In Ackal v. Centennial Beauregard Cellular, the Fifth Circuit reversed the certification of a class of Louisiana governmental entities who contracted with the class defendants for cell phone service.  No. 12-30084 (Oct. 26, 2012).  The Court reasoned that because Louisiana law requires many of the entities to follow a specific process before retaining outside legal counsel, the class was essentially “opt in” — a class structure expressly foreclosed by Rule 23(b)(3), which allows only class member “opt out.”  Id. at 6 (citing Kern v. Siemens Corp., 393 F.3d 120 (2d Cir. 2004)).

An unpublished opinion reversed the vacating of a FINRA arbitration award in Morgan Keegan v. Garrett, No. 11-20736 (Oct. 23, 2012).  The Court reversed a finding of fraudulent testimony “because the grounds for [the alleged] fraud were discoverable by due diligence before or during the . . . arbitration.”  Id. at 8.  The Court also deferred to the panel’s conclusions about the scope of the arbitration as consistent with the authority given by the FINRA rules.  Id. at 10-12.  Throughout, the opinion summarizes Circuit authority about the appropriate level of deference to the panel in a confirmation seting.

The receiver for the Allen Stanford entities sued to recover $1.6 million in contributions to political committees as fraudulent transfers under Texas law.  Janvey v. Democratic Senatorial Campaign Committee, No. 11-10704 (Oct. 23, 2012).   The Fifth Circuit affirmed summary judgment for the receiver, holding: (1) notwithstanding some conflicting language in prior opinions, the receiver had standing to “maintain . . . actions done in fraud of creditors even though the corporation would not be permitted to do so”; (2) limitations ran from the discovery of the fraud, not the public disclosure of the payments under federal election law; and (3) TUFTA was not preempted by that law, noting its limited preemptive effect and the lack of a conflict as to election regulation.

“The thirty-eight monks of St. Joseph Abbey,” unable to earn income from the abbey’s timberland after Hurricane Katrina, began to sell handmade funeral caskets at a price significantly lower than that offered by funeral homes.  The Louisiana State Board of Embalmers and Funeral Directors contended that these sales violated state regulations, and the monks sought relief under the 14th Amendment, arguing that the regulations had no rational basis as applied to them.  St. Joseph Abbey v. Castille, No. 11-30756 (rev’d Nov. 21, 2012).  After an exceptionally thorough review of due process principles in the context of “rational basis review” of economic regulation (which Judge Haynes declined to join as unnecessary), the Court certified a question to the Louisiana Supreme Court about the scope of the relevant enabling statute.

Several months ago, the Court held that a stay is not automatic during an appeal about arbitrability, weighing in on an important procedural issue addressed by several other Circuits.  Weingarten Realty v. Miller, 661 F.3d 904 (5th Cir. 2011).  In an unpublished opinion, the Court has now addressed the merits and affirmed the denial of the motion to compel arbitration under an “equitable estoppel” theory, offering a basic reminder about that concept — arbitration is not proper when the guaranty as to which the plaintiff sought a declaration was distinct from the loan agreement that contained the arbitration clause.  Weingarten Realty v. Miller (2), No. 11-20676 (Oct. 22, 2012).

ACE American Insurance v. Freeport Welding presents a thorough analysis of coverage, in the duty to defend context, under Texas law for a party claiming to be an “additional insured.”  No. 12-20002 (Oct. 19, 2012).  Before analyzing the allegations under Texas’s “eight corners” rule, the Court first reviewed whether the party was within the scope of the policy under general contract principles, and found that it was not.  The key to the Court’s analysis was the clarity of the policy documents about the dates for coverage.  Summary judgment was affirmed for the insurer as to the duty to defend, and the related indemnity issues were remanded for further consideration in light of the parties’ settlement.

In affirming the dismissal of a warranty claim under Louisiana law about the construction of a home, the Fifth Circuit reviewed basic requirements for an “Erie guess” about state law.  Gines v. D.R. Horton Inc., No. 12-30183 (Oct. 17, 2012).  The analysis requires that the federal court “attempt to predict state law, not to create or modify it,” and does not allow it “to fashion new theories of recovery.”  Id. at 4 (quoting American Waste & Pollution Control Co. v. Browning-Ferris, Inc., 949 F.2d 1384, 1386 (5th Cir. 1991)).  Intermediate state court decisions receive deference “unless [we are] convinced by other persuasive data that the higher court of the state would decide otherwise.”  Id. (quoting Cerda v. 2004-EQR1 LLC, 612 F.3d 781, 794 (5th Cir. 2010)).

After reviewing the application of judicial estoppel in the bankruptcy context as to a debtor’s claim in Love v. Tyson Foods, 677 F.3d 258 (5th Cir. 2012), the Court applied the doctrine to a creditor’s claim in Wells Fargo v. Oparaji, No. 11-20871 (Oct. 5, 2012).  After carefully reviewing the elements of that doctrine in this circuit, the Court found that Wells did not adopt “plainly inconsistent position[s]” in the debtor’s two bankruptcies, observing that a creditor is not required to include all accrued liability in every revised proof of claim.  The Court also found that the debtor’s failure to follow the plan in his first bankruptcy barred him from now invoking the equitable remedy of judicial estoppel based on those proceedings.

After granting en banc review, and thus vacating the panel opinion in Access Mediquip v. United Healthcare, the en banc court has now reinstated the panel opinion and expressly overruled prior cases that were in tension with the panel’s analysis of ERISA preemption as to misrepresentation claims.  No. 10-20868 (Oct. 5, 2012).

In Highland Capital Management v. Bank of America, the Fifth Circuit reversed a Rule 12 dismissal of a claim for breach of an oral contract.  No. 11-11139 (Oct. 2, 2012).  The Court noted the practical difficulty of applying the legal test for intent to be bound by an oral contract, largely developed on summary judgment records, in the pleading context.  The Court acknowledged that after the phone call in which the plaintiff alleged the contract formed, email called their deal “subject to” further amendment.  The plaintiff, however, alleged sufficient facts about whether all material terms were agreed on in the call, the industry custom for the type of transaction, and the nature of the further discussions to state a plausible contract claim.  The Court affirmed the dismissal of a promissory estoppel claim for failure to adequately plead reliance.