BP’s continuing efforts to reduce the scope of its Deepwater Horizon settlement program again produced three separate opinions from a panel in In re Deepwater Horizon (several cause numbers, March 3, 2014).  Judge Southwick found that the plan’s requirement of a “certification on the document that the claimant was injured by the Deepwater Horizon disaster” resolved any lingering jurisdictional issues.  Judge Dennis concurred in a shorter opinion.  Judge Clement dissented, arguing: “This agreement, as implemented, is using the powers of the federal courts to enforce obligations unrelated to actual cases or controversies.”

In Wells Fargo Capital Finance v. Noble, Wells Fargo faced a class action in California.  It attempted to get an antisuit injunction from a Texas bankruptcy court, which was denied. No.13-10468 (Feb. 5, 2014, unpublished).  The Fifth Circuit found the appeal moot, because Wells’s briefing focused on a consolidated complaint in the class case that was amended after the appeal began.  While the Court noted: “An amended complaint supersedes the original complaint and renders it of no legal effect unless the amended complaint specifically refers to and adopts or incorporates by reference the earlier pleading,” it did not resolve the appeal on that basis, simply finding that the new complaint significantly changed the relevant issues.

After a recent panel remanded an appeal about the Deepwater Horizon settlement for further proceedings about its payment formula, another panel examined challenges to the settlement based on the guidelines of Rule 23, the Rules Enabling Act, and Article III.  In re Deepwater Horizon — Appeals of the Economic and Property Damage Class Action Settlement, No. 13-30095 (Jan. 10, 2014).  The panel found that, at the stage of certifying a settlement class, it did not violate those guidelines to have class members who may not be able to prove causation or damages on the merits: “It is sufficient for standing purposes that the plaintiffs seek recovery for an economic harm that they allege they have suffered, because we assume arguendo the merits of their claims at the Rule 23 stage.”  In particular, the panel found that outcome consistent with Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011), as it requires evidence “that a particular contention is common, but not that it is correct.”  The panel also found no abuse of discretion in the district court’s handling of subclasses or damage calculations.  A dissent contended: “Absent an actual causation requirement for all class members, Rule 23 is not being used to simply aggregate similar cases and controversies, but rather to impermissibly extend the judicial power of the United States into administering a private handout program.

The district court handling the Deepwater Horizon litigation rebuffed BP’s complaints that the agreed-upon claims processing formula was not working correctly.  Lake Eugenie Land & Development v. BP Exploration & Production, No. 13-30315 (Oct. 2, 2013).  A fractured opinion from the Fifth Circuit reversed in substantial part.  It required remand for further development of the record on how the agreement was intended to handle several accounting issues about claimed losses.  The Court then imposed a “tailored stay” on further payments to “allow[] the time necessary for deliberate reconsideration of these significant issues on remand.”  Judge Clement wrote the plurality, which Judge Southwick joined on the foregoing grounds.  Her opinion went on to note that, for standing reasons, a court lacked jurisdiction to administer a settlement “that included [class] members that had not sustained losses at all, or had sustained losses unrelated to the oil spill . . . .” Judge Dennis dissented as to the reasons for remand and disagreed with the standing analysis.

A case about Medicare reimbursement for a “mobile stander” wheelchair became moot on appeal when the state agency found it was not medically necessary.  The Fifth Circuit dismissed the case and also vacated the district court opinion and judgment, noting legal errors in the opinion and discrepancy between the opinion and judgment.  In light of all the circumstances, the Court concluded that vacatur was in “the public interest.”  Koenning v. Janek, 12-41187 (Aug. 20, 2013, unpublished).

Texas allows charitable bingo if the sponsoring organization does not use the proceeds for political advocacy; several charities challenged that restriction on First Amendment grounds.  Department of Texas, VFW v. Texas Lottery Commission, No. 11-50932 (August 21, 2013).  In a new opinion issued on panel rehearing, the Fifth Circuit rejected a standing challenge based on the interplay of the relevant law with other gambling laws (which the state argued made the lawsuit irrelevant), and then reversed an injunction against the law.  The Court saw the case as controlled by Rust v. Sullivan, 500 U.S. 173 (1991), noting: “The challenged provisions in this case do nothing to restrict speech outside the scope of the State’s bingo program. Charities are free to participate in the bingo program and engage in political advocacy; they simply must not use bingo proceeds to do so.”  For similar reasons, it distinguished Citizens United v. Federal Election Commission, 130 S.Ct. 876 (2010).  A dissent argued that Rust did not control and the law was invalid under the “unconstitutional conditions” doctrine.

“Equitable mootness” is a prudential doctrine that balances a litigant’s interest in appellate review against the need for finality of a bankruptcy plan.  It has three elements: (i) whether a stay has been obtained, (ii) whether the plan has been ‘substantially consummated,’ and (iii) whether the relief requested would affect either the rights of parties not before the court or the success of the plan.”  Official Committee of Unsecured Creditors v. Moeller, Nos. 12-50718, 50805 (July 24, 2013).  The Fifth Circuit declined to apply the doctrine in this case, finding that Chase had at best shown only “speculative” harm to other parties.  Dicta in the opinion expresses skepticism that the doctrine can apply to an adversary proceeding.

The issue in FDIC v. SLE, Inc. was whether a party could assert rights under a prior judgment in favor of the FDIC, where evidence established that it was the FDIC’s successor-in-interest and assignee, but the party did not substitute in as plaintiff in the case under Fed. R. Civ. P. 25.  No. 12-30539 (July 2, 2013, unpublished).  The Fifth Circuit affirmed the denial of Rule 60(b)(4) relief, noting that the plain language of Rule 25(c) and (a)(3) is permissive, not mandatory, and distinguishing two cases on the issue.

In Cutler v. Stephen F. Austin State University, the defendant sought interlocutory review of an order requiring it to appear for a deposition under Fed. R. Civ. P. 30(b)(6).  No. 12-41393.  The Fifth Circuit found the appeal moot because the depositions had already taken place.  The defendant argued that the appeal was not moot because the depositions may be used at an upcoming trial.  The Court responded: “This court does not have jurisdiction to issue advisory opinions regarding decisions of the district court that have not been made at a trial that has not been held.”

Plaintiffs, “waste haulers that operate throughout the City of San Antonio and its surrounding counties,” claimed that a fee imposed by San Antonio for a waste collection permit violated the Commerce Clause.  Cibolo Waste, Inc. v. City of San Antonio, No. 12-50153 (May 15, 2013).  Examining their standing, the Fifth Circuit found that they showed an injury-in-fact because the fee increased their cost of doing business.  The plaintiffs, could not, however, show that they fell within zone of interest protected by the dormant Commerce Clause, since “[t]heir business is purely intrastate,” and “the only parties that have standing to bring a dormant Commerce Clause challenge are those who both engage in interstate commerce and can show that the ordinance at issue has adversely affected their commerce.”

The Court released a revised opinion in National Rifle Association v. Bureau of Alcohol, Tobacco, Firearms & Explosives, a gun control case of broad general interest that has grown in social significance since its original release in October of 2012.  No. 11-10959 (revised April 29, 2013).  A thoughtful opinion rejects a Second Amendment challenge to restrictions on handgun purchases by 18-to-20 year-olds, noting: “considerable historical evidence of age- and safety-based restrictions on the ability to access arms . . . .”  The Court rejected challenges to the standing of the NRA as an organization to sue on behalf of members with personal interests in the dispute.  This case was found to control in a later dispute about a similar law, NRA v. McCraw, No. 12-10091 (revised May 22, 2013).

Servicios Azucareros v. John Deere arose from a suit by a Venezuelan company against a Louisiana-based affiliate of John Deere about the termination of a distributorship agreement in Venezuela.  No. 11-30776 (Dec. 13, 2012).  The district court dismissed, finding that the plaintiff failed to adequately brief an issue of “prudential standing” about the ability of foreign plaintiffs to sue U.S. citizens in federal court.  The Fifth Circuit found the standing issue “totally without merit,” noting that alienage jurisdiction originated to allow British creditors to sue Americans after the 1783 Treaty of Paris and avoid a “notoriously frosty” reception in state court that hurt international commerce.  The Court also disagreed with the conclusion that the briefing amounted to a waiver, reviewing case law about the handling of similar dispositive motions.

The bankruptcy trustee in Compton v. Anderson filed several avoidance actions, and the bankruptcy court dismissed for lack of standing because the reservation of those claims to the trustee in the debtors’ reorganization plan was not sufficiently “specific and unequivocal.”  No. 11-20478 at 4 (Nov. 14, 2012) (citing Dynasty Oil & Gas v. Citizens Bank, 540 F.3d 351, 355 (5th Cir. 2008)).  The Fifth Circuit reviewed several of its recent cases on this issue and reversed, concluding that “[i]n addition to stating the basis of recovery, the Exhibits referenced in the Reorganization Plan identified each defendant by name.”  Id. at 12. The case was remanded for further review, including the scope of a carve-out in the reservation for released claims.  Id. at 12.  This opinion is an important contribution on a basic issue in bankruptcy litigation.

A consumer group sued under the Clayton Act about the market for funeral caskets, and then settled all compensatory damages with one of the defendants.  Funeral Consumers Alliance v. Service Corp. Int’l, No. 10-20719 (Sept. 13, 2012).  The Fifth Circuit held that, even after that settlement, the group had standing to proceed against the remaining defendants for attorneys fees.  Id. at 4-14.  Noting, however, that “[t]he fact that death is inevitable is not sufficient to establish a real and immediate threat of future harm,” the Court found no standing for injunctive relief.  Id. at 15, 18.  The Court also affirmed the denial of class certification, finding that the scope of the putative nationwide class fit poorly with the evidence of localized market activity for funeral services and casket sales.  Id. at 27 (distinguishing United States v. Grinnell Corp., 384 U.S. 563 (1996)).

The plaintiff in Choice Inc. of Texas v. Greenstein challenged a Louisiana regulation about the licensing of abortion facilities.  No. 11-30296 (Aug. 17, 2012).  The majority found the suit was not ripe because the plaintiff did not show “that hardship will result if court consideration is withheld at this time.”  Id. at 7.  A forceful dissent faulted the majority for a “procrustean ripeness analysis.”  Id. at 32.   While much of the back-and-forth involves matters unique to abortion litigation, the case presents a thorough review of general  principles about ripeness in the Fifth Circuit at present.

Environmental groups challenged several plans approved by the Department of the Interior for oil exploration and development in the Gulf of Mexico after the Deepwater Horizon accident.  In a group of consolidated cases, the Fifth Circuit dismissed the challenges on procedural grounds.  See, e.g., Gulf Restoration Network v. Salazar, No. 10-60411 (May 30, 2012).   Among other holdings, the Court found that the groups had standing as organizations to sue, op. at 8-10, and that case law about the effect of an agency’s allegedly “illegal [and] clandestine” internal policies did not excuse the groups’ failure to exhaust administrative remedies here.  Op. at 29.

The plaintiff in Bowlby v. City of Aberdeen alleged a denial of procedural due process and equal protection rights as to the handling of her license to run a snow cone stand in a particular location.  No. 11-60279 (May 14, 2012).   The Court applied Twombly and Iqbal to find that she had not stated an equal protection claim, reminding that a pleading should have “facial plausibility” from its “pleaded factual content” and not offer only “labels and conclusions or a “formulaic recitation of the elements of a cause of action.”  Op. at 17 (noting “no allegations regarding the types of businesses . . . the size . . . where they are located, or what laws and regulations they have violated”).   The Court found an actionable due process issue and rejected a challenge to its ripeness, both under a specialized test for constitutional claims and under “general ripeness principles.”  Id. at 14-15 (requiring a claim “fit for judicial decision” as to which delay “would cause . . . further hardship”).

A bankruptcy trustee sued to avoid an alleged fraudulent transfer, in the form of payments under a guarantee, in MC Asset Recovery v. Commerzbank AG, No. 11-10070 (March 20, 2012).  The Court found that the trustee had standing, even though the debtor’s creditors had been paid in full, because recovery would benefit the estate.  Op. at 7.  Then, applying the Restatement’s “significant relationship” framework and focusing on policy issues, the Court applied New York fraudulent conveyance law (which reached guarantees) as opposed to Georgia law (which did not).  Op. at 12-13.  The lower court’s dismissal of the case was vacated and reversed.

In the case of In re Dell, Inc., the Court reviewed the settlement of a shareholder class action against the arguments of two objectors.  No. 10-50688 (Feb. 7, 2012).  The Court first held that a class member does not have to file a proof of claim to have standing to object.  Op. at 5.  The Court then reviewed and rejected several objections to the fairnes of the settlement, reminding that a full evidentiary hearing is not necessarily required at a fairness hearing.  Op. at 10.  Finally, the Court found no abuse of discretion in awarding an 18% fee to the attorneys ($7.2 million) instead of requiring a “lodestar” calculation, rejecting a strict reading of In re High Sulfur Content Gasoline Prods. Liab. Litig., 517 F.3d 220, 228 (5th Cir. 2008) (which stated: “This circuit requires district courts to use the ‘lodestar method’ to ‘assess attorneys’ fees in class action suits.”).

The plaintiff in Kocurek v. CUNA Mutual Insurance sued for fraud about the sale of an insurance policy in 2005 on her husband’s life.  (No. 10-51042, Jan. 24, 2012).  The defendant persuaded the district court to dismiss on the pleadings, arguing that she lacked standing because she was not a beneficiary of the 2005 policy, and that the policy had a “one policy only” clause that barred claims under an earlier policy.  The Court disagreed and reversed, characterizing the plaintiff’s claims as relating to the “practice of selling multiple policies to the same individual,” op. at 4-5, and finding the “one policy only” provision potentially ambiguous and thus not a proper basis for dismissal on the pleadings.  Op. at 5.   The Court affirmed dismissal of a DTPA claim, as the plaintiff was not the “consumer” who brought the policy.  Op. at 5-6.

The case of Time Warner Cable v. Hudson, (No. 01-5113) Jan. 13, 2012, presented a constitutional challenge to a Texas statute regulating cable TV providers, on the grounds that it unfairly discriminated against a group of them.   The Court discusses the plaintiffs’ standing at some length, holding that “[d]iscriminatory treatment at the hands of government” was a cognizable injury.  Op. at 5-8.

In Brown v. Offshore Specialty Fabricators, the Court affirmed dismissal of a putative RICO class action involving workers on offshore oil and gas projects.  The Court agreed that the alleged violations of the Outer Continental Shelf Lands Act (“OCSLA”) occurred outside the United States and were not actionable, op. at 4-12, a conclusion that turned on the specific language of OCSLA rather than the issue of RICO’s extraterritorial reach recently addressed by the Supreme Court in Morrison v. National Australian Bank.  The Court went on to address standing under OCSLA, finding fatal problems with the failure of the remaining plaintiffs to have satisfied statutory notice requirements, or to allege a plan to obtain future employment as required by the statute’s focus on future injuries.  Op. at 12, 14.  On the issue of standing when several plaintiffs are involved, the Court reminded: “Because no plaintiff gave the type of notice required by the OCSLA, we need not reach the plaintiffs’ argument that notice by one plaintiff can serve as notice for all.”  Op. at 12.

In Friends of St. Frances Xavier Cabrini Church v. FEMA, a nonprofit association challenged several acts of FEMA in dealing with a historic church property.  The Court analyzed the association’s standing, beginning by noting that as a jurisdictional matter, the issue can be examined for the first time on appeal.   Op. at 8.  To establish standing, “[t]he plaintiff must show that he has sustained or is immediately in danger of sustaining some direct injury as the result of the challenged official conduct and the injury or threat of injury must be both real and immediate . . . ”  Op. at 9.  The Court found that the association lacked a sufficient “geographical nexus” as to FEMA’s activities in the Ninth Ward and did not suffer “concrete injury” from alleged deficiencies in FEMA’s review processes.  Op. at 12.  The case was remanded with instructions to dismiss for lack of standing.