“Imagine if Texas—a state that prides itself on promoting free enterprise—passed a law saying that only those with existing oil wells in the state could drill new wells. It would be hard to believe. It would also raise significant questions under the dormant Commerce Clause. …

Texas recently enacted such a ban on new entrants in a market with a more direct connection to interstate commerce than the drilling of oil wells: the building of transmission lines that are part of multistate electricity
grids. A 2019 law says that the ability to build, own, or operate new lines “that directly [connect] with an existing utility facility . . . may be granted only to the owner of that existing facility.” …

NextEra challenges the new law, as it applies to the interstate electricity networks in Texas (but not the intrastate ERCOT network), on dormant Commerce Clause grounds. … Once we wade through the thicket of electricity regulation, the ban’s interference with interstate commerce becomes as clear as it is for the oil well hypothetical. We thus conclude that the dormant Commerce Clause claims should proceed past the pleading stage.”

NextEra Energy Capital v. Lake, No. 20-50160 (Aug. 30, 2022) (citations omitted).

For August’s end-of-month summary by the Fifth Circuit Bar Association, I contributed a one-page article about preparation for oral argument, complete with action picture (right), joining a similar one contributed last month by Association president Tom Flanagan of New Orleans. If you belong to the BAFFC, I encourage you to write one of your own! And if you don’t belong you should, it’s a great resource and features an outstanding body of work about the Fifth Circuit by the able Walter Woodruff, also of New Orleans.

A long-running trademark dispute involving a New Orleans dining treasure, the Camellia Grill, came to an end in Uptown Grill, LLC v. Cameilla Grill Holdings, Inc. Among other holdings, the Fifth Circuit held that the following permanent injunction about trade dress was not an abuse of discretion “where the district court adhered to our recitation of … eight elements [in a prior opinion in the case], albeit adding the less precise language ‘all or most.'” The Court distinguished “other cases in which injunctions referencing trade dress have been reversed for vagueness, [because] the injunction set forth by the district court here has much more detail than a general prohibition from employing ‘confusingly similar’ trade dress.”

In crafting this injunction, the Court looks specifically to the definition of “trade dress” utilized by the Fifth Circuit in its May 29, 2019 opinion. “Trade dress” is defined as “the total image and overall appearance of a product [that] may include features such as the size, shape, color, color combinations, textures, graphics, and even sales techniques that characterize a particular product.” The alleged elements of trade dress include: (1) the pink and green interior paint scheme, (2) the “U-Shaped” double horseshoe counter design, (3) the stainless steel stemmed stools with green stool cushions, (4) the fluted metal design under the customer side of the counter and above the cooking line, (5) the visible pie cases attached to the rear wall at both ends of the cooking line, (6) the “straw popping” routine, (7) audible order calling routine, and (8) the individual counter checks handed to each customer. The enjoined parties’ utilization of all or most of the above Camellia Grill trade dress elements at any single location will constitute a violation of this injunction.

No. 21-30639 (Aug. 23, 2022).

The plaintiffs in Lee v. Andrew Lawrence Collection LLC sought to register the trademark “THEEILOVE” – a phrase associated with the alma mater of Jackson State University. Then they sued that university’s licensing agent and some licensees.

The defendants successfully moved to dismiss under the infrequently-used combination of Fed. R. Civ. P. 19 and 12(b)(7), based on the university’s interest in the subject matter, and the Fifth Circuit affirmed. It reasoned:

• Interest. The university had a non-frivolous interest in the ownership of the mark based on the university’s consistent usage of it, and that interest could be “practically impaired” by a decision on that topic in this case (as distinct from an analysis of whether a judgment would in fact be preclusive). Thus, the university was a required party under Rule 19(a)(1)(B)(i).
• Proceed or dismiss? As a state university, Jackson State had sovereign immunity from suit; that interest “is necessarily impaired when plaintiffs try to use the state’s sovereign immunity to lure it into a lawsuit against its will.” That issue alone favored dismissal. The Court noted that the other, practically focused factots in Rule 19(b) also favored dismissal.

No. 20-30796 (Aug. 24, 2022).  (In honor of this fairly rare analysis of Rule 19, here is a link to Paul Hardcastle’s 1985 hit Nineteen.)

Sambrano v. United Airlines, a religious-discrimination case about an airline’s vaccine mandate that prompted a (literally) fiery dissent from the panel opinion, ended in a 13-4 vote against en banc review. A dissent again urged caution in the use of unpublished (and thus, nonprecedential) opinions in significant matters. No. 21-11159 (Aug. 18, 2022).

In the unlikely event that any litigation proceeds under Texas’ SB8 law after Dobbs, a useful reference will be Perez v. McCreary, Veselka, Bragg & Allen, P.C., which found that a plaintiff’s claim under the Fair Debt Collection Act about an inaccurate demand letter failed to satisfy Article III standing requirements:

“’Congress’s creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide whether a plaintiff has suffered a concrete harm under Article III.’ Any other rule would allow Congress to grant private plaintiffs a personal stake in enforcing regulatory law and ultimately usurp the President’s Article II authority to execute the laws. And that would aggrandize our power by letting us resolve disputes that are not ‘of a Judiciary Nature.’

No. 21-50958 (Aug. 15, 2022) (citations omitted) (applying TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021)).

The 2017 collision between the MV ACX Crystal and the destroyer U.S. Fitzgerald led to litigation in New Orleans federal court against NYK, a huge shipping concern with global operations. The district court acknowledged that for this international case, the constitutional standard for personal jurisdiction was based on the Fifth rather than the Fourteenth Amendment, but concluded that the standards were materially similar and that it lacked jurisdiction over NYK.

A Fifth Circuit panel affirmed and the en banc court did also, noting that the other Circuits addressing this constitutional question reached similar conclusions. A dissent argued that the majority’s position about jurisdiction would undermine the effective operation of Congressionally-created causes of action involving asset seizure by the Castro regime and terrorist activity. Douglass v. NYK, No. 20-30382 (Aug. 16, 2022) (en banc). The judges’ votes broke along atypical lines and are detailed below:

In State of Louisiana v. Biden, the district court enjoined the federal government from pausing certain oil and gas lease sales:

The Fifth Circuit found that the term “Pause” was too vague to satisfy Fed. R. Civ. P. 65, even considering the district court’s accompanying opinion: “The present injunction fails to meet Rule 65(d) requirements. We cannot reach the merits of the Government’s challenge when we cannot ascertain from the record what conduct—an unwritten agency policy, a written policy outside of the Executive Order, or the Executive Order itself—is enjoined. Our review of APA claims must begin by determining if there was final agency action. Where, as here, it is unclear what final agency action the district court predicated its order upon, we are unable to reach the merits of the appeal.” No. 21-30505 (Aug. 17, 2022).

The well-known poem Antigonish begins:

Yesterday, upon the stair,
I met a man who wasn’t there
He wasn’t there again today
I wish, I wish he’d go away.

In that general spirit, in recent days, both the U.S. Court of Appeals for the Fifth Circuit and the Court of Appeals for the Fifth District at Dallas had close en banc votes involving questions of arbitrability, as to a party who “wasn’t there”–who had not signed an arbitration agreement, but was nevertheless potentially subject to it. (The Dallas case is discussed here; the Fifth Circuit’s, here.)

Whether the timing is an example of synchronicity I will leave to others. The courts’ difficulty with these issues shows the strong feelings provoked by the issue of court access, even among very sophisticated jurists, in an area of the law with well-developed case law on many key points.

In CAE integrated, LLC v. Moov Techs., aoLtd., the plaintiff (CAE) sought a preliminary injunction, alleging that a former employee (Meissner) improperly took confidential information about customers to his new employer (Moov). The district court found otherwise and the Fifth Circuit affirmed on the record presented, noting:

1. “Meissner’s knowledge of whom he worked with while at CAE, absent other evidence, is insufficient to support a finding that he misappropriated trade secrets.”
2. “CAE has not identified a single contact whose information was not publicly available or ascertainable through proper means. Semiconductor industry participants are available in third-party directories, meet at conventions and trade shows, and can be found through online searches.”

The Court also noted that the employee had lost access to the relevant Google Drive some time before the injunction hearing. No. 22-50034 (Aug. 9, 2022).

By an 8-8 vote over a dissent, the full Fifth Circuit declined to review Newman v. Plains All Am. Pipeline, L.P., a case about a court’s power to determine arbitrability when a nonsignatory seeks to enforce an arbitration clause. The breakdown of votes was as follows (Senior Judge King was the third panel member):

The plaintiff in Beatriz Ball, L.L.C. v. Barballago Co. alleged that a competitor’s line of tableware infringed on the plaintiff’s unregistered trade dress for its Organic Pearl, products.

After a 3-day bench trial, the trial court ruled for the defendant. The Fifth Circuit reversed and remanded. The key Lanham Act issue was whether the plaintiff’s trade dress had acquired secondary meaning. Of the seven relevant factors, three required additional scrutiny on remand:

• Volume of sales. “Beatriz Ball offered evidence of the exact volume of sales attributable to the Organic Pearl collection. … [W]hether this multimillion-dollar volume of sales ultimately weighs for or against secondary meaning should be reconsidered. No current circuit precedent expressly addresses a $6.6 million volume, but two cases uphold much higher volumes and one rejects a much lower volume as indicia of secondary meaning.”
• Nature of use in newspapers and magazines. “In its analysis of the ‘newspaper and magazines’ factor, the district court observed that ‘very few of the advertisements reference the collection by name and just as many advertisements highlight Beatriz Ball pieces from other collections.’ As Beatriz Ball points out, however, ‘[t]his is not a suit over rights to a name; it’s a suit over rights to product designs.'” 
• Defendant’s intent. “Beatriz Ball’s trade dress claim is not confined to products that include a pearl rim or that might include some distortions in the product’s shape. As described, the trade dress exhibits a unique combination of features pertaining to the individuality of each piece, the irregular and unpredictable size and shape of the pearls, the undulated shape of the body, the metallic shine, and the overall, accurate impression that each piece was handmade with artisanal quality. None of the products presented at trial incorporated these elements holistically like the Pampa Bay products.” 

No. 21-30029 (July 12, 2022).

In a change from the constitutional issues that have plagued the SEC in court of late, in SEC v. World Tree Financial, LLC, the Fifth Circuit affirmed a securities-fraud judgment based on “a fraudulent ‘cherry-picking’ scheme, in which [defendants] allocated favorable trades to themselves and favored clients and unfavorable trades to disfavored clients.” Proof of this scheme required sophisticated statistical analysis, summarized as follows:

To analyze World Tree’s allocation data, [the SEC’s expert] divided the client accounts into three categories: (1) accounts controlled by Perkins, Gilmore, or both (“Favored-Perkins accounts”); (2) accounts owned by World Tree clients other than Matthew LeBlanc and his business Delcambre Cellular (“Favored-Client accounts”); and (3) accounts owned by LeBlanc and Delcambre (“Disfavored accounts”). She then measured several performance measures and subsets of trades: most and least profitable trades, day trades, average first-day returns, earnings-day trades, overlapping stocks, and trades after LeBlanc complained to Perkins about his accounts’ poor performance. According to her analysis, from July 2012 to July 2015, Perkins methodically allocated trades with favorable first-day returns to the FavoredPerkins and Favored-Client accounts, while allocating trades with unfavorable first-day returns to the Disfavored accounts.

[She] opined that the “evidence overwhelmingly indicates that Perkins engaged in cherry-picking.” Though she acknowledged at trial that the data reflected only a pattern and that she did not “have the ability to identify individual trades that may or may not be improper,” the data in the aggregate showed a “one in one million chance that these patterns could have occurred if allocations were being made without regard to first-day return.”

No. 21-30063 (Aug. 4, 2022).

Beatriz Ball, L.L.C. v. Barballago Co., No. 21-30029 (July 12, 2022), a trade-dress case under the Lanham Act, produced a thorough concurrence by soon-to-depart Judge Costa about the distinctions between review of bench trials, and review of jury verdicts. He began by observing:

“I write separately to remark on how our remand of the trade dress claim reveals a paradox that has perplexed me about bench trials: We give a trial judge’s detailed and intensive factfinding less deference than a jury’s unexplained verdict.

If a jury had rejected Beatriz Ball’s trade dress claim—giving no more  explanation than a simple ‘No’ on the verdict form—we would presumably affirm. After all, we do not hold that Beatriz Ball is entitled to judgment as a matter of law on this claim. Instead, we remand for the district court to reassess the trade dress claim because of some errors in its 33 pages explaining why it found no protectable trade dress.”

And he concluded after a review of history and social-science research: “It turns out, then, that there is good reason for the seeming anomaly of giving less deference to bench trials: Larger and more representative groups are the ones more likely to reach the correct outcome.”

In its analysis, the concurrence notes one commentator’s observation that “while the Seventh Amendment does not compel the backwards-seeming rule giving less deference to judges’ findings, it does explain it. ‘[O]ur traditional and constitutionalized reverence for jury trial’ is why we trust juries more.” An element of that “traditional reverence” may well include some indifference to whether a jury in fact reaches a “correct” result, as the mere existence of a jury has a powerful symbolic value in its own right. See generally Batson v. Kentucky, 476 U.S. 79, 90 (1986) (“In view of the heterogeneous population of our Nation, public respect for our criminal justice system and the rule of law will be strengthened if we ensure that no citizen is disqualified from jury service because of his race.”).

The Fifth Circuit found that the federal courts had “related to” jurisdiction because of the relationship between litigation and a bankruptcy plan:

“In Zale, the dispute between NUFIC and Cigna risked disrupting Zale’s reorganization by threatening Zale’s recovery from and access to the Cigna policy funds. Here, NFC’s claims risked the same disruptions: GenMa had pledged to pay the Lessors lots of money and to keep specified cash reserves as part of a global settlement between several parties to GenOn’s restructuring. By threatening GenMa’s ability to fulfill those commitments, NFC’s claims pertained to ‘the implementation and execution’ of that crucial settlement, which was part of GenOn’s plan. Craig’s Stores, 266 F.3d at 390. So we have related-to jurisdiction. 28 U.S.C. § 1334(b).”

Natixis Funding Corp. v. Gen-On Mid-Atlantic, LLC, No. 21-20557 (July 29, 2022).

The panel majority in E.T. v. Paxton held that a group of students lacked standing (based on their concerns about catching COVID-19) to challenge Governor Abbott’s order prohibiting school mask mandates, noting:

“This circuit does not ‘recognize the concept of probabilistic standing based on a non-particularized increased risk—that is, an increased risk that equally affects the general public.’ And even where increased-risk claims are particularized, they generally ‘cannot satisfy the actual or imminent requirement,’ which necessitates ‘evidence of a certainly impending harm or substantial risk of harm.’ That’s because ‘[m]uch government regulation slightly increases a citizen’s risk of injury—or insufficiently decreases the risk compared to what some citizens might prefer.'”

But cf. Sambrano v. United Airlines, No. 21-11159 (Feb. 17, 2022) (unpublished) (finding standing in a COVID vaccine-mandate case when: “Plaintiffs are several United employees who requested religious or medical accommodations from United. Those requesting religious accommodations did so out of concern that aborted fetal tissue was used to develop or test the COVID-19 vaccines.”).

My colleague Kyle Gardner and I wrote this article for the most recent Headnotes about two cases–one federal, one state–that summarize basic personal-jurisdiction principles for Texas in business cases.

   The Bankruptcy Code allows debtors to breach and cease performing executory contracts if the bankruptcy court approves. We thus have held that debtors may “reject” regulated energy contracts even if the Federal Energy
Regulatory Commission (“FERC”) would not like them to.  A sister circuit agrees, and we confirmed our view mere months ago[.]

     Nevertheless, FERC persisted. Anticipating the petitioner’s insolvency, FERC issued four orders purporting to bind the petitioner to continue performing its gas transit contracts even if it rejected them during bankruptcy. The petitioner asks us to vacate those orders. Because FERC cannot countermand a debtor’s bankruptcy-law rights or the bankruptcy court’s powers, we grant the petitions for review and vacate the orders.

Gulfport Energy Corp. v. FERC, No. 21-60017 (July 19, 2022) (citations omitted).

The holding of Union Pacific R.R. Co. v. City of Palestine may be of interest only to the parties, but the backstory is a sprawling drama about westward expansion and the legal framework that followed it: “Union Pacific Railroad Company seeks to end its operations in Palestine, Texas, but has been unable to do so because a 1954 Agreement between its predecessor and Defendants City of Palestine and Anderson County, Texas has prevented it from leaving. Because the 1954 Agreement is preempted by the Interstate Commerce Commission Termination Act, Union Pacific is free to leave. … The background of this case spans 150 years, and we have discussed much of it in prior opinions. We nonetheless recount it here to illuminate the intersection between the parties’ purported contractual agreements and increased federal regulation of the railroad system.” No. 21-40445 (July 22, 2022) (cleaned up) (emphasis added).

A sweeping analysis of different types of disgorgement led to this conclusion about the securities laws in SEC v. Hallam: “[W]e conclude that Sections 78u(d)(3) and (d)(7) authorize legal ‘disgorgement’ apart from the equitable ‘disgorgement’ permitted by Liu. That answers the question which ‘soil,’ came with the ‘term of art,’ that Congress used.” No. 21-10222 (July 19, 2022) (citations omitted). While focused on a precise issue about the most recent amendments to federal securities law, Hallam offers a detailed history and summary of approaches to disgorgement of ill-gotten gains, in both law and equity.

“[T]he oldest and most consistent thread in the federal law of justiciability is that the federal courts will not give advisory opinions.” E.g., In re: Franchise Servcs. of N. Am., 891 F.3d 198 (5th Cir. 2018). That said, not all statements of legal rules are the same (as detailed in this Pepperdine Law Review article that I co-authored several years ago). Illustrating that point:

• In Leonard v. Martin, the panel majority in a discovery-order mandamus observed in a footnote: “In mandamus cases, this court often holds ‘that a district court erred, despite stopping short of issuing a writ of mandamus.'” (citation omitted) No. 21-30475 (June 30, 2022).
• In SEC v. Novinger, the concurrence in a case resolved on procedural grounds about Fed. R. Civ. P. 60(b) observed: “If you want to settle, SEC’s policy says, ‘Hold your tongue, and don’t say anything truthful—ever’—or get bankrupted by having to continue litigating with the SEC. A more effective prior restraint is hard to imagine. … Given the agency’s current activism, I think it will not be long before the courts are called on to fully consider this policy.” No. 21-10985 (July 12, 2022).
• And in SEC v. Hallam, a case about the kind of disgorgement available as a remedy under the securities laws, the Court observed: “… if we are confronted with an appeal from a request for an award of that nature, we may need to decide whether it could be equitable disgorgement consistent with Liu’s constraining those awards to ‘net profits[.]” And that may also require us to resolve Hallam’s contention that the SEC is required strictly to trace the ill-gotten gains, and the profits on them, into assets still held by the defendant.” No. 21-10222 (July 19, 2022) (citations omitted).

Louisiana Indep. Pharmacies Ass’n v. Express Scripts, Inc. “presents a novel issue concerning the amount in controversy requirement for diversity jurisdiction in cases brought by organizations on behalf of their members.” An association of Louisiana pharmacists sought a declaration about their appropriate Medicare reimbursement, and while the total value of all their claims exceeded $75,000, the Fifth Circuit concluded that the law required that “at least one pharmacy would have to allege that Express Scripts shortchanged it on the provider fee for over 750,000 Medicare Part D prescriptions.” Accordingly, it dismissed for lack of subject matter jurisdiction. No. 21-30331 (July 20, 2022).

Despite a contrary view of the case by a motions panel, a majority of the the panel that received the merits briefing denied the petitions for review in Wages & White Lions Investments LLC v. FDA, a case about the regulation of “vaping” products: “Petitioners advance two primary arguments: (1) FDA acted arbitrarily and capriciously by pulling a ‘surprise switcheroo‘ on Petitioners and failing to consider important aspects of the PMTAs; and (2) FDA lacks statutory authority to impose a comparative efficacy requirement. We are unpersuaded by either argument.” 

A dissent saw matters otherwise: “In a mockery of ‘reasoned’ administrative decision making, FDA (1) changed the rules for private entities in the middle of their marketing application process, (2) failed to notify the public of the changes in time for compliance, and then (3) rubber-stamped the denial of their marketing applications because of the hitherto unknown requirements.” A petition for en banc rehearing seems a near certainty. No. 21-60766 (July 18, 2022).

My friend Walter Woodruff and I have picked our “Top Five Cases to Know” from the Fifth Circuit for the first half of 2022 – we agreed on 3/5 – the Bar Association for the Fifth Federal Circuit has been Tweeting them out the last few days!

Preble-Rich, a Haitian company, had a contract with a Haitian government agency to deliver fuel. A payment dispute developed and Preble-Rich started an arbitration in New York, pursuant to a broad clause in the parties’ contract (“In the event of a dispute between the [Parties] under this Contract, the dispute shall be submitted by either party to arbitration in New York. … The decision of the arbitrators shall be final, conclusive and binding on all Parties. Judgment upon such award may be entered in any court of competent jurisdiction.”). 

Preble-Rich obtained “a partial final award of security” from the arbitration panel requiring the posting of $23 million in security. Litigation to enforce that award led to Preble-Rish Haiti, S.A. v. Republic of Haiti, No. 22-20221, which held that the above clause was not an explicit waiver of immunity from attachment as required by the Foreign Sovereign Immunity Act, 28 U.S.C. § 1610(d). “The arbitration clause is relevant to whether BMPAD waived its sovereign immunity from suit generally, but a waiver of immunity from suit has ‘no bearing upon the question of immunity from prejudgment attachment.’” (citation omitted).

In reaching an important holding about the scope of “federal officer” removal, as applied to “critical infrastructure” businesses operating during the pandemic:

In this case, we must decide whether Tyson Foods, Inc. was “acting under” direction from the federal government when it chose to keep its poultry processing plants open during the early months of the COVID-19 pandemic. Tyson argues that it was, and that the district courts erred in remanding these cases back to state court. But the record simply does not bear out Tyson’s theory. Tyson received, at most, strong encouragement from the federal government. But Tyson was never told that it must keep its facilities open. Try as it might, Tyson cannot transmogrify suggestion and concern into direction and control.

(emphasis in original), the Fifth Circuit provided some interesting history about that important statute:

Congress enacted the first “federal officer removal statute” during the War of 1812 to protect U.S. customs officials. New England states were generally opposed to the war, and shipowners from the region took to suing federal agents charged with enforcing the trade embargo against England. Congress responded by giving customs officials the right to remove state-court actions brought against them to federal court. Since that time Congress has given the right of removal to more and more federal officers. Today all federal officers as well as “any person acting under that officer” are eligible.

(footnotes omitted). Glenn v. Tyson Foods, Inc., No. 21-40622 (July 7, 2022).

A recent Texas Monthly article offers a detailed analysis of the Fifth Circuit and its recent opinions.

On a Texas tort-law question about liability for a brake failure, the Fifth Circuit reasoned:

We do not think this question is close enough to warrant certification to the Supreme Court of Texas. See McMillan v. Amazon.com, 983 F.3d 194, 202 (5th Cir. 2020) (noting that certification is usually reserved for close questions of state law with “scant on-point precedent”). Certification is appropriate when “consequential state-law ground is to be plowed” and “any Erie guess would involve more divining than discerning.” Id. Our guess today is a safer bet. The Guijarros have not identified a single case cabining Armstrong to the realm of products liability. See Troice v. Greenberg Traurig, L.L.P., 921 F.3d 501, 504–05 (5th Cir. 2019) (declining to certify because multiple intermediate courts had adopted one view of the issue, and the plaintiff had not identified any contrary authority). Nor does such a distinction make sense. Add to the one-sidedness of this issue that neither party requested certification.

       We conclude that Texas law requires plaintiffs alleging a brake defect to put forth “competent expert testimony and objective proof” that the defect caused their injuries.

Guijarro v. Enterprise Holdings, Inc., No. 21-40512 (July 5, 2022).

“A bench ruling can be effective without a written order and does trigger appeal deadlines if it is final—which this ruling was. While Guerra is right that the district court’s bench ruling did not comply with [Fed. R. Civ. P.] 58’s ‘separate document’ requirement, that neither prevented him from appealing nor gave him infinite time to appeal.” Ueckert v. Guerra, No. 22-40263 (June 27, 2022).

The Fifth Circuit has set for rehearing en banc:

• Feds for Medical Freedom v. Biden (the “federal employee vaccine” case, in which a panel reversed an injunction against a Presidential executive order about COVID-19 vaccination); and
• Cargill v. Garland (the “bump stock” case, in which a panel rejected a challenge to ATF’s regulation that treats a bump stock as a “machine gun” under the relevant firearms statute)

Ardoin v. Robinson, in which the Fifth Circuit denied a stay in a case about a new Louisiana congressional district, was stayed by the Supreme Court, which also granted the cert petition and held the matter held in abeyance pending a ruling in another case.

As Dickens famously wrote in Bleak House: “Jarndyce and Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. … Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it.”

So to, the affirmative-action litigation about admissions policy at the University of Texas at Austin, where the Fifth Circuit held, inter alia, that an organization called “Students for Fair Admissions” was not barred by claim preclusion from bringing suit when (1) its principals were involved in earlier litigation, but did not control the new entity and had sued before in different capacities, and (2) the facts about UT’s policies and the makeup of its student body had materially changed since the earlier litigation. Students for Fair Admission, Inc. v. Univ. of Tex. at Austin, No. 21-50715 (June 20, 2022).

Have the pre-Roe statutes (right) come back to life by operation of law? I give a high-level summary here.

Robinson v. Ardoin addressed whether to stay a preliminary injunction in a highly technical Voting Rights Act case about Louisiana’s congressional districts. The Court’s analysis of timeliness is of general interest in preliminary injunction practice involving similar situations (a board election or vote, etc.), even though some of the policy interests involved are unique to elections for public office. The key facts were:

• The primary election at issue was five months away; the deadline for a candidate to qualify for that election by paying a fee was approximately a month away, which was the path chosen by most candidates;
• While “multiple mailings could confuse some voters,” there was “[m]ore than enough time … for the state to assuage any uncertainty,” especially when no one had yet cast a ballot; and
• While “administrative burdens” related to equipment maintenance and voter-roll review were legitimate concerns, evidence showed that the state had significant administrative experience in adjusting to changes in the time, place, and manner of elections.

No. 22-30333 (June 12, 2022).

The Fifth Circuit reversed the denial of a motion to remand when:

1. The defendant’s claimed amount in controversy did not tie to the plaintiff’s specific claim. “Deutsche Bank failed to establish by a preponderance of the evidence that the amount in controversy was over $75,000. Deutsche Bank submitted evidence of the Property’s value [$427,662], which obviously exceeded the jurisdictional threshold. But Deutsche Bank failed to show that the automatic stay at issue here put the house’s value in controversy.”
2. The plaintiff stipulated it sought no more than $74,500. Citing a statement in the plaintiff’s pleading and an near-identical one in a later declaration, the Court said: “The best reading of these two statements is that Durbois is seeking–and will accept–no more than $74,500.” It continued: “Deutsche Bank claims these statements are insufficient. We don’t see why. Durbois used two forms of the word ‘stipulation’ and even bolded it once. A reasonable reader would understand that Durbois was limiting not only what he demanded but what he would accept from the suit. Perhaps Deutsche Bank thinks Durbois “should have used CAPITAL LETTERS …. [o]r maybe … should have added: ‘And [I] really mean it!!!’” But we don’t think such measures are necessary.” (The opinion did not address the potential role of semaphore signals in providing emphasis.)

Durbois v. Deutsche Bank, No. 20-11082 (June 16, 2022) (emphasis added, citation omitted)). The opinion thoroughly reviews the case law on these basic issues, and the “CAPITAL LETTERS” point may prove meme-worthy in the months ahead.

The Fifth Circuit found that the natural-disaster exception to the WARN Act did not apply to COVID-19, reasoning:

The natural-disaster exception provides that “[n]o notice under this chapter shall be required if the plant closing or mass layoff is due to any form of natural disaster, such as a flood, earthquake, or the drought currently ravaging the farmlands of the United States.” Congress’s use of the term “such as” “indicat[es] that there are includable other matters of the same kind which are not specifically enumerated by the standard.”  By providing three examples after “such as,” Congress indicated that the phrase, “natural disaster” includes events of the same kind as floods, earthquakes, and droughts.

Easom v. U.S. Well Servcs., No. 21-20202 (June 15, 2022). The Court went on to discuss specific canons of interpretation relevant to this observation.

CitiMortgage complained that a borrower made his mortgage payments late under a Trial Period Plan, and was thus ineligible for a loan modification. The borrower countered that he satisfied the TPP’s grace period for payments and the Fifth Circuit agreed: “[T]he TPP establishes a grace period. It accepts payment so long as it is made ‘in the month in which it is due.’ Neither the TPP nor the parties use the term ‘grace period’ to describe this language. But that is plainly what the text contemplates. And no one disputes that Burbridge’s payments comply with the governing grace periods.” Burbridge v. Citi Mortgage, No. 21-40309 (June 16, 2022).

Overruling almost 30-year-old precedent from the Fifth Circuit, a 5-4 Supreme Court ruled for a Texas Indian tribe and its plans to operate bingo facilities. Ysleta del  Sur Pueblo v. Texas, No. 20-493 (U.S. June 15, 2022). The El Paso Matters website has a good summary of the case and the parties’ views of the opinion.

In his 19th round of judicial nominations, announced yesterday, President Biden has nominated U.S. Magistrate Judge Dana Douglas of New Orleans to the Fifth Circuit. The White House website provides a short biographical sketch:

From first-year Torts comes XL Insurance Am., Inc. v. Turn Servcs., LLC, with a discussion of the economic loss rule and the physical injury exception to it.

• The en banc Fifth Circuit held in Louisiana ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019 (5th Cir. 1985): “Denying recovery for pure economic losses is a pragmatic limitation on the doctrine of foreseeability, a limitation we find to be both workable and useful.”
• But only a few months later, the Fifth Circuit held that “owners of cargo aboard a ship involved in a collision could recover their economic losses, despite their cargo’s being undamaged,” noting that given “a risk-shifting provision in the cargo-owners’ agreement with the ship owner, there was no risk of ‘double recovery, much less runaway recovery.'” Amoco Transp. Co. v. S/S Mason Lykes, 768 F.2d 659 (5th Cir. 1985).

XL Insurance fell on the Amoco side of the line as to $1.254 million in repair costs after an allision. No. 21-30520 (June 10, 2022).

Our firm again achieved Chambers & Partners Band One status this year for commercial litigation in the D/FW area; my partner Mike Lynn and I wrote the lead article introducing this year’s rankings and talking about our area’s strong economy and legal market.

Certain app developers had a sufficient interest to intervene in an FLSA case against Anadarko when: “The plaintiffs … represented in their contracts with the Intervenors that they were ‘independent professionals’—somewhat in tension with the plaintiffs’ current litigation position that they were really Anadarko’s employees. More importantly, the plaintiffs agreed to arbitrate ‘every claim, controversy, allegation, or dispute arising out of or relating in any way to’ not only their relationship with the Intervenors, but also their resulting work placements with Anadarko.” Field v. Anadarko Petroleum, No. 22-20054 (June 7, 2022).

“Where, as here, a rule 12(b)(1) motion is filed in conjunction with a rule 12(b)(6) motion courts must consider the jurisdictional challenge first. The district court did so here, correctly finding jurisdiction lacking. But the district court then dismissed the action with prejudice, which our caselaw prohibits.” Williams v. Am. Commercial Lines, No. 21-30609 (May 24, 2022) (unpublished).

The Fifth Circuit recently put in place some new local rules about disclosure statements and certificates of service.

While the district court and the Fifth Circuit largely saw eye-to-eye on the contract in Otteman v. Knights of Columbus (a dispute between the Catholic lay organization and an affiliated insurance salesman), they differed on one provision related to the handling of “high-value prospects”:

The parties differ in their understanding of this conduct. Ottemann’s interpretation of this provision, as alleged in his complaint, is that “[S]ection[] 4 of the [GA] Agreement … stated that Plaintiff was an independent contractor that was ‘free to exercise independent judgment as to eligible persons from who applications for insurance will be solicited’ and have ‘freedom of action.’”

The Order responds that the GA contract explicitly stated that Ottemann had no “authority to bind the Order to issue any insurance policy,” and that it was no breach to tell Ottemann not “to waste his (and the Order’s) time and resources soliciting that person.” The Order also argues there would be no damages to sustain a claim because, even if Ottemann was allowed to solicit Lombardi, the Order contractually reserved rights to refuse the issuance of policies.

We hold that Ottemann’s claim as to Section 4 is plausible at the motion to dismiss stage. Although there is nothing particularly surprising about the Order’s interest in diverting high-value prospects into a special sales program, the contract states that the rules and procedures set up by the Order “shall not be construed as interfering with the freedom of action of the General Agent.” The contract does not demarcate the boundary between Ottemann’s freedom of action as a GA and the scope of the Order’s ability to dictate “rules and procedures” that would divert otherwise available insurance prospects from his territory.

No. 21-30138 (June 2, 2022) (additional spacing added).

Perhaps you have been wondering: “Did Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005), implicitly overrule Hale v. Harney, 786 F.2d 688 (5th Cir. 1986), and thereby limit the scope of the Rooker-Feldman doctrine in the Fifth Circuit?”

If so, you need fret no longer. While the Rooker-Feldman doctrine continues to “generally preclude[] lower federal courts ‘from exercising appellate jurisdiction over final state-court judgments,” we now know with certainty, from Miller v. Dunn, that “Rooker-Feldman is inapplicable where a state appeal is pending when the federal suit is filing.” No. 20-11054 (June 2, 2022).

A thicket of issues surrounding an attempted prosecution of Netflix led to an unsuccessful mandamus petition by the prosecutor; among other holdings, the Fifth Circuit said: “We have not been shown any example of an effort by this circuit to consider the approach of the three circuits identified by the district court. Such caselaw from other circuits is not dispositive on whether there is a ‘clear and indisputable’ right to a writ of mandamus. Regardless of the precise reasoning that justifies a federal court to require discovery of state grand jury proceedings, we conclude that Babin has not demonstrated entitlement to mandamus relief under this theory.” No. 22-40306 (May 25, 2022).

At issue in Stewart v. Entergy Corp. was whether BP v. Mayor of Baltimore, 141 S. Ct. 1532 (2021), allowed the review of non-CAFA grounds for removal, in the context of an appeal of a remand order taken pursuant to CAFA. The Fifth Circuit, acknowledging contrary authority from other Circuits, held that it did not, noting that unlike the statute at issue in BP, CAFA requires expedited appeals and thus establishes a unique, CAFA-specific system for review of rulings related to it. No. 22-30177 (May 27, 2022).

By a close vote, the Supreme Court vacated the Fifth Circuit’s order that stayed the trial court’s preliminary injunction in the Netchoice litigation about Texas’s social-media statute.

A contract involving the acquisition of delinquent debt was not unenforceable for lack of a specific price term in Capio Funding LLC v. Rural/Metro Operating Co., LLC, reversing a district-court ruling to the contrary:

The crucial question is whether the term “additional Accounts” rendered the Forward Flow Amendment unenforceable. AMR urges a Shakespearean take—claiming it was but an indefinite promise to the ear, broken only to Capio’s hope.  Capio counters that “additional Accounts” governed all accounts that met the agreed-upon standards. Capio carries the day for two reasons. First, read in context, the term “additional Accounts” has enforceable meaning. Taken together, the plain meaning of the word “additional,” the contract’s clear architecture, and various settled principles of interpretation reveal that “additional Accounts” refers to all qualifying accounts that accrue quarterly.

No. 20-11218 (May 18, 2022). (The Shakespearean reference is to Act V, Scene 8 of Macbeth, when Macbeth reacts in horror to MacDuff explaining that he was not “of woman born”).