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

Defendant appealed her conviction for possession and smuggling of controlled substances. Defendant asserts that the trial court abused its discretion in admitting evidence of a prior drug smuggling offense under Rule 404(b) of the Federal Rules of Evidence. Defendant argued that evidence of her prior crime is irrelevant because it is too dissimilar to the subsequent trafficking crime. Defendant further argued that the prejudicial effect of the extrinsic evidence far outweighs its probative value, thus failing Rule 403’s balancing test and Beechum’s second step.   The Fifth Circuit affirmed. The court concluded that the district court did not abuse its discretion either in finding that the prior criminal act was relevant to Defendant’s knowledge in the instant drug trafficking case or in finding that the prejudicial effect of the evidence did not substantially outweigh its probative value. The government’s closing argument offered the extrinsic evidence not to mislead the jury into convicting her for a previous offense, but to show absence of mistake, which Rule 404(b) specifically allows. The district court also mitigated any misuse by providing a limiting instruction cautioning the jury that Defendant was “not on trial for any other act, conduct or offense not alleged in the indictment.” View "USA v. Valenzuela" on Justia Law

Defendant pled guilty to conspiracy to possess with intent to distribute and to conspiracy to distribute over 500 grams of methamphetamine. He appealed, challenging his sentencing enhancement as lacking adequate record support. On appealed he argued that the district court erred in imposing without a sufficient factual basis a two-level sentencing enhancement under U.S.S.G. Section 3C1.2 for recklessly creating a substantial risk of death or serious bodily injury to another person while fleeing from a law enforcement officer.   The Fifth Circuit affirmed. The court explained that as Defendant neither objected to the Pre-Sentence Report (PSR) nor presented rebuttal evidence regarding the PSR’s statements, including those describing the disposal of the drugs, the district court properly relied upon the PSR. The court held that in this case, the record, supports at least a plausible basis for this enhancement. Again, the Factual Basis and the PSR both make clear that Defendant “lost several ounces because he threw it out during the car chase.” Absent specific evidence that Defendant took steps to ensure that the discarded drugs could not be consumed and pose a danger to others, his spoliation during a police chase, alone, plausibly “create[d] a substantial risk of death or serious bodily injury to another person recklessly created a substantial risk of death or serious bodily injury to another person in the course of fleeing from a law enforcement officer.” View "USA v. Melendez" on Justia Law

Following the bankruptcy court’s confirmation of its reorganization plan, Highland Capital Management, L.P. filed a motion with the bankruptcy court seeking entry of an order authorizing the creation of an indemnity subtrust. Over several objections, the bankruptcy court entered an order approving the motion. Several objectors appealed, arguing that the order impermissibly modified the plan. Dugaboy, NexPoint, and HCMFA (collectively, “Appellants”), as well as Dondero, objected to the motion, arguing that it was a modification to the Plan requiring solicitation, voting, and confirmation under § 1127(b) of the Bankruptcy Code. The bankruptcy court disagreed and granted the motion in an order authorizing the creation of the Indemnity Sub-Trust on July 21, 2021 (the “Order”). The district court affirmed the bankruptcy court’s order and dismissed several of Appellants from the appeal. Appellants then sought review in this court.   The Fifth Circuit dismissed in part and affirmed in part the district court’s judgment. The court explained that Appellants’ statement of the issues on appeal includes the district court’s affirmance of the Order; however, it does not include the district court’s partial dismissal of the appeal on the basis that HCMFA and Dugaboy lacked standing. Therefore, Appellants did not preserve for appeal a challenge to the district court’s partial dismissal below for lack of standing. The appeals of HCMFA and Dugaboy remain dismissed below and, for this reason, they must be dismissed from the current appeal as well. View "Highland Captl v. Highland Captl Mgmt" on Justia Law

Plaintiff, an investor and venture capitalist and the CEO of InterOil Corporation (“InterOil”), developed a business relationship. Throughout that relationship, Plaintiff (and “entities controlled and beneficially owned by him”) provided loans, cash advances, and funds to the CEO and InterOil. Plaintiff and the CEO continued to have a business relationship until 2016, at which point the CEO’s actions and words made Plaintiff concerned he would not receive his shares back from the CEO. In late 2017, as part of a larger suit against the CEO, Plaintiff and Aster Panama sued the J.P. Morgan Defendants for (1) breach of trust and fiduciary duty, (2) negligence, and (3) conspiracy to commit theft. The district court granted summary judgment on all counts relating to the J.P. Morgan defendants and awarded them attorneys’ fees under the Texas Theft Liability Act (“TTLA”).   The Fifth Circuit affirmed. Under Texas law, the only question is whether the J.P. Morgan Defendants expressly accepted a duty to ensure the stocks were kept in trust for Plaintiff or Aster Panama. That could have been done by express agreement or by the bank’s acceptance of a deposit that contained writing that set forth “by clear direction what the bank is required to do.” Texas courts require a large amount of evidence to show that a bank has accepted such a duty. Here, no jury could find that the proffered statements and emails were sufficient evidence of intent from the J.P. Morgan Defendants to show an express agreement that they “owe[d] a duty to restrict the use of the funds for certain purposes.” View "Civelli v. J.P. Morgan Chase" on Justia Law

At its production plant in Baton Rouge, the Exxon Mobil Corporation requires prospective operators to pass an extensive, multi-pronged training program. If they don’t, they’re fired. Plaintiff didn’t pass his tests, so Exxon let him go. Plaintiff then sued Exxon, insisting he wasn’t fairly trained by staff because he’s black. The district court disagreed and dismissed his suit. On appeal, Plaintiff contends that, first, the district court ignored genuine factual disputes and, second, erroneously ruled that he waived his inadequate training theory.   The Fifth Circuit affirmed the district court’s ruling for different reasons. The court explained that Plaintiff cannot rely on an inadequate training theory. Exxon provided Plaintiff with a handbook detailing the polypropylene unit’s processes and equipment, and scheduled time each workweek for him to study. Exxon also assigned him a trainer, an operator with twenty years of experience, who went over the handbook in detail with him. Thus, because his training—and more importantly, his opportunities—paralleled his classmates, his program necessarily couldn’t be inadequate. Without proper training, no terminated trainee is qualified for the position he was training for. Plaintiff satisfied his burden to show he was qualified for the position of operator trainee, the position he was fired from. However, Plaintiff cannot genuinely allege Exxon failed to train him, so he cannot satisfy the McDonnell Douglas framework. View "Rahman v. Exxon Mobil" on Justia Law

Defendant challenged the district court's denial of his request for an adjustment to a restitution order. Defendant claimed that the $1,400 stimulus payment he received under the American Rescue Plan was exempt from levy and that any payment would violate the Taking Clause.The Fifth Circuit affirmed the district court's denial of Defendant's request to adjust his restitution order. In so holding, the court held that the stimulus payment does not meet any exception and that he was required to apply the complete payment towards any restitution he owed. View "USA v. Stark" on Justia Law

Defendant was stopped by Border Patrol near Laredo, Texas, while smuggling 84 illegal aliens in a trailer. A jury convicted him for trafficking aliens. On appeal, Defendant argued the jury had insufficient evidence.   The Fifth Circuit affirmed. The court explained that Defendant argued that the Government failed to prove that he knew illegal aliens were in his truck, that he agreed with anyone to transport illegal aliens, or that he sought to further their unlawful presence in the United States. But viewing the evidence presented at trial in the light most favorable to the verdict—and drawing all reasonable inferences in support of the verdict— Defendant doesn’t come close to meeting the doubly deferential plain-error sufficiency burden.   Further at Defendant’s trial, the Government presented a mountain of evidence indicating that Yusuf knew he was hauling illegal aliens. Defendant was the sole driver and occupant of the truck in the trailer of which 84 illegal aliens were discovered; that alone is probative of knowledge. The jury also heard abundant evidence that Defendant’s story lacked credibility. View "USA v. Yusuf" on Justia Law

Defendant appealed his jury trial conviction for possession of a firearm as a convicted felon. He argued that the evidence was insufficient to prove he possessed a firearm. The Fifth Circuit affirmed. The court explained that although the Government presented no direct evidence of possession, a reasonable jury could conclude that Freeman possessed the firearm. The jury saw videos of Defendant running from the police—first in his car and then on foot. And it heard testimony that suspects who run often have narcotics or weapons in their possession. The Government also presented evidence that police recovered the gun in a field about twenty feet from Defendant’s flight path. The jury heard testimony that a grown man could easily have thrown the two- or three-pound gun this distance. View "USA v. Freeman" on Justia Law

In the wake of a 2017 mass shooting in Las Vegas, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, interpreted existing regulations on machineguns as extending to bump stocks. Plaintiff relinquished several bump stocks and then filed this case, seeking to invalidate ATF's interpretation.The district court found in favor of the ATF, as did a panel of Fifth Circuit judges. However, on rehearing en banc, the Eleventh Circuit reversed, finding that "a plain reading of the statutory language, paired with close consideration of the mechanics of a semi-automatic firearm, reveals that a bump stock is excluded from the technical definition of 'machinegun' set forth in the Gun Control Act and National Firearms Act."The court went on to explain that, even if it determine the language to be ambiguous, it would apply the rule of lenity to interpret the statute against imposing criminal liability. Notably, three judges concurred with the court's opinion on lenity grounds, and the opinion also garnered a three-judge dissent. View "Cargill v. Garland" on Justia Law

Plaintiff ACTGC brought federal antitrust and various state law claims in a suit concerning tours of two New Orleans cemeteries, Defendant New Orleans Archdiocesan Cemeteries d.b.a. New Orleans Catholic Cemeteries (“NOAC”)  and Defendant Cemetery Tours NOLA LLC (“CTN”). ACTGC also requested injunctive relief, which the district court denied, and ACTGC first appealed. The district court then dismissed ACTGC’s federal antitrust and state law claims, which ACTGC also appealed. Defendant NOAC then moved to dismiss the first appeal as moot.   The Fifth Circuit granted NOAC’s motion, dismissed the first appeal, and affirmed the judgment of the district court on all issues in the second appeal. The court agreed with NOAC and found that the first amended complaint is a legal nullity because it was not incorporated by the subsequent second amended complaint. Thus, because the first amended complaint is nullified, the court cannot consider—and thus must dismiss—an appeal of a denial of injunctive relief stemming from the complaint. Further, the court explained that the district court did not abuse its discretion in denying ACTGC leave to amend its complaint to add affidavits that do not add additional evidence of irreparable harm and do not address the pleading deficiencies of its federal law claims.   Moreover, the court held that ACTGC has not pleaded a legally sufficient product market under either of its proffered definitions. If the relevant product market is cemetery tours, it has not identified or included reasonably interchangeable substitutes. And if the product market is cemetery tours of Nos. 1 and 2, such a market is unduly narrow. View "New Orleans Assoc v. New Orleans Arch" on Justia Law