Celebrate summer with 600 Summer Camp and five good cases to know from the Fifth Circuit in 2016 — and one special bonus!
Here is a reprint of my article this week in the Texas Lawbook, Federal Litigation in the Fifth Circuit in the New Year. I hope you find it informative and helpful.
Happy Halloween, with the most recent “5 cases to know” update from 600Camp – you can read it here, complete with case links.
At mid-year 2015, you can see here my recommendations for five cases from the last 3 months that are well worth a read.
Can you believe it is April 2015 already? To review the “top five” opinions from the Fifth Circuit in the area of business litigation from the first quarter, please click here — better-formatted compared to the standard WordPress ordinarily used by the blog.
- General jurisdiction is not general. “It is . . . incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation or principal place of business.” Monkton Ins. Servs. v. Ritter, __ F.3d ___ (5th Cir. Sept. 26, 2014) (applying Daimler AG v. Bauman, 134 S. Ct. 746 (2014)).
- “Gateway” arbitration has a gate. A party must only “arbitrate gateway questions of arbitrability if the argument that the dispute falls within the scope of the agreement is not wholly groundless.” In Douglas v. Regions Bank, an agreement about a bank account did not control a later, unrelated embezzlement case. 757 F.3d 460 (5th Cir. 2014).
- “Based on” = Arbitration. The contract said: “Terms and conditions are based on the general conditions stated in the [attached].” While “based on” may have “multiple interpretations . . . in the abstract,” no such reading worked here, given the length and scope of the attachment compared to the contract. Rushaid v. National Oilwell Varco, Inc., 757 F.3d 416 (5th Cir. 2014).
- No actual damages = No civil penalties. Forte v. Wal-Mart Stores, ___ F.3d ___ (5th Cir. Aug. 25, 2014) (rehearing pending).
- Analytical GAAP. An expert reviewed financial documents from A and tax returns from B. His opinions about the finances of C and D were stricken: “It 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 . . . .” Meadaa v. K.A.P. Enterprises LLC, 756 F.3d 875 (5th Cir. 2014).
BONUS: Lipan Apaches may use eagle feathers in religious rituals — for now at least. McAllen Grace Brethren Church v. Salazar, ___ F.3d ___ (5th Cir. Aug. 20, 2014).
In the second quarter of 2014, the Fifth Circuit said how to . . .
1. . . . enforce an Agreed Protective Order. Two judges, finding “written notice” ambiguous, found that Ford did not waive confidentiality designations by having a lengthy email exchange rather than moving for protection. The dissent would construe the ambiguity against Ford and faults the majority for encouraging “vague, non-responsive answers.” Moore v. Ford Motor Co., ___ F.3d ___ (June 20, 2014).
2. . . . . remove based on federal question jurisdiction. A petition raised a sufficient federal question for removal when it incorporated this allegation from an EEOC complaint: “I have been and continue to be discriminated against, in violation of Title VII of the 1964 Civil Rights Act, as amended, [and] the Texas Commission on Human Rights Act, as amended, because of my national origin (Iranian).” Davoodi v. Austin ISD, ___ F.3d ___ (June 16, 2014).
3. . . . protect in-house counsel’s attorney-client privilege. Addressing the common question of “business or legal advice?” the court found a memo privileged because it “deal[t] with any legal liability that may stem from under-disclosure of data, hedged against any liability that may occur from any implied warranties during complex negotiations.” Exxon Mobil Corp. v. Hill, 751 F.3d 379 (2014).
- How close does Twombly come to Fed. R. Civ. P. 9(b)? Consider Merchants & Farmers Bank v. Coxwell, affirming the dismissal of a pleading: “The complaint did not specify what court issued the order, when it was issued, or to whom it was directed; [and] the complaint did not describe what the order required . . . .” No. 13-60368 (5th Cir. Feb. 7, 2014, unpublished).
- Credibility questions create fact issues. See Vaughan v. Carlock Nissan of Tupelo, No. 12-60568 (5th Cir. Feb. 4, 2014, unpublished) (reversing a summary judgment about a manager’s “bad faith,” noting credibility questions about his claimed justifications for a firing, ambiguity in other statements, and the timing of the termination).
- Forum non conveniens factors – the “availability of witnesses” factor is reviewed by Royal Ten Cate USA, Inc. v. TT Investors, Ltd. No. 13-50106 (5th Cir. March 25, 2014, unpublished), and Indusoft, Inc. v. Taccolini, No. 13-50042 (March 19, 2014, unpublished).
- Conflicting documents about arbitration are harmonized in Lizalde v. Vista Quality Markets, ___ F.3d ___ (5th Cir. March 25, 2014) (enforcing an arbitration agreement despite a benefit plan with a broad termination right, noting that both agreements’ termination provisions “clearly demarcate their respective applications”).
- Settlement efforts as prerequisite for arbitration. This language — “the parties agree to negotiate in good faith toward resolution of the issues, and to escalate the dispute to senior management personnel in the event that the dispute cannot be resolved at the operational level” — does not create a requirement of negotiation by senior management before arbitration is invoked. 21st Century Financial Services v. Manchester Financial, ___ F.3d ____ (5th Cir. March 31, 2014).
BONUS: Read about our firm’s recent $319 million verdict in a high-stakes partnership dispute.
From recent cases described on this blog, here are three basic tips for business cases in 2014:
1. Plead like a mystery writer. Like a skilled crime novelist, the civil rights plaintiff in Jabaray v. City of Allen survived a Rule 12 motion by detailing motive and opportunity – the mayor’s alleged personal investment in the real estate at issue, and his role and involvement in the relevant city agencies. No. 12-41054 (Nov. 25, 2013, unpubl.)
2. Eyewitnesses help make fact issues. Plaintiff claimed a barge came loose during Hurricane Katrina and damaged a bridge. Defendant said that Plaintiff’s theory required the impossible – that the barge move upstream against hurricane-force wind. The Fifth Circuit found a fact issue from eyewitnesses who saw and heard things consistent with Plaintiff’s theory. “There is a great deal of testimony supporting Lafarge’s position, to be sure, and little to support the Parish’s, but we are mindful of the summary judgment standard.” St. Bernard Parish v. Lafarge North America, No. 13-30030 (Dec. 19, 2013, unpubl.) This reasoning could extend to admissible testimony about the commercial context of an agreement, or its course of performance.
3. Keep experts on Earth. The Court found that an expert in a toxic tort case made unsupported assumptions about (a) the plaintiff’s work hours, (b) what he did at work, (c) where he worked, and (d) whether the ventilation worked. ”To be sure, reliable expert testimony often involves estimation and reasonable inferences from a sometimes incomplete record. . . . Here, however, the universe of facts assumed by the expert differs frequently and substantially from the undisputed record evidence.” Moore v. International Paint LLC, No. 13-30281 (Nov. 15, 2013, unpubl.)
The Fifth Circuit addressed several important business litigation topics in May-August of 2013:
1. Borrowers survive. Mortgage servicers still won many cases, including a published opinion rejecting claims of “robosigning.” Three times, however, the Fifth Circuit reversed Rule 12 dismissal of borrowers’ pleadings.
2 Personal jurisdiction. The Fifth Circuit applied for the first time a 2011 Supreme Court opinion about the “stream of commerce,” finding jurisdiction over a foreign manufacturer, but noting that the opinion may affect older Circuit cases suggesting that a general intent to sell in the US could create jurisdiction in a specific state.
3. Extrinsic evidence. The proper handling of extrinsic evidence is a recurring challenge in contract litigation. A recent case reminds of the importance of evidence about course of performance, even for an unambiguous contrac
4. Venue. The Court granted mandamus to compel an intra-district transfer from East Texas’s Marshall Division to its Tyler Division.
5. Jury deference. In Wellogix, Inc. v. Accenture, LLP, the Court affirmed a $44 million jury verdict, reminding: “Had we sat in the jury box, we may have decided otherwise.” Three other published opinions substantially affirm jury awards.
BONUS: Where is the M/V OCEAN SHANGHAI? An admiralty appeal was recently found moot, in part because the “ship had sailed” from the Fifth Circuit. Modern technology lets blog readers follow the SHANGHAI to non-Fifth Circuit locations around the globe.