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

Heriberto Chavez, Evangelina Escarcega (representing her son, Jose Escarcega), and Jorge Moreno (collectively “Plaintiffs”) sought to represent a class in a lawsuit against Plan Benefit Services, Fringe Insurance Benefits, and Fringe Benefit Group (collectively “FBG”) for the alleged mismanagement t of funds that Plaintiffs contributed to benefit plans through their employers.   The Fifth Circuit affirmed the district court’s determination that the litigation may proceed as a class-action lawsuit. The court held that Plaintiffs have standing and certification is appropriate under Rule 23(b)(1)(B) or (b)(3). The court explained that here, Plaintiffs have established their standing to sue FBG. First, they have demonstrated injury in fact by alleging that FBG abused its authority under the Master Trust Agreement by hiring itself to perform services paid with funds from the CERT and CPT trusts, effectively devaluing the trusts and retirement benefits that Plaintiffs otherwise would have accrued with their employer. Second, they have established that their injury is traceable to FBG’s conduct by providing evidence of FBG’s direct control over the CERT and CPT trusts and the underlying contractual agreement with their employer. Finally, their injury is redressable in this court by awarding monetary damages or other relief. View "Chavez v. Plan Benefit Services" on Justia Law

Petitioner filed a 1983 claim, arguing that he was held in administrative segregation for 300 days over his 30-day disciplinary sentence without additional due process, such as new disciplinary hearings or periodic review of his custody status. The magistrate judge reviewed Petitioner's suit under 28 USC 1915(e) and 1915A and issued a Report and Recommendation recommending that Petitioner's federal claims be dismissed with prejudice as legally frivolous and for failure to state a claim. The district court reviewed and adopted the magistrate judge’s report, dismissing Petitioner's 1983 suit with prejudice as frivolous and for failure to state a claim.The Fifth Circuit reversed, finding that the district court failed to apply the appropriate, multi-faceted legal test considering the conditions and length of confinement, and thus, dismissing the Petition was an abuse of discretion. View "Carmouche v. Hooper" on Justia Law

Petitioner and her son entered the United States illegally after fleeing alleged gang violence in Honduras. They sought asylum and related relief but were denied; their appeal to the Board of Immigration Appeals (“BIA”) was likewise dismissed. Petitioner then moved the BIA to reopen her and her son’s removal proceedings. The BIA denied her motion. Petitioner petitioned for a review of that denial.   The Fifth Circuit dismissed the petition in part and denied it in part, explaining that the court lacked jurisdiction over the BIA’s refusal to reopen Petitioner, and it otherwise rejects her claims on the merits. The court explained that there is no per se rule that every family-based PSG is cognizable. Congress did not make persecution based on “family” a statutorily enumerated ground for asylum or withholding of removal. The court wrote that Petitioner was required to put forward at least some evidence of the social distinction of her son’s nuclear family in Honduran society. Because she did not, she failed to make out a prima facie case of eligibility for withholding of removal or asylum. The consequence is that she failed to demonstrate any prejudice caused by allegedly ineffective counsel. The BIA did not err in denying her motion to reopen proceedings on her withholding-of-removal and asylum claims. Moreover, the court explained that attempting to raise a due process claim through an argument about the BIA’s failure to reopen sua sponte does not bring the claim within the court’s jurisdiction. View "Garcia-Gonzalez v. Garland" on Justia Law

Plaintiff received his third citation for Driving While Intoxicated (“DWI”). As a term of his probation, Plaintiff, an alcoholic, was required to attend weekly substance abuse classes. Some of these classes conflicted with shifts that Plaintiff was scheduled to work as an operator at a plant owned by Defendant La Grange Acquisitions, L.P. Plaintiff informed his supervisors that he was an alcoholic and that several of the court-ordered substance abuse classes would conflict with his scheduled shifts. When Plaintiff was unable to find coverage for these shifts, La Grange, citing this scheduling conflict, terminated Plaintiff. After exhausting his administrative remedies, Plaintiff sued La Grange under the Americans with Disabilities Act (“ADA”), 42 U.S.C. Sections 12112 et seq., for intentional discrimination, failure to accommodate, and retaliation. The district court granted summary judgment in favor of La Grange on all three claims.   The Fifth Circuit affirmed. The court explained that here, the facts suggest only that a reasonable employer might have found that Plaintiff might have been seeking accommodation for his disability. To hold that La Grange was required to determine whether Plaintiff had a disability and needed accommodation in this situation would place the initial burden of identifying an accommodation request on the employer, not the employee. We cannot find that Plaintiff’s terse references to his struggles with drinking and self-identification as an alcoholic, made while discussing the legal implications of a recent DWI, were enough to place a legal responsibility on La Grange to probe whether Plaintiff was requesting a disability accommodation. View "Mueck v. La Grange Acquisitions" on Justia Law

Inmarsat Global Limited and related entities(collectively, “Inmarsat”) operate a satellite network providing communications services to remote locations, including ships at sea. Inmarsat sells the services at retail to end-users and at wholesale to distributors. Speedcast International Limited was a leading Inmarsat distributor, purchasing Inmarsat’s services and providing them to its own customers. Speedcast is the debtor in the bankruptcy. Several contracts governed the business relationship among the parties. Their last contract terminated all of the creditors’ claims against the debtor except for narrowly defined “Permitted Claims.” The creditors sought a reversal of the district and bankruptcy court’s conclusion that a particular claim was not a permitted one.   The Fifth Circuit affirmed, holding that the Termination Agreement’s definitions of Released Claims and Permitted Claims are unambiguous. Consequently, the court wrote that it need not consider any extrinsic evidence. The court found Inmarsat’s pricing argument unpersuasive. The Shortfall Amount is not a payment for services delivered by Inmarsat to Speedcast. The SAA provides that the Shortfall Amount is part of the performance that Speedcast promised “[i]n exchange for” Inmarsat agreeing to grant a 30% discount. The Shortfall Amount, in turn, is not levied on the services that Inmarsat delivered to Speedcast; it is levied due to the customers Speedcast failed to provide. View "Inmarsat Global v. SpeedCast Intl" on Justia Law

Plaintiffs asserted claims in district court under Section 1983 against various officials for failing to protect a man in custody, claiming violations of the Eighth and Fourteenth Amendments. They also have claims against individual defendants under a theory of bystander liability and a claim against the Sheriff for supervisory liability. And, against Culberson County, Plaintiffs asserted a claim under Section 1983 and Monell v. Department of Social Services of New York City, 436 U.S. 658 (1978), on the basis that its policies related to jail-suicide prevention caused a violation of Schubert’s constitutional rights. But, this interlocutory appeal concerns only the failure-to-protect claims against Appellants.   The Fifth Circuit vacated the district court’s judgment and held that Plaintiffs failed to plausibly allege Appellants possessed the requisite subjective knowledge. The court explained that although Plaintiffs alleged that the man in custody was cooperative and appeared truthful in his responses, Plaintiffs also alleged: the Sheriff was still required to conduct a mental-health screening form in accordance with TCJS; and, because “the form had not been completed,” the Sheriff “had to operate on the belief that the man was suicidal” and “was required to put the man on suicide watch.” The court explained that it requires that a defendant have “actual knowledge of the substantial risk of suicide.” Plaintiffs failed to allege that the man did or said anything to indicate he was suicidal. Because Plaintiffs failed to allege sufficient facts to plausibly show the Sheriff was subjectively aware of the risk of suicide, their allegations do not state a failure-to-protect claim against him. View "Edmiston v. Borrego" on Justia Law

This action under 42 U.S.C. Section 1983 arises out of a man’s death while in pretrial detention in the Callahan County, Texas, Jail. Plaintiffs’ challenged the adverse summary judgments, including contesting evidentiary rulings.   The Fifth Circuit affirmed. The court explained that Plaintiffs failed to show the requisite genuine dispute of material fact for whether the four defendants had subjective knowledge of a substantial risk of suicide; therefore, they fail to show a constitutional violation. Further, the court wrote that even assuming the court abused its discretion, the contested exhibits concern only Defendants’ knowledge regarding the risk of telephone cords as ligatures; they do not bear on Defendants’ subjective knowledge regarding whether the man was a substantial suicide risk. Accordingly, the court’s sustaining Defendants’ objections did not affect Plaintiffs’ substantial rights. Therefore, this assumed error was harmless. View "Crandel v. Hastings" on Justia Law

Copart of Connecticut, Inc. (“Copart”) is a subsidiary of Copart, Inc., an online car-auction company that sells used, wholesale, and repairable vehicles. Copart owns several parcels of land in Lexington County, South Carolina, on which it operates “machine salvage junkyard and vehicle wash facilities.” This appeal concerns whether Copart’s insurer must defend or indemnify Copart with respect to a lawsuit filed against it in South Carolina Defendant Copart of Connecticut appealed the district court’s grant of summary judgment in favor of Plaintiffs Liberty Mutual Fire Insurance Company and Liberty Insurance Corporation.   The Fifth Circuit affirmed summary judgment as to Liberty’s duty to defend Copart in the Underlying Suit. The court reversed summary judgment as to Liberty’s duty to indemnify Copart with respect to the Underlying Suit and remanded to the district court for further proceedings to determine Liberty’s indemnity obligation, if any. The court explained that the duty to defend is negated here because the Livingston Plaintiffs only allege damage caused, either in whole or in part, by pollutants. But evidence arising from or related to the Underlying Suit may reveal that non-pollutants caused Plaintiffs’ damage. If, for example, relevant evidence shows that the plaintiffs’ “cloudy water” was caused only by sand and sediment, then the pollution exclusion may not apply. If this were so, Liberty may be obligated to indemnify Copart. View "Liberty Mutual Fire Ins v. Copart of CT" on Justia Law

A man was arrested for being part of a scheme to take a picture of Senator Thad Cochran’s late wife in the privacy of her nursing room home. One month later, the man was found dead in his home, seemingly from suicide. His widow, sons, and estate filed a complaint alleging 42 U.S.C. Section 1983 claims, as well as various tort claims against state and private actors involved in his arrest and prosecution. The complaint alleges that the man was subject to a politically motivated prosecution that deprived him of his constitutional rights, shut down his law practice, and humiliated him and his family, causing severe emotional distress—all of which directly led to his suicide. Defendants filed a motion to dismiss all claims. The district court granted summary judgment for the City of Madison and Mayor Hawkins-Butler. Plaintiffs appealed the dismissal of their claims, the summary judgment on their Lozman claim, and several orders regarding expert testimony and discovery.   The Fifth Circuit affirmed. The court explained that here, Plaintiffs’ best evidence merely establishes that the City of Madison was aggressively pursuing those who committed a potential invasion of the privacy of an incapacitated adult. The evidence doesn’t show that the City carried out the investigation, arrest, search, or prosecution because of the man’s political views. The same is true of the Mayor. Accordingly, the district court properly granted summary judgment for the City of Madison and its Mayor. View "Mayfield v. Butler Snow" on Justia Law

Bouchard Transportation Company and its affiliates (collectively “Bouchard”)—debtors in bankruptcy—prepared to sell some of their assets at an auction. Fearing the auction would go poorly, Bouchard solicited a “stalking horse bidder” to start the auction and set a floor price. In exchange, Bouchard agreed to pay the stalking horse bidder a $3.3 million break-up fee and to reimburse expenses up to $1.5 million. The question is whether those payments were a permissible use of estate funds. As the bankruptcy and district courts found, the stalking horse payments were lawful under both applicable provisions of the Bankruptcy Code—they provided an actual benefit to the estate and were issued in the reasonable exercise of business judgment.
The Fifth Circuit affirmed the district court’s judgment affirming the bankruptcy court’s order that Bouchard pay Hartree a break-up fee and a capped expense reimbursement. The court explained that Bouchard’s payment to the stalking horse bidder is justified under either the stringent administrative-expense standard or the more relaxed business judgment rule. The court further wrote that there is “no basis to conclude that the board did not thoroughly review the presentation and make a well-reasoned, careful decision to designate Hartree as the stalking-horse bidder.” In signing the Hartree purchase agreement, Bouchard acted well within the bounds of reasonable business judgment. Section 363(b) does not require more. View "Official Committee v. Hartree" on Justia Law