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

Connie Bourque, a Louisiana resident insured by State Farm Mutual Automobile Insurance Co., filed a class-action lawsuit, alleging that State Farm breached its insurance contract and violated its duty of good faith and fair dealing under Louisiana Law. The claim was based on the method State Farm used to calculate the actual cash value (ACV) of vehicles in the event of a total loss. State Farm used the Autosource MarketDriven Valuation, which Bourque alleged provided a valuation less than the true ACV.The United States District Court for the Western District of Louisiana certified a class of all persons insured by State Farm in Louisiana whose vehicle's Autosource valuation was less than the value according to the National Automobile Dealers Association (NADA) Official Used Car Guide. State Farm appealed this decision to the United States Court of Appeals for the Fifth Circuit.The Fifth Circuit, citing a similar case (Sampson v. United Services Automobile Ass’n), held that the district court's class certification was error. The Fifth Circuit noted that to establish a breach of contract under Louisiana law, proof of injury is required—proof that Bourque failed to establish can be made on a class-wide basis. The court also noted that the NADA value was just one of many statutorily acceptable methods for calculating ACV, and therefore pinning ACV to NADA value constituted an impermissibly arbitrary choice of a liability model.As a result, the Fifth Circuit vacated the district court’s grant of class certification and remanded the case for further proceedings. View "Bourque v. State Farm Mtl Auto Ins" on Justia Law

The United States Court of Appeals for the Fifth Circuit affirmed the district court's denial of Palma L. Jefferson Jr.'s suppression motions and his sentence related to his conviction for various drug trafficking charges, and for being a felon in possession of a firearm. The case arose after an anonymous tip led to a police investigation of Jefferson. The police did not find the described vehicle transporting drugs, but the tipster provided additional information leading to Jefferson's residence. The tipster provided live directions via video chat, allowing the police to locate Jefferson's apartment. When police approached Jefferson, they claimed he admitted to having cocaine and a firearm in his apartment, which led to his arrest.Jefferson challenged the legality of his arrest, the search of his apartment, and the use of his initial confession. He argued that his initial stop by the police amounted to a de facto arrest without probable cause and that the officers unlawfully entered and searched his apartment without a warrant. He further argued that his confession, if made, was unlawfully obtained. Jefferson also challenged the calculation of drug quantities and the application of a dangerous weapon enhancement in his sentence.However, the court found that Jefferson's initial stop by the police was an investigatory stop based on reasonable suspicion, not a de facto arrest. Even if the officers unlawfully entered and searched his apartment, the evidence obtained could still be admitted under the independent source doctrine, as it could be obtained through other lawful means. The court also upheld the drug quantity calculation and dangerous weapon enhancement in Jefferson's sentence. View "USA v. Jefferson" on Justia Law

Between November 2020 and February 2021, Adam Joseph Schultz and his co-conspirators engaged in a scheme to fraudulently obtain vehicles using stolen login credentials from car dealerships. They purchased and paid for these vehicles with the dealerships' money and then used the purchase documents to pick up the vehicles. Schultz pleaded guilty to one count of conspiracy to commit wire fraud. He was sentenced to 120 months in prison, which he appealed. This case was heard by the United States Court of Appeals for the Fifth Circuit.Schultz's appeal was based on two claims: first, that his April 2021 offense of being stopped while driving a stolen vehicle should have been classified as relevant conduct rather than criminal history, and second, he should have received a reduction for a partially completed offense under the United States Sentencing Guidelines. He argued that the April 2021 offense shared similarities with the offense he was convicted for and that the partially completed offense reduction should apply because he intended a larger offense for which he was not charged.The court rejected both of Schultz's arguments. The court reasoned that the April 2021 offense was not similar enough to the offense of conviction to be classified as relevant conduct, and that the partially completed offense reduction did not apply because Schultz had completed all elements of the charged crime. The court affirmed Schultz's sentence, but remanded the case to the district court to clarify a discrepancy between the oral pronouncement and written judgment regarding whether the sentence would run concurrently or consecutively with any sentences imposed in his state cases. View "USA v. Schultz" on Justia Law

In this case, the United States Court of Appeals for the Fifth Circuit dismissed as moot the appeal by the Louisiana Governor and other state officials challenging a district court’s preliminary injunction. Originally, the district court had ordered the state officials to remove juvenile offenders from the Bridge City Center for Youth at West Feliciana (BCCY-WF) and barred them from housing juveniles at the facility in the future. The state officials appealed this decision. However, the preliminary injunction automatically expired under the Prison Litigation Reform Act (PLRA) before the appeal could be resolved, rendering the appeal moot. The Court of Appeals also vacated the district court's underlying order because it was moot. The Court noted that the appeal did not meet the exception for mootness for issues that are capable of repetition but evade review, as the state officials could not show that similar future injunctions would evade review or that they would again be subject to the same action. View "Smith v. Edwards" on Justia Law

The United States Court of Appeals for the Fifth Circuit decided a case regarding the regulation of two tracts of land in Livingston Parish, Louisiana. The landowners, Garry L. Lewis and G. Lewis-Louisiana, L.L.C. (collectively referred to as "Lewis"), had been contending with the United States Army Corps of Engineers (USACE) for ten years over the agency's assertion of jurisdiction over alleged "wetlands" on their property under the Clean Water Act.The case had a complex history, involving two Supreme Court cases, three Approved Jurisdictional Determinations (AJDs), two federal court cases resulting in two remand orders, and two appeals to the Fifth Circuit. Ultimately, the Fifth Circuit held that the Supreme Court’s decision in Sackett v. EPA controlled the facts of this case and dictated that Lewis' property lacked "wetlands" that had "a continuous surface connection to bodies that are 'waters of the United States' in their own right," such that there was no clear demarcation between "waters" and wetlands. As a result, the property was not subject to federal jurisdiction.The court noted that Lewis' property, used primarily as a pine timber plantation, was composed of two approximately twenty-acre tracts of "grass-covered, majority dry fields, with gravel logging and timber roads on two sides of each tract." Despite this, the USACE had concluded after numerous site visits that certain percentages of these tracts contained jurisdictional wetlands, thereby restricting Lewis' development plans without a federal permit.The court rejected the government's arguments that the case was moot following the withdrawal of the 2020 AJD and that further remand was necessary for the USACE to reevaluate the jurisdictional issue. The court held that the voluntary cessation of the allegedly wrongful behavior did not moot the case as there was no reasonable expectation of non-recurrence, and remand was inappropriate as the facts and governing law made it clear that Lewis' property was not subject to federal Clean Water Act regulation.The court ultimately vacated the judgment of the district court and remanded the case with instructions to enter judgment in favor of Lewis, confirming that the tracts in question were not "waters of the United States" under the Sackett ruling. View "Lewis v. USA" on Justia Law

In this case, the United States Court of Appeals for the Fifth Circuit considered an appeal by Colony Insurance Company against First Mercury Insurance Company related to a settlement agreement for an underlying negligence case. Both companies had consecutively insured DL Phillips Construction, Inc. (DL Phillips) under commercial general liability insurance policies. After the settlement, Colony sued First Mercury, arguing that First Mercury needed to reimburse Colony for the full amount of its settlement contribution, as it contended that First Mercury's policies covered all damages at issue. The district court granted summary judgment in favor of First Mercury, prompting Colony's appeal.In the underlying negligence case, DL Phillips was hired to replace the roof of an outpatient clinic in Texas. Shortly after completion, the roof began leaking, causing damage over several months. The clinic's owner sued DL Phillips for various claims, including breach of contract and negligence. A verdict was entered against DL Phillips for over $3.7 million. Both Colony and First Mercury contributed to a settlement agreement, and then Colony sued First Mercury, arguing it was responsible for all the property damage at issue.The appellate court held that under the plain language of First Mercury's policies and relevant case law, First Mercury was only liable for damages that occurred during its policy period, not all damages resulting from the initial roof defect. The court also found that Colony failed to present sufficient evidence to create a genuine dispute of material fact about whether there was an unfair allocation of damages, which would be necessary for Colony's contribution and subrogation claims. As such, the court affirmed the district court's decision to grant summary judgment in favor of First Mercury and denied summary judgment for Colony. View "Colony Insurance Company v. First Mercury Insurance Company" on Justia Law

The United States Court of Appeals for the Fifth Circuit affirmed a lower court's decision to grant a preliminary injunction against a Texas state prosecutor, Lucas Babin, who had initiated criminal charges against Netflix for promoting child pornography through its film, Cuties. The court found that Babin had acted in bad faith, as he multiplied the initial indictment into four after Netflix asserted its First Amendment right, selectively presented evidence to the grand jury, and charged Netflix for a scene that involved an adult actress. The court rejected Babin's argument that the indictments were validated by grand juries, finding that Babin's selective presentation of evidence undermined the independence of the grand juries. The court also noted that Netflix had shown that the prosecution was likely a bad faith prosecution, which constituted an irreparable injury, and that an injunction protecting First Amendment rights was in the public interest. The court ruled that these factors justified the district court's decision not to abstain under the Younger doctrine, which generally requires federal courts to refrain from interfering in ongoing state proceedings. View "Netflix v. Babin" on Justia Law

In this consolidated appeal from the United States District Court for the Eastern District of Louisiana, the United States Court of Appeals for the Fifth Circuit ruled on a decade-long dispute between landowners Garry L. Lewis and G. Lewis-Louisiana, L.L.C. (together referred to as "Lewis") and the United States Army Corps of Engineers (USACE) over the federal jurisdiction of "wetlands" on their Louisiana property under the Clean Water Act (CWA). The case involved numerous Supreme Court cases, jurisdictional determinations, federal court cases, and appeals.Lewis's property was primarily used as a pine timber plantation. In 2013, Lewis requested a jurisdictional determination from the USACE to develop the property, which went unanswered until a formal request two years later. The USACE concluded in 2016 that portions of the property contained wetlands subject to CWA jurisdiction. Lewis appealed, leading to a reconsideration and a substantially unchanged jurisdictional determination in 2017. Lewis then filed suit in federal court, claiming that the Corps' action was arbitrary and capricious under the Administrative Procedure Act (APA). The district court found the administrative record insufficient to support the conclusion that wetlands on the property met the "adjacency" test or had a "significant nexus" to traditional navigable waters and remanded the case back to USACE for further review.On remand, USACE revised the data and applied a recently issued regulation. However, the revised determination nearly doubled the alleged wetlands on one of Lewis's property tracts. After another round of litigation and appeals, the case reached the Fifth Circuit, where Lewis argued that under no interpretation of the administrative facts could his property be regulated as "wetlands" subject to the CWA.The Fifth Circuit agreed with Lewis, drawing upon the Supreme Court's recent decision in Sackett v. EPA which held that the CWA only extends to wetlands with a continuous surface connection to bodies that are "waters of the United States" in their own right. The Fifth Circuit found that there was no such connection between any plausible wetlands on Lewis's property and a "relatively permanent body of water connected to traditional interstate navigable waters," and thus, there was no factual basis for federal Clean Water Act regulation of these tracts.The court also rejected the government's arguments that the appeal was moot due to the withdrawal of the 2020 jurisdictional determination, and that the case should be remanded to USACE for reevaluation. The court held that the agency's unilateral withdrawal of a final agency action did not render the case moot and that remand was not appropriate because there was no uncertainty about the outcome of the agency's proceedings on remand.Consequently, the Fifth Circuit vacated the judgment of the district court and remanded with instructions to enter judgment in favor of Lewis that the tracts in question are not "waters of the United States" under the Clean Water Act as interpreted by Sackett v. EPA. View "Lewis v. USA" on Justia Law

In 2020, Illumina, a for-profit corporation that manufactures and sells next-generation sequencing (NGS) platforms, which are crucial tools for DNA sequencing, entered into an agreement to acquire Grail, a company it had initially founded and then spun off as a separate entity in 2016. Grail specializes in developing multi-cancer early detection (MCED) tests, which are designed to identify various types of cancer from a single blood sample. Illumina's acquisition of Grail was seen as a significant step toward bringing Grail’s developed MCED test, Galleri, to market.However, the Federal Trade Commission (FTC) objected to the acquisition, arguing that it violated Section 7 of the Clayton Act, which prohibits mergers and acquisitions that may substantially lessen competition. The FTC contended that because all MCED tests, including those still in development, relied on Illumina’s NGS platforms, the merger would potentially give Illumina the ability and incentive to foreclose Grail’s rivals from the MCED test market.Illumina responded by creating a standardized supply contract, known as the "Open Offer," which guaranteed that it would provide its NGS platforms to all for-profit U.S. oncology customers at the same price and with the same access to services and products as Grail. Despite this, the FTC ordered the merger to be unwound.On appeal, the United States Court of Appeals for the Fifth Circuit found that the FTC had applied an erroneous legal standard in evaluating the impact of the Open Offer. The court ruled that the FTC should have considered the Open Offer at the liability stage of its analysis, rather than as a remedy following a finding of liability. Furthermore, the court determined that to rebut the FTC's prima facie case, Illumina was not required to show that the Open Offer would completely negate the anticompetitive effects of the merger, but rather that it would mitigate these effects to a degree that the merger was no longer likely to substantially lessen competition.The court concluded that substantial evidence supported the FTC’s conclusions regarding the likely substantial lessening of competition and the lack of cognizable efficiencies to rebut the anticompetitive effects of the merger. However, given its finding that the FTC had applied an incorrect standard in evaluating the Open Offer, the court vacated the FTC’s order and remanded the case for further consideration of the Open Offer's impact under the proper standard. View "Illumina v. FTC" on Justia Law

Craig Price, a Black man, filed a lawsuit against his former employer, Valvoline LLC, alleging that his employment was terminated due to his race and he was subjected to a hostile work environment. Valvoline operated on an attendance policy, and Price had been repeatedly warned about his absenteeism, with his employment eventually terminated after he missed a shift due to food poisoning. Price also alleged that discriminatory comments had been made by his supervisors. The United States Court of Appeals for the Fifth Circuit affirmed the district court's summary judgment in favor of Valvoline. The Appeals Court found that Price's employment was terminated due to his repeated absenteeism, not because of his race. Furthermore, the court concluded that the allegedly race-motivated comments were not objectively severe or pervasive enough to create a hostile work environment. The court also noted that Price could not demonstrate that the alleged harassment he experienced was frequent or that it interfered with his work performance. Therefore, Price's claims of race discrimination and a hostile work environment were rejected. View "Price v. Valvoline" on Justia Law