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

In 2020, Mix Creative Learning Center, an art studio offering children's art lessons, began selling online art kits during the pandemic. These kits included reproductions of artworks from Michel Keck's Dog Art series. Keck sued Mix Creative and its proprietor for copyright and trademark infringement, seeking enhanced statutory damages for willful infringement.The United States District Court for the Southern District of Texas found that the fair use defense applied to the copyright claim and granted summary judgment to Mix Creative. The court also granted summary judgment on the trademark claim, even though Mix Creative had not sought it. Following this, the district court awarded fees and costs to Mix Creative under 17 U.S.C. § 505 but declined to hold Keck’s trial counsel jointly and severally liable for the fee award under 28 U.S.C. § 1927.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that the fair use defense applied because Mix Creative’s use was transformative and unlikely to harm the market for Keck’s works. The court also found that any error in the district court’s sua sponte grant of summary judgment on the trademark claim was harmless, given the parties' concession that the arguments for the copyright claim applied to the trademark claim. Lastly, the appellate court ruled that the district court did not abuse its discretion in awarding fees to Mix Creative or in refusing to hold Keck’s attorneys jointly and severally liable for the fee award. View "Keck v. Mix Creative Learning Center" on Justia Law

Astrid Dariana Lopez Orellana, a noncitizen, entered the U.S. without inspection in 2019, fleeing gang threats in Honduras. In 2022, she was convicted of accessory after the fact to armed robbery under Louisiana law. Subsequently, she was taken into ICE custody and designated as an aggravated felon, leading to expedited removal proceedings.The Department of Homeland Security (DHS) issued a Final Administrative Removal Order (FARO) and a Notice of Intent (NOI) to remove her, alleging her conviction was an aggravated felony. Lopez requested withholding of removal, and an asylum officer found she had a reasonable fear of persecution if returned to Honduras. Her case was referred to an Immigration Judge (IJ). DHS later issued a new NOI and FARO on the same day, claiming her conviction was an aggravated felony related to obstruction of justice. Lopez challenged this, arguing the Louisiana statute did not match the federal definition of obstruction of justice, and that DHS violated procedural regulations.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the Louisiana accessory-after-the-fact statute requires only general intent, whereas the federal obstruction of justice offense requires specific intent. Therefore, the state statute is not a categorical match for the federal offense. The court also determined that DHS violated Lopez’s due process rights by not following proper procedures, such as issuing the FARO and NOI on the same day and failing to serve the FARO in a timely manner.The Fifth Circuit granted Lopez’s petition for review, vacated the order of removal, and remanded the case to DHS for further proceedings consistent with its opinion. The court directed the government to facilitate Lopez’s participation in these proceedings. View "Orellana v. Garland" on Justia Law

In July 1, 2021, the United Electrical, Radio, and Machine Workers of America sought to represent employees of Hudson Institute of Process Research Incorporated, a legal outsourcing and staffing company. The National Labor Relations Board (NLRB) was tasked with determining the appropriate bargaining unit, excluding supervisors. Hudson and the union disagreed on whether certain personnel, including team leads and revision specialists, were supervisors. Hudson also objected to an employer-wide bargaining unit. The NLRB held a hearing in September 2021, where Hudson argued that these personnel had supervisory authority.The NLRB regional director found that Hudson failed to prove that the disputed personnel were supervisors and approved an employer-wide bargaining unit. Hudson appealed to the NLRB, which denied the request for review. An election was conducted, and the union was certified. Hudson refused to bargain, leading the NLRB to find it had committed an unfair labor practice. Hudson then petitioned for review.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the NLRB lacked substantial evidence to support its findings that certain personnel were not supervisors. Specifically, the court determined that I-140 team leads, team lead assistants, floating team lead assistants, RFE team leads, and I-485 team leads possessed supervisory authority, including assigning work and recommending rewards, using independent judgment. The court also upheld the NLRB’s certification of an employer-wide bargaining unit but found that the unit improperly included supervisors.The Fifth Circuit granted Hudson’s petition for review, reversed the NLRB’s bargaining order, and denied enforcement, concluding that Hudson did not violate the National Labor Relations Act by refusing to bargain with the union. View "Hudson Institute of Process Research Incorporated v. NLRB" on Justia Law

Occidental Petroleum Corporation acquired Anadarko Petroleum Corporation in 2019, resulting in a trust holding a significant amount of Occidental stock. Wells Fargo, acting as trustee, agreed via email to sell the stock between January 6 and January 10, 2020. However, Wells Fargo failed to execute the sale until March 2020, by which time the stock's value had significantly decreased, causing a loss of over $30 million. Occidental sued Wells Fargo for breach of contract based on the email chain and the Trust Agreement.The United States District Court for the Southern District of Texas granted summary judgment in favor of Occidental, finding that Wells Fargo breached the Trust Agreement by failing to sell the stock as planned. The court also dismissed Wells Fargo’s counterclaim and affirmative defenses and awarded damages and attorney’s fees to Occidental.The United States Court of Appeals for the Fifth Circuit reviewed the case and held that the 2019 email chain did not constitute a contract due to lack of consideration. However, Wells Fargo was judicially estopped from arguing that the Trust Agreement was not a contract, as it had previously asserted that the relationship was contractual to dismiss Occidental’s fiduciary-duty claim. The court affirmed that Wells Fargo breached the Trust Agreement by failing to prudently manage the Trust’s assets.The Fifth Circuit also upheld the district court’s calculation of damages, rejecting Wells Fargo’s argument that reinvestment should have been considered. The court found that reinvestment was speculative and unsupported by the record. Additionally, the court affirmed the dismissal of Wells Fargo’s counterclaim and affirmative defenses, as Wells Fargo failed to show a genuine dispute of material fact. Finally, the court upheld the award of attorney’s fees, finding no basis for segregating fees based on Wells Fargo’s different capacities. The district court’s judgment was affirmed. View "Occidental Petroleum v. Wells Fargo" on Justia Law

In this case, a primary insurer, Westport Insurance Corporation, and an excess insurer, Pennsylvania National Mutual Casualty Insurance Company, disputed liability for a judgment against their mutual insured, Insurance Alliance (IA). IA was sued by Lake Texoma Highport LLC for failing to procure requested insurance coverage, resulting in significant property damage. IA had a primary insurance policy with Westport and an excess policy with Penn National. Westport controlled the defense and rejected multiple settlement offers from Highport. A jury found IA liable, resulting in a $13.7 million judgment.The United States District Court for the Southern District of Texas determined that Penn National breached its duties to defend and indemnify IA. However, a jury found that Westport violated its Stowers duty by not accepting reasonable settlement offers. The district court ruled that Penn National's breaches occurred after Westport's Stowers violation and thus did not impact the case outcome.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed that Penn National breached its duties but held that Westport's Stowers duty was triggered by Highport's settlement offers, which Westport unreasonably rejected. The court found that the district court's jury instructions were correct and that Penn National had standing to assert a Stowers claim. The court also concluded that the district court did not err in its jury instructions or in setting aside the jury's verdict regarding the May 2009 demand.Ultimately, the Fifth Circuit affirmed the district court's judgment, holding that Westport was liable for the excess judgment due to its Stowers violation, and Penn National was entitled to reimbursement for the amount it paid on IA's behalf. View "Westport Insurance Corporation v. Pennsylvania National Mutual Casualty Insurance Company" on Justia Law

Brett Favre, a former professional football player, sued Shannon Sharpe, another former player and sports talk show host, for defamation. Sharpe had made statements on his show accusing Favre of stealing funds from a government program intended for impoverished individuals. These comments were made in the context of a widely reported welfare scandal in Mississippi, where federal funds were misused, and Favre was alleged to have received some of these funds. Favre had not been criminally charged but was involved in a civil suit filed by the Mississippi Department of Human Services (MDHS) to recover misused funds.The United States District Court for the Southern District of Mississippi dismissed Favre's defamation suit on the pleadings. The court ruled that Sharpe's comments were rhetorical hyperbole and thus not actionable. The court found that no reasonable person would interpret Sharpe's statements as literal accusations of theft, given the context of the broadcast.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The appellate court did not analyze the rhetorical hyperbole argument but instead focused on whether Sharpe's statements were protected opinions based on disclosed facts. The court concluded that Sharpe's statements were strongly stated opinions based on widely reported facts about the welfare scandal. The court noted that the broadcast included corrections and clarifications about the facts, and Sharpe's comments did not imply undisclosed false facts. Therefore, the statements were nonactionable as they were opinions based on truthful, established facts.The Fifth Circuit affirmed the district court's dismissal of Favre's defamation claim, holding that Sharpe's statements were protected opinions and did not constitute defamation. View "Favre v. Sharpe" on Justia Law

Ethan Sturgis Day was involved in a fraudulent scheme that purported to sell shipping containers converted into housing units. The scammers, including Day, misrepresented their credentials and affiliations to lure customers, collected payments, and never delivered the promised container homes. Day managed employees and the scammers' bank accounts. The Presentence Investigation Report (PSR) identified 41 victims and assessed a loss amount of $2,563,123.72, but only detailed the financial circumstances of eight victims.The United States District Court for the Western District of Texas sentenced Day to 101 months of incarceration and three years of supervised release. The court enhanced Day's offense level based on the loss amount and for causing substantial financial hardship to 25 or more victims, as well as for his role as an organizer or leader. Day objected to these enhancements, but the district court overruled his objections and adopted the PSR. After a restitution hearing, the court lowered the loss amount by nearly $1 million and re-sentenced Day to 101 months, maintaining the same enhancements.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the district court erred in applying the six-point enhancement for substantial financial hardship to 25 or more victims, as the record did not support that 25 or more victims experienced substantial financial hardship. However, the court upheld the two-point enhancement for Day's role as an organizer or leader, noting that he exercised control over other participants and managed significant assets of the fraud. Consequently, the Fifth Circuit vacated Day's sentence and remanded the case for resentencing. View "United States v. Day" on Justia Law

Highland Capital Management, L.P. (Highland) was an investment fund managed by James Dondero, who also managed several of its subsidiaries. Highland had a practice of lending money to its subsidiaries and to Dondero personally. During Highland's bankruptcy proceedings, Dondero was removed, and a court-appointed board took over. The board attempted to collect on promissory notes executed in Highland's favor by the subsidiaries and Dondero. When they refused to pay, Highland initiated adversary actions in bankruptcy court.The United States Bankruptcy Court for the Northern District of Texas handled the initial proceedings. Highland filed several adversary actions against Dondero and the subsidiaries, seeking enforcement of the promissory notes. The cases were consolidated, and the bankruptcy court recommended granting summary judgment in favor of Highland. The United States District Court for the Northern District of Texas adopted the recommendations and entered judgment against all defendants.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's decision, holding that Highland had established a prima facie case for the validity and enforceability of the promissory notes. The court found that the defendants' arguments, including claims of oral agreements to forgive the loans, lack of authority to sign the notes, mutual mistake, prepayment, and Highland's responsibility to make payments, were unsupported by credible evidence. The court concluded that there were no genuine disputes of material fact and that Highland was entitled to judgment as a matter of law. View "Highland Capital v. NexPoint Asset" on Justia Law

Robert Mayfield, a small-business owner operating thirteen fast-food restaurants in Austin, Texas, challenged the Department of Labor's (DOL) 2019 Minimum Salary Rule. This rule raised the minimum salary required to qualify for the White Collar Exemption under the Fair Labor Standards Act (FLSA) from $455 per week to $684 per week. Mayfield argued that the DOL exceeded its statutory authority by imposing any salary requirement and that such a requirement violated the nondelegation doctrine.The United States District Court for the Western District of Texas granted summary judgment in favor of the DOL, finding that the 2019 Minimum Salary Rule was within the DOL's authority to define and delimit the terms of the White Collar Exemption. The court also held that this delegation of authority did not violate the nondelegation doctrine.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The Fifth Circuit held that the DOL's authority to define and delimit the terms of the White Collar Exemption included the power to set a minimum salary level. The court found that this power was explicitly delegated by Congress and was not an unconstitutional delegation of legislative power. The court also determined that the major questions doctrine did not apply, as the economic and political significance of the rule did not meet the threshold for invoking the doctrine. Additionally, the court concluded that the FLSA's purpose and the text of the exemption itself provided sufficient guidance to satisfy the nondelegation doctrine's requirements. View "Mayfield v. Department of Labor" on Justia Law

Keith M. Cole, a prisoner in the Texas Department of Criminal Justice (TDCJ) and a devout member of the Bahá’í faith, believes he must eat non-pork meat with every meal. TDCJ, however, only provides non-pork meat in about two-thirds of its meals. Cole sued TDCJ under the Religious Land Use and Institutionalized Persons Act (RLUIPA), claiming that the prison's meal policy violated his religious rights. TDCJ offers three meal options: a regular tray, a meat-free tray, and a pork-free tray, but none replace excluded items with non-pork meat. Cole supplemented his diet by purchasing non-pork meat from the commissary, incurring significant personal expenses.The United States District Court for the Eastern District of Texas granted summary judgment in favor of TDCJ. The court held that TDCJ had a compelling interest in controlling costs and that its meal-selection policy was the least restrictive means of furthering that interest. The magistrate judge's report, adopted by the district court, concluded that TDCJ's policy was justified despite Cole's objections.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court found that TDCJ provided no evidence to support its claim of a compelling interest in controlling costs or that its policy was the least restrictive means of achieving that interest. The court emphasized that RLUIPA requires the government to demonstrate that it has no other means of achieving its goal without imposing a substantial burden on religious exercise. The Fifth Circuit vacated the district court's summary judgment and remanded the case for further proceedings, noting that TDCJ's unsupported assertions were insufficient to meet the strict scrutiny standard required under RLUIPA. View "Cole v. Collier" on Justia Law