Section 230 of the Commuications Decency Act says that no interactive computer service “shall be treated as the publisher or speaker” of third-party content. That law was of no help to a claim against Salesforce about alleged human trafficking, as the Fifth Circuit explained in A.B. v. Salesforce, Inc.:

Plaintiffs allege that Salesforce knowingly assisted, supported, and facilitated sex trafficking by selling its tools and operational support to Backpage even though it knew (or should have known) that Backpage was under investigation for facilitating sex trafficking. In essence, Plaintiffs allege that Salesforce breached a statutory duty to not knowingly benefit from participation in a sex-trafficking venture.

To state the obvious: this duty does not derive from Salesforce’s status or conduct as a publisher or speaker and would not require Salesforce to exercise publication or editorial functions to avoid liability. Rather, the duty simply requires that Salesforce not sell its tools and operational support to a company it knew (or should have known) was engaged in sex trafficking. This is not an action “quintessentially related to a publisher’s role.” Accordingly, section 230 does not immunize Salesforce from Plaintiffs’ claims.

No. 23-20604 (Dec. 19, 2024) (citations and footnotes omitted).

This notice, under Fifth Circuit precedent, abandoned the lender’s intent to accelerate a note obligation:

To the extent you have received demand letters with intent to accelerate the obligations under the above subject Note and any notice of acceleration of said Note prior to the date of this demand letter, be advised that any such demands or notices of acceleration have been withdrawn, cancelled, and abandoned.

No. 23-50662 (Dec. 20, 2024) (emphasis in original). The opinion discusses how the Circuit’s “rule of orderliness” applies to the issue at hand.

In a commerical fiduciary-duty dispute, DALF Energy v. GS Oilfield Services holds: “DALF proved each element of its breach of fiduciary duty claims based on Scribner’s falsification of production records, failure to disclose his relationship to O&GH, and failure to disclose his father’s relationship to TROFA”; and also: “DALF proved Scribner breached his fiduciary duty by placing ;P.E.’ after his name and failing to disclose his relationship to GSOS.” No. 24-50032 (Dec. 30, 2024).

Stone v. Graham, 449 U.S. 39 (1980), holds:

“Posting of religious texts on the wall  serves no such educational function. If the posted copies of the Ten Commandments are to have any effect at all, it will be to induce the schoolchildren to read, meditate upon, perhaps to venerate and obey, the Commandments. However desirable this might be as a matter of private devotion, it is not a permissible state objective under the Establishment Clause.“

Unsurprisingly, then, the Fifth Circuit voted 14-3 on December 30 to reject an overly enthuastic application for en banc hearing in Roake v. Brumley – the challenge to a Louisiana law about display of the Ten Commandments that is flatly inconsistent with the above Supreme Court holding.

A complex set of appeals about the Serta bankruptcy produced this on-target introduction – not phrasing that should be used in most cases, but completely apt for these complicated finance issues:

Illustrating the choppy waters that can surround a nationwide injunction, in December, Fifth Circit judges reached three different conclusions about whether to stay the Corporate Transparency Act and related administrative rules. The motions-panel majority held:

The district court concluded that both are unconstitutional and issued nationwide injunctions against each, despite no party requesting it do so and despite every other court to have considered this issue tailoring relief to the parties before it or denying relief altogether.

The third member of the motions panel concurred in part:

[She] agrees for an expedited appeal and agrees that a national injunction is not appropriate here, so she would grant a temporary stay of the preliminary injunction pending the decision of the merits panel regarding whether to deny a stay pending appeal as to the non-parties. However, she would deny the temporary stay as to the parties (while, of course, deferring to the merits panel on this point as well), including the members of NFIB, as long as their identities are disclosed to the government.

A later per curiam order, which may have issued from the merits panel, or may simply reflect communication with that panel, reached a different conclusion:

The merits panel now has the appeal, which remains expedited, and a briefing schedule will issue forthwith. However, in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.

These changes show how minor variations in panel makeup can have profound consequences when nationwide equitable relief is at issue. (The party-presentation issue referred to by the motions-panel majority is also addressed in my recent Cornell Law Review essay.)

In Alliance for Fair Board Recruitment v. SEC, the en banc Fifth Circuit held that the SEC should not have approved Nasdaq’s “Board Diversity Proposal.”

The Court reminded that the Act is focused on protecting investors from speculative, manipulative, and fraudulent practices, and promoting competition in the securities market; therefore: “SEC may not approve even an a disclosure rule unless it can establish the rule has some connection to an actual, enumerated purpose of the Act.” It rejected the SEC’s argument that the proposal would satisfy investor demand for diversity information, holding: “The purpose of satisfying investor demand for any and every kind of information about exchange-listed companies is not remotely similar to any of those stated purposes.” 

Cf. McCullough v. Maryland,17 U.S. 316 (1819) (“Among the enumerated powers, we do not find that of establishing a bank or creating a corporation. But there is no phrase in the instrument which, like the articles of confederation, excludes incidental or implied powers; and which requires that everything granted shall be expressly and minutely described.”).

The Court also found support for its holding in the major questions doctrine, given the expansive regulatory authority that it concluded would be needed for the SEC to implement the proposal. A dissent argued that the SEC had received substantial evidence that investors sought standardized information on board diversity, and noted the SEC’s limited statutory authority to review the rules of Nasdaq, a distinct and private entity (albeit one that is heavily regulated). No. 21-60626, Dec. 11, 2024 (9-8 vote).

Judge Oldham’s thoughtful dissent from the recent wreckage of an en banc proceeding provides fascinating historical background about courts’ traditional focus on decisions rather than opinions. That basic concept about the operation of appellate courts is useful in distinguishing holding from dicta, identifying the appropriate scope of appellate review, and clarifying questions about the law of the case / res judiciata effect of earlier judgments.

By including Roman courts in its historical review, the opinion reminds how much the American system has borrowed from the civilian tradition – a point of particular interest in Texas, where opinions from the 1840s by the Republic of Texas Supreme Court vividly illustrate the jostling between the English/American and Spanish/French systems on issues of property law at that time.

Lengthy en banc deliberation produced a one-paragraph, per curiam affirmance in Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp., a long-running challenge to a $20 million environmental fine. Judge Oldham’s dissent summarizes the bewildering array of votes and opinions:

The case of Chaudhary Law Firm, P.C. v. Ali reminds: “It is more than well-settled that only an aggrieved party may appeal a judgment.”  A party is not considered “aggrieved” if they have received a favorable judgment, even if the trial court made subsidiary findings or conclusions that were unfavorable to them.

The Court emphasized that “appellate courts review judgments, not opinions,” and a winning party “may not appeal for the sole purpose of seeking a more favorable opinion from the [trial] court.” The Court noted some situations that could warrant a relaxation of this principle, none of which were present in this case, where the defendant law firm obtained complete dismissal on the merits. No. 23-20362 (Dec. 9, 2024).

Savoie v. Pritchard affirmed that there is “life within” the fiduciary shield doctrine in Louisiana law. The doctrine prevents the exercise of personal jurisdiction over a corporate officer based solely on their corporate acts, and is “rooted in the principle that the acts of a corporate officer in his corporate capacity cannot form the basis for jurisdiction over him in an individual capacity.”  In this Erie case, the Fifth Circuit found implicit recognition of the doctrine in a Louisiana Supreme Court case.

The Court emphasized that “contacts made in [the defendant’s] corporate capacity do not count against him for purposes of personal jurisdiction unless one of two exceptions apply: (1) the defendant allegedly engaged in a tort for which he may be personally liable, or (2) the plaintiff demonstrates cause to pierce the corporate veil.”  No such claim was pleaded here or shown here, so the fiduciary shield doctrine barred personal jurisdiction over the defendant. No. 23-30783, Nov. 25, 2024.

This week, the Eastern District of Texas enjoined a sweeping set of Treasury regulations about disclosure of beneficial ownership, concluding that the Corporate Transparency Act and related regulations exceeded Congress’s constitutional powers. The Northern District of Texas rejected Boeing’s plea bargain of charges related to the 737 MAX debacle, concluding that inappropriately required consideration of race in selecting the monitors for a program that would administer Boeing’s compliance with agreed obligations going forward. The Boeing ruling may yet be resolved in the trial court, as the judge asked the parties to report back in 30 days, but the CTA case will certainly be headed to the Fifth Circuit soon.

In Van Loon v. Dep’t of the Treasury, the Fifth Circuit addressed the Treasury Department’s authority to regulate “property” under the International Emergency Economic Powers Act. After a detailed explanation of the blockchain technology involved, the Court held that certain “immutable smart contracts” do not qualify as “property” under IEEPA. The Court emphasized that “property” must be capable of being owned, and since the immutable smart contracts are unchangeable and unremovable, they cannot be owned or controlled by any entity, including their creators.

The Court further clarified that even under the Treasury’s own regulatory definitions, the immutable smart contracts do not fit within the scope of “property.” The court noted that these smart contracts are neither contracts nor services, as they do not involve any human effort or control once they are deployed. No. 23-50669 (Nov. 26, 2024).

In Willis v. Barry Graham Oil Service, L.L.C., the Fifth Circuit read the relevant contract provisions differently than the district court.

The district court concluded that Barry Graham Oil Service did not fall within the defense, indemnification, and insurance provisions of the Master Services Contract (MSC) between Shamrock Management and Fieldwood Energy. Specifically, it found that Graham was not covered by the MSC’s indemnity provisions because it was not part of the “Third Party Contractor Group” defined in the contract.

The Fifth Circuit held that Graham was covered under the MSC’s indemnity provisions. The MSC required Shamrock to “release, indemnify, protect, defend, and hold harmless such other Third Party Contractor(s) (and any such Third Party Contractor Group),” from claims arising from injuries to Shamrock’s employees.

Therefore, Graham, as part of Kilgore Marine Services’ Third Party Contractor Group, was entitled to indemnification. The contractual trigger for these obligations—cross indemnification “substantially similar” to Shamrock’s—was satisfied, obligating Shamrock to defend and indemnify Graham. No. 23-30609, Nov. 20, 2024.

In State of Texas v. U.S. Dep’t of Homeland Security, the Fifth Circuit addressed a challenge by Texas to a federal plan to cut razor wire installed by Texas at a border crossing. A 2-1 opinion ordered entry of a preliminary injunction against the planned wire-cutting.

The panel majority held the Administrative Procedure Act “clearly waives the United States’ sovereign immunity for Texas’s common law claims,” allowing Texas to seek injunctive relief against federal agencies and officers. In particular, Texas’s claims sought non-monetary relief and were based on the destruction of its property, which falls under the definition of “agency action” in the APA.

The majority also held that Texas showed a strong likelihood of success on its state law trespass-to-chattels claim–the concertina wire is state property, and Texas had shown that the federal agents’ actions were not justified by any exigency or statutory authority. As a result, the court granted Texas’s request for a preliminary injunction, enjoining federal agents from damaging or interfering with Texas’s concertina wire fence.

A dissent argued that Texas did not show the alleged “wire-cutting policy” constituted final agency action, which is a prerequisite for judicial review under the Administrative Procedure Act (APA). It also concluded that Texas’s state law claims were barred by intergovernmental immunity, as applying Texas tort law to federal agents would improperly control federal operations. No. 23-50869 (Nov. 27, 2024).

Cocroft v. Graham  addressed the constitutionality of Mississippi’s restrictions on medical marijuana advertising. Since marijuana remains illegal under federal law, including for medical purposes, Mississippi can lawfully restrict advertising related to it. The Fifth Circuit emphasized that “the First Amendment poses no obstacle to a ban on such speech” because the underlying commercial activity is not lawful under federal law.

Specifically, the Court rejected the plaintiffs’ argument that only the sovereign enacting the underlying prohibition (in this case, the federal government) could restrict related commercial speech. The Supremacy Clause ensures federal law’s primacy, making marijuana illegal in every state, including Mississippi. Therefore, Mississippi’s restrictions on medical marijuana advertising are constitutionally permissible. No. 24-60086, Nov. 22, 2024.

Jones v. Reeves grounded the long-flying litigation about governance of the Jackson Airport, observing:

There is also a fundamental disconnect between the Plaintiffs’ theory of employment-related injury, i.e. loss of per diem and travel reimbursement, and the remedy they seek, which is an injunction preventing abolition of the [Jackson Municipal Airport Authority]. … The elimination of JMAA and its replacement by the [Jackson Metropolitan Area Airport] Authority is the crux of this case. JMAA Commissioners’ per diem and travel expenses compensate and reimburse them only for their official duties as appointees. If the seat to which these duties are owed disappears, so too does the need for any associated reimbursement or compensation. With the elimination of the JMAA, there are no official duties requiring a per diem; and in the absence of JMAA -related travel expenses, there is nothing to reimburse.

No. 24-60371 (Nov. 19, 2024). Accordingly, the Court dismissed the case because the plaintiffs lacked individual standing, as their injuries were “institutional” and not personal.

Quoted in a recent American Prospect article, I muse that the New York AG probably won’t be headed down this way to sue the Trump Administration – link  here.

Contractual ambiguity is easily the #1 issue, in commercial cases, where thoughtful judges disagree. An example appears in Barrios v. Centaur LLC, where both the district court and the Fifth Circuit concluded that a maritime contract had two conflicting “escape” (i.e., “other insurance”) clauses. The district court found ambiguity, but the Fifth Circuit applied a Louisiana rule that “when faced with two escape clauses threatening coverage, courts must find them ‘mutually repugnant’ and make both policies liable for the claim” on a pro rata basis. No. 23-30892 (Nov. 15, 2024).

Texas Tribune v. Caldwell County affirms the right of public (and with it, pres) access to pretrial bail hearings, noting, inter alia:

Public access to bail hearings helps ensure, for example, that courts act fairly and justly in setting bail.46 When courts hold private proceedings, “[t]hey can . . . avoid criticism and proceed informally and less carefully.” Allowing public access encourages adequate preparation and, in turn, precision by the court. These assurances lead to “enhance[d] public confidence in the process and result” of the justice system.

The opinion also provides a sleek example of the “citational footnote” writing style that I believe significantly enhances readability. No. 24-50135 (Nov. 15, 2024).

A recent en banc vote produced an unusual 9-9 tie (and thus, affirmance of the panel opinion) because a senior judge sat on the relevant panel:

The majority opinion in National Center for Public Policy Research v. SEC found that a challenge to an SEC rule about the contents of proxy ballots was not justiciable, noting, inter alia:

     “[C]onsider the chain of assumptions the Center’s theory requires. First, we must anticipate that third-party companies uninvolved in this litigation will choose to exclude the Center’s measure in their proxy materials. We must do so mindful that many companies have since opted to include the Center’s measure without SEC intervention.   

       Next, we must assume the same third-party companies will base their exclusion decision on the same grounds as Kroger and seek SEC staff advice. No matter that at least thirteen independent reasons exist for excluding proxy statements, or that the SEC staff is under no obligation to offer its advice if requested.

     We must further assume that the SEC will issue the same no-action letter sent to Kroger, disregarding that staff advice is limited to each ‘particular instance.’ If SEC staff issues the letter, we must also infer that the third-party companies will ultimately follow through with their initial decision and exclude the proposal from their proxy materials.”

No. 23-60230 (Nov. 14, 2024) (emphasis added); accord FDA v. Alliance or Hippocractic Medicine, 144 S. Ct. 1540 (2024) (“The doctors have not shown that FDA’s actions likely will cause them any injury in fact. The asserted causal link is simply too speculative or too attenuated to support Article III standing.”). A dissent characterized thematter as one capable of repetition yet evading review.

Last Friday I received the inaugural “Lawyer’s Lawyer” award from the Dallas Bar Association, described by President Bill Mateja as a lawyer who “eats, breathes, and sleeps law” in comment and public thought about it. (Next to me is Courtney Marcus, filling in for Glenn West, who also received it.) Many thanks to Bill and the DBA, and to readers of this blog: longtime or new; enthusiastic or not!

Classically, judicial opinions consist of dicta and holding; the process of distinguishing the two and applying the correct rule of law in a specific case is the essence of the common-law method. A variant on that classical model sometimes arises in cases on remand from the U.S. Supreme Court, when the panel discusses that Court’s mandate; an example of which appears in the remand of NetChoice LLC v. Paxton, No. 21-51178 (Nov. 7, 2024).

The appellants in Legacy Recovery Servcs, LLC v. City of Monroe tried mightily, but was unable to persuade the Fifth Circuit that it had appellate jurisdiction over an order that partially granted and denied motions to dismiss.

The appellants argued that the ruling was an appelable collateral order. The Court saw otherwise, holding that the order did not “conclusively determine the disputed question” because it dismissed some claims while retaining others. Exercising jurisdiction over such an order risked encouraging piecemeal appeals that would require the Court to review the same intertwined claims multiple times.

Also, the issues resolved by the district court were not “completely separate from the merits of the action.” The dismissed and retained claims were based on the same statutes, and thus interwoven with the issues left  before the district court.

Lastly, the Court held that the order was not “effectively unreviewable on appeal from a final judgment,” pointing out that if the appellants’ concerns were valid, the Court could vacate the judgment and order a new trial after final judgment. No. 24-30211 (Nov. 6, 2024).

A 2-1 panel decision about an issue of federal-officer removal produced a close vote against en banc review, broken down as follows:

Even the most enthusiastic perspectives about federal-court jurisdiction have limits, as shown by Lowery v. Texas A&M Univ., a discrimination case filed by a college professor:

“Professor Lowery says that he is ‘able and ready’ to apply for lateral positions at [Texas A&M] University. But he never submitted an application to substantiate his interest. That fact is fatal in this case because there is little evidence that submitting a job application would be a futile gesture.”

No. 23-20481 (Oct. 30, 2024) (emphasis added).

Repub. Nat’l Comm. v. Wetzel  held that a Mississippi statute, allowing absentee ballots to be received up to five days after Election Day, is preempted by federal law, which mandates that all ballots must be received by Election Day. The court emphasized that the term “Election Day” refers to a singular day. Slate’s Mark Stern offers some provocative commentary about the potential impact – or lack thereof – of this ruling. No. 24-60395, Oct. 25, 2024.

In a per curiam opinion joined by eight judges, the Fifth Circuit held in Tesla v. NLRB that an NLRB decision about unfair labor practices by Tesla would be vacated and remanded for further proceedings:

We hold that Musk’s tweets are constitutionally protected speech and do not fall into the categories of unprotected communication like obscenity and perjury. And the Board does not dispute the general rule that it (like every other part of the Government) is powerless to delete protected speech.

But nine other judges didn’t join that opinion. As detailed below, Judge Haynes concurred in the judgment only, and eight judges joined a dissent. So what the NLRB is supposed to do on remand is not entirely clear.

Crosswell v. Rodriguez involved the sufficiency of a RICO pleading. The Fifth Circuit emphasized a RICO enterprise “must exist for purposes other than just to commit predicate acts,” which means that  “accusing a group of defendants comprising one natural person and a collection of legal fictions as undertaking a set of acts together, without providing any detail as to how they acted together, fails to provide a factual basis from which to plausibly infer the connected structure of an association.”

Here, while the plaintiffs’ allegations described a stand-alone set of events, the Court held that no allegations plausibly supported the theory that these transactions were part of a repeated and continuing scheme involving the defendants. No. 23-20535, Oct. 17, 2024.

In X Corp. v. Media Matters for Am., the Fifth Circuit granted a stay pending appeal of a a district court’s discovery order compelling Media Matters to disclose its donor information, citing First Amendment concerns.

The Court emphasized the loss of First Amendment freedoms, even for minimal periods, constitutes irreparable injury, and that the public interest is better served by avoiding the risk of a chilling effect on association, as “First Amendment freedoms need breathing space to survive.” The Court also noted the breadth of the discovery requests, proportionate to the needs of the case, and the risk that disclosure of the requested information could lead to harassment or intimidation of Media Matters and its donors. No. 24-10900, Oct. 20, 2024.

In Ultra Deep Picasso Pte. Ltd. v. Dynamic Indus., the Fifth Circuit addressed the critical issue of where a bank account can be garnished in an “in rem” proceeding grounded in admiralty law. Applying the general principle that the property must be found within the district where the trial court is located, the Fifth Circuit concluded that a bank account is located where its funds can be withdrawn — a standard that requires the physical presence of the bank or its branches within the district.

The court rejected the argument that it’s enough to have jurisdiction in the district over the garnishee bank. In rem jurisdiction “rests on the attaching court’s jurisdiction over both the garnishee and the property to be attached.” Because the garnishee bank didn’t have a branch in the district, but only a “representative office” with limited authority, the garnishment failed. No. 23-20357, Oct. 18, 2024.

Last week I touched on one significant copyright holding from UMG Recordings v. Grande Communications Networks. In that case, the Fifth Circuit also addressed the calculation of statutory damages under the Copyright Act.

Specifically, the Court held that statutory damages should be awarded per compilation (e.g., an album) rather than per individual work within the compilation. The court emphasized that the plain language of the Copyright Act mandates that “all the parts of a compilation or derivative work constitute one work” for the purposes of statutory damages.

This conclusion means that when multiple songs from the same album are infringed, the copyright owner is entitled to only one statutory damage award for the entire album, not separate awards for each song. The Court rejected the district court’s approach, which allowed separate statutory damages for each individual song. In so doing, the Fifth Circuit noted that many of the works in question were registered as compilations, with certificates of registration indicating notations such as “collective work” or “compilation of sound recordings.” No. 23-50162, Oct. 9, 2024.

In UMG Recordings v. Grande Communications Networks, the Fifth Circuit held that an internet service provider materially contributed to copyright infringement, by continuing to provide internet services to known infringing subscribers, without taking basic measures to prevent further infringement. As potential safety measures, the Court noted that the ISP could have terminated the accounts of repeat infringers (a measure that Grande had previously employed) or required infringing subscribers to contact the company to maintain their services No. 23-50162, Oct. 9, 2024.

In La Union del Pueblo Entero v. Abbott, the Fifth Circuit stayed an injunction against a Texas election law, emphasizing that the injunction was issued just three weeks before voting was set to begin–and after Texas had already started issuing mail-in ballots for the 2024 general election.  A concurrence focused solely on the issue of timing and did not address the merits issues that the panel majority also reviewed. No. 24-50783, Oct. 15, 2024.

The 2008 financial crisis produced a bumper crop of Fifth Circut opinions about basic issues involving home loans, because diversity jurisdiction drove much of that litigation into the federal courts. While (thankfully) there are far fewer cases about those issues now, the Fifth Circuit still writes in that important area, most recently in Couch v. Bank of New York Mellon, holding:

• Clock for foreclosure. “The Couches contend that [CPRC] § 16.025(a) and (b) require mortgagees to file suit and sell within four years to preserve the lien. Texas courts disagree. Section 16.035(a) ‘does not require that the actual foreclosure occur within the four-year limitation period, but rather, requires only that the party seeking foreclosure “bring suit … not later than four years after the day the cause of action accrues.”‘”
• Clock for adverse possession. “[T]he adverse possession clock did not start until the Bank acquired the property at the constable’s sale. The Couches have not adversely possessed the property for a sufficient period of time under any of the potentially applicable periods.”

No. 24-10297 (Oct. 11, 2024, unpublished).

The Fifth Circuit said “enough” as to a district court’s aggressive oversight of the Texas foster-care system, vacating a contempt order and requiring reassignment of the case on remand. Capturing the flavor of the opinion, towards the end of the section on reassignment, the Court said:

However, as a general rule of law federal judges are not allowed to become permanent de facto superintendents of major state agencies. Horne v. Flores, 557 U.S. 433, 453, 129 S. Ct. 2579, 2597 (2009) (“[T]he longer an injunction or consent decree stays in place, the greater the risk that it will improperly interfere with a State’s democratic processes.”); United States v. Mississippi, 82 F.4th 387, 400 (5th Cir. 2023) (“Micromanagement, enforced upon threat of contempt, does not reflect the principles of comity” in prison context.). Nor, under the federalist structure created by the Constitution, is it appropriate for federal court intervention to thwart the state’s self-management, where the state is taking strides to eliminate the abuses that led to the original decree. Horne, 557 U.S. at 448, 129 S. Ct. at 2593–94 (“Federalism concerns are heightened” where “a federal court decree has the effect of dictating state . . . budget priorities.”). Nor are federal judges even suited, by training or temperament, to manage institutions, personnel, or the provision of vital state services, even if counselled by monitors.

M.D. v. Abbott, No. 24-40248 (Oct. 11, 2024).

In RSM Prod. Corp. v. Gaz du Cameroun, S.A., the Fifth Circuit reversed the district court’s decision to vacate a revised arbitral award that reduced the damages awarded from $10.5 million to $6.5 million. The Court held that the arbitral tribunal had the authority to correct “computational errors” in its initial award and to determine what constituted such errors under the International Chamber of Commerce Rules, which the parties’ agreements incorporated. Applying the highly deferential standard of review for such issues, the Court held that the tribunal “arguably construed the parties’ contracts” when it issued the corrected award, even if it made a mistake in its interpretation.

The Court rejected RSM’s argument that the tribunal exceeded its powers by reconsidering the merits of RSM’s claims. Distinguishing RSM’s authority, the Court noted that the ICC rules allowed this tribunal to correct any “clerical, computational or typographical error, or any errors of similar nature contained in [the] award.” The Court emphasized that “[t]he potential for … mistakes is the price of agreeing to arbitration” and that “[t]he arbitrator’s construction holds, however good, bad, or ugly.” No. 23-20583, Sept. 19, 2024.

Quoted in a provocative new article in Mother Jones about the Fifth Circuit, I point out that it’s the venue of choice these days for administrative-law disputes.

Hon. Jennifer Walker Elrod has taken office as the new Chief Judge of the Fifth Circuit, succeeding Hon. Priscilla Richman. The Texas Lawbook has a good story on this “changing of the guard” for this critical leadership role. The new Chief tells the Lawbook:

“I believe that we are all in this endeavor together to uphold our Constitution and try to follow the rule of law and this enterprise works best when everyone gets to participate and have their say … And we can learn from each other if we’re all at liberty to engage. … I also believe iron sharpens iron … by learning what others who think differently believe, and what the basis for that belief is, that can help you to better reinforce your view, or perhaps, to change your mind.”

Cure & Assocs., P.C. v. LP Fin., LLC addreses whether nonsignatories to an arbitration agreement can be compelled to arbitrate under state-law equitable estoppel principles. The Fifth Circuit held that these nonsignatories could be compelled, because they  received direct benefits from the contractual relationship between the two signatories. Specifically, the Court noted that one of the nonsignatories was formed specifically to facilitate one signatory’s business with the other, sharing clients, employees, and office space. Under both California and Texas law, a nonsignatory can be compelled to arbitrate if it “deliberately seeks and obtains substantial benefits from the contract” with an arbitration clause. No. 23-40519, Oct. 1, 2024.

If you enjoyed my article in the Cornell Law Review Online earlier this year about the party-presentation principle, hopefully you will also enjoy a new article of mine in the Texas Law Review Online. Examining cases from the 2023-24 Supreme Court term, it considers whether “originalism” and modern economic theory can comfortably coexist.

Dwyer v. United Healthcare Ins. Co., No. 23-50439 (Sept. 19, 2024), vitalizes the technical and often defense-favoring framework of ERISA benefits litigation, challenging virtually all material points–factual and legal–put forward by a plan adminstrator in its handling of claims relating to a serious anorexia case. On the facts, the opinion proceeded as follows, pointing out numerous inconsistencies between what the administrator contended and what the record, in fact, showed:

Unsurprisingly, given all three judges’ discomfort with the Fifth Circuit precedent that dictated the panel holding in Abraham Watkins v. Festeryga, that case will be considered by the en banc court. The issue, as summarized by the panel majority, is this:

Edward Festeryga, an attorney embroiled in a dispute with his former law firm, wants this case heard in federal court and contends we have appellate jurisdiction over the district court’s remand order because waiver is neither an issue of subject-matter jurisdiction nor a defect in removal procedure under 28 U.S.C. § 1447(c). We agree, but our 40-plus-year-old precedent provides otherwise, holding that a waiver-based remand order is jurisdictional under § 1447(c) and thus unappealable under § 1447(d).

While no longer in the academy, the capable Rory Ryan offered this insightful analysis of this case on X.

In TIG Ins. Co. v. Woodsboro Farmers Coop., the Fifth Circuit identified fact issues that precluded summary judgment in an insurance-coverage case.

A key is whether damage to certain grain silos was “property damage” under a CGL policy. The diistrict court concluded that damage was due to defective construction. The Fifth Circuit credited the insured’s evidence that wind and weather caused the silos’ metal parts to degrade, bend, and fatigue. This evidence, including testimony from an inspector who saw the damage, supported the insured’s argument that the damage was not merely cosmetic but a “harmful change in appearance, shape, composition, or some other physical dimension to the claimants’ property.”

The Court also noted a fact issue about whether the damage occurred during the policy period, emphasizing that under Texas law, “occurred means when damage occurred, not when discovery occurred,” making it irrelevant that the damage was first observed after the policy period expired. No. 23-40435, Sept. 20, 2024.

In Favre v. Sharpe, a Hall of Fame NFL player contended that another Hall of Fame player defamed him during a TV broadcast. The Fifth Circuit affirmed the dismissal of the defamation claim, reasoning:

Sharpe’s statements–in response to facts widely reported in Mississippi news and specifically in the just-released Mississippi Today article–could not have been reasonably understood as declaring or implying a provable assertion of facts. His statements are better viewed as strongly stated opinions about the widely reported welfare scandal. 

No. 23-6010 (Sept. 16, 2024).

An old adage cautions that “house guests, like fish, begin to smell after too long.” So too with exotic arugments about jury-trial rights, fueled by the Supreme Court’s vindication of such rights in an SEC enforcement action in SEC v. Jarkesy.

Specifically, in In re Abbott, Texas sought mandamus relief to compel a jury trial in its dispute with the United States about floating obstacles in the Rio Grande, arguing that the U.S.’s claim was analogous to a common-law claim for ejectment. The Fifth Circuit rejected that argument … because it isn’t:

Even if we did agree that this suit concerns competing claims over the rights to “possess” and “exclude” from the Rio Grande, it is no mere garden-variety dispute about “sticks in the bundle of rights that are commonly characterized as property.” … The only appropriate analogy for a [Rivers and Harbors Act] claim that has been presented by the parties is abatement of a public nuisance or  purpesture. As the United States points out, there is a long tradition of equitable suits to clear obstructions upon public highways.

No. 24-50620 (Sept. 20, 2024).

In Keck v. Mix Creative Learning Center, LLC, the Fifth Circuit affirmed summary judgment for art studio that used the plaintiff’s copyrighted artworks (image of dogs) in online art kits for children. The Fifth Circuit found fair use, because the studio’s use of the artwork was transformative and did not harm the market for the plaintiff’s works; as the district court had observed, the studio “drew on Plaintiff’s art not for its inherent expressive value but for what it, accompanied by materials and instruction in art theory and history, could teach students.”  No. 23-20188 (Sept. 18, 2024).