Ms. Whitlock received a large amount of money from the DeBerrys in September 2013, and returned $241,000 of it to them in October. In early 2014, Mr. DeBerry filed for bankruptcy. The trustee of his bankruptcy estate sought recovery of the 2013 transfer from Ms. Whitlock. The Fifth Circuit agreed with her that the $241,000 was not recoverable because it had already been returned to the estate before filing of the bankruptcy petition:

In matters of statutory interpretation, text is always the alpha. Here, it’s also the omega. Section 550(a) permits the trustee to “recover” the property. To “recover” means “[t]o get back or regain in full or in equivalence.”  Obtaining a duplicate of something is not getting it back; it’s getting a windfall. Property that has already been returned cannot be “recovered” in any meaningful sense. And that principle defeats the Trustee’s claims against Ms. Whitlock. Once the fraudulently transferred property has been returned, the bankruptcy trustee cannot “recover” it again using § 550(a)

Whitlock v. Lowe, No. 18-50335 (Dec. 23, 2019) (citations omitted) (emphasis added).

A Chevron dispute about the Department of the Interior’s collection of natural gas royalties led to the question whether “the agency must credit all of W&T’s prior overdeliveries in calculating the cumulative delivery shortfall.” Observing that the defense of “equitable recoupment is ‘never barred by the statute of limitations so long as the main action itself is timely,'” the Fifth Circuit rejected the Department’s three arguments against its application – looking to three common reference points for resolving such disputes:

1. Statutory limitations. A statutory prohibition on “pursu[it of] any other equitable or legal remedy, whether under statute or common law” did not clearly preclude the assertion of this defense;
2. Factual linkage. “This objection is easily dispatched, as the Department of the Interior’s requirement that payments be made on a monthly basis does not trump the reality that each monthly obligation arises from a single contract: the lease.
3. Overall equities. The Department’s facially “neutral application of the statute of limitations across the industry does not counteract the inequitable result that W&T suffered  . . . .”

W&T Offshore v. Bernhardt, No. 18-30876 (Dec. 23, 2019).

Schrödinger’s Cat, wily feline that it is, made a cameo in yesterday’s Affordable Care Act opinion. Rebutting a point made by the dissent, the panel majority observed:

The dissenting opinion’s theory of the “law that does nothing” results in some bizarre metaphysical conclusions. The ACA was signed into law in 2010. No one questions that when it was signed, § 5000A was an exercise of legislative power. Yet today, the dissenting opinion asserts, § 5000A is not an exercise of legislative power. So did Congress exercise legislative power in 2010, as seen from 2015? As seen from 2018? Does § 5000A ontologically re-emerge should a future Congress restore the shared responsibility payment? Perhaps, like Schrödinger’s cat, § 5000A exists in both states simultaneously. The dissenting opinion does not say. Our approach requires no such quantum musings.

Slip op. at 43 n.38 (emphasis added).

The Fifth Circuit has ruled in the closely-watched constitutional challenge to the Affordable Care Act, Texas v. United States, No. 19-10011 (Dec. 18, 2019). The panel majority opinion, written by Judge Elrod and joined by Judge Englehardt, held:

First, there is a live case or controversy because the intervenor-defendant states have standing to appeal and, even if they did not, there remains a live case or controversy between the plaintiffs and the federal defendants. Second, the plaintiffs have Article III standing to bring this challenge to the ACA; the individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs, by increasing their costs of complying with the reporting requirements that accompany the individual mandate. Third, the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. Fourth, on the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.

(emphasis added). Judge King dissented, stating: “I would vacate the district court’s order because none of the plaintiffs have standing to challenge the coverage requirement. And although I would not reach the merits or remedial issues, if I did, I would conclude that the coverage requirement is constitutional, albeit unenforceable, and entirely severable from the remainder of the Affordable Care Act.”

Appellants complained about the treatment of their claims by the system established to resolve the “Chinese-Manufactured Drywall Products Liability Multi-District Litigation.”  They contended that “a disagreement with the District Court’s interpretation and application of the settlement agreement invalidates the waivers” of appeal rights in that agreement. The Fifth Circuit disagreed, concluding that this argument “negates the entire purpose of the appeal waiver and would render these agreed upon terms meaningless,” and reminding that to make such a waiver, “a party need only understand the right to appeal that is given up, not all the facts relating to all potential challenges that could be raised on appeal.” Asch v. Gebrueder Knauf, No. 18-31223 (Dec. 12, 2019, unpublished).

A $61,000 jury verdict for allegedly unfair debt collection practices turned on whether the debt at issue was a consumer debt; specifically, whether “the jury could reasonably infer that the Synchrony Bank dept at issue was the QVC credit card, which was used exclusively for personal purchases, and, therefore, a consumer debt.” Jones v. Portfolio Recovery Associates LLC, No 18-50703 (Dec. 12, 2019, unpubl.) The Fifth Circuit reversed the trial court’s grant of JMOL on this issue, rejecting four arguments by the defendant that involved “two jury functions: drawing inferences and making credibility determinations.” The Court concluded: “Though it may have been simpler for Jones to explicitly connect these dots for the jury, her failure to do so is not enough to overturn the jury’s verdict. We permit—and in fact implore—juries to process contradictory information and make inferences to reach a verdict. And that is what this jury did. It was not the clearest path to victory for Jones, but it was a reasonable path, which is all we require.”

Plaintiff, suing in his capacity as “God of the Earth Realm” and “Trust Protector of the American Indian Tribe of משֶׁ ה Moses,” complained of, inter alia, conspiracy between the United States and Louisiana to monopolize “intergalactic foreign trade” and sought a “declaration of rights guaranteed . . . by the 1795 Spanish Treaty with the Catholic Majesty of Spain.” Perhaps a Martian or Venusian court will have jurisdiction over his claim, but the Western District of Louisiana does not, as the Fifth Circuit affirmed its finding that it lacked jurisdiction “because the claim[s] asserted [are] so attenuated and unsubstantial as to be absolutely devoid of merit.” Atakapa Indian de Creole Nation v. Louisiana, No. 19-30032 (Dec. 10, 2019).

Three provocative cases are set for en banc consideration by the full Fifth Circuit (with some minor variations due to recusals and senior-judge participation) on January 22-23, 2020:

• Thomas v. Bryant, No. 19-60133, a Voting Rights Act case about a state senate district in the Mississippi Delta;
• Brackeen v. Bernhardt, No. 18-11479, which presents an important Indian law issue interwoven with fundamental administrative law concepts; and
• Williams v. Taylor Seidenbach, Inc., No. 18-31159, an effort to resolve the “finality trap” about appeals from from trial-court rulings made without prejudice.

The Fifth Circuit found that the Ex Parte Young exception to Eleventh-Amendment immunity (Mr. Young appears to the right) did not apply to the Texas Attorney General’s potential enforcement of a statute that was in conflict with a City of Austin ordinance: “[N]one of the cases the City cites to demonstrate the Attorney General’s ‘habit’ of intervening in suits involving municipal ordinances to ‘enforce the supremacy of state law’ have any overlapping facts with this case or are even remotely related to the Ordinance. And the mere fact that the Attorney General has the authority to enforce § 250.007 cannot be said to ‘constrain’ the City from enforcing the Ordinance. The City simply provides no evidence that the Attorney General may “similarly bring a proceeding” to enforce § 250.007: that he has chosen to intervene to defend different statutes under different circumstances does not show that he is likely to do the same here. . . . Thus, we find that Attorney General Paxton lacks the requisite ‘connection to the enforcement’ of § 250.007.” City of Austin v. Paxton, No. 18-50646 (Dec. 4, 2019).

“Here, however, we have an appeal from grant of a motion to dismiss without prejudice to refile. It is not a final judgment because ‘the district court did not adjudicate or dispose of any substantive issues on the merits.'” The King-Morocco v. Banner of N.O., L.L.C., No. 19-30323 (Nov. 27, 2019) (unpubl.) (citations omitted).

The GSA’s page about the John Minor Wisdom Courthouse offers a free poster for download of the building’s striking “Great Hall.”

The Fifth Circuit affirmed a Tax Court decision about a $52 million “bad debt” deduction, observing: “Baker Hughes’ authorities all involved a bona fide debt. … No authority shown to us holds that a bad-debt deduction applies to a guarantor’s payment on a guarantee that does not create a debtor-creditor relationship with the party whose original obligation is extinguished.” Baker Hughes Inc. v. United States, No. 18-20585 (Nov. 21, 2019).