An insured disputed whether he had claimed ownership of a particular piece of property in a conversation with an insurance agent, Specifically, while testifying in his deposition that he did not remember the specific questions asked, the conversation did not last very long – implying that the agent simply assumed his ownership of the propertuy. “[H]owever, n both his answer to State Farm’s complaint and his response to State Farm’s request for admission, [the insured] admitted to telling the agent who took his insurance application that he was the owner of the property and to stating as much in his application. The district court concluded that these facts were judicially admitted, and therefore rejected Appellants’ argument as an impermissible ‘attempt to create a dispute around a material fact already admitted.’” State Farm v. Flowers, No. 16-60310 (April 26, 2017).
Foremost Insurance declined to pay a claim made by Charles Pendleton about the destruction in a fire of his 1956 Mercedes 190SL (an example of which appears to the right), arguing that he set the fire. A jury agreed and the Fifth Circuit affirmed. One of Pendleton’s grounds was that the district judge exceeded the scope of Fed. R. Evid. 404(b) by allowing evidence about other “similar accidents surrounded by similar circumstances regarding insurance” involving Pendleton. The Court found no harm as “ample evidence” supported the jury’s verdict in favor of Foremost, including the police investigation of the accident scene, further review of the accident by a forensic fire investigator and a mechanic/accident reconstructionist, and evidence about ownership of the other vehicle. Foremost Ins. Co. v. Pendleton, No. 16-60240 (Jan. 13, 2017, unpublished).
The unsuccessful plaintiff in Dawson v. RockTenn Services, Inc. sued because of injuries he suffered while delivering sulfuric acid to a paper mill. In yet another opinion that endorses careful recordkeeping, the Fifth Circuit affirmed judgment for the defendants: “Under Rock-Tenn’s operating procedures, Martin Transport’s drivers were required to, and apparently did, check that the pressure-release line was ‘free from defects and
void of other materials’ prior to each delivery. Martin Transport’s drivers delivered acid to the mill at least daily, often twice daily, without ever apparently notifying Rock-Tenn of any defect in the pressure-release line. In the absence of any countervailing evidence to suggest that a reasonable person in Rock-Tenn’s position would have undertaken further inspection or maintenance of the pressure-release line, there is no basis for imputing RockTenn with constructive knowledge of an alleged defect in that line.” No. 16-30112 (Dec. 27, 2016, unpublished).
Robert dePerrodil successfully sued for the injuries he suffered when a wave hit the boat he was on. He recovered damages based upon his plan to work until age 75; the defendant argued that the “court erred by using the plaintiff’s stated retirement goal, rather than the BLS average.” The Fifth Circuit affirmed, noting that dePerrodil had a “‘very reasonable’ goal, considering his medical history, work history, and future medical prognosis,” distinguishing other cases in the area that turned on more vague testimony. Perrodil v. Bozovic Marine, Inc., No. 16-30009 (Nov. 17, 2016, unpublished).
Graves v. Colvin provides an exceptionally clear illustration of harmless error:
- Graves challenged the Social Security Administration’s determination that she was not disabled.
- A regulation governing ALJ hearings on such matters provides: “Occupational evidence provided by a VE or VS [vocational expert or vocational specialist] generally should be consistent with the occupational information supplied by the DOT [“Dictionary of Occupational Titles”] . . . At the hearings level, as part of the adjudicator’s duty to fully develop the record, the adjudicator will inquire, on the record, as to whether or not there is such consistency.”
- Graves lost, and argued in court that the ALJ failed to ask this required question.
- But — “‘Procedural perfection in administrative proceedings is not required’ as long as ‘the substantial rights of a party have not been affected.’ Graves does not even attempt to show that the vocational expert’s testimony was actually inconsistent with the DOT. Nor has she otherwise demonstrated prejudice. Hence, the ALJ’s procedural error was harmless and does not warrant reversal.”
No. 16-10340 (Sept. 21, 2016).
In response to a summary judgment motion in a suit for unpaid overtime, plaintiff Garcia offered affidavit testimony that he “was told” certain favorable salary information. The record was unclear as to who told him that information. On appeal from an adverse ruling, the Court noted: “Garcia first argues that the district court erred by discounting, as hearsay, Garcia’s statement in his affidavit about what he was ‘told,’ because ‘taking the evidence in the light most favorable to Garcia, a party-opponent told Garcia this information.’ However, courts are not required to view evidence presented at summary judgment in the light most favorable to the nonmoving party on the question of admissibility; rather, ‘the content of summary judgment evidence must be generally admissible,’ and ‘[i]t is black-letter law that hearsay evidence cannot be considered on summary judgment’ for the truth of the matter asserted.” Garcia v. U Pull It Auto Truck Salvage, Inc., No. 16-20257 (Sept. 15, 2016, unpublished).
Carlson alleged injuries from the ProNeuroLight, an infrared therapy device. At trial, the defendants called a chiropractor with some experience using the device. The Fifth Circuit expressed skepticism about his qualifications, noting: “While he does make diagnoses and orders tests as part of his chiropractic and alternative medicine practice, [his] qualifications do not align with or support his challenged medical causation testimony.” The Court did not rule on that basis, however, instead finding that “a district court must . . . perform its gatekeeping function by performing some type of Daubert inquiry and by making findings about the witness’s qualifications to give expert testimony.” Here, admitting the chiropractor’s testimony without taking those steps was an abuse of discretion. The Court found harm, noting that he was the sole defense witness, that his testimony was cited in closing, and that the defendants won. Accordingly, it reversed and remanded. Carlson v. Bioremedic Therapeutic Systems, Inc., No. 14-20691 (May 16, 2016).
The plaintiff in Stagliano v. Cincinnati Ins. Co. submitted this expert affidavit to establish that alleged hail damage occurred within the insurance policy period. No. 15-10137 (Dec. 11, 2015, unpublished). The affidavit did not succeed, as the Fifth Circuit found it “was little more that an allusion to his credentials, a recitation of the hail damage observed, and a conclusory, ‘subjective opinion’ that the damage resulted from a hail storm within the policy period.” Footnote 2 reviews a “perceived . . . tension between the admissibility requirements for expert testimony and the burdens at summary judgment when expert affidavits are utilized” in a past opinion of the Court.
Treaty Energy sued for its damages after an involuntary bankruptcy petition against it was dismissed. One of its claims sought damages for losses in connection with attempts to sell its restricted stock during that period. The Fifth Circuit affirmed summary judgment for the defendants, noting: (1) “Though the sales price of restricted shares did fluctuate, it averaged 0.5¢ immediately before, during, and after the pendency of the involuntary petition, and (2) the affiant about an alleged plan to sell restricted shares at a substantial discount lacked personal knowledge, claiming only that he “did assist in the process when requested, which included gathering information when given direct instructions by his superiors.” Treaty Energy Corp. v. Hallin, No. 15-30113 (Oct. 27, 2015, unpublished).
Guzman sued Celadon Trucking for personal injuries. On May 9, 2011, Celadon’s counsel asked him to undergo an independent medical exam. On May 27, Guzman said in his deposition that he intended to undergo back surgery. Celadon later contended that his surgery constituted spoliation of evidence, and requested an adverse jury instruction. The Fifth Circuit affirmed its denial, noting: “After [Celadon’s counsel] received this disclosure in the deposition, they made no request to be informed of his surgery date, nor did they ask that he delay surgery pending his examination. Only after the examination was completed did [they] assert that the surgery had meaningfully altered evidence. While the timing of Guzman’s surgery may seem strange, there is no evidence to suggest that he acted in a manner intended to deceive [Celadon] or that he undertook the surgery with the intent of destroying or altering evidence.” Guzman v. Jones, No. 15-40007 (Oct. 22, 2015).
Myers slipped in the shower while working aboard a drilling rig in the Gulf of Mexico. In an echo of Blanton v. Newton Associates (a recent employment cases that turned on a prompt investigation into the facts), the rig operator quickly obtained a statement from Myers that said: “When getting out of shower, my shower shoe on left foot broke causing my left foot to slip and twist and resulted in falling out of shower.” When Myers took an inconsistent position in trial (arguing that he fell because of inadequate rails and mats), this statement was key to affirmance of a defense judgment. The Fifth Circuit also rejected an argument about the trial court’s review of the evidence: “Myers does not allege that the court did not see the flip flops; instead, he appears to object to the court’s failure to inspect them more closely. . . . When physical evidence is introduced at a bench trial, neither caselaw nor common sense establishes a minimum distance the judge must be from that evidence before the judge’s obligation to consider the evidence is satisfied.” Myers v. Hercules Offshore Services, No. 15-30020 (Sept. 25, 2015, unpublished).
- While a statement by a purported agent may not be hearsay, it is not admissible to establish “the existence or scope” of agency; and
- Correspondence that was not specifically directed to the plaintiffs does not establish agency by estoppel.
Sealed Appellant v. Sealed Appellee, No. 14-20204 (Aug. 17, 2015, unpublished).
The unsuccessful plaintiffs in Blythe v. Bumbo International appealed the dismissal of their products liability claim about a Bumbo baby seat (right). No. 14-40387 (July 27, 2015, unpublished). The Fifth Circuit, affirmed, holding on two key evidentiary issues:
1. “The district court did not abuse its discretion in excluding the instructions on Bumbo’s website [under Fed. R. Evid. 407.] . . . [Plaintiffs’ attempt to introduce the website instructions for the purpose of proving a design defect ‘under the guise’ of claiming they are admissible under the impeachment exception.”
2. Evidence about prior product recalls and related investigations was inadmissible, as subsequent remedial measures. Examining the “subject matter, underlying purpose, and relevance” of the communications about safety harnesses, the Court noted that none involved the use of a Bumbo on an elevated surface as the plaintiffs had done, contrary to product warnings.
After the EEOC sent two inconsistent letters about a claimant’s case – one in June, and one in July – a confusing limitations problem arose. The Fifth Circuit found that equitable tolling applied and prevented a bar to filing suit. It agreed with the district court that testimony about what the EEOC told counsel on the phone was inadmissible for the truth of the matter asserted, but disagreed that it was completely inadmissible — when offered to prove why counsel acted as he did, the conversation was not offered for a hearsay purpose. The Court also noted that counsel, and his client, had proceeded diligently throughout the matter, noting: “Th[e] desire to have an EEOC letter with all the t’s crossed and i’s dotted is a sign of diligence rather than dawdling.” Alvarado v. Mine Service, Ltd., No. 14-50668 (July 30, 2015, unpublished).
To oppose a summary judgment motion in a mortgage servicing case, Plaintiffs sought to introduce two documents: (1) “a printoff from the HOPE Loan Portal, an online log maintained by Impact [a consultant hired by Plainitffs] to catalogue any updates with the [Plaintiffs’] loan-modification application,” and (2) a handwritten call log seemingly created by Impact employees as they contacted BOA for updates by telephone. The Fifth Circuit affirmed their exclusion in Thompson v. Bank of America, N.A., No. 14-10560 (April 21, 2015).
Noting that “[i]n the case of an exhibit purported to represent an electronic source, such as a website or chat logs, testimony by a witness with direct knowledge of the source, stating that the exhibit fairly and fully reproduces it, may be enough to authenticate,” the Court observed: “At no point does [Plaintiffs’] affidavit say that they have personal knowledge of the online log or that it represents an unaltered version of the website. . . . That is likely because, by all indications, those logs were created and maintained by Impact, not the Thompsons. Nor do the logs have characteristics that would authenticate them from their own appearance under Rule 901(b)(4).” The opinion summarizes some other federal authority about the authentication of evidence obtained from the Internet.
The parties in Morton v. Yonkers disputed whether a gas royalty interest was void under the laws of the Navajo Nation. No. 13-10926 (Nov. 19, 2014). One party submitted a letter from an attorney for the Navajo Nation Department of Justice, opining that the “purported overriding royalty interest is invalid under the applicable provisions of the Navajo Nation Code and is completely void.” The Fifth Circuit affirmed the lower courts’ conclusion that this letter was inadmissible hearsay, and did not qualify for an exemption under Fed. R. Evid. 803(8) or (15) [public records and statements about property interests]; or the general exception in Rule 807 [the former 803(24) and 804(b)(5), combined in 2011]: “Trustworthiness is the linchpin of these hearsay exceptions. We are persuaded by the district court’s thorough explanation that the letter is untrustworthy, in large part because it was drafted by Morton’s counsel and was prepared after Morton’s counsel provided the Navajo Nation official with only one side of the story.”
The trustee of a litigation trust formed from the bankruptcy of Idearc, Inc. sued its former parent, Verizon, alleging billions of dollars in damages in connection with its spinoff. After a bench trial and several other orders, the district court ruled in favor of defendants, and the Fifth Circuit affirmed in U.S. Bank, N.A. v. Verizon Communications, No. 13-10752 (revised Sept. 2, 2014).
The opinion, while lengthy, still only hints at the complexity of the case, and much of its analysis is fact-specific. Some of the issues addressed include:
1. A bankruptcy litigation trust does not have a right to jury trial on a fraudulent transfer claim, when the defendant creditor has filed a proof of claim in the bankruptcy, and the bankruptcy court must resolve whether a fraudulent transfer occurred to rule on that claim (analyzing and applying Langemkamp v. Culp, 498 U.S. 42 (1990), in light of Stern v. Marshall, 131 S. Ct. 2594 (2011)).
2. In the context of determining whether the district court reviewed an earlier ruling correctly, on pages 26-27, the Court provided crisp definitions of the basic concepts of dictum and holding.
3. In the course of rejecting an argument about the refusal to admit several pieces of evidence, the Court noted that the trustee “does not discuss how each specific piece of evidence was likely to affect the outcome of the trial, in light of all the evidence presented.”
4. A defense expert, without experience in the particular industry, was still qualified to speak to valuation methodology in the bench trial, and “we cannot reverse the district court for adopting one permissible view over the other.”
5. The Court thoroughly reviewed the fiduciary duties owed from a parent to a subsidiary under Delaware law, while affirming the district court’s conclusions about causation associated with their alleged breach.
At issue in Meadaa v. K.A.P. Enterprises LLC was the relative liability of three defendants for a $3.5 million claim. No. 12-30918 (July 1, 2014). In a summary judgment affidavit, an expert opined that transactions of Defendant 1 had not resulted in unfair advantage to Defendants 2 and 3, and had kept its affairs separate from those of Defendant 4. The expert had reviewed financial documents from Defendant 1 and tax returns from Defendant 4. The Fifth Circuit found no clear error in the district court’s striking of this affidavit for a lack of personal knowledge. Because “[i]t is by no means clear how a [CPA] can obtain personal knowledge of the effects of the actions of one entity on other parties without reviewing the latter’s financial documents,” it was “incumbent upon him to explain how he acquired such knowledge.” As a procedural matter, the Court also found that a notice of appeal from a final judgment encompassed a later ruling on a Rule 59 motion.
A subtle Erie issue flashed by when Andrews alleged premises liability claims against BP, and the Fifth Circuit affirmed summary judgment for BP under a Texas statute. Terry v. BP Amoco, No. 12-40913 (June 27, 2014, unpublished). BP won summary judgment: “Exhibits C and D are the only evidence that Andrews identified as raising a material issue of fact as to BP’s responsibility for the explosion. Those exhibits are a Safety Bulletin issued by the United States Chemical Safety and Hazard Investigation Board (CSB) and a CSB press release discussing the bulletin. The statute creating the CSB, however, prohibits Andrews from using the documents as evidence in this case. Additionally, both CSB documents also likely constitute inadmissible hearsay under the Federal Rules of Evidence.” The question not raised is how much substantive effect this type of federal statute must have in a state law tort claim, removed to federal court under diversity jurisdiction, so as to raise an Erie issue.
The plaintiff in Sanders v. Flanders alleged legal malpractice arising from the handling of patent applications. The Fifth Circuit did not engage the question whether he had shown lost profits with reasonable certainty, noting: “[C]ounsel admitted during oral argument that [Plaintiff] did not make any offer of proof concerning the lost-profit evidence that he would have otherwise presented but for the district court’s hearsay ruling.” No. 13-50235 (April 22, 2014, unpublished).
A painstaking panel issued two detailed tax opinions on the same day. In the first, “substantial underpayment” penalties were found appropriate, in a partnership-level proceeding, where substantial authority did not support the taxpayer’s position as to a well-known inappropriate tax shelter. NPR Investments LLC v. United States, No. 10-41219 (Jan. 23, 2014). In the second, the Court affirmed a finding that certain claimed tax credits were not “qualified research expenses” within the meaning of the Internal Revenue Code, while also remanding to enforce a stipulation made by government before the Tax Court, In an evidentiary holding of broader interest, the court found no abuse of discretion in the exclusion under Rule 403 of the taxpayers’ alleged lab records, agreeing that they were voluminous and not pertinent to the specific tax law issues at hand. Shami v. Commissioner of Internal Revenue, No. 12-60727 (Jan. 23, 2014). Both opinions discuss the appropriate standards of review for appeal from the U.S. Tax Court.
After a jury trial, the plaintiff won judgment of $336,000 for breach of a joint venture to bid a contract with the Air Force about upgrades to the storied Paveway laser-guided bomb program. X Technologies v. Marvin Test Systems, No. 12-50230 (June 11, 2013). On the issue of causation, the Fifth Circuit quickly dismissed two challenges to a key witness’s qualifications since he was not testifying as an expert, and also dismissed the effect of a claimed impeachment in light of the full record developed at trial. The Court went on to affirm a directed verdict on a claimed defense of prior breach, finding that the agreement only imposed a one-way bar on multiple bids for the contract, and to affirm the judgment of breach, noting multiple uses of “team” in the record to describe the parties’ relationship.
In Homoki v. Conversion Services, a check processing company sued its sales agent and a competitor. No. 11-20371 (May 28, 2013). It won judgment for $700,000 against the competitor for tortious interference with the sales agent’s contract with the company, and $2.15 million against the agent for past and future lost profits. The company and competitor appealed. First, the Fifth Circuit — assuming without deciding that the plaintiff had to show the competitor’s awareness of an exclusivity provision in the agent’s contract — found sufficient evidence of such knowledge in testimony and the parties’ course of dealing, and affirmed liability for tortious interference. Second, the Court found that the plaintiff’s “experience in managing his business for sixteen years” supported his damages testimony, and that “[w]hile [plaintiff]’s presentation of its damages evidence was far from ideal,” also found sufficient evidence of causation on the interference claim. Finally, the Court found that the plaintiff had given adequate notice of its claim of conspiracy to breach fiduciary duties (the joint pretrial order was not signed by the judge), but the plaintiff waived jury trial on that issue by not requesting a damages question — particularly given the significant dispute about causation in the evidence presented.
The Fifth Circuit has had a about the application of Daubert, and its effect on the roles of judge and jury. In Huffman v. Union Pacific Railroad, the Court moved to the other end of the technical spectrum, and analyzed the sufficiency of evidence in a FELA case about a former railway worker’s alleged on-the-job injuries. No. 09-40736 (March 13, 2012) After thorough analysis of the worker’s allegations, the Court held that expert testimony on causation was not necessary to support a jury finding for the worker, but found that the worker had not presented enough evidence about the type of injury to satisfy even that standard. Op. at 21-22. Judge Southwick wrote for the majority, joined by Judge Owen, and Judge Dennis dissented. The case analyzes FELA precedent but is of substantially broader interest on general causation issues. The Court also briefly analyzed and rejected a judicial estoppel argument. Op. at 7-8.
In McGee v. Arkel Int’l, the Court addressed the thorny choice-of-law issue raised by a conflict between limitations provisions. No. 10-30393 (Feb. 16, 2012). It found that Iraqi law was adequately proven under Fed. R. Civ. P. 44.1 through an expert’s affidavit, which included a translation and cited a generally consistent website. Op. at 13-14 (noting that defendant “did not put forth any alternative translation and has not suggested how the [plaintiff’s] translation might be inaccurate”). The Court found that the action was time-barred under Louisiana law, was not shown to be time-barred under Iraqi law, and thus fell within a rarely-used Louisiana law allowing the action to proceed as “warranted by compelling considerations of remedial justice.” Op. at 18 (citing La. Civ. Code art. 3549).
In a complicated case about jurisdiction over a challenge to administrative action, the Court addressed the general effect of presumptions under the Federal Rules of Evidence and Rule 301 in particular. City of Arlington v. FCC (No. 10-60039, Jan. 23, 2012). The Court reminded that under the “bursting-bubble” approach of Rule 301, “the only effect of a presumption is to shift the burden of producing evidence with regard to the presumed fact.” Op. at 42. Accordingly, “once a party introduces rebuttal evidence sufficient to support a finding contrary to the presumted fact, the presumption evaporates,” and “[t]he burden of persuasion with respect to the ultimate question at issue remains with the party on whom it originally rested.” Id.
The Court does not publish many opinions outside of the Daubert area that construe the Federal Rules of Evidence. New judge Stephen Higginson, in a technical opinion about conditions of prison release for medical treatment, addressed an uncommon hearsay issue in Sealed Appellee v. Sealed Appellant, No. 10-11163 (5th Cir. Dec. 19, 2011). The Court affirmed the admissibility of a probation officer’s letter under the “public records” exception of Fed. R. Evid. 803(8), despite its observation that the letter “does attribute some statements to [Appellant’s] sister.” Op. at 7 (citing analysis of a similar issue in Moss v. Ole South Real Estate, 933 F.2d 1300, 1309-10 (5th Cir. 1991)).