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

The bankruptcy court authorized the Chapter 11 trustee to sell the debtor’s Bourbon Street, New Orleans property free and clear of all claims, liens, and interests under 11 U.S.C. Sec. 363(f). Two lessees of the property, together with the sole owner of the debtor, filed objections to the sale and an alternative request seeking either adequate protection under Section 363(e) or rejection of the leases, all of which the bankruptcy court denied. The lessees, insiders of the debtor company, executed and recorded leases(for below-market rates) junior to the rights of the mortgagee AMAG. Had there been no bankruptcy, AMAG could have foreclosed under state law and wiped out the junior interests.The Fifth Circuit denied the objectors’ petition for mandamus relief. Bankruptcy Code sections 363(f)(1) and 365(h)(1)(A)(ii), qualify what a debtor can do. The Code recognizes and defers to state law. The essential state law rights of the tenants, in this case, are limited by the senior mortgagee’s prior lien on the property; neither Section 363(e) nor 365(h)(1)(A)(ii) offers protection. View "In Re: Royal Street Bistro, L.L.C." on Justia Law

Lereta maintained an ERISA-governed benefits plan, subject to the Employee Retirement Income Security Act (ERISA) that provided short-term disability (STD) and long-term disability (LTD) to its employees, including Newsom. Reliance issued the policies that funded these benefits and served as the benefits claims administrator. Newsom filed suit following Reliance’s determination that he was ineligible for LTD benefits.The district judge entered an order in favor of Newsom, awarding him LTD benefits. The Fifth Circuit affirmed as to Newsom’s eligibility for LTD benefits and alleged date of disability but vacated as to Newsom’s entitlement to LTD benefits. The court remanded with instructions for the district court to remand Newsom’s claim to the administrator for further proceedings. The district court did not err by interpreting the term “full time” and its reference to a “regular work week” to mean the “scheduled workweek” set by Lereta for Newsom. Although that factual record contains medical records Newsom submitted during Reliance’s evaluation of his claim, the merits evidence is at best incomplete and undermines the district court’s benefits determination; the court’s benefits determination does not fully square with the record. View "Newsom v. Reliance Stnrd Life Ins" on Justia Law

After incurring a million-plus-dollar loss for sending gold coins to a thief who forged check payments and intercepted the shipment of those coins, Gage filed an insurance claim. The underwriters denied the claim citing a coverage exclusion for losses incurred “consequent upon” delivering insured property to any third party against payment by a fraudulent check.The Fifth Circuit certified questions to the Texas Supreme Court: Whether Gage's losses were sustained consequent upon delivering insured property to UPS against a fraudulent check, causing the policy exclusion to apply; if yes. whether UPS's alleged errors are considered an independent cause of the losses under Texas law. The Texas Supreme Court concluded the ordinary meaning of “consequent upon” is but-for causation and answered “yes” to the first question. On the second question, the Texas Supreme Court answered “no” by concluding UPS’s alleged negligence was a concurrent cause of loss, dependent upon Gage’s handing over of the gold coins against fraudulent checks. In light of those answers, the Fifth Circuit affirmed the district court. Gage’s losses were excluded from coverage. Gage’s extra-contractual claims were properly dismissed as they were predicated on coverage under the policy. View "Dillon Gage, Inc. v. Certain Underwriters at Lloyds" on Justia Law

CP and Cimarex entered into the Master Service Agreement (MSA). Cimarex hired CP to work at Cimarex’s Oklahoma oil well. CP assigned Trent, an employee of one of its subcontractors, to work at the well. A flash fire occurred at the well. Trent was severely burned Trent sued Cimarex and CP. Cimarex and its insurers settled with Trent for $4.5 million. The Texas Oilfield Anti-Indemnity Act (TOAIA) voids indemnity agreements that pertain to wells for oil, gas, or water or to mineral mines unless the indemnity agreement is supported by liability insurance. The MSA's mutual indemnity provision required Cimarex and CP to indemnify each other; CP was obligated to obtain a minimum of $1 million in commercial general liability insurance and $2 million in excess liability insurance, Cimarex was required to obtain $1 million in general liability insurance and $25 million in excess liability insurance. CP obtained more coverage than the minimum required by the MSA, but its policy limited indemnity coverage. Cimarex sought indemnity from CP, which paid Cimarex $3 million, but refused to indemnify Cimarex for the remaining $1.5 million.The Fifth Circuit affirmed summary judgment for CP. TOAIA contemplates that mutual indemnity obligations will be enforceable only up to the limits of insurance each party has agreed to provide in equal amounts to the other party as indemnitee. CP did not breach the MSA because CP was only required to indemnify Cimarex up to $3 million. View "Cimarex Energy Co. v. CP Well Testing L.L.C." on Justia Law

Officer Martin responded to a call about neighbors throwing trash in the caller’s yard. A subsequent 911 call came from the man’s neighbor, Craig, complaining that the man had grabbed her son by the neck because the boy had allegedly littered. Martin activated his body camera at the scene. Martin got into a verbal altercation with Craig; Craig’s 14-year-old, 15-year-old, and adult daughters became involved. Martin used physical force to get them into his squad car.Craig and her children sued Martin for unlawful arrest and excessive force. Craig also sued Martin on behalf of her another minor child, alleging injuries suffered as a bystander. The district court dismissed A.C.’s claim as incognizable; it dismissed the remaining claims for unlawful arrest, holding Martin was entitled to qualified immunity. The court denied Martin qualified immunity on the excessive force claims, concluding that the video evidence submitted by Martin was “too uncertain.” The Fifth Circuit reversed the denial of qualified immunity on the excessive force claims, expressing no opinion on the dismissal of the other claims. Martin’s actions were sufficiently measured in relation to the plaintiffs’ resistance. Martin’s conduct was not objectively unreasonable and did not violate any of their Fourth Amendment rights. Plaintiffs failed to provide any controlling precedent showing that Martin’s particular conduct violated a clearly established right. View "Craig v. Martin" on Justia Law

The Housing Authority of New Orleans (HANO) agreed to pay Parkcrest $11 million to build affordable housing. Liberty was Parkcrest’s surety. HANO terminated Parkcrest before the project was done. Parkcrest sued, alleging breach of contract. Liberty and HANO executed a “Takeover Agreement,” incorporating the original contract; Liberty stepped into Parkcrest’s shoes to finish the project. Liberty hired Parkcrest as its completion contractor. HANO claimed that Liberty had forfeited any right to continue working on the project and requested that it relinquish control of the site. Liberty claimed the termination was wrongful. Rather than following the contract’s dispute resolution procedures, Liberty filed a complaint-in-intervention in the HANO-Parkcrest litigation.The district court concluded that HANO had breached the Takeover Agreement and the underlying HANO Contract by terminating Liberty for convenience after Liberty had substantially completed the project, awarded Liberty and Parkcrest damages, and held HANO liable to Liberty for attorney’s fees, but left those fees unquantified. The Fifth Circut affirmed but concluded it lacked jurisdiction to consider the fee award because a fee award is not a final judgment under 28 U.S.C. 1291 until reduced to a sum certain. The district court then awarded Liberty $526,192.25 in fees. The Fifth Circuit reversed. Liberty’s claim for fees arises from the contract, which authorizes fee-shifting “upon the receipt by [HANO] of a properly presented claim.” Liberty breached the contract’s dispute-resolution procedures, this breach was unexcused, so Liberty is entitled to nothing. View "Liberty Mutual Insurance Co. v. Housing Authority of New Orleans" on Justia Law

OSHA investigated DRTG, a Houston construction company, following a worksite fatality. DRTG employees provided DRTG’s business address, which is also the home address of DRTG’s sole owner. On September 13, OSHA issued a citation and a notice of a proposed penalty to DRTG, mailed to the provided address by USPS certified mail. After an unsuccessful delivery attempt was made on September 16, USPS left a standard delivery slip saying that the certified mailing would be held at the Post Office for pick-up; DRTG never retrieved the mailing. OSHA sent the citation by UPS Next Day Air on September 23. According to UPS tracking, the citation was successfully delivered to DRTG’s doorstep on September 24. DRTG had 15 working days to file a notice of contest, which OSHA calculated from the date of the UPS delivery as October 16. DRTG did not file the notice by the deadline. The citation became a final order on October 16, 29 U.S.C. 659(a). The next day, an OSHA representative spoke with Padron regarding documentation required by the citation. A "next of kin letter" sent by OSHA to a DRTG employee who was the deceased employee’s cousin, was received on October 18, was immediately forwarded to DRTG’s counsel.On November 5, OSHA received DRTG’s notice of contest, which was ultimately rejected as untimely. The Fifth Circuit affirmed. DRTG was properly served with notice. View "D.R.T.G. Builders, L.L.C. v. Occupational Safety and Health Review Commission" on Justia Law

In 1991, McFarland and an accomplice robbed Kwan’s store. McFarland’s accomplice pressed a gun against a security guard’s head. The guard dropped his weapon. McFarland or the accomplice then fatally shot Kwan. Only McFarland was prosecuted. He is on death row. After exhausting his state remedies, he filed a petition for a writ of habeas corpus. The district court denied the petition.The Fifth Circuit affirmed. The court first rejected a claim of ineffective assistance. During trial, McFarland’s retained counsel, Benn was sleeping throughout significant portions of the trial and otherwise presented as unprepared. The trial judge decided to appoint additional counsel. McFarland refused to agree, but the judge appointed Melamed to serve as “second chair.” Melamed was an experienced criminal defense lawyer but he had yet to try a capital case. McFarland repeatedly affirmed that he wanted to keep Benn as counsel and would not cooperate with Melamed in securing mitigation witnesses. The court also rejected Sixth Amendment and Brady claims. McFarland did not have counsel during an identification lineup; a finding that his arrest warrant was not a formal criminal complaint giving rise to his right to counsel was contrary to or an unreasonable application of Supreme Court precedent, nor was a finding that “the prosecution did not fail to disclose.” View "McFarland v. Lumpkin" on Justia Law

When authorities booked Randall as a pretrial detainee, he was medicated and intoxicated and had a history of mental health treatment. Though Randall was supposed to “be followed for alcohol withdrawal syndrome and possible delirium tremens,” he was allegedly placed in a cell without an operable source of water, not monitored, nor provided any medication or liquids. The next day, officials found him hanging from his bedsheets. He eventually died there from his injuries.A complaint filed by Randall’s mother, Karen, under 42 U.S.C. 1983, alleged that Randall was survived by his wife, Kelsey and his biological parents. Karen later amended her complaint to “substitute Plaintiff with individual heirs,” adding Kelsey, and M.A., Randall’s minor child, and to allow M.A. to appear through Morrow, her mother. The district court dismissed, holding that Karen lacked standing and adding Kelsey and M.A. could not cure the initial jurisdictional defect.The Fifth Circuit reversed. The district court was “less than meticulous” in analyzing “standing.” While Karen lacked prudential standing because Louisiana law does not authorize her to bring this particular cause of action, she has Article III standing. She has a constitutionally cognizable interest in the life of her son, which does not depend on whether Louisiana law allows her to sue. View "Abraugh v. Altimus" on Justia Law

The Fifth Circuit remanded to the district court to reform the judgment to reflect conviction and sentencing under 8 U.S.C. 1326(b)(1). The court applied Mathis v. United States, 136 S. Ct. 2243, 2249 (2016), and agreed with defendant that he was erroneously sentenced under section 1326(b)(2) because the district court misclassified his previous Texas state conviction for sexual assault as an "aggravated felony." The court explained that the district court's implicit application of the modified categorical approach to conclude that defendant's conviction was an "aggravated felony" based on language in his state court indictment constituted clear and obvious error. View "United States v. Rodriguez-Flores" on Justia Law