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

Kelly Dwyer sought to recover mental health benefits for his minor daughter, E.D., under his employee group benefit health plan issued by United Healthcare Insurance Company. E.D. suffered from severe anorexia nervosa, leading her parents to admit her to a residential treatment facility, Avalon Hills. Initially, United approved full hospitalization benefits, but later reduced the coverage to partial hospitalization and eventually denied further hospitalization benefits, suggesting outpatient treatment instead. Despite E.D.'s doctors' objections and evidence of her ongoing severe symptoms, United maintained its decision.The United States District Court for the Western District of Texas conducted a bench trial and ruled in favor of United, finding that the insurer had not improperly withheld benefits. The court's decision was based on the administrative record and the arguments presented during the trial.The United States Court of Appeals for the Fifth Circuit reviewed the case and reversed the district court's judgment. The appellate court found that United's denial of benefits was both substantively and procedurally deficient. Substantively, the court held that United's decision was not supported by concrete evidence and contradicted the medical records. Procedurally, United failed to provide a meaningful dialogue or adequate explanation for its denial, violating ERISA requirements. Additionally, the court found that United improperly failed to process claims at the MultiPlan rate, as it did not respond to Mr. Dwyer's administrative appeal regarding this issue.The Fifth Circuit reversed the district court's judgment and remanded the case for the calculation of damages, statutory penalties, attorneys' fees, and other relief for Mr. Dwyer. View "Dwyer v. United Healthcare" on Justia Law

Josephine Perez-Gorda was convicted of fraud after she and her husband, Justin, misrepresented his medical condition to the U.S. Department of Veterans Affairs. Justin, who suffered a brain injury while on duty, and Perez-Gorda claimed he was unable to walk or care for himself, leading to the receipt of various government benefits, including a new home, car, and caregiver stipend. However, evidence showed Justin was more mobile and self-sufficient than they had represented. After Justin's death in 2022, Perez-Gorda was indicted on multiple counts of wire fraud, mail fraud, health care fraud, conspiracy to commit health care fraud, and aiding and abetting offenses.The United States District Court for the Western District of Texas convicted Perez-Gorda on all counts, and she was sentenced to forty-six months in prison. Perez-Gorda appealed, arguing that the jury instructions on wire and mail fraud were erroneous based on intervening circuit precedent. She did not object to these instructions at trial. The Fifth Circuit reviewed the instructions for plain error and found them erroneous but concluded that the error did not affect Perez-Gorda’s substantial rights, as there was no reasonable probability that the jury would have acquitted her under the correct instructions.Perez-Gorda also challenged statements made during the grand jury proceedings and the sufficiency of the evidence supporting the jury verdicts. The Fifth Circuit found that the statements did not influence the grand jury’s decision and that a rational jury could have found her guilty beyond a reasonable doubt. Additionally, Perez-Gorda contested her sentence, specifically the two-level upward adjustment for her role as an organizer or leader. The Fifth Circuit reviewed this factual finding for clear error and upheld it, noting evidence that Perez-Gorda supervised Justin in the fraudulent activities. The Fifth Circuit affirmed the district court’s judgment. View "USA v. Perez-Gorda" on Justia Law

In 2001, RSM Production Corporation (RSM) and the Republic of Cameroon signed a concession contract granting RSM the right to explore and develop hydrocarbons in the Logbaba Block. In 2005, RSM and Gaz du Cameroun (GdC) entered into a Farmin Agreement and a Joint Operating Agreement (JOA), with GdC becoming the project operator. The Farmin Agreement allowed GdC to recover its drilling costs from production revenues before sharing profits with RSM. A dispute arose over the Payout date, with RSM claiming it was February 1, 2016, and GdC asserting it was June 1, 2016.The dispute was submitted to arbitration under the International Chamber of Commerce (ICC) Rules. The arbitral tribunal ruled in favor of RSM, awarding $10,578,123.28 based on a February 1, 2016, Payout date. GdC requested corrections, arguing the tribunal included damages for claims not substantively addressed. The tribunal issued an Addendum Award, reducing RSM's award by $4,011,625.90, citing computational errors.RSM sought to vacate the Addendum Award in the United States District Court for the Southern District of Texas. The district court vacated the part of the Addendum Award that reduced RSM's recovery, concluding the tribunal exceeded its powers by reconsidering the merits of RSM's claims under the guise of correcting computational errors.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the tribunal had the authority to correct computational errors and to determine what constituted such errors under ICC Rule 36. The tribunal's interpretation of the rule and the parties' agreements was entitled to deference. The Fifth Circuit reversed the district court's judgment and remanded with instructions to confirm the Addendum Award. View "RSM Prod v. Gaz du Cameroun" on Justia Law

Three black officers, Cedric Green, Darrell Clark, and Reginald Cooper, alleged a history of racial discrimination within the Alexandria Police Department (APD). They claimed that over their decades-long careers, they faced systemic racism, including derogatory comments and unfair treatment. Clark and Cooper were eventually terminated, and Green was demoted. They argued that these actions were retaliatory, following their complaints to HR and the FBI about racial harassment and misconduct within the department.The United States District Court for the Western District of Louisiana granted summary judgment in favor of the City of Alexandria and other defendants. The court found that the plaintiffs failed to present competent evidence to support their claims. Specifically, the court noted that the plaintiffs' reliance on their complaint and unsubstantiated assertions did not meet the evidentiary standards required to survive summary judgment. The court also found that the city provided legitimate, non-retaliatory reasons for the adverse employment actions taken against the plaintiffs.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo and affirmed the district court's decision. The appellate court agreed that the plaintiffs did not provide sufficient evidence to establish a hostile work environment, as the incidents cited were either not racially motivated or not severe and pervasive enough. The court also found no causal connection between the plaintiffs' protected activities (complaints to HR and the FBI) and the adverse employment actions. Additionally, the court held that the city had legitimate reasons for the terminations and demotion, which the plaintiffs failed to show were pretextual. The court also dismissed the plaintiffs' claims under Louisiana's whistleblower statute and their Monell claims against the city, citing a lack of evidence of a discriminatory policy or custom. View "Clark v. City of Alexandria" on Justia Law

On November 4, 2020, San Antonio police officers stopped a car driven by Ronnie Diaz, Jr. They detected a strong odor of marijuana and found empty baggies commonly used for narcotics. Diaz admitted to having ammunition in his pocket and being a convicted felon. A search of the vehicle revealed a .45 caliber pistol, methamphetamine, counterfeit Xanax, and heroin. Diaz had prior convictions, including theft of a vehicle and evading arrest in 2014, and possession of a firearm as a felon in 2018.Diaz was charged in the Western District of Texas with possession with intent to distribute methamphetamine, possessing firearms during a drug trafficking crime, and being a felon in possession of a firearm. He moved to dismiss the felon-in-possession charge, arguing it violated the Second Amendment. The district court denied the motion, and Diaz was convicted on all counts and sentenced to 120 months for counts one and three, to run concurrently, and 60 months for count two, to run consecutively.The United States Court of Appeals for the Fifth Circuit reviewed the case. Diaz raised two claims: that his conviction under 18 U.S.C. § 922(g)(1) was unconstitutional under the Second Amendment, both facially and as applied, and that the statute exceeded Congress’s power under the Commerce Clause. The court dismissed the Commerce Clause argument as foreclosed by precedent. Applying the historical analysis required by New York Rifle and Pistol Association, Inc. v. Bruen, the court found that the regulation of firearm possession by felons is consistent with the Nation’s historical tradition of firearm regulation. The court held that 18 U.S.C. § 922(g)(1) is constitutional as applied to Diaz and facially. Consequently, the Fifth Circuit affirmed Diaz’s conviction. View "United States v. Diaz" on Justia Law

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