The plaintiff in McKay v. Novartis, Inc. challenged the dismissal on preemption grounds, by an MDL court in Tennessee, of products liability claims about drugs made by Novartis. No. 13-50404 (May 27, 2014). The Fifth Circuit rejected an argument about inadequate time to get certain medical records, noting that the plaintiffs “sought formal discovery of evidence that was available to them through informal means” (citing other cases from the Court on that general topic), and also observing that two years passed from the filing of suit until Novartis sought summary judgment. The Court also affirmed the MDL court’s grant of summary judgment on Texas state law grounds about a breach of warranty claim, finding inadequate notice; as an Erie matter: “the majority of Texas intermediate courts have held that a buyer must notify both the intermediate seller and the manufacturer.”
The dispute presented by the petition for a writ of mandamus in In re Times-Picayune, LLC was a criminal defendant’s ability to have identifying information about online commentators on the defendant’s case produced for in camera review; the defendant contending that the commentators were federal prosecutors. No. 14-30298 (April 8, 2014, unpublished). The Fifth Circuit denied the petition, reasoning: “Here, we are not persuaded that the district court’s (1) balancing of the speech rights of anonymous commenters against the due process interests of [defendant] and (2) ordering the Times-Picayune to turn over information for in camera review was clearly and indisputably erroneous. As an initial matter, there is little case law illuminating how the competing interests in situations comparable to this one should be balanced. . . . Even in the absence of precedent, however, we cannot say that the district court here clearly reached the wrong decision.” [The short opinion is worth comparing to the concurrence in All Plaintiffs v. Transocean Offshore from 2013, about the availability of mandamus relief for discovery matters.] And subsequently, the district court concluded that the commentator at issue was not a prosecutor.
The district court granted a dismissal in favor of New Zealand, on forum non conveniens grounds, in Royal Ten Cate USA, inc. v. TT Investors, Ltd. No. 13-50106 (March 25, 2014, unpublished). The Fifth Circuit remanded for further consideration of what it saw as a key private-interest factor — “whether two key witnesses who reside in Texas would be amenable to process in New Zealand.” The witnesses in question were former party employees living in Texas, and the parties disputed whether those individuals’ employment contracts obligated them to cooperate with litigation after their employment. Their importance was heightened because they were particularly significant to one side, while the other side did not appear to have comparable problems with its likely witnesses. The Court did not express an opinion about the proper result on remand, and noted that “[t]he decision regarding whether or not to take additional evidence is one that we leave to the sound discretion of the district court.”
Duoline Technologies v. Polymer Instrumentation presents an unusual appellate review of a discovery order, arising from an ancillary proceeding to enforce a subpoena for a Pennsylvania case. No. 13-50532 (March 5, 2014, unpublished). Plaintiff Duoline sought to depose Joseph Schwalbach, a former employee, about the business dealings between his new company and Defendant Polymer. Among other rulings, the district court limited the document requests and deposition scope to events during Schwalbach’s employment by Duroline. The Fifth Circuit noted that some evidence supported the plaintiff’s theory of a connection between the businesses, and that logically, plaintiff’s theory relied upon events after Schwalbach left his job at Duoline. The Court did not find an explanatory affidavit from Schwalbach to be dispositive.
Waltner v. Aurora Loan Services LLC welcomes the New Year with three bread-and-butter issues in business litigation. No. 12-50929 (Dec. 31, 2013, unpublished). First, a party’s failure to answer on time does not require the “drastic remedy” of a default judgment, especially when a plaintiff shows no prejudice from the failure to timely answer. The granting of a default judgment is a discretionary ruling by the district court. Second, damages for lost use of property are not reliance damages that can be recovered with a promissory estoppel claim. Rather, they are consequential losses — a form of expectation damages. Finally, while Fed. R. Civ. P. 26(g)(2) says that a court “must strike” unsigned discovery responses “unless a signature is promptly supplied” after the error is identified, the district court has discretion in determining what is “prompt” and in what weight to give the lack of prejudice to the opposing party.
Twenty-four plaintiffs sued Citgo for alleged violations of the overtime pay laws. The court’s second discovery order warned against destruction of personal emails by the plaintiff. Then, after two evidentiary hearings, the court dismissed the claims of seventeen plaintiffs for violating that order (but not of an eighteenth), entering specific factual findings for each plaintiff. Four more were then dismissed after another hearing and sets of findings. Moore v. Citgo Refining & Chemicals Co., Nos. 12-41175 and 12-41292 (Nov. 12, 2013, unpublished). The Fifth Circuit found no abuse of discretion, noting the clarity of the discovery order, the hearing of live testimony, and prejudice to Citgo (loss of the ability to show that the plaintiffs were sending personal emails “on the clock,” which had proven relevant in one of the cases that was not dismissed). The Court also reversed and rendered for $50,000 in costs, finding that the district court’s reduction of taxable costs to $5,000 because of Citgo’s size and resources was not grounded in the applicable rule.
In Cutler v. Stephen F. Austin State University, the defendant sought interlocutory review of an order requiring it to appear for a deposition under Fed. R. Civ. P. 30(b)(6). No. 12-41393. The Fifth Circuit found the appeal moot because the depositions had already taken place. The defendant argued that the appeal was not moot because the depositions may be used at an upcoming trial. The Court responded: “This court does not have jurisdiction to issue advisory opinions regarding decisions of the district court that have not been made at a trial that has not been held.”
The defendant in Bowles v. Ranger Land Systems did not have a bank account, registered agent, or office in Texas. No. 12-51255 (June 16, 2013, unpublished). As a defense contractor, the company had a handful of employees at three Army bases in Texas, but that presence was not substantial enough to create general jurisdiction. (citing Johnston v. Multidata Systems Int’l Corp., 523 F.3d 602, 612-13 (5th Cir. 2008) (presence of two employees, who reported to out-of-state supervisor, was “certainly a regular contact with Texas” but was “not substantial enough to create a general business presence in Texas”)). The Fifth Circuit also found no abuse of discretion in denying further jurisdictional discovery based on these allegations.
The plaintiffs in AFLAC v. Biles sued in state court, alleging that AFLAC paid death benefits to the wrong person, and that the signature on the policy application was forged. No. 12-60235 (April 30, 2013). AFLAC moved to compel arbitration in the state court case and simultaneously filed a new federal action to compel arbitration. The state court judge denied AFLAC’s motion without prejudice to refiling after discovery on the issue of the signatures’ validity. In the meantime, the federal court granted AFLAC’s summary judgment motion and compelled arbitration after hearing expert testimony from both sides on the forgery issue. The Fifth Circuit affirmed, finding that Colorado River abstention in favor of the state case was not required, and that the order compelling arbitration was allowed by the Anti-Injunction Act because it was “necessary to protect or effectuate [the federal] order compelling arbitration.” The Court also found no abuse of discretion in the denial of the respondents’ FRCP 56(e) motion, since it sought testimony that would only be relevant if the witness admitted outright to forgery.
The parties in Silver Dream LLC v. 3MC Inc. settled a copyright dispute about jewelry sales “by agreeing, among other things, that the [individual defendants] would provide affidavits disclosing details of the infringing items.” No. 11-30968 (March 18, 2013, unpublished). The defendants warranted the affidavits would be “true, complete, and exact” but the agreement allowed termination only if the affidavits were discovered to be false within a year. The plaintiff took issue with the “qualified nature” of the affidavits as a reason to terminate the settlement, but the district court and Fifth Circuit stressed that the cancellation right was limited to a “false” statement. The plaintiff’s proof of alleged affirmative falsehoods in the affidavits was found to lack specificity. The Fifth Circuit also found no abuse of discretion in denying a motion for continuance to depose the individual defendants, noting delay in the request and a lack of specificity about what the plaintiff planned to establish.
The judgment debtors in Seven Arts Pictures v. Jonesfilm were found in civil contempt for failure to answer postjudgment discovery and other issues about enforcement of a judgment. No. 11-31124 (Feb. 18, 2013, unpublished). The Fifth Circuit affirmed, finding that the district court had general personal jurisdiction over the debtors, that the debtors had waived arguments about the orders by not timely and properly objecting below, and that the district court did not abuse its discretion in awarding $21 thousand in attorneys fees. While the holdings on jurisdiction, waiver, and attorneys fees draw heavily from the specific facts of the case, the legal framework used is of broad applicability. Footnote 7 acknowledges the unusual procedural posture of the jurisdiction issue, which had not been raised until after the notice of appeal was filed.