In Texas Corn Producers v. U.S. EPA, the EPA disputed the plaintiffs’ standing; among its arguments it “counters that automakers might respond to the inflated CAFE stringency in four different ways—not all of which decrease gasoline demand. Thus, EPA contends, the petitioners’ alleged injury is too speculative to support Article III standing.”

The Fifth Circuit expressed skepticism, noting that this argument was not consistent with the purpose of the challenged regulation in the first instance: “But EPA misses the forest for the trees. Indeed, reducing fuel demand is the core purpose of the CAFE standards. As NHTSA explained in its latest CAFE rulemaking, the current standards are estimated to ‘reduce gasoline consumption by 64 billion gallons relative to reference baseline levels for passenger cars and light trucks … through calendar year 2050.’ If EPA additionally increases CAFE stringency through the backdoor, then gasoline consumption will predictably fall even further.” No. 24-60209 (June 24, 2025) (footnote omitted, emphasis in original).

In Weslease 2018 Operating, LP v. Behan, the Fifth Circuit addressed whether appeals challenging a district court’s turnover and enforcement orders remained live after the court appointed a receiver to take possession of the judgment debtors’ property. The Court held that these appeals were rendered moot by the subsequent receivership order, which “explicitly ‘supersedes and/or amends all portions of the court’s prior orders directing the turnover of assets of any Receivership Parties to Weslease.’”

As a result, the property at issue was no longer in the hands of the original parties but under the exclusive control of the receiver, eliminating any actual controversy that the appellate court could resolve–put another way, the case was now controlled by the principle that mootness arises when “intervening circumstances make it impossible for the court to ‘grant any effectual relief.” No.24-10246, June 5, 2025.

A prescient Fifth Circuit panel opinion, perceiving the mismatch between somewhat-dated First Amendment precedent and the realities of modern-day adult entertainment, was affirmed on the last day of the Supreme Court term, albeit by using a different level of scrutiny. Free Speech Coalition, Inc. v. Paxton, No. 23-1122 (U.S. June 27, 2025). Texas’s age-verification laws for access to adult sites will stand; interest in proxy server technology will likely increase substantially.

Last term, the Supreme Court reversed a Fifth Circuit opinion that held the CFPB’s structure violated the Constitution because it was “double insulated” from the annual appropriations process.

The unfortunate track record of “double” arguments continued in this term, when the Supreme Court reversed an en banc Fifth Circuit opinion holding that the FCC’s collection of univeral-service fees amounted to impermissible “double-layered delegation” of Congressional power. The Supreme Court reasoned:

The court’s analogy and associated logic do not work. In Free Enterprise Fund, each of the two layers of for-cause protection limited the same thing—the President’s power to  remove executive officers. And when combined, each compounded the other’s effect, so that the President was left with no real authority. Or otherwise said, the two layers of restrictions operated on a single axis with the one exacerbating (we thought exponentially) the other. But that reasoning has no bearing here. A law violates the traditional (or call it, for comparison’s sake, “public”) nondelegation doctrine when it authorizes an agency to legislate. And a law—whether a statute or, as here, a regulation—violates the private nondelegation doctrine when it allows non-governmental entities to govern. Those doctrines do not operate on the same axis (save if it is defined impossibly broadly). So a measure implicating (but not violating) one does not compound a measure implicating (but not violating) the other, in a way that pushes the combination over a constitutional line. “Two wrong claims do not make one that is right.”

No. 24-354 (U.S. June 27, 2025) (citations omitted).

A toilet became clogged at a Walgreens store, after which an employee gave a customer a plunger to clear the clog. An accident happened later. The Fifth Circuit agreed that the customer was not an agent of Walgreens:

“Gonzalez’s only evidence of an agency relationship is that Perez gave the customer a plunger after Alexander granted Perez permission to do so, and that the customer apparently attempted to unclog the toilet with that plunger. While the customer arguably acted on Walgreens’s behalf, ‘a party is not an agent simply because he acts on behalf of another.’ … [W]hile Walgreens’s permitting the customer to plunge the toilet on its behalf was no doubt imprudent, that does not answer the agency question. ‘Authorization to act and control of the action are the two essential elements of agency.'”

This unusual fact pattern provides an excellent illustration of why proof of agency requires proof of a right to control. Gonzales v. Walgreen Co., No. 24-50403 (June 16, 2025).

While the long-running friction between the Fifth Circuit and U.S. Supreme Court about standing did not produce cert grants on the topic this term (after last year’s 9-0 reversal on standing in theg mifepristone litigation), three recent Supreme Court reviews of Fifth Circuit opinions involve similar topics, with mixed results:

1. The Supreme Court held that the Fifth Circuit erred by hearing a challenge to a Nuclear Regulatory Commission decision about a waste facility, when the challenger – the State of Texas – had not been a party to the agency proceeding. NRC v. Texas, No. 23-1300 (U.S. June 18, 2025).
2. In EPA v. Calumet, the Supreme Court held that the Fifth Circuit erred because challenges to the EPA’s denials of small-refinery exemption petitions under the Clean Air Act belong only in the D.C. Circuit. While each such denial is “only locally or regionally applicable” because it applies to a specific refinery, they fall within the statute’s “nationwide scope or effect” exception when they are “based on a determination of nationwide scope or effect.” No. 23-1229 (U.S. June 18, 2025); cf. Oklahoma v. EPA, No. 23-1067 (U.S. June 18, 2025) (holding that challenges to state-specific emission plans  belonged in a regional circuit, not the D.C. Circuit, because they were “locally or regionally applicable action”).
3. And in FDA v. R.J. Reynolds, the Supreme Court affirmed the Fifth Circuit’s venue decision about a retailer’s challenge to the FDA’s denial of a permit about a “vaping” product. he FDA argued that only the manufacturer (the applicant) was “adversely affected” and thus eligible to seek judicial review, and that the case should be dismissed or transferred to a different circuit. The Fifth Circuit denied the FDA’s motion and the Supreme Court agreed, olding that retailers who would sell a new tobacco product but for the FDA’s denial are “adversely affected” and may seek judicial review under the TCA. No. 23-1187 (June 20, 2025).

Within the last month, area courts have reached the following holdings:

• in Ethridge v. Samsung, a Fifth Circuit panel majority found that a manufacturer of batteries was subject to jurisdiction in Texas (over a dissent that shares common ground with the supreme court opinion cited below); No. 23-40094 (5th Cir. May 14, 2025).
• in BRP-Rotax v. Shaik, the Texas Supreme Court found that a manufacturer of aircraft engines was not subject to jurisdiction in Texas, because it lacked “an intent or purpose to serve the Texas market.” No. 23-0756 (Tex. June 20, 2025); and
• in Western Trails Charters and Tours, LLC v. Provance, the Dallas Court of Appeals held that an out-of-state bus company purposely availed itself of Texas by entering an “Interline Agreement” with Greyhound, but the “operative facts” of the claims did not arise from those contacts. No. 05-24-01089-CV (Tex. App.–Dallas May 29, 2025) (mem. op.).

All of these opinions are thoughtful and carefully reasoned. But Justice Busby’s concurrence in the Rotax case makes a powerful, big-picture point about this area of law – especially in “stream of commerce” cases, the International Shoe framework is complex, confusing, and remains substantially unsettled after decades of efforts to clarify it. He recommends an “originalist” approach, which may or may not be an improvement in terms of the results reached, but has much to commend it as a long-needed source of certainty in this significant area of commercial law.

Accurately applying the present state of the law, a Fifth Circuit panel in Roake v. Brumley affirmed a preliminary injunction against a Louisiana law requiring display of the Ten Commandments in public-school classrooms. It remains to be seen whether the Supreme Court will change the state of the controlling law. No. 24-30706 (June 20, 2025).

Wheatfall v. HEB reminds, as to actions to confirm arbitration awards, that: “After [the 2022 Supreme Court opinion in Badgerow], Courts may not “look through” a Section 9 and 10 [Federal Arbitration Act] action to establish federal question jurisdiction based on the underlying dispute. Because Wheatfall’s complaint does not raise a federal question on its face, the district court lacked subject matter jurisdiction.”

The opinion drops an intriguing footnote: “Because Wheatfall filed a new action in state court rather than reinstating the original action in federal court, we decline to address the “jurisdictional anchor” theory of continuing jurisdiction,” citing authority from the Fourth and Seventh Circuits – a theory that the court in which an action is filed and arbitration is then ordered continues to have jurisdiction through confirmation. No. 24-20257 (June 18, 2025).

“We … join the other circuits in holding that consumer reporting agencies are not
required to investigate the legal validity of disputed debts under the FCRA.” Reyes v. Equifax, No. 24-40415 (June 13, 2025).

In the Dallas-area state court of appeals, an unfortunate event involving citation to “hallucinated” case authority ended with this sanctions order. Three lessons can be learned:

1. Avoid using Gen AI to do serious case research. There’s nothing wrong with asking it research questions to get ideas, and that can be quite helpful as part of an overall use of Gen AI to help write — so long as you remember that every citation it returns has to be checked for accuracy. Gen AI programs can look like databases, and they can act like databases, but Gen AI programs are not databases.
2. If it’s too good to be true, it is. The problem in this case arose from a hallucinated Texas Supreme Court case from the late 19th Century that involved materially similar facts. If that was a Westlaw search result, it would require double-checking because it’s just so unlikely. The best “tell” that Gen AI is hallucinating is that it’s giving you exactly what you want to hear.
3. Don’t lie behind the log. I don’t know all the facts of this case, but the order says that the appellant’s counsel did not take prompt action when the problem with the hallucinated citations was first brought to light. If something has been cited in error, get out in front of the error before your opponent and the court has to spend needless time and energy helping rectify it.

Today I did my yearly “Fifth and Fifth” update, on cases of interest to commercial litigators from the Fifth Circuit and Fifth District. This is a printout of my PowerPoint. In particulary, it was interesting to see how those two court are dealing with the Supreme Court’s recalibration of personal jurisdiction in the 2021 Ford Motor case.

In Morrow v. Jones, the Fifth Circuit addressed whether an appellate court may consider a forfeited issue—specifically, the failure to provide class-wide notice of a motion for attorney fees as required by Fed. R. Civ. P. 23(h). The panel emphasized that it may address a forfeited issue if it “involves a pure question of law, and our refusal to address it would result in a miscarriage of justice.”

Here, the Court held that declining to address the lack of notice would “unjustly deprive class members of the opportunity to object to the fee motion—an opportunity to which they are entitled by statute.” Given the unique context of class actions and the court’s independent obligation to protect class interests, the panel exercised its discretion to reach the forfeited issue, holding that the district court’s failure to provide notice was an abuse of discretion. No. 23-40546, Jun. 10, 2025

A complicated bankruptcy proceeding led to a straightforward holding: “Courts cannot award value under Section 550(a) [the preferential-transfer statute] when the estate has recovered its transferred property in kind” elsewhere in the plan. Ad Hoc Group of Senior Secured Noteholders v Del. Trust Co. (In re Sanchez Energy Corp.), No. 23-20557 (May 30, 2025).

In Carter v. Local 556, the Fifth Circuit reversed (among other matters) a contempt order that required a party’s counsel to attend “religious liberty training,” reasoning:

Courts are tasked with resolving limited questions and administering justice to the parties before them. United States v. Texas, 599 U.S. 670, 693–94 (2023) (Gorsuch, J., concurring) (“This tracks the founding-era understanding that courts render a judgment or decree upon the rights of the litigants . . . [and] ensures that federal courts respect the limits of their Article III authority to decide cases and controversies ….” (citations omitted) (cleaned up)). But when a court’s contempt sanction in a civil matter is both overbroad in scope and undoubtedly punitive in nature, the judiciary risks appearing contemptuous like the contemnor. In this civil case, the sanction plainly exceeded remedial bounds and sought to punish Southwest’s attorneys through a directive that did little to coerce the airline’s compliance with the district court’s judgment.

No. 23-10536 (May 8, 2025).