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

The Fifth Circuit denied a petition for rehearing en banc and substituted the following opinion.The court certified a question to the Supreme Court of Texas: Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under section 50 of the Texas Constitution? Because the Supreme Court of Texas answered in the affirmative, the court reversed the district court's judgment to the contrary and remanded for further proceedings. View "Zepeda v. Federal Home Loan Mortgage Corp." on Justia Law

The Sabine River meanders between Texas and Louisiana. Two state agencies jointly regulate its waterways and operate a hydroelectric plant--the Toledo Bend Reservoir and Toledo Bend Dam. In March 2016, heavy rains led to heavy water inflow into the reservoir and flooding of the River. The plaintiffs, about 300 Texas and Louisiana property owners, alleged that the flooding of their property was caused or exacerbated by the reservoir’s water level becoming too high and the spillway gates at the reservoir being intentionally opened. The defendants removed the case to federal court, which remanded back to Texas state court. The cases were removed again. The Texas federal district court denied a motion to remand but later dismissed all claims against private power companies and remanded the claims against the state authorities to state court.The Fifth Circuit affirmed. Federal jurisdiction obtained at the time of removal because the suit then qualified as a “mass action” under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(11)(A); an exception for a local single event does not apply. CAFA mass actions “may be removed by any defendant without the consent of all defendants.” The court upheld the dismissals of the power companies based on findings that the plaintiffs did not adequately allege any violations of the FERC license; that under Texas law, only state authorities may be found liable for floodwater damage; and that the plaintiffs failed to show that the operation of the generators was a proximate cause of plaintiffs’ losses. View "Bonin v. Sabine River Authority of Louisiana" on Justia Law

Plaintiffs filed suit under 42 U.S.C. 1983 alleging that BVGCD violated Plaintiff Fazzino's equal protection right and has taken his property without compensation, and that BVGCD violated Plaintiff Stratta's First Amendment right to free speech. The district court dismissed plaintiffs' claims on the grounds of Eleventh Amendment immunity, ripeness, Burford abstention, and qualified immunity. The Fifth Circuit held that the district court erroneously concluded that BVGCD is an arm of the State of Texas and therefore immune from suit in federal court under the Eleventh Amendment. In this case, five of the six Clark factors weigh against finding BVGCD is an arm of the state of Texas where, most importantly, funds from the Texas treasury will not be used to satisfy a judgment against the entity. Furthermore, the Directors are likewise not entitled to assert such immunity.The court also held that Fazzino's takings claim is ripe for adjudication because Fazzino fully pursued the administrative remedies available to him before filing this action, and the district court abused its discretion in deciding to abstain under Burford. Finally, the court held that neither BVGCD nor its Board was required to respond on the merits, and thus the substance of these allegations must be tested in discovery and further proceedings. The court reversed the district court's Rule 12(b)(6) dismissal as to all defendants and remanded. However, the court affirmed the district court's judgment dismissing Stratta's First Amendment claims. View "Stratta v. Harris" on Justia Law

In a prior dispute between plaintiff and her lender, Feddie Mac, the Fifth Circuit certified to the Supreme Court of Texas the following question: "Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under section 50 of the Texas Constitution?" The Texas Supreme Court answered in the affirmative. In light of the Texas Supreme Court's answer, the court reversed the district court's holding to the contrary and remanded for further proceedings. View "Zepeda v. Federal Home Loan Mortgage Corp." on Justia Law

Defendants own the surface of land sitting atop the property leased by Petro Harvestor. When the lease expired, Petro Harvestor sought a declaratory judgment that it could continue to operate its oil and gas activities on the property. Defendants claimed that the Surface Lease required Petro Harvester to return the surface land to its pre-lease condition upon expiration, requiring that Petro Harvester remove its machinery and vacate the property.The Fifth Circuit affirmed the district court's grant of summary judgment for Petro Harvestor, holding that the district court correctly held that the Surface Lease here does not supersede the Mineral Lease; the district court properly rejected defendants' affirmative defenses of waiver, ratification, and estoppel; Mississippi's statute of limitations does not bar Petro Harvester's declaratory judgment action; and defendants waived any argument that there are genuine issues of material fact that preclude summary judgment. View "Petro Harvester Operating Co. v. Keith" on Justia Law

Plaintiff requested that the court set aside a foreclosure sale of his residence because his lender mailed him a preforeclosure notice with the wrong deadline for curing default. In this case, the letter contained a deadline thirty days from the day the notice was printed, even though the deed of trust called for a deadline thirty days from the day the letter was mailed.The Fifth Circuit held that the district court correctly applied Texas precedents and denied plaintiff relief, because the lender's "minor" non-compliance with the terms of the deed of trust did not justify unwinding the foreclosure sale. The court held that the error in the foreclosure notice did not clearly harm or prejudice plaintiff, where he does not dispute that, even if the notice had stated the correct deadline, he would not have had the funds to pay the past-due balance on his account. View "Casalicchio v. BOKF, N.A." on Justia Law

The Fifth Circuit affirmed the district court's final order of garnishment under the Mandatory Victims Restitution Act. Defendant pleaded guilty and was convicted of wire fraud, mail fraud, and falsifying a tax return, all in connection with the ongoing theft of funds from her employers. Defendant was then ordered to pay restitution of more than $2 million. In order to enforce the judgment, five investment retirement accounts (IRAs), held under defendant and her husband's names, were garnished. After defendant agreed to release the funds, the government reapplied to garnish two accounts in the husband's name and the district court granted the writ.The court first rejected defendant's claim under federal law that any non-defendant spouse's IRA an be part of a defendant spouse's property or rights to property under 18 U.S.C. 3613. The court has previously held that notwithstanding its anti-alienation provision, 29 U.S.C. 1056(d)(1), Employee Retirement Income Security Act retirement accounts are subject to MVRA restitution awards. Furthermore, under United States v. Loftis, 607 F.3d 173 (5th Cir. 2010), the court held that defendant's one-half interest in her husband's solely managed IRA is part of all property and rights to property of the spouse fined under section 3613.Under Texas law, the court held that the husband's IRAs are solely managed community property, and that a wife has only a one-half interest in her husband's solely managed community property. Finally, the court held that the Consumer Credit Protection Act was inapplicable in this case. Therefore, the court held that half the funds—around $1 million—may be garnished now. View "United States v. Berry" on Justia Law

Plaintiffs brought a putative class action under the Servicemembers Civil Relief Act (SCRA), alleging that they and similarly situated individuals were on active duty with the military when defendants variously foreclosed on their properties through executory proceedings in Louisiana state courts based on mortgage, privilege, or security agreements each plaintiff and putative class member had entered with one of the defendants.The Fifth Circuit affirmed the district court's grant of defendants' motions to dismiss and Trustmark National Bank's motion for judgment on the pleadings. The court held that 50 U.S.C. 3931 does not encompass Louisiana executory proceedings where, as here, the debtors confessed judgment. The court explained that the SCRA's waiver requirements were thus inapplicable because there was nothing to waive where plaintiffs were never protected under section 3931. Therefore, the court rejected plaintiffs' argument that the state court orders authorizing seizure and sale of their respective properties constitute default judgments under the SCRA. View "Fodge v. Trustmark National Bank" on Justia Law

The Fifth Circuit denied a petition for panel rehearing and withdrew its prior opinion, substituting the following opinion.At issue was whether a claimant in a civil forfeiture proceeding may counterclaim for constitutional tort damages against the United States. The district court adopted the First Circuit's reasoning and held that a claimant may never file counterclaims of any kind.The court affirmed the district court's judgment, dismissing the counterclaims for a different reason. The court found the First Circuit's reasoning unpersuasive and declined to adopt it. Rather, the court held that the United States has not waived sovereign immunity for claims seeking damages based on alleged Fourth and Fifth Amendment violations arising from the property seizure. View "United States v. $4,480,466.16 in Funds Seized from Bank of America Account Ending in 2653" on Justia Law

After a state court jury found that Mississippi state officials violated the Takings Clause by exceeding the scope of a state easement on private property, the jury granted a monetary award considerably lower than the amount of "just compensation" sought by the property owner.The Fifth Circuit affirmed the district court's grant of the State's motion to dismiss, on sovereign immunity grounds, plaintiff's federal case. While this case was pending on appeal, the Supreme Court decided Knick v. Township of Scott, 139 S. Ct. 2162 (2019), which overturned prior sovereign immunity law in cases arising under the Takings Clause. The court held that, to the extent that Knick has any effect on suits against state governments, the Court simply put takings claims against state governments on equal footing with claims against the federal government. Furthermore, nobody disputes that takings claims against the federal government require the waiver of sovereign immunity contained in the Tucker Act. Therefore, the court held that the takings claim against the Utah Department of Corrections must be dismissed based on Eleventh Amendment immunity. View "Bay Point Properties, Inc. v. MS Transportation Commission" on Justia Law