The following published opinions were released by the U.S. Court of Appeals for the Fifth Circuit on May 20, 2008:
- Southwestern Bell Telephone, LP v. City of Houston (Jolly, Barksdale, Benavides, JJ.; opinion by Barksdale, J.). Affirming the dismissal of AT&T’s Federal Telecommunications Act-based (”FTA”) claims against a City of Houston ordinance that required utilities to pay for the relocation of facilities and structures located in public rights-of-way subject to construction of public works projects. Pursuant to the ordinance, Houston required AT&T to relocate its telecommunications facilities from a right of way in preparation for construction of a public drainage project; AT&T complied, at a cost of $420,000.00, then brought a § 1983 suit to enforce § 253 of the FTA. The Fifth Circuit held that FTA § 253 does not unambiguously create a private right enforceable under § 1983, joining the Second, Ninth, and Tenth Circuits and contrary to holdings in the Sixth and Eleventh Circuits. The Fifth Circuit then held, because FTA § 253 expressly provides that the statute will not affect state or local governments’ ability to manage public rights of way, the FTA did not preempt Houston’s ordinance.
- Essinger v. Liberty Mutual Fire Insurance Co. (Davis, Southwick, Clark, JJ.;opinion by Southwick, J.). Affirming district court’s summary judgment in favor of insurer on insured’s claim for punitive damages for insurer’s failure to apply applicable Mississippi state law to calculation of benefits. The Fifth Circuit first observed that, although the plaintiffs had initially reserved their rights to seek both bad faith punitive damages and extra-contractual claims such as attorneys’ fees and litigation costs and had raised both claims in their complaint, because they had only continued to raise arguments defending their bad faith claims against the insurer’s motion for summary judgment they had effectively abandoned their extra-contractual claims. The Fifth Circuit then held that, because the insured only asked specific questions regarding coverage and benefits when making the claim, the insurer’s failure to apply Mississippi law related to “stacking” of uninsured motorist benefits did not amount to a “denial” of the full amount of the benefits and could not be the basis for a bad faith claim for ignorance of deeply ingrained Mississippi law. I.e., if the insured is not knowledgeable enough to initially ask for the full amount of benefits, then it is irrelevant for bad faith purposes that the insurer is also not knowledgeable of the law applying to its policies.
