Justia Business Law Opinion SummariesArticles Posted in US Court of Appeals for the Fifth Circuit
Gabriel Invst v. Texas Alcoholic
In this case involving a dispute related to Texas liquor laws, the court previously certified the following two questions to the Supreme Court of Texas:1.) Does Texas Alcoholic Beverage Code Section 22.16(f) “continue to exempt a public corporation if that corporation sells some or all its shares to a non-exempt corporation, and, if so,2.) Whether the exempt corporation can acquire additional package store permits.The Supreme Court of Texas affirmatively answered both questions, resolving the appeal. Thus, the court reversed the district court's judgment and remanded for further proceedings. View "Gabriel Invst v. Texas Alcoholic" on Justia Law
CANarchy Craft Brewery v. Texas Alcoholic
The Texas Legislature limited beer-to-go sales to brewers and manufacturers that produced no more than 225,000 barrels annually “at all premises [they] wholly or partly owned.” Tex. Alco. Bev. Code Ann. Sections 62.122(a) and 12.052(a). The Texas Alcoholic Beverage Commission (TABC) ordered CANarchy to cease and desist after it determined that CANarchy’s facilities collectively exceeded the 225,000-barrel limit. CANarchy complied with the order but then filed suit, seeking a declaratory judgment that the 225,000- barrel threshold did not apply to barrels produced at leased premises. The district court agreed with CANarchy that “premises wholly or partly owned” do not include leased premises and granted it summary judgment. The Fifth Circuit affirmed the district court’s order granting Plaintiff’s motion for a declaratory judgment. The court held that “premises wholly or partly owned” do not include leased premises and granted it summary judgment. The court wrote, “it is the Legislature’s prerogative to enact statutes; it is the judiciary’s responsibility to interpret those statutes according to the language the Legislature used, absent a context indicating a different meaning or the result of the plain meaning of the language yielding absurd or nonsensical results.” Here, the ordinary definition of “owned,” when applied to sections 12.052(a) and 62.122(a) of the Texas Alcoholic Beverage Code, establishes that the 225,000-barrel production threshold set in those statutes encompasses only barrels produced at premises owned by the brewer, either in whole or in part, and not at premises leased by the brewer. View "CANarchy Craft Brewery v. Texas Alcoholic" on Justia Law
Capio Funding v. Rural/Metro Oprt, et al
Plaintiff buys and collects on delinquent healthcare accounts. Defendant sells such accounts. Business between the two soured, and Plaintiff sued for breach of contract and tortious interference. The district court dismissed Plaintiff’s claims because it believed the disputed portion of the contract was indefinite and unenforceable. The Fifth Circuit reversed and remanded the district court’s dismissal of Plaintiff’s claims against Defendant. The court held that the term “additional Accounts” has enforceable meaning. And because the Forward Flow Amendment was binding, Plaintiff’s claims should not have been dismissed. The court reasoned that the crucial inquiry is whether the term “additional Accounts” rendered the Forward Flow Amendment unenforceable. The court held that first read in context, the term “additional Accounts” has enforceable meaning. Taken together, the plain meaning of the word “additional,” the contract’s clear architecture, and various settled principles of interpretation reveal that “additional Accounts” refers to all qualifying accounts that accrue quarterly. Second, none of Defendant’s counterarguments were persuasive to the court. Further, Defendant claimed damages cannot be calculated because, in its view, there is no way to determine the number of accounts they had to offer and Plaintiff was obligated to purchase. Here, Defendant partially performed in a manner consistent with its putative obligation under the Forward Flow Amendment. Such performance may make a contractual remedy appropriate even though uncertainty is not removed. View "Capio Funding v. Rural/Metro Oprt, et al" on Justia Law
Bank of Louisiana v. FDIC
The Bank of Louisiana (“BOL”) and two of its directors appeal the district court’s dismissal of their complaints against the Federal Deposit Insurance Corporation (FDIC). The district court ruled that the complaints rehashed allegations that it had repeatedly held it lacked jurisdiction to consider.On appeal, the Fifth Circuit affirmed the district court’s dismissal holding that preclusion principles bar relitigation of the same jurisdictional issue decided in a prior case. The court reasoned that BOL’s new complaints aim to relitigate the same jurisdictional issue decided previously. Once again, the BOL contendsed there is district court jurisdiction over its constitutional claims against the FDIC. That is the same issue the court decided against the BOL in the prior suits. The new complaints thus repeat rather than remedy the jurisdictional problem that warranted the earlier dismissals View "Bank of Louisiana v. FDIC" on Justia Law
Xiongen Jiao v. Ningbo Xu
After assignors and assignees of membership interests in Dongtai Investment Group filed suit against Dongtai's managing member, the district court granted injunctive and declaratory relief, ordering the managing member to turn over his remaining Dongtai membership units partially to satisfy the judgment.The Fifth Circuit affirmed and first concluded that it has jurisdiction to address the rulings challenged by the managing member in this case. In regard to the managing member's motion to dismiss, the court concluded that at least one group, if not both, have sufficient membership interest in Dongtai to confer standing to bring a derivative proceeding; the district court did not err in declining to dismiss plaintiffs' securities fraud claims; the district court properly denied the managing member's argument that plaintiffs did not satisfy the requisite heightened pleading standard; the district court properly overruled the managing member's contention that plaintiffs' securities fraud claims should be dismissed; the complaint lacks evidence that the membership units were purchased in the United States; and the managing member's contention that none of the securities fraud allegations specifically implicate LCL Company are simply untrue. The court also concluded that the district court did not abuse its discretion in granting a preliminary injunction where plaintiffs have established a substantial threat they would suffer irreparable injury if an injunction was not granted. Finally, the court discerned no error in the declaratory relief fashioned by the district court and the district court did not abuse its discretion in ordering the managing member to turn over his remaining membership interest in Dongtai. View "Xiongen Jiao v. Ningbo Xu" on Justia Law
Thomas v. Hughes
This case presents a coda to its companion appeal, No. 20-50671. The Fifth Circuit affirmed the district court's post-judgment order, as modified, charging defendant's membership interest in M. G. & Sons, a single-member LLC, and requiring both defendant and M. G. & Sons to obtain leave of court before transferring assets to third parties. The court stated that it is well established that courts have the power to enforce their judgments through injunctive relief. The court concluded that the district court properly exercised this power, in addition to charging defendant's interest in M. G. & Sons according to Texas law, by restricting Hughes from transferring assets to evade the district court's judgment. View "Thomas v. Hughes" on Justia Law
Thomas v. Hughes
The Fifth Circuit slightly modified the district court's final judgment to prevent the possibility of double recovery and otherwise affirmed the district court's final judgment, attorney's fee award, and denial of post-judgment relief on various grounds. The court concluded that the district court did not err in limiting defendant's testimony as it did; the evidence was sufficient for the jury to conclude that defendant and Performance Probiotics misappropriated trade secrets; defendant breached her fiduciary duty to PPI; defendant fraudulently transferred assets in violation of the Texas Uniform Fraudulent Transfer Act; and to support the jury's decision to pierce the corporate veils of PPI and Performance Probiotics.The court also concluded that the district court did not err by retaining jurisdiction over API or abuse its discretion either in denying defendant's motion for a new trial or in awarding attorney's fees and expenses. The court clarified that the district court's judgment could be read to allow for a duplicative recovery and thus modified the judgment affirmatively to state that plaintiffs may not recover the amount of the Comal County judgment twice. View "Thomas v. Hughes" on Justia Law
MDK Sociedad de Responsabilidad Limitada v. Proplant Inc.
MDK, a Bolivian entity, filed suit against Proplant, a Texas-based corporation under both breach of contract and tort theories. The Fifth Circuit affirmed the district court's grant of summary judgment in favor of Proplant, concluding that MDK did not meet the Federal Rule of Civil Procedure 56(d) standard for deferring summary judgment, and thus the district court did not err by ruling on Proplant's summary judgment motion before the parties had completed discovery. In this case, MDK's opening brief failed to adequately present its arguments that Proplant's summary judgment motion and the district court's summary judgment order were "legally deficient." Therefore, MDK has waived these issues.Finally, the court rejected MDK's contention that the district court erred in granting summary judgment on MDK's two breach of contract claims. In regard to the first claim, the court concluded that MDK has not pointed to any evidence suggesting that it did in fact execute the October Document. In regard to the second claim, the court concluded that MDK failed to meet its burden of demonstrating by competent evidence that there is a dispute of material fact as to whether YPFB awarded Proplant the O&M contract. View "MDK Sociedad de Responsabilidad Limitada v. Proplant Inc." on Justia Law
O’Brien’s Response Management, L.L.C. v. BP Exploration & Production, Inc.
BP retained the Responders (O’Brien’s and NRC) for nearly $2 billion to assist with the cleanup of the Deepwater Horizon oil spill. Thousands of the Responders' workers filed personal injury lawsuits against BP, which were consolidated and organized into “pleading bundles.” The B3 bundle included “all claims for personal injury and/or medical monitoring for exposure or other injury occurring after the explosion and fire of April 20, 2010.” In 2012, BP entered the “Medical Settlement” on the B3 claims with a defined settlement class. The opt-out deadline closed in October 2012. The Medical Settlement created a new type of claim for latent injuries, BackEnd Litigation Option (BELO) claims. After the settlement, plaintiffs could bring opt-out B3 claims if they did not participate in the settlement, and BELO claims if they were class members who alleged latent injuries and followed the approved process. Responders were aware of the settlement before the district court approved it but neither Responder had control over the negotiations, nor did either approve the settlement.In 2017, BP sought indemnification for 2,000 BELO claims by employees of the Responders. The Fifth Circuit held that BP was an additional insured up to the minimum amount required by its contract with O’Brien’s; the insurance policies maintained by O’Brien’s cannot be combined to satisfy the minimum amount. O’Brien’s is not required to indemnify BP because BP materially breached its indemnification provision with respect to the BELO claims. View "O'Brien's Response Management, L.L.C. v. BP Exploration & Production, Inc." on Justia Law
Vikas WSP, Ltd. v. Economy Mud Products Co.
This case concerns three orders purporting to enforce a settlement between the parties in a commercial dispute: (1) an order declaring that Vikas breached the settlement; (2) an order striking Vikas's pleadings as a sanction; and (3) a summary judgment that Vikas had procured the settlement by fraud, causing $40 million in damages.The Fifth Circuit concluded that the district court lacked subject matter jurisdiction to issue the summary judgment for fraud and thus the court vacated the order and denied as moot Vikas's related appeals. The court also vacated the sanctions order based on either lack of subject matter jurisdiction or an abuse of discretion standard. Finally, the court vacated the ruling that Vikas breached the settlement, concluding that the district judge ignored key provisions of the settlement and failed to support his judgment with relevant record evidence. Accordingly, the court remanded for further proceedings. View "Vikas WSP, Ltd. v. Economy Mud Products Co." on Justia Law