Take the Fifth

Designated for publication

• Mesquite Asset Recovery Group, L.L.C. v. City of Mesquite, 24-11025, appeal from N.D. Tex.
  • Higginson, J. (Higginson, Willett, Engelhardt), takings
  • Affirming dismissal of plaintiff’s inverse condemnation claim against City, dismissal of Declaratory Judgment Act claim, and remand of breach of contract and other claims to state court.
  • The plaintiffs, a group of developers, contracted with the City of Mesquite to carry out public improvement projects, including a costly bridge, with the expectation of reimbursement. The contracts included strict conditions: all necessary permits had to be obtained and inspections passed within five years, or both the agreements and reimbursement obligations would terminate. Initially, the developers were granted a variance exempting them from obtaining a costly floodplain permit. However, as the contracts neared expiration, the City reversed course, citing a later-passed ordinance, and refused to honor the exemption. Unable to meet the new requirement in time, the developers asked the City Council for an extension, which was denied. The City terminated the agreements, leaving the developers without reimbursement. They sued, alleging constitutional takings, violations of Texas statutes, and breach of contract, and sought compensation, damages, and declaratory relief.
  • The district court dismissed the federal takings claim, finding that the City had acted in its contractual, not sovereign, capacity. The court explained that disputes arising from government contracts sound in contract, not in constitutional takings law, and that the developers’ alleged injuries stemmed from unmet contractual conditions, not sovereign acts. Because the developers’ claims were tied to their agreements with the City, their remedy lay in contract law. The court also dismissed their federal declaratory judgment claim, holding that the issues overlapped with ongoing state-law claims—including breach of contract and Texas statutory claims—that were better resolved in state court. On appeal, the Fifth Circuit affirmed, agreeing that the developers had not plausibly alleged sovereign action and that the district court acted within its discretion in remanding state-law claims while declining to hear the federal declaratory judgment suit.

• Moats v. National Credit Union Administrative Board, 24-40259, appeal from S.D. Tex.
  • Wiener, J. (Wiener, Douglas, Ramirez), subject matter jurisdiction, administrative law
  • Affirming dismissal for lack of subject-matter jurisdiction plaintiff’s suit to enjoin administrative enforcement action.
  • The Fifth Circuit affirmed the district court’s dismissal of Jeffrey Moats’s lawsuit against the National Credit Union Administration Board (NCUA) for lack of subject matter jurisdiction. Moats, the longtime CEO of Edinburg Teachers Credit Union, was removed after the Texas Credit Union Department placed the institution into conservatorship and appointed the NCUA as conservator. After being terminated, Moats alleged that the NCUA improperly seized property and denied him benefits, prompting him to sue in state court. When the NCUA later initiated an administrative enforcement action against him, Moats turned to federal court, raising several constitutional claims and seeking to enjoin the proceeding. The district court, however, dismissed for lack of jurisdiction, citing 12 U.S.C. § 1786(k)(1), which bars courts from interfering with such enforcement actions.
  • On appeal, Moats argued that § 1786 does not explicitly preclude jurisdiction since it does not reference 28 U.S.C. § 1331 and that, if it did, the statute would be unconstitutional as applied. He relied on Supreme Court precedent, including Axon and Shalala, to argue for federal review of his constitutional claims. The Fifth Circuit disagreed, holding that the statute’s broad text—identical to language in 12 U.S.C. § 1818, previously ruled to preclude district court jurisdiction—bars district court interference. The court emphasized that Moats is not left without a remedy, as constitutional challenges can be reviewed on appeal from the agency proceeding. Rejecting Moats’s reliance on Shalala, the panel concluded that no “magic words” are required for Congress to strip jurisdiction and affirmed that the district court properly dismissed the case.

Unpublished decisions

• Hilton v. Rule, 25-10274, appeal from N.D. Tex.
  • per curiam (Barksdale, Richman, Duncan), habeas corpus
  • Affirming denial of sec. 2241 petition for lack of exhaustion.

• Leeper v. Blanche, 25-10405, appeal from N.D. Tex.
  • per curiam (Stewart, Willett, Wilson), employment discrimination
  • Dismissing as frivolous dismissal of employment discrimination claims.

• U.S. v. Bridges, 25-40078, appeal from S.D. Tex.
  • per curiam (King, Haynes, Ho), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Rodriguez, 24-50813, appeal from W.D. Tex.
  • per curiam (Smith, Higginson, Wilson), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.