What triggers the right to remove?

In this not-unusual situation, the Fifth Circuit found that a removal based on diversity was timely: In response to special exceptions, [the Strongs] filed an amended petition stating the maximum amount of damages in controversy by specifying that the Strongs sought “monetary relief of $100,000 or less.” Cf. Tex.  R. Civ. P. 169 (requiring the “$100,000 or less” language to allow for expedited actions). The Strongs also sought injunctive relief ordering both a loan modification to prevent further TDCA violation and “the arrearage . . . to be deleted and/or capitalized . . . so that the loan is brought current.” Green Tree did not remove to federal district court until after it received a response to its request for disclosure in which the Strongs explicitly indicated that they were seeking damages in excess of $75,000.” The Court rejected the Strong’s argument that the petition implictly placed the entire property value at issue. Strong v. Green Tree Servicing LLC, No. 16-11346 (Dec. 11, 2017) (unpublished).

When the network administrator goes rogue . . .

“Upset that a coworker had been fired, Thomas[, a network adminstrator,] embarked on a weekend campaign of electronic sabotage.” He was successfully prosecuted under the Computer Fraud and Abuse Act, which criminalizes conduct that “knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer.” Thomas, citing his network administration responsibilities, argued that “because he was authorized to damage the computer when engaging in [certain] routine tasks, any damage he caused while an employee was not ‘without authorization.’” The Fifth Circuit rejected this argument, noting – in addition to obvious practical issues – that the case law Thomas relied on about “authorization” involved liability under other CFAA provisions about computer access, rather than this provision about causing damage. This case is of general interest to civil litigation, both because CFAA violations can create civil liability, and because unfortunate admissions can have significant consequences:

Just a couple weeks after the damage spree, and before the FBI had contacted Thomas, he told the friend whose firing had set this in motion that “he thought he might have broken the law.” Which law, the friend inquired? Thomas’s response: “the Computer Fraud and Abuse Act.”

United States v. Thomas, No. 16-41264 (Dec. 11, 2017).

No, that’s not a federal question

Griffith sued his former employer under state law, referring in the pleading to a charge he filed with the EEOC and its issuance of a right-to-sue notice. Alcon removed based on federal question jurisdiction; the district court accepted the removal and granted summary judgment to the employer. The Fifth Circuit reversed: “Although Griffith indeed referenced his dealings with the EEOC in his complaint, he did not mention Title VII or any similar federal statute. As such, the district court lacked subject-matter jurisdiciton and was not entitled to render judgment in Alcon’s favor.” Griffith v. Alcon Research, No. 17-20290 (Dec. 6, 2017, unpublished).

Good appellate advocacy seminar in 2018 –

DRI’s 2018 Appellate Advocacy Seminar will be held at the Planet Hollywood Resort in Las Vegas from March 14-15, 2018.  This year’s seminar will include valuable insights into effective advocacy (including tips from Bryan Garner), and joint sessions with trial court practitioners.  The seminar promises great networking opportunities with judges, appellate practitioners and trial advocates from across the country. This year’s seminar will be held in conjunction with the Trial Tactics Seminar, and anyone attending the appellate seminar can attend the final day of the Trial Tactics Seminar for no cost. The seminar also coincides with the beginning of the NCAA men’s basketball tournament, a great time to enjoy the excitement of Las Vegas. You can register for the Appellate Seminar here.  Save $100 and get the best hotel rates when you register and book by February 13, 2018.

Scope of CAFA remand review

Johnson v. Real Estate Mortgage Network, Inc. reminds of a technical but important point about the review of remand orders under CAFA in the Fifth Circuit: “Facing our CAFA deadline, we continue to apply [prior preceden’s] suggestion that our jurisdiction to review a CAFA remand order stops at the edge of the CAFA portion of the order,” and does not extend to “every issue decided in the remand order, including federal question jurisdiction.” No. 17-30768 (Nov. 30, 2017).

Notice of appeal reminder –

A premature notice of appeal is certainly better than nothing, but may not be enough, as the Fifth Circuit noted in Johnson v. Real Estate Mortgage Network, Inc.: “Before we address Johnson’s contentions on appeal, we note that Johnson’s notice of appeal from the summary judgment dismissing the claims against some, but not all, of the defendants, was premature. Nevertheless, because the district court could have certified that the summary judgment was appealable, and it subsequently entered a final judgment, the notice of appeal gives us appellate jurisdiction over the summary judgment.  However, because Johnson did not file a notice of appeal from the final judgment, which dismissed his remaining claims against REMNI/Homebridge, we do not have jurisdiction to consider the dismissal of his claims against REMNI/Homebridge.” No. 17-20347 (Dec. 1, 2017, unpublished).

$80 million ticket on the Erie Railway

In City of San Antonio v. Hotels.com, the Fifth Circuit reversed an $84 million judgment for several cities, against online hotel reservation services, relating to the collection of local occupancy taxes. The holding turned entirely on the force of an intermediate Texas appellate opinon under the Erie doctrine. In its reasoning, the Fifth Circuit rejected a number of arguments against following that opinion, including: (1) the scope of the record before the courts; (2) the analytical framework used by the Texas court; and (3) the precise language of the relevant ordinance. The Court was satisfied with the general principles relied upon by the Texas opinion, as well as its resolution of “absurd result” arguments made in both cases. No. 16-50479 (Nov. 29, 2017). The Dallas Morning News has a good summary of the issues and history of this long-running litigation.

Of the common law and “chymistry”

Melton v. Phillips, No. 15-10604 (Nov. 13, 2017), a difficult qualified immunity case that required en banc review to resolve, features a concurrence with the unusual verb “cross-pollinated” to describe a confluence of two lines of authority. That perspective on the development of common law recalls the concept of “vegetation” in early scientific thought, used to describe vigorous and lively growth not just in plant life, but throughout nature. Indeed, no less than Isaac Newton wrote a paper about “Chymystry” titled “On Nature’s Obvious Laws and Processes in Vegetation”:


When not to cross-appeal. UPDATED

In an insurance coverage dispute, the district court granted both sides’ motions for summary judgment as to the meaning of various policy terms. The net result was final judgment for the insurance company. The insured appealed; the insurer cross-appealed, and on that procedural point, the Fifth Circuit held that the cross-appeal was unnecessary, noting:

  • “National Union is conflating the district court’s opinion (i.e., the order) with its judgment. Appellate courts review judgments, not opinions. . . . To the extent that the district court rejected the arguments in National Union’s cross-appeal, ‘an appellee may urge any ground available in support of a judgment even if that ground was . . . rejected by the trial court.'” (citations omitted);
  • The recent case of ART Midwest v. Atlantic Limited Partnership XII,742 F.3d 206 (5th Cir. 2014), in which a party was not allowed to raise certain issues after not taking a cross-appeal, was distinguishable because judgment had actually been entered against that party on those issues. “Here,there is no adverse judgment against National Union, such that it might need to protect its rights—just some adverse reasoning”; and
  • “This is not just formalism. ‘A cross-appeal filed for the sole purpose of advancing additional arguments in support of a judgment is “worse than unnecessary”, because it disrupts the briefing schedule, increases the number (and usually the length) of briefs, and tends to confuse the issues.’ . . . In this case, National Union’s improper cross-appeal resulted in an over-length opposition brief and an additional reply (giving National Union over four thousand words of additional briefing).” (citations omitted)

Cooper Indus. v. Nat’l Union Fire Ins. Co., No. 16-20539 (revised Dec. 11, 2017).

When proving lost profits, don’t be gross.

The Fifth Circuit affirmed a JNOV motion on damages, under Texas law, when the plaintiff proved gross profits rather than net profits. “Its expert witness testified that he used ThermoTek’s gross profit margin—gross sales, less the cost of those goods sold, divided by gross sales—to calculate lost profits. He then stated that he reached his lost-profit totals for the VascuTherm units and wraps by (1) multiplying the average sales ThermoTek made to Wilford each month by the unit sales price and relevant time period, and (2) deducting the cost of the goods sold. But that is the very definition of gross profits. See Black’s Law Dictionary, supra (defining gross profits as “[t]otal sales revenue less the cost of the goods sold, no adjustment being made for additional expenses and taxes”). Motion Medical Technologies v. Thermotek, No. 16-11381 (Nov. 14, 2017).


Copyright preemption of Texas state-law misappropriation claim

“We have twice held that Texas’s unfair competition-by-misappropriation tort does not afford protection qualitatively different from federal copyright law. We do so again here.” Motion Medical Technologies v. Thermotek, No. 16-11381 (Nov. 14, 2017) (citing Ultraflo Corp. v. Pelican Tank Parts, Inc., 945 F.3d 652, 657-59 (5th Cir. 2017) and Alcatel USA, Inc. v. DGI Techs., Inc., 166 F.3d 772, 787-89 (5th Cir. 1999)).

A second look at log construction

The Fifth Circuit recently “walked back” its May opinion in EEOC v. BDO USA, which identified three problems with a privilege log. A revised opinion removed that discussion, in favor of a shorter, more general observation about there being “no presumption that a company’s communications with counsel are privileged.” The new opinion observed: “Given the ‘broad’ and ‘considerable discretion’ district courts have in discovery matters, we will not analyze the privilege logs in the first instance.” EEOC v. BDO USA, No. 16-20314 (revised Nov. 16, 2017).

Should you capitalize “Internet”?

Yes, according to Alexander v. Verizon Wireless Services LLC:

Although many style guides, such as the Chicago Manual of Style, and news sources, such as the Associated Press, no longer instruct writers to capitalize “Internet,” we decline to follow this trend. For many, such as the New York Times, the reason for the change to “internet” is simple: others were doing it, so they thought they should, too.  “Internet,” however, was originally capitalized to distinguish the global network from other internets—short for “inter networks”—which are collections of smaller networks that communicate using the same protocols.  In our view, this still makes the word a proper noun, regardless of how often people refer to other internets. Furthermore, to the extent “decapitalizing [I]nternet is part of a universal linguistic tendency to reduce the amount of effort required to produce and process commonly-used words,” we reject the tasks of striking an additional key or reading over a capital “I” as persuasive reasons to alter a word.

No. 16-31227 n.12 (Nov. 13, 2017) (citations omitted).

Evidence twofer

Two basic reminders about evidence appear in Eaton-Stephens v. Grapevine Colleyville ISD, an employment dispute involving a school counselor:

  1. “Eaton-Stephens also argues she should have received a spoliation inference because her computer’s contents were erased, and that, because the School District’s policy and rules required retention of the contents for several years, the only conclusion was that the action was taken in bad faith. Our cases indicate a violation of a rule or regulation pertaining to document retention is not per se bad faith and Eaton-Stephens cites no authority in support of such a per se bad faith rule.”
  2. “We agree that the district court unduly discredited some of Eaton-Stephens’s deposition testimony as conclusory. ‘A party’s own testimony is often “self-serving,” but we do not exclude it as incompetent for that reason alone.’ Even if self-serving, a party’s own affidavit containing factual assertions based on firsthand knowledge is competent summary judgment evidence sufficient to create a fact issue.”

No. 16-11611 (Nov. 13, 2017, unpublished).

Holder ≠ Holder in due course

PlainsCapital asserted federal jurisdiction over a collection action on two large notes, contending that it would have to establish holder in due course status under federal law to recover (the notes came to PlainsCapital via assignment from the FDIC after a bank failure). The Fifth Circuit disagreed, reversing the district court’s summary judgment for the bank. As to the well-pleaded complaint rule, the Court observed: “PlainsCapital conflates the terms ‘holder’ and ‘holder in due course.’ A ‘holder is ‘the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession. By contrast, a party’s status as a holder ‘in due course’ merely ‘determines the applicable defenses which a defendant . . . ‘ may assert.” PlainsCapital Bank v. Rogers, No. 16-41654 (Oct. 25, 2017).


The statutory interpretation question in United States v. American Commercial Lines was the meaning of the phrase “in connection with.” The Fifth Circuit began with the plain meaning of the word “connection,” which it called “a capacious term, encompassing things that are logically or causally related or simply ‘bound up’ with one another.” Going on to review precedent and the purpose of the statute at hand, the Coourt concluded that “[i]t is, however, not so capacious as to be rendered meaningless. Conduct does not automatically occur ‘in connection with’ a contractual relationship by the mere fact that such a relationship exists.  No. 16-31550 (Nov. 7, 2017) (citation omitted).

“Oh, you meant THAT knowledge . . . “

Griffin v. Hess Corp. involved a summary judgment for the defense on the statute of limitations, based on deposition admissions about the plaintiffs’ knowledge of relevant facts. Their testimony differed in response to the summary judgment motion, and the Fifth Circuit agreed that the different testimony did not raise a sufficient issue of fact: “Appellants’ explanation—that the deposition testimony was only meant to speak of what they knew in the present tense and not to their knowledge prior to the actual filing of the complaint—does not remedy or sufficiently explain the contradiction in light of the repeated questions about the particular date certain events took place concerning their royalty claims accruing from the Property. The deposition questions, as Appellees counsel repeatedly indicated and Appellants affirmed, related to the Property and royalties accruing from the production of oil on the Property.” No. 17-30165 (Nov. 3, 2017, unpublished).

Warranty of longevity ≠ Warranty about battery life.

Wildman sued about a Medtronic device implanted in his back to relieve pain, contending that the device did not last as long as the company warranted. Medtronic argued that this claim was preempted by federal law. The question, then, is whether that warranty claim imposes requirements “different from” those of the FDA – put differently, whether it would “undermine FDA regulation or reinforce it.” The Fifth Circuit found that it was not preempted, reasoning that Medtronic made a warranty of “the longevity of the entire [d]evice,” which “goes beyond what the FDA evaluated in its approval process,” as that procees focused specifically on the testing of batteries. The Court thus reversed a summary judgment for Medtronic and remanded, noting that on remand the district could consider “another argument challenging the plausibility of Wildman’s claim: that he did not allege reliance on the warranty.” Wildman v. Medtronic, Inc., No. 17-50010 (Oct. 31, 2017).

How much is a material issue of fact?

The concept of a “genuine issue of material fact” is largely unquantifiable, but occasionally a case does set a quantitative landmark. In Shirey v. Wal-Mart Stores Texas, LLC, the Fifth Circuit addressed a personal injury claim asserting that a Wal-Mart store had constructive notice of a grape on the floor, holding:

Photographic and video evidence demonstrate that the grape was, as the district court noted, almost invisible on the off-white floor. The evidence also fails to establish that any Wal-Mart employee was in proximity to the grape for a sufficient period of time. The few seconds during which the employee passed by the grape did not provide an objectively reasonable opportunity for him to see it, notwithstanding his employer’s policy that he perform visual “sweeps” for hazards. Under these circumstances, the seventeen minutes during which the inconspicuous grape was on the floor did not afford Wal-Mart a reasonable time to discover and remove the hazard.

No. 17-20298 (Oct. 30, 2017, unpublished) (emphasis added).