A long-running trademark dispute involving a New Orleans dining treasure, the Camellia Grill, came to an end in Uptown Grill, LLC v. Cameilla Grill Holdings, Inc. Among other holdings, the Fifth Circuit held that the following permanent injunction about trade dress was not an abuse of discretion “where the district court adhered to our recitation of … eight elements [in a prior opinion in the case], albeit adding the less precise language ‘all or most.'” The Court distinguished “other cases in which injunctions referencing trade dress have been reversed for vagueness, [because] the injunction set forth by the district court here has much more detail than a general prohibition from employing ‘confusingly similar’ trade dress.”

In crafting this injunction, the Court looks specifically to the definition of “trade dress” utilized by the Fifth Circuit in its May 29, 2019 opinion. “Trade dress” is defined as “the total image and overall appearance of a product [that] may include features such as the size, shape, color, color combinations, textures, graphics, and even sales techniques that characterize a particular product.” The alleged elements of trade dress include: (1) the pink and green interior paint scheme, (2) the “U-Shaped” double horseshoe counter design, (3) the stainless steel stemmed stools with green stool cushions, (4) the fluted metal design under the customer side of the counter and above the cooking line, (5) the visible pie cases attached to the rear wall at both ends of the cooking line, (6) the “straw popping” routine, (7) audible order calling routine, and (8) the individual counter checks handed to each customer. The enjoined parties’ utilization of all or most of the above Camellia Grill trade dress elements at any single location will constitute a violation of this injunction.

No. 21-30639 (Aug. 23, 2022).

The plaintiffs in Lee v. Andrew Lawrence Collection LLC sought to register the trademark “THEEILOVE” – a phrase associated with the alma mater of Jackson State University. Then they sued that university’s licensing agent and some licensees.

The defendants successfully moved to dismiss under the infrequently-used combination of Fed. R. Civ. P. 19 and 12(b)(7), based on the university’s interest in the subject matter, and the Fifth Circuit affirmed. It reasoned:

• Interest. The university had a non-frivolous interest in the ownership of the mark based on the university’s consistent usage of it, and that interest could be “practically impaired” by a decision on that topic in this case (as distinct from an analysis of whether a judgment would in fact be preclusive). Thus, the university was a required party under Rule 19(a)(1)(B)(i).
• Proceed or dismiss? As a state university, Jackson State had sovereign immunity from suit; that interest “is necessarily impaired when plaintiffs try to use the state’s sovereign immunity to lure it into a lawsuit against its will.” That issue alone favored dismissal. The Court noted that the other, practically focused factots in Rule 19(b) also favored dismissal.

No. 20-30796 (Aug. 24, 2022).  (In honor of this fairly rare analysis of Rule 19, here is a link to Paul Hardcastle’s 1985 hit Nineteen.)

Sambrano v. United Airlines, a religious-discrimination case about an airline’s vaccine mandate that prompted a (literally) fiery dissent from the panel opinion, ended in a 13-4 vote against en banc review. A dissent again urged caution in the use of unpublished (and thus, nonprecedential) opinions in significant matters. No. 21-11159 (Aug. 18, 2022).

In the unlikely event that any litigation proceeds under Texas’ SB8 law after Dobbs, a useful reference will be Perez v. McCreary, Veselka, Bragg & Allen, P.C., which found that a plaintiff’s claim under the Fair Debt Collection Act about an inaccurate demand letter failed to satisfy Article III standing requirements:

“’Congress’s creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide whether a plaintiff has suffered a concrete harm under Article III.’ Any other rule would allow Congress to grant private plaintiffs a personal stake in enforcing regulatory law and ultimately usurp the President’s Article II authority to execute the laws. And that would aggrandize our power by letting us resolve disputes that are not ‘of a Judiciary Nature.’

No. 21-50958 (Aug. 15, 2022) (citations omitted) (applying TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021)).

The 2017 collision between the MV ACX Crystal and the destroyer U.S. Fitzgerald led to litigation in New Orleans federal court against NYK, a huge shipping concern with global operations. The district court acknowledged that for this international case, the constitutional standard for personal jurisdiction was based on the Fifth rather than the Fourteenth Amendment, but concluded that the standards were materially similar and that it lacked jurisdiction over NYK.

A Fifth Circuit panel affirmed and the en banc court did also, noting that the other Circuits addressing this constitutional question reached similar conclusions. A dissent argued that the majority’s position about jurisdiction would undermine the effective operation of Congressionally-created causes of action involving asset seizure by the Castro regime and terrorist activity. Douglass v. NYK, No. 20-30382 (Aug. 16, 2022) (en banc). The judges’ votes broke along atypical lines and are detailed below:

In State of Louisiana v. Biden, the district court enjoined the federal government from pausing certain oil and gas lease sales:

The Fifth Circuit found that the term “Pause” was too vague to satisfy Fed. R. Civ. P. 65, even considering the district court’s accompanying opinion: “The present injunction fails to meet Rule 65(d) requirements. We cannot reach the merits of the Government’s challenge when we cannot ascertain from the record what conduct—an unwritten agency policy, a written policy outside of the Executive Order, or the Executive Order itself—is enjoined. Our review of APA claims must begin by determining if there was final agency action. Where, as here, it is unclear what final agency action the district court predicated its order upon, we are unable to reach the merits of the appeal.” No. 21-30505 (Aug. 17, 2022).

The well-known poem Antigonish begins:

Yesterday, upon the stair,
I met a man who wasn’t there
He wasn’t there again today
I wish, I wish he’d go away.

In that general spirit, in recent days, both the U.S. Court of Appeals for the Fifth Circuit and the Court of Appeals for the Fifth District at Dallas had close en banc votes involving questions of arbitrability, as to a party who “wasn’t there”–who had not signed an arbitration agreement, but was nevertheless potentially subject to it. (The Dallas case is discussed here; the Fifth Circuit’s, here.)

Whether the timing is an example of synchronicity I will leave to others. The courts’ difficulty with these issues shows the strong feelings provoked by the issue of court access, even among very sophisticated jurists, in an area of the law with well-developed case law on many key points.

In CAE integrated, LLC v. Moov Techs., aoLtd., the plaintiff (CAE) sought a preliminary injunction, alleging that a former employee (Meissner) improperly took confidential information about customers to his new employer (Moov). The district court found otherwise and the Fifth Circuit affirmed on the record presented, noting:

1. “Meissner’s knowledge of whom he worked with while at CAE, absent other evidence, is insufficient to support a finding that he misappropriated trade secrets.”
2. “CAE has not identified a single contact whose information was not publicly available or ascertainable through proper means. Semiconductor industry participants are available in third-party directories, meet at conventions and trade shows, and can be found through online searches.”

The Court also noted that the employee had lost access to the relevant Google Drive some time before the injunction hearing. No. 22-50034 (Aug. 9, 2022).

By an 8-8 vote over a dissent, the full Fifth Circuit declined to review Newman v. Plains All Am. Pipeline, L.P., a case about a court’s power to determine arbitrability when a nonsignatory seeks to enforce an arbitration clause. The breakdown of votes was as follows (Senior Judge King was the third panel member):

The plaintiff in Beatriz Ball, L.L.C. v. Barballago Co. alleged that a competitor’s line of tableware infringed on the plaintiff’s unregistered trade dress for its Organic Pearl, products.

After a 3-day bench trial, the trial court ruled for the defendant. The Fifth Circuit reversed and remanded. The key Lanham Act issue was whether the plaintiff’s trade dress had acquired secondary meaning. Of the seven relevant factors, three required additional scrutiny on remand:

• Volume of sales. “Beatriz Ball offered evidence of the exact volume of sales attributable to the Organic Pearl collection. … [W]hether this multimillion-dollar volume of sales ultimately weighs for or against secondary meaning should be reconsidered. No current circuit precedent expressly addresses a $6.6 million volume, but two cases uphold much higher volumes and one rejects a much lower volume as indicia of secondary meaning.”
• Nature of use in newspapers and magazines. “In its analysis of the ‘newspaper and magazines’ factor, the district court observed that ‘very few of the advertisements reference the collection by name and just as many advertisements highlight Beatriz Ball pieces from other collections.’ As Beatriz Ball points out, however, ‘[t]his is not a suit over rights to a name; it’s a suit over rights to product designs.'” 
• Defendant’s intent. “Beatriz Ball’s trade dress claim is not confined to products that include a pearl rim or that might include some distortions in the product’s shape. As described, the trade dress exhibits a unique combination of features pertaining to the individuality of each piece, the irregular and unpredictable size and shape of the pearls, the undulated shape of the body, the metallic shine, and the overall, accurate impression that each piece was handmade with artisanal quality. None of the products presented at trial incorporated these elements holistically like the Pampa Bay products.” 

No. 21-30029 (July 12, 2022).

In a change from the constitutional issues that have plagued the SEC in court of late, in SEC v. World Tree Financial, LLC, the Fifth Circuit affirmed a securities-fraud judgment based on “a fraudulent ‘cherry-picking’ scheme, in which [defendants] allocated favorable trades to themselves and favored clients and unfavorable trades to disfavored clients.” Proof of this scheme required sophisticated statistical analysis, summarized as follows:

To analyze World Tree’s allocation data, [the SEC’s expert] divided the client accounts into three categories: (1) accounts controlled by Perkins, Gilmore, or both (“Favored-Perkins accounts”); (2) accounts owned by World Tree clients other than Matthew LeBlanc and his business Delcambre Cellular (“Favored-Client accounts”); and (3) accounts owned by LeBlanc and Delcambre (“Disfavored accounts”). She then measured several performance measures and subsets of trades: most and least profitable trades, day trades, average first-day returns, earnings-day trades, overlapping stocks, and trades after LeBlanc complained to Perkins about his accounts’ poor performance. According to her analysis, from July 2012 to July 2015, Perkins methodically allocated trades with favorable first-day returns to the FavoredPerkins and Favored-Client accounts, while allocating trades with unfavorable first-day returns to the Disfavored accounts.

[She] opined that the “evidence overwhelmingly indicates that Perkins engaged in cherry-picking.” Though she acknowledged at trial that the data reflected only a pattern and that she did not “have the ability to identify individual trades that may or may not be improper,” the data in the aggregate showed a “one in one million chance that these patterns could have occurred if allocations were being made without regard to first-day return.”

No. 21-30063 (Aug. 4, 2022).

Beatriz Ball, L.L.C. v. Barballago Co., No. 21-30029 (July 12, 2022), a trade-dress case under the Lanham Act, produced a thorough concurrence by soon-to-depart Judge Costa about the distinctions between review of bench trials, and review of jury verdicts. He began by observing:

“I write separately to remark on how our remand of the trade dress claim reveals a paradox that has perplexed me about bench trials: We give a trial judge’s detailed and intensive factfinding less deference than a jury’s unexplained verdict.

If a jury had rejected Beatriz Ball’s trade dress claim—giving no more  explanation than a simple ‘No’ on the verdict form—we would presumably affirm. After all, we do not hold that Beatriz Ball is entitled to judgment as a matter of law on this claim. Instead, we remand for the district court to reassess the trade dress claim because of some errors in its 33 pages explaining why it found no protectable trade dress.”

And he concluded after a review of history and social-science research: “It turns out, then, that there is good reason for the seeming anomaly of giving less deference to bench trials: Larger and more representative groups are the ones more likely to reach the correct outcome.”

In its analysis, the concurrence notes one commentator’s observation that “while the Seventh Amendment does not compel the backwards-seeming rule giving less deference to judges’ findings, it does explain it. ‘[O]ur traditional and constitutionalized reverence for jury trial’ is why we trust juries more.” An element of that “traditional reverence” may well include some indifference to whether a jury in fact reaches a “correct” result, as the mere existence of a jury has a powerful symbolic value in its own right. See generally Batson v. Kentucky, 476 U.S. 79, 90 (1986) (“In view of the heterogeneous population of our Nation, public respect for our criminal justice system and the rule of law will be strengthened if we ensure that no citizen is disqualified from jury service because of his race.”).

The Fifth Circuit found that the federal courts had “related to” jurisdiction because of the relationship between litigation and a bankruptcy plan:

“In Zale, the dispute between NUFIC and Cigna risked disrupting Zale’s reorganization by threatening Zale’s recovery from and access to the Cigna policy funds. Here, NFC’s claims risked the same disruptions: GenMa had pledged to pay the Lessors lots of money and to keep specified cash reserves as part of a global settlement between several parties to GenOn’s restructuring. By threatening GenMa’s ability to fulfill those commitments, NFC’s claims pertained to ‘the implementation and execution’ of that crucial settlement, which was part of GenOn’s plan. Craig’s Stores, 266 F.3d at 390. So we have related-to jurisdiction. 28 U.S.C. § 1334(b).”

Natixis Funding Corp. v. Gen-On Mid-Atlantic, LLC, No. 21-20557 (July 29, 2022).

The panel majority in E.T. v. Paxton held that a group of students lacked standing (based on their concerns about catching COVID-19) to challenge Governor Abbott’s order prohibiting school mask mandates, noting:

“This circuit does not ‘recognize the concept of probabilistic standing based on a non-particularized increased risk—that is, an increased risk that equally affects the general public.’ And even where increased-risk claims are particularized, they generally ‘cannot satisfy the actual or imminent requirement,’ which necessitates ‘evidence of a certainly impending harm or substantial risk of harm.’ That’s because ‘[m]uch government regulation slightly increases a citizen’s risk of injury—or insufficiently decreases the risk compared to what some citizens might prefer.'”

But cf. Sambrano v. United Airlines, No. 21-11159 (Feb. 17, 2022) (unpublished) (finding standing in a COVID vaccine-mandate case when: “Plaintiffs are several United employees who requested religious or medical accommodations from United. Those requesting religious accommodations did so out of concern that aborted fetal tissue was used to develop or test the COVID-19 vaccines.”).

My colleague Kyle Gardner and I wrote this article for the most recent Headnotes about two cases–one federal, one state–that summarize basic personal-jurisdiction principles for Texas in business cases.