In United States ex rel. Montcrief v. Peripheral Vascular Assocs., P.A.., the Fifth Circuit addressed two sets of claims under the False Claims Act: the “Testing Only” claims and the “Double Billing” claims.

The court affirmed the district court’s grant of partial summary judgment on the Testing Only claims, finding them actionable because the claims were factually false. Specifically, the Court noted that Peripheral Vascular Associates (PVA) billed Medicare for vascular ultrasounds using “global” CPT–4 codes, before the professional component of the ultrasounds was completed.  This meant that the services billed were not fully rendered at the time of billing, making the related claims “factually false.”

In contrast, the Court reversed summary judgment on the Double Billing, which involved patients who received visits for other purposes as well as vascular ultrasounds, with the interpretive reports for the ultrasounds sometimes finalized after billing.  The Court concluded that the CPT–4 Manual was ambiguous regarding whether separate reports were required in this situation. No. 24-50176, Mar. 28, 2025.

Venue disputes—specifically, between courts in Washington DC and those in the Fifth Circuit—are again on the horizon as a result of challenges to aggressive use of immigration-related laws by the Trump Administration.

In yesterday’s case of J.G.G. v. Trump, the D.C. Circuit denied an emergency motion to stay TROs against the use of the Alien Enemies Act to detain and remove Venezuelan citizens. No. 25-5067 (D.C. Cir. March 26, 2026). While the operative judgment of the panel comprises only a one-page order, each of the three judges wrote an opinion (two concurrences and one dissent), as follows:

• Judge Karen Henderson noted that the Act grants the President near-blanket authority to detain and deport noncitizens affiliated with a belligerent state during times of war or invasion.  However, she underscored the necessity of judicial oversight, stating, “The Alien Enemies Act sets forth ‘conditions upon which it might be invoked’ but is silent as to ‘how long the power should last when properly invoked.'”
• Judge Patricia Millett argued that the government’s position, which would allow for the summary removal of individuals without any opportunity for judicial review, was fundamentally at odds with the Constitution’s guarantee of due process.
• Judge Justin Walker’s dissent contended that the plaintiffs’ claims should have been brought in the Southern District of Texas, where they were detained, rather than in the District of Columbia.  He also argued that the district court’s orders interfered with sensitive national security operations.

The Supreme Court today reversed the Fifth Circuit’s invalidation of an ATF regulation about “ghost guns,” noting that the relevant statute applied to “any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive.”

That grant of authority is readily distinguished from last Term’s opinion in Cargill v. Garland, which involved a statute focused on a specific type of firing mechanism.

In JSW Steel (USA) Inc. v. Nucor Corp., the Fifth Circuit affirmed the dismissal of JSW Steel’s antitrust claims against Nucor, U.S. Steel, and AK Steel.

The Court held that JSW failed to plausibly allege a conspiracy in violation of the Sherman Act.  The allegations of parallel conduct by the defendants, such as their simultaneous objections to JSW’s tariff exclusion requests and their similar creditworthiness requirements, did not sufficiently suggest a preceding agreement.  The Court emphasized that “parallel conduct that could just as well be independent action” does not meet the threshold for establishing a conspiracy under the Sherman Act.

Additionally, the Court found that much of the conduct alleged by JSW was protected under the Noerr-Pennington doctrine, which shields parties from antitrust liability when petitioning the government for favorable action.  That activity included the defendants’ certifications to the Bureau of Industry and Security (BIS) and their coordination in discussing changes to the steel Section 232 exclusion process. No. 22-20149, Mar. 17, 2025

In a famous dissent from a death-penalty case, Justice Harry Blackmun wrote: “From this day forward, I no longer shall tinker with the machinery of death ….”

Others have continued such tinkering, however, leading to the macabre question presented in Hoffman v. Westcott — whether the Eighth Amendment forbids execution by “nitrogen hypoxia” sa opposed to a firing squad.

The panel majority held that this question was for the state to resolve; the dissent, for the district judge based on the preliminary-injunction record. No. 25-70006-CV (March 14, 2025).

The recent vote against en banc review in Repub. Nat’l Comm. v. Wetzel, a case about the acceptable time frame for counting mail-in ballots, produced this configuration of votes and opinions:

The en banc Fifth Circuit recently denied review of Repub. Nat’l Comm. v. Wetzel – a panel opinon in a larger tradition of conservative distaste for mail. A dissent by Judge Higginson favorably noted commentary on the panel opinion, which draws an interesting distinction among (1) the parties’ briefs; (2) amicus submissions; and (3) public commentary, whether by academics or practioners (or earnest bloggers):

We benefit from lawyer insight and criticism. Though we receive amicus curiae briefs less frequently than the Supreme Court, they provide primary opportunity for non-party lawyers to give insight, albeit with stringent requirements. It is rarer that topflight lawyers, like Unikowsky, have time to offer scholarly critique of a case neither he, nor Bernstein, was retained to handle. Chief Justice Roberts recently reminded that “public engagement with the work of the courts results in a better-informed polity and a more robust democracy.” It is for this reason that the judiciary depends on lawyers, not just as party advocates, but also for all forms of engagement with courts. “[I]nformed criticism” of court opinions from lawyers unaffiliated with the parties is in that vital tradition.

I explored the interplay between non-litigation sources of information and the party-presentation principle in this Cornell Law Review article last year.

In Golden Bear Ins. Co. v. 34th S&S, LLC, the Fifth Circuit rejected an insurer’s declaratory-judgment action about coverage.

The Court emphasized that the Declaratory Judgment Act is intended to provide “early adjudication” of legal rights before disputes ripen into violations of law or breaches of contractual duty. In this case, the alleged misconduct by Golden Bear—negligently refusing to settle a claim—had already occurred, as evidenced by the jury’s verdict exceeding the policy limit.

Therefore, Golden Bear’s could not seek a declaratory judgment  to argue retroactively that it never had a duty to settle was inappropriate. More broadly, the Court observed:  “Allowing the complaint to proceed here would ‘enable a prospective negligence action defendant to obtain a declaration of non-liability,’ which ‘is not one of the purposes of the declaratory judgment act[].'” No. 24-20332, Mar. 14, 2025.

Despite an instruction not to consider interest in determining damages, and “[a]lthough jurors are presumed to follow jury instructions, that presumption does not prevent the court from observing and acting on an obvious failure to have done so.” Therefore, in Ramsey v. Sheet Pile LLC, when it was apparent that “the jury awarded damages on the loan based on the amount owed as of the date of the verdict, not as of the date [Plaintiff] filed suit,” the proper course was to have the district court offer an appropriate remittitur to restore order to the verdict while also carrying out its obligation to calculate post-judgment interest as an issue of law. No. 23-50911 (March 3, 2025).

Ramsey v. Sheet Pile LLC presents an interesting issue about the “prior material breach” doctrine under Texas law. In that case, the issue went nowhere because it had not been raised below and did not rise to the level of plain error. The specific question, though, is the extent to which “there is a bright-line legal rule that suing under a contract prohibits a plaintiff from relying on a defendant’s prior material breach to excuse his own breach” – a question that can become complicated if a contract dispute involves both monetary issues and nondisclosure-type obligations. No. 23-50911 (March 3, 2025).

Fans of the “Emergency!” TV show will recall Rampart General Hospital (right). In Rampart Resources v. Rampart/Wurth Holding, the Fifth Circuit evaluated the likelihood of confusion between two businesses that both used the name “Rampart”:

1. Type of Mark. The strength of Rampart Resources’ arbitrary trademark was balanced by widespread third-part y usage of the key portion of the mark. This digit weighed in favor of Rampart Resources, but not heavily.
2. Similarity Between the Marks. The similarity between the marks was not substantial. The only common element was the word “Rampart,” and the overall appearance, sound, and meaning of the marks were different. This digit weighed in favor of Rampart/Wurth.
3. Similarity of the Services. There was only a minor overlap in the services provided by the parties—both operated broadly in the real estate industry, but their specific services did not substantially overlap. This digit weighed somewhat in favor of Rampart Resources.
4. Identity of the Retail Outlets and Purchasers. The court found that the retail outlets and purchasers were not sufficiently similar to cause confusion. This digit weighed in favor of Rampart/Wurth.
5. Identity of the Advertising Media Used. Both parties used word-of-mouth and online advertising but the evidence was insufficient to make this digit probative, either way.
6. Defendant’s Intent. The court found no evidence of bad intent on the part of Rampart/Wurth.  This digit was neutral.
7. Actual Confusion. The court acknowledged some evidence of actual confusion, such as misdirected phone calls and a FedEx driver’s confusion. However, it found that this evidence was not particularly weighty and did not show that any confusion swayed consumer purchases.  This digit weighed slightly in favor of Rampart Resources.
8. Degree of Care Exercised by Potential Purchasers. The court found that the sophistication of the clients and the care they exercised in making purchasing decisions weighed against a likelihood of confusion. This digit weighed in favor of Rampart/Wurth.

Overall, the Court affirmed the district court’s decision to deny a preliminary injunction. No. 24-30111 (Feb. 24, 2025).

The dispute about the “spending freeze memo” from the start of the Trump Administration continues with this preliminary injunction – of particular interest is the detailed analysis of the “voluntary cessation” doctrine in the context of mootness.

At a recent BAFFC CLE program at the Texas A&M Law School in Fort Worth, the Fifth Circuit’s able clerk Lyle Cayce presented the most recent version of his office’s “Appeal Flowchart.” It’s a top-notch reference about that Court, and a good general guide to the workinsg of all appellate courts.

The Texas Lawbook reports that DOGE has emailed at least six federal judges in Texas asking them to justify their employment, along with staff and clerks. Link is here.

In State of Texas v. Trump, the Fifth Circuit considered whether an executive order by President Biden, mandating a $15 minimum wage for federal contractors, fell within his authority under the Federal Property and Administrative Services Act (FPASA). That statute lets the President “prescribe policies and directives that the President considers necessary to carry out this subtitle,” provided that these policies are consistent with the Act’s objectives. The court found that the Executive Order’s purpose of promoting “economy and efficiency in procurement by contracting with sources that adequately compensate their workers” aligns with the FPASA’s goals, and that the minimum-wage requirement was within the scope of his discretion. No. 23-40671 (Feb. 4, 2025).

Another lawsuit challenging a substantial federal-government reduction in force encountered a justiciability problem–this time, preemption by federal labor law (even though the agencies charged with implementing those laws have their own personnel issues).

Continuing a theme seen in an earlier DOGE-related ruling, a district judge in Washington DC denied a TRO in a data-access case, observing: “The court is aware that DOGE’s unpredictable actions have resulted in considerable uncertainty and confusion for Plaintiffs and many of their agencies and residents. But the ‘possibility’ that Defendants may take actions that irreparably harm Plaintiffs ‘is not enough.'” (emphasis in original, citations omitted).

The plaintiff in Pie Development v. Pie Carrier Holdings, Inc. tried to have its pie and eat it too, encountering a res judicata bar as a result of previous litigation. Specifically, in the earlier case, the plaintiff was given leave to replead and instead elected to appeal, after which the Fifth Circuit affirmed. In this, second, case, the Court held:

After the district court dismissed the Pie I claims without prejudice, Pie Development declined the opportunity to amend its complaint in the district court and chose instead to appeal. Although we have not directly addressed the application of res judicata in these unique circumstances, our caselaw suggests that there is a final judgment on the merits in such a case. When a prior action is dismissed without prejudice and the plaintiff, declining the opportunity to amend the complaint, appeals, the dismissal without prejudice converts to a dismissal with prejudice and constitutes a final judgment on the merits for res judicata purposes.

No. 24-60155 (Feb. 3, 2025).

I make a provocative point in Salon today, suggesting that a litigant unwilling to respect judicial mandates should not expect a warm welcome from the courts.

Standing rules apply to the left and the right, as shown by the District of the District of Columbia’s recent dismissal on standing grounds of a lawsuit brought by labor unions about the “buyout program” for federal employees. The plaintiff unions had the same threshold problems that the doctors’ organizations had in the Supreme Court’s mifepristone opinion from 2024.

In National Automobile Dealers Assoc. v. FTC, the Fifth Circuit vacated the FTC’s “Combating Auto Retail Scams Trade Regulation Rule” (CARS Rule) because the FTC failed to to issue an advance notice of proposed rulemaking (ANPRM) as required by its own regulations.

The court rejected the FTC’s argument that the Dodd-Frank Act exempted it from the ANPRM requirement.  While the Dodd-Frank Act allows the FTC to use regular APA procedures for rulemaking concerning auto dealers, it does not eliminate the FTC’s internal procedural safeguards. A dissent argued that the petitioners failed to show prejudice from the lack of an ANPRM, given their extensive participation in the rulemaking process. No. 24-60013, Jan. 27, 2025

Airlines for America v. DOT addressed when additional rulemaking notice is called for because of new factual information. The Fifth Circuit concluded that the Department of Transportation (DOT) had relied on new data from a study study, to justify its rule on airline fee disclosures without providing an opportunity for public comment on this data.

This omission was material because the study supplied basic assumptions used by the DOT to estimate the net benefits of the rule, which ranged from $30 million to $254 million annually. The Court stated that the DOT’s reliance on this new data without public input constituted a “serious procedural error.” Nos. No. 24-60231 and 24-60373 (Jan. 28, 2025).

The Fifth Circuit returned to the question of standing in Airlines for America v. DOT, as to the standing of Texas to challenge the DACA program. The Court reaffirmed that Texas has standing based on a “pocketbook-injury theory,” which asserts that the presence of DACA recipients imposes significant financial burdens on the state.

Specifically, Texas argued that it incurs over $750 million annually in costs related to emergency healthcare and public education for DACA recipients. The Court stated:  “Texas has made this showing by putting forward sufficient, unrebutted evidence to support the ‘common-sense assertion’ that, absent DACA, some recipients would leave the United States.”

The Supreme Court and the Fifth Circuit have not seen eye-to-eye in a number of recent cases that present questions of standing. In this case, however, the Court concluded that these recent cases did not unequivocally overrule the Fifth Circuit’s prior holding in an earlier appeal that concluded Texas had standing to challenge DACA. No. 23-40653, Jan. 17, 2025.

Texas Bankers Association v. CFPB presents a sign of the times, with the change of Presidential administrations: “A new President was inaugurated January 20, 2025. This case had already been set to be orally argued on February 3, 2025. The morning of oral argument, CFPB notified the court that “[c]ounsel for the CFPB has been instructed” by new leadership “not to make any appearances in litigation except to seek a pause in proceedings.” Accordingly, although both sides appeared in court as scheduled, only Texas Bankers addressed the merits.” No. 24-40705 (Feb. 7, 2025). A temporary stay was then ordered to allow the CFPB to finalize its decisionmaking about the case.

Cook v. Marshall addressed the issue of citizenship of a trust for jurisdictional purposes. The Fifth Circuit noted that “traditional trusts . . . were not considered distinct legal entities at common law, and hence cannot sue or be sued in their own name.”  Under that rule, only the citizenship of the trustee parties matters for diversity purposes.  Applied here, that rule means that complete diversity existed because the trustee parties, Cook and Marshall, were citizens of different states—Louisiana and Texas, respectively. The Court referenced the Seventh Circuit’s approach in the 2018 case of Doermer v. Oxford Fin. Group, which held that “when a trustee of a traditional trust ‘files a lawsuit or is sued in her own name, her citizenship is all that matters for diversity purposes.'” No. 24-30222, Jan. 23, 2025

My friend Arturo Ayala at CSBA recently wrote this useful article about what happens to a supersedeas bond when the appeal ends.

In McDonnell Grouo, LLC v. Starr Surplus Lines Ins. Co., the Fifth Circuit addressed the perennial topic of contract ambiguity; in this case, in the context of a builder’s risk insurance policy. The court affirmed the district court ‘s conclusion that the flood deductible provision in the policy was ambiguous.

The ambiguity arose from the language: “5% of the total insured values at risk at the time and place of loss subject to a $500,000 minimum deduction as respects … FLOOD.” The plaintiffs and the insurers had reasonable interpretations of this provision, but extrinsic evidence, in the form of industry standards and expert testimony, resolved the ambiguity. That extrinsic evidence clarified the term “VARTOL” (value-at-risk-at-time-of-loss) to mean the total value of the project at the time of loss, favoring the insurers’ interpretation. No. 23-30824, Jan. 29, 2025.

Bruen, Rahimi, and their history-focused perspective on the Second Amendment led to a firearms restriction being held unconstitutional because:

“[T]he text of the Second Amendment includes eighteen-to-twenty-year-old individuals among ‘the people’ whose right to keep and bear arms is protected. The federal government has presented scant evidence that eighteen-to-twenty-year-olds’ firearm rights during the founding-era were restricted in a similar manner to the contemporary federal handgun purchase ban, and its 19th century evidence ‘cannot provide much insight into the meaning of the Second Amendment when it contradicts earlier evidence.'”

Reese v. BATF, No. 23-30033-CV (Jan. 31, 2025) (citation omitted). (A demographer would note that the average lifespan in the 1790s was about 40 years, providing some perspective on the framers’ views about aging, although that number is likely skewed downward by the high infant mortality of the time.)

While the rescission of the recent “funding freeze” memo seems to end the present dispute, history teaches that the issues will return in new form, as was seen with the travel ban at the start of the first Trump Administration, vaccine mandates, and the efforts of the Biden Administration to forgive substantial amounts of student-loan observations. “Round Two” will doubtless feature a more focused assertion of executive power by the Trump Administration, and also more sophisticated challenges to that assertion – including the selection of substantive legal arguments and the identification of plaintiffs who have strong standing positions.

A new lawsuit brought by several state AGs expands the legal claims about the “funding freeze” to include several constitutional issues – whether those additional issues survive standing / justiciability challenges remains to be seen. To date, the Administrative Procedure Act claims have focused on OMB’s authority and not the longer-term issue of just what exactly agencies are supposed to do while the “freeze” is in place – and how that comports with the APA and those agencies’ enabling statutes and mandates.

Today’s ultra-aggressive “funding freeze” memo appears to be right out of the Dobbs playbook – take an action that is not allowed under current law (the Mississippi law at issue in that case, which was plainly unconstitutional under Roe/Casey) and present it to the modern-day Supreme Court conservative supermajority.

Understandably, public comment on the memo has focused on the Nixon-era Impoundment Act. But at the courthouse, the first filed lawsuit focused on the old warhorse of the Administrative Procedure Act – the law that repeatedly stymied aggressive administrative-agency action in both the Biden and the first Trump administration.

That’s wise as a matter of substantive law – there are fruitful arguments to be made under the APA – and as a matter of avoiding the Dobbs playbook of presenting a flashy constitutional issue. “Another” APA case is simply a less compelling topic for the Supreme Court to address.

In Baker Hughes Saudi Arabia Co. Ltd. v. Dynamic Indus., Inc., the Fifth Circuit addressed the issue of arbitrability under a subcontract for an oil-and-gas project in Saudi Arabia. It reversed the district court’s decision that denied a motion to compel arbitration, holding that the dissolution of the “DIFC-LCIA” (the arbitral authority specified in the agremeent) did not make the arbitration agreement unenforceable.

The Court emphasized that the parties’ dominant purpose was to arbitrate disputes generally, rather than to arbitrate exclusively before the DIFC-LCIA, so “the forum-selection clause (if it is one) is not integral to the subcontract ….” The Court further clarified that even if the DIFC-LCIA was unavailable as a forum, the district court should have considered whether the DIFC-LCIA rules could be applied by another available forum. No. 23-30827 (Jan. 27, 2025).

The Supreme Court clarified what pleading is relevant to a remand motion in a removed action, holding:

[T]he District Court here should have remanded Wullschleger’s suit to state court. The earliest version of that suit contained federal-law claims and therefore was properly removed to federal court. The additional state-law claims were sufficiently related to the federal ones to come within that court’s supplemental jurisdiction. But when Wullschleger amended her complaint, the jurisdictional analysis also changed. Her deletion of all federal claims deprived the District Court of federal-question jurisdiction. And once that was gone, the court’s supplemental jurisdiction over the state claims dissolved too. Wullschleger had reconfigured her suit to make it only about state law. And so the suit became one for a state court.

Royal Canin USA, Inc. v. Wullschleger, No. 23-677 (U.S. Jan. 15, 2025).

A case about hydrogen sulfide exposure foundered for lack of proof as to “general causation.” In examining the materials cited by the plaintiff’s expert on that point, the Court observed:

“Although we view the reliability of expert testimony ‘in light of the totality of the evidence,’ ‘[t]he totality of the evidence cannot prove general causation if it does not meet the standards for scientific reliability established by Havner. A plaintiff cannot prove causation by presenting different types of unreliable evidence.'”

Newsome v. Int’l Paper Co., No. 24-20126 (Jan. 11, 2025).

In Ambler v. Nissen, a Fifth Circuit panel dismissed a qualified-immunity appeal because of the materiality of the fact issues presented. The full court denied en banc review in a close vote:

A panel majority, after a motions panel accepted an interlocutory appeal, dismissed that appeal for lack of jurisdiction. The issue involved the appropriate measure for the calculation of “reasonable royalty” damages, and the majority reasoned:

If we reversed now, we would have no “immediate impact on the course of the litigation” because Silverthorne has not yet proven liability. The parties will proceed to trial regardless of whether we weigh in, and “nothing that we can do will prevent [the] trial.” Bear Marine, If Silverthorne fails to establish liability, our premature answer to the question will not have affected the litigation at all. Any dispute
about damages will have “evaporate[d] in the light of full factual development.” 

Even assuming arguendo that Silverthorne could establish liability, thereasonable-royalty standard may still not be controlling. Silverthorne claims that the district court’s order prevents it from proving damages. If that were true, the question could have controlled the case. As the district court noted, though, its order did “not automatically bar [Silverthorne] from proving damages,” as long as it does so according to the standard defined in [precedent].”

J.A. Masters Investments v. Beltramini, No. 24-20006 (Jan. 3, 2025) (citations and footnote omitted). A dissent had a different view of the legal issue and the section 1292 process.

“Plaintiffs contend that the district court erroneously permitted Mauro Beltramini (Beltramini’s son) to testify regarding the expenses incurred from the soccer matches when he had no personal knowledge or involvement with any of the matches. Even if that were true, Plaintiffs’ objection to Mauro’s testimony cannot be squared with their later assent to admit Joint Exhibit 1, an exhibit that included Mauro’s expenses calculations—the same exact content of his testimony. Plaintiffs have therefore waived any right to complain about it on appeal.”

J.A. Masters Investments v. Beltramini, No. 23-20292 (Jan. 3, 2025) (emphasis added).

Section 230 of the Commuications Decency Act says that no interactive computer service “shall be treated as the publisher or speaker” of third-party content. That law was of no help to a claim against Salesforce about alleged human trafficking, as the Fifth Circuit explained in A.B. v. Salesforce, Inc.:

Plaintiffs allege that Salesforce knowingly assisted, supported, and facilitated sex trafficking by selling its tools and operational support to Backpage even though it knew (or should have known) that Backpage was under investigation for facilitating sex trafficking. In essence, Plaintiffs allege that Salesforce breached a statutory duty to not knowingly benefit from participation in a sex-trafficking venture.

To state the obvious: this duty does not derive from Salesforce’s status or conduct as a publisher or speaker and would not require Salesforce to exercise publication or editorial functions to avoid liability. Rather, the duty simply requires that Salesforce not sell its tools and operational support to a company it knew (or should have known) was engaged in sex trafficking. This is not an action “quintessentially related to a publisher’s role.” Accordingly, section 230 does not immunize Salesforce from Plaintiffs’ claims.

No. 23-20604 (Dec. 19, 2024) (citations and footnotes omitted).

This notice, under Fifth Circuit precedent, abandoned the lender’s intent to accelerate a note obligation:

To the extent you have received demand letters with intent to accelerate the obligations under the above subject Note and any notice of acceleration of said Note prior to the date of this demand letter, be advised that any such demands or notices of acceleration have been withdrawn, cancelled, and abandoned.

No. 23-50662 (Dec. 20, 2024) (emphasis in original). The opinion discusses how the Circuit’s “rule of orderliness” applies to the issue at hand.

In a commerical fiduciary-duty dispute, DALF Energy v. GS Oilfield Services holds: “DALF proved each element of its breach of fiduciary duty claims based on Scribner’s falsification of production records, failure to disclose his relationship to O&GH, and failure to disclose his father’s relationship to TROFA”; and also: “DALF proved Scribner breached his fiduciary duty by placing ;P.E.’ after his name and failing to disclose his relationship to GSOS.” No. 24-50032 (Dec. 30, 2024).

Stone v. Graham, 449 U.S. 39 (1980), holds:

“Posting of religious texts on the wall  serves no such educational function. If the posted copies of the Ten Commandments are to have any effect at all, it will be to induce the schoolchildren to read, meditate upon, perhaps to venerate and obey, the Commandments. However desirable this might be as a matter of private devotion, it is not a permissible state objective under the Establishment Clause.“

Unsurprisingly, then, the Fifth Circuit voted 14-3 on December 30 to reject an overly enthuastic application for en banc hearing in Roake v. Brumley – the challenge to a Louisiana law about display of the Ten Commandments that is flatly inconsistent with the above Supreme Court holding.

A complex set of appeals about the Serta bankruptcy produced this on-target introduction – not phrasing that should be used in most cases, but completely apt for these complicated finance issues:

Illustrating the choppy waters that can surround a nationwide injunction, in December, Fifth Circit judges reached three different conclusions about whether to stay the Corporate Transparency Act and related administrative rules. The motions-panel majority held:

The district court concluded that both are unconstitutional and issued nationwide injunctions against each, despite no party requesting it do so and despite every other court to have considered this issue tailoring relief to the parties before it or denying relief altogether.

The third member of the motions panel concurred in part:

[She] agrees for an expedited appeal and agrees that a national injunction is not appropriate here, so she would grant a temporary stay of the preliminary injunction pending the decision of the merits panel regarding whether to deny a stay pending appeal as to the non-parties. However, she would deny the temporary stay as to the parties (while, of course, deferring to the merits panel on this point as well), including the members of NFIB, as long as their identities are disclosed to the government.

A later per curiam order, which may have issued from the merits panel, or may simply reflect communication with that panel, reached a different conclusion:

The merits panel now has the appeal, which remains expedited, and a briefing schedule will issue forthwith. However, in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.

These changes show how minor variations in panel makeup can have profound consequences when nationwide equitable relief is at issue. (The party-presentation issue referred to by the motions-panel majority is also addressed in my recent Cornell Law Review essay.)

In Alliance for Fair Board Recruitment v. SEC, the en banc Fifth Circuit held that the SEC should not have approved Nasdaq’s “Board Diversity Proposal.”

The Court reminded that the Act is focused on protecting investors from speculative, manipulative, and fraudulent practices, and promoting competition in the securities market; therefore: “SEC may not approve even an a disclosure rule unless it can establish the rule has some connection to an actual, enumerated purpose of the Act.” It rejected the SEC’s argument that the proposal would satisfy investor demand for diversity information, holding: “The purpose of satisfying investor demand for any and every kind of information about exchange-listed companies is not remotely similar to any of those stated purposes.” 

Cf. McCullough v. Maryland,17 U.S. 316 (1819) (“Among the enumerated powers, we do not find that of establishing a bank or creating a corporation. But there is no phrase in the instrument which, like the articles of confederation, excludes incidental or implied powers; and which requires that everything granted shall be expressly and minutely described.”).

The Court also found support for its holding in the major questions doctrine, given the expansive regulatory authority that it concluded would be needed for the SEC to implement the proposal. A dissent argued that the SEC had received substantial evidence that investors sought standardized information on board diversity, and noted the SEC’s limited statutory authority to review the rules of Nasdaq, a distinct and private entity (albeit one that is heavily regulated). No. 21-60626, Dec. 11, 2024 (9-8 vote).

Judge Oldham’s thoughtful dissent from the recent wreckage of an en banc proceeding provides fascinating historical background about courts’ traditional focus on decisions rather than opinions. That basic concept about the operation of appellate courts is useful in distinguishing holding from dicta, identifying the appropriate scope of appellate review, and clarifying questions about the law of the case / res judiciata effect of earlier judgments.

By including Roman courts in its historical review, the opinion reminds how much the American system has borrowed from the civilian tradition – a point of particular interest in Texas, where opinions from the 1840s by the Republic of Texas Supreme Court vividly illustrate the jostling between the English/American and Spanish/French systems on issues of property law at that time.

Lengthy en banc deliberation produced a one-paragraph, per curiam affirmance in Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp., a long-running challenge to a $20 million environmental fine. Judge Oldham’s dissent summarizes the bewildering array of votes and opinions:

The case of Chaudhary Law Firm, P.C. v. Ali reminds: “It is more than well-settled that only an aggrieved party may appeal a judgment.”  A party is not considered “aggrieved” if they have received a favorable judgment, even if the trial court made subsidiary findings or conclusions that were unfavorable to them.

The Court emphasized that “appellate courts review judgments, not opinions,” and a winning party “may not appeal for the sole purpose of seeking a more favorable opinion from the [trial] court.” The Court noted some situations that could warrant a relaxation of this principle, none of which were present in this case, where the defendant law firm obtained complete dismissal on the merits. No. 23-20362 (Dec. 9, 2024).

Savoie v. Pritchard affirmed that there is “life within” the fiduciary shield doctrine in Louisiana law. The doctrine prevents the exercise of personal jurisdiction over a corporate officer based solely on their corporate acts, and is “rooted in the principle that the acts of a corporate officer in his corporate capacity cannot form the basis for jurisdiction over him in an individual capacity.”  In this Erie case, the Fifth Circuit found implicit recognition of the doctrine in a Louisiana Supreme Court case.

The Court emphasized that “contacts made in [the defendant’s] corporate capacity do not count against him for purposes of personal jurisdiction unless one of two exceptions apply: (1) the defendant allegedly engaged in a tort for which he may be personally liable, or (2) the plaintiff demonstrates cause to pierce the corporate veil.”  No such claim was pleaded here or shown here, so the fiduciary shield doctrine barred personal jurisdiction over the defendant. No. 23-30783, Nov. 25, 2024.

This week, the Eastern District of Texas enjoined a sweeping set of Treasury regulations about disclosure of beneficial ownership, concluding that the Corporate Transparency Act and related regulations exceeded Congress’s constitutional powers. The Northern District of Texas rejected Boeing’s plea bargain of charges related to the 737 MAX debacle, concluding that inappropriately required consideration of race in selecting the monitors for a program that would administer Boeing’s compliance with agreed obligations going forward. The Boeing ruling may yet be resolved in the trial court, as the judge asked the parties to report back in 30 days, but the CTA case will certainly be headed to the Fifth Circuit soon.

In Van Loon v. Dep’t of the Treasury, the Fifth Circuit addressed the Treasury Department’s authority to regulate “property” under the International Emergency Economic Powers Act. After a detailed explanation of the blockchain technology involved, the Court held that certain “immutable smart contracts” do not qualify as “property” under IEEPA. The Court emphasized that “property” must be capable of being owned, and since the immutable smart contracts are unchangeable and unremovable, they cannot be owned or controlled by any entity, including their creators.

The Court further clarified that even under the Treasury’s own regulatory definitions, the immutable smart contracts do not fit within the scope of “property.” The court noted that these smart contracts are neither contracts nor services, as they do not involve any human effort or control once they are deployed. No. 23-50669 (Nov. 26, 2024).

In Willis v. Barry Graham Oil Service, L.L.C., the Fifth Circuit read the relevant contract provisions differently than the district court.

The district court concluded that Barry Graham Oil Service did not fall within the defense, indemnification, and insurance provisions of the Master Services Contract (MSC) between Shamrock Management and Fieldwood Energy. Specifically, it found that Graham was not covered by the MSC’s indemnity provisions because it was not part of the “Third Party Contractor Group” defined in the contract.

The Fifth Circuit held that Graham was covered under the MSC’s indemnity provisions. The MSC required Shamrock to “release, indemnify, protect, defend, and hold harmless such other Third Party Contractor(s) (and any such Third Party Contractor Group),” from claims arising from injuries to Shamrock’s employees.

Therefore, Graham, as part of Kilgore Marine Services’ Third Party Contractor Group, was entitled to indemnification. The contractual trigger for these obligations—cross indemnification “substantially similar” to Shamrock’s—was satisfied, obligating Shamrock to defend and indemnify Graham. No. 23-30609, Nov. 20, 2024.

In State of Texas v. U.S. Dep’t of Homeland Security, the Fifth Circuit addressed a challenge by Texas to a federal plan to cut razor wire installed by Texas at a border crossing. A 2-1 opinion ordered entry of a preliminary injunction against the planned wire-cutting.

The panel majority held the Administrative Procedure Act “clearly waives the United States’ sovereign immunity for Texas’s common law claims,” allowing Texas to seek injunctive relief against federal agencies and officers. In particular, Texas’s claims sought non-monetary relief and were based on the destruction of its property, which falls under the definition of “agency action” in the APA.

The majority also held that Texas showed a strong likelihood of success on its state law trespass-to-chattels claim–the concertina wire is state property, and Texas had shown that the federal agents’ actions were not justified by any exigency or statutory authority. As a result, the court granted Texas’s request for a preliminary injunction, enjoining federal agents from damaging or interfering with Texas’s concertina wire fence.

A dissent argued that Texas did not show the alleged “wire-cutting policy” constituted final agency action, which is a prerequisite for judicial review under the Administrative Procedure Act (APA). It also concluded that Texas’s state law claims were barred by intergovernmental immunity, as applying Texas tort law to federal agents would improperly control federal operations. No. 23-50869 (Nov. 27, 2024).

Cocroft v. Graham  addressed the constitutionality of Mississippi’s restrictions on medical marijuana advertising. Since marijuana remains illegal under federal law, including for medical purposes, Mississippi can lawfully restrict advertising related to it. The Fifth Circuit emphasized that “the First Amendment poses no obstacle to a ban on such speech” because the underlying commercial activity is not lawful under federal law.

Specifically, the Court rejected the plaintiffs’ argument that only the sovereign enacting the underlying prohibition (in this case, the federal government) could restrict related commercial speech. The Supremacy Clause ensures federal law’s primacy, making marijuana illegal in every state, including Mississippi. Therefore, Mississippi’s restrictions on medical marijuana advertising are constitutionally permissible. No. 24-60086, Nov. 22, 2024.

Jones v. Reeves grounded the long-flying litigation about governance of the Jackson Airport, observing:

There is also a fundamental disconnect between the Plaintiffs’ theory of employment-related injury, i.e. loss of per diem and travel reimbursement, and the remedy they seek, which is an injunction preventing abolition of the [Jackson Municipal Airport Authority]. … The elimination of JMAA and its replacement by the [Jackson Metropolitan Area Airport] Authority is the crux of this case. JMAA Commissioners’ per diem and travel expenses compensate and reimburse them only for their official duties as appointees. If the seat to which these duties are owed disappears, so too does the need for any associated reimbursement or compensation. With the elimination of the JMAA, there are no official duties requiring a per diem; and in the absence of JMAA -related travel expenses, there is nothing to reimburse.

No. 24-60371 (Nov. 19, 2024). Accordingly, the Court dismissed the case because the plaintiffs lacked individual standing, as their injuries were “institutional” and not personal.

Quoted in a recent American Prospect article, I muse that the New York AG probably won’t be headed down this way to sue the Trump Administration – link  here.

Contractual ambiguity is easily the #1 issue, in commercial cases, where thoughtful judges disagree. An example appears in Barrios v. Centaur LLC, where both the district court and the Fifth Circuit concluded that a maritime contract had two conflicting “escape” (i.e., “other insurance”) clauses. The district court found ambiguity, but the Fifth Circuit applied a Louisiana rule that “when faced with two escape clauses threatening coverage, courts must find them ‘mutually repugnant’ and make both policies liable for the claim” on a pro rata basis. No. 23-30892 (Nov. 15, 2024).

Texas Tribune v. Caldwell County affirms the right of public (and with it, pres) access to pretrial bail hearings, noting, inter alia:

Public access to bail hearings helps ensure, for example, that courts act fairly and justly in setting bail.46 When courts hold private proceedings, “[t]hey can . . . avoid criticism and proceed informally and less carefully.” Allowing public access encourages adequate preparation and, in turn, precision by the court. These assurances lead to “enhance[d] public confidence in the process and result” of the justice system.

The opinion also provides a sleek example of the “citational footnote” writing style that I believe significantly enhances readability. No. 24-50135 (Nov. 15, 2024).

A recent en banc vote produced an unusual 9-9 tie (and thus, affirmance of the panel opinion) because a senior judge sat on the relevant panel:

The majority opinion in National Center for Public Policy Research v. SEC found that a challenge to an SEC rule about the contents of proxy ballots was not justiciable, noting, inter alia:

     “[C]onsider the chain of assumptions the Center’s theory requires. First, we must anticipate that third-party companies uninvolved in this litigation will choose to exclude the Center’s measure in their proxy materials. We must do so mindful that many companies have since opted to include the Center’s measure without SEC intervention.   

       Next, we must assume the same third-party companies will base their exclusion decision on the same grounds as Kroger and seek SEC staff advice. No matter that at least thirteen independent reasons exist for excluding proxy statements, or that the SEC staff is under no obligation to offer its advice if requested.

     We must further assume that the SEC will issue the same no-action letter sent to Kroger, disregarding that staff advice is limited to each ‘particular instance.’ If SEC staff issues the letter, we must also infer that the third-party companies will ultimately follow through with their initial decision and exclude the proposal from their proxy materials.”

No. 23-60230 (Nov. 14, 2024) (emphasis added); accord FDA v. Alliance or Hippocractic Medicine, 144 S. Ct. 1540 (2024) (“The doctors have not shown that FDA’s actions likely will cause them any injury in fact. The asserted causal link is simply too speculative or too attenuated to support Article III standing.”). A dissent characterized thematter as one capable of repetition yet evading review.

Last Friday I received the inaugural “Lawyer’s Lawyer” award from the Dallas Bar Association, described by President Bill Mateja as a lawyer who “eats, breathes, and sleeps law” in comment and public thought about it. (Next to me is Courtney Marcus, filling in for Glenn West, who also received it.) Many thanks to Bill and the DBA, and to readers of this blog: longtime or new; enthusiastic or not!

Classically, judicial opinions consist of dicta and holding; the process of distinguishing the two and applying the correct rule of law in a specific case is the essence of the common-law method. A variant on that classical model sometimes arises in cases on remand from the U.S. Supreme Court, when the panel discusses that Court’s mandate; an example of which appears in the remand of NetChoice LLC v. Paxton, No. 21-51178 (Nov. 7, 2024).

The appellants in Legacy Recovery Servcs, LLC v. City of Monroe tried mightily, but was unable to persuade the Fifth Circuit that it had appellate jurisdiction over an order that partially granted and denied motions to dismiss.

The appellants argued that the ruling was an appelable collateral order. The Court saw otherwise, holding that the order did not “conclusively determine the disputed question” because it dismissed some claims while retaining others. Exercising jurisdiction over such an order risked encouraging piecemeal appeals that would require the Court to review the same intertwined claims multiple times.

Also, the issues resolved by the district court were not “completely separate from the merits of the action.” The dismissed and retained claims were based on the same statutes, and thus interwoven with the issues left  before the district court.

Lastly, the Court held that the order was not “effectively unreviewable on appeal from a final judgment,” pointing out that if the appellants’ concerns were valid, the Court could vacate the judgment and order a new trial after final judgment. No. 24-30211 (Nov. 6, 2024).

A 2-1 panel decision about an issue of federal-officer removal produced a close vote against en banc review, broken down as follows:

Even the most enthusiastic perspectives about federal-court jurisdiction have limits, as shown by Lowery v. Texas A&M Univ., a discrimination case filed by a college professor:

“Professor Lowery says that he is ‘able and ready’ to apply for lateral positions at [Texas A&M] University. But he never submitted an application to substantiate his interest. That fact is fatal in this case because there is little evidence that submitting a job application would be a futile gesture.”

No. 23-20481 (Oct. 30, 2024) (emphasis added).

Repub. Nat’l Comm. v. Wetzel  held that a Mississippi statute, allowing absentee ballots to be received up to five days after Election Day, is preempted by federal law, which mandates that all ballots must be received by Election Day. The court emphasized that the term “Election Day” refers to a singular day. Slate’s Mark Stern offers some provocative commentary about the potential impact – or lack thereof – of this ruling. No. 24-60395, Oct. 25, 2024.

In a per curiam opinion joined by eight judges, the Fifth Circuit held in Tesla v. NLRB that an NLRB decision about unfair labor practices by Tesla would be vacated and remanded for further proceedings:

We hold that Musk’s tweets are constitutionally protected speech and do not fall into the categories of unprotected communication like obscenity and perjury. And the Board does not dispute the general rule that it (like every other part of the Government) is powerless to delete protected speech.

But nine other judges didn’t join that opinion. As detailed below, Judge Haynes concurred in the judgment only, and eight judges joined a dissent. So what the NLRB is supposed to do on remand is not entirely clear.

Crosswell v. Rodriguez involved the sufficiency of a RICO pleading. The Fifth Circuit emphasized a RICO enterprise “must exist for purposes other than just to commit predicate acts,” which means that  “accusing a group of defendants comprising one natural person and a collection of legal fictions as undertaking a set of acts together, without providing any detail as to how they acted together, fails to provide a factual basis from which to plausibly infer the connected structure of an association.”

Here, while the plaintiffs’ allegations described a stand-alone set of events, the Court held that no allegations plausibly supported the theory that these transactions were part of a repeated and continuing scheme involving the defendants. No. 23-20535, Oct. 17, 2024.

In X Corp. v. Media Matters for Am., the Fifth Circuit granted a stay pending appeal of a a district court’s discovery order compelling Media Matters to disclose its donor information, citing First Amendment concerns.

The Court emphasized the loss of First Amendment freedoms, even for minimal periods, constitutes irreparable injury, and that the public interest is better served by avoiding the risk of a chilling effect on association, as “First Amendment freedoms need breathing space to survive.” The Court also noted the breadth of the discovery requests, proportionate to the needs of the case, and the risk that disclosure of the requested information could lead to harassment or intimidation of Media Matters and its donors. No. 24-10900, Oct. 20, 2024.

In Ultra Deep Picasso Pte. Ltd. v. Dynamic Indus., the Fifth Circuit addressed the critical issue of where a bank account can be garnished in an “in rem” proceeding grounded in admiralty law. Applying the general principle that the property must be found within the district where the trial court is located, the Fifth Circuit concluded that a bank account is located where its funds can be withdrawn — a standard that requires the physical presence of the bank or its branches within the district.

The court rejected the argument that it’s enough to have jurisdiction in the district over the garnishee bank. In rem jurisdiction “rests on the attaching court’s jurisdiction over both the garnishee and the property to be attached.” Because the garnishee bank didn’t have a branch in the district, but only a “representative office” with limited authority, the garnishment failed. No. 23-20357, Oct. 18, 2024.

Last week I touched on one significant copyright holding from UMG Recordings v. Grande Communications Networks. In that case, the Fifth Circuit also addressed the calculation of statutory damages under the Copyright Act.

Specifically, the Court held that statutory damages should be awarded per compilation (e.g., an album) rather than per individual work within the compilation. The court emphasized that the plain language of the Copyright Act mandates that “all the parts of a compilation or derivative work constitute one work” for the purposes of statutory damages.

This conclusion means that when multiple songs from the same album are infringed, the copyright owner is entitled to only one statutory damage award for the entire album, not separate awards for each song. The Court rejected the district court’s approach, which allowed separate statutory damages for each individual song. In so doing, the Fifth Circuit noted that many of the works in question were registered as compilations, with certificates of registration indicating notations such as “collective work” or “compilation of sound recordings.” No. 23-50162, Oct. 9, 2024.

In UMG Recordings v. Grande Communications Networks, the Fifth Circuit held that an internet service provider materially contributed to copyright infringement, by continuing to provide internet services to known infringing subscribers, without taking basic measures to prevent further infringement. As potential safety measures, the Court noted that the ISP could have terminated the accounts of repeat infringers (a measure that Grande had previously employed) or required infringing subscribers to contact the company to maintain their services No. 23-50162, Oct. 9, 2024.

In La Union del Pueblo Entero v. Abbott, the Fifth Circuit stayed an injunction against a Texas election law, emphasizing that the injunction was issued just three weeks before voting was set to begin–and after Texas had already started issuing mail-in ballots for the 2024 general election.  A concurrence focused solely on the issue of timing and did not address the merits issues that the panel majority also reviewed. No. 24-50783, Oct. 15, 2024.

The 2008 financial crisis produced a bumper crop of Fifth Circut opinions about basic issues involving home loans, because diversity jurisdiction drove much of that litigation into the federal courts. While (thankfully) there are far fewer cases about those issues now, the Fifth Circuit still writes in that important area, most recently in Couch v. Bank of New York Mellon, holding:

• Clock for foreclosure. “The Couches contend that [CPRC] § 16.025(a) and (b) require mortgagees to file suit and sell within four years to preserve the lien. Texas courts disagree. Section 16.035(a) ‘does not require that the actual foreclosure occur within the four-year limitation period, but rather, requires only that the party seeking foreclosure “bring suit … not later than four years after the day the cause of action accrues.”‘”
• Clock for adverse possession. “[T]he adverse possession clock did not start until the Bank acquired the property at the constable’s sale. The Couches have not adversely possessed the property for a sufficient period of time under any of the potentially applicable periods.”

No. 24-10297 (Oct. 11, 2024, unpublished).

The Fifth Circuit said “enough” as to a district court’s aggressive oversight of the Texas foster-care system, vacating a contempt order and requiring reassignment of the case on remand. Capturing the flavor of the opinion, towards the end of the section on reassignment, the Court said:

However, as a general rule of law federal judges are not allowed to become permanent de facto superintendents of major state agencies. Horne v. Flores, 557 U.S. 433, 453, 129 S. Ct. 2579, 2597 (2009) (“[T]he longer an injunction or consent decree stays in place, the greater the risk that it will improperly interfere with a State’s democratic processes.”); United States v. Mississippi, 82 F.4th 387, 400 (5th Cir. 2023) (“Micromanagement, enforced upon threat of contempt, does not reflect the principles of comity” in prison context.). Nor, under the federalist structure created by the Constitution, is it appropriate for federal court intervention to thwart the state’s self-management, where the state is taking strides to eliminate the abuses that led to the original decree. Horne, 557 U.S. at 448, 129 S. Ct. at 2593–94 (“Federalism concerns are heightened” where “a federal court decree has the effect of dictating state . . . budget priorities.”). Nor are federal judges even suited, by training or temperament, to manage institutions, personnel, or the provision of vital state services, even if counselled by monitors.

M.D. v. Abbott, No. 24-40248 (Oct. 11, 2024).

In RSM Prod. Corp. v. Gaz du Cameroun, S.A., the Fifth Circuit reversed the district court’s decision to vacate a revised arbitral award that reduced the damages awarded from $10.5 million to $6.5 million. The Court held that the arbitral tribunal had the authority to correct “computational errors” in its initial award and to determine what constituted such errors under the International Chamber of Commerce Rules, which the parties’ agreements incorporated. Applying the highly deferential standard of review for such issues, the Court held that the tribunal “arguably construed the parties’ contracts” when it issued the corrected award, even if it made a mistake in its interpretation.

The Court rejected RSM’s argument that the tribunal exceeded its powers by reconsidering the merits of RSM’s claims. Distinguishing RSM’s authority, the Court noted that the ICC rules allowed this tribunal to correct any “clerical, computational or typographical error, or any errors of similar nature contained in [the] award.” The Court emphasized that “[t]he potential for … mistakes is the price of agreeing to arbitration” and that “[t]he arbitrator’s construction holds, however good, bad, or ugly.” No. 23-20583, Sept. 19, 2024.

Quoted in a provocative new article in Mother Jones about the Fifth Circuit, I point out that it’s the venue of choice these days for administrative-law disputes.

Hon. Jennifer Walker Elrod has taken office as the new Chief Judge of the Fifth Circuit, succeeding Hon. Priscilla Richman. The Texas Lawbook has a good story on this “changing of the guard” for this critical leadership role. The new Chief tells the Lawbook:

“I believe that we are all in this endeavor together to uphold our Constitution and try to follow the rule of law and this enterprise works best when everyone gets to participate and have their say … And we can learn from each other if we’re all at liberty to engage. … I also believe iron sharpens iron … by learning what others who think differently believe, and what the basis for that belief is, that can help you to better reinforce your view, or perhaps, to change your mind.”

Cure & Assocs., P.C. v. LP Fin., LLC addreses whether nonsignatories to an arbitration agreement can be compelled to arbitrate under state-law equitable estoppel principles. The Fifth Circuit held that these nonsignatories could be compelled, because they  received direct benefits from the contractual relationship between the two signatories. Specifically, the Court noted that one of the nonsignatories was formed specifically to facilitate one signatory’s business with the other, sharing clients, employees, and office space. Under both California and Texas law, a nonsignatory can be compelled to arbitrate if it “deliberately seeks and obtains substantial benefits from the contract” with an arbitration clause. No. 23-40519, Oct. 1, 2024.

If you enjoyed my article in the Cornell Law Review Online earlier this year about the party-presentation principle, hopefully you will also enjoy a new article of mine in the Texas Law Review Online. Examining cases from the 2023-24 Supreme Court term, it considers whether “originalism” and modern economic theory can comfortably coexist.

Dwyer v. United Healthcare Ins. Co., No. 23-50439 (Sept. 19, 2024), vitalizes the technical and often defense-favoring framework of ERISA benefits litigation, challenging virtually all material points–factual and legal–put forward by a plan adminstrator in its handling of claims relating to a serious anorexia case. On the facts, the opinion proceeded as follows, pointing out numerous inconsistencies between what the administrator contended and what the record, in fact, showed:

Unsurprisingly, given all three judges’ discomfort with the Fifth Circuit precedent that dictated the panel holding in Abraham Watkins v. Festeryga, that case will be considered by the en banc court. The issue, as summarized by the panel majority, is this:

Edward Festeryga, an attorney embroiled in a dispute with his former law firm, wants this case heard in federal court and contends we have appellate jurisdiction over the district court’s remand order because waiver is neither an issue of subject-matter jurisdiction nor a defect in removal procedure under 28 U.S.C. § 1447(c). We agree, but our 40-plus-year-old precedent provides otherwise, holding that a waiver-based remand order is jurisdictional under § 1447(c) and thus unappealable under § 1447(d).

While no longer in the academy, the capable Rory Ryan offered this insightful analysis of this case on X.

In TIG Ins. Co. v. Woodsboro Farmers Coop., the Fifth Circuit identified fact issues that precluded summary judgment in an insurance-coverage case.

A key is whether damage to certain grain silos was “property damage” under a CGL policy. The diistrict court concluded that damage was due to defective construction. The Fifth Circuit credited the insured’s evidence that wind and weather caused the silos’ metal parts to degrade, bend, and fatigue. This evidence, including testimony from an inspector who saw the damage, supported the insured’s argument that the damage was not merely cosmetic but a “harmful change in appearance, shape, composition, or some other physical dimension to the claimants’ property.”

The Court also noted a fact issue about whether the damage occurred during the policy period, emphasizing that under Texas law, “occurred means when damage occurred, not when discovery occurred,” making it irrelevant that the damage was first observed after the policy period expired. No. 23-40435, Sept. 20, 2024.

In Favre v. Sharpe, a Hall of Fame NFL player contended that another Hall of Fame player defamed him during a TV broadcast. The Fifth Circuit affirmed the dismissal of the defamation claim, reasoning:

Sharpe’s statements–in response to facts widely reported in Mississippi news and specifically in the just-released Mississippi Today article–could not have been reasonably understood as declaring or implying a provable assertion of facts. His statements are better viewed as strongly stated opinions about the widely reported welfare scandal. 

No. 23-6010 (Sept. 16, 2024).

An old adage cautions that “house guests, like fish, begin to smell after too long.” So too with exotic arugments about jury-trial rights, fueled by the Supreme Court’s vindication of such rights in an SEC enforcement action in SEC v. Jarkesy.

Specifically, in In re Abbott, Texas sought mandamus relief to compel a jury trial in its dispute with the United States about floating obstacles in the Rio Grande, arguing that the U.S.’s claim was analogous to a common-law claim for ejectment. The Fifth Circuit rejected that argument … because it isn’t:

Even if we did agree that this suit concerns competing claims over the rights to “possess” and “exclude” from the Rio Grande, it is no mere garden-variety dispute about “sticks in the bundle of rights that are commonly characterized as property.” … The only appropriate analogy for a [Rivers and Harbors Act] claim that has been presented by the parties is abatement of a public nuisance or  purpesture. As the United States points out, there is a long tradition of equitable suits to clear obstructions upon public highways.

No. 24-50620 (Sept. 20, 2024).

In Keck v. Mix Creative Learning Center, LLC, the Fifth Circuit affirmed summary judgment for art studio that used the plaintiff’s copyrighted artworks (image of dogs) in online art kits for children. The Fifth Circuit found fair use, because the studio’s use of the artwork was transformative and did not harm the market for the plaintiff’s works; as the district court had observed, the studio “drew on Plaintiff’s art not for its inherent expressive value but for what it, accompanied by materials and instruction in art theory and history, could teach students.”  No. 23-20188 (Sept. 18, 2024).

Nat’l Infusion Center Ass’n v. Becerra returns to the issue of standing in administrative law cases–a topic where the Fifth Circuit has had an unfortunate track record before the Supreme Court. The majority holds that the that the National Infusion Center Association has standing to challenge the “Drug Price Negotiation Program” established by the Inflation Reduction Act, noting procedural and economic injury.

As to economic injury, the Court held: “NICA has shown that at least one of its members’ drugs will be subject to the Program, that the Program will lower the price for that drug, and that the lower price will lead to lower revenue for the member that administers the drug.” Critical to this holding–and the distinction of recent precedent about probabilistic future injury–was the majority’s conclusion that:

“predicting a profit seeking business’s response to changing economic incentives simply requires determining the direction in which the incentives are changing. Because the third-party decisions in NICA’s theory are guided by basic economic rationality, NICA has ‘thread[ed] the causation needle’ …”

(emphasis added). A dissent emphasized that NICA’s members do not have a concrete interest in profiting from Medicare reimbursements, as the statute does not entitle them to a profit, and that the complaint was filed before HHS announced the drugs selected for negotiation–creating tension iwth the rule that standing must exist at the time suit is filed. No. 24-50180 (Sept. 20, 2024).

Fittingly for a Friday, 600Camp celebrates its thirteenth anniversary of reasonably faithful reporting, comment, analysis, and meme-making about business-related cases in the U.S. Court of Appeals for the Fifth Circuit. You can celebrate by making some bread pudding with this classic recipe from Galatoiires, the grande dame of New Orleans Creole restaurants.

Occidental Petroleum Corp. v. Wells Fargo Bank, N.A. presents an Erie case, governed by Texas substantive law, as to whether the parties formed a contract. No. 23-20318 (Sept. 18, 2024).

The Fifth Circuit held that Wells Fargo was judicially estopped from arguing that a contract was not formed. Under its precedent: “Judicial estoppel ‘prevents a party from asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding.’” (emphasis added).

But as a matter of Texas substantive law: “[J]udicial estoppel applies only if the successful representation arose in a different case or, at most, ‘in another phase’ of the same case. … By contrast,  “[c]ontradictory positions taken in the same proceeding may raise issues of judicial admission but do not invoke the doctrine of judicial estoppel.”  Fleming v. Wilson, No. 22-0166 (Tex. May 17, 2024). (emphasis added).

The question whether judicial estoppel is substantive or procedural, and thus whether Erie applies to a federal court’s choice of law about that matter, is not addressed.

In Century Surety Co. v. Colgate Operating, LLC:

• The parties’ contract required Colgate (an oil well operator) and Triangle (a consultant) “to purchase indemnity insurance with limits the lesser of (1) ‘not less than $5 million’, or (2) ‘the maximum amount which may be required by law, if any, without rendering this mutual indemnification obligation void, unenforceable or otherwise inoperative.'”
• Clause 2 referred to a potential legislative restriction on indemnity agreement that didn’t come to pass.
• The district court say Clause 1 as setting a ceiling but not a floor on the indemnity obligation, but the Fifth Circuit saw the clause as setting both: “At heart, Century’s position assumes that Colgate set out a $76 million dollar indemnity obligation without clearly saying so in the contract by virtue of policies that Colgate acquired years after it had entered into the [contract].”

No. 23-50530 (Sept. 10, 2024).

28 U.S.C. § 1782 allows foreign parties to petition U.S. federal courts for assistance with discovery. When a district court rules on such an application, the Fifth Circuit expects an explanatoin:

… the district court’s order denying Paramo’s motion to quash is plainly deficient because it does not meaningfully engage with any of part of the § 1782 inquiry. Indeed, it does not engage at all beyond a barebones reference to “the Motion, the Response, the record and the applicable law.” And the Banorte Parties’ contention that the ruling is salvageable because “the district court referenced and analyzed the relevant factors” in its initial order granting § 1782 assistance is unavailing because, even there, the court did no more than recite the applicable factors. Had the court analyzed the factors, even summarily, either in the instant order denying Paramo’s motion or by reaffirming substantive analysis articulated in granting the initial § 1782 petition, this would be a different case.

Banco Mercantil de Norte, S.A. v. Paramo, No. 24-20007 (Aug. 28, 2024).

In Tesla, Inc. v. Louisiana Automobile Dealers Assoc., the Fifth Circuit addressed Tesla’s challenges to Louisiana’s automobile dealership regulations, which prohibit manufacturers from selling directly to consumers and performing warranty services for cars they do not own.

• Due Process. The Court found that Tesla had plausibly alleged a due process violation. The Commission’s composition, with members who are direct competitors of Tesla, created a “possible personal interest” that could bias their decisions, which was sufficient for the Rule 12 stage.
• Antitrust. From there, the Court vacated and remanded the dismissal of Tesla’s antitrust claim, noting that the due process ruling fundamentally altered the grounds on which Tesla’s alleged antitrust injury was based. Tesla’s allegations of exclusion from the market due to the Commission’s actions could constitute a plausible antitrust injury.
• Equal Protection. The Court affirmed dismissal of Tesla’s equal protection claim, concluding that preventing vertical integration and potential abuses of market power were legitimate state interests justifying the regulations.

A dissent saw matters differently, focusing primarily on the due-process claim and its reliance on board structure. No. 23-30480, August 26, 2024.

In Reule v. Jackson, the Fifth Circuit affirmed that a plaintiff lacks standing to challenge procedural rules, when those rules apply to meaningless substantive activity. A group of plaintiffs, declared as “vexatious litigants” under Texas law claimed that the procedural requirements thus placed on them by Chapter 11 of the Texas Civil Practice & Remedies Code were unconstitutional. The Court held that they lacked standing because their real grievance was with the original court orders declaring them vexatious, not with the officials who enforced those orders. Even if the procedural requirements were lifted, the plaintiffs would still face dismissal as a substantive matter. No. 23-40478, August 19, 2024

Shinsho Am. Corp. v. TransPecos Banks, SSB concluded that TransPecos Banks authorized HyQuality to sell its inventory, including the steel at issue, free of TransPecos’s security interest as allowed by section 9.315 of the UCC. This decision was based on the understanding between TransPecos and HyQuality that selling inventory was essential for HyQuality’s business operations, and that the proceeds from these sales would not be used to repay TransPecos’s loans directly. The proceeds were intended to be reinvested into the business, a practice TransPecos encouraged to avoid violating SBA rules and to support HyQuality’s ongoing operations. No. 23-20520 (Aug. 19, 2024).

In Arms of Hope v. City of Mansfield, the Fifth Circuit examined when a case becomes moot during an interlocutory appeal. The Court distinguished between the mootness of the entire case, on the one hand, and the mootness of the specific issues presented in an interlocutory appeal, on the other.

Here, because the City of Mansfield amended its ordinances about “Unattended Donation Boxes,” the issues on interlocutory appeal from a preliminary injunction no longer had practical significance.

Citing U.S. Navy SEALs 1-26 v. Biden, the Court explained that when an interlocutory appeal becomes moot, it doesn’t stop the lower court from dealing with the remaining issues. Although the new ordinances didn’t completely address all concerns, the Court determined that these issues should be resolved by the district court rather than through a moot appeal. No. 23-10656, August 21, 2024.

In Kansas City So. Rwy. Co. v. Sasol Chemicals (USA), LLC, the Fifth Circuit addressed whether “track” in a lease agreement included the track that forms part of the switches.

The district court found the contract ambiguous because “track” was not explicitly defined to include or exclude switches.

The Fifth Circuit disagreed, noting that dictionaries define “track” as the continuous line of rails on which railway vehicles travel. “Switches,” as movable rails, are part of the track infrastructure. From there, the Court noted that throughout the lease, treating “track” and “switches” as mutually exclusive would lead to absurd results, such as gaps in maintenance obligations, liability allocations, and safety requirements.

The Court acknowledged the parts of the lease relied upon by the district court, which referred to “track infrastructure, switches, and tracks,” but reasoned that while these terms are sometimes listed separately, that doesn’t mean they were mutually exclusive. The separate references likely reflected the need to address different components of the railyard in detail. No. 23-10048, August 20, 2024.

The great Sherlock Holmes story The Hound of the Baskerviles took place on the English moor. The Fifth Circuit case of Diamond Services Corp. v. RLB Contracting, Inc., No. 23-40137 (Aug. 16, 2024), also involved a promlem of mooring:

Restaurant Law Center v. U.S. Dep’t of Labor presents a case study in review of an agency regulation after Loper-Bright:

• 29 U.S.C. § 203(t) says, in relevant part, that a “tipped employee” means “any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.” (emphasis added).
• The Labor Department regulation implementing that statute focused on the amount of time, during the work period, that the employee engaged in tip-eligible activity; in summary: “An employer may take the tip credit for tip-producing work. But if more than 20 percent of an employee’s workweek is spent on directly supporting work, the employer cannot claim the tip credit for that excess. Nor can directly supporting work be performed for more than 30 minutes at any given time. An employer may not take the tip credit for any time spent on work not part of the tipped occupation.” (footnote omitted).
• Without the Chevron backstop, that regulation was invalid because it didn’t fit the statute’s unambiguous terms: “'[E]ngaged in an occupation in which [the employee] customarily and regularly receives more than $30 a month in tips’ cannot be twisted to mean being ‘engaged in duties that directly produce tips, or in duties that directly support such tip-producing duties (but only if those supporting duties have not already made up 20 percent of the work week and have not been occurring for 30 consecutive minutes) and not engaged in duties that do not produce tips.'”

“In short, as to supporting work, the Final Rule replaces the Congressionally chosen touchstone of the tip-credit analysis—the occupation—with one of DOL’s making—the timesheet.” No. 23-505762 (Aug. 23, 2024).

In Mission Pharmacal Co. v. Molecular Biologicals, Inc., the Fifth Circuit reversed the district court’s conclusion that a contract was “unambiguously silent” about certain reimbursements.

The case turned on the term “chargeback management.” The Court emphasized that the contract contemplated credits being issued to wholesalers, which undermined Molecular’s argument that Mission unilaterally assumed that obligation without contractual support:

“[F]aced with the question of whether the meaning of chargeback services includes reimbursement from Molecular, the fact that one answer leads to a harmonious contract, while the other leads to a dissonant one, is informative in determining the meaning of the term.”

No. 23-50321 (consolidated with No. 23-50446), August 16, 2024.

Mieco LLC v. Pioneer Natural Resources USA, Inc. involved a dispute over a natural gas supply contract affected by Winter Storm Uri.

Pioneer Natural Resources invoked the contract’s force majeure clause to excuse its failure to deliver gas during the storm. The clause defined force majeure as an “event or circumstance which prevents one party from performing its obligations,” and specified that the event must be beyond the party’s reasonable control and not due to its negligence. The clause further required the party to be “unable to overcome or avoid” the event “by the exercise of due diligence.”

The Fifth Circuit upheld the district court’s conclusion that “prevent” does not mean performance must be impossible, but can also include a significant hindrance or impediment. That said, the Court reversed summary judgment on whether Pioneer exercised the necessary “due diligence” to mitigate the storm’s effects. The clause required Pioneer to make reasonable efforts, and the Court identified  factual disputes about whether Pioneer could have purchased spot market gas to fulfill its obligations, leading to a remand for further proceedings. No. 23-10575 (July 16, 2024).

In the high-profile Dallas case challenging the FTC’s new rule about noncompete enforcement, Judge Ada Brown ruled for the plaintiffs in all respects. Ryan LLC v. FTC (N.D. Tex. Aug. 20, 2024). The opinion sidesteps nagging questions about the propriety of a nationwide injunction by focusing on the plain terms of the Administrative Procedure Act:

In Canadian Standards Assoc. v. P.S. Knight Co. the Fifth Circuit resolved a copyright case about the reproduction and sale of Canadian model codes involving the Candaian electrical, propane, and oil-pipeline industries. Each of the relevant codes was fully incorporated into Canadian law in those areas.

The Court held that once these model codes were enacted into law, they lost their copyright protection under U.S. law, referencing its earlier decision in Veeck v. Southern Bldg. Code Congress, Int’l.  The Court also rejected CSA’s efforts to distinguish Veeck, noting that the legal principle–incorporation into law means a loss of copyright protection–applied equally to the Canadian context. 23-50081; Aug. 15, 2024.

The Fifth Circuit addressed a range of trademark-related claims about a group of restaurants in Molzan v. Bellagreen Holdings, LLC, and reversed the grant of a Rule 12(b)(6) motion to dismiss about them.

• Trademark infringement. The plaintiff adequately alleged that the defendants kept using his “Ruggles” trademarks after the termination of their license, creating a likelihood of confusion. Specifically, the Court noted that the use of the “Ruggles Green” trademark in subdomains and redirections to the Bellagreen website. These actions made it “facially plausible that the Bellagreen Defendants were using the Ruggles and Ruggles Green trademarks and that use was creating confusion on the internet.”
• False advertising. Statements on the Bellagreen website, suggesting that Bellagreen was formerly Ruggles Green, and that the quality of food had not changed since 2008, could mislead consumers into believing that Bellagreen was still affiliated with the original Ruggles Green restaurants. The plaintiff’s allegations about these matters thus stated plausible claims.
• Trademark dilution. The Court affirmed the dismissal of the federal dilution claim but reversed the dismissal of the state-law claim. The Court recognized that while the “Ruggles” mark may not be famous nationwide, the plaintiff sufficiently alleged that the mark was famous within the Houston area.

No. 23-20492. Aug. 12, 2024

Dickson v. Janvey clarifies the limits of a district court’s power to issue a global bar order. The Fifth Circuit held that the district court overstepped by attempting to enjoin foreign liquidators—who were not subject to its personal jurisdiction—from pursuing claims related to the Stanford Ponzi scheme in Switzerland. As the Court noted, “no in personam jurisdiction, no injunction,” rejecting the idea that a court’s in rem jurisdiction over a receivership estate could justify expansive orders against parties beyond its reach. No. 23-10726 (Aug. 15, 2024).

The Kobayashi Maru was an impossible test used by Star Trek’s Starfleet Academy to challenge cadets. The plaintiff in Zaragoza v. Union Pacific R.R. Co. faced a similarly difficult challenge with the Ishihara test for color-blindness, leading to a dispute whether he should have been allowed to continue working as a train conductor. The Fifth Circuit held that limitations on his claim had been tolled:

“Zaragoza was included in the Harris class, as pled in February 2016 and as initially certified in February 2019. Therefore, his disability discrimination claims were tolled from the time they accrued until he asserted them, as an individual claimant, with the EEOC in March 2020.”

No. 23-50194 (Aug. 12, 2024).

Dickson v. Janvey, a dispute about the scope of an anti-litigation injunction, offers two basic reminders about the process of separating holding from dicta:

• Not discussed, likely not holding. “[W]e have previously held that a district court’s power over a receivership enables it to enjoin third parties or non-parties from pursuing certain claims involving the res of the receivership estate. But our statements in those cases implicated the equitable remedies available to the district court and not its jurisdiction. No one objected to personal jurisdiction in those cases, likely because any such objection would have been frivolous. But even if there were a latent in personam defect in those cases, our silence could never be construed as an implicit holding.” (citations and footnotes omitted).
• Not necessary, likely not holding. “Hall suggested in dicta that federal courts may enter in rem injunctions in aid of a previous in rem judgment.  It is unclear to us what the Hall court meant by this dicta.  But … the Hall court’s reference to an ‘inrem injunction’ was unnecessary to its decision. Federal jurisdiction in that
  case was not in rem. So the court’s in rem discussion was nonbinding dicta.” (citations omitted).

No. 23-10726 (Aug. 9, 2024) (Enthusiasts of dicta-holding distinctions will recall that courts have discretion whether to give effect to obiter dicta–an unnecessary but thoughtful statement–under the circumstances of a particular case.)

Gibson, Inc. v. Armadillo Distribution Enterprises, Inc. presented a trademark dispute about the iconic “Flyng V” electric guitar; the appellate issue was the admissibility of evidence about third-party use before 1992–five years before the relevant party acquired the rights to the relevant marks. The Fifth Circuit held that the district court’s time limit wasn’t justified by Fed. R. Evid. 403 or the applicable trademark law, concluding that it was potentially probative as to whether the mark was “generic” and thus deserving of any protection under trademark law. No. 22-40587 (revised August 8, 2024) (applying Converse v. Int’l Trade Comm’n, 909 F.3d 1110 (Fed Cir. 2018)).

The issue in Gibson, Inc. v. Armadillo Distribution Enterprises, Inc. was the admissibilty of evidence about third-party use of an alleged trademark. After concluding that the trial court erred in excluding that evidence, the Fifth Circuit considered whether the error was harmful. To illustrate that concept, the Court discussed a helpful general case on that issue, Bocanegra v. Vicmar Services, 320 F.3d 581 (5th Cir. 2003), which it summarized as follows (citations omitted):

In Bocanegra v. Vicmar Services, Inc., a pedestrian was fatally injured when he was struck by a streetsweeper on the median of a highway. On the eve of trial, the pedestrian’s estate sought to introduce evidence demonstrating that the driver of the streetsweeper was impaired by the use of marijuana a few hours prior to the fatal collision. Citing Rule 403 and the Daubert standard, the district court granted the driver’s motion in limine and excluded the driver’s expert testimony and an admission from the driver that he had smoked marijuana a few hours before the incident. … On appeal, this court determined that the district court’s “reliance on Rule 403 as another basis to exclude [the relevant expert] testimony concerning cognitive impairment resulting from [the driver’s] ingestion of marijuana” constituted an abuse of discretion. This court further held that the error affected the pedestrian’s substantial rights because “the jury was not presented with a complete picture of what happened on the night in question.” This court concluded that the pedestrian’s estate was left with no means of countering the driver’s argument that he “reacted reasonably and did the best he could under the circumstances.”

No. 22-40587 (Aug. 8, 2024). From there, the Court concluded that the exclusion of the third-party use evidence in the case at hand prevented the jury from getting a complete picture of the alleged trademark’s use. PREVIEW: I have an article coming out in the Texas Law Review Online this fall that uses the metaphor of a “complete picture” to analyze the past SCOTUS term’s cases about the use of history.

I take the reins in this Bloomberg article today about the U.S. Chamber of Commerce choosing to file lawsuits about administrative-agency rules in Texas / the Fifth Circuit.

A summary-judgment affidavit can clarify, but not contradict, prior testimony. In Keiland Construction LLC v. Weeks Marine Inc., the Fifth Circuit described an example of permissible clarification;

     For instance, Weeks stated in its certified discovery responses that it found Keiland’s rates for its project manager and superintendent to be “excessive.” Moreover, Hafner testified that “the project manager, superintendent, and estimator are overhead people and shouldn’t be included in the [actual] cost at all.” And Hafner—at trial and in his affidavit—testified that he could not calculate the costs because of “discrepancies” in the claimed costs. So he simply hypothesized an “hourly rate . . . that [he] believed could be justified.”

     Keiland fails to show how, in any of these particulars, Hafner’s affidavit “impeaches,” rather than “supplements” or “explains,” the previous testimony.

No. 23-30357 (July 25, 2024) (footnotes omitted).

Escobedo v. Ace Gathering, Inc. invovlved “Crude Haulers,” who are “drivers of large, 18-wheeled tanker trucks who drive to producers’ oil fields, load crude oil onto their trucks, and then transport that oil on public roads and highways to an ‘injection point’ on a pipeline.”

While that activity is conducted within Texas, the pipelines carry most of the oil to customers and markets in other states. The question was whether the drivers were engaged in “interstate commerce” within the meaning of the Motor Carrier Act of 1980.

While the pathway to the present legal standard was not free from detours, the standard itself is clear–“purely intrastate transportation rises to the level of interstate commerce when the product is ultimately bound for out-of-state destinations, just as the crude oil was here,” and no evidence suggested that the oil “came to rest” at a storage facility to potentially end its interstate journey. No. 23-20494 (July 31, 2024).

Examples of contract ambiguity don’t come along every day, so they deserve careful study when they do. Keiland Construction v. Weeks Marine found ambiguity because of tension in a contract between Section 5, titled “COMPENSATION”:

This language was followed by a schedule of lump-sum prices for various services. The other clause was Section 9, titled “TERMINATION FOR CONVENIENCE, which said in relevant part:The Fifth Circuit agreed with the district court that the combination of these two provisions produced ambiguity: “Keiland’s reading, that the sections required compensation for pre-termination work on a lump-sum basis and post-termination work on a cost-plus basis, is plausible. But so is Weeks’s, namely that Section 9 operated to convert all compensation due Keiland to cost-plus upon termination—particularly given that Section 9 specifies payment for 21% of costs “for overhead and profit associated with Work through the date of termination.”  No. 23-30357 (July 25, 2024).

American Warrior v. Foundation Energy Fund provides a useful reminder that “finality” can mean different things in different settings:

AWI’s position elides the distinction between “finality” for the purposes of appealability and “finality” for the purposes of res judicata. These are related, but separate concepts. Thus, “finality for purposes of appeal is not the same as finality for purposes of preclusion.”

… Just as new facts or circumstances may warrant the modification of an injunction on behalf of a party that previously failed to obtain relief or modification, new facts or circumstances may also warrant an order modifying or lifting a bankruptcy automatic stay for a party previously denied relief. Res judicata does not tie a bankruptcy court’s hands to prevent the protection, disposition, or sale of estate property by lifting or modifying the automatic stay as changed conditions warrant.

… [P]arties may appeal the denial of a lift-stay motion, their failure to do so immediately does not prejudice their ability to obtain stay relief later, when the legal and factual landscape of the bankruptcy case changes.

No. 23-30529 (Aug. 1, 2024) (emphais removed).

The party-presentation principle made an appearance yesterday in the “buoy case,” United States v. Abbott.

The specific issue is unique to this case, but the level of generality at which the Court identified the problem is of broader interest. Cf. United Natural Foods, Inc. v. NLRB, 66 F.4th 536, 556 (5th Cir. 2023) (Oldham, J., dissenting) (“Does anyone think that, when a party presents legal question X for decision in federal court, a federal judge is somehow disabled from reading any case, statute, regulation, or other authority not cited in the party’s brief? Of course not. We are duty-bound to understand the legal questions presented to us—even when a party presents a question less than perfectly.”).

(To learn more about this elusive but important principle, you can read my recent article in the Cornell Law Review Online).

The en banc court has ruled for Texas in the ongoing “border buoy” dispute, with a breakdown of votes as follows:

Airlines for Am. v. Dep’t of Transp. illustrates how the issue of interim appellate relief stays (rimshot) in flux. The panel majority said:

Several airlines and airline associations seek a stay pending review of a recent Department of Transportation (“DOT”) Rule that regulates how airlines disclose fees to consumers during the booking process. Finding the Rule likely exceeds DOT’s authority and will irreparably harm airlines, we GRANT the requested stay and EXPEDITE the petition for review.

A third judge would have taken a more staid approach:

No. 24-60231 (July 29, 2024).

In 2022, the Fifth Circuit held that the CFPB’s funding was “double insulated” from Congressional review, and thus violated the Appropriations Clause of the Constitution.

In a recent 7-1 opinion by Justice Thomas, the Supreme Court reversed and held otherwise. Notably, “double” or “doubly” appears nowhere in the Supreme Court’s majority or concurring opinions. The Court held that “an identified source and purpose are all that is required for a valid appropriation.”

Now, Consumers’ Research v. FCC, a 9-7 en banc opinion from the Fifth Circuit, doubles down on this line of argument, holding that the method used to calculate a “universal service fee” for the communication industry is unconstitutional as a “double-layered delegation” of power. The dissent observes that “Congress has provided the FCC with an intelligible principle that sufficiently delimits the FCC’s discretion based on the established universal service principles.” No. 22-60008 (July 24, 2024) (en banc).

28 U.S.C. § 1447(d) says: “An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.”

But under the Supreme Court’s Thermtron precedent, that statute is read in concert with § 1447(c), such that § 1447(d) “’only prohibits appellate review of … remand orders … specified in neighboring subsection 1447(c).’ Thus, to the extent a district court remands a case for lack of subject-matter jurisdiction (e.g., non-diverse parties) or a defect in removal procedure (e.g., missing the 30-day removal deadline), we cannot review that order on appeal.” (citation omitted).

In Abraham Watkins v. Festeryga, the district judge remanded a case after finding that the removing party waived the right to remove by active participation in stae-court proceedings. Thus, the question for the Fifth Circuit was: “whether the district court’s remand order in this case … is a specified ground within § 1447(c) and thus barred from our review under § 1447(d) or a discretionary ground outside § 1447(c) and thus an appealable collateral order ….”

The panel held that it was bound by Circuit precedent from 1980, which held–albeit obliquely and vaguely–that state-activity waiver was a 1447(c) ground about jurisdiction and thus unreviewable. A concurrence recommends en banc review of that precedent.

The plaintiffs in a challenge to the FAA’s “watch list” were unable to bring claims about the effect of that list outside of the airport-security context. The Fifth Circuit reasoned that they lacked standing for such claims:

Although it is possible the Plaintiffs could be injured if their alleged placement on the Watchlist adversely affects them during a traffic stop, firearm purchase, or license application, they have not demonstrated that such injuries have occurred or are “certainly impending.” 

(citation omitted). The court rejected Plaintiffs’ capacious  argument that “once an agency’s power is called into question by a plaintiff who has suffered [an] Article III injury, courts consider the full range of the agency’s asserted power, even if the plaintiff has not been harmed by every aspect of the agency’s congressionally unauthorized actions.” Kovac v. Wray, No. 23-10284 (July 22, 2024).

Matthews v. Tidewater, Inc. rejects a challenge to a forum-selection provision that required dismissal of a Louisiana toxic-tort case in favor of England. The plaintiff, a Jones Act seaman, argued that the dismissal contravened the public policy enunciated in a Louisiana statute about litigation fora, but the Fifth Circuit disagreed.

The present case, as did [a prior case], involves a plaintiff who is not a Louisiana resident and an international employment contract requiring litigation in a foreign forum. We also stress Matthews’s lack of connections to Louisiana. Matthews worked for Tidewater, Inc., a Delaware corporation, and Tidewater Crewing, Ltd., a Cayman Islands corporation. He filed suit for injuries sustained outside the United States while servicing Egyptian oil wells in the Red Sea. Further, just as the [earlier] court observed Section 23:921A(2) protects Louisiana citizens from being forced to litigate their case in a foreign forum. Matthews is not a Louisiana citizen and has scant, if any, connections to Louisiana. He, therefore, is not the object of the statute.

No. 23-30305 (July 17, 2024) (citation omitted).

Applying City of Austin v. Reagan Nat’l Advertising, 596 U.S. 61 (2022), the Fifth Circuit held in National Federation of the Blind of Texas v. City of Arlington that Arlington’s regulation of donation-collecting “drop boxes” was not contend-based (example, right, from Arlington’s web page about the rule). From there, the panel majority found that the regulation satisfied intermediate scrutiny; a dissent took issue with one aspect of that holding. No. 23-10034 (July 17, 2024).

A high-ranking sergeant in the Armed Forces has a lot of chevrons (right). So too, today’s federal courts, after the overruling of Chevron. In Utah v. Su, the Fifth Circuit remanded a pending case that presented a post-Chevron issue of regulatory authority, reasoning:

Whatever efficiency or economy is gained by taking up the parties’ invitation to decide their dispute in light of the intervening changes, both we and the circuit at large would be better served by the slight delay occasioned by remanding to the district court for its reasoned judgment.

No. 23-11097 (July 18, 2024).

“Great cases like hard cases make bad law. For great cases are called great, not by reason of their importance … but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment.” Northern  Securities Co. v. United States, 193 U.S. 197 (1904) (Holmes, J., dissenting).

Thus, United States v. Jean, in which a Fifth Circuit panel split 2-1 about an issue as to which other circuits have split 4-5, with only the Second appearing to have avoided the question. The issue is “whether district courts could consider non-retroactive changes in the law as a factor when deciding whether extraordinary and compelling reasons existed for compassionate release.” The resolution of the issue involves the cryptic phrase “extraordinary and compelling” in the relevant statute, and in the Fifth Circuit, also presents an “orderliness” question about prior Circuit precedent.

En banc review of this fiercely-disputed case seems likely. The bigger question, though, is why this case is in court. The district court found: “The term ‘rare’ does not give Mr. Jean’s rehabilitation and renewed outlook on life justice–it is wholly extraordinary.” As the panel majority observes about this and comparable cases:

The DOJ is apparently fearful that there are so many people incarcerated based on now unconstitutional or otherwise illegal laws; who have been incarcerated for ten years or more; whose sentence would be drastically different today; and whose individualized circumstances support compassionate release, that [the compassionate-release statute] will become a quasi-parole system. That is either a convenient exaggeration or a disturbing reality. 

No. 23-40463 (July 15, 2024).

First v. Rolling Plains Implement Co., a fraud claim about the sale of a combine, found insufficient evidence to support the verdict about the date of claim accrual (“April 13, 2017”), noting the following:

• Evidence about time, but not dates. “[T]here is a disconnect between the trial evidence and the jury charge. Statutes of limitation are necessarily date-specific, but the trial evidence spoke in general terms. Witnesses referred to holiday weekends, seasons, and months when describing the malfunctions, but the jury was tasked with identifying a specific date that began the limitations period. The jury was asked to select a specific date without the evidentiary basis to do so.”
• Only date, no evidence. The jury chose the only date presented as a day, month, and year: the Protection Plan’s expiration date. But the Protection Plan’s expiration date cannot support the verdict because it is temporally unrelated to any pertinent fact that would cause First to suspect fraud. …  Trial witnesses testified that the main issue [around Memorial Day 2016]—computer problems that caused the engine to idle—was part-and-parcel of setting up the Combine.”
• Only date, no evidence, another reason. “[T]he jury’s selected date—April 13, 2017—occurred almost one year after the Memorial Day 2016 malfunctions. Rolling Plains did not identify additional events during this year that would cause First to suspect fraud.”

No. 23-10635 (July 11, 2024).

To the right is an alpaca. It should not be confused with PACA, a federal law against unfair dealings in the delivery of perishable produce on its way from field to the consumer. In A&A Concepts LLC v. Fernandez, the Fifth Circuit concluded that liabliity under PACA could run to individuals who are not managing members of an LLC in the produce-related chain of commerce, but then held that the defendant in that case could not be liable because he was not in a position to control “PACA trust assets.” No. 23-50757 (July 11, 2024)

A recent need for maintenance on my F-150 pickup caused me to read through the manual, which led me to appreciate how well-organized and readable it was. So I wrote “Why You Should Write Briefs Like Car Manuals” for the Bar Association of the Fifth Federal Circuit (available along with many other practical short articles in the “for members” section of its website). I hope you enjoy it and find the article of some use in your practice!

The Horseracing Integrity and Safety Act of 2020, and its novel use of a private entity (the “Horseracing Integrity and Safety Authority”) to make and enforce rules for horse racing, did not fare well on a previous visit to the Fifth Circuit. A return trip received a more favorable reception:

In sum, we affirm the district court’s judgment that (1) Congress’s recent amendment to HISA cured the private nondelegation flaw in the Authority’s rulemaking power; (2) HISA does not violate due process; (3) the Authority’s directors are not subject to the Appointments Clause under Lebron; and (4) Gulf Coast lacks standing to challenge HISA on anticommandeering grounds. We reverse the district court’s judgment in one respect. Insofar as HISA is enforced by private entities that are not subordinate to the FTC, we DECLARE that HISA violates the private nondelegation doctrine.

National Horsemen’s Benevolent & Protective Association v. Black, No. 22-10387 (July 5, 2024). The private-nondelegation holding creates a split with the Sixth Circuit.

After another Supreme Court term featuring reversals of the Fifth Circuit on standing grounds in high-profile cases, I wrote this op-ed in today’s Dallas Morning News about that recurring issue.

Late last week, Judge Ada Brown from the Northern District of Texas held that the FTC exceeded its authority by its new rule about noncompetition agreements, granted a preliminary injunction, and set the matter for trial in late August. Notably, as of now, the relief granted does not include a nationwide injunction about the rule.

Maurice Sendak’s In the Night Kitchen, a Caldecott Honor book in 1971, is available from Amazon, the website of HarperCollins Publishers, and Barnes & Noble. The question whether it should also be available in the Llano County Library–recently answered “yes” by a Fifth Circuit panel–will now be examined by the en banc court.

A recent mandamus opinion, In re Sealed Petitioner, made this provocative statement about the potential role of a mandamus writ:

But of course, “the federal courts established pursuant to Article III of the Constitution do not render advisory opinions ….” E.g., Pub. Workers v. Mitchell, 330 U.S. 75, 89 (1947). Fortunately, review of the cited case shows that it just states principles about mandamus review that are generally accepted as part of today’s standard practice (citations omitted):

Although the Company correctly observes that mandamus has historically been a drastic remedy generally reserved for really “extraordinary” cases, the federal courts of appeals (as well as the Supreme Court) have shown an increasing willingness in recent years to use the writ as a one-time-only device to “settle new and important problems” that might have otherwise evaded expeditious review. As the District of Columbia Circuit explained … “Schlagenhauf authorizes departure from the final judgment rule when the appellate court is convinced that resolution of an important, undecided issue will forestall future error in trial courts, eliminate uncertainty and add importantly to the efficient administration of justice.” 

Much ink will be spilled over the Supreme Court’s use of history in resolving cases this term about the Appropriations Clause, possession of firearms by dangerous people, and the SEC’s internal courts. One key point in Jarkesy is the extent to which a word, used in the 1790s, has the same general meaning today. As the below quote illustrates, “fraud is fraud” oversimplifies the Supreme Court’s holding – but not by much. “Fraud” in today’s commercial law means pretty much what it did in the 1790s. Other words, such as “economy,” are not so easily transported through time, and that reality calls for caution in seeing Jarkesy as providing broad support for some other “originalist” ideas.

Fifth Circuit affirmed in SEC v. Jarkesy:

A defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator. Rather than recognize that right, the dissent would permit Congress to concentrate the roles of prosecutor, judge, and jury in the hands of the Executive Branch. That is the very opposite of the separation of powers that the Constitution demands. Jarkesy and Patriot28 are entitled to a jury trial in an Article III court.

No. 22-859 (U.S. June 27, 2024).

The Supreme Court reversed the Fifth Circuit’s judgment in Murthy v. Missouri, a case about interaction between the federal government and social-media platforms during the COVID-19 pandemic. Again, the ground of reversal with standing, with the Supreme Court finding that the plaintiff’s claim of future injury was too attenuated, and that a “right-to-listen” theory of standing was not viable. No. 23-411 (U.S. June 26, 2024).

In Paxton v. Dettelbach, individual plainitffs challenged a law about firearm silencers, making these statements about their standing:

I intend to personally manufacture a firearm suppressor for my own non-commercial, personal use. The firearm suppressor will be manufactured in my home from basic materials without the inclusion of any part imported from another state other than a generic and insignificant part, such as a spring, screw, nut, or pin.

The Fifth Circuit found those statements inadequate for two reasons:

1. “[T]he declarations do not state any intention to engage in conduct
   proscribed by law,” because the federal law at issue was not a blanket prohibition (emphasis added).
2. “[T]he declarations lack the necessary detail to establish that the Individual Plaintiffs’ professed intent to make a silencer is sufficiently ‘serious’ to render their feared injury ‘imminent’ rather than merely speculative or hypothetical. As the Supreme Court explained in Lujan, at the summary-judgment stage, declarants’ profession of “‘some day’ intentions [to engage in certain conduct]—without any description of concrete plans, or indeed even any specification of when the some day will be—do not support a finding of the ‘actual or imminent’ injury” required for standing.”

And the Court rejected Texas’s claim to standing based on its “quasi-sovereign interests in its citizens’ health and well-being” and “its sovereign interest in the power to create and enforce a legal code.” No. 23-10802 (June 21, 2024).

In Lewis v. Crochet, the Fifth Circuit found that a ruling about the attorney-client privilege was properly appealed under the “collateral order” doctrine, applying Mohawk Indus. v. Carpenter, 558 U.S. 100, 103 (2009).

Judge James Ho’s dissent from the denial of en banc review in Gonzalez v. Trevino persuaded the ultimate audience yesterday, when the Supreme Court reversed the Fifth Circuit, and allowed the wrongful-arrest claim of Sylvia Gonzalez – an unfortunate victim of small-town politics – to proceed past the pleadings stage. No. 22-1025 (U.S. June 21, 2024). His opinion built on Judge Andrew Oldham’s dissent at the panel stage.

Palmquist v. Hain Celestial Group, Inc. provides helpful summaries of two important standards for evaluating motions to remand:

1. Repleading. “[A] plaintiff should not be penalized for adhering to the pleading standards of the jurisdiction in which the case was originally brought. Otherwise, where there are potentially diverse parties, plaintiffs would essentially have to plead the federal pleading standard in state court for fear of having their claims against non-diverse parties thrown out upon reaching federal courts for failing to comply with the demands of Rule 12(b)(6).”
2. New Matters in Repleading. “[A]dding new causes of actions and clarifying already alleged causes of actions are not mutually exclusive. We have already determined that the Palmquists may not expand the substance of their pleadings, for jurisdictional purposes, with the negligent-undertaking allegations. We, too, follow circuit precedent by permitting them to ‘clarify’ their already averred jurisdictional allegations after removal for purposes of an improper joinder analysis.”

No. 23-40197 (May 28, 2024).

In 2022’s Bruen opinion, the Supreme Court disapproved of “means-ends” analysis in Second Amendment cases:

In today’s Rahimi opinion, the Supreme Court walked that disapproval back, while nominally following the same history-based test:

The result was an 8-1 reversal of the Fifth Circuit opinion holding that the subject of a domestic protective order had a Second Amendment right to carry a firearm. (I argued that the Fifth Circuit’s opinion took “history” too far in this Dallas Morning News editorial last year.)

On remand from the Supreme Court after that court’s rejection of a challenge to the CFPB’s funding based on the Appropriations Clause, the Fifth Circuit issued a short judgment reflecting that ruling. Interestingly, the judgment expressly identifies the rehearing deadline while striking an earlier 28j filing by the plaintiff:

That filing is no longer available online, but the CFPB’s response suggests that the parties dispute the scope and effect of the Supreme Court’s mandate–and what that may mean for the other challenges to the CFPB presented in this case.

In Chamber of Commerce v. Consumer Financial Protection Bureau, the district court (for the second time) transferred a challenge to a new CFPB rule to the District of the District of Columbia. The district court reasoned, inter alia:

“Under Plaintiffs’ theory, there isn’t a city in the country where venue would not lie, as every city has customers who may potentially be impacted by the Rule. Plaintiffs could find any Chamber of Commerce in any city of America and add them to this lawsuit in order to establish venue where they desire. It appears that this is exactly what Plaintiffs attempted to do by recommending transfer to the Eastern District of Texas, Tyler Division. Here, once again, the only tie to the Eastern District of Texas, Tyler Division, was that one of the Plaintiffs happens to be there. None of the events occurred there and there is only a possibility that tangential harm could be felt by the Rule.” 

(citation omitted, emphasis added). The Fifth Circuit found an abuse of discretion in that conclusion, granting mandamus relief (for a second time) to prevent the transfer. It reasoned, inter alia, that the request for a nationwide injunction materially affected the analysis:

“Final Rules are not meant to be ‘localized’—they are usually designed to affect the entire nation. That’s why plaintiffs seek nationwide injunctions when a final rule is poised to go into effect—they seek to block the effect across the nation. Therefore, this case is not one where Fort Worth citizens have a lesser stake in the litigation than D.C. citizens.”

In re Chamber of Commerce, No. 24-10463-CV (June 18, 2024). While that reasoning seems destined to drive administrative-law challenges to the MDL process rather than the district courts of the Fifth Circuit, it reflects the present state of the law on this issue.

In RSBCO v. United States, the Fifth Circuit confronted a charge issue, called “a Casteel problem” in Texas state practice. The question was whether RSBCO established an excuse for late-filed tax returns, and the jury questions were as follows:

The jury answered “yes” to both questions. The problem emerged because the “mitigators” instruction for the second question was correct, but the “impediments” instrution was not. Therefore:

“Given the form’s single yes-or-no question as to mitigators ‘and/or’ impediments, there is no way logically to reconcile the verdict form to contain the improper instruction. Thus, the ‘challenged instruction could [well] have affected the outcome of the case,’ so we must vacate the verdict and remand for a new trial.”

No.  23-30062 (June 13, 2024) (citation omitted).

I didn’t really understand the issues in the bump-stock case until I saw the below graphic in Judge Elrod’s majority opinion for the en banc Fifth Circuit. Once I saw that, I realized why ATF had gone out over its skiis, and why the Supreme Court affirmed today.

As I argued a year ago, more than once, the Supreme Court holds 9-0 this morning that the mifepristone plaintiffs lacked standing:

In 1949, a pipeline company received a grant from the Board of Mississipi Levee Commissioners to build and operate two crude oil pipelines in Issaquena County, Mississippi (the least populated county in the U.S. located to the east of the Mississippi River). A dispute arose over permitting fees, and the pipeline company sued the Levee Board for, inter alia, violating the Contract Clause of the U.S. Constitution.

The Fifth Circuit affirmed dismissal: “Despite its significant investment in its pipelines, including their 2007 relocation, Mid Valley does not identify any affirmative or mutual obligations the Levee Board owed stemming from the 1949 Permit—because none are apparent in its express terms.” Accordingly, the Court distinguished this situation, where the permit clearly left complete discretion with the Board, from other permitting cases that did create some consideration / mutuality of obligation. Mid Valley Pipeline Co., LLC v. Rodgers, No. 23-60536 (June 5, 2024).

After receiving considerable public comment at the start of 2024, the Fifth Circuit chose not to implement a rule about the use of generative AI, stating:

Governor Abbott has appointed the three inaugural members of the new Fifteenth Court of Appeals: Hon. Scott Brister, presently of Hunton Andrews Kurth, well-known statewide from his service on the Texas Supreme Court, and the author of City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005); Hon. April Farris, of the First Court of Appeals; and Hon. Scott Field, of the 480th District Court in Williamson County, and formerly of the Third Court of Appeals.

Little v Llano County addressed the removal of books from a public library, producing three opinions and a judgment affirming a preliminary injunction against the removal. The two judges voting to affirm focused on Circuit precedent, Campbell v. St. Tammany Parish School Board, 64 F.3d 184 (5th Cir. 1995), and its statement:

“that officials may not ‘remove books from school library shelves “simply because they dislike the ideas contained in those books and seek by their removal to `prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion.'”

(cleaned up). The case also appears to present the first use of the phrase “butt and fart” (a shorthand for one set of the books at issue) in a three-opinion panel case. No. 23-50224 (June 6, 2024).

SKAV, LLC, the operator of a Best Western hotel in Abbeville, Louisiana, sued a surplus-lines insurer about a hurricane-damage claim. The insurer sought to compel arbitration, based on a Louisiana statute that says:

A. No insurance contract delivered or issued for delivery in this state and covering subjects located, resident, or to be performed in this state, or any group health and accident policy insuring a resident of this state regardless of where made or delivered, shall contain any condition, stipulation, or agreement ..

    (2) Depriving the courts of this state of the jurisdiction or venue of action against the insurer. …

D. The provisions of Subsection A of this Section shallnot prohibit a forum or venue selection clause in a policy form that is not subject to approval by the Department of Insurance.

Acknowledging differing approaches by district courts to examine this issue, the Fifth Circuit held in SKAV, LLC v. Indep. Specialty Ins. Co. that section (a)(2) of this statute applied to arbitration, and was not affected by section (D), which was fairly read as limited to forum and venue-selection clauses. No. 23-30293 (June 5, 2024).

Judge Easterbrook’s recent opinion about good fonts for legal writing emphasized the importance of “x-height,” which is the relative size of a small “x” to a capital letter in a particular font. It’s important to note, though, that x-height is only one of the relevant size measures, and an excessively high x-height can cause problems with “descending” letters such as “p” and “y.” This excellent article, from which the below illustration is taken, further explains this point while defining the other relevant measurements.

Legendary Seventh Circuit judge Frank Easterbrook has written authoritatively on many topics. Thanks to AsymaDesign, LLC v. CBL & Assocs. Mgmnt, Inc., the choice of a good font is now among them.

Judge Easterbrook noted that he was writing in Palatino Linotype, the standard font of the Seventh Circuit (and one of two that I regularly use, alternating with Book Antigua). He explained that it’s a desirable font for legal writing because it has a large “x-height” (the height of a lowercase “x” compared to a capital letter), along with similar fonts designed for book publication:

The Appellant made the unfortunate choice of Bernhard Modern, a “display face suited to movie posters and used in the title sequence of the Twilight Zone TV show.” Because of that font’s low x-height, it’s hard to read in book-like writing:

He concluded: “We hope that Bernhard Modern has made its last appearance in an appellate brief. “

AAPS v. ABIM, No. 23-40423 (June 3, 2024), presented a question about pleading amendment, in which the Fifth Circuit said that the Galveston Division’s local rule about amendments was inconsistent with Fed. R. Civ. P.’s “liberal amendment scheme”:

Other local rules on this, and other, common features of ciivl litigation may draw challanges as a result of this opinion.

Longtime fans of the Phantom comic strip know that, when the plot becomes particularly complex, the strip’s author will make a cameo and give an update, announced by the phrase “For Those Who Came in Late!” In that spirit, 600Camp provides an update about the ongoing litigation about a CFPB rule involving credit-card late fees:

• On May 7, President Biden touted the rule in his State of the Union address.
• May 10, Judge Pittman enjoined the rule, based on a Fifth Circuit case about the CFPB’s funding that the Supreme Court overruled a few days later;
• On May 28, Judge Pittman granted the CFPB’s renewed motion to transfer the case to the District of Columbia (after an earlier transfer order was reversed by the Fifth Circuit, based on the procedural interplay between the injunction application and transfer motion);
• A new mandamus petition followed, leading to an administrative stay of the transfer order until mid-June along with a request for a reponse to the petition.

The chaos caused by the Third Reich’s systematic theft of valuable art continues to the present day, as shown by Emden v. Museum of Fine Arts–a dispute about ownership of a painting called “The Marketplace of Pirna” (right). The claim of the heirs to the one-time owner failed because of the “act of state” doctrine, as the Fifth Circuit explained:

The most straightforward and charitable reading of the Emdens’ complaint inevitably requires a ruling by a U.S. court that the Dutch government invalidly sent Moser the By Bellotto Pirna. The Emdens may be right: The Monuments Men may have improperly sent the By Bellotto Pirna to the [Dutch Art Property Foundation (“SNK”)]; the SNK may have unjustifiably sent Moser the By Bellotto Pirna even though he had a claim to only the After Bellotto Pirna; and the Museum may be violating the Washington Principles by refusing to return the painting to the Emdens.

But, per the act of state doctrine, it is not our job to call into question the decisions of foreign nations. As pleaded, the SNK’s shipping Moser the By Bellotto Pirna is an official act of the Dutch government. The validity and legal effect of that act is one that we may not dispute.

No. 23-20224 (May 29, 2024).

After much Sturm und Drang, the District of the District of Columbia returned Clarke v. CFTC to the Texas district court where that case started, reasoning:

[T]he Court will follow the weight of authority and transfer this case back to the requesting jurisdiction because the record establishes that it was transferred prematurely. The Court makes no decision on the Parties’ respective arguments on whether transfer would otherwise be appropriate. It certainly would be easy for the Court to keep this case—the Court currently has a case involving the same challenge against Defendant that is fully briefed and scheduled for argument soon. Nor does the Court quite understand how the District Court in Texas abused its discretion in making its determination. But the weight of authority instructs the Court on how such requests are routinely addressed, and the Court will follow that course of action here.

Clarke v. CFTC (citation omitted) (D.D.C. May 22, 2024).

Thryv, Inc. v. NLRB, a review of the NLRB’s handling of an unfair labor practices case, presents deft usage of a typographical device called the “dinkus”:

Thanks to the observant Cedric Bond for pointing this out!

Hager v. Brinker Texas, Inc. reminds that the business-records exception to the hearsay rule has significant limitations. The Fifth Circuit summarized an earlier case, in a similar dispute about the admissibility of the employer’s records, as holding:

“[A]n employer’s human resource managers’ reports and letters tracing steps in investigating complaints of sexual harassment against an employee leading to discharge were admissible business records; but it also recognized that such reports would be ‘inadmissible where their “primary utility is for litigation.”‘”

Based on that rule, the Court held:

[T]he Venable declaration and Exhibit B were prepared immediately after the threat of Sharnez’s litigation loomed as Brinker knew that Sharnez complained of racial discrimination and mentioned contacting her lawyer. Venable’s conclusory assertion that the declaration and Exhibit B were made in the regular course of Brinker’s business, with no further explanation about whether it was company procedure to make similar records, does not frustrate this conclusion.  Quite the opposite, Venable admitted that he had never before conducted an investigation into a guest complaint of racial discrimination, further undercutting any claim that the declaration was made in the “regular course” of business. 

No. 21-20235 (May 22, 2024).

Lest one think the law of adminstrative stays had become more settled with time, MCR Oil Tools, LLC v. U.S. Dep’t of Transp. reminds otherwise. The manufacturer of a torch used in oil drilling challenged a new safety regulation on its product. The three judges on the panel reacted in different ways:

• The majority opinion defers the motion for stay to the next available argument panel;
• A dissent emphasized the need for immediate action, given the regulation’s effect on significant outstanding orders;
• A concurrence analogized the case to a recent challenge to the Texas ban on drag shows.

No. 24-60230 (May 23, 2024).

“Double, double, toil and trouble,” chanted the three witches of Macbeth.  “Double insulated,” said the Fifth Circuit in CFSA v. CFPB, holding that the Consumer Financial Protection Bureau’s funding mechanism was so far removed from Congress’s ordinary appropriations process that it violated the Appropriation Clause of the Constitution. Parting company with the above, the Supreme Court didn’t use the word “double” in reversing the Fifth Circuit, and holding that the CFPB is appropriately funded, considering history and practicality. CFPB v. CFSA, No. 22-448 (U.S. March 16, 2024).

Martin v. LCMC Health Holdings, Inc. presents a creative use of the “federal officer” removal statute. A hospital argued that because its patient-portal systems were part of a federal information program created by Congress, it “acts under the direction of a federal officer when embedding tracking pixels onto its website where patients may access their medical records.” While creative, the argument didn’t work: “LCMC’s relationship with the federal government is too attenuated to show any delegation of legal authority, and consequently, LCMC cannot show that it acted pursuant to a federal officer’s directions for purposes of federal officer removal. ” No. 23-30522 (May 13, 2024).

In a counterpoint to some treatments of standing in the mifepristone litigation, the Fifth Circuit rejected Texas’s standing to challenge an SEC disclosure requirement, reasoning:

As the States conceded during oral argument, there is no guarantee that regulated parties will always pass costs on to their consumers. Some costs may be too small to warrant a cost pass-through. So any cost pass-through must be established through evidence. We look to the evidence in the record to determine whether the facts of a specific case support “likely . . . pecuniary harm” to a suing party.  Evidence couched in hypothetical language cannot support such an injury. Here, the record provides only speculation about the possibility of increased costs to investors as a result of new regulatory burdens on the funds.

State of Texas v. SEC, No. 23-60079 (May 10, 2024) (citations omitted, paragraph breaks removed, emphasis added).

The civil-criminal distinction was outcome determinative of the issue presented in Charitable DAF Fund, L.P. v. Highland Capital Management, L.P.:

“Highland incurred virtually all its contempt-related expenses because the bankruptcy court permitted extensive discovery and conducted a marathon evidentiary hearing to unearth Dondero’s role in filing the Motion [for Leave]. But Dondero’s intentions were relevant only to criminal contempt—a sanction the bankruptcy court was powerless to impose. Dondero’s intentions—and virtually all of the discovery and the bankruptcy court’s mini-trial—were irrelevant to civil contempt. The only question in civil contempt is whether and to what extent Highland was damaged by DAF’s choice to file the  Motion in the wrong forum. Neither Highland nor the bankruptcy court was permitted to seize on DAF’s error and leverage it into a punitive proceeding.”

No. 22-11036 (April 4, 2024) (citations omitted).

In a dispute about insurance coverage for a freak accident at a drag-racing event, the Fifth Circuit rejected the argument that the policy was ambiguous, reasoning:

“[W]e must construe every part of the CGL Policy—the CGL Declaration, the CGL Form, and the CGL Endorsements simultaneously. So construed, the CGL Policy is not ambiguous.

Begin by considering the relationship between the CGL Form and the CGL Endorsements. Generalia specialibus non derogant. Given that the CGL Form provides general statements regarding coverage, a CGL Endorsement’s more specific statement regarding the same will control where the two conflict. … 

As the CDE Endorsement and MV Endorsement illustrate, the CGL Endorsements modify express subsets of provisions in the CGL Form. They do not, however, expressly purport to modify the CGL Declaration, other provisions in the CGL Form, or other CGL Endorsements. So, relative to the CGL Form, each of the CGL Endorsements addresses a narrower set of provisions in greater detail.

Kinsale Ins. Co. v. Flyin Diesel Performance & Offroad, LLC, No. 23-50336 (April 26, 2024).

In a return to the Fifth Circuit after an earlier panel opinion affirmed an antisuit injunction, the Court applied the Lauritzen-Rhoditis factors to conclude that Liberian law, rather than American, governed a boat crewmember’s claim about catching malaria aboard the ship:

Considered in the context of this case, involving traditional maritime shipping activities and assertions of wrongdoing yielding a seaman’s “shipboard injury,” none of the Lauritzen-Rhoditis factors that the Supreme Court has deemed significant to the choice of-law determination in traditional maritime shipping cases involve the United States. Specifically, the law of the flag factor, which generally is “of cardinal importance” in the traditional maritime shipping context, points to Liberia.

Ganpat v. Eastern Pacific Shipping PTE, No. 22-30758 (May 1, 2024).

In Sanders v. The Boeing Co., No. 22-20317 (May 2, 2024), the Fifth Circuit summarized the two key holdings that resulted from certification of a question about the Texas limitations-savings statute (reproduced in full below):

1. “[Tex. Civ. Prac. & Rem. Code] Section 16.064(a)(1) applies whenever the previous court dismissed an action for lack of jurisdiction. Thus is so even when the court ‘erred and actually had jurisdiction or could have had jurisdiction had the claims been pleaded differently.'” (citation omitted)
2. “[A] dismissal or other disposition does not ‘become final’ for purposes of Section 16.064(a)(2) until the parties have exhausted their appellate remedies and the court’s power to alter the dismissal has ended.'” (citation omitted, cleaned up).

If you have ever wondered “can the party-presentation principle help distinguish holding from dicta?’ then you will enjoy my new article in the Cornell Law Review Online, which hopefully offers some new perspective on some longstanding concepts.

Phillips v. ERCOT addresses a dispute between ERCOT and the liquidating trust of Entrust Energy, a supplier of electriciity to end users, who went into bankruptcy after receiving a large bill in the wake of Winter Storm Uri. In resolving this dispute, the Fifth Circuit held:

• No immunity for ERCOT. The six relevant factors were “an even split,” but because ‘our court has indicated repeatedly that factor 2 [the source of the entity’s funding] is the most important, ERCOT is not an arm of Texas and not entitled to immunity in federal court.”
• Abstention. Burford abstention was required because, inter alia: “federal adjudication of the [programs at issue] risks dramatic intrusion into Texas’s specialized system of electric utility regulation and would disrupt Texas’s efforts to establish a coherent and uniform policy for electric utilities. Under the specific circumstances of this case, the fact that the takings claim arises under federal law and that Texas does not provide any sort of specialized system for review does not support hearing the claim.” (footnote omittted).

No. 22-20603 (April 29, 2024).

To the right is a painting of Julius Caesar crossing the Rubicon. A river-crossing issue also arose in Good River Farms, L.P. v. TXI Operations, L.P. A severe flood on the Colorado River breached a water reservoir on a commercial property, which in turn led to the flooding of a neighboring farm.

Liability under the Texas Water Code turned on whether “surface waters” (the water in the reservoir) caused the problem at the farm, or whether it was water from the Colorado River (not considered “surface water” under the Code, because the river is a “bed or channel in which water is accustomed to flow”).

The Fifth Circuit found sufficient evidence to support a judgment for the farm, reasoning that “[t]he jury apparently concluded that the water was not overflow fromthe river, but surface water accumulated in such quantity that it ran contrary to the riverine flow.” No. 23-50330 (April 25, 2024).

The Fifth Circuit reversed because of a new trial-court reply-brief argument in Georgia Firefighters’ Pension Fund v. Anadarko Petroleum Corp., reasoning:

A class of stock purchasers allege that Anadarko Petroleum Corporation fraudulently misrepresented the potential value of its Shenandoah oil field project in the Gulf of Mexico, in violation of federal securities law. During the class certification proceedings below, Plaintiffs presented new evidence for the first time in a reply brief. As a result, Anadarko did not have fair opportunity to address that new evidence at an earlier stage in the briefing. So the district court should have permitted Anadarko to file a sur-reply responding to that new evidence contained in Plaintiffs’ reply.

No. 23-20424 (April 24, 2024).

As noted previously, the Fifth Circuit denied en banc review by an 8-8 vote in a contentious forum dispute. The breakdown of the votes is follows (the entire panel majority opinion appears in the chart, and the panel dissent is reproduced as an exhibit to the dissent from the denial of en banc review):

The Fifth Circuit’s recent en banc vote in Consumers’ Research v. CPSC, an unsuccessful constitutional structure to the Consumer Product Safety Commission in light of recent Supreme Court precedent, is summarized in the below chart. The vote was accompanied by a concurrence and two dissenting opinions.

The Fifth Circuit’s recent en banc vote in Book People, Inc. v. Wong, a successful constitutional challenge to a prior-restraintish law involving the content of books in school libraries, is summarized in the below chart:

The Fifth Circuit reversed the dismissal of securities-fraud claims in Oklahoma Firefighters Pension & Retirement System v. Six Flags Entertainment Corp., holding that the district court had misread a prior appellate opinion. The Court stated, inter alia:

Any fair reading shows why our prior opinion very clearly did not hold the alleged fraud was fully disclosed by October 2019. The most obvious sign is the absence of any statement expressly concluding that all purported fraud was fully disclosed by October 2019 and that therefore, the class period was truncated. Given that such a conclusion would all but end the case as to Oklahoma Firefighters, it stands to reason that if that was actually our decision, we would have said so explicitly. To borrow a familiar phrase from statutory interpretation principles, we do not “hide elephants in mouseholes.”

No. 23-10696 (April 18, 2024) (citation omitted).

Recent dialogue about the benefits and drawbacks of single-judge judicial district has led to further public remarks, which have in turn drawn interesting rebuttal from commentators in Above the Law and Balls and Strikes.

(It bears mention in this discussion that the Alliance for Hippocratic Medicine – the lead plaintiff in the mifepristone litigation that touched off the present debate – was created three months before that litigation by several out-of-state anti-abortion groups, as explained in an informative Intercept article that discusses the broader history of such groups.)

Resolving another of the simmering venue disputes that have drawn considerable attention in recent weeks, the full Fifth Circuit denied en banc review (an 8-8 tie vote) of the denial of mandamus relief in In re SpaceX – a challenge to the district court’s order that transferred a dispute between SpaceX and the NLRB to the Central District of California.

The surprisingly slippery question whether Texas law allows a takings claim to proceed against the state came to an anticlimactic end with the Supreme Court’s opinion in DeVillier v. Texas:

As Texas explained at oral argument, its state-law inverse-condemnation cause of action provides a vehicle for takings claims based on both the Texas Constitution and the Takings Clause. …  And, although Texas asserted that proceeding under the state-law cause of action would require an amendment to the complaint, it also assured the Court that it would not oppose any attempt by DeVillier and the other petitioners to seek one.

No. 22-913 (U.S. April 16, 2024).

Members of the Lipan-Apache Native American Church sued the City of San Antonio about its plans for a large city park that contains an area of particular religious significance to this church. One aspect of the case involved physical access to that area. After the City complied with the trial-court’s order on that issue, the Fifth Circuit held that part of the case was moot, and did not apply the “voluntary cessation” (i.e., “a defendant could … pick up where he left off”) exception to mootness:

[T]he City affirmed that it undertook several additional efforts “going beyond what the district court ordered.” The City conceded that removing the limb allowed it to reconfigure the construction fencing and it subsequently granted public access to the entire area. Likewise, the City granted Appellants access to conduct a religious ceremony at the Sacred Area from midnight to 4 a.m. on November 18, 2023, during hours when the Park is normally closed. Furthermore, on November 21, 2023, the City moved to dismiss its crossappeal in this action, deciding to no longer pursue the issue of access to the Sacred Area. Based on these subsequent developments, “[i]t is therefore clear that [the City officials] harbor no animosity toward [Appellants].” Appellants now have “no reasonable expectation that the wrong challenged by [them] would be repeated.” Thus, the voluntary cessation exception does not apply.

Perez v. City of San Antonio, No. 23-50746 (April 11, 2024) (citations omitted).

After a Fifth Circuit panel granted mandamus relief about a transfer of a case involving the CFPB to the District of Columbia, the district court there entered this Minute Order on April 10:

This case was received from the U.S. District Court in the Northern District of Texas on March 29, 2024. On April 8, 2024, the Court received a copy of the Order Reopening Case and Providing Notice to the United States District Court of the District of Columbia … issued by the Texas district court in accordance with In re Fort Worth Chamber of Commerce, No. 24-10266 (5th Cir. Apr. 5, 2024) (attached to Notice and Order). The Fifth Circuit found that the district court lacked jurisdiction to transfer the case while an appeal was pending before the Court of Appeals, and it ordered the district court to “reopen the case and to give notice to D.D.C. that its transfer was without jurisdiction and should be disregarded.” While the Court is not inclined to “disregard” a case on its docket, and it has considerable discretion to supervise its own cases, a review of the Notice and Order, as well as the docket in the Northern District of Texas, reflects that the case is now proceeding there under the supervision of another district court. Therefore, the case will be terminated on this court’s docket at this time without prejudice. This order should not be read to express any view on the transfer question, which has not been presented to this Court to decide. The Clerk of Court is directed to terminate this case on the docket of the District Court for the District of Columbia.

Meanwhile, back in New Orleans, the Fifth Circuit has asked for supplemental briefing about “whether or not an ownership interest in a nonparty large credit card issuer would be substantially affected by the outcome of this litigation,” for purposes of evaluation potential judicial recusal. On May 3, the panel released a revised opinion.

I hope you find this cross-post from 600 Commerce to be informative!

The most recent Advocate (the quarterly publication of the State Bar of Texas Litigation Section) has several articles about how the new Fifteenth Court of Appeals will get off the ground. I have a short piece on where the new court is likely to look for precedent, since it will have none of its own to start. I hope you find it useful in thinking about this important new appellate forum.

In D&T Partners LLC v. Baymark Partners Mgmnt., LLC, “[a] group of individuals allegedly sought to steal the assets and trade secrets of an e-commerce company,” and “did so with shell entities, corrupt lending practices, and a fraudulent bankruptcy.” The plainitffs’ complaint did not state a RICO claim, however:

“While the complaint alleges coordinated theft, the alleged victims are limited in number, and the scope and nature of the scheme was finite and focused on a singular objective. … [T]his does not constitute a “pattern” of racketeering conduct sufficient to state a RICO claim ….”

No. 22-11148 (Apr. 4, 2024).

In a muscular display of appellate review, in Career Colleges & Schools of Texas v. U.S. Dep’t of Educ., the Fifth Circuit:

• Disagreed with the  district court’s conclusion that an association of career schools lacked standing due to a lack of immediate irreparable injury, identifying three types of injury suffered as a result of new DOE regulations about certain defenses to student-loan repayment;
• Concluded that, as a matter of law, the association had satisfied the requirements for a preliminary injunction;
• Gave the resulting injunction nationwide effect; and
• Ordered: “The stay pending appeal remains in effect until the district court enters the preliminary injunction.”

No. 23-50491 (April 4, 2024).

Long-running litigation about control of the Jackson airport led to the en banc court holding on April 2 that the appeal was moot. A breakdown of the viewpoints appears below:

Several disputes about inter-circuit venue transfers are ongoing (I was recently interviewed by Bloomberg about this phenomenon):

• SpaceX. In a dispute between SpaceX and the NLRB, the Fifth Circuit is considering whether to review a transfer order en banc. The NLRB recently filed its response to an unusual order from the panel asking the NLRB to explain several actions taken earlier in the proceedings. The gist of the NLRB’s response was:

Only one court may have jurisdiction at a time. The transferee court was notobliged to follow the February 26 order, and zealous advocacy required the NLRB to present its legal arguments as to why it should not be followed to the Central District of California. Thus, the NLRB urged that court, not to ignore this Court’sorder, but to acknowledge it and respectfully decline retransfer. 

• CFTC. In a dispute involving the Commodities Futures Trading Commission, the District of the District of Columbia has received the district court’s request to return the case, along with briefing and argument from the parties about the appropriate next step, and as of April 6 continued to have that request under consideration.
• CFPB. In a dispute involving the CFPB and a new rule about credit-card late fees, a 2-1 panel decision granted mandamus relief on April 5–after a case had been transferred to the District of the District of Columbia, concluding:

Because the Chamber had a short window of time to either (1) comply with the Final Rule, or (2) seek a preliminary injunction, the district court’s inaction amounted to an effective denial of the Chamber’s motion for a preliminary injunction. That effective denial is properly before us on appeal. The district court lacked jurisdiction to transfer the case after this appeal was docketed because doing so would alter its status. … The district court is ORDERED to reopen the case and to give notice to D.D.C. that its transfer was without jurisdiction and should be disregarded.

• CFPB dissent. The dissent in the CFPB case concluded: “For the foregoing reasons, I believe that the new proposition of law created by the majority is incompatible with district court discretion over docket management and prudent policing of forum shopping. Finally, I am confident the District Court for the District of Columbia will give the suggestion that it should disregard a case docketed by it its closest attention.”
• HHS. The Court has expedited argument (to May 1) of National Infusion Center v. Becerra , a challenge to the dismissal of a case about 2022 drug-reimbursement regulations on venue grounds (after the dismissal of a party for jurisdictional reasons).

Several matters involving inter-circuit venue transfers are ongoing:

• In a dispute between SpaceX and the NLRB, the Fifth Circuit is considering whether to review a transfer order en banc. The panel recently issued this unusual order asking the NLRB’s counsel to explain several actions taken earlier in the proceedings.
• In a dispute involving the CFTC, the District of the District of Columbia has received the district court’s request to return the case, and is receiving briefing and argument from the parties about the appropriate next step.
• In another dispute involving the CFPB, the Fifth Circuit has administratively stayed a transfer order and referred the matter to the next available argument panel.

A recent policy statement from the Judicial Conference of the United States recommended changes to judge-assignment practices in district courts. The statement has drawn considerable attention both pro and con; this Volokh Conspiracy post is a good summary of the “con” side. A recent letter from the Chief Judge of the Northern District of Texas says that its judges have declined to materially change that district’s judge-assignment policies.

Applying the international convention about arbitration, the Fifth Circuit found an abuse of discretion in not compelling arbitration because of equitable estoppel, reasoning:

While Bufkin was certainly free to name and then dismiss the foreign insurers, the district court was not free to disregard them in considering the domestic insurers’ motion to compel arbitration. Yet in focusing on Bufkin’s dismissal of the foreign insurers, the district court neglected to consider the foreign insurers’ part in the seamless coverage agreement struck by the parties, and Bufkin’s interactions with the insurers. Honing in, that coverage arrangement included the arbitration clause that afforded the insurers–foreign and domestic—“predictability in resolving disputes dealing with the substantial risks presented by a surplus lines insurance policy.” …  The upshot is that indulging Bufkin’s pleading-and-then-dismissing gamesmanship by denying arbitration turns on its head the axiom that “[t]he linchpin for equitable estoppel is equity—fairness.”

Bufkin Enterprises, LLC v. Indian Harbor Ins. Co., No. 23-30171 (March 4, 2024) (emphasis added).

After an earler (unexplained) grant of an administrative stay touched off weeks of fast-paced appellate litigation about Texas’s “SB4” immigration law, a majority of the Fifth Circuit’s merits panel denied any further stay of the trial court’s injunction against enforcement of that law. USA v. Texas, No. 24-50149 (March 26, 2024). Argument is scheduled next week; barring Supreme Court intervention, merits opinions similar to these are likely.

The Fifth Circuit made/ an interesting observation about the comparative weight of Erie precedent in SXSW LLC v. Fed. Ins. Co.:

Federal cites two federal district courts to support its broader interpretation. …  But these authorities are worth relatively little in this case. Our focus is on Texas law as interpreted by the Texas state courts.

No. 22-50933 (March 21, 2024) (unpublished).

This morning’s Supreme Court arguments in the mifepristone cases (which will be available here when ready) lead to a couple of observations about legal issues of the day:

1. Standing. As the Washington Post effectively summarized: “A majority of justices from across the ideological spectrum expressed skepticism that the antiabortion doctors challenging the government’s loosening of regulations have sufficient legal grounds — or standing — to bring the lawsuit.” (Last year, I wrote about the “conservative” approach to standing in high-profile constitutional cases in a Slate article, and the application of basic standing principles in the mifepristone cases in this Dallas Morning News editorial.)
2. Comstock. Justice Holmes famously observed: “The common law is not a brooding omnipresence in the sky.” But the Comstock Act is, and Congress should do something about the law before its 1870s-era moralism is inflicted on modern society. Mark Stern’s X feed on the mifepristone arguments summarizes some of the present state of play.

A propane grill exploded; the injured plaintiff won a judgment against the supplier of the propane tank, and the Fifth Circuit reversed in Johnston v. Ferrellgas, Inc.:

[T]he circumstantial evidence on which the Johnstons rely does not cure the want of proof that the tank was defective when it left Ferrellgas’s possession. This is not a res ipsa case. Indeed, the Johnstons did not advance that theory of liability before the district court or before us. In sum, the Plaintiff’s expert admitted that he could not say the tank was defective at the time it left Ferrellgas, making his prior comments about the tank’s condition at that time pure speculation; the tank functioned properly before Johnston used it; the tank and seal are not sealed containers; and both parties agree Ferrellgas successfully refilled the tank with gas under highpressure months before the accident. There is no reasonable basis on which the jury could find the Johnstons met their burden.

No. 23-10019 (March 21, 2024). A dissent saw matters differently.

In the 1950s, Big Tobacco advertised the safety of “Kent with the Micronite Filter,” which was unfortunately made with an exceptionally dangerous form of asbestos. After decades of advertising bans and mandatory disclosures, the battle over cigarette ads continues, leading most recently to R.J. Reynolds Tobacco Co. v. FDA – a First Amendment challenge to new, more graphic disclosures about the potential harms of smoking.

The Fifth Circuit rejected the challenge (reversing a contrary district-court opinion) and remanded for consideration of claims involving the Administrative Procedure Act. As to the First Amendment issues, the Court summarized:

When determining whether Zauderer applies, (1) images can be factual; (2) ideological or emotion-inducing statements are not per se controversial or non-factual; (3) “uncontroversial” means not subject to good-faith dispute about the accuracy of the factual statement; and (4) legitimate state interests other than the prevention of consumer deception are cognizable under Zauderer. For the reasons detailed above, the district court erred by finding Zauderer inapplicable to the FDA’s newest Warnings. Applying Zauderer, the Warnings survive constitutional muster against the First Amendment challenge.

No. 23-40076 (March 21, 2024).

In Wilmington Savings Fund Society, FSB v. Myers, the appellant argued that its notice of appeal was timely, when filed within 30 days of a second judgment, and when the first judgment “was mislabeled because even though it purported to dispose of all claims and parties in the case, the title of the order did not signal that it was a final judgment.”

The Fifth Circuit agreed. Noting that “[o]rdinarily, such minor changes to an order do not ‘disturb or revise legal rights and obligations’ of the parties” (cleaned up), it concluded that “there was in this case a clear discrepancy between the label and the body of the district court’s order” that was sufficient to treat it as a substantive revision for purposes of calculating the appeal deadline. No. 24-20018 (March 18, 2024) (applying FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211 (1952)).

(The graphic was provided by DALL-E, and explained by it as follows: “The images above illustrate the concept of a substantive change versus a change solely of form, through the comparison of a caterpillar’s transformation into a butterfly (substantive change) and a chameleon’s color change (change of form).”

All eyes will be on New Orleans this morning, for the (videoconferenced) arguments in United States v. Texas, where last night’s order suggests a 2-1 decision will be forthcoming that continues to bar enforcement of Texas’s SB4 during the pendency of its appeal. The Supreme Court will likely be asked about the resulting order, whatever it may be.

Earlier this month, the Fifth Circuit granted mandamus relief, including the issuance of a writ of mandamus to the Western District of Texas, requiring that the district court request the return of a case from the District of the District of Columbia. That request was made on March 7. As of March 19, that court had not ruled on the request, and the CFTC continues to urge that the court delay action until it has received further briefing on the venue issue.

In Calogero v. Shows, Cali & Walsh, LLP, (discussed earlier this week for stylistic reasons), a panel majority found that two recipients of certain Hurricane Katrina relief stated a viable Fair Debt Collection Act claim when:

• The longest possible limitations period (10 years) had run by the time the demand letters requested payment; and
• The demand letters threatened a claim for attorneys fees, when the relevant documents only created a specific right to potential fee recovery that did not include the alleged debt at issue.

The third judge, without opinion, concurred in the result only. No. 22-30487 (March 15, 2024).

Michael Cloud, a former NFL running back, sued the NFL’s retirement fund for additional disability benefits. The Fifth Circuit reversed a trial-court ruling in his favor, noting the one-sided nature of the plan’s operations, but concluding:

Cloud’s claim fails because he did not and cannot show any changed circumstances entitling him to reclassification to the highest tier of benefits. He could have appealed the 2014 denial of reclassification to Active Football status—but he did not do so. Instead, Cloud filed another claim for reclassification in 2016, which subjected him to a changed-circumstances requirement that he cannot meet—and did not try to meet. He therefore forfeited the issue at the administrative level and at any rate has not pointed to any clear and convincing evidence supporting his claim.

The district court’s findings about the NFL Plan’s disregard of players’ rights under ERISA and the Plan are disturbing. Again, this is a Plan jointly managed by the league and the players’ union. And we commend the trial court judge for her diligent work chronicling a lopsided system aggressively stacked against disabled players. But we also must enforce the Plan’s terms in accordance with the law.

Cloud v. Bell-Rozelle NFL Player Retirement Plan, No. 22-10710 (revised March 17, 2024).

You can tell your argument isn’t working when the Fifth Circuit summarizes it as follows:

“SCW’s last remaining counterargument is that it should be able to pick and choose different clauses from the LSAA and the Grant Agreement and then mush them together to demand money from debtors.”

and when the Court begins its opinion:

“Widowed octogenarians Iris Calogero and Margie Nell Randolph received dunning letters from a Louisiana law firm … .”

Calogero v. Shows, Cali & Walsh, LLP,  No. 22-30487 (March 15, 2024). More substantive review to follow in the week ahead!

The Judicial Conference has voted to strenghen its policy about random case assignment, as set forth here.