Many forum-selection disputes, particularly about arbitration clauses, turn on whether the parties’ contract incorporates another document. A variation on this common fact pattern appeared in Sierra Frac Sand v. CDE Global, No. 19-40489 (May 26, 2020),”Sierra concedes that some document was incorporated into the contract. Indeed, by making the agreement ‘subject to’ the ‘Standard Terms and Conditions of Sale” that were available on request, the contract explicitly refers to another document. The question for us is whether the document titled ‘CDE General Conditions – June 2016’ is the incorporated document.”

The answer was “yes,” given evidence that:

• “before this lawsuit commenced …, CDE sent Sierra the 2016 addendum as an attachment to a letter about the project’s timeline,” and “CDE’s financial director attested that the 2016 addendum was the document referred to in the order acknowledgement”;
• “CDE explained that the addendum was dated 2016, even though the contract was executed in 2017, because when the agreement was signed, the 2016 addendum was the most current version of CDE’s terms and conditions”; and,
• “… as the district court found, the 2016 addendum contained the kind of terms and conditions one would expect to accompany the parties’ agreement.”

No. 19-40489 (May 26, 2020).

Ecclesiastes 3:1-8 instructs: “For everything there is a season, and a time for every [a]purpose under heaven: a time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted,” and so forth. McRaney v. North American Board of the Southern Baptist Convention instructs: “At this early stage of the litigation, it is not clear that any of these [necessary]  determinations will require the court to address purely ecclesiastical
questions. McRaney is not challenging the termination of his employment,  and he is not asking the court to
weigh in on issues of faith or doctrine[.] His complaint asks the court to apply neutral principles of tort law
to a case that, on the face of the complaint, involves a civil rather than religious dispute.” (citations omitted).

Acknowledging the Supreme Court’s recent reminder that “[t]he First Amendment protects the right of religious institutions ‘to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine,” the Court held: “At this time, it is not certain that resolution of McRaney’s claims will require the court to interfere with matters of church government, matters of faith, or matters of doctrine. The district court’s dismissal was premature.” No. 19-60293 (July 16, 2020).

The parties’ arbitration agreement adopted certain AAA rules; among them, Rule 52(e) says: “Parties to an arbitration under these rules may not call the arbitrator . . . as a witness in litigation or any other proceeding relating to the arbitration” and that an arbitrator is “not competent to testify as [a] witness[] in such proceeding.”

The appellant in Vantage Deepwater Co. v. Petrobras, facing an award of close to $700 million, sought the deposition of the dissenter on a 3-judge panel, noting his unusual statement that “the entire arbitration, ‘the prehearing, hearing, and posthearing processes,’ denied Petrobras ‘fundamental fairness and due process protections.'” 

The Fifth Circuit held otherwise: “We have not discovered any court of appeals decision holding that a district court abused its discretion in denying discovery from an arbitrator about the substance of the award. We see nothing in this record to cause us to be the first.”  No. 19-20435 (July 16, 2020).

“Jackson [National Life]’s objection to personal jurisdiction concerned only class members who were non-residents of Texas. Those members, however, were not yet before the court when Jackson filed its Rule 12 motions. What brings putative class members before the court is certification: ‘Certification of a class is the critical act which reifies the unnamed class members and, critically, renders them subject to the court’s power.’ When Jackson filed its pre-certification Rule 12 motions, however, the only live claims belonged to the named plaintiffs, all Texas residents as to whom Jackson conceded personal jurisdiction.” Accordingly, Jackson did not waive the issue of personal jurisdiction by raising it in the proceedings about certification. Cruson v. Jackson National Life, No. 18-40605 (March 25, 2020).

For insurance-coverage lawyers, State Farm Lloyds v. Richards represents another case in which the Fifth Circuit concludes that “the eight-corners rule applies here; the ‘very narrow exception’ does not,” and then finds that the relevant pleading “contains
allegations within its four corners that potentially constitute a claim within the four corners of the policy.” No. 18-10721 (July 19, 2020).

For fans of legal typography, State Farm Lloyds represents a daring new look – stylish, yet readable!

Please check out my new podcast, Coale Mind, where once a week I talk about constitutional and other legal issues of the day. This forum lets me get into more detail than other media appearances, while also approaching issue from a less technical perspective than blogging and other professional writing. I hope you enjoy it and choose to subscribe! Available on Spotify, Apple, and other such services.

Wilson, a trustee of Houston’s community-college system, alleged that his censure by the board was done in retaliation for his exercise of First Amendment rights. A panel found that he had stated a claim that was sufficient to survive a Rule 12 challenge:

The above [Circuit] precedent establishes that a reprimand against an elected official for speech addressing a matter of public concern is an actionable First Amendment claim under § 1983. Here, the Board’s censure of Wilson specifically noted it was punishing him for “criticizing other Board members for taking positions that differ from his own” concerning the Qatar campus, including robocalls, local press interviews, and a website. The censure also punished Wilson for filing suit alleging the Board was violating its bylaws. As we have previously held, “[R]eporting municipal corruption undoubtedly constitutes speech on a matter of public concern.” Therefore, we hold that Wilson has stated a claim against HCC under § 1983 in alleging that its Board violated his First Amendment right to free speech when it publicly censured him.

Wilson v. Houston Community College System, 955 F.3d 490 (5th Cir. 2020) (footnote omitted). A vote to take the case en banc produced an 8-8 tie, with these votes (Senior Judge Eugene Davis, who wrote the panel opinion, was not part of the en banc vote):

An alleged tortfeasor, earlier named as a party in a case, settled with the plaintiff. The plaintiff sought to submit a conspiracy count related to that party, and the Fifth Circuit agreed: “The alleged co-conspirator need not actually face liability. … [A]settlement in general does not prevent submitting to the jury questions about that party’s conduct (only pursuing an actual judgment against the settling party). Therefore, we conclude that Phadia’s settlement had no bearing on the Plaintiffs’ ability to prove a civil conspiracy case against the Defendants based on an underlying tort committed by Phadia.” United Biologics v. Allergy & Asthma Network, No. 19-50257 (June 24, 2020) (unpublished).

The parties in Acadian Diagnostic Laboratories v. Quality Toxicology, LLC disputed what the phrase “customary billing practices” meant in their contract. QT argued that it meant “the billing practices that [Acadian] habitually or usually used with its customers in general,” while Acadian “asserts that it agreed to use the billing practices that it habitually or usually used with QT.” The Fifth Circuit resolved this dispute by reference to the parties’ performance, finding that “the record is entirely one-sided,” and that Acadian’s interpretation was consistent with the parties’ performance both before and after the formatoin of their contract. No. 19-30320 (July 13, 2020).

Soren Kierkegaard wondered, “What is the Absurd?” Contemporary artist Michael Cheval creates thought-provoking works of absurdist art (to the right, “Echo of Misconception” (2015)). And the Fifth Circuit plumbed the meaning of the absurd in Geovera Specialty Ins. Co. v. Joachin, No. 19-30604 (July 6, 2020), in a coverage dispute about a homeowners’ insurance policy, bserving: “Absurdity requires a result ‘that no reasonable person could approve.’ An insurance policy is thus absurd if it ‘exclude[s] all coverage’ from the outset. So is one that broadly excludes coverage without reasonable limitations. But the GeoVera policy is not absurd on its face. The policy makes perfect sense for a  homeowner who purchases it while already living in the home.”  No. 19-30605 (July 6, 2020) (citations omitted).

In Williams v. MMO Behavioral Health Systems, the Fifth Circuit affirmed a $244,000 judgment for defamation, entered after a jury trial. Good record keeping often benefits defendants in employment-related litigation, but in this case it helped the plaintiff on a key issue:

Before MMO had published the statement to the [Louisiana Workforce Commission], Williams had informed MMO that she did not falsify her timecard. This should have led MMO to examine Williams’s timecard. If MMO had done so, it would have discovered that even though Williams regularly clocked in every day, the timecard facially showed that someone else clocked in Williams on July 5th. This fact indicates that MMO should have known that Williams was not the one falsifying her timecard. The times for which Williams was clocked in on July 5th were also not her normal working hours, further suggesting that Williams was not the one to clock in on July 5th. Moreover, Williams did not fill out a missed-clock-punch form, which would have been necessary to allow someone else to clock her in or out, suggesting that Williams was not even involved with this July 5th clocking in and out.

No. 19-30757 (July 9, 2020) (unpublished).

The trap: “The Funds sought to render an interlocutory decision appealable by dismissing at least one defendant without prejudice. And under [Williams v. Seidenbach, 958 F.3d 341, 369 (5th Cir. 2020) (en banc)], that means—absent some further act like a Rule 54(b) certification—there is no final, appealable decision.”

The hint: “Because the dismissal without prejudice in this case occurred after the order the Funds seek to appeal, we do not decide how Williams . . . would apply where the dismissal occurred before the adverse, interlocutory order. See Schoenfeld v. Babbitt 168 F.3d 1257, 1265–66 (11th Cir. 1999) (concluding that there was a final decision in such a case).”

Firefighters’ Retirement System v. Citco Group Ltd., No. 19-30165 (July 7, 2020).

After the plaintiff voluntarily dismissed the federal securities claims that justified removal, the district court retained jurisdiction over the case based on supplemental jurisdiction and granted a motion to compel arbitration. The Fifth Circuit rejected the supplemental-jurisdiction argument and vacated the motion to compel: “All of SJAP’s claims against Cigna arise from or concern the In-Network Agreement and the resulting business relationship. SJAP’s federal claim against the Insight Defendants, by contrast, was based on SJAP’s purchase of securities from Insight as part of the Lab Operating Agreement, a completely separate contract that had nothing to do with Cigna that was consummated several years before the events giving rise to SJAP’s claims against Cigna. Other than SJAP’s vague assertion that Insight and the Cigna Affiliates previously ‘had a lengthy and sordid relationship’ that resulted in an undisclosed settlement agreement, the operative complaint when the case was removed demonstrated no connection between Cigna and the Insight controversy, let alone the specific federal security claim that conferred original jurisdiction on the district court.” SJ Associated Pathologists v. Cigna Healthcare of Texas, No. 20-20188 (July 6, 2020) (emphasis added).

Digidrill sued for unjust enrichment, “alleging [that] Petrolink hacked into its software at various oil drilling sites in order to ‘scrape’ valuable drilling data in real time.” The Fifth Circuit held: “Digirill’s claim is not preempted by copyright because—like the claim in GlobeRanger—it requires establishing that Petrolink engaged in wrongful conduct beyond mere reproduction: namely, the taking of an undue advantage. Under Texas law an unjust enrichment claim requires showing that one party ‘has obtained a benefit from another by fraud, duress, or the taking of an undue advantage.’ Digidrill … contends Petrolink obtained a benefit by taking undue advantage when it surreptitiously installed [certain software]. This is the claim Digidrill put to the jury. Like the alleged misappropriation-of-trade-secrets claim in GlobeRanger, which required establishing improper means or breach of a confidential relationship, Digidrill’s alleged unjust enrichment claim requires establishing wrongful conduct—i.e., inducing the MWD
companies to violate the express terms of their DataLogger licenses—that goes
beyond mere copying.” Digital Drilling Data Sysems LLC v. Petrolink Servcs., Inc., No. 19-20116 (July 2, 2020) (footnote omitted, emphasis added). The Court noted that a different type of unjust-enrichment claim could potentially lead to a different result.