Mike Lynn and I have an article in the latest Oklahoma Law Review about a fiendishly tricky issue with some “battles of the forms” under the Uniform Commercial Code. A few years back, Mike had a hard-fought trial about this issue in the context of the roof insulation for a big warehouse near D/FW Airport. I hope you enjoy it – and can use it someday in your next UCC case – https://digitalcommons.law.ou.edu/olr/vol74/iss2/3

In Fessler v. Porcelana Corona de Mexico, the Fifth Circuit flushed an attorneys-fee award in a class-action case about allegedly defective toilets, concluding that the district court had not plunged deeply enough into the factor of “degree of success obtained” — “[T]he [district] court stated simply that ‘the work done did not prove fruitless—it resulted in two settled classes receiving a host of monetary and non-monetary benefits they would not have received but for the Class Counsel’s diligent work.’ In other words, not receiving every bit of relief requested is no reason to reduce the lodestar. But this misconstrues Fifth Circuit precedent. The court was required to consider what was sought— compensatory, punitive, and treble damages for five tank models manufactured across nine years. Yet, the Class members only received a maximum of $4000 in damages for two tank models manufactured in one year.” No. 20-40357 (Jan. 10, 2022) (footnote omitted).

The Fifth Circuit found that the state-law question about liquor-sale permits presented by Gabriel Inv. Group v. TABC “checks every box” for certification, reasoning:

1. “The first factor—the closeness of the question and the existence of sufficient sources of state law—weighs in favor of certification. … Both parties have solid textual and structural support for their positions. Likewise, the Commission does not challenge GIG’s contention that the disputes in this case are questions of first impression in any court.”
2. “The second factor—the degree to which considerations of comity are relevant in light of the particular issue and case to be decided—similarly weighs in favor of certification. The Legislature enacted its general ban on public corporations owning or controlling package store permits in 1995, over 26 years ago. According to the parties, only two public corporations—GIG and Sarro Corp., who is not a party to this case—qualify for Grandfather Clause treatment. That may not seem like many. But when you factor in that GIG and Sarro could control up to 500 package stores between the two of them, it threatens to blow a Texas-sized hole in the careful balance that the Legislature created.” (footnotes omitted).
3. “The third factor—practical limitations on the certification process—also weighs in favor of certification. The questions that GIG asks are purely legal. And we are untroubled by any potential delay. ‘[B]y long tradition, the Texas Supreme Court graciously accepts and prioritizes certified questions from this circuit.'”

No. 21-50322 (Jan. 28, 2022).

A Texas law firm sued an Ohio firm, alleging the breach of an agreement about a substantial fee. The Fifth Circuit affirmed dismissal for lack of personal jurisdiction, crisply summarizing key Circuit precedent for commercial tort and contract claims. (To the right is 600Camp’s standard personal-jurisdiction graphic, the classic comic book hero Plastic Man).

• Tort: “Walden and Sangha largely resolve this issue. Danziger alleges in support of its fraud and unjust enrichment claims (1) that Morgan Verkamp failed to disclose its representation of Epp when responding to an unsolicited email from Danziger about the Epp case and (2) that Morgan Verkamp continued not to disclose its representation of Epp while the two firms worked together on other cases. Danziger alleges in support of its tortious interference with prospective contractual relations claim that Morgan Verkamp emailed Epp (who is not alleged to have been in Texas) to convince him not to formalize his relationship with Danziger. Thus, although Morgan Verkamp’s allegedly tortious conduct may have affected Danziger in Texas, none of this conduct occurred in Texas.”
• Contract: “Danziger alleges in support of its breach of contract claim that: (1) Epp reached out to Danziger about a potential qui tam matter; (2) Danziger arranged two conference calls between itself, Morgan Verkamp, and Epp; (3) Danziger and Morgan Verkamp agreed telephonically to split any fees they received from their work on the Epp matter; (4) the parties exchanged several emails with each other and Epp regarding their potential representation of Epp; and (5) Morgan Verkamp ultimately represented Epp in a Pennsylvania lawsuit but refused to split the fees that it received from the case.  Thus, unlike Electrosource, this case does not nvolve ‘wide reaching contacts and contemplated future consequences within the forum state.’ And unlike Central Freight, ‘[t]he plaintiff’s Texas location’ was not
  ‘strategically advantageous to the defendant …, suggesting that the defendant had purposefully availed itself of doing business in Texas.’ Rather, as in Trois, ‘[t]he only alleged Texas contacts related to contract formation or breach are [the defendant’s] conference calls negotiating the agreement while [the plaintiff] was in Texas.’ … And like Holt Oil, the defendant’s ‘communications to Texas rested on nothing but “he mere fortuity that [the plaintiff] happens to be a resident of the forum.”‘ As we held in Moncrief Oil, ‘mere fortuity that one company
  happens to be a Texas resident … is not enough to confer jurisdiction.'”

Danziger & De Llano, LLP v. Morgan Verkamp, LLC, No. 21-20186 (Jan. 27, 2022) (citations omitted, emphasis in original).

Echoing the Texas Supreme Court’s skepticism about Wikipedia as a source in D Magazine Partners, LP v. Rosenthal, 529 S.W.3d 429 (Tex. 2017), the Fifth Circuit held that the Wayback Machine was not a proper subject of judicial notice “because a private internet archive falls short of being a source whose accuracy cannot reasonably be questioned as required by [Fed. R. Evid.] 201.” The Court offered suggestions for how Wayback Machine information could be authenticated, and noted a page on the Wayback site that discusses the use of its material as court evidence. Weinhoffer v. Davie Shoring Inc., No. 20-30568 (Jan. 20, 2022).

The Marys, landowners in Bienville Parish, Louisiana, complained that a pipeline had exceeded the scope of a servitude over their land, and sought disgorgement of the pipeline’s profits. The Fifth Circuit reviewed “the concepts of accession and fruits under Louisiana property law.” Unfortunately for the Marys, while they had an ownership interest in the intrusive pipeline by “accession,” it was also the case that: “[T]he gas at issue here was not taken from [their] land. It was produced from the Pedro Well, located on the neighbor’s land.” Accordingly, the “gas is not a fruit; it is a product,” and disgorgement was not an available remedy. Mary v. QEP Energy Co., No. 21-30195 (Jan. 18, 2022).

By popular demand, the nationally respected jury consultant Jason Bloom returns to the “Coale Mind” podcast after his insightful interview last year about the restart of jury trials after the 2020 quarantines. In this new 2022 episode, he discusses his insights from the continued return of jury trials.

Jason describes how, across the country, prospective jurors are more eager to be selected and serve on juries than ever before, reflecting a national mood that wants to reassert control over government after many months of uncertainty and frustration. Relatedly, jury deliberations are emphasizing a theme of “accountability”–examining which party to a case has demonstrated responsibility for its actions and decisions.

Obviously important for trial lawyers, Jason’s insights are also critical to understanding America’s political dialogue as society continues to reawaken after the COVID pandemic. Whether acting as jurors, voters, or customers, decisionmakers bring very specific interests and desires to 2022 that must be understood and accommodated to make effective policy.

A high-profile case about a child’s gruesome accident produced considerable media coverage, but the insurer’s awareness of that coverage did not satisfy the insurance policy’s “claim” requirement: “The fact that [the insured] became aware of media reports about Braylon’s injuries and sent those reports to Evanston, which in turn opened an internal ‘Claim/Occurrence’ file and monitored further developments, does not substitute for the Jordans actually making a timely claim against M&O. Their failure to do so is fatal to their assertion of coverage.” Jordan v. Evanston Ins. Co., No. 20-60716 (Jan. 17, 2022).

An unexpected cameo by William Butler Yeats . . .

. . . set the tone for an issue of ancillary jurisdiction, and a holding that when a case is dismissed per a settlement, the district court may keep jurisdiction to enforce that settlement — and no more:

“When the parties settle their dispute and seek dismissal, the court may choose to treat the parties’ settlement as part of its dismissal order, either by retaining jurisdiction to enforce the settlement or by directly integrating the settlement into the dismissal order. If the court does that, breaching the settlement would violate the court’s order, and ancillary jurisdiction to enforce the agreement would therefore exist.’ [” Kokkonen v. Guardian Life, 511 U.S. 375, 381 (1994)].

…

But the power to enforce a settlement is just that. It’s not a blank check. It doesn’t authorize the district court to reach new issues or issues that only relate to the settlement. The court may decide ‘whether and under what terms’ to enforce the settlement, but it may go no further without an
independent basis for jurisdiction. Wise v. Wilkie, 955 F.3d 430, 436 (5th Cir. 2020) (cleaned up)).”

Vikas WSP, Ltd. v. Economy Mud Prods. Co., No. 20-20309 (Jan. 10, 2022).

Key aspects of an asbestos-exposure case presented genuine issues of material fact, rather than impermissible speculation, and made summary judgment inappropriate:

• Potential exposure to airborne material. “[T]he MDL court accepted that Williams worked, for some amount of time, in a building that had asbestos, and expert testimony indicates the asbestos was deteriorating and becoming airborne during his tenure. An inference taken in favor of the non-moving party would be that Williams, who for some amount of time had to breathe in the spaces where asbestos was deteriorating, was exposed to this airborne asbestos. The MDL court, though, found that there was ‘no evidence that [Williams] was ever exposed to respirable asbestos dust at any location in the facility'” (the Court also noted expert testimony on this point);
• Location at a key time. “[I]n a summary judgment order rendered that same day regarding another defendant, the MDL court relied on evidence that Williams saw individuals in moon suits to assume he was present during the asbestos remediation. Just the opposite seems to have been inferred here, as the MDL court in Boeing’s summary judgment order stated that there was ‘no evidence that [Williams] was working nearby (or in that building at all) when that remediation work was performed”;
• Excluding alternative possible locations at the key time. “[T]he MDL court also found that the evidence that Williams primarily worked in Building 350 was not ‘sufficiently specific’ to allow a jury to conclude he was exposed to asbestos during an abatement project because ‘[t]he evidence that Decedent primarily worked in Building 350 does not exclude the possibility that he was not working there during the asbestos abatement project.’ Finding to the contrary, the MDL court found, ‘would be impermissibly speculative.’ We conclude that ‘speculation’ would not be involved, only a potentially reasonable inference.”

Williams v. Boeing Co., No. 18-31158 (Jan. 18, 2022).

“Most of Sea Wasp’s appeal challenges the district court’s summary judgment rulings finding it liable under both federal and state law. Despite those rulings, however, the court ultimately entered a judgment ‘that Plaintiff takes nothing and that Plaintiff’s case against Defendant is DISMISSED WITH PREJUDICE.’ In other words, Sea Wasp won the war even if it lost some battles along the way. Because the final judgment was a full victory for Sea Wasp, it is not an aggrieved party entitled to bring a cross appeal.” Domain Protection LLC v. Sea Wasp, LLC, No. 20-40411 (Jan. 13, 2022) (emphasis added).

The Texas Lawbook reports that Judge Gregg Costa will resign his position on the Fifth Circuit this summer. Please check the Lawbook‘s page for further information.

A footnote in June Medical Services v. Phillips detailed the Fifth Circuit’s procedures for documents sealed in the trial court.

“When presented with an appeal, we routinely unseal documents that were sealed in the district court when those documents are used on appeal and there is no legal basis for sealing. Indeed, we often do this sua sponte.  In [one recent case], he district court sealed parts of the record pursuant to a stipulated protective order ‘in an effort to accommodate the defendant’s concerns about its trade secrets becoming public.’ Notwithstanding the stipulated protective order in that case, this court denied the appellant’s unopposed motion to place record excerpts under seal and ordered that the record excerpts be unsealed. . Indeed, when parties in this court seek to file documents under seal on appeal, the clerk’s office sends them a standard letter that requires them to ‘explain in particularity the necessity for sealing in this court. Counsel do not satisfy this burden by simply stating that the originating court sealed the matter, as the circumstances that justified sealing in the originating court may have changed or may not apply in an appellate proceeding.””

No. 21-30001-CV (Jan. 7, 2022) (citations omitted).

In Newman v. Cypress Env. Mgmnt.:

• Newman, a pipeline inspector, had an Employment Agreement with Cypress, a business that supplied pipeline inspectors for client projects, and that agreement had an arbitration clause;
• A Cypress affiliate entered a contract to supply services to Plains, a pipeline company
• Newman brought an FLSA action against Plains for unpaid overtime, and Plains sought to compel arbitration, citing the provision of the Newman-Cypress contract.

The Fifth Circuit held that Plains was not a third-party beneficiary of that contract and could not enforce it, noting: “First, Newman’s incorporated-by-reference Pay Letter [between the Cypress affiliate and Plains] did not clearly and fully spell out that Plains could take legal action if either Newman or Cypress breached its terms. To the extent that it named Plains at all, the Pay Letter merely list ‘Plains-Pipeline’ as the ‘Client.’ … [and] Second, the Employment Agreement itself did not clearly and fully spell out that Plains could take legal action if Newman decided to breach its other terms.” No. 21-5023 (Jan. 7, 2022) (emphasis in original).

Terry Black’s Barbecue provides outstanding Texas barbecue from its location in Dallas’s Deep Ellum neighborhood; it also experienced business interruptions from complying with various stay-at-home orders issued during the COVID-19 pandemic in 2020. The Fifth Circuit affirmed the district court’s conclusion that Terry Black’s did not have business-interruption coverage because it did not suffer a direct physical loss of property at its restaurants. The Court reasoned:

…  A “physical loss of property” cannot mean something as broad as the “loss of use of property for its intended purpose.” None of those words fall within the plain meaning of physical, loss, or property. And that phrase has an entirely different meaning from the language in the BI/EE provision. “Physical loss of property” is not synonymous with “loss of use of property for its intended purpose.”
We conclude the Texas Supreme Court would interpret a direct physical loss of property to require a tangible alteration or deprivation of property. Because the civil authority orders prohibiting dine-in services at restaurants did not tangibly alter TBB’s restaurants, and TBB having failed to allege any other tangible alteration or deprivation of its property, the policy does not provide coverage for TBB’s claimed losses.

Terry Black’s Barbecue BBQ, LLC v. State Automobile Mut. Ins. Co., No. 21-50078 (Jan. 5, 2022).

The en banc case of Cochran v. SEC, No. 19-10396 (Dec. 13, 2021), presented a difficult statutory-interpretation case, overlaid on fundamental issues about the limits of the administrative state. The majority held that the 1934 Securities Exchange Act did not divest district courts of jurisdiction over “structural constitutional claims” about SEC enforcement actions: “Cochran’s removal power claim is wholly collateral to the Exchange Act’s statutory-review scheme, is outside the SEC’s expertise, and might never receive judicial review if district court jurisdiction were precluded.” An informative concurrence examined the continuing influence of Woodrow Wilson and James Landis (the SEC’s second director) on modern thinking about the power and pervasiveness of federal administrative agencies.

The Texas Lawbook recently published a good feature by Androvett Legal Media & Marketing about the top Texas legal stories of 2021 (in which I discuss the hard-fought litigation about SB8, the new Texas abortion law). It’s worth a look while preparing for law practice in this New Year.

The defendant in United States v. Meals sought to suppress evidence obtained when Facebook monitored his inappropriate online communication.  His conviction was affirmed: “Under the private search doctrine, when a private actor finds evidence of criminal conduct after searching someone else’s person, house, papers, and effects without a warrant, the government can use the evidence, privacy expectations notwithstanding.” And while a federal statute “mandates reporting child exploitation on internet platforms to the [National Center for Missing and Exploited Children], … it neither compels nor coercively encourages internet companies to search actively for such evidence” and thus did not bring Facebook within a “government agent” exception to the private-search doctrine. No. 20-40752 (Dec. 30, 2021).

Walmart sued the U.S. government, seeking declaratory judgments on several issues about the enforcement of laws related to opioids. In the meantime, the the US brought an enforcement action against Walmart in Delaware. The panel in Walmart, Inc. v. U.S. Dep’t of Justice concluded that the Delaware action made this declaratory-judgment case unnecessary; two judges also concluded that Wal-Mart had not identified a specific type of action or decision as to which the United States had waived sovereign immunity in the Administrative Procedure Act. No. 21-40157 (Dec. 22, 2021).

In DeOtte v. State of Nevada, the district court’s injunction about the contraceptive mandate in the Affordable Care Act became moot after a 2020 Supreme Court opinion. The State of Nevada, a latecomer to the case, sought vacatur of the injunction.

The Fifth Circuit summarized the applicable principles. Its “authority to vacate comes from [28 U.S.C. § 2106] that provides that an appellate court ‘may affirm, modify, vacate, set aside or reverse any judgment, decree, or order of a court lawfully brought before it for review.'” (emphasis omitted). Under that statute:

“[V]acatur is not automatic; it is ‘equitable relief’ and must ‘take account of the public interest.’  Precedents ‘are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur.’  A court must assess ‘the equities of the individual case’ to determine whether vacatur is proper. This consideration centers on (1) ‘whether the party seeking relief from the judgment below caused the mootness by voluntary action’; and (2) whether public interests support vacatur.”

(citations omitted). After a thorough review of Nevada’s unusual procedural position in the case, the Court found that Nevada had standing (in the language of the statute, had “lawfully brought” the appeal), and granted Nevada the requested relief of vacatur. No. 19-10754 (Dec. 17, 2021).

Reminder: “Standing to appeal a bankruptcy court order is, of necessity, quite limited. … [t]his test is an even more exacting standard than traditional constitutional standing.” Dean v. Seidel, No. 21-10468 (Dec. 7, 2021) (citations omitted).

Therefore: “Here, the order on appeal — approval of a litigation funding agreement — does not affect whether Dean’s debts will be discharged. Neither does it affect Reticulum’s related pending case in which it ‘objected to Dean’s bankruptcy discharge and to discharge of its claims against Dean.’ Dean thus does not have bankruptcy standing because he cannot show how the order approving the litigation funding agreement would directly, adversely, and financially impact him.”

Under Wyoming law, an indemnity agreement related to an oil-field injury could not be enforced; under Texas law, it could be. Applying the Restatement’s choice-of-law framework, the Fifth Circuit concluded:

1. More significant relationship. “The section 188 contacts rack up points for Wyoming. Cannon started negotiations by contacting KLX’s Wyoming office, and the parties executed the agreements in Wyoming and West Virginia. These place-of-negotiation-and-contracting contacts favor Wyoming and overwhelmingly disfavor Texas. … The only debatable section 188 contact is the principal place of business. Cannon leans on this contact, arguing that it favors Texas because the agreement was drafted by a Texas-based company. But although KLX’s principal place of business is in Texas, its Texas presence is negated by Cannon’s Wyoming domicile.”
2. Materially greater interest. “Wyoming’s interest in promoting worker safety in its oilfields is at its zenith on these facts. The underlying state court proceeding—in which a Wyoming resident was injured in Wyoming by the alleged negligence of a Wyoming oil company—implicates Wyoming’s policy with precision. Enforcing the indemnity provision would discourage what Wyoming hopes to encourage Cannon’s taking steps to avoid injuries in its oilfield operations. On the other side of the scale, Texas’s interest in this dispute is more attenuated. Its interest in enforcing the contract of one of its businesses is lessened when the contract was not negotiated, drafted, or performed within its borders.”
3. Fundamental policy. “Wyoming’s ban on oilfield indemnification is codified and voids any such agreement as being ‘against public policy.’ … Because Wyoming “has taken the unusual step of stating [the policy] explicitly” in a statute, and “will refuse to enforce an agreement” contrary to the policy even when other states connected to the agreement would enforce it, the anti-indemnity policy is a fundamental one.” (citations omitted).

Cannon Oil & Gas Servcs., Inc. v. KLX Energy Services, L.L.C, No. 21-20115 (Dec. 10, 2021).

Yes, it’s kind of a pain, and yes, it comes around every year. But you have a voice in the oft-cited “Super Lawyers” awards, and you can make it heard on the Super Lawyers’ website: Nominations are due by December 16, 2021

The district court certified a class based on a Texas statute about late fees, which says: “A landlord may not charge a tenant a late fee for failing to pay rent unless … the fee is a reasonable estimate of uncertain damages to the landlord that are incapable of precise calculation and result from late payment of rent.” 

The panel majority in Cleven v. Mid-Am. Apartments disagreed with the district court’s reading of the statute, and thus remanded: “[T]here is no requirement that a landlord engage in a process to arrive at its late fee so long as the fee is a reasonable estimate at the time of contracting of damages that are incapable of precise calculation. Therefore, the district court erred in interpreting section 92.019 and the case is remanded to the district court to determine if class certification is appropriate.”

A dissent saw matters differently: “That the plaintiffs all raised a common contention about how § 92.019 should be interpreted that is central to their claims for relief is sufficient reason for us to affirm class certification, and we do not have jurisdiction to review the district court’s partial summary judgment ruling on only the issue of liability at this stage in the litigation.” No. 18-50846 (Dec. 9, 2021).

Yes, it’s kind of a pain, and yes, it comes around every year. But you have a voice in the oft-cited “Super Lawyers” awards, and you can make it heard on the Super Lawyers’ website: Nominations are due by December 16, 2021.

The Fifth Circuit affirmed a default judgment against the Elephant Group when it “agree[d] with the district court that neither claimed defense suffices. The presentation of meritorious defenses requires ‘definite factual allegations, as opposed to mere legal conclusions.’ Legal conclusions were all that were presented.” Tango Marine v. Elephant Group, No. 21-10068 (Dec. 5, 2021) (citations omitted) (On rehearing in 2022, the Court withdrew this opinion.)

“Most of the time, to be sure, Rule 60(b) orders denying relief are final and appealable because ‘Rule 60(b) motions ordinarily are made only after the district court has disposed completely of the subject litigation.’  But this is not so when unresolved matters remain pending in the district court. Where there is no ‘effective termination[] of district-court proceedings, a denial of a Rule 60(b) motion is not final for purposes of 28 U.S.C. § 1291.” Gross v. Keen Group, No. 20-20594 (Dec. 2, 2021) (citations omitted).

“Louisiana residents can access Eastrock’s website, no less than residents of other states. But as our cases suggest, and as we now expressly hold, a defendant does not have sufficient minimum contacts with a forum state just because its website is accessible there. The defendant must also target the forum state by purposefully availing itself of the opportunity to do business in that state. And here, there is no evidence that Eastrock targets Louisiana: Eastrock has not sold a single accused product to a Louisiana resident, and it solicits no business there through targeted advertising. That ends this case.” Admar Int’l Inc. v. Eastrock LLC, No. 21-30098-CV (Nov. 19, 2021). (For reference, I think this is the current version of the website in question; the litigation involved the defendant’s alleged misuse of product images.)

A Louisiana-based defendant removed a class action brought by an individual citizen of Louisiana, contending that a co-defendant’s “non-diverse Louisiana citizenship could be disregarded because the [statutory] claims against [the co-defendant] were ‘improperly and egregiously misjoined’ with the assignment-based bad faith claim against the removing defendant.”

This concept — called “fraudulent misjoinder” and reliant upon state-law procedural rules — is distinct from the traditional concept of “improper joinder” (a/k/a “fraudulent joinder”), which focuses on the viability of the claim against the nondiverse defendant.

The panel majority in Williams v. Homeland Ins. Co., written by Judge Haynes and joined by Judge Ho, soundly rejected removal based on fraudulent misjoinder, emphasizing the doctrine’s practical consequences: “Adopting the fraudulent misjoinder doctrine will dramatically expand federal jurisdiction, putting the federal district courts in this circuit in the position of resolving procedural matters that are more appropriately resolved in state court—all without a clear statutory hook.” No. 20-30196 (Nov. 30, 2021).

A concurrence by Judge Ho emphasized the importance of the statutory text in rejecting the doctrine; a dissent by Judge Jones focused on “the unusual circumstances here, which bespeak obvious joinder machinations undertaken to avoid federal court.” (both opinions are in the above link). The trio of opinions suggests that this case may receive serious consideration for en banc review.

In a coverage dispute between two excess carriers, the Fifth Circuit observed: “At bottom, the allocation issue depends upon the sufficiency of Great American’s summary judgment evidence. To support its allocation theory and establish that the covered claims were worth at least $7 million, Great American submitted the affidavits of (1) Brent Anderson, Liberty Tire’s attorney in the Underlying Litigation, and (2) Carol Euwema, Great American’s lead adjuster for the relevant claims.” Great Am. Ins. Co. v. Employers Mut. Cas. Co. The trial court found those affidavits conclusive, but the Fifth Circuit disagreed; they provide good references for summary-judgment practice generally. No. 20-11113 (Nov. 17, 2021).

The question whether an insurance statute violated the Texas Constitution’s prohibition on “retroactive laws” presented a textbook case for certification in Fire Protection Service, Inc. v. Survitec Survival Prods, Inc.: “Beyond the closeness of the question and the dearth of on-point precedent, considerations of comity counsel in favor of certification.” No. 21-20145 (Nov. 22, 2021).

If you think that the modern administrative state relies heavily upon acronyms, you are not alone, as the Fifth Circuit illustrated in Leigh Ann H v. Reisel ISD, No. 20-50003-CV (Nov. 22, 2021):

In Great Am. Ins. Co. v. Employers Mut. Cas. Co., both the Great American and Employers’ umbrella policies were “excess,” in that they both provided coverage for liability “in excess” of a “retained limit.” That said . . .

• the Employers’ policy defined “retained limit” as “the available limits of all ‘underlying insurance,'” a term that was, in turn, defined by two descriptions of primary coverage; while
• the Great American policy defined “retained limit” to include “the applicable limits of any other insurance providing coverage to the ‘Insured’ during the Policy Period.” (emphasis added).

Thus, “[b]ased on the plain terms of these policies, the Great American Umbrella Policy was the true excess policy after all other policies.” No. 20-11113 (Nov. 17, 2021).

In a rough stretch for the administrative state, after the Fifth Circuit’s recent skeptical rejection of an FDA regulation of e-cigarettes, another panel stayed OSHA’s vaccine-mandate regulation. It based its decision on several administrative-law principles and summarized:

“[T]he Mandate’s strained prescriptions combine to make it the rare government pronouncement that is both overinclusive (applying to employers and employees in virtually all industries and workplaces in America, with little attempt to account for the obvious differences between the risks facing, say, a security guard on a lonely night shift, and a meatpacker working shoulder to shoulder in a cramped warehouse) and underinclusive (purporting to save employees with 99 or more coworkers from a “grave danger” in the workplace, while making no attempt to shield employees with 98 or fewer coworkers from the very same threat). The Mandate’s stated impetus—a purported “emergency” that the entire globe has now endured for nearly two years, and which OSHA itself spent nearly two months responding to—is unavailing as well. And its promulgation grossly exceeds OSHA’s statutory authority.”

No. 21-60845 (Nov. 12, 2021) (footnotes omitted, emphasis in original).

The dispute in Guzman v. Allstate Assurance Co. was whether the insured was a smoker when he applied for insurance; the Fifth Circuit concluded that “self-serving” affidavits by family members were sufficient to raise a fact issue and avoid summary judgment. The details offer an excellent, general example about this sort of affidavit:

“Mirna’s and Martha’s affidavits are competent summary judgment evidence. They are based on personal knowledge, set out facts that are admissible in evidence, are given by competent witnesses, and are particularized rather than vague or conclusory. Mirna and Martha testify about their personal experiences with Guzman. In her deposition and affidavit, Mirna claimed that Guzman was not a smoker; that she was often with Guzman and would know if he smoked; that she is “able to tell whether [people] use tobacco because they have a peculiar and specific smoke smell”; and that neither Guzman nor his belongings, including his clothes and truck, ever smelled like smoke. Martha made substantially similar claims in her own affidavit. Though self-serving, this testimony is sufficient to—and does— create a genuine dispute of material fact.”

No. 21-10023 (Nov. 10, 2021).

“Federal courts can enforce an arbitration agreement only if they could hear the underlying ‘controversy between the parties.’ 9 U.S.C. § 4. In Vaden v. Discover Bank, 556 U.S. 49 (2009), the court told us to define that ‘controversy’ by looking to the whole dispute, including any state-court pleadings.” ADT, LLC v. Richmond, No. 21-10023 (Nov. 10, 2021).

ADT presented the question whether that technique for definition also applies to the parties in the case–a material issue in that case, because federal diversity jurisdiction over the arbitration suit depended on how the court treated nondiverse parties in the underlying state-court lawsuit.

The Fifth Circuit concluded that Vaden did not apply,, based on the plain language of section 4: “Having agreed to arbitrate its claims against a diverse defendant, a plaintiff may not escape our power by joining to its state-court suit nondiverse persons whom it could not hale into arbitration. ‘Parties,’ in § 4, means the parties to the § 4 suit–not everyone against whom one party claims relief.” (emphasis added).

In Wages & White Lions Investments LLC v. FDA, the Fifth Circuit found many problems with the FDA’s denial of a company’s application to market flavored e-cigarettes. Among them, the Court identified two issues with the FDA’s review of the company’s marketing plan to avoid improper product use by young people; the Court’s reasoning is of broad general interest for Daubert practice as well as administrative law:

1. The FDA’s contention “that no marketing plan would be sufficient, so it stopped working”: “That’s like an Article III judge saying that she stopped reading briefs because she previously found them unhelpful.”
2. Reliance on expertise and experience. “An agency’s ‘experience and expertise’ presumably enable the agency to provide the required explanation, but they do not substitute for the explanation, any more than an expert witness’s credentials substitute for the substantive requirements applicable to the expert’s testimony under [Rule] 702.”

No. 21-60766 (Oct. 26, 2021).

In Gezu v. Charter Communications, “the record show[ed] a valid modification to [plaintiff’s] employment contract–i.e., notice and acceptance,” when:

• Notice. “On October 6, 2017, Charter sent an email notice to Gezu of its new Program aimed at ‘efficiently resolv[ing] covered employment-related legal disputes through binding arbitration.’  … The email stated that by participating, the recipient and Charter ‘both waive[d] the right to initiate or participate in court litigation … involving a covered claim’ and that recipients ‘would be automatically enrolled in the Program unless they chose to ‘opt out of participating … within … 30 days.’ This language, along with the referenced links to additional information about the Program provided in the email, was sufficient to notify Gezu unequivocally of the arbitration agreement.” (emphasis added); and
• Acceptance. “The October 6, 2017 email ‘conspicuously warned that employees were deemed to accept’ the Program unless they opted out within 30 days. In re Dillard Dep’t Stores, Inc., 198 S.W.3d 778, 780 (Tex. 2006). The email also provided recipients with directions on how to opt out. Nonetheless, Gezu did not opt out of the Program and continued working for Charter for over a year until he was terminated in May 2019.”

No. 21-10198 (Nov. 2, 2021).

A key issue facing OSHA’s new COVID regulation is whether a “grave danger” justified the agency acting so rapidly. In an unusual flash of appellate-court wit, the Fifth Circuit temporarily stayed the regulation, observing:

(Regrettably, Judge Graves was not on the panel.)

The Texas Supreme Court is using a new, standard layout for its opinions. Similar in some ways to what the Fifth Circuit has used for some time (most notably, the use of Old English for the court name), it is based on a Century font rather than the Equity font used by the Fifth Circuit.

“It should be obvious to any reasonable police officer that locking up a journalist for asking a question violates the First Amendment. Indeed, even Captain Lorenzo, the stubborn police chief in Die Hard 2, acknowledged: ‘Now personally, I’d like to lock every [expletive] reporter out of the airport. But then they’d just pull that “freedom of speech” [expletive] on us and the ACLU would be all over us.”  Die Hard 2 (1990).                                        Captain Lorenzo understood this. The officers in Laredo should have, too. Cf. Dickerson v. United States, 530 U.S. 428, 443 (2000) (‘Miranda has become embedded in routine police practice to the point where the warnings have become part of our national culture.’). The complaint here alleges an obvious violation of the First Amendment. The district court erred in holding otherwise.”

Villarreal v. City of Laredo, No. 20-40359 (Nov. 1, 2021).

In the course of resolving a long-running dispute about arbitration, the Fifth Circuit highlighted an important but infrequently litigated collateral-estoppel issue:

…  an unappealable ruling like a remand order is not entitled to preclusive effect. Beiser v. Weyler, 284 F.3d 665, 673 (5th Cir. 2002) (explaining that when “a litigant, as a matter of law, has no right to appellate review, then he has not had a full and fair opportunity to litigate and the issue is not precluded”); see Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387, 395 (5th Cir. 1998) (suggesting that “collateral estoppel may not be applied offensively to a jurisdictional decision—such as one granting a motion to remand—that is not capable of being subjected to appellate review”) …  The unappealability of remand orders is why, after a remand, a state court may revisit the federal court’s jurisdictional reasoning. … We recognized this principle in dismissing the appeal of the 2002 remand: “[T]he district court determined that the arbitration clause was invalid in the process of ascertaining whether it had subject matter jurisdiction,” which meant the ruling “has no preclusive effect in state court.” Dahiya, 371 F.3d at 211. The state court could freely reexamine the issue and “reach a different conclusion about [the] dispute’s arbitrability.” Beiser, 284 F.3d at 674.

Neptune Shipmanagement Services v. Dahiya, No. 20-30776 (Oct. 1, 2021) (emphasis added).

I recently wrote an article, “Federalism and Appellate Procedure: Five Texas-Federal Differences to Know,” in the Appellate Advocate, the quarterly publication by the Appellate Section of the State Bar of Texas. I hope you find it interesting and useful.

A frequent international traveler alleged that he had been placed on a TSA list that required additional, invasive searches of him when he flew. The Fifth Circuit affirmed the dismissal of the several Constitutional claims that he raised in a lawsuit against the leaders of the relevant federal agencies:

“In short, Ghedi has no right to hassle-free travel. In the Supreme Court’s view, international travel is a ‘freedom’ subject to ‘reasonable governmental regulation.’ And when it comes to reasonable governmental regulation, our sister circuits have held that Government-caused inconveniences during international travel do not deprive a traveler’s right to travel. In the Sixth Circuit’s view, ‘incidental or negligible’ delays of ‘ten minutes’ to ‘an entire day’ do not ‘implicate the right to travel.’ The Second and Tenth Circuits have held the same. Ghedi has therefore failed to plausibly allege that he has been deprived of his right to travel internationally by the extra security measures he has experienced.”

Ghedi v. Mayorkas, No. 20-10995 (Oct. 25, 2021) (footnotes omitted).

A New Orleans bar was sued after two patrons were stabbed by another, underaged patron who had been drinking at the bar. The insurance company denied coverage under a “weapons” exclusion (reaching “instruments of an offensive or defensive nature and include but are not limited to batons, bow or crossbow [?!], arrows, knives, mace, stun guns, tasers, or swords.” The Fifth Circuit affirmed judgment for the insurer:

“The district court described the claims of negligence in state court as Funky 544’s failure to require patron identifications and, more generally, its failure to prevent underage drinking. Even so, an element of each of [the plaintiffs’] claims is that Funky 544’s negligence caused them to be injured by a knife. … The term in this exclusion of ‘arising out of’ the use of weapons unambiguously provides that for coverage, an injury must be entirely separate from those relating to the use of weapons.”

Funky 544, LLC v. Houston Specialty Ins. Co., No. 21-30310 (Oct. 22, 2021) (unpublished).

While specifically addressing a novel Hague Convention child-custody issue, Harm v. Lake-Harm provides a useful general illustration of clear-error review: “There is evidence that SLH might have established a habitual residence in Ireland. As noted above, the family discussed and took steps toward setting up a ‘home base’ in Ireland to provide more opportunities to SLH. … It is equally plausible, however, as the trial court concluded, that SLH’s presence in Ireland was transitory. Ms. Lake-Harm’s career as a
professional musician sent mother and daughter on a dogged schedule of
travel outside Ireland. … We hold that the district court’s determinations are plausible in light of the record as a whole.” No. 20-30488 (Oct. 21, 2021).

In a challenge to the constitutionality of the “eviction moratorium,” the federal government argued that the case had become moot because the specific order at issue had expired. The Fifth Circuit expressed skepticism:

“Appellees respond that the appeal is not moot because the parties still dispute whether the government has constitutional power under the Commerce Clause to invade individual property rights by limiting landlords’ use of state court eviction remedies. The government maintains it has such authority. And in the government’s view, espoused at oral argument, that constitutional power is in no way limited to combatting the ongoing pandemic; the government asserts it can wield that staggering constitutional authority for any reason. Appellees further contend the proposed dismissal is a pretext to avoid appellate review of the constitutional question.”

(emphasis added). The court concluded, however, that it did not need to address mootness because it was granting the government’s motion to dismiss “on terms . . . fixed by the court” under FRAP 42. Those terms included the “express condition” that ‘”our dismissal does not abrogate the district court’s judgment or opinion, both of which remain in full force according to the express concession of the government during oral argument and in briefing.” Terkel v. Centers for Disease Control, No. 21-40137 (Oct. 19, 2021) (One panelist joined the result only.)

The complexity of the route map for the Erie Railway is well-illustrated by Butler v. Denka Performance Elastomer, LLC, No. 20-30365 (Oct. 15, 2021), in which one judge dissented from the panel’s decision to apply Louisiana tort law without certifying the issue to the Louisiana Supreme Court, and another dissented about the panel’s decision, based on Louisiana law, about whether prescription (limitations) had been established. No. 20-30365 (Oct. 15, 2021).

The Fifth Circuit denied the stay application in the appeal of the DOJ’s lawsuit against SB8, stating:While the referenced Fifth Circuit opinion primarily focused on Ex Parte Young (not relevant in a suit by the US, see West Virginia v. United States, 479 U.S. 305 (1987)), it made other observations about justiciability that this order suggests will now be central in the resolution of the merits. Professor Steve Vladeck further analyzes the relationship of the two cases in a recent Twitter thread.