The key contract provision in Papalote Creek II LLC v. Lower Colorado River Authority said that “[LCRA]’s damages for failure to perform its material obligations under this Agreement shall likewise be limited in the aggregate to sixty million dollars ($60,000,000).” The Fifth Circuit concluded that read in context, this provision referred to damages that LCRA would owe to Papalote (acknowledging authority that, in the abstract, would suggest damages that LCRA would be owed).

The Court went on to conclude that this provision capped damages available under a specific liquidated-damages provision, finding that another clause dealing with those specific remedies did not displace the language of the cap (It said that “for any provision for which an express and exclusive remedy or measure of damages is provided, such express remedy or measure of damages shall be the sole and exclusive remedy, [and] the obligor’s liability shall be limited as set forth in such provision[.]”). No. 19-50850 (July 16, 2021).

The relevant policy language in a data-breach coverage dispute provided insurance for:
In Landry’s, Inc. v. Ins. Co. of the State of Penn., the Fifth Circuit found that this language created coverage, observing, inter alia:

• “Publication”: “[C]overage is triggered by a ‘publication, in any manner.’ It follows that the Policy intended to use every definition of the word ‘publication’—even the very broadest ones. And some of the dictionary definitions of ‘publication’ are quite broad.”
• Scope: “[T]he Policy does not simply extend to violations of privacy rights; the Policy instead extends to all injuries that arise out of such violations. … [I]t’s undisputed that a person has a ‘right of privacy’ in his or her credit-card data.” (emphasis in original).
• Injury: “[E]veryone agrees that the facts alleged in the Paymentech complaint constitute an injury arising from the violation of customers’ privacy rights, as those terms are commonly understood. It does not matter that Paymentech’s legal theories sound in contract rather than tort. Nor does it matter that Paymentech (rather than individual customers) sued Landry’s. Paymentech’s alleged injuries arise from the violations of customers’ rights to keep their credit-card data private.”

The Fifth Circuit rejected class claims about the handling of funds in an ERISA plan, identifying a basic standing problem arising from the links in the causal chain of the plaintiffs’ damages theory: “[Plaintiffs’] expert has provided calculations for the returns that they would have earned had they not invested in the FCU Option but  had instead placed their money in a stable value fund. This ‘lost investment income’ is a ‘concrete’ and redressable injury for the purposes of standing.  That said, another question we must ask is whether Plaintiffs would have in fact invested in a stable value fund to earn the higher returns had [Defendants] never offered the FCU Option. In other words, the question is whether Plaintiffs have demonstrated that it is ‘substantially probable that the challenged acts of the defendant, not of some . . . third party[]’ (including themselves) caused the injury.  If anything, the record reveals that Plaintiffs would not have invested in a stable value fund in a counterfactual world since they did not place their money in one when given the opportunity to do so.” (citations omitted, emphasis added). Oritz v. American Airlines, No. 20-10817 (July 19, 2021).

In a will contest, “the district court determined that, because the claims against Craig and Alita were founded on a single deprivation, the loss of the transferred assets, joint and several liability is appropriate.” The Fifth Circuit agreed, quoting the Restatement (First) of Restitution section cited by the district court: “Where a claim against two persons is founded upon a single deprivation as it is where a tort resulting in a single harm has been committed by two persons concurrently or acting in cooperation, the injured person, while having a cause of action against each of the parties for the entire amount of injury, is entitled only to one satisfaction. If he obtains judgment against one and it is satisfied, he thereby loses his claim against the other.” (citation omitted). In other words, “this part of the Restatement ‘effectively imposes joint and several liability on a restitution defendant when the action is founded ‘upon a single deprivation.’” Great American Life v. Tanner, No. 20-60588 (July 16, 2021).

In Spectrum Association Management of Texas v. Lifetime HOA Management LLC, the Fifth Circuit identified an “exceptional case” that justified an award of attorneys’ fees under the Anti-Cybersquatting Consumer Protection Act.  The Court contrasted Kiva Kitchen & Bath Inc. v. Capital Distributing, Inc., 319 F. App’x 316 (5th Cir. 2009), observing:

“Like the defendants in Kiva, the Lifetime Defendants acted in bad faith by registering and using an infringing internet domain with the intent to divert a direct competitor’s potential customers to Lifetime’s website. Further, the facts of this case are even more egregious than Kiva, because the Lifetime Defendants never offered to transfer the Infringing Domain to Spectrum, whereas the Kiva defendants made such an offer to the plaintiff shortly before trial. Finally, the Lifetime Defendants engaged in post-trial misconduct by blatantly copying text from Spectrum’s website—evidence of willfulness and bad faith that was not present in Kiva.”

No. 20-50604 (July 13, 2021).

Official Committee of Unsecured Creditors v. Walker County Hosp. Dist. presented a debtor’s challenge to the terms of a bankruptcy court’s sale order. The Fifth Circuit dismissed: “In this opinion, we have held that § 363(m) forecloses the creditor’s appeal because it failed to seek the required stay of the Sale Order. Established precedent leads us to this conclusion, and the Committee’s argument that it appealed an order not subject to § 363(m) is unpersuasive. In short: no stay, no pay.” No. 20-20572 (July 12, 2021) (emphasis added).

The government moved to dismiss a qui tam case; the Fifth Circuit found that the relators received the statutorily-required opportunity to contest that motion at a hearing:

“Health Choice had a hearing before the magistrate judge. It had a witness available to testify at that hearing, and the witness was not prohibited from testifying. Health Choice declined to call the witness to testify and the magistrate judge did not prevent Health Choice from presenting the witness. Health Choice’s statements at oral argument suggest that it consciously and strategically chose not to offer evidence because it believed it had already won the motion. Even assuming that [42 U.S.C.] § 3730(c)(2)(A) requires the hearing to be an evidentiary hearing, there was no error because Health Choice declined to offer evidence at the hearing.”

(citations omitted). A concurrence emphasized the fact-specific nature of the holding, and one of the three panel members concurred as to the judgment only. United States ex rel. Health Choice Alliance v. Eli Lilly & Co., No. 19-40906 (July 7, 2021).

The Fifth Circuit granted a stay during appeal in a challenge to a Texas JP’s practices regarding an invocation at the beginning of court proceedings: “In deciding whether to grant a stay pending appeal, we consider four factors: ‘(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.’ All four factors favor Judge Mack.” The Court found a “manifestly erroneous” analysis of Ex Parte Young by the district court, which guided the application of the remaining factors in the appellant’s favor. Freedom From Religion Foundation v. Mack, No. 21-20279 (July 9, 2021).

Goodrich v. United States certified a complex issue of Louisiana law to that state’s supreme court; confirming the wisdom of that decision, it summarized a relevant principle as stating: “If the things subject to the usufruct are consumables, the usufructuary becomes owner of them. He may consume, alienate, or encumber them as he sees fit. At the termination of the usufruct he is bound to pay to the naked owner either the value that the things had at the commencement of the usufruct or
deliver to him things of the same quantity and quality.” No. 20-30422 (July 6, 2021) (emphasis added). Hopefully the resulting opinion will clothe the case with quality legal reasoning.

A wheelchair-bound potential juror complained about  the inaccessibility of the courthouse to him when he was called for jury duty. The Fifth Circuit reviewed two guideposts about standing for such claims in its earlier opinions, noting:

O’Hair and Herman can be summarized as holding that a plaintiff with a substantial risk of being called for jury duty has standing to seek an injunction against a systemic exclusionary practice but not a one-off, episodic exclusion related to a particular judge’s actions. Thus, the plaintiff in O’Hair had standing for injunctive relief against a state constitutional provision that systemically excluded atheists from jury service, but the plaintiff in Herman lacked standing for injunctive relief against a particular judge’s conduct.

Applied to this case, the Fifth Circuit held: “[Plaintiff] has a substantial risk of being called for jury duty again. He was called twice between 2012 and 2017. Those past incidents, though insufficient to confer standing, are still ‘evidence bearing on whether there is a real and immediate threat of repeated injury.’ Moreover, Hinds County is not extremely populous, and only a subset of its population is eligible for jury service, so it’s fairly likely that Crawford will again, at some point, be called for jury duty.” Crawford v. Hinds County Board of Supervisors, No. 20-60372 (June 16, 2021) (citations omitted).

The Supreme Court will review Reagan National Advertising v. City of Austin, 972 F.3d 696 (5th Cir. 2020). The court’s summary of the issue presented is below, and here is my discussion of the case on the Coale Mind podcast —

Applying Keller v. State Bar of California, 491 U.S. 1 (1990), the Fifth Circuit concluded that certain activities by the State Bar of Texas were not “germane” to the Bar’s accepted purpose, and thus held that their funding with bar dues violated the First Amendment.

In sum, the Bar is engaged in non-germane activities, so compelling the plaintiffs to join it violates their First Amendment rights. There are multiple other constitutional options: The Bar can cease engaging in nongermane activities; Texas can directly regulate the legal profession and create a voluntary bar association, like New York’s; or Texas can adopt a hybrid system, like California’s. But it may not continue mandating membership in the Bar as currently structured or engaging in its current activities.

The Court acknowledged the “weakened foundations” of Keller after the union-dues case of Janus v. Am. Fed. of State, County, & Municipal Employees, 138 S. Ct. 2448 (2018), but concluded that it still framed the relevant issues in the context of a mandatory bar association. McDonald v. Longley, No. 20-50448 (July 2, 2021). The Texas Lawbook has written on the opinion. (The companion case of Boudreaux v. Louisiana State Bar Ass’n, No. 20-30086 (July 2, 2021), reversed a standing-based dismissal to a similar challenge to the activities of Louisiana’s state bar.)

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