Wildman sued about a Medtronic device implanted in his back to relieve pain, contending that the device did not last as long as the company warranted. Medtronic argued that this claim was preempted by federal law. The question, then, is whether that warranty claim imposes requirements “different from” those of the FDA – put differently, whether it would “undermine FDA regulation or reinforce it.” The Fifth Circuit found that it was not preempted, reasoning that Medtronic made a warranty of “the longevity of the entire [d]evice,” which “goes beyond what the FDA evaluated in its approval process,” as that procees focused specifically on the testing of batteries. The Court thus reversed a summary judgment for Medtronic and remanded, noting that on remand the district could consider “another argument challenging the plausibility of Wildman’s claim: that he did not allege reliance on the warranty.” Wildman v. Medtronic, Inc., No. 17-50010 (Oct. 31, 2017).

After the commercial, at about 2:30 in this news segment, I offer a couple of thoughts about recent developments in the Russia investigation.

The concept of a “genuine issue of material fact” is largely unquantifiable, but occasionally a case does set a quantitative landmark. In Shirey v. Wal-Mart Stores Texas, LLC, the Fifth Circuit addressed a personal injury claim asserting that a Wal-Mart store had constructive notice of a grape on the floor, holding:

Photographic and video evidence demonstrate that the grape was, as the district court noted, almost invisible on the off-white floor. The evidence also fails to establish that any Wal-Mart employee was in proximity to the grape for a sufficient period of time. The few seconds during which the employee passed by the grape did not provide an objectively reasonable opportunity for him to see it, notwithstanding his employer’s policy that he perform visual “sweeps” for hazards. Under these circumstances, the seventeen minutes during which the inconspicuous grape was on the floor did not afford Wal-Mart a reasonable time to discover and remove the hazard.

No. 17-20298 (Oct. 30, 2017, unpublished) (emphasis added).

Among other Twombly problems, the Fifth Circuit criticized a bankruptcy trustee’s claims about excessive bonuses, noting: “The Trustee does not explain how ATP’s compensation was excessive in comparison to other similarly sized public companies in the oil and gas industry at the time. Indeed,the Trustee offers no metric or explanation for finding the bonuses ‘exorbitant.'” And in this procedural setting, “these pleading deficiencies are ‘particularly striking’ because the Trustee has ample access to ATP’s books and records.” Tow v. Bulmahn, No. 17-30077 (Oct. 27, 2017, unpublished).

While it does not do so every day, or for that matter even every year, Fifth Circuit opinions draw powerful boundary lines around government activity. One recent example is St. Joseph Abbey v. Castille, 712 F.3d 215 (5th Cir. 2013), about the limits that substantive due process places on economic regulation. Another such line-drawing case appeared this month in Jauch v. Choctaw County, which found that qualified immunity did not protect a sheriff from the following violation of due process:

On April 26, 2012, Starkville Police Department officers pulled Jauch over, issued her several traffic tickets, and informed her of an outstanding misdemeanor warrant in Choctaw County. Choctaw County deputies took custody of Jauch and transported her to the Choctaw County Jail where, the next morning, she was served with the misdemeanor warrant and the capias. Jauch cleared the misdemeanor warrant within a few days. She nonetheless
remained detained on the capias, and her requests to be brought before a judge and allowed to post bail were denied. Jail officials informed Jauch that Sheriff Halford had confirmed she could not be taken before a judge until August when the next term of the Circuit Court commenced. When a friend of Jauch’s reached the sheriff on the telephone, he told her the same thing. Jauch’s protestations of innocence were ineffectual.

Ninety-six days after being taken into custody, Jauch’s case moved forward. She received an appointed attorney, waived formal arraignment, had bail set, and had a trial date set. Six days later, on August 6, 2012, she posted bail. Before the end of the month, the prosecutor reviewed the evidence against Jauch and promptly moved to dismiss the charge. On January 29, 2013, the Circuit Court of Choctaw County entered the dismissal. It is undisputed that Jauch was innocent all along, as she had claimed from behind bars.

No. 16-60690 (Oct. 24, 2017).

Among other holdings in a breach-of-warranty dispute about an aircraft engine, the Fifth Circuit reversed a finding that the manufacturer breached an express warranty by not repairing the engine in a timely manner. Because, under Texas law, “courts will not rewrite agremeents to insert provisions parties could have included,” “time is not of the essence of a contract unless the contract explicitly makes it so . . . .”  Becker v. Continental Motors, Inc., No. 16-10166 (Oct. 3, 2017).

The Fifth Circuit describes its newly-created Pro Bono Program as follows. Great opportunity for quality appellate experience!

“The Program assists the Court by facilitating the appointment of pro bono counsel to represent pro se litigants. Pro Bono Panel members will, at the Court’s invitation, be appointed in civil appeals that, for example, present issues of first impression, complex facts or legal questions, or potentially meritorious claims warranting further briefing and/or oral argument.

Pro bono appointments are made by the Court, and are limited to proceedings before this Court. Although oral argument is not guaranteed, cases selected for the Program are likely to meet the Court’s criteria for granting oral argument.

Attorneys wishing to join the Pro Bono Panel should submit to the CMJS Office a cover letter (including statement of types of cases, if any, that counsel prefers or does not prefer), resumé, writing sample (appellate brief or brief of substantive motion), and statement of good standing in the Fifth Circuit Bar. Applications for panel membership should be emailed to the CMJS Office at probono@ca5.uscourts.gov. Questions about the program may be directed to Kate Clark, Administrative Attorney, at that email address or by telephone at 504-310-7799.”

The question of timely notice to a carrier can give rise to close questions about insurance coverage. Nautilus Ins. Co. v. Miranda-Mondragon, however, presented a straightforward issue: “The first notice Nautilus received of the lawsuit came from Miranda-Mondragon’s counsel 41 days after the state court entered default judgment . . . . The delayed notice prejudiced Nautilus as a matter of law and relieved Nautilus of liability under the policy.” No. 17-20261 (Oct. 20, 2017, unpublished).

Atlas Trading sued AT&T based on the “filed rate doctrine,” which prohibits a common carrier from charging rates other than those on file with the FCC. The Fifth Circuit affirmed the dismissal of that claim on the pleadings; after a thorough discussion of  the requirements of Twombly and Iqbal, the Court observed:

Atlas has neither pled nor shown, though, how these charges are inconsistent with the tariffed rates. That the terms are not found  in the tariffs is insufficient. For example, it could allege what it should have been charged under the tariffed rate or compared that to what it was actually charged. It simply asserts that charges such as the composite access-rate charge are not found in the tariffs and from that asks the court to let its claims go forward.

 

Even accepting as true Atlas’s allegation that the labels for the charges are not found in the tariffs, we cannot make a reasonable inference that the defendants have violated the filed-rate doctrine. At most, we can only infer that certain labels for charges are not found in the tariffs filed with the FCC. Such an inference is not the equivalent of a plausible allegation that the defendants have charged Atlas different rates from those on file with the FCC.

Atlas Trading v. AT&T, No. 16-11661 (Oct. 18, 2017) (emphasis added).

In a reminder of the surprising complexity that can surround litigation about a party’s standing to bring a claim, in Intrepid Ship Mgmnt v. Malin Int’l Ship Repair, the Fifth Circuit noted a source of potential confusion about the applicable procedure: “Although a dismissal for lack of standing is appropriately judged under Federal Rule of Civil Procedure 12(b)(1), which allows a court to make limited findings of fact, the parties have argued this case under the standards applicable to ordinary summary judgment motions. Compare Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008) (explaining that the district court can resolve disputed facts as necessary to decide a challenge to subject atter jurisdiction), withInt’l Marine LLC v. Integrity Fisheries, Inc., 860 F.3d 754, 759 (5th Cir. 2017) (applying de novo review to summary judgment cases, explaining that “[s]ummary judgment is appropriate when ‘there is no genuine dispute as to any material fact.’”)”. No. 16-41074 (Oct. 11, 2017) (unpublished).

In a 2-1 decision, the Fifth Circuit found that Ezekiel Elliott failed to exhaust remedies within the NFL’s dispute-resolution process before filing suit, meaning that the federal courts lacked subject matter jurisdiction over his complaints. A dissent found a sufficient question about the adequacy of the process to justify the exercise of jurisdiction under the relevant authorities. NFLPA v. NFL, No. 17-40936 (Oct. 12, 2017). While of enormous interest to Cowboys fans, so far as arbitration goes, the opinion is centered on issues unique to collective bargaining agreements.

Plaintiff, invoking classical concepts about the measure of damages, argued that a “reliance” or “restitution” measure was superior to “expectancy” as applied to the breach of a stock-purchase contract. The Fifth Circuit disagreed: “Here, the jury found that there was an express contract, the stock agreement, so under Texas law, Jinsun may not recover anything beyond its expectancy damages unless Jinsun shows that the stock agreement is an exception to the general rule. Jinsun has failed to do so. Here, Jinsun expected to receive $56,000 from Alidad in exchange for the block of Luxeyard stock. Whether the stock price went up or down following the stock transfer, Jinsun was entitled to receive $56,000 from Alidad—no more and no less. Its expectancy damages under the plain terms of the express contract are therefore $56,000—no more and no less.” Jinsun LLC v. Mireskandari, No. 16-20275 (Oct. 5, 2017).

As a counterpoint to the recent case of Boerschig v. Trans-Pecos Pipeline, which rejected a mootness challenge in an injunction case about a condemnation (reasoning that the court could still “order that Trans-Pecos return Boerschig’s land to its precondemnation state.”), there is Dick v. Colorado Housing Enterprises, LLC, which found a request for an injunction became moot after the allegedly wrongful foreclosure occurred (rejecting “Plaintiff-Appellant[‘s] assert[ion] that because the Defendants-Appellees were the successful bidders at the foreclosure sale, this court can order them to cancel or rescind the foreclosure sale.”) The distinction between the two rests on case law unique to foreclosures, which the Dick panel used the Fifth Circuit’s “rule of orderliness” to organize and apply. No. 17-10357 (Oct. 4, 2017).

Ramirez, on work trips to West Texas, contracted a fungal infection that led to the loss of an eye. His employee insurance plan would pay benefits “if an employee is injured as a result of an Accident, and that Injury is independent of Sickness and all other causes.” Based on the definitions of “Accident and “Sickness” in the policy, the Fifth Circuit affirmed summary judgment for the insurer. Ramirez tried to come within a “carve-back” provision at the end of the “Accident” definition, which extended coverage to “bacterial infection that is the natural and foreseeable result of an accidental external bodily Injury or accidental food poisoning, but the Court concluded that “neither the policy’s language nor its structure indicates that this provision applies beyond those two specific occurrences.” Ramirez v. United of Omaha Life Ins. Co., No. 16-11660 (Oct. 6, 2017).

In Boerschig v. Trans-Pecos Pipeline LLC, an effort to enjoin state-court eminent domain proceedings in federal court: “Boerschig contend[ed] that by ceding condemnation power to a private company, Texas eminent domain law offends due process. His argument principally relies on the private nondelegation doctrine, a nook of Fourteenth Amendment law long recognized but seldom invoked.” That obscure but important doctrine provides that “when private parties have the unrestrained ability to decide whether another citizen’s property rights can be restricted, any resulting deprivation happens without ‘process of law.'” Unfortunately for Boehrschig: “The Texas scheme allowing gas pipelines to condemn property does not appear to suffer from either of the twin ills that doomed these zoning and wagesetting laws. It imposes a standard to guide the pipeline companies—that the taking is necessary for “public use”—and provides judicial review of that determination that prevents the company from having the final say.” The Court also rejected a mootness challenge based on the construction of the relevant pipeline, observing that it could still “order that Trans-Pecos return Boerschig’s land to its precondemnation state.” No. 16-50931-CV (Oct. 3, 2017).

Welding-safety regulations enacted under the Outer Continental Shelf Lands Act contain this definition: “You means a lessee, the owner or holder of operating rights, a designated operator or agent of the lessee(s), a pipeline right-of-way holder, or a State lesssee granted a right-of-use and easement.” In United States v. Moss, the Fifth Circuit affirmed the dismissal of criminal charges against a contractor based on this set of regulations, agreeing that “you” – as defined above, and applied consistently with relevant canons of interpretation – could not be read to include a contractor. Weighing heavily against the government’s position was a long history of “virtually non-existent past enforcement of OCSLA regulations against contractors.” No. 16-30561 (Sept. 27, 2017).

The contentious, high-profile False Claims Act case of U.S. ex rel Harman v. Trinity Industries ended with complete victory for the defense, based substantially on the U.S. Supreme Court’s recent opinion about the element of “materiality” in Universal Health Services v. U.S. ex rel. Escobar, 136 S.Ct.1989 (2016). While the Harman opinion touches on many other aspects of the trial evidence and the requirements of the FCA, its central teaching its is application of Escobar, as applied to the government’s interaction with and payment for the highway guardrails at issue: “[I]f the Government pays a particular claim in full despite its actual knowledge that certain requirements were violated, that is very strong evidence that those requirements are not material. Or, if the Government regularly pays a particular type of claim in full despite actual knowledge that certain requirements were violated, and has signaled no change in position, that is strong evidence that the requirements are not material.” No. 15-41172 (Sept. 29, 2017).

Thanks to Mary Douglass and the Bar Association of the Fifth Federal Circuit for the chance to give a commercial litigation update at the 2017 Appellate Advocacy Seminar in New Orleans; here is the PowerPoint that I used for the presentation yesterday.

Former Texas Solicitor General Jim Ho and Texas Supreme Court Justice Don Willett have been nominated to the U.S. Court of Appeals for the Fifth Circuit. The Texas Lawbook features a thorough discussion of the nominations, as does the Dallas Morning News. From Louisiana, President Trump has also nominated Stuart Duncan and U.S. District Judge Kurt Engelhardt; The Advocate has a good summary of their backgrounds.

In Mainali v. Covington Specialty Ins. Co., the Fifth Circuit addressed “whether a payment made to comply with an appraisal award, which in most if not all cases is going to be paid after the 60-day window [set by the Texas Prompt Payment statute], is subject to [a statutory] penalty.” In an Erie analysis, the Court followed intermediate Texas authority that held such a payment was not subject to those statutory penalties, observing: “Covington was not trying to avoid payment of the claim; it was invoking a contractually agreed to mechanism for assessing the amount it owed.” No. 17-10350 (revised Sept. 27, 2017).

TDX Energy v. Chesapeake Operating begins with an entertaining – and accurate – summary of the challenge presented by oil and gas overproduction. Brought forward into today’s market and the parties’ dispute, at issue was a Louisiana statute, under which an operator can forfeit the right to deduct drilling costs on an “unleased oil and gas interest” – defined as one “upon which the operator or producer has no valid oil, gas, or mineral lease. (Here, the relevant interests were leased to TDX but not the operator, Chesapeake.) The Fifth Circuit elected to follow a Lousiana intermediate court opinion that it found to be consistent with the applicable canons of interpretation, and concluded that “The most natural reading of [the two relevant sections together] is that operators forfeit their right to contribution when they fail to send timely reports to lessees with oil and gas interests in lands upon which the operator has no lease . . . .” 857 F.3d 253 (5th Cir. 2017).

After removing a dispute about a home equity loan foreclosure, Deutsche Bank argued that a state court order that had vacated an earlier order allowing the foreclosure was invalid. The homeowner argued that review was precluded by the Rooker-Feldman doctrine; the Fifth Circuit disagreed. The doctrine did not apply because (1) the “vacating order” was not final under Texas law, and (2) was void under Texas law because the state court had no authority to enter it under the specific state rules of procedure applicable to foreclosures. Unfortunately for the homeowner, the original order authorizing the foreclosure was not final either, allowing review of the merits and affirmance of summary judgment for the Bank. Burciaga v. Deutsche Bank Nat’l Trust Co., No. 16-40826 (Sept. 18, 2017).

The four-part venue test adopted by the Eastern District of Texas after the Heartland opinion was short-lived, as the Federal Circuit granted mandamus relief in In re Cray, noting: “[O]ur analysis of the case law and statute reveal three general requirements relevant to the inquiry: (1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.”

Today this blog celebrates its 6th birthday! Thank you for reading. And if you want to help celebrate, consider mixing up some Crabmeat Yvonne, a staple of New Orleans’s great Galatoire’s.

The Fifth Circuit affirmed an award of $232,809.92 in costs on an unsuccessful FCA claim, noting: “The district court acknowledged that [Defendant]’s invoices were not detailed but explained that, given nearly three million pages of copies [Defendant] produced for its defense in this case,it would have been impossible for [Defendant] to explain each page’s usefulness.” It also allowed recovery for “costs relating to (1) TIFF image conversion, (2) scanning, (3) formatting electronic documents, and (4) PDF conversion – per [28 U.S.C.] § 1920(4), which allows recovery for ‘exemplification’ and ‘making copies’ of case materials.” In a similar vein, the Court credited the district court’s explanation that the statute “allow[s] a prevailing party to recover the costs of complying with an opposing party’s request to reformat electronic documents or scan hard copies of documents.” United States ex rel King v. Solvay Pharmaceuticals, Inc., No. 160259 (Sept. 12, 2017).

The parties in IQ Products Co. v. WD-40 Co.disputed whether an arbitration agreement was limited to “propane/butane-propelled produicts” or also “carbon dioxide-propelled products.” The party who prevailed in the arbitration relied mainly on the parties’ subsequent conduct to justify the broader reading, and the Fifth Circuit agreed (applying California law): “Considering . . . ‘the words used . . . as well as extrinsic evidence of such objective matters and the surrounding circumstances under which the parties negotiated [and] entered into the contract; the object, nature and subject matter of the contract; and the subsequent conduct of the parties . . . WD-40’s assertion is . . . not wholly groundless.” No. 16-20595 (Sept. 13, 2017).

The high-profile dispute between Dallas Cowboys star Ezekiel Elliott and the NFL Players’ Association, on the one hand, and the NFL on the other, has reached the Fifth Circuit after the district court’s grant of a preliminary injunction against Elliott’s suspension by the league. The NFL has moved for an interim stay; the successful plaintiffs have responded; and a motions panel of the Court will consider that issue in the week ahead.

In AMA Discount, Inc. v. Seneca Specialty Ins. Co., the Fifth Circuit rejected an interlocutory appeal on a question of bad faith claims handling under Louisiana insurane law, noting that a potentially conflicting district court decision had recently settled on appeal, and the parties actually disputed the application of law to fact rather than the controlling legal standard. The Court acknowledged that this ruling differed from that of a prior motions panel, but observered that at this stage, the case “has the benefit of full briefing and a completed record.” The Court concluded: “Perhaps an interlocutory certification would ‘materially advance the termination’ of this litigation. If that were the decisive question, of course, there would be few roadblocks to interlocutory appeals of legal issues.” No. 16-31158 (Sept. 11, 2017, unpublished).

• The panel majority in Veasey v. Abbott concluded that a stay was warranted during the appeal of an injunction against certain “voter ID” laws, focusing on the likelihood-of-success element of the standard four-part test: “As the State explains, each of the 27 voters identified – whose testimony the plaintiffs used to support their discriminatory-effect claim – can vote without impediment under SB 5. The State has made a strong showing that htis reasonable-impediment procedure remedies plaintiffs’ alleged harm and thus forecloses plaintiffs’ injunctive relief.”
• A dissent disagreed as to the elements of the four-part test, and the overrarching concept of “preserving the status quo”: “Neither side would be irreparably harmed by continuing to operate under the same election procedures they have been operating under for more than a year. If a stay is granted at all, then it should be comprehensive. In other words, the correct approach would be to stay both the district court’s order and the new legislation.” No. 17-40884 (Sept. 5, 2017).

2017 has not been kind to the administrative state, and neither was Burgess v. FDIC, No. 17-60579 (Sept. 7, 2017). An FDIC administrative law judge concluded that Burgess had misused bank property, the FDIC Board adopted those recommendations, and Burgess sought review in the Fifth Circuit. He sought an interim stay based upon his argument that the ALJ was an “inferior Officer” within the meaning of the Constitution’s Appointments Clause, and the Fifth Circuit agreed, citing the Supreme Court’s analysis of a similar position involving the U.S. Tax Court in Freytag v. Commissioner of Internal Revenue, 501 U.S. 868 (1991). In so doing, the Court parted ways with the D.C. Circuit’s analysis in Landry v. FDIC, 204 F.3d 1125 (2000), by concluding that final decision-making authority was not a prerequisite to Officer status. Accordingly, the Court granted the interim stay, finding that Burgess “has established a likelihood of success on the merits of his Appointments Clause challenge.”

After last week’s opinion in In re: DuPuy Orthopaedics, the plaintiffs have sought en banc review of a panel majority’s statements about the trial court’s ruling on the key issue of waiver. The petition raises interesting and basic questions about the scope of opinions. (For more on that general topic, check out David Coale & Wendy Couture, Loud Rules, 34 Pepperdine L. Rev. 715 (2007)).

Addressing a novel but important question, the Fifth Circuit found in that a state law attachment remedy was available to faciliate an international arbitration about a shipment of pig iron, and that federal courts had removal jurisdiction over the proceedings under the Convention on the Recognition and Enforcement of Foreign Arbital Awards. Stemcor USA v. CIA Siderurgica do Para Cosipar, No. 16-30984 (Sept. 1, 2017).

I am speaking at the Texas State Bar’s “Civil Appellate Practice 101” course on September 6 in Austin about key differences in procedural issues between Texas courts and federal courts in the Fifth Circuit. Here is a copy of the PowerPoint that I am using.

The high-stakes mandamus petition in In re DuPuy Orthopaedics, Inc., No. 17-10812 (Aug. 31, 2017), sought relief from an upcoming set of “bellweather” trials in a massive MDL proceeding about allegedly defective hip implants.  After an hour-long oral argument – and despite Hurricane Harvey’s enormous impact on Houston, where all three panelists are based – the panel denied the petition a week after argument in an unusual “split decision.”

As to the underlying substantive issue – whether the trials could proceed despite strong arguments about personal jurisdiction – two of the three panelists (Judges Smith and Jones) found that a clear error had been committed. But as to mandamus relief, two of the three panelists (Judges Smith and Costa) concluded that the defendants had an adequate remedy by direct appeal.

The opinion has four implications for mandamus practice in the Fifth Circuit, generally.

First, Judge Costa now has a “track record” about mandamus petitions, and his observations in this case – consistent with his prior experience as a trial judge – suggest he has a restrictive view about its availability.

Second, if there was any doubt that mandamus is essentially limited to forum-selection disputes in the Fifth Circuit, the analysis of “adequate remedy” by the panel majority on that point should eliminate it. The unusual length and expense of the upcoming trial, coupled with its potential impact on settlement discussions for the entire MDL, was seen as the type of litigation expense and “hardship [that] may result from delay” that will not justify a mandamus petition.

Third, by detailing a panel majority’s view that the trial court had erred, the opinion continues a practice of offering something of an “advisory opinion” about the merits, despite declining to issue the writ. Indeed, footnote 4 of the opinion gives several examples of other opinions that have done so; two other recent examples include the opinions in In re: Crystal Power Co., 641 F.3d 82 (5th Cir. 2011) (“We confess puzzlement over why respondents insist on litigating this case in federal court even though . . . any judgment issued by the district court will su ely be reversed . . . . “) and In re: Trinity Industries, No. 14-41067 (Oct. 10, 2014) (“The court is compelled to note, however, that this is a close case.”)

Fourth, the opinion highlights the difference between federal and Texas state mandamus practice, despite the nominally similar tests used by the two court systems. A leading Texas Supreme Court case about the adequacy of appellate remedy observes: “Although this Court has tried to give more concrete direction for determining the availability of mandamus review, rigid rules are necessarily inconsistent with the flexibility that is the remedy’s principal virtue.” In re: Prudential Ins. Co., 148 S.W.3d 124 (Tex. 2004). The DuPuy panel majority has a different view of the point.

Five Tips for Hurricane Harvey Litigation (a version of this article is in this week’s Texas Lawbook)

In the course of reviewing the Fifth Circuit’s commercial cases for this blog, I have read many opinons about disputes arising from Hurricane Katrina cases. In light of the havoc recently created by Hurricane Harvey, I wanted to share five observations  to prepare for the litigation that will inevitably result.

1. Record the facts.

Any lawsuit creates tension between the past and the future. The parties want to move on, and put the expense and stress of litigation behind them. But the legal case forces them to revisit the past.

That tension is particularly acute after a disaster such as Harvey, which forced people and businesses to endure incredible stress, while making them then revisit that trauma to protect their legal rights in court. The – entirely understandable – desire to move on, must be squared with the need to take the time to preserve evidence.

Consider St. Bernard Parish v. Lafarge North America, a case about the destruction of a bridge during Hurricane Katrina. While the parties offered extensive expert testimony about what caused the damage, the summary judgment proceedings turned in no small part on the facts of what happened during the storm, including facts established by photographs.

A party facing litigation should consider – as awkward as it can be while recovering from a life-disrupting event – what facts seem obvious now but may fade from memory as time goes on. To the extent possible, some thought should be given to:

• maintaining electronic records, even if the hardware appears damaged at first blush;
• writing down a “log” of relevant conversations and events about important events;
• storing any relevant physical objects, for potential future analysis by experts; and
• simply writing down basic information about names, addresses, phone numbers, and the like.

In a case arising from a natural disaster, courts will likely be forgiving as to claims of spoliation. But lost information is lost, and its absence can later effect the resolution of a legal case.

2. Help the people.

The fact evidence in the Lafarge case also included eyewitness testimony, which proved critical to defeating the defendant’s summary judgment motion. Just as a photograph can deteriorate, a person’s memory can fade. And the likelihood of that occurring can only increase when the person is placed under the severe stress of a natural disaster.

Any “team” confronted with a legal challenge by Harvey ­– a business, a professional organization, or even a family – should be mindful of the psychological effects of that stress, and encourage counseling for depression, substance abuse, and other such problems when their first signs appear. Of course, that is a good practice in any event. But its potential side benefit to a legal case is real and worth remembering.

3. Remember three definitions.

The factual and legal issues that will ultimately go to trial in cases about Harvey simply cannot be predicted with any specificity. But in the short run, three basic legal concepts are likely to pervade business dealings related to the storm:

• The Texas pattern jury instruction about “duress” defines it as “the mental, physical, or economic coercion of another, causing that party to act contrary to his free will and interest.”
• While “force majeure” is ordinarily defined by a specific contract, it generally refers to an “extraordinary event or circumstance beyond the control of the parties,” and often does not excuse a party’s non-performance entirely, but only suspends it for the duration of the event.
• “Impossibility of performance” is defined by the Restatement (Second) of Contracts as occurring “[w]here, after a contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.”

Awareness of these concepts can potentially avoid problems down the road, as well as identify topics and issues that require special attention today.

4. “Two-deep leadership.”

The Boy Scouts of America strictly follows a policy of “two-deep leadership,” under which two adults should be present at all times when interacting with youth. One benefit of that policy is to avoid “he-said, she-said” disputes between two eyewitnesses with no third–party corroboration. In the stress of dealing with the aftermath of Harvey, involving a business colleague or a friend in important discussions may help the future resolution of a legal matter, if a dispute arises about what was said in those discussions.

5. Crowdsource, wisely.

For good or ill, social media has come a long way since Hurricane Katrina. Used judiciously, it can be a good source of information about late-breaking news or the reputation of a particular business. And it can provide a valuable outlet for self-expression after the trauma of Harvey.

But social media posts can survive much longer than the thoughts that prompted them, and rash comments about people or events can come back to haunt the person who makes an ill-advised post. Social media is a valuable conduit for information, and at the same time, it is a reliable creator and collector of potential evidence.

Conclusion

Faced with the reality of recovery from one of the worst storms in the nation’s history, planning for future litigation may seem to be a distant worry. But the foundation for that litigation is being put in place today, intentionally or unintentionally. These five basic ideas may provide ways to place that foundation in a more orderly manner, resulting in a stronger end product.

While arising in the specific context of a defective design claim under state law, Stewart v. Capital Safety USA addressed a broader question about when expert testimony is required to prove a point, as opposed to observations by knowledgeable lay witnesses. The Court held: “To find injury causation here, a jury would at least have to conclude that a different lifeline cable or a different warning would have, under the circumstances of this accident, prevented Stewart’s death. Thus, a jury would be confronted with questions that require a degree of familiarity with such subjects as physics, engineering, and oil rig practices and procedures. This case therefore raises questions that are of ‘sufficient complexity to be beyond the expertise of the average judge and juror’ and that ‘common sense’ does not ‘make[] obvious.'” No. 16-30993-CV (May 30, 2017; published Aug. 21, 2017).

An insurance dispute went to final judgment in 2012, was appealed to the Fifth Circuit and ultimately remanded “for further consideration in the light of hte answer given by the Texas Supreme Court in [In re: Deepwater Horizon, 470 S.W.3d 452 (Tex. 2015)]. On remand, after considering the effect of Deepwater Horizon, the district court reinstated its 2012 judgment. In the second appeal, the parties disputed whether “the post-judgment interest rate, which is significantly lower than the applicable pre-judgment interest rate, should apply from the date of the 2012 judgment because that judgment was not materially changed on remand.” The Fifth Circuit agreed that it should run from the 2012 judgment, noting that the district court did not reopen the record, and the judgment did not materially change. ExxonMobil v. Electrical Reliability Servcs., No. 15-20751 (Aug. 22, 2017).

Sterling Homes, the general contractor on a residential construction project, successfully sued Espinoza, a painting subcontractor, for a fire loss over $1 million. Espinoza’s insurer denied coverage because Sterling Homes was an “additional insured” on Espinoza’s policy, which the insurer said brought the Sterling-Espinoza dispute within the policy’s “cross suits” (or “insured v. insured”) exclusion.. The Fifth Circuit concluded that the plain terms of the exclusion would cover parties that were named as “additional insureds,” in addition to the actualy purchasers of a policy. But as to the specific claims at issue, the Court further held that the exclusion was only intended to apply to Sterling Homes’s liability arising rom Espinoza’s operations, as “nothing in the plain language of the subcontracting agreement obligating Espinoza to name Sterling Homes as an additional insured suggests the parties intended for Espinoza to lose insurance overage in the event Sterling Homes needed to sue him.” Certain Underwriters at Lloyd’s v. Sterling Custom Homes

Body by Cook, Inc. v. State Farm gives a useful reminder about the basic rules for a federal pleading: “[A] complaint may simultaneously satisfy Rule 8’s technical requirements but fail to state a claim under Rule 12(b)(6). Mere compliance with Rule 8 does not itself immunize the complaint against a motion to dismiss. Rule 8(a)(2) specifies the conditions of the formal adequacy of a pleading,” but “it does not specify the conditions of its substantive adequacy, that is, its legal merit.” No. 16-31034-CV (Aug. 24, 2017) (citations omitted).

The process server’s affidavit in Norris v. Causey said that (1) the defendant’s wife “yelled through the door that she would not accept service, and (2) he then posted the summons and complaint on the defendant’s door. The affidavit did not say, however, that these events occurred on the same day, which led to a remand for additional fact-finding by the district court: “It turns out that whether the yelling and posting happened the same day matters a great deal. Leaving a summons and complaint at a residence door, unaccompanied by a refusal to accept service, is not effective service under Rule 4. . . .   This means that if Garry’s wife was not present, let alone refusing service, on the day the process server posted the documents on the door, Garry’s service was likely defective. On the other hand, a defendant’s refusal to accept service is not rewarded when the process server announces the nature of the documents and leaves them in close proximity to the defiant defendant.” No. 16-30339 (Aug. 22, 2017).

Yahoo cancelled its contract with SCA related to a billion-dollar “perfect bracket contest” for 2014’s March Madness. The parties disputed the appropriate termination payment, defined in the contract as “50% of the fee” – Yahoo contending the “fee” was 50% of the $1.1 million deposit that it already paid SCA; SCA contending that the “fee” was the rull $11 million contract fee, credited for the deposit. The Fifth Circuit reversed and rendered judgment for SCA, noting that the contract “clear[ly] incorporated by reference two invoices that specified the $11 million figure,” and identifying several other contract provisions consistent with SCA’s reading. The issue of what documents comprise a contract, and the related legal issue of when a court may consider “parol” evidence, continues to be a frequent – if not the most frequent – point of disagreement between the Fifth Circuit and trial courts. SCA Promotions v. Yahoo!, No. 15-11254 (Aug. 21, 2017).

After a pipeline breach, a federal regulator penalized ExxonMobil for violating safety rules. The Fifth Circuit reversed, finding, inter alia, that the agency’s interpretation of the “textually unambiguous” regulation required no deference under Auer v. Robbins, 519 U.S. 452 (1997). Specifically, the regulation said that pipeline operators “must consider” “all risk factors that reflect the risk conditions on the pipeline segment.” Concluding (presumably, after due consideration), that “consider” meant “to think about carefully,” the Court concluded that the regulation “unambiguously serves to informs a pipeline operator’s careful and deliberate decision-making process rather than to compel a particular outcome . . . ” This conclusion undermined the substantive basis of the agency’s liability determination, and led to reversal in substantial part. ExxonMobil Pipeline Co. v. U.S. Dep’t of Transp., No. 16-60448 (Aug. 14, 2017).

The issue in Longhorn Gasket & Supply Co. v. U.S. Fire Ins. Co. was whether asbestos was within the scope of a pollution exclusion that applied to  “irritants, contaminants or pollutants.” Acknowledging a dearth of Texas case law on the subject, and lack of a clear trend in opinions nationally, the Fifth Circuit concluded that asbestos was an “irritant” under the commonly-accepted meaning of that term, and the underlying claims thus fell within the scope of the exclusion. The Court then held that because “[w]e have concluded that the pollution exclusion applies . . . the burden shifts to [the insured] to attempt to apply an exception to the exclusion”; in this case whether “such discharge, dispersal, release or escape is sudden and accidental.” No. 15-41625 (Aug. 18, 2017).

I was interviewed today by Fox 4 Dallas about social media and hate speech, in light of recent events in Charlottesville.

In a return trip to the Fifth Circuit, the defamation case of Block v. Tanenhaus again sidestepped the question of whether state anti-SLAPP laws apply in federal courrt, allowing that elephant to remain in the Erie room for awhile longer. Here, assuming that the Lousiana state law applied, the panel reversed and remanded the dismissal of a professor’s claim that the New York Times misquoted him. Jess Krochtengel summarizes the underlying Erie question and its implications in a recent Law360 article. No. 16-30966 (Aug. 15, 2017).

Five LPCH attorneys are on 2018’s list of Best Lawyers in America!

The trial court in Oprex Surgery v. Sonic Automotive Employee Welfare Benefit Plan dismissed Oprex’s complaint for failure to comply with a discovery order; the Fifth Circuit reversed, finding, inter alia:

• A record of “delay or contumacious conduct” was not established when “Sonic raised no complaint, in a motion to compel or otherwise, regarding the adequacy of Oprex’s responses unitl one hour before the conference” at which dismissal occurred;
• The time and expense of participating in conferences is not “prejudice to ‘the opposing party’s preparation for trial”; and
• “. . . given the important due process concerns implicated by a dismissal with prejudice, the court should at leat consider the efficacy of lesser sanctions first”

No. 16-20734 (Aug. 10, 2017, unpublished).

The common law of contracts was forever shaped by the good ships Peerless (one of which appears to the right), which both sailed into Liverpool in late 1863 bearing loads of cotton from Bombay. A modern counterpoint appears in GIC Services v. Freightplus USA , in which the parties were both talking about a tugboat called REBEL (left), but disagreed over what Nigerian city it was supposed to arrive in after a trans-Atlantic journey from Houston. The core problem with the “meeting of the minds,” however, was not among the parties, but among their counsel and the trial court, as the calculation of damages for the prevailing party rested almost entirely on one invoice. The Fifth Circuit panel split 2-1 over whether an effective stipulation had been reached about the authenticity of the invoice, providing a cautionary note to all trial lawyers about the effect and scope of agreements reached “on the fly” in open court. No. 15-30975 (August 8, 2017).

In a topic also addressed on 600Commerce today, the interplay of criminal proceedings and civil litigation can be challenging. The conclusions of In re Grand Jury Subpoena summarized when a stay of civil cases can be required: “It is not necessary that the movant for civil discovery specifically intend to circumvent the rules of criminal discovery: a movant with the ‘purest of motives’ would, in the event the civil case wa allowed to proceed, gain access to materials otherwise unobtainable and, in so doing, potentially harm the related criminal investigation. . . . If not enjoined, further proceedings in state court, including civil discovery, could undermine the federal criminal investigation into [Company]. Furthermore, [Company] will not be unduly burdened if the civil proceedings do not proceed for the duration of the criminal investigation: ownership of the electronic devices can be determined after the investigation is complete, and the devices returned to [Company] if its ownership is established.” No. 16-10181 (Juy 19, 2017).

Among other holdings in a hard-fought wrongful foreclosure action, the Fifth Circuit made two observations about the FDCPA in Mahmoud v. DeMoss Owners Association. First, while language on the first page of a letter suggested that action was required in less than 30 days, the next page of that letter clearly gave the required 30-day action period in three places, and thus did not violate the FDCPA.  Second, even though “a small portion of the debt may have been time-barred,” in the context of a non-judicial foreclosure controlled by state law, that matter alone would not create an FDCPA violation. A dissent had a different view of the point, and “would hold instead that, consistent with the text and spirit of the Act, demanding full repayment of a partiaally time-barred debt under the threat of forecloosure – implying that the entirety of the debt is legally enforceable – violates the FDCPA.” No. 15-20618 (July 28, 2017).