The Fifth Circuit concluded that a magistrate judge lacked jurisdiction to enter final judgment. The parties had conducted an entire wrongful-foreclosure case before a magistrate judge–but, early in the case, on the standard form, PNC expressly declined to allow trial by a magistrate judge. The Court concluded that consent could not be implied in the face of this express refusal. PNC Bank v. Ruiz, No. 20-50255 (March 2, 2021).

During Hurricane Harvey, “to prevent the Lake Conroe Dam from overflowing and failing, the San Jacinto River Authority released from the dam 79,141 cubic feet of water per second—nearly the flow rate of Niagara Falls.” The resulting surge of water destroyed 22 boat slips owned by a condo association, which sought to recover from its insurer. The Fifth Circuit affirmed judgment for the condo association, noting:

• legally, while the policy’s Flood Endorsement says: “We will not pay for loss or damage caused by ‘flood’, arising from . . . [a h]urricane or tropical storm,” it defined a “flood” as “a general and temporary condition of partial or
  complete inundation of 2 or more acres of normally dry land areas or of 2 or
  more distinct parcels of land (at least one of which is your property) with
  water”–and thus does not reach the boat slips, which were on water;
• factually, the association offered evidence that the water release “created a suction effect, like a sink drain that is unplugged, but on a much greater scale. Because of the rate at which water was being released, the water on the north side of [the] lake (where the Boat Slips are located) was below normal levels afterwards, despite the rainfall brought by Harvey.”

Playa Vista Conroe v. Ins. Co. of the West, No. 20-20307 (March 5, 2021).

A class of plaintiffs settled with several insurance companies, resolving various disputes about a large sinkhole caused by years of salt mining by Texas Brine Co. Texas Brine objected to the settlement and the Fifth Circuit found that it lacked standing to do so. While “[n]on-settling parties generally lack standing to object to a settlement agreement,” “[a] potential exception exists ‘if the settlement agreement purports tot strip non-settling defendants of rights to contribution or indemnity.” Here, Texas Brine did not not have any right to indemnification or contribution from these insurers for the remaining claims, so it lacked standing to object to the settlement. LeBlanc v. Texas Brine Co., LLC, No. 20-30208 (March 1, 2021).

WickFire won a tortious-interference judgment against TriMax. It claimed that TriMax “committed ‘click fraud’ by repeatedly clicking on WickFire’s advertisements without any intention of making purchases,” which has the effect of driving up WickFire’s costs without any corresponding increase in revenues. The Fifth Circuit reversed, noting:

• Tortious interference with contract. “WickFire produced evidence that a third party had a deleterious financial effect on its bottom line. But as was the case in El Paso Healthcare System, the record here fails to indicate that WickFire’s damages occurred because a co-contracting party breached its agreement with WickFire.”
• Tortious interference with prospective business relations. “WickFire’s damages theory for this claim was grounded in the assertions that TriMax’s tortious conduct delayed the development of TheCoupon.co website by six months and that WickFire lost $334,000 in profits because of that delay. When WickFire’s damages expert was asked how he calculated that dollar figure, the expert said that he had ‘quantified those damages by calculating the amount of profits that [WickFire] lost because of the six-month delay.’ He did not testify as to how he performed that calculation, nor did he point to any data concerning the business generated by TheCoupon.co. This evidence is threadbare and conclusory.”

Wickfire LLC v. Woodruff, No. 17-50340 (Feb. 26, 2021).

The plaintiff in Fontana v. H O V G L L C alleged that a debt collector violated the Fair Debt Collection Act by speaking with his sister. His claim failed because the FDCA requires a “communication,” and in this case: “[T]he conversation between HOVG’s representative and Fontana’s sister did not convey any information regarding a debt, either directly or indirectly. HOVG’s representative did not mention Fontana’s debt at all and did not directly provide any information about it. Instead, HOVG’s representative mentioned ‘an important personal business matter.’ That does not even suggest the existence of a debt, much less provide information about it. The closest HOVG’s representative came to giving information about a debt was providing the name of the debt collector.” No. 20-30471 (Feb. 26, 2021).

A Louisiana statute lets private citizens sue to enforce certain state environmental laws, provided that “any injunction the citizen might obtain must be entered in favor of the Commissioner of Louisiana’s Office of Conservation.” Straightforward substantively, this statute raises federal-jurisdiction questions “that would make for a tough Federal Courts exam.” Grace Ranch LLC v. BP Am. Prod. Co., No. 20-30224 (Feb. 26, 2021). Specifically:

• Is Louisiana a party to the suit? If so, diversity jurisdiction does not apply. The Fifth Circuit concluded that it was not a party, notwithstanding the potential for relief issued in its name, “because [Louisiana] has not authorized landowners to sue in its name” in the relevant statute. Similarly, Louisiana is not a real party in interest because the potential for an injunction in its favor is a “contingency,” which would make it “highly inefficient to remand the case to state court only at the end stage of the lawsuit when the injunction might issue.”
• Does the 5th Circuit have jurisdiction? The matter was removed to federal court and the district court decided to abstain. Reviewing the not-always-clear history of 28 USC § 1447(c) and the cases applying it, the Court concluded that “a discretionary remand such as one on abstention grounds does not involve a removal ‘defect’ within the meaning of section 1447(c).”
• Was Burford abstention appropriate? Grace Ranch involved the remediation of environmental damage caused by a now-outlawed way of storing waste from oil and gas production. The Court reversed the district court’s decision to abstain, agreeing that the case presented “the potential need to decide an unsettled question of state law, in an area of general importance to the State”–but also finding that the case does not involve “an integrated state regulatory scheme in which a federal court’s tapping on one block in the Jenga tower might cause the whole thing to crumble.”

Just over two years ago, in a single-judge order, Judge Costa rejected a request to seal the oral argument in a Deepwater Horizon claim dispute:  “As its right, Claimant ID 100246928 has used the federal courts in its attempt to obtain millions of dollars it believes BP owes because of the oil spill. But it should not able to benefit from this public resource while treating it like a private tribunal when there is no good reason to do so. On Monday, the public will be able to access the courtroom it pays for.” BP Expl. & Prod. v. Claimant ID 100246928, 920 F.3d 209 (5th Cir. 2019). An echo of that order appears in a footnote in a mandamus order from earlier this week–unanimous as to substantive relief but with Judge Costa dissenting on the issue of sealing certain filings: “Judge Costa would not grant the motions to seal the motions and briefing, except for sealing the appendices filed in support of the petition in No. 21-40117, based on his conclusion that the parties have not overcome the right of public access to court filings.” A 2016 National Law Journal article further illustrated his views on these issues.

In Texas practice, “a judgment is final either if ‘it actually disposes of every pending claim and party’ or ‘it clearly and unequivocally states that it finally disposes of all claims and all parties.'” Bella Palma LLC v. Young, 601 S.W.3d 799, 801 (Tex. 2021) (emphasis in original, quoting Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205 (Tex. 2001).

In federal practice, however, “[w]ithout a [Fed. R. Civ. P.] 54(b) order, ‘any order or other decision, however designated, that adjudicates fewer than all the claims or rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties.'” Guideone Ins. Co. v. First United Methodist Church of Hereford, No. 20-10528 (Feb. 22, 2021, unpublished) (emphasis in original, quoting Fed. R. Civ. P. 54).

The Texas Lawbook has a great story about a TRO battle in McAllen federal court between Laboratorios Pisa and PepsiCo that led to mandamus proceedings before the Fifth Circuit. This round of their battle ended in a short order late Sunday night that granted the petition; the response is available online but the Court granted PepsiCo’s request to seal its petition and related materials. No. 21-40116 (Feb. 21, 2021).

On rehearing, the Fifth Circuit returned to the case of Echeverry v. Jazz Casino to make an Erie guess about Louisiana negligent-hiring law–specifically, whether it requires actual knowledge or only constructive knowledge. Finding its own precedent, and no on-point Louisiana Supreme Court opinion, the Court then reviewed intermediate-court opinions and “general Louisiana principles of negligence and negligent hiring outside of the context of independent contractors” to conclude that constructive knowledge was sufficient. It declined to certify the issue, reminding that “the availability of certification is such an important resource to this court that we will not risk its continued availability by going to that well too often.” No. 20-30038 (Feb. 17, 2021) (on rehearing).

A trial court in the Northern District of Texas dismissed a case, under Fed. R. Civ. P. 41(b), because a lawyer based in the Eastern District did not retain local counsel as required by the local rules. That rule says that a defendant, or the court, “may move to dismiss the action or any claim against it” “[i]f the plaintiff fails to prosecute or to comply with these rules or a court order.” In Campbell v. Wilkinson, the Fifth Circuit concluded: “This case does not involve a violation of either ‘these rules’—that is, the Federal Rules of Civil Procedure—or ‘a court order.’ It involves the violation of a local rule. But Rule 41(b) does not mention local rules. This absence of any express reference to ‘local rules’ in Rule 41(b) thus raises the question whether it is ever appropriate to invoke Rule 41(b) based on nothing more than the violation of a local rule.” The Court concluded that it was not, and reversed because the record did not establish a failure to prosecute. No. 20-1102 (Feb. 19, 2021).

Joint and several (or “solidary”) liability does not mean shared jurisdictional contacts: “Libersat argues that, because they are solidary obligors, each defendant’s respective contacts with Louisiana should be imputed to every other defendant. Libersat asks, ‘If two corporations are obligated for the same performance and can be judicially sanctioned for conduct related to said obligation irrespective of the presence of the other, are they not alter egos?’ No, they are not. Sharing liability is not the same as sharing an identity. As our colleagues in the Ninth Circuit explained, ‘Liability and jurisdiction are independent. . . . Regardless of their joint liability, jurisdiction over each defendant must be established individually.’ Lumping defendants together for jurisdictional purposes merely because they are solidary obligors ‘is plainly unconstitutional.'” Libersat v. Sundance Energy, No. 20-30121 (Oct. 26, 2020).

Vesting both enhances the image of a distinguished law professor. and creates an exception to the ordinary rule in Mississippi that a right conveyed by a statute comes to an end if the statute is repealed or modified. To qualify as “vested,” a right must satisfy two requirements. First, there must ‘be no condition precedent to the interest’s becoming a present estate’ and, second, it must be ‘theoretically possible to identify who would get the right to possession if the interest should become a present estate at any time.’ Put another way, it must be ‘not contingent’ upon a future event taking place.” As to the claimed right in Harper v. Southern Pine Elec Coop., “the legislature left it up to the board to determine when its revenues were no longer ‘needed’ for specified purposes. Only once the board makes that determination does the statute require it to return those revenues to the members. The right that plaintiffs assert, then, is contingent upon a determination of the board. And a right that is contingent is, definitionally, not vested.” No. 20-60451  (Feb. 8, 2021) (citations omitted).

The “Official Stanford Investors Committee” (“OSIC”), a creation of the receivership arising from the Allen Stanford Ponzi scheme, sought to intervene in ongoing tort litigation about the scheme. The Fifth Circuit affirmed the denial of OSIC’s request.

Fed. R. Civ. P. 24(a)(2) sets four requirements for an application to intervene. The first requirement, timeliness, is also defined by reference to four factors. (1) the length of time the movant waited to file, (2) the prejudice to the existing parties from any delay, (3) the prejudice to the movant if intervention is denied, and (4) any unusual circumstances.  Here, noting no unusual circumstances, the Court reasoned:

• Length of time. “Using the denial of class certification as the relevant starting point, Appellants waited 18 months before moving to intervene. … In many of our cases where we have found intervention motions to be timely, the delay was much shorter.”
• Prejudice to parties. “The existing parties would experience prejudice in at least two ways if Appellants were granted leave to intervene after a delay of 18 months. First, the existing parties would face a second round of fact discovery, significantly increasing litigation costs. …Second, Appellants’ tardiness will delay final distribution of any recovery.”
• Prejudice to intervenor. After reviewing the complex standing issues surrounding the Stanford claims: “The denial of intervention will not exclude Appellants from recovery even if it were to prejudice them in some way.”

Rotstain v. OSIC, No. 19-11131 (Feb. 3, 2021).

DM Arbor Court v. City of Houston explains that a case may become ripe during the course of the appeal process: “Although some of the ripeness-on-appeal caselaw is couched in the language of discretion,  our best reading of the decisions—especially those from the Supreme Court—is that ‘[i]ntervening events that occur after decision in lower courts should be included’ when an appellate court assesses ripeness. Supporting this view is the City’s inability to cite any case in which an appellate court declined to find a dispute ripe when postjudgment events had made it so. And we have an obligation to exercise the jurisdiction Article III and Congress grant us when any impediments, such as prudential concerns, have been eliminated. Cf.Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 813, 817 (1976) (recognizing that abstention ‘is an extraordinary and narrow exception’ to the ‘virtually unflagging obligation of the federal courts to exercise the jurisdiction given them’).” No. 20-20194 (Feb. 12, 2021) (other citations omitted).

Mississippi Silicon (“MSH”), a manufacturer, was tricked into paying approximately $1 million to a cybercriminal, believing that it was in fact paying one of its regular vendors.  MSH sought reimbursement under the “Computer Transfer Fraud” provision of an insurance policy, and the Fifth Circuit affirmed the district court’s conclusion that there was no coverage.

The provision said: “The insurer will pay for loss of . . . Covered Property resulting directly from Computer Transfer Fraud that causes the transfer, payment, or delivery of Covered Property from the Premises or Transfer Account to a person, place, or account beyond the Insured Entity’s control, without the Insured Entity’s knowledge or consent.”

But here: “Coverage under the Computer Transfer Fraud provision is available only when a computer-based fraud scheme causes a transfer of funds without the Insured’s knowledge or consent. Here, three MSH employees affirmatively authorized the transfer; it therefore cannot be said that the fraud caused a transfer without the
company’s knowledge. … [T]he agreement plainly limits coverage to instances in which the transfer is made without knowledge or consent.” 

Mississippi Silicon Holdings v. Axis Ins. Co., No. 20-60215 (Feb. 4, 2021) (all emphasis in original).

Section 9.343 of the Texas UCC contains a nonuniform provision, “which grants a first
priority purchase money security interest in oil and gas produced in Texas as well as proceeds in the hands of any ‘first purchaser.’ A ‘first purchaser,’ is in pertinent part, ‘the first person that purchases oil or gas production from an operator or interest owner after the production is severed.’  The statute’s purpose is to ‘provide[] a security interest in favor of interest owners, as secured parties, to secure the obligations of the first purchaser of . . . production, as debtor, to pay the purchase price.’ It effectuates a ‘security interest’ that is ‘perfected automatically without the filing of a financing statement.'” (citations omitted). But Delaware lien-priority law does not recognize nonuniform UCC provisions, and in Deutsche Bank Trust Co. Americas v. U.S. Energy Devel. Corp., the Fifth Circuit affirmed the bankruptcy court’s conclusion that Delaware law applied to the case before it. The Court observed: “The bankruptcy court adroitly untangled a thorny conflicts of law issue, the result of which, unfortunately, undermines the efficacy of a non-standard UCC provision intended to protect Texas oil and gas producers. . As a result, producers must beware ‘the amazing disappearing security interest’ and continue to file financing statements. The Texas legislature should take note.” No. 19-50646 (Feb. 3, 2021) (citations and footnote omitted).

An unusual Fed. R. Civ. P. 60(b)(5) proceeding did not create appellate jurisdiction: “This case does not yet involve a final determination of the status of the interpleaded funds. Instead, it involves Rule 60(b)(5) relief from a prior order to disburse funds. The district court was not disbursing funds to the other party, but merely ordering that they be returned to the court’s registry pending the outcome of the state court action on remand. As the district court said, there has been no decision on who is entitled to the money. The final judgment has been set aside. Thus, this court lacks jurisdiction to hear this appeal.” Reed Migraine Centers of Texas v. Chapman, No. 20-10156 (Jan. 28, 2021).

At issue in Big Binder Express LLC v. Liberty Mutual Ins. Co. was the meaning of the term “you.” The Fifth Circuit concluded that the term “you” in the key endorsement about a large deductible, when given its “ordinary and generally accepted meaning,” referred only the named insured and not additional insureds. The Court also rejected the insured’s argument that “damages” meant only a court award of damages. No. 20-60188 (Jan. 27, 2021).

Belliveau v. Barco, Inc., discussed yesterday as to its holding about veil-piercing, also found that the plaintiff had not established a fiduciary relationship with the defendants under Texas law. The Court examined:

• The general principle that “one party’s subjective belief” is insufficient to establish an attorney-client relationship;
• The inadequacy of “vague and conclusory” statements about the parties’ dealings to satisfy that standard (especially if later deposition testimony undermines those statements); and
• The long-standing principle that to establish an informal relationship of  “trust and confidence,” that relationship must have existed before the “agreement made
  the basis of the suit.”

No. 19-5017 (Jan. 28, 2021). The dissenting judge agreed with the majority on its analysis of this claim.

In a dispute about various licensing agreements, the Fifth Circuit found that Texas law’s requirements for piercing the corporate veil had not been satisfied:

“The evidence, when viewed as a whole, does not raise a fact issue regarding Barco’s dishonest purpose or intent to deceive Belliveau in entering into the Barco Sublicense. Piercing the corporate veil is not a cumulative remedy for creditors of corporate or other legal entities in Texas; that theory does not make owners of such entities codefendants for every breach of contract case. It is a remedy to be used when the actions of the entity’s owner amounting to ‘actual fraud’ have rendered the entity unable to pay its debts. The district court properly granted summary judgment on Belliveau’s claim to pierce the corporate veil.”

Specifically, the court reviewed (and rejected) arguments about the consideration exchanged in the licensing agreement, issues about disclosure, and a “badges of fraud” analysis under Texas’s fraudulent-transfer statute. Belliveau v. Barco, Inc., No. 19-50717 (Jan. 28, 2021). A dissent identified issues for trial on these matters.

“Mindful of the fundamental right to fairness in every proceeding–both in fact, and in appearance,” the Fifth Circuit reversed the outcome in a Title VII dispute, and ordered the reassignment to a new district judge on remand, when:

From the outset of these suits, the district judge’s actions evinced a prejudgment of Miller’s claims. At the beginning of the Initial Case Management Conference, the judge dismissed sua sponte Miller’s claims against TSUS and UHS, countenancing no discussion regarding the dismissal. Later in the same conference, the judge responded to the parties’ opposition to consolidating Miller’s two cases by telling Miller’s counsel, “I will get credit for closing two cases when I crush you. . . . How will that look on your record?”
And things went downhill from there. The court summarily denied Miller’s subsequent motion for reconsideration, denied Miller’s repeated requests for leave to take discovery (including depositions of material witnesses), and eventually granted summary judgment in favor of SHSU and UHD, dismissing all claims.”

Miller v. Sam Houston State, No. 19-20752 (Jan. 29, 2021).

Shah sued about the alleged monopolization of pediatric anesthesiology services in Bexar County. The Fifth Circuit looked to its discussion of market definition in Surgical Care Center of Hammond, L.C. v. Hosp. Serv. Dist. No. 1, 309 F.3d 836, 840 (5th Cir. 2002), which looked for “a showing of where people could practicably go” to obtain the services at issue. Here, Shah failed to satisfy that standard: “He did not even specify individual pediatric anesthesiologists from whom patients could practicably obtain health care services. Rather, he provided tallies, by county, of pediatric anesthesiologists in Texas that fit the anesthesiology requirements of the BHS-STAR Agreement. Moreover, as the BHS parties argue, Shah’s proposed relevant market does not encompass all interchangeable substitute products because it does not include the two non-BHS facilities that the BHS parties contend serve as viable alternatives to BHS facilities. Shah has not provided evidence or any persuasive argument to raise a genuine dispute as to either of those facilities.” Shah v. VHS San Antonio Partners LLC, No. 20-50394 (Jan. 13, 2021).

An unusual procedural path, winding through a bankruptcy proceeding, led the Fifth Circuit to review a state-court summary judgment. On the issue of the state court’s evidentiary rulings, the Court applied a federal-court approach to a standard form of Texas practice, reasoning: “The grant of these objections improperly excluded important evidence from consideration. To start, the state trial court offered no explanation as to why it granted the objections. It simply checked boxes on a form saying that the objections were sustained. Since a trial court can abuse its discretion by failing to explain the reasons for excluding evidence, the lack of a reasoned explanation weighs in favor of overturning the objections. Courts also typically consider evidence unless the objecting party can show that it could not be reduced to an admissible form at trial.” Cohen v. Gilmore, No. 19-20152 (Dec. 15, 2020) (citations omitted).

Prantil v. Arkema, No. 19-20723 (Jan. 22, 2021), involved class claims about property damage that resulted from a  chemical explosion caused by Hurricane Harvey. The Fifth Circuit vacated and remanded the trial court’s class-certification order, holding:

• “[T]he Daubert hurdle must be cleared when scientific evidence is relevant to the decision to certify”;
• The trial court’s Rule 23(b)(3) analysis fell short in its “discussion of how proof of Arkema’s conduct will affect trial”–specifically, on plaintiff-specific defensive issues about causation, injury, and damages; and
• As to injunctive relief, the order “leaves us uncertain” as to how the extent of necessary property remediation can be determined, and whether a responsive injunction can be fashioned to account for Arkema’s past remediation efforts”–especially if the injunction will rely on the analysis of the class’s experts.

The panel in Gonzalez v. CoreCivic, Inc., No. 19-50691 (Jan. 20, 2021), in the context of an interlocutory appeal certified under 28 USC § 1292, affirmed the denial of a motion to dismiss a claim based on the Trafficking Victims Protection Act of 2000. That law imposes civil liability on on e who “knowingly provides or obtains the labor or services of a person” by certain coercive means. The panel found that the text of the statute unambiguously reached the plaintiffs’ claims against a private company that operated detention facilities for ICE.

A dissent would have found that the plaintiff did not adequately state her claim under Twombly and Iqbal; in response, a concurrence argued that the concept of “party presentation” foreclosed the Court’s review of that matter. North Texas practitioners will recognize echoes of the debate among Justices about supplemental briefing from the Flakes litigation.

Louisiana bar owners contended that a state COVID restriction violated the Equal Protection Clause. The Fifth Circuit disagreed:

“Unlike AG-permitted bars whose primary purpose is to serve alcohol, AR-permitted businesses must serve more food than alcohol to meet their monthly revenue requirements. Even if the Bar Closure Order’s classifications are based solely on the premise that venues whose primary purpose and revenue are driven by alcohol sales rather than food sales are more likely to increase the spread of COVID-19, such a rationale, as described by Dr. Billioux and the Governor and credited by both district courts, is sufficiently ‘plausible’ and not ‘irrational.”’ … [T]he Bar Closure Order’s differential treatment of bars operating with AG permits is at least rationally related to reducing the spread of COVID-19 in higher-risk environments.”

Big Tyme Investments, LLC v. Edwards, No. 20-30526 (Jan. 13, 2021) (citations omitted). The panel majority and a concurrence disputed the exact import of archaic-sounding language from Jacobson v. Massachusetts, 197 U.S. 11 (1905), but did not find it to materially impact the outcome under traditional Equal Protection principles.

The appropriate “gatekeeping” procedures for FLSA cases, which involve the question whether claims are “similarly situated” and thus trigger notice obligations, was thoroughly reviewed in Swales v. KLLM Transport Services, No. 19-60847 (Jan. 12, 2021): “This case poses an issue that has been under-studied but whose importance cannot be overstated: how stringently, and how soon, district courts should enforce § 216(b)’s ‘similarly situated’ mandate. As explained above, the FLSA’s similarity requirement is something that district courts should rigorously enforce at the outset of the litigation.” In reaching this conclusion, the Fifth Circuit disapproved of the widely-cited analysis of this issue in Lusardi v. Xerox Corp., 975 F.2d 964 (3d Cir. 1992).

Echeverry v. Jazz Casino Co., LLC, No. 20-30038 (Jan.11, 2021), discussed yesterday, also reviewed the admissibility of four pieces of evidence in a personal-injury trial. The issue was the liability of the LLC that owns Harrah’s Casino in New Orleans for hiring a wildlife-removal contractor to work on its exterior landscaping (“AWR”). The Fifth Circuit found no abuse of discretion by the trial court in admitting them:

• The contractor’s “F” rating with the Better Business Bureau. “[T]he BBB evidence is not very probative of the safety and competency of AWR. Still, as we earlier discussed, it might have been properly used by jurors as evidence of the Casino’s failure to investigate AWR adequately. … The evidence of the BBB rating at least added to the jurors’ understanding that the Casino missed another of the markers that could have led to further inquiry, even if the inquiry would not have led to much of significance.”
• The contractor’s certificate of insurance. “The Casino relies on Federal Rule of Evidence 411, which makes inadmissible the existence or nonexistence of insurance for purposes of proving or disproving a party’s negligence. … Here, AWR’s lack of insurance was not admitted on the issue of AWR’s negligence but to prove the Casino’s negligence in hiring AWR. Rule 411 was not violated.”
• The Casino’s internal policies. “While [an earlier unpublished case] held that internal policies did not establish the applicable standard of care, that panel did not go so far as to say that evidence that a principal violated its internal policies is irrelevant to the question of negligence. We conclude that failure to follow internal policies can be relevant. The district court did not abuse its discretion by admitting the evidence.” (citation omitted).
• Construction-site photos. “The district court did not abuse its discretion by admitting the evidence of construction sites. [Plainitff] sought to use the evidence of construction sites that had barricades to show that there should have been barricades in place to prevent her injury. The fact that the bird-removal site did not have barricades when similar construction sites did is some evidence
  of a breach of the applicable standard of care, especially when the Casino’s expert made the comparison to construction sites.”

Echeverry v. Jazz Casino Co. illustrates a deferential review of a jury’s work in a case about a property owner’s control of construction work that caused injury. Procedurally, the case reminds that federal court does not strictly follow Texas’s Casteel approach to sufficiency review of multiple-theory cases: “This court employs a harmless-error ‘gloss,’ meaning that if we are ‘totally satisfied’ or ‘reasonably certain’ based on the focus of the evidence at trial that the jury’s verdict was not based on the theory with insufficient evidence, a new trial is unnecessary.” Substantively, the Court found sufficient evidence supported the verdict on each of the plaintiff’s three “theories of negligent hiring, operational control, and authorization of unsafe work practices.” No. 20-30038 (Jan. 11, 2021).

Taylor-Travis v. Jackson State Univ. applies the Fifth Circuit’s principles for review of alleged charge error, finding no abuse of discretion on a complicated question of causation in a discrimination case. No. 17-60856 (Jan. 6, 2020).

The complexities of the McDonnell-Douglass framework were not at issue in Lindsley v. TRT Holdings, Inc., No. 10-`10623 (Jan. 7,  2021), in which the Fifth Circuit found that the appellant established a prima facie case of sex discrimination:

It is undisputed that Lindsley was paid less than her three immediate predecessors as food and beverage director of Omni Corpus Christi. As a result, she has established a prima facie case of pay discrimination, and the district court erred in concluding otherwise.

First, it is undisputed that Lindsley was paid $4,149 less than Walker and $6,149 less than Pollard. It is also undisputed that Lindsley held the same job title at the same Omni hotel as those men. What’s more, Omni agrees that Lindsley established a prima facie case of pay discrimination as to Cornelius, who held the position directly after Pollard and Walker—and there is no evidence that the position has changed since then. This establishes a prima facie case of pay discrimination.

The district court therefore erred in concluding that Lindsley failed to establish a prima facie case because she “provide[d] no evidence that her job as Food and Beverage Director was in any way similar to Pollard and Walker’s jobs, aside from the fact that they shared the same job title.” Far from failing to show that her job was “in any way similar,” Lindsley showed that she held the same position as Walker and Pollard did, at the same hotel, just a few years after they did—and that she was paid lessthan they were. No more is needed to establish a prima facie case.

Did that recent SCOTUS opinion overrule older Circuit authority? “If a
precedent of this Court has direct application in a case, yet appears to rest on
reasons rejected in some other line of decisions, the Court of Appeals should
follow the case which directly controls, leaving to this Court the prerogative
of overruling its own decisions.” Baisley v. Int’l Assoc. of Machinists & Aerospace Workers, No. 20-50319 (Dec. 22, 2020) (quoting Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484 (1989)).

“When Amazon allows third parties to sell products on its website, is Amazon ‘placing’ products into the stream of commerce or merely ‘facilitating’ the stream? If the former, then Amazon is a ‘seller’ under Texas products-liability law and potentially liable for injuries caused by unsafe products sold on its website. But if Amazon only facilitates the stream when it hosts third-party vendors on its platform, then it is not a seller, meaning injured consumers cannot sue for alleged product defects.” The Fifth Circuit certified this important issue to the Texas Supreme Court in McMillian v. Amazon, No. 20-20108 (Dec. 18, 2020).

Practice tip: In the Court’s review of whether the issue warranted certification, it noted that both parties had agreed that there was “substantial ground for difference of opinion” in order to proceed with an interlocutory appeal under 28 U.S.C. § 1292(b).

The Twelfth Amendment says: “The President of the Senate shall, in the presence of the Senate and House of Representatives, open all the certificates and the votes shall then be counted.” By statute, that is to occur this year on January 6. That statute also lays out a procedure for handling objections to votes. Judge Jeremy Kernodle of Tyler rejected a challenge to that process, as the process is in detailed in  Section 15 of 1887’s Electoral Count Act, stating: “Plaintiff Louie Gohmert, the United States Representative for Texas’s First Congressional District, alleges at most an institutional injury to the House of Representatives. Under well settled Supreme Court authority, that is insufficient to support standing.”  Gohmert v. Pence, No. 6:20-cv-660-JDK (E.D. Tex. Jan. 1, 2020).

A Fifth Circuit motions panel (Higginbotham, Smith, Oldham) dismissed an effort at immediate appeal:

The plaintiffs in Molina-Aranda v. Black Magic Enterprises alleged RICO violations based on a scheme to bring them to the US under H2-B visas, but not pay accordingly. The Fifth Circuit affirmed the dismissal of their claims on causation grounds, observing: “Understating the type of work to be done may have supported obtaining the visas, but it was not the cause of underpayment; indeed, if one accepts the Plaintiffs’ allegations, truthfulness would likely have resulted in a lack of visas, keeping Plaintiffs from being able to come to the United States in the first place. But, critically, Plaintiffs’ reduced wages were several steps in the causal chain away from the transmission of fraudulent forms; nothing about the forms required underpayment. To even have the opportunity to underpay Plaintiffs, the Ramirezes had to submit fraudulent forms, obtain authorization, and bring the Plaintiffs to the United States for work. Only then could the Ramirezes actually underpay Plaintiffs.” No. 19-50638 (Dec. 21, 2020) (emphasis added).

The Fifth Circuit affirmed a summary judgment in favor of a business that had been accused of being a “control person” under Louisiana securities laws. “As the district court recognized, the contract between STC and SEI is strong evidence that SEI was unable to control STC’s primary violations. The contract made STC responsible for pricing the SIBL CDs and for providing accurate information to SEI. The contract does not assign any role to SEI in the sale or valuation of SIBL CDs. Further, as the district court noted, the investors’ ‘pleadings contain no evidence demonstrating that the relationship between the companies differed from that contemplated in the
contract.'” The Court then reviewed, and rejected, evidence about the types of work done by the defendant as a service provider. Ahders v. SEI Private Trust Co., No. 20-30186 (Dec. 3, 2020).

When you next want to pose a question in your writing, and really really emphasize it, please consider . . . the Interrobang! Wikipedia suggests the below examples of when the Interrobang may be just the punctuation mark you’re looking for. (H/T to Lucy Forbes of Houston for her knowledge of unconventional punctuation marks)

A Buddhist group sued for alleged infringement of the mark “Unified Buddhist Church of Vietnam” and two others. The Fifth Circuit concluded that of the seven relevant factors about secondary meaning, “only the first factor—the length and manner of use of the Unified Church’s asserted marks—has evidence weighing in favor of the marks having developed protectable secondary meaning.”  On the record presented, that evidence alone was insufficient to justify a finding for the plaintiff, and the Court affirmed a defense summary judgment. The Unified Buddhist Church of Vietnam v. Unified Buddhist Church of Vietnam – Giao Hoi Phat Giao Viet Nam Thong Nhat, No. 19-20544 (Dec. 14, 2020, unpublished). (Relatedly, the Fifth Circuit recently affirmed the denial of a preliminary injunction in Future Proof Brands v. Molson Coors, based on a review of the “digits of confusion” as developed on that record, No. No. 20-50323 (Dec. 3, 2020, unpublished). Our firm represented the appellant in that matter.)

An IRS limitations statute runs from the filing of the “return” in question. The issue in Quezada v. IRS was whether the filing of a return–but the wrong type of return–starts the clock running. The Fifth Circuit found that it did, so long as it contained information from which the taxpayer’s claimed error could be identified: “Accordingly, consistent with a plurality of our sister circuits, we think the better reading of [Supreme Court precedent] is that the taxpayer is not required to file the precise return prescribed by treasury regulations in order to start the limitations clock. Instead, ‘the return’ is filed, and the limitations clock begins to tick, when the taxpayer files a return that contains data sufficient (1) to show that the taxpayer is liable for the tax at issue and (2) to calculate the extent of that liability.” No. 19-5100-CV (Dec. 11, 2020).

The Supreme Court’s rejection of Texas v. Pennsylvania (despite support from an amicus brief by two nonexistent states) has sparked an unusual national dialogue about the concept of standing (including the President’s accurate observation: “All they were interested in is ‘standing’, which makes it very difficult for the President to present a case on the merits.” (emphasis added)). The capable Rory Ryan at Baylor Law School has analyzed and critiqued the dissenters’ position; for reference, the entire order appears below:

The State of Texas’s motion for leave to file a bill of complaint is denied for lack of standing under Article III of the Constitution. Texas has not demonstrated a judicially cognizable interest in the manner in which another State conducts its elections. All other pending motions are dismissed as moot. Statement of Justice Alito, with whom Justice Thomas joins: In my view, we do not have discretion to deny the filing of a bill of complaint in a case that falls within our original jurisdiction. See Arizona v. California, 589 U. S. ___ (Feb. 24, 2020) (Thomas, J., dissenting). I would therefore grant the motion to file the bill of complaint but would not grant other relief, and I express no view on any other issue.

Yes, it’s kind of a pain, but it’s your vote, your voice, and your chance to be heard as to a widely-circulated attorney directory. The link to the Super Lawyers nomination site is here, and the deadline to make your nominations is December 21, 2020.

Automation Support, Inc. v. Philippi, No. 20-10386 (Dec. 8, 2020).

In Williams v. Reeves, 953 F.3d 729 (5th Cir. 2020), “[t]he plaintiffs in this lawsuit are low-income African-American women whose children attend public schools in Mississippi. They filed suit against multiple state officials in 2017, alleging that the current version of the Mississippi Constitution violates the ‘school rights and privileges’ condition of the [1870] Mississippi Readmission Act.”  A Fifth Circuit panel found that ” a portion of the relief plaintiffs seek is prohibited by the Eleventh Amendment,” but that “the lawsuit also partially seeks relief that satisfies the Ex parte Young exception to sovereign immunity.” The full court recently denied en banc review by an 8-9 vote; the votes are described below, and they are identical to the split in another recent vote. (Red and blue show the political party of the nominating President, and an * indicates former service as a trial judge.)

“In November 2015, over a year after Richter claims that an implied contract had been formed, the parties exchanged a letter of intent. The letter stated that it was to be construed as securing a “preliminary understanding” between the parties and to serve as “a preliminary basis for negotiating a written agreement that will contain additional material terms, conditions and provisions not yet agreed upon by the parties.” The letter explicitly stated that it did not constitute a binding contract. We agree with the district court that this renders implausible any inference that the prior 2014 e-mail was intended by the parties to represent assent to be bound by contract …”  Richter v. Carnival Corp., No. 20-10480 (Dec. 1, 2020).

In striking down a regulation of casket-making by a Louisiana monastery, the Fifth Circuit assured: “Nor is the ghost of Lochner lurking about.” St. Joseph Abbey v. Castille, 712 F. 3d 215, 226-27 (5th Cir. 2013). Nevertheless, that fearsome shade surfaced in Hines v. Quillivan, an equal-protection challenge to Texas’s regulation of telemedicine by veterinarians, only to be banished by the panel majority: “It is not irrational for a state to change in stages its licensing laws to adapt to our new, technology-based economy. If the Texas legislature finds the recently enacted changes on telemedicine successful, it may decide to expand those changes to include veterinarians. It is reasonable to have a trial period rather than to make a hasty policy change. Though we could conceive no rational basis for the law challenged in St. Joseph Abbey, we can conceive many rational bases here.”

A dissent saw matters differently, crediting the plaintiff’s argument that “[i]t simply is not rational to allow telemedicine without a physical examination for babies but deny the same form of  telemedicine for puppies on the ground that puppies cannot speak.” No. 19-40605 (revised Dec. 2, 2020).

An error in pleading jurisdiction led to an inconclusive end in Accordant Communications v. Sayer Construction, No. 20-50169 (Dec. 4, 2020):

1. Accordant won a $1.4 million arbitration award against Sayer.
2. Accordant sued to confirm the award in federal court.
3. “As to the citizenship of the parties, Accordant alleged that it ‘is a limited liability company organized under the laws of Georgia with its principal place of business in Seminole County, Florida” and that Sayers ‘is a limited liability company organized under the laws of Texas with its principal place of business in Travis County, Texas.'” 
4. Sayer declined to answer postjudgment discovery, and on appeal argued that the district court lacked subject-matter jurisdiction (as the above allegations are based on the standards for a corporation rather than an LLC).
5. Despite this ‘clearly deficient’ and ‘basic’ pleading problem, the Fifth Circuit did not dismiss the case: “Considering the evidence in the record on appeal … we find that ‘jurisdiction is not clear from the record, but there is some reason to believe that jurisdiction exists.’ Therefore, we exercise our discretion under [28 USC] § 1653 and ‘remand the case to the district court for amendment of the allegations and for the record to be supplemented,’ if necessary.” (citation omitted).

Hon. Thomas Reavley has passed away in Houston, at the age of 99. The Houston Chronicle summarizes his life of extraordinary service to the Texas courts and the U.S. Court of Appeals for the Fifth Circuit, as does the Texas Lawbook. His wisdom and statesmanlike presence will be missed by all.

By an 8-9 vote, the Fifth Circuit abstained from en banc review of McRaney v. North American Mission Board, 966 F.3d 346 (5th Cir. 2020), in which the panel found that the application of the ecclesiastical abstention doctrine was premature given the stage of the parties’ case. A breakdown of the votes is below (the third panel member, Judge Clement, has taken senior status and did not participate in the vote):

“Hard cases make bad law,” says the old adage; whether that holds true for Taylor v. Riojas, will remain to be seen. The Supreme Court reversed a qualified-immunity ruling in a case involving what it saw as “shockingly unsanitary” prison cells, finding that the “extreme circumstances” of the case eliminated any dispute about whether the relevant law was clearly-established. No. 19-1261 (U.S. Nov. 2, 2020) (reversing Taylor v. Stevens, 946 F.3d 211 (5th Cir. 2019).