600 Camp

Indefinite noncompete, explicit online chat, fees awarded.

dscoale — Fri, 24 May 2013 12:09:33 +0000

In Kenyon International Emergency Services, Inc. v. Malcolm, the Fifth Circuit found no abuse of discretion in an award of attorneys fees under a Texas statute to the defendants in a suit to enforce a noncompetition agreement. No. 12-20306 (May 14, 2013, unpublished). The Court clarified that “the key determination is [plaintiff's] knowledge of reasonable limits, not . . . its knowledge of the reasonableness of the agreement” (emphasis in original). As it saw the record, the plaintiff’s CEO testified that the restrictions “were worldwide, overreaching in scope of activity, and basically indefinite in time.” The Court also reversed a sanction on the plaintiff’s lawyer related to the unsealed filing of a “sexually-explicit Internet chat,” reminding that “[i]ssuing a show-cause order is a mandatory prerequisite to imposing monetary sanctions sua sponte,” and finding that the lawyer did not have an improper purpose in making the filing and thus did not fall within Rule 11.

No malpractice about advice on right to jury trial

dscoale — Thu, 23 May 2013 11:28:58 +0000

In Colonial Freight Systems v. Adams & Reese, the Fifth Circuit affirmed summary judgment for a law firm on a malpractice claim and for unpaid fees. No. 12-30853 (May 15, 2013, unpublished). The plaintiff claimed, under Louisiana law, that the firm’s “negligent failure to advise the company of its right to a jury” was malpractice. The Court rejected that claim because the plaintiff could only speculate about any loss resulting from that alleged failure. (In the context of criminal law, a different framework applies because the policies at play are different, see United States v. Mendez, 102 F.3d 126 (5th Cir. 1996)).

No place like home

dscoale — Mon, 20 May 2013 12:09:54 +0000

The plaintiff served its suit on a guaranty obligation by using the Texas longarm statute, which requires that the plaintiff provide the Texas Secretary of State with the defendant’s “home or home office address.” Tex. Civ. Prac. & Rem. Code §§ 17.044(a), 17.045(a). The defendants in Moody National Bank v. Bywater Marine alleged that the plaintiff had only served a “mailing address,” but the Fifth Circuit disagreed, holding that service on the address specified in the parties’ contract for service of process satisfied the statute. No. 12-40946 (May 14, 2013, unpublished) (citing Mahon v. Caldwell, Haddad, Skaggs, Inc., 783 S.W.2d 769, 771 (Tex. App. — Fort Worth 1990, no writ)).

Duty to defend suit by EPA seeking remediation

dscoale — Sun, 19 May 2013 13:21:23 +0000

The EPA and its state equivalent sued the owner of the “Big Cajun II,” a coal power plant in Louisiana, seeking penalties, injunctive relief, and remediation of alleged environmental damage. Louisiana Generating LLC v. Illinois Union Ins. Co., No. 12-30651 (May 15, 2013). Applying New York law, the Fifth Circuit found that “Claims, remediation costs, and associated legal defense expenses . . . as a result of a pollution condition” potentially encompassed some of the relief sought by the EPA for past environmental problems. The Court also found that an exclusion for “[p]ayment of criminal fines, criminal penalties, punitive, exemplary or injunctive relief” did not unambiguously exclude coverage for remediation required by an injunction order, reasoning that such a broad reading “would potentially swallow” the coverage for remediation costs. Having found a duty to defend, the Court did not reach a question about whether New York law allowed indemnification for civil penalties imposed under the Clean Air Act.

Cumulative evidence establishes age discrimination.

dscoale — Fri, 17 May 2013 12:13:44 +0000

In Miller v. Raytheon Co., the Fifth Circuit affirmed liability for age discrimination and affirmed in part on damages. No. 11-10586 (revised, May 14, 2013). Among holdings of broader interest in civil litigation, the Court: (1) affirmed the verdict of liability, noting: “Considered in isolation, we agree with Raytheon that each category of evidence presented at trial might be insufficient to support the jury’s verdict. But based upon the accumulation of circumstantial evidence and the credibility determinations that were required, we conclude that ‘reasonable men could differ’ about the presence of age discrimination”; (2) reversed an award of mental anguish damages because “plaintiff’s conclusory statements that he suffered emotional harm are insufficient”; and (3) rejected a challenge, based on the Texas Constitution, to the statutory punitive damages cap in the TCHRA.

$40+ million trade secret judgment affirmed.

dscoale — Thu, 16 May 2013 12:14:31 +0000

In Wellogix, Inc. v. Accenture, LLP, the district court entered judgment for the plaintiff — $26.2 million in compensatory damages and $18.2 million in punitives, after a remittitur – in a trade secrets case about software to make oil exploration more efficient. No. 11-20816 (May 15, 2013). Affirming, the Court: (1) reminded, in the opening paragraph, of the deference due to a jury verdict; (2) detailed the sufficient evidence before the jury of a trade secret, of its inappropriate use by the defendant, of damages, and malice; (3) rejected Daubert arguments about the scope of the plaintiff’s computer science expert’s testimony and the material considered by its damages expert; and (4) affirmed the punitive damages award because it was less than the compensatory damages and the issue of “reprehensibility” was neutral. The Court also analyzed aspects of the relationship between trade secret claims and the patent process. Footnote 4 of the opinion provides a useful guide to the federal courts’ treatment of a “Casteel problem” in Texas jury submissions.

Global warming suit is still dismissed.

dscoale — Thu, 16 May 2013 02:43:38 +0000

The original lawsuit in Comer v. Murphy Oil alleged tort claims against several oil companies about the effect of global warming on Hurricane Katrina. The district court dismissed the claims in that original suit on standing and political question grounds; then, after a Fifth Circuit panel initially reversed in part; the appeal was dismissed after recusals made en banc review impossible after a vote to grant review by the full Court. In this new case, the plaintiffs refiled, the district court dismissed on the grounds of res judicata since its original ruling was not affected by the appeal, and the Fifth Circuit affirmed. No. 12-60291 (May 14, 2013). The Court reviewed the policies behind the doctrine of res judicata and declined to create an equitable exception to the doctrine for this case.

Surviving Rooker-Feldman, still failing to state a claim

dscoale — Tue, 14 May 2013 21:04:21 +0000

After sidestepping an issue about the Rooker-Feldman doctrine in the context of mortgage servicing earlier this year, the Fifth Circuit revisited the topic in Truong v. Bank of America, No. 12-30934 (April 30, 2013). After a review of the doctrine (“‘Reduced to its essence, the Rooker/Feldman doctrine holds that inferior federal courts do not have the power to modify or reverse state court judgments’ except when authorized by Congress.”), the Court found that it did not prevent a claim arising from alleged misconduct during the course of a foreclosure case. On the merits, however, the claim failed because of an exemption in Louisiana’s unfair trade practices act for “[a]ny federally insured financial institution,” and the Court affirmed dismissal on that basis.

Roll on, “stream of commerce,” roll on.

dscoale — Mon, 13 May 2013 14:19:17 +0000

In 2011 in J. McIntyre Machinery v. Nicastro, the Supreme Court revisited the issue of specific personal jurisdiction over a manufacturer based on putting a product into the “stream of commerce.” 131 S. Ct. 2780 (2011). While the fractured Court did not produce a majority opinion, the plurality and a 2-Justice concurrence expressed concern about a view of that doctrine that would allow jurisdiction in a particular state based on a manufacturer’s general intent to do business across the country. The Fifth Circuit directly addressed that language in Ainsworth v. Moffett Engineering, No. 12-60155 (May 9, 2013), finding that the plurality was not controlling, and that the 2-Justice concurrence was decided on the limited ground that no formulation of the doctrine would allow jurisdiction based on that manufacturer’s small number of shipments into the forum. Because the defendant in Ainsworth had over 100 shipments during the relevant time, jurisdiction was appropriate. Language from past Circuit cases that may be inconsistent with McIntyre was noted but kept in place for now.

Bonds and bombs

dscoale — Sun, 12 May 2013 23:21:55 +0000

After the Army disclosed that a property was once a bomb range, the developer sued the law firm that advised on the issuance of bonds for the development. Coves of the Highland Development District v. McGlinchey Stafford PLLC, No. 12-30096 (May 7, 2013, unpublished).The Fifth Circuit affirmed summary judgment for the firm, principally on the ground that the developer bought the property before it retained the firm as bond counsel. Of general interest, the parties’ dispute about the engagement letter pitted a general description of the firm’s work “regarding the source of payment and security for the Bonds” against a specific statement that the firm would rely on the developer for “complete and timely information on all developments pertaining to the Bonds . . . .”