Of the common law and “chymistry”

Melton v. Phillips, No. 15-10604 (Nov. 13, 2017), a difficult qualified immunity case that required en banc review to resolve, features a concurrence with the unusual verb “cross-pollinated” to describe a confluence of two lines of authority. That perspective on the development of common law recalls the concept of “vegetation” in early scientific thought, used to describe vigorous and lively growth not just in plant life, but throughout nature. Indeed, no less than Isaac Newton wrote a paper about “Chymystry” titled “On Nature’s Obvious Laws and Processes in Vegetation”:


When not to cross-appeal. UPDATED

In an insurance coverage dispute, the district court granted both sides’ motions for summary judgment as to the meaning of various policy terms. The net result was final judgment for the insurance company. The insured appealed; the insurer cross-appealed, and on that procedural point, the Fifth Circuit held that the cross-appeal was unnecessary, noting:

  • “National Union is conflating the district court’s opinion (i.e., the order) with its judgment. Appellate courts review judgments, not opinions. . . . To the extent that the district court rejected the arguments in National Union’s cross-appeal, ‘an appellee may urge any ground available in support of a judgment even if that ground was . . . rejected by the trial court.'” (citations omitted);
  • The recent case of ART Midwest v. Atlantic Limited Partnership XII,742 F.3d 206 (5th Cir. 2014), in which a party was not allowed to raise certain issues after not taking a cross-appeal, was distinguishable because judgment had actually been entered against that party on those issues. “Here,there is no adverse judgment against National Union, such that it might need to protect its rights—just some adverse reasoning”; and
  • “This is not just formalism. ‘A cross-appeal filed for the sole purpose of advancing additional arguments in support of a judgment is “worse than unnecessary”, because it disrupts the briefing schedule, increases the number (and usually the length) of briefs, and tends to confuse the issues.’ . . . In this case, National Union’s improper cross-appeal resulted in an over-length opposition brief and an additional reply (giving National Union over four thousand words of additional briefing).” (citations omitted)

Cooper Indus. v. Nat’l Union Fire Ins. Co., No. 16-20539 (revised Dec. 11, 2017).

When proving lost profits, don’t be gross.

The Fifth Circuit affirmed a JNOV motion on damages, under Texas law, when the plaintiff proved gross profits rather than net profits. “Its expert witness testified that he used ThermoTek’s gross profit margin—gross sales, less the cost of those goods sold, divided by gross sales—to calculate lost profits. He then stated that he reached his lost-profit totals for the VascuTherm units and wraps by (1) multiplying the average sales ThermoTek made to Wilford each month by the unit sales price and relevant time period, and (2) deducting the cost of the goods sold. But that is the very definition of gross profits. See Black’s Law Dictionary, supra (defining gross profits as “[t]otal sales revenue less the cost of the goods sold, no adjustment being made for additional expenses and taxes”). Motion Medical Technologies v. Thermotek, No. 16-11381 (Nov. 14, 2017).


Copyright preemption of Texas state-law misappropriation claim

“We have twice held that Texas’s unfair competition-by-misappropriation tort does not afford protection qualitatively different from federal copyright law. We do so again here.” Motion Medical Technologies v. Thermotek, No. 16-11381 (Nov. 14, 2017) (citing Ultraflo Corp. v. Pelican Tank Parts, Inc., 945 F.3d 652, 657-59 (5th Cir. 2017) and Alcatel USA, Inc. v. DGI Techs., Inc., 166 F.3d 772, 787-89 (5th Cir. 1999)).

A second look at log construction

The Fifth Circuit recently “walked back” its May opinion in EEOC v. BDO USA, which identified three problems with a privilege log. A revised opinion removed that discussion, in favor of a shorter, more general observation about there being “no presumption that a company’s communications with counsel are privileged.” The new opinion observed: “Given the ‘broad’ and ‘considerable discretion’ district courts have in discovery matters, we will not analyze the privilege logs in the first instance.” EEOC v. BDO USA, No. 16-20314 (revised Nov. 16, 2017).

Should you capitalize “Internet”?

Yes, according to Alexander v. Verizon Wireless Services LLC:

Although many style guides, such as the Chicago Manual of Style, and news sources, such as the Associated Press, no longer instruct writers to capitalize “Internet,” we decline to follow this trend. For many, such as the New York Times, the reason for the change to “internet” is simple: others were doing it, so they thought they should, too.  “Internet,” however, was originally capitalized to distinguish the global network from other internets—short for “inter networks”—which are collections of smaller networks that communicate using the same protocols.  In our view, this still makes the word a proper noun, regardless of how often people refer to other internets. Furthermore, to the extent “decapitalizing [I]nternet is part of a universal linguistic tendency to reduce the amount of effort required to produce and process commonly-used words,” we reject the tasks of striking an additional key or reading over a capital “I” as persuasive reasons to alter a word.

No. 16-31227 n.12 (Nov. 13, 2017) (citations omitted).

Evidence twofer

Two basic reminders about evidence appear in Eaton-Stephens v. Grapevine Colleyville ISD, an employment dispute involving a school counselor:

  1. “Eaton-Stephens also argues she should have received a spoliation inference because her computer’s contents were erased, and that, because the School District’s policy and rules required retention of the contents for several years, the only conclusion was that the action was taken in bad faith. Our cases indicate a violation of a rule or regulation pertaining to document retention is not per se bad faith and Eaton-Stephens cites no authority in support of such a per se bad faith rule.”
  2. “We agree that the district court unduly discredited some of Eaton-Stephens’s deposition testimony as conclusory. ‘A party’s own testimony is often “self-serving,” but we do not exclude it as incompetent for that reason alone.’ Even if self-serving, a party’s own affidavit containing factual assertions based on firsthand knowledge is competent summary judgment evidence sufficient to create a fact issue.”

No. 16-11611 (Nov. 13, 2017, unpublished).

Holder ≠ Holder in due course

PlainsCapital asserted federal jurisdiction over a collection action on two large notes, contending that it would have to establish holder in due course status under federal law to recover (the notes came to PlainsCapital via assignment from the FDIC after a bank failure). The Fifth Circuit disagreed, reversing the district court’s summary judgment for the bank. As to the well-pleaded complaint rule, the Court observed: “PlainsCapital conflates the terms ‘holder’ and ‘holder in due course.’ A ‘holder is ‘the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession. By contrast, a party’s status as a holder ‘in due course’ merely ‘determines the applicable defenses which a defendant . . . ‘ may assert.” PlainsCapital Bank v. Rogers, No. 16-41654 (Oct. 25, 2017).


The statutory interpretation question in United States v. American Commercial Lines was the meaning of the phrase “in connection with.” The Fifth Circuit began with the plain meaning of the word “connection,” which it called “a capacious term, encompassing things that are logically or causally related or simply ‘bound up’ with one another.” Going on to review precedent and the purpose of the statute at hand, the Coourt concluded that “[i]t is, however, not so capacious as to be rendered meaningless. Conduct does not automatically occur ‘in connection with’ a contractual relationship by the mere fact that such a relationship exists.  No. 16-31550 (Nov. 7, 2017) (citation omitted).

“Oh, you meant THAT knowledge . . . “

Griffin v. Hess Corp. involved a summary judgment for the defense on the statute of limitations, based on deposition admissions about the plaintiffs’ knowledge of relevant facts. Their testimony differed in response to the summary judgment motion, and the Fifth Circuit agreed that the different testimony did not raise a sufficient issue of fact: “Appellants’ explanation—that the deposition testimony was only meant to speak of what they knew in the present tense and not to their knowledge prior to the actual filing of the complaint—does not remedy or sufficiently explain the contradiction in light of the repeated questions about the particular date certain events took place concerning their royalty claims accruing from the Property. The deposition questions, as Appellees counsel repeatedly indicated and Appellants affirmed, related to the Property and royalties accruing from the production of oil on the Property.” No. 17-30165 (Nov. 3, 2017, unpublished).

Warranty of longevity ≠ Warranty about battery life.

Wildman sued about a Medtronic device implanted in his back to relieve pain, contending that the device did not last as long as the company warranted. Medtronic argued that this claim was preempted by federal law. The question, then, is whether that warranty claim imposes requirements “different from” those of the FDA – put differently, whether it would “undermine FDA regulation or reinforce it.” The Fifth Circuit found that it was not preempted, reasoning that Medtronic made a warranty of “the longevity of the entire [d]evice,” which “goes beyond what the FDA evaluated in its approval process,” as that procees focused specifically on the testing of batteries. The Court thus reversed a summary judgment for Medtronic and remanded, noting that on remand the district could consider “another argument challenging the plausibility of Wildman’s claim: that he did not allege reliance on the warranty.” Wildman v. Medtronic, Inc., No. 17-50010 (Oct. 31, 2017).

How much is a material issue of fact?

The concept of a “genuine issue of material fact” is largely unquantifiable, but occasionally a case does set a quantitative landmark. In Shirey v. Wal-Mart Stores Texas, LLC, the Fifth Circuit addressed a personal injury claim asserting that a Wal-Mart store had constructive notice of a grape on the floor, holding:

Photographic and video evidence demonstrate that the grape was, as the district court noted, almost invisible on the off-white floor. The evidence also fails to establish that any Wal-Mart employee was in proximity to the grape for a sufficient period of time. The few seconds during which the employee passed by the grape did not provide an objectively reasonable opportunity for him to see it, notwithstanding his employer’s policy that he perform visual “sweeps” for hazards. Under these circumstances, the seventeen minutes during which the inconspicuous grape was on the floor did not afford Wal-Mart a reasonable time to discover and remove the hazard.

No. 17-20298 (Oct. 30, 2017, unpublished) (emphasis added).

How big a bonus?

Among other Twombly problems, the Fifth Circuit criticized a bankruptcy trustee’s claims about excessive bonuses, noting: “The Trustee does not explain how ATP’s compensation was excessive in comparison to other similarly sized public companies in the oil and gas industry at the time. Indeed,the Trustee offers no metric or explanation for finding the bonuses ‘exorbitant.'” And in this procedural setting, “these pleading deficiencies are ‘particularly striking’ because the Trustee has ample access to ATP’s books and records.” Tow v. Bulmahn, No. 17-30077 (Oct. 27, 2017, unpublished).

When pretrial detention violates the Constitution –

While it does not do so every day, or for that matter even every year, Fifth Circuit opinions draw powerful boundary lines around government activity. One recent example is St. Joseph Abbey v. Castille, 712 F.3d 215 (5th Cir. 2013), about the limits that substantive due process places on economic regulation. Another such line-drawing case appeared this month in Jauch v. Choctaw County, which found that qualified immunity did not protect a sheriff from the following violation of due process:

On April 26, 2012, Starkville Police Department officers pulled Jauch over, issued her several traffic tickets, and informed her of an outstanding misdemeanor warrant in Choctaw County. Choctaw County deputies took custody of Jauch and transported her to the Choctaw County Jail where, the next morning, she was served with the misdemeanor warrant and the capias. Jauch cleared the misdemeanor warrant within a few days. She nonetheless
remained detained on the capias, and her requests to be brought before a judge and allowed to post bail were denied. Jail officials informed Jauch that Sheriff Halford had confirmed she could not be taken before a judge until August when the next term of the Circuit Court commenced. When a friend of Jauch’s reached the sheriff on the telephone, he told her the same thing. Jauch’s protestations of innocence were ineffectual.

Ninety-six days after being taken into custody, Jauch’s case moved forward. She received an appointed attorney, waived formal arraignment, had bail set, and had a trial date set. Six days later, on August 6, 2012, she posted bail. Before the end of the month, the prosecutor reviewed the evidence against Jauch and promptly moved to dismiss the charge. On January 29, 2013, the Circuit Court of Choctaw County entered the dismissal. It is undisputed that Jauch was innocent all along, as she had claimed from behind bars.

No. 16-60690 (Oct. 24, 2017).

No time specification, no breach of warranty.

Among other holdings in a breach-of-warranty dispute about an aircraft engine, the Fifth Circuit reversed a finding that the manufacturer breached an express warranty by not repairing the engine in a timely manner. Because, under Texas law, “courts will not rewrite agremeents to insert provisions parties could have included,” “time is not of the essence of a contract unless the contract explicitly makes it so . . . .”  Becker v. Continental Motors, Inc., No. 16-10166 (Oct. 3, 2017).

Fifth Circuit Pro Bono Program

The Fifth Circuit describes its newly-created Pro Bono Program as follows. Great opportunity for quality appellate experience!

“The Program assists the Court by facilitating the appointment of pro bono counsel to represent pro se litigants. Pro Bono Panel members will, at the Court’s invitation, be appointed in civil appeals that, for example, present issues of first impression, complex facts or legal questions, or potentially meritorious claims warranting further briefing and/or oral argument.

Pro bono appointments are made by the Court, and are limited to proceedings before this Court. Although oral argument is not guaranteed, cases selected for the Program are likely to meet the Court’s criteria for granting oral argument.

Attorneys wishing to join the Pro Bono Panel should submit to the CMJS Office a cover letter (including statement of types of cases, if any, that counsel prefers or does not prefer), resumé, writing sample (appellate brief or brief of substantive motion), and statement of good standing in the Fifth Circuit Bar. Applications for panel membership should be emailed to the CMJS Office at probono@ca5.uscourts.gov. Questions about the program may be directed to Kate Clark, Administrative Attorney, at that email address or by telephone at 504-310-7799.”

No notice, no coverage

The question of timely notice to a carrier can give rise to close questions about insurance coverage. Nautilus Ins. Co. v. Miranda-Mondragon, however, presented a straightforward issue: “The first notice Nautilus received of the lawsuit came from Miranda-Mondragon’s counsel 41 days after the state court entered default judgment . . . . The delayed notice prejudiced Nautilus as a matter of law and relieved Nautilus of liability under the policy.” No. 17-20261 (Oct. 20, 2017, unpublished).

One small step for a pleading, one giant leap for Twombly –

Atlas Trading sued AT&T based on the “filed rate doctrine,” which prohibits a common carrier from charging rates other than those on file with the FCC. The Fifth Circuit affirmed the dismissal of that claim on the pleadings; after a thorough discussion of  the requirements of Twombly and Iqbal, the Court observed:

Atlas has neither pled nor shown, though, how these charges are inconsistent with the tariffed rates. That the terms are not found  in the tariffs is insufficient. For example, it could allege what it should have been charged under the tariffed rate or compared that to what it was actually charged. It simply asserts that charges such as the composite access-rate charge are not found in the tariffs and from that asks the court to let its claims go forward.


Even accepting as true Atlas’s allegation that the labels for the charges are not found in the tariffs, we cannot make a reasonable inference that the defendants have violated the filed-rate doctrine. At most, we can only infer that certain labels for charges are not found in the tariffs filed with the FCC. Such an inference is not the equivalent of a plausible allegation that the defendants have charged Atlas different rates from those on file with the FCC.

Atlas Trading v. AT&T, No. 16-11661 (Oct. 18, 2017) (emphasis added).

Standing Standard

In a reminder of the surprising complexity that can surround litigation about a party’s standing to bring a claim, in Intrepid Ship Mgmnt v. Malin Int’l Ship Repair, the Fifth Circuit noted a source of potential confusion about the applicable procedure: “Although a dismissal for lack of standing is appropriately judged under Federal Rule of Civil Procedure 12(b)(1), which allows a court to make limited findings of fact, the parties have argued this case under the standards applicable to ordinary summary judgment motions. Compare Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008) (explaining that the district court can resolve disputed facts as necessary to decide a challenge to subject atter jurisdiction), withInt’l Marine LLC v. Integrity Fisheries, Inc., 860 F.3d 754, 759 (5th Cir. 2017) (applying de novo review to summary judgment cases, explaining that “[s]ummary judgment is appropriate when ‘there is no genuine dispute as to any material fact.’”)”. No. 16-41074 (Oct. 11, 2017) (unpublished).

“False Start” in Ezekiel Elliott appeal

In a 2-1 decision, the Fifth Circuit found that Ezekiel Elliott failed to exhaust remedies within the NFL’s dispute-resolution process before filing suit, meaning that the federal courts lacked subject matter jurisdiction over his complaints. A dissent found a sufficient question about the adequacy of the process to justify the exercise of jurisdiction under the relevant authorities. NFLPA v. NFL, No. 17-40936 (Oct. 12, 2017). While of enormous interest to Cowboys fans, so far as arbitration goes, the opinion is centered on issues unique to collective bargaining agreements.

No, you didn’t expect that.

Plaintiff, invoking classical concepts about the measure of damages, argued that a “reliance” or “restitution” measure was superior to “expectancy” as applied to the breach of a stock-purchase contract. The Fifth Circuit disagreed: “Here, the jury found that there was an express contract, the stock agreement, so under Texas law, Jinsun may not recover anything beyond its expectancy damages unless Jinsun shows that the stock agreement is an exception to the general rule. Jinsun has failed to do so. Here, Jinsun expected to receive $56,000 from Alidad in exchange for the block of Luxeyard stock. Whether the stock price went up or down following the stock transfer, Jinsun was entitled to receive $56,000 from Alidad—no more and no less. Its expectancy damages under the plain terms of the express contract are therefore $56,000—no more and no less.” Jinsun LLC v. Mireskandari, No. 16-20275 (Oct. 5, 2017).

To be moot, or not to be moot, that is the question.

As a counterpoint to the recent case of Boerschig v. Trans-Pecos Pipeline, which rejected a mootness challenge in an injunction case about a condemnation (reasoning that the court could still “order that Trans-Pecos return Boerschig’s land to its precondemnation state.”), there is Dick v. Colorado Housing Enterprises, LLC, which found a request for an injunction became moot after the allegedly wrongful foreclosure occurred (rejecting “Plaintiff-Appellant[‘s] assert[ion] that because the Defendants-Appellees were the successful bidders at the foreclosure sale, this court can order them to cancel or rescind the foreclosure sale.”) The distinction between the two rests on case law unique to foreclosures, which the Dick panel used the Fifth Circuit’s “rule of orderliness” to organize and apply. No. 17-10357 (Oct. 4, 2017).