Take the Fifth

Designated for publication

• Canero G&P, LLC v. SN EF Maverick, LLC, 24-20207, appeal from S.D. Tex.
  • Jones, J. (King, Jones, Oldham) (oral argument), bankruptcy, jurisdiction, breach of contract
  • Reversing bankruptcy court’s dismissal of breach of contract action, and remanding to bankruptcy court with instructions to remand to state court.
  • The Fifth Circuit reverses a bankruptcy court’s Rule 12(c) dismissal and a district court affirmance, holding the bankruptcy court lacked post-confirmation “related-to” jurisdiction over Carnero’s state-law contract claims against the reorganized debtor (Mesquite, f/k/a Sanchez Energy) and non-debtor counterparties. Although Sanchez’s Chapter 11 plan was confirmed on April 30, 2020, Carnero’s claims arose some eighteen months later, after Mesquite negotiated a comprehensive, post-confirmation midstream restructuring (the MSA and related agreements) that allegedly conflicted with Carnero’s prepetition “backup” midstream agreement that had been expressly assumed. Under Craig’s Stores and GenOn, post-confirmation jurisdiction exists only for disputes that pertain to the plan’s execution or implementation; few disputes between non-debtors qualify. This one did not.
  • The court recounts the backdrop: Sanchez acquired the Comanche Field assets and operated under costly pre-existing midstream commitments. In Chapter 11, Sanchez scheduled the Carnero Agreement for assumption and aimed to reject other midstream contracts, even entering a Rule 9019-approved settlement with Carnero premised on successful rejections. When the bankruptcy court issued partial rejection orders disabling that strategy, Mesquite terminated its Carnero settlement and later struck the MSA and a Midstream Restructuring Agreement with the “Oxy Adversary” parties, paying Springfield $50 million while securing forward-looking concessions. On December 21, 2021, the parties presented only a stipulation of dismissal and a ministerial assumptions/rejections list; the court did not review or approve the MSA’s substance.
  • Jurisdiction failed because the MSA suite was not an “Executory Contract” under the Plan or § 365. The Plan’s definition incorporates the Code’s concept of executory contracts—prepetition agreements with material performance due on both sides that, if assumed, are taken cum onere. The MSA and its interlocking documents were negotiated and executed well after confirmation, included new agreements and non-debtor arrangements, and “assumed as amended” prepetition contracts only as components of a wholesale, integrated revision; they therefore fell outside § 365. The Plan’s Art. V.F language covering modifications “that in any manner affect” an assumed contract did not transform these post-confirmation, global restructurings into executory contracts—especially given the provision’s temporal clause (“executed … during the Chapter 11 Cases”) and the noscitur a sociis reading that limits “other agreements” to subsidiary changes within a principal contract.
  • Nor was Carnero barred by the Plan or litigation conduct. Carnero had no reason—or legal obligation—to object at confirmation to the debtor’s assumption of the Carnero Agreement (which favored it) or to proposed rejections of others’ contracts (which also favored it), and the Plan’s objection deadlines addressed proposed assumptions with that counterparty, not future, unknown restructurings. The Plan and Confirmation Order explicitly allowed post-effective-date settlements and contract actions without court supervision or Rule 9019 notice, so Carnero’s silence at the December 21, 2021 hearing—noticed only two hours in advance—did not waive later state-law claims; the bankruptcy court’s orders there were ministerial Rule 41 dismissals limited to the settling parties and did not “approve” the MSA. Because the post-confirmation dispute among largely non-debtors did not pertain to executing or implementing the plan, the bankruptcy court lacked jurisdiction. The Fifth Circuit reverses and remands with instructions to remand the case to state court.

• U.S. v. Limon, 23-20389, c/w 23-20609, appeal from S.D. Tex.
  • Higginson, J. (Higginson, Willett, Engelhardt) (oral argument withdrawn), criminal, sentencing, restitution
  • Affirming 480-month sentence on conviction of sex trafficking of a minor, but remanding to have written judgment comport with orally pronounced sentence terms.
  • Limon was convicted by a jury in the Southern District of Texas for sex-trafficking a minor in violation of 18 U.S.C. § 1591(a),(b),(c). The victim (15 at the time) ran away and stayed with Limon (who she knew as “Ace”); despite knowing her age, he supplied her with drugs, pressured her into prostitution, arranged encounters, received the proceeds, used a knife against her, and monitored her phone use. The district court’s presentence report calculated a Guidelines offense level of 43, criminal history category VI, yielding a range of life imprisonment under the Guidelines (with a statutory minimum of 15 years). The court imposed a sentence of 480 months (40 years) imprisonment followed by ten years of supervised release and later ordered restitution.
  • On appeal, Limon raised four sentencing challenges: (1) that the court should have struck portions of the victim’s-impact statement sua sponte as unduly inflammatory; (2) that the district court exceeded its authority in ordering $210 in restitution for the mother’s lost wages; (3) that the court likewise erred in ordering $500 in restitution for hoodies the mother bought for the victim; and (4) that there was a clerical error in the written judgment (the monthly restitution installments were mis-stated). The Court rejected the first claim under plain-error review, finding no binding precedent that the challenged victim-impact comments required sua sponte striking and no showing of substantial prejudice.
  • Turning to restitution under § 1593 (which incorporates § 2259(c)(2)), the Court held: the mother qualifies as a “victim” under § 1593(c) and thus may recover her own losses if proximately caused by the offense. The $210 in lost wages was recoverable because it was incurred as a proximate result of the trafficking and falls within the statutory definition of “full amount of the victim’s losses.” As for the $500 hoodies purchase, the Court held that the statute does not require medical necessity and that “any other relevant losses” incurred as a proximate result are encompassed, so the district court did not exceed its authority in ordering it. Finally, the Court agreed there is a clerical error in the written amended judgment (the installment amount is inconsistent with the oral pronouncement) and remanded solely to correct the error under Fed. R. Crim. P. 36; the sentence as imposed is affirmed.

• Bommarito v. Belle Chasse Marine Transportation, LLC, 22-30382, appeal from E.D. La.
  • Richman, J. (Richman, Haynes, Graves) (oral argument), Haynes, J., dissenting in part, maritime law
  • Reversing damages award in favor of plaintiff survivors of maritime worker who overdosed on non-prescribed painkillers after work accident, on basis of intervening cause, and remanding for further proceedings.
  • The Fifth Circuit case arose from the death of Bosit Bommarito, a welder employed by Belle Chasse Land Transportation, Inc. (“Land”), which built launch sites for its parent company, Belle Chasse Marine Transportation, LLC (“Marine”). While working on Marine’s OC160 crane barge, Bommarito was struck and injured by a defective hook lacking the safety latch required by OSHA and industry standards. The district court found that the hook—designed and fabricated by Land employees—was an appurtenance of the vessel, making Marine and Land liable under the Longshore and Harbor Workers’ Compensation Act (LHWCA). Bommarito suffered severe injuries, underwent multiple surgeries, and months later died of a fentanyl-Xylazine overdose, which his family alleged stemmed from his pain and injuries. After a bench trial, the district court held Belle Chasse liable for vessel negligence and awarded $575,668.09 in damages to Bommarito’s family.
  • On appeal, the Fifth Circuit first addressed whether federal admiralty jurisdiction existed under the Admiralty Extension Act (AEA). It held that the defective hook qualified as an “appurtenance” of the vessel even though it had been fabricated by Land employees, because it was part of the rigging attached to the crane and ordinarily stored aboard the barge. The court found no clear error in the district court’s conclusion that the defective hook—lacking a safety latch—was both the but-for and proximate cause of Bommarito’s injuries, satisfying the AEA’s location and connection tests. The court also upheld the district court’s finding that Land and Marine functioned as a single fused enterprise under federal maritime veil-piercing standards, given their shared officers, insurance, finances, and operations, meaning that Marine could be held responsible for the negligence of its subsidiary.
  • However, the Fifth Circuit reversed the district court’s damages award for Bommarito’s death. It ruled that his fatal fentanyl-Xylazine overdose was a superseding cause that broke the chain of proximate causation under admiralty law. Although Belle Chasse’s negligence had caused Bommarito’s work-related injuries, the court held it was not reasonably foreseeable that he would later ingest illegal street fentanyl mixed with a veterinary tranquilizer and die from it. As a result, Belle Chasse was not liable for Bommarito’s death, and his mother could not recover loss-of-consortium damages. The appellate court reversed the wrongful-death and consortium awards and remanded for further proceedings consistent with its opinion.

• Sims Agency, LLC. v. GEICO, 25-60226, appeal from S.D. Miss.
  • per curiam (Davis, Jones, Ho) (no oral argument), breach of contract
  • Affirming dismissal of plaintiff’s claims of breach of agency contract.
  • Sims entered into a captive-agent agreement with GEICO under a 2020 contract which provided for commissions for new business, reissues and renewals of policies. The agreement included a survival clause that “those provisions … that logically should survive its termination … will do so,” but did not explicitly provide that Sims would receive renewal commissions after the agency relationship was terminated. Effective August 13, 2021, GEICO terminated the agency relationship, and thereafter the policyholders who originally purchased via Sims renewed directly with GEICO. Sims sued for approximately $1.9 million in post-termination renewal commissions. The district court granted summary judgment for GEICO, applying Maryland law (the choice-of-law clause) and concluding that under Maryland law an agent has no right to renewal commissions after termination unless the contract expressly grants them. Because the 2020 Agreement lacked such an express post‐termination renewal provision, Sims had no contractual claim.
  • In the alternative, Sims argued unjust enrichment. The Fifth Circuit affirmed rejection of that claim as well, noting that Maryland law forecloses unjust enrichment claims when the parties have an express contract covering the dispute—and here the 2020 contract addressed termination rights (e.g., GEICO’s withholding of the final commission check for six months) and thus “fully addressed” termination. The court found no gap or omission in the contract that would allow an unjust enrichment claim, and Sims had not shown that GEICO’s retention of renewal commissions was “unjust” under Maryland law. Accordingly, the Court affirmed the district court’s summary-judgment dismissal of Sims’s claims.

Unpublished decisions

• U.S. v. Guy, 25-10239, appeal from N.D. Tex.
  • per curiam (Jones, Duncan, Douglas) (no oral argument), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Barrett, 25-10446, appeal from N.D. Tex.
  • per curiam (Higginbotham, Engelhardt, Ramirez) (no oral argument), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Rincones, 25-10577, appeal from N.D. Tex.
  • per curiam (Stewart, Graves, Oldham) (no oral argument), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Floyd, 24-10690, appeal from N.D. Tex.
  • per curiam (Davis, Wilson, Douglas) (no oral argument), criminal, guilty plea
  • Affirming guilty-plea conviction of aiding and assisting in the preparation and presentation of false tax returns.

• U.S. v. Murrell, 25-10852, appeal from N.D. Tex.
  • per curiam (Graves, Ho, Douglas) (no oral argument), criminal, compassionate release
  • Dismissing as frivolous appeal from denial of motion for compassionate release.

• Hall v. Experian Information Solutions, Inc., 25-20068, appeal from S.D. Tex.
  • per curiam (Dennis, Engelhardt, Wilson) (no oral argument), Fair Debt Collections Protection Act, Fair Credit Reporting Act
  • Affirming dismissal of plaintiff’s claims.

• Alford v. Texas Board of Law Examiners, 25-20072, appeal from S.D. Tex.
  • per curiam (Richman, Southwick, Willett) (no oral argument), sec. 1983, sovereign immunity
  • Affirming dismissal of plaintiff’s constitutional claims after he failed the Texas bar exam five times, modified to be a dismissal without prejudice.

• U.S. v. Moore, 24-20572, appeal from S.D. Tex.
  • per curiam (Higginbotham, Engelhardt, Ramirez) (no oral argument), criminal, sentencing
  • Affirming sentence on conviction of possession of a firearm by a felon.

• U.S. v. Willridge, 25-30059, appeal from W.D. La.
  • per curiam (Davis, Jones, Ho) (no oral argument), criminal, sentencing
  • Affirming sentence on conviction of possession of a firearm in furtherance of a drug trafficking crime.

• Miller v. Stuart, 25-30190, appeal from E.D. La.
  • per curiam (Barksdale, Willett, Duncan) (no oral argument), breach of contract
  • Affirming dismissal of claims arising from car loan.

• Sibley v. Dick, 25-30209, appeal from M.D. La.
  • per curiam (Wiener, Engelhardt, Oldham) (no oral argument), administrative law
  • Affirming dismissal of challenge to COVID-19-related orders.

• Thomas v. Parker, 24-30610, appeal from W.D. La.
  • per curiam (Barksdale, Willett, Duncan) (no oral argument), sec. 1983
  • Affirming dismissal of malicious prosecution claims.

• Brown v. Carrington, 25-40099, appeal from S.D. Tex.
  • per curiam (Barksdale, Willett, Duncan) (no oral argument), property rights
  • Affirming dismissal of trespass-to-try-title action.

• U.S. v. Dubon-Mejia, 25-50258, appeal from W.D. Tex.
  • per curiam (King, Haynes, Ho) (no oral argument), criminal, sentencing
  • Affirming 12-month sentence on conviction of illegal reentry.

• U.S. v. McDougal, 22-50923, appeal from W.D. Tex.
  • per curiam (Richman, Southwick, Willett) (no oral argument), criminal
  • Affirming conviction of federal firearms charge.