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 No. 13-50235 (April 22, 2014, unpublished).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)).