NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0253n.06
No. 12-3491 FILED
Apr 02, 2014
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
OWNER-OPERATOR INDEPENDENT DRIVERS )
ASSOC., INC., et al., )
) ON APPEAL FROM THE
Plaintiffs-Appellees, ) UNITED STATES DISTRICT
) COURT FOR THE SOUTHERN
v. ) DISTRICT OF OHIO
)
COMERICA BANK, ) OPINIONS
)
Defendant-Appellant. )
)
BEFORE: MOORE and COOK, Circuit Judges; GWIN, District Judge.*
JAMES S. GWIN, District Judge. In this case, Defendant Comerica Bank appeals from
a $5,583,084 judgment the district court gave Plaintiffs after a non-jury trial. With this appeal, we
look to whether sufficient evidence supported the district court’s finding that the statute of
limitations did not bar the lawsuit.
In an opinion earlier in the district court case, the district court found Comerica Bank was
liable for $5,583,084 on a breach of trust theory, but then gave Comerica Bank judgment on other
grounds. The Plaintiffs appealed that decision. Comerica Bank never cross appealed the district
court’s $5,583,084 damage finding in the first appeal and this Court tacitly accepted the $5,583,084
*
The Honorable James S. Gwin, United States District Judge for the Northern District of
Ohio, sitting by designation.
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
damage calculation when we reversed the district court’s judgment for Comerica. Now, we also
consider whether Comerica Bank waived a challenge to the damage computation and whether that
damage computation became the law of the case after the first appeal.
As described, this is the second appeal in a case involving Owner-Operators’ Independent
Drivers Association (“Owner-Operators”) members’ escrow maintenance funds. After an earlier
appeal, we found that Comerica Bank had breached a trust obligation to the Owner-Operators but
remanded the case to the district court to decide if the statute of limitations barred the Plaintiffs’
claims.
After remand following the first appeal and after the parties waived a jury trial, the district
court found this lawsuit was timely and gave Plaintiffs Owner-Operators judgment. Defendant
Comerica Bank now appeals the district court’s judgment awarding $5,583,084 to Plaintiffs Owner-
Operators. Comerica Bank says that the district court erred when it: (1) concluded that the statute
of limitations does not bar the claim against Comerica; (2) awarded damages based on a retroactive
application of the private right of action under the Interstate Commerce Commission Termination
Act (“ICCTA”); (3) refused to allow Comerica to challenge the amount of damages; and (4) made
an excessive award of prejudgment interest. For the reasons that follow, we AFFIRM the district
court’s judgment with respect to the statute-of-limitations, ICCTA-retroactivity, and prejudgment-
interest issues.
Judge Cook and Judge Moore find that this case should be remanded to the district court to
determine damages. I respectfully dissent from the majority’s conclusions regarding the damages
determination and I would find that Comerica waived its right to challenge the damage calculation
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
when Comerica failed to appeal an earlier and specific finding that Comerica Bank had taken
$5,583,084, of Plaintiffs funds.
I. BACKGROUND
A. Factual Background
This Court’s previous opinion outlines the case’s background:
This lawsuit has its origins in a $5.5 million class action settlement agreement
that Arctic and its affiliate, D & A Associates Ltd. (“D & A”), entered into with
Plaintiffs, representatives of a certified class of “owner-operators,” who
independently own, lease, and operate motor carrier equipment for the transportation
of commodities. . . .
The underlying basis for the class action suit was the owner-operators’
contractual arrangement with Arctic and D & A. . . . Under the agreements, . . . the
owner-operator agreed to have Arctic deduct a flat fee of nine cents per mile from his
or her compensation on a weekly basis for the purpose of repairing and maintaining
the leased trucking equipment. . . . The maintenance payments were kept by Arctic
in a maintenance escrow fund. . . .
In June 1997, the owner-operators initiated a class action suit (the “Arctic
Litigation”) against Arctic and D & A in the United States District Court for the
Southern District of Ohio, seeking monetary damages and other relief. The certified
class of plaintiffs . . . alleged that Arctic and D & A violated the Truth in Leasing
regulations of the Motor Carrier Act, 49 U.S.C. §§ 14101 02, 14704; 49 C.F.R.
§ 376 et seq., by failing to return unused maintenance escrow fund balances to the
class of owner-operators whose lease agreements with Arctic did not run full term.
...
In October 2003, Arctic and D & A filed a voluntary petition for bankruptcy
in the United States Bankruptcy Court for the Southern District of Ohio, thus halting
the Arctic Litigation. Plaintiffs allege that in December 2003, through testimony
given in the bankruptcy proceedings, they first learned of Arctic’s financing
arrangement with Comerica and Comerica’s actions in transferring the maintenance
escrow funds out of Arctic’s depository accounts to repay amounts owed to it
pursuant to its loan agreements with Arctic. . . .
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In January 2004, plaintiffs commenced an adversary proceeding against
Arctic, D & A, and Comerica in the bankruptcy court, seeking return of the escrow
funds owed to the Arctic Litigation class members. The bankruptcy court lifted the
automatic stay to allow the district court to complete the Arctic Litigation and
liquidate the class claims, and, in May 2004, plaintiffs entered into a $5.5 million
settlement agreement with Arctic and D & A, which was approved by the district
court in July 2004. The settlement equaled the total amount of maintenance escrow
funds, plus interest, owed by Arctic and D & A to the owner-operators . . . .”
In re Arctic Express Inc., 636 F.3d 781, 786-89 (6th Cir. 2011) (footnotes omitted).
B. The Instant Action
In January 2004, and while Arctic’s bankruptcy case was pending, the Owner-Operators filed
an adversary proceeding against Arctic, D & A, and Comerica in the bankruptcy court. The Owner-
Operators sought the return of Plaintiffs’ escrow funds from Arctic, D & A, and Comerica Bank.
While this lawsuit was pending, the plaintiffs agreed to a $5.5 million settlement with Arctic and
D & A in May 2004.
Comerica Bank never challenged the settlement amount although the bankruptcy court
adversary complaint against Comerica Bank, Arctic, and D & A had asked the district court to
“[e]nter judgment against Comerica Incorporated ordering that payment be made. . . to return the full
amount in maintenance escrow funds plus interest in an amount equal to that awarded pursuant to
final judgment entered by the District Court [in the Arctic and D & A case].”
The district court approved the settlement in July 2004. In approving the settlement, the
district court found that the settlement amount reflected the total amount of maintenance escrow
funds, plus interest, that Arctic and D & A owed to the Owner-Operators. The settlement agreement
also said the Owner-Operators would not seek to recover more than $900,000 from Arctic. As the
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
district court described in the first decision, “Plaintiffs accepted this lower amount [from Arctic]
with the express purpose of seeking the remainder of the settlement amount from Comerica.”
After settling with the other two defendants, the Owner-Operators continued the lawsuit
against Comerica and sought to enforce the judgment against Comerica Bank. In this litigation,
Plaintiffs bring a single claim seeking restitution or disgorgement of the maintenance escrow funds
deposited by Arctic into Comerica’s accounts and purportedly used by Comerica to pay down
Arctic’s indebtedness.
1. 2009 District Court Summary Judgment Ruling
In the earlier litigation before the district court, Comerica first argued that the statute of
limitations stopped the Plaintiff Owner-Operators’ claims against Comerica. Next, Comerica argued
that imposition of a trust obligation would retroactively apply a newly created private right of action
for violation of Truth-in-Leasing provisions. Finally, Comerica said the settlement agreement did
not stop Comerica from challenging “the validity and amount of the consent judgment.”
a. Statute of limitations
In the summary judgment decision, the district court first considered Comerica Bank’s
argument that the Owner-Operators’ claims were time-barred. After considering the parties’
respective arguments and evidence, the district court found that a genuine issue of material fact
existed as to whether Plaintiffs exercised reasonable diligence to discover facts that would cause the
statute of limitations to accrue for its claim against Comerica.
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
b. ICCTA retroactivity
With regard to ICCTA, the district court found that “whether the ICCTA can be applied
retroactively to pre 1996 leases is not even an issue in this case.” The district court specifically
found the Plaintiffs were not suing Comerica under the ICCTA, Instead, the Owner-Operators were
bringing an action for restitution under the federal common law of trusts.
c. Damages
During the first round before the district court, the district court considered Comerica’s
arguments that Comerica Bank should not be bound by damages calculation agreed to in the
settlement and approved by the district court. With that argument, Comerica Bank said “that
Plaintiffs cannot rely on the doctrine of issue preclusion to establish the amount of Plaintiffs’ alleged
damages.”
The district court rejected Comerica’s argument, finding “[r]egardless of Comerica’s lack
of participation in the damages calculation in the Arctic Litigation, Plaintiffs can seek restitution of
the judgment amount from Comerica.” In reaching this conclusion, the district court reasoned “ if
this Court determines that Comerica withdrew funds from that account in breach of trust, then
Comerica would be liable for the entire amount of trust property (provided Comerica is not a bona
fide purchaser).”
The district court followed this reasoning: (1) Arctic held the escrow amounts in trust, the
money was the drivers’ property; (2) if Arctic or Comerica wrongfully used the drivers’ money that
Arctic held in trust for the drivers, the drivers had a right to the return of their money; and (3) if “this
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Court determines that Comerica withdrew funds from that account in breach of trust, then Comerica
would be liable for the entire amount of trust property.”
During its ruling on summary judgment, the district court found that the Arctic Litigation
“resolved issues regarding the rights and obligations relating to the maintenance escrows as between
Arctic and the Class.” The district court explained that in approving the settlement in the Arctic
Litigation, it had determined that the methodology used to calculate the judgment amount was
appropriate based on Arctic and D & A’s records.
It found that the total potential damages for Comerica’s alleged conduct with regard to trust
property was $5,583,084, representing maintenance escrows plus interest.
d. Breach of trust
In its first decision, the district court looked to when the trust was created: “[w]as the
statutory trust created when customers made payments into the cash collateral account, or was the
statutory trust created when Arctic paid owner-operators their compensation?” The district court
found that no trust was created until compensation was paid to the employees. Because, Comerica
took loan repayment withdrawals from the cash collateral accounts before the drivers were paid, the
district court reasoned that Comerica Bank had no trust assets: “This Court finds that the deposits
by customers into the cash collateral account did not create an escrow fund, because until
compensation was paid to owner-operators, nothing had been withheld from (or deposited by) them.”
Therefore, the court granted Comerica’s summary judgment motion and denied the Owner-
Operators’ motion.
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2. First Appeal
The Owner-Operators appealed to this Court. Though Comerica Bank briefed its opposition
to the Owner-Operators’ arguments, it did not file a cross appeal from the district court’s damage
calculation and did not file a cross appeal from the district court’s finding that Comerica would need
relinquish any amounts held in trust.
Comerica did challenge several district court rulings. Comerica challenged the district court’s
finding that it was not a bona fide purchaser for value.1 It also argued the statute of limitations
stopped the plaintiffs’ claims. Comerica also challenged the district court’s finding that plaintiffs
could bring an action for escrow funds before 1996 legislation creating a private right of action.
More important, the first Sixth Circuit panel ruled on each of these issues.
In spite of its lack of cross appeal, Comerica’s brief recognized that Plaintiffs were suing
Comerica Bank for the difference between the $5.5 million settlement and the $900,000 cap on
Arctic and D & A recovery. Its brief did not, however, contest the amount of damages.
This Court affirmed in part and reversed in part the district court’s summary judgment
opinion. This Court found material issues of fact meant that Comerica should not receive summary
judgment on its statute of limitations defense “we agree with the district court that genuine issues
of material fact exist which preclude a ruling, as a matter of law, on Comerica’s statute of limitations
defense” and remanded “for further proceedings consistent with this opinion.”
1
In re Arctic Exp. Inc., 636 F.3d at 801.
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
We reversed the district court’s holding that Comerica only acted as a trustee after general
mileage compensation was paid to drivers. Specifically, in reversing the district court’s opinion, this
Court found: “Arctic breached its trust obligations to plaintiffs by encumbering the escrow funds,
and dissipating the trust assets, through its lending relationship with Comerica. Comerica must
therefore disgorge the trust property received in breach of trust unless it can establish a viable
defense.”
We identified only one “viable defense” and affirmed the district court’s finding that the trier-
of-fact would need to resolve Comerica’s statute of limitations defense.
3. 2011 Judgment
After a bench trial, the district court issued a judgment for the Plaintiffs, awarding damages
in the amount of $5,583,084.
a. Comerica’s statute of limitations defense
Acting as the fact-finder, the district court found Comerica did not prove its statute of
limitations defense. Applying the federal discovery rule, the district court found that Plaintiffs
“would not have been reasonably aware of the breach of trust claim against Comerica until they
knew, or had reason to know, that the escrow funds had been transferred into Comerica’s control in
breach of statutory trust.” The court found the relevant question to be “whether Plaintiffs, through
the exercise of reasonable diligence, should have discovered the nature of Arctic’s lending
relationship with Comerica before January of 2000.”
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
The district court used the same accrual standard we used in the earlier appeal: “Under
federal law, . . . the limitations clock starts ticking when the claimant discovers, or in the exercise
of reasonable diligence should have discovered, the acts constituting the alleged violation.”
The district court examined whether there was “‘some reason to awaken inquiry’ on the part
of Plaintiffs and their counsel to ‘direct diligence in the channel in which it would be successful’ in
locating the maintenance escrow funds.” Acting as the fact-finder, the district court concluded there
was not.
First, the district court observed that no publicly available information uncovered the details
of Comerica’s loan arrangement with Arctic. Supporting this finding, the Comerica Arctic account
manager, Mark Conen, did not believe the maintenance escrow funds to be part of the collateral
pledged to Comerica.
Second, the district court found a 1998 production of Arctic documents that included 33
settlement checks made to drivers and drawn on Comerica’s accounts was insufficient to “awaken
Plaintiffs” that Comerica was using escrow funds to satisfy Arctic loans. Rather, the court concluded
that “[t]hese checks would have awakened Plaintiffs only to the fact that Arctic was banking with
Comerica, a fact of . . . neutral significance.”
Finally, the district court reasoned that orders limiting discovery and staying the Arctic
Litigation, and Arctic’s offer to stipulate that D & A retained the maintenance escrow funds for each
putative class member in the Arctic Litigation further stymied Plaintiffs from discovering
Comerica’s lending relationship. The district court held that while a stay of discovery generally does
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
not toll the statute of limitations, “Plaintiffs could not have discovered the injurious transfer of the
maintenance funds even through reasonable diligence.” The district court found that Comerica’s
statute of limitations defense failed.
b. Damages
i. Amount of damages
With regard to the amount of damages, before trial, the district court asked the parties for
their positions regarding “whether damages should be an issue at trial or if the summary judgment
proceeding [that had gone through to the Sixth Circuit case] disposed of this matter.” In response,
“[t]he Plaintiffs contend[ed] that this Court’s summary judgment order and the Sixth Circuit’s
opinion established the amount of the award to which the Plaintiffs are entitled. The Defendant
contends that damages must be proven at trial.”
The district court then addressed this in an August 19, 2011, opinion. In that opinion, the
district court reasoned that it had already established the damages to be $5,583,084 and had found
that “if this Court determines that Comerica withdrew funds from that account in breach of trust,
then Comerica would be liable for the entire amount of trust property.” Although the district court
had originally found no breach of trust, this Court reversed that finding. The district court rejected
Comerica’s argument that the measure of damages was not already decided:
To reiterate, this Court held that there were two prerequisites for holding the
Defendant liable for the full $5,583,084: “If this Court determines that the
maintenance escrows were included in an Arctic account with Comerica, and if this
Court determines that Comerica withdrew funds from that account in breach of trust,
then Comerica would be liable for the entire amount of trust property (provided
Comerica is not a bona fide purchaser).” Owner Operator, 615 F. Supp. 2d at 705.
The Sixth Circuit subsequently held that both of these conditions existed as a matter
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
of law. In re Arctic Express, Inc., 636 F.3d at 801. The question of the amount of
damages that the Defendant owes to the Plaintiffs has therefore already been
determined, and the only question remaining for trial is the Defendant’s statute of
limitations defense.
Repeating, the district court found this Court had ruled: “Consequently, Arctic breached its
trust obligations to plaintiffs by encumbering the escrow funds, and dissipating the trust assets,
through its lending relationship with Comerica. Comerica must therefore disgorge the trust property
received in breach of trust unless it can establish a viable defense.” And after this Court of Appeals
rejected Comerica’s bona fide purchaser defense, the district court found the only defense left for
trial was Comerica’s statute of limitations defense.
ii. Prejudgment interest
After the entry of judgment, the district court granted Plaintiffs’ motion to alter the judgment
to add an award of prejudgment interest. The court awarded prejudgment interest for the time period
between July 16, 2004 and March 20, 2012 (the date of the final Comerica judgment). The court
noted that the base damages amount included interest up to July 16, 2004.
The court found it appropriate to use the Prime rate,2 reasoning that prejudgment interest is
intended to compensate a party “for the lost interest value of money wrongly withheld from him or
her.”
2
The district court observed that the Prime rate is the “prevailing market rate for lending to
the lowest risk customers.”
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
4. The instant appeal
Defendant Comerica appeals the district court’s judgment against it and the court’s award
of $5,583,084 in damages and prejudgment interest. Plaintiffs respond that the district court’s
judgment was correct.
II. ANALYSIS
A. Statute of Limitations
Defendant Comerica Bank says that the district court erred when it ruled that the statute of
limitations did not bar Plaintiffs Owner-Operators’ claims. Comerica Bank says that the district
court erred in the following ways: (1) in determining that acts constituted the violation underlying
Plaintiffs’ claims against Comerica were different than those underlying Plaintiffs’ claims against
Arctic; and (2) in concluding that the Owner-Operators exercised reasonable diligence in discovering
the breach of trust.
The parties waived a jury trial. After a bench trial, we review the district court’s factual
findings for clear error.3 The district court’s factual findings can only be set aside if clearly
erroneous. A “factual determination will be deemed clearly erroneous only where it is against the
clear weight of the evidence of when, upon review of the evidence, the appellate court ‘is left with
the definite and firm conviction that a mistake has been committed.’”4 This standard plainly does
3
Lincoln Elec. Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672, 683 (6th Cir. 2000).
4
Bobbie Brooks, Inc. v. Intn’l Ladies’ Garment Workers Union, 835 F.2d 1164, 1168 (6th
Cir. 1987) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
not entitle a reviewing court to reverse the finding of the trier of fact even if the reviewing court is
convinced that it would have decided the case differently.5
The district court correctly used the discovery rule. Under that rule, Plaintiff’s claims accrue
“if Plaintiffs knew, or ‘in the exercise of reasonable diligence should have discovered, the acts
constituting the alleged violation.”6 The district court then found that knowledge of Arctic trust
violations did not start the statute of limitations for claims against Comerica.7
In examining whether the district court committed clear error when it found Comerica failed
to establish its statute of limitation defense, we first look to when Comerica’s breach of trust
occurred. Then, we look to when the Plaintiff should have discovered the breach of trust.
The district court correctly found that the claim against Comerica occurred when Comerica
used the escrow funds and dissipated the trust assets through its lending relationship with Comerica.8
It then concluded that “Plaintiffs would not have been reasonably aware of the breach of trust claim
against Comerica until they knew, or had reason to know, that the escrow funds had been transferred
into Comerica’s control in breach of the statutory trust.”9
5
Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573 (1985); Kerman v. Comm’r of
Internal Revenue, 713 F.3d 849, 867 (6th Cir. 2013).
6
R. 155 (Judgment at 41) (citations omitted).
7
Id.
8
Id. (Judgment at 42). W e had earlier found that Comerica “cannot avail itself of the bona fide
purchaser defense because it is not a bona fide purchaser for value.” In re Arctic Express Inc., 636 F.3d
at 801.
9
R. 155 (Judgment at 42).
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
The district court then proceeded to decide “whether Plaintiffs, through the exercise of
reasonable diligence, should have discovered the nature of Arctic’s lending relationship with
Comerica before January of 2000.”10 Finding against Comerica, the district court then found
insufficient evidence to have alerted the Plaintiffs that Comerica was improperly using the
maintenance escrow funds for loan payments.11
The district court did not err in reaching its conclusion. Until Plaintiffs knew or should have
known that Comerica was using escrow funds to pay Arctic loans, they had no reason to know that
Comerica was improperly using their escrow trust monies.
Stated otherwise, the district court examined whether the Owner-Operators ignored some
notice that Comerica used trust funds to satisfy Arctic indebtedness.12
Acting as the fact-finder after the parties waived a jury trial, the district court correctly found
that Comerica needed to show that Plaintiffs did not exercise due diligence. To make that showing,
Comerica needed to show that Plaintiffs should have discovered the acts constituting the alleged
violation of the statutory trust over their maintenance escrow funds before January 2000.13 Events
after January 2000 are irrelevant.
10
Id.
11
Id.
12
See Ginsburg v. Haddad, 78 F.3d 584, at *3 (6th Cir. Mar. 6, 1996) (unpublished table
opinion) (“Notice is a question of fact, findings on which are subject to review under a ‘clearly
erroneous standards.’”) (citing Charash v. Oberlin College, 14 F.3d 291, 300 (6th Cir. 1994)).
13
R. 155 (Judgment at 42). This is because a four year statute of limitations for Plaintiffs
claim for restitution of their trust funds exists under Ohio Rev. Code § 2305.09. Plaintiffs brought
their claim against Comerica Bank in January 2004. See R. 58 3 (Adversary Complaint Against
Comerica).
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Comerica says that the following evidence “alerting Owner-Operators to issues concerning
the funds” indicates such a failure:14 (1) the Owner-Operators and The Cullen Firm “fail[ing] to
make any efforts to obtain information from Arctic’s maintenance fund supervisor;” (2) “[t]he
August 1998 review of documents, in which the Owner-Operators located thirty-three settlement
packets showing settlement checks drawn on a Comerica account with corresponding settlement
sheets;” and (3) “[t]he July 1996 lawsuit between the two co-founders of Arctic, in which Mr. Durst
and his wife were alleged to have misappropriated all of Arctic’s corporate property.” As described
below, it was not clearly erroneous for the district court to conclude that none of these events gave
sufficient notice.
1. Lack of effort by Owner-Operators and The Cullen Firm
Comerica seems to say that the district court erred when it did not find a lack of diligence in
the Owner-Operators’ and The Cullen Firm’s failure to conduct a basic lien search.
Recall that the district court found that the details of the credit lending relationship between
Arctic and Comerica and the use of the Owner-Operators’ maintenance escrow funds to satisfy
Arctic’s debt was not public information at the relevant time.15
14
Since the relevant time period ends January 2000, there is no need to consider post January
2000 events that Comerica says should have alerted the Owner Operators “to issues concerning the
funds.” See Appellant Br. at 44.
Comerica says that “[e]vents post dating the January 2000 statute of limitations cutoff date
demonstrate that the Owner Operators stuck with their decision not to engage in any diligence.” Id.
This argument is not persuasive. The fact that the Owner Operators did not bring their lawsuit
earlier does not necessarily imply a lack of earlier diligence; that they had reason to know of the wrong
done by Comerica within the time allowed for by the statute of limitations and brought a timely lawsuit
toward the end of the statute of limitations period cannot be held against them under these
circumstances.
15
R. 155 (Judgment at 47 48).
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Recall that Comerica’s argument that a lien search would disclose that Comerica was using
escrow funds to pay Arctic’s loan is undercut by testimony from Comerica’s own manager of the
Arctic account, Mr. Conen, who did not know whether the maintenance escrow funds were part of
the collateral pledged to Comerica.16
The district court found that “[s]imply learning that Comerica had a lien on Arctic’s accounts
receivables would not be enough to put Plaintiffs on reasonable notice that Comerica actually held
the maintenance escrow accounts . . . .”17
The district court did not err in reaching this conclusion. The publicly available information
that Comerica had a lien on Arctic’s accounts receivable was not enough to alert a reasonable
plaintiff that Comerica was using the escrow funds for non-trust purposes. The district court’s
finding was not “against the clear weight of the evidence.”18
2. August 1998 document review
Comerica says that the district court erred when the district court found that the Owner-
Operators were not given reasonable notice of the breach of trust after they were given copies of
thirty-three checks and settlement sheets from Comerica’s accounts.19 Those checks were drawn on
Arctic accounts at Comerica Bank.
16
Id.
17
Id.
18
Bobbie Brooks, Inc., 835 F.2d at 1168.
19
Appellant Br. at 46 47.
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
In weighing the evidence, the district court found that this evidence was of “neutral
significance,” suggesting only that Arctic banked with Comerica.20 Recall that the court concluded
it would not have awakened Plaintiffs to direct inquiry toward Comerica.
The district court did not make a clear error when it reached this conclusion; it was
reasonable for the court to conclude that the checks and settlement sheets were insufficient to have
put the Owner-Operators on notice of the need to investigate Comerica or the treatment of their
escrow funds.
3. July 1996 lawsuit
Comerica seems to say that a July 1996 lawsuit over the ownership of Arctic’s funds should
have signaled to the Owner-Operators a need to investigate the location of the maintenance escrow
funds. This argument loses.
The July 1996 lawsuit dealt with the ownership of Arctic. It had no specific relationship to
the maintenance escrow funds.21
Moreover, the district court found that when Plaintiffs Owner-Operators served discovery
on Arctic that sought the names of financial institutions holding the funds, the litigation process
stymied them. In May 1998, Arctic offered to stipulate that D & A retained the maintenance escrow
funds. The district court reasonably found Arctic’s representation would have tended to “lead
Plaintiffs away from the fact that the escrow funds were in the control of Comerica Bank.”22
20
R. 155 (Judgment at 49 50).
21
See R. 177 7 (Complaint from 1996 Lawsuit).
22
R. 155 (Judgment at 52 53).
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No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
The district court did not err in drawing such a conclusion. It follows that the 1996 lawsuit
and the Owner-Operators’ subsequent investigation of Arctic did not give the Owner-Operators
reason to know of Comerica’s wrongful transfer of the Owner-Operators escrow funds.
In addition, the district court found that the Owner-Operators acted diligently with their
February 1998 discovery requests to Arctic and acted diligently to name Comerica as an additional
defendant after learning of Comerica’s lending relationship with Arctic.23 The court specifically
acknowledged that, “in general, a stay of discovery does not toll the statute of limitations,” but found
that “Plaintiffs could not have discovered the injurious transfer of the maintenance funds even
through reasonable diligence.”24
This conclusion was not a clear error by the district court. Only limited publicly available
information existed regarding Arctic’s loans with Comerica. Discovery in the Arctic Litigation was
mostly not available. Against this backdrop, the district court could reasonably find that Plaintiffs
did not know, or should not have reasonably known, of Arctic’s lending relationship with Comerica.
Therefore, the district court’s finding that the statute of limitations did not bar Plaintiffs’
claim against Comerica was supported.
B. Private Right of Action Under ICCTA
Defendant Comerica Bank says that the district court erred by improperly allowing the
Owner-Operators to retroactively apply the ICCTA.25
23
Id. (Judgment at 54).
24
Id.
25
Appellant Br. at 44.
19
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
This argument fails.26 Comerica Bank’s obligations to the Owner-Operators for restitution
under the federal common law of trusts exist independent of the ICCTA. Therefore, as the district
court correctly found, “whether the ICCTA can be applied retroactively to pre-1996 leases is not
even an issue in this case.”27
C. Damages
I dissent from the majority’s conclusion that Comerica Bank did not waive its right to
challenge the district court’s damages determination. Defendant Comerica Bank says that the district
court improperly used the Owner-Operators’ Arctic and D&A settlement agreement to establish
damages against Comerica Bank without proof.28 Comerica Bank made similar arguments to the
district court.
In a non-jury action, a trial court’s determination of damages is reviewable only for abuse of
discretion, subject to being set aside as a finding of fact under the “clearly erroneous” standard of
Rule 52(a) of the Federal Rules of Civil Procedure.29
In response to Comerica Bank’s argument, Plaintiffs Owner-Operators say that these
arguments should not be considered by this Court. They say this Court’s earlier mandate was
26
Early, the district court found no support for the argument that the ICCTA was being
improperly applied retroactively. See Owner Operator Indep. Drivers Assoc., 270 F. Supp. 2d 990,
994 95 (S.D. Ohio 2003). “The Court finds that the ICCTA has no retroactive effect as it neither takes
away nor impairs vested rights, nor creates a new obligation or duty, nor attaches a new disability with
respect to actions taken prior to its promulgation.” Id.
As later discussed, Comerica waived this argument by failing to take a cross appeal from this
ruling in the earlier appeal to this Court.
27
Id.
28
Appellant Br. at 56, 61.
29
Smith v. Manausa, 535 F.2d 353, 354 (6th Cir. 1976) (per curiam).
20
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
limited, not general.30 In the first appeal and although Comerica had appealed from several district
court rulings, Comerica never cross appealed from the district court’s finding that the earlier damage
calculation controlled. And, the Plaintiffs say this Court limited its remand to the statute of
limitations issue.31 Plaintiffs say Comerica Bank waived its right to challenge the amount of
damages.32
This Court’s mandate rule governs this issue.33
1. Type of Remand
In my opinion, this Court’s earlier order was a limited remand for the purpose of considering
Comerica’s statute of limitations defense.
In the first appeal, this Court held that “we agree with the district court that genuine issues
of material fact exist which preclude a ruling, as a matter of law, on Comerica’s statute of limitations
defense” and remanded “for further proceedings consistent with this opinion.”34 This Court
identified no other issue that needed consideration on remand.
30
Appellee Br. at 21 23.
31
Id. at 23 25.
32
Id.
33
See United States v. O’Dell, 320 F.3d 674, 679 (6th Cir. 2003) (noting that the mandate
rule has two components: (1) the “limited remand rule” and (2) the “waiver rule”).
34
In re Arctic Express Inc., 636 F.3d at 802 03.
21
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
“A district court is bound to the scope of the remand issued by the court of appeals.”35 And,
a district court may not reconsider its own rulings made before appeal and not raised on appeal.36
Since the damages issue was not remanded for the district court’s consideration, this Court
should not now consider arguments regarding the damages amount.
2. Waiver
Moreover, I believe Defendant Comerica Bank waived its right to challenge these damages
when it did not file a cross appeal.
In its 2009 summary judgment opinion, the district court decided against Comerica on
Comerica’s argument that it was not bound by the damages established in the Arctic Litigation. At
the district court, Comerica Bank prevailed and received summary judgment on other grounds,
grounds that this Court later reversed.
The Owners-Operators brought the first appeal, seeking reversal of the district court’s
decision. Comerica Bank never cross appealed the district court’s finding that it was bound by the
damage amount established in the Arctic Litigation.
The majority says: “Clear Sixth Circuit precedent dictates that the complete relief Comerica
obtained on summary judgment foreclosed the possibility of a cross-appeal because this court would
have lacked jurisdiction to consider it.” As the earlier panel of this Court shows, and as Comerica
demonstrates, this is wrong.
35
United States v. Campbell, 168 F.3d 263, 265 (6th Cir. 1999).
36
18B Charles Alan W right & Arthur R. Miller, F ED ERAL P RACTICE AN D
P ROCEDURE § 4478.3 (2d ed. 2013) (“Law of the Case M andate Rule”).
22
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Recall, Comerica originally won summary judgment. According to the majority, having won
summary judgment, “Comerica "thus lack[ed] standing to petition this court for review.”
But, even though Comerica had won summary judgment, Comerica did challenge several
district court rulings in the first appeal. Comerica challenged the district court’s finding that it was
not a bona fide purchaser for value.37
Comerica also challenged the district court’s finding that plaintiffs could bring an action for
escrow funds before the 1996 private right of action was created. The district court had certified a
class period beginning July 1, 1993. Comerica said any private right of action could not include
claims before January 1, 1996. Comerica then argued to the first panel: “the private right of action
created by the ICCTA did not apply to pre-1996 contracts. Should this Court reverse for further
proceedings, this issue would need to be addressed.”38 While the majority says this Court had no
jurisdiction and Comerica had no standing, Comerica raised the damage issue regarding the
appropriate class period. And the first Sixth Circuit panel ruled on each of these issues.
More important, Comerica Bank stands akin to a transferee of a fraudulent conveyance who
fails to show they are bona fide providers of value. To use the Arctic settlement, the plaintiffs need
make only a minimal showing: “Rather, if a plaintiff holds a judgment on liability against a
judgment-proof pro se defendant and hopes to use the judgment as a predicate for a fraudulent
conveyance claim, she need only carry out a judicially supervised inquest to protect her judgment.”39
37
In re Arctic Exp. Inc., 636 F.3d at 801.
38
(citations omitted).
39
Grace v. Bank Leumi Trust Co. of N.Y., 443 F.3d 180, 188 (2d Cir. 2006).
23
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
The plaintiffs need only make a minimal showing because the trust funds are theirs.
Under the law of the case doctrine and the rules controlling remand, district courts cannot
change its own rulings made before appeal and not raised on appeal.40 This is sometimes referred
to as law of the case and sometimes referred to as waiver.
The failure to raise an appealable issue in a first appeal stops review in a second appeal.41
That is, a party who could have sought review of an issue or a ruling during a prior appeal waives
its challenge to the ruling in if there is a later appeal.42
Although Comerica Bank could argue alternative grounds to support the first district court’s
ruling, it needed to file a cross appeal if it seeks to “enlarge[ its] own rights . . . or to lessen the rights
of [the Owner-Operators].”43 With its argument that Plaintiff’s damages should be cut, Comerica
40
18B W right & Miller § 4478.3 (“Law of the Case Mandate Rule”); see also 18B W right
& Miller § 4478.6 (“Law of the Case Related Doctrines”) (“It is common to rule that a question that
could have been but was not raised on one appeal cannot be resurrected on a later appeal to the same
court in the same case.”).
41
JGR, Inc. v. Thomasville Furniture Indus., Inc., 505 F. App’x 430, 436 (6th Cir. 2012)
(“Given the district court’s previous finding that Stores # 3 and # 4 were not ‘sufficiently within the
contemplation of the parties at the time of the contract’s formation,’ and JGR’s failure to appeal this
ruling, we find that the district court did not abuse its discretion in accepting this finding that the
evidence on the value of the third and fourth stores could not be submitted to the jury.”); Med. Ctr.
Pharm. v. Holder, 634 F.3d 830, 834 (5th Cir. 2011) (“[A]n issue that could have been but was not
raised on appeal is forfeited and may not be revisited by the district court on remand.”).
42
United States v. Gibbs, 626 F.3d 344, 351 (6th Cir. 2010) (“Generally, the law of the case
doctrine bars challenges to a decision made at a previous stage of the litigation which could have been
challenged in a prior appeal, but were not.” (internal quotation marks omitted) (quoting United States
v. Adesida, 129 F.3d 846, 850 (6th Cir. 1997))); Dixon v. Roscommon Cnty., 896 F. Supp. 2d 670, 679
(E.D. Mich. 2012).
43
Olympic Fastening Sys., Inc. v. Textron Inc., 504 F.2d 609, 617 (6th Cir. 1974) (“The
appellee may, without having to file a cross appeal, defend a judgment on any ground consistent with
the record, even if rejected in the lower court. But he cannot attack the judgment, either to enlarge his
own rights thereunder or to lessen the rights of his adversary, unless he files a cross appeal. A cross
appeal is necessary even if the appellee merely seeks to correct an error or to supplement the decree
with respect to a matter not dealt with below.”).
24
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
seeks to lessen the rights the damage determination that the Owner-Operators received in the
district court’s first decision.
In making its challenge to the district court’s damage ruling, Comerica Bank asks this Court
to modify to reduce the damage finding the district court made before the first appeal. If allowed,
this would modify the judgment to its favor and to the Owner-Operators’ detriment.
Specifically, Comerica argues that the Owner-Operators do not have a right to collect the
entire $5,583,084. In its 2009 opinion, the district court found these damages but found that
Comerica did not breach the trust in removing the money from cash collateral account. We
disagreed and found the cash collateral account the account that Comerica withdrew funds from
was also subject to the trust. If Comerica disagreed with the district court’s finding that the breach
of trust involved more than $5.5 million, it needed to cross appeal.44 Comerica Bank needed to file
a cross appeal to save the damages issue.45
After ordering pretrial briefing on whether damages should be a trial issue, the district court
properly found that “the Sixth Circuit’s holding conclusively established the issue of recoverable
damages against Comerica at $5,583,084 . . . .”46
44
See Gulliford v. Pierce Cnty., 136 F.3d 1345, 1350 (9th Cir. 1998) (finding defendant
waived its ability to appeal district court’s determination that it was not entitled to qualified immunity
where defendant did not cross appeal on this issue).
45
United States v. Bajakajian, 84 F.3d 334, 338 (9th Cir. 1996), aff’d, 524 U.S. 321 (1998)
(finding failure of defendant to file cross appeal requiring forfeiture of funds, even if forfeiture would
be unconstitutional, deprived court of jurisdiction to set aside District Court forfeiture order).
46
R. 152 (Order denying Defendant’s offer of proof and request that Plaintiffs be required to
prove damages at 3 4).
25
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
As the district court recognized, Comerica failed to raise the damages issue in its initial
appeal and should not be allowed to do so now. I disagree with the majority’s findings that this
Court should consider Comerica’s arguments regarding damages now and that the district court
should consider proof as to damages owed by Comerica.
With the first appeal, this Court had jurisdiction to consider a Comerica Bank cross appeal
challenging the district court’s finding that it would have been liable for $5,583,084 but had escaped
liability only because the district court(wrongly) found no trust was created “until compensation was
paid.”47 Even though Comerica received judgment, this Court had jurisdiction to consider a cross
appeal.48
We are left with a prudential decision where a district court has made a central decision
against a party but then gave that party judgment on other grounds, should that party be required to
cross appeal?
While the majority is certainly correct that there are costs associated with requiring Comerica
to cross appeal on the damages issue, there are also costs associated with allowing appeal after
appeal. Especially in a case like this that has been going on for nearly ten years.
Whether a party who has won on other grounds needs to take a cross appeal from an adverse
finding should turn on whether the earlier ruling gave fair notice that an issue was being conclusively
47
Owner Operator Indep. Drivers Ass'n, Inc. v. Comerica Bank, 615 F. Supp. 2d 692, 706
(S.D. Ohio 2009).
48
United States v. Windsor, 133 S. Ct. 2675, 2687(2013) (“As a matter of practice and
prudence, we have generally declined to consider cases at the request of a prevailing party, even when
the Constitution allowed us to do so. But this rule does not have its source in the jurisdictional
limitations of Art. III. In an appropriate case, appeal may be permitted ... at the behest of the party who
has prevailed on the merits, so long as that party retains a stake in the appeal satisfying the
requirements of Art. III.”) (quoting Deposit Guaranty Na’l. Bank v. Roper, 445 U.S. 326, 333 (1980)).
26
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
decided. Simply, the language of the district court’s 2009 opinion made it clear that “[i]f this Court
determines that the maintenance escrows were included in an Arctic account with Comerica, and if
this Court determines that Comerica withdrew funds from that account in breach of trust, then
Comerica would be liable for the entire amount of trust property . . .” and that opinion clearly said
the “trust property” was $5,583,084.
Comerica knew that if the district court’s findings regarding a breach of trust were reversed
it would be liable for the trust property. And, Comerica knew the district court found the trust
property was $5,583,084. If it took issue with the district court’s finding that in the event of a breach
of trust Comerica would be liable for $5,583,084, Comerica should have cross appealed. But it
didn’t.
Also, little suggests the damage amount will change. The $5,583,084 judgment came from
Arctic and Comerica records and the calculation was simple. Arctic made maintenance deductions
from each driver paycheck (and kept records on the amount of each maintenance deduction.) Arctic
identified the amount of each driver’s maintenance contributions on the driver’s weekly pay
documents. And Arctic records show what maintenance payments were made for truck repairs.
The calculation becomes easy total the drivers maintenance contributions and deduct the
maintenance payments made for repairs.49 Although some uncertainty exists attributing repair
payment to particular drivers, there seems no real issue how much Arctic withheld from the drivers
and no issue how much Arctic paid for repairs.
49
In the Arctic Litigation, the drivers and Arctic made this specific calculation. Owner
Operators v. Arctic Express, Inc., 97 cv 00750, Doc. 203 1 (S.D. Ohio, May 21, 2004).
27
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
The calculation was not difficult. Arctic held the drivers’ maintenance funds in escrow and
in trust. Comerica used the drivers funds to pay Arctic’s debts. The drivers’ damages are the
amounts Arctic withheld less the amount that Arctic paid for repairs and maintenance.
Some errors in the calculation may exist. Little suggests that any errors are significant.
I believe it is too late for Comerica to contest this finding now.
D. Prejudgment Interest
Defendant Comerica Bank says that the district court awarded “an excessive amount of
prejudgment interest” when it used the Prime rate.50
The standard for reviewing an award of prejudgment interest is an abuse of discretion.51
The district court did not abuse its discretion in its calculation and award of prejudgment
interest.
As the district court found, prejudgment interest should compensate a party “for the lost
interest value of money wrongly withheld from him or her.”52 And, “[a]llowing a defendant to retain
the interest it earned on funds wrongfully withheld from a beneficiary would be to approve of an
unjust enrichment.”53 Where, as here, Plaintiffs have been working to disgorge their property for
numerous years, prejudgment interest is appropriate.
50
Appellant Br. at 66, 69.
51
Rybarczk v. TWR, Inc., 235 F.3d 975, 985 (6th Cir. 2000) (“[W ]e have ‘long recognized
that the district court may [award prejudgment interest] at its discretion in accordance with general
equitable principles.’”) (quoting Ford v. Uniroyal, 154 F.3d 613, 616 (6th Cir. 1998)) (alteration in
original quotation)).
52
R. 171 (Amended Judgment at 4) (citing Price v. Bd. of Trustees of Ind. Laborer’s Pension
Fund, 2:07 cv 0933, 2009 W L 2047591, at *2 (S.D. Ohio July 2, 2009)).
53
Id.
28
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Moreover, the district court’s use of the Prime rate for calculating the prejudgment interest
is not an abuse of discretion.
As the district court observed, this Court and other circuits have repeatedly looked favorably
on awards of prejudgment interests tied to prevailing market rates. Such awards reflect what the
defendant would have had to pay in order to borrow the money.54
That the Owner-Operators are able to collect more in interest from Comerica Bank than they
could from Arctic and D & A is irrelevant. Though related to the action against Arctic and D & A,
Plaintiffs action against Comerica is distinct and based on Comerica’s own actions with regard to
the maintenance escrow funds.
The district court’s prejudgment interest award to the Owner-Operators based on the Prime
rate therefore does not constitute an abuse of discretion.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s judgment with respect to the
statute-of-limitations, ICCTA-retroactivity, and prejudgment-interest issues, but I dissent on the
majority’s conclusions regarding the district court’s damages determination and would find that
Comerica waived its right to challenge the calculation based on the law-of-the-case doctrine and
the mandate rule.
54
Id. (Amended Judgment at 6) (citing Rybarczyk, 235 F.3d at 986; EEOC v. Wooster Brush
Co. Emps. Relief Ass’n, 727 F.2d 566, 579 (6th Cir. 1984); Lorenzen v. Emps. Ret. Plan of Sperry &
Hutchinson Co., 896 F.2d 228, 236 37 (7th Cir. 1990)); Katsaros v. Cody, 744 F.2d 270, 281 (2d Cir.
1984)).
29
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
COOK, Circuit Judge, joined by MOORE, Circuit Judge. Though we concur with Judge
Gwin’s conclusions with respect to the statute-of-limitations, ICCTA-retroactivity, and prejudgment-
interest issues, we write separately on the issue of damages. Courts speak through judgments, and
the judgment appealed here represents Comerica’s first adverse judgment as opposed to
“calculation” or “finding” as referenced by the dissent on damages. See California v. Rooney, 483
U.S. 307, 311 (1987) (per curiam) (holding that courts “review[] judgments, not statements in
opinions”). Further, the district court incorrectly held that the damages issue had already been
decided by this court in the prior appeal. Because we agree with Comerica that its liability cannot
be predetermined by a settlement to which it was not a party, we VACATE the district court’s
damages determination and REMAND for consideration of proof as to damages owed by Comerica.
1. Law of the Case or Waiver
The Owner-Operators first insist that either the law-of-the-case or the waiver doctrine
insulates the district court’s failure to consider the damages issue on remand. “Generally, the law-of-
the-case doctrine bars challenges to a decision made at a previous stage of the litigation which could
have been challenged in a prior appeal, but were not.” United States v. Gibbs, 626 F.3d 344, 351
(6th Cir. 2010) (emphasis added) (internal quotation marks omitted). At no point in the procedural
history of this case was there a decision as to the amount of damages Comerica must pay that could
have been challenged by Comerica but was not.
Clear Sixth Circuit precedent dictates that the complete relief Comerica obtained on summary
judgment foreclosed the possibility of a cross-appeal because this court would have lacked
jurisdiction to consider it. In Hensley v. Gassman, 693 F.3d 681 (6th Cir. 2012), for example, the
30
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
plaintiffs claimed that the defendant deputy sheriffs violated their Fourth Amendment rights. Id. at
686. Though the district court ruled that the deputies’ conduct violated the Fourth Amendment, it
nevertheless granted them summary judgment on the basis of qualified immunity. Id. The plaintiffs
appealed, and the deputies cross-appealed, contending that the district court erred in finding a
constitutional violation. Id. The court dismissed the cross-appeal for lack of jurisdiction, reasoning
that “[b]ecause the Deputies obtained all the relief they sought from the district court on [the
plaintiffs’] Fourth Amendment claim, we lack jurisdiction to consider the Deputies’ appeal.” Id.
Other cases hold similarly. See Wheeler v. City of Lansing, 660 F.3d 931, 939 (6th Cir. 2011)
(“There is generally no appellate jurisdiction when the appellant does not seek a change in the relief
ordered by the judgment appealed from.”); ASARCO, Inc. v. Sec’y of Labor, 206 F.3d 720, 722 (6th
Cir. 2000) (“It is a well settled principle that a prevailing party cannot appeal an unfavorable aspect
of a decision in its favor.”); Olympic Fastening Sys., Inc. v. Textron, Inc., 504 F.2d 609, 618 (6th Cir.
1974) (“Having received the full relief available to it . . . , [the plaintiff] had no occasion to file an
appeal.”).
Courts adopted this rule because “[p]ermitting review of a prevailing party’s claim creates
tension with Article III’s prohibition against issuing advisory opinions.” Wheeler, 660 F.3d at 940.
Moreover, abandonment of this sensible principle would likely lead to a flood of over-cautious
appeals by prevailing parties.
This authority, which neither the dissent nor the Owner-Operators address, conclusively
repudiates the contention that Comerica forfeited any challenge to damages by failing to cross-appeal
the district court’s judgment in Comerica’s favor. And the cases cited by the Owner-Operators and
31
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
the dissent fail to support the dissent’s analysis, as they all involved a party that lost, at least in part,
before the district court. See, e.g., Med. Ctr. Pharm. v. Holder, 634 F.3d 830, 832-34 (5th Cir. 2011)
(defendant FDA forfeited issue when it failed to raise it in initial appeal of district court’s grant of
summary judgment for plaintiffs); United States v. Adesida, 129 F.3d 846, 849-50 (6th Cir. 1997)
(criminal defendant forfeited issues when he failed to file earlier cross-appeal after conviction and
sentencing). In those cases the parties’ failure to appeal properly constituted forfeiture under the
law-of-the-case doctrine because each sought a change in the underlying judgment that adversely
affected rights or interests. Here, the complete relief granted to Comerica on summary judgment
obviates application of the doctrine to Comerica’s disadvantage.
The dissent adheres to the view that this court could have exercised jurisdiction over an
earlier cross-appeal by Comerica because “[i]n an appropriate case, appeal may be permitted . . . at
the behest of the party who has prevailed on the merits, so long as that party retains a stake in the
appeal satisfying the requirements of Art. III.” Deposit Guar. Nat’l Bank, Jackson, Miss. v. Roper,
445 U.S. 326, 334 (1980) (emphasis added). “A ‘stake in the appeal’ exists if the collateral ruling
affects the prevailing party’s rights and if erroneous would work harm to the prevailing party’s
interest.” 19 James Wm. Moore et al., Moore’s Federal Practice § 205.04[1], at 205-43 (3d ed.
2013). It cites, for example, Deposit Guaranty where plaintiffs successfully appealed denial of class
certification, despite the defendant tendering damages to the individual plaintiffs. Deposit Guaranty,
445 U.S. at 336. The Court reasoned that the plaintiffs “retain[ed] a continuing individual interest
in the resolution of the class certification question in their desire to shift part of the costs of litigation
to those who will share in its benefits if the class is certified and ultimately prevails.” Id.
32
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Likewise, in United States v. Windsor, the Supreme Court found that the United States
retained a sufficient stake in the litigation to support Article III standing even though the
government agreed with plaintiffs on the unconstitutionality of the Defense of Marriage
Act finding a requirement to expend Treasury funds “a real and immediate economic injury.”
133 S. Ct. 2675, 2686 (2013).
Comerica, though, having won complete relief, retained no such stake to justify a cross-
appeal that would satisfy Article III. Rather, like the plaintiff in ASARCO, the district court’s earlier
judgment in favor of Comerica caused Comerica “no distinct and palpable injury,” as required by
Article III’s case or controversy requirement. ASARCO, 206 F.3d at 724 (internal quotations marks
omitted) (considering and rejecting plaintiff’s contention that the Deposit Guaranty exception
permitted plaintiff’s appeal of a favorable judgment). As in ASARCO, Hensley, and Wheeler,
Comerica “thus lack[ed] standing to petition this court for review.” Id.
2. Limited Mandate
The Owner-Operators next maintain that the mandate rule, which restricts the issues to be
reviewed on remand to those authorized, precludes our review of the district court’s damages
determination. “Limited remands explicitly outline the issues to be addressed by the district court
and create a narrow framework within which the district court must operate.” United States v.
Campbell, 168 F.3d 263, 265 (6th Cir. 1999). “The language used to limit the remand should be,
in effect, unmistakable.” Id. at 268 (emphasis added). “In the absence of an explicit limitation, the
remand order is presumptively a general one.” United States v. Moore, 131 F.3d 595, 598 (6th Cir.
1997).
33
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Here, the prior panel’s mandate reads as follows: “For the foregoing reasons, we affirm in
part and reverse in part the district court’s judgment and remand for further proceedings consistent
with this opinion.” In re Arctic Express, Inc., 636 F.3d 781, 803 (6th Cir. 2011). This language,
which imposes no limit on the issues for review and establishes no particular procedure for the
district court to follow, conforms with language we have previously deemed a general remand. See,
e.g., United States v. Lopez, 453 F. App’x 602, 604 (6th Cir. 2011) (finding remand “for further
proceedings consistent with this opinion” to be a general remand because it “contain[ed] no limiting
language and is presumptively a general one”).
In contrast, we label mandates “limited” only when the language the remanding court
employs provides specific instructions. See, e.g., United States v. Campbell, 168 F.3d 263, 268 (6th
Cir. 1999) (deeming remand limited when it directed the district court to hold an evidentiary hearing
and instructed that “[t]he district court’s inquiry should relate to” a single, specific issue).
In construing the earlier mandate as limited to the statute-of-limitations issue, the dissent
points to this language in the opinion: “[W]e agree with the district court that genuine issues of
material fact exist which preclude a ruling, as a matter of law, on Comerica’s statute of limitations
defense.” Arctic Express, 636 F.3d at 803. But this language, found in a section of the opinion
different from the mandate, signaled only that the court found summary judgment inappropriate on
the statute of limitations issue; it in no way limited the district court’s purview on remand.
3. The District Court’s Damages Determination
Because neither the law-of-the-case doctrine nor the mandate rule forecloses review of the
district court’s damages determinations, we next consider Comerica’s argument that the district court
34
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
erred in finding that “[t]he question of the amount of damages that [Comerica] owes to [the Owner-
Operators] has . . . already been determined.” Whether the earlier settlement agreement may set the
amount of Comerica’s liability constitutes a question of law, and so we give fresh review. Paul
Revere Life Ins. Co. v. Brock, 28 F.3d 551, 553 (6th Cir. 1994).
We agree with Comerica the district court’s contrary holding notwithstanding that the
prior decision of this court stopped short of determining Comerica’s liability and never reached the
issue of damages. Rather, the factual background section of the opinion recounted that “plaintiffs
entered into a $5.5 million settlement agreement . . . [which] equaled the total amount of
maintenance escrow funds, plus interest, owed by Arctic and D & A to [the Owner-Operators].” Id.
at 789. And later in the opinion, in discussing the lending relationship with Comerica that Artic used
as the vehicle to breach its trust obligations, the panel opined that “Comerica must therefore disgorge
the trust property received in breach of trust unless it can establish a viable defense.” Id. at 801
(emphasis added). The opinion thus forged no link between the $5.5 million settlement amount and
its later reference to “the trust property received in breach of trust,” as the district court’s damages
opinions suggest. To the contrary, the amount of damages due from Comerica was not an issue taken
up by the panel in the earlier appeal. See generally id. (deciding (1) whether Motor Carrier Act
regulations created a statutory trust for the benefit of the Owner-Operators; (2) when the Owner-
Operators’ statutory trust interest attached; (3) whether Comerica constituted a bona fide purchaser
for value; and (4) whether the relevant statute of limitations barred the Owner-Operators’ claim as
a matter of law).
35
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
Because the district court erroneously found the prior panel’s opinion binding with respect
to damages, it never required the Owner-Operators to submit evidence of damages. It instead relied
entirely on the earlier settlement agreement between the Owner-Operators and Arctic, with Arctic
stipulating that it would not challenge the damages calculations. In other words, the district court
determined Comerica’s liability without hearing from Comerica. “[P]arties who choose to resolve
litigation through settlement may not dispose of the claims of a third party, and a fortiori may not
impose duties or obligations on a third party, without that party’s agreement.” City of Warren v. City
of Detroit, 495 F.3d 282, 287 (6th Cir. 2007); see also Davis v. Blige, 505 F.3d 90, 102-03 (2d Cir.
2007) (“Settlement agreements are not to be used as a device by which A and B . . . can . . . take
away the legal rights of C, a nonparty.”)
Yes, Comerica had notice of the settlement agreement. But notice of the settlement
agreement without more leaves Comerica’s right to challenge the district court’s damages
determination unaffected. The Owner-Operators could bind Comerica only through joining them
as a party to the earlier litigation. See Martin v. Wilks, 490 U.S. 755, 765 (1989) (“Joinder as a party,
rather than knowledge of a lawsuit and an opportunity to intervene, is the method by which potential
parties are subjected to the jurisdiction of the court and bound by a judgment or decree.”); see also
City of Warren v. City of Detroit, 495 F.3d 282, 286 (6th Cir. 2007) (acknowledging that a non-party
to a consent judgment “is entitled to its ‘own day in court’ to challenge actions taken under the
judgments”).
Moreover, allowing the Owner-Operators to impose its settlement agreement on non-party
Comerica appears particularly inequitable in this case, as the agreement required Arctic to pay only
36
No. 12-3491, Owner-Operator Independent Drivers, et al. v. Comerica Bank
$900,000 of the stipulated-to $5.5 million. The Owner-Operators seek to saddle Comerica with the
majority of the judgment despite the fact that Comerica had no opportunity to challenge the
settlement amount. Indeed, when the Owner-Operators representatives apprised class members of
the Arctic settlement, they assured the membership that they “have not given up on the total
Judgment Amount. A claim has been filed against Comerica . . . to recover the Judgment Amount
in a separate action.” As the Fifth Circuit incisively observed in a similar factual context, “[t]he
[settlement agreement] was the product not of adversaries, but of joint venturers. The plain purpose
was to agree to an extraordinarily high judgment . . . and impose the liability upon [Comerica] with
no opportunity for [Comerica] to defend . . . the judgment.” Lindsey v. Prive Corp., 161 F.3d 886,
890 (5th Cir. 1998).
The dissent notes that “little suggests the damage amount will change” on remand because
“[t]he calculation was not difficult.” But according to Comerica, errors pervade the stipulated-to
damages calculations. It points to internal inconsistencies that inflated the total $5.5 million
damages figure. (Appellant Br. at 55-57.) And Comerica maintains that the damages calculations
include many transactions that postdate Comerica’s lending relationship with Arctic. (Appellant Br.
at 57-58.) These alleged errors appear more significant than the dissent acknowledges. The district
court must afford Comerica the opportunity to challenge these calculations in determining
Comerica’s liability.
For these reasons, we VACATE the district court’s final judgment and REMAND for
proceedings consistent with this opinion.
37
Owner-Operator Independent Drivers Assoc., Inc. v. Comerica Bank
Court: Court of Appeals for the Sixth Circuit
Date filed: 2014-04-02
Citations: 562 F. App'x 312
Copy CitationsCombined Opinion