The Fifth Circuit addressed the doctrine of mistake under Louisiana law in Fruge v. Amerisure, 663 F.3d 743 (2011).  After reminding that choice-of-law issues are waived unless presented to the district court, the Court considered reformation of an insurance policy under general contract principles.  The Court began by noting that Louisiana law allows reformation in the case of mutual mistake, and consideration of extrinsic evidence to prove such a mistake, even if the policy language is unambiguous.  It reviewed different post-accident reformation scenarios, noting that a Louisiana statute generally precludes a post-accident reformation to rescind coverage, and concluded that a reformation claim based on mutual mistake was cognizable in the post-accident setting presented in this case.  The Court reversed and remanded, noting that the extrinsic evidence could potentially prove that no mistake occurred.

Buffalo Marine v. United States, an arcane Chevron case about cleanup expenses for an oil spill, reminds in discussion of a specific statutory defense under the Oil Pollution Act that: “While some contractual relationships are themselves contracts, other contractual relationships merely relate to contracts.  The fact that no contract exists between two parties does not preclude the parties from having a ‘contractual’ relationship.”  Op. at 7-8.  This reminder may provide useful insight in litigation about insurance coverage and contract interpretation cases that involve the term “contractual relationship.”

The case of Turner v. Pleasant presented a rare attack on a judgment by an “independent action in equity.”  The underlying dispute involved a personal injury case implicated by the misconduct surrounding disgraced former judge Thomas Porteous.  Op. at 2-5.  After a clearly-written summary of the pleading requirements of Twombly and Iqbal, op. at 6-7, the Court considered whether the action could proceed, even though similar allegations were made and rejected in an earlier request for relief.   The Court reversed the dismissal of the claim and remanded, concluding that the plaintiffs had sufficiently alleged: (1) a prior judgment which ‘in equity and good conscience’ should not be enforced, (2) a meritorious claim in the underlying case, (3) fraud, accident, or mistake which prevented the party from obtaining the benefit of that claim, (4) lack of fault or negligence by the party, and (5) absence of an adequate remedy at law.  Op. at 5-10 (citing and contrasting Addington v. Farmer’s Elevator Mutual, 650 F.3d 663 (5th Cir. 1981)).

In Brown v. Offshore Specialty Fabricators, the Court affirmed dismissal of a putative RICO class action involving workers on offshore oil and gas projects.  The Court agreed that the alleged violations of the Outer Continental Shelf Lands Act (“OCSLA”) occurred outside the United States and were not actionable, op. at 4-12, a conclusion that turned on the specific language of OCSLA rather than the issue of RICO’s extraterritorial reach recently addressed by the Supreme Court in Morrison v. National Australian Bank.  The Court went on to address standing under OCSLA, finding fatal problems with the failure of the remaining plaintiffs to have satisfied statutory notice requirements, or to allege a plan to obtain future employment as required by the statute’s focus on future injuries.  Op. at 12, 14.  On the issue of standing when several plaintiffs are involved, the Court reminded: “Because no plaintiff gave the type of notice required by the OCSLA, we need not reach the plaintiffs’ argument that notice by one plaintiff can serve as notice for all.”  Op. at 12.

The Court wrote at some length in Access Mediquip v. United Healthcare to clarify earlier cases about preemption of state law tort claims by ERISA.  Access claimed that United made representations about payment for certain medical devices for three insureds.  The Court rejected a reading of Transitional Hospitals v. Blue Cross, 164 F.3d 952 (5th Cir. 1999), that would find preemption if an alleged misrepresentation dealt with the extent of coverage.   Op. at 12-13.  “The dispositive issue . . . is therefore whether Access’s state law claims are dependent on, and derived from the rights of [the three insureds] to recover benefits under the terms of their ERISA plans.”  Op. at 13.  Under that framework, the Court found that Access’s claims for misrepresentation were not preempted by Transitional, but its unjust enrichment and quantum meruit claims were.  Op. at 18-19.  The opinion synthesizes several prior cases in this complicated, technical area of preemption law.

Stephen Higginson’s nomination to the Fifth Circuit has been confirmed by the Senate.

In a case of considerable practical importance as to litigation about arbitration clauses and appellate procedure generally, the Fifth Circuit addressed a party’s motion for a stay of district court proceedings during an appeal about the arbitrability of the matter in Weingarten Realty v. Miller.  The Court acknowledged a significant circuit split as to whether a notice of appeal automatically stayed district court decisions during an arbitrability appeal, with one school of thought (two circuits) holding that a case’s merit is a distinct matter from whether it is arbitrable, and another school (five circuits) holding that a notice of appeal automatically stays district court proceedings for efficiency reasons.  Op. at 3-4.   Recognizing that this issue turns on the application of Griggs v. Provident Consumer Discount, 459 U.S. 56 (1982), and its holding that a district court may adjudicate matters not involved in the appeal, the Court concluded that under prior Circuit precedent a notice of appeal did not create an automatic stay.  Op. at 7.  The Court went on to review the motion under the general four-factor test for a discretionary stay during appeal, and again declined to order a stay, primarily because it believed the movant had a low chance of success on the merits under the contract documents and the doctrine of equitable estoppel.  Op. at 7-8.