When not engaged in good-natured banter about typeface or proper spacing after periods, the appellate community often argues about the right place to put citations to authority. The traditional approach places them “inline,” along with the text of the legal argument. A contrarian viewpoint, primarily advanced by Bryan Garner, argues that citations should be placed in footnotes.

Has modern technology provided a third path? Professor Rory Ryan of Baylor Law School advocates “fadecites,” reasoning:

A brief using this approach would look like this on a first read:

(A longer example is available on Professor Ryan’s Google Drive.) The reader can quickly skim over citations while reviewing the legal argument. Additionally, assuming that the court’s technology allows it, case citations can be arranged to become more visible if the reader wants to know more information. Modern .pdf technology allows a citation to become darker and more visible if the reader places the cursor on it. A hyperlink to the cited authority could also be made available.

This idea offers an ingenious solution to a recurring challenge in writing good, accessible briefs. I’d be interested in your thoughts and Professor Ryan would be as well.

A manufacturer of vaping liquid, invoking the structural limitations imposed on administrative agencies by the delegation doctrine, challenged the FDA’s power to regulate it. The Fifth Circuit observed: “The [Supreme] Court might well decide—perhaps soon—to reexamine or revive the nondelegation doctrine. But ‘[w]e are not supposed to . . . read tea leaves to predict where it might end up.'” (citation omitted). That observation was case-dispositive: “The [Supreme] Court has found only two delegations to be unconstitutional. Ever. And none in more than eighty years.” Under that precedent, Congress’s delegation of authority to the FDA in this area showed a “sufficiently intelligible principle,” constrained by Congress’s definition of “tobacco product,” and by Congress having “ma[de] many of the key regulatory decisions itself.” Big Time Vapes, Inc. v. Food & Drug Admin., No. 19-60921 (June 25, 2020).

Congratulations to Judge Cory Wilson of Mississippi, who was confirmed by the Senate yesterday as the newest member of the U.S. Court of Appeals for the Fifth Circuit.

A Texas business alleged that the CARES Act impermissibly discriminated against it as a bankruptcy debtor. The Fifth Circuit, citing its rule of orderliness, noted that it “has concluded that all injunctive relief directed at the [Small Business Administration] is absolutely prohibited.” Accordingly, “the bankruptcy court exceeded its authority when it issued an injunction against the SBA administrator … .” Hidalgo County Emergency Service Foundation v. Carranza, No. 20-40368 (June 22, 2020).

Hoover Panel Systems contracted with HAT Contract to design a component for office desks. The Fifth Circuit found their contract ambiguous, noting the tension between its introductory and first-numbered paragraphs. While both address confidentiality, the introduction is general and paragraph 1 describes a particular process:

“Both parties agree that all information disclosed to the other party, such as inventions, improvements, know-how, patent applications, specifications, drawings, sample products or prototypes,[]engineering data, processes, flow diagrams, software source code, business plans, product plans, customer lists, investor lists, and any other proprietary information shall be considered confidential and shall be retained in confidence by the other party.

 

1. Both parties agree to keep in confidence and not use for its or others benefit all information disclosed by the other party, which the disclosing party indicates is confidential or proprietary or marked with words of similar import (hereinafter INFORMATION). Such INFORMATION shall include information disclosed orally, which is reduced to writing within five (5) days of such oral disclosure and is marked as being confidential or proprietary or marked with words of similar import.”

The Court noted “[s]everal plausible interpretations” of these paragraphs:

• Different materials. “Hoover reads the opening paragraph to apply to the prototype, the primary property the confidentiality agreement was entered into to protect. Hoover argues that the first numbered paragraph applied to other information and communications that were not obviously confidential under the opening paragraph.”
• General v. specific. “HAT reads the opening paragraph to speak generally about the content of the agreement, and the first numbered paragraph to provide the specific instructions needed to put the confidentiality agreement into effect.”
• Different procedures. “[Another possible] interpretation is that under the agreement, proprietary information is automatically confidential while all other information must be marked. The opening paragraph states that “proprietary material shall be considered confidential,” and in the first numbered paragraph, “all information . . . which the disclosing party indicates is confidential or proprietary or marked with words of similar import” is considered confidential.”
• Substance v. housekeeping. “Another plausible reading is that the opening paragraph provides the scope for all information that is confidential while the first numbered paragraph functions as a housekeeping paragraph, providing instruction on how to mark information as confidential, but not requiring labeling as a condition precedent.”

Hoover Panel Systems, Inc. v. HAT Contract, Inc., No. 19-10650 (June 17, 2020).

In re Spiros Partners is the second recent mandamus opinion by the Fifth Circuit about  notice in large collective actions under the Fair Labor Standards Act. The plaintiff–an exotic dancer with the stage name “Syn”–had an “Entertainer’s License Agreement” with an arbitration clause, the trial court entered an order about other parties and their agreements, and the Fifth Circuit held:

1.  “[The district court] determined there was a genuine dispute as to the arbitration agreements’ validity and ordered Spiros to produce the names of the putative members along with their respective ELAs containing the arbitration agreements. The district court did not err by taking this step in deciding which putative members are subject to valid arbitration agreements, and thus which putative members will not receive notice.”
2. “The only way a putative member with a valid arbitration agreement might receive notice is if ‘nothing in the agreement’ prohibits their participation in the collective action. We conclude the district court went too far by requiring submission of evidence regarding whether Spiros has arbitrated claims with other would-be collective members.” (citation omitted).

No. 20-50318 (June 19, 2020, unpublished).

“Mistah Kurtz — he dead.” Joseph Conrad, Heart of Darkness.

Spell v. Edwards presented a challenge to a COVID-19 restriction that became moot with the passage of time: “A Louisiana church and its pastor ask us enjoin stay-at-home orders restricting in-person church services to ten congregants. But there is nothing for us to enjoin. The challenged orders expired more than a month ago. That means this appeal and the related request for an injunction … are moot.”  Notably, the restriction expired by its own terms, showing that it was not abandoned as a litigation tactic, and thus making inapplicable the “capable of repetition, yet evading review” exception to mootness. No. 20-30358 (June 18, 2020).

A recent article in the Baylor Law Review by Kylie Calabrese, a student of the able Rory Ryan at the Baylor Law School, provides a thorough and well-documented analysis of In re: JP Morgan Chase & Co., 915 F.3d 494 (5th Cir. 2019) and its implications for mandamus practice in the Fifth Circuit.

In In re Schlumberger Tech, Inc., the Fifth Circuit again held that mandamus relief can be necessary to remedy the erroneous production of privileged material. It found that no offensive-use waiver occurred when: “STC’s answer claimed only that it relied in good faith ‘on applicable law, administrative regulations, orders, interpretations and/or administrative practice or policy enforcement.’ STC did not claim that counsel advised it that its decisions complied with the FLSA. Indeed, its answer did not allude to advice of counsel at all. While privileged communications may have some bearing on STC’s beliefs about its compliance, STC has not ‘rel[ied] on attorney-client communications’ to establish its good-faith defense.” No. 20-30236 (June 4, 2020).

Last week, I noted the holding in Gulf Engineering Co. v. Dow Chemical Co. about the construction of the parties’ contract (Dow had the right, but not the obligation, to assign work to Gulf Engineering during the relevant period of time). Not surprisingly, this holding caused trouble for the plaintiff’s damages model:

“… The only evidence of how the details of daily or weekly assignments can be known is that Dow used oral and written communication that included the issuing of work orders and job schedules. What Gulf needed to offer were details about any assigned work. That would include evidence of such variables as the nature of the work, the number of employees needed, and the number of days needed to complete the work. In other words, what was needed in some form was evidence relevant to allow a calculation of what Dow would have paid and what Gulf’s expenses would have been, i.e., what Gulf’s profit would have been. Instead, the only evidence was an average from an historic time period, where all those variables were blended.

As we explained earlier, the evidence of any assigned work after the notice of termination barely suffices to show liability. For us then to allow the evidence offered of daily-average profits over one or five years to substitute for actual profits for actual assigned work is a bridge too far. …”

No. 19-30395 (June 9, 2020) (emphasis added).

The contract-interpretation question in Gulf Engineering Co. v. Dow Chemical Co. was whether, after giving notice of termination, Dow Chemical was obligated to provide work to Gulf Engineering for another 90 days, or whether Dow had the “right but no contracted-for obligation to continue assigning work to Gulf.”

The Fifth Circuit found that the contract unambiguously meant that Dow had the right but not the obligation to give work to Gulf, and that the trial court thus erred in denying Dow’s summary-judgment motion on that point. The Court further found that the district court “compounded the error” by instructing the jury that it had found the relevant contract term to be ambiguous. Nevertheless, the error was harmless because the trial court also gave an instruction about the contract that substantially agreed with Dow’s reading of it. No. 19-30395 (June 9, 2020).

Despite the complexity of a dispute about telecommunication regulations, the parties’ performance mattered: “Sprint and Verizon’s conduct, while certainly not dispositive, is nevertheless informative. Sprint and Verizon are among America’s largest IXCs and are sophisticated market participants. Yet, they waited more than eighteen years to object to the LECs’ access charges for intraMTA wireless-to-wireline calls, paying hundreds of millions of dollars in the process. Moreover, over that same timeframe, Sprint’s and Verizon’s LEC affiliates imposed access charges on IXCs, including on each other, for intraMTA wireless-to-wireline calls. We decline to award Sprint and Verizon, who sat on their hands for the better part of two decades, a nine-figure windfall based on an interpretation of § 251(g) that is divorced from both the 1996 Act’s text and industry practice.”  No. 18-10768 (May 27, 2020). (LPCH was one of the counsel for the prevailing side of this case.)

Phoneternet complained that an inaccurate report available on Lexis-Nexis caused the loss of a business opportunity (oddly enough, with the car company Lexus). The Fifth Circuit affirmed, holding (among other matters) as to their negligent-misrepresentation and promissory-estoppel claims:

“If Phoneternet believed the errors had already been corrected, there would have been no reason for Phoneternet to repeatedly call LexisNexis. In that case, Phoneternet would be asking LexisNexis to correct already accurate information. Moreover, to the extent Phoneternet did rely on LexisNexis’s alleged statement that all fifteen errors in the report had been “modified . . . as requested,” such reliance cannot be considered reasonable and justified. Given the alleged importance of this report—the only remaining obstacle between Phoneternet and a lucrative multimillion-dollar contract with Toyota—Phoneternet should have at least confirmed that the errors had been corrected before blindly relying on LexisNexis’s representation.”

Phoneternet LLC v. Lexis-Nexis, No. 19-11194 (June 3, 2020) (unpublished) (emphasis added).

Hewlett-Packard proved $176 million in antitrust damages at trial (later trebled); the defendant argued that HP had not proved it was a direct purchaser of the optical drives at issue. The Fifth Circuit affirmed. On the two key points, it held:

1. Expert testimony.  Under the proper standard of review, this testimony by HP’s damages expert sufficed: “[W]e did quite a lot of work to understand the data that we received; and it was my understanding, based on that work, that the data was purchases by the plaintiff HP, Inc. formerly known as Hewlett-Packard Company. . . . In the data files that I received, the transactions identified the supplier; and in any cases in which the supplier was identified as an HP entity, I excluded those . . . . ” 
2. Fact testimony. Any uncertainty in the following testimony by an HP executive was not enough to unseat the above-quoted expert conclusion:

Q. And so in a procurement event you have an ODD supplier and a purchaser, an entity that purchases. Did HP, Inc. . . . was that the purchaser in all of these procurement events that you have described?

A. It was some form of HP. I don’t know that it was HP, Inc., but it was a legal entity of HP, somewhere in the region that these were purchased, that purchased the drives.

Q. So the purchaser might not have been HP, Inc. at a particular procurement event? It might have been some subsidiary of HP, Inc.?

A. It could well have been, yes. . . . I’m not exactly sure on how that was spread out, but it could very well have been.

Hewlett-Packard Co. v. Quanta Storage, No. 19-20799 (June 5, 2020). A longer version of this post appears in the Texas Lawbook.

Here is the PowerPoint for my June 2 presentation to the DBA’s Appellate Law Section about Fifth Court commercial-litigation opinions over the last twelve months.

The Fifth Court rejected Burford abstention in Stratta v. Roe, observing: “Burford ‘does not require abstention whenever there exists [complex state administrative processes], or even in all cases where there is a potential for conflict with state regulatory law or policy.’ Nor would a federal judgment here interfere with the coherence of state policy. [Groundwater Conservation Districts] are designed to be decentralized and fragmentary in order to offer local control over groundwater resources. There are roughly 100 GCDs in Texas, but nearly two-thirds of them oversee territory coextensive with a single county.” No. 18-50994-CV (May 29, 2020) (citation omitted).