Applying the international convention about arbitration, the Fifth Circuit found an abuse of discretion in not compelling arbitration because of equitable estoppel, reasoning:

While Bufkin was certainly free to name and then dismiss the foreign insurers, the district court was not free to disregard them in considering the domestic insurers’ motion to compel arbitration. Yet in focusing on Bufkin’s dismissal of the foreign insurers, the district court neglected to consider the foreign insurers’ part in the seamless coverage agreement struck by the parties, and Bufkin’s interactions with the insurers. Honing in, that coverage arrangement included the arbitration clause that afforded the insurers–foreign and domestic—“predictability in resolving disputes dealing with the substantial risks presented by a surplus lines insurance policy.” …  The upshot is that indulging Bufkin’s pleading-and-then-dismissing gamesmanship by denying arbitration turns on its head the axiom that “[t]he linchpin for equitable estoppel is equity—fairness.”

Bufkin Enterprises, LLC v. Indian Harbor Ins. Co., No. 23-30171 (March 4, 2024) (emphasis added).

After an earler (unexplained) grant of an administrative stay touched off weeks of fast-paced appellate litigation about Texas’s “SB4” immigration law, a majority of the Fifth Circuit’s merits panel denied any further stay of the trial court’s injunction against enforcement of that law. USA v. Texas, No. 24-50149 (March 26, 2024). Argument is scheduled next week; barring Supreme Court intervention, merits opinions similar to these are likely.

The Fifth Circuit made/ an interesting observation about the comparative weight of Erie precedent in SXSW LLC v. Fed. Ins. Co.:

Federal cites two federal district courts to support its broader interpretation. …  But these authorities are worth relatively little in this case. Our focus is on Texas law as interpreted by the Texas state courts.

No. 22-50933 (March 21, 2024) (unpublished).

This morning’s Supreme Court arguments in the mifepristone cases (which will be available here when ready) lead to a couple of observations about legal issues of the day:

1. Standing. As the Washington Post effectively summarized: “A majority of justices from across the ideological spectrum expressed skepticism that the antiabortion doctors challenging the government’s loosening of regulations have sufficient legal grounds — or standing — to bring the lawsuit.” (Last year, I wrote about the “conservative” approach to standing in high-profile constitutional cases in a Slate article, and the application of basic standing principles in the mifepristone cases in this Dallas Morning News editorial.)
2. Comstock. Justice Holmes famously observed: “The common law is not a brooding omnipresence in the sky.” But the Comstock Act is, and Congress should do something about the law before its 1870s-era moralism is inflicted on modern society. Mark Stern’s X feed on the mifepristone arguments summarizes some of the present state of play.

A propane grill exploded; the injured plaintiff won a judgment against the supplier of the propane tank, and the Fifth Circuit reversed in Johnston v. Ferrellgas, Inc.:

[T]he circumstantial evidence on which the Johnstons rely does not cure the want of proof that the tank was defective when it left Ferrellgas’s possession. This is not a res ipsa case. Indeed, the Johnstons did not advance that theory of liability before the district court or before us. In sum, the Plaintiff’s expert admitted that he could not say the tank was defective at the time it left Ferrellgas, making his prior comments about the tank’s condition at that time pure speculation; the tank functioned properly before Johnston used it; the tank and seal are not sealed containers; and both parties agree Ferrellgas successfully refilled the tank with gas under highpressure months before the accident. There is no reasonable basis on which the jury could find the Johnstons met their burden.

No. 23-10019 (March 21, 2024). A dissent saw matters differently.

In the 1950s, Big Tobacco advertised the safety of “Kent with the Micronite Filter,” which was unfortunately made with an exceptionally dangerous form of asbestos. After decades of advertising bans and mandatory disclosures, the battle over cigarette ads continues, leading most recently to R.J. Reynolds Tobacco Co. v. FDA – a First Amendment challenge to new, more graphic disclosures about the potential harms of smoking.

The Fifth Circuit rejected the challenge (reversing a contrary district-court opinion) and remanded for consideration of claims involving the Administrative Procedure Act. As to the First Amendment issues, the Court summarized:

When determining whether Zauderer applies, (1) images can be factual; (2) ideological or emotion-inducing statements are not per se controversial or non-factual; (3) “uncontroversial” means not subject to good-faith dispute about the accuracy of the factual statement; and (4) legitimate state interests other than the prevention of consumer deception are cognizable under Zauderer. For the reasons detailed above, the district court erred by finding Zauderer inapplicable to the FDA’s newest Warnings. Applying Zauderer, the Warnings survive constitutional muster against the First Amendment challenge.

No. 23-40076 (March 21, 2024).

In Wilmington Savings Fund Society, FSB v. Myers, the appellant argued that its notice of appeal was timely, when filed within 30 days of a second judgment, and when the first judgment “was mislabeled because even though it purported to dispose of all claims and parties in the case, the title of the order did not signal that it was a final judgment.”

The Fifth Circuit agreed. Noting that “[o]rdinarily, such minor changes to an order do not ‘disturb or revise legal rights and obligations’ of the parties” (cleaned up), it concluded that “there was in this case a clear discrepancy between the label and the body of the district court’s order” that was sufficient to treat it as a substantive revision for purposes of calculating the appeal deadline. No. 24-20018 (March 18, 2024) (applying FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211 (1952)).

(The graphic was provided by DALL-E, and explained by it as follows: “The images above illustrate the concept of a substantive change versus a change solely of form, through the comparison of a caterpillar’s transformation into a butterfly (substantive change) and a chameleon’s color change (change of form).”

All eyes will be on New Orleans this morning, for the (videoconferenced) arguments in United States v. Texas, where last night’s order suggests a 2-1 decision will be forthcoming that continues to bar enforcement of Texas’s SB4 during the pendency of its appeal. The Supreme Court will likely be asked about the resulting order, whatever it may be.

Earlier this month, the Fifth Circuit granted mandamus relief, including the issuance of a writ of mandamus to the Western District of Texas, requiring that the district court request the return of a case from the District of the District of Columbia. That request was made on March 7. As of March 19, that court had not ruled on the request, and the CFTC continues to urge that the court delay action until it has received further briefing on the venue issue.

In Calogero v. Shows, Cali & Walsh, LLP, (discussed earlier this week for stylistic reasons), a panel majority found that two recipients of certain Hurricane Katrina relief stated a viable Fair Debt Collection Act claim when:

• The longest possible limitations period (10 years) had run by the time the demand letters requested payment; and
• The demand letters threatened a claim for attorneys fees, when the relevant documents only created a specific right to potential fee recovery that did not include the alleged debt at issue.

The third judge, without opinion, concurred in the result only. No. 22-30487 (March 15, 2024).

Michael Cloud, a former NFL running back, sued the NFL’s retirement fund for additional disability benefits. The Fifth Circuit reversed a trial-court ruling in his favor, noting the one-sided nature of the plan’s operations, but concluding:

Cloud’s claim fails because he did not and cannot show any changed circumstances entitling him to reclassification to the highest tier of benefits. He could have appealed the 2014 denial of reclassification to Active Football status—but he did not do so. Instead, Cloud filed another claim for reclassification in 2016, which subjected him to a changed-circumstances requirement that he cannot meet—and did not try to meet. He therefore forfeited the issue at the administrative level and at any rate has not pointed to any clear and convincing evidence supporting his claim.

The district court’s findings about the NFL Plan’s disregard of players’ rights under ERISA and the Plan are disturbing. Again, this is a Plan jointly managed by the league and the players’ union. And we commend the trial court judge for her diligent work chronicling a lopsided system aggressively stacked against disabled players. But we also must enforce the Plan’s terms in accordance with the law.

Cloud v. Bell-Rozelle NFL Player Retirement Plan, No. 22-10710 (revised March 17, 2024).

You can tell your argument isn’t working when the Fifth Circuit summarizes it as follows:

“SCW’s last remaining counterargument is that it should be able to pick and choose different clauses from the LSAA and the Grant Agreement and then mush them together to demand money from debtors.”

and when the Court begins its opinion:

“Widowed octogenarians Iris Calogero and Margie Nell Randolph received dunning letters from a Louisiana law firm … .”

Calogero v. Shows, Cali & Walsh, LLP,  No. 22-30487 (March 15, 2024). More substantive review to follow in the week ahead!

The Judicial Conference has voted to strenghen its policy about random case assignment, as set forth here.

Deanda v. Becerra presents a conflict between Title X (a federal law about the availability of contraception), and a Texas parental-consent statute. The Fifth Circuit found no conflict, and thus no preemption. On the threshold question of standing, the Court rejected the argument that any parent could sue about this issue, observing, inter alia: “This case does not concern all ‘parents or potential parents.’ It concerns only a parent with particular religious beliefs about raising his children.” No. 23-10159 (March 12, 2024).

The Fifth Court ordered a rare reversal for a new trial because of improper closing argument in Clapper v. American Realty Investors. The Court summarized the improper statements as “employ[ing] nearly every type of improper argument identified by our court, including highly improper and personal attacks against opposing counsel, remarks about Clapper’s wealth, a discussion of matters not in the record, insinuations that Clapper had lower moral standards because he was from Michigan, and suggestions of Clapper’s bad motives through counsels’ opinion.”

The Court concluded: “We remind all practitioners in our court that zealous advocacy must not be obtained at the expense of incivility. As Judge Reavley aptly explained, ‘Although earnest, forceful, and devoted representation is both zealous and proper, Rambo and kamikaze lawyers lead themselves and their clients to zealous extinction.'” No. 21-10805 (March 8, 2024).

Notably, footnote two dismisses several arguments about preservation, concluding that “[t]he serious nature of the argument in this trial … indicates that substantial justice requires a new trial ….”

In the ongoing proceedings about the transfer of venue in a dispute between SpaceX and the NLRB, a Fifth Circuit judge has held the mandate – a step often seen in difficult cases where en banc review is possible. Interestingly, in Texas state practice, a mandate does not issue in a mandamus proceeding, because a mandamus petition is an original proceeding in the court of appeals and there is no jurisdiction to return to a trial court.

I apologize for the peculiar look of many of the site’s posts. A WordPress “plug in” has malfunctioned and until it is replaced, the site’s graphics will just look a little funny.

Last week, the Central District of California returned a case to Texas district court, after the Fifth Circuit pointed out that it had issued a stay order (in a mandamus proceeding brought to challenge the venue transfer) before the California court had docketed the transferred matter.

Then, after the return of the case to Texas, the Court denied mandamus relief. The majority did not write an opinion. A dissent would have granted the writ. In re SpaceX, No. 24-40103 (March 5, 2024). It remains to be seen what court will act next.

In Cheapside Minerals, Ltd. v. Devon Energy Prod Co., L.P., the Fifth Circuit concluded that CAFA’s “local controversy” exception did not apply, and thus reversed a remand to state court in an oil-and-gas royalties dispute:

[T]he “principal injury” each Plaintiff sustained is obvious because there was only one type of injury: a financial harm resulting from Devon’s alleged underpayment of their royalties. While most Plaintiffs sustained that injury in Texas, others did not. Therefore, the principal injuries prong is not satisfied in this case, and Plaintiffs have failed to demonstrate that the local controversy exception applies.

No. 24-40026 (March 1, 2024).

After a case was transfered to the District of Columbia, the Fifth Circuit granted mandamus relief about that transfer in In re Clarke, focusing on the district court’s analysis of the “local interest” factor

          [E]vents giving rise to the suit can be separated into two categories: The first concerns individual traders who purchased contracts on the marketplace. Five of them are based in Austin, bought their contracts from Austin, and have been harmed in Austin. The second category deals with marketplace service providers—Aristotle and PredictIt. Based in D.C., they “expended significant resources to assist Victoria University in developing and operating the PredictIt Market” and “will be forced to incur massive administrative, labor, time, and other costs if forced to liquidate pending contracts prematurely.”

          Given those events, there is an obvious connection between the facts giving rise to this case and the Western District of Texas. And, if we assume that Aristotle’s and PredictIt’s development and operations activities occurred in D.C., there is also a factual connection with D.D.C.

          Additionally, the effect of this suit is completely diffuse. Should plaintiffs prevail on their APA challenge, this court must “set aside” CFTC’s ultra vires recission action, with nationwide effect. That affects persons in all judicial districts equally.

No. 24-50079 (March 1, 2024) (footnote omitted). As with last week’s decision in a similar posture involving SpaceX, it remains to be seen whether the transferee district court will return the case.

Together with Marcy Greer, I recently gave an update about recent Fifth Circuit cases at the first-ever Central Texas Bench-Bar meeting. This is our PowerPoint from the March 1 presentation.