February 9, 2022, opinions

Designated for publication

  • VSP Labs, Inc. v. Hillair Capital Investments, L.P., 20-10885, appeal from N.D. Tex.
    • Higginbotham, J. (Higginbotham, Willett, Duncan), bankruptcy
    • Affirming district court and bankruptcy court orders prohibiting one non-debtor from asserting claims against two other non-debtors.
    • VSP had entered into a technology-sharing agreement with Pro Fix Optix (“PFO”). VSP brought a breach of contract suit in California state court against PFO in 2013, and PFO filed counterclaims against VSP in that litigation. Trial was set to commence in March 2017, but in January 2017 PFO filed for bankruptcy in the Northern District of Texas, with the automatic stay stopping the proceeding of the California litigation. Shortly thereafter, the bankruptcy court approved an asset transfer from PFO to its largest pre-petition lender, Hillair, including transfer of PFO’s counterclaims against VSP in the California litigation. VSP, Hillair, and the trustee reached agreed-upon language for a Lift Stay Order entered by the bankruptcy court, allowing the California litigation to proceed, but holding that any money damages won by VSP in excess of any damages awarded to Hillair on the PFO counterclaims only being enforceable through a proof of claim filed in the bankruptcy, and prohibiting VSP from recovering against Hillair any money damages “or other amounts of any kind … under any circumstance on account of any claims that have been or could have been asserted in the California Action.” When VSP discovered in the course of the California litigation that Hillair had directed VSP to breach the technology-sharing agreement, it sought to amend its complaint in that suit add additional claims against Hillair. In a series of orders, the bankruptcy court granted an order prohibiting the assertion of those new claims, enforcing the Lift Stay Order and the automatic stay, and awarding sanctions against VSP. The district court affirmed those orders.
    • As to the bankruptcy court’s jurisdiction, the Court held that, while the state-law claims of the one non-debtor against another non-debtor were not “core” proceedings, “[t]he bankruptcy court had ‘related to’ jurisdiction as the outcome of VSP’s claims against Hillair could conceivably affect PFO’s estate because successful claims against Hillair could reduce the amount of damages for which PFO’s estate is found liable.” The Court then held that there was no clear error in the finding that VSP and Hillair had consented to the bankruptcy court’s exercise of related-to jurisdiction by agreeing to the language in the Lift Stay Order.
    • The Court then held that VSP waived the argument that the bankruptcy court should have abstained from hearing claims regarding a state-law issue where the federal court would not have had jurisdiction other than under 28 U.S.C. § 1334 by failing to raise the issue to the bankruptcy court and the district court.
    • The Court then held that the plain text of the Lift Stay Order, under ordinary contract-interpretation principles, “We must read the order as written, such that ‘any claims that have been or could have been asserted in the California Action’ includes the claims that VSP now seeks to include in its VSP’s proposed Second Amended Complaint.”
    • The Court held that there was no abuse of discretion in the bankruptcy court’s sanctions/attorneys’ fee order.
  • MDK Sodiedad De Responsabilidad Limitada v. Proplant Inc., 21-20207, appeal from S.D. Tex.
    • Higginson, J. (Jones, Higginson, Duncan), breach of contract, summary judgment
    • Affirming district court’s summary judgment in favor of defendant, prior to the close of discovery, on plaintiff’s breach of contract claims arising from parties’ operations and maintenance contract with Bolivia’s state-owned energy company.
    • The Court held that the district court did not abuse its discretion in denying the plaintiff’s request to defer ruling on summary judgment until the completion of discovery, even if the plaintiff’s cursory statement in its opposition to summary judgment could be construed as a Rule 56(d) request for additional discovery.
    • The Court declined to consider arguments by the plaintiff that were only adequately raised in its reply brief, where the “opening brief barely mentions these arguments and does not support them with any citations either to legal authorities or to the record.”
    • On the merits of the summary judgment, the Court held that the plaintiff had failed to meet its burden to show that one of the contracts at issue had ever been executed by the plaintiff. As to a second contract, the Court held there was no error by the district court in finding that a condition precedent had never been fulfilled.
  • Feds for Medical Freedom v. Biden, 22-40043, appeal from S.D. Tex.
    • per curiam (Smith, Higginson, Willett), Higginson, J., dissenting; COVID-19
    • Carrying with the case the Biden administration’s motion to stay a nationwide injunction against a COVID-19 vaccine mandate for federal employees pending appeal, but ordering expedited treatment of the matter and leaving open to the next randomly assigned oral argument panel the ability to rule immediately on the motion for stay or to await oral argument.
    • Judge Higginson dissented, and would grant the Government’s motion to stay the injunction pending appeal, noting that, “[t]hough a dozen district courts have rejected requests to enjoin this order, a single district judge in the Southern District of Texas, in a 20-page opinion, issued a nationwide preliminary injunction against the President’s exercise of authority over Article II employees.”
    • Judge Higginson found that the Government had presented at least three reasons it is likely to succeed on the merits. First, he found that the Government is likely to succeed on its argument that the district court lacks jurisdiction. “Congress requires covered federal employees to raise their workplace grievances through the administrative procedures set forth in the Civil Service Reform Act (CSRA). As the Supreme Court has explained, ‘[g]iven the painstaking detail with which the CSRA sets out the method for covered employees to obtain review of adverse employment actions, it is fairly discernible that Congress intended to deny such employees an additional avenue of review in district court. Elgin v. Dep’t of Treasury, 567 U.S. 1, 11-12 (2012).” Second, Judge Higginson found that “the Government is likely to succeed in showing that the President has authority to promulgate this executive order pertaining to the federal executive workforce,” that unlike OSHA administrators, the President is not an unelected bureaucrat without accountability to electors: “Federal employees that disagree with the content of Executive Order 14043 retain the right to claim an exemption, to leave the government’s employment, to collectively bargain, and to challenge the order through the CSRA. And, of course, any American that disagrees with the content of the order has the right to vote the President out of office.” Third, Judge Higginson found that the plaintiffs were unlikely to meet the standard for an injunction; he held that there was no irreparable harm, because even if employees lost their jobs in the interim of the litigation, they were entitled to reinstatement and backpay awards.

Unpublished

  • U.S. v. Llanez, 20-50999, appeal from W.D. Tex.
    • per curiam (Wiener, Dennis, Haynes), criminal
    • Granting Anders motion to withdraw, and dismissing appeal.
  • Munoz v. Garland, 20-60484, petition for review of BIA order
    • per curiam (Jolly, Willett, Engelhardt), immigration
    • Denying petition for review of BIA order affirming the decision of the immigration judge (IJ) denying his motion to reopen and rescind his in absentia removal order.
    • Also issuing warning to petitioner’s counsel that future frivolous filings could result in sanctions, after noting that “the required statement of the standard of review in the petitioner’s brief was limited to one issue and was incorrect[, and that] [t]he brief also lacked an adequate statement of the issues, statement of the case, or summary of the argument.”
  • U.S. v. Hardy, 20-60859, c/w 21-60280, appeal from S.D. Miss.
    • per curiam (Owen, Clement, Engelhardt), criminal, compassionate release
    • Vacating district court’s denial of motion for compassionate release and denial of motion to reconsider, and remanding for consideration in light of United States v. Shkambi.
  • Migdon v. 171 Holdings, L.L.C., 21-30411, appeal from W.D. La.
    • per curiam (Smith, Costa, Wilson), Title VII
    • Dismissing appeal of dismissal of Title VII claims for lack of appellate jurisdiction because other claims in the case remain unresolved.
  • U.S. v. Salazar-Figueroa, 21-40476, appeal from S.D. Tex.
    • per curiam (King, Costa, Ho), criminal, sentencing
    • Affirming 60-month sentence on conviction of possessing with intent to distribute 58.9 kilograms of cocaine.