The author of a popular inspirational book sued a school district for copyright infringement when a softball team and color guard posted an excerpt from it (the “WIN Passage”) on Twitter. The Fifth Circuit affirmed the district’s successful defense based on the defense of fair use, in an analysis both succinct and encyclopedic:

1. “[T]he purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” “This involves a few considerations. The first and most obvious is commerciality—’whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.’ The second is whether the user acted in good faith. The third is whether the use is ‘transformative,’ meaning it ‘adds something new’ to the copyrighted work. The school district does not assert that its use was transformative but argues the other inquiries tip the first factor in its favor. We agree.”
2. “[T]he nature of the copyrighted work.” “’In general, fair use is more likely to be found in factual works than in fictional works.'” Here, ”[c]onstruing the pleadings in Bell’s favor as we must, the WIN Passage is somewhat creative. The passage largely consists of well-worn truisms …. Still, Bell is entitled to the inference that the school chose the WIN Passage because it combines and condenses these principles in a particularly inspiring way. The second factor goes to Bell. But it is a meager victory. The nature of the work is widely considered the least significant fair-use factor.”
3. “[T]he amount and substantiality of the portion used in relation to the copyrighted work as a whole.” “The school quoted a small excerpt from [the book] Winning Isn’t Normal, which was already freely available to the public. As a result, the third factor is neutral.”
4. “The fourth factor examines ‘the effect of the use’ on the market for and value of the copyrighted work.”  “[Bell’s] complaint contends that widespread
   use of the WIN Passage on social media could reduce “the incentive to
   purchase Winning Isn’t Normal or related merchandise. … The tweets do not
   reproduce such a substantial portion of Winning Isn’t Normal‘ as to make
   available a significantly competing substitute’ for the original work. If anything, the properly attributed quotation of a short passage from Winning Isn’t Normal might bolster interest in the book; it is free advertising.”

Bell v. Eagle Mountain Saginaw ISD, No. 21-10504 (Feb. 25, 2022) (all citations omitted).

The Texas Lawbook summarizes the many practical pointers from an hour-long discussion among Judges Haynes, Costa, and Ho at the recent Bench-Bar conference of the Northern District of Texas. Judge Hendrix from that District’s Lubbock Division moderated.

Continuing a not-infrequent practice, the Fifth Circuit denied mandamus relief in In re Royal Street Bistro while providing “[a] brief explanation” of the Court’s skeptical view of a controversial Seventh Circuit opinion about lessee rights. In conclusion, the Court observed: “None of this means that the bankruptcy and district courts’ overstatement of their reasoning created the kind of serious misinterpretation of law or facts that may support one of the criteria for mandamus relief. See In re JP Morgan Chase & Co., 916 F.3d 494, 500 (5th Cir. 2019). Courts must be cautioned, however, against blithely accepting Qualitech‘s reasoning and textual exegesis.” No. 22-30066 (Feb. 16, 2022).

“Karen does indeed have Article III standing to bring this suit. She seeks money damages to address the death of her son, which was allegedly caused by Defendants’ conduct. So she has sufficiently alleged all three elements required to establish Article III standing at this stage. … The defect here, by contrast, is one of prudential standing. And prudential standing does not present a jurisdictional question, but ‘a merits question: who, according to the governing substantive law, is entitled to enforce the right?’ … And a violation of this rule is a failure of “prudential” standing. ‘[N]ot one
[of our precedents] holds that the inquiry is jurisdictional.’ It goes only to the validity of the cause of action. And ‘the absence of a valid … cause of action does not implicate subject-matter jurisdiction.'” Abraugh v. Altimus, No. 21-30205 (Feb. 14, 2022) (citations omitted) (emphasis added, citations omitted).

Hess Corp. v. Schlumberger Tech. Corp. notes an interesting, and seemingly unanswered, question about section 2.608 of the UCC, which says that a “buyer may revoke his acceptance of a lot or commercial unit whose non-conformity substantially impairs its value to him if he has accepted it …..” (emphasis added). One side suggested that this phrase should be read in conjunction with section 2.715, which allows a buyer to recover damages “resulting from the seller’s breach,” while another advocated looking to a line of cases that ask whether a contract breach was a “producing cause” of an injury. The Court noted a dearth of Texas authority tying either suggested approach to this specific UCC provision. No. 20-20663 (Feb. 7, 2022).

A fiery dissent (literally fiery, as it warns that “the Good Ship Fifth Circuit is afire”) in Sambrano v. United Airlines faults the majority for, among other matters, not publishing the opinion. No. 21-11159 (Feb. 17, 2022). The opinions’ review of Fifth Circuit Local Rule 47.5.4 echoes a long-running debate, throughout all appellate courts, about the benefits and detriments of having multiple tiers of judicial precedent.

Texas practitioners will recall similar debate leading up to the adoption of Tex. R. App. P. 47.4, the “memorandum opinion” rule. They will also likely see similarities between this strongly worded dissent and the concurrence in Steward Health Care System v. Saidara from the Dallas Court of Appeals in 2021, which also examined the policy judgments embodied in a different set of appellate-procedure rules.

One issue in Hess Corp. v. Schlumberger Tech. Corp., a UCC case about the oil-and-gas industry, was whether the district court made clearly erroneous fact findings about a party’s compliance with a contract provision; specifically, whether “the difference between the Greene Tweed drawings and the 2004 validated valve was ‘insubstantial.'” The Fifth Circuit approached the issue in three steps:

1. Relevant Supreme Court precedent: “The Supreme Court has explained how to apply a clear-error standard to a district court’s credibility findings at a bench trial. The Anderson Court cautioned that a trial court could not ‘insulate [its] findings from review by denominating them credibility determinations’ and outlined certain ‘factors’ for consideration that could show error. Namely, ‘[d]ocuments or objective evidence may contradict the witness’ story; or the story itself may be so internally inconsistent or implausible on its face that a reasonable factfinder would not credit it.’ If ‘such factors are present, the court of appeals may well find clear error even in a finding purportedly based on a credibility determination.’” (citations omitted).
2. Relevant Circuit precedent: “We applied Anderson in an appeal involving a fatal maritime collision between a tug and a shrimper; the district court had considered physical evidence, expert testimony analyzing the physical evidence, and independent witness testimony. The district court determined that the tug was at fault. We considered the ‘plausibility and internal consistency” of the shrimper’s account, in addition to the actual evidence. Id. We found that ‘physical evidence strongly support[ed]’ the tug’s case; the tug’s expert witness was far more qualified than the shrimper’s expert and considered more information in making his assessment; the independent witness testimony was ‘inconsistent with the [shrimper’s] account of the collision’; and the shrimper’s account smacked of ‘sheer implausibility.’ Accordingly, we were left with the ‘definite and firm conviction” that the evidence showed clear error by the district court.'” (citation omitted, applying In re Luhr Bros., 157 F.3d 333 (5th Cir. 1998)).
3. Conclusion. “The drawings for the seal did not change from 2003 to 2014, and Schlumberger presented some evidence showing a series of springs from 2005 to 2015 that were manufactured within the tolerances specified in the drawings. Although it is clear that Greene Tweed produced springs that were outside the tolerances dictated by the drawings and thus did not conform, it is certainly not “implausible” that Greene Tweed manufactured its valves “to the qualified drawings” under the design-requirement-only interpretation of Section 6.3.2.2 adopted by the district court.”

No. 20-20663 (Feb. 7, 2022).

An argument that a summary-judgment motion was granted prematurely failed when:

“[T]he response did not ‘identify specific facts below that would alter the district court’s analysis’ or in any way /demonstrate . . . how the additional discovery would likely create a genuine [dispute] of material fact.’ Rather, it simply asserted that ‘no depositions have been held, nor have interrogatories, requests for admission, nor requests for documents been exchanged between the parties’ and that the ‘defendant has repeatedly failed to provide evidence of its allegations despite numerous opportunities to do so.'”

MDK v. Proplant, No.21-20207(Feb. 9, 2022) (mem. op.).

While expediting consideration of the merits, a Fifth Circuit panel declined to stay a national injunction against a vaccination requirement for federal employees; a detailed dissent would have granted an interim stay of the injunction. Feds for Medical Freedom v. Biden, No. 20-30090 (Feb. 11, 2022). A thorough (albeit, highly partisan) article about the case recently appeared in Slate.

“To be sure, the order on appeal is the district court’s order denying Doe’s motion to re-open the case and sever the cost-splitting provision of the arbitration agreement—not its order compelling arbitration. But that makes no difference for our purposes. As both parties acknowledge, Doe’s motion to re-open and sever was, in effect, nothing more than a motion to reconsider the merits of part of the district court’s order compelling arbitration. And we have no more jurisdiction to review an order declining to reconsider an order compelling arbitration than we do to review the order compelling arbitration itself.” Doe v. Tonti Mgmnt. Co., No. 21-30295 (Jan. 31, 2022).

Hurricane Harvey insurance litigation continues. The dispute in Landmark Am. Ins. Co. v. SCD Mem. Place II, LLC involved a “named perils” policy, one of which was “Windstorm or Hail associated with a Named Storm.” While the unfortunate insured experienced significant damage when Buffalo Bayou overflowed its banks and flooded the insured’s property, it did not experience any wind or hail damage. The Fifth Circuit sided with the insured, holding that “[t]his framing sets up ‘Windstorm’ and ‘Hail’ as specific perils that may be associated with a number of weather events rather than as weather events that may encompass any number of perils.” No. 20-20389 (Feb. 3, 2022)

Mike Lynn and I have an article in the latest Oklahoma Law Review about a fiendishly tricky issue with some “battles of the forms” under the Uniform Commercial Code. A few years back, Mike had a hard-fought trial about this issue in the context of the roof insulation for a big warehouse near D/FW Airport. I hope you enjoy it – and can use it someday in your next UCC case – https://digitalcommons.law.ou.edu/olr/vol74/iss2/3

In Fessler v. Porcelana Corona de Mexico, the Fifth Circuit flushed an attorneys-fee award in a class-action case about allegedly defective toilets, concluding that the district court had not plunged deeply enough into the factor of “degree of success obtained” — “[T]he [district] court stated simply that ‘the work done did not prove fruitless—it resulted in two settled classes receiving a host of monetary and non-monetary benefits they would not have received but for the Class Counsel’s diligent work.’ In other words, not receiving every bit of relief requested is no reason to reduce the lodestar. But this misconstrues Fifth Circuit precedent. The court was required to consider what was sought— compensatory, punitive, and treble damages for five tank models manufactured across nine years. Yet, the Class members only received a maximum of $4000 in damages for two tank models manufactured in one year.” No. 20-40357 (Jan. 10, 2022) (footnote omitted).