Court: United States Court of Appeals for the Sixth Circuit

Filed: 2026-08-06

The Sixth Circuit affirmed the lower courts’ ruling that a bankruptcy trustee could avoid a transfer of real property from debtor Jason Wylie to his mother, Kathleen Sullivan, under the constructive fraud provisions of 11 U.S.C. § 548(a)(1)(B)(i). The court held that Wylie did not receive “reasonably equivalent value” for the transfer because the release of mortgage debt he received was less than the value of the property conveyed, and Sullivan failed to prove that a separate $200,000 business loan or a $33,000 conversion claim were satisfied by the transaction. Applying Michigan contract law, the court reviewed de novo the interpretation of the 2014 loan agreement and found no personal guaranty by Wylie for his company’s debt. Under Michigan law, absent two distinct signature blocks or explicit language creating a personal obligation, an officer signing as “President” and “individually” does not automatically create a personal guaranty; the contract text identified only the company as the obligor. Furthermore, the court found that the 2019 “Mutual Release in Full” extinguished claims related to specific mortgages and promissory notes but did not cover the separate conversion claim or the business loan, as the release’s language was limited to those listed instruments and Sullivan’s extrinsic evidence regarding intent lacked credibility. Regarding the remedy, the court affirmed the bankruptcy court’s exercise of discretion under 11 U.S.C. § 550 to order the return of the specific property rather than its value, noting that Congress grants courts broad authority to choose between recovering the property or its value and that Sullivan failed to preserve arguments contesting this specific remedy below. As a result, the transfer remains avoided, and Kathleen Sullivan must return the paid-off real property to Wylie’s bankruptcy estate for distribution to creditors. The court declined to address Sullivan’s claim regarding the district court’s adoption of the trustee’s proposed order, finding no reversible error in that procedural matter.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Seventh Circuit

Filed: 2026-08-06

The Seventh Circuit affirmed the convictions of Rishi Shah and Shradha Agarwal for mail fraud, wire fraud, bank fraud, and money laundering arising from a multi-million-dollar scheme at Outcome Health. The court rejected the defendants’ challenges regarding an overbroad pretrial asset freeze, alleged due process violations by the government, evidentiary rulings on witness testimony, and jury instructions. Regarding the Sixth Amendment claim that the asset freeze violated their right to counsel of choice, the court held that the defendants forfeited their challenge to the restraint of “Other Assets” because they failed to object before trial despite having access to grand jury transcripts and tracing spreadsheets in 2020 that revealed the over-restraint. Under the plain error standard, the burden remained on the defendants to prove that the improperly restrained assets were sufficient to afford their chosen counsel. The court found no clear error in the district court’s determination that the illiquid nature of the assets and market conditions prevented Shah and Agarwal from liquidating enough funds ($7.8 million) to retain Quinn Emanuel and McGuireWoods within the required timeframe. Additionally, the court ruled that the $10.3 million in “Settlement Funds” remained tainted by their illicit origin under 21 U.S.C. § 853(c), meaning a private civil settlement could not cleanse them of forfeiture liability or allow their use for legal fees. On the Fifth Amendment due process claim, the court found no plain error in the government’s failure to correct an FBI accountant’s misleading statement to the grand jury regarding asset traceability. The district court had found no evidence that government officials knowingly made false statements or failed to correct them; the discrepancy was attributed to a “right hand-left hand” communication breakdown rather than willful misconduct. Furthermore, any such error was deemed harmless because it did not affect the defendants’ substantial rights given the overwhelming evidence of guilt presented at trial. Regarding evidentiary rulings, the court found no abuse of discretion in admitting prior consistent statements under Federal Rule of Evidence 801(d)(1)(B) to rehabilitate cooperating witnesses, even if the admission was overbroad for two witnesses. The court determined any error was harmless given the strength of the government’s documentary evidence and the fact that the prosecution itself discredited the problematic witness in closing arguments. Finally, the court rejected the argument that jury instructions permitted invalid theories of fraud, noting that the instructions properly required proof of intent to defraud and aligned with Supreme Court precedent regarding fraudulent inducement. As a result of this decision, the district court’s judgments of conviction and sentences remain in effect, including Shah’s 90-month prison term and forfeiture order, and Agarwal’s one-day sentence and forfeiture order.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Ninth Circuit

Filed: 2026-08-06

Docket: :

The ninth-circuit reversed the district court’s grant of summary judgment in favor of Marron Lawyers, APC, in a legal malpractice action brought by Koi Design LLC, and remanded the case for further proceedings. The panel held that genuine disputes of material fact existed regarding whether Marron breached its duties to Koi and whether Marron’s conduct caused Koi harm, which are essential elements of Koi’s claims for legal malpractice, breach of fiduciary duty, and negligent supervision under California law. The court applied the standard that breaches of the California Rules of Professional Conduct may be used to prove a lawyer has breached their fiduciary duties or the standard of care required for a legal malpractice claim. The panel identified two specific duties owed by Marron: a duty to disclose material facts and significant developments in the underlying SPI litigation, and an obligation to adequately supervise its employees. The court concluded that a reasonable jury could find Marron breached these duties by failing to inform Koi of Mastroianni’s incompetence, malpractice risks, and failures to comply with court deadlines, as well as by failing to supervise Mastroianni’s handling of the case despite internal knowledge of his deficiencies. Regarding causation, the panel applied the “but for” test, concluding that under California law, the substantial factor causation standard required in this context necessitates a showing that Koi would have obtained a more favorable judgment or settlement but for Marron’s conduct. The court determined that a reasonable jury could find it more likely than not that competent counsel would have avoided the default judgment and treble damages award, or that Koi would have replaced Mastroianni with competent counsel had Marron disclosed his misconduct. The panel rejected the district court’s conclusion that causation was lacking as a matter of law, noting that conflicting expert testimony and evidence regarding the impact of Mastroianni’s specific misconduct while employed by Marron created genuine factual disputes. Additionally, the panel held that the district court did not violate Federal Rule of Civil Procedure 56(f)(2) because Koi had adequate notice of the causation theory relied upon by the court.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Ninth Circuit

Filed: 2026-08-06

Docket: 2:19-cv-07154-TJH

The Ninth Circuit affirmed the district court’s entry of a $6,529,950.86 default judgment against attorney A. Douglas Mastroianni following his nearly three-year failure to respond to Koi Design LLC’s adversary proceeding alleging legal malpractice. The court reviewed the jurisdictional question de novo and applied an abuse-of-discretion standard to the district court’s decision to retain jurisdiction after the underlying bankruptcy case was closed, as well as its denial of Mastroianni’s motion to set aside the default under Federal Rule of Civil Procedure 55(c). Regarding subject-matter jurisdiction, the court held that the proceeding was “related to” Koi’s Chapter 11 bankruptcy case because the outcome could conceivably affect the bankruptcy estate, satisfying the standard under 28 U.S.C. § 1334(b). The court further ruled that the district court did not abuse its discretion in retaining jurisdiction after the bankruptcy case closed, finding that the factors of economy, convenience, fairness, and comity favored keeping the case in federal court given the eight years of prior litigation and the risk of inconsistent outcomes. On the merits of the default judgment, the court applied the disjunctive three-factor test from *Franchise Holding II, LLC v. Huntington Restaurants Grp., Inc.*, which considers whether the defendant engaged in culpable conduct, lacked a meritorious defense, or would cause prejudice to the plaintiff if the default were set aside. The court found that Mastroianni was culpable for failing to respond after proper service by mail, which is permitted under Federal Rule of Bankruptcy Procedure 7004(b). Additionally, the court determined Mastroianni lacked a meritorious defense; his proffered defenses were either previously rejected or raised for the first time on appeal and thus waived. The affirmance results in the default judgment standing against Mastroianni, while his pending motions for summary reversal are denied as moot.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Sixth Circuit

Filed: 2026-08-06

The sixth-circuit reversed the district court’s denial of a corrections officer’s motion for summary judgment based on qualified immunity and remanded the case for entry of judgment in the officer’s favor. The court held that Officer Nathan Falk was entitled to qualified immunity because his conduct did not violate a clearly established constitutional right under the Eighth Amendment. The court applied the two-prong test for qualified immunity, focusing on whether the law was “clearly established” at the time of the incident such that every reasonable official would understand that failing to immediately respond to an inmate’s complaint violated the Constitution. The court emphasized that a clearly established right must be defined with particularity based on the officer’s specific circumstances, rather than at a high level of generality. In this case, the court found that while prison officials cannot show deliberate indifference to serious medical needs, the law did not place it “beyond debate” that an officer must immediately provide healthcare to an inmate who complains of chest pain but displays no external signs of distress. The court distinguished the facts from controlling precedent such as *Tlamka v. Serrell* and *Estate of Carter v. City of Detroit*, noting that those cases involved inmates exhibiting obvious, visible symptoms like turning blue, collapsing, lying on the floor, or crying loudly for hours. In contrast, Richardson merely complained of chest pain while sitting in a wheelchair without visible signs of distress, and he was transported to the medical wing only eight minutes after his complaint. Because there was no case law indicating that an officer violates the Eighth Amendment by failing to respond immediately to a verbal complaint absent external manifestations of severe illness, Falk could not have been on notice that his actions were unlawful. Consequently, Richardson’s claim for relief under the Eighth Amendment failed at the qualified immunity stage.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Sixth Circuit

Filed: 2026-08-06

The sixth-circuit affirmed the district court’s denial of Demond Liles’s federal habeas corpus petition under 28 U.S.C. § 2254. Liles sought relief arguing that the state breached his plea agreement by making a sentencing recommendation, a claim barred by procedural default because he failed to object at his state sentencing hearing. To overcome this default, Liles argued that his trial counsel’s failure to object constituted ineffective assistance of counsel, which would provide “cause” and “prejudice” under *Strickland v. Washington*. The court applied the two-pronged *Strickland* standard, requiring a petitioner to show that counsel’s performance was objectively unreasonable and that this deficiency prejudiced the defense by creating a reasonable probability that the outcome would have been different. While the state did not dispute that counsel’s failure to object was objectively unreasonable, the court held that Liles failed to demonstrate prejudice. The record indicated that the sentencing judge rested his 25-year sentence on bases entirely independent of the prosecutor’s statements, including an extensive dialogue with Liles regarding the nature of drug crimes and the judge’s own review of the plea agreement terms. The court found no evidence sufficient to undermine confidence in the outcome, noting that the prosecutor’s remarks played at most a minor role in the sentencing decision. Consequently, because Liles could not establish prejudice, he failed to excuse his procedural default, and his petition was denied.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Eighth Circuit

Filed: 2026-08-06

The eighth-circuit affirmed the district court’s judgment revoking probation and imposing a sentence of 12 months and 1 day in prison followed by 36 months of supervised release. The court held that the sentence was not an abuse of discretion because the district court properly considered the factors set forth in 18 U.S.C. § 3553(a) and imposed a term below the statutory maximum of five years authorized under 18 U.S.C. § 1623(a). The court applied the standard of review established in *United States v. Keatings* and noted that upon revocation, a district court may impose any sentence within statutory limits available at initial sentencing as per *United States v. Tschebaum*. Consequently, the court granted counsel’s motion to withdraw and affirmed the conviction and sentence without further analysis of the substantive reasonableness argument raised in the brief.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Ninth Circuit

Filed: 2026-08-06

The Ninth Circuit denied the petition for review of the Board of Immigration Appeals’ decision affirming the denial of the petitioner’s applications for asylum, withholding of removal, and protection under the Convention Against Torture (CAT). The court applied a standard of review where legal conclusions are examined de novo and factual findings are reviewed for substantial evidence. Regarding asylum and withholding of removal, the court held that the Agency did not err in finding the petitioner ineligible because he failed to establish a cognizable particular social group (PSG) or any other protected ground. The court found substantial evidence supporting the Agency’s determination that the petitioner’s proposed PSGs lacked particularity. Specifically, the group of “young Salvadorian males who oppose gang and cartel membership due to Catholic beliefs” was deemed insufficiently particular under Ninth Circuit precedent, as was the group of persons from El Salvador “returning from the United States” and “perceived as being wealthy.” The court cited *Reyes v. Lynch* and *Ramirez-Munoz v. Lynch*, noting that groups defined by deportation status or imputed wealth are too amorphous and diffuse to qualify, and the record did not show gangs single out returnees based on perceived wealth. Regarding CAT protection, the court affirmed the Agency’s determination that the petitioner was ineligible because he failed to demonstrate that government officials would likely acquiesce in his torture. The court noted substantial evidence supporting the finding that while there is some corruption, Salvadoran government efforts to combat gang activity are significant, and the petitioner’s failure to report incidents or follow up with police undermined his claim. The practical consequence of this decision is that the petition for review is denied, and the removal order remains in effect, though a temporary stay of removal remains in place until the mandate issues.

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Court: United States Court of Appeals for the Ninth Circuit

Filed: 2026-08-06

Docket: 3:20-cv-00527-RSH-DEB

The ninth-circuit affirmed the district court’s judgment on all issues, adopting the reasons provided in the lower court’s opinion without independent analysis. The panel granted the appellees’ motion to submit the case for decision based solely on the briefs and record. No specific legal standard, statute, or rule was applied in this memorandum disposition beyond the affirmation of the district court’s prior reasoning. Consequently, the district court’s ruling stands as final, and the appeal is concluded with no further proceedings required at the appellate level.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

John Chapman was convicted of kidnapping resulting in death after a trial where the jury deliberated for two days. The district court received substantive jury notes revealing a vote breakdown but did not disclose them to the parties before issuing an Allen charge. The court also engaged in coercive questioning of a holdout juror. Chapman had confessed to the crime after being read his Miranda rights, though he had disclosed his autism and other diagnoses during the interrogation.

The panel held that the federal kidnapping statute does not require physical force to satisfy the holding element, joining other circuits in recognizing that deception can constitute holding. However, the court found the district court’s actions impermissibly coercive. The court gave an Allen charge while knowing the jury’s numerical breakdown, which is per se coercive. Additionally, the judge’s comments to a holdout juror and the short thirty-seven minute deliberation period after the charge indicated coercion. The court also affirmed the denial of the motion to suppress, finding Chapman’s Miranda waiver was valid.

We hold that the district court improperly coerced the jury’s verdict, and so we vacate the verdict and remand for a new trial.

United States v. Chapman, 24-4939 (9th Cir. Aug. 5, 2026)

The defendant’s conviction is overturned, and the case is sent back to the district court for a new trial. The ruling clarifies that deception alone can satisfy the holding element of the federal kidnapping statute in the Ninth Circuit.