Take the Fifth

Designated for publication

• Continental Automotive Systems, Inc. v. Avanci, L.L.C., 20-11032, appeal from N.D. Tex.
  • Stewart, J. (Stewart, Ho, Engelhardt); Ho, J., constructively dissenting; antitrust law, standing
  • Vacating 12(b)(6) dismissal of automotive parts supplier’s antitrust claim against patent licensing agent for group of standard-essential patent holders of cellular-connectivity technologies, and remanding to district court with instructions to dismiss for lack of standing.
  • This suit involves the interplay of “fair, reasonable, and nondiscriminatory” (“FRAND”) rates for licensing of the standard-essential patents (“SEPs”) and the Master Licensing Management Agreement (“MLMA”) between the SEP patent-holders and the Avanci, the licensing agent, and whether the plaintiff parts supplier has an injury that can be reviewed and remedied. Continental claims it was unable to get FRAND rates from either the SEP holders or Avanci, since the MLMA only authorized Avanci to provide FRAND rates to the original car manufacturers (“OEMs”), which were downstream from suppliers like Continental. The defendants argued that the FRAND rates were available to Continental from the individual SEP holders, and also that Continental did not need a SEP license since its parts were incorporated into automobiles from the license-holding OEMs. Continental claimed that the refusal to directly sell it a license on FRAND terms was both a breach of contract and anticompetitive conduct in violation of the Sherman Act. The district court held that Continental had alleged one injury that imbued it with constitutional standing, but dismissed the Sherman Act claim for lack of antitrust standing and declined to exercise supplemental jurisdiction over the state-law claims.
  • The Court first held that Continental’s theory of injury that, if Avanci and the individual SEP holders procured non-FRAND rates, the royalty burden from those licenses could be passed on to Continental, was too potential and hypothetical to comprise an Article III-cognizable injury-in-fact, since it was “doubly speculative.”
  • The Court then held, in disagreement with the district court, that Continental had failed to plead an injury on its theory that the SEP holders had denied to provide it with a license on FRAND terms. This, held the Court, was not an allegation of a refusal to provide Continental with something to which it was entitled. The Court held that Continental “does not need SEP licenses from Defendants-Appellees to operate; Avanci and Patent-Holder Defendants license the OEMs that incorporate Continental’s products. No evidence suggests that Patent-Holder Defendants and SSOs intended to require redundant licensing of third parties up the chain, which is unnecessary to effectuate the purpose of the FRAND commitments and reduce patent hold-up.” The Court observed that either the OEMs or the standard-setting organizations (“SSOs”) theoretically could have standing to bring claims arising from the FRAND/MLMA interplay, but that up-stream suppliers such as Continental do not.
  • Though Judge Ho did not officially concur or dissent, by footnote the opinion noted he would have affirmed the dismissal for lack of antitrust standing. Technically, though the end-result would be the same as practical matter, this would be a dissent from the majority’s decision to vacate instead.

• U.S. v. Tarnawa, 20-40295, appeal from E.D. Tex.
  • Jones, J. (Jones, Haynes, Costa), criminal, sentencing
  • Affirming modification of defendant’s sentence to order him to pay half of any funds deposited into his inmate trust fund account toward his restitution obligation, which was ordered after the vacatur on a 2241 habeas application of an order to pay $30/month toward that restitution obligation. The sentencing court held that the vacatur of the initial payment plan was a material change in the defendant’s financial situation that justified a modification of the sentence.
  • The Court held that Fifth Circuit precedent establishes that a sentencing court’s modification of a restitution order under the Mandatory Victims Restitution Act does not require a certain set of findings to be made.

• Bell v. Eagle Mountain Saginaw Independent School District, 21-10504, appeal from N.D. Tex.
  • Costa, J. (King, Costa, Willett), copyright
  • Affirming dismissal of copyright-infringement claim by author of book against school that quoted a motivational passage from the book in tweets by the school’s color guard and softball team.
  • The Court held that a fair-use affirmative defense is cognizable at the 12(b)(6) stage. “While the fair use defense is usually teed up at summary judgment, we can resolve it on the pleadings if the complaint contains facts sufficient to evaluate each of the statutory factors. When discovery is needed to flesh out how these factors tilt, a ruling at the pleading stage is premature. But as with other affirmative defenses, if the complaint sets forth all the ingredients of a successful fair-use defense, discovery is unnecessary.” (Internal quotation marks and citation omitted).
  • The Court noted that “[t]he fair-use doctrine balances the ‘inherent tension’ between copyright’s interests in protecting author’s works and permitting others to reference them in cultural conversation.”
  • The Court held that the first fair-use factor tipped in the school district’s favor because its use was clearly non-commercial, as the only conceivable purpose from the tweets was to motivate the students. “The tweets attempted to motivate the student members to perform at their best, not to motivate donors to contribute to the programs. There is no logical theory for how tweeting Bell’s motivational message to inspire students would enhance the reputations of these programs, let alone how that might lead to some tangible benefit for the school district later on.” The Court also noted the school’s good faith, as once Bell complained about the tweets they were immediately taken down and the school instituted a new policy to ensure avoidance of infringement issues going forward.
  • On the second factor, “nature of the copyrighted work,” the Court held that Bell gets “a meager victory.” While the overall publication was a factual work, and despite that the tweeted passage consisted of “well-worn truisms” and that “[a]thletes will be familiar with them all,” the Court held that the tweeted passage was “somewhat creative.”
  • The Court held that the third factor, amount and substantiality of the portion used, was neutral. Although the tweeted passage was arguably the heart of the published work, the Court also noted that it was a passage that was freely available on the internet through Bell’s own dissemination of the passage.
  • The Court held as to the fourth factor, effect of the use, that “We do not see a plausible economic rationale to support Bell’s assertion that widespread tweeting of the WIN passage would undermine the value of his copyright. The tweets do not reproduce such a substantial portion of Winning Isn’t Normal as to make available a significantly competing substitute for the original work. If anything, the properly attributed quotation of a short passage from Winning Isn’t Normal might bolster interest in the book; it is free advertising.” (Internal quotation marks and citations omitted). The Court also held that Bell was unable to prove more than a theoretical market for the licensing of his passage, and that his aggressive litigation against infringers was not the same as a “traditional” or “reasonable” market.
  • The Court therefore held that the school’s tweets were fair use. It also held there was no abuse of discretion in the district court’s award of attorneys’ fees to the school district. “Bell is a serial litigant, who makes exorbitant demands for damages in hopes of extracting disproportionate settlements. This case is another in the line. The school shared a single page of Bell’s work with fewer than 1,000 online followers and immediately removed the posts upon request. Bell was unable to identify any actual financial injury associated with that use but brought suit anyway. Attorney’s fees were thus an appropriate deterrent, both with respect to Bell and other copyright holders who might consider a similar business model of litigation.”

• ACS Primary Care Physicians Southwest, P.A. v. UnitedHealthcare Insurance Co., 21-20168, appeal from S.D. Tex.
  • King, J. (King, Graves, Ho), insurance
  • Certifying to Texas Supreme Court question of whether Texas state law that requires health plan administrators to pay to emergency-care providers their usual and customary rates for emergency services provided to out-of-network plan enrollees gives those providers a private cause of action against the plan administrators.

• U.S. Navy Seals 1-26 v. Biden, 22-10077, appeal from N.D. Tex.
  • per curiam (Jones, Duncan, Engelhardt), COVID-19
  • Denying Administration’s motion for limited stay pending appellate review of preliminary injunction prohibiting Administration from enforcing vaccination mandate against 35 Navy Special Forces personnel who had sought religious exemptions. Administration had sought limited stay solely as to deployment of soldiers.
  • The Court first held that the suit presented a justiciable controversy under RFRA that was not barred by the Mindes abstention doctrine as to suits implicating military operations.
  • The Court then held that the Administration failed to show that it was likely to succeed on the merits of the service members’ claims under RFRA. “Plaintiffs have thoughtfully articulated their sincere religious objections to taking the vaccine itself. Accepting the vaccine would directly burden their respective faiths by forcing them to inject an unremovable substance at odds with their most profound convictions. This injury would outlast their military service, making the decision whether to acquiesce far more difficult than just choosing between their job(s) and their jab(s).” (Internal quotation marks and citation omitted). The Court rejected the Administration’s argument that any Plaintiff-specific interests outweighed the RFRA injury to the plaintiffs.

Unpublished

• U.S. v. Lopez, 18-10231, appeal from N.D. Tex.
  • per curiam (Jolly, Willett, Engelhardt), criminal, sentencing, Armed Career Criminal Act
  • Affirming 235-month sentence on conviction of possession of a firearm by a felon, on application of the ACCA.

• Howley v. Bankers Standard Insurance Co., 20-10940, appeal from N.D. Tex.
  • per curiam (Smith, Elrod, Oldham), insurance
  • Affirming 12(b)(6) dismissal of plaintiff’s claims against insurer under replacement-cost policy arising from storm damage to home.

• Higgins v. Navarrete, 20-20341, appeal from S.D. Tex.
  • per curiam (King, Graves, Ho), prisoner suit
  • Affirming in part, reversing in part, and remanding from dismissal of inmate’s sec. 1983 retaliation claim arising from process of requiring urine sample from inmate.

• U.S. v. Polanco, 20-20585, appeal from S.D. Tex.
  • per curiam (Barksdale, Costa, Engelhardt), criminal
  • Affirming threatening-a-federal-official conviction.

• Tahir v. Garland, 20-60096, petition for review of BIA order
  • per curiam (Stewart, Ho, Engelhardt), immigration
  • Denying Bangladeshi citizen’s petition for review of BIA order affirming IJ’s denial of application for asylum, withholding of removal, and protection under the Convention Against Torture.

• Santos-Lopez v. Garland, 20-60641, petition for review of BIA order
  • per curiam (King, Costa, Ho), immigration
  • Denying in part and dismissing in part Salvadoran citizen’s petition for review of BIA order dismissing appeal of IJ decision denying her applications for asylum, withholding of removal, and protection under the Convention Against Torture.

• Pavon-Polanco v. Garland, 20-60756, petition for review of BIA order
  • per curiam (Barksdale, Willett, Duncan), immigration
  • Denying Honduran citizen’s petition for review of BIA order dismissing her appeal of IJ order denying her application for asylum, withholding of removal, and protection under the Convention Against Torture.

• Cruz-Santos v. Garland, 20-60795, petition for review of BIA order
  • per curiam (Jolly, Willett, Ho), immigration
  • Denying Honduran citizen’s petition for review of BIA order denying her application for asylum, withholding of removal, and relief under the Convention Against Torture.

• Valencia-Marroqin v. Garland, 20-61064, petition for review of BIA order
  • per curiam (Higginbotham, Higginson, Duncan), immigration
  • Denying Salvadoran citizen’s petition for review of BIA order dismissing his appeal from an immigration judge’s denial as untimely of his motion to reopen proceedings and rescind his in absentia removal proceeding.

• Sealed Appellee v. Sealed Appellant, 21-10427, appeal from N.D. Tex.
  • per curiam (King, Graves, Ho), magistrate jurisdiction
  • Vacating civil commitment order and remanding to district court to determine issue of parties’ consent to magistrate adjudication.

• U.S. v. Cichon, 21-10534, appeal from N.D. Tex.
  • per curiam (Davis, Jones, Elrod), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Martinez-Tavares, 21-10770, appeal from N.D. Tex.
  • per curiam (Higginbotham, Higginson, Duncan), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Maldonado, 21-30188, appeal from W.D. La.
  • per curiam (Jolly, Willett, Ho), criminal, compassionate release
  • Affirming denial of motion for compassionate release.

• Bodine v. Louisiana, 21-30539, appeal from W.D. La.
  • per curiam (Smith, Higginson, Willett), habeas corpus
  • Dismissing appeal from denial of sec. 2254 petition for lack of jurisdiction.

• U.S. v. Orona, 21-40126, appeal from E.D. Tex.
  • per curiam (Wiener, Dennis, Haynes), criminal
  • Affirming conviction of conspiring to possess with the intent to distribute a controlled substance and conspiring to commit money laundering.

• U.S. v. Williams, 21-40272, appeal from E.D. Tex.
  • per curiam (Jolly, Willett, Engelhardt), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Rivera-Gaona, 21-40581, appeal from S.D. Tex.
  • per curiam (Higginbotham, Higginson, Duncan), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Robinson, 21-50119, appeal from W.D. Tex.
  • per curiam (Davis, Jones, Elrod), criminal, guilty plea
  • Affirming factual basis for guilty plea conviction of possession with intent to distribute 28 grams or more of cocaine base.

• U.S. v. Miller, 21-50510, appeal from W.D. Tex.
  • per curiam (King, Costa, Ho), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Hernandez, 21-50515, appeal from W.D. Tex.
  • per curiam (King, Costa, Ho), criminal, sentencing
  • Vacating 27-month sentence on conviction of transporting illegal aliens for financial gain, and remanding for resentencing.

• U.S. v. Guerra, 21-50612, appeal from W.D. Tex.
  • per curiam (King, Costa, Ho), criminal
  • Granting summary affirmance of conviction of possession of a firearm by a felon.

• U.S. v. Saavedra-Rico, 21-50633, appeal from W.D. Tex.
  • per curiam (Higginbotham, Higginson, Duncan), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Holt, 21-50635, appeal from W.D. Tex.
  • per curiam (Higginbotham, Higginson, Duncan), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Mata-Tarango, 21-50733, c/w 21-50755, appeal from W.D. Tex.
  • per curiam (Davis, Jones, Elrod), criminal, sentencing
  • Granting summary affirmance of convictions and sentence for illegal reentry and revocation of supervised release.

• U.S. v. Rojas-Leal, 21-50836, c/w U.S. v. Lorenzo-Lopez, 21-59843, appeal from W.D. Tex.
  • per curiam (Higginbotham, Higginson, Duncan), criminal, sentencing
  • Granting summary affirmance of conviction and sentence for illegal reentry.

• U.S. v. Montoya-Balderrama, 21-50840, c/w 21-50853, appeal from W.D. Tex.
  • per curiam (Davis, Jones, Elrod), criminal
  • Granting summary affirmance of convictions for illegal reentry and revocation of supervised release.

• U.S. v. Cervantes-Resendiz, 21-50860, appeal from W.D. Tex.
  • per curiam (Jolly, Willett, Ho), criminal, sentencing
  • Granting summary affirmance of sentence on conviction for illegal reentry.