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

In a bankruptcy adversary proceeding, Capco brought claims of fraud and various business torts against Ryder, Tana, TRT, and Tristone. The claims arose out of a transaction in which Capco purchased from Tana certain oil and gas reserves located in the Gulf of Mexico (the Properties). The bankruptcy court granted summary judgment in favor of Ryder, Tana, TRT, and Tristone and dismissed the claims. The court held that Capco failed to present evidence to demonstrate a genuine issue of material fact about whether Ryder was contracted to provide an independent reevaluation of the Properties and advice at the meeting regarding Capco's decision to close on the Properties. The court also held that because the purchase and sale agreement contained a clear intent to disclaim reliance, the lower courts correctly held that Capco was unable to claim fraudulent inducement based on the prior representations of Tana, TRT, and Tristone. Accordingly, the judgment was affirmed.

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 out of an oil spill on the Neches River. Appellants challenged the National Pollution Funds Center's (NPFC) final claim determination denying reimbursement for costs arising from the spill. The district court rejected appellants' challenge to the agency determination. The court concluded that the NPFC's interpretation of 33 U.S.C. 2703 was entitled to deference and that appellants have not demonstrated that the NPFC's denial of the third-party affirmative defense claim should be overturned under the standard set forth in the Administrative Procedure Act, 5 U.S.C. 500 et seq.

Petitioners petitioned for review of Order 720, which adopted the Posting Rule, and 720-A of the Federal Energy Regulation Commission (FERC). Petitioners contended that the Posting Rule exceeded the authority granted to FERC by the Natural Gas Act of 1938 (NGA), 15 U.S.C. 717, in violation of section 10(e) of the Administrative Procedures Act (APA), 5 U.S.C. 706(2)(C), which prohibited any agency action "in excess of statutory jurisdiction, authority, or limitations." The court held that all attempts by FERC to show that section 1(b) did not limit the scope of section 23 of the NGA were unavailing and the NGA unambiguously precluded FERC from issuing the Posting Rule so as to require wholly intrastate pipelines to disclose and disseminate capacity and scheduling information. Therefore, under Chevron step one analysis, FERC had no statutory authority to promulgate Order 720 and 720-A and thus, violated section 10(e) of the APA. Accordingly, the petitions for review were granted and the orders vacated.

Jefferson Block submitted a claim under the London OPA Insurance Policy for Offshore Facilities (OPA Policy) for indemnification of the removal costs it incurred in responding to a pipeline leak. Underwriters denied the claim and Jefferson filed suit against Underwriters in district court, alleging that Underwriters wrongfully refused to indemnify it for oil pollution removal costs. The court held that the district court erred when it refused to apply the contra-insurer rule where the OPA Policy was ambiguous with respect to the issue of coverage for Jefferson Block's 16-inch pipeline and extrinsic evidence in the record did not conclusively resolve this ambiguity. Therefore, the court held that, since Jefferson Block offered a reasonable interpretation of the policy and did not completely draft the ambiguous provisions of the OPA Policy, the contra-insurer rule should apply and the ambiguity should be resolved in favor of the insured, Jefferson Block.

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.

This bankruptcy appeal involved parties that have a business history extending from at least April 27, 2005 where appellee and the Secretary of Lothian Oil signed two agreements which would lead to proofs of claim 164 and 171. At issue was whether the bankruptcy court could recharacterize a claim as equity rather than debt. The court held that because Texas law would not have recognized appellee's claims as asserting a debt interest, the bankruptcy court correctly disallowed them as debt and recharacterized the claims as equity interests. Moreover, because insiders and non-insiders alike could mischaracterize their claims in contravention of state law, the court declined to limit recharacterization to insider claims. The court further held that the other assertions of error were without merit.

This case arose from an oil spill in the Mississippi River when an ocean-going tanker struck a barge that was being towed. Appellants (Excess Insurers) appealed the district court's decision requiring them to pay prejudgment interest on the funds deposited into the court's registry in an interpleader action. The Excess Insurers argued that the district court erred by: (1) finding that coverage under the excess policy was triggered by the primary insurer's filing of an interpleader complaint; (2) holding that a marine insurer that filed an interpleader action and deposited the policy limits with the court was obligated to pay legal interest in excess of the policy limits; and (3) applying the incorrect interest rate and awarding interest from the incorrect date. The court held that because the Excess Insurers' liability had not been triggered at the time the Excess Insurers filed their interpleader complaint, the district court erred in finding that they unreasonably delayed in depositing the policy limit into the court's registry and holding them liable for prejudgment interest. Therefore, the court reversed the judgment and did not reach the remaining issues.

Appellants, owners of interstate natural gas pipelines subject to a 25% ad valorem tax under Louisiana Constitution article 7, section 18, brought and won a state court suit alleging certain intrastate pipelines were unconstitutionally given more favorable tax treatment by being taxed only 15% from 1994-2003. At issue was whether the state court's revaluation process violated the Due Process, Equal Protection, and Commerce Clauses, via 42 U.S.C. 1983, where that court ordered appellants' tax liability to be recalculated under the same fair-market-value determination process to which the intrastate pipelines were subjected. The court held that the district court properly dismissed appellants' suit because their federal claims were barred by the Tax Injunction Act, 28 U.S.C. 1341, which deprived the federal courts of jurisdiction over suits that sought to interfere with the administration of state tax systems so long as the state provided an adequate procedural vehicle for raising the claims and where appellants have raised their claims in state court and the Louisiana courts did not cease to provide a plain, speedy, or efficient remedy for appellants' injuries. Accordingly, the district court properly granted defendants' motion to dismiss.