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Nestle Waters v. Mountain Glacier Continues

The case between Nestle Waters and Mountain Glacier could be called "the water wars," except for one thing.

There was a cease-fire when Mountain Glacier filed for bankruptcy and the case was stayed. Now reorganized, the company wants back into the fight.

Nestle Waters said Mountain Glacier waived its claims, but the U.S. Sixth Circuit Court of Appeals said there will be another battle in Nestle Waters North America, Inc. v. Mountain Glacier, LLC.

6th Cir. Affirms Lower Bankruptcy Ruling, Punts Constitutionality

A case of some interest to appellate attorneys came out of the Sixth Circuit recently that invoked the Constitutional Avoidance Doctrine -- avoiding questions of constitutionality when the validity of a law can be determined on other grounds.

Though the case is filed under bankruptcy law, it is instructive in several key areas of law practice including statutory construction, affirmation on erroneous reasoning, and the above mentioned "avoidance" doctrine.

The Sixth Circuit is progressing with cases related to same sex marriage, as it consolidated appeals for all cases pending in that circuit. Meanwhile, the court has heard appeals related to Detroit's bankruptcy, and a habeas case resting on elementary tenets of criminal procedure.

Let's take a look at the most recent happenings in the Sixth Circuit.

All Eyes on D: Bankruptcy Appeal Gets Fast Track to 6th Circuit

Municipal bankruptcies, at least until recently, were a rare phenomenon. Even more rare is a bankruptcy filing of this magnitude. Detroit has $18.5 billion in debt and liabilities that it cannot afford to pay, including $3.5 billion in unfunded pension liabilities.

In a 150-page order earlier this month, Judge Steven W. Rhodes held that Motown was eligible to file for Chapter 9 bankruptcy and more importantly, could restructure or avoid some of its massive pension obligations, despite the Michigan Constitution's protections for pensioners from cuts, as federal bankruptcy law trumps state law.

Both holdings may now head to the Sixth Circuit Court of Appeals, after Judge Rhodes certified his rulings for appeal directly to the appeals court, bypassing the intermediate district court, though as USA Today notes, it'll be up to the Sixth Circuit to decide whether it wants to accept the immediate appeal.

Merrill Lynch IRA Account Still Exempt From Bankruptcy

Your employee IRA accounts are still safe under Chapter 7 Bankruptcy, according to a decision by the Sixth Circuit on Monday.

The Daley v. Mostoller Court reaffirmed common knowledge in bankruptcy practice, that individual retirement accounts (IRAs) are “off limits from tax collectors and creditors in bankruptcy,” unless they’ve been used in a prohibited way.

What does the Sixth Circuit consider a prohibited use of an IRA?

Guardian Ad Litem Fees are Nondischargeable in Bankruptcy

There are certain obligations that a bankruptcy petitioner can't shed in court.

For example, barring "undue hardship," your student loans will follow you. Forever.

Student loans, however, have nothing on child support. Courts are pretty committed to enforcing domestic support obligations. And that commitment to extends to guardian ad litem fees.

Fired Employee's Discrimination Claim Belongs to Bankruptcy Estate

There are bad weeks, and then there are lose-your-job-and-file-for-bankruptcy bad weeks. Karen Auday had the unfortunate distinction of enduring the latter.

To make matters worse, Auday alleges that she was a victim of age discrimination. While that may be true, the Sixth Circuit Court of Appeals ruled last week that Auday can't sue her former employer because the claim now belongs to her bankruptcy estate.

Seriously, this woman can't catch a break.

Sixth Circuit: Severance Pay Not Subject to FICA Taxes

You may have noticed that the unemployment rate is still pretty high. Though it's down from the October 2009 peak, companies continue to lay off workers.

The Sixth Circuit Court of Appeals issued an opinion last week that could ease the financial burden on flailing businesses facing layoffs: Friday, the court ruled that severance pay is not subject to FICA taxes, Thomson Reuters News & Insight reports.

Government Can't Claim Money Buried on Golf Course

People might enjoy reading bankruptcy cases if more of those cases included money buried on a golf course.

In what the Sixth Circuit Court of Appeals characterizes as “a fact pattern befitting a John Grisham novel,” FBI agents found $250,000 of “fraudster” A. William Erpenbeck, Jr.’s cash stashed in a cooler on a golf course outside Cincinnati while Erpenbeck was serving a 300-month sentence in federal prison.

Thursday, the Sixth Circuit ruled that the feds couldn’t keep the cash because they didn’t give proper notice of their intent to seize the money for restitution.

Int'l Dairy Foods Ass'n v. Boggs, 09-3515, concerned a challenge to the district court's grant of summary judgment in favor of the state of Ohio on all but one of plaintiffs' claims, in a suit brought by two separate dairy-processor trade organizations, challenging a regulation adopted by the Ohio Department of Agriculture (ODA), designed to regulate labeling of dairy products that reflect the nonuse of artificial hormones.