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

The case involves six plaintiffs who are users of Tornado Cash, a cryptocurrency mixing service that uses immutable smart contracts to anonymize transactions. Tornado Cash was sanctioned by the Office of Foreign Assets Control (OFAC) under the International Emergency Economic Powers Act (IEEPA) for allegedly facilitating money laundering for malicious actors, including North Korea. The plaintiffs argued that OFAC exceeded its statutory authority by designating Tornado Cash as a Specially Designated National (SDN) and blocking its smart contracts.The United States District Court for the Western District of Texas granted summary judgment in favor of the Department of the Treasury, finding that Tornado Cash is an entity that can be sanctioned, that its smart contracts constitute property, and that the Tornado Cash DAO has an interest in these smart contracts. The plaintiffs appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and focused on whether the immutable smart contracts could be considered "property" under IEEPA. The court concluded that these smart contracts are not property because they are not capable of being owned, controlled, or altered by anyone, including their creators. The court emphasized that property, by definition, must be ownable, and the immutable smart contracts do not meet this criterion. Consequently, the court held that OFAC exceeded its statutory authority by sanctioning Tornado Cash's immutable smart contracts.The Fifth Circuit reversed the district court's decision and remanded the case with instructions to grant the plaintiffs' motion for partial summary judgment based on the Administrative Procedure Act. The court did not address whether Tornado Cash qualifies as an entity or whether it has an interest in the smart contracts, as the determination that the smart contracts are not property was dispositive. View "Van Loon v. Department of the Treasury" on Justia Law

The case involves a challenge to Texas House Bill 20 (H.B. 20) by NetChoice, L.L.C. and the Computer & Communications Industry Association (CCIA). The plaintiffs argue that H.B. 20, which regulates content moderation by social media platforms, violates the First Amendment. The Supreme Court previously emphasized that facial challenges to state laws, especially under the First Amendment, require a thorough exploration of both the law's unconstitutional and constitutional applications. The Supreme Court found the record in this case to be underdeveloped, necessitating further factual discovery to determine who and what activities are covered by H.B. 20 and how these activities burden expression.The United States District Court for the Western District of Texas initially reviewed the case. The district court largely agreed with the plaintiffs that the issues were purely legal questions and required the State of Texas to complete discovery in a short period to avoid burdening the plaintiffs. The district court blocked extensive discovery, which the Supreme Court later indicated was necessary for a proper evaluation of the case.The United States Court of Appeals for the Fifth Circuit is currently reviewing the case. The court remanded the case to the district court for further proceedings consistent with the Supreme Court's instructions. The district court must now determine the full range of activities covered by H.B. 20, identify the actors involved, and assess how content moderation decisions burden expression. The district court must also separately consider the individualized-explanation provisions of H.B. 20 and evaluate whether these provisions unduly burden expressive activity. The Fifth Circuit emphasized that plaintiffs bear the burden of developing a factual record to support their facial challenge to H.B. 20. The case is remanded for further factual development and analysis. View "NetChoice v. Paxton" on Justia Law

A group of major record labels sued Grande Communications Networks, LLC, an internet service provider, for contributory copyright infringement. The plaintiffs alleged that Grande knowingly provided internet services to subscribers who used them to infringe on the plaintiffs' copyrighted works. The plaintiffs presented evidence that Grande received over 1.3 million infringement notices from Rightscorp, a company that identifies infringing activity on peer-to-peer networks, but Grande did not terminate or take action against repeat infringers. Instead, Grande continued to provide internet services to these subscribers, despite knowing about their infringing activities.The United States District Court for the Western District of Texas held a three-week jury trial. The jury found Grande liable for willful contributory copyright infringement and awarded the plaintiffs $46,766,200 in statutory damages. Grande moved for judgment as a matter of law (JMOL) on the issue of liability and for a new trial on damages, but the district court denied these motions. Grande then appealed, challenging the district court's rulings on its JMOL motion, the jury instructions, and the final judgment. The plaintiffs filed a conditional cross-appeal regarding a jury instruction.The United States Court of Appeals for the Fifth Circuit reviewed the case and upheld the jury's verdict, finding that the plaintiffs had provided sufficient evidence to support the jury's finding of contributory copyright infringement. The court concluded that Grande had knowledge of its subscribers' infringing activities and materially contributed to the infringement by continuing to provide internet services without taking basic measures to prevent further damage. However, the court found that the district court erred in awarding statutory damages for each individual song rather than for each album, as the Copyright Act treats all parts of a compilation as one work for statutory damages purposes. Consequently, the court vacated the damages award and remanded the case for a new trial on damages. The plaintiffs' conditional cross-appeal was dismissed as moot. View "UMG Recordings v. Grande Communications Networks, LLC" on Justia Law

The case involved a challenge to Texas House Bill 1181 (H.B. 1181), which imposed new standards on commercial pornographic websites. The law required these sites to verify the age of their visitors and display health warnings about the effects of consuming pornography. The plaintiffs, which included an adult industry trade association, several corporations involved in the production and distribution of pornography, and an individual adult content creator, challenged the constitutionality of the law. The U.S. District Court for the Western District of Texas granted a preliminary injunction against the enforcement of H.B. 1181, concluding that the law likely violated the plaintiffs' First Amendment rights and was preempted by Section 230 of the Communications Decency Act.The U.S. Court of Appeals for the Fifth Circuit, however, vacated the injunction against the age-verification requirement, holding that the requirement was rationally related to the government's legitimate interest in preventing minors' access to pornography and did not violate the First Amendment. Furthermore, the court ruled that Section 230 did not preempt H.B. 1181. However, the court upheld the injunction concerning the health warnings, concluding that they constituted compelled speech in violation of the First Amendment. View "Free Speech Coalition v. Paxton" on Justia Law

In this case, Chad Michael Rider was convicted of three counts of producing or attempting to produce child pornography in violation of 18 U.S.C. § 2251(a) and was sentenced to 720 months’ imprisonment. The evidence presented included numerous videos that Rider had taken of minors, in various stages of undress, in places where they expected privacy such as bathrooms. Rider appealed his conviction and sentence on several bases, including arguing that his conversation with police officers, where he admitted to setting up cameras, should have been suppressed, that expert testimony about his lack of pedophilic tendencies should have been admitted, that there was insufficient evidence to support his convictions, that the jury instructions constructively amended the indictment, and that his sentence was unreasonable.The United States Court of Appeals for the Fifth Circuit rejected all of Rider's arguments and affirmed his conviction and sentence. The court found that Rider was not in custody when he spoke to the officers, and so his statements were not involuntary. The court also found that there was no error in excluding the expert testimony, as it was not relevant to any element of the charges that the government had to prove. The court also found that there was sufficient evidence to support the convictions, as there was ample evidence that Rider had the intent and took the necessary steps to produce child pornography. The court also ruled that the jury instructions did not constructively amend the indictment. Finally, the court found that the sentence was not unreasonable, given the uniquely disturbing facts of the case and Rider's lack of remorse. View "United States v. Rider" on Justia Law

This case is part of the battle between telecommunications providers that are attempting to expand next-generation wireless services (commonly called 5G) and municipalities that are resisting that expansion. The City of Pasadena used another method: aesthetic design standards incorporating spacing and undergrounding requirements The city invoked those requirements to block Crown Castle’s ability to develop a 5G network in the region, and Crown Castle sued for relief. Congress and the Federal Communications Commission (“FCC”) anticipated those strategies and previously had passed the Federal Telecommunications Act (“FTA”) and responsive regulations. As a result, the district court decided in favor of Crown Castle, primarily basing its decision on the expansive language of the FTA and an FCC ruling interpreting the Act in light of 5G technology and associated challenges.The Fifth Circuit affirmed. The court held that the FTA preempts the city’s spacing and undergrounding requirements, and the city forfeited its arguments relating to the safe-harbor provision in the FTA. Nor did the district court abuse its discretion in ordering a permanent injunction. The court explained that, as the court found, the regulations affect only small cell nodes that would permit T-Mobile to offer extensive 5G service in Pasadena. Moreover, the court wrote that a party seeking a permanent injunction must establish (1) actual success on the merits; (2) that it is likely to suffer irreparable harm in the absence of injunctive relief; (3) that the balance of equities tips in that party’s favor; and (4) that an injunction is in the public interest. All those factors weigh in Crown Castle’s favor. View "Crown Castle Fiber v. City of Pasadena" on Justia Law

Congress enacted Sec. 254 of the Telecommunications Act of 1996, which established the Universal Service Fund (USF) and entrusted its administration to the Federal Communications Commission (FCC). The FCC relies on a private entity, the Universal Service Administrative Company (“USAC”), to aid it in its administration of the USF. USAC proposals are approved by the FCC either expressly or after fourteen days of agency inaction.USAC submitted its 2022 first quarter projections to the FCC on November 2, 2021. The FCC published these projections for notice andcomment in accordance with the Administrative Procedure Act. On November 19, 2021, Petitioners submitted comments challenging the constitutionality of the USF and the FCC’s reliance on USAC. The FCC approved USAC’s proposal on December 27, 2021. In response, Petitioners filed this petition on January 5, 2022.On appeal, Petitioners assert that: (1) the Hobbs Act is not a jurisdictional bar to their constitutional claims; (2) Section 254 violates the nondelegation doctrine because Congress failed to supply the FCC with an intelligible principle; and (3) the FCC’s relationship with USAC violates the private nondelegation doctrine because the FCC does not adequately subordinate USAC in its administration of the USF.Finding that the Hobbs Act did not bar Petitioners' claims, the Fifth Circuit reached and rejected the claims on their merits. The Fifth Circuit held that Sec. 254 does not violate the non-delegation doctrine or the private non-delegation doctrine. View "Consumers' Research v. FCC" on Justia Law

The Fifth Circuit affirmed the district court's dismissal for want of jurisdiction of plaintiff's action against HuffPost, alleging that it libeled him by calling him a white nationalist and a Holocaust denier. Plaintiff filed suit against HuffPost in the Southern District of Texas, but HuffPost is a citizen of Delaware and New York. Furthermore, HuffPost has no physical ties to Texas, has no office in Texas, employs no one in Texas, and owns no property there. In this case, plaintiff identifies only one link to Texas that relates to the dispute: the fact that HuffPost's website and the alleged libel are visible in Texas. The court stated that mere accessibility cannot demonstrate purposeful availment. The court explained that although HuffPost's site shows ads and sells merchandise, neither act targets Texas specifically. Even if those acts did target Texas, the court concluded that neither relates to plaintiff's claim, and thus neither supports specific jurisdiction. Finally, plaintiff has not met his burden to merit jurisdictional discovery. View "Johnson v. TheHuffingtonpost.com, Inc." on Justia Law

The Fifth Circuit denied Huawei's petition for review challenging an FCC rule barring the use of government subsidies to buy equipment from companies designated security risks to communications networks. As a preliminary matter, the court dismissed Huawei's claims related to the initial designation for lack of jurisdiction based on ripeness grounds.The court concluded that the FCC reasonably interpreted its authority under the Communications Act in formulating the rule. The court found that the agency reasonably interpreted the Act's "public interest" provisions (47 U.S.C. 254(c)(1)(D), in coordination with section 201(b)), to authorize allocation of universal service funds based on the agency's exercise of limited national security judgment. Furthermore, the agency reasonably interpreted the "quality services" provision in section 254(b)(1) to support that exercise. Therefore, the court deferred to the agency's interpretation under Chevron review and rejected Huawei's argument that the agency lacked statutory authority for the rule. The court also considered the companies' other challenges under the Administrative Procedure Act and the Constitution, finding that claims regarding adequacy of notice, arbitrary and capricious review, vagueness, and due process are unavailing. View "Huawei Technologies USA, Inc. v. Federal Communications Commission" on Justia Law

Plaintiff filed a class action complaint alleging that 5 Star negligently, willfully, and/or knowingly sent text messages to his cell phone number using an automatic telephone dialing system without prior express consent in violation of the Telephone Consumer Protection Act (TCPA). The district court dismissed the complaint for lack of standing.The Fifth Circuit reversed, concluding that plaintiff has alleged a cognizable injury in fact: nuisance arising out of an unsolicited text advertisement. The court concluded that the TCPA cannot be read to regulate unsolicited telemarketing only when it affects the home. The court also concluded that plaintiff's injury has a close relationship to common law public nuisance and, moreover, plaintiff alleges a special harm not suffered by the public at large. The court rejected the Eleventh Circuit's holding in Salcedo v. Hanna, 936 F.3d 1162, 1168 n.6 (11th Cir. 2019), and remanded for further proceedings. View "Cranor v. 5 Star Nutrition, LLC" on Justia Law