7/18/08 Opinions - US 5th Cir.

The following published opinions were released by the U.S. Court of Appeals for the Fifth Circuit on July 18, 2008:

  • Louisiana v. Allstate Insurance Co. (Stewart, Owen, Southwick, JJ.; opinion by Stewart, J.; dissent by Southwick, J.) (appeal from E.D. La.). Affirming district court’s denial of motion to remand class action to state court after its removal pursuant to the Class Action Fairness Act (”CAFA”). The State of Louisiana, in its parens patriae status on behalf of Louisiana citizens, brought suit against numerous insurers alleging violations of Louisiana’s antitrust laws in the concerted use of the consulting strategies of one engineering company and certain ISO claims calculation software and formulas to systematically undervalue claims arising from Hurricanes Katrina and Rita. The insurers removed the action under CAFA, alleging that the claim, though labeled parens patriae, was actually a class action or mass action. The district court denied Louisiana’s motion to remand. The Fifth Circuit held that, while the state had the authority to bring a parens patriae action asserting antitrust claims, upon reviewing the complaint and piercing the pleadings here the real parties in interest were the individual policyholders rather than the state, and that the action was therefore actually a class action. The Fifth Circuit then held that, because the real parties in interest were the private individual policyholders, Louisiana had waived its Eleventh Amendment immunity and that CAFA’s application in this case did not implicate Louisiana’s sovereign immunity. Dissenting, Judge Southwick opined that the matter should be remanded to state court to determine first if the state has authority to seek the relief it prays for in the parens patriae context or if it must bring the suit under a class action statute. Only if the state court determined the latter, observed Judge Southwick, would the action be removable under CAFA and thereby impart jurisdiction in the federal courts.
  • U.S. v. Casper (Reavley, Smith, Dennis, JJ.; opinion by Smith, J.; concurring opinion by Dennis, J.) (appeal from N.D. Tex.). Affirming conviction and sentence for various drug possession and firearm offenses. The Fifth Circuit held that the district court did not abuse its discretion in denying the defendant’s motion to suppress evidence without a hearing because the defendant never alleged facts that would have cast doubt on the government’s argument that the evidence was seized during a search incident to arrest; that the government established reasonable suspicion for detention of the defendant based on a citizen tip where the police could identify the informant through caller ID; and that the district court did not commit plain error in sentencing the defendant where the sentence was within the Guidelines range. Specially concurring, Judge Dennis expressed that the majority should not have relied in its opinion on the police’s use of caller ID to establish identity and credibility of the informant because the telephone number signified an undisclosed location in a motel. Judge Dennis wrote that “unwarranted is the assumption in the majority opinion[] . . . that anonymous calls are now generally reliable because of the pervasiveness of caller identification technology. This assumption has not been demonstrated to be well founded, and if followed would drastically and unrealistically narrow the scope of anonymous tips that be should considered unreliable unless further corroborated.” Slip op. at 13. Judge Dennis found that other evidence in the record supported the fact-dependent finding of reliableness of the informant’s tip to support reasonable suspicion without announcing a rule of per se reasonableness due to called ID technology.
  • Medical Center Pharmacy v. Mukasey (Higginbotham, Davis, Smith, JJ.; opinion by Smith, J.) (appeal from W.D. Tex.). Vacating district court’s summary judgment that compounding existing approved drugs for individual patients by pharmacists is exempt from the approval process in the Food Drug and Cosmetic Act as amended. The Fifth Circuit held that compounded drugs are “new drugs” under the Act, but are neither uniformly subject to nor uniformly exempt from the Act’s approval requirements. Rather, the Fifth Circuit held that compounded drugs are subject to a limited exemption when they meet the requirements that the drug is compounded for an identifiable individual patient upon hte unsolicited prescription of a licensed physician.
  • Wright v. Harris County (Smith, Barksdale, Elrod, JJ.; opinion by Smith, J.) (appeal from S.D. Tex.). Affirming denial of challenge to peremptory juror strike. The Fifth Circuit held that the plaintiff waived his Batson claim by failing to challenge the reasons presented by the defendant for exercising its jury strike at the time it was made.
  • Ginter v. Belcher (Reavley, Smith, Dennis, JJ.; opinion by Reavley, J.; dissent by Dennis, J.) (appeal from M.D. La.). Reversing district court’s judgment that forum selection clause specifying suit be brought in state court was unenforceable. The Fifth Circuit held that the attorney defendant did not overreach in including in his engagement letter a forum selection clause specifying state court jurisdiction over any disputes arising from his representation of the plaintiffs. The Court then held that the forum selection clause did not violate public policy by limiting the attorney’s malpractice liability, because there was not an express and mandatory reduction of liability but only a possibility of a small percentage favorability for the attorney by invocation of the clause. Judge Dennis dissented on the basis that the forum selection clause was overreaching by the attorney in attempting to gain an advantage over his clients in representing them in adoption proceedings.

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  1. By Of hurricanes and insurers | bartlett-legal.com on August 28, 2008 at 9:36 am

    […] to the insurers. Of course, followers of the appellate courts already knew that, as evidenced here in Louisiana v. Allstate Insurance Co.; here and here in Landry v. Louisiana Citizens Property […]

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