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

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

Independent candidates and minor political parties in Texas challenged several provisions of the Texas Election Code, arguing that these provisions, when combined, violate their First and Fourteenth Amendment rights by imposing severe and unequal burdens on non-wealthy Independents and Minor Parties. The provisions in question include requirements for obtaining ballot access through primary elections, party nominations, or nominating petitions, as well as restrictions on petitioning methods and timelines.The United States District Court for the Western District of Texas denied the plaintiffs' motion for a preliminary injunction and the defendants' motion to dismiss. The court granted in part and denied in part the parties' cross-motions for summary judgment. The district court found that the requirement for candidates to submit hardcopy signatures for ballot access petitions was unconstitutional, reasoning that it imposed an unequal burden on the plaintiffs compared to Major Parties, which could use electronic methods. The court enjoined the enforcement of the paper-petitioning process but stayed its injunction pending appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case and applied the Anderson-Burdick framework to evaluate the constitutionality of the ballot-access laws. The court found that the plaintiffs failed to prove that the challenged provisions imposed severe burdens on them. The court upheld the numerical signature requirement, the costs associated with obtaining signatures, the time constraints on petitioning, and the restrictive petitioning procedures as justified by legitimate state interests. The court also upheld the filing fee or petition requirement for Minor Party candidates and rejected the claim that the provisions imposed more severe restrictions on presidential Independents.The Fifth Circuit reversed the district court's finding that the paper-petitioning requirement was unconstitutional, noting that all candidates, regardless of party affiliation, must obtain petition signatures through hardcopy methods. The court affirmed the constitutionality of the challenged provisions and rendered judgment in favor of the defendants. View "Miller v. Nelson" on Justia Law

The case involves a dispute between Century Surety Company, acting as a subrogee of Triangle Engineering, L.P., and Colgate Operating, L.L.C. over the interpretation of a Master Services/Sales Agreement (MSA) and the insurance policies of the parties. Colgate, an oil well operator, and Triangle, an oilfield consultancy, entered into the MSA in April 2017, which included mutual indemnity provisions supported by liability insurance. Both parties purchased insurance, but Colgate's coverage was significantly higher than Triangle's. Following an accident involving a worker, Century, as Triangle’s subrogee, sought reimbursement from Colgate for a settlement payment.The United States District Court for the Western District of Texas granted summary judgment in favor of Colgate. The court rejected affidavits from Colgate’s vice president and Triangle’s sole member, which were intended to clarify the parties' intentions at the time of the MSA signing. The district court concluded that the MSA did not specify a ceiling for insurance coverage and applied the "lowest common denominator rule" from the Texas Supreme Court’s decision in Ken Petroleum Corp. v. Questor Drilling Corp., limiting Colgate’s indemnity obligation to $6 million, the amount of coverage Triangle had purchased.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo and affirmed the district court’s judgment but on different grounds. The appellate court agreed that the district court correctly excluded the extrinsic evidence but found that the MSA itself provided both a floor and a ceiling of $5 million for mutual indemnity coverage. The court held that Colgate’s insurance policies did not alter this limit and that Colgate was not liable to Century beyond the $5 million specified in the MSA. Thus, the court affirmed the district court’s judgment in favor of Colgate. View "Century Surety Co. v. Colgate Operating" on Justia Law

In the early morning, Javier Ambler II was driving without dimming his high beams, prompting a Texas sheriff’s deputy to signal him to stop. Ambler refused, leading to a high-speed chase involving multiple officers. The pursuit ended when Ambler crashed into trees in Austin, Texas. As officers attempted to arrest him, Ambler, who had congestive heart failure, repeatedly stated he could not breathe. Despite his pleas, Austin City Policeman Michael Nissen and other officers continued to restrain him. Ambler was eventually handcuffed but appeared limp and was later pronounced dead at a hospital. His family sued, alleging excessive force and bystander liability.The United States District Court for the Western District of Texas denied Nissen’s motion for summary judgment on qualified immunity grounds, citing genuine disputes of material fact. The court found that the facts, viewed in the light most favorable to the plaintiffs, could support a finding that Nissen used excessive force and failed to intervene to prevent other officers from using excessive force.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that it lacked jurisdiction to review the district court’s denial of summary judgment because the appeal did not turn on a pure issue of law but rather on disputed facts. The court emphasized that factual disputes, such as whether Ambler was resisting arrest or posed a threat, were material to the plaintiffs’ claims and should be resolved by a jury. Consequently, the Fifth Circuit dismissed the appeal and remanded the case for further proceedings. View "Ambler v. Nissen" on Justia Law