The dispute about the “spending freeze memo” from the start of the Trump Administration continues with this preliminary injunction – of particular interest is the detailed analysis of the “voluntary cessation” doctrine in the context of mootness.

At a recent BAFFC CLE program at the Texas A&M Law School in Fort Worth, the Fifth Circuit’s able clerk Lyle Cayce presented the most recent version of his office’s “Appeal Flowchart.” It’s a top-notch reference about that Court, and a good general guide to the workinsg of all appellate courts.

The Texas Lawbook reports that DOGE has emailed at least six federal judges in Texas asking them to justify their employment, along with staff and clerks. Link is here.

In State of Texas v. Trump, the Fifth Circuit considered whether an executive order by President Biden, mandating a $15 minimum wage for federal contractors, fell within his authority under the Federal Property and Administrative Services Act (FPASA). That statute lets the President “prescribe policies and directives that the President considers necessary to carry out this subtitle,” provided that these policies are consistent with the Act’s objectives. The court found that the Executive Order’s purpose of promoting “economy and efficiency in procurement by contracting with sources that adequately compensate their workers” aligns with the FPASA’s goals, and that the minimum-wage requirement was within the scope of his discretion. No. 23-40671 (Feb. 4, 2025).

Another lawsuit challenging a substantial federal-government reduction in force encountered a justiciability problem–this time, preemption by federal labor law (even though the agencies charged with implementing those laws have their own personnel issues).

Continuing a theme seen in an earlier DOGE-related ruling, a district judge in Washington DC denied a TRO in a data-access case, observing: “The court is aware that DOGE’s unpredictable actions have resulted in considerable uncertainty and confusion for Plaintiffs and many of their agencies and residents. But the ‘possibility’ that Defendants may take actions that irreparably harm Plaintiffs ‘is not enough.'” (emphasis in original, citations omitted).

The plaintiff in Pie Development v. Pie Carrier Holdings, Inc. tried to have its pie and eat it too, encountering a res judicata bar as a result of previous litigation. Specifically, in the earlier case, the plaintiff was given leave to replead and instead elected to appeal, after which the Fifth Circuit affirmed. In this, second, case, the Court held:

After the district court dismissed the Pie I claims without prejudice, Pie Development declined the opportunity to amend its complaint in the district court and chose instead to appeal. Although we have not directly addressed the application of res judicata in these unique circumstances, our caselaw suggests that there is a final judgment on the merits in such a case. When a prior action is dismissed without prejudice and the plaintiff, declining the opportunity to amend the complaint, appeals, the dismissal without prejudice converts to a dismissal with prejudice and constitutes a final judgment on the merits for res judicata purposes.

No. 24-60155 (Feb. 3, 2025).

I make a provocative point in Salon today, suggesting that a litigant unwilling to respect judicial mandates should not expect a warm welcome from the courts.

Standing rules apply to the left and the right, as shown by the District of the District of Columbia’s recent dismissal on standing grounds of a lawsuit brought by labor unions about the “buyout program” for federal employees. The plaintiff unions had the same threshold problems that the doctors’ organizations had in the Supreme Court’s mifepristone opinion from 2024.

In National Automobile Dealers Assoc. v. FTC, the Fifth Circuit vacated the FTC’s “Combating Auto Retail Scams Trade Regulation Rule” (CARS Rule) because the FTC failed to to issue an advance notice of proposed rulemaking (ANPRM) as required by its own regulations.

The court rejected the FTC’s argument that the Dodd-Frank Act exempted it from the ANPRM requirement.  While the Dodd-Frank Act allows the FTC to use regular APA procedures for rulemaking concerning auto dealers, it does not eliminate the FTC’s internal procedural safeguards. A dissent argued that the petitioners failed to show prejudice from the lack of an ANPRM, given their extensive participation in the rulemaking process. No. 24-60013, Jan. 27, 2025

Airlines for America v. DOT addressed when additional rulemaking notice is called for because of new factual information. The Fifth Circuit concluded that the Department of Transportation (DOT) had relied on new data from a study study, to justify its rule on airline fee disclosures without providing an opportunity for public comment on this data.

This omission was material because the study supplied basic assumptions used by the DOT to estimate the net benefits of the rule, which ranged from $30 million to $254 million annually. The Court stated that the DOT’s reliance on this new data without public input constituted a “serious procedural error.” Nos. No. 24-60231 and 24-60373 (Jan. 28, 2025).

The Fifth Circuit returned to the question of standing in Airlines for America v. DOT, as to the standing of Texas to challenge the DACA program. The Court reaffirmed that Texas has standing based on a “pocketbook-injury theory,” which asserts that the presence of DACA recipients imposes significant financial burdens on the state.

Specifically, Texas argued that it incurs over $750 million annually in costs related to emergency healthcare and public education for DACA recipients. The Court stated:  “Texas has made this showing by putting forward sufficient, unrebutted evidence to support the ‘common-sense assertion’ that, absent DACA, some recipients would leave the United States.”

The Supreme Court and the Fifth Circuit have not seen eye-to-eye in a number of recent cases that present questions of standing. In this case, however, the Court concluded that these recent cases did not unequivocally overrule the Fifth Circuit’s prior holding in an earlier appeal that concluded Texas had standing to challenge DACA. No. 23-40653, Jan. 17, 2025.

Texas Bankers Association v. CFPB presents a sign of the times, with the change of Presidential administrations: “A new President was inaugurated January 20, 2025. This case had already been set to be orally argued on February 3, 2025. The morning of oral argument, CFPB notified the court that “[c]ounsel for the CFPB has been instructed” by new leadership “not to make any appearances in litigation except to seek a pause in proceedings.” Accordingly, although both sides appeared in court as scheduled, only Texas Bankers addressed the merits.” No. 24-40705 (Feb. 7, 2025). A temporary stay was then ordered to allow the CFPB to finalize its decisionmaking about the case.

Cook v. Marshall addressed the issue of citizenship of a trust for jurisdictional purposes. The Fifth Circuit noted that “traditional trusts . . . were not considered distinct legal entities at common law, and hence cannot sue or be sued in their own name.”  Under that rule, only the citizenship of the trustee parties matters for diversity purposes.  Applied here, that rule means that complete diversity existed because the trustee parties, Cook and Marshall, were citizens of different states—Louisiana and Texas, respectively. The Court referenced the Seventh Circuit’s approach in the 2018 case of Doermer v. Oxford Fin. Group, which held that “when a trustee of a traditional trust ‘files a lawsuit or is sued in her own name, her citizenship is all that matters for diversity purposes.'” No. 24-30222, Jan. 23, 2025

My friend Arturo Ayala at CSBA recently wrote this useful article about what happens to a supersedeas bond when the appeal ends.

In McDonnell Grouo, LLC v. Starr Surplus Lines Ins. Co., the Fifth Circuit addressed the perennial topic of contract ambiguity; in this case, in the context of a builder’s risk insurance policy. The court affirmed the district court ‘s conclusion that the flood deductible provision in the policy was ambiguous.

The ambiguity arose from the language: “5% of the total insured values at risk at the time and place of loss subject to a $500,000 minimum deduction as respects … FLOOD.” The plaintiffs and the insurers had reasonable interpretations of this provision, but extrinsic evidence, in the form of industry standards and expert testimony, resolved the ambiguity. That extrinsic evidence clarified the term “VARTOL” (value-at-risk-at-time-of-loss) to mean the total value of the project at the time of loss, favoring the insurers’ interpretation. No. 23-30824, Jan. 29, 2025.