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

This case arose when Cat Tech sought indemnification from its insurers after Cat Tech damaged several components of a hyrotreating reactor owned by Ergon Refining, Inc. and arbitrators entered an award against Cat Tech for the damage. Insurers subsequently denied the claim, contending, inter alia, that the "your work" exclusion found in the policies precluded coverage for damage to the reactor. The district court found that insurers had no duty to indemnify Cat Tech. The court held that the information contained in the arbitration award was insufficient to properly apply the "your work" exclusion. As such, the court concluded that the district court erred when it relied on the award in granting insurer's summary judgment motion. On remand, the district court should conduct any additional fact-finding necessary to determine whether the damage suffered by Ergon's reactor was limited only to those components upon which Cat Tech worked, or instead included other components unrelated to Cat Tech's operations. Accordingly, the judgment was reversed and the case remanded for further proceedings.

Plaintiff brought suit against various officials arising from his name not being placed on the 2010 primary election ballot in Houston. Plaintiff appealed the dismissal of his complaint for failure to state a claim. The court held that plaintiff's procedural due process claim was properly rejected where plaintiff had no property right to be a candidate. The court also held that plaintiff's substantive due process claim failed because there were no disputed facts regarding plaintiff's application containing an incorrect residential address where plaintiff made an oral admission that he did not live at the listed address. The court further held that plaintiff's Equal Protection claim was properly denied where the actions of the official at issue did not constitute intentional or purposeful discrimination. The court finally held that plaintiff failed to establish that Section 141.032(e) of the Texas Election Code was unconstitutional. Accordingly, because plaintiff filed his application for candidacy in the last hour of the last possible day, which limited his opportunity to refile a correct application, the court affirmed the judgment.

This case involved a claim brought under 42 U.S.C. 1981 by a terminated employee against his former union, which represented him in a grievance hearing in connection with his termination. Plaintiff alleged that defendants discriminated against him on account of his race by failing to argue during the grievance hearing that he was being terminated for a racially discriminatory reason. The court held that plaintiff failed to state a prima facie claim for racial discrimination by the union under section 1981, and therefore the district court was correct to grant defendants' motion for summary judgment.

Bankruptcy trustee and nondebtor spouse appealed the bankruptcy court's grant of summary judgment to H.D. Smith. The trustee and spouse argued that the bankruptcy court erred in holding that H.D. Smith had an enforceable lien against the proceeds of the sale of the debtor's homestead property in excess of the homestead exemption. The court held that, regardless of whether the lien attached prior to the bankruptcy proceedings, the trustee took the property with the state-law character it had in the debtor's hands: a property with an unenforceable lien. Therefore, the court reversed the district court's grant of summary judgment. The court also held that because it concluded that H.D. Smith's lien was unenforceable, it need not consider whether enforcing the lien would violate 11 U.S.C. 362 or 11 U.S.C. 549. The court also did not consider the issues that the spouse argued in her briefing regarding homestead rights.

This case stemmed from allegations of improprieties at the Brownsville Independent School District (BISD), including allegations that appellants were manipulating the bidding process for the BISD's Stop Loss Insurance Coverage. Appellants, all members of the BISD Board of Trustees (Board), argued that the district court should have granted their motion for summary judgment because they were entitled to qualified immunity. The court found no error in the district court's holding that genuine issues of material fact existed with respect to whether appellants violated appellee's First Amendment rights. The court also held that the district court did not err when it denied summary judgment on appellants' qualified immunity defense.

Plaintiff partnership was formed for the purpose of facilitating the acquisition of a portfolio of Chinese nonperforming loans (NPLs). The IRS determined that plaintiff was a sham partnership that need not be respected for tax purposes and that plaintiff's allocation of the $200 million loss to the deducting partner should be disallowed. At issue on appeal are the income-tax consequences of three interrelated transactions entered into by plaintiff and its three members. The court held that the district court correctly held that, while the acquisition of an interest in a portfolio of Chinese NPLs had economic substance, the plaintiff partnership was a sham that must be disregarded for federal income-tax purposes. As a consequence, that acquisition must be recharacterized as a direct sale. The court also held that the district court was correct to disallow all accuracy-related penalties on the ground that plaintiff had reasonable cause for, and exhibited good faith in, reporting the positions it took on its 2002 partnership return. Accordingly, the judgment was affirmed.