Magistrate judges, remand rulings, and appellate review

articleiiiA 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).

ERISA fact question?

ERISA-simplifiedIn 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).

 

Of Briefs With Imaginary Dialogue

memenoYesterday’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.)

Assignment of error

assignment clipartIn 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 No. 15-50342 (Jan. 29, 2016, unpublished).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)).

No appeal of remand order

containersUnderwood 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.

Put in the good word for 600Camp

abajournal_weblogo_2015The 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.

Yes, you may not have flood insurance.

waveThe 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).

How to waive a jury demand

seventh-amendment-est-1791-sticker-p217898255011801286b2o35-400Two 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).

How to Interplead — UPDATED

tug-of-warIn 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.'”

Come see some good CLE

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.

FCA case remanded a second time, district judge reassigned.

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.”