In an instructive review of a products-liability judgment based on expert testimony and a hotly disputed jury instruction, the Fifth Circuit affirmed in Kim v. American Honda Motor Co.:

Honda attempts to escape this jury verdict by arguing the district court erred in three ways: by admitting Plaintiffs’ experts, denying its JMOL motion, and denying its proposed instruction about the nonliability presumption. But it is incorrect on all fronts. The Plaintiffs’ experts based their opinions on reliable methodologies and provided relevant, helpful testimony. As such, there was sufficient evidence for the jury to find Honda liable for the Kims’ injuries. The district court’s application of the Texas statutory presumption of nonliability was also faithful to the statutory text, the precedent of Texas, and the precedent of this Court.

No. 22-40790 (Nov. 7, 2023).

Antero Resoiures Corp. v. C&R Downhole Drilling Inc., an appeal about an $11 million judgment for alleged overbilling in energy production, rejected a second challenge to the plaintiff’s damages calculation in addition to the one discussed yesterday.

Specifically, the appellant argued that the expert’s testimony “was deficient because it did not consider what rates competing drillout providers might have paid. Even if the Robertson companies took longer, so the argument goes, if they charged significantly less than other companies, Antero might have ended up paying less than if it had hired someone else.”

The Fifth Circuit rejected this argument for two related resons:

1. Legal materiality. “[E]vidence of a competitor’s rate is not necessary to prove out-of pocket damages. To show damages, Antero need only prove that the Robertson companies charged it more than the ‘value [Antero] received.’ By billing Antero more than the services it rendered, Kawcak caused Antero to incur out-ofpocket expenses. That is, Antero paid $150,000,000 in exchange for a certain number of days of work. But because the Robertson companies did not actually work on all of the days they billed, the value of the work Antero received was only $138,877,860. The difference in value is the amount overbilled. No reference to competitors’ rates is needed for that statement to be true.”
2. Factual materialty. “[T]he jury was not required to accept Kawcak’s testimony regarding Fortis Energy’s rates. As Antero points out, there are multiple reasons why the jury might not have credited Kawcak’s assertion that Fortis Energy was the only other available drillout provider, and that it would have charged more than the Robertson companies. Kawcak gave the rates strictly from memory, and his credibility was already in question because of his inconsistent answers to previous questions.”

No. 22-10918 (Oct. 31, 2023) (citations omitted).

Antero Resoiures Corp. v. C&R Downhole Drilling Inc. presented a dispue about the calculation of damages in a case about alleged overbilling in energy production. The Fifth Circuit affirmed against a challenge that the plainitff’s expert was not sufficiently precise, holding:

[T]the amount of damages need only be proven “with a reasonable degree of certainty.”  Taylor’s testimony calculated Antero’s out-of-pocket damages to a reasonable degree of certainty, especially when viewing the evidence in favor of the verdict. Taylor followed sound analytical methods to determine how long the Robertson companies should have taken to complete the drillout services. He reviewed the hundreds of completion reports and tens of thousands of invoices, accounting for uncontrollable delays and site-specific conditions. Taylor then compared the time spent to the time taken by previous drillout providers and concluded that the Robertson companies took some percentage longer than those companies. Applied to the rates charged by the Robertson companies, Taylor calculated damages in the amount of $11,122,140. That is a perfectly rational way of approximating overbilling.

No. 22-10918 (Oct. 31, 2023) (citation omitted).

In Chamber of Commerce v. U.S. Sec. & Exch. Comm’n, the Fifth Circuit found that the SEC acted too quickly in enacting a challenged rule, but then allowed it a “do-over” within a specified time:

The SEC acted arbitrarily and capriciously, in violation of the APA, when it failed to respond to petitioners’ comments and failed to conduct a proper cost-benefit analysis. We recognize that “there is at least a serious possibility that the agency will be able to substantiate its decision given an opportunity to do so.” Short of vacating the rule, we therefore afford the agency limited time to remedy the deficiencies in the rule. Because, for the reasons explained, the SEC’s adoption of the Share Repurchase Disclosure Modernization Rule is arbitrary and capricious, the petition for review is GRANTED, and this matter is REMANDED with direction to the SEC to correct the defects in the rule within 30 days of this opinion. This is a limited remand. This panel retains jurisdiction to consider the decision that is made on remand.

No. 23-60255 (Oct. 31, 2023); but cf. Alliance for Hippocratic Medicine v. U.S. Food & Drug Admin., No. 23-10362 (Aug. 16, 2023).

In re TikTok, Inc. returns to the ground plowed by In re Volkswagen in 2008 and In re Radmax in 2014: a mandamus petition about the erroneous denial of a motion to transfer venue under 28 USC § 1404(a). In this case (an intellectual-property case brought against TikTok by another Chinese business), The Fifth Circuit noted several missteps by the district court that justified mandamus relief, inter alia:

• Relative ease of access to sources of proof–source code. “The district court concluded that the source code was accessible as easily in Texas as in California because one member of the California engineering team with the needed security clearance worked remotely in Irving, Texas. But the court erred by comparing Texas with California when it should have been comparing the Western District of Texas with the Northern District of California.”
• Relative ease of access to sources of proof–people. “Neither the district court nor Meishe identifies any record evidence showing that any employee in the Western District of Texas possesses proof relevant to this case. The district court relied on deposition testimony and witness declarations from several of petitioners’ employees. That evidence, however, only establishes that a high-ranking company executive and other employees worked in Austin as members of a “Global Business Solutions Group.” It does not tie those individuals to this case, or show that they do any work related to the video-editing functionality or its implementation, or support the proposition that any of them would have physical proof relevant to the adjudication of Meishe’s claims. … [I]t is pure speculation whether any of petitioners’ Austin-based employees possesses or has access to proof relevant to this case.”
• Court-created delay. “Petitioners filed their § 1404(a) motion timely, yet the district court took no action on the motion for months, with the record showing no adequate reason for the delay. Moreover, the court failed to grant a stay, so the case proceeded through discovery for almost a year. When the court finally ruled, it used the case progress its delay engendered as a reason for denying transfer. If we were to hold that this is a proper exercise of discretion, a district court would have absolute control over whether these two factors weighed in favor of transfer.”

Joining other courts that have made similar additions to their local rules, the Eastern District of Texas now has new local rules dealing with the use of generative AI:

Anytime Fitness LLC v. Thornhill Bros. Fitness LLC, an opinion about a bankruptcy debtor’s power to partially assign a contract, quotes the useful but infrequently heard principle of “Nemo dat quod non habet” (“No one can give what they do not have.”). The principle is quoted in a suprising variety of situations and has inspired academic commentary about its interplay with related ideas.

During an Erie analysis of a Louisiana-law issue, the Fifth Circuit observed: “We are ‘a strict stare decisis court,’ meaning that a prior panel’s interpretation of state law is ‘no less binding on subsequent panels than are prior interpretations of federal law.'” QBE Syndicate 1036 v. Compass Minerals Louisiana, Inc., No. 23-30076 (Oct. 12, 2023). What distinguishes a “strict stare decisis court” from a less-strict one is not entirely clear, but the application of the “rule of orderliness” to state-law issues is well settled.

United States v. Johnson, a criminal case, identifies an erroneous statistics-based argument called “the prosecutor’s fallacy,” and the structure of that argument is of general interest to all litigators:

At Johnson’s second trial, the government introduced expert testimony about a partial DNA sample obtained from a bandana found in the vehicle used in the robbery. Testing yielded inclusionary match statistics capturing the probability that the sample was Johnson’s as compared to a coincidental match of an unrelated person, and the lowest inclusionary match statistic had an error rate of one in 4,100. That is, the expert explained, only one in 4,100 people would match the sample as strongly as Johnson did. But, in the government’s first closing argument, the prosecutor said that Johnson “left very little DNA, but he left just enough to prove that it was him in the front seat when you combine the 1 in 4,100 chance that it’s not him.” Johnson did not object.

 

The prosecutor’s fallacy occurs when “a juror is told the probability a member of the general population would share the same DNA is 1 in 10,000 (random match probability), and he takes that to mean there is only a 1 in 10,000 chance that someone other than the defendant is the source of the DNA found at the crime scene (source probability).” Conflating these two probabilities, as the prosecutor did here, yields “an erroneous statement that, based on a random match probability of 1 in 10,000, there is a 0.01% chance the defendant is innocent or a 99.99% chance the defendant is guilty.” 

No. 22-30421 (Oct. 26, 2023) (citation omitted). Note that the Court did not reverse on this issue in this case. The above graphic was supplied by DALL-E, a feature of the newest iteration of ChatGPT.

In Louisiana Creole cooking, gumbo is a flavorful, roux-based soup made with the ingredients available to the chef. Similarly, Alliance for Fair Board Recruitment v. SEC addresses a host of constitutional issues of the day, including the questions whether a board-membership disclosure requirement by Nasdaq can be “state action”; whether the SEC’s approval of such a rule exceeded its statutory authority (including the subsidiary questions whether that action infringed on state sovereignty or involved a “major question”); and whether the SEC properly assessed the relevant record in reaching its conclusion. Unusual for the Fifth Circuit, the panel consisted of three judges appointed by Democratic presidents. It remains to be seen what the view of the full court will be on these matters. No. 21-60626 (Oct. 18, 2023).

Thanks to a persuasive letter from a typographically sophisticated attorney, the Maryland Supreme Court recently recently modernized its list of acceptable fonts, as follows (omitting Palatino and Equity, however). Thanks to my law partner Greg Brassfield for drawing this to my attention!

Also of general interest, the letter links to an informative series of Tweets about the typography used in the federal courts of appeal.

The question in Armadillo Hotel Group v. Harris was whether Armadillo’s federal-court trade-secrets claim constituted “claim splitting,” given earlier, related litigation between the same defendants and an entity related to Armadillo. The Fifth Circuit agreed with the district court’s conclusion as to the claims, but remanded for further development of the record about the parties:

• Claims: “It is irrelevant that Harris and McDaniel brought suit against AHG Management on the basis of fraudulent inducement related to their employment. Although Harris and McDaniel have a different cause of action than Armadillo, our focus is the relevant claims that arise out of a common nucleus of operative facts.”
• Parties: “The Defendants rely on the similarities in Armadillo’s and AHG Management’s descriptions of themselves, in the shorthand names they use in their respective cases, in their services and customers, and in their descriptions of the confidential information at issue. … Perhaps an inference is reasonable that Armadillo and AHG Management are in privity based on the similarities the Defendants highlight. At the motion to dismiss stage, however, such inferences are inappropriate.”

No. 22-50945 (Oct. 20, 2023) (emphasis in original).

Two recent opinions touch on the important but infrequently addressed topic of judicial recusal. In one, the Fifth Circuit’s Chief Judge identified a complaint against a prominent bankruptcy judge based on an allegedly inappropriate personal relationship. In the other, a panel rejected a request to recuse a district judge from several Deepwater Horizon cases based on a past law-firm partnership.

The remand of Collins v. Yellen, 141 S. Ct. 1761 (2020) did not end well for the plaintiffs, as the district court concluded that they “had not plausibly alleged that the removal restriction” on FHFA’s director caused them harm. The plaintiffs made a valiant effort to bring the case within the scope of a recent Fifth Circuit holding about the Appropriations Clause, but the Fifth Circuit found that its holding in that case did not create a change in the relevant law that was sufficient to overcome the mandate rule. Collins v. Dep’t of the Treasury, No. 22-20632 (Oct. 12, 2023).

The Fifth Circuit reversed the district court and allowed the City of Dallas’s ordinance requiring sexually oriented businesses to shut down by 2 AM, summarizing: “”Under longstanding Supreme Court precedent, the Ordinance is likely constitutional. The City’s evidence reasonably showed a link between SOBs’ late-night operations and an increase in “noxious side effects,” such as crime. The Ordinance also left the SOBs ample opportunity to purvey their speech at other times of the day and night.” Assoc. of Club Executives v. City of Dallas, No. 22-10556 (Oct. 12, 2023).

A case about allegedly stolen computer code concluded with a case-ending sanction against the defendant. The Fifth Circuit affirmed; in sum:

Dabral admittedly deleted evidence, delayed discovery on several occasions, and ignored court orders. And, when he was offered one last “chance” to “come clean” and submit an unmodified source code control system, he didn’t. Instead, he deleted more evidence and produced a copy of the system that had numerous other files missing. Per his own expert, those deletions were seemingly “intentional” and done after the filing of Calsep’s suit and even after the district court’s disclosure order. So, the district court concluded that Dabral acted willfully and in bad faith. The court didn’t reach that conclusion easily. Instead, it came after months of violations and a long evidentiary hearing. Only then did it make its informed decision. 

Calsep A/S v. Dabral, No. 22-20440 (Oct. 11, 2023).

In a revised opinion, the Fifth Circuit again affirmed the convictions of executives associated with a “Ponzi-like scheme” involving United Development Funding. The Court reviewed a number of sufficiency challenges to various securities fraud charges; an example of its reasoning is as follows:

It does not matter that UDF IV and UDF V had collateral on the loans that it transferred to UDF III. Nor does it matter that they did not intend to cause investors financial loss. (citation omitted) (“[T]he [fraud] statute, while insisting upon ‘a scheme to defraud,’ demands neither a showing of ultimate financial loss nor a showing of intent to cause financial loss.”). Appellants exposed investors to risks and losses that, if publicly disclosed, would have decreased its value and investment power. That is enough to support a fraud conviction.

United States v. Greenlaw, No. 22-10511 (Oct. 11, 2023).

SXSW, LLC v. Federal Ins. Co., an insurance-coverage case arising out of the 2020 cancellation of South by Southwest because of COVID-19, presented some “evergreen” issues about LLCs and diversity jurisdiction that led to a remand for further development of the record. The Fifth Circuit noted “at least three potential jurisdictional
defects” on the record presented–

• “First, there is a potentially important difference between LLC membership and LLC ownership. State law governs LLC formation and organization. Several states permit LLC membership without ownership. … SXSW has not shown the relevant LLCs were formed in States that equate membership and ownership.”
• “Second, SXSW stated that Capshaw [an LLC owner] was a Virginia resident. But residency is not citizenship for purposes of § 1332.”
• “Finally, there is a timing issue. For diversity jurisdiction, we look to citizenship at the time the complaint was filed. The complaint makes no allegations about the citizenship of SXSW’s members. Federal’s December 14, 2021 exhibit contains some additional information, as does SXSW’s February 22, 2023 appellant brief.But we have no way of knowing whether those later documents reflect SXSW’s membership structure as of October 6, 2021.”

No. 22-50933 (Oct. 5, 2023) (citations omitted, emphasis added).

A trucking company went into bankruptcy after its insurer paid a substantial sum to settle a personal-injury case. Other claimaints claimed that the payment was a preferential transfer, and the Fifth Circuit agreed that the claim could proceed:

As the Supreme Court explained in Begier, “[b]ecause the purpose of the avoidance provision is to the preserve the property includable within the bankruptcy estate . . . ‘property of the debtor’ subject to the preferential transfer provision is best understood as that property that would have been part of the estate had it not been transferred before the commencement of bankruptcy proceedings.” The Policy Proceeds would have been property of the estate at the time the petition was filed if they had not been transferred. Thus, for the purposes of the avoidance provision as stated in Begier, the Policy Proceeds are the property of the estate.

Law Office of Rogelio Solis PLLC v. Curtis, No. 23-40125 (Oct. 6, 2023) (citations omitted).

In a dissent from a recent, close en banc vote in a criminal case, Judge Smith reiterated an earlier warning to again caution: “Highly consequential opinions should not be designated as unpublished in an obvious effort to discourage judges from voting in favor of en banc rehearing.” United States v. Ramirez, No. 22-50042 (Sept. 19, 2023).

Carbon Six Barrels, LLC v. Proof Research, Inc., a state-law trademark case about the design of gun barrels, turned on an Erie conclusion about Louisiana prescription law:

While true that Hogg and Crump arose in the context of damage to real property, we, like the district court, see no reason that the general principle those opinions announced should not apply here. The Louisiana Supreme Court made clear that “[t]he inquiry [as to a continuing tort] is essentially a conduct-based one, asking whether the tortfeasor perpetuates the injury through overt, persistent, and ongoing acts.” … This principle is not confined to the real property context. The district court was correct in stating that the earlier cases Carbon Six cites “are generally inconsistent with the [Louisiana] Supreme Court’s holding in Hogg,” and that “Louisiana law does not support the broad proposition that LUTPA’s prescriptive period is suspended as long as a perpetrator of fraud fails to correct his false statements.” This proposition would transform nearly every business dispute into a continuing tort. 

(citations omitted). Also, I spoke about “AI and the Legal Profession” at the recent annual meeting of the Bar Association of the Fifth Federal Circuit, and used the briefs in this case to illustrate the capabilities (and deficiencies) of generative AI–here is my PowerPoint!

In re Landry presents a baffling interaction between: (1) the ongoing appeal of  a preliminary injunction in a Louisiana congressional-district case, and (2) a mandamus proceeding, challenging the setting of a district-court hearing about a remedial plan, related to that same redistricting dispute.

By a 2-1 vote, a panel granted mandamus relief against that hearing going forward, noting the unusual policy and separation-of-power considerations that arise in redistricting cases. The dissent would have consolidated the mandamus proceeding with the ongoing appeal, and a concurring judge indicated that he would have been inclined to do so too, had the panel handling the preliminary-injunction appeal so asked. No. 23-30642 (Sept. 28, 2023).

Together with the able Ben Taylor, I have an article in the most recent Baylor Law Review called “Judgment Rendition in Texas.” The abstract is below. Our article was inspired by a 1975 article by Justice Robert Calvert in the Texas Tech Law Review called “Appellate Court Judgments or Strange Things Happen on the Way to Judgment.” We hope that we updated some of his insights for modern-day appellate practice.

The Supreme Court has granted review of three social-media regulation cases, one of which is the 2022 2-1 panel opinion by the Fifth Circuit in Netchoice v. Paxton, which conflicts with a 2022 opinion from the Eleventh Circuit about similar subject matter. These are the two issues referenced in the Court’s order granting review:

After rendition of a substantial judgment in a matter tried to a magistrate judge, the defendant argued that its consent to proceed before the magistrate judge was invalid, because it was unaware of an allegedly close friendship between the magistrate judge and plaintiff’s counsel at that time. The Fifth Circut held: “[W]e do not have a complete factual record,” noting a lack of information about (1) the full extent of the relationship, (2) the specific disclosures made about it–and when they were made, and (3) whether the defendant unduly delayed in raising its argument about the relationship. IFG Port Holdings LLC v. Lake Charles Harbor & Terminal District, No. 22-30398 (Sept. 21, 2023) (The importance of valid consent was also the focus of a 2021 Fifth Circuit case that reversed after a trial.)

This blog celebrated its 12th birthday last week. To celebrate properly, you can follow this day-long (?!) recipe to make a festive New Orleans style doberge cake.

A birthday tradition for 600Camp is to recall the 2013 case of Farenco Shipping Co. v. Farenco Shipping PTE, Ltd., which produced the best mootness argument of all time — a case about the seizure of a marine vessel became moot once the ship had sailed.

The M/V OCEAN SHANGHAI, recently renamed as SFERA, has avoided the Fifth Circuit’s waters ever since; as of September 19, 2023, it had just entered the North Sea to the west of Denmark.

After an accident involving a failed tire, the remains of the tire were transported to the defendant’s trucking facility, after which they vanished. The Fifth Circuit held that the tire’s disappearance created a jury question about bad faith based on “the following circumstantial evidence:”

Prime destroyed the most crucial piece of evidence just weeks after learning that its tire may have caused a car accident; Prime cannot explain why it transported the tire to its Salt Lake facility or what happened to the tire following the accident; and Prime cannot demonstrate it had any formal preservation or retention policy for its equipment, like tires, that may have caused an injury. These circumstances create a fact question on bad faith, necessitating a jury determination.

Van Winkle v. Rogers, No. 22-30638 (Sept. 15, 2023).

A recent Fifth Circuit panel produced three opinions on an organizational-standing issue in Louisiana Fair Housing Action Center, Inc. v. Azalea Garden Props., LLC.

Top-notch legal-writing expert Ross Guberman wrote an insightful LinkedIn post about Judge Elrod’s distinction of authority in her dissenting opinion – I recommend you give it a read!

The Chitimacha Indian tribe owns a casino. The casino’s former CFO sued the tribe for allegedly violating his civil rights by reporting him to law enforcement. He sued in state court, the defendants removed, and the district judge both denied the CFO’s motion to remand and dismissed the case with prejudice, citing the tribe’s sovereign immunity.

The Fifth Circuit reversed, noting that the controlling statute (28 USC § 1447(c)) requires that a removed case “shall be remanded” if the court lacks subject matter jurisdiction. Because that language “admits of no exceptions,” it “requires remand even when the district court thinks it futile” (here, because the district court concluded that the same immunity problems would also bar state-court litigation against the tribe.

Further, the dismissal should not have been with prejudice–“it’s precisely because the jurisdiction-less court cannot reach the merits that it also cannot issue with-prejudice dismissals that would carry res judicata effect.” Montie Spivey v. Chitimacha Tribe of Louisiana, No. 22-30436 (Aug. 16, 2023).

In re Jefferson Parish involved a mandamus petition about the interplay between a putative class action (“Ictech-Bendeck“) with a 500-plaintiff mass action (“Addison“). The Fifth Circuit denied relief, as the opinion’s introduction deftly summarizes:

… This mandamus proceeding arose because the defendants object to the district court’s scheduling of a small group of Addison plaintiffs for trial before Ictech-Bendeck will finish its class certification process, which the defendants have repeatedly delayed.

Petitioners ask us to stop the Addison trial and to order the district court to rule on class certification in Ictech-Bendeck before allowing any further proceedings in Addison. Petitioners raise the novel theory that under Rule 23 of the Federal Rules of Civil Procedure, the filing of a putative class action bars any possible class members from reaching the merits of their own, separate suits until class certification proceedings conclude in the putative class action. …

… Rule 23 establishes a mechanism for plaintiffs to pursue their claims as a class. It does not cause the filing of a putative class action to universally estop all separate but related actions from proceeding to the merits until the class-certification process concludes in the putative class action, after years of motions practice.

No. 23-30243 (Aug. 24, 2023).

In Louisiana Fair Housing Action Center, Inc. v. Azalea Garden Properties, LLC, “a nonprofit entity with a mission to eradicate housing discrimination in Louisiana” sued when a “tester” used by that entity experienced allegedly unlawful behavior at an apartment complex.

A Fifth Circuit panel (notably, the same panel that found standing in the high-profile mifepristone case) found that the entity lacked standing, but offered three different analyses of that issue:

• The majority opinion found no cognizable injury had been pleaded, remanding with instructions to dismiss without prejudice;
• A concurrence offered additional thoughts about how cognizable injury could be established on remand (either with new allegations, or by adding individual plaintiffs);
• A dissent saw the standing issue as controlled by a 1982 Supreme Court case about a similarly situated housing nonprofit.

No 22-30609 (Sept. 14, 2023).

A frustrated district court imposed sanctions in Ben E. Keith Co. v. Dining Alliance, Inc., citing the persistent failure of defendant Dining Alliance LLC to identify its members (and thus, allow resolution of the question whether the federal courts had diversity jurisdiction). The sanction included a dismissal with prejudice.

The defendant protested that the district court lacked jurisdiction to do so (an awkward position, given that the entire problem arose from the defendant’s difficulty with jurisdictional infomation). The Fifth Circuit disagreed:

“A case-dispositive sanction does not require the district court to assess a claim’s merits, weigh the evidence proffered in support of or against them claim, or decide an issue that bears on the claim’s legal substance. It is a purely procedural order.”

The Court observed that Rule 41(b) refers to “the merits,” but noted Supreme Court authority holding that “the phrase on the merits ‘has come to be applied to some judgments … that do not pass upon the substantive merits of a claim.” No. 22-10340 (Sept. 12, 2023).

CAFA allows remand of a case, otherwise removable under that statute, if the plaintiffs establish that the “local controversy” exception applies. Am element of that exception is that the plaintiffs seek “significant relief” from an in-state defendant.

A recurring problem in remedies law is whether “irreparable injury” is shown (and injunctive relief thus justified) when a defendant is insolvent. State of Louisiana v. i3 Verticals, Inc. presents a simlar problem because the in-state party was “a defunct shell with no assets, facilities, business, or employees ….”

The majority held: “The interpretation of the ‘significant relief’ prong is an issue of first impression in our circuit. We begin where we always do—with the text. And all the text requires is that ‘significant relief is sought’ from an in-state defendant. It says nothing about the in-state defendant’s ability to pay.” (citation omitted). The dissent saw that holding as inconsistent with CAFA’s discouragement of artful pleading. No. 22-30553 (Sept. 1, 2023).

In Self v. BPX Operating Co., the Fifth Circuit confronted a claimed conflict between Louisiana’s forced-pooling laws and a civilian doctrine called “negotiorum gestio,” andi certified (over a dissent) the question to the Louisiana Supreme Court. I was unfamiliar with the doctrine and the case offers this summary for the uninformed attorney from a common-law tradition:

On the other hand, negotiorum gestio—or management of affairs—“is a typically civilian institution that derives from the Romanist tradition and is found in all civil codes.” La. Civ. Code art. 2292 cmt. (a). Negotiorum gestio applies when a person, the manager or gestor, acts 1) without authority, 2) to protect the interests of another, and 3) in the reasonable belief that the owner would approve of the action if made aware of the circumstances. La. Civ. Code art. 2292. The gestor must have “undertake[n] the management with the ‘benefit’ of the owner in mind” and not have “act[ed] in [its] own interest or contrary to the actual or presumed intention of the owner.” Id. cmts. (c)-(d) … Only if all these requirements are met does a person qualify as a gestor such that “[t]he owner whose affair has been managed is bound to fulfill the obligations that the manager has undertaken as a prudent administrator and to reimburse the manager for all necessary and useful expenses.” La. Civ. Code art. 2297. Negotiorum gestio is “rooted in altruism,” and its purpose is to “encourage people to assist friends and neighbors in need.”

No. 22-30243 (Sept. 8, 2023).

Rex Real Estate, a commercial real estate broker, sued Rex Exchange, a facilitator of online home sales. The defendant won judgment as a matter of law at trial, after which the Fifth Circuit affirmed in part and reversed in part. In its opinion, the Court  sought to “unconfuse” its precedent about confusion in trademark-infringement cases, reviewing the holdings of its cases and applying the resulting framework to that aspect of the case:

Plaintiff’s anecdotal proof of confusion does not involve swayed customer purchases or initial interest confusion that can result in swayed business. It also does not involve “potential customer[s] considering whether to transact business with one or the other of the parties.” But it has presented instances of potential customers of each respective company mistakenly contacting the other. . These instances are relevant, but their weight is lessened by Plaintiff’s and Defendant’s high volume of business and extensive advertising. Nevertheless, because Plaintiff has presented some relevant evidence of actual confusion, a reasonable jury could conclude that this digit weighs in its favor.

Rex Real Estate I, LP v. Rex Real Estate Exchange, Inc., No. 22-50405 (Sept. 6, 2023) (citations omitted).

After the matter ended, a health care economist sought to intervene in a qui tam case about medical billing, wanting to challenge a protective order that covered documents in which he had professional interest.

The Fifth Circuit did not rule that he had the right to intervene, but did reverse the district court’s denial of his petition, finding that it had erred on points of law in evaluating his standing, his “claim or defense” that justified intervention, and the timeliness of his petition. U.S. ex rel Hernandez v. Team Finance LLC, No. 22-40707 (Aug. 31, 2023).

The Fifth Circuit reversed the trial court’s dismissal of a case under Fed. R. Civ. P. 19, for problems with party joinder, in PHH Mortgage Co. v. Old Republic Nat’l Title Ins. Co.

The key distinction that led to reversal was this: “The [Texas] trespass-to-try-title statute applies only when ‘the claimant is seeking to establish or obtain the claimant’s ownership or possessory right in the land at issue,'” while “a breach of contract claim against a title insurance company ‘invokes the insurer’s obligation to pay the claim or defend title to the property, and this claim is separate and distinct from the claim of ownership.'” No. 22-50930 (citations omitted).

In Whirlpool Corp. v. Shenzhen Sanlida Elec. Tech. Co., the plaintiff obtained a preliminary injunction against sale of a kitchen mixer that allegedly infringed on the “KitchenAid” design. Shenzen, a China-based manufacturer, objected to the issuance of an injunction before service of process (although its counsel appeared at the preliminary-injunction hearing and argued about the merits, and Shenzen did not dispute that jurisdiction would exist upon completion of service).

The Fifth Circuit rejected this argument, noting:

• Text. “Federal Rule of Civil Procedure 65[(a)(1)] states that a court ‘may issue a preliminary injunction only on notice to the adverse party..”
• Circuit precedent. “[A]s we stated in Corrigan Dispatch Co. v. Casa Guzman, S.A., ‘Rule 65(a) does not require service of process,’ but rather requires ‘notice to the adverse party.’ 569 F.2d 300, 302 (5th Cir. 1978).
• Practicality. “[B]ecause ‘formal service of process under the Hague Convention . . . can take months,’ adopting Shenzhen’s position could result in the ‘unfortunate effect of immunizing most foreign defendants from needed emergency injunctive relief.'” (citation omitted).

No. 22-40376 (Aug. 25, 2023).

Princeton Excess & Surplus Lines Ins. Co. v. A.H.D. Houston, Inc. addresses – coverage – in strip clubs, holding that the clubs are – exposed.

As with Jan Tiffany’s burlesque act of the 1950s (right), matters “largely turn[ed] on whether the … coverage should be viewed as one ‘umbrella’ of coverage or carved into subcategories … .”

The specific issue involved insurance coverage for damages arising from unauthorized use of models’ photos, and turned on construction of the policies’ exclusions to “advertising injury” coverage. A dissent would certify the issue to the Texas Supreme Court.  No. 22-20473 (Aug. 25, 20230.

After going to see Oppenheimer, you can read State of Texas v. Nuclear Regulatory Commission.

The failure of the Yucca Mountain repository for spent nuclear fuel led the NRC to explore “a consent-based approach for siting nuclar waste storage facilities.” With encouragment from the governors of Texas and New Mexico, it authorized such a facility in Andrews County–a remote location at the heart of the Permian Basin oil fields. Texas changed its mind, enacting a statute that made the storage of high-level waste illegal in the state.’

This lawsuit resulted. The Fifth Circuit found that the plaintitfs (Texas, a state environmental agency, an oil producer, and an oil-industry group) had constitutional and statutory standing to challenge the NRC’s license, and from there, concluded that the NRC had overstepped its statutory authority. No. 21-60743 (Aug. 25, 2023).

I had an op-ed in today’s Dallas Morning News about recent friction between the Supreme Court and Fifth Circuit on standing in some high-profile constitutional/administrative-law cases.

In last week’s Texas Lawbook, I reported on an experiment with an AI competitor of ChatGPT called Claude. It’s not ready to be a virtual law clerk yet, but its surprisingly powerful.

The Satanic Temple–an enthusiastic, if not particularly coherent, litigant–appealed the denial of a preliminary injunction that it sought as to several Texas abortion laws. The Fifth Circuit thoroughly reviewed the principles that govern when a preliminary-injunction appeal can become moot with time, and concluded that they applied here to require dismissal of this particular appeal:

Plaintiffs have already appealed the dismissal of their claims; that appeal is docketed as No. 23-20329. To the extent that plaintiffs want to litigate further any issues that were raised in the preliminary injunction motion and remain live, they may do so in their appeal from the district court’s final judgment.

No. 22-20459 (Aug. 18, 2023) (footnote omitted).

The quesions in Louisiana Newpack Shrimp Co. v. Longhai Indigo Seafood Partners, Inc. was whether Louisiana Newpack (an importer and seller of seafood) owed $995,188.03 to Longhai (a crabmeat exporter) for three orders of crabmeat.

A properly-instructed jury found that the parties did not have a contract, but did have an enforceable “open account” as recognized by Louisiana law. The district court entered judgent for Longhai, but then amended the judgment under Fed. R. Civ. P. 59 to award it nothing.

The Fifth Circuit reversed, noting that Rule 59(e) requires the movant to “clearly establish … a manifest error of law or fact.’ Noting “conflicting case law” in Louisiana on the question whether an open-account claim requires the existence of a contract, the Fifth Circuit held “that it was not a manifest error of law to allow Lonhai to recover on its open account claim.” No. 22-30653 (Aug. 17, 2023, unpublished) (emphasis in original).

A few years ago, I examined en banc opinons in the Dallas Court of Appeals, and concluded that they tended to be either: (1) “error correction” of panel opinions that had become out of step with the rest of the state and/or the supreme court; (2) “successful failure” cases where en banc review became moot when the supreme court took the case; and (3) “Goldilocks” cases that involve significant issues, but not of such importance that supreme-court review is guaranteed.

The Fifth Circuit’s en banc cases fit that general taxonomy (Brackeen and the FHFA case qualifying as “successful failures”), with the recent opinion in Hamilton v. Dallas County an example of error-correction. The majority opinion summarized:

[T]he panel concluded that it was “bound by this circuit’s precedent, which requires a Title VII plaintiff” to have “suffered some adverse employment action by the employer” and which says that “adverse employment actions include only ultimate employment decisions such as hiring, granting leave, discharging, promoting, or compensating.” Because “the denial of weekends off is not an ultimate employment decision,” the panel affirmed the district court’s dismissal. The panel concluded by urging the full court to “reexamine our ultimate-employment-decision requirement” in light of our deviation from Title VII’s plain text. We granted rehearing en banc to do so.

No. 21-10133 (Aug. 18, 2023) (en banc) (footnotes omitted).

The Fifth Circuit’s mifepristone opinion has been released (although the trial court’s order remains stayed by an earlier ruling from the U.S. Supreme Court) – of particular interest is the panel majority deciding not to address the issue presented about the Comstock Act:

I discuss the importance of this point in a recent article in Slate, as does Professor Mary Ziegler in another Slate piece.

A boat sank during a hurricane, leading to an insurance-coverage dispute about whether the boat was in not located in the place warranted by the insured.

The insurance policy at issue had two “incorporation” clauses. “The first provides that ‘[t]his insuring agreement incorporates in full [Gray Group’s] application for insurance[.]’ The second states that ‘[t]his is a legally binding insurance document between [Gray Group] and [Great Lakes], incorporating in full the application form signed by [Gray Group].'”

The Fifth Circuit agreed with the district court that these clauses were ambiguous as to what specific documents were referenced. Unfortunately for the plaintiff, though, the extrinsic evidence showed that the parties intended “application for insurance” to include a document about the boat’s location–and thus, made a warranty that the boat would be in New Orleans during hurricane season. Great Lakes Ins. v. Gray Group Investments, LLC, No. 22-30041 (Aug. 1, 2023).

The Financial Times sought access to a sealed sentencing record in a high-profile criminal case about international bribery. In United States v. Ahsani, No. 23-20097, the Fifth Circuit held: “[W]e acknowledge numerous procedural irregularities in the district court, we ultimately affirm its denial of the intervenors’ motion to unseal.”

Two issues in particular were presented.

1. Notice and an opportunity to be heard before sealing. The Fifth Circuit found material errors by the district court in how it handled sealing of the sentencing proceeding. Unfortunately for the Times, those errors did not require unsealing of the hearing as a remedy, and other aspects of the record justified its continued sealing.
2. Legal error. After reviewing the requirements of the common-law and First Amendment rights of public access to court records, the Court held: “[T]he order denying intervenors’ motion to unseal included sparse detail when read in isolation, but it did contain specific, substantive findings sufficient to permit our review, given the facts.  Although its articulation of the governing legal principles could have been more detailed, the court applied the proper legal standards. … The interests it identified are compelling and implicated by the sealed information. Those interests may abate in the future, but for now, they remain salient enough to justify the sealing of the documents at issue, including the transcript of the sealed sentencing proceeding. Finally, the court properly considered the alternative of redaction and permissibly found that it was inappropriate.”

Biology teaches that form follows function; similarly, Crown Castle Fiber v. City of Pasadena teaches that “aesthetic design standards incorporating spacing and undergrounding requirements” cannot flout federal telecommunications law, anymore than a tax on federally-protected commercial activity could.

Specificaly, the Fifth Circuit held that the Federal Telecommunications Act preempted local regulations that effectively prohibited the installation of small cell nodes needed for 5G networks. As for standing, “[e]ven though § 253 does not confer a private right [of action], a plaintiff is not prevented from gaining equitable relief on preemption grounds.” And on the merits, the “spacing and undergrounding” regulations were not reasonable or competitively neutral under the FTA’s safe harbor provision. No. 22-20454 (Aug. 4, 2023).

Chavez v. Plan Benefit Services, returning to the Fifth Circuit, addressed two class-action issues.

1. Standing. The Court evaluated two competing approaches to class standing. One requires named plaintiffs to establish their own individual standing, then separately analyzes class certification under Rule 23. The second examines named plaintiffs’ standing to raise claims of absent class members before applying Rule 23. As in Angell v. GEICO, 67 F.4th 727 (5th Cir. 2023), the Court avoided choice between the two by finding them both satisfied on this record.
2. Certification. The district court found the overarching question of whether the defendants owed fiduciary duties by managing the benefit trusts was both significant and dispositive of the class’s claims. The Court agreed that this issue, along with the question whether any fiduciary duty was breached, outweighed individualized inquiries into each plan’s fees or structure.

No. 22-50368 (April 11, 2023).