A magistrate judge ordered remand to state court in Davidson v. Georgia-Pacific. The Fifth Circuit concluded that because “a remand order is dispositive insofar as proceedings in the federal court are concerned,” it is “the functional equivalent of an order of dismissal.” Therefore, a magistrate judge could not make a final ruling on a motion to remand. In so holding, the Court “join[s] the uniform view of the courts of appeals that have considered this question[.]” No. 14-30925 (April 19, 2016).
In Burell v. Prudential Ins. Co., the Fifth Circuit addressed one of the many ERISA summary judgment cases in which it reviews a plan administrator’s work for abuse of discretion – or, in the somewhat cryptic language of ERISA: “our de novo review of [the] summary judgment ruling will also apply the abuse of discretion standard.” The panel affirmed over a dissent, which is not typical in such cases. It noted disagreement among the doctors who reviewed the claim, as well as allegations that the administrator did not follow its own review procedures, and would have found a fact issue for trial based on those matters. No. 15-50035 (April 11, 2016).
Yesterday’s “Above The Law” blog offers this entertaining exchange between a recent Fifth Circuit petition for rehearing — written in part as an imaginary exchange between lawyer and client about the rehearing process — and the Fifth Circuit’s response: rejection by the panel in a short opinion that was also written as an exchange of dialogue. (Thanks to 600Camp friend Cynthia Halatyn for sending along the link.)
In Banco Popular v. Kanning, a dispute over entitlement to life insurance proceeds produced two reminders about important, but not often-litigated, principles in business law. No. 15-50342 (Jan. 29, 2016, unpublished). First, an argument that a purported assignment required further actions to become effective failed when the document in question unambiguously said “hereby assign.” The opinion reviews other language in other cases that obscured the assignor’s intent. Second, insurance policy proceeds — while obviously monetary in nature — are sufficiently specific to support an action for conversion (applying Paschal v. Great Western Drilling, 215 S.W.3d 437 (Tex. App.–Eastland 2006, pet. denied)).
Underwood Cotton sued Clark Freight Lines, seeking a declaratory judgment about alleged overcharges on invoices for shipping containers. Clark removed the case on the basis of complete preemption, and counterclaimed for payment of the invoices. The district court dismissed the counterclaim and remanded, finding that federal jurisdiction had not been established over the declaratory judgment or the “converse breach of contract action” brought by Clark. The Fifth Circuit dismissed the resulting appeal, finding: “[T]he dismissal of the counterclaims did not precede the remand in logic and fact. Dismissing the counterclaims did not deprive the court of subject-matter jurisdiction; the district court ruled it never had jurisdiction to begin with.” Underwood Cotton Co. v. Clark Freight Lines, Inc., No. 14-11327 (Sept. 28, 2015, unpublished). The Court noted that the counterclaims could proceed in state court notwithstanding the district court’s jurisdictional ruling.
The ABA Journal sponsors a “Blawg 100” list that recognizes legal blogs. Unlike the various top lawyer lists, the ABA encourages campaigning: (“Bloggers, by all means tell your readers about Blawg 100 Amici and invite them to send us messages on behalf of your blog.”) So if you enjoy 600Camp (or its sister blog, 600 Commerce about the Dallas Court of Appeals), please click here and fill out the ABA’s short form. Shouldn’t take but a minute, and much appreciated.
The Spongs bought property on Galveston Island and obtained flood insurance under the National Flood Insurance Program. Unfortunately, their property was located in an “coastal barrier resources system” area, ineligible for flood insurance; even more unfortunately, Hurricane Ike completely swept away everything on the property. The record showed confusion about the property address and the records kept by FEMA and the Fish and Wildlife Service. On an interlocutory appeal, the Fifth Circuit held that: (1) federal law did not preempt the Spongs’ claims related to “procurement,” as opposed to “claims handling,” but (2) “[i]n determining whether the property was within the CBRS and therefore eligible for a federal flood insurance policy, [the insurer] was acting as the representative of the Government, not the Spongs”; accordingly, the Spongs could not establish reasonable reliance. Spong v. Fidelity Nat’l Prop. & Cas. Ins. Co., No. 13-41317 (May 22, 2015).
Two principles – somewhat inconsistent – govern whether a court should accept an untimely request for jury trial. First, “‘because the seventh amendment confers a fundamental right,'” a court “typically ‘should grant a motion for jury trial . . . in the absence of strong and compelling reasons to the contrary.'” Second, “it is not an abuse of discretion to deny an untimely motion for a jury trial ‘when the failure to make a timely jury demand results form mere inadvertence on the part of the moving party.'” In BPRE, LP v. RML Waxahachie Dodge, LLC, under the operative scheduling order, the plaintiff had to make a request for a pretrial conference by January 31, 2010. It did not do so until February 16, and did not file a separate brief about the right to jury trial until April 12. The Fifth Circuit found no abuse of discretion in the trial court’s conclusion that this was “mere inadvertence,” and affirmed the finding of waiver. No. 14-50339 (April 7, 2015, unpublished).
In a remarkably tangled construction dispute, the property owner interpleaded roughly $260,000, after a dispute arose between the general contractor and a sub. One of the interpleaded parties argued that the owner “faces only separate obligations,” augmented by the fact that the Mississippi statute relied upon the subcontractor to freeze the funds was declared unconstitutional. Auto Parts Manufacturing Mississippi, Inc. v. King Construction of Houston, No. 14-60217 (May 8, 2015). The Fifth Circuit disagreed: “The first stage of interpleader only is concerned with whether multiple claims have been asserted, or may be asserted, against a disinterested stakeholder, not whether those claims have merit.” The Court reminded that “interpleader jurisdiction is determined at the time the interpleader complaint is filed . . . ‘and subsequent events do not divest the court of jurisdiction once properly acquired.'”
I am speaking to the Appellate Section of the Dallas Bar Association, at the Belo Mansion in downtown Dallas, at noon on Thursday March 19, with a Fifth Circuit update. The official title is “Horses, Whooping Cranes, and Eagle Feathers: the Fifth Circuit in 2014.” Here is a copy of the PowerPoint for the presentation.
I just wrote an article in the most recent Appellate Advocate – the publication of the Texas State Bar Appellate Section – about the key recent cases from the Fifth Circuit about jury charge error. I hope you enjoy it and find it useful in your practice!
In 2012, the Fifth Circuit remanded a False Claims Act case with the direction: “The district court should determine whether the public disclosures identified in the motion for summary judgment reveal either (i) that Shell was deducting gathering expenses prohibited by program regulations, or (ii) that this type of fraud was so pervasive in the industry that the company’s scheme, as alleged, would have been easily identified.” Little v. Shell Exploration, 690 F.3d 282 (5th Cir. 2012). On remand, the district court again granted summary judgment for the defense, and a displeased Fifth Circuit reversed. Little v. Shell Exploration II, No. 14-20156 (Feb. 23, 2015, unpublished).
The Court found: “Not only did the district court fail to follow these explicit instructions, but the analysis set out in its short opinion is so broad, conclusory, and unsupported by the summary judgment record that we are compelled to conclude it did not comply with our instructions.” On the merits, the Court held that “the district court erred with respect to every category of supposed public disclosures.” The Court went on to order reassignment to a different district judge on remand, concluding: ” Facing a lengthy and detailed summary judgment record, the district judge issued a five-page opinion with few
citations to either record evidence or relevant legal authority—not surprising given that neither the summary judgment evidence nor the law support the conclusions he reached.”
1. I am speaking at the Dallas Bar Appellate Section meeting on March 19 at the Belo Mansion, with an update on recent Fifth Circuit opinions of general interest.
2. This year’s Super Lawyers nomination deadline is Wednesday, February 18 (two days from now). Take a few minutes to support the publication and your colleagues; the nomination form is here.
- This contract language binds the parties to an agreed-upon postjudgment interest rate: “All past due interest and/or principal shall bear interest from maturity until paid, both before and after judgment, at the rate of 9% per annum.” The language “clearly, unambiguously, and unequivocally” refers to postjudgment interest.
- This language does not: “Invoices not paid within the stated terms will be charged 1.5% per month. . . . All freight, demurrage and other charges shall be subject to an interest charge of 1-1/2% per month beginning on the first day after the due date of invoice.”
Leftover turkey? Have no fear — continue the celebration New Orleans style with Emeril Lagasse’s recipe for Turkey Bone Gumbo. Happy Thanksgiving from 600Camp!
World Wrestling Entertainment sought ex parte seizure and temporary restraining orders, against unnamed defendants selling fake WWE merchandise at live events, under the Trademark Counterfeiting Act. The district judge denied relief, noting concerns about WWE’s ability to prove a likelihood of success against an unknown defendant. The Fifth Circuit (who reviewed the case because the district court certified the matter for interlocutory appeal) took a different view, noting: “WWE does not license third parties to sell merchandise at live events . . . The resulting confined universe of authorized sellers of WWE merchandise necessarily ‘identifies’ any non-WWE seller as a counterfeiter.” The opinion also observed that “the very nature of the ‘fly-by-night’ bootlegging industry” involves “counterfeiters who, upon detection and notice of suit, disappear without a trace and hide or destroy evidence, only to reappear later at the next WWE event down the road.” World Wrestling Entertainment, Inc. v. Unidentified Parties, No. 14-30489 (Nov. 4, 2014).
Four times in the last two months, 600Camp has won recognition from Texas Bar Today for a “Top 10 Post of the Week” among Texas law blogs, “based on subject matter, writing style, headline, and imagery.” The posts were The Regulation, My Friend, is Blowing in the Wind (Sept. 16), My Five Tips for Good Legal Writing (Oct. 9), Arbitration Here, There, or Nowhere (Oct. 20), and How to Notice Mississippi (Oct. 28). Thanks for your support!
While preparing a CLE for our associates, I drafted and posted my five tips for good legal writing, along with comments and examples. The tips are:
- Avoid needless words.
- Use shorter words.
- Use shorter sentences.
- Avoid passive voice.
- There is no good writing. Only good re-writing.
I hope you have a chance to read the post, along with some of the linked examples, and that they are of use to you in your work.
The Fifth Circuit returned to the tension between excess and primary carriers in RSUI Indemnity Co. v. American States Ins. Co., a bad faith case under Louisiana law. After a review of the cases on the issue, the Court held “that under the circumstances of this case, where an excess carrier alleges that a primary insurer in bad faith breached its duty to defend a common insured properly and caused exposure of the insured to an increase in the settlement value of the case above the primary policy limit, which the excess insurer must then satisfy on the insured’s behalf, the excess insurer has a subrogated cause of action against the primary insurer for any payment above what it otherwise would have been required to pay.” No. 14-30033 (Sept. 25, 2014).
600Camp celebrates its birthday today, and as is its custom, proposes a New Orleans cocktail for the occasion. Please consider the “Touchdown Jesus Bloody Mary” as made by the Bourbon O bar in the French Quarter, one of the leading craft cocktail establishments in NOLA these days.
McAllen Grace Brethren Church v. Salazar presents a fascinating conflict between Native American religious practice and the preservation of endangered eagle species. No. 13-40326 (Aug. 20, 2014) Robert Soto, a member of the Lipan Apache Tribe, sought to use eagle feathers in a tribal religious ritual. All parties agreed that his beliefs were sincere and that the lack of the feathers would substantially burden his ministry. The Lipan Apaches, while recognized by Texas authorities since the 1838 Live Oak Treaty between the Tribe and the Republic of Texas, are not a “federally recognized tribe” as understood by the Interior Department. Accordingly, under the Department’s regulations that implement various statutes about the protection of eagles, he was not entitled to the feathers.
Assuming that the Department’s stated goals — eagle protection and protection of federally-recognized tribes — served compelling interests, the Fifth Circuit held that the record did not show that the regulations used the least-restrictive means to advance those interests. The Court found the Department’s evidence of harm to be inconclusive and subject to more than one interpretation, and also found inadequate consideration of potential alternative approaches. Acknowledging that other courts have accepted similar arguments by the Department, the Court observed: “Soto does not seek to make the practice of his religion ‘easier,’ he seeks to avoid roadblocks of the government’s own making which have made the practice of his religion not just ‘not easier’” but impossible.” Accordingly, it reversed a summary judgment for the Department and remanded.
A little-known but powerful part of Fed. R. Civ. P. 41(b) provides: “[I]f the plaintiff previously dismissed any federal- or state-court action based on or including the same claim, a notice of dismissal operates as an adjudication on the merits.” The Fifth Circuit affirmed a dismissal under this rule in Cabot Golf CL-PP 1, LLC v. Nixon Peabody, No. 13-40912 (July 7, 2014, unpublished). It began by noting that, in this context, the distinction between Rule 12 and Rule 56 was immaterial, where “the material facts are undisputed, and we address a pure question of law.” On the merits, Plaintiff had filed a state lawsuit, filed a federal lawsuit, dismissed the state action, and then dismissed the federal case with a unilateral notice. Plaintiff argued that the 2-dismissal rule “should apply only to serial litigation (i.e., suits which are filed after the earlier suits were dismissed), not to parallel/tandem litigation as in this case (i.e., suits which were already pending when the earlier suits were dismisssed).” The Court rejected that argument as unsupported by case law or the plain terms of the Rule.