Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

The original leaseholder transferred its interest to Martin Marietta Materials, Inc. (“Martin Marietta”), in 2014, and Elmen Holdings, L.L.C. (“Elmen”), acquired title to the underlying land in 2018. Elmen contends that Martin Marietta did not make required royalty payments to it or prior lessors; Elmen sought a declaration that the lease had terminated. Both parties moved for summary judgment, and a magistrate judge recommended that the district court grant Elmen’s motion and deny Martin Marietta’s. The district court adopted that recommendation.   The Fifth Circuit disagreed with the magistrate judge’s and district court’s reasoning, but affirmed the summary judgment for Elmen and affirmed the denial of summary judgment for Martin Marietta. The court explained that a payment or tender—such as Martin Marietta’s April 12 check— made to someone other than the lessor is not made “in the manner provided” by the Gravel Lease. The sentence in paragraph six that Martin Marietta relies on does not apply. Further, the court wrote that the undisputed facts show that Martin Marietta failed to pay royalties in 2017, received adequate notice of this failure, and did not cure within ten days of that notice. Therefore, the Gravel Lease terminated ten days after Martin Marietta received the relevant email, and summary judgment in favor of Elmen is warranted. View "Elmen Holdings v. Martin Marietta" on Justia Law

Antero Resources, Corp., an oil and gas production company, sued a former employee (“Appellant”)  for breach of fiduciary duty, alleging that Appellant abused his position of operations supervisor to award service contracts to companies owned by his close friend Tommy Robertson. Antero also alleged that, after winning the contracts, Robertson’s companies deliberately delayed providing “drillout” operations, resulting in millions of dollars of overbilling. A jury found Appellant liable in the amount of $11,897,689.39, which consists of $11,112,140.00 in damages and $775,549.39 as recoupment for the value Appellant received as a result of the breach. The district court entered a final judgment in the same amount, along with post-judgment interest. The district court ordered Appellant to pay pre-judgment interest and to forfeit 130,170 shares of stock in Antero Midstream. Appellant challenged the judgment on two bases.   The Fifth Circuit concluded that sufficient evidence supported the jury’s finding on damages. The court further held that the district court’s decision to deny Appellant the opportunity to pursue post-trial discovery was an abuse of discretion. The court explained that discovery is procedural; federal law governs the question of whether a party is entitled to take post-trial discovery. Discovery after evidence has closed is typically reserved for situations where the trial reveals a new basis for seeking further information. Accordingly, the court vacated the order denying Appellant’s motion to amend the judgment. The court remanded to reconsider whether to allow Appellant to pursue discovery relating to Antero’s settlement with the Robertson companies and whether to offset the judgment in light of that settlement. View "Antero Resources v. Kawcak" on Justia Law

Kenai Ironclad Corporation (“Kenai” or “Plaintiff”) alleged that CP Marine Services, LLC, breached its contract to repair and convert Kenai’s offshore supply vessel to a salmon fishing tender for use in Alaska. After Kenai expressed dissatisfaction with the work, the relationship deteriorated. Kenai alleged that, after paying its final invoice, it attempted to remove its vessel from CP Marine’s shipyard, but as it did so, CP Marine and codefendant Ten Mile Exchange, LLC (“TME”) (collectively, “Defendants”) rammed, wrongfully seized, detained, and converted Kenai’s vessel for five days before finally releasing it the district court found that CP Marine did not breach its contract with Kenai but did wrongfully seize, detain, and convert the vessel. The district court awarded punitive damages and attorney’s fees for Defendants’ bad faith and reckless behavior in ramming, seizing, and converting the vessel for five days. Defendants appealed.   The Fifth Circuit affirmed the district court’s finding that Defendants wrongfully seized and converted Kenai’s vessel in bad faith and in a manner egregious enough to warrant an award of punitive damages. The court vacated the district court’s award of damages and remanded on the limited basis of clarifying the court’s award. The court found that Kenai presented sufficient evidence and testimony to support the district court’s finding that Defendants’ conduct was in bad faith, in callous disregard for the safety of the people aboard the vessels, and in reckless disregard of Kenai’s rights. Hence, the district court did not clearly err in finding facts sufficient to support an award of punitive damages. View "Kenai Ironclad v. CP Marine Services" on Justia Law

On a Mesa Airlines flight, a flight attendant grew concerned about two passengers. She alerted the pilot, who, despite the reassurance of security officers, delayed takeoff until the flight was canceled. The passengers were told the delay was for maintenance issues, and all passengers, including the two in question, were rebooked onto a new flight. After learning the real reason behind the cancellation, Passenger Plaintiffs sued Mesa under 42 U.S.C. Section 1981. The airline countered that it had immunity under 49 U.S.C. Section 44902(b). The district court granted Mesa’s motion for summary judgment. At issue is whether such conduct constitutes disparate treatment under Section 1981, whether a Section 1981 claim can exist without a “breach” of contract, and whether Section 44902(b) grants immunity to airlines for allegedly discriminatory decisions.   The Fifth Circuit reversed. The court explained that the right to be free from discrimination in “the enjoyment of all benefits, privileges, terms and conditions” means that one has the right to be free from discrimination in the discretionary “benefits, privileges, terms and conditions” of a contract, too. Defendants cannot claim that flying at the originally scheduled time is not a “benefit” of the contract at all. Further, the court explained that a hand wave, refusing to leave one’s assigned seat, boarding late, sleeping, and using the restroom are far from occurrences so obviously suspicious that no one could conclude that race was not a but-for factor for the airline’s actions. The court wrote that because “a reasonable jury could return a verdict for” Plaintiffs, the dispute is genuine. View "Abdallah v. Mesa Air Group" on Justia Law

Seven years ago, A.D. was hired to create a PVT (“pressure volume temperature”) simulation software program. Sah was hired by A.D. to develop a PVT software program in exchange for a stake in one of A.D.’s companies, IPSS. Eight months later, a product called InPVT hit the market. Plaintiff Calsep started looking into InPVT. In Calsep’s assessment, A.D. didn’t have the technical skills or resources to develop a PVT product. Calsep filed another motion to compel, alleging that A.D. still hadn’t adequately disclosed his source code control system. Although A.D. had “produced [a] purported source code system” in April and July, Calsep claimed that these productions were “undoubtedly incomplete” and “had been manipulated.” Believing the deletions to be intentional, Calsep filed a motion for sanctions. Afterward, A.D. filed a motion for reconsideration based on newly discovered forensic images that “vindicated” him. The magistrate judge recommended denying the motion, and the district court agreed, denying the motion for reconsideration of the sanctions order. A.D. appealed.   The Fifth Circuit affirmed the district court’s decision on A.D.'s motion for reconsideration. The court explained that A.D. cannot offer any reason—other than mere forgetfulness—why he couldn’t acquire the images sooner. Further, A.D. hasn’t shown that he acted with diligence during the case to locate these images. Moreover, the court explained that although A.D. argues that the images change the game, Calsep’s expert insists that too much data is still missing from the source code control system, rendering a proper review impossible. The court noted that there was no reason to question the district court’s judgment crediting Calsep’s expert testimony. View "Calsep v. Dabral" on Justia Law

Sixteen professional models (the Models) sued three Texas strip clubs (the Clubs) following the Clubs’ use of the Models’ likeness for advertising campaigns without the Models’ consent. Relevant to those claims, Princeton Excess and Surplus Lines Insurance Company (PESLIC) filed this declaratory judgment action. PESLIC issued two commercial liability insurance policies to the Clubs covering the time period relevant to the Models’ claims. PESLIC named both the Models and the Clubs as Defendants. The parties disputed whether that policy’s Exhibitions and Related Marketing Exclusion rendered illusory the Personal and Advertising Injury coverage. The district court agreed with the Models and the Clubs that it did. The district court also held that PESLIC had a duty to indemnify the Clubs under the 02 Policy. PESLIC appealed.   The Fifth Circuit reversed, rendered in part, and remanded. The court explained that PESLIC does not have a duty to defend the Clubs under the 01 Policy. Its duty to indemnify under the 01 Policy depends on the final resolution of the state case. As for the 02 Policy, PESLIC does not have a duty to defend or indemnify under it because the 02 Policy does not provide coverage for the claims alleged by the Models. The court held that the district court erred by concluding otherwise. Accordingly, the court reversed the district court’s summary judgment, rendered in part, and remanded the remaining issue of indemnity under the 01 Policy with instructions for the district court to stay disposition of that issue pending final resolution of the underlying state court lawsuit. View "Princeton Excess v. AHD Houston" on Justia Law

Plaintiff planned on hosting a music festival in Austin, Texas. However, Austin canceled the event due to concerns related to COVID-19. In turn, ticket holders who were refused a refund sued, resulting in a judgment against PLaintiff of over $1 million. Plaintiff sued its insurer for failure to defend against the class action. The district court denied Plaintiff's motion for summary judgment and granted the insurer's motion for summary judgment. Plaintiff appealed.On appeal. the parties agreed that the district court had jurisdiction under 28 U.S.C. 1332(a)(1) and Plaintiff claimed the Fifth Circuit had jurisdiction pursuant to 28 U.S.C. 1291.Exercising its independent judgment, the Fifth Circuit could not find proper allegations or evidence of Plaintiff's citizenship, giving the parties an opportunity to respond. However, the Fifth Circuit found the proffered evidence of Plaintiff's citizenship insufficient, remanding the case for the limited purpose of determining whether jurisdiction exists. View "SXSW v. Federal Insurance" on Justia Law

PHH Mortgage Corporation (PHH) is the successor-in-interest to Ocwen Loan Servicing, LLC (Ocwen). PHH filed suit against Old Republic in district court, alleging a single cause of action for breach of contract. Old Republic filed a motion for summary judgment, arguing that PHH’s breach of contract claim failed as a matter of law because there was no defect in title to the Entire Southern Tract. The district court denied the parties’ cross-motions for summary judgment without reaching the merits of either motion. Rather, the district court construed the parties’ claims as a request for a declaration of title in the Entire Southern Tract. On this basis, the district court determined that any person claiming an interest in the Entire Southern Tract is a required party under Rule 19 and dismissed the case under Federal Rule of Civil Procedure 12(b)(7).   The Fifth Circuit vacated and dismissed. The court explained that the district court’s Rule 19(a) analysis is rooted in a misunderstanding of Texas law. Contrary to the district court’s conclusion below, Texas law draws a sharp distinction between a breach of contract action against a title insurance company and a trespass-to-try-title action. Further, the court explained that by deciding to dismiss this case based solely on its conclusions under Rule 19(a), the district court failed to do what “Rule 19 clearly requires a court to do: undertake an examination of the practical and equitable Rule 19(b) factors actually raised by the absence of a particular party in the case before it.” View "PHH Mortgage v. Old Republic National" on Justia Law

Princeton Excess and Surplus Lines Insurance Company (PESLIC) filed this declaratory judgment action. PESLIC issued two commercial liability insurance policies to the Clubs covering the time period relevant to the Models’ claims: Number 1RA3GL0000179–01, with a policy period of November 9, 2015, to November 9, 2016 (the 01 Policy); and Number 1RA3GL0000179–02, with a policy period of November 9, 2016, to November 9, 2017 (the 02 Policy). The policies have identical coverage provisions but contain slightly different exclusions. The parties dispute whether this exclusion renders illusory the Personal and Advertising Injury coverage provided in the 02 Policy. If it does not, then the Clubs have no coverage applicable to the Models’ claims; if it does, then they have coverage, as the district court held.   The Fifth Circuit reversed the district court’s summary judgment ruling. The court held PESLIC does not have a duty to defend or indemnify the Clubs in the underlying lawsuit because neither the 01 Policy nor the 02 Policy provides coverage for the claims alleged by the Models. The court explained that the text of the 02 Policy is not ambiguous, and Texas law “presumes that the party knows and accepts the contract terms.” Those terms disclose that the policy’s Personal and Advertising Injury coverage comprises a single category of coverage and further that the Exhibition and Related Marketing Exclusion removes much but by no means all, of that coverage. The 02 Policy is, therefore, not illusory, and the exclusion must be enforced, constraining the court to conclude there is no coverage for the Models’ underlying claims under the 02 Policy. View "Princeton Excess v. AHD Houston" on Justia Law

On a  Mesa Airlines flight from Birmingham to Dallas Fort Worth International Airport, a flight attendant grew concerned about two passengers, Plaintiffs.  She alerted the pilot, who, despite the reassurance of security officers, delayed takeoff until the flight was canceled. The passengers were told the delay was for maintenance issues, and all passengers, including the two in question (Plaintiffs), were rebooked onto a new flight that reached DFW. After learning the real reason behind the cancellation, Plaintiffs sued Mesa under 42 U.S.C. Section 1981. The airline countered that it had immunity under 49 U.S.C. Section 44902(b) and 49 U.S.C. Section 44941(a).     Given the unusual facts that all passengers had their flight canceled, the primary issue on appeal whether such conduct constitutes disparate treatment under Section 1981, whether a Section 1981 claim can exist without a “breach” of contract, and whether Section 44902(b) grants immunity to airlines for allegedly discriminatory decisions, thereby negating Section 1981’s application against airlines in this context.   The Fifth Circuit reversed the district court’s judgment. The court held that Section 1981 prohibits discrimination in contracting. Section 44902(b) provides immunity to airlines in their decision to remove passengers they feel are “inimical to safety.” There is a straightforward way to reconcile these two statutes: If a passenger’s protected status is the but-for cause of the airline’s decision to remove them (such that the passenger has made out a Section 1981 claim), then Section 44902(b) does not grant immunity to the airline because the decision is not based on a fear that the passenger was inimical to safety. View "Abdallah v. Mesa Air Group" on Justia Law