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

In 2005, during plaintiff's employment, defendant issued an employee handbook, including a provision that all employment-related disputes, whether initiated by an employee or by defendant, would be "resolved only by an arbitrator through final and binding arbitration," that disputes under the Fair Labor Standards Act were among those subject to the arbitration policy, that disputes cannot be brought as class actions or in representative capacities, and that the Federal Arbitration Act was its governing authority. Plaintiff signed a receipt that reiterated the arbitration policy. After his employment ended, plaintiff filed a class action, alleging violation of the FLSA by failing to adequately compensate him and other similarly-situated employees for overtime work. The district court denied a motion to stay proceedings and compel arbitration, finding that the provision was illusory because the employer retained the right to terminate or modify the provision at any time. The Fifth Circuit affirmed, noting that under the provision the company could make amendments almost instantaneously.

This appeal involved a putative class action brought against several oil and gas companies and several companies that provide labor for offshore oil and gas projects. Plaintiffs alleged that defendants maintained a hiring scheme to employ foreign workers on the Outer Continental Shelf in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968, and the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et seq. The district court disposed of all plaintiffs' claims and then entered final judgment dismissing all claims. The court held that the Service Defendants did not violate RICO because the law that would make their conduct racketeering activity did not apply in the place where that conduct occurred, namely vessels floating on the waters of the Outer Continental Shelf. The court rejected plaintiffs' contention that the exemptions the Service Defendants possessed to the OCSLA manning requirements did not shield them from RICO liability because those exemptions were fraudulently obtained. The court also held that plaintiffs could not state a claim for a private right of action for damages under the OCSLA and the district court's dismissal was proper. The court further held that the district court did not err in disposing plaintiffs' OCSLA enforcement claim. Accordingly, the judgment of the district court was affirmed.

This appeal arose from the settlement of a class action where defendant paid substantial sums for res judicata protection from the claims of persons assertedly injured by the toxic emissions of an industrial plant. The monies were allocated among three subclasses, one of which was to receive medical monitoring. Upon the monitoring program's completion, substantial sums remained unused. The district court denied the settlement administrator's request to distribute the unused medical-monitoring funds to another subclass of persons suffering serious injuries. Instead, the district court repaired to the doctrine of cy pres and ordered that the money be given to three charities suggested by defendant and one selected by the district court. The court held that the district court abused its discretion by ordering a cy pres distribution in the teeth of the bargained-for-terms of the settlement agreement, which required residual funds to be distributed within the class. The court reversed the district court's order distributing the unused medical-monitoring funds to third-party charities and remanded with instructions that the district court order that the funds be distributed to the subclass comprising the most seriously injured class members.

Plaintiff brought a class action in Louisiana state court on behalf of a class of Louisiana medical providers against three Louisiana defendants, alleging that defendants failed to comply with the preferred provider organization (PPO) notice provisions of Louisiana law. Homeland Insurance Company subsequently appealed the district court's class action to Louisiana state court. Because it concluded that the local controversy exception to the Class Action Fairness Act applied, 28 U.S.C. 1332(d)(4), the court affirmed the judgment of the district court.

Plaintiff sued three defendants in Louisiana state court, alleging that there was an enterprise between all three defendants to misappropriate funds using a Texas bill review company's under-calculation of recommended payments to hospitals. Defendants subsequently appealed the judgment of the district court holding that the local controversy exception to federal court jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), applied to this class action suit filed by plaintiffs and remanding this case to Louisiana state court. The court held that, based on its conclusion that plaintiff failed in its burden to establish that the sole local defendant formed a significant basis of the claims of the potential class, the court vacated the remand order and directed that the case be reinstated on the district court's docket.

Plaintiffs (Insured) filed a class action claiming violations of the Texas Insurance Code, alleging insurance discrimination in the non-standard insurance market, which served lower income individuals and those drivers with less than ideal driving records. Defendants (Insurance Companies) each moved to dismiss the case based on the "local controversy" and "home state" mandatory abstention provisions of the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). The court concluded that the underlying case presented questions of Texas state law regarding insurance policies issued for automobiles in the state of Texas by Texas County Mutuals to Texas citizens. The Insured's case did not appear to be national litigation, so the spirit and intent of CAFA were not fulfilled. Therefore, the court held that the district court properly applied the "local controversy" and "home state" mandatory abstention provisions of CAFA diversity jurisdiction.

This case arose when an ocean-going tanker collided with a barge that was being towed on the Mississippi River, which resulted in the barge splitting in half and spilling its cargo of oil into the river. Following the filing of numerous lawsuits, including personal injury claims by the crew members and class actions by fishermen, the primary insurer filed an interpleader action, depositing its policy limits with the court. At issue was the allocations of the interpleader funds as well as the district court's finding that the maritime insurance policy's liability limit included defense costs. The court affirmed the district court's decision that defense costs eroded policy limits but was persuaded that its orders allocating court-held funds among claimants were tentative and produced no appealable order.

After multiple appeals to the court and extensive trial and other proceedings, plaintiffs' Title VII class action for employment discrimination against Lufkin Industries, Inc. (Lufkin) culminated in a favorable multimillion dollar judgment and injunctive relief. Both parties subsequently challenged the district court's attorneys' fee award and Lufkin's complaint that back pay damages were erroneously authorized in an earlier appeal. The court affirmed as to the back pay damages but vacated and remanded as to the attorneys' fees. In particular, given the unrebutted evidence in the record that it was necessary for plaintiffs to retain counsel from outside the Eastern District of Texas, the district court abused its discretion in failing to use the rate counsel charged in their home district as the starting point in the lodestar calculation.

Plaintiffs in this putative class action were buyers and processors of farm-raised crawfish who sought to recover their economic loss from a pesticide manufacturer under the Louisiana Products Liability Act, (LPLA), La. Rev. State. Ann. 9:2800.54. At issue was whether the district court properly granted summary judgment to the manufacturer because plaintiffs' economic loss was unaccompanied by damage to their own person or property. The court held that, although plaintiffs have submitted evidence suggesting that they worked closely with crawfish farmers, plaintiffs have not submitted any evidence suggesting that the pesticide actually harmed their crawfish. The court also held that there was no evidence that plaintiffs were deprived of an actual, legal right to buy crawfish from the crawfish farmers. The court further denied plaintiffs' request to certify their proposed question to the Louisiana Supreme Court. Accordingly, the court affirmed the district court's order of summary judgment.

This appeal concerned the disposition of unclaimed funds from a class action settlement where plaintiffs and defendants settled the underlying antitrust claims and where funds from the settlement were allocated to various identified members of the plaintiff class. At issue was whether the district court was permitted to dispose of the unclaimed funds via cy pres, regardless of the terms of the State's unclaimed property statutes. The court held that the unclaimed funds allocated to Texas plaintiffs were subject to the Unclaimed Property Act (Act), Tex. Prop. Code Ann. 72.001-74.710, that Fed. R. Civ. P. 23(e) was not so broad as to preclude application of the Act, that the question of who had a right to the unclaimed funds was substantive in nature, and that the Act controlled. Accordingly, the judgment of the district court was reversed and vacated, and the case remanded for further proceedings.