A Louisiana mineral lease provided that the lessee would pay the lessor “one-eighth (1/8) of the market value at the mouth of the well of the gas so sold . . . .”  Cimarex Energy v. Chastant, No. 13-30049 (Aug. 2, 2013, unpublished).  The lessor claimed that the payment obligations extended to the benefits of a hedging program operated by the lessee/producer.  The Fifth Circuit agreed with the district court that it did not: “[T]he mineral lease between Cimarex and Chastant does not require Cimarex to pay royalties on amounts generated through its separate financial activities.  The Court distinguished a case about royalties on take-or-pay payments, noting: “Take-or-pay is, for these purposes, an alternative to actual production, or effectively a minimum production for purposes of rights under the lease.  Hedging transactions do not serve that purpose.  They are supplements to production, not substitutes.”

The Fifth Circuit has affirmed in all respects the high-profile corruption convictions associated with former Dallas City Councilman Don Hill: United States v. Reagan et al. (August 2, 2013).

A remedy provision of the Anti-Kickback Statute provides: “The Federal Government in a civil action may recover from a person that knowingly engages in conduct prohibited by section [53] of this title a civil penalty equal to— (A) twice the amount of each kickback involved in the violation; and (B) not more than $[11,000] for each occurrence of prohibited conduct . . . .”  41 U.S.C. § 55(a)(1). In United States v. Kellogg Brown & Root, the Fifth Circuit found that the provision allows a suit against an employer for its employees’ acts.  No. 12-40447 (July 19, 2013).  The Court grounded its analysis in common-law agency principles, and distinguished an earlier case that imposed a “purpose to benefit [the] employer” requirement in a somewhat analogous situation under the False Claims Act, United States v. Ridglea State Bank, 357 F.2d 495 (5th Cir. 1966).

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

A heavy, awkwardly-shaped boiler fell while being loaded onto a ship and sustained significant damage.  The issue in Pt. Jawamanis Rafinasi v. Coastal Cargo Co. was whether a limitation of liability in the Carriage of Goods at Sea Act, inapplicable by its terms to this accident on shore, was nevertheless incorporated in the parties’ contract.  No. 12-30668 (July 24, 2013, unpublished).   The Court found that the limitation applied because it was included in the shipper’s bill of lading, even though the purchaser of the boiler lacked actual knowledge of the bill’s terms.  “Case law in the Fifth Circuit demonstrates that an unissued bill of lading nevertheless binds the parties.”  (citing, inter alia, Luckenbach S.S. Co. v. American Mills Co., 24 F.2d 704, 705 (5th Cir. 1928)).

A preliminary injunction forbade the Department of Health and Human Services from “acting in accordance with the Notice of Termination . . . relative to [a nursing facility’s] Medicare and Medicaid Provider Agreement”.  After the injunction expired, HHS proceeded with termination.  Oaks of Mid City Resident Council v. Sebelius, No. 12-30860 (July 17, 2013).  The Fifth Circuit reversed a contempt finding against HHS, agreeing with the government’s position that the injunction was designed to pause the termination process but not forbid a later termination unrelated to the specified Notice.  The Court’s approach echoes that of another recent case vacating a contempt order against the federal government, Hornbeck Offshore Services v. Salazar, No. 11-30936 (Nov. 27, 2012, revised April 9, 2013).

A technical opinion about calculation of a Clean Water Act penalty for a wastewater spill offers two points of broader interest.  United States v. Citgo Petroleum, No. 11-31117 (July 17, 2013).  First (in the context of a remand for other reasons), as to whether the defendant’s acts amounted to gross negligence rather than simple negligence, the Fifth Circuit emphasized the importance of the defendant’s long delay in taking remedial action.  “In our view, though, almost winning a highly risky gamble with the environment does not much affect the egregiousness of having been gambling in the first place.”  Second, in reviewing a challenge to the amount of wastewater at issue under the “clear error” standard, the Court reminded: “The government’s argument on this issue is essentially that the court credited the wrong expert.  ‘Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous.'”

In United States v. Transocean Deepwater Drilling, the Fifth Circuit reviewed the standards for a stay pending appeal.  No.13-20243 (July 23, 2013, unpublished).  The case involved an administrative subpoena related to the Macondo accident.  The Court first analyzed the interplay between the typical four-factor test (likely success on the merits, irreparable injury, injury to the nonmovant, and the public interest) and a variant from Ruiz v. Estelle, 650 F.2d 555 (5th Cir. Unit A June 1981), which required “a substantial case on the merits when a serious legal issue is involved,” noting that the Ruiz analysis applies only if the other three factors are “heavily tilted in the movant’s favor.”  Here, the Court found a failure to satisfy both tests: (1) it assumed that the movant had a “substantial case,” in large part because the district court expressly said so in denying it relief; but (2) found no irreparable injury from providing the requested documents; and (3) found a public interest in proceeding with their production, as there had already been a lengthy delay.

In Escamilla v. M2 Technology, the individual owner of a business sued to enforce the “M2” trademark owned by his business.  No. 12-41183 (July 16, 2013, unpublished).  The Fifth Circuit affirmed the dismissal of the claim for failure to join a necessary party, as the individual did not join his company as a party plaintiff, thus exposing the defendant to potential repetitive future litigation.  (This decision appears to have been rooted in avoiding the cost of having counsel appear for the company.)  The Court rejected the individual’s argument that a future suit would be barred by claim preclusion, noting the clear separation in Delaware corporate law between a business entity and its shareholders.

An insurance company complained that its counsel allowed entry of a consent judgment in a Louisiana case that wrongly imposed $400,000 in liability on it that another insurer should have covered. The company, based in South Carolina, sued for legal malpractice in Texas, the location of the third-party administrator who had overseen the counsel. Companion Property & Casualty v. Palermo, No. 12-11255 (July 17, 2013).  The Fifth Circuit found that the firm’s relationship with the TPA was not enough to establish general jurisdiction, and also found no basis for personal jurisdiction in Texas over the Louisiana-based firm.  The counsel was in Louisiana, the alleged malpractice occurred in Louisiana, and the insured was in South Carolina: “Although [the firm’s] contacts with [the TPA] are factually related – and perhaps integral – to the substance of [Plaintiff’s] claim, the alleged malpractice does not arise from a breach of some duty owed to [the TPA].”

The plaintiff in Asadi v. G.E. Energy (USA), LLC was terminated after making an internal report of a potential securities law violation.  No. 12-20522 (July 17, 2013).  The Fifth Circuit affirmed the Rule 12 dismissal of his whistleblower claim based on Dodd-Frank: “Based on our examination of the plain language and structure of the whistleblower-protection provision, we conclude that the whistleblower protection provision unambiguously requires individuals to provide information relating to a violation of the securities laws to the SEC to qualify for protection . . . . (emphasis in original)”  The Court acknowledged a more expansive SEC regulation on the point, but found it was not entitled to Chevron deference given the clarity of the statute.

Deep Marine Technology provided construction support vessels to BHP, an offshore drilling company.  A BHP contractor sued for injuries arising from an “offshore personnel basket transfer” between a Deep Marine vessel and a BHP platform.  There was no dispute that the parties’ Master Services Agreement required BHP to defend and indemnify Deep Marine from this claim.  The issue in Duval v. Northern Assurance Co. was whether BHP had to defend and indemnify Deep Marine’s insurers, who were joined to the litigation under Louisiana’s Direct Action Statute.  No. 12-31102 (July 5, 2013).  The Fifth Circuit noted that indemnity provisions are strictly construed and that: “The parties could have included the Contractor’s insurers within the definition of ‘Contractor Group,’ as parties in other cases have done . . . . ” (citation omitted).  Based on that conclusion, the Court rejected several theories about how the insurers could benefit from the indemnity provision, and affirmed summary judgment against them.

The plaintiff in Butler v. Taser International sought to amend a negligence suit to add a new fraud claim, after the deadline for motions to amend pleadings.  No. 12-11026 (July 10, 2013, unpublished).  In affirming the denial of leave to amend, the Fifth Circuit noted: “In his first amended complaint, Officer Butler pled a litany of facts that could have supported claims for fraudulent inducement and failure to warn. He alleged that TI had made false representations, and that TI’s warnings regarding the dangers of a Taser shock were inadequate.”  In other words, a point that weighs against a finding of prejudice — that the matters raised by the new pleading were already in issue — also weighed against a finding of good cause and justified denial of leave, especially after the deadline.

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

The borrower in Martin-Janson v. JP Morgan Chase alleged waiver and promissory estoppel claims arising from a foreclosure — claims which the Fifth Circuit has not encouraged in 2013 opinions.  Here, however, after reviewing the plaintiff’s five allegations about the specific statements made, the Court reasoned: “Based on the foregoing factual allegations, Martin-Janson asserts that she seeks discovery to reveal either the draft loan modification agreement that JPMorgan allegedly prepared, or the terms of her promised modification based on the lender’s standard formulae. In these ways, Martin-Janson argues, she would be able to prove that JPMorgan ‘promise[d] to sign a written agreement which itself complies with the statute of frauds,’  Viewing Martin-Janson’s factual allegations, and the reasonable inferences to be drawn therefrom, in the light most favorable to her, we conclude that she has pled a plausible promissory estoppel claim that potentially avoids JPMorgan’s statute of frauds defense.”  (citations omitted).  Accordingly, the Court reversed a Rule 12 dismisal of the promissory estoppel claim, while affirming as to waiver. No. 12-50380 (July 15, 2013, unpublished). 

The Fifth Circuit released a revised opinion on July 12, 2013 in Boudreaux v. Transocean Deepwater, No. 12-30041.  The holding is the same as its original opinion from March 2013, finding that a Jones Act employer who establishes a defense to ongoing “maintenance and cure” liability because of a seaman’s dishonesty does not have a restitution claim for benefits already paid.  In the new opinion, the dissenting judge now separately concurs, while the majority revises its historic analysis somewhat and notes the effect of the parties’ “bracketed settlement” on the way the issue was presented to the Court.

The contract between Anadarko (oil producer) and Williams Alaska (refinery operator) had monthly invoicing, which they customarily “trued up” the following month to reflect the findings of an independent third party about the quality of oil transported.  After their contract terminated, FERC discovered an error in how the quality of oil was determined. The issue in Anadarko Petroleum v. Williams Alaska Petroleum was whether the compensation for that error — an almost $9 million credit to Williams Alaska by the third party — was in turn owing to Anadarko.  No. 12-20716 (July 10, 2013).  In addition to other holdings unique to the parties’ contract, the Fifth Circuit reminded that under the Texas UCC: “Although the terms of a written agreement may not be contradicted by contemporaneous or antecedent evidence, terms may be explained by course of dealing or course of performance.”  Here, the parties “consistently made [true-up] adjustments,” supporting a reading that favored Anadarko, and the Court reversed and rendered judgment for Anadarko for the $9 million credit amount.

2013 has seen a steady stream of unpublished opinions favoring mortgage servicers, followed by a published opinion affirming a MERS assignment, and now a second published opinion rejecting arguments about the alleged “robosigning” of assignment documents.  In Reinagel v. Deutsche Bank, a suit arising out of foreclosure on a Texas home equity loan, the Fifth Circuit held: (1) borrowers could challenge the validity of assignments to the servicer, since they were not asserting affirmative rights under those instruments; (2) alleged technical defects in the signature on the relevant assignment created rights only for the servicer and lender, not the borrower; (3) the assignment did not have to be recorded, mooting challenges to defects in the acknowledgement; and (4) a violation of the relevant PSA related to the transfer of the note did not create rights for the borrower.  The opinion concluded with two important caveats: it was not deciding whether the Texas Supreme Court would adopt the “note-follows-the-mortgage” concept, and it reminded: “We do not condone ‘robo-signing’ more broadly and remind that bank employees or contractors who commit forgery or prepare false affidavits subject themselves and their supervisors to civil and criminal liability.”  735 F.3d 220 (5th Cir. 2013).

Among several other holdings in Clayton v. ConocoPhillips Co., the Fifth Circuit agreed that state law claims about benefits due under a severance plan were preempted by ERISA, when “an ongoing administrative program” is necessary because of discretion in the plan about eligibility, and when the plan is not fairly characterized as “a one-time, lump-sum payment triggered by a single event.” No. 12-20102 (July 3, 2013).

“The court subordinated the equities of a particular situation to the overmastering need for certainty in the transactions of commercial life.”  Benjamin Cardozo, The Growth of the Law 111 (1924).  In Medco Energi US, LLC v. Sea Robin Pipeline Co., the plaintiff — a natural gas producer — argued that the defendant pipeline company had misrepresented how long it would take to make repairs after Hurricane Ike.  No. 12-30791 (July 2, 2013).  The Fifth Circuit found this claim preempted by federal law under the “filed rate” doctrine, under which a rate filed with FERC is conclusive “[e]ven if a rate is misrepresented to a customer and the customer relies on that rate . . . .”  (citing AT&T v. Central Office Telephone, 524 U.S. 214 (1988).  Otherwise, “[b]ecause [plaintiff] only paid for interruptible service subject to these provisions, allowing recovery for damages incurred when it could not use [defendant’s] pipeline would conflict with the interruptible rate and the provisions of the [filed] tariff.”

In Nevada Partners Fund LLC v. United States, the Fifth Circuit affirmed the district court’s approval of several IRS rulings about investment arrangements.  No. 10-60559 (June 24, 2013).  The thorough opinion details a “straddle trade” investment, which in theory can generate profit, but here “as designed and carried out, [the trades] simply could not produce a profit; they were calculated and managed to produce offsetting gains and losses.”  Various penalties based on the partnerships’ negligence and lack of care were also affirmed.

Bain Cotton Co. v. Chesnutt Cotton Co. involved a challenge to an arbitration award based on the arbitrators’ denial of discovery.  No. 12-1138 (June 24, 2013, unpublished).  In affirming the district court’s rejection of the challenge, the Fifth Circuit stated: “This appeal presents a quintessential example of a principal distinction between arbitration and litigation, especially in the scope of review. Had this discovery dispute arisen in and been ruled on by the district court, it is not unlikely that the denial of Bain’s pleas would have led to reversal; however, under the ‘strong federal policy favoring arbitration, judicial review of an arbitration award is extremely narrow.’”

The Fifth Circuit took the atypical step of writing a short opinion about why it granted a petition for review of a remand order under CAFA in Opelousas General Trust Authority v. Multiplan, Inc., No. 13-90027 (June 28, 2013).  CAFA jurisdiction has a “local controversy” exception, an element of which is that the putative class seeks “significant relief” from an in-state defendant.  In that context, the Court said: “We have yet to fully explore the meaning of ‘significant relief” in this context. Defendants argue that we should grant them leave to appeal so that we may determine ‘whether a defendant which is not a going concern and which will not satisfy any judgment against it can be a defendant from whom “significant relief is sought” . . . .’ We GRANT their petition so that we may consider the question.”

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

James v. State Farm involved the appeal of summary judgment for the insurer in a bad faith case brought under Mississippi law, in which State Farm “tendered the policy limit on its uninsured motor vehicle coverage to [Appellant] nearly thirty months after [she] was injured in a car accident.”  No. 11-60458 (June 21, 2013).  The majority opinion reversed in part, working through the delay and finding that State Farm lacked a justification for delay during certain portions of the thirty-month period.  The dissent took a different approach, stating: “The district court’s more holistic approach of evaluating whether State Farm’s actions throughout the course of its investigation rose to the level of an independent tort is more in line with precedent.”

In Temple v. McCall, the Fifth Circuit confronted a series of property conveyances with ambiguous language about whether mineral rights were included.  No. 12-30661 (June 20, 2013).  The Court affirmed, approving the weight given by the district court to expert testimony about “customary interpretation” of similar deed language in Louisiana.  The Court discussed the proper weight that Erie gives to an intermediate state appellate opinion, but ultimately found the relevant Louisiana case distinguishable on its facts.  (The proper role of extrinsic evidence in contract cases is a recurring issue in the Court’s diversity cases, although the express finding of ambiguity in this dispute simplifed the analysis on that point.)

In its first published opinion of 2013 about the merits of a wrongful foreclosure claim, the Fifth Circuit rejected the plaintiff’s “show-me-the-note” and “split-the-note” arguments.  Martins v. BAC Home Loans Servicing LP, 722 F.3d 249 (5th Cir. 2013).  In footnote 2, the Court noted that much of the relevant law is federal because of diversity between the borrower and the foreclosing entity.  As to the first theory, the court cited authority that allowed an authenticated photocopy to prove a note, and said: “We find no contrary Texas authority requiring production of the ‘original’ note.”  As to the second, acknowledging some contrary authority, the Court reviewed the relevant statute and held: “The ‘split-the-note’ theory is . . .  inapplicable under Texas law where the foreclosing party is a mortgage servicer and the mortgage has been properly assigned.  The party to foreclose need not possess the note itself.”  An unpublished opinion, originally released a day before Martins, was revised to closely follow its analysis and result.  Casterline v. OneWest Bank, No. 13-50067 (revised July 5, 2013, unpublished).

In Morlock LLC v. JP Morgan Chase, the plaintiff disputed Chase’s ability to foreclose.  No. 12-20623 (June 4, 2013, unpublished).   Its first claim was a suit to quiet title, as to which the Fifth Circuit found that the plaintiff’s challenge to a MERS assignment did not impugn the original Deed of Trust and thus did not present a title question.  Its second claim was for wrongful foreclosure, which can require the party seeking foreclosure to establish its standing.  Here, the Court found that the MERS assignment was facially valid and the plaintiff’s arguments about the signatory’s authority were not substantiated.

The salesman’s compensation guidelines in Kellerman v. Avaya, Inc. said on the first page:  “Avaya Inc. has the right to amend, change, or cancel the sales compensation policies solely at its discretion and without prior notice, except in countries where it is a violation of applicable law.”  Later provisions had more detail about the types of decisions reserved to Avaya.  The salesman claimed that the company had manipulated its revenue recognition to reduce his compensation, but the Fifth Circuit affirmed a summary judgment for the company: “where an employer exercises rights reserved in the contract[,] there can be no breach of contract.” (citing Nichols v. Enterasys Networks, 495 F.3d 185, 186-87 (5th Cir. 2007) (reviewing similar compensation arrangement)).

The parties arbitrated whether certain offshore oil dealings violated RICO.  Grynberg v. BP, PLC, No. 12-20291 (June 7, 2013, unpublished).  The arbitrator found that the claimant did not establish damage and dismissed that claim, noting that he lacked authority to determine whether any criminal violation of RICO occurred. The Fifth Circuit affirmed the dismissal of a subsequent RICO lawsuit on the grounds of res judicata, finding that the arbitrator’s ruling was on the merits and not jurisdictional.

“Mandamus petitions from the Marshall Division are no strangers to the federal courts of appeals.”  In re Radmax, Ltd., No. 13-40462 (June 18, 2013).  In Radmax, the Fifth Circuit found a clear abuse of discretion in declining to transfer a case from the Marshall Division of the Eastern District of Texas to the Tyler Division.  It found that the district court incorrectly applied the eight relevant 1404(a) factors, giving undue weight to potential delay and not enough weight to witness inconvenience, and quoting Moore’s Federal Practice for the principle that “‘the traditional deference given to plaintiff’s choice of forum . . . is less’ for intra-district transfers.”  Accordingly the Court granted mandamus pursuant to In re Volkswagen, 545 F.3d 304 (5th Cir. 2008) (en banc).  A pointed dissent agreed that the 1404(a) factors favored transfer but saw no clear abuse of discretion, noting that there was no clear Fifth Circuit authority on several of the points at issue in the context of intra-district transfers.  “The majority persuasively fills those doctrinal gaps with citations to Moore’s Federal Practice; that treatise may prove convincing, but it is not binding law.”

On June 18, two separate panels — one addressing a chemical spill, the other a vessel crash into an oil well — reached the same conclusion in published opinions:  when an insured fails to give notice within the agreed-upon period, as required by a “negotiated buyback” endorsement to a policy, the insurer does not have to show prejudice to void coverage.   Settoon Towing LLC v. St. Paul Surplus Lines Ins. Co., No. 11-31030; Starr Indemnity & Liability Co. v. SGS Petroleum Service Corp., No. 12-20545.  The notice provision was seen as part of the basic bargain struck about coverage.  Both opinions — especially Starr, arising under Texas law — recognized the continuing viability of Matador Petroleum v. St. Paul Surplus Lines Ins. Co., 174 F.3d 653 (5th Cir. 1989), in this situation, notwithstanding later Texas Supreme Court cases requiring prejudice in other contexts arising from the main body of a policy.  Settoon went on to address other issues under Louisiana insurance law, including whether the Civil Code concept of “impossibility,” which focuses on a failure to perform an obligation, applies to a failure to perform a condition precedent such as giving notice.

After a jury trial, the plaintiff won judgment of $336,000 for breach of a joint venture to bid a contract with the Air Force about upgrades to the storied Paveway laser-guided bomb program.  X Technologies v. Marvin Test Systems, No. 12-50230 (June 11, 2013).  On the issue of causation, the Fifth Circuit quickly dismissed two challenges to a key witness’s qualifications since he was not testifying as an expert, and also dismissed the effect of a claimed impeachment in light of the full record developed at trial.  The Court went on to affirm a directed verdict on a claimed defense of prior breach, finding that the agreement only imposed a one-way bar on multiple bids for the contract, and to affirm the judgment of breach, noting multiple uses of “team” in the record to describe the parties’ relationship.

Continuing a steady stream of rulings in favor of lenders and mortgage servicers in foreclosure cases, the Fifth Circuit affirmed summary judgment for the defendant in  Watson v. Citimortgage, No. 12-41009 (June 10, 2013, unpublished).  Rejecting waiver and estoppel arguments about the servicer’s conduct, the Court stressed the “anti-waiver” provision in the loan instruments, the lack of definiteness of the servicer’s alleged promises, and the lack of specificity about alleged violations of the Texas fair debt collection statutes.

In Fontenot v. Watson Pharmaceuticals, a long-running products liability and medical malpractice case about a transdermal pain patch, plaintiffs sought to add nondiverse health care providers to the case after removal.  No. 12-30711 (June 10, 2013).  The district court remanded pursuant to 28 U.S.C. § 1447(e).  The Fifth Circuit dismissed for lack of appellate jurisdiction, concluding that a remand for lack of subject jurisdiction was unreviewable under Thermtron just like a jurisdictional remand under 1447(c), and noting that all other circuits facing the issue reached the same conclusion.  The Court also found that the joinder ruling that led to the jurisdictional issue was unreviewable as a collateral order.

The defendant in Bowles v. Ranger Land Systems did not have a bank account, registered agent, or office in Texas.  No. 12-51255 (June 16, 2013, unpublished).  As a defense contractor, the company had a handful of employees at three Army bases in Texas, but that presence was not substantial enough to create general jurisdiction.  (citing Johnston v. Multidata Systems Int’l Corp., 523 F.3d 602, 612-13 (5th Cir. 2008) (presence of two employees, who reported to out-of-state supervisor, was “certainly a regular contact with Texas” but was “not substantial enough to create a general business presence in Texas”)).  The Fifth Circuit also found no abuse of discretion in denying further jurisdictional discovery based on these allegations.

A dispute about guaranty obligations related to the purchase of a blimp was removed to federal court.  The district court granted a motion to compel arbitration, stayed the case, and administratively closed it.  McCardell v. Regent Private Capital LLC, No. 12-31089 (June 7, 2013, unpublished).  The Fifth Circuit reminded that administrative closure does not create a final judgment, and thus dismissed for lack of appellate jurisdiction over the interlocutory appeal.

Several companies resolved their responsibility for environmental litigation in a series of three agreements.  The second one (the “Merger Agreement”) had a “hold harmless” provision between two parties; the third (the “Master Settlement Agreement”) did not.  Alford v. Kuhlman Electric Corp., No. 11-60728 (May 24, 2013).  The beneficiary of the hold harmless provision in the Merger Agreement argued that the Master Settlement Agreement incorporated that provision via this language: “BorgWarner shall make payments of the Settlement Funds on behalf of [KEC] pursuant to the [Merger Agreement.]”  Noting that “[t]he term ‘pursuant to’ has multiple meanings and its use does not automatically trigger incorporation of the referenced agreement or statute,” the Fifth Circuit found that this “mere reference” did not incorporate the Merger Agreement.  The Court also rejected a similar argument based on a provision in the MSA which said it should not “be construed to impair, change, or modify any separate agreement” among the parties.

The case of Nexstar Broadcasting v. Time Warner Cable presented the appeal of the denial of a preliminary injunction, sought by an operator of TV stations (and creator of content) against a large cable company.  No. 12-10935 (May 30, 2013, unpublished).  The dispute focused on whether the defendant could relay signals, originally created by the plaintiff, out of local broadcast markets.  The key contract provision said: “[Nexstar] hereby gives [Time Warner] its consent, pursuant to Section 325(b) of the Act and the FCC Rules, to the nonexclusive retransmission of the entire broadcast signal of each Station (the “Signal”) over each System pursuant to the terms of this Agreement,” with “System” defined to mean all Time Warner Systems, with no geographic limitation.  Citing Bryan Garner’s dictionary of legal usage, the Fifth Circuit held: “The adverb ‘each’ is distributive—that is, [it] refer[s] to every one of the several or many things (or persons) comprised in a group.”  Accordingly, the grant of authority included all Time Warner systems, and no abuse of discretion in denying injunctive relief was found.

In State of Mississippi v. AU Optronics Corp., the Fifth Circuit reversed a remand order, finding that a suit brought to protect consumers by the Mississippi Attorney General was a “mass action” under CAFA. 701 F.3d 696 (2012).  Based on the analytical framework of Louisiana ex rel Caldwell v. Allstate Insurance, 536 F.3d 418 (5th Cir. 2008), the Court concluded that the numerical requirements of CAFA for a mass action were satisfied, and the “general public policy” exception in the statute was not.  A concurrence endorsed the outcome but suggested that the “claim-by-claim” framework of Caldwell effectively mooted the public policy exception.  The Supreme Court has now granted certiorari in this case to resolve a circuit split about how CAFA should treat “parens patriae” actions.

In Homoki v. Conversion Services, a check processing company sued its sales agent and a competitor.  No. 11-20371 (May 28, 2013).  It won judgment for $700,000 against the competitor for tortious interference with the sales agent’s contract with the company, and $2.15 million against the agent for past and future lost profits.  The company and competitor appealed.  First, the Fifth Circuit — assuming without deciding that the plaintiff had to show the competitor’s awareness of an exclusivity provision in the agent’s contract — found sufficient evidence of such knowledge in testimony and the parties’ course of dealing, and affirmed liability for tortious interference.  Second, the Court found that the plaintiff’s “experience in managing his business for sixteen years” supported his damages testimony, and that “[w]hile [plaintiff]’s presentation of its damages evidence was far from ideal,” also found sufficient evidence of causation on the interference claim.  Finally, the Court found that the plaintiff had given adequate notice of its claim of conspiracy to breach fiduciary duties (the joint pretrial order was not signed by the judge), but the plaintiff waived jury trial on that issue by not requesting a damages question — particularly given the significant dispute about causation in the evidence presented.

Plaintiff sued for violations of Louisiana’s version of RICO; defendants removed and moved to dismiss.  The trial court said in part: “there is no standing, there is no jurisdiction and the court will grant the Motion to Dismiss pursuant to 12(b)(1).”  Cox, Cox, Filo, Camel & Wilson LLC v. Sasol North America, Inc., No. 12-31123 (May 24, 2013, unpublished).  The Fifth Circuit found error in dismissing with prejudice, noting that “to dismiss with prejudice under Rule 12(b)(1) is to disclaim jurisdiction and then exercise it.”  The Court also found it unclear whether the trial court had dismissed on constitutional standing grounds or standing under the racketeering statute, “[b]ut instead of rewriting the district court’s order to affirm on the merits,” it vacated and remanded for further proceedings consistent with its opinion.

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

The case of Woman’s Hospital Foundation v. National Public Finance Guarantee Corp. turned on a claimed conflict between clause 2.2(f) of a bond insurance contract, which capped the amount of “indebtedness” the borrower could assume, and clause 2.6, which gave the insurer a right to consent to new “obligations.”  No. 12-30701 (May 14, 2013, unpublished).  The Fifth Circuit affirmed dismissal of the borrower’s claims, agreeing that as the instrument was written, the cap applied the the borrower’s overall financial condition and “indebtedness,” of which “obligations” were the subset that was secured by the insurer.  While unpublished, the opinion reminds of the technical, transaction-specific definitions that sophisticated deal instruments can give to terms such as “obligations.”

In Kenyon International Emergency Services, Inc. v. Malcolm, the Fifth Circuit found no abuse of discretion in an award of attorneys fees under a Texas statute to the defendants in a suit to enforce a noncompetition agreement. No. 12-20306 (May 14, 2013, unpublished).  The Court clarified that “the key determination is [plaintiff’s] knowledge of reasonable limits, not . . . its knowledge of the reasonableness of the agreement” (emphasis in original).  As it saw the record, the plaintiff’s CEO testified that the restrictions “were worldwide, overreaching in scope of activity, and basically indefinite in time.”  The Court also reversed a sanction on the plaintiff’s lawyer related to the unsealed filing of a “sexually-explicit Internet chat,” reminding that “[i]ssuing a show-cause order is a mandatory prerequisite to imposing monetary sanctions sua sponte,” and finding that the lawyer did not have an improper purpose in making the filing and thus did not fall within Rule 11.

In Colonial Freight Systems v. Adams & Reese, the Fifth Circuit affirmed summary judgment for a law firm on a malpractice claim and for unpaid fees.  No. 12-30853 (May 15, 2013, unpublished).  The plaintiff claimed, under Louisiana law, that the firm’s “negligent failure to advise the company of its right to a jury” was malpractice.  The Court rejected that claim because the plaintiff could only speculate about any loss resulting from that alleged failure.  (In the context of criminal law, a different framework applies because the policies at play are different, see United States v. Mendez, 102 F.3d 126 (5th Cir. 1996)).

The plaintiff served its suit on a guaranty obligation by using the Texas longarm statute, which requires that the plaintiff provide the Texas Secretary of State with the defendant’s “home or home office address.”  Tex. Civ. Prac. & Rem. Code §§ 17.044(a), 17.045(a).  The defendants in Moody National Bank v. Bywater Marine alleged that the plaintiff had only served a “mailing address,” but the Fifth Circuit disagreed, holding that service on the address specified in the parties’ contract for service of process satisfied the statute.  No. 12-40946 (May 14, 2013, unpublished) (citing Mahon v. Caldwell, Haddad, Skaggs, Inc., 783 S.W.2d 769, 771 (Tex. App. — Fort Worth 1990, no writ)).

The EPA and its state equivalent sued the owner of the “Big Cajun II,” a coal power plant in Louisiana, seeking penalties, injunctive relief, and remediation of alleged environmental damage.  Louisiana Generating LLC v. Illinois Union Ins. Co., No. 12-30651 (May 15, 2013).  Applying New York law, the Fifth Circuit found that “Claims, remediation costs, and associated legal defense expenses . . . as a result of a pollution condition” potentially encompassed some of the relief sought by the EPA for past environmental problems.  The Court also found that an exclusion for “[p]ayment of criminal fines, criminal penalties, punitive, exemplary or injunctive relief” did not unambiguously exclude coverage for remediation required by an injunction order, reasoning that such a broad reading “would potentially swallow” the coverage for remediation costs.  Having found a duty to defend, the Court did not reach a question about whether New York law allowed indemnification for civil penalties imposed under the Clean Air Act.

In Miller v. Raytheon Co., the Fifth Circuit affirmed liability for age discrimination and affirmed in part on damages.  No. 11-10586 (revised, July 30, 2013).  Among holdings of broader interest in civil litigation, the Court: (1) affirmed the verdict of liability, noting: “Considered in isolation, we agree with Raytheon that each category of evidence presented at trial might be insufficient to support the jury’s verdict.  But based upon the accumulation of circumstantial evidence and the credibility  determinations that were required, we conclude that ‘reasonable men could differ’ about the presence of age discrimination”; (2) reversed an award of mental anguish damages because “plaintiff’s conclusory statements that he suffered emotional harm are insufficient”; and (3) rejected a challenge, based on the Texas Constitution, to the statutory punitive damages cap in the TCHRA.

In Wellogix, Inc. v. Accenture, LLP, LLP the district court entered judgment for the plaintiff — $26.2 million in compensatory damages and $18.2 million in punitives, after a remittitur —  in a trade secrets case about software to make oil exploration more efficient.  No. 11-20816 (May 15, 2013, revised Jan. 15, 2014).  Affirming, the Court: (1) reminded, in the opening paragraph, of the deference due to a jury verdict; (2) detailed the sufficient evidence before the jury of a trade secret, of its inappropriate use by the defendant, of damages, and malice; (3) rejected Daubert arguments about the scope of the plaintiff’s computer science expert’s testimony  and the material considered by its damages expert; and (4) affirmed the punitive damages award because it was less than the compensatory damages and the issue of “reprehensibility” was neutral.  The Court also analyzed aspects of the relationship between trade secret claims and the patent process.  Footnote 4 of the opinion provides a useful guide to the federal courts’ treatment of a “Casteel problem” in Texas jury submissions.