Take the Fifth

Designated for publication

• IFG Port Holdings, L.L.C. v. Lake Charles Harbor & Terminal District, 24-30552, appeal from W.D. La.
  • Graves, J. (Stewart, Graves, Oldham) (oral argument), Oldham, J., dissenting; magistrate referral, recusal
  • Affirming vacatur of referral to magistrate for trial of contractual dispute between port and wharf tenant after trial had already resulted in verdict for plaintiff tenant company.
  • IFG Port Holdings sued the Lake Charles Harbor & Terminal District (the Port) over a contractual dispute about who was responsible for securing dredging permits for a ship channel. The parties consented to a bench trial before U.S. Magistrate Judge Kathleen Kay, who awarded IFG nearly $125 million. After judgment, the Port discovered that Judge Kay and IFG’s lead trial counsel, William Monk, had been close family friends for nearly forty years—a relationship Judge Kay never fully disclosed. Her only disclosure was that Monk’s daughter was her law clerk and would be screened from the case. On remand from a prior Fifth Circuit panel, the district court held a three-day evidentiary hearing, found the friendship was deep and largely undisclosed, and vacated the magistrate judge referral.
  • At issue on appeal was (1) whether a party’s consent to magistrate judge jurisdiction must be based on actual knowledge of the magistrate’s potential conflicts, or whether constructive knowledge suffices to sustain that consent. (2) Whether the district court abused its discretion in vacating the referral under 28 U.S.C. § 636(c)(4) and the Carter factors.
  • Consent to magistrate judge jurisdiction waives the constitutional right to Article III adjudication and must therefore be “knowing, voluntary, and intelligent”—the same standard applied to guilty pleas and jury-trial waivers. The court held that a constructive knowledge standard is incompatible with this framework because it “presumes a waiver without full understanding” and “presumes waiver in a doubtful situation,” inverting the principle that “courts should indulge every reasonable presumption against waiver.”
  • The court rejected IFG’s analogies to judicial recusal, juror disqualification, and arbitration, reasoning that those contexts concern forfeitures of statutory rights, not waivers of constitutional rights. As the majority put it: “Without good reason, we will not adopt a standard that requires a party to ‘pore through [a] judge’s private affairs,’ to prevent a waiver of a constitutional right.”
  • On the facts, the court found no clear error in the district court’s determination that the Monk-Kay friendship was “close, multifaceted, and personal spanning nearly forty years,” that Judge Kay disclosed only her employment of Monk’s daughter, and that the Port did not discover the friendship’s full extent until after judgment. The court concluded: “Judge Kay’s actions raise serious concerns about the fairness of her proceedings. Her unusually harsh order, coupled with the windfall verdict, exacerbates this impression.”
  • Judge Oldham dissented. He characterized the Port’s post-trial effort as “a years-long—and now successful—scheme by the loser of that trial to undo a large, adverse judgment by Facebook-stalking a jurist.” He argued the relationships at issue were ordinary small-town bench-and-bar connections, noting that “attending a few group meals and social events, exchanging friendly text messages, and the like over the course of a few decades is ordinary—not extraordinary.”
  • On the legal standard, Judge Oldham contended that the statutory text of § 636(c)(4) requires “extraordinary circumstances,” which under Supreme Court precedent in BLOM Bank demands that a movant be “faultless” and exercise more than ordinary diligence—a standard incompatible with the majority’s actual-knowledge rule. He warned that the actual-knowledge standard creates perverse incentives: “Usually, the story of the ostrich burying its head in the sand is a cautionary tale. But it turns up gold under the actual knowledge standard.”
  • Judge Oldham’s dissent warned of sweeping consequences for magistrate and bankruptcy adjudications nationwide, arguing that “it is hard to imagine how any magistrate or bankruptcy judge adjudication could survive the standard set out in today’s opinion.” He posed a series of unanswered practical questions about how the new standard would work—asking whether actual knowledge must be proven by “a declaration? An affidavit? Advice of counsel? Audio? Video? Blood?”—and urged adoption of a constructive knowledge standard instead

Unpublished decision

• United States v. Johnson, 25-10964, appeal from N.D. Tex.
  • per curiam (Willett, Duncan, Engelhardt) (no oral argument), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• W.H., by and through his next friend, Larry G. v. Fort Bend Independent School District, No. 25-20361, appeal from S.D. Tex.
  • per curiam (Jones, Southwick, Willett) (oral argument), Individuals with Disabilities Education Act
  • Affirming judgment for school district as to alternative placement for dyslexic student.
  • The case concerned whether a school district violated the Individuals with Disabilities Education Act (IDEA) by proposing to move a student with dyslexia from a general education classroom to a separate setting for English and math. The student had received extensive accommodations and earned excellent grades, but objective data and teacher testimony indicated his actual comprehension did not match those grades. A Special Education Hearing Officer upheld the separate placement for math but not English; the district court upheld placement for both subjects.
  • The Fifth Circuit affirmed the district court, deferring to the school district’s determination that the student could not “grasp the essential elements of the regular education curriculum” in math and English even with accommodations, and that the separate-classroom placement was appropriate under the IDEA’s mainstreaming requirements and the Daniel R.R. framework. The court emphasized that decisions of school administrators are entitled to special weight and that the IDEA creates a presumption in favor of the school system’s educational plan.

• United States v. Turner, 25-30490, appeal from E.D. La.
  • per curiam (Jones, Southwick, Willett) (no oral argument), criminal, sentencing
  • Vacating judgment to extent that oral sentence did not conform to written judgment as to supervised release conditions, but affirming in all other respects.
  • Turner pleaded guilty to possessing with intent to distribute fentanyl and cocaine hydrochloride, possessing a firearm in furtherance of a drug-trafficking crime, and being a felon in possession of a firearm. The oral sentence required participation in a substance-abuse program only upon a failed urinalysis, but the written judgment omitted that precondition.
  • The court vacated the judgment only to the extent it omitted the precondition of a failed urinalysis, otherwise affirmed, and remanded for entry of an amended written judgment conforming to the oral pronouncement—applying the rule that the oral pronouncement controls where it conflicts with the written judgment.

• Detiege v. Jackson, 25-30514, appeal from W.D. La.
  • per curiam (Haynes, Graves; decided by quorum) (oral argument); First Amendment
  • Affirming summary judgment for defendant state senator on plaintiffs’ claims that she violated their First Amendment rights by blocking them on Twitter.
  • Two individuals sued Louisiana State Senator Katrina R. Jackson under 42 U.S.C. § 1983, alleging she violated their First Amendment rights by blocking them on Twitter. The central question was whether Jackson’s blocking constituted state action under the Supreme Court’s test in Lindke v. Freed, 601 U.S. 187 (2024), which requires that a public official (1) possessed actual authority to speak on the state’s behalf and (2) purported to exercise that authority on social media. Sherman’s claim was dismissed because Jackson had unblocked him and he lacked standing; the court addressed Detiege’s claim on the merits.
  • The court affirmed summary judgment for Jackson, concluding that Detiege failed at Lindke‘s first step. The plaintiffs cited no written law granting an individual state senator authority to speak on behalf of the state when engaging the public on legislative issues, nor did they identify any persistent practice carrying the force of law. The court noted that a legislator’s authority to speak on behalf of the state is not coextensive with the scope of her official duties.

• United States v. Lyons, 25-30647, appeal from W.D. La.
  • per curiam (Haynes, Graves, Ramirez) (no oral argument), criminal, sentencing
  • Affirming 324-month sentence on conviction of conspiracy to distribute methamphetamine.
  • Lyons appealed a 324-month sentence following a guilty plea to conspiracy to distribute methamphetamine. He challenged a two-level enhancement for maintaining a drug premises under U.S.S.G. § 2D1.1(b)(12) and a two-level enhancement for his aggravating role in the offense under U.S.S.G. § 3B1.1(c).
  • The court affirmed, finding that the presentence report’s facts were sufficiently reliable and unrebutted by Lyons, and that Lyons failed to show clear error in the application of either enhancement.

• Bell v. United States Parole Commission, 25-60346, petition for review of Parole Commission order
  • per curiam (Richman, Southwick, Willett) (no oral argument), criminal, parole
  • Granting Anders motion to withdraw, and dismissing petition.

• Coastal Dust Control, Inc. d/b/a Sanico, L.L.C. v. State Farm Fire and Casualty Co., 25-60653, appeal from S.D. Miss.
  • per curiam (Smith, Haynes, Engelhardt) (oral argument withdrawn); insurance
  • Affirming summary judgment for insurer on coverage dispute.
  • After a fire destroyed its industrial laundry facility, Sanico incurred “extra expenses” to keep operating by trucking linens to another state and subcontracting with other companies. The dispute centered on interpretation of a “Loss of Income and Extra Expense” endorsement in Sanico’s State Farm business policy—specifically, whether the “to the extent it reduces the amount of loss that otherwise would have been payable” qualifier applied only to subpart c. of the “Extra Expense” definition (as Sanico argued) or to all three subparts a., b., and c. (as State Farm argued).
  • The court affirmed the district court’s grant of summary judgment to State Farm, finding the policy language essentially unambiguous. Applying the “Scope-of-Subparts” canon (material in unindented text relates to all preceding indented subparts), the court concluded the “to the extent” qualifier applied to all three subparts of the extra expense definition, capping recoverable extra expenses at the amount of income Sanico would have lost in a full shutdown. The court rejected Sanico’s arguments based on the last-antecedent doctrine and punctuation canons, noting those arguments would produce nonsensical results and a “runaway of unlimited liability” inconsistent with the economic purposes of the contract.

• United States v. Hastings, 26-10224, appeal from N.D. Tex.
  • per curiam (Stewart, Richman, Higginson) (no oral argument), criminal, sentence reduction
  • Affirming denial of motion for sentence reduction.
  • Federal prisoner Amberly Hastings appealed the denial of her pro se motion seeking correction of her sentence under 18 U.S.C. §§ 3582(c)(1)(B) and 3582(c)(2). She argued that certain convictions were erroneously assessed as criminal history points under U.S.S.G. § 4A1.1 rather than categorized as relevant conduct under U.S.S.G. § 1B1.3, which she claimed unlawfully hindered her eligibility for Amendment 821 relief.
  • The court affirmed, holding that Hastings’s challenge to the calculation of her guidelines range is a “quintessential argument for challenging the fact or duration of confinement” that belongs in a direct appeal or a § 2255 motion, not a § 3582(c) motion.