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

A major data breach compromised sensitive consumer information on thousands of credit cards. In this appeal, we address who must pay for the cleanup. Beginning in 2014, hackers compromised credit card data at multiple businesses owned by Landry’s Inc. (“Landry’s”). Many of those cards belonged to Visa and Mastercard. In response, Visa and Mastercard imposed over twenty million dollars in assessments on JPMorgan Chase and its subsidiary Paymentech (collectively, “Chase”), who were responsible for securely processing card purchases at Landry’s properties. Chase then sued Landry’s for indemnification, and Landry’s impleaded Visa and Mastercard. The district court dismissed Landry’s third-party complaints against Visa and Mastercard and granted summary judgment for Chase, finding that Landry’s had a contractual obligation to indemnify Chase. Landry’s argued that it should not have to indemnify Chase because the assessments are not an enforceable form of liquidated damages.   The Fifth Circuit affirmed. The court explained that since Landry’s indemnification obligation stems from its own acts or omissions under the Merchant Agreement, the debt is its own. Further, the court wrote that Landry’s alleged for its deceptive business practices claims that the assessments were “invalid” under the Payment Brand Rules and “applicable law” and, therefore, the Payment Brands’ “imposition and collection of the [assessments] was an unlawful business practice.” Because these claims turn on the assessments’ enforceability under Chase’s contracts with the Payment Brands, they are functionally the same as the subrogated claims. Since Landry’s cannot challenge the Payment Brands over those contracts as Chase’s subrogee, it cannot do so through a change in labeling. View "Paymentech v. Landry's" on Justia Law

In this dispute over terms of an online auction, the Fifth Circuit concluded that the district court abused its discretion by improperly admitting evidence and taking judicial notice of the terms. The court explained that Exhibit 41, an internet printout, was not properly authenticated, and the district court abused its discretion by determining that the exhibit was fit under Federal Rule of Evidence 803. Furthermore, the district court erred in taking judicial notice of the terms because a private internet archive falls short of being a source whose accuracy cannot reasonably be questioned as required by Rule 201. Because the district court's errors were not harmless, the court reversed and remanded for further proceedings. View "Weinhoffer v. Davie Shoring, Inc." on Justia Law

Domain Protection seeks the return of property for its conversion claim and statutory damages and attorney's fees on its Stored Communications Act claim. In its cross-appeal, Sea Wasp argues that Domain Protection lacked Article III standing and that the district court erred in ruling that Sea Wasp violated federal and state law. Sea Wasp also seeks attorney's fees for ultimately prevailing on the Texas Theft Liability Act claim. Attorney Schepps challenges the district court's sanctions.The Fifth Circuit concluded that there is no jurisdictional problem with this lawsuit because it is enough for Article III's injury-in-fact requirement that Domain Protection contended when filing suit that it did not possess domain names it owned. The court also concluded that the district court did not err as to the conversion claim where Domain Protection did not identify any property Sea Wasp has not returned; because Domain Protection did not prove actual damages, it is not entitled to statutory damages under the Stored Communications Act; Domain Protection's claims seeking to recover damages or attorney's fees are without merit; and because both sides prevailed in some aspects of this suit, the district court did not err in refusing to award fees. Finally, in regard to Schepps' challenges to the sanctions, the court remanded to allow the parties an opportunity to brief the issue of Schepps' failure to disclose his relationship with Domain Protection. Accordingly, the court affirmed except for the sanctions, vacating the sanctions and remanding for further proceedings. View "Domain Protection, LLC v. Sea Wasp, LLC" 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

Spectrum filed suit against Lifetime and Jay Tuttle for trademark violations under the Lanham Act over a domain name. After Spectrum was awarded statutory damages, the district court declined to award attorneys' fees to Spectrum.The Fifth Circuit affirmed the district court's admission of certain deposition testimony at trial and agreed with the Fourth Circuit that the plain text of Federal Rule of Civil Procedure 32(a)(4)(B) is clear that "the place of trial" is the courthouse where trial takes place. In this case, the Lifetime Defendants were not prejudiced by the transfer of trial venue from San Antonio to Waco, and the court rejected the Lifetime Defendants' contention that the witness was not an unavailable trial witness. The court affirmed the district court's statutory damages award, concluding that the district court did not abuse its broad discretion, under 15 U.S.C. 1117(d), in awarding $100,000 for the Infringing Domain. However, the court reversed the district court's finding that Spectrum was not entitled to attorneys' fees in this exceptional case where the record confirms that the Lifetime Defendants engaged in willful, bad-faith infringement of Spectrum's trademarks, justifying an award of maximum statutory damages. The court remanded for a determination of reasonable attorneys' fees. View "Spectrum Association Management of Texas, LLC v. Lifetime HOA Management LLC" on Justia Law

Internet services and social media providers may not be held secondarily liable under the Anti-Terrorism Act (ATA) for aiding and abetting a foreign terrorist organization—here, Hamas—based only on acts committed by a sole individual entirely within the United States.In July 2016, plaintiff and thirteen other police officers were shot and either injured or killed during a tragic mass-shooting committed by Micah Johnson in Dallas, Texas. Plaintiff and his husband filed suit against Twitter, Google, and Facebook, alleging that defendants are liable because they provided material support to Hamas, a foreign terrorist organization that used Internet services and social media platforms to radicalize Johnson to carry out the Dallas shooting.The Fifth Circuit held, based on plaintiffs' allegations, that the Dallas shooting was committed solely by Johnson, not by Hamas's use of defendants' Internet services and social media platforms to radicalize Johnson. Therefore, it was not an act of international terrorism committed, planned, or authorized by a foreign terrorist organization. The court also held that defendants did not knowingly and substantially assist Hamas in the Dallas shooting, again because the shooting was committed by Johnson alone and not by Hamas either alone or in conjunction with Johnson. Therefore, the district court was correct in concluding that defendants are not secondarily liable under the ATA. The court affirmed the district court's judgment. View "Retana v. Twitter, Inc." on Justia Law

18 U.S.C. 1030(a)(5)(A) prohibits intentionally damaging a computer system when there was no permission to engage in that particular act of damage. The Fifth Circuit affirmed defendant's conviction of knowingly causing the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causing damage without authorization, to a protected computer, in violation of section 1030(a)(5)(A). In this case, defendant was the Information Technology Operations Manager for ClickMotive, a software webpage hosting company. Upset that a coworker had been terminated, defendant sabotaged the company's electronic system by deleting files, disabling backup operations, diverting emails, and preventing remote access to the company's network. The court held that defendant lacked permission to inflict the damage he caused and sufficient evidence supported defendant's conviction. Finally, the court held that the statute was not unconstitutionally vague. View "United States v. Thomas" on Justia Law

Plaintiffs, BWP Media and National Photo Group, filed suit against T&S, an internet service provider, for direct and secondary infringement. Plaintiffs alleged that T&S hosted an internet forum on which third-party users posted images that infringed copyrights owned by plaintiffs. The district court granted summary judgment for T&S. The court adopted the volitional-conduct requirement in direct-copyright infringement cases, and found that BWP did not contend that T&S did, in fact, engage in such conduct. In this case, the court explained that T&S hosts the forum on which infringing content was posted, but its connection to the infringement ends there. Rather, the users posted the infringing content. Accordingly, the court affirmed the judgment. View "BWP Media USA, Inc. v. T & S Software Associates, Inc." on Justia Law

Mississippi's Attorney General, James M. Hood III, appealed the district court's grant of a preliminary injunction prohibiting Hood from enforcing an administrative subpoena or bringing any civil or criminal action against Google "for making accessible third-party content to internet users." The court concluded that the district court erred in granting injunctive relief because neither the issuance of the non-self-executing administrative subpoena nor the possibility of some future enforcement action created an imminent threat of irreparable injury ripe for adjudication. The court noted that it expressed no opinion on the reasonableness of the subpoena or on whether the conduct discussed in the parties’ briefs could be held actionable consistent with federal law. Accordingly, the court vacated and remanded. View "Google, Inc. v. Hood" on Justia Law

BCN filed suit against Catalina and three of its individual officers or employees, alleging deceptive trade practices, trademark violations, and related fraud and tort claims. BCN's claims stemmed from defendants' creation of CouponNetwork.com, a website and business "remarkably similar" to BCN's existing business, BrandCouponNetwork.com. The court vacated the district court's judgment to the extent that it dismissed BCN's claims under Rule 12(b)(6) as time barred because the district court erred in considering evidence outside the pleadings and a genuine issue of material fact appeared to exist regarding the timeliness of BCN's claims which would preclude summary judgment. The court affirmed the district court's dismissal of the individual defendants where BCN failed to preserve its claims where BCN did not present it to the district court and BCN's claims were conclusional. The court remanded for further proceedings. View "Brand Coupon Network, L.L.C. v. Catalina Marketing Corp., et al." on Justia Law