Latest 3 Cases: Black v. Pension Benefit Guaranty Corp. (Bankruptcy), Flack v. Commissioner of Social Security (Civil Procedure), United States v. ...

Shinzo Abe’s Biggest Failure Is His Greatest Legacy: Preservation of Japan’s Anti-Military Constitutional Provision

MICHAEL C. DORF

In response to the news that Japan’s Prime Minister Shinzo Abe resigned due to health reasons, Cornell law professor Michael C. Dorf comments on Abe’s efforts to amend Article 9 of Japan’s Constitution, which was imposed on the country by Supreme Allied Commander Douglas MacArthur after World War II. Dorf describes one bad reason and two good reasons that have been offered for a change in Article 9, but he argues that the case for retaining Article 9 is stronger.

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Black v. Pension Benefit Guaranty Corp.

Docket: 19-1419

Opinion Date: September 1, 2020

Judge: Siler

Areas of Law: Bankruptcy, ERISA, Government & Administrative Law

Title IV of the Employee Retirement Income Security Act of 1974 (ERISA) creates an insurance program to protect employees’ pension benefits. The Pension Benefit Guaranty Corporation (PBGC)—a wholly-owned corporation of the U.S. government—is charged with administering the pension-insurance program. PBGC terminated the “Salaried Plan,” a defined-benefit plan sponsored by Delphi by an agreement between PBGC and Delphi pursuant to 29 U.S.C. 1342(c). Delphi had filed a voluntary Chapter 11 bankruptcy petition and had stopped making contributions to the plan. The district court rejected challenges by retirees affected by the termination. The Sixth Circuit affirmed. Subsection 1342(c) permits termination of distressed pension plans by agreement between PBGC and the plan administrator without court adjudication. Rejecting a due process argument, the court stated that the retirees have not demonstrated that they have a property interest in the full amount of their vested, but unfunded, pension benefits. PBGC’s decision to terminate the Salaried Plan was not arbitrary and capricious.

Flack v. Commissioner of Social Security

Dockets: 19-3886, 19-1579, 19-1581, 19-1586, 19-1889, 19-1977

Opinion Date: September 1, 2020

Judge: Helene N. White

Areas of Law: Civil Procedure, Government & Administrative Law, Public Benefits

The plaintiffs sought Social Security disability and/or supplemental security income benefits. In each case, the application was denied, and an ALJ upheld the denial. The Appeals Council denied relief. The plaintiffs sought judicial review. While the appeals were pending, the plaintiffs moved to raise an issue they had not raised during administrative hearings--a challenge to the ALJs’ appointments, citing the Supreme Court’s 2018 "Lucia" decision that SEC ALJs had not been appointed in a constitutionally legitimate manner and that remand for a de novo hearing before a different ALJ was required. The district courts agreed that the Appointments Clause challenges were forfeited and affirmed the denials of benefits. The Sixth Circuit vacated and remanded for new hearings before constitutionally appointed ALJs other than the ALJs who presided over the first hearings. There is no question that Social Security ALJs are inferior officers who were required to be, but were not, appointed consistently with the Appointments Clause. There are no statutory or regulatory exhaustion requirements governing Social Security proceedings and, while a court may still impose an implied exhaustion rule, such a requirement is inappropriate because the regulations provide no notice to claimants that their failure to raise an Appointments Clause challenge at the ALJ level will preclude them from later seeking a judicial decision on the issue.

United States v. Bailey

Dockets: 18-5903, 18-5607, 18-5901

Opinion Date: September 1, 2020

Judge: Gibbons

Areas of Law: Criminal Law, Government Contracts, Health Law, White Collar Crime

A jury convicted Sandra, Calvin, and their son Bryan Bailey of conspiring to commit healthcare fraud and other related crimes (18 U.S.C. 371, 1343, 1347; 42 U.S.C. 1320a-7b). The three, working for medical equipment companies, used fraud, forgery, and bribery to sell power wheelchairs and other equipment that was not medically necessary. The district court sentenced Sandra to 120 months’, Calvin to 45 months, and Bryan to 84 months’ imprisonment. The Sixth Circuit affirmed the convictions and the sentence imposed on Bryan. The court rejected challenges to the sufficiency of the evidence and to various evidentiary rulings and upheld the admission of certain out of court statements made in furtherance of the conspiracy. The district court miscalculated Sandra’s Guidelines-range sentence when it erroneously imposed a two-level increase in her offense level for using “mass marketing” in her scheme and incorrectly calculated the loss amount for which Calvin was responsible—and by extension, his Guidelines-range sentence—by holding him responsible for losses beyond those he agreed to jointly undertake.