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

SnoWizard and Southern Snow, sellers of flavored shaved ice confections, have been involved in litigation for the past ten years in state court, federal district court, and before the Patent and Trademark Office in the Federal Circuit. In this appeal, Southern Snow challenges the district court’s dismissal of its claims under Rule 12(b)(6) and SnoWizard cross-appeals the district court’s denial of its motions for sanctions against Southern Snow. Because the claims against SnoWizard are precluded, and because the claims against Morris and Tolar fail to satisfy the requirements for conspiracy, obstruction of justice, or malicious prosecution, the court affirmed the dismissal of all the claims. Given that Southern Snow advanced arguments that, although creative, were not “ridiculous,” the court affirmed the district court’s denials of sanctions. View "Snow Ingredients, Inc. v. SnoWizard, Inc." on Justia Law

In a prior appeal of this tax case, the court affirmed the district court’s decision to disregard the partnership form of Chemtech Royalty Associates, L.P. (Chemtech I), and Chemtech II, L.P. (Chemtech II), for tax purposes but vacated and remanded as to the penalty award. On remand, the district court reinstated the vacated penalty award and further held that a tax penalty for gross-valuation misstatement applied to Chemtech II. Real party in interest Dow now appeals the penalty award solely as to Chemtech I. The court rejected Dow’s theory that the court's mandate required the district court to consider whether Dow had a reasonable basis and substantial authority for its sham-partnership position; the district court did not err in failing to justify the negligence and substantial-understatement penalties on the basis of the court's sham-partnership holding, but it could have done so; and the court affirmed the applicability of the negligence and substantial-understatement penalties on the ground that the district court would have been correct to do so. The court also concluded that Dow lacked substantial authority for its position that Chemtech I was a valid partnership. For substantially the same reasons, Dow fails to meet the lesser reasonable-basis standard. Accordingly, the court affirmed the judgment. View "Chemtech Royalty Ass'n, LP v. United States" on Justia Law

Yumilicious, a Texas frozen yogurt company, filed suit against franchisees based in South Carolina after disputes over the franchise agreement arose. Defendants filed a countercomplaint with various counterclaims. The district court granted summary judgment for Yumilicious and dismissed the remainder of the franchisees' counterclaims with prejudice for failure to state a claim under Rule 12(b)(6). The court affirmed the district court's grant of partial summary judgment and affirmed the dismissal of the franchisees' remaining counterclaims because the franchisees failed to plead the required elements of their statutory claims, failed to introduce facts suggesting non-economic injuries, failed to introduce evidence of fraudulent inducement, and contractually waived their right to punitive and consequential damages. View "Yumilicious Franchise, L.L.C. v. Barrie" on Justia Law

The Court Appointed Receiver for the Stanford International Bank Ltd. filed a fraudulent transfer claim against defendant, a former international advisor to the Stanford entities. The court concluded that there was a legally sufficient evidentiary basis for the jury’s finding that the Receiver did not discover and could not reasonably have discovered the transfers to defendant and their fraudulent nature until after February 15, 2010, and that, therefore, the Receiver’s fraudulent transfer claim was timely under the Texas Uniform Fraudulent Transfer Act’s, Tex. Bus. & Com. Code 24.010 statute of repose. Therefore, the district court did not err in denying defendant's post-verdict motion for judgment as a matter of law as to the fraudulent transfer. The court did not reach the alternative issues raised by defendant. Finally, the court denied defendant's request to abate this appeal where defendant did not object during trial to this specific language in the jury instruction and he did not request a jury finding on market value even though the parties presented conflicting evidence of market value at trial. Further, defendant failed to brief this issue on the merits. Accordingly, the court affirmed the judgment. View "Janvey v. Romero" on Justia Law

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