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

Pontchartrain Partners, L.L.C. (“Pontchartrain”) and Tierra De Los Lagos, L.L.C. d/b/a Bee Sand Company (“Bee Sand”) are construction companies involved in a breach-of-contract dispute. In June 2021, Bee Sand sued Pontchartrain in Texas state court. Pontchartrain removed the case to federal court in July. Later that month, Bee Sand voluntarily dismissed the case and explained to Pontchartrain that it intended to refile in September— after a new Texas law governing attorney’s fees went into effect. Bee Sand also offered to refile in federal court to spare Pontchartrain the expense of a second removal, and Pontchartrain said that it would consider the matter. In response to Pontchartrain’s declaratory judgment action, Bee Sand argued that it was anticipatory in nature, meaning that the Southern District of Texas is the proper forum for this dispute. The district court agreed and dismissed the case.The Fifth Circuit affirmed. The court held that the district court’s consideration of the abstention factors provided adequate justification for granting Bee Sand’s motion. Moreover, these same reasons more than satisfy the “compelling circumstances” needed to obviate the “first-to-file” rule’s application, so the district court was not obligated to hear this case under that rule. Accordingly, the district did not abuse its discretion in dismissing Pontchartrain’s anticipatory lawsuit, and Pontchartrain’s jurisdictional and venue arguments need not be considered. View "Pontchartrain v. Tierra de Los Lagos" on Justia Law

Plaintiffs brought suit challenging a Texas law, which was later amended so as to moot their claims before the merits were adjudicated. Nevertheless, the district court determined that their fleeting success in obtaining a preliminary injunction rendered them “prevailing parties” under 42 U.S.C. Section 1988.   The Fifth Circuit disagreed, and accordingly reversed. The court explained that in light of the subsequent authorities from the Supreme Court and the court, the court declined Plaintiffs’ request to apply Doe’s outdated holding. Where a plaintiff’s sought-for preliminary injunction has been granted and the case is thereafter mooted before a final adjudication on the merits, Dearmore applies. As such, the legislature passed the bill with a veto-proof majority shortly thereafter, but Plaintiffs provided nothing to the district court or this court evincing that the legislature had the preliminary injunction in mind when it completed the passage of H.B. 793. And “[t]he mere fact that a legislature has enacted legislation that moots an [action], without more, provides no grounds for assuming that the legislature was motivated by” the “unfavorable precedent.” Am. Bar Ass’n v. FTC 636 F.3d 641, 649 (D.C. Cir. 2011).   The court wrote that the introduction of the ameliorative statute here, however, predated the district court’s action, and given the bill’s speedy passage through both houses and overwhelming legislative support, there is no basis to infer that the Texas legislature was motivated by a desire to preclude attorneys’ fees. View "Amawi v. Paxton" on Justia Law

This is an appeal from a district court’s grant of a Rule 12(b)(6) motion to dismiss for failure to state a claim. Plaintiff sought a declaratory judgment that Defendant Biloxi H.M.A., L.L.C., doing business as Merit Health Biloxi (“Merit Health”), a hospital, has a duty to disclose that it charges a “facility fee,” also referred to as a “surcharge,” to all emergency room patients who receive care at its facility. The district court, making an Erie guess informed by the Mississippi Supreme Court’s references to, and partial application of, the Restatement (Second) of Torts Section 551, determined that Merit Health did not have a duty to disclose because the surcharge was not a “fact basic to the transaction”, and it, therefore, granted the motion to dismiss.   The Fifth Circuit reversed and remanded. The court explained that in applying relevant legal precepts, the court thinks that the Mississippi Supreme Court would hold that Plaintiff has sufficiently alleged facts that Merit Health had a duty to exercise reasonable care to disclose the surcharge. First, Plaintiff alleged that the surcharge was a material fact. Second, Plaintiff alleged that Merit Health was aware that patients like her were unaware of the surcharge, but nonetheless failed to disclose it. Third, Plaintiff alleged that she had a reasonable expectation of disclosure because Merit Health holds itself out to be a “caring community-based organization” and patients like her expected Merit Health to disclose the surcharge based on the confidence and trust that they placed in the hospital. View "Henley v. Biloxi H.M.A." on Justia Law

Texas recently enacted such a ban on new entrants in a market with a more direct connection to interstate commerce than the drilling of oil wells: the building of transmission lines that are part of multistate electricity grids. The operator of one such multistate grid awarded Plaintiff NextEra Energy Capital Holdings, Inc. the right to build new transmission lines in an area of east Texas that is part of an interstate grid. But before NextEra obtained the necessary construction certificate from the Public Utilities Commission of Texas, the state enacted the law, SB 1938, that bars new entrants from building transmission lines. NextEra challenges the new law on dormant Commerce Clause grounds. It also argues that the law violates the Contracts Clause by upsetting its contractual expectation that it would be allowed to build the new lines   The Fifth Circuit concluded that the dormant Commerce Clause claims should proceed past the pleading stage. But the Contracts Clause claim fails as a matter of law under the modern, narrow reading of that provision. The court explained that limiting competition based on the existence or extent of a business’s local foothold is the protectionism that the Commerce Clause guards against. Thus, the court reversed the Rule 12(b)(6) dismissal of the claim that the very terms of SB 1938 discriminate against interstate commerce. Further, the court held that SB 1938 did not interfere with an existing contractual right of NextEra. NextEra did not have a concrete, vested right that the law could impair. It thus fails at the threshold question for proving a modern Contracts Clause violation. View "NextEra, et al v. D'Andrea, et al" on Justia Law

Section 1557 of the Patient Protection and Affordable Care Act prohibits health care programs that receive federal funds from discriminating against patients on the basis of sex. Section 1557 incorporates Title IX’s definition of prohibited sex discrimination. The Secretary of HHS has authority to issue regulations to implement Section 1557.In May 2016, HHS issued a rule interpreting Section 1557’s prohibition of “discrimination on the basis of sex.” Plaintiffs claimed the rule violated the Administrative Procedure Act (APA) by defining “sex discrimination” inconsistently with Title IX. Initially, the district court issued a nationwide preliminary injunction and ultimately granted summary judgment to Plaintiffs but denied permanent injunctive relief. Significant litigation followed.In this case, HHS argues that any challenge to the 2016 Rule is now moot because the district court already vacated the parts of the rule that violated the APA, and because the 2020 Rule rescinded the 2016 Rule. The Fifth Circuit agreed. View "Franciscan Alliance v. Becerra" on Justia Law

Plaintiffs petitioned the United States Patent and Trademark Office for federal registration of the mark “THEEILOVE”. That phrase, “Thee I Love,” comes from the alma mater of Jackson State University. They then sued the University’s licensing agent (Collegiate Licensing Company) and a few of the licensees in charge of producing and selling the University’s merchandise (Anthony Lawrence Collection, Defron Fobb, and Thaddeus Reed, together “the Licensees”). But they did not sue the University itself. Collegiate and the Licensees moved to dismiss under Federal Rule of Civil Procedure 12(b)(7). The district court granted the motion and dismissed the suit without prejudice.   The Fifth Circuit affirmed. The court held that the district court did not abuse its discretion in concluding that the University was a required party under Rule 19(a)(1)(B)(i). And because everyone agrees that the University enjoys sovereign immunity, the question becomes whether the district court abused its discretion in dismissing the case rather than proceeding without the University. Here, the University has a non-frivolous claim here. As a practical matter, this suit would impair or impede its ability to protect its interest in the “Thee I Love” mark. That is enough to require dismissal of the action because “there is a potential for injury to” the University’s “interests as the absent sovereign.” Finally, even setting aside the University’s sovereign status, the balance of Rule 19(b) factors weigh in favor of dismissal. As a result, the district court did not abuse its discretion in dismissing the case. View "Lee, et al v. Anthony Lawrence Collection, et al" on Justia Law

The Grill Holdings, L.L.C. (Khodr) filed suit in the Civil District Court for the Parish of Orleans seeking a declaratory judgment as to whether CGH (Shwartz) had the right to audit their books and records under the License Agreement. The state district court ruled in CGH’s favor on summary judgment, and the Louisiana Fourth Circuit Court of Appeal denied writ.The parties appealed to the Fifth Circuit. First, the Shwartz parties appealed, arguing that the district court erred in denying the Rooker-Feldman motion to dismiss and in the scope of its permanent injunction. Next, the Khodr parties cross-appealed, arguing that the district court erred in denying the motion for sanctions.The Fifth Circuit affirmed the district court’s rulings, including (1) a ruling denying a motion to dismiss; (2) a ruling entering a permanent injunction; and (3) a ruling denying a motion for Rule 11 and Section 1927 sanctions. The court explained that there was no room on remand for reconsideration of the alleged elements that constituted trade dress. Thus, the district court did not abuse its discretion by leaving wait staff attire out of the injunction. Further, the court held that the Rule 11 safe harbor provision requires identicality. Here, as the district court found, the served motion and the filed motion contained substantial differences. The motions were thus not identical, and the district court properly denied the motion and declined to enter sanctions. View "Uptown Grill v. Camellia Grill Holdings" on Justia Law

This case involves three constitutional challenges to New Orleans’s regulation of short-term rentals (“STRs”)—the City’s term for the type of lodging offered on platforms such as Airbnb and Vrbo. The district court granted summary judgment to the City on two of those challenges but held that the third was “viable.” Both sides appealed.   The Fifth Circuit affirmed in part, vacated in part, and dismissed the City’s cross-appeal for lack of jurisdiction. Plaintiffs appealed the summary judgment on the dormant Commerce Clause claim and the Takings Clause claim. The City cross-appealed the “holding”—its term, not ours—that the prior-restraint claim is “viable.”   The court explained that first, the original licensing regime was explicit: An STR license is “a privilege, not a right.” Second, Plaintiffs’ interests in their licenses were not so longstanding that they can plausibly claim custom had elevated them to property interests. Together, those two factors yield one conclusion: Plaintiffs didn’t have property interests in the renewal of their licenses.  Next, the court agreed that the district court erred in granting summary judgment to the City on their challenge to the residency requirement. The court explained that the district court should have asked whether the City had reasonable nondiscriminatory alternatives to achieve its policy goals. View "Hignell-Stark v. City of New Orleans" on Justia Law

Nippon Yusen Kabushiki Kaisha (“NYK”), incorporated and headquartered in Japan, is a major global logistics company that transports cargo by air and sea. On June 17, 2017, the ACX Crystal, a 730-foot container ship chartered by NYK, collided with the destroyer USS Fitzgerald in Japanese territorial waters. Personal representatives of the seven sailors killed sued NYK in federal court, asserting wrongful death and survival claims under the Death on the High Seas Act.  In both cases, the plaintiffs alleged that NYK, a foreign corporation, is amenable to federal court jurisdiction under Fed. R. Civ. P. 4(k)(2) based on its “substantial, systematic and continuous contacts with the United States as a whole. The district court granted NYK’s motion to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2).   The Fifth Circuit affirmed, rejecting Plaintiffs’ invitation to craft an atextual, novel, and unprecedented Fifth Amendment personal jurisdiction standard. The court explained that under the Supreme Court’s reigning test for personal jurisdiction, the district court did not err in absolving NYK from appearing in federal court. The court wrote that general jurisdiction over NYK does not comport with its Fifth Amendment due process rights. NYK is incorporated and headquartered in Japan. As a result, exercising general jurisdiction over NYK would require that its contacts with the United States “be so substantial and of such a nature to render [it] at home” in the United States. Here, NYK’s contacts with the United States comprise only a minor portion of its worldwide contacts. View "Douglass v. Nippon Yusen Kabushiki" on Justia Law

Plaintiffs are oil-field manufacturing and services companies (collectively, “Chandler”) who brought Walker Process fraud and sham patent litigation claims against defendants Phoenix Services, LLC, and its CEO, Mark Fisher (collectively, “Phoenix”). The patent at issue here is U.S. Patent No. 8,171,993 (the “’993 Patent”), which was issued to Mark Hefley, founder of Heat On-The-Fly, LLC (“HOTF”). The district court dismissed some of the claims for lack of standing and others as time-barred. The case was then appealed to the Federal Circuit, but the Federal Circuit found the case had no live patent issues and so transferred the case to the Fifth Circuit.Both parties moved for summary judgment, to support its claims, Chandler alleged Phoenix was liable as HOTF’s parent company for two anticompetitive acts involving the ’993 Patent. Chandler and Phoenix cross-moved for summary judgment. The Fifth Circuit accepted the case and affirmed the district court’s judgment. The court explained that it cannot find the Federal Circuit’s decision implausible. Next, turning to the merits, the court found that the district court correctly found a lack of substantial evidence that the cease-and-desist letter materially caused Supertherm’s lost profits. Finally, because the district court correctly ruled that tolling does not apply, Chandler’s claims are time-barred. View "Chandler v. Phoenix Services" on Justia Law