During an Erie analysis of a Louisiana-law issue, the Fifth Circuit observed: “We are ‘a strict stare decisis court,’ meaning that a prior panel’s interpretation of state law is ‘no less binding on subsequent panels than are prior interpretations of federal law.'” QBE Syndicate 1036 v. Compass Minerals Louisiana, Inc., No. 23-30076 (Oct. 12, 2023). What distinguishes a “strict stare decisis court” from a less-strict one is not entirely clear, but the application of the “rule of orderliness” to state-law issues is well settled.

United States v. Johnson, a criminal case, identifies an erroneous statistics-based argument called “the prosecutor’s fallacy,” and the structure of that argument is of general interest to all litigators:

At Johnson’s second trial, the government introduced expert testimony about a partial DNA sample obtained from a bandana found in the vehicle used in the robbery. Testing yielded inclusionary match statistics capturing the probability that the sample was Johnson’s as compared to a coincidental match of an unrelated person, and the lowest inclusionary match statistic had an error rate of one in 4,100. That is, the expert explained, only one in 4,100 people would match the sample as strongly as Johnson did. But, in the government’s first closing argument, the prosecutor said that Johnson “left very little DNA, but he left just enough to prove that it was him in the front seat when you combine the 1 in 4,100 chance that it’s not him.” Johnson did not object.

 

The prosecutor’s fallacy occurs when “a juror is told the probability a member of the general population would share the same DNA is 1 in 10,000 (random match probability), and he takes that to mean there is only a 1 in 10,000 chance that someone other than the defendant is the source of the DNA found at the crime scene (source probability).” Conflating these two probabilities, as the prosecutor did here, yields “an erroneous statement that, based on a random match probability of 1 in 10,000, there is a 0.01% chance the defendant is innocent or a 99.99% chance the defendant is guilty.” 

No. 22-30421 (Oct. 26, 2023) (citation omitted). Note that the Court did not reverse on this issue in this case. The above graphic was supplied by DALL-E, a feature of the newest iteration of ChatGPT.

In Louisiana Creole cooking, gumbo is a flavorful, roux-based soup made with the ingredients available to the chef. Similarly, Alliance for Fair Board Recruitment v. SEC addresses a host of constitutional issues of the day, including the questions whether a board-membership disclosure requirement by Nasdaq can be “state action”; whether the SEC’s approval of such a rule exceeded its statutory authority (including the subsidiary questions whether that action infringed on state sovereignty or involved a “major question”); and whether the SEC properly assessed the relevant record in reaching its conclusion. Unusual for the Fifth Circuit, the panel consisted of three judges appointed by Democratic presidents. It remains to be seen what the view of the full court will be on these matters. No. 21-60626 (Oct. 18, 2023).

Thanks to a persuasive letter from a typographically sophisticated attorney, the Maryland Supreme Court recently recently modernized its list of acceptable fonts, as follows (omitting Palatino and Equity, however). Thanks to my law partner Greg Brassfield for drawing this to my attention!

Also of general interest, the letter links to an informative series of Tweets about the typography used in the federal courts of appeal.

The question in Armadillo Hotel Group v. Harris was whether Armadillo’s federal-court trade-secrets claim constituted “claim splitting,” given earlier, related litigation between the same defendants and an entity related to Armadillo. The Fifth Circuit agreed with the district court’s conclusion as to the claims, but remanded for further development of the record about the parties:

• Claims: “It is irrelevant that Harris and McDaniel brought suit against AHG Management on the basis of fraudulent inducement related to their employment. Although Harris and McDaniel have a different cause of action than Armadillo, our focus is the relevant claims that arise out of a common nucleus of operative facts.”
• Parties: “The Defendants rely on the similarities in Armadillo’s and AHG Management’s descriptions of themselves, in the shorthand names they use in their respective cases, in their services and customers, and in their descriptions of the confidential information at issue. … Perhaps an inference is reasonable that Armadillo and AHG Management are in privity based on the similarities the Defendants highlight. At the motion to dismiss stage, however, such inferences are inappropriate.”

No. 22-50945 (Oct. 20, 2023) (emphasis in original).

Two recent opinions touch on the important but infrequently addressed topic of judicial recusal. In one, the Fifth Circuit’s Chief Judge identified a complaint against a prominent bankruptcy judge based on an allegedly inappropriate personal relationship. In the other, a panel rejected a request to recuse a district judge from several Deepwater Horizon cases based on a past law-firm partnership.

The remand of Collins v. Yellen, 141 S. Ct. 1761 (2020) did not end well for the plaintiffs, as the district court concluded that they “had not plausibly alleged that the removal restriction” on FHFA’s director caused them harm. The plaintiffs made a valiant effort to bring the case within the scope of a recent Fifth Circuit holding about the Appropriations Clause, but the Fifth Circuit found that its holding in that case did not create a change in the relevant law that was sufficient to overcome the mandate rule. Collins v. Dep’t of the Treasury, No. 22-20632 (Oct. 12, 2023).

The Fifth Circuit reversed the district court and allowed the City of Dallas’s ordinance requiring sexually oriented businesses to shut down by 2 AM, summarizing: “”Under longstanding Supreme Court precedent, the Ordinance is likely constitutional. The City’s evidence reasonably showed a link between SOBs’ late-night operations and an increase in “noxious side effects,” such as crime. The Ordinance also left the SOBs ample opportunity to purvey their speech at other times of the day and night.” Assoc. of Club Executives v. City of Dallas, No. 22-10556 (Oct. 12, 2023).

A case about allegedly stolen computer code concluded with a case-ending sanction against the defendant. The Fifth Circuit affirmed; in sum:

Dabral admittedly deleted evidence, delayed discovery on several occasions, and ignored court orders. And, when he was offered one last “chance” to “come clean” and submit an unmodified source code control system, he didn’t. Instead, he deleted more evidence and produced a copy of the system that had numerous other files missing. Per his own expert, those deletions were seemingly “intentional” and done after the filing of Calsep’s suit and even after the district court’s disclosure order. So, the district court concluded that Dabral acted willfully and in bad faith. The court didn’t reach that conclusion easily. Instead, it came after months of violations and a long evidentiary hearing. Only then did it make its informed decision. 

Calsep A/S v. Dabral, No. 22-20440 (Oct. 11, 2023).

In a revised opinion, the Fifth Circuit again affirmed the convictions of executives associated with a “Ponzi-like scheme” involving United Development Funding. The Court reviewed a number of sufficiency challenges to various securities fraud charges; an example of its reasoning is as follows:

It does not matter that UDF IV and UDF V had collateral on the loans that it transferred to UDF III. Nor does it matter that they did not intend to cause investors financial loss. (citation omitted) (“[T]he [fraud] statute, while insisting upon ‘a scheme to defraud,’ demands neither a showing of ultimate financial loss nor a showing of intent to cause financial loss.”). Appellants exposed investors to risks and losses that, if publicly disclosed, would have decreased its value and investment power. That is enough to support a fraud conviction.

United States v. Greenlaw, No. 22-10511 (Oct. 11, 2023).

SXSW, LLC v. Federal Ins. Co., an insurance-coverage case arising out of the 2020 cancellation of South by Southwest because of COVID-19, presented some “evergreen” issues about LLCs and diversity jurisdiction that led to a remand for further development of the record. The Fifth Circuit noted “at least three potential jurisdictional
defects” on the record presented–

• “First, there is a potentially important difference between LLC membership and LLC ownership. State law governs LLC formation and organization. Several states permit LLC membership without ownership. … SXSW has not shown the relevant LLCs were formed in States that equate membership and ownership.”
• “Second, SXSW stated that Capshaw [an LLC owner] was a Virginia resident. But residency is not citizenship for purposes of § 1332.”
• “Finally, there is a timing issue. For diversity jurisdiction, we look to citizenship at the time the complaint was filed. The complaint makes no allegations about the citizenship of SXSW’s members. Federal’s December 14, 2021 exhibit contains some additional information, as does SXSW’s February 22, 2023 appellant brief.But we have no way of knowing whether those later documents reflect SXSW’s membership structure as of October 6, 2021.”

No. 22-50933 (Oct. 5, 2023) (citations omitted, emphasis added).

A trucking company went into bankruptcy after its insurer paid a substantial sum to settle a personal-injury case. Other claimaints claimed that the payment was a preferential transfer, and the Fifth Circuit agreed that the claim could proceed:

As the Supreme Court explained in Begier, “[b]ecause the purpose of the avoidance provision is to the preserve the property includable within the bankruptcy estate . . . ‘property of the debtor’ subject to the preferential transfer provision is best understood as that property that would have been part of the estate had it not been transferred before the commencement of bankruptcy proceedings.” The Policy Proceeds would have been property of the estate at the time the petition was filed if they had not been transferred. Thus, for the purposes of the avoidance provision as stated in Begier, the Policy Proceeds are the property of the estate.

Law Office of Rogelio Solis PLLC v. Curtis, No. 23-40125 (Oct. 6, 2023) (citations omitted).

In a dissent from a recent, close en banc vote in a criminal case, Judge Smith reiterated an earlier warning to again caution: “Highly consequential opinions should not be designated as unpublished in an obvious effort to discourage judges from voting in favor of en banc rehearing.” United States v. Ramirez, No. 22-50042 (Sept. 19, 2023).

Carbon Six Barrels, LLC v. Proof Research, Inc., a state-law trademark case about the design of gun barrels, turned on an Erie conclusion about Louisiana prescription law:

While true that Hogg and Crump arose in the context of damage to real property, we, like the district court, see no reason that the general principle those opinions announced should not apply here. The Louisiana Supreme Court made clear that “[t]he inquiry [as to a continuing tort] is essentially a conduct-based one, asking whether the tortfeasor perpetuates the injury through overt, persistent, and ongoing acts.” … This principle is not confined to the real property context. The district court was correct in stating that the earlier cases Carbon Six cites “are generally inconsistent with the [Louisiana] Supreme Court’s holding in Hogg,” and that “Louisiana law does not support the broad proposition that LUTPA’s prescriptive period is suspended as long as a perpetrator of fraud fails to correct his false statements.” This proposition would transform nearly every business dispute into a continuing tort. 

(citations omitted). Also, I spoke about “AI and the Legal Profession” at the recent annual meeting of the Bar Association of the Fifth Federal Circuit, and used the briefs in this case to illustrate the capabilities (and deficiencies) of generative AI–here is my PowerPoint!

In re Landry presents a baffling interaction between: (1) the ongoing appeal of  a preliminary injunction in a Louisiana congressional-district case, and (2) a mandamus proceeding, challenging the setting of a district-court hearing about a remedial plan, related to that same redistricting dispute.

By a 2-1 vote, a panel granted mandamus relief against that hearing going forward, noting the unusual policy and separation-of-power considerations that arise in redistricting cases. The dissent would have consolidated the mandamus proceeding with the ongoing appeal, and a concurring judge indicated that he would have been inclined to do so too, had the panel handling the preliminary-injunction appeal so asked. No. 23-30642 (Sept. 28, 2023).

Together with the able Ben Taylor, I have an article in the most recent Baylor Law Review called “Judgment Rendition in Texas.” The abstract is below. Our article was inspired by a 1975 article by Justice Robert Calvert in the Texas Tech Law Review called “Appellate Court Judgments or Strange Things Happen on the Way to Judgment.” We hope that we updated some of his insights for modern-day appellate practice.

The Supreme Court has granted review of three social-media regulation cases, one of which is the 2022 2-1 panel opinion by the Fifth Circuit in Netchoice v. Paxton, which conflicts with a 2022 opinion from the Eleventh Circuit about similar subject matter. These are the two issues referenced in the Court’s order granting review: