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

Plaintiff, a Texas resident, filed suit against Allstate Texas, a Texas entity, seeking damages for breach of contract and violations of the Texas Deceptive Trade Practices Act, the Texas Insurance Code, the Texas Business and Commerce Code, and the Texas Civil Practice and Remedies Code. Allstate Illinois, rather than Allstate Texas, answered the petition and removed the case to federal court on the basis of diversity jurisdiction under 28 U.S.C. 1332(a) and 1441(b).The Fifth Circuit reversed the district court's denial of plaintiff's motion to remand to state court, and remanded with instructions for the district court to remand to state court. The court held that Allstate Illinois lacked the authority to remove the suit to federal court and the district court did not have subject matter jurisdiction over the case when it denied plaintiff's motion to remand because the only parties to the case at the time of removal was plaintiff and Allstate Texas, both Texas residents. In this case, Allstate Illinois was not a defendant as originally filed and did not become a defendant through proper means. View "Valencia v. Allstate Texas Lloyd's" on Justia Law

A federal district court in Texas does not have jurisdiction to vacate an arbitration award in Florida. The Fifth Circuit affirmed the district court's dismissal of the action based on lack of personal jurisdiction over the subcontractors. The court held that the subcontractors did not have the minimum contacts in Texas such that a Texas court could exercise specific personal jurisdiction over them. In this case, the place of contractual performance was Florida—not Texas, after plaintiff allegedly failed to pay its subcontractors' invoices, the parties met in Florida to discuss the dispute, then they arbitrated the dispute in Florida, and Florida's courts have determined that Florida is a proper venue for the subcontractors to seek enforcement of the arbitration awards. Therefore, the subcontractors did not purposefully avail themselves to being sued in Texas courts. View "Sayers Construction, LLC v. Timberline Construction, Inc." on Justia Law

After plaintiffs were unable to collect on a $55 million judgment against Dynex Commercial, Inc., plaintiffs filed a lawsuit against Dynex Commercial, Inc. and Dynex Capital, Inc., alleging fraudulent-transfer and alter-ego claims.The Fifth Circuit affirmed the district court's dismissal of plaintiffs' second amended complaint with prejudice based on the grounds that the fraudulent transfer claim is time-barred and the alter ego claim is barred by res judicata. In this case, plaintiffs knew of or reasonably could have discovered the transfers at least by February 2004, if not earlier, and plaintiffs reasonably could have discovered the allegedly fraudulent nature long before April 2016. Furthermore, plaintiffs' failure to raise an alter-ego claim against Dynex Capital during the state-court litigation does not mean that they can raise such a claim now. The court also stated that the district court appropriately used judicial notice of the Form 10-K and state court record. View "Basic Capital Management, Inc., v. Dynex Capital, Inc." on Justia Law

Lamar filed suit in state court against MTC, challenging a Mississippi statute governing the height of roadside billboards. After MTC removed to federal court, the district court dismissed the suit because of Lamar's failure to exhaust administrative remedies. The Fifth Circuit reversed and, on remand, the district court granted partial summary judgment, holding that the statute was unambiguous in its restriction of all billboards to forty feet. After the district court entered final judgment, MTC moved to remand to state court.The Fifth Circuit held that there was no federal-question jurisdiction arising from Lamar's complaint at the time of removal. The court also held that MTC is not a citizen of Mississippi for diversity-jurisdiction purposes. In this case, MTC correctly identifies that subject matter jurisdiction is not present because it is the alter ego of the state and, under established doctrine, cannot be a citizen for diversity purposes. The court rejected Lamar's requests for costs, expenses, and fees -- based on MTC's late acknowledgment of error -- under 28 U.S.C. 1447(c); Federal Rule of Civil Procedure 11(c); and the Mississippi Litigation Accountability Act. View "The Lamar Company, LLC v. Mississippi Transportation Commission" on Justia Law

Waypoint, the project owner, entered into a construction contract with Team Contractors, the general contractor, and entered into an architectural contract with HCA. HCA then retained KLG as the project's engineer. Team filed suit and subsequently prevailed against the engineers and architects for negligence, but not against the owner for breach of contract. After a finding that the initial verdict had an irreconcilable conflict, a second trial was held just on the breach of contract claim. The jury then reached a verdict for the general contractor, and the owner appealed.The Fifth Circuit vacated the district court's judgment and remanded for the district court to reinstate the original verdict. The court held that if the answers to written questions require jurors to apply the instructed law to their fact-findings, thereby fully explaining who prevails on all claims against a single defendant, and if relevant, the amount of any monetary award, that is sufficient for a Federal Rule of Civil Procedure 49(b) verdict. Though in this case the jurors were not given, as Rule 49(b) states, "forms for a general verdict" and also for answers to written questions, jurors applied their instructions on the law to their fact finding and found there had been no breach of contract. The court held that the result fully resolved the claim against Waypoint. The court stated that the general verdict is incomplete in Rule 49(b) terms, but it is sufficient. The court also held that Team waived any argument to have the verdict set aside. Finally, the court remanded for the district court to consider attorneys' fees. View "Team Contractors, LLC v. Waypoint NOLA, LLC" on Justia Law

The Fifth Circuit treated appellees' Petition for Rehearing En Banc as a Petition for Panel Rehearing and granted it, withdrawing its prior opinion and substituting the following opinion.The Employees appealed the denial of their motions for judgment as a matter of law in their Fair Labor Standards Act (FLSA) action, and 4JLJ cross-appealed the sanctions and cost awards. The court dismissed the Employees' appeal based on lack of jurisdiction because the Employees did not timely file a notice of appeal. The court also lacked jurisdiction over 4JLJ's cross-appeal of the order imposing monetary sanctions, because 4JLJ's June 24, 2019, appeal was untimely with respect to the pre-judgment imposition of monetary sanctions. However, 4JLJ's June 24 appeal was timely with respect to the June 3 post-judgment order allocating costs. The court held that the district court did not abuse its discretion regarding cost allocation under Federal Rule of Civil Procedure 54(d) where the district court articulated its reasons in its order and based its decision on facts in the record suggesting that 4JLJ had engaged in evasive discovery practices. Accordingly, the court affirmed the cost allocation. View "Edwards v. 4JLJ, LLC" on Justia Law

After a panel of arbitrators issued an arbitration award dismissing all of plaintiff's claims against Ameriprise and three of its franchise advisors, plaintiff then filed a petition in Louisiana state court to vacate that arbitration award, as to certain defendant parties. Defendants removed to state court; plaintiff moved to remand; and the district court held that it did have subject-matter jurisdiction over the petition to vacate and thus denied remand. The district court ruled on the removed petition to vacate, denying plaintiff's claims with prejudice. At issue in this appeal is the jurisdiction of the federal court over the petition to vacate.The Fifth Circuit affirmed and held that, applying the look-through analysis, the district court correctly found that the federal claim against Ameriprise in the FINRA arbitration proceeding meant that there was federal subject-matter jurisdiction over the removed petition to vacate the FINRA arbitration dismissal award. Therefore, the district court correctly denied plaintiff's motion to remand the action to vacate to Louisiana state court. View "Badgerow v. Walters" on Justia Law

Plaintiffs filed suit against the Texas Secretary of State Ruth Hughs under 42 U.S.C. 1983 for allegedly imposing a voter-registration requirement that violates federal law. After the district court denied the Secretary's motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) and (b)(6), the Secretary noticed an interlocutory appeal, and plaintiffs moved for summary affirmance or dismissal of the Secretary's appeal as frivolous.The Fifth Circuit held that the Secretary's appeal is not frivolous because it presents an important question that has not been resolved by the court: whether and to what extent the exception in Ex parte Young, 209 U.S. 123, 157 (1908), to sovereign immunity permits plaintiffs to sue the Secretary in an as-applied challenge to a law enforced by local officials. Accordingly, the court denied the motion for summary affirmance and the motion to dismiss the appeal as frivolous. View "Texas Democratic Party v. Hughs" on Justia Law

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law

Plaintiffs filed suit challenging the efforts of New Jersey's Attorney General and others to thwart plaintiffs' distribution of materials related to the 3D printing of firearms, alleging infringement of plaintiffs' First Amendment rights and state law claims. The district court granted the Attorney General's motion to dismiss for lack of personal jurisdiction, relying on Stroman Realty, Inc. v. Wercinski, 513 F.3d 476 (5th Cir. 2008).The Fifth Circuit held that the Attorney General has established sufficient minimum contacts with Texas to subject him to the jurisdiction of Texas' courts. The court held that Stroman is distinguishable from this case in at least two key respects: first, many of plaintiffs' claims are based on the Attorney General's cease-and-desist letter; and second, the Attorney General's assertion of legal authority is much broader than the public official in Stroman. Furthermore, the Attorney General failed to timely raise arguments regarding whether judgment in plaintiffs favor would offend traditional notions of fair play and substantial justice. The court applied the principles discussed in Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208 (5th Cir. 1999), and Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482 (1984), and held that jurisdiction over the Attorney General is proper. Accordingly, the court reversed and remanded for further proceedings. View "Defense Distributed v. Grewal" on Justia Law