Take the Fifth

Designated for publication

• Bufkin Enterprises, L.L.C. v. Indian Harbor Insurance Co., 23-30171, appeal from W.D. La.
  • per curiam (Willett, Wilson, Ramirez), insurance, arbitration
  • Reversing district court’s denial of motion to stay litigation and compel arbitration, and remanding with instructions to grant the motion.
  • The plaintiff insured had a uniform policy allocated separately across ten insurers, eight domestic and two foreign, which contained an arbitration provision. After Hurrican Laura and an unsatisfactory insurance resolution, the insured brought suit against the domestic insurers, then amended to add the foreign insurers and then voluntarily dismissed the foreign insurers with prejudice. The domestic insurers moved to compel arbitration under the FAA and the Convention on the Recognition and Enforcement of Arbitral Awards, but the district court denied that motion, holding that the Convention was inapplicable since the claims against the foreign insurers had been dismissed and the policy should be construed as ten separate contracts; the court also found that the FAA was reverse preempted under Louisiana law and the McCarran-Ferguson Act.
  • The Court held that equitable estoppel required compelling arbitration under the Convention, regardless whether there were one unitary contract with the foreign insurers as parties or ten separate contracts where the foreign insurers were not parties with the domestic insurers. “[E]quitable estoppel could, in either of two scenarios, allow a non-signatory to a contract with an arbitration clause to compel arbitration with a signatory,” including when “interdependent and concerted misconduct” is alleged, which the plaintiff’s allegations satisfy in this case. The Court concluded, “[I]ndulging Bufkin’s pleading-and-then-dismissing gamesmanship by denying arbitration turns on its head the axiom that ‘[t]he linchpin for equitable estoppel is equity—fairness.’ Further, and contrary to Bufkin’s contention, this conclusion does not run ‘against Louisiana public policy.’ The Convention is an exception to Louisiana’s general bar on policy terms that deprive its state courts of jurisdiction and venue in actions against insurers.” (Internal citations omitted).

• U.S. v. Texas, 24-50149, appeal from W.D. Tex.
  • Richman, C.J. (Richman, Oldham, Ramirez), Oldham, J., dissenting; immigration, preemption
  • Denying Texas’s motion to stay injunction pending appeal, regarding Texas S.B.4, which allows the State of Texas to enforce immigration violations.
  • The Court held that the U.S. had standing to challenge the law, even if not under the Supremacy Clause. “The United States has broad powers and rights granted by the Constitution and Congress regarding immigration matters. Texas cites to no constitutional or statutory provision that expressly or impliedly displaces an action arising in equity to enjoin executive action with regard to the matters at issue in this litigation. … Neither Texas nor the dissenting opinion53 has cited a case that offers any explanation as to why the United States would or should be barred from asserting an equitable right against state actors who allegedly are about to violate federal law. What logical basis is there for courts to say private parties and government agencies or actors may bring an action sounding in equity but not the United States?”
  • The Court then held that Texas had not made a strong showing of likelihood of success on the merits as to the U.S.’s claim of field preemption over immigration matters. “For nearly 150 years, the Supreme Court has held that the power to control immigration—the entry, admission, and removal of noncitizens—is exclusively a federal power. Despite this fundamental axiom, S. B. 4 creates separate, distinct state criminal offenses and related procedures regarding unauthorized entry of noncitizens into Texas from outside the country and their removal.” (Footnote omitted). After analyzing the several fundamental conflicts with federal immigration law by Texas S.B.4, the Court observed that “[t]his is likely quintessential field preemption.”
  • The Court also held that Texas has not made a strong showing that it was likely to prevail on the U.S.’s claim of conflict preemption. “First and foremost, Texas law punishes unlawful entry while under federal law, there are various avenues by which a noncitizen may ultimately be admitted or receive absolution even though he or she initially entered illegally. Second, relatedly, it does not appear there is any discretion given to state officials to decline to prosecute those who commit the offense set forth in Section 51.02. But even if state law afforded discretion, it would vest that discretion in a state official, not the United States Attorney General or another federal officer. That is in conflict with federal law.”
  • The Court also rejected Texas’s argument that the Constitution allowed it to respond to immigration as an invasion, invoking the State of War clause. “Constitutional text, structure, and history provide strong evidence that federal statutes addressing matters such as noncitizen entry and removal are still supreme even when the State War Clause has been triggered. Such statutes do not pertain to laying any duty of tonnage; keeping troops or ships of war in time of peace; or entering into any agreement or compact with another state or a foreign power. Texas has not identified any authority to support its proposition that the State War Clause allows it to enact and enforce state legislation regulating immigration otherwise preempted by federal law.”
  • The Court held that staying the injunction would injure the U.S. because “there is a high risk that enforcement of S.B.4 would cause international friction” and “risks taking the United States out of compliance with its treaty obligations.”
  • Judge Oldham dissented.

Unpublished

• U.S. v. Shed, 23-10620, appeal from N.D. Tex.
  • per curiam (Barksdale, Graves, Oldham), criminal, First Step Act
  • Affirming denial of motion for sentence reduction under First Step Act.

• Barton v. HNGH Turtle Creek, L.L.C., 23-10648, appeal from N.D. Tex.
  • per curiam (King, Jones, Oldham), bankruptcy
  • Dismissing for lack of jurisdiction appeal by non-party of dismissal upon settlement by the parties.

• Oglesby v. Medtronic, Inc., 23-50274, appeal from W.D. Tex.
  • per curiam (King, Ho, Engelhardt), product liability
  • Affirming summary judgment in favor of defendants in medical device product liability claim.

• U.S. v. Ferri, 23-50559, appeal from W.D. Tex.
  • per curiam (Smith, Higginson, Engelhardt), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Orozco-Rangel, 23-50591, appeal from W.D. Tex.
  • per curiam (Elrod, Oldham, Wilson), criminal, sentencing
  • Affirming 12-month sentence on revocation of supervised release.