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

In April of 2022,the Bureau of Alcohol, Tobacco, Firearms,and Explosives (“ATF”)issued a Final Rule in which the terms “firearm” and “frame or receiver,” among others, were given “an updated, more comprehensive definition. The Final Rule was almost immediately the subject of litigation claiming that ATF had exceeded its statutory authority, including this case.The Plaintiffs claimed that portions of the Final Rule, which redefine “frame or receiver” and “firearm,” exceeded ATF’s congressionally mandated authority. The plaintiffs requested that the court hold unlawful and set aside the Final Rule, and that the court preliminarily and permanently enjoin the Government from enforcing or implementing the Final Rule. The district issued, and then expanded upon, a preliminary injunction before granting Plaintiffs' motion for summary judgment, vacating the Final Rule.The Fifth Circuit held that the two challenged portions of the Final Rule exceeded ATF's authority.At this point, all that remained before the court was whether the appeal of the district court’s final judgment vacating the Final Rule in its entirety. In reviewing the district court's vacatur of the entire Final Rule, the court vacated the vactur order, remanding for further consideration of the remedy, considering the court’s holding on the merits. View "VanDerStok v. Garland" on Justia Law

Plaintiff Jane Doe AW, a former criminal clerk in the Burleson County Attorney’s Office, alleged that Burleson County Judge Mike Sutherland used his power and authority as a county judge to sexually assault her on several occasions. Doe claimed that Sutherland sexually assaulted her once in his restaurant, Funky Junky, LLC (“Funky Junky”), and twice in his office. According to Doe, when she complained to Sutherland about the abuse, she was terminated from her job. The district court entered final judgment, ordering that Doe take nothing against Burleson County. Doe timely appealed the judgment. Doe raised three issues on appeal: (1) whether Sutherland, as the Burleson County Judge, was a policymaker with final decision-making authority for Burleson County with respect to Doe’s claim; (2) whether the Magistrate Judge abused her discretion when she reversed and vacated a prior order on a dispositive motion; and (3) whether the Magistrate Judge erred in indicating that she would deny a party’s challenge for cause unless the parties agreed on the challenge.   The Fifth Circuit affirmed. The court explained that despite his position as County Judge, Sutherland lacked the requisite policymaking authority to hold Burleson County liable for his alleged sexual misconduct. Monell requires that “the municipal official . . . possess final policymaking authority for the action in question.” The court wrote that even if the Texas constitutional provision gave Sutherland, as County Judge, broad ability to oversee operations in the county, this authority is immaterial because Doe fails to establish that Sutherland possessed the requisite authority as it relates specifically to the alleged sexual abuse. View "Doe AW v. Burleson County, TX" on Justia Law

Plaintiffs were injured in an auto accident and brought product liability claims against the vehicle’s manufacturer. In the course of litigation, the manufacturer moved to exclude Plaintiffs’ two liability experts, moved for a new trial and a judgment as a matter of law, and objected to the denial of a jury instruction regarding the presumption of nonliability (“the presumption”). Ultimately, the manufacturer was found liable and ordered to pay nearly $5 million in damages.On appeal, the manufacturer argued the district court erred in denying the motions and rejecting the requested instruction. The Fifth Circuit affirmed, finding that Plaintiffs’ experts based their opinions on reliable methodologies and provided relevant, helpful testimony. View "Kim v. American Honda Motor" on Justia Law

A writ of mandamus is reserved for extraordinary circumstances. TikTok, Incorporated, and various related entities contend that the district court’s denial of their motion to transfer to the Northern District of California was so patently erroneous that this rare form of relief is warranted. The district court denied Petitioners’ motion to transfer after finding that five of the eight factors were neutral, and three weighed against transferring to California.The Fifth Circuit granted the petition for writ of mandamus, finding that denying Petitioners’ motion to transfer was a clear abuse of discretion. The court explained that in the district court’s view, Petitioners’ large presence in the Western District of Texas raises an “extremely plausible and reasonable inference” that these employees possess some relevant documents. But the district court cannot rely on the mere fact that Petitioners have a general presence in the Western District of Texas because Volkswagen commands courts to assess its eight factors considering the circumstances of the specific case at issue. Further, the court explained that under Volkswagen’s 100-mile threshold, the Northern District of California is a clearly more convenient venue for most relevant witnesses in this case. The district court committed a clear abuse of discretion in concluding otherwise. View "In Re: TikTok, Inc." on Justia Law

The Securities and Exchange Commission (“SEC”) adopted a rule requiring issuers to report day-to-day share repurchase data once a quarter and to disclose the reason why the issuer repurchased shares of its own stock. Despite Petitioners’ comments, however, the SEC maintained that many of the effects of the daily disclosure requirement could not be quantified. Petitioners filed a petition for review of the final rule.   The Fifth Circuit granted the petition for review and remanded with direction to the SEC to correct the defects in the rule within 30 days of this opinion. The court found that the e SEC’s notice and comment period satisfies the APA’s requirements. However, the court held that the SEC acted arbitrarily and capriciously, in violation of the APA, when it failed to respond to Petitioners’ comments and failed to conduct a proper cost-benefit analysis. The court explained that almost every part of the SEC’s justification and explanation of the rule reflects the agency’s concern about opportunistic or improperly motivated buybacks. That error permeates—and therefore infects—the entire rule. The court explained that short of vacating the rule, it affords the agency limited time to remedy the deficiencies in the rule. View "Chamber of Com of the USA v. SEC" 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

Appellee attempted to use an “inversion table” located at an Anytime Fitness franchise. The equipment allegedly failed, and Appellee suffered neuromuscular injuries. Appellee filed a personal injury suit in Louisiana court against the franchise owner, Thornhill Brothers Fitness, LLC (“Thornhill”). An amended complaint named an additional defendant, franchisor Anytime Fitness, LLC (“Anytime”). Thornhill agreed to assign all rights it had “against Anytime Fitness LLC” to the Appellees, including any rights arising from “the indemnity agreement contained in the Franchise Agreement” between Thornhill and its franchise parent, Anytime. Anytime then protested in the bankruptcy court. The bankruptcy court vacated its prior order and allowed Anytime a hearing. But in July 2022, the bankruptcy court entered a new order ratifying the actions it took originally. Anytime appealed that July 2022 order and the district court affirmed.  At issue on appeal is whether 11 U.S.C. Section 365(f) or any other portion of Title 11, authorizes a bankruptcy court’s approval of a debtor’s partial assignment of an executory contract.   The Fifth Circuit wrote that it does not and reversed the bankruptcy court’s contrary order and remanded. The court explained that it does not construe any other provision of the Code to permit circumvention of the court’s interpretation of Section 365(f). It’s true that the Code contains various catch-all provisions. But those catch-alls do not create substantive powers not committed to the bankruptcy court by some other section. The court wrote that since the bankruptcy court order at issue here does not satisfy Section 365, it does not matter whether it satisfied Jackson Brewing. View "Anytime Fitness v. Thornhill Brothers" on Justia Law

Defendant State of Louisiana, ex rel. Jeff Landry (“the State”) sought to dissolve a consent decree that pertains to the method of selecting justices for the Louisiana Supreme Court. The State attempted to dissolve the consent judgment under the first and third clauses of Rule 60(b)(5) of the Federal Rules of Civil Procedure. The State contended that the judgment has been satisfied, released, or discharged because the State has substantially complied with the decree for more than thirty years and the decree was intended to terminate at a defined milestone. The State further contended that it is no longer equitable to enforce the consent judgment prospectively because of widespread malapportionment in Louisiana’s supreme court election districts. The district court denied the State’s motion to dissolve.   The Fifth Circuit affirmed. The court held that the district court did not abuse its discretion in denying the dissolution motion, as the State has failed to meet its evidentiary burdens under both the first and third clauses of Rule 60(b)(5). The court explained that the State did not meet the evidentiary burden associated with Rufo’s first prong, which requires a showing of changed factual or legal circumstances that warrant reexamination of a consent decree. The State only makes very general claims about malapportionment and asserts that “new policy concerns” have arisen which satisfy Rufo. But the State offers almost no evidentiary support for this argument. Further, the court wrote that the State’s argument that continued enforcement of the Consent Judgment is detrimental to the public interest is unavailing. View "Chisom v. State of Louisiana" on Justia Law

Plaintiff Armadillo Hotel Group, LLC (“Armadillo”) is a buyer and operator of modular and mobile structures throughout North America. According to Armadillo, Defendants Todd Harris and Jason McDaniel were hired in May 2019 to oversee Armadillo’s construction operations and its hotel, food, and beverage operations, respectively. McDaniel resigned in January 2021, Harris in July 2021. Harris and McDaniel asserted that they entered employment agreements with AHG Management as part of the joint venture, but AHG Management breached these agreements by failing to pay the agreed-upon salary, bonuses, and profit-sharing interests. They asserted claims of fraudulent inducement, negligent misrepresentation, tortious interference, and unjust enrichment. Harris, McDaniel, SDRS, and BMC moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. The district court granted the non-GML defendants’ motion to dismiss with prejudice.   The Fifth Circuit reversed. The court explained that it could not find sufficient information in the record to decide if Armadillo and AHG Management were in privity with each other. The fact that the same attorneys filed AHG Management’s amended state counterclaim and Armadillo’s federal complaint is insufficient to show privity. Accordingly, the court found that the district court did not have sufficient information or even assertions about the relationship of Armadillo and AHG Management to perform such an assessment. View "Armadillo Hotel v. Harris" on Justia Law

Before Plaintiffs’ cases were distributed to the district court, these cases were part of MDL 2179, the multi-district litigation proceeding before United States District Court Judge Carl J. Barbier in the Eastern District of Louisiana. Judge Barbier established what is known as the “B3 Bundle” within the overall litigation. The B3 Bundle included claims for personal injury and wrongful death due to exposure to oil and/or other chemicals used during the response to the disaster. 85 B3 cases were assigned to District Judge Barry Ashe. Before his confirmation, Judge Ashe he was a longtime partner at the Stone Pigman law firm. A little more than two weeks after Judge Ashe began granting summary judgments following the exclusion of Dr. Cook, Street’s counsel moved to disqualify Judge Ashe in the five cases in which he had excluded Dr. Cook and in other cases where Daubert and summary judgment motions were still pending. Plaintiffs argued that Judge Ashe should have disqualified himself and, in the alternative, that he should have extended the case-management deadlines.   The Fifth Circuit affirmed. If Judge Ashe erred when he failed to recuse in these cases, that error was harmless. Nonetheless, as the arguments on this appeal support, potential conflicts of interest must be taken seriously by every member of the judiciary. The litigants and the public need to be confident in the impartiality of those who will decide legal disputes. View "Lundy v. BP Expl & Prod" on Justia Law