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

BP retained the Responders (O’Brien’s and NRC) for nearly $2 billion to assist with the cleanup of the Deepwater Horizon oil spill. Thousands of the Responders' workers filed personal injury lawsuits against BP, which were consolidated and organized into “pleading bundles.” The B3 bundle included “all claims for personal injury and/or medical monitoring for exposure or other injury occurring after the explosion and fire of April 20, 2010.” In 2012, BP entered the “Medical Settlement” on the B3 claims with a defined settlement class. The opt-out deadline closed in October 2012. The Medical Settlement created a new type of claim for latent injuries, BackEnd Litigation Option (BELO) claims. After the settlement, plaintiffs could bring opt-out B3 claims if they did not participate in the settlement, and BELO claims if they were class members who alleged latent injuries and followed the approved process. Responders were aware of the settlement before the district court approved it but neither Responder had control over the negotiations, nor did either approve the settlement.In 2017, BP sought indemnification for 2,000 BELO claims by employees of the Responders. The Fifth Circuit held that BP was an additional insured up to the minimum amount required by its contract with O’Brien’s; the insurance policies maintained by O’Brien’s cannot be combined to satisfy the minimum amount. O’Brien’s is not required to indemnify BP because BP materially breached its indemnification provision with respect to the BELO claims. View "O'Brien's Response Management, L.L.C. v. BP Exploration & Production, Inc." on Justia Law

In 2012, the Archdiocese purchased a roof membrane system from Siplast, for installation at a Bronx high school. Siplast guaranteed that the system would “remain in a watertight condition for a period of 20 years.” In 2016, school officials observed water damage in the ceiling tiles after a rainstorm and notified the installing contractor and Siplast. A designated Siplast contractor unsuccessfully attempted to repair the damage and prevent leaks. The Archdiocese ultimately obtained an estimate for remediation and replacement of approximately $5,000,000.The ensuing lawsuit alleged “Breach of the Guarantee” Siplast submitted a claim to its insurer, EMCC, asserting coverage under commercial general liability policies that covered “property damage” caused by an “occurrence,” defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The policies were subject to exclusions for “Your Product/Your Work” and “Contractual Liability.” The district court granted EMCC summary judgment, finding that while the complaint did allege property damage that was caused by an “occurrence,” the alleged damage fit within the Your Product/Your Work Exclusion. The Fifth Circuit reversed, finding that EMCC had a duty to defend. The underlying complaint contains allegations of damage to property other than Siplast’s roof membrane as part of the claim against Siplast; the exclusion does not apply. View "Siplast, Inc. v. Employers Mutual Casualty Insurance Co." on Justia Law

Texas and Wyoming both regulate the use of indemnity agreements in their oilfields. Wyoming, concerned that indemnification disincentivizes safety, forbids oilfield indemnity agreements. Wyo. Stat. 30-1-131. Texas, concerned that large oil companies will use their leverage to demand indemnity from independent operators, also disfavors the agreements but does not ban them; it allows indemnification in limited situations including when the indemnity is mutual and backed by insurance. Tex. Civ. Prac. & Rem. 127.003, 127.005.Cannon, a Wyoming oil-and-gas exploration company, and Texas-based KLX entered into a “Master Equipment Rental Agreement,” providing that Texas law governs the agreement and that the parties must “protect, defend, [and] indemnify” each other against losses involving injuries sustained by the other’s employees, regardless of who is at fault “to the maximum extent permitted by applicable law.” Most of the work performed under the contract occurred in Wyoming with none in Texas. Indemnity was sought for a Wyoming lawsuit filed by a Wyoming resident injured in a Wyoming oilfield operated by a Wyoming business.The Fifth Circuit held that Wyoming law prevails and that the indemnity provision in the Agreement is unenforceable. Wyoming has a more significant relationship to the parties and a materially greater interest in applying its policy; its anti-indemnity policy is “fundamental.” View "Cannon Oil & Gas Well Services, Inc. v. KLX Energy Services, L.L.C." on Justia Law

BillCutterz granted KGS a license to sell BillCutterz’s services and intellectual property. The parties agreed to arbitrate their disputes; BillCutterz was entitled to royalties and commissions based on KGS’s revenue. The Agreement automatically renews for successive five-year periods until terminated “for cause.” In 2017, a dispute arose. An arbitrator ordered KGS to pay BillCutterz all unpaid commissions and royalties through December 31, 2017, and from January 1, 2018 “for the duration of the License Agreement.” BillCutterz sought confirmation of the award. KGS moved to vacate the award. The district court confirmed the award. KGS filed numerous unsuccessful motions and an unsuccessful appeal but paid the retrospective relief and at least part of the prospective relief. The parties continue to disagree about whether the award’s order entitles BillCutterz to ongoing compensation and whether KGS incurred (and perhaps diverted) revenue after December 6, 2018.KGS sought relief from the judgment, arguing that it fully satisfied all obligations through December 6, 2018, that it ceased operating on that date, and had terminated the License Agreement. KGS sought “protection” from post-judgment discovery. BillCutterz suspected that KGS was still earning revenue under another trade name. The district court refused KGS relief and granted BillCutterz’s motion to compel discovery. The Fifth Circuit dismissed an appeal for lack of jurisdiction. Pending discovery and adjudication based on such discovery of whether KGS has fully satisfied the arbitration award, there is no final judgment to consider. View "Gross v. Keen Group Solutions, L.L.C." on Justia Law

Plaintiffs filed suit alleging that Allstate breached the terms of their insurance policies by not using either the "Cost Approach" or "Comparable Sales Approach" to determine the "Actual Cash Value" (ACV) of their automobiles. The Fifth Circuit affirmed the district court's grant of Allstate's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), concluding that neither the contract nor Texas state law requires either the Cost or the Comparable Sales Approach. View "Cody v. Allstate Fire and Casualty Insurance Co." on Justia Law

The European Telecommunications Standards Institute (ETSI) established many global standards for 3G, 4G, and 5G cellular communications technology. ETSI members that own standard-essential patents must provide “an irrevocable undertaking in writing that [they are] prepared to grant irrevocable licenses on fair, reasonable and non-discriminatory (FRAND)” terms. Ericsson holds patents that are considered essential to the ETSI standards and agreed to grant licenses to other companies to use its standard-essential patents on FRAND terms. HTC produces mobile devices that implement those standards; to manufacture standard-compliant mobile devices, HTC has to obtain a license to use Ericsson’s patents. Ericsson and HTC have previously entered into three cross-license agreements for their respective patents. Negotiations to renew one of those agreements failed.HTC filed suit, alleging that Ericsson had breached its commitment to provide a license on FRAND terms and had failed to negotiate in good faith. The jury found in favor of the defendants. The district court entered a separate declaratory judgment that the defendants had affirmatively complied with their contractual obligations. The Fifth Circuit affirmed, rejecting challenges to the district court’s exclusion of HTC’s requested jury instructions, its declaratory judgment that Ericsson had complied with its obligation to provide HTC a license on FRAND terms, and the exclusion of certain expert testimonial evidence as hearsay. View "HTC Corp. v. Telefonaktiebolaget LM Ericsson" on Justia Law

Kelley wanted to publish “Hooker to Looker,” to promote her cosmetics business. Di Angelo agreed to publish and distribute Kelley’s then-unwritten Book, with Kelly receiving 50 percent of the net royalties. Kelley provided Di Angelo with a three-page manuscript, detailing her background and outlining the Book’s topics. Di Angelo claims it wrote the Book while “communicating and/or collaborating with Kelley.” The Book Di Angelo distributed lists only Kelley as the copyright holder. Di Angelo sold the initial 1,000-copy print run. Kelley asked Di Angelo for an updated version. Di Angelo alleges that it prepared the updated work, then discovered that Kelley was attempting to work directly with Di Angelo’s printer, in violation of the contract.Kelley sued, claiming that Di Angelo overcharged her and alleging that she “is the sole owner of all copyrights.” Di Angelo counterclaimed for breach of contract. That state court action is pending. Di Angelo filed a federal suit, seeking a declaration that it owns the copyrights. Kelley challenged federal jurisdiction, arguing the claim was premised solely on her alleged breach of the contract, a controversy governed by Texas law. Di Angelo claimed resolution of the authorship dispute required interpretation of federal copyright law, including the definitional and ownership provisions in 17 U.S.C. 101 & 201, which the state court lacks jurisdiction to address. The Fifth Circuit reversed the dismissal of the suit. Di Angelo’s claim necessarily implicates federal law definitions of “Initial ownership” and “Works made for hire.” View "Di Angelo Publications, Inc. v. Kelley" on Justia Law

Petrobras, the American subsidiary of a Brazilian oil and gas producer, alleges that Samsung, a Korean shipbuilder, secretly bribed Petrobras executives to finalize a contract between Petrobras and Pride. In a 2007 contract, Samsung had an option to build a deep-sea drillship if Pride secured a drilling-services contract with another company. Samsung arranged to bribe Petrobras executives to secure Pride's contract for the construction of DS-5. After Petrobras put DS-5 on permanent standby and conducted an internal audit, it informed Brazilian prosecutors. A 2014 investigation into corruption throughout Brazil, included a separate bribery scheme in which Samsung contracted with Petrobras to construct two other ships.In 2019, Petrobras sued Samsung for its role in the bribery that led to the Petrobras–Pride DS-5 contract, citing common-law fraud under Texas law and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c),(d). The district court took judicial notice of Petrobras’s 2014 SEC filing and Washington Post and Reuters articles, describing the bribery schemes underlying other Samsung–Petrobras contracts that did not mention the Petrobras–Pride DS-5 contract. From those, the court inferred that Petrobras was on notice by 2014 that the DS-5 contract was suspect. Holding that “the specific drillship in this case is not subject to its own limitations clock,” the district court dismissed the suit. The Fifth Circuit reversed. The pleadings do not establish as a matter of law that Petrobras had actual or constructive notice of its injury before March 2015, so dismissal at the pleading stage was improper. View "Petrobras America, Inc. v. Samsung Heavy Industries Co., Ltd." on Justia Law

The Fifth Circuit granted the motion to file out-of-time motions for panel rehearing and to recall the mandate; denied the motions; and withdrew its prior opinion, substituting the following opinion.After a federal jury found that 3 Star Properties fraudulently sold SED Holdings millions in loans and awarded SED over $14 million in damages, the Fifth Circuit affirmed the liability judgment against 3 Star but concluded that the damages award was excessive, remanding for remittitur of the award.he court concluded that res judicata does not bar SED's claims and the district court did not err by denying the Hyland Defendants' motion for JMOL on that basis. On the merits, the court concluded that the district court correctly denied the Hyland Defendants’ renewed JMOL as to the fraudulent transfer claim; the district court properly denied their new trial motion as to the conspiracy claim; and the district court did not commit reversible error in instructing the jury on the fraudulent transfer claim and did not abuse its discretion by declining to ask the jury whether subsequent transfers out of the escrow account were fraudulent, when those transfers were not at issue.The court remanded for remittitur and instructed the district court to subtract at least the following three identifiable amounts from the jury award: (1) the double-counted $2 million; (2) the $4 million in lost profits; and (3) the $551,578.17 already recovered from the Biltmore II settlement (in total, $6,551,578.17). The court concluded that no evidence supports the jury conclusion that Home Servicing breached the Servicing Agreement with SED Holdings and thus a new trial is warranted. Therefore, the court vacated the judgment as to SED’s breach of contract claim against Home Servicing and remanded for a new trial. In regard to SED's cross appeal against Nations Law firm, the court concluded that the SED has not shown a fact dispute as to Nations' "full knowledge of all material facts" and the district court did not err by granting summary judgment to Nations.The Hyland Defendants urged the court to reverse the judgment against 3 Star and Johnson, who are not parties to this appeal, but the court declined to do so. View "SED Holdings, LLC v. TM Prop Solutions, LLC" on Justia Law

Colulmbia City seeks to compel IMA to arbitrate a dispute involving unreimbursed medical fees. The parties are connected by a series of intermediary agreements within a preferred provider organization (PPO) network that allows patients in covered health plans to receive medical services from participating hospitals at discounted rates, and one of these agreements contains an arbitration clause. It is undisputed that IMA is not a party or signatory to the Hospital Agreement that contains the arbitration clause.The Fifth Circuit affirmed the district court's denial of Columbia Hospital's motion to compel arbitration. Applying Texas law, the court concluded that the district court correctly applied this circuit's precedent that knowledge of the agreement requires knowledge of the contract's basic terms. In this case, the district court did not clearly err in concluding, based on the record before it, that IMA lacked the requisite knowledge of the Hospital Agreement and its basic terms to be compelled to arbitrate under direct benefits estoppel. Alternatively, the court declined, contrary to Columbia Health's assertions, to construe the series of contracts between IMA, PPOplus, HealthSmart and Columbia Hospital as a unified contract. View "IMA, Inc. v. Columbia Hospital Medical City" on Justia Law