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

Akuna filed suit in federal court seeking dissolution of an oil and gas partnership and a determination of its ownership share. The district court granted summary judgment in favor of Akuna and ultimately ordered termination of the partnership and awarded $213,354.01 in partnership profits to Akuna, plus attorneys’ fees. The court rejected Garrisons' claim that Akuna's suit was barred by res judicata, concluding that this federal court suit to terminate the partnership, damages for breach of which had been adjudicated only nine months before the filing of this suit, still involves a different transaction. The court also concluded that Garrison was not deprived of a trial where the records supports that the nature of the district court proceeding approximates a trial on the merits because that court conducted a factual inquiry, assessed credibility, and weighed the evidence. Finally, the court rejected Garrison's claim that it was entitled to present oral testimony on the valuation and ownership issues. Accordingly, the court affirmed the judgment. View "Akuna Matata v. Texas NOM Ltd." on Justia Law

After the American Association of Neurological Surgeons' (AANS) Professional Conduct Committee (PCC) recommended that plaintiff's membership be suspended for six months, he appealed to the AANS Board of Directors. The Board downgraded the suspension to a censure, but plaintiff subsequently resigned from the AANS and filed suit, claiming that the censure harmed his future employment opportunities as an expert witness. Plaintiff filed suit against the AANS for tortious interference with prospective business relations; breach of contract (the AANS bylaws); and impairment of an important economic interest from denial of due process. The court concluded that plaintiff received sufficient due process, including notice, a hearing, and multiple levels of appeal, before he was censured for failing to review all pertinent and available records prior to testifying. Because the district court found only one basis of the censure to be unsupported by due process, the district court was correct in setting aside only that portion of the censure. The court further concluded that no Texas court has recognized a breach of contract challenge to a private association’s disciplinary process. Therefore, plaintiff failed to state a plausible breach of contract claim on which relief could be granted, and the district court properly dismissed. Accordingly, the court affirmed the judgment. View "Barrash v. Amer. Ass'n of Neurological Surgeons" on Justia Law

This lawsuit stemmed from an agreement between the ART entities and the Clapper entities to purchase several apartment complexes. The parties organized the transaction so that an intermediate entity, the Partnership, would be the nominal buyer of the properties. The court found that the ART entities waived their challenge to the district court’s general application of the 19% prejudgment interest rate, its use of a compounding interest calculation, and its calculation of prejudgment interest through and including the date of judgment. Accordingly, the court vacated and remanded with instructions for the district court to reenter the portions of its first judgment that were affirmed in Art Midwest II, and to recalculate pre- and postjudgment interest on the section 4.02(d) of the Partnership Agreement award with reference to the date of the first judgment, October 11, 2011. View "Art Midwest, Inc. v. Clapper" on Justia Law

Sanger filed suit claiming that it was forced to abandon certain prospective business plans after coming up against the anticompetitive practices of HUB, a major player in the nationwide market for veterinary insurance. The district court granted summary judgment for HUB. The court concluded that Sanger has produced sufficient evidence of preparedness to survive the standing inquiry at the summary judgment stage, and the court reversed the district court’s ruling to the contrary. The court also concluded that the alleged conduct does implicate allocation of risk in the insurance market and thus the McCarran-Ferguson Act, 15 U.S.C. 1012(b), exemption. Therefore, the dismissal of the federal antitrust claims is affirmed, but the dismissal of the state antitrust and tortious interference claims is reversed. View "Sanger Ins. Agency v. HUB Int'l" on Justia Law

This case involves multiple causes of action based on allegations of bribery to procure construction sites. Plaintiff alleged that he and his company GRG were punished for refusing to participate in the corruption of municipal authorities. On appeal, the court concluded that GRG has met its summary judgment burden with respect to its Racketeer Influenced Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., claims and has sufficiently supported those elements of its claims for tortious interference with business relations that the district court ruled on. The court affirmed the judgment dismissing HISD from liability for RICO and federal constitutional violations and state law claims; affirmed the judgment dismissing Defendant Marshall from liability for constitutional violations; reversed and remanded for further proceedings the summary judgment dismissing the RICO claims against the non-HISD defendants insofar as they allege injury covering the remainder of the 2009 job-order contract period; and reversed and remanded or further proceedings the summary judgment dismissing the claim against the non-HISD defendants for tortious interference with prospective business relations and the civil conspiracy claims. Accordingly, the court affirmed in part, reversed and remanded in part. View "Gil Ramirez Group, L.L.C. v. Houston Indep. Sch. Dist." on Justia Law

Noatex Corp. and Kohn Law Group, Inc. appealed two district court decisions in an interpleader action brought by Auto Parts Manufacturing Mississippi, Inc. (“APMM”) that named Noatex, King Construction of Houston, L.L.C., and Kohn as claimants. Appellants claimed that the district court erred in discharging APMM from the action, enjoining all parties from filing any proceedings relating to the interpleader fund without a court order, and in denying their motion to compel arbitration. After careful consideration of the trial court record, the Fifth circuit found no reversible error and affirmed the discharge of APMM and its accompanying injunction, the denial of appellants' motion to compel arbitration and to stay proceedings pending arbitration. King Construction was dismissed from these appeals, and appellants' alternative motion to vacate the trial court's rulings was denied. View "Auto Parts Mfg MS, Inc. v. King Const of Houston,LLC" on Justia Law

For nearly two decades, Stanford International Bank, Limited (Stanford) operated a multi-billion dollar Ponzi scheme through more than 130 affiliated entities. Beginning in 2005, Stanford developed a plan to increase awareness of its brand among sports audiences. It targeted this group because of its large proportion of high-net-worth individuals who would have been most likely to invest with Stanford. Stanford became a title sponsor of the Stanford St. Jude’s Championship, an annual PGA Tour event. Upon hearing of Stanford’s sponsorship, The Golf Channel, Inc., which broadcasted the tournament, offered Stanford an advertising package to augment its marketing efforts. Golf Channel did not design Stanford’s media strategy or develop the content of the advertisements. However, the agreement required Golf Channel’s final approval. Stanford satisfied most of its monthly payment obligations to Golf Channel and, before the agreement expired, entered into a four-year renewal. By the time this lawsuit was initiated, Stanford had paid at least $5.9 million to Golf Channel pursuant to the agreement. In February 2009, the SEC uncovered Stanford’s Ponzi scheme and filed a lawsuit requesting the district court to appoint a receiver over Stanford. The district court assumed exclusive jurisdiction, seized Stanford’s assets, and appointed Ralph Janvey to serve as receiver. Pursuant to his powers, the receiver took custody of any and all assets owned by or traceable to the receivership estate, which included recovering any voidable transfers made by Stanford before going into receivership. The receiver discovered the payments to Golf Channel and filed suit under the Texas Uniform Fraudulent Transfer Act (TUFTA) to recover the full $5.9 million. After initial discovery, the parties filed cross-motions for summary judgment. The court granted Golf Channel’s motion and denied the receiver’s motion. The district court determined that although Stanford’s payments to Golf Channel were fraudulent transfers under TUFTA, Golf Channel was entitled to judgment as a matter of law on its affirmative defense that it received the payments in good faith and in exchange for reasonably equivalent value (the market value of advertising on The Golf Channel). The receiver appealed. At issue here was whether Golf Channel proved the second element of its affirmative defense, that its advertising services provided “reasonably equivalent value” as defined under TUFTA. The Fifth Circuit Court of Appeals concluded that Golf Channel failed to prove that it exchanged something of value: that its services preserved the value of Stanford’s estate or had any utility from the creditors’ perspective. Golf Channel only brought forth evidence showing the market value of its services. This was insufficient to satisfy its burden under TUFTA of proving value to the creditors. View "Janvey v. Golf Channel, Inc." on Justia Law

Pilgrim's Pride was the successor-in-interest to Pilgrim's Pride Corporation of Georgia f/k/a Gold Kist, Inc., which was the successor-in-interest to Gold Kist, Inc. In 1998, Gold Kist sold its agriservices business to Southern States Cooperative, Inc. To facilitate the purchase, Southern States obtained a bridge loan that was secured by a commitment letter between Southern States and Gold Kist. The letter permitted Southern States to require Gold Kist to purchase certain securities from Southern States. In early 2004, Gold Kist and Southern States negotiated a price at which Southern States would redeem the securities. Gold Kist’s Board of Directors, instead of accepting the offer, decided to abandon the securities for no consideration. The issue this case presented for the Fifth Circuit's review centered on whether whether Pilgrim’s Pride Corporation's loss from its abandonment of securities was an ordinary loss or a capital loss. The Tax Court (in what appeared to be the first ruling of its kind by any court) ruled that 26 U.S.C. 1234A(1) applied to the abandonment loss and required that it be classified as capital. However, the Fifth Circuit disagreed. Because section 1234A(1) only applied to the termination of contractual or derivative rights, and not to the abandonment of capital assets, the Court reversed the Tax Court and rendered judgment in favor of Pilgrim's Pride. View "Pilgrim's Pride Corporation v. CIR" on Justia Law

A jury found that PlastiPure and CertiChem violated the Lanham Act, 15 U.S.C. 1125(a), by making false statements of facts about Eastman's plastic resin product called Tritan. The district court entered an injunction against both companies and the companies appealed, challenging the jury verdict and the injunction. The court held that the Act prohibits false commercial speech even when that speech makes scientific claims. The court rejected the companies' contention that the district court should not have entered its injunction because the companies' statements about Tritan containing estrogenic activity (EA) from BPA are not actionable statements under the Act. The court concluded that application of the Act to the companies’ promotional statements will not stifle academic freedom or intrude on First Amendment values; the injunction only applies to statements made “in connection with any advertising, promotion, offering for sale, or sale of goods or services;" the companies may continue to pursue their research and publish their results; and the companies may not push their product by making the claims the jury found to be false and misleading. The court rejected the companies' argument that the jury's verdict must be reversed where a reasonable jury could have concluded that the companies' statements were false and misleading. The court rejected the companies' claims of error in the jury instructions. Accordingly, the court affirmed the judgment. View "Eastman Chemical Co. v. PlastiPure, Inc." on Justia Law

Plaintiffs filed suit against oil and gas companies and their insurers, alleging that aspects of the companies' pipeline activities impeded water flows and commercial navigation, causing economic damages. On appeal, plaintiffs challenged the district court's dismissal of their complaint for failure to state a claim in favor of two defendants, DIGC and Willbros. The court affirmed, concluding that plaintiffs failed to state a claim for a maritime tort against DIGC and Willbros. Further, the court adopted the Golden State rule where a defendant is alleged to be a corporate successor to a maritime tortfeasor but is not accused of having engaged in tortious conduct. In this case, plaintiffs' allegations that Dow is the "predecessor" to DIGC and that DIGC operated under an Army Corps permit originally issued to Dow do not show that an exception to Golden State's default rule of nonliability plausibly applies. Without more, plaintiffs have failed to state a claim for successor liability against DIGC. View "In re: Louisiana Crawfish Producers" on Justia Law