by in confrontational debate when they were arrested,” bypassing lawful methods of spreading their message at the Festival 5 “Sharia” is “the body of formally established sacred law in Islam based primarily on Allah’s commandments found in the Koran and revealed through the [practices] of Muhammad, governing in theory not only religious matters but regulating as well political, economic, civil, criminal, ethical, social, and domestic affairs in Muslim countries, and commonly in practice being supplemented by the customary law of a region.” Webster’s Third New International Dictionary 2088 (1961). 8 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 9 of 17 Pg ID 700 that were available to them, and “misrepresent[ing] facts in order to further their mission of raising funds through emotional response.” Letter from Mayor O’Reilly, July 9, 2010, http://www.cityofdearborn.org/images/stories/PDF/Government/Mayor/mayorletter07-09- 2010.pdf. III. Plaintiffs’ Criminal Proceedings Prosecutors formally arraigned Plaintiffs on July 12, 2010, for violations of the City’s “breach of peace”6 ordinance. Plaintiffs sought dismissal of the charges in a “Motion for Bill of Particulars and for Dismissal” during their arraignment in state district court. The district court judge held a lengthy hearing on the matter on August 30, 2010. See Dist. Ct. Mot. Hr'g Tr., ECF No. 36-5. No witnesses testified. The district court judge had access to the video recording of the incidents leading up to the arrest, as well as to police reports the officers at the Festival had prepared. In a written order ("State Court Order"), the district court denied Plaintiffs’ motion and bound them over for trial. No one appears to dispute that Plaintiffs had no avenue of appeal from this decision. The State Court Order stated its rationale for upholding the arrest as follows: [b]ased upon the record presented at this point in the proceedings . . . it is not contested that officers of the Dearborn police department received a complaint from a festival volunteer, [Williams], alleging he had been ‘surrounded’ by the defendants against his will, that he was pestered and badgered with questions while being videotaped in spite of his requests that they stop, and that he felt 6 The ordinance provides: Any person who shall make or assist in making any noise, disturbance, trouble or improper diversion, or any rout or riot, by which the peace and good order of the city are disturbed, shall be guilty of a breach of the peace, and disorderly conduct. Dearborn, Mich. Code of Ordinances § 14-131 (1996). This ordinance “refers” to Mich. Comp. Laws § 750.170, which prohibits “mak[ing] or excit[ing] any disturbance or contention . . . in any street.” 9 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 10 of 17 Pg ID 701 extremely uncomfortable and thought he could not leave although he attempted to several times. Based on Williams' complaint, the officers had "reasonable cause to believe a misdemeanor . . . [had] been committed." State Court Order 5 (emphasis added) (quoting Mich. Comp. Laws § 764.15). This complaint, coupled with Williams' identification of the Plaintiffs at the place of their arrest, was sufficient, in the district court’s view, to justify the arrest. Id. The district court ascribed little, if any, weight to the Plaintiffs' stated purpose of engaging in journalism and evangelization, or to the longstanding feud between Plaintiffs and the City Defendants, holding that such considerations went to the state of mind of the officers and were not relevant to the probable cause calculus. Id. at 5–6. The district court's treatment of the video evidence Plaintiffs submitted to contest probable cause is confusing. At the August 30 hearing, the district court judge stated that he had "look[ed] at the cited portions" of the video evidence. Dist. Ct. Tr. 4:20–24. But in his denial of the Plaintiffs' motions, the judge reasoned that "with or without the video and audio recordings proffered by [Plaintiffs], the question of whether [Plaintiffs] actually engaged in the conduct alleged by Williams so as to hinder or impede his movement or otherwise rise to the level of disturbing the peace is owned by the jury as a question of fact." State Court Order at 6. The district court judge appeared to conclude that the video evidence was relevant only to proving the charges against Plaintiffs at trial, and not to the probable cause analysis. Plaintiffs' criminal trial began on September 20, 2010, in the state district court. Compl. ¶ 327. After a four-day trial, the jury unanimously acquitted Plaintiffs of the "breach of peace" charges. Compl. ¶ 335. The video evidence proved to be crucial to the Plaintiffs' case. For instance, after being shown the videos, Police Chief Ronald Haddad agreed with 10 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 11 of 17 Pg ID 702 a statement by Plaintiffs' counsel that "none of the activity . . . on the video clips serves as the basis for them being arrested for breach of the peace." Haddad Trial Tr. 149:20–24, ECF No. 41-3. When shown the video of Williams' encounter with the Plaintiffs, Mrowka testifed that the incident was not the basis of the arrests. Mrowka Trial Tr. 204:16–21, ECF No. 41-4. DISCUSSION I. Are Plaintiffs' Claims That the City Defendants Lacked Probable Cause to Arrest Precluded? A. Legal Standard Federal courts turn to state law to determine the preclusive effect of a prior ruling from that state. Ohio ex rel. Boggs v. City of Cleveland, 655 F.3d 516, 519 (6th Cir. 2011). In Michigan, a prior ruling is entitled to preclusive effect under the following conditions: (1) A question of fact essential to the judgment must have been actually litigated and determined by a valid and final judgment; (2) The same parties . . . had a full [and fair] opportunity to litigate the issue; and (3) Mutuality of estoppel. Gilbert v. Ferry, 413 F.3d 578, 580–81 (6th Cir. 2005) (quoting Monat v. State Farm Ins. Co., 469 Mich. 679, 681 (2004 . When collateral estoppel is asserted defensively, as the City Defendants have done here, the mutuality element drops out. Id. The City Defendants rely on the longstanding rule that when criminal defendants avail themselves of an opportunity to contest probable cause in a preliminary examination, that proceeding is generally given preclusive effect. See, e.g., Coogan v. City of Wixom, 820 F.2d 170, 175 (6th Cir. 1987) (“[W]here the state affords an opportunity for an accused to contest probable cause at a preliminary hearing and the accused does so, a finding of probable cause by the examining magistrate or state judge should foreclose relitigation of 11 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 12 of 17 Pg ID 703 that finding in a subsequent § 1983 action.”), overruled on other grounds, Frantz v. Vill. of Bradford, 245 F.3d 869 (6th Cir. 2002) . Plaintiffs attack this argument in two ways. First, they argue that the Sixth Circuit does permit relitigation of a probable cause determination when the veracity, rather than the sufficiency, of the assertions that supported the state court's finding are challenged. Second, they claim that the pretrial proceeding in state court is not entitled to preclusive consequences because it was not a “full and fair” adjudication of the issue. B. Plaintiffs' Complaint Plausibly Attacked Veracity of Police Statements Plaintiffs' first argument is derived from Darrah v. City of Oak Park, 255 F.3d 301 (6th Cir. 2001). In Darrah, a police officer arrested a protestor after an officer claimed he witnessed the protestor tugging on his gun belt while he performing crowd control at a union protest. Darrah, 255 F.3d at 304. The trial court determined there was probable cause to try her on charges of obstructing a police officer, but a jury acquitted her. Id. at 305. She sued the city in federal court for malicious prosecution. Id. The city successfully convinced the district court to dismiss the claim on collateral estoppel grounds, pursuant to Coogan, but the Sixth Circuit reversed. The panel ruled that issue preclusion did not apply because the plaintiff was arguing that “the officers misstated material facts in order to establish probable cause at the state level,” which was distinguishable from merely contesting “whether probable cause exists.” Id. at 311. The rule has been reaffirmed in numerous subsequent cases. See, e.g., Sykes v. Anderson, 625 F.3d 294, 301–02, 310–311, & n.8 (6th Cir. 2010) (denying preclusive effect to state probable cause determination because defendant police officers’ stated grounds for arresting plaintiffs for robbery contained “several flagrant misrepresentations, exaggerations, and omissions of evidence” of their own making); Hinchman v. Moore, 312 F.3d 198, 203 (6th Cir. 2002) 12 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 13 of 17 Pg ID 704 (permitting relitigation of state court's determination that police had probable cause to arrest her in dispute where defendant police officers claimed plaintiff assaulted them with her automobile, while plaintiff denied any wrongdoing). The Court finds that Darrah applies in this case, as well. Had the Plaintiffs accused the City Defendants of doing nothing more than acting on a good-faith tip from a security guard that was subsequently proven false, the Court might reach a different conclusion. But Plaintiffs allege here more than innocent mistakes. They claim to have direct evidence that the DPD was at least aware of a plot by Festival personnel to drum up grounds for "get[ting] rid of" the Plaintiffs. Compl. ¶ 171–175 (claiming that George Saieg and Charles Neusch overheard comments by Festival organizers who wished to arrest Plaintiffs, and called the police to complain, only to be rebuffed). It is a reasonable inference from their allegation that the Defendants knew Williams' complaint was pretextual. Therefore, Plaintiffs have met their pleading burden at this stage of the case.7 The indirect evidence of this conspiracy that was developed in state court and is already a part of the record in this case — including the videos and the testimony given by DPD officers at their trial — elevates their accusations above the threshold of plausibility required to survive a Civil Rule 12(c) challenge. The Court concludes the collateral estoppel bar that would typically prevent Plaintiffs' claims from moving forward does not stand in their way in this case. C. State District Court's Determination Was Not "Full and Fair" It would be sufficient for the Court to stop here, since Darrah is the law of the circuit and resolves the question presented. Nonetheless, the Court observes that application of 7 The City Defendants' reliance on Peet v. City of Detroit, 502 F.3d 557 (6th Cir. 2007) is misplaced because that case arose in the summary judgment context. After discovery, this Court, too, may conclude that Plaintiffs "[have] not shown that the state judge relied on false information to determine that probable cause existed." Peet 502 F.3d at 566. But at this stage, the Court must accept the Plaintiffs' well-pled allegations as true. 13 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 14 of 17 Pg ID 705 Darrah is particularly appropriate in this case. Some Sixth Circuit opinions criticize Darrah on the grounds that it allows plaintiff to take "a second bite at the probable-cause apple, a result that is diametrically opposed to the collateral-estoppel concept." Hinchman, 312 F.3d at 203. This criticism — which is not without force — is largely based on the presumption that the criminal defendant will be afforded an opportunity to attack the credibility of complaining witnesses in the preliminary examination. Id. (noting the problems with permitting relitigation of probable cause when plaintiff "was free to cross-examine the two defendants and to take the stand herself in an effort to discredit their testimony" at her preliminary hearing). But Plaintiffs were not afforded such an opportunity in this case. The district judge appears to have presumed the police reports submitted were truthful, and staked his probable cause determination on that presumption. Plaintiffs had no opportunity to either cross-examine the officers or take the stand themselves to contest the reports. Moreover, the district judge ruled that these reports gave rise to probable cause "with or without the video and audio recordings proffered by the defense." State Court Order at 6. It is a fair inference from this comment that the district court judge did not consider the relevant videos in making his determination of probable cause. In this sense, Plaintiffs' second argument — that they were not accorded a "full and fair" opportunity to litigate probable cause in the district court — more precisely describes why their first argument is meritorious. Federal courts "should look to the factors set forth in the [Second Restatement of Judgments]” to determine whether a prior Michigan proceeding was a "full and fair" adjudication of an issue. Monat, 469 Mich. at 685 n.2 (listing these factors). The Restatement takes into account, among other things, a party’s inability to appeal the decision, differences in the quality or extensiveness of the procedures 14 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 15 of 17 Pg ID 706 that would be used in the subsequent proceeding, and “[o]ther compelling circumstances” that may make relitigation appropriate. Id. The hearing conducted in the state district court was not a “preliminary hearing” like the one the Sixth Circuit addressed in Coogan. The district court had no duty to “examine the complainant and the witnesses in support of the prosecution, on oath,” as is required when probable cause for a felony arrest is being challenged. Mich. Comp. Laws § 766.4. Therefore, Plaintiffs lacked the ability to undermine the evidence that supported their arrest. Moreover, Plaintiffs had no right to appeal the district court’s ruling on probable cause prior to trial. Finally, the district court was inattentive to the effect Plaintiffs' claims of First Amendment protection might have on the probable cause determination. State Court Order at 6 ("Whether the content of the defendants' speech at any given time is . . . relevant . . . is not an issue the court is required to pass upon at this juncture . . . ."). The Sixth Circuit has warned on previous occasions that Michigan's "breach of peace" statute is prone to such abuse. See Leonard v. Robinson, 477 F.3d 347, 360–61 (6th Cir. 2007) (rejecting district court’s dismissal of § 1983 false imprisonment claims because there was a material question of fact as to whether plaintiff was merely engaging in protected First Amendment activity, as opposed to creating a threat to public safety, when he was arrested under Michigan’s “breach of peace” statute at a public meeting). Accordingly, the Court will deny the City Defendants' motion for the Court to give preclusive effect to the district court's probable cause determination. II. City Defendants' Other Contentions Plaintiffs' Fourth Amendment claims for false imprisonment, malicious prosecution, and illegal seizure of their video equipment, as well as their claims of a conspiracy to violate their civil rights under § 1983, are all predicated on findings that there was no probable 15 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 16 of 17 Pg ID 707 cause to arrest them. The Defendants moved to dismiss these claims in the hopes that the Court would give preclusive effect to the state district court's probable cause ruling. They also sought qualified immunity and dismissal of the City as a defendant on the grounds that Plaintiffs could prove no underlying violation of federal constitutional rights. Because the Court finds that state district court's judgment is not to be given preclusive effect, and the City Defendants have not challenged the adequacy of Plaintiffs' complaint on any other ground, the Court will deny the motion to grant judgment on the pleadings on these claims at this time. A final loose end remains. One of Plaintiffs' arguments in response to the City Defendants' motion was that collateral estoppel would not prevent Plaintiffs from continuing to assert their selective prosecution or enforcement claims under the Equal Protection Clause of the Fourteenth Amendment. The City Defendants opposed that argument by attacking the Plaintiffs' prima facie case of selective prosecution or enforcement instead of answering their contention that a "full and fair" resolution of probable cause would not prevent that claim from going forward. The Court expresses no opinion on whether the City Defendants are correct, but an argument in a responsive pleading was not the proper way to raise the point. The Court will deny the motion to dismiss these claims, and permit the City Defendants to reassert the arguments made in their reply brief at the summary judgment stage, when Plaintiffs will have a fuller opportunity to oppose them. ORDER WHEREFORE, it is hereby ORDERED that the City Defendants' motion for partial judgment on the pleadings or, in the alternative, motion for partial summary judgment (docket no. 36) is DENIED. 16 2:11-cv-10700-SJM-RSW Doc # 52 Filed 02/07/12 Pg 17 of 17 Pg ID 708 SO ORDERED. Dated: February 7, 2012 s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on February 7, 2012, by electronic and/or ordinary mail. Carol Cohron Case Manager 17

=== ORDER DENYING DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT (docket nos. 17, 67) AND DENYING GENTRY’S EX PARTE MOTION TO EXTEND PAGE LIMITS AS MOOT (docket no. 70) ===

2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 1 of 13 Pg ID 1078 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION DEON GENTRY, Plaintiff, v. WAYNE COUNTY, et al., Defendants. / Case No. 10-cv-11714 HONORABLE STEPHEN J. MURPHY, III ORDER DENYING DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT (docket nos. 17, 67) AND DENYING GENTRY’S EX PARTE MOTION TO EXTEND PAGE LIMITS AS MOOT (docket no. 70) Wayne County Sheriff’s Deputy Daniel Carmona shot Deon Gentry in the back during an arrest for suspected domestic violence on April 28, 2007. The bullet completely transected Gentry’s spinal cord and paralyzed him. In this 42 U.S.C. § 1983 action brought against Carmona, the other deputies on the scene, Carmona’s superiors in the Sheriff’s Department, and Wayne County, Gentry claims that Carmona’s actions constituted excessive force under the Fourth Amendment, that Carmona is not entitled to qualified immunity, and that Carmona’s supervisors provided inadequate monitoring and training. Carmona moved for summary judgment on qualified immunity grounds, and the remaining Defendants requested dismissal if Carmona’s motion was granted. The Court held a hearing on the motions on August 24, 2011. It finds that Carmona is not protected by qualified immunity because of genuine disputes in the record over the facts of Gentry’s excessive force claim. Accordingly, it will deny the motions.1 1 The Court will also deny the ex parte motion for leave to file excess pages filed May 24, 2011 as moot. 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 2 of 13 Pg ID 1079 STANDARD OF REVIEW Summary judgment is warranted "if the movant shows there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" for purposes of summary judgment if proof of that fact would establish or refute an essential element of the cause of action or defense. Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984). A dispute over material facts is “genuine” "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In order to show that a fact is, or is not, genuinely disputed, both parties are required to either "cite[ ] to particular parts of materials in the record" or "show[ ] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1). The Court must take care, in evaluating the motion, not to make judgments on the quality of the evidence, because the purpose of summary judgment is to determine whether a triable claim exists. Doe v. Metro. Nashville Public Schools, 133 F.3d 384, 387 (6th Cir. 1998) (“[W]eigh[ing] the evidence . . . is never appropriate at the summary judgment stage.”). BACKGROUND In 2007, Gentry lived with his girlfriend, Surphae Thomas, and her two children at an apartment in Highland Park. He is 6'2" tall and weighed nearly 200 pounds at the time of the incident. Late in the evening on April 27, 2007, Gentry and a friend went out to a nightclub in Pontiac to pick up a pair of tickets to a Detroit Pistons basketball game. Gentry Dep. 117. They spent several hours at the club drinking and smoking marijuana. Id. at 140. The pair left the club at approximately 2:00 AM on April 28, 2007, and Gentry returned to his apartment at 2:30 AM. Id. at 145. 2 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 3 of 13 Pg ID 1080 The parties agree that there was a physical altercation between Gentry and Thomas after he arrived at the apartment. They began arguing about why he had arrived home from the nightclub at such a late hour, and at one point, Thomas began “pushing [Gentry] a little bit.” Id. at 153. Gentry admitted that he shoved Thomas onto the floor, but claims that he had no intent to hurt her and immediately apologized. Id. at 153–54. Thomas claims that after the shove, Gentry pinned her down on the bed in the bedroom they shared, where he choked, punched, and headbutted her in a failed attempt to force sexual advances upon her. Thomas Police Statement, Apr. 28, 2007, ECF No. 21-2; Thomas Dep. 14–16. Gentry denies that he did anything violent or forcible to Thomas beyond shoving her to the ground, and further claims that she consented to sexual intercourse with him prior to falling asleep with him in their bed that night. Gentry Dep. 158. At approximately 10:45 AM, Thomas called 911 and asked the police to remove Gentry from the apartment, alleging domestic violence. Call Log 1, May 3, 2007, ECF No. 21-3. Four Wayne County Sheriff’s Deputies responded to the call — Carmona, Richard Merrow, Sylvester Evans, and William Thompson. Thompson Rep. 1, Apr. 28, 2007, ECF No. 38-1. The deputies arrived on the scene approximately eight minutes later. Call Log at 1. Thomas met them at the front door of the apartment complex and gave her account of what happened the night before. Merrow Dep. 18; Thompson Dep. 15. She also told the officers that Gentry was asleep in her apartment, had no clothing on, and was not carrying a weapon. While Thomas did not recall that she had been bruised or had any physical markings on her as a result of what Gentry did, some of the deputies observed swelling on her forehead and marks left by hands around her neck. Merrow Dep. 18–19; Supp. Rep. 1, Apr. 29, 2007, ECF No. 50-1. Thomas then led the deputies up to her apartment, let them in, and went into another room where her children were staying. 3 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 4 of 13 Pg ID 1081 The deputies entered the bedroom, where Gentry was asleep. They claim they loudly announced their presence in the bedroom once they opened the door. Carmona Dep. 125; Marrow Dep. 24–25. Gentry could not recall such an announcement. Gentry Dep. 164. Carmona pulled the covers off the bed with the intent of placing Gentry, who was naked and unarmed, in handcuffs. Carmona Dep. 129–30. The parties agree that at that moment, Gentry awoke and suddenly jumped up from the bed. Gentry Dep. 168–69. This is consistent with Gentry’s first recollection after waking up of someone grabbing his hands, as if to place him in handcuffs. Id. Although a precise account of what happened next does not exist, it is undisputed that Gentry attempted to escape the police in a violent manner. The deputies testified that Gentry immediately started throwing punches and shoving the officers, and he succeeded in fighting his way out of the bedroom. Carmona Dep. 134–36; Thompson Dep. 33; Police Rep. 1, Apr. 28, 2007, ECF No. 38-1. The deputies were able to tackle him to the ground in the living room of the apartment. Gentry Dep. 170–71, 175–76; Thompson Dep. 37–39. They repeatedly yelled at Gentry to stop resisting arrest, but to no avail. Police Rep. 1; Police Supp. Rep. 1. Gentry managed to elude the deputies’ grasp and dash out of the apartment, entering the common hallway upon which the apartment opened. The police tackled and pepper-sprayed Gentry in the hallway, but he broke free a second time and ran to the door of the back stairwell before the deputies could catch him again. Carmona Dep. 140, 143–44; Merrow Dep. 46–48; Thompson Dep. 35–36, 40; Police Rep. 1. All the while, Gentry “was kicking, thrusting, throwing punches, doing everything he could to get us off of him,” according to the deputies. Merrow Dep. 55. For the most part, Gentry agrees with this summary. Gentry Dep. 170–73, 175–76, 182–84, 195–96. 4 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 5 of 13 Pg ID 1082 Merrow caught Gentry as he reached the stairwell, and the two of them fell down into the stairwell landing. The parties dispute whether Gentry landed on top of Merrow, or whether the two landed side-by-side, with Merrow in a marginally better position. Compare Merrow Dep. 68 (“I ended up being the person on the very bottom of the pile.”) with Gentry Dep. 201 (“[W]e was basically on side by side. . . . More so him over me though, tackled me like.”). Merrow testified that as he tried to push himself up from underneath Gentry, he felt a hand grab his gun. Merrow Dep. 74–82. He jerked to the right in an effort to seize control of the gun, and yelled to the other deputies several times, “he’s got my gun!” Id. at 80. Carmona, Thompson, and Thomas all testified that they heard Merrow yell these words. Thomas Dep. 41–43; Thompson Dep. 62. The deputies, including Carmona, drew weapons and pointed them at Gentry. Carmona is the only deputy who testified that he saw Gentry place his hands on Merrow’s gun. Carmona Dep. 182. Gentry, on the other hand, claims he was simply trying to push himself off of the floor, with his palms flat on the ground, and denies attempting to grab at the gun in any manner. Gentry Dep. 214–15, 276–77. He also denies hearing Merrow yell to the officers about the gun. Id. at 184. Carmona fired a single round into Gentry’s back to diffuse what he perceived as a very serious threat to the other officers. Carmona Dep. 184 (“Q. Why didn’t you try to secure the gun? A. At this point, everything we were doing was not — the threat level escalated to the highest it could get. I was in fear of my life when he said he had the gun, and I responded.”). The bullet transected Gentry’s spinal cord at the T5-T6 vertabrae, rendering him paralyzed. Gentry remains confined to a wheelchair. All four of the deputies involved in the incident were treated for relatively minor injuries resulting from the incident at a local hospital. 5 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 6 of 13 Pg ID 1083 I. Qualified Immunity for Deputy Carmona DISCUSSION Carmona argues that he is entitled to summary judgment on qualified immunity grounds. Because qualified immunity is an affirmative defense, the plaintiff has the burden of showing a defendant is not entitled to it. Armstrong v. City of Melvindale, 432 F.3d 695, 699 (6th Cir. 2006). This inquiry is generally broken down into two questions. See Saucier v. Katz, 533 U.S. 194, 201 (2001), overruled on other grounds, Pearson v. Callahan, 555 U.S. 223 (2009). First, taking the facts in the light most favorable to the injured party, do the facts alleged show that the officer’s conduct violated a constitutional right? Second, was that right “clearly established” at the time of the injury, such that a reasonable person would understand the complained-of conduct was unlawful? The Court may address these questions in any order it sees fit. Pearson, 555 U.S. at 236. If either is answered in the negative, summary judgment is appropriate. In this case, the Court takes up the question of whether or not there was a constitutional violation first. A. Was There a Constitutional Violation? The use of deadly force by state officers when effecting an arrest is subject to review for reasonableness under the Fourth Amendment. See Tennessee v. Garner, 471 U.S. 1, 7 (1985). The Court must engage in “a careful balancing of ‘the nature and quality of the intrusion on the individual’s Fourth Amendment interests’ against the countervailing governmental interests at stake.” Graham v. Connor, 490 U.S. 386, 396 (1989) (quoting Garner, 417 U.S. at 8). Because deadly force, such as the discharge of a firearm, places the suspect’s “‘fundamental interest in his own life’” on one side of the Fourth Amendment ledger, “the countervailing governmental interests must be weighty indeed” to justify its use. Davenport v. Causey, 521 F.3d 544, 551 (6th Cir. 2008) (quoting Garner, 471 U.S. at 9). 6 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 7 of 13 Pg ID 1084 The Court must give “careful attention to the facts and circumstances of each particular case, including the severity of the crime at issue, whether the suspect poses an immediate threat to the safety of the officers or others, and whether he is actively resisting arrest or attempting to evade arrest by flight.” Id. In particular, the Court has to be sensitive to “the fact that police officers are often forced to make split-second judgments — in circumstances that are tense, uncertain, and rapidly evolving.” Id. at 395–97. The struggle in the stairwell is at the crux of this case. Unlike typical excessive force cases, where an officer like Carmona might be “the only surviving eyewitness,” the Court has the benefit of testimony from both Gentry and the deputies about this incident. Scott v. Henrich, 39 F.3d 912, 915 (9th Cir. 1994). Their testimony leads to two very different accounts about what took place in the stairwell: (1) Deputies’ Account: Gentry was straddling Marrow in the stairwell, and grabbed his gun holster. Marrow, rightly panicked, shouted to the other officers that Gentry was trying to take the gun. Carmona saw Gentry’s hand on the gun and shot Gentry to prevent an already dangerous situation involving a resisting, noncompliant suspect from evolving into a deadly one. (2) Gentry’s Account: Marrow was lying next to Gentry, with Marrow perhaps slightly on top of him, after tackling a now-largely subdued Gentry in the stairwell. Gentry began to push himself up, palms flat on the ground, in order to shake off Marrow. At that moment, without a warning by the deputies and without further provocation, Gentry was shot in the back by Carmona. If the record indisputably established that the deputies’ account was correct, the Court would likely be required to enter summary judgment against Gentry on qualified immunity grounds. But the record in this case is not so straightforward. The Court lacks the authority to dismiss a case on qualified immunity grounds when “there is some evidence — more than a mere scintilla of evidence — that [the victim], through his conduct, judged from the perspective of reasonable officers on the scene, did not give the officers probable cause to believe that he posed a serious threat of harm.” Chappel v. City of Cleveland, 585 7 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 8 of 13 Pg ID 1085 F.3d 901, 909 (6th Cir. 2009). Gentry’s deposition directly contradicts the deputies’ account and easily overcomes the “mere scintilla of evidence” barrier. Defendants focus on the “genuine” nature of the factual dispute in this case, rather than on its “materiality,” in their arguments supporting summary judgment. Gentry, they claim, “offers nothing but metaphysical doubt, hypothetical plausibility, and an alleged lack of evidence rather than specific facts and affidavits demonstrating a jury submissible issue.” Defs.’ Rep. 3, July 1, 2011, ECF No. 75 (emphasis removed). They characterize his deposition testimony as “a pure denial of fact supported by nothing in the record and directly contradicted by the testimony and reports of the four deputies.” Id. (emphasis added). This argument is a tacit request to grant summary judgment because the four sworn law enforcement officers are more trustworthy than Gentry, who stands accused of resisting arrest, illegal drug use, and domestic violence. These credibility concerns may be relevant in the future, but the Court is prohibited from considering them now. Nor is this an appropriate setting for reliance upon Scott v. Harris, 550 U.S. 372 (2007). In Scott, the Supreme Court found that a plaintiff did not create a “material” factual dispute by making allegations that flagrantly contradicted an unedited video of the relevant events. Scott, 550 U.S. at 380 (“When opposing stories tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.”). But in this case, the record is not so sharply defined. Gentry's testimony about his own behavior during the incident cannot yet be discounted. Moreover, Carmona is the only deputy to testify that he saw Gentry reach for Marrow’s gun, which precipitated the need for lethal force. Finally, the situation was tumultuous, and each 8 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 9 of 13 Pg ID 1086 witness has a motivation to skew the story in his favor.2 Therefore, the record does not provide the Court with the degree of confidence in Defendants’ version of the story that it would need to completely ignore Gentry’s deposition. The cases Defendants rely upon for their argument inadvertently serve as confirmation of the position the Court adopts here. In those cases, the record either unanimously confirmed the account of the law enforcement officers, or confirmed their stories in all but insignificant details. See Chappell, 585 F.3d at 915–16 (finding no genuine factual dispute that suspect had come out of a closet wielding a knife and was rapidly approaching officers when they opened fire upon him); Davenport, 521 F.3d at 552–54 (granting qualified immunity based on videotape evidence and officer testimony which confirmed defendant had cause to shoot a suspect that was violently beating another officer with closed fists, despite disagreement on certain insignificant aspects of the incident); Untalan v. City of Lorain, 430 F.3d 312, 313–14 (6th Cir. 2005) (conferring qualified immunity on officer who fatally shot a schizophrenic criminal suspect after the suspect successfully stabbed an officer with a knife and was observed preparing to renew his attack); Parks v. Pomeroy, 387 F.3d 949, 957–58 (8th Cir. 2004) (recognizing there was no dispute that defendant officer could have reasonably believed a suspect was reaching for a gun in a dangerous situation when he used lethal force to neutralize the situation); Billington v. Smith, 292 F.3d 1177, 1185 (9th Cir. 2002) (concluding that officer was entitled to qualified immunity when he shot a suspect who was successfully resisting 2 The objectivity of a video recording, vis a vis other forms of evidence, was an important factor in the Scott Court’s decision to grant summary judgment. Scott, 550 U.S. at 378 (noting that the video was an “added wrinkle” in a situation that would normally require adopting “plaintiff’s version of the facts,” and that “[t]here are no allegations or indications that [the] videotape was doctored or altered in any way”). None of the record evidence in this case has similar guarantees of objectivity. 9 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 10 of 13 Pg ID 1087 arrest and attempting to take his gun, despite disagreement on irrelevant details of the incident). None of these cases featured a record where key witnesses disagreed on facts crucial to the plaintiff’s claims and no objective, and no independent, objective evidence was available to confirm or deny the accounts. A case that the Chappell court discussed, but chose not to follow, Yates v. City of Cleveland, 941 F.2d 444 (6th Cir. 1991), provides more pertinent guidance. In Yates, a police officer shot and paralyzed a young man while he was responding to a disturbance at a residence. Yates, 941 F.2d at 445. The officer entered the dimly-lit house without identifying himself. Id. He claimed that four brothers — one of whom was the shooting victim — rushed down the stairs towards him and “knocked him back through” a door, compelling him to fire because he believed he was vulnerable to attack. Id. By contrast, one of the brothers testified that the four of them “froze on the steps” when they saw the officer, that the brother who was shot had tripped on the floor while moving backwards away from the officer, and that he held his hands up and said “don’t shoot” before being shot. Id. The Sixth Circuit affirmed the trial court’s denial of qualified immunity because, among other reasons, there was “a factual dispute surrounded the shooting” and “the reasonableness of the shooting was a jury question.” Id. at 447. Similarly, in this case, the Court is confronted with the contradictory testimony of officers and criminal suspects, and it has no authority to make the credibility determination necessary to favor one account over another. Taking the facts in the light most favorable to the non-moving party, the Court must conclude that it was constitutionally unreasonable for Carmona to shoot Gentry. Prior to reaching the stairwell, the deputies were justified in using force to restrain Gentry, who, though unarmed, was strenuously resisting arrest. See Bouggess v. Mattingly, 482 F.3d 10 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 11 of 13 Pg ID 1088 886, 891 (6th Cir. 2007) (“Merely resisiting arrest by wrestling oneself free from officers and running away would justify the use of some force to restrain the suspect.”). But as the Sixth Circuit held in Bouggess, “[i]t cannot reasonably be contended that physically resisting arrest, without evidence of the employment or drawing of a deadly weapon, and without evidence of any intention on the suspect’s part to seriously harm the officer,” is sufficient to justify the use of lethal force. Id. (holding that a police officer defendant who shot a fleeing criminal suspect in the back “without evidence of the employment or drawing of a deadly weapon” was an unreasonable use of lethal force, and officer was not entitled to qualified immunity). This is a closer case than Bouggess or Yates, because Gentry’s flight appeared to involve some physical abuse to the officers. But Gentry was unclothed, unarmed, and suffering from the effects of the pepper spray by the time he reached the stairwell. He did not pose a serious threat of escape. If, as he claims, he did not attempt to escalate the situation by snatching Merrow’s gun from its holster, Carmona was not justified in shooting him. Accordingly, the Court must answer the question of whether or not there was a constitutional violation in this case, viewing the evidence in the light most favorable to Gentry, in the affirmative. B. Did Carmona Violate Clearly Established Constitutional Standards? To defeat Carmona’s qualified immunity defense, Gentry must show not only that Carmona violated the Constitution, but that he violated “clearly established” constitutional norms. In order to be “clearly established,” “[t]he contours of the right must be sufficiently clear that a reasonable official would understand that what he is doing violates that right.” Anderson v. Creighton, 483 U.S. 635, 640 (1987). 11 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 12 of 13 Pg ID 1089 This is the easier of the two inquiries in this case. Well before April 28, 2007, the Supreme Court and the Sixth Circuit were unanimous in holding that criminal suspects have “‘a right not to be shot unless [they are] perceived to pose a threat to the pursuing officers or to others.’” Yates, 941 F.2d at 447 (quoting Robinson v. Bibb, 840 F.2d 349, 351 (6th Cir. 1988 ; see also Garner, 471 U.S. at 11 (“A police officer may not seize an unarmed, nondangerous suspect by shooting him dead.”). The Court concludes that if this incident took place in the way Gentry described it, Carmona violated a “clearly established” constitutional rule and cannot avoid trial on qualified immunity grounds. II. Constitutional Claims Against Remaining Defendants The argument of the remaining Defendants is simple: presuming that Carmona prevails on his qualified immunity defense, those who supervised him are entitled to summary judgment as well. See Mattox v. City of Forest Park, 183 F.3d 515 (6th Cir. 1999) (“If the plaintiffs have failed to state a claim for violation of a constitutional right at all then [the governmental unit] cannot be held liable for violating that right any more than the individual defendants can.”). Because the Court concludes that Gentry has a triable claim of excessive force against Carmona, it must hold that summary judgment in favor of the remaining Defendants is inappropriate. ORDER WHEREFORE, it is hereby ORDERED that the motions for summary judgment (docket nos. 17 & 67) are DENIED. IT IS FURTHER ORDERED that Gentry’s motion for leave to file excess pages (docket no. 70) is DENIED AS MOOT. SO ORDERED. 12 2:10-cv-11714-SJM-VMM Doc # 78 Filed 09/16/11 Pg 13 of 13 Pg ID 1090 s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: September 16, 2011 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on September 16, 2011, by electronic and/or ordinary mail. Carol Cohron Case Manager 13

=== OPINION AND ORDER CONDITIONALLY GRANTING THE WRIT OF HABEAS CORPUS ===

2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 1 of 30 Pg ID 1716 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION DEMOND HARRIS, Petitioner, v. CASE NO. 07-cv-13034 HONORABLE STEPHEN J. MURPHY, III JOHN PRELESNIK, Respondent. _______________________________/ OPINION AND ORDER CONDITIONALLY GRANTING THE WRIT OF HABEAS CORPUS This matter is pending before the Court on petitioner Demond Harris’s application for the writ of habeas corpus under 28 U.S.C. § 2254. The habeas petition challenges Harris’s state convictions for assault with intent to do great bodily harm less than murder, armed robbery, and possession of a firearm during the commission of a felony ("felony firearm"). Harris claims that his trial attorney provided ineffective assistance by failing to produce certain witnesses at trial and by failing to ask the complaining witness whether he had ever been convicted of a weapons offense. For the reasons stated below, the Court agrees with Harris that his trial attorney was constitutionally ineffective and that the ineffectiveness prejudiced Harris’s defense. Accordingly, it will issue a conditional writ of habeas corpus. 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 2 of 30 Pg ID 1717 A. Harris’ Criminal Trial, Sentence, and Appeal I. BACKGROUND Harris was tried before a jury in a two-day trial on May 19-20, 2003. He was convicted of assault with intent to do great bodily harm, Mich. Comp. Laws §750.84; two counts of armed robbery, Mich. Comp. Laws § 750.529; and one count of felony firearm, Mich. Comp. Laws § 750.227b. He was sentenced to four years, ten months to ten years’ imprisonment on the assault conviction; fifteen years to thirty years imprisonment on the armed robbery counts; and two years imprisonment on the felony firearm conviction. The assault and armed robbery sentences are being served concurrently with each other but consecutively to the mandatory two-year sentence on the felony firearm conviction. Harris’ brief on his appeal to the Michigan Court of Appeals recites the following facts concerning his criminal trial, which were not contested by the state and which are reproduced here for reference: At the trial, Kenneth Hardin, Jr. stated that in January, 2003, he was living with his cousin, Rochelle Gilmer, at 8930 Goodwin Street, Detroit. According to Mr. Hardin, Defendant Demond Harris was Ms. Gilmer’s fiancé and stayed in the home sometimes but not always. (Trial transcript, hereafter referred to as “T” for proceedings held May 20, 2003, followed by a page reference; T 4-5). Mr. Hardin[1] said that some time after midnight January 3, 2003, he was awakened by Mr. Harris shouting at him to get up, “you’re going to the ATM machine,” while poking Mr. Hardin with a shotgun (T 7). The witness said he got up and dressed, gave his ID and ATM card to Mr. Harris and the two went downstairs, where they met Stefan Jones.[2] The three men drove to a bank, with Mr. Hardin in the back seat, the other two in the front, and the shotgun on the floor of the back seat of the car. Hardin 1 Harden is referred to as both “Hardin” and “Harden.” The original spelling is retained. 2 Jones’s first name appears in the record both as “Stephen” and as “Stefan.” The Court will use the spelling “Stefan.” 2 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 3 of 30 Pg ID 1718 said he was given back his ATM card, and told to withdraw $175. When the machine would not allow that large a withdrawal, he was told to, and did, withdraw $100 and give it to Mr. Harris. He was given back his ID, but, according to Mr. Hardin, Mr. Harris kept the ATM card because he was going to come back the next morning and make Mr. Hardin get out more money (T 9-10). Stefan Jones dropped Mr. Hardin off at the Goodwin address. Mr. Hardin called the police, who came to the house and took a report. In order to try to “set up” Harris and Jones so that the police could arrest them, Hardin said he called Mr. Harris at about 9:00 in the morning and was told they would be over in about a half hour. Mr. Hardin said he then called the Detroit police and told them this. He was told to call when the two were there. (T 11-12). Mr. Hardin said that at 11:22 he saw Mr. Harris “creeping” from the backyard toward the house. Hardin called the police on his cell phone; when Mr. Harris saw this, he stuck the shotgun in Hardin’s back and told him to get into the car. Stefan Jones was in the car. The three went to a different branch of Mr. Hardin’s bank and had him withdraw $100 from his savings account at the drive through window (T 14-15). He was taken back to the house on Goodwin and dropped off once again. Mr. Hardin stated that at that point he took a few of his belongings and went to his parents’ house (Id.). He reported this to the police. On January 15, 2003, Mr. Hardin says he went back to the Goodwin house for the first time to get more of his personal property because he got a call from his cousin and he thought Mr. Harris would not be around. (T 18). He arrived on his bicycle and went to the second floor bedroom which had been his. He saw Mr. Harris sitting on his cousin’s bed in her room. He got some books and clothes and “rushed” downstairs. As he did this, Stefan Jones came up to the house, slammed the door and said “Bitch, you ain’t going nowhere.” Hardin said Mr. Harris came down the stairs and that Harris and Jones “slammed” his head into the wall three times (T 18-21). Saying that they were angry for reporting the robberies to the police, Hardin said at trial that the two men beat him up, and, when they got to the kitchen, they both got knives and Harris stabbed Hardin in the back. Jones left, Harris told Hardin to leave, and he did (T 22-25). He rode his bike back to his parents’ home, where the police were called and responded, and Mr. Hardin was taken by EMS to the hospital for stitches. Eventually Mr. Hardin talked to the officer in charge of the case. (Id) On cross examination, Mr. Hardin agreed that the bank statement admitted into evidence showed that he made a withdrawal of $150 on January 3, 2003 before the $100 withdrawal he described as happening just after midnight, although he insisted that the $150 withdrawal was made after he was back at his parents’ house, and was used to pay his January rent. (T 3 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 4 of 30 Pg ID 1719 33). He agreed that none of his things, including a small tv and other items, were missing or disturbed when he returned for them on the 15th. Hardin also admitted that he received no injuries from the assault on January 15th except the cuts from being stabbed (T 76). Detroit police officer Zarosly stated that he took a radio call to 8930 Cameron on January 3, 2003 at about 2:00 a.m. Arriving there and finding no house at that address, he and his partner looked on nearby streets and found 8930 Goodwin (T 96). They spoke to the complainant, Mr. Hardin, at that time. In addition, Investigator Soviak testified that the first report was based on what Mr. Hardin told Officer Zarosly. (T 105). Investigator Soviak stated at trial that he was assigned to both the robbery complaints and assault complaint. He indicated that he made contact with Mr. Harris, who denied the robberies, but said that Mr. Harden did owe him money, and he did take him to the bank to withdraw money to pay him back (T 103-4). The hospital record was received into evidence with no objection (T 114). The defense recalled Mr. Harden and questioned him about the facts as he’d stated them earlier in the trial, highlighting that the first police report indicated that Mr. Harden claimed at the time that Mr. Harris first asked to borrow money, was refused, pointed the shotgun at Haardin (sic) and ran away when Mr. Harden picked up the telephone to call 911 (T 117). Officer Zarosly was recalled as a witness and confirmed that these were the allegations in the first report. (T 120). In closing, defense counsel pointed out that the report made of that first encounter varied dramatically from what Mr. Harden had portrayed in his testimony at trial (T 142-43), and that there was no evidence that the police told Mr. Harden to call back the next day when the perpetrators came back. Defense counsel moved for a directed verdict as to the armed robbery counts and felony firearm counts related to them; the motion was denied (T 123-25). Defendant was sentenced as outlined above. A post-judgment investigation led to the filing of a motion for new trial, based on the yet unsigned affidavit of Stefan Jones. At a hearing held January 30, 2004, the motion was denied, along with appellate defense counsel’s request for appointment of an investigator to find Mr. Jones, who had failed to come to counsel’s office and sign the affidavit (which was based 4 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 5 of 30 Pg ID 1720 on a telephone interview with Mr. Jones by counsel). A second motion, to correct sentence, was granted, where the Michigan Department of Corrections had not made the non-felony firearm sentences concurrent. Defendant-Appellant’s Brief on Appeal, Docket No. 9, Ex. 5 at 26-29. Harris timely appealed to the Michigan Court of Appeals on the ground of ineffective assistance of counsel, based on his attorney's failure to call Stefan Jones as a witness. The Court of Appeals denied Harris’s appeal in an unpublished per curiam opinion dated December 28, 2004. Two judges on the three-judge panel stated that the circumstances surrounding Jones’s affidavit were questionable, and that the record contained no insight from Harris’s trial counsel by way of affidavit or appearance and testimony that could have been compelled through subpoena. The Court of Appeals was unable to conclude that counsel’s performance was deficient, that Harris was denied a substantial defense, or that Harris had overcome the strong presumption that counsel’s performance constituted sound trial strategy. The dissenting judge, Helene N. White, voted to remand the case for an evidentiary hearing pursuant to People v. Ginther, 390 Mich. 436 (1973). Harris filed an application with the Michigan Supreme Court for leave to appeal. His application was denied on September 21, 2005 because the Court was not persuaded that the questions presented should be reviewed by the Court. Two Justices dissented and stated that they would remand for a hearing pursuant to Ginther. See People v. Harris, 474 Mich. 865 (2005) (table). Harris filed a motion for relief from judgment in which he alleged that trial counsel was ineffective for not calling Stefan Jones and Phillip Franklin as witnesses.3 He also 3 While Harris’s motion was pending in the trial court, Harris filed a habeas corpus petition, which was assigned to United States District Judge Paul V. Gadola. 5 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 6 of 30 Pg ID 1721 claimed that appellate counsel was ineffective for failing to raise those issues in the appeal of right. The trial court denied Harris’s motion on the ground that he was precluded from presenting the same argument that he raised in his appeal of right and that he failed to meet the “good cause” and “actual prejudice” standard of Michigan Court Rule 6.508(D)(3). The Michigan Court of Appeals and the Michigan Supreme Court denied leave to appeal the trial court’s decision for failure to establish entitlement to relief under Michigan Court Rule 6.508(D). See People v. Harris, No. 270181 (Mich. Ct. App. Nov. 9, 2006); People v. Harris, 478 Mich. 924 (2006) (table).4 B. The Federal Court Proceeding 1. The Petition and Motions Harris filed a pro se habeas corpus petition on July 20, 2007. He alleged that his trial attorney should have produced Stefan Jones and Phillip Franklin as witnesses and investigated whether Kenneth Harden had been convicted of a crime. The State argued in an answer to the petition that Harris’s allegations lacked merit, and that his argument about Phillip B. Franklin was procedurally defaulted because Harris first presented that claim to the state court on collateral review. Harris subsequently moved to hold his habeas petition in abeyance so that he could pursue additional state court remedies. The Court then appointed counsel, who consulted Judge Gadola dismissed the habeas petition without prejudice because Harris’s motion for relief from judgment was pending in the trial court. See Harris v. Prelesnik, No. 06- 15472 (E.D. Mich. Dec. 20, 2006). 4 Justice Marilyn Kelly voted to grant the application for leave to appeal and to remand the case to the trial court for a Ginther hearing on Harris’s claim of ineffective assistance of counsel. 6 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 7 of 30 Pg ID 1722 with Harris and moved to withdraw the motion for a stay. Counsel also moved for an evidentiary hearing and for leave to file an amended petition. The Court permitted Harris to withdraw his motion for a stay and to amend his petition to add an additional claim that his trial attorney was ineffective for failing to present a defense. The Court also granted Harris’s motion for an evidentiary hearing. 2. The Evidentiary Hearing On August 12, 2010, this Court conducted the evidentiary hearing on Harris’s ineffective-assistance-of-counsel claim. Petitioner called four witnesses at the evidentiary hearing: (1) his trial counsel; (2) Stefan Jones, the witness who Harris alleged was available to testify on Harris’ behalf in state court proceedings; (2) Daphne Harris-Jones, Harris’s sister and the wife of Stefan Jones; and (4) Harris. The State cross-examined Harris’s witnesses, but did not present any witnesses or documentary evidence at the hearing. a. Harris’s Trial Counsel Harris’s trial attorney testified that he had an independent recollection of Mr. Harris’s case. Transcript of August 12, 2010 Evidentiary Hearing (hereafter “Evid. Tr.”) at 7. He testified that he was retained to represent Demond Harris by Daphne Harris-Jones sometime shortly after Harris’s preliminary exam. Id. He also testified that he met with Harris at the Wayne County Jail, and obtained discovery and the preliminary exam transcript. Harris was charged with two separate armed robberies committed on the same day (January 3, 2003), as well as a separate assault with intent to commit great bodily harm less than murder, committed about two weeks later (January 15, 2003). The two cases were joined for trial at the preliminary exam. 7 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 8 of 30 Pg ID 1723 Counsel testified that Harris denied committing the offenses as charged. Evid. Tr. 10. Counsel testified, however, that Harris had told him that he and other individuals with whom he worked had extorted money from the complaining witness on other occasions, when he received disability checks, and that this had gone on for several months, Evid. Tr. 11, but that they did not do so on the date in question. Evid. Tr. 10. Counsel testified that it was his recollection that Harris knew the complaining witness through Harris’s work at a group home. Evid. Tr. 11. Counsel stated that Harris never told him that the victim owed money to Harris. Evid. Tr. 12. Harris had told his counsel that a gun was never involved on any occasion, nor was physical harm ever done to the complainant. Id. Harris also told his counsel that Stefan Jones had participated in extorting money from the victim on previous occasions. Evid. Tr. 34. Counsel agreed that discovery revealed, and Harris confirmed, that Stefan Jones was present at all three of the crimes alleged. Evid. Tr. 13-14. Counsel could not specifically recall interviewing Rochelle Harris or Stefan Jones. Evid. Tr. 17-18. Counsel stated that he believed Mr. Jones “was the man that came in with his, his female relative that engaged me, [and he] denied any and all knowledge of what had taken place. They sat there and they stated that they had no idea what led to these events that had taken place.” Evid. Tr. 29-30. Counsel testified that he “spoke with every witness and every person who was a family member, everyone to came in (sic). Everyone denied any and all knowledge of the events that had taken place in January of, it’s ‘03. Nobody had any idea how these things had taken place and I had inquired of each one.” Evid. Tr. 18. When asked specifically about Mr. Jones’s name showing up in discovery as being present at each of the incidents, counsel reiterated that all witnesses denied knowing 8 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 9 of 30 Pg ID 1724 anything about the facts giving rise to the charges at issue. Evid. Tr. 18. Asked about his strategy in terms of investigation, counsel testified that he believed that the complainant had fabricated some of his statements. Evid. Tr. 18-19. Counsel testified that comparing the statements made in the police reports to the testimony at the preliminary exam created credibility issues relating to the complainant’s testimony. Evid. Tr. 19. Counsel testified that he retained an investigator who contacted the bank where the withdrawals took place, but was unable to come up with any videotape, documentary evidence or witnesses that would support Harris’s case. Evid. Tr. 23-24. Counsel testified that he did not look for witnesses that could testify as to the bank’s description of the events because he “went under the assumption that it would not prove to be beneficial to me so I didn’t want to disprove what appeared to be beneficial to Mr. Harris.” Evid. Tr. 25. Counsel testified that after he investigated the case and reviewed the discovery, he and Harris “discussed the issue of potentially calling witnesses, umm, but he and I spoke about that I think we collectively decided that that was not in his best interest.” Evid. Tr. 16. Counsel testified that he did not present any witnesses “out of concern what those witnesses may say.” Evid. Tr. 23. Counsel could not recall if a plea offer was made, but said that he believed there was a plea offer at the bottom of the guidelines range, although he could not remember specifically. Evid. Tr. 17. Counsel testified that the victim had the “mentality of perhaps a six to eight-year-old child” and it was his “hope that the case would rise and fall based upon the credibility of the complaining witness.” Evid. Tr. 19, 20. Upon cross-examination by the State, counsel testified that he called no defense witnesses because there were no witnesses that could 9 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 10 of 30 Pg ID 1725 testify on behalf of his client that would not inculpate his client in other, uncharged, criminal activity in relation to the complaining witness. Evid. Tr. 36. b..Stefan Jones Jones testified that he was present at the two alleged robberies on January 3, 2003 and at the assault on January 15, 2003. Jones testified that, around midnight on January 3, 2003, Harris called him and asked if Jones could take Harden to the bank. Evid. Tr. 41. Jones stated that Harris told him that Harden owed Harris money and Harden was supposed to withdraw it from the bank that night when money was deposited on his ATM card. Id. Jones stated that it was his understanding that Harden could withdraw the money after midnight. Id. Jones stated that he arrived at the house and both Harris and Harden came out. Id. The three of them then drove to a bank on Twelfth Street. Id. Jones did not see Harris point a gun at Harden. Id. He stated that there was no gun in his vehicle. Id. Jones testified that when they arrived at the bank, Harris and Harden walked up to the ATM. Id. They were there a few minutes before returning to the car, and Jones dropped them off at home. Id. Jones did not observe any coercion or threats of violence. Id. Jones testified that he also drove Harden and Harris to the bank the following morning. Evid. Tr. 42. Jones did not see a weapon in the car and Harris did not threaten Harden in Jones’s presence. Id. Harden did not appear to be intimidated by Harris. Id. Jones testified that he also had knowledge of the events of January 15, 2003, which formed the basis for Harris’s conviction on the charge of assault with the intent to do great bodily harm. Evid. Tr. 42. Jones testified that Harris called him and told him that Harden 10 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 11 of 30 Pg ID 1726 had told the police that he had been robbed by Jones and Harris. Evid. Tr. 43. Jones testified that he went to the Harris house to talk to Harden and Jones and Harden got into an argument. Id. The argument devolved into a fistfight. Id. Jones testified that Harden ran into the kitchen, followed by Jones, and the two continued to argue. Id. Jones testified that Harden then reached behind the refrigerator and pulled out what looked like a rifle. Id. Jones testified that Harris rushed Harden and grabbed him and, at the same time, Jones grabbed a knife off of the sink and ran toward Harden and the three struggled. Id. All three fell, and Harden pulled the trigger of the gun and it made the sound of an air gun. The three were still wrestling and, when they finally got up, Harden said, “I’m cut, I’m cut.” Id. at 44. Jones then said he was leaving, but Harris stayed and helped bandage Harden’s back. Id. Jones testified that he was never interviewed by the police about any of the incidents and was never charged with any crimes in connection with them. Id. Jones also testified that he met petitioner’s counsel on several occasions in connection with the Harris trial. Jones testified that his wife, Daphne Harris-Jones, called an attorney on Harris's behalf, and afterwards the two of them went to the attorney's office to pay him a retainer. Evid. Tr. 44. Jones testified that at that meeting he told Harris’s counsel essentially the same facts that were in his affidavit. Id. Jones denied telling counsel that he knew nothing about the events that took place and denied telling counsel that he could not be a witness. Evid. Tr. 45. Jones testified that counsel for Harris came to the Jones’s house on the first day of every month prior to Harris’s trial to pick up his retainer, which Daphne Harris-Jones was paying in monthly installments. Evid. Tr. 45. On cross-examination, Jones testified that his wife paid Harris’s legal bills because 11 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 12 of 30 Pg ID 1727 she was Harris’s sister. Jones admitted that he did not contact the police and tell them the circumstances leading to Harris’s arrest and trial. He also stated that he was not aware that the statute of limitations had run on any charges that may be asserted against him as a result of these events. Evid. Tr. 47. c. Daphne Harris-Jones Daphne Harris-Jones is the sister of petitioner Demond Harris and the wife of Stefan Jones. She is the person who retained trial counsel to represent Harris in his criminal trial. Evid. Tr. 49. Harris-Jones testified that she retained Harris’s trial counsel because he had previously successfully represented another brother, Kiron. Id. at 49-50. Harris-Jones and her husband went to counsel’s office, paid counsel an initial retainer, set up a monthly installment plan, and spent about an hour discussing the details of the case. Id. at 50. Harris-Jones said that she did not talk about the details of Harris’s case at that meeting because she did not know what was going on, but her husband Stefan Jones talked about the details. Evid. Tr. 51. Harris-Jones testified that what her husband told counsel at that meeting was consistent with Jones’s earlier testimony at the evidentiary hearing. Id. Harris-Jones stated that she spoke to counsel on several occasions after their initial meeting, both on the phone and in person, when counsel would come to the Jones’ house to pick up his retainer. Evid. Tr. 51. Counsel told Harris-Jones that he felt he had the case beat. Id. Harris-Jones specifically asked whether counsel would be calling her husband as a witness, and counsel told her that he did not need Jones as a witness because “he felt that he had the case beat.” Id. Harris-Jones also testified consistently with her earlier affidavit that counsel for Harris had called her on the day of the trial and told her to tell her husband not to come to court that day because “he really had this case in the bag.” Evid. 12 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 13 of 30 Pg ID 1728 Tr. 54. Harris-Jones testified that Jones did in fact go to court that day anyway. Id. Harris-Jones testified that she spoke to counsel once after the trial when he came and picked up his last payment. Evid. Tr. 55. Counsel told Harris-Jones that he was going to file an appeal for Harris. Id. Harris-Jones did not know if counsel did in fact file an appeal. Id. d. Demond Harris Petitioner Demond Harris testified contrary to the testimony of his trial counsel in a number of critical areas. Harris testified that he told his counsel that the complaining witness lived with Harris and his wife, contrary to Harden’s testimony that Harris was engaged to Rochelle Harris, lived elsewhere, and only stayed with Rochelle Harris occasionally. Evid. Tr. 69. Harris testified that he had told his counsel during their initial meeting that the complaining witness owed him money. Evid. Tr. 58-62. Harris testified that he had told his counsel that the complaining witness’s bicycle was stolen and Harris used his wife’s car to help look for the bicycle and to drive him to and from his job and school. Evid. Tr. 58-59. Harris testified that he also told his counsel that Harris and Jones had driven Harden to the bank at Harden’s request to withdraw the money Harden owed Harris. Evid. Tr. 60-62. There was no shotgun involved, and Harris denied ever owning a weapon. Evid. Tr. 63. Harris denied that he had told his counsel that he had coerced money from the complaining witness on previous occasions. Evid. Tr. 62. Harris also testified consistently with Jones about the altercation with the complaining witness that occurred on January 15, 2003. Harris testified that it was Stefan Jones who had the knife on that occasion, rather than Harris, and that Jones only picked up the knife after the complaining witness produced what appeared to be a gun but turned 13 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 14 of 30 Pg ID 1729 out to be an air rifle. Evid. Tr. 65-66. Harris testified that his role in the altercation was limited to trying to separate Jones and Harden, and that Harris was not aware that Jones had the knife. Id. Harris also testified that Harden was injured accidentally in the struggle. Id. at 66. Harris testified that he told all of this to his counsel. Evid. Tr. 67. Contrary to counsel’s testimony, Harris testified that he had never agreed not to have any witnesses at his criminal trial and believed, up to the end of the trial, that Stefan Jones, Rochelle Harris, and Phillip Franklin were going to testify on his behalf at trial. Evid. Tr. 71. Harris also testified that his attorney told him that he could not testify at trial himself because he had prior felony convictions for receiving and concealing stolen property and for uttering and publishing. Evid. Tr. 72. On cross-examination, Harris conceded that he never told the court during the trial that he was unhappy with his trial counsel. Evid. Tr. 75. Harris also conceded that he never told the trial court during sentencing that he had wanted to testify but was not permitted to testify. Evid. Tr. 75. Harris stated that he had asked Rochelle Harris to provide an affidavit, but she has since remarried and Harris believed that her husband did not want her involved. Evid. Tr. 76. Following the hearing, the parties submitted supplemental briefs. The case is now ready for adjudication. III. STANDARD OF REVIEW Pursuant to the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), Harris is entitled to the writ of habeas corpus if he can show that the state court’s adjudication of his claim on the merits– (1) resulted in a decision that was contrary to, or involved an unreasonable 14 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 15 of 30 Pg ID 1730 application of, clearly established Federal law, as determined by the Supreme Court of the United States; or (2) resulted in a decision that was based on an unreasonable determination of the facts in light of the evidence presented in the State court proceeding. 28 U.S.C. § 2254(d). A state court’s decision is “contrary to” clearly established federal law “if the state court arrives at a conclusion opposite to that reached by [the Supreme] Court on a question of law or if the state court decides a case differently than [the Supreme] Court has on a set of materially indistinguishable facts.” Williams v. Taylor, 529 U.S. 362, 412-13 (2000). A state court’s decision is an “unreasonable application of” clearly established federal law “if the state court identifies the correct governing legal principle from [the Supreme] Court’s decisions but unreasonably applies that principle to the facts of the prisoner’s case.” Id. at 413. Significantly, the Sixth Circuit has held that AEDPA's deferential standard of review does not apply when an ineffective assistance of counsel claim is based on substantial new evidence derived from a proceeding in federal district court, subject to very limited exceptions that are not applicable in this case. Brown v. Smith, 551 F.3d 424, 428–30 (6th Cir. 2008). “Simply put, deference under AEDPA is inappropriate, and not required by statute, where significant new evidence relevant to a petitioner's claim becomes available during federal habeas proceedings or the state courts improperly failed to consider significant evidence relevant to that claim.” Id. at 438 (Clay, J., concurring). IV. DISCUSSION 15 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 16 of 30 Pg ID 1731 A. Failure to Investigate and Call Stefan Jones Harris alleges that his trial attorney was ineffective for failing to investigate his case and present an adequate defense. The primary basis for this allegation is trial counsel’s failure to investigate and call Stefan Jones as a defense witness at trial. The Michigan Court of Appeals, in considering this claim, stated that Harris was not denied a substantial defense by the failure to call Jones and that Harris had not overcome the presumption that his attorney’s performance constituted sound trial strategy. Significant new evidence on this claim came to light in the evidentiary hearing in this Court. Consequently, the Court will review Harris’s claim de novo. 1. Legal Framework a. Strickland The Supreme Court’s decision in Strickland v. Washington, 466 U.S. 668 (1984), “qualifies as ‘clearly established Federal law’” for purposes of evaluating ineffective- assistance-of-counsel claims. Williams, 529 U.S. at 391. Pursuant to Strickland, a habeas petitioner must demonstrate that his attorney’s performance was deficient and that the deficient performance prejudiced the defense. Strickland, 466 U.S. at 687. A deficient performance requires showing “that counsel’s representation fell below an objective standard of reasonableness.” Id. at 688. “Judicial scrutiny of counsel's performance must be highly deferential,” and “a court must indulge a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance.” Id. at 689. “[C]ounsel is strongly presumed to have rendered adequate assistance and made all significant decisions in the exercise of reasonable professional judgment.” Id. at 690. Harris must, therefore, overcome a presumption that counsel’s decisions might be 16 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 17 of 30 Pg ID 1732 considered sound trial strategy. Darden v. Wainwright, 477 U.S. 168, 185-87 (1986). The prejudice prong of Strickland’s test for claims of ineffective assistance of counsel requires showing “a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Strickland, 466 U.S. at 694. “Where there is relatively little evidence to support a guilty verdict to begin with (e.g., the uncorroborated testimony of a single witness), the magnitude of errors necessary for a finding of prejudice will be less than where there is greater evidence of guilt.” Brown, 551 F.3d at 434-35 (citing Strickland, 466 U.S. at 696, and Hodge v. Hurley, 426 F.3d 368, 376 (6th Cir. 2005 . b. The Duty to Investigate “The decision to call or not call certain witnesses is exactly the type of strategic decision that the courts expect attorneys to make.” Boykin v. Webb, 541 F.3d 638, 649 (6th Cir. 2008) (collecting cases). The duty to investigate, however, “includes the obligation to investigate all witnesses who may have information concerning his or her client’s guilt or innocence.” Towns v. Smith, 395 F.3d 251, 258 (6th Cir. 2005). “Constitutionally effective counsel must develop trial strategy in the true sense - not what bears a false label of ‘strategy’ - based on what investigation reveals witnesses will actually testify to, not based on what counsel guesses they might say in the absence of a full investigation.” Ramonez v. Berghuis, 490 F.3d 482, 489 (6th Cir. 2007). “Where counsel fails to investigate and interview promising witnesses, and therefore ‘ha[s] no reason to believe they would not be valuable in securing [defendant’s] release,’ counsel’s inaction constitutes negligence, not trial strategy.” Workman v. Tate, 957 F.2d 1339, 1344 (6th Cir. 17 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 18 of 30 Pg ID 1733 1992) (quoting United States ex rel. Cosey v. Wolff, 727 F.2d 656, 658 n.3 (7th Cir. 1984 . “[A] failure to investigate, especially as to key evidence, must be supported by a reasoned and deliberate determination that investigation was not warranted.” O’Hara v. Wigginton, 24 F.3d 823, 828 (6th Cir. 1994). “The focus in failure-to-investigate claims, then, is the reasonableness of the investigation (or lack thereof).” English v. Romanowski, 602 F.3d 714, 726 (6th Cir. 2010) (citing Wiggins v. Smith, 539 U.S. 510, 527 (2003 . “[T]he ultimate inquiry is whether the choice not to conduct additional investigation was “reasonable[ ] in all the circumstances, applying a heavy measure of deference to counsel's judgments.” Bigelow v. Haviland, 576 F.3d 284, 287 (6th Cir. 2009) (quoting Strickland, 466 U.S. at 691). 2. Application a. Deficient Performance Harris contends that his trial attorney should have investigated and called Stefan Jones as a defense witness because Jones would have testified that Harris did not commit any crimes, that he (Jones) and Harden were involved in the dispute, and that Harden wrongly attributed illegal conduct to Harris. Credibility determinations are important here because the testimony of Harris’s trial attorney on this issue differed in a number of critical areas from the testimony of Harris’s other witnesses, namely, Stefan Jones, Daphne Harris-Jones, and Harris himself. The State conceded at the evidentiary hearing that trial counsel was constitutionally ineffective if the Court believed Harris and his witnesses’s testimony. The Court observed the testimony of the witnesses at the evidentiary hearing and considered their credibility in light of the entire record. The Court also considered the 18 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 19 of 30 Pg ID 1734 potential bias of each of the witnesses. All of the witnesses had some incentive to color their testimony. Obviously Harris, Stefan Jones and Daphne Harris-Jones each have an incentive to lie, or color the truth, to have the Court grant the petition. On the other hand, counsel for petitioner also has incentive to lie or color the truth. His professional reputation, and quite possibly his license to practice law, are at stake. The Court concludes in light of the entire record that the testimony of Harris, Stefan Jones, and Daphne Harris-Jones was more credible than the testimony of trial counsel. First, the Court notes that all the witnesses testified in a credible manner. The testimony of Harris, Stefan Jones and Daphne Harris-Jones, however, was far more detailed than the testimony of trial counsel. Harris, Stefan Jones and Daphne Harris-Jones also appeared to be testifying from present, if imperfect, memory of actual events. On the other hand, trial counsel’s testimony lacked details that tend to confirm present recollection of actual events. Second, the Court specifically does not credit the testimony of trial counsel that Stefan Jones told trial counsel that Jones had no knowledge of the events comprising the charges against Harris. The record is replete with references to Jones being present at each of the incidents charged. Harden testified in the preliminary examination that Jones participated in each of the armed robberies and in the assault. His statements to the police also discuss Jones as being involved in at least some of the incidents. Jones’ wife retained counsel, both Jones and Daphne Harris-Jones met with counsel at length and discussed the case with counsel, and both testified credibly that Jones told counsel that he was present at each of the incidents. Jones was clearly a critical witness for the defense, and even a cursory review of the pretrial discovery would reveal this to a competent attorney. The Court thus does not credit counsel’s testimony that he does not remember talking 19 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 20 of 30 Pg ID 1735 specifically about the incidents with Jones, but is certain that all witnesses told him that they had no knowledge of the events charged.5 Third, the Court does not credit trial counsel’s testimony that he conducted a thorough investigation prior to trial. As discussed above, this testimony is undermined by his apparent failure to understand the critical importance of Stefan Jones. Moreover, counsel based his defense largely on bank records as is produced by the government and the inconsistencies he drew between the records and the testimony of the complaining witness, but counsel had no witness to testify to the accuracy of the bank records and apparently no documentary evidence. Fourth, the Court does not credit counsel’s testimony that he and Harris jointly agreed not to call any witnesses. Counsel’s testimony in this regard does not appear to be based on present recollection and is vague. See., e.g., Evid. Tr. 16 (“well we discussed the issue of potentially calling witnesses, umm, but he and I spoke about that I think we collectively decided that that was not in his best interest”). Harris’s testimony to the contrary is more detailed and the Court finds it more credible. The Court also does not credit counsel’s testimony that Harris never told him that Harden owed money to Harris. Harris testified credibly and in detail at the evidentiary hearing as to the amount of money that he claimed Harden owed him and the reason for the debt. Evid. Tr. 58-62. Harris’ story in this regard is consistent with the testimony of 5The State has argued on a number of occasions that defense counsel likely did not call Jones because he would have likely refused to testify given that he himself might face criminal charges. While this is a more plausible reason for the defense’s failure to call Jones, this theory is actually contradicted by counsel’s testimony, which is that Jones flatly denied any knowledge of the crimes. 20 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 21 of 30 Pg ID 1736 Officer Gregory Soviak at Harris’ criminal trial. Officer Soviak testified on direct examination in the prosecution’s case-in-chief that he had contacted Harris after Harden made his initial complaint on January 3, 2003, and that Harris told Soviak on that date “that the complainant, Mr. Harden, owed him money” and that the money Harden withdrew on that date was in repayment of that debt. Trial Tr. 103-04. This information was also presumably in the police report that was admitted into evidence. In fact, Harris’s new counsel at the preliminary examination raised the issue of debt and asked Harden whether the money he withdrew was money owed by Harden to Harris. Prelim. Ex. Tr. 26. In light of the repeated references in the record to a debt owed by Harden and the credible testimony of Harris to the contrary, counsel’s testimony at the evidentiary hearing that Harris never told counsel that Harden owed Harris money is not credible. The Court also does not credit counsel’s testimony that Harris told counsel that Harris and Jones previously and repeatedly extorted money from Harden, just not on the occasion charged. First, Harden himself never stated that this happened, either in the preliminary examination, in his interviews with the police or in his testimony at trial. At the evidentiary hearing, Harris and Jones each testified credibly that this never happened. Furthermore, counsel’s current testimony is at odds with his apparently anguished statement at Harris’ sentencing that “in this Court I have the opportunity to represent very few innocent people and I really believe at this point in time that I’m standing here at sentencing and that Mr. Harris is innocent; not not guilty, but is morally innocent of what he was convicted of. That’s all I’m saying.” June 5, 2003, Sentencing Tr. at 9. This is not a statement of counsel that has been told that his client was regularly extorting money from a disabled man, and the Court finds counsel’s current testimony that such was the case to 21 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 22 of 30 Pg ID 1737 be not credible. There are other instances where the Court finds Harris’s testimony to be more credible than that of trial counsel, but these suffice for the Court to conclude that counsel’s performance at Harris’s criminal trial was deficient and fell beneath the standard of constitutionally effective counsel. And because AEDPA does not apply here on de novo review, the Court need not defer to the state appellate court’s conclusion that counsel’s performance was not deficient. b. Prejudice The Court also finds that the deficient performance prejudiced the defense. The jury heard no evidence of Harris’s defense that the complaining witness owed him money.6 Evidence that Harris was owed money by the victim would tend to negate an essential element of the crime of armed robbery. See People v. Holcomb, 395 Mich. 326, 333 (1975) (evidence that defendant took money that he was entitled to negates intent element required for armed robbery). The jury in Harris’s trial had no opportunity to consider this complete defense to the most serious of the charges against Harris. The jury heard no testimony that Harris claimed not to have owned a gun and that no gun was present at either time Harris took Harden to the bank. As discussed above, the Court finds credible Stefan Jones’ testimony that he was ready, willing and able to testify that, to his knowledge, Harris did not use a firearm, as charged by the State and as testified by Harden. Harris also testified at the evidentiary hearing that he did not use or possess 6The jury did hear Officer Soviak testify during the prosecutor’s case in chief that Harris claimed in their interview that Harden owed Harris money, but the defense never developed that testimony and never referred to it during closing argument. 22 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 23 of 30 Pg ID 1738 a gun, and was told by his counsel that he could not testify because of his prior felony convictions. Evidence that Harris did not possess or use a gun would negate one of the essential elements of the crime of armed robbery and one of the essential elements of the crime of felony firearm. Counsel’s decision not to present any affirmative evidence that Harris did not use a gun falls below the standard for constitutionally effective assistance of counsel. Harris was also tried and convicted of one count of assault with intent to do great bodily harm less than murder relating to the incident on January 15, 2003. The jury heard no testimony that it was Jones, not Harris, who used the knife that wounded Harden on January 15. While use of a weapon is not an essential element of the crime, see People v. Van Diver, 80 Mich. App. 352, 356 (1977), evidence that Harris did not use a knife, and did not know that Jones had a knife, would undermine the State’s evidence on the element of intent. Evidence that Harden had what Harris believed to be a firearm would also have entitled Harris to a jury instruction on self defense. See People v. Williams, No. 238124, 2003 WL 1985255, at *1-2 (Mich. App. April 29, 2003) (unpublished); People v. Johnson, No. 280290, 2008 WL 5002927, at *1 (Mich. App. Nov. 25, 2008) (unpublished). There is also evidence that Harris lived in the house where the assault took place, which would permit him to assert self defense without the necessity of retreating. Mich. Comp. Laws § 768.21c(1). Counsel’s failure to offer any evidence that Harden was armed on January 15, 2003, and his failure to offer any evidence that Harris lived in the same house as the victim, prejudiced his defense, especially given the fact that the State’s case rested on the testimony of the complaining witness. See Brown, 551 F.3d at 434-35. There is at least a reasonable possibility that the result would have been different had counsel investigated 23 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 24 of 30 Pg ID 1739 and called Jones to testify. 3. Conclusion Harris’s trial attorney performed deficiently in failing to investigate and produce Stefan Jones as a defense witness at trial, and, for the reasons given above, the deficient performance prejudiced the defense. Therefore, Harris’s Sixth Amendment right to effective assistance of counsel was violated. The writ of habeas corpus is granted on this claim. B. Failure to Call Phillip Franklin Phillip Franklin stated in an affidavit signed in October of 2005 that, near the end of 2002 and during the beginning of 2003, Harris was transporting Harden to work and school, and that Harden owed Harris money for taking him to work and school. Franklin states that, if called to testify, he would testify to these facts. Harris alleges that trial counsel should have called Phillip Franklin as a defense witness to testify that Kenneth Harden owed Harris money. The State argues that this claim is procedurally defaulted because Harris did not raise the claim on direct review and because the state courts denied leave to appeal pursuant to Michigan Court Rule 6.508(D). 1. Procedural Default “When a habeas petitioner fails to obtain consideration of a claim by a state court, either due to the petitioner's failure to raise that claim before the state courts while state-court remedies are still available or due to a state procedural rule that prevents the state courts from reaching the merits of the petitioner's claim, that claim is procedurally defaulted and may not be considered by the federal court on habeas review. “ Seymour 24 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 25 of 30 Pg ID 1740 v. Walker, 224 F.3d 542, 549-50 (6th Cir. 2000) (citing Wainwright v. Sykes, 433 U.S. 72, 80, 84-87 (1977), and Picard v. Connor, 404 U.S. 270, 275-80 (1971 . “[P]rocedural default results where three elements are satisfied: (1) the petitioner failed to comply with a state procedural rule that is applicable to the petitioner’s claim; (2) the state courts actually enforced the procedural rule in the petitioner’s case; and (3) the procedural forfeiture is an ‘adequate and independent’ state ground foreclosing review of a federal constitutional claim.” Willis v. Smith, 351 F.3d 741, 744 (6th Cir. 2003) (quoting Maupin v. Smith, 785 F.2d 135, 138 (6th Cir. 1986 . All three elements of procedural default were satisfied in this case. First, there is a state procedural rule applicable to Petitioner’s claim. Mich. Ct. R. 6.508(D)(3) generally prohibits state courts from granting relief from judgment if the defendant alleges nonjurisdictional grounds that could have been raised on appeal from the conviction or sentence.7 Petitioner violated this rule by failing to raise his claim about Phillip Franklin on direct review of his conviction. Second, the state courts enforced the rule. The trial court, the Michigan Court of Appeals, and the Michigan Supreme Court cited Rule 6.508(D) when denying relief on collateral review of Harris’s convictions. The state courts’ reliance on Rule 6.508(D) is a sufficient basis for this Court to conclude that the orders were based on a state procedural bar. Burroughs v. Makowski, 282 F.3d 410, 413-14 (6th Cir. 2002). Third, when deciding whether a state procedural ruling is independent and adequate, 7 An exception exists when the defendant demonstrates “good cause for failure to raise such grounds on appeal” and “actual prejudice from the alleged irregularities that support the claim for relief.” Mich. Ct. R. 6.508(D)(3)(a)–(b). 25 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 26 of 30 Pg ID 1741 courts ask “whether the state rule in question was firmly established and regularly followed.” Beard v. Kindler, 130 S. Ct. 612, 617 (2009) (quotation marks and citation omitted). Rule 6.508(D) was adopted in 1989 and therefore was firmly established and regularly followed before Petitioner appealed his convictions. Thus, “the procedural bar set forth in Rule 6.508(D) constitutes an adequate and independent ground on which the Michigan courts may rely in foreclosing review of federal claims.” Akrawi v. Booker, 572 F.3d 252, 261 (6th Cir. 2009) (citing Howard v. Bouchard, 405 F.3d 459, 477 (6th Cir. 2005 . 2. “Cause” and Prejudice Having concluded that all three elements of a procedural default are present, the next question is whether Petitioner can show “cause for the default and actual prejudice as a result of the alleged violation of federal law, or demonstrate that failure to consider the claims will result in a fundamental miscarriage of justice.” Coleman v. Thompson, 501 U.S. 722, 750 (1991). Petitioner alleges that his appellate attorney’s ineffectiveness in not raising his claim in the appeal of right provides the requisite “cause.” Constitutionally ineffective assistance of counsel is “cause” for a procedural default. McCleskey v. Zant, 499 U.S. 467, 494 (1991) (citing Murray v. Carrier, 477 U.S. 478, 488 (1986 . To establish ineffective assistance of trial or appellate counsel, Harris must demonstrate that his attorney’s performance was deficient and that the deficient performance prejudiced the defense. Hoffner v. Bradshaw, __ F.3d __, No. 08-4013, 2010 WL 3724790, at *9 (6th Cir. Sept. 23, 2010) (citing Strickland, 466 U.S. at 687-88, and Smith v. Robbins, 528 U.S. 259, 283 (2000 . To prove deficiency, [the petitioner] must show that “counsel’s representation 26 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 27 of 30 Pg ID 1742 fell below an objective standard of reasonableness.” Id. at 688. Prejudice can be shown by proving “that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Id. at 694. Id. Harris has not established that he told his appellate attorney about Phillip Franklin. The Court therefore finds that appellate counsel was not ineffective for failing to allege on appeal that trial counsel should have called Phillip Franklin as a witness. The Court need not determine whether Harris was prejudiced by the alleged constitutional violation because he has not established “cause.” Tolliver v. Sheets, 594 F.3d 900, 930 n.13 (6th Cir. 2010). The “cause and prejudice” requirement may be overlooked, however, “[i]f a petitioner presents an extraordinary case whereby a constitutional violation resulted in the conviction of one who is actually innocent.” Rust v. Zent, 17 F.3d 155, 162 (6th Cir. 1994) (citing Murray v. Carrier, 477 U.S. 478, 496 (1986 . To be credible, however, “such a claim requires [the] petitioner to support his allegations of constitutional error with new reliable evidence – whether it be exculpatory scientific evidence, trustworthy eyewitness accounts, or critical physical evidence – that was not presented at trial.” Schlup v. Delo, 513 U.S. 298, 324 (1995). Petitioner has not submitted any new and reliable evidence of actual innocence, nor established “cause” for his failure to raise his claim in the appeal of right. Therefore, his claim about Phillip Franklin is procedurally defaulted. C. The Failure to Call Harris, Daphne Harris-Jones, and Rochelle Harris In his post-hearing brief, Harris alleges for the first time that his trial attorney also should have called him (Harris), his sister Daphne Harris-Jones, and his ex-wife Rochelle 27 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 28 of 30 Pg ID 1743 Harris as witnesses at trial. Harris did not exhaust state remedies for these claims and, for the following reason, the Court finds that he no longer has an available state remedy to exhaust. Other than a direct appeal, the only post-conviction remedy available to convicted defendants is to file a motion for relief from judgment in the trial court pursuant to Mich. Ct. R. 6.502. Petitioner has already filed one motion for relief from judgment, and state law prohibits the filing of a second or successive motion unless the defendant alleges a retroactive change in the law or a claim of new evidence. Mich. Ct. R. 6.502(G). Petitioner is not relying on a change in the law or on new evidence. Therefore, he is not eligible to file another motion for relief from judgment in the trial court, and he lacks an available remedy to exhaust. When, as here, a petitioner has failed to fairly present federal claims to the state courts, and a state procedural rule now prohibits the state court from considering them, the claims are considered procedurally defaulted. Martin v. Mitchell, 280 F.3d 594, 603 (6th Cir. 2002). While in such situations the exhaustion requirement is technically satisfied because there are no longer any state remedies available to the petitioner, see Coleman v. Thompson, 501 U.S. 722, 732 (1991), the petitioner’s failure to have the federal claims considered in the state courts results in a procedural default of those claims that bars federal court review. Williams v. Anderson, 460 F.3d 789, 806 (6th Cir. 2006). Pudelski v. Wilson, 576 F.3d 595, 605 (6th Cir. 2009), cert. denied, 130 S. Ct. 3274 (2010). The question becomes whether cause and prejudice exist to excuse the failure to present the claim in the state courts, or whether a miscarriage of justice will result if the Court fails to address the claim. Gray v. Netherland, 518 U.S. 152, 161-62 (1996); Rust, 17 F.3d at 160-62. Harris alleges that his appellate counsel was ineffective for failing to raise his 28 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 29 of 30 Pg ID 1744 procedurally defaulted claim in the appeal of right. However, this claim is itself procedurally defaulted, because Harris never claimed in state court that his appellate attorney was ineffective for not challenging trial counsel’s failure to produce Harris, Daphne Harris-Jones, and Rochelle Harris as witnesses. See Edwards v. Carpenter, 529 U.S. 446, 453 (2000) (holding that “an ineffective-assistance-of-counsel claim asserted as cause for the procedural default of another claim can itself be procedurally defaulted”). Harris has not satisfied the “cause and prejudice” standard for procedurally defaulted claims, and the exception for miscarriages of justice does not apply because Harris has not submitted any new evidence of actual innocence. Cf. Schlup, 513 U.S. at 324 (explaining that a claim of actual innocence must be supported by “new reliable evidence . . . that was not presented at trial”). Therefore, his claim regarding trial counsel’s failure to call him, Daphne Harris-Jones, and Rochelle Harris is procedurally defaulted and barred from substantive review. D. Failure to Investigate a Criminal Charge against Harden Harris alleges in his initial habeas petition, which he filed pro se, that his trial attorney was ineffective for failing to investigate whether Kenneth Harden had ever been convicted of a crime. According to Harris, Harden was arrested before trial on a felony weapon charge. This evidence, alleges Harris, could have been used to impeach Harden with testimony that he was completely unfamiliar with guns. The Court finds it unnecessary to analyze this claim because Harris did not raise it in his pre-hearing supplemental brief, at the evidentiary hearing, or in his post-hearing supplemental brief. The Court considers the claim abandoned. IV. CONCLUSION 29 2:07-cv-13034-SJM-RSW Doc # 44 Filed 09/30/10 Pg 30 of 30 Pg ID 1745 Harris was deprived of effective assistance of counsel by his trial attorney’s failure to call Stefan Jones as a witness. Accordingly, the petition for writ of habeas corpus (Docket No. 1) is CONDITIONALLY GRANTED. The State shall release Harris unless, within ninety days, it takes steps to retry Harris. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: September 30, 2010 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on September 30, 2010, by electronic and/or ordinary mail. s/Alissa Greer Case Manager 30

=== ORDER OVERRULING OBJECTIONS AND AFFIRMING ORDER GRANTING PLAINTIFFS' MOTION TO STRIKE UNDISCLOSED WITNESS STATEMENTS AND ORDER GRANTING IN PART PLAINTIFFS' MOTION TO EXCLUDE DEFENDANTS' EXPERT REPORT (D/E 530), AFFIRMING AND ADOPTING REPORT AND RECOMMENDATION DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT ON LIABILITY AND GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ON THE MERITS (D/E 556) AND AFFIRMING AND ADOPTING REPORT AND RECOMMENDATION GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON GOOD FAITH DEFENSES AND LACK OF WILLFULNESS (D/E 555) ===

2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 1 of 31 Pg ID 14741 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION RYAN C. HENRY, individually and on behalf of similarly situated employees, Case No. 2:04-cv-40346 Plaintiffs, HONORABLE STEPHEN J. MURPHY, III v. QUICKEN LOANS INC., a Michigan corporation, and DANIEL B. GILBERT, personally and individually, Defendants. / ORDER OVERRULING OBJECTIONS AND AFFIRMING ORDER GRANTING PLAINTIFFS' MOTION TO STRIKE UNDISCLOSED WITNESS STATEMENTS AND ORDER GRANTING IN PART PLAINTIFFS' MOTION TO EXCLUDE DEFENDANTS' EXPERT REPORT (D/E 530), AFFIRMING AND ADOPTING REPORT AND RECOMMENDATION DENYING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT ON LIABILITY AND GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ON THE MERITS (D/E 556) AND AFFIRMING AND ADOPTING REPORT AND RECOMMENDATION GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON GOOD FAITH DEFENSES AND LACK OF WILLFULNESS (D/E 555) This is a Fair Labor Standards Act (“FLSA”) overtime collective action brought under 29 U.S.C. § 201 et seq., involving approximately 415 plaintiffs1 who worked as “mortgage bankers” for defendants Quicken Loans Inc. (“Quicken Loans”) and Daniel B. Gilbert. Before the Court are five separate motions resulting in an order and two reports and recommendations by the magistrate judge, and objections by the parties to the order and to both reports and recommendations. Specifically before the Court are defendants' objections (docket entry 534) to an order by Magistrate Judge Pepe (docket entry 530) granting plaintiffs' motion to strike (docket entry 464) and granting in part plaintiffs' motion 1 See D/E 560 at p.1. 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 2 of 31 Pg ID 14742 to exclude the defendants' expert report (docket entry 465). Also before the Court are objections by both the plaintiffs (docket entry 561) and the defendants (docket entry 559) to a report and recommendation by the magistrate judge (docket entry 555) granting in part and denying in part defendants' motion for summary judgment on good faith defenses and lack of willfulness (docket entry 436). Finally, there are objections both by plaintiffs (docket entry 562) and by defendants (docket entry 560) to the magistrate judge's report and recommendation (docket entry 556) denying plaintiffs' motion for partial summary judgment on liability (docket entry 432) and granting in part and denying in part defendants' motion for summary judgment on the merits (docket entry 434). The Court has reviewed the order, the reports and recommendations, the various objections, the relevant transcripts on the record, and all briefs and submissions by the parties, and is now ready to rule. For the reasons set forth below, the Court affirms the magistrate judge's order granting plaintiff's motion to strike undisclosed witness statements and granting in part plaintiffs' motion to exclude (docket entry 530); affirms and adopts the magistrate judge's report and recommendation denying plaintiffs' motion for partial summary judgment on liability and granting in part and denying in part defendants' motion for summary judgment on the merits (docket entry 556), and affirms and adopts the magistrate judge's report and recommendation granting in part and denying in part defendants' motion for summary judgment on good faith defenses and lack of willfulness (docket entry 555). STANDARD OF REVIEW An order by a magistrate judge determining any pretrial matter referred to the magistrate under 28 U.S.C.§ 636(b)(1)(A) must be reconsidered by a district court judge if the magistrate judge's order is clearly erroneous or contrary to law. 28 U.S.C. 2 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 3 of 31 Pg ID 14743 §636(b)(1)(A); Fed. R. Civ. P. 72(a). Here, the defendants challenge the magistrate judge's legal conclusions, and therefore this Court reviews the Order under a de novo standard of review. A district court’s standard of review for a magistrate judge’s report and recommendation under 28 U.S.C. § 636(b)(1)(B) depends upon whether a party files objections. With respect to portions of a Report and Recommendation that no party has objected to, the Court need not undertake any review at all. Thomas v. Arn, 474 U.S. 140, 150 (1985). On the other hand, Federal Rule of Civil Procedure 72(b)(3) provides that the Court “must determine de novo any part of the magistrate judge’s disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.” Fed. R. Civ. P. 72(b)(3). De novo review requires the district court to consider the record that has been developed before the magistrate and to make its own determinations on the basis of the record, without in any way being bound by the magistrate judge's findings. United States v. Raddatz, 447 U.S. 667, 675 (1980). "Issues raised for the first time in objections to the magistrate judge's recommendation are deemed waived," Marshall v. Chater, 75 F.3d 1421, 1426 (10th Cir. 1996); Ward v. United States, No. 98-1872, 208 F.3d 216 (6th Cir. Mar. 13, 2000) (Table, text in WESTLAW), and will not be considered by the Court. FACTS The relevant facts are set forth in the Order at docket number 530 and in the reports and recommendations at docket numbers 555 and 556.2 Briefly, the plaintiffs worked as The defendants argue 2 the recitation of facts in the reports and recommendations largely recite the evidence offered by the plaintiffs in support of their motion for partial summary judgment and in opposition to the defendants' motion for that 3 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 4 of 31 Pg ID 14744 "mortgage loan consultants" or "mortgage bankers" in defendants' "call center" or "web center." It is undisputed that the Quicken mortgage bankers routinely worked in excess of 40 hours per week and that they were not paid overtime compensation for hours worked in excess of 40 hours per week. The defendants assert that the plaintiffs were not entitled to overtime compensation because they fell under the "administrative exemption" to the FLSA due to the nature of the mortgage banker job, which they characterize as "financial services." The plaintiffs assert that the mortgage bankers' jobs do not fall under the administrative exemption because the primary duty of the mortgage bankers involves the sale of mortgages and because the mortgage bankers' duties do not require the exercise of independent judgment and discretion. The plaintiffs have submitted evidence that they argue evidences the "primary duty" of the mortgage bankers as sales. See generally, Report and Recommendation at docket number 556, pages 3-14. The evidence includes the compensation structure of the mortgage bankers, their training, and the defendants' repeated exhortation of the mortgage bankers to "sell, sell, sell." Id. The plaintiffs have also submitted evidence that, they summary judgment on the merits, and fail to recite in detail the voluminous record submitted by the defendants in support of their motions for summary judgment and in opposition to the plaintiffs' motion for summary judgment, which includes about 22 declarations, excerpts from some 10 depositions and various government and internal corporate documents, totaling more than 1000 pages in exhibits to their various objections, as well as the 97 page expert report of Dr. Cohen, all exhibits to that report, and Dr. Cohen's deposition. But the Court is not to list or weigh the evidence offered by the parties in determining whether to grant summary judgment, but rather to determine whether the opposing party has met its burden of coming forward with evidence showing a genuine issue of material fact as to each element of each claim or defense. Recitation of each and every piece of evidence offered by the defendants is unnecessary to determine whether the plaintiffs have met their burden of coming forward with evidence showing genuine issues of fact for trial, and would merely further add to the mountains of paper that have been filed to date in this matter. The Court assuredly has reviewed all the submissions of all parties and all relevant portions of the record and has considered all (except for those that were properly stricken) in deciding the pending motions. 4 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 5 of 31 Pg ID 14745 argue, shows the mortgage bankers' jobs were dictated by the defendants' sophisticated computer programs, guidelines and policies and procedures, and that therefore, they did not exercise the kind of discretion and independent judgment in performing their job duties required for application of the administrative exemption. The plaintiffs have submitted evidence tending to show that the mortgage bankers were required to follow a detailed script called "The Sales Process" in every call, and that the mortgage bankers used sophisticated computer programs that, plaintiffs assert, essentially "chose" the client's mortgage. See generally, Exhibit 42 to Plaintiffs' Motion for Summary Judgment on Liability (docket number 432) (Plaintiffs' declarations). The plaintiffs argue that the use of The Sales Process, along with the advanced computer programs used by the plaintiffs, essentially stripped the plaintiffs of discretion and independent judgment. The defendants, on the other hand, argue that the evidence shows as a matter of law that the nature of the mortgage banker job meets the administrative exemption because the mortgage bankers primarily perform "financial services" duties, which are identified as exempt in 29 C.F.R. § 541.203(b). The defendants have submitted numerous declarations setting forth facts showing that the duties of the mortgage bankers include collecting and analyzing information regarding the customer's income, asset and debts, determining which mortgage products best meet the customers's needs, advising the customer about the advantages and disadvantages of different mortgages, and marketing the various Quicken mortgage products to its clients. See generally Exhibits A through H at docket number 558. The defendants' declarations assert facts that tend to show that the Quicken computer programs and procedures do not eliminate the need for mortgage bankers to exercise discretion and independent judgment, and that the mortgage brokers choose the mortgage products to recommend to the clients, not the computer programs. See id. 5 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 6 of 31 Pg ID 14746 ANALYSIS I. Order Granting Plaintiffs' Motion to Strike Undisclosed Witness Statements and granting in Part Plaintiffs' Motion to Exclude Defendants' Expert Report (dkt.530) The plaintiffs filed a motion to strike undisclosed witness statements and a motion to exclude defendants' expert reports. These motions were referred to the magistrate judge for hearing and determination pursuant to 28 U.S.C. § 636(b)(1)(A). Following hearing, the magistrate judge issued an order dated September 30, 2008 granting the plaintiffs' motion to strike undisclosed witness statements and granting in part the plaintiffs' motion to exclude the defendants' expert report. In his order, the magistrate judge struck (1) the declarations of six individuals who were not named on defendants' preliminary witness list of January 17, 2006 or otherwise disclosed in answers to interrogatories during fact discovery, and (2) 122 sworn job duties statements from current employees that were gathered as data in support of defendants' expert reports, where the employees signing the statements were not identified in defendants' original or supplemental responses to interrogatories and where the statements were not produced in response to plaintiffs' request for "[a]ll statements of witnesses or potential witnesses or persons interviewed in connection with this case . . ." The magistrate judge also found that the expert opinion outlined in the expert report of Dr. Malcolm S. Cohen (1) constituted a legal conclusion on the ultimate issue in the case that was properly to be decided by the Court and/or the jury and (2) did not sufficiently assist the trier of fact to understand the evidence or determine the ultimate fact in issue, and therefore issued an order limiting the use of the expert report for purposes of the pending summary judgment motions and future trial. The defendants have filed objections to the September 30, 2008 order granting plaintiffs' motion to strike and granting in part plaintiffs' motion to exclude defendants' expert report, arguing that the magistrate judge erred in granting both motions. The Court 6 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 7 of 31 Pg ID 14747 has reviewed the briefs and the relevant record and holds that the magistrate judge did not err in granting the motions and will therefore overrule defendants' objections. A. Defendants' Objections to Order Granting Plaintiffs' Motion to Strike Defendants make several objections to the portion of the magistrate's order striking the 122 sworn job duties and six declarations. They argue that by treating the 122 statements as "run of the mill declarations" the magistrate judge overlooked the important statistical function that these statements, which were generated at Dr. Cohen's request and with his extensive involvement, fulfilled in Dr. Cohen's occupational analysis of the mortgage brokers. They argue that the order fails to cite any applicable legal authority in finding that the statements should have been produced during fact discovery. They argue that the magistrate judge considered and credited plaintiffs' vague declarations with no mention of defendants more specific declarations and that his order imposed an unduly harsh penalty on the plaintiffs where a much more appropriate and less draconian remedy was available. The Court finds these objections to be without merit. Rule 37(c)(1) of the Federal Rules of Civil Procedure permits the Court to exclude evidence that a party was required to disclose under Rule 26(a) or (e), unless the party was substantially justified in failing to disclose the evidence or the failure was harmless. The magistrate judge's conclusion that the 122 sworn job statement were fact discovery, and therefore should have been disclosed prior to the deadline for fact discovery, was not clearly erroneous or contrary to law. As to the magistrate judge's exclusion of the six declarants that were not identified prior to the close of fact discovery, the Court is not persuaded by defendants' argument that the six declarants were known to the plaintiffs because they were included on the class notice list which included approximately 3100 current and former loan consultants. The 7 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 8 of 31 Pg ID 14748 Court is also persuaded that the magistrate judge correctly held that the fact that the plaintiffs had not deposed any mortgage bankers prior to the close of discovery was not sufficient to show a complete lack of prejudice to the plaintiff from the failure to disclose the six declarants prior to the close of fact discovery. In sum, the Court finds that the magistrate judge properly applied Rule 37(c)(1) of the Federal Rules of Civil Procedure in granting plaintiffs' motion to strike. B. Defendants' Objections to Order Granting In Part Plaintiffs' Motion to Exclude Defendants' Expert Report As to the portion of the Order limiting the use of some of the testimony of defendants' expert Malcolm S. Cohen, Ph.D., on the grounds that his opinion contained impermissible legal conclusions and would not assist the trier of fact, the defendants object that the magistrate judge's ruling is contrary to law and that it was based on a mistaken and unduly narrow view of the permissible scope of expert testimony under the Federal Rules of Evidence. The defendants also object that the basis on which the magistrate granted the motion, i.e., that Dr. Cohen's opinion would not assist the trier of fact and impermissibly opined on the ultimate legal issue, was not argued by the plaintiffs in their opening brief and was therefore waived. The Court finds these objections to be without merit. First, defendants' objection that the precise grounds for excluding Dr. Cohen's opinion was not raised by the plaintiffs until their reply, and the syllogism used by the magistrate judge to explain his reasoning was not discussed until the hearing, and therefore it is fundamentally unfair to exclude the opinion, is not well taken. The Sixth Circuit has held that a Court may sua sponte exclude evidence that does not comport with evidentiary rules or is otherwise improper. HDM Flugservice GmbH v. Parker Hannifin Corp., 332 F.3d 1025, 1034 (6th Cir. 2003); see also Dugan v. R.J. Corman R. Co., 344 F.3d 662, 670 (7th Cir. 2003) ("even in an adversarial system the 8 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 9 of 31 Pg ID 14749 judge is not merely an umpire" and has duty to secure the basic accuracy of the litigation process). It follows that it is not error for a Court to exclude evidence based on arguments raised in a reply brief, or even those raised by the Court in a hearing on the matter, if the Court is persuaded that the proffered evidence is improper. The objection is therefore overruled. Defendants' second objection to the order limiting the use of Dr. Cohen's testimony is that the magistrate judge's ruling is based on a mistaken and unduly narrow view of the permissible scope of expert testimony under the Federal Rules of Evidence. The defendants argue that the magistrate judge erred in holding that Dr. Cohen's testimony was an inadmissible legal conclusion. The defendants point to Federal Evidence Rule 704(a) which states that "testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the jury." The defendants also argue that the magistrate erred in excluding the evidence as not assisting the trier of fact because, they argue, expert testimony is admissible "so long as it even marginally advances the jury's understanding of the facts by providing additional context or otherwise, and any doubts must be resolved in favor of admissibility." Reply at 3. The Court has reviewed the record and the authorities cited by the defendants in this regard and finds that the magistrate judge correctly applied the law in excluding testimony of Dr. Cohen. The magistrate judge correctly concluded that, insofar as Dr. Cohen would testify that the job functions of mortgage brokers was the same or similar as those of loan officers classified in the Standard Occupational Classification ("SOC") who have "financial services [as] the principle component" of their occupation, and the same or similar as those classified in the Department of Labor's Occupational Informational Network ("O*NET") "who spend the majority of their time engaged in work activities such as 'making decisions and 9 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 10 of 31 Pg ID 14750 solving problems,' 'processing information,' 'analyzing data or information,' 'performing for or working directly with the public,' 'providing customer service,' and 'getting information' in contrast to lesser functions of 'selling or influencing others,'" this conclusion was properly excluded as a legal conclusion on the ultimate issue of the case that is properly to be decided by the court and/or jury. The magistrate judge properly excluded the opinion under Fed. R. Evid. 702 because "[e]xpert testimony is not admissible if it does no more than tell the finder of fact what conclusions to reach." Weinstein's Federal Evidence, § 702.03. The magistrate judge also correctly excluded the Cohen Report on the grounds that it is based largely on evidence that could be reviewed and understood by the trier of fact, including review of company documents describing mortgage banker duties, review of emails of plaintiffs and company managers, analysis of DOL pronouncements regarding mortgage bankers, review of the standard job characteristics of mortgage bankers set forth in the O*NET and SOC systems; a review of depositions of plaintiffs and representatives of Quicken Loans, and a study of the expert reports regarding damages proffered by the plaintiffs. There were two extra sources for Dr. Cohen's report: the 122 sworn job duties statements, which, as discussed above were correctly stricken by the magistrate judge, and six on-site interviews and six observations of demonstrations of the technology used by mortgage bankers. The magistrate judge correctly concluded that these six interviews and six observations constituted just a small part of the study and therefore did not make the report helpful to the trier of fact. The magistrate judge found that Dr. Cohen could properly describe his observations and possibly the interviews at trial without invading the province of the Court but could not testify to any conclusions about the primary duties of the mortgage bankers without invading the province of the Court. This Court finds that the 10 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 11 of 31 Pg ID 14751 magistrate judge was correct in so holding and will therefore overrule the objections and affirm the order granting in part plaintiffs' motion to exclude. II. Report and Recommendation Denying Plaintiffs' Motion for Partial Summary Judgment on Liability and Granting In Part and Denying In Part Defendants' Motion For Summary Judgment on the Merits (Docket Entry 556) The plaintiffs and the defendants have each moved for summary judgment on liability, and each of these motions were referred to the magistrate judge for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). In his report and recommendation on these motions, the magistrate judge recommended that plaintiffs' motion for summary judgment be denied and that defendants' motion for summary judgment be granted in part and denied in part. The report and recommendation correctly noted that, under the FLSA and interpretive regulations, overtime requirements do not apply to "any employee employed in a bona fide ... administrative ... capacity," 29 U.S.C. § 213(a)(1) and that "[a]n employee qualifies for this exemption if (a) s/he meets the salary basis test and minimum compensation; (b) his/her "primary duty" is the performance of office or non-manual work directly related to management policies or general business operations of the employer or the employer's customers; and ([c]) such primary duty includes work requiring the exercise of discretion and independent judgment. See 29 C.F.R. § 541.200." Report and Recommendation at Docket entry 556 ("Merits R&R"), p. 23. The magistrate judge found that the mortgage banker jobs at issue met, as a matter of law, the first prong of the administrative exemption, the salary basis test and minimum compensation, and recommended that summary judgment be granted defendants as to this element. As for the second prong, which requires that the "primary duty" of the employees is to perform non-manual work directly related to management policies or general business operations of the employer or its customers, the magistrate judge recommended that 11 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 12 of 31 Pg ID 14752 summary judgment be denied to both the plaintiffs and the defendants because genuine issues of material fact remain as to the nature and extent of the particular duties and responsibilities of the mortgage bankers. Merits R&R at 42-43. As for the third prong, the "discretion and independent judgment" test, the magistrate judge concluded that the facts in the record are in conflict and genuine issues of material fact remained as to whether the mortgage bankers' work required the exercise of discretion and independent judgment within the meaning of the statute and the regulations, and therefore recommended that summary judgment be denied to both parties on this element as well. The plaintiffs and the defendants have both objected to the Merits R&R on various grounds that will be discussed below. A. Summary Judgment Standard Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). Summary judgment is appropriate if the moving party demonstrates that there is no genuine issue of material fact regarding the existence of an essential element of the nonmoving party's case on which the nonmoving party would bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Martin v. Ohio Turnpike Comm’n, 968 F.2d 606, 608 (6th Cir.1992). In considering a motion for summary judgment, the Court must view the facts and draw all reasonable inferences in a light most favorable to the nonmoving party. 60 Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987). The Court is not required or permitted, however, to judge the evidence or make findings of fact. Id. at 1435-36. The 12 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 13 of 31 Pg ID 14753 moving party has the burden of showing conclusively that no genuine issue of material fact exists. Id. at 1435. A fact is “material” for purposes of summary judgment if proof of that fact would have the effect of establishing or refuting an essential element of the cause of action or a defense advanced by the parties. Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984). A dispute over a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Accordingly, when a reasonable jury could not find that the nonmoving party is entitled to a verdict, there is no genuine issue for trial and summary judgment is appropriate. Id.; Feliciano v. City of Cleveland, 988 F.2d 649, 654 (6th Cir.1993). Once the moving party carries the initial burden of demonstrating that there are no genuine issues of material fact in dispute, the burden shifts to the nonmoving party to present specific facts to prove that there is a genuine issue for trial. Anderson, 477 U.S. at 256. To create a genuine issue of material fact, the nonmoving party must present more than just some evidence of a disputed issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). As the United States Supreme Court has stated, “there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the [nonmoving party's] evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50 (citations omitted); see Celotex, 477 U.S. at 322-23; Matsushita, 475 U.S. at 586-87. Consequently, the nonmoving party must do more than raise some doubt as to the existence of a fact; the nonmoving party must produce evidence that would be sufficient to require submission of the issue to the jury. “The mere existence of a scintilla of evidence 13 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 14 of 31 Pg ID 14754 in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252; see Cox v. Ky. Dep’t of Transp., 53 F.3d 146, 150 (6th Cir.1995). B. Plaintiffs' Objections to the Merits R&R The plaintiffs have objected to the failure of the Merits R&R to recommend summary judgment in plaintiffs' favor on both the second prong and the third prong of the administrative exemption test. The plaintiffs argue that summary judgment should have been entered in their favor because the defendants have the burden of establishing each element of the administrative exemption and because the evidence in the record overwhelmingly established both the "sales" nature of the mortgage bankers' job and the lack of independent judgment and discretion required by the job. The plaintiff's objections fail to persuade the Court that the summary judgment should be granted. The plaintiffs argue that they have produced voluminous documentary evidence showing that the primary duty of the mortgage bankers was "sales" and that all defendants have to counter the volume of plaintiffs' evidence that the primary duty of the mortgage bankers is sales are documents crafted with litigation in mind and "a small handful of statements from former and current mortgage bankers that even the Defendants admit are 'cheerleader' declarations." Plaintiffs' Objections at 14. The role of the Court in determining whether to grant summary judgment, however, is not to weigh the evidence or determine credibility but rather to determine if there are factual issues for trial. The magistrate judge correctly applied this standard to the evidence before him and correctly found that material issues of fact preclude granting summary judgment to plaintiffs. Plaintiffs' objections to the Merits R&R are therefore overruled. 14 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 15 of 31 Pg ID 14755 C. Defendant's Objections to the Merits R&R The defendants have objected to the failure of the magistrate judge to recommend summary judgment in their favor because, they argue, the undisputed evidence shows both that the Quicken Loans mortgage bankers' primary duty was financial services, not sales, and that their duties require the exercise of discretion and independent judgment. They also object to the failure of the magistrate judge to grant sufficient deference to an opinion letter by the Administrator of the Wage and Hour Division of the Department of Labor that opined that mortgage loan officers with similar duties to those of the Quicken Loans mortgage bankers qualified for the administrative exemption to the FLSA. As discussed below, the Court has reviewed the submissions of the parties and the relevant portions of the record and agrees with the magistrate judge that genuine issues of material fact preclude granting summary judgment to the defendants, and the Court will therefore overrule the defendants' objections. 1. Was the mortgage bankers' primary duty sales or financial services? Defendants argue that the undisputed evidence shows that the Quicken Loans mortgage bankers primarily perform financial services duties set forth in 29 C.F.R. § 541.203(b).3 They point to declarations and affidavits in the record in which Quicken employees testify to the nature of the mortgage banker duties, which documents generally track the language of 29 C.F.R. § 541.203(b). Defendants point to evidence showing that 3 The regulation provides: (b) Employees in the financial services industry generally meet the duties requirements for the administrative exemption if their duties include work such as collecting and analyzing information regarding the customer's income, assets, investments or debts; determining which financial products best meet the customer's needs and financial circumstances; advising the customer regarding the advantages and disadvantages of different financial products; and marketing, servicing or promoting the employer's financial products. However, an employee whose primary duty is selling financial products does not qualify for the administrative exemption. 29 C.F.R. § 541.203 15 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 16 of 31 Pg ID 14756 the mortgage bankers spent only 24% of their claimed working time making and receiving telephone calls at work, and point out that, under 29 C.F.R. § 541.700(b), employees who spend more than 50% of their time performing exempt work will generally satisfy the primary duty requirement. They argue that the evidence in the record demonstrates that the sales activity engaged in by the mortgage bankers is secondary to performing complex financial services necessary to a client's decision to enter into a mortgage. The defendants also argue that the Merits R&R ignored facts in the record showing that federal government agencies do not classify mortgage bankers (in general) as sales occupations.4 These objections to the Merits R&R are not supported by the law or in the facts in the record. While the defendants are correct that there is evidence in the record supporting their argument that the "primary duty" of the mortgage brokers was financial services, there is also evidence in the record from which a jury could conclude that the primary duty of the mortgage bankers was selling financial products.5 The occupational classifications that different agencies of the federal government apply to various jobs are not binding on this Court, and the fact that the federal government does not identify "loan officers" as a sales occupation in the Standard Occupational Classification System ("SOC"), and the Occupational Information Network ("O*NET") does not list "selling" or "persuading customers" as a "core" or "supplemental" task of loan officers, does not require summary judgment for defendants. All these arguments go to the weight of the evidence, and the 4 Defendants also argue that the magistrate judge erred in making a legal distinction between the period preceding the revisions of the regulations in 2004 and the regulations after they were revised. See Defendants Objections (docket entry 560), p. 14. The Court finds this objection without merit because the Merits R&R, while stating the language of the regulation before and after revision, explicitly states that the revision did not change the standard, and refused to grant summary judgment for defendant under either version. 5"[A]n employee whose primary duty is selling financial products does not qualify for the administrative exemption." 29 C.F.R. § 541.203(b) 16 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 17 of 31 Pg ID 14757 Court is not charged with determining the weight of the evidence on a summary judgment motion. Finally, the defendants challenge the failure of the magistrate judge to defer to the September 2006 opinion letter of the Administrator of the Wage and Hour Division, which concluded that certain mortgage loan officers were exempt under the administrative exemption. The defendants cite Fazekas v. The Cleveland Clinic Found. Heath Care Ventures, Inc., 204 F.3d 673, 678 (6th Cir. 2000) in support of their argument that the Court is required to grant Chevron deference to the September 2006 opinion letter and also grant summary judgment on that basis. The defendants misread the Fazekas opinion. The Sixth Circuit in Fazekas merely held that between an interpretation set forth in a 1992 written opinion of the Acting Administrator of the Wage and Hour Division and an interpretation set forth in a 1994 internal memorandum, the 1992 written opinion was the "controlling interpretation" of the Secretary, because it was in writing and signed by the (acting) administrator. Fazekas, 204 F.3d at 678. The court then went on to apply Skidmore deference, under which an opinion of the Administrator of the Wage and Hour has persuasive value if well considered and well reasoned. Fazekas, 204 F.3d at 677-78 (citing Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944 .6 Thus, the magistrate judge correctly concluded that the September 2006 opinion 6 To the extent that the Auer and Fazekas opinions can be read to require Chevron deference to an opinion letter by the Administrator of the Wage and Hour Division applying its regulation to the facts of a hypothetical submitted by the employer, the Court submits that they have been overruled by the subsequent Supreme Court opinion of Christensen v. Harris County, 529 U.S. 576 (2000), in which the Court held that "[i]nterpretations such as those contained in opinion letters - like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law - do not warrant Chevron-style deference." Christensen, 529 U.S. at 586. The Christensen opinion was issued three months after Fazekas. 17 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 18 of 31 Pg ID 14758 letter is only entitled to deference commensurate with its power to persuade, akin to that which might be accorded to a district court opinion in a different jurisdiction. The defendants argue that the magistrate judge failed to grant the DOL opinion letter any deference at all. This is incorrect. The magistrate judge found that even if one were to grant deference to the legal opinion contained in the September 2006 letter, there were still material issues of fact precluding summary judgment on whether the Quicken mortgage bankers job duties were factually identical to the loan officers referenced in the opinion letter, and therefore, even if deference were granted, material issues of fact precluded summary judgment. The defendants argue that "federal judges in Sixth Circuit courts (and elsewhere) regularly grant summary judgment for defendants in FLSA exempt status cases based on the regulations and DOL opinion letters." Defendants' Objections to Merits R&R at 17 (emphasis original). Defendants are correct, but that is only where there are no material factual issues. Cf. Schaefer v. Ind. Michigan Power Co., 358 F.3d 394 (6th Cir. 2004) (denying summary judgment where there were genuine factual issues concerning whether the employee actually exercised discretion). Here, there are factual disputes as to the nature of the mortgage bankers duties and whether the job matched the hypothetical duties in the September 2006 opinion letter. On this record, the magistrate judge correctly denied summary judgment to the defendants.7 7 Defendants argue that the correct standard in the Sixth Circuit for determining whether an employee exercises discretion and independent judgment is articulated in Renfro v. Ind. - Mich. Power Co., 497 F.3d 573 (6th Cir. 2007) ("Renfro II"). The Court has reviewed Renfro II and concludes that it is not inconsistent with the magistrate judge's report and recommendation. 18 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 19 of 31 Pg ID 14759 2. Did the mortgage bankers job involve the exercise of discretion and independent judgment with respect to matters of significance? The third factor of the administrative employee exemption is that the employee's "primary duty includes the exercise of discretion and independent judgment with respect to matters of significance." 29 C.F.R. § 541.200(a)(3). "[T]he exercise of discretion and independent judgment involves the comparison and evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered" and "'matters of significance' refers to the level of importance or consequence of the work performed." 29 C.F.R. § 541.202(a). The question of whether a job requires exercise of discretion and independent judgment is to be evaluated "in light of all the facts involved in the particular employment situation in which the question arises." 29 C.F.R. § 541.202(b). The Merits R&R concluded that there were genuine issues of material fact as to whether the mortgage banker's job met this factor of the administrative exemption. The Court agrees. If the finder of fact credits the defendants' version of the realities of the mortgage bankers jobs at Quicken during the relevant time period, it could conclude that the mortgage bankers had exercised discretion in performing their job. See, e.g,. Farner decl., Exhibit A to Defendants' Objections to Merits R&R, ¶ 49 ("reference tools, such as the matrices and LOLA, do not select the appropriate mortgage loan product and finance option that meets the client's individual needs."); ¶ 53 ("Mortgage bankers are expected, and are trained, to analyze . . . risk factors, and then to determine, in their own best judgment, the best course of action."); Mazey decl., Exhibit B to Defendants' Objections to Merits R&R, ¶ 7 ("the analysis undertaken by mortgage bankers is complex."); Nelson decl., Exhibit D to Defendants' Objections to Merits R&R, ¶ 10(e) ("It's at the Mortgage Banker's discretion which mortgage loan program to recommend to a client based on that client's unique financial situation and objectives."). 19 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 20 of 31 Pg ID 14760 On the other hand, if the finder of fact credits the plaintiffs' version of the realities of the mortgage banker jobs at Quicken during the relevant time period, the finder of fact could conclude that the mortgage bankers lacked any discretion in performing the job because the matrix and various computer programs essentially dictated the product that the client was to be offered. See, e.g., Ansari dep., Exhibit N to Defendants' Objections to Merits R&R at 59 ("The most important factors on the template you do not change because they are fixed. You cannot change the score of the client, you cannot change their income, you cannot change their loan to value, their house price, it's fixed, therefore, you're only going to offer products that the template gave you."); McLean dep., Exhibit O to Defendants' Objections to Merits R&R at 35 ("The system would tell us what loans they qualified for so if they didn't qualify, then they didn't qualify. "); See generally, Exhibit 42 to Plaintiff's Motion for Summary Judgment on Liability (Docket number 432) (Plaintiffs' declarations). While the defendants have put substantial evidence in the record showing that the mortgage bankers received training and were licensed in various states, the trier of fact could conclude based upon the plaintiffs' evidence that the mortgage bankers did not use this training to actually evaluate the suitability of clients for various mortgage products, but rather that task was done by the computers and the matrix, leaving no room for the exercise of discretion by individual mortgage bankers. The admissible evidence on this point is in conflict. The Court therefore concludes that summary judgment is not appropriate on the discretion prong of the test. 20 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 21 of 31 Pg ID 14761 III. Report and Recommendation Granting in Part and Denying in Part Defendants' Motion For Summary Judgment on Good Faith Defenses and Lack of Willfulness Defendants have also moved for partial summary judgment on the issue of whether the defendants were entitled to assert the good faith defenses provided by Sections 10 and 11 of the Portal to Portal Act and whether they were entitled to the two-year statute of limitations contained in 29 U.S.C. § 255. Defendants argued that the undisputed facts show that (1) the defendants relied in good faith on the September 2006 Department of Labor opinion letter which opined that mortgage bankers with duties similar to the Quicken mortgage bankers were exempt under the FLSA, and therefore, under Section 10 of the Portal to Portal Act, plaintiffs cannot recover for claims arising after September 8, 2006; (2) the defendants did not willfully violate the FLSA in determining that the mortgage bankers were exempt, and therefore the defendants are entitled to assert the two-year statute of limitations contained in 29 U.S.C. § 255, rather than the three-year statute of limitations that applies in the case of willful violations; and (3) defendants acted in good faith and with reasonable grounds and therefore the Court should deny liquidated damages under Section 11 of the Portal to Portal Act. The magistrate judge issued a report and recommendation on defendants' motion on July 16, 2009 (the "Good Faith R&R") in which he recommended granting in part and denying in part defendants' motion for summary judgment. Specifically, the magistrate judge recommended that the Court (1) grant partial summary judgment on the first issue and find that once the Administrator issued his September 8, 2006 Opinion Letter, the defendants relied on it in good faith and thus face no liability on or after that date; (2) grant partial summary judgment that, during the limitations period of this suit, the plaintiffs cannot prove a willful or reckless violation of the FLSA and that, thus, the two-year limitations period applies; and (3) as to the liquidated damages issue, because liquidated damages 21 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 22 of 31 Pg ID 14762 becomes an issue only if the jury first determines liability, because the material facts are in dispute, and because the statute vests the Court with discretion to award liquidated damages even if the defendants show good faith, the Court should defer ruling on whether to award liquidated damages until after the trial and should deny the defendants' motion without prejudice. Both parties have objected to the Good Faith R&R. The plaintiffs have objected to the magistrate judge's recommendation that the Court grant summary judgment on the first two issues, and the defendants have objected to the magistrate judge's recommendation that the Court deny summary judgment on liquidated damages. The plaintiffs argue that the magistrate judge improperly made a credibility determination, weighed the evidence, and drew inferences from it in defendants' favor to conclude that the defendants were not willful when they ignored the sales nature of the mortgage bankers' job and denied them overtime pay. They argue specifically that based on the overwhelming evidence in the record of the true sales nature of the mortgage bankers' jobs, a reasonable jury could conclude that the defendants' conduct in treating them as exempt was willful, and their purported reliance on the September 2006 Opinion Letter was not in good faith. A. Plaintiffs' Objections to Magistrate Judge's Recommendation that the Court Grant Summary Judgment to Defendants on Section 10 of the Portal to Portal Act and Good Faith Reliance on September 2006 Opinion Letter The Portal to Portal Act creates an affirmative defense in FLSA actions to an employer who pleads and proves that "the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval or interpretation of" the Administrator of the Wage and Hour Division. 29 U.S.C. § 259. On September 8, 2006, the Administrator of the Wage and Hour Division issued an opinion letter in response to a request by the Mortgage Bankers Association ("MBA") 22 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 23 of 31 Pg ID 14763 (the "September 2006 Opinion Letter"). In that letter, the Administrator was asked for an opinion as to whether mortgage loan officers whose job duties were as follows fell under the administrative exemption of the FLSA: You describe the primary duties of the mortgage loan officers as follows. Mortgage loan officers work with the employer's customers to assist them in identifying and securing a mortgage loan that is appropriate for their individual financial circumstances and is designed to help them achieve their financial goals, including home ownership. Mortgage loan officers respond to and follow up on customer inquiries (sometimes referred to as "leads") that come from several sources. The loan officer will collect and analyze the customer's financial information and assess the customer's financial circumstances to determine whether the customer and the property qualify for a particular loan. This involves inquiring into the customer's income, assets, investments, debt, credit history, prior bankruptcies, judgments, and liens, as well as characteristics of the property and similar information. The loan officer will also advise the customer about the risks and benefits of the loan alternatives, including the options and variables involved. Many mortgage banking companies offer multiple mortgage products, resulting in hundreds of loans to choose from, requiring specific analysis, evaluation, and advice from the loan officers. Loan officers must also stay up-to-date on changes in market conditions. Additionally, some loan officers use technological tools to help them serve their customer's needs. For example, loan officers may use computer software to assist in the underwriting process by helping to evaluate whether the customer qualifies for the loan. These products assist the loan officer in communicating a loan prequalification, loan pre-approval, or qualified loan approval. You emphasize, however, that these tools do not substitute for the discretion and judgment required of the loan officer, and the loan officer is responsible for recommending the best products for the customer. September 8, 2006 Opinion Letter, p. 1-2 (Docket number 436, Exhibit A). The hypothetical mortgage loan officers also had sales as a component of their duties, but less than 50% of their working time was spent on "customer-specific persuasive sales activity." Id., p. 2. The September 2006 Opinion Letter concluded that mortgage loan officers would satisfy the administrative exemption of 29 U.S.C. § 213(a)(1). The letter concluded that, based on the description provided, the mortgage loan officers' primary duty would not be sales and that they also exercised sufficient discretion and independent judgment to qualify 23 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 24 of 31 Pg ID 14764 under 29 C.F.R. § 541.200(a). The Administrator noted, however, that if "based on all the facts in a particular case, a mortgage loan officer's primary duty is selling mortgage loans, the mortgage loan officer will not qualify for the administrative exemption." September 2006 Opinion Letter, p. 5, n.3. The magistrate judge recommended in the Good Faith R&R that the Court find that the facts in the record showed that the defendants acted in good faith reliance on this opinion as required by 29 U.S.C. § 259 and therefore recommended that grant partial summary judgment to the defendants as to any claim arising after September 8, 2006. Plaintiffs argue that the magistrate judge erred in recommending that the Court grant summary judgment because, they assert, there are genuine issues of material fact as to whether the job duties of the mortgage bankers was "in conformity with" the September 2006 Opinion Letter and whether the defendants relied in "good faith" on the September 2006 Opinion Letter. Plaintiffs point to evidence in the record showing that the actual job duties of the mortgage bankers had a significant sales component, which was not discussed in the September 2006 Opinion Letter, and they argue that the defendants therefore were not acting in conformity with the September 2006 Opinion Letter in treating the mortgage bankers as exempt from the overtime requirements of the FLSA. The plaintiffs also argue that the magistrate judge inappropriately made credibility determinations in concluding as a matter of law that David Carroll, the person at Quicken responsible for determining the applicability of the FLSA, relied on the September 2006 Opinion Letter in good faith. The Court finds that the plaintiffs' objections to this portion of the Good Faith R&R are without merit. In Marshall v. Baptist Hosp., 668 F.2d 234 (6th Cir. 1981), the Sixth Circuit examined the burden of proof required for an employer to assert the good faith defense 24 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 25 of 31 Pg ID 14765 provided by the Portal to Portal Act. The Marshall court stated that in view of the language and the legislative history of the Portal to Portal Act, "courts should be hesitant to impose retroactive minimum wage liability on employers in the face of an administrative interpretation which the employer could plausibly interpret as insulating him from liability," and that "in close cases we should consider the expectations of the parties and the reasonableness of the employer's actions in light of the administrative interpretation in question." Marshall, 668 F.2d at 238. The Court agrees with the magistrate judge's determination that here, the undisputed facts in the record show that as a matter of law the defendants were aware of and relied upon the September 2006 Opinion Letter, the job tasks of the Quicken mortgage bankers were sufficiently similar to those outlined in the opinion letter to make reliance on that letter plausible, and there is no evidence in the record to rebut the evidence submitted by the defendants that they objectively and subjectively relied in good faith on the opinion letter. The Court notes that the defendants have submitted the declaration of David Carroll, Quicken's Vice President of Administration. Carroll testified that he considered and in good faith relied upon on the September 2006 Opinion Letter in determining that the mortgage bankers met the requirements of the FLSA's administrative exemption. Carroll Decl., ¶¶ 22- 23, Exhibit E, Defendants' Motion For Summary Judgment on Good Faith. This part of the declaration is the only direct evidence of the good faith (or bad faith) of the defendants in the record relating to Quicken's reliance on the September 2006 Opinion Letter. The plaintiffs' main argument in opposition seems to be that they can use the evidence in the record that demonstrates the "sales" nature of the mortgage bankers' job as circumstantial evidence to rebut David Carroll's testimony that he considered the September 2006 Opinion Letter and that he in good faith concluded that the mortgage 25 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 26 of 31 Pg ID 14766 bankers' jobs conformed with the letter -- and that he therefore relied on the letter to continue to treat the mortgage bankers as exempt from the FLSA overtime requirements. As discussed above in the section of this order dealing with the Merits R&R, the magistrate judge concluded, and the Court thinks appropriately so, that there are genuine issues of fact as to whether the administrative exemption applies on the facts of this case. Given that finding, the defendants could as a matter of law "plausibly" rely on the September 2006 Opinion Letter stating that the administrative exemption applied to loan officers that performed similar tasks to the Quicken mortgage bankers whose jobs are at issue here. The plaintiffs have failed to come forward with any affirmative evidence of bad faith to controvert the defendants' evidence of good faith. In light of this, the Court finds that the plaintiffs have failed to carry their burden under Rule 56 of coming forward with specific facts showing a genuine issue for trial on the defendants' affirmative defense that they acted in reliance on and in good faith conformity with the September 2006 Opinion Letter. The Court therefore overrules plaintiff's objections as to this portion of the Good Faith R&R and grants summary judgment to the defendants on the issue. B. Plaintiffs' Objections to Magistrate Judge's Recommendation that the Court Grant Summary Judgment to Defendants that the Violations were not willful or reckless and therefore the Two-Year Limitations Period in 29 U.S.C. §255(a) applies The plaintiffs have also objected to the portion of the Good Faith R&R in which the magistrate judge recommends that the Court find that Quicken's decision to treat the mortgage bankers as exempt was not willful or reckless and that therefore the two-year statute of limitations applies. The Court has reviewed the plaintiffs' objection and the facts in the record and finds that the objections are without merit. The general statute of limitations in FLSA actions is two years. The statute provides, however, that the limitations period is extended to three years when "the cause of action 26 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 27 of 31 Pg ID 14767 aris[es] out of a willful violation." 29 U.S.C. § 255(a). The burden is on the plaintiffs to prove that the defendants either knew or showed reckless disregard for whether they were violating the FLSA by failing to pay the mortgage bankers overtime. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988) In McLaughlin, the Supreme Court addressed the applicable burden of proof for actions asserting willful violations of the FLSA, and found that "[i]f an employer acts reasonably in determining its legal obligation, its action cannot be deemed willful.... If an employer acts unreasonably, but not recklessly, in determining its legal obligations, then ... it should not be ... considered [willful.]" See Hillstrom v. Best Western TLC Hotel, 354 F.3d 27, 33 (1st Cir. 2003) (quoting McLaughlin, 486 U.S. at 135, n.13). The Court found that Congress, in creating the two separate limitations periods, had "intended to draw a significant distinction between ordinary violations and willful violations." McLaughlin, 486 U.S. at 132. Given this precedent, the Court holds that the magistrate judge was correct in finding that the evidence in the record does not, as a matter of law, support a finding of "willful conduct" and that summary judgment is appropriate here. The evidence establishes that Quicken's attorney reviewed the law, reviewed the mortgage bankers duties, consulted with legal counsel, and only afterwards concluded that the mortgage bankers could be classified as exempt from the FLSA overtime requirements. Based on this testimony, and the lack of affirmative evidence of bad faith or willfulness, the Court finds the plaintiffs have failed to carry their burden and therefore the Court finds that the ordinary two-year statute of limitations applies to the conduct alleged in this actions, rather than the three-year statute of limitations that applies in the case of willful or reckless conduct. Plaintiffs rely primarily on the defendants' knowledge of opinion letters issued by lower level department of labor officials in 1999 and 2001, in which the DOL opined that mortgage 27 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 28 of 31 Pg ID 14768 loan officers did not qualify for exempt status under the FLSA, and of Casas v. Conseco Finance Corp., 2002 WL 507059 (D. Minn. 2002). The Canas opinion was an opinion of the federal district court in Minnesota that granted summary judgment to the plaintiffs on FLSA liability for mortgage loan officers whose jobs were substantially similar to those of the Quicken mortgage bankers at issue here. The 1999 opinion letter stated that the hypothetical loan officers would not qualify for the exemption because they were engaged in carrying out the employer's day to day activities rather than determining the overall course and policies of the business and that the position did not appear to require the exercise of discretion and independent judgment. The 2001 opinion letter, issued in response to a request for reconsideration of the May 17, 1999 opinion, modified the earlier opinion letter to the extent that the latter concluded that the hypothetical loan officers' primary duty was the performance of work directly related to the management policies or general business operations of the employer or the employer's customers, rather than sales, but still maintained that the loan officers did not exercise discretion and independent judgment and were therefore not exempt. The plaintiffs argue that in light of these facts, and in light of the magistrate judge's recommendation that this Court deny summary judgment to defendants on liability -- which implicitly recognizes that a reasonable jury could find the defendants violated the FLSA -- and that material factual issues precluded the Court granting summary judgment on the two-year statute of limitations. The Court finds the plaintiffs' objections here to be without merit. The Canas opinion was a trial court opinion in another circuit, and the 1999 and 2001 opinion letters were issued by lower level officials in the Wage and Hour Division and were in some respects distinguishable. Given the heavy burden set by the McLaughlin court to show willfulness, the magistrate judge did not err in finding that no reasonable jury could find the 28 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 29 of 31 Pg ID 14769 defendants's actions willful or reckless for purposes of 29 U.S.C. § 255(a). The Court therefore overrules plaintiffs' objections to this portion of the Good Faith R&R and grants partial summary judgment in accord with its findings. C. Defendants' Objections to the Recommendation of the Magistrate Judge that the Court Deny Summary Judgment to Defendants on Liquidated Damages Finally, the defendants object to the portions of the Good Faith R&R in which the magistrate judge recommends that the Court deny summary judgment to the defendants on the issue of liquidated damages. In addition to paying past-due overtime compensation, the FLSA generally requires an employer who has violated the act to pay an equal amount as liquidated damages. 29 U.S.C. § 216(b). The Act provides, however, that if an employer "shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not in violation of the [FLSA], the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title." 29 U.S.C. §260. The burden on the employer to avoid liquidated damages is "substantial," and if the employer fails to carry its burden of showing "to the satisfaction of the court" that he acted in good faith and with reasonable grounds, the court must award liquidated damages. Martin v. Ind. Mich. Power Supply Co., 381 F.3d 574, 584 (6th Cir. 2004). The defendants moved for summary judgment on all claims for liquidated damages based upon this statutory provision. In the Good Faith R&R, the magistrate judge recommended that the Court deny defendants' motion because (1) liquidated damages becomes an issue only if the jury finds liability, (2) a reasonable jury could conclude on the evidence before the Court that the defendants may have failed to act in good faith prior to the issuance of the September 2006 Opinion Letter, and (3) the Court has the discretion 29 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 30 of 31 Pg ID 14770 to award liquidated damages under 29 U.S.C. § 260 even if it or the jury find the defendants acted in good faith, making summary judgment particularly inappropriate. The Court has reviewed de novo the defendants' objections to the Good Faith R&R in light of the evidence in the record and finds their objections to be without merit. The magistrate judge was correct that there is evidence in the record from which the Court could find that the defendants did not act in good faith in applying the FLSA, at least at some point in time during the limitations period but prior to receiving the September 2006 Opinion Letter. The magistrate judge was also correct in suggesting that the question of defendants' good faith at various points in time would more appropriately be made by the Court after a full trial on the matter, with the opportunity to evaluate the credibility of all the witnesses. Finally, the magistrate also correctly stated that summary judgment is inappropriate here because the Court has the discretion to award liquidated damages even if the defendants carry their "substantial" burden of demonstrating that they acted in good faith and with reasonable grounds. The defendants have cited no authority showing that the Court would abuse its discretion in granting liquidated damages on these facts. The Court will therefore overrule defendants' objections to the portion of the Good Faith R&R recommending that the Court deny summary judgment to the defendants on their defense to liquidated damages and will adopt and affirm that portion of the Good Faith R&R. CONCLUSION ACCORDINGLY, IT IS HEREBY ORDERED that the Order Granting Plaintiffs' Motion to Strike Undisclosed Witness Statements and Order Granting in Part Plaintiffs' Motion to Exclude Defendants' Expert Report (D/E 530) is hereby AFFIRMED and the defendants' objections are OVERRULED; 30 2:04-cv-40346-SJM-MJH Doc # 571 Filed 09/30/09 Pg 31 of 31 Pg ID 14771 IT IS FURTHER ORDERED that the Report and Recommendation Denying Plaintiffs' Motion for Partial Summary Judgment on Liability and Granting in Part and Denying in Part Defendants' Motion for Summary Judgment on the Merits (D/E 556) is hereby ACCEPTED and ADOPTED as the opinion of this Court, the objections by the plaintiffs and the defendants are OVERRULED, Plaintiffs' Motion for Summary Judgment on Liability is DENIED and Defendants' Motion for Summary Judgment on the Merits is GRANTED IN PART AND DENIED IN PART; and IT IS FURTHER ORDERED that the Report and Recommendation Granting in Part and Denying in Part Defendants' Motion for Summary Judgment on Good Faith Defenses and Lack of Willfulness (D/E 555) is ACCEPTED and ADOPTED as the opinion of this Court, the objections thereto by the plaintiffs and the defendants are OVERRULED, and Defendants' Motion for Summary Judgment on Good Faith Defenses and Lack of Willfulness is GRANTED IN PART AND DENIED IN PART. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: September 30, 2009 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on September 30, 2009, by electronic and/or ordinary mail. Alissa Greer Case Manager 31

=== ORDER DENYING DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS (docket no. 17) ===

2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 1 of 26 Pg ID 294 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION LORRAINE HAVARD as Guardian of CHELSIE BARKER, a minor, Case No. 2:06-cv-10449 Plaintiff, HONORABLE STEPHEN J. MURPHY, III v. DEPUTY PUNTUER, DEPUTY GRIFFIN, C. FRAZIER, R.N., jointly and severally, Defendants. / ORDER DENYING DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS (docket no. 17) This is a civil rights case, brought by the guardian of a minor child who was born in the Wayne County jail while her mother was incarcerated there, for injuries sustained during and immediately after the birthing process. The plaintiff alleges that three employees of the jail were indifferent to the minor child’s serious medical needs during the labor and birth, resulting in severe mental retardation and cerebral palsy. This matter comes before the Court on the defendants' motion, which they have styled one for judgment on the pleadings.1 The precise nature of the motion will be discussed shortly. 1The defendants have also filed a “Supplement to Renew Motion for Judgement on the Pleadings and Request to Strike Impertinent Allegation” dated May 25, 2007. This filing essentially restated an earlier argument based upon Roe v. Wade and requested that plaintiff’s claims for conduct that occurred before the child’s birth at 2:00 a.m. on December 3, 1998 be stricken as impertinent pursuant to Fed. R. Civ. P. 12(f). For the reasons stated below, the Court will not grant the defendants’ request to strike allegations. 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 2 of 26 Pg ID 295 PROCEDURAL POSTURE The plaintiff first initiated this suit on January 31, 2006. The plaintiff’s complaint originally asserted claims against Wayne County and the Wayne County Jail, as well as some claims against various John/Jane Doe defendants. The additional Doe defendants, however, have been dismissed and are no longer part of the case. Additionally, the plaintiff originally asserted state law claims of gross negligence and wilful and wanton misconduct against all defendants, but those claims were dismissed by order of Judge Paul V. Gadola dated February 8, 2006. Accordingly, only the plaintiff’s federal law claim remains. On March 27, 2006, the defendants filed a motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief has been granted. The matter was referred for a Report and Recommendation to Magistrate Judge Mona K. Majzoub. The magistrate judge issued a Report and Recommendation, recommending that the motion to dismiss be granted in part and denied in part. The parties then filed objections to the Report and Recommendation. On March 2, 2007, Judge Gadola conducted a hearing on the objections. As a result of the hearing, Judge Gadola denied the motion to dismiss without prejudice and permitted the parties to file an amended complaint. On March 12, 2007, the plaintiff filed an amended complaint. The defendants renewed their motion to dismiss on March 15, 2007. The case was reassigned to the undersigned pursuant to an administrative order on September 4, 2008. The Court then vacated all orders of reference to the magistrate judge. Accordingly, the only motion now before the Court is the defendants’ renewed motion to dismiss the amended complaint filed on March 15, 2007. 2 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 3 of 26 Pg ID 296 Defendants have styled their instant motion one for "judgment on the pleadings" or "summary judgment on the pleadings." Federal Rule of Civil Procedure 12(c) does permit a motion for judgment on the pleadings, but only after the pleadings are closed. As the defendants have yet to file an answer in this case, a 12(c) motion would be premature at this point. The defendants apparently recognize this, and instead bring the instant motion under Rule 12(b)(6), which permits a defendant to move that a complaint be dismissed for failure to state a claim on which relief can be granted. Since a 12(b)(6) motion is proper at this stage of the proceedings, and motions under Rules 12(b)(6) and 12(c) are analyzed under the same legal standard, Sensations, Inc. v. City of Grand Rapids, 526 F. 3d 291, 295 (6th Cir. 2008), the Court will treat the instant motion as one to dismiss under Rule 12(b)(6). In this renewed motion, the defendants argue that the amended complaint should be dismissed because (1) the infant Chelsie Barker was a fetus when the claims allegedly accrued and the unborn are neither “citizens” nor “other persons” within the meaning of the Fourteenth Amendment to the United States Constitution; (2) the plaintiff’s claims are barred by the statute of limitations; and (3) the defendants are protected by the doctrine of qualified immunity. For the reasons that follow, the Court finds the defendants’ arguments to be without merit and denies the renewed motion to dismiss in its entirety. FACTS When considering a motion to dismiss, the complaint is construed in the light most favorable to the plaintiff. Accordingly, the following factual allegations are taken from the plaintiff’s amended complaint. 3 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 4 of 26 Pg ID 297 At all times relevant to the defendants’ motion, Chantrienes Barker was a pregnant inmate at the Wayne County Jail facility in December 1998. Defendants Deputy Puntuer, Deputy Griffin and C. Frazier, R.N. were employed by the Wayne County Jail, and are alleged to have been the only deputies and/or nurses to interact with Chantrienes Barker. The plaintiff alleges that on December 2, 1998, at approximately 3:00 a.m., Barker went into labor. Barker was left in her cell until approximately 9:28 p.m. that same day, at which time she was brought by the Wayne County Jail’s staff to Hutzel Hospital and evaluated by a physician. While at Hutzel Hospital, Barker was electronically monitored, given pain medication, and noted to be dilated to two centimeters. At approximately 11:28 p.m., the physician at Hutzel Hospital ordered that Barker be returned to Wayne County Jail. The plaintiff alleges that once Barker was returned to the Wayne County Jail, she was locked up and not checked on by the defendants despite the fact that she was in labor. While she was confined to her cell, Barker’s labor pains intensified. She notified Deputy Puntuer that she was experiencing contractions and needed medical attention as soon as possible. For over two hours, allegedly none of the defendants checked on Barker or obtained medical care for her. After two hours had passed, Deputy Puntuer brought Barker from her jail cell to the nurses station, but Nurse Frazier did not provide medical care to Barker. Barker was again returned to her cell. Back in her cell, Barker asked her cell mate to alert the defendants that she required immediate medical attention, but the cell mate was unable to get the attention of the defendants. The complaint alleges that at this point all of the inmates on Barker’s cell block 4 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 5 of 26 Pg ID 298 started screaming and banging on toilets and cell bars in an effort to alert the defendants, but that the defendants failed to respond. Eventually, the defendants responded to the noise and asked Barker what was going on. Barker told the defendants that the baby was coming out and that Barker needed immediate medical attention. The defendants ordered Barker to stand up and get dressed, but Barker said that she could not move because the baby was coming out. The defendants placed Barker in a wheelchair and brought her to the nurses station at approximately 1:30 a.m. on September 3, 1998. At the nurses station, Nurse Frazier contacted EMS, but allegedly did not perform a nursing assessment, make a diagnosis, or render any care to Barker. EMS arrived at approximately 1:57 a.m. When EMS arrived, they realized that Barker’s baby was “crowning” or had already crowned. Within minutes, the baby Chelsie Barker, plaintiff in this action, was delivered at the Wayne County Jail. Chelsie Barker was not breathing, and EMS did not have the equipment to properly resuscitate the baby, so EMS transported both Chantrienes and Chelsie Barker to Hutzel Hospital. Upon the arrival in the Hutzel Hospital Emergency Room, the baby was found to be cyanotic, with no respirations or heart rate. She was immediately intubated and CPR was initiated. The plaintiff alleges that as a result of the distress suffered and lack of medical care provided during the labor and delivery process, the baby Chelsie Barker received numerous injuries, including severe mental retardation and severe cerebral palsy. The plaintiff, Lorraine Havard, as guardian of the minor Chelsie Barker, filed the present action. The amended complaint asserts claims based on 42 U.S.C. § 1983, 5 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 6 of 26 Pg ID 299 arguing that the defendants Puntuer, Griffin and Frazier were deliberately indifferent to Chantrienes Barker and Chelsie Barker’s serious medical needs in violation of the rights and privileges under the United States Constitution and various other federal statutes. STANDARD OF REVIEW In reviewing a motion to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must “construe the complaint in the light most favorable to the plaintiff, accept all of the complaint’s factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claim that would entitle him to relief.” Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 512 (6th Cir. 2001). The motion will be granted “only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). ANALYSIS The plaintiff asserts a claim pursuant to 42 U.S.C. § 1983. Section 1983 does not create substantive rights, but serves as the procedural device for enforcing rights given by the United States Constitution and other federal statutes. To state a claim under Section 1983, a plaintiff must allege, first, that a right secured by the Constitution or a federal statute has been violated, and second, that the violation was committed by a person acting under color of state law. West v. Atkins, 487 U.S. 42, 48 (1988). Here, the plaintiff asserts that the actions of the defendants in failing to provide medical attention to Chantrienes Barker during the birth of Chelsie Barker violated Chelsie's rights under the Due Process Clause of the Fourteenth Amendment. See Bell v. Wolfish, 441 U.S. 520 (1979) (Eighth Amendment cruel and unusual punishment clause does not 6 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 7 of 26 Pg ID 300 apply to non-convicted persons, but such persons have analogous protections under the due process clause of the Fourteenth Amendment). The Due Process Clause of the Fourteenth Amendment “imposes a duty on state actors to protect and care for citizens in two situations: first, in custodial and other settings in which the state has limited the individual’s ability to care for themselves; and second, when the state affirmatively places a particular individual in a position of danger the individual would not otherwise have faced.” Gregory v. Rogers, 974 F.2d 1006, 1010 (8th Cir. 1992) (citations omitted). The plaintiff argues, and the Court agrees, that when the injuries alleged occurred, the minor child Chelsie was being held in jail along with her mother and that, therefore, the state actors had a duty to protect and care for Chelsie. The defendants assert three grounds for dismissing the complaint. First, they argue that the complaint should be dismissed because the “unborn” are neither “citizens” nor “other persons” within the meaning of the Fourteenth Amendment, and thus have no rights under that Amendment. Second, they argue that the complaint should be dismissed because the statute of limitations has run on the plaintiff’s claims. Third, they argue that the plaintiff’s complaint should be dismissed because qualified immunity protects the defendants from suit. The Court finds no merit in any of these arguments and will address each in turn. A. Is Chelsie Barker Barred from Recovering Under the Due Process Clause Because She Was not a “Citizen” or “Person” Within the Meaning of the Fourteenth Amendment at the Time of the Alleged Wrongful Acts? The plaintiff’s claims are predicated on 42 U.S.C. § 1983 and the Fourteenth Amendment to the United States Constitution. The defendants argue that the essence of the plaintiff’s claims is that they denied a fetus medical care, to which she was entitled by 7 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 8 of 26 Pg ID 301 the Constitution.2 They argue that, under the Supreme Court decision in Roe v. Wade, 410 U.S. 113 (1973), a fetus is not a “person” within the protection of the Fourteenth Amendment and therefore, the plaintiff cannot state a claim for relief under Section 1983 because all of the allegedly wrongful actions of the defendants occurred prior to Chelsie’s birth. The magistrate judge, in her Report and Recommendation, found that the Supreme Court's decision in Roe v. Wade barred the plaintiff’s claims that arose from any defendant’s conduct before the baby “crowned,” but that a question of fact remained as to whether any injuries were sustained after crowning. No cases were cited to support this distinction, but on that basis, the magistrate judge recommended granting partial summary judgment in defendants’ favor as to the injuries the plaintiff sustained prior to crowning, and conducting fact discovery as to when crowning actually occurred. In Roe v. Wade, the Supreme Court held that “the word ‘person,’ as used in the Fourteenth Amendment, does not include the unborn.” Roe v. Wade, 410 U.S. 113, 158 (1972). That holding was, of course, necessary to the larger holding of the case, because, as the Court noted, if it held otherwise “the fetus’ right to life would then be guaranteed specifically by the [Fourteenth] Amendment.” Id. at 156-57. Nineteen years later, in Planned Parenthood of Southeastern Pennsylvania v. Casey, a more divided Supreme Court failed to give a resounding vote of confidence to the Roe decision, but upheld its “central principle” – that a woman has a right to terminate her pregnancy prior to viability. 2 The defendants also argue that “[b]ecause the fetus was neither a pretrial detainee or convicted offender, arguably, there is no action ‘under color of law.’” Defendants’ Motion For Judgment On The Pleadings, at 3. The defendants have cited no caselaw to support this proposition and, thus, the Court finds the argument meritless. 8 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 9 of 26 Pg ID 302 Planned Parenthood of Southeastern Pennsylvania v. Casey, 505 U.S. 833, 871 (1992). The Casey Court rejected Roe’s trimester framework in favor of an analysis that looked toward whether state regulations of abortion imposed an undue burden on a pre-viability abortion. The decision in no way strengthened or relied upon the Roe analysis of an unborn’s personhood. Thus, while the holding of Roe on the applicability of the Fourteenth Amendment to fetuses is clear and well known, the Supreme Court was not in that case anywhere close to dealing with the issue before this Court; i.e., whether a child may maintain a Section 1983 claim against state actors for injuries sustained during alleged unconstitutional conduct that occurred while the mother was in labor, causing injuries both during and after birth. The question therefore is whether the holding of Roe – that a fetus is not a “person” within the meaning of the Fourteenth Amendment – requires dismissal of a Fourteenth Amendment claim presented by the facts of this case. The defendants cite the cases of Harman v. Daniels, 525 F. Supp. 798 (E.D. Va. 1981) and Romero v. Gonzales Caraballo, 681 F. Supp 123 (D.P.R. 1988) in support of the argument that because the plaintiff was a fetus at the time of the alleged wrongful acts, she cannot sustain a claim under Section 1983. The plaintiff cites the case of Douglas v. Town of Hartford, 542 F. Supp. 1267 (D. Conn. 1982) for the converse proposition. The Court finds these three cases to be the most similar, factually, to the present case. Harman v. Daniels, the main case relied upon by the defendants, involved a claim by an infant and her mother against a police officer for actions taken while the infant plaintiff was in utero. The infant plaintiff, Sarah Beth Harman, claimed that she the defendant officer assaulted her by striking her mother in the stomach, causing injuries which required 9 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 10 of 26 Pg ID 303 substantial and continuing medical care. The defendant officer moved to dismiss the infant’s claim, arguing that the plaintiff was not a “person” or a “citizen” within the meaning of Section 1983 when the acts occurred that caused the alleged deprivation of her constitutional rights. The district court first held that the infant plaintiff’s claim arose at the time of the claimed wrongful act, namely, the alleged punch by the defendant officer and his alleged subsequent refusal to seek medical assistance for the mother. Harman, 525 F. Supp at 800. Relying on Roe v. Wade, the district court held that “the word ‘person’ as used in the Fourteenth Amendment does not include the unborn.” Id. (quoting Roe v. Wade, 410 U.S. at 158). The court reasoned that since Roe, no case had held that a fetus was a “person” entitled to the constitutional protections embodied in the Civil Rights Act. Id. The court in Harman went on to analyze whether Section 1983 provided a cause of action for the unborn despite the court’s conclusion that a fetus was not a “person” for purposes of the Fourteenth Amendment. The court noted that just because a fetus is not constitutionally entitled as a “person” to claim certain remedies or rights, that does not prevent Congress from extending protection to unborn children by appropriate legislation. Nonetheless, the Harman court concluded, based upon its review of recent Congressional acts, Court decisions, and the legislative history of Section 1983, that Congress did not intend to extend rights to the unborn under Section 1983. Id. at 801. The Harman court said that it was in agreement “with the few cases in which courts have determined that the ipse dixit in Roe v. Wade precludes relief for constitutional deprivations sought on behalf of a child in utero under Section 1983.” Id. (citations omitted). The Harman court acknowledged that the plaintiffs in the previously decided cases were in utero at the time 10 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 11 of 26 Pg ID 304 of bringing the action, as compared with the plaintiff before the Harman court who was alive at the time of the action, but stated that “[t]his is a distinction without a difference. The fact that a fetus may be capable of sustaining life in the future does not have any affect upon the availability of remedies under Section 1983.” Id. Finally, the Harman court concluded that the plaintiff was not a “citizen” within the meaning of Section 1983 when the alleged injury occurred, because the Fourteenth Amendment limits citizenship to persons “born . . . in the United States.” Harman, 525 F. Supp. at 801 (quoting Montana v. Rogers, 278 F.2d 68, 72 (7th Cir. 1960 . The district court of Puerto Rico addressed a similar case in Romero v. Gonzales Caraballo, 681 F. Supp. 123 (D. P.R. 1988). Romero involved facts similar to Harman, in which a woman pregnant in her ninth month alleged that she was beaten by police officers in the course of an arrest. The mother alleged various claims of unlawful force and retaliation against the police pursuant to Section 1983, and the son Acevedo, who was born some weeks after the incident, separately brought a Section 1983 action based upon the conduct of the police that occurred while he was in utero. Relying on Roe v. Wade and on Harman, the district court in Romero granted the defendants’ motion to dismiss the infant Acevedo’s claims on the grounds that he was not, on the night in question, a “person” within the meaning of the Fourteenth Amendment. Romero, 681 F. Supp. at 126. On the opposing side of the question is the opinion of the district court in Douglas v. Town of Hartford, 542 F. Supp. 1267 (D. Conn. 1982), the main case relied upon by the plaintiffs. Douglas, like Harman and Romero, involved a pregnant woman who was the alleged victim of police brutality. The adult plaintiff in Douglas was 5½ months pregnant when she was allegedly beaten by police officers. She brought suit under Section 1983 11 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 12 of 26 Pg ID 305 and her infant child, born some months later, also brought a Section 1983 suit for injuries sustained during the alleged beating. The Douglas court did not discuss Roe v. Wade, but noted that several federal courts had ruled that a fetus was not a “person” for purposes of Section 1983. Douglas, 542 F. Supp. at 1270 (citing Guyton v. Philips, 606 F.2d 248 (9th Cir. 1979); Poole v. Endsley, 371 F. Supp. 1379 (N.D. Fla. 1974); and McGarvey v. Magee- Womens Hosp., 340 F. Supp. 751 (W.D. Pa. 1972 . Contrary to these case, the court in Douglas held that “recent and well-established trends in the state courts, including those in Connecticut, have expanded the legal rights of the viable fetus in a wide variety of contexts,” id. (citations omitted), and found that “accordingly, the Court denies the defendants’ request to dismiss the claims” of the infant plaintiff. Id. A fair criticism of the opinion in Douglas, and one stated in Romero, is that the court in Douglas did not go through a detailed analysis of section 1983, and based its decision on advances in state court decisions rather than federal law. Harman is unquestionably more detailed and rigorous in its analysis. On the other hand, the Douglas court was correct in its discussion of the developing protection of fetuses in state legislatures. Currently, at least 36 states (including Michigan) have fetal homicide laws. See National Conference of State Legislatures, Fetal Homicide, Updated June 2008 (http://www.ncsl.org/programs/health/fethom.htm); M.C.L. § 600.2922a (wrongful or negligent act against pregnant individual resulting in miscarriage, stillbirth, or injury or death of embryo or fetus). Congress has also passed a federal version of such a law with the Unborn Victims of Violence Act of 2004, which recognizes a “child in utero” as a legal victim, if he or she is injured or killed during the commission of any of over 60 listed federal 12 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 13 of 26 Pg ID 306 crimes of violence. 18 U.S.C. § 1841. The bill explicitly exempts abortion from the reach of the act. 18 U.S.C. § 1841(c)(1). None of these cases constitute binding precedent in this Court (except for Roe v. Wade, to the extent that it is applicable). Further, even if the cases analyzed above did constitute binding precedent, they all involved allegations of unlawful force and injury inflicted upon a fetus weeks or months prior to birth. Here, on the other hand, the injury occurred during and after birth. Therefore, none of the cited cases are dispositive of the question presently before the Court. In fact, there is no case that is precisely on point, dealing with injuries sustained by a child during and after labor and delivery brought under Section 1983 and asserted by the surviving child. In light of what allegedly happened in this case – injuries inflicted on a fetus, and then infant, throughout and immediately after the birthing process – the Court finds precedent regarding the legal status of a pre-born human to be of highly limited value. Fortunately, however, the Court need not engage in legal line drawing, because there are far narrower grounds upon which the plaintiff’s claim may be sustained. One case not cited by either party, but which the Court finds highly persuasive, is the Ninth Circuit’s opinion in Crumpton v. Gates, 947 F.2d 1418 (9th Cir. 1991). Crumpton was a suit brought by the child of a man killed by an alleged LAPD “death squad.” Although the plaintiff in Crumpton was a six-year-old child at the time of the suit, he was a two-month old fetus at the time his father was killed. The defendants moved for summary judgment on the grounds that the plaintiff was a fetus at the time his father was killed, and thus not a “person” as contemplated by 42 U.S.C. § 1983. The district court granted the defendants’ motion, relying upon Roe v. Wade. 13 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 14 of 26 Pg ID 307 But the Ninth Circuit reversed. It found that the cases holding that a fetus is not a person for purposes of Section 1983 were not dispositive of the case before it, which involved the question of whether a six-year-old child may assert a claim under Section 1983 for the killing of his father while he was in utero. In reaching its holding, the Crumpton court distinguished Harman and Romero on the grounds that those cases involved physical injuries to fetuses while they were in the womb, and in each case “the plaintiff’s injury was complete at the moment the wrongful act, a physical attack, injured the fetus.” Crumpton, 947 F.2d at 1422. The court found that in Crumpton, the injury – the loss of a father’s companionship – did not occur immediately upon the commission of the wrongful act, i.e., the father’s killing. Instead, the court found that because a child has familial relationships only after birth, it necessarily follows that a child’s right to familial relationships exists only after birth. Id. Thus, the court found, “although the wrongful act occurred while Crumpton was in utero, the injury or suffering which flowed from that wrongful act occurred postnatally.” Id. The Ninth Circuit disapproved of the reasoning of Harman, but found that, even under that reasoning, the plaintiff could sue, because he was a “person” when the injury occurred, namely, at his birth. Id. The Ninth Circuit also noted that such reasoning is consistent with common law tort principles, a reasoning method which the Supreme Court has endorsed in establishing the elements of Section 1983 claims. Id. at 1423.3 This 3 The Crumpton court also noted in a footnote that, because the courts have held that a right of action does not arise until a party has a right to enforce its claim, it had “grave doubts” about the conclusion of the Harman court that “infants injured in utero and later born alive simply must bear their federally cognizable afflictions without hope of remedy.” Crumpton, 947 F.2d at 1424, n.6. The court did not reach the precise issue, however, because it found that even under the Harman rationale, the plaintiff in Crumpton could still state a claim for relief. 14 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 15 of 26 Pg ID 308 Court finds the reasoning of the Ninth Circuit persuasive and fully consistent with precedent in the Sixth Circuit, and further finds the reasoning of the Harman court to be inapposite. Federal law governs when a claim accrues for purposes of Section 1983 actions: Aspects of § 1983 which are not governed by reference to state law are governed by federal rules conforming in general to common-law tort principles. See Heck [v. Humphrey, 512 U.S. 477,] 483; Carey v. Piphus, 435 U.S. 247, 257-258 (1978). Under those principles, it is “the standard rule that [accrual occurs] when the plaintiff has ‘a complete and present cause of action.’ ” Bay Area Laundry and Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., 522 U.S. 192, 201 (1997) (quoting Rawlings v. Ray, 312 U.S. 96, 98 (1941 , that is, when “the plaintiff can file suit and obtain relief,” Bay Area Laundry, supra, at 201. Wallace v. Kato, 127 S. Ct. 1091, 1095 (U.S. 2007). According to Black’s Law Dictionary, to “accrue” means “[t]o come into existence as an enforceable claim or right; to arise.” Under the Wallace standard, Chelsie Barker was unquestionably a “person” within the Fourteenth Amendment at the time her claims accrued. The decision of the Harman court, which essentially looked at the time of the wrongful act, is inconsistent with this precedent and therefore not authoritative here. Applying the reasoning of Crumpton to the facts of this case, and viewing the allegations in the light most favorable to the plaintiff, the Court finds that the complaint alleges facts that show that the injury to Chelsie Barker occurred during the process of and in the time period following her birth. The complaint alleges that the defendants ignored Chantrienes Barker’s pleas for medical attention for some time. The complaint alleges that the defendants ignored and refused to attend to the mother for over two hours while she was in active labor. The complaint alleges that when the mother was brought to the jail’s nurses station at approximately 1:30 a.m., the mother had already passed her mucous plug, her water had broken, and she had bloody show. When EMS arrived at 15 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 16 of 26 Pg ID 309 approximately 1:57 a.m., the defendants realized the baby was crowning or had already crowned and, within minutes, the baby was delivered at the Wayne County Jail. At that time, EMS noted that the baby was not breathing. Since they did not have the equipment to properly resuscitate the baby, they transported both the mother and the baby to Hutzel Hospital. When the infant baby Chelsie Barker arrived at Hutzel she was cyanotic and had no respiration or heartbeat. She was intubated and CPR was initiated. The plaintiff alleges that as a result of these events, Chelsie Barker suffered perinatal asphyxia and hypoxic- ischemic encephalopathy and has consequently sustained severe injuries including severe mental retardation and severe cerebral palsy. Applying the ruling in Crumpton to these facts, the complaint states a claim that Barker’s injuries were sustained during the time period following her birth, while she was transported to the hospital, and that the cause of her injuries was the lack of adequate medical care during and immediately after birth. The defendants had sufficient warning that the child was on the way and did not get her the medical care she needed immediately prior to, during, and after her birth. On these facts, a jury could conclude that because of the defendants’ deliberate indifference to Chelsie Barker’s serious medical needs, she was not in a hospital at the time of her birth, the physicians and the facilities of the hospital were not available to resuscitate her when she was born, and she was not resuscitated until she arrived at the hospital. The Court also finds that the plaintiff has also stated a claim for those injuries which Chelsie Barker may have received during the delivery process prior to birth. Because the injury was a continuous one, and given the Court’s finding that she is entitled to maintain 16 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 17 of 26 Pg ID 310 an action under Section 1983, there is no principled reason to distinguish those injuries sustained before the birth from those sustained after birth. B. May the Plaintiff Recover for Injuries Alleged or Does the Relevant Statute Of Limitations Bar Her Claims? The defendants argue that although the Michigan three-year statute of limitations applies to the plaintiff’s claims, the tolling provisions of M.C.L. § 600.5851 should not be applied to permit the plaintiff’s claims here, which were brought more than three years after the date of the alleged injury, and that the plaintiff’s claims are therefore time barred. There is no specific limitations periods for claims brought under Section 1983. Rather, federal courts borrow a limitations period from analogous state statutes. Collard v. Kentucky Bd. of Nursing, 896 F. 2d 179, 180 (6th Cir. 1985). In looking for an applicable statute of limitations, Section 1983 claims are to be characterized as personal injury actions. Owens v. Okure, 488 U.S. 235 (1989). Because this suit was filed in the United States District Court for the Eastern District of Michigan, all the parties are Michigan residents, and the alleged misconduct occurred entirely within Michigan, the Court must look to Michigan law to determine the statute of limitations. The Sixth Circuit has held that when state law provides multiple statutes of limitations for personal injury actions, courts faced with the proper limitation period for a Section 1983 claim should borrow the general or residual statute for personal injury actions. Collard, 896 F.2d at 181. Therefore, the correct limitation period here is the one found in M.C.L. § 600.5805(10), which provides that general personal injury actions may be brought with three years after the time of death or injury. Carroll v. Wilkerson, 782 F.2d 44, 44 (6th 17 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 18 of 26 Pg ID 311 Cir. 1986) (holding Section 1983 claims brought in Michigan are subject to the three-year statute of limitations for personal injury claims). If the Court were to apply only the three-year statute of limitations, the plaintiff’s claims would be time barred because her suit was filed more than three years after Chelsie’s injuries, all of which she apparently sustained on the day of her birth. In both personal injury and medical malpractice cases, however, Michigan applies an infancy tolling period. M.C.L. § 600.5851. Section 600.5851 provides in relevant part that “if the person entitled to . . . bring an action under this act [the Revised Judicature Act of 1961] is under 18 years of age or insane at the time the claim accrues, the person or those claiming under the person shall have 1 year after the disability is removed . . . to . . . bring the action although the period of limitations has run.” M.C.L. § 600.5851. The Court finds that M.C.L. § 600.5851 applies in this case and tolls the running of the statute of limitations during Chelsie’s infancy. Therefore, the Court concludes that the present action was timely filed. The Supreme Court has held that when the federal courts borrow a state statute of limitations in § 1983 actions , they also borrow the forum state’s tolling rules. Hardin v. Straub, 490 U.S. 536 (1989) (holding that, in a Section 1983 case filed in Michigan, M.C.L. § 600.5851(1) applied to toll the limitation period for a prisoner lawsuit until he was released from prison). M.C.L. § 600.5851(1) was amended in 1994 to remove such tolling as to prisoners, but kept tolling as to infants and the insane. In support of their argument that M.C.L. § 600.5851 does not apply to toll the plaintiff’s claim during her infancy, the defendants rely on Cameron v. Auto Club Ins. Ass'n., 263 Mich. App. 95 (2004), aff’d in part and vacated in part, 476 Mich. 55 (2006). The Michigan Court of Appeals noted in Cameron a 1993 amendment to M.C.L. § 600.5851, which 18 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 19 of 26 Pg ID 312 changed the language of the tolling provision to apply to persons “entitled to bring an action under this act” from the previous language which applied the tolling provision to “any action.” The court of appeals held that since a No Fault action is not brought under the Revised Judicature Act, the tolling provision of M.C.L. § 600.5851 did not apply to toll the plaintiff’s claims during his infancy. The Court finds this argument to be without merit. First, the plaintiff correctly notes that the portion of the Michigan Court of Appeals decision relied upon by the defendants in this action was vacated by the Michigan Supreme Court. On appeal, the court did not reach the issue of whether the infancy tolling period of M.C.L. § 600.5851(1) applied to claims brought under the No Fault Act and its separate statute of limitations, because it found that the plaintiff’s claims in Cameron were barred on the narrower ground that the infancy tolling period did not apply to the one-year-back rule of the No Fault statute. See Cameron, 476 Mich. 55, 64 (2006). Further, as the plaintiff correctly points out, the three- year Michigan statute of limitations applicable to the present § 1983 action is found in the Revised Judicature Act itself, unlike the No Fault statute of limitations addressed by the Court of Appeals in Cameron. Thus, Cameron is simply not applicable to this case. Finally, the defendants argue that because plaintiff’s minor was not a “person” within the meaning of the tolling statute or Section 1983, the tolling provision does not create a substantive right that otherwise did not exist. It is not clear exactly what the defendants are arguing here, but to the extent they are arguing that the tolling statute does not apply because Chelsie was not born when her injuries occurred, the Court rejects the argument. The Court has already noted that the plaintiff has alleged several injuries to Chelsie Barker 19 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 20 of 26 Pg ID 313 that occurred after her birth. Additionally, Michigan courts consistently apply tolling statutes to toll personal injury claims based on prenatal injuries, and this Court will do likewise. For these reasons, the Court finds that the plaintiff’s claims in the present action are not barred by the statute of limitations. C. Does Qualified Immunity Protect Defendants’ Conduct Because Chelsie Barker's Rights Were Not Clearly Established At The Time Of The Alleged Wrongful Conduct? The defendants assert that the doctrine of qualified immunity requires that the plaintiff’s claims be dismissed for two reasons. First, the defendants argue even if Chelsie Barker did have constitutional rights before her birth, because Roe has not been overruled, they had no reason to believe so at the time her injuries occurred. Additionally, the defendants argue that there was no constitutional violation because the Due Process Clause required that the defendants summon medical assistance, not provide it, and the defendants did summon EMS. The issue of whether qualified immunity applies is a question of law. Champion v. Outlook Nashville, Inc., 380 F.3d 893, 900 (6th Cir. 2004). “Qualified immunity provides ‘that government officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.’” Id. (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982 . Because qualified immunity is "an immunity from suit rather than a mere defense to liability . . . it is effectively lost if a case is erroneously permitted to go to trial." Mitchell v. Forsyth, 472 U.S. 511, 526 (1985) (emphasis deleted). Indeed, we have made clear that the "driving force" behind creation of the qualified immunity doctrine was a desire to ensure that "'insubstantial claims' against government officials [will] be resolved prior to discovery." Anderson v. Creighton, 483 U.S. 635, 640, n. 2 (1987). Accordingly, "we repeatedly 20 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 21 of 26 Pg ID 314 have stressed the importance of resolving immunity questions at the earliest possible stage in litigation." Hunter v. Bryant, 502 U.S. 224, 227 (1991) (per curiam). Pearson v. Callahan, No. 07-751, slip op. at 6 (U.S. Jan. 21, 2009). The Sixth Circuit applies a two-step inquiry in determining whether qualified immunity applies: "(1) whether, considering the allegations in a light most favorable to the party injured, a constitutional right has been violated, and (2) whether that right was clearly established." Estate of Carter v. City of Detroit, 408 F.3d 305, 310-11 (6th Cir. 2005) (citing Saucier v. Katz, 533 U.S. 194, 201, 121 S. Ct. 2151, 150 L. Ed. 2d 272 (2001 .4 When a defendant asserts a defense of qualified immunity, a court should rule on the issue early in the proceedings so that the costs and burdens of a trial will be avoided if the issue is dispositive. Saucier v. Katz, 533 U.S. 194, 200 (2001). This is because the defense of qualified immunity “is ‘an immunity from suit rather than a mere defense to liability; and like an absolute immunity, it is effectively lost if a case is erroneously permitted to go to trial.’” Id. (quoting Mitchell v. Forsyth, 472 U.S. 511, 526 (1985) (emphasis original). The Supreme Court has held, in the Eighth Amendment context, that “deliberate indifference to serious medical needs of prisoners constitutes the ‘unnecessary and wanton infliction of pain’ proscribed by the Eighth Amendment.” Estelle v. Gamble, 429 U.S. 97, 104 (1976) (citation omitted). “This is true whether the indifference is manifested by prison doctors in their response to the prisoner’s need or by prison guards intentionally denying 4 The United States Supreme Court in Pearson v. Callahan recently ruled that the Saucier two-step procedure is no longer mandatory. Pearson v. Callahan, No. 07-751 (U.S. Jan. 21, 2009). The Supreme Court recognized, however, that "it is often beneficial" to courts. Id. at 11. Here, the Court finds that the Saucier procedure "facilitate[s] the fair and efficient disposition" of this case. Id. at 17. 21 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 22 of 26 Pg ID 315 or delaying access to medical care or intentionally interfering with the treatment once prescribed.” Id. at 104-05 (footnotes omitted). An Eighth Amendment claim has two components, one objective and one subjective. To satisfy the objective component, the plaintiff must allege that the medical need at issue is “sufficiently serious.” Farmer v. Brennan, 511 U.S. 825, 834 (1994). To satisfy the subjective component, the plaintiff must allege facts which, if true, would show that the official being sued subjectively perceived facts from which to infer substantial risk to the prisoner, that he did in fact draw the inference, and that he then disregarded that risk. Farmer, 511 U.S. at 837. Emphasizing the subjective nature of this inquiry, the Supreme Court has noted that “an official's failure to alleviate a significant risk that he should have perceived but did not, while no cause for commendation, cannot under our cases be condemned as the infliction of punishment.” Id. at 838 (emphasis added). Comstock v. McCrary , 273 F.3d 693, 702 -703 (6th Cir. 2001). As discussed above, the same standard applies under the Fourteenth Amendment to the plaintiff’s claims here. The plaintiff bears the “onerous burden of proving the official’s subjective knowledge” but “this element is subject to proof by ‘the usual ways,’” including proof by circumstantial evidence. Id. at 703 (quoting Farmer, 511 U.S. at 842). In the present case, the complaint alleges facts that could be construed to constitute deliberate indifference to Chelsie’s serious medical needs. The complaint alleges that the infant’s mother was in active labor, crying out for help, to the knowledge of the defendants, and was left by the defendants in her cell for two hours; that the paramedics did not arrive until the infant was being delivered and did not have the equipment to resuscitate the child when she was delivered; and that all of this resulted in severe injuries to the infant. These facts establish both the objective and subjective components of the test. Thus, the allegations establish a violation of a constitutional right. Therefore, the only questions remaining are whether “the violation involved a clearly established constitutional right of which a reasonable person would have known” and 22 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 23 of 26 Pg ID 316 whether “the plaintiff has offered sufficient evidence to indicate that what the official allegedly did was objectively unreasonable in light of the clearly established constitutional rights.” Feathers, 319 F.3d at 848. The Court finds that the complaint alleges facts upon which the Court could conclude that the defendants violated Chelsie Barker’s clearly established constitutional rights by being deliberately indifferent to her serious medical needs. The complaint alleged facts which, if believed, establish that the defendants refused to act in the face of various warnings that Chelsie Barker was in the process of being born in the Wayne County Jail without medical attention, after her mother had been in labor for almost 24 hours. A factfinder may infer that a prison official knew of a substantial risk “from the very fact that the risk was obvious.” Farmer v. Brennan, 511 U.S. 825, 842 (1994). A reasonable person would have known that failing to obtain medical care in that situation constituted deliberate indifference to Chelsie Barker’s serious medical needs, some of which were ongoing and others of which were obviously imminent. A constitutional right can be clearly established even if there is no case involving fundamentally or materially similar facts. Hope v. Pelzer, 536 U.S. 730, 741 (2002). The responsibility to care for helpless infants who have newly come into the world – including the duty to care for them by anticipation, during the birthing process – need not be articulated through nuanced jurisprudence in order to be accessible to a reasonable person. It may be true that the legal consequences of injuries to children in utero are obscured by a judicially created haze. But, as Crumpton noted, no such confusion exists with respect to injuries sustained by an already-born child as a result of actions taken prior to birth. In this situation, basic human emotion as well as the applicable precedents would 23 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 24 of 26 Pg ID 317 compel a reasonable person to conclude that the conduct of the prison officials in this case was in clear violation of the constitutional rights of the soon-to-be newborn child. Thus, the Court finds that the defendants’ argument – that because Chelsie Barker was a fetus at the time of the defendants’ actions, her rights not to have her serious medical needs ignored by jail officials were not “clearly established” – is without merit. The Supreme Court has held that a defendant cannot avoid a finding of deliberate indifference by arguing that, “although he was aware of an obvious, substantial risk to inmate safety,” he or she did not know the exact source of the plaintiff’s risk. Farmer v. Brennan, 511 U.S. 825, 843 (1994). In reaching this holding, the Farmer court cited with approval state-law cases in which courts upheld criminal liability for injury to unanticipated victims. Id. at 844. The Supreme Court has also held that deliberate indifference to a condition that can cause serious future damage to an inmate’s health can give rise to a constitutional violation. Helling v. McKinney, 509 U.S. 25, 35 (1993). Thus, the Constitution imposes a clearly established duty on state officials to anticipate the serious medical needs of persons in their care. The Court sees no reason to regard this duty as any less clearly established simply because the risk of harm is posed to an individual who may not yet be a legal person, but who obviously will be one by the term the harm (or a significant portion of it) occurs. Although an argument that there is no duty to anticipate the serious medical needs of such a soon-to-be "person" may be a fathomable piece of legal writing, the argument is so shockingly callous and obviously unsupported by sound rationale that it fails to even call into question whether such a duty is well established. Here, a reasonable person in the position of the defendants would have understood the risk that an infant born in the Wayne County Jail away from the attention of medical personnel would have serious medical 24 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 25 of 26 Pg ID 318 needs, and should have anticipated those needs. For these reasons, the Court finds that the defendants are not entitled to qualified immunity at this stage of the proceedings. As to defendants’ final argument, at this early stage the defense fails as a matter of law based on the allegations of the complaint. The plaintiff is not claiming that the defendants did not summon medical help. Instead, the plaintiff is claiming that the steps taken by the defendants in the face of the mother’s obvious distress and progress in labor, and the serious risk that a child would be born without access to necessary medical attention, were insufficient as a matter of law. In other words, the plaintiff is not alleging that the defendants failed entirely to summon medical help, but rather that they cruelly delayed before doing so. In the cases cited by the defendants, Maddox v. Los Angeles, 792 F.2d 1408 (9th Cir. 1986) and Tagstrom v. Enockson, 857 F.2d 502 (8th Cir. 1988), the courts held that the plaintiffs could not state a cause of action for deliberate indifference to medical needs where it was undisputed that the defendants acted promptly to secure medical attention upon seeing an accident. Cf. Rich v. City of Mayfield Heights, 955 F.2d 1092, 1098 (where police officers, discovering the plaintiff’s decedent hanging in his cell, reacted immediately by calling for paramedics, and the paramedics arrived within minutes, there was no deliberate indifference to medical needs on the part of the defendants). The operative concept in these decisions is “promptness”. Since the plaintiff alleges facts which, if believed, show that the defendants did not promptly respond to the child’s serious medical needs here, the cases cited by the defendants are simply not dispositive. CONCLUSION Accordingly, after having reviewed the pleadings and the applicable portions of the record, and having conducted a full hearing, for all the reasons set forth above, 25 2:06-cv-10449-SJM-MKM Doc # 30 Filed 01/22/09 Pg 26 of 26 Pg ID 319 IT IS HEREBY ORDERED that the defendants’ motion for judgment on the pleadings [docket entry #17] is DENIED. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: January 22, 2009 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on January 22, 2009, by electronic and/or ordinary mail. s/Alissa Greer Case Manager 26

=== ORDER DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ===

2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 1 of 14 Pg ID 289 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION Plaintiff, CIVIL CASE NO. 07-14393 EDWARD JOHNSON, v. KMART, et al., HONORABLE STEPHEN J. MURPHY, III Defendants. ______________________________/ ORDER DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Before the Court is the defendants’ motion for summary judgment, filed on August 8, 2008. On December 9, 2008, the Court held a hearing on the motion for summary judgment. Having reviewed the motion for summary judgment and the relevant portions of the record, the Court denies the defendants’ motion for summary judgment for the reasons stated below. BACKGROUND This case involves a claim for employment discrimination and retaliation by an employee against his former employer for termination in violation of the Family Medical Leave Act, 29 U.S.C. § 2615(a)(2) (“FMLA”). The plaintiff Edward Johnson was formerly employed by the defendant Kmart/Sears Holding Corporation (“Kmart”) as a loss prevention associate. Kmart used a six-point infraction-based system for monitoring and punishing tardiness and absenteeism by its employees. Under the system, an employee would receive one infraction point for each instance of unexcused absence from work and ½ point for each incident of tardiness. An infraction point remained on an employee’s attendance record for six months, and Kmart reserved the right to terminate employees who accrued 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 2 of 14 Pg ID 290 six infraction points in any six-month period. The plaintiff Johnson had received and signed a copy of the policy when he began work. Prior to the events of Saturday, February 17, 2007, Johnson had accrued 5 ½ infraction points. On Saturday, February 17, 2007, Johnson was scheduled to work from 2:00 p.m. until the store’s closing at 10:00 p.m. At 1:30 p.m., as he was preparing to go to work, Johnson received a call from his wife’s cousin, Holly Abernathy, who was watching the Johnson children. Abernathy told Johnson and his wife, Gloria Johnson, that their six-year- old son Eddie had been hurt by Abernathy’s dog; Eddie’s eye had been cut by the dog and was bleeding. Edward Johnson dep. 81-83. When Johnson and his wife arrived at the Abernathy house a few minutes later. Pursuant to a Kmart policy regarding unexpected absences, Johnson called the store and notified assistant store manager William Talley that Johnson had to drive his son to the emergency room, that he would not be able to make his shift, but that he would try to get to work later if he was done at the hospital in time. Id.; Talley memo of March 8, 2007 (Exh. 7 to Plaintiff’s Response to Summary Judgment Motion). Talley told Johnson not to worry about it, but to “get your son to the hospital.” Edward Johnson dep. 86. The Johnsons first took Eddie to Clarkston Ambulatory Center, which was close to the Abernathy house, but the ambulatory center refused to see Eddie because the Johnsons did not have Eddie’s insurance card with them. Id. at 84. The Johnsons then took Eddie to the emergency room at St. Joseph Mercy Hospital in Pontiac, Michigan. Id. The doctors there diagnosed Eddie with a “left subconjunctival hemorrhage” and wrote that he appeared to have a “ruptured globe in the medial portion of the eye.” Hospital records (Exh. 8 to Plaintiff’s Response to Summary Judgment Motion). The St. Joseph Mercy 2 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 3 of 14 Pg ID 291 doctors felt that Eddie needed to be seen immediately by an ophthalmologist at Beaumont Hospital, in Royal Oak, Michigan. Eddie was then driven to Beaumont hospital by his parents where he was seen by the ophthalmology resident at Beaumont. The consultation form for the ophthalmologist indicates that Eddie was being seen because of a possible ruptured globe. Beaumont Medical Records (Exh. 9 to Plaintiff’s Response to Summary Judgment Motion). The diagnosis of the ophthalmology resident was that Eddie had a subconjunctival laceration (a cut on the white portion of the eye) and a subconjunctival hemorrhage (“a collection of blood on the white portion of his eye surrounding the laceration”). Id. The ophthalmologist concluded that Eddie did not have a ruptured globe. Id. The ophthalmologist gave Eddie an eyepatch and told the Johnson to keep the eyepatch on Eddie for 24 hours except when they were administering his antibiotics. Gloria Johnson dep. 29-30. The ophthalmologist discharged Eddie with instructions for him to return for a follow-up appointment, and for his parents to call sooner if he showed a decrease in visual acuity, or an increase in pain or any spots, curtains, or flashes. Id. Eddie was discharged from the hospital and the Johnsons returned home at approximately 8:00 p.m that night. Johnson did not report back to work for the final two hours of his shift ending at 10:00 p.m. The following day, Sunday, February 18, Johnson worked the entire day as he was scheduled to do. Edward Johnson dep. 86-87. Johnson testified that he spoke to the store HR manager Kim Matthews about taking his son to the emergency room the previous day and that he showed her pictures of his son’s eye injury. Id. at 87. Johnson also told Matthews that he had paperwork from the hospital if she needed it, but Matthews told Johnson “don’t worry about it.” Id. at 87-90. Matthews testified that Johnson told her he 3 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 4 of 14 Pg ID 292 had a doctor’s note, but that she told him to bring it in the next time he worked. Matthews dep. 90. She testified that she never followed up with him about it because that was management’s responsibility. Id. Jeanette Streetman, the store “coach”, or manager, testified that Matthews told her that Matthews had requested documentation from Johnson because he said he was in the emergency room, and that Matthews had waited for the documentation but never received it. Streetman dep. 59. Apparently, no one from Kmart notified Johnson that his absence might be protected by the FMLA. Edward Johnson dep. 142. Matthews notified Streetman that Johnson’s absence on February 17 was his sixth point under the Kmart absence control policy. Matthews dep. 33, 39; Streetman dep. 59. According to Matthews, Streetman questioned whether Johnson should receive an infraction point because “he said his son got bit,” but Streetman testified that she never suggested or acted upon the possibility that Johnson’s absence was protected by the FMLA. Matthews dep. 34; Streetman dep. 67. Streetman contacted Joe McCreery, the Kmart district “coach” and asked his approval of the decision to fire Johnson for his sixth infraction. Streetman never told McCreery the reason Johnson had given for his absence and never suggested to McCreery that Johnson’s absence may have been covered by FMLA, and McCreery never asked. Streetman dep. 67. When McCreery asked Streetman “if the infraction was clean, if there were any other circumstances to the infraction,” Streetman answered “no.” McCreery dep. 31. Streetman terminated Johnson on Friday, February 22, 2007 for his absence the previous Saturday. Edward Johnson dep. 88. Streetman told Johnson that the reason for 4 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 5 of 14 Pg ID 293 his termination was his violation of Kmart’s absence control policy. Id. After being informed of the decision, Johnson asked whether she was doing so “even though it was because I had to rush my son to the hospital.” Id. Johnson also told Streetman that he had the paperwork from the hospital if she needed to see it, but Streetman told him that she did not need to see the paperwork and “it doesn’t matter, I don’t care.” Id. Subsequently, Johnson brought this suit against the defendants, alleging that he was terminated in violation of the FMLA. LEGAL STANDARD The defendants filed a motion for summary judgment pursuant to the Federal Rules of Civil Procedure. Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). Summary judgment is appropriate if the moving party demonstrates that there is no genuine issue of material fact regarding the existence of an essential element of the nonmoving party’s case on which the nonmoving party would bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Martin v. Ohio Turnpike Comm’n, 968 F.2d 606, 608 (6th Cir. 1992). In considering a motion for summary judgment, the Court must view the facts and draw all reasonable inferences in a light most favorable to the nonmoving party. 60 Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir. 1987). The nonmoving party, however, must do more than raise some doubt as to the existence of a fact; the nonmoving party must produce evidence that would be sufficient to require submission of the issue to the 5 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 6 of 14 Pg ID 294 jury. Lucas v. Leaseway Multi Transp. Serv., Inc., 738 F. Supp. 214, 217 (E.D. Mich. 1990), aff’d, 929 F.2d 701 (6th Cir. 1991). “The mere existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); see Cox v. Ky. Dep’t of Transp., 53 F.3d 146, 150 (6th Cir. 1995). Here, the defendants have filed a motion for summary judgment. Accordingly, the Court views the facts and resulting inferences in the light most favorable to the nonmoving plaintiff Edward Johnson. ANALYSIS The defendants have moved for summary judgment on three grounds: first, that the injury to Johnson’s son was not a “serious health condition” within the meaning of the FMLA; second, that even if the injury was a “serious health condition,” Johnson’s failure to show up for the final two hours of his shift was a legitimate, nondiscriminatory reason for the termination; and third, that Johnson’s failure to provide certification that he was absent for work to care for a family member with a serious health condition precludes an action under the FMLA. The second and third arguments are easily disposed of as being without merit. Regarding the defendants’ second argument, the evidence is that once Johnson returned to work he remained home with his son while his wife went to the pharmacy and filled Eddie’s prescriptions. The regulations define “needed to care for” a family member to include both physical and psychological care, and includes providing psychological comfort to a child with a serious health condition receiving home care. 29 C.F.R. § 825.116. Considering the facts in the light most favorable to the plaintiff Johnson, there is sufficient 6 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 7 of 14 Pg ID 295 evidence in the record to show that Johnson was needed to care for his son Eddie during the night of February 17. Accordingly, summary judgment in favor of the defendants is not appropriate on this ground. Regarding the defendants’ third argument, the Department of Labor regulations specifically require the employer to give specific written notice of an employee’s obligations under the FMLA, including any duty to submit medical certification and the consequences for failing to do so. Perry v. Jaguar of Troy, 353 F.3d 510, 514 (6th Cir. 2003) (citing 29 C.F.R. § 825.301(c)(2 . In order to invoke the protection of the FMLA, an employee must provide notice and a qualifying reason for requesting leave. Brohm v. JH Props., Inc., 149 F.3d 517, 523 (6th Cir. 1998). There is, however, no requirement that an employee expressly invoke the FMLA. Rather, the Sixth Circuit has held that “the critical question is whether the information imparted to the employer is sufficient to reasonably apprise it of the employee’s request to take time off for a serious health condition.” Brohm, 149 F.3d at 523. Thus, the burden is on the employer to request medical certification when it is aware of facts that indicated that a leave might be covered by the FMLA. See Cavin v. Honda of America Mfg., Inc., 346 F.3d 713, 723 (6th Cir. 2003) (holding that employers cannot deny FMLA relief for an employee’s failure to comply with the employer’s internal notice requirements). The evidence before the Court is that Johnson offered Streetman documents supporting his claim that he took Eddie to the emergency room, but that Streetman declined them, saying they didn’t matter. Therefore, the defendants’ third argument in favor of summary judgment also fails. The only remaining issue is whether Eddie suffered from a “serious health condition” on February 17, 2007, entitling Johnson to the protections of the FMLA. Upon review of 7 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 8 of 14 Pg ID 296 the applicable regulations, the Court finds that the condition of Johnson’s son Eddie on February 17, 2007 does satisfy the requirements of a “serious health condition” and that Johnson is entitled to FMLA protection. The FMLA creates the right in eligible employees to a total of twelve workweeks of leave during any twelve-month period “[i]n order to care for the spouse, or a son, daughter, or parent, of the employee, if such spouse, son, daughter, or parent has a serious health condition.” 29 U.S.C. § 2612(a)(1)(c). The FMLA defines “serious health condition” as “an illness, injury, impairment, or physical or mental condition that involves – (A) inpatient care in a hospital, hospice, or residential medical care facility; or (B) continuing treatment by a health care provider.” 29 U.S.C. § 2611(11). The FMLA also provides a private right of action to employees whose rights under the FMLA have been violated. 29 U.S.C. § 2617(a). The FMLA grants the Secretary of Labor the authority to promulgate regulations implementing the Act. 29 U.S.C. § 2654. With respect to the meaning of “serious health condition” for purposes of the FMLA, the following regulation at 29 C.F.R. § 825.114, was promulgated: (a) For purposes of FMLA, “serious health condition” entitling an employee to FMLA leave means an illness, injury, impairment, or physical or mental condition that involves: . . . . (2) Continuing treatment by a health care provider. A serious health condition involving continuing treatment by a health care provider includes any one or more of the following: (i) A period of incapacity (i.e., inability to work, attend school or perform other regular daily activities due to the serious health condition, treatment therefor, or recovery therefrom) of more than three consecutive 8 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 9 of 14 Pg ID 297 calendar days, and any subsequent treatment or period of incapacity relating to the same condition, that also involves: (A) Treatment two or more times by a health care provider, by a nurse or physician's assistant under direct supervision of a health care provider, or by a provider of health care services (e.g., physical therapist) under orders of, or on referral by, a health care provider; or (B) Treatment by a health care provider on at least one occasion which results in a regimen of continuing treatment under the supervision of the health care provider. . . . . (v) Any period of absence to receive multiple treatments (including any period of recovery therefrom) by a health care provider or by a provider of health care services under orders of, or on referral by, a health care provider, either for restorative surgery after an accident or other injury, or for a condition that would likely result in a period of incapacity of more than three consecutive calendar days in the absence of medical intervention or treatment, such as cancer (chemotherapy, radiation, etc.), severe arthritis (physical therapy), kidney disease (dialysis). . . . . (b) Treatment for purposes of paragraph (a) of this section includes (but is not limited to) examinations to determine if a serious health condition exists and evaluations of the condition. Treatment does not include routine physical examinations, eye examinations, or dental examinations. Under paragraph (a)(2)(i)(B), a regimen of continuing treatment includes, for example, a course of prescription medication (e.g., an antibiotic) or therapy requiring special equipment to resolve or alleviate the health condition (e.g., oxygen). A regimen of continuing treatment that includes the taking of over-the-counter medications such as aspirin, antihistamines, or salves; or bed-rest, drinking fluids, exercise, and other similar activities that can be initiated without a visit to a health care provider, is not, by itself, sufficient to constitute a regimen of continuing treatment for purposes of FMLA leave. 29 C.F.R. § 825.114 (emphasis added). The key question facing the Court is whether Eddie had a “serious health condition” under the FMLA when his father took Saturday, February 17, 2007 off from work to take Eddie to the hospital. It is undisputed that the reason that Johnson was terminated on February 22, 2007 was that his absence on February 17 caused him to accrue in excess 9 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 10 of 14 Pg ID 298 of six infraction points. If Eddie’s condition was a “serious health condition” within the meaning of the FMLA, then the plaintiff Johnson’s absence on February 17 was covered by the FMLA, he was entitled to take leave, and Kmart was in violation of the FMLA by terminating him. In a claim under the FMLA, it is the employee’s burden to establish the objective existence of a “serious health condition.” Bauer v. Varity Dayton-Walther Corp., 118 F.3d 1109, 1112 (6th Cir. 1997). Kmart argues that to establish Eddie’s condition as a “serious health condition,” Johnson would have to show that Eddie was incapacitated for a period of more than three days and that he was treated two or more times or was treated at least once resulting in a regimen of continuing treatment. Kmart argues that Johnson cannot show that Eddie was incapacitated in this way and thus, Johnson is not protected by the FMLA and summary judgment is appropriate for the defendants. Here, the record does not clearly establish that Eddie was incapacitated for more than three days. Gloria Johnson testified that she was instructed by the physician to keep Eddie relaxed and to avoid rambunctious play, and that “he laid on the couch for a few days, watched his movies, read books” and that she kept him away from his play dates. Gloria Johnson dep. 31. She also testified that she had kept him from playing with his brother for “a rough couple of days.” Id. at 33. The physician’s assistant that assisted in treating Eddie at Beaumont testified that the special instructions section of Eddie’s discharge instructions contained no limitations on Eddie’s activities. Sudbury dep. 28. The assistant was unable to testify as to what the consequences might have been had Eddie not had his conjunctival laceration treated that day. Id. at 21. Consequently, as there is no medical testimony that Eddie was required to refrain from activities for more than three 10 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 11 of 14 Pg ID 299 days, and the testimony of Eddie’s parents does not clearly demonstrate an incapacity for more than three days, the Court finds that Johnson has not shown that Eddie was incapacitated as described in 29 C.F.R. § 825.114(a)(2)(i). Nevertheless, the fact that the plaintiff Johnson has demonstrated that Eddie was incapacitated for more than three days is not fatal to his claim. Johnson also argues in the alternative that his absence on February 17 was covered by the FMLA because at the time he requested leave, Eddie was suffering from a “serious medical condition” as described by 29 C.F.R. § 825.114(a)(2)(v). Subsection (a)(2)(v) does not require any specific period of incapacity, unlike subsections (a)(2)(i) through (iv). Instead, subsection (a)(2)(v) provides that a “serious health condition” includes (v) Any period of absence to receive multiple treatments (including any period of recovery therefrom) by a health care provider or by a provider of health care services under orders of, or on referral by, a health care provider, either for restorative surgery after an accident or other injury, or for a condition that would likely result in a period of incapacity of more than three consecutive calendar days in the absence of medical intervention or treatment.” 29 C.F.R. § 825.114(a)(2)(v). Here, in this case, Johnson can establish that Eddie had a serious health condition under subsection (a)(2)(v) if he can show (1) multiple treatments, (2) by a health care provider, (3) for a condition that would likely result in a period of incapacity of more than three consecutive calendar days in the absence of medical intervention or treatment. Johnson meets the first two elements: the evidence shows that Eddie was seen by at least two doctors and several other health care professional at two hospitals in a single day, and was seen by his own pediatrician four days later for the same condition. The question is whether Johnson has presented enough evidence to meet the third element, 11 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 12 of 14 Pg ID 300 that he was treated “for a condition that would likely result in a period of incapacity of more than three consecutive calendar days in the absence of medical intervention or treatment.” 29 C.F.R. § 825.114(a)(2)(v). Johnson argues that the Court should consider Eddie’s condition when he first arrived at the emergency room, namely, the possibility that Eddie was suffering from a ruptured globe. Johnson argues that the doctors at St. Joseph’s Hospital concluded that Eddie was likely suffering from a ruptured globe, a condition that, if left untreated, could cause blindness. This was the diagnosis for which the ophthalmologist at Beaumont Hospital evaluated Eddie. Johnson argues that the Court should look at the plaintiff’s knowledge at the time he requested leave, and his belief, supported by the objective medical opinion, that Eddie might have a ruptured globe. In response, the defendants argue that the Court should only consider how serious the injury turned out to be in actuality. The defendants argue that regardless of how serious the injury appeared at the outset, the injury was not a ruptured globe, but instead was a subconjunctival laceration and subconjunctival hemorrhage, and that there is no evidence in the record that such a condition would likely result in more than three days’ incapacity if left untreated. After considering the parties’ positions, the Court concludes that the plaintiff has the stronger argument. The Court finds the cases of Thorson v. Gemini, 205 F.3d 370 (8th Cir. 2000) and Woodman v. Miesel Sysco Food Service Co., 254 Mich. App. 159 (2002), cited in support of the plaintiff’s position, to be persuasive. In these cases, the courts reasoned that “treatment” under the regulations includes "examinations to determine if a serious health condition exists or evaluations of the condition." 29 C.F.R. § 825.114(b); see also 12 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 13 of 14 Pg ID 301 Woodman, 254 Mich. App. at 176; Thorson, 205 F.3d at 379. These courts rejected the argument that FMLA protection only occurs if the employee actually suffered from a serious health condition. In this case, ultimately Johnson’s son Eddie was found to not be suffering from a serious health condition which required a period of incapacity. When Eddie was first injured, however, it was reasonable for the plaintiff Johnson to believe that Eddie was suffering from a serious health condition with his bleeding eye. Additionally, the initial diagnosis at St. Joseph’s hospital was that Eddie had a possible ruptured globe, which is a serious health condition which would lead to a period of incapacity of more than three consecutive calendar days in the absence of medical treatment. Because of the seriousness of this diagnosis, it was necessary to evaluate Eddie as soon as possible, and so, Eddie was immediately sent to see a specialist at Beaumont. Based on the reasoning of the Thorson and Woodman cases, these examinations to evaluate Eddie’s eye and possibly ruptured globe fall within the meaning of “treatment” for a serious health condition. Consequently, the Court finds that the plaintiff Johnson has satisfied the requirements of 29 C.F.R. § 825.114(a)(2)(v) and that the leave that Johnson sought on February 17, 2007 was protected by the FMLA. CONCLUSION In conclusion, the Court finds that, on February 17, 2007, Johnson’s son Eddie was receiving multiple treatments by a health care provider for a condition that would likely result in a period of incapacity for more than three consecutive calendar days in the absence of medical intervention. Thus, Johnson’s son had a serious health condition, 13 2:07-cv-14393-SJM-SDP Doc # 41 Filed 01/07/09 Pg 14 of 14 Pg ID 302 entitling Johnson to the protections of the FMLA. The defendants are not entitled to summary judgment in their favor. ACCORDINGLY, IT IS HEREBY ORDERED that the defendants’ motion for summary judgment [docket entry #17] is DENIED. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: January 7, 2009 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on January 7, 2009, by electronic and/or ordinary mail. s/Alissa Greer Case Manager 14

=== ORDER MODIFYING AND ADOPTING THE MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION AND DENYING DEFENDANTS’ MOTION TO DISMISS ===

2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 1 of 19 Pg ID 3133 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In Re: FORD MOTOR COMPANY ERISA LITIGATION, Case No. 06-11718 HONORABLE STEPHEN J. MURPHY, III / ORDER MODIFYING AND ADOPTING THE MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION AND DENYING DEFENDANTS’ MOTION TO DISMISS INTRODUCTION This litigation presents a question that has challenged federal courts: given that the Employee Retirement Income Security Act (“ERISA”) excuses certain retirement-plan fiduciaries from any duty to diversify the holdings of the plans they manage, but otherwise requires them to engage in “prudent” management, how is a court to determine when an undiversified plan of this kind has been imprudently managed? The suit involves a claim under the Employee Retirement Income Security Act (“ERISA”) against Ford Motor Company and several related persons and organizations (collectively, “Ford”). Currently before the Court are the defendants’ objections to Magistrate Judge Steven Pepe’s Report and Recommendation (“R&R”) of denial of defendants’ motion to dismiss the complaint for failure to state a claim. The facts of the case are ably set forth in the R&R, and need not be repeated here since the only issues before the Court are purely legal ones. Suffice it to say that the plaintiffs are various salaried and hourly employees who are current or former participants in the 401(k) retirement savings plans provided by Ford to its employees. They complain of Ford’s management of two of these plans, the Ford Motor Company Tax-Efficient Savings Plan 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 2 of 19 Pg ID 3134 for Hourly Employees and the For Motor Company Savings and Stock Investment Plan for Salaried Employees (jointly, “the plans”). At all relevant times, the governing documents of these plans required them to be invested primarily or exclusively in Ford’s own stock. Ford also offered numerous other more diversified mutual funds and other investment funds; subject to minor restrictions, employees could direct their retirement savings into whichever plan they preferred. The defendants are Ford Motor Company itself, and numerous of its employees and related organizations who were involved in administering the plans. They will collectively be referred to as “Ford.” At all times relevant to this case, Ford also served as the fiduciary of the plans. The plaintiffs’ allegations are that it mismanaged the plans – and thus violated ERISA – by continuing to invest them entirely in its own stock even as the company fell into financial straits. Ford’s instant motion is to dismiss the complaint, for failure to allege a breach of Ford’s fiduciary duties under ERISA. Magistrate Judge Pepe recommended that the motion be denied, and Ford has filed objections to that recommendation. I. Standard of Review ANALYSIS A District Court’s standard of review for a magistrate judge’s report and recommendation depends upon whether a party files objections. With respect to portions of an R&R that no party has objected to, the Court need not undertake any review at all. Thomas v. Arn, 474 U.S. 140, 150 (1985). On the other hand, Federal Rule of Civil Procedure 72(b) states, in relevant part: 2 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 3 of 19 Pg ID 3135 The district judge to whom the case is assigned shall make a de novo determination upon the record, or after additional evidence, of any portion of the magistrate judge's disposition to which specific written objection has been made in accordance with this rule. The district judge may accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate judge with instructions. Thus, the Court will conduct de novo review of the R&R with respect to Ford’s objections. “[W]hen the allegations in a complaint, however true, could not raise a claim of entitlement to relief, ‘this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.’” Bell Atl. Corp. v. Twombly, , —; 127 S. Ct. 1955, 1966 (2007) (citations omitted). Accordingly, Federal Rule of Civil Procedure 12(b)(6) allows a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true. See Minger v. Green, 239 F.3d 793, 797 (6th Cir. 2001) (citations omitted). In assessing a motion brought pursuant to Rule 12(b)(6), the Court must presume all well-pleaded factual allegations in the complaint to be true and draw all reasonable inferences from those allegations in favor of the non-moving party. Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). To determine whether Plaintiff has stated a claim, the Court will examine the complaint and any written instruments that are attached as exhibits to the pleading. Fed. R. Civ. P. 12(b)(6) & 10(c). Although the pleading standard is liberal, bald assertions and conclusions of law will not enable a complaint to survive a motion pursuant to Rule 12(b)(6). Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996). The Court will not presume the truthfulness of any legal conclusion, opinion, or deduction, even if it is couched as a factual allegation. Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987). 3 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 4 of 19 Pg ID 3136 The Federal Rules of Civil Procedure “do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is ‘a short and plain statement of the claim’ that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957). This standard requires the claimant only to put forth “enough facts to raise a reasonable expectation that discovery will reveal evidence of [the requisite elements of the claim].” Bell Atlantic, 127 S. Ct. at 1965. Thus, although “a complaint need not contain ‘detailed’ factual allegations, its ‘[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true.’” Ass’n of Cleveland Fire Fighters v. Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. Sept. 25, 2007) (quoting Bell Atl. Corp. v. Twombly, , —, 127 S. Ct. 1955, 1965 (2007 . Therefore, the Court will grant a motion for dismissal pursuant to Rule 12(b)(6) only in cases where there are simply not “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic, 127 S. Ct. at 1974. II. Governing Law This dispute is essentially over the application of the legal duties imposed by ERISA. Ford does not dispute that it was the plan fiduciary, or that ERISA duties applied to it; instead Ford claims that its conduct as alleged in the complaint did not breach those duties. “[T]he duties charged to an ERISA fiduciary are ‘the highest known to the law.’” Chao v. Hall Holding Co., Inc., 285 F. 3d 415, 426 (6th Cir. 2002). ERISA, as codified at 29 U.S.C. § 1104(a)(1), sets out the standard of conduct ordinarily required of plan fiduciaries: [A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and-- (A) for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries; and 4 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 5 of 19 Pg ID 3137 (ii) defraying reasonable expenses of administering the plan; (B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; (C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter and subchapter III of this chapter. Here, Magistrate Judge Pepe concluded, and the plaintiffs do not object, that the relevant plans are Employee Stock Ownership Plans (“ESOPs”), which are a type of Eligible Individual Account Plan (“EIAP”) within the meaning of 29 U.S.C. § 1107(d). Paragraph (a)(2) of 29 U.S.C. § 1104 modifies the duties applicable to the fiduciaries of EIAPs: In the case of an eligible individual account plan (as defined in section 1107(d)(3) of this title), the diversification requirement of paragraph (1)(C) and the prudence requirement (only to the extent that it requires diversification) of paragraph (1)(B) is not violated by acquisition or holding of qualifying employer real property or qualifying employer securities (as defined in section 1107(d)(4) and (5) of this title). Thus, while ERISA recognizes that investing an entire plan in a single stock is often imprudent, in the case of EIAPs it nonetheless expressly permits these investments, while still purporting to require prudence in other respects. Courts, therefore, are in the difficult position of attempting to pass on the “prudence” of these sorts of funds without considering what would normally be regarded as their severe underdiversification. An overly strict scrutiny of EIAPs would read the diversification exemption out of the statute, while 5 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 6 of 19 Pg ID 3138 excessively lenient review would subject the residual prudence requirement to the same fate. Cf. Donovan v. Cunningham, 716 F.2d 1455 (5th Cir.1983) (comparing Congressional policy of “encourag[ing] the formation of ESOPs” with the “equally forceful” policy of “safeguarding the interests of partipants . . . by vigorously enforcing standards of fiduciary responsibility”); Moench v. Robertson, 62 F. 3d 553, 570 (3d Cir. 1995). Paralleling the tension between protecting plan assets and promoting EIAP formation is the tension between an ERISA fiduciary’s duty to be prudent, on the one hand, 29 U.S.C. § 1104(1)(B), and on the other hand its duty to manage the plan in accordance with its governing documents unless other ERISA duties dictate otherwise, id. § 1104(1)(D). The courts have recognized that when an EIAP’s governing documents require that all or most of the plan’s assets be invested in the stock of the employer-settlor, the fiduciary is thus required to navigate a narrow channel between two different forms of liability – the Scylla of unwarranted disobedience to the plan documents lurks on one side, while the Charybdis of imprudence swirls on the other. In other words, Because an ESOP is at once a permissible form of ERISA trust and nondiversified by definition, the trustee (along with the named fiduciary) is in an awkward position. If he diversifies he violates the plan, but if he doesn't diversify he may be imposing unwanted risk on the employee-shareholders -- for it is unrealistic to suppose that the ESOP form was chosen because the employees wanted to bear unnecessary risk. Summers v. State Street Bank & Trust Co., 453 F. 3d 404, 410 (7th Cir. 2006). In Moench, the Third Circuit resolved this dilemma by holding that “an ESOP fiduciary who invests the assets in employer stock is entitled to a presumption that it acted consistently with ERISA by virtue of that decision. However, the plaintiff may overcome that 6 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 7 of 19 Pg ID 3139 presumption by establishing that the fiduciary abused its discretion by investing in employer securities.” Id. at 571. In Kuper v. Iovenko, 66 F. 3d 1445, 1458 (6th Cir. 1995), the Sixth Circuit adopted a similar standard: we review an ESOP fiduciary's decision to invest in employer securities for an abuse of discretion. In this regard, we will presume that a fiduciary’s decision to remain invested in employer securities was reasonable. A plaintiff may then rebut this presumption of reasonableness by showing that a prudent fiduciary acting under similar circumstances would have made a different investment decision. Applying this presumption, the Kuper court held that a fiduciary’s mere “aware[ness] of events that would continue to cause [the company’s] stock to decline in value” was not sufficient to create liability, when the evidence was that the stock price fluctuated throughout the relevant period. Id. Magistrate Judge Pepe concluded, and this Court agrees, that the Kuper presumption is crucial and must be applied in this case. Judge Pepe also concluded that the defendants have pleaded facts sufficient to overcome the Kuper presumption of prudence. Ford’s objections to this recommendation are essentially threefold. First, it objects that it cannot be liable for investing the fund solely in its own stock because the plan documents instructed it to do so. Second, Ford asserts that Magistrate Judge Pepe improperly applied the Kuper presumption, which (Ford claims) should bar recovery even on the facts asserted in the complaint. Third, Ford claims that Judge Pepe improperly considered its EIAPs in isolation, instead of in the context of the overall portfolio of retirement funds Ford offered to its employees. Because the overall fund is much more diversified, says Ford, considered as a whole its management has not been imprudent. The Court will consider each of these objections in turn. 7 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 8 of 19 Pg ID 3140 III. Settlor-Intent Defense The plaintiffs recognize that the plan documents themselves required plan funds to be invested primarily or exclusively in Ford stock. Ford asserts that because these were instructions to the plan fiduciary, it cannot be liable in its fiduciary role for following them, even if doing so was imprudent. This Court is not free to do so, however, because such a holding would be contrary to the plain language of ERISA, which as noted requires fiduciaries to act “in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter.” 29 U.S.C. § 1104(1)(D) (emphasis added). The Supreme Court has declared that “trust documents cannot excuse trustees from their duties under ERISA,” Cent. States, S.E. & S.W. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 568 (1985), and in Kuper the Sixth Circuit specifically held that the purpose and nature of ERISA and ESOPs preclude a plan's per se prohibition against diversification or liquidation. . . . . [A] plan provision that completely prohibits diversification of ESOP assets necessarily violates the purposes of ERISA. ERISA provides that a fiduciary may only follow plan terms to the extent that the terms are consistent with ERISA. 29 U.S.C. 1104(a)(1). Kuper v. Iovenko, 66 F. 3d 1447, 1457 (6th Cir. 1995). Indeed, ERISA would be almost impotent if it permitted settlors to exempt their fiduciaries from its requirements with a simple stroke of the pen. This is especially so in a case like this one, where the settlor essentially designates itself as the fiduciary. 8 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 9 of 19 Pg ID 3141 Ford asserts that Magistrate Judge Pepe grounded his recommendation on the erroneous proposition that in amending the plan to require exclusive investment in its own stock, Ford was acting as a fiduciary of the plan as opposed to its settlor. The Court is inclined to agree that the amendments were settlor acts, not fiduciary ones. But Kuper makes this issue superfluous: if amending the plans were indeed a fiduciary act (which seems unlikely), Ford could be liable if the amendments required imprudent management of the plans. But if in following those instructions (by acquiring and holding company stock) Ford actually did manage the plans imprudently in its fiduciary capacity, that would independently create liability under § 1104(a)(1). In other words, since in this case Ford managed the plans in accordance with the instructions that it wrote into the documents, it will be liable for any imprudence in the instructions as a result of following them, regardless of whether it would also be liable for giving them. IV. Application of the Kuper Presumption A. Ford’s most substantial objection is that it is theoretically inconsistent with Kuper’s presumption of prudence to permit liability even when the only factors driving down an employer’s stock price are matters of public information. Ford asserts that there is “no logical limiting principle” for determining how much bad news is too much, requiring a fiduciary to divest the plan of company stock. Cf. Summers v. State Street Bank & Trust, 453 F. 3d 404 (7th Cir. 2006) (“determining the ‘right’ point, or even range of ‘right’ points, for an ESOP fiduciary to break the plan and start diversifying may be beyond the practical capacity of the courts”); Pedraza v. Coca-Cola, 456 F. Supp. 2d. at 1276 (N.D. Ga. 2006) (“If any combination of factors potentially can overcome Moench’s presumption, ERISA 9 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 10 of 19 Pg ID 3142 fiduciaries are left with no meaningful guidance as to when they should, or should not, ignore an ERISA plan's requirement to offer company stock.”) As a result, Ford argues, permitting liability based only on public information amounts to a collapse back into ordinary prudence, in defiance of the Kuper presumption of prudence. Ford elaborates by stressing that in the absence of a fraud on the market, fiduciaries cannot be expected to outguess the market as to how the publicly-known risks connected with a stock should be priced. It cites Summers, 453 F. 3d 404, in which the Seventh Circuit noted that “it would be hubris” for fiduciaries to try to predict a company’s future better than the market can. Id. at 409. This Court does not doubt the truth of that proposition, but finds it insufficient to justify dismissal of the complaint. The plaintiffs here do not claim that Ford should have divested the plans of Ford stock because the stock’s risk was improperly priced. Rather, they claim that the risk was so great that, efficiently priced or not, it was imprudent under the circumstances to subject the plan’s assets to it. Thus, plaintiffs are arguing not that the defendants should somehow have known that the market was wrong about Ford stock, but instead that the downside risk built into that price was simply intolerable for a plan of this type. Cf. id. (noting the irresponsibility of investing retirement savings “in a single stock that, while worth as much as its market valuation (as far as anyone not possessing inside information could know), was extremely risky”). Ford’s briefs can also be read as arguing that, because the market can be relied upon to price risk efficiently, the Kuper presumption means that holding a publicly-traded stock can never be regarded as imprudently risky. Defendants assert that “[t]he suggestion that Ford stock could be prudent for some investors at the same time it was imprudent for all Plan participants reverses the presumption of prudence.” Reply br., p. 4. The Court finds 10 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 11 of 19 Pg ID 3143 this argument to be unpersuasive. Indeed, if one accepts the efficient market principles on which Ford’s argument is based, the risk involved in a stock becomes one of the key factors that an ERISA fiduciary (or any investor) must consider in deciding whether to buy or hold it. Ford’s argument is predicated on the fact that a stock’s price is determined not just by what the corporation is worth today, but also the entire range of potential values that it might have tomorrow, next week, next month, and next year. Only one price in the range of potential values will become the actual value at any given time, however, which means that today’s market price will also reflect the relative probabilities that the stock will attain each of its range of potential values. As a result, the market might rationally assign identical prices to Stock A and Stock B, where Stock A’s value and dividends have an overwhelming likelihood of increasing slightly, and Stock B has a relatively small likelihood of exploding a hundredfold in value, but also a small likelihood of becoming completely worthless. The only rational basis on which a fiduciary could choose between two such stocks would be a consideration of their differing risk profiles in light of the purpose of the plan – and when part of that purpose is to provide savings for potential retirees, a lower level of risk is highly desirable. See Steinman v. Hicks, 352 F. 3d 1101, 1104 (7th Cir. 2003) (“[A]ssuming that the plan's participants were risk averse, a truncated distribution of expected returns would have been preferable . . . even if the average of those returns would be no higher or even somewhat lower.”). As the Summers court recognized, employees are even more risk-sensitive with respect to holdings of their employers’ stock, because the employers’ financial fortunes will affect not just the value of its employees’ EIAP accounts but their expected future wages as well. Summers, 453 F. 3d at 409. 11 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 12 of 19 Pg ID 3144 For Ford’s argument to carry the day, then, the Court would have to conclude that ESOP fiduciaries have no duty under ERISA to consider their plan beneficiaries’ level of risk tolerance. Such a conclusion would apparently mean that the only remaining duty of such a fiduciary would be to ensure that nothing is impeding market mechanisms from accurately pricing the stock. In the Court’s view, this would, in one fell swoop, demote the ERISA duty of prudence from being “the highest known to law,” Chao v. Hall Holding Co., 285 F. 3d 415, 426 (6th Cir. 2002), to being largely illusory. This result would be contrary not only to common sense but also to the regulations implementing ERISA, which provide that to satisfy the statutory duties a fiduciary must, among other things, “tak[e] into consideration the risk of loss and the opportunity for gain (or other return) associated with the investment or investment course of action.” 29 C.F.R. § 2550.404a-1(b). The Court therefore will not adopt the position advocated by Ford in this regard. B. Ford stresses that a requirement of either knowledge of imminent collapse or the existence of fraudulently inflated stock prices would be a much brighter line on which to premise liability. It cites several cases in which courts concluded that only in these conditions could the presumption of prudence be overcome. E.g., In re Coca-Cola Enterprises, Inc. ERISA Litigation, No. 1:06-CV-0953, 2007 WL 1810211, *10 (N.D. Ga. June 10, 2007); Pedraza v. Coca-Cola Co., 456 F. Supp. 2d 1262, 1275-76 (N.D. Ga. 2006) (collecting cases on both sides of this issue); LaLonde v. Textron, Inc., 270 F. Supp. 2d 272, 280 (D.R.I. 2003), vacated in part, 369 F. 3d 1, 7 (1st Cir. 2004). It may be true that such a rule would be more administrable than an undifferentiated standard of prudence, although the Court doubts that “imminent collapse” is as clearly 12 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 13 of 19 Pg ID 3145 delineated a condition as Ford suggests. For the reasons just stated, however, this approach strikes the Court as insufficiently attentive to the statutory text. In the Court’s view, a stock can be imprudently risky for an employee savings plan even in the absence of fraud or imminent collapse. It is entirely possible that a company built on high speculation – for instance, one with no clear path to profitability, but with possibly tremendous potential – could, without fraud, attract a huge amount of capital from highly risk-tolerant investors, and thus be in no danger of imminent collapse despite being extraordinarily risky. This Court is unable to say as a matter of law that such a company’s stock could never be an “imprudent” investment for an EIAP, especially one whose participants were mostly near retirement and particularly risk-averse. Cf. Steinman v. Hicks, 352 F. 3d 1101, 1106 (7th Cir. 2003) (recognizing the relevance of participant characteristics). The problem running through Ford’s proposed application of the Kuper standard as the Court sees it is that it asks for the drawing of a bright line where Congress has declined to create one. The foregoing analysis should make clear that, if the doctrine adopted by Magistrate Judge Pepe has “no logical limiting principle,” it is not because he misapplied Kuper’s presumption of produnce, but rather because the statutory standard itself – “prudence” – has no tidy limiting principle. Kuper may create a presumption that a fiduciary was prudent, but it does not and cannot change this underlying standard of conduct, which must be applied through a thorough analysis of the facts of each case. In this matter as in many others, fiduciaries and courts alike must rely on common sense and experience to supplement airtight logic. 13 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 14 of 19 Pg ID 3146 Of course, it indeed is usually imprudent for a fiduciary to hold stock that has been fraudulently inflated in value, or to hold stock in a collapsing company. To the extent the cases cited by Ford rule this way, they are certainly laudable efforts to simplify the administration of portions of the statutory standard. What Ford is asking for here, however – a declaration that these are the only ways in which an ESOP fiduciary can be “imprudent” under ERISA – is a complete replacement of the standard enacted by Congress with one created by the courts. Whether or not Ford’s suggested standard is easier to administer than the one chosen by Congress, such a substitution is impermissible. To the extent that the cases cited by Ford conclude otherwise, the Court is unpersuaded by them. C. The Court notes, however, that even as a matter of pure logic, the rule articulated by ERISA and Kuper does not leave EIAP fiduciaries in the Sixth Circuit entirely without guidance as to how to discharge their duty of prudence. As noted above, ERISA excuses such fiduciaries from “the prudence requirement (only to the extent that it requires diversification).” 29 U.S.C. § 1104(a)(2). This is necessary because, as many courts have noted, it is almost always imprudently risky to invest most or all of a fund’s assets in a single stock. E.g., Summers, 453 F. 3d at 406; Steinman v. Hicks, 352 F. 3d 1101, 1104- 05 (7th Cir. 2003). But the statutory language plainly retains the duty of prudence except insofar as it would dictate diversification. See Kuper, 66 F. 3d 1447, 1458 (6th Cir. 1995); Moench, 62 F. 3d at 569. As a result, this Court finds that the Kuper presumption of prudence means that 29 U.S.C. § 1004(1)-(2) requires fiduciaries to divest their plans of company stock when holding it becomes so risky – that is, so imprudent – that the problem could not be 14 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 15 of 19 Pg ID 3147 fixed by diversifying into other assets. In other words, with respect to EIAPs, an abuse of discretion under Kuper begins (and the presumption of prudence ends) at the point at which company stock becomes so risky that no prudent fiduciary, reasonably aware of the needs and risk tolerance of the plan’s beneficiaries, would invest any plan assets in it, regardless of what other stocks were also in that plan’s portfolio.1 If anything, Magistrate Judge Pepe applied a standard more favorable to Ford than this one. On the one hand, he acknowledged that pleading fraud or imminent collapse is not necessary to make out an ERISA imprudence case against an EIAP fiduciary: nothing in Kuper rules out the possibility of demonstrating imprudence by [instead] showing that the stock has become excessively risky as a result of massive mismanagement; overwhelming debt and liabilities; conflicted, self-serving and disloyal fiduciaries; and the very real possibility that a company’s fortunes are so diminished that it is at risk of collapse. R&R at 27. On the other hand, the standard Judge Pepe adopted was very similar to one of imminent collapse. Specifically, he concluded that “Plaintiffs must prove that Defendants 1 This standard is consistent with Magistrate Judge Pepe’s conclusion (to which neither side has objected) that the Kuper presumption is not a mere evidentiary standard, but instead is a substantive rule of law that can be applied at the motion-to-dismiss stage. It is also at least partially consonant with the Fifth Circuit’s approach in Kirschbaum v. Reliant Energy, 526 F. 3d 243, 249 (5th Cir. 2008). There, the court rejected one of the plaintiff’s claims because it asserted not “that REI common stock was an imprudent investment per se, but rather that it was too risky for the Plan to hold in large quantities.” But the court accepted another count, which “allege[d] it was imprudent for the Plan to hold even one share of REI stock.” Id. This case is not identical to Kirschbuam in every respect, because there the riskiness of the company stock was alleged to arise in part from fraudulent activity. As explained previously, however, the Court does not see this distinction as a crucial one. The Kirschbaum court also stated that the presumption of prudence “may only be rebutted if unforeseen circumstances would defeat or substantially impair the accomplishment of the trust's purposes.” Id. at 256. In the Court’s view, unforeseen circumstances may be relevant to the prudence inquiry, but are not necessary for an EIAP fiduciary to be liable for a violation of the duty of prudence. 15 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 16 of 19 Pg ID 3148 were aware of facts showing that Ford’s viability as an ongoing concern was in jeopardy,” or “must show a precipitous decline in the employer’s stock combined with evidence that the company is on the brink of collapse or is undergoing serious mismanagement.” Id. at p. 33 (internal quotation marks, alteration, and citation omitted). Ford’s instant objection is that Magistrate Judge Pepe applied the wrong standard, not that he misapplied the standard he adopted. Thus, the Court will not engage in a detailed review of the facts, but instead will adopt Judge Pepe’s conclusion that under his standard – requiring pleading that “Ford’s viability as an ongoing concern was in jeopardy” or “that the company is on the brink of collapse” – the plaintiffs have “plead[ed] substantial bases for establishing that Ford stock became an imprudent investment option for participants’ retirement savings during the Class Period.” Id. p. 33.2 Since the plaintiffs have met this standard, the Court concludes that they have also met the standard adopted by the Court – namely, that Ford stock would not have been a prudent holding for the plans’ beneficiaries even as part of a more diversified portfolio. The plaintiffs would thus survive this motion to dismiss under both prior precedent, as articulated by Judge Pepe, and under the newer formulation adopted by this Court. V. Individual Fund or Entire Portfolio? Ford’s final objection is that the prudence of holding Ford stock should be assessed with an eye to its entire universe of retirement-plan options, rather than only in the context of the EIAPs themselves. As authority for this position, Ford cites 29 C. F. R. 2550.404a- 2 Ford correctly notes that the magistrate apparently considered facts not contained in the complaint in reaching this conclusion. Id. p. 36. But the language quoted above indicates that Judge Pepe regarded the pleadings alone to also be sufficient. The Court’s adoption of the R&R is predicated on this understanding. 16 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 17 of 19 Pg ID 3149 1(b)(2)(I), which states that a fiduciary must determine “that the particular investment or investment course of action is reasonably designed, as part of the portfolio (or, where applicable, that portion of the plan portfolio with respect to which the fiduciary has investment duties), to further the purposes of the plan.” See also Laborers Nat’l Pension Fund v. N. Trust Quantitative Advisors, Inc., 173 F. 3d 313, 322 (5th Cir. 1999) (the regulations “require[] that the investment be reasonably designed as part of the portfolio to further the purposes of the plan”) (emphasis added). Ford’s position is that because its employees were free to diversify their individual holdings by spreading them across the various funds Ford offered to them, considering the EIAPs in isolation greatly exaggerates the risks they created for the participants’ savings. The plaintiffs disagree, noting that “a fiduciary of a defined contribution, participant- driven, 401(k) plan . . . who is given discretion to select and maintain specific investment options for participants [] must exercise prudence in selecting and retaining available investment options.” DiFelice v. U.S. Airways, Inc., 497 F. 3d 410, 418 (4th Cir. 2007); see also id. n.3. As a result, they claim, Ford had a fiduciary duty to ensure that each of the funds offered in its plan was a prudent one. The Court’s analysis of the Kuper presumption obviates any need for further consideration of this question. The Court has already concluded that if it would be prudent to hold company stock as part of a diversified portfolio, then a fiduciary will not violate its ERISA duties by offering it as the exclusive holding of an EIAP. As a result, it makes no difference whether Ford’s EIAPs are considered on its own or in conjunction with the other funds: either way, the relevant question is whether Ford stock would have been a prudent component of any hypothetical diversified portfolio. Since the Court has concluded that 17 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 18 of 19 Pg ID 3150 plaintiffs have pleaded a claim under that standard, no further consideration of this objection is required. OTHER MATTERS The plaintiffs sent a letter to the Court dated October 23d, 2008, requesting a settlement conference.3 The defendants have responded that this letter was a violation of the Rules of Civility of this District and request an order prohibiting further such communications. Docket no. 100. The Court will grant both requests. WHEREFORE, it is hereby ORDERED that: Magistrate Judge Pepe’s Report and Recommendation is MODIFIED as set forth herein, and ADOPTED as so modified; Defendants’ motion to dismiss the complaint for failure to state a claim on which relief can be granted is DENIED; All further requests that this Court take any action shall be in the form of motions, and shall be electronically filed before a paper copy is submitted to the Court; and The case is REFERRED to Magistrate Judge Steven Pepe for a settlement conference, to be scheduled by Judge Pepe. 3 This letter also requested certain discovery from Ford. If the matter remains unresolved, the plaintiffs should re-assert this request as a full-fledged motion. 18 2:06-cv-11718-SJM-RSW Doc # 102 Filed 12/22/08 Pg 19 of 19 Pg ID 3151 s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: December 22, 2008 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on December 22, 2008, by electronic and/or ordinary mail. s/Alissa Greer Case Manager 19

=== ORDER GRANTING PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION ===

2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 1 of 24 Pg ID 349 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION STEPHEN J. CONN and HEATHER MILLER, Case No. 2:08-cv-13073 Plaintiffs, HONORABLE STEPHEN J. MURPHY, III v. BOARD OF EDUCATION of THE CITY OF DETROIT, et al., Defendants. / ORDER GRANTING PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION The plaintiffs, tenured teachers in the Detroit Public Schools, seek a preliminary injunction restoring them to their teaching positions, asserting that their termination was in retaliation for their exercise of their First Amendment rights of freedom and assembly. For the reasons stated below, the preliminary injunction will be granted. INTRODUCTION The plaintiffs filed this case on July 16, 2008. They moved for a preliminary injunction on August 6, 2008. On August 7, 2008, the defendants answered the complaint and on August 26, 2008, they filed a lengthy response to the permanent injunction motion. The case was transferred to the undersigned judicial officer on September 5, 2008. On September 9, 2008, the plaintiffs filed a reply brief. The Court on October 24, 2008 gave notice that a hearing would be held on November 5, 2008 on the motion for an injunction. The Court convened a hearing at 2:00 p.m. on that date, but neither any of the defendants nor their counsel appeared before the Court at that time. The Court entered a memo order 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 2 of 24 Pg ID 350 inviting any party to supplement the papers on file in the case and hours before the filing of this order, new counsel entered an appearance for the defendants and reiterated arguments that had previously been made by the defendants. FACTS The facts -- the vast majority of which are undisputed -- are drawn from the Complaint and from the Exhibits to the parties' briefs. Notably, one of those exhibits evidences that the plaintiffs filed on August 30, 2007, a "Charge" with the Michigan Employment Relations Commission asking for relief from the state administrative body which hears employment grievances from Michigan public employees. The Charge resulted in the issuance of an extremely detailed Opinion and Recommended Order by an Administrative Law Judge that was dated June 12, 2008. Plaintiffs Stephen J. Conn and Heather Miller are tenured teachers in the Detroit Public Schools. Compl. ¶¶ 1, 4, 5. In 2007, Conn and Miller were vocal opponents of the plan of the Board of Education of the City of Detroit (the "Board") to close 38 schools due to budget difficulties. Compl. ¶ 13. On May 1, 2007, there were a march and rally in opposition to the closing plan. Compl. ¶ 15-18. The march was organized by a group called BAMN ("Coalition to Defend Affirmative Action, Integration, and Immigrant Rights and Fight for Equality By Any Means Necessary"), of which group Conn and Miller were members. Id. Conn and Miller attended the march, having first received advance permission to be off of work for the demonstration. Compl. Ex. 9 (Decision and Recommended Order of Administrative Law Judge, hereinafter "'Decision and Recommended Order") at p. 6. The march was also attended by some students at Malcolm X Academy Middle School, at least some of whom provided the school 2 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 3 of 24 Pg ID 351 with parental permission slips to attend the march. Id. Conn sought but was denied permission to serve in a formal role as a chaperone. Id. Police officers employed by the Detroit Public Schools were aware of the planned demonstration in advance and were deployed along with video tape technicians along the planned route of the march. Id. The march began at Malcolm X Middle School, proceeded to Cass Tech High School, and was to finish at Northern High School, all in Detroit. Id. When the marchers reached Northern High School, the parties agree that the march and rally appeared to descend into chaos. Some students attempted to bang on the doors and windows of the high school, unsuccessfully exhorting Northern students to walk out of the school. Id. at 7. The Detroit Public School police moved in and shooed the children away from the building. Id. at 8. At some point, pepper spray, or some other irritating aerosol, was used at or near a group of children. Id. Conn and Miller were each arrested at Northern High School by police officers employed by the Board and charged with disorderly conduct and violation of a school ordinance. Compl. ¶ 21. They were released without charges, but were subsequently told that charges were reinstated. Pl. Mot. for Prelim. Inj. Exh. 2, Conn Decl. at ¶ 14. The plaintiffs returned to their respective schools and continued teaching through the end of the school year. Compl. ¶ 21. They continued to actively oppose the school closings during the remainder of the school year. Compl. ¶¶ 23-24. On June 29, 2007, Lamont Satchel, the acting superintendent of the Detroit School District, placed both Conn and Miller on temporary unpaid administrative leave due to conduct at or in connection with the May 1, 2007 rally. Compl. ¶¶ 25, 29 and Exh. 1. Shortly before August 27, 2007, the date that teachers in the Detroit Public Schools were 3 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 4 of 24 Pg ID 352 required to report for a new school year, the Board advised Conn and Miller that they would remain on administrative leave for an indefinite period. Compl. ¶ 27-28. On August 30, 2007, the plaintiffs filed charges with the Michigan Employment Relations Commission (MERC) alleging that the Board and its agents had violated the Public Employment Relations Act ("PERA"), MCL 423.201 et seq., by placing them on administrative leave. Compl. ¶ 30 and Exh. 2. As a result of settlement discussions before a MERC Administrative Law Judge, the Board restored the plaintiffs to paid status in October 2007, and their salaries have continued to be paid until the present time. Compl. ¶ 31. On October 12, 2007, the Board filed disciplinary charges against each of the plaintiffs based upon the events of May 1, 2007. Compl. ¶ 32 and Ex. 3. The Board charged the plaintiffs with placing the students at an unreasonable risk of harm to their health and welfare and unprofessional conduct unprofessional conduct in connection with the events at the protests. Id. Shortly thereafter, the plaintiffs filed an amended charge with MERC, alleging additional employment violations. Compl. ¶ 33 and Ex. 4. From October 4, 2007 through December 12, 2007, the MERC Administrative Law Judge conducted 12 days of hearings on the charges, at which the Board and the plaintiffs were each represented by counsel and had full opportunity to call and to cross-examine witnesses. Compl. ¶ 34, Answer ¶ 34. On May 5, 2008, the Board filed amended charges against Conn and Miller, which once again related to the events of May 1, 2007, and that advised Conn and Miller the Board was recommending their dismissal. Pls. Mot. for Prelim. Inj., Ex. 7. Plaintiffs filed an amended charge at MERC the same day regarding the restated employment charges 4 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 5 of 24 Pg ID 353 brought by the Board. Compl. ¶ 36 and Ex. 6. They also applied to the Wayne County Circuit Court for a temporary restraining order preventing the Board from acting on the proposed discharge until its regular meeting of June 12, 2008. Compl. ¶ 37. The state trial court granted the temporary restraining order, Compl. Ex. 7, and on June 6, 2008, the Board notified Conn and Miller that it would act on the same charges set forth in its May 1, 2008, letter at its next meeting. Pls. Mot. for Inj., Ex. 8. Decision and Recommended Order dated June 12, 2008 On June 12, 2008, the MERC Administrative Law Judge issued a Decision and Recommended Order, finding, among other things, that the Board engaged in unlawful and intentionally retaliatory adverse employment actions against both Conn and Miller based on their engaging in lawful union activity. Compl. ¶ 39 and Decision and Recommended Order, at 16. The Administrative Law Judge found that Conn and Miller were well-known local activists. Decision and Recommended Order, at 4. He found that the defendants were aware of Conn and Miller's activities in opposition to certain policies of the Board. Id. He found that undisputed testimony showed that the Board's president, Jimmy Womack, told Board members Marie Thornton and Annie Carter that he intended to get rid of Conn and Miller over their public opposition to the planned school closures. Id. at 5-6. As to the events of May 1, the Administrative Law Judge found that the Detroit Public Schools presented no evidence that the Conn and Miller were anything other than mere participants in the march. Id. at 7. He found that an "exhaustive courtroom review of the video images of the events of May 1st established no wrongdoing on the part of Conn or Miller." Id. at 15. He found that the arrests of the plaintiffs "appear to have been ordered 5 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 6 of 24 Pg ID 354 pursuant to a desire to facilitate their removal from the workplace, rather than by any legitimate law enforcement concern based on their individual conduct on the scene that day." Id. at 16. Concerning the manner that the charges leveled by the Board against the plaintiffs were prosecuted, the Administrative Law Judge found that the Board disregarded its normal procedures in cases involving teacher discipline. He found that the normal procedure at Detroit Public Schools when teachers are facing possible discipline is to have an investigative meeting between the teachers and management, with union representation and with an opportunity for the teacher to respond to or confront witnesses against them, but that no such meeting was held in this case. Compl. Ex. 9 at 10-11. The Administrative Law Judge found the decision to place Conn and Miller on unpaid leave was unprecedented in the face of uncontradicted testimony that no other Detroit Public School tenured teacher had ever been placed on an unpaid leave of absence pending an investigation or discipline. Id. at 11. He also found that, although the teachers were told that they were being put on administrative leave pending further investigation, in fact no investigation was ever conducted following the May 1, 2007 demonstration. Id. at 11-12. On the issue of retaliation, he found that the evidence before him "overwhelmingly establish that Conn and Miller were not removed from the workplace because of their conduct on May 1st, but rather that the events of May 1st were seized upon as an opportunity to be rid of disfavored workplace activists, or as put in the uncontested words of Board President Womack, to ‘starve them out.'" Id. at 21-22. In his proposed order, given what he termed the "extraordinary record" before him, the "specious and flagrantly pretextual charges of misconduct" and the First Amendment 6 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 7 of 24 Pg ID 355 concerns at stake, the Administrative Law Judge recommended that the Commission grant injunctive relief to the teachers restoring them immediately to their teaching positions, and to any pay, benefits and seniority to which they would otherwise be entitled. Id. at 21-23.1 Further Proceedings On June 19, 2008, a few days after the Administrative Law Judge issued his opinion and recommended order, the Board voted at the motion of Board President Womack to terminate Conn and Miller based upon the amended charges. Compl. ¶ 43 and Ex. 10. The Board has filed numerous exceptions to the Administrative Law Judge's opinion and recommended order, which are currently pending before the full MERC. Defendants' Resp. to Pls. Mot. for Prelim. Inj., Ex. 2. The plaintiffs have likewise appealed their dismissal to the Michigan Teacher Tenure Board. Conn and Miller remain on administrative leave pending the decision of the MERC. They seek an injunction ordering the Board to place them back in their classrooms for this academic year. ANALYSIS Plaintiffs' complaint asserts a claim based on the First Amendment of the United States constitution, arguing that the Board's actions in first placing them on administrative leave and then firing them violate their rights of speech and assembly protected by the First 1 The Court notes that the Board suggests in its briefs that the Administrative Law Judge was biased against the defendants and in favor of the plaintiffs. The Board notes that they moved in the administrative process to have the ALJ disqualified for bias against them. Aside from a statement to this effect in their brief, defendants have offered no evidence at all of bias in their submissions to this Court. 7 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 8 of 24 Pg ID 356 Amendment. Although the complaint does not specifically refer to 42 U.S.C. § 1983, the plaintiffs appear to be treating this as a § 1983 action, and the Court will construe it as a claim under 42 U.S.C. § 1983 as well. I. Subject Matter Jurisdiction Jurisdiction over this matter is based on 28 U.S.C. § 1343(3), which provides original jurisdiction in the district court for actions to redress the deprivation under color of state law of rights secured by the constitution or any act of Congress providing for equal rights of citizens. The defendants assert as a threshold matter that the Court should not hear the plaintiffs' claims because the plaintiffs have failed to exhaust their state administrative remedies. There is, however, no general requirement of exhaustion of state remedies before a plaintiff can bring a § 1983 action. See Chemerinsky, Federal Jurisdiction, § 8.4 (2007); Patsy v. Board of Regents, 457 U.S. 496 (1982). Defendants also argue that the Court should dismiss the case and deny the plaintiffs’ motion for a preliminary injunction because the reinstatement of the teachers is currently being appealed or considered before the MERC, the Wayne County Circuit Court and the Michigan Teacher Tenure Board. The defendants offer no cases in support of their theory that a federal court should dismiss a suit alleging violation of federal constitutional rights under these circumstances, and the Court has found none that stands for such a proposition. Given the unflagging obligation of federal courts to exercise jurisdiction in cases where important federal constitutional principles are at stake and no adequate state or administrative remedy exists for violations of those principles, the Court sees no reason to stay or dismiss the suit or the motion in the present matter. 8 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 9 of 24 Pg ID 357 II. Standards for Injunctive Relief The decision of whether to issue a preliminary injunction lies within the sound discretion of the district court. Golden v. Kelsey-Hayes, 73 F.3d 648, 653 (6th Cir. 1996). The Supreme Court and the Sixth Circuit have noted that "the purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." University of Texas v. Camenisch, 451 U.S. 390, 395 (1981); Six Clinics Holding Corp., II v. Cafcomp Sys., Inc., 119 F.3d 393, 400 (6th Cir. 1997). The Sixth Circuit has advised that "a preliminary injunction is an extraordinary remedy which should be granted only if the movant carries his or her burden of proving that the circumstances clearly demand it." Overstreet v. Lexington-Fayette Urban Co. Gov't, 305 F.3d 566, 573 (6th Cir. 2002) (citation omitted). When considering whether to grant the "extraordinary" remedy of a preliminary injunction, a district court must consider and balance four factors: (1) whether the moving party has a strong likelihood of success on the merits; (2) whether the moving party would suffer irreparable injury without the preliminary injunction; (3) whether issuance of the preliminary injunction would cause substantial harm to others; and (4) whether the public interest would be served by issuance of the preliminary injunction. Hamilton's Bogarts, Inc. v. Michigan, 501 F.3d 644, 649 (6th Cir. 2007). These four factors "are factors to be balanced, not prerequisites that must be met." Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 230 (6th Cir. 2003) (citation omitted). A district court must make specific findings concerning each of the four factors unless fewer are dispositive of the issue. Performance Unlimited v. Questar Publishers, Inc., 52 F.3d 1373, 1381 (6th Cir. 1995); Jones v. City of Monroe, 341 F.3d 474, 476 (6th Cir. 2003) (citations omitted) (court "is not required to 9 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 10 of 24 Pg ID 358 make specific findings concerning each of the four factors used in determining a motion for a preliminary injunction if fewer factors are dispositive of the issue"). A. Likelihood of success on the merits. The first factor to be considered by this Court is whether Conn and Miller have demonstrated a strong likelihood of success on the merits of their § 1983 claim. For the reasons set forth below, they have. 1. Elements of a § 1983 claim for First Amendment Retaliation Conn and Miller claim that the Board violated their constitutional rights by first suspending and then terminating them in retaliation for their public opposition to the Board's policies. To establish a claim for First Amendment retaliation, plaintiffs must show that (1) they engaged in protected conduct; (2) there was an adverse action taken against her "that would deter a person of ordinary firmness from continuing to engage in the conduct"; and (3) "there is a causal connection between elements one and two - that is, the adverse action was motivated at least in part by the plaintiff's protected conduct." Thaddeus-X v. Blatter, 175 F.3d 378, 394 (6th Cir. 1999) (en banc). This Court's analysis of the element of cause "focuses on whether the adverse employment action was motivated in substantial part by the plaintiff's constitutionally protected activity." Sowards v. Loudon County, Tenn., 203 F.3d 426, 431 (6th Cir. 2000) (citation omitted). If a plaintiff meets his or her initial burden, the burden then shifts to the government employer to show by a preponderance of the evidence that the employment decision would have been the same absent the protected conduct. Id. (citing Kreuzer v. Brown, 128 F.3d 359, 363 (6th Cir. 1997); Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 287 (1977 . a. Protected Conduct 10 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 11 of 24 Pg ID 359 The question of whether the activities that Conn and Miller engaged in here are protected for purposes of First Amendment analysis is one of law for the Court to decide. Leary v. Daeschner, 228 F.3d 729, 737 (6th Cir. 2000). The Court notes that the conduct at issue is Conn and Miller's speeches at school board meetings, attendance at the rally of May 1, and participation in a lawsuit against the school closings. There is no question this activity is within the bounds of protected conduct set forth in Pickering v. Board of Education, 391 U.S. 563 (1968) and its progeny. In Pickering, the Supreme Court found that a local Board of Education could not constitutionally terminate a teacher who wrote a letter to a local newspaper disagreeing with funding decisions made by the board. Id. at 568. The Court finds as a matter of law that activities of Conn and Miller at issue here (speaking at Board meetings, participating in rallies, and participating in a lawsuit in opposition to the Board's plans), are the types of First Amendment activities clearly encompassed by the opinion rendered by the Pickering court. The Board relies on the case of Whitsel v. Southeast Local School District, 484 F.2d 1222 (6th Cir. 1973), in support of its argument that the dismissal of the teachers was not in violation of the First Amendment. In Whitsel, a school board dismissed a teacher who left his classroom to speak to students gathered in an unauthorized assembly in the gymnasium to question the dismissal of two student-teachers that had participated in the demonstrations on the Kent State campus against the extension of the Vietnam War into Cambodia. Whitsel, 484 F.2d at 1224-26. The school superintendent went to the gymnasium, explained the reason for the dismissal of the student-teachers, and instructed the students to return to their classes because the assembly was unauthorized. Id. at 1224. The students did not obey the superintendent and asked to hear from Whitsel, who 11 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 12 of 24 Pg ID 360 told them that he had given one of the student-teachers permission to leave, told them that there were political implications in the dismissal of the two student-teachers, and said that the student-teachers might have a case for the American Civil Liberties Union or the Ohio Civil Right Union. Id. The Sixth Circuit distinguished the Pickering case and held that Whitsel's comments were outside the protections of the First Amendment: Here, appellant's remarks were not made in his capacity as a concerned citizen but in the capacity of a school teacher during school hours on school property. Also, they were not made during an authorized assembly where the expression of ideas on issues that permitted different views was appropriate. Instead, he spoke at an unauthorized assembly of students on school property after his principal and superintendent had declared the meeting unlawful and urged the insubordinate students to abandon the proscribed gathering and return to classes. His words in this factual context impliedly countermanded the directions of his superiors and, thus construed, went beyond the mere advocacy of ideas and counselled a course of action. And the course of action impliedly counselled was diametrically opposed to the one he should have urged in obedience to the school regulation that he was required to implement and to the action called for by his superiors. Cf. Hetrick v. Martin, 480 F.2d 705 (6th Cir. 1973). We determine that the record supports the holding of the district court that, under these circumstances, Whitsel was not terminated for the advocacy of ideas but for insubordination. Whitsel, 484 F.2d at 1228-29. The Board here argues that the circumstances in this case are like those in Whitsel and that the Whitsel holding requires the Court to uphold the actions of the Board in this case. The Board's reading of Whitsel, however, is incorrect and its argument is unpersuasive. The plaintiff in Whitsel was an on-duty teacher who left his classroom to speak with students gathered in an unauthorized assembly in their school during school hours. Whitsel, 484 F.2d at 1228-29. The superintendent of the school had already told the students to return to their classrooms when Whitsel spoke to them, and Whitsel spoke while on the job in direct contradiction of the direction of the superintendent. Id. In the case 12 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 13 of 24 Pg ID 361 presently before this Court, however, the actions of Conn and Miller were carried out while they were off of teaching duty, and while they were acting in their capacity as citizens, not teachers. Decision and Recommended Order at 19 ("Both Conn and Miller were on their own time . . . ."). Therefore, even if the Court were to accept the Board's characterization of the facts here and disregard the Administrative Law Judge's finding of a pretext,2 Whitsel is fully distinguishable and inapposite to the facts of this case. Furthermore, in Whitsel , the Court explicitly held that, due to the procedural posture of the case, the question of whether the reason given by the Board for Whitsel's dismissal were pretextual was not before the court. Whitsel, 484 F.2d at 1229 ("We recognize that whenever a violation of First Amendment rights is alleged, the asserted reasons for dismissal must be carefully examined to see if they are mere pretexts for reasons prohibited by the Constitution. However, by stipulating not to consider his pre-May 6 conduct, appellant effectively foreclosed such inquiry"). Id. In the present case, the plaintiffs argue that the defendant Board's proffered reason for terminating them was pretextual, and they offer the opinion of the Administrative Law Judge in support of that argument. The large preponderance of the evidence developed by the Administrative Law Judge in the 2 The ALJ found that Board member Marie Thornton testified without contradiction that then-President Jimmy Womack had asserted, shortly before the events of May 1, 2007, and prior to any disciplinary charges being leveled against the teachers, that Conn and Miller would not be returning to school in the fall, and that he would "starve them out." Decision and Recommended Order, at 5. Conn also testified, without contradiction, that Board members Annie Carter and Jonathan Kinloch had each separately approached Conn and warned him before May 1st that Womack had told Carter and Kinloch that he intended to get rid of Conn and Miller over their public opposition to the planned school closures. Id. at 6. Miller also testified that Womack had directly threatened her job status following a joint appearance on a televised debate that occurred long before the May 1 rally. Id. The ALJ found this testimony to be direct and unrefuted evidence of the pretextual nature of the Board's asserted reasoning for the firings. Id. at 15 13 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 14 of 24 Pg ID 362 MERC proceeding -- only some of which is summarized in footnote 2, supra, certainly demonstrates that the terminations were in fact a pretext for preventing further criticism from or protestations by the plaintiffs. b. Adverse Consequences The second element the plaintiffs must establish in a claim for First Amendment retaliation is that the defendants took action against them "that would deter a person of ordinary firmness from continuing to engage in the conduct." Thaddeus-X, 175 F.3d at 394. This element has also been clearly established on the facts presented to the Court. Conn and Miller were first suspended from their jobs by the Board for a number of months without pay, and then terminated. It is well established that suspension and discharge from employment constitute sufficient adverse consequences for purposes of a First Amendment claim of retaliation and there are no grounds on which to find otherwise here. See Pickering, 391 U.S. at 574-75. c. Causal Connection Finally, and most significantly at this stage of the proceeding, to establish a likelihood of success on the merits for a claim of retaliation, Conn and Miller must show a "causal connection between elements one and two -- that is, the adverse action was motivated at least in part by the plaintiff's protected conduct." Thaddeus-X, 175 F.3d at 394. The plaintiffs' burden here is to show that their suspension and discharge were motivated in substantial part by the fact that they engaged in constitutionally protected activity. Sowards, 203 F.3d at 431. The issue the Court must resolve is quite simply how the plaintiffs must meet their burden of showing the causal connection for purposes of this preliminary injunction motion. 14 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 15 of 24 Pg ID 363 The plaintiffs argue that the Court can find as a matter of law that the third prong of the test is met because the MERC Administrative Law Judge found as fact that the Board disciplined and attempted to discharge Conn and Miller in retaliation for their opposition to its plan to close the schools, and that his findings in the MERC proceeding are entitled to preclusive effect in this action. Plaintiffs' Brief in Support of their Mot. for Prelim. Inj., at 13. The defendants assert that the findings of the MERC Administrative Law Judge are not entitled to preclusive effect because they have objected to his findings and that, therefore, those findings do not constitute the "final judgment" of the MERC. d. Collateral Estoppel The United States Supreme Court has held that, in claims arising under 42 U.S.C. § 1983, a federal court must give the same preclusive effect to state administrative findings that the courts of that state would grant to such findings. University of Tennessee v. Elliott, 478 U.S. 788, 798 (1986); see Travers v. Jones, 323 F.3d 1294, 1296-97 (11th Cir. 2003) (applying University of Tennessee v. Elliott in a First Amendment retaliation claim to preclude plaintiff from contesting factual findings of administrative agency that plaintiff was disciplined for insubordination). Thus, under Elliott, this Court must determine what preclusive effect a Michigan court would give to the Administrative Law Judge's Decision and Recommended Order in the MERC proceeding. In Michigan, collateral estoppel applies when questions of fact essential to an earlier judgment have been actually litigated and determined by a valid and final judgment between the same parties or those in privity with parties. Storey v. Meijer, Inc., 431 Mich. 368, 373 n.3 (1988). The parties must have had a full opportunity to litigate the issues and there must be "mutuality of estoppel." Id. Where, as here, a party seeks to preclude 15 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 16 of 24 Pg ID 364 relitigation on the basis of an administrative decision, the Michigan courts also require that the party show that the administrative decision was adjudicatory in nature, provides a right of appeal, and the Legislature must have intended to make the decision final absent an appeal. Nummer v. Treasury Dept., 448 Mich. 534, 542 (1995). The Michigan Supreme Court held in Nummer that a final decision of the MERC would be entitled to preclusive effect in the courts of the state. Accordingly, pursuant to the law of University of Tennessee v. Elliott, a final MERC ruling would also be given preclusive effect by this Court. If the decision of the Administrative Law Judge here had already been adopted by the MERC, as was the case in Nummer, or if the defendants had not filed timely objections, it is clear that the decision would be preclusive in this Court on the issue of retaliation. The question here is a closer one than that in Nummer, however, because the decision of the Administrative Law Judge has not yet been adopted by the MERC. The defendants in this case argue that the Administrative Law Judge's opinion is not entitled to preclusive effect here due to the authority of the Michigan Supreme Court in Senior Accountants, Analysts & Appraisers Ass'n v. Detroit, 399 Mich. 449 (1976). In Senior Accountants, the Michigan Supreme Court found that the decisions of administrative agencies are final for purposes of collateral estoppel "absent an appeal." Senior Accountants, 399 Mich. at 458. The defendants argue that because in this case the defendant Board and its members have appealed the Administrative Law Judge's opinion and order to the full MERC, the Michigan Supreme Court's statement in Senior Accountants would provide authority for not giving preclusive effect to the Administrative Law Judge's findings. 16 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 17 of 24 Pg ID 365 Defendants, however, make far too much of this rather minor distinction. The issue of what effect a court should give an Administrative Law Judge's opinion on appeal to the MERC was not before the Michigan Supreme Court in Senior Accountants. The plaintiff there had not appealed the Administrative Law Judge's opinion and recommended order within 30 days required by law, Senior Accountants, 399 Mich. at 457, and therefore, the Administrative Law Judge's opinion and order became the final judgment of the MERC by operation of statute. See M.C.L.A. § 423.216 (b). Thus, the court in Senior Accountants did not address the issue facing this Court -- specifically of what preclusive effect a Michigan court would give an opinion of a MERC Administrative Law Judge pending appeal. In support of the argument that the Administrative Law Judge's decision should be given preclusive effect, the plaintiffs point to the Michigan Court of Appeals decision in City of Troy v. Hershberger, 27 Mich. App. 123 (1970), in which the Court of Appeals ruled as Michigan law that a judgment pending appeal is deemed to be res judicata. The plaintiffs also point to the holding of the Michigan Court of Appeals in Temple v. Kellel Distrib. Co., 183 Mich. App. 326 (1990), in which the Court of Appeals extended the holding in City of Troy to find that a determination by the Michigan Bureau of Worker's Disability Compensation was entitled to collateral estoppel effect in a later action even though the Bureau's decision had been appealed. Temple, 183 Mich. App. at 328. Again, neither City of Troy nor Temple is precisely on point or authoritative in this case, but the Court finds both instructive and persuasive. City of Troy dealt with the preclusive effect of a trial court judgment while that judgment was pending appeal; it did address the issue of what effect should be given to an appeal of a hearing officer to the 17 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 18 of 24 Pg ID 366 agency. Temple, on the other hand, analyzed the Workers' Disability Compensation Act, rather than the Michigan Public Employees Relations Act that is at issue in the present matter before the Court. In fact, the Court has been unable to find any case directly addressing the issue of whether and to what extent factual findings by a MERC Administrative Law Judge are entitled to collateral estoppel effect in a state or federal court action while those findings are being appealed to the MERC. For purposes of deciding the instant preliminary injunction motion, however, the Court need not reach the precise issue. Instead, the Court must, under the traditional four prong standard for deciding upon injunctive relief stated above, determine whether the plaintiffs have demonstrated a substantial likelihood of success on the merits of their claims, and not whether the plaintiffs have proven each and every element on every claim of the entire case. The Court therefore concludes that it is entirely appropriate and in fact mandated under relevant First Amendment analysis that the Court look to the Administrative Law Judge's opinion and recommended order in the state MERC proceeding as reliable and persuasive evidence that the plaintiffs were suspended in retaliation for protected conduct. Michigan law requires that both the MERC and any court reviewing a final decision of the MERC give deference to the factual findings of an Administrative Law Judge that conducts a MERC hearing, and the Court, for purposes of this preliminary injunction motion, will give deference to those findings as well. PERA does not set out standards for the MERC to use in reviewing an opinion and recommended order of an Administrative Law Judge. See M.C.L.A. § 423.216 (b). It is clear, however, that the MERC is not free to disregard the findings of a hearing referee, 18 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 19 of 24 Pg ID 367 particularly in cases involving factual determinations and evaluations of credibility. Instead, Michigan courts look to the factual findings of an Administrative Law Judge as part of the overall record in determining whether a final MERC decision is supported by substantial evidence. Michigan Employment Relations Comm'n v. Detroit Symphony Orchestra, Inc., 393 Mich. 116, 124-27 (1974). Michigan courts have reversed MERC factual findings that ignore or fail to give proper weight to the findings of the trial examiner. See Michigan Employment Relations Comm'n, 393 Mich. at 126-27 (reversing MERC finding of anti-union animus in part because of disregard for Administrative Law Judge's factual findings); Warren Education Ass'n v. Warren Consolidated Schools, 2007 WL 1094797 (Mich. App. April 12, 2007) (reversing MERC order dismissing unfair labor practice charge and holding MERC impermissibly ignored and failed to defer to Administrative Law Judge's assessment of witness credibility, therefore incorrectly rejecting Administrative Law Judge' s finding of anti-union animus). In the case before this Court, the Administrative Law Judge conducted 12 days of hearings on Conn and Miller's unfair employment practice claim. All parties were represented by counsel. Those hearings dealt specifically with the activities of the teachers prior to the May 1 demonstration, the teachers' relationship with members of the Board, the facts surrounding the May 1 march, the charges issued against Conn and Miller, any investigations done by the School Board, and the conduct of the members of the school board and the Detroit Public Schools police department. A transcript of more than 2,000 pages was created and sixty-seven trial exhibits were admitted, including CDs containing partial video and audio recordings created by the Detroit Public Schools police department of the events of May 1. The Administrative Law Judge's opinion shows that he received 19 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 20 of 24 Pg ID 368 into evidence and considered the testimony of Conn, Miller, several Detroit Public Schools police officers, Detroit School Board member Marie Thornton, former Interim Superintendent Satchel, Detroit Public Schools superintendent Connie Calloway, Detroit Federation of Teachers President Cantrell, and Cass Tech principal Ashford. All in all, the Administrative Law Judge developed an extremely detailed factual record. Moreover, the Administrative Law Judge wrote a highly detailed 24 page Decision and Recommended Order, in which he addressed specifically the witnesses that testified and judged their credibility. His conclusions were amply supported by the evidentiary record that had been developed. The Administrative Law Judge found the testimony of Conn and Miller that they had not committed misconduct at the May 1 rally to be credible and fully supported by the video and audio evidence. He also found the testimony of the Detroit Public Schools police officers to be lacking in credibility and contradicted by the video and audio evidence. He specifically found on the evidence before him that the plaintiffs had been suspended and threatened with firing in retaliation for speaking out in opposition to the policies of their employer, the Detroit Public Schools. Overall, given these findings by the Administrative Law Judge, and the deference shown by Michigan Courts to an Administrative Law Judge's findings of fact in reviewing final orders of the MERC, the Court finds that Conn and Miller have quite clearly met their burden of showing a substantial likelihood of success on the merits of their First Amendment retaliation claim. B. Irreparable Injury to the Moving Parties The second factor that the Court must consider in deciding whether to issue a preliminary injunction is whether the plaintiffs have shown that they would suffer irreparable 20 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 21 of 24 Pg ID 369 injury without the preliminary injunction being entered. The defendants argue that the plaintiffs cannot show irreparable harm because their salaries and benefits continue to be paid, despite their termination, and that their pay status and benefits will remain the same until their administrative rights have been fully exhausted. (Defendants' Brief in Support of Response in Opposition to Plaintiffs' Motion For a Preliminary Injunction at 12-13). While this might be true in an ordinary case of discharge, in the context of a claim alleging retaliatory discharge for exercise of First Amendment rights, the Sixth Circuit has found that "an individual, who has been subjected to direct and intentional retaliation for having exercised the protected constitutional right of expression, continues to suffer irreparable injury even after termination of some tangible benefit such as employment." Newsome v. Norris, 888 F.2d 371, 378 (6th Cir. 1989) (citations omitted). "The loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Id. (citations omitted). Therefore, the Court finds that the plaintiffs have persuasively demonstrated that they will suffer irreparable injury if an injunction does not issue. C. Irreparable Injury to Others The third factor the Court must consider is whether issuance of the injunction would cause irreparable injury to others. The Board does not argue that the defendants themselves will suffer any irreparable harm should the Court grant the requested injunction. Instead, they essentially argue that the public interest will be harmed by issuance of the injunction. The Court finds in this case, therefore, that the factor of irreparable injury to others merges with the factor of the public interest regarding the issuance of a preliminary injunction, and the Court addresses both prongs immediately below. D. Public Interest in Issuance of the Preliminary Injunction 21 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 22 of 24 Pg ID 370 The final factor that the Court must consider is whether granting the preliminary injunction in this case would serve the public interest. The two sides offer dramatically different views of this point. The Board argues that the public interest would suffer if the teachers were reinstated to their positions because, they argue, "teachers who are entrusted with the welfare of students pursuant to District policy could violate it with impunity." Defendants' Brief in Support of Opposition to Mot. for Prelim. Inj., at 13. Specifically, the Board argues that: Plaintiffs' actions include, but are not limited to, playing a significant role in a disruptive demonstration designed to interfere with the operation of two DPS schools; refusing to obey lawful orders to disperse a riotous crowd of students; and advocating to students to do likewise. Id. The defendants argue that returning the plaintiffs to the classroom environment would only serve to condone the plaintiffs' misconduct. Id. The plaintiffs argue, to the contrary, that the public interest will be served by the reinstatement of the teachers. They cite the Sixth Circuit Court of Appeals' decisions in Newsome and in Bell v. Johnson, 308 F.3d 594 (6th Cir. 2002) for the proposition that the public interest is served by remedying discrimination against persons for the exercise of their First Amendment rights, which, if not remedied, may result in the chilling of free expression. While the Board undoubtedly has a strong interest in maintaining school discipline, the finding of the MERC Administrative Law Judge that the Board's articulated rational for firing the teachers was pretextual severely undercuts any public interest rationale for the Board's continuing separation of the two plaintiff teachers from their classrooms. Put another way, there can be no public interest concerns afforded to what a myriad of evidence developed 22 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 23 of 24 Pg ID 371 in a state administrative proceeding demonstrates to be highly impermissible, apparently dishonest, and constitutionally violative action to stand. The Court finds, based on the entire record before it, that the plaintiffs' actions at issue were exercised in full pursuit of their fundamental First Amendment rights of speech and freedom to assemble. The governmental desire of the defendant Board to impose order may not impermissibly infringe on the teachers' First Amendment rights. And there is no evidence at all in the record before the Court suggesting that Conn and Miller are anything other than competent teachers; indeed, there is no assertion by the defendants that they could be appropriately sanctioned for anything other than their conduct at the May 1 rally. On the record before this Court, and in light of the activities asserted by the plaintiffs in exercising their fundamental rights of speech and assembly, the Court finds that the public interest will be served by issuing an injunction returning the teachers to their teaching positions. CONCLUSION Upon careful consideration of the entire record in this case to date, and for all of the reasons stated above, the Court finds that the plaintiffs Conn and Miller have met their burden of demonstrating that they are entitled to preliminary injunctive relief, that they should be returned to the schools and to the teaching positions they held prior to their removal from the schools in June 2007, and that they are highly likely to succeed on the merits of this case. The Court will therefore fashion an appropriate order. ORDER Wherefore, it is hereby ORDERED that Plaintiffs' Motion for Preliminary Injunction is GRANTED. The defendant Board of Education of the City of Detroit must immediately 23 2:08-cv-13073-SJM-PJK Doc # 14 Filed 11/06/08 Pg 24 of 24 Pg ID 372 return the plaintiffs, Stephen J. Conn and Heather Miller, to their teaching positions within the Detroit Public Schools in a school and classroom appropriate to their seniority status. The Court will issue a scheduling order governing future dates in this litigation within ten days. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III UNITED STATES DISTRICT JUDGE Dated: November 6, 2008 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on November 6, 2008, by electronic and/or ordinary mail. Alissa Greer Case Manager 24

=== United States Student Association, et. al. v. Terry Lynn Land et. al. ===

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION Case No. 2:08-cv-14019 HONORABLE STEPHEN J. MURPHY, III UNITED STATES STUDENT ASSOCIATION FOUNDATION, as an organization and representative of its members; AMERICAN CIVIL LIBERTIES UNION FUND OF MICHIGAN, as an organization and representative of its members; and AMERICAN CIVIL LIBERTIES UNION OF MICHIGAN, as an organization and representative of its members, Plaintiffs, v. TERRI LYNN LAND, Michigan Secretary of State; CHRISTOPHER M. THOMAS, Michigan Director of Elections; and FRANCES MCMULLAN, City Clerk for the City of Ypsilanti, Michigan, in their official capacities, Defendants. / ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION This lawsuit involves a challenge to the State of Michigan's election practices. The plaintiffs initiated the case by filing a complaint on September 17, 2008, and simultaneously requested both the entry of a preliminary injunction and expedited hearing of the matter. The defendants filed a brief opposing the plaintiffs' motion for preliminary injunction on September 26, 2008, and the plaintiffs filed a reply brief on September 29, 2008. All three of these filings exceeded the page limitations for such pleadings and in all three instances, the Court granted motions to exceed page limits. All filings have been supported by voluminous attachments and exhibits. The Court held a lengthy hearing on the motion for preliminary junction on September 30, 2008. None of the defendants have filed an answer to the complaint. INTRODUCTION The plaintiffs challenge two separate practices of the defendants, all of whom are Michigan election officials. Each of the challenged practice involves the marking of voter registrations as "rejected" or "cancelled." The plaintiffs first challenge the Michigan Secretary of State's practice of cancelling voter registrations of Michigan voters who apply for driver's licenses in other states. Secondly, they object to a Michigan statute requiring the automatic "rejection" of new registrations if, after the state mails a voter ID card to the address provided on the voter's application, the card is returned by the post office as undeliverable to that address. The plaintiffs challenge these practices as forbidden by certain provisions of the constitution and by various state and federal statutes. The facts of the matter are largely undisputed. FACTS I. Background – Michigan’s Voter Registration Regime Michigan's statewide voter registration database is known as its Qualified Voter File ("QVF"). Local clerks and employees in the Michigan Department of State process completed voter registration application forms by entering the potential voter's name and other information into the QVF. Shortly thereafter, the official prints and mails a voter identification card to the potential voter. Subsequently, the Department of State generates local voter lists from the QVF. These are used by local election officials on election day to determine whether persons appearing at the polls are registered to vote. A voter's registration in the QVF may have one of several status marks or labels attached to it. The default status for a registration is "active," meaning that there are no 2 further administrative obstacles to a registrant being able to vote. If, however, a potential voter's registration materials are deemed insufficient, the voter's information will nonetheless be entered into the QVF, but can be marked as "rejected." Similarly, when a voter is determined to be no longer eligible, his or her registration record is retained in the QVF, but marked as "cancelled." Because the names of voters whose registrations are marked as "rejected" or "cancelled" will not appear on precinct lists generated from the QVF, these voters will not be permitted to cast regular ballots if they appear at the polls on election day in Michigan unless they can produce an original receipt of their voter registrations. The QVF also permits registrations to be marked as "verify" or "challenged" without being entirely cancelled. These markings allow the registrant's name to appear on the precinct lists generated from the QVF, but will appear on those lists as directions to local poll workers to require various forms of confirmation of the voter's eligibility before permitting a vote to be cast. Thus, on a precinct list, a marking of "verify" next to a voter's registration requires the voter to provide some sort of verification of eligibility before casting a ballot. See, e.g., M.C.L. § 168.509aa (requiring voter to affirm residence at polls if voter fails to respond by 30 days before election to notice that local clerk received "reliable information" that voter has moved out of jurisdiction). Similarly, a marking of "challenge" next to a voter's name seems, under the statute, to require that a more stringent assessment of a voter's eligibility be conducted at the polls. See M.C.L. § 168.509cc. II. The Challenged Practices A. "Rejection" of registrations when the voter's ID card is returned as undeliverable. As noted, after a potential voter's registration information is received and entered into the QVF, the system generates a voter ID card that is mailed to the voter. If, however, an 3 original voter ID card is returned by the United States Postal Service as being undeliverable to the address listed on the registration, M.C.L. § 168.449(3) requires the clerk to "reject the registration and send the individual a notice of rejection." See also M.C.L. § 168.500c (person whose original voter ID is returned as undeliverable "shall be deemed not registered under this act.") As a result, the name of an applicant whose voter ID card is returned as undeliverable will not appear on the local voter rolls. When a registration is "rejected" in this manner, the city or county clerk sends out a notice of rejection to the voter. The notice of rejection is accompanied by a reply card that offers the potential voter a chance to complete his or her registration by correcting the address information, or by another version of the card that simply states the necessity of re-registering should the recipient wish to vote. In this opinion, the Court will subsequently refer to this sequence as the "undeliverable ID practice." The Court finds that from January 1, 2008, until September 25th, 2008, the State of Michigan "rejected" 1,438 voter registration applications as a result of the undeliverable ID practice. Thomas aff., docket no. 15 ex. A, at ¶ 6. This practice described above differs from the procedures required by M.C.L. § 168.449(3) when a duplicate voter ID card is returned as undeliverable. In that case, the local clerk is directed to provide a voter with an opportunity to confirm or correct the voter's address. Even if the voter fails to confirm or correct the address, the registration will not be cancelled, but marked by a precinct worker as "verify" or -- if the address confirmation form is also returned as undeliverable -- as "challenged." See M.C.L. 168.509aa(3) and (4) (explaining procedures required by § 168.449(3 . B. Cancellation of registrations on the voter's application for a driver's license in another state. 4 In addition to managing the state's voter rolls, the Michigan Secretary of State also has authority over Michigan driver's license records. Since most states require an applicant for a driver's license to surrender any license the applicant holds from another state, at the time of application the Secretary regularly receives records of surrendered Michigan driver's licenses from her counterparts in other states. At issue in this case is the Secretary's specific practice of cross-referencing the numbers on surrendered licenses against the driver's license numbers listed in the state's QVF, and then marking any matching voter registrations as "cancelled."1 See Thomas aff., docket no. 15 ex. A, at p. 30. The sequence described in this paragraph will subsequently be referenced in this opinion as the "driver's license practice." When a match of the sort described above occurs, a local clerk must send to the affected voter a reply card that permits the affected voter to state that his or her absence from Michigan is only temporary and that he or she remains register to vote. If the voter makes an affirmation of this sort, the voter's registration is returned to "active" status by the Secretary. The reply card also states that "[i]f the reply card is not returned, you will be asked to confirm your address at the polls on Election Day. If the reply card is not returned and you do not vote within 30 days, your voter registration will be canceled."2 ANALYSIS 1 It is not clear to the Court whether this practice is required by state law. M.C.L. § 168.500h requires the Secretary to conduct the cross-check process and to notify local clerks of the results. The statute further provides that a match "shall constitute reliable information that the registered elector has removed from the municipality." Id. But the statutory section's only directive to local clerks is to "proceed in compliance with section 513," id., a section that has been repealed. Regardless of whether the practice is required, there is no dispute between the parties that the Secretary actually is directing cancellations in this manner. 2 The language quoted here from the reply card does not appear to be accurate, since at the time of receipt of the card the voter's registration has already been cancelled. But this apparent inaccuracy does not underlie the plaintiffs' challenge to the practice. 5 I. Plaintiffs' Legal Challenges The plaintiffs assert a wide variety of legal theories in support of the unlawfulness of the two practices governing voter registrations in which Michigan engages. The heart of the plaintiffs' legal attack, however, is grounded in Section 8 of the National Voting Rights Act (the "NVRA," or "Act"), codified at 42 U.S.C. §§ 1973 et seq. More specifically, subsection 1973-gg(6)(d) of the Act states the exclusive procedures by which a state may “remove the name of a registrant from the official list of eligible voters in elections for Federal office on the ground that the registrant has changed residence.” Removals are permitted only in two situations: The first situation in which a registered voter can be removed from the rolls is when a registrant confirms the disqualifying address change in writing. 42 U.S.C. § 1973gg-6(d)(1)(A). The second situation occurs when (a) the state sends the registrant, by forwardable mail, a postage-prepaid return form by which the registrant can update his address information, and (b) the registrant neither returns the form nor votes or appears to vote in the next two general elections for Federal office. Id. at § 1973gg-6(d)(1)(B). The plaintiffs claim that both the undeliverable ID practice and the driver's license practice are deregistrations of registered voters on the basis of a change in residence, within the meaning of the NVRA. If their characterizations are accurate, it follows that the practices violate the NVRA, since the defendants -- throughout the short history of this litigation -- have conceded that the procedures provide neither the notice nor the waiting period mandated by 42 U.S.C. § 1973gg-6(d). The plaintiffs therefore seek a declaration that the practices are unlawful, and request that the Court enjoin the defendants to cease the practices, to restore to the rolls all registrants marked "rejected" or "cancelled" pursuant to the practices since January 1, 2006, and to preserve all records related to such cancellations until the end of 2009. 6 II. Standing to Sue One overriding and threshold issue is whether the plaintiffs have standing to sue. Although the defendants have not moved for dismissal based on lack of standing, both sides raise the issue in their briefs on the instant motion and the Court provided counsel ample opportunity to address the matter during oral argument. All parties surely recognize that “[b]ecause the standing issue goes to this Court's subject matter jurisdiction, it can be raised sua sponte.” Loren v. Blue Cross & Blue Shield of Mich., 505 F. 3d 598, 607 (6th Cir. 2007). The Court therefore addresses standing here. A. The Legal Standard. To demonstrate the existence of a case or controversy of the kind that a federal court is constitutionally authorized to hear, a plaintiff must show that “‘(1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.’” Cleveland Branch, NAACP v. City of Parma, 263 F. 3d 513, 523-24 (2001) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167, 180-81 (2000 . Here, the plaintiffs are not natural persons, but instead associations of persons. “There is no question that an association may have standing in its own right to seek judicial relief from injury to itself and to vindicate whatever rights and immunities the association itself may enjoy.” Am. Canoe Ass’n, Inc. v. City of Louisa Water & Sewer Comm’n, 389 F. 3d 536, 544 (6th Cir. 2004) (quoting Warth v. Seldin, 422 U.S. 490, 511 (1975 . Further, regardless of whether an association of persons would not have standing based on its organizational interests, it will be able to sue as a representative of its membership “when 7 its members would otherwise have standing to sue in their own right, the interests at stake are germane to the organization's purpose, and neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Cleveland Branch, 263 F. 3d at 524 (quoting Friends of the Earth, 528 U.S. at 181 (2000 . B. Level of Showing Required. "Since they are not mere pleading requirements but rather an indispensable part of the plaintiff's case, each element [of standing] must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Lujan v. Defenders of Wildlife, , 561 (1992) (quoted in Sault Ste. Marie Tribe of Chippewa Indians v. U.S., 288 F. 3d 910, 915 (6th Cir. 2007 . Thus, in those cases when a defendant moves for dismissal based on a plaintiff’s lack of standing, a court “must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Kardules v. City of Columbus, 95 F. 3d 1335, 1346 (6th Cir. 1996) (quoting Warth v. Seldin, 422 U.S. at 501). In this sua sponte inquiry, the Court will apply the standard stated above and further notes that under the standard, if the allegations in the complaint do not establish standing, “it is within the trial court's power to allow or to require the plaintiff to supply, by amendment to the complaint or by affidavits, further particularized allegations of fact deemed supportive of the plaintiff's standing.” Warth, 422 U.S. at 501. It is only at trial that a plaintiff bears the burden of proving facts supporting standing, along with the elements of its case. Lujan, 594 U.S. at 56. The plaintiffs in the present suit claim that they have adequately alleged facts supporting their standing, both in their own rights and as representatives of their members. The Court will first explain why the plaintiffs have not alleged a sufficient injury to their 8 organizational interests to have standing in their own rights, and then set forth the reasons for the Court's conclusion that the plaintiffs have standing to sue as representatives of their members. C. Injury In Fact. 1. The Legal Standard. A person who has actually been harmed or faces certain future harm obviously presents the kind of injury in fact required for standing to sue the party by whom he or she was or will be injured. But, as plaintiffs note, even a likelihood of future harm, which may or may not materialize into actual injury for the plaintiff, qualifies as an injury in fact for purposes of standing analysis. This principle has been repeatedly applied in election-law cases decided by the United States Court of Appeals for the Sixth Circuit and various lower courts within it. Sandusky County Democratic Party v. Blackwell, 387 F. 3d 565 (6th Cir. 2004) involved, among other things, a challenge to Ohio’s requirement that a poll worker determine that a voter of questionable eligibility was at the correct precinct polling place before being permitting the voter to cast a provisional ballot. Id. at 571. The plaintiff organizations argued that human errors in compiling the rolls, or in determining whether a given voter's name was on them, could result in some of their members mistakenly being wrongfully denied the right to vote on this basis. Since these mistakes could occur up to the moment a voter was turned away from the polls, however, they plaintiffs could not beforehand which if any of their members would actually be disenfranchised in this fashion. Nevertheless, the Sixth Circuit held that they had standing based on the increased risk of disenfranchisement faced by all their members as a result of the “inevitable . . . mistakes” of poll workers. Id. at 574. 9 Other cases have adopted similar reasoning. In Stewart v. Blackwell, 444 F. 3d 843 (6th Cir. 2006), vacated as moot, 473 F. 3d 696 (6th Cir. 2007), the Sixth Circuit found several individual plaintiffs to have standing to claim that the punch-card voting machines used at their polling places were unlawfully unreliable, again on a theory that each plaintiff faced an increased risk of having her vote counted improperly as a result of the alleged unreliability. Although the judgment in that case was vacated as moot when Ohio abandoned the use of the machines in question, its reasoning on the standing issue is fully consistent with that of Sandusky County. Two cases decided by the district courts have also applied this standard as well. In both Summit County Democratic Central and Executive Committee v. Blackwell, No. 5:04CV2165, 2004 WL 5550698 (N.D. Ohio Oct. 31, 2004), and Spencer v. Blackwell, 347 F. Supp. 2d 528 (S.D. Ohio 2004) district judges found the plaintiffs to have standing to sue based on the risk that they would be wrongfully disenfranchised by Ohio’s laws permitting at-the-polls challenges to voters’ qualifications. To establish representative standing in this case, then, the plaintiffs must plead that at least one of their members either actually has been or will be wrongfully disenfranchised by each of the complained-of practices, or that they face some risk of disenfranchisement. By contrast, to establish standing in their own right, the plaintiffs must plead that such wrongful disenfranchisements, or the risks thereof, have harmed them as organizations in some concrete and meaningful way. Under either theory, plaintiffs' standing will ultimately have to be grounded in the deprivations of voting rights caused by the Secretary's allegedly unlawful practices. 2. Standing as organizations. 10 The plaintiffs claim that they have alleged sufficient harm to their organizations as a whole to have standing in their own rights. Each of the plaintiffs claims an interest in politically empowering the communities they serve, which interest they further by, among other things, conducting voter registration drives. Compl. at ¶¶ 2-3. Nevertheless, "a mere interest in a problem is not . . . sufficient to confer standing on an organization." Greater Cincinnati Coalition for the Homeless v. Cincinnati, 56 F. 3d 710, 716 (6th Cir. 1995) (citing Sierra Club v. Morton, 405 U.S. 727, 739 (1972 . Instead, the plaintiffs must show that their organizations themselves, as opposed to the ideals they pursue, have suffered some kind of concrete harm as a result of the alleged disenfranchisement. To take the most obvious example, if the plaintiffs' expenditures of time and money on voter registration drives have been rendered a waste in any significant measure because the voters they registered at those drives were unlawfully taken off the rolls, that would be sufficient injury to confer standing. Here, though, the plaintiffs have alleged that some of their members are among the voters who face disenfranchisement, but do not allege, either expressly or by implication, that they as organizations had any concrete involvement in the registration of those voters. Even if the organizations had actually registered such voters, the complaint cannot fairly be read to allege that the number of such disenfranchisements was great enough to have had the required impact upon the organization's interests as a whole.3 Nor have the plaintiffs alleged in any other way that the disenfranchisements harm their concrete organizational interests, as opposed to the organizations' more abstract social goals. 3 Of course even a single disenfranchisement would support standing for the disenfranchised person to sue as an individual, or for an organization to which he or she belonged to sue in a representative capacity. That is why, as the Court will explain below, the plaintiffs have pleaded facts establishing representative standing in this case. 11 Therefore, in the view of the Court, in order to proceed on a theory of organizational standing the plaintiffs would be required to amend their complaint to include more specific allegations as to the nature and manner of the harm or potential harm to their organizations. 3. Standing as representatives of the plaintiffs' members The plaintiffs additionally claim standing not just as organizations, but as representatives of their members who individually face disenfranchisement. Attacking this claim, the defendants argue that the plaintiffs have not identified any individual, much less one of their members, who they claim to have been harmed by the practices of which they complain. The plaintiffs have, however, pleaded the existence of such persons among their membership. Specifically, paragraphs 73 and 88 of the complaint allege that the out of state driver's license application and undeliverable ID practices, respectively, "present[] the real and immediate threat that such members will be disfranchised." Compl. ¶¶ 73, 88. While these allegations are conclusory, in light of the plaintiffs' other allegations, and "constru[ing] the complaint in favor of the complaining party,” Kardules v. City of Columbus, 95 F. 3d 1335, 1346 (6th Cir. 1996), the facts required for standing follow from these claims by necessary implication. With respect to the undeliverable ID card practice, paragraph 73 can fairly be read as a claim that some of plaintiffs' members have recently registered to vote, but have not yet received their voter ID cards -- so as to be at risk of wrongful disenfranchisement if human error causes them to be returned as undeliverable. The paragraph can also be read to claim that other of plaintiffs' members have actually been wrongfully removed from the rolls pursuant to this practice, and will almost certainly be denied the right to vote in the upcoming election. 12 With respect to the out of state driver's license application practice, paragraph 88 necessarily implies that some of plaintiffs' members have applied or are currently planning on applying for out-of-state driver's licenses without actually surrendering their Michigan residence. The paragraph also implies that some of plaintiffs' members have indicated or plan to indicate on their applications that their listed address is not for voter-registration purposes, and that they were or will be unable or unwilling to return the reply card from the state in time to be restored to the active status. Thus, once the logical implications of the sparse language of the complaint are considered, the Court concludes that it satisfies -- just barely -- the requirement of alleging injury in fact to the plaintiffs' membership, so as to support representative standing to challenge both practices at issue here. D. Causal Connection Between the Injury and the Challenged Practices. Michigan claims that any injury suffered by the plaintiff results not from the Secretary’s adverse voter-registration actions, but rather from the actions of the voters which precipitate the Secretary’s decisions. This argument is plausible, but without merit. With regard to the undeliverable ID practice, it does not appear that an eligible voter who gives his correct address could do anything differently to avoid the risk that his or her card would be misaddressed or misdelivered, and as a result returned as undeliverable. With respect to the out of state driver's license application practice, it is true that a voter's registration will not be cancelled if he or she does not apply for a license from another state, and thus that any disenfranchisement is, in a superficial sense, "caused" by that action. But it is equally plausible to conclude that disenfranchisement may caused by the defendants' allegedly unlawful actions in cancelling the voter's registration. The Court divines no reason, and 13 defendants offer none, why the first of these "causes" is the only one that should count in its analysis of the plaintiffs' standing to sue. E. Redressability Michigan argues against the redressability requirement on the sole ground that because its cancellation-notification and provisional-ballot procedures prevent any voters from actually being disenfranchised, there is no injury to redress. This argument is redundant of the argument the State makes in opposing a finding of injury in fact, and is addressed above in the Court’s consideration of that element of the standing test. In other respects, it is clear that the disenfranchisement alleged by the plaintiffs will cease if, as plaintiffs request in this action, the defendants are ordered to stop rejecting and cancelling the relevant voter registrations, and restore registrations already rejected or cancelled. Therefore, the redressability requirement has been met in this case. F. Additional Representative Standing Requirements. The complaint states that the plaintiff United States Student Foundation has as "a cornerstone" of its activities "helping students make their voice heard at the ballot box, including through non-partisan voter registration drives," and that its "national electoral project focuses on building strong peer-to-peer student electoral coalitions and maximizing voter turnout among college populations." Compl. at ¶ 2. Likewise, the plaintiff ACLU Fund "is extensively involved in a variety of voter empowerment initiatives throughout Michigan, including voter education, collection and analysis of voting irregularities, advocacy for positive election reform, and -- when necessary -- litigation to ensure the protection of voters' rights under the law." Id. at ¶ 3. Disenfranchisement, the injury alleged here, seems obviously germane to these organizational purposes, and the defendants do not contest this point. 14 Finally, participation by individuals “is ‘not normally necessary when an association seeks prospective or injunctive relief for its members.’” Sandusky Co. Democratic Party v. Blackwell, 387 F. 3d 565, 574 (6th Cir. 2004) (quoting United Food & Commercial Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 546 (1996 . In this matter, the defendants have not identified any need for individual participation, and the Court does not see the necessity for it in seeking the relief requested. G. Conclusion -- Standing to Sue. The plaintiffs have pleaded standing, as representatives of their members, to seek the relief they request. Should this case progress to trial, they will bear the additional burden of proving what they have pleaded in order to conclusively establish their standing to sue. III. Preliminary Injunction Motions. The decision of whether or not to issue a preliminary injunction lies within the sound discretion of the district court. Golden v. Kelsey-Hayes, 73 F.3d 648, 653 (6th Cir. 1996). The Supreme Court and the Sixth Circuit have noted that "the purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981); Six Clinics Holding Corp., II v. Cafcomp Sys., Inc., 119 F.3d 393, 400 (6th Cir. 1997). The Sixth Circuit, however, has advised that "a preliminary injunction is an extraordinary remedy which should be granted only if the movant carries his or her burden of proving that the circumstances clearly demand it." Overstreet v. Lexington-Fayette Urban Co. Gov't, 305 F.3d 566, 573 (6th Cir. 2002) (citation omitted). When considering whether to grant the "extraordinary" remedy of a preliminary injunction, a district court must consider and balance four factors: (1) whether the moving party has a strong likelihood of success on the merits; (2) whether the moving party would 15 suffer irreparable injury without the preliminary injunction; (3) whether issuance of the preliminary injunction would cause substantial harm to others; and (4) whether the public interest would be served by issuance of the preliminary injunction. Jones v. City of Monroe, 341 F.3d 474, 476 (6th Cir. 2003) (citations omitted). These "are factors to be balanced, not prerequisites that must be met." Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 230 (6th Cir. 2003) (citation omitted). A district court must make specific findings concerning each of the four factors unless fewer are dispositive of the issue. Performance Unlimited v. Questar Publishers, Inc., 52 F.3d 1373, 1381 (6th Cir. 1995); Jones, 341 F.3d at 476 (citations omitted) (a court "is not required to make specific findings concerning each of the four factors used in determining a motion for a preliminary injunction if fewer factors are dispositive of the issue."). A. Likelihood of Success on the Merits. 1. Lawfulness of the Practices. a. The undeliverable ID practice. The parties' dispute over the legality of the undeliverable ID practice essentially boils down to a disagreement over the meaning of the word "registrant," as it appears in the NVRA. As the Court noted earlier, when a voter's original voter ID card is returned to a local clerk as undeliverable, the clerk marks the voter's registration in the QVF as "rejected,"4 without following the procedures mandated by the NVRA for removing voters 4 There apparently is no dispute that such a person has been "removed . . . from the official list of eligible voters" within the meaning of 42 U.S.C. § 1973gg-6(d)(1), despite the fact that his or her name remains listed in the QVF. The Court concludes that persons designated as ineligible to vote have in fact been so removed, even if their registrations appear in the same document with voters who remain listed as eligible. In any event, the precinct lists are also indisputably "official list[s] of eligible voters," and if a voter's registration has been rejected or cancelled, it is clearly removed when those lists are compiled from the QVF. 16 from the rolls based on a change of address.5 The NVRA, however, provides that only "registrants" enjoy the protection of these procedures. Plaintiffs therefore claim that a potential voter who sends in registration materials becomes a "registrant" under the NVRA as soon as a Department of State employee or a local clerk processes the materials and enters the voter's name into the QVF. By contrast, the defendants argue that a potential voter's registration is actually not effective until the voter receives his or her voter ID card. If the defendants prevailed on this point, the Court would have little option but to conclude that the undeliverable ID practice does not remove "registrants" from the rolls, because the potential voters whose registrations are marked "rejected" after their cards are returned as undeliverable would never have been registered in the first place. The parties cite what appear to be dueling statutes to establish their respective positions on the issue of when a potential voter becomes registered to vote as a matter of Michigan law. Defendants point out that M.C.L. § 168.500c states that a person whose original voter ID is returned as undeliverable "shall be deemed not registered." In response, the plaintiffs rely upon M.C.L. § 168.509o(2), which provides that "[n]otwithstanding any other provision of law to the contrary . . . a person who appears to vote in an election and whose name appears in the qualified voter file for that city, township, village, or school district is considered a registered voter." 5 It could be argued that any removals of voters produced by the undeliverable ID practice are made on the grounds that the removed voters have never shown that they have a Michigan residence in the first place, rather than that they have moved away from the undeliverable addresses, and that § 1973gg-(d) therefore does not apply in this circumstance at all. The defendants, however, do not make this argument, apparently because failure to prove residence is not a permissible ground for removal under the NVRA. The Act provides that a registrant may be removed from the rolls based only on his own request, criminal conviction, mental incapacity, the voter's death, or the voter's change of residence. 42 U.S.C. § 1973gg-6(a)(3) and (4). Thus, if the plaintiffs are correct that the undeliverable ID practice actually does remove already-registered voters, change of residence is the only possible ground for such removals under the NVRA, and the § 1973gg-6(d) provisions will govern the removals. 17 The Court regards this dispute as largely irrelevant, however, because making the question of who is a "registrant" a matter of state law would frustrate the NVRA's purpose of regulating state conduct of elections, by essentially permitting states to decide when they will be bound by the Act's requirements. If Michigan can label potential voters who have not received their IDs as not "registered" under the NVRA, nothing is to stop it from attaching that same label to any other group of people, and thus from circumventing the procedures mandated by the NVRA whenever it sees fit. Instead, the Court concludes that whether a potential voter is a "registrant" entitled to the NVRA's protections is clearly a question of federal law, to be answered by a careful consideration of the substance of the potential voter's status in the state registration program in question. Indeed, the plain language of the NVRA virtually dictates that a person be regarded a "registrant" within the meaning of that statute at the moment his or her name appears on "the official list of eligible voters." See 42 U.S.C. § 1973gg-6(d)(1).6 In Michigan, as noted above, this list is the QVF (exclusive of registrations designated "rejected" or "cancelled") and the individual precinct rolls generated from it. Thus, the lawfulness of the undeliverable ID practice ultimately hinges on whether Michigan lists a potential voter as permitted to vote on the QVF as soon as it processes his or her registration application, without waiting to determine whether it will be returned as undeliverable. In other words, the central question is: if a potential voter's ID card were to be returned as undeliverable only after an election has intervened, would the voter's QVF status have permitted him or her to vote in that 6 Since the statute only governs when a registrant can be removed from the list of eligible voters, it could be construed in the strictest sense to permit a state never to place some or all of its "registrants" on that list in the first place. But this interpretation would have a similar effect of permitting states to follow NVRA removal procedures only when they saw fit, and thus of completely neutering those procedures. It is also theoretically possible that some persons whose names appear on the list of eligible voters are nevertheless not "registrants." The defendants here, however, make no such contention with respect to potential voters whose registrations were affected by the undeliverable ID practice. 18 election in the meantime? At the hearing on this motion, counsel for the defendants represented that the answer to these questions is "yes." In fact, counsel stressed at the hearing that a potential voter whose ID is returned as undeliverable may nonetheless cast a regular ballot on election day if he or she presents a receipt of registration at the polls. Since the Court accepts these facts as true, the Court also concludes that a potential voter in Michigan is a "registrant" under the NVRA the moment the state processes his or her registration, and that the voter may only have his or her status changed to one that would not permit a valid vote (regardless of whether Michigan calls the change "rejection," "cancellation," or anything else) pursuant to the provisions of the statute. In Ass'n of Cmty. Orgs. for Reform Now v. Miller, 912 F. Supp. 976 (W.D. Mich. 1995) (hereinafter "ACORN"), the court took a contrary view, and found Michigan's categorization of voters as registered or unregistered to be conclusive of the questions involved. In support of its position, the Western District of Michigan cited portions of the NVRA's legislative history reflecting a congressional desire to leave the states "discretion" to tailor their notification procedures to prevent fraud. Id. at 987 (quoting Sen. Rep. No. 6, 103d Cong., 1st Sess., at 30 (1993); H.R. Rep. No. 9, 103d Cong., 1st Sess., at 14 (1993), U.S. Code Cong. & Admin. News 1993 at 105, 118, 134). While such discretion is undoubtedly important, the terms of the NVRA, which the Court reads to be clear and unambiguous on the issue, say absolutely nothing about it. Moreover, the state's discretion can be appropriately preserved within the provisions of § 1973gg-6(d), without making its procedures entirely optional for any state in the union. Nothing prevents Michigan, for example, from creating a new "pending" voter registration status that will bar potential voters from voting, and thus render them not NVRA "registrants," for a limited time after their information is added to the QVF, and providing that any registrations returned as 19 undeliverable during that time will be rejected. What the state may not do and still act consistently with the NVRA is to place a potential voter's name on the QVF in a status that permits the registrant to vote, only to later mark the registration as "rejected" at a later date -- possibly even after the registrant has cast a vote. Because the defendants in this case appear to be doing precisely that, the Court concludes that the plaintiffs have shown a strong likelihood that the undeliverable ID practice violates federal law.7 b. The driver’s license practice. The defendants concede that the driver's license practice involves cancelling voter registrations based on the voter's change on residence, such that 42 U.S.C. § 1973gg- 6(d)(1) requires either written confirmation of the address change from the voter, or written notice to the voter followed by a waiting period of two federal elections. Defendants claim, however, that by applying for a driver's license in another state, a voter is confirming his or her change of residence in writing, in satisfaction of subparagraph (A) of that provision. In support of this contention, they cite another portion of the NVRA, codified at 42 U.S.C. § 1973gg-3(a). This subsection provides that: (1) Each State motor vehicle driver's license application (including any renewal application) submitted to the appropriate State motor vehicle authority under State law shall serve as an application for voter registration with respect to elections for Federal office unless the applicant fails to sign the voter registration application. (2) An application for voter registration submitted under paragraph (1) shall be considered as updating any previous voter registration by the applicant. 7 For this reason, it is for the most part unnecessary to reach the other asserted grounds for the unlawfulness of the undeliverable ID practice. Specifically, although M.C.L. § 168.509aa provides procedural protections similar to those of 42 U.S.C. § 1973gg-6(d), the Court expresses no view on the state-law question of who qualifies as a "voter" within the meaning of this statute, so as to be entitled to those protections. Since these procedures are redundant to those of the NVRA, it is irrelevant whether Michigan offers them to a narrower class of persons than those deemed "registrants" under federal law. In considering what relief is appropriate, therefore, the Court will briefly consider below the plaintiffs' claim that the Fourteenth Amendment and the Civil Rights Act, 42 U.S.C. § 1971(a)(2)(A), require that the registrants whose original voter IDs are returned as undeliverable be treated the same as those who have their duplicate IDs returned to the sender. 20 Further, subsection (d) of the same section provides that [a]ny change of address form submitted in accordance with State law for purposes of a State motor vehicle driver's license shall serve as notification of change of address for voter registration with respect to elections for Federal office for the registrant involved unless the registrant states on the form that the change of address is not for voter registration purposes. The plaintiffs urge that subsection (d) applies only to changes of address within a single state, and not to an original application for a driver's license in another state. This specific question has not been exhaustively briefed, and the Court will not decide it now. It does seem to the Court, however, that interpreting subsections (a) and (d) to both apply to an original driver's license application would create the potential that the two sections might mandate contradictory outcomes in some cases. Specifically, if an applicant for a driver's license signed a voter-registration application in conjunction with the driver's license paperwork, subsection (a)(2) would require this action to be considered an update to the previous voter registration. This would permit the address on the old registration to be replaced with the address on the new application -- indeed, such address updates would seem to be the main purpose of paragraph (2). But if subsection (d) were also to apply to the case, the applicant would additionally be able to indicate on the driver's license application that the change of address was not for voting purposes. Obviously, both of these mandates could not be simultaneously fulfilled. The easiest way to avoid potentially inconsistent outcomes such as these would be to accept the plaintiffs' invitation to interpret the phrase "change of address form" in subsection (d) as not including applications for an entirely new driver's license in a state where the applicant has not previously held a license. Should the defendants prefer a different construction, they should propose some alternative solution to this problem -- and authority for their proposal -- as soon as possible. 21 Whatever the correct construction of subsection (d) may be, however, there can be little doubt that the out of state driver's license practice is violative of the NVRA. Even if out of state driver's license applications qualify as "change of address forms" under subsection (d), that very subsection still clearly requires states to ascertain whether the applicant has designated the application as not a change of address for voter registration purposes. The plaintiffs claim, and the defendants have not contradicted, that Michigan currently has no procedure for doing so. If, on the other hand, subsection (d) does not apply to driver's license applications, then subsection (a) would only permit the Secretary to cancel an applicant's Michigan voter registration if the applicant actually registered to vote in conjunction with the application. But again, there is no evidence that the current practices in place in the state of Michigan include any efforts, by the defendants or anyone else, to determine whether a voter actually does so. The defendants claim that applying for a driver's license in another state is in fact confirmation of a change of address for voting purposes even if, as is permitted by the NVRA, the voter designates it otherwise. This is true, the defendants assert, because under the law of every state except Hawaii, only residents are permitted to apply for driver's licenses. As a result, they argue, no Michigan voter will be permitted to apply for a driver's license in another state without also confirming his or her residence in that state. Even if the defendants' survey of state laws is correct, their conclusion is invalid for two different reasons. First, even if it is unlawful in almost every state to apply for a driver's license without being a resident there, it is dubious whether every person applying for a driver's license actually does confirm his or her residency in the state of application. Defendants concede that fully eighteen states -- including Michigan's largest contiguous neighbor, Ohio -- have no requirement that a driver's license applicant actually prove 22 residency. Response brief, docket no. 15, ex. A. Thus, the reality is that state driver's license application procedures permit some applicants, through ignorance of or even outright disregard for the law, to apply for driver's licenses in different states even while representing that their home address or domicile is still in Michigan. Although defendants' evidence indicates that this action is unlawful in most states, it still does not constitute written confirmation of an address change, and thus cannot justify the cancellation of an applicant's Michigan voter registration -- which in any event would be an illogical consequence for this particular form of lawlessness. Second, and more importantly in the view of the Court, there is no reason to believe that the kind of "residence" that any given state requires in order to issue a driver's license is identical to "residence" for voting purposes. Unless it is at least possible for a person to have different addresses for his or her driver's license and voting residences, it would be nonsensical for the NVRA to permit a voter to change the former without also changing the latter. In fact, Michigan itself permits out-of-state driver's license applicants to retain their active status in the QVF by affirming that their out of state addresses are only temporary, and that they remains eligible to vote in Michigan. Thomas aff., docket 15 ex. A, at ¶ 11. Thus, even the state recognizes that voters can be eligible both to vote in Michigan and to apply for a driver's license in another state, and that the residence requirements for the two are not always identical. For all these reasons, then, and contrary to the defendants' contention, the appearance of an out-of-state address on a driver's license application simply does not establish that the applicant is no longer an eligible Michigan voter.8 8 Even if every out of state driver's license applicant were to have moved out of Michigan for voting purposes, the NVRA would still clearly forbid the Secretary from regarding their applications as evidence of that fact if the applicants had designated otherwise. In this case, though, regardless of any NVRA violation, the plaintiffs would have no standing to sue because there could be no supportable allegation of harm since no voter would have been wrongfully disenfranchised. 23 In their complaint and briefing on the instant motion, the plaintiffs essentially argued that every cancellation pursuant to the out of state driver's license practice was unlawful. As the foregoing makes clear, this argument is incorrect. 42 U.S.C. § 1973gg-3(a) permits such cancellations if a driver's license applicant also registers to vote in his or her new state, and, if it applies, subsection (d) of the same section permits such cancellations unless the applicant affirmatively opts out of them. At the hearing on the preliminary injunction motion, the plaintiffs narrowed their contentions to cover only cancellations precluded by one or both of these provisions The Court concludes, therefore, based upon all of the foregoing analysis, that the plaintiffs' legal claim is likely to succeed on the merits.9 2. Likelihood of Success on the Standing Issues. The Court is mindful that to succeed on the merits at trial, the plaintiffs will bear the burden of proving their standing to sue in addition to the unlawfulness of the defendants’ practices, see Lujan v. Defenders of Wildlife, , 561 (1992), and that a plaintiff's likelihood of successfully showing standing is properly considered as part of the overall analysis of the likelihood of success on the merits, see N.E. Ohio Coalition for Homeless & Serv. Employees Int'l Union v. Blackwell, 467 F. 3d 999, 1010 (6th Cir. 2006) ("The weakness of plaintiffs' showing of standing leads us to conclude that their likelihood of success on the merits is not strong.") The Court will now analyze whether the plaintiffs are likely to succeed on the merits of the standing issues in this case. a. Undeliverable ID practice. As the Court noted previously, to establish representational standing in this case, the plaintiffs will eventually have to prove that at least one of their members actually has 9 There is, accordingly, no need to consider the plaintiffs' other challenges to the driver's license practice. 24 suffered or is at risk of suffering wrongful disenfranchisement as a result of the complained of practices. Since plaintiffs plead that they have a total Michigan membership of over 20,000, it appears likely that they will be able to produce one or more members who have registered recently enough that they are still in doubt as to whether their registration will be wrongfully cancelled as a result of their ID being mistakenly returned as undeliverable. The Court has already determined that exposure to such a risk from the actions in question here is sufficient to confer standing. Thus, considering the lawfulness and standing prongs together, the Court finds that plaintiffs have a very strong likelihood of succeeding on the merits of their challenge to the undeliverable voter ID practice. b. Out of state driver's license application practice. The plaintiffs' standing to challenge the out of state driver's license application practice is in more serious doubt. As the Court noted above, the voters placed at risk of disenfranchisement by this practice appears quite narrow. The Court believes there to be three characteristics common to all the members of this group: (1) they have applied or plan to apply for a driver's license in a state other than Michigan; (2) they have designated or plan on designating that their address on their application is not for voter-registration purposes; and (3) they have been or will actually be eligible to vote in Michigan in at least one election after their registrations were or will be cancelled.10 Since the Court regards it to be nearly impossible for a Michigan resident to inadvertently apply for a driver's license in another state, persons not in this group face no 10 If a driver's license applicant has indicated that his or her change of address is not for voter registration purposes, then the Secretary's cancellation of his or her registration is a violation of the NVRA regardless of whether the voter actually remains eligible in Michigan. Nevertheless, if the voter is not eligible in Michigan, then the voter has not suffered the harm of disenfranchisement and thus will lack standing to sue. 25 risk of wrongful disenfranchisement from the driver's license practice, and thus they have no standing to challenge it. The Court is considerably less confident that one of the plaintiffs' members will prove to have these characteristics than that one of their members has recently registered to vote, as is required for standing to challenge the undeliverable ID practice. The Secretary informed the Court both in her brief and at the hearing in this matter that she receives notice of about 72,000 out of state driver's license applications every year.11 At the hearing, the Court directly questioned counsel for both sides as to how many out of state drivers license applicants indicate that the address on their applications are not for voting purposes, and whether they are legally correct in so indicating. Their responses made it apparent to the Court that neither side can present, because no data whatever exists, any evidence or other information that would allow the Court or any other finder of fact to answer these questions. Furthermore, while -- for the reasons discussed previously -- the defendants' argument that most states permit only residents to apply to them for driver's licenses does not establish that the driver's license practice harms no one at all, it certainly does suggest strongly that the number of persons harmed by the practice may be small. Although the residence requirement for driver's license purposes may be less stringent than that for voting purposes, it nevertheless undoubtedly deters many people who satisfy neither of them from applying for out of state driver's licenses-- and thus prevents them from having their Michigan voter registrations cancelled. Thus, the Court finds that the only persons who are even potentially harmed by the driver's license practice are those who either applied for out of state driver's licenses (and 11 In their brief, the plaintiffs claimed that the number was approximately 280,000 per year, but at the hearing they conceded the correctness of the Secretary's figure. 26 surrendered their Michigan licenses) despite not meeting the residency requirement in the state of application, or who applied for a driver's license in states where they satisfied the residency requirement for receiving a driver's license, but not for voting. The Court therefore concludes that the number of voters who will be able to meet the injury in fact requirement for standing, while not zero, is likely to be correspondingly small. For the plaintiffs to be entitled to a permanent injunction on a theory of representative standing, they will have to show that at least one member of this group of people is also a member of one of their organizations. While it is certainly possible that they will be able to make such a showing, there has been no discovery or any other factual development on this issue in the case -- indeed, both parties affirmatively state that no facts or data exist to resolve the question -- and as a result the Court does not have any confidence that the plaintiffs will be able to do so. Thus, the plaintiffs' likelihood of success on the merits of the standing issues with regard to the driver's license practice can best be described at this juncture as questionable. ****** The Court's analysis of the standing issue should not be construed to mitigate what seems to be the clear unlawfulness of what the Secretary is doing with regard to out of state driver's license applications. But even if the outcome of the NVRA challenge were absolutely certain, plaintiffs' overall likelihood of success on the merits can be no greater than their likelihood of proving their standing. Thus, the plaintiffs' overall likelihood of success on the merits in the view of the Court is questionable. B. Irreparable Harm. The injury threatened to their members that establishes the plaintiffs' representative standing is the deprivation of the right to vote. Authorities are split on the issue of whether this type of alleged harm is irreparable per se. Compare, e.g., Williams v. Salerno, 792 F. 27 2d 323, 326 (2d Cir. 1986) ("The registration applicants in this case would certainly suffer irreparable harm if their right to vote were impinged upon"), with Chisom v. Roemer, 853 F. 2d 1186, 1188-89 (5th Cir. 1988) ("We are not prepared to adopt a per se rule in such a vital area of federal-state relations.") While the Sixth Circuit appears not to have decided the issue, even the leading case declining to adopt a per se rule, Chisom, was a decision on whether to enjoin an election for state office, and not whether to require a state to permit more persons to vote in a federal election. Chisom, 853 F. 2d at 1189. Even in that context, the 5th Circuit recognized that a preliminary injunction is appropriate "when the threatened harm would impair the court's ability to grant an effective remedy." Id. (citation omitted). In this case, where state sovereignty is not squarely implicated and a federal election is approaching rapidly enough that, according to the defendants, delaying the issuance of an injunction until close to the election date would risk organizational chaos in the Michigan Department of State, the Court finds that any disenfranchisement effected by the undeliverable ID or driver's license practices would indeed constitute irreparable harm. Thus, the only consideration mitigating the strength of this factor in favor of an injunction is the possibility that the harm might not actually be suffered by any of the plaintiffs' members. With respect to the practices at issue here, however, the irreparable harm inquiry diverges from the Court's analysis on standing because the plaintiffs' standing is predicated not on actual harm to their members, but rather on a risk of harm that may or may not occur in any individual case. This possibility -- that the potential harm that confers standing on the plaintiffs may not actually materialize with respect to any of their members -- is clearly relevant to the question of whether plaintiffs will suffer irreparable harm without a preliminary injunction. In this light, each of the practices will be analyzed in turn. 1. The undeliverable ID practice. 28 The plaintiffs have demonstrated a strong likelihood of proving standing to challenge the undeliverable ID practice because every eligible Michigan voter who registers is at risk of being stricken from the rolls until he or she actually receives an ID card. But, since only 1,500 registrants have been removed in this fashion this year-- as compared to more than 70,000 per year as a result of the driver's license practice-- only a very small fraction of the people who register actually suffer the harm of being removed from the rolls, and thus deprived of the right to vote. Further, at the hearing held in this matter, the defendants stressed that a voter whose registration has been "rejected" pursuant to the undeliverable ID practice may nonetheless cast a regular ballot if he or she presents a receipt of registration at the polls. This obviously will prevent disenfranchisement, but only for those voters who bring receipts with them to the polls. Presentation of a receipt, however, is not required of other voters, and since many or most Michigan residents removed from the lists pursuant to the undeliverable ID practice will in reality not receive separate notice of removal, they will likely not even know that their registrations have been rejected, and thus will be unaware of the necessity of bringing their receipts to the polls even if they have in fact retained them. Further, the plaintiffs argue that voters who register by mail do not even receive receipts in the first place, and as a result, the number of disenfranchisements prevented by the possibility of presenting a voter registration receipt is likely to be small. The defendants additionally argue that both the undeliverable ID practice includes the sending of a postage-prepaid, preaddressed reply card, which the voter can mail back and be restored to the rolls. While this additional practice will not cure the deficiency of the programs under the NVRA, if substantial numbers of eligible voters actually return cards 29 it would reduce the number of persons who are harmed by the practices, and thus the likelihood that any of that group are members of the plaintiffs. There are three possible objections to effectiveness of this practice. First, if the defendants' rationale for removing a voter from the rolls is that the voter does not live at the address they have on file, then mailing a notice to that address is a poor way of permitting the voter to clarify that the voter is still a permanent Michigan resident. It seems likely that even if they remain eligible Michigan voters, a substantial number of registrants will not receive the reply card, or at least not receive the card in time to return it, for the very same reasons that led the defendants to believe that they have abandoned their residences. Second, even if voters receive the reply cards, at least some of them will not fill them out (or not fill them out properly), and the NVRA does not permit Michigan from removing them based on their failure to do so. Finally, even voters who receive the cards and return them will have been wrongfully taken off the rolls until the date that their cards are processed and their registrations are reactivated. The combination of these three objections convinces the Court that, while this backup procedure reduces somewhat the likelihood that plaintiffs' members will be injured by these undeliverable ID practice, it by no means eliminates it.12 It is undisputed that more than one thousand voters have been disqualified so far in 2008 pursuant to the undeliverable ID practice. But neither side has provided the Court with any information as to how many of these disqualifications are actually wrongful. Plaintiffs argue that some simply must be wrongful, because human error in addressing and 12 The defendants also argue, in defense of both the undeliverable ID and driver's license practices, that because a voter whose name has been removed from the rolls can always cast a provisional ballot, no harm is done by the removal. Plaintiffs respond that under both federal and state law a voter's eligibility for purposes of counting a provisional ballot must be determined by the same standards as is her eligibility to cast a regular ballot. See 42 U.S.C. § 15482(a)(4); M.C.L. § 18.183. Thus, even if a voter who does not appear on the rolls is permitted to cast a provisional ballot, this only delays the inevitable disenfranchisement. 30 delivering voter IDs is inevitable, and the Court agrees with the plaintiffs' analysis. The Court, however, also regards the likely number of these errors to be small enough as to raise serious questions about whether the undeliverable ID practice will actually adversely affect any of plaintiffs' membership if a preliminary injunction is not entered. Overall, and based upon the analysis set forth here, the Court concludes that although the number of plaintiffs' members likely to be adversely affected by the practice is relatively low, these members face certain irreparable harm. 2. The driver's license practice The Court has already noted that the plaintiffs have only a questionable likelihood of proving their allegations of standing to challenge the driver's license practice, because of the low likelihood that one of the (probably) small number of Michigan voters harmed by the practice is a member of one of the plaintiffs. This alone would dictate a conclusion that any likelihood of irreparable harm to plaintiffs' members is insufficient to weigh in favor of a preliminary injunction. Additionally, the Court recognizes that the reply-card component of the driver's license practice, although subject to the same shortcomings identified in connection with the undeliverable ID reply cards, does provide some out of state driver's license applicants with the opportunity to reaffirm their Michigan residence and remain on the rolls. Again, this does not satisfy the NVRA, but it does provide some registrants the chance to avoid disenfranchisement, and thus likely decreases even further the number of persons who suffer irreparable harm as a result of the driver's license practice. For these reasons, the Court is unable to conclude at this juncture that any plaintiffs' members are likely to suffer irreparable harm if a preliminary injunction is not entered against the driver's license practice. C. Balance of Hardships from Entry of an Injunction. 31 The defendants argue that making the changes that the plaintiffs seek in their motion for preliminary injunction would impose serious administrative difficulties, especially if an injunction is entered close to the November, 2008 election. For instance, the defendants claim that the only method of restoring the active status of the cancelled registrants would, if implemented, also affect the registrations of anyone who first applied for a driver's license in another state and then re-registered in Michigan. These voters, according to the defendants, would see their QVF addresses revert to the ones that were current before their initial out of state driver's license application. If the Department of State is forced to deal with these and other difficulties -- not to mention the task of identifying which registrations are entitled to reactivation13 -- the result, the defendants warn, could be their inability to deal with the other requirements of conducting a smooth election. The Court fully agrees with the State on this issue and makes what it regards a common sense conclusion that the logistical problems involved with restoring a large number voters to the rolls, as the plaintiffs request in their motion, are likely to be significant. Plaintiffs contend, however, and rightly so in the judgment of the Court, that any hardship suffered by the state of Michigan and its officials as a result of the entry of the requested injunction would be largely self-imposed. Two reasons support the Court's conclusion: First, the NVRA language governing these practices is clear enough that the defendants should have been on notice of the potential that they might be found unlawful -- as well as being on notice of the kind of remedial action that might be required in the event of such a finding. Second, at the hearing held in this matter, the plaintiffs represented -- without any sort of contest from the defendants -- that the plaintiffs explained their 13 The defendants claim that this task would be nearly impossible. Because it also has significant implications for voter fraud, this claim and the reasons for it are discussed more fully below, with respect to its impact on the public interest. 32 objections to these practices to the defendants as early as July, 2007, two months before the filing of this lawsuit. The counsel for the plaintiffs also asserted -- and the state of Michigan did not contest -- that no official from the state met with the plaintiffs to address, resolve, or even respond to their claims. Thus, the state defendants have actually had a considerable period of time in which to consider how to smoothly implement the sorts of relief the plaintiffs are asking for here. If the defendants have failed to undertake such considerations, any hardship faced by the defendants now is squarely attributable as much to the lack of preparation as to the actual changes the plaintiffs are asking for, and should be discounted accordingly. As a result, the Court finds that the potential hardship to the defendants weighs only very slightly against the entry of a preliminary injunction. Additionally, the Court notes that due to the much larger potential number of voters who might have to be restored to comprehensively address the driver's license practice, coupled with the Court's lessened ability to determine how many voters will actually be harmed by the practice, this factor weighs somewhat more perceptibly against restoring those voters than it does for the voters affected by the undeliverable ID practice. D. The Public Interest. The defendants argue that the injunction requested by the plaintiffs here would harm the public interest by opening the door to voter fraud. This is true, they contend, is because Michigan's system has been set up on the premise that no one whose voter ID is returned as undeliverable, or who applies for a driver's license in another state, is entitled to vote in Michigan. As a result, the state has no means of determining whether a registrant whose ID has been returned as undeliverable is actually a resident of Michigan, or whether an applicant for an out of state driver's license has designated, as permitted by 33 the NVRA, that the application is not to be used for voting purposes. The Court will now examine the impact an injunction might have on the public interest in regard to each of Michigan's challenged practices. 1. Undeliverable ID practice. The defendants' invocation of the public interest on the issue of undeliverable IDs amounts to an argument that the procedures required by the NVRA pose an unacceptable risk of fraud to the state of Michigan. The state is rightly concerned that some, and perhaps many, of the "rejected" voter registrations were fraudulent. Whatever the merits of that concern may be, however, in the context of the current litigation, the concern has been rejected by Congress when it enacted the terms of the NVRA. "[T]he public has an interest in the enforcement of federal statutes." Coxcom, Inc. v. Chaffee , 536 F. 3d 101, 112 (1st Cir. 2008). Whether or not a person is actually entitled to vote in Michigan, the NVRA clearly requires that once a person is a "registrant" he or she may not be removed from the voter rolls except by operation of the procedures laid out in the Act. Although it might be desirable for the defendants to develop and implement other measures to remove ineligible voters from the rolls before they become NVRA "registrants", the defendants' acts in doing so -- whatever they may be -- are not a prerequisite to the NVRA's enforcement. Likewise, the fact that the defendants could have developed a lawful policy that would have removed some of the same registrations from the rolls does not detract substantially from the illegal manner in which each and every one of these removals actually did occur. The public interest cannot weigh heavily against restoring voters to the status that, given Michigan's current voter registration regime, those voters had been entitled to all along pursuant to the applicable federal law. 2. Driver's license practice. 34 With respect to the driver's license practice, the Court finds that the defendants' concerns carry more weight. Because a great number of out of state driver's license applicants no doubt simultaneously register to vote (or decline to designate their change of address as being for voting purposes), many -- and perhaps most -- of the removals under this practice were perfectly lawful under the NVRA. Since the parties have no way of knowing which applicants did what in this regard, however, the only way for the defendants to immediately restore any wrongfully-cancelled registrations, and to avoid any further wrongful cancellations, is apparently to undo every cancellation pursuant to the driver's license practice, and to stop entering any further cancellations pursuant thereto. The result would be returning to "active" status the registrations of up to 200,000 voters, an unknown but probably large number of whom were initially removed from the rolls in accordance with the NVRA in the first place and who are in fact no longer eligible to vote in Michigan. Plaintiffs have offered no evidence contradicting these claims by defendants, but assert that if they are true, the burden of developing a method for avoiding the restoration of voters who are removable under the NVRA properly lies on the defendants. This is very likely the case, but the Court cannot ignore the fact that the defendants' claimed inability to immediately develop such a method will have a significant impact on the public interest. The public has an interest on both sides of this case. On the one hand, there is undoubtedly a strong public interest in ensuring that all eligible voters are able to cast their votes in an election. On the other hand, the public has a strong interest in the prevention of fraudulent voting as well.14 A question exists as to whether the Secretary's practices at 14 "Fraudulent" here refers both to active attempts to circumvent the election laws, and to situations in which a voter is simply mistaken as to which state he or she is eligible to vote in. 35 issue here removed more ineligible than eligible voters from the rolls, but in determining where the balance of the public interest lies the interests providing resolution to the question cannot be weighed against each other on a one-for-one basis. It seems likely that the portion of ineligible voters removed from the rolls who will attempt to vote after becoming ineligible is smaller than the portion of wrongfully-removed eligible voters who will show up at the polls, and so the public interest in removing ineligible voters must be discounted accordingly. Additionally, the harm from disenfranchisement is concrete and serious even if it occurs to only one individual, whereas the harms from fraudulent voting -- loss of public confidence in the election process and the risk of distorted outcomes -- are more diffuse, depending as much on the volume of fraudulent votes as on the fact that any one of them is being cast.15 The risk of fraudulent voting must nevertheless be a serious consideration in deciding whether to require the state to restore to active status (or refrain from cancelling in the first place) the registrations of some 200,000 voters, a great number of whom are likely not entitled to vote. As noted previously, neither side has provided any data relating to how many of the registrations cancelled pursuant to the driver's license procedure were those of eligible Michigan voters. On the record available at this preliminary stage, the Court concludes that this is likely to be quite a small portion of the cancellations, and consequently that the public interest in preventing the mass reactivation of ineligible voters is of significant weight. Based on the foregoing, the Court draws slightly differing conclusions with respect to the impact on the public interest of the prohibitory and mandatory aspects of the relief from 15 Disenfranchisement of eligible voters also risks distorting election outcomes, though if one assumes that anti-fraud measures will prevent more fraudulent than legitimate votes, then such measures will still have a net effect of reducing rather than exacerbating these sorts of distortions. 36 the driver's license practice requested by the plaintiffs. Currently, the Secretary is cancelling voter registrations based on out of state driver's license application, without even having before her the key piece of information necessary to determine whether the NVRA permits such removals; that is, whether the applicant has designated the change of address as not for voting purposes. This is unlawful, and the public policies in favor of preventing unlawful disenfranchisement and enforcing federal statutes clearly dictate that it be stopped. This would in no way obstruct the secretary's task of avoiding the harm to the public interest that would result from retaining ineligible voters on the rolls, since she has been and will remain free to adopt any method for doing so that is permitted by the NVRA. With respect to cancellations that have already occurred, however, the NVRA has already been violated, and the only question is how that violation can be remedied in a manner most consistent with the public interest. Restoring voters who were not entitled under the NVRA to remain on the rolls is to be avoided if possible. Given the defendants' claims as to the information they have, a mass reactivation of the type requested by the plaintiffs would risk grave harm to the public interest by permitting a large number of ineligible voters to vote. Accordingly, the Court finds that this factor weighs rather strongly against the mandatory relief requested by plaintiffs. IV. Summary and Form of Relief A. The Undeliverable ID Practice. As to the undeliverable ID practice, the Court concludes that the plaintiffs have made a strong showing of success on the merits and a substantial but not overly strong showing of irreparable harm. The prohibitory injunction requested by the plaintiffs would work very little hardship on the defendants and would be in the public interest. The mandatory 37 injunction would result in some, mostly self-imposed, hardship for defendants, but entering the injunction would also serve the public interest by restoring the registrations of voters entitled under the NVRA to be on the rolls. Accordingly, the Court will grant both prohibitory and mandatory injunctions with respect to the undeliverable ID practice. A question remains as to the proper form of this relief. While these registrants seem entitled under the NVRA to have their cancellations reversed, the defendants point out (and the plaintiffs do not dispute) that because their IDs were returned as undeliverable, there is reason to doubt whether some of them actually live in Michigan, and thus whether they are entitled to vote here. This suggests that, after reversing the cancellations of these voters' registrations, it would be appropriate for the defendants to take additional steps to verify the Michigan residence of the voters before permitting them to vote. They plaintiffs, however, briefly argue that both the Equal Protection Clause and a provision of the Civil Rights Act, codified at 42 U.S.C. § 1971(a)(2)(A), prohibit treating voters whose original IDs are returned as undeliverable any differently from those whose duplicate IDs are similarly returned. Since a voter whose duplicate ID is returned as undeliverable is marked as "challenge" on the QVF, the plaintiffs seem to argue that this is the only step defendants should be permitted to take to verify the restored voters' residence. The Court does not agree. The relevant portion of the Civil Rights Act prohibits the application of different "standards, practices or procedures" in determining whether any two citizens of a state are qualified to vote. This simply requires that if Michigan wishes to impose unique procedural requirements on the basis of a registrant's original voter ID being returned as undeliverable, it must impose those requirements on everyone whose original ID is returned as undeliverable. In the Court's view, the treatment of registrants whose 38 other documents are similarly returned is simply irrelevant under the statute.16 The Court likewise does not consider these requirements to be any sort of disparate treatment unrelated to a legitimate state interest, as the plaintiffs argue pursuant to their equal- protection claim. The Court makes a common sense conclusion that a person whose first ID card is returned as undeliverable to his or her registered address is less likely to actually reside at that address -- or anywhere else in Michigan -- than a person who has previously received an ID card at his or her Michigan address but now appears no longer to live there. Since the state certainly has an interest in preventing non-residents from voting within its borders, the state is therefore entitled to draw distinctions between these two different classes of persons. As a result, the defendants need not treat voters whose original IDs are returned as undeliverable identically to any other class of voters. This Court's injunction will not prevent them from requiring of such voters whatever further proofs of residence may be necessary or permitted under state law and the NVRA. What the defendants must do, however, is restore the cancelled registrations to some status that will not by itself, as their current status does, require the rejection of a ballot cast by these voters. B. The out of state driver's license application practice. With respect to the out of state driver's license application practice, the Court concludes that there is only a questionable likelihood that any of plaintiffs' members will suffer an injury in fact, and thus that plaintiffs have only a questionable likelihood of success on the merits on the issue of their standing to sue. This weak showing of injury 16 There accordingly is no need to resolve the parties' dispute over whether this federal statute can be enforced through a private lawsuit under 28 U.S.C. § 1983, or only by the Attorney General. Cf. McKay v. Thompson, 226 F. 2d 752 (6th Cir. 2000) (holding that 42 U.S.C. § 1971(a) is not directly enforceable in a private action). 39 also indicates a relatively low probability that plaintiffs' members will suffer irreparable harm without a preliminary injunction. A prohibitory injunction would involve some hardship to the defendants, and a mandatory injunction would involve considerably greater hardship, but both sets of hardships would be largely self-imposed. Finally, a prohibitory injunction would be in the public interest, but mandatorily enjoining the defendants on this issue would not. Weighing these factors, a preliminary injunction against the driver's license practice is not appropriate on this record. Nevertheless, it bears repeating that this practice does appear to be in violation of the NVRA. Should the plaintiffs be able to shore up their standing in this case, it is the Court's hope that both sides will cooperate in developing a method by which any voters who have wrongfully had their registrations cancelled can be restored to the rolls, without resorting to a mass reactivation. After the defendants answer the complaint and the parties proceed through discovery, information and evidence from the state of Michigan should be able to bring light to the question of how the practice should be changed. C. The Ypsilanti City Clerk. A further word is appropriate to address the arguments of the City Clerk for the City of Ypsilanti, Michigan ("the clerk"). In a separate brief in response to this motion, the clerk claimed that because of staff and budget shortages she does not, and will not before the upcoming election, remove voter names from the rolls pursuant to the undeliverable ID practice.17 If this is true, then the likelihood of irreparable harm to plaintiffs' members from 17 The clerk makes a much more convoluted argument with regard to the out of state driver's license application practice, but since the nature of the Court's relief will not entail the issuance of an injunction on that issue, the Court finds it unnecessary to address the clerk's arguments on the drivers license issue here. 40 the clerk would be reduced to minuscule proportions. The burden of an injunction on the clerk herself, however, would be correspondingly reduced, as would any impact on the public interest. The plaintiffs' strong likelihood of success on the merits would remain unchanged. Since the Court's injunction against the other defendants will preclude them not only from personally marking voters' QVF entries with a disqualifying status, but also from directing or encouraging others to do so, the foregoing makes it unnecessary to enjoin the clerk from doing so as well. If the plaintiffs present the Court with information that her actions fail to correspond with her representations in her brief, however, such an injunction will promptly issue. CONCLUSION WHEREFORE, it is hereby ORDERED that the defendants Michigan Secretary of State and the Michigan Director of Elections: (1) Immediately discontinue their practice of cancelling or rejecting a voter's registration based upon the return of the voter's original voter identification card as undeliverable; (2) Remove the "rejected" marking in the QVF from the registrations of all voters whose original voter IDs have been returned as undeliverable since January 1, 2006 until the present, unless rejection was warranted for some other lawful reason; (3) Make no other designation, including but not limited to "cancelled," in these voters' registration records in the QVF or elsewhere, that will prevent their ballots from being counted if they appear at the polls and give whatever further proof of Michigan residence 41 is required or permitted under applicable state and federal law; unless such a designation is warranted by written notice from the voter or for some reason other than change of residence; (4) Preserve and not destroy until after December 31, 2009, any and all records relating to maintenance of Michigan's voter registration files that have, since January 1, 2006, resulted in the cancellation of the registration of voters who have applied for out of state driver’s licenses, or the cancellation or rejection of voters’ registrations based upon the return of original voter identification cards ; and (5) Give no order, direction, or encouragement that any other government official or any other person engage in activity hereby prohibited to them. It is further ORDERED that the defendants Michigan Secretary of State, the Michigan Director of Elections, and the Ypsilanti City Clerk file an answer to the complaint in this action no later than fourteen days from the date of this Order. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: October 14, 2008 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on October 14, 2008, by electronic and/or ordinary mail. Alissa Greer Case Manager 42 43

=== ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION ===

2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 1 of 43 Pg ID 532 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION Case No. 2:08-cv-14019 HONORABLE STEPHEN J. MURPHY, III UNITED STATES STUDENT ASSOCIATION FOUNDATION, as an organization and representative of its members; AMERICAN CIVIL LIBERTIES UNION FUND OF MICHIGAN, as an organization and representative of its members; and AMERICAN CIVIL LIBERTIES UNION OF MICHIGAN, as an organization and representative of its members, Plaintiffs, v. TERRI LYNN LAND, Michigan Secretary of State; CHRISTOPHER M. THOMAS, Michigan Director of Elections; and FRANCES MCMULLAN, City Clerk for the City of Ypsilanti, Michigan, in their official capacities, Defendants. / ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION This lawsuit involves a challenge to the State of Michigan's election practices. The plaintiffs initiated the case by filing a complaint on September 17, 2008, and simultaneously requested both the entry of a preliminary injunction and expedited hearing of the matter. The defendants filed a brief opposing the plaintiffs' motion for preliminary injunction on September 26, 2008, and the plaintiffs filed a reply brief on September 29, 2008. All three of these filings exceeded the page limitations for such pleadings and in all three instances, the Court granted motions to exceed page limits. All filings have been supported by voluminous attachments and exhibits. 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 2 of 43 Pg ID 533 The Court held a lengthy hearing on the motion for preliminary junction on September 30, 2008. None of the defendants have filed an answer to the complaint. INTRODUCTION The plaintiffs challenge two separate practices of the defendants, all of whom are Michigan election officials. Each of the challenged practice involves the marking of voter registrations as "rejected" or "cancelled." The plaintiffs first challenge the Michigan Secretary of State's practice of cancelling voter registrations of Michigan voters who apply for driver's licenses in other states. Secondly, they object to a Michigan statute requiring the automatic "rejection" of new registrations if, after the state mails a voter ID card to the address provided on the voter's application, the card is returned by the post office as undeliverable to that address. The plaintiffs challenge these practices as forbidden by certain provisions of the constitution and by various state and federal statutes. The facts of the matter are largely undisputed. FACTS I. Background – Michigan’s Voter Registration Regime Michigan's statewide voter registration database is known as its Qualified Voter File ("QVF"). Local clerks and employees in the Michigan Department of State process completed voter registration application forms by entering the potential voter's name and other information into the QVF. Shortly thereafter, the official prints and mails a voter identification card to the potential voter. Subsequently, the Department of State generates local voter lists from the QVF. These are used by local election officials on election day to determine whether persons appearing at the polls are registered to vote. A voter's registration in the QVF may have one of several status marks or labels attached to it. The default status for a registration is "active," meaning that there are no 2 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 3 of 43 Pg ID 534 further administrative obstacles to a registrant being able to vote. If, however, a potential voter's registration materials are deemed insufficient, the voter's information will nonetheless be entered into the QVF, but can be marked as "rejected." Similarly, when a voter is determined to be no longer eligible, his or her registration record is retained in the QVF, but marked as "cancelled." Because the names of voters whose registrations are marked as "rejected" or "cancelled" will not appear on precinct lists generated from the QVF, these voters will not be permitted to cast regular ballots if they appear at the polls on election day in Michigan unless they can produce an original receipt of their voter registrations. The QVF also permits registrations to be marked as "verify" or "challenged" without being entirely cancelled. These markings allow the registrant's name to appear on the precinct lists generated from the QVF, but will appear on those lists as directions to local poll workers to require various forms of confirmation of the voter's eligibility before permitting a vote to be cast. Thus, on a precinct list, a marking of "verify" next to a voter's registration requires the voter to provide some sort of verification of eligibility before casting a ballot. See, e.g., M.C.L. § 168.509aa (requiring voter to affirm residence at polls if voter fails to respond by 30 days before election to notice that local clerk received "reliable information" that voter has moved out of jurisdiction). Similarly, a marking of "challenge" next to a voter's name seems, under the statute, to require that a more stringent assessment of a voter's eligibility be conducted at the polls. See M.C.L. § 168.509cc. II. The Challenged Practices A. "Rejection" of registrations when the voter's ID card is returned as undeliverable. As noted, after a potential voter's registration information is received and entered into the QVF, the system generates a voter ID card that is mailed to the voter. If, however, an 3 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 4 of 43 Pg ID 535 original voter ID card is returned by the United States Postal Service as being undeliverable to the address listed on the registration, M.C.L. § 168.449(3) requires the clerk to "reject the registration and send the individual a notice of rejection." See also M.C.L. § 168.500c (person whose original voter ID is returned as undeliverable "shall be deemed not registered under this act.") As a result, the name of an applicant whose voter ID card is returned as undeliverable will not appear on the local voter rolls. When a registration is "rejected" in this manner, the city or county clerk sends out a notice of rejection to the voter. The notice of rejection is accompanied by a reply card that offers the potential voter a chance to complete his or her registration by correcting the address information, or by another version of the card that simply states the necessity of re-registering should the recipient wish to vote. In this opinion, the Court will subsequently refer to this sequence as the "undeliverable ID practice." The Court finds that from January 1, 2008, until September 25th, 2008, the State of Michigan "rejected" 1,438 voter registration applications as a result of the undeliverable ID practice. Thomas aff., docket no. 15 ex. A, at ¶ 6. This practice described above differs from the procedures required by M.C.L. § 168.449(3) when a duplicate voter ID card is returned as undeliverable. In that case, the local clerk is directed to provide a voter with an opportunity to confirm or correct the voter's address. Even if the voter fails to confirm or correct the address, the registration will not be cancelled, but marked by a precinct worker as "verify" or -- if the address confirmation form is also returned as undeliverable -- as "challenged." See M.C.L. 168.509aa(3) and (4) (explaining procedures required by § 168.449(3 . 4 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 5 of 43 Pg ID 536 B. Cancellation of registrations on the voter's application for a driver's license in another state. In addition to managing the state's voter rolls, the Michigan Secretary of State also has authority over Michigan driver's license records. Since most states require an applicant for a driver's license to surrender any license the applicant holds from another state, at the time of application the Secretary regularly receives records of surrendered Michigan driver's licenses from her counterparts in other states. At issue in this case is the Secretary's specific practice of cross-referencing the numbers on surrendered licenses against the driver's license numbers listed in the state's QVF, and then marking any matching voter registrations as "cancelled."1 See Thomas aff., docket no. 15 ex. A, at p. 30. The sequence described in this paragraph will subsequently be referenced in this opinion as the "driver's license practice." When a match of the sort described above occurs, a local clerk must send to the affected voter a reply card that permits the affected voter to state that his or her absence from Michigan is only temporary and that he or she remains register to vote. If the voter makes an affirmation of this sort, the voter's registration is returned to "active" status by the Secretary. The reply card also states that "[i]f the reply card is not returned, you will be asked to confirm your address at the polls on Election Day. If the reply card is not returned and you do not vote within 30 days, your voter registration will be canceled."2 1 It is not clear to the Court whether this practice is required by state law. M.C.L. § 168.500h requires the Secretary to conduct the cross-check process and to notify local clerks of the results. The statute further provides that a match "shall constitute reliable information that the registered elector has removed from the municipality." Id. But the statutory section's only directive to local clerks is to "proceed in compliance with section 513," id., a section that has been repealed. Regardless of whether the practice is required, there is no dispute between the parties that the Secretary actually is directing cancellations in this manner. 2 The language quoted here from the reply card does not appear to be accurate, since at the time of receipt of the card the voter's registration has already been cancelled. But this apparent inaccuracy does not underlie the plaintiffs' challenge to the practice. 5 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 6 of 43 Pg ID 537 I. Plaintiffs' Legal Challenges ANALYSIS The plaintiffs assert a wide variety of legal theories in support of the unlawfulness of the two practices governing voter registrations in which Michigan engages. The heart of the plaintiffs' legal attack, however, is grounded in Section 8 of the National Voting Rights Act (the "NVRA," or "Act"), codified at 42 U.S.C. §§ 1973 et seq. More specifically, subsection 1973-gg(6)(d) of the Act states the exclusive procedures by which a state may “remove the name of a registrant from the official list of eligible voters in elections for Federal office on the ground that the registrant has changed residence.” Removals are permitted only in two situations: The first situation in which a registered voter can be removed from the rolls is when a registrant confirms the disqualifying address change in writing. 42 U.S.C. § 1973gg-6(d)(1)(A). The second situation occurs when (a) the state sends the registrant, by forwardable mail, a postage-prepaid return form by which the registrant can update his address information, and (b) the registrant neither returns the form nor votes or appears to vote in the next two general elections for Federal office. Id. at § 1973gg-6(d)(1)(B). The plaintiffs claim that both the undeliverable ID practice and the driver's license practice are deregistrations of registered voters on the basis of a change in residence, within the meaning of the NVRA. If their characterizations are accurate, it follows that the practices violate the NVRA, since the defendants -- throughout the short history of this litigation -- have conceded that the procedures provide neither the notice nor the waiting period mandated by 42 U.S.C. § 1973gg-6(d). The plaintiffs therefore seek a declaration that the practices are unlawful, and request that the Court enjoin the defendants to cease the practices, to restore to the rolls all registrants marked "rejected" or "cancelled" pursuant 6 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 7 of 43 Pg ID 538 to the practices since January 1, 2006, and to preserve all records related to such cancellations until the end of 2009. II. Standing to Sue One overriding and threshold issue is whether the plaintiffs have standing to sue. Although the defendants have not moved for dismissal based on lack of standing, both sides raise the issue in their briefs on the instant motion and the Court provided counsel ample opportunity to address the matter during oral argument. All parties surely recognize that “[b]ecause the standing issue goes to this Court's subject matter jurisdiction, it can be raised sua sponte.” Loren v. Blue Cross & Blue Shield of Mich., 505 F. 3d 598, 607 (6th Cir. 2007). The Court therefore addresses standing here. A. The Legal Standard. To demonstrate the existence of a case or controversy of the kind that a federal court is constitutionally authorized to hear, a plaintiff must show that “‘(1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.’” Cleveland Branch, NAACP v. City of Parma, 263 F. 3d 513, 523-24 (2001) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167, 180-81 (2000 . Here, the plaintiffs are not natural persons, but instead associations of persons. “There is no question that an association may have standing in its own right to seek judicial relief from injury to itself and to vindicate whatever rights and immunities the association itself may enjoy.” Am. Canoe Ass’n, Inc. v. City of Louisa Water & Sewer Comm’n, 389 F. 3d 536, 544 (6th Cir. 2004) (quoting Warth v. Seldin, 422 U.S. 490, 511 (1975 . Further, 7 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 8 of 43 Pg ID 539 regardless of whether an association of persons would not have standing based on its organizational interests, it will be able to sue as a representative of its membership “when its members would otherwise have standing to sue in their own right, the interests at stake are germane to the organization's purpose, and neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Cleveland Branch, 263 F. 3d at 524 (quoting Friends of the Earth, 528 U.S. at 181 (2000 . B. Level of Showing Required. "Since they are not mere pleading requirements but rather an indispensable part of the plaintiff's case, each element [of standing] must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Lujan v. Defenders of Wildlife, , 561 (1992) (quoted in Sault Ste. Marie Tribe of Chippewa Indians v. U.S., 288 F. 3d 910, 915 (6th Cir. 2007 . Thus, in those cases when a defendant moves for dismissal based on a plaintiff’s lack of standing, a court “must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Kardules v. City of Columbus, 95 F. 3d 1335, 1346 (6th Cir. 1996) (quoting Warth v. Seldin, 422 U.S. at 501). In this sua sponte inquiry, the Court will apply the standard stated above and further notes that under the standard, if the allegations in the complaint do not establish standing, “it is within the trial court's power to allow or to require the plaintiff to supply, by amendment to the complaint or by affidavits, further particularized allegations of fact deemed supportive of the plaintiff's standing.” Warth, 422 U.S. at 501. It is only at trial that a plaintiff bears the burden of proving facts supporting standing, along with the elements of its case. Lujan, 594 U.S. at 56. 8 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 9 of 43 Pg ID 540 The plaintiffs in the present suit claim that they have adequately alleged facts supporting their standing, both in their own rights and as representatives of their members. The Court will first explain why the plaintiffs have not alleged a sufficient injury to their organizational interests to have standing in their own rights, and then set forth the reasons for the Court's conclusion that the plaintiffs have standing to sue as representatives of their members. C. Injury In Fact. 1. The Legal Standard. A person who has actually been harmed or faces certain future harm obviously presents the kind of injury in fact required for standing to sue the party by whom he or she was or will be injured. But, as plaintiffs note, even a likelihood of future harm, which may or may not materialize into actual injury for the plaintiff, qualifies as an injury in fact for purposes of standing analysis. This principle has been repeatedly applied in election-law cases decided by the United States Court of Appeals for the Sixth Circuit and various lower courts within it. Sandusky County Democratic Party v. Blackwell, 387 F. 3d 565 (6th Cir. 2004) involved, among other things, a challenge to Ohio’s requirement that a poll worker determine that a voter of questionable eligibility was at the correct precinct polling place before being permitting the voter to cast a provisional ballot. Id. at 571. The plaintiff organizations argued that human errors in compiling the rolls, or in determining whether a given voter's name was on them, could result in some of their members mistakenly being wrongfully denied the right to vote on this basis. Since these mistakes could occur up to the moment a voter was turned away from the polls, however, they plaintiffs could not beforehand which if any of their members would actually be disenfranchised in this fashion. 9 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 10 of 43 Pg ID 541 Nevertheless, the Sixth Circuit held that they had standing based on the increased risk of disenfranchisement faced by all their members as a result of the “inevitable . . . mistakes” of poll workers. Id. at 574. Other cases have adopted similar reasoning. In Stewart v. Blackwell, 444 F. 3d 843 (6th Cir. 2006), vacated as moot, 473 F. 3d 696 (6th Cir. 2007), the Sixth Circuit found several individual plaintiffs to have standing to claim that the punch-card voting machines used at their polling places were unlawfully unreliable, again on a theory that each plaintiff faced an increased risk of having her vote counted improperly as a result of the alleged unreliability. Although the judgment in that case was vacated as moot when Ohio abandoned the use of the machines in question, its reasoning on the standing issue is fully consistent with that of Sandusky County. Two cases decided by the district courts have also applied this standard as well. In both Summit County Democratic Central and Executive Committee v. Blackwell, No. 5:04CV2165, 2004 WL 5550698 (N.D. Ohio Oct. 31, 2004), and Spencer v. Blackwell, 347 F. Supp. 2d 528 (S.D. Ohio 2004) district judges found the plaintiffs to have standing to sue based on the risk that they would be wrongfully disenfranchised by Ohio’s laws permitting at-the-polls challenges to voters’ qualifications. To establish representative standing in this case, then, the plaintiffs must plead that at least one of their members either actually has been or will be wrongfully disenfranchised by each of the complained-of practices, or that they face some risk of disenfranchisement. By contrast, to establish standing in their own right, the plaintiffs must plead that such wrongful disenfranchisements, or the risks thereof, have harmed them as organizations in some concrete and meaningful way. Under either theory, plaintiffs' standing will ultimately 10 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 11 of 43 Pg ID 542 have to be grounded in the deprivations of voting rights caused by the Secretary's allegedly unlawful practices. 2. Standing as organizations. The plaintiffs claim that they have alleged sufficient harm to their organizations as a whole to have standing in their own rights. Each of the plaintiffs claims an interest in politically empowering the communities they serve, which interest they further by, among other things, conducting voter registration drives. Compl. at ¶¶ 2-3. Nevertheless, "a mere interest in a problem is not . . . sufficient to confer standing on an organization." Greater Cincinnati Coalition for the Homeless v. Cincinnati, 56 F. 3d 710, 716 (6th Cir. 1995) (citing Sierra Club v. Morton, 405 U.S. 727, 739 (1972 . Instead, the plaintiffs must show that their organizations themselves, as opposed to the ideals they pursue, have suffered some kind of concrete harm as a result of the alleged disenfranchisement. To take the most obvious example, if the plaintiffs' expenditures of time and money on voter registration drives have been rendered a waste in any significant measure because the voters they registered at those drives were unlawfully taken off the rolls, that would be sufficient injury to confer standing. Here, though, the plaintiffs have alleged that some of their members are among the voters who face disenfranchisement, but do not allege, either expressly or by implication, that they as organizations had any concrete involvement in the registration of those voters. Even if the organizations had actually registered such voters, the complaint cannot fairly be read to allege that the number of such disenfranchisements was great enough to have had the required impact upon the organization's interests as a whole.3 Nor have the 3 Of course even a single disenfranchisement would support standing for the disenfranchised person to sue as an individual, or for an organization to which he or she belonged to sue in a representative capacity. That is why, as the Court will explain below, the plaintiffs have pleaded 11 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 12 of 43 Pg ID 543 plaintiffs alleged in any other way that the disenfranchisements harm their concrete organizational interests, as opposed to the organizations' more abstract social goals. Therefore, in the view of the Court, in order to proceed on a theory of organizational standing the plaintiffs would be required to amend their complaint to include more specific allegations as to the nature and manner of the harm or potential harm to their organizations. 3. Standing as representatives of the plaintiffs' members The plaintiffs additionally claim standing not just as organizations, but as representatives of their members who individually face disenfranchisement. Attacking this claim, the defendants argue that the plaintiffs have not identified any individual, much less one of their members, who they claim to have been harmed by the practices of which they complain. The plaintiffs have, however, pleaded the existence of such persons among their membership. Specifically, paragraphs 73 and 88 of the complaint allege that the out of state driver's license application and undeliverable ID practices, respectively, "present[] the real and immediate threat that such members will be disfranchised." Compl. ¶¶ 73, 88. While these allegations are conclusory, in light of the plaintiffs' other allegations, and "constru[ing] the complaint in favor of the complaining party,” Kardules v. City of Columbus, 95 F. 3d 1335, 1346 (6th Cir. 1996), the facts required for standing follow from these claims by necessary implication. With respect to the undeliverable ID card practice, paragraph 73 can fairly be read as a claim that some of plaintiffs' members have recently registered to vote, but have not yet received their voter ID cards -- so as to be at risk of wrongful disenfranchisement if human error causes them to be returned as undeliverable. The paragraph can also be read to facts establishing representative standing in this case. 12 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 13 of 43 Pg ID 544 claim that other of plaintiffs' members have actually been wrongfully removed from the rolls pursuant to this practice, and will almost certainly be denied the right to vote in the upcoming election. With respect to the out of state driver's license application practice, paragraph 88 necessarily implies that some of plaintiffs' members have applied or are currently planning on applying for out-of-state driver's licenses without actually surrendering their Michigan residence. The paragraph also implies that some of plaintiffs' members have indicated or plan to indicate on their applications that their listed address is not for voter-registration purposes, and that they were or will be unable or unwilling to return the reply card from the state in time to be restored to the active status. Thus, once the logical implications of the sparse language of the complaint are considered, the Court concludes that it satisfies -- just barely -- the requirement of alleging injury in fact to the plaintiffs' membership, so as to support representative standing to challenge both practices at issue here. D. Causal Connection Between the Injury and the Challenged Practices. Michigan claims that any injury suffered by the plaintiff results not from the Secretary’s adverse voter-registration actions, but rather from the actions of the voters which precipitate the Secretary’s decisions. This argument is plausible, but without merit. With regard to the undeliverable ID practice, it does not appear that an eligible voter who gives his correct address could do anything differently to avoid the risk that his or her card would be misaddressed or misdelivered, and as a result returned as undeliverable. With respect to the out of state driver's license application practice, it is true that a voter's registration will not be cancelled if he or she does not apply for a license from another state, and thus that any disenfranchisement is, in a superficial sense, "caused" by that action. But it is equally 13 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 14 of 43 Pg ID 545 plausible to conclude that disenfranchisement may caused by the defendants' allegedly unlawful actions in cancelling the voter's registration. The Court divines no reason, and defendants offer none, why the first of these "causes" is the only one that should count in its analysis of the plaintiffs' standing to sue. E. Redressability Michigan argues against the redressability requirement on the sole ground that because its cancellation-notification and provisional-ballot procedures prevent any voters from actually being disenfranchised, there is no injury to redress. This argument is redundant of the argument the State makes in opposing a finding of injury in fact, and is addressed above in the Court’s consideration of that element of the standing test. In other respects, it is clear that the disenfranchisement alleged by the plaintiffs will cease if, as plaintiffs request in this action, the defendants are ordered to stop rejecting and cancelling the relevant voter registrations, and restore registrations already rejected or cancelled. Therefore, the redressability requirement has been met in this case. F. Additional Representative Standing Requirements. The complaint states that the plaintiff United States Student Foundation has as "a cornerstone" of its activities "helping students make their voice heard at the ballot box, including through non-partisan voter registration drives," and that its "national electoral project focuses on building strong peer-to-peer student electoral coalitions and maximizing voter turnout among college populations." Compl. at ¶ 2. Likewise, the plaintiff ACLU Fund "is extensively involved in a variety of voter empowerment initiatives throughout Michigan, including voter education, collection and analysis of voting irregularities, advocacy for positive election reform, and -- when necessary -- litigation to ensure the protection of voters' rights under the law." Id. at ¶ 3. Disenfranchisement, the injury alleged here, 14 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 15 of 43 Pg ID 546 seems obviously germane to these organizational purposes, and the defendants do not contest this point. Finally, participation by individuals “is ‘not normally necessary when an association seeks prospective or injunctive relief for its members.’” Sandusky Co. Democratic Party v. Blackwell, 387 F. 3d 565, 574 (6th Cir. 2004) (quoting United Food & Commercial Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 546 (1996 . In this matter, the defendants have not identified any need for individual participation, and the Court does not see the necessity for it in seeking the relief requested. G. Conclusion -- Standing to Sue. The plaintiffs have pleaded standing, as representatives of their members, to seek the relief they request. Should this case progress to trial, they will bear the additional burden of proving what they have pleaded in order to conclusively establish their standing to sue. III. Preliminary Injunction Motions. The decision of whether or not to issue a preliminary injunction lies within the sound discretion of the district court. Golden v. Kelsey-Hayes, 73 F.3d 648, 653 (6th Cir. 1996). The Supreme Court and the Sixth Circuit have noted that "the purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981); Six Clinics Holding Corp., II v. Cafcomp Sys., Inc., 119 F.3d 393, 400 (6th Cir. 1997). The Sixth Circuit, however, has advised that "a preliminary injunction is an extraordinary remedy which should be granted only if the movant carries his or her burden of proving that the circumstances clearly demand it." Overstreet v. Lexington-Fayette Urban Co. Gov't, 305 F.3d 566, 573 (6th Cir. 2002) (citation omitted). 15 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 16 of 43 Pg ID 547 When considering whether to grant the "extraordinary" remedy of a preliminary injunction, a district court must consider and balance four factors: (1) whether the moving party has a strong likelihood of success on the merits; (2) whether the moving party would suffer irreparable injury without the preliminary injunction; (3) whether issuance of the preliminary injunction would cause substantial harm to others; and (4) whether the public interest would be served by issuance of the preliminary injunction. Jones v. City of Monroe, 341 F.3d 474, 476 (6th Cir. 2003) (citations omitted). These "are factors to be balanced, not prerequisites that must be met." Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 230 (6th Cir. 2003) (citation omitted). A district court must make specific findings concerning each of the four factors unless fewer are dispositive of the issue. Performance Unlimited v. Questar Publishers, Inc., 52 F.3d 1373, 1381 (6th Cir. 1995); Jones, 341 F.3d at 476 (citations omitted) (a court "is not required to make specific findings concerning each of the four factors used in determining a motion for a preliminary injunction if fewer factors are dispositive of the issue."). A. Likelihood of Success on the Merits. 1. Lawfulness of the Practices. a. The undeliverable ID practice. The parties' dispute over the legality of the undeliverable ID practice essentially boils down to a disagreement over the meaning of the word "registrant," as it appears in the NVRA. As the Court noted earlier, when a voter's original voter ID card is returned to a local clerk as undeliverable, the clerk marks the voter's registration in the QVF as "rejected,"4 without following the procedures mandated by the NVRA for removing voters 4 There apparently is no dispute that such a person has been "removed . . . from the official list of eligible voters" within the meaning of 42 U.S.C. § 1973gg-6(d)(1), despite the fact that his or her name remains listed in the QVF. The Court concludes that persons designated as ineligible to vote 16 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 17 of 43 Pg ID 548 from the rolls based on a change of address.5 The NVRA, however, provides that only "registrants" enjoy the protection of these procedures. Plaintiffs therefore claim that a potential voter who sends in registration materials becomes a "registrant" under the NVRA as soon as a Department of State employee or a local clerk processes the materials and enters the voter's name into the QVF. By contrast, the defendants argue that a potential voter's registration is actually not effective until the voter receives his or her voter ID card. If the defendants prevailed on this point, the Court would have little option but to conclude that the undeliverable ID practice does not remove "registrants" from the rolls, because the potential voters whose registrations are marked "rejected" after their cards are returned as undeliverable would never have been registered in the first place. The parties cite what appear to be dueling statutes to establish their respective positions on the issue of when a potential voter becomes registered to vote as a matter of Michigan law. Defendants point out that M.C.L. § 168.500c states that a person whose original voter ID is returned as undeliverable "shall be deemed not registered." In response, the plaintiffs rely upon M.C.L. § 168.509o(2), which provides that "[n]otwithstanding any other provision of law to the contrary . . . a person who appears to have in fact been so removed, even if their registrations appear in the same document with voters who remain listed as eligible. In any event, the precinct lists are also indisputably "official list[s] of eligible voters," and if a voter's registration has been rejected or cancelled, it is clearly removed when those lists are compiled from the QVF. 5 It could be argued that any removals of voters produced by the undeliverable ID practice are made on the grounds that the removed voters have never shown that they have a Michigan residence in the first place, rather than that they have moved away from the undeliverable addresses, and that § 1973gg-(d) therefore does not apply in this circumstance at all. The defendants, however, do not make this argument, apparently because failure to prove residence is not a permissible ground for removal under the NVRA. The Act provides that a registrant may be removed from the rolls based only on his own request, criminal conviction, mental incapacity, the voter's death, or the voter's change of residence. 42 U.S.C. § 1973gg-6(a)(3) and (4). Thus, if the plaintiffs are correct that the undeliverable ID practice actually does remove already-registered voters, change of residence is the only possible ground for such removals under the NVRA, and the § 1973gg-6(d) provisions will govern the removals. 17 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 18 of 43 Pg ID 549 vote in an election and whose name appears in the qualified voter file for that city, township, village, or school district is considered a registered voter." The Court regards this dispute as largely irrelevant, however, because making the question of who is a "registrant" a matter of state law would frustrate the NVRA's purpose of regulating state conduct of elections, by essentially permitting states to decide when they will be bound by the Act's requirements. If Michigan can label potential voters who have not received their IDs as not "registered" under the NVRA, nothing is to stop it from attaching that same label to any other group of people, and thus from circumventing the procedures mandated by the NVRA whenever it sees fit. Instead, the Court concludes that whether a potential voter is a "registrant" entitled to the NVRA's protections is clearly a question of federal law, to be answered by a careful consideration of the substance of the potential voter's status in the state registration program in question. Indeed, the plain language of the NVRA virtually dictates that a person be regarded a "registrant" within the meaning of that statute at the moment his or her name appears on "the official list of eligible voters." See 42 U.S.C. § 1973gg-6(d)(1).6 In Michigan, as noted above, this list is the QVF (exclusive of registrations designated "rejected" or "cancelled") and the individual precinct rolls generated from it. Thus, the lawfulness of the undeliverable ID practice ultimately hinges on whether Michigan lists a potential voter as permitted to vote on the QVF as soon as it processes his or her registration application, without waiting to determine whether it will be returned as undeliverable. In other words, the central question 6 Since the statute only governs when a registrant can be removed from the list of eligible voters, it could be construed in the strictest sense to permit a state never to place some or all of its "registrants" on that list in the first place. But this interpretation would have a similar effect of permitting states to follow NVRA removal procedures only when they saw fit, and thus of completely neutering those procedures. It is also theoretically possible that some persons whose names appear on the list of eligible voters are nevertheless not "registrants." The defendants here, however, make no such contention with respect to potential voters whose registrations were affected by the undeliverable ID practice. 18 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 19 of 43 Pg ID 550 is: if a potential voter's ID card were to be returned as undeliverable only after an election has intervened, would the voter's QVF status have permitted him or her to vote in that election in the meantime? At the hearing on this motion, counsel for the defendants represented that the answer to these questions is "yes." In fact, counsel stressed at the hearing that a potential voter whose ID is returned as undeliverable may nonetheless cast a regular ballot on election day if he or she presents a receipt of registration at the polls. Since the Court accepts these facts as true, the Court also concludes that a potential voter in Michigan is a "registrant" under the NVRA the moment the state processes his or her registration, and that the voter may only have his or her status changed to one that would not permit a valid vote (regardless of whether Michigan calls the change "rejection," "cancellation," or anything else) pursuant to the provisions of the statute. In Ass'n of Cmty. Orgs. for Reform Now v. Miller, 912 F. Supp. 976 (W.D. Mich. 1995) (hereinafter "ACORN"), the court took a contrary view, and found Michigan's categorization of voters as registered or unregistered to be conclusive of the questions involved. In support of its position, the Western District of Michigan cited portions of the NVRA's legislative history reflecting a congressional desire to leave the states "discretion" to tailor their notification procedures to prevent fraud. Id. at 987 (quoting Sen. Rep. No. 6, 103d Cong., 1st Sess., at 30 (1993); H.R. Rep. No. 9, 103d Cong., 1st Sess., at 14 (1993), U.S. Code Cong. & Admin. News 1993 at 105, 118, 134). While such discretion is undoubtedly important, the terms of the NVRA, which the Court reads to be clear and unambiguous on the issue, say absolutely nothing about it. Moreover, the state's discretion can be appropriately preserved within the provisions of § 1973gg-6(d), without making its procedures entirely optional for any state in the union. Nothing prevents Michigan, for example, from creating a new "pending" voter registration status that will bar potential 19 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 20 of 43 Pg ID 551 voters from voting, and thus render them not NVRA "registrants," for a limited time after their information is added to the QVF, and providing that any registrations returned as undeliverable during that time will be rejected. What the state may not do and still act consistently with the NVRA is to place a potential voter's name on the QVF in a status that permits the registrant to vote, only to later mark the registration as "rejected" at a later date -- possibly even after the registrant has cast a vote. Because the defendants in this case appear to be doing precisely that, the Court concludes that the plaintiffs have shown a strong likelihood that the undeliverable ID practice violates federal law.7 b. The driver’s license practice. The defendants concede that the driver's license practice involves cancelling voter registrations based on the voter's change on residence, such that 42 U.S.C. § 1973gg- 6(d)(1) requires either written confirmation of the address change from the voter, or written notice to the voter followed by a waiting period of two federal elections. Defendants claim, however, that by applying for a driver's license in another state, a voter is confirming his or her change of residence in writing, in satisfaction of subparagraph (A) of that provision. In support of this contention, they cite another portion of the NVRA, codified at 42 U.S.C. § 1973gg-3(a). This subsection provides that: (1) Each State motor vehicle driver's license application (including any renewal application) submitted to the appropriate State motor vehicle authority under State 7 For this reason, it is for the most part unnecessary to reach the other asserted grounds for the unlawfulness of the undeliverable ID practice. Specifically, although M.C.L. § 168.509aa provides procedural protections similar to those of 42 U.S.C. § 1973gg-6(d), the Court expresses no view on the state-law question of who qualifies as a "voter" within the meaning of this statute, so as to be entitled to those protections. Since these procedures are redundant to those of the NVRA, it is irrelevant whether Michigan offers them to a narrower class of persons than those deemed "registrants" under federal law. In considering what relief is appropriate, therefore, the Court will briefly consider below the plaintiffs' claim that the Fourteenth Amendment and the Civil Rights Act, 42 U.S.C. § 1971(a)(2)(A), require that the registrants whose original voter IDs are returned as undeliverable be treated the same as those who have their duplicate IDs returned to the sender. 20 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 21 of 43 Pg ID 552 law shall serve as an application for voter registration with respect to elections for Federal office unless the applicant fails to sign the voter registration application. (2) An application for voter registration submitted under paragraph (1) shall be considered as updating any previous voter registration by the applicant. Further, subsection (d) of the same section provides that [a]ny change of address form submitted in accordance with State law for purposes of a State motor vehicle driver's license shall serve as notification of change of address for voter registration with respect to elections for Federal office for the registrant involved unless the registrant states on the form that the change of address is not for voter registration purposes. The plaintiffs urge that subsection (d) applies only to changes of address within a single state, and not to an original application for a driver's license in another state. This specific question has not been exhaustively briefed, and the Court will not decide it now. It does seem to the Court, however, that interpreting subsections (a) and (d) to both apply to an original driver's license application would create the potential that the two sections might mandate contradictory outcomes in some cases. Specifically, if an applicant for a driver's license signed a voter-registration application in conjunction with the driver's license paperwork, subsection (a)(2) would require this action to be considered an update to the previous voter registration. This would permit the address on the old registration to be replaced with the address on the new application -- indeed, such address updates would seem to be the main purpose of paragraph (2). But if subsection (d) were also to apply to the case, the applicant would additionally be able to indicate on the driver's license application that the change of address was not for voting purposes. Obviously, both of these mandates could not be simultaneously fulfilled. The easiest way to avoid potentially inconsistent outcomes such as these would be to accept the plaintiffs' invitation to interpret the phrase "change of address form" in subsection (d) as not including applications for an entirely new driver's license in a state where the applicant has not previously held a license. 21 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 22 of 43 Pg ID 553 Should the defendants prefer a different construction, they should propose some alternative solution to this problem -- and authority for their proposal -- as soon as possible. Whatever the correct construction of subsection (d) may be, however, there can be little doubt that the out of state driver's license practice is violative of the NVRA. Even if out of state driver's license applications qualify as "change of address forms" under subsection (d), that very subsection still clearly requires states to ascertain whether the applicant has designated the application as not a change of address for voter registration purposes. The plaintiffs claim, and the defendants have not contradicted, that Michigan currently has no procedure for doing so. If, on the other hand, subsection (d) does not apply to driver's license applications, then subsection (a) would only permit the Secretary to cancel an applicant's Michigan voter registration if the applicant actually registered to vote in conjunction with the application. But again, there is no evidence that the current practices in place in the state of Michigan include any efforts, by the defendants or anyone else, to determine whether a voter actually does so. The defendants claim that applying for a driver's license in another state is in fact confirmation of a change of address for voting purposes even if, as is permitted by the NVRA, the voter designates it otherwise. This is true, the defendants assert, because under the law of every state except Hawaii, only residents are permitted to apply for driver's licenses. As a result, they argue, no Michigan voter will be permitted to apply for a driver's license in another state without also confirming his or her residence in that state. Even if the defendants' survey of state laws is correct, their conclusion is invalid for two different reasons. First, even if it is unlawful in almost every state to apply for a driver's license without being a resident there, it is dubious whether every person applying for a driver's license actually does confirm his or her residency in the state of application. 22 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 23 of 43 Pg ID 554 Defendants concede that fully eighteen states -- including Michigan's largest contiguous neighbor, Ohio -- have no requirement that a driver's license applicant actually prove residency. Response brief, docket no. 15, ex. A. Thus, the reality is that state driver's license application procedures permit some applicants, through ignorance of or even outright disregard for the law, to apply for driver's licenses in different states even while representing that their home address or domicile is still in Michigan. Although defendants' evidence indicates that this action is unlawful in most states, it still does not constitute written confirmation of an address change, and thus cannot justify the cancellation of an applicant's Michigan voter registration -- which in any event would be an illogical consequence for this particular form of lawlessness. Second, and more importantly in the view of the Court, there is no reason to believe that the kind of "residence" that any given state requires in order to issue a driver's license is identical to "residence" for voting purposes. Unless it is at least possible for a person to have different addresses for his or her driver's license and voting residences, it would be nonsensical for the NVRA to permit a voter to change the former without also changing the latter. In fact, Michigan itself permits out-of-state driver's license applicants to retain their active status in the QVF by affirming that their out of state addresses are only temporary, and that they remains eligible to vote in Michigan. Thomas aff., docket 15 ex. A, at ¶ 11. Thus, even the state recognizes that voters can be eligible both to vote in Michigan and to apply for a driver's license in another state, and that the residence requirements for the two are not always identical. For all these reasons, then, and contrary to the defendants' 23 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 24 of 43 Pg ID 555 contention, the appearance of an out-of-state address on a driver's license application simply does not establish that the applicant is no longer an eligible Michigan voter.8 In their complaint and briefing on the instant motion, the plaintiffs essentially argued that every cancellation pursuant to the out of state driver's license practice was unlawful. As the foregoing makes clear, this argument is incorrect. 42 U.S.C. § 1973gg-3(a) permits such cancellations if a driver's license applicant also registers to vote in his or her new state, and, if it applies, subsection (d) of the same section permits such cancellations unless the applicant affirmatively opts out of them. At the hearing on the preliminary injunction motion, the plaintiffs narrowed their contentions to cover only cancellations precluded by one or both of these provisions The Court concludes, therefore, based upon all of the foregoing analysis, that the plaintiffs' legal claim is likely to succeed on the merits.9 2. Likelihood of Success on the Standing Issues. The Court is mindful that to succeed on the merits at trial, the plaintiffs will bear the burden of proving their standing to sue in addition to the unlawfulness of the defendants’ practices, see Lujan v. Defenders of Wildlife, , 561 (1992), and that a plaintiff's likelihood of successfully showing standing is properly considered as part of the overall analysis of the likelihood of success on the merits, see N.E. Ohio Coalition for Homeless & Serv. Employees Int'l Union v. Blackwell, 467 F. 3d 999, 1010 (6th Cir. 2006) ("The weakness of plaintiffs' showing of standing leads us to conclude that their likelihood of 8 Even if every out of state driver's license applicant were to have moved out of Michigan for voting purposes, the NVRA would still clearly forbid the Secretary from regarding their applications as evidence of that fact if the applicants had designated otherwise. In this case, though, regardless of any NVRA violation, the plaintiffs would have no standing to sue because there could be no supportable allegation of harm since no voter would have been wrongfully disenfranchised. 9 There is, accordingly, no need to consider the plaintiffs' other challenges to the driver's license practice. 24 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 25 of 43 Pg ID 556 success on the merits is not strong.") The Court will now analyze whether the plaintiffs are likely to succeed on the merits of the standing issues in this case. a. Undeliverable ID practice. As the Court noted previously, to establish representational standing in this case, the plaintiffs will eventually have to prove that at least one of their members actually has suffered or is at risk of suffering wrongful disenfranchisement as a result of the complained of practices. Since plaintiffs plead that they have a total Michigan membership of over 20,000, it appears likely that they will be able to produce one or more members who have registered recently enough that they are still in doubt as to whether their registration will be wrongfully cancelled as a result of their ID being mistakenly returned as undeliverable. The Court has already determined that exposure to such a risk from the actions in question here is sufficient to confer standing. Thus, considering the lawfulness and standing prongs together, the Court finds that plaintiffs have a very strong likelihood of succeeding on the merits of their challenge to the undeliverable voter ID practice. b. Out of state driver's license application practice. The plaintiffs' standing to challenge the out of state driver's license application practice is in more serious doubt. As the Court noted above, the voters placed at risk of disenfranchisement by this practice appears quite narrow. The Court believes there to be three characteristics common to all the members of this group: (1) they have applied or plan to apply for a driver's license in a state other than Michigan; (2) they have designated or plan on designating that their address on their application is not for voter-registration purposes; and (3) they have been or will actually be eligible to vote in Michigan in at least one election after their registrations were or will be 25 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 26 of 43 Pg ID 557 cancelled.10 Since the Court regards it to be nearly impossible for a Michigan resident to inadvertently apply for a driver's license in another state, persons not in this group face no risk of wrongful disenfranchisement from the driver's license practice, and thus they have no standing to challenge it. The Court is considerably less confident that one of the plaintiffs' members will prove to have these characteristics than that one of their members has recently registered to vote, as is required for standing to challenge the undeliverable ID practice. The Secretary informed the Court both in her brief and at the hearing in this matter that she receives notice of about 72,000 out of state driver's license applications every year.11 At the hearing, the Court directly questioned counsel for both sides as to how many out of state drivers license applicants indicate that the address on their applications are not for voting purposes, and whether they are legally correct in so indicating. Their responses made it apparent to the Court that neither side can present, because no data whatever exists, any evidence or other information that would allow the Court or any other finder of fact to answer these questions. Furthermore, while -- for the reasons discussed previously -- the defendants' argument that most states permit only residents to apply to them for driver's licenses does not establish that the driver's license practice harms no one at all, it certainly does suggest strongly that the number of persons harmed by the practice may be small. Although the residence requirement for driver's license purposes may be less stringent than that for voting purposes, it nevertheless undoubtedly deters many people who satisfy neither of 10 If a driver's license applicant has indicated that his or her change of address is not for voter registration purposes, then the Secretary's cancellation of his or her registration is a violation of the NVRA regardless of whether the voter actually remains eligible in Michigan. Nevertheless, if the voter is not eligible in Michigan, then the voter has not suffered the harm of disenfranchisement and thus will lack standing to sue. 11 In their brief, the plaintiffs claimed that the number was approximately 280,000 per year, but at the hearing they conceded the correctness of the Secretary's figure. 26 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 27 of 43 Pg ID 558 them from applying for out of state driver's licenses-- and thus prevents them from having their Michigan voter registrations cancelled. Thus, the Court finds that the only persons who are even potentially harmed by the driver's license practice are those who either applied for out of state driver's licenses (and surrendered their Michigan licenses) despite not meeting the residency requirement in the state of application, or who applied for a driver's license in states where they satisfied the residency requirement for receiving a driver's license, but not for voting. The Court therefore concludes that the number of voters who will be able to meet the injury in fact requirement for standing, while not zero, is likely to be correspondingly small. For the plaintiffs to be entitled to a permanent injunction on a theory of representative standing, they will have to show that at least one member of this group of people is also a member of one of their organizations. While it is certainly possible that they will be able to make such a showing, there has been no discovery or any other factual development on this issue in the case -- indeed, both parties affirmatively state that no facts or data exist to resolve the question -- and as a result the Court does not have any confidence that the plaintiffs will be able to do so. Thus, the plaintiffs' likelihood of success on the merits of the standing issues with regard to the driver's license practice can best be described at this juncture as questionable. ****** The Court's analysis of the standing issue should not be construed to mitigate what seems to be the clear unlawfulness of what the Secretary is doing with regard to out of state driver's license applications. But even if the outcome of the NVRA challenge were absolutely certain, plaintiffs' overall likelihood of success on the merits can be no greater than their likelihood of proving their standing. Thus, the plaintiffs' overall likelihood of success on the merits in the view of the Court is questionable. 27 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 28 of 43 Pg ID 559 B. Irreparable Harm. The injury threatened to their members that establishes the plaintiffs' representative standing is the deprivation of the right to vote. Authorities are split on the issue of whether this type of alleged harm is irreparable per se. Compare, e.g., Williams v. Salerno, 792 F. 2d 323, 326 (2d Cir. 1986) ("The registration applicants in this case would certainly suffer irreparable harm if their right to vote were impinged upon"), with Chisom v. Roemer, 853 F. 2d 1186, 1188-89 (5th Cir. 1988) ("We are not prepared to adopt a per se rule in such a vital area of federal-state relations.") While the Sixth Circuit appears not to have decided the issue, even the leading case declining to adopt a per se rule, Chisom, was a decision on whether to enjoin an election for state office, and not whether to require a state to permit more persons to vote in a federal election. Chisom, 853 F. 2d at 1189. Even in that context, the 5th Circuit recognized that a preliminary injunction is appropriate "when the threatened harm would impair the court's ability to grant an effective remedy." Id. (citation omitted). In this case, where state sovereignty is not squarely implicated and a federal election is approaching rapidly enough that, according to the defendants, delaying the issuance of an injunction until close to the election date would risk organizational chaos in the Michigan Department of State, the Court finds that any disenfranchisement effected by the undeliverable ID or driver's license practices would indeed constitute irreparable harm. Thus, the only consideration mitigating the strength of this factor in favor of an injunction is the possibility that the harm might not actually be suffered by any of the plaintiffs' members. With respect to the practices at issue here, however, the irreparable harm inquiry diverges from the Court's analysis on standing because the plaintiffs' standing is predicated not on actual harm to their members, but rather on a risk of harm that may or may not occur in any individual case. This possibility -- that the potential harm that confers 28 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 29 of 43 Pg ID 560 standing on the plaintiffs may not actually materialize with respect to any of their members -- is clearly relevant to the question of whether plaintiffs will suffer irreparable harm without a preliminary injunction. In this light, each of the practices will be analyzed in turn. 1. The undeliverable ID practice. The plaintiffs have demonstrated a strong likelihood of proving standing to challenge the undeliverable ID practice because every eligible Michigan voter who registers is at risk of being stricken from the rolls until he or she actually receives an ID card. But, since only 1,500 registrants have been removed in this fashion this year-- as compared to more than 70,000 per year as a result of the driver's license practice-- only a very small fraction of the people who register actually suffer the harm of being removed from the rolls, and thus deprived of the right to vote. Further, at the hearing held in this matter, the defendants stressed that a voter whose registration has been "rejected" pursuant to the undeliverable ID practice may nonetheless cast a regular ballot if he or she presents a receipt of registration at the polls. This obviously will prevent disenfranchisement, but only for those voters who bring receipts with them to the polls. Presentation of a receipt, however, is not required of other voters, and since many or most Michigan residents removed from the lists pursuant to the undeliverable ID practice will in reality not receive separate notice of removal, they will likely not even know that their registrations have been rejected, and thus will be unaware of the necessity of bringing their receipts to the polls even if they have in fact retained them. Further, the plaintiffs argue that voters who register by mail do not even receive receipts in the first place, and as a result, the number of disenfranchisements prevented by the possibility of presenting a voter registration receipt is likely to be small. 29 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 30 of 43 Pg ID 561 The defendants additionally argue that both the undeliverable ID practice includes the sending of a postage-prepaid, preaddressed reply card, which the voter can mail back and be restored to the rolls. While this additional practice will not cure the deficiency of the programs under the NVRA, if substantial numbers of eligible voters actually return cards it would reduce the number of persons who are harmed by the practices, and thus the likelihood that any of that group are members of the plaintiffs. There are three possible objections to effectiveness of this practice. First, if the defendants' rationale for removing a voter from the rolls is that the voter does not live at the address they have on file, then mailing a notice to that address is a poor way of permitting the voter to clarify that the voter is still a permanent Michigan resident. It seems likely that even if they remain eligible Michigan voters, a substantial number of registrants will not receive the reply card, or at least not receive the card in time to return it, for the very same reasons that led the defendants to believe that they have abandoned their residences. Second, even if voters receive the reply cards, at least some of them will not fill them out (or not fill them out properly), and the NVRA does not permit Michigan from removing them based on their failure to do so. Finally, even voters who receive the cards and return them will have been wrongfully taken off the rolls until the date that their cards are processed and their registrations are reactivated. The combination of these three objections convinces the Court that, while this backup procedure reduces somewhat the likelihood that plaintiffs' members will be injured by these undeliverable ID practice, it by no means eliminates it.12 12 The defendants also argue, in defense of both the undeliverable ID and driver's license practices, that because a voter whose name has been removed from the rolls can always cast a provisional ballot, no harm is done by the removal. Plaintiffs respond that under both federal and state law a voter's eligibility for purposes of counting a provisional ballot must be determined by the same standards as is her eligibility to cast a regular ballot. See 42 U.S.C. § 15482(a)(4); M.C.L. § 18.183. Thus, even if a voter who does not appear on the rolls is permitted to cast a provisional ballot, this only delays the inevitable disenfranchisement. 30 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 31 of 43 Pg ID 562 It is undisputed that more than one thousand voters have been disqualified so far in 2008 pursuant to the undeliverable ID practice. But neither side has provided the Court with any information as to how many of these disqualifications are actually wrongful. Plaintiffs argue that some simply must be wrongful, because human error in addressing and delivering voter IDs is inevitable, and the Court agrees with the plaintiffs' analysis. The Court, however, also regards the likely number of these errors to be small enough as to raise serious questions about whether the undeliverable ID practice will actually adversely affect any of plaintiffs' membership if a preliminary injunction is not entered. Overall, and based upon the analysis set forth here, the Court concludes that although the number of plaintiffs' members likely to be adversely affected by the practice is relatively low, these members face certain irreparable harm. 2. The driver's license practice The Court has already noted that the plaintiffs have only a questionable likelihood of proving their allegations of standing to challenge the driver's license practice, because of the low likelihood that one of the (probably) small number of Michigan voters harmed by the practice is a member of one of the plaintiffs. This alone would dictate a conclusion that any likelihood of irreparable harm to plaintiffs' members is insufficient to weigh in favor of a preliminary injunction. Additionally, the Court recognizes that the reply-card component of the driver's license practice, although subject to the same shortcomings identified in connection with the undeliverable ID reply cards, does provide some out of state driver's license applicants with the opportunity to reaffirm their Michigan residence and remain on the rolls. Again, this does not satisfy the NVRA, but it does provide some registrants the chance to avoid disenfranchisement, and thus likely decreases even further the number of persons who suffer irreparable harm as a result of the driver's license practice. For these 31 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 32 of 43 Pg ID 563 reasons, the Court is unable to conclude at this juncture that any plaintiffs' members are likely to suffer irreparable harm if a preliminary injunction is not entered against the driver's license practice. C. Balance of Hardships from Entry of an Injunction. The defendants argue that making the changes that the plaintiffs seek in their motion for preliminary injunction would impose serious administrative difficulties, especially if an injunction is entered close to the November, 2008 election. For instance, the defendants claim that the only method of restoring the active status of the cancelled registrants would, if implemented, also affect the registrations of anyone who first applied for a driver's license in another state and then re-registered in Michigan. These voters, according to the defendants, would see their QVF addresses revert to the ones that were current before their initial out of state driver's license application. If the Department of State is forced to deal with these and other difficulties -- not to mention the task of identifying which registrations are entitled to reactivation13 -- the result, the defendants warn, could be their inability to deal with the other requirements of conducting a smooth election. The Court fully agrees with the State on this issue and makes what it regards a common sense conclusion that the logistical problems involved with restoring a large number voters to the rolls, as the plaintiffs request in their motion, are likely to be significant. Plaintiffs contend, however, and rightly so in the judgment of the Court, that any hardship suffered by the state of Michigan and its officials as a result of the entry of the requested injunction would be largely self-imposed. Two reasons support the Court's conclusion: First, the NVRA language governing these practices is clear enough that the 13 The defendants claim that this task would be nearly impossible. Because it also has significant implications for voter fraud, this claim and the reasons for it are discussed more fully below, with respect to its impact on the public interest. 32 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 33 of 43 Pg ID 564 defendants should have been on notice of the potential that they might be found unlawful -- as well as being on notice of the kind of remedial action that might be required in the event of such a finding. Second, at the hearing held in this matter, the plaintiffs represented -- without any sort of contest from the defendants -- that the plaintiffs explained their objections to these practices to the defendants as early as July, 2007, two months before the filing of this lawsuit. The counsel for the plaintiffs also asserted -- and the state of Michigan did not contest -- that no official from the state met with the plaintiffs to address, resolve, or even respond to their claims. Thus, the state defendants have actually had a considerable period of time in which to consider how to smoothly implement the sorts of relief the plaintiffs are asking for here. If the defendants have failed to undertake such considerations, any hardship faced by the defendants now is squarely attributable as much to the lack of preparation as to the actual changes the plaintiffs are asking for, and should be discounted accordingly. As a result, the Court finds that the potential hardship to the defendants weighs only very slightly against the entry of a preliminary injunction. Additionally, the Court notes that due to the much larger potential number of voters who might have to be restored to comprehensively address the driver's license practice, coupled with the Court's lessened ability to determine how many voters will actually be harmed by the practice, this factor weighs somewhat more perceptibly against restoring those voters than it does for the voters affected by the undeliverable ID practice. D. The Public Interest. The defendants argue that the injunction requested by the plaintiffs here would harm the public interest by opening the door to voter fraud. This is true, they contend, is because Michigan's system has been set up on the premise that no one whose voter ID is 33 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 34 of 43 Pg ID 565 returned as undeliverable, or who applies for a driver's license in another state, is entitled to vote in Michigan. As a result, the state has no means of determining whether a registrant whose ID has been returned as undeliverable is actually a resident of Michigan, or whether an applicant for an out of state driver's license has designated, as permitted by the NVRA, that the application is not to be used for voting purposes. The Court will now examine the impact an injunction might have on the public interest in regard to each of Michigan's challenged practices. 1. Undeliverable ID practice. The defendants' invocation of the public interest on the issue of undeliverable IDs amounts to an argument that the procedures required by the NVRA pose an unacceptable risk of fraud to the state of Michigan. The state is rightly concerned that some, and perhaps many, of the "rejected" voter registrations were fraudulent. Whatever the merits of that concern may be, however, in the context of the current litigation, the concern has been rejected by Congress when it enacted the terms of the NVRA. "[T]he public has an interest in the enforcement of federal statutes." Coxcom, Inc. v. Chaffee , 536 F. 3d 101, 112 (1st Cir. 2008). Whether or not a person is actually entitled to vote in Michigan, the NVRA clearly requires that once a person is a "registrant" he or she may not be removed from the voter rolls except by operation of the procedures laid out in the Act. Although it might be desirable for the defendants to develop and implement other measures to remove ineligible voters from the rolls before they become NVRA "registrants", the defendants' acts in doing so -- whatever they may be -- are not a prerequisite to the NVRA's enforcement. Likewise, the fact that the defendants could have developed a lawful policy that would have removed some of the same registrations from the rolls does not detract substantially from the illegal manner in which each and every one of these removals 34 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 35 of 43 Pg ID 566 actually did occur. The public interest cannot weigh heavily against restoring voters to the status that, given Michigan's current voter registration regime, those voters had been entitled to all along pursuant to the applicable federal law. 2. Driver's license practice. With respect to the driver's license practice, the Court finds that the defendants' concerns carry more weight. Because a great number of out of state driver's license applicants no doubt simultaneously register to vote (or decline to designate their change of address as being for voting purposes), many -- and perhaps most -- of the removals under this practice were perfectly lawful under the NVRA. Since the parties have no way of knowing which applicants did what in this regard, however, the only way for the defendants to immediately restore any wrongfully-cancelled registrations, and to avoid any further wrongful cancellations, is apparently to undo every cancellation pursuant to the driver's license practice, and to stop entering any further cancellations pursuant thereto. The result would be returning to "active" status the registrations of up to 200,000 voters, an unknown but probably large number of whom were initially removed from the rolls in accordance with the NVRA in the first place and who are in fact no longer eligible to vote in Michigan. Plaintiffs have offered no evidence contradicting these claims by defendants, but assert that if they are true, the burden of developing a method for avoiding the restoration of voters who are removable under the NVRA properly lies on the defendants. This is very likely the case, but the Court cannot ignore the fact that the defendants' claimed inability to immediately develop such a method will have a significant impact on the public interest. The public has an interest on both sides of this case. On the one hand, there is undoubtedly a strong public interest in ensuring that all eligible voters are able to cast their 35 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 36 of 43 Pg ID 567 votes in an election. On the other hand, the public has a strong interest in the prevention of fraudulent voting as well.14 A question exists as to whether the Secretary's practices at issue here removed more ineligible than eligible voters from the rolls, but in determining where the balance of the public interest lies the interests providing resolution to the question cannot be weighed against each other on a one-for-one basis. It seems likely that the portion of ineligible voters removed from the rolls who will attempt to vote after becoming ineligible is smaller than the portion of wrongfully-removed eligible voters who will show up at the polls, and so the public interest in removing ineligible voters must be discounted accordingly. Additionally, the harm from disenfranchisement is concrete and serious even if it occurs to only one individual, whereas the harms from fraudulent voting -- loss of public confidence in the election process and the risk of distorted outcomes -- are more diffuse, depending as much on the volume of fraudulent votes as on the fact that any one of them is being cast.15 The risk of fraudulent voting must nevertheless be a serious consideration in deciding whether to require the state to restore to active status (or refrain from cancelling in the first place) the registrations of some 200,000 voters, a great number of whom are likely not entitled to vote. As noted previously, neither side has provided any data relating to how many of the registrations cancelled pursuant to the driver's license procedure were those of eligible Michigan voters. On the record available at this preliminary stage, the Court concludes that this is likely to be quite a small portion of the cancellations, and 14 "Fraudulent" here refers both to active attempts to circumvent the election laws, and to situations in which a voter is simply mistaken as to which state he or she is eligible to vote in. 15 Disenfranchisement of eligible voters also risks distorting election outcomes, though if one assumes that anti-fraud measures will prevent more fraudulent than legitimate votes, then such measures will still have a net effect of reducing rather than exacerbating these sorts of distortions. 36 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 37 of 43 Pg ID 568 consequently that the public interest in preventing the mass reactivation of ineligible voters is of significant weight. Based on the foregoing, the Court draws slightly differing conclusions with respect to the impact on the public interest of the prohibitory and mandatory aspects of the relief from the driver's license practice requested by the plaintiffs. Currently, the Secretary is cancelling voter registrations based on out of state driver's license application, without even having before her the key piece of information necessary to determine whether the NVRA permits such removals; that is, whether the applicant has designated the change of address as not for voting purposes. This is unlawful, and the public policies in favor of preventing unlawful disenfranchisement and enforcing federal statutes clearly dictate that it be stopped. This would in no way obstruct the secretary's task of avoiding the harm to the public interest that would result from retaining ineligible voters on the rolls, since she has been and will remain free to adopt any method for doing so that is permitted by the NVRA. With respect to cancellations that have already occurred, however, the NVRA has already been violated, and the only question is how that violation can be remedied in a manner most consistent with the public interest. Restoring voters who were not entitled under the NVRA to remain on the rolls is to be avoided if possible. Given the defendants' claims as to the information they have, a mass reactivation of the type requested by the plaintiffs would risk grave harm to the public interest by permitting a large number of ineligible voters to vote. Accordingly, the Court finds that this factor weighs rather strongly against the mandatory relief requested by plaintiffs. 37 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 38 of 43 Pg ID 569 IV. Summary and Form of Relief A. The Undeliverable ID Practice. As to the undeliverable ID practice, the Court concludes that the plaintiffs have made a strong showing of success on the merits and a substantial but not overly strong showing of irreparable harm. The prohibitory injunction requested by the plaintiffs would work very little hardship on the defendants and would be in the public interest. The mandatory injunction would result in some, mostly self-imposed, hardship for defendants, but entering the injunction would also serve the public interest by restoring the registrations of voters entitled under the NVRA to be on the rolls. Accordingly, the Court will grant both prohibitory and mandatory injunctions with respect to the undeliverable ID practice. A question remains as to the proper form of this relief. While these registrants seem entitled under the NVRA to have their cancellations reversed, the defendants point out (and the plaintiffs do not dispute) that because their IDs were returned as undeliverable, there is reason to doubt whether some of them actually live in Michigan, and thus whether they are entitled to vote here. This suggests that, after reversing the cancellations of these voters' registrations, it would be appropriate for the defendants to take additional steps to verify the Michigan residence of the voters before permitting them to vote. They plaintiffs, however, briefly argue that both the Equal Protection Clause and a provision of the Civil Rights Act, codified at 42 U.S.C. § 1971(a)(2)(A), prohibit treating voters whose original IDs are returned as undeliverable any differently from those whose duplicate IDs are similarly returned. Since a voter whose duplicate ID is returned as undeliverable is marked as "challenge" on the QVF, the plaintiffs seem to argue that this is the only step defendants should be permitted to take to verify the restored voters' residence. 38 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 39 of 43 Pg ID 570 The Court does not agree. The relevant portion of the Civil Rights Act prohibits the application of different "standards, practices or procedures" in determining whether any two citizens of a state are qualified to vote. This simply requires that if Michigan wishes to impose unique procedural requirements on the basis of a registrant's original voter ID being returned as undeliverable, it must impose those requirements on everyone whose original ID is returned as undeliverable. In the Court's view, the treatment of registrants whose other documents are similarly returned is simply irrelevant under the statute.16 The Court likewise does not consider these requirements to be any sort of disparate treatment unrelated to a legitimate state interest, as the plaintiffs argue pursuant to their equal- protection claim. The Court makes a common sense conclusion that a person whose first ID card is returned as undeliverable to his or her registered address is less likely to actually reside at that address -- or anywhere else in Michigan -- than a person who has previously received an ID card at his or her Michigan address but now appears no longer to live there. Since the state certainly has an interest in preventing non-residents from voting within its borders, the state is therefore entitled to draw distinctions between these two different classes of persons. As a result, the defendants need not treat voters whose original IDs are returned as undeliverable identically to any other class of voters. This Court's injunction will not prevent them from requiring of such voters whatever further proofs of residence may be necessary or permitted under state law and the NVRA. What the defendants must do, however, is 16 There accordingly is no need to resolve the parties' dispute over whether this federal statute can be enforced through a private lawsuit under 28 U.S.C. § 1983, or only by the Attorney General. Cf. McKay v. Thompson, 226 F. 2d 752 (6th Cir. 2000) (holding that 42 U.S.C. § 1971(a) is not directly enforceable in a private action). 39 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 40 of 43 Pg ID 571 restore the cancelled registrations to some status that will not by itself, as their current status does, require the rejection of a ballot cast by these voters. B. The out of state driver's license application practice. With respect to the out of state driver's license application practice, the Court concludes that there is only a questionable likelihood that any of plaintiffs' members will suffer an injury in fact, and thus that plaintiffs have only a questionable likelihood of success on the merits on the issue of their standing to sue. This weak showing of injury also indicates a relatively low probability that plaintiffs' members will suffer irreparable harm without a preliminary injunction. A prohibitory injunction would involve some hardship to the defendants, and a mandatory injunction would involve considerably greater hardship, but both sets of hardships would be largely self-imposed. Finally, a prohibitory injunction would be in the public interest, but mandatorily enjoining the defendants on this issue would not. Weighing these factors, a preliminary injunction against the driver's license practice is not appropriate on this record. Nevertheless, it bears repeating that this practice does appear to be in violation of the NVRA. Should the plaintiffs be able to shore up their standing in this case, it is the Court's hope that both sides will cooperate in developing a method by which any voters who have wrongfully had their registrations cancelled can be restored to the rolls, without resorting to a mass reactivation. After the defendants answer the complaint and the parties proceed through discovery, information and evidence from the state of Michigan should be able to bring light to the question of how the practice should be changed. 40 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 41 of 43 Pg ID 572 C. The Ypsilanti City Clerk. A further word is appropriate to address the arguments of the City Clerk for the City of Ypsilanti, Michigan ("the clerk"). In a separate brief in response to this motion, the clerk claimed that because of staff and budget shortages she does not, and will not before the upcoming election, remove voter names from the rolls pursuant to the undeliverable ID practice.17 If this is true, then the likelihood of irreparable harm to plaintiffs' members from the clerk would be reduced to minuscule proportions. The burden of an injunction on the clerk herself, however, would be correspondingly reduced, as would any impact on the public interest. The plaintiffs' strong likelihood of success on the merits would remain unchanged. Since the Court's injunction against the other defendants will preclude them not only from personally marking voters' QVF entries with a disqualifying status, but also from directing or encouraging others to do so, the foregoing makes it unnecessary to enjoin the clerk from doing so as well. If the plaintiffs present the Court with information that her actions fail to correspond with her representations in her brief, however, such an injunction will promptly issue. CONCLUSION WHEREFORE, it is hereby ORDERED that the defendants Michigan Secretary of State and the Michigan Director of Elections: 17 The clerk makes a much more convoluted argument with regard to the out of state driver's license application practice, but since the nature of the Court's relief will not entail the issuance of an injunction on that issue, the Court finds it unnecessary to address the clerk's arguments on the drivers license issue here. 41 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 42 of 43 Pg ID 573 (1) Immediately discontinue their practice of cancelling or rejecting a voter's registration based upon the return of the voter's original voter identification card as undeliverable; (2) Remove the "rejected" marking in the QVF from the registrations of all voters whose original voter IDs have been returned as undeliverable since January 1, 2006 until the present, unless rejection was warranted for some other lawful reason; (3) Make no other designation, including but not limited to "cancelled," in these voters' registration records in the QVF or elsewhere, that will prevent their ballots from being counted if they appear at the polls and give whatever further proof of Michigan residence is required or permitted under applicable state and federal law; unless such a designation is warranted by written notice from the voter or for some reason other than change of residence; (4) Preserve and not destroy until after December 31, 2009, any and all records relating to maintenance of Michigan's voter registration files that have, since January 1, 2006, resulted in the cancellation of the registration of voters who have applied for out of state driver’s licenses, or the cancellation or rejection of voters’ registrations based upon the return of original voter identification cards ; and (5) Give no order, direction, or encouragement that any other government official or any other person engage in activity hereby prohibited to them. 42 2:08-cv-14019-SJM-RSW Doc # 27 Filed 10/13/08 Pg 43 of 43 Pg ID 574 It is further ORDERED that the defendants Michigan Secretary of State, the Michigan Director of Elections, and the Ypsilanti City Clerk file an answer to the complaint in this action no later than fourteen days from the date of this Order. SO ORDERED. s/Stephen J. Murphy, III STEPHEN J. MURPHY, III United States District Judge Dated: October 13, 2008 I hereby certify that a copy of the foregoing document was served upon the parties and/or counsel of record on October 13, 2008, by electronic and/or ordinary mail. s/Alissa Greer Case Manager 43