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

Plaintiff-Appellant Sonya Porretto owns Porretto Beach in Galveston, Texas. After filing for bankruptcy in 2009, her case was converted to a Chapter 7 proceeding. In 2020, the bankruptcy trustee abandoned the Porretto Beach property back to her. In 2021, Porretto filed a lawsuit against the City of Galveston Park Board of Trustees, the City of Galveston, the Texas General Land Office (GLO), and its Commissioner, alleging that their actions constituted takings without just compensation in violation of the Fifth Amendment.The U.S. District Court for the Southern District of Texas dismissed Porretto’s lawsuit. The court concluded that Porretto lacked standing to sue the GLO and its Commissioner because her complaint did not establish a causal link between their actions and her alleged injuries. The court also found that it lacked bankruptcy jurisdiction under 28 U.S.C. § 1334 and federal question jurisdiction under 28 U.S.C. § 1331, as Porretto did not invoke 42 U.S.C. § 1983 for her constitutional claims. Additionally, the court denied Porretto leave to amend her complaint and her motion for recusal of the presiding judge.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court’s dismissal of Porretto’s claims against the GLO and its Commissioner without prejudice, agreeing that Porretto lacked standing. However, the appellate court vacated the district court’s dismissal of Porretto’s claims against the Park Board and the City of Galveston, finding that the district court does have federal question jurisdiction over her constitutional claims despite her failure to cite § 1983. The case was remanded for the district court to consider alternative arguments for dismissal and the issue of supplemental jurisdiction over state law claims. The appellate court also affirmed the district court’s denial of Porretto’s motion for recusal and her request for reassignment to a different judge. View "Porretto v. City of Galveston" on Justia Law

A petrochemical company, Sasol, expanded its Lake Charles, Louisiana facility and required a storage-in-transit yard. The Kansas City Southern Railway Company (KCSR) was contracted to construct and lease the railyard to Sasol. The lease agreement stipulated that Sasol would pay KCSR $102 per linear foot of track annually. A dispute arose over whether the term "track" included the track within switches, which are used to divert trains from one track to another.The United States District Court for the Northern District of Texas found the lease ambiguous regarding whether "track" included switches. After a bench trial, the court ruled in favor of Sasol, interpreting the lease to exclude switches from the track for which Sasol had to pay. Consequently, the court set the rent at $14,806,932 annually, less than what KCSR had invoiced, and awarded Sasol damages and interest for overpayments.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court examined the lease's language and found no ambiguity. It determined that the term "track" unambiguously included the track within switches. The court noted that the lease's various references to "track" and "switches" did not imply mutual exclusivity and that interpreting them as such would lead to absurd results. Therefore, the court held that KCSR was entitled to charge for all track within the leased premises, including switches.The Fifth Circuit reversed the district court's decision and remanded the case for further proceedings consistent with its opinion. View "The Kansas City Southern Railway Company v. Sasol Chemicals (USA), L.L.C." on Justia Law

A group of individuals, declared vexatious litigants under a Texas statute, challenged the constitutionality of the statute. They filed a lawsuit against a state court judge, a state court clerk, and a state official responsible for publishing the list of vexatious litigants. The plaintiffs argued that the statute violated their First Amendment rights and other constitutional protections. They sought a declaration that the statute was unconstitutional, an injunction against its enforcement, nominal damages, and costs and attorney’s fees.The United States District Court for the Eastern District of Texas dismissed the case for lack of jurisdiction. The court assumed the plaintiffs had alleged an injury but concluded they lacked standing because they did not satisfy the causation and redressability elements required for Article III standing. The court also held that there was no case or controversy between the plaintiffs and the state court judge, as the judge was acting in an adjudicatory capacity, not as an enforcer or administrator of the statute.The United States Court of Appeals for the Fifth Circuit affirmed the district court’s dismissal. The appellate court agreed that the plaintiffs lacked standing because their injuries were not fairly traceable to the defendants' actions and would not be redressed by a favorable decision. The court also upheld the finding that there was no case or controversy between the plaintiffs and the state court judge, as the judge’s role under the statute was strictly adjudicatory. The court concluded that the plaintiffs' injuries were caused by the independent actions of state court judges who declared them vexatious litigants, not by the defendants' enforcement of the statute. View "Reule v. Jackson" on Justia Law

Bruce Molzan, a well-known chef, filed a lawsuit against Bellagreen Holdings, LLC, and other associated entities and individuals, alleging trademark infringement and other claims under the Lanham Act and Texas law. Molzan claimed that he had been using the "RUGGLES" trademarks for over forty years and that the defendants misused these trademarks after a forced sale of his restaurants. He alleged that the defendants continued to use the "RUGGLES GREEN" trademark and domain name without authorization, causing consumer confusion.The United States District Court for the Southern District of Texas dismissed all of Molzan's claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. The court found that Molzan's allegations were conclusory and did not establish a connection between the defendants and the third-party websites causing the confusion. The court also determined that the Settlement Agreement between the parties addressed the alleged infringements and provided a remedy for such transgressions.The United States Court of Appeals for the Fifth Circuit reviewed the case and found that Molzan's complaint contained well-pleaded factual allegations that made his claims facially plausible. The court noted that the allegations established a likelihood of confusion due to the defendants' continued use of the "RUGGLES" trademarks. The court also found that the district court erred in assuming the veracity of the defendants' assertions over Molzan's well-pleaded allegations. The Fifth Circuit reversed the district court's dismissal of Molzan's federal and state trademark infringement, false advertising, unfair competition, and state trademark dilution claims. The court also reversed the dismissal of Molzan's breach of contract and unjust enrichment claims and remanded the case for further proceedings. Additionally, the court vacated the district court's dismissal of the Web Defendants and the denial of Molzan's motion for leave to amend his complaint. View "Molzan v. Bellagreen Holdings" on Justia Law

Robert Allen Stanford operated a billion-dollar Ponzi scheme through various entities in Texas and Antigua. In 2009, a federal district court appointed an equity receiver (the "Receiver") to manage the assets of the Stanford entities, handle claims from defrauded investors, and pursue claims against third parties. This appeal concerns a settlement with Societe Generale Private Banking (Suisse) S.A. ("SGPB"), which included a bar order preventing future Stanford-related claims against the Swiss bank. Two individuals appointed by an Antiguan court to liquidate one of the Stanford entities argued that the bar order should not apply to their claims against SGPB.The United States District Court for the Northern District of Texas approved the settlement and issued the bar order. The Joint Liquidators objected, arguing that the district court lacked personal jurisdiction over them. They filed their objection in a related Chapter 15 proceeding rather than the main SEC action, leading to a jurisdictional dispute. The district court held a hearing, during which it indicated that any participation by the Joint Liquidators' counsel would be considered a waiver of their jurisdictional objection. The court approved the settlement and entered the bar order, prompting the Joint Liquidators to appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court did not have the necessary personal jurisdiction to bind the Joint Liquidators with its bar order. The court emphasized that injunctions require in personam jurisdiction, which the district court lacked over the Joint Liquidators. The court vacated the district court's scheduling order and the bar order as it applied to the Joint Liquidators, and remanded the case for further proceedings consistent with its opinion. View "Dickson v. Janvey" on Justia Law

Christy Bunker sued Dow Chemical Company in Texas state court, alleging age discrimination and retaliation. Dow removed the case to federal court and filed a motion to dismiss, arguing that Bunker failed to exhaust her administrative remedies before filing suit. The district court granted Dow’s motion, finding that Bunker did not properly request that the Equal Employment Opportunity Commission (EEOC) file her charge with the appropriate state agency, the Texas Workforce Commission (TWC).The United States District Court for the Southern District of Texas dismissed Bunker’s claims under Federal Rule of Civil Procedure 12(b)(6). The court found that Bunker had filed a charge with the EEOC but did not indicate that the charge should also be filed with the TWC. Consequently, the court held that Bunker failed to exhaust her administrative remedies as required under the Texas Commission on Human Rights Act (TCHRA).The United States Court of Appeals for the Fifth Circuit reviewed the district court’s decision de novo. The appellate court affirmed the district court’s ruling, holding that Bunker’s failure to indicate on her EEOC charge that it should be filed with the TWC meant she did not meet the TCHRA’s filing requirements. The court noted that both Texas state and federal courts have consistently held that a charge filed with the EEOC must at least indicate that it is to be filed with the TWC to satisfy the TCHRA’s requirements. Therefore, Bunker’s claims were rightfully dismissed with prejudice for failing to exhaust her administrative remedies. View "Bunker v. Dow Chemical" on Justia Law

In 2021, Shannon Carson was injured in an automobile accident in Louisiana while driving an 18-wheeler truck owned by his employer. The accident was caused by another driver, Jamarcea Washington, who was insured by GEICO and died in the collision. Carson's employer's truck was insured by American Millenium Insurance Company, which provided $75,000 in underinsured motorist (UIM) coverage. Carson also had a personal automobile insurance policy with USAA, which provided $50,000 in UIM coverage. Carson settled with GEICO and American Millenium for their policy limits and then sought additional UIM benefits from his USAA policy.The case was initially filed in Louisiana state court and then removed to the United States District Court for the Western District of Louisiana based on diversity jurisdiction. The district court granted summary judgment in favor of USAA, concluding that Carson, as a Class II insured under South Carolina law, was prohibited from stacking his personal UIM insurance on top of the American Millenium UIM coverage. Carson filed a Rule 59(e) motion, arguing that he was entitled to "port" his personal UIM coverage under South Carolina law. The district court denied the motion, maintaining that the case involved stacking, not portability, and that Carson had already received the statutory limit for UIM coverage.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court concluded that South Carolina law does not prevent Carson from recovering UIM benefits under his personal automobile insurance policy with USAA. The court distinguished between stacking and portability, noting that while stacking is prohibited for Class II insureds, portability allows an insured to recover under their personal UIM policy when their vehicle is not involved in the accident. The court vacated the district court's summary judgment and remanded the case for further proceedings consistent with its opinion. View "Carson v. USAA Casualty Insurance" on Justia Law

Hermilo Cantu Silva sustained a gunshot wound when a Border Patrol Agent attempted to apprehend him for suspected illegal entry into the United States. Silva sued the United States under the Federal Tort Claims Act (FTCA), asserting several intentional tort claims and negligence. The case proceeded to a bench trial solely on the negligence claim. At the close of evidence, the trial court raised the potential applicability of the discretionary function exception, which the parties briefed. The trial court determined that the discretionary function exception deprived the court of jurisdiction.The United States District Court for the Southern District of Texas held a bench trial and, at the close of evidence, raised the issue of the discretionary function exception. The Government filed a Rule 12(b)(1) motion, and Silva responded. The trial court concluded that the discretionary function exception applied, thus depriving the court of jurisdiction over Silva’s FTCA claim. Silva appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s dismissal de novo. The appellate court agreed with the lower court that the discretionary function exception applied. The court found that Agent Mendoza’s decision to draw and not re-holster his firearm was discretionary and grounded in policy considerations, meeting both prongs of the Gaubert test. Consequently, the discretionary function exception precluded subject matter jurisdiction over Silva’s FTCA claim. The Fifth Circuit affirmed the district court’s dismissal of the case. View "Silva v. United States" on Justia Law

Bilal Hankins, a passenger in a car with two other youths, was driving slowly at night looking for a neighbor’s lost dog. Hankins asked Officer Kevin Wheeler, who was on patrol for a local private security district, for assistance in finding the dog. Later, Officer Wheeler and another officer, Officer Ramon Pierre, stopped the car without reasonable suspicion and approached it with guns drawn. Hankins brought claims under Sections 1983 for unreasonable seizure, excessive force, constitutional conspiracy, supervisory liability, and Monell claims, along with related state-law claims.The United States District Court for the Eastern District of Louisiana limited discovery to the issue of qualified immunity. The district court concluded that there was no question of material fact as to whether there was an underlying constitutional violation of either Hankins’ right to be free from an unlawful seizure or his right to be free from excessive, unlawful force. Consequently, the district court granted summary judgment to the defendants on all federal claims, as each federal claim relied on an underlying constitutional violation. The court also declined supplemental jurisdiction over the state-law claims and dismissed those without prejudice.The United States Court of Appeals for the Fifth Circuit reviewed the case and found that material fact disputes precluded summary judgment on the seizure claim. The court held that the factors relied upon by the district court, such as the car’s registration information, the time of night, and the car driving slowly, did not amount to reasonable suspicion when considered in the totality of the circumstances. The court also noted that Hankins’ testimony that Officer Wheeler said, “you know, three young men, in a nice car, in this neighborhood,” if credited, would undermine the officers’ justification for the stop. The Fifth Circuit reversed the summary judgment on the seizure claim, vacated the summary judgment on the other federal claims, and remanded for further proceedings. View "Hankins v. Wheeler" on Justia Law

Balboa Capital Corporation, a financing company, entered into agreements with various physicians across multiple states to finance their participation in a telehealth program run by America’s Medical Home Team (MHT). MHT, however, was operating a Ponzi scheme and failed to deliver the promised services and equipment. Balboa financed the physicians' participation by paying MHT directly and then sought repayment from the physicians through monthly payment agreements (MPAs) or installment payment agreements (IPAs). The physicians, unaware of the full terms and believing they could withdraw without financial obligations, defaulted on their payments after MHT's collapse.The United States District Court for the Northern District of Texas consolidated multiple collection actions filed by Balboa against the physicians. The court struck an evidentiary exhibit that combined the payment agreements with invoices, ruling that the invoices were not properly authenticated and constituted impermissible hearsay. The court then granted summary judgment in favor of the physicians, finding that the payment agreements alone did not constitute valid contracts as they lacked essential terms such as the total amount financed and the cost of financing.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s rulings. The appellate court affirmed the decision to strike the exhibit, agreeing that the invoices were not properly authenticated and did not meet the business records exception to the hearsay rule. The court also affirmed the summary judgment, holding that the payment agreements, even if considered together with the invoices, did not form enforceable contracts under California law due to the absence of material terms. Consequently, Balboa’s claims for breach of contract and breach of guarantee failed as a matter of law. View "Balboa Capital v. Okoji Home Visits MHT, L.L.C." on Justia Law