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

The plaintiff resided at an apartment complex with his son, who was arrested for aggravated armed robbery by the local police department. After the arrest, the police informed the apartment management, which then evicted both the plaintiff and his son based on a lease provision prohibiting criminal conduct. The plaintiff sought information about his son’s arrest from the city and police department under the Texas Public Information Act, but his request was denied after the city consulted the Texas Attorney General and invoked a law-enforcement exception.In the United States District Court for the Southern District of Texas, the plaintiff filed suit against the city, the police department, the apartment complex, a debt collection agency, and the Texas Attorney General, alleging violations of the U.S. Constitution, the Fair Debt Collection Practices Act, and Texas law. All defendants either appeared, filed answers, or moved to dismiss. The plaintiff moved for default judgment against each defendant, but the district court denied those motions and granted the defendants’ motions to dismiss. On appeal, the plaintiff only challenged the denial of default judgment, as he did not brief arguments regarding the dismissals and thus forfeited them.The United States Court of Appeals for the Fifth Circuit reviewed only the denial of default judgment for abuse of discretion. The court held that default judgment was not warranted because the city, police department, and debt collector had all appeared or answered, and the Attorney General had not been properly served. The court also found that arguments regarding attorney conflict and judicial bias were either forfeited or unsupported. The Fifth Circuit affirmed the district court’s denial of default judgment. View "Clark v. City of Pasadena" on Justia Law

Legacy Housing Corporation purchased several hundred vacant lots in Horseshoe Bay, Texas, intending to develop manufactured housing. The lots were subject to zoning restrictions, including a cap on speculative housing permits, contractor requirements, utility hookup fees, and setback rules. Legacy also acquired adjacent land in the city’s extraterritorial jurisdiction (ETJ) to build a road connecting the lots to a nearby highway, but this land was restricted to agricultural and residential use. Despite these limitations, Legacy constructed a road over the ETJ property, a greenbelt strip, and some development lots, advertising it as a shortcut and access to planned amenities. The City and other defendants opposed the road, citing violations of existing restrictions. Legacy alleged a conspiracy among the City, the property owners’ association (POA), and developers to prevent its development.The United States District Court for the Western District of Texas addressed multiple claims and counterclaims. It denied Legacy’s motion to dismiss the City’s counterclaims, granted the City’s motion to dismiss most claims against it, and granted summary judgment to all defendants on the remaining claims, including regulatory takings, Section 1983 violations, civil conspiracy, breach of fiduciary duty, negligence, and a strips and gores claim. Legacy’s own motion for partial summary judgment was denied, and final judgment was entered.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s rulings, with one modification. The appellate court held that Legacy’s regulatory takings claim regarding the two-permit cap was not prudentially ripe and should be dismissed without prejudice. The court otherwise affirmed summary judgment for the defendants, finding no genuine dispute of material fact and concluding that Legacy did not have property rights to build the road, nor did the defendants breach any legal duties or restrictive covenants. View "Legacy Hsing v. City of Horseshoe Bay" on Justia Law

After a series of chemical explosions at an industrial plant in Crosby, Texas, following Hurricane Harvey, property owners and lessees in the affected area experienced contamination and property damage. These individuals, including the appellants, initially participated in a federal class action seeking both injunctive and monetary relief for the harm caused by the explosions. The federal district court certified a class for injunctive relief but declined to certify a class for monetary damages. Subsequently, a class settlement addressed only injunctive relief, leaving monetary claims unresolved.Following the settlement, nearly 800 class members, including the appellants, filed individual lawsuits in Texas state court seeking monetary damages for their property-related claims. The appellants acknowledged that their claims accrued in September 2017 and were subject to a two-year statute of limitations, but argued that the pendency of the federal class action tolled the limitations period under Texas law. Arkema, the defendant, removed the cases to the United States District Court for the Southern District of Texas and moved to dismiss, asserting that Texas does not recognize cross-jurisdictional tolling—meaning a federal class action does not toll the state statute of limitations. The district court consolidated the cases and dismissed the claims as untimely, relying on Fifth Circuit precedent.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the dismissal de novo. The court held that, under its binding precedent, Texas law does not permit cross-jurisdictional tolling of statutes of limitations based on the pendency of a federal class action. The court rejected the appellants’ arguments for exceptions to this rule and found no intervening Texas authority to the contrary. Accordingly, the Fifth Circuit affirmed the district court’s dismissal of the appellants’ claims as time-barred. View "Ackerman v. Arkema" on Justia Law

The plaintiffs in this case are homeowners and rental-property supervisors in New Orleans who challenged the City’s regulations governing short-term rentals (STRs), defined as lodging offered for less than thirty days. The City’s regulatory scheme requires permits for both owners and operators of STRs, restricts eligibility to “natural persons,” mandates that operators reside at the property, and imposes specific advertising requirements. The regulations were enacted in response to concerns about neighborhood disruption and loss of affordable housing attributed to the proliferation of STRs. Plaintiffs argued that these regulations violated various constitutional provisions, including the Due Process and Equal Protection Clauses, the First Amendment, and the dormant Commerce Clause.The United States District Court for the Eastern District of Louisiana granted summary judgment largely in favor of the City, upholding the constitutionality of most aspects of the STR regulations. The district court found that the City had authority under state law to regulate STRs and rejected the plaintiffs’ due process and equal protection claims, except for one provision not at issue on appeal. The court also upheld the advertising restrictions and the operator residency requirement, interpreting the latter as not requiring permanent residency.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed in part, reversed in part, and remanded. The Fifth Circuit held that the City’s prohibition on business entities obtaining owner or operator permits violated the Equal Protection Clause, as the distinction was arbitrary and not rationally related to a legitimate government interest. The court also found that the requirement that each STR advertisement list only one dwelling unit violated the First Amendment. However, the court upheld the City’s authority to regulate STRs, the due process analysis, most advertising restrictions, and interpreted the operator residency requirement as not violating the dormant Commerce Clause. View "Hignell-Stark v. City of New Orleans" 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

A dispute arose over the ownership of real property located at 829 Yale Street in Houston, Texas. In 2019, Nicholas Fugedi, acting as trustee for the Carb Pura Vida Trust, initiated a quiet title action against several defendants. The central issue became whether the trust, and specifically Fugedi’s appointment as trustee, was used as a device to create diversity jurisdiction in federal court, given that Fugedi was a citizen of Michigan while the underlying parties were Texas residents.Initially, the United States District Court for the Southern District of Texas ruled against Fugedi, finding the deed void under Texas law. On appeal, the United States Court of Appeals for the Fifth Circuit reversed that decision but noted that the district court could consider new evidence on remand regarding whether the trust was a sham created to manufacture diversity jurisdiction. On remand, the district court found that Fugedi had been appointed as a sham trustee solely to create diversity jurisdiction, and dismissed the case for lack of subject matter jurisdiction under 28 U.S.C. § 1359.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s dismissal de novo, and its factual findings for clear error. The Fifth Circuit held that 28 U.S.C. § 1359 applies to trusts and that a trust can be used as a device to improperly manufacture diversity jurisdiction. The court found no clear error in the district court’s factual findings that Fugedi was appointed as a sham trustee for the purpose of creating federal jurisdiction. Accordingly, the Fifth Circuit affirmed the district court’s dismissal for lack of subject matter jurisdiction. View "Fugedi v. Initram" on Justia Law

After Hurricane Harvey caused significant flooding at the Arbor Court apartment complex in Houston in 2017, the property’s owner, DM Arbor Court, Limited (DMAC), sought permits from the City of Houston to repair the damage. The City denied these permits, invoking a provision of its flood control ordinance that had not previously been used for such denials. The City determined that a majority of the complex’s buildings had sustained “substantial damage,” requiring costly elevation before repairs could proceed. As a result, DMAC was unable to repair or redevelop the property, which led to the loss of tenants and the property sitting idle.DMAC filed suit in the United States District Court for the Southern District of Texas, alleging that the City’s denial of repair permits constituted an unconstitutional taking under the Fifth Amendment. The district court dismissed the case as unripe, but the United States Court of Appeals for the Fifth Circuit reversed, finding the case ripe once the City’s Director of Public Works formally denied the permit application. On remand, after a bench trial, the district court rejected DMAC’s takings claim, concluding that the property retained some economic value and that DMAC was not deprived of all economically beneficial use. The court also found that the City’s actions were justified under the Penn Central framework, emphasizing the public interest in flood management.On appeal, the United States Court of Appeals for the Fifth Circuit held that the City’s denial of the repair permit deprived DMAC of all economically viable use of Arbor Court, constituting a categorical taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The Fifth Circuit reversed the district court’s judgment and remanded the case for further proceedings, holding that the City’s regulatory action amounted to a per se taking requiring just compensation. View "DM Arbor Court v. City of Houston" on Justia Law

Mary Bennett owns a farm on the U.S.–Mexico border. In 2008, the United States built a segment of the border wall on a portion of her property where it had an easement. In 2020, the government initiated a condemnation action to take that portion of the land and surrounding areas to further build the wall and make related improvements. Bennett argued that the government exceeded the scope of its easement when it built the wall, claiming ownership of the wall and seeking just compensation for its value. She attempted to present expert testimony on the wall's value, which the district court excluded.The United States District Court for the Southern District of Texas excluded Bennett's expert testimony, concluding that she was not entitled to just compensation for the wall's value. The court interpreted the common-law rule from Searl v. School-Dist. No. 2, which states that fixtures built by a trespasser become part of the estate, to include an exception for trespassers with an objective, good-faith belief in their right to build. The court found that the government had such a belief and thus precluded Bennett from recovering the wall's value. Bennett appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the government acted under its power of eminent domain, which cannot be limited by state trespass laws. The court affirmed that Bennett is entitled to compensation for the land taken but not for the value of the wall, as the government built it at its own expense for a public purpose. The court affirmed the district court's exclusion of the expert testimony and remanded the case for further proceedings consistent with this opinion. View "United States v. Bennett" on Justia Law

The Vinales family leased a home at Randolph Air Force Base, managed by AETC II Privatized Housing, LLC, and other associated entities. They experienced issues with the home's condition, including mold and asbestos, which they claimed led to health problems and property damage. They sued the housing providers for breach of contract, fraud, and other claims, seeking damages and attorneys' fees.The United States District Court for the Western District of Texas granted summary judgment for the defendants on most claims, citing the federal enclave doctrine, which limits applicable law to federal law and pre-cession state law. The court dismissed the fraud claim for lack of evidence and denied the plaintiffs' motion for attorneys' fees. The breach of contract claim proceeded to trial, where the jury awarded the plaintiffs over $90,000 in damages. The magistrate judge denied the plaintiffs' motion for attorneys' fees and the defendants' motion for judgment as a matter of law.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the application of the federal enclave doctrine, which barred most of the plaintiffs' claims. It upheld the dismissal of the fraud claim, agreeing that the plaintiffs failed to identify actionable fraudulent statements. The court also affirmed the denial of attorneys' fees, finding no legal basis for the award. The exclusion of certain evidence at trial was deemed not to be an abuse of discretion. The court found sufficient evidence to support the jury's damages awards for personal property and diminution in rental value. Finally, the court held that the jury instructions were proper and did not create substantial doubt about the jury's guidance. The judgment of the magistrate judge was affirmed. View "Vinales v. AETC II Privatized Housing, LLC" on Justia Law

A real estate developer, HK Baugh Ranch, LLC, petitioned the Texas Public Utility Commission (PUC) to release its undeveloped land, River Bend Ranch, from the certificate of convenience and necessity (CCN) issued to Crystal Clear Special Utility District (Crystal Clear). Crystal Clear, a federally indebted utility district, sued the PUC’s Chair and Commissioners in federal court, alleging that Texas Water Code § 13.2541, which allows for decertification, was preempted by 7 U.S.C. § 1926(b). This federal statute protects certain federally indebted utilities from curtailment of their service areas while their loans are outstanding.The United States District Court for the Western District of Texas issued a preliminary injunction preventing the PUC from decertifying River Bend Ranch. The district court applied the “physical ability” test from Green Valley Special Utility District v. City of Schertz, determining that Crystal Clear likely made its service available to HK Baugh and was thus entitled to the protections of § 1926(b). The court concluded that § 1926(b) likely expressly preempts Texas Water Code § 13.2541, resolving the remaining preliminary injunction factors in favor of Crystal Clear.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court did not err in concluding that Crystal Clear would likely satisfy the “physical ability” test. However, the appellate court found that the district court erred in holding that § 1926(b) expressly preempts Texas Water Code § 13.2541. The appellate court remanded the case to the district court to determine whether § 1926(b) otherwise preempts Texas Water Code § 13.2541 and to address all preliminary injunction factors as necessary. The preliminary injunction remains in place pending further proceedings. View "Crystal Clear v. HK Baugh Ranch" on Justia Law