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

Carol Rose, a prominent figure in the American Quarter Horse industry, entered into a series of agreements with Lori and Philip Aaron in 2013. The Aarons agreed to purchase a group of Rose’s horses at an auction, lease her Gainesville Ranch with an option to buy, and employ her as a consultant. The relationship quickly soured after the auction, with both sides accusing each other of breaches. Rose locked the Aarons out of the ranch and asserted a stable keeper’s lien for charges exceeding those related to the care of the Aarons’ horses. The Aarons paid the demanded sum and removed their horses. Litigation ensued, including claims by Jay McLaughlin, Rose’s former trainer, for damages related to the value of two fillies.The bankruptcy filings by Rose and her company led to the removal of the ongoing state-court litigation to the United States Bankruptcy Court. After trial, the bankruptcy court ruled in favor of the Aarons on their breach of contract and Texas Theft Liability Act (TTLA) claims, awarding damages and attorneys’ fees, and in favor of McLaughlin on his claim. The United States District Court for the Eastern District of Texas reversed the bankruptcy court’s rulings on the Aarons’ claims and McLaughlin’s claim, vacating the damages and fee awards.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s reversal of the damages award for the Aarons’ breach of contract claim, holding that the Aarons failed to prove damages under any recognized Texas law measure. The Fifth Circuit reversed the district court’s judgment on the TTLA claim, holding that Rose’s threat to retain the Aarons’ horses for more than the lawful amount could constitute coercion under the TTLA, and remanded for further fact finding on intent and causation. The court also reversed and remanded the judgment regarding McLaughlin’s claim, finding his damages testimony legally insufficient. The court left the issue of attorneys’ fees for further proceedings. View "Rose v. Equis Equine" on Justia Law

A black man was hired as the first black city manager of a Texas city and led several major development initiatives. His tenure became contentious, especially after two new city council members, who opposed his policies, were elected. The conflict allegedly took on a racial character, and the city manager reported race-based discrimination. Eventually, the city council voted to part ways with him “without cause,” entering into a separation agreement that included a severance payment and a non-disparagement clause. After his departure, some council members publicly criticized him and later persuaded the council to rescind the separation agreement, citing a legal opinion that it was invalid. The city demanded the return of the severance payment, prompting the former city manager to sue, alleging racial discrimination under 42 U.S.C. § 1981 and breach of contract under Texas law.The United States District Court for the Western District of Texas granted summary judgment to the plaintiff on the validity of the separation agreement and denied the city’s motions for judgment as a matter of law. The case proceeded to trial, where a jury found for the plaintiff on both claims, awarding substantial damages. The district court entered judgment accordingly, later suggesting remittitur due to statutory limits on damages for breach of contract, which the plaintiff accepted.The United States Court of Appeals for the Fifth Circuit reviewed the case. It held that the plaintiff failed to establish municipal liability for racial discrimination under § 1981 and § 1983 because he could not show that a majority of the city council acted with discriminatory intent, nor could he use the “cat’s paw” theory to impute animus under Monell. However, the court affirmed the district court’s judgment that the separation agreement was valid and enforceable, and that the city breached the contract by attempting to rescind it. The court reversed the judgment on the civil rights claim, affirmed the breach of contract ruling, and remanded for consideration of attorney’s fees. View "Jones v. City of Hutto" on Justia Law

Several development groups entered into a public improvement contract with a Texas city, purchasing over 60 acres of land, much of it in a flood zone. The developers received a variance from the city, exempting them from obtaining a federal floodplain permit (CLOMR), and invested significant funds in developing the property, including constructing a bridge. In 2018, the parties executed updated agreements, including a Master Development Agreement (MDA), which required certain conditions to be met within five years or the contract would automatically terminate, ending the city’s reimbursement obligations. As the deadline approached, the city informed the developers that they would now need to obtain the previously waived CLOMR, citing a later-enacted ordinance. Unable to comply in time, the developers sought an extension, which the city council denied, resulting in termination of the MDA.The developers sued in Texas state court, alleging the city’s actions constituted an unconstitutional taking under federal and state law, and also brought claims for breach of contract and violations of the Texas Vested Rights Statute. The city removed the case to the United States District Court for the Northern District of Texas and moved to dismiss. The district court dismissed the federal takings and declaratory judgment claims, finding the developers had not sufficiently alleged that the city acted in its sovereign rather than commercial capacity, and remanded the remaining state-law claims to state court.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed. The court held that the developers’ allegations arose from a contractual dispute, not a sovereign act by the city, and thus did not state a plausible takings claim under the Fifth Amendment. The court also found no abuse of discretion in the district court’s decision to dismiss the declaratory judgment claim, as the core issues would be resolved in the remanded state court action. View "Mesquite Asset Recovery Grp v. City of Mesquite" on Justia Law

WorldVue Connect, LLC, a company specializing in in-room entertainment and technology for hotels, purchased the domestic assets of Hospitality WiFi, LLC from Jason Szuch for $9,450,000 in 2022. Szuch retained interests in international affiliates and received a minority stake in a new entity, WorldVue Global, LLC. The transaction included the transfer of goodwill, trade secrets, and a valuable technical support team. In 2024, after the business relationship soured, WorldVue bought out Szuch’s minority interest and entered into a settlement agreement with Szuch and his companies, as well as a separation agreement with a key employee, Shan Griffin. These agreements, governed by Texas law, contained non-compete, non-solicitation, and confidentiality provisions effective for one year.Following the agreements, evidence emerged that the Szuch Parties recruited WorldVue’s employees and independent contractors, including those providing remote support to clients in the contractually defined “Restricted Area.” WorldVue filed suit in Texas state court for breach of contract and tortious interference, seeking injunctive relief. The state court issued a temporary restraining order, and after removal to the United States District Court for the Southern District of Texas, the TRO was extended. The district court found that the Szuch Parties breached the agreements by soliciting WorldVue’s workers and using confidential information, and granted a preliminary injunction prohibiting further solicitation and use of confidential information.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the preliminary injunction for abuse of discretion. The court affirmed the injunction, holding that the non-solicitation provision applied to workers performing services in the Restricted Area, regardless of their physical location, and that customer service agents were covered as independent contractors. The court modified the injunction to clarify that “confidential information” does not include Szuch’s personal knowledge of worker identities acquired prior to the asset sale. View "WorldVue Connect v. Szuch" on Justia Law

After Hurricane Laura damaged an offshore platform owned by Genesis Energy, Genesis contracted with Danos, LLC to perform repairs. To support the project, Genesis also chartered a vessel from a third party to house and transport the repair crew and equipment. During the course of repairs, a Danos employee was injured while being transferred from the platform to the vessel and subsequently sued Danos, Genesis, and the vessel owner. Genesis filed a crossclaim against Danos, seeking defense and indemnification under a 2008 Master Services Agreement, arguing that the contract required Danos to indemnify Genesis for such claims.The United States District Court for the Southern District of Texas reviewed cross-motions for summary judgment from Genesis and Danos. The district court determined that the contract between Genesis and Danos was not a “maritime contract” under the Outer Continental Shelf Lands Act (OCSLA) and relevant Fifth Circuit precedent, specifically In re Larry Doiron, Inc. As a result, Louisiana law applied, which rendered the indemnification provision unenforceable. The district court granted summary judgment in favor of Danos, denied Genesis’s motion, and dismissed Genesis’s crossclaim with prejudice. The court’s order was designated as a final judgment under Federal Rule of Civil Procedure 54(b), and Genesis appealed.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s grant of summary judgment de novo. The Fifth Circuit held that the contract was not a maritime contract because the parties did not expect the vessel to play a substantial role in the completion of the repair work; its functions were limited to transportation, housing, and ancillary support, which are insufficient under the applicable legal standard. The Fifth Circuit affirmed the district court’s judgment, holding that Louisiana law applied and the indemnification provision was unenforceable. View "Genesis Energy v. Danos" on Justia Law

Plaintiffs initiated a lawsuit against eleven defendants, alleging a scheme involving breach of employment agreements, misappropriation of funds, embezzlement, and fraud. The suit was originally filed in the Circuit Court of Harrison County, Mississippi. Defendants removed the case to the United States District Court for the Southern District of Mississippi, citing diversity jurisdiction. Plaintiffs sought to remand the case to state court, relying on a provision in three defendants’ contracts that specified venue in Harrison County, Mississippi, and included language about consent to personal jurisdiction and venue solely within those forums, along with a waiver of objections to those forums.The United States District Court for the Southern District of Mississippi interpreted the contractual provision as a waiver of the defendants’ right to remove the case to federal court. The district court reasoned that the provision gave the first-filing party the sole right to choose the court, and that by waiving objections to venue and personal jurisdiction, the defendants had also waived their removal rights. Consequently, the district court remanded the case to state court.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s interpretation of the contractual waiver de novo, applying Mississippi law. The Fifth Circuit held that the contract provision did not constitute a clear and unequivocal waiver of the defendants’ right to remove the case to federal court. The court found that the language regarding venue and jurisdiction could reasonably refer to geographic location and did not explicitly or implicitly waive removal rights, especially since the contract contemplated litigation in both state and federal courts in Harrison County. The Fifth Circuit reversed the district court’s remand order. View "Gulf Coast Pharmaceuticals Plus, L.L.C. v. RFT Consulting" on Justia Law

Fieldwood Energy LLC, an oil and gas company, contracted with Island Operating Company, Inc. (IOC) through a Master Services Contract (MSC) to provide workers for oil and gas production services on offshore platforms in the Gulf of Mexico. The MSC defined the work as “Lease Operators,” and a subsequent work order requested “A Operators” to perform tasks such as compliance testing and equipment checks on the platforms. The contract required Fieldwood to provide marine transportation for workers and equipment, which it did by hiring Offshore Oil Services, Inc. (OOSI) to transport IOC employees, including Tyrone Felix, to the platforms. Felix was injured while disembarking from OOSI’s vessel, the M/V Anna M, and subsequently made a claim against OOSI.OOSI filed a complaint for exoneration or limitation of liability in the United States District Court for the Eastern District of Louisiana. OOSI also sought indemnification from IOC under the MSC’s indemnity provision. IOC moved for summary judgment, arguing that Louisiana law, specifically the Louisiana Oilfield Anti-Indemnity Act (LOAIA), rendered the indemnity provision unenforceable. The district court agreed, finding that the MSC was not a maritime contract because vessels were not expected to play a substantial role in the contract’s performance, and thus Louisiana law applied. The court granted summary judgment for IOC on indemnity and insurance coverage, and later on defense costs after OOSI settled with Felix.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s summary judgment de novo. The Fifth Circuit held that the MSC was not a maritime contract because neither its terms nor the parties’ expectations contemplated that vessels would play a substantial role in the contract’s completion. As a result, Louisiana law applied, and the LOAIA barred enforcement of the indemnity provision. The Fifth Circuit affirmed the district court’s summary judgment in favor of IOC. View "Offshore Oil Services, Inc. v. Island Operating Co." on Justia Law

A trading company and a base oil manufacturer entered into a sales agreement in 2016, under which the manufacturer would serve as the exclusive North American sales representative for a high-quality base oil product distributed by the trading company. The agreement included noncompete provisions and was set to expire at the end of 2021. In late 2020, suspicions arose between the parties regarding potential breaches of the agreement, leading to a series of letters in which the trading company accused the manufacturer of selling a competing product and threatened termination if the alleged breach was not cured. The manufacturer responded by denying any breach and, after further correspondence, declared the agreement terminated. The trading company agreed that the agreement was terminated, and both parties ceased their business relationship.The trading company then filed suit in the United States District Court for the Southern District of Texas, alleging antitrust violations, breach of contract, business disparagement, and misappropriation of trade secrets. The manufacturer counterclaimed for breach of contract and tortious interference. After a bench trial, the district court found in favor of the manufacturer on the breach of contract and trade secret claims, awarding over $1.3 million in damages. However, the court determined that the agreement was mutually terminated, not due to anticipatory repudiation by the trading company, and denied the manufacturer’s request for attorneys’ fees and prevailing party costs.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s finding that the trading company did not commit anticipatory repudiation and that the agreement was mutually terminated. The Fifth Circuit also affirmed the denial of prevailing party costs under Rule 54(d) of the Federal Rules of Civil Procedure. However, the appellate court vacated the denial of attorneys’ fees under the agreement’s fee-shifting provision and remanded for further proceedings on that issue. View "Penthol v. Vertex Energy" on Justia Law

The dispute centers on a commercial property in Jackson, Mississippi, owned by Retro Metro, LLC. In 2011, the Jackson City Council authorized the mayor to negotiate and execute a lease with Retro Metro for office space in the former Metro Center Mall, with specific limitations on square footage, annual rent, and lease term. The City and Retro Metro executed a written lease in April 2011, and the City occupied the property. Over the years, the lease was the subject of multiple lawsuits between the parties, with the City previously admitting in court filings that it had entered into the lease. In 2023, after the City Council authorized the mayor to terminate the lease and vacate the premises, Retro Metro and its partners filed suit in federal court, alleging breach of contract and other claims.The United States District Court for the Southern District of Mississippi granted summary judgment for the City, finding that the lease was unenforceable under Mississippi’s “minutes rule,” which requires that public board contracts be sufficiently detailed in the board’s official meeting minutes. The court also dismissed all claims against the individual defendants. Retro Metro appealed, challenging only the summary judgment on its breach of contract claim.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo and affirmed the district court’s judgment. The Fifth Circuit held that the lease did not satisfy the minutes rule because the City Council’s minutes did not contain enough detail to establish the parties’ obligations and liabilities without resorting to other evidence. The court further held that judicial estoppel could not override the minutes rule under Mississippi law, and that the City’s failure to raise the minutes rule earlier did not constitute waiver, as the burden to show a valid contract rested with Retro Metro. The district court’s judgment was affirmed. View "Retro Metro v. City of Jackson" on Justia Law

A company specializing in supply chain services, CAM, entered into negotiations with Rockwall, a corrugated packaging manufacturer, to provide warehousing services in Louisiana. The parties discussed terms, exchanged draft contracts, and CAM ultimately leased warehouse space for three years in anticipation of a long-term arrangement. However, neither party ever executed a written contract, and CAM began providing services and invoicing Rockwall monthly. Rockwall paid these invoices for over two years, but later terminated the relationship, citing changes in its business needs.CAM filed suit in the United States District Court for the Western District of Louisiana, alleging breach of contract and detrimental reliance. The district court found that while the parties had an oral agreement for warehousing services, there was no binding contract for a fixed three-year term because both parties intended to be bound only by a written, executed agreement. The court also held that CAM’s detrimental reliance claim failed, as it was unreasonable for CAM to rely on the existence of a three-year contract term when no such term was ever agreed upon, either orally or in writing. The district court granted summary judgment in favor of Rockwall and dismissed CAM’s claims.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s decision. The Fifth Circuit held that under Louisiana Civil Code article 1947, when parties contemplate a written contract, there is a presumption that they do not intend to be bound until the contract is executed in that form. The court found that this presumption was not rebutted by the parties’ conduct, including Rockwall’s payment of monthly invoices. The court also concluded that CAM failed to establish the elements of detrimental reliance, as there was no promise or representation by Rockwall of a fixed contract term. The summary judgment in favor of Rockwall was affirmed. View "CAM Logistics v. Pratt Industries" on Justia Law