Take the Fifth

Designated for publication

• U.S. v. Ryan, 23-30641, appeal from E.D. La.
  • Stewart, J. (Jones, Stewart, Ramirez) (oral argument), criminal, sufficiency of evidence, testimony, jury instruction
  • Affirming conviction of bank fraud, conspiracy to commit bank fraud, and making false entries in bank records.
  • A federal jury convicted Ashton J. Ryan, Jr.—former President/CEO of First NBC Bank and Chair of its Board—of conspiracy to commit bank fraud, bank fraud, and making false entries in bank records. The government proved that, over years, Ryan and confederates misrepresented borrowers’ creditworthiness and concealed how loan proceeds were used, inducing the Bank to issue loans to insolvent customers who then used new money to service overdrafts and past-due debts. First NBC, founded after Hurricane Katrina, failed in 2017, and the FDIC’s Deposit Insurance Fund absorbed roughly $996 million in losses. Following a 23-day trial in early 2023, the jury convicted Ryan on all counts (his co-defendant Beebe was acquitted); he received 170 months’ imprisonment and was subject to a restitution order of about $215 million. On appeal, Ryan challenged the sufficiency of the evidence, the jury instructions, the admission of lay and summary testimony, and the denial of his motion to dismiss based on the government’s search of his personal email.
  • The trial record detailed the Bank’s credit process (loan officers’ credit packages, risk ratings, and signatures from the officer, Chief Credit Officer Burnell, and Ryan), the Board’s and auditors’ reliance on internal information, and periodic FDIC examinations. Witnesses described a recurring month-end “scramble”: issuing new loans to borrowers in overdraft or past-due status to keep them off the reports presented to the Board—contrary to Bank policy, especially for non-creditworthy borrowers. Evidence showed Ryan abused his “incremental authority” to approve up to $1 million per borrower without committee review and, to justify that use, caused inflated risk ratings and misleading documentation. Ryan testified he engaged in good-faith “workout” lending and disclosed issues to oversight bodies, but the jury rejected his account.
  • Applying de novo review to preserved sufficiency claims and viewing the evidence in the light most favorable to the verdict, the court held a rational juror could find every element of conspiracy and bank fraud under 18 U.S.C. §§ 1349 and 1344. The government’s theory was that Ryan lied to obtain loan money—a traditional property interest—placing the Bank at risk of loss; it was not the “right-to-control” theory rejected in Ciminelli v. United States, nor a salary-deprivation theory like the Ninth Circuit addressed in Yates. Even if civil banking-policy violations formed part of the backdrop, the proof of intentional deception to procure loan funds was ample, and intent could be inferred from the coordinated conduct with borrowers and insiders, the concealment from the Board/auditors/examiners, and the systematic end-of-month practices.
  • On the false-entries counts under 18 U.S.C. § 1005, the court rejected Ryan’s reliance on Thompson (requiring literal falsity under § 1014) and found the evidence sufficient. Three counts involved affirmative lies in Change in Terms Authorizations for borrower Kenneth Charity—statements about a CPA “resigning due to workload” and check-box answers denying defaults or cash-flow issues that Ryan knew were untrue. Five counts involved Criticized Asset Action Plans for borrower Gary Gibbs; in context—where the purpose was to inform the Board about substandard loans—statements rating the credit a “5,” describing performance as “as agreed,” and status as “stable,” while omitting that new loan proceeds were being used to pay overdrafts and prior loans, rendered the entries literally false in context. Thompson recognizes that context can make a statement false; the jury could so find here.
  • The district court’s jury instructions tracked the Fifth Circuit Pattern Instructions and correctly stated the law on conspiracy, bank fraud, and § 1005. The court was not required to deliver Ryan’s additional Ciminelli-based “property” gloss or his narrative-style proposals aimed at “neutralizing” the government’s case; any arguable omission was harmless given the record. Likewise, admitting lay opinions from examiners, auditors, counsel, and bankers under Rule 701, and allowing summary charts and testimony under Rule 1006 in a voluminous, document-heavy fraud trial, fell within the court’s discretion; Ryan showed neither legal error nor substantial prejudice.
  • Finally, the court affirmed denial of Ryan’s motion to dismiss the indictment based on the government’s privilege-filter process for his Gmail data. While the screening was imperfect, it followed a filter-attorney protocol; there was no showing of “outrageous” misconduct that shocks the universal sense of justice, nor any “actual and substantial prejudice” from the process.

• Scroggins v. City of Shreveport, 24-30777, appeal from W.D. La.
  • per curiam (Smith, Dennis, Richman) (no oral argument), Dennis, J., dissenting; Title VII, employment discrimination, pro se
  • Affirming summary judgment dismissal of Title VII race and sex and retaliation claims.
  • The Fifth Circuit affirmed summary judgment for the City of Shreveport against pro se plaintiff Felicia Scroggins, who alleged race and sex discrimination and retaliation under Title VII. Scroggins argued that the district court erred by ruling before she secured new counsel and by failing to protect her as a pro se litigant, but she cited no valid supporting authority—several of her cited cases were fictitious—and thus forfeited her argument. On her retaliation claims, the court held she offered no competent summary-judgment evidence showing pretext under McDonnell Douglas v. Green, despite her assertions of retaliatory denial of grievances and reprimands. The district court had assumed her alleged actions were adverse but found no proof linking them to protected activity. As for discrimination, although she established a prima facie case, the City presented legitimate, nondiscriminatory reasons for its decisions that she failed to rebut. The court also rejected her claim that the district court misconstrued the EEOC right-to-sue letter, noting it did not negate her claims but properly applied the McDonnell Douglas framework.
  • Judge Dennis dissented, finding the record replete with factual disputes. Scroggins, a Black woman firefighter, produced evidence that the City violated its own bidding rules when it gave a non-paramedic position to a white male paramedic, Michael Hayes, and that its explanation—that Hayes was more qualified because he knew the “pre-plan” procedure—was false. She also showed that for a second promotion, the City hired another white male, Standridge, despite his failing test score and after altering scoring criteria, while denying her training that would have prepared her for the test. These facts created genuine disputes of pretext under McDonnell Douglas. The district court likewise erred by narrowly limiting her retaliation claim to post-October 2015 acts, ignoring the temporal proximity between her July 2015 EEOC charge and the subsequent job denials, altered testing, and training restrictions. The dissent further faulted the majority for invoking forfeiture sua sponte against Scroggins, a pro se litigant whose filings, liberally construed, adequately identified district-court error.

• Rose v. Aaron, 21-40718, appeal from E.D. Tex.
  • Richman, J. (Elrod, Richman, Oldham) (no oral argument), Oldham, J., dissenting in part; bankruptcy, fraud, breach of contract
  • Affirming in part and reversing in part district court’s reversal of bankruptcy court’s orders on claims arising from auction of horses.
  • Carol Rose, a prominent Quarter Horse breeder, entered 2013 agreements with Lori and Philip Aaron to lease her Gainesville Ranch (with a purchase option), receive consulting consideration in-kind, and have the Aarons bid on a defined “Blue List” of horses at Rose’s August dispersal auction. The Aarons bought most Blue List horses and some “Red List” horses, while other horses went to Elizabeth Weston/Equis Equine. Relations soured within weeks: the Aarons lagged on insurance/utilities and funding; Rose interfered with operations and secretly boarded other horses. On October 3, Rose sued the Aarons and locked them out; on October 17 she asserted a stable keeper’s lien for $101,948.50 even though only $40,691.18 related to the Aarons’ horse care. The Aarons paid the full sum and removed their horses.
  • Multiple suits followed. In 2017, Rose and her company filed bankruptcy, removing the pending state cases. After a nine-day trial, the bankruptcy court: (1) ruled for the Aarons on breach of contract (awarding $1,109,000 for improvements the Aarons made to their own Commerce Ranch) and on a Texas Theft Liability Act (TTLA) claim tied to the inflated lien demand; (2) awarded Jay McLaughlin (Rose’s trainer) $51,200 for diminished value of two fillies lacking breeder certificates; (3) ruled for the Weston Parties on several issues and declined to equitably subordinate the Weston claims to the Aarons’ claims. The district court reversed the Aarons’ wins and McLaughlin’s award, affirmed the Weston wins and the denial of equitable subordination, and vacated the Aarons’ fee award.
  • The Weston disputes then settled; the Weston cross-appeal was dismissed, and Rose’s appeal against the Weston rulings was also dismissed. Left for the Fifth Circuit were two Aaron issues (contract damages and the TTLA ruling) and McLaughlin’s claim. The court affirmed in part and reversed in part the district court, focusing on the bankruptcy court’s actions.
  • On the Aarons’ breach claim, the Fifth Circuit agreed with the district court that the $1,109,000 award cannot stand because it did not apply any cognizable Texas damages measure (restitution, reliance, or expectancy). The bankruptcy court awarded the cost of Commerce Ranch improvements without netting gains (e.g., ~$2.375 million in avoided Gainesville rent and other saved lease obligations) or quantifying other asserted harms with market evidence. Because the Aarons failed to pursue and prove a legally valid damages model or supply objective facts to value alleged losses (lost brand/consulting/location or Commerce Ranch opportunity costs), the court affirmed reversal and directed entry of judgment on that claim without a further evidentiary remand.
  • On the TTLA, the Fifth Circuit reinstated liability in principle: Rose’s demand that the Aarons pay beyond the valid lien amount, coupled with a threat to keep the horses until paid in full, was a threat “to commit an offense” (unlawful appropriation after the lien would extinguish at $40,691.18), satisfying “coercion” under the Penal Code incorporated by the TTLA. However, because the bankruptcy court made no explicit findings on inducement/causation or Rose’s “intent to deprive,” the Fifth Circuit remanded for additional fact finding on the existing record. As to McLaughlin, the court agreed his $51,200 proof of claim failed: his owner-style testimony named $500 post-injury value for each filly but lacked market-based support (prices, comparables, appraisals, etc.), rendering the valuation legally insufficient; that award was reversed. Finally, the court left the Aarons’ attorneys’ fees/costs to the bankruptcy court to reassess after the TTLA claim is resolved and prevailing-party status is determined.
  • Judge Oldham briefly dissented in part. While agreeing that Carol Rose violated the Texas Theft Liability Act by unlawfully withholding the Aarons’ horses, Judge Oldham disagreed with the majority’s handling of the other claims, arguing that the bankruptcy court’s findings were sufficient and that remand—not a take-nothing judgment—is the proper remedy.

Unpublished decisions

• Galynsky v. Thomas, 24-20559, appeal from S.D. Tex.
  • per curiam (Barksdale, Graves, Duncan) (no oral argument), sec. 1983
  • Affirming dismissal of claims arising from arrest for interference with public duties.

• U.S. v. Locket, 23-20584, appeal from S.D. Tex.
  • Higginson, J. (Southwick, Higginson, Wilson) (no oral argument), criminal
  • Affirming conviction for possession of a firearm by a felon.

• Nall v. Strain, 25-30212, appeal from E.D. La.
  • per curiam (Jones, Duncan, Douglas) (no oral argument), sec. 1983
  • Affirming dismissal of sec. 1983 claims.

• Vaughn v. American Commercial Barge Line, L.L.C., 23-30494, appeal from E.D. La.
  • Richman, J. (Richman, Oldham, Ramirez) (oral argument), maritime law, damages
  • Vacating district court’s judgment with respect to plaintiff’s future wage loss, affirming district court’s judgment with respect to past wage loss and denial of claim for punitive damages and attorney’s fees.

• CEATS, Inc. v. TicketNetwork, Inc., 24-40230, appeal from E.D. Tex.
  • per curiam (Elrod, Jones, Stewart) (oral argument), Jones, J., dissenting in part; sanctions, attorneys’ fees
  • Reversing in part and vacating in part sanction of case dismissal and increase in attorneys’ fee award after remand of prior appeal, and remanding for further proceedings.

• U.S. v. Gaitan, 24-40684, appeal from E.D. Tex.
  • per curiam (Jones, Richman, Ramirez) (no oral argument), criminal, sentence reduction
  • Affirming denial of motion for sentence reduction.

• Ambriz v. Hancock, 23-50582, appeal from W.D. Tex.
  • per curiam (Richman, Oldham, Ramirez) (no oral argument), takings, sovereign immunity
  • Affirming dismissal of takings claim on sovereign immunity basis, and remanding with instructions to dismiss without prejudice.