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

After the United States seized millions of dollars from a Texas vocational school, the school intervened as a claimant, denied the government’s allegations, and counterclaimed for constitutional tort damages against the government for ruining its business. The Fifth Circuit declined to address the correctness of the categorical rule barring all counterclaims in civil forfeiture proceedings, and held that the school's specific counterclaims were barred by sovereign immunity. Accordingly, the court held that the district court lacked subject matter jurisdiction and vacated the district court's dismissal, remanding with instructions to dismiss the counterclaims for lack of subject matter jurisdiction instead. View "United States v. $4,480,466.16 in Funds Seized from Bank of America account ending in 2653" on Justia Law

The Fifth Circuit certified the following question of law 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?The court also held that a secondary lender is not entitled to contractual subrogation without a valid contract. In this case, without a signature, Freddie Mac has no ability to enforce the contract itself or its subrogation provision. Therefore, the court affirmed the district court's denial of Freddie Mac's contractual subrogation claim. View "Zepeda v. Federal Home Loan Mortgage Corp." on Justia Law

After a bankruptcy sale extinguished an easement of the Port, the Port filed an adversary proceeding against debtors, seeking to invalidate the sale and regain its easement. The district court affirmed the bankruptcy court's rejection of the Port's sovereign immunity and fraud claims.The Fifth Circuit affirmed the district court's judgment, finding no Eleventh Amendment violation or basis for a claim of fraud. In this case, the bankruptcy court approved a section 363(f) of the Bankruptcy Code sale "free and clear" of encumbrances, including the Port's easement; the bankruptcy court did not award affirmative relief nor deploy coercive judicial process against the Port and did not exercise in personam jurisdiction over the state; and any section 363(f) objection had to have been raised on direct appeal of the confirmation order and could not be raised in this collateral adversary proceeding. Furthermore, the Port failed to allege any false representation, and the district court did not abuse its discretion in denying the Port leave to amend. View "Port of Corpus Christi Authority v. Sherwin Alumina Co." on Justia Law

Appellants, pro se, asserted interests in a convicted criminal defendant's property that was subject to criminal forfeiture and criminal restitution. The district court denied their motions for ancillary hearings and return of property.The Fifth Circuit applied the standard of review under Federal Rule of Civil Procedure 12 to the pleading-stage dismissal of a petition for an ancillary proceeding; held that appellants' appeals were timely because the deadline for a civil notice of appeal applied; held that Appellant Huma's petition for ancillary hearing did not state a claim under 21 U.S.C. 853(n), where she has not demonstrated the existence of the necessary written security agreement to establish her as a secured creditor with a lien on the cash or devices, and she cannot demonstrate that she is a bona fide purchaser for value of that property; and held that Appellant Salahuddin presented no persuasive allegation that he has a priority claim to the cash senior to the restitution lien of the United States, but has adequately alleged a secured interest in the devices at issue. Therefore, the court vacated in part, remanded in part, and otherwise affirmed the judgment. View "United States v. Butt" on Justia Law

Plaintiff filed suit under 42 U.S.C. 1983 against the Board and its president, alleging that defendants unlawfully deprived him of the use of several of his properties. After a jury returned a verdict for plaintiff, the district court denied the Board's motion for judgment as a matter of law or a new trial.The Fifth Circuit affirmed and held that there was legally sufficient evidence for a reasonable jury to conclude that the Board ratified the unlawful initiation of condemnation proceedings. The court rejected the Board's challenges to the jury instructions and held that, even if the instructions were erroneous, they could not have affected the outcome of the case. View "Young v. Board of Supervisors of Humphreys County" on Justia Law

The Fifth Circuit reversed the district court's dismissal of Cherry Knoll's complaint against the City of Lakeway, the city manager, and HDR Engineering in a dispute over a plat of land that Cherry Knoll had purchased in Lakeway. Cherry Knoll asserted a claim against the City under 42 U.S.C. 1983 for violating its rights to procedural due process, substantive due process, and equal protection by filing the Subdivision Plats without its consent and over its objection. The court held that these allegations satisfied the standard for official municipal policy under Pembaur v. City of Cincinnati and the district court erred in finding otherwise.The court also held that the district court erred in determining that the city manager was entitled to the protection of qualified immunity at the Rule 12(b)(6) stage. Finally, the court held that Cherry Knoll's well-pleaded factual allegations and supporting documents make plausible its claim that HDR was a "willful participant in joint action" for purposes of section 1983. Accordingly, the court remanded the matter and reinstated Cherry Knoll's state law claims. View "Cherry Knoll, LLC v. Jones" on Justia Law

The Fifth Circuit affirmed the district court's dismissal with prejudice of Fair Housing Act claims asserted against the owners and management company of apartment complexes in the greater Dallas area that declined to participate in the federal Section 8 Housing Choice Voucher Program. The court held that the Supreme Court's language in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015), was stricter than the regulation itself and thus applied the stricter version of the burden-shifting analysis.The court held that the district court did not err in determining that the allegations of ICP's complaint regarding defendants' "no vouchers" policies failed to allege facts sufficient to provide the robust causation necessary for an actionable disparate impact claim. The court also held that the vague and conclusory allegations of disparate treatment that ICP asserted collectively against defendants were legally insufficient to support a reasonable inference of intentional race discrimination; the district court did not err by dismissing the disparate treatment liability claim against Lincoln; and the district court did not err by dismissing the advertising liability claim against Lincoln. View "Inclusive Communities Project, Inc. v. Lincoln Property Co." on Justia Law

Plaintiff appealed the district court's grant of summary judgment in favor of defendants in an action alleging claims under the Real Estate Settlement Procedure Act (RESPA); the Texas Debt Collection Act (TDCJ); promissory estoppel; and the Declaratory Judgment Act. The Fifth Circuit held that plaintiff failed to raise a genuine issue of material fact regarding defendants' compliance with 12 C.F.R. 1024.41 and properly dismissed his RESPA claims. The court also held that the district court did not err in dismissing plaintiff's TDCA claims and, because plaintiff's remaining claims were based on the underlying RESPA and TDCA claims, they were moot. Accordingly, the court affirmed the dismissal of plaintiff's action with prejudice. View "Germain v. US Bank National Association" on Justia Law

Jatera filed suit against the Bank and SPS in state court, seeking a judgment declaring the lien on the property at issue void because defendants failed to initiate foreclosure proceedings within the four-year statute of limitations. After removal to federal district court, the district court held that the homeowner lacked standing as a plaintiff because she no longer retained an interest in the property. The district court also concluded that detrimental reliance runs to the benefit of the party asserting it, and Jatera had failed to show it detrimentally relied on the acceleration notice.The Fifth Circuit affirmed the district court's denial of Jatera's motion for summary judgment and granted defendants' summary judgment motion. The court held that detrimental reliance was not an exception to the lender's right to unilaterally withdraw an acceleration notice under Texas law. Therefore, in this case, the court need not determine whether there was such reliance, including whether Jatera was assigned the homeowner's detrimental-reliance claim, or whether the homeowner suffered such reliance. View "Jatera Corp. v. US Bank National Assoc." on Justia Law

The Fifth Circuit denied the petition for rehearing, withdrew the prior opinion, and substituted the following opinion.The court reversed the breach of contract claim and held that there was ambiguity in a mortgage contract's escrow provisions and thus the district court erred by granting summary judgment to defendants on claims arising from that ambiguity. In this case, plaintiff was entitled to proceed to trial on his claim that Ocwen breached the contract by paying his 2010 taxes before they became delinquent. Furthermore, the district court erred as a matter of law by determining that Ocwen had provided contractually adequate notice of its revocation of the Waiver Agreement. The court affirmed the district court's summary judgment for Ocwen in plaintiff's unclean hands cause of action, which was mislabeled as an affirmative defense. Because it was premature to conclude that Ocwen was entitled to summary judgment on its foreclosure counterclaim, the court vacated the foreclosure ruling and remanded for reconsideration. The court affirmed the district court's grant of summary judgment for Ocwen on plaintiff's Real Estate Settlement Procedures Act (RESPA) claim and Texas Debt Collection Practices Act (TDCPA) claim. View "Wease v. Ocwen Loan Servicing, LLC" on Justia Law