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

In 2019, Ancor Holdings, L.P. (Ancor) and Landon Capital Partners, L.L.C. (Landon) entered into letters of intent to invest in and acquire a majority interest in ICON EV, L.L.C. (ICON). The deal fell through, and Landon and ICON entered into their own agreement. Ancor sued Landon and ICON for breach of contract and tortious interference, respectively. The trial court dismissed Ancor’s tortious interference claim against ICON as a matter of law and denied Ancor’s declaratory judgment claim. The jury found for Ancor on the breach of contract claim against Landon, awarding $2,112,542 in damages.The United States District Court for the Northern District of Texas initially handled the case. The trial court dismissed Ancor’s tortious interference claim against ICON and denied Ancor’s declaratory judgment claim. The jury found Landon breached the contract and awarded Ancor damages. Ancor appealed the dismissal of its claims, and Landon cross-appealed the jury’s verdict.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court reversed the trial court’s dismissal of Ancor’s declaratory judgment and tortious interference claims, remanding them for a jury trial. The appellate court affirmed the jury’s finding that Landon breached the contract but reversed the trial court’s judgment on the reimbursement amount, instructing it to determine 80% of all third-party costs incurred. The court held that Ancor was entitled to a jury trial on its declaratory judgment claim and that sufficient evidence supported the tortious interference claim against ICON. The court also found that the trial court did not err in submitting the breach of contract claim to the jury, nor did the jury err in its findings. View "Ancor Holdings, L.P. v. Landon Capital Partners, L.L.C." on Justia Law

A petrochemical company, Sasol, expanded its Lake Charles, Louisiana facility and required a storage-in-transit yard. The Kansas City Southern Railway Company (KCSR) was contracted to construct and lease the railyard to Sasol. The lease agreement stipulated that Sasol would pay KCSR $102 per linear foot of track annually. A dispute arose over whether the term "track" included the track within switches, which are used to divert trains from one track to another.The United States District Court for the Northern District of Texas found the lease ambiguous regarding whether "track" included switches. After a bench trial, the court ruled in favor of Sasol, interpreting the lease to exclude switches from the track for which Sasol had to pay. Consequently, the court set the rent at $14,806,932 annually, less than what KCSR had invoiced, and awarded Sasol damages and interest for overpayments.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court examined the lease's language and found no ambiguity. It determined that the term "track" unambiguously included the track within switches. The court noted that the lease's various references to "track" and "switches" did not imply mutual exclusivity and that interpreting them as such would lead to absurd results. Therefore, the court held that KCSR was entitled to charge for all track within the leased premises, including switches.The Fifth Circuit reversed the district court's decision and remanded the case for further proceedings consistent with its opinion. View "The Kansas City Southern Railway Company v. Sasol Chemicals (USA), L.L.C." on Justia Law

A sub-subcontractor, Diamond Services Corporation, entered into a contract with Harbor Dredging, a subcontractor, to perform dredging work in the Houston Ship Channel. The prime contract for the project was awarded to RLB Contracting by the U.S. Army Corps of Engineers, and RLB obtained a surety bond from Travelers Casualty and Surety Company of America. During the project, unexpected site conditions, including the presence of tires, caused delays and increased costs. Diamond continued working based on an alleged agreement that it would be compensated through a measured-mile calculation in a request for equitable adjustment (REA) submitted by RLB to the Corps. However, RLB later settled the REA for $6,000,000 without directly involving Diamond in the negotiations and issued a joint check to Harbor and Diamond for $950,000.The United States District Court for the Southern District of Texas dismissed some of Diamond's claims, including those for unjust enrichment and express contractual claims against RLB, but allowed Diamond's quantum meruit claim to proceed. The court also denied Travelers' motion to dismiss Diamond's Miller Act claims but required Diamond to amend its complaint to include proper Miller Act notice, which Diamond failed to do timely. Subsequently, the district court granted summary judgment in favor of RLB and Harbor, dismissing Diamond's remaining claims and striking Diamond's untimely second amended complaint.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's summary judgment against Diamond's quantum meruit claims, holding that the express sub-subcontract covered the damages Diamond sought and that Diamond failed to provide evidence of the reasonable value of the work performed. The court also affirmed the dismissal of Diamond's Miller Act claim, as the damages sought were not recoverable under the Act. The court dismissed Diamond's appeal regarding the tug-expenses claim due to untimeliness. View "Diamond Services v. RLB Contracting" on Justia Law

Molecular Biologicals, a pharmaceutical start-up, entered into a Master Service Agreement with Mission Pharmacal, a third-party logistics provider, in September 2017. Under this agreement, Mission provided distribution services for Molecular’s product, Keragel, including order processing and return processing. In 2018, Mission sold $2,387,704 worth of Molecular’s products to major pharmaceutical wholesalers, but due to lack of sales, $1,780,027 worth of products were returned in 2019. Mission issued credits to the wholesalers for these returns, a process referred to as "chargeback." Initially, Molecular agreed to reimburse Mission for these chargebacks but later refused, leading Mission to file a lawsuit.The United States District Court for the Western District of Texas held a bench trial and determined that the contract did not explicitly require Molecular to reimburse Mission for the chargebacks. The court found that the contract was unambiguous in its silence on this issue and ruled that Mission could not recover the costs of the returns under either a breach of contract or quantum meruit theory. The district court awarded Mission recovery for unpaid service fees but not for the chargebacks.The United States Court of Appeals for the Fifth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that the contract, when interpreted in its entirety, clearly required Molecular to reimburse Mission for the chargebacks. The term "chargeback" in the contract implied that Mission would handle the logistics and bookkeeping of returns, while Molecular would bear the financial responsibility. The court found that the district court erred in its interpretation by not considering the harmonious reading of the contract provisions. Consequently, the Fifth Circuit ruled that Molecular breached the contract by failing to reimburse Mission and remanded the case for further proceedings consistent with this opinion. View "Mission Pharmacal v. Molecular Biologicals" on Justia Law

Jose Pedro Garcia was convicted of possession with intent to distribute 40 grams or more of a mixture containing fentanyl. He pled guilty to the charge. While awaiting sentencing, Garcia assaulted another detainee. This incident led the probation officer to determine that Garcia was not entitled to a reduction for acceptance of responsibility under U.S.S.G. § 3E1.1, a determination the Government adopted. The district court agreed and denied any reduction for acceptance of responsibility.Garcia appealed to the United States Court of Appeals for the Fifth Circuit, arguing that the Government breached the plea agreement by not recommending a three-level reduction for acceptance of responsibility. Garcia did not raise this issue in the district court, so the appellate court reviewed for plain error. Garcia contended that the plea agreement required the Government to move for a three-level reduction under § 3E1.1. However, the plea agreement only obligated the Government to move for the third point of reduction under § 3E1.1(b) if the district court awarded the initial two-level reduction under § 3E1.1(a). The agreement did not restrict the Government's arguments regarding the initial two-level reduction.The Fifth Circuit found that the Government's argument against the reduction was consistent with a reasonable understanding of the plea agreement and did not constitute a breach. Since Garcia did not demonstrate that the Government breached the plea agreement and did not argue that the appeal waiver in his plea agreement was invalid, the court dismissed the appeal. The court did not consider Garcia’s remaining arguments challenging the denial of the reduction under § 3E1.1. View "United States v. Garcia" on Justia Law

Bruce Molzan, a well-known chef, filed a lawsuit against Bellagreen Holdings, LLC, and other associated entities and individuals, alleging trademark infringement and other claims under the Lanham Act and Texas law. Molzan claimed that he had been using the "RUGGLES" trademarks for over forty years and that the defendants misused these trademarks after a forced sale of his restaurants. He alleged that the defendants continued to use the "RUGGLES GREEN" trademark and domain name without authorization, causing consumer confusion.The United States District Court for the Southern District of Texas dismissed all of Molzan's claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. The court found that Molzan's allegations were conclusory and did not establish a connection between the defendants and the third-party websites causing the confusion. The court also determined that the Settlement Agreement between the parties addressed the alleged infringements and provided a remedy for such transgressions.The United States Court of Appeals for the Fifth Circuit reviewed the case and found that Molzan's complaint contained well-pleaded factual allegations that made his claims facially plausible. The court noted that the allegations established a likelihood of confusion due to the defendants' continued use of the "RUGGLES" trademarks. The court also found that the district court erred in assuming the veracity of the defendants' assertions over Molzan's well-pleaded allegations. The Fifth Circuit reversed the district court's dismissal of Molzan's federal and state trademark infringement, false advertising, unfair competition, and state trademark dilution claims. The court also reversed the dismissal of Molzan's breach of contract and unjust enrichment claims and remanded the case for further proceedings. Additionally, the court vacated the district court's dismissal of the Web Defendants and the denial of Molzan's motion for leave to amend his complaint. View "Molzan v. Bellagreen Holdings" on Justia Law

Balboa Capital Corporation, a financing company, entered into agreements with various physicians across multiple states to finance their participation in a telehealth program run by America’s Medical Home Team (MHT). MHT, however, was operating a Ponzi scheme and failed to deliver the promised services and equipment. Balboa financed the physicians' participation by paying MHT directly and then sought repayment from the physicians through monthly payment agreements (MPAs) or installment payment agreements (IPAs). The physicians, unaware of the full terms and believing they could withdraw without financial obligations, defaulted on their payments after MHT's collapse.The United States District Court for the Northern District of Texas consolidated multiple collection actions filed by Balboa against the physicians. The court struck an evidentiary exhibit that combined the payment agreements with invoices, ruling that the invoices were not properly authenticated and constituted impermissible hearsay. The court then granted summary judgment in favor of the physicians, finding that the payment agreements alone did not constitute valid contracts as they lacked essential terms such as the total amount financed and the cost of financing.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s rulings. The appellate court affirmed the decision to strike the exhibit, agreeing that the invoices were not properly authenticated and did not meet the business records exception to the hearsay rule. The court also affirmed the summary judgment, holding that the payment agreements, even if considered together with the invoices, did not form enforceable contracts under California law due to the absence of material terms. Consequently, Balboa’s claims for breach of contract and breach of guarantee failed as a matter of law. View "Balboa Capital v. Okoji Home Visits MHT, L.L.C." on Justia Law

Keiland Construction, L.L.C. entered into a construction subcontract with Weeks Marine, Inc. for a project in Louisiana. Weeks terminated the contract for convenience, leading to a dispute over compensation. Keiland submitted pay applications and demobilization costs, which Weeks partially paid. The disagreement centered on whether the contract required lump-sum payments for work completed before termination or if it converted to a cost-plus basis upon termination.The United States District Court for the Western District of Louisiana held a bench trial and found the contract ambiguous. It construed the ambiguity against Keiland, the drafter, and ruled in favor of Weeks. The court awarded Keiland damages based on Weeks’s interpretation of the contract but denied Keiland’s claims for direct employee and demobilization costs. The court also awarded Weeks attorneys’ fees and costs, though less than requested, and denied Weeks’s motion for post-offer-of-judgment fees and costs.The United States Court of Appeals for the Fifth Circuit reviewed the case. It affirmed the district court’s findings, agreeing that the contract was ambiguous and that the ambiguity should be construed against Keiland. The appellate court upheld the district court’s rulings on damages, attorneys’ fees, and costs, including the denial of post-offer-of-judgment fees and costs. The court also affirmed the award of prejudgment interest to Keiland, finding no abuse of discretion.In summary, the Fifth Circuit affirmed the district court’s judgment in all respects, including the interpretation of the contract, the award of damages, attorneys’ fees, costs, and prejudgment interest. View "Keiland Construction v. Weeks Marine" on Justia Law

The case involves a dispute between the law firm Abraham Watkins Nichols Agosto Aziz & Stogner and its former associate, Edward Festeryga. Abraham Watkins terminated Festeryga’s employment after discovering that he attempted to take clients and firm files to a new firm. Abraham Watkins sued Festeryga in Texas state court for conversion, breach of fiduciary duty, and tortious interference with contract. Festeryga moved to dismiss the suit under Texas’s anti-SLAPP statute, the Texas Citizens Participation Act (TCPA), which stayed the expedited discovery sought by Abraham Watkins. Despite agreeing to produce certain documents, Festeryga filed a notice of removal to federal court, claiming diversity jurisdiction as a Canadian citizen.The United States District Court for the Southern District of Texas remanded the case back to state court. The district court did not address whether Festeryga had shown diversity of citizenship but concluded that Festeryga waived his right to remove by participating in state court proceedings, specifically by filing a TCPA motion to dismiss. The district court found that this action demonstrated an intent to invoke the jurisdiction of the state court.The United States Court of Appeals for the Fifth Circuit reviewed the case to determine if it had appellate jurisdiction over the remand order. The court concluded that it did not have jurisdiction, citing its precedent in In re Weaver, which held that waiver-based remand orders are jurisdictional under 28 U.S.C. § 1447(c) and thus unappealable under § 1447(d). The court noted that although it disagreed with the reasoning in Weaver, it was bound by the rule of orderliness to follow the precedent. Consequently, the Fifth Circuit dismissed the appeal for lack of appellate jurisdiction. View "Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga" on Justia Law

Dr. Joseph Papin, a medical resident at the University of Mississippi Medical Center (UMMC), was terminated following a series of complaints about his workplace behavior, culminating in a serious incident involving patient care. Dr. Papin alleged that his troubles began in December 2016, but UMMC presented evidence of issues from the start of his residency. Dr. Papin entered into a "Remediation Agreement" with Dr. T. Mark Earl, the residency program director, which was supposed to give him sixty days to improve. However, UMMC terminated his employment before the remediation period ended, leading Dr. Papin to sue for breach of contract.The United States District Court for the Southern District of Mississippi held an eight-day trial, where a jury found that UMMC breached the Remediation Agreement, awarding Dr. Papin over $6.5 million in damages, including punitive damages. However, the trial court set aside the jury's verdict, granting UMMC's motion for judgment as a matter of law (JMOL). The court ruled that Dr. Earl did not have the authority to enter into a binding contract on behalf of UMMC, as required by Mississippi law for public institutions.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the Remediation Agreement was not a valid contract because Dr. Earl lacked the actual authority to bind UMMC. Mississippi law requires strict adherence to prescribed contracting procedures for public institutions, and only specific officials, such as the Vice Chancellor for Health Affairs or the Associate Dean for Graduate Medical Education, had the authority to enter into employment contracts. The court also found that the ACGME guidelines cited by Dr. Papin did not override Mississippi's legal requirements for public contracts. Thus, the appellate court upheld the JMOL in favor of UMMC. View "Papin v. University of Mississippi Medical Center" on Justia Law